PURCHASE AGREEMENT BY AND AMONG DOUBLECLICK INC., ALLIANCE DATA SYSTEMS CORPORATION AND ALLIANCE DATA FHC, INC. Dated as of December 22, 2006
Exhibit
2.1
EXECUTION VERSION
BY AND AMONG
DOUBLECLICK INC.,
ALLIANCE DATA SYSTEMS CORPORATION
AND
ALLIANCE DATA FHC, INC.
Dated as of December 22, 2006
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS | 2 | |||||
1.1 |
Defined Terms | 2 | ||||
1.2 |
Other Defined Terms | 11 | ||||
1.3 |
Seller’s Knowledge | 13 | ||||
ARTICLE II PURCHASE AND SALE OF ASSETS AND SUBSIDIARY STOCK | 13 | |||||
2.1 |
Transfer of Assets and Subsidiary Stock; Designation of Buyer Subsidiary | 13 | ||||
2.2 |
Assumption of Liabilities | 13 | ||||
2.3 |
Purchase Price | 15 | ||||
2.4 |
Allocation of Purchase Price | 15 | ||||
2.5 |
Closing Costs; Transfer Taxes and Fees | 15 | ||||
2.6 |
Proration and Certain Related Tax Matters | 16 | ||||
2.7 |
Taxes of Transferred Entities. | 17 | ||||
ARTICLE III CLOSING | 20 | |||||
3.1 |
Closing | 20 | ||||
3.2 |
Payment of Purchase Price | 20 | ||||
3.3 |
Escrow | 20 | ||||
3.4 |
Deliveries at Closing | 20 | ||||
3.5 |
Assumed Contracts | 22 | ||||
3.6 |
Transfer of the Transferred Subsidiary Shares | 23 | ||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER | 24 | |||||
4.1 |
Organization of Seller and the Transferred Entities | 24 | ||||
4.2 |
Authorization of Seller | 24 | ||||
4.3 |
Capitalization and Ownership of the Transferred Entities | 25 | ||||
4.4 |
Contracts | 25 | ||||
4.5 |
No Conflict or Violation; Consents and Approvals | 25 | ||||
4.6 |
Litigation | 26 | ||||
4.7 |
Compliance with Law | 26 | ||||
4.8 |
Permits | 26 | ||||
4.9 |
Employees; Seller Plans | 27 | ||||
4.10 |
Tax Matters | 28 | ||||
4.11 |
No Brokers or Finders | 29 | ||||
4.12 |
Labor Relations | 30 | ||||
4.13 |
Intellectual Property | 30 | ||||
4.14 |
Title and Condition of Assets; Loan Documents | 32 | ||||
4.15 |
Real Property | 32 | ||||
4.16 |
Customers | 32 | ||||
4.17 |
Environmental Matters. | 32 | ||||
i |
4.18 |
Contracts of Transferred Entities | 32 | ||||
4.19 |
Insurance. | 33 | ||||
4.20 |
Revenue and Expenses | 33 | ||||
4.21 |
Accounts Receivable | 33 | ||||
4.22 |
Accounts Payable | 33 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER | 33 | |||||
5.1 |
Organization of Buyer | 33 | ||||
5.2 |
Authorization of Buyer | 34 | ||||
5.3 |
No Conflict or Violation; Consents and Approvals | 34 | ||||
5.4 |
Litigation | 34 | ||||
5.5 |
No Brokers or Finders | 34 | ||||
5.6 |
Financing | 34 | ||||
5.7 |
No Implied Representations | 35 | ||||
ARTICLE VI COVENANTS OF SELLER AND BUYER | 35 | |||||
6.1 |
Conduct of Business | 35 | ||||
6.2 |
Employee Matters | 36 | ||||
6.3 |
Non-Competition; Non-Solicitation | 41 | ||||
6.4 |
Efforts; Further Assurances and Regulatory Approvals | 42 | ||||
6.5 |
No Inconsistent Actions | 44 | ||||
6.6 |
Books and Records | 44 | ||||
6.7 |
Litigation Support | 44 | ||||
6.8 |
Administration of Accounts | 44 | ||||
6.9 |
Resignations | 45 | ||||
6.10 |
Release of the Transferred Entities; Termination of Certain Contracts | 45 | ||||
6.11 |
Release of Seller Obligations | 45 | ||||
6.12 |
Transition Services Agreement | 46 | ||||
6.13 |
Certain Litigation. | 46 | ||||
ARTICLE VII CONDITIONS TO SELLER’S OBLIGATIONS | 48 | |||||
7.1 |
Representations, Warranties and Covenants | 48 | ||||
7.2 |
No Laws or Governmental Orders | 49 | ||||
7.3 |
Antitrust Laws | 49 | ||||
7.4 |
Deliveries | 49 | ||||
ARTICLE VIII CONDITIONS TO BUYER’S OBLIGATIONS | 49 | |||||
8.1 |
Representations, Warranties and Covenants | 49 | ||||
8.2 |
No Laws or Governmental Orders | 49 | ||||
8.3 |
Antitrust Laws | 49 | ||||
8.4 |
Consents | 49 | ||||
8.5 |
Material Adverse Effect | 50 | ||||
8.6 |
Deliveries | 50 | ||||
ii |
ARTICLE IX SURVIVAL AND INDEMNIFICATION |
50 | |||||
9.1 |
Survival of Representations, Warranties and Pre-Closing Covenants | 50 | ||||
9.2 |
Indemnification | 50 | ||||
9.3 |
Limitations on Indemnification | 51 | ||||
9.4 |
Exclusive Remedy; No Consequential, Special or Incidental Damages, etc | 52 | ||||
9.5 |
Indemnification Procedures | 53 | ||||
ARTICLE X MISCELLANEOUS | 54 | |||||
10.1 |
Termination | 54 | ||||
10.2 |
Expenses | 55 | ||||
10.3 |
Confidentiality; Publicity | 55 | ||||
10.4 |
Successors and Assigns; Assignment; No Third Party Beneficiaries | 56 | ||||
10.5 |
Notices | 56 | ||||
10.6 |
Governing Law; Jurisdiction; Consent to Service or Process; Waiver of Jury Trial | 57 | ||||
10.7 |
Entire Agreement; Amendments, Modifications and Waivers | 57 | ||||
10.8 |
Delays or Omissions | 58 | ||||
10.9 |
Severability | 58 | ||||
10.10 |
Interpretation | 58 | ||||
10.11 |
Exhibits and Disclosure Schedules; Construction of Certain Provisions | 58 | ||||
10.12 |
Cumulative Remedies | 59 | ||||
10.13 |
Counterparts | 59 | ||||
iii |
EXHIBITS
Exhibit A
|
- | Form of Xxxx of Sale | ||
Exhibit B
|
- | Form of Assignment of Contracts | ||
Exhibit C
|
- | Form of Assumption Agreement | ||
Exhibit D
|
- | Form of Lease Agreement | ||
Exhibit E
|
- | Form of Assignment of Intellectual Property | ||
Exhibit F
|
- | Form of Share Transfer Deed |
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This PURCHASE AGREEMENT, dated as of December 22, 2006, is by and among DoubleClick Inc., a
Delaware corporation (“Seller”), on the one hand, and Alliance Data Systems Corporation, a
Delaware corporation (“Buyer”), and Alliance Data FHC, Inc., a Delaware corporation
(“Buyer Subsidiary”), on the other hand.
ARTICLE I
DEFINITIONS
DEFINITIONS
1.1 Defined Terms. As used herein, the terms below shall have the following meanings. Any of
such terms, unless the context otherwise requires, may be used in the singular or plural, depending
upon the reference.
“Action” means any action, appeal, petition, plea, charge, complaint, suit, demand,
litigation, arbitration, mediation, hearing, investigation or similar event, occurrence, or
proceeding by or before any court or similar Governmental Authority or arbitral body.
“Affiliate” means, with respect to any specified Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under
common control with, such specified Person. For purposes of this definition, “control” means the
possession of the power to direct or cause the direction of management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
“Agreement” means this Purchase Agreement, including all Exhibits and Schedules hereto
(including the Disclosure Schedules), as the same may be amended, modified or supplemented from
time to time in accordance with its terms.
“Ancillary Agreements” means, collectively, (a) the Xxxx of Sale, (b) the HoldCo
Assignment of Contracts, (c) the Buyer Assignment of Contracts, (d) the Assumption Agreement, (e)
the Lease Agreement, (f) the Assignment of Intellectual Property, (g) the Share Transfer Deed, (h)
the Escrow Agreement and (i) all other instruments, certificates and documents delivered by the
parties pursuant to this Agreement, as each may be amended, modified or supplemented from time to
time in accordance with its terms.
“Assumed Contracts” means all:
(i) Contracts listed on Schedule 1.1(a)(i);
(ii) all Contracts (including, without limitation, any addendums, attachments, work
orders, statements of work and similar supplements) (A) listed on Schedule 1.1(a)(ii)(A),
which Contracts are to be assigned to Contract HoldCo prior to the Closing pursuant to the
provisions of Section 3.5(a), (B) listed on Schedule 1.1(a)(ii)(B), which Contracts are to
be assigned to Buyer upon the receipt of all required consents;
(iii) all other Customer Contracts (including, without limitation, any addendums,
attachments, work orders, statements of work and similar supplements) solely related to the
Business (including, without limitation, the types of Customer Contracts listed on Schedule
1.1(a)(iii)), including any such Customer Contracts that Seller or its Affiliates entered
into after the date hereof, which Customer Contracts Seller will provide to Buyer at least
two Business Days prior to the Closing, and
(iv) all other Contracts (other than (A) Contracts relating to Intellectual Property
that are not Transferred Intellectual Property and (B) Excluded Assets) (including, without
limitation, any addendums, attachments, work orders, statements of
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work and similar supplements) to which Seller or its Affiliate is a party that are
solely related to the Business (including, without limitation, the Contracts listed on
Schedule 1.1(a)(iv)), including such Contracts that Seller or its Affiliates entered into
after the date hereof, which Contracts Seller will provide to Buyer at least two Business
Days prior to the Closing.
“Basis” means any past or current fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction about
which the relevant Person has Knowledge that forms or could form the basis for any specified
consequence.
“Books and Records” means copies of (a) all of Seller’s and its Affiliates’ books,
records, and files pertaining exclusively to the Purchased Assets, the operation of the Business,
the Business Employees or the Transferred Subsidiary prior to the Closing Date which are in the
possession of the Business or the Transferred Subsidiary and (b) to the extent not included in
clause (a) above, all of the Transferred Entities’ books, records and files and any books, records
and files necessary for Buyer to operate the Business.
“Business Contractors” means (i) individual independent contractors of Seller or the
Transferred Entities who are identified on Schedule 4.9(a) and who are providing services to Seller
or the Transferred Entities as of Closing and (ii) any individual independent contractors of Seller
or the Transferred Entities hired after the date of this Agreement but prior to Closing who are
providing services relating to the Business for Seller or the Transferred Entities as of Closing,
which additional individual independent contractors will be set forth in a list that Seller will
provide to Buyer in writing at least two Business Days prior to Closing pursuant to Section 6.2(j).
“Business Day” means any day other than Saturday, Sunday or any day that is a legal
holiday in the United States or a day in which banking institutions in New York are authorized by
Law or other governmental action to close.
“Business Employees” means (i) employees of Seller or the Transferred Entities who are
identified on Schedule 4.9(a) and who are employed by Seller or the Transferred Entities as of
Closing and (ii) any employees of Seller or the Transferred Entities hired after the date of this
Agreement but prior to Closing who are employed in the Business by Seller or the Transferred
Entities as of Closing, which additional employees will be set forth in a list that Seller will
provide to Buyer in writing at least two Business Days prior to Closing pursuant to Section 6.2(j).
“California Action” means the litigation titled Alliance Data Systems Corp. and
Alliance Data Systems FHC v. Silverpop Systems, Index No. CPF-06-506640 (Cal. Sup. Ct., San
Francisco Cty.).
“CIGNA Plan” means the CIGNA medical plan (POS OPEN access plans including Basic,
Core, and Buy-Up Plan) and the CIGNA dental plan (DHMO, PDO and PDO with ortho) maintained by
Seller.
3
“Claim” means any claim, demand, cause of action, chose in action, right of recovery,
suit, litigation or proceeding against any Person.
“COBRA” means the continuation coverage requirements set forth in Sections 601 et seq.
of ERISA and Section 4980B of the Code.
“Code” means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
“Confidentiality Agreement” means that certain confidentiality agreement, dated
November 2, 2006, by and between Buyer and Seller.
“Contract” means any contract, agreement, indenture, instrument, or commitment,
whether oral or written.
“Copyrights” means all copyrights, whether registered or unregistered, in published
works and unpublished works, all pending applications to register the same, all registrations
thereof, and all renewals thereof.
“Corporate Software” means Software licensed from third parties used by Seller both in
the Business and in its other businesses that is network or monitoring software, accounting
software, general software development or control system software, general corporate/back office
software, security software, support software, back up software, general information technology
infrastructure software, or is used for the operation of equipment or hardware that is not included
in the Purchased Assets.
“Customer Contract” means any Contract with a customer of the Business.
“Disclosure Schedules” means the disclosure schedules delivered by Seller to Buyer on
the date hereof which, among other things, set forth certain exceptions to the representations and
warranties contained in Article IV hereof. Each reference in this Agreement to any numbered
Schedule is a reference to that numbered Schedule in the Disclosure Schedules.
“Email Purchase Agreement” means the Purchase Agreement, dated as of February 13,
2006, between Seller, Buyer and Buyer Subsidiary, as amended or supplemented from time to time.
“Employee Records” means, with respect to Buyer Employees, copies of all job-related
employment documents with the exception of non-work-related medical records or other records the
transfer of which to Buyer in connection with the acquisition of the Business and the Purchased
Assets would be in violation of applicable Law.
“Encumbrance” means any lien, pledge, charge, preemptive right, mortgage or other
security interest.
“Equity Commitments” means (a) options, warrants, convertible securities, exchangeable
securities, subscription rights, conversion rights, exchange rights or other similar rights, (b)
statutory pre-emptive rights or pre-emptive rights granted under a Person’s constituent
4
documents and (c) stock appreciation rights, phantom stock, profit participation or other
similar rights.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Excluded Assets” means any and all assets, properties, rights or interests not
described in the definition of Purchased Assets in this Section 1.1. For the avoidance of doubt,
the Excluded Assets include, without limitation, the following:
(a) the consideration delivered by Buyer to Seller pursuant to this Agreement;
(b) all cash, cash equivalents, bank deposits, securities, bank accounts and other
investments relating to operation of the Business or the Purchased Assets or generated by
the Business or the Purchased Assets prior to the Closing;
(c) all accounts receivable, other than the accounts receivable included in the
definition of Purchased Assets;
(d) any of Seller’s and its Affiliates’ corporate franchises, constituent documents,
corporate seals, minute books and other corporate records, except for such franchises,
constituent documents, seals, books and other records related to the Transferred Entities;
(e) all capital stock of any Person, other than the stock of the Transferred Entities;
(f) all of Seller’s and its Affiliates’ rights and remedies pursuant to this Agreement,
the Ancillary Agreements and the Confidentiality Agreement;
(g) all assets of Seller or any Affiliate of Seller not used solely in the operation of
the Business;
(h) all Contracts between or among Seller and its Affiliates;
(i) except as set forth in Section 6.2 hereof, all assets relating to or funding any
Seller Plan;
(j) all refunds, credits or claims for refunds or credits related to Taxes for which
Seller or any Affiliate thereof is liable;
(k) all personnel records relating to any Business Employee or any other employee of
Seller and its Affiliates, other than the Employee Records or other records specifically
required by Law to be disclosed;
5
(l) all insurance policies and binders relating to the Business or the Purchased Assets
held by Seller and its Affiliates and all Claims, credits or rights thereunder;
(m) all Intellectual Property that is not Transferred Intellectual Property, including
all Corporate Software, De Minimis Software and the Patent titled “Method and system for
sharing anonymous user information” (US Appln. No. 09/983,493);
(n) all Fixtures and Equipment, other than the Fixtures and Equipment included in the
definition of Purchased Assets; and
(o) all Contracts relating to the maintenance of Fixtures and Equipment that are used
by Seller both in the Business and in its other businesses.
“Excluded Receivables” means all accounts receivable relating to any Contracts that
are not included in the Purchased Assets.
“Existing Litigation” means, collectively, the New York Action, the Subpoena Action,
the Texas Action and the California Action.
“Fixtures and Equipment” means all of the equipment, furniture, fixtures, furnishings,
machinery and other tangible personal property owned by Seller.
“GAAP” means generally accepted accounting principles and practices in effect from
time to time in the United States of America.
“Governmental Authority” means any court, government (federal, state, provincial,
territorial, local, foreign or multinational) or other regulatory, administrative or governmental
agency, authority or instrumentality.
“Governmental Order” means any judgment, decision, consent decree, injunction, ruling,
writ or other Order of or entered by any Governmental Authority that is binding on any Person or
its property under applicable Law.
“HoldCo Contracts” means those Customer Contracts set forth on Schedule 1.1(a)(ii)(A)
that will be assigned to Contract HoldCo prior to the Closing pursuant to the provisions of Section
3.5(a).
“HSR Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder.
“Intellectual Property” means any Trademarks, Patents, Copyrights, Software and Trade
Secrets, including all proprietary rights related to the foregoing.
“Know-How” means information, knowledge, experience, formulae, data flow, charts,
designs, diagrams and all other information of a like nature.
“Laws” means any laws, statutes, ordinances, regulations, rules, executive orders,
court decisions and orders of any Governmental Authority.
6
“Liabilities” means any direct or indirect liability, indebtedness, obligation,
commitment, expense, Claim, deficiency, guaranty or endorsement of or by any Person of any type,
whether accrued or unaccrued, absolute or contingent, matured or unmatured, liquidated or
unliquidated, asserted or unasserted, known or unknown, whenever arising, including all costs and
expenses relating thereto, and including, without limitation, those liabilities, indebtedness and
obligations arising under any Law, Claim, threatened Claim, Governmental Order or any award of any
arbitrator of any kind, and those arising under any Contract, agreement, commitment or undertaking.
“Loan Documents” has the meaning ascribed to such term in each of (i) the First Lien
Credit Agreement, dated as of July 13, 2005, among Click SubCo Corp., Seller, the several banks and
other financial institutions or entities from time to time parties thereto, Bear, Xxxxxxx & Co.
Inc. and Credit Suisse, as joint lead arrangers and joint bookrunners, Credit Suisse, as
syndication agent, and Bear Xxxxxxx Corporate Lending Inc., as administrative agent and as
collateral agent and (ii) the Second Lien Credit Agreement, dated as of July 13, 2005, among Click
SubCo Corp., Seller, the several banks and other financial institutions or entities from time to
time parties thereto, Bear, Xxxxxxx & Co. Inc. and Credit Suisse, as joint lead arrangers and joint
bookrunners, Credit Suisse, as syndication agent, AbleCo Finance LLC, as documentation agent, and
Bear Xxxxxxx Corporate Lending Inc., as administrative agent and as collateral agent.
“Losses” means any and all actual costs, losses, damages, Liabilities, penalties and
expenses (including reasonable legal fees and out-of-pocket disbursements).
“Material Adverse Effect” means any material adverse effect on the assets, financial
condition or results of operations of the Business, taken as a whole, that was not reasonably
foreseeable at the date hereof; provided that any such change or effect arising out of or
resulting from (a) any change in market, economic or political conditions generally or in the
industries in which the Business operates, whether as the result of an act of war or terrorism or
otherwise, (b) any change in Law, rule, regulation or GAAP or interpretations thereof, (c) any
adverse change in or effect on the Business or the Purchased Assets which is cured to Buyer’s
reasonable satisfaction (including by the payment of money) by Seller or an Affiliate of Seller
before the termination of this Agreement in accordance with its terms or (d) this Agreement or the
transactions contemplated hereby, including, without limitation, the announcement or pendency
thereof, shall not be considered when determining whether a Material Adverse Effect has occurred
and shall not constitute a Material Adverse Effect.
“New York Action” means the litigation titled Alliance Data Systems Corp. and Alliance
Data FHC, Inc. v. DoubleClick, Inc., No. 602559/06 (N.Y. Sup. Ct. N.Y. Cty.) and all appeals from
such Action.
“Open Source Software” means any Software that is generally available to the public in
source code form.
“Order” means any order, ruling, decision, verdict, decree, writ, subpoena, mandate,
precept, command, directive, consent, approval, award, judgment, injunction, or other similar
determination or finding by, before, or under the supervision of any Governmental Authority,
arbitrator or mediator.
7
“Patents” means all (a) patents, patent applications, and patent disclosures and all
extensions, reissues, divisionals, continuations, continuations-in-part, reissues, and
reexaminations thereto, and (b) business methods, inventions, and discoveries whether or not
patentable.
“Permits” means all licenses, permits, orders, consents, approvals, registrations,
authorizations and qualifications with any Governmental Authority or under any Law.
“Permitted Encumbrances” means (a) Encumbrances imposed by Law, such as carriers’,
warehousemen’s, mechanics’, materialmen’s, landlords’, laborers’, suppliers’ and vendors’ liens
incurred in the ordinary course of business consistent with past practice and securing obligations
which are not yet due or which are being contested in good faith, (b) Permitted Tax Liens, (c)
zoning, entitlement, conservation restriction and other land use and environmental regulations
imposed by Governmental Authorities, (d) easements, covenants, rights-of-way or similar
restrictions of record, (e) liens under the Loan Documents (which liens will terminate with respect
to the Purchased Assets from and after the Closing), (f) such other Encumbrances or imperfections
in or failure of title which would not reasonably be expected to materially impair the value or
Seller’s ability to use any affected asset, and (g) any extensions, renewals and replacements of
any of the foregoing.
“Permitted Tax Liens” means (a) Encumbrances securing the payment of Taxes which are
either not delinquent or which are being contested in good faith by appropriate proceedings and (b)
Encumbrances for current Taxes not yet due and payable.
“Person” means an individual, a partnership, a corporation, a limited liability
company, a trust, an unincorporated organization, a Governmental Authority or any other entity.
“Preliminary Injunction” means the three orders entered by the New York Supreme Court
in the New York Action on August 30, 2006 and October 26, 2006.
“Purchased Assets” means all of Seller’s and its Affiliates’ right, title and interest
in and to the following assets of the Business:
(a) the Assumed Contracts;
(b) the accounts receivable set forth on Schedule 1.1(b) (unless settled in the
ordinary course prior to the Closing) and those incurred in the ordinary course of the
Business prior to the Closing, such that Buyer receives the accounts receivable of the
Business as of the Closing Date;
(c) the Fixtures and Equipment set forth in Schedule 1.1(c);
(d) the leased personal computers and related equipment used solely by Buyer Employees
set forth in Schedule 1.1(d);
(e) Books and Records, except to the extent they contain trade secrets of Seller or its
Affiliates not used primarily in the Business and not necessary for the operation of the
Business;
8
(f) the Transferred Intellectual Property;
(g) goodwill that is related solely to the Business;
(h) all funded assets held under the Transferred Entity Plans;
(i) any security deposits associated with the Contracts set forth on Schedule 4.15(b);
and
(j) all of Buyer’s and its Affiliates’ rights and remedies pursuant to this Agreement,
the Ancillary Agreements and the Confidentiality Agreement.
Notwithstanding the foregoing, the Purchased Assets shall not include any of the
Excluded Assets.
“Representative” means, with respect to any Person, any officer, director, principal,
manager, member, attorney, agent, employee or other authorized representative of such Person.
“Retained Liabilities” means the following Liabilities of Seller and its Affiliates
which will not be assumed by Buyer:
(a) all Liabilities of Seller and its Affiliates related solely to Excluded Assets;
(b) all Liabilities of Seller and its Affiliates (other than the Transferred Entities) for
Taxes related to the Purchased Assets and the Business for periods ending on or prior to the
Closing Date;
(c) all Liabilities arising under or with respect to Seller Plans (other than any Transferred
Entity Plans), except as otherwise set forth in Sections 2.2 or 6.2 hereof or Schedule 2.2(a);
(d) subject to and except as set forth in Sections 2.2 or 6.2 hereof, all Liabilities for
wages, or other benefits, overtime, workers compensation benefits, occupational safety and health
liabilities and other similar Liabilities, including, without limitation, any other employment or
employment related matters asserted under Laws respecting employment or employment practices in
respect of Business Employees relating to the periods before the Closing Date;
(e) all Liabilities of Seller and its Affiliates relating to any indebtedness for borrowed
money;
(f) all Liabilities of Seller and its Affiliates relating to any broker, finder, investment
banker or similar agent retained by Seller or its Affiliates in connection with the transactions
contemplated hereby; and
(g) all Liabilities of Seller under this Agreement.
9
“Seller Plans” means all employee benefit plans (as defined in Section 3(3) of ERISA,
whether or not subject to ERISA) and all other stock option, stock purchase, restricted stock,
bonus, deferred compensation, pension, retirement, profit-sharing, thrift, savings, employment,
retention, termination, severance, change of control, compensation, life insurance, workers’
compensation, unemployment benefits, vacation, sick leave, disability, salary continuation,
medical, health or other plans, agreements, policies or arrangements maintained or contributed to
by, or required to be maintained or contributed to by, Seller or any of its Affiliates that cover,
or otherwise provide any benefit to a Business Employee or former employee of the Business.
“Seller Restricted Business” means the ownership, development and/or operation of a
cooperative database which consists primarily of name, address and data of actual purchase
transactions (e.g. value and timing of purchases) provided by a group of customers that is
processed, modeled, analyzed, selected or otherwise manipulated primarily to create lists of
persons’ names for direct mail purposes of such customers (which excludes online display, search,
affiliate, network or other similar online advertising purposes).
“Software” means computer software or middleware (source code and object code),
including customizations, modifications and configurations thereof and data and related
documentation.
“Subpoena Action” means the litigation titled In the Matter of the Application of Akin
Gump Xxxxxxx Xxxxx & Xxxx LLP for an Order to Take the Deposition of DoubleClick, Inc. For Use in
an Action Pending in the State of Texas Entitled Alliance Data Systems Corporation and Alliance
Data FHC, Inc. v. Silverpop Systems, Inc., No. 113284/06 (N.Y. Sup. Ct. N.Y. Cty.).
“Taxes” means all federal, state, provincial, local or foreign taxes (including
franchise taxes), charges, fees, levies or other assessments imposed by any Taxing Authority and
based on or measured solely with respect to net income or profits, including any interest,
penalties or additions attributable or imposed with respect thereto, and all taxes, charges,
levies, fees or other assessments, including, but not limited to, transfer, gross receipt, sales,
use, customs duties, goods and services, service, occupation, ad valorem, property, capital,
payroll, personal property, excise, severance, premium, stamp, documentary, license, registration,
social security, employment, unemployment, disability, workers’ compensation premiums, employer
health tax levies, employment insurance premiums, environmental (including taxes under Section 59A
of the Code), add-on, value-added, withholding (whether payable directly or by withholding and
whether or not requiring the filing of a Tax Return therefor), commercial rent and occupancy taxes,
and any estimated taxes, deficiency assessments, interest, penalties and additions to tax or
additional amounts in connection therewith, imposed by any Taxing Authority.
“Tax Return” means any return, report or similar statement or form required to be
filed with respect to any Tax (including any attached schedules and related or supporting
information), including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
10
“Taxing Authority” means any Governmental Authority responsible for the
imposition of any Tax or exercising Tax regulatory authority.
“Texas Action” means the litigation titled Alliance Data Systems Corporation and
Alliance Data FHC, Inc. v. Silverpop Systems, Inc., Xx. 00-00000-X (Xxxxxx Xxxxxx, Xxxxx).
“Threatened” means a demand or statement has been made in writing or a written notice
has been given.
“Trade Secrets” means all trade secrets and confidential proprietary business and
technical information (including ideas, research and development, Know-How, formulas, compositions,
manufacturing and production processes and techniques, technical data, designs, drawings,
specifications, customer lists and business and marketing plans and proposals).
“Trademarks” means all registered and unregistered trademarks, service marks, trade
dress, logos, trade names, corporate names, domain names and other source identifiers, and all
applications, registrations, and renewals in connection therewith, along with the goodwill of any
businesses symbolized thereby.
“Transferred Intellectual Property” means (i) all Patents, Trademarks, Copyrights and
Software listed on Schedule 1.1(e), (ii) all Trade Secrets, unregistered Trademarks and
unregistered Copyrights used exclusively in the operation of the Business, (iii) all Contracts
listed on Schedule 1.1(a)(i) and (iv) all licenses for Software licensed from third parties which
are used exclusively in the operation of the Business (other than any licenses for Corporate
Software or De Minimis Software or that are granted pursuant to an agreement used both in the
Business and in one or more of Seller’s other businesses). For the avoidance of doubt, the
Transferred Intellectual Property shall not include the DOUBLECLICK Trademark or any Trademarks
similar thereto.
“Transition Services Agreement” means the Transition Services Agreement, dated as of
April 3, 2006, by and between Seller, Buyer and Buyer Subsidiary, as amended or supplemented from
time to time.
“Viral Software” means any Open Source Software licensed to Seller under a license
agreement that requires, as a condition of being distributed or otherwise, that the source code for
Software that uses such Open Source Software be made available to licensees to whom such Software
is distributed, including without limitation any Open Source Software licensed under the GNU Public
License, the GNU Library (or Lesser) General Public License, or the Mozilla Public License.
1.2 Other Defined Terms. The following terms shall have the meanings defined for such
terms in the Sections set forth below:
Term | Section | |||
Abacus Ireland
|
Recitals | |||
Abacus UK
|
Recitals | |||
Alliance Business
|
Recitals | |||
Asset Purchase
|
Recitals |
11
Term | Section | |||
Assignment of Intellectual Property
|
3.4 | (a) | ||
Assumed Liabilities
|
2.2 | |||
Assumption Agreement
|
3.4 | (a) | ||
Audit Notice
|
2.7 | (f) | ||
Xxxx of Sale
|
3.4 | (a) | ||
Bonuses
|
6.2 | (e) | ||
Business
|
Recitals | |||
Buyer
|
Preamble | |||
Buyer Assignment of Contracts
|
3.4 | (a) | ||
Buyer 401(k) Plan
|
6.2 | (d) | ||
Buyer Employee
|
6.2 | (a) | ||
Buyer Indemnified Parties
|
9.2 | (a) | ||
Buyer Plans
|
6.2 | (b) | ||
Buyer Proration Amount
|
2.6 | (a) | ||
Buyer Subsidiary
|
Preamble | |||
Buyer Welfare Plans
|
6.2 | (c) | ||
Cash Amount
|
2.3 | |||
Civil-Law Notary
|
3.6 | (a) | ||
Claim Notice
|
9.5 | (a) | ||
Closing
|
3.1 | |||
Closing Date
|
3.1 | |||
Closing Period
|
2.7 | (c) | ||
Contract HoldCo
|
Recitals | |||
De Minimis Software
|
4.13 | (f) | ||
Dispute
|
10.6 | (b) | ||
DMS Business
|
Recitals | |||
Environmental Law
|
4.17 | (b) | ||
ERISA Affiliate
|
4.9 | (e) | ||
Escrow Agent
|
3.3 | |||
Escrow Agreement
|
3.3 | |||
HoldCo Assignment of Contracts
|
3.4 | (a) | ||
Incremental Cost
|
6.2 | (k) | ||
Indemnified Claim
|
9.5 | (b) | ||
Independent Appraiser
|
2.4 | (a) | ||
Insured or Third Party Indemnified Loss
|
9.3 | (b) | ||
Lease Agreement
|
3.4 | (a) | ||
Material Agreements
|
4.4 | (a) | ||
New Litigation
|
6.13 | (a) | ||
Post-Closing Partial Period
|
2.6 | (a) | ||
Pre-Closing Partial Period
|
2.6 | (a) | ||
Purchase Price
|
2.3 | |||
Purchase Price Allocation Schedule
|
2.4 | |||
Regulatory Approvals
|
6.4 | (b) | ||
Regulatory Law
|
6.4 | (b) |
12
Term | Section | |||
Seller
|
Preamble | |||
Seller 401(k) Plan
|
6.2 | (d) | ||
Seller Guarantees
|
6.11 | (a) | ||
Seller Indemnified Parties
|
9.2 | (b) | ||
Seller Proration Amount
|
2.6 | (a) | ||
Seller Restricted Business
|
6.3(a | )(i) | ||
Seller Restricted Territory
|
6.3(a | )(i) | ||
Seller’s Knowledge
|
1.3 | |||
Seller Welfare Plans
|
6.2 | (c) | ||
Share Transfer Deed
|
3.6 | (b) | ||
Stock Purchase
|
Recitals | |||
Subsidiary Stock
|
Recitals | |||
Tax Claim
|
2.7 | (h) | ||
Third Party Claim
|
9.5 | (a) | ||
Transfer Fees
|
2.5 | |||
Transferred Entity
|
Recitals | |||
Transferred Entity Plans
|
2.2 | (a) | ||
Transferred Subsidiary
|
Recitals | |||
Transferred Subsidiary Shares
|
3.1 | |||
WARN Act
|
6.2 | (f) |
1.3 Seller’s Knowledge. Whenever a phrase herein is qualified by “to Seller’s Knowledge”
or a similar phrase, it shall mean the actual knowledge of the employees of Seller listed in
Schedule 1.3 after due investigation of Seller employees responsible for the Business.
ARTICLE II
PURCHASE AND SALE OF ASSETS AND SUBSIDIARY STOCK
PURCHASE AND SALE OF ASSETS AND SUBSIDIARY STOCK
2.1 Transfer of Assets and Subsidiary Stock; Designation of Buyer Subsidiary.
(a) Upon the terms and subject to the conditions set forth in this Agreement, at the Closing,
Seller shall sell, convey, transfer, assign and deliver, or will cause its Affiliates to sell,
convey, transfer, assign and deliver, to Buyer, and Buyer shall purchase and acquire from Seller
and its Affiliates, all of Seller’s and its Affiliates’ right, title and interest in and to the
Purchased Assets and the Subsidiary Stock. Notwithstanding anything herein to the contrary, Buyer
shall not acquire any rights to the Excluded Assets.
(b) Subject to Section 10.4, Buyer shall be entitled to designate in writing one or more
wholly-owned subsidiaries of Buyer to receive, in total, all (but not less than all) of Seller’s
and its Affiliates’ right, title and interest in and to the Purchased Assets and the Subsidiary
Stock; provided, however, that Buyer shall remain fully responsible for the
performance of all of its obligations hereunder as if no such designation had been made.
2.2 Assumption of Liabilities. Upon the terms and subject to the conditions set forth in
this Agreement, from and after the Closing, Buyer shall assume, pay, perform and
13
discharge in due course each of the following Liabilities, other than Retained Liabilities (the “Assumed
Liabilities”):
(a) all Liabilities (i) with respect to Business Employees and Business Contractors for which
Buyer is responsible pursuant to Section 6.2, (ii) arising on, in connection with or after the
Closing with respect to Business Employees (regardless of whether such Business Employees become
Buyer Employees, but only to the extent such Business Employees do not continue their employment
with Seller following the Closing), including, without limitation, any notification, consultation,
severance, termination or long service entitlement obligations with respect to such Business
Employees with respect to any termination of employment occurring on or after the Closing, but
excluding (x) any retention or change-of-control bonus payments that may become payable under the
retention agreements listed under the heading “Employment Agreements, Retention Agreements and
Miscellaneous” on Schedule 4.9(b) (provided, however, that any severance
obligations under such retention agreements arising on, in connection with or after the Closing
shall constitute an Assumed Liability) and (y) any payments, and reimbursement obligations relating
thereto, set forth on Schedule 2.2(a), and (iii) with respect to the Seller Plans that are
maintained or sponsored by the Transferred Entities (the “Transferred Entity Plans”) as set
forth in Schedule 4.9(b).
(b) all Liabilities for Taxes with respect to (i) the Business (other than with respect to the
Transferred Entities) or the Purchased Assets (other than those Taxes for which Seller is liable
pursuant to Section 2.6 hereof and those Taxes included in Retained Liabilities), (ii) the Business
Employees on or after the Closing Date and (iii) all Liabilities with respect to any Tax that may
be imposed by any Governmental Authority or Taxing Authority on the ownership, sale, operation or
use of the Business (other than with respect to the Transferred Entities) or the Purchased Assets
on or after the Closing Date;
(c) all Liabilities arising out of, relating to or in connection with any Claim involving or
relating to the Business, the Purchased Assets, the Transferred Entities or the Subsidiary Stock;
(d) all accounts payable relating to the Business, the Purchased Assets, the Transferred
Entities or the Subsidiary Stock as set forth on Schedule 2.2(d) (unless settled in the ordinary
course prior to the Closing) and those incurred in the ordinary course of the Business prior to the
Closing, such that Buyer assumes the accounts payable of the Business as of the Closing Date;
(e) without limiting Section 3.5, all Liabilities under the Assumed Contracts;
(f) without limiting the generality of the foregoing, all Liabilities arising out of or
relating to the ownership, sale, operation or use of the Business, the Purchased Assets, the
Transferred Entities or the Subsidiary Stock after the Closing; and
(g) all Liabilities of Buyer under this Agreement.
Notwithstanding the foregoing, the Assumed Liabilities shall not include any of the Retained
Liabilities.
14
2.3 Purchase Price. The purchase price for the Purchased Assets and the Subsidiary
Stock (the “Purchase Price”) shall be (a) an amount in cash equal to four hundred thirty
five million dollars ($435,000,000) (the “Cash Amount”), plus (b) the amounts payable to
Seller pursuant to Section 6.2(k), plus (c) the cost of the Work (as defined in the Lease
Agreement) (subject to a maximum cost of $400,000) plus (d) the assumption of the Assumed
Liabilities.
2.4 Allocation of Purchase Price
(a) Seller and Buyer agree that as soon as reasonably practical after the Closing, and prior
to the filing of any Tax Return which includes information related to the transactions contemplated
by this Agreement, the Purchase Price shall be allocated among the Purchased Assets (including the
assets held by Contract HoldCo) and the Subsidiary
Stock (other than the limited liability company
interests of Contract HoldCo), and the portion of such Purchase Price allocated to the Purchased
Assets shall be further allocated among such assets, with all such allocations made in accordance
with an allocation schedule (the “Purchase Price Allocation Schedule”) proposed by Seller
and reasonably acceptable to Buyer, which shall be prepared in a manner required by Section 1060 of
the Code and other applicable Law and delivered by Seller to Buyer within thirty (30) days after
the Closing. Within fifteen (15) days after Buyer’s receipt of such schedule, Seller and Buyer
shall discuss the allocation of the Purchase Price and attempt in good faith to reach agreement
with respect thereto. Seller and Buyer shall jointly agree to obtain the services of an
independent appraiser (the “Independent Appraiser”) to assist the parties in determining
the fair value of the Purchased Assets if agreement is not reached with respect to the Purchase
Price Allocation Schedule. If such an appraisal is made, both Seller and Buyer agree to accept the
Independent Appraiser’s determination of the fair value of the Purchased Assets. The parties shall
jointly select the Independent Appraiser. The cost of the appraisal shall be borne equally by
Seller and Buyer. If agreement is reached with respect to the allocation of the Purchase Price,
Seller and Buyer shall prepare mutually acceptable and substantially identical IRS Form 8594 “Asset
Acquisition Statements Under Section 1060” consistent with the Purchase Price Allocation Schedule,
which the parties shall use to report the transactions contemplated by this Agreement to the
applicable Taxing Authorities, and the parties shall not take any position inconsistent therewith
on any Tax
Return or before any Taxing Authority. Each of Seller and Buyer agree to provide the other
promptly with any other information required to complete IRS Form 8594.
(b) Any payment made after the Closing Date pursuant to this Agreement, shall, to the extent
traceable to a particular asset as mutually agreed upon by Buyer and Seller, be allocated to, and
thereby increase or decrease as the case may be, the portion of the Purchase Price allocated to
such asset. To the extent that any such post-closing payment cannot be traced to any particular
transferred asset, such payment shall be apportioned to fixed and/or intangible assets as mutually
agreed upon by Buyer and Seller. After making the purchase price adjustments contemplated by this
Section 2.4(b), Seller shall promptly furnish Buyer with a revised Purchase Price Allocation
Schedule.
2.5
Closing Costs; Transfer Taxes and Fees (a) . Buyer shall be responsible for and
shall pay (a) all sales, use, transfer and similar Taxes and fees, if any, imposed by reason of the
transfer of the Business, the Purchased Assets, the Transferred Entities and the Subsidiary
15
Stock
provided hereunder (and any deficiency, interest or penalty asserted with respect thereto) and (b)
all recording, filing and registration fees or other charges in connection with or as a direct
result of the transfer of the Business, the Purchased Assets, the Transferred Entities or the
Subsidiary Stock(collectively, the “Transfer Fees”); provided that the costs
referred to in Article 5 of the Share Transfer Deed shall not
exceed € 1,500. Buyer shall
indemnify, defend, and hold harmless Seller and its Affiliates with respect to such Transfer Fees.
Buyer shall file all necessary documentation and Tax Returns with respect to such Transfer Fees and
Seller shall reasonably cooperate upon Buyer’s request.
2.6 Proration and Certain Related Tax Matters.
(a) Proration. Except as provided in this Agreement, Buyer and Seller agree that the
real property, intangible and personal property Taxes levied on or with respect to the Business
(other than with respect to the Transferred Entities) or Purchased Assets will be prorated as of
the Closing Date, with Seller or an Affiliate of Seller liable to the extent such items relate to
(i) any time period ending on or prior to the Closing Date and (ii) any time period beginning
before the Closing Date and ending after the Closing Date, but only with respect to the portion of
such time period ending on the Closing Date (such portion, a “Pre-Closing Partial Period”)
(the sum of all such amounts for which Seller or an Affiliate of Seller is liable, the “Seller
Proration Amount”), and Buyer liable to the extent such items relate to (i) any time period
beginning after the Closing Date and (ii) any time period beginning before the Closing Date and
ending after the Closing Date, but only with respect to the portion of such time period beginning
after the Closing Date (such portion, a “Post-Closing Partial Period”) (the sum of all such
amounts for which Buyer is liable, the “Buyer Proration Amount”).
(b) Calculation. In connection with the prorations referred to in clause (a) above,
all real property, intangible and personal property Taxes levied with respect to the
Business (other than with respect to the Transferred Entities) or Purchased Assets for a
taxable period which includes (but does not end on) the Closing Date shall be apportioned between
Seller on the one hand and Buyer on the other hand based on the number of days of the Pre-Closing
Partial Period and the number of days of the Post-Closing Partial Period. In the event that actual
figures are not available at the time of calculation, the proration shall be based upon the actual
Taxes or fees for the preceding year (or appropriate period) for which actual Taxes or fees are
available and such Taxes or fees shall be re-prorated and payment attributable to such re-proration
shall be made within twenty (20) days of the date that the actual final amounts become available.
Seller and Buyer agree to furnish each other with such documents and other records as may be
reasonably requested in order to confirm all adjustment and proration calculations made pursuant to
this Section 2.6.
(c) Tax Returns. With respect to Taxes to be prorated in accordance with this Section
2.6, Seller shall prepare and timely file all Tax Returns required to be filed after the Closing
with respect to the Business (other than with respect to the Transferred Entities) or Purchased
Assets wherein proration is required as a result of Seller’s and its Affiliates’ ownership of said
assets prior to the Closing Date, if any, and shall duly and timely pay the Seller Proration Amount
(and Buyer shall pay the Buyer Proration Amount to Seller). Seller’s preparation of any such Tax
Returns shall be subject to Buyer’s approval. Seller shall make such
16
Tax Returns available for
Buyer’s review and approval no later than thirty (30) Business Days prior to the due date for
filing such Tax Return.
(d) Cooperation. Each of Buyer and Seller shall provide the other with such
assistance as may reasonably be requested by the other party in connection with the preparation of
any Tax Return, any audit or other examination by any Taxing Authority, or any judicial or
administrative proceedings relating to Liability for Taxes with respect to the Business, Purchased
Assets, Transferred Entities or Subsidiary Stock. Any information obtained pursuant to this
Section 2.6(d) or pursuant to any other Section hereof providing for the sharing of information or
review of any Tax Return or other schedule relating to Taxes shall be kept confidential by the
parties hereto in accordance with the Confidentiality Agreement.
2.7 Taxes of Transferred Entities.
(a) Taxable Periods Ending on or Before the Closing Date. Seller shall be liable for,
and shall indemnify and hold Buyer and the Transferred Entities harmless from, all Taxes for any
taxable year or taxable period ending before the Closing Date due or payable by a Transferred
Entity.
(b) Taxable Periods Commencing on or after the Closing Date. Buyer shall be liable
for, and shall indemnify and hold Seller harmless from, all Taxes for any taxable year or taxable
period commencing on or after the Closing Date due or payable by a Transferred Entity.
(c) Taxable Period Commencing before the Closing Date and ending after the Closing
Date. Buyer shall cause the Transferred Entities to pay all Taxes due for any taxable year or
taxable period commencing before and ending after the Closing Date (the “Closing Period”).
Upon the receipt of timely notice from Buyer, Seller shall pay to the Transferred
Entities prior to the date that any payment for such Taxes is due, an amount equal to the
Taxes that would have been due if the Closing Period had ended on the day immediately preceding the
Closing Date.
(d) Tax Refunds or Credits. Any refunds or credits of Taxes, to the extent that such
refunds or credits are attributable to taxable periods ending before the Closing Date shall be for
the account of Seller. To the extent that such refunds or credits are attributable to taxable
periods beginning on or after the Closing Date, such refunds or credits shall be for the account of
Buyer. To the extent that such refunds or credits are attributable to Taxes for the Closing
Period, such refunds or credits shall be for the account of the party who bears responsibility for
such Taxes, pursuant to the provisions of Section 2.7(c). Buyer shall cause the Transferred
Entities to promptly forward to Seller any such refunds or credits due Seller, after receipt
thereof by Buyer or the Transferred Entities. Seller shall promptly forward to the Transferred
Entities any refunds or credits due the Transferred Entities, after receipt thereof by the Seller.
(e) Tax Returns.
(i) Seller shall be responsible for all Tax Returns of the Transferred Entities
required to be filed by Law with respect to periods that end before the Closing Date.
Seller shall provide such Tax Returns to Buyer at least thirty (30) Business Days prior to
17
the due date of such Tax Returns, and such Tax Returns shall be subject to the approval of
Buyer, such approval not to be unreasonably withheld.
(ii) Buyer shall be responsible for all Tax Returns of the Transferred Entities with
respect to the Closing Period. Buyer shall consult with Seller with respect to the
preparation of such Tax Returns, shall provide a copy of such Tax Returns to Seller at least
thirty (30) Business Days prior to the due date of such returns, and such returns shall be
subject to the approval of Seller, such approval not to be unreasonably withheld.
(iii) With respect to Tax Returns of the Transferred Entities for periods beginning on
or after the Closing Date, Buyer shall be responsible for all such Tax Returns of the
Transferred Entities.
(f) Audit Examination.
(i) Upon receipt of notice (“Audit Notice”) of an audit relating to the
Transferred Entities for a period that ends before the Closing Date, Buyer shall, within
thirty (30) Business Days of the receipt of such Audit Notice, provide notice to Seller of
such audit, provided that such failure to provide Audit Notice hereunder shall not affect
Buyer’s right to indemnification hereunder, except to the extent that Seller is materially
prejudiced by such delay. Seller shall have the opportunity upon written notice to Buyer to
assume such contest and Buyer shall to the extent legally permissible execute any powers of
attorney or similar documents to allow Seller to control such contest. With respect to any
audit for which Seller has assumed control, Seller shall keep Buyer apprised of material
issues in the audit and shall consult in good faith with Buyer in
respect of such issues, provided, further that Seller shall not settle any such audit
without the consent of Buyer, such consent not to be unreasonably withheld.
(ii) In respect of any periods commencing before the Closing Date and ending after the
Closing Date, Buyer shall keep Seller apprised of material issues in the audit that relate
to Seller’s indemnification obligations and shall consult in good faith with Seller in
respect of such issues, provided, further that Buyer shall not settle any such audit without
the consent of Seller, such consent not to be unreasonably withheld.
(g) Survival. The indemnities provided in this Section 2.7 shall survive the Closing
until the first anniversary of the Closing Date and then expire.
(h) Tax Claims. Notwithstanding any other provisions of this Agreement, the following
provisions shall apply with respect to any Tax Claim:
(i) If a claim shall be made by any Taxing Authority, which, if successful, might
result in an indemnity payment to an indemnified party pursuant to this Section 2.7, then
such indemnified party shall give timely notice to the indemnifying party in writing of such
claim and of any counterclaim the indemnified party proposes to assert (a “Tax
Claim”); provided, however, the failure to give such notice shall not affect the
indemnification provided hereunder except to the extent the indemnifying party has been
materially prejudiced as a result of such failure.
18
(ii) With respect to any Tax Claim relating to a period ending before the Closing Date,
Seller shall, solely at its own cost and expense, control all proceedings and may make all
decisions taken in connection with such Tax Claim (including selection of counsel) and,
without limiting the foregoing, may in its sole discretion pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with any Taxing Authority with
respect thereto, and may, in its sole discretion, either pay the Tax claimed and xxx for a
refund where applicable law permits such refund suits or contest the Tax Claim in any
permissible manner. Notwithstanding the foregoing, Seller shall not settle such Tax Claim
without the prior written consent of Buyer, which consent shall not be unreasonably
withheld, and Buyer, and counsel of its own choosing, shall have the right to participate
fully in all aspects of the prosecution or defense of such Tax Claim if it reasonably
determines that such Tax Claim could have a material adverse impact on the Taxes of any of
the Transferred Entities in a taxable period beginning on or after the Closing Date.
(iii) Seller and Buyer shall jointly control and participate in all proceedings taken
in connection with any Tax Claim relating to Taxes of the Transferred Entities for a Closing
Period, and shall bear their own respective costs and expenses. Neither Seller nor Buyer
shall settle any such Tax Claim without the prior written consent of the other.
(iv) Buyer shall control all proceedings with respect to any Tax Claim relating to a
period beginning on or after the Closing Date and may make all decisions taken in connection
with such Tax Claim (including selection of counsel) and, without limiting
the foregoing, may in its sole discretion pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with any Taxing Authority with respect
thereto, and may, in its sole discretion, either pay the Tax claimed and xxx for a refund
where applicable law permits such refund suits or contest the Tax Claim in any permissible
manner.
(v) To the extent any indemnification provided in this Section 2.7 is covered by
insurance or any other right to indemnity held by any indemnified party, such indemnified
party shall only be entitled to indemnification pursuant to this Section 2.7 with respect to
the amount of Taxes in excess of the net cash proceeds received by such indemnified party
pursuant to such insurance or such other right to indemnity. If, following the receipt of
any indemnity payments pursuant to this Section 2.7, the indemnified party obtains any
insurance or indemnity recovery from a third party insurance provider or third party
indemnitor with respect to such Taxes, then such indemnified party shall promptly pay over
to the indemnifying party the amount of the net cash proceeds received by such indemnified
party pursuant to such insurance or indemnity up to, but not in excess of, the amount of the
indemnity payments made by the indemnifying party pursuant to such Taxes. The parties agree
that no insurance company or third party indemnitor shall have any right of subrogation
under this Section 2.7 and the parties agree that this Section 2.7 is not for the benefit of
any third party insurance provider or third party indemnitor.
19
ARTICLE III
CLOSING
CLOSING
3.1 Closing. Unless this Agreement shall have been terminated in accordance with Section
10.1 hereof, the closing of the purchase and sale of the Purchased Assets and the Subsidiary Stock,
the assumption of the Assumed Liabilities and the consummation of the other transactions
contemplated herein (the “Closing”) shall be held at 10:00 a.m., New York time, at the
offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, on the
third Business Day following the satisfaction or waiver of all of the conditions precedent to the
obligations of the parties set forth in Articles VII and VIII (other than conditions which are not
capable of being satisfied until the Closing Date) (the “Closing Date”), unless the parties
hereto otherwise agree in writing. Notwithstanding the foregoing, the closing of the purchase,
sale and transfer of the shares in the capital of the Transferred Subsidiary (the “Transferred
Subsidiary Shares”) shall be held concurrently with the Closing at the offices of Houthoff
Buruma N.V. at Xxxxxx Xxxxxxxxxxx 00, 0000 XX Xxxxxxxxx.
3.2 Payment of Purchase Price. At the Closing, Buyer will pay to Seller an amount in cash equal to the Cash Amount plus
$200,000 (which amount represents payment for a portion of the costs of the Work (as defined in the
Lease Agreement)), by wire transfer of immediately available funds to an account designated in
writing by Seller at least two Business Days prior to the Closing.
3.3 Escrow. At the Closing, Buyer, Seller and an escrow agent reasonably acceptable to
Buyer and Seller (the “Escrow Agent”) will execute an escrow agreement in a form reasonably
acceptable to Buyer and Seller (the “Escrow Agreement”) and Buyer will deposit with the
Escrow Agent $200,000 in cash by wire transfer of immediately available funds to an account
designated in writing by the Escrow Agent at least two Business Days prior to the Closing. The
Escrow Agreement shall provide that upon the Final Completion (as defined in the Lease Agreement),
the Escrow Agent shall pay to Seller an amount in cash equal to the amount by which the cost of the
Work exceeds $200,000, up to the maximum amount held in the escrow account, and shall thereafter
pay to Buyer an amount in cash equal to the amount, if any, remaining in the escrow account.
(a) To effect the transactions contemplated hereby, Seller shall, at the Closing, deliver to
Buyer, or cause to be delivered to Buyer (unless previously delivered):
(i) one or more bills of sale in the form attached hereto as Exhibit A
conveying in the aggregate all of Seller’s and its Affiliates’ owned tangible personal
property included in the Purchased Assets to Buyer, executed by Seller or an Affiliate
thereof, as applicable (“Xxxx of Sale”);
(ii) subject to Section 3.5 hereof, one or more assignments in the form attached hereto
as Exhibit B assigning the HoldCo Contracts to Contract HoldCo executed by Seller or
an Affiliate thereof, as applicable, on the one hand, and Contract HoldCo, on the other
hand, which assignment(s), subject to Section 3.5(a), shall be dated
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no more than ten (10)
Business Days following the date hereof (the “HoldCo Assignment of Contracts”);
(iii) subject to Section 3.5 hereof, one or more assignments in the form attached
hereto as Exhibit B assigning the Assumed Contracts (other than those set forth in
(A) Schedule 1.1(ii)(A) and (B) those set forth in Schedule 1.1(a)(i) and Schedule
1.1(a)(ii)(B) for which the required consents have not been obtained) to Buyer, executed by
Seller or an Affiliate thereof, as applicable (the “Buyer Assignment of Contracts”);
(iv) one or more instruments of assumption in the form attached hereto as Exhibit
C, evidencing Buyer’s assumption, in accordance with Section 2.2 hereof, of the Assumed
Liabilities, executed by Seller (the “Assumption Agreement”);
(v) the Lease Agreement in the form attached hereto as Exhibit D, executed by
Seller (the “Lease Agreement”), which Lease Agreement shall supersede and replace
the Transition Services Agreement;
(vi) subject to the consent of the counterparty thereto, if required, one or more
assignment documents in the form attached hereto as Exhibit F assigning the
Transferred Intellectual Property to Buyer (except for (A) such Transferred Intellectual Property transferred pursuant to the Buyer Assignment of Contracts and (B) those Assumed
Contracts set forth in Schedule 1.1(a) for which the required consents have not been
obtained), executed by Seller or an Affiliate thereof, as applicable (the “Assignment of
Intellectual Property”);
(vii) all stock certificates relating to the Subsidiary Stock (other than the
Transferred Subsidiary Shares, which shares are uncertificated) and the other Transferred
Entities, duly endorsed or accompanied by stock powers duly executed and, notwithstanding
Section 2.5, with all necessary stock transfer taxes attached thereto and canceled;
(viii) the Escrow Agreement executed by Seller;
(ix) evidence of all third party consents obtained in satisfaction of the condition set
forth in Section 8.4 hereof;
(x) the certificates and other documents required to be delivered at Closing as
described in Article VIII;
(xi) a certificate (in form and substance reasonably satisfactory to Buyer) certifying
that transactions contemplated by this Agreement are exempt from withholding under Section
1445 of the Code; and
(xii) any other documents or instruments as may be appropriate to carry out the
transactions contemplated by this Agreement as reasonably requested by Buyer, including the
documents specified in Section 3.6.
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(b) To effect the transactions contemplated hereby, Buyer shall, at the Closing, deliver
to Seller, or cause to be delivered to Seller (unless previously delivered):
(i) an amount equal to the Cash Amount, payable in accordance with Section 3.2 hereof;
(ii) the Xxxx of Sale executed by Buyer;
(iii) the Buyer Assignment of Contracts executed by either Buyer or Buyer Subsidiary,
if applicable;
(iv) the Assumption Agreement executed by Buyer;
(v) the Lease Agreement executed by Buyer;
(vi) the Assignment of Intellectual Property executed by Buyer;
(vii) the Escrow Agreement executed by Buyer;
(viii) the certificates and other documents required to be delivered at the Closing as
described in Article VII; and
(ix) any other documents or instruments as may be appropriate to carry out the
transactions contemplated by this Agreement as reasonably requested by Seller, including the
documents specified in Section 3.6.
(c) To the extent that a form of any document to be delivered hereunder is not attached as an
Exhibit hereto, such documents shall be in form and substance, and shall be executed and delivered
in a manner, reasonably satisfactory to the parties.
3.5 Assumed Contracts.
(a) Seller will assign the HoldCo Contracts to Contract HoldCo within ten (10) Business Days
following the date hereof; provided that, with respect to any particular Contract, such
date may be extended and the assignee of such Contract may be changed if the parties mutually agree
(such agreement not to be unreasonably withheld). Except for the assignment to Contract HoldCo of
the HoldCo Contracts set forth on Schedule 1.1(a)(ii)(A), Seller will consider in good faith
proposals by Buyer for the transfer prior to Closing of some or all of the other Purchased Assets
that are held by Seller to Contract HoldCo or Abacus UK; provided that no such transfers
shall take place without Seller’s prior consent, which shall remain in Seller’s sole discretion.
(b) With respect to all Assumed Contracts (other than the HoldCo Contracts or those Customer
Contracts set forth on Schedule 1.1(a)(iii) that are to be assigned directly to Buyer at the
Closing pursuant to this Agreement), notwithstanding anything in this Agreement to the contrary,
this Agreement shall not constitute an agreement to assign any such contract or any claim or right
or any obligation or benefit arising thereunder or resulting therefrom if an attempted assignment
or transfer thereof, without the consent of a counterparty thereto, would
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constitute a breach or default thereof or give rise to a right of termination or cancellation
thereunder. Seller and Buyer will use their commercially reasonable efforts to obtain the required
consents from the counterparties to those Assumed Contracts set forth on Schedules 1.1(a)(i) or
1.1(a)(ii)(B) as soon as reasonably possible after the date hereof. If such consent is not
obtained for those Assumed Contracts set forth on Schedules 1.1(a)(i) or 1.1(a)(ii)(B), Seller and
Buyer will use their commercially reasonable efforts, to the extent such Assumed Contract permits
(with the parties sharing equally any out-of-pocket expenses) to subcontract or sublicense, as
applicable, the provision or receipt of the goods and services or rights under such Assumed
Contract to Buyer, or provide to Buyer the benefits or obligations under any such Assumed Contract
or claim or right, including, without limitation, enforcement for the benefit of Buyer (at Buyer’s
sole expense) of any and all rights of Seller against a third party thereto arising out of the
breach, default, termination or cancellation by such third party or otherwise or, at Seller’s
option, to the maximum extent permitted by Law and such Assumed Contract, as applicable, appoint
Buyer to be Seller’s representative and agent with respect to such Assumed Contract, as applicable.
(c) Following the Closing, Buyer and Seller shall continue to cooperate and use commercially
reasonable efforts to effect the assignment to Buyer of those Assumed Contracts set forth on
Schedule 1.1(a)(i) and Schedule 1.1(a)(ii)(B). Buyer shall indemnify, defend and hold harmless
Seller and its Affiliates from and against any and all Losses actually incurred by Seller or its
Affiliates in connection with, arising out of or resulting from any actions taken or not taken by
Buyer after the Closing Date as subcontractor, representative, agent or obligor with respect to any
such Assumed Contract or the non-compliance by Buyer on or following the Closing Date with any Laws
applicable to any such Assumed Contract or for any and all Losses otherwise arising out of or
relating to any such Assumed Contract.
(d) After the Closing, in the event that Seller determines that any Contract of Seller or an
Affiliate of Seller was historically treated as a Contract solely related to the Business that
should have been included in the Assumed Contracts, Seller and Buyer shall cooperate in assigning
such Contract to Buyer as soon as practicable, and upon such assignment such Contract shall be
deemed to be an Assumed Contract for all purposes of this Agreement. Both before and after the
Closing, Seller agrees to use its commercially reasonable efforts to provide Buyer with a true and
correct copy of any Assumed Contract set forth on Schedules 1.1(a)(i) and 1.1(a)(ii)(B) that Seller
was unable to locate and provide to Buyer prior to the date hereof.
3.6 Transfer of the Transferred Subsidiary Shares. To effect the transfer of the Transferred Subsidiary Shares:
(a) Seller shall cause the Transferred Subsidiary to deliver its shareholders’ register to the
relevant civil-law notary at the offices of Houthoff Buruma N.V. at Gustav Mahlerplein 50, 1082 MA
Amsterdam (the “Civil-Law Notary”) at or prior to the Closing, in which the transfer of the
Transferred Subsidiary Shares to Buyer shall be registered upon Closing;
(b) Seller and the Buyer shall execute a notarial deed of transfer in the form attached hereto
as Exhibit F (the “Share Transfer Deed”). The Share Transfer Deed shall be executed before
the Civil-Law Notary on the basis of powers of attorney duly executed by
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DoubleClick International Internet Advertising Limited, Buyer and the Transferred Subsidiary. Each
of Seller and Buyer shall cause such powers of attorney to be delivered to the Civil-Law Notary no
later than one Business Day prior to the Closing; and
(c) Upon execution of the Share Transfer Deed and registration of the transfer of the
Transferred Subsidiary Shares to Buyer in the shareholders’ register of the Transferred Subsidiary,
Seller and Buyer shall instruct the Civil-Law Notary to return the shareholders’ register to the
address of the Transferred Subsidiary.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer, except as otherwise set forth in the
applicable section of the Disclosure Schedules, as follows:
4.1 Organization of Seller and the Transferred Entities.
(a) Seller is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Seller has the requisite corporate power and authority to conduct
its business as it is presently being conducted and to own, lease and operate the Business, the
Purchased Assets, the Transferred Entities and the Subsidiary Stock, except for any failures to
have such power and authority that would not have a material effect on the Business or Seller’s
ability to consummate the transactions contemplated hereby. Seller is duly qualified or licensed
to do business in each jurisdiction in which the nature of the business conducted by Seller makes
such qualification necessary, except for any failures to be so qualified or licensed that would not
have a Material Adverse Effect.
(b) Except as set forth in Schedule 4.1(b), each of the Transferred Entities has been duly
incorporated, registered, formed or organized and is validly existing and in good standing under
the laws of their state of incorporation, formation or organization. Each of the Transferred
Entities has the requisite power and authority to conduct its business as it is presently being
conducted and to own, lease and operate its business, except for any failures to have such power
and authority that would not have a material effect on the Business or Seller’s ability to
consummate the transactions contemplated hereby. Each of the Transferred Entities is duly
qualified or licensed to do business in each jurisdiction in which the nature of the business
conducted by such Transferred Entity makes such qualification necessary, except for any failures to
be so qualified or licensed that would not have a Material Adverse Effect.
4.2 Authorization of Seller. Seller has all requisite corporate power and authority and has taken all corporate action
necessary, to execute and deliver this Agreement and the Ancillary Agreements to which it is a
party, to consummate the transactions contemplated hereby and thereby and to perform its
obligations hereunder and thereunder. This Agreement has been duly executed and delivered by
Seller, and, at Closing, each Ancillary Agreement to which Seller is a party will have been
executed and delivered by Seller. Assuming the due authorization, execution and delivery of this
Agreement and each Ancillary Agreement by Buyer, this Agreement and each Ancillary Agreement
constitute a legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with their terms.
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4.3 Capitalization and Ownership of the Transferred Entities.
(a) All of the outstanding capital stock and other equity interests of each of the Transferred
Entities are duly authorized, validly issued, fully paid and nonassessable.
(b) Seller (i) directly owns all of the outstanding equity interests in Contract HoldCo and
(ii) indirectly owns through its wholly-owned subsidiary, DoubleClick International Internet
Advertising Limited, an Irish limited company, all of the outstanding capital stock and other
equity interests of the Transferred Subsidiary, in each case free and clear of all Encumbrances.
The Transferred Subsidiary directly owns all of the outstanding capital stock and other equity
interests of each other Transferred Entity (other than Contract HoldCo), free and clear of all
Encumbrances.
(c) Schedule 4.3(c)(i) sets forth the authorized capital stock, the number of shares of issued
and outstanding capital stock and the ownership with respect to each Transferred Entity. Except as
indicated on Schedule 4.3(c)(ii) hereto, there are no Equity Commitments of any kind relating to
the sale, issuance or voting of any shares of capital stock of any class of, or other ownership
interests in, any Transferred Entity which have been issued, granted or entered into by Seller or a
Transferred Entity, and no such Equity Commitments will arise as a result of the transactions
contemplated hereby. Except as set forth on Schedule 4.3(c)(iii), there are no outstanding
contractual or other obligations of any Transferred Entity to repurchase, redeem or otherwise
acquire any shares of its capital stock.
4.4 Contracts.
(a) Schedule 4.4(a) sets forth the name of the customer to each Assumed Contract that is a
Customer Contract and, with respect to clause (i) of this Section 4.4(a), the title of the
underlying Assumed Contract that (i) required payments in the 10 months ended October 31, 2006 to
Seller or to an Affiliate of Seller in excess of $250,000 in the aggregate, (ii) with respect to
the DMS Business, has been signed within the previous twelve months and which Seller anticipates in
good faith is likely to generate payments in excess of $250,000 in the aggregate during the
12-month period after the implementation of the applicable database has been accepted by the
applicable customer or (iii) with respect to the Alliance Business, has been signed within the
previous twelve months and which the Customer party thereto has, based on information provided to
Seller by such Customer, an annual circulation volume in excess of 50 million (the “Material
Agreements”);
(b) Except as set forth in Schedule 4.4(b) and subject to Section 3.5, all Material Agreements
are valid, binding, and enforceable obligations of Seller or an Affiliate of Seller, and to
Seller’s Knowledge, any other party thereto, in accordance with their terms, and neither Seller nor
any Affiliate of Seller, nor, to Seller’s Knowledge any other party thereto, is in material default
under any Material Agreement.
4.5 No Conflict or Violation; Consents and Approvals.
(a) Except as set forth in Schedule 4.5(a), subject to the following proviso, neither the
execution, delivery or performance by Seller of this Agreement or the Ancillary Agreements, nor the
consummation by Seller of the transactions contemplated hereby and
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thereby, will (i) violate or
conflict with any provision of the certificate of incorporation or bylaws of Seller or any such
organizational document of any of the Transferred Entities, (ii) violate, conflict with, or result
in or constitute a breach or default under (with the giving of notice or passage of time or both),
or result in the termination of, or accelerate the performance required by, or result in a right of
termination or acceleration under, any Contract to which Seller is a party or by which the
Purchased Assets, the Transferred Entities or Subsidiary Stock are bound or (iii) violate any Law
or Governmental Order applicable to Seller, the Business, the Purchased Assets, the Transferred
Entities or the Subsidiary Stock excluding from the foregoing clauses (ii) and (iii) above, such
violations, conflicts, breaches, defaults, terminations or accelerations which would not have a
material effect on the Business or Seller’s ability to consummate the transactions contemplated
hereby; provided, however, that, notwithstanding the foregoing, Seller makes none
of the foregoing representations and warranties in clauses (ii) or (iii) with respect to the HoldCo
Contracts or their assignment to (x) Contract HoldCo pursuant to the provisions of Section 3.5(a)
or (y) the subsequent transfer of such entities to Buyer or a wholly-owned subsidiary of Buyer.
(b) Except as set forth in Schedule 4.5(b), no consent, approval of notice under, order or
authorization of, or registration, declaration or filing with, any Governmental Authority is
required by or with respect to Seller or any Affiliate of Seller as a result of the execution,
delivery and performance of this Agreement by Seller or the consummation of the transactions
contemplated hereby, except (i) for those required under or in relation to the HSR Act or any other
Regulatory Law and (ii) where any failures to obtain such consents, approvals, orders or
authorizations or to make such registrations, declarations or filings would not have a material
effect on the Business or Seller’s ability to consummate the transactions contemplated hereby.
4.6 Litigation. Except as set forth in Schedule 4.6, (a) there is no Claim pending or, to Seller’s Knowledge,
threatened against or affecting the Business, the Purchased Assets, any of the Transferred
Entities, the Subsidiary Stock or the transactions contemplated hereby and (b) Seller and its
Affiliates are not subject to any Governmental Order affecting the Business, the Purchased Assets,
the Transferred Entities, the Subsidiary Stock or the transactions contemplated hereby.
4.7 Compliance with Law.
(a) Seller is in compliance in all material respects with all applicable Laws and Governmental
Orders relating to the Business, the Business Employees, the Purchased Assets, the Transferred
Entities and the Subsidiary Stock, except as set forth on Schedule 4.7(a).
(b) Each of the Transferred Entities is in compliance in all material respects with all
applicable Laws and Governmental Orders relating to its business and properties, except as set
forth on Schedule 4.7(b).
4.8 Permits.
(a) Except as set forth on Schedule 4.8(a), (i) Seller holds all material Permits necessary
for the lawful conduct of the Business as it is presently being conducted, (ii) all
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Permits are in
full force and effect and (iii) Seller is in compliance in all material respects with the terms of
its Permits.
(b) Except as set forth on Schedule 4.8(b), (i) each of the Transferred Entities holds all
material Permits necessary for the lawful conduct of its business as it is presently being
conducted, (ii) all such Permits are in full force and effect and (iii) each of the Transferred
Entities is in compliance in all material respects with the terms of its Permits.
(a) Schedule 4.9(a) sets forth a true and complete list of all Business Employees and Business
Contractors, together with their salaries, commission plan (if applicable) and location, as of
December 1, 2006. Schedule 4.9(a) shall be updated following the date hereof pursuant to Section
6.2(j). As of the date hereof, no member of senior management of the Transferred Entities has
provided notice of resignation that is effective following completions of the transactions
contemplated hereby.
(b) Schedule 4.9(b) sets forth a list of all Transferred Entity Plans (which plans will be
assumed by Buyer pursuant to Section 2.2 and which are noted with an asterisk on Schedule 4.9(b))
and all other material Seller Plans as of the date hereof. Except as set forth in Schedule 4.9(b),
no such Seller Plan is (i) subject to Title IV of ERISA or (ii) a “multiemployer
plan” within the meaning of Section 3(37) of ERISA. Seller has made available to Buyer a
true, current and complete copy of documents governing each Seller Plan listed on Schedule 4.9(b)
as of the date hereof. Each Seller Plan intended to be “qualified” under Section 401(a) of the
Code is so qualified, and Seller has made available to Buyer the most recently received IRS
determination letter issued with respect to each such Seller Plan.
(c) All Seller Plans have been established, registered, maintained and administered in
compliance with their terms and with the requirements of any applicable Law, including, but not
limited to, ERISA and the Code, except where the failure to comply would not result in a material
liability to Buyer, and all obligations with respect to the Business Employees under the Seller
Plans incurred on or prior to Closing have been or shall be paid by Seller, except for an
obligation Buyer has expressly assumed under Sections 2.2 or 6.2.
(d) No Seller Plan subject to Title IV of ERISA was terminated within six years prior to the
date hereof. Seller has not engaged in any transaction that could reasonably be expected to give
rise to liability under Section 4069 or 502 of ERISA that could become a liability of Buyer.
Neither Seller nor any ERISA Affiliate has within six years prior to the date hereof been subject
to any lien imposed under Section 412(n) of the Code or Section 302(f) of ERISA with respect to any
Seller Plan.
(e) Except as set forth on Schedule 4.9(e), no event has occurred that could reasonably be
expected to subject Buyer or the Transferred Entities to (x) any liability under any Title IV of
ERISA or Section 412 of the Code or (y) any material liability (other than liabilities to pay
benefits under the Transferred Entity Plans) under applicable benefits Law in any jurisdiction
outside the United States with respect to any Seller Plan or any other employee benefit plan or
arrangement maintained or contributed to by Seller or any entity, trade or
27
business, whether or not
incorporated, which together with Seller or the Transferred Entities would be deemed to be a
“single employer” within the meaning of Section 414(b), (c) or (m) of the Code or Section
4001(b)(1) of ERISA (an “ERISA Affiliate”).
(f) None of the Transferred Entity Plans is subject to ERISA or intended to be qualified under
Section 401(a) of the Code.
(g) None of the assets of the Seller 401(k) Plan transferred pursuant to Section 6.2(d) is
subject to the requirements of Section 417 of the Code, and the conversion to cash and transfer of
such assets will be permitted under the Seller 401(k) Plan and will not violate any provision of
ERISA or any tax qualification requirement of the Code.
(h) All contributions, premiums and other amounts required to be paid under the Transferred
Entity Plans or by applicable Law have been paid on a timely basis in accordance with such
applicable Law and the terms of such Transferred Entity Plans, except for any failure to make such
payments that would not result in a material liability to Buyer.
(i) To Seller’s Knowledge, none of the issuers, trustees and/or administrators under any of
the Transferred Entity Plans are in breach of their fiduciary obligations thereunder.
(j) Except as disclosed in Schedule 4.9(a), no Business Employee is on short-term or long-term
disability leave, secondment, statutory leave of absence or receiving benefits pursuant to any
workers’ compensation legislation or is on any other leave of absence.
(k) Except as disclosed in Schedule 4.9(k), neither Seller nor any of its Affiliates has made
any formal plan or any promise to improve or change the benefits provided under any Transferred
Entity Plan since December 1, 2006.
(l) No material Claim has been made, commenced or, to Seller’s Knowledge, threatened with
respect to any Transferred Entity Plan (other than routine claims for benefits payable in the
ordinary course, and appeals of any denied claims).
(m) No Transferred Entity Plan provides for any bonus, retirement, severance, job security or
similar benefit or any accelerated or enhanced payment or benefit as a result of the transactions
contemplated herein, nor do such transactions or this Agreement create any liabilities (other than
the retention or change-of-control bonus payments and enhanced severance benefits that may become
payable under the retention agreements described on Schedule 4.9(b)) or trigger any expenses under
a Transferred Entity Plan.
4.10 Tax Matters.
(a) Except as set forth on Schedule 4.10(a), Seller has timely filed, or caused to be filed,
with the appropriate Taxing Authorities all material Tax Returns with respect to the Business or
Purchased Assets or Transferred Entities required to be filed through the date hereof and will
timely file any such material Tax Returns required to be filed on or prior to the Closing Date.
All such Tax Returns previously filed are (or to be filed will be) complete and accurate in all
material respects. Except as set forth on Schedule 4.10(a), neither Seller nor any Transferred
Entity has waived any statute of limitations or is the beneficiary of any extension of time within
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which to file any such Tax Return. No action is currently pending or threatened in writing by a
Governmental Authority in a jurisdiction where Seller or any Transferred Entity does not file Tax
Returns that it may be subject to Taxation by that jurisdiction, which relates to the Business,
Purchased Assets or Transferred Entities.
(b) Except as set forth on Schedule 4.10(b), all material Taxes with respect to the Business,
Purchased Assets or Transferred Entities have been timely paid, or will be timely paid.
(c) There are no Encumbrances for Taxes on or against the Business, Purchased Assets or
Transferred Entities, other than Permitted Tax Liens.
(d) Seller has withheld and paid, or has caused to be withheld and paid, all Taxes required to
have been withheld and paid in connection with amounts paid or owed to any employee, independent
contractor, creditor, holder of its equity interests, or other third party, which relates to the
Business, Purchased Assets or Transferred Entities.
(e) Except as set forth on Schedule 4.10(e), there are no actions, suits, proceedings, audits,
investigations or claims in existence, now pending or, to the knowledge of Seller, threatened in
writing against any Transferred Entity in respect of Taxes. No Transferred Entity is negotiating
any final or draft assessment or reassessment in respect of Taxes with any Taxing Authority and no
Transferred Entity has received written notice from any Taxing Authority that an assessment or
reassessment is proposed or may be proposed in respect of Taxes. There is no action concerning any
Tax Liability of any Transferred Entity either (i) claimed or raised or (ii) as to which Seller has
Knowledge, which relates to the Business or Purchased Assets.
(f) Each Transferred Entity is in compliance in all respects with all registration, reporting
and remittance obligations in respect of all federal, provincial and state goods and services or
sales tax legislation and has all necessary documentation to support any material input tax credits
or input tax refunds claimed or to be claimed by any Transferred Entity under any relevant taxing
statute in respect of any taxation period or year for which the applicable limitation period during
which the Taxing Authority may assess or reassess Taxes in respect of such taxation period or year
has not expired.
(g) With respect to taxable periods on or prior to the Closing Date, Seller has taken all
reasonable steps to determine appropriate transfer prices for transactions between the Transferred
Entities and the Seller. Neither Seller nor any Transferred Entity reasonably expects to be
subject to any transfer pricing adjustment with respect to such transactions pursuant to Section
482 of the Code.
(h) Each Transferred Entity has made adequate provision in its books and records (including
accounting records) for all Taxes for periods ending on or before the Closing Date for which Tax
Returns have not yet been filed and which have not yet been required to have been paid.
4.11 No Brokers or Finders. Except for Banc of America Securities LLC, the fees of which are the sole responsibility of
Seller, Seller has not engaged or made any agreement
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with any broker, finder, investment banker or
similar agent or any Person or firm which will result in the obligation of Buyer to pay any
finder’s fee, brokerage fees or commission or similar payment in connection with the transactions
contemplated hereby.
4.12 Labor Relations. Except as set forth on Schedule 4.12, neither Seller nor any Transferred Entity is a party to or
bound by any collective bargaining agreement with respect to the Business or any of the Business
Employees.
(a) Except as subject to Section 6.4(d), Schedule 1.1(e) contains a list of (i) each
registered Patent, Trademark and Copyright, and (ii) any material Software (and any application to
register the foregoing) owned by Seller and necessary to operate the Business substantially as
currently conducted. Schedule 1.1(a)(i) contains a list of all Contracts for Transferred
Intellectual Property owned by a third party to be assigned to Buyer by Seller.
(b) Except as set forth on Schedule 4.13(b), to Seller’s Knowledge, no Seller owned Software
included in the Transferred Intellectual Property is Viral Software. Such Schedule 4.13(b) shall
identify Seller-owned Software that is Viral Software and the license agreement that causes such
Software to be identified on Schedule 4.13(b). Seller has provided a true and complete copy of any
license agreement identified on Schedule 4.13(b), and to Seller’s Knowledge, Seller is in
compliance in all material respects with the terms of each such license agreement.
(c) Seller has taken all reasonable precautions to protect the secrecy and confidentiality of
Trade Secrets included in the Transferred Intellectual Property. To Seller’s Knowledge, no such
Trade Secret has been used, divulged (except pursuant to confidentiality agreements) or
appropriated by or to any third person, is subject to any adverse claim nor has any adverse claim
been threatened with respect thereto, and there is no basis therefor.
(d) Except as set forth on Schedule 4.13(d), all current employees of Seller who have made
significant contributions to the Transferred Intellectual Property have executed written Contracts
with Seller that assign to Seller all rights to any inventions, improvements, discoveries or
information relating to such Transferred Intellectual Property. To Seller’s Knowledge, no employee
of Seller has entered into any Contract that requires the employee to transfer, assign or disclose
information concerning his work or her work to any person other than Seller.
(e) Except as set forth on Schedule 4.13(e)(i), to Seller’s Knowledge, all Patents, Trademarks
and Copyrights listed on Schedule 1.1(e) that have been registered with the United States Patent
and Trademark Office, the United States Copyright Office or with a corresponding state or foreign
office are valid and enforceable and no actions (including filing of documents or payments of fees)
are due within 90 days after the Closing. Except as set forth on Schedule 4.13(e)(ii), to Seller’s
Knowledge, all domain names listed on Schedule 1.1(e) are valid and enforceable and no actions
(including filing of documents or payments of fees) are due before July 25, 2007.
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(f) Seller owns or has the right to use pursuant to an enforceable Contract all Intellectual
Property necessary to operate the Business substantially as currently conducted. Except as set
forth in Schedule 4.13(f), and subject to Section 6.4(d), each item of material Intellectual
Property necessary to operate the Business substantially as currently conducted is included in the
Transferred Intellectual Property (except for such Intellectual Property that is generally
commercially available and has a replacement purchase cost of less than $50,000 (“De Minimis
Software”) and Corporate Software).
(g) On or before the Closing, Seller has delivered or made available to Buyer true and
complete copies of all written documentation in its or its outside counsel’s possession evidencing
ownership and prosecution (if applicable) of each item of Seller used registered Intellectual
Property within the Transferred Intellectual Property listed in Schedule 1.1(e). Except as set
forth in Schedule 4.13(g), with respect to each item of registered Intellectual Property within the
Transferred Intellectual Property (including each application to register the foregoing):
(i) Seller possesses all right, title and interest in and to the item, free and clear
of any Encumbrances other than Permitted Encumbrances;
(ii) the item is not subject to any outstanding Order;
(iii) the item has not been involved in any cancellation, opposition, invalidation or
any other Action that challenged the legality, enforceability, validity, use or ownership of
the item; and
(iv) no Action is pending or Threatened (and there is no Basis therefor) which
challenges the legality, enforceability, validity, use or ownership of the item.
(h) Schedule 4.13(h) identifies each Contract pursuant to which Seller has granted to any
Person rights under or with respect to the Transferred Intellectual Property (together with any
exceptions), other than licenses granted in the ordinary course of business. With respect such
Contracts, to Seller’s Knowledge:
(i) the Contract is enforceable;
(ii) the Contract will continue to be enforceable on substantially similar terms
following the consummation of the Transaction;
(iii) no counterparty is in breach of such Contract, and no event has occurred which
with notice or lapse of time would constitute a breach thereunder; and
(iv) no party to the Contract has repudiated any provision thereof.
(i) To Seller’s Knowledge, Seller and its Affiliates have not, through the Business, infringed
upon, misappropriated or otherwise violated any other person’s Intellectual Property. Except as
set forth in Schedule 4.13(i), (x) Seller and its Affiliates have never received any written notice
alleging any such infringement, misappropriation or violation (including any
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Claim that Seller must
license or refrain from using any other person’s Intellectual Property), and (y) to Seller’s
Knowledge, no other Person has infringed upon, misappropriated, or otherwise violated the
Transferred Intellectual Property.
4.14 Title and Condition of Assets; Loan Documents. Except as set forth on Schedule 4.14, (i) Seller and each of the Transferred Entities
has title to the tangible Purchased Assets, free and clear of all Encumbrances other than Permitted
Encumbrances and (ii) the tangible Purchased Assets are generally in good working condition
(subject to normal wear and tear). Seller represents that any and all liens under the Loan
Documents will terminate at Closing.
4.15 Real Property.
(a) None of the Transferred Entities owns any real property.
(b) Schedule 4.15(b) sets forth all real property leased, subleased or licensed by the
Transferred Entities. Seller has delivered to Buyer correct and complete copies of each such
lease, sublease, license or similar agreement, as applicable.
(c) Except for any failures that would not be material to the Business, each Transferred
Entity has a good and valid lease- or sublease-hold interest or a valid license in and to all
leased, subleased or licensed real property, as applicable, in each case free and clear of all
Encumbrances other than Permitted Encumbrances.
4.16 Customers. Schedule 4.16 sets forth, as of the date hereof, a true and correct list of the top 35 customers
of the Business as measured by revenue in the ten months ended October 31, 2006. Excluding
expirations of any Contract pursuant to the terms thereof, as of the date hereof, neither Seller
nor any of the Transferred Entities has received from any such Customer written notice of
termination, and, to Seller’s Knowledge, no such termination has been Threatened by such customer.
(a) All activities of the Business have been conducted in compliance in all material respects
with, and all properties owned, leased or operated by Seller in connections with the Business’s
operations or by any Transferred Entities have and continue to comply in all material respects
with, all Environmental Laws.
(b) As used herein, “Environmental Law” means all applicable federal, state, and local
laws, regulations, licenses, and common law related to the protection of the environment or of
human health and safety (to the extent relating to exposure to hazardous substances), including,
without limitation, the Federal Clean Water Act, Oil Pollution Act, Resource Conservation and
Recovery Act, Clean Air Act, Comprehensive Environmental Response, Compensation and Liability Act
and the Occupational Health and Safety Act, each as amended and currently in effect.
4.18 Contracts of Transferred Entities. Except (i) as set forth on Schedule 4.18, (ii) with respect to the constituent documents of such
entity and (iii) with respect to the Assumed
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Contracts that will be assigned to Contract HoldCo
after the date hereof and prior to the Closing, the Transferred Entities are not party to any other
material Contracts (x) with Seller or any of its Affiliates or (y) with any third party that
involved payments or receipts in excess of $100,000 in the ten months ended October 31, 2006.
4.19 Insurance. Seller and its Affiliates maintain and will maintain (or provide substantially similar
replacements or renewals thereof) through the Closing the insurance policies covering the Business
as set forth on Schedule 4.19. Copies of such insurance policies have been made available to
Buyer. All such policies are valid, enforceable and in full force and effect.
4.20 Revenue and Expenses.
(a) Except as set forth on Schedule 4.20(a)(i), the revenue amounts for the Business for the
fiscal years 2004 and 2005 and the ten months ended October 31, 2006 set forth on Schedule
4.20(a)(ii) have been determined in accordance with the revenue recognition policies applied by
Seller generally during those periods and are based on the books and records of Seller, and such
revenue recognition policies are consistent with GAAP.
(b) Except as set forth on Schedule 4.20(b)(i), the expense amount set forth on Schedule
4.20(b)(ii) fairly presents in all material respects the total operating expenses incurred in the
ten months ended October 31, 2006 by the Business and recorded in accordance with Seller’s
accounting policies. Except as set forth in Schedule 4.20(b)(i), such accounting policies were
consistently applied throughout such ten months ended October 31, 2006.
4.21 Accounts Receivable. All of the accounts receivable set forth on Schedule 1.1(b) arose out of bona fide
transactions in the ordinary course of business of Seller consistent with past practice.
4.22 Accounts Payable. All of the accounts payable set forth on Schedule 2.2(d) were incurred in the ordinary
course of business for the purposes of the Business.
Buyer hereby represents and warrants to Seller as follows:
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5.2 Authorization of Buyer. Buyer has all requisite corporate power and authority, and has taken all corporate action
necessary, to execute and deliver this Agreement and the Ancillary Agreements to which it is a
party, to consummate the transactions contemplated hereby and thereby and to perform its
obligations hereunder and thereunder. This Agreement has been duly executed and delivered by
Buyer, and, at Closing, each Ancillary Agreement to which Buyer is a party will have been executed
and delivered by Buyer. Assuming the due authorization, execution and delivery of this Agreement
and each Ancillary Agreement by Seller, this Agreement and each Ancillary Agreement constitute a
legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with their
terms.
(a) Neither the execution, delivery or performance by Buyer of this Agreement or the Ancillary
Agreements nor the consummation by Buyer of the transactions contemplated hereby and thereby will
(i) violate or conflict with any provision of the certificate of incorporation or bylaws of Buyer,
(ii) violate, conflict with, or result in or constitute a breach or default under (with the giving
of notice or passage of time or both), or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration under, any Contract to
which Buyer is a party or by which its assets are bound or (iii) violate any Law or Governmental
Order applicable to Buyer, except in the case of each of clauses (ii) and (iii) above, for such
violations, conflicts, breaches, defaults, terminations or accelerations which would not materially
adversely affect Buyer or its ability to consummate the transactions contemplated hereby.
(b) No consent, approval, order or authorization of, or registration, declaration or filing
with, any Governmental Authority is required by or with respect to Buyer or any Affiliate of Buyer
as a result of the execution, delivery and performance of this Agreement by Buyer or the
consummation of this transaction, except (i) for those required under or in relation to the HSR Act
or any other Regulatory Law and (ii) where any failures to obtain such consents, approvals, orders
or authorizations or to make such registrations, declarations or filings that would not have a
material adverse effect on Buyer or its ability to consummate the transactions contemplated hereby.
5.4 Litigation. There is no Claim pending or, to the knowledge of Buyer, threatened against Buyer that would
reasonably be expected to materially adversely affect Buyer or its ability to consummate the
transactions contemplated hereby.
5.6 Financing. Buyer has and will have at the Closing cash on hand sufficient, in the aggregate, to consummate
the transactions contemplated by this Agreement and the Ancillary Agreements, to pay the Cash
Amount, and to satisfy all other costs and expenses arising in connection herewith and therewith.
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5.7 No Implied Representations. Notwithstanding anything contained in Article IV or any other provision of this Agreement,
Buyer acknowledges and agrees that Seller is making no representation or warranty whatsoever,
express or implied, beyond those expressly given in this Agreement, including any implied warranty
of merchantability or suitability as to the Purchased Assets, the Business, the Transferred
Entities or the Subsidiary Stock. Buyer further acknowledges and agrees that any cost estimates,
projections and predictions contained or referred to in the materials that have been provided to
Buyer are not and shall not be deemed to be representations or warranties of Seller.
ARTICLE VI
COVENANTS OF SELLER AND BUYER
COVENANTS OF SELLER AND BUYER
Seller and Buyer each covenant with the other as follows:
6.1 Conduct of Business. From the date hereof and until the Closing, Seller shall, and shall cause its Affiliates to,
except as contemplated by this Agreement, as set forth in Schedule 6.1 or as consented to by Buyer
in writing, (i) operate the Business in the ordinary course of business consistent with past
practice and (ii) use its commercially reasonable efforts to preserve and maintain the Purchased
Assets, its business and relationships with the customers and suppliers of the Business and the
Transferred Entities in the ordinary course of business consistent with past practice. Without
limiting the generality of the foregoing, Seller shall not, and shall cause its Affiliates not to,
except as contemplated by this Agreement, as set forth in Schedule 6.1 or as consented to by
Buyer in writing (which consent shall not be unreasonably withheld), take any of the following
actions from the date hereof and until the Closing:
(a) enter into, extend, modify or renew any Assumed Contract, except in the ordinary course of
business consistent with past practice, and, to the extent Seller takes any such actions, it shall
use commercially reasonable efforts to obtain a consent by the counterparty to the assignment of
such Assumed Contract in connection with the transactions contemplated hereby;
(b) sell, assign, transfer, convey, lease, mortgage, pledge or otherwise dispose of or
encumber any material Purchased Assets, or any interests therein, except for dispositions in the
ordinary course of business consistent with past practice and Permitted Encumbrances;
(c) fail to comply in any material respect with all material Laws applicable to the Business;
(d) amend or modify the charter or bylaws or any other organizational documents of any
Transferred Entities;
(e) issue or agree to issue any additional shares of capital stock of any class or series or
any Equity Commitments with respect to any of the Transferred Entities;
(f) increase any salaries or wages of any Business Employee, except for such increases in the
ordinary course of business consistent with past practice or as previously agreed to in writing by
Buyer;
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(g) enter into any new Abacus [IN] Channel Program Contract or new reseller agreement relating
to the Alliance Business that explicitly grants the counterparty thereto the right to use outside
of the Alliance Business Customer data gathered in connection with the Alliance Business;
(h) enter into any new Contract relating to the DMS Business that Seller anticipates in good
faith would be likely to generate payments relating to the DMS Business in excess of $2,000,000
during the 24-month period after the entry into such Contract; or
(i) authorize, commit or agree to take any of the foregoing.
The parties do not intend that the foregoing provisions of this Section 6.1 or any other
provision in this Agreement shall effect an assignment of, or transfer of control related to, the
Purchased Assets prior to obtaining the approval under the HSR Act or any other Regulatory Law.
6.2 Employee Matters.
(a) Buyer will cause the Transferred Entities to continue the employment of the Transferred
Entities’ Business Employees as of the Closing Date and make offers of employment prior to the
Closing Date (to be effective as of the Closing Date) to each of the other Business Employees, in
each case, under employment terms that provide for, if accepted (in the case of offerees) (i) for a
period of at least 12 months after the Closing Date (or such longer period as is required under
applicable Laws), the positions, duties, responsibilities, base salaries, together with bonus and
long-term incentive compensation opportunities and other benefits that, in each case, are
reasonably similar to that which each Business Employee was subject immediately prior to the
Closing and (ii) in the case of the offerees listed on Schedule 6.2(a), a termination and release
of such offeree’s employment agreement with Seller or its Affiliate; provided that if any
applicable Law requires Buyer to offer (or continue employment of a Business Employee on) more
favorable terms to any Business Employee, Buyer will comply with such Law and will make offers (or
continue employment of a Business Employee) on such terms. Buyer will communicate offers of
employment in accordance with applicable Law and in a form determined by Buyer, which form shall be
acceptable to Seller. Each Business Employee who accepts Buyer’s offer of employment or otherwise
commences or continues employment or is deemed to commence or continue employment with Buyer
(including, without limitation, as a result of the operation of Law in any jurisdiction) on or
after the Closing Date shall be referred to as a “Buyer Employee” for purposes of this
Agreement. Additionally, with respect to each Business Contractor, Buyer will (i) either assume
the relevant independent contractor arrangement from Seller or otherwise offer each such Business
Contractor a continued service arrangement as of the Closing Date under similar terms as provided
by Seller or the Transferred Entities immediately prior to the Closing Date and (ii) assume any
termination or other Liabilities arising on, in connection with or after the Closing. Buyer shall
indemnify, defend and hold harmless Seller or its Affiliates from any and all payments, Losses or
other costs that are incurred by Seller and its Affiliates with respect to Liabilities assumed by
Buyer pursuant to Section 2.2(a), including payments, Losses or other costs arising from or in
connection with any failure to inform or consult any Business Employees.
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(b) Effective as of the Closing Date and for a period thereafter of the lesser of 12 months or
the term of employment (or such longer period as is required under applicable Laws), Buyer shall
cause each Buyer Employee who was covered under Seller Plans immediately prior to the Closing to be
covered under employee benefit plans, programs and arrangements maintained or established by Buyer
(the “Buyer Plans”) that are similar in the aggregate to those provided immediately prior
to the Closing and which are disclosed on Schedule 4.9(b); provided that if any applicable
Law requires Buyer to provide coverage on more favorable terms to any Buyer Employee, Buyer will
comply with such Law and will provide coverage on such terms. The Buyer Plans shall recognize each
Buyer Employee’s service with Seller or its Affiliates that is recognized under Seller Plans (and
prior service with Seller’s and its Affiliates’ predecessors or any other entity to the extent such
prior service is recognized under Seller Plans) for all purposes (including an executive only plan
and the safe harbor and profit sharing contribution under 401(k)), including, without limitation,
for purposes of any severance plan maintained by Buyer.
(c) Effective as of the Closing Date, unless otherwise required under applicable Law, all
Business Employees shall cease to be covered by Seller’s and its Affiliates’ employee welfare
benefit plans, programs, policies and arrangements that provide medical and dental coverage, life
and accident insurance, disability coverage and severance pay, other than the Transferred Entity
Plans (collectively, the “Seller Welfare Plans”), except as otherwise noted below with
respect to COBRA continuation coverage. Seller shall retain responsibility for all benefit claims
incurred by Business Employees under the Seller Welfare Plans prior to the Closing Date. For
purposes of this subsection, a claim shall be deemed to have been incurred on the date the medical
service giving rise to the claim is performed. With respect to the Buyer Employees, effective as
of the date a Business Employee becomes a Buyer Employee, Buyer shall cause all applicable Buyer
Plans that provide medical or dental coverage, life and accident insurance, and disability or
similar coverage (collectively, the “Buyer Welfare Plans”) to waive pre-existing condition
exclusions, evidence of insurability provisions, waiting period requirements or similar provisions
to the extent required under the Health Insurance Portability and Accountability Act of 1996. In
addition, Buyer shall or it shall cause the applicable Buyer Welfare Plans to credit Buyer
Employees with amounts credited by Seller or an Affiliate of Seller under Seller’s or such
Affiliates’ health and dental plans toward the satisfaction of annual deductible and out-of-pocket
maximums under such Buyer health and dental plans during the applicable Buyer plan year in which a
Business Employee becomes a Buyer Employee provided Seller provides Buyer with information related
to deductibles and out-of-pocket maximums under the applicable Seller Welfare Plans with respect to
the relevant Buyer Employees within 30 days after the Closing. Buyer shall be responsible for the
administration of and shall assume the obligations with respect to COBRA continuation coverage for
all Business Employees who become “M&A qualified beneficiaries” (as such term is defined in Section
4980B of the Code and the regulations thereunder) on or after the Closing Date. Seller will retain
liabilities for COBRA continuation coverage with respect to any Business Employee and any other M&A
qualified beneficiary who terminates employment prior to the Closing Date.
(d) Effective as of the Closing Date and for a period of at least 12 months thereafter (or
such longer period as is required under applicable Laws), Buyer shall have in effect a plan that
includes a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code
(the “Buyer 401(k) Plan”) that will provide benefits to Buyer Employees who
37
participated in
the Seller’s 401(k) Profit Sharing Plan (the “Seller 401(k) Plan”) that are substantially
similar to those provided by the Seller’s 401(k) Plan as of the Closing Date, and shall take all
reasonable action that is necessary or appropriate to cause such Buyer 401(k) Plan to recognize
prior service with Seller or its Affiliate for purposes of vesting and participation;
provided that if any applicable Law requires Buyer to provide more favorable benefits to
any Buyer Employee, Buyer will comply with such Law and will provide benefits on such terms. Each
Buyer Employee participating in the Seller 401(k) Plan as of the Closing Date shall become a
participant in Buyer 401(k) Plan as of the Closing Date. Buyer and Seller agree to effect a
transfer of the account balances and related liabilities of the Buyer Employees from the Seller
401(k) Plan to the Buyer 401(k) Plan in a manner consistent with the provisions of the Code and
ERISA. Such transfer shall occur on or as soon as practicable after the Closing Date. To
implement such a transfer, Seller shall direct the trustee of the Seller 401(k) Plan to transfer to
the trustee or funding agent of the Buyer 401(k) Plan an amount in cash equal in value to the
account balances of the Buyer Employees covered by the Seller 401(k) Plan as of the date of
transfer; provided that to the extent the account balances to be transferred consist in
whole or in part of outstanding loans, Seller shall direct the trustee of the Seller 401(k) Plan to
transfer to the trustee or funding agent of the Buyer 401(k) Plan, in lieu of cash, the promissory
notes and related documents evidencing such loans. Buyer and Seller shall take such actions as may
be required to effect the assignment of such loans by the trustee of the Seller 401(k) Plan to the
trustee or funding agent of the Buyer 401(k) Plan. Seller shall cause the account balances of the
Buyer Employees under the Seller 401(k) Plan to be fully vested immediately prior to the transfer
to the Buyer 401(k) Plan.
(e) As of the Closing Date, Buyer agrees to take any and all actions necessary or appropriate
to provide that Buyer shall assume and maintain all Liabilities with respect to the variable
compensation and incentive compensation programs and arrangements set forth in Schedule 6.2(e)
(“Bonuses”), and that Seller shall have no further Liability with respect thereto. Buyer
shall pay all Bonuses to the Buyer Employees with respect to the entire calendar year in which the
Closing occurs. The variable compensation and incentive compensation program or arrangement to
which each Business Employee was subject as of December 1, 2006 is indicated on Schedule 4.9(a)
under the column labeled “Commission Plan.”
(f) Buyer shall be responsible for providing or discharging any and all notifications,
benefits and Liabilities to Business Employees and Governmental Authorities under the Worker
Adjustment and Retraining Notification Act of 1988 (the “WARN Act”) or by any other
applicable Laws relating to plant closings, employee separations, employee redundancies or
severance pay that are first required to be provided or discharged on or after the Closing Date,
including pre-closing notice or Liabilities if the actions contemplated hereby or actions by Buyer
on or after the Closing Date result in a notice or notification requirement under such Laws.
Seller shall be responsible for providing or discharging any and all notifications, benefits and
Liabilities to Business Employees and Governmental Authorities under the WARN Act, and any other
non-United States jurisdiction requirements prior to Closing that relates to the effectuation of a
Transfer of Undertaking within that jurisdiction; provided, however, that Buyer
will in no event effect any terminations that will subject Seller to the WARN Act during the 90 day
period following the Closing.
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(g) Buyer shall assume all obligations and Liabilities with respect to the accrued personal,
sick and vacation time of Business Employees who remain employed by Seller through the Closing
Date; provided that Seller provides Buyer with information related to such accrued paid
time off for each Business Employee as soon as reasonably practicable after the Closing, but no
later than 30 days after Closing. Seller will reasonably cooperate with Buyer to facilitate
Buyer’s compliance with the covenants under the preceding sentence. For purposes of determining
the number of days of personal, sick and vacation time to which each Buyer Employee shall be
entitled during the calendar year in which the Closing occurs, Buyer shall assume and honor all
personal, sick and vacation days accrued but not yet taken by Buyer Employees as of the Closing
Date. To the extent that a Buyer Employee is entitled to be paid for any personal, sick and
vacation days, Buyer shall discharge any Liability for such personal, sick and vacation days. For
purposes of this Section 6.2(g), “personal days” shall include sabbatical benefits provided under
the Seller Plans. Buyer shall be responsible for and assume all
Liabilities for short-term disability income benefits payable in respect of periods on or
after the Closing Date for all Business Employees, including, without limitation, those Business
Employees who are receiving short-term disability income benefits as of the Closing Date. Such
employees who are receiving such benefits as of the date hereof are indicated with an asterisk on
Schedule 4.9(a).
(h) Seller shall provide to Buyer, at Buyer’s reasonable request and subject to all applicable
Laws, access to all Employee Records as needed for Buyer to comply with this Section 6.2 prior to
the Closing Date, including, without limitation, Employee Records necessary to administer each
Transferred Entity Plan. Seller and Buyer shall each cooperate with the other and shall provide to
the other such documentation, information and assistance as is reasonably necessary to effect the
provisions of this Section 6.2. Buyer is solely responsible for its use of Employee Records and
other employee information furnished by Seller, and Buyer will indemnify and hold Seller and its
Affiliates harmless from and against any Losses or Liabilities incurred by Seller or an Affiliate
thereof as a result of Buyer’s use of such Employee Records or other employee information.
(i) In the event that Buyer or any of its successors and assigns (i) consolidates with or
merges into any Person and is not the continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or substantially all of its assets or stock to any
Person, then, in each case, proper provision shall be made so that the successors and assigns of
Buyer honor the obligations of Buyer set forth in this Section 6.2.
(j) With respect to the Business Employees and Business Contractors set forth in Schedule
4.9(a), Seller will periodically notify Buyer of any updates to such list, if applicable, but in
any event will deliver an updated list of Business Employees and Business Contractors no later than
two Business Days prior to the Closing.
(k) Buyer shall pay to Seller an amount equal to one half of the amount by which the monthly
medical and dental costs of Business Employees and related beneficiaries under the CIGNA Plan
exceeds $158,500 (such excess, the “Incremental Cost”) for the period beginning on the date
hereof and ending on the Closing Date; provided, that the amount payable by Buyer hereunder shall
not exceed an aggregate of $158,500 per month (such amounts to be pro rated for any partial month).
For purposes of this Section 6.2(k), the Incremental Cost and
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the calculation of the costs under
the Cigna Plan shall not include the amounts of any employee contributions toward the costs of
medical and dental benefits, which contributions will be at substantially the same levels as in
effect during 2006 for the same level of coverage. Subject to Section 6.2(m) and the limitation on
the maximum amount of per month payments set forth in the proviso set forth in the first sentence
of this Section 6.2(k), on the Closing Date and on the last Business Day of each month (or part
thereof) commencing with January 2007 and preceding the Closing Date, Buyer shall pay to Seller, by
wire transfer in immediately available funds to an account designated in writing by Seller, an
amount in cash equal to the Seller’s good faith estimate, based on the historic average of such
costs but including any expected increase, of the Incremental Cost for such month (or part thereof
on a prorated basis, as applicable). Any amounts payable pursuant to this Section 6.2(k) shall
constitute an addition to the Purchase Price.
(l) In the event that this Agreement is terminated pursuant to Section 10.1, Buyer shall pay
to Seller 100% of the Incremental Cost (taking into account any amounts already paid by Buyer
pursuant to Section 6.2(k)) up to a maximum of $250,000 per month (such amounts to be prorated for
any partial month) for the period beginning on January 1, 2007 and ending on the date that is 60
days following the date of such termination. In addition, in the event of such termination, Buyer
will reimburse Seller for the actual cost (not to exceed $50,000) of engaging Administaff with
respect to the matters involving Business Employees that Seller and Administaff had previously
negotiated prior to the date of this Agreement. Notwithstanding the foregoing, this Section 6.2(l)
shall not apply, and Buyer shall not be liable for any payment described herein, in the event that
the Agreement is terminated pursuant to Section 10.1(a)(3). Any amounts payable pursuant to this
Section 6.2(l) shall be paid by Buyer to Seller promptly, and in any event within three Business
Days, following Buyer’s receipt from Seller of an invoice setting forth in reasonable detail
Seller’s calculation of the amount required to be paid pursuant to this Section 6.2(l).
(m) Within 60 days following either the Closing or the 60-day anniversary of the termination
of this Agreement in accordance with Section 10.1, Seller shall provide to Buyer a written
statement setting forth the actual Incremental Cost for each month or part thereof commencing with
January 2007 and ending with the month in which the Closing occurs or the month in which the 60-day
anniversary of the termination of this Agreement occurs, as applicable, along with reasonable
supporting documentation. If ,within 15 days of Buyer’s receipt of the foregoing statement and
supporting documentation, Buyer disputes any part of such statement, the parties shall negotiate in
good faith to settle such dispute and, failing that, shall refer the dispute to a third party
arbitrator reasonably acceptable to each of Buyer and Seller. Both Buyer and Seller agree to
accept the findings of the third party arbitrator. After the actual Incremental Cost for the
relevant period is determined as aforesaid, the parties will calculate the amounts owed under
Section 6.2(k) or (l), as applicable, based on the actual Incremental Cost instead of Seller’s
prior estimates, and if such amounts total less than Buyer paid under Section 6.2(k) or (l), as
applicable, then Seller shall refund the difference to Buyer, and if such amounts total more than
Buyer paid under such applicable section, then Buyer shall pay the difference to Seller (subject to
the limitation on the maximum amount of per month payments set forth in the proviso set forth in
the first sentence of Section 6.2(k) or the first sentence of Section 6.2(l), as applicable), in
each case within three Business Days of the finalization of the actual Incremental Cost.
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(a) Except as explicitly contemplated by this Agreement, from the Closing until eighteen
months after the Closing, Seller will not (and will cause its subsidiaries not to), without the
prior written consent of Buyer, directly or indirectly:
(i) enter into, conduct, carry on or engage in any Seller Restricted Business anywhere
in the world (the “Seller Restricted Territory”); or
(ii) have an equity interest in any Person engaged in a Seller Restricted Business in
the Seller Restricted Territory.
provided, however, that none of the following shall be deemed to violate Sections
6.3(a)(i) or 6.3(a)(ii): (A) the acquisition of Seller or any of its subsidiaries, divisions or
business units by a Person that engages in a Seller Restricted Business; (B) the ownership by
Seller or any of its subsidiaries of less than an aggregate of 5% of any class of voting stock of a
Person engaged, directly or indirectly, in a Seller Restricted Business; (C) the ownership by
Seller or any of its subsidiaries of less than 10% in value of any debt instrument of a Person
engaged, directly or indirectly, in a Seller Restricted Business; or (D) the direct or indirect
acquisition by Seller or any of its subsidiaries of any Person that engages in a Seller Restricted
Business and the subsequent continuation of the conduct of such Seller Restricted Business after
such acquisition, except that if the Seller Restricted Business of such acquired Person generated
more than 15% of the gross consolidated revenues of such Person for the most recently completed
fiscal year, then Seller or its subsidiary, as applicable, shall use commercially reasonable
efforts to sell or otherwise dispose of the portion of the business of the acquired Person that is
engaged in Seller Restricted Business as promptly as reasonably practicable after the consummation
of the acquisition of such Person. Seller represents and warrants that, as of the date of this
Agreement, to the actual knowledge of the General Counsel and Chief Financial Officer of Seller,
Seller is not a party to any written agreement for a transaction that, if consummated during the
eighteen month period following the Closing, would, but for clauses (A) through (D) of the
foregoing proviso, violate Section 6.3(a)(i) or 6.3(a)(ii).
(b) Except as explicitly contemplated by this Agreement, from the date of this Agreement until
eighteen months after the Closing, Seller will not (and will cause its subsidiaries not to),
without the prior written consent of Buyer, directly or indirectly, hire or solicit for hire any
Person who is a Business Employee to become an employee of Seller; provided,
however, that the foregoing shall not prohibit Seller from, after the Closing, hiring or
soliciting any Person who (A) is terminated from his employment by Buyer, (B) does not become a
Buyer Employee on the Closing Date (either as a result of Buyer not making an offer or such Person
declining Buyer’s offer) so long as at least six months has elapsed from the Closing or (C) is
solicited or hired pursuant to, or as a result of, a general employment advertisement or services
provided by an employment agency that does not specifically target Buyer Employees.
(c) Except as explicitly contemplated by this Agreement, from the date of this Agreement until
eighteen months after the Closing, Buyer will not (and will cause its
subsidiaries not to), without the prior written consent of Seller, directly or indirectly,
hire or solicit for hire any Person who is an employee of Seller to become an employee of Buyer;
41
provided, however, that the foregoing shall not prohibit Buyer from hiring or
soliciting any Person who (A) is terminated from his employment by Seller or (B) is solicited or
hired pursuant to, or as a result of, a general employment advertisement or services provided by an
employment agency that does not specifically target Seller’s employees.
(d) Each of Buyer and Seller agree that a remedy at law for any breach of this Section 6.3
would be inadequate, and the other party shall be entitled to injunctive relief in the event of any
such breach.
(a) Upon the terms and subject to the conditions contained herein, each of the parties agrees,
both before and after the Closing, (i) to use its reasonable best efforts to take, or cause to be
taken, all reasonable actions and to do, or cause to be done, all reasonable things necessary,
proper or advisable to consummate and make effective the transactions contemplated by this
Agreement, including before the Closing using its reasonable best efforts to satisfy the conditions
precedent to each party’s obligations hereunder, (ii) to execute any documents, instruments or
conveyances of any kind which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder and (iii) to cooperate with each other in connection with the
foregoing. In furtherance and not in limitation of the foregoing, each party hereto agrees to make
or cause to be made an appropriate filing of a Notification and Report Form pursuant to the HSR Act
with respect to the transactions contemplated hereby as promptly as practicable and in any event
within ten (10) Business Days after the date hereof and to supply as promptly as practicable any
additional information and documentary material that may be requested pursuant to the HSR Act and
to use its reasonable best efforts to cause the expiration or termination of the applicable waiting
periods under the HSR Act as soon as practicable.
(b) Each party agrees, and shall cause each of their respective Affiliates, to cooperate and
to use their respective reasonable best efforts to obtain any governmental consents or the
expiration of any applicable waiting periods required for the Closing (including through compliance
with the HSR Act and any other Regulatory Law) (“Regulatory Approvals”) and to respond to
any governmental requests for information. The parties will consult and cooperate with one
another, and consider in good faith the views of one another, in connection with any analyses,
appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted
by or on behalf of any party in connection with proceedings under or relating to the HSR Act.
Subject to the terms of the Confidentiality Agreement, each party shall have the right to review
and approve in advance drafts of all material written communications, petitions, applications and
other filings made or prepared by the other party in connection with obtaining the requisite
approvals and authorizations from the appropriate Governmental Authorities for the transactions
contemplated this Agreement, which approval shall not be unreasonably withheld or delayed. For
purposes of this Agreement, “Regulatory Law” means all federal, state and foreign, if any,
statutes, rules, regulations, orders, decrees, administrative and judicial doctrines and other Laws
that are designed or intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade or lessening of competition through merger or
acquisition.
42
(c) As soon as practicable after the Closing (but within 60 days after the Closing) if Trade
Secrets included in the Transferred Intellectual Property (i) are not documented in writing and
(ii) are not known to Buyer Employees sufficient to allow use of such Trade Secrets in the
Business substantially as they are currently conducted, Seller shall use its reasonable best
efforts to transfer to Buyer information in Seller’s possession relating to such Trade Secrets
included in the Transferred Intellectual Property to allow Buyer to use such Trade Secrets in the
Business substantially as they are currently used in the Business including by making available
to Buyer, during commercially reasonable hours, the appropriate Seller employees employed at such
time to assist in the transfer of such information.
(d) Until nine (9) months after Closing, in the event that either party discovers (and Buyer
notifies Seller in writing as applicable) an item of Intellectual Property owned by Seller or
licensed to Seller from a third party, in either case as of the Closing, which is necessary for the
conduct of the Business substantially as currently conducted and which is all of the following:
(i) not included in the Transferred Intellectual Property,
(ii) not listed on Schedule 4.13(f), and
(iii) not De Minimis Software or Corporate Software,
then Seller agrees as follows: (x) with respect to such Intellectual Property owned by Seller,
Seller and Buyer shall cause to be executed a perpetual, non-exclusive, royalty-free,
non-transferable license for Buyer (such license to be terminable only for material breach of its
terms by Buyer) to use same in the Business, on mutually agreeable terms for no additional payment
by Buyer to Seller, and (y) with respect to any third party Intellectual Property, Seller and Buyer
shall use their reasonable best efforts to obtain a license on substantially similar terms as
Seller currently licenses such third party Intellectual Property to use same in the Business to the
fullest extent permitted under the applicable license, on mutually-agreeable terms, for no
additional payment by Buyer to Seller; provided that Buyer shall pay any commercially
reasonable additional fees to the third party and Buyer shall indemnify Seller for any and all
Liabilities arising from Buyer’s conduct or omission under any sublicense; and provided
further that for (A) sublicensable rights for which Seller no longer wishes to retain its
own license from the owner or (B) non-sublicensable rights, upon written request from Buyer, Seller
shall cooperate with Buyer for the period ending nine (9) months after the Closing, to assist Buyer
in attempting to obtain direct licenses from applicable third parties. Buyer shall pay to the
third party any costs for the license. BUYER ACKNOWLEDGES THAT ANY OF THE ABOVE LICENSES, EXCEPT
AS OTHERWISE SET OUT IN SUCH LICENSE, WILL BE ON AN “AS IS” BASIS, AND SELLER DOES NOT MAKE, AND
EXPRESSLY DISCLAIMS, ANY AND ALL EXPRESS OR IMPLIED WARRANTIES WITH RESPECT THERETO.
(e) From the date hereof until the six month anniversary of the Closing, and upon written
request from Buyer, Seller shall use commercially reasonable efforts to (i) assist
Buyer in identifying the Corporate Software necessary to operate the Business substantially as
currently conducted and assist Buyer (by making introductions to third party technology providers
and supplying required information) (a) first in attempting to transfer existing licenses
43
to Buyer
to the extent practicable or (b) to obtain direct licenses for Corporate Software and the Software
listed on Schedule 4.13(f) from applicable third parties and (ii) assist Buyer in identifying the
Contracts relating to the maintenance of Fixtures and Equipment necessary to operate the Business
substantially as currently conducted and assist Buyer (by making introductions to maintenance
providers and supplying required information) (a) first in attempting to apportion existing
maintenance Contracts to the extent practicable or (b) to obtain direct maintenance Contracts from
applicable third parties. The costs and responsibility for obtaining any such transfer, license or
maintenance Contract shall be borne by Buyer. Seller’s hourly personnel costs will be billed as
set out in Schedule 6.4(e) for Services provided after the forty-five day anniversary of the
Closing. For the avoidance of doubt, Seller shall not be expected to relinquish or compromise any
rights necessary or desirable to carry out its businesses.
6.5 No Inconsistent Actions. Subject to the provisions of Section 10.1, Seller and Buyer
shall not take any action inconsistent with their respective obligations under this Agreement or
which could materially hinder or delay the consummation of the transactions contemplated hereby.
6.6 Books and Records. Buyer agrees that it shall preserve and keep the Books and Records in
Buyer’s possession for a period of at least seven (7) years after the Closing. At least 90
calendar days prior to the seven year anniversary of the Closing, Seller shall notify Buyer if
Seller desires to retain the Books and Records if Buyer intends to destroy them at Seller’s cost
and expense. During such seven-year period, duly authorized Representatives of Seller shall, upon
reasonable notice and at Seller’s expense, have access to the Books and Records during normal
business hours to examine, inspect and copy the Books and Records.
6.7 Litigation Support. In the event and for so long as either of Seller or any of its
Affiliates or Buyer or any of its Affiliates is actively contesting or defending against any Claim,
hearing, or investigation in connection with the Business, the Purchased Assets, the Excluded
Assets, the Assumed Liabilities, the Retained Liabilities, the Transferred Entities or the
Subsidiary Stock, as applicable, each of Seller and Buyer, as applicable, will cooperate, and will
cause their Affiliates to cooperate, with the other party and their counsel, at the sole expense of
the other party, in the contest or defense, to use commercially reasonably efforts to make
available its personnel, and to provide such testimony and access to its books and records as shall
be reasonably necessary in connection with the contest or defense.
(a) After the Closing and as requested by Seller from time to time, Buyer will cooperate, and
will cause its Affiliates to cooperate, in assisting Seller and its Affiliates in the collection of
any Excluded Receivables that are received by Buyer.
(b) After the Closing, all payments and reimbursements by any third party in the name of or to
Buyer to the extent, in connection with, arising out of or relating to the Excluded Assets or the
Retained Liabilities that are to be received by Buyer after the Closing shall be held by Buyer in
trust for the benefit of Seller and, promptly upon receipt by Buyer of
44
any such payment or
reimbursement, Buyer shall pay over to Seller the amount of such payment or reimbursement without
right of set-off.
(c) After the Closing, all payments and reimbursements made by any third party in the name of
or to Seller to the extent, in connection with, arising out of or relating to the Purchased Assets
or the Assumed Liabilities that are to be received by Seller after the Closing shall be held by
Seller in trust for the benefit of Buyer and, promptly upon receipt by Seller of any such payment
or reimbursement, Seller shall pay over to Buyer the amount of such payment or reimbursement
without right of set-off.
6.9 Resignations. Seller shall cause all officers and directors of each of the Transferred
Entities to resign from such positions effective upon the Closing.
(a) Upon the Closing, Seller and its Affiliates shall hereby release and forever discharge all
Liabilities, Losses and Claims of whatever kind, nature, character and description (whether known
or unknown, due or to become due) that Seller and its Affiliates may have against the Transferred
Entities that arise prior to the Closing, except for such Liabilities, Losses and Claims arising
out of this Agreement or the transactions contemplated hereby.
(b) Upon the Closing, Buyer, on behalf of the Transferred Entities, shall hereby release and
forever discharge all Liabilities, Losses and Claims of whatever kind, nature, character and
description (whether known or unknown, due or to become due) that the Transferred Entities may have
against Seller that arise prior to the Closing, except for such Liabilities, Losses and Claims
arising out of this Agreement or the transactions contemplated hereby.
(c) Except for those Contracts set forth on Schedule 6.10(c), all Contracts to which any of
the Transferred Entities are party, on the one hand, and Seller or any of its Affiliates are party,
on the other hand, shall be terminated at the Closing, with no continuing Liability of any party
thereunder.
(a) From the date of this Agreement and continuing until completed, Buyer shall use reasonable
best efforts to obtain the release of each guarantee or similar obligation of the Seller or any of
its Affiliates (other than a Transferred Entity) for the benefit of any Transferred Entity (the
“Seller Guarantees”) on or prior to the Closing Date, including, without limitation, the
Seller Guarantees listed on Schedule 6.11(a). Such efforts shall include offering its own
guarantee in substitution for, and on at least substantially the same terms of, any Seller
Guarantee. Buyer shall indemnify, defend and hold harmless the Seller and its Affiliates (other
than the Transferred Entities) against and reimburse the Seller and its Affiliates (other than the
Transferred Entities) to the extent any Seller Guarantee is called upon and the Seller or any of
its Affiliates (other than Transferred Entities) makes any payment or is obligated to reimburse, in
each case after the Closing, the party issuing the Seller Guarantee.
45
(b) From the date of this Agreement and continuing until completed, Buyer shall use reasonable
best efforts to negotiate and enter into amendments to the Contracts listed on Schedule 6.11(b) to
release Seller from its obligations thereunder, including, if necessary, by substituting Buyer
thereon or by entering into a new replacement contract which supersedes the specified Contract.
6.12 Transition Services Agreement. Prior to the Closing, each of the parties hereto shall
take, or cause to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable to satisfy and discharge its obligations under the Transition Services
Agreement, including, without limitation, paying in full all amounts owing thereunder.
6.13 Certain Litigation.
(a) From the date of this Agreement until the earlier of the Closing and the termination of
this Agreement in accordance with Section 10.1, each of Buyer and Seller agrees, on behalf of
itself and its Affiliates and Representatives, not to commence or institute against any person any
Action or Claim of any kind arising out of or related to, directly or indirectly, the Email
Purchase Agreement (“New Litigation”). Each party represents and warrants to the other
party that, as of the date of this Agreement, there are no other Actions or Claims that it is aware
of arising out of or related to, directly or indirectly, the Email Purchase Agreement and that it
is not aware of any Claim or cause of action arising out of or related to, directly or indirectly,
the Email Purchase Agreement it has against the other party or its Affiliates or Representatives,
other than those Claims in the Existing Litigation.
(b) From the date of this Agreement until the earlier of the Closing and the termination of
this Agreement in accordance with Section 10.1, each of Buyer and Seller agrees, on behalf of
itself and its Affiliates and Representatives, to cease without prejudice all activity concerning
the New York Action and the Subpoena Action without any further proceedings or activities in
connection therewith, including more particularly:
(i) All litigation (including, without limitation, all hearings, filings, depositions,
briefs, discovery, motions and other proceedings) in the New York Action
and the Subpoena Action shall be suspended until the Closing. Within five Business
Days following the date of this Agreement, Buyer and Seller shall jointly file mutually
acceptable papers that Buyer and Seller deem necessary in the New York Supreme Court, and
Buyer and Seller shall take all other actions necessary or appropriate, to seek to stay,
suspend and xxxxx the New York Action and the Subpoena Action without prejudice to Buyer or
Seller until the earlier of the Closing and the termination of this Agreement in accordance
with Section 10.1, including (A) a stipulation adjourning Buyer’s appeals in the Appellate
Division of the New York Supreme Court until the April 2007 Term, and (B) a joint, mutually
acceptable motion for an order (x) staying proceedings in the trial courts where the New
York Action and the Subpoena Action are pending through April 9, 2007, and (y) vacating the
Preliminary Injunction effective as of the Closing. For the avoidance of doubt, nothing in
this paragraph is intended to, or shall have the effect of, modifying, continuing or
vacating the Preliminary Injunction prior to the Closing.
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(ii) In the event that this Agreement is terminated in accordance with Section 10.1,
and should litigation re-commence after such termination, Buyer and Seller shall jointly
petition the trial courts in the New York Action and the Subpoena Action to extend all dates
in the litigation by at least the amount of time included in the period from December 1,
2006 until the date of termination of this Agreement.
(iii) All communications, whether written or oral, between Buyer or any of its
Affiliates or Representatives and Seller or any of its Affiliates or Representatives made
during the period from November 2, 2006 (the date of the Confidentiality Agreement) until
the earlier of Closing and the termination of this Agreement in accordance with Section
10.1, and all documents related thereto, shall not be discoverable, admissible or otherwise
used in any Existing Litigation or New Litigation.
(c) From the date of this Agreement until the earlier of the Closing and the termination of
this Agreement in accordance with Section 10.1, Buyer agrees, on behalf of itself and its
Affiliates and Representatives, not to initiate any activity in the Texas Action or the California
Action; provided that Buyer may take such actions as it deems necessary or appropriate in
response to any actions taken by the defendant or any other Person (other than Buyer or any
Affiliate or Representative of Buyer) in the Texas Action or the California Action.
(d) Effective upon Closing, Buyer, on behalf of itself and its Affiliates and Representatives,
releases, acquits, and forever discharges Seller and its Affiliates and their Representatives from
any and all Claims at law, at equity or otherwise that Buyer and its Affiliates and Representatives
have asserted or could have asserted against Seller and its Affiliates (x) in the New York Action
arising out of or related to, directly or indirectly, the facts and circumstances alleged in the
New York Action and (y) any facts or circumstances of which Buyer or its Affiliates or
Representatives is aware as of the date of this Agreement that could be used in a Claim arising out
of or related to, directly or indirectly, the Email Purchase Agreement. Notwithstanding the
foregoing, the Email Purchase Agreement shall continue in full force and effect on its terms, and,
except as set forth in the preceding sentence, Buyer and its Affiliates and Representatives do not
waive any other rights under the Email Purchase Agreement, including rights for indemnification
under the Email Purchase Agreement (other than claims for indemnification for the Claims that are
waived pursuant to the preceding sentence).
(e) Effective upon Closing, Seller, on behalf of itself and its Affiliates and
Representatives, releases, acquits, and forever discharges Buyer and its Affiliates and their
Representatives from any and all Claims at law, at equity or otherwise that Seller and its
Affiliates and Representatives have asserted or could have asserted against Buyer and its
Affiliates (x) in the New York Action arising out of or related to, directly or indirectly, the
facts and circumstances alleged in the New York Action and (y) any facts or circumstances of which
the Seller or its Affiliates or Representatives is aware as of the date of this Agreement that
could be used in a Claim arising out of or related to, directly or indirectly, the Email Purchase
Agreement. Notwithstanding the foregoing, the Email Purchase Agreement shall continue in full
force and effect on its terms, and, except as set forth in the preceding sentence, Seller and its
Affiliates and Representatives do not waive any other rights under the Email Purchase Agreement,
including rights for indemnification under the Email Purchase Agreement (other
47
than claims for
indemnification for the Claims that are waived pursuant to the preceding sentence).
(f) Within three days following the Closing, Buyer and Seller shall jointly file mutually
acceptable papers that Buyer or Seller deem necessary, in the New York Action and the Subpoena
Action to terminate the New York Action and the Subpoena Action and, if necessary, vacate the
Preliminary Injunction with prejudice, and with each party to bear its own costs, legal fees and
expenses.
(g) From the date of this Agreement until the earlier of the Closing and the termination of
this Agreement in accordance with Section 10.1, Buyer, on behalf of itself and its Affiliates and
Representatives, shall use its reasonable best efforts, and shall take, or cause to be taken, all
actions reasonably necessary or appropriate, to (i) cease without prejudice all activity concerning
the Texas Action and the California Action without any further proceedings or activities in
connection therewith, and in any event, will cease all discovery activities involving Seller or any
of its Affiliates and Representatives, in each case subject to the proviso in Section 6.13(c) and
(ii) terminate, effective as of the Closing, and release and forever discharge each party from all
liability relating to, the Texas Action and the California Action, in each case with prejudice and
with each party to bear its own costs, legal fees and expenses; provided that Buyer shall
not be required to terminate any such Action or to release or discharge from liability any party to
any such Action unless Buyer is able to secure from such parties a comparable release and discharge
from liability for itself, its Affiliates and Representatives. In the event the Closing occurs and
either of the Texas Action or the California Action have not been terminated and released as
provided in clause (ii) above, Buyer, on behalf of itself and its Affiliates and Representatives,
shall continue to use its reasonable best efforts, and take, or cause to be taken, all actions
reasonably necessary or appropriate, to terminate such Actions and effectuate such releases as
promptly as practicable following the Closing, subject to the proviso set forth in clause (ii).
Buyer agrees, to the extent any Action with any third party arising out of or related to, directly
or indirectly, the Email Purchase Agreement, including the Texas Action and the California Action,
continues or is instituted, that it will use its reasonable best efforts to avoid involving, as a
party or through discovery, depositions, or otherwise, Seller, any of its Affiliates and any of
their Representatives, unless Buyer determines in its good faith reasonable judgment it is
necessary to do so to avoid prejudice.
ARTICLE VII
The obligations of Seller to consummate the transactions contemplated by this Agreement are
subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions,
any of which may be waived by Seller:
7.1 Representations, Warranties and Covenants. All representations and warranties of Buyer
contained in this Agreement shall be true and correct as of the date hereof and as of the Closing
Date (except for representations and warranties which by their terms speak as of a specific date,
in which case such representations and warranties need only be true and correct as of such date),
except to the extent that the failure of such representations and warranties to be true and correct
would not reasonably be expected to result in a material adverse
48
effect on Buyer’s ability to
consummate the transactions contemplated hereby. Buyer shall have performed and satisfied in all
material respects the agreements, obligations and covenants required hereby to be performed by it
prior to or on the Closing Date. Buyer shall furnish Seller with a certificate executed by a duly
authorized officer of Buyer and dated as of the Closing Date to the effect that the conditions set
forth in this Section 7.1 have been satisfied
7.2 No Laws or Governmental Orders. No preliminary or permanent injunction or other
Governmental Order which prevents or otherwise restrains the consummation of the transactions
contemplated hereby shall have been issued and remain in effect, and no Law shall have been enacted
which prohibits or otherwise restrains the consummation of the transactions contemplated hereby.
7.3 Antitrust Laws. The applicable waiting periods, including any extension thereof, under the
HSR Act, shall have expired or been terminated.
7.4 Deliveries. Seller shall have received from Buyer each of the deliveries described in
Section 3.4(b) hereof.
ARTICLE VIII
The obligations of Buyer to consummate the transactions contemplated by this Agreement are
subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions,
any of which may be waived by Buyer:
8.1 Representations, Warranties and Covenants. All representations and warranties of Seller
contained in this Agreement shall be true and correct as of the date hereof and as of the Closing
Date (except for representations and warranties
which by their terms speak as of a specific date, in which case such representations and warranties
need only be true and correct as of such date), except to the extent that the failure of such
representations and warranties to be true and correct would not reasonably be expected to result in
a Material Adverse Effect. Seller shall have performed and satisfied in all material respects the
agreements, obligations and covenants required hereby to be performed by it prior to or on the
Closing Date. Seller shall furnish Buyer with a certificate executed by a duly authorized officer
of Seller and dated as of the Closing Date to the effect that the conditions set forth in this
Section 8.1 have been satisfied.
8.2 No Laws or Governmental Orders. No preliminary or permanent injunction or other
Governmental Order which prevents or otherwise restrains the consummation of the transactions
contemplated hereby shall have been issued and remain in effect, and no Law shall have been enacted
which prohibits or otherwise restrains the consummation of the transactions contemplated hereby.
8.3 Antitrust Laws. The applicable waiting periods, including any extension thereof, under the
HSR Act, shall have expired or been terminated.
8.4 Consents. The consents of third parties to the Assumed Contracts that are necessary
for the assignment of such Assumed Contracts to Buyer shall have been made or
49
obtained, except to
the extent that any failures to make or obtain any such consents would not reasonably be expected
to result in a Material Adverse Effect.
8.5 Material Adverse Effect. As of the Closing Date, there shall not have occurred any change
or event that would reasonably be expected to result in a Material Adverse Effect.
8.6 Deliveries. Buyer shall have received from Seller each of the deliveries described in
Section 3.4(a) hereof.
ARTICLE IX
9.1 Survival of Representations, Warranties and Pre-Closing Covenants.
(a) Each and every representation and warranty contained in this Agreement shall survive the
Closing until the first anniversary of the Closing Date and then expire.
(b) (i) Each and every covenant or agreement contained in this Agreement to be performed only
prior to Closing shall survive the Closing until the first anniversary of the Closing Date and then
expire and (ii) each and every covenant or agreement contained in this Agreement to be performed
after Closing shall survive and expire, as applicable, in accordance with its terms.
(c) The indemnification obligations set forth in Section 9.2 hereof with respect to
representations, warranties, covenants and agreements shall only be applicable with respect to such
representations, warranties, covenants and agreements if a Claim is made in writing (stating in
reasonable detail the basis for such Claim) with respect to such indemnification obligations prior
to the expiration of the relevant representation, warranty, covenant or agreement as set forth in
this Section 9.1; provided that such expiration of the representations, warranties,
covenants and agreements shall not affect the rights of a party in respect of any Claim made by
such party in a writing (stating in reasonable detail the basis for such Claim) received by the
other party prior to the expiration of the applicable survival period provided herein.
9.2
Indemnification.
(a) Subject to the other provisions of this Article IX, Seller shall indemnify, defend and
hold harmless Buyer and all of its Affiliates and all Representatives of such Persons (“Buyer
Indemnified Parties”) from and against any and all Losses actually incurred by Buyer
Indemnified Parties resulting from (i) any breach of any representation or warranty made by Seller
in this Agreement, (ii) any breach of any covenant or agreement (whether to be performed before or
after Closing) made by Seller in this Agreement and (iii) any Retained Liability.
(b) Subject to the other provisions of this Article IX, Buyer shall indemnify, defend and hold
harmless Seller and all of its Affiliates and all Representatives of such Persons (“Seller
Indemnified Parties”) from and against any and all Losses actually incurred by Seller
Indemnified Parties in connection with, arising out of or resulting from (i) any breach of any
50
representation or warranty made by Buyer in this Agreement, (ii) any breach of any covenant or
agreement (whether to be performed before or after Closing) made by Buyer in this Agreement and
(iii) any Assumed Liability.
(c) The parties agree that any indemnification payments made pursuant to this Agreement shall
be treated for tax purposes as an adjustment to the Purchase Price, unless otherwise required by
applicable Law.
9.3 Limitations on Indemnification.
(a) Notwithstanding anything to the contrary contained in this Agreement, (i) no
indemnification under Sections 9.2(a)(i) and (ii) hereof shall be made by Seller and no
indemnification under Sections 9.2(b)(i) and (ii) hereof shall be made by Buyer, and neither Seller
nor Buyer shall have any Liability, respectively, to the other therefor, unless and until the
aggregate amount of Losses subject to indemnification pursuant thereto and due the party being
indemnified shall exceed $3.0 million, and once such threshold amount is exceeded the indemnifying
party shall indemnify the indemnified party, and shall be liable, only for the amount of any such
Losses in excess of $2.675 million, (ii) the aggregate amount required to be paid by Seller
pursuant to its indemnification obligations under Sections 9.2(a)(i) and 9.2(a)(ii) hereof or by
Buyer pursuant to its indemnification obligations under Sections 9.2(b)(i) and 9.2(b)(ii) hereof
shall not exceed an amount equal to $37.5 million, and neither party shall have any Liability to
any indemnified party for, and such indemnified parties shall have no right to recover from Seller
or Buyer, as the case may be, any amount of Losses which exceeds (and from and after the time such
Losses exceed) such amount and (iii) no indemnification under Sections 9.2(a)(i) and (ii) hereof
shall be made by Seller and no indemnification under Sections 9.2(b)(i) and (ii) hereof shall be
made by Buyer, and neither Seller nor Buyer shall have any Liability, respectively, to the other
for any individual Claim or any Liability arising out of or resulting from a single action, event,
occurrence or a set of circumstances, unless such individual Claim or such Liability arising out of
or resulting from a single action, event, occurrence or a set of circumstances is greater than
$100,000. Notwithstanding the foregoing, the indemnity limitations set out in this Section 9.3(a)
do not apply to Section 2.7 of the Agreement.
(b) To the extent that any Losses or Claims therefor which is subject to indemnification
hereunder are covered by insurance or any other right to indemnity held by any indemnified party
(an “Insured or Third Party Indemnified Loss”), such indemnified party shall only be
entitled to indemnification pursuant to Section 9.2 hereof with respect to the amount of Losses in
excess of the net cash proceeds received by such indemnified party pursuant to such insurance or
such other right to indemnity. If, following the receipt of any indemnity payments pursuant to
Section 9.2 hereof, the indemnified party obtains any insurance or indemnity recovery from a third
party insurance provider or third party indemnitor with respect to such Losses, then such
indemnified party shall promptly pay over to the indemnifying party the amount of the net cash
proceeds received by such indemnified party pursuant to such insurance or indemnity up to, but not
in excess of, the amount of the indemnity payments made by the indemnifying party pursuant to such
Losses. In determining the amount of Losses for purposes of Section 9.3(a) hereof, to the extent
of any Insured or Third Party Indemnified Loss, the amount of Losses subject to indemnification
hereunder will be determined only at such time as the indemnified party obtains any insurance or
indemnity recovery from third party insurance
51
providers or third party indemnitor (in which case
the amount of such Losses shall be calculated net of such recovery). The parties agree that no
insurance company or third party indemnitor shall have any right of subrogation under this Section
9.3(b) and the parties agree that this Section 9.3(b) is not for the benefit of any third party
insurance provider or third party indemnitor.
(c) Notwithstanding anything to the contrary contained in this Agreement, (i) Seller and its
Affiliates shall not be liable for any Losses pursuant to Section 9.2(a)(i) hereof to the extent
that the breach of the representation or warranty was actually known to Buyer to be a breach of a
representation or warranty as of the date hereof, and (ii) Buyer shall not be liable for any Losses
pursuant to Section 9.2(b)(i) hereof to the extent that the breach of the representation or
warranty was actually known to Seller to be a breach of a representation or warranty as of the date
hereof. If, after the date hereof and prior to the Closing, Buyer becomes aware of any breach of a
representation or warranty contained in Article IV, Buyer shall notify Seller of such
breach and Seller may reflect such breach on the certificate provided to Buyer pursuant to
Section 8.1; provided, however, that any such disclosure on the such certificate
shall not relieve Seller of its obligation to indemnify Buyer with respect to such breach pursuant
to Section 9.2(a)(i); provided further, however, that such notification by
Buyer shall not be deemed an admission by Buyer that such breach does not constitute a Material
Adverse Effect or an admission by Seller that such breach does constitute a Material Adverse Effect
or is a breach of any such representation or warranty.
(d) Notwithstanding anything in this Agreement to the contrary, the amounts payable pursuant
to indemnification obligations under Sections 2.5, 2.7, 3.5, 6.2 and 9.2 hereof shall be paid
without duplication and in no event shall any party hereto be able to recover under different
provisions of this Agreement for the same Losses.
(e) The parties shall cooperate with each other with respect to resolving any Claim or
Liability with respect to which one party is obligated to indemnify another party hereunder,
including by making commercially reasonable efforts to mitigate or resolve any such Claim or
Liability. In the event that the indemnified party shall fail to make such commercially reasonable
efforts to mitigate or resolve any Claim or Liability, then, notwithstanding anything else to the
contrary contained herein, the indemnifying party shall not be required to indemnify any Person for
any Losses that could reasonably be expected to have been avoided if the indemnified party had made
such efforts.
9.4 Exclusive Remedy; No Consequential, Special or Incidental Damages, etc.
(a) Except for equitable relief to which either party hereto may be entitled pursuant to
Section 6.3, or with respect to indemnification under Section 2.7, the sole and exclusive remedy of
the parties with respect to any and all Losses and Claims at Law or in equity or otherwise relating
to a breach of this Agreement and the transactions contemplated hereby, or any certificate or
document delivered pursuant to this Agreement and the transactions contemplated hereby, shall be
pursuant to the indemnification provisions set forth in this Article IX. Notwithstanding the
foregoing, prior to the Closing, each party shall have the right to bring a contract action to
enforce, or recover Losses from the other party for breaches of this Agreement.
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(b) Notwithstanding anything to the contrary in this Agreement, Losses indemnifiable under
Sections 2.5, 3.5, 6.2 and 9.2 hereof (i) shall expressly exclude consequential damages, special or
incidental damages, lost profits, punitive damages, exemplary damages and other penalty or
speculative damages in connection with or resulting from any breach of this Agreement, including
any actions undertaken in connection herewith or therewith, except for Losses directly arising out
of third-party Claims which shall be indemnifiable by the indemnifying party for all such damages
and (ii) shall not be computed or determined using a multiple of earnings, book value or any
similar item which may have been used in arriving at the Purchase Price or which may be reflective
of the Purchase Price.
9.5
Indemnification Procedures.
(a) If a Claim for Losses is to be made by a party entitled to indemnification under Section
9.2 against the indemnifying party, the party claiming such indemnification shall give written
notice (a “Claim Notice”) to the indemnifying party as soon as practicable after the party
entitled to indemnification becomes aware of any fact, condition or event which may give rise to
Losses for which indemnification may be sought under Section 9.2; provided,
however, that if any Claim is filed against any party entitled to the benefit of and
seeking indemnity under Section 9.2 (a “Third Party Claim”), the applicable Claim Notice
shall be given to the indemnifying party as promptly as practicable (and in any event within thirty
(30) Business Days after the service of the citation, summons or other notice). Notwithstanding
the foregoing, the failure of any indemnified party to give timely notice hereunder shall not
affect rights to indemnification hereunder, except to the extent that the indemnifying party is
actually prejudiced by, or suffers damage as a result of, such failure. The parties understand and
agree that the failure of the indemnified party to so notify the indemnifying party prior to
settling any such Claim (whether by paying the Claim or executing a binding settlement agreement
with respect thereto) or the entry of a judgment or issuance of an award with respect to such Claim
shall constitute actual prejudice or damage to the indemnifying party’s ability to defend against
such Claim. After receiving a Claim Notice relating to a Third Party Claim by or against any third
party, the indemnifying party shall be entitled, upon written notice to the indemnified party, at
its own cost, risk and expense, (a) to take control of the defense and investigation of such
lawsuit or action, (b) to employ and engage attorneys of its own choice to handle and defend the
same (unless the named parties to such Claim include both the indemnifying party and the
indemnified party and the indemnified party has been advised in writing by counsel that there may
be one or more legal defenses available to such indemnified party that are different from or
additional to those available to the indemnifying party, in which event the indemnified party shall
be entitled, at the indemnifying party’s cost, risk and expense, to separate counsel of its own
choosing) and (c) to compromise or settle such claim, which compromise or settlement shall be made
only with the written consent of the indemnified party, such consent not to be unreasonably
withheld or delayed (it being understood that the failure of the indemnified party to give such
consent shall not be considered unreasonable in respect of any compromise or settlement that does
not include an unconditional release of such indemnified party from all Liabilities arising out of,
or that may arise out of, such Claim). The indemnified party may, at its own cost and expense,
participate in the investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom (it being understood that the indemnifying party shall control such defense). If
the indemnifying party fails to assume the defense of such Claim within fifteen (15) Business Days
after receipt of the Claim Notice, the indemnified party against which such Third Party Claim has
been asserted
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will (upon delivering notice to such effect to the indemnifying party) have the right
to undertake, at the indemnifying party’s cost and expense, the defense, compromise or settlement
of such claim on behalf of and for the account and risk of the indemnifying party. Any Claim the
defense of which is assumed by an indemnified party shall not be compromised or settled without the
written consent of the indemnifying party, which consent shall not be unreasonably withheld or
delayed (it being understood that the failure of the indemnifying party to give such consent shall
not be considered unreasonable in respect of any compromise or settlement that does not include an
unconditional release of such indemnifying party from all Liabilities arising out of, or that may
arise out of, such Claim). Each party agrees to keep the other party reasonably informed of the
progress of any such defense, compromise or settlement. The parties
shall cooperate in all reasonable respects with each other in the investigation, trial and
defense of any Third Party Claim for Losses or Claim and any appeal arising therefrom.
(b) In the event of payment in full by the indemnifying party to the indemnified party in
connection with any Claim (an “Indemnified Claim”), the indemnifying party shall be
subrogated to and shall stand in the place of the indemnified party as to any events or
circumstances in respect of which the indemnified party may have any right or Claim relating to
such Indemnified Claim against any claimant or plaintiff asserting such Indemnified Claim or
against any other Person. The indemnified party shall cooperate with the indemnifying party in a
reasonable manner, and at the cost and expense of the indemnifying party, in prosecuting any
subrogated right or Claim.
ARTICLE X
10.1 Termination.
(a) This Agreement may be terminated at any time prior to Closing:
(i) By mutual written consent of Buyer and Seller;
(ii) By either Buyer or Seller if the Closing shall not have occurred on or before
March 22, 2007; provided, however, that the right to terminate this
Agreement under this Section 10.1(a)(ii) shall not be available to any party whose failure
to fulfill any obligation under this Agreement shall have caused the Closing not to occur on
or prior to such date.
(iii) By Buyer if Seller shall have breached any of its representations, warranties,
covenants or agreements contained herein which would give rise to a failure of a condition
set forth in Article VIII, which breach has not been cured within thirty (30) days after
Buyer has given written notice to Seller specifying such breach;
(iv) By Seller if Buyer shall have breached any of its representations, warranties,
covenants or agreements contained herein which would give rise to a failure of a condition
set forth in Article VII, which breach has not been cured within thirty (30) days after
Seller has given written notice to Buyer specifying such breach; and
54
(v) By either Buyer or Seller if any Governmental Authority shall have issued an order,
decree or ruling, in each case, permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement and such order, decree or ruling shall have
become final and non-appealable.
(b) In the event of termination of this Agreement and the abandonment of the transactions
contemplated hereby, this Agreement shall become null and void and of no further force and effect
and no party hereto shall have any Liability under this Agreement to any other party hereto, except
(i) for any breach of this Agreement occurring prior to the termination of
this Agreement and (ii) the obligations of Buyer set forth in Section 6.2(l). Upon any
termination of this Agreement, Buyer will promptly return to Buyer or destroy all Evaluation
Material (as defined in the Confidentiality Agreement) as well as any confidential information
derived therefrom, which destruction shall be certified in writing to Seller by an officer of
Buyer. The provisions of Section 6.2(l) and Article X hereof shall continue in full force and
effect notwithstanding any termination of this Agreement or any provision hereof to the contrary.
10.2 Expenses. Except as otherwise specified in this Agreement, including, without limitation,
Section 2.5, Section 6.2(k) and Section 6.2(l) hereof, and whether or not the transactions
contemplated hereby are consummated, each party hereto shall pay its own legal, accounting,
out-of-pocket and other expenses in connection with, arising out of or incident to this Agreement
and the Ancillary Agreements and the transactions contemplated hereby and thereby, including,
without limitation, any action taken by such party in preparation for carrying this Agreement into
effect.
10.3 Confidentiality; Publicity.
(a) The Confidentiality Agreement shall remain in full force and effect until and after the
Closing in accordance with its terms; provided that after the Closing, the confidentiality
provisions of the Confidentiality Agreement shall apply to Buyer only with respect to Evaluation
Material and confidential information derived therefrom that does not relate to the Business,
Purchased Assets, Transferred Entities or the Subsidiary Stock.
(b) Except as required by applicable Law, neither Buyer nor Seller, nor any of their
Affiliates, shall, without the prior consent of the other party, issue any press release or make
any public statement regarding the transactions contemplated hereby, the Business, the Purchased
Assets, the Transferred Entities or the Subsidiary Stock; provided, however, that
the parties may jointly issue or make an appropriate and mutually acceptable press release
following each of the execution and delivery of this Agreement and the Closing; provided
further, however, that with respect to any public statement required by applicable
Law, Buyer and Seller, as applicable, shall obtain prior consent of the other party to the extent
practicable.
(c) Notwithstanding anything herein to the contrary, until the later of three years (i) after
the Closing and (ii) the termination of this Agreement pursuant to the provisions of Section 10.1,
neither party hereto shall (and shall cause its controlled Affiliates not to) issue any press
release or make any public statement intended for broad public dissemination that disparages or is
intended to impugn the business or reputation of the other party.
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10.4 Successors and Assigns; Assignment; No Third Party Beneficiaries. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, permitted assigns, heirs, executors and administrators of the parties hereto.
Neither this Agreement nor any of the rights or obligations hereunder may be assigned by any party
(by Contract, operation of Law or otherwise) without the prior written consent of the other party;
provided that Buyer: (i) may assign any or all of its rights and
interests hereunder to one or more of its wholly-owned subsidiaries; or (ii) designate one or more
of its wholly-owned subsidiaries to perform all of its obligations hereunder, in any or all of
which cases (A) such subsidiary or designee shall execute a written instrument reasonably
satisfactory to Seller agreeing to be bound hereby and (B) Buyer shall remain fully responsible for
the performance of all of its obligations hereunder as if no such assignment or designation had
been made; provided further that the parties shall treat the transactions
contemplated by this Agreement as a single and integrated sale of the Purchased Assets to Buyer,
and Buyer shall be responsible for the effect on any assignments of Assumed Contracts due to any
assignment by Buyer to any of its wholly-owned subsidiaries under this Section 10.4 or Section 2.1.
This Agreement is not intended, and shall not be deemed, to confer any rights, remedies, benefits,
liability or obligation upon any Person other than the parties hereto and their respective
successors and permitted assigns or otherwise create any third-party beneficiary hereto.
10.5 Notices. All notices, requests, demands and other communications which are required or may
be given under this Agreement shall be in writing and shall be deemed to have been duly given: (a)
when received if personally delivered to the party to be notified; (b) when transmitted if
transmitted by confirmed facsimile or email if sent during normal business hours of the recipient
and, if not, then on the next Business Day; or (c) one (1) Business Day after deposit with a
nationally recognized overnight delivery service. In each case any such notice, request, demand or
other communication shall be sent to:
If to Seller, to:
DoubleClick Inc.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Email: xxxxxxxxx@xxxxxxxxxxx.xxx
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Email: xxxxxxxxx@xxxxxxxxxxx.xxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Email: xxxxxxx@xxxxxx.xxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Email: xxxxxxx@xxxxxx.xxx
If to Buyer or Buyer Subsidiary, to:
56
Alliance Data Systems Corporation
00000 Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
Email: xxxxxxxx.xxxxxxxxxx@xxxxxxxxxxxx.xxx
00000 Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
Email: xxxxxxxx.xxxxxxxxxx@xxxxxxxxxxxx.xxx
or to such other place and with such other copies as either party may designate as to itself by
written notice to the other in the manner prescribed herein.
10.6 Governing Law; Jurisdiction; Consent to Service or Process; Waiver of Jury Trial.
(a) This Agreement shall be governed in all respects by the Laws of the State of New York.
(b) Any disagreement, issue, dispute, claim, demand or controversy arising out of or relating
to this Agreement (each, a “Dispute”) shall be brought in the United States District Court
for the Southern District of New York or any New York State court sitting in New York City so long
as one of such courts shall have subject matter jurisdiction over such Dispute. Any cause of action
arising out of the Agreement shall be deemed to have arisen from a transaction of business in the
State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such Dispute and irrevocably
waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to
the laying of the venue of any such Dispute in any such court and that any such Dispute which is
brought in any such court has been brought in an inconvenient forum.
(c) Process in any such Dispute may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 10.5 shall be deemed effective
service of process on such party.
(d) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
10.7 Entire Agreement; Amendments, Modifications and Waivers.
(a) This Agreement (together with all Exhibits and Disclosure Schedules hereto), the
Confidentiality Agreement and the Ancillary Agreements constitute the entire agreement among the
parties pertaining to the subject matter hereof and thereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the parties.
(b) This Agreement may not be amended or modified except with the written consent of each
party hereto, and any provision of this Agreement may be waived only upon the
57
written consent of the party entitled to performance of such provision. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof or of any preceding or succeeding breach hereof, nor shall such waiver constitute
a continuing waiver unless otherwise expressly provided.
10.8 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power
or remedy accruing to any party, upon any breach, default or noncompliance by another party under
this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any
similar breach, default or noncompliance thereafter occurring.
10.9 Severability. In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein, shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by Law, such
invalidity, illegality or unenforceability shall not affect any other provision of this Agreement
or any other such instrument.
10.10 Interpretation. The words “hereof”, “herein” and “hereunder” and words of like import used
in this Agreement shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. When reference is made in this Agreement to an Article or a Section, such
reference shall be to an Article or Section of this Agreement, unless otherwise indicated. The
table of contents and headings contained in this Agreement are for convenience of reference only
and shall not affect in any way the meaning or interpretation of this Agreement. The language used
in this Agreement shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any party. Whenever the
context may require, any pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa. Any reference to any federal, state, local or foreign statute or Law shall be deemed
also to refer to all rules and regulations promulgated thereunder, unless the context requires
otherwise.
10.11 Exhibits and Disclosure Schedules; Construction of Certain Provisions. The Exhibits and
Disclosure Schedules referred to in this Agreement shall be construed with and be deemed as an
integral part of this Agreement to the same extent as if the same had been set forth in their
entirety herein. Each disclosure in the Disclosure Schedules shall be deemed to qualify all
representations and warranties of Seller or Buyer as applicable, notwithstanding the lack of a
specific cross-reference, except to the extent that its applicability to a particular
representation, warranty, agreement or condition is not reasonably apparent from the disclosure
thereof. It is understood and agreed that the specification of any dollar amount in the
representations and warranties contained in this Agreement or the inclusion of any specific item in
the Exhibits or Schedules is not intended to imply that such amounts or higher or lower
amounts, or the items so included or other items, are or are not material, and no party shall use
the fact of the setting of such amounts or the fact of the inclusion of any such item in the
Schedules in any dispute or controversy between the parties as to whether any obligation, item or
matter not described herein or included in an Exhibit or a Schedule is or is not material for
purposes of this Agreement. In addition, matters reflected in the Disclosure Schedules are not
necessarily limited to matters required by this Agreement to be reflected in the Disclosure
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Schedules. Such additional matters are set forth for informational purposes only and do not
necessarily include other matters of a similar nature.
10.12 Cumulative Remedies. Subject to Section 9.4(a) hereof, all rights and remedies of either
party hereto are cumulative of each other and of every other right or remedy such party may
otherwise have at Law or in equity, and the exercise of one or more rights or remedies shall not
prejudice or impair the concurrent or subsequent exercise of other rights or remedies.
10.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and the same
instrument.
[Remainder of Page Intentionally Left Blank.]
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DOUBLECLICK INC. |
||||
By: | /s/ Xxxxxxxxx Xxxxxxxx | |||
Name: | Xxxxxxxxx Xxxxxxxx | |||
Title: | Executive Vice President, General Counsel and Secretary | |||
ALLIANCE DATA SYSTEMS CORPORATION |
||||
By: | /s/ Xxxxxx Xxxxxxxxx | |||
Name: | Xxxxxx Xxxxxxxxx | |||
Title: | Executive Vice President | |||
ALLIANCE DATA FHC, INC. |
||||
By: | /s/ Xxxxxx Xxxxxxxxx | |||
Name: | Xxxxxx Xxxxxxxxx | |||
Title: | Vice President | |||
[Purchase Agreement]