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Exhibit 10.2
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
THE SHAREHOLDERS OF
SPACE MEDIA HOLDINGS LIMITED
AND
ENGAGE ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ENGAGE, INC.
DATED AS OF
AUGUST 31, 2000
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STOCK PURCHASE AGREEMENT
Stock Purchase Agreement, dated as of August 31, 2000 by and among
Engage, Inc. ("Parent"), a Delaware corporation, Engage Acquisition Corp. (the
"Purchaser"), a Cayman Islands corporation and a wholly owned subsidiary of
Parent, and the holders of shares of Space Media Holdings Limited, a British
Virgin Islands corporation, listed on SCHEDULE I to this Agreement
(collectively, the "Selling Shareholders"). Certain capitalized terms used in
this Agreement have the meanings assigned to them in Article 9.
WHEREAS, the Selling Shareholders collectively own 100% of the issued
and outstanding shares of Space Media Holdings Limited on a fully-diluted basis
(the "Shares"); and
WHEREAS, the Selling Shareholders intend to sell, and the Purchaser
intends to purchase the Shares upon the terms and subject to the conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual representations and
covenants set forth in this Agreement, intending to be legally bound, the
parties agree as follows:
ARTICLE 1.
PURCHASE AND SALE OF SHARES
Section 1.1 SALE AND TRANSFER OF SHARES.
Subject to the terms and conditions of this Agreement, at the Closing,
the Selling Shareholders shall sell and deliver, or provide documents sufficient
to ensure the transfer on the Closing Date of, the Shares to the Purchaser, free
and clear of all Encumbrances.
Section 1.2 CONSIDERATION.
Subject to the terms and conditions of this Agreement, in
consideration of the sale and delivery to the Purchaser of the Shares, Parent
shall issue to each Selling Shareholder the number of Parent Shares set forth
opposite such Selling Shareholder's name on SCHEDULE I attached hereto. The
aggregate number of Parent Shares to be delivered at Closing (the "Aggregate
Consideration") has been determined by dividing US$65,000,000 by US$10.65 (the
"Average Closing Price").
Section 1.3 INDEMNIFICATION ESCROW.
At the Closing, 15% of the Aggregate Consideration (the
"Indemnification Shares") will be placed in escrow to secure the indemnification
obligations of the Selling Shareholders as set forth in Article 8 pursuant to
the terms of the Escrow Agreement attached as EXHIBIT A (the "Indemnification
Escrow Agreement"). Subject to the terms of the Indemnification Escrow
Agreement, one half of the Indemnification Shares will be held in escrow
pursuant to the Indemnification Escrow Agreement for a period of one year and
one half of the Indemnification Shares will be held in escrow pursuant to the
Indemnification Escrow Agreement for a period of two years.
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Section 1.4 PERFORMANCE ESCROW.
In addition to the Indemnification Shares, 23% of the Aggregate
Consideration (the "Performance Shares") will be held in escrow pursuant to the
terms of the Escrow Agreement attached as EXHIBIT B (the "Performance Escrow
Agreement"), until such date (the "Calculation Date") as the Purchaser's
independent auditors have determined the Company's revenues for the 12-month
period ending December 31, 2000, as calculated in accordance with GAAP (the
"Company's 2000 Revenues"). Company's 2000 Revenues shall include all revenues
generated by the Company other than revenues from products and services listed
on SCHEDULE II attached. If the Shareholders' Agent (as defined in Section 1.7)
does not agree with the determination of the Purchaser's auditors, the matter
shall be determined as set forth in Section 1.5. If the Company's 2000 Revenues
are at least US$13,500,000, then the Performance Shares will be released from
escrow to the Selling Shareholders, pro rata. If the Company's 2000 Revenues are
less than US$10,400,000, then the Performance Shares will be returned to Parent
as treasury stock and the Selling Shareholders will have no further right to or
interest in the Performance Shares. If the Company's 2000 Revenues are equal to
or greater than US$10,400,000, but less than US$13,500,000, then (a) such number
of Performance Shares shall be released to the Selling Shareholders, pro rata,
as is determined by (i) dividing the Company's 2000 Revenues by US$13,500,000
and (ii) multiplying such amount by the number of all Performance Shares; and
(b) the remaining Performance Shares that are not released to the Selling
Shareholders pursuant to clause (a) above shall be returned to Parent as
treasury stock and the Selling Shareholders shall have no further right to or
interest in such Performance Shares. For purposes of this Section 1.4, the
Company's operating expenses shall not vary from those contained in the
operating budget attached as SCHEDULE III without the written consent of the
Purchaser and the Selling Shareholders. For the purposes of this Section 1.4,
(i) any revenues derived from the sale by Parent or any of its Affiliates of
technology or Intangible Property (as defined in Section 4.22) designed or
developed by the Company prior to the date of this Agreement shall be included
as revenue in the Company's 2000 Revenues, (ii) any revenues derived from sales
of products or services by the Company to any Selling Shareholder or any of its
Affiliates shall be included as revenue in the Company's 2000 Revenues as long
as such revenues are consistent with the Company's past business practices or
Parent otherwise consents to the inclusion of such revenues, and (iii) any
non-operating revenues shall be excluded as revenue.
Section 1.5 DISPUTE RESOLUTION.
As promptly as practicable following the Calculation Date, the
Purchaser shall deliver to the Shareholders' Agent a statement of the Company's
2000 Revenues (the "Company's 2000 Revenues Statement"). The Shareholders' Agent
may deliver to the Purchaser within 30 days after receiving the Company's 2000
Revenue Statement a detailed notice (an "Objection Notice") describing any good
faith objections to the statement. Failure of the Shareholders' Agent to so
object to the Company's 2000 Revenues Statement shall constitute acceptance
thereof by the Shareholders' Agent. The Purchaser and the Shareholders' Agent
shall use reasonable efforts to resolve any such objections, but if they do not
reach a final resolution within 15 days after the Purchaser has received the
Shareholders' Agent's Objection Notice, the Purchaser and the Shareholders'
Agent shall select an internationally recognized accounting firm
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mutually acceptable to them (the "Neutral Accountants") to resolve any remaining
objections. If the Purchaser and the Shareholders' Agent are unable to agree on
the choice of Neutral Accountants, each of the Purchaser and the Shareholders'
Agent shall selected an internationally recognized accounting firm, and those
two firms shall select a third internationally recognized accounting firm to
serve as the Neutral Accountants. The Purchaser and the Shareholders' Agent
shall jointly instruct the Neutral Accountants to resolve any unresolved
objections of the Shareholders' Agent and deliver the Company's 2000 Revenues
Statement within 30 days after the date of its appointment. The determination by
the Neutral Accountants shall be conclusive and binding upon the Purchaser and
the Shareholders' Agent, absent fraud or manifest error. If the Shareholders'
Agent presents an Objection Notice, and the dispute is resolved by the Neutral
Accountants in favor of the Purchaser, then the Selling Shareholders shall pay
the costs and expenses of the Neutral Accountants. If the Neutral Accountants
find in favor of the Selling Shareholders, then the Purchaser shall pay the
costs and expenses of the Neutral Accountants. If the Neutral Accountants render
a decision that finds in favor of neither party, then the costs and expenses of
the Neutral Accountants shall be borne equally by the Purchaser, on the one hand
and the Selling Shareholders as a group, on the other.
Section 1.6 ESCROW EXPENSES.
The costs and expenses of the escrow agent under the Indemnification
Escrow Agreement and the Performance Escrow Agreement shall be borne by the
Purchaser.
Section 1.7 SHAREHOLDERS' AGENT.
The Selling Shareholders shall appoint Opulent Wealth Limited
(represented by either Xxxxx Xxxxxx or Xxxxxxx Xxxx) as their agent (the
"Shareholders' Agent") to serve on behalf of the Selling Shareholders in
connection with the Indemnification Escrow Agreement referenced in Section 1.3,
the Performance Escrow Agreement referenced in Section 1.4, and the
indemnification obligations of the Selling Shareholders as set forth in
Article 8.
ARTICLE 2.
THE CLOSING
Section 2.1 THE CLOSING.
The closing of the sale and transfer of the Shares by Selling
Shareholders to the Purchaser (the "Closing") shall take place at the offices of
Xxxxxxxxxx Xxxxxxx & Lo, 00 Xxxxxxxxx Xxxxxxx, 00xx Xxxxx, Xxxxxxxxx Xxxxx, Xxxx
Xxxx, at 6 p.m., local time, on the date of this Agreement (the "Closing Date").
Section 2.2 DELIVERIES BY SELLING SHAREHOLDERS.
At the Closing, Selling Shareholders shall deliver to the Purchaser:
certificates representing all of the Shares, each such certificate to be duly
and validly endorsed in favor of the Purchaser or accompanied by a separate
stock power duly and validly executed by Selling
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Shareholders and otherwise sufficient to vest in the Purchaser good title to
such Shares; or, in the case some certificates are not delivered, documents
sufficient to ensure transfer of those Shares to the Purchaser (including, but
not limited to, a copy of the current register of members, share transfer forms,
minutes of the Company's Board of Directors approving the registration of the
Purchaser as a member, a waiver of the entitlement to a share certificate with
confirmation from the Company's Board of Directors that no such certificate been
issued, and irrevocable instructions to HWR Services to register the Purchaser
as a member); and all other previously undelivered documents required to be
delivered by the Selling Shareholders to the Purchaser at or prior to the
Closing as set forth in Section 7.2 of this Agreement.
Section 2.3 DELIVERIES BY PURCHASER.
(a) At the Closing, the Purchaser shall deliver to the Selling
Shareholders:
(i) certificates representing the Aggregate Consideration issued
in the name of the respective Selling Shareholder representing the number of
Parent Shares as set forth on SCHEDULE I under the heading "Shares Delivered At
Closing"; and
(ii) such other documents as are required to be delivered by the
Purchaser and or Parent to Selling Shareholders as set forth in Section 7.3 of
this Agreement.
(b) At the Closing, the Purchaser shall deliver to the escrow agent
certificates representing the Indemnification Shares and the Performance Shares
and shall deliver to the Selling Shareholders written confirmation from the
escrow agent of such delivery.
Section 2.4 DIRECTORS.
At Closing, the Company's Board of Directors will consist of five
members, three representatives of the Purchaser, and two key managers of the
Company, Xxxxx XxXxxxxx and Xxxxxxx Xxxxx (each, a "Key Manager"). Each Key
Manager will continue to serve as a director until the earlier of (i) an initial
public offering of the Company, or (ii) the cessation or termination of their
employment with the Company.
Section 2.5 FURTHER ASSURANCES.
At any time and from time to time after the Closing, at the
Purchaser's request and without further consideration, each of the Selling
Shareholders shall promptly execute and deliver such instruments of sales,
transfer, conveyance, assignment and confirmation, and take all such other
action as the Purchaser or Parent may reasonably request, more effectively to
transfer, convey and assign to the Purchaser, and to confirm the Purchaser's
title to, all of the Shares owned by such Selling Shareholder, to put the
Purchaser in actual possession and operating control of the assets, properties
and business of the Company to assist the Purchaser in exercising all rights
with respect thereto and to carry out the purpose and intent of this Agreement.
At any time and from time to time after termination of the Indemnification
Escrow Agreement and the Performance Escrow Agreement, as the case may be, at
the Selling Shareholders' request and without further consideration, the
Purchaser and Parent shall promptly execute and deliver such instruments of
sale, transfer, conveyance, assignment and confirmation,
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and take all such other action as a Selling Shareholder may reasonably request
more effectively to transfer, convey and assign to the relevant Selling
Shareholder (or as it may direct) and to confirm the Selling Shareholder's (or
its nominee) title to, the number of Parent Shares as described in this
Agreement to put such Selling Shareholder (or its nominee) in actual possession
of the required number of Parent Shares, and to carry out the purpose and intent
of this Agreement.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
OF SELLING SHAREHOLDERS REGARDING THE SHARES
Except as set forth in the Disclosure Schedule prepared by the Selling
Shareholders and delivered to the Purchaser simultaneously with the execution of
this Agreement, each Selling Shareholder severally represents and warrants to
the Purchaser that all of the statements contained in this Article 3 are true as
of the date of this Agreement (or, if made as of a specified date, as of such
date). The Disclosure Schedule shall be arranged in paragraphs corresponding to
the numbered and lettered paragraphs contained in this Article 3, and the
disclosures in any paragraph of the Disclosure Schedule shall qualify only the
corresponding paragraph in this Article 3.
Section 3.1 ENCUMBRANCES.
Such Selling Shareholder has good and valid title to the Shares which
are to be transferred to the Purchaser by such Selling Shareholder pursuant
hereto, free and clear of any and all Encumbrances. SCHEDULE I attached hereto
sets forth a true and correct description of all Shares owned by such Selling
Shareholder.
Section 3.2 TITLE.
Such Selling Shareholder has the full right, power and authority to
enter into this Agreement and to transfer, convey and sell to the Purchaser at
the Closing the Shares to be sold by such Selling Shareholder hereunder and,
upon consummation of the purchase contemplated hereby, the Purchaser will
acquire from such Selling Shareholder good and valid title to such Shares, free
and clear of Encumbrances.
Section 3.3 JUDGMENT.
Such Selling Shareholder is not a party to, subject to or bound by any
agreement or any judgment, order, writ, prohibition, injunction or decree of any
court or other governmental body which would prevent the execution or delivery
of this Agreement by such Selling Shareholder or the transfer, conveyance and
sale of the Shares to be sold by such Selling Shareholder to the Purchaser
pursuant to the terms hereof.
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Section 3.4 BROKERS.
Except as disclosed on SCHEDULE 3.4, such Selling Shareholder has not
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.
Section 3.5 NON-U.S. PERSON.
Such Selling Shareholder is not a "U.S. person" (as defined in Rule
902 of Regulation S under the Securities Act) and is acquiring the Parent Shares
in an offshore transaction for its own account for investment and not with a
view towards the resale, transfer or distribution thereof, nor with any present
intention of reselling, transferring or distributing the Parent Shares, but
subject, nevertheless, to any requirement of law that the disposition of the
Selling Shareholder's property shall at all times be within the Selling
Shareholder's control, and without prejudice to the Selling Shareholder's right
at all times to sell or otherwise dispose of all or any part of such securities
under a registration under the Securities Act or under an exemption from the
registration available under the Securities Act. Such Selling Shareholder is not
a citizen or resident of the United States for United States federal income tax
purposes.
Section 3.6 LEGEND.
Such Selling Shareholder acknowledges that the following legend will
be placed on the certificates representing the Parent Shares:
"These shares ("Shares") have not been registered under the U.S.
Securities Act of 1933, as amended (the "Act"), and, accordingly, may
not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons, except as set forth below. By its
acquisition hereof, the holder (1) represents that it is not a U.S.
person and is acquiring these Shares in an offshore transaction, (2)
agrees that it will not resell or otherwise transfer these Shares
except (A) to the Company or any subsidiary thereof, (B) pursuant to
an effective registration statement under the Act, (C) inside the
United States, to an accredited investor that, prior to such transfer,
furnishes to the Company a signed letter containing certain
representations and agreements relating to the restrictions on
transfer of these Shares (the form of which letter can be obtained
from the company), (D) outside the United States, in an offshore
transaction in compliance with Rules 904 and 905 under the Act, (E)
pursuant to the exemption from registration provided by Rule 144 under
the Act (if available), or (F) pursuant to any other exemption from
registration under the Securities Act (if available) and (3) agrees
that it will give each person to whom these Shares are transferred a
notice substantially to the effect of this legend. In connection with
any transfer of these Shares pursuant to clauses (C), (E) or (F)
above, the holder must, prior to such transfer, furnish to the company
such certifications, legal opinions or other information as it may
reasonably require to confirm that such transfer is
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being made pursuant to an exemption or in a transaction not subject to
the registration requirements of the Act. As used herein, the terms
'offshore transaction,' 'United States,' and 'U.S. Person' have the
meanings given to them by Regulation S under the Act."
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF SELLING SHAREHOLDERS
REGARDING THE COMPANY
Except as set forth in the Disclosure Schedule prepared by the Selling
Shareholders and delivered to the Purchaser simultaneously with the execution of
this Agreement, the Selling Shareholders, jointly and severally, represent and
warrant to the Purchaser that all of the statements contained in this Article 4
are true as of the date of this Agreement (or, if made as of a specified date,
as of such date). The Disclosure Schedule shall be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article
4, and the disclosures in any paragraph of the Disclosure Schedule shall qualify
only the corresponding paragraph in this Article 4.
Section 4.1 ORGANIZATION.
The Company is (a) a corporation duly organized, validly existing and
in good standing under the laws of the British Virgin Islands or in the country
of its incorporation, (b) has all requisite corporate power and authority and
all necessary governmental approvals to carry on its business as now being
conducted and to own the properties and assets it now owns and (c) is duly
qualified or licensed to do business as a foreign corporation in good standing
in every jurisdiction in which such qualification is required. The Selling
Shareholders have delivered to the Purchaser complete and correct copies of the
certificate of incorporation and memorandum and articles of association of the
Company as presently in effect.
Section 4.2 AUTHORIZATION; VALIDITY OF AGREEMENT.
The Selling Shareholders have full power and authority to execute and
deliver this Agreement and to consummate the Transactions. The execution,
delivery and performance by the Selling Shareholders of this Agreement and the
consummation of the Transactions have been duly authorized by the Company in
accordance with its internal approval guidelines for transactions of this type,
and no other corporate action on the part of the Company or the Selling
Shareholders is necessary to authorize the consummation of the Transactions. No
vote of, or consent by, the holders of any class or series of shares issued by
the Company is necessary to authorize the execution and delivery by Selling
Shareholders of this Agreement or the consummation by it of the Transactions.
Section 4.3 EXECUTION; VALIDITY OF AGREEMENT.
This Agreement has been duly executed and delivered by the Selling
Shareholders, and, assuming due and valid authorization, execution and delivery
by the
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Purchaser, is a valid and binding obligation of the Selling Shareholders,
enforceable against the Selling Shareholders in accordance with its terms,
subject only to applicable laws relating to bankruptcy and insolvency.
Section 4.4 CONSENTS AND APPROVALS; NO VIOLATIONS.
None of the execution, delivery or performance of this Agreement by
the Selling Shareholders, the consummation by the Selling Shareholders of the
Transactions or compliance by the Selling Shareholders with any of the
provisions of this Agreement will (a) conflict with or result in any breach of
any provision of the certificate of incorporation or by-laws of the Company, (b)
require any filing with, or permit, authorization, consent or approval of, any
Governmental Entity, (c) violate any order, writ, injunction, decree, award
order, statute, rule or regulation applicable to the Company or the Selling
Shareholders, (d) conflict with or result in the breach or termination of any
term or provision of, or constitute a default under, or cause any acceleration
under, or cause the creation of any lien, charge or encumbrance upon the
properties or assets of the Company pursuant to, any indenture, mortgage, deed
of trust or other instrument or agreement to which the Company is a party or by
which the Company or any of its properties is or may be bound. SCHEDULE 4.4 sets
forth a true, correct and complete list of all consents and approvals of third
parties that are required in connection with the consummation by the Selling
Shareholders of the Transactions.
Section 4.5 CAPITALIZATION.
The authorized share capital of the Space Media Holdings Limited
consists of 50,000 shares, par value $0.10 per share. As of the date of this
Agreement [7,617] shares of Space Media Holdings Limited are issued and
outstanding. All the outstanding shares of Space Media Holdings Limited are duly
authorized, validly issued, fully paid and non-assessable, all of which are held
of record by the Selling Shareholders as set forth on SCHEDULE I. All the
outstanding shares of the Subsidiaries (as defined in Section 4.6 below) are
duly authorized, validly issued, fully paid and non-assessable, all of which are
held of record by Space Media Holdings Limited. Except as set forth above or on
SCHEDULE 4.5, as of the date of this Agreement, (a) there are no shares of the
Company authorized, issued or outstanding; and (b) there are no existing
options, warrants, calls, convertible securities, phantom share awards, share
appreciation rights, preemptive rights, subscriptions or other rights,
agreements, arrangements or commitments of any character, relating to the issued
or unissued share capital of the Company, obligating the Company to issue,
transfer or sell or cause to be issued, transferred or sold any shares of the
Company.
Section 4.6 SUBSIDIARIES.
(a) SCHEDULE 4.6 sets forth:
(i) the name and percentage ownership by Space Media Holdings
Limited of each corporation, partnership, joint venture or other entity in which
Space Media Holdings Limited has, directly or indirectly, an equity interest
representing 50% or more of the shares thereof or other equity interests therein
(individually, a "Subsidiary" and, collectively, the "Subsidiaries");
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(ii) the jurisdiction of incorporation, capitalization and
ownership of each Subsidiary;
(iii) the names of the officers and directors of each Subsidiary;
and
(iv) the jurisdictions in which each Subsidiary is qualified or
holds licenses to do business as a foreign corporation.
(b) Except as set forth on SCHEDULE 4.6, the Company owns of record
and beneficially all of the outstanding shares of each of the Subsidiaries free
and clear of all covenants, conditions, restrictions, liens, charges and
encumbrances.
(c) Each of the Subsidiaries is a corporation or other entity duly
organized and validly existing and in good standing under the laws of the state
of its incorporation or organization and has all requisite power and authority
to own its properties and carry on its business as now being conducted. Each of
the Subsidiaries is duly qualified to do business and in good standing in all
jurisdictions in which its ownership of property or the character of its
business requires such qualification. Certified copies of the charter,
memorandum and articles of association or other governing instruments of the
Subsidiaries, each as amended to date, have been previously delivered to the
Purchaser, are complete and correct, and no amendments have been made thereto or
have been authorized since the date of such delivery. Except as set forth on
SCHEDULE 4.6, the Company does not own any shares of or other equity interest in
any corporation, partnership or other entity, other than the Subsidiaries. The
shares of each Subsidiary as set forth on SCHEDULE 4.6 have been duly and
validly issued and are fully paid and non-assessable.
(d) Except as set forth on SCHEDULE 4.6, none of the Subsidiaries have
repurchased any of its shares, and there are not, and on the Closing Date there
will not be, outstanding any (i) options, warrants or other rights with respect
to shares of any of the Subsidiaries, (ii) any securities convertible into or
exchangeable for such shares or (iii) any other commitments of any kind for the
issuance of additional shares or options, warrants or other securities of any of
them.
(e) Except as set forth on SCHEDULE 4.6, the Company does not hold any
equity securities or other interest in any other entity.
(f) The Company does not have any Affiliated Entities other than the
Subsidiaries;
Section 4.7 FINANCIAL STATEMENTS.
The Selling Shareholders have also previously delivered to the
Purchaser the unaudited consolidated balance sheet of the Company as of June 30,
2000 (the "Current Balance Sheet") and the related statements of income,
shareholders' equity, retained earnings and changes in financial condition of
the Company for the 14-month period then ended (collectively, the "Current
Financial Statements"). The Current Financial Statements have been certified by
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the Company's director of finance. The date of the Current Balance Sheet is
referred to as the "Balance Sheet Date."
The Financial Statements fairly present, as of their respective dates,
the financial condition, retained earnings, assets and liabilities of the
Company and the results of operations of the Company's business for the periods
indicated. With respect to contracts and commitments for the sale of goods or
the provision of services by the Company, the Financial Statements contain and
reflect adequate reserves, which are consistent with previous reserves taken,
for all reasonably anticipated material losses and costs and expenses. The
amounts shown as accrued for current and deferred income and other taxes in the
Financial Statements are sufficient for the payment of all accrued and unpaid
national, state and local income taxes, interest, penalties, assessments or
deficiencies applicable to the Company, whether disputed or not, for the
applicable period then ended and periods prior thereto.
Section 4.8 NO UNDISCLOSED LIABILITIES.
Except (a) as set forth on SCHEDULE 4.8, (b), as reflected and
reserved against in the Current Balance Sheet and (c) for liabilities and
obligations incurred in the ordinary course of business since the Balance Sheet
Date and not material in amount, either individually or in the aggregate, the
Company has not incurred any liability or obligation of any nature, whether or
not accrued, contingent or otherwise, that is material to the condition
(financial or otherwise) of the assets, properties, or business of the Company.
For purposes of this Section 4.8, "material" means any amount in excess of
US$50,000.
Section 4.9 PREPAYMENT OF COMPANY DEBT.
Except as set forth on SCHEDULE 4.9, no Indebtedness of the Company
contains any material restriction upon (a) the prepayment of any material amount
of Indebtedness of the Company, (b) the incurrence of a material amount of
Indebtedness by the Company or (c) the ability of the Company to grant any
material lien on the properties or assets of the Company.
Section 4.10 ABSENCE OF CERTAIN CHANGES.
Except as set forth on SCHEDULE 4.10, during the period since the
Balance Sheet Date, the Company has conducted its businesses only in the
ordinary course consistent with past practice. Without limiting the foregoing,
the Company has not:
(a) suffered any change in its working capital, financial condition,
results of operation, assets or liabilities which constitutes a Company Material
Adverse Effect;
(b) declared, paid or set aside for payment any dividend or other
distribution in respect of its share or redeemed, purchased or otherwise
acquired, directly or indirectly, any shares or other securities of the Company.
(c) incurred any material obligation or liability for borrowed money;
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(d) discharged or satisfied any lien or encumbrance or paid any
obligation or liability other than current liabilities reflected in the Current
Balance Sheet;
(e) mortgaged, pledged or subjected to lien, charge or other
encumbrance any of their respective properties or assets exceeding US$1,000 in
value;
(f) sold or purchased, assigned or transferred any of its tangible
assets or cancelled any debts or claims, except for inventory sold and raw
materials purchased in the ordinary course of business by the Company;
(g) made any material amendment to or termination of any Contract or
done any act or omitted to do any act which would cause the breach of any
Contract by the Company;
(h) suffered any losses of personal or real property, whether insured
or uninsured, and whether or not in the control of the Company as the case may
be, in excess of US$25,000 in the aggregate, or waived any rights of any value
to the Company taken as a whole;
(i) authorized any declaration or payment of dividends by the Company
which is not wholly owned by the Company, or paid any such dividends, or
authorized any transfer of assets of any kind whatsoever by the Company to any
of their respective shareholders with respect to any of their shares;
(j) received notice of any litigation, warranty claim or products
liability claims;
(k) made any material change in the terms, status or funding condition
of any Plan;
(l) made, or committed to make, any changes in the compensation
payable to any officer, director, employee or agent of the Company or any bonus
payment or similar arrangements made to or with any of such officers, directors,
employees or agents;
(m) incurred any capital expenditure in excess of US$25,000 in any
instance or US$100,000 in the aggregate;
(n) made any material alteration in the manner of keeping the books,
accounts or records of the Company or in the accounting practices therein
reflected;
(o) made or revoked any election for Tax purposes or made any change
in method of accounting for Tax purposes or entered into any agreement,
arrangement, or settlement with respect to Taxes (or had any such action taken
on its behalf); or
(p) suffered any material adverse change in the consolidated results
of operations, condition (financial or otherwise), assets, liabilities (whether
absolute, accrued, contingent or otherwise) or business of the Company.
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Section 4.11 TITLE TO PROPERTIES; ENCUMBRANCES.
(a) SCHEDULE 4.11 sets forth (i) a true, correct and complete list of
all items of tangible personal property owned by the Company as of the date
hereof having either a net book value per unit or an estimated fair market value
per unit in excess of US$25,000; or not owned by the Company but in the
possession of or used or useful in the business of the Company and having rental
payments therefore in excess of US$2,000 per month or US$25,000 per year
(collectively, the "Personal Property"); and (ii) to the Knowledge of the
Selling Shareholders a description of the owner of, and any agreement relating
to the use of, each item of Personal Property not owned by the Company and the
circumstances under which such Property is used. Except for property sold since
the Balance Sheet Date in the ordinary course of business, the Company has good
title to each item of Personal Property and to each of the properties and assets
reflected on the Balance Sheet, free and clear of all material Encumbrances not
disclosed on the Balance Sheet.
(b) to the Knowledge of the Selling Shareholders no officer, director,
shareholder or employee of the Company, nor any spouse, child or other relative
or Affiliate thereof, owns directly or indirectly, in whole or in part, any of
the Personal Property described on SCHEDULE 4.11;
(c) to the Knowledge of the Selling Shareholders each item of Personal
Property not owned by the Company is in such condition that upon the return of
such property to its owner in its present condition at the end of the relevant
lease term or as otherwise contemplated by the applicable agreement between the
Company, and the owner or lessor thereof, the obligations of the Company to such
owner or lessor will be discharged;
(d) to the Knowledge of the Selling Shareholders the Personal Property
is in good operating condition and repair, normal wear and tear excepted, is
currently used by either the Company in the ordinary course of its business and
normal maintenance has been consistently performed with respect to the Personal
Property; and
(e) the Company owns or has the right to use all of the Personal
Property now used in the operation of their respective businesses or the use of
which is necessary for in the performance of any material contract, letter of
intent or proposal to which any of them is a party.
Section 4.12 REAL PROPERTY.
The Company does not own any Real Property.
Section 4.13 LEASES.
A list of all the Leases is set forth on SCHEDULE 4.13 and a true and
complete copy of each Lease has been delivered to the Purchaser. Subject to
applicable laws relating to bankruptcy and insolvency, each real property Lease
and each Lease for personal property at a monthly rental exceeding US$1,000 or
yearly rental exceeding US$12,000 is valid, binding and enforceable in
accordance with its terms (except for the Enforceability Limitations) and is in
full force and effect and, except as set forth on SCHEDULE 4.13, have not been
modified or amended
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since the date of delivery to the Purchaser. Except as set forth on SCHEDULE
4.13, no party to any such Lease has sent written notice to the other claiming
that such party is in default thereunder and that such default remains uncured.
Except as set forth on SCHEDULE 4.13, there has not occurred any event which
would constitute a material breach of or default in the performance of any
covenant, agreement or condition contained in any such Lease, nor has there
occurred any event which with the passage of time or the giving of notice or
both would constitute such a breach or material default. The Company is not
obligated to pay any leasing or brokerage commission relating to any such Lease
and, except as set forth on SCHEDULE 4.13, will not have any obligation to pay
any leasing or brokerage commission upon the renewal of any such Lease. Except
as set forth on SCHEDULE 4.13, no construction, alteration or other leasehold
improvement work with respect to any of such Leases remains to be paid for or to
be performed by the Company. The Financial Statements contain adequate reserves
to provide for the restoration of the property subject to the such Leases at the
end of the respective Lease terms, to the extent required by the such Leases.
Section 4.14 CONTRACTS AND COMMITMENTS.
(a) SCHEDULE 4.14 lists the following agreements (written or oral) to
which the Company is a party as of the date of this Agreement (collectively, the
"Contracts"):
(i) any agreement (or group of related agreements) for the lease
of personal property from or to third parties providing for lease payments in
excess of US$25,000 per annum or having a remaining term longer than twelve
months;
(ii) any agreement (or group of related agreements) for the
purchase or sale or products or for the furnishing or receipt of services (A)
which calls for performance over a period of more than one year or (B) which
involves more than the sum of US$25,000;
(iii) any agreement establishing a partnership, joint venture or
other business entity;
(iv) any agreement (or group of related agreements) under which
it has created, incurred, assumed or guaranteed (or may create, incur, assume or
guarantee) indebtedness (including capitalized lease obligations) involving more
than US$25,000 or under which it has imposed a security interest on any of its
assets, tangible or intangible of a value exceeding US$25,000;
(v) any agreement concerning nonsolicitation of employees,
customers or suppliers, or concerning noncompetition or containing terms that
stipulate that the Company must sell its products and services to such other
person on the most advantageous terms that the Company sells products or
services to any other person;
(vi) any employment or consulting agreement;
(vii) any agreement involving any officer or director of the
Company;
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(viii) all collective bargaining agreements, employment and
consulting agreements, executive compensation plans, bonus plans, deferred
compensation agreements, pension plans, retirement plans, employee stock option
or stock purchase plans and group life, health and accident insurance and other
employee benefit plans, agreements, arrangements or commitments to which the
Company is a party or by which the Company or any of its property is bound;
(ix) all agency, distributor, sales representative, franchise or
similar agreements to which the Company is a party or by which the Company or
any of its property is bound;
(x) all contracts, agreements or other understandings or
arrangements between the Company (including, but not limited to, any tax sharing
arrangements) or between the Company and any of the Selling Shareholders or
their Affiliates involving more than US$10,000;
(xi) all leases, whether operating, capital or otherwise, under
which the Company is lessor or lessee;
(xii) all contracts, agreements or other understanding or
arrangements with any Person whose rights will be altered or whose benefits will
be accelerated due in whole or in part as a result of the Transactions;
(xiii) all contracts, agreements or other understanding or
arrangements that contain guarantees or otherwise requires any minimum payment,
revenue or other return to the Company's counterparty thereto, whether related
to advertising impressions, clickthroughs or otherwise; and
(xiv) all contracts, agreements or other understanding or
arrangements that contain any exclusivity provisions;
(xv) any agreement under which the consequences of a default or
termination would reasonably be expected to have a Company Material Adverse
Effect;
(b) The Company has made available to the Purchaser a complete and
accurate copy of each Contract. With respect to each Contract: (i) except where
limited by the bankruptcy or insolvency of the other party to the agreement, the
agreement is legal, valid, binding and enforceable and in full force and effect;
(ii) except where limited by the bankruptcy or insolvency of the other party to
the agreement, the agreement will continue to be legal, valid, binding and
enforceable and in full force and effect immediately following the Closing in
accordance with its terms as in effect immediately prior to the Closing; (iii)
neither the Company nor, to the Knowledge of the Selling Shareholders, any other
party is in material breach or violation of, or material default under, any such
agreement, and no event has occurred, is pending or, to the Knowledge of the
Selling Shareholders, is threatened which, after the giving of notice, with
lapse of time, or otherwise, would constitute a material breach or default by
the Company or, to the Knowledge of the Selling Shareholders, any other party
under such contract and (iv) the Company has fulfilled all material obligations
required pursuant to the Contracts to
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have been performed by the Company, on its part prior to the date hereof, and
the Selling Shareholders have no reason to believe that it will not be able to
fulfill, when due, all of its obligations under the Contracts which remain to be
performed after the date of this Agreement.
(c) True, correct and complete copies of all Contracts have previously
been delivered by the Selling Shareholders to the Purchaser.
(d) None of the Contracts contain obligations which, after the
Closing, would have the effect of prohibiting Parent or any of its Affiliates
from soliciting employees, customers or suppliers of, or competing with, such
other Person or any of its Affiliates, or requiring Parent or any of its
Affiliates to sell its products and services to such other Person or any of its
Affiliates on the most advantageous terms that Parent or any of its Affiliates
sells its products or services to any other Person. For the purposes of this
Section 4.14, the term "Affiliates" includes any entity that controls, is
controlled by, or is under the common control of Parent or the Person, as the
case may be.
Section 4.15 CUSTOMERS AND SUPPLIERS.
Except as set forth on SCHEDULE 4.15, since the Balance Sheet Date,
there has not been any Company Material Adverse Effect in the business
relationship of the Company with any client or customer who accounted for more
than five percent (5%) of the Company's sales during the 12-month period ended
on the Balance Sheet Date, or any supplier from whom the Company purchased more
than five percent (5%) of the goods or services which it purchased during the
same period.
Section 4.16 CASUALTIES.
Since the Balance Sheet Date, the Company has not been affected as a
result of any flood, fire or explosion which constitutes a Company Material
Adverse Effect.
Section 4.17 LITIGATION.
(a) There is no action, suit, inquiry, proceeding or investigation by
or before any court or Governmental Entity pending (that is, of which the
Company has actual or constructive notice) or, to the Knowledge of the Selling
Shareholders, threatened against or involving the Company which questions or
challenges the validity of this Agreement or any action taken or to be taken by
the Company pursuant to this Agreement or in connection with the Transactions.
(b) Except as set forth on SCHEDULE 4.17 (a) there is no action, suit
or proceeding to which the Company is a party (either as a plaintiff or
defendant) pending (that is, of which the Company has actual or constructive
notice) or, to the Knowledge of the Selling Shareholders, threatened before any
court or governmental agency, authority, body or arbitrator and, to the best
Knowledge of the Selling Shareholders, there is no basis for any such action,
suit or proceeding; (b) to the Knowledge of the Selling Shareholders neither the
Company, nor any officer, director or employee of any of the foregoing, has been
permanently or temporarily enjoined by any order, judgment or decree of any
court or any governmental agency, authority or body from engaging in or
continuing any conduct or practice in connection with the business, assets, or
properties of the
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Company; and (c) there is not in existence on the date hereof any order,
judgment or decree of any court, tribunal or agency enjoining or requiring the
Company to take any action of any kind with respect to its business, assets or
properties.
Section 4.18 COMPLIANCE WITH LAWS.
Except as set forth on SCHEDULE 4.18, the Company has complied in a
timely manner and in all material respects with all laws, rules and regulations,
ordinances, judgments, decrees, orders, writs and injunctions of all local,
state, national or foreign governments and agencies thereof that apply to the
business, properties or assets of the Company. Without limitation to the
foregoing, the Selling Shareholders specifically represent and warrant that the
Company has complied in a timely manner and in all material respects with all
laws, rules and regulations, ordinances, judgments, decrees, orders, writs and
injunctions of all local, state, provincial, national or foreign governments and
agencies thereof with regard to any privacy and data protection.
Section 4.19 EMPLOYEES.
(a) SCHEDULE 4.19 contains a list of all employees of the Company
along with the position and the annual rate of compensation of each such person.
Each such employee has entered into a confidentiality/assignment of inventions
agreement with the Company, a copy of which has previously been delivered to the
Purchaser. To the Knowledge of the Selling Shareholders, no officer or other key
employee or group of employees has any plans to terminate employment with the
Company.
(b) The Company is not a party to or bound by any collective
bargaining agreement, or has any of them experienced any strikes grievances,
claims of unfair labor practices or other collective bargaining disputes. The
Selling Shareholders have no Knowledge or any organizational effort made or
threatened, either currently or within the past two years, by or on behalf of
any labor union with respect to employees of the Company.
(c) There is no outstanding claim, liability or dispute against the
Company by any person who is or was a director, officer, employee of, or
consultant to, the Company.
(d) The Company has at all time complied with its obligations under
statute or otherwise in respect of the occupational health and safety of its
employees and others. There is no actual, pending (that is, of which the Company
has actual or constructive notice) or, to the Knowledge of the Selling
Shareholders, threatened claims by any person or prosecution by any Governmental
Entity in relation to any accident, illness or injury.
Section 4.20 EMPLOYEE BENEFIT PLANS.
(a) SCHEDULE 4.20 contains a true and complete list of all Plans. The
Company has made available to the Purchaser a true and complete description of
(i) each written Plan and any amendments thereto, and (ii) each agreement
creating or modifying any related trust or other funding vehicle.
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(b) The Company has complied with applicable laws and regulations
regarding employee benefits and retirement plans in each jurisdiction in which
it has employees or conducts business.
(c) Each Subsidiary which is required by applicable law to make
mandatory contributions on behalf of its employees has established benefit
arrangements in compliance with applicable laws and is current in making those
contributions.
Section 4.21 TAX MATTERS.
(a) Except as set forth on SCHEDULE 4.21, all Tax Returns required by
applicable law to be filed by or on behalf of the Company prior to or as of the
Closing Date have been timely filed or will be timely filed as of the Closing
Date, and all such Tax Returns are or will be true, complete and correct in all
material respects.
(b) All income Taxes required by the law of any jurisdiction to be
deducted by the Company from the salary or wages of employees have been deducted
and, where appropriate, paid.
(c) All Taxes that are due and payable from the Company on or prior to
the Closing Date have been paid when due. The Company has adequately provided
for, on its books and accounts and related records, liability of Taxes related
to any period ending on or prior to the Closing Date that are not yet due and
payable.
(d) No Audit is pending with respect to any Tax Returns filed by the
Company. No deficiency or adjustment for any Taxes has been proposed, asserted,
or assessed against the Company. No written claim for Taxes (or request for Tax
Returns) has ever been made against the Company in a jurisdiction in which the
Company does not file Tax Returns.
(e) The Company does not hold and has never held any assets, and are
not currently and have never been engaged in a trade or business, in the United
States. The Company has never filed a Tax Return or made an election under
United States tax law.
(f) There are no liens for Taxes upon any property or assets of the
Company, except for liens for Taxes not yet due.
(g) There are no outstanding requests, agreements, consents or waivers
to extend the statutory period of limitations applicable to the assessment of
any Taxes or deficiencies against the Company.
(h) The Company is not a party to any tax sharing agreements,
arrangements, policies, or guidelines. The Company has never filed a Tax Return,
or otherwise treated for tax purposes, as a member of a consolidated, combined,
or unitary group.
(i) The Company does not currently have, and has never had, in effect
an election to be treated as an association taxable as a corporation for United
States federal income tax purposes. The Company is not aware of any facts or
circumstances that would preclude Parent
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or the Purchaser from making elections, prior to the Closing, to treat Space
Media Holdings Limited (but not the Subsidiaries) as a partnership and the
Subsidiaries as disregarded entities for United States federal income tax
purposes.
Section 4.22 INTELLECTUAL PROPERTY.
(a) SCHEDULE 4.22 attached hereto sets forth: (i) a true, correct and
complete list and, where appropriate, a description of, all United States and
foreign patents, trade names, trademarks, trade name and trademark
registrations, and copyright applications and registrations (the "Intellectual
Property"); and (ii) a true, correct and complete list of all licenses or
similar agreements or arrangements to which the Company is a party, either as
licensee or licensor, with respect to the Intellectual Property. The term
"Intangible Property" as used in this Agreement shall mean all Intellectual
Property and all intangible property owned by, or used in connection with the
business of the Company, including trade secrets, know-how, and confidential
information associated with the products and services of the Company, whether or
not listed on SCHEDULE 4.22. Except as otherwise disclosed on SCHEDULE 4.22:
(i) the Company is the sole and exclusive owner of all right,
title and interest in and to the Intangible Property which is owned by (and not
licensed to) the Company and all designs, permits, labels and packages used on
or in connection therewith, free and clear of all liens, security interests,
charges, encumbrances, equities or other adverse claims;
(ii) the Company has the right and authority to use, and to
continue to use after the Closing, the Intangible Property in connection with
the conduct of its business in the manner presently conducted, and such use or
continuing use does not and will not conflict with, infringe upon or violate any
rights of any other person, corporation or entity;
(iii) neither the Company nor any of the Selling Shareholders has
received notice of, or has any knowledge of any basis for, a pleading or
threatened claim, interference action or other judicial or adversarial
proceeding against the Company that any of the operations, activities, products,
services or publications of the Company or any of its customers or distributors
infringes or will infringe any patent, trademark, trade name, copyright, trade
secret or other property right of a third party, or that it is illegally or
otherwise using the trade secrets, formulae or property rights of others;
(iv) there are no outstanding, nor to the Knowledge of the
Selling Shareholders, any threatened disputes or other disagreements with
respect to any licenses or similar agreements or arrangements described on
SCHEDULE 4.14 or with respect to infringement by a third party of any of the
Intangible Property;
(v) the Intangible Property owned or licensed by the Company is
sufficient to conduct the Company's business as presently conducted;
(vi) the Company has taken all steps reasonably necessary to
protect its right, title and interest in and to the Intangible Property and the
continued use of the Intangible Property;
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(vii) no officer, director, stockholder or employee of the
Company, nor any spouse, child or other relative or Affiliate thereof, owns
directly or indirectly, in whole or in part, any of the Intangible Property; and
(viii) neither the Company nor any Selling Shareholder has any
Knowledge that any third party is infringing, or will threaten to infringe, upon
or otherwise violate any of the Intangible Property in which the Company has
ownership rights.
(ix) to the Knowledge of the Selling Shareholders, none of the
Computer Systems used by the Company in its business contains any disabling
codes, functionality or instructions (a "Disabling Code"), or any agent,
message, instruction, functionality, virus or other contaminant (a
"Contaminant"), that may, or may be used to, harm, interfere with, breach the
security of, impede, destroy data within, have a detrimental affect on, limit
the functionality of, access, modify, delete, damage or, in any way, disable the
Computer Systems. The Company has taken reasonable steps and implemented
reasonable procedures to ensure that the Computer Systems are protected from and
free of Disabling Codes and Contaminants.
Section 4.23 BANK ACCOUNTS.
SCHEDULE 4.23 sets forth (a) the names and locations of all banks,
trust companies, savings and loan associations and other financial institutions
at which the Company maintains safe deposit boxes, checking accounts or other
accounts of any nature the available balance of which customarily exceeds $5,000
and (b) the names of all Persons authorized to draw thereon, make withdrawals
therefrom or have access thereto.
Section 4.24 BROKERS OR FINDERS.
Except as disclosed on SCHEDULE 4.24, neither the Company, nor any
Selling Shareholder 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. Any broker's or finder's fees have been
paid prior to the Closing by the Selling Shareholders and not the Company.
Section 4.25 INSURANCE.
SCHEDULE 4.25 sets forth a true, correct and complete list of all
fire, theft, casualty, general liability, workers compensation, business
interruption, environmental impairment, product liability, automobile and other
insurance policies maintained by the Company and of all life insurance policies
maintained on the lives of any of their employees, specifying the type of
coverage, the amount of coverage, the premium, the insurer and the expiration
date of each such policy (collectively, the "Insurance Policies") and all claims
made under such Insurance Policies since January 1, 1998. True, correct and
complete copies of all Insurance Policies have been previously delivered by the
Selling Shareholders to the Purchaser. The Insurance Policies are in full force
and effect and are in amounts of a nature which are commercially reasonable,
adequate and customary for the Company's business. All premiums due on the
Insurance Policies or renewals thereof have been paid, and there is no default
under the Insurance Policies. Except as
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set forth on SCHEDULE 4.25, the Company has not received any notice or other
communication from any issuer of the Insurance Policies since January 1, 1998
canceling or materially amending any of the Insurance Policies, materially
increasing any deductibles or retained amounts thereunder, or materially
increasing the annual or other premiums payable thereunder as a result of
claims, and, to the Knowledge of the Selling Shareholders, no such cancellation,
amendment or increase of deductibles, retainages or premiums is threatened.
Except as set forth on SCHEDULE 4.25, the Company has no outstanding claims or
any dispute with any insurance carrier regarding claims, settlements or premiums
and the Company has never failed to give any notice or present any claim under
any Insurance Policy in due and timely fashion.
Section 4.26 ACCOUNTS RECEIVABLE.
SCHEDULE 4.26 sets forth a true, correct and complete list of the
accounts and notes receivable of the Company (the "Accounts Receivable"),
including the aging thereof as of the date hereof. All Accounts Receivable arose
out of the sales of inventory or services in the ordinary course of business and
are collectible in the face value thereof within 90 days from the date the
Company performs or delivers the services or products, using normal collection
procedures, net of the reserve for doubtful accounts set forth thereon, which
reserve is adequate and was calculated in accordance with generally accepted
accounting principles consistently applied.
Section 4.27 INDEBTEDNESS TO AND FROM OFFICERS, DIRECTORS AND SHAREHOLDERS.
Except as set forth on SCHEDULE 4.27, and except for debt between
Space Media Holdings Limited and the Subsidiaries, the Company is not indebted,
directly or indirectly, to any person who is an officer, director or stockholder
of any of the foregoing entities or any Affiliate of any such person in any
amount whatsoever other than for salaries for services rendered or reimbursable
business expenses, all of which have been reflected on the Current Financial
Statements of the Company, and no such officer, director, shareholder or
Affiliate is indebted to the Company except for advances made to employees of
the Company in the ordinary course of business to meet reimbursable business
expenses anticipated to be incurred by such obligor.
Section 4.28 POWERS OF ATTORNEY AND SURETYSHIPS.
Except as set forth on SCHEDULE 4.28, the Company does not have any
general or special powers of attorney outstanding (whether as grantor or grantee
thereof) or has any obligation or liability (whether actual, accrued, accruing,
contingent or otherwise) as guarantor, surety, co-maker, indemnitor or otherwise
in respect of the obligation of any person, corporation, partnership, joint
venture, association, organization or other entity, except as endorser or maker
of checks or letters of credit, respectively, endorsed or made in the ordinary
course of business.
Section 4.29 CONFLICTS OF INTEREST.
Except as set forth on SCHEDULE 4.29, no officer, director or
shareholder of the Company holding 2% or more of the shares of the Company nor,
to the Knowledge of the Selling
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Shareholders, any Affiliate of any such Person, now has or within the last three
(3) years had, either directly or indirectly:
(i) an equity or debt interest in any corporation, partnership,
joint venture, association, organization or other person or entity which
furnishes or sells or during such period furnished or sold services or products
to the Company, or purchases or during such period purchased from the Company
any goods or services, or otherwise does nor during such period did business
with the Company; or
(ii) a beneficial interest in any contract, commitment or
agreement to which the Company is or was a party or under which any of them is
or was obligated or bound or to which any of their respective properties may be
or may have been subject, other than stock options and other contracts,
commitments or agreements between the Company and such persons in their
capacities as employees, officers or directors of the Company.
Section 4.30 REGULATORY APPROVALS.
All consents, approvals, authorizations or other requirements
prescribed by any law, rule or regulation which must be obtained or satisfied by
the Company and which are necessary for the execution and delivery by the
Selling Shareholders of this Agreement or any documents to be executed and
delivered by the Selling in connection herewith are set forth on SCHEDULE 4.30
attached hereto and have been, or prior to the Closing Date will be, obtained
and satisfied.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Parent and the Purchaser jointly and severally represent and warrant
to the Selling Shareholders that:
Section 5.1 ORGANIZATION.
Each of Parent and the Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority and all
necessary governmental approvals to carry on its business as now being conducted
and to own the properties and assets it now owns, except where the failure to be
so organized, existing and in good standing or to have such power, authority,
and governmental approvals would not have, individually or in the aggregate, a
material adverse effect on Parent or the Purchaser's ability to consummate the
Transactions.
Section 5.2 AUTHORIZATION; VALIDITY OF AGREEMENT.
Parent and the Purchaser have full corporate power and authority to
execute and deliver this Agreement and to consummate the Transactions. The
execution, delivery
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and performance by Parent and the Purchaser of this Agreement and the
consummation of the Transactions have been duly authorized by the Board of
Directors of Parent and the Purchaser, and no other corporate action on the part
of Parent or the Purchaser is necessary to authorize the execution and delivery
by Parent or the Purchaser of this Agreement or the consummation of the
Transactions. No vote of, or consent by, the holders of any class or series of
stock issued by the Purchaser, other than Parent, is necessary to authorize the
execution and delivery by Parent and the Purchaser of this Agreement or the
consummation by it of the Transactions. This Agreement has been duly executed
and delivered by Parent and the Purchaser, and, assuming due and valid
authorization, execution and delivery hereof by the Selling Shareholders, is a
valid and binding obligation of Parent and the Purchaser, enforceable against
Parent and the Purchaser in accordance with its terms except as limited by the
Enforceability Limitations.
Section 5.3 CONSENTS AND APPROVALS; NO VIOLATIONS.
Except for the filings, permits, authorizations, consents and
approvals as may be required under applicable securities laws, none of the
execution, delivery or performance of this Agreement by Parent or the Purchaser,
the consummation by Parent or the Purchaser of the Transactions or compliance by
Parent or the Purchaser with any of the provisions of this Agreement will (a)
conflict with or result in any breach of any provision of the certificate of
incorporation or by-laws of Parent or the Purchaser, (b) require any filing
with, or permit, authorization, consent or approval of, any Governmental Entity,
(c) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent or the Purchaser, excluding from the foregoing clauses (b)
and (c) such violations, breaches or defaults which would not, individually or
in the aggregate, have a material adverse effect on Parent or the Purchaser's
ability to consummate the Transactions.
Section 5.4 ACQUISITION OF SHARES FOR INVESTMENT; ABILITY TO EVALUATE AND
BEAR RISK.
(a) Parent through the Purchaser is acquiring the 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 Shares. Parent and the Purchaser agree that the Shares may not be sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of
without registration under the Securities Act and any applicable state
securities laws, except pursuant to an exemption from such registration under
such Act and such laws
(b) The Purchaser is able to bear the economic risk of holding the
Shares 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 the Shares.
Section 5.5 LITIGATION.
There is no claim, action, suit, proceeding or, to the knowledge of
Parent, governmental investigation pending or, to the knowledge of Parent,
threatened against Parent or the Purchaser by or before any court or
Governmental Entity that, individually or in the aggregate, would have or would
reasonably be expected to impede the ability of Parent or the Purchaser to
complete the Closing in all respects.
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Section 5.6 BROKERS OR FINDERS.
Neither Parent 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.
Section 5.7 COMPLIANCE WITH LAWS.
Each of Parent and the Purchaser has complied in all material respects
with all laws, rules and regulations, ordinances, judgments, decrees, orders,
writs and injunctions of all local, state, national or foreign governments and
agencies thereof that apply to its business, properties or assets.
ARTICLE 6.
COVENANTS
Section 6.1 TAX MATTERS.
(a) TRANSFER TAXES.
All Transfer Taxes resulting directly from the Transactions shall be
borne by the Selling Shareholders. Subject to the other terms of this Agreement,
each party shall take any action reasonably requested by the other parties which
does not cause any material cost or inconvenience in order to minimize Transfer
Taxes. Notwithstanding anything to the contrary in this Agreement, 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
commercially reasonable efforts to provide such Tax Returns to the other party
at least ten (10) days prior to the Due Date for such Tax Returns.
(b) TAX ELECTIONS. The Selling Shareholders and the Company
acknowledge that Parent or the Purchaser will make elections to treat Space
Media Holdings Limited as a partnership and the Subsidiaries as disregarded
entities for United States federal income tax purposes prior to the Closing. The
Selling Shareholders and the Company shall (and, in the case of the Company,
shall cause its officers and representatives, to) cooperate with Parent or the
Purchaser in making such elections, including executing Internal Revenue Service
Forms 8832 in accordance with the instructions of Parent or the Purchaser.
(c) ASSISTANCE AND COOPERATION. After the Closing Date, each of the
Selling Shareholders, Parent and the Purchaser shall (and shall cause their
respective Affiliates to):
(i) timely sign and deliver such certificates or forms as may be
necessary or appropriate to establish an exemption from (or otherwise reduce),
or file Tax Returns or other reports with respect to, Transfer Taxes;
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(ii) assist the other party in preparing any Tax Returns which
such other party is responsible for preparing and filing; and
(iii) cooperate fully in preparing for any audits of, or disputes
with taxing authorities regarding, any Tax Returns of the Company.
Section 6.2 PUBLICITY.
Neither the Selling Shareholders, the Company, Parent, or the
Purchaser nor any of their respective Affiliates shall issue or cause the
publication of any press release or other public announcement with respect to
this Agreement or the Transactions without the prior written consent of the
other party, except as may be required by law or by any listing agreement with a
national securities exchange or trading market, and a written opinion of counsel
is provided to that effect, and then only with as much prior written notice to
the other party as is practicable. The parties to this Agreement agree that Bank
of America may acknowledge its representation of the Selling Shareholders in the
Transactions in press releases and advertisements.
Section 6.3 INDEMNIFICATION.
Following the Closing, the Purchaser shall cause the Company not to
make any changes to its certificate of incorporation or memorandum or articles
of association that would adversely affect the rights of persons who are
currently or were officers or directors of the Company to claim indemnification
from such entity under the terms of such certificate of incorporation memorandum
or articles of association as in effect on the date of this Agreement for acts
taken prior to the Closing.
Section 6.4 ADDITIONAL AGREEMENTS.
At Closing, each employee of the Company shall enter into a standard
form Non-Disclosure and Assignment of Inventions Agreement with Parent in the
form attached hereto as EXHIBIT C (the "Non-Disclosure Agreement"), each
non-employee shareholder of the Company shall enter into a Non-Competition
Agreement with Parent in the form attached hereto as EXHIBIT D (the
"Non-Competition Agreement"), and each Selling Shareholder shall enter into a
Lock-Up Agreement with the Purchaser in the form attached hereto as EXHIBIT E
(the "Lock-Up Agreement"), or in such other form as may be agreed between a
Selling Shareholder and Parent and a Stock Restriction Agreement in the form
attached hereto as EXHIBIT F (the "Stock Restriction Agreement").
Section 6.5 TRADE SECRETS AND NON-SOLICITATION.
(a) PROPRIETARY INFORMATION.
(i) Each of the Selling Shareholders and each of their respective
Affiliates shall hold in confidence and shall use their best efforts to have all
officers, directors and personnel who continue after the Closing to be employed
by any such Selling Shareholder or any Affiliate thereof to hold in confidence
all knowledge and information of a secret or confidential
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nature with respect to the business of the Company and not to disclose, publish
or make use of the same without the consent of the Purchaser, except to the
extent that such information shall have become public knowledge other than by
breach of this Agreement by the Selling Shareholder.
(ii) If (1) the employment of an officer, director or other
employee of a Selling Shareholder or any Affiliate thereof, to whom secret or
confidential knowledge or information concerning the business of the Company has
been disclosed, is terminated and (2) such individual is subject to an
obligation to maintain such knowledge or information in confidence after such
termination, the Selling Shareholders shall, upon request by the Purchaser, take
all reasonable steps at their expense to enforce such confidentiality obligation
in the event of an actual or threatened breach thereof. Any legal counsel
retained by any such Selling Shareholder in connection with any such enforcement
or attempted enforcement shall be selected by such Selling Shareholder.
(iii) Each Selling Shareholder agrees that the remedy at law for
any breach of this subsection 6.5(a) would be inadequate and that the Purchaser
shall be entitled to injunctive relief in addition to any other remedy it may
have upon breach of any provision of this subsection 6.5(a).
(iv) Except as provided by law, for a period of five years after
the Closing Date, no Selling Shareholder nor any Affiliate thereof shall solicit
any person who was an employee of either the Company on the date hereof or the
Closing Date to terminate his employment with the Purchaser (or the Company, as
the case may be) or to become an employee of such Selling Shareholder or
Affiliate.
(v) Each Selling Shareholder agrees that the remedy at law for
any breach of this subsection 6.5(a) would be inadequate and that the Purchaser
shall be entitled to injunctive relief in addition to any other remedy it may
have upon breach of any provision of this subsection 6.5(a).
Section 6.6 RULE 144 COMPLIANCE.
The Purchaser covenants that from and after the Closing Date it shall
(a) file any reports required to be filed by it under Paragraph (C) of Rule 144
of the Securities Act of 1933, as amended, of the United States and (b) take
such further action as any Selling Shareholder may reasonably request (including
without limitation providing any information necessary to comply with Rule 144
under the Securities Act), all to the extent required from time to time to
enable the Selling Shareholders to sell the Parent Shares received as
consideration hereunder without registration under the Securities Act within the
limitation of the "safe harbor" or exemptions provided by (i) Rule 144 under the
Securities Act, as such rule may be amended from time to time, and (ii) any
similar rule or regulation hereafter adopted by the United States Securities and
Exchange Commission. The Purchaser shall, upon the request of any Selling
Shareholder, deliver to such Selling Shareholder a written statement as to
whether the Purchaser has complied with such requirements.
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Section 6.7 LISTING.
Parent covenants with the Selling Shareholders (for themselves and as
nominees for each nominated holder of Parent Shares hereunder) that the Parent
Shares forming the Aggregate Consideration are listed on the Nasdaq National
Market. Parent further represents, covenants and undertakes that it will use its
commercially reasonable efforts to maintain a listing for the Parent Shares for
a period of 6 months following the date upon which the Parent Shares forming the
Aggregate Consideration is released from the restrictions on transferability
under Rule 144 of the Securities Act or its release from the Escrow Accounts,
whichever is the later.
Section 6.8 PROPRIETARY INFORMATION.
From and after the Closing, each Selling Shareholder shall hold in
confidence, and shall cause its Affiliates to hold in confidential, all
knowledge, information and documents of a confidential nature or not generally
known to the public or not in the public domain with respect to the Company
(including without limitation the financial information, Company Intellectual
Property, technical information or data relating to the materials, products or
components sold, or the services offered, in connection with the Company and
names of customers of the Company) (collectively, "Proprietary Information") and
shall not disclose or make use of, and shall cause its Affiliates not to
disclose or make use of, Proprietary Information without the written consent of
the Purchaser, such consent not to be unreasonably withheld, except to the
extent that such knowledge, information or documents shall have become public
knowledge other than through a breach of this Agreement by the Selling
Shareholder or an Affiliate or agent of the Selling Shareholder, or to the
extent that the Selling Shareholder or its Affiliate is otherwise obligated
pursuant to applicable law or regulation.
ARTICLE 7.
CLOSING DELIVERIES
Section 7.9 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE CLOSING.
The respective obligation of each party to effect the Closing shall be
subject to the satisfaction at or prior to the Closing Date of each of the
following conditions:
(a) STATUTES; COURT ORDERS. No statute, rule or regulation shall have
been enacted or promulgated by any Governmental Entity which prohibits the
consummation of the Closing; and there shall be no order or injunction of a
court of competent jurisdiction in effect precluding consummation of the Closing
provided, however, that the parties shall use their commercially reasonable
efforts to have any such order or injunction vacated or lifted;
(b) CONSENTS OBTAINED. All material consents of any Person necessary
to the consummation of the Closing and the other Transactions, including
consents from Governmental Entities, shall have been obtained; and
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(c) TERMINATION. This Agreement shall not have been terminated in
accordance with its terms.
Section 7.10 CONDITIONS TO OBLIGATIONS OF PURCHASER TO EFFECT THE CLOSING.
The obligations of Parent and the Purchaser to consummate the Closing
shall be subject to the satisfaction on or prior to the Closing Date of each of
the following conditions:
(a) GOVERNMENT ACTION. There shall not be threatened or pending any
suit, action or proceeding by any Governmental Entity
(i) seeking to restrain or prohibit the consummation of the
Closing or the performance of any of the other Transactions, or seeking to
obtain from Purchaser any damages that are material in relation to the Company
other than as a result of a voluntary act by the Purchaser, or
(ii) seeking to impose material limitations on the ability of the
Purchaser effectively to exercise full rights of ownership of the Shares,
including the right to vote the Shares otherwise than as a result of a voluntary
act by Parent or the Purchaser.
(b) REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties of the Selling Shareholders set forth in this Agreement that are
qualified as to materiality shall be true and complete and any such
representations and warranties that are not so qualified shall be true and
complete in all material respects, in each case as of the date of this Agreement
(or if made as of a specified date, only as of such date).
(c) SELLING SHAREHOLDERS BREACH. The Selling Shareholders shall not
have failed to perform in any material respect any material obligation or to
comply in any material respect with any covenant of the Selling Shareholders to
be performed or complied with by them under this Agreement.
(d) SHAREHOLDER LOANS. All shareholder loans to the Company incurred
prior to the date of this Agreement shall have been forgiven and cancelled prior
to Closing and evidence of such fact shall be delivered to the Purchaser at the
Closing.
(e) CERTIFICATE. The Selling Shareholders shall have delivered a
certificate executed by a representative of the Selling Shareholders that
conditions 7.2(b), (c) and (d) have been met.
(f) OPINION OF COUNSEL. The Purchaser shall have received opinions
from Xxxxxxxxxx Xxxxxxx & Lo, Xxxxxx Westwood & Riegels, Xxxxxxx Xxxx & Co.,
Rahman Too and Xxxxxx, XxXxxxxxx & Xxxxxx, addressed to the Purchaser and dated
the Closing Date, as to, respectively, the organization and qualification of the
Company and the authorization, due execution, validity and enforceability of
this Agreement in form and substance reasonably satisfactory to the Purchaser.
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(g) STOCK CERTIFICATES. The Selling Shareholders shall have delivered
certificates representing all of the Shares duly and validly endorsed in favor
of the Purchaser or accompanied by a separate stock power duly and validly
executed by the respective Selling Shareholder; or, in the case some
certificates are not delivered, documents sufficient to ensure transfer of such
Shares to Purchaser, including but not limited to, a copy of the current
register of members, share transfer forms, minutes of the Company's Board of
Directors approving the registration of the Purchaser as a member, and
irrevocable instructions to HWR Services to register the Purchaser as a member
(h) RESIGNATIONS. Xxxxx Xxxxxx, Xxxxxxx Xxxx, and Xxxxx Xxx shall have
delivered resignations as directors of the Company to the Purchaser in a form of
resignation acceptable to the Purchaser.
(i) NON-DISCLOSURE AND ASSIGNMENT OF INVENTIONS AGREEMENT. Each
employee of the Company shall have executed a Non-Disclosure Agreement.
(j) LOCK-UP AGREEMENT. Each Selling Shareholder shall have executed a
Lock-Up Agreement.
(i) STOCK RESTRICTION AGREEMENT. Each Selling Shareholder shall have
executed the Stock Restriction Agreement.
(k) NON-COMPETITION AGREEMENTS. Each non-employee shareholder shall
have executed the Non-Competition Agreement.
(l) ESCROW AGREEMENTS. The Indemnification Escrow Agreement and the
Performance Escrow Agreement shall have been executed and in full force and
effect.
(m) TERMINATION OF SHAREHOLDERS' AGREEMENT. The Selling Shareholders
shall have delivered evidence of termination of the Shareholders' Agreement
between certain of the Selling Shareholders and the Company, dated February 16,
2000.
(n) TERMINATION OF REVISION AGREEMENT. The Selling Shareholders shall
have delivered evidence of termination of the Revision Agreement between certain
of the Selling Shareholders and the Company, dated February 16, 2000.
(o) TERMINATION OF EMPLOYEE SHARES AGREEMENT. The Selling Shareholders
shall have delivered evidence of termination of the Employee Shares Agreement,
dated February 16, 2000.
(p) TERMINATION OF FINANCIAL ADVISORY ENGAGEMENT AGREEMENT. The
Selling Shareholders shall have delivered evidence of termination of the
Financial Advisory Engagement Agreement, dated December 3, 1999.
(q) CONSENTS. The Selling Shareholders shall have delivered consents
to the assignment of the Leases which require consent as set forth on
SCHEDULE 4.13.
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Section 7.11 CONDITIONS TO OBLIGATIONS OF SELLING SHAREHOLDERS TO EFFECT
THE CLOSING.
The obligations of the Selling Shareholders to consummate the Closing
shall be subject to the satisfaction on or prior to the Closing Date of each of
the following conditions:
(a) GOVERNMENT ACTION. There shall not be threatened or pending any
suit, action or proceeding seeking to restrain or prohibit the consummation of
the Closing or the performance of any of the other Transactions, or seeking to
obtain from Selling Shareholders any damages that are material in relation to
the Company.
(b) REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties of Parent and the Purchaser set forth in this Agreement that are
qualified as to materiality shall be true and complete and any such
representations and warranties that are not so qualified shall be true and
complete in all material respects, in each case as of the date of this Agreement
and as of the Closing Date (or if made as of a specified date, as of such date).
(c) PURCHASER BREACH. Neither Parent nor the Purchaser shall have
failed to perform in any material respect any material obligation or to comply
in any material respect with any covenant of Parent or the Purchaser to be
performed or complied with by it under this Agreement.
(d) CERTIFICATE. Parent shall have delivered a certificate executed by
an authorized officer of Parent that conditions 7.3(b) and (c) have been met.
(e) STOCK CERTIFICATES. The Purchaser shall have delivered
certificates of Parent Common Stock to the Selling Shareholders as indicated on
SCHEDULE I. The Purchaser shall have delivered to the escrow agent certificates
representing the Indemnification Shares and the Performance Shares and delivered
a written receipt to the Selling Shareholders executed by the escrow agent
confirming that the certificates have been received.
(f) NASD LISTING. The Purchaser Common Stock to be issued at Closing
shall have been listed on the Nasdaq National Market.
(g) ESCROW AGREEMENTS. The Indemnification Escrow Agreement and the
Performance Escrow Agreement shall have been executed and in full force and
effect.
ARTICLE 8.
INDEMNIFICATION
Section 8.1 INDEMNIFICATION; REMEDIES.
(a) Subject to the limitations set forth in this Section 8, the
Selling Shareholders shall jointly and severally indemnify, defend and hold
harmless the Purchaser Indemnified Persons from and against and in respect of
all Purchaser Losses; provided, that the obligation of the Selling Shareholders
to indemnify the Purchaser Indemnified Persons for breaches of any
representation and warranty contained in Section 3 shall be several and not
joint.
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Notwithstanding the foregoing, the aggregate maximum indemnification obligation
of each Selling Shareholder for the breach of any representation or warranty of
such Selling Shareholder contained in this Agreement, shall equal the value of
the Parent Shares received by that Selling Shareholder plus the value of any
such shares deposited into escrow on behalf of such Selling Shareholder at the
Closing, with the payment of an indemnification obligation of a Selling
Shareholder being paid, at the option of the Selling Shareholders (i) in cash,
or (ii) with Parent Shares, the number of which is equal to (A) the dollar value
of the indemnification obligation of the Selling Shareholder in question divided
by (B) the Average Closing Price.
(b) Subject to the limitations set forth in this Section 8, Parent and
the Purchaser shall indemnify, defend and hold harmless the Selling Shareholders
from and against and in respect of all Selling Shareholders Losses; provided,
that the aggregate maximum obligation of the Purchaser for the breach of any
representation or warranty of the Purchaser contained in this Agreement shall
equal the Aggregate Purchase Price.
(c) Selling Shareholders' indemnification obligations relating to
Purchaser Losses will survive until the second anniversary of the Closing Date;
provided, however, that the representations and warranties in Sections 4.11,
4.20, 4.21, and 4.22 will survive until the expiration of the applicable statute
of limitations. Any claim made prior to the expiration of the survivability
period set forth in the preceding sentence will continue to be a valid claim
notwithstanding such expiration; provided that (unless otherwise agreed to by
the Shareholders' Agent) the Purchaser submits such claim to arbitration in
accordance with Section 10.8 within 6 months of the expiration of the applicable
survivability period; and provided further, that the representations and
warranties in Article 3 and Sections 4.1 and 4.2 will survive indefinitely. No
claim for the recovery of any Purchaser Losses may be asserted by any Purchaser
Indemnified Person after the expiration of the applicable indemnification
period; provided, however, that claims first asserted in writing by any
Purchaser Indemnified Person with reasonable specificity prior to the expiration
of the applicable indemnification period shall not thereafter be barred by the
expiration of the applicable indemnification period. The parties intend to
shorten the statute of limitations and agree that no claims or causes of action
may be brought against the Selling Shareholders based upon, directly or
indirectly, any of the representations, warranties or agreements contained in
Article 3 and Article 4 after the applicable survival period described in this
Section 8.1(c). This Section 8.1 shall not limit any covenant or agreement of
the parties that contemplates performance after the Closing. The Purchaser
acknowledges that the representations and warranties of the Selling Shareholders
contained in Articles 3 and 4 are given subject to the matters disclosed in this
Agreement and in the Disclosure Schedule and the documents referred to in either
of them.
(d) Parent and the Purchaser's indemnification obligations relating to
Selling Shareholders Losses shall survive only until the second anniversary of
the Closing Date. No claim for the recovery of any Selling Shareholders Losses
may be asserted by any Selling Shareholders Indemnified Person after the
expiration of the applicable indemnification period; provided, however, that
claims first asserted in writing by any Selling Shareholders Indemnified Person
with reasonable specificity prior to the expiration of the applicable
indemnification period shall not thereafter be barred by the expiration of the
applicable indemnification period; and provided further that the representations
and warranties in Sections 5.1 and 5.2 shall survive
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indefinitely. The parties intend to shorten the statute of limitations and agree
that no claims or causes of action may be brought against the Purchaser based
upon, directly or indirectly, any of the representations, warranties or
agreements contained in Article 5 after the applicable survival period described
in this Section 8.1(d). This Section 8.1 shall not limit any covenant or
agreement of the parties that contemplates performance after the Closing.
Section 8.2 NOTICE OF CLAIM; DEFENSE.
(a) The indemnified party under this Article 8 shall give the
indemnifying party prompt notice of any third-party claim (other than claims
arising out of any pending or threatened audit, notice of deficiency, proposed
adjustment, assessment, examination or other administrative or court proceeding,
suit, dispute or other claim which could affect the liability for Taxes of the
indemnifying party) that may give rise to any indemnification obligation under
this Article 8, together with the estimated amount of such claim; provided,
however, that no delay on the part of the indemnified party in notifying the
indemnifying party shall relieve the indemnifying party of any liability or
obligation hereunder except to the extent of any damage or liability caused by
or arising out of such failure. The indemnifying party shall have the right to
assume the defense (at the indemnifying party's expense) of any such claim
through counsel of the indemnifying party's own choosing by so notifying the
indemnified party within sixty (60) days of the receipt by the indemnifying
party of such notice from the indemnified party; provided, however, that any
such counsel shall be reasonably satisfactory to the indemnified party; and
provided further, that (i) the indemnifying party may only assume control of
such defense if (A) it acknowledges in writing to the indemnified party that any
damages, fines, costs or other liabilities that may be assessed against the
indemnified party in connection with such suit or proceeding constitute Losses
for which the indemnified party shall be indemnified pursuant to this Article 8
and (B) the ad damnum is less than or equal to the amount of Losses for which
the indemnifying party is liable under this Article 8 and (ii) the indemnifying
party may not assume control of the defense of a suit or proceeding involving
criminal liability or in which equitable relief is sought against the
indemnified party. 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 of any such third-party
claim (other than during any period in which the indemnified party will have
failed to give notice of the third-party claim as provided above). 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. If the
indemnifying party chooses to defend or prosecute a third-party claim, the
indemnified party shall cooperate in the defense or prosecution thereof, which
cooperation shall include, to the extent reasonably requested by the
indemnifying party, the retention, and the provision to the indemnifying party,
of records and information reasonably relevant to such third-party claim, and in
the event the Purchaser is the indemnified party, making employees of the
Company available on a mutually convenient basis to provide additional
information and explanation of any materials provided hereunder. If the
indemnifying party chooses to defend or prosecute any third-party claim, the
indemnified party shall agree to any reasonable settlement, compromise or
discharge of such third-party claim that the indemnifying party recommends and
that, by its terms, discharges the indemnified party from the full amount of
liability in connection with such third-party claim. Neither the indemnified
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party nor any of its Affiliates may settle or otherwise dispose of any Claim for
which the indemnifying party may have a liability under this Agreement without
the prior written consent of the indemnifying party, which consent shall not be
unreasonably withheld. The indemnifying party shall not be liable under this
Article 8 for any settlement, compromise or discharge effected without its
consent in respect of any claim for which indemnity may be sought hereunder. No
indemnified party shall take any action the purpose of which is to prejudice the
defense of any claim subject to indemnification hereunder or to induce a third
party to assert a claim subject to indemnification hereunder.
(b) Notwithstanding the foregoing, the Selling Shareholders shall have
no rights to participate in the defense of any third-party claim relating to
Taxes of the Company for which the Purchaser Indemnified Persons may be
indemnified under Section 8.1(a).
Section 8.3 RESOLUTION OF ALL TAX-RELATED DISPUTES.
If the Selling Shareholders and the Purchaser cannot agree on the
calculation of any amount relating to Taxes or the interpretation or application
of any provision of this Agreement relating to Taxes, such dispute shall be
resolved by a nationally recognized accounting firm mutually acceptable to each
of the Selling Shareholders and the Purchaser, whose decision shall be final and
binding upon all persons involved and whose expenses shall be shared equally by
the Selling Shareholders and the Purchaser. No successful claim for breaches of
Section 4.21 shall become payable prior to the date on which the taxation in
respect of which the claim is made becomes legally due and payable.
Section 8.4 TAX EFFECT OF INDEMNIFICATION PAYMENTS.
All indemnity payments made by the Selling Shareholders to the
Purchaser Indemnified Persons, or by the Purchaser Indemnified Persons to the
Selling Shareholders, pursuant to this Agreement shall be treated for all Tax
purposes as adjustments to the consideration paid with respect to the Shares.
Section 8.5 NO DUPLICATION; SOLE REMEDY PROCEDURES.
(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. Without limiting the foregoing and to ensure that there
will be no double recovery of Purchaser Losses, with respect to any claim for
indemnification made by the Purchaser Indemnified Persons hereunder, the amount
of Purchaser Losses for which the Selling Shareholders shall be obligated to
indemnify such Purchaser Indemnified Persons shall be reduced by the amount of
insurance proceeds that such Purchaser Indemnified Persons actually received, if
any.
(b) To ensure that there will be no double recovery of Purchaser
Losses or Selling Shareholder Losses, any indemnified person shall reimburse to
the indemnifying persons any amounts subsequently recovered by or paid to the
indemnified person from or by any third party in respect of any matter or
liability in respect of which the indemnifying person has paid any sum to the
indemnified person.
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Section 8.6 NO RIGHT OF OFF-SET/SET-OFF.
Neither the Purchaser nor the Selling Shareholders shall have any
right to off-set or set-off any payment due pursuant to this Agreement against
any other payment to be made pursuant to this Agreement or otherwise (including
against indemnification payments).
Section 8.7 LIMITATIONS.
(a) The Selling Shareholders will have no liability for
indemnification pursuant to this Article 8 as a result of a breach of any
representation or warranty until the aggregate amount of Purchaser Losses exceed
$175,000 (at which point the Selling Shareholders shall become liable for all
Purchaser Losses and not just those exceeding $175,000). However, the preceding
sentence of this Section 8.7 shall not apply to any breach of the
representations and warranties contained in Article 3 or in Sections 4.1, 4.2,
or 4.21, any liability associated with the matter disclosed in Schedule 4.21, or
to any claims based upon fraud.
(b) The Selling Shareholders will have no liability for
indemnification pursuant to this Article 8 as a result of any breach of
representation or warranty that arises from (i) any voluntary act or omission of
the Purchaser or the Company or of any holding company or their respective
successors in title after Closing otherwise than in the ordinary course of
business as carried on at the date of this Agreement and otherwise than pursuant
to a legally binding obligation incurred prior to the date of this Agreement,
(ii) any change in the rate of taxation executed after the Closing with
retroactive effect, or (iii) any legislation being introduced or amended or a
judgment made the effect of which is to restate common law after the Closing.
(c) If, at the time that an indemnified person notifies an
indemnifying person of any claim for indemnification hereunder, such claim is
contingent only, the indemnifying person shall not be under any obligation to
make any payment in respect of such claim until such time as the contingent
liability becomes an actual liability and is due and payable.
(d) The Selling Shareholders will have no liability for
indemnification pursuant to this Article 8 for breach of a representation and
warranty for which liability there is a reserve on the Currant Balance Sheet,
unless the amount of Purchaser Losses with respect to such claim exceeds such
reserve and, in such event, the amount of Purchaser Losses with respect to such
claim shall be reduced by the amount of such reserve.
(e) The rights to indemnification, reimbursement or other remedy set
forth in this Agreement will not be affected by any investigation conducted by a
party with respect to, or any knowledge acquired (or capable of being acquired)
by a party about, the accuracy or inaccuracy of, or compliance with any
representation, warranty, covenant or obligation.
(f) No limitations or indemnification contained in Article 8 shall
have any effect on any claim that is based on fraud.
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ARTICLE 9.
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:
"Affiliate" or "Affiliated Entities" means corporation, partnership,
joint venture or other entity in which the Company has, directly or indirectly,
an equity interest representing 50% or more of the shares thereof or other
equity interests therein.
"Agreement" or "this Agreement" means this Stock Purchase Agreement,
together with the exhibits and the Disclosure Schedule.
"Audit" means any audit, assessment of Taxes, reassessment of Taxes,
or other examination by any taxing authorities or any judicial or administrative
proceedings or appeal of such proceedings.
"Balance Sheet" means the most recent unaudited balance sheet of the
Company included in the Financial Statements.
"Balance Sheet Date" means the date of the Balance Sheet.
"Closing" means the closing referred to in Section 2.1.
"Closing Date" means the date on which the Closing occurs.
"Company" means Space Media Holdings Limited., a British Virgin
Islands corporation, and its Subsidiaries. Any references to the Company should
be taken to mean Space Media Holdings Limited and its Subsidiaries taken as a
whole.
"Company Intellectual Property" means all Intellectual Property that
is currently used exclusively in the business of the Company or that is
necessary to conduct the business of the Company as presently conducted or as
currently proposed to be conducted.
"Company Material Adverse Effect" means any material adverse change
in, or material adverse effect on, the business, financial condition or
operations of the Company, provided, however, that any adverse effect on the
Company resulting from any action of Parent or the Purchaser or the execution of
this Agreement, any public announcement relating to this Agreement or the
Transactions or consummation of the Transactions shall also be excluded from the
determination of Company Material Adverse Effect.
"Computer Systems" means computer software programs and databases.
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"Copyrights" means U.S. and foreign registered and unregistered
copyrights (including those in Computer Software and databases), rights of
publicity and all registrations and applications to register the same.
"Disclosure Schedule" means the disclosure schedule dated as of the
date of this Agreement prepared by Selling Shareholders and delivered to the
Purchaser simultaneously with the execution hereof as amended or supplemented by
Selling Shareholders pursuant to the terms of this Agreement.
"Due Date" means, with respect to any Tax Return, the date such return
is due to be filed (taking into account any valid extensions).
"Encumbrances" means any and all liens, charges, security interests,
options, claims, mortgages, pledges, proxies, voting trusts or agreements,
obligations, understandings or arrangements or other restrictions on title or
transfer of any nature whatsoever.
"GAAP" means United States generally accepted accounting principles.
"Governmental Entity" means a court, arbitral tribunal, administrative
agency or commission or other governmental or other regulatory authority or
agency.
"Indebtedness" means (a) all indebtedness for borrowed money or for
the deferred purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness that is
evidenced by a note, bond, debenture or similar instrument, (c) all obligations
under financing leases, (d) all obligations in respect of acceptances issued or
created, (e) all liabilities secured by any lien on any property and (f) all
guarantee obligations.
"Intellectual Property" means all of the following: Trademarks,
Patents, Copyrights and Licenses.
"Knowledge" means the actual knowledge of the person or the knowledge
that person would have after reasonable inquiry.
"Lease" means each lease pursuant to which the Company leases any real
or personal property.
"Licenses" means all licenses and agreements pursuant to which the
Company has acquired rights in or to any Trademarks, Patents or Copyrights, or
licenses and agreements pursuant to which the Company has licensed or
transferred the right to use any of the foregoing.
"Parent Common Stock" means the common stock $0.01 par value, of
Parent.
"Parent Shares" means shares of Parent Common Stock delivered in
exchange for shares of the Company as contemplated by this Agreement.
"Patents" means issued U.S. and foreign patents and pending patent
applications, patent disclosures, and any and all divisions, continuations,
continuations-in-part, reissues,
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reexaminations, and extensions thereof, any counterparts claiming priority
therefrom, utility models, patents of importation/confirmation, certificates of
invention and similar statutory rights.
"Person" means 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.
"Plan" means 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; each profit-sharing, stock bonus or other "pension" plan, fund or
program; each employment, termination or severance agreement; and each other
employee benefit plan, fund, program, agreement or arrangement, in each case,
that is sponsored, maintained or contributed to or required to be contributed to
by the Company, or to which the Company is party, whether written or oral, for
the benefit of any director, employee or former employee of the Company other
than any executed as part of the Transactions.
"Purchaser Indemnified Persons" means Parent and each of its
Affiliates.
"Purchaser Losses" means any and all actual losses, liabilities,
damages, judgments, settlements, Taxes and expenses (including interest and
penalties recovered by a third party with respect thereto and reasonable
attorneys' fees and expenses and reasonable accountants' fees and expenses
incurred in the investigation or defense of any of the same or in asserting,
preserving or enforcing any of the rights of the Purchaser arising under Article
8) incurred by the Purchaser or any of the Purchaser Indemnified Persons that
arise out of (a) any breach by the Selling Shareholders of any of Selling
Shareholders' representations and warranties contained in or made by or pursuant
to this Agreement, (b) any breach by the Selling Shareholders of any covenants
contained in this Agreement, (c) any claim by any former equity owner of the
Company or any Subsidiary, or any other person or entity, seeking to assert, or
based upon (i) ownership or rights to ownership of any securities of the Company
or (ii) any rights of a shareholder, including without limitation, any option,
preemptive rights or similar right, (iii) any rights under the articles or
memorandum of association of the Company or charter documents or (iv) any claim
that his, her or its equity interests were wrongfully repurchased or terminated
by the Company, (d) any claim arising out of the Financial Advisory Engagement
Agreement dated December 3, 1999 with Bank of America, except for a claim
against Bank of America or any of its Affiliates brought by Parent or any of its
Affiliates, (e) any claim for payment of costs, fees or expenses of the Company
or the Selling Shareholder made by any attorney, accountant, banker or other
person for services rendered in connection with the preparation and performance
of this Agreement, or (f) any liability associated with the matter disclosed in
Schedule 4.21.
"Real Property" means all real property that is owned or used by the
Company or that is reflected as an asset of the Company on the Balance Sheet.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Shareholders" means the shareholders listed on SCHEDULE I.
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"Selling Shareholders Indemnified Persons" means the Selling
Shareholders and each of their Affiliates.
"Selling Shareholders Losses" means 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 and reasonable accountants' fees and expenses
incurred in the investigation or defense of any of the same or in asserting,
preserving or enforcing any of the rights of Selling Shareholders arising under
Article 8) incurred by Selling Shareholders or any of the Selling Shareholders
Indemnified Persons that arise out of (a) any breach by Parent or the Purchaser
of any of Parent or the Purchaser's representations and warranties contained in
or made by or pursuant to this Agreement or (b) any breach by Parent or the
Purchaser of any covenants or guarantees contained in this Agreement.
"Shares" means the shares of the Company held and beneficially owned
by the Selling Shareholders.
"Tax" or "Taxes" means all taxes, charges, fees, duties, levies,
penalties or other assessments imposed by any federal, state, local or foreign
governmental authority, including income, gross receipts, excise, property,
sales, gain, use, license, custom duty, unemployment, shares, transfer,
franchise, payroll, withholding, social security, minimum estimated, profit,
gift, severance, value added, disability, premium, recapture, credit,
occupation, service, leasing, employment, stamp and other taxes, and shall
include interest, penalties or additions attributable thereto or attributable to
any failure to comply with any requirement regarding Tax Returns.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any such
document prepared on a consolidated, combined or unitary basis and also
including any schedule or attachment thereto, and including any amendment
thereof.
"Trademarks" means U.S. and foreign registered and unregistered
trademarks, trade dress, service marks, logos, trade names, corporate names and
all registrations and applications to register the same.
"Transactions" means all the transactions provided for or contemplated
by this Agreement.
"Transfer Taxes" means all sales (including bulk sales), use,
transfer, recording, ad valorem, privilege, documentary, gains, gross receipts,
registration, conveyance, excise, license, stamp, duties or similar Taxes and
fees.
"U.S. person" means:
(a) Any natural person resident in the United States;
(b) Any partnership or corporation organized or incorporated under the
laws of the United States;
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(c) Any estate of which any executor or administrator is a U.S.
person;
(d) Any trust of which any trustee is a U.S. person;
(e) Any agency or branch of a foreign entity located in the United
States;
(f) Any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit or account
of a U.S. person;
(g) Any discretionary account or similar account (other than an estate
or trust) held by a dealer or other fiduciary organized, incorporated, or (if an
individual) resident in the United States; and
(h) Any partnership or corporation if:
(i) Organized or incorporated under the laws of any foreign
jurisdiction; and
(ii) Formed by a U.S. person principally for the purpose of
investing in securities not registered under the Securities Act, unless it is
organized or incorporated, and owned, by accredited investors (as defined in
Rule 501(a)) who are not natural persons, estates or trusts.
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 meaning assigned to each term defined in this Agreement 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 in this Agreement, each of its other grammatical forms shall have a
corresponding meaning.
(d) A reference to any party to this Agreement or any other agreement
or document shall include such party's successors and permitted assigns.
(e) 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.
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ARTICLE 10.
MISCELLANEOUS
Section 10.1 FEES AND EXPENSES.
Parent and the Purchaser and each Selling Shareholder shall be
responsible for and bear all of their own costs in the Transactions (including
without limitation any legal, accounting, or broker's fees). Any costs borne by
the Company in the Transactions (including without limitation any legal,
investment banking or financial advisory fees) will be paid by the Selling
Shareholders.
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 when mailed, 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 such party by like notice):
if to Parent or the Purchaser, to:
Engage, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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if to the Shareholders' Agent or the Selling Shareholders, to:
Opulent Wealth Limited
Xxxxx 0000
X. 0 Xxxxx'x Xxxx Xxxxxxx
Xxxx Xxxx
Attention: Xxxxx Xxxxxx
Telephone (000) 0000-0000
Facsimile: (000) 0000-0000
with a copy to:
Xxxxxxxxxx Xxxxxxx & Lo
18th Floor, Edinburgh Tower
00 Xxxxxx Xxxx Xxxxxxx
Xxx Xxxxxxxx
Xxxx Xxxx
Attention: Xxxxx Xxxx, Esq.
Telephone: (000) 0000-0000
Facsimile: (000) 0000-0000
Section 10.4 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 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 together with the other documents forming part of the
Transactions constitutes the entire agreement and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter of those agreements and (b) are not intended to confer upon any
Person other than the parties to those agreements and the officers and directors
of the Company any rights or remedies under this Agreement.
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
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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 Hong Kong.
Section 10.8 ARBITRATION.
Subject to Sections 1.5 and 8.3, any dispute, controversy or claim
arising out of or relating to this Agreement, or the breach, termination or
validity thereof, or any of the Transactions, shall be finally settled by
arbitration in accordance with the UNCITRAL Arbitration Rules as at present in
force and as may be amended by the rest of this Section 10.8. The place of the
arbitration shall be in Hong Kong at the Hong Kong International Arbitration
Centre. There shall be three neutral arbitrators, of whom the claimant shall
appoint one and the respondent shall appoint one within sixty (60) days of
service by claimant on respondent of notice of the arbitration. The two
arbitrators so appointed shall select the chairperson of the tribunal within
sixty (60) days of the appointment of the second arbitrator. The chairperson of
the panel shall be a retired judge with experience in large commercial cases or
be an attorney with a minimum of fifteen years of litigation experience and
substantial arbitration experience in disputes relating to large, commercial
transactions. In arriving at their decision, the arbitrators shall be bound by
the terms and conditions of this Agreement and shall apply the governing law of
this Agreement as defined in Section 10.7. The arbitral tribunal is not
empowered to award damages in excess of compensatory damages, and each party
hereby irrevocably waives any right to recover punitive, exemplary or similar
damages with respect to any dispute. The award shall be final and binding on the
parties, and judgment upon any award may be entered in any court of competent
jurisdiction. Each party to the arbitration shall pay the compensation, costs,
fees and expenses of its own witnesses, experts and counsel. The arbitrators'
fees and expenses shall be borne equally by the parties.
Section 10.9 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 10.10 WAIVER.
The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of those rights.
Section 10.11 ASSIGNMENT.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other parties,
except that the Purchaser may assign, in its sole discretion, all (but not less
than all) of its rights and interests hereunder to any direct or indirect
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wholly owned Subsidiary of Parent. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
Section 10.12 GUARANTEE.
(a) In consideration of the Selling Shareholders agreeing at the
request of Parent and the Purchaser (as evidenced by their execution hereof) to
enter into this Agreement, Parent hereby unconditionally and irrevocably
guarantees to each of the Selling Shareholders the due and punctual performance
and discharge by the Purchaser of all obligations (whether present or future,
actual or contingent) due, owing or incurred to each of the Selling Shareholders
by the Purchaser under or pursuant to this Agreement and documents referred to
herein including, without limiting the generality of the foregoing, the payment
of all moneys that may at any time be or become due and payable whether by way
of costs, expenses, interest, losses, damages or as a consequence of any breach
or non-fulfillment of any of the warranties or representations or covenants
given by the Purchaser or otherwise (all of which obligations are hereinafter
referred to as "Obligations") to the intent that should the Purchaser fail duly
and punctually to perform or discharge any of the Obligations, Parent shall upon
demand perform or procure the performance and discharge of the Obligations.
(b) In addition and without prejudice to the guarantee contained
above, Parent unconditionally and irrevocably agrees, as a primary obligation,
to indemnify the Selling Shareholders against all costs, expenses, interest,
losses or damages incurred by the Selling Shareholders as a result of the
failure by the Purchaser to perform the Obligations.
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IN WITNESS WHEREOF, Parent, the Purchaser and the Selling Shareholders
have executed this Agreement or caused this Agreement to be executed by their
respective officers duly authorized as of the date first written above.
ENGAGE ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Secretary
ENGAGE, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President and
General Counsel
SELLING SHAREHOLDERS:
/s/ Xxxxx XxXxxxxx
---------------------------------------------
Xxxxx XxXxxxxx
/s/ Xxxxxxx Xxxxx
---------------------------------------------
Xxxxxxx Xxxxx
OPULENT WEALTH LIMITED
By: /s/ Xxxxxxx X. Xxxx
------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Director
E-KONG PILLARS LIMITED
By: /s/ Xxxxx Xxx
-----------------------------------------
Name: Xxxxx Xxx
Title: Director
By: /s/ Xxxxx Xxxxxxx Xxxxxxxxx
-----------------------------------------
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
By: /s/ Xxxxx Xxxxxx Xxxxxx
-----------------------------------------
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
By: /s/ Xxxxxxx Denmark
-----------------------------------------
By: /s/ Xxxxxx Tui Xxxx Xxx
-----------------------------------------
By: /s/ Domina Lam
-----------------------------------------
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------------
By: /s/ Xxxx Xxxxxx
-----------------------------------------
By: /s/ Xxxxxxx Xxxx
-----------------------------------------
By: /s/ Suresh Kanji
-----------------------------------------
By: /s/ Xxxx Xxxxxx
-----------------------------------------
By: /s/ Xxx Xxx
-----------------------------------------
By: /s/ Xxxxxx Xxxxxx
-----------------------------------------
By: /s/ Xxxx Xxxxxx
-----------------------------------------
By: /s/ Xxxxxxx Xxxxx
-----------------------------------------
By: /s/ Xxxxxxxx Xxxxx
-----------------------------------------
By: /s/ Xxxxxxxx Xxxxxx
-----------------------------------------
By: /s/ Xxxxxxxxxx Xxxxxxxx
-----------------------------------------
By: /s/ Noppadon Prapimpunt
-----------------------------------------
By: /s/ Xxxxx Xxxx
-----------------------------------------
By: /s/ Xxxxxxx Xxxx
-----------------------------------------
By: /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------------------
By: /s/ Xxxxxx Xxx Jit Tiong
-----------------------------------------
By: /s/ Xxxx Xxxxxx
-----------------------------------------
By: /s/ Xxxxx Xxx
-----------------------------------------
By: /s/ Xxxxxx Xxx
-----------------------------------------
By: /s/ Xxxx Au
-----------------------------------------
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