EX-4.35 2 d695674dex435.htm EX-4.35 EXECUTION VERSION PURCHASE AGREEMENT DATED FEBRUARY 7, 2014 BY AND BETWEEN SUNGY MOBILE LIMITED, SUNGY TECHNOLOGY CORPORATION, SUNGY TECHNOLOGY LIMITED, GETJAR NETWORKS LIMITED AND THOMAS BURKE, AS THE SELLER...
Exhibit 4.35
EXECUTION VERSION
DATED FEBRUARY 7, 2014
BY AND BETWEEN
SUNGY MOBILE LIMITED,
SUNGY TECHNOLOGY CORPORATION,
SUNGY TECHNOLOGY LIMITED,
GETJAR NETWORKS LIMITED
AND
XXXXXX XXXXX,
AS THE SELLER REPRESENTATIVE
TABLE OF CONTENTS
Page | ||||||
ARTICLE I. DEFINITIONS | 1 | |||||
Section 1.01 | Definitions | 1 | ||||
Section 1.02 | Additional Defined Terms | 6 | ||||
7 | ||||||
Section 2.01 | Shares and Sold IP | 7 | ||||
Section 2.02 | Purchase Consideration; Payment | 7 | ||||
Section 2.03 | Funding of Escrow Account | 7 | ||||
Section 2.04 | Earnouts | 7 | ||||
Section 2.05 | Fair Consideration | 9 | ||||
Section 2.06 | Withholding | 9 | ||||
ARTICLE III. CLOSING | 10 | |||||
Section 3.01 | Closing Date | 10 | ||||
Section 3.02 | Deliveries by Seller | 10 | ||||
Section 3.03 | Deliveries by the Purchaser Parties | 11 | ||||
Section 3.04 | Company Obligations | 11 | ||||
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLER | 11 | |||||
Section 4.01 | Organization; Power | 12 | ||||
Section 4.02 | Authorization | 12 | ||||
Section 4.03 | Capital Structure; Subsidiaries | 13 | ||||
Section 4.04 | No Conflict or Violation | 13 | ||||
Section 4.05 | Consents and Approvals | 14 | ||||
Section 4.06 | Financial Statements and Information | 14 | ||||
Section 4.07 | Books and Records | 14 | ||||
Section 4.08 | Tax Matters | 15 | ||||
Section 4.09 | Absence of Undisclosed Liabilities | 16 | ||||
Section 4.10 | Real Property; Personal Property. | 16 | ||||
Section 4.11 | Employees and Employee Benefit Plans | 17 | ||||
Section 4.12 | Intellectual Property | 18 | ||||
Section 4.13 | Licenses and Permits | 21 | ||||
Section 4.14 | Insurance | 22 | ||||
Section 4.15 | Material Contracts | 22 | ||||
Section 4.16 | FCPA | 22 | ||||
Section 4.17 | Bank Accounts | 23 | ||||
Section 4.18 | Certain Transactions | 23 | ||||
Section 4.19 | Litigation | 23 | ||||
Section 4.20 | Compliance with Law | 23 | ||||
Section 4.21 | Broker’s and Finder’s Fees | 23 | ||||
Section 4.22 | Insolvency | 23 | ||||
Section 4.23 | Assigned Contracts | 23 | ||||
Section 4.24 | Operating Budget | 24 | ||||
Section 4.25 | Source Code; R&D; and Access | 24 |
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ARTICLE V. REPRESENTATIONS OF PURCHASER PARTIES | 24 | |||||
Section 5.01 | Organization; Power | 24 | ||||
Section 5.02 | Authorization and Validity of Agreement | 24 | ||||
Section 5.03 | No Conflict or Violation | 25 | ||||
Section 5.04 | Approvals and Consents | 25 | ||||
Section 5.05 | Broker’s and Finder’s Fees | 25 | ||||
Section 5.06 | Purchaser Shares | 25 | ||||
Section 5.07 | Securities Filings | 25 | ||||
ARTICLE VI. COVENANTS | 25 | |||||
Section 6.01 | Director and Officer Indemnification | 25 | ||||
Section 6.02 | Release of Claims. | 26 | ||||
Section 6.03 | Non-Competition; Non-Solicitation | 26 | ||||
Section 6.04 | Sold IP Further Assurances | 27 | ||||
Section 6.05 | Employee Incentive Shares | 27 | ||||
Section 6.06 | Employee Matters. | 28 | ||||
Section 6.07 | Conduct of Business | 29 | ||||
Section 6.08 | Seller Representative | 29 | ||||
Section 6.09 | Seller Dividends | 29 | ||||
ARTICLE VII. INDEMNIFICATION; SURVIVAL | 29 | |||||
Section 7.01 | Indemnification By Seller | 29 | ||||
Section 7.02 | Indemnification by Purchaser | 30 | ||||
Section 7.03 | Indemnification Notice; Litigation Notice | 30 | ||||
Section 7.04 | Defense of Claims | 31 | ||||
Section 7.05 | Disagreement Notice | 31 | ||||
Section 7.06 | Payment of Losses | 31 | ||||
Section 7.07 | Survival | 32 | ||||
Section 7.08 | Limitations on Indemnity | 32 | ||||
Section 7.09 | Escrow Claims | 33 | ||||
ARTICLE VIII. TAX MATTERS | 33 | |||||
Section 8.01 | Tax Indemnification | 33 | ||||
Section 8.02 | Preparation and Filing of Tax Returns and Payment of Taxes. | 35 | ||||
Section 8.03 | Cooperation, Exchange of Information and Record Retention | 35 | ||||
Section 8.04 | Tax Contests | 36 | ||||
Section 8.05 | Tax Dispute Resolution | 36 | ||||
Section 8.06 | Transfer Taxes | 36 | ||||
Section 8.07 | FIRPTA Certificate | 37 | ||||
Section 8.08 | Tax Treatment | 37 | ||||
Section 8.09 | Exclusivity | 37 |
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ARTICLE IX. INTERIM TRADEMARK LICENSE | 37 | |||||
Section 9.01 | Licensed Trademark | 37 | ||||
Section 9.02 | Restrictions | 37 | ||||
Section 9.03 | Trademark License Term | 37 | ||||
ARTICLE X. MISCELLANEOUS | 37 | |||||
Section 10.01 | Public Announcements | 37 | ||||
Section 10.02 | Costs and Expenses | 38 | ||||
Section 10.03 | Further Assurances | 38 | ||||
Section 10.04 | Seller Representative | 38 | ||||
Section 10.05 | Addresses for Notices, Etc. | 39 | ||||
Section 10.06 | Headings | 41 | ||||
Section 10.07 | Construction | 41 | ||||
Section 10.08 | Severability | 41 | ||||
Section 10.09 | Entire Agreement and Amendment | 42 | ||||
Section 10.10 | No Waiver; Cumulative Remedies | 42 | ||||
Section 10.11 | Parties in Interest | 42 | ||||
Section 10.12 | Successors and Assigns; Assignment | 42 | ||||
Section 10.13 | Governing Law; Dispute Resolution; Arbitration | 42 | ||||
Section 10.14 | Waiver of Jury Trial | 43 | ||||
Section 10.15 | Counterparts | 43 | ||||
Section 10.16 | Table of Contents and Captions | 43 | ||||
Section 10.17 | Schedules, Exhibits and Certificates | 44 |
Exhibit A | Form of Assignment and Assumption Agreement | |
Exhibit B | Form of Escrow Agreement | |
Exhibit C | Form of Employment and Non-competition Agreement | |
Exhibit D | Form of Bird and Bird Opinion | |
Exhibit E | Form of Xxxxxx and Calder Opinion | |
Exhibit F | Form of Restricted Share Award Agreement | |
Exhibit G | Form of FIRPTA Certificate | |
Exhibit H | Form of FIRPTA Notice | |
Schedule 1 | Sold IP | |
Schedule 2 | Revenue Earnout Target | |
Schedule 6.05 | Employee Incentive Shares |
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THIS PURCHASE AGREEMENT (“Agreement”), dated as of February 7, 2014, is by and among Sungy Mobile Limited, an exempted company registered under the laws of the Cayman Islands (“Sungy”), Sungy Technology Corporation, a Delaware corporation and a wholly-owned subsidiary of Sungy (“Purchaser”), Sungy Technology Limited, a company incorporated with limited liability under the laws of the British Virgin Islands and a wholly-owned subsidiary of Sungy (“IP Purchaser” and, together with Sungy and Purchaser, the “Purchaser Parties” and each a “Purchaser Party”), GetJar Networks Limited, a private limited company organized under the laws of the United Kingdom (“Seller”) and Xxxxxx Xxxxx, as the seller representative (the “Initial Seller Representative”).
ARTICLE I.
“Additional Payments” shall mean the Monthly Earnout and the Revenue Earnout.
“Affiliate” shall mean any Person that directly or indirectly controls, is controlled by or is under common control with Purchaser or Seller, as the case may be. As used in this definition, “control” (including, its correlative meanings “controlled by” and “under common control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of outstanding voting securities or partnership or other ownership interests, by Contract or otherwise).
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“Assignment and Assumption Agreement” shall mean the assignment and assumption agreement, dated as of the date hereof, between Seller and the Company substantially in the form of Exhibit A hereof.
“Business” shall mean the business of the Seller (other than the app-store business).
“Business Day” shall mean any day other than Saturday, Sunday and any day on which commercial banks in New York are authorized by Law to be closed.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Company Employee” shall mean any employee of the Company listed in Section 4.11(a) of the Disclosure Schedules.
“Company IP” shall mean all Intellectual Property owned or purported to be owned by the Company.
“Contracts” shall mean any contract, agreement, indenture, note, bond, loan, instrument, lease, conditional sale contract, mortgage, security agreement, license, franchise, commitment or other arrangement or agreement, whether written or oral.
“Earnout Target” shall mean the Monthly Earnout Target or the Revenue Earnout Target, as applicable.
“Employee Plans” shall mean all contracts of employment and each “employee benefit plan,” as defined in Section 3(3) of ERISA (whether or not subject to ERISA), each employment, severance or similar Contract and each other plan or arrangement (written or oral) providing for compensation, bonuses, commission, profit-sharing, stock option or other stock related rights or other forms of incentive or deferred compensation, vacation benefits, insurance (including any self-insured arrangements), health or medical benefits, employee assistance program, disability or sick leave benefits, workers’ compensation, supplemental unemployment benefits, severance benefits, change of control payments, post-employment or retirement benefits and other time-off benefits (including compensation, pension, health, medical or life insurance benefits) which is maintained, administered or contributed by the Company or any ERISA Affiliate and covers any employee or former employee of the Company, or with respect to which the Company has, or could reasonably be expected to have, any Liability.
“Encumbrance” shall mean all liens (statutory or other), leases, mortgages, pledges, security interests, conditional sales agreements, charges, claims, options, easements, rights of way (other than easements of record) and other encumbrances (other than non-exclusive licenses of Intellectual Property entered in the ordinary course of business consistent with past practice) of any kind or nature whatsoever.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” shall mean any trade or business, whether or not incorporated, that together with the Company would be deemed a “single employer” within the meaning of Section 4001(b) of ERISA.
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“Escrow Account” shall have the meaning ascribed to such term in the Escrow Agreement.
“Escrow Agent” shall mean the escrow agent to be appointed pursuant to the Escrow Agreement.
“Escrow Agreement” shall mean the escrow agreement, substantially in the form of Exhibit B hereto, dated as of the Closing Date, by and among Purchaser, Seller and the Escrow Agent.
“GAAP” shall mean the prevailing generally accepted accounting principles in the United States, in effect from time to time, consistently applied.
“Governmental Entity” shall mean any court, government agency, department, commission, board, bureau or instrumentality of the United States, any local, county, state, federal or political subdivision thereof, or any foreign governmental entity of any kind.
“Intellectual Property” shall mean all intellectual property and industrial property rights of any kind or nature throughout the world, including all U.S. and foreign (a) patents and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions, and extensions thereof, and all rights in any of the foregoing, (b) rights in designations of source or origin, such as trademarks, service marks, names, corporate names, trade names, domain names, logos, slogans, trade dress, and designs, (c) copyrights and rights in copyrightable subject matter, (d) rights in Software, (e) rights in trade secrets and all other information, know-how, unpatented inventions, processes, formulae, source code, models, and methodologies which are proprietary or are not generally known or publicly available (“Trade Secrets”), (f) rights of publicity, privacy and rights to Personal Data, (g) rights in databases and data collections, (h) moral rights and rights of attribution and integrity, and (i) all rights in applications and registrations for the foregoing.
The phrases “to the Knowledge of” any Person, or “Known to” any Person, or words of similar import, shall mean the actual knowledge of any Person as well as the knowledge that each such Person could be reasonably presumed to possess by virtue of such Person’s relationship or position with any entity. The phrases “has Knowledge of” or “to the Knowledge of” or “Known to,” when used in reference to (a) Seller, shall mean the Knowledge of Xxxxx Xxxx, Xxxxxx Xxxxxx and Xxx Xxxxx and (b) the Company, shall mean the Knowledge of Xxxxx Xxxx and Xxxxxx Xxxxxx.
“Law” shall mean any local, county, state, federal, foreign or other law, statute, regulation, ordinance, rule, order, decree, judgment, consent decree, settlement agreement or governmental requirement enacted, promulgated, entered into, agreed or imposed by any Governmental Entity.
“Liability” with respect to any Person, shall mean any liability or obligation of any kind of such Person, whether known or unknown, absolute or contingent.
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“Licenses and Permits” shall mean all governmental licenses, permits, franchises, certificates, approvals and authorizations that relate directly or indirectly to, or are necessary for, the conduct of the Company’s business, including, without limitation, those set forth on Section 4.13 of the Disclosure Schedules, and all pending applications therefor or renewals thereof.
“Material Adverse Effect” when used with respect to the Company and/or Seller, shall mean any event, change, occurrence, condition or circumstance which has had or could reasonably be expected to have a material adverse impact on any of the Shares, the Sold IP or the ability of any party hereto to consummate any of the transactions contemplated by this Agreement whether as a result of any legislative or regulatory change, revocation of any Licenses and Permits or otherwise.
“Monthly Earnout” shall mean an aggregate of 288,615 Purchaser Shares.
“Monthly Earnout Target” shall mean, for the months February and March 2014 combined, an aggregate net operating loss of not more than $0.2 million.
“Open Source Materials” shall mean all Software that is distributed under a license that is approved by the Open Source Initiative (as listed at xxxx://xxxxxxxxxx.xxx/xxxxxxxx/xxxxx.xxxx) or that meets the Open Source Definition (as defined at xxxx://xxxxxxxxxx.xxx/xxxx/xxx).
“Person” shall mean any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, or unincorporated organization, or any governmental agency, officer, department, commission, board, bureau, or instrumentality thereof.
“Personal Data” shall mean personally identifiable information and other user data relating to the Business that is in the possession of or under the control of the Company, or Seller or its Affiliates.
“Privacy Laws/Policies” shall mean applicable Laws, and, to the extent applicable to Company, any and all terms of use and privacy policies (or other contractual commitments or obligations) of the Company, governing privacy, data protection, data security or the collection, storage, handling, disclosure, transfer or use of Personal Data collected, stored, processed, used, or held for use by or on behalf of the Company.
“Proceeding” shall mean any action, arbitration, audit, charge, claim, hearing, investigation, litigation or suit.
“Purchaser Shares” shall mean Class A Ordinary Shares of Purchaser.
“Revenue Earnout” shall mean an aggregate of 1,154,459 Purchaser Shares.
“Revenue Earnout Target” shall mean the goals set forth on Schedule 2 hereto.
“Seller Representative” shall mean the Initial Seller Representative or such other Person who may replace the Seller Representative pursuant to the applicable provisions of this Agreement.
“Software” shall mean any and all computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data.
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“Sold IP” shall mean the all Intellectual Property owned by Seller or its Affiliates (other than the Company) related to, or used or held for use in, the Company’s Business, including the Intellectual Property described on Schedule 1 hereto; provided that “Sold IP” does not include the “GetJar” xxxx.
“Tax” or “Taxes” shall mean all federal, state, local and foreign taxes (including premium taxes, gross receipts taxes, excise taxes, value added taxes, occupancy taxes, employment taxes, unemployment taxes, ad valorem taxes, custom duties, transfer taxes, and fees), levies, imposts, impositions, assessments and other governmental charges in the nature of a tax imposed upon a Person, including all taxes and governmental charges imposed upon any of the personal properties, real properties, tangible or intangible assets, income, receipts, payrolls, transactions, stock transfers, capital stock, net worth or franchises of a Person (including all sales, use, withholding or other taxes which a Person is required to collect or pay over to any government), and all related additions to tax, penalties or interest thereon and shall include any liabilities for Taxes of any other Person by contract, as a transferee or successor to another Person, or under Treasury Regulations Section 1.1502-6 or any analogous provisions of state, local or non-U.S. Law.
“Tax Return” shall mean and include all returns, statements, declarations, estimates, forms, reports, information returns and any other documents (including all consolidated, affiliated, combined or unitary versions of the same), including all related and supporting information, filed or required to be filed with any Governmental Entity in connection with the determination, assessment, reporting, payment, collection or administration of any Taxes.
“Transfer Regulations” shall mean the Transfer of Undertakings (Protection of Employment) Regulations 2006 and any other legislation in any relevant jurisdiction to implement or in accordance with the Acquired Rights Directive (EC Business Transfers Directive No. 77/187) (as amended).
“Technology and Documentation” shall mean all technology supporting the Software used or held for use in the Business, and all documentation, including user manuals and training materials, related to any such Software.
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Defined term | Section | |||
Accounting Referee | Section 2.04(d) | |||
Accounts | Section 4.17 | |||
Agreement | Preamble | |||
Assigned Contracts | Section 4.23 | |||
Claim Amount | Section 7.06 | |||
Claimant | Section 7.03 | |||
Closing | Section 3.01 | |||
Closing Date | Section 3.01 | |||
Company | Recitals | |||
Company Budget | Section 4.24 | |||
Continuing Employees | Section 6.06(a) | |||
Determination Date | Section 7.06 | |||
Disagreement Notice | Section 7.05 | |||
Disclosure Schedules | ARTICLE IV | |||
Earnout Dispute Notice | Section 2.04(d) | |||
Earnout Report | Section 2.04(d) | |||
Election Notice | Section 7.04 | |||
Escrow Amount | Section 2.03 | |||
FCPA | Section 4.16 | |||
Final Earnout Report | Section 2.04(d) | |||
Financial Statements | Section 4.06(a) | |||
FIRPTA Certificate | Section 8.07 | |||
FIRPTA Notice | Section 8.07 | |||
Indemnification Basket | Section 7.08(a) | |||
Indemnification Notice | Section 7.03 | |||
Indemnified Parties | Section 7.02 | |||
Indemnifying Party | Section 7.03 | |||
Indemnity Loss | Section 7.01 | |||
IP Purchaser | Preamble | |||
Licensed Trademark | Section 9.01 | |||
Litigation Notice | Section 7.03 | |||
Monthly Earnout Report | Section 2.04(b) | |||
Pre-Closing Tax Period | Section 8.01(a)(ii) | |||
Purchase Consideration | Section 2.02 | |||
Purchaser | Preamble | |||
Purchaser Indemnified Parties | Section 7.01 | |||
Purchaser Parties | Preamble | |||
Purchaser Party | Preamble | |||
Real Property Leases | Section 4.10(b) | |||
Revenue Earnout Report | Section 2.04(c) | |||
Scheduled Contracts | Section 4.15(a) | |||
Seller | Preamble | |||
Seller Indemnified Parties | Section 7.02 | |||
Seller Representative | Preamble | |||
Seller’s Portion | Section 8.01(a)(ii) | |||
Shares | Section 4.03(a) | |||
Special Representations | Section 7.07 | |||
Straddle Period | Section 8.01(a)(ii) | |||
Sungy | Preamble | |||
Survival Date | Section 7.07 | |||
Tax Claim | Section 8.01(d) | |||
Tax Indemnity Termination Date | Section 8.01(b) | |||
Tax Specialist | Section 8.05 | |||
Union | Section 4.11(d) |
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ARTICLE II.
PURCHASE AND SALE OF THE SHARES AND SOLD IP
Section 2.01 Shares and Sold IP. Upon the terms and subject to the conditions set forth in this Agreement and on the basis of the representations, warranties, covenants and agreements herein contained, at the Closing, (i) Purchaser shall purchase, acquire and accept from Seller, and Seller shall sell, transfer, assign, convey and deliver to Purchaser, all of the right, title and interests in and to the Shares free and clear of all Encumbrances and (ii) IP Purchaser shall purchase, acquire and accept from Seller, and Seller shall sell, transfer, assign, convey and deliver to IP Purchaser, all of the right, title and interests in and to the Sold IP free and clear of all Encumbrances.
(a) In addition to the Purchase Consideration, Sungy shall pay each of the Additional Payments, if any, to Seller in accordance with this Section 2.04.
(c) Determination of Revenue Earnout Target Achievement. On or prior to April 20, 2015, the Purchaser Parties shall prepare and deliver to Seller a written report (the “Revenue Earnout Report”) with their determination of achievement of the Revenue Earnout Target and the calculation thereof.
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(i) in the case of the Monthly Earnout, if both (A) a Final Earnout Report has been issued stating that the Monthly Earnout Target has been achieved and (B) a Final Earnout Report has been issued stating that the Revenue Earnout Target has been achieved, then within five (5) Business Days of the issuance of the Final Earnout Report referenced in clause (B); and
(ii) in the case of the Revenue Earnout, one-half within five (5) Business Days of the issuance of a Final Earnout Report stating that the Revenue Earnout Target has been achieved and one-half on the first Business Day after the first anniversary of the initial Revenue Earnout payment.
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ARTICLE III.
(a) evidence reasonably satisfactory to the Purchaser Parties of the capacity and authority of each person executing any document to be delivered by Seller to the Purchaser Parties at or prior to Closing;
(b) resignations of each director of the Company;
(c) copies of each consent, waiver, authorization and approval required pursuant to Section 4.05 of this Agreement;
(d) a Certificate of Good Standing of the Company issued by the Secretary of State of the State of Delaware and a Certificate of Foreign Qualification of the Company issued the Secretary of State of the State of California, each dated within ten (10) calendar days of the Closing;
(e) copies of resolutions adopted by the board of directors of Seller authorizing and approving the execution and delivery of this Agreement and all agreements and other documents and instruments contemplated hereby and thereby and the consummation of the transactions contemplated hereby and thereby, certified to be true, complete, correct and in full force and effect by the Secretary of Seller;
(f) a cross receipt duly executed by Seller acknowledging delivery by Sungy of the Purchase Consideration;
(g) a copy of the Assignment and Assumption Agreement, duly executed by Seller and the Company;
(h) a copy of the Escrow Agreement duly executed by Seller;
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(i) executed copies of employment and non-competition agreements substantially in the form of Exhibit C hereto between the Company and each of Xxxxxx Xxxxxx, Xxxxxxx Xxxxx Xxxxx, Xxxxxxx X. Xxxxxx and Xxxxx X. Xxx;
(j) the FIRPTA Certificate, duly executed by the Company;
(k) the FIRPTA Notice, duly executed by the Company; and
(l) an opinion of Bird & Bird, UK counsel to Seller, dated as of the Closing, in substantially the form attached as Exhibit D hereto.
Section 3.03 Deliveries by the Purchaser Parties.
(a) Concurrently with the Closing, the Purchaser Parties shall deliver (or cause to be delivered) to Seller:
(i) the Purchase Consideration paid by wire transfer of immediately available funds to the account or accounts designated by Seller; and
(ii) a copy of the Escrow Agreement duly executed by the Purchaser Parties.
(b) Promptly, but in any event no later than three (3) Business Days after the Closing Date, the Purchaser Parties shall deliver (or cause to be delivered) to Seller an opinion of Xxxxxx and Calder, Cayman Islands counsel to Purchaser, dated as of the Closing, in substantially the form attached hereto as Exhibit E hereto.
(c) Concurrently with the Closing, the Purchaser Parties shall deliver (or cause to be delivered) to the Escrow Agent:
(i) the Escrow Amount paid by wire transfer of immediately available funds to the account or accounts designated by the Escrow Agent; and
(d) a copy of the Escrow Agreement duly executed by the Purchaser Parties.
Section 3.04 Company Obligations. Concurrently with the Closing, Seller shall ensure that the board of directors of the Company takes appropriate corporate action, whether at a properly convened meeting of the board of directors or by means of an action by written consent, to accept the resignations of each director of the Company effective as of the Closing.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to the Purchaser Parties as of the date of this Agreement, subject to such exceptions as are specifically disclosed in the disclosure schedules delivered by Seller to the Purchaser Parties concurrently with the execution of this Agreement (the “Disclosure Schedules”):
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Section 4.01 Organization; Power.
(a) Seller is a private limited company duly organized, validly existing, and in good standing under the Laws of the United Kingdom. Seller has full corporate power and authority to own, lease and operate its assets and to conduct its business as it is now being conducted, except where the failure to be so duly qualified and licensed and in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or prevent or materially impair or delay the ability of Seller to perform its obligations under this Agreement.
(b) The Company is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Delaware. The Company has full corporate power and authority to own, lease and operate its assets and to conduct its business as it is now being conducted. The Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification necessary, except where the failure to be so duly qualified and licensed and in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. The copies of the certificate of incorporation and by-laws of the Company which were previously furnished to the Purchaser Parties are true, complete and correct copies of such documents as in effect on the date of this Agreement and as of the Closing.
(a) Seller has the full corporate power and authority to enter into this Agreement and such other agreements, documents and instruments contemplated by this Agreement to which it is a party and to carry its obligations hereunder and thereunder. The board of directors of Seller has determined that this Agreement and the transactions contemplated hereby are fair to and in the best interests of Seller and its stockholders.
(b) The execution and delivery of this Agreement and such other agreements, documents and instruments contemplated by this Agreement by Seller and the consummation by Seller of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action on the part of Seller, including (i) the majority of the board of directors of Seller and (ii) seventy-five percent (75%) of the outstanding shares of Seller, and no other corporate or other proceedings on the part of Seller is necessary to authorize the execution, delivery and performance of this Agreement or any other such agreement, document or instrument contemplated by this Agreement, as applicable.
(c) This Agreement has been duly and validly executed and delivered by Seller and, assuming that this Agreement constitutes a valid and binding agreement of the Purchaser Parties, constitutes a valid and binding obligation of Seller, enforceable against Seller in accordance with its terms and conditions, except that such enforceability may be limited by applicable bankruptcy, insolvency, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally or general principles of equity.
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Section 4.03 Capital Structure; Subsidiaries.
(a) As of the Closing Date, the authorized capital of the Company consists solely of one thousand (1,000) shares of common stock, par value $0.001 per share, of the Company, of which one thousand (1,000) shares are issued and outstanding (the “Shares”) and are held beneficially and of record by Seller, free and clear of any Encumbrances. The Shares have been duly authorized, are fully paid and non-assessable and were issued in compliance in all material respects with all applicable federal and state securities Laws, and constitute all of the outstanding equity interests of the Company.
(b) There are no outstanding options, warrants, calls, commitments, agreements or other rights of any kind obligating Seller or the Company to issue, deliver or sell, pledge, grant a security interest on or encumber or cause to be issued, delivered or sold, pledged or encumbered or a security interest to be granted on, any equity interests of the Company or obligating Seller or the Company to grant, extend or enter into any such option, warrant, call, commitment, agreement or other right.
(c) The Company does not, directly or indirectly have any subsidiaries and, as of the Closing Date, will not directly or indirectly own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, limited liability company, association, or other business entity. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of shares of capital stock or other equity interests of the Company.
Section 4.04 No Conflict or Violation. Except as set forth on Section 4.04 of the Disclosure Schedules, the execution, delivery, consummation and performance of this Agreement by Seller does not and will not: (a) violate or conflict with any provision of the articles of incorporation or bylaws of Seller or the Company, or resolutions adopted by the board of directors of Seller or the Company; (b) violate any applicable Law or Privacy Laws/Policies to which Seller or the Company are subject; (c) with or without notice, lapse of time or both, violate or result in a breach of, or constitute a default under, result in the acceleration of or create in any Person the right to accelerate, terminate or cancel any material Contract, consent, order or other instrument or obligation to which Seller or the Company is a party, or by which Seller’s or the Company’s assets or properties may be bound; (d) result in the imposition of any Encumbrance or restriction on the Shares, the Company IP or the Sold IP (with or without notice, lapse of time or both); or (e) result in the loss or impairment of or payment of any additional amounts with respect to, require the consent of any other Person in respect of, nor give rise to any right of any Person to terminate or alter, the Company’s right to own, use, or hold for use any Company IP, Sold IP or any Intellectual Property of any third party as owned, used or held for use in the conduct of the Business, in the case of each of (b), (c), (d) and (e) above, which would reasonably be expected to have a material adverse impact on the Company, the Business or the Sold IP.
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Section 4.06 Financial Statements and Information.
(a) The Seller has delivered or made available to the Purchaser Parties true and complete copies of the following financial statements (such financial statements, the “Financial Statements”):
(i) the unaudited balance sheet of the Company as of December 31, 2012 and 2013;
(ii) the unaudited income statements of the Company for the years ended December 31, 2012 and 2013; and
(iii) the unaudited cash flow statements of the Company for the years ended December 31, 2012 and 2013.
(b) The Financial Statements (i) are accurate and complete in all material respects and have been prepared based on the books and records of the Company in accordance with GAAP applied on a consistent basis throughout the periods covered thereby and (ii) fairly present, in all material respects, the financial position of the Company as of the dates thereof and the results of operations for the periods then ended, in each case, subject to the absence of footnotes for the periods covered by the Financial Statements.
(c) The Company maintains systems of internal accounting controls reasonably designed to provide reasonable assurances that (i) all transactions are executed in accordance with management’s general or specific authorization, (ii) all transactions are recorded as necessary to permit the preparation of annual and interim financial statements in conformity with GAAP and to maintain proper accountability for items, (iii) access to its property and assets is permitted only in accordance with management’s general or specific authorization and (iv) that the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
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(a) The Company has filed or caused to be filed on a timely basis all material Tax Returns that are or were required by applicable Law to be filed by it. All material Tax Returns required to be filed by Seller in respect of the Sold IP have been duly filed on a timely basis. All such Tax Returns filed by the Company or Seller, as applicable, are true, correct and complete in all material respects and were prepared in compliance with all applicable Laws. The Company has paid all Taxes required to be paid by it and Seller has paid all Taxes relating to the Sold IP, except such Taxes as are being contested in good faith and as to which adequate reserves have been provided. Except as would not reasonably be expected to result in a material Liability to the Company, the Company has made all withholding of Taxes required by applicable Law to be made by it, including, without limitation, withholding with respect to compensation paid to employees, and the amounts withheld have been properly paid over to the appropriate Governmental Entity.
(b) Section 4.08(b) of the Disclosure Schedules contains a complete and accurate list of all Tax Returns of the Company or Seller relating to the Sold IP (excluding any corporate Tax Returns of Seller) that have been audited or that are currently under audit and accurately describes any deficiencies or other amounts that were paid or are currently being contested. All deficiencies proposed as a result of such audits have been paid, reserved against, settled or are being contested in good faith by appropriate proceedings as described on Section 4.08(b) of the Disclosure Schedules. The Company has delivered or made available to Purchaser copies of any examination reports, statements or deficiencies or similar items with respect to such audits. The Company or Seller has not been informed in writing by any Governmental Entity of the commencement or anticipated commencement of any such audit. Neither the Company nor Seller (to the extent related to the Sold IP) has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, which period (after giving effect to such waiver or extension) has not expired.
(c) The Company is not a party to any Tax sharing agreement, Tax allocation agreement, Tax indemnity agreement or similar Contract relating to Taxes (including any advance pricing agreement or closing agreement relating to Taxes but excluding any commercial contracts entered into in the ordinary course of business not primarily related to Taxes) that will require any payment by the Company after the Closing Date.
(d) There are no liens for Taxes upon any property or assets of the Company or the Sold IP except for liens for real and personal property Taxes not yet due and payable.
(e) The Company will not be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) “closing agreement” as described in Section 7121 of the Code (or any corresponding provision of state, local or foreign income Tax Law) entered into prior to the Closing; (ii) installment sale or open transaction disposition made on or prior to the Closing Date; (iii) prepaid amount received on or prior to the Closing Date; (iv) cancellation of indebtedness income under Section 108(i) of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law); or (v) intercompany transaction or excess loss accounts described in the Treasury Regulations promulgated under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law) relating to a transaction occurring prior to the Closing.
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(f) No power of attorney has been granted by or with respect to the Company with respect to any matter relating to Taxes that is currently in effect.
(g) Each material related party transaction involving the Company is at arm’s length in material compliance with Section 482 of the Code and the Treasury Regulations promulgated thereunder and any similar provision of non-U.S., state and local Law. The Company is not a party to any cost-sharing agreement or similar arrangement which is not a “qualified cost sharing arrangement” within the meaning of Treasury Regulation Section 1.482-7 or is not a “cost sharing arrangement” described in Treasury Regulation Section 1.482-7T(b). The Company has maintained in all material respects all necessary documentation in connection with such related party transactions in accordance with Sections 482 and 6662 of the Code and with Treasury Regulations promulgated thereunder.
(h) The Company has not been a member of any affiliated group within the meaning of Section 1504(a) of the Code, or any similar affiliated or consolidated group for Tax purposes under state, local or non-U.S. Law (other than a group the common parent of which is the Company), or has any liability for Taxes of any Person (other than the Company) under Treasury Regulation Section 1.1502-6 or any similar provision of state, local or non-U.S. Law as a transferee or successor, by contract or otherwise.
(i) The Company has not engaged in any reportable transactions that were required to be disclosed pursuant to Section 6011 of the Code and the Treasury Regulations promulgated thereunder.
Section 4.10 Real Property; Personal Property.
(a) Owned Real Property. The Company does not own any real property.
(b) Leased Real Properties. Section 4.10 of the Disclosure Schedules sets forth a true and complete list of all leases of real property to which the Company is a party or by which the Company is bound, in each case, as of the date hereof (collectively, the “Real Property Leases”). Each Real Property Lease is a valid, binding and legally enforceable obligation of the Company and, to the Company’s Knowledge, of the other parties thereto, except, in each case, as enforcement may be limited by bankruptcy, insolvency, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally or general principles of equity. Each Real Property Lease is in full force and effect and the Company is not (with or without notice or lapse of time, or both) in breach or default under any such Real Property Lease and, to the Company’s Knowledge, no other party to any such Real Property Lease is (with or without notice or lapse of time, or both) in breach or default thereunder.
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(c) Personal Property. As of the date hereof, the Company owns or holds under valid leases all material tangible personal property necessary for the conduct of the Business as presently conducted by the Company, free and clear of all Encumbrances.
Section 4.11 Employees and Employee Benefit Plans.
(a) Section 4.11 of the Disclosure Schedules contains a true and complete list of (i) all employees of the Company and each such employee’s location of employment, title or position, hourly rate or salary, 2013 bonus and 2014 target bonus, classification as exempt or non-exempt, and whether such employee is employed at-will or has any entitlement to severance or notice period in connection with the termination of employment, and (ii) all individuals who act as independent contractors or consultants to the Company.
(b) Except as set forth on Section 4.11 of the Disclosure Schedules:
(i) none of the employees of the Company is entitled to any bonus, incentive or deferred compensation or termination package which exceeds the minimum obligations imposed by applicable Laws;
(ii) neither Seller nor the Company has entered into any agreement with any of the employees of the Company which provides for a termination notice or termination indemnities greater than the minimum termination notice or indemnities provided by applicable Law;
(iii) the Company is in compliance in all material respects with applicable Laws relating to employment or labor matters; and
(c) there is no lawsuit, arbitration, labor dispute or proceedings pending against the Company or Seller initiated by or relating to any of the employees of the Company or any former employee or contractor of the Company.
(d) No employee of the Company is represented by any trade union, works council or other labor organization (“Union”) with respect to his or her employment with the Company, and to the Knowledge of the Company, there are no Union organizing activities with respect to the Company’s employees. The Company is not bound by or subject to any Contract or collective bargaining agreement with any Union. There has not been, and to the Knowledge of the Company, there is not pending or threatened, any strike, lockout, or picketing involving the Company.
(e) Section 4.11 of the Disclosure Schedules contains a true and complete list of all Employee Plans, and the Company does not sponsor, maintain or contribute to and is not required to contribute to any other employee benefit plan, fund, program, agreement or arrangement. Seller has heretofore made available to Purchaser a true and complete copy of each Employee Plan and any amendments thereto. No liability under Title IV or Section 302 of ERISA has been incurred by the Company or any ERISA Affiliate that has not been satisfied in full. Each Employee Plan has been operated and administered in all material respects in accordance with its terms and applicable Law.
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(f) Except as set forth on Section 4.11 of the Disclosure Schedules, the Company is not party to any agreement, contract, arrangement or plan, in each case, that has resulted in or could result, separately or in the aggregate, in the (i) payment of any severance or any increase in severance pay, including, without limitation, upon any termination of employment after the date of this Agreement, to any employee or former employee of the Company (ii) acceleration of the time of payment or vesting or result in any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or result in any other material obligation pursuant to, any Employee Plan with respect to any employee or former employee of the Company, or (iii) payment of any “excess parachute payment” within the meaning of Section 280G of the Code, and the consummation of the transactions contemplated by this Agreement will not be a factor causing payments to be made that are not deductible (in whole or in part) as a result of the application of Section 280G of the Code or result in an excise tax to the recipient of such payment pursuant to Section 4999 of the Code.
(g) Except as set forth on Section 4.11 of the Disclosure Schedules, neither the Company nor any ERISA Affiliate has any current or projected liability in respect of post-employment or post-retirement health, medical or life insurance benefits for retired, former or current employees of the Company or any ERISA Affiliate, except as required to avoid excise tax under Section 4980B of the Code. No condition exists that would prevent Purchaser from amending or terminating any Employee Plan.
(h) The Seller shall satisfy in full all Liabilities arising at any time in relation to or concerning any entitlement of or other benefit to the officers and employees of the Company under or in accordance with the Seller’s Share Option Scheme adopted by resolution of the Seller’s directors on October 24, 2007 including, without limitation, any such Liabilities arising on or in relation to the transaction contemplated in this Agreement.
Section 4.12 Intellectual Property.
(a) Sold IP. Schedule 1 sets forth a complete and accurate list of all Intellectual Property owned or purported to be owned by Seller that is (i) registered Intellectual Property and applications therefor (other than the “GetJar” xxxx) or (ii) Software that is material to the Business. Seller has complete and unrestricted power and the unqualified right to sell, convey, assign, transfer and deliver the Sold IP, and the instruments of assignment and transfer to be executed and delivered by Seller to Purchaser concurrently herewith shall be valid and binding obligations of Seller, enforceable in accordance with their respective terms, and shall effectively vest in Purchaser good, marketable and insurable title to the Sold IP.
(b) Company IP. Section 4.12(b) of the Disclosure Schedules sets forth a complete and accurate list of all Company IP that is (i) registered Intellectual Property and applications therefor or (ii) Software that is material to the Business. The Company is the sole and exclusive owner and, with respect to applications and registrations, record owner, of all Company IP, free and clear of all Encumbrances, and all Company IP is subsisting and, to the Knowledge of Seller, is valid and enforceable. None of the Company IP or Sold IP is subject to any proceeding before, outstanding order, writ, or injunction of or stipulation with any Governmental Entity, or any Contract entered into in settlement of such a proceeding, restricting the use, transfer or licensing by the Company thereof. None of the Company IP or Sold IP is subject to any exclusive outbound licenses or any non-exclusive outbound licenses (other than non-exclusive licenses granted in the ordinary course of business consistent with past practice).
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(c) No Infringement. To the Knowledge of Seller, the conduct of the Business, as such Business has been conducted and is presently conducted does not infringe, misappropriate, or otherwise violate, and has not infringed, misappropriated, or otherwise violated, any Person’s Intellectual Property rights, and there has been no such claim asserted or threatened (including in the form of offers or invitations to obtain a license to patents of any Person) against the Company or Seller, or, to the Knowledge of Seller, any other Person. To the Knowledge of Seller, no Person is infringing, misappropriating, or otherwise violating any Company IP or Sold IP in a manner that would reasonably be expected to be material to the Company, and no such claims have been asserted or threatened against any Person by or on behalf of the Company or Seller.
(d) Sufficiency. To the Knowledge of Seller, the Company IP, the Sold IP and the Open Source Materials owned by the Company comprise all of the Intellectual Property owned by the Company, Seller and Seller’s Affiliates that is used in, held for use in, or necessary to run the Business as currently conducted.
(e) Employees. Each founder and each current and former employee and independent contractor of the Company, Seller or their Affiliates that has invented, created or developed any Intellectual Property used or held for use in the Business has executed a written agreement that, subject to limitations of applicable Laws: (i) assigns to the Company, Seller or their Affiliate, as applicable, all right, title and interest in and to any and all Intellectual Property (x) relating at the time of conception or reduction to practice to the Business or (y) resulting from work performed by such founder, employee or independent contractor for the Company, Seller or their Affiliate, as applicable; and (ii) contains provisions designed to prevent unauthorized disclosure of the Company’s, Seller’s or their Affiliate’s, as applicable, Trade Secrets. To the Knowledge of Seller, no party to such written Contract has breached or violated the terms thereof or has attempted or threatened to challenge the enforceability, scope or applicability of any such Contract. No Intellectual Property used or held for use in the Business was invented, created or developed by any founder or current or former employee of the Company, Seller or their Affiliate, as applicable, prior to such Person’s employment by the Company, Seller or their Affiliate, as applicable.
(f) Maintenance of Trade Secrets. Seller and the Company take reasonable measures to protect the confidentiality of Trade Secrets owned, used or held for use by the Company. To the Knowledge of Seller, there has not been any disclosure or publication of any Trade Secrets owned by the Company, Seller or their Affiliates to any Person in a manner that has resulted or is likely to result in the loss of trade secret or other proprietary rights in and to such information (other than when the Company, Seller or their Affiliates, as applicable, has made a commercially reasonable, bona fide decision to no longer maintain the information as confidential).
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(g) Results of Consummation of Transaction. No current or former Affiliate, partner, director, stockholder, officer, consultant or employee of the Company will, after giving effect to the Transactions, own any Intellectual Property used in, held for use in, or otherwise material to the Business or retain any rights to use any of the Company IP, except for any rights to use the Company’s products and services that such Person has obtained in the same manner and to the same extent as any other third party customer of the Company generally obtains rights to use the Company’s products or services.
(h) Company Software. With respect to the use of Software and Technology and Documentation in the Business, (i) the Company has not experienced any material defects in such Software or Technology and Documentation, including any material error or omission in the processing of any transactions, other than defects which have been corrected, remediated, or otherwise sufficiently addressed so as to render them immaterial, (ii) to the Knowledge of Seller, no such Software or Technology and Documentation owned by the Company or used in the Business contains any device or feature designed to permit unauthorized access, disrupt, disable, or otherwise harm, damage or impair the functioning of any Software, Technology and Documentation, and (iii) the Company, Seller and their Affiliates have not delivered, licensed or made available, and none of the Company, Seller and their Affiliates have any duty or obligation (whether present, contingent, or otherwise) to deliver, license or make available, the source code for any Software owned by the Company or used in the Business to any escrow agent or other Person, except for (A) source code made available to employees and independent contractors to the extent necessary to permit such employees and independent contractors to perform their duties for the benefit of the Company and (B) source code for the Company’s SDK provided to app developers in the ordinary course of business.
(i) Information Technology; Security. Except as may be set forth in Section 4.12(i) of the Disclosure Schedules, no information technology systems of Seller or its Affiliates (other than the Company) are used or held for use in the Business, and after the consummation of the Transactions contemplated in this Agreement, no information technology systems that are used or held for use in the Business will be retained by Seller or its Affiliates. The Company has taken reasonable steps and implemented reasonable procedures designed to protect its information technology systems from (i) the inclusion of any device or feature designed to permit unauthorized access, disrupt, disable or otherwise harm, damage or impair Software, hardware or data, and (ii) unauthorized access, use, modification or other misuse. To the Knowledge of Seller, there have been no material security breaches in the information technology systems of the Company. There have been no disruptions in any of the information technology systems of the Company that have materially adversely affected the Business or operations of the Company.
(j) Open Source Materials. The Company is in material compliance with the terms and conditions of all licenses for the Open Source Materials used by the Company, including all copyright notice and attribution requirements. Except as may be set forth in Section 4.12(j) of the Disclosure Schedules, the Company has not: (i) incorporated Open Source Materials into, or combined Open Source Materials with, (ii) distributed Open Source Materials in conjunction with, or (iii) used Open Source Materials in connection with, any Software owned by the Company, in such a way that, with respect to (i), (ii) or (iii), requires any source code of Software owned by the Company to be (A) offered, disclosed, or distributed, (B) licensed for the purpose of making derivative works, or (C) redistributed at no charge, in each case to any Person.
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(k) Inbound Licenses. Other than the Open Source Software owned by the Company, licenses to generally commercially available Software that is available for a cost of not more than $1,000, and licenses to use the information technology systems licensed or leased from vendors in the ordinary course of business, the Company does not license any Intellectual Property material to the Business from any third Person.
(l) Privacy. The Company has never transferred, sold, rented or otherwise made available any Personal Data (including name, address, telephone number or email address) of any natural person to any Person. The Company has at all times complied with all applicable Privacy Laws/Policies in all material respects. No claims have been asserted or threatened against the Company (or Seller or any of their Affiliates in relation to the Business), alleging a violation of any Person’s privacy or personal information or data rights (or of any applicable Privacy Laws/Policies). The Company has taken commercially reasonable steps to implement and maintain a system of internal controls designed to provide reasonable assurance that the Company complies with all applicable Privacy Laws/Policies.
(m) Intellectual Property Indemnification Obligations. Except for those Contracts identified in Section 4.12(m) of the Disclosure Schedules, there are no Contracts between the Company and any other Person wherein or whereby the Company has assumed or agreed to assume any obligation or duty or to warrant, indemnify, reimburse, hold harmless, guaranty or otherwise assume or incur any obligation or liability of such Person with respect to any infringement, misappropriation, dilution or other violation of a third Person’s Intellectual Property.
(n) Communications with Google. Google Inc. has never asserted to the Company, Seller or their Affiliates that the Company or the Business was in violation of any of the applicable terms of service, terms of use, policies or any Contracts between the Company and Google Inc. or otherwise governing the Business, and, to the Knowledge of the Company, Google Inc. has never prevented the Company, Seller or their Affiliates from offering, and has never threatened to prevent the Company, Seller or their Affiliates from offering, any products or services related to the Business through Google Play.
(o) Government Funding; Standard-Setting Organizations. To the Knowledge of Seller, no funding, facilities or personnel of any Governmental Entity, educational institution or research center, was used in the invention, creation or development of any material Company Intellectual Property or Sold IP. The Company, Seller and their Affiliates have not made any submission or suggestion to, and are not (and have never been) subject to any Contract with, any standard-setting organization, standards body, consortium or any similar organization that would obligate the Company, Seller or their Affiliates to grant licenses to or otherwise impair or limit their control of any Intellectual Property rights which relate to the Business.
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Section 4.15 Material Contracts.
(a) Section 4.15 of the Disclosure Schedules sets forth a true, complete and correct list of each material Contract (collectively, the “Scheduled Contracts”) to which the Company is a party or by which it is bound that is currently in effect including all Contracts relating to: employment of any person; aggregate committed payments to or from the Company in excess of $30,000 per year; or agreements between the Company and any of its Affiliates, in each case, other than at-will offer letters containing no severance provisions and other than consulting contracts, which may be cancelled on less than ninety (90) days notice without penalty to the Company.
(b) With respect to the Company’s performance of its obligations under the Scheduled Contracts, no event of default or breach has occurred or is continuing under any such Scheduled Contract. With respect to the performance by any other party of its obligations under the Scheduled Contracts, to the Knowledge of the Company no event of default or breach has occurred or is continuing under any such Scheduled Contract.
The Company has provided Purchaser with true and complete copies of all the Scheduled Contracts of the Company and each amendment, supplement, waiver or modification thereto. All of the Scheduled Contracts identified on, or required to be identified on Section 4.15 of the Disclosure Schedules are in full force and effect. There are no renegotiations of, attempts to renegotiate or outstanding rights to renegotiate any amounts paid by or payable to the Company under current or completed Scheduled Contracts with any Person having the contractual or statutory right to demand or require such renegotiation, and no such Person has made written demand for such renegotiation.
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Section 4.21 Broker’s and Finder’s Fees. No broker, finder or other Person is entitled to any commission or finder’s fee in connection with this Agreement or the transactions contemplated by this Agreement as a result of any actions or commitments of the Company or Seller.
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Section 4.25 Source Code; R&D; and Access. At or prior to the Closing Date, the Company has delivered to Sungy a complete and accurate copy of the source code of the GetJar advertising platform, documentation relating to any current research and development projects and access and administrative rights to the information technology systems (including servers and computers) of the Company.
ARTICLE V.
REPRESENTATIONS OF PURCHASER PARTIES
Each of the Purchaser Parties hereby represents and warrants to Seller as follows:
Section 5.02 Authorization and Validity of Agreement.
(a) It has all requisite corporate power and authority to enter into this Agreement. This Agreement has been duly and validly executed and delivered by it and, assuming that this Agreement constitutes a valid and binding agreement of Seller, constitutes a valid and binding obligation of it, enforceable against it in accordance with its terms and conditions, except that such enforceability may be limited by applicable bankruptcy, insolvency, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally or general principles of equity. No other corporate proceedings on its part, including without limitation, a vote of its equity holders, are necessary to authorize the execution or delivery of this Agreement.
(b) It has all requisite corporate power and authority to enter into all other agreements, documents and instruments executed by it in connection with the transactions contemplated by this Agreement, and to perform its obligations hereunder and thereunder. All other agreements, documents and instruments executed by it in connection with the transactions contemplated by this Agreement have been duly and validly executed and delivered by it and, assuming that such agreement, document or instrument constitutes a valid and binding agreement of each other party thereto, shall constitute a valid and binding obligation of it, enforceable against it in accordance with each of their terms and conditions, except that such enforceability may be limited by applicable bankruptcy, insolvency, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally or general principles of equity. The execution and delivery of all other agreements, documents and instruments executed by it in connection with the transactions contemplated by this Agreement and the performance of the obligations of it hereunder and thereunder have been duly authorized by all necessary corporate action by its board of directors. No other corporate proceedings on its part are necessary to authorize the execution, delivery or performance of such other agreements, documents and instruments contemplated by this Agreement to which it is a party, or the transactions contemplated.
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Section 5.05 Broker’s and Finder’s Fees. No broker, finder or other Person is entitled to any commission or finder’s fee in connection with this Agreement or the transactions contemplated by this Agreement as a result of any actions or commitments of it or its Affiliates.
ARTICLE VI.
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Section 6.02 Release of Claims.
(a) From and after Closing, Seller hereby waives any claims which it might otherwise have against the Company or any employees of the Company in respect of the completeness or accuracy of any information supplied, or for any failure to supply information, to Seller or any of its Affiliates in connection with this Agreement and the transactions contemplated hereby.
(b) From and after the Closing, except as arising out of actions or omissions occurring after the Closing Date or arising as a result of this Agreement between Seller or any of its Affiliates, on the one hand, and the Company, on the other hand, and without prejudice to the representations and warranties given by given by the Purchaser Parties pursuant to ARTICLE V, Seller hereby waives and releases the Company, its Affiliates, their respective shareholders, and their respective officers, directors and employees from, to the fullest extent permitted by applicable Law, any and all other rights, defenses, claims and causes of action, known or unknown, foreseen or unforeseen which Seller has or may have in the future against the Company or any of its Affiliates.
(c) From and after the Closing, except as arising out of actions or omissions occurring after the Closing Date or arising as a result of this Agreement between Purchaser, on the one hand, and the Company, on the other hand, and without prejudice to the representations and warranties given by Seller pursuant to ARTICLE IV, the Purchaser Parties hereby waive and release Seller, its Affiliates, their respective shareholders, and their respective officers, directors and employees from, to the fullest extent permitted by applicable Law, any and all other rights, defenses, claims and causes of action, known or unknown, foreseen or unforeseen which the Company has or may have in the future against Seller or any of its Affiliates.
Section 6.03 Non-Competition; Non-Solicitation.
(a) Seller and its subsidiaries shall not, at any time during the three (3) year period immediately following the Closing Date, directly or indirectly, own, manage, control or participate in the ownership, management or control of , any Person primarily engaged in the mobile advertising network, except as explicitly contemplated under this Agreement, in the geographic regions where the Business is conducted as of the Closing Date; provided, however, that the ownership of securities representing no more than five percent (5%) of the outstanding voting power of any competitor, developer, publisher or customer of the Company, which securities are listed on any national securities exchange or traded actively in the national over-the-counter market, shall not be deemed to be a breach of this provision so long as the Person owning such securities has no other material connection or relationship with such competitor, developer, publisher or customer; and provided, further, that the business of the Seller’s subsidiaries as conducted by Seller’s subsidiaries as of the Closing Date shall not be deemed a violation of this Section 6.03(a).
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(b) Seller further agrees that for a period of three (3) years after the Closing Date, it shall not, and shall not permit any of its subsidiaries to, directly or indirectly, for Seller’s benefit, or for the benefit of any other Person, solicit the employment or services of, hire, or retain any person who as of the Closing Date was employed by the Company as an employee or consultant.
(c) It is the desire and intent of the parties that the provisions of this Section 6.03 shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. If any particular provisions or portion of this Section 6.03 shall be adjudicated to be invalid or unenforceable but would be valid and enforceable if part of the wording of the restriction is deleted or any time period is shortened, such restriction shall apply with such modifications as is necessary to make it valid and enforceable.
(d) The parties recognize that the performance of the obligations under this Section 6.03 by Seller are special, unique and extraordinary in character, and that in the event of the breach by Seller of the terms and conditions of this Section 6.03 the Purchaser Parties shall be entitled, if so elected, to obtain damages for any breach of this Section 6.03, or seek to enforce the specific performance thereof by Seller, or to enjoin Seller from performing services for any Person.
For the avoidance of doubt, nothing in this Section 6.03 shall bind the shareholders of Seller, and only those shareholders of Seller who enter into an employment and non-competition agreement with the Company pursuant to this Agreement are so bound in accordance with the terms of such shareholder’s agreement.
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Section 6.06 Employee Matters.
(a) Following the Closing Date, Company employees that continue employment with the Company or become employed by Sungy or a subsidiary of Sungy (the “Continuing Employees”) will receive employee benefits no less favorable in the aggregate than (i) benefits provided by the Company immediately prior to the Closing Date and which have been disclosed to Purchaser prior to the Closing Date, or (ii) benefits provided by Sungy or its subsidiary to similarly-situated employees. For purposes of determining eligibility to participate, vesting and entitlement to benefits where length of service is relevant (including for purposes of vacation accrual) under employee benefit plans of Sungy or its subsidiaries in which Continuing Employees participate, Sungy or Purchaser shall cause Continuing Employees to receive service credit for their period of service with the Company prior to the Closing Date, except where doing so would cause a duplication of benefits. To the extent permitted by applicable law, Sungy will waive limitations as to preexisting conditions exclusions (or actively at work or similar limitations), evidence of insurability requirements and waiting periods with respect to participation and coverage requirements applicable to the Continuing Employees under any medical, dental and vision plans in which such employees become eligible to participate after the Closing Date. Continuing Employees and their eligible dependents will receive credit for any co-payments, deductibles and maximum out-of-pocket requirements (or similar payments) made under the Employee Plans for the year of the Closing under any medical, dental or vision plans of Sungy or a subsidiary for the purposes of satisfying any applicable deductible, out-of-pocket, maximum out-of-pocket requirements or similar requirements in the year in which the Closing occurs.
(b) Sungy agrees to reserve an aggregate of 3,074,033 Purchaser Shares for the purpose of grants of restricted shares to employees and contractors of the Company.
(c) Nothing in Section 6.06(a) or Section 6.06(b) of this Agreement shall (i) create any third-party beneficiary rights in any employee or former employee (including any beneficiary or dependent thereof) or service provider or former service provider (including any beneficiary or dependent thereof) of the Company in any respect, including in respect of continued employment (or resumed employment), or create any legal or equitable rights in any such persons in respect of any such Sections or any benefits that may be provided, directly or indirectly, under any Employee Plan or any employee or service provider program or arrangement of Sungy any of its subsidiaries, or (ii) constitute or be construed to constitute an amendment to any of the compensation or benefit plans maintained for or provided to employees or other persons prior to or following the Closing. Nothing in this Agreement shall constitute a limitation on the rights to amend, modify or terminate any such plans or arrangements of Sungy or any of its subsidiaries.
(d) Other than the Company Employees, to the Knowledge of the Company and Seller, no person will be employed by the Company and no person’s employment or contract of employment will transfer to the Company or to a Purchaser Party or any Purchaser Party Affiliate on Closing or in connection with the transactions contemplated by this Agreement, whether pursuant to the Transfer Regulations or otherwise.
(e) If, as a consequence of the transactions contemplated by this Agreement the contract of employment of any person who is not a Company Employee is transferred to a Purchaser Party or any of their Affiliates by the Transfer Regulations or otherwise by operation of law (or Liabilities in respect of any such person’s employment are transferred to a Purchaser Party or any Purchaser Party Affiliate) or it is alleged that this is the case, Seller shall indemnify the Purchaser Parties (for themselves and on behalf of their Affiliates) and keep the Purchaser Parties indemnified from and against all Losses which they suffer or incur in connection with or as a result of such transfer or alleged transfer howsoever and whenever arising relating to:
(i) the contract of employment of any such person or its termination; and
(ii) any duty or Liability of a Purchaser Party or a Purchaser Party Affiliate to any such person or that person’s representative(s).
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(f) The parties agree that any Losses incurred by an Affiliate of the Purchaser Parties shall be deemed to be Losses incurred by the Purchaser Parties for the purposes of the indemnities in Section 6.06(e) and shall be recoverable by the Purchaser Parties as such, provided, however, that Seller’s obligations for an Indemnity Loss relating to Section 6.06(e) shall be subject to the limitation set forth in Section 7.08(b).
ARTICLE VII.
(a) any breach of any of the representations and warranties of Seller in this Agreement;
(b) any breach or nonfulfillment of any of the covenants, obligations or agreements of Seller in this Agreement;
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(c) any Company Employee voluntarily terminating such employee’s employment with the Company, other than for good reason, prior to the first anniversary of the Closing Date;
(d) any operating expenses of the Company during the calendar month of January 2014, including, but not limited to, the compensation of any employee or contractor of the Company for work or services performed during such period; and
(e) the termination of any person who was an employee or contractor of the Company prior to the Closing who is not a Company Employee.
For the purposes of any Indemnity Loss pursuant to Section 7.01(c), such Indemnity Loss shall be conclusively deemed to be, in the case of Xxxxx Xxxx, Chief Executive Officer of the Company, $250,000, in the case of Xxxxxx Xxxxxx, $200,000, in the case of Xxxxxxx Xxxxx Xxxxx, $150,000, in the case of Xxxxx X. Xxx or Xxxxxxx X. Xxxxxx, $100,000, and, in the case of each other Company Employee, $25,000.
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Section 7.08 Limitations on Indemnity.
(a) Deductible on Seller’s and Purchaser’s Obligations. Subject to the terms and conditions of this ARTICLE VII, Seller will not have any obligation for any Indemnity Loss under Section 7.01(a) other than with respect to any breach of a Special Representation, arising under ARTICLE VIII, or arising from fraud, willful misconduct, or intentional misrepresentation by or on the part of Seller, and Purchaser will not have any obligation for any Indemnity Loss under Section 7.02, unless and until the aggregate amount of all Indemnity Losses for which such Indemnifying Party is obligated hereunder exceeds $100,000 (the “Indemnification Basket”). After the Indemnification Basket is exceeded, the Indemnified Parties shall thereafter be entitled to be paid the amount of all Indemnity Losses, subject to the limitations on recovery and recourse set forth herein.
(b) Cap on Seller’s and Purchaser’s Obligations. Subject to the terms and conditions of this ARTICLE VII, Seller’s obligations for an Indemnity Loss, in the aggregate, will not exceed the Escrow Amount. Subject to the terms and conditions of this ARTICLE VII, Purchaser’s obligations for an Indemnity Loss, in the aggregate, will not exceed the Escrow Amount, except with respect to Purchaser’s obligations relating to the Additional Payments as provided in this Agreement.
(c) Sole and Exclusive Remedies. The right to indemnification under this ARTICLE VII, subject to all of the terms, conditions and limitations hereof, shall constitute the sole and exclusive right and remedy available to any party hereto for any actual or threatened breach of this Agreement, and none of the parties hereto shall initiate or maintain any legal action at law or in equity against any other party hereto which is directly or indirectly related to any breach or threatened breach of this Agreement, except that any party may pursue legal or equitable relief against any other party for any claim for fraud or intentional misrepresentation.
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(a) On the first Business Day following the second anniversary of the Closing Date, Purchaser and Seller shall cause the Escrow Agent to release the then existing amounts in the Escrow Account to Seller, less the amount of claims for indemnification which have been paid or have been asserted by the Purchaser Indemnified Parties but not paid. Any unreleased amount shall be retained by the Escrow Agent. The amounts in the Escrow Account so retained shall be released by the Escrow Agent upon the resolution of such claims, to the extent not utilized to pay the Purchaser Indemnified Parties for any such claims resolved in favor of a Purchaser Indemnified Party, in accordance with the resolution of such claims.
(b) As provided in Section 7.06, amounts in the Escrow Account shall be available to Purchaser Indemnified Parties to satisfy their claims against Seller for indemnification hereunder.
ARTICLE VIII.
Section 8.01 Tax Indemnification.
(a) From and after the Closing, Seller will indemnify and hold harmless the Purchaser Indemnified Parties from and against any Indemnity Loss actually incurred by any such Purchaser Indemnified Party as a result of:
(i) any breach of any representation or warranty of the Company or Seller set forth in Section 4.08;
(ii) any Taxes in respect of the Sold IP or any Taxes of the Company with respect to (A) any Tax period ending on or before the Closing Date (a “Pre-Closing Tax Period”); or (B) any Tax period beginning before and ending after the Closing Date (a “Straddle Period”) to the extent such Taxes are allocable in accordance with Section 8.01(c) to the portion of such period beginning before and ending on the Closing Date (the “Seller’s Portion”); and
(iii) any Taxes imposed on the Company under Treasury Regulations Section 1502-6 (and all corresponding provisions of state, local or foreign Law) as a result of being a member of any federal, state, local or foreign consolidated, unitary, combined or similar group before the Closing Date.
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(b) Survival. The indemnification rights of the Purchaser Indemnified Parties pursuant to Section 8.01(a) shall survive until the date that is the one year anniversary of the Closing Date (the “Tax Indemnity Termination Date”). The representations and warranties contained in Section 4.08 shall survive until the Tax Indemnity Termination Date. Any claim for indemnity under Section 8.01(a) shall be deemed time-barred, and no such claim shall be made after the period specified in the immediately preceding sentence; provided, however, that in the event a Purchaser Indemnified Party has incurred a Loss or received written notice from a third party of a third party claim for which such Purchaser Indemnified Party is entitled to indemnification under Section 8.01(a) and such Purchaser Indemnified Party provides written notice of a claim for indemnification under Section 8.01(a) to the Indemnifying Party in good faith and in accordance with the requirements of Section 7.03 before the expiration of the applicable survival period and includes copies of all material written evidence upon which such claim is based, then the indemnification rights pursuant to Section 8.01(a) that would otherwise terminate as set forth above shall survive as to such claim until such time as such claim is fully and finally resolved.
(c) Straddle Period Allocation. In order to apportion appropriately any Taxes relating to a Straddle Period, the parties hereto shall, to the extent permitted or required under applicable Law, treat the Closing Date as the last day of the taxable year or period of the Company for all Tax purposes. In any case where applicable Law does not permit the Company to treat the Closing Date as the last day of the taxable year or period:
(i) the amount of any income Taxes, premium Taxes, gross receipts Taxes, sales or use Taxes or withholding or employment Taxes for Seller’s Portion of the Straddle Period shall be determined based on an interim closing of the books as of the close of business on the Closing Date (and for such purpose, the taxable period of any partnership or other pass-through entity in which any the Company holds a beneficial interest shall be deemed to terminate at such time); and
(ii) the amount of other Taxes of the Company for Seller’s Portion of the Straddle Period shall be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the taxable period ending on the day before the Closing Date, and the denominator of which is the number of days in such Straddle Period.
(f) The indemnification obligations set forth in this Section 8.01 shall not exceed the Escrow Amount.
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Section 8.02 Preparation and Filing of Tax Returns and Payment of Taxes.
(a) Seller shall prepare or cause to be prepared and shall timely file or cause to be timely filed all required Tax Returns relating to the Company with respect to any Pre-Closing Tax Period, provided, that such Tax Returns shall be prepared and all elections with respect to such Tax Returns shall be made, to the extent permitted by Law, in a manner consistent with past practice. No later than thirty (30) days prior to filing any such Tax Return (including any extension thereof), Seller shall submit such Tax Return to the Purchaser for its review, comment, and consent. Seller shall make any revisions as are reasonably requested by Purchaser. Seller shall timely pay or cause to be paid any Taxes shown to be due on any such Tax Returns. If any Tax Returns required to be filed by Seller under this Section 8.02 are due after the Closing Date, and Seller is not authorized by Law to file such Tax Returns, Seller shall submit such Tax Returns to Purchaser at least three (3) days prior to the due date for such Tax Return, and Purchaser shall file such Tax Returns with the appropriate Governmental Entity.
(b) Purchaser shall prepare or cause to be prepared and shall timely file or cause to be timely filed all other required Tax Returns relating to the Company that are due after the Closing Date (including Tax Returns with respect to any Straddle Period) provided, that for Tax Returns with respect to any Straddle Period, such Tax Returns shall be prepared and all elections with respect to such Tax Returns shall be made, to the extent permitted by Law, in a manner consistent with past practice. Purchaser shall timely pay or cause to be paid any Taxes shown to be due thereon subject to Purchaser’s right to indemnification pursuant to Section 8.01 hereof.
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(a) Seller or Seller’s Representative shall have the sole right to represent the interests of the Company, and the right to employ counsel of its choice at its expense and to make decisions with respect to negotiation, contest or settlements in any Tax Claim relating to Pre-Closing Tax Period Tax Returns; provided that (i) Seller acknowledges and agrees in writing that the indemnification provisions of this ARTICLE VIII apply to the Pre-Closing Tax Period Taxes in dispute, (ii) Seller shall keep Purchaser advised as to the current status and progress of such settlement or defense, and (iii) Seller shall not, without the prior written consent of Purchaser (which shall not be unreasonably withheld or delayed), settle or compromise any such Tax Claim if any such settlement or compromise could affect any tax period other than a Pre-Closing Tax Period; and
(b) Purchaser and Seller or, if Seller is no longer in existence, the Seller Representative shall jointly represent the interests of the Company, and shall jointly employ mutually agreed counsel (with expenses divided in the proportions that the Seller’s Portion and the Purchaser’s Portion are of the relevant Straddle Period Tax) and shall jointly make decisions with respect to negotiation, contest or settlements in any Tax Claim related to a Straddle Period Tax Return.
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ARTICLE IX.
ARTICLE X.
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Section 10.04 Seller Representative.
(a) The Seller hereby constitutes and appoints Xxxxxx Xxxxx as its representative and its true and lawful attorney-in-fact, with full power and authority in its name and on its behalf:
(i) to act on Seller’s behalf in the absolute discretion of the Seller Representative with respect to all matters relating to this Agreement, including, without limitation, execution and delivery of any amendment, supplement, or modification of this Agreement, any waiver of any claim or right arising out of this Agreement and any claims for indemnification pursuant to ARTICLE VII and ARTICLE VIII; and
(ii) in general, to do all things and to perform all acts, including executing and delivering all agreements, certificates, receipts, instructions and other instruments contemplated by or deemed advisable to effectuate the provisions of this Agreement.
This appointment and grant of power and authority is coupled with an interest and is in consideration of the mutual covenants made herein and is irrevocable and shall not be terminated by any act of Seller or by operation of law or by the occurrence of any other event. Seller hereby consents to the taking of any and all actions and the making of any decisions required or permitted to be taken or made by the Seller Representative pursuant to this Section 10.04. Seller agrees that the Seller Representative shall have no obligation or Liability to any Person for any action or omission to be taken or omitted by the Seller Representative in good faith hereunder, and Seller shall indemnify and hold the Seller Representative harmless from and against any and all loss, damage, expense or liability (including reasonable counsel fees and expenses) which the Seller Representative may sustain as a result of any such action or omission by the Seller Representative hereunder.
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(b) The Purchaser Parties shall be entitled to rely upon any document or other paper delivered by the Seller Representative as being authorized by Seller, and the Purchaser Parties shall not be liable to Seller or any of its Affiliates or its stockholders for any action taken or omitted to be taken by the Purchaser Parties based on such reliance. Seller agrees that the Purchaser Parties shall be entitled to rely on any agreement, settlement, notice, waiver, decision, act, consent or instruction of the Seller Representative, including an amendment, extension or waiver of this Agreement, and each action shall constitute a decision of Seller and shall be final, binding and conclusive upon Seller as if Seller had taken such action.
(c) With respect to Sections 2.04, 7.03, 7.04, 7.05, 7.06, 7.09, 8.04, 8.05 and 10.01 of this Agreement, any reference to Seller, or to any act to be taken by Seller or to any right of Seller being exercised, in each case after the Closing, shall, in the event that Seller is dissolved, be construed as a reference to the Seller Representative, or that act being taken or that right being exercised by the Seller Representative, as the case may be.
(d) In the event that the Seller Representative resigns, is replaced or otherwise ceases to act as liquidator, administrator or similar officeholder in connection with the liquidation, administration or any other analogous process with respect to Seller, Seller shall appoint such successor liquidator, administrator or similar officeholder as the successor Seller Representative under this Agreement.
If to Seller: | GetJar Networks Limited c/o Bird and Bird LLP 00 Xxxxxx Xxxx Xxxxxx XX00 0XX Attention: Xxxxx Xxxxxxx Facsimile: x00 00 0000 0000 E-mail: xxxxx.xxxxxxx@xxxxxxxx.xxx |
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With a copy to: | Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, PC 000 Xxxx Xxxx Xxxx Xxxx Xxxx, XX 00000 Attention: Xxxx X. Xxxxxx and Xxxxxx Xxxxxxxxxxxx Facsimile: (000) 000.0000 E-mail: xxxxxxx@xxxx.xxx | |
With a copy to: | Bird & Bird LLP 00 Xxxxxx Xxxx Xxxxxx XX0X 0XX Xxxxxx Xxxxxxx Attention: Xxxxx Xxxxxxx Facsimile: x00 00 0000 0000 E-mail: xxxxx.xxxxxxx@xxxxxxxx.xxx | |
If to the Seller Representative: | Xxxxxx Xxxxx 000 Xxxxxxxx Xx Xxx Xxxxxxxxx XX 00000 Facsimile: 000-000-0000 E-mail: Xxxxxx.Xxxxx@xxxxx.xxx | |
With a copy to: | Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, PC 000 Xxxx Xxxx Xxxx Xxxx Xxxx, XX 00000 Attention: Xxxx X. Xxxxxx and Xxxxxx Xxxxxxxxxxxx Facsimile: (000) 000.0000 E-mail: xxxxxxx@xxxx.xxx | |
With a copy to: | Bird & Bird LLP 00 Xxxxxx Xxxx Xxxxxx XX0X 0XX Xxxxxx Xxxxxxx Attention: Xxxxx Xxxxxxx Facsimile: x00 00 0000 0000 E-mail: xxxxx.xxxxxxx@xxxxxxxx.xxx | |
If to the Purchaser Parties: | Sungy Mobile Xxxxxxx Xxxxx 00, Xxxxx X, Xxxxx International Center Xx. 00 Xxxxxxxxx 0xx Xxxx, Xxxxxx Xxxxxxxx Xxxxxxxxx 000000 People’s Republic of China Attention: Xxxxxxx Xxxx Facsimile: x00-00-00000000 E-mail: xxxxxxxxxxx@xxxxxxxxxxx.xxx |
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With a copy to: | Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxxxxx, XX 00000 U.S.A. Attention: Xxxxxxx Xxxxxx Facsimile: (000) 000-0000 E-mail: Xxxxxxx.Xxxxxx@xxxxxxx.xxx |
Any party may change its address or other contact information for notice by giving notice to each other party in accordance with the terms of this Section 10.05. In no event will delivery to a copied Person alone constitute delivery to the party represented by such copied Person.
(a) The parties have participated jointly in the negotiation and drafting of this Agreement and, in the event of an ambiguity or a question of intent or a need for interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
(b) The term “Agreement” means this agreement together with all Schedules, Annexes and Exhibits hereto, as the same may from time to time be amended, modified, supplemented or restated in accordance with the terms hereof. Unless the context otherwise requires, words importing the singular shall include the plural, and vice versa. The use in this Agreement of the term “including” means “including, without limitation.” The words “herein,” “hereof,” “hereunder,” “hereby,” “hereto,” “hereinafter,” and other words of similar import refer to this Agreement as a whole, including the Schedules, Annexes and Exhibits, as the same may from time to time be amended, modified, supplemented or restated, and not to any particular article, section, subsection, paragraph, subparagraph or clause contained in this Agreement. All references to articles, sections, subsections, clauses, paragraphs, schedules and exhibits mean such provisions of this Agreement and the Schedules, Annexes and Exhibits attached to this Agreement, except where otherwise stated. The use herein of the masculine, feminine or neuter forms shall also denote the other forms, as in each case the context may require. The use in this Agreement of the terms “furnished,” “provided,” “delivered,” “made available” and similar terms refers, with respect to the provision of information and documents to the Purchaser Parties, in addition to the physical delivery of such information or documents to the Purchaser Parties, to such information and/or documents as are made available by Seller or any of its consultants, advisors or attorneys.
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Section 10.13 Governing Law; Dispute Resolution; Arbitration.
(a) Applicable Law. The Laws of the State of New York shall govern the creation, interpretation, construction and enforcement of and the performance under this Agreement and all transactions and agreements contemplated by any of them, as well as any and all claims arising out of or relating in any way to this Agreement, notwithstanding the choice of law rules of any other state or jurisdiction.
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(c) Arbitration. Any Proceeding arising out of, in connection with or relating to this Agreement, including the interpretation, validity, invalidity, breach or termination thereof, shall be finally settled and resolved by binding arbitration. The arbitration shall be conducted in Hong Kong under the Hong Kong International Arbitration Centre Administered Arbitration Rules in force when the notice of arbitration is submitted in accordance with the said Rules. The place or situs of arbitration shall be Hong Kong, the number of arbitrators shall be three and arbitration proceedings shall be conducted in English. Any award rendered by the arbitral tribunal shall be final, conclusive and binding upon the parties hereto. To the extent permitted by law, the parties hereto irrevocably waive any right to any form of appeal, review or recourse of any rendered award to any state or other judicial authority. Judgment upon any award rendered may be entered in any court having jurisdiction.
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[Signature Pages Follow]
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SUNGY: | ||
SUNGY MOBILE LIMITED | ||
By: | /s/ Xxxxxxx Xxxx | |
Name: Xxxxxxx Xxxx | ||
Title: Chief Executive Officer | ||
PURCHASER: | ||
SUNGY TECHNOLOGY CORPORATION | ||
By: | /s/ Xxxxxxx Xxxx | |
Name: Xxxxxxx Xxxx | ||
Title: Chief Executive Officer | ||
IP PURCHASER: | ||
SUNGY TECHNOLOGY LIMITED | ||
By: | /s/ Xxxxxxx Xxxx | |
Name: Xxxxxxx Xxxx | ||
Title: Chief Executive Officer |
[Signature Page to Purchase Agreement]
SELLER: | ||
GETJAR NETWORKS LIMITED | ||
By: | /s/ Getjar Networks Limited | |
Name: | ||
Title: Director | ||
SELLER REPRESENTATIVE: | ||
XXXXXX XXXXX | ||
By: | /s/ Xxxxxx Xxxxx |
[Signature Page to Purchase Agreement]
Schedule 1
Sold IP
• | API Front-door |
• | Manages SDK integrations that perform server-to-server voucher requests. |
• | Ad Server |
• | Serves ads real-time. |
• | Auth |
• | Handles user and SDK application authorization and authentication. |
• | Catalog |
• | Manages defines for products, apps. |
• | Device Management Service |
• | Aids device compatibility. |
• | ERS |
• | Used to do ad attribution. |
• | Id |
• | Generates globally unique ids used by a majority of services storing data. |
• | Image |
• | Generates cacheable images of any size for ads/apps served. |
• | Localization |
• | Services data to aid in localized prices, strings shown to users. |
• | Location |
• | Maps IP addresses into physical locations. |
• | Product |
• | Generates ads, purchased products and deals shown to user. It coordinates data from the ad server, catalog service and ranking service. |
• | Ranking |
• | Looks at users apps and set of available ads and personalizes the ad result. |
• | SDKHost |
• | Manages information on hosts integrating the GetJar SDK. |
• | Search |
• | Handles the browsing/real-time serving/searching of categories and apps |
• | Transaction |
• | Real-time processing of earn, purchase, voucher requests from consumers |
• | Usage |
• | Handles the reception and initial filtering of user application and phone usage information. |
• | User |
• | Stores definitions about consumers including the device information and apps. |
• | Wallet |
• | Stores Users’ GetJar Gold balances and Gold reservations for managed currencies. |
• | Admin |
• | Internal tool to manage users, apps, SDKs, etc. |
• | DevZone |
• | Legacy system allowing ad management |
• | Front-end |
• | Manages the display for offer walls, GetJar Rewards app and interstitial ads |
• | Portal |
• | New system used to perform self-service ad management and SDK integration. |
Schedule 2
Revenue Earnout Target
Achievement of the Revenue Earnout Target requires meeting the following goal:
Prior to the first anniversary of the Closing Date, the Company shall have developed a mobile advertising platform for Sungy and the earn-out revenues of Sungy’s Mobile application products and services as reported in Sungy’s Quarterly Reports (“Earn-out Revenues”) shall be at least $13.5 million in Sungy’s fiscal quarter ending December 31, 2014. In the event that the Earn-out Revenues information is not specified in Sungy’s Quarterly Reports, it shall be determined based upon Sungy’s internal accounting records.
(a) | The following shall be included in Earn-out Revenues: |
(i) | Revenues from paid downloads and in-app purchases, excluding revenues generated from paid downloads and in-app purchases through distribution channels in China, transaction fees and relevant taxes; |
(ii) | Revenues from direct advertising customers, excluding direct advertising revenues sourced from China, transaction fees and relevant taxes; |
(iii) | Revenues from GetJar incentive advertising used by Sungy applications; and |
(iv) | Revenues from advertising spaces on Sungy applications that had been used by other advertising networks prior to the Closing Date and have been used by the GetJar advertising platform after the Closing Date, excluding the aggregated revenues from these advertising spaces in the three calendar months immediately prior to the change of advertising networks to the GetJar advertising platform. |
(b) | Earn-out Revenues shall be reduced by: |
(i) | If costs and expenses have been incurred in order to attract new users for Sungy applications, the smaller of (A) the revenue from such new users of Sungy applications or (B) the promotional costs associated with such new users. |
(c) | For games developed by third parties or by Sungy and published as Sungy applications, (1) in-app purchase revenue is excluded from the Earn-out Revenue, and (2) any ads delivered by the GetJar advertising platform through Sungy applications for such games will increase the Earn-out Revenue by the average cost per install price in each country multiplied by the number of installs delivered in each country. A game delivered is counted as an “install” when a user downloads the game software binary and launches the game. |
(d) | Earn-out Revenues shall not include any other form of revenues not specified herein. |
(e) | Earn-out Revenues shall otherwise be determined in accordance with GAAP. |
Schedule 6.05
Employee Incentive Shares