Exhibit 2.1
STOCK SALE AGREEMENT
BY AND AMONG
INFOSPACE, INC.,
GO2NET, INC.
XXXXXXXXX.XXX CORPORATION
AND
LIGHTBRIDGE, INC.
DATED AS OF
FEBRUARY 29, 2004
TABLE OF CONTENTS
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ARTICLE 1. PURCHASE AND SALE OF SHARES......................................................... 1
Section 1.1. Sale and Transfer of Shares......................................... 1
Section 1.2. The Purchase Price.................................................. 1
ARTICLE 2. THE CLOSING......................................................................... 1
Section 2.1. The Closing......................................................... 1
Section 2.2. Deliveries by Sellers............................................... 2
Section 2.3. Deliveries by Purchaser............................................. 2
Section 2.4. Post-Closing Working Capital Adjustment............................. 2
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SELLERS........................................... 4
Section 3.1. Organization........................................................ 4
Section 3.2. Authorization....................................................... 4
Section 3.3. Execution; Validity of Agreement.................................... 5
Section 3.4. Consents and Approvals; No Violations............................... 5
Section 3.5. Ownership and Possession of Shares.................................. 5
Section 3.6. Capitalization...................................................... 5
Section 3.7. Organization; Qualification of Company.............................. 6
Section 3.8. Subsidiaries........................................................ 6
Section 3.9. Financial Statements................................................ 7
Section 3.10. No Undisclosed Liabilities.......................................... 8
Section 3.11. Absence of Certain Changes.......................................... 8
Section 3.12. Title to Properties; Encumbrances................................... 9
Section 3.13. Real Property....................................................... 9
Section 3.14. Leases.............................................................. 9
Section 3.15. Contracts and Commitments........................................... 10
Section 3.16. Casualties.......................................................... 11
Section 3.17. Litigation.......................................................... 12
Section 3.18. Compliance with Laws, etc........................................... 12
Section 3.19. Employee Benefit Plans.............................................. 13
Section 3.20. Tax Matters......................................................... 14
Section 3.21. Intellectual Property............................................... 15
Section 3.22. Labor Matters....................................................... 17
Section 3.23. Assets Necessary to the Purchased Business.......................... 18
Section 3.24. Customers and Distributors.......................................... 18
Section 3.25. Environmental Compliance............................................ 18
Section 3.26. Certain Transactions................................................ 19
Section 3.27. Brokers or Finders.................................................. 19
Section 3.28. Disclosure.......................................................... 19
Section 3.29. No Other Representations............................................ 19
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER......................................... 19
Section 4.1. Organization........................................................ 19
Section 4.2. Authorization; Validity of Agreement................................ 20
Section 4.3. Consents and Approvals; No Violations............................... 20
Section 4.4. Acquisition of Shares for Investment; Ability to Evaluate and Bear
Risk ............................................................. 20
Section 4.5. Availability of Funds............................................... 21
Section 4.6. Litigation.......................................................... 21
Section 4.7. Brokers or Finders.................................................. 21
ARTICLE 5. COVENANTS AND ADDITIONAL AGREEMENTS................................................. 21
Section 5.1. Interim Operations of the Company................................... 21
Section 5.2. Access.............................................................. 23
Section 5.3. Confidential Information............................................ 23
Section 5.4. Efforts and Actions to Cause Closing to Occur....................... 24
Section 5.5. No Solicitation..................................................... 26
Section 5.6. Tax Matters......................................................... 27
Section 5.7. Employees; Employee Benefits........................................ 31
Section 5.8. Employment Offers................................................... 32
Section 5.9. [Intentionally Omitted]............................................. 32
Section 5.10. Notice of Developments.............................................. 32
Section 5.11. Maintenance of Books and Records.................................... 33
Section 5.12. Sellers' Assets..................................................... 33
Section 5.13. Intercompany Arrangements........................................... 33
Section 5.14. Publicity........................................................... 34
Section 5.15. Further Assurances; Post-Closing Litigation Support................. 34
Section 5.16. Post Closing Settlements............................................ 35
Section 5.17. Update of Seller Disclosure Schedule................................ 35
Section 5.18. Noncompetition; Non-Solicitation.................................... 35
Section 5.19. Transition Services................................................. 36
Section 5.20. Audited Financial Statements........................................ 36
Section 5.21. Ancillary Agreements................................................ 37
ARTICLE 6. CONDITIONS.......................................................................... 38
Section 6.1. Conditions to Each Party's Obligation to Effect the Closing......... 38
Section 6.2. Conditions to Obligations of Purchaser to Effect the Closing........ 38
Section 6.3. Conditions to Obligations of Sellers to Effect the Closing.......... 39
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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ARTICLE 7. TERMINATION......................................................................... 40
Section 7.1. Termination......................................................... 40
Section 7.2. Notice of Termination; Effect of Termination........................ 41
ARTICLE 8. REMEDIES............................................................................ 42
Section 8.1. Survival of Representations......................................... 42
Section 8.2. Indemnification by Parent........................................... 42
Section 8.3. Indemnification by Purchaser........................................ 43
Section 8.4. Procedure for Claims between Parties................................ 43
Section 8.5. Defense of Third Party Claims....................................... 44
Section 8.6. Limitations......................................................... 44
Section 8.7. No Duplication; Exclusive Remedy.................................... 46
Section 8.8. No Additional Representations or Warranties......................... 46
Section 8.9. Tax Claims.......................................................... 46
Section 8.10. Tax Effect of Indemnification Payments.............................. 47
ARTICLE 9. DEFINITIONS AND INTERPRETATION...................................................... 48
Section 9.1. Definitions......................................................... 48
Section 9.2. Interpretation...................................................... 52
ARTICLE 10. MISCELLANEOUS...................................................................... 53
Section 10.1. Fees and Expenses................................................... 53
Section 10.2. Amendment and Modification.......................................... 53
Section 10.3. Notices............................................................. 53
Section 10.4. Counterparts........................................................ 54
Section 10.5. Entire Agreement; No Third Party Beneficiaries...................... 54
Section 10.6. Severability........................................................ 54
Section 10.7. Governing Law; Waiver of Jury Trial................................. 55
Section 10.8. Dispute Resolution.................................................. 55
Section 10.9. Time of Essence..................................................... 56
Section 10.10. Extension; Waiver................................................... 56
Section 10.11. Assignment.......................................................... 56
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EXHIBITS AND SCHEDULES
Exhibit A Sublease Agreements
Exhibit B Excluded Claims
Exhibit C Litigation Matter
Exhibit D Form of Opinion of Counsel
Exhibit E Excluded Company Employees
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STOCK SALE AGREEMENT
This Stock Sale Agreement (the "AGREEMENT"), dated as of February 29, 2004 is
entered into by and among Lightbridge, Inc., a Delaware corporation
("PURCHASER"), InfoSpace, Inc., a Delaware corporation ("PARENT"), Go2Net, Inc.,
a Delaware corporation and wholly owned subsidiary of Parent ("GO2NET", and
together with Parent, "SELLERS"), and Xxxxxxxxx.xxx Corporation, a Delaware
corporation and wholly owned subsidiary of Go2Net (the "COMPANY"). Certain
capitalized terms used in this Agreement have the meanings assigned to them in
Article 9.
WHEREAS, Go2Net owns all the issued and outstanding Shares of the
Company; and WHEREAS, Sellers intend to sell, and Purchaser intends to purchase,
all the issued and outstanding Shares upon the terms and subject to the
conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing
and the mutual representations, warranties, covenants and agreements set forth
herein, intending to be legally bound hereby, the parties agree as follows:
ARTICLE 1.
PURCHASE AND SALE OF SHARES
SECTION 1.1. SALE AND TRANSFER OF SHARES.
Subject to the terms and conditions of this Agreement, at the Closing, Go2Net
shall sell, convey, assign, transfer and deliver to Purchaser, and Purchaser
shall purchase from Go2Net, all the issued and outstanding Shares, free and
clear of all Encumbrances, except for any Encumbrance arising under the
Securities Act or any applicable state securities laws.
SECTION 1.2. THE PURCHASE PRICE.
Subject to the terms and conditions of this Agreement, in consideration for the
aforesaid sale, conveyance, assignment, transfer and delivery to Purchaser of
the Shares at the Closing, Purchaser shall pay to Parent an amount of cash equal
to Eighty Two Million Dollars ($82,000,000) (the "BASIC PURCHASE PRICE") less
the amount, if any, by which the Closing Working Capital Amount, as determined
pursuant to Section 2.4 below, is less than $150,000, or plus the amount, if
any, by which the Closing Working Capital Amount, as determined pursuant to
Section 2.4 below, is greater than $150,000. The Basic Purchase Price, as
adjusted in accordance with the preceding sentence, is referred to herein as the
"PURCHASE PRICE."
ARTICLE 2.
THE CLOSING
SECTION 2.1. THE CLOSING.
The closing of the Transactions (the "CLOSING") shall take place at the offices
of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, One Market, Xxxxx
Xxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, at 10:00 a.m., local time,
two (2) business days following the satisfaction and/or waiver of all conditions
to effect the Closing set forth in Article 6 (other than conditions which can be
satisfied only by the delivery of certificates or other documents at the
Closing), unless another date or place is agreed in writing by each of the
parties hereto.
SECTION 2.2. DELIVERIES BY SELLERS.
At the Closing, Sellers shall deliver to Purchaser:
(a) one or more certificates representing all the issued and
outstanding Shares, each such certificate to be duly and validly endorsed in
favor of Purchaser or accompanied by a separate stock power duly and validly
executed by Go2Net and otherwise sufficient to vest in Purchaser good title to
such Shares;
(b) resignations of each director of the Company;
(c) all of the minute books and stock ledgers for the Company since
October 12, 2000 and any existing minute books and stock ledgers for the Company
Subsidiary, except to the extent any of the foregoing are in the Company's
possession at the Company's corporate headquarters;
(d) the Working Capital Certificate; and
(e) the other certificates, opinions, agreements and documents referred
to in Section 6.2.
From the date hereof and no later than ten (10) business days prior to Closing
unless otherwise agreed by Purchaser, Sellers shall deliver to Purchaser all
other previously undelivered documents required to be delivered by Sellers
pursuant hereto.
SECTION 2.3. DELIVERIES BY PURCHASER.
Simultaneously with the Closing, Purchaser shall:
(a) transfer the Purchase Price, as specified in the Working Capital
Certificate, to an account designated by Parent prior to the Closing by wire
transfer in immediately available funds;
(b) deliver to Sellers the compliance certificate referred to in
Section 6.3(d); and
(c) the other agreements and documents referred to in Section 6.2.
From the date hereof and no later than ten (10) business days prior to the
Closing unless otherwise agreed by Sellers, Purchaser shall deliver to Sellers
all other previously undelivered documents required to be delivered by Purchaser
pursuant hereto.
SECTION 2.4. POST-CLOSING WORKING CAPITAL ADJUSTMENT.
(a) At the Closing, Parent shall deliver to Purchaser a certificate,
executed by an executive officer of Parent on behalf of Parent (the "Working
Capital Certificate"), which shall set forth Parent's good faith estimates of
(i) the balance sheet of the Purchased Business as of the close of business on
the Closing Date (the "Closing Balance Sheet"), (ii) a statement of the Working
Capital of the Purchased Business reflected on the Closing Balance Sheet (the
"Closing Working Capital Amount") and (iii) a calculation of the Purchase Price
payable at the Closing
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pursuant to Section 1.2. The Closing Balance Sheet and the Closing Working
Capital Amount shall be prepared and determined in accordance with GAAP;
provided, however, that (x) the Closing Working Capital Amount shall be
calculated based on current assets less current liabilities as those terms are
defined under GAAP, except as otherwise specified in the definition of Working
Capital set forth in Article 9 and (y) the Closing Balance Sheet and the Closing
Working Capital Amount shall not reflect any change in the allowance for
doubtful accounts set forth in the Balance Sheet except (A) in accordance with
GAAP and consistent with past practices, (B) to the extent necessary to reflect
an actual change in the underlying credit risk or (C) to the extent necessary to
reflect any settlement or other resolution of the dispute identified in Section
2.4(a) of the Seller Disclosure Schedule. Parent will deliver to Purchaser a
draft of the Working Capital Certificate no less than five (5) business days
prior to the Closing Date, which draft shall set forth Parent's good faith
estimates of the Closing Balance Sheet, the Closing Working Capital Amount and
the Purchase Price.
(b) The Closing Balance Sheet, the Closing Working Capital Amount and
the Purchase Price included in the Working Capital Certificate shall be binding
and conclusive upon, and deemed accepted by, Purchaser unless Purchaser shall
have notified Parent within sixty (60) days following the Closing (the
"Objection Notice") that it disputes the accuracy of any of them. Until final
determination of the Closing Balance Sheet and the Closing Working Capital
Amount in accordance with this Section 2.4, Sellers will provide Purchaser and
its authorized representatives with access during normal business hours to all
books, records and personnel of Sellers to the extent related to the Company and
the Company Subsidiary as Purchaser may reasonably request in order to verify
the accuracy and completeness of the Closing Balance Sheet and the Closing
Working Capital Amount; provided that such access by Purchaser shall not unduly
interfere with the business or operations of Seller and shall not otherwise be
unduly burdensome to Seller. The Objection Notice shall specify in reasonable
detail (i) those items that Purchaser disputes, (ii) the amounts of any
adjustments to the Closing Balance Sheet, the Closing Working Capital Amount and
the Purchase Price that are necessary in its judgment to conform to the
requirements of this Agreement and (iii) Purchaser's reasons for such disputes
and adjustments. If Purchaser and Parent cannot agree on the final Closing
Balance Sheet, Closing Working Capital Amount and Purchase Price within twenty
(20) days after receipt by Purchaser of the Objection Notice, the parties shall
submit their final calculations of the items in dispute to a nationally
recognized accounting firm selected upon mutual agreement of Parent and
Purchaser, for resolution within thirty (30) days or as soon thereafter as
reasonably practicable. Such accounting firm shall review such final
calculations and make a selection as to which of the final calculations
presented to it is, in the aggregate, more accurate. The decision by such
accounting firm shall be final and binding on the parties. The costs and
expenses of such accounting firm shall be paid by the party whose proposed
calculation is not selected by such accounting firm. Purchaser and Parent shall
make available to such accounting firm all relevant books and records relating
to the calculations submitted and all other information reasonably requested by
such accounting firm.
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(c) If the Purchase Price, upon the final determination or acceptance
thereof in accordance with Section 2.4(b), is less than the amount of the
Purchase Price paid by Purchaser at Closing, then the difference shall be paid
by Parent to Purchaser within five (5) days after the date of such final
determination or acceptance. If the Purchase Price, upon the final determination
or acceptance thereof in accordance with Section 2.4(b), is greater than the
amount of the Purchase Price paid by Purchaser at Closing, then the difference
shall be paid by Purchaser to Parent within five (5) days after the date of such
final determination or acceptance. Any payment under this Section 2.4(c) shall
be made by wire transfer in immediately available funds in accordance with
wiring instructions furnished by the recipient of such payment at least two (2)
business days prior to the date of payment.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Except as set forth in the Seller Disclosure Schedule attached hereto (as may be
updated or amended prior to the Closing in accordance with Section 5.17) or as
otherwise contemplated by this Agreement, Sellers jointly and severally
represent and warrant to Purchaser that all of the statements contained in this
Article 3 are true and correct as of the date of this Agreement (or, if made as
of a specified date, as of such date). The Seller Disclosure Schedule shall be
arranged in numbered sections that correspond to the sections contained in this
Agreement. Disclosure in any section of the Seller Disclosure Schedule shall
qualify the representations and warranties in the corresponding sections of this
Agreement and the representations and warranties in any other section of this
Agreement to the extent such qualification is reasonably apparent upon the
reading of such disclosure. The inclusion of any information in any Section of
the Seller Disclosure Schedule shall not be deemed to be an admission or
evidence of the materiality of such item, nor shall it establish a standard of
materiality for any purpose whatsoever.
SECTION 3.1. ORGANIZATION
Each Seller is a corporation duly organized, validly existing and in good
standing under the laws of Delaware and has all requisite corporate power and
authority and all necessary governmental approvals to carry on its business as
now being conducted and to own the properties and assets it now owns, except
where the failure to have such governmental approvals would not have,
individually or in the aggregate, a material adverse effect on such Seller's
ability to consummate the Transactions.
SECTION 3.2. AUTHORIZATION
Each Seller and the Company has full corporate power and authority to execute
and deliver the Transaction Documents to which it is a party and to consummate
the Transactions. The execution, delivery and performance by each Seller and the
Company of the Transaction Documents to which each is a party and the
consummation of the Transactions have been duly authorized by the Board of
Directors of each Seller and the Company, and no other corporate action on the
part of either of the Sellers or the Company is necessary to authorize the
execution and delivery by Sellers and the Company of the Transaction Documents
to which each is a party or the consummation of the Transactions. No vote of, or
consent by, the holders of any class or series of stock issued by Parent is
necessary to authorize the execution and delivery by Parent of any of the
Transaction Documents to which it is a party or the consummation by it of the
Transactions.
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SECTION 3.3. EXECUTION; VALIDITY OF AGREEMENT
This Agreement has been, and each other Transaction Document to which either of
the Sellers or the Company is a party will be at the Closing, duly executed and
delivered by such Seller or the Company, as the case may be. Assuming due and
valid authorization, execution and delivery hereof by Purchaser, this Agreement
is, and each other Transaction Document to which either of the Sellers or the
Company is a party will be at the Closing, a valid and binding obligation of
such Seller or the Company, as the case may be, enforceable against such Seller
or the Company, as the case may be, in accordance with its terms except (a) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws of general application affecting
enforcement of creditors' rights generally and (b) the availability of the
remedy of specific performance or injunctive or other forms of equitable relief
may be subject to equitable defenses and would be subject to the discretion of
the court before which any proceeding therefor may be brought ((a) and (b)
together, the "ENFORCEABILITY LIMITATIONS").
SECTION 3.4. CONSENTS AND APPROVALS; NO VIOLATIONS
Except for the filings, permits, authorizations, consents and approvals as may
be required under, and other applicable requirements of, the Exchange Act, the
HSR Act and state securities or blue sky laws, none of the execution, delivery
or performance of the Transaction Documents by Sellers and the Company, the
consummation by Sellers and the Company of the Transactions or compliance by
Sellers and the Company with any of the provisions hereof will (a) conflict with
or result in any breach of any provision of the certificate of incorporation or
bylaws of either of the Sellers or the certificate of incorporation or bylaws of
the Company, each as amended to date, (b) require any material declaration or
filing with, or material permit, authorization, consent or approval of, any
Governmental Entity, or (c) result in any material violation or material breach
of, constitute a material default under, give rise to any right of termination
or acceleration (with or without notice or the lapse of time or both) pursuant
to, or otherwise require any notice to or consent from any Person under, any
term or provision of any Material Contract, excluding from the foregoing clause
(b) such declarations, filings, permits, authorizations, consents or approvals
which would not become applicable but for the business or activities in which
Purchaser is or proposes to be engaged or any acts (other than the execution,
delivery and performance of this Agreement and the operation of the Purchased
Business as currently conducted) or omissions by, or the status of any facts
pertaining to, Purchaser.
SECTION 3.5. OWNERSHIP AND POSSESSION OF SHARES
Go2Net is the record and beneficial owner of all the issued and outstanding
Shares. The certificates representing the Shares are held by Go2Net, free and
clear of all Encumbrances whatsoever, except for any Encumbrances created by
this Agreement and Encumbrances arising under the Securities Act or any
applicable state securities laws. The sale, conveyance, assignment, transfer and
delivery of the Shares to Purchaser pursuant to this Agreement will convey to
Purchaser good and marketable title to the Shares, free and clear of any and all
Encumbrances, except for any Encumbrances created by this Agreement and
Encumbrances arising under the Securities Act or any applicable state securities
laws.
SECTION 3.6. CAPITALIZATION
The authorized capital stock of the Company consists of 1,000 shares of
common stock, par value $0.01 per share. As of the date of this Agreement, (a)
1,000 Shares are issued and outstanding, (b) no Shares are owned, beneficially
or of record, by any Person other than Go2Net, and (c) no Shares are issued and
held in the treasury of the Company. All the outstanding Shares are duly
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authorized, validly issued, fully paid and non-assessable. Except as set forth
above, as of the date of this Agreement, (a) there are no shares of capital
stock of the Company authorized, issued or outstanding; (b) there are no
existing options, warrants, calls, preemptive rights, subscriptions or other
rights, agreements, arrangements or commitments of any character, relating to
the issued or unissued capital stock of the Company, obligating the Company to
issue, transfer, redeem, purchase or sell or cause to be issued, transferred,
redeemed, purchased or sold any shares of capital stock of the Company or to
otherwise make any payment in respect of any such shares; and (c) there are no
rights, agreements or arrangements of any character which provide for any stock
appreciation or similar right or grant any right to share in the equity, income,
revenues or cash flow of the Company.
SECTION 3.7. ORGANIZATION; QUALIFICATION OF COMPANY
(a) The Company (i) is a corporation duly organized, validly existing
and in good standing under the laws of Delaware; (ii) has all requisite
corporate power and authority and all necessary material government approvals to
carry on its business as it is now being conducted and to own the properties and
assets it now owns; and (iii) is duly qualified or licensed to do business as a
foreign corporation in good standing in every jurisdiction in which such
qualification is required; except where the failure to be so qualified or
licensed would not have, individually or in the aggregate, a Material Adverse
Effect.
(b) Section 3.7(b) of the Seller Disclosure Schedule sets forth, as of
the date hereof, a complete and correct list of all jurisdictions in which the
Company is qualified or licensed to do business. Sellers have heretofore
delivered or made available to Purchaser complete and correct copies of the
certificate of incorporation and bylaws of the Company and all amendments
thereto to the date hereof as presently in effect. Sellers have also delivered
or made available to Purchaser copies of the minute books of the Company, and
such records accurately reflect, in all material respects, all actions taken by
the shareholders, board of directors or committees of the board of directors of
the Company, whether at a meeting, by written consent or otherwise, since
October 12, 2000. To the Knowledge of Sellers, no action taken by the
shareholders, board of directors or any committees of the board of directors of
the Company prior to October 12, 2000 could create any material liability or
obligation of the Company or materially affect the operation of the Purchased
Business following the Closing.
SECTION 3.8. SUBSIDIARIES
(a) Section 3.8(a) of the Seller Disclosure Schedule sets forth the
only Subsidiary of the Company (the "COMPANY SUBSIDIARY"), and its jurisdiction
of organization. All outstanding ownership interests of the Company Subsidiary
are held, beneficially and of record, by the Company. The Company Subsidiary (i)
is a limited liability company duly organized, validly existing and in good
standing
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under the laws of its jurisdiction of incorporation; (ii) has all requisite
limited liability company power and authority and all necessary material
governmental approvals to carry on its business as now being conducted and to
own the properties and assets it now owns; and (iii) is duly qualified or
licensed to do business as a foreign entity in good standing in every
jurisdiction in which such qualification is required; except where the failure
to be so qualified or licensed would not have, individually or in the aggregate,
a Material Adverse Effect. Neither the Company nor the Company Subsidiary,
directly or indirectly, owns any material equity interest in any Person other
than the Company Subsidiary.
(b) Section 3.8(b) of the Seller Disclosure Schedule sets forth, as of
the date hereof, a complete and correct list of all jurisdictions in which the
Company Subsidiary is qualified or licensed to do business. Sellers have
heretofore delivered or made available to Purchaser complete and correct copies
of the certificate of formation and operating agreement of the Company
Subsidiary and all amendments thereto to the date hereof as presently in effect.
Sellers have also delivered or made available to Purchaser complete and correct
copies of the records of all actions of the managers and members and any
committee thereof of the Company Subsidiary, if any, and such records accurately
reflect, in all material respects, all such actions taken by such managers,
members or committee, whether at a meeting, by written consent or otherwise.
(c) The ownership interests of the Company Subsidiary owned by the
Company, directly or indirectly, are owned free and clear of any Encumbrances
whatsoever, except for Encumbrances created by this Agreement and Encumbrances
arising under the Securities Act or any applicable state securities laws, and
are non-assessable. There are no existing options, warrants, calls, preemptive
rights, subscriptions or other rights, agreements, arrangements or commitments
of any character, relating to the issued or unissued ownership interests of the
Company Subsidiary, obligating the Company Subsidiary to issue, transfer,
redeem, purchase or sell or cause to be issued, transferred, redeemed, purchased
or sold any additional ownership interests of the Company Subsidiary or to
otherwise make any payment in respect of any such ownership interests. There are
no rights, agreements or arrangements of any character which provide for any
membership interest appreciation or similar right or grant any right to share in
the equity, income, revenues or cash flow of the Company Subsidiary.
SECTION 3.9. FINANCIAL STATEMENTS
(a) True and complete copies of the Financial Statements are attached
to Section 3.9(a) of the Seller Disclosure Schedule. The Financial Statements
(i) have been prepared to reflect the consolidated operations of the Purchased
Business as a reportable segment under GAAP; (ii) were prepared as GAAP requires
for a reportable segment; (iii) are in accordance with and based upon the books
and records of the Sellers, the Company and the Company Subsidiary; and (iv)
fairly present in all material respects the consolidated financial condition and
assets and liabilities and the results of operations of the Purchased Business
as a reportable segment under GAAP as of the times and for the periods referred
to therein.
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(b) Each of (i) all significant deficiencies and material weaknesses in
the design or operation of Parent's internal control over financial reporting
which are reasonably likely to adversely affect Parent's ability to record,
process, summarize and report financial information and (ii) any fraud, whether
or not material, that involves management or other employees who have a
significant role in Parent's internal control over financial reporting, in each
case based on the most recent evaluation by Parent's chief executive officer and
chief financial officer, has been disclosed to Parent's auditors and the audit
committee of Parent's board of directors (or persons performing the equivalent
functions).
SECTION 3.10. NO UNDISCLOSED LIABILITIES
As of and since the Balance Sheet Date, neither the Company nor the Company
Subsidiary has incurred any liabilities, Indebtedness or obligations in an
amount greater than $50,000 in the aggregate except for (i) liabilities and
obligations incurred since the Balance Sheet Date in the ordinary and usual
course of business consistent with past practice, (ii) as reflected or reserved
against on the Balance Sheet, or (iii) liabilities and obligations incurred in
connection with the Transactions which are being paid by Sellers.
SECTION 3.11. ABSENCE OF CERTAIN CHANGES
During the period from the Balance Sheet Date through the date hereof, except as
otherwise contemplated by this Agreement, the Purchased Business has been
conducted only in the ordinary course of business, consistent with past
practice, and:
(a) the Purchased Business has not experienced a Material Adverse
Effect;
(b) neither the Company nor the Company Subsidiary has made any change
in its accounting methods, principles or practices;
(c) the Company has not declared, paid or set aside for payment any
dividend or other distribution in respect of its capital stock or redeemed,
purchased or otherwise acquired, directly or indirectly, any shares of capital
stock or other securities of the Company;
(d) neither the Company nor the Company Subsidiary has, except in the
ordinary course of business consistent with past practice, made any sale,
disposal or transfer of any assets having value of greater than $25,000 in the
aggregate;
(e) neither the Company nor the Company Subsidiary has made any loans
or advances to, or guarantees for the benefit of, any Person, except for
advances made to Company Employees in the ordinary course of business or
intercompany advances or loans to Sellers or their Affiliates;
(f) neither the Company nor the Company Subsidiary has, except in the
ordinary course of business consistent with past practice, amended or waived any
material right under, or terminated, any Material Contract;
(g) neither the Company nor the Company Subsidiary has incurred any
capital expenditures exceeding $25,000 in the aggregate;
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(h) none of the Company, the Company Subsidiary or Sellers has made any
change in the compensation payable or to become payable (including bonuses) to
any of the Company Employees (other than normal recurring increases in the
ordinary course of business consistent with past practice or pursuant to plans,
programs or agreements existing on the date hereof and disclosed on Section
3.11(h) of the Seller Disclosure Schedule), including the establishment or
adoption of any employee benefit plan, except those adopted by Parent on a
company-wide basis;
(i) neither the Company nor the Company Subsidiary has agreed to pay
any bonuses or other compensation to any Company Employee as a result of the
Transactions; and
(j) neither the Company nor the Company Subsidiary has entered into any
agreement, contract, commitment or arrangement to do any of the foregoing.
SECTION 3.12. TITLE TO PROPERTIES; ENCUMBRANCES
Except for property sold in the ordinary and usual course of business,
the Company and/or the Company Subsidiary have good, valid and marketable title
to all properties and assets reflected on the Balance Sheet and not shown as
leased, in each case free and clear of Encumbrances other than Permitted
Encumbrances. Each of the Company and the Company Subsidiary have a valid right
to use all of its tangible property held under lease, license or other Contract.
Sellers and their Affiliates have good valid and marketable title to all of the
tangible assets to be transferred to the Company pursuant to Section 5.4(d),
free and clear of Encumbrances other than Permitted Encumbrances.
SECTION 3.13. REAL PROPERTY
Neither the Company nor the Company Subsidiary owns any real property.
SECTION 3.14. LEASES
(a) Section 3.14(a) of the Seller Disclosure Schedule sets forth a list
of the real property leases held by the Company or the Company Subsidiary for
facilities that are not currently used by Parent or an Affiliate of Parent in
any other capacity.
(b) Section 3.14(b) of the Seller Disclosure Schedule sets forth a list
of the real property leases held by the Company or the Company Subsidiary that
are also used by Parent or an Affiliate of Parent.
(c) Section 3.14(c) of the Seller Disclosure Schedule sets forth a list
of the real property leases held by Parent or an Affiliate of Parent for
facilities that are used in the Purchased Business.
(d) Section 3.14(d) of the Seller Disclosure Schedule sets forth a list
of the leases held by the Company or the Company Subsidiary for personal
property having an original value in excess of $25,000.
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(e) Section 3.14(e) of the Seller Disclosure Schedule sets forth a list
of the leases held by Parent or an Affiliate of Parent for personal property
having an original value in excess of $25,000 that is used in the Purchased
Business.
SECTION 3.15. CONTRACTS AND COMMITMENTS
(a) Section 3.15(a) of the Seller Disclosure Schedule sets forth, as of
the date hereof, a list of the following Contracts to which the Company or the
Company Subsidiary is a party:
(i) any Contract with any director, officer, employee,
consultant or agent providing for (A) severance, change-in-control or retention
benefits, (B) the increase or acceleration of benefits payable as a result of
the Transactions, or (C) aggregate payments in any calendar year in excess of
$100,000;
(ii) any Contract to forgive any indebtedness in excess of
$5,000 of any Person to the Company or the Company Subsidiary;
(iii) any Contract providing for the purchase of real
property;
(iv) any loan agreement, promissory note or other Contract
relating to indebtedness for borrowed money;
(v) any Contract to guaranty the obligations of any third
party (including Sellers or any Affiliate of Sellers) or to indemnify any third
party (other than indemnification of customers, resellers, distributors, agents,
suppliers, licensors or licensees in respect of intellectual property rights or
in connection with the sale or licensing to customers, in the ordinary course of
business, of products or services of the Company or the Company Subsidiary or
indemnification obligations of the Company or the Company Subsidiary in favor of
officers, directors, employees and other agents contained in the bylaws or other
governing documents of the Company or the Company Subsidiary);
(vi) any Contract which restricts the ability of the Company
or the Company Subsidiary to engage in any business activity in any geographic
area or line of business or which restricts the ability of the Company or the
Company Subsidiary to compete with any Person;
(vii) any Contract for the sale or other disposition of any
material asset or portion of the assets of the Company or the Company
Subsidiary, other than in the ordinary course of business;
(viii) any Contract obligating the Company or the Company
Subsidiary to make aggregate payments in excess of $100,000 in any fiscal year
to any third party which is not terminable by the Company or the Company
Subsidiary without penalty or further liability exceeding $10,000 upon 90 days'
notice or less;
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(ix) other than those listed in Sections 3.15(a)(x) and
3.15(a)(xi) of the Disclosure Schedule, any Contract pursuant to which the
Company or the Company Subsidiary reasonably expects to receive aggregate
payments in excess of $250,000 in any fiscal year;
(x) Contracts with the resellers of the Company and the
Company Subsidiary that represent (i) the top 25 resellers based on the amount
of aggregate revenues generated by such resellers in the three-months ended
January 31, 2004 and (ii) the top 25 resellers based on the number of merchants
represented by such resellers in the three-months ended January 31, 2004;
(xi) any Contract, other than those listed in Sections
3.15(a)(i) through 3.15(a)(x) of the Disclosure Schedule, on which the Purchased
Business is substantially dependent or as to which a default under or
termination of such Contract would result in a Material Adverse Effect.
(b) Section 3.15(b) of the Seller Disclosure Schedule sets forth, as of
the date hereof, a list of all Contracts to which Sellers or any of their
Affiliates (other than the Company or the Company Subsidiary) is a party by
which the Purchased Business or assets or properties of the Company or the
Company Subsidiary are bound or that relate to the Purchased Business and which
would be required to be disclosed on Section 3.15(a) of the Seller Disclosure
Schedule if the Company were a party thereto.
(c) Sellers have provided or made available to Purchaser a correct and
complete copy of each Material Contract (or, in the case of any oral Contract, a
written summary of the material terms thereof), together with any amendments or
side letters thereto in effect as of the date of this Agreement. Each Material
Contract is, to the Knowledge of Sellers, valid, binding and enforceable in
accordance with its terms (except for the Enforceability Limitations) and is in
full force and effect. There is no existing material default or material breach
by Sellers, the Company, the Company Subsidiary or any other Affiliate of
Sellers under any Material Contract to which it is a party and, to the Knowledge
of Sellers, no other party to any Material Contract is in material default or
material breach thereunder. To the Knowledge of Sellers, no event has occurred
which, with notice or lapse of time or both, would constitute a material breach
or default or permit termination, modification or acceleration under any
Material Contract or impair any right of the Company or the Company Subsidiary
to exercise and obtain the benefit of any options contained in any Material
Contract. None of Sellers, the Company or the Company Subsidiary (i) has
received written notice from any party to a Material Contract indicating such
party's intent to terminate a Material Contract, or (ii) is bound by a written
forbearance agreement with respect to a Material Contract.
SECTION 3.16. CASUALTIES
Since the Balance Sheet Date, the Purchased Business has not suffered any Loss,
damage or destruction to its tangible properties, whether or not covered by
insurance and whether or not in the ordinary course of business, in an aggregate
amount in excess of $25,000.
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SECTION 3.17. LITIGATION
(a) There is no action, suit, claim, arbitration, inquiry, proceeding
or investigation, at law or in equity, by or before any court, arbitrator or
Governmental Entity pending or, to the Knowledge of Sellers, threatened against
or involving Sellers, the Company or the Company Subsidiary or their respective
properties or assets or, to Seller's Knowledge, their respective officers,
directors, employees or Affiliates, which (i) questions or challenges the
validity of this Agreement or any action taken or to be taken by Sellers or the
Company pursuant to this Agreement or in connection with the Transactions; or
(ii) if determined adversely, would result in a Loss to the Purchased Business
in an amount greater than $100,000.
(b) There is no Order outstanding against Sellers, the Company, the
Company Subsidiary, or, to the Knowledge of Sellers, any officer, director,
employee or Affiliate of any of them that has or could reasonably be expected to
have the effect of prohibiting or materially impairing any material current
business practice of the Purchased Business, any acquisition of material
property by the Purchased Business, or the conduct of the Purchased Business by
the Company or the Company Subsidiary or that otherwise has had or is reasonably
likely to have a Material Adverse Effect.
SECTION 3.18. COMPLIANCE WITH LAWS, ETC.
(a) Each of the Company and the Company Subsidiary is currently in
compliance in all material respects with all material laws, rules and
regulations, ordinances and Orders of all Governmental Authorities that apply to
the Purchased Business. None of the Sellers, the Company or the Company
Subsidiary has received notice from any Governmental Entity that the Purchased
Business is in violation of any law, rule, regulation, ordinance or Order. No
Governmental Entity from which the Company has requested an opinion relating to
the Company's compliance with any law, rule, regulation, ordinance or Order has
refused to issue such an opinion.
(b) Section 3.18(b) of the Seller Disclosure Schedule lists, as of the
date hereof, all material governmental permits, licenses or authorizations held
by the Company or the Company Subsidiary or pursuant to which the Purchased
Business is conducted (the "COMPANY PERMITS"). The Company Permits constitute
all material permits, licenses or authorizations required to conduct the
Purchased Business. None of Sellers, the Company, the Company Subsidiary nor any
other Affiliate of Sellers is in breach or default under any Company Permit.
(c) Section 3.18(c) of the Seller Disclosure Schedule lists, as of the
date hereof, all material certifications of compliance with industry guidelines,
practices or standards held by the Company or the Company Subsidiary or held by
either of the Sellers or their Affiliates which relate to the conduct of the
Purchased Business.
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SECTION 3.19. EMPLOYEE BENEFIT PLANS
(a) Neither the Company nor the Company Subsidiary currently sponsors
any plans within the meaning of Section 3(3) of ERISA or any equity-based
compensation plans (collectively "PLANS"), and, neither the Company nor the
Company Subsidiary has any intention of, or commitment to, establish, adopt or
enter into any such Plans.
(b) Each such Plan of Parent or any Affiliate of Parent in which the
Company, the Company Subsidiary or any Company Employee participates has been
operated in all material respects in accordance with its terms and in material
compliance with all applicable Legal Requirements, including but not limited to
ERISA or the Code, as applicable, except, in each case, as would not have a
Material Adverse Effect.
(c) Each such Plan of Parent or any Affiliate of Parent in which the
Company, the Company Subsidiary or any Company Employee participates which is
intended to meet the requirements of a "qualified plan" under Code Section
401(a) has received a determination letter or opinion letter from the IRS that
such Plan or form of plan is so qualified, and, to the Knowledge of Sellers,
there are no facts or circumstances that could affect the qualified status of
any such Plan, except, in each case, as would not have a Material Adverse
Effect.
(d) None of the Company, the Company Subsidiary or Sellers have ever
maintained, established, sponsored, participated in or contributed to, any (i)
pension plan (within the meaning of Section 3(2) of ERISA) that is subject to
Title IV of ERISA or Section 412 of the Code, (ii) multiemployer plan (within
the meaning of Section 3(37) of ERISA), (ii) "multiple employer plan" as defined
in ERISA or the Code, or (iv) a "funded welfare plan" within the meaning of
Section 419 of the Code.
(e) Neither the Company nor the Company Subsidiary has any obligations
for retiree health and life benefits under any Plan, other than coverage as may
be required under Section 4980B of the Code or Part 6 of ERISA, or under the
continuation of coverage provisions of the laws of any Governmental Entity.
(f) Neither the execution of this Agreement nor consummation of the
Transactions will (A) entitle any Company Employee to severance pay or any
increase in severance pay upon any termination of employment after the date
hereof, (B) accelerate the time of payment or vesting or trigger any payment or
funding (through a grantor trust or otherwise) of compensation or benefits
under, increase the amount payable or trigger any other material obligation
pursuant to, any Plan in which the Company, the Company Subsidiary or any
Company Employee participates, (C) result in any breach or violation of, or a
default under, any Plan in which the Company, the Company Subsidiary or any
Company Employee participates or (D) result in any payment to a Company Employee
that would be a "parachute payment" to a "disqualified individual" as those
terms are defined in Section 280G of the Code, without regard to whether such
payment is
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reasonable compensation for personal services performed or to be performed in
the future.
SECTION 3.20. TAX MATTERS.
(a) Each of the Company and the Company Subsidiary has timely filed (or
there has been filed on its behalf) with appropriate taxing authorities all
material Tax Returns required to be filed by it on or prior to the date hereof.
All such Tax Returns were correct and complete in all material respects. All
Taxes due and owing by the Company and the Company Subsidiary (whether or not
shown on any Tax Return) have been paid. Neither the Company nor the Company
Subsidiary currently is the beneficiary of any extension of time within which to
file any Tax Return.
(b) There are no liens for Taxes upon any property or assets of the
Company, except for liens for Taxes not yet due and payable.
(c) The Company and the Company Subsidiary have each withheld and paid
all Taxes required to have been withheld and paid in connection with any amounts
paid or owing to any employee, independent contractor, creditor, stockholder, or
other third party.
(d) No federal, state, local, or foreign tax audits or administrative
or judicial Tax proceedings are pending or being conducted with respect to the
Company or the Company Subsidiary. Neither the Company nor the Company
Subsidiary has received from any federal, state, local, or foreign taxing
authority (including jurisdictions where the Company or the Company Subsidiary
have not filed Tax Returns) any (i) written notice indicating an intent to open
an audit or other review, (ii) request for information related Tax matters, or
(iii) notice of deficiency or proposed adjustment for any amount of Tax
proposed, asserted, or assessed by any taxing authority against the Company or
any of its Subsidiaries. None of the federal, state, local or foreign income Tax
Returns filed with respect to the Company or the Company Subsidiary for taxable
periods ended on or after December 31, 1999 have been audited or are currently
the subject of audit. Sellers have delivered or made available to Purchaser
correct and complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by the
Company and Company Subsidiary filed or received since December 31, 1999.
(e) Neither the Company nor the Company Subsidiary 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.
(f) Neither the Company nor the Company Subsidiary has been a member of
an Affiliated Group filing a consolidated federal income Tax Return other than a
group the common parent of which is Parent. Parent will file a consolidated
federal income Tax Return with the Company and the Company Subsidiary for the
Taxable year immediately preceding the current Taxable year.
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(g) Each Affiliated Group has filed all federal income Tax Returns that
it was required to file for each Taxable period during which the Company or the
Company Subsidiary was a member of the group. All such Tax Returns were correct
and complete in all material respects in so far as they relate to the Company
and the Company Subsidiary.
(h) There is no dispute or claim concerning any income Tax Liability of
any Affiliated Group for any taxable period during which the Company or the
Company Subsidiary was a member of the group either (i) claimed or raised by any
Governmental Entity in writing or (ii) otherwise to the Knowledge of Seller.
(i) The unpaid Taxes of the Company and the Company Subsidiary (A) did
not, as of the Balance Sheet Date, exceed the reserve for Tax liability (rather
than any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) set forth on the face of the Balance Sheet (rather
than in any notes thereto) and (B) will not exceed that reserve as adjusted for
the passage of time through the Closing Date in accordance with the past custom
and practice of the Company and the Company Subsidiary in filing their Tax
Returns. Since the Balance Sheet Date, neither the Company nor the Company
Subsidiary has incurred any liability for Taxes arising from extraordinary gains
or losses, as that term is used in GAAP, outside the ordinary course of business
consistent with past custom and practice. Neither the Company nor the Company
Subsidiary has any liability for the Taxes of any Person other than the Company
and the Company Subsidiary under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.
(j) Neither the Company nor the Company Subsidiary will 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: (A) change in method of
accounting for a taxable period ending on or prior to the Closing Date; (B)
"closing agreement" as described in Code Section 7121 (or any corresponding or
similar provision of state or local income Tax law) executed on or prior to the
Closing Date; (C) inter-company transactions or any excess loss account
described in Treasury Regulations under Code Section 1502 (or any corresponding
or similar provision of state or local income Tax law); (D) installment sale or
open transaction disposition made on or prior to the Closing Date; or (E)
prepaid amount received on or prior to the Closing Date.
(k) Neither the Company nor the Company Subsidiary is obligated to or
intends to consummate any transaction not in the ordinary course of business
after the Closing that would result in a material amount of income being
reported on Purchaser's consolidated United States federal income Tax Return
pursuant to Section 5.6(b)(i)(B).
SECTION 3.21. INTELLECTUAL PROPERTY
(a) Section 3.21(a) of the Seller Disclosure Schedule sets forth a true
and complete list of all material Registered Intellectual Property owned
exclusively by
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the Company or the Company Subsidiary or owned by Sellers or any Affiliate of
Sellers and used exclusively by the Company or the Company Subsidiary.
(b) Section 3.21(b) of the Seller Disclosure Schedule sets forth a true
and complete list of all material Contracts (other than shrink wrap and other
generally available commercial licenses with respect to which no future license
or royalty payments in excess of $25,000 will become due, or free software that
is distributed without restrictions on use) pursuant to which the Company or the
Company Subsidiary has received a license to, or is otherwise permitted to use,
any IP of any Person where such IP is material to the Purchased Business
(including, without limitation, Sellers and their Affiliates) (such IP,
collectively the "THIRD PARTY LICENSED IP").
(c) Section 3.21(c) of the Seller Disclosure Schedule sets forth a true
and complete list of all Contracts (other than Contracts entered into in the
ordinary course of the licensing or distribution of products or services of the
Company or the Company Subsidiary) to which the Company or the Company
Subsidiary is a party, pursuant to which the Company or the Company Subsidiary
has granted a license which is still in effect of any material Company IP (such
Contracts, together with the agreements set forth in Section 3.21(b) of the
Seller Disclosure Schedule, the "COMPANY LICENSES").
(d) There is no outstanding Order applicable to the Company or the
Company Subsidiary affecting in any material respect the right of the Company or
the Company Subsidiary to develop, license, use, sell, distribute or modify the
Company IP. None of Sellers, the Company or the Company Subsidiary has received
any written notice of any claim or assertion that the products or the material
operations of the Company or the Company Subsidiary or the operation of the
Purchased Business infringes, misappropriates or conflicts with the Intellectual
Property Rights of any Person which claim or assertion, if determined to be
true, could reasonably be expected to be material to the Purchased Business, and
there are no pending actions brought by any Person against the Company or the
Company Subsidiary alleging infringement of such Person's Intellectual Property
Rights that if determined adversely to the Company, could reasonably be expected
to be material to the Purchased Business.
(e) To the Knowledge of Sellers, the Company IP, the Seller Licensed IP
and the Third Party Licensed IP together constitute all of the IP that is
material to the operation of the Purchased Business as of the Closing.
(f) To the Knowledge of Sellers, neither the products nor the material
operations of the Company or the Company Subsidiary nor the operation of the
Purchased Business as of the Closing Date infringe, misappropriate or conflict
with the Intellectual Property Rights of any third party in any material
respect.
(g) To the Knowledge of Sellers, no Intellectual Property Rights owned
by the Company or the Company Subsidiary that are material to the Purchased
Business are being infringed by any Person in any material respect.
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(h) Sellers, the Company and the Company Subsidiary have taken
reasonable measures to protect the confidential and proprietary nature of their
respective trade secrets and other confidential information which are material
to the Purchased Business. None of Sellers, the Company or the Company
Subsidiary have disclosed material source code for any software owned by the
Company or the Company Subsidiary that is material to a product of the Purchased
Business to any Person (other than pursuant to customary source code escrow
arrangements entered into in the ordinary course of business), and the Company
has taken reasonable measures to prevent disclosure of such source code.
(i) All current Company Employees, as well as current agents,
consultants and independent contractors, who have contributed to or participated
in the conception, development or enhancement of material Company IP, have
executed a confidentiality and assignment of inventions agreement of which the
Company or the Company Subsidiary is the beneficiary, copies or forms of which
have been provided or made available to Purchaser. To the Knowledge of Sellers,
none of such personnel is in violation of any agreement described in this
paragraph.
SECTION 3.22. LABOR MATTERS
(a) There is no labor strike, dispute, slowdown, stoppage or lockout
pending, or to the Knowledge of Sellers, threatened with respect to the Company
Employees, nor have Sellers, the Company or the Company Subsidiary experienced
any such strike, dispute, slowdown, stoppage or lockout in the past with respect
to Company Employees.
(b) None of Sellers, the Company, the Company Subsidiary or any other
Affiliate of Sellers is a party to or bound by any labor or collective
bargaining agreement applicable to the Company, the Company Subsidiary or to the
Company Employees.
(c) None of the Company Employees is represented by a labor union, and
no petition has been filed, nor has any proceeding been instituted by any
employee or group of employees with any labor relations board or commission
seeking recognition of a collective bargaining representative. To the Knowledge
of Sellers, there is no organizational effort currently being made or threatened
by or on behalf of any labor union to organize any Company Employees.
(d) There is no grievance, unfair labor practice charge or complaint,
or other controversy or dispute against the Company or the Company Subsidiary or
regarding any Company Employee (singly or collectively) pending or, to the
Knowledge of Sellers, threatened before any court, arbitrator or Governmental
Entity.
(e) None of the Company, the Company Subsidiary or Sellers (in their
capacity as an employer of Company Employees), is in violation in any material
respect of any applicable Legal Requirements relating to employment and
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employment practices, wages, hours and terms and conditions of employment with
respect to Company Employees.
(f) Section 3.22 of the Seller Disclosure Schedule sets forth, as of
the date hereof, the name, title and total annual salary of each Company
Employee. To the Knowledge of Sellers, no Company Employee has given written
notice to Sellers, the Company or the Company Subsidiary of his or her intent to
terminate his or her employment or service relationship with the Company.
SECTION 3.23. ASSETS NECESSARY TO THE PURCHASED BUSINESS
As of the date hereof, the tangible property and tangible assets owned or leased
by the Company or the Company Subsidiary and those to be transferred or provided
by Parent pursuant to the Transition Services Agreement and the Sublease
Agreements constitute the tangible property and tangible assets used to carry on
the Purchased Business. The Transactions will not deprive the Purchased Business
of the benefits of any tangible properties or tangible assets used, or available
for use, in its business or operations or of the benefits of any rights relating
thereto (whether by reason of a violation of the terms of any Contract or a
failure to obtain any consent from any Governmental Entity or any other Person
or for any other cause) except for those tangible properties and tangible assets
of Parent used or available for use on a company wide basis, those to be
transferred or provided by Parent pursuant to the Transition Services Agreement
and the Sublease Agreements, those set forth on Section 3.23(a) of the Seller
Disclosure Schedule, and pursuant to agreements set forth on Section 3.4(b) and
Section 3.4(c) of the Seller Disclosure Schedule. All such tangible properties
and tangible assets are fit for the purposes for which they are presently being
used in the business and operations of the Purchased Business and are in good
operating condition and repair, except for normal wear and tear.
SECTION 3.24. CUSTOMERS AND DISTRIBUTORS
None of Sellers, the Company or the Company Subsidiary has received written
notice from any customer (other than merchants from which the Company received
less than $100,000 in revenues in 2003), distributor, sales agent or reseller
material to the Purchased Business indicating that such Person intends to
terminate (or does not intend to renew) its existing relationship with the
Purchased Business.
SECTION 3.25. ENVIRONMENTAL COMPLIANCE
To the Knowledge of Sellers, each of the Company and the Company Subsidiary is
in compliance in all respects with applicable Environmental Laws, except where
any failure to be in compliance with such Laws would not result in material
liability to the Company or the Company Subsidiary. None of Sellers, the Company
or the Company Subsidiary has received notice of, nor, to the Knowledge of the
Sellers, is any predecessor of any of them subject to, any Environmental Claim
that could result in material liability to the Company or the Company
Subsidiary. To the Knowledge of Sellers, neither the Company nor the Company
Subsidiary, nor any other Person acting on behalf of any of them, has disposed
of, transported, stored, or arranged for the disposal of any Hazardous Materials
to, at or upon: (i) any location other than a site lawfully permitted to receive
such Hazardous Materials; (ii) any premises owned or leased by the Company or
the Company Subsidiary, except for the use of household cleaners and office
products in the ordinary course of business in compliance with applicable
Environmental Laws; or (iii) any site which has been placed on the National
Priorities List, CERCLIS or their state equivalents. To the Knowledge of
Sellers, there has not occurred during the period the Company or the
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Company Subsidiary operated or possessed any premises owned or leased by the
Company or the Company Subsidiary, nor is there presently occurring, a Release
of any Hazardous Materials on, into or beneath the surface of, or adjacent to,
any premises owned or leased by the Company or the Company Subsidiary except for
the use of household cleaners and office products in the ordinary course of
business in material compliance with applicable Environmental Laws and except
for any Release that would not result in material liability to the Company or
the Company Subsidiary.
SECTION 3.26. CERTAIN TRANSACTIONS
Neither the Company nor the Company Subsidiary is indebted, directly or
indirectly, to any of its officers or directors or to their respective spouses
or children in any amount whatsoever, except for indebtedness to employees for
accrued salaries and bonuses not yet payable or for reasonable business expenses
actually incurred. None of said officers or directors, or any members of their
immediate families, are indebted to the Company or the Company Subsidiary or, to
the Knowledge of Sellers, have any direct or indirect ownership interest in any
firm or business entity which is affiliated with or with which the Company or
the Company Subsidiary has a business relationship, or any firm or corporation
which competes with the Purchased Business; provided, that ownership of 5% or
less of the outstanding voting securities of a publicly traded corporation shall
not constitute such a direct or indirect interest. To the Knowledge of Sellers,
no officer or director of the Company or the Company Subsidiary, or any member
of his or her immediate family, is, directly or indirectly, interested in any
Contract with the Company or the Company Subsidiary.
SECTION 3.27. BROKERS OR FINDERS
Except for Xxxxxx Xxxxxx Partners LLC, financial advisor to Parent, none of
Sellers, the Company, or any of their Affiliates has entered into any Contract
entitling any agent, broker, investment banker, financial advisor or other firm
or Person to any broker's or finder's fee or any other commission or similar fee
in connection with any of the Transactions. Section 3.28. Disclosure
To the Knowledge of Sellers, no representation or warranty by Seller in
this Agreement contains or will contain any untrue statement of material fact or
omits or will omit to state any material fact necessary, in light of the
circumstances under which it was made, in order to make such representations and
warranties not misleading.
SECTION 3.29. NO OTHER REPRESENTATIONS
Except for the representations and warranties contained in this Agreement, the
other Transaction Documents and any certificates delivered pursuant hereto, none
of Sellers, the Company or the Company Subsidiary, nor any other Person acting
on behalf of them, makes or has made any representation or warranty, express or
implied.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Sellers that:
SECTION 4.1. ORGANIZATION.
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of Delaware and has all requisite corporate power and authority
and all necessary governmental
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approvals to carry on its business as now being conducted and to own the
properties and assets it now owns, except where the failure to have such
governmental approvals would not have, individually or in the aggregate, a
material adverse effect on Purchaser's ability to consummate the Transactions.
SECTION 4.2. AUTHORIZATION; VALIDITY OF AGREEMENT.
Purchaser has full corporate power and authority to execute and deliver the
Transaction Documents to which it is a party and to consummate the Transactions.
The execution, delivery and performance by Purchaser of the Transaction
Documents to which it is a party and the consummation of the Transactions have
been duly authorized by the Board of Directors of Purchaser and no other
corporate action on the part of Purchaser is necessary to authorize the
execution and delivery by Purchaser of the Transaction Documents to which it is
a party or the consummation of the Transactions. No vote of, or consent by, the
holders of any class or series of stock issued by Purchaser is necessary to
authorize the execution and delivery by Purchaser of the Transaction Documents
to which it is a party or the consummation by it of the Transactions. This
Agreement has been, and each other Transaction Document to which Purchaser is a
party will be at the Closing, duly executed and delivered by Purchaser, and,
assuming due and valid authorization, execution and delivery hereof by Sellers
and the Company, this Agreement is, and each other Transaction Document to which
Purchaser is a party will be at Closing, a valid and binding obligation by
Purchaser, enforceable against Purchaser in accordance with its terms except as
limited by the Enforceability Limitations.
SECTION 4.3. CONSENTS AND APPROVALS; NO VIOLATIONS.
Except for the filings, permits, authorizations, consents and approvals
as may be required under, and other applicable requirements of, the Exchange
Act, the HSR Act and state securities or blue sky laws, none of the execution,
delivery or performance of this Agreement by Purchaser, the consummation by
Purchaser of the Transactions or compliance by Purchaser with any of the
provisions hereof will (a) conflict with or result in any breach of any
provision of the certificate of incorporation or bylaws of Purchaser, each as
amended to date, or (b) require any material declaration or filing with, or
material permit, authorization, consent or approval of, any Governmental Entity.
Section 4.4. Acquisition of Shares for Investment; Ability to Evaluate and Bear
Risk.
(a) Purchaser is acquiring the Shares for investment and not with a
view toward, or for sale in connection with, any distribution thereof, nor with
any present intention of distributing or selling the Shares. Purchaser agrees
that the Shares may not be sold, transferred, offered for sale, pledged,
hypothecated or otherwise disposed of without registration under the Securities
Act and any applicable state securities laws, except pursuant to an exemption
from such registration under the Securities Act and such laws.
(b) Purchaser is able to bear the economic risk of holding the Shares
for an indefinite period, and has knowledge and experience in financial and
business
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matters such that it is capable of evaluating the risks of the investment in the
Shares.
SECTION 4.5. AVAILABILITY OF FUNDS.
Purchaser currently has access to sufficient funds in cash or cash equivalents
and will at the Closing have sufficient immediately available funds, in cash, to
pay the Purchase Price and to pay any other amounts payable pursuant to this
Agreement and to effect the Transactions.
SECTION 4.6. LITIGATION.
There is no action, suit, claim, arbitration, inquiry, proceeding or
investigation, at law or in equity, by or before any court, arbitrator or
Governmental Entity pending or, to the knowledge of Purchaser, threatened
against or involving Purchaser or, to Purchaser's Knowledge, Purchaser's
officers, directors, employees or Affiliates that (i) questions or challenges
the validity of this Agreement or any action taken or to be taken by Purchaser
pursuant to this Agreement or in connection with the Transactions, or (ii) that
would have a material adverse effect on Purchaser's ability to consummate the
Transactions.
SECTION 4.7. BROKERS OR FINDERS.
Except for Broadview International, LLC, financial advisor to Purchaser, neither
Purchaser nor any of its Affiliates has entered into any Contract entitling any
agent, broker, investment banker, financial advisor or other firm or Person to
any broker's or finder's fee or any other commission or similar fee in
connection with any of the Transactions.
ARTICLE 5.
COVENANTS AND ADDITIONAL AGREEMENTS
SECTION 5.1. INTERIM OPERATIONS OF THE COMPANY.
Except (a) as otherwise contemplated by this Agreement, (b) as set forth in
Section 5.1 of the Seller Disclosure Schedule, and (c) as may be consented to by
Purchaser in writing (which consent shall not be unreasonably delayed), the
Company shall and shall cause the Company Subsidiary to, comply with the
following from the date hereof until the earlier of the termination of this
Agreement in accordance with its terms or the Closing Date:
(i) The Purchased Business shall be conducted in the ordinary
and usual course of business consistent with past practice and Sellers, the
Company and the Company Subsidiary shall each use their commercially reasonable
efforts to maintain their relationships with customers, resellers, suppliers,
vendors, employees, agents and others, and keep available to Purchaser the
services of the present Company Employees and preserve for Purchaser the
goodwill of customers, resellers, suppliers, vendors, employees, agents and
others having business relations with the Purchased Business.
(ii) Neither the Company nor the Company Subsidiary shall (A)
amend, modify, repeal or propose to do so, or permit or consent to any
amendment, modification or repeal of its certificate of incorporation or bylaws
or similar organizational documents, (B) issue, sell, transfer, pledge, dispose
of or encumber any shares of any class or series of its capital stock, or
securities
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convertible into or exchangeable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any shares of any class or series of its
capital stock, (C) declare, set aside or pay any dividend or other distribution
payable in cash, stock or property with respect to any shares of any class or
series of its capital stock, (D) split, combine or reclassify any shares of any
class or series of its stock, or (E) redeem, purchase or otherwise acquire
directly or indirectly any shares of any class or series of its capital stock,
or any instrument or security which consists of or includes a right to acquire
such shares. Notwithstanding the foregoing, however, the Company may distribute
cash to Go2Net or Parent in excess of the amount held on behalf of merchants
pending disbursement or held in reserve for eCheck and Integrated Payment
Solution related transactions as of the Closing Date.
(iii) Neither the Company nor the Company Subsidiary shall,
except in the ordinary course of business consistent with past practice (A)
create, incur, assume, guarantee, endorse, refinance, modify, extend, renew or
otherwise become liable for any Indebtedness, obligation or other liability, (B)
pay, agree to cancel or pay, or otherwise provide for a complete or partial
discharge in advance of a scheduled payment date with respect to any
Indebtedness, obligation or other liability, (C) waive, cancel or compromise any
right to receive any direct or indirect payment or other benefit under any
Indebtedness, obligation or other liability owing to the Purchased Business, (D)
sell, lease or otherwise dispose of any material assets, or (E) grant any
extensions of credit, other than accounts receivable in the ordinary course of
business consistent with past practices.
(iv) Neither the Company nor the Company Subsidiary shall (A)
amend, terminate or waive any material right under any Material Contract, (B)
merge or consolidate with any Person, (C) purchase any capital stock of or
interest in any Person, (D) purchase assets constituting a business, or (E)
create or suffer the imposition of any Encumbrance upon any of their assets,
tangible or intangible, except for Permitted Encumbrances, (F) make any change
in their pricing policies or payment or credit policies; or (G) fail to pay any
creditor any amount owed to such creditor when due, other than consistent with
past payment practices.
(v) None of Sellers, the Company or the Company Subsidiary
shall (A) make any change in the compensation (including severance compensation)
or bonuses payable or to become payable to any of the Company Employees (other
than normal recurring increases in the ordinary course of business disclosed on
Section 5.1(b)(v) of the Seller Disclosure Schedule or pursuant to plans,
programs or agreements existing on the date hereof and disclosed on Section
5.1(b)(v) of the Seller Disclosure Schedule), including the establishment or
adoption of any employee benefit plan, except those adopted by Parent on a
company-wide basis, or (B) pay or agree to pay any bonus or other compensation
to any Person in connection with the Transactions.
(vi) The Company shall not adopt or become a party to any plan
of complete or partial liquidation, dissolution, restructuring, recapitalization
or other reorganization of the Company.
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(vii) Neither the Company nor the Company Subsidiary shall
change in any material respect any of the accounting methods used by it unless
required by GAAP, or make or change any Tax election that would be reasonably
likely to adversely affect in any material respect (relative to the Purchased
Business) the Tax liability or Tax Attributes of the Company or the Company
Subsidiary.
(viii) Neither the Company nor the Company Subsidiary shall
institute, pay, discharge, settle or satisfy any litigation or any claims,
liabilities or obligations which are material to the Purchased Business.
(ix) Neither the Company nor the Company Subsidiary shall make
any capital expenditures exceeding $50,000 in the aggregate.
(x) Other than transactions in connection with intercompany
cash management and transfers, neither the Company nor the Company Subsidiary
shall enter into any transaction other than on an arms' length basis. (xi) None
of Sellers, the Company or the Company Subsidiary shall hire or retain any
person as a Company Employee who does not serve as a Company Employee on the
date of this Agreement.
(xii) Neither the Company nor the Company Subsidiary shall
enter into any agreement, contract, commitment or arrangement to do any of the
foregoing.
SECTION 5.2. ACCESS.
Prior to the Closing, the Company and Sellers shall give Purchaser and its
authorized representatives reasonable access to all books, records, personnel,
offices and other facilities and properties of the Company and the Company
Subsidiary (including books and records of Sellers, but only to the extent
related to the Company and the Company Subsidiary); provided, however, that any
such access shall be conducted at Purchaser's expense, at a reasonable time,
under the supervision of Parent's or the Company's personnel and in such a
manner as to not interfere unreasonably with the normal operation of the
business of Sellers, the Company or the Company Subsidiary. Notwithstanding
anything contained in this or any other agreement between Purchaser and Sellers
executed prior to the date hereof, none of the Company, Sellers or any of their
Affiliates shall be required to disclose any information to Purchaser if such
disclosure would (i) jeopardize any attorney-client or other legal privilege, or
(ii) contravene any applicable Legal Requirements, fiduciary duty or binding
agreement entered into prior to the date of this Agreement (including any
confidentiality agreement to which Sellers, the Company or any of their
Affiliates is a party); provided, however, that this sentence shall not be
deemed to modify or waive any disclosure required by Article 3 hereof.
SECTION 5.3. CONFIDENTIAL INFORMATION.
The parties acknowledge that Parent and Purchaser have previously executed a
Confidential Disclosure Agreement dated November 12, 2003 with respect to the
Transactions, by and between Parent and Purchaser (the "CONFIDENTIALITY
AGREEMENT"). The Confidentiality Agreement shall continue in full force and
effect, and survive the execution and delivery of this Agreement, the Closing
and the consummation of the Transactions and/or the termination of this
Agreement. The parties hereby agree that the term "EVALUATION MATERIAL," as used
in the Confidentiality Agreement, shall include (i) all exhibits, schedules,
certificates and other documents executed or
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delivered in connection with the execution of this Agreement and the
consummation of the Transactions, and (ii) all proprietary and confidential
information concerning Sellers and their Affiliates, and their business and
operations, including Sellers' intellectual property and the Seller Licensed IP,
and (iii) all documents contained on Parent's datasite, or otherwise delivered
to Purchaser, to which Purchaser or Purchaser's representatives have had access
prior to Closing. Notwithstanding the foregoing, any confidentiality provisions
in the Intellectual Property License Agreement shall supercede the provisions of
the Confidentiality Agreement with respect to the Seller Licensed IP that is the
subject of such Intellectual Property License Agreement.
SECTION 5.4. EFFORTS AND ACTIONS TO CAUSE CLOSING TO OCCUR.
(a) Prior to the Closing, upon the terms and subject to the conditions
of this Agreement, Purchaser, Sellers and the Company agree (i) to use all
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or advisable (subject to any
applicable Legal Requirements) to consummate the Closing and the other
Transactions as promptly as practicable, (ii) to execute any documents,
instruments or conveyances of any kind which may be reasonably necessary or
advisable to carry out any of the Transactions, and (iii) to cooperate with each
other in connection with the foregoing, including using their reasonable efforts
(A) to obtain all necessary approvals, authorizations, consents, orders,
licenses, permits, qualifications, exemptions or waivers (including the
expiration or early termination of any applicable waiting period) by any third
party or Governmental Entity, (B) to defend all actions challenging this
Agreement or the consummation of the Transactions, (C) to lift or rescind any
injunction or restraining order or other order adversely affecting the ability
of the parties to consummate the Transactions, (D) to effect all necessary
registrations and filings, including, without limitation, submissions of
information requested by Governmental Entities, and (E) to fulfill all
conditions to Closing set forth in this Agreement. In addition, no party hereto
shall take any action after the date hereof that could reasonably be expected to
materially delay the obtaining of, or result in not obtaining, any permission,
approval or consent (including the expiration or early termination of any
applicable waiting period) from any Governmental Entity or other Person required
to be obtained prior to Closing.
(b) Without limiting the generality of the foregoing:
(i) Sellers and the Company shall use their commercially
reasonable efforts to cause the Material Contracts listed in Section 5.4(b) of
the Seller Disclosure Schedule that are by and between Sellers or any of their
Affiliates (other than the Company or the Company Subsidiary) and a third party
to be assigned to the Company during the period from the date hereof and through
the Closing Date, so as to permit the Company to assume the rights and
obligations under such Material Contracts, provided that in no event will
Sellers or any of their Affiliates be required to make any payment to a third
party not otherwise due and owing in connection with any such assignment (other
than transfer fees or similar fees provided for in the terms of the Material
Contract).
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(ii) Sellers and the Company shall also use their commercially
reasonable efforts to obtain any consents or approvals required in connection
with the consummation of the Transactions under any other Material Contract;
provided that in no event will Sellers or any of their Affiliates be required to
make any payment to a third party not otherwise due and owing in connection with
any such consent or approval (other than transfer fees or similar fees provided
for in the terms of the Material Contract).
(iii) If any assignment or consent contemplated by this
Section 5.4(b) is not obtained prior to the Closing, or if Purchaser and Parent
agree in writing that an attempted assignment of a Material Contract would be
ineffective or would adversely affect the rights thereunder so that the Company
would not receive substantially all such rights, Sellers shall, and shall cause
their Affiliates to, take commercially reasonable efforts so as to ensure that
the Company would obtain the benefits and assume the obligations thereunder in
accordance with this Agreement, including subcontracting, sublicensing or
subleasing to the Company, or under which Sellers would enforce, for the benefit
of the Company and at the Company's expense, any third party's obligations.
After the Closing, Sellers shall promptly pay to the Company all monies received
by Sellers or any of their Affiliates with respect to such nonassignable
Material Contracts or any benefit arising thereunder.
(c) Prior to the Closing, Sellers and their Affiliates shall transfer
to the Company all right, title and interest in and to the IP owned by them that
is (i) listed on Section 3.21(a) of the Seller Disclosure Schedule or (ii) used
exclusively by the Company or the Company Subsidiary. Such transfer shall be
made pursuant to a written agreement in form and substance reasonably acceptable
to Purchaser.
(d) Prior to the Closing, Sellers and their Affiliates shall transfer
to the Company all right, title and interest in and to the tangible assets owned
by them that are listed on Section 3.23(b) of the Seller Disclosure Schedule or
are located at the premises subject to the Sublease Agreements and used in the
Purchased Business. Such transfer shall be made pursuant to a written agreement
in form and substance reasonably acceptable to Purchaser.
(e) Prior to the Closing, each party shall promptly consult with the
other party hereto with respect to, provide any necessary information with
respect to, and provide the other parties (or their respective counsel) with
copies of, all filings made by such party with any Governmental Entity or any
other information supplied by such party in writing to a Governmental Entity in
connection with this Agreement and the Transactions. Prior to the Closing, each
party hereto shall promptly provide the other party with copies of any written
communication received by such party from any Governmental Entity regarding any
of the Transactions. If any party hereto or Affiliate thereof receives a request
or demand for information or documentary material from any such Governmental
Entity with respect to any of the Transactions prior to the Closing, then such
party shall endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other parties, an
appropriate response in compliance with such request or demand.
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(f) In addition to and without limiting the agreements of the parties
contained above, Purchaser and Parent shall:
(i) take promptly all actions necessary to make the filings
required of them or any of their Affiliates under the HSR Act;
(ii) comply at the earliest practicable date with any request
or demand for additional information or documentary material received by the
Company, Purchaser, Sellers or any of their Affiliates from the FTC or the DOJ
pursuant to the HSR Act or from any state Attorney General or other Governmental
Entity in connection with antitrust matters;
(iii) cooperate with each other in connection with any filing
under the HSR Act, and in connection with resolving any investigation or other
inquiry concerning the Transactions commenced by the FTC, DOJ, any state
Attorney General or any other Governmental Entity;
(iv) use their commercially reasonable efforts to resolve in a
prompt manner such objections, if any, as may be asserted with respect to the
Transactions under any antitrust law; and
(v) advise the other parties promptly of any material
communication received by such party from the FTC, DOJ, any state Attorney
General or any other Governmental Entity regarding any of the Transactions, and
of any understandings, undertakings or agreements (oral or written) such party
proposes to make or enter into with the FTC, DOJ, any state Attorney General or
any other Governmental Entity in connection with the Transactions.
Concurrently with the filing of notifications under the HSR Act, or as soon
thereafter as practicable, Parent and Purchaser shall each request early
termination of the HSR Act waiting period.
SECTION 5.5. NO SOLICITATION.
Sellers and the Company agree that, from the date hereof and until any
termination of this Agreement pursuant to Article 7, none of Sellers, the
Company, the Company Subsidiary, or any of their respective officers and
directors shall, and Sellers and the Company will direct and use commercially
reasonable efforts to cause each of their and the Company Subsidiary's
respective employees, representatives and Affiliates not to, initiate, solicit
or encourage, directly or indirectly, the making or implementation of any
proposal or offer with respect to any merger, acquisition, consolidation or
similar transaction directly involving, or any direct purchase of all or any
significant portion of the assets or any equity securities of, the Company (any
such proposal or offer being an "ACQUISITION PROPOSAL") or engage in any
activities, discussions or negotiations concerning, or provide any confidential
information regarding, the Company or the Company Subsidiary to, or have any
discussions with, any Person relating to an Acquisition Proposal or otherwise
facilitate any effort or attempt to make or implement an Acquisition Proposal.
Sellers and the Company shall: (i) immediately cease any existing activities,
discussions or negotiations with any Persons conducted heretofore with respect
to any of the foregoing, and (ii) notify Purchaser immediately if any
Acquisition Proposal is received by Sellers or the Company.
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SECTION 5.6. TAX MATTERS.
(a) Tax Returns. Except as otherwise provided in this Section 5.6:
(i) Parent shall file or cause to be filed when due all Tax
Returns that are required to be filed by or with respect to the Company or the
Company Subsidiary for taxable years or periods ending on or before the Closing
Date and shall remit (or cause to be remitted), subject to Section 5.6(b), any
Taxes due in respect of such Tax Returns. All such Tax Returns shall be prepared
in a manner consistent with past practice and shall be true, complete and
correct in all material respects and Parent shall pay or cause to be paid all
Taxes due in connection with such Tax Returns. For all taxable periods ending on
or before the Closing Date, Parent shall cause the Company and the Company
Subsidiary to join in Parent's consolidated federal income tax return and shall
pay all Taxes due in connection with such Tax Returns.
(ii) Purchaser shall file or cause to be filed when due all
Tax Returns that are required to be filed by or with respect to the Company or
the Company Subsidiary for taxable years or periods ending after the Closing
Date, and Purchaser shall remit (or cause to be remitted), subject to Section
5.6(b), any Taxes due in respect of such Tax Returns. Straddle Period Returns
shall be prepared in a manner consistent with prior practice.
(iii) Purchaser shall permit Parent to review and comment on
any Tax Return relating to any Straddle Period at least thirty (30) days prior
to filing and shall make such revisions to such Tax Returns as are reasonably
requested by Parent.
(iv) Upon the written request of Purchaser setting forth in
detail the computation of the amount owed, Parent shall pay to Purchaser, no
later than two (2) business days prior to the Due Date for the applicable Tax
Return, the Taxes for which Parent is liable pursuant to Section 5.6(b) but
which are payable with any Tax Return to be filed by Purchaser with respect to
any Straddle Period.
(v) Purchaser shall cause the Company and the Company
Subsidiary to furnish information to Parent as reasonably requested by Parent to
allow Parent to satisfy its obligations under this Section 5.6 in accordance
with past custom and practice. The Company and the Company Subsidiary and
Purchaser shall consult and cooperate with Parent as to any elections to be made
on returns of the Company and the Company Subsidiary for periods ending on or
before the Closing Date.
(vi) Parent may amend any Tax Return of or with respect to the
Company or the Company Subsidiary that are filed or required to be filed for any
taxable years or periods ending on or before the Closing Date after allowing
Purchaser an opportunity to review and comment upon such Tax Return to the
extent it relates to the Company or the Company Subsidiary. Parent shall not
file or cause to be filed any amended return that is inconsistent with past
practices without
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prior written consent of Purchaser (such consent not to be unreasonably
withheld, conditioned or delayed).
(b) Computation of Tax Liabilities.
(i) To the extent permitted or required by law or
administrative practice, (A) the taxable year of the Company and the Company
Subsidiary which includes the Closing Date shall be treated as closing on (and
including) the Closing Date and, notwithstanding the foregoing, (B) all
transactions not in the ordinary course of business occurring after the Closing
shall be reported on Purchaser's consolidated United States federal income Tax
Return to the extent permitted by Treasury Regulation Section
1.1502-76(b)(1)(ii)(B) and shall be similarly reported on other Tax Returns of
Purchaser or its Affiliates to the extent permitted by law. Where it is
necessary to apportion between Parent and Purchaser the Tax liability of an
entity for a Straddle Period (which is not treated under the immediately
preceding sentence as closing on the Closing Date), such liability shall be
apportioned between the period deemed to end at the close of the Closing Date,
subject to Section 5.6(b) and the period deemed to begin at the beginning of the
day following the Closing Date on the basis of an interim closing of the books,
except that Taxes (such as real property Taxes) imposed on a periodic basis
shall be allocated on a daily basis.
(ii) In determining Parent's liability for Taxes pursuant to
this Agreement, Parent shall be credited with the amount of estimated Taxes paid
by or on behalf of the Company and the Company Subsidiary or accrued on the
Balance Sheet of the Company or the Company Subsidiary prior to the Closing. To
the extent that Parent's liability for Taxes for a taxable year or period is
less than the amount of estimated income Taxes previously paid by or on behalf
of the Company and the Company Subsidiary with respect to all or a portion of
such taxable year or period, Purchaser shall pay Parent the difference within
two (2) business days of filing the Tax Return relating to such income Taxes.
(iii) To the extent that Parent's liability for Taxes for a
taxable year or period is greater than the amount of estimated income Taxes
previously paid by or on behalf of the Company and the Company Subsidiary with
respect to all or a portion of such taxable year or period, Purchaser shall
notify Parent, and Parent shall reimburse Purchaser for the difference within
fifteen (15) business days after Purchaser files the Tax Return relating to such
income Taxes.
(c) Transfer Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes, and all conveyance fees, recording charges
and other fees and charges (including any penalties and interest) incurred in
connection with the consummation of the transactions contemplated by this
Agreement shall be borne 50% by Purchaser and 50% by Sellers.
(d) Section 338(h)(10) Election. At Purchaser's request, Parent and
Purchaser shall jointly make the election described in Code Section 338(h)(10)
(the "SECTION 338(h)(10) ELECTION") with respect to the purchase and sale of the
stock of
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the Company and the Company Subsidiary hereunder. Parent will pay any income Tax
attributable to the making of the Section 338(h)(10) Election and will indemnify
Purchaser, the Company, and the Company Subsidiary against any Losses arising
out of any failure to pay such income Tax.
(e) Allocation of Purchase Price. If a 338(h)(10) election is made,
Purchaser and Parent agree that the Purchase Price and the liabilities of the
Company and the Company Subsidiary (plus other relevant items) will be allocated
to and among the assets of the Company and the Company Subsidiary for all
relevant purposes (including Tax and financial accounting purposes) in
accordance with the methodology set forth on an allocation schedule to be agreed
to by Purchaser and Sellers prior to the Closing Date (the "ALLOCATION
SCHEDULE"), and (ii) a final allocation of the Purchase Price and liabilities of
the Company and the Company Subsidiary (plus other relevant items) consistent
with the form of Allocation Schedule (the "FINAL ALLOCATION") shall be made as
soon as practicable following the Closing. Purchaser, the Company, the Company
Subsidiary and Parent will file all Tax Returns (including amended Tax Returns
and claims for refunds) and information reports in a manner consistent with the
Final Allocation.
(f) Refunds.
(i) Any Tax refund (including any interest in respect thereof)
received by Purchaser, the Company or the Company Subsidiary, and any amounts
credited against Tax to which Purchaser, the Company or the Company Subsidiary
becomes entitled (including by way of any amended Tax Return or any carryback
filing), that relate to any taxable period, or portion thereof, ending on or
before the Closing Date shall be for the account of Parent, and Purchaser shall
pay over to Parent any such refund or the amount of any such credit within five
(5) business days after receipt or entitlement thereto. Purchaser shall pay
Parent interest at the rate prescribed under Section 6621(a)(1) of the Code,
compounded daily, on any amount not paid when due under this Section 5.6(f). For
purposes of this Section 5.6(f), where it is necessary to apportion a refund or
credit between Purchaser and Parent for a Straddle Period, such refund or credit
shall be apportioned between the period deemed to end at the close of the
Closing Date and the period deemed to begin at the beginning of the day
following the Closing Date on the basis of an interim closing of the books of
the Company and the Company Subsidiary, except that refunds or credits of Taxes
imposed on a periodic basis (e.g., real property Taxes) shall be allocated on a
daily basis.
(ii) Purchaser shall cooperate, and cause the Company and the
Company Subsidiary to cooperate, in obtaining any Tax refund that Parent
reasonably believes should be available, including through filing appropriate
forms with the applicable taxing authorities.
(g) Post-Closing Actions which Affect Parent's Liability for Taxes.
(i) Purchaser shall not permit the Company or the Company
Subsidiary to take any action which could increase Parent's liability for Taxes
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(including any liability of Parent to indemnify Purchaser for Taxes pursuant to
this Agreement) without Parent's consent or unless required by applicable Legal
Requirements.
(ii) None of Purchaser or any Affiliate of Purchaser shall (or
shall cause or permit the Company or the Company Subsidiary to) amend, refile or
otherwise modify any Tax Return relating in whole or in part to the Company or
the Company Subsidiary with respect to any taxable year or period ending on or
before the Closing Date (or with respect to any Straddle Period) without the
prior written consent of Parent, which consent may be withheld in the sole
discretion of Parent.
(iii) None of Purchaser or any Affiliate of Purchaser shall
(or shall cause or permit the Company or the Company Subsidiary to) carryback
for Federal, state, local or foreign tax purposes to any taxable period, or
portion thereof, of the Company, the Company Subsidiary or Parent or any
affiliate of Parent ending before, or which includes, the Closing Date any
operating losses, net operating losses, capital losses, tax credits or similar
items arising in, resulting from, or generated in connection with a taxable year
of Purchaser or any Affiliate of Purchaser, or portion thereof, ending on or
after the Closing Date.
(h) Termination of Existing Tax Sharing Agreements. Any and all
existing Tax sharing agreements or arrangements, written or oral, between Parent
or any Affiliate of Parent and the Company or the Company Subsidiary, shall
terminate as of the Closing.
(i) Assistance and Cooperation. After the Closing Date, each of Parent
and Purchaser shall (and shall cause their respective Affiliates to):
(i) provide timely notice to the other party of any Tax refund
or any pending or threatened Tax audits or disputes regarding any Tax Returns of
the Company or the Company Subsidiary;
(ii) assist the other party in preparing any Tax Returns which
such other party is responsible for preparing and filing in accordance with
Section 5.6(a);
(iii) cooperate fully in preparing for any audits of, or
disputes with taxing authorities regarding, any Tax Returns of the Company or
the Company Subsidiary (and such cooperation shall include the retention and
(upon the other Party's request) provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and making
employees available on a mutually convenient basis to provide additional
information of any material provided hereunder);
(iv) use their best efforts to obtain, upon the other party's
request, any certificate or other document from any governmental authority or
any other Person as may be necessary to mitigate, reduce or eliminate any Tax
that
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could be imposed (including, but not limited to, with respect to the
Transactions); and
(v) provide the other party, upon its request, with all
information that either party may be required to report pursuant to Code Section
6043 and the Treasury Regulations promulgated thereunder.
SECTION 5.7. EMPLOYEES; EMPLOYEE BENEFITS.
(a) Effective as of the Closing Date, all Company Employees at
the Closing Date other than those listed on Exhibit E shall become or continue
as employees of the Company. All such Company Employees shall receive
continuation offer letters of employment in accordance with Section 5.8 hereof.
(b) On and after the Closing, the Company shall cease being a
participant in any and all Parent Plans in which Company Employees participate
prior to the Closing. From and after the Closing, Parent shall assume or retain,
as the case may be, and be solely responsible for all liabilities arising prior
to the Closing associated with the Parent Plans and the Company's or Sellers'
employment of any Company Employee; provided that the Company shall be
responsible for any and all holiday pay, paid time off and other similar accrued
benefits owing to all Company Employees through the Closing Date.
(c) As soon as administratively practicable after the Closing,
Purchaser or Purchaser's Affiliates shall take all reasonable action so that
Company Employees who accept Purchaser's offer of employment (the "TRANSFERRED
EMPLOYEES") and their eligible dependents as the case may be to the extent that
such eligible dependents are eligible to participate in such plans, shall be
entitled to participate in each employee benefit plan, program or arrangement of
Purchaser or Purchaser's Affiliates of general applicability (the "PURCHASER
PLANS") to the same extent as similarly-situated employees of Purchaser (it
being understood that inclusion of the Transferred Employees in the Purchaser
Plans may occur at different times with respect to different plans; provided,
however, that effective as of the Closing, Transferred Employees and their
eligible dependents shall be eligible to participate in Purchaser Plans that
provide medical, dental or health coverage effective as of the Closing). To the
extent permitted under the terms of the Purchaser Plans, Purchaser shall cause
each Purchaser Plan in which Transferred Employees are eligible to participate
to recognize, for purposes of determining eligibility to participate in, the
vesting of benefits and for all other purposes (but not for accrual of benefits)
under the Purchaser Plans, the service of such employees with the Company, the
Company Subsidiary, Parent or any of its Subsidiaries to the same extent as such
service was credited for such purpose by the Company, the Company Subsidiary,
Parent or any of its Subsidiaries. Transferred Employees will be given credit
for past service with the Company for purposes of Purchaser's vacation or
paid-time off policy.
(d) With respect to medical, dental or health Purchaser Plans,
Purchaser or its Affiliates shall cause each such plan, to the extent permitted
under the plan, to
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(i) waive any preexisting condition limitations to the extent such conditions
are covered under the applicable medical, health or dental plans of Purchaser,
provided that the level of coverage remains the same, and (ii) waive any waiting
period limitation or evidence of insurability requirement which would otherwise
be applicable to any Transferred Employees and their eligible dependents on or
after the Closing to the extent such Transferred Employee or eligible dependent
had satisfied any similar limitation or requirement under an analogous Seller
Plan prior to the Closing, and (iii) provide full credit under such plans for
any deductibles, co-payments and out-of-pocket expenses incurred by Transferred
Employees and their eligible dependents during the portion of the calendar year
prior to such participation in which the Closing occurs.
(e) Transferred Employees who are participants in Parent's 401(k) plan
shall be given the opportunity to "rollover" their vested account balances, to
the extent any such amounts distributable constitute "eligible rollover
distributions" (as defined in Section 402(f)(2)(A) of the Code), to any
tax-qualified Purchaser Plan that accepts rollover distributions or to any
eligible individual retirement account.
(f) If any Transferred Employee is discharged by Purchaser or its
Affiliates after the Closing, Purchaser or such Affiliate shall be responsible
for (i) any and all severance costs and obligations and (ii) continuation
coverage pursuant to COBRA or similar state law ("COBRA CONTINUATION COVERAGE")
for such Transferred Employee and his or her eligible dependents.
(g) Parent shall be responsible for and pay any and all severance,
retention and similar payments owing to any Company Employees prior to the
Closing Date or pursuant to the agreements set forth on Section 3.15(b)(i) of
the Seller Disclosure Schedule. Parent shall also be responsible for providing
COBRA Continuation Coverage for all Company Employees discharged by Parent or
its Affiliates at any time prior to the Closing.
(h) Effective on the Closing Date, all rights and benefits of Sellers
or any of their Affiliates under any confidentiality, assignment of inventions
or non-competition Contract with any Transferred Employee shall be assigned to
the Company without further action by any Person.
SECTION 5.8. EMPLOYMENT OFFERS.
As of the date of this Agreement or as soon as is practicable thereafter, but in
no event less than ten (10) calendar days prior to the Closing, Purchaser or one
of its Affiliates shall extend continuation offers of employment to all Company
Employees other than those listed on Exhibit E.
SECTION 5.9. [INTENTIONALLY OMITTED]
SECTION 5.10. NOTICE OF DEVELOPMENTS.
From the date of this Agreement through the Closing Date, Sellers and the
Company will give Purchaser prompt notice (a) if any representation or warranty
contained in this Agreement shall have become untrue or inaccurate, and (b) of
any failure of such party to comply with or satisfy
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any covenant, in each case such that the conditions to closing set forth in
Section 6.2(b) or 6.2(c) would not be satisfied; provided, however, such
disclosure shall not be deemed to amend or supplement the Seller Disclosure
Schedule (unless such disclosure constitutes an amendment or update to the
Seller Disclosure Schedule pursuant to Section 5.17 hereof) or to prevent or
cure any misrepresentation, breach of warranty or breach of covenant. From the
date of this Agreement through the Closing Date, Purchaser will give Parent
prompt notice (a) if any of its representations or warranties contained in this
Agreement shall have become untrue or inaccurate, and (b) of any failure of
Purchaser to comply with or satisfy any covenant, in each case such that the
conditions to closing set forth in Section 6.3(b) or 6.3(c) would not be
satisfied.
SECTION 5.11. MAINTENANCE OF BOOKS AND RECORDS.
Each of the parties hereto shall preserve, until at least the third anniversary
of the Closing Date (or the tenth anniversary of the Closing Date of records
related to Taxes), all pre-Closing Date records possessed or to be possessed by
such party relating to the Company; provided that Sellers shall not be required
to maintain any records held by the Company or otherwise delivered to Purchaser.
After the Closing Date and up until at least the third anniversary of the
Closing Date, upon any reasonable request from a party hereto or its
representatives, the party holding such records shall (a) provide to the
requesting party or its representatives reasonable access to such records during
normal business hours and (b) permit the requesting party or its representatives
to make copies of such records; provided, however, that nothing herein shall
require either party to disclose any information to the other if such disclosure
would jeopardize any attorney-client or other legal privilege or contravene any
applicable Legal Requirements. Such records may be sought under this Section
5.11 for any reasonable business purpose, including to the extent reasonably
required in connection with the audit, accounting, tax, litigation, federal
securities disclosure or other similar needs of the party seeking such records.
SECTION 5.12. SELLERS' ASSETS.
Notwithstanding anything to the contrary contained in this Agreement, except (i)
as provided in the Transition Services Agreement, (ii) as provided in the
Sublease Agreements, (iii) for the IP to be transferred to the Company pursuant
to Section 5.4(c), (iv) for the Seller Licensed IP, and (v) for the tangible
assets to be transferred pursuant to Section 5.4(d), it is expressly agreed that
Purchaser is not purchasing, acquiring or otherwise obtaining, and neither the
Company nor the Company Subsidiary will be entitled to retain following the
Closing Date, any right, title or interest in any property, assets, Intellectual
Property Rights, or Technology owned by Sellers as of the Closing Date,
including without limitation, any trademarks or logos employing Sellers' names
or any part or variation of such names or anything confusingly similar thereto.
Furthermore, except to the extent required by applicable Legal Requirements or
by the rules and regulations of the Nasdaq Stock Market, neither the Company nor
Purchaser or its Affiliates shall make use of (including on or in stationary,
literature, promotional materials, websites and any other printed or written
documents) Seller's name, trademarks or logos from and after the Closing,
including, without limitation "InfoSpace" or "Go2Net" or any part or variation
of such name or anything confusingly similar thereto.
SECTION 5.13. INTERCOMPANY ARRANGEMENTS.
(a) On or prior to the Closing Date, all intercompany accounts between
the Company or the Company Subsidiary, on the one hand, and Parent and its
Affiliates (excluding the Company and the Company Subsidiary), on the other
hand, shall be eliminated.
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(b) Except as otherwise contemplated by this Agreement, all agreements
and commitments, whether written, oral or otherwise, which are solely between
the Company or the Company Subsidiary, on the one hand, and Parent and its
Affiliates (excluding the Company and the Company Subsidiary), on the other
hand, shall be terminated and of no further effect, simultaneously with the
Closing without any further action or liability on the part of the parties
thereto.
SECTION 5.14. PUBLICITY.
Neither Parent nor Purchaser shall issue or cause the publication of any press
release or other public announcement with respect to this Agreement or the
Transactions, or otherwise disclose to any party the Purchase Price or financial
or other terms of the Agreement or the Transactions, without the prior written
consent of the other party; provided, however, that to the extent a party is
advised by counsel that disclosure of the matters set forth in this Agreement is
required by applicable securities laws or by Nasdaq requirements, then such
party (the "DISCLOSING PARTY") may make such disclosure as is required but
agrees to use commercially reasonable efforts to provide the other party (the
"NON-DISCLOSING PARTY") as much prior notice of such disclosure as is
practicable as well as an opportunity to review and comment on such disclosure
in advance of public release.
SECTION 6.15. FURTHER ASSURANCES; POST-CLOSING LITIGATION SUPPORT.
(a) If at any time after the Closing, any further assignments,
conveyances, transfers or assurances in law, or any other actions or things, may
be reasonably necessary to transfer, assign, convey or deliver to, or to vest,
perfect or confirm in (i) the Company, any right, title or interest of Sellers
in or to any assets or properties sold to Purchaser hereunder, or (ii) Purchaser
any right, title or interest of Sellers, of record or otherwise, in or to the
Shares then, in either such case, Sellers, at their sole cost and expense, shall
use their commercially reasonable efforts to promptly execute, deliver and
record, or cause to be executed, delivered and recorded, any and all such
further instruments of assignment, conveyance and transfer and take, or cause to
be taken, all actions and do, or cause to be done, all things, as may be
reasonably requested by Purchaser to transfer, assign, convey or deliver the
same to, or to vest, perfect or confirm the same in, the Company, or Purchaser,
as applicable.
(b) In the event and for so long as any party actively is contesting or
defending against any action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand in connection with (i) any Transactions, or (ii) any
fact, situation, circumstance, status, condition, activity, practice plan,
occurrence, event, incident, action, failure to act on or prior to the Closing
Date involving the Company or the Company Subsidiary, each of the other parties
will reasonably cooperate with him or it and him or its counsel in the contest
or defense, make available their personnel, and provide such testimony and
access to their books and records as shall be reasonably necessary in connection
with the contest or defense, all at the sole cost or expense of the contesting
or defending party (unless the contesting or defending party is entitled to
indemnification therefor under Article 8 below).
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SECTION 5.16. POST CLOSING SETTLEMENTS.
(a) Sellers agree that from and after the Closing Date, they will hold
and will promptly transfer and deliver to the Company, from time to time as and
when received by Sellers, any cash, checks with appropriate endorsements or
other property that it may receive on or after the Closing Date which properly
belongs to the Company, and will account to the Company for all such receipts.
(b) Purchaser agrees that from and after the Closing Date, it will hold
and will promptly transfer and deliver to Parent, from time to time as and when
received by Purchaser or the Company, any cash, checks with appropriate
endorsements or other property that it may receive on or after the Closing Date
which properly belongs to Parent, and will account to Parent for all such
receipts.
SECTION 5.17. UPDATE OF SELLER DISCLOSURE SCHEDULE.
Sellers may, from time to time after the date hereof but not later than five (5)
days before the Closing Date, prepare and deliver to Purchaser updates to the
Seller Disclosure Schedule disclosing any changes thereto required in respect of
events occurring subsequent to the date hereof which were permitted by the terms
and conditions of this Agreement. In the event the Closing does not occur, the
initial Seller Disclosure Schedule shall constitute the Seller Disclosure
Schedule to be used in determining any inaccuracy in, or breach of, any
representations or warranties of Sellers. In the event the Closing occurs, the
final updated version of the Seller Disclosure Schedule as of the Closing Date
shall supersede the initial Seller Disclosure Schedule and shall constitute the
definitive Seller Disclosure Schedule.
SECTION 5.18. NONCOMPETITION; NON-SOLICITATION.
(a) In consideration of the payments described in Section 1.2 of this
Agreement, Sellers agree that, during the period commencing on the Closing Date
and ending on the earlier of (i) the third (3rd) anniversary of the Closing Date
and (ii) the consummation of a Parent Change of Control, neither Sellers nor any
of their Subsidiaries shall, directly or indirectly, (A) establish or enter
into, advise, consult with or become an owner in part of, any Person that
engages in any business, or in any way engage in any business (either as
principal or as a shareholder, owner, partner, joint venturer, consultant,
advisor or representative of any Person), that competes with the Purchased
Business, or (B) solicit any Person that is a customer of or vendor to the
Company or the Company Subsidiary (other than through general advertising) in a
manner that is reasonably likely to cause such Person to reduce its business
transactions with the Company or the Company Subsidiary or otherwise adversely
interfere with the conduct of the Purchased Business. It is understood and
agreed that the passive ownership of not more than five percent (5%) of the
stock or other equity interests of a public company shall not constitute a
violation of this Section 5.18(a).
(b) Each Seller agrees that, during the period commencing on the date
of this Agreement and ending on the first (1st) anniversary of the Closing Date,
neither it nor any of its Subsidiaries shall employ (except as a Company
Employee) any person who is an employee of the Company, the Company Subsidiary
or the
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Purchased Business, unless such person's employment has been terminated for a
period of at least six (6) months. In addition, each Seller agrees that, during
the period commencing on the date of this Agreement and ending on the second
(2nd) anniversary of the Closing Date, neither it nor any of its Subsidiaries
shall solicit for employment any person who is an employee of the Company, the
Company Subsidiary or the Purchased Business, unless such person's employment
has been terminated for a period of at least six (6) months; provided, however,
that non-directed newspaper or internet help wanted advertisements shall not be
considered solicitations under this Section 5.18(b). Notwithstanding the
foregoing, this Section 5.18(b) shall not apply with respect to the Company
Employees listed on Exhibit E.
(c) Sellers expressly acknowledge and agree that each and
every restraint imposed by this Agreement is reasonable with respect to subject
matter, time period and geographical area. If, at the time of enforcement of any
provision of this Section 5.18, a court shall hold that the duration, scope or
area restrictions stated herein are unreasonable under the circumstances then
existing, Purchaser and Sellers hereby agree that the maximum duration, scope or
area reasonable under such circumstances shall be substituted for the stated
duration, scope or area and that the court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and area
permitted by law. Sellers also hereby agree that money damages would not be an
adequate remedy for any breach of this Section 5.18. Therefore, in the event of
a breach or threatened breach of this Section 5.18, Purchaser or its successors
or assigns may, in addition to other rights and remedies existing in their
favor, obtain from any court of competent jurisdiction specific performance or
injunctive or other equitable relief in order to enforce or prevent any
violations of the provisions hereof (without posting a bond or other security).
SECTION 5.19. TRANSITION SERVICES.
Except as set forth in the Transition Services Agreement, or as otherwise agreed
to in writing by Parent and Purchaser, all data processing, accounting,
insurance, banking, personnel, legal, telecommunications and other products and
services provided to the Company by Parent or any Affiliate of Parent, including
any agreements or understandings (written or oral) with respect thereto, shall
terminate simultaneously with the Closing without any further action or
liability on the part of the parties thereto. Except as set forth in the
Transition Services Agreement, in the absence of any other written agreement,
the provision of any services (similar to those contemplated by the preceding
sentence) by Parent to the Company from and after the Closing shall be for the
convenience, and at the expense, of Purchaser only and shall be furnished
without any liability on the part of Parent with respect thereto.
SECTION 6.20. AUDITED FINANCIAL STATEMENTS.
(a) Promptly following the execution of this Agreement, the Company and
Sellers shall and shall use their commercially reasonable efforts to cause the
Company Auditors to, at Purchaser's expense (except the amount by which such
expenses exceed $250,000, which amount shall be Parent's expense), commence
diligent preparation of financial statements of the Purchased Business and
related documents that meet the requirements of Item 7(a) of SEC Form 8-K,
including the following documents:
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(i) financial statements of the Purchased Business for the
periods specified in Rule 3-05(b) of Regulation S-X promulgated by the SEC,
which shall be prepared pursuant to Regulation S-X, except that supporting
schedules need not be prepared;
(ii) a manually signed accountants' report from the Company
Auditors meeting the requirements of Section 2-02 of Regulation S-X; and
(iii) a manually signed consent of the Company Auditors to the
inclusion of all financial statements prepared pursuant to Section 5.20(a)(i)
and the Company Auditors' report thereon referred to in Section 5.20(a)(ii).
(b) Following execution of this Agreement and prior to Closing, the
Company shall commence diligent preparation of, and shall use its commercially
reasonable efforts cause the Company Auditors to commence diligent preparation
of, at Purchaser's expense, such additional financial information regarding the
Company, prepared on a basis consistent with the financial statements prepared
pursuant to Section 5.20(a)(i), as Purchaser may reasonably request in order to
prepare the pro forma financial information required by Item 7(b) of SEC Form
8-K.
(c) Each of the Sellers shall cooperate with, and provide all
information and documents reasonably requested by, the Company and the Company
Auditors in the preparation of the financial statements and related documents
and information to be prepared pursuant to this Section 5.20, and shall use
reasonable efforts, at Purchaser's expense, to enable the Company Auditors to
furnish such financial statements, documents and information required pursuant
to this Section 5.20 to Purchaser as soon as possible, and in any event no later
than thirty (30) days following the Closing Date.
SECTION 5.21. ANCILLARY AGREEMENTS.
(a) Seller and Purchaser shall cooperate in good faith to finalize the
terms of the Sublease Agreements, which shall be substantially in the forms
attached as Exhibit A hereto, and to execute the Sublease Agreements as soon as
practicable after the date hereof.
(b) Seller and Purchaser shall cooperate in good faith to agree on the
terms of and execute a Transition Services Agreement prior to Closing.
(c) Seller and Purchaser shall cooperate in good faith to agree on the
terms of and execute an Intellectual Property License Agreement prior to
Closing.
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ARTICLE 6.
CONDITIONS
SECTION 6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE CLOSING.
The respective obligation of each party to effect the Closing shall be subject
to the satisfaction at or prior to the Closing Date of each of the following
conditions:
(a) Statutes; Court Orders. No statute, rule or regulation shall have
been enacted or promulgated by any Governmental Entity which prohibits the
consummation of the Closing; and there shall be no order of a court of competent
jurisdiction in effect precluding consummation of the Closing; provided,
however, that the parties shall use their commercially reasonable efforts to
have any such order or injunction vacated or lifted.
(b) Antitrust Regulation Approval. The applicable waiting period under
the HSR Act shall have expired or been terminated.
(c) Governmental Consents. All material consents of any Governmental
Entity, and all material filings with and material notifications of Governmental
Entities, necessary to the execution and delivery of this Agreement and the
consummation of the Transactions and to permit the continued operation of the
Purchased Business in substantially the same manner after the Closing Date as
theretofore conducted, shall have been obtained or effected.
SECTION 6.2. CONDITIONS TO OBLIGATIONS OF PURCHASER TO EFFECT THE CLOSING.
The obligations of Purchaser to consummate the Closing shall be subject to the
satisfaction on or prior to the Closing Date of each of the following conditions
(any one or more of which may be waived, in whole or in part, by Purchaser in
its sole discretion):
(a) Government Action. There shall not be pending any suit, action or
proceeding by any Governmental Entity seeking to restrain or prohibit the
consummation of the Closing or the performance of any of the other Transactions
or seeking to obtain from Purchaser any damages that are material in relation to
the Purchased Business.
(b) Covenants. Sellers and the Company shall have performed or
satisfied in all material respects the covenants and agreements required by this
Agreement to be performed or satisfied by them at or prior to the Closing.
(c) Representations and Warranties. Each representation and warranty of
Sellers contained in this Agreement (i) that is qualified by the phrase
"Material Adverse Effect" shall have been true and correct as of the date of
this Agreement and shall be true and correct as of the Closing Date with the
same force and effect as if made on the Closing Date, and (ii) that is not
qualified by the phrase "Material
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Adverse Effect" shall have been true and correct as of the date of this
Agreement and shall be true and correct as of the Closing Date with the same
force and effect as if made on the Closing Date; except (A) with respect to the
preceding clause (ii), for failures to be true and correct that do not
constitute a Material Adverse Effect (other than the representations and
warranties that are not qualified by the phrase "Material Adverse Effect"
contained in Sections 3.1, 3.2, 3.3, 3.5, 3.7(a), 3.8, which shall be true and
correct in all material respects), (B) for changes contemplated by this
Agreement and (C) for those representations and warranties which address matters
only as of a particular date (which representations shall have been true and
correct (subject to the qualifications as set forth in the preceding clause (A)
as of such particular date).
(d) Compliance Certificate. A duly authorized officer of Sellers shall
have delivered to Purchaser at the Closing a certificate stating that the
conditions specified in Section 6.2(b) and 6.2(c) have been fulfilled.
(e) No Material Adverse Effect. Since the date of this Agreement, there
shall not have been a Material Adverse Effect that is continuing.
(f) Opinion of Counsel. Parent shall have delivered to Purchaser an
opinion, dated the Closing Date, of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation, counsel to Parent, in substantially the form attached
as Exhibit D.
(g) Company Funds. The Company and the Company Subsidiary shall have
sufficient cash on hand to cover the amount held on behalf of merchants pending
disbursement or held in reserve for eCheck and Integrated Payment Solution
related transactions as of the Closing Date.
(h) Other Transaction Documents. Parent shall have executed and
delivered to Purchaser the Sublease Agreements (which shall have been consented
to by the owners of the property subject thereto), the Intellectual Property
License Agreement and the Transition Services Agreement.
(i) Transfer of IP and Assets. Sellers and their Affiliates shall have
effected the transfer of IP contemplated by Section 5.4(c) and the transfer of
tangible assets contemplated by Section 5.4(d).
(j) Consents. The Company shall obtain consents under the contracts
listed on Section 6.2(j) of the Seller Disclosure Schedule to the consummation
of the transactions contemplated by this Agreement.
SECTION 6.3. CONDITIONS TO OBLIGATIONS OF SELLERS TO EFFECT THE CLOSING.
The obligations of Sellers to consummate the Closing shall be subject to the
satisfaction on or prior to the Closing Date of each of the following conditions
(any one or more of which may be waived, in whole or in part, by Sellers in
their sole discretion):
(a) Government Action. There shall not be pending any suit, action or
proceeding by any Governmental Entity seeking to restrain or prohibit the
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consummation of the Closing or the performance of any of the other Transactions
or seeking to obtain from Sellers any damages that are material in relation to
the Purchased Business.
(b) Covenants. Purchaser shall have performed or satisfied in all
material respects the covenants and agreements required by this Agreement to be
performed or satisfied by it at or prior to the Closing.
(c) Representations and Warranties; No Impairment. Each representation
and warranty of Purchaser contained in this Agreement (i) shall have been true
and correct as of the date of this Agreement and (ii) shall be true and correct
as of the Closing Date with the same force and effect as if made on the Closing
Date; except (A) for failures to be true and correct that do not impair the
ability of Purchaser to either perform its material obligations under the
Transaction Documents or consummate the Transactions, (B) for changes
contemplated by this Agreement and (C) for those representations and warranties
which address matters only as of a particular date other than the date of this
Agreement (which representations shall have been true and correct (subject to
the qualifications as set forth in the preceding clause (A)) as of such
particular date).
(d) Compliance Certificate. A duly authorized officer of Purchaser
shall have delivered to Sellers at the Closing a certificate stating that the
conditions specified in Section 6.3(b) and 6.3(c) have been fulfilled.
(e) Other Transaction Documents. Purchaser shall have executed and
delivered to Parent the Sublease Agreements and the Transition Services
Agreement.
ARTICLE 7.
TERMINATION
SECTION 7.1. TERMINATION.
The Transactions may be terminated or abandoned at any time prior to the Closing
Date:
(a) by mutual written consent of Purchaser and Parent;
(b) by either Parent or Purchaser if the Closing shall not have been
consummated by April 30, 2004 for any reason; provided, however, that the right
to terminate this Agreement under this Section 7.1(b) shall not be available to
any party whose action or failure to act has been the principal cause of or
resulted in the failure of the Closing to occur on or before such date and such
action or failure to act constitutes a breach of this Agreement;
(c) by either Parent or Purchaser if a Governmental Entity shall have
issued an order, decree or ruling or taken any other action, in any case having
the effect of
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permanently restraining, enjoining or otherwise prohibiting the Transactions,
which order, decree, ruling or other action is final and nonappealable;
(d) by Parent, upon a breach of any representation, warranty, covenant
or agreement on the part of Purchaser set forth in this Agreement, or if any
representation or warranty of Purchaser shall be or have become untrue, in
either case such that the conditions set forth in Section 6.3(b) or 6.3(c) would
not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if such
inaccuracy in Purchaser's representations and warranties or breach by Purchaser
is curable by Purchaser through the exercise of its commercially reasonable
efforts, then Parent may not terminate this Agreement under this Section 7.1(d)
for thirty (30) days after delivery of written notice from Parent to Purchaser
of such breach, provided Purchaser continues to exercise commercially reasonable
efforts to cure such breach (it being understood that Parent may not terminate
this Agreement pursuant to this Section 7.1(d) if such breach by Purchaser is
cured during such thirty (30) day period); or
(e) by Purchaser, upon a breach of any representation, warranty,
covenant or agreement on the part of Sellers set forth in this Agreement, or if
any representation or warranty of Sellers shall be or have become untrue, in
either case such that the conditions set forth in Section 6.2(b) or 6.2(c) would
not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if such
inaccuracy in Sellers' representations and warranties or breach by Sellers is
curable by Sellers through the exercise of their commercially reasonable
efforts, then Purchaser may not terminate this Agreement under this Section
7.1(e) for thirty (30) days after delivery of written notice from Purchaser to
Sellers of such breach, provided Sellers continue to exercise commercially
reasonable efforts to cure such breach (it being understood that Purchaser may
not terminate this Agreement pursuant to this Section 7.1(e) if such breach by
Sellers is cured during such thirty (30) day period).
SECTION 7.2. NOTICE OF TERMINATION; EFFECT OF TERMINATION.
Any termination of this Agreement under Section 7.1 above will be
effective immediately upon the delivery of written notice of the terminating
party to the other parties hereto (or, if the termination is pursuant to Section
7.1(d) or 7.1(e) and the cure period proviso therein is applicable, immediately
after such thirty (30) day cure period). In the event of the termination of this
Agreement as provided in Section 7.1, this Agreement shall be of no further
force or effect, except (i) as set forth in this Section 7.2 and Article 9 and
Article 10, each of which shall survive the termination of this Agreement, and
(ii) nothing herein shall relieve any party from liability for fraud or any
willful breach of this Agreement on or prior to the date of termination. No
termination of this Agreement shall affect the obligations of the parties
contained in the Confidentiality Agreement, all of which obligations shall
survive termination of
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this Agreement in accordance with their terms. No party shall have any liability
to any other in connection with the termination of this Agreement in the event
that such termination is effected pursuant to Sections 7.1(a) or 7.1(c) in the
absence of fraud or willful breach of this Agreement.
ARTICLE 8.
REMEDIES
SECTION 8.1. SURVIVAL OF REPRESENTATIONS.
The representations and warranties of the parties contained in this Agreement
shall, regardless of any investigation made at any time by or on behalf of any
party hereto or of any information any party may have in respect thereof,
survive the Closing Date and continue in effect for a period of (and claims
based upon or arising out of such representations and warranties may be asserted
at any time before the date which shall be) twelve (12) months after the Closing
Date, except for representations and warranties contained in Sections 3.5, 3.6,
3.20 and 3.25, which shall survive until the expiration of the applicable
statute of limitations, taking into account any waivers or extensions of time.
The termination of representations and warranties provided herein shall not
affect the rights of an Indemnified Party in respect of any claim made by such
an Indemnified Party in a Claim Notice received by the other party pursuant to
and in compliance with the provisions of this Article 8 prior to the expiration
date of the applicable representation or warranty as specified above. All
covenants and agreements that by their terms are to be performed after the
Closing shall expire upon the completion of performance or waiver thereof.
SECTION 8.2. INDEMNIFICATION BY PARENT
Subject in all cases to the limitations set forth in this Article 8
(including, without limitation, the limitations set forth in Section 8.6),
Parent shall indemnify, save and hold harmless Purchaser and its Affiliates
(including, after the Closing, the Company and the Company Subsidiary) from and
against and in respect of all Losses arising out of or resulting from:
(a) any breach of, or inaccuracy in, any representation or warranty
contained in Article 3 of this Agreement or the compliance certificate to be
delivered by Sellers pursuant to Section 6.2(d);
(b) any breach or failure to perform by Sellers or the Company of any
covenant, agreement or obligation of Sellers or the Company contained in this
Agreement;
(c) any liabilities for Taxes to be paid by the Company pursuant to
Section 8.9 below; and
(d) the litigation matters described on Exhibit B, and any other claim,
action or proceeding based upon or related to the facts that are the subject
matter of such litigations matters (the "EXCLUDED CLAIMS").
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SECTION 8.3. INDEMNIFICATION BY PURCHASER
Subject to the limitations set forth in this Article 8, Purchaser shall
indemnify, save and hold harmless Parent and its Affiliates from and against and
in respect of all Losses arising out of or resulting from:
(a) any breach of, or inaccuracy in, any representation or warranty
contained in Article 4 of this Agreement or the compliance certificate to be
delivered by Purchaser pursuant to Section 6.3(d);
(b) any breach or failure to perform by Purchaser of any covenant,
agreement or obligation of Purchaser contained in this Agreement;
(c) any liabilities for Taxes to be paid by Purchaser pursuant to
Section 8.9 below; and
(d) the litigation matter described on Exhibit C and any other claim,
action or proceeding based upon or related to the facts that are the subject
matter of such litigation matter, subject to the terms and conditions set forth
on Exhibit C.
SECTION 8.4. PROCEDURE FOR CLAIMS BETWEEN PARTIES
If a claim for Damages is to be made by a Person entitled to indemnification
hereunder (an "INDEMNIFIED PARTY"), the Indemnified Party shall give written
notice (a "CLAIM NOTICE") to the Party required to provide such indemnification
(the "INDEMNIFYING PARTY") as soon as practicable (and in any event within five
(5) business days) after the Indemnified Party becomes aware of any fact,
condition or event which may give rise to Losses for which indemnification may
be sought under this Article 8, other than Tax Claims as provided in Section 8.9
below. Any failure to submit any such notice of claim in a timely manner to the
Indemnifying Party shall not relieve the Indemnifying Party of any liability
hereunder, except to the extent the Indemnifying Party is actually prejudiced by
such failure. Each Claim Notice shall set forth (i) the specific representation,
warranty or covenant alleged to have been breached, (ii) the nature and amount
of the claim asserted, together with sufficient facts relating thereto so that
the Indemnifying Party may reasonably evaluate such claim and (iii) a
calculation or good faith estimate, if such can be reasonably calculated, of the
aggregate Losses to which the Indemnified Party believes it is entitled in
connection with the claim. If the Indemnifying Party, within twenty (20)
business days after receipt of the Claim Notice, does not give written notice to
the Indemnified Party or parties announcing its intent to contest such claim,
the claim shall be deemed accepted and the amount of the claim shall be deemed a
valid claim, and the Indemnifying Party shall, within ten (10) business days
after expiration of the prior notice period, deliver to the Indemnified Party
the amount of the Losses with respect to the claim. In the event, however, that
the Indemnifying Party or parties contest the assertion of a claim by giving
such written notice to the Indemnified Party within said period, then the
parties shall act in good faith to reach agreement regarding such claim.
Notwithstanding the foregoing, however, (a) Purchaser and its Affiliates shall
not be required to deliver any Claim Notice or any notice pursuant to Section
8.5, and Parent shall not be entitled to contest its indemnification liability,
in respect of the Excluded Claims, and (b) Parent and its Affiliates shall not
be required to deliver any Claim Notice or any notice pursuant to Section 8.5,
and Purchaser shall not be entitled to contest its indemnification liability, in
respect of the matter disclosed on Exhibit C.
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SECTION 8.5. DEFENSE OF THIRD PARTY CLAIMS.
If any lawsuit or enforcement action is filed against any Indemnified Party by a
third party, written notice thereof shall be given to the Indemnifying Party as
promptly as practicable (and in any event within five (5) calendar days after
the service of the citation or summons), other than Tax Claims as provided in
Section 8.9. The failure of any Indemnified Party to give timely notice
hereunder shall not affect rights to indemnification hereunder, except to the
extent that the Indemnifying Party is actually prejudiced by such failure. After
such notice, the Indemnifying Party shall be entitled, if it so elects at its
own cost, risk and expense, (i) to take control of the defense and investigation
of such lawsuit or action, (ii) to employ and engage attorneys of its own choice
to handle and defend the same unless the named parties to such action or
proceeding include both the Indemnifying Party and the Indemnified Party and the
Indemnified Party has been advised in writing by counsel that there may be one
or more legal defenses available to such Indemnified Party that are different
from or additional to those available to the Indemnifying Party, in which event
the Indemnified Party shall be entitled, at the Indemnifying Party's cost, risk
and expense, to separate counsel of its own choosing, and (iii) to compromise or
settle such claim, which compromise or settlement shall be made only with the
written consent of the Indemnified Party, such consent not to be unreasonably
withheld. The Indemnified Party shall cooperate with the Indemnifying Party and
its attorneys in the investigation, trial and defense of such lawsuit or action
and any appeal arising therefrom which cooperation shall include, to the extent
reasonably requested by the Indemnifying Party, the retention, and the provision
to the Indemnifying Party, of records and information reasonably relevant to
such third-party claim, and making employees of the Indemnified Party and its
Affiliates available on a mutually convenient basis to provide additional
information and explanation of any materials provided hereunder. The parties
shall cooperate with each other in any notifications to insurers. If the
Indemnifying Party fails to assume the defense of such claim within fifteen (15)
calendar days after receipt of the notice of claim, the Indemnified Party
against which such claim has been asserted will (upon delivering notice to such
effect to the Indemnifying Party) have the right to undertake, at the
Indemnifying Party's cost, risk and expense, the defense, compromise or
settlement of such claim on behalf of and for the account and risk of the
Indemnifying Party; provided, however, that such claim shall not be compromised
or settled without the written consent of the Indemnifying Party, such consent
not to be unreasonably withheld. If the Indemnified Party assumes the defense of
the claim, the Indemnified Party will keep the Indemnifying Party reasonably
informed of the progress of any such defense, compromise or settlement. The
Indemnifying Party shall be liable for any settlement of any action effected
pursuant to and in accordance with this Section 8.5 and for any final judgment
(subject to any right of appeal), and the Indemnifying Party shall indemnify and
hold harmless an Indemnified Party from and against any Losses by reason of such
settlement or judgment. No Indemnified Party shall take any action the purpose
of which is to prejudice the defense of any claim subject to indemnification
hereunder or to induce a third party to assert a claim subject to
indemnification hereunder. Notwithstanding anything in this Agreement to the
contrary, (A) Purchaser shall control the defense of the litigation matter set
forth on Exhibit C, provided that such litigation shall not be compromised or
settled without the written consent of the Parent (such consent not to be
unreasonably withheld), and (B) Parent shall control the defense of the Excluded
Claims.
SECTION 8.6. LIMITATIONS.
(a) Purchaser and its Affiliates shall not be entitled to recover for
any Losses until such time as the Losses in the aggregate to which Purchaser and
its Affiliates are entitled to be indemnified hereunder exceed $250,000 (the
"PURCHASER LOSS THRESHOLD"), at which time Purchaser shall be entitled to be
indemnified against and compensated and reimbursed for all such Losses,
including the amount of the
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Purchaser Loss Threshold. In determining the amount of Losses for which the
Purchaser or its Affiliates are entitled to be indemnified by Parent pursuant to
Section 8.2(a) for a breach of, or inaccuracy in, any representation or warranty
(but not for determining whether a breach of any representation or warranty has
occurred or an inaccuracy in any representation or warranty exists), any
materiality or Material Adverse Effect standard contained in the applicable
representation or warranty shall be disregarded. In no event shall Parent's
actual cumulative liability for Losses in connection with the Transactions
exceed ten percent (10%) of the Purchase Price; provided, however, that the
foregoing limitations set forth in this Section 8.6(a) shall not apply to Losses
that are recoverable pursuant to Parent's indemnification obligations under
Section 8.2(d). Each Loss for which Purchaser or its Affiliates is entitled to
recovery shall be reduced by (i) the amount of any insurance proceeds to which
Purchaser or its Affiliates is entitled with respect to such Loss and (ii) any
indemnity, contribution or other similar payment that Purchaser or its
Affiliates receives from any third party with respect to such Loss.
(b) If Purchaser receives any payment from Parent in respect of any
Losses pursuant to Section 8.2 and Purchaser could have recovered all or a part
of such Losses from a third party (a "POTENTIAL CONTRIBUTOR") based on the
underlying Claim, Purchaser shall, to the extent permitted by applicable Legal
Requirement and any contractual provision, assign such of its rights to proceed
against the Potential Contributor as are necessary to permit Parent to recover
from the Potential Contributor the amount of such payment.
(c) Parent and its Affiliates shall not be entitled to recover for any
Losses until such time as the Losses in the aggregate to which Parent and its
Affiliates are entitled to be indemnified hereunder exceed $250,000 (the "SELLER
LOSS THRESHOLD"), at which time Parent shall be entitled to be indemnified
against and compensated and reimbursed for all such Losses, including the amount
of the Seller Loss Threshold; provided, however, that the foregoing limitation
set forth in this Section 8.6(c) shall not apply to Losses that are recoverable
pursuant to Purchaser's indemnification obligations under Section 8.3(d). In
determining the amount of Losses for which the Seller or its Affiliates are
entitled to be indemnified by Purchaser pursuant to Section 8.3(a) for a breach
of, or inaccuracy in, any representation or warranty (but not for determining
whether a breach of any representation or warranty has occurred or an inaccuracy
in any representation or warranty exists), any materiality or Material Adverse
Effect standard contained in the applicable representation or warranty shall be
disregarded. In no event shall Purchaser's actual cumulative liability for
Losses in connection with the Transactions exceed ten percent 10% of the
Purchase Price. Each Loss for which Parent or its Affiliates is entitled to
recovery shall be reduced by (i) the amount of any insurance proceeds to which
Parent or its Affiliates is entitled with respect to such Loss and (ii) any
indemnity, contribution or other similar payment that Parent or its Affiliates
receives from any third party with respect to such Loss .
(d) Notwithstanding any other provision of this Agreement to the
contrary, in no event shall Losses include a party's incidental or consequential
damages or special or punitive damages to such party.
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SECTION 8.7. NO DUPLICATION; EXCLUSIVE REMEDY.
(a) Any liability for indemnification hereunder shall be determined
without duplication of recovery by reason of the state of facts giving rise to
such liability constituting a breach of more than one representation, warranty,
covenant or agreement.
(b) Purchaser and Parent hereby acknowledge and agree that, from and
after the Closing, their sole remedy with respect to any and all claims arising
in connection with the Transactions (other than with respect to fraud or willful
breach) shall be pursuant to the indemnification provisions set forth in this
Article 8.
SECTION 8.8. NO ADDITIONAL REPRESENTATIONS OR WARRANTIES.
Purchaser acknowledges that, should the Closing occur, except as
expressly set forth in the representations and warranties set forth in Article 3
or elsewhere in this Agreement or the schedules, certificates or other
Transaction Documents delivered pursuant to this Agreement, there are no
representations or warranties by Sellers or the Company of any kind, express or
implied, with respect to the Company or the Purchased Business.
SECTION 8.9. TAX CLAIMS.
(a) Parent Tax Indemnity. Parent shall indemnify and hold Purchaser and
its Affiliates harmless from and against the following (net of the amount of the
net present value of any Tax Benefits actually realized by Purchaser or its
Affiliates (including the Company and the Company Subsidiary), provided that
Purchaser shall and shall cause its Affiliates to use reasonable best efforts to
maximize the utility of any deductible item, as a result of the payment or
accrual of any of the following):
(i) any liability for income Taxes imposed on the Company or
the Company Subsidiary as a member of the Affiliated Group of which Parent (or
any predecessor or successor) is the common parent that arises under Treasury
Regulation Section 1.1502-6(a) or comparable provisions of foreign, state or
local law; and
(ii) any liability for Taxes imposed on the Company or the
Company Subsidiary, or for which the Company or the Company Subsidiary may
otherwise be liable, for any taxable year or period that ends on or before the
Closing Date and, with respect to any Straddle Period, the portion of such
Straddle Period deemed to end on and include the Closing Date.
(iii) any and all Taxes of any person (other than the Company
and the Company Subsidiary) imposed on the Company or the Company Subsidiary, as
a transferee or successor, by contract or pursuant to any law, rule, or
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regulation which Taxes relate to an event or transaction occurring before the
Closing.
(b) Purchaser Tax Indemnity. Purchaser shall indemnify and hold Parent
and its Affiliates harmless from and against the payment or accrual of Taxes
imposed on the Company or the Company Subsidiary for any taxable year or period
that begins after the Closing Date and, with respect to any Straddle Period, the
portion of such Straddle Period beginning after the Closing Date.
(c) Procedure for Tax Claims. Each party hereto shall notify the chief
tax officer of the other party in writing within fifteen (15) days following
receipt by such party of written notice of any pending or threatened audits,
notice of deficiency, proposed adjustment, assessment, examination or other
administrative or court proceeding, suit, dispute or other claim which could
affect the liability for Taxes of such other party. The failure of any
Indemnified Party to give timely notice of a Tax Claim hereunder shall not
affect rights to indemnification hereunder, except to the extent that the
Indemnifying Party is actually prejudiced by such failure. Parent shall have the
right, at its sole discretion, to represent the interests of the Company and the
Company Subsidiary in any Tax Claim relating to taxable periods ending on or
before the Closing Date and to employ counsel of its choice. In the case of a
Straddle Period, Parent shall be entitled to participate at in any Tax Claim
relating in any part to Taxes attributable to the portion of such Straddle
Period deemed to end on or before the Closing Date and, at Parent's sole
discretion, may assume the control of such Tax Claim. None of Purchaser, any of
its Affiliates, the Company or the Company Subsidiary may settle or otherwise
dispose of any Tax Claim for which Parent may have a liability under this
Agreement without the prior written consent of Parent, which consent may be
withheld in the reasonable discretion of Parent, unless Purchaser fully
indemnifies Parent in writing with respect to such liability. If Parent elects
not to participate in and/or control a Tax Claim that it is entitled to
participate in and/or control under this Section 8.9(c), then Purchaser shall
control, at Purchaser's sole expense, such Tax Claim, provider, however, that
(i) Purchaser shall keep Parent informed of all developments related to such Tax
Claim on a timely basis and shall, in good faith, (A) afford Parent the
opportunity to review any submissions related to such Tax Claim and (B) provide
Parent with final copies of all such submissions, and (ii) Purchaser shall not
resolve such Tax Claim without Parent's written consent, which consent shall not
be unreasonably delayed, conditioned or withheld.
(d) Resolution of All Tax-Related Disputes. If Parent and Purchaser
cannot agree on the calculation of any amount relating to Taxes or the
interpretation or application of any provision of this Agreement relating to
Taxes, such dispute shall be resolved by a nationally recognized accounting firm
mutually acceptable to each of Parent and Purchaser, whose decision shall be
final and binding upon all persons involved and whose expenses shall be shared
equally by Parent and Purchaser.
SECTION 8.10. TAX EFFECT OF INDEMNIFICATION PAYMENTS.
All indemnity payments made by Parent to Purchaser or any of its Affiliates
pursuant to this Agreement shall be treated for all Tax purposes as adjustments
to the consideration paid with
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respect to the Shares.
ARTICLE 9.
DEFINITIONS AND INTERPRETATION
SECTION 9.1. DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly provided or
unless the context clearly requires otherwise:
"ACQUISITION PROPOSAL" shall have the meaning set forth in Section 5.5.
"AFFILIATE" shall have the meaning set forth in Rule 12b-2 of the Exchange Act
and shall also include, with respect to any person, any Subsidiary of such
Person.
"AFFILIATED GROUP" shall mean any affiliated group within the meaning of Code
Section 1504(a) or any similar group defined under a similar provision of state,
local, or foreign law.
"AGREEMENT" or "THIS AGREEMENT" shall mean this Stock Sale Agreement, together
with the Exhibits hereto, including the Seller Disclosure Schedule.
"ALLOCATION SCHEDULE" shall have the meaning set forth in Section 5.6(e).
"BALANCE SHEET" shall mean the unaudited consolidated balance sheet of the
Purchased Business at December 31, 2003.
"BALANCE SHEET DATE" shall mean December 31, 2003.
"BASIC PURCHASE PRICE" shall have the meaning set forth in Section 1.2.
"CLAIM NOTICE" shall have the meaning set forth in Section 8.4.
"CLOSING" shall have the meaning set forth in Section 2.1.
"CLOSING BALANCE SHEET" shall have the meaning set forth in Section 2.4(a).
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CLOSING WORKING CAPITAL AMOUNT" shall have the meaning set forth in Section
2.4(a).
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended.
"COBRA CONTINUATION COVERAGE" shall have the meaning set forth in Section
5.7(e).
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMPANY" shall mean Xxxxxxxxx.xxx Corporation, a Delaware corporation.
"COMPANY AUDITORS" shall mean Deloitte & Touche, LLP.
"COMPANY EMPLOYEES" shall mean all those individuals that are either (i)
employees of Sellers engaged primarily in the conduct of the business of the
Company or the Company Subsidiary or (ii) employees of the Company or the
Company Subsidiary.
"COMPANY IP" means (i) IP owned exclusively by the Company, (ii) IP owned
exclusively by the Company Subsidiary, (iii) IP jointly owned by the Company and
the Company Subsidiary but not owned by any other Person, and (iv) IP owned by
Sellers or their Affiliates to be transferred to the Company pursuant to Section
5.4(c).
"COMPANY LICENSES" shall have the meaning set forth in Section 3.21(c).
"COMPANY PERMITS" shall have the meaning set forth in Section 3.18(b).
"COMPANY SUBSIDIARY" shall mean the entity set forth on Section 3.8(a) of the
Seller Disclosure Schedule.
"CONFIDENTIALITY AGREEMENT" shall have the meaning set forth in Section 5.3.
"CONTRACT" means, with respect to any Person, any legally binding contract,
agreement, plan, arrangement or understanding to which such Person is a party or
by which such Person or such Person's properties or assets are or may be bound,
including real and personal property leases.
"DISCLOSING PARTY" shall have the meaning set forth in Section 5.14.
"DOJ" shall mean the Antitrust Division of the United States Department of
Justice.
"DUE DATE" shall mean, with respect to any Tax Return, the date such return is
due to be filed
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(taking into account any valid extensions).
"ENCUMBRANCES" shall mean restrictions on title or transfer, including but not
limited to, liens, charges, security interests, options, claims, mortgages,
pledges, proxies, voting trusts or agreements, or similar obligations,
understandings or encumbrances of any kind.
"ENFORCEABILITY LIMITATIONS" shall have the meaning set forth in Section 3.3.
"ENVIRONMENTAL CLAIMS" shall mean any and all administrative, regulatory or
judicial actions, suits, demand letters, claims, liens or written notices of
violation of or of liability arising under any Environmental Law relating to the
Company, the Company Subsidiary or the Purchased Business.
"ENVIRONMENTAL LAWS" shall mean any applicable federal, foreign, state, local or
municipal statute, law, rule, regulation, ordinance or code, including any
binding judicial or administrative order, consent decree or judgment, in each
case relating to (i) the protection, investigation or restoration of the
environment, health and safety or natural resources, (ii) the handling, use,
presence, disposal, release or threatened release of any Hazardous Material, or
(iii) noise, odor, wetlands, pollution, contamination or injury or threat of
injury to persons or property, as in effect on or prior to the Closing Date.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"EVALUATION MATERIAL" shall have the meaning set forth in Section 5.3.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"EXCLUDED CLAIMS" shall mean the claims set forth on Exhibit B hereto.
"FINAL ALLOCATION" shall have the meaning set forth in Section 5.6(e).
"FINANCIAL STATEMENTS" shall mean (a) the Balance Sheet, (b) the unaudited
consolidated statements of income of the Purchased Business for the year ended
December 31, 2003, (c) unaudited consolidated balance sheet of the Purchased
Business at December 31, 2002, and (d) the unaudited consolidated statements of
income of the Purchased Business for the year ended December 31, 2002.
"FTC" shall mean the United States Federal Trade Commission.
"GAAP" shall mean United States generally accepted accounting principles.
"GO2NET" shall mean Go2Net, Inc., a Delaware corporation.
"GOVERNMENTAL ENTITY" shall mean a court, arbitral tribunal, administrative
department, board, agency or commission or other governmental or other
regulatory authority or agency of or within the United States or any foreign
jurisdiction.
"HAZARDOUS MATERIALS" shall mean any hazardous substance, the use,
transportation or disposition of which is regulated by law or by any
Governmental Entity, including, without limitation, any petroleum product or
by-product, material containing asbestos, lead or polychlorinated biphenyls,
radioactive material or radon.
"HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"INDEBTEDNESS" shall mean, with respect to any Person, all obligations,
contingent or otherwise, which in accordance with GAAP would be required to be
presented upon such Person's balance sheet as liabilities, but in any event
including (a) all indebtedness for borrowed money or for the deferred purchase
price of property or services, (b) any other indebtedness that is evidenced by a
note, bond, debenture or similar instrument, (c) all obligations under financing
and operating leases, (d) all obligations in respect of acceptances issued or
created, (e) all liabilities secured by any lien on any property, (f) all
guarantee obligations and (g) all other obligations, contingent or otherwise,
which in accordance with GAAP would be required to be presented upon such
Person's balance sheet as liabilities.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 8.4.
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 8.4.
"INTELLECTUAL PROPERTY LICENSE AGREEMENT" shall mean the agreement regarding the
licensing to Purchaser, the Company and/or the Company Subsidiary of certain
Intellectual Property Rights by Seller to be entered into between signing and
Closing pursuant to Section 5.4(c).
"INTELLECTUAL PROPERTY RIGHTS" shall mean any or all of the following statutory
and/or common
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law rights throughout the world in, arising out of, or associated therewith: (i)
all patents and applications therefor and all reissues, divisions, extensions,
provisionals, continuations and continuations-in-part thereof, and international
and foreign equivalents thereof; (ii) all inventions (whether patentable or
not), invention disclosures and improvements, all trade secrets, proprietary
information, know how and technology; (iii) all works of authorship, copyrights
and copyright registrations and applications therefor; (iv) all industrial
designs and registered designs and any registrations and applications therefor;
(v) all trade names, logos, trademarks and service marks; trademark and service
xxxx registrations and applications; (vi) all databases and data collections
(including knowledge databases, customer lists and customer databases); (vii)
all rights in software; (viii) rights to Uniform Resource Locators, Web site
addresses and domain names; (ix) any similar, corresponding or equivalent rights
to any of the foregoing or in any Technology; and (x) any goodwill associated
with any of the foregoing.
"IP" means Intellectual Property Rights and/or Technology.
"IRS" shall mean the United States Internal Revenue Service.
"KNOWLEDGE OF SELLERS" shall mean the actual knowledge of the directors and
executive officers of Sellers, the Company and the Company Subsidiary, and the
actual knowledge of Xxx Xxxxx and Xxxxx Xxxxxxx.
"LEASE" shall mean any of the real property leases and the personal property
leases set forth on Sections 3.14(a), 3.14(b), 3.14(c), 3.14(d) and 3.14(e) of
the Company Disclosure Schedule.
"LEGAL REQUIREMENT" means any domestic, foreign or international law, treaty,
ordinance, statute, rule or regulation of any Governmental Entity or any Order.
"LOSSES" means any and all claims, costs, losses, diminution in value,
liabilities, obligations, fines, penalties, awards, damages and expenses
(including reasonable attorneys' fees and expenses).
"MATERIAL ADVERSE EFFECT" shall mean any event, change, effect, circumstance,
violation, or inaccuracy that is or could reasonably be expected to be
materially adverse to the business, financial condition, assets or operations of
the Purchased Business or that materially adversely affects the ability of
Sellers or the Company to perform their obligations under the Transaction
Documents and consummate the Transactions; provided, however, that none of the
following shall be deemed in themselves, either alone or in combination, to
constitute, and none of the following shall be taken into account in determining
whether there has been or could reasonably be expected to be, a Material Adverse
Effect (a) any adverse change, effect, occurrence, state of facts or development
attributable to conditions affecting the industries in which the Purchased
Business participates, the U.S. economy as a whole, or foreign economies in any
location where the Purchased Business has operations or sales, provided that the
same does not result in any materially disproportionate effect on the Purchased
Business; (b) any adverse change, effect, occurrence, state of facts or
development resulting from compliance with the terms of, or the taking of any
action required by, this Agreement; or (c) any adverse changes, effects,
occurrences, state of facts or developments that are a result of the
announcement or pendency of the Transactions.
"MATERIAL CONTRACT" shall mean any Contract that is disclosed or required to be
disclosed in Sections 3.14, 3.15 or 3.21 of the Seller Disclosure Schedule.
"MONEY SERVICES LAWS" shall have the meaning set forth in Section 3.18(a).
"NON-DISCLOSING PARTY" shall have the meaning set forth in Section 5.14.
"OBJECTION NOTICE" shall have the meaning set forth in Section 2.4(b).
"ORDER" means any decision, judgment, order, writ, injunction, decree, award or
determination of any court, arbitrator or Governmental Entity.
"PARENT" shall mean InfoSpace, Inc., a Delaware corporation.
"PARENT CHANGE OF CONTROL" means any acquisition of beneficial ownership of more
than 50% of the outstanding stock or assets (on a book value basis) of Parent,
and any merger, consolidation or similar transaction with or involving Parent
following which the stockholders of Parent immediately prior to such transaction
hold less than 50% of the outstanding stock of the surviving
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entity of such transaction.
"PERMITTED ENCUMBRANCES" shall mean (a) statutory liens for current Taxes or
income Taxes or other governmental charges or assessments or levies not yet due
and payable, (b) liens of landlords, carriers, warehousemen, mechanics, vendors
or materialmen securing obligations arising in the ordinary course of business
that are not yet due and payable or due but not delinquent, (c) liens incurred
in the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, performance and return of money bonds and similar
obligations, and (d) purchase money or similar security interests granted in
connection with the purchase of equipment or supplies in the ordinary course of
business.
"PERSON" shall mean a natural person, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity or organization.
"PLAN" shall have the meaning set forth in Section 3.19(a).
"POTENTIAL CONTRIBUTOR" shall have the meaning set forth in Section 8.6(b).
"PURCHASE PRICE" shall mean the amount set forth in Section 1.2.
"PURCHASED BUSINESS" shall mean the business of the Company and the Company
Subsidiary as conducted on the date of this Agreement.
"PURCHASER" shall mean Lightbridge, Inc., a Delaware corporation.
"PURCHASER LOSS THRESHOLD" shall have the meaning set forth in Section 8.6(a).
"PURCHASER PLAN" shall have the meaning set forth in Section 5.7(c).
"REGISTERED INTELLECTUAL PROPERTY" means all United States, international and
foreign: (i) patents and applications therefor and all reissues, divisions,
extensions, provisionals, continuations and continuations in part thereof, and
international and foreign equivalents thereof; (ii) registered trademarks,
applications to register trademarks, intent-to-use applications, or other
registrations or applications related to trademarks or service marks; (iii)
registered copyrights and applications for copyright registration; and (iv)
domain name registrations.
"RELEASE" means any spilling, leaking, pumping, emitting, emptying, discharging,
injection, escaping, leaching, migrating, dumping, or disposing of Hazardous
Materials (including the abandonment or discarding of barrels, containers or
other closed receptacles containing Hazardous Materials) into the environment.
"SECTION 338(h)(10) ELECTION" shall have the meaning set forth in Section
5.6(d).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLERS" shall have the meaning set forth in the preamble hereto.
"SELLER DISCLOSURE SCHEDULE" shall mean the disclosure schedule of even date
herewith prepared by Sellers and delivered to Purchaser simultaneously with the
execution hereof.
"SELLER LICENSED IP" means the IP of Parent that is licensed to the Company
pursuant to the Intellectual Property License Agreement.
"SELLER LOSS THRESHOLD" shall have the meaning set forth in Section 8.6(c).
"SELLER RELEASING PARTIES" shall have the meaning set forth in Section 5.9.
"SHARES" shall mean shares of common stock, par value $0.01, issued by the
Company.
"STRADDLE PERIOD" shall mean a taxable year or period beginning before, and
ending after, the Closing Date.
"SUBLEASE AGREEMENTS" shall mean the sublease agreements to be entered into
between Parent and Purchaser, substantially in the forms attached Exhibit A
hereto, pursuant to Section 5.21(a).
"SUBSIDIARY" shall mean, with respect to any Person, any corporation or other
organization, whether incorporated or unincorporated, of which (a) at least a
majority of the securities or other interests having by their terms ordinary
voting power to elect a majority of the Board of Directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such Person or by any one or more
of its Subsidiaries, or by such Person and one or more of its Subsidiaries or
(b) such Person or any other
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Subsidiary of such Person is a general partner.
"TAX" or "TAXES" (and, with correlative meaning, "TAXABLE" and "TAXATION") shall
mean all taxes, charges, fees, duties, levies, penalties or other like
assessments imposed by any federal, state, local or foreign governmental
authority, including income, gross receipts, excise, property, sales, gain, use,
license, custom duty, unemployment, capital stock, transfer, franchise, payroll,
withholding, social security, minimum estimated, profit, gift, severance, value
added, disability, premium, recapture, credit, occupation, service, leasing,
employment, stamp and other taxes, and shall include interest, penalties or
additions attributable thereto or attributable to any failure to comply with any
requirement regarding Tax Returns.
"TAX ATTRIBUTES" shall mean net operating losses, capital losses and Tax
credits, and carryovers thereof, for purposes of federal or state income or
franchise Taxes.
"TAX BENEFITS" shall mean the actual Tax savings whenever realized arising from
any increased deductions, losses, or credits then allowable or decreases in
income, gains or recapture of tax credits then allowable (including by way of
amended Tax Returns).
"TAX CLAIM" shall mean a claim for indemnification or defense arising out of
Section 8.9, including reasonable attorneys' fees and expenses and reasonable
accountants' fees and expenses incurred by a party in the investigation or
defense of any of the same or in asserting, preserving or enforcing any such
party's rights arising under Section 8.9.
"TAX RETURN" shall mean any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any such document
prepared on a consolidated, combined or unitary basis and also including any
schedule or attachment thereto, and including any amendment thereof.
"TECHNOLOGY" means all technology, including all know-how, show-how, techniques,
design rules, trade secrets, inventions (whether or not patented or patentable),
business materials, algorithms, routines, software, files, databases, works of
authorship, processes, test methodologies, any media on which any of the
foregoing is recorded, any other tangible embodiments of any of the foregoing
and all devices, prototypes, hardware, equipment, development tools and test
systems, but not the Intellectual Property Rights in any of the foregoing.
"Third Party Licensed IP" SHALL HAVE THE MEANING SET FORTH IN SECTION
3.21(b).
"TRANSACTION DOCUMENTS" shall mean this Agreement, the Sublease Agreements, the
Transition Services Agreement, the Intellectual Property License Agreement and
all other documents, instruments and certificates to be delivered by any party
pursuant to the terms of this Agreement.
"TRANSACTIONS" shall mean all the transactions provided for or contemplated by
this Agreement and the other Transaction Documents.
"TRANSFERRED EMPLOYEES" shall have the meaning set forth in Section 5.7(c).
"TRANSITION SERVICES AGREEMENT" shall mean the agreement for transition services
to be entered into between Purchaser and Seller pursuant to Section 5.21(b).
"WORKING CAPITAL" shall mean the amount equal to (i) current assets of the
Purchased Business as defined under GAAP (but excluding the certificates of
deposit maintained by the Company pursuant to its agreement with First National
Bank of Omaha from current assets) minus (ii) current liabilities of the
Purchased Business as defined under GAAP (but excluding deferred revenue from
current liabilities).
"WORKING CAPITAL CERTIFICATE" shall have the meaning set forth in Section
2.4(a).
Section 9.2. Interpretation.
(a) The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
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(b) Whenever the words "INCLUDE", "INCLUDES" or "INCLUDING" are used in
this Agreement they shall be deemed to be followed by the words "WITHOUT
LIMITATION."
(c) The words "HEREOF", "HEREIN" and "HEREWITH" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit and schedule references are to the articles,
sections, paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.
(d) The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term, and words
denoting any gender shall include all genders. Where a word or phrase is defined
herein, each of its other grammatical forms shall have a corresponding meaning.
(e) A reference to any party to this Agreement or any other agreement
or document shall include such party's successors and permitted assigns.
(f) The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
ARTICLE 10.
MISCELLANEOUS
SECTION 10.1. FEES AND EXPENSES.
All costs and expenses incurred in connection with this Agreement and the
consummation of the Transactions shall be paid by the party incurring such costs
and expenses, except as specifically provided to the contrary in this Agreement.
Notwithstanding the foregoing, (i) all such costs and expenses incurred by the
Company shall be paid by Parent and (ii) filing fees in connection with the HSR
Act shall be shared equally by Purchaser and Parent.
SECTION 10.2. AMENDMENT AND MODIFICATION.
This Agreement may be amended, modified and supplemented in any and all
respects, but only by a written instrument signed by all of the parties hereto
expressly stating that such instrument is intended to amend, modify or
supplement this Agreement.
SECTION 10.3. NOTICES.
All notices, requests, demands, claims and other communications hereunder shall
be in writing. Any notice, request, demand, claim or other communication shall
be deemed duly given (a) two (2) business days after it is sent by registered or
certified mail, return receipt requested, postage prepaid, (b) one (1) business
day after it is sent for next business day delivery via a reputable nationwide
overnight courier service or (c) on the date sent after transmission by
facsimile with written confirmation, in each case to the intended recipient as
set forth below:
if to Purchaser, to:
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Lightbridge, Inc.
00 Xxxxx Xxxxxxx Xxxxxx
Xxxx Lobby - Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy (which shall not constitute effective notice) to:
Xxxxx Xxxx LLP
Seaport World Trade Center West
000 Xxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Xx., Esq.
Facsimile: (000) 000-0000
if to Sellers to:
InfoSpace, Inc.
000 000xx Xxxxxx XX
Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy (which shall not constitute effective notice) to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation
Xxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Any party may change its address for notices upon giving written notice of the
change to the other party in the manner provided above.
SECTION 10.4. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and shall become effective
when two or more counterparts have been signed by each of the parties and
delivered to the other parties.
SECTION 10.5. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.
This Agreement and the exhibits and schedules hereto, the other Transaction
Documents and the Confidentiality Agreement (a) constitute the entire agreement
and supersede all other prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof and (b) are
not intended to confer upon any Person other than the parties hereto and the
Indemnified Parties any rights or remedies hereunder.
SECTION 10.6. SEVERABILITY.
Any term or provision of this Agreement that is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable in any
situation in any jurisdiction shall not affect
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the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction or other authority declares that any term or provision
hereof is invalid, void or unenforceable, the parties agree that the court
making such determination shall have the power to reduce the scope, duration,
area or applicability of the term or provision, to delete specific words or
phrases, or to replace any invalid, void or unenforceable term or provision with
a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision.
SECTION 11.7. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without giving effect to the principles
of conflicts of law thereof. Each of the parties hereto irrevocably consents to
the exclusive jurisdiction and venue of any court within Newcastle County, State
of Delaware, in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein and waives and covenants not to
assert or plead any objection which they might otherwise have to such
jurisdiction or venue.
(b) To the extent not prohibited by applicable Legal Requirements which
cannot be waived, each of the parties hereto hereby waives any right to trial by
jury in any forum in respect of any issue, action, claim, cause of action, suit
(in contract, tort or otherwise), inquiry, proceeding or investigation arising
out of or based upon this Agreement or the subject matter hereof or in any way
connected with or related or incidental to the Transactions.
SECTION 11.8. DISPUTE RESOLUTION.
For any dispute or claim arising out of or relating to this Agreement, or breach
hereof, the parties, prior to filing any claims in a court of law or to seeking
binding arbitration, shall in good faith first negotiate in an effort to reach a
written resolution of such dispute or claim within a period not to exceed thirty
(30) days from the date of receipt of a party's request for such negotiation.
Such negotiations shall be conducted by managers of each party who have
authorization to resolve any such dispute or claim. In the event the parties
cannot negotiate a written resolution to such dispute or claim during this
negotiation period, and prior to filing any claims in a court of law or to
binding arbitration, the parties shall then submit such dispute or claim to
non-binding mediation with JAMS/ENDISPUTE or its successor. The mediation may be
initiated by the written request of either party to the other party, shall
commence within fifteen (15) days of the receipt of such notice and shall be
conducted in Newcastle County, Delaware in accordance with such mediation
procedures established by JAMS/ENDISPUTE or its successor, unless otherwise
agreed by the parties. The mediation shall not exceed a period of thirty (30)
days. In the event the parties do not resolve such dispute or claim as a result
of such mediation or in the event such dispute or claim is not resolved within
thirty (30) days of the commencement of the mediation, either party may seek to
resolve the dispute or claim in a court of competent jurisdiction or seek other
legal or equitable resolution. The judgment or decree of a court shall be deemed
final when the time for appeal, if any, shall have expired and no appeal shall
have been taken or when all appeals taken shall have been finally determined.
Notwithstanding the foregoing, either party at any time may apply to any court
of competent jurisdiction for injunctive relief in the event of an alleged
breach of this Agreement or otherwise to prevent irreparable harm.
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SECTION 10.9. TIME OF ESSENCE.
Each of the parties hereto hereby agrees that, with regard to all dates
and time periods set forth or referred to in this Agreement, time is of the
essence.
SECTION 10.10. EXTENSION; WAIVER.
At any time prior to the Closing Date, either party hereto may (a) extend the
time for the performance of any of the obligations or other acts of the other
party, (b) waive any inaccuracies in the representations and warranties of the
other party contained in this Agreement or in any document delivered pursuant to
this Agreement or (c) waive compliance by the other parties with any of the
covenants, agreements or conditions contained in this Agreement. The failure of
any party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
SECTION 10.11. ASSIGNMENT.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties, except that
Purchaser may assign, upon prior written notice, in its sole discretion, all
(but not less than all) of its rights and interests hereunder to any wholly
owned subsidiary of Purchaser. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
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IN WITNESS WHEREOF, Purchaser, Sellers and the Company have executed this
Agreement or caused this Agreement to be executed by their respective officers
thereunto duly authorized as of the date first written above.
INFOSPACE, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman/CEO
GO2NET, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
----------------------------------------
Name:
Title:
XXXXXXXXX.XXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
----------------------------------------
Name:
Title:
LIGHTBRIDGE, INC.
By: /s/ Xxxxxx X.X. Xxxxx
----------------------------------------
Name: Xxxxxx X.X. Xxxxx
Title: Chief Executive Officer
