Exhibit 2.1
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EXECUTION COPY
STOCK PURCHASE AGREEMENT
by and between
XXXXXX XXXXXX SOFRES PLC
and
THE INTERPUBLIC GROUP OF COMPANIES, INC.
dated as of
May 14, 2003
Table of Contents
Page
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ARTICLE I PURCHASE AND SALE OF SHARES AND INTERCOMPANY LOAN.....................................1
Section 1.1 Sale and Transfer of Company Shares, AISA Share and Intercompany Loan.............1
Section 1.2 Consideration; Cash Purchase Price; Deferred Purchase Price.......................1
ARTICLE II THE CLOSING...........................................................................4
Section 2.1 The Closing.......................................................................4
Section 2.2 Post-Closing Adjustment...........................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER.............................................10
Section 3.1 Organization.....................................................................10
Section 3.2 Authorization....................................................................11
Section 3.3 Execution; Validity of Agreement.................................................11
Section 3.4 Consents and Approvals; No Violations............................................11
Section 3.5 Ownership and Possession of Company Shares.......................................12
Section 3.6 Capitalization...................................................................12
Section 3.7 Subsidiaries; Intercompany Loan..................................................12
Section 3.8 Company Financial Statements.....................................................14
Section 3.9 Absence of Certain Changes.......................................................14
Section 3.10 Property and Assets..............................................................15
Section 3.11 Leased Properties................................................................15
Section 3.12 Leases, Contracts and Commitments................................................16
Section 3.13 Insurance........................................................................17
Section 3.14 Litigation.......................................................................17
Section 3.15 Environmental Matters............................................................17
Section 3.16 Compliance with Laws and Standards...............................................18
Section 3.17 Employee Benefit Plans...........................................................18
Section 3.18 Tax Matters......................................................................22
Section 3.19 Intellectual Property............................................................23
Section 3.20 Labor Matters....................................................................25
Section 3.21 Absence of Questionable Payments.................................................25
Section 3.22 Insight Express, L.L.C...........................................................26
Section 3.23 Privacy and Panel Operations.....................................................26
Section 3.24 No Interest......................................................................27
Section 3.25 Brokers or Finders...............................................................28
Section 3.26 Reorganizations..................................................................28
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER..........................................28
Section 4.1 Organization.....................................................................28
Section 4.2 Authorization; Validity of Agreement.............................................28
Section 4.3 Consents and Approvals; No Violations............................................29
Section 4.4 Acquisition of Company Shares, AISA Share and Intercompany Loan for
Investment; Ability to Evaluate and Bear Risk....................................30
Section 4.5 Availability of Funds............................................................30
Section 4.6 Litigation.......................................................................31
Section 4.7 Investigation by Purchaser.......................................................31
Section 4.8 Brokers or Finders...............................................................31
Section 4.9 Capitalization of the Purchaser..................................................32
Section 4.10 Compliance with Laws.............................................................32
Section 4.11 Purchaser Financial Statements...................................................32
Section 4.12 Absence of Certain Changes or Events.............................................33
Section 4.13 Purchaser Shareholder Meeting....................................................33
Section 4.14 Purchaser Filings and Public Documents...........................................33
Section 4.15 Absence of Pre-Existing Agreements, Arrangements or Understandings...............34
Section 4.16 No Insolvency....................................................................34
ARTICLE V COVENANTS............................................................................34
Section 5.1 Interim Operations...............................................................34
Section 5.2 Access; Confidentiality..........................................................37
Section 5.3 Efforts and Actions to Cause Closing to Occur....................................38
Section 5.4 Tax Matters......................................................................40
Section 5.5 Publicity........................................................................43
Section 5.6 Employees; Employee Benefits.....................................................43
Section 5.7 Transition Services..............................................................46
Section 5.8 Intercompany Arrangements........................................................47
Section 5.9 Treatment of Seller Guaranties; AISA Shareholder Rights..........................47
Section 5.10 Maintenance of Books and Records.................................................48
Section 5.11 Seller's Trademarks..............................................................49
Section 5.12 Insurance Policies...............................................................49
Section 5.13 Unclaimed Property Audit.........................................................50
Section 5.14 Bank Accounts; Cash Pooling......................................................50
Section 5.15 Director and Officer Resignations................................................50
Section 5.16 Further Assurances...............................................................50
Section 5.17 Restrictive Covenant.............................................................51
Section 5.18 Funding..........................................................................52
Section 5.19 Purchaser Circular; Information Supplied.........................................52
Section 5.20 Purchaser Shareholder Approval; Convening of Purchaser Shareholder Meeting.......53
Section 5.21 Board of Directors Recommendation................................................53
Section 5.22 Acquisition Proposal.............................................................54
Section 5.23 Right of First Refusal...........................................................54
ARTICLE VI CONDITIONS...........................................................................56
Section 6.1 Conditions to Each Party's Obligation to Effect the Closing......................56
Section 6.2 Conditions to Obligations of Purchaser to Effect the Closing.....................56
Section 6.3 Conditions to Obligations of Seller to Effect the Closing........................57
ARTICLE VII TERMINATION..........................................................................58
Section 7.1 Termination......................................................................58
Section 7.2 Effect of Termination............................................................59
Section 7.3 Termination Fee..................................................................59
ARTICLE VIII INDEMNIFICATION......................................................................59
Section 8.1 Indemnification; Remedies........................................................59
Section 8.2 Notice of Claim; Defense.........................................................63
Section 8.3 Tax Effect of Indemnification Payments...........................................64
Section 8.4 No Duplication; Exclusive Remedy.................................................64
Section 8.5 Limitation on Set Off............................................................65
Section 8.6 Mitigation.......................................................................65
Section 8.7 Potential Contributors...........................................................65
Section 8.8 Payments.........................................................................65
ARTICLE IX DEFINITIONS AND INTERPRETATION.......................................................65
Section 9.1 Definitions......................................................................65
Section 9.2 Interpretation...................................................................77
ARTICLE X MISCELLANEOUS........................................................................78
Section 10.1 Fees and Expenses................................................................78
Section 10.2 Amendment and Modification.......................................................78
Section 10.3 Notices..........................................................................78
Section 10.4 Counterparts.....................................................................79
Section 10.5 Entire Agreement; No Third Party Beneficiaries...................................79
Section 10.6 Severability.....................................................................79
Section 10.7 Governing Law....................................................................80
Section 10.8 Compulsory Mediation.............................................................80
Section 10.9 Jurisdiction.....................................................................80
Section 10.10 Time of Essence..................................................................81
Section 10.11 Extension; Waiver................................................................81
Section 10.12 Assignment.......................................................................81
Schedule 2.1(c) Carve-out Allocation
Schedule 2.2 Closing Working Capital
Seller Disclosure Schedule
Exhibit A - AISA Share Transfer Agreement
Exhibit B - AISA Assignment Agreement
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement, dated as of May 14, 2003, by and
between Xxxxxx Xxxxxx Sofres plc, a public limited company incorporated under
the laws of England and Wales ("Purchaser"), and The Interpublic Group of
Companies, Inc., a Delaware corporation ("Seller"), and the holder of all the
capital stock of NFO WorldGroup, Inc., a Delaware corporation (the "Company").
Certain capitalized terms used in this Agreement have the meanings assigned to
them in Article IX.
WHEREAS, Seller owns (a) the Company Shares, which constitute
all of the issued and outstanding capital stock of the Company, (b) a business
share (the "AISA Share") representing 60% of the registered capital of NFO AISA
s.r.o., a company organized under the laws of the Czech Republic ("AISA"),
indirectly through Seller's wholly owned Subsidiary, Interpublic Group Denmark
Holdings APS ("IPG-Denmark"), and the right to acquire the remaining 40% of the
registered capital of AISA on and subject to the terms and conditions of the
AISA Shareholder Arrangement, indirectly through IPG-Denmark and (c) the
Intercompany Loan; and
WHEREAS, Purchaser desires to purchase the Company Shares, the
AISA Share and the Intercompany Loan from Seller, and Seller desires to sell the
Company Shares, the AISA Share and the Intercompany Loan to Purchaser, on the
terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements set forth herein,
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES AND INTERCOMPANY LOAN
Section 1.1 Sale and Transfer of Company Shares, AISA Share and
Intercompany Loan. Subject to the terms and conditions of this Agreement and,
solely in the case of the AISA Share, the AISA Share Transfer Agreement
(although it is understood that to the extent there is any inconsistency between
this Agreement and the AISA Share Transfer Agreement, this Agreement shall
govern and prevail), at the Closing, Seller shall sell, convey, assign, transfer
and deliver the Company Shares, the AISA Share and the Intercompany Loan to
Purchaser, in each case free and clear of all Encumbrances, except for any
Encumbrance arising under applicable securities laws (which will not adversely
affect the transfer of the Company Shares, the AISA Share or the Intercompany
Loan to Purchaser or the consummation of the transactions contemplated by this
Agreement), and Purchaser shall purchase, acquire and accept the Company Shares,
the AISA Share and the Intercompany Loan from Seller.
Section 1.2 Consideration; Cash Purchase Price; Deferred Purchase
Price.
(a) Subject to the terms and conditions of this Agreement and, solely
in the case of the AISA Share, the AISA Share Transfer Agreement (although it is
understood that to the extent there is any inconsistency between this Agreement
and the AISA Share Transfer Agreement, this Agreement shall govern and prevail),
in consideration of the aforesaid sale, conveyance, assignment, transfer and
delivery to Purchaser of the Company Shares, the AISA Share and the Intercompany
Loan, Purchaser shall (i) pay to Seller an amount of cash equal to $400 million
(the "Base Cash Purchase Price"), as adjusted pursuant to Section 1.2(b) and, if
applicable, pursuant to Section 5.1(c) and, if applicable, pursuant to Section
2.2(b) (as so adjusted, the "Cash Purchase Price"), (ii) allot and issue to
Seller the Purchaser Shares in accordance with Section 1.2(e) and (iii) pay to
Seller $10 million in cash on the terms and subject to the conditions set forth
in Section 1.2(g) ((i), (ii) and (iii) together, the "Purchase Price"). The
parties agree that the Purchase Price to be paid by Purchaser in respect of the
Company Shares, the AISA Share and the Intercompany Loan shall be allocated in
the following manner: (A) $127 million, together with the amount of accrued and
unpaid interest on the Intercompany Loan at the Closing Date, shall be allocated
to the Intercompany Loan, (B) $3.27 million shall be allocated to the AISA
Share, (C) if there is a Carve-out Event relating to the Finnish Shares, $1.5
million shall be allocated to the Finnish Shares and (D) the remainder
(including the Purchaser Shares) shall be allocated to the Company Shares. The
parties acknowledge that this allocation shall apply for all reporting,
accounting and Tax purposes.
(b) The Cash Purchase Price shall be an amount equal to (A) minus (B);
where (A) is equal to the Base Cash Purchase Price and (B) is equal to the sum
of (i) the amount, if any, by which $22.575 million exceeds the Closing Working
Capital plus (ii) the amount (positive or negative) of the Closing Net
Indebtedness.
(c) For purposes of determining the amount of cash to be paid as the
Estimated Cash Purchase Price by Purchaser to Seller at the Closing, Seller
shall in good faith prepare a calculation of the Closing Working Capital (such
amount, the "Estimated Closing Working Capital") and the Closing Net
Indebtedness (such amount, the "Estimated Closing Net Indebtedness"), in each
case based on a good faith estimate by Seller of such amount. Seller shall
deliver the calculation of such amounts to Purchaser not less than five Business
Days before the Closing Date.
(d) As used in this Agreement, "Estimated Cash Purchase Price" shall
mean the amount equal to (A) minus (B); where (A) is equal to the Base Cash
Purchase Price and (B) is equal to the sum of (i) the amount, if any, by which
$22.575 million exceeds the Estimated Closing Working Capital plus (ii) the
amount (positive or negative) of the Estimated Closing Net Indebtedness.
(e) The Purchaser Shares shall be allotted and issued by Purchaser
pursuant to Section 1.2(a)(ii), in partial consideration for the Company Shares,
fully paid up and free and clear of all Encumbrances, except for any Encumbrance
arising under applicable securities laws (which will not adversely affect the
transfer of the Purchaser Shares to Seller or the consummation of the
transactions contemplated by this Agreement) and subject to the terms of the
Relationship Agreement and shall rank pari passu in all respects (and as a
single class) with the existing issued Purchaser Ordinary Shares as at Closing,
including the right to participate in all dividends and other distributions
declared, paid or made after the Closing on or in respect of such Purchaser
Ordinary Shares (other than, for the avoidance of doubt, the final dividend of
1.7 xxxxx xxxxxxxx per Purchaser Ordinary Share in respect of the 12 months
ended December 31, 2002, which (as of the date of this Agreement) has a record
date of May 23, 2003 and is payable on July 7, 2003).
(f) If between the date hereof and the Closing there occurs a record
date or effective date in respect of any changes of or to the Purchaser Ordinary
Shares as a result of any share split, scrip dividend, dividend in specie,
distribution in specie, special dividend, bonus issue, capitalization issue,
recapitalization, subdivision, reclassification, combination, exchange,
consolidation or similar transaction with respect to the then issued Purchaser
Ordinary Shares (excluding, in each case and for the avoidance of doubt, the
final dividend of 1.7 xxxxx xxxxxxxx per Purchaser Ordinary Share referred to in
Section 1.2(e) or any subsequent cash dividend that is in the ordinary course of
business consistent with past practice (it being understood that such subsequent
cash dividend shall not be required to be exactly equal in amount per Purchaser
Ordinary Share to the dividend paid per Purchaser Ordinary Share for the same
period during the prior year in order to be considered consistent with past
practice)), then the number of Purchaser Shares shall be appropriately adjusted
as agreed between Purchaser and Seller, both acting reasonably.
(g) If the average of the Purchaser Daily Prices during any consecutive
20 Trading Days falling within the Measuring Period exceeds 146 xxxxx xxxxxxxx
(the "Reference Price"), then, no later than the fifteenth calendar day
following the last day of the first such consecutive 20-Trading Day period
falling within the Measuring Period during which the average of the Purchaser
Daily Prices exceeds the Reference Price, Purchaser shall wire transfer $10
million in immediately available U.S. Dollar funds to an account specified by
Seller.
(i) If between the date hereof and the earlier of (X) the end of
the first consecutive 20-Trading Day period referred to in Section 1.2(g) and
(Y) the end of the Measuring Period, there occurs any (A) announcement by
Purchaser via a Regulatory Information Service, of a commitment by Purchaser to
issue Purchaser Ordinary Shares at a price per Purchaser Ordinary Share (or
issue securities convertible into or exchangeable for Purchaser Ordinary Shares
at any implied price per Purchaser Ordinary Share) that is below the Purchaser
Daily Price for the Trading Day immediately preceding such announcement (other
than the placement of Purchaser Ordinary Shares being announced concurrent with
the announcement of this Agreement, the Purchaser Shares allotted and issued
pursuant to Section 1.2(e), issuances to employees and directors, issuances
pursuant to Purchaser's share schemes, issuances pursuant to currently
outstanding options, issuances exclusively to Seller and/or one or more of its
Subsidiaries and one Exempt Placement (as defined below)) or (B) record date or
effective date in respect of any changes of or to the Purchaser Ordinary Shares
as a result of any share split, scrip dividend, dividend in specie, distribution
in specie, special dividend, bonus issue, capitalization issue,
recapitalization, subdivision, reclassification, combination, exchange,
consolidation or similar transaction with respect to the then-issued Purchaser
Ordinary Shares (excluding, in each case and for the avoidance of doubt, the
final dividend of 1.7 xxxxx xxxxxxxx per Purchaser Ordinary Share in respect of
the 12 months ended December 31, 2002, which (as of the date of this Agreement)
has a record date of May 23, 2003 and is payable on July 7, 2003 and any
subsequent cash dividend that is in the ordinary course of business consistent
with past practice (it being understood that such subsequent cash dividend shall
not be required to be exactly equal in amount per Purchaser Ordinary Share to
the dividend paid per Purchaser Ordinary Share for the same period during the
prior year in order to be considered consistent with past practice)), then the
Reference Price shall be appropriately adjusted as agreed between Purchaser and
Seller, both acting reasonably.
(ii) As used in this Agreement, "Exempt Placement" shall mean the
announcement, by Purchaser via a Regulatory Information Service, of a commitment
by Purchaser to issue either (1) Purchaser Ordinary Shares (other than the
placement of Purchaser Ordinary Shares being announced concurrent with the
announcement of this Agreement, the Purchaser Shares allotted and issued
pursuant to Section 1.2(e), issuances to employees and directors, issuances
pursuant to Purchaser's share schemes, issuances pursuant to currently
outstanding options and issuances exclusively to Seller and/or one or more of
its Subsidiaries) not to exceed, in the aggregate, 5% of the issued and
outstanding Purchaser Ordinary Shares immediately prior to such announcement,
and at a price per Purchaser Ordinary Share that is no more than 5% below the
Purchaser Daily Price on the Trading Day immediately preceding such
announcement, or (2) securities convertible into or exchangeable for no more
than, in the aggregate, 5% of the issued and outstanding Purchaser Ordinary
Shares immediately prior to such announcement, and at an implied price that is
no more than 5% below the Purchaser Daily Price on the Trading Day immediately
preceding such announcement (other than issuances to employees and directors,
issuances pursuant to Purchaser's share schemes, issuances pursuant to currently
outstanding options and issuances exclusively to Seller and/or one or more of
its Subsidiaries).
ARTICLE II
THE CLOSING
Section 2.1 The Closing.
(a) Subject to the provisions of Section 2.1(c), the sale and transfer
of the Company Shares, the AISA Share and the Intercompany Loan by Seller to
Purchaser and the delivery by Purchaser to Seller of the Estimated Cash Purchase
Price (the "Closing") shall take place at the offices of Seller at 10:00 am (New
York City time), not later than five Business Days following the satisfaction
and/or waiver of all conditions set forth in Article VI (other than those
conditions that are to be satisfied at the Closing, but subject to the waiver or
fulfillment of those conditions), unless another date or place is agreed in
writing by each of the parties hereto.
(b) Subject to the provisions of Section 2.1(c), at the Closing:
(i) Seller shall deliver to Purchaser: (A) (i) one or more
certificates representing the Company Shares, each such certificate to be duly
and validly endorsed in favor of Purchaser or accompanied by a separate stock
power duly and validly executed by Seller and otherwise sufficient to vest in
Purchaser legal and beneficial ownership of such Company Shares and (ii) a quota
transfer agreement in form and substance substantially similar to the form
attached hereto as Exhibit A or in a form that is otherwise reasonably
acceptable to Purchaser and Seller (the "AISA Share Transfer Agreement"), duly
executed by IPG-Denmark, notarized and duly legalized to give effect to the
transfer of the AISA Share to Purchaser and such other documentation (if any) in
such form as is sufficient to vest in Purchaser legal and beneficial ownership
of the AISA Share; (B) certificates as of a recent date of the Secretary of
State of the jurisdiction of organization of the Company and those Company
Subsidiaries that have been organized under the laws of states in the United
States and designated by Purchaser at least 20 days prior to Closing as to the
legal existence and good standing of the Company and such designated Company
Subsidiaries; and (C) an instrument evidencing the rights to the Intercompany
Loan and assigning and transferring such rights to Purchaser. In addition, (X)
Seller shall use commercially reasonable efforts to provide to Purchaser at
Closing share certificates or equivalent evidence of ownership interests in
respect of the shares of capital stock or other ownership interests in each of
the Company Subsidiaries and Minority Subsidiaries to the extent (1) such shares
or other ownership interests are beneficially owned, directly or indirectly, by
the Company and (2) the related share certificates or equivalent evidence of
ownership interests are reasonably available to Seller; and (Y) Seller shall
furnish to Purchaser such other documents and certificates (but not legal
opinions) reasonably requested by Purchaser in writing with reasonable advance
notice prior to Closing as are customary for a transaction of this type and
Seller will use its reasonable efforts to deliver to Purchaser novations of the
employment contracts listed in Section 2.1(b) of the Seller Disclosure Schedule
in form and substance substantially similar to the form shown to Purchaser
before the date hereof or that is otherwise reasonably acceptable to Purchaser;
provided, however, that, notwithstanding anything herein to the contrary, the
satisfaction of one or both of the foregoing obligations set forth in clauses
(X) and (Y) of this sentence shall not be a condition to Purchaser's obligation
to effect the Closing.
(ii) Purchaser shall (A) transfer the Estimated Cash Purchase
Price to an account designated by Seller (with notice of such designation to be
provided to Purchaser at least two Business Days prior to the Closing) by wire
transfer of immediately available U.S. Dollar funds and (B) deliver to Seller a
counterpart of the AISA Share Transfer Agreement duly executed by Purchaser,
notarized and duly legalized to give effect to the transfer of the AISA Share to
Purchaser.
(c) Notwithstanding any other provision of this Agreement to the
contrary, but subject to Section 2.1(d), if (i) all the conditions to the
obligations of the parties to consummate the Closing set forth in Article VI
other than any of the conditions specified in Section 6.1(a) or (b) shall have
been satisfied or would be satisfied if the Closing were to have occurred
(ignoring for this purpose the conditions set forth in Sections 6.2(c) and
6.3(c)) and (ii) the failure of Section 6.1(a) or (b) to have been satisfied is
due solely to a failure that relates to, affects or prevents closing with
respect to AISA or any of its Subsidiaries (collectively, the "AISA Companies")
or NFO Infratest OY (if such failure is attributable to any AISA Company or to
NFO Infratest OY, then AISA, together with the other AISA Companies, or NFO
Infratest OY, as the case may be, shall be deemed a "Carve-out Subsidiary," and
any occurrence of both events specified in clauses (i) and (ii) shall be deemed
a "Carve-out Event"), then the parties shall nonetheless be obligated to
consummate the Closing and the following provisions shall apply:
(i) At and for the purposes of the Closing, if the Carve-out Event
is attributable to (A) any AISA Company, the AISA Share shall not be
transferred, and all references to the AISA Share in Section 2.1 shall be
disregarded and instead shall apply in connection with the transfer of the AISA
Share in a Secondary Closing (as defined below) or (B) NFO Infratest OY, the
indirect equity ownership interest of the Company in NFO Infratest OY shall be
transferred to a Seller Subsidiary (other than the Company and the Company
Subsidiaries) before the Closing and shall not be transferred from such Seller
Subsidiary until its transfer in connection with a Secondary Closing, and in the
case of both clauses (A) and (B), the Base Cash Purchase Price shall be reduced,
for any Carve-out Subsidiary in respect of which there has been a Carve-out
Event that is continuing as of the Closing, by the amount allocable to such
Carve-out Subsidiary (and in the case of any of the AISA Companies, the amount
allocable to all the AISA Companies) indicated on Schedule 2.1(c) (each such
amount, a "Carve-out Amount");
(ii) All covenants of the parties that apply to periods at or
prior to the Closing Date shall continue to apply with respect to the Carve-out
Subsidiary and the obligation of each party to consummate an additional closing
in respect of each Carve-out Subsidiary (each a "Secondary Closing") shall be
subject only to (A) the occurrence of the Closing, (B) the satisfaction or
waiver on or prior to the date of such Secondary Closing (the "Secondary Closing
Date") of the closing conditions specified in Sections 6.1(a) and (b) in respect
of the applicable Carve-out Subsidiary and (C) the delivery by Seller to
Purchaser of a certificate signed by a senior or executive officer of Seller,
dated the Secondary Closing Date, to the effect that (1) Seller has performed
and complied with, in all material respects, all agreements, covenants and
obligations required by this Agreement to be performed or complied with prior to
or at such Secondary Closing to the extent relating to the applicable Carve-out
Subsidiary and (2) the representation in Section 3.7(e) (Subsidiaries;
Intercompany Loan) is, insofar as it relates to the applicable Carve-out
Subsidiary, accurate in all material respects, it being understood that no other
conditions specified in Article VI shall apply to the consummation of a
Secondary Closing;
(iii) No Carve-out Subsidiary shall be deemed to be a "Company
Subsidiary," a "Major Subsidiary," or a "Seller Subsidiary" for purposes of the
following provisions of this Agreement unless and until a Secondary Closing
shall have occurred in respect of such Carve-out Subsidiary: (A) Articles I and
II, including for purposes of the Closing Statement, Estimated Cash Purchase
Price and Cash Purchase Price; (B) each representation and warranty by either
party and (C) each covenant and obligation required to be performed at or
following the Closing, including the indemnification provisions of Article VIII.
In the event of a Secondary Closing with respect to a Carve-out Subsidiary, any
reference herein to Closing or the Closing Date shall mean, with respect to such
Carve-out Subsidiary, the applicable Secondary Closing or Secondary Closing
Date;
(iv) The provisions of Article VII shall not apply to a Secondary
Closing and the transactions contemplated by any Secondary Closing may only be
terminated or abandoned at any time prior to the applicable Secondary Closing
Date: (A) by the mutual written consent of Purchaser and Seller; (B) by either
party on prior written notice to the other if any Governmental Entity in the
relevant jurisdiction of the applicable Carve-out Subsidiary shall have issued
an order, decree or ruling or taken any other action which permanently
restrains, enjoins or otherwise prohibits the consummation of such Secondary
Closing and such order, decree, ruling or other action shall have become final
and non-appealable; (C) by either party on prior written notice to the other if
such Secondary Closing shall not have occurred on or prior to the 270th day
after the date hereof; or (D) by either party on prior written notice to the
other if any of the conditions set forth in Section 6.1(a) or (b) in respect of
the applicable Carve-out Subsidiary shall have become incapable of fulfillment
with commercially reasonable efforts and shall not have been waived by such
party (it being understood that whether an effort is commercially reasonable
shall be determined relative to the Carve-out Amount allocated to the applicable
Carve-out Subsidiary); provided, that in the event of the termination of the
transactions contemplated by the applicable Secondary Closing, (a) this
Agreement shall be of no further force or effect in respect of the applicable
Carve-out Subsidiary, except this Section 2.1(c) and Section 5.2(b) (other than
the penultimate sentence of Section 5.2(b)) shall continue to apply in respect
of the applicable Carve-out Subsidiary and (b) such termination shall relieve
each party from all violations of this Agreement in respect of the applicable
Carve-out Subsidiary that occurred prior to such termination other than (i)
violations that resulted in or caused the failure of the applicable Secondary
Closing to occur and (ii) willful breaches.
(v) At any Secondary Closing, Seller shall sell, convey, assign,
transfer and deliver the AISA Share to Purchaser (in the case of a Secondary
Closing relating to the AISA Companies) or shall, or shall cause its Subsidiary
to, sell, convey, assign, transfer and deliver all of its direct or indirect
equity ownership interest in NFO Infratest OY (the "Finnish Shares") (in the
case of a Secondary Closing relating to NFO Infratest OY) to Purchaser, in each
case free and clear of all Encumbrances, except for any Encumbrance arising
under applicable securities laws (which will not adversely affect the transfer
of the AISA Share or the Finnish Shares, as applicable, or the consummation of
such Secondary Closing), and Purchaser shall purchase, acquire and accept the
AISA Share or the Finnish Shares, as applicable, from Seller.
(vi) In consideration of the aforesaid sale, conveyance,
assignment, transfer and delivery to Purchaser of the AISA Share or the Finnish
Shares, as the case may be, Purchaser shall pay to Seller the applicable
Estimated Carve-out Purchase Price. For purposes of any Secondary Closing, the
"Estimated Carve-out Purchase Price" shall mean an amount equal to (A) minus
(B); where (A) equals the Carve-out Amount applicable to the Carve-out
Subsidiary being transferred and (B) equals the amount, positive or negative, of
the Closing Net Indebtedness applicable only to such Carve-out Subsidiary as of
the applicable Secondary Closing Date as estimated by Seller in good faith and
set forth in a notice delivered by Seller to Purchaser at least five Business
Days before such Secondary Closing, calculated in the same manner set forth in
Section 2.2(g).
(vii) Subject to the limitations on the conditions to a Secondary
Closing set forth in Section 2.1(c)(ii), any Secondary Closing shall be effected
in accordance with the procedures set forth in Sections 2.1(a) and (b), except
that only the provisions relevant to the transfer of the AISA Share or the
Finnish Shares, as the case may be, shall apply.
(viii) The provisions of Section 2.2 shall apply with respect to
any Secondary Closing, except that: (A) the provisions relating to the Closing
Working Capital shall be disregarded and the Cash Purchase Price shall mean an
amount equal to (X) minus (Y); where (X) equals the Carve-out Amount applicable
to the Carve-out Subsidiary being transferred and (Y) equals the amount,
positive or negative, of the Closing Net Indebtedness applicable only to such
Carve-out Subsidiary as of the date of the Secondary Closing, calculated in the
same manner set forth in Section 2.2(g); and (B) the 120-day and 45-day periods
referenced in Sections 2.2(c) and (d) shall be deemed to be 30-day and 20-day
periods, respectively.
(ix) Seller shall bear all costs of corporate reorganizations
necessary to comply with the provisions of this Section 2.1(c) following a
Carve-out Event with respect to NFO Infratest OY, including any Taxes resulting
therefrom.
(d) There shall not be a Carve-out Event relating to NFO Infratest OY
and all references in Section 2.1(c) to NFO Infratest OY and the Finnish Shares
shall be ignored if the direct ownership of such entity would not be able to be
transferred to a Seller Subsidiary other than the Company and the Company
Subsidiaries (and thereafter to Purchaser) without giving rise to Taxes, costs
and expenses payable by Seller and its Affiliates that, in the aggregate, are,
in Seller's reasonable judgment, material (relative to the Carve-out Amount for
NFO Infratest OY).
Section 2.2 Post-Closing Adjustment.
(a) Seller has prepared the attached Schedule 2.2 which lists certain
current asset and current liability accounts and certain accounting principles,
methodologies and policies to be used to determine the accounts. The Cash
Purchase Price shall be adjusted after the Closing in accordance with this
Section 2.2 based upon (i) the actual Closing Net Indebtedness and (ii) the
amounts as of the Closing (such amounts, cumulatively, the "Closing Working
Capital") of the accounts shown on Schedule 2.2. For purposes hereof, the
statement of the Closing Net Indebtedness and the Closing Working Capital,
together with the calculation of the Cash Purchase Price that results from the
determination of such amounts, shall be referred to as the "Closing Statement."
(b) The Closing Statement shall be prepared on the basis of, and using
the same accounting principles, methodologies and policies, as specified in
Schedule 2.2 and, to the extent not specified therein, as used in preparing the
Company Financial Statements. If the Cash Purchase Price as finally determined
in accordance with this Section 2.2 is less than the Estimated Cash Purchase
Price, Seller shall pay to Purchaser the amount by which the Estimated Cash
Purchase Price exceeds the Cash Purchase Price, and if the Cash Purchase Price
as finally determined in accordance with this Section 2.2 exceeds the Estimated
Cash Purchase Price, Purchaser shall pay to Seller the amount by which the Cash
Purchase Price exceeds the Estimated Cash Purchase Price, by wire transfer of
immediately available U.S. Dollar funds to an account designated by the party
receiving payment within three Business Days after the final determination of
the Cash Purchase Price, plus interest on the amount paid accrued from the
Closing Date to the date of such payment at the Prime Rate applicable from time
to time.
(c) As promptly as practicable (and, in any event, within 120 days
after the Closing), Purchaser shall prepare and deliver to Seller the Closing
Statement prepared in accordance with this Section 2.2, with reasonable detail
and back up documentation. If Seller disagrees with the determination of the
Closing Statement, Seller shall notify Purchaser of such disagreement as soon as
practicable and in any event within 120 days after delivery of the Closing
Statement, which notice shall set forth any such disagreement in reasonable
detail. If Seller fails to deliver this notice by the end of such 120 days,
Seller shall be deemed to have accepted the Closing Statement delivered by
Purchaser. Matters included in the calculations in the Closing Statement that
are not objected to by Seller in such notice shall be deemed accepted by Seller
and shall not be subject to further dispute or review in connection with the
determination of the Closing Working Capital or Closing Net Indebtedness. During
the 120-day period of Seller's review and during the period of any dispute under
this Section 2.2, Purchaser shall provide Seller and its accountants access to
the books and records and personnel of Purchaser, the Company and the Company
Subsidiaries, in such a manner as not to unreasonably interfere with the normal
operations of the business of Purchaser, the Company or the Company
Subsidiaries, and Seller shall have reasonable access to all documents,
schedules and workpapers used by Purchaser in the preparation of the Closing
Statement. Purchaser and Seller shall negotiate in good faith to resolve any
such disagreement, and any resolution agreed to in writing by Purchaser and
Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any such disagreement
as contemplated by Section 2.2(c) within 45 days after delivery by Seller of
written notice of such disagreement, either party may give the other a notice of
dispute. Promptly after receipt of such notice, Purchaser and Seller shall
jointly select a partner at Ernst & Young LLP or another mutually acceptable
accounting firm to resolve such disagreement (the person so selected shall be
referred to herein as the "Accounting Arbitrator"). The parties shall instruct
the Accounting Arbitrator to consider only those items and amounts set forth in
the Closing Statement as to which Purchaser and Seller have not resolved their
disagreement. The Accounting Arbitrator shall treat each party equally with
respect to burdens of proof, and neither party's position shall have a
presumption of correctness or reasonableness in any respect. Purchaser and
Seller shall use reasonable best efforts to cause the Accounting Arbitrator to
deliver to the parties, as promptly as practicable, a written report setting
forth the resolution of any such disagreement determined in accordance with the
terms of this Agreement. Such report shall be final and binding upon the
parties. The fees, costs and expenses of the Accounting Arbitrator shall be
borne one-half by Purchaser and one-half by Seller; provided that if the
Accounting Arbitrator determines that one party's position is completely
correct, then such party shall pay none of the fees, costs and expenses of the
Accounting Arbitrator and the other party shall pay all such fees, costs and
expenses.
(e) If and to the extent any item taken into account in the
determination of the Closing Net Indebtedness would constitute a breach by
Seller of any representation or warranty or of any covenant or agreement
contained in this Agreement, such item shall not be considered a breach by
Seller of a representation or warranty or covenant or agreement and Purchaser
shall not have a right or remedy arising from a breach of the applicable
representation or warranty or covenant or agreement; provided, however, that,
subject to Article VIII, Purchaser shall be entitled to indemnification for such
breach of such representation or warranty or covenant or agreement to the extent
of Purchaser's Losses relating to such breach that are in excess of the amount
taken into account in the calculation of Closing Net Indebtedness.
(f) If and to the extent an item reflected in the Closing Working
Capital would constitute a breach by Seller of any representation or warranty or
of any covenant or agreement contained in this Agreement (such item, a "Breach
Item"), then the following provisions shall apply:
(i) if and to the extent Purchaser is aware, or it would be
reasonably apparent to a Person familiar with the terms of this Agreement, that
such item is a Breach Item, then Purchaser shall be deemed to have irrevocably
waived its right to assert a claim for indemnity under this Agreement with
respect to such Breach Item to the extent of the aggregate amount in respect of
such item that is included in the Closing Working Capital (and, subject to
Article VIII, Purchaser shall be entitled to indemnification for Losses in
excess of such amount arising from such Breach Item); and
(ii) if and to the extent Purchaser is not aware, and it would not
be reasonably apparent to a Person familiar with the terms of this Agreement,
that such item is a Breach Item, then Purchaser shall be deemed to have
irrevocably waived its right to assert a claim for indemnity under this
Agreement with respect to such Breach Item to the extent of the lesser of (A)
the amount by which $22.575 million exceeds the Closing Working Capital and (B)
the aggregate amount in respect of such Breach Item that is included in the
Closing Working Capital (and, subject to Article VIII, Purchaser shall be
entitled to indemnification for Losses in excess of such lesser amount arising
from such Breach Item).
(g) For the avoidance of doubt, Closing Working Capital and Closing Net
Indebtedness shall be calculated as of the open of business on the Closing Date,
except that the amount of Closing Net Indebtedness shall be reduced to the
extent it is reduced on the Closing Date other than as a result of the
application of "cash and cash equivalents" (determined on the same basis as such
line item was determined in the Company Financial Statements) of the Company or
Company Subsidiaries. Furthermore, and for the avoidance of doubt, (i) cash
deposited by Purchaser on the Closing Date in bank accounts controlled by the
Company or any Company Subsidiary shall not be counted as consolidated cash or
cash equivalents of the Company and the Company Subsidiaries and (ii) any part
of the transfer of the Estimated Cash Purchase Price that Seller uses to reduce
the Closing Net Indebtedness shall be taken into account, in each case when
determining the Closing Net Indebtedness.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as specifically set forth in the Seller Disclosure Schedule
delivered by Seller to Purchaser simultaneously with the execution hereof by
reference to the applicable sections hereof or as reasonably apparent on the
face of such Seller Disclosure Schedule, or as specifically disclosed in or as
readily inferable from the Company Financial Statements, Seller represents and
warrants to Purchaser that all of the statements contained in this Article III
are true as of the date of this Agreement (or, if made as of a specified date,
as of such date). The inclusion of any information in any section of the Seller
Disclosure Schedule or other document delivered by Seller pursuant to this
Agreement shall not be deemed to be an admission or evidence of the materiality
of such item, nor shall it establish a standard of materiality for any purpose
whatsoever.
Section 3.1 Organization. Each of Seller, the Company and each Company
Subsidiary (a) is a corporation or other legal entity duly organized, validly
existing and, if applicable, in good standing under the laws of its jurisdiction
of organization; (b) has all requisite corporate or other legal entity power and
authority to carry on its business as it is now being conducted and to own the
properties and assets it now owns; and (c) is duly qualified or licensed to do
business in every jurisdiction in which such qualification is required, in each
case except for such failures that would not, individually or in the aggregate,
either (i) have (A) a Company Material Adverse Effect, (B) a material adverse
effect on the ability of Seller to consummate the Closing or perform its
obligations under this Agreement or (C) a material adverse effect on the entity
to which the failure relates or (ii) impede in any material respect or
materially delay the consummation of the Closing. Seller has heretofore
delivered to Purchaser true, complete and correct copies of the certificate of
incorporation and by-laws of the Company as presently in effect. Section 3.1 of
the Seller Disclosure Schedule sets forth a list of all the Company Subsidiaries
and Minority Subsidiaries, including their jurisdiction of organization and the
respective record and beneficial ownership interests therein of Seller, the
Company and the Company Subsidiaries (identified by name), and, to the extent
not wholly owned by Seller, the Company or any Company Subsidiary, the identity
and percentage ownership interest of any other record owner.
Section 3.2 Authorization. Seller has the requisite corporate power and
authority to execute, deliver and perform this Agreement, the Relationship
Agreement and the Transition Services Agreement (collectively, the "Transaction
Documents") and to consummate the Closing, and IPG-Denmark has the requisite
corporate power and authority to execute, deliver and perform the AISA Share
Transfer Agreement. The execution, delivery and performance by Seller of the
Transaction Documents and by IPG-Denmark of the AISA Share Transfer Agreement,
and the consummation by Seller and IPG-Denmark of the Closing have been (or, in
the case of IPG-Denmark, at Closing will have been) duly authorized by the board
of directors of Seller and of IPG-Denmark, as applicable, and no other corporate
action on the part of Seller is, or on the part of IPG-Denmark will be,
necessary to authorize the execution, delivery and performance by Seller or
IPG-Denmark of any of the Transaction Documents or the AISA Share Transfer
Agreement, as applicable, or the consummation by Seller or IPG-Denmark of the
Closing.
Section 3.3 Execution; Validity of Agreement. Each of the Transaction
Documents has been duly executed and delivered by Seller and, at Closing, the
AISA Share Transfer Agreement will have been duly executed and delivered by
IPG-Denmark, and, assuming due and valid authorization, execution and delivery
in each case by Purchaser, is (or, in the case of the AISA Share Transfer
Agreement, will be at Closing) a valid and binding obligation of Seller or
IPG-Denmark, as applicable, enforceable against Seller or IPG-Denmark, as
applicable, in accordance with its terms.
Section 3.4 Consents and Approvals; No Violations. Except for the
filing of reports by Seller under the Exchange Act and in accordance with New
York Stock Exchange rules and requirements, and except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of state securities or blue sky laws, the HSR Act and
applicable non-U.S. laws with respect to foreign investment and competition,
none of the execution, delivery or performance of the Transaction Documents by
Seller or the AISA Share Transfer Agreement by IPG-Denmark or the consummation
by Seller or IPG-Denmark of the Closing will (a) conflict with or result in any
breach of any provision of (i) the certificate of incorporation or by-laws of
Seller or the Company or any organizational document of any Major Subsidiary or
(ii) any organizational document of any Company Subsidiary that is not a Major
Subsidiary, (b) require any filing with, or permit, authorization, consent or
approval of, any Governmental Entity, (c) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any right of termination, cancellation, modification or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which Seller, the Company or any Company Subsidiary is a party or by which
any of them or any of their respective properties or assets may be bound, (d)
violate any statute, law, constitutional provision, code, regulation, ordinance,
rule, ruling, judgment, decision, order, writ, injunction, decree, permit,
concession, grant, franchise, license, agreement, directive, binding guideline
or policy, or rule of common law, requirement of or other governmental
restriction of or determination by any Government Entity or any interpretation
of any of the foregoing by any Governmental Entity ("Law") applicable to Seller,
any of its Subsidiaries or any of their respective properties or assets or (e)
result in the creation or imposition of any Encumbrance upon the Company, any of
the Company Subsidiaries, or any of their respective properties or assets,
excluding from the foregoing clauses (b), (c), (d) and (e) such violations,
breaches, defaults and Encumbrances which would not, individually or in the
aggregate, (i) have a Company Material Adverse Effect or a material adverse
effect on Seller's or IPG-Denmark's ability to consummate the Closing or perform
Seller's obligations under any of the Transaction Documents or IPG-Denmark's
obligations under the AISA Share Transfer Agreement, (ii) have a material
adverse effect on the entity to which the violation, breach, default or
Encumbrance relates or (iii) impede in any material respect or materially delay
the consummation of the Closing.
Section 3.5 Ownership and Possession of Company Shares. Seller is the
record and beneficial owner of all the issued and outstanding Company Shares,
free and clear of all Encumbrances whatsoever, except for any Encumbrances
created by this Agreement and Encumbrances arising under applicable securities
laws which will not adversely affect the transfer of the Company Shares to
Purchaser or the consummation of the transactions contemplated by this
Agreement.
Section 3.6 Capitalization.
(a) The issued and outstanding capital stock of the Company consists
exclusively of the Company Shares. The Company Shares are duly authorized,
validly issued, fully paid and non-assessable. There are no options, puts,
warrants, calls, preemptive rights, subscriptions or other rights or agreements,
arrangements or commitments to which any of Seller, the Company or any of their
respective Subsidiaries is a party or by which any of them is bound (whether or
not conditioned) obligating any of them (i) to issue, deliver, transfer or sell,
or refrain from issuing, delivering, transferring or selling, any shares of
capital stock or equity interests of the Company, or to grant, extend or enter
into any such option, put, warrant, call or other right, agreement, arrangement
or commitment, (ii) to repurchase, redeem or otherwise acquire, or to refrain
from repurchasing, redeeming or otherwise acquiring, any shares of capital stock
of the Company, or to grant, extend or enter into any such option, put, right or
agreement or (iii) to vote, or to refrain from voting, any shares of capital
stock or equity interests of the Company.
(b) There are no outstanding contractual obligations of the Company or
any Company Subsidiary to make payments based on the value of the shares of
capital stock or other equity interests of the Company or any of its
Subsidiaries or to provide funds to make any investment (in the form of a loan,
capital contribution or otherwise) in any Subsidiary or any other entity other
than contractual obligations in the ordinary course of business to provide loans
to Company Subsidiaries.
Section 3.7 Subsidiaries; Intercompany Loan.
(a) All the outstanding capital stock of, or other ownership interests
in, each Company Subsidiary (i) is owned directly or indirectly by the Company,
free and clear of all Encumbrances, except for any Encumbrances created by this
Agreement and Encumbrances arising under applicable securities laws which will
not adversely affect the consummation of the transactions contemplated by this
Agreement and (ii) is duly authorized, validly issued, fully paid, nonassessable
and, only in the case of capital stock or other ownership interest issued by
Company Subsidiaries that are German corporations or organizations, not repaid.
Seller holds its rights under the Intercompany Loan free and clear of all
Encumbrances, except for any Encumbrances created by this Agreement and
Encumbrances arising under applicable securities laws which will not adversely
affect the transfer of the Intercompany Loan to Purchaser or consummation of the
transactions contemplated by this Agreement. The Intercompany Loan is valid,
binding and enforceable against the parties thereto in accordance with and
subject to its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and to general principles of equity.
(b) Neither the Company nor any of its Subsidiaries owns, directly or
indirectly, any capital stock or other ownership interests, or has any
obligations to acquire any capital stock or other ownership interest, in any
corporation, partnership, joint venture or other entity that is not the Company,
a Company Subsidiary or a Minority Subsidiary.
(c) All the capital stock of, or other ownership interests in, each
Minority Subsidiary owned, directly or indirectly, by the Company (i) is owned
free and clear of all Encumbrances, except for any Encumbrances created by this
Agreement and Encumbrances arising under applicable securities laws which will
not adversely affect the consummation of the transactions contemplated by this
Agreement and (ii) is duly authorized, validly issued, fully paid, nonassessable
and, only in the case of capital stock issued by, or other ownership interest
in, Minority Subsidiaries that are German corporations or organizations, not
repaid.
(d) There are no options, puts, warrants, calls, preemptive rights,
subscriptions or other rights or agreements, arrangements or commitments to
which Seller, the Company or any of their respective Subsidiaries is a party or
by which any of them is bound (whether or not conditioned) obligating any of
them (i) to issue, deliver, transfer or sell, or refrain from issuing,
delivering, transferring or selling, any shares of capital stock or equity
interests of any Company Subsidiary, or to grant, extend or enter into any such
option, put, warrant, call or other right, agreement, arrangement or commitment,
(ii) to repurchase, redeem or otherwise acquire, or to refrain from
repurchasing, redeeming or otherwise acquiring, any shares of capital stock or
equity interests of any Company Subsidiary, or to grant, extend or enter into
any such option, put, right or agreement or (iii) to vote, or to refrain from
voting, any shares of capital stock or equity interests of any Company
Subsidiary.
(e) All the outstanding capital stock of IPG-Denmark is owned directly
or indirectly by Seller. IPG-Denmark is the record and beneficial owner of the
AISA Share free and clear of all Encumbrances, except for any Encumbrances
created by this Agreement or the AISA Shareholder Arrangement and Encumbrances
arising under applicable securities laws which will not adversely affect the
transfer of the AISA Share to Purchaser or the consummation of the transactions
contemplated by this Agreement. The AISA Share is duly authorized, validly
issued, fully paid and nonassessable. At Closing, Purchaser will own the AISA
Share free and clear of all Encumbrances and claims of third parties, except for
any Encumbrances arising under applicable securities laws (which will not
adversely affect the transfer of the AISA Share or the consummation of the
transactions contemplated by the Agreement). In the event there is a Secondary
Closing relating to the Finnish Shares: (i) Seller or a Seller Subsidiary will
be the record and beneficial owner of the Finnish Shares immediately prior to
such Secondary Closing; (ii) the Finnish Shares will be duly authorized, validly
issued, fully paid and nonassessable; and (iii) at such Secondary Closing,
Purchaser will own the Finnish Shares free and clear of all Encumbrances and
claims of third parties, except for any Encumbrances arising under applicable
securities laws (which will not adversely affect the transfer of the Finnish
Shares or the consummation of the transactions contemplated by the Agreement).
(f) There are no options, puts, warrants, calls, preemptive rights,
subscriptions or other rights or agreements, arrangements or commitments to
which Seller, the Company or any of their respective Subsidiaries is a party or
by which any of them is bound (whether or not conditioned) obligating any of
them (i) to deliver, transfer or sell, or refrain from delivering, transferring
or selling, any shares of capital stock or equity interests of any Minority
Subsidiary, or to grant, extend or enter into any such option, put, warrant,
call or other right, agreement, arrangement or commitment, (ii) to purchase or
otherwise acquire, or to refrain from purchasing or otherwise acquiring, any
shares of capital stock or equity interests of any Minority Subsidiary, or to
grant, extend or enter into any such option, put, right or agreement or (iii) to
vote, or to refrain from voting, any shares of capital stock or equity interests
of any Minority Subsidiary.
Section 3.8 Company Financial Statements.
(a) True and complete copies of the Company Financial Statements are
included in Section 3.8 of the Seller Disclosure Schedule. The Company Financial
Statements have been prepared in accordance with U.S. GAAP applied on a
consistent basis (except as stated in the notes thereto) and on that basis
fairly present, in all material respects, the consolidated financial position
and the consolidated results of operations and cash flows of the Company and the
consolidated Company Subsidiaries as of the dates and for the periods referred
to therein. All Company Subsidiaries and, if applicable, Carve-out Subsidiaries
are consolidated for purposes of the Company Financial Statements except as set
forth in Section 3.8(a) of the Seller Disclosure Schedule.
(b) Except for liabilities (i) that have been included in or reserved
against in the Company Financial Statements, (ii) that have not had and would
not be reasonably expected to have, individually or in the aggregate, a Company
Material Adverse Effect, (iii) that arise under any of the contracts or
agreements of the Company and the Company Subsidiaries that are either listed in
the Seller Disclosure Schedule or not required to be listed therein because of
the amount or terms involved or (iv) that have been or are incurred after the
Company Balance Sheet Date in the ordinary course of business consistent with
past practice or in connection with the transactions contemplated hereunder,
neither the Company nor any of its Subsidiaries has any liabilities, whether
accrued or contingent, and whether or not required to be recorded or reflected
on a balance sheet under U.S. GAAP.
Section 3.9 Absence of Certain Changes. (a) Since the Company Balance
Sheet Date, no event, change or circumstance that would have a Company Material
Adverse Effect has occurred; (b) from the Company Balance Sheet Date to the date
hereof, neither the Company nor any of the Company Subsidiaries has taken or
failed to take any action that, if taken or failed to be taken, as applicable,
after the date hereof, would constitute a violation of Section 5.1(a); and (c)
from the Company Balance Sheet Date to the date hereof, the Company and the
Company Subsidiaries have and, to the Knowledge of Seller, the Minority
Subsidiaries have conducted their respective businesses in the ordinary and
usual course consistent with past practice.
Section 3.10 Property and Assets.
(a) The Company and the Company Subsidiaries have good title to, or a
valid lease, license or right to use, all assets, properties and rights used by
them except as would not have, individually or in the aggregate, a Company
Material Adverse Effect. Those real and other tangible properties purported to
be owned by any of the Company or its Subsidiaries are held free and clear of
all Encumbrances other than (i) Encumbrances for Taxes not yet due and payable,
(ii) mechanics', materialmen's, carriers', workers', repairers', landlords' and
similar Encumbrances arising or incurred in the ordinary course of business
which do not relate to amounts past due, except if such amount is being
contested in good faith, (iii) in the case of real property only, zoning,
entitlement, building and other land use regulations that are not violated by
current occupancy or use or enjoyment of such property and do not materially
detract from or diminish the value thereof to the business of the Company or
Company Subsidiary using such real property and (iv) in the case of real
property only, customary covenants, conditions, restrictions, easements and
similar restrictions of record affecting title that do not impair current
occupancy or use or enjoyment of such property or materially detract from or
diminish the value thereof to the business of the Company or Company Subsidiary
that is using such real property (clauses (i) through (iv) being "Permitted
Encumbrances"). All Encumbrances set forth in Section 3.10(a) of the Seller
Disclosure Schedule that are marked with an asterisk shall be released and
terminated at or prior to the Closing. All tangible assets owned or leased by
the Company or any of its Subsidiaries are in satisfactory operating condition
for the uses to which they are being put, subject to ordinary wear and tear and
ordinary maintenance requirements, except as would not have, individually or in
the aggregate, a material adverse effect on the Company or the applicable entity
involved.
(b) Section 3.10(b) of the Seller Disclosure Schedule sets forth a
complete list of all Real Property and specifies which Real Property is owned
and which is leased and if leased the expiration of the term of occupancy,
except (when made at Closing) such list need not take into account replacements
and renewals after the date hereof (relating to Real Property that is leased as
of the date hereof) to the extent such replacements and renewals are effected in
the ordinary course of business consistent with past practice.
(c) The Company and the Company Subsidiaries beneficially hold all
assets, properties and rights (other than the assets, properties and rights used
by Seller or one or more Subsidiaries of Seller (other than the Company and the
Company Subsidiaries) in the provision of those inter-company services to the
Company and the Company Subsidiaries listed in Section 3.10(c) of the Seller
Disclosure Schedule and other than the assets, properties and rights of Seller
and its Subsidiaries (other than the Company and the Company Subsidiaries) under
the arrangements set forth in Section 5.8 of the Seller Disclosure Schedule)
used by the Company and the Company Subsidiaries in the conduct of the business
of the Company and the Company Subsidiaries.
Section 3.11 Leased Properties. Section 3.11 of the Seller Disclosure
Schedule sets forth a true and complete list of all real property leased by the
Company or any Company Subsidiary pursuant to a lease with base annual rental
payments greater than $350,000 (the "Leased Properties"), except (when made at
Closing) such list need not include leases that are excepted from the list
described in Section 3.10(b).
Section 3.12 Leases, Contracts and Commitments.
(a) Section 3.12 of the Seller Disclosure Schedule sets forth a
complete list of every contract, agreement, loan, lease guarantee, license,
guarantee or commitment to which the Company or any of its Subsidiaries is a
party that (i) provides for future payments by the Company or any Company
Subsidiary, or to the Company or any Company Subsidiary, of more than $500,000
per annum and may not be canceled upon 60 days' notice without any liability,
penalty or premium (excluding purchase orders, invoices, operating leasing
transactions (but not capitalized leasing transactions) and oral agreements to
perform a specific assignment for a client, in each case entered into or
incurred in the ordinary course of business) except (when made at Closing) for
contracts, agreements, loans, lease guarantees, licenses, guarantees and
commitments to the extent both (A) they are entered into in the ordinary course
of business consistent with past practice after the date hereof and (B) copies
have been furnished to Purchaser prior to Closing; (ii) was entered into by the
Company or a Major Subsidiary with an officer or director of the Company, of a
Major Subsidiary or of Seller, or with an officer or director of a Company
Subsidiary which is not a Major Subsidiary, involving payments of more than
$60,000 remaining; (iii) was entered into by any Company Subsidiary other than a
Major Subsidiary with an officer or director of the Company, of a Company
Subsidiary or of Seller, involving payments of more than $100,000 remaining;
(iv) is a collective bargaining or similar agreement (including any recognition,
procedural or other agreement with a trade union, works council or other body
representing employees of the Company or any Company Subsidiary) except (when
made at Closing) for agreements entered into after the date hereof in the
ordinary course of business consistent with past practice that are amendments or
renewals of agreements existing as of the date hereof (and, for the avoidance of
doubt, are not agreements with a union, works council or other body that is not
a party to the agreement that is currently in effect and that is being so
amended or renewed); or (v) materially restricts the Company or any Company
Subsidiary, or will restrict the Purchaser after consummation of the
transactions contemplated hereby, from engaging in any business activity
anywhere in the world (including, without limitation, any non-competition or
exclusivity agreements which restricts the Company). The items set forth in
Sections 3.11 and 3.12 of the Seller Disclosure Schedule are hereinafter
referred to as "Contracts".
(b) True, correct and complete copies of all of the written Contracts,
including all of the amendments thereto, and descriptions of all oral Contracts
have been made available to Purchaser. The Contracts are valid, binding and
enforceable against the respective parties in accordance with and subject to
their respective terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and to general principles of equity. To the
Knowledge of Seller, no party to any Contract has delivered a written notice of
its decision to terminate or amend (in a material respect) any Contract or to
refuse to renew the same upon expiration of its term. There is not and, to the
Knowledge of Seller, there has not been claimed or alleged by any Person, with
respect to any Contract, any existing default, event of default or event that,
with notice or lapse of time or both, would constitute a default or event of
default on the part of the Company or any Subsidiary of the Company or, to the
Knowledge of Seller, on the part of any other party thereto, except such
defaults, events of default and other events that would not have, individually
or in the aggregate, a Company Material Adverse Effect.
Section 3.13 Insurance. Section 3.13 of the Seller Disclosure Schedule
lists all insurance policies (including generally applicable deductibles) that
provide coverage with respect to the business or assets of the Company or any of
the Company Subsidiaries, except (when made at Closing) for insurance policies
entered into or renewed or replaced in the ordinary course of business
consistent with past practice after the date hereof. All assets and risks of the
Company and the Company Subsidiaries are covered by valid and currently
effective insurance policies in such types and amounts as are consistent with
customary practices and standards of companies engaged in business and
operations similar to those of the Company and the Company Subsidiaries.
Section 3.14 Litigation. Each of the Company and the Company
Subsidiaries is not a party to, or the subject of, or, to the Knowledge of
Seller, threatened to be made a party to or the subject of, any actions at law
or in equity, suits, proceedings or hearings, and is not a party to, or the
subject of or, to the Knowledge of Seller, threatened to be made a party to or
the subject of any investigation, by, of, in or before any Governmental Entity
that (a) involves a claim in excess of $500,000 or (b) has had, or if decided
adversely to the Company or such Company Subsidiary, would reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect or (c) has had or would reasonably be expected to have a material adverse
effect on the applicable entity involved. Neither Seller nor any Seller
Subsidiary (including the Company and the Company Subsidiaries) is a party to
or, to the Knowledge of Seller, threatened to be made a party to any actions at
law or in equity, suits, proceedings, hearings or investigations of, in or
before any Governmental Entity (A) which has had, or if decided adversely to
Seller or any Seller Subsidiary would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect or a
material adverse effect on the Company or any Major Subsidiary or (B) that, as
of the date hereof, questions or challenges the validity of any of the
Transaction Documents or the AISA Share Transfer Agreement or any action taken
or to be taken by Seller, the Company or any Company Subsidiary pursuant to any
of the Transaction Documents or the AISA Share Transfer Agreement. None of
Seller, the Company or the Company Subsidiaries is subject to any outstanding
order, writ, injunction or decree which has had, or would reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect or
material adverse effect on the Company or any Major Subsidiary.
Section 3.15 Environmental Matters. Except as has not had and would not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the Company or any Major Subsidiary, (a) the Company and each
Company Subsidiary is in compliance with all applicable Environmental Laws, (b)
neither the Company nor any Subsidiary of the Company has received any written
notice with respect to the business of, or any property owned or leased by, the
Company or any such Subsidiary from any Governmental Entity or third party
alleging that the Company or any such Subsidiary is not in material compliance
with any Environmental Law, (c) there has been no Release of a "hazardous
substance", "pollutant", "contaminant" or "waste material" as such terms are
defined in the Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C. ss. 9601 et seq., or other applicable U.S. federal, state or
local Law or any foreign Law ("Hazardous Substance"), in excess of a reportable
quantity on any Real Property, (d) each of the Company and the Company
Subsidiaries has obtained and is in compliance with the conditions of all
Permits required under any applicable Environmental Law, (e) none of the Company
or any Company Subsidiary has received, within the last three years, any written
notice, request for information, complaint or administrative or judicial order
and there is no action, suit or proceeding pending, or to the Knowledge of
Seller, there is no action, suit or proceeding threatened or investigation
pending or threatened, by, in or before any Governmental Entity, alleging or
asserting liability or potential liability against the Company or any Company
Subsidiary in connection with any Environmental Law and (f) to the Knowledge of
Seller, there are no past or present conditions or circumstances at, or arising
out of, the operations of the Company or any of its Subsidiaries, including, but
not limited to, on-site or off-site disposal or Release of Hazardous Substance
that are reasonably likely to result in (i) liabilities or obligations for any
clean-up, remediation or corrective action under any Environmental Law, (ii)
claims arising under any Environmental Law for personal injury, property damage
or damage to natural resources or (iii) fines or penalties arising under any
Environmental Law.
Section 3.16 Compliance with Laws and Standards. (a) Each of the
Company and the Company Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Entity (each, a "Permit")
that are necessary for it to carry on its business as it is now being conducted
and no suspension or cancellation of any of the foregoing is pending or, to the
Knowledge of Seller, threatened and (b) neither the Company nor any of the
Company Subsidiaries is in violation of any applicable Law, except, in the case
of both (a) and (b), for such failures to possess, suspensions, cancellations
and violations that would not have, individually or in the aggregate, a Company
Material Adverse Effect or a material adverse effect on the entity to which the
failure to possess, violation, suspension or cancellation relates, and (c) each
of the Company and the Company Subsidiaries comply, in all material respects,
with (i) CASRO standards in their respective U.S. activities and (ii) ESOMAR
standards in their respective European activities.
Section 3.17 Employee Benefit Plans.
(a) Section 3.17(a) of the Seller Disclosure Schedule contains a true
and complete list of all Plans. The Company has heretofore made available to
Purchaser, as applicable, with respect to each Plan, a true and complete copy of
(i) each written Plan and a description of material oral Plans and any
amendments thereto, (ii) each agreement creating or modifying any related trust
or other funding vehicle, (iii) the last two IRS Form 5500's and schedules
thereto, (iv) each summary plan description, (v) the most recent actuarial
report required under ERISA or other applicable Law, and (vi) all written
correspondence with the IRS, U.S. Department of Labor and PBGC or, with respect
to Plans maintained in a jurisdiction outside the United States, other
applicable Governmental Entity concerning any material controversy.
(b) No liability under Title IV or Section 302 of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been satisfied in
full.
(c) The PBGC has not instituted proceedings to terminate any Title IV
Plan and no condition exists that presents a material risk that such proceedings
will be instituted.
(d) No Title IV Plan is a "multi-employer pension plan," as defined in
Section 3(37) of ERISA, nor is any Title IV Plan a plan described in Section
4063(a) of ERISA. Neither the Company nor any Company Subsidiary has within the
past six years incurred or experienced an event which could or has given rise to
a withdrawal liability under Section 4201, 4063, 4064, 4071 or 4243 of ERISA or
any actual or contingent liability under Section 4204 of ERISA.
(e) To the Knowledge of Seller, each Plan has been operated and
administered in all material respects in accordance with its terms, collective
bargaining agreements and applicable Law, including ERISA and the Code,
including, to the extent required by the terms of the Plan or applicable Law,
the making of timely contributions.
(f) Each Plan intended to be "qualified" within the meaning of Section
401(a) of the Code has received a favorable determination letter from the IRS
with respect to such qualification and, with respect to any Plan maintained
outside of the United States that provides for pension benefits and that is
intended to be qualified under the Law of the relevant jurisdiction, such Plan
has obtained formal approval or qualification by and/or due registration with
the appropriate tax authorities in each jurisdiction in which such qualification
is required by Law or is substantially uniformly done in practice, or the time
for obtaining such approval has not expired, and, to the Knowledge of Seller, no
event or circumstance exists that has or is likely to materially adversely
affect such qualification or exemption.
(g) With respect to any Title IV Plan, (i) there has been no failure to
make any contribution, pay any amount due or meet the minimum funding standards
as required by Section 412 of the Code, Section 302 of ERISA or the terms of any
such Plan, (ii) no Title IV Plan has incurred an accumulated funding deficiency
within the meaning of Section 412 of the Code whether or not waived, (iii) the
assets of the Company and each Company Subsidiary are not subject to any lien
imposed under Code Section 412(n) or ERISA Section 302 by reason of a failure of
the Company, any Company Subsidiary, or any ERISA Affiliate to make timely
installments or other payments required under Code Section 412 and (iv) there
has been no "reportable event," as defined in Section 4043(6) of ERISA, other
than a reportable event for which notice has been waived.
(h) Except as would not, individually or in the aggregate, be
reasonably expected to result in any material liability for the Company or any
Company Subsidiary, there are no actual, pending or threatened claims, actions
or lawsuits, other than routine claims for benefits in the ordinary course,
asserted or instituted against (i) any Plan or its assets, (ii) any ERISA
Affiliate with respect to any Title IV Plan, or (iii) any fiduciary with respect
to any Plan for which the Company, any Company Subsidiary, or any ERISA
Affiliate may be directly or indirectly liable, through indemnification
obligations or otherwise.
(i) Within the last six years, neither the Company, any Company
Subsidiary, nor any ERISA Affiliate has transferred any assets or liabilities of
a Title IV Plan which would reasonably be expected to give rise to any liability
under Section 4212(c) or Section 4069 of ERISA.
(j) Neither the Company, any Company Subsidiary, nor any ERISA
Affiliate has engaged, directly or indirectly, in a non-exempt prohibited
transaction (as defined in Section 4975 of the Code or Section 406 of ERISA) in
connection with any Plan which would reasonably be expected to have a Company
Material Adverse Effect.
(k) During the last two years through the date hereof, there have been
no amendments to any Plan which require security pursuant to Section 401(a)(29)
of the Code. Since the Company Balance Sheet Date, there have been no amendments
to any Plan and no written interpretations or announcements (whether or not
written) by the Company, any Company Subsidiary or any ERISA Affiliate relating
to any Plan, which resulted in or would reasonably be expected to result in a
material increase in the accrued or promised benefits of any employees of the
Company or any Company Subsidiary or any material increase in the level of
expense incurred in respect thereof.
(l) Each Plan that provides welfare benefits has been operated in
compliance with all requirements of (i) Sections 601 through 609 of ERISA, (ii)
Section 162(i)(2) and (k) of the Code and regulations thereunder (prior to 1989)
and (iii) Section 4980B of the Code and regulations thereunder after 1988,
relating to the continuation of coverage under certain circumstances in which
coverage would otherwise cease, except for any instances of non-compliance that
would not, individually or in the aggregate, be reasonably expected to result in
a material liability to the Company or any Company Subsidiary. Neither the
Company, any Company Subsidiary, nor any ERISA Affiliate has contributed to a
nonconforming group health plan (as defined under Code Section 5000(c)) and no
ERISA Affiliate has incurred a tax under Section 5000(a) of the Code which would
reasonably be expected to result in a material liability of the Company, any
Company Subsidiary, or any ERISA Affiliate. The Company and each Company
Subsidiary has complied in all material respects with the requirements of the
Health Insurance Portability and Accountability Act of 1996 ("HIPAA") with
respect to each Plan that provides welfare benefits. The Seller does not
maintain any plan which is an "employee welfare benefit plan" (as such term is
defined under Section 3(1) of ERISA) that has provided any "disqualified
benefit" (as such term is defined in Section 4976(b) of the Code) with respect
to which an excise tax could be imposed under Section 4976 that would be
reasonably likely to result in a Company Material Adverse Effect. Except for the
Plans listed in Section 3.17(a) of the Disclosure Schedule, the Company, any
Company Subsidiary or any ERISA Affiliate does not and has not maintained,
sponsored or provided post retirement medical benefits, post retirement death
benefits or other post retirement welfare benefits except as required by Section
4980B of the Code and at the sole expense of the participant or the beneficiary
of the participant.
(m) The Company, each Company Subsidiary, and its ERISA Affiliates have
paid when due all applicable premiums on any insurance contract funding a Plan,
for coverage provided through the Closing Date except for instances of late
payment which would not reasonably be expected to result in loss of coverage or
a material liability to the Company or any Company Subsidiary.
(n) The execution of this Agreement and the consummation of the
transactions contemplated hereby, do not constitute a triggering event under any
Plan, policy, arrangement, statement, commitment or agreement, whether or not
legally enforceable, which (either alone or upon the occurrence of any
additional or subsequent event) will result in any obligation of the Company,
any Company Subsidiary or any ERISA Affiliate to make any payment (whether of
severance pay, including and not limited to, salary, related vacation pay,
pension pay and other similar payments and costs, or otherwise) or to
accelerate, vest or increase the amount of benefits payable to any employee or
former employee or director of the Company, any Company Subsidiary or any ERISA
Affiliates. Other than pursuant to a Plan disclosed in Section 3.17(a) of the
Seller Disclosure Schedule, no employee of the Company or its Subsidiaries is
entitled to severance benefits in excess of $100,000 upon a termination of
employment. For the avoidance of doubt, Seller shall satisfy any and all
obligations to Xxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxx (and neither Purchaser nor
the Company or any Company Subsidiary shall have any obligation) under the Bonus
Pool Agreement, dated February 2, 2003, by and between Seller, Xxxxxxx X. Xxxxxx
and Xxxxxxx X. Xxxxxx.
(o) No amounts paid or payable by the Company or any Company Subsidiary
in connection with the transactions contemplated by this Agreement will fail to
be deductible for federal income tax purposes by reason of Section 280G of the
Code or result in the imposition of any excise tax under Section 4999 of the
Code.
(p) Except for the NFO Research Inc. Pension Plan, as of the Closing
Date, no Title IV Plan that is maintained by the Company or any Company
Subsidiary has any "Unfunded Pension Liability." For purposes of this Agreement,
Unfunded Pension Liability shall mean, as of any determination date, the amount,
if any, by which the present value of all benefit liabilities (as that term is
defined in Section 4001(a)(16) of ERISA) of a plan subject to Title IV of ERISA
exceeds the fair market value of all assets of such plan, all determined using
the actuarial assumptions that would be used by the PBGC in the event of a
termination of the plan on such determination date.
(q) No Plan that is maintained by the Company or any Company Subsidiary
is designed in whole or in part to hold equity securities of the Company, any
Company Subsidiary or any ERISA Affiliate ("Employer Stock"), and Employer Stock
does not comprise a significant portion of the assets used to fund any Plan
maintained by the Company or any Company Subsidiary.
(r) Other than with respect to (i) The Interpublic Group of Companies
Health and Welfare Trust, (ii) the Executive Deferred Compensation Plan, (iii)
split dollar life insurance policies for certain executives, (iv) certain
contractual retirement benefits payable to Xxxxxx X. Xxxxxxxx, (v) Plans
intended to be "qualified" within the meaning of Section 401(a) of the Code and
(vi) insurance policies and other contracts with respect to Plans that are
welfare benefit plans, no assets have been set aside in a trust, account or
other similar vehicle or otherwise segregated from the general assets of the
Company or the Company Subsidiaries in order to provide for the payment of
benefits under any Plans.
(s) As of the Company Balance Sheet Date, there is no material unfunded
liability that is not reflected on the Company Financial Statements in
accordance with U.S. GAAP with respect to any Plan (including any Plan
maintained in a jurisdiction outside the United States) that is a "plan
deferring the receipt of compensation" within the meaning of Section 404(a) of
the Code and the U.S. Treasury Regulations promulgated thereunder (including
without limitation U.S. Treasury Regulation Section 1.404(a)-1(a)(2)
thereunder), it being understood that such term does not, or shall be deemed not
to, include any individual agreement deferring the receipt of compensation that
is not part of a series of substantially similar individual agreements, any
equity-based incentive plan or any Plan providing welfare benefits. For the
avoidance of doubt, this representation shall not be construed as any assurance
concerning the funded status of the NFO Research Inc. Pension Plan and the
Executive Deferred Compensation Plan.
(t) As of the Company Balance Sheet Date, with respect to each funded
and unfunded Plan providing Retirement Benefits and maintained in a jurisdiction
outside the United States (other than any Plan that is a statutory pension plan
or an insured plan), there is no unfunded current liability that is not
reflected on the Company Financial Statements in accordance with U.S. GAAP.
(u) Except to the extent expressly contemplated by Section 5.6(h) of
this Agreement, to the Knowledge of Seller, neither the Company nor any Company
Subsidiary is, or will be, subject to any material liability under the terms of
or in connection with any Plan maintained by Seller or any of its Affiliates
under which payments or benefits are based on the value of the stock or other
securities issued by Seller or which obligates the Company or any Company
Subsidiary to deliver or otherwise transfer stock or other securities issued by
Seller.
(v) The Company and each Company Subsidiary have complied in all
material respects with the legal requirements applicable to being the
transferee, during the twelve months preceding the date hereof, of an
undertaking or business (or part of a business or undertaking) as contemplated
by the Council Directive 77/187/EEC or under any agreement for such a transfer.
(w) To the Knowledge of Seller, no defined contribution Plan maintained in a
jurisdiction outside the United States provides or is liable to provide any
benefits other than defined contribution benefits that would result in a
material current liability as of the Company Balance Sheet Date that is not
reflected on the Company Financial Statements in accordance with U.S. GAAP.
Section 3.18 Tax Matters.
(a) The Company, each Company Subsidiary and any consolidated group for
Tax purposes of which the Company and/or any Company Subsidiary is or has been a
member after April 20, 2000 have timely filed (or there have been filed on their
behalf) with appropriate taxing authorities all Tax Returns required to be filed
by them on or prior to the date hereof (or if this representation is made as of
Closing, on or prior to the Closing Date) and such Tax Returns are complete and
correct in all material respects.
(b) There are no Encumbrances for Taxes upon any property or assets of
the Company or any Company Subsidiary, except for Encumbrances for Taxes not yet
due.
(c) No federal, state, local or foreign audits, examinations,
investigations or other administrative proceedings (such audits, examinations,
investigations and other administrative proceedings referred to collectively as
"Audits") or court proceedings are presently pending or to the Knowledge of
Seller, threatened with regard to any Taxes or Tax Returns filed by or on behalf
of the Company or any Company Subsidiary.
(d) There are no requests, agreements, consents or waivers to extend
the statutory period of limitations applicable to the assessment of any Taxes or
deficiencies against the Company or any Company Subsidiary which are currently
in effect.
(e) Neither the Company nor any of the Company Subsidiaries is a party
to any tax sharing, tax indemnity or other similar agreement or arrangement with
any Person. Neither the Company nor any Company Subsidiary has any liability or
potential liability to another party under any tax sharing, tax indemnification
or other similar agreement or arrangement.
(f) The Company, each Company Subsidiary and any consolidated group of
which the Company and/or any Company Subsidiary is or has been a member after
April 20, 2000 have paid all Taxes shown on the Tax Returns or otherwise
required by Law.
(g) The Company has provided adequate accruals for itself and its
consolidated subsidiaries (without taking into account any reserve for deferred
Taxes) in its most recent Company Financial Statements for any Taxes that had
not yet been paid as of the date of such Company Financial Statements, whether
or not shown as due on the Tax Returns. Except for Taxes incurred in the
ordinary course of business, neither the Company nor any Company Subsidiary has
any liability for unpaid Taxes accruing after the date of the Company's most
recent Company Financial Statements.
(h) Neither the Company nor any Company Subsidiary has been or will be
required by virtue of the sale of the Company Shares to include any adjustment
in income for any fiscal year or other period pursuant to Section 481 or Section
263A of the Code or any comparable provision of state, local or foreign Tax Law
as a result of any events, transactions or accounting methods employed prior to
the sale of the Company Shares.
(i) The Company is not a "United States real property holding
corporation" within the meaning of Section 897 of the Code.
(j) Neither the Company nor any Company Subsidiary has participated in
any "reportable transaction" within the meaning of U.S. Treasury Regulation
Section 1.6011-4, except where the failure to report such transaction in
accordance with such regulation would not be reasonably expected to have a
Company Material Adverse Effect.
Section 3.19 Intellectual Property.
(a) The Company or a Company Subsidiary owns, or is licensed to use or
otherwise possesses legally enforceable rights in, the Company Intellectual
Property free and clear of all Encumbrances other than Permitted Encumbrances
and, with respect to Company Intellectual Property licensed to the Company or
any Company Subsidiary, other than Encumbrances that are inherent as part of the
relevant license agreements or understandings that permit such use (provided
that such agreements have been made available to Purchaser prior to the date
hereof) which do not adversely affect the Company's or such Company Subsidiary's
use as presently used and will not affect their use after the Closing if they
are used in the same way. There are no oppositions, protests, cancellations,
invalidity proceedings, interferences, re-examination proceedings, reissue
proceedings, complaints, suits or hearings with any regulatory or judicial body
or, with respect to any issued Patents owned by the Company and/or any Company
Subsidiary, any actions in pending prosecution of patent applications owned by
the Company or any Company Subsidiary that could negatively impact the scope,
validity, or enforceability of such issued Patents in such a manner as would
result in a Company Material Adverse Effect or a material adverse effect on the
Company or Company Subsidiary involved (collectively, "Adverse Claims"), pending
with respect to any Company Intellectual Property owned by the Company or any
Company Subsidiary and, to the Knowledge of Seller, there are no Adverse Claims
pending against the Company or any Company Subsidiary with respect to any
Company Intellectual Property not owned by the Company or any Company
Subsidiary, or threatened against the Company or any Company Subsidiary with
respect to any Company Intellectual Property. The use by the Company or any of
the Company Subsidiaries of the Company Intellectual Property does not infringe
any Intellectual Property rights of any third party, and neither the Company nor
any Company Subsidiary has received any written notice from any third party
challenging the right of the Company or any Company Subsidiary to use any of the
Company Intellectual Property. No breach or default (or event which with notice
or lapse of time or both would result in an event of default) by the Company or
any Company Subsidiary exists or has occurred, but not been cured, under any
License and the consummation of the transactions contemplated by this Agreement
will not violate or conflict with or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) or result in a
forfeiture under, or constitute a basis for termination of, any such License.
The Company and the Company Subsidiaries have used reasonable efforts to
reasonably protect and maintain their respective rights in the Company
Intellectual Property, and there have been no acts or omissions by either the
Company or any of its Subsidiaries, the result of which would be to compromise
the rights of either the Company or any of its Subsidiaries to apply for or
enforce appropriate legal protection of such Company Intellectual Property,
except for such failures, acts, omissions and compromises that, individually or
in the aggregate, would not be reasonably expected to have a Company Material
Adverse Effect or a material adverse effect on the Company or Company Subsidiary
involved. To the Knowledge of Seller, no Person is infringing, violating or
misappropriating any of the Company Intellectual Property. Set forth on Section
3.19(a) of the Seller Disclosure Schedule is a list of all Trademarks, Patents
and material Computer Software (excluding any shrink-wrap licenses) owned or
used by the Company and/or any Company Subsidiary, except (when made at Closing)
for such changes occurring after the date hereof in the ordinary course of
business consistent with past practice to the extent not inconsistent with
Section 5.1.
(b) There are no material malfunctions or design failures with respect
to the Computer Software owned or used by the Company and the Company
Subsidiaries and related items of systems hardware (the "Hardware"), and the
Hardware has been satisfactorily maintained and supported. The Hardware and the
Computer Software owned or used by the Company and the Company Subsidiaries have
adequate capability and capacity for the current requirements of the operation
of the respective businesses of the Company and each of the Company Subsidiaries
for the processing and other functions required to be performed by such
entities. The Company and each of the Company Subsidiaries has reasonably
adequate procedures to protect internal and external security of the Hardware,
Computer Software owned or used by the Company and the Company Subsidiaries, and
the data and databases of their respective businesses, including, without
limitation, procedures for preventing unauthorized access, preventing the
introduction of a computer virus, and taking and storing on-site and off-site
back-up copies of the Computer Software owned or used by the Company and the
Company Subsidiaries and data. Disaster recovery plans are in effect and are
considered reasonably adequate to ensure that the Hardware, the Computer
Software owned or used by the Company and the Company Subsidiaries, and any data
relating to their respective businesses can be replaced or substituted without
material disruption to their respective businesses. The billing information
generated by the Computer Software owned or used by the Company and the Company
Subsidiaries, and related Hardware is accurate, and the Computer Software owned
or used by the Company and the Company Subsidiaries and the Hardware are
otherwise reasonably adequate for the conduct of each of the Company's and the
Company Subsidiaries' respective businesses as currently conducted. All third
party software residing on each of the Company's and the Company Subsidiaries'
computer systems is properly licensed, and neither the Company or any of the
Company Subsidiaries has made any unlicensed copies of such software except
those permitted for archival and back-up purposes. All Computer Software owned
or used by the Company and the Company Subsidiaries will continue to be
available for use by each and any of them after the Closing in the same manner
as used prior to Closing, except for the PeopleSoft license.
Section 3.20 Labor Matters.
(a) Except as would not have, individually or in the aggregate, a
Company Material Adverse Effect or a material adverse effect on a Major
Subsidiary:
(i) there is no labor strike, dispute, slowdown, stoppage or
lockout actually pending, or to the Knowledge of Seller, threatened against the
Company or any Subsidiary of the Company;
(ii) there is no unfair labor practice charge or complaint against
the Company or any Subsidiary of the Company pending or, to the Knowledge of
Seller, threatened before the National Labor Relations Board, or the equivalent
body in any jurisdiction in which the Company or any Company Subsidiary conducts
business.
(b) Neither the Company nor any Subsidiary of the Company is a party to
or bound by any collective bargaining, recognition, procedural or other
agreement with any labor organization or trade union except (when made at
Closing) for such agreements excepted from Section 3.12(a)(iv);
(c) No labor union has been certified by the National Labor Relations
Board or any equivalent body in any jurisdiction in which the Company or any
Company Subsidiary conducts business, as bargaining agent for any of the
employees of the Company or any Subsidiary of the Company.
(d) Since the enactment of the WARN Act, neither the Company nor any
Subsidiary of the Company has effectuated a "plant closing" (as defined in the
WARN Act) affecting any site of employment or one or more facilities or
operating units within any site of employment or facility of the Company or any
Subsidiary of the Company, and there has not occurred a "mass layoff" (as
defined in the WARN Act) affecting any site of employment or facility of the
Company or any Subsidiary of the Company.
Section 3.21 Absence of Questionable Payments. Except as would not
violate any applicable Law:
(a) none of Seller, the Company, any of their respective Subsidiaries,
or any director, officer, agent, employee or any other Person acting on behalf
of Seller, the Company or any of their respective Subsidiaries has, directly or
indirectly, given, made or agreed to give or make any commission, payment,
gratuity, gift, political contribution or similar benefit to a customer,
supplier, or employee or official of any governmental body or agency or any
other Person who is or may be in a position to help or hinder Seller, the
Company or any Company Subsidiary, or assist Seller, the Company or any Company
Subsidiary, in connection with any proposed transaction; and
(b) none of Seller, the Company or any Company Subsidiary, director,
officer, agent, employee, or other Person acting on behalf of Seller, the
Company or any Company Subsidiary has (i) used any corporate or other funds for
contributions, payments, gifts or entertainment, or made any expenditures
relating to political activity to, or on behalf of, employees of any
governmental body or agency or others, or (ii) accepted or received any
contributions, payments, gifts or expenditures.
Section 3.22 Insight Express, L.L.C. (i) As of the date hereof, Section
3.22 of the Seller Disclosure Schedule sets forth a complete list of the
agreements and other documents related to the Company's ownership and investment
in Insight Express, L.L.C. ("IX, LLC") (collectively, the "Insight Documents");
(ii) as of the date hereof, true, correct and complete copies of the Insight
Documents have been provided to Purchaser; (iii) as of the date hereof, Section
3.22 of the Seller Disclosure Schedule contains a list compiled by IX, LLC of
all outstanding options relating to IX Holdings Co, Inc., including the option
holder, exercise price and expiration date of each option; (iv) the Insight
Documents have not been modified and are in full force and effect; (v) neither
IX, Inc. nor, as of the date hereof and to the Knowledge of Seller, any other
party to the Insight Documents is in default of its obligations thereunder; (vi)
the mergers (specifically, the merger of IX Holding Co., Inc. with and into IX,
Inc., to be followed by the merger of Xxxxxxxxx 1999 Equity Holdings Corporation
with and into the surviving corporation of such initial merger hereinafter the
"Mergers") referred to in Section 8 of the Master Investors Rights Agreement,
dated October 18, 1999 ("Master Investors Rights Agreement") by and among IX,
Inc., IX Holding Co., Inc., IX, LLC and the other persons named therein, have
not taken place; (vii) as of the date hereof, if the Mergers were to occur in
connection with an initial public offering or a Company Sale (as defined in the
Master Investor Rights Agreement), the pro forma fully diluted ownership
interest of the Company in the surviving corporation of the Mergers would be
fifty percent (50%); (viii) IX, LLC has not assigned, and has not agreed to
assign, to any third party its put purchase obligation, as described in Section
6 of the Master Investors Rights Agreement; (ix) as of the date hereof, IX, Inc.
currently has two designees on the three member Board of Representatives of IX,
LLC; (x) as of the date hereof, no claim for indemnity under the Indemnification
Agreement, included in the Insight Documents, has been made, is pending or, to
the Knowledge of Seller, is threatened and no claim has been made or, to the
Knowledge of Seller, threatened by Xxxxxx Digital which could reasonably be
expected to lead to a claim of indemnity under such agreement; and (xi) IX, Inc.
has not exercised its right to call the equity of IX, LLC that is not owned by
the Company or any of the Company Subsidiaries (as described in Section 7 of the
Master Investor Rights Agreement or otherwise).
Section 3.23 Privacy and Panel Operations.
(a) (i) The Company and the Company Subsidiaries have established
reasonable technological and procedural measures to protect data collected from
visitors to all Internet websites operated by any of them ("Websites"), users of
their products and services, data subjects and panel members against loss,
theft, unauthorized access or disclosure; (ii) except as permitted by applicable
Law or the CASRO and ESOMAR standards, the Company and the Company Subsidiaries
do not knowingly collect personally identifiable information from or target
children under the age of 13 in connection with their respective businesses;
(iii) all data relating to children under the age of 13 is collected by the
Company and the Company Subsidiaries in accordance with any applicable COPPA and
comparable Laws in the jurisdictions in which the Company and the Company
Subsidiaries conduct business (collectively, "COPPA Laws"); (iv) other than in a
manner both consistent with industry practice and applicable Law, neither the
Company nor any Company Subsidiary sells, rents or otherwise makes available to
third parties any personally identifiable data submitted by visitors of the
Websites, users of their products and services, data subjects or panel members;
(v) the Company and each Company Subsidiary take reasonable measures to protect
and maintain the confidential nature of the information provided by Website
visitors, users of their products, data subjects and panel members and comply
with all applicable privacy laws and regulations regarding the disclosure and
use of personal data, including any applicable provisions of HIPAA, GLB and EU
Data Privacy Act; (vi) other than restrictions of applicable Law or pursuant to
the CASRO and ESOMAR standards, the Company and each Company Subsidiary is not
restricted in their respective use and/or distribution of personal data (as
necessary for the conduct of their current business) collected in connection
with their respective businesses; and (vii) none of Seller, the Company or any
Company Subsidiary is a party to any contract, agreement or arrangement or
subject to any obligation that, following Closing, would prevent the Company and
the Company Subsidiaries from using the personal data each of them currently
possesses in a manner that is both (A) consistent with applicable Law and
applicable CASRO and ESOMAR standards regarding the disclosure and use of data
and (B) consistent, in all material respects, with its current practices.
(b) The panels of individuals willing to participate in surveys or
other research conducted by the Company or the Company Subsidiaries (the
"Panels") are proprietary to the Company and the Company Subsidiaries and the
data of the panel members is held on secure databases within the control of the
Company or the Company Subsidiaries, and which are regularly cleaned, maintained
and augmented. There are no claims, suits, proceedings or other actions pending
or, to the Knowledge of Seller, threatened, by any individual with respect to
his or her privacy or participation in any Panel survey conducted by the Company
or any of the Company Subsidiaries. All applicable know-how for the maintenance
and operation of the Panels is properly documented and recorded, and the
operations are run by suitably qualified and experienced personnel and run on
computer and other information technology equipment that is in good working
order, functions in accordance with its specification and has been and is being
properly and regularly maintained and replaced. All survey work involving Panels
is conducted in accordance with COPPA Laws. As of April 30, 2003, the statements
in Section 3.23(b) of the Seller Disclosure Schedule are accurate in all
material respects. Since April 30, 2003 there has been no material adverse
change with respect to the statements in Section 3.23(b) of the Seller
Disclosure Schedule.
Section 3.24 No Interest. Other than with respect to the Purchaser
Shares as contemplated hereby or by the Relationship Agreement: neither Seller
nor any Seller Subsidiary holds any Interest as of the date hereof, and except
as notified to Purchaser in writing, after the date hereof neither Seller nor
any Seller Subsidiary or, to the Knowledge of Seller, any Seller Minority
Subsidiary holds any Interest.
Section 3.25 Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any brokers'
or finder's fee or other commission or similar fee in connection with the
transactions contemplated by the Transaction Documents and the AISA Share
Transfer Agreement, except for Xxxxxxx, Xxxxx & Co., whose fees and expenses
will be paid by Seller in accordance with Seller's agreement with such firm.
Section 3.26 Reorganizations. As of the Closing, the Company and the
Company Subsidiaries shall have used their reasonable best efforts to duly
consummate the reorganizations described on Schedule 3.26 of the Seller
Disclosure Schedule and all actions in connection therewith shall have been
taken in accordance with applicable Law and without giving rise to any right of
any third party (including any creditor or insolvency practitioner) to unwind,
dispute or seek damages in connection with such reorganizations.
Purchaser acknowledges that, except for the representations and
warranties contained in this Article III or any certificate delivered at Closing
by Seller pursuant to Section 6.2(c), neither Seller nor any other Person acting
on behalf of Seller, makes any representation or warranty, express or implied,
including with respect to the due diligence materials and discussions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as specifically disclosed in or as readily inferable from the
Purchaser Financial Statements and/or as set forth in a written press release or
written, publicly available report to its shareholders (including the Annual
Report and Accounts 2002) that, in each case, was published on or after January
1, 2002 and before the date hereof, Purchaser represents and warrants to Seller
that all of the statements contained in this Article IV are true as of the date
of this Agreement (or, if made as of a specified date, as of such date). The
inclusion of any information in any document delivered by Purchaser pursuant to
this Agreement shall not be deemed to be an admission or evidence of the
materiality of such item, nor shall it establish a standard of materiality for
any purpose whatsoever.
Section 4.1 Organization. Purchaser (a) is a corporation or other legal
entity duly organized, validly existing and, if applicable, in good standing
under the laws of its jurisdiction of organization; (b) has all requisite
corporate or other legal entity power and authority to carry on its business as
it is now being conducted and to own the properties and assets it now owns; and
(c) is duly qualified or licensed to do business in every jurisdiction in which
such qualification is required, in each case except for such failures that would
not, individually or in the aggregate, either (i) have (A) a Purchaser Material
Adverse Effect or (B) a material adverse effect on the ability of Purchaser to
consummate the Closing or perform its obligations under this Agreement or (ii)
impede in any material respect or materially delay the consummation of the
Closing. Purchaser has heretofore delivered to Seller (or to its attorneys)
true, complete and correct copies of its Memorandum and Articles of Association
as presently in effect.
Section 4.2 Authorization; Validity of Agreement.
(a) Purchaser has the requisite corporate or other legal entity power
and authority to execute, deliver and (subject, in relation to Closing and
borrowing under the Loan Agreement only, to the Purchaser Shareholder Approval
and Admission) perform the Transaction Documents and the AISA Share Transfer
Agreement and to consummate the Closing. The board of directors of Purchaser (or
a duly authorized committee thereof) has by resolution (i) approved the
transactions contemplated by this Agreement, the Loan Agreement and the
Placement Agreement; (ii) determined that such transactions are in the best
interests of Purchaser; (iii) determined that it will propose, for the approval
of Purchaser's shareholders, the transactions contemplated by this Agreement and
the Loan Agreement and, subject to Purchaser's directors' fiduciary duties,
recommend that such shareholders approve such transactions; and (iv) approved
the issuance of a public announcement in relation to such transactions. The
execution, delivery and (subject, in relation to Closing and borrowing under the
Loan Agreement only, to the Purchaser Shareholder Approval and Admission)
performance by Purchaser of the Transaction Documents, the AISA Share Transfer
Agreement, the Loan Agreement, Placement Agreement, the issuance of the
Purchaser Shares, the consummation by Purchaser of the Closing and consummation
of the transactions contemplated by the Loan Agreement and the Placement
Agreement have been (or, in the case of the AISA Share Transfer Agreement, at
Closing will have been) duly approved by resolution of the board of directors of
Purchaser (or by a duly authorized committee thereof) and no other corporate
action on the part of Purchaser is (or, in the case of the AISA Share Transfer
Agreement, will be at Closing) necessary to authorize the execution, delivery
and (subject, in relation to Closing and borrowing under the Loan Agreement
only, to the Purchaser Shareholder Approval and Admission) performance of the
Transaction Documents, the AISA Share Transfer Agreement, the Loan Agreement,
the Placement Agreement, the issuance of the Purchaser Shares, the consummation
by Purchaser of the Closing and consummation of the transactions contemplated by
the Loan Agreement and the Placement Agreement.
(b) Each of the Transaction Documents has been, and the AISA Share
Transfer Agreement, at Closing, will have been, duly executed and delivered by
Purchaser, and, assuming due and valid authorization, execution and delivery
thereof by Seller, is a valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms.
Section 4.3 Consents and Approvals; No Violations. Except for the
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, state securities or blue sky laws,
the HSR Act and applicable non-U.S. laws with respect to foreign investment,
antitrust and competition, Admission, the Purchaser Shareholder Approval and the
rules and regulations of the London Stock Exchange and the UKLA, none of the
execution, delivery or performance of the Transaction Documents, the AISA Share
Transfer Agreement, the Loan Agreement and the Placement Agreement by Purchaser
or the consummation by Purchaser of the Closing, the transactions contemplated
by the Loan Agreement or the transactions contemplated by the Placement
Agreement will (a) conflict with or result in any breach of any provision of any
constitutional document of Purchaser, (b) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity, (c) result in a
violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any right of termination, cancellation,
modification or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which Purchaser is a party or by which it or
any of its properties or assets may be bound, (d) violate any Law applicable to
Purchaser, any of its Subsidiaries or any of their respective properties or
assets or (e) result in the creation or imposition of any Encumbrance upon
Purchaser, excluding from the foregoing clauses (b), (c), (d) and (e) such
violations, breaches, defaults and Encumbrances which would not, individually or
in the aggregate, either (i) have a Purchaser Material Adverse Effect or have a
material adverse effect on Purchaser's ability to consummate the Closing or
perform its obligations under any of the Transaction Documents, the AISA Share
Transfer Agreement, the Loan Agreement or the Placement Agreement or (ii) impede
in any material respect or materially delay the consummation of the Closing.
Section 4.4 Acquisition of Company Shares, AISA Share and Intercompany
Loan for Investment; Ability to Evaluate and Bear Risk.
(a) Purchaser is acquiring the Company Shares, the AISA Share and the
Intercompany Loan (and, if there is a Carve-out Event in respect of NFO
Infratest OY, the Finnish Shares) for investment and not with a view toward, or
for sale in connection with, any distribution thereof, nor with any present
intention of distributing or selling the Company Shares, the AISA Share or the
Intercompany Loan (or, if applicable, the Finnish Shares). Purchaser agrees that
the Company Shares, the AISA Share and the Intercompany Loan (and, if there is a
Carve-out Event in respect of NFO Infratest OY, the Finnish Shares) may not be
sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed
of without registration under the Securities Act and qualification under any
applicable state securities laws, except pursuant to an exemption from such
registration under such Act and qualification under such laws.
(b) Purchaser is an "accredited investor" within the meaning of
Regulation D under the Securities Act and is able to bear the economic risk of
holding the Company Shares, the AISA Share and the Intercompany Loan for an
indefinite period, and has knowledge and experience in financial and business
matters such that it is capable of evaluating the risks of the investment in
Company Shares, the AISA Share and the Intercompany Loan.
Section 4.5 Availability of Funds. (a) Purchaser will, subject to
satisfaction of the condition set forth in Section 6.2(d), have sufficient
immediately available U.S. Dollar cash funds at the Closing to pay the Estimated
Cash Purchase Price and to consummate the Closing. Purchaser has provided Seller
(or its attorneys) with true and complete copies of the Placement Agreement and
the facilities agreement, dated May 13, 2003, between, amongst others, Barclays
Capital, Lloyds TSB Bank plc, Societe Generale, The Royal Bank of Scotland plc
and Purchaser (the "Loan Agreement"). To the Knowledge of Purchaser, the lenders
under the Loan Agreement (the "Lenders") are satisfied with the terms and
conditions of this Agreement.
(b) Each of the Loan Agreement and the Placement Agreement (i) has been
duly executed and delivered by Purchaser and is, assuming due and valid
authorization, execution and delivery thereof by the parties thereto other than
Purchaser, a valid and binding agreement, enforceable (subject to the
availability of discretionary equitable remedies) against the parties thereto in
accordance with its terms; (ii) is, to the Knowledge of Purchaser, in full force
and effect, subject to termination after the date hereof in accordance with its
terms; (iii) has not been amended or rescinded (and, to the Knowledge of
Purchaser, there have been no waivers thereunder) in a way which would adversely
affect the satisfaction of any of the conditions to Closing set forth in Article
VI or Purchaser's ability to pay the Estimated Cash Purchase Price and
consummate the Closing.
(c) As of the date hereof there exists no Major Breach (as such term is
defined in the Loan Agreement) or an event which constitutes a Major Default (as
is set out in paragraphs (a), (d) and (e) of such definition in the Loan
Agreement) and the Purchaser shall cause there to be no such Major Breach or
Major Default prior to the satisfaction of the condition set forth in Section
6.2(d). To the Knowledge of Purchaser, there are no conditions, events, facts,
activities, practices, incidents, actions or omissions that could be reasonably
anticipated to prevent a Major Representation (as such term is defined in the
Loan Agreement) from being accurate in all material respects or the conditions
set forth in paragraphs 1(g), 2(a), 2(c), 2(d) (in respect of the Dutch share
pledge), 2(e), 2(f), 3(a), 3(b), 3(c), 3(d), 3(e), 3(f), 3(g), 3(h), 4(a), 4(b),
4(c), 4(d), 4(e), 5(c)(iv), 5(d), 5(e), 5(f) and 5(g) of Part 1 of Schedule 2 of
the Loan Agreement (the "Unsatisfied Conditions") from being satisfied.
Compliance with the representations and undertakings set forth in this Section
4.5(c) will not prevent the satisfaction of any of the conditions to the Closing
set forth in Article VI or adversely affect Purchaser's ability to pay the
Estimated Cash Purchase Price and consummate the Closing.
(d) All of the conditions set forth in Part 1 of Schedule 2 of the Loan
Agreement have been satisfied (other than the Unsatisfied Conditions).
Section 4.6 Litigation. Each of Purchaser and its Subsidiaries is not a
party to, or the subject of or, to the Knowledge of Purchaser, threatened to be
made a party to, or the subject of, any actions at law or in equity, suits,
proceedings or hearings, and, to the Knowledge of Purchaser, is not a party to,
or the subject of, or threatened to be made a party to or the subject of any
investigation, by, of, in or before any Governmental Entity that has had or
would reasonably be expected to have, individually or in the aggregate, a
Purchaser Material Adverse Effect. As of the date hereof, Purchaser is not a
party to or, to the Knowledge of Purchaser, threatened to be made a party to any
actions at law or in equity, suits, proceedings, hearings or investigations of,
in or before any Governmental Entity that questions or challenges the validity
of any Transaction Document, the AISA Share Transfer Agreement, the Loan
Agreement or the Placement Agreement or any action taken or to be taken by
Purchaser pursuant to this Agreement, the Loan Agreement or the Placement
Agreement (other than filings, permits, authorizations, consents and approvals
referred to in Section 4.3). Each of Purchaser and its Subsidiaries is not
subject to any outstanding order, writ, injunction or decree which has had, or
would reasonably be expected to have, individually or in the aggregate, a
Purchaser Material Adverse Effect.
Section 4.7 Investigation by Purchaser. Purchaser has conducted its own
independent investigation, review and analysis of the business, operations,
assets, liabilities, results of operations, financial condition, software,
technology and prospects of the Company and the Company Subsidiaries, on the
basis of information supplied by Seller, which investigation, review and
analysis was done by Purchaser and its Affiliates and, to the extent Purchaser
deemed appropriate, by Purchaser's representatives.
Section 4.8 Brokers or Finders. Neither Purchaser nor any of its
Subsidiaries or its Affiliates has entered into any agreement or arrangement
entitling any agent, broker, investment banker, financial advisor or other firm
or Person to any broker's or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by the Transaction
Documents and the AISA Share Transfer Agreement, except Deutsche Bank, whose
fees and expenses will be paid by Purchaser in accordance with Purchaser's
agreement with such firm.
Section 4.9 Capitalization of the Purchaser.
(a) The authorized share capital of Purchaser is (pound)25,500,000
consisting of 510,000,000 ordinary shares of Purchaser, of nominal value five
xxxxx xxxxxxxx each ("Purchaser Ordinary Shares"), of which 391,248,957 were
issued and outstanding as of May 8, 2003. All of the issued and outstanding
Purchaser Ordinary Shares are duly authorized, validly issued and credited as
fully paid. Other than, in each case, pursuant to the Relationship Agreement or
the Placement Agreement, pursuant to the share option schemes of Purchaser, as
required by applicable Laws or the Listing Rules or as referred to in the notice
for the annual general meeting of shareholders of Purchaser in 2002 and 2003,
there are no options, puts, warrants, calls, preemptive rights, subscriptions or
other rights or agreements, arrangements or commitments to which the Purchaser
is a party or by which it is bound obligating (i) Purchaser to issue, deliver,
transfer or sell or refrain from issuing, delivering, transferring or selling,
any shares or equity interests in Purchaser, or to grant, extend or enter into
any such option, put, warrant, call or other right, agreement, arrangement or
commitment, (ii) Purchaser to repurchase, redeem or otherwise acquire, or to
refrain from repurchasing, redeeming or otherwise acquiring, any shares or
equity interest in Purchaser, or to grant, extend or enter into any such option,
put, right or agreement, or (iii) Purchaser or the other party to vote or
refrain from voting any shares or equity interests in Purchaser.
(b) The Purchaser Shares to be delivered to Seller pursuant to the
terms of this Agreement have been duly authorized and reserved for issuance and,
when issued and delivered at Closing, will be validly issued and credited as
fully paid and not subject to any preemptive rights or any third party right of
any nature whatsoever except as provided under the Relationship Agreement.
(c) As of the date hereof, Purchaser has received no notification under
Part VI of the Companies Act that there are any voting or control trusts,
shareholder agreements or similar understandings relating to voting or transfer
of securities of Purchaser or relating to any of the types of matters with
respect to Purchaser or the Purchaser Ordinary Shares that are covered by the
Relationship Agreement (other than trusts, agreements and understandings that
are exclusively among Persons who are Affiliates of one another, but not of
Purchaser, and other than trusts, agreements and understandings relating to the
share option plans and pension schemes of Purchaser) between or among holders of
Purchaser Ordinary Shares or to which Purchaser is a party.
Section 4.10 Compliance with Laws. (a) Each of Purchaser and its
Subsidiaries is in possession of all Permits necessary for it to carry on its
business as it is now being conducted and no suspension or cancellation of any
of the foregoing is pending or, to the Knowledge of Purchaser, threatened and
(b) to the Knowledge of Purchaser, Purchaser is not in violation of any
applicable Law, except in the case of both (a) and (b) for such failures to
possess, suspensions, cancellations and violations that would not have,
individually or in the aggregate, a Purchaser Material Adverse Effect.
Section 4.11 Purchaser Financial Statements. True and complete copies
of the Purchaser Financial Statements are contained in the Annual Report and
Accounts 2002 published by Purchaser prior to the date hereof. The Purchaser
Financial Statements have been prepared in accordance with U.K. GAAP applied on
a consistent basis and on that basis give a true and fair view of the state of
affairs of Purchaser and its group (as referred to therein) at the times
referred to therein and the profit and cash flows for Purchaser's group (as
referred to therein) for the periods referred to therein.
Section 4.12 Absence of Certain Changes or Events. (a) Since the
Purchaser Balance Sheet Date, no event, change or circumstance that would have a
Purchaser Material Adverse Effect has occurred and (b) from the Purchaser
Balance Sheet Date through the date hereof Purchaser has conducted its business
in the ordinary course, except for matters related to, or in furtherance of,
this Agreement, the Placement Agreement, the Relationship Agreement, the Loan
Agreement and the transactions contemplated hereby and thereby.
Section 4.13 Purchaser Shareholder Meeting.
(a) The approval of the transactions contemplated by this Agreement and
the Loan Agreement by the holders of a simple majority of the Purchaser Ordinary
Shares that are voted (in person or by proxy) at the Purchaser Shareholder
Meeting (such approval, the "Purchaser Shareholder Approval") is the only vote
or approval of the holders of any class of securities of Purchaser that shall be
necessary for the approval and adoption by Purchaser of this Agreement and the
Loan Agreement and the transactions contemplated hereby and thereby.
(b) To the Knowledge of Purchaser, as of the date hereof, there are no
conditions, events, circumstances, facts, activities, practices, incidents,
actions or omissions specific to Purchaser or any of its Subsidiaries (excluding
matters to the extent relating to the business of the Company and the Company
Subsidiaries) that could be reasonably anticipated to materially delay the
approval by the UKLA of the Purchaser Circular.
Section 4.14 Purchaser Filings and Public Documents.
(a) Since January 1, 2002, all material documents which are required in
accordance with applicable Laws to have been delivered by Purchaser to the
Registrar of Companies of England and Wales have been properly so delivered.
(b) Purchaser has delivered to Seller (or its attorneys), in the form
filed with the Registrar of Companies of England and Wales, where applicable,
(i) its Annual Reports for the financial years ended December 31, 2000, 2001 and
2002, (ii) all notices, resolutions passed and any related shareholder circulars
in respect of any Purchaser's meetings of shareholders held since January 1,
2002 and (iii) any other public disclosure made by it through a Regulatory
Information Service since January 1, 2003 and prior to the date hereof
(collectively, "Purchaser U.K. Public Documents"). All such Purchaser U.K.
Public Documents (and any documents publicly disclosed by Purchaser after the
date hereof that would have been Purchaser U.K. Public Documents if disclosed
before the date hereof), including, without limitation, any financial
statements, complied, when filed, with all applicable Laws and/or regulatory
requirements except to the extent that any failure to comply would not have,
individually or in the aggregate, a Purchaser Material Adverse Effect.
(c) Since January 1, 2002, all public disclosures, required pursuant to
Purchaser's obligations under the Listing Rules have been made except to the
extent that any failure to comply would not have, individually or in the
aggregate, a Purchaser Material Adverse Effect.
Section 4.15 Absence of Pre-Existing Agreements, Arrangements or
Understandings. As of the date hereof, Purchaser does not have any binding
agreement (oral or written) or any non-binding letter of intent or term sheet
with any third party to sell or transfer all or any material part of the
business, assets, properties or operations of the Company or any Company
Subsidiary. As of the date hereof, Purchaser has not engaged in any substantive
negotiations with a third party concerning any such agreement, letter of intent
or term sheet. For the avoidance of doubt, nothing in this Section 4.15 shall be
construed to limit or expand in any respect the rights and remedies of the
parties under the Confidentiality Agreement.
Section 4.16 No Insolvency. Purchaser is not at the date of this
Agreement and, to the Knowledge of Purchaser, will not at Closing or as a result
of consummation of the transactions contemplated by this Agreement or the Loan
Agreement be, insolvent under the provisions of section 123 of the Insolvency
Act.
Seller acknowledges that, except for the representations and warranties
contained in this Article IV or in any certificate delivered at Closing by
Purchaser pursuant to Section 6.3(c), neither Purchaser nor any other Person
acting on behalf of Purchaser, makes any representation or warranty, express or
implied, including with respect to the due diligence materials and discussions.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations.
(a) Interim Operations of the Company. Except as contemplated by this
Agreement, as set forth in Section 5.1(a) of the Seller Disclosure Schedule, as
required by applicable Law and as may be consented to in writing by Purchaser
(such consent not to be unreasonably withheld or delayed), from the date hereof
to the Closing:
(i) Seller shall cause the business of the Company and the Company
Subsidiaries to be conducted in the ordinary and usual course of business
including, without limitation, with regard to the payment of payables, the
billing and collection of receivables and not making changes in the terms of
creditor or debtor payments;
(ii) Seller shall cause each of the Company and the Company
Subsidiaries to use commercially reasonable efforts: (A) to preserve intact
their respective current business organizations; (B) to keep available the
services of their current officers and employees (to the extent not inconsistent
with Section 5.1(a)(iv)); and (C) to preserve the goodwill of suppliers,
customers and others with whom material business relationships exist to the end
that goodwill and ongoing businesses shall be unimpaired as of the Closing Date;
(iii) Seller shall cause each of the Company and the Company
Subsidiaries not to: (A) amend its certificate of incorporation or by-laws (or
similar organizational documents), (B) authorize for issuance, issue, sell,
transfer, pledge, dispose of or encumber any shares of any class or series of
its capital stock, or securities convertible into or exchangeable for, or
options, puts, warrants, calls, commitments or rights of any kind to acquire,
any shares of any class or series of its capital stock (unless such action with
respect to a Subsidiary does not and would not reduce the Company's aggregate
direct or indirect beneficial ownership of such Subsidiary), (C) except if by a
wholly owned Company Subsidiary, declare, set aside or pay any non-cash dividend
or any other distribution payable in stock or property (other than cash and cash
equivalents) with respect to any shares of any class or series of its capital
stock; or (D) except with respect to securities of wholly owned Company
Subsidiaries, split, combine or reclassify any shares of any class or series of
its capital stock;
(iv) Seller shall cause the Company and each Company Subsidiary
not to (A) make any change in the compensation payable or to become payable to
any of its employees or to any Plan (in each case other than normal recurring
increases in the ordinary course of business consistent with past practices or
pursuant to plans, programs or agreements existing on the date hereof) or (B) to
introduce any new Plans in an amount exceeding $25,000 for any individual or
$250,000 in the aggregate;
(v) Seller shall cause the Company and each Company Subsidiary not
to adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, corporate or other similar restructuring, recapitalization or
other corporate or similar reorganization of the Company or any Company
Subsidiary;
(vi) Seller shall cause the Company and each Company Subsidiary
not to change in any material respect any of the accounting methods used by it
unless required by applicable GAAP;
(vii) Seller shall cause the Company and each Company Subsidiary
not to become legally committed to any new capital expenditure requiring
expenditures after the Closing, except for expenditures pursuant to projects for
which work has already been commenced or committed prior to the date hereof and
except as consistent with the consolidated capital expenditure budget of the
Company and its consolidated Subsidiaries set forth in Section 5.1 of the Seller
Disclosure Schedule;
(viii) except in the ordinary course of business and in
arms-length transactions, Seller shall cause the Company and each Company
Subsidiary not to transfer, sell, lease, license, mortgage or create an
Encumbrance upon (other than Permitted Encumbrances) any of their respective
assets or properties;
(ix) the Company and the Company Subsidiaries shall not make any
loans or advances to any Person such that the amount of principal owed by such
Person to the Company and the Company Subsidiaries shall be in excess of
$100,000 and shall not make any loan or advance if, after giving effect to such
loan or advance the total principal amount of all loans and advances made after
the date hereof shall be in excess of $500,000; and
(x) Seller shall cause the Company and each Company Subsidiary not
to enter into any agreement, contract, commitment or arrangement to do any of
the foregoing in clauses (i) through (ix).
Seller shall not take any affirmative action with respect to any
Minority Subsidiary to permit or cause such Minority Subsidiary to take any
action that would violate the provisions of this Section 5.1(a) if such action
were taken by the Company. Notwithstanding anything to the contrary contained in
this Agreement (but only to the extent not prohibited by applicable Law and
subject to Section 5.6(k)), nothing shall prohibit Seller from sweeping cash
from the accounts of the Company and the Company Subsidiaries which would be
considered "cash or cash equivalents" (determined on the same basis as such line
item was determined in the Company Financial Statements) up until the opening of
business on the Closing Date or from reducing Indebtedness up until the
completion of the Closing, it being understood that the sweeping of such cash or
the reduction of Indebtedness shall be taken into account when calculating the
Closing Net Indebtedness; provided, however, that Seller shall not be permitted
to sweep cash (as provided above) if it would result in the inability of the
Company or any Company Subsidiary to meet its operating obligations required to
be paid before the Closing Date in the ordinary course of business consistent
with past practice.
(b) Additional Interim Covenants. Prior to Closing:
(i) Seller shall cause the Company and the applicable Company
Subsidiaries to use their reasonable best efforts to undertake and complete the
reorganizations described in Section 3.26 of the Seller Disclosure Schedule and
all actions in connection therewith shall be in accordance with applicable Law;
(ii) Seller shall cause the Company and the Company Subsidiaries
to pay all outstanding Indebtedness of the Company and its direct or indirect
wholly-owned Subsidiaries other than in respect of capital leases;
(iii) Seller shall cause the Company and the applicable Company
Subsidiaries to take all steps necessary for the release and termination of all
Encumbrances set forth in Section 3.10(a) of the Seller Disclosure Schedule to
the extent they arise as a result of Indebtedness that is repaid pursuant to
Section 5.1(b)(ii);
(iv) Seller shall use commercially reasonable efforts to cause the
Company and the applicable Company Subsidiaries, including (for the avoidance of
doubt) IX, LLC, not to (A) cause IX, LLC to assign to any third party its put
purchase obligation (as described in Section 6 of the Master Investor Rights
Agreement or otherwise), (B) exercise IX, Inc.'s right to call the equity of IX,
LLC not owned by the Company or IX, Inc. (as described in Section 7 of the
Master Investor Rights Agreement or otherwise), (C) have IX, Inc. cause or
approve a Company Sale (as defined in the Master Investor Rights Agreement)
pursuant to Section 3.2 of the Master Investor Rights Agreement, or (D) have IX,
Inc. exercise any right granted by Sections 3.1 (a) and (b) of the Master
Investor Rights Agreement or (E) have IX, Inc. sell its interest in IX, LLC; and
(v) Seller shall notify Purchaser as soon as practicable of any
Interest held or acquired after the date hereof by Seller, a Seller Subsidiary
or, to the Knowledge of Seller, a Seller Minority Subsidiary (other than the
Purchaser Shares as contemplated hereby).
(c) Purchaser Covenant - Purchaser Share Issuance Proceeds. From the
date hereof until the Closing Date, Purchaser shall not issue Purchaser Ordinary
Shares or issue securities convertible into or exchangeable for Purchaser
Ordinary Shares (other than the placement of Purchaser Ordinary Shares being
announced concurrent with the announcement of this Agreement, issuances to
employees and directors, issuances pursuant to Purchaser's share schemes,
issuances pursuant to currently outstanding options and issuances exclusively to
Seller and/or its subsidiaries until the Closing) without the prior consent of
Seller, which consent shall not be unreasonably withheld or delayed; provided,
however, that Purchaser and Seller agree that it shall be reasonable for Seller
to withhold such consent with respect to a proposed issuance if Purchaser has
not agreed in writing to apply the proceeds from such proposed issuance to
adjust the Base Cash Purchase Price and number of Purchaser Ordinary Shares
comprising the Purchaser Shares such that 50% of the net proceeds of such
proposed issuance are applied to increase the Base Cash Purchase Price and an
appropriate and corresponding decrease (based on the increase in value to the
Base Cash Purchase Price) is made to the number of Purchaser Ordinary Shares
comprising the Purchaser Shares (subject to a maximum aggregate adjustment of
$25 million for all issuances by Purchaser between the date hereof and the
Closing Date that are subject to this Section 5.1(c)).
Section 5.2 Access; Confidentiality.
(a) Seller shall cause the Company from the date hereof to the Closing
to (i) give Purchaser and its authorized representatives, upon reasonable
advance notice and during regular business hours, reasonable access to all
books, records, personnel, officers and other facilities and properties of the
Company and its Subsidiaries, (ii) permit Purchaser to make such copies and
inspections thereof, upon reasonable advance notice and during regular business
hours, as Purchaser may reasonably request and (iii) cause the officers of the
Company and its Subsidiaries to furnish Purchaser with such unaudited financial
and operating data and other information with respect to the business and
properties of the Company as is regularly prepared in the ordinary course that
Purchaser may from time to time reasonably request; provided, however, that any
such access shall be conducted at Purchaser's expense, at a reasonable time,
under the supervision of Seller's or the Company's personnel and in such a
manner as not to interfere unreasonably with the normal operations of the
business of Seller or the Company. Notwithstanding anything contained in this or
any other agreement between Purchaser and Seller executed prior to the date
hereof, none of the Company, any Company Subsidiary, Seller or any Affiliate of
Seller shall have any obligation to make available to Purchaser or its
representatives, or provide Purchaser or its representatives with, any
consolidated, combined or unitary Tax Return filed by Seller or any of its
Affiliates or predecessors, or any related material, and nothing herein shall
require either Seller or the Company to disclose any information to Purchaser if
such disclosure would in Seller's reasonable discretion (i) jeopardize any
attorney-client or other legal privilege or (ii) contravene any applicable Law,
fiduciary duty or binding agreement (including any confidentiality agreement to
which Seller, the Company or any Affiliate of either is a party).
(b) The Confidentiality Agreement shall be binding on the parties
hereto and in full force and effect until the second anniversary of the Closing
Date, provided that the Confidentiality Agreement, dated January 20, 2003, shall
terminate at the Closing only with respect to information relating solely to the
Company and/or one or more Company Subsidiaries and/or Minority Subsidiaries
except that, with respect to any information relating to any Carve-out
Subsidiary, such Confidentiality Agreement shall terminate with respect to
information concerning such Carve-out Subsidiary on the Secondary Closing
applicable to such Carve-out Subsidiary. The information contained herein, in
the Seller Disclosure Schedule or delivered to Purchaser or its authorized
representatives pursuant hereto shall be deemed, for purposes of the
Confidentiality Agreement, dated January 20, 2003 only, to be Evaluation
Material (as defined and subject to the exceptions contained in such
Confidentiality Agreement) until the Closing; provided, however, that, subject
to Section 5.19 (Purchaser Circular), Purchaser may make disclosures of material
Evaluation Material (after prior consultation with Seller with respect to such
disclosure of material Evaluation Material) as Purchaser, in its reasonable
judgment, deems necessary in (i) filings with Governmental Entities, (ii) the
Purchaser Circular and (iii) presentations to funding sources and in individual
meetings with Purchaser's shareholders. Purchaser and Seller acknowledge that,
for purposes of the Confidentiality Agreement dated April 21, 2003, the term
"Evaluation Material" shall be deemed to include material non-public information
about the Company and the Company Subsidiaries, as well as trade secrets and
proprietary information of the Company and the Company Subsidiaries.
Notwithstanding anything in the Confidentiality Agreement to the contrary,
either party may disclose information to the extent such party, in its
reasonable judgment, deems such disclosure to be required by applicable
securities laws or stock exchange rules.
Section 5.3 Efforts and Actions to Cause Closing to Occur.
(a) Prior to the Closing, upon the terms and subject to the conditions
of this Agreement, Purchaser and Seller shall use their respective commercially
reasonable efforts to take, or cause to be taken (including, in the case of
Seller, by the Company and the Company Subsidiaries), all actions, and to do, or
cause to be done and cooperate with each other in order to do, all things
necessary, proper or advisable to consummate the Closing as promptly as
practicable, including (i) the preparation and filing of all forms,
registrations and notices required to be filed to consummate the Closing, (ii)
the taking of such actions as are necessary to obtain any requisite approvals,
authorizations, consents, orders, licenses, permits, qualifications, exemptions
or waivers by any third party or Governmental Entity, including responding to
formal and informal requests for documents and other information and including
any and all requirements of the UKLA (including, if applicable, listing
particulars), (iii) taking such actions as are necessary in connection with
agreed or mandatory employee information and consultation, including notifying,
informing and consulting any trade union, works council or other employee
representative body about the transactions contemplated in this Agreement, in
accordance with all applicable Laws, (iv) using commercially reasonable efforts
to defend all lawsuits and other proceedings by or before any Governmental
Entity challenging this Agreement or the consummation of the Closing and (v)
using commercially reasonable efforts to cause to be lifted or rescinded any
injunction, decree, ruling, order or other action of any Governmental Entity
adversely affecting the ability of the parties to consummate the Closing. In
furtherance of and not in limitation of the foregoing, each of Seller and
Purchaser agrees to make or cause to be made no later than the fifth Business
Day after the date hereof an appropriate filing of a Notification and Report
Form pursuant to the HSR Act and, in the case of all other filings or
notifications required to be made, as promptly as practicable after the date
hereof, in order to commence the waiting periods or to obtain the authorizations
referred to in Section 6.1(b). In addition, no party hereto shall take any
action after the date hereof that could reasonably be expected to materially
delay the obtaining of, or result in not obtaining, any permission, approval or
consent from any Governmental Entity or other Person required to be obtained
prior to Closing. Nothing contained in this Agreement shall require Seller or
the Company to pay any consideration to any other Person (other than nominal
filing and application fees to Governmental Entities) from whom any such
approvals, authorizations, consents, orders, licenses, permits, qualifications,
exemptions or waivers are requested.
(b) Notwithstanding any other provision of this Agreement, nothing
herein shall require Purchaser to hold separate or to divest any assets or
business operations of the Company, any Company Subsidiary, Purchaser or any
Affiliate of Purchaser, or accept any limitation on the operation of the
Company, any Company Subsidiary, Purchaser or any Affiliate of Purchaser if
doing so would result in a Purchaser Material Adverse Effect (assuming, for this
purpose, the completion of the transactions contemplated by this Agreement).
(c) If any party hereto or Affiliate thereof receives a request for
information or documentary material from any Governmental Entity with respect to
this Agreement or any of the transactions contemplated hereby, then such party
shall endeavor in good faith to make, or cause to be made, as soon as reasonably
practicable and after consultation with the other party, an appropriate response
in compliance with such request.
(d) The parties shall keep each other apprised of the status of matters
relating to the completion of the transactions contemplated hereby and work
cooperatively in connection with obtaining the requisite approvals, consents or
orders of each applicable Governmental Entity, including, without limitation:
(i) cooperating with each other in connection with filings under
the HSR Act, any foreign investments laws or any other antitrust laws;
(ii) furnishing to the other party all information within its
possession that is required for any application or other filing to be made by
the other party pursuant to the HSR Act, any foreign investment laws or any
other antitrust laws in connection with the transactions contemplated by this
Agreement;
(iii) promptly notifying each other of any communications from or
with any Governmental Entity with respect to the transactions contemplated by
this Agreement;
(iv) in the case of Purchaser, subject to the provisions of
Section 5.3(b), effecting the sale or disposition of, or arranging to hold
separate, assets or businesses, or accepting limitations on operations, to the
extent necessary or required to consummate the Closing;
(v) not agreeing to participate in any meeting or discussion with
any Governmental Entity in connection with proceedings under or relating to the
HSR Act, any foreign investment laws or any other antitrust laws unless it
consults with the other party in advance, and, to the extent permitted by such
Governmental Entity, gives the other party the opportunity to attend and
participate thereat; provided, that Purchaser shall not be required to provide
Seller with any confidential information or business secrets relating to
Purchaser or any of its Subsidiaries except in accordance with a written
agreement among Purchaser, Seller and counsel to each of Purchaser and Seller;
and
(e) consulting and cooperating with one another in connection with all
analyses, appearances, presentations, memoranda, briefs, arguments, opinions and
proposals made or submitted by or on behalf of any party hereto in connection
with proceedings under or relating to the HSR Act, any foreign investment laws
or any other antitrust laws; provided, that Purchaser shall not be required to
provide Seller with any confidential information or business secrets relating to
Purchaser or any of its Subsidiaries except in accordance with a written
agreement among Purchaser, Seller and counsel to each of Purchaser and Seller.
(f) Purchaser undertakes to take or to cause to be taken all actions,
and to do, or cause to be done, all things necessary, proper or advisable to
ensure that the Unsatisfied Conditions are satisfied as promptly as practicable
(and, in any event, without any delay that would prevent the satisfaction of any
of the conditions to the Closing set forth in Article VI or adversely affect
Purchaser's ability to pay the Estimated Cash Purchase Price and consummate the
Closing).
(g) Purchaser undertakes to submit a written request for the extension
of the Certain Funds Period (as such term is defined in the Loan Agreement)
within the time limits set out in paragraph (b) of such definition in the Loan
Agreement if the circumstances set out therein arise.
Section 5.4 Tax Matters.
(a) Apportionment of Taxes.
(i) In order appropriately to apportion any Taxes relating to a
period that begins before the Closing Date and ends after the Closing Date (a
"Straddle Period"), the parties hereto will, to the extent permitted by
applicable Law, elect with the relevant taxing authority to treat for all
purposes the Closing Date as the last day of a taxable period of the Company and
the Company Subsidiaries (a "Short Period"). Each Short Period shall be treated
as a period ending on the Closing Date for purposes of this Agreement and Seller
shall be responsible for the payment of all Taxes imposed upon or otherwise due
and owing by the Company or a Company Subsidiary in respect of a Short Period or
any other period ending on or before the Closing Date.
(ii) In any case where applicable Law does not permit the parties
to elect to treat the Closing Date as the last day of a Short Period, the
portion of each Tax that is attributable to the operations of the Company for
the period that would have qualified as a Short Period if such election had been
permitted by applicable Law (an "Interim Period") shall for purposes of this
Agreement be (A) in the case of a Tax that is not based on net income and
applies ratably to a Straddle Period, the total amount of such Tax for the
period in question multiplied by a fraction, the numerator of which is the
number of days in the Interim Period, and the denominator of which is the total
number of days in such Straddle Period, (B) in the case of a Tax that is based
on net income, the Tax that would be due with respect to the Interim Period if
such Interim Period were a Short Period determined based upon an interim closing
of the books, and (C) in the case of sales, value-added and similar
transaction-based Taxes, all Taxes in respect of transactions that occurred
during the Interim Period. Notwithstanding the foregoing, if the parties to this
Agreement conclude that a different method for determining which party should be
responsible for Taxes is more convenient or equitable than the method set forth
in the preceding sentence with respect to a particular entity or Tax liability,
then the parties shall be free to adopt such different method upon mutual
consent. For purposes of this Agreement, all Taxes imposed upon or otherwise due
and owing by the Company or a Company Subsidiary in respect of an Interim Period
(determined in accordance with the preceding sentence) shall be treated as Taxes
imposed in respect of a Short Period and Seller shall be responsible for the
payment of such Taxes.
(iii) All Taxes imposed upon the Company or any Company
Subsidiary, or imposed in respect of the transactions contemplated hereby that
are not specifically allocated to Seller in accordance with this Section 5.4(a)
shall not be the responsibility of Seller, and Purchaser shall be responsible
for the payment of such Taxes.
(iv) Transfer Taxes and Other Closing Expenses. Purchaser shall
pay directly, or reimburse Seller promptly upon demand and delivery of proof of
payment, all excise, sales, transfer, documentary, filing, recordation and other
similar taxes, levies, fees and charges, if any (including all real estate
transfer taxes and conveyance and recording fees, if any), that may be imposed
upon, or payable or collectible or incurred in connection with, this Agreement
and the transactions contemplated hereby (such Taxes, "Transfer Taxes"), except
that (A) realty Transfer Taxes, if any, shall be split equally between Purchaser
and Seller and (B) Seller shall be responsible for any Tax liability to the
national or any local government of the United Kingdom or any agency, political
subdivision or other taxing authority thereof that may result from any of the
Company and/or Company Subsidiaries ceasing, or being deemed to cease, to be a
member of any group or associated with any other company as a result of the
transactions contemplated by this Agreement (other than any Tax liability that
would not have arisen but for the formation of Luxembourg Structure (as such
term is defined in Section 3.26 of the Seller Disclosure Schedule) in connection
with the reorganization described in Section 3.26 of the Seller Disclosure
Schedule). Seller shall cooperate with Purchaser and, subject to the other terms
of this Agreement, take any action reasonably requested by Purchaser which does
not cause Seller to incur any material cost or material inconvenience in order
to minimize Transfer Taxes. Notwithstanding the provisions of Section 5.4(b),
which shall not apply to Tax Returns relating to Transfer Taxes, any Tax Returns
that must be filed in connection with Transfer Taxes shall be prepared and filed
when due by the party primarily or customarily responsible under the applicable
local Law for filing such Tax Returns, and such party will use its reasonable
efforts to provide such Tax Returns to the other party at least 10 Business Days
prior to the due date for such Tax Returns. All other expenses of Closing will
be paid by the party incurring such expense.
(b) Tax Returns.
(i) (A) Seller shall be responsible for the timely filing (taking
into account any extensions received from the relevant tax authorities) of all
Tax Returns whenever due that are required by Law to be filed by or include the
Company or any Company Subsidiary in respect of all periods ending on or before
the Closing Date (other than an Interim Period); and (B) such Tax Returns shall
be true, correct and complete in all material respects and accurately set forth
all items to the extent required to be reflected or included in such Tax Returns
by Law, regulations or rules. Such Tax Returns shall be prepared on a basis
consistent with those prepared for prior taxable periods unless a different
treatment of any item is required by an intervening change in law.
(ii) Purchaser shall be responsible for the timely filing (taking
into account any extensions received from the relevant Tax authorities) of all
Tax Returns required by Law to be filed by or include the Company or any Company
Subsidiary in respect of any period ending after the Closing Date, provided,
however, that any Tax Return required to be filed by Purchaser, the Company or
any Company Subsidiary relating to any Straddle Period shall be submitted (with
copies of any relevant schedules, work papers and other documentation then
available) to Seller for Seller's review not less than 45 days prior to the due
date for the filing of such Tax Return, and Purchaser and Seller shall
reasonably cooperate in the preparation of such Tax Returns. Seller shall have
the option of providing to Purchaser, at any time at least 30 days prior to the
due date, written instructions as to how Seller wants any, or all, of the items
that are allocated to Seller in accordance with Section 5.4(a) treated on such
Tax Return and Purchaser shall make a good faith effort to comply with Seller's
instructions, or, in the absence of such instructions, to treat the item in
accordance with past practice, if any, to the extent permissible under
applicable Law.
(iii) Purchaser shall promptly pay to Seller an amount equal to
any refund or credit (including any interest paid or credited with respect
thereto) of or against Taxes received by Purchaser, the Company or any Company
Subsidiary (A) relating to taxable periods ending on or before the Closing Date
(other than to the extent such refunds relate to the carryback of net operating
losses, Tax credits, or other Tax attributes arising in respect of periods
ending after the Closing Date to periods ending on or prior to the Closing Date)
or (B) attributable to Taxes that gave rise to an indemnity by Seller pursuant
to Article VIII. Except as provided immediately below, Purchaser shall, if
requested by Seller and at Seller's expense, cause the relevant entity to file
for and obtain any refund or credit that would give rise to a payment under this
paragraph. In the case of such refunds in connection with Tax Returns filed in
respect of a Straddle Period, Purchaser and Seller shall jointly control the
prosecution of such refund claims. In the case of such refunds in connection
with other Tax Returns, Purchaser shall permit Seller to control the prosecution
of any such refund claim at Seller's expense, and shall cause the relevant
entity to authorize by appropriate power of attorney such person as Seller shall
designate to represent such entity with respect to such refund claim; provided,
however, that, prior to filing any such claim for a Tax refund, Seller shall
notify Purchaser in writing of Seller's intention to file such claim, shall
provide Purchaser with the relevant details of such claim (including an
explanation of the basis for such claim), and shall provide Purchaser with an
opportunity to discuss the reasonableness of such claim, and Purchaser may
provide Seller with a written objection to the filing of such claim not later
than 30 days following the receipt of such notice from Seller. If Purchaser
makes such a written objection to the filing of a refund claim, Seller shall not
file such claim, but shall be entitled to an indemnification from Purchaser in
an amount equal to the value of such refund claim if Seller provides Purchaser
with (i) an opinion from a nationally-recognized accounting firm stating that
Seller's grounds for filing such claim are reasonable and (ii) a letter setting
forth the value of such claim. If Purchaser disputes the value of the refund
claim provided by Purchaser, then the parties shall submit the question to a
nationally-recognized accounting firm jointly chosen by Purchaser and Seller,
and shall accept the valuation reached by such accounting firm. Purchaser shall
pay each indemnity obligation to Seller arising pursuant to this Section
5.4(b)(iii) within 10 business days of the establishment of the value of the
relevant refund claim.
(iv) Seller and its Affiliates shall be entitled to make the
election specified in U.S. Treasury Regulation Section 1.1502-20(g) to
reattribute to Seller the net operating loss carryovers and net capital loss
carryovers, if any, attributable to the Company and Company Subsidiaries.
(v) Seller and Purchaser agree to cooperate with one another in
the preparation of Tax Returns and all other matters pertaining to Taxes and Tax
Returns and relating to refund claims described in Section 5.4(b)(iii).
(c) Certain Post-Closing Actions which Affect Seller's Liability for
Taxes. None of Purchaser or any Affiliate of Purchaser shall (or shall cause or
permit the Company or any Company Subsidiary to) amend or refile any Tax Return
relating in whole or in part to the Company or any Company Subsidiary with
respect to any taxable year or period ending on or before the Closing Date
without the prior written consent of Seller, which consent may not be
unreasonably withheld; provided, however, that this provision shall not apply to
any modification or adjustment to said Tax Returns resulting from an audit or
examination by any Taxing Authority, which procedures may be subject to the
provisions of Article VIII.
(d) Termination of Existing Tax Sharing Agreements. Any and all
existing Tax sharing agreements or arrangements, written or oral, between Seller
and the Company, shall terminate as of the Closing.
Section 5.5 Publicity. The initial press release by each party with
respect to the execution of this Agreement shall be a press release acceptable
to the other party.
Section 5.6 Employees; Employee Benefits.
(a) On and after the Closing, until December 31, 2003, Purchaser shall
cause the Company to provide the Retained Employees with salaries, incentive
opportunities and benefit plans, programs and arrangements (excluding equity
based opportunities, plans, programs and arrangements) comparable in the
aggregate to those provided as of the date hereof by Seller, the Company and the
Company Subsidiaries; provided, however, that this obligation shall not preclude
the Purchaser, the Company or any Company Subsidiary from terminating the
employment of any Retained Employee in which case the Company or such Company
Subsidiary shall be liable for any severance costs incurred in connection with
such termination.
(b) With respect to each employee benefit plan, practice or policy of
Purchaser or any of its Affiliates, each Retained Employee shall be given credit
under such plan for all service prior to the Closing Date with the Company, any
of its Subsidiaries or any predecessor employer (to the extent such credit was
given by Seller, the Company, any of its Subsidiaries or any predecessor
employer under a comparable Plan), for purposes of determining eligibility and
vesting and for all other purposes for which such service is either taken into
account or recognized; provided, however, such service need not be credited to
the extent it would result in a duplication of benefits, including benefit
accrual under defined benefit plans. Such service also shall apply for purposes
of satisfying any waiting periods, evidence of insurability requirements, or the
application of any preexisting condition limitations. Retained Employees shall
be given credit for amounts paid under a corresponding employee benefit plan
during the same period for purposes of applying deductibles, copayments and
out-of-pocket maximums as though such amounts had been paid in accordance with
the terms and conditions of the comparable employee benefit plan of Purchaser;
provided, Seller promptly provides or makes such data and information available
to Purchaser.
(c) If any Retained Employee is discharged by the Company or any
Company Subsidiary either constructively or actually after the Closing, then the
Company shall be responsible for any and all severance costs for such Retained
Employee, including payments owing under those agreements, plans or arrangements
listed in Section 3.17(a) of the Seller Disclosure Schedule. The Company shall
be responsible and assume all liability for all notices or payments due to any
Retained Employees, and all notices, payments, fines or assessments due to any
Governmental Entity, pursuant to any applicable foreign, federal, state or local
law, common law, statute, rule or regulation with respect to the employment,
discharge or layoff of employees by the Company after the Closing, including the
WARN Act and Section 4980B of the Code and any rules or regulations as have been
issued in connection with the foregoing.
(d) From and after the Closing, the Company shall be responsible for,
and Purchaser shall cause the Company to indemnify and hold harmless Seller and
its Affiliates and their officers, directors, employees, Affiliates and agents
and the fiduciaries (including plan administrators) of the Plans from and
against, any and all claims, losses, damages, costs and expenses (including
attorneys' fees and expenses) and other liabilities and obligations relating to
or arising out of (i) all salaries, wages, commissions, employee incentive or
other compensation, severance, holiday, vacation, or retirement benefits earned
but unpaid as of the Closing and post-Closing bonuses due to any Covered
Employee with the exception of any liabilities other than those reflected on the
Company Financial Statements resulting therefrom under any Plan that is not
sponsored solely by the Company and one or more Company Subsidiary, (ii) the
liabilities of the Company under this Section 5.6 or any failure by Purchaser or
the Company to comply with the provisions of this Section 5.6, (iii) any
continuing contributions or other obligations of the Company arising after the
Closing Date with respect to the Plans listed in Section 3.17(a) of the Seller
Disclosure Schedule as Plans subject to collective bargaining agreements, and
(iv) any claims of, or damages or penalties sought by, any Covered Employees, or
any Governmental Entity on behalf of or concerning any Covered Employees, with
respect to any act or failure to act by the Company to the extent arising from
the employment, discharge, layoff or termination of any Covered Employee, but
not to the extent relating to acts or omissions of Seller or any Seller
Subsidiary other than the Company and the Company Subsidiaries. Seller shall not
be entitled to any indemnification under the preceding sentence to the extent
Purchaser is entitled to an indemnity under Article VIII for such matter.
Liabilities for which the Company is indemnifying Seller, or for which the
Company is responsible, under this Section 5.6(d) shall be included in the
calculation of the Closing Working Capital subject to Section 2.2 and Schedule
2.2.
(e) On and after the Closing, until December 31, 2003, Purchaser shall
cause the Company to provide the Retained Employees with health insurance
coverage. Seller shall be responsible for paying all benefits for claims
incurred by Covered Employees pursuant to Seller's Health Plan that arise prior
to the Closing.
(f) The Company shall provide short-term disability coverage for all
Retained Employees who as of the Closing Date are entitled to or are receiving
short-term disability benefits as of the Closing on substantially the same terms
and conditions as in effect immediately prior to the Closing, so that such
Retained Employees receive short-term disability benefits for a total of six
months (including months prior to the Closing in which such benefits were paid).
(g) Effective as of the Closing, Purchaser shall cause the Company to
(i) indemnify Seller for each active workers' compensation case attributable to
Covered Employees as of the Closing and each workers' compensation claim
attributable to a Covered Employee based on an underlying event that occurred
prior to the Closing, in each case in an amount not to exceed $250,000 per claim
(and Seller and Purchaser shall agree to make regular adjustments thereafter as
required by the insurance carrier at the time of the applicable claim with
respect to such claims in order to establish the correct amount of the claim and
such adjustments shall continue to be made until the closure or maturation of
the applicable claim), provided that the amount of such indemnification
obligation of Purchaser shall be reduced by any and all amounts Seller or the
Company or any Company Subsidiary has paid toward the deductible of each
workers' compensation claim on or prior to the Closing Date, and provided
further that once the applicable aggregate deductible for all claims has been
paid by Purchaser, the Company, Seller or any Seller Subsidiary for a particular
policy term, Purchaser shall have no further obligation to indemnify Seller with
respect to claims during such policy term; and (ii) provide Retained Employees
with coverage for all workers' compensation benefits from and after the Closing
Date; provided, in the case of Section 5.6(g)(i), that, with respect to active
workers' compensation cases attributable to Covered Employees as of the Closing
and each workers' compensation claim attributable to Covered Employees based on
an underlying event that occurred prior to the Closing, Seller shall, subject to
Section 5.6(g)(i), process such claims in accordance with standard practice and
applicable Law.
(h) As soon as practicable after the Closing Date, Purchaser shall
cause the Company to establish or designate one or more tax-qualified defined
contribution plans (the "Purchaser DC Plans") for the benefit of the Covered
Employees which Purchaser DC Plans and related trust(s) are intended to qualify
under Sections 401(a), 401(k) and 501(a) of the Code, respectively. As soon as
practicable following the earlier of the receipt of a favorable determination
letter from the IRS regarding the qualified status of the Purchaser DC Plans or
the issuance of cross-indemnities reasonably satisfactory to Purchaser and
Seller (the "Initial Transfer Date"), Seller shall cause the trustee(s) of the
Seller Savings Plan (the "Seller DC Plan") to transfer, in a lump sum in cash
and, with respect to any balances held in Seller stock, a number of shares of
Seller stock equal to the balance credited (whether or not vested), as of the
date of transfer to the accounts of the Covered Employees under the Seller DC
Plan, to the appropriate trustee designated by Purchaser, less the outstanding
amount of any participant loans as of the date of transfer under the Seller DC
Plan with respect to the Covered Employees, which amount shall be credited as of
the date of transfer to the respective account or accounts under the Purchaser
DC Plan and such loans will be transferred to the Purchaser DC Plans. As soon as
practicable following the Initial Transfer Date Seller shall cause the
trustee(s) of the Seller DC Plan to make an additional transfer, in a lump sum
in cash in an amount equal to the amount, if any, of employer contributions to
which any Covered Employee is entitled as of the Closing Date but which have not
been credited to his or her account as of the Initial Transfer Date, to the
appropriate trustee designated by Purchaser. Purchaser agrees to cause each
trust forming a part of the Purchaser DC Plans to assume the liability to pay
benefits in the amounts so transferred, as such amounts may be increased or
decreased thereafter, in accordance with and subject to the terms and provisions
of the Purchaser DC Plans. The assets and liabilities shall be transferred in a
trustee-to-trustee transfer in accordance with the rules and procedures of the
IRS. Pending such transfer, the Covered Employees shall have all of the same
rights, features and options with respect to their account balances in the
Seller DC Plan as active employees under such plan(s).
(i) The provisions of this Section 5.6(i) shall apply only if the
Transition Services Agreement terminates prior to December 31, 2003 (the "Early
TS Termination Date"). Purchaser shall, as of the Early TS Termination Date,
cause the Company either to establish or designate an employee benefit plan
subject to Section 125 of the Code for the benefit of the Retained Employees (in
either case, referred to herein as the "Purchaser 125 Plan"). Solely for
purposes of this Section 5.6(i) Retained Employees shall also include each
person who first becomes an employee of the Company or a Company Subsidiary
after the Closing Date and is a participant in the flexible spending account
portion of any of Seller's Plans subject to Section 125 of the Code. Purchaser
shall treat contribution elections made by Retained Employees who are
participants in the flexible spending account portion of any of Seller's Plans
subject to Section 125 of the Code as continuing in effect under the Purchaser
125 Plan after the Early TS Termination Date. On or as soon as practicable after
the Early TS Termination Date, Seller shall transfer to Company an amount in
cash equal to the aggregate account balances of such employees on the date of
transfer, and Company shall be fully responsible for the payment of benefits
related to the amounts so transferred.
(j) Without limiting the generality of any other provision herein, with
respect to post-retirement health benefits for the Covered Employees, Company
shall assume all responsibility for providing and shall provide, and Seller
shall have no obligation or responsibility for providing, such post-retirement
benefits to the Covered Employees, whether or not such Covered Employees have
actually retired on or prior to the Closing Date.
(k) By way of clarification, the parties intend that with respect to
any assets set aside in a trust or other similar mechanism or entity to provide
for the payment of benefits under any Plan with respect to any Covered Employee,
the rights with respect to such assets shall be transferred together with the
corresponding liabilities to the Company pursuant to this agreement, including
(i) any assets set aside in a rabbi trust or trusts or other similar mechanism
or entity to fund the Executive Deferred Compensation Plan, split dollar life
insurance policies for certain executives and certain contractual retirement
benefits payable to Xxxxxx X. Xxxxxxxx that are reflected on the Company
Financial Statements shall be treated as assets of the Company for purposes of
the transactions contemplated by this Agreement; (ii) the NFO Research Inc.
Pension Plan shall be treated as maintained solely by the Company and
sponsorship of such Plan will remain with the Company; and (iii) to the extent
that any insurance policies are funding Plans maintained by or for the benefit
of the Company that are welfare benefit plans, Seller shall use its reasonable
best efforts to cause the insurance companies issuing such policies to create
clone policies pertaining solely to employees of the Company.
Section 5.7 Transition Services. Except as agreed to in writing by
Seller and Purchaser in the Transition Services Agreement, all data processing,
cash management, accounting, insurance, banking, personnel, legal,
communications and other products and services provided to the Company and the
Company Subsidiaries by Seller or any Affiliate of Seller (other than the
Company and the Company Subsidiaries), including any agreements or
understandings (written or oral) with respect thereto, shall terminate
simultaneously with the Closing without any further action or liability on the
part of the parties thereto. Notwithstanding the foregoing, and except as
otherwise provided in the Transition Services Agreement, the provision of any
services (similar to those contemplated by the preceding sentence) by Seller to
the Company from and after the Closing shall be for the convenience, and at the
expense, of Purchaser only and shall be furnished without any liability on the
part of Seller with respect thereto other than gross negligence or willful
misconduct.
Section 5.8 Intercompany Arrangements. Notwithstanding anything herein
to the contrary (but subject to the obligation of Seller to transfer its rights
to the Intercompany Loan at Closing), Seller and its Affiliates shall be
permitted to manage all Intercompany Accounts between the Company or any Company
Subsidiary, on the one hand, and Seller and its Affiliates (excluding the
Company and the Company Subsidiaries), on the other hand, in the sole discretion
of Seller so long as it is in compliance with applicable Law, provided that
Seller arranges, in a manner in its sole discretion and consistent with
applicable Law, for all such accounts (other than the Intercompany Loan) to be
entirely settled effective as of the Closing. In addition, except as otherwise
expressly contemplated by this Agreement or the Transition Services Agreement,
all agreements and commitments, whether written, oral or otherwise, which are
solely between the Company or any Company Subsidiary, on the one hand, and
Seller and its Affiliates (excluding the Company and the Company Subsidiaries),
on the other hand, shall be terminated and of no further effect, simultaneously
with the Closing without any further action or liability on the part of the
parties thereto, and no charges from Seller to the Company or any Company
Subsidiary for general, administrative or other services shall accrue after the
Closing Date except as provided in the Transition Services Agreement. For the
avoidance of doubt, the arrangements set forth in Section 5.8 of the Seller
Disclosure Schedule shall continue following Closing in accordance with their
terms and charges thereunder shall continue to accrue following the Closing.
Section 5.9 Treatment of Seller Guaranties; AISA Shareholder Rights.
(a) Purchaser shall use its reasonable efforts to have released and
cancelled at the Closing each Seller Guaranty disclosed in Section 5.9 of the
Seller Disclosure Schedule; provided, however, that to the extent that any such
Seller Guaranty cannot be so released and cancelled, Purchaser shall use its
reasonable efforts to cause itself to be substituted for Seller and each of
Seller's Affiliates directly affected thereby in respect of such Seller Guaranty
(or, if not possible, added as the primary obligor with respect thereto). From
and after the Closing, if Purchaser has become or becomes aware of any Seller
Guaranties not disclosed in Section 5.9 of the Seller Disclosure Schedule,
Purchaser shall use its reasonable efforts to have released and cancelled such
Seller Guaranties; provided, however, that to the extent that any such Seller
Guaranty cannot be so released and cancelled, Purchaser shall use its reasonable
efforts to cause itself to be substituted for Seller and each of Seller's
Affiliates directly affected thereby in respect of such Seller Guaranty (or, if
not possible, added as the primary obligor with respect thereto). If Purchaser
is not able to either release and cancel any Seller Guaranty or cause itself to
be so substituted in all respects in respect of any Seller Guaranty, then
Purchaser shall indemnify, defend and hold harmless Seller and each such
Affiliate of Seller with respect to all liabilities or expenses that might arise
or be incurred by Seller or such Affiliate of Seller with respect to any such
Seller Guaranty.
(b) Seller shall use its reasonable efforts to cause the rights and
obligations of IPG-Denmark (including, without limitation, the put and call
option provisions) in connection with the Share Transfer Agreement between
IPG-Denmark and Xxxxx Boguszak, Xxxxxxxx Xxx and Xxxxx Boguszakova dated October
25, 2000 (the "AISA Shareholder Arrangement") to be transferred to Purchaser;
provided, that neither party shall be obligated to make any out-of-pocket
payments to IPG-Denmark's counterparties under the AISA Shareholder Arrangement
to induce them to consent to such transfer. Subject to such proviso, for the
purposes of such assignment, Purchaser undertakes to enter into, and Seller
undertakes to cause IPG-Denmark to enter into and Seller undertakes to use its
commercially reasonable efforts to cause IPG-Denmark's counterparties under the
AISA Shareholder Arrangement to enter into, an assignment in the form, or
substantially in the form, attached hereto as Exhibit B or in any other form
reasonably satisfactory to Seller and Purchaser reflecting the terms hereof (the
"AISA Assignment Agreement"). If and to the extent IPG-Denmark has not
effectively assigned its rights and transferred its obligations under the AISA
Shareholder Arrangement, then the parties shall use commercially reasonable
efforts to enter into an alternative, lawful arrangement under which Purchaser
shall have the benefit from and after the Closing of such rights as if such
rights had been so assigned. In such event, (i) Seller shall (A) cause
IPG-Denmark to exercise any and all rights it may have in a timely manner upon
the written request of Purchaser, including any call rights, (B) give Purchaser
prompt written notice of any and all notices received by IPG-Denmark that arise
under the AISA Shareholder Arrangement, (C) cause IPG-Denmark not to take any
action or fail to take any action which could give rise to a liability of
Purchaser or any Subsidiary of Purchaser, unless such action or failure to take
action is at the direction of Purchaser, and (D) promptly deliver to Purchaser
any additional AISA shares acquired by Seller or any of its Affiliates pursuant
to the AISA Shareholder Arrangement, and (ii) Purchaser shall pay the purchase
price for the AISA shares that are put to or called by IPG-Denmark and otherwise
indemnify IPG-Denmark and its Affiliates for all liabilities in connection with
the AISA Shareholder Arrangement except for such liabilities that result from
actions taken or failed to be taken by IPG-Denmark where such actions or
failures are not at the direction of Purchaser. The immediately preceding clause
(ii) shall also apply if following IPG-Denmark's transfer of the AISA Share to
Purchaser, Seller has any residual liabilities relating to the AISA Share (but
Seller shall not be entitled to indemnification under this sentence or the
preceding sentence to the extent Purchaser is entitled to an indemnity under
Article VIII for such matter). In the event Seller sells its interest in
IPG-Denmark, as part of such sale and as a condition thereto, it shall require
the purchaser of IPG-Denmark to agree to be bound by the provisions of this
Section 5.9(b) and such purchaser shall enter into an agreement with Purchaser
to be bound in form and substance reasonably satisfactory to Purchaser and
Seller reflecting the terms hereof.
Section 5.10 Maintenance of Books and Records. After the Closing, each
of the parties hereto shall preserve, until at least the sixth anniversary of
the Closing Date, all pre-Closing Date records possessed or to be possessed by
such party relating to the Company. After the Closing Date and up until at least
the sixth anniversary of the Closing Date, upon any reasonable request from a
party hereto or its representatives, the party holding such records shall (a)
provide to the requesting party or its representatives reasonable access to such
records during normal business hours and (b) permit the requesting party or its
representatives to make copies of such records, in each case at no cost to the
requesting party or its representatives (other than for reasonable out-of-pocket
expenses); provided, however, that nothing herein shall require either party to
disclose any information to the other if such disclosure would jeopardize any
attorney-client or other legal privilege or contravene any applicable law. Such
records may be sought under this Section for any reasonable purpose, including
to the extent reasonably required in connection with the audit, accounting, tax,
litigation, federal securities disclosure or other similar needs of the party
seeking such records. Notwithstanding the foregoing, any and all such records
may be destroyed by a party if such destroying party sends to the other party
hereto written notice of its intent to destroy such records, specifying in
reasonable detail the contents of the records to be destroyed; such records may
then be destroyed after the 60th day following such notice unless the other
party hereto notifies the destroying party that such other party desires to
obtain possession of such records, in which event the destroying party shall
transfer the records to such requesting party and such requesting party shall
pay all reasonable expenses of the destroying party in connection therewith.
Section 5.11 Seller's Trademarks. Notwithstanding anything to the
contrary contained in this Agreement, it is expressly agreed that (a) Purchaser
is not purchasing, acquiring or otherwise obtaining, and neither the Company nor
any Company Subsidiary will be entitled to retain following the Closing Date,
any right, title or interest in any Trademarks employing Seller's name or any
part or variation of such name or anything confusingly similar thereto
("Seller's Trademarks") and (b) none of the Company, any Company Subsidiary,
Purchaser or its Affiliates shall make any use of Seller's Trademarks from and
after the Closing, except that Purchaser, the Company and the Company
Subsidiaries shall be permitted and shall have the right to use existing
supplies of stationery or other supplies of the Company and the Company
Subsidiaries that incorporate Seller's Trademarks for a period not to exceed six
months from the Closing Date.
Section 5.12 Insurance Policies.
(a) Except as provided in Sections 5.6(g), 5.6(k) and 5.12(c),
Purchaser shall not, and shall cause Purchaser's Affiliates (including the
Company and each Company Subsidiary after the Closing) not to, assert, by way of
claim, action, litigation or otherwise, any right to any Insurance Policy or any
benefit under any such Insurance Policy. Seller and its Affiliates (other than
the Company and its Subsidiaries) shall retain all right, title and interest in
and to the Insurance Policies, including the right to any credit or return
premiums due, paid or payable in connection with the termination thereof.
(b) Except as provided in Sections 5.6(g), 5.6(k) and 5.12(c), at the
Closing, Purchaser shall release, and shall cause its Affiliates, including the
Company and each Company Subsidiary, to release, all rights to all Insurance
Policies.
(c) Notwithstanding anything herein to the contrary, all proceeds paid
out to Seller or any of its Subsidiaries under Insurance Policies after the
Closing shall be for the benefit of the Company and its Subsidiaries to the
extent such proceeds are in respect of the business and operations of the
Company or one or more of its Subsidiaries arising from any event, act or
omission prior to Closing, and Seller shall cause such proceeds to be
transferred to the Company or the applicable Company Subsidiary promptly after
such proceeds are received by Seller after Closing (and in any event within five
Business Days after receipt); provided, however, that such proceeds shall be for
the benefit of, and shall be kept by, Seller and its Affiliates (other than the
Company and its Subsidiaries) to the extent such proceeds are reimbursement for
expenditures that have been made prior to Closing. If (i) the Company and the
Company Subsidiaries would be entitled to the proceeds of a claim made after
Closing under an occurrence-based Insurance Policy, (ii) Purchaser informs
Seller in a timely manner of such claim and (iii) Seller deems such claim to be
valid in its reasonable judgment and consistent with its determination of
similar claims with respect to then-existing Subsidiaries of Seller, then Seller
shall report and pursue such claim in a manner that is at least as favorable to
the claimant as the manner in which Seller reports and pursues claims by its
then-existing Subsidiaries, provided that, if the insurer disputes such claim,
then Seller shall only be required to contest such position of the insurer if
Purchaser pays the costs and expenses of litigating and contesting such position
of the insurer (without regard to the outcome of such dispute).
Section 5.13 Unclaimed Property Audit. Purchaser agrees to cooperate
and agrees to cause the Company to cooperate with Seller and any of its
employees, directors, representatives and other agents in Seller's preparation
for and response to any unclaimed property audit by any state relating to
periods prior to the Closing Date, including, but not limited to, promptly
providing copies of all reasonably requested documents and making Company
employees available during normal business hours and in a manner so as not to
interfere with Purchaser's or the Company's business to respond to inquiries of
Seller in connection with any such audit. The obligations of Purchaser under
this Section 5.13 shall survive until the expiration of the applicable state
statutes of limitation.
Section 5.14 Bank Accounts; Cash Pooling. Seller shall provide, in the
case of the Company and its Major Subsidiaries, and shall use its reasonable
best efforts to provide, in the case of Subsidiaries that are not Major
Subsidiaries, Purchaser with a complete list of each of the bank accounts of the
Company and the Company Subsidiaries and the authorized signatories for each
such account as soon as practicable before the Closing Date. The parties shall
cooperate in connection with the replacement or supplementation of such
signatories effective as of the Closing. Seller shall terminate the
participation of the Company, the Company Subsidiaries and the Minority
Subsidiaries in all cash pooling arrangements maintained by Seller or its
Affiliates (other than arrangements, if any, maintained exclusively by the
Company and Company Subsidiaries) as of the Closing.
Section 5.15 Director and Officer Resignations. To the extent requested
by Purchaser in writing before the Closing Date, Seller shall use its reasonable
best efforts to deliver to Purchaser the resignations of all members of the
boards of directors and the officers of the Company and the Company Subsidiaries
from their respective positions as directors and/or officers of such entities
immediately before the Closing.
Section 5.16 Further Assurances.
(a) From and after the Closing, each of Seller and Purchaser shall
furnish or cause to be furnished to the other party and its employees, counsel,
auditors and other representatives such information relating to periods prior to
Closing, and assistance relating to the Company and the Company Subsidiaries (to
the extent within the control of such other party) as is reasonably necessary
for financial reporting and accounting matters of the other party, including the
furnishing of such documentation and information relating to the Company and the
Company Subsidiaries as may be reasonably requested in connection with the
preparation of reports, accounts and other documents and materials to be filed
with or submitted to the SEC, the UKLA, the U.K. Financial Services Authority or
any stock exchange or in connection with any proposed capital markets offering
that would be exempt from the registration requirements of the Securities Act;
provided, however, that Seller shall indemnify and hold harmless Purchaser and
the Company with respect to the use by Seller of any information relating to the
Company and the Company Subsidiaries in connection with filings by Seller under
applicable securities laws.
(b) At any time and from time to time, each party to this Agreement
agrees, subject to the terms and conditions of this Agreement, to take such
actions and to execute and deliver such documents as may be necessary to
effectuate the purposes of this Agreement at the earliest practicable time.
(c) Seller agrees to use reasonable efforts to take such actions,
execute and deliver such documents, and otherwise cooperate with Purchaser as
may be necessary to effectuate, within 60 days after the Closing Date, the
transfer to the Company or one or more Company Subsidiaries, as designated by
Purchaser, all licenses for Computer Software used by the Company or any of the
Company Subsidiaries, including, without limitation, any enterprise licenses not
currently in the name of the Company or a Company Subsidiary. This Section
5.16(c) shall not apply to the PeopleSoft license.
Section 5.17 Restrictive Covenant. To induce Purchaser to enter into
this Agreement and purchase the Company Shares, the AISA Share and the
Intercompany Loan, Seller agrees as an independent covenant that from the
Closing Date until the date that is two years thereafter, Seller shall not and
shall not permit any of its Subsidiaries to:
(a) make aggregate expenditures during any twelve month period in
excess of $50 million for the purpose of acquiring, directly or indirectly, any
interest in a business that, when taken together with all other interests in
such business being acquired in the same and all related transactions, consists
primarily of Marketing Research. For purposes of this clause (a):
(i) a business shall be deemed to consist primarily of Marketing
Research if and only if in excess of 25% of the gross revenues of such business
for the 12 months ended on the date of the relevant acquisition(s) are directly
attributable to the conduct of Marketing Research; and
(ii) acquisitions after the date hereof by any entity that is a
Seller Minority Subsidiary as of the date hereof shall not be restricted in any
way or count toward the $50 million threshold; or
(b) solicit, induce or encourage Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx,
Xxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxxxx Factor, Xxxxxxx Xxxxx, J.R. Hall, Xxxxxxx
Xxxxxxxx, Xxxxxx Xxxxxxxx or Xxxxx Xxxxx to terminate his or her relationship
with Purchaser or any Subsidiary of Purchaser or offer employment to, or offer
to conclude any contract of services with, Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx,
Xxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxxxx Factor, Xxxxxxx Xxxxx, J.R. Hall, Xxxxxxx
Xxxxxxxx, Xxxxxx Xxxxxxxx or Xxxxx Xxxxx (but only, solely in the case of Xxxxx
Xxxxx, while she is employed by Purchaser or any Subsidiary of Purchaser);
provided that a general advertisement or disclosure of a general search that is
not targeted at any of these specified persons shall not violate this Section
5.17(b) so long as the Persons referred to in this Section 5.17(b) are not
actually hired during the two years following the Closing (other than Xxxxx
Xxxxx, as provided above).
(c) For the avoidance of doubt, nothing in Section 5.17(a) shall
prohibit Seller or any Seller Subsidiary from continuing (including by organic
growth and internal investments (such as capital expenditures)) any Marketing
Research activities or capabilities that exist, as of the date hereof, at Seller
or any existing Seller Subsidiary (other than the Company and the Company
Subsidiaries), including, without limitation, Infoplan, Inc. ("Infoplan") and
the HPI Research Group Division of Draft Worldwide Limited. Seller acknowledges
that the restrictions contained in this Section 5.17 are reasonable and
necessary to protect the legitimate interests of Purchaser, and that any
violation of this Section 5.17 will result in irreparable injury to Purchaser
and that money damages would not provide an adequate remedy to Purchaser, and,
therefore, Purchaser shall be entitled to preliminary and permanent injunctive
relief in any court of competent jurisdiction and to an equitable accounting of
all earnings, profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which Purchaser may be entitled. If any portion of the covenants or agreements
contained in this Section 5.17 or the application thereof is held to be invalid
or unenforceable, then the other portions of such covenants or agreements or the
application thereof shall not be affected and shall be given full force and
effect without regard to the invalid or unenforceable portions. If any covenant
or agreement herein is held to be unenforceable because of the area covered, the
duration thereof, or the scope thereof, then the court making such determination
shall have the power to reduce the area and/or duration and/or limit the scope
thereof, and the covenant or agreement shall then be enforceable in its reduced
form. Seller acknowledges that the restrictive covenant of this Section 5.17 has
been negotiated by the parties and that Purchaser would not have entered into
this Agreement if Seller did not agree to the restrictive covenant.
Section 5.18 Funding. Purchaser shall use commercially reasonable
efforts to cause the condition set forth in Section 6.2(d) (Funding) to be
satisfied. Without the prior written consent of Seller, prior to the
consummation of the Closing, Purchaser shall not (a) terminate the Loan
Agreement, (b) amend the Loan Agreement, (c) waive any right arising under the
Loan Agreement or (d) fail to enforce its rights under the Loan Agreement if
Purchaser has a good faith belief and understanding that such rights have been
violated, in the case of (a), (b), (c) or (d), in a way that would adversely
affect the satisfaction of any of the conditions to Closing set forth in Article
VI or Purchaser's ability to pay the Estimated Cash Purchase Price and
consummate the Closing; provided, that, if the Closing is consummated and
Purchaser satisfies all its obligations at the Closing, Seller agrees that it
shall have no rights against Purchaser (including in its capacity as shareholder
of Purchaser) under this Section 5.18.
Section 5.19 Purchaser Circular; Information Supplied.
(a) Purchaser shall, as soon as reasonably practicable and in
accordance with all applicable Laws (but in any event no later than the earlier
of (i) the Business Day immediately following the completion of the accountant's
report required for the purposes of the Purchaser Circular; and (ii) the tenth
Business Day after the date hereof), prepare and file with the UKLA a circular
to be sent to Purchaser shareholders in connection with the Purchaser
Shareholder Meeting, which such circular shall, if required under the Listing
Rules or otherwise by the UKLA, comprise listing particulars for the purposes of
section 79 of the FSMA (the "Purchaser Circular"). Purchaser shall use
reasonable efforts to obtain the UKLA's formal approval of the Purchaser
Circular in accordance with the Listing Rules as promptly as practicable after
the date of filing and shall as soon as reasonably practicable thereafter
publish the Purchaser Circular, dispatch the same to those entitled to receive
it and complete any other necessary formalities in relation to the Purchaser
Circular in accordance with all applicable Laws (for the avoidance of doubt,
Purchaser shall not in any way be mitigated from its obligations to publish and
dispatch the Purchaser Circular pursuant to this Section 5.19(a) or from any
other obligation under this Section 5.19 if the directors of Purchaser have
determined that the recommendation of its board of directors referred to in
Section 5.21 should not be given or should be withdrawn or modified). To the
extent required by the UKLA or under any applicable Laws, after the Purchaser
Circular has been so dispatched, Purchaser shall promptly circulate amended,
supplemental or supplemented materials, and to the extent required in connection
therewith, resolicit votes. Both parties shall, and shall cause their investment
bankers, accountants and other representatives to, use all reasonable efforts to
obtain formal and informal waivers from the UKLA and other relevant Governmental
Entities with respect to disclosure requirements applicable to the Purchaser
Circular that may not be readily satisfied by the parties. Seller shall, as
promptly as reasonably practicable, use all reasonable efforts to furnish
Purchaser with all requested information concerning Seller, its Affiliates,
their respective businesses and other matters, in each case to the extent
necessary and appropriate (under section 80 of the FSMA and otherwise) for the
preparation of the Purchaser Circular and any supplement or amendment thereto.
Seller shall promptly notify Purchaser in the event Seller becomes aware (i)
that any information or statement in the Purchaser Circular reflecting
information provided by Seller (and/or in relation to Seller, the Company, the
Company Subsidiaries and/or their respective businesses) is untrue or inaccurate
in any material respect or (ii) of any fact (in relation to Seller, the Company,
the Company Subsidiaries and/or their respective businesses), the omission of
which renders any such information or statement contained in the Purchaser
Circular misleading in any material respect.
(b) Seller shall have an opportunity to review in advance all written
submissions to or filings with the UKLA in connection with and including drafts
of the Purchaser Circular and to comment on the sections of such submissions or
filings that include any disclosure relating to Seller, any of its Affiliates,
their respective businesses, this Agreement or the transactions contemplated
hereby and Purchaser shall take into account the reasonable comments of Seller
in relation thereto. Except to the extent required by the UKLA, the Listing
Rules and/or any applicable Laws, Purchaser shall not include any disclosure
relating to Seller, any of its Affiliates, their respective businesses, this
Agreement or the transactions contemplated hereby in the Purchaser Circular or
any draft thereof submitted to the UKLA or any other submissions to the UKLA in
relation thereto if Seller reasonably objects to such disclosure (and Seller
agrees not to object to any such disclosures that are accurate, not misleading,
and necessary and appropriate for the publication of the Purchaser Circular
and/or to obtain the Purchaser Shareholder Approval).
Section 5.20 Purchaser Shareholder Approval; Convening of Purchaser
Shareholder Meeting. Purchaser shall use reasonable endeavors (a) to take all
actions required to obtain the Purchaser Shareholder Approval and the
satisfaction of the condition in Section 6.1(c), and (b) to convene and hold the
Purchaser Shareholder Meeting no later than the 18th calendar day after the
approval by the UKLA of the Purchaser Circular. Purchaser acknowledges that its
obligations under this Section 5.20 shall not in any way be mitigated by a
withdrawal or modification of the recommendation of its board of directors or
any decision by its board of directors not to give such recommendation. A
withdrawal or modification by Purchaser's board of directors of its
recommendation pursuant to and in accordance with Section 5.21 or any decision
by Purchaser's board of directors not to give such recommendation pursuant to
and in accordance with Section 5.21 shall not be deemed to be a breach of this
Section 5.20.
Section 5.21 Board of Directors Recommendation. Purchaser undertakes to
include in the Purchaser Circular the unanimous recommendation of its board of
directors to the shareholders of Purchaser of the approval of all resolutions
required to be passed in order for the Purchaser Shareholder Approval to be
obtained and such recommendation shall not at any time be withdrawn or adversely
modified and Purchaser shall not take or omit to take any action if taking or
omitting to take such action would lead to such a withdrawal or modification or
any decision by its board of directors not to give such recommendation and
Purchaser shall not announce its intention to make a determination not to give
or to withdraw or modify such recommendation except (i) in each case, to the
extent that the directors of Purchaser have determined in good faith that such
recommendation should not be given where to do so would be a breach of their
fiduciary duties; or (ii) in each case, to the extent that the directors of
Purchaser have determined in good faith that such recommendation should be
withdrawn or modified where not to do so would be a breach of their fiduciary
duties.
Section 5.22 Acquisition Proposal. Until the earlier of (a) Closing and
(b) the date, if any, on which the board of directors of Purchaser determines
not to give its recommendation to the shareholders of Purchaser of the approval
of all resolutions required to be passed in order for the Purchaser Shareholder
Approval to be obtained or to withdraw or modify such recommendation, or when
Purchaser has announced its intention to make such a determination, none of
Seller, any Affiliate of Seller or any officer, director or employee of, or any
investment banker, attorney, accountant or other advisor or representative of,
Seller or any Affiliate of Seller will, directly or indirectly (i) solicit,
initiate or encourage the submission of any competing offer for the purchase of
the Company or any Company Subsidiary or the purchase of all or any portion of
the securities or assets (including by merger, recapitalization, consolidation
or in any other form of transaction) of the Company or any Company Subsidiary
("Acquisition Proposal") or (ii) negotiate or otherwise respond to, other than
decline to enter into such negotiations, or furnish to any Person any non-public
information with respect to the Company or any Company Subsidiary (or take any
other action) to facilitate, any Acquisition Proposal or any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Acquisition Proposal; provided, however, that nothing in this Section
5.22 shall prohibit Seller, the Company or any Company Subsidiary from taking
any action otherwise permitted to be taken pursuant to Section 5.1(a)(viii). In
the event of any inquiry about the possibility of making an Acquisition Proposal
or Acquisition Proposal (or request for non-public information about the Company
or any Company Subsidiary by any Person who is reasonably believed by Seller to
be considering making an Acquisition Proposal), Seller shall provide prompt
written notice to Purchaser of its receipt of such inquiry, Acquisition Proposal
or request; provided, that Seller shall have no obligation to disclose to
Purchaser any terms or the identity of the inquiring party.
Section 5.23 Right of First Refusal.
(a) If, at any time prior to the first anniversary of the Closing Date,
Seller (or Seller's Affiliate which owns the stock or assets to be sold),
receives a bona fide, written offer from a third party to purchase (the
"Purchase") all or any portion of the outstanding capital stock of, or all or
any portion of the assets outside the ordinary course of business of, Infoplan
(other than an offer to purchase directly or indirectly all or substantially all
of the capital stock or assets of XxXxxx-Xxxxxxxx Worldwide's Japanese
operations), and Seller (or Seller's Affiliate which owns the stock or assets to
be sold) desires to accept such written offer (an "Offer"), then, Seller shall
promptly notify Purchaser in writing of all of the terms of the Offer, including
(i) a description of the assets or stock to be transferred, as applicable, (ii)
the identity and address of the prospective purchaser, (iii) the consideration
and the material terms and conditions upon which the proposed transfer of assets
or stock is to be made and (iv) if any part of the consideration is proposed to
be paid in kind, the aggregate fair market value of the consideration to be
delivered to Seller (or Seller's Affiliate which owns the stock or assets to be
sold) in connection with the Offer (the "Offer Notice"); provided, however, that
the foregoing shall not apply to an offer to purchase less than five percent of
Infoplan's outstanding capital stock (but only if such offer is not part of a
series of related offers to purchase more than five percent of Infoplan's
capital stock in the aggregate). The Offer Notice shall also include a copy of
any written proposal, term sheet or letter of intent or other agreement relating
to the Purchase. Upon receipt of an Offer Notice, Purchaser shall be entitled
for a period of 14 days commencing on the date it receives the Offer Notice to
deliver to Seller an irrevocable written offer to purchase Infoplan for the same
aggregate consideration, and on the same terms and subject to the same
conditions, as set forth in the Offer Notice (such notification, the
"Purchaser's Acceptance"). Following receipt of Purchaser's Acceptance, Seller
(or Seller's Affiliate which owns the stock or assets to be sold) shall within
30 Business Days of its receipt of Purchaser's Acceptance sell, or procure the
sale of, and Purchaser shall purchase, the stock or assets of Infoplan referred
to in the Offer Notice for the same aggregate consideration, and on the same
terms and subject to the same conditions as set forth in the Offer Notice,
pursuant to a written agreement containing customary warranties, covenants and
indemnities (unless the Offer Notice sets out warranties, covenants and
indemnities, in which case such warranties, covenants and indemnities shall
apply).
(b) In the event the purchase price specified in the Offer Notice shall
be payable in property other than cash or evidences of indebtedness, Purchaser
shall have the right to pay the purchase price in the form of cash equal in
amount to the value of such property. If Purchaser and Seller cannot agree on
such cash value within ten Business Days after Seller's receipt of the
Purchaser's Acceptance, the valuation shall be made by an appraiser of
recognized standing selected by Purchaser and Seller or, if they cannot agree on
an appraiser within ten Business Days after Seller's receipt of the Purchaser's
Acceptance, each shall select an appraiser of recognized standing and the two
appraisers shall designate a third appraiser of recognized standing, whose
appraisal shall be determinative of such value. The cost of such appraisal shall
be shared equally by Purchaser and Seller.
(c) If Purchaser shall fail to give the Purchaser's Acceptance pursuant
to the terms set forth above or shall otherwise fail to purchase Infoplan stock
or assets pursuant to Purchaser's Acceptance, Purchaser shall be deemed to have
irrevocably waived its right to purchase Infoplan pursuant to the terms of the
Offer and Seller or the applicable Seller's Affiliate shall have the right to
sell Infoplan upon the terms contained in the Offer to the third party making
the Offer within 180 days following the date of the Offer (or such longer period
as may be required pursuant to the agreement related to the Offer); provided,
however, that in the event Seller fails to consummate such sale contemplated by
such Offer within the specified time period, Seller shall not be permitted to
sell the stock or assets of Infoplan without again complying with this Section
5.23.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the
Closing. The obligation of each party to consummate the Closing shall be subject
to the satisfaction or waiver on or prior to the Closing Date of each of the
following conditions:
(a) Statutes; Court Orders. (i) No Law shall have been enacted or
promulgated after the date hereof by any Governmental Entity in any applicable
jurisdiction which makes the transactions contemplated hereby illegal or
otherwise prohibits the consummation of the Closing.
(ii) There shall not be in effect any temporary or permanent order
or preliminary or permanent injunction of a Governmental Entity of competent
jurisdiction in any applicable jurisdiction which precludes consummation of the
Closing.
(iii) No Governmental Entity in any applicable jurisdiction shall
have instituted an action or proceeding (which remains pending at what would
otherwise be the Closing Date) seeking to enjoin or prohibit the consummation of
the Closing.
(b) HSR and Similar Approvals. (i) The waiting period or relevant
authorization required for the consummation of the Closing under the HSR Act and
each other applicable Law relating to competition or antitrust promulgated,
enacted or enforced by a Governmental Entity in any applicable jurisdiction, if
any, shall have expired, been terminated or been obtained, as appropriate, if
the effect of consummation of the Closing before such expiration or termination,
or before obtaining such authorization, would be a violation of such Law and
(ii) in the case of the United Kingdom, no extension of the period for
consideration having been made by the U.K. Office of Fair Trading within 20
Business Days of a filing in the United Kingdom or, if such extension is made,
no indication having been received from the U.K. Office of Fair Trading within
35 Business Days of a filing in the United Kingdom that it would intend to
recommend reference of or to refer the transactions contemplated by this
Agreement to the Competition Commission in the United Kingdom.
(c) Shareholder Approval. The transactions contemplated by this
Agreement shall have been duly approved at the Purchaser Shareholder Meeting by
the Purchaser Shareholder Approval.
(d) Admission. Admission shall have occurred.
Section 6.2 Conditions to Obligations of Purchaser to Effect the
Closing. The obligation of Purchaser to consummate the Closing shall be subject
to the satisfaction or waiver on or prior to the Closing Date of each of the
following conditions:
(a) (i) The representations in Sections 3.2 (Authorization), 3.5
(Ownership and Possession of Company Shares), 3.6(a) (Capitalization), 3.9(a)
(Absence of Certain Changes) and 3.25 (Brokers and Finders) shall be accurate,
and the representations in Sections 3.3 (Execution; Validity of Agreement),
3.7(a) (Subsidiaries; Intercompany Loan) and 3.24 (No Interest) (A) shall be
accurate in all material respects, as of the Closing Date as though restated on
and as of such date or (B) if such representation, by its terms, is made as of a
date specified therein, shall be accurate in all material respects as of such
date.
(ii) In the case of each representation and warranty in Article
III other than those referred to in Section 6.2(a)(i): except for any failures
to be so accurate as have not had, and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, such
representation and warranty, without taking into account any materiality,
material adverse effect or Company Material Adverse Effect qualification
therein, either (A) shall be accurate as of the Closing Date as though restated
on and as of such date or (B) if such representation and warranty, by its terms,
is made as of a date specified therein, shall be accurate as of such date.
(b) Seller and IPG-Denmark shall have performed and complied with, in
all material respects, all agreements, covenants and obligations required by the
Transaction Documents and the AISA Share Transfer Agreement, as applicable, to
be performed or complied with by it prior to or at the Closing.
(c) Purchaser shall have received a certificate signed by a senior or
executive officer of Seller, dated the Closing Date, to the effect set forth in
clauses (a) and (b) of this Section 6.2.
(d) Purchaser shall have received at least $400 million in debt and/or
equity financing on or after the date hereof.
Section 6.3 Conditions to Obligations of Seller to Effect the Closing.
The obligation of Seller to consummate the Closing shall be subject to the
satisfaction or waiver on or prior to the Closing Date of each of the following
conditions:
(a) (i) The representations in Sections 4.2(a) (Authorization), 4.8
(Brokers and Finders), 4.9(b) (Purchaser Shares) and 4.12(a) (Absence of Certain
Changes and Events) shall be accurate, and Sections 4.2(b) (Execution; Validity
of Agreement) and 4.9(a) (Capitalization of Purchaser) (A) shall be accurate in
all material respects, as of the Closing Date as though restated on and as of
such date or (B) if such representation, by its terms, is made as of a date
specified therein, shall be accurate in all material respects as of such date.
(ii) In the case of each representation and warranty in Article IV
other than those referred to in Section 6.3(a)(i): except for any failures to be
so accurate as have not had, and would not reasonably be expected to have,
individually or in the aggregate, a Purchaser Material Adverse Effect, such
representation and warranty, without taking into account any materiality,
material adverse effect or Purchaser Material Adverse Effect qualification
therein, either (A) shall be accurate as of the Closing Date as though restated
on and as of such date or (B) if such representation and warranty, by its terms,
is made as of a date specified therein, shall be accurate as of such date.
(b) Purchaser shall have performed and complied with, in all material
respects, all agreements, covenants and obligations required by the Transaction
Documents and the AISA Share Transfer Agreement to be performed or complied with
by it prior to or at the Closing.
(c) Seller shall have received a certificate signed by a senior or
executive officer of Purchaser, dated the Closing Date, to the effect set forth
in clauses (a) and (b) of this Section 6.3.
ARTICLE VII
TERMINATION
Section 7.1 Termination. The transactions contemplated hereby may be
terminated or abandoned at any time prior to the Closing Date:
(a) By the mutual written consent of Purchaser and Seller;
(b) By either party on prior written notice to the other if any
Governmental Entity in any applicable jurisdiction shall have issued an order,
decree or ruling or taken any other action which permanently restrains, enjoins
or otherwise prohibits the consummation of the Closing and such order, decree,
ruling or other action shall have become final and non-appealable;
(c) By either party on prior written notice to the other if the Closing
shall not have occurred on or prior to the 270th day after the date hereof;
(d) By Seller on prior written notice to Purchaser if any of the
conditions set forth in Section 6.1 (other than Section 6.1(c)) or 6.3 shall
have become incapable of fulfillment with commercially reasonable efforts and
shall not have been waived by Seller;
(e) By Purchaser on prior written notice to Seller if any of the
conditions set forth in Section 6.1 (other than Section 6.1(c)) or 6.2 shall
have become incapable of fulfillment with commercially reasonable efforts and
shall not have been waived by Purchaser;
(f) By Seller on prior written notice to Purchaser if (i) all the
conditions to the obligations of Purchaser to consummate the Closing (other than
the condition specified in Section 6.2(d)) shall have been satisfied or waived
for ten consecutive Business Days (or would be satisfied or waived for ten
consecutive Business Days if the Closing were to have occurred on such Business
Days and provided that for this purpose, Section 6.2(c) shall be deemed
satisfied if Seller has delivered the certificate referred to in Section 6.2(c)
on the first of such ten consecutive Business Days incorporating a statement
that, in the absence of written notice to the contrary, such certificate may be
relied on as remaining true for the next nine Business Days, and no such written
notice has been given) and (ii) the failure of Section 6.2(d) to have been
satisfied is not due to a breach of this Agreement by Seller;
(g) By either party on prior written notice to the other if the
Purchaser Shareholder Approval shall not have been obtained at the Purchaser
Shareholder Meeting; or
(h) By Purchaser on prior written notice to Seller if in accordance
with and subject to Section 5.21, the directors of Purchaser have determined in
good faith that the recommendation of its board of directors referred to in
Section 5.21 should not be given where to do so would be a breach of their
fiduciary duties or should be withdrawn or modified where not to do so would be
a breach of their fiduciary duties.
Section 7.2 Effect of Termination. In the event of the termination of
this Agreement in accordance with Section 7.1, (a) this Agreement shall become
null and void and of no further force or effect except for Section 5.2(b) (other
than the penultimate sentence of Section 5.2(b)), Section 5.5, this Article VII
and Article X and (b) such termination shall relieve each party from all
violations of this Agreement that occurred prior to such termination other than
(i) violations that resulted in or caused the failure of the Closing to occur
and (ii) willful breaches.
Section 7.3 Termination Fee.
(a) Purchaser shall pay to Seller $4.25 million (the "Termination Fee")
in immediately available U.S. Dollar funds on the date this Agreement is
terminated if terminated by Purchaser (and such termination, if by Purchaser,
shall not be effective until the Termination Fee is paid in full), or within
five Business Days after the date this Agreement is terminated if terminated by
Seller, in the event that this Agreement is terminated:
(i) By Seller pursuant to Section 7.1(f);
(ii) By Purchaser pursuant to Section 7.1(h);
(iii) By either Seller or Purchaser pursuant to Section 7.1(g);
(iv) By either Seller or Purchaser pursuant to Section 7.1(c) if
Section 6.1(c) has not been satisfied at the time of such termination;
(v) By Purchaser pursuant to Section 7.1(e) as a result of the
condition in Section 6.2(d) having become incapable of fulfillment and not
having been waived by Purchaser, so long as such incapability is not due to a
breach of this Agreement by Seller;
(vi) By Purchaser for any reason at a time when Seller has the
right to terminate pursuant to Section 7.1(f) but has not yet exercised such
right; or
(vii) By either Seller or Purchaser for any reason if either (A)
the directors of Purchaser have determined for any reason (whether or not in
accordance with their fiduciary duties or pursuant to the provisions of this
Agreement) that the recommendation of its board of directors referred to in
Section 5.21 shall not be given or shall be withdrawn or modified or (B) if
Purchaser has made an announcement of its intent to make such a determination.
(b) Purchaser acknowledges that the agreements contained in this
Section 7.3 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Seller would not have entered
into this Agreement.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnification; Remedies.
(a) After the Closing, Seller shall indemnify, defend and hold harmless
Purchaser from and against all Losses incurred by Purchaser, its Subsidiaries
and the respective officers and directors of Purchaser and its Subsidiaries
(including the Company and the Company Subsidiaries after the Closing)
("Purchaser Indemnified Persons") that arise out of or are based upon (i) any
breach by Seller of any of Seller's representations and warranties contained in
this Agreement as restated on and as of the Closing Date as though made on and
as of the Closing Date with respect to the circumstances then prevailing (except
for representations and warranties made as of a specified date, which are
restated only on and as of the specified date) or in any certificate delivered
by Seller at the Closing pursuant to Section 6.2(c), (ii) any breach by Seller
of its covenants contained in this Agreement, or (iii) any Plan maintained by,
sponsored by or contributed to by Seller or any ERISA Affiliate of Seller or for
which Seller or any ERISA Affiliate of Seller is contingently or directly liable
on and after the Closing and, in each case, which Losses do not relate to
employees or former employees of the Company or the Company Subsidiaries or (iv)
any Taxes allocated to Seller pursuant to Section 5.4(a) of this Agreement
whether or not liability for such Taxes is described in the Seller Disclosure
Schedule or gives rise to a breach.
(b) Seller's indemnification obligation under Section 8.1(a) shall be
subject to each of the following limitations:
(i) With respect to indemnification for Losses arising out of or
relating to any breaches of any representation or warranty by Seller in this
Agreement as restated on and as of the Closing Date as though made on and as of
the Closing Date with respect to the circumstances then prevailing (except for
representations and warranties made as of a specified date, which are restated
only on and as of the specified date) or in the certificate delivered by Seller
at the Closing pursuant to Section 6.2(c) or any breach of any covenant by
Seller at or before the Closing, such obligation to indemnify shall terminate on
February 28, 2005 (except, to the extent relating to a Carve-out Subsidiary, if
any, such date shall be the date that is a number of days after February 28,
2005 equal to the number of days after the Closing Date on which the Secondary
Closing relating to such Carve-out Subsidiary occurs), unless before such date
Purchaser has provided Seller with an applicable Claim Notice, except that (A)
the obligation to indemnify for a breach of any representation or warranty by
Seller contained in Sections 3.15 (Environmental Matters), 3.17 (Employee
Benefit Plans), and 3.21 (Absence of Questionable Payments) or to indemnify for
Taxes as set forth in Section 8.1(a)(iv) shall terminate 60 days after the
expiration of the latest of all applicable statutes of limitation for which a
claim may be made by a third party (including any taxing authority or other
Governmental Entity (federal, state, local or foreign) with respect to which the
Company either pays Taxes or files Tax Returns or should have paid Taxes or
filed Tax Returns), (B) there shall be no termination of such obligations with
respect to Sections 3.1 (Organization), 3.2 (Authorization), 3.3 (Execution;
Validity of Agreement), 3.5 (Ownership and Possession of Company Shares), 3.6(a)
(Capitalization), 3.7(a), (c), (d) and (e) (Subsidiaries; Intercompany Loan) and
3.25 (Brokers or Finders) and (C) the obligation to indemnify for any breach of
any covenant by Seller, the performance of which is due after Closing, shall
terminate 18 months after the last performance was due.
(ii) Except with respect to any breach of Article I or II or
Section 3.7(a) (Subsidiaries; Intercompany Loan) (but only in relation to the
capital stock of Infratest Xxxxx Aktiengesellschaft Holding or any ownership
interest in any entity succeeding to all or substantially all of the assets and
liabilities of Infratest Xxxxx Aktiengesellschaft Holding), 5.6 (Employees;
Employee Benefits), 5.8 (Intercompany Arrangements), 5.12(c) (Insurance
Policies) or 5.17 (Restrictive Covenant) and except with respect to obligations
to indemnify for Taxes pursuant to Section 8.1(a)(iv), there shall be no
obligation to indemnify under Section 8.1(a) unless and until the aggregate of
all Losses (other than those arising under the provisions excepted in the
introduction to this clause (ii)) for which Seller, but for this clause (ii),
would be liable under Section 8.1(a) exceeds on a cumulative basis an amount
equal to $8.5 million (the "Threshold"), in which case Seller shall be obligated
to indemnify under Section 8.1(a) for the whole amount of such Losses and not
merely for the excess over the Threshold;
(iii) Except with respect to any breach of Article I or II or
Section 5.6 (Employees; Employee Benefits), 5.8 (Intercompany Arrangements),
5.12(c) (Insurance Policies) or 5.17 (Restrictive Covenant) and except with
respect to obligations to indemnify for Taxes pursuant to Section 8.1(a)(iv),
there shall be no obligation to indemnify under Section 8.1(a) for any item
where the Losses relating thereto are less than $100,000 (it being understood
that such items shall not be aggregated for purposes of the immediately
preceding clause (ii));
(iv) There shall be no obligation to indemnify under Section
8.1(a) to the extent the Losses arise out of or relate to any breaches of
representations or warranties by Seller in this Agreement or any breaches of
covenants in this Agreement by Seller before the Closing that relate to any
obligations to cause the Closing to occur and the Closing conditions to be
satisfied for any amount, in the aggregate, in excess of $75 million, except
that there shall be no limitation on the amount of the indemnification
obligation for any breach or alleged breach of Section 3.1 (Organization), 3.2
(Authorization), 3.3 (Execution; Validity of Agreement), 3.5 (Ownership and
Possession of Company Shares), 3.6(a) (Capitalization), 3.7(a), (c), (d) and (e)
(Subsidiaries; Intercompany Loan), 3.25 (Brokers or Finders) or 3.26
(Reorganizations) and there shall be no such limitation with respect to
obligations to indemnify for Taxes pursuant to Section 8.1(a)(iv);
(v) There shall be no obligation to indemnify under Section 8.1(a)
to the extent the Loss arises solely as a result of any action taken or omitted
to be taken by Purchaser or any of its Affiliates (including the Company or any
Company Subsidiary after the Closing);
(vi) There shall be no obligation to indemnify under Section
8.1(a) to the extent that any claim for indemnification is for an amount that
has been reserved or accrued as specifically reflected or included in the
Company Financial Statements, except (subject to the existence of a breach of a
representation or warranty and subject to this Article VIII) to the extent the
reserve or accrual is not adequate;
(vii) Each Loss shall be reduced by (A) the amount of any
insurance proceeds paid to Purchaser or any Purchaser Indemnified Person with
respect to such Loss, (B) any indemnity, contribution or other similar payment
paid to Purchaser or any Purchaser Indemnified Person by any third party with
respect to such Loss and (C) an amount equal to any net reduction of income
Taxes attributable to such Loss;
(viii) Any obligation to indemnify under Section 8.1(a) for Taxes
imposed on an entity shall not exceed the amount of Taxes that would have been
payable by that entity only after the maximum use (without double counting) of
any net operating losses, tax credits or other tax attributes that were
available for potential use by the entity as of the Closing Date with respect to
periods ending on or before the Closing Date; and
(ix) Notwithstanding Section 2.2(e) or (f), there shall be no
obligation to indemnify under Section 8.1(a) for any Tax liability to the extent
such liability is included in the Closing Statement.
(c) After the Closing, Purchaser shall indemnify, defend and hold
harmless Seller from and against all Losses incurred by Seller, its Subsidiaries
and the respective directors and officers of Seller and its Subsidiaries (each a
"Seller Indemnified Person") that arise out of or are based upon (i) any breach
by Purchaser of any of Purchaser's representations and warranties contained in
this Agreement as restated on and as of the Closing Date as though made on and
as of the Closing Date with respect to the circumstances then prevailing (except
for representations and warranties made as of a specified date, which are
restated only on and as of the specified date) or in any certificate delivered
by Purchaser at the Closing pursuant to Section 6.3(c), (ii) any breach by
Purchaser of its covenants contained in this Agreement and (iii) any Taxes
allocated to the account of Purchaser under Section 5.4(a) of this Agreement.
(d) Purchaser's indemnification obligation under Section 8.1(c) shall
be subject to each of the following limitations:
(i) With respect to indemnification for Losses arising out of or
relating to any breaches of any representation or warranty by Purchaser in this
Agreement as restated on and as of the Closing Date as though made on and as of
the Closing Date with respect to the circumstances then prevailing (except for
representations and warranties made as of a specified date, which are restated
only on and as of the specified date) or in the certificate delivered by
Purchaser at the Closing pursuant to Section 6.3(c) or any breach of any
covenant by Purchaser at or before the Closing, such obligation to indemnify
shall terminate on February 28, 2005, unless before such date Seller has
provided Purchaser with an applicable Claim Notice, except that (A) there shall
be no termination of such obligations with respect to Sections 4.1
(Organization), 4.2 (Authorization; Validity of Agreement) and 4.8 (Brokers or
Finders) and (B) the obligation to indemnify for any breach of any covenant by
Purchaser, the performance of which is due after Closing, shall terminate 18
months after the last performance was due.
(ii) Except with respect to any breach of Article I or II or
Section 5.6 (Employees; Employee Benefits), 5.9 (Treatment of Seller Guaranties;
AISA Shareholder Rights) or 5.12 (Insurance Policies) and except for any
obligation to indemnify for Taxes pursuant to Section 8.1(c)(iii), there shall
be no obligation to indemnify under Section 8.1(c) unless and until the
aggregate of all Losses (other than those arising under the provisions excepted
in the introduction to this clause (ii)) for which Seller, but for this clause
(ii), would be liable under Section 8.1(c) exceeds the Threshold on a cumulative
basis, and once such aggregate Losses exceeds the Threshold, Purchaser shall
indemnify Seller under Section 8.1(c) for the whole amount of such Losses and
not merely for the excess over the Threshold;
(iii) Except with respect to any breach of Article I or II or
Section 5.6 (Employees; Employee Benefits), 5.9 (Treatment of Seller Guaranties;
AISA Shareholder Rights) or 5.12 (Insurance Policies) and except for any
obligation to indemnify for Taxes pursuant to Section 8.1(c)(iii), there shall
be no obligation to indemnify under Section 8.1(c) for any item where the Losses
relating thereto are less than $100,000 (it being understood that such items
shall not be aggregated for purposes of the immediately preceding clause (ii));
(iv) There shall be no obligation to indemnify under Section
8.1(c) (to the extent the Losses arise out of or relate to any breaches of
representations or warranties by Purchaser in this Agreement or any breaches of
covenants in this Agreement by Purchaser before the Closing that relate to any
obligations to cause the Closing to occur or the Closing conditions to be
satisfied) for any amount, in the aggregate, in excess of $75 million, except
that there shall be no limitation on the amount of the indemnification
obligation for any breach or alleged breach of Section 4.1 (Organization),
4.2(a) (Authorization) or 4.8 (Brokers or Finders), and there shall be no such
limitation with respect to obligations to indemnify for Taxes pursuant to
Section 8.1(c)(iii);
(v) There shall be no obligation to indemnify under Section 8.1(c)
to the extent the Loss arises solely as a result of any action taken or omitted
to be taken by Seller or any of its Affiliates;
(vi) There shall be no obligation to indemnify under Section
8.1(c) to the extent that any claim for indemnification is for an amount that
has been reserved or accrued as specifically reflected or included in the
Purchaser Financial Statements, except (subject to the existence of a breach of
a representation or warranty and subject to this Article VIII) to the extent the
reserve or accrual is not adequate; and
(vii) Each Loss shall be reduced by (A) the amount of any
insurance proceeds paid to Seller or any Seller Indemnified Person with respect
to such Loss, (B) any indemnity, contribution or other similar payment paid to
Seller or any Seller Indemnified Person by any third party with respect to such
Loss and (C) an amount equal to any net reduction of income Taxes attributable
to such Loss.
(e) A breach of any representation, warranty, covenant or agreement
contained in this Agreement prior to the Closing shall survive the Closing even
if such breach is known to the non-breaching party and shall not be deemed
waived and the party having breached or allegedly breached such representation,
warranty, covenant or agreement shall continue to be liable or responsible for
such breach or alleged breach notwithstanding the consummation of the Closing or
the non-breaching party's prior knowledge; provided, however, that in the event
either Purchaser or Seller becomes aware (to Purchaser's Knowledge or Seller's
Knowledge, as applicable) of any breach or alleged breach by the other of a
representation, warranty, covenant or agreement contained in this Agreement
prior to the Closing as to which Purchaser or Seller, as applicable, has decided
that it will bring a claim under this Article VIII following Closing, Purchaser
or Seller, as applicable, shall promptly notify the other before the Closing of
such breach or alleged breach (it being understood that a formal corporate
approval need not be required to evidence such a decision).
Section 8.2 Notice of Claim; Defense.
(a) If (i) any third-party institutes or asserts any claim, demand,
investigation, audit in respect of Tax liability, action or proceeding (each of
the foregoing, a "Proceeding") that may give rise to Losses for which a party
(an "Indemnifying Party") may be liable for indemnification under this Article
VIII (a "Third-party Claim") or (ii) any Person entitled to indemnification
under this Agreement (an "Indemnified Party") shall have a claim to be
indemnified by an Indemnifying Party that does not involve a Third-party Claim,
then, in case of clause (i) or (ii), the Indemnified Party shall promptly send
to the Indemnifying Party a written notice specifying the nature of such claim
and the amount of all related Liabilities (a "Claim Notice"). The Indemnifying
Party shall be relieved of its indemnification obligations under this Article
VIII to the extent that it is prejudiced by the failure of the Indemnified
Parties to provide a timely and adequate Claim Notice.
(b) In the event of a Third-party Claim, the Indemnifying Party may
elect to retain counsel of its choice, reasonably acceptable to the relevant
Indemnified Parties, to represent such Indemnified Parties in connection with
such Proceeding and shall pay the fees, charges and disbursements of such
counsel. The Indemnified Parties may participate, at their own expense and
through legal counsel of their choice, in any such Proceeding, provided that (i)
the Indemnifying Party may elect to control the defense of the Indemnified
Parties in connection with such Proceeding and (ii) the Indemnified Parties and
their counsel shall cooperate with the Indemnifying Party and its counsel in
connection with such Proceeding. The Indemnifying Party shall not settle any
such Proceeding without the relevant Indemnified Parties' prior written consent
(which shall not be unreasonably withheld), unless the terms of such settlement
provide for no relief other than the payment of monetary damages.
Notwithstanding the foregoing, if the Indemnifying Party elects not to retain
counsel and assume control of such defense (or fails to give reasonably prompt
notice of its intention to do so) or if both the Indemnifying Party and any
Indemnified Party are parties to or subjects of such Proceeding and conflicts of
interests exist between the Indemnifying Party and such Indemnified Party, then
the Indemnified Parties shall retain counsel reasonably acceptable to the
Indemnifying Party in connection with such Proceeding and assume control of the
defense in connection with such Proceeding, and the fees, charges and
disbursements of no more than one such counsel per jurisdiction selected by the
Indemnified Parties shall be reimbursed by the Indemnifying Party. Under no
circumstances will the Indemnifying Party have any liability in connection with
any settlement of any Proceeding that is entered into without its prior written
consent (which shall not be unreasonably withheld).
(c) From and after the delivery of a Claim Notice, at the reasonable
request of the Indemnifying Party, each Indemnified Party shall grant the
Indemnifying Party and its counsel, experts and representatives full access,
during normal business hours, to the books, records, personnel and properties of
the Indemnified Party to the extent reasonably related to the Claim Notice at no
cost to the Indemnifying Party (other than for reasonable out-of-pocket expenses
of the Indemnified Parties).
Section 8.3 Tax Effect of Indemnification Payments. All indemnity
payments made pursuant to this Article VIII shall be treated for all Tax
purposes as adjustments to the consideration paid with respect to the Company
Shares, the AISA Share, the Intercompany Loan and, if applicable, the Finnish
Shares.
Section 8.4 No Duplication; Exclusive Remedy.
(a) Any liability for indemnification hereunder shall be determined
without duplication of recovery by reason of the state of facts giving rise to
such liability constituting a breach of more than one representation, warranty,
covenant or agreement.
(b) From and after the Closing, the exclusive remedy of each party in
connection with this Agreement and the transactions contemplated hereby (whether
under this contract or arising under common law or any other Law) shall be as
provided in this Article VIII, except as otherwise specified in Section 2.2
(Post-Closing Adjustment), Section 5.17 (Restrictive Covenant) or Section 10.8
(Compulsory Mediation) and except for common law fraud claims.
Section 8.5 Limitation on Set Off. (a) Neither Purchaser nor Seller
shall have any right to setoff any unresolved indemnification claim pursuant to
this Article VIII against any payment due pursuant to Article I or II.
(b) Purchaser's obligations under Section 1.2(a)(iii) shall not be
subject to set off, defense or counterclaim except with respect to judgments by
a court in favor of Purchaser and against Seller in respect of any Transaction
Document or the AISA Share Transfer Agreement that are not subject to appeal or
which Seller has acknowledged in writing it is not going to appeal and except
with respect to any amounts owing by Seller to Purchaser upon final resolution
of the Closing Statement under Section 2.2 (it being understood that the
determination by the Accounting Arbitrator in accordance with Section 2.2 shall
be deemed to constitute such final resolution).
Section 8.6 Mitigation. Purchaser and Seller shall cooperate with each
other with respect to resolving any claim or liability with respect to which one
party is obligated to indemnify the other party under this Article VIII,
including by making commercially reasonable efforts to mitigate, whether by
seeking claims against a third party, an insurer or otherwise, and to resolve
any such claim or liability.
Section 8.7 Potential Contributors. If an Indemnified Party receives
any payment from an Indemnifying Party in respect of Losses and the Indemnified
Party could have recovered all or a part of such Losses from a third party based
on the underlying claim or demand asserted against such Indemnifying Party, then
such Indemnified Party shall transfer such of its rights to proceed against such
third party as are necessary to permit such Indemnifying Party to recover from
such third party the amount of such payment.
Section 8.8 Payments. Any indemnification obligations hereunder shall
be paid to the Person entitled thereto within 10 Business Days following the
establishment of the Losses and the validity of the claim. Any amount not paid
when payable pursuant to this Article VIII shall bear interest at an annual rate
equal to the Prime Rate plus 3% regardless of (and instead of) the applicable
judicial rate of interest, if any.
ARTICLE IX
DEFINITIONS AND INTERPRETATION
Section 9.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context clearly requires otherwise:
"AAA" shall have the meaning set forth in Section 10.8(a).
"Accounting Arbitrator" shall have the meaning set forth in
Section 2.2(d).
"Acquisition Proposal" shall have the meaning set forth in Section
5.22.
"Admission" shall mean the admission of the Purchaser Shares to
the Official List and to trading on the London Stock Exchange's market for
listed securities.
"Adverse Claims" shall have the meaning set forth in Section
3.19(a).
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
Exchange Act.
"Agreement" or "this Agreement" shall mean this Stock Purchase
Agreement, including all of the schedules, including the Seller Disclosure
Schedule, and exhibits hereto.
"AISA" shall have the meaning set forth in the recitals.
"AISA Assignment Agreement" shall have the meaning set forth in
Section 5.9(b).
"AISA Companies" shall have the meaning set forth in Section
2.1(c).
"AISA Share" shall have the meaning set forth in the recitals.
"AISA Shareholder Arrangement" shall have the meaning set forth in
Section 5.9(b).
"AISA Share Transfer Agreement" shall have the meaning set forth
in Section 2.1(b)(i).
"Audits" shall have the meaning set forth in Section 3.18(c).
"Base Cash Purchase Price" shall have the meaning set forth in
Section 1.2(a).
"Business Day" shall mean a day other than Saturday, Sunday or any
day on which the principal commercial banks located in the State of New York or
London, England are authorized or obligated to close under the laws of such
state.
"Breach Item" shall have the meaning set forth in Section 2.2(f).
"Carve-out Amount" shall have the meaning set forth in Section
2.1(c)(i).
"Carve-out Event" shall have the meaning set forth in Section
2.1(c).
"Carve-out Subsidiary" shall have the meaning set forth in Section
2.1(c).
"Cash Purchase Price" shall have the meaning set forth in Section
1.2(a).
"CASRO" shall mean the Council of American Survey Research
Organizations.
"Claim Notice" shall have the meaning set forth in Section 8.2(a).
"Closing" shall mean the closing referred to in Section 2.1.
"Closing Date" shall mean the date on which the Closing occurs.
"Closing Net Indebtedness" shall mean the amount, as of the
Closing Date (after taking into account any reductions of Indebtedness caused by
Seller concurrent with the Closing), equal to Indebtedness less the "cash and
cash equivalents" (determined on the same basis as such line item was determined
in the Company Financial Statements) of the Company and the Company Subsidiaries
that are in accounts controlled by the Company or any of the Company
Subsidiaries on the opening of the Closing Date and are not in an account
controlled by Seller.
"Closing Statement" shall have the meaning set forth in Section
2.2(a).
"Closing Working Capital" shall have the meaning set forth in
Section 2.2(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Companies Act" means the U.K. Companies Act of 1985, as amended
from time to time.
"Company" shall have the meaning set forth in the opening
paragraph.
"Company Balance Sheet Date" shall mean the date of the balance
sheet included in the Company Financial Statements.
"Company Financial Statements" shall mean the audited consolidated
balance sheet of the Company and the Company's consolidated Subsidiaries as at
December 31, 2002 together with the audited consolidated statement of income and
cash flows for the year ended December 31, 2002.
"Company Intellectual Property" shall mean all Intellectual
Property that is owned by or used in the business of the Company or any Company
Subsidiary.
"Company Material Adverse Effect" shall mean any material adverse
effect on the business, financial condition or results of operations of the
Company and all of the Company Subsidiaries, taken as a whole; provided,
however, that the effects of events, changes and circumstances relating to (a)
the industries and markets in which the Company operates, (b) macroeconomic
factors, interest rates, general financial market conditions, war, terrorism or
hostilities, (c) changes in Law, generally accepted accounting principles or
official interpretations of the foregoing, or (d) compliance with Section 5.1 of
this Agreement or the public announcement of this Agreement, shall not be
considered when determining if a Company Material Adverse Effect has occurred.
"Company Shares" shall mean the outstanding shares of common
stock, par value $0.01 per share, issued by the Company, being all of the issued
and outstanding capital stock of the Company.
"Company Subsidiary" shall mean each Subsidiary of the Company, as
well as AISA and its Subsidiaries and IX, LLC.
"Computer Software" shall mean computer software programs,
databases and all documentation related thereto.
"Confidentiality Agreement" shall mean, collectively, the letter
agreements dated January 20, 2003, April 21, 2003 and May 9, 2003 (together with
the letter agreement dated May 5, 2003) in each case between Seller and
Purchaser.
"Contracts" shall have the meaning set forth in Section 3.12(a).
"COPPA" shall mean the Children's Online Privacy Protection Act.
"COPPA Laws" shall have the meaning set forth in Section 3.23(a).
"Copyrights" shall mean U.S. and foreign registered and
unregistered copyrights (including those in Computer Software and databases),
rights of publicity and all registrations and applications in any jurisdiction
to register the same.
"Covered Employees" shall mean Retained Employees and any former
employee of the Company or any Company Subsidiary.
"Dispute" shall have the meaning set forth in Section 10.8(a).
"Dispute Notice" shall have the meaning set forth in Section
10.8(a).
"Early TS Termination Date" shall have the meaning set forth in
Section 5.6(i).
"Employer Stock" shall have the meaning set forth in Section
3.17(q).
"Encumbrances" shall mean any and all liens, charges, security
interests, options, puts, claims, mortgages, pledges, proxies, voting trusts or
agreements, obligations, limitations, understandings or arrangements,
restrictions or other encumbrances of any kind or nature whatsoever.
"Environmental Law" shall mean all U.S. (federal, state or local)
and foreign Laws governing pollution or the protection of the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, that together with the Company would be deemed a "single employer"
(a) for purposes of the definition of Plan as used in Section 3.17(a), within
the meaning of Section 4001(b) of ERISA; and (b) for all other purposes of this
Agreement, within the meaning of Section 4001(b) of ERISA, and Sections 414(b),
(c), (m) and (o) of the Code.
"ESOMAR" shall mean the European Society for Opinion and Marketing
Research.
"Estimated Carve-out Purchase Price" shall have the meaning set
forth in Section 2.1(c)(vi).
"Estimated Cash Purchase Price" shall have the meaning set forth
in Section 1.2(d).
"Estimated Closing Net Indebtedness" shall have the meaning set
forth in Section 1.2(c).
"Estimated Closing Working Capital" shall have the meaning set
forth in Section 1.2(c).
"EU Data Privacy Act" shall mean the E.U. Data Protection
Directive of 1995.
"Evaluation Material" shall have the meaning assigned to such term
in the Confidentiality Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exempt Placement" shall have the meaning set forth in Section
1.2(g)(ii).
"Finnish Shares" shall have the meaning set forth in Section
2.1(c)(v).
"FSMA" shall mean the U.K. Financial Services and Xxxxxx Xxx 0000,
as amended from time to time.
"GAAP" shall mean generally accepted accounting principles.
"GLB" shall mean the Xxxxx-Xxxxx Xxxxxx Act.
"Governmental Entity" shall mean a court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency or stock exchange or listing authority (including, without
limitation, any supranational commission or authority).
"Hardware" shall have the meaning set forth in Section 3.19(b).
"Hazardous Substance" shall have the meaning set forth in Section
3.15.
"HIPAA" shall have the meaning set forth in Section 3.17(l).
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Indebtedness" shall mean, without double counting, (a) the
indebtedness of the Company and the Company Subsidiaries for borrowed money owed
to third parties, (b) accrued interest payable by the Company and the Company
Subsidiaries on the indebtedness under clause (a), (c) the obligations of the
Company and the Company Subsidiaries under capitalized leases and (d) all
amounts payable to third parties in connection with or on account of
Indebtedness referred to in clause (a) or (b) due to it being paid prior to its
due date, including, prepayment fees, break fees, make-whole provisions and
expenses of the third parties due on account of such prepayment; provided that
in no event shall Indebtedness include any amount that is included in the
Closing Working Capital or the amounts owing under the Intercompany Loan.
"Indemnified Party" shall have the meaning set forth in Section
8.2(a).
"Indemnifying Party" shall have the meaning set forth in Section
8.2(a).
"Infoplan" shall have the meaning set forth in Section 5.17(c).
"Initial Transfer Date" shall have the meaning set forth in
Section 5.6(h).
"Insight Documents" shall have the meaning set forth in Section
3.22.
"Insolvency Act" shall mean the U.K. Insolvency Act of 1986, as
amended from time to time.
"Insurance Policy" shall mean any insurance policy maintained by
Seller or any of its Affiliates (other than the Company or any Company
Subsidiary ).
"Intellectual Property" shall mean all of the following:
Trademarks, Patents, Copyrights, Trade Secrets, Licenses, all worldwide web
addresses, Internet domain name registrations and databases.
"Intercompany Accounts" shall mean all balances related to
indebtedness, including any intercompany indebtedness, loan, guaranty,
receivable, payable or other account (other than trade payables and receivables,
including those that arise from the arrangements described in Section 5.8 of the
Seller Disclosure Schedule) between Seller and its Subsidiaries (other than the
Company and its Subsidiaries) on the one hand, and the Company and its
Subsidiaries, on the other hand.
"Intercompany Loan" shall mean the loan by Seller to the Company
with an aggregate principal amount of $127 million, together with interest
accrued thereon to the Closing Date.
"Interest" shall have the meaning assigned to such term in the
Relationship Agreement.
"Interim Period" shall have the meaning set forth in Section
5.4(a)(ii).
"IPG-Denmark" shall have the meaning set forth in the recitals.
"IRS" shall mean the United States Internal Revenue Service.
"IX, LLC" shall have the meaning set forth in Section 3.22.
"Knowledge of Purchaser" shall mean the actual (and not
constructive or imputed) knowledge, after due inquiry, of X. X. Xxxxxxx, Xxxxxxx
Xxxxxxx, Xxxxx X. Xxxxxx and Xxxx Xxxxxx.
"Knowledge of Seller" shall mean the actual (and not constructive
or imputed) knowledge, after due inquiry, of Xxxxxxxx X. Camera, Xxxxxxxx
Xxxxxx, Xxx Xxxxxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, Xxxxx Xxxxx, Xxx
Xxxxxxx, Xxxxx Xxxxxxx, Xxxxxxx Factor, Xxxxxxx Xxxxx, J.R. Hall, Xxxxxxx
Xxxxxxxx and Xxxxxx Xxxxxxxx.
"Law" shall have the meaning set forth in Section 3.4.
"Leased Properties" shall have the meaning set forth in Section
3.11.
"Lenders" shall have the meaning set forth in Section 4.5(a).
"Licenses" shall mean all licenses and agreements pursuant to
which the Company or any Company Subsidiary has acquired rights in or to any
Intellectual Property, or licenses and agreements pursuant to which the Company
or any Company Subsidiary has licensed or transferred the right to use any of
the foregoing.
"Listing Rules" shall mean the rules of the UKLA covering
admission to the Official List.
"Loan Agreement" shall have the meaning set forth in Section
4.5(a).
"London Stock Exchange" shall mean London Stock Exchange plc.
"Losses" shall mean any and all actual losses, liabilities,
damages, judgments, settlements and expenses (including interest and penalties
recovered by a third party with respect thereto and reasonable attorneys' fees
and expenses).
"Major Subsidiary" shall mean, with respect to the Company, any of
AISA or a direct or indirect Subsidiary which conducts business in North
America, the United Kingdom, France, Italy, Australia, New Zealand, any of the
Scandinavian countries or Germany.
"Marketing Research" shall mean marketing research activities that
are substantially similar to and competitive with the business, as currently
conducted by the Company and the Company Subsidiaries, which activities relate
to the provision of marketing information services (both custom and syndicated),
opinion and political polling, data collection services and the production of
reports and databases from the data collected (but not the exploitation or use
of any such data for marketing or other purposes other than the analysis thereof
and reporting thereon), and other custom and syndicated marketing research
services that identify and measure beliefs, attitudes and behavior.
"Master Investors Rights Agreement" shall have the meaning set
forth in Section 3.22.
"Measuring Period" shall mean the 60-calendar day period that ends
on the 30th calendar day following the first anniversary of the Closing Date.
"Mergers" shall have the meaning set forth in Section 3.22.
"Minority Subsidiary" shall mean, with respect to the Company, any
corporation or other organization, whether incorporated or unincorporated, of
which at least 20 percent of the outstanding voting stock or other equity
interest entitled ordinarily to vote in the election of the directors or other
governing body (however designated) of such corporation or organization is at
the time directly or indirectly owned or controlled by the Company or by any one
or more of its wholly owned Subsidiaries, but shall not include any Company
Subsidiary.
"Offer" shall have the meaning set forth in Section 5.23(a).
"Offer Notice" shall have the meaning set forth in Section
5.23(a).
"Official List" shall mean the Official List maintained by the
UKLA pursuant to Part VI of FSMA.
"Panels" shall have the meaning set forth in Section 3.23(b).
"Patents" shall mean issued U.S. and foreign patents and pending
patent applications, patent disclosures, and any and all divisions,
continuations, continuations-in-part, reissues, reexaminations, and extensions
thereof, any counterparts claiming priority therefrom, utility models, patents
of importation/confirmation, certificates of invention and similar statutory
rights.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permit" shall have the meaning set forth in Section 3.16.
"Permitted Encumbrances" shall have the meaning set forth in
Section 3.10(a).
"Person" shall mean a natural person, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Entity or other entity
or organization.
"Placement Agreement" shall mean the placing agreement between
Purchaser, Deutsche Bank AG London and Cazenove & Co. Limited, dated as of the
date of this Agreement, in relation to the Placement of certain Purchaser
Ordinary Shares.
"Plan" shall mean each deferred compensation and each incentive
compensation, stock purchase, stock option and other equity compensation plan,
program, agreement or arrangement; each severance or termination pay, medical,
surgical, hospitalization, life insurance and other "welfare" plan, fund or
program (within the meaning of Section 3(1) of ERISA); each profit-sharing,
stock bonus or other "pension" plan, fund or program (within the meaning of
Section 3(2) of ERISA); each employment, termination, change of control or
severance agreement; each benefit for terminated and retired employees and
directors; each retiree life and retiree medical benefit; each material
perquisite and each other employee benefit plan, fund, program, agreement or
arrangement, including without limitation any scheme, arrangement or
understanding (whether contractual or not) maintained outside the United States
(other than any mandatory social security pension plan operated under public
law, statute or regulation in the relevant jurisdiction), providing Retirement
Benefits, in each case, that is sponsored, maintained or contributed to or
required to be contributed to by the Company, by any Company Subsidiary or by
any ERISA Affiliate, or to which the Company, a Company Subsidiary or an ERISA
Affiliate is liable for or is a party, whether written or oral, for the benefit
of any director, employee or former employee of the Company or any Company
Subsidiary.
"Prime Rate" shall mean the prime rate as announced from time to
time by Citibank, N.A. or its successor, with changes in the Prime Rate being
effective on the date of such change.
"Proceeding" shall have the meaning set forth in Section 8.2(a).
"Purchase" shall have the meaning set forth in Section 5.23(a).
"Purchase Price" shall have the meaning set forth in Section
1.2(a).
"Purchaser" shall have the meaning set forth in the opening
paragraph.
"Purchaser 125 Plan" shall have the meaning set forth in Section
5.6(i).
"Purchaser Balance Sheet Date" shall mean the date of the balance
sheet included in the Purchaser Financial Statements.
"Purchaser Circular" shall have the meaning set forth in Section
5.19(a).
"Purchaser Daily Price" shall mean, for any Trading Day, the
closing middle market quotation of a Purchaser Ordinary Share as derived from
the daily official list of the London Stock Exchange for such Trading Day.
"Purchaser DC Plans" shall have the meaning set forth in Section
5.6(h).
"Purchaser Financial Statements" shall mean the consolidated
balance sheet of the Purchaser and its consolidated subsidiaries as at December
31, 2002 together with consolidated profit and loss accounts and statements of
cash flows for the year ended December 31, 2002.
"Purchaser Indemnified Persons" shall have meaning set forth in
Section 8.1(a).
"Purchaser Material Adverse Effect" shall mean any material
adverse effect on the business, financial condition or results of operations of
the Purchaser and all of its Subsidiaries, taken as a whole; provided, however,
that the effects of events, changes and circumstances relating to (a) the
industries and markets in which the Purchaser operates, (b) macroeconomic
factors, interest rates, general financial market conditions, war, terrorism or
hostilities, (c) changes in Law, generally accepted accounting principles or
official interpretations of the foregoing or (d) compliance with Section 5.1 of
this Agreement or the public announcement of this Agreement, shall not be
considered when determining if a Purchaser Material Adverse Effect has occurred.
"Purchaser Ordinary Shares" shall have the meaning set forth in
Section 4.9(a).
"Purchaser Shareholder Approval" shall have the meaning set forth
in Section 4.13(a)
"Purchaser Shareholder Meeting" shall mean the extraordinary
general meeting of Purchaser's shareholders or any adjournment(s) thereof at
which (a) resolution(s) will be proposed to obtain the Purchaser Shareholder
Approval.
"Purchaser Shares" shall mean 11,688,218 Purchaser Ordinary Shares
as adjusted pursuant to Sections 1.2(f) and 5.1(c), in each case if applicable.
"Purchaser Subsidiary" shall mean each Subsidiary of Purchaser.
"Purchaser U.K. Public Documents" shall have the meaning set forth
in Section 4.14(b).
"Purchaser's Acceptance" shall have the meaning set forth in
Section 5.23(a).
"Real Property" shall mean all real property that is owned or used
by the Company or any Company Subsidiary.
"Reference Price" shall have the meaning set forth in Section
1.2(g).
"Regulatory Information Service" shall have the meaning given in
the Listing Rules.
"Relationship Agreement" shall mean the agreement between Seller
and Purchaser, dated as of the date of this Agreement, in relation to, amongst
other things, Seller's ownership of Purchaser Ordinary Shares.
"Release" shall mean any release, spill, effluent, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment or into or out of any
property owned, operated or leased by the applicable party or its Subsidiaries.
"Retained Employee" shall mean each person who was an active or
inactive employee (including but not limited to any such employee who is on any
leave of absence, whether paid or unpaid, including, but not limited to,
"short-term disability leave", "long-term disability leave" or "workers'
compensation leave" as such term is defined in a Plan) of the Company or any
Company Subsidiary immediately prior to the Closing Date.
"Retirement Benefits" shall mean any pension, lump sum, gratuity
or similar benefit payable or prospectively payable in respect of any employee
or former employee or director or former director of the Company, any Company
Subsidiary or any ERISA Affiliate on or following retirement, leaving service,
disability or death (but excluding benefits provided under any arrangement the
sole purpose of which is to provide benefits on the injury or accidental death
of such employee or former employee or director or former director).
"Secondary Closing" shall have the meaning set forth in Section
2.1(c)(ii).
"Secondary Closing Date" shall have the meaning set forth in
Section 2.1(c)(ii).
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Seller" shall have the meaning set forth in the opening
paragraph.
"Seller DC Plan" shall have the meaning set forth in Section
5.6(h).
"Seller Disclosure Schedule" shall mean the disclosure schedule of
even date herewith delivered by Seller to Purchaser simultaneously with the
execution hereof.
"Seller Guaranty" shall mean any agreement, undertaking, guaranty,
letter of credit, letter of comfort, indemnity or contribution agreement or
other arrangement entered into by Seller or any of its Affiliates (other than
the Company and the Company Subsidiaries) for the benefit of the Company or any
Company Subsidiary or the business or operations of the Company or any Company
Subsidiary.
"Seller's Health Plan" shall mean Executive Medical Plus and
Seller Medical and Dental Plan.
"Seller Indemnified Person" shall have the meaning set forth in
Section 8.1(c).
"Seller Minority Subsidiary" shall mean, with respect to Seller,
any corporation or other organization, whether incorporated or unincorporated,
of which at least 20 percent of the outstanding voting stock or other equity
interest entitled ordinarily to vote in the election of the directors or other
governing body (however designated) of such corporation or organization is at
the time directly or indirectly owned or controlled by Seller or by any one or
more of its wholly owned Subsidiaries, but shall not include any Seller
Subsidiary or any Minority Subsidiary.
"Seller Subsidiary" shall mean each Subsidiary of Seller.
"Seller's Trademarks" shall have the meaning set forth in Section
5.11.
"Short Period" shall have the meaning set forth in Section
5.4(a)(i).
"sterling" or "pounds sterling" or "(pound)" or "xxxxx xxxxxxxx"
means the lawful currency from time to time of the United Kingdom.
"Straddle Period" shall have the meaning set forth in Section
5.4(a)(i).
"Subsidiary" shall mean, with respect to any Person, any
corporation or other organization, whether incorporated or unincorporated, of
which (a) at least a majority of the securities or other interests having by
their terms ordinary voting power to elect a majority of the board of directors
or others performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Person or by
any one or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries or (b) such Person or any other Subsidiary of such Person is a
general partner (excluding any such partnership where such Person or any
Subsidiary of such Person does not have a majority of the voting interest in
such partnership).
"Taxes" shall mean all taxes, however denominated, including any
interest or penalties that may become payable in respect thereof, imposed by any
federal, state, local or foreign government or any agency or political
subdivision of any such government, which taxes shall include, without limiting
the generality of the foregoing, all income taxes (including, but not limited
to, U.S. federal income taxes and state income taxes), payroll and employee
withholding taxes, unemployment insurance, social security, value added, sales
and use taxes, excise taxes, environmental, franchise taxes, gross receipts
taxes, occupation taxes, real and personal property taxes, stamp taxes, transfer
taxes, withholding taxes, workers' compensation, and other obligations of the
same or of a similar nature, whether arising before, on or after the Closing
Date.
"Tax Return" means a report, return or other information
(including any amendments) required to be supplied to a governmental entity with
respect to Taxes including, where permitted or required, combined or
consolidated returns for any group of entities that includes the Company and/or
any of its Subsidiaries.
"Termination Fee" shall have the meaning set forth in Section
7.3(a).
"Third-party Claim" shall have the meaning set forth in Section
8.2(a).
"Threshold" shall have the meaning set forth in Section
8.1(b)(ii).
"Title IV Plan" shall mean a Plan that is subject to Section 302
or Title IV of ERISA or Section 412 of the Code.
"Trademarks" shall mean U.S. and foreign registered and
unregistered trademarks, trade dress, service marks, logos, trade names,
corporate names, the goodwill associated with the foregoing and all
registrations, renewals and applications in any jurisdiction to register the
same.
"Trade Secrets" shall mean all categories of trade secrets as
defined in the Uniform Trade Secrets Act, including business information and to
the extent not included therein, all confidential information including, without
limitation, ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how, manufacturing
and production processes and techniques, research and development information,
drawings, specifications, designs, plans, proposals, technical data,
copyrightable works, financial and marketing plans and customer and supplier
lists and information.
"Trading Day" shall mean any day on which Purchaser Ordinary
Shares are traded on the London Stock Exchange's market for listed securities.
"Transaction Documents" shall have the meaning set forth in
Section 3.2.
"Transfer Taxes" shall have the meaning set forth in Section
5.4(a)(iv).
"Transition Services Agreement" shall mean the Transition Services
Agreement, dated the date hereof between the parties hereto.
"U.K." or "United Kingdom" shall mean the United Kingdom of Great
Britain and Northern Ireland.
"UKLA" shall mean the U.K. Financial Services Authority acting in
its capacity as the competent authority for the purposes of Part VI of the FSMA.
"Unfunded Pension Liability" shall have the meaning set forth in
Section 3.17(p).
"Unsatisfied Conditions" shall have the meaning set forth in
Section 4.5(c).
"U.S." or "United States" shall mean the United States of America.
"U.S. Dollar" or "$" means the lawful currency of the United
States of America.
"WARN Act" shall mean the Worker Adjustment and Retraining
Notification Act.
"Websites" shall have the meaning set forth in Section 3.23(a).
Section 9.2 Interpretation.
(a) The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
(b) Whenever the words "include", "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation."
(c) The words "hereof", "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit and schedule references are to the articles,
sections, paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.
(d) The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term, and words
denoting any gender shall include all genders. Where a word or phrase is defined
herein, each of its other grammatical forms shall have a corresponding meaning.
(e) A reference to any party to this Agreement or any other agreement
or document shall include such party's successors and permitted assigns.
(f) A reference to any legislation or to any provision of any
legislation shall include any amendment to, and any modification or re-enactment
thereof, any legislative provision substituted therefor and all regulations and
statutory instruments issued thereunder or pursuant thereto.
(g) The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
(h) All payments and adjustments under this Agreement shall be made in
immediately available U.S. Dollars.
ARTICLE X
MISCELLANEOUS
Section 10.1 Fees and Expenses. All costs and expenses incurred in
connection with this Agreement and the consummation of the Closing shall be paid
by the party incurring such expenses, except as otherwise specifically provided
to the contrary in this Agreement.
Section 10.2 Amendment and Modification. This Agreement may be amended,
modified and supplemented in any and all respects, but only by a written
instrument signed by all of the parties hereto expressly stating that such
instrument is intended to amend, modify or supplement this Agreement.
Section 10.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
if to Purchaser, to:
Xxxxxx Xxxxxx Sofres plc
Xxxxxxxx
Xxxxxx, Xxxxxxx
X0 0XX
Xxxxxx Xxxxxxx
Attention: Xxxx Xxxxxx, General Counsel
Telephone: (00) 000-000-0000
Telecopy: (00) 000-000-0000
and:
Xxxxxx Xxxxxx Sofres Intersearch Corporation
000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Cozen X'Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to Seller, to:
The Interpublic Group of Companies, Inc.
0000 Xxx. xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Camera, General Counsel
Xxxxxxxx Xxxxxx, Assistant General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Section 10.4 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties.
Section 10.5 Entire Agreement; No Third Party Beneficiaries. This
Agreement, the Transition Services Agreement, the Relationship Agreement, the
AISA Share Transfer Agreement and the Confidentiality Agreement (a) constitute
the entire agreement and supersede all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof
and thereof and (b) are not intended to confer upon any Person other than the
parties hereto and thereto any rights or remedies hereunder and thereunder.
Section 10.6 Severability. Any term or provision of this Agreement that
is held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction or other authority declares that any term or provision
hereof is invalid, void or unenforceable, the parties agree that the court
making such determination shall have the power to reduce the scope, duration,
area or applicability of the term or provision, to delete specific words or
phrases, or to replace any invalid, void or unenforceable term or provision with
a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision.
Section 10.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the principles of conflicts of Law thereof.
Section 10.8 Compulsory Mediation.
(a) The parties hereby agree to attempt in good faith promptly to
resolve any disputes or claims other than those relating to Section 2.2
(Post-Closing Adjustment) or Section 5.17 (Restrictive Covenant) (each a
"Dispute") arising out of or relating to this Agreement first by negotiations,
then by mediation. Upon the written request of either party, the Dispute will be
referred for negotiation to representatives of the parties who have no direct
operational responsibility for the matters involved in the Dispute and who have
appropriate authority to resolve the Dispute. If these representatives have not
agreed on a resolution within 15 days of the referral to them, then either party
may give the other party written notice (the "Dispute Notice") of the Dispute
and within 15 days after receipt of the Dispute Notice, the receiving party
shall submit to the sending party a written response. The Dispute Notice and the
response shall: (i) state each party's position and summarize the arguments
supporting that position; (ii) state the amount of the Dispute or any
counterclaim; (iii) specify the requested relief; and (iv) state the name and
title of the officers who have the authority to settle the controversy. Within
30 days after delivery of the Dispute Notice, the parties shall meet in the
Borough of Manhattan in the City of New York and shall commence non-binding
mediation in respect of the Dispute in accordance with the Commercial Mediation
Rules of the American Arbitration Association (the "AAA") (except (A) as
otherwise provided herein and (B) that, to the extent the parties have mutually
agreed not to submit the Dispute to be administered by the AAA, all references
in such rules to the AAA including filings, determinations or appointments to be
made with or by the AAA shall be disregarded and shall be deemed to be
references to the parties) before a mediator to be mutually agreed upon by the
parties; provided, that if the parties cannot mutually agree upon a mediator
within such 30-day period, then the parties shall promptly submit the Dispute to
mediation administered by the AAA under its Commercial Mediation Rules. All
communications made in connection with either negotiations or mediation pursuant
to this clause shall be confidential and shall be treated as compromise and
settlement negotiations for purposes of applicable rules of evidence and as such
shall be deemed inadmissible in any subsequent proceeding (pursuant to the
provisions of Section 10.9). For the avoidance of doubt, either party may
terminate the mediation at any time upon notice in writing to the other party
and the mediator if such party has made a good faith effort to resolve such
Dispute.
(b) If any Dispute shall not be fully resolved through the process
outlined in clause (a) above, such Dispute shall be resolved through proceedings
pursuant to the provisions of Section 10.9.
Section 10.9 Jurisdiction. To the fullest extent permitted by
applicable Law, each party hereto (a) agrees that any claim, action or
proceeding by such party seeking any relief whatsoever arising out of, or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought only in the United States District Court for the Southern District of
New York or any New York State court, in each case, located in the Borough of
Manhattan and not in any other State or Federal court in the United States of
America or any court in any other country, (b) agrees to submit to the exclusive
jurisdiction of such courts located in the Borough of Manhattan for purposes of
all legal proceedings arising out of, or in connection with, this Agreement or
the transactions contemplated hereby, (c) waives and agrees not to assert any
objection that it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court or any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum, (d) agrees
that, in connection with any such action or proceeding, (i) the mailing of
process or other papers by registered mail, or the service of process or other
papers in any manner permitted by Section 10.3, (A) to the Pennsylvania address
(or any other U.S. address that replaces such address in the future) or to the
United Kingdom or any other address specified for Purchaser in Section 10.3 (but
such service need not be made on more than one address) in the case of service
on Purchaser (and copies shall be delivered to the other addresses specified for
Purchaser in Section 10.3, but the delivery of such copies shall have no effect
on the determination of the validity of service) or (B) to the address specified
for Seller in Section 10.3 (or any other address that replaces such address in
the future) in the case of service on Seller or (ii) service of process or other
papers on a party in any manner as may be permitted by Law shall be valid and
sufficient service of such process or other papers (and each party undertakes to
maintain until February 28, 2005 the specification of a U.S. address in Section
10.3 for purposes of this clause (d)) and (e) agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
applicable Law. The preceding sentence shall not limit the jurisdiction of the
Accounting Arbitrator as set forth in Section 2.2, although claims may be
asserted in such courts described in the preceding sentence for purposes of
enforcing the jurisdiction of the Accounting Arbitrator.
Section 10.10 Time of Essence. Each of the parties hereto hereby agrees
that, with regard to all dates and time periods set forth or referred to in this
Agreement, time is of the essence.
Section 10.11 Extension; Waiver. At any time prior to the Closing Date,
either party hereto may extend the time for the performance of any of the
obligations or other acts of the other party. Any agreement on the part of a
party to any such extension shall be valid only if set forth in an instrument in
writing signed by or on behalf of such party. The failure of either party to
this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of those rights.
Section 10.12 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be transferred by either party (whether
by operation of Law or otherwise) without the prior written consent of the other
party. Notwithstanding the foregoing, Purchaser may without the consent of
Seller (a) collaterally assign its rights under this Agreement to any lender
which has provided financing to Purchaser in connection with the transactions
contemplated hereby, (b) assign all or any portion of its rights and obligations
hereunder to any direct or indirect wholly-owned Purchaser Subsidiary and (c)
assign all or any portion of its rights and obligations under this Agreement to
any purchaser acquiring at least 90% of the assets of Purchaser; provided that,
notwithstanding any such assignment or transfer under clause (a), (b) or (c),
Purchaser shall remain liable under this Agreement as a primary obligor. Any
transfer of any rights, interests or obligations hereunder in violation of this
Section shall be null and void.
IN WITNESS WHEREOF, Purchaser and Seller have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first written above.
XXXXXX XXXXXX SOFRES PLC
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Group Finance Director
THE INTERPUBLIC GROUP OF COMPANIES, INC.
By: /s/ Xxxxxxxx X. Camera
-------------------------------------
Name: Xxxxxxxx X. Camera
Title: Senior Vice President and
General Counsel
