LA_LAN01:327561.28 Section 3.16 Material Contracts ............................ .....................................................17 Section 3.17 Licenses . ..................................................................................
Execution Version
LA_LAN01:327561.28
Exhibit 2.1
ASSET PURCHASE AGREEMENT
between
VERIFONE, INC.
and
CURB TECHNOLOGIES, LLC
Dated as of December 11, 2017
LA_LAN01:327561.28
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Specific Definitions .................................................................................1
Section 1.2 Other Terms .............................................................................................1
ARTICLE II
PURCHASE AND SALE OF THE BUSINESS
Section 2.1 Purchase and Sale of Assets ....................................................................1
Section 2.2 Excluded Assets ......................................................................................3
Section 2.3 Assumption of Liabilities ........................................................................4
Section 2.4 Excluded Liabilities .................................................................................4
Section 2.5 Purchase Price .........................................................................................4
Section 2.6 Closing .....................................................................................................5
Section 2.7 Deliveries by Buyer .................................................................................5
Section 2.8 Deliveries by Seller .................................................................................5
Section 2.9 Nonassignability of Assets ......................................................................6
Section 2.10 Withholding .............................................................................................7
Section 2.11 Net Working Capital Adjustment. ...........................................................7
Section 2.12 Buyer as Seller’s Agent With respect to New York City Taxi Licenses 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.1 Organization and Qualification .............................................................10
Section 3.2 US Media Company ..............................................................................10
Section 3.3 Corporate Authorization ........................................................................11
Section 3.4 Consents and Approvals ........................................................................11
Section 3.5 Non-Contravention ................................................................................11
Section 3.6 Binding Effect .......................................................................................12
Section 3.7 Financial Statements ..............................................................................12
Section 3.8 Absence of Changes ..............................................................................13
Section 3.9 Litigation ...............................................................................................13
Section 3.10 Employee Benefits ................................................................................13
Section 3.11 Compliance with Laws ..........................................................................15
Section 3.12 Environmental Matters ..........................................................................15
Section 3.13 Taxes .....................................................................................................16
Section 3.14 Labor Matters ........................................................................................16
Section 3.15 Intellectual Property ..............................................................................17
LA_LAN01:327561.28
Section 3.16 Material Contracts .................................................................................17
Section 3.17 Licenses .................................................................................................20
Section 3.18 Sufficiency of Assets .............................................................................20
Section 3.19 Title to Property .....................................................................................20
Section 3.20 Finders’ Fees .........................................................................................20
Section 3.21 Absence of Liabilities ............................................................................20
Section 3.22 No Other Representations or Warranties; Non-Reliance ......................20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 4.1 Organization and Qualification .............................................................21
Section 4.2 Authorization .........................................................................................21
Section 4.3 Consents and Approvals ........................................................................21
Section 4.4 Non-Contravention ................................................................................21
Section 4.5 Binding Effect .......................................................................................22
Section 4.6 Finders’ Fees .........................................................................................22
Section 4.7 Litigation and Claims ............................................................................22
Section 4.8 Financial Capability ..............................................................................22
Section 4.9 No Other Representations or Warranties; Non-Reliance ......................22
ARTICLE V
COVENANTS
Section 5.1 Access and Information .........................................................................23
Section 5.2 Tax Matters ............................................................................................24
Section 5.3 Post-Closing Obligations of the Business to Certain Employees ..........27
Section 5.4 Insurance Proceeds ................................................................................31
Section 5.5 Certain Actions ......................................................................................32
Section 5.6 Further Assurances ................................................................................32
Section 5.7 Intellectual Property ..............................................................................33
Section 5.8 Confidentiality .......................................................................................36
Section 5.9 Services from Affiliates .........................................................................37
Section 5.10 Non-Competition; Non-Solicitation; Non-Disparagement ...................38
Section 5.11 Use of Names ........................................................................................38
ARTICLE VI
INDEMNIFICATION
Section 6.1 Survival .................................................................................................38
Section 6.2 Indemnification by Seller ......................................................................38
Section 6.3 Indemnification by Buyer. .....................................................................39
Section 6.4 Third Party Claim Indemnification Procedures. ....................................39
Section 6.5 Consequential Damages ........................................................................41
LA_LAN01:327561.28
Section 6.6 Adjustments to Losses ...........................................................................41
Section 6.7 Payments ...............................................................................................42
Section 6.8 Characterization of Indemnification Payments .....................................42
Section 6.9 Mitigation ..............................................................................................42
Section 6.10 Exclusive Remedy .................................................................................43
Section 6.11 Release ...................................................................................................43
Section 6.12 Right of Set-Off .....................................................................................44
ARTICLE VII
DEFINITIONS
Section 7.1 Certain Definitions ................................................................................45
Section 7.2 Other Terms ...........................................................................................60
Section 7.3 Other Definitional Provisions ................................................................60
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Modification or Amendment .................................................................60
Section 8.2 Waiver ...................................................................................................60
Section 8.3 Counterparts ..........................................................................................61
Section 8.4 Governing Law; Waiver of Jury Trial; Arbitration ...............................61
Section 8.5 Notices ...................................................................................................62
Section 8.6 Entire Agreement ..................................................................................63
Section 8.7 Third-Party Beneficiaries ......................................................................63
Section 8.8 Obligations of Buyer and Seller ............................................................63
Section 8.9 Severability ............................................................................................64
Section 8.10 Public Disclosure ...................................................................................64
Section 8.11 Expenses ................................................................................................65
Section 8.12 Bulk Sales ..............................................................................................65
Section 8.13 Headings ................................................................................................65
Section 8.14 Assignment ............................................................................................65
Section 8.15 Disclaimers ............................................................................................65
EXHIBITS
Exhibit A Reserved
Exhibit B Form of Transition Services Agreement
Exhibit C Form of Hardware Supply Agreement
SCHEDULES
Schedule 2.1(b) - Excluded Contracts
Schedule 2.1(k) - Excluded Bank Accounts
LA_LAN01:327561.28
Schedule 5.2(h) - Tax Allocation
Schedule 5.3(d) - Applicable Employees
Schedule 5.3(e) - Further Actions
Schedule 5.5(a) - Guaranty Obligations
Schedule 7.1(a)(i) - Assigned Leases
Schedule 7.1(a)(ii) - Seller’s Knowledge Parties
Schedule 7.1(a)(iv) - Transferred Patents
Schedule 7.1(a)(v) - Transferred Software
Schedule 7.1(a)(vi) - Transferred Trademarks
LA_LAN01:327561.28
ASSET PURCHASE AGREEMENT, dated as of December 11, 2017 (this
“Agreement”), between VERIFONE, INC., a Delaware corporation (“Seller”), and Curb
Technologies, LLC, a Delaware limited liability company (“Buyer”).
WITNESSETH:
WHEREAS, in addition to its other businesses, Seller is engaged in the Business
(as defined below); and
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase and
assume from Seller certain assets and liabilities of Seller and one or more of its
Subsidiaries (as defined below) Related to the Business (as defined below), in each case
as more particularly set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and undertakings contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Specific Definitions. For purposes of this Agreement, the terms
defined in Article VII have the meanings specified or referred to therein.
Section 1.2 Other Terms. Other terms may be defined elsewhere in the text of
this Agreement and, unless otherwise indicated, shall have such meaning throughout this
Agreement.
ARTICLE II
PURCHASE AND SALE OF THE BUSINESS
Section 2.1 Purchase and Sale of Assets. On the terms set forth herein, at the
Closing, Seller shall, or shall cause one or more of its Subsidiaries to, sell, convey,
transfer, assign and deliver to Buyer, or one or more Subsidiaries of Buyer as set forth in
the relevant ▇▇▇▇ of sale, assignment, assignment and assumption agreement or other
appropriate document of transfer, and Buyer, or such Subsidiary of Buyer, shall purchase
from Seller or one or more of its Subsidiaries (i) the issued and outstanding ownership
interests in US Media Company free and clear of all Encumbrances (other than transfer
restrictions of general applicability under state and federal securities Laws or any
Encumbrances created by Buyer), (ii) the Transferred Intellectual Property free and clear
of all Encumbrances (other than Permitted Encumbrances) and (iii) all of Seller’s and
each of its Subsidiaries’ right, title and interest, as of the Closing, in and to all of the
properties, rights and assets of every kind and nature, whether real, personal or mixed,
LA_LAN01:327561.28
tangible or intangible, wherever located (other than the Excluded Assets and other than
Intellectual Property), to the extent Related to the Business, including the following
assets to the extent Related to the Business free and clear of all Encumbrances (other than
Permitted Encumbrances) ((i), (ii) and (iii), collectively, the “Transferred Assets”):
(a) all Current Assets;
(b) except for this Agreement, the Ancillary Agreements and the
Contracts listed on Section 2.1(b) of the Seller Disclosure Letter and subject
to Section 2.2(k), all Contracts to which Seller or any of its Subsidiaries is a party
(the “Assumed Contracts”), including, without limitation, those Contracts set
forth in Section 2.1(c) of the Seller Disclosure Letter;
(c) Books and Records;
(d) Fixtures and Equipment;
(e) Leased Real Property;
(f) all causes of action, lawsuits, judgments, claims and demands of
any nature available to or being pursued by Seller or any of its Subsidiaries to the
extent primarily related to the Transferred Assets, the Assumed Liabilities or the
ownership, use, function or value of any Transferred Asset or Related to the
Business, whether arising by way of counterclaim or otherwise, except to the
extent included in the Excluded Assets, including, without limitation, any attorney
or expert engagements or fee arrangements entered into by Seller or any of its
Subsidiaries in connection with any such cause of action, lawsuit, judgment, claim
or demand;
(g) all lease security deposits under any Assigned Leases;
(h) to the extent but only to the extent their transfer is permitted by
Law, all Governmental Authorizations and Non-Governmental Authorizations
and all applications therefor and renewals thereof;
(i) all guaranties, warranties, indemnities and similar rights in favor of
Seller or any of its Subsidiaries to the extent primarily related to any Transferred
Asset or the Assumed Liabilities or Related to the Business;
(j) to the extent but only to the extent their transfer is permitted by the
applicable telephone service provider and Law, all telephone numbers used by
Seller and Related to the Business and/or primarily related to the Transferred
Assets;
LA_LAN01:327561.28
(k) all bank accounts Related to the Business (excluding any cash and
cash equivalents in such bank accounts as of the Closing, but including deposits in
transit) other than those bank accounts set forth on Schedule 2.1(k);
(l) all non-current assets; and
(m) all goodwill of the Business or Related to the Business and/or
related to the Transferred Assets.
Section 2.2 Excluded Assets. Notwithstanding anything herein to the contrary,
from and after the Closing, Seller and its Subsidiaries shall retain all of their existing
right, title and interest in and to, and there shall be excluded from the sale, conveyance,
assignment or transfer to Buyer hereunder, and the Transferred Assets shall not include
(it being understood that to the extent any assets owned by US Media Company would
have constituted an Excluded Asset, Seller has, prior to the Closing, caused US Media
Company to transfer and assign such assets to Seller), the following assets specifically set
forth in this Section 2.2 (collectively, the “Excluded Assets”):
(a) any asset or class of assets excluded from the defined terms set
forth in Section 2.1(a)-(m) by virtue of the limitations expressed or implied
therein;
(b) all Tax Returns of Seller or any of its Subsidiaries and all books
and records (including working papers) related thereto;
(c) except as provided in Section 5.3 of this Agreement, all rights in
connection with and assets of the Seller Compensation and Benefit Plans;
(d) all insurance policies and rights thereunder;
(e) all cash and cash equivalents excluding deposits in transit;
(f) all Intracompany Receivables;
(g) all personnel records, other than the Transferred Employees’
Records;
(h) all insurance proceeds that relate to events, circumstances or
occurrences prior to the Closing;
(i) all claims with respect to debtors or debtors-in-possession subject
to proceedings under Chapter 11 of Title 11 of the United States Bankruptcy Code
to the extent such claims are subject to an order entered by a United States
Bankruptcy Court that would void or otherwise materially affect the Transactions
in the event any relevant consent is not obtained from such Bankruptcy Court or
the relevant debtor or debtor-in-possession prior to the Closing;
LA_LAN01:327561.28
(j) all Contracts other than the Assumed Contracts; and
(k) the rights and benefits of the Assumed Contracts to the extent they
relate to the period prior to the Closing.
Section 2.3 Assumption of Liabilities. On the terms and subject to the
conditions set forth herein, at the Closing, Buyer shall assume and thereafter discharge or
perform when due only the Assumed Liabilities; provided that with respect to any
Assumed Contract that has not been assigned and is treated in accordance with Section
2.9 (an “Unassigned Contract”), Buyer shall not be responsible for Assumed Liabilities
arising in connection with any such Unassigned Contract to the extent attributable to a
period during which Buyer, via Seller and its Subsidiaries, is unable to obtain
substantially all of the benefits of such Unassigned Contract and exercise substantially all
of Seller’s and its Subsidiaries’ right under such Unassigned Contract. For example, if the
counterparty to a Taxi media lease does not consent to the assignment thereof, then for
any period in which such counterparty does not allow Buyer to post advertisements to
such counterparty’s Taxis, Buyer shall not be responsible for payment of amounts due to
such counterparty in respect of such period. It is understood and agreed that in the event
Buyer is not responsible for Assumed Liabilities arising in connection with an
Unassigned Contract, Seller may terminate and/or elect not to renew such Unassigned
Contract in accordance with the terms of such Unassigned Contract.
Section 2.4 Excluded Liabilities. Seller and its Subsidiaries each shall retain
and be responsible for all of, and Buyer does not agree to assume, perform or discharge,
indemnify Seller or any Person against, or otherwise have any responsibility for any of,
the Excluded Liabilities.
Section 2.5 Purchase Price.
(a) On the terms and subject to the conditions set forth herein, in
consideration of the sale of the Transferred Assets, in addition to the assumption of the
Assumed Liabilities, Buyer shall pay to Seller at the Closing, an amount in cash equal
to $22,500,000 (the “Closing Purchase Price”).
(b) On or before the 90th calendar day following the Closing Date, Buyer shall
pay, or cause to be paid, by wire transfer of immediately available funds to an account
or accounts which have been designated by Seller the Deferred Purchase Price
Payment.
(c) Interest shall be payable with respect to the Deferred Purchase Price
Payment not paid on or prior to the date prescribed therefor in Section 2.5(b) and with
respect to the Net Working Capital Payment not paid on or prior to the date prescribed
therefor in Section 2.11(f), and all computations of such interest shall be based on a rate
of 8%, calculated on the basis of a year of 365 days, in each case for the actual number
of days (including the first day but excluding the last day) occurring in the period for
which such interest is payable. If the Deferred Purchase Price Payment under this
LA_LAN01:327561.28
Agreement will be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall be included in
the computation of payment of interest.
Section 2.6 Closing. The Closing shall take place remotely via the exchange
of documents and signatures by facsimile or electronic transmission concurrently with the
delivery of this Agreement, or at such other place or time as the parties may mutually
agree in writing. The date on which the Closing occurs is hereinafter referred to as the
“Closing Date”. The Closing will be deemed effective at 12:01 Eastern Time on the
Closing Date. In the event that the entire Closing Purchase Price has not been transferred
to Seller in accordance with Section 2.7(a) by 11:59 PM Eastern Time on the date hereof,
Seller shall return to Buyer any amount of Closing Purchase Price received by Seller and
the Closing shall be deemed not have occurred.
Section 2.7 Deliveries by Buyer. At the Closing, Buyer shall deliver, or cause
to be delivered, the following:
(a) to Seller, the Closing Purchase Price in immediately available
funds by wire transfer to an account or accounts which have been designated by
Seller;
(b) to Seller, such instruments of assumption and other instruments or
documents, in form and substance reasonably acceptable to Seller, as may be
necessary to effect Buyer’s assumption of the Assumed Liabilities and the
effective assignment of any Contracts or other Transferred Assets;
(c) to Seller, a duly executed counterpart of each of the Ancillary
Agreements; and
(d) to Seller, a duly executed counterpart of the Curb Intermediate
Holdings I LLC Agreement, duly executed by Curb Holdings, LLC.
Section 2.8 Deliveries by Seller. At the Closing, Seller shall deliver, or cause
to be delivered, to Buyer the following:
(a) bills of sale or other appropriate documents of transfer, in form and
substance reasonably acceptable to Buyer, transferring the tangible personal
property included in the Transferred Assets to Buyer;
(b) assignments, in form and substance reasonably acceptable to Buyer
and, if applicable, as required by any Governmental Entity with which Seller’s or
any of its Subsidiaries’ rights to any Transferred Intellectual Property have been
filed, assigning to Buyer the Transferred Intellectual Property;
(c) assignments of the Assigned Leases, in the form and substance
reasonably acceptable to Buyer;
LA_LAN01:327561.28
(d) certificates representing all of the outstanding ownership interests
of US Media Company or other appropriate evidence of transfer of such
ownership interests;
(e) assignment and assumption agreements, in form and substance
reasonably acceptable to Buyer and Seller, assigning to Buyer all rights of Seller
and its Subsidiaries in and to all of the Assumed Contracts, exclusive of any
Excluded Liabilities;
(f) a duly executed certification that Seller is not a foreign Person
within the meaning set forth in Treasury Regulation
Section 1.1445-2(b)(2)(iii)(A);
(g) a duly executed counterpart of each of the Ancillary Agreements;
(h) a duly executed counterpart of the Curb Intermediate Holdings I
LLC Agreement, duly executed by VeriFone, Inc.; and
(i) such other instruments or documents, in form and substance
reasonably acceptable to Buyer, as may be necessary to effect the effective
assignment of any Assumed Contracts or other Transferred Assets to Buyer.
Section 2.9 Nonassignability of Assets. Notwithstanding anything to the
contrary contained in this Agreement, to the extent that the sale, assignment, sublease,
transfer, conveyance or delivery or attempted sale, sublease, assignment, transfer,
conveyance or delivery to Buyer of any asset that would be a Transferred Asset or any
claim or right or any benefit arising thereunder or resulting therefrom is prohibited by any
applicable Law or would require any governmental or third-party authorizations,
approvals, consents or waivers, and such authorizations, approvals, consents or waivers
shall not have been obtained prior to the Closing, then following the Closing, the parties
shall use their reasonable best efforts, and cooperate with each other, to obtain promptly
such authorizations, approvals, consents or waivers (including in relation to Leased Real
Property the provision of any guarantees by Buyer or any of its Subsidiaries (but not of
any individual or parent of Buyer), the transfer of existing rental or other deposits
constituting Transferred Assets, direct covenants or other security for the performance of
the tenant covenants of the Leased Real Property as may be lawfully required); provided,
however, that none of Seller or Buyer or any of their respective Affiliates shall be
required to make any additional rental or other deposits or pay any consideration therefor
other than filing, recordation or similar fees which shall be shared equally by Seller and
Buyer. Pending such authorization, approval, consent or waiver, the parties shall
cooperate with each other in any mutually agreeable, reasonable and lawful arrangements
designed to provide to Buyer the benefits of use of such asset in the operation of the
Business and to Seller or its Affiliates the benefits, including any indemnities, that they
would have obtained had the asset been conveyed to Buyer at the Closing. If
authorization, approval, consent or waiver for the sale, assignment, sublease, transfer,
conveyance or delivery of any such asset not sold, assigned, subleased, transferred,
LA_LAN01:327561.28
conveyed or delivered at the Closing is thereafter obtained, Seller shall, or shall cause the
relevant Subsidiaries to, assign, transfer, convey and deliver such asset to Buyer at no
additional cost. To the extent that any such asset cannot be transferred or the full benefits
of use of any such asset cannot be provided to Buyer following the Closing pursuant to
this Section 2.9, then Buyer and Seller shall enter into such arrangements (including
subleasing, sublicensing or subcontracting) to provide to the parties hereto the economic
(taking into account Tax costs and benefits) and operational equivalent, to the extent
permitted and reasonably practicable, of obtaining such authorization, approval, consent
or waiver and the performance by Buyer of the obligations thereunder. Seller shall hold
in trust for and pay to Buyer promptly upon receipt thereof, all income, proceeds and
other monies received by Seller or any of its Subsidiaries in connection with its use of
any asset that it would not have received but for the arrangements in this Section 2.9 (net
of any Taxes and any other costs imposed upon Seller or any of its Subsidiaries in
connection with the arrangements under this Section 2.9). Buyer shall pay to Seller,
promptly upon receipt of any invoice from Seller, all Losses generated by Seller or any of
its Affiliates attributable to Buyer’s use of any asset in connection with the arrangements
under this Section 2.9.
Section 2.10 Withholding. Buyer and any of its agents shall be permitted to
deduct and withhold or cause to be deducted and withheld from any amounts payable
pursuant to this Agreement all amounts required to be deducted and withheld under
applicable Law. Before any such deduction or withholding is made, Buyer shall provide
Seller 30 days’ advance written notice of the intention to make such deduction or
withholding, which notice shall include the authority, basis and method of calculation for
the proposed deduction or withholding, and Buyer shall (at the Seller’s expense)
cooperate with any reasonable request from Seller to obtain reduction of or relief from
such deduction or withholding. Any amounts so deducted and withheld in compliance
with this Section 2.10 shall be treated for all purposes of this Agreement as paid to such
Person in respect of which such deduction and withholding were made by Buyer or any
of its agents.
Section 2.11 Net Working Capital Adjustment.
(a) Within ninety (90) days following the Closing, Buyer shall deliver to
Seller a statement of Net Working Capital as of the Closing determined on a basis
consistent with the methodologies set forth on the Carve-Out Balance Sheet and the
definition thereof (the “Closing Working Capital Statement”) together with reasonable
documentation, which shall be prepared from the books and records of the Business.
(b) If Seller objects to any amounts reflected on the Closing Working Capital
Statement, Seller must, within thirty (30) days after Seller’s receipt of the Closing
Working Capital Statement, give written notice (the “Working Capital Dispute Notice”)
to Buyer specifying in reasonable detail the objections of Seller, including its
alternative statement of Net Working Capital as of the Closing determined on a basis
consistent with the methodologies set forth on the Carve-Out Balance Sheet and the
LA_LAN01:327561.28
definition thereof. If Seller fails to timely deliver a Working Capital Dispute Notice,
Buyer’s determination of Net Working Capital as of the Closing as set forth in the
Closing Working Capital Statement shall be final, binding and conclusive on the
parties. Any disputes with respect to the Closing Working Capital Statement shall be
resolved pursuant to the procedures set forth in Section 2.11(c).
(c) If, within the objection period afforded to Seller pursuant to Section
2.11(b), a Working Capital Dispute Notice is delivered by Seller to Buyer,
representatives of the parties shall negotiate in good faith during the twenty (20) day
period (the “Working Capital Resolution Period”) after the date of Buyer’s receipt of
the Working Capital Dispute Notice to resolve any disputes. If the parties are unable to
resolve all such disputes within the Working Capital Resolution Period, then they shall
refer any remaining disagreements to the CPA Firm which, acting as experts and not as
arbitrators, shall determine, on the basis set forth in and in accordance with this Section
2.11 (and the methodologies set forth in the Carve-Out Balance Sheet and definition of
“Net Working Capital”), and only with respect to the remaining differences so
submitted, whether and to what extent, if any, the Closing Working Capital Statement
and the Net Working Capital amount reflected therein require adjustment. Buyer and
Seller shall instruct the CPA Firm to deliver its written determination to Buyer and
Seller no later than thirty (30) days after the remaining differences underlying the
Working Capital Dispute Notice are referred to the CPA Firm. The written
determination of the CPA Firm for each item remaining in disagreement must be within
the range of amounts for such item asserted by Buyer in the Closing Working Capital
Statement and Seller in the Working Capital Dispute Notice. The CPA Firm’s
determination shall be conclusive and binding upon Buyer and Seller and their
Affiliates absent manifest error. The fees and disbursements of the CPA Firm shall be
borne equally by Buyer and Seller. Buyer and Seller shall make readily available to the
CPA Firm all relevant books and records and any work papers (including those of the
parties’ respective accountants, to the extent permitted by such accountants) relating to
the Closing Working Capital Statement and the Working Capital Dispute Notice and all
other items reasonably requested by the CPA Firm in connection therewith. Seller and
Buyer shall execute any agreement required by the CPA Firm to accept the engagement
contemplated by this Section 2.11(c). The parties agree that the procedure set forth in
this Section 2.11 for resolving disputes relating to the Closing Working Capital
Statement shall be the sole and exclusive remedy for resolving such disputes; provided,
however, that the parties agree that judgment may be entered upon the determination of
the CPA Firm in any court having jurisdiction over the party against which such
determination is to be enforced.
(d) Buyer shall provide to Seller and its accountants reasonable access to the
books and records of the Business and to any other information, including work papers
of its accountants (to the extent permitted by such accountants), and to any employees
during regular business hours and on reasonable advance notice, to the extent necessary
for Seller to prepare the Working Capital Dispute Notice and to prepare materials for
presentation to the CPA Firm in connection with Section 2.11(c). Buyer and its
LA_LAN01:327561.28
accountants shall have reasonable access to all information used by Seller in preparing
the Working Capital Dispute Notice, including the work papers of its accountants (to
the extent permitted by such accountants).
(e) The final, binding and conclusive determination of Net Working Capital
as of the Closing, whether by written agreement between Seller and Buyer or as
provided in Section 2.11(b) and Section 2.11(c) shall be the “Final Net Working
Capital”.
(f) If the Final Net Working Capital is greater than the Target Net Working
Capital, then, on or before the fifth Business Day after the determination of Final Net
Working Capital, Buyer shall pay to Seller the amount of such difference (such
payment, the “Net Working Capital Payment”). If the Target Net Working Capital is
greater than or equal to the Final Working Capital, no additional payment by either
party shall be due hereunder.
Section 2.12 Buyer as Seller’s Agent With respect to New York City Taxi
Licenses. From the Closing Date until such time as the New York City Taxi and
Limousine Commission and any other necessary Governmental Entity consents to and
effects the transfer of the Business’ New York City Taxi Licenses (the “NYC Licenses”)
from Seller and its Subsidiaries to Buyer, Seller hereby appoints Buyer or Buyer’s
designee as its sole and exclusive agent for performance of any and all obligations and
exercise of any and all rights under, pursuant to and in connection with the NYC
Licenses. In furtherance of the foregoing, Seller, for itself and on behalf of its Affiliates,
hereby appoints Buyer, and any designee of Buyer and any officer of Buyer or such
designee, with full power of substitution, as its true and lawful attorney-in-fact with full,
irrevocable power and authority in the place and stead of Seller or its applicable Affiliate,
and in the name of Seller or such Affiliate for the purpose of performing any obligation
or exercising any right under, pursuant to or in connection with any NYC License,
including, without limitation, entering into or amending Contracts for the provision of
goods or services to or for Taxis operating in New York City, New York. The power of
attorney granted under the foregoing sentence is coupled with an interest and is
irrevocable. For the avoidance of doubt, Buyer and its Affiliates will be fully entitled and
empowered to collect and retain any and all amounts becoming due and payable after the
Closing in connection with the provision of goods and services by Buyer or its Affiliates
to and for Taxis operating in New York City, New York. Buyer shall indemnify and
defend Seller, and hold Seller harmless with respect to, any penalty, fine, fee, assessment,
claim, judgment or other documented out-of-pocket cost incurred by Seller or any of its
Affiliates as a result of (i) any act or failure to act by Buyer or its designee in connection
with Buyer’s or such designee’s performance of any obligations, or the exercise of any
rights, under, pursuant to or in connection with the NYC Licenses, and (ii) Seller or any
of its Affiliates carrying out any act expressly requested by Buyer in writing in
connection with Buyer performing any obligations or exercising any rights in connection
with the NYC Licenses.
LA_LAN01:327561.28
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer, as of the date of this
Agreement (it being understood that to the extent any such representation and warranty
speaks as of a particular date, Seller makes such representation and warranty only with
respect to such particular date), that, except as otherwise permitted in this Agreement or
as set forth (i) in the corresponding sections or subsections of the disclosure letter
delivered to Buyer by Seller at the time of entering into this Agreement (the “Seller
Disclosure Letter”) or (ii) to the extent that the qualifying nature of a disclosure in the
Seller Disclosure Letter with respect to another section or subsection is reasonably
apparent on the face of such disclosure, in such other disclosure:
Section 3.1 Organization and Qualification. Each of Seller, US Media
Company and each of Seller’s Subsidiaries that is selling, conveying or transferring
Transferred Assets pursuant to or in connection with this Agreement or any Ancillary
Agreement, including US Media Company (Seller, US Media Company and such
Subsidiaries, collectively, the “Seller Parties”), is a legal entity duly organized and
validly existing under the Laws of its respective jurisdiction of organization and has all
requisite corporate or similar power and authority to own, lease and operate its properties
and assets and to carry on the Business as presently conducted and is duly licensed or
qualified to do business as a foreign corporation or other legal entity in each jurisdiction
where the ownership, leasing or operation of its assets or properties or conduct of its
business so requires, except where the failure to be so licensed or qualified or in good
standing, individually or in the aggregate, would not reasonably be likely to have a
Material Adverse Effect.
Section 3.2 US Media Company.
(a) Section 3.2 of the Seller Disclosure Letter completely and accurately sets
forth the jurisdiction of organization and authorized and outstanding ownership
interests of US Media Company as of the date hereof. Seller has heretofore delivered
to Buyer complete and correct copies of the Organizational Documents of US Media
Company as in effect on the date of this Agreement. All of the outstanding ownership
interests of US Media Company have been duly authorized and validly issued and are
fully paid and non assessable.
(b) There are no preemptive or other outstanding rights, options, warrants,
conversion rights, stock appreciation rights, redemption rights, repurchase rights,
agreements, arrangements, commitments or rights of any kind that obligate US Media
Company to issue or sell, or that give any Person a right to subscribe for or acquire, or
in any way dispose of, any ownership interests, or any securities or obligations
exercisable or exchangeable for or convertible into any other ownership interests, of US
Media Company, and no securities or obligations evidencing such rights are authorized,
LA_LAN01:327561.28
issued or outstanding. The outstanding ownership interests of US Media Company are
not subject to any voting trust agreement or other contract, agreement or arrangement
restricting or otherwise relating to the voting, dividend rights or disposition of such
stock or other ownership interests.
(c) Seller has good and valid title to all of the issued and outstanding
ownership interests of US Media Company, free and clear of all Encumbrances, other
than transfer restrictions of general applicability under state and federal securities Laws
or any Encumbrances created by Buyer, and upon delivery by Seller of the outstanding
ownership interests of US Media Company at the Closing, good and valid title to the
outstanding ownership interests of US Media Company, free and clear of all
Encumbrances (other than Permitted Encumbrances and any Encumbrances created by
Buyer or resulting from Buyer’s ownership), will pass to Buyer.
(d) US Media Company owns no capital stock or equity interests in any
Person.
(e) At all times since December 31, 2009, US Media Company has been a
disregarded entity for U.S. federal income Tax purposes at all times since its formation.
Section 3.3 Corporate Authorization. Seller has full corporate power and
authority to execute and deliver this Agreement, and each of the other Seller Parties has
full power and authority to execute and deliver each of the Ancillary Agreements to
which it is a party, and to perform its obligations hereunder and thereunder. The
execution, delivery and performance by Seller of this Agreement, and the execution,
delivery and performance by each of the other Seller Parties of each of the Ancillary
Agreements to which it is a party has been duly and validly authorized and no additional
corporate or stockholder authorization or consent is required in connection with the
execution, delivery and performance by Seller of this Agreement or the execution,
delivery and performance by each of the other Seller Parties of any of the Ancillary
Agreements to which it is a party.
Section 3.4 Consents and Approvals. Except as set forth in Section 3.4 of the
Seller Disclosure Letter, no filings, notices and/or reports are required to be made by any
of the Seller Parties with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained from, any Governmental Entity or other Person in
connection with the execution, delivery and performance of this Agreement or the
Ancillary Agreements by Seller or any of its Subsidiaries and the consummation of the
Transactions, except those the failure to make or obtain are not, individually or in the
aggregate, reasonably likely to have a material adverse effect on any Seller Party’s ability
to perform its obligations under or in connection with this Agreement or the Ancillary
Agreements or to prevent the consummation of the Transactions.
Section 3.5 Non-Contravention. The execution, delivery and performance of
this Agreement by Seller, and the execution, delivery and performance of the Ancillary
Agreements by each of the other Seller Parties, does not, and the consummation of the
LA_LAN01:327561.28
Transactions will not, constitute or result in (A) a violation of the certificate of
incorporation, by-laws or governing documents of any of the Seller Parties or US Media
Company, (B) conflict with or result in a violation or breach of any Law applicable to
any Seller Party, the Business or any of the Transferred Assets, (C) with or without
notice, lapse of time or both, a breach or violation of, a default or termination (or right of
termination) under, the creation or acceleration of any obligations under, or the creation
of an Encumbrance on its assets or the assets of any of its Subsidiaries pursuant to, any
agreement, lease, license, contract, note, mortgage, indenture, arrangement or other
obligation binding upon any Seller Party or any Law to which any Seller Party is subject
or (D) any change in the rights or obligations of any party under any Contract, except, in
the case of clause (C) or (D) above, for any such breach, violation, termination, default,
acceleration, creation or change that is not reasonably likely to have a material adverse
effect on the ability of the Seller Parties to perform their obligations under or in
connection with this Agreement or the Ancillary Agreements or to prevent the
consummation of the Transactions.
Section 3.6 Binding Effect. This Agreement and each of the Ancillary
Agreements, when executed and delivered by Buyer and the other parties thereto,
constitutes a valid and legally binding obligation of the Seller Parties, enforceable against
each of the Seller Parties in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally or
general equitable principles.
Section 3.7 Financial Statements.
(a) Seller has made available to Buyer the following financial
information: unaudited condensed combined income statement information and
unaudited condensed combined cash flow information for the fiscal year ended
October 31, 2016 and October 31, 2017, for the Business (such information being the
“Annual Financial Information”). The Annual Financial Information, except as
otherwise stated therein, has been derived from the books and records of Seller
maintained for purposes of preparing its consolidated financial statements; it being
understood that the Annual Financial Information does not include financial statement
footnotes or combined balance sheet information and will be subject to normal audit
and other adjustments; and provided, further, that the Annual Financial Information
does not necessarily reflect the Business’ consolidated results of operations and
financial position in the future or what its consolidated results of operations and
financial position would have been had it been a stand-alone company during the
periods presented.
(b) Seller has made available to Buyer unaudited condensed combined
income statement and cash flow information for the Business as of and for the nine (9)-
month period ended July 31, 2017 (such information being the “Interim Financial
Information” and, together with the Annual Financial Information, the “Combined
Financial Information”). The Interim Financial Information has been derived from the
LA_LAN01:327561.28
books and records of Seller maintained for purposes of preparing its consolidated
financial statements; it being understood that the Interim Financial Information does not
include financial statement footnotes or balance sheet information and will be subject to
normal year end, audit and other adjustments; and provided, further, that the Interim
Financial Information does not necessarily reflect the Business’ consolidated results of
operations and financial position in the future or what its consolidated results of
operations and financial position would have been had it been a stand-alone company
during the periods presented.
Section 3.8 Absence of Changes. Other than as set forth in Section 3.8 of the
Seller Disclosure Letter, since July 31, 2017, the Business has been conducted in all
material respects in accordance with the ordinary course of such business consistent with
past practices and there has not been any change or development that is reasonably likely
to have a Material Adverse Effect.
Section 3.9 Litigation. Except as set forth in Section 3.9 of the Seller
Disclosure Letter or as are not or would not be expected to be material to the Business,
there are no Proceedings (excluding, for the avoidance of doubt, any subpoena served
upon Seller by any Governmental Entity in the ordinary course of Seller’s business)
pending or, to Seller’s knowledge, threatened against Seller or any of its Subsidiaries,
with respect to or relating to or affecting the Business, the Transferred Assets or the
Assumed Liabilities. None of US Media Company, the Business, the Transferred Assets
or the Assumed Liabilities is subject to the provisions of, any judgment, order, writ,
injunction, decree or award of any Governmental Entity.
Section 3.10 Employee Benefits.
(a) Section 3.10 of the Seller Disclosure Letter sets forth a true and
complete list of each material Seller Compensation and Benefit Plan sponsored or
maintained with respect to or for the benefit of Applicable Employees, other than
broad-based employee welfare and similar plans that do not provide for salary, bonus,
incentive or equity compensation or severance arrangements. For purposes of this
Agreement, the term “Seller Compensation and Benefit Plan” shall mean any employee
or director benefit plan, arrangement or agreement, including any such plan that is an
employee welfare benefit plan within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), an employee pension
benefit plan within the meaning of Section 3(2) of ERISA (whether or not such plan is
subject to ERISA) or a non-de minimis bonus, incentive, deferred compensation,
vacation, stock purchase, stock option, stock-based severance, employment, change of
control or fringe benefit plan, program or agreement that is sponsored or maintained by
Seller or any of its Subsidiaries to or for the benefit of the Applicable Employees.
(b) For each Seller Compensation and Benefit Plan listed in Section
3.10 of the Seller Disclosure Letter, Seller has heretofore made available to Buyer true
and complete copies of each Seller Compensation and Benefit Plan and (A) each
LA_LAN01:327561.28
writing constituting a part of such Seller Compensation and Benefit Plan, including all
amendments thereto; (B) the most recent (x) Annual Reports (Form 5500 Series) and
accompanying schedules, if any, (y) audited financial statements and (z) actuarial
valuation reports, if any; (C) the most recent determination letter from the Internal
Revenue Service (“IRS”) (if applicable) for such Seller Compensation and Benefit
Plan; and (D) any related trust agreement or funding instrument now in effect or
required in the future as a result of the Transactions.
(c) (A) Each Seller Compensation and Benefit Plan has been established,
operated and administered in all material respects in compliance with its terms and
applicable Laws, including ERISA, the Code and, in each case, the regulations
thereunder; (B) each Seller Compensation and Benefit Plan intended to be “qualified”
within the meaning of Section 401(a) of the Code has been determined by the Internal
Revenue Service to be qualified under Section 401(a) of the Code and, to the
knowledge of Seller, there are no existing circumstances or events that have occurred
that could reasonably be expected to adversely affect the qualification of any such
Seller Compensation and Benefit Plan; (C) no Seller Compensation and Benefit Plan is
subject to Title IV of ERISA; (D) no Seller Compensation and Benefit Plan provides
health, life insurance or disability benefits (whether or not insured), with respect to
current or former employees or directors of Seller or its Subsidiaries beyond their
retirement or other termination of service, other than (x) coverage mandated by
applicable Law or (y) death benefits or retirement benefits under any “employee
pension plan” (as such term is defined in Section 3(2) of ERISA); (E) no material
liability under Title IV of ERISA has been incurred by Seller, its Subsidiaries or any
ERISA Affiliate of Seller that has not been satisfied in full, and, to the knowledge of
Seller, no condition exists that presents a risk to Seller, its Subsidiaries or any ERISA
Affiliate of Seller of incurring a material liability thereunder; (F) no Seller
Compensation and Benefit Plan is a “multiemployer pension plan” (as such term is
defined in Section 3(37) of ERISA); (G) all contributions or other amounts payable by
Seller or its Subsidiaries as of the date hereof with respect to each Seller Compensation
and Benefit Plan in respect of current or prior plan years have been, in all material
respects, paid or accrued in accordance with GAAP; (H) neither Seller nor its
Subsidiaries has engaged in a transaction in connection with which Seller or its
Subsidiaries could reasonably be expected to be subject to a material Tax imposed
pursuant to Section 4975 of the Code; and (I) there are no pending, threatened or
anticipated claims (other than routine claims for benefits) by, on behalf of or against
any Seller Compensation and Benefit Plan or any trusts related thereto which could
reasonably be expected to result in any material liability to Seller or any of its
Subsidiaries. “ERISA Affiliate” means, with respect to any entity, trade or business,
any other entity, trade or business that is a member of a group described in Section
414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the
first entity, trade or business, or that is a member of the same “controlled group” as the
first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.
LA_LAN01:327561.28
(d) Except as set forth in Section 3.10(d) of the Seller Disclosure
Letter, none of the execution of this Agreement or the Transactions either alone or
together with any other event will, (A) entitle any Applicable Employees to severance
pay or any increase in severance pay upon any termination of employment after the
date of this Agreement, (B) accelerate the time of payment or vesting or result in any
payment or funding (through a grantor trust or otherwise) of compensation or benefits
under, increase the amount payable or result in any other material obligation pursuant
to, any Seller Compensation and Benefit Plan, (C) limit or restrict the right of Seller, or,
after the consummation of the Transactions, Buyer, to merge, amend or terminate any
Seller Compensation and Benefit Plan, or (D) result in payments under any Seller
Compensation and Benefit Plan which would not be deductible under Section 280G of
the Code.
Section 3.11 Compliance with Laws.
(a) The Business has not been during the past three (3) years, and is
not being, conducted in violation of any Law in any material respect, and no
investigation or review by any Governmental Entity with respect to the Business is
pending or, to the knowledge of Seller, threatened, nor, to the knowledge of Seller, has
any Governmental Entity indicated an intention to conduct the same. Seller has not
received any notice or communication of any noncompliance with any such Laws with
respect to the Business, the Transferred Assets or the Assumed Liabilities that has not
been cured as of the date of this Agreement.
(b) The Business is in compliance in all material respects with all
Laws applicable to the transfer of personally identifiable information. The Business
has employed commercially reasonable security measures and safeguards intended
reasonably to protect personally identifiable information from illegal or unauthorized
access, download or use by its personnel or third parties.
Section 3.12 Environmental Matters.
(a) Except as would not reasonably be expected to have a Material
Adverse Effect, to the knowledge of Seller, (i) the Business has complied during the
past three (3) years with all applicable Environmental Laws; (ii) no Leased Real
Property (including soils, groundwater, surface water, buildings or other structures) is
contaminated with any Hazardous Substances; (iii) neither Seller nor any of its
Subsidiaries is subject to liability for any Hazardous Substance disposal or
contamination on any third-party property in connection with the Business; (iv) during
the past three (3) years the Business has not been associated with any release or threat
of release of any Hazardous Substance; (v) neither Seller nor any of its Subsidiaries is
subject to any order, decree, injunction or other arrangement with any Governmental
Entity or is subject to any indemnity or other agreement with any third party relating to
liability under any Environmental Law or relating to Hazardous Substances in
connection with the Business; and (vi) there are no circumstances or conditions
LA_LAN01:327561.28
involving the Business that could reasonably be expected to result in any claim, liability
or cost or any restriction on the ownership, use or transfer of any of its properties
pursuant to any Environmental Law.
(b) Except as would not reasonably be expected to have a Material
Adverse Effect, each of the Business’ products does and has complied during the past
three (3) years with any and all applicable Laws pertaining to the presence (or absence)
of specified substances in electrical or electronic or other products; registration or
notification of chemical substances in products; labeling of product or product
packaging as respects product content or as respects health, safety or environmental
effects or attributes or as respects required end-of-life handling or disposition of
products or product packaging; and coverage and payment of fees under an approved
scheme for end-of-life, return and recycling of products or of product packaging.
Section 3.13 Taxes. Except as would not reasonably be expected to have a
Material Adverse Effect, (i) all Tax Returns with respect to US Media Company or the
Business that are required to be filed on or before the date of this Agreement have been
duly filed and all amounts shown to be due and owing thereon have been duly and timely
paid; (ii) the Seller Parties have withheld from their employees and timely paid to the
appropriate authorities or set aside in an account for such purpose proper and accurate
amounts for all periods through the date of this Agreement in compliance with all Tax
withholding provisions (including income, social security and employment Tax
withholding); (iii) there is no lien for Taxes upon any assets of US Media Company or
any of the Transferred Assets nor, to the knowledge of Seller, is any Tax authority in the
process of imposing any lien for Taxes on any assets of US Media Company or any of
the Transferred Assets, other than liens for Taxes that are not yet due and payable or for
Taxes the validity or amount of which is being contested by Seller or one of its Affiliates
in good faith by appropriate action; (iv) no issues that have been raised by the relevant
Tax authority in connection with any examination of the Tax Returns referred to in
paragraph (i) hereof are currently pending, and all deficiencies asserted or assessments
made, if any, as a result of such examinations have been paid in full, unless the validity or
amount thereof is being contested by Seller or one of its Affiliates in good faith by
appropriate action; and (v) US Media Company is not, and, within the past three (3)
years, has not been, a party to any Contract with any Person under which US Media
Company has agreed to share any Tax Liability.
Section 3.14 Labor Matters. There is not pending or, to Seller’s knowledge,
threatened, nor has there been for the past three (3) years, any labor strike, walk-out,
work stoppage, slow-down or lockout involving any Seller Party in each case with
respect to the Applicable Employees, except in each case as would not reasonably be
expected to have a Material Adverse Effect. To Seller’s knowledge, there are no
organizational efforts with respect to the formation of a collective bargaining unit
presently being made involving Applicable Employees. Seller has previously made
available to Buyer correct and complete copies of all collective bargaining agreements or
other Contracts with a labor union, works council or labor organization to which any
LA_LAN01:327561.28
Seller Party is party or by which any of them are otherwise bound, in each case with
respect to the Applicable Employees.
Section 3.15 Intellectual Property.
(a) Section 3.15(a) of the Seller Disclosure Letter sets forth a list of all
Registered Transferred Intellectual Property and Registered Intellectual Property that is
owned by US Media Company, indicating for each such item the registration or
application number and the applicable filing jurisdiction (the “Scheduled Intellectual
Property”). To the knowledge of Seller, the Scheduled Intellectual Property is valid,
subsisting and enforceable, and is not subject to any outstanding order, judgment,
decree or agreement adversely affecting the Business’ use thereof or its rights thereto
and, to the knowledge of Seller, neither the Business, nor any of its products or
services, infringes, misappropriates or violates the Intellectual Property of any third
party except in any such case as would not reasonably be likely to have a Material
Adverse Effect.
(b) To the knowledge of Seller, subject to Section 5.7(d) and Section
5.7(e), the Transferred Intellectual Property, the Intellectual Property licensed or used
on a hosted basis pursuant to Assumed Contracts, the Seller Licensed Intellectual
Property and the Intellectual Property contemplated to be used or otherwise exploited at
any time by or on behalf of Seller or any of its Affiliates in connection with the services
provided pursuant to the Transition Services Agreement, comprises all of the
Intellectual Property necessary for Buyer to conduct the Business immediately
following the Closing in the same manner as currently conducted by Seller and its
Subsidiaries.
(c) Neither Seller nor any of its Subsidiaries has granted any licenses
or other rights to third parties to use any of the Transferred Intellectual Property other
than non-exclusive licenses granted in the ordinary course of business, licenses or rights
to use outside the scope of the Business and exclusive licenses set forth in
Section 3.15(c) of the Seller Disclosure Letter.
(d) The IT Assets operate and perform in all material respects in
accordance with their documentation and functional specifications and otherwise as
required by the Business and have not malfunctioned or failed within the past three (3)
years, except in each case as would not reasonably be expected to have a Material
Adverse Effect. To Seller’s knowledge, no person has gained unauthorized access to
the IT Assets. With respect to the Business, Seller has implemented reasonable backup
and disaster recovery technology consistent with industry practices.
Section 3.16 Material Contracts.
(a) Section 3.16(a) of the Seller Disclosure Letter sets forth a true and
complete list of each of the following Contracts Related to the Business:
LA_LAN01:327561.28
(i) any lease of real or personal property providing for annual
rentals of $250,000 or more;
(ii) other than purchase orders or agreements related to the sale
of the Seller’s products and services in the ordinary course of business, including
end-of-life raw materials and finished goods inventory purchases, (w) any
Contract for the purchase of raw materials that requires payments of $250,000 or
more in any year, (x) any Contract for the acquisition of or investment in capital
equipment for an aggregate purchase price or investment value of $250,000 or
more, (y) any Contract authorizing the distribution or resale by any Person of any
of Seller’s or its Subsidiaries’ products or services with an aggregate value of
$250,000 or more or (z) any Contract for the sale or rental of products or services
that is reasonably likely to result in payments of $250,000 or more in any year;
(iii) any partnership, joint venture or other similar agreement or
arrangement relating to the formation, creation, operation, management or control
of any partnership or joint venture material to Seller or any of its Subsidiaries or
in which Seller owns directly or indirectly more than a 5% voting or economic
interest, or any interest valued at more than $500,000 without regard to
percentage voting or economic interest;
(iv) any Contract (other than among direct or indirect wholly-
owned Subsidiaries of Seller) relating to indebtedness for borrowed money or the
deferred purchase price of property (in either case, whether incurred, assumed,
guaranteed or secured by any asset) in excess of $250,000;
(v) any non-competition Contract or other Contract that
(I) purports to limit in any material respect either the type of business in which
Seller or its Subsidiaries (or, after the Closing, Buyer or its Subsidiaries) may
engage or the manner or locations in which any of them may so engage in any
business, (II) could require the disposition of any material assets, line of business
or product line of Seller or any of its Subsidiaries or, after the Closing, Buyer or
any of its Subsidiaries, (III) grants “most favored nation” status including any
that, following the Closing, would apply to Buyer and its Subsidiaries, including
US Media Company, (IV) prohibits or limits in any material respect the rights of
Seller or any of its Subsidiaries to make, sell or distribute any products or
services, or use, transfer, license, distribute or enforce any of their respective
Intellectual Property rights, or (V) provides for a material indemnification
obligation by Seller or any of its Subsidiaries, other than indemnification
arrangements with customers, suppliers or manufacturers entered into in the
ordinary course of business;
(vi) any Contract to which Seller or any of its Subsidiaries is a
party containing a standstill or similar agreement pursuant to which the party has
agreed not to acquire assets or securities of the other party or any of its Affiliates;
LA_LAN01:327561.28
(vii) any Contract that contains a put, call or similar right
pursuant to which Seller or any of its Subsidiaries could be required to purchase
or sell, as applicable, any equity interests of any Person or assets that have a fair
market value or purchase price of more than $500,000; and
(viii) any other Contract or group of related Contracts that, if
terminated or subject to a default by any party thereto, would, individually or in
the aggregate, be reasonably likely to have a Material Adverse Effect (the
Contracts described in clauses (i) – (viii), together with all exhibits and schedules
to such Contracts, being the “Material Contracts”).
(b) A true and correct copy of each Material Contract has been made
available to Buyer. Each Material Contract is a valid and binding obligation of Seller
or one of its Subsidiaries, as the case may be, and is in full force and effect, and neither
Seller nor any of its Subsidiaries nor, to Seller’s knowledge, any other party thereto is
in default under or breach in any respect under the terms of any such Material Contract,
and none of Seller or any of its Subsidiaries has received any written claim of default
under any Material Contract, and no event has occurred which would result in a breach
or violation of, or a default under, any Material Contract (in each case, with or without
notice or lapse of time or both) that in any such case would reasonably be expected to
have a Material Adverse Effect.
(c) (i) With respect to each Government Contract, except as would not
reasonably be expected to have a Material Adverse Effect, (x) all representations and
certifications executed, acknowledged or set forth in or pertaining to such Government
Contract were complete and correct as of their effective date, and Seller and each of its
Subsidiaries have complied in all material respects with all such representations and
certifications, (y) neither the United States government nor any prime contractor,
subcontractor or other Person has notified Seller or any of its Subsidiaries that Seller or
any such Subsidiary has breached or violated any material certification, representation,
clause, provision or requirement pertaining to such Government Contract, and (z) no
termination for convenience, termination for default, cure notice or show cause notice
is in effect as of the date hereof pertaining to any Government Contract.
(ii) Except as would not reasonably be expected to have a
Material Adverse Effect, (x) to Seller’s knowledge, neither Seller nor any of its
Subsidiaries nor any of their respective personnel is or has been under
administrative, civil or criminal investigation, or indictment or audit by any
Governmental Entity with respect to any alleged irregularity, misstatement or
omission arising under or relating to any Government Contract and (y) neither
Seller nor any of its Subsidiaries nor, to Seller’s knowledge, any of their
respective personnel has been suspended or debarred from doing business with
the United States government or is, or at any time has been, the subject of a
finding of non-responsibility or ineligibility for United States government
contracting.
LA_LAN01:327561.28
Section 3.17 Licenses. Seller or its Subsidiaries have obtained and are in
substantial compliance with all permits, licenses, certifications, approvals, registrations,
consents, authorizations, franchises, variances, exemptions and orders issued or granted
by a Governmental Entity (collectively, “Licenses”) necessary to conduct the Business as
presently conducted, except for those the absence of which or failure to be in compliance
with would not reasonably be expected to have a Material Adverse Effect. No License
will be violated, revoked or terminated prior to its normal expiration date or not renewed
solely as a result of the consummation of the Transactions, except, in all cases, for any
violation, revocation, termination or renewal that would not reasonably be expected to
have a Material Adverse Effect.
Section 3.18 Sufficiency of Assets. Except for (i) the services and assets listed
on Section 3.18 of the Seller Disclosure Letter, (ii) services and assets to be provided
pursuant to an Ancillary Agreement and (iii) the arrangements described in Section 2.9,
the Transferred Assets are sufficient for Buyer to conduct the Business in substantially
the same manner as conducted by Seller prior to the date hereof (other than with respect
to Intellectual Property, which is covered solely by Section 3.15(b)).
Section 3.19 Title to Property. Seller and its Subsidiaries have, and at the
Closing Seller and its Subsidiaries will transfer to Buyer, good title to the personal
tangible property included in the Transferred Assets, in each case free and clear of all
Encumbrances, except Permitted Encumbrances and any Encumbrances resulting from
Buyer’s ownership thereof.
Section 3.20 Finders’ Fees. Other than as described in Section 3.20 of the Seller
Disclosure Letter, no investment banker, broker, finder or other intermediary has been
retained by or is authorized to act on behalf of Seller that would be entitled to any fee or
commission in connection with the Transactions.
Section 3.21 Absence of Liabilities. Except as (i) reflected, reserved against or
otherwise disclosed in the Combined Financial Information, (ii) incurred in the ordinary
course of business since the date of the Interim Financial Information, (iii) incurred in
connection with this Agreement or (iv) would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, neither the Business nor US
Media Company has any Liabilities that would be required by GAAP to be reflected on a
consolidated balance sheet of the Business.
Section 3.22 No Other Representations or Warranties; Non-Reliance. Except
for the representations and warranties of Seller contained in this Article III and those
representations and warranties of Seller or any of its Subsidiaries expressly contained in
the Ancillary Agreements, neither Seller nor any of its Subsidiaries is making nor has any
of them made, and no other Person is making or has made on behalf of Seller or any of its
Subsidiaries, any express or implied representation or warranty in connection with this
Agreement or the Transactions, and no Person is authorized to make any such
representation or warranty on behalf of Seller. Seller and its Affiliates and
LA_LAN01:327561.28
Representatives have not relied on any representations or warranties regarding Buyer
other than the representations and warranties of Buyer contained in Article IV and those
and those representations and warranties of Buyer expressly contained in the Ancillary
Agreements.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller, as of the date of this
Agreement (it being understood that to the extent any such representation and warranty
speaks as of a particular date, Buyer makes such representation and warranty with respect
to such particular date), that:
Section 4.1 Organization and Qualification. Buyer is a limited liability
company duly organized, validly existing and in good standing under the laws of
Delaware. Buyer has all requisite organizational power and authority to own and operate
its properties and assets and to carry on its business as currently conducted. Buyer is
duly qualified to do business and is in good standing in each jurisdiction where the
ownership or operation of its properties and assets or the conduct of its business requires
such qualification, except for failures to be so qualified or in good standing that would
not impair or delay Buyer’s ability to effect the Closing or perform its obligations under
this Agreement or any of the Ancillary Agreements.
Section 4.2 Authorization. Buyer has full organizational power and authority
to execute and deliver this Agreement and each of the Ancillary Agreements and to
perform its obligations hereunder and thereunder. The execution, delivery and
performance by Buyer of this Agreement and each of the Ancillary Agreements has been
duly and validly authorized and no additional corporate or equityholder authorization or
consent is required in connection with the execution, delivery and performance by Buyer
of this Agreement or any of the Ancillary Agreements.
Section 4.3 Consents and Approvals. No filings, notices and/or reports are
required to be made by Buyer with, nor are any consents, registrations, approvals, permits
or authorizations required to be obtained by Buyer from, any Governmental Entity in
connection with the execution, delivery and performance of this Agreement or the
Ancillary Agreements by Buyer and the consummation of the Transactions, except those
that the failure to make or obtain are not, individually or in the aggregate, reasonably
likely to impair or delay Buyer’s ability to effect the Closing or perform its obligations
under this Agreement or any of the Ancillary Agreements.
Section 4.4 Non-Contravention. The execution, delivery and performance of
this Agreement and the Ancillary Agreements by Buyer does not, and the consummation
of the Transactions will not, constitute or result in (A) a breach or violation of, or a
default under, the governing documents of Buyer, (B) with or without notice, lapse of
time or both, a breach or violation of, a default or termination (or right of termination)
LA_LAN01:327561.28
under, the creation or acceleration of any obligations under, or the creation of an
Encumbrance on its assets or the assets of any of its Subsidiaries pursuant to, any
agreement, lease, license, contract, note, mortgage, indenture, arrangement or other
obligation binding upon Buyer or any of its Subsidiaries or any Law to which Buyer or
any of its Subsidiaries is subject or (C) any change in the rights or obligations of any
party under any agreement, lease, license, contract, note, mortgage, indenture,
arrangement or other obligation, except, in the case of clause (B) or (C) above, for any
such breach, violation, termination, default, acceleration, creation or change that is not,
individually or in the aggregate, reasonably likely to impair or delay the ability of Buyer
to effect the Closing or to perform its obligations under this Agreement and the Ancillary
Agreements.
Section 4.5 Binding Effect. This Agreement and each of the Ancillary
Agreements, when executed and delivered by Seller and the other parties thereto,
constitutes a valid and legally binding obligation of Buyer, enforceable against Buyer in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency or similar laws affecting creditors’ rights generally or general equitable
principles.
Section 4.6 Finders’ Fees. No investment banker, broker, finder or other
intermediary has been retained by or is authorized to act on behalf of Buyer or any
Affiliate of Buyer who might be entitled to any fee or commission from Buyer in
connection with the Transactions.
Section 4.7 Litigation and Claims. There is no Proceeding pending or, to the
knowledge of Buyer, threatened against Buyer or any of its Subsidiaries that, individually
or in the aggregate, would impair or delay the ability of Buyer to effect the Closing or to
perform its obligations under this Agreement and the Ancillary Agreements. Buyer is not
subject to any order, writ, judgment, award, injunction or decree of any court or
governmental or regulatory authority of competent jurisdiction or any arbitrator or
arbitrators that, individually or in the aggregate, would impair or delay the ability of
Buyer to effect the Closing or to perform its obligations under this Agreement and the
Ancillary Agreements.
Section 4.8 Financial Capability. Buyer has sufficient funds to effect the
Closing and all other Transactions and pay all other amounts payable by it at the Closing
in connection with the Transactions. After giving effect to the consummation of the
Transactions and, assuming all representations and warranties set forth in Article III are
true and correct in all material respects, Buyer, taken as a whole with its Subsidiaries,
will be able to pay all amounts under vendor agreements and purchase orders transferred
to Buyer as a Transferred Asset, in each case as they become due and taking into account
the timing of and amounts of cash to be received by Buyer and its Subsidiaries.
Section 4.9 No Other Representations or Warranties; Non-Reliance. Except
for the representations and warranties of Buyer contained in this Article IV and those
LA_LAN01:327561.28
representations and warranties of Buyer expressly contained in the Ancillary Agreements,
Buyer is not making and has not made, and no other Person is making or has made on
behalf of Buyer, any express or implied representation or warranty in connection with
this Agreement or the Transactions, and no Person is authorized to make any such
representation or warranty on behalf of Buyer. Buyer and its Affiliates and
Representatives have not relied on any representations or warranties regarding Seller or
the Business other than the representations and warranties of Seller contained in Article
III and those representations and warranties of Seller or any of its Subsidiaries expressly
contained in the Ancillary Agreements.
ARTICLE V
COVENANTS
Section 5.1 Access and Information.
(a) Following the Closing, upon the reasonable request of the other
party, Seller and Buyer shall, to the extent permitted by Law and confidentiality
obligations, grant to the other party and its directors, managers, officers, employees,
attorneys, accountants and other advisors or representatives (collectively,
“Representatives”) during regular business hours and subject to reasonable rules and
regulations of, and without unreasonably interfering with the ongoing business or
operations of, the granting party, the right, at the expense of the non-granting party, to
inspect and copy the books, records and other documents in the granting party’s
possession pertaining to the operation of the Business prior to the Closing (including
books of account, records, files, invoices, correspondence and memoranda, customer
and supplier lists, data, specifications, insurance policies, operating history information
and inventory records) for reasonable business purposes (other than in connection with
any Proceeding brought by (x) Seller or any of its Affiliates against Buyer or any of its
Affiliates or (y) by Buyer or any of its Affiliates against Seller or any of its Affiliates);
provided, that neither Seller nor Buyer shall be required to waive any privilege
(including attorney-client privilege) which any of them may possess in discharging its
obligations pursuant to this Section 5.1(a). In no event shall either party have access to
the consolidated federal, state or local Tax Returns of the other party.
(b) Unless otherwise consented to in writing by Seller and subject to
destruction of correspondence and other similar documents in accordance with
applicable Law, Buyer agrees to retain all Books and Records in existence on the
Closing Date for a reasonable period following the Closing (but in no event longer than
seven (7) years following the Closing Date) and to make personnel of Buyer reasonably
available to Seller to the extent that access to such personnel is reasonably related to
any Excluded Assets or Excluded Liabilities or otherwise necessary for Seller to
comply with the terms of this Agreement, any Ancillary Agreement or any applicable
Law or to prepare financial statements of Seller; provided that Buyer shall retain all
Books and Records that Seller reasonably requests to be made available pursuant
LA_LAN01:327561.28
to Section 5.1(c) for such period as is necessary to comply with any request made by
Seller pursuant to Section 5.1(c).
(c) Buyer shall use its commercially reasonable efforts to make
available to Seller, upon the reasonable request of Seller and at Seller’s sole cost and
expense, the business records and documents of Buyer (whether in written or electronic
form), information stored in or derived from the information technology systems of
Buyer and the then current directors, officers, employees, other personnel and agents of
Buyer as witnesses (during regular business hours and subject to reasonable rules and
regulations of, and without unreasonably interfering with the ongoing business or
operations of, and giving consideration to, business demands of such directors, officers,
employees, other personnel and agents) in connection with resolving any Proceeding or
potential Proceeding arising out of the operation of the Business prior to the Closing
(other than any Proceeding brought by (x) Seller or any of its Affiliates against Buyer
or any of its Affiliates or (y) by Buyer or any of its Affiliates against Seller or any of its
Affiliates).
Section 5.2 Tax Matters.
(a) Seller Liability for Taxes. Seller shall be liable for (A) any Taxes
imposed with respect or attributable to US Media Company, the Business or any
Transferred Assets or any income or gain derived with respect thereto for the taxable
periods, or portions thereof, ending on or before the Closing Date, and (B) any Transfer
Taxes.
(b) Buyer Liability for Taxes. Buyer shall be liable for any Taxes
imposed with respect or attributable to US Media Company, the Business or any
Transferred Assets or any income or gains derived with respect thereto for any taxable
period, or portion thereof, beginning after the Closing Date.
(c) Proration of Taxes. To the extent necessary to determine the
liability for Taxes for a portion of a taxable year or period that begins before and ends
after the Closing Date, the determination of the Taxes for the portion of the year or
period ending on, and the portion of the year or period beginning after, the Closing
Date shall be determined by assuming that the taxable year or period ended as of the
close of business on the Closing Date, except that those annual property Taxes and
exemptions, allowances or deductions that are calculated on an annual basis shall be
prorated on a time basis.
(d) Tax Returns. (i) Seller shall file or cause to be filed, at Seller’s
sole cost and expense, when due all income Tax Returns that are required to be filed by
or with respect to US Media Company, the Business or the Transferred Assets, as the
case may be, for taxable years or periods ending on or before the Closing Date and shall
pay any Taxes due in respect of such Tax Returns, and Buyer shall file or cause to be
filed, at Buyer’s sole cost and expense, when due all Tax Returns that are required to be
filed by or with respect to US Media Company, the Business or the Transferred Assets,
LA_LAN01:327561.28
as the case may be, for taxable years or periods ending after the Closing Date and shall
remit any Taxes due in respect of such Tax Returns. Seller shall pay Buyer any Taxes
for which Seller is liable pursuant to Section 5.2(a) (but which are payable with Tax
Returns to be filed by Buyer pursuant to the previous sentence) within 10 days prior to
the due date for the filing of such Tax Returns.
(ii) Except as provided in Section 5.2(e), if either party shall be
liable hereunder for any portion of the Tax shown due on any Tax Returns
required to be filed by the other party, the party preparing such Tax Return shall
deliver a copy of the relevant portions of such Tax Return to the party so liable
for its review and approval not less than 30 days prior to the date on which such
Tax Returns are due to be filed (taking into account any applicable extensions).
If the parties disagree as to any item reflected on any such return, Seller shall
determine how the disputed item is reflected, unless such disputed item relates
solely to Taxes for which Buyer is liable hereunder, in which case Buyer shall
make the determination.
(e) Transfer Taxes. All federal, state, local or foreign or other excise, sales,
use, value added, transfer (including real property transfer or gains), stamp,
documentary, filing, recordation and other similar Taxes and fees that may be imposed
or assessed as a result of the Transactions, together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or penalties
(“Transfer Taxes”), shall be borne by Seller. Any Tax Returns that must be filed in
connection with Transfer Taxes shall be prepared by the party primarily or customarily
responsible under applicable local Law for filing such Tax Returns, and such party will
use its reasonable best efforts to provide such Tax Returns to the other party at least 10
Business Days prior to the date such Tax Returns are due to be filed. Such Tax Returns
shall be prepared consistent with the allocation of Consideration pursuant to Section
5.2(h) hereof. Buyer and Seller shall cooperate in the timely completion and filing of
all such Tax Returns and the cost of preparing and filing all such Tax Returns shall be
borne by Buyer. Seller shall promptly pay all Transfer Taxes.
(f) Contest Provisions. Each of Buyer and Seller shall promptly
notify the other in writing upon receipt of notice of any pending or threatened audits or
assessments with respect to Taxes for which such other party (or such other party’s
Affiliates) may be liable hereunder. In the case of any Tax audit or Proceeding relating
to Taxes for which Seller may be liable, but would not be solely liable hereunder for all
Taxes resulting from an adverse resolution, the party that would bear a greater relative
liability of such Taxes shall have the exclusive authority to conduct, through counsel of
such party’s own choosing and at its own expense, any such Tax audit or Proceeding.
If Seller chooses not to control a Tax audit or Proceeding which Seller is entitled to
conduct pursuant to the preceding sentence, Buyer shall control such Tax audit or
Proceeding. The party controlling a Tax audit or Proceeding (i) shall keep the other
party reasonably informed of the progress of such Tax audit or Proceeding, (ii) shall
allow the other party reasonable opportunity to review and provide comments with
LA_LAN01:327561.28
respect to any materials to be submitted to a Governmental Entity with respect to such
Tax audit or Proceeding and (iii) shall allow the other party to participate, at its own
expense and with its own counsel, in any meetings with a Governmental Entity with
respect to such Tax audit or Proceeding. Neither party may agree to settle any claim for
Taxes for which the other may be liable without the prior written consent of such other
party, which consent shall not be unreasonably withheld.
(g) Buyer’s Claiming, Receiving or Using of Refunds and
Overpayments. If, after the Closing, Buyer or its Affiliates (A) receive any actual cash
refund, or (B) actually utilize the benefit of any overpayment or prepayment of Taxes
which, in either of cases (A) and (B), relate to a Tax paid by Seller or any of its
Affiliates, Buyer shall promptly transfer, or cause to be transferred, to Seller the entire
amount of the cash Tax refund or benefit from the Tax overpayment or prepayment
(including interest) actually received or utilized by Buyer or its Affiliates, net of any
reasonable out-of-pocket costs incurred in obtaining such Tax refund or utilizing such
Tax overpayment or prepayment; provided, however, that Seller will repay to Buyer or
the applicable Affiliate of Buyer any amount received pursuant to this Section 5.2(g) in
the event Buyer or any of its Affiliates is subsequently required to return such cash Tax
refund or the amount of any benefit obtained from the usage of such Tax overpayment
or prepayment to the applicable Governmental Entity. Buyer agrees to notify Seller
promptly of the receipt of any such cash Tax refund or utilization of any such Tax
overpayment or prepayment. Buyer agrees to claim any such Tax refund or to utilize
any such Tax overpayment or prepayment as soon as possible and to furnish to Seller
all information, records and assistance necessary to verify the amount of such refund or
overpayment.
(h) Determination and Allocation of Consideration. The allocation of
the Closing Purchase Price and Deferred Purchase Price Payment between the
Transferred Assets located in the United States, taken as a whole, and the Transferred
Assets located in the United Kingdom, taken as a whole, shall be in accordance with the
percentages set forth on Schedule 5.2(h) (or such other percentages as may be mutually
agreed in writing between Buyer and Seller). Within thirty (30) days after the Closing,
Seller and Buyer shall cooperate in good faith to mutually allocate the Closing Purchase
Price among the Transferred Assets (and any other assets treated for federal income tax
purposes as having been transferred from Seller or its Affiliates to Buyer in the
Closing) in accordance with their fair market value as of the Closing and consistent
with the percentages set forth on Schedule 5.2(h) (or such other percentages as may be
mutually agreed in writing between Buyer and Seller) (the “Initial Allocation”). Within
thirty (30) days after the Deferred Purchase Price Payment, Seller and Buyer shall
cooperate in good faith to mutually allocate the Deferred Purchase Price Payment
among the Transferred Assets (and any other assets treated for federal income tax
purposes as having been transferred from Seller or its Affiliates to Buyer in the
Closing) in accordance with their fair market value as of the Closing and consistent
with the percentages set forth on Schedule 5.2(h) (or such other percentages as may be
mutually agreed in writing between Buyer and Seller) (each such allocation, together
LA_LAN01:327561.28
with the Initial Allocation, the “Allocations”). The Allocations shall in all cases be
determined in accordance with the rules under Section 1060 of the Code. Seller and
Buyer agree to prepare and file an IRS Form 8594 (including supplemental statements
thereto in respect of the Deferred Purchase Price Payment) in good faith and in a timely
fashion in accordance with the rules under Section 1060 of the Code and consistent
with the Allocations. The Allocations shall be binding on Seller and Buyer for all Tax
reporting purposes.
(i) Assistance and Cooperation. After the Closing Date, the parties
shall cooperate fully in preparing for any audits of, or disputes with Tax authorities
regarding, any Tax Returns and payments in respect thereof to the extent Related to the
Business. Each party shall (i) provide timely notice to the other in writing of any
pending or proposed audits or assessments with respect to Taxes for which such other
party or any of its Affiliates may have a liability under this Agreement and (ii) furnish
the other with copies of all relevant correspondence received from any Tax authority in
connection with any audit or information request with respect to any Taxes referred to
in (i).
(j) Employee Withholding and Reporting Matters. Buyer and Seller
agree to utilize, or cause their respective Affiliates to utilize, the standard procedure set
forth in Internal Revenue Service Revenue Procedure 2004-53 with respect to wage
reporting.
(k) Tax Treatment. Buyer and Seller agree that the Transactions are
not intended to be treated as a “disguised sale” of the Transferred Assets from Seller to
any Person for any U.S. federal or state income Tax purposes. Neither Buyer nor Seller
shall take any position or permit any of its Affiliates to take any position inconsistent
with the Tax treatment of the Transactions set forth in this Section 5.2(k) unless
otherwise required by applicable Law.
Section 5.3 Post-Closing Obligations of the Business to Certain Employees.
(a) With respect to each Applicable Employee whose primary place of
employment is the United Kingdom (the “UK Employees”), the Parties agree to take
the actions set forth in Section 5.3(a) of the Seller Disclosure Letter, the provisions of
which are hereby incorporated herein.
(b) With respect to each Applicable Employee whose primary place of
employment is the United States (the “US Employees”), as soon as reasonably
practicable following the date of this Agreement, but no later than fifteen (15) calendar
days prior to the Employee Transfer Date, Buyer shall make offers of “at-will”
employment to each such US Employee (excluding any employees on leave, short-term
disability, or long-term disability as of such date, whose employment have been
terminated for cause on or prior to such date as approved by the General Counsel and
Chief People Officer of Seller, who have resigned and executed Seller’s standard
employee release on or prior to such date or as specifically indicated on Schedule
LA_LAN01:327561.28
5.3(i)). Buyer shall, for a period ending on the first anniversary of the Closing Date,
provide each Transferred Employee with (i) salary or rate of pay that is substantially
equivalent in the aggregate to that as in effect immediately prior to the Closing Date;
(ii) target annual cash incentive opportunity that is substantially equivalent in the
aggregate to that as in effect immediately prior to the Closing Date; and (iii) other
employee benefits (other than severance benefits, equity award compensation and long
term incentive compensation) that are substantially equivalent in the aggregate to those
provided to such employee by Seller and its Affiliates immediately prior to the Closing
Date. Buyer may also make offers of employment to any US Employee who is on
leave or short-term disability but returns to work within six (6) months following the
Employee Transfer Date; each such employee who accepts such offer of employment
shall be a Transferred Employee following his or her commencement of employment
with Buyer or any of its Affiliates. Seller will waive any notice provisions required in
Applicable Employees’ employment agreements.
(c) Seller shall retain all liabilities and obligations under each agreement,
plan, policy or practice of Seller or any of its Subsidiaries to provide severance pay and
benefits to (i) any US Employee who does not, prior to the Employee Transfer Date,
accept employment by Buyer and/or one of its Affiliates pursuant to Section 5.3(b) and
(ii) any Applicable Employee who is entitled to severance pay and/or benefits on or
prior to the Employee Transfer Date (subject to any reimbursement or indemnification
provisions set forth in the Transition Services Agreement); provided that if Buyer or
any of its Affiliates hires any former employee of the Business who received severance
pay and/or severance benefits from Seller or any of its Subsidiaries during the period
ending on the first anniversary of the Employee Transfer Date, Buyer shall reimburse
Seller for the costs of such severance pay and/or severance benefits.
(d) For purposes of this Agreement,
(i) “Applicable Employees” means the current employees of
the Business set forth in Section 5.3(d) of the Seller Disclosure Letter;
(ii) “Transferred Employees” means those US Employees who
accept such offers of employment with Buyer prior to the Employee Transfer
Date or those UK Employees who transfer automatically under applicable local
Laws effective as of the Employee Transfer Date; and
(iii) “Employee Transfer Date” means February 9, 2018.
(e) Seller shall retain responsibility for and continue to pay all
medical, life insurance, disability and other welfare plan expenses and benefits for each
US Employee with respect to claims incurred by such US Employee or his or her
covered dependents on or prior to the Employee Transfer Date (subject to any
reimbursement and indemnification provisions set forth in the Transition Services
Agreement). Buyer shall be responsible for all expenses and benefits with respect to
claims incurred by Transferred Employees or their covered dependents after the
LA_LAN01:327561.28
Employee Transfer Date. For purposes of this paragraph, a claim is deemed incurred:
in the case of medical or dental benefits, when the services that are the subject of the
claim are performed, in the case of life insurance, when the death occurs; in the case of
long-term disability benefits, when the disability occurs; and in the case of workers
compensation benefits, when the event giving rise to the benefits occurs.
(f) With respect to any plan that is a “welfare benefit plan” (as defined
in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as
defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Buyer
(collectively, “Buyer Welfare Plans”), Buyer shall, to the extent permissible under the
terms of the applicable Buyer Welfare Plan, use commercially reasonable efforts to
(i) provide coverage for Transferred Employees and their eligible dependents under
such Buyer Welfare Plans as of and following the Employee Transfer Date on terms no
less favorable in the aggregate than those provided to similarly situated employees of
Buyer, (ii) cause there to be waived any pre-existing condition limitations, evidence of
insurability requirements, actively at work requirements and waiting periods and (iii)
cause such plans to honor any expenses incurred by the Transferred Employees and
covered dependents under similar plans of Seller and its Affiliates during the portion of
the calendar year in which the Employee Transfer Date occurs for purposes of
satisfying applicable deductible, co-payment, co-insurance and maximum out-of-pocket
expenses requirements that may apply from and after the Employee Transfer Date.
Seller shall retain exclusive responsibility for and shall satisfy any retiree medical or
life insurance benefits payable under any Seller Compensation and Benefit Plan that is
a “welfare benefit plan”.
(g) To the extent permissible under the terms of the applicable Buyer
Plan, Transferred Employees shall be given credit for all service with Seller or any of
its Affiliates, to the same extent as such service was credited for such purpose by Seller
or any of its Affiliates, under each Buyer Plan in which such Transferred Employees
are eligible to participate for purposes of eligibility, vesting and benefit accrual (other
than under a defined benefit pension plan or for any purpose under any equity based
plan or severance plan or where duplication of benefits or compensation would result).
(h) Except as required by applicable Law, as of the Employee Transfer
Date the Transferred Employees shall cease to accrue further benefits under the
employee benefit plans and arrangements maintained by Seller and its Affiliates and
shall commence participation in employee benefit plans and arrangements of Buyer.
From and after the Employee Transfer Date, Seller shall remain solely responsible for
any and all liabilities in respect of the Applicable Employees, including the Transferred
Employees, related to the Seller Compensation and Benefit Plans, except as otherwise
provided in this Section 5.3 (and subject to any reimbursement and indemnification
provisions set forth in the Transition Services Agreement). Seller shall take all
necessary actions to allow Transferred Employees to rollover their account balances
under Seller’s 401(k) Retirement Plan (the “Seller’s 401(k) Plan”) and any associated
loan notes to the extent permitted under the applicable plan. Buyer shall take all steps
LA_LAN01:327561.28
necessary to permit each such Transferred Employee who has received an eligible
rollover distribution (as defined in Section 402(c)(4) of the Code) from Seller’s 401(k)
Plan, if any, to roll such eligible rollover distribution, including any associated loans, as
part of any lump sum distribution to the extent permitted by Seller’s 401(k) Plan into an
account under Buyer’s 401(k) Retirement Plan (the “Buyer’s 401(k) Plan”).
(i) Buyer shall, or shall cause an Affiliate of Buyer to, make available
to the US Employees who are Transferred Employees a flex spending account plan for
medical and dependent care expenses under a new or existing plan established or
maintained under Section 125 and Section 129 of the Code (the “Buyer’s FSA”),
effective as of the Employee Transfer Date. As of the Employee Transfer Date, Buyer,
or an Affiliate of Buyer, shall credit the applicable account under Buyer’s FSA of each
US Employee who is a Transferred Employee participating in the Seller Compensation
and Benefit Plan maintained pursuant to Section 125 and Section 129 of the Code (the
“Seller’s FSA”) with an amount equal to the balance of such Transferred Employee’s
account under the Seller’s FSA immediately prior to the Employee Transfer Date. If
the aggregate amount withheld from such Transferred Employees’ compensation under
the Seller’s FSA for 2018 exceeds the aggregate amount of reimbursements paid to
Transferred Employees prior to the Employee Transfer Date under the Seller’s FSA for
such plan year, Seller shall transfer (or cause to be transferred) to Buyer within 30 days
after the Employee Transfer Date a cash payment equal to such excess, if any. In each
case, Buyer shall assume and be solely responsible for all claims for reimbursement by
such Transferred Employees, whether incurred prior to, on or after the Employee
Transfer Date, that have not been paid in full as of the Employee Transfer Date, which
claims shall be paid pursuant to and under the terms of Buyer’s FSA, and Buyer shall
indemnify and hold harmless Seller and its Affiliates from any and all claims by or
with respect to such Transferred Employees for reimbursement under the Seller’s FSA
that have not been paid in full as of the Employee Transfer Date. Buyer agrees to cause
Buyer’s FSA to honor and continue through the end of the calendar year in which the
Employee Transfer Date occurs the elections made by each such Transferred Employee
under the Seller’s FSA in respect of the flexible spending reimbursement accounts
under Buyer’s FSA that are in effect immediately prior to the Employee Transfer
Date. For the avoidance of doubt, except as provided herein, in no event shall Seller
have any liability or obligation under Buyer’s FSA.
(j) Buyer agrees that it shall be responsible for any Liabilities relating
to or arising out of the termination of employment of, or the wrongful discharge,
including constructive discharge, by Buyer or its Affiliates of any Transferred
Employee or the violation of any law, regulation or agreement (including employee
contracts) with respect to any Transferred Employee, in each case that occurs after the
Employee Transfer Date.
(k) With respect to any accrued but unused vacation time (including
flexible time-off and sick pay) to which any US Employee is entitled pursuant to the
vacation policy applicable to such US Employee immediately prior to the Employee
LA_LAN01:327561.28
Transfer Date, Seller shall pay each US Employee at the applicable rate of pay as of the
Employee Transfer Date for such US Employee’s unused vacation time to the extent
permitted by applicable Law.
(l) Buyer shall be responsible for any Liabilities that arise under
WARN as a result, in whole or in part, of Buyer’s actions or omissions with respect to
Transferred Employees after the Closing (including, for the avoidance of doubt, any
request by Buyer for a seconded US Employee to cease providing services to Buyer
under the Transition Services Agreement that results in such employee’s termination by
Seller), or as a result of Buyer’s failure to make offers of employment to Applicable
Employees pursuant to Section 5.3(b). Other than as provided for in the immediately
preceding sentence, Seller shall be responsible for any Liabilities that arise under
WARN with respect to employees of Seller or any of its Subsidiaries whose service is
terminated or as to whom notice of termination is provided prior to the Employee
Transfer Date.
(m) Seller shall be responsible for all benefits requirements under Part
6 of Title I of ERISA (“COBRA Benefits”) with respect to all “M&A qualified
beneficiaries”, as such term is defined in Treasury Regulation Section 54.4980B-9
Q&A 4, in connection with the Transactions (subject to any reimbursement and
indemnification provisions set forth in the Transition Services Agreement). Effective
as of the Employee Transfer Date, Buyer shall be responsible for all COBRA Benefits
arising out of qualifying events that occur following the Employee Transfer Date with
respect to Transferred Employees and their qualified beneficiaries who are not “M&A
qualified beneficiaries” in connection with the Transactions.
(n) Nothing contained in this Section 5.3, whether express or implied,
will be construed to (i) confer upon any Person any rights to employment or continued
employment or any term or condition of employment for any period with Seller, Buyer
or any of their respective Affiliates, (ii) limit the ability of Seller, Buyer or any of their
respective Affiliates and Subsidiaries to amend, modify or terminate any benefit or
compensation plan, program, agreement, contract or arrangement at any time assumed,
sponsored, maintained or contributed to by any of them, (iii) interfere with or restrict in
any way the rights of Buyer and its Affiliates, which rights are hereby expressly
reserved, to discharge or terminate the services of any Transferred Employee at any
time for any reason whatsoever, with or without cause, subject to the terms of any
employment agreement or offer letter entered into by Buyer or an Affiliate of Buyer
and any such Transferred Employee, or (iv) confer upon any Person who is not a party
to this Agreement, including any Applicable Employee, any rights or remedies of any
nature whatsoever (including any third-party beneficiary rights under this Agreement)
under or by reason of this Section 5.3.
Section 5.4 Insurance Proceeds. Seller shall, or shall cause its Affiliates to,
assign, to the extent assignable, to Buyer any proceeds of Seller’s or any of its Affiliates’
third-party insurance policies to the extent related to any Assumed Liabilities. Seller
LA_LAN01:327561.28
agrees to use its reasonable efforts to obtain any necessary consents or approvals of any
insurance company or other third party relating to any such assignment. If such proceeds
are not assignable, Seller agrees to pay any such proceeds received by it or any of its
Affiliates to Buyer promptly upon the receipt thereof.
Section 5.5 Certain Actions.
(a) Buyer shall use commercially reasonable efforts following the
Closing to obtain the release of Seller from Seller’s guaranty obligations under the
Contracts set forth on Section 5.5(a) of the Seller Disclosure Letter; provided, however,
that none of Buyer or its Affiliates shall be required to pay any consideration or other
amount, provide any letter of credit or bond, or agree to change any terms of the
Contracts or guarantees set forth on Section 5.5(a) of the Seller Disclosure Letter in
connection with such assumption and release.
(b) From and after the Closing, Seller shall: (i) pay or otherwise satisfy
in the ordinary course of business (but in any event when due) all of its Liabilities and
Taxes; and (ii) make payment and/or adequate provision for the payment and/or
establish adequate reserves for the payment, in full, of all of the Excluded Liabilities, it
being understood that this Section 5.5(b) shall not be construed to cover any of the
Assumed Liabilities.
(c) From and after the Closing, Buyer shall: (i) pay or otherwise
satisfy in the ordinary course of business (but in any event when due) all of its
Liabilities and Taxes; and (ii) make payment and/or adequate provision for the payment
and/or establish adequate reserves for the payment, in full, of all of the Assumed
Liabilities, it being understood that this Section 5.5(c) shall not be construed to cover
any of the Excluded Liabilities.
(d) As soon as practicable following the Closing, but in any event
within fourteen (14) days following the Closing, Seller shall deliver to Buyer evidence,
in form and substance reasonably satisfactory to Buyer, that no Encumbrances (other
than Permitted Encumbrances) exist with respect to Transferred Assets located in the
United Kingdom.
Section 5.6 Further Assurances.
(a) From time to time after the Closing, as and when requested by any party
hereto, the other party hereto shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments and shall take, or cause to be taken, all
such further or other actions, and shall provide, or cause to be provided, all such further
or other cooperation, in each case as the requesting party may reasonably deem
necessary or desirable to evidence and effectuate the Transactions. Without limiting
the generality of the foregoing, during the twelve (12)-month period following the
Closing, (i) Seller agrees to use commercially reasonable efforts to execute,
acknowledge, and deliver to Buyer such other instruments of conveyance and transfer,
LA_LAN01:327561.28
and take such other actions and execute and deliver such other documents,
certifications, and further assurances, as Buyer may reasonably require in order to vest
more effectively in Buyer, or to put Buyer more fully in possession of, the Transferred
Assets, and (ii) to the extent that Buyer or Seller discovers during the twelve (12)-
month period following Closing that any asset that was intended to be a Transferred
Asset pursuant to this Agreement was not transferred at Closing, Seller shall use
commercially reasonable efforts to, or shall use commercially reasonably efforts to
cause its Affiliates to, assign and transfer to Buyer as promptly as practicable all right,
title and interest in such asset. Each party shall bear its own costs and expenses
incurred in complying with this Section 5.6(a); provided that none of Seller or Buyer or
any of their respective Affiliates shall be required to pay any cost or expense to any
third party to obtain the consent of such third party to transfer any Transferred Asset.
(b) After the Closing, Seller shall promptly transfer or deliver to Buyer
cash, checks (which shall be properly endorsed) or other property that Seller may
receive in respect of any deposit, prepaid expense, ▇▇▇▇ for services or other item that
constitutes part of the Transferred Assets or relates to the Assumed Liabilities. After
the Closing, Buyer shall promptly transfer or deliver to Seller cash, checks (which shall
be properly endorsed) or other property that Buyer may receive in respect of any
deposit, prepaid expense, ▇▇▇▇ for services or other item that constitutes part of the
Excluded Assets or relates to the Excluded Liabilities. The removal of Excluded
Assets, if any, by Seller from its facilities and other real property to be occupied by
Buyer shall be done in such manner as to avoid any damage to the facilities and other
properties to be occupied by Buyer and any disruption of the business operations to be
conducted by Buyer after the Closing Date. Any damage to the Transferred Assets or
to the facilities resulting from such removal shall be promptly paid by Seller. Seller
shall promptly reimburse Buyer for all costs and expenses, if any, incurred by Buyer in
connection with any Excluded Assets not removed by Seller.
(c) During the twelve (12)-month period following the Closing, Seller
will use commercially reasonable efforts to cooperate with Buyer in its efforts to
continue and maintain for the benefit of Buyer those business relationships of Seller
existing prior to the Closing and relating to the business to be operated by Buyer after
the Closing, including relationships with lessors, employees, regulatory authorities,
licensors, customers, suppliers and others, and Seller will work in good faith to attempt
to satisfy the Excluded Liabilities in a manner that is not detrimental in any material
way to any of such relationships; provided that in no event shall Seller be required to
pay any cost, fee or out-of-pocket expense or to make any contractual concession to
comply with this Section 5.6(c). Seller will refer to Buyer all inquiries relating to such
business during the twelve (12)-month period following the Closing.
Section 5.7 Intellectual Property.
(a) Notwithstanding anything to the contrary contained herein or in
any Ancillary Agreement, Seller has the sole and exclusive right to prosecute, defend,
LA_LAN01:327561.28
settle or otherwise control any Proceeding relating to the Seller Licensed Intellectual
Property, except to the extent such Proceeding is between any of Seller or Seller’s
Affiliates and any of Buyer or Buyer’s Affiliates.
(b) Buyer acknowledges and agrees that no title to or ownership
interest in any Trademark owned by Seller or any of its Affiliates (other than the
Transferred Trademarks) (a “Retained ▇▇▇▇”) or any confusingly similar derivative or
variation thereof is being transferred or granted to Buyer pursuant to this Agreement or
any Ancillary Agreement. Within five (5) Business Days following the Closing Date,
Buyer shall cause US Media Company to change its corporate name to a name which
does not include, and has no references to any Retained ▇▇▇▇ or any derivative or
variation thereof, and to make all filings necessary to effect such name change. Except
as expressly permitted under Section 5.7(c) or any Ancillary Agreement, following the
Closing Date, Buyer shall not, and shall not permit any of its Affiliates, including US
Media Company, to use any Retained ▇▇▇▇ in any manner whether on a stand-alone
basis or as part of any Trademark or otherwise as an identifier for the Buyer or any of
its Affiliates or for the source or origin of any of Buyer’s or any of its Affiliates’
products or services.
(c) Limited Rights to Use Seller Name
(i) With respect to all sales promotional aids, literature and
other printed material that display the Retained Marks and are used in the
Business as conducted by Seller and its Subsidiaries (“Printed Material”) (for
clarity, including Printed Material produced or obtained after Closing as set forth
below in this Section 5.7(c)(i)) and all Inventory, Buyer shall eliminate all use of
Retained Marks from such Printed Material and Inventory (except for Retained
Marks displayed on the external housing of Inventory located on or within Taxis)
as soon as commercially practicable following Closing and to the reasonable
satisfaction of Seller, provided that such period shall not exceed one hundred
eighty (180) days except with respect to Printed Material and Inventory that are
currently located on or within Taxis as of the Closing Date or that become located
on or within Taxis within one hundred eighty (180) days after the Closing Date.
With respect to all (A) Printed Material in existence as of Closing and copies
thereof produced within sixty (60) days after the Closing Date and (B) Inventory
in existence as of Closing that display the Retained Marks as of Closing, Seller
hereby grants to Buyer and its Subsidiaries, a limited, royalty-free, non-exclusive,
non-sublicensable, non-transferrable license to use and display the Retained
Marks solely as affixed to such Printed Material and such Inventory in the manner
so affixed as of Closing, solely in connection with the continued operation of the
Business in a manner that is in all material respects the same as such is conducted
by the Seller and its Subsidiaries as of Closing; provided that all Printed Material
shall be modified by a sticker or otherwise so that it clearly and prominently
displays the following statement or a statement of similar import, provided that in
all cases the form of such sticker or other display has been approved by Seller in
LA_LAN01:327561.28
advance in writing: “[Buyer product name], formerly a product of VeriFone,
Inc.”; provided further that the foregoing license shall come into effect upon
Closing and, unless earlier terminated as provided in Section 5.7(c)(iii), (X) shall
survive indefinitely solely with respect to the continued display (in the same
manner as currently displayed as of Closing) of Retained Marks on the external
housing of Inventory, for such Inventory that is located on or within Taxis as of
Closing or is to be located on or within Taxis after Closing in connection with the
continued operation of the Business in a manner that is in all material respects the
same as such is conducted by the Seller and its Subsidiaries as of Closing,
(Y) except as expressly provided by the immediately preceding subpart (X),
solely with respect to Printed Material and Inventory located on or within Taxis
within one hundred eighty (180) days after the Closing Date shall expire upon
Buyer’s elimination of use of such Printed Material and Inventory as required by
the first sentence of this Section 5.7(c)(i) and (Z) shall otherwise expire on the
date that is one hundred eighty (180) days after the Closing Date.
(ii) Notwithstanding any of the rights granted to the Buyer and
its Subsidiaries pursuant to Section 5.7(c)(i), Seller shall retain all right, title and
interest in and to the Retained Marks, and all goodwill arising from the use,
reproduction or display of the Retained Marks shall inure to the benefit of Seller.
Buyer shall promptly provide to Seller all information reasonably requested by
Seller, and shall comply with any and all reasonable direction and quality control
standards as may be provided from time to time by Seller, in each case, with
respect to the use, reproduction or display of the Retained Marks. None of the
Buyer or any of its Affiliates shall hold itself out as having any affiliation with
Seller or any of Seller’s Affiliates from and after the Closing.
(iii) Notwithstanding anything herein to the contrary, Seller
may terminate the license granted under Section 5.7(c)(i) at any time in the event
of any material breach by Buyer or any of its Affiliates of any of the foregoing in
this Section 5.7(c) that is not cured within thirty (30) days, including the scope of
the license grant in Section 5.7(c)(i) or any of the directions or standards provided
by Seller pursuant to Section 5.7(c)(ii).
(d) If, prior to the end of the period commencing on the Closing Date
and ending on the three (3) year anniversary of the Closing Date (the “Restricted
Period”), the parties determine that as of the Closing Date Seller or any of its Affiliates
owned a Patent that (i) would be infringed by the operation of the Business and (ii)
does not constitute Transferred Intellectual Property, Seller Licensed Intellectual
Property or the Intellectual Property contemplated to be used or otherwise exploited at
any time by or on behalf of Seller or any of its Affiliates in connection with the services
provided pursuant to the Transition Services Agreement, Seller or its applicable
Affiliate will grant Buyer or its applicable Affiliate a non-exclusive license to fully
exploit such Patent solely in connection with and as necessary for Seller to conduct the
LA_LAN01:327561.28
Business, pursuant to additional mutually-agreeable terms consistent with those
common in the relevant industry with respect to such types of licenses.
(e) If, prior to the end of the Restricted Period, the parties determine
that as of the Closing Date Seller or any of its Affiliates owned any Trade Secret or
Copyright that (i) for Buyer to conduct the Business immediately following the Closing
in the same manner as currently conducted by Seller and its Subsidiaries and (ii) does
not constitute Transferred Intellectual Property, Seller Licensed Intellectual Property or
the Intellectual Property contemplated to be used or otherwise exploited at any time by
or on behalf of Seller or any of its Affiliates in connection with the services provided
pursuant to the Transition Services Agreement, Seller or its applicable Affiliate will
grant Buyer or its applicable Affiliate a non-exclusive license to fully exploit such
Copyright and Trade Secret solely in connection with and as necessary for Seller to
conduct the Business and deliver tangible copies of all materials in its possession
related to such Copyright and Trade Secret to Buyer or its applicable Affiliate which
such materials are reasonably necessary to exercise such license rights, in each case
pursuant to additional mutually-agreeable terms consistent with those common in the
relevant industry with respect to such types of licenses.
(f) Notwithstanding anything herein to the contrary, the rights and
remedies of Buyer and its Affiliates under Section 5.7(d) and Section 5.7(e) are
exclusive and in lieu of any and all other rights and remedies which Buyer and its
Affiliates may have under this Agreement or otherwise against Seller or any of its
Affiliates for monetary relief in connection with the breach of Section 3.15(b) resulting
from Buyer not having rights to Intellectual Property owned by Seller and its Affiliates
as of the Closing Date and necessary for Buyer to conduct the Business immediately
following the Closing in the same manner as currently conducted by Seller and its
Subsidiaries.
Section 5.8 Confidentiality.
(a) Buyer shall treat as confidential and shall safeguard any and all
information, knowledge or data included in (i) the Seller Leased Property and (ii) any
information relating to the business of Seller and its Affiliates other than the Business
that becomes known to Buyer as a result of the Transactions except as otherwise agreed
to by Seller in writing; provided, however, that nothing in this Section 5.8(a) shall
prevent the disclosure of any such information, knowledge or data (x) to any directors,
managers, officers, employees or other Representatives of Buyer to whom such
disclosure is necessary or desirable in the conduct of the Business if such Persons are
informed by Buyer of the confidential nature of such information and are directed by
Buyer to comply with the provisions of this Section 5.8(a) or (y) that is required by
applicable Law or that is required by any Governmental Entity or under any subpoena,
civil investigative demand or other similar process by a court of competent jurisdiction
having jurisdiction over Buyer.
LA_LAN01:327561.28
(b) For a period of three (3) years following the Closing Date, Seller
shall, and shall cause its wholly-owned subsidiaries to and shall use its reasonable best
efforts to cause its controlled Affiliates to, and shall instruct its and their respective
Representatives to, hold in confidence any and all confidential, proprietary and non-
public information and materials, whether in written, verbal, graphic or other form,
primarily concerning the Business or the Transferred Assets (excluding Intellectual
Property but including Transferred Intellectual Property) (such information and
materials, collectively with the Transferred Intellectual Property, “Business
Confidential Information”). From and after the Closing, Seller shall not, and shall
cause its wholly-owned subsidiaries not to and shall use its reasonable best efforts to
cause its Affiliates not to, and shall instruct its and their respective Representatives not
to, use any Business Confidential Information except as expressly authorized in writing
by Buyer; provided, however, that nothing in this Section 5.8(b) shall prevent the
disclosure of any such information (i) to any Representatives of Seller to whom such
disclosure is necessary in the conduct of the Business or to fulfill Seller’s obligations
under any Excluded Liability or Ancillary Agreement if such Persons are informed by
Seller of the confidential nature of such information and are directed by Seller to
comply with the provisions of this Section 5.8(b) or (ii) to comply with any Law.
Seller shall, and shall cause its wholly-owned subsidiaries to and shall use its
reasonable best efforts to cause its controlled Affiliates to, and shall instruct its and
their respective Representatives to, take the same degree of care to protect the Business
Confidential Information that such Person uses to protect its own trade secrets and
confidential information of a similar nature, which shall be no less than a reasonable
degree of care. Nothing in this Section 5.8 shall prevent, restrict or limit in any way
any communication made in accordance with Section 8.10.
(c) Buyer and Seller acknowledge that the confidentiality obligations
set forth herein shall not extend to information, knowledge and data that is publicly
available or becomes publicly available through no act or omission of the party owing a
duty of confidentiality, or becomes available on a non-confidential basis from a source
other than the party owing a duty of confidentiality so long as such source is not known
by such party to be bound by a confidentiality agreement with or other obligations of
secrecy to the other party.
Section 5.9 Services from Affiliates. Buyer acknowledges that the Business
has received or benefited from certain administrative and corporate services and benefits
provided by Seller or its Affiliates, including operations and information technology
(including information technology support and website hosting and data center services),
customer service, finance, accounting and payroll and back office services and
processing, financial systems, treasury services (including banking, insurance,
administration, taxation and internal audit), office space, facilities and office management
services, business development and marketing services, product support services,
procurement services, risk management, corporate communications, general
administrative services, executive and management services, legal services, human
resources and personnel services and travel services. Other than as may be provided
LA_LAN01:327561.28
pursuant to the terms of an Ancillary Agreement, Buyer further acknowledges that all
such services and benefits shall cease, and any agreement in respect thereof shall
terminate with respect to the Business as of the Closing Date, and thereafter, Seller’s sole
obligation with respect to the provision of any services with respect to the Business shall
be as set forth in the Ancillary Agreements.
Section 5.10 Non-Competition; Non-Solicitation; Non-Disparagement. The
Parties agree to the terms and conditions set forth in Section 5.10 of the Seller Disclosure
Letter, the provisions of which are hereby incorporated herein.
Section 5.11 Use of Names. From and after the Closing Date, Seller shall not,
and shall cause its Affiliates not to, use any Trademark that constitutes Transferred
Intellectual Property or any confusingly similar derivative or variation thereof in any
manner as an identifier for the Seller or any of its Affiliates or for the source or origin of
any products or services of Seller or any of its Affiliates.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Survival. The representations and warranties of Seller and Buyer
contained in this Agreement (other than the Fundamental Warranties) shall not survive
and shall terminate at the Closing. The Fundamental Warranties shall survive the Closing
and remain in full force and effect until the date that is sixty (60) days after the expiration
of the applicable statute of limitations; it being understood that in the event a Claim
Notice in respect of any claim for indemnification under Section 6.3(a) or Section 6.4
hereof has been given in good faith within the applicable survival period, the
Fundamental Warranties that are the subject of such indemnification claim shall survive
with respect to such claim until such time as such claim is finally resolved, solely for
purposes of the resolution of the matter covered by such Claim Notice. All covenants
and agreements of the parties hereto contained herein shall survive the Closing until fully
performed or complied with. It is the intention of the parties that the survival periods and
termination date set forth in this Section 6.1 supersede the statute of limitations
applicable to such representations and warranties or claim with respect thereof.
Section 6.2 Indemnification by Seller.
(a) Seller hereby agrees that from and after the Closing it shall indemnify,
defend and hold harmless Buyer, its Affiliates, and their respective directors, managers,
officers, agents and employees and their heirs, successors and permitted assigns, each
in their capacity as such (the “Buyer Indemnified Parties” collectively with the Seller
Indemnified Parties, the “Indemnified Parties”) from, against and in respect of, and
shall compensate and reimburse each of the Buyer Indemnified Parties for, any
damages, losses, charges, Liabilities, claims, demands, actions, suits, proceedings,
payments, judgments, settlements, assessments, deficiencies, taxes, interest, penalties,
and costs (including costs of investigation) and expenses (including reasonable
LA_LAN01:327561.28
attorneys’ fees) (collectively, “Losses”), regardless of whether or not such Losses relate
to any Third Party Claim, imposed on, or sustained, incurred or suffered by, any of the
Buyer Indemnified Parties, directly or indirectly arising out of or relating to (i) any
breach of any Fundamental Warranty made by Seller contained in this Agreement for
the period such Fundamental Warranty survives, (ii) any breach of any covenant or
agreement of Seller contained in this Agreement, (iii) any of the Excluded Liabilities,
and (iv) Transfer Taxes.
(b) Notwithstanding anything to the contrary set forth in this Agreement, in no
event shall Seller and its Affiliates have any obligation to make indemnification
payments under this Agreement or any liability in connection with this Agreement or
the Transactions in excess of the Purchase Price.
(c) Seller shall not be liable under this Article VI for any Losses based upon
or arising out of any inaccuracy in or breach of any representations or warranties of
Seller contained in this Agreement if any Buyer Party had actual knowledge prior to the
Closing of the facts as a result of which such representation or warranty was inaccurate
or was breached.
Section 6.3 Indemnification by Buyer. Buyer hereby agrees that from and
after the Closing it shall indemnify, defend and hold harmless Seller, its Affiliates, and
their respective directors, officers, agents and employees and their heirs, successors and
permitted assigns, each in their capacity as such (the “Seller Indemnified Parties”) from,
against and in respect of, and shall compensate and reimburse each of the Seller
Indemnified Parties for, any Losses, regardless of whether or not such Losses relate to
any Third Party Claim, imposed on, or sustained, incurred or suffered by, any of the
Seller Indemnified Parties, directly or indirectly arising out of or relating to (i) any breach
of any representation or warranty made by Buyer contained in this Agreement for the
period such representation or warranty survives, (ii) any breach of a covenant or
agreement of Buyer contained in this Agreement, (iii) any of the Assumed Liabilities, and
(iv) any and all Taxes for which Buyer is responsible in accordance with Section 5.2.
Section 6.4 Third Party Claim Indemnification Procedures.
(a) In the event that any written claim or demand for which an indemnifying
party (an “Indemnifying Party”) may have liability to any Indemnified Party hereunder,
other than those relating to Taxes (which are the subject of Section 5.2(f)), is asserted
against or sought to be collected from any Indemnified Party by a third party (a “Third
Party Claim”), such Indemnified Party shall promptly, but in no event more than ten
(10) days following such Indemnified Party’s receipt of a Third Party Claim, deliver a
Claim Notice in respect of such Third Party Claim to the Indemnifying Party; provided,
however, that the failure timely to give a Claim Notice shall affect the rights of an
Indemnified Party hereunder only to the extent that such failure has an actual and
material prejudicial effect on the defenses or other rights available to the Indemnifying
Party with respect to such Third Party Claim. The Indemnifying Party shall have 30
LA_LAN01:327561.28
days (or such lesser number of days set forth in the Claim Notice as may be required by
court proceeding in the event of a litigated matter) after receipt of the Claim Notice (the
“Notice Period”) to notify the Indemnified Party that it desires to defend the
Indemnified Party against such Third Party Claim.
(b) Subject to this Section 6.4(b), in the event that the Indemnifying Party
notifies the Indemnified Party within the Notice Period that it desires to defend the
Indemnified Party against a Third Party Claim, the Indemnifying Party shall have the
right to defend the Indemnified Party by appropriate proceedings and shall have the
sole power to direct and control such defense at its expense; provided, however, that the
Indemnifying Party shall not have the right to direct and control the defense of any
Third Party Claim if: (A) the Third Party Claim is in respect of any matter involving
criminal liability; (B) the Indemnified Party is also a party to such Third Party Claim
and Indemnified Party has been advised in writing by outside counsel that there are one
or more legal defenses available to and likely to be used by the Indemnified Party that
conflict with one or more of those available to and likely to be used by the
Indemnifying Party; (C) such Third Party Claim involves any Governmental Entity as a
party thereto; or (D) the Third Party Claim seeks as the primary cause of action the
imposition of an equitable or injunctive remedy against the Indemnified Party or any of
its Affiliates (other than equitable relief that is ancillary to claim for monetary
damages). Once the Indemnifying Party has duly assumed the defense of a Third Party
Claim, the Indemnified Party shall have the right, but not the obligation, to participate
in any such defense and to employ separate counsel of its choosing. The Indemnified
Party shall participate in any such defense at its expense unless (i) the Indemnifying
Party and the Indemnified Party are both named parties to the proceedings and the
Indemnified Party shall have reasonably concluded that representation of both parties
by the same counsel would be inappropriate due to actual or potential differing interests
between them, or (ii) the Indemnified Party assumes the defense of a Third Party Claim
after the Indemnifying Party has failed to diligently pursue a Third Party Claim it has
assumed, as provided in the first sentence of Section 6.4(c), in which case the
Indemnified Party’s participation shall be at the cost of the Indemnifying Party. The
Indemnifying Party shall not, without the prior written consent of the Indemnified
Party, settle, compromise or offer to settle or compromise any Third Party Claim;
provided that no such consent shall be required if such settlement or compromise (i)
would not result in the imposition of injunctive or other equitable relief on the
Indemnified Party or any of its Affiliates, (ii) contains a full and unconditional release
of each Indemnified Party that is a party to such Third Party Claim from any liability
with respect to such claim, without prejudice, (iii) does not contain any finding or
admission of a violation of Law or violation of the rights of any Person or suggestion of
wrongdoing by the Indemnified Party or any of its Affiliates, (iv) does not contain any
finding or admission that would have an adverse effect on other claims made or
threatened against the Indemnified Party or any of its Affiliates and (v) any monetary
liability of the Indemnified Party will be promptly paid or reimbursed by the
Indemnifying Party.
LA_LAN01:327561.28
(c) If the Indemnifying Party (i) is not entitled to or elects not to defend the
Indemnified Party against a Third Party Claim, whether by not giving the Indemnified
Party timely notice of its desire to so defend or otherwise or (ii) after assuming the
defense of a Third Party Claim, fails to take reasonable steps necessary to defend
diligently such Third Party Claim within ten (10) days after receiving written notice
from the Indemnified Party to the effect that the Indemnifying Party has so failed, the
Indemnified Party shall have the right but not the obligation to assume its own defense;
it being understood that the Indemnified Party’s right to indemnification for a Third
Party Claim shall not be adversely affected by assuming the defense of such Third
Party Claim. The Indemnified Party shall not settle a Third Party Claim without the
consent of the Indemnifying Party, which consent shall not be unreasonably withheld or
delayed.
(d) The Indemnified Party and the Indemnifying Party shall reasonably
cooperate in order to ensure the proper and adequate defense of a Third Party Claim,
including by providing reasonable access to each other’s relevant business records and
other documents, and employees (provided that any confidential or privileged materials
shall not be disclosed by the Indemnified Party other than as needed for the defense of
the Third Party Claim, and the Indemnifying Party agrees to enter into a commercially
reasonable confidentiality and non-use agreement with the Indemnified Party with
respect to such information); it being understood that the costs and expenses of the
Indemnified Party relating thereto shall be Losses.
(e) The Indemnified Party and the Indemnifying Party shall use reasonable
best efforts to avoid production of confidential information (consistent with applicable
Law), and to cause all communications among employees, counsel and others
representing any party to a Third Party Claim to be made so as to preserve any
applicable attorney-client or work-product privileges.
Section 6.5 Consequential Damages. Notwithstanding anything to the contrary
contained in this Agreement, no Person shall be liable under this Article VI for any
consequential, punitive, special, incidental or indirect damages, including lost profits (in
each case, except to the extent awarded in connection with a Third Party Claim).
Section 6.6 Adjustments to Losses.
(a) Insurance. In calculating the amount of any Loss, the proceeds that would
otherwise constitute duplicative recovery with respect to such Loss and that are actually
received by the Indemnified Party or any of its Affiliates under any insurance policy or
pursuant to any claim, recovery, settlement or payment by or against any other Person
in each case relating to the claim, net of any actual costs, expenses or premiums (or
increases in premiums) incurred in connection with securing or obtaining such
proceeds, shall be deducted, except to the extent that the adjustment itself would
excuse, exclude or limit the coverage of all or part of such Loss. In the event that an
Indemnified Party has any rights against a third party with respect to any occurrence,
LA_LAN01:327561.28
claim or loss that results in a payment by an Indemnifying Party under this Article VI,
such Indemnifying Party shall be subrogated to such rights to the extent of such
payment; provided that until the Indemnified Party recovers full payment of the Loss
related to any such claim, any and all claims of the Indemnifying Party against any such
third party on account of said indemnity payment is hereby expressly made subordinate
and subject in right of payment to the Indemnified Party’s rights against such third
party. Without limiting the generality or effect of any other provision hereof, each
Indemnified Party and Indemnifying Party shall duly execute upon request all
instruments reasonably necessary to evidence and perfect the subrogation and
subordination rights detailed herein, and otherwise reasonably cooperate in the
prosecution of such claims.
(b) Reimbursement. If an Indemnified Party recovers an amount from a third
party in respect of a Loss that is the subject of indemnification hereunder after all or a
portion of such Loss has been paid by an Indemnifying Party pursuant to this Article
VI, and such recovered amount would constitute duplicative payment to the
Indemnified Party with respect to such Loss, the Indemnified Party shall as soon as
practicable remit to the Indemnifying Party the excess (if any) of (i) the amount paid by
the Indemnifying Party in respect of such Loss, plus the amount received from the third
party in respect thereof, less (ii) the full amount of Loss.
Section 6.7 Payments. The Indemnifying Party shall pay all amounts payable
pursuant to this Article VI, by wire transfer of immediately available funds, as soon as
practicable following receipt from an Indemnified Party of a ▇▇▇▇, together with all
accompanying reasonably detailed back-up documentation, for a Loss that is the subject
of indemnification hereunder, unless the Indemnifying Party in good faith disputes the
Loss, in which event it shall so notify the Indemnified Party. In any event, the
Indemnifying Party shall pay to the Indemnified Party, by wire transfer of immediately
available funds, the amount of any Loss for which it is liable hereunder no later than
three (3) days following any final determination of such Loss and the Indemnifying
Party’s liability therefor. A “final determination” shall exist when (i) the parties to the
dispute have reached an agreement in writing or (ii) an arbitration or like panel shall have
rendered a final non-appealable determination with respect to disputes the parties have
agreed to submit thereto.
Section 6.8 Characterization of Indemnification Payments. All payments made
by an Indemnifying Party to an Indemnified Party in respect of any claim pursuant to
Section 6.3 or 6.4 hereof shall be treated as adjustments to the Purchase Price for Tax
purposes.
Section 6.9 Mitigation. Each Indemnified Party shall use its commercially
reasonable efforts to mitigate any indemnifiable Loss. In the event an Indemnified Party
fails to so mitigate an indemnifiable Loss, the Indemnifying Party shall have no liability
for any portion of such Loss that reasonably could have been avoided had the
Indemnified Party made such efforts.
LA_LAN01:327561.28
Section 6.10 Exclusive Remedy. Except as contemplated by Section 5.7(f) of
this Agreement and Section 5.10(e) of the Seller Disclosure Letter, the rights and
remedies of Seller and Buyer under this Article VI are exclusive and in lieu of any and all
other rights and remedies which Seller and Buyer may have under this Agreement or
otherwise against each other with respect to the Transaction for monetary relief,
including, for the avoidance of doubt, with respect to (i) any breach of any representation
or warranty or any failure to perform any covenant or agreement set forth in this
Agreement and (ii) the Assumed Liabilities or the Excluded Liabilities, and Buyer and
Seller each expressly waives any and all other rights or causes of action it or its Affiliates
may have against the other party or its Affiliates now or in the future under any Law with
respect thereto. No current or former director, officer, employee, incorporator, member,
partner, shareholder, agent, attorney or Representative of any of Seller or Buyer, shall
have any liability for any obligations or liabilities of Seller or Buyer, respectively, under
this Agreement or any of the Ancillary Agreements or any other agreements
contemplated hereunder or thereunder, or for any claim based on, in respect of, or by
reason of, any of the Transactions.
Section 6.11 Release.
(a) Effective as of the Closing Date, Buyer (“Releasor”), on behalf of itself
and its current Affiliates, Representatives, successors and assigns, hereby releases,
acquits and forever discharges, to the fullest extent permitted by Law, Seller and each
of its past, present or future officers, managers, directors, shareholders, partners,
members, Affiliates, employees, counsel and agents (each a “Releasee”) of, from and
against any and all actions, causes of action, claims, demands, damages, judgments,
debts, dues and suits of every kind, nature and description whatsoever (collectively
“Claims”) which such Releasor or its heirs, Representatives, successors or assigns ever
had, now has or may have on or by reason of any matter, cause or thing whatsoever,
arising out of or relating to any circumstance, agreement, activity, action, omission,
event or matter occurring or existing, in each case, prior to the date of the Closing and
related to the Business, the Transferred Assets and/or the Assumed Liabilities, whether
known or unknown, other than (i) Claims with respect to any rights or claims of Buyer
under this Agreement or any Ancillary Agreement, including with respect to any
breach, non-performance, action or failure to act by Seller, and (ii) with respect to any
current Affiliate of Buyer that was a director, manager, officer or employee of Seller or
any of its Subsidiaries at or prior to the Closing, (x) rights, if any, under
indemnification provisions of the Organizational Documents of Seller or any of its
Subsidiaries, as applicable, and (y) rights under any employment, stock option, bonus
or other employment or compensation offers, arrangements, agreements or plans
(collectively, “Released Claims”). Each Releasor agrees not to, and agrees to cause its
respective current Affiliates and Subsidiaries not to, assert any Released Claim against
any Releasee.
(b) Effective as of the Closing Date, Seller, on behalf of itself and its current
Affiliates, Representatives, successors and assigns, hereby releases, acquits and forever
LA_LAN01:327561.28
discharges, to the fullest extent permitted by Law, Buyer and each of its past, present or
future officers, managers, directors, shareholders, partners, members, Affiliates,
employees, counsel and agents (the “Buyer Released Parties”) of, from and against any
and all Claims which Seller, its Affiliates or their heirs, Representatives, successors or
assigns ever had, now has or may have on or by reason of any matter, cause or thing
whatsoever, arising out of or relating to any circumstance, agreement, activity, action,
omission, event or matter occurring or existing, in each case, prior to the date of the
Closing whether known or unknown, other than (i) Claims with respect to any rights or
claims of Seller under this Agreement or any Ancillary Agreement, including with
respect to any breach, non-performance, action or failure to act by Buyer, (ii) rights, if
any, of any Transferred Employee under indemnification provisions of the
Organizational Documents of Seller or any of its Subsidiaries, as applicable, and (iii)
rights under any employment, stock option, bonus or other employment or
compensation offers, arrangements, agreements or plans (collectively, “Buyer Released
Claims”). Seller agrees not to, and agrees to cause its respective current Affiliates and
Subsidiaries not to, assert any Buyer Released Claims against any Buyer Released
Party.
(c) Each of Buyer and Seller, for itself and its Affiliates and Representatives
(i) acknowledges that it is aware that such Person may hereafter discover facts different
from or in addition to the facts which such Person now knows or believes to be true
with respect to the subject matter of this Agreement, but that such Person intends that
the general releases herein given shall be and remain in full force and effect,
notwithstanding the discovery of any such different or additional facts and (ii)
acknowledges that it has been informed of, and that such Person is familiar with,
Section 1542 of the Civil Code of the State of California, which provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.” Each of Buyer and Seller, for itself and its Affiliates and
Representatives, hereby waives and relinquishes (a) all rights and benefits such Person
has or may have under Section 1542 of the Civil Code of the State of California, to the
full extent that such Person may lawfully waive all such rights and benefits pertaining
to the subject matters of this Agreement and (b) any similar or comparable protections
afforded by any case law or statutes of similar import, whether such laws are in the
United States or elsewhere in the world.
Section 6.12 Right of Set-Off. Upon notice specifying in reasonable detail the
basis therefor, Buyer shall have the right to set off any amounts owed to a Buyer
Indemnified Party under this Article VI against any amounts owed by Buyer under this
Agreement or the Transition Services Agreement.
LA_LAN01:327561.28
ARTICLE VII
DEFINITIONS
Section 7.1 Certain Definitions. As used in this Agreement, the following
terms have the meanings set forth below:
“Accounts Payable” means all trade accounts and driver payables of Seller
or its Affiliates as of the Closing arising out of the purchase or consumption of goods and
services by the Business.
“Accounts Receivable” means all trade accounts, credit card receivables
and notes receivable and other miscellaneous receivables of the Business as of the
Closing arising out of the sale or other disposition of goods or services of the Business,
including, for the avoidance of doubt, all amounts due from banks, credit card processors,
card networks and alternative payment providers reflected as prepaid credit card
payables, rebates or deposits.
“Accrued Expenses” means all accrued expenses of Seller as of the
Closing arising out of the purchase or consumption of goods and services by the Business
and customer deposits liability of the Business as of the Closing, but excluding all
accrued expenses of Seller or the Business relating to Taxes or employees on account of
any period prior to the Closing.
“Affiliate” means, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with, such other Person as
of the date on which, or at any time during the period for which, the determination of
affiliation is being made. For purposes of this definition, the term “control” (including
the correlative meanings of the terms “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 policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
“Agreement” means this Asset Purchase Agreement, as the same may be
amended or supplemented from time to time in accordance with the terms hereof.
“Allocation” has the meaning set forth in Section 5.2(h).
“Ancillary Agreements” means collectively those agreements set forth in
Exhibits B and C and the other agreements and documents to be entered into pursuant to
this Agreement at the Closing.
“Annual Financial Information” has the meaning set forth in Section
3.7(a).
“Applicable Employees” has the meaning set forth in Section 5.3(d)(i).
LA_LAN01:327561.28
“Assigned Leases” means those leases and subleases governing real
property used or leased by the Business, owned by Persons other than Seller or any of its
Affiliates and listed on Schedule 7.1(a)(i).
“Assumed Contracts” has the meaning set forth in Section 2.1(b).
“Assumed Liabilities” means only (i) Liabilities arising after the Closing
under the Assumed Contracts (other than Liabilities arising out of any breach by Seller or
any of its Affiliates of any Assumed Contract), (ii) Liabilities arising after the Closing
with respect to any Leased Real Property (other than any Liabilities arising out of any
breach by Seller or any of its Affiliates of any Assigned Lease) or any Transferred
Employee; (iii) except for the Excluded Liabilities, Liabilities Related to the Business or
primarily related to the Transferred Assets, in the case of each of clauses (i), (ii) and (iii)
to the extent arising out of events occurring after the Closing and to the extent relating to
Buyer’s ownership of the Transferred Assets or Buyer’s operation of the Business after
and relating to periods after the Closing; (iv) all Liabilities of US Media Company arising
after the Closing (other than any Liabilities arising out of any breach, default,
misconduct, negligence, failure to comply with any applicable Law, or other form of non-
compliance by US Media Company at or prior to the Closing); and (v) Current Liabilities
to the extent included in the calculation of Net Working Capital (subject to adjustment in
accordance with 2.11).
“Books and Records” means all books, ledgers, files, reports, plans,
records, manuals and other materials (in any form or medium) exclusively of, or
maintained exclusively for, the Business, but excluding any such items to the extent (i)
they are included in or related to any Excluded Assets or Excluded Liabilities or (ii) any
Law prohibits their transfer.
“Business” means the manufacturing, marketing and sale of integrated
solutions for the taxi industry, including (i) Taxi e-hailing applications and systems or
integrated platforms for booking, billing for and paying for ground transportation services
provided by Taxis, (ii) the lease, rental, distribution, sale or resale of point-of-sale
payment devices and other payment solutions that are connected to eFleet or is otherwise
part of an integrated platform for booking, billing for or paying for ground transportation
services provided by Taxis, (iii) interactive taxi passenger and trip information
applications and related software and support services, including tools for tracking,
searching, collecting, parsing, sorting and reporting trip data, (iv) Dispatch Solutions, and
(v) the placement, display and/or broadcast of, as well as affixing devices for the display
or broadcast of, media content (whether traditional, print, digital, static, full-motion, stop-
motion, video, audio, multimedia or otherwise) in and/or on Taxis, including
advertisements and other paid content displayed on (A) devices mounted to the roof or
trunk of Taxis, (B) passenger-facing digital media screens mounted inside Taxis or (C)
images affixed, painted or projected on to the exterior surfaces of Taxis. For purposes of
this Agreement (other than Section 5.10), all references to Business shall be limited to the
LA_LAN01:327561.28
Business conducted in North America (including the Caribbean Islands), the Republic of
Ireland and the United Kingdom (including Northern Ireland and Scotland).
“Business Client” means and includes any Person that (i) owns or controls
one or more Taxis, (ii) owns or controls one or more Taxi Licenses, (iii) is a driver,
manager or agent for one or more Taxis and/or Taxi Licenses, (iv) is a dispatch
association, dispatch radio network or other Person that actually or purportedly manages
and/or represents two or more Taxis or Taxi Licenses, (v) is a Governmental Entity with
regulatory authority over any Taxi, and (vi) any Person that desires to, or actually,
provides any of the foregoing with products, solutions and/or services similar to those
provided by the Business.
“Business Confidential Information” has the meaning set forth in Section
5.8(b).
“Business Day” means any day other than a Saturday, a Sunday or a day
on which banks in ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ are authorized or obligated by
Law or executive order to close.
“Business User” means any Person that has a desire or makes an attempt
to, or actually, books, hires, hails or otherwise arranges for, or pays for, ground
transportation services to be performed or are performed by a Taxi.
“Buyer” has the meaning set forth in the Preamble.
“Buyer Indemnified Parties” has the meaning set forth in Section 6.2(a).
“Buyer Party” means Buyer and any other Person that owns greater than
10% of Buyer’s equity interests, its and their directors, officers, managers, general
partners and managing members and their respective directors, officers, managers,
general partners and managing members, but excluding any of the foregoing that were
employed by Seller or any of its Subsidiaries immediately prior to the Closing.
“Buyer Plan” means any Buyer Welfare Plan, Buyer’s 401(k) Plan or
other plan sponsored or maintained by Buyer that is of the same type as any Seller
Compensation and Benefit Plan (including, but not limited to, Buyer’s employee stock
purchase plan and other equity-based or cash based incentive plans).
“Buyer Released Claims” has the meaning set forth in Section 6.11(b).
“Buyer Released Parties” has the meaning set forth in Section 6.11(b).
“Buyer’s 401(k) Plan” has the meaning set forth in Section 5.3(h).
“Buyer’s FSA” has the meaning set forth in Section 5.3(i).
LA_LAN01:327561.28
“Buyer Welfare Plans” has the meaning set forth in Section 5.3(f).
“Carve-Out Balance Sheet” means the Taxi-Carve-out Balance Sheet,
dated December 10, 2017, identified to Buyer by Seller in writing as the “Carve-Out
Balance Sheet” for purposes of this Agreement.
“Change of Control Payments” means any amounts (including severance,
termination, “golden parachute,” Tax gross-up, transaction bonus or other similar
payments) which become payable as a result of or in connection with the consummation
of the Transactions and which are owing to any current or former employees or equity
holders of Seller or its Subsidiaries pursuant to employment agreements or other
arrangements, including such entities’ share of Taxes payable with respect to all such
amounts.
“Claim Notice” means a written notice of a claim for indemnification
under this Agreement, specifying with reasonable particularity the basis for such claim,
and the amount or estimated amount of such claim, to the extent reasonably ascertainable,
and any other material details pertaining thereto; without limiting the generality of the
foregoing, a Claim Notice in respect of a Third Party Claim shall include the amount or
the estimated amount of damages or other monetary remedies sought thereunder to the
extent then ascertainable (which estimate shall not be conclusive of the final amount of
such Third Party Claim), any other remedy sought thereunder and any relevant time
constraints relating thereto.
“Claims” has the meaning set forth in Section 6.11(a).
“Closing” means the closing of the asset sale that is the subject of this
Agreement.
“Closing Date” has the meaning set forth in Section 2.6.
“Closing Purchase Price” has the meaning set forth in Section 2.5(a).
“Closing Working Capital Statement” has the meaning set forth in Section
2.11(a).
“CPA Firm” means an independent “Big Four” accounting firm mutually
agreed upon between Buyer and Seller.
“COBRA Benefits” has the meaning set forth in Section 5.3(m).
“Code” means the Internal Revenue Code of 1986, as amended.
“Combined Financial Information” has the meaning set forth in Section
3.7(b).
LA_LAN01:327561.28
“Confidentiality Agreement” means the confidentiality agreement between
Seller and Buyer, dated September 25, 2017.
“Consideration” has the meaning set forth in Section 5.2(h).
“Contracts” means all agreements, contracts, leases and subleases,
purchase orders, arrangements, sales orders, purchase orders, commitments and licenses
or other legally binding agreements, arrangements, commitments or obligations that are
Related to the Business as of the Closing, or to which any of the Transferred Assets are
subject, whether written or oral, other than any Seller Compensation and Benefit Plan.
“Copyrights” has the meaning set forth in the “Intellectual Property”
definition.
“Curb Intermediate I Holdings LLC Agreement” means the limited
liability company agreement of Curb Intermediate I Holdings, LLC, a Delaware limited
liability company.
“Current Assets” means all Inventory, Accounts Receivable, and all
credits, deferred charges, advance payments, security or other deposits, prepaid items and
duties, but excluding all cash and cash equivalents and Intracompany Receivables.
“Current Liabilities” means all Accounts Payable, Accrued Expenses and
Deferred Revenue, but excluding all Intracompany Payables and all amounts specifically
excluded from Accrued Expenses pursuant to the definition thereof.
“Deferred Purchase Price Payment” means an amount equal to
$7,500,000.
“Deferred Revenue” means all deferred revenue of the Business classified
as a current liability under GAAP.
“Dispatch Solutions” means the leasing, renting, distribution, sale and/or
resale to Business Clients of equipment, software, solutions and/or services for the
dispatch and/or coordination of the operations of Taxis.
“Employee Transfer Date” has the meaning set forth in Section 5.3(d)(iii).
“Encumbrance” means any lien, pledge, charge, claim, encumbrance,
security interest, option, mortgage, easement, restriction on transfer, preemptive right,
right of first refusal, or other restriction of any kind, other than non-exclusive licenses of
Intellectual Property.
“Environmental Law” means any Law relating to (A) the protection,
investigation or restoration of the environment, (B) the handling, use, presence, disposal,
release or threatened release of any Hazardous Substance or (C) noise, odor, indoor air,
LA_LAN01:327561.28
employee exposure, wetlands, pollution, contamination or any injury or threat of injury to
persons or property relating to any Hazardous Substance.
“ERISA” has the meaning set forth in Section 3.10(a).
“ERISA Affiliate” has the meaning set forth in Section 3.10(c).
“Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
“Excluded Assets” has the meaning set forth in Section 2.2.
“Excluded Liabilities” means any Liabilities of Seller and its Affiliates
other than the Assumed Liabilities. Without limiting the generality of the foregoing,
“Excluded Liabilities” shall include any: (i) Liabilities relating to the Business or the
Transferred Assets, in each case incurred or occurring at or prior to the Closing or
relating to the period prior to the Closing (except to the extent a Current Liability taken
into account in the calculation of Net Working Capital and excluding any chargebacks
relating to such period), whether currently in existence or arising hereafter, (ii)
Intracompany Payables, (iii) Indebtedness, (iv) except for the Assumed Liabilities,
Liabilities related to any current or former employees of Seller or any Affiliate of Seller
incurred or occurring (A) at or prior to the Closing or relating to the period prior to the
Closing or (B) after the Closing and during the period such employees are employed by
Seller or any Affiliate of Seller, including: (x) Liabilities with respect to any such
employees’ unpaid base salary, paid time off, payroll, unpaid commissions, bonuses, sick
leave, bereavement time, floating holidays or other similar paid time off and related
Taxes, (y) Change of Control Payments, and (z) Liabilities arising under WARN or the
Seller Compensation and Benefit Plans other than as set forth in Section 5.3, (v) except
for the Assumed Liabilities, Liabilities of Seller or any businesses or assets of any
Affiliate of Seller, (vi) Liability relating to or arising out of any Excluded Asset, (vii)
Liabilities in respect of any pending or threatened Proceeding to the extent such
Liabilities arise out of, relate to or are otherwise in respect of the operation of the
Business or the Transferred Assets, in each case prior to the Closing, (viii) Liabilities
arising out of, in connection with or relating to any violations by Seller or any of its
Affiliates of, or the failure by Seller or any of its Affiliates to comply with, any Law, (ix)
Liability for any and all: (1) Taxes of or owed by Seller or any Affiliate of Seller; or
(2) Taxes of or with respect to US Media Company, the Business or the Transferred
Assets attributable to the period prior to Closing, (x) Liability, whether currently in
existence or arising hereafter, owed by Seller to any of its Affiliates, (xi) Transaction
Expenses, (xii) Liabilities to indemnify, reimburse or advance amounts to any present or
former officer, director, employee or agent of Seller or any of its Affiliates (including
with respect to any breach of fiduciary obligations), (xiii) Liabilities of US Media
Company, in each case incurred or occurring at or prior to the Closing or relating to the
period prior to the Liabilities relating to the Business or the Transferred Assets, in each
case incurred or occurring at or prior to the Closing or relating to the period prior to the
LA_LAN01:327561.28
Closing, whether currently in existence or arising hereafter, and (xiv) all current liabilities
of Seller and its Affiliates not taken into account in the calculation of Net Working
Capital (subject to adjustment in accordance with 2.11).
“Final Net Working Capital” has the meaning set forth in Section 2.11(e).
“Fixtures and Equipment” means all furniture, furnishings, vehicles,
equipment, including IT Assets, tools, fixtures, spare parts, hardware, supplies, materials
and other tangible personal property of any kind (other than Inventory) Related to the
Business.
“Fundamental Warranties” means (i) with respect to Seller, the
representations and warranties set forth in Sections 3.1 (Organization and Qualification),
3.2 (US Media Company), 3.3 (Corporate Authorization), 3.5 (Non-
Contravention), Section 3.19 (Title to Property) and 3.20 (Finders’ Fees), and (ii) with
respect to Buyer, the representations and warranties set forth in Sections 4.1
(Organization and Qualification), 4.2 (Authorization) and 4.6 (Finders’ Fees).
“GAAP” means United States generally accepted accounting principles, as
in effect from time to time, consistently applied by Seller, including consistent principles,
practices and methodologies (including classification and estimation methodologies) in
the preparation of its consolidated financial statements which include the financial results
of the Business.
“Governmental Authorizations” means all licenses, permits, certificates
and other authorizations and approvals Related to the Business and issued by or obtained
from a Governmental Entity.
“Governmental Entity” means any domestic or foreign governmental or
regulatory authority, court, agency, commission, body or other legislative, executive or
judicial governmental entity.
“Government Contract” means any Material Contract to which Seller or
any of its Subsidiaries is a party, or by which any of them are bound, the ultimate
contracting party of which is a Governmental Entity (including any subcontract with a
prime contractor or other subcontractor who is a party to any such contract).
“Hazardous Substance” means any substance that is (A) listed, classified
or regulated pursuant to or in connection with any Environmental Law and (B) any
petroleum product or by-product, asbestos-containing material, lead-containing paint or
plumbing, polychlorinated biphenyls, mold, radioactive material or radon.
“Indebtedness” shall mean all obligations of the Business as of the Closing
(including all obligations in respect of principal, accrued interest, penalties, fees and
premiums), (a) for borrowed money (including overdraft facilities), (b) evidenced by
notes, bonds, debentures or similar instruments, (c) for the deferred purchase price of
LA_LAN01:327561.28
property, goods or services (including purchase price adjustments, “holdback” or similar
payments, and the maximum amount of any potential earn-out payments, but other than
current Accounts Payable incurred in the ordinary course of business), (d) for Contracts
relating to interest rate protection, swap agreements, collar agreements and other
financial agreement or arrangement entered into for the purpose of limiting or managing
interest rate risks, (e) all obligations to pay rent or other payment amounts under a lease
which is required to be classified as a capital lease or a liability on the face of a balance
sheet prepared in accordance with GAAP or conditional sales Contract or similar title
retention instrument, (f) all negative balances in bank accounts and all overdrafts, (g) all
obligations relative to the maximum amount of any letter of credit or letter of guaranty
(whether drawn or undrawn), bankers’ acceptance or similar instrument issued or created
for the account of such Person, (h) all obligations secured by any Encumbrance (other
than Permitted Encumbrances), (i) in the nature of guarantees, sureties, assumptions and
other contingent obligations in respect of, or obligations to purchase or to otherwise
acquire, the obligations described in (a) through (h) above of any other Person, (j) all
obligations in respect of prepayment premiums, penalties, breakage costs, “make whole
amounts,” costs, expenses and other payment obligations that would arise if all
Indebtedness referred to in the foregoing clauses (a) through (i) was prepaid (or, in the
case of any Contracts relating to interest rate protection, swap agreements, collar
agreements and other financial agreement or arrangement entered into for the purpose of
limiting or managing interest rate risks, unwound and settled) in full at such time; and (k)
to the extent any item of Indebtedness referred to in the foregoing clauses (a) through (i)
cannot be repaid at such time (e.g., as a result of an irrevocable advance notice
requirement), all interest on and other accretion of such Indebtedness that occurs between
such time and the earliest time that repayment may occur (e.g., if notice were delivered at
such time).
“Indemnified Parties” has the meaning set forth in Section 6.2(a).
“Indemnifying Party” has the meaning set forth in Section 6.4(a).
“Initial Allocation” has the meaning set forth in Section 5.2(h).
“Intellectual Property” means all (i) trademarks, service marks, brand
names, certification marks, collective marks, d/b/a’s, Internet domain names, logos,
symbols, trade dress, assumed names, fictitious names, trade names, and other indicia of
origin, all applications and registrations for the foregoing, and all goodwill associated
therewith and symbolized thereby, including all renewals of same (collectively,
“Trademarks”); (ii) inventions and discoveries, whether patentable or not, and all patents,
registrations, invention disclosures and applications therefor, including divisions,
continuations, continuations-in-part and renewal applications, and including renewals,
extensions and reissues (collectively, “Patents”); (iii) confidential information, trade
secrets and know-how, processes, concepts and methods, schematics, business methods,
formulae, drawings, prototypes, models, designs, customer lists and supplier lists
(collectively, “Trade Secrets”); (iv) published and unpublished works of authorship,
LA_LAN01:327561.28
whether copyrightable or not (including databases and other compilations of
information), copyrights therein and thereto, and registrations and applications therefor,
and all renewals, extensions, restorations and reversions thereof (“Copyrights”); and (v)
moral rights and all other intellectual property or proprietary rights.
“Interim Financial Information” has the meaning set forth in Section
3.7(b).
“Intracompany Payables” means all account, note or loan payables
recorded on the books of Seller or any Subsidiary for goods or services purchased by or
provided to the Business, or advances (cash or otherwise) or any other extensions of
credit to the Business from Seller or any Subsidiary, whether current or non-current.
“Intracompany Receivables” means all account, note or loan receivables
recorded on the books of Seller or any Subsidiary for goods or services sold or provided
by the Business to Seller or any Subsidiary or advances (cash or otherwise) or any other
extensions of credit made by the Business to Seller or any Subsidiary, whether current or
non-current.
“Inventory” means all inventory Related to the Business, wherever
located, including all finished goods whether held at any location or facility of Seller or
any of its Subsidiaries, in transit to Seller or any of its Subsidiaries or installed in a Taxi,
in each case as of the Closing Date.
“IRS” has the meaning set forth in Section 3.10(b).
“IT Assets” means computers, firmware, middleware, servers,
workstations, routers, hubs, switches, data communications lines, all other information
technology equipment and all associated documentation, in each case Related to the
Business, except to the extent included in Excluded Assets.
“knowledge” means the actual knowledge of the Seller’s executive
officers listed in Schedule 7.1(a)(ii).
“Law” means any law, statute or ordinance, or any rule, regulation,
standard, judgment, determination, order, writ, decree, injunction, arbitration award,
license, authorization, opinion, agency requirement or permit of any Governmental Entity
or common law.
“Leased Real Property” means all real property that is the subject of the
Assigned Leases.
“Liabilities” means any and all debts, liabilities, commitments and
obligations of any kind, whether fixed, contingent or absolute, matured or unmatured,
liquidated or unliquidated, accrued or not accrued, asserted or not asserted, known or
unknown, determined, determinable or otherwise, whenever or however arising
LA_LAN01:327561.28
(including, whether arising out of any contract or tort based on negligence or strict
liability) and whether or not the same would be required by GAAP to be reflected in
financial statements or disclosed in the notes thereto.
“Licenses” has the meaning set forth in Section 3.17.
“Losses” has the meaning set forth in Section 6.2(a).
“Material Adverse Effect” means any event, condition, change, occurrence
or development of a state of circumstances (any such item, an “Effect”) that, individually
or in the aggregate with all other Effects, has, or could reasonably be expected to have or
result in a material adverse effect on (x) the business, condition (financial or otherwise),
operations or results of operations of the Business taken as a whole, (y) the Transferred
Assets or the Assumed Liabilities, taken as a whole, or (z) the ability of Seller to
consummate the Transactions; provided, however, that Material Adverse Effect shall not
include any event, condition, change, occurrence or development of a state of
circumstances resulting from, attributable to, or arising in connection with (A) general
political, economic, business or market (including currency) conditions or general
changes or developments in the industries in which the Business operates, (B) acts of
terrorism or war (whether or not declared), armed hostilities or natural disasters or any
escalation or worsening thereof, (C) this Agreement, the Transactions, or the
announcement or performance thereof, including any negative impact on or disruption in
relationships with customers, suppliers, distributors, employees or similar relationships,
(D) changes in Law or any applicable accounting regulations or principles (including
GAAP) or the interpretations thereof, (E) changes in the price or trading volume of
Seller’s parent company stock (provided that the cause(s) underlying any such changes
may be taken into account in determining whether there has been, or could reasonably be
expected to be, a Material Adverse Effect), (F) any failure by Seller’s parent company or
the Business to meet public or internal revenue, earnings or other projections (provided
that the cause(s) underlying any such failure may be taken into account in determining
whether there has been, or could reasonably be expected to be, a Material Adverse Effect)
or (G) the taking of any action expressly required by this Agreement or expressly
approved or permitted in writing by Buyer, except, in the case of clauses (A) and (B), to
the extent that such Effect has a disproportionate adverse effect on the Business, the
Transferred Assets or the Assumed Liabilities, each, taken as a whole, as compared to the
adverse impact such Effect has on other Persons operating in the industries or markets in
which the Business is operated, in which case such disproportionate adverse effect may
be taken into account in determining whether there has been, or could reasonably be
expected to be, a Material Adverse Effect.
“Material Contracts” has the meaning set forth in Section 3.16(a).
“Net Working Capital” means, as of the Closing, Current Assets minus
Current Liabilities as determined in accordance with the methodologies set forth in the
Carve-Out Balance Sheet.
LA_LAN01:327561.28
“Net Working Capital Payment” has the meaning set forth in Section
2.11(f).
“Non-Governmental Authorizations” means all licenses, permits,
certificates and other authorizations and approvals other than Governmental
Authorizations that are (i) held by Seller or any of its Affiliates and (ii) Related to the
Business.
“Notice Period” has the meaning set forth in Section 6.4(a).
“NYC Licenses” has the meaning set forth in Section 2.12.
“Organizational Documents” means as to any Person the certificate or
articles of incorporation, by-laws, limited liability company agreement, limited
partnership agreement or similar governing document of such Person.
“Patents” has the meaning set forth in the “Intellectual Property”
definition.
“Payment Solutions” means (i) the development, implementation and
maintenance of, and/or providing Business Users and Business Clients with access to
and/or use of, a technology platform that facilitates payment for services provided in
and/or by Taxis and (ii) the leasing, renting, distribution, sale and/or resale to Business
Clients of equipment, software, solutions and/or services for the making, acceptance
and/or processing of credit card, debit card and/or other non-cash payment transactions in
and/or for Taxis and/or the services provided therein or thereby, and including, for the
avoidance of doubt, the provision of payment gateway and payment terminal solutions.
“Permitted Encumbrances” means (i) mechanics’, materialmen’s,
warehousemen’s, carriers’, workers’, or repairmen’s liens or other similar common law
or statutory Encumbrances arising or incurred in the ordinary course of business,
provided an adequate reserve, determined in accordance with GAAP, has been
established therefor in the Combined Financial Information, (iii) liens for Taxes,
assessments and other governmental charges not yet due and payable or due but not
delinquent or being contested in good faith by appropriate proceedings, provided an
adequate reserve, determined in accordance with GAAP, has been established therefor in
the Combined Financial Information, and (iv) with respect to real property,
(A) easements, quasi-easements, licenses, covenants, rights-of-way, rights of re-entry or
other similar restrictions, including any other agreements, conditions or restrictions that
would be shown by a current title report or other similar report or listing, (B) any
conditions that may be shown by a current survey or physical inspection and (C) zoning,
building, subdivision or other similar requirements or restrictions, in the case of each of
clauses (A), (B) and (C), which are not material in amount or do not, individually or in
the aggregate, materially detract from the value of or materially impair the existing use of
the property so affected, and (v) Encumbrances that are immaterial in nature.
LA_LAN01:327561.28
“Person” means an individual, a corporation, a partnership, an association,
a limited liability company, a Governmental Entity, a trust or other entity or organization.
“Printed Material” has the meaning set forth in Section 5.7(c)(i).
“Proceeding” means any judicial or administrative action, investigation,
audit, claim, suit, arbitration, proceeding or other litigation.
“Purchase Price” means an amount equal to the Closing Purchase Price
plus the Deferred Purchase Price Payment.
“Registered” means issued by, registered with, renewed by or the subject
of a pending application before any Governmental Entity or Internet domain name
registrar.
“Regulations” means the Transfer of Undertakings (Protection of
Employment) Regulations 2006.
“Related to the Business” means owned, leased, held, used or held for use
primarily in connection with, or primarily related to, the Business as conducted by Seller
and its Affiliates prior to the Closing.
“Released Claims” has the meaning set forth in Section 6.11(a).
“Releasee” has the meaning set forth in Section 6.11(a).
“Releasor” has the meaning set forth in Section 6.11(a).
“Representatives” has the meaning set forth in Section 5.1(a).
“Restricted Period” has the meaning set forth in Section 5.7(d).
“Retained ▇▇▇▇” has the meaning set forth in Section 5.7(b).
“Scheduled Intellectual Property” has the meaning set forth in Section
3.15(a).
“Seller” has the meaning set forth in the Preamble.
“Seller Compensation and Benefit Plan” has the meaning set forth
in Section 3.10(a).
“Seller Disclosure Letter” has the meaning set forth in Article III.
“Seller Indemnified Parties” has the meaning set forth in Section 6.3.
LA_LAN01:327561.28
“Seller Leased Property” means those assets or rights not included in the
Transferred Assets that are to be leased, licensed or otherwise provided by Seller and/or
any of its Affiliates to Buyer and/or any of its Affiliates pursuant to this Agreement or
any Ancillary Agreement, including the Seller Licensed Intellectual Property but
excluding the Leased Real Property.
“Seller Licensed Intellectual Property” means the Intellectual Property to
be licensed to Buyer or any of its Affiliates by Seller or any of its Affiliates pursuant to
this Agreement or any Ancillary Agreement.
“Seller Parties” has the meaning set forth in Section 3.1.
“Seller’s 401(k) Plan” has the meaning set forth in Section 5.3(h).
“Seller’s FSA” has the meaning set forth in Section 5.3(i).
“Subsidiary” means any Person (i) whose securities or other ownership
interests having by their terms the power to elect a majority of the board of directors or
other persons performing similar functions are owned or controlled, directly or indirectly,
by such Person and/or one or more Subsidiaries, or (ii) whose business and policies such
Person and/or one or more Subsidiaries have the power to direct; provided, however, that,
with respect to Seller, “Subsidiary” includes VeriFone System, Inc., a Delaware
corporation.
“Target Net Working Capital” means $12,500,000.
“Tax Returns” means all returns and reports (including elections,
declarations, disclosures, schedules, estimates, notices, forms and information returns)
required to be supplied to a Tax authority relating to Taxes.
“Taxes” means all federal, state, local and foreign gross or net income,
alternative, add-on minimum, profits, franchise, gross receipts, environmental, customs
duty, capital stock, capital gains, severance, stamp, payroll, sales, gift, estate, transfer,
registration, employment, unemployment, disability, use, real and personal property,
withholding, excise, social security, windfall profit, escheat, unclaimed property,
premium, ad valorem, business, production, value added, occupancy, estimated and other
taxes, duties, assessments, governmental fees or other like assessments or charges of any
kind whatsoever imposed by a Governmental Entity, whether disputed or not, (together
with all interest, penalties and additions imposed with respect to such amounts and any
interest in respect of such penalties and additions), and including any obligations to
indemnify or otherwise assume or succeed to the tax liability of any other Person.
“Taxi” means any taxicab, limousine, livery, black car or other automobile
generally used to provide ground transportation services to members of the public in
exchange for remuneration.
LA_LAN01:327561.28
“Taxi License” means any Governmental Authorization that entitles or
permits the holder thereof to own, operate, manage, dispatch, represent, act as agent for
or otherwise control the business, operation or use of one or more Taxis, including,
without limitation, taxi medallions.
“Territory” means worldwide (other than Poland), except to the extent any
territory ceases to constitute the Territory pursuant to the second to last sentence of
Section 5.10(a) of the Seller Disclosure Letter.
“Third Party Claim” has the meaning set forth in Section 6.4(a).
“Trademarks” has the meaning set forth in the “Intellectual Property”
definition.
“Trade Secrets” has the meaning set forth in the “Intellectual Property”
definition.
“Transaction Expenses” means all fees, costs, expenses and other similar
obligations of, or amounts incurred or payable by or on behalf of Seller or any of its
Subsidiaries that have not been paid in full prior to the Closing, in each case in
connection with the preparation, negotiation, execution or performance of this
Agreement, the Ancillary Agreements or the consummation of the Transactions,
including the following: (a) the fees and disbursements of, or other similar amounts
charged by, counsel retained by Seller and its Subsidiaries; (b) the fees and expenses of,
or other similar amounts charged by, any accountants, agents, financial advisors,
consultants and experts retained by Seller and its Subsidiaries; (c) any investment
banking, brokerage or finder’s fees and related expenses; and (d) the other out-of-pocket
expenses, if any, of Seller and its Subsidiaries.
“Transactions” means the transactions contemplated by this Agreement
and the Ancillary Agreements, including, but not limited to, the purchase and sale of the
Transferred Assets and the assumption of the Assumed Liabilities pursuant to this
Agreement.
“Transfer Taxes” has the meaning set forth in Section 5.2(e).
“Transferred Assets” has the meaning set forth in Section 2.1.
“Transferred Employees” has the meaning set forth in Section 5.3(d)(ii).
“Transferred Employees’ Records” means all personnel files related to the
Transferred Employees, provided that Transferred Employees’ Records shall not include
any files the transfer of which would be prohibited by Law.
“Transferred Intellectual Property” means the Transferred Trademarks,
Transferred Patents and the Transferred Software IP. For the avoidance of doubt, the
LA_LAN01:327561.28
Transferred Intellectual Property shall include only Intellectual Property that is Related to
the Business and shall not include any Intellectual Property that is used by Seller in its
point-of-sale payment systems or services businesses.
“Transferred Patents” means only the patents and patent applications set
forth on Schedule 7.1(a)(iv), together with all foreign counterparts, reissues,
continuations, continuations-in-part, divisions, revisions, extensions, restorations and
reexaminations thereof.
“Transferred Software” means only the computer software and
applications set forth on Schedule 7.1(a)(v), together with all of the following primarily
of, for or related to such computer software and applications: (a) source code and object
code; (b) documentation; (c) databases and data compilations Related to the Business; (d)
files, application programming interfaces; (e) updates, upgrades, corrections,
modifications, translations, ports, releases and versions; (f) works embodied in such
computer software and applications (including any audio or visual content or screen
displays in the user interface) and (g) data, information and other content of any type and
in any format, medium, or form Related to the Business and generated automatically
upon executing any such computer software and applications without additional user
input or is otherwise authored by any such computer software and applications.
“Transferred Software IP” means the Copyrights in the Transferred
Software and Trade Secrets that comprise, are comprised by or are embodied in or
primarily related to the Transferred Software.
“Transferred Trademarks” means only the Trademarks set forth on
Schedule 7.1(a)(vi).
“Transition Services Agreement” means the transition services agreement
to be entered by Buyer and Seller on the Closing Date, substantially in the form set forth
on Exhibit B.
“UK Employees” has the meaning set forth in Section 5.3(a).
“UK Media Limited” means VeriFone Media Limited, a private limited
company registered in England and Wales.
“UK Media Holdings” means Taxi Media Holdings Limited, a private
limited company registered in England and Wales.
“Unassigned Contract” has the meaning set forth in Section 2.3.
“US Employees” has the meaning set forth in Section 5.3(b).
“US Media Company” means VeriFone Media, LLC, a Delaware limited
liability company.
LA_LAN01:327561.28
“WARN” means the Worker Adjustment and Retraining Notification Act.
“Working Capital Dispute Notice” has the meaning set forth in Section
2.11(b).
“Working Capital Resolution Period” has meaning set forth in Section
2.11(c).
Section 7.2 Other Terms. Other terms may be defined elsewhere in the text of
this Agreement and, unless otherwise indicated, shall have such meaning throughout this
Agreement.
Section 7.3 Other Definitional Provisions. Unless the express context
otherwise requires:
(a) the words “hereof”, “herein”, and “hereunder” and words of
similar import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement;
(b) the terms defined in the singular have a comparable meaning when
used in the plural, and vice versa;
(c) the terms “Dollars” and “$” mean United States Dollars;
(d) references herein to a specific Section, Subsection or Schedule
shall refer, respectively, to Sections, Subsections or Schedules of this Agreement;
(e) wherever the word “include,” “includes,” or “including” is used in
this Agreement, it shall be deemed to be followed by the words “without limitation;”
and
(f) references herein to any gender includes each other gender.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Modification or Amendment. Subject to the provisions of
applicable Law, the parties hereto may modify or amend this Agreement only by written
agreement executed and delivered by duly authorized officers of the respective parties.
Section 8.2 Waiver.
(a) Any provision of this Agreement may be waived if, and only if, such
waiver is in writing and signed by the party against whom the waiver is to be effective.
LA_LAN01:327561.28
(b) No failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. Except as otherwise provided herein, the rights and remedies
provided herein shall be cumulative and not exclusive of any rights or remedies
provided by Law.
Section 8.3 Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument, and all
such counterparts shall together constitute the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile transmission or by email
of a .pdf attachment shall be effective as delivery of a manually executed counterpart of
this Agreement.
Section 8.4 Governing Law; Waiver of Jury Trial; Arbitration.
(a) This Agreement shall be deemed to be made in and in all respects
shall be interpreted, construed and governed by and in accordance with the Laws of the
State of Delaware without regard to the conflict of law principles thereof to the extent
that such principles would direct a matter to another jurisdiction.
(b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHTS TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS.
(c) Any controversy, claim or other dispute arising out of or relating to
this Agreement shall be determined by binding arbitration administered by JAMS in
accordance with JAMS’ Comprehensive Arbitration Rules and Procedures as such
Rules exist on the date of this Agreement, including Rules 16.1 and 16.2 thereof, before
one arbitrator, who shall be selected jointly by the parties involved in such controversy,
claim or other dispute or, if such parties cannot agree on the selection of the arbitrator,
shall be selected by JAMS (provided that any arbitrator selected by JAMS shall not,
without the consent of the parties involved in the controversy, claim or dispute, be
affiliated with such parties or their counsel). Any arbitration shall be held in San Jose,
California. Judgment may be entered on the arbitrator’s award in any court having
jurisdiction. In addition to any other proper relief, the arbitrator shall be empowered to
enter an equitable decree mandating specific enforcement of the terms of this
Agreement. Unless and until the arbitrator shall have awarded the prevailing party
costs and attorneys’ fees pursuant to the immediately following sentence, the parties to
the arbitration proceeding shall equally bear any arbitration fees and administrative
costs associated with the arbitration. The prevailing party (as determined by JAMS)
shall be entitled to recover reasonable costs and expenses (including expert witness
fees, attorneys’ fees and costs of discovery) incurred during the course of arbitration.
LA_LAN01:327561.28
The arbitration, including any discovery permitted or information exchanged during the
course of the arbitration, shall be confidential.
Section 8.5 Notices. Notices, requests, instructions or other documents to be
given under this Agreement shall be in writing and shall be deemed given, (i) when
delivered, if delivered personally to the intended recipient, (ii) one (1) Business Day later,
if sent by overnight delivery via a national courier service and (iii) when sent by email
(provided that the transmission of the email is followed up within one (1) Business Day
by dispatch pursuant to one of the other methods described herein), and in each case,
addressed to a party at the following address or email address for such party:
To Buyer:
Curb Technologies, LLC
▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: None
Email: None
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇.▇▇▇
To Seller:
VeriFone, Inc.
▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
LA_LAN01:327561.28
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
or to such other persons, addresses or email addresses as may be designated in writing by
the party to receive such notice as provided above.
Section 8.6 Entire Agreement. This Agreement (including any exhibits and
schedules hereto), the Ancillary Agreements, the Confidentiality Agreement and the
Seller Disclosure Letter constitute the entire agreement, and supersede all other prior
agreements, understandings, representations and warranties both written and oral, among
the parties, with respect to the subject matter hereof; provided, however, that the
Confidentiality Agreement is hereby amended to automatically terminate in its entirety,
effective as of the Closing.
Section 8.7 Third-Party Beneficiaries.
(a) Except as set forth in this Section 8.7(a), Buyer and Seller hereby
agree that their respective representations, warranties and covenants set forth herein are
solely for the benefit of the other party hereto, in accordance with and subject to the
terms of this Agreement, and this Agreement is not intended to, and does not, confer
upon any Person other than the parties hereto any rights or remedies hereunder,
including the right to rely upon the representations and warranties set forth herein.
Notwithstanding the foregoing, it is agreed that each Indemnified Party is an intended
third-party beneficiary as set forth in this Agreement. Each intended third-party
beneficiary shall have the right to enforce by appropriate action (including suit for
specific performance) the provisions of this Agreement intended to benefit such person.
(b) In some instances, the representations and warranties in this
Agreement may represent an allocation among the parties hereto of risks associated
with particular matters regardless of the knowledge of any of the parties hereto.
Consequently, except as set forth in Section 8.7(a), Persons other than the parties hereto
may not rely upon the representations and warranties in this Agreement as
characterizations of actual facts or circumstances as of the date of this Agreement or as
of any other date.
Section 8.8 Obligations of Buyer and Seller. Whenever this Agreement
requires a Subsidiary of Buyer to take any action, such requirement shall be deemed to
include an undertaking on the part of Buyer to cause such Subsidiary to take such action.
Whenever this Agreement requires a Subsidiary of Seller to take any action, such
LA_LAN01:327561.28
requirement shall be deemed to include an undertaking on the part of Seller to cause such
Subsidiary to take such action.
Section 8.9 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability or the other provisions of this Agreement. If any provision of
this Agreement, or the application of such provision to any Person or any circumstance, is
invalid or unenforceable, (a) the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties hereto as closely as possible in
an acceptable manner in order that the Transactions are consummated as originally
contemplated to the greatest extent possible, and (b) the remainder of this Agreement and
the application of such provision to other Persons or circumstances shall not, subject to
clause (a), be affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the application
of such provision, in any other jurisdiction.
Section 8.10 Public Disclosure. Notwithstanding anything to the contrary
contained herein, except as may be required to comply with the requirements of any
applicable Law and the rules and regulations of any stock exchange upon which the
securities of one of the parties is listed, from and after the date hereof, no press release or
similar public announcement or communication shall be made or caused to be made
relating to this Agreement unless specifically approved in advance by both parties hereto.
To the extent any press release or similar public announcement or communication is
required by applicable Law or the rules and regulations of any applicable stock exchange,
prior to making any such press release, public announcement or communication, to the
extent practicable, Buyer and Seller will consult with each other with respect to the
content thereof; provided that, in no event shall Buyer or Seller be required to consult
with the other party hereto in connection with any earnings release, earnings call or
similar communication or any report or filing under the Exchange Act or the Securities
Act of 1933, as amended, that discloses and describes or files the Agreement or includes
disclosure of the financial impact of the transaction on Buyer or Seller (including through
the filing of pro forma financial information). Notwithstanding anything to the contrary
contained in this Agreement, each of Seller and Buyer and their respective Affiliates shall
be allowed to (i) disclose the terms of this Agreement and the Transactions: (x) in
connection with summary information about the financial condition of Buyer or the
Business in the case of Buyer or its Affiliates, or Seller or its business, in the case of
Seller or its Affiliates, (y) to any of its Affiliates, auditors, attorneys, financing sources,
limited partners, investors, potential investors or other agents; provided, however, that, in
the case of disclosures made pursuant to clauses (x) and (y), the recipient is informed of
the confidential nature of such information, and (ii) make disclosures, including in
marketing materials or on their websites, with respect to the Transactions that are
consistent with prior releases or public announcements or communications made in
compliance with this Section 8.10.
LA_LAN01:327561.28
Section 8.11 Expenses. Except as otherwise expressly provided in this
Agreement, all costs and expenses incurred in connection with this Agreement and the
Transactions shall be borne by the party incurring such costs and expenses.
Section 8.12 Bulk Sales. Seller and Buyer agree to waive compliance with
Article 6 of the Uniform Commercial Code as adopted in each of the jurisdictions in
which any of the Transferred Assets are located to the extent that such Article is
applicable to the Transactions and any comparable or similar Laws with respect to asset
transfers under applicable Law.
Section 8.13 Headings. The Article, Section and paragraph captions herein are
for convenience of reference only, do not constitute part of this Agreement and shall not
be deemed to limit or otherwise affect any of the provisions hereof.
Section 8.14 Assignment. This Agreement shall not be assignable by operation
of Law or otherwise; provided, however, that following the Closing: (a) Buyer may
assign all or part of its rights and/or delegate all or part of its obligations under this
Agreement or any Ancillary Agreement to any Affiliate of Buyer; provided that no
assignment or delegation shall relieve Buyer of any of its obligations under this
Agreement or any Ancillary Agreement unless the parties hereto enter a novation; (b) all
or part of the rights and interests and/or obligations of Buyer under this Agreement or any
Ancillary Agreement: (i) may be assigned and/or delegated to any purchaser of a
substantial portion of the assets of Buyer or any of its Affiliates; provided that no
assignment or delegation shall relieve Buyer of any of its obligations under this
Agreement or any Ancillary Agreement unless the parties hereto enter a novation; and (ii)
may be assigned as a matter of law to the surviving entity in any merger, consolidation,
share exchange or reorganization involving Buyer or any of its Affiliates; and (c) Buyer
and its Affiliates shall be permitted to collaterally assign, at any time and in their sole
discretion, their respective rights hereunder to any lender or lenders providing financing
to Buyer or any of its Affiliates (including any agent for any such lender or lenders) or to
any assignee or assignees of such lender, lenders or agent. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and permitted assigns. Any purported
assignment in violation of this Agreement is void.
Section 8.15 Disclaimers. EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES, COVENANTS AND AGREEMENTS EXPRESSLY SET FORTH
HEREIN AND THE REPRESENTATIONS AND WARRANTIES, COVENANTS AND
AGREEMENTS EXPRESSLY SET FORTH IN THE ANCILLARY AGREEMENTS,
THE TRANSFERRED ASSETS ARE SOLD “AS IS, WHERE IS”, AND SELLER
EXPRESSLY DISCLAIMS ANY AND ALL OTHER REPRESENTATIONS AND
WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO
SELLER OR ITS AFFILIATES, THE TRANSFERRED ASSETS OR THE BUSINESS.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS
LA_LAN01:327561.28
AGREEMENT AND THE REPRESENTATIONS AND WARRANTIES EXPRESSLY
SET FORTH IN THE ANCILLARY AGREEMENTS, SELLER EXPRESSLY
DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES
REGARDING LIABILITIES, OWNERSHIP, LEASE, MAINTENANCE OR
OPERATION OF THE BUSINESS, THE TITLE, CONDITION, VALUE OR
QUALITY OF THE TRANSFERRED ASSETS, THE BUSINESS OR THE
PROSPECTS (FINANCIAL AND OTHERWISE), RISKS AND OTHER INCIDENTS
OF THE BUSINESS; AND SELLER EXPRESSLY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES OF MERCHANTABILITY, USAGE,
SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT
TO THE TRANSFERRED ASSETS, THE BUSINESS OR ANY PART THEREOF, OR
AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS
THEREIN, WHETHER LATENT OR PATENT.
LA_LAN01:327561.28
IN WITNESS WHEREOF, the parties have executed or caused this Agreement to
be executed as of the date first written above.
VERIFONE, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇
Title: Executive Vice President,
Corporate Development and
General Counsel
CURB TECHNOLOGIES, LLC
By: /s/ Farhaad Chanduwadia
Name: Farhaad Chanduwadia
Title: Authorized Signatory