Exhibit 99.1
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CONTRIBUTION AGREEMENT
among
CBS INC.,
DATA BROADCASTING CORPORATION
and
XXXXXXXXXXX.XXX, LLC
Dated as of October 29, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
Contributions
SECTION 1.01. DBC Contribution; DBC Assets ................................. 1
SECTION 1.02. Assumption of Certain Liabilities ............................ 2
SECTION 1.03. Consents of Third Parties .................................... 5
SECTION 1.04. CBS Contribution ............................................. 5
ARTICLE II
The Closing
SECTION 2.01. The Closing .................................................. 6
SECTION 2.02. Transactions To Be Effected at the Closing ................... 6
ARTICLE III
Representations and Warranties of DBC
SECTION 3.01. Organization, Standing and Power ............................. 7
SECTION 3.02. Authority; Execution and Delivery; Enforceability ............ 7
SECTION 3.03. No Conflicts; Consents ....................................... 8
SECTION 3.04. Financial Statements ......................................... 8
SECTION 3.05. DBC Assets ................................................... 9
SECTION 3.06. Intellectual Property ........................................ 9
SECTION 3.07. Contracts .................................................... 11
SECTION 3.08. Personal Property ............................................ 14
SECTION 3.09. Permits ...................................................... 14
SECTION 3.10. Insurance .................................................... 15
SECTION 3.11. Sufficiency of DBC Assets .................................... 15
SECTION 3.12. Taxes ........................................................ 15
SECTION 3.13. Proceedings .................................................. 16
SECTION 3.14. Benefit Plans ................................................ 16
SECTION 3.15. Absence of Changes or Events ................................. 18
SECTION 3.16. Compliance with Applicable Laws .............................. 18
SECTION 3.17. Transactions with Affiliates ................................. 19
SECTION 3.18. Effect of Transaction ........................................ 19
SECTION 3.19. Disclosure ................................................... 19
Contents, p. 2
ARTICLE IV
Representations and Warranties of CBS
SECTION 4.01. Organization, Standing and Power ............................. 19
SECTION 4.02. Authority; Execution and Delivery; Enforceability ............ 20
SECTION 4.03. No Conflicts; Consents ....................................... 20
ARTICLE V
Covenants
SECTION 5.01. Reasonable Best Efforts ...................................... 21
SECTION 5.02. Expenses; Transfer Taxes ..................................... 21
SECTION 5.03. Post-Closing Cooperation ..................................... 21
SECTION 5.04. Further Assurances ........................................... 22
SECTION 5.05. Year 2000 Compliance ......................................... 22
ARTICLE VI
Indemnification
SECTION 6.01. Indemnification by DBC ....................................... 23
SECTION 6.02. Indemnification by CBS ....................................... 23
SECTION 6.03. Calculation of Losses ........................................ 24
SECTION 6.04. Termination of Indemnification ............................... 24
SECTION 6.05. Procedures ................................................... 24
SECTION 6.06. Survival of Representations .................................. 27
ARTICLE VII
General Provisions
SECTION 7.01. Assignment ................................................... 27
SECTION 7.02. No Third-Party Beneficiaries ................................. 27
SECTION 7.03. Attorney Fees ................................................ 27
SECTION 7.04. Notices ...................................................... 27
SECTION 7.05. Interpretation; Exhibits and Schedules; Certain Definitions .. 29
SECTION 7.06. Counterparts ................................................. 29
SECTION 7.07. Entire Agreement ............................................. 30
SECTION 7.08. Severability ................................................. 30
SECTION 7.09. Amendments and Waivers ....................................... 30
SECTION 7.10. Consent to Jurisdiction ...................................... 30
SECTION 7.11. Governing Law ................................................ 31
CONTRIBUTION AGREEMENT (this "Agreement") dated as of
October 29, 1997, among CBS INC., a New York corporation
("CBS"), DATA BROADCASTING CORPORATION, a Delaware corporation
("DBC"), and XXXXXXXXXXX.XXX, LLC, a Delaware limited
liability company (the "Company").
WHEREAS, immediately prior to the execution and delivery of this
Agreement, CBS and DBC entered into the Limited Liability Company Agreement of
Xxxxxxxxxxx.Xxx, LLC dated as of the date hereof, in the form attached as
Exhibit A hereto (the "LLC Agreement");
WHEREAS, simultaneously herewith, CBS and the Company are entering
into the License Agreement, in the form attached as Exhibit B hereto (the
"License Agreement") and DBC and the Company are entering into the Services
Agreement, in the form attached as Exhibit C hereto (the "DBC Services
Agreement"); and
WHEREAS, in connection with the execution and delivery of the LLC
Agreement, the License Agreement and the DBC Services Agreement and the
formation of the Company, each of CBS and DBC desires to receive certain
representations and warranties from the other and each of them desires to
receive certain agreements from the other.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending to be
legally bound by the terms hereof applicable to each of them, hereby agree as
follows:
ARTICLE I
Contributions
SECTION 1.01. DBC Contribution; DBC Assets. (a) On the terms and
subject to the conditions of this Agreement, DBC hereby sells, assigns,
transfers, conveys and delivers or is causing one or more of its subsidiaries to
sell, assign, transfer, convey and deliver to the Company, and the Company
hereby acquires from DBC, or such subsidiary, effective as of the date hereof,
all the right, title and interest of the DBC Companies (as defined below) in, to
and under the DBC Assets (as defined below), and
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agrees to make the cash payments to the Company required pursuant to Section
1.01(b), in exchange for (i) a 50% membership interest in the Company (the "DBC
Interest") and (ii) the assumption of the Assumed DBC Liabilities (as defined in
Section 1.02). The contribution and acquisition of the DBC Assets, the making of
the cash payments pursuant to Section 1.01(b) and the assumption of the Assumed
DBC Liabilities is referred to in this Agreement as the "DBC Contribution". The
term "Business" means the businesses conducted by DBC and its subsidiaries and
known as DBC News and DBC On-Line, including, but not limited to, the "Financial
Markets", "Mutual Fund Center", "Trading Center", "Stock Chat" and "MarketWatch"
portions of the Internet website owned by DBC and known as xxx.xxx. The term
"DBC Companies" means DBC and any of its subsidiaries that engage in the
operation of the Business or own, lease or license any DBC Assets. The term "DBC
Assets" means the business, properties, assets, goodwill and rights of any of
the DBC Companies, of whatever kind and nature, real or personal, tangible or
intangible, that are owned, leased or licensed by any of the DBC Companies and
are set forth on Schedule 1.01.
(b) On the terms and subject to the conditions of this Agreement,
DBC hereby agrees to pay to the Company by wire transfer of immediately
available funds, to an account specified by the Company in writing, $1,000,000
on each of the date hereof and the first anniversary of the date hereof.
SECTION 1.02. Assumption of Certain Liabilities. (a) On the terms
and subject to the conditions of this Agreement, the Company hereby assumes,
effective as of the date hereof, and from and after the date hereof the Company
agrees to pay, perform and discharge when due, any liability, obligation or
commitment of the DBC Companies under the contracts, leases, licenses,
indentures, agreements, Commitments and other legally binding arrangements,
whether oral or written ("Contracts"), listed on Schedule 1.02 (the "DBC
Contracts"), to the extent such liability, obligation or commitment relates to
the period from and after the date hereof (the "Assumed DBC Liabilities"), other
than any Excluded DBC Liabilities.
(b) Notwithstanding Section 1.02(a), or any other provision of this
Agreement or any of the other agreements and instruments executed and delivered
in connection herewith and the transactions contemplated hereby, including, but
not limited to, the License Agreement and the DBC Services Agreement (the
"Ancillary Agreements"), and regardless of any disclosure to CBS or the Company,
the
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Company shall not assume any Excluded DBC Liability, each of which shall be
retained and paid, performed and discharged when due by one of the DBC
Companies. The term "Excluded DBC Liability" means:
(i) any liability, obligation or commitment of any of the DBC
Companies not specifically assumed pursuant to Section 1.02(a);
(ii) any liability, obligation or commitment of any of the DBC
Companies, whether express or implied, liquidated, absolute, accrued,
contingent or otherwise, or known or unknown, arising out of the operation
or conduct by any of the DBC Companies or any of their respective
affiliates of any business other than the Business, and any liability,
obligation or commitment of any subsidiary of DBC that is not a DBC
Company, whether express or implied, liquidated, absolute, accrued,
contingent or otherwise, or known or unknown;
(iii) any liability, obligation or commitment of any of the DBC
Companies (A) arising out of any actual or alleged breach by any of the
DBC Companies of, or nonperformance by any of the DBC Companies under, any
Contract (including any DBC Contract) prior to the date hereof or (B)
accruing under any DBC Contract with respect to any period prior to the
date hereof;
(iv) any liability, obligation or commitment of any of the DBC
Companies arising out of (A) any suit, action or proceeding ("Proceeding")
pending or, to the knowledge of any of the DBC Companies, threatened as of
the date hereof or (B) any actual or alleged violation by any of the DBC
Companies or any of their respective affiliates of any Applicable Law (as
defined in Section 3.03) prior to the date hereof;
(v) any account payable or accrued liability of any of the DBC
Companies;
(vi) any liability, obligation or commitment for Taxes (as defined
in Section 3.12), whether or not accrued, assessed or currently due and
payable, (A) of any of the DBC Companies or (B) relating to the operation
or ownership of the Business or the assets for any Tax period (or portion
thereof) ending on or prior to the date hereof (for purposes of this
clause (vii), all real property Taxes, personal property Taxes and similar
ad valorem obligations levied with respect to the DBC Assets for a Tax
period that includes (but does not end on) the date hereof
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shall be apportioned between DBC and the Company based upon the number of
days of such period included in the Tax period prior to the date hereof
and the number of days of such Tax period after the date hereof (which
period shall include the date hereof));
(vii) except as provided in Section 5.02 (b), any liability,
obligation or commitment for transfer, documentary, sales, use,
registration, value-added and other similar Taxes and related amounts
(including any penalties, interest and additions to Tax) incurred in
connection with this Agreement, the Ancillary Agreements, the DBC
Contribution and the other transactions contemplated hereby and thereby
("Transfer Taxes");
(viii) any liability, obligation or commitment of any of the DBC
Companies arising under any DBC Benefit Plan (as defined in Section
3.14(a));
(ix) any liability, obligation or commitment of any of the DBC
Companies that relates to, or that arises out of, products or services
shipped or sold by or on behalf of any of the DBC Companies on or prior to
the date hereof (including claims of negligence, personal injury, product
damage, product liability, product warranties, promotional obligations,
strict liability, product recall or any other claims (including workers
compensation, employer's liability or otherwise)), whether such liability,
obligation or commitment relates to or arises out of accidents, injuries
or losses occurring on or prior to or after the date hereof;
(x) any liability, obligation or commitment of any of the DBC
Companies that relates to, or that arises out of, the employment or the
termination of the employment with any of the DBC Companies of any
employee or former employee of the Business (including as a result of the
transactions contemplated by this Agreement); and
(xi) any liability, obligation or commitment of any of the DBC
Companies to any of their respective affiliates.
(c) The Company shall acquire the DBC Assets free and clear of all
liabilities, obligations and commitments of any of the DBC Companies, other than
the Assumed DBC Liabilities, and free and clear of all Liens (as defined in
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Section 3.05), other than Permitted Liens (as defined in Section 3.05).
SECTION 1.03. Consent of Third Parties. (a) Notwithstanding anything
in this Agreement to the contrary, this Agreement shall not constitute an
agreement to assign any asset or any claim or right or any benefit arising under
or resulting from such asset if an attempted assignment thereof, without the
consent of a third party, would constitute a breach or other contravention of
the rights of such third party, would be ineffective with respect to any party
to an agreement concerning such asset, or would in any way adversely affect the
rights of any of the DBC Companies or, upon transfer, the Company under such
asset. If any transfer or assignment by any of the DBC Companies to, or any
assumption by the Company of, any interest in, or liability, obligation or
commitment under, any asset requires the consent of a third party, then such
assignment or assumption shall be made subject to such consent being obtained.
To the extent any DBC Contract may not be assigned to the Company by reason of
the absence of any such consent, the Company shall not be required to assume any
Assumed DBC Liabilities arising under such DBC Contract.
(b) In connection with those consents that have not been obtained as
of the date hereof, DBC and the Company hereby agree that, until any such
required consent is obtained, DBC, or one or more of its subsidiaries, as
appropriate, shall, with the reasonable and necessary cooperation of the
Company, and at the Company's direction, continue to fulfill any and all
obligations and commitments, and enforce any and all rights, of the DBC
Companies in connection with any asset, claim or right that constitutes a DBC
Asset but for which any required consent has not been obtained, and that the
Company shall be entitled to all of the economic claims, rights and benefits
under such asset, claim or right and DBC shall pay or cause to be paid to the
Company all such economic benefits as promptly as practicable following receipt
by DBC or any of its subsidiaries. To the extent, and only to the extent, a
required consent is received to the transfer of any asset, claim or right, the
Company shall be responsible for the Assumed DBC Liabilities, if any, arising
under such asset, claim or right.
SECTION 1.04. CBS Contribution. On the terms and subject to the
conditions of this Agreement, CBS will contribute to the Company, over a period
of five years and on the terms set forth in Exhibit D, advertising time with an
aggregate rate card value of $50 million calculated in
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accordance with the terms set forth in Exhibit D (the "CBS Contribution" and,
together with the DBC Contribution, the "Contributions"), which contribution is
deemed to have a discounted present value equal to the discounted present value
of the DBC Contribution, in exchange for a 50% membership interest in the
Company (the "CBS Interest").
ARTICLE II
The Closing
SECTION 2.01. The Closing. The closing of the Contributions (the
"Closing") is taking place at the offices of Cravath, Swaine & Xxxxx, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the date hereof.
SECTION 2.02. Transactions To Be Effected at the Closing. At the
Closing:
(a) DBC is delivering (i) appropriately executed copies of this
Agreement and each Ancillary Agreement to which it is specified to be a
party, (ii) such appropriately executed bills of sale, assignments and
other instruments of transfer relating to the DBC Assets in form and
substance reasonably satisfactory to CBS and the Company and (iii) such
other documents as CBS or the Company have reasonably requested to
demonstrate compliance with the terms and provisions of this Agreement;
(b) CBS is delivering (i) appropriately executed copies of this
Agreement and each Ancillary Agreement to which it is specified to be a
party, and (ii) such other documents as DBC or the Company have reasonably
requested to demonstrate compliance with the terms and provisions of this
Agreement; and
(c) the Company is delivering (i) appropriately executed copies of
this Agreement and each Ancillary Agreement to which it is specified to be
a party, (ii) such appropriately executed assumption agreements and other
instruments of assumption providing for the assumption of the Assumed DBC
Liabilities in form and substance reasonably satisfactory to CBS and DBC
and (iii) such other documents as CBS or DBC have reasonably requested to
demonstrate compliance with the terms and provisions of this Agreement.
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ARTICLE III
Representations and Warranties of DBC
DBC hereby represents and warrants to CBS and the Company, as of the
date of this Agreement, as follows:
SECTION 3.01. Organization, Standing and Power. Each of the DBC
Companies is duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is organized and has full corporate power
and authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals necessary to enable it to own, lease or otherwise
hold its properties and assets and to conduct the Business and its other
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or in the
aggregate, have not had and could not reasonably be expected to have a material
adverse effect (i) on the business, assets, condition (financial or otherwise)
or results of operations or prospects of DBC and its subsidiaries, taken as a
whole, or of the Business, (ii) on the ability of DBC to perform its obligations
under this Agreement and the Ancillary Agreements or (iii) on the ability of the
DBC Companies to consummate the DBC Contribution and the other transactions
contemplated hereby and thereby (a "DBC Material Adverse Effect"). Each of the
DBC Companies is duly qualified to do business as a foreign corporation in each
jurisdiction where the character of the DBC Assets held by it or the nature of
the Business make such qualification necessary for it to conduct the Business as
currently conducted by it or the failure to so qualify has had or could
reasonably be expected to have a DBC Material Adverse Effect. DBC has delivered
to the Company true and complete copies of the certificate of incorporation and
by-laws of each of the DBC Companies, in each case as amended through the date
of this Agreement.
SECTION 3.02. Authority; Execution and Delivery; Enforceability. DBC
has full power and authority to execute this Agreement and the Ancillary
Agreements to which it is a party. Each of the DBC Companies has full power and
authority to consummate the DBC Contribution and the other transactions
contemplated hereby and thereby. The execution and delivery by DBC of this
Agreement and the Ancillary Agreements to which it is a party and the
consummation by the DBC Companies of the DBC Contribution and the other
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action. DBC has duly executed and delivered this Agreement
and each Ancillary
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Agreement to which it is a party, and this Agreement, and each Ancillary
Agreement to which it is a party, constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms except as
enforcement may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally or equitable principles relating to or limiting
creditors' rights generally.
SECTION 3.03. No Conflicts; Consents. The execution and delivery by
DBC of this Agreement and each Ancillary Agreement to which it is a party and
the consummation of the DBC Contribution and the other transactions contemplated
hereby and thereby and compliance by DBC with the terms hereof and thereof do
not conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any Lien upon any of the properties or
assets of DBC or any of its subsidiaries under, any provision of (i) the
certificate of incorporation or by-laws of DBC or any of its subsidiaries, (ii)
any Contract to which DBC or any of its subsidiaries is a party or by which any
of their respective properties or assets is bound or (iii) any judgment, order
or decree ("Judgment") or statute, law, ordinance, rule or regulation
("Applicable Law") applicable to DBC or any of its subsidiaries or their
respective properties or assets, other than, in the case of clauses (ii) and
(iii) above, any such items that, individually or in the aggregate, have not had
and could not reasonably be expected to have a DBC Material Adverse Effect. No
consent, approval, license, permit, order or authorization ("Consent") of, or
registration, declaration or filing with, any Federal, state, local or foreign
government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign (a "Governmental Entity"), is required to be obtained or made by or with
respect to DBC or any of its subsidiaries in connection with (A) the execution,
delivery and performance of this Agreement or any Ancillary Agreement or the
consummation of the DBC Contribution or the other transactions contemplated
hereby and thereby or (B) the conduct by the Company of the Business following
the Closing as conducted on the date hereof.
SECTION 3.04. Financial Statements. (a) Schedule 3.04 sets forth for
the Business (i) a Statement of Assets as of June 30, 1997 (the "Year End
Balance Sheet"), (ii) a Statement of Assets as of September 30, 1997 (the "First
Quarter Balance Sheet"), (iii) an Income Statement
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for the twelve months ended June 30, 1997 (the "Full Year Income Statement"),
and (iv) an Income Statement for the three months ended September 30, 1997 (the
"First Quarter Income Statement"). The Year End Balance Sheet and the Full Year
Income Statement were derived from the audited consolidated financial statements
of DBC and its subsidiaries for the year ended June 30, 1997, as audited and
opined upon by Price Waterhouse LLP in their report dated August 8, 1997. The
term "Financial Statements" shall mean the Year End Balance Sheet, the First
Quarter Balance Sheet, the Full Year Income Statement and the First Quarter
Income Statement. The Financial Statements have been prepared from the books and
records of DBC and its subsidiaries relating to the Business and fairly present
the financial condition and results of operations of the Business as of the
respective dates and for the respective periods indicated.
(b) The Business does not have any material liabilities or
obligations of any nature (whether accrued, absolute, contingent, unasserted or
otherwise), except for items set forth in Schedule 3.04(b).
SECTION 3.05. DBC Assets. One of the DBC Companies has good and
valid title to all the DBC Assets, in each case free and clear of all mortgages,
liens, security interests, charges, easements, leases, subleases, covenants,
rights of way, options, claims, restrictions or encumbrances of any kind
(collectively, "Liens"), except (i) such as are set forth in Schedule 3.05 (all
of which shall be discharged prior to the Closing), (ii) mechanics', carriers',
workmen's, repairmen's or other like Liens arising or incurred in the ordinary
course of business, Liens arising under original purchase price conditional
sales contracts and equipment leases with third parties entered into in the
ordinary course of business and liens for Taxes that are not due and payable or
that may thereafter be paid without penalty, and (iii) other imperfections of
title or encumbrances, if any, that do not, individually or in the aggregate,
materially impair the continued use and operation of the assets to which they
relate in the conduct of the Business as presently conducted (the Liens
described in clauses (ii) and (iii) above are referred to collectively as
"Permitted Liens").
SECTION 3.06. Intellectual Property. (a) Schedule 3.06 sets forth a
true and complete list of all patents (including all reissues, divisions,
continuations and extensions thereof), patent applications, patent rights,
trademarks, trademark registrations, trademark applications, servicemarks, trade
names, business
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names, brand names, domain names, copyrights, copyright registrations and
renewals, designs, design registrations, software (together with all related
source code(s)) and all rights to any of the foregoing ("Intellectual Property")
owned, used, filed by or licensed to any of the DBC Companies and used, held for
use or intended to be used in the operation or conduct of the Business, other
than unregistered designs and copyrights that, individually and in the
aggregate, are not material to the conduct of the Business as presently
conducted. With respect to all Intellectual Property constituting DBC Assets
("Contributed Intellectual Property") that is registered or subject to an
application for registration, Schedule 3.06 sets forth a list of all
jurisdictions in which such Contributed Intellectual Property is registered or
registrations applied for and all registration and application numbers. Except
as set forth in Schedule 3.06 (i) all the Contributed Intellectual Property has
been duly registered in, filed in or issued by the appropriate Governmental
Entity where such registration, filing or issuance is necessary or appropriate
for the conduct of the Business as presently conducted, (ii) one or more of the
DBC Companies is the sole and exclusive owner of, and DBC has the right to use,
execute, reproduce, display, perform, modify, enhance, distribute, prepare
derivative works of and sublicense, without payment to any other person, all the
Contributed Intellectual Property and the consummation of the DBC Contribution
and the other transactions contemplated hereby does not and will not conflict
with, alter or impair any such rights, and (iii) during the past three years,
none of the DBC Companies has received any written or oral communication from
any person asserting any ownership interest in any Contributed Intellectual
Property.
(b) None of the DBC Companies has granted any license of any kind
relating to any trade secrets, confidential information, inventions, know-how,
formulae, processes, procedures, research records, records of inventions, test
information, market surveys, subscriber lists and marketing know-how of DBC
constituting DBC Assets (the "Technology"), or to any Contributed Intellectual
Property or the marketing or distribution thereof, except nonexclusive licenses
to end-users in the ordinary course of business. None of the DBC Companies is
bound by or a party to any option, license or agreement of any kind relating to
the Intellectual Property of any other person for the use of such Intellectual
Property in the conduct of the Business, except as set forth in Schedule 3.06
and except for so-called "shrink-wrap" license agreements relating to computer
software licensed in the ordinary course of the Business. The conduct of the
Business as presently conducted does not
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violate, conflict with or infringe the Intellectual Property of any other
person. Except as set forth in Schedule 3.06, (i) no claims are pending or, to
the knowledge of DBC, threatened, as of the date of this Agreement against any
of the DBC Companies by any person with respect to the ownership, validity,
enforceability, effectiveness or use in the Business of any Intellectual
Property and (ii) during the past three years DBC and its affiliates have not
received any written or oral communication alleging that DBC or any of its
affiliates has in the conduct of the Business violated any rights relating to
Intellectual Property of any person.
(c) All material Technology has been maintained in confidence in
accordance with protection procedures customarily used in the industry to
protect rights of like importance. All former and current members of management
and key personnel of DBC or any of its affiliates, including all former and
current employees, agents, consultants and independent contractors who have
contributed to or participated in the conception and development of material
Technology (collectively, "Personnel") either (i) have been party to a
"work-for-hire" arrangement or agreement with any of the DBC Companies, in
accordance with all Applicable Laws, that has accorded any of the DBC Companies
full, effective, exclusive and original ownership of all tangible and intangible
property thereby arising or (ii) have executed appropriate instruments of
assignment in favor of one of the DBC Companies as assignee that have conveyed
to one of the DBC Companies full, effective and exclusive ownership of all
tangible and intangible property thereby arising. No former or current Personnel
have any claim against any of the DBC Companies in connection with such person's
involvement In the conception and development of any Technology and no such
claim has been asserted or is threatened. None of the current officers and
employees of any of the DBC Companies has any patents issued or applications
pending for any device, process, design or invention of any kind now used or
needed by any of the DBC Companies in the furtherance of the Business, which
patents or applications have not been assigned to one of the DBC Companies, with
such assignment duly recorded in the United States Patent and Trademark Office.
(d) All Contributed Intellectual Property, as applicable, is free of
any "bugs" or "viruses" that could materially interfere with the Company's use
of such Intellectual Property.
SECTION 3.07. Contracts. (a) Except as set forth in Schedule 3.07,
and except for Contracts relating
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solely to assets that do not constitute DBC Assets, no DBC Company is a party to
or bound by any Contract that is used, held for use or intended for use in, or
that arises out of, the operation or conduct of the Business and that is:
(i) an employment agreement or employment Contract;
(ii) a collective bargaining agreement or other Contract with any
labor organization, union or association;
(iii) a covenant not to compete or other covenant of any of the DBC
Companies restricting the development, manufacture, marketing or
distribution of the products and services of the Business;
(iv) a Contract with (A) any shareholder or affiliate of DBC or (B)
any current or former officer, director or employee of DBC or any of its
affiliates;
(v) a lease, sublease or similar Contract with any person under
which (A) any of the DBC Companies is lessee of, or holds or uses, any
machinery, equipment, vehicle or other tangible personal property owned by
any person or (B) any of the DBC Companies is a lessor or sublessor of, or
makes available for use by any person, any tangible personal property
owned or leased by any of the DBC Companies, in any such case has an
aggregate future liability or receivable, as the case may be, in excess of
$5,000;
(vi) (A) a continuing Contract for the future purchase of materials,
supplies or equipment, (B) a management, service, consulting or other
similar Contract or (C) an advertising agreement or arrangement, in any
such case that has an aggregate future liability to any person in excess
of $5,000;
(vii) a material license, option or other Contract relating in whole
or in part to the Contributed Intellectual Property (including any license
or other Contract under which any of the DBC Companies is licensee or
licensor of any Contributed Intellectual Property) or to any Technology;
(viii) (A) a Contract under which any of the DBC Companies has
borrowed any money from, or issued any note, bond, debenture or other
evidence of indebtedness to, any person or (B) any other note, bond,
debenture or other evidence of indebtedness issued to any person;
13
(ix) a Contract (including any so-called take-or-pay or keepwell
agreement) under which (A) any person has directly or indirectly
guaranteed indebtedness, liabilities or obligations of any of the DBC
Companies or (B) or any of the DBC Companies has directly or indirectly
guaranteed indebtedness, liabilities or obligations of any other person
(in each case other than endorsements for the purpose of collection in the
ordinary course of business);
(x) a Contract under which any of the DBC companies has, directly or
indirectly, made any advance, loan, extension of credit or capital
contribution to, or other investment in, any person (other than extensions
of trade credit in the ordinary course of the Business);
(xi) a Contract granting a Lien upon any DBC Asset;
(xii) a Contract providing for indemnification of any person with
respect to material liabilities relating to any current or former business
of DBC or any predecessor person;
(xiii) a Contract not made in the ordinary course of the Business;
(xiv) a confidentiality agreement;
(xv) a Contract for the sale of any DBC Asset or the grant of any
preferential rights to purchase any DBC Asset or requiring the consent of
any party to the transfer thereof;
(xvi) a Contract for any joint venture, partnership or similar
arrangement;
(xvii) other Contract that has an aggregate future liability to any
person in excess of $5,000 and is not terminable by one of the DBC
Companies by notice of riot more than 60 days for a cost of less than
$5,000; or
(xviii) a Contract other than as set forth above to which any of the
DBC Companies is a party or by which it or any of its assets or businesses
is bound or subject that is material to the Business or the use or
operation of the DBC Assets.
(b) Except as set forth in Schedule 3.07, all DBC Contracts are
valid, binding and in full force and effect and are enforceable by the
applicable DBC Companies in
14
accordance with their terms except as enforcement may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally or equitable
principles relating to or limiting creditors' rights generally. Except as set
forth in Schedule 3.07, the applicable DBC Companies have performed all material
obligations required to be performed by them to date under the DBC Contracts,
and they are not (with or without the lapse of time or the giving of notice, or
both) in breach or default in any material respect thereunder and, to the
knowledge of DBC, no other party to any DBC Contract is (with or without the
lapse of time or the giving of notice, or both) in breach or default in any
material respect thereunder. No DBC Company has, except as disclosed in the
applicable Schedule, received any notice of the intention of any party to
terminate any DBC Contract. Complete and correct copies of all Contracts listed
in the Schedules, together with all modifications and amendments thereto, have
been delivered to CBS and the Company.
(c) Schedule 3.07 sets forth each DBC Contract with respect to which
the Consent of the other party or parties thereto is required by virtue of the
execution and delivery of this Agreement or the consummation of the DBC
Contribution to avoid the invalidity of the transfer of such Contract, the
termination thereof, a breach, violation or default thereunder or any other
change or modification to the terms thereof, each of which has been or will be
obtained.
SECTION 3.08. Personal Property. Each material item of tangible
personal property and interests therein, including all machinery, equipment,
furniture and vehicles, of any of the DBC Companies that constitute DBC Assets
(the "Personal Property") is in good working order (ordinary wear and tear
excepted), is free from any material defect and has been maintained in all
material respects in accordance with the past practice of the Business and
generally accepted industry practice, and no repairs, replacements or regularly
scheduled maintenance relating to any such item has been deferred. All leased
personal property of the Business is in all respects in the condition required
of such property by the terms of the lease applicable thereto.
SECTION 3.09. Permits. (a) Schedule 3.09 sets forth all material
certificates, licenses, permits, authorizations and approvals ("Permits") issued
or granted to any of the DBC Companies by Governmental Entities that are
necessary or desirable for the conduct of the Business. Except as set forth in
Schedule 3.09, (i) all such Permits are validly held by one of the DBC
Companies, and the applicable DBC Companies have complied in all material
15
respects with all terms and conditions thereof, (ii) during the past three
years, no DBC Company has received notice of any Proceedings relating to the
revocation or modification of any such Permits the loss of which, individually
or in the aggregate, has had or could reasonably be expected to have a DBC
Material Adverse Effect, and (iii) none of such Permits will be subject to
suspension, modification, revocation or nonrenewal as a result of the execution
and delivery of this Agreement or the consummation of the DBC Contribution.
(b) The applicable DBC Companies possess all material Permits to own
or hold under lease and operate the DBC Assets and to conduct the Business as
currently conducted.
SECTION 3.10. Insurance. The DBC Companies maintain policies of fire
and casualty, liability and other forms of insurance with respect to the
Business in such amounts, with such deductibles and against such risks and
losses as are, in DBC's judgment, reasonable for the Business. The material
insurance policies maintained by the DBC Companies with respect to the Business
are listed in Schedule 3.10. All such policies are in full force and effect,
all premiums due and payable thereon have been paid, and no notice of
cancelation or termination has been received with respect to any such policy
which has not been replaced on substantially similar terms prior to the date of
such cancelation. To the knowledge of DBC, the Business has been conducted in a
manner so as to conform in all material respects to all applicable provisions
of such insurance policies.
SECTION 3.11. Sufficiency of DBC Assets. The DBC Assets, together
with the services to be provided by DBC under the DBC Services Agreement, are
sufficient for the conduct of the Business immediately following the Closing in
the same manner as currently conducted. There are not ally assets used, held for
use or intended to be used in the operation or conduct of the Business that do
not constitute DBC Assets or which are not to be made available to the Company
pursuant to the DBC Services Agreement.
SECTION 3.12. Taxes. (a) For purposes of this Agreement:
"Tax" means (i) any tax, governmental fee or other like assessment
or charge of any kind whatsoever (including any tax imposed under Subtitle A of
the Code and any net income, alternative or add-on minimum tax, gross income,
gross receipts, sales, use, ad valorem, value added,
16
transfer, franchise, profits, license, withholding tax on amounts paid, payroll,
employment, excise, severance, stamp, capital stock, occupation, property,
environmental or windfall profit tax, premium, custom, duty or other tax),
together with any interest, penalty, addition to tax or additional amount due,
imposed by any Governmental Entity (domestic or foreign) responsible for the
imposition of any such tax (a "Taxing Authority"), (ii) any liability for the
payment of any amount of the type described in clause (i) above as a result of a
party to this Agreement being a member of an affiliated, consolidated or
combined group with any other corporation at any time on or prior to the date
hereof and (iii) any liability of any person with respect to the payment of any
amounts of the type described in clause (i) or (ii) above as a result of any
express or implied obligation of such person to indemnify any other person.
"Code" means the Internal Revenue Code of 1986, as amended.
(b) Except as set forth in Schedule 3.12, (i) DBC, and any
affiliated group, within the meaning of Section 1504 of the Code, of which any
of the DBC Companies is or has been a member, has filed or caused to be filed in
a timely manner (within any applicable extension periods) all material Tax
returns, reports and forms required to be filed by the Code or by applicable
state, local or foreign Tax laws, (ii) all Taxes shown to be due on such
returns, reports and forms have been timely paid in full, or will be timely paid
in full, by the due date thereof, and (iii) no material Tax Liens have been
filed and no material claims are being asserted in writing with respect to any
Taxes.
(c) Except as set forth in Schedule 3.12, (i) neither DBC nor any of
its affiliates has made with respect to DBC, or any assets of the Business, any
consent under Section 341 of the Code, (ii) none of the DBC Assets is "tax
exempt use property" within the meaning of Section 168(h) of the Code, and (iii)
none of the DBC Assets is a lease made pursuant to Section 168(f) (8) of the
Internal Revenue Code of 1954.
(d) None of the DBC Companies is a "foreign person" within the
meaning of Section 1445 of the Code.
SECTION 3.13. Proceedings. Schedule 3.13 sets forth a list of all
pending Proceedings or claims with respect to which any of the DBC Companies
has been contacted in writing by counsel for the plaintiff or claimant, arising
out of the conduct of the Business or against or affecting
17
any DBC Asset and that (a) relate to or involve more than $5,000, (b) seek any
material injunctive relief or (c) may give rise to any legal restraint on or
prohibition against the transactions contemplated by this Agreement. Except as
set forth in Schedule 3.13, none of the Proceedings or claims listed in Schedule
3.13 as to which there is at least a reasonable possibility of adverse
determination would have, if so determined, individually or in the aggregate, a
DBC Material Adverse Effect. Except as set forth in Schedule 3.13, to the
knowledge of DBC, there are no unasserted claims of the type that would be
required to be disclosed in Schedule 3.13 if counsel for the claimant had
contacted DBC that if asserted would have at least a reasonable possibility of
an adverse determination. Except as set forth in Schedule 3.13, no DBC Company
is a party or subject to or in default under any material Judgment applicable to
the conduct of the Business or any DBC Asset or Assumed DBC Liability. Except as
set forth in Schedule 3.13, there is not any Proceeding or claim by any of the
DBC Companies pending, or which any of the DBC Companies intends to initiate,
against any other Person arising out of the conduct of the Business. Except as
set forth in Schedule 3.13, to the knowledge of DBC, there is no pending or
threatened investigation of or affecting the conduct of the Business or any DBC
Asset or Assumed DBC Liability.
SECTION 3.14. Benefit Plans. (a) Schedule 3.14 contains a list and
brief description of all "employee pension benefit plans" (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), maintained or contributed to by any of the DBC Companies for the
benefit of any officers or employees of the Business ("DBC Pension Plans") and
all "employee welfare benefit plans" (as defined in Section 3(1) of ERISA),
bonus, stock option, stock purchase, deterred compensation plans or arrangements
and other employee fringe benefit plans maintained, or contributed to, by any of
the DBC Companies for the benefit of any officers or employees of the Business
(all the foregoing, including DBC Pension Plans, being herein called "DBC
Benefit Plans"). DBC has made available to the Company true, complete and
correct copies of (i) each DBC Benefit Plan (or, in the case of any unwritten
DBC Benefit Plans, descriptions thereof), (ii) the two most recent annual
reports on Form 5500 (including all schedules and attachments thereto) filed
with the Internal Revenue Service with respect to each DBC Benefit Plan (if any
such report was required), (iii) the most recent summary plan description for
each DBC Benefit Plan for which such a summary plan description is required and
(iv) each trust
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agreement, group annuity contract or other funding and financing arrangement
relating to any DBC Benefit Plan.
(b) Each DBC Benefit Plan has been administered in all material
respects in accordance with its terms. The applicable DBC Companies and all the
DBC Benefit Plans are in compliance in all material respects with the applicable
provisions of ERISA, the Code, all other Applicable Laws and all applicable
collective bargaining agreements. Except as set forth in Schedule 3.14, all
material reports, returns and similar documents with respect to the DBC Benefit
Plans required to be filed with any Governmental Entity or distributed to any
DBC Benefit Plan participant have been duly and timely filed or distributed.
Except as set forth in Schedule 3.14, there are no Proceedings pending or, to
the knowledge of DBC, threatened against or involving any DBC Benefit Plan and
there are no investigations by any Governmental Entity or other claims (except
routine claims for benefits payable in the normal operation of the DBC Benefit
Plans) pending or, to the knowledge of DBC, threatened against or involving any
DBC Benefit Plan or asserting any rights to benefits under any DBC Benefit Plan.
(c) Except as set forth in Schedule 3.14, no employee or former
employee of the Business will become entitled to any bonus, retirement,
severance, job security or similar benefit or any enhanced benefit solely as a
result of the transactions contemplated hereby.
SECTION 3.15. Absence of Changes or Events. Except as set forth in
Schedule 3.15, since the date of the First Quarter Balance Sheet, there has not
been any material adverse change in the business, assets, condition (financial
or otherwise), results of operations or prospects of the Business, taken as a
whole. Except as set forth in Schedule 3.15, since the date of the First Quarter
Balance Sheet, DBC has caused the Business to be conducted in the ordinary
course and in substantially the same manner as previously conducted and has made
all reasonable efforts consistent with past practices to preserve the
relationships of the Business with customers, suppliers and others with whom the
Business deals.
SECTION 3.16. Compliance with Applicable Laws. Except as set forth
in Schedule 3.16, the Business is in compliance in all material respects with
all Applicable Laws, including those relating to occupational health and safety.
Except as set forth in Schedule 3.16, no DBC Company has received any written or
oral communication during the past three years from a Governmental Entity that
alleges that the Business is not in compliance in any
19
material respect with any Applicable Laws. No DBC Company has received any
written notice that any investigation or review by any Governmental Entity with
respect to any DBC Asset or the Business is pending or that any such
investigation or review is contemplated. This Section 3.16 does not relate to
matters with respect to Taxes, which are the subject of Section 3.12.
SECTION 3.17. Transactions with Affiliates. Except as set forth in
Schedule 3.17, none of the Contracts set forth in Schedule 3.07 between the
Business, on the one hand, and DBC or any of its affiliates, on the other hand,
will continue in effect subsequent to the Closing.
SECTION 3.18. Effect of Transaction. Except as set forth in Schedule
3.18, no creditor, employee, client, customer or other person having a material
business relationship with the Business has informed any of the DBC Companies
that such person intends to change such relationship because of the contribution
of the Business or the consummation of any other transaction contemplated
hereby.
SECTION 3.19. Disclosure. No representation or warranty of DBC
contained in this Agreement or in any Ancillary Agreement, and no statement
contained in any document, certificate or Schedule furnished or to be furnished
by or on behalf of DBC to CBS or the Company or any of their representatives
pursuant to this Agreement, contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact necessary, in
light of the circumstances under which it was or will be made, in order to make
the statements herein or therein not misleading or necessary in order to fully
and fairly provide the information required to be provided in any such document,
certificate or Schedule.
ARTICLE IV
Representations and Warranties of CBS
CBS hereby represents and warrants to DBC and the Company, as of the
date of this Agreement, as follows:
SECTION 4.01. Organization, Standing and Power. CBS is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has full corporate power and authority
and possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to own, lease or
20
otherwise hold its properties and assets and to conduct its businesses as
presently conducted, other than such franchises, licenses, permits,
authorizations and approvals, the lack of which, individually or in the
aggregate, have not had and could not reasonably be expected to have a material
adverse effect on the ability of CBS to perform its obligations under this
Agreement and the Ancillary Agreements to which it is a party or to consummate
the CBS Contribution and the other transactions contemplated hereby and thereby
(a "CBS Material Adverse Effect").
SECTION 4.02. Authority; Execution and Delivery; Enforceability. CBS
has full power and authority to execute this Agreement and the Ancillary
Agreements to which it is a party and to consummate the CBS Contribution and the
other transactions contemplated hereby and thereby. The execution and delivery
by CBS of this Agreement and the Ancillary Agreements to which it is a party and
the consummation by it of the CBS Contribution and the other transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action. CBS has duly executed and delivered this Agreement and each
Ancillary Agreement to which it is a party, and this Agreement and each
Ancillary Agreement to which it is a party constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms except
as enforcement may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally or equitable principles relating to or
limiting creditors' rights generally.
SECTION 4.03. No Conflicts; Consents. The execution and delivery by
CBS of this Agreement and each Ancillary Agreement to which it is a party and
the consummation of the CBS Contribution and the other transactions contemplated
hereby and thereby and compliance by CBS with the terms hereof and thereof do
not conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a material benefit
under or result in the creation of any Lien upon any of the properties or assets
of CBS or any of its subsidiaries under, any provision of (i) the certificate of
incorporation or by-laws of CBS or any of its subsidiaries, (ii) any Contract to
which CBS or any of its subsidiaries is a party or by which any of their
respective properties or assets is bound or (iii) any Judgment or Applicable Law
applicable to CBS or any of its subsidiaries or their respective properties or
assets, other than, in the case of clauses (ii) and (iii) above, any such items
that, individually or in the aggregate, have not had and could not reasonably be
21
expected to have a CBS Material Adverse Effect. No Consent of, or registration,
declaration or filing with, any Governmental Entity is required to be obtained
or made by or with respect to CBS or any of its subsidiaries in connection with
(A) the execution, delivery and performance of this Agreement or any Ancillary
Agreement or the consummation of the CBS Contribution or the other transactions
contemplated hereby and thereby or (B) the conduct by the Company of the
Business following the Closing as conducted on the date hereof.
ARTICLE V
Covenants
SECTION 5.01. Reasonable Best Efforts. (a) Each party shall, and
shall cause its affiliates to, use its reasonable best efforts (at its own
expense) to obtain, and to cooperate in obtaining, all consents from third
parties necessary or appropriate to permit the Contributions to be completed.
SECTION 5.02. Expenses; Transfer Taxes. (a) Except as set forth in
Section 5.02(b) below and in Sections 5.03 and 7.03, all costs and expenses
incurred in connection with this Agreement and the Ancillary Agreements and the
transactions contemplated hereby and thereby shall be paid by the party
incurring such expense, including all costs and expenses incurred pursuant to
Sections 1.04 and 5.01.
(b) The Company shall be responsible for and shall pay, as and when
incurred, all Transfer Taxes, documentary Taxes and filing or recording fees
applicable to the Contributions up to a maximum aggregate amount of $50,000; to
the extent that the aggregate amount of such Taxes and fees exceeds $50,000, the
party incurring such Tax or fee shall be responsible for its payment. Each party
shall use reasonable efforts to avail itself of any available exemptions from
any such Taxes or fees, and to cooperate with the other parties in providing any
information and documentation that may be necessary to obtain such exemptions.
SECTION 5.03. Post-Closing Cooperation. (a) CBS, DBC and the Company
shall cooperate with each other, and shall cause their respective officers,
employees, agents, auditors and representatives to cooperate with each other,
after the Closing to ensure the orderly transition of the Business from DBC to
the Company and to minimize any
22
disruption to the Business that might result from the transactions contemplated
hereby. After the Closing, upon reasonable written notice, CBS, DBC and the
Company shall furnish or cause to be furnished to each other and to their
respective employees, counsel, auditors and representatives access, during
normal business hours, to such information and assistance relating to the
Business (to the extent within the control of such party) as is reasonably
necessary for financial reporting and accounting matters.
(b) After the Closing, upon reasonable written notice, CBS, DBC and
the Company shall furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance relating to the DBC Assets
(including, access to books and records) and the Contributions, to the extent
within the control of such party, as is reasonably necessary for the filing of
all Tax returns, and making of any election related to Taxes, the preparation
for any audit by any Taxing Authority, and the prosecution or defense of any
claim, suit or proceeding related to any Tax return. CBS, DBC and the Company
shall cooperate with each other party in the conduct of any audit or other
proceeding relating to Taxes involving the Business.
(c) Each party shall reimburse the others for reasonable
out-of-pocket costs and expenses incurred in assisting such party pursuant to
this Section 5.03. No party shall be required by this Section 5.03 to take any
action that would unreasonably interfere with the conduct of its business or
unreasonably disrupt its normal operations.
SECTION 5.04. Further Assurances. From time to time, as and when
requested by any party, each party shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions (subject to Section 5.01),
as such other party may reasonably deem necessary or desirable to consummate the
transactions contemplated by this Agreement and the Ancillary Agreements,
including, in the case of CBS and DBC, executing and delivering to the Company
such assignments, deeds, bills of sale, consents and other instruments as the
Company or its counsel may reasonably request as necessary or desirable for such
purpose.
SECTION 5.05. Year 2000 Compliance. Notwithstanding anything herein
to the contrary, DBC agrees to use its best efforts (at its own expense) to
ensure that all Contributed Intellectual Property, as applicable, is free of any
"Year 2000 Problem" such that such Intellectual
23
Property will not experience any malfunctions or other usage problems in
connection with the year 2000 (and later years) as distinct from the years 1900
through 1999, and earlier years.
ARTICLE VI
Indemnification
SECTION 6.01. Indemnification by DBC. DBC shall indemnify each of
CBS and the Company and each of their respective affiliates and each of their
respective officers, directors, employees, stockholders, agents and
representatives against, and hold them harmless from, any loss, liability,
claim, damage or expense (including reasonable legal fees and expenses)
("Losses"), as incurred (payable promptly upon written request), arising from,
in connection with or otherwise with respect to:
(i) any breach of any representation or warranty of DBC that
survives the Closing and is contained in this Agreement, in any Ancillary
Agreement or in any document delivered in connection herewith;
(ii) any breach of any covenant of DBC contained in this Agreement
or in any Ancillary Agreement;
(iii) any Excluded DBC Liability;
(iv) the disclosure by any current or former Personnel of any
proprietary information of DBC and its affiliates;
(v) the failure to comply with statutory provisions relating to bulk
sales and transfers, if applicable; and
(vi) any fees, expenses or other payments incurred or owed by DBC to
any brokers, financial advisors or comparable other persons retained or
employed by it in connection with the transactions contemplated by this
Agreement.
SECTION 6.02. Indemnification by CBS. CBS shall indemnify each of
DBC and the Company and each of their respective affiliates and each of their
respective officers, directors, employees, stockholders, agents and
representatives against, and hold them harmless from, any Losses, as incurred
(payable promptly upon written request),
24
arising from, in connection with or otherwise with respect to:
(i) any breach of any representation or warranty of CBS that
survives the Closing and is contained in this Agreement, in any Ancillary
Agreement or in any document delivered in connection herewith;
(ii) any breach of any covenant of CBS contained in this Agreement
or in any Ancillary Agreement;
(iii) any fees, expenses or other payments incurred or owed by CBS
to any brokers, financial advisors or comparable other persons retained or
employed by it in connection with the transactions contemplated by this
Agreement.
SECTION 6.03. Calculation of Losses. The amount of any Loss for
which indemnification is provided under this Article VI shall be net of any
amounts actually recovered by the indemnified party under insurance policies
with respect to such Loss and shall be (i) increased to take account of any net
Tax cost incurred by the indemnified party arising from the receipt of indemnity
payments hereunder (grossed up for such increase) and (ii) reduced to take
account of any net Tax benefit realized by the indemnified party arising from
the incurrence or payment of any such Loss. In computing the amount of any such
Tax cost or Tax benefit, the indemnified party shall be deemed to recognize all
other items of income, gain, loss, deduction or credit before recognizing any
item arising from the receipt of any indemnity payment hereunder or the
incurrence or payment of any indemnified Loss.
SECTION 6.04. Termination of Indemnification. The obligations to
indemnify and hold harmless any party, (i) pursuant to Section 6.01(i) or
6.02(i), shall terminate when the applicable representation or warranty
terminates pursuant to Section 6.06 and (ii) pursuant to the other clauses of
Section 6.01 or 6.02 shall not terminate; provided, however, that such
obligations to indemnify and hold harmless shall not terminate with respect to
any item as to which the person to be indemnified shall have, before the
expiration of the applicable period, previously made a claim by delivering a
notice of such claim (stating in reasonable detail the basis of such claim)
pursuant to Section 6.05 to the party to be providing the indemnification.
SECTION 6.05. Procedures. (a) In order for a party (the "indemnified
party"), to be entitled to any
25
indemnification provided for under this Agreement in respect of, arising out of
or involving a claim made by any person against the indemnified party (a "Third
Party Claim"), such indemnified party must notify the indemnifying party in
writing of the Third Party Claim promptly following receipt by such indemnified
party of written notice of the Third Party Claim; provided, however, that
failure to give such notification shall not affect the indemnification provided
hereunder except to the extent the indemnifying party shall have been actually
and materially prejudiced as a result of such failure. Thereafter, the
indemnified party shall deliver to the indemnifying party, promptly following
the indemnified party's receipt thereof, copies of all notices and documents
(including court papers) received by the indemnified party relating to the Third
Party Claim and not also addressed to the indemnifying party.
(b) If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
indemnifying party; provided, however, that such counsel is not reasonably
objected to by the indemnified party. Should the indemnifying party so elect to
assume the defense of a Third Party claim, the indemnifying party shall not be
liable to the indemnified party for any legal expenses subsequently incurred by
the indemnified party in connection with the defense thereof. If the
indemnifying party assumes such defense, the indemnified party shall have the
right to participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the indemnifying party, it being
understood that the indemnifying party shall control such defense. The
indemnifying party shall be liable for the fees and expenses of counsel employed
by the indemnified party for any period during which the indemnifying party has
not assumed the defense thereof. If the indemnifying party chooses to defend or
prosecute a Third Party Claim, all the indemnified parties shall cooperate in
the defense or prosecution thereof. Such cooperation shall include the retention
and (upon the indemnifying party's request) the provision to the indemnifying
party of records and information that are reasonably relevant to such Third
Party Claim, and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. Whether or not the indemnifying party assumes the defense of a Third
Party Claim, the indemnified party shall not admit any liability with respect
to, or settle, compromise or discharge, such Third Party Claim without the
indemnifying party's prior written consent (which consent shall not be
unreasonably
26
withheld). If the indemnifying party assumes the defense of a Third Party Claim,
the indemnified party shall agree to any settlement, compromise or discharge of
a Third Party Claim that the indemnifying party may recommend and that by its
terms obligates the indemnifying party to pay the full amount of the liability
in connection with such Third Party Claim, which releases the indemnified party
completely in connection with such Third Party Claim and that would not
otherwise adversely affect the indemnified party. Notwithstanding the foregoing,
the indemnifying party shall not be entitled to assume the defense of any Third
Party Claim (and shall be liable for the fees and expenses of counsel incurred
by the indemnified party in defending such Third Party Claim) if the Third Party
Claim seeks an order, injunction or other equitable relief or relief for other
than money damages against the indemnified party that the indemnified party
reasonably determines, after conferring with its outside counsel, cannot be
separated from any related claim for money damages. If such equitable relief or
other relief portion of the Third Party Claim can be so separated from that for
money damages, the indemnifying party shall be entitled to assume the defense of
the portion relating to money damages.
(c) Other Claims. In the event any indemnified party should have a
claim against any indemnifying party under Section 6.01 or 6.02 that does not
involve a Third Party Claim being asserted against or sought to be collected
from such indemnified party, the indemnified party shall deliver notice of such
claim with reasonable promptness to the indemnifying party. The failure by any
indemnified party so to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to such indemnified party
under Section 6.01 or 6.02, except to the extent that the indemnifying party
demonstrates that it has been materially prejudiced by such failure. If the
indemnifying party does not notify the indemnified party within 10 calendar days
following its receipt of such notice that the indemnifying party disputes its
liability to the indemnified party under Section 6.01 or 6.02, such claim
specified by the indemnified party in such notice shall be conclusively deemed a
liability of the indemnifying party under Section 6.01 or 6.02 and the
indemnifying party shall pay the amount of such liability to the indemnified
party on demand or, in the case of any notice in which the amount of the claim
(or any portion thereof) is estimated, on such later date when the amount of
such claim (or such portion thereof) becomes finally determined. If the
indemnifying party has timely disputed its liability with respect to such claim,
as provided above, the indemnifying party and the indemnified party shall
proceed in good faith to negotiate a
27
resolution of such dispute and, if not resolved through negotiations, such
dispute shall be resolved by litigation in an appropriate court of competent
jurisdiction.
SECTION 6.06. Survival of Representations. The representations and
warranties contained in this Agreement, in any Ancillary Agreement or in any
document delivered in connection herewith shall survive the Closing solely for
purposes of Article VI and shall terminate at the close of business five years
following the date hereof.
ARTICLE VII
General Provisions
SECTION 7.01. Assignment. This Agreement and the rights and
obligations hereunder shall not be assignable or transferable by CBS, DBC or the
Company without the prior written Consent of the other parties hereto; provided,
however, that CBS may assign this Agreement and its rights and obligations
hereunder to any entity controlling, controlled by or under common control with,
CBS, or to any entity that acquires CBS by purchase of stock or by merger or
otherwise, or by acquiring all or substantially all of CBS's assets, provided
that any such assignee succeeds to all of the rights and is subject to all of
the obligations of CBS under this Agreement. Any attempted assignment in
violation of this Section 7.01 shall be null and void ab initio.
SECTION 7.02. No Third-Party Beneficiaries. Except as provided in
Article VI, this Agreement is for the sole benefit of the parties hereto and
their permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any person, other than the parties hereto and such assigns,
any legal or equitable rights hereunder.
SECTION 7.03. Attorney Fees. A party in breach of this Agreement
shall, on demand, indemnify and hold harmless each other party for and against
all reasonable out-of-pocket expenses, including legal tees, incurred by such
other party by reason of the enforcement and protection of its rights under this
Agreement. The payment of such expenses is in addition to any other relief to
which such other party may be entitled.
SECTION 7.04. Notices. All notices or other communications required
or permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent,
28
postage prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:
(i) if to the Company,
c/o Data Broadcasting Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Attention of Xxxxx Xxxxxx
with a copy to CBS and DBC as set forth below;
(ii) if to CBS,
CBS Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention of Xxxxx Xxxxxxxxx
with copies to:
CBS Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention of Xxxxxxx Xxxxx, and
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention of Xxxxx X. Xxxxxx, Esq.; and
(iii) if to DBC,
Data Broadcasting Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Attention of Xxxx Xxxxxxxxx
29
with a copy to:
Camhy Xxxxxxxxx & Xxxxx LLP
0000 Xxxxxxxx
Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention of Xxxx X. Annex, Esq.
SECTION 7.05. Interpretation; Exhibits and Schedules; Certain
Definitions. (a) The headings contained in this Agreement, in any Exhibit or
Schedule hereto and in the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. All Exhibits and Schedules annexed hereto or referred to herein
are hereby incorporated in and made a part of this Agreement as if set forth in
full herein. Any capitalized terms used in any Schedule or Exhibit but not
otherwise defined therein, shall have the meaning as defined in this Agreement.
When a reference is made in this Agreement to a Section, Exhibit or Schedule,
such reference shall be to a Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated.
(b) For all purposes hereof:
"affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
"including" means including, without limitation.
"person" means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, Governmental Entity or other
entity.
"subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person.
SECTION 7.06. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been
30
signed by each of the parties and delivered to each of the other parties.
SECTION 7.07. Entire Agreement. This Agreement and the Ancillary
Agreements, along with the Schedules and Exhibits thereto, contain the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings
relating to such subject matter. Neither party shall be liable or bound to any
other party in any manner by any representations, warranties or covenants
relating to such subject matter except as specifically set forth herein or in
the Ancillary Agreements.
SECTION 7.08. Severability. If any provision of this Agreement (or
any portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other persons or circumstances.
SECTION 7.09. Amendments and Wavers. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. By an instrument in writing, any two parties hereto may waive
compliance by the third party with any term or provision of this Agreement that
such third party was or is obligated to comply with or perform.
SECTION 7.10. Consent to Jurisdiction. Each of CBS, DBC and the
Company irrevocably submits to the exclusive jurisdiction of (a) the Supreme
Court of the State of New York, New York County, and (b) the United States
District Court for the Southern District of New York, for the purposes of any
suit, action or other proceeding arising out of this Agreement, any Ancillary
Agreement or any transaction contemplated hereby or thereby. Each of CBS, DBC
and the Company agrees to commence any such action, suit or proceeding either in
the United States District Court for the Southern District of New York or if
such suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the Supreme Court of the State of New York, New York
County. Each of CBS, DBC and the Company further agrees that service of any
process, summons, notice or document by U.S. registered mail to such party's
respective address set forth above shall be effective service of process for any
action, suit or proceeding in New York with respect to any matters to which it
has submitted
31
to jurisdiction in this Section 7.10. Each of CBS, DBC and the Company
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement, any Ancillary
Agreement or the transactions contemplated hereby and thereby in (i) the Supreme
Court of the State of New York, New York County, or (ii) the United States
District Court for the Southern District of New York, and hereby and thereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
SECTION 7.11. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.
IN WITNESS WHEREOF, CBS, DBC and the Company have duly executed this
Agreement as of the date first written above.
CBS INC.
by /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
DATA BROADCASTING CORPORATION
by /s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
XXXXXXXXXXX.XXX, LLC
by /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman
