EXHIBIT 2.1
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SHARE SALE AND PURCHASE AGREEMENT
By and Among
DST SYSTEMS, INC.,
AMDOCS INC.
and
AMDOCS LIMITED
Dated as of July 1, 2005
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TABLE OF CONTENTS
1. DEFINITIONS..............................................................................................1
2. PURCHASE AND SALE OF SHARES.............................................................................11
2.1. Purchase and Sale of Shares.............................................................................11
2.2. Purchase Price..........................................................................................11
2.3. [Intentionally Reserved]................................................................................12
2.4. Post-Closing Adjustments................................................................................12
3. DELIVERIES..............................................................................................14
3.1. Deliveries of Shareholder...............................................................................14
3.2. Deliveries of Buyer.....................................................................................15
4. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER...........................................................16
4.1. Organization and Authority..............................................................................16
4.2. Non-Contravention.......................................................................................17
4.3. Ownership of Shares.....................................................................................17
4.4. Governmental and other Consents.........................................................................17
4.5. Brokers' Fees...........................................................................................17
4.6. Intellectual Property...................................................................................18
5. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER RELATING TO THE COMPANIES.................................18
5.1. Organization............................................................................................18
5.2. Authority...............................................................................................18
5.3. Non-Contravention; No Material Adverse Effect Resulting from Execution and Performance of Agreement.....19
5.4. Capitalization; Ownership...............................................................................19
5.5. Subsidiaries............................................................................................20
5.6. Governmental Approvals and other Consents...............................................................20
5.7. Companies Financial Statements; No Undisclosed Liabilities..............................................21
5.8. Absence of Certain Changes..............................................................................22
5.9. Tax Matters.............................................................................................23
5.10. Assets and Property.....................................................................................25
5.11. Intellectual Property...................................................................................27
5.12. Contracts...............................................................................................28
5.13. Insurance...............................................................................................31
5.14. Litigation..............................................................................................32
5.15. Employee Matters........................................................................................33
5.16. Legal Compliance........................................................................................35
5.17. Affiliate Transactions..................................................................................35
5.18. No Public Offer.........................................................................................36
5.19. Brokers' Fees...........................................................................................36
5.20. Customers and Suppliers.................................................................................36
5.21. Licenses and Permits....................................................................................37
5.22. Non-Competition Agreements..............................................................................37
5.23. Indebtedness to Shareholder.............................................................................37
5.24. Environmental Matters...................................................................................38
6. REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT......................................................38
6.1. Organization............................................................................................38
6.2. Authority...............................................................................................38
6.3. Non-Contravention.......................................................................................39
6.4. Governmental and other Consents.........................................................................39
6.5. Brokers' Fees...........................................................................................39
7. COVENANTS...............................................................................................39
7.1. Non-Competition.........................................................................................39
7.2. Non-Solicitation of Employees...........................................................................40
7.3. Confidential Information................................................................................41
7.4. Public Announcements....................................................................................42
7.5. Income Taxes and Section 338(h)(10) Election............................................................42
7.6. Release of Officers and Directors.......................................................................44
7.7. Further Assurances......................................................................................44
7.8. Employee Benefits.......................................................................................45
7.9. Disclaimer of Warranties................................................................................46
7.10. Release of Companies Obligations........................................................................46
7.11. Use of Name.............................................................................................46
8. INDEMNIFICATION.........................................................................................47
8.1. Indemnity by Shareholder................................................................................47
8.2. Indemnity by Buyer and Parent...........................................................................48
8.3. Procedures for Indemnification..........................................................................49
8.4. Certain Rights and Limitations..........................................................................51
8.5. Tax Indemnity...........................................................................................52
9. GENERAL PROVISIONS......................................................................................56
9.1. Assignment..............................................................................................56
9.2. Parties in Interest.....................................................................................56
9.3. Amendment...............................................................................................56
9.4. Waiver; Remedies........................................................................................56
9.5. Fees and Expenses.......................................................................................57
9.6. Notices.................................................................................................57
9.7. Captions; Currency......................................................................................58
9.8. Entire Document.........................................................................................58
9.9. Severability............................................................................................59
9.10. Governing Law...........................................................................................59
9.11. Jurisdiction, Service of Process........................................................................59
9.12. Schedules and Exhibits; Disclosure......................................................................59
9.13. Counterparts............................................................................................59
9.14. Specific Performance....................................................................................60
9.15. Construction; Interpretation............................................................................60
9.16. Withholding Obligations.................................................................................60
SHARE SALE AND PURCHASE AGREEMENT
SHARE SALE AND PURCHASE AGREEMENT dated as of July 1, 2005 (the "Closing Date")
by and among Amdocs Inc., a Delaware corporation ("Buyer"), Amdocs Limited, an
Island of Guernsey corporation ("Parent") and DST Systems, Inc., a Delaware
corporation ("Shareholder").
W I T N E S S E T H :
WHEREAS, Shareholder owns, either directly or indirectly, the
Shares (as defined below) of each of DST Interactive, Inc. ("Interactive"), a
North Carolina corporation and DST Innovis, Inc. ("Innovis"), a California
corporation (each a "Company" and, collectively, the "Companies"); and
WHEREAS, Shareholder wishes to sell the Shares to Buyer, and
Buyer wishes to buy such Shares, on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements hereinafter
contained, the parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1. "Action" means any legal, administrative, governmental or
regulatory proceeding or other action, suit, proceeding,
claim, arbitration, mediation, alternative dispute resolution
procedure, inquiry or investigation by or before any
arbitrator, mediator, court or other Governmental Authority.
1.2. "Adelphia Pre-Petition Receivable" means the net account
receivable owed by Adelphia Communications Corp. and its
Affiliates to the Companies and their Subsidiaries for
services rendered prior to the commencement of bankruptcy
proceedings in respect of Adelphia Communications Corporation
and its Affiliates on June 25, 2002. For the purposes of the
definition of "Current Assets", the parties agree that the
"Adelphia Pre-Petition Receivable" equals Four Million Two
Hundred Thousand dollars ($4,200,000.00).
1.3. "Adjusted Working Capital" means (x) Current Assets minus (y)
Current Liabilities.
1.4. "Affiliate" means, with respect to any Person, any other
Person directly or indirectly Controlling, Controlled by or
under common Control with such Person. For purposes of this
Agreement, the term "Control" (including, with correlative
meanings, the terms "Controlling", "Controlled by" and "under
common Control with"), as used with respect to any Person,
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies
of such Person, whether through ownership of voting
securities or partnership interests, by contract or
otherwise.
1.5. "Affiliated Group" means any affiliated group within the
meaning of Section 1504(a) of the Code or any similar group
defined under an analogous provision of state, local or
foreign law.
1.6. "Agreement" means this Share Sale and Purchase Agreement,
including all Exhibits and Schedules hereto, as the same may
be amended, modified or supplemented from time to time in
accordance with its terms.
1.7. "Ancillary Documents" means the Specified Ancillary
Documents, the El Dorado 1104 Lease, the El Dorado 1102
Lease, the Asset Transfer Agreement, the UK Letter of Credit
Guarantee, the DDP/F Software Source Code License Agreement,
the Collabrent Function Source Code License Agreement and any
other agreements delivered pursuant to Section 3.1 or 3.2.
1.8. "Business Day" means any day other than a Saturday, Sunday or
any other day on which banking institutions in the State of
Missouri and the State of New York are not open for the
transaction of normal banking business.
1.9. "Business Intellectual Property" means all Intellectual
Property owned, held, leased, licensed, under development or
otherwise used or provided by any Company or any Subsidiary
thereof or used by the Cable and Satellite Business,
including the Principal Products and any other items listed
as being included in Section 5.11.1 of the Disclosure
Schedule, but excluding the Retained Intellectual Property.
1.10. "Cable and Satellite Business" means all of the businesses of
providing billing services or systems that calculate customer
bills for the cable television, satellite television or
broadband industries and markets (x) throughout the world or
(y) for purposes of Section 7.1 only, in North America (in
each case, including all related applications such as Order
Management, Product Catalog, and Customer Management
Provision) excluding the following: (i) the business
activities provided by Shareholder to Parent, the Companies
and third parties as described or contemplated in the
Specified Ancillary Documents; and (ii) the calculation of
incidental adjustments, discounts, rebates, add-on fees and
the like that are from record files provided by other parties
(and not any records from a database of Shareholder or any
Subsidiary of Shareholder) that are implemented after the
▇▇▇▇ has been calculated and as a part of the ▇▇▇▇ printing
process or that are reasonably ancillary thereto.
1.11. "Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under
any lease of (or other arrangement conveying the right to
use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted
for as capital leases on a balance sheet of such Person under
GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with
GAAP.
1.12. "Code" means the U.S. Internal Revenue Code of 1986, as
amended.
1.13. "Collabrent Product" means the general customer care and
billing solution and any associated components developed in
whole or in part to service the Cable and Satellite Business
and telephony services including, but not limited to,
components for providing billing and provisioning services,
telephony services, customer relations management services
and customer value management services and further including
any portion of any Principal Product and the modules known as
(i) Product Catalog, (ii) ▇▇▇▇ Calculation, (iii) Statement
Preparation, (iv) Customer & Contact Management, (v)
Customer, Account & Financial Management, (vi) Risk and
Collection Management, (vii) Target Management, (viii) Sales
& Order Management, (ix) Electronic Provisioning & Mediation,
(x) Transaction Calculation & Rating, (xi) Enterprise
Interface Gateway and (xii) Enterprise Administration
Management.
1.14. "Confidential Information" means all of each Company's
non-public information, in any and all medium, written or
oral, including, without limitation, data, technology,
know-how, inventions, discoveries, designs, processes,
formulations, models, equipment, algorithms, software
programs, documents, systems, specifications, information
concerning research and development work, prices, proposed
transaction terms, current, planned or proposed products,
marketing and business plans, forecasts, projections and
analyses, financial information, customer information and
other commercial information and/or trade and business
secrets.
1.15. "Confidentiality Agreement" means the Nondisclosure Agreement
entered into between each of the Companies and Buyer dated as
of June 6, 2002, as extended.
1.16. "Consents" means consents, approvals, requirements,
exemptions, orders, waivers, allowances, novations,
authorizations, declarations, filings and registrations.
1.17. "Contracts" means, with respect to any Person, all binding
agreements, undertakings, contracts, leases, obligations,
arrangements, promises, understandings and commitments
(whether written or oral) (other than any Plan) (i) to which
such particular Person is a party, (ii) under which such
particular Person has any rights, (iii) under which such
particular Person has any Liability or (iv) by which such
particular Person, or any of the assets or properties owned,
held, leased or licensed by such particular Person, is bound,
including, in each case, all amendments, modifications and
supplements thereto and waivers and consents thereunder.
1.18. "Control" (including, with correlative meanings, the terms
"Controlling", "Controlled by" and "under common Control
with") has the meaning set forth in the definition of
Affiliate.
1.19. "Current Assets" means the current assets of the Companies as
of the close of business on June 30, 2005 determined in
accordance with GAAP and in a manner consistent with the
Companies Audited Balance Sheet; provided that "Current
Assets" shall not include: (i) accounts receivable from
Shareholder or any of its Affiliates (other than the Company
and its Subsidiaries), (ii) the Adelphia Pre-Petition
Receivable, (iii) any Income Tax assets, (iv) any account
receivable relating to a foreign Tax withholding and (v) any
deferred Taxes.
1.20. "Current Liabilities" means the current liabilities of the
Companies as of the close of business on June 30, 2005
determined in accordance with GAAP and in a manner consistent
with the Companies Audited Balance Sheet; provided that
"Current Liabilities" shall not include: (i) Income Taxes,
(ii) any deferred Tax liabilities and (iii) deferred revenues
and gains.
1.21. "Damages" means any and all losses, Liabilities, claims,
damages, deficiencies, fines, payments, costs and expenses,
whenever or however arising and whether or not resulting from
Third Party Claims (including all reasonable costs and
expenses of any and all Actions or other legal matters; all
amounts paid in connection with any demands, assessments,
judgments, settlements and compromises relating thereto;
interest and penalties with respect thereto; and costs and
expenses, including reasonable attorneys', accountants' and
other experts' fees and expenses, incurred in investigating,
preparing for or defending against any such Actions or other
legal matters or in asserting, preserving or enforcing an
Indemnitee's rights hereunder). Damages shall expressly
exclude punitive or consequential damages, except where
Damages are based on a claim of fraud.
1.22. "Environmental Claim" means any and all administrative,
regulatory or judicial actions, suits, orders, demands,
directives, claims, liens, investigations, proceedings or
notices of noncompliance or violation by or from any Person
alleging Liability (including responsibility for the costs of
investigations, cleanup, governmental response or removal,
natural resources damages, property damages, personal
injuries, penalties, contribution and indemnification)
arising out of, based on or resulting from (i) the presence
or Release of, or exposure to, any Hazardous Materials at any
location; or (ii) the failure to comply with any
Environmental Law.
1.23. "Environmental Laws" means all applicable federal, state,
local and foreign Laws or Licenses issued, promulgated or
entered into by or with any Governmental Authorities,
relating to pollution, natural resources or protection of
endangered or threatened species, human health or the
environment (including ambient air, surface water,
groundwater, land surface or subsurface strata).
1.24. "ERISA" means the United States Employee Retirement Income
Security Act of 1974, as amended.
1.25. "GAAP" means generally accepted accounting principles in the
United States as in effect at the time covered by the
applicable financial statements.
1.26. "Governmental Authority" means, in any jurisdiction, any (i)
supranational, national, federal, state, local or foreign
government, (ii) court, arbitral or other governmental or
regulatory tribunal, (iii) governmental or quasi-governmental
authority of any nature (including any political subdivision,
instrumentality, branch, department, official or entity) or
(iv) agency, commission, authority or body exercising, or
entitled to exercise, any administrative, executive,
judicial, legislative, regulatory or taxing authority or
power of any nature.
1.27. "Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of guaranteeing
any Indebtedness or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor,
direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner
of such Indebtedness or other obligation of the payment
thereof, (c) to maintain working capital, equity capital or
any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account
party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation;
provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course
of business.
1.28. "Hazardous Materials" means (i) any petroleum or petroleum
products, radioactive materials or wastes, asbestos in any
form and polychlorinated biphenyls; and (ii) any other
chemical, material, substance or waste that in relevant form
or concentration is prohibited, limited or regulated under
any Environmental Law.
1.29. "Income Tax" means any federal, state, local or foreign Tax
measured by or imposed on income or profits, including
alternative minimum, profits, franchise, gains, capital gains
or other similar Taxes.
1.30. "Income Tax Return" means any Tax Return relating to Income
Taxes.
1.31. "Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or
other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person
in respect of the deferred purchase price of property or
services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person,
whether or not the Indebtedness secured thereby has been
assumed, (g) all Guarantees by such Person of Indebtedness of
others, (h) all Capital Lease Obligations of such Person
(provided that the lease obligations set forth in Section
1.31 of the Disclosure Schedule shall not constitute "Capital
Lease Obligations" for any purposes under this Agreement),
(i) all obligations, contingent or otherwise, of such Person
as an account party in respect of letters of credit and
letters of guaranty and (j) all obligations, contingent or
otherwise, of such Person in respect of bankers' acceptances.
The Indebtedness of any Person shall include the Indebtedness
of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is
liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
1.32. "Indemnitee" means any party that may seek indemnification
under this Agreement.
1.33. "Intellectual Property" means (i) all inventions (whether
patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents
(including utility and design patents, industrial designs and
utility models), patent applications and patent and invention
disclosures, and all other rights of inventorship, in all
jurisdictions, together with all reissuances, continuations,
continuations-in-part, divisions, revisions, supplementary
protection certificates, extensions and re-examinations
thereof; (ii) all registered and unregistered trademarks,
service marks, trade names, trade dress, logos, business,
corporate and product names and slogans, in all
jurisdictions, and registrations and applications for
registration thereof; (iii) all copyrights in copyrightable
works, and all other rights of authorship, in all
jurisdictions, and all applications, registrations and
renewals in connection therewith; (iv) all mask works and
semiconductor chip rights, in all jurisdictions, and all
applications, registrations and renewals in connection
therewith; (v) all trade secrets and confidential business
and technical information (including ideas, research and
development, know-how, formulas, technology, compositions,
manufacturing and production processes and techniques,
technical data, engineering, production and other designs,
plans, drawings, engineering notebooks, industrial models,
software and specifications); (vi) all computer and
electronic data, data processing programs, documentation and
software, both source code and object code (including flow
charts, diagrams, descriptive texts and programs, computer
print-outs, underlying tapes, computer databases and similar
items), computer applications and operating programs; (vii)
all rights to ▇▇▇ for and remedies against past, present and
future infringements of any or all of the foregoing and
rights of priority and protection of interests therein under
the Laws of any jurisdiction; (viii) all copies and tangible
embodiments of any or all of the foregoing (in whatever form
or medium, including electronic media); (ix) all other
products and services covered or embodied in or by any of the
foregoing; and (x) all other proprietary, intellectual
property and other rights relating to any or all of the
foregoing.
1.34. "Knowledge" or "aware of" or a similar phrase with respect to
Shareholder or any Company, whether capitalized or not, means
the actual knowledge of those persons set forth in Section
1.34 of the Disclosure Schedule, after due inquiry with
executive officers and other personnel of the Companies (and
assuming that such due inquiry was conducted), and assuming
that such executive officers and other personnel of the
Companies who are so inquired possess such knowledge as they
would be reasonably expected to possess given their position
after due inquiry (and assuming that such due inquiry was
conducted).
1.35. "Law" or "Laws" means all published or written, as the case
may be, laws, statutes, constitutions, rules, regulations,
directives, ordinances, codes, judgments, rulings, orders,
writs, decrees, stipulations, injunctions, notices, circulars
and determinations of all Governmental Authorities.
1.36. "Lease" or "Leases" means all leases, subleases, licenses,
rights to occupy or use with respect to real property,
including, in each case, all amendments, modifications and
supplements thereto and waivers and consents thereunder.
1.37. "Liability" means any and all claims, debts and liabilities
of whatever nature, accrued or unaccrued, liquidated or
unliquidated or due or to become due, and whenever or however
arising (including those arising out of any Contract or tort,
whether based on negligence, strict liability or otherwise).
1.38. "Licenses" means all licenses, permits, certificates,
variances, exemptions, franchises, rulings and other
approvals or authorizations issued, granted, given, required
or otherwise made available by any Governmental Authority.
1.39. "Lien" means any charge, claim, community property interest,
equitable interest, lien, encumbrance, option, proxy, pledge,
security interest, mortgage, right of first refusal, right of
preemption, transfer or retention of title agreement, or
restriction by way of security of any kind or nature,
including any restriction on use, voting, transfer, receipt
of income or exercise of any other attribute of ownership.
1.40. "Material Adverse Effect" means any act, omission, fact,
occurrence, circumstance or condition that has had a material
adverse effect on the business, results of operations,
assets, liabilities, intellectual property or the financial
condition of the Companies and their Subsidiaries, taken as a
whole, or adverse effect on the ability of Shareholder or any
Company to perform any of their material obligations under
this Agreement or consummate the Transaction, but shall not
include any adverse effect resulting primarily from effects,
changes, events, circumstances or conditions generally
affecting the industry or markets in which the Companies and
their Subsidiaries operate or arising from changes in general
business or economic conditions.
1.41. "Owned IP" means all Business Intellectual Property owned by
the Companies which includes, without limitation, the
Principal Products.
1.42. "Person" means any individual, firm, partnership, joint
venture, trust, corporation, limited liability entity,
unincorporated organization, estate or other entity
(including a Governmental Authority).
1.43. "Plan" means each plan, including any pension, retirement,
cash balance, money purchase, savings, profit sharing,
annuity, deferred compensation, bonus, incentive (including,
without limitation, cash, stock option, stock bonus, stock
appreciation, phantom stock, restricted stock and stock
purchase), medical, dental, vision, hospitalization,
long-term care, prescription drug and other health, employee
assistance, cafeteria, flexible benefits, life insurance,
short and long term disability, vacation pay, severance pay,
other welfare and fringe benefit and similar plans, programs,
understandings, arrangements or agreements and all employee
benefit plans, sponsored or maintained by any Company or to
which any Company is a party or required to contribute or has
any Liability, whether written or oral, direct or indirect,
or actual or contingent.
1.44. "Principal Products" means (i) DDP/SQL (including CyberCSR,
HSDS, Techconnect and Stargate), (ii) DDP/F, (iii) DDP/TBOL,
(iv) STMS, (v) InteleCable, (vi) Teletrack, (vii) Mobile
Vantage and (viii) Collabrent Product.
1.45. "Release" means any actual or threatened release, spill,
emission, leaking, dumping, injection, pouring, deposit,
disposal, discharge, dispersal, leaching or migration into or
through the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata) or
within any building, structure, facility or fixture.
"Retained Intellectual Property" means (i) all items listed
on Section 1.46 of the Disclosure Schedule and (ii) any
Intellectual Property used in the provision of services as
provided for in the Specified Ancillary Documents.
1.46. "SEC" means the United States Securities and Exchange
Commission.
1.47. "Shares" means all shares of all classes of the capital stock
of each of the Companies and their respective Subsidiaries
that are issued and outstanding as of the date hereof and
that, in the case of the Companies, constitute 100% of all of
the equity interest of the Companies and, in the case of
Subsidiaries of the Companies, constitute the equity
interests not owned by a Company, in each case, on a fully
diluted and as converted basis.
"Specified Ancillary Documents" means the AWD Agreement, the
▇▇▇▇ Canada Agreement, the Datacenter Agreement, the Output
Services Agreement, the Transition Services Agreement, the
EComm Core Source Code License Agreement and the Factory
Control Source Code License Agreement.
1.48. "Subsidiary", when used with respect to any Person, means any
other Person of which a majority of the equity interests
having voting power to elect or direct the election of a
majority of the board of directors or other Persons
performing similar functions of such Person is owned or
controlled, directly or indirectly, by such first Person, by
any one or more of its Subsidiaries, or by such first Person
and one or more of its Subsidiaries.
1.49. "Target Adjusted Working Capital" means Twenty One Million
Three Hundred Thousand dollars ($21,300,000.00).
1.50. "Tax" means any U.S. federal, state, local or foreign tax,
charge, duty, fee, levy or other assessment, including
income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital stock, franchise,
profits, withholding, social security (or similar),
unemployment, disability, property, personal property, sales,
use, transfer, registration, value added, turnover, goods,
services, municipal, real property, capital gain, unclaimed
property, alternative or add-on minimum, estimated, or other
tax or mandatory payments of any kind whatsoever, imposed by
any Governmental Authority, and including any interest,
penalty, or addition thereto, whether disputed or not,
including any liability for the foregoing by reason of
membership in an Affiliated Group, contract, indemnity or
otherwise.
1.51. "Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including
any amendment thereof, required to be filed with any
Governmental Authority.
1.52. "Transaction" means the transactions contemplated by the
Transaction Documents.
1.53. "Transaction Documents" means this Agreement, the Ancillary
Documents and all other instruments, certificates and
agreements delivered or required to be delivered by
Shareholder, any of the Companies, Buyer, Parent or any of
their directors, officers, employees or other representatives
pursuant to this Agreement.
1.54. "U.S. Securities Act" means the United States Securities Act
of 1933, as amended, and the rules and regulations
promulgated thereunder.
1.55. Terms Generally.
The definitions in Section 1 shall apply equally to both the
singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation". The words
"herein", "hereof" and "hereunder" and words of similar
import refer to this Agreement (including the Exhibits and
Schedules to this Agreement) in its entirety and not to any
part hereof unless the context shall otherwise require. All
references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections
of, and Exhibits and Schedules to, this Agreement unless the
context shall otherwise require. Unless the context shall
otherwise require, any references to any agreement or other
instrument or statute or regulation are to it as amended and
supplemented from time to time (and, in the case of a statute
or regulation, to any successor provisions). Any reference to
any supranational, national, federal, state, local, foreign
or other statute or law shall be deemed also to refer to all
rules and regulations promulgated thereunder, unless the
context requires otherwise. Any reference in this Agreement
to a "day" or a number of "days" (without explicit reference
to "Business Days") shall be interpreted as a reference to a
calendar day or number of calendar days. If any action is to
be taken or given on or by a particular calendar day, and
such calendar day is not a Business Day, then such action may
be deferred until the next Business Day.
1.56. Other Defined Terms.
The following terms have the meanings defined for such terms
in the Sections set forth below:
Term Section
Number/Location
Allocation Statement 2.2.2
AWD Agreement 3.1.7
▇▇▇▇ Canada Agreement 3.1.5
Buyer Preamble
Buyer Group 8.1.1
Closing Date Preamble
Closing Balance Sheet 2.4.1
Collabrent Function Source Code License Agreement 3.1.16
Companies Audited Balance Sheet 5.7.1
Companies Balance Sheets 5.7.1
Companies Financial Statements 5.7.1
Company/Companies Preamble
Customer Contracts 5.12.1.2
Datacenter Agreement 3.1.8
DDP/F Software Assignment Agreement 3.1.12
DDP/F Software Source Code License Agreement 3.1.13
Disclosure Schedule 4
Dispute Accountants 2.4.4
Dispute Notice 2.4.3
EComm Core Source Code License Agreement 3.1.14
El Dorado 1102 Lease 3.1.10
El Dorado 1104 Lease 3.1.9
Factory Control Source Code License Agreement 3.1.15
Final Closing Balance Sheet 2.4.3
Group Insurance Policies 5.13
Indemnification Period 8.1.2
Indemnified Post Closing Taxes 8.5.2
Indemnified Pre-Closing Taxes 8.5.1
Indemnifying Party 8.3.1
Insurance Policies 5.13
Innovis Preamble
Interactive Preamble
Leased Premises 5.10.2
Major Customers 5.12.1.2
Major Suppliers 5.12.1.2
Material Contracts 5.12.1
Open Source Materials 5.11.2
Output 3.1.9
Output Services Agreement 3.1.4
Parent Preamble
Permits 5.21
Pre-Closing Tax Period 8.5.1
Property Taxes 8.5.3.1
Purchase Price 2.2.1
Relevant Subsidiaries 4.1
Required Consents 4.4
Restricted Business 7.1.1
Section 338(h)(10) Elections 7.5.1
Section 338(g) Elections 7.5.1
Shareholder Preamble
Shareholder Group 8.2.1
Straddle Period 8.5.3
Tax Claim 8.5.5
Third Party Claim 8.3.1
Third Party IP 5.11.1
Transition Services Agreement 3.1.6
UK Letter of Credit Guarantee 3.1.17
2. PURCHASE AND SALE OF SHARES
2.1. Purchase and Sale of Shares.
Subject to the terms and conditions of this Agreement, and in
reliance on the covenants, representations and warranties of
Buyer and Parent contained herein, contemporaneously with
execution of this Agreement, Shareholder is, or is causing
its Subsidiaries to, hereby sell, convey, transfer, assign
and deliver to Buyer or any nominee the Shares, with all
appropriate transfer Tax stamps affixed, free and clear of
all Liens, and Buyer, in reliance on the covenants,
representations and warranties of Shareholder contained
herein, is purchasing and acquiring from Shareholder and its
Subsidiaries the Shares. From and after the date hereof, none
of Shareholder or its Affiliates shall have any rights with
respect to any of the Shares and all of the Shares shall be
owned and registered solely in the name of Buyer or any
nominee.
2.2. Purchase Price.
2.2.1. Subject to the terms and conditions of this
Agreement and in reliance on the covenants,
representations and warranties of Shareholder
contained herein, in consideration for the sale,
conveyance, transfer and assignment of the Shares by
Shareholder and its Subsidiaries to Buyer or any
nominee, contemporaneously with execution of this
Agreement, Buyer is paying Shareholder the amount in
cash of Two Hundred and Thirty Seven Million, Eight
Hundred and Sixty Four Thousand, Two Hundred and
Thirty One dollars and Twenty Cents
($237,864,231.20) (the "Purchase Price"), subject to
the adjustments as set forth in Section 2.4.
2.2.2. Within ninety (90) days after the Closing Date,
Buyer shall deliver to Shareholder a statement (the
"Allocation Statement") allocating the Purchase
Price and applicable liabilities among the assets
acquired pursuant to this Agreement, including the
assets of the Companies (and any Subsidiaries of the
Companies) for which elections are or will be made
under Section 338(h)(10) and Section 338(g) of the
Code and any comparable provisions of state and
local Tax Laws pursuant to Section 7.5.1. If no
changes are proposed in writing to Buyer within
thirty (30) days after delivery of the Allocation
Statement, Shareholder shall be deemed to have
agreed to the Allocation Statement. If within 30
days after delivery of the Allocation Statement,
Shareholder notifies Buyer in writing that
Shareholder objects to an allocation set forth in
the Allocation Statement, Buyer and Shareholder
shall use commercially reasonable efforts to resolve
such dispute within thirty (30) days. If Buyer and
Shareholder are unable to reach agreement within
such time period, such allocation shall be
determined by an appraiser mutually agreed upon by
Buyer and Shareholder, and the fees and expenses of
such appraiser shall be borne equally by Buyer and
Shareholder. If the parties are unable to agree on
an appraiser, the procedures in Section 2.4.4 shall
apply to the selection of the appraiser and the fees
and expenses of the Dispute Accountant shall be
borne equally by Buyer and Shareholder.
2.3. [Intentionally Reserved]
2.4. Post-Closing Adjustments.
2.4.1. Within sixty (60) days after the date of this
Agreement, Shareholder shall deliver to Buyer an
audited consolidated and combined balance sheet of
the Companies and their Subsidiaries dated as of the
date of this Agreement (the "Closing Balance Sheet")
prepared on a basis consistent with the Companies
Audited Balance Sheets (as defined below) and GAAP,
in each case except as provided in Section 2.4.1 of
the Disclosure Schedule. Buyer and its
representatives and accountants shall grant to
Shareholder access as it may reasonably request to
any books, records, work papers or other information
of the Companies reasonably related to the
preparation thereof.
2.4.2. In the event that the Adjusted Working Capital
reflected on the Closing Balance Sheet is less than
the Target Adjusted Working Capital by more than
Five Hundred Thousand dollars ($500,000), then
Shareholder shall pay to Buyer on a
dollar-for-dollar basis, by wire transfer of
immediately available funds, an amount equal to the
total amount by which Target Adjusted Working
Capital exceeds Adjusted Working Capital. In the
event the Adjusted Working Capital reflected on the
Closing Balance Sheet is greater than the Target
Adjusted Working Capital by more than Five Hundred
Thousand dollars ($500,000), then the Parent shall
cause the Buyer to pay to Shareholder, or the Parent
shall pay to Shareholder, an amount equal to the
total amount by which Adjusted Working Capital
exceeds Target Adjusted Working Capital, on a
dollar-for-dollar basis, by wire transfer of
immediately available funds. Any payments required
pursuant to this Section 2.4.2 shall be made within
ten (10) days following the receipt by Buyer of the
Closing Balance Sheet, unless a Dispute Notice (as
defined below) is delivered. Shareholder and its
representatives and accountants shall grant to Buyer
or Parent access as it may reasonably request to any
books, records, officers and employees, financial
and operating data, advisors, auditor and accountant
work papers, or other information in Shareholder's
possession as reasonably required for the review of
the Closing Balance Sheet and the determination of
Adjusted Working Capital.
2.4.3. If, within thirty (30) calendar days after the date
of receipt by Buyer of the Closing Balance Sheet,
Buyer disputes the amount of the Adjusted Working
Capital reflected therein, then Buyer will give
written notice to Shareholder within such thirty
(30) calendar day period specifying in reasonable
detail Buyer's basis for its dispute (a "Dispute
Notice"). In the event that Buyer notifies
Shareholder in writing that it has accepted the
Closing Balance Sheet, or in the event that Buyer
does not issue a Dispute Notice within thirty (30)
calendar days of receipt of the Closing Balance
Sheet, then the Closing Balance Sheet shall become
the Final Closing Balance Sheet (the "Final Closing
Balance Sheet").
2.4.4. If Buyer submits a Dispute Notice to Shareholder
within such thirty (30) day period, Shareholder and
Buyer shall work together in good faith to seek to
resolve the dispute over the correct amount of
Adjusted Working Capital. If Shareholder and Buyer
are unable to resolve their disagreement within
fifteen (15) calendar days after Shareholder's
receipt of a Dispute Notice from Buyer, the dispute
shall be referred for determination to an Accounting
Firm mutually selected by Shareholder and Buyer (the
"Dispute Accountants") as promptly as practicable.
In the event that Shareholder and Buyer are unable
to agree on the Dispute Accountants, then the
parties agree to each select a nationally known firm
of independent public accountants that, together,
will select a third firm of public accountants to
serve as the Dispute Accountants. The Dispute
Accountants will make a determination as to the
correct amount of Adjusted Working Capital, which
determination will be (a) in writing, (b) furnished
to each of Shareholder and Buyer as promptly as
practicable after the dispute has been referred to
the Dispute Accountants, (c) made in accordance with
this Agreement and (d) conclusive and binding.
Shareholder and Buyer will use reasonable commercial
efforts to cause the Dispute Accountants to render
their decision within thirty (30) calendar days
after submitting such dispute and shall promptly
comply with all reasonable written requests by the
Dispute Accountants for information, books, records
and similar items. Neither party will disclose to
the Dispute Accountants, and the Dispute Accountants
will not consider for any purpose, any settlement
offer made by either party. As part of the
resolution of all outstanding disputes, the parties
will cause the Dispute Accountants to prepare the
Final Closing Balance Sheet, which shall be binding
on both parties. Any payments required upon the
determination by the Dispute Accountants, together
with interest thereon at a rate equal to the rate of
interest from time to time announced publicly by
Citibank, N.A., as its prime rate, calculated on the
basis of the actual number of days elapsed divided
by 365, from the date hereof to the date of payment,
shall be made within ten (10) days following such
determination.
2.4.5. All fees and expenses charged by any Dispute
Accountants retained hereunder shall be borne by
Buyer and Shareholder in inverse proportion as they
may prevail on matters resolved by the Dispute
Accountants, which proportionate allocations shall
also be determined by the Dispute Accountants at the
time the determination of the Dispute Accountants is
rendered on the merits of the matters submitted.
3. DELIVERIES
3.1. Deliveries of Shareholder.
Simultaneously herewith, Shareholder is delivering, or is
causing to be delivered, to Buyer the following:
3.1.1. Share certificates representing the Shares,
accompanied by duly executed stock powers in the
form of Exhibit 3.1.1 transferring the Shares to
Buyer or its designee and any other documents that
are necessary to transfer to Buyer or its designee
the Shares, free and clear of any Lien;
3.1.2. Written resignations of all directors of each
Company and any Subsidiary thereof and of all
members of each Company's and each Subsidiary's
thereof committees and revocation of signature
rights of each Company and any Subsidiary thereof;
3.1.3. A good standing certificate of each Company as of a
date within three (3) days prior to the date hereof;
3.1.4. Original copy of the Output Services Agreement dated
as of the date hereof by and among Parent and DST
Output, LLC (the "Output Services Agreement") duly
executed by DST Output, LLC;
3.1.5. Original copy of the ▇▇▇▇ Canada related agreement
dated as of the date hereof by and among Amdocs
Canadian Managed Services Inc. and Output Canada,
Inc. (the "▇▇▇▇ Canada Agreement") duly executed by
Output Canada, Inc.;
3.1.6. Original copy of the Transition Services Agreement
dated as of the date hereof by and among Buyer,
Parent and Shareholder (the "Transition Services
Agreement") duly executed by Shareholder;
3.1.7. Original copy of the AWD related agreement dated as
of the date hereof by and among DST Technologies,
Inc. and Innovis (the "AWD Agreement") duly executed
by DST Technologies, Inc. and Innovis;
3.1.8. Original copy of the Datacenter Agreement dated as
of the date hereof by and among Shareholder and
Innovis (the "Datacenter Agreement") duly executed
by Shareholder and Innovis;
3.1.9. Original copy of the Office Lease dated as of the
date hereof by and among DST Output West, LLC
("Output"), as landlord, and Innovis, as tenant, for
the property known as ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ (the "El Dorado 1104 Lease") duly
executed by Output and Innovis;
3.1.10. Original copy of the Lease dated as of the date
hereof by and among Output, as landlord, and
Innovis, as tenant, for the property known as ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ (the "El
Dorado 1102 Lease") duly executed by Output and
Innovis;
3.1.11. Original copy of the Asset Transfer Agreement
relating to the assignment of the Adelphia
Pre-Petition Receivable and the related ▇▇▇▇ of Sale
and Instrument of Assignment, each dated as of the
date hereof by and among Shareholder and Innovis
(together, the "Asset Transfer Agreement"), in each
case, duly executed by Shareholder and Innovis.
3.1.12. Original copy of the agreement relating to the
assignment of certain DDP/F software dated as of the
date hereof by and among DST Output, LLC and Innovis
(the "DDP/F Software Assignment Agreement") duly
executed by DST Output, LLC and Innovis;
3.1.13. Original copy of the license agreement relating to
certain DDP/F programs dated as of the date hereof
by and among DST Output, LLC and Innovis (the "DDP/F
Software Source Code License Agreement") duly
executed by DST Output, LLC and Innovis;
3.1.14. Original copy of the license agreement relating to
certain EComm Core software and certain other patent
rights dated as of the date hereof by and among
Shareholder, DST Systems of California, Inc. and
Interactive (the "EComm Core Source Code License
Agreement") duly executed by Shareholder, DST
Systems of California, Inc. and Interactive;
3.1.15. Original copy of the license agreement relating to
certain factory control software dated as of the
date hereof by and among DST Output, LLC and Innovis
(the "Factory Control Source Code License
Agreement") duly executed by DST Output, LLC and
Innovis;
3.1.16. Original copy of the license agreement for certain
functions in the Collabrent Product dated as of the
date hereof by and among Shareholder and Interactive
(the "Collabrent Function Source Code License
Agreement") duly executed by Shareholder and
Interactive;
3.1.17. Original copy of the agreement to guarantee a letter
of credit dated as of the date hereof by and among
Shareholder and Parent (the "UK Letter of Credit
Guarantee") duly executed by Shareholder;
3.1.18. Certificates mutually satisfactory to Buyer and
Shareholder, in accordance with applicable Treasury
Regulations, certifying that the transactions
contemplated hereby are exempt from withholding
under Section 1445 of the Code; and
3.1.19. All original stock books, registers, minute books
and records of each Company (including the corporate
seal thereof).
3.2. Deliveries of Buyer.
Simultaneously herewith, Buyer is delivering, or is causing
to be delivered, to Shareholder the following:
3.2.1. The Purchase Price to a bank account the details of
which have been provided by Shareholder to Buyer
prior to the date hereof;
3.2.2. Original copy of the Output Services Agreement, duly
executed by Parent or any designee;
3.2.3. Original copy of the ▇▇▇▇ Canada Agreement, duly
executed by Amdocs Canadian Managed Services Inc. or
any designee;
3.2.4. Original copy of the Transition Services Agreement,
duly executed by Buyer and Parent or any designee;
3.2.5. Original copy of the UK Letter of Credit Guarantee,
duly executed by Parent;
4. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
Subject to the disclosures set forth in the Disclosure Schedule
attached hereto as Exhibit 4 (the "Disclosure Schedule") (provided
that the listing of an item in one section of the Disclosure Schedule
shall be deemed to be a listing in each section of the Disclosure
Schedule and to apply to any other representation and warranty of
Shareholder in this Agreement to the extent that is reasonably
apparent from a reading of such disclosure item that it would also
qualify or apply to such other section or representation and
warranty), Shareholder hereby represents and warrants to Buyer and
Parent as follows:
4.1. Organization and Authority.
Shareholder and each Subsidiary that directly or indirectly
owns any interests in either Company (the "Relevant
Subsidiaries") are duly organized, validly existing and in
good standing under the laws of their respective jurisdiction
of organization. Shareholder and each Relevant Subsidiary
have all requisite power and authority, corporate or
otherwise, to execute and deliver each Transaction Document
to which it is a party and delivered or to be delivered
thereby and to perform all of its obligations thereunder. The
execution, delivery and performance by Shareholder and each
Relevant Subsidiary of each Transaction Document delivered or
to be delivered thereby and the consummation by Shareholder
and each Relevant Subsidiary of the Transaction have been
duly authorized by all necessary and proper action on the
part of Shareholder and each Relevant Subsidiary, as the case
may be. The board of directors or relevant governing body, as
the case may be, of Shareholder and each Relevant Subsidiary,
by resolutions duly adopted at meetings duly called and held
or by the unanimous written consent in lieu of a meeting, has
approved the Transaction Documents and the transactions
contemplated hereunder and under the other Transaction
Documents. This Agreement and each other Transaction Document
to be delivered by Shareholder or the Relevant Subsidiaries
have been duly executed and delivered thereby and constitute
the legal, valid and binding obligation thereof, enforceable
against Shareholder and the Relevant Subsidiary, as the case
may be, in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
affecting the enforcement of creditors' rights in general and
by general principles of equity.
4.2. Non-Contravention.
None of the execution, delivery or performance by Shareholder
and each Relevant Subsidiary of any Transaction Document to
which they are parties or the consummation by Shareholder and
each Relevant Subsidiary of the Transaction does or will,
with or without the giving of notice or the lapse of time or
both conflict with, or result in a breach or violation of, or
a default under, or give rise to any other right which may
adversely affect the Transaction or the Transaction Documents
under (i) the certificate of incorporation or bylaws of
Shareholder or the certificate of incorporation or
certificate of formation of each Relevant Subsidiary, as the
case may be, (ii) any Contract to which Shareholder and each
Relevant Subsidiary, as the case may be, are a party or to
which they are subject, or (iii) any Law or material License
to which Shareholder and each Relevant Subsidiary, as the
case may be, or its respective properties or assets are
subject, which, in the case of clauses (ii) or (iii) hereof,
would, or would reasonably be expected to, result in a
Material Adverse Effect.
4.3. Ownership of Shares.
Shareholder has good and valid title to and is the legal and
beneficial owner (either directly or indirectly) of the
Shares, free and clear of any Liens. Other than the Shares,
there are no outstanding equity interests in either of the
Companies.
4.4. Governmental and other Consents.
No Consent of any Governmental Authority or any other Person
is required to be obtained or made by or with respect to
Shareholder or the Relevant Subsidiaries in connection with
the execution, delivery and performance by Shareholder or the
Relevant Subsidiaries of any Transaction Document to which
any of them is a party or the consummation by Shareholder or
the Relevant Subsidiaries of the Transaction (including but
not limited to Consents required in connection with the
change in the control of the Companies pursuant to the sale
of the Shares by Shareholder and each Relevant Subsidiary),
other than the Consents of (i) the Major Customers, (ii) the
Major Suppliers, (iii) the parties to any Material Contract
and (iv) as otherwise set forth in Section 4.4 of the
Disclosure Schedule (the "Required Consents").
4.5. Brokers' Fees.
None of Shareholder or any of its Affiliates has authorized
or retained any Person to act as an investment banker,
broker, finder or other intermediary who is or might be
entitled to any fee, commission or payment from Buyer, Parent
or any Company or on their behalf in connection with the
negotiation, preparation, execution or delivery of any
Transaction Document or the consummation of the Transaction,
nor is there to Shareholder's Knowledge any basis for any
such fee, commission or payment to be claimed by any Person
against Buyer, Parent or any Company.
4.6. Intellectual Property.
None of Shareholder or its Affiliates (other than the
Companies and any Subsidiaries thereof) owns (i) Intellectual
Property used in the Cable and Satellite Business as
presently conducted or (ii) the Principal Products.
5. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER RELATING TO THE COMPANIES
Subject to the disclosures set forth in the Disclosure Schedule
(provided that the listing of an item in one section of the Disclosure
Schedule shall be deemed to be a listing in each section of the
Disclosure Schedule and to apply to any other representation and
warranty of Shareholder in this Agreement to the extent that is
reasonably apparent from a reading of such disclosure item that it
would also qualify or apply to such other section or representation
and warranty), Shareholder hereby represents and warrants to Buyer and
Parent as follows:
5.1. Organization.
5.1.1. Interactive is duly organized and validly existing
under the laws of the State of North Carolina and is
in good standing under the laws of such state.
Innovis is duly organized and validly existing under
the laws of the State of California and is in good
standing under the laws of such state. Each Company
has all requisite corporate power and authority to
carry on its business as it is currently conducted
and to own, lease and operate its assets and
properties in the manner such assets and properties
are now owned, leased or operated. Each Company is
duly qualified to transact business and is in good
standing as a foreign company in each jurisdiction
listed in Section 5.1.1 of the Disclosure Schedule.
5.1.2. True and complete copies of the certificate of
incorporation certified by the Secretary of State of
the state of incorporation, bylaws and share
certificate books and share transfer books, in each
case as amended to the date hereof, of each Company
have previously been delivered or made available to
Buyer. Neither Company is in violation of any of the
provisions of its certificate of incorporation or
bylaws. Each Company has properly filed or delivered
all reports, resolutions and other documents that
are required under applicable Laws to be filed with
or delivered to any Governmental Authority, except
where the failure to do so would not, or would not
reasonably be expected to, result in a Material
Adverse Effect.
5.1.3. All the minute books of each Company have been made
available to Buyer. No resolutions have been passed,
enacted, consented to or adopted by the directors
(or any committee thereof) or shareholders, except
for those contained in such minute books. The
corporate records of each Company have been
maintained in accordance with all applicable Laws
and are accurate in all material respects.
5.2. Authority.
Each Company has all requisite corporate power and authority
to execute and deliver each Transaction Document delivered or
to be delivered by it and to perform all of its obligations
thereunder. The Board of Directors of each Company, by
resolutions duly adopted at a meeting duly called and held or
by the unanimous written consent in lieu of meeting, has
determined that the Transaction is advisable and has approved
the Transaction Documents. Each Transaction Document to be
delivered by each Company has been or will be duly executed
and delivered by such Company and, when so executed and
delivered, will constitute the legal, valid and binding
obligation thereof, enforceable against it in accordance with
its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or affecting the enforcement of creditors'
rights in general and by general principles of equity.
5.3. Non-Contravention; No Material Adverse Effect Resulting from
Execution and Performance of Agreement.
With respect to each Company, none of the execution, delivery
or performance by it of any Transaction Document to which it
is party or the consummation by it of the Transaction does or
will, with or without the giving of notice or the lapse of
time or both, result in the creation of any Lien upon any of
its assets or properties, or conflict with, or result in a
breach or violation of, or a default under, or trigger any
"change of control" right in, or give rise to a right of
amendment, termination, cancellation or acceleration of any
obligation under (i) the certificate of incorporation or
bylaws of such Company, (ii) any Contract to which such
Company is party or (iii) any Law or License to which such
Company or its properties or assets is subject, which, in the
case of clauses (ii) or (iii) hereof, would, or would
reasonably be expected to, result in a Material Adverse
Effect. Neither the execution and delivery of this Agreement
by Shareholder or any of the Companies, the performance or
consummation by any of them of the transactions contemplated
hereby nor the change of control of the Companies due to the
sale of the Shares by Shareholder to Buyer will result,
immediately following consummation of the Transaction, in a
Material Adverse Effect.
5.4. Capitalization; Ownership.
The authorized share capital of Interactive consists of
50,000 shares of common stock and 50,000 shares of preferred
stock, of which 4,000 shares of common stock and 6,000 shares
of preferred stock are issued and outstanding. The authorized
share capital of Innovis consists of 2,000,000 shares of
common stock (voting) and 2,000,000 shares of common stock
(non-voting), of which 1000 shares of common stock (voting)
are issued and outstanding. The Shares are held, beneficially
and of record, directly or indirectly, by Shareholder. The
Shares outstanding on the date hereof are duly authorized and
validly issued, fully paid and non-assessable, and free and
clear of any Liens and were not issued in violation of, or
subject to, any preemptive rights applicable to any Company
or any Contract or Law applicable to any Company. There are
no bonds, debentures, notes or other Indebtedness of any type
whatsoever of any Company that are convertible into,
exchangeable or exercisable for Shares or other capital stock
of any Company or that have the right to vote (or are
convertible into, or exchangeable or exercisable for,
securities having the right to vote) on any matters on which
Shareholder, directly or indirectly, may vote. Except for the
Shares, there are no (i) outstanding shares, options,
convertible securities, warrants, calls, demands, purchase
rights, subscription rights, conversion rights, exchange
rights, or other similar Contracts, commitments, arrangements
or understandings relating to the issuance by any Company of
any securities of such Company, (ii) outstanding stock
appreciation, phantom stock, profit participation, or similar
rights with respect to any Company, (iii) voting trusts,
proxies, or other agreements or understandings with respect
to the voting of any Shares or any other securities of any
Company, and neither Company is obligated, pursuant to any
securities, options, warrants, calls, demands, Contracts
contingently or otherwise, to issue, deliver, sell, purchase
or redeem any share capital of such Company, any other
securities of such Company or any interest in such Company to
or from any Person or to issue, deliver, sell, purchase or
redeem any stock appreciation rights or other Contracts of
such Company relating to any share capital or other
securities of either Company to or from any Person or (iv)
instruments representing Indebtedness of either Company that
entitles the holder thereof to vote such Indebtedness at a
meeting of such Company's shareholders.
5.5. Subsidiaries.
Set forth on Section 5.5 of the Disclosure Schedule is a
complete and accurate list of each Subsidiary of each Company
and, for each Subsidiary of each Company: (i) its
jurisdiction of incorporation, formation or other
organization, (ii) its authorized capital stock or share
capital, (iii) the number of issued and outstanding shares or
share capital and (iv) the holder or holders of such shares.
Except for the ownership of each Company's Subsidiaries and
as set forth on Section 5.5 of the Disclosure Schedule,
neither Company owns beneficially or otherwise, directly or
indirectly, any capital stock or share capital of, or other
securities, equity or ownership interest in, or has any
obligation to form or participate in, any corporation,
company, partnership or other corporate Person. Each Company
is the record and beneficial owner of the equity interests in
the Subsidiaries of such Company set forth on Section 5.5 of
the Disclosure Schedule, which are owned by it free and clear
of any Liens. All of the outstanding shares of capital stock
or share capital of each Subsidiary of each Company are duly
authorized, validly issued, fully paid and non-assessable and
none of such shares were issued in violation of, or are
subject to, any preemptive rights applicable to the relevant
Company.
5.6. Governmental Approvals and other Consents.
No Consent of any Governmental Authority or any Consent of
any other Person is required to be obtained or made by or
with respect to either Company in connection with the
execution, delivery and performance of the Transaction
Documents by such Company or the consummation of the
Transaction (including but not limited to Consents required
in connection with the change in the control of the Companies
pursuant to the sale of the Shares by Shareholder to Buyer),
other than the Consents of any Governmental Authority set
forth in Section 5.6 of the Disclosure Schedule or the
Required Consents set forth in Section 4.4 of the Disclosure
Schedule.
5.7. Companies Financial Statements; No Undisclosed Liabilities.
5.7.1. Set forth on Section 5.7.1 of the Disclosure
Schedule are the audited consolidated and combined
balance sheet of the Companies and their
Subsidiaries as of December 31, 2004 (the "Companies
Audited Balance Sheet"), the unaudited consolidated
and combined balance sheet of the Companies and
their Subsidiaries as of December 31, 2003 (together
with the Companies Audited Balance Sheet, the
"Companies Balance Sheets") and the related
unaudited consolidated and combined statements of
operations and cash flows for the years ended
December 31, 2004 and December 31, 2003 (together
with the Companies Balance Sheets, the "Companies
Financial Statements"). Except as set forth on
Section 5.7.1 of the Disclosure Schedule, the
Companies Financial Statements were prepared in
accordance with GAAP, consistently applied. The
Companies Financial Statements present fairly in all
material respects the financial position, results of
operations and cash flows of the Companies at the
respective dates set forth therein and for the
respective periods covered thereby. Neither of the
Companies nor any of their Subsidiaries has entered
into any transaction involving a hedge or derivative
financial instrument (or any transaction pursuant to
which any of the Companies or any Subsidiary thereof
has waived certain royalties or other payments or
benefits that it would otherwise be entitled to
receive from any customer thereof). All accounts
receivable reflected in the Companies Balance Sheets
were actually made in the ordinary course of the
Companies' respective business. Shareholder has
delivered to Buyer a list of all receivables of the
Companies as of December 31, 2004, a copy of which
is attached as Section 5.7.1 of the Disclosure
Schedule.
5.7.2. Each Company has given Buyer or its representatives
full access to (i) all records and lists of such
Company pertaining to the assets of such Company,
(ii) all records and lists of such Company
pertaining to the personnel of such Company and
(iii) all financial books, ledgers, files and
reports of every kind maintained by such Company.
5.7.3. Neither Company has any Liabilities, of any kind
whatsoever, whether accrued, contingent, absolute,
determined, determinable, known or unknown or
otherwise, except for (i) Liabilities set forth,
reflected in, reserved against and disclosed in the
Companies Audited Balance Sheet; (ii) Liabilities
disclosed in the Disclosure Schedule; and (iii)
Liabilities incurred in the ordinary course of such
Company's business consistent with past practice.
5.7.4. As of the Closing Date, neither Company nor any of
their Subsidiaries has any Indebtedness and each
Company and its Subsidiaries has paid in its
entirety (x) all bonuses to employees accrued in
respect of 2004 and (y) all invoices overdue for
more than 30 days payable by a Company or its
Subsidiaries to ▇▇▇▇▇▇ Computer Services, Ltd. or
its assigns.
5.8. Absence of Certain Changes.
Since December 31, 2004, each Company and each of its
Subsidiaries has conducted its business only in the ordinary
course consistent with past practice, and neither Company nor
any Subsidiary of a Company has experienced any event that
would, or would reasonably be expected to, constitute a
Material Adverse Effect. Without limiting the generality of
the foregoing, from and after December 31, 2004, neither
Company nor any Subsidiary of a Company has:
5.8.1. Suffered any loss to its property (whether through
destruction, accident, casualty, expropriation,
condemnation or otherwise) or its business, or
incurred any liability, damage, award or judgment
for injury to the property or business of others or
for injury to any person (in each case, whether or
not covered by insurance) in each case in excess of
$250,000 in the aggregate;
5.8.2. Made any change outside the ordinary course of such
Companies' or such Subsidiaries' business in the
rate of compensation, commission, bonus or other
direct or indirect remuneration payable or to become
payable to any of its directors, officers, employees
or agents, or agreed or promised (orally or
otherwise) to pay, conditionally or otherwise, any
bonus or extra compensation or other employee
benefit to any of such directors, officers,
employees or agents;
5.8.3. Sold, assigned, leased or transferred any material
assets or properties, other than sales of inventory
in the ordinary course of business;
5.8.4. Made any material change in its accounting methods,
policies, practices or principles;
5.8.5. Amended its certificate of incorporation or bylaws;
5.8.6. Issued, delivered, pledged or otherwise encumbered,
sold or disposed of any shares of its capital stock
or other securities, or created, issued, delivered,
pledged or otherwise encumbered, sold or disposed of
any securities convertible into, or rights with
respect to, or options or warrants to purchase or
rights to subscribe to, any shares of its capital
stock or other securities, whether as a result of
any exercise thereof or otherwise;
5.8.7. Split, combined or reclassified any of its Shares or
issued or authorized the issuance of any other
securities in respect of, in lieu of or in
substitution for any of its Shares;
5.8.8. (i) entered into any employment agreement with or
for the benefit of any Person or terminated any such
employment agreement; (ii) paid any pension,
retirement allowance or other employee benefit not
required by any Plan, agreement or arrangement
existing as of June 30, 2004 to any Person, or (iii)
agreed or made binding promises (orally or
otherwise) to pay (conditionally or otherwise) or
otherwise committed itself (conditionally or
otherwise) to any additional pension, profit
sharing, bonus, incentive, deferred compensation,
stock purchase, share option, share appreciation,
group insurance, vacation pay, severance pay,
retirement or other employee benefit plan, agreement
or arrangement, or changed the terms of any existing
Plan or employee agreement or arrangement;
5.8.9. Materially changed or modified its general credit,
collection or payment policies, procedures or
practices, including acceleration of collections of
receivables, failure to make or delay in making
collections of receivables, waive or forgive any
receivables, provide credit to customers,
acceleration of payment of payables or other
Liabilities or failure to pay or delay in payment of
payables or other Liabilities;
5.8.10. Acquired or agreed to acquire by merging or
consolidating with, or by purchasing a substantial
portion of the capital stock or assets of, or by any
other manner, any business or any corporation,
partnership, limited liability entity, joint
venture, association or other business organization
or Person, or division, operating unit or product
line thereof;
5.8.11. Revalued for purposes of its accounting records, any
of its assets, including writing down the value of
its inventory or writing off notes or accounts
receivable;
5.8.12. Reversed any reserves, accruals or provisions,
existing as of December 31, 2004, that are related
to its revenue or accounts receivable, other than in
the ordinary course of business or as required by
GAAP;
5.8.13. Purchased any real property or entered into any
Lease (including any capitalized lease obligations);
5.8.14. Settled or compromised any Action of material value;
or
5.8.15. Entered into any agreement or Contract (other than
any Transaction Document) to take any of the types
of action described in sub clauses 5.8.1 through
5.8.14.
5.9. Tax Matters
5.9.1. All Tax Returns required to be filed by or on behalf
of each Company, its Subsidiaries, or any Affiliated
Group of which either Company or any Subsidiary
thereof is or has ever been a member, have been
timely filed with the appropriate Governmental
Authorities or extensions have been timely granted
and have not expired. All such Tax Returns were
correct and complete in all material respects,
except as otherwise set forth in Section 5.9.1 of
the Disclosure Schedule.
5.9.2. All Taxes for which either Company or any of its
Subsidiaries is liable that are due have been paid
in full or are being contested in good faith (and
such contest is disclosed in Section 5.9.2 of the
Disclosure Schedule) and, to the extent the
liabilities for such Taxes are not yet due or are
being contested in good faith, adequate reserves
have been established on the Companies Audited
Balance Sheet in accordance with GAAP.
5.9.3. There are no Liens for Taxes on any of the assets of
either Company or any of its Subsidiaries other than
Liens for Taxes not yet due and payable or that are
being contested in good faith through appropriate
proceedings (and such contest is disclosed on
Section 5.9.3 of the Disclosure Schedule).
5.9.4. Except as set forth in Section 5.9.4 of the
Disclosure Schedule, (a) there are no Actions,
audits, disputes or claims in progress, pending or
threatened in writing by any Governmental Authority
with respect to any Taxes for which either Company
or any of its Subsidiaries is or may be liable; and
(b) neither Company nor any of its Subsidiaries 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.
5.9.5. Except as set forth in Section 5.9.5 of the
Disclosure Schedule, (a) each Company and its
Subsidiaries have delivered to Buyer correct and
complete copies of all Tax Returns (other than those
portions of Shareholder's consolidated U.S. federal
Income Tax Returns and other combined or unitary Tax
Returns that do not relate to the Companies or any
Subsidiaries of the Companies) for the past 3 years
for which returns have been filed, and statements of
deficiencies assessed against or agreed to by such
Company or Subsidiary for any such period; and (b)
from and after December 31, 2004, neither Company
nor any of its Subsidiaries has changed any annual
Tax accounting period, settled or compromised any
Income Tax Liability or entered into any closing
agreement with any Governmental Authority.
5.9.6. Other than a group the common parent of which was
Shareholder, neither Company nor any of their
Subsidiaries is or for the past 5 years has been a
member of a consolidated, combined or similar group
filing Tax Returns. Neither Company nor any of their
Subsidiaries is bound by any Income Tax allocation
or sharing agreement with Shareholder or its
Affiliates or with any Governmental Authority.
5.9.7. Neither Company nor any of their Subsidiaries will
be required to include in a taxable period ending
after the Closing Date taxable income attributable
to income that accrued in a taxable period prior to
the Closing Date but was not recognized in such
prior taxable period, including as a result of the
installment method of accounting, the completed
contract method of accounting, the long-term
contract method of accounting, the cash method of
accounting or Section 481 of the Code or any
comparable provision of state or local, domestic or
foreign, Tax Law or for any other reason.
5.9.8. Neither Company nor any of their Subsidiaries has
been a United States real property holding
corporation within the meaning of Section 897(c)(2)
of the Code during the applicable period specified
in Section 897(c)(1)(A)(ii) of the Code or made an
election under Section 897(i) of the Code to be
treated as a domestic corporation for purposes of
Sections 897, 1445 and 6039C of the Code.
5.9.9. Each Company and its Subsidiaries has disclosed on
its federal Income Tax Returns all positions taken
therein that could give rise to a substantial
understatement of federal Income Tax within the
meaning of Section 6662 of the Code.
5.9.10. Neither Company nor any of their Subsidiaries has
ever participated in any listed transaction, as
defined in Treasury Regulation Section
1.6011-4(b)(2), required to be reported in a
disclosure statement pursuant to Treasury Regulation
Section 1.6011-4 and each of the Companies and its
Subsidiaries has complied with all reporting
requirements under Treasury Regulation Section
1.6011-4 for any reportable transaction.
5.9.11. No amount or other entitlement that could be
received (whether in cash or property or the vesting
of property) as a result of any of the transactions
contemplated by this Agreement (alone or in
combination with any other event) by any individual
employed by either Company or any of its
Subsidiaries who is a "disqualified individual" (as
such term is defined in Treasury Regulation Section
1.280G-1) under any compensation arrangement
currently in effect would be characterized as an
"excess parachute payment" (as such term is defined
in Section 280G(b)(1) of the Code) and no such
disqualified individual is entitled to receive any
additional payment from either Company or any of its
Subsidiaries in the event that the excise tax
required by Section 4999(a) of the Code is imposed
on such disqualified individual.
5.10. Assets and Property.
5.10.1. Each Company and each of its Subsidiaries has good
and valid title to all property, equipment and other
assets that it purports to own, including the
Principal Products (whether personal, tangible or
intangible), free and clear of any Lien and has
valid and enforceable leasehold interests in the
premises and the material equipment, furniture and
fixtures purported to be leased by it. Neither
Company nor any Subsidiary of a Company owns any
real property.
5.10.2. Section 5.10.2 of the Disclosure Schedule contains a
complete and accurate list of: (i) all real estate
and improvements leased, subleased or occupied by
each Company and each of its Subsidiaries pursuant
to a Lease (each, a "Leased Premises"), indicating
the leasehold ownership, full address and use of
each Leased Premises; and (ii) all Leases to which
either Company or any Subsidiary of a Company is a
party (including all Leases and subleases under
which such Company or such Subsidiary has granted
any interest in any of the Leased Premises, or any
portion thereof, to any Person).
5.10.3. Each Company and each of its Subsidiaries enjoys
peaceful and undisturbed possession of all of its
Leased Premises in accordance with and subject to
the terms of the respective Leases, copies of which
have been provided to Buyer. There are no
restrictions imposed by any Lease or other Contract
or, to the Knowledge of Shareholder, by Law that
preclude or restrict in any material respect the
ability to use such Leased Premises for the purposes
for which they are currently being used. Neither
Company nor any Subsidiary of a Company is in
default, and no notice of alleged default has been
received by either Company or any Subsidiary of a
Company, under any such Lease and to the Knowledge
of Shareholder no lessor or sublessee is in default
or alleged default thereunder. Neither the Companies
nor any Subsidiary of a Company has subleased,
licensed or otherwise granted anyone the right to
use or occupy any Leased Premises or any portion
thereof, neither the Companies nor any Subsidiary of
a Company has granted any security interest in any
Lease or any interest therein, and there are no
Liens on the estate or interest created by any such
Lease, except as may be set forth in Section 5.10.3
of the Disclosure Schedule.
5.10.4. The Companies and their respective Subsidiaries own
and have good title to, free and clear of any Lien,
or a valid leasehold interest in, license to, or
other contractual right to use, all material assets,
property (tangible or intangible), rights,
instruments, Contracts and privileges (including all
Intellectual Property and the Principal Products)
that are required in order to (i) conduct the Cable
and Satellite Business following consummation of the
Transaction in substantially the same manner as it
is conducted on the date hereof and as contemplated
to be conducted subsequent to the date hereof,
including with respect to the Collabrent Product and
(ii) service all of their customers in full
compliance with the Companies' respective agreements
with such customers, except, with respect to both
clauses (i) and (ii) of this paragraph, for certain
services and assets that may be utilized in
connection with performing such services that may be
provided to the Companies and their respective
Subsidiaries by Shareholder following the date
hereof pursuant to the Ancillary Documents,
including but not limited to the licenses scheduled
in Section 5.10.4 of the Disclosure Schedule.
5.10.5. The facilities and equipment owned or leased by each
Company and each of its Subsidiaries are in all
material respects in good operating condition and
repair and free from any material defects,
reasonable wear and tear excepted, and are in all
material respects suitable for the uses for which
they are being used and are performing the functions
for which they were intended.
5.10.6. Shareholder conducts, directly or indirectly, no
Cable and Satellite Business, other than through its
ownership of the Companies and their Subsidiaries.
The Companies' assets, together with their rights
under the Ancillary Documents, are sufficient to
satisfy all obligations under the Customer Contracts
in effect as of the date hereof, other than
obligations relating to the future development of
software.
5.11. Intellectual Property.
5.11.1. Set forth in Section 5.11.1 of the Disclosure
Schedule are (i) all patents, patent applications,
patent and invention disclosures awaiting filing,
domain names, software, mask work and material
copyright applications and registrations, and
trademarks and material trademark applications and
registrations which constitute Business Intellectual
Property, together with the name of the owner of
each thereof, in each jurisdiction in which
registration for any of the foregoing was made; (ii)
a listing of all material software, products and
services under development by the Companies and the
Subsidiaries of the Companies (including any such
products or services that have been developed using
any of the items referred to in clause (i) hereof);
(iii) all Business Intellectual Property licensed by
either Company from another Person ("Third Party
IP") that imposes annual payment obligations in
excess of $250,000; and (iv) to the extent not
otherwise covered in clauses (i), (ii) or (iii)
above, all other Business Intellectual Property
pertaining to the Cable and Satellite Business that
imposes annual payment obligations in excess of
$250,000.
5.11.2. Except as set forth in Section 5.11.2 of the
Disclosure Schedule, the Owned IP does not include
any software code that is subject to the terms of
any general or limited public license the terms of
which could require or condition the use or
distribution of such Owned IP on the disclosure,
licensing, or distribution of any source code of any
portion of the Owned IP (any of the foregoing,
referred to as "Open Source Materials").
5.11.3. Set forth in Section 5.11.3 of the Disclosure
Schedule is a list of all material Contracts of each
Company or any Subsidiary thereof or Shareholder
under which such Company or such Subsidiary or
Shareholder has licensed to any Person any Owned IP
or Third Party IP.
5.11.4. As of the date hereof:
5.11.4.1. each Company and its Subsidiaries owns all
right, title and interest in and to the
Owned IP and has complied with all
material terms and conditions of all
licenses for the use of the Third Party
IP;
5.11.4.2. the use by the Companies of the Owned IP
does not infringe or has not infringed any
Intellectual Property rights owned or held
by any other Person, or constitute an
unlawful use or misappropriation of, any
Intellectual Property rights owned or held
by any other Person;
5.11.4.3. to Shareholder's Knowledge, there is no
infringement or misappropriation by any
Person of any Business Intellectual
Property owned by or licensed exclusively
to either Company or any Subsidiary of a
Company;
5.11.4.4. neither Company nor any Subsidiary thereof
has agreed with any Person not to ▇▇▇ or
otherwise enforce any legal rights with
respect to any Business Intellectual
Property;
5.11.4.5. all agreements between each Company and
its Subsidiaries and any other Person that
provide for the use, manufacture, supply,
distribution, sale, license, transfer,
marketing, promotion, development,
improvement, maintenance or support of any
of the Owned IP are on a non-exclusive
basis; and
5.11.4.6. all Intellectual Property assigned by DST
Output, LLC to Innovis pursuant to the
DDP/F Software Assignment Agreement,
together with all rights to Intellectual
Property granted by DST Output, LLC to
Innovis pursuant to the Factory Control
Source Code License Agreement, constitute,
in the aggregate, all Intellectual
Property rights that cover or are
otherwise necessary for Innovis to perform
all of the "DDP/F Operations and Services"
(as defined in the Output Services
Agreement) regardless of whether such
DDP/F Operations and Services are
performed, in whole or in part, by DST
Output, LLC or Innovis.
5.11.5. Each Company and its Subsidiaries has taken all
steps in its or their reasonable business discretion
(including measures to protect secrecy and
confidentiality) to secure, maintain and protect
such Company's or such Subsidiary's right, title and
interest in and to all of its Owned IP, but not
including filing applications for registration of
copyright and applications for patents relating to
its Owned IP.
5.11.6. To Shareholder's Knowledge, the Business
Intellectual Property of each Company and its
Subsidiaries constitutes all Intellectual Property
necessary to conduct fully the business of such
Company or such Subsidiary in substantially the same
manner as currently conducted, including with
respect to the use and exploitation of the
Collabrent Product.
5.12. Contracts.
5.12.1. Section 5.12.1 of the Disclosure Schedule lists the
following Contracts (per the sub-clause headings
referenced below) to which either Company or any of
its Subsidiaries is a party (other than those set
forth on Sections 5.10.2 (Leases) and 5.11.3 (IP
licenses) of the Disclosure Schedule), provided that
(except with respect to sub Section 5.12.15) such
Company or such Subsidiary has outstanding rights,
Liabilities or obligations thereunder:
5.12.1.1. all Contracts for the lease (whether as
lessor or lessee) of personal property to
or from such Company or such Subsidiary
which provide for lease payments in excess
of $250,000 annually;
5.12.1.2. all Contracts (i) with suppliers for the
purchase of inventories, supplies, spare
parts or real, personal or mixed property,
or for the receipt of services, which
provide for payments from any Company in
excess of $250,000 annually (the "Major
Suppliers") and (ii) with customers (the
"Customer Contracts") for the sale of
products or for the furnishing of services
(the "Major Customers");
5.12.1.3. all Contracts concerning any partnership,
joint venture, joint development or other
cooperation arrangement;
5.12.1.4. all Contracts providing for management
services or services of independent
contractors or consultants (or similar
arrangements) providing for payments from
such Company in excess of $250,000
annually;
5.12.1.5. all Contracts for the purchase or sale of
any business, corporation, partnership,
joint venture, association or other
business organization or any division,
material assets, operating unit or product
line thereof;
5.12.1.6. all Contracts relating to or evidencing
Indebtedness for money borrowed by such
Company or such Subsidiary (or the
creation, incurrence, assumption, securing
or guarantee thereof) and all derivative
agreements in excess of $250,000 annually;
5.12.1.7. all Contracts under which (i) any Person
has directly or indirectly guaranteed any
Indebtedness for money borrowed or other
Liabilities of such Company or such
Subsidiary or (ii) such Company or such
Subsidiary has directly or indirectly
guaranteed any Indebtedness for money
borrowed or other Liabilities of any
Person (in each case other than
endorsements for the purpose of collection
in the ordinary course of business);
5.12.1.8. all Contracts under which such Company or
such Subsidiary has made any material
advance, loan, extension of credit or
capital contribution to, or other material
investment in, any Person, including
employees, or which involve a sharing of
material profits, losses, costs or
Liabilities by such Company or such
Subsidiary with any other Person, other
than trade accounts payable arising in the
ordinary course of business of such
Company or such Subsidiary;
5.12.1.9. all Contracts providing for or containing
any mortgage, pledge, security agreement
or deed of trust or other Contract
granting a Lien upon any assets or
properties of such Company or such
Subsidiary;
5.12.1.10. all Contracts that impose annual payment
obligations in excess of $250,000 not
otherwise listed herein providing for
indemnification of any Person with respect
to Liabilities relating to any current or
former business of such Company or such
Subsidiary;
5.12.1.11. all Contracts which materially limit or
purport to materially limit the ability of
such Company or such Subsidiary to compete
in any line of business or with any Person
or in any geographic area or which
materially limit or purport to materially
limit or restrict the ability of such
Company or such Subsidiary with respect to
the development, manufacture, marketing,
sale or distribution of, or other rights
with respect to, any products or services;
5.12.1.12. all Contracts with any Governmental
Authority;
5.12.1.13. all Contracts containing any restrictions
with respect to payment of dividends or
any other distributions in respect of the
capital stock of such Company or such
Subsidiary which will continue in effect
after the date hereof;
5.12.1.14. all Contracts between or among such
Company or such Subsidiary, on the one
hand, and any Affiliate, officer, director
or shareholder of such Company or any
Affiliate of any thereof, on the other
hand;
5.12.1.15. all foreign currency forward exchange
Contracts;
5.12.1.16. all Contracts relating to employment,
termination, bonuses, employee options or
severance;
5.12.1.17. all Contracts concerning the issuance,
delivery, pledge or other encumbrance,
sale or disposal of any shares of capital
stock or other securities of such Company
or such Subsidiary or the creation,
issuance, delivery, pledge or other
encumbrance, sale or disposal of any
securities convertible into, or rights
with respect to, or options or warrants to
purchase or rights to subscribe to, any
shares of capital stock or other
securities of such Company or such
Subsidiary;
5.12.1.18. all Contracts granting a proxy or relating
to a voting arrangement regarding any of
the Shares;
5.12.1.19. all Contracts granting to a third party a
power of attorney to act on behalf of
either Company or any of its Subsidiaries;
5.12.1.20. any Contract between either Company and
its Major Customers involving change in
control provisions;
5.12.1.21. any Contract providing for any charitable
contribution in excess of $10,000 or for
any political contribution; and
5.12.1.22. all Contracts of the Companies and their
Subsidiaries that impose obligations in
excess of $250,000 and that are not
described in any of the categories
specified in this Section 5.12.1.
The Contracts set forth or required to be set forth
in Sections 5.12.1, 5.11.3 (IP licenses) or 5.10.2
(Leases) of the Disclosure Schedule are referred to
herein collectively as "Material Contracts". True
and complete copies of all of the Material
Contracts have heretofore been made available to
Buyer or its representatives.
5.12.2. Each Material Contract is in full force and effect
and is legal, valid and binding on the applicable
Company or Subsidiary party thereto and to the
Knowledge of Shareholder the other party or parties
thereto.
5.12.3. Each Company and its Subsidiaries and each of the
other party or parties thereto have performed in all
material respects all obligations required to be
performed by them under each of such Company's or
such Subsidiary's Material Contract. To the
Knowledge of Shareholder, no event has occurred with
respect to such Company or such Subsidiary or any
other Person that (with or without the lapse of time
or the giving of notice or both) contravenes,
conflicts with or results in a violation or breach
of, or gives such Company or such Subsidiary or any
other Person the right to declare a default or
exercise any remedy under, or to accelerate the
maturity of, or to cancel or terminate, any Material
Contract to which such Company or such Subsidiary is
a party. To the Knowledge of Shareholder, no party
to any Material Contract has repudiated any
provision thereof since January 1, 2003. No party to
any Material Contract has terminated any Material
Contract and neither Company nor any Subsidiary
thereof has received any notice that any other party
or parties to any Material Contract intend to
exercise any right of cancellation or termination
thereof.
5.13. Insurance.
Each Company and its Subsidiaries maintains policies of fire
and casualty, liability and other forms of insurance in such
amounts, with such deductibles and against such risks and
losses as are, in such Company's or such Subsidiary's
judgment, reasonable for the business and assets of each
Company, respectively. Section 5.13 of the Disclosure
Schedule sets forth a complete and accurate list of all
insurance policies and surety bonds which each Company and
its Subsidiaries currently maintains through Shareholder with
respect to its assets, Liabilities, employees, officers,
directors or other representatives (the "Group Insurance
Policies") and all insurance policies and surety bonds which
each Company and its Subsidiaries currently maintains in its
own name with respect to its assets, Liabilities, employees,
officers, directors or other representatives (together with
the Group Insurance Policies, the "Insurance Policies"). Each
of the Insurance Policies is in full force and effect
immediately prior to the date of this Agreement; provided
that each of the Group Insurance Policies shall lapse upon
consummation of the Transaction. Each Company and its
Subsidiaries is current in all premiums or other payments due
under its Insurance Policies and has otherwise performed in
all material respects all of its respective obligations
thereunder. Each Company and its Subsidiaries has given
timely notice to the insurer under each of its Insurance
Policies of all claims that may be insured thereby. Neither
Company nor any Subsidiary thereof has received any notice
that any of its Insurance Policies is not in full force and
effect immediately prior to the date of this Agreement.
Shareholder has no Knowledge of any facts that, under the
terms of either Company's or a Subsidiary's thereof Insurance
Policies, would cause (or would be reasonably likely to
cause) any such Insurance Policy not to be in full force and
effect; provided that each of the Group Insurance Policies
shall lapse upon consummation of the Transaction. Neither
Company nor any Subsidiary thereof has received during the
past three years from any insurance carrier to which it has
applied for any insurance or with which it has carried any
insurance (i) any refusal of coverage or notice of limitation
of coverage or any notice that a defense will be afforded
with reservation of rights (except for limitations standard
in the industry) or (ii) any notice of cancellation or any
other written notice that any insurance policy is no longer
in full force or effect or will not be reviewed or that the
issuer of any insurance policy is not willing or able to
perform its obligations thereunder. No representation or
warranty set forth in this Section 5.13 shall be construed so
as to apply to any Plan maintained by either Company or any
of their Subsidiaries.
5.14. Litigation.
5.14.1. As of the date hereof (i) there is no judgment,
ruling, order, writ, decree, stipulation,
settlement, injunction or determination by or with
any arbitrator, court or other Governmental
Authority to which either Company or any Subsidiary
thereof or any director or officer thereof in his or
her capacity as such is party or by which either
Company or any director or officer thereof in his or
her capacity as such is bound, and which relates to
such Company or such Subsidiary, the assets,
properties, Liabilities or employees of such Company
or such Subsidiary, the business of such Company or
such Subsidiary, any Transaction Document or the
Transaction and (ii) neither any Company nor any
Subsidiary thereof is party to or engaged in or, to
the Knowledge of Shareholder, threatened with any
Action which relates to such Company or such
Subsidiary, the assets, properties, Liabilities or
employees of such Company or such Subsidiary, the
business of such Company or such Subsidiary, any
Transaction Document or the Transaction and neither
any Company nor any Subsidiary thereof has any
intention of initiating any Claim against any
Person.
5.14.2. None of the officers or directors (in their
capacities as such) of either Company or any
Subsidiary thereof is in default under or with
respect to any judgment, ruling, order, writ,
decree, stipulation, settlement, injunction or
determination described in Section 5.14.1. None of
the Actions required to be set forth on Section
5.14.1 of the Disclosure Schedule, if adversely
determined, will result in a Material Adverse
Effect.
5.14.3. No order has been made, petition presented or
resolution passed for the winding-up of either
Company or any Subsidiary thereof and no meeting has
been convened for the purposes of winding-up either
Company or any Subsidiary thereof. No steps have
been taken by either Company or any Subsidiary
thereof or by any other Person for the appointment
of an administrator or receiver of all or any part
of any of such Company's or such Subsidiary's
assets. Neither Company nor any Subsidiary thereof
has made or proposed any arrangement or composition
with its creditors or any class of its creditors.
Neither Company nor any Subsidiary thereof has
stopped paying its debts as they fall due.
5.15. Employee Matters.
5.15.1. Neither Company nor any Subsidiary thereof is a
party to any Contract regarding collective
bargaining or other Contract with any labor or trade
union or collective bargaining group representing
any employee of such Company or such Subsidiary, nor
does any labor or trade union or collective
bargaining agent represent any employee of such
Company or such Subsidiary. No Contract regarding
collective bargaining has been requested by, or is
under discussion between management of either
Company or Subsidiary thereof (or any association of
which either Company is a member or otherwise a
participant) and any group of employees of such
Company or such Subsidiary, nor are there any
representation proceedings or petitions seeking a
representation proceeding presently pending against
either Company or Subsidiary thereof, nor are there
any other current activities to organize any
employees of either Company or Subsidiary thereof
into a collective bargaining unit to the Knowledge
of Shareholder. There are no unfair labor practice
charges or complaints pending or, to the Knowledge
of Shareholder, threatened against either Company or
Subsidiary thereof.
5.15.2. Section 5.15.2 of the Disclosure Schedule sets forth
a true, accurate and complete list of all of each
Company's and each Subsidiary's thereof directors
and officers and includes a listing of each of such
director's and officer's compensation terms relating
to commencement of employment or directorship,
salary, bonuses and fringe benefits, as of the date
hereof. Neither Company nor any Subsidiary thereof
is delinquent in any payment to any of its employees
for any wages, salaries, commissions, bonuses or
other direct compensation for any services performed
by any such employee to the date hereof or amounts
required to be reimbursed to such directors,
officers or employees. Upon termination of the
employment of any employees or the directorship of
any director, neither the Company nor any Subsidiary
thereof that is currently the employer of such
employee or on whose board such person acts as a
director nor Buyer will by reason of the Transaction
or anything done prior to the date hereof be liable
to any of such employees or directors for severance
or any other payments (other than accrued salary or
amounts required to be paid under applicable Laws,
payments under Plans maintained by Shareholder or
payments under employment Contracts for which
Shareholder is responsible).
5.15.3. Each Company and its Subsidiaries has previously
delivered to Buyer or its representatives true,
accurate and complete copies of all employment,
consulting, termination and severance Contracts with
or for the benefit of, or otherwise relating to, any
directors, officers, employees, consultants or
independent contractors of such Company or such
Subsidiary. Except for the provisions of the
Employment Contract of the President of the
Companies, none of the execution, delivery or
performance of any Transaction Document or the
consummation of the transactions contemplated hereby
or thereby will result in any obligation to pay any
directors, officers, employees, consultants,
independent contractors, former directors, officers,
employees, consultants or independent contractors of
either Company or any Subsidiary thereof severance
pay or termination, retention or other benefits
(other than payments under Plans maintained by
Shareholder or payments under employment Contracts
for which Shareholder is responsible).
5.15.4. Neither any officer nor any other employee listed in
Section 5.15.2 of the Disclosure Schedule has given
notice to, or received notice from, such Company or
such Subsidiary that is such officer's or key
employee's employer or any of its representatives
that any such officer's or key employee's employment
or service may be terminated or advised such Company
or such Subsidiary of an intention to give such
notice to, or is expected to receive notice from,
such Company or such Subsidiary or any of its
representatives that any such officer's or key
employee's employment or service may be terminated,
in each case, at, prior to or immediately after the
date hereof, in or without connection to the
consummation of the Transaction.
5.15.5. Each Company and its Subsidiaries has delivered or
made available to Buyer or its representatives true,
accurate and complete copies of (i) each of such
Company's Plans that have been reduced to writing
and all amendments thereto and (ii) all trust
agreements or insurance contracts, maintained in
connection with any such Plan.
5.15.6. Each Company and its Subsidiaries has at all
relevant times complied in all material respects
with all of its obligations under each applicable
Law with respect to the employment of its employees,
including with respect to the health and safety at
work of its employees, and there are no claims
pending or, to the Knowledge of Shareholder,
threatened by any party in respect of employment or
any accident or injury. No representation or
warranty set forth in this Section 5.15.6 shall be
construed so as to apply to any Plan maintained by
either Company or any of their Subsidiaries.
5.15.7. Neither Shareholder nor any Affiliate of Shareholder
has retained or agreed to retain, as an employee or
an independent contractor, or transferred to the
Shareholder or any Affiliate thereof, any employee
of the Companies or their Subsidiaries.
5.16. Legal Compliance.
5.16.1. As of the date hereof, (i) each Company and its
Subsidiaries is in compliance in all material
respects and since its incorporation has complied in
all material respects with all Laws and Licenses
applicable to it, including all Laws relating to the
exportation of goods, services and products and
export compliance and control, (ii) no current
claims or complaints from any Governmental
Authorities or other Persons have been received by
either Company, Shareholder or any Affiliate thereof
related to or affecting either Company or any
Subsidiary thereof and, to the Knowledge of
Shareholder, no claims or complaints are threatened,
in each case alleging that either Company or any
Affiliate thereof is in violation of any Laws or
Licenses applicable to such Company or such
Subsidiary, and (iii) no investigation, inquiry, or
review by any Governmental Authority with respect to
either Company or any Subsidiary thereof is pending
or, to the Knowledge of Shareholder, threatened.
5.16.2. Neither any Company nor any Subsidiary thereof nor
any director, officer, agent, employee to the
Knowledge of Shareholder, or other Person associated
with or acting on behalf thereof has used any
corporate funds for any unlawful contributions,
gifts, entertainment or other unlawful expenses
relating to political activity, made any unlawful
payment to any Governmental Authority or
governmental, administrative or regulatory official
or employee or to any political party or campaign
from corporate funds or made any bribe, unrecorded
rebate, payoff, influence payment, kickback or other
unlawful payment to any Governmental Authority.
Neither any Company nor any Subsidiary thereof nor
any director, officer, agent, employee, or to the
Knowledge of Shareholder, any other Person
associated with or acting on behalf thereof, has
accepted or received any unlawful contributions,
payments, gifts or expenditures.
5.16.3. No representation or warranty set forth in this
Section 5.15.6 shall be construed so as to apply to
any Plan maintained by either Company or any of
their Subsidiaries.
5.17. Affiliate Transactions.
There are no Contracts between either Company or an Affiliate
of either Company, on the one hand, and Shareholder or any
Affiliate of Shareholder on the other hand, except for the
Ancillary Agreements. Section 5.17 of the Disclosure Schedule
includes (i) a list of all services that were granted by
Shareholder or any Affiliate thereof (other than any Company
or any of Subsidiary of a Company) to any of the Companies or
their Subsidiaries during the 12-month period prior to the
date hereof, (ii) a list of all services that were granted by
the Companies or their Subsidiaries to Shareholder or any
Affiliate thereof (other than any Company or any Subsidiary
of a Company) during the 12 month period prior to the date
hereof and (iii) a list of all services and products sold or
provided, as the case may be, by any of the Companies or
their Subsidiaries during the 12-month period prior to the
date hereof, which products and services were, at the time of
the sale or provision thereof, owned by Shareholder or any
Affiliate thereof (other than any Company or any Subsidiary
of a Company), in each case, other than services or products
to be provided under the Ancillary Agreements. As of the
Closing Date and thereafter, the Companies and their
Subsidiaries shall have no obligations, direct or indirect,
contingent or otherwise, owing to the Shareholder or any of
its Affiliates, including payables, other than the
obligations contemplated by this Agreement and the Ancillary
Documents.
5.18. No Public Offer.
Neither any Company nor anyone acting on its behalf has
offered securities of such Company or any part thereof for
issuance or sale to, or solicited any offer to acquire any of
the same from, anyone so as to make the sale of the Shares
hereunder not exempt from the registration requirements of
any Law. None of either Company's securities have been
offered or sold in such a manner as to make the sale of such
securities not exempt from such registration requirements,
and all such securities have been offered and sold in
compliance with all applicable securities Laws.
5.19. Brokers' Fees.
Neither any Company nor any of its officers, directors or
other Affiliates has authorized or retained any Person to act
as an investment banker, broker, finder or other intermediary
who is or might be entitled to any fee, commission or payment
from such Company, Shareholder, Parent or Buyer in connection
with the negotiation, preparation, execution or delivery of
any Transaction Document or the consummation of the
Transaction.
5.20. Customers and Suppliers.
5.20.1. Set forth in Section 5.20.1 of the Disclosure
Schedule is a list of the dollar amount of sales or
services to each Major Customer as of the 12-month
period ending December 31, 2004. Since December 31,
2004, there has not been (i) any change in any
material term (including credit terms) of the sales
agreements or related agreements with any such Major
Customer or (ii) any termination of, or any oral or
written communication from any such Major Customer
(or any of its officers, directors or other
representatives) relating to such Major Customer's
consideration of, or determination to, terminate
(including through non-renewal) or modify in a
manner materially adverse to such Company or any
Subsidiary thereof (A) any Contract between any such
Major Customer and such Company or any Subsidiary
thereof or (B) its business relationship with such
Company or any Subsidiary thereof. As of the date
hereof, none of the Major Customers has notified
either Company of its intent to cease to do business
with any Company, or substantially reduce or delay
its business with any Company. None of the Major
Customers has notified any Company or Shareholder in
writing that it is threatened with bankruptcy or
insolvency or that it is unable for any other reason
to continue its business relationship with the
Company as it exists on the date hereof.
5.20.2. As of the date hereof, no Major Supplier has
notified either Company of its intent to cease to do
business with any Company, or substantially reduce
or delay its business with any Company.
5.21. Licenses and Permits.
Each Company and each of its Subsidiaries have all
governmental licenses, authorizations and Consents required
to carry on the business thereof as currently conducted,
except as would not have a Material Adverse Effect. Section
5.21 of the Disclosure Schedule sets forth a complete and
correct list of each license, franchise, permit, order,
registration, certificate, approval or other similar
authorization, in each case, issued by a Governmental
Authority and obtained in connection with operating the
business of such Company and its Subsidiaries (collectively,
the "Permits"), and each pending application for any Permit,
together with the name of the Governmental Authority or
entity issuing such Permit or with which such application is
pending. Each Permit is valid and in full force and effect,
neither the respective Company nor any of its Subsidiaries is
or has been in material violation of or default under, and,
to Shareholder's Knowledge, no condition exists that with
notice or lapse of time or both would constitute a material
violation of or default under, any Permit, (iii) no
proceeding is pending or, to Shareholder's Knowledge,
threatened, to revoke or limit any Permit, and (iv) none of
the Permits will be terminated or impaired or become
terminable, in whole or in part, as a result of the
consummation of the Transaction. All such Permits are
renewable by their terms or in the ordinary course of
business without the need to comply with any special
qualification procedures or to pay any amounts other than
routine filing fees. Each Company and its Subsidiaries are in
compliance in all material respects with the terms of their
Permits, and neither any Company nor any of its Subsidiaries
has received written notice of violation of any Permit.
5.22. Non-Competition Agreements.
None of Shareholder or any Affiliate or Subsidiary of
Shareholder, including the Companies and their Subsidiaries,
has entered into or is otherwise a party to any agreement
that restricts, or as a result of the consummation of the
Transaction would restrict, the ability or authority of
either Company to compete with the line of businesses in
which the Companies are presently engaged.
5.23. Indebtedness to Shareholder.
As of the date hereof, neither Company is indebted in any
manner to Shareholder or to any Affiliate thereof.
5.24. Environmental Matters.
5.24.1. The Companies and each of their Subsidiaries are,
and have been, in compliance in all material
respects with all Environmental Laws, and neither
the Companies nor any of their Subsidiaries has
received any written communication that alleges that
the Companies or any of their Subsidiaries is in
violation of, or has liability under, any
Environmental Law.
5.24.2. There are no Environmental Claims pending or, to the
Knowledge of Shareholder, threatened, against the
Companies or any of their Subsidiaries.
5.24.3. There have been no Releases of any Hazardous
Material that could reasonably be expected to form
the basis of any Environmental Claim against the
Companies or any of their Subsidiaries or against
any Person whose liabilities for such Environmental
Claims the Companies or any of their Subsidiaries
has, or may have, retained or assumed, either
contractually or by operation of law.
6. REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
Each of Buyer and Parent hereby jointly and severally represents and
warrants to Shareholder as follows:
6.1. Organization.
Each of Buyer and Parent is a corporation duly organized,
validly existing and (to the extent applicable in its
jurisdiction of incorporation) in good standing under the
laws of its jurisdiction of incorporation. Each of Buyer and
Parent has all requisite corporate power and authority to
carry on its business as it is currently conducted and to
own, lease and operate its properties where such properties
are now owned, leased or operated.
6.2. Authority.
Each of Buyer and Parent has all requisite corporate power
and authority to execute and deliver each Transaction
Document delivered or to be delivered by it and to perform
all of its obligations thereunder. The execution, delivery
and performance by Buyer or Parent, as applicable, of each
Transaction Document delivered or to be delivered by Buyer or
Parent, as applicable, and the consummation by Buyer or
Parent, as applicable, of the Transaction have been duly
authorized by all necessary and proper action on its part.
This Agreement and each other Transaction Document to which
Buyer or Parent is party has been duly executed and delivered
by Buyer or Parent, as applicable, and constitutes its legal,
valid and binding obligation, enforceable against Buyer or
Parent, as applicable, in accordance with its terms, except
as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws
relating to or affecting the enforcement of creditors' rights
in general and by general principles of equity.
6.3. Non-Contravention.
None of the execution, delivery or performance by Buyer or
Parent, as applicable, of any Transaction Document to which
it is a party or the consummation by Buyer or Parent, as
applicable, of the Transaction does or will, with or without
the giving of notice or the lapse of time or both, conflict
with, or result in a breach or violation of, or a default
under, or give rise to a right of amendment, termination,
cancellation or acceleration of any obligation under (i) any
organizational or charter document (or similar organizational
documents) of Buyer or Parent, as applicable, (ii) any
Contract of Buyer or Parent, as applicable, or (iii) any Law
or License to which Buyer or Parent, as applicable, or its
properties or assets are subject.
6.4. Governmental and other Consents.
No Consent of any Governmental Authority or any other Person
is required to be obtained or made by or with respect to
Buyer or Parent, as applicable, in connection with the
execution, delivery and performance by Buyer or Parent, as
applicable, of any Transaction Documents to which Buyer or
Parent, as applicable, is a party or the consummation by
Buyer or Parent, as applicable, of the Transaction, other
than the Consents set forth on Exhibit 6.4 hereto, all of
which Consents have been obtained prior to the date hereof.
6.5. Brokers' Fees.
Neither Buyer, nor Parent nor any of their respective
Affiliates has authorized or retained any Person to act as an
investment banker, broker, finder or other intermediary who
is or might be entitled to any fee, commission or payment
from either Company or from Shareholder in connection with
the negotiation, preparation, execution or delivery of any
Transaction Document or the consummation of the Transaction.
7. COVENANTS
7.1. Non-Competition.
7.1.1. For a period of four (4) years after the date
hereof, without the prior written consent of Buyer,
Shareholder will not, and Shareholder will cause
each of its Affiliates not to, directly or
indirectly, alone or in association with any other
Person, (i) acquire or own in any manner, any
interest in any Person that is engaged, (ii)
participate in the management, as a consultant,
advisor or otherwise, of any Person that is engaged,
or (iii) otherwise engage in or make any of its
assets available for use, in the Cable and Satellite
Business (the "Restricted Business"), including, but
not limited to, through investments in such business
or the licensing of technology for use in, or
distribution or promotion of, such business.
7.1.2. The restriction in Section 7.1.1 shall not operate
to prohibit Shareholder or any of its Affiliates
from:
7.1.2.1. acquiring and thereafter managing and
operating any business, company or group
which is engaged in any Restricted
Business and in respect of which
Shareholder or any of its Subsidiaries has
a majority shareholding or other
controlling interest, if the Restricted
Business is responsible for not more than
Ten Percent (10%) of the aggregate annual
operating revenues of such acquired
business, company or group as of the time
of such acquisition);
7.1.2.2. acquiring an interest in a business,
company or group which is engaged in a
Restricted Business in respect of which
Shareholder or any of its Affiliates does
not have a shareholding exceeding 5%;
7.1.2.3. continuing with any business or activity
carried on at the date hereof by
Shareholder or any of its Subsidiaries
(and not forming part of the Cable and
Satellite Business) and any reasonable
extension of such business or activity in
any market or industry; provided, however,
that such business or activity does not
directly compete with any of the Companies
in the Restricted Business.
7.2. Non-Solicitation of Employees.
7.2.1. For a period of two (2) years hereafter, without the
prior written consent of Buyer, Shareholder will not
and Shareholder will cause each of its Affiliates
not to, (i) directly solicit as an employee,
independent contractor or consultant, any person
employed by Company, Buyer or any Affiliate on the
date of this Agreement after giving effect to the
transactions hereunder; (ii) directly induce or
attempt to induce any such employee to terminate his
or her employment or other relationship with either
Company, Buyer or any Affiliate thereof by
resignation, retirement or otherwise. Nothing herein
shall limit Shareholder or any of its Affiliates
from employing or offering employment to any person
employed by either Company as of the date hereof,
after such person's employment with such Company is
terminated, or who responds to a general
advertisement or solicitation of employees by
Shareholder or any of its Affiliates.
7.2.2. For a period of two (2) years hereafter, without the
prior written consent of Shareholder, the Buyer will
not and will cause each of the Companies and its
Affiliates not to (i) directly solicit as an
employee, independent contractor, or consultant, any
person employed by Shareholder or any Affiliate on
the date of this Agreement after giving effect to
the transactions hereunder; (ii) directly induce or
attempt to induce any such employee, independent
contractor or consultant to terminate his or her
employment or other relationship with Shareholder or
any Affiliate thereof by resignation, retirement or
otherwise. Nothing herein shall limit Buyer, the
Companies, or any Affiliates of Buyer from employing
or offering employment to any person employed by
Shareholder or any of its Affiliates as of the date
hereof, after such person's employment with
Shareholder or any of its Affiliates is terminated,
or who responds to a general advertisement or
solicitation of employees by Buyer, the Companies or
any Affiliates of Buyer. Furthermore, nothing herein
shall limit Buyer, the Companies, or any Affiliates
of Buyer from employing or offering employment to
any person employed by Shareholder or any of its
Affiliates at the Winchester Data Center who, as of
the date hereof, is primarily occupied with
servicing the Companies, at such future time as the
Companies no longer use the Winchester Data Center
to operate any portion of the Cable and Satellite
Business.
7.2.3. Neither Shareholder nor any Affiliate of Shareholder
will enforce any non-competition, non-solicitation
or similar agreement that would prevent any employee
of the Companies or their Subsidiaries from working
for Buyer or any Affiliate of Buyer.
7.3. Confidential Information.
7.3.1. For a period of two (2) years after the date hereof,
Shareholder will, and will cause its Affiliates,
directors, officers, employees and other
representatives to, maintain in strict confidence
any and all Confidential Information. It is
understood that Shareholder shall not have any
liability hereunder with respect to information that
(a) is in or, through no fault of Shareholder, comes
into the public domain, (b) Shareholder is required
to disclose pursuant to Law or regulation, (c) is
independently developed by Shareholder, without
violating the terms of this Agreement or any other
Contract between Shareholder and either Company,
Buyer or Parent or (d) is lawfully disclosed to
Shareholder by a third party who is not in breach of
an obligation of confidentiality.
7.3.2. Shareholder agrees to limit its internal disclosure
of Confidential Information only to those of its
employees or consultants who need to know such
information and who have signed a written agreement
binding them to terms and conditions substantially
similar to those set forth in this Section 7.3 or
who are otherwise bound by confidentiality
obligations.
7.3.3. In the event that Shareholder or any of its
Affiliates or its or their respective directors,
officers, employees or other representatives are
required by Law to disclose any of the Confidential
Information, Shareholder will promptly notify Buyer
in writing so that Buyer may seek a protective order
and/or other motion to prevent or limit the
production or disclosure of such Confidential
Information. If such motion has been denied, has not
been promptly prosecuted or is pending and
unresolved at the time disclosure of such
Confidential Information is required by Law, then
the Person required to disclose such Confidential
Information may disclose only such portion of such
Confidential Information which (i) based on advice
of Shareholder's legal counsel is required to be
disclosed (provided that the Person required to
disclose such Confidential Information will use all
reasonable efforts to preserve the confidentiality
of the remainder of such Confidential Information)
or (ii) Buyer consents in writing to having
disclosed. Shareholder will not, and will not permit
any of its Affiliates or its or their respective
directors, officers, employees and other
representatives to, oppose any motion for
confidentiality brought by Buyer or any Company.
Shareholder will continue to be bound by its
obligations pursuant to this Section 7.3 for any
Confidential Information that is not required to be
disclosed, or that has been afforded protective
treatment, pursuant to such motion. Notwithstanding
the foregoing, Shareholder shall be entitled to
disclose Confidential Information to its regulators
if required by Law or regulation without prior
notice, but shall notify the agency to which the
Confidential Information was disclosed of the
confidential nature thereof and notify Buyer as soon
as practicable following the disclosure or, if
possible and not in violation of any Law, prior to
the disclosure.
7.4. Public Announcements.
No press release or announcement concerning the Transaction
will be issued by Shareholder without the prior consent of
Parent or by Parent without the prior consent of Shareholder,
except as such release or announcement may be required by
Law, in which case the Person required to make the release or
announcement will allow the Person whose consent would
otherwise be required reasonable time to comment on such
release or announcement in advance of such issuance. For the
avoidance of doubt, the foregoing shall not be in limitation
of the parties' obligations hereunder to take such actions as
required for the consummation of the Transaction.
7.5. Income Taxes and Section 338(h)(10) Election.
7.5.1. With respect to the Companies and any domestic
Subsidiary of the Companies, Shareholder shall, or
shall cause its relevant Affiliates to, join with
Buyer or Parent, as applicable, in filing a timely
election under Section 338(h)(10) of the Code in
accordance with Treasury Regulation Section
1.338(h)(10)-1 or any successor provision ("Section
338(h)(10) Election"). Shareholder and Buyer or
Parent, as applicable, shall also file, or cause the
filing of, timely elections under any comparable
provisions of state or local Tax Laws. Buyer, Parent
and Shareholder will take any and all actions
necessary, including providing all required
information on a timely basis, to cause such
elections to become effective. Buyer shall prepare
all applicable forms for such elections for review
by Shareholder at least 30 days before the date such
forms are due to be filed, and Buyer and Shareholder
shall negotiate in good faith to agree on such
forms. Buyer or the Companies may in their
discretion make elections under Section 338(g) of
the Code and any comparable provisions of state or
local Tax Laws ("Section 338(g) Elections") with
respect to any foreign Subsidiaries. Shareholder
shall, at Buyer's expense to the extent of third
party costs, provide all information and records
that are reasonably necessary for Buyer to determine
the costs and benefits to it of making the Section
338(g) Elections. Buyer, Parent and Shareholder will
report the sale and acquisition, respectively, of
the Shares pursuant to this Agreement consistent
with the Section 338(h)(10) Election (and any
comparable elections under state or local Tax Laws)
and, if applicable, the Section 338(g) Elections and
will take no position contrary thereto in any Tax
Return or in any proceeding before any Governmental
Authority or otherwise.
7.5.2. For any Straddle Period of the Companies and their
Subsidiaries, Buyer shall timely prepare and file
all Tax Returns required to be filed and shall pay
all Taxes due; provided that Shareholder shall
reimburse Buyer for any amount owed by Shareholder
pursuant to Section 8.5 (Tax Indemnity) with respect
to the taxable periods covered by such Tax Returns.
For any taxable period of the Companies and their
Subsidiaries that ends on or before the date hereof,
Shareholder shall, consistent with past practice,
timely prepare and file all Tax Returns required to
be filed and shall pay all Taxes due; provided,
however, that any such Tax Return shall be filed
consistent with the Section 338(h)(10) Election and
any Section 338(g) Elections. Without limiting the
generality of the foregoing, Shareholder shall
include the income and other tax items of the
Companies and their Subsidiaries on Shareholder's
consolidated federal Income Tax Returns (and
consolidated or combined state Income Tax Returns)
for all periods through the end of the date hereof
and pay any federal Income Taxes (and consolidated
or combined state Income Taxes) attributable to such
income. The Companies and their Subsidiaries shall
furnish Tax information available to them to
Shareholder for inclusion in the Tax Returns
required to be filed by Shareholder pursuant to this
Section 7.5.2 in accordance with the Companies' past
custom and practice. For purposes of the Tax Returns
described in this Section 7.5.2, the income of the
Companies and their Subsidiaries shall be
apportioned to the period up to and including the
date hereof and the period after the date hereof as
provided in Section 8.5.3.2.
7.5.3. Shareholder, Buyer and Parent shall reasonably
cooperate, and shall cause their Affiliates to
cooperate, in preparing and filing all Tax Returns
and claims for refunds and in resolving all disputes
and audits with respect to all taxable periods
relating to Taxes, including by maintaining and
making available to each other all records necessary
in connection with Taxes. At Shareholder's request,
Buyer shall cause any of the Companies and their
Subsidiaries to make or join with Shareholder in
making any other election if the making of such
election does not have any adverse effect on Buyer
or its Affiliates (including any of the Companies
and their Subsidiaries), as determined by Buyer in
its sole discretion.
7.5.4. All transfer, documentary, sales, use, registration
and other similar Taxes and fees incurred in
connection with the sale of the Shares or otherwise
in connection with this Agreement and the
transactions contemplated hereby shall be borne
equally by Shareholder and Buyer.
7.5.5. Any payments that are made under Section 2.4
(Post-Closing Adjustments) or Section 8
(Indemnification) shall be treated for all Tax
purposes as an adjustment to the Purchase Price,
unless a determination (within the meaning of
Section 1313(a) of the Code) causes any such
payments to be otherwise treated for U.S. federal
Income Tax purposes. The allocation of the Purchase
Price and liabilities pursuant to Section 2.2.2
(Allocation of Purchase Price) shall be
appropriately adjusted to reflect the items to which
such payments relate.
7.5.6. Any Tax sharing agreement between Shareholder and
any of the Companies and their Subsidiaries is
terminated as of the date hereof and shall have no
further effect for any taxable year (whether the
current year, a future year, or a past year).
7.5.7. All refunds of Taxes relating to the Companies
received by Shareholder, the Companies, Buyer or any
of their Affiliates with respect to Tax periods
ending on or before the date of this Agreement or
relating to Shareholder's consolidated federal
Income Tax Returns, and in each case for which
Shareholder is responsible under Section 8.5, will
be for the account of Shareholder. Any such refunds
shall be paid to Shareholder within thirty (30) days
of receipt of such refund by the Companies, Buyer or
any of their Affiliates. Any refunds for any
Straddle Period shall be apportioned between
Shareholder and Buyer in the same manner as provided
in Section 8.5.3.
7.5.8. Shareholder, each Company, Buyer or any of their
respective Affiliates shall file all Tax Returns
consistent with the allocation determined in Section
2.2.2 and shall not take any Tax position
inconsistent with such allocation.
7.6. Release of Officers and Directors.
Buyer and Parent shall release, on behalf of themselves and
each of the Companies, each of the individual directors and
officers of Shareholder and its Subsidiaries from any and all
claims by Buyer, Parent or any of their Subsidiaries with
respect to any action taken or the failure to take any action
prior to the date of this Agreement, by or in their capacity
as officers or directors of Shareholder or any of its
Subsidiaries. Notwithstanding the foregoing, this Section 7.6
shall not limit any rights that Buyer or any Affiliate of
Buyer has against Shareholder pursuant to the terms of this
Agreement or any other Transaction Document.
7.7. Further Assurances.
7.7.1. From time to time after the date hereof, at Buyer's
reasonable request and without further consideration
from Buyer or Parent, Shareholder shall execute and
deliver such other instruments of conveyance and
transfer and take such other action as Buyer
reasonably may require to convey, transfer to and
vest in Buyer and to put Buyer in possession of the
Shares in accordance with the terms of this
Agreement. Without limiting the foregoing, from time
to time following the date hereof, Shareholder
shall, and shall cause its Affiliates to, at
Shareholder's cost, execute, acknowledge and deliver
to the Companies, in a reasonably prompt manner, all
such properties, rights, titles, interests,
remedies, powers and privileges, and shall take all
further actions that may be commercially reasonably
necessary or appropriate to assure the transfer to
the Companies of all of such properties, rights,
titles, interests, remedies, powers and privileges
that are required for the Companies to continue
conducting the Cable and Satellite Business after
the date hereof in the same manner as it is
conducted on the date hereof, except in any case in
which this Agreement expressly contemplates that
Shareholder retain any such item. Furthermore, and
without limiting the foregoing, to the extent that
any material assets, property (tangible or
intangible), rights, instruments, Contracts or
privileges form a part of the Cable and Satellite
Business but are not transferred on the date hereof,
Shareholder shall cause, as soon as practicable,
such items to be conveyed, transferred to and vested
in Buyer and to put Buyer in possession of such
items without any additional consideration, except
in any case in which this Agreement expressly
contemplates that Shareholder retain any such item.
7.7.2. From time to time after the date hereof, Shareholder
shall, and shall cause its Affiliates to, use its
reasonable best efforts (at its own expense) to
obtain, and to cooperate in obtaining (including by
designating employees to work with Buyer as
reasonably necessary to give effect to this Section
7.7.2) all consents or waivers from third parties in
respect of Contracts or Permits necessary or
appropriate to permit Buyer to operate the Cable and
Satellite Business as currently conducted, including
Required Consents; provided, however, that the
parties hereto shall not be required to pay or
commit to pay any amount to (or incur any obligation
in favor of) any person from whom any such consent
may be required (other than nominal filing or
application fees). If any consent that is required
(for any reason) under a Contract is not obtained
prior to the date hereof, Shareholder, Parent, Buyer
and the Companies shall cooperate (at their own
expense) in any lawful and reasonable arrangement
reasonably proposed by Buyer under which Buyer shall
obtain the economic claims, rights and benefits in
respect of such Contract with respect to which the
consent has not been obtained and perform the
obligations relating to such Contract in accordance
with this Agreement. Such reasonable arrangement may
include (i) in the case of a Lease, the subleasing
to Buyer of any and all rights of Shareholder
against the other party to such Lease arising out of
a breach or cancellation thereof by the other party
and (ii) the enforcement by Shareholder of such
rights.
7.8. Employee Benefits.
Effective as of the date of this Agreement and for a period
of one (1) year thereafter, Buyer shall use reasonable
efforts to cause each Company to provide to its employees
benefits that are substantially the same as those provided by
the Companies to such employees as of the date hereof (except
where, in the reasonable opinion of Buyer, such benefits are
not reasonably comparable to generally accepted benefits
provided to employees of similar position, seniority and
experience engaged in the same or in a similar business as
the Cable and Satellite Business); provided that Buyer shall
not be required to cause any Company to offer to its
employees benefits that are superior to the existing benefits
of such employees. With respect to all benefits provided to
Company employees following the date of this Agreement, Buyer
shall provide credit to such employees for prior service with
the Company, the Shareholder or any member of any controlled
group or affiliated service group (as defined in Code
Sections 414(b), (c), (m) or (o)) of which the Company is a
member, for eligibility and vesting purposes only.
7.9. Disclaimer of Warranties.
Notwithstanding anything to the contrary set forth herein,
the express representations and warranties set forth in
Sections 4 and 5 hereof are the only representations and
warranties concerning the business or any of the assets of
either of the Companies, Shareholder makes no representation
or warranty as to (i) the Open Source Materials (but without
limiting the representations made in Section 5.11.2) or (ii)
the functionality, acceptability, fitness for any purpose or
state of completion of any Business Intellectual Property,
including the Collabrent Product. The representations and
warranties set forth in Sections 4 and 5 hereof are made
expressly in lieu of all other warranties and
representations, express or implied.
7.10. Release of Companies Obligations.
The Shareholder, on behalf of itself and each of its
Affiliates, releases the Companies and each of their
Subsidiaries from any and all obligations, direct or
indirect, contingent or otherwise, owing to the Shareholder
or any of its Affiliates, including payables, other than the
obligations contemplated by this Agreement and the Ancillary
Documents.
7.11. Use of Name.
Within 60 days after the Closing Date, Parent shall cause
each of the Companies to change its corporate name to a name
that does not include "DST" or the name of any of
Shareholder's Subsidiaries (other than "Innovis" or
"Interactive") and (b) neither Parent nor any of its
Affiliates (including the Companies) shall have any right to
use the name of Shareholder or of any of its Subsidiaries
(other than "Innovis" or "Interactive"), except that, for a
period ending 180 days after the Closing Date, Parent and its
Affiliates shall have the right to use any catalogues, sales
and promotional materials and printed forms that use such
name and are included in the Business Intellectual Property
as of the Closing Date or that have been ordered prior to the
Closing Date for use in the Cable and Satellite Business;
provided, however, that (i) promptly after the Closing Date,
Parent shall make, or cause the Companies to make, all
filings with the appropriate Governmental Authorities to
effectuate such name change, (ii) each of Parent and the
Companies shall use its reasonable commercial efforts to
minimize the usage of the names referred to in Section (a)
hereof, and to discontinue it as soon as practicable after
the Closing and (iii) notwithstanding anything to the
contrary in this Section 7.11, to the extent any approvals of
Governmental Authorities are necessary to effectuate the said
name change, the time limits specified in this Section 7.11
shall be extended by the time period necessary to obtain such
approvals, so long as Parent and/or the Companies begins the
process of seeking such approval within 60 days after the
Closing.
8. INDEMNIFICATION.
8.1. Indemnity by Shareholder.
8.1.1. Subject to Sections 8.1.2 and 8.1.3, Shareholder
agrees to indemnify Buyer and Parent and their
Subsidiaries (including the Companies) and their
respective employees, officers, directors,
controlling persons, successors and assigns
(collectively, the "Buyer Group"), and hold the
Buyer Group harmless from and with respect to any
and all Damages related to or arising directly or
indirectly from (i) any inaccuracy in any
representation or warranty made by Shareholder in
this Agreement or (ii) any failure by Shareholder to
perform any covenant, obligation or undertaking made
by Shareholder in this Agreement.
8.1.2. Except for Damages incurred by any member of the
Buyer Group arising from an inaccuracy in the
representations and warranties set forth in Sections
4.1 (Organization and Authority of Shareholder), 4.2
(Non-contravention with respect to Shareholder), 4.3
(Ownership of Shares), 5.1 (Organization of the
Companies), 5.2 (Authority of the Companies), 5.3
(Non-contravention with respect to the Companies) or
5.9 (Tax Matters) or with respect to any fraudulent
statement made by Shareholder or any Company in this
Agreement, no claim may be made by any member of the
Buyer Group under Section 8.1.1 after the second
anniversary of the date hereof (the "Indemnification
Period"). The representations and warranties set
forth in Sections 4.1 (Organization and Authority of
Shareholder), 4.2 (Non-contravention with respect to
Shareholder), 4.3 (Title to Shares), 5.1
(Organization of the Companies), 5.2 (Authority of
the Companies) 5.3 (Non-contravention with respect
to the Companies) or 5.9 (Tax Matters) will survive
the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby
and shall continue in full force and effect until
ninety (90) days after all applicable statutes of
limitation (including any extensions thereof) have
expired and then expire with respect to any
theretofore unasserted claims arising out of or
otherwise in respect of any breach of such
representations and warranties; provided, however,
that as to each of the foregoing, the obligations of
Shareholder to indemnify, defend and hold harmless
each member of the Buyer Group shall not terminate
with respect to (i) any individual item as to which
any member of the Buyer Group shall have, before the
expiration of the applicable period, made a bona
fide claim in good faith by delivering a notice
(stating in reasonable detail the basis of such
claim) to Shareholder or (ii) any act of fraud
committed by Shareholder in taking any actions
contemplated by this Agreement.
8.1.3. Shareholder shall have no liability under Section
8.1.1 (a) for any individual claim for Damage
incurred by any member of the Buyer Group of less
than One Hundred Thousand dollars ($100,000), (b)
until the aggregate of all claims for Damages
exceeds Five Million dollars ($5,000,000), and then
only for the amount by which such Damages exceed
Five Million dollars ($5,000,000), and (c) for any
Damages incurred by any member of the Buyer Group in
excess, in the aggregate for such member and the
Buyer Group, of Sixty Million dollars ($60,000,000);
provided, however, that the foregoing limitations
shall not apply to claims in connection with the
failure to comply with any of the covenants and
agreements of Shareholder set forth in Section 2 or
pursuant to any inaccuracy in the representations
and warranties and covenants set forth in Sections
4.1 (Organization and Authority of Shareholder), 4.2
(Non-contravention with respect to Shareholder), 4.3
(Title to Shares), 5.1 (Organization of the
Companies), 5.2 (Authority of the Companies), 5.3
(Non-contravention with respect to the Companies),
5.7.4 (Absence of Indebtedness), 5.9 (Tax Matters),
7.5 (Income Taxes and Section 338(h)(10) Election)
or 7.7 (Further Assurances) or any fraudulent
statement made by Shareholder in this Agreement; and
provided further, however, that in no event shall
Shareholder be liable under Section 8.1.1. for
claims for Damages made under any provision of this
Agreement for an amount that shall exceed, in the
aggregate, the total Purchase Price.
8.2. Indemnity by Buyer and Parent.
8.2.1. Subject to Sections 8.2.2 and 8.2.3, Buyer and
Parent agree to jointly and severally indemnify
Shareholder, its Affiliates and their respective
employees, officers, directors, controlling persons,
successors and assigns (collectively, the
"Shareholder Group"), and hold Shareholder Group
harmless from and with respect to any and all
Damages related to or arising directly or indirectly
from (i) any inaccuracy in any representation or
warranty made by Buyer or Parent in this Agreement,
or (ii) any failure by Buyer or Parent to perform
any covenant, obligation or undertaking made by them
in this Agreement.
8.2.2. Except for Damages incurred by any member of the
Shareholder Group arising from any fraudulent
statement made by Buyer or Parent in this Agreement,
no claim may be made by any member of the
Shareholder Group under Section 8.2.1 after the
expiration of the Indemnification Period; provided,
however, that the obligation of Buyer and Parent to
indemnify, defend and hold harmless each member of
the Shareholder Group shall not terminate with
respect to (i) any individual item as to which any
member of the Shareholder Group shall have, before
the expiration of the applicable period, made a bona
fide claim in good faith by delivering a notice
(stating in reasonable detail the basis of such
claim) to Buyer or Parent or (ii) any act of fraud
committed by Buyer or Parent in taking any actions
contemplated by this Agreement.
8.2.3. Buyer and Parent shall have no liability under
Section 8.2.1 (a) for any individual claim for
Damage incurred by any member of Shareholder Group
of less than One Hundred Thousand dollars
($100,000), (b) until the aggregate of all such
claims for Damages exceeds Five Million dollars
($5,000,000), and (c) then only for the amount by
which such Damages exceed Five Million dollars
($5,000,000) and (d) for any Damages incurred by any
member of Shareholder Group in excess of Sixty
Million dollars ($60,000,000); provided, however,
that the foregoing limitations shall not apply to
claims in connection with the failure to comply with
any of the covenants and agreements of Buyer or
Parent set forth in Section 2.
8.3. Procedures for Indemnification.
8.3.1. If a claim or demand is made against an Indemnitee,
or an Indemnitee shall otherwise learn of an
assertion, by any Person who is not a party to this
Agreement (and who is not an Affiliate of a party to
this Agreement) (a "Third Party Claim") as to which
a party (the "Indemnifying Party") may be obligated
to provide indemnification pursuant to this
Agreement, such Indemnitee will notify the
Indemnifying Party in writing, and in reasonable
detail, of the Third Party Claim reasonably promptly
after becoming aware of such Third Party Claim;
provided, however, that failure to give any such
notification will not affect the indemnification
provided hereunder except to the extent the
Indemnifying Party shall have demonstrated that it
has been actually prejudiced as a result of such
failure and to such extent.
8.3.2. If a Third Party Claim is made against an Indemnitee
and the Indemnifying Party agrees to indemnify the
Indemnitee therefor, the Indemnifying Party will be
entitled to assume the defense thereof (at the
expense of the Indemnifying Party) with counsel
selected by the Indemnifying Party and reasonably
satisfactory to the Indemnitee. Should the
Indemnifying Party so elect to assume the defense of
a Third Party Claim, the Indemnifying Party will not
be liable to the Indemnitee for any legal or other
expenses subsequently incurred by the Indemnitee in
connection with the defense thereof as long as the
Indemnifying Party diligently conducts such defense;
provided that, if (i) in any Indemnitee's reasonable
judgment a conflict of interest exists in respect of
such claim or (ii) any Indemnifying Party fails to
provide reasonable assurance to the Indemnitee (upon
request of the Indemnitee) of such Indemnifying
Party's financial capacity to defend such Third
Party Claim and provide indemnification with respect
thereto, such Indemnitee will have the right to
employ separate counsel to represent such Indemnitee
and in that event the reasonable fees and expenses
of such separate counsel will be paid by such
Indemnifying Party. If the Indemnifying Party
assumes the defense of any such Third Party Claim,
each Indemnitee will have the right to participate
in the defense thereof and to employ counsel, at its
own expense, separate from the counsel employed by
the Indemnifying Party. The Indemnifying Party will
be liable for the reasonable fees and expenses of
counsel employed by the Indemnitee for any period
during which the Indemnifying Party has failed to
assume the defense thereof or if it does not
expressly elect to assume the defense thereof
(including the agreement by each Indemnifying Party
to indemnify the Indemnitee as aforesaid). If the
Indemnifying Party assumes the defense of any such
Third Party Claim, the Indemnifying Party will
promptly supply to the Indemnitee copies of all
correspondence and documents relating to or in
connection with such Third Party Claim and keep the
Indemnitee fully informed of all developments
relating to or in connection with such Third Party
Claim (including, without limitation, providing to
the Indemnitee on request updates and summaries as
to the status thereof). If the Indemnifying Party
chooses to defend a Third Party Claim, all the
Indemnitees will reasonably cooperate with the
Indemnifying Party in the defense thereof if
requested by the Indemnifying Party (such
cooperation to be at the expense, including
reasonable legal fees and expenses, of the
Indemnifying Party).
8.3.3. No Indemnifying Party will consent to any
settlement, compromise or discharge (including the
consent to entry of any judgment) of any Third Party
Claim without the Indemnitee's prior written
consent, which will not be unreasonably withheld;
provided, that if the Indemnifying Party agrees to
indemnify the Indemnitee for a Third Party Claim,
the Indemnitee will agree to any settlement,
compromise or discharge of such Third Party Claim
which the Indemnifying Party may recommend that
unconditionally and irrevocably releases the
Indemnitee (pursuant to a release which is
reasonably satisfactory to the Indemnitee)
completely from all Liability in connection with
such Third Party Claim; provided, however, that the
Indemnitee may refuse to agree to any such
settlement, compromise or discharge that provides
for injunctive or other non-monetary relief
affecting the Indemnitee. If an Indemnifying Party
agrees to indemnify the Indemnitee for a Third Party
Claim, the Indemnitee will not (unless required by
law) admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim
without the Indemnifying Party's prior written
consent (which consent will not be unreasonably
withheld).
8.3.4. Any claim on account of Damages which does not
involve a Third Party Claim shall be asserted by
written notice given by the Indemnitee to the
Indemnifying Party from whom such indemnification is
sought. The failure by any Indemnitee so to notify
the Indemnifying Party will not relieve the
Indemnifying Party from any liability that it may
have to such Indemnitee under this Agreement, except
to the extent that the Indemnifying Party shall have
demonstrated that it has been actually prejudiced as
a result of such failure and to such extent. If the
Indemnifying Party does not notify the Indemnitee
prior to the expiration of a 45-calendar-day period
following its receipt of such notice that the
Indemnifying Party disputes its liability to the
Indemnitee under this Agreement, such claim
specified by the Indemnitee in such notice will be
conclusively deemed a liability of the Indemnifying
Party under this Agreement and the Indemnifying
Party shall pay the amount of Damages subject to
such claim to the Indemnitee on demand or, in the
case of any notice in which the amount of the
Damages subject to such claim (or any portion
thereof) is estimated, on such later date when the
amount of such claim (or such portion thereof)
becomes finally determined. If the Indemnifying
Party has timely disputed its liability with respect
to such Damages subject to such claim, as provided
above, the Indemnifying Party and the Indemnitee
will proceed in good faith to negotiate a resolution
of such dispute and, if not resolved through
negotiations by the 90th day after notice of such
claim was given to the Indemnifying Party, the
Indemnifying Party and the Indemnitee will be free
to pursue such remedies as may be available under
this Agreement or applicable law.
8.3.5. The procedures set forth in this Section 8.3
(Procedures for Indemnification), shall not govern
any claim or demand made under Section 8.1
(Indemnity by Shareholder) for any inaccuracy in the
representations and warranties set forth in Section
5.9 (Tax Matters) or any claims made under Section
8.5 (Tax Indemnity).
8.4. Certain Rights and Limitations.
8.4.1. No loss, Liability, damage or deficiency shall
constitute Damages to any party to the extent of any
insurance proceeds actually received by such party
with respect to such loss, Liability, damage or
deficiency (after deducting reasonable costs and
expenses incurred in connection with recovery of
such proceeds). Each party shall use its
commercially reasonable efforts to mitigate any
Damages with respect to which such party might
bring, or has brought, a claim for indemnification
under this Section 8; provided that no party shall
be obligated to incur any monetary cost in
connection with such an effort to mitigate.
8.4.2. Subject to Section 8.1.3, the amount of Damages for
which indemnification is provided under this
Agreement will be (i) increased to take account of
any Tax cost incurred (grossed up for such increase)
by the Indemnitee arising from the receipt of
indemnity payments hereunder and (ii) reduced to
take account of any Tax benefit realized by the
Indemnitee arising from the incurrence or payment of
any such Damages. In computing the amount of any
such Tax cost or Tax benefit, the Indemnitee will be
deemed to be subject to the applicable federal,
state, local and/or local country taxes at the
maximum statutory rate then in effect. Nothing in
this section shall be construed to require the
Indemnitee to make available its Tax Returns (or any
other information relating to its Taxes which it
deems confidential) to the Indemnifying Party or any
other Person.
8.4.3. The parties acknowledge and agree that, except for
claims against Shareholder based on fraud on the
part of Shareholder in connection with the
Transaction and except for claims against Buyer or
Parent based on fraud on the part of Buyer or
Parent, as the case may be, in connection with the
Transaction, the sole and exclusive monetary remedy
with respect to claims for Damages which may be made
hereunder not excluded from Section 8.1.3, shall be
pursuant to the indemnification provisions set forth
in Section 8.2, and in any event subject to Section
8.1.3. Notwithstanding anything to the contrary, the
claims described in Section 8.1.1, which are based
on fraud as described herein, shall not be subject
to the limitation set forth in Section 8.1.3.
Subject to Section 8.1.3, anything contained in this
Agreement to the contrary notwithstanding, no
recovery under this Agreement shall be available to
any party hereto for its own consequential,
incidental or indirect damages; provided, however,
that nothing herein shall prevent any party hereto
from being indemnified for all components of awards
against it in Third Party Claims, including
consequential, incidental or indirect damages
components of such claims.
8.4.4. Buyer, Companies and Shareholder acknowledge and
agree that the indemnification provision in this
Section 8 shall be the exclusive remedy of Buyer and
Shareholder with respect to Companies and their
Subsidiaries, and the transactions contemplated by
this Agreement.
8.5. Tax Indemnity.
8.5.1. Shareholder shall indemnify the Buyer Group and hold
the Buyer Group harmless from (i) all liability of
the Companies and their Subsidiaries for Income
Taxes for any taxable period that ends on or before
the date hereof (a "Pre-Closing Tax Period"), (ii)
all liability of the Companies and their
Subsidiaries for Income Taxes for the portion of a
Straddle Period ending on the date hereof (excluding
any additional Tax liability of Shareholder
resulting from any transaction engaged in by a
Company or its Subsidiary not in the ordinary course
of business occurring on the date hereof after
Buyer's purchase of the Shares) and calculated
pursuant to Section 8.5.3, (iii) all liability for
Income Taxes (including liability for Taxes imposed
pursuant to Treasury Regulation Section 1.1502-6 or
any comparable provision of foreign, state or local
Tax Laws) of Shareholder or any other Person (other
than a Company or a Subsidiary) that is or has ever
been affiliated with either a Company or any
Subsidiary, (iv) all liability of Shareholder, its
Affiliates, or the Companies and their Subsidiaries
for Income Taxes arising on the sale of the Shares,
including all liability for Income Taxes resulting
from the Section 338(h)(10) Election (or any
comparable elections under state or local Tax Laws)
contemplated by Section 7.5.1 of this Agreement, (v)
all liability of the Companies and their
Subsidiaries scheduled in Section 5.9.1 of the
Disclosure Schedule for Taxes for the Pre-Closing
Tax Period and any portion of a Straddle Period
(calculated pursuant to Section 8.5.3) ending on the
date hereof (excluding any additional Tax liability
of Shareholder resulting from any transaction
engaged in by such Company or its Subsidiaries not
in the ordinary course of business on the date
hereof after Buyer's purchase of the Shares), and
(vi) all liability for reasonable legal, accounting,
appraisal, consulting or similar fees and expenses
for any item attributable to any item in clause (i),
(ii), (iii), (iv) (except to the extent addressed by
Section 2.2.2) or (v) above (the sum of (i), (ii),
(iii), (iv) (except to the extent addressed by
Section 2.2.2), (v) and (vi) being referred to
herein as "Indemnified Pre-Closing Taxes"). For the
avoidance of doubt, Indemnified Pre-Closing Taxes
shall not include any expenses incurred by Buyer in
making the allocation referred to in Section 2.2.2
or any fees paid to any third party in connection
therewith.
8.5.2. Buyer shall, and after the date hereof shall cause
the Companies and their Subsidiaries to, indemnify
Shareholder and each of its Affiliates, officers,
directors, employees, stockholders, agents and
representatives and hold them harmless from all
liability for Taxes resulting from any Section
338(g) Elections contemplated by Section 7.5.1 of
this Agreement and all Taxes of the Companies and
their Subsidiaries (i) for any taxable period
beginning after the date hereof and (ii) for any
portion of a Straddle Period beginning after (but
not including) the date hereof, including any
additional Tax liability of Shareholder resulting
from any transaction engaged in by a Company or its
Subsidiary not in the ordinary course of business
occurring on the date hereof after Buyer's purchase
of the Shares ("Indemnified Post-Closing Taxes"),
but excluding any Tax liability of Shareholder
arising from the sale of the Shares, or the Section
338(h)(10) Election.
8.5.3. In the case of any taxable period that includes (but
does not end on) the date hereof (a "Straddle
Period"):
8.5.3.1. real, personal and intangible property
Taxes ("Property Taxes") of the Companies
and their Subsidiaries for the Straddle
Period (other than Taxes imposed in
connection with the sale of the Shares)
shall be equal to the amount of such
Property Taxes for the entire Straddle
Period multiplied by a fraction, the
numerator of which is the number of days
during the Straddle Period that are prior
to the date hereof and the denominator of
which is the number of days in the
Straddle Period; and
8.5.3.2. the Taxes of the Companies and their
Subsidiaries (other than Property Taxes)
for the Straddle Tax Period shall be
computed as if such taxable period ended
as of the close of business on the date
hereof and, if the Companies and their
Subsidiaries own any equity interest in
any partnership or other "flow through"
entity, as if a taxable period of such
partnership or other "flow through" entity
ended as of the close of business on the
date hereof.
8.5.4. Shareholder shall pay the amount of any Indemnified
Pre-Closing Taxes to Buyer, and Buyer shall pay the
amount of any Indemnified Post-Closing Taxes to
Shareholder, five (5) days prior to the date on
which the Tax Return with respect to the liability
for such Taxes is required to be filed or such Taxes
are required to be paid; provided that notice has
been given pursuant to Section 8.5.5 at least thirty
(30) days prior to such required filing or payment
date (for the avoidance of doubt, failure to give
such notice at least thirty days (30) prior to such
required filing or payment date shall not constitute
a waiver of the indemnification obligation). The
payments to be made pursuant to this paragraph shall
be appropriately adjusted to reflect any
determination (within the meaning of Section 1313(a)
of the Code) with respect to Taxes.
8.5.5. If a claim shall be made by any Governmental
Authority, that, if successful, might result in an
indemnity payment to Buyer, Shareholder, one of
their respective Affiliates or any of their
respective officers, directors, employees,
stockholders, agents or representatives pursuant to
Section 8, or a party otherwise wishes to otherwise
assert a claim against the other party for
Indemnified Pre-Closing or Indemnified Post-Closing
Taxes, then the party seeking indemnification for
such claim shall give notice of such claim (and any
proposed counterclaim) within thirty (30) days of
becoming aware of such claim to the Indemnifying
Party in writing (a "Tax Claim"). Such notice shall
include supporting schedules and documentation
reasonably sufficient to establish such claim.
Failure to provide such notice shall result in a
waiver of the indemnification obligation with
respect to such Tax Claim to the extent the
indemnifying party has been actually prejudiced as a
result of such failure. For the purposes of this
Section 8.5.5, a claim gives rise to the notice
requirement when asserted in writing by a
Governmental Authority or one of its
representatives.
8.5.6. With respect to any Tax Claim relating to a taxable
period ending on or prior to the date hereof and for
which Shareholder is obligated to indemnify Buyer,
Shareholder shall control all proceedings and may
make all decisions taken in connection with such Tax
Claim (including selection of counsel) and, without
limiting the foregoing, may in its sole discretion
pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with any
Governmental Authority with respect thereto;
provided, however, that Shareholder must first
consult in good faith with Buyer before taking any
such action. Notwithstanding the foregoing, with
respect to any portion of such Tax Claim that could
have a Material Adverse Effect on Buyer, (i)
Shareholder shall not settle that portion of such
Tax Claim without the prior written consent of
Buyer, which consent shall not be unreasonably
withheld, (ii) Buyer, and counsel of its own
choosing, at Buyer's expense, shall have the right
to participate fully in all aspects of the defense
of that portion of such Tax Claim, (iii) Shareholder
shall inform Buyer, reasonably promptly in advance,
of the date, time and place of all proceedings
relating to that portion of such Tax Claim, (iv)
Buyer shall be entitled to have its representatives
attend and participate in any such proceedings, and
(v) Shareholder shall provide to Buyer all
information, correspondence and other documents
relating to that portion of such Tax Claim promptly
upon receipt from, or in advance of submission to
(as the case may be), the relevant Governmental
Authority. Buyer shall not settle any Tax Claim
referred to in this Section 8.5.6 without the prior
written consent of Seller, which consent shall not
be unreasonably withheld.
8.5.7. Shareholder and Buyer shall jointly control and
participate in all proceedings taken in connection
with any Tax Claim relating to Taxes of a Company or
Subsidiary for a Straddle Period. Neither
Shareholder nor Buyer shall settle any such Tax
Claim without the prior written consent of the
other. With respect to any Tax Claim relating to a
taxable period beginning after the date hereof, the
Buyer shall control all proceedings and may make all
decisions taken in connection with such Tax Claim
(including selection of counsel) and, without
limiting the foregoing, may in its sole discretion
pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with any
Governmental Authority with respect thereto.
Notwithstanding the foregoing, with respect to any
portion of such Tax Claim that could have a Material
Adverse Effect on Shareholder, including as a result
of an indemnification claim hereunder, (i) Buyer
shall not settle that portion of such Tax Claim
without the prior written consent of Shareholder,
which consent shall not be unreasonably withheld,
(ii) Shareholder, and counsel of its own choosing,
at Shareholder's expense, shall have the right to
participate fully in all aspects of the defense of
that portion of such Tax Claim, (iii) Buyer shall
inform Shareholder, reasonably promptly in advance,
of the date, time and place of all proceedings
relating to that portion of such Tax Claim, (iv)
Shareholder shall be entitled to have its
representatives attend and participate in any such
proceedings, and (v) the Buyer shall provide to
Shareholder all information, correspondence and
other documents relating to that portion of such Tax
Claim promptly upon receipt from, or in advance of
submission to (as the case may be), the relevant
Governmental Authority.
8.5.8. Buyer, the Companies and each of their respective
Affiliates on the one hand, and Shareholder and its
Affiliates on the other hand, shall reasonably
cooperate in contesting any Tax Claim, which
cooperation shall include the retention and, upon
request, the provision to the requesting person of
records and information which are reasonably
relevant to such Tax Claim, and making employees
available on a mutually convenient basis to provide
additional information or explanation of any
material provided hereunder or to testify at
proceedings relating to such Tax Claim.
8.5.9. Neither Shareholder nor Buyer shall be obligated to
indemnify under this Section 8.5 to the extent that
Shareholder or Buyer, as applicable, has made an
indemnification payment to Buyer or Shareholder, as
applicable, for the same Taxes pursuant to Section
8.1. Notwithstanding anything to the contrary in
this Section 8.5, Shareholder shall not be obligated
to make any indemnity payments under this Section
8.5 for any payroll withholding Taxes of the
Companies.
8.5.10. All indemnification payments under this Section 8.5
shall be adjusted as provided in Sections 8.4.1 and
8.4.2.
8.5.11. Unless expressly modified by this Section 8.5 or
otherwise expressly rendered inapplicable to Tax
Claims, all other provisions of Section 8 shall
apply to Tax Claims.
9. GENERAL PROVISIONS
9.1. Assignment.
No party to this Agreement will convey, assign or otherwise
transfer any of its rights or obligations under the Agreement
without the prior written consent of Shareholder (in the case
of an assignment by Buyer or Parent) or of Buyer (in the case
of an assignment by Shareholder), except that Buyer may
(without obtaining any consent) assign any of its rights,
interests or obligations under this Agreement, in whole or in
part, to any direct or indirect Affiliate of Buyer or Parent
or to any successor to all or any portion of its business.
Any conveyance, assignment or transfer requiring prior
written consent that is made without such consent will be
void ab initio. No assignment of this Agreement will relieve
the assigning party of its obligations hereunder.
9.2. Parties in Interest.
This Agreement is binding upon and is for the benefit of the
parties hereto and their respective successors and permitted
assigns. This Agreement is not made for the benefit of any
Person not a party hereto, and no Person other than the
parties hereto or their respective successors and permitted
assigns will acquire or have any benefit, right, remedy or
claim under or by reason of this Agreement, except that
members of the Buyer Group and Shareholder Group will be
entitled to the rights to indemnification provided to the
Buyer Group and Shareholder Group, respectively, hereunder.
9.3. Amendment.
This Agreement may not be amended, modified or supplemented
except by a written agreement executed by Buyer, Parent and
Shareholder.
9.4. Waiver; Remedies.
No failure or delay on the part of Buyer, Parent or
Shareholder in exercising any right, power or privilege under
the Agreement will operate as a waiver thereof, nor will any
waiver on the part of Buyer, Parent or Shareholder of any
right, power or privilege under the Agreement operate as a
waiver of any other right, power or privilege under this
Agreement, nor will any single or partial exercise of any
right, power or privilege thereunder preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege under this Agreement. The rights and
remedies herein provided are cumulative and are not exclusive
of any rights or remedies that the parties may otherwise have
at law or in equity.
9.5. Fees and Expenses.
Each of Shareholder and Buyer will pay, without right of
reimbursement from the other, all of their respective costs
and expenses incident to the performance of their respective
obligations hereunder, including the fees and disbursements
of counsel, accountants, experts and consultants employed by
the respective parties in connection with the Transaction.
9.6. Notices.
All notices, requests, claims, demands and other
communications required or permitted to be given under this
Agreement shall be in writing and will be delivered by hand
or telecopied or sent, postage prepaid, by registered,
certified or express mail or reputable overnight courier
service and will be deemed given when so delivered by hand or
telecopied, or three business days after being so mailed (one
business day in the case of overnight courier service). All
such notices, requests, claims, demands and other
communications will be addressed as set forth below, or
pursuant to such other instructions as may be designated in
writing by the party to receive such notice in accordance
with this Section 9.6:
9.6.1. If to Buyer: Amdocs Inc.
Timberlake Corporate Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Cravath, Swaine & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ Cami, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
9.6.2. If to Parent: Amdocs Limited
Suite 5, Tower Hill House Bordage, POB ▇▇▇,
▇▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
Fax: +44 (1481) 723-279
with a copy to:
Amdocs Limited
Timberlake Corporate Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Cravath, Swaine & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ Cami, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
9.6.3. If to Shareholder:
DST Systems, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
9.7. Captions; Currency.
The article and section captions herein and the table of
contents hereto are for convenience of reference only, do not
constitute part of this Agreement and will not be deemed to
limit or otherwise affect any of the provisions hereof.
Unless otherwise specified, all references herein to numbered
articles and sections are to articles and sections of this
Agreement and all references herein to exhibits or schedules
are to exhibits or schedules to this Agreement. Unless
otherwise specified, all references contained in any
Transaction Document, in any exhibit or schedule referred to
therein or in any instrument or document delivered pursuant
thereto to dollars or "$" shall mean United States dollars.
9.8. Entire Document.
This Agreement and the other Transaction Documents
collectively constitute the entire agreement between the
parties with respect to the subject matter hereof and this
Agreement and the other Transaction Documents supersede all
prior negotiations, agreements and understandings of the
parties of any nature, whether oral or written, relating
thereto.
9.9. Severability.
If any provision of any Transaction Document or the
application thereof to any Person or circumstance is
determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions
thereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held
invalid or unenforceable, shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated thereby.
9.10. Governing Law.
This Agreement will be governed by and construed in
accordance with the internal laws of the State of Delaware
applicable to contracts made and to be performed entirely
within such State, without regard to the conflicts of law
principles of such State.
9.11. Jurisdiction, Service of Process.
Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the United States District Court
for the District of Delaware, or if such court does not have
jurisdiction, the Court of Chancery of the State of Delaware,
for the purposes of any suit, action or other proceeding
arising out of this Agreement. Each of the parties hereto
further agrees that service of any process, summons, notice
or document by U.S. registered mail to such party's
respective address set forth in Section 9.6 shall be
effective service of process for any action, suit or
proceeding in Delaware with respect to any matters to which
it has submitted to jurisdiction as set forth above in the
immediately preceding sentence. Each of the parties hereto
irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in
(a) the United States District Court for the District of
Delaware or (b) the Court of Chancery of the State of
Delaware, and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court
that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
Notwithstanding the foregoing, this Section 9.11 shall not
apply to any dispute under Section 2.2 or Section 2.4 that is
required to be decided by the Dispute Accountants.
9.12. Schedules and Exhibits; Disclosure.
All schedules and exhibits attached hereto are hereby
incorporated in and made a part of this Agreement as if set
forth in full herein. Capitalized terms used in any other
Transaction Document or in the schedules or exhibits hereto
or thereto but not otherwise defined therein will have the
respective meanings assigned to such terms in this Agreement.
9.13. Counterparts.
This Agreement may be executed in separate counterparts, each
such counterpart being deemed to be an original instrument,
and all such counterparts will together constitute the same
agreement.
9.14. Specific Performance.
In the event of any actual or threatened default in, or
breach of, any of the terms, conditions and provisions of any
Transaction Document, the party or parties who are or are to
be thereby aggrieved will have the right of specific
performance and injunctive relief giving effect to its or
their rights under such Transaction Document, in addition to
any and all other rights and remedies at law or in equity,
and all such rights and remedies will be cumulative. The
parties agree that any such breach or threatened breach would
cause irreparable injury, that the remedies at law for any
such breach or threatened breach, including monetary damages,
are inadequate compensation for any loss and that any defense
in any action for specific performance that a remedy at law
would be adequate is waived.
9.15. Construction; Interpretation.
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 of
the provisions of this Agreement.
9.16. Withholding Obligations.
The payment of the Purchase Price pursuant to Section 2 will
be in compliance with all applicable Tax withholding
obligations, and, without derogating from the generality of
the foregoing, subject to the provisions of this Agreement,
Buyer will be entitled to either seek exemption from any Tax
withholding obligations or withhold Tax as required under
applicable law.
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
AMDOCS LIMITED,
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: Treasurer and Secretary
AMDOCS INC.,
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: Treasurer and Secretary
DST SYSTEMS, INC.,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
[ Signature Page to Share Sale and Purchase Agreement ]