Exhibit 2.1
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AMENDED AND RESTATED ACQUISITION AGREEMENT
Dated as of December 31, 1996
among
TN TECHNOLOGIES HOLDING INC., and
TRUE NORTH COMMUNICATIONS INC.,
▇▇▇▇▇, CONE & ▇▇▇▇▇▇▇ ADVERTISING, INC.,
▇▇▇▇▇, CONE & ▇▇▇▇▇▇▇, INC., and
R/GA MEDIA GROUP, INC.,
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇,
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇, and
KRAFT ENTERPRISES LTD
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TABLE OF CONTENTS
PAGE
ARTICLE I - DEFINITIONS...................................................... 2
Section 1.1 General................................................... 2
ARTICLE II - ACQUISITION AND RELATED TRANSACTIONS............................ 6
Section 2.1 Acquisition and Exchange.................................. 6
Section 2.2 Closing; Closing Date..................................... 6
Section 2.3 Consideration............................................. 6
Section 2.4 Assumption of Assumed Liabilities......................... 6
Section 2.5 Retained Liabilities...................................... 6
Section 2.6 Additional Deliveries of TN Technologies Holding.......... 6
Section 2.7 Additional Deliveries of True North....................... 7
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF TN TECHNOLOGIES
HOLDING................................................................. 8
Section 3.1 Good Standing; Authority.................................. 8
Section 3.2 No Conflicts; Consents.................................... 8
Section 3.3 TN Technologies Holding Capital Structure................. 8
Section 3.4 Title..................................................... 9
Section 3.5 Organization and Standing................................. 9
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF TRUE NORTH
TO TN TECHNOLOGIES HOLDING.............................................. 9
Section 4.1 Good Standing; Authority.................................. 9
Section 4.2 No Additional Representations or Warranties............... 10
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF TRUE NORTH
TO THE LIMITED PARTNERS................................................. 11
Section 5.1 Good Standing; Authority.................................. 11
Section 5.2 No Conflicts; Consents.................................... 11
Section 5.3 [Intentionally Left Blank]................................ 12
Section 5.4 Title..................................................... 12
Section 5.5 [Intentionally Left Blank]................................ 12
Section 5.6 Financial Statements...................................... 12
Section 5.7 Taxes..................................................... 12
Section 5.8 Assets Other than Real Property Interests................. 14
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TABLE OF CONTENTS
(continued)
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Section 5.9 Real Property............................................ 14
Section 5.10 Intellectual Property.................................... 15
Section 5.11 Contracts................................................ 16
Section 5.12 Litigation............................................... 19
Section 5.13 Insurance................................................ 19
Section 5.14 Environmental............................................ 19
Section 5.15 Benefit Plans............................................ 20
Section 5.16 Compliance with Applicable Laws.......................... 20
Section 5.17 Employee and Labor Matters............................... 20
Section 5.18 Customer Accounts Receivable............................. 21
Section 5.19 Licenses; Permits........................................ 21
Section 5.20 Equipment................................................ 21
Section 5.21 Sufficiency of Transferred Business...................... 22
Section 5.22 Effect of Transaction.................................... 22
Section 5.23 Disclosure............................................... 22
Section 5.24 Finders Fees............................................. 22
Section 5.25 Certain Intercompany Arrangements........................ 22
Section 5.26 Events Subsequent to Most Recent Audited
Financial Statements of the Transferred Business......... 22
ARTICLE VI - COVENANTS OF TRUE NORTH; INITIAL PUBLIC OFFERING............... 23
Section 6.1 Ordinary Conduct......................................... 23
Section 6.2 Other Transactions....................................... 25
Section 6.3 Supplemental Disclosure.................................. 26
Section 6.4 Code Section 351......................................... 26
Section 6.5 Consummation of the IPO.................................. 26
Section 6.6 Lock-up Agreements....................................... 26
Section 6.7 Conditions Precedent to Consummation of the IPO.......... 26
Section 6.8 Certificate of Incorporation............................. 27
ARTICLE VII - CONDITIONS TO CLOSING......................................... 27
Section 7.1 Obligations of True North and the Transferring Entities.. 27
Section 7.2 Obligations of TN Technologies Holding................... 28
Section 7.3 Frustration of Closing Conditions........................ 28
ARTICLE VIII - INDEMNIFICATION.............................................. 29
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TABLE OF CONTENTS
(continued)
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Section 8.1 Survival of Representations and Warranties; Liability
Threshold; Limitation on Recovery........................ 29
Section 8.2 Indemnification.......................................... 30
Section 8.3 Insurance................................................ 31
Section 8.4 Losses Net of Taxes, Etc................................. 31
Section 8.5 Procedures Relating to Indemnification................... 31
Section 8.6 Other Claims............................................. 33
Section 8.7 Termination of Indemnification........................... 33
Section 8.8 Mitigation............................................... 34
Section 8.9 Dispute Resolution....................................... 34
ARTICLE IX - CERTAIN ADDITIONAL MATTERS..................................... 34
Section 9.1 Conveyancing and Assumption Instruments.................. 34
Section 9.2 Further Assurances; Subsequent Transfers................. 34
Section 9.3 Certain Intercompany Arrangements........................ 36
Section 9.4 Other Agreements......................................... 36
Section 9.5 Sales and Transfer Taxes................................. 36
Section 9.6 Proration of Taxes, Lease and Utility Payments........... 36
Section 9.7 Real Estate.............................................. 37
Section 9.8 Plant Closings and Layoffs............................... 37
Section 9.9 Non-Competition.......................................... 37
ARTICLE X - ACCESS TO INFORMATION AND SERVICES.............................. 38
Section 10.1 Provision and Retention of Corporate Records............. 38
Section 10.2 Access to Information.................................... 38
Section 10.3 Production of Witnesses and Individuals.................. 38
Section 10.4 Confidentiality.......................................... 39
Section 10.5 Publicity................................................ 39
Section 10.6 Privileged Matters....................................... 39
ARTICLE XI - EMPLOYEE MATTERS: LABOR MATTERS............................... 40
Section 11.1 Employment............................................... 40
Section 11.2 Welfare Plans............................................ 40
Section 11.3 Preservation of Rights to Amend or Terminate Plans....... 40
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(continued)
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Section 11.4 Reimbursement............................................................................. 41
Section 11.5 Limitation on Enforcement................................................................. 41
Section 11.6 Employment Solicitation................................................................... 41
ARTICLE XII - INSURANCE....................................................................................... 41
[Section 12.1 General................................................................................... 41
Section 12.2 Certain Insured Claims.................................................................... 42
ARTICLE XIII - TERMINATION.................................................................................... 42
Section 13.1 Termination............................................................................... 42
Section 13.2 Return of Documents and Other Material.................................................... 43
Section 13.3 Survival.................................................................................. 43
ARTICLE XIV - DISPUTE RESOLUTION.............................................................................. 43
Section 14.1 Binding Arbitration....................................................................... 43
Section 14.2 Injunctive Relief......................................................................... 44
ARTICLE XV - GENERAL PROVISIONS............................................................................... 44
Section 15.1 Complete Agreement........................................................................ 44
Section 15.2 Expenses.................................................................................. 44
Section 15.3 Governing Law............................................................................. 45
Section 15.4 Notices................................................................................... 45
Section 15.5 Amendment and Modification................................................................ 46
Section 15.6 Successors and Assigns.................................................................... 46
Section 15.7 No Third Party Beneficiaries.............................................................. 46
Section 15.8 Counterparts.............................................................................. 46
Section 15.9 Interpretation............................................................................ 46
Section 15.10 Annexes, Etc.............................................................................. 46
Section 15.11 Legal Enforceability...................................................................... 47
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TABLE OF CONTENTS
(continued)
SCHEDULES
Schedule 2.3(c) Annual Repurchase Payment
Schedule 2.3(e) Consideration
Schedule 3.3 Equity Interests
Schedule 5.2 Conflicts, Necessary Consents, etc.
Schedule 5.3(b) Unpaid Dividends and Distributions
Schedule 5.5 Qualifications to do Business
Schedule 5.6 TNT Financial Statements
Schedule 5.8 Assets Other than Real Property
Schedule 5.9 Real Property
Schedule 5.10 Intellectual Property
Schedule 5.11 Contracts
Schedule 5.12 Litigation
Schedule 5.13 Insurance Policies
Schedule 5.14 Environmental
Schedule 5.15 Benefit Plans
Schedule 5.17 Employee and Labor Matters
Schedule 5.18 Customer Accounts Receivable
Schedule 5.19 Licenses; Permits
Schedule 5.20 Equipment
Schedule 5.22 Effect of Transaction
Schedule 5.24 Finders Fees
Schedule 5.25 Certain Intercompany Arrangements
Schedule 5.26 Subsequent Events
Schedule 6.1(b) Distributions
Schedule 6.1(c) Issuance, Delivery and Sale of Shares
Schedule 6.1(e) Benefit Plans
Schedule 6.1(f) Compensation
Schedule 6.1(g) Assumption of Liabilities
Schedule 6.1(i) Revaluation
Schedule 6.1(j) Payment, Loans and Advances
Schedule 6.1(n) Taxes
Schedule 6.1(o) Strategic Alliances
Schedule 6.1(p) Transactions with Affiliates
Schedule 6.1(s) Capital Expenditures
Schedule 9.7 Real Estate
Schedule 11.1 Transferred Employees
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TABLE OF CONTENTS
(continued)
ANNEXES
Annex I - Assumed Liabilities
Annex II - Transferred Assets
EXHIBITS
Exhibit A - Administrative Services Agreement
Exhibit B - Intellectual Property Agreement
Exhibit C - Intercompany Revolving Loan Agreement
Exhibit D - Space Sharing Agreements
Exhibit E - Tax Sharing Agreement
Exhibit F - Employment Solicitation Policy of True North
Exhibit G - Form of Certificate of Incorporation to be in effect
upon the Closing
Exhibit H - Form of Certificate of Incorporation to be in effect
upon consummation of the IPO
AMENDED AND RESTATED ACQUISITION AGREEMENT
AMENDED AND RESTATED ACQUISITION AGREEMENT, dated as of December 31,
1996, among TN TECHNOLOGIES HOLDING INC., a Delaware corporation ("TN
Technologies Holding"), TRUE NORTH COMMUNICATIONS INC., a Delaware corporation
("True North"), ▇▇▇▇▇, Cone & ▇▇▇▇▇▇▇ Advertising, Inc., a Delaware corporation
("FCB Advertising"), ▇▇▇▇▇, Cone & ▇▇▇▇▇▇▇, Inc., a Delaware corporation
("▇▇▇▇▇, Cone & ▇▇▇▇▇▇▇"), and R/GA Media Group, Inc., a Delaware corporation
("RGA", and collectively with FCB Advertising and ▇▇▇▇▇, Cone & ▇▇▇▇▇▇▇, the
"Transferring Entities"), and each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a resident of Norwalk,
Connecticut, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇, a resident of Danbury, Connecticut, ▇▇▇▇▇▇ ▇.
▇'▇▇▇▇▇▇▇, a resident of Wilton, Connecticut, and Kraft Enterprises LTD, an
Illinois general partnership (▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇ being
herein referred to collectively as the "Stockholders" and the Stockholders,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇, and Kraft Enterprises LTD being herein referred to
collectively as "the Limited Partners").
WHEREAS, True North is a global communications company specializing in
advertising, direct marketing, sales promotion, programming content, directory
advertising services and interactive media service;
WHEREAS, TN Technologies Holding wishes to acquire from True North and
the Transferring Entities, and True North and the Transferring Entities wish to
transfer and assign to TN Technologies Holding, the Transferred Business as
specified in this Agreement in exchange for (i) the assumption by TN
Technologies Holding of certain of the liabilities and obligations relating to
the Transferred Business as specified in this Agreement, and (ii) the issuance
to True North and the Transferring Entities by TN Technologies Holding of an
aggregate of 2,291,686 shares (the "TN Technologies Holding Shares") of its
Class B Common Stock, par value $0.001 per share (the "Class B Common Stock");
WHEREAS, In connection with the acquisition of the Transferred
Business, True North will exchange 2,802,114 shares of TN Technologies Holding
Class A Common Stock, par value $0.001 per share (the "Class A Common Stock"),
for 2,802,114 shares of Class B Common Stock; and
WHEREAS, TN Technologies Holding is willing to assume such liabilities
and obligations and issue the Class B Common Stock to True North and the
Transferring Entities in exchange for such assets and properties and to exchange
such Class B Common Stock for Class A Common Stock.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 General. As used in this Agreement, capitalized terms
defined immediately after their use shall have the respective meanings thereby
provided, and the following terms shall have the following meanings:
Acquired Entities: Cf2GS and TN Technologies Inc.
Acquisition: the transfer of the Transferred Business to TN Technologies
Holding and the assumption by TN Technologies Holding of the Assumed
Liabilities, all as more fully described in this Agreement and the Related
Agreements.
Administrative Services Agreement: the Administrative Services Agreement,
substantially in the form set forth as Exhibit A hereto, pursuant to which True
North and TN Technologies Holding will provide certain corporate services
specified therein to each other.
Affiliate: with respect to any specified person, a person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such specified person; provided, however, that
True North and TN Technologies Holding shall not be deemed to be Affiliates of
each other for purposes of this Agreement,
Agreement: this Acquisition Agreement, including all of the Annexes,
Schedules and Exhibits hereto.
Assumed Liabilities: collectively, the Liabilities and other obligations
listed on Annex I hereto.
Bids, Quotations and Proposals: the bids, quotations or proposals which
have been submitted or made by True North or the Transferring Entities relating
to the Transferred Business on behalf of the Transferred Business which are
outstanding as of the Closing Date.
Books and Records: the books and records of True North or the Transferring
Entities (or true and complete copies thereof), including all computerized books
and records owned by True North or the Transferring Entities, which relate
principally to the Transferred Business or are necessary for TN Technologies
Holding to operate the Transferred Business, including, without limitation, all
such books and records relating to Transferred Employees, the purchase of
materials, supplies and services, the manufacture and sale of products by the
Transferred Business or dealings with customers of the Transferred Business and
all files relating to any action being assumed by TN Technologies Holding as
part of the Assumed Liabilities.
Cf2GS: Christiansen, Fritsch, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, Inc., a
Washington corporation.
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Code: the Internal Revenue Code of 1986, as amended.
Committee: the Compensation Committee of the Board of Directors of True
North.
Conveyancing and Assumption Instruments: collectively, the various
agreements, instruments and other documents to be entered into in order to
effect the transfer to TN Technologies Holding of the Transferred Assets, and
the assumption by TN Technologies Holding of the Assumed Liabilities in the
manner contemplated by this Agreement.
Defense: the plan for or state of defending.
Effective Time: means 5:00 p.m., Central Time on the Closing Date.
ERISA: the Employee Retirement Income Security Act of 1974, as amended.
Exchange Act: the Securities Exchange Act of 1934, as amended.
Final Determination: as defined in the Tax Sharing Agreement.
HSR Act: the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended.
Indemnifiable Losses: with respect to any claim by an Indemnitee for
indemnification authorized pursuant to Article 8 hereof, any and all losses,
liabilities, claims, damages, obligations, payments, costs and expenses
(including, without limitation, the costs and expenses of any and all actions,
demands, assessments, judgments, settlements and compromises relating thereto
and reasonable attorneys' fees and expenses in connection therewith) suffered
by such Indemnitee with respect to such claim.
Indemnifying Party: any party who is required to pay any other person
pursuant to Article 8 hereof.
Indemnitee: any party who is entitled to receive payment from an
Indemnifying Party pursuant to Article 8 hereof.
Indemnity Payment: the amount an Indemnifying Party is required to pay
an Indemnitee pursuant to Article 8 hereof.
Insurance Program: collectively, the series of policies pursuant to
which various insurance carriers provide insurance coverage to True North in
respect of claims or occurrences relating to, without limitation, property
damage, business interruption, transit, fire, extended coverage, fiduciary,
fidelity, environmental impairment, employee crime, general liability, product
liability, automobile liability and employer's liability.
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Intercompany Revolving Loan Agreement: the agreement, substantially in the
form of Exhibit C hereto, pursuant to which True North will make available funds
for working capital purposes.
Intellectual Property Agreement: the agreement, substantially in the form
of Exhibit B hereto, pursuant to which True North and TN Technologies Holding
are providing for certain matters involving intellectual property.
IPO Registration Statement: the registration statement on Form S-1 to be
filed under the Securities Act, pursuant to which shares of TN Technologies
Holding Class A Common Stock to be issued in the IPO will be registered,
together with all amendments thereto.
Knowledge of True North: as it relates to the Transferred Business, shall
include the knowledge of the Transferring Entities, with respect to the
Transferred Business of such Transferring Entities.
Liabilities: any and all debts, liabilities and obligations, whether
accrued, contingent or reflected on a balance sheet, including, without
limitation, those arising under any law, rule, regulation, Action, order or
consent decree of any governmental entity or any judgment of any court of any
kind or any award of any arbitrator of any kind, and those arising under any
contract, commitment or undertaking.
Material Adverse Effect: a material adverse effect on the business, assets,
condition (financial or otherwise), results of operations or business prospects
of a party, or on the ability of a party to consummate the transactions or
complete the performance of the activities contemplated by this Agreement and
the other Related Agreements.
Modem Media Advertising Limited Partnership Agreement: the First Amended
and Restated Agreement of Limited Partnership of Modem Media Advertising Limited
Partnership.
Modem Media Partnership Interests: the limited and general partnership
interests in Modem Media Advertising Limited Partnership to be purchased by True
North pursuant to the Amended and Restated Partnership Interest and Stock
Purchase Agreement, dated as of December 31, 1996, by and between True North and
the Limited Partners and Stockholders.
Option: an option to purchase shares of True North common stock under
any of the Stock Option Plans.
Prospectus: each preliminary, final or supplemental prospectus forming
a part of the IPO Registration Statement.
Recovery: the amount obtained pursuant to a claim under an insurance
policy in the Insurance Program.
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Related Agreements: Administrative Services Agreement, Intellectual
Property Agreement, Tax Sharing Agreement, Intercompany Revolving Loan Agreement
and Space Sharing Agreements.
Reorganization Agreement: The Amended and Restated Reorganization
Agreement dated as of December 31, 1996, among TN Technologies Holding, True
North, each of the Limited Partners and the Stockholders.
Retained Liabilities: collectively, all of the Liabilities of the
Transferred Business not listed on Annex I hereto.
Return or Returns: all returns, declarations of estimated tax payments,
reports, estimates, information returns and statements with respect to Taxes,
including any related or supporting information with respect to any of the
foregoing, filed or required to be filed with any taxing authority.
SEC: the Securities and Exchange Commission.
Securities Act: the Securities Act of 1933, as amended.
Space Sharing Agreements: the several agreements substantially in the form
of Exhibit D hereto, between TN Technologies Holding and True North or its
affiliates pursuant to which True North or its affiliates will provide for
office space to TN Technologies Holding after the Closing.
Stock Option Plan: the TN Technologies 1996 Stock Option Plan.
Tax, Taxable or Taxes: all Federal, state, local, foreign and other taxes
and assessments, duties or charges of any kind, including all payroll,
employment or other withholding taxes, and including all interest, penalties and
additions imposed with respect to such amounts and penalties for late filing or
nonfiling of Returns.
Tax Sharing Agreement: the Tax Sharing Agreement, substantially in the form
of Exhibit E hereto, pursuant to which True North and TN Technologies Holding
have provided for certain tax matters.
Transferred Assets: collectively, all of the assets and properties of True
North and the Transferring Entities identified on Annex II hereto.
Transferred Business: the interactive media services, properties and
businesses of True North and the Transferring Entities comprising the Acquired
Entities, Transferred Assets and Assumed Liabilities or, where the context
otherwise requires, means True North or a Transferring Entity, as applicable,
with regard to the Transferred Business.
Transferred Employee: any employee of True North or a Transferring Entity
or any of its affiliates listed on Schedule 11.1 hereto.
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Underwriters: the managing underwriters for the IPO.
Underwriting Agreement: the underwriting agreement to be entered into among
TN Technologies Holding and the Underwriters with respect to the IPO.
ARTICLE II
ACQUISITION AND RELATED TRANSACTIONS
Section 2.1 Acquisition and Exchange. At the Closing (as defined in
Section 2.2) and subject to the terms and conditions of this Agreement, (a) True
North and the Transferring Entities shall sell and TN Technologies Holding shall
acquire (i) all title and interest of True North and the Transferring Entities
in and to the Acquired Entities and the Transferred Assets, as the case may be,
to be conveyed, assigned, transferred and delivered to TN Technologies Holding,
and (ii) all obligations and responsibilities of TN Technologies or a
Transferring Entity under the Assumed Liabilities to be assumed by TN
Technologies Holding and (b) True North shall exchange 2,802,114 shares of Class
A Common received in connection with the Reorganization Agreement for 2,802,114
shares of Class B Common Stock of TN Technologies Holding.
Section 2.2 Closing; Closing Date. Unless this Agreement is earlier
terminated pursuant to Article 13, the closing of the Acquisition (the
"Closing") shall take place two business days following the date on which all of
the conditions to Closing set forth in Article 7 have been satisfied or waived,
at the offices of True North, ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
unless another place or time is agreed to in writing by the parties hereto. The
date upon which the Closing actually occurs is herein referred to as the
"Closing Date."
Section 2.3 Consideration. On the Closing Date, TN Technologies
Holding shall deliver or cause to be delivered to True North and the
Transferring Entities certificates representing an aggregate of 5,093,800 shares
of Class B Common Stock of TN Technologies Holding (2,802,114 of which shall be
delivered to True North pursuant to Section 2.1(b) above), in the amounts and
registered in the names set forth on Schedule 2.3 hereto. TN Technologies
Holding agrees that it will reissue such shares of Class B Common Stock in
accordance with directions provided by True North and the Transferring Entities
in a written notice provided to TN Technologies Holding within 60 days of the
Closing.
Section 2.4 Assumption of Assumed Liabilities. In consideration for the
conveyance, assignment, transfer and delivery of the Transferred Assets being
made pursuant to Section 2.1 hereof, TN Technologies Holding agrees to assume
the Assumed Liabilities.
Section 2.5 Retained Liabilities. Upon the terms and subject to the
conditions set forth in this Agreement, True North and the Transferring Entities
hereby agree with TN Technologies Holding that True North or a Transferring
Entity shall retain, pay, perform and discharge in due course any and all
Retained Liabilities.
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Section 2.6 Additional Deliveries of TN Technologies Holding. Subject to
fulfillment or waiver of the conditions set forth in Article 7, at the Closing
TN Technologies Holding shall deliver to True North and the Transferring
Entities all of the following:
(a) Copies of the Certificate of Incorporation of TN Technologies
Holding certified as of a recent date by the Secretary of State of the State of
Delaware;
(b) Certificate of good standing of TN Technologies Holding issued as
of a recent date by the Secretary of State of the State of Delaware;
(c) Certificate of the Secretary of TN Technologies Holding, dated the
Closing Date, in form and substance reasonably satisfactory to True North, as to
(i) no amendments to the Certificate of Incorporation of TN Technologies Holding
since a specified date; (ii) the By-laws of TN Technologies Holding; (iii) the
resolutions of the Board of Directors of TN Technologies Holding authorizing the
execution and performance of this Agreement, the Related Agreements and the
transactions contemplated hereby and thereby and electing certain officers and
directors of TN Technologies Holding; and (iv) incumbency and signatures of the
officers of TN Technologies Holding executing this Agreement and the Related
Agreements; and
(d) The certificates contemplated by Sections 7.2(a) duly executed by
authorized officers of TN Technologies Holding.
Section 2.7 Additional Deliveries of True North. Subject to fulfillment or
waiver of the conditions set forth in Article 7, at the Closing True North shall
deliver to TN Technologies Holding:
(a) Copies of the Certificate of Incorporation of True North certified
as of a recent date by the Secretary of State of the State of Delaware;
(b) Certificate of good standing of True North issued as of a recent
date by the Secretary of State of the State of Delaware;
(c) Certificate of an Assistant Secretary of True North, dated the
Closing Date, in form and substance reasonably satisfactory to the Modem Media
Parties and TN Technologies Holding, as to (i) no amendments to the Certificate
of Incorporation of True North since a specified date; (ii) the By-laws of True
North; (iii) the resolutions of the Board of Directors of True North authorizing
the execution and performance of this Agreement, the Related Agreements and the
transactions contemplated hereby and thereby; and (iv) incumbency and signatures
of the officers of True North executing this Agreement and the Related
Agreements;
(d) The certificates contemplated by Sections 7.1(a) and (b) duly
executed by authorized officers of True North; and
(e) The certificates or other evidence of ownership of the 2,802,114
shares of Class A Common Stock to be exchanged pursuant to Section 2.1 above.
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Section 2.8 Additional Agreements of True North. True North shall
take all actions necessary to cause the Transferring Entities to comply with the
Transferring Entities' obligations hereunder and to effect the general
intentions of the parties in connection with the transfer of the Transferred
Business to TN Technologies Holding. The fact that the Transferring Entities are
transferring certain of the Transferred Assets shall not otherwise limit the
right of TN Technologies or the Limited Partners to seek the recourse intended
thereby. In addition, True North hereby agrees to guarantee all obligations of
the Transferring Entities to TN Technologies Holding and the Limited Partners
under this Agreement. The Limited Partners shall not be bound to exhaust their
recourse against any Transferring Entity or any other person or entities or
resort to any other means of obtaining payment or performance before being
entitled to seek payment from or recourse to True North of the obligations
hereby guaranteed. True North does furthermore bind its successors and assigns
to the obligations set forth in this Section 2.7.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TN TECHNOLOGIES HOLDING
TN Technologies Holding hereby represents and warrants to True North
and the Transferring Entities as follows:
Section 3.1 Good Standing; Authority. TN Technologies Holding is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. TN Technologies Holding has all requisite corporate
power and authority to enter into this Agreement and each of the Related
Agreements to which it is a party, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
All corporate acts and other proceedings required to be taken by TN Technologies
Holding to authorize the execution, delivery and performance of this Agreement,
the Related Agreements to which it is a party and the consummation of the
transactions contemplated hereby and thereby have been duly and properly taken.
This Agreement and each of the Related Agreements has been duly executed and
delivered by TN Technologies Holding and constitutes a legal, valid and binding
obligation of True North, enforceable against TN Technologies Holding in
accordance with its terms.
Section 3.2 No Conflicts; Consents. The execution and delivery of
this Agreement and each of the other Related Agreements to which TN Technologies
Holding is a party by TN Technologies Holding do not, and the consummation of
the transactions contemplated hereby and thereby and compliance with the terms
hereof and thereof will not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any material
obligation or to loss of a material benefit under, or to materially increased,
additional, accelerated or guaranteed rights or entitlements of any person
under, or result in the creation of any material lien, claim, encumbrance,
security interest, option, charge or restriction of any kind upon TN
Technologies Holding under, any provision of (a) the Certificate of
Incorporation or By-laws of TN Technologies Holding, (b) any material note,
bond, mortgage, indenture, deed of trust, license, lease, contract, commitment,
agreement or arrangement to which TN Technologies Holding is a party or by which
any of its properties or assets are bound or (c) any judgment, order or decree,
or statute, law, ordinance, rule or regulation
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applicable to TN Technologies Holding or its properties or assets. No consent,
approval, license, permit, order or authorization of, or registration,
declaration or filing with, any governmental entity is required to be obtained
or made by or with respect to TN Technologies Holding in connection with the
execution, delivery and performance of this Agreement or any Related Agreement
or the consummation of the transactions contemplated hereby or thereby (other
than compliance with any filings under the HSR Act, if applicable).
Section 3.3 TN Technologies Holding Capital Structure.
(a) Except as disclosed on Schedule 3.3, other than True North
and the Limited Partners, no other person or entity owns any equity interest in
TN Technologies Holding. Other than as contemplated by the terms of this
Agreement and the Reorganization Agreement, there are no options, warrants,
calls, rights, commitments or agreements of any character, written or oral other
than arising hereunder, to which TN Technologies Holding is a party or by which
such party is bound obligating TN Technologies Holding to issue, deliver, sell,
repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
redeemed any equity interest in TN Technologies Holding or to grant, or enter
into any such option, warrant, call, right, commitment or agreement.
(b) Other than as contemplated by the terms of this Agreement and
the Reorganization Agreement, the TN Technologies Holding common stock is not
subject to any voting trust agreement or other contract, agreement, arrangement,
commitment or understanding, including any such agreement, arrangement,
commitment or understanding restricting or otherwise relating to the voting,
dividend rights or disposition of the TN Technologies Holding common stock. All
of the dividends and other distributions declared by the Board of Directors of
TN Technologies Holding have been paid as of the date hereof.
Section 3.4 Title. Upon transfer to True North at the Closing of
certificates representing the Class B Common Stock, True North will receive good
and valid title, free and clear of any liens, claims, encumbrances, security
interests, option, charges and restrictions of any kind.
Section 3.5 Organization and Standing. TN Technologies Holding has
full corporate power and authority and possesses all governmental franchises,
licenses, permits, authorizations and approvals necessary to enable it to own,
lease or otherwise hold its properties and assets and to carry on its business
as presently conducted. TN Technologies Holding is duly qualified and in good
standing to do business as a foreign corporation in each jurisdiction in which
the conduct or nature of its business or the ownership, leasing or holding of
its properties makes such qualification necessary, except such jurisdictions
where the failure to be so qualified or in good standing, individually or in the
aggregate, would not have a Material Adverse Effect.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TRUE NORTH
TO TN TECHNOLOGIES HOLDING
True North hereby represents and warrants to TN Technologies Holding
as follows:
Section 4.1 Good Standing; Authority. (a) True North is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. True North has all requisite corporate power and authority to
enter into this Agreement and each of the Related Agreements, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. All corporate acts and other proceedings
required to be taken by True North to authorize the execution, delivery and
performance of this Agreement, the Related Agreements and the consummation of
the transactions contemplated hereby and thereby have been duly and properly
taken. This Agreement and each of the Related Agreements has been duly executed
and delivered by True North and constitutes a legal, valid and binding
obligation of True North, enforceable against True North in accordance with its
terms.
(b) Each of the Transferring Entities is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Each of the Transferring Entities has all requisite corporate power
and authority to enter into this Agreement to perform its obligations hereunder
and to consummate the transactions contemplated hereby. All corporate acts and
other proceedings required to be taken by each of the Transferring Entities to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and properly
taken. This Agreement has been duly executed and delivered by each of the
Transferring Entities and constitutes a legal, valid and binding obligation of
each of the Transferring Entities, enforceable against each of the Transferring
Entities in accordance with its terms.
Section 4.2 No Additional Representations or Warranties. TN
Technologies Holding understands and agrees that neither True North nor any of
the Transferring Entity is, in this Agreement or in any other agreement or
document contemplated by this Agreement, representing and warranting to TN
Technologies Holding in any way (i) as to the value or freedom from encumbrances
of, or any other matter concerning, any Transferred Assets or (ii) as to the
legal sufficiency of the attempt to convey title to any Transferred Assets or of
the execution, delivery and filing of the Conveyancing and Assumption
Instruments, IT BEING UNDERSTOOD AND AGREED THAT ALL SUCH ASSETS ARE BEING
TRANSFERRED "AS IS, WHERE IS" and that subject to Section 9.2, neither True
North nor any of the Transferring Entities shall bear the economic and legal
risk that (x) any conveyance of such assets shall prove to be insufficient or
(y) TN Technologies Holding title to any such assets shall be other than good
and marketable and free from encumbrances. Similarly, TN Technologies Holding
understands and agrees that neither True North nor any of the Transferring
Entities is, in this Agreement or in any other agreement or document
contemplated by this Agreement, representing or warranting to TN Technologies
Holding in any way that the obtaining of the consents or approvals, the
execution and delivery of any amendatory agreements and the
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making of the filings and applications contemplated by this Agreement shall
satisfy the provisions of all applicable agreements or the requirements of all
applicable laws or judgments, it being understood and agreed that, subject to
Section 9.2 hereof, neither True North nor any of the Transferring Entities
shall bear the economic and legal risk that any necessary consent or approvals
are not obtained or that any requirements of law or judgments are not complied
with.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TRUE NORTH
TO THE LIMITED PARTNERS
True North hereby represents and warrants solely to the Limited
Partners as follows:
Section 5.1 Good Standing; Authority. (a) True North is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. True North has all requisite corporate power and authority to
enter into this Agreement and each of the Related Agreements to which it is a
party, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. All corporate acts and other
proceedings required to be taken by True North to authorize the execution,
delivery and performance of this Agreement, the Related Agreements to which it
is a party and the consummation of the transactions contemplated hereby and
thereby have been duly and properly taken. This Agreement and each of the
Related Agreements to which True North is a party has been duly executed and
delivered by True North and constitutes a legal, valid and binding obligation of
True North, enforceable against True North in accordance with its terms.
(b) True North owns 100% of the outstanding capital stock of each
Transferring Entity. Each of the Transferring Entities is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Each of the Transferring Entities has all requisite corporate power
and authority to enter into this Agreement to perform its obligations hereunder
and to consummate the transactions contemplated hereby. All corporate acts and
other proceedings required to be taken by each of the Transferring Entities to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and properly
taken. This Agreement has been duly executed and delivered by each of the
Transferring Entities and constitutes a legal, valid and binding obligation of
each of the Transferring Entities, enforceable against each of the Transferring
Entities in accordance with its terms.
Section 5.2 No Conflicts; Consents. Except as disclosed on Schedule
5.2, the execution and delivery of this Agreement and each of the other Related
Agreements to which True North is a party by True North, and the execution and
delivery of this Agreement by the Transferring Entities, do not, and the
consummation of the transactions contemplated hereby and thereby and compliance
with the terms hereof and thereof will not, conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of,
any material obligation or to loss of a material benefit under, or to materially
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increased, additional, accelerated or guaranteed rights or entitlements of any
person under, or result in the creation of any material lien, claim,
encumbrance, security interest, option, charge or restriction of any kind upon
the Transferred Business under, any provision of (a) the Certificate of
Incorporation or By-laws of True North or any Transferring Entities, (b) any
material note, bond, mortgage, indenture, deed of trust, license, lease,
contract, commitment, agreement or arrangement to which True North, a
Transferring Entity or the Transferred Business is a party or by which any of
their respective properties or assets are bound or (c) any judgment, order or
decree, or statute, law, ordinance, rule or regulation applicable to True North,
a Transferring Entity or the Transferred Business or their respective properties
or assets. Except as disclosed on Schedule 5.2, no consent, approval, license,
permit, order or authorization of, or registration, declaration or filing with,
any governmental entity is required to be obtained or made by or with respect to
True North, a Transferring Entity or the Transferred Business in connection with
the execution, delivery and performance of this Agreement or any Related
Agreement or the consummation of the transactions contemplated hereby or thereby
(other than compliance with any filings under the HSR Act, if applicable).
Section 5.3 [Intentionally Left Blank]
Section 5.4 Title. True North or a Transferring Entity, as the case
may be, has good and valid title to the Transferred Business and, at the
Acquisition, good and valid title will pass to TN Technologies Holding, free and
clear of any liens, claims, encumbrances, security interests, option, charges
and restrictions of any kind.
Section 5.5 [Intentionally Left Blank]
Section 5.6 Financial Statements.
(a) Schedule 5.6(a) sets forth the consolidated balance sheets of
the Transferred Business as of September 30, 1996 and December 31, 1995, and the
consolidated statements of income and cash flows of the Transferred Business for
each of the three years ended on December 31, 1995, together with all the notes
that have been prepared to such financial statements, if any (collectively, the
"TNT Financial Statements"). The TNT Financial Statements are complete and
accurate and fairly present the consolidated financial condition and results of
operations of the Transferred Business in accordance with generally accepted
accounting principles consistently applied, in each case as of the respective
dates thereof and for the respective periods indicated.
(b) Except as disclosed on Schedule 5.6(b), there are no
liabilities or obligations of any nature (whether accrued, absolute, contingent,
unasserted or otherwise) relating to the Transferred Business except (i) as
specifically disclosed, reflected or fully reserved against as part of the
balance sheet of the Transferred Business as of December 31, 1995 (the "TNT
Balance Sheet") and (ii) for liabilities and obligations incurred in the
ordinary course of business of TN Technologies Holding consistent with past
practice since the date of the TNT Balance Sheet.
Section 5.7 Taxes. All Tax Returns, statements, reports and forms
(including estimated Tax returns and reports and information Returns and
reports) required to be filed with any Taxing
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Authority with respect to any Taxable period ending on or before the Closing
Date, by or on behalf of True North and/or its subsidiaries, including the
Transferred Business (collectively, the "True North Returns"), have been or will
be filed when due in accordance with all applicable laws (including any
extensions of such due date), and all amounts shown due thereon have been paid
or have been fully accrued on the consolidated balance sheets of True North as
of [September] 30, 1996 and December 31, 1995 (the "True North Financial
Statements") in accordance with generally accepted accounting principles. Except
to the extent disclosed on Schedule 5.7 or provided for or disclosed in the True
North Financial Statements (including notes thereto), the True North Returns
correctly reflect (and, as to any True North Returns not filed as of the date
hereof but filed on or prior to the Closing Date, will correctly reflect) the
Tax liability of True North and its Subsidiaries, including the Transferred
Business. True North and its subsidiaries, including the Transferred Business,
have withheld and paid to the applicable financial institution or Taxing
Authority all amounts required to be withheld including, without limitation, all
amounts required to be withheld with respect to employees of the Transferred
Business. All True North Returns pertaining to federal income tax filed with
respect to Taxable years of True North through the Taxable year ended December
31, 1992 have been examined and closed or are True North Returns with respect to
which the applicable period for assessment under applicable law, after giving
effect to extensions or waivers, has expired. Neither True North nor any of its
subsidiaries, including the Transferred Business, has granted any extension or
waiver of the limitation period applicable to any True North Returns involving a
Tax issue with respect to or otherwise affecting the Transferred Business.
Except as disclosed on Schedule 5.7, there is no claim, audit, action, suit,
proceeding, or investigation now pending or (to the best knowledge of True
North) threatened against or with respect to True North or any of its
subsidiaries, including the Transferred Business, in respect of any Tax
deficiency or assessment relating to or otherwise affecting the Transferred
Business. No notice of deficiency or similar document of any Tax Authority
relating to or otherwise affecting the Transferred Business has been received by
True North or any of its subsidiaries, including the Transferred Business, and
there are no liabilities for Taxes (including liabilities for interest,
additions to tax and penalties thereon and related expenses) with respect to the
issues that have been raised (and are currently pending) by any Tax Authority
relating to the Transferred Business that could, if determined adversely to True
North or any of its subsidiaries, including the Transferred Business,
materially affect the liability of True North or any of its subsidiaries,
including the Transferred Business, for Taxes with respect to or otherwise
affecting the Transferred Business in other Taxable periods. To the knowledge of
True North, there are no liens for Taxes on the assets included in or otherwise
affecting the Transferred Business other than liens for Taxes which are not yet
due and payable. Neither True North nor any of its subsidiaries has been or will
be required to include any material adjustment in Taxable income for any Tax
period (or portion thereof) ending on or prior to the Closing Date pursuant to
Sections 481 or 263A of the Code or any comparable provision under state or
foreign Tax laws as a result of transactions, events or accounting methods
employed in respect of the Transferred Business prior to the Closing Date. There
is no contract, agreement, plan or arrangement, including, but not limited to,
the provisions of this Agreement, covering any employee or former employee of
True North or any of its subsidiaries assigned to the Transferred Business that,
individually or collectively, will give rise to the payment of any amount that
will not be deductible pursuant to Section 162 (as unreasonable compensation) or
pursuant to Section 280G of the Code. True North has provided or made available
to the Limited Partners and Stockholders or their designated representatives
true and correct copies of all material
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True North Returns relating to the Transferred Business, and, as reasonably
requested by the Limited Partners and Stockholders prior to or following the
date hereof, information statements, reports, work papers, Tax opinions and
memoranda and other Tax data and documents relating to or otherwise affecting
the Transferred Business. Neither True North nor any of its subsidiaries is a
party to (or obligated under) any Tax allocation, Tax distribution, Tax sharing,
Tax indemnity or similar agreement or arrangement with respect to any Tax
relating to or otherwise affecting the Transferred Business (including, without
limitation, any such agreement or arrangement imposed by operation of law).
Section 5.8 Assets Other than Real Property Interests.
(a) True North or the Transferring Entities have good and valid
title to all assets (other than real property) reflected on the TNT Balance
Sheet or thereafter acquired, except those sold or otherwise disposed of since
the date of the TNT Balance Sheet in the ordinary course of business of the
Transferred Business consistent with past practice, in each case free and clear
of all mortgages, liens, security interests or encumbrances of any kind other
than (i) mechanics', carriers', workmen's, repairmen's or other like liens
arising or incurred in the ordinary course of business, liens arising under
original purchase price conditional sales contracts and equipment leases with
third parties entered into in the ordinary course of business and liens for
Taxes which are not due and payable or which may thereafter be paid without
penalty or premium, (ii) mortgages, liens, security interests and encumbrances
which secure debt that is reflected as a liability on the TNT Balance Sheet and
(iii) other imperfections of title or encumbrances, if any, which do not,
individually or in the aggregate, materially impair the continued use, operation
or value of the assets to which they relate in the Transferred Business (the
mortgages, liens, security interests, encumbrances and imperfections of title
described in clauses (i), (ii) and (iii) above are hereinafter referred to
collectively as "TNT Permitted Liens").
(b) All the tangible assets of the Transferred Business have been
maintained in all material respects in accordance with the past practice of the
Transferred Business. Each of the tangible assets of the Transferred Business
and each item of material tangible personal property of the Transferred Business
is in all material respects in good operating condition and repair, ordinary
wear and tear excepted. All leased personal property of the Transferred Business
is in all material respects in the condition required of such property by the
terms of the lease applicable thereto during the term of the lease and upon the
expiration thereof.
Section 5.9 Real Property.
(a) Schedule 5.9 sets forth a complete list of all leased and
other interests in real property of any kind leased or held by True North or the
Transferring Entities (individually, a "TNT Leased Property") and further
identifies any material agreements relating to said interests in real property.
True North and the Transferring Entities have good, valid, and subsisting title
to the leasehold estates in all TNT Leased Property, in each case free and clear
of all leasehold mortgages, leasehold liens, leasehold security interests,
leasehold encumbrances, leases, assignments, subleases, easements, covenants,
rights-of-way, rights of refusal, and other restrictions of any nature
-14-
whatsoever, except (a) such as are set forth on Schedule 5.9, (b) zoning,
building and similar restrictions, or (c) easements, covenants, rights-of-way,
rights of first refusal and other similar restrictions that affect the fee title
to the TNT Leased Property, none of which items set forth in clauses (b) or (c),
individually or in the aggregate, materially impair the continued use, operation
or value of the property to which they relate individually or in the aggregate,
materially impair the continued use of the property to which they relate in the
Transferred Business. The current use by the Transferred Business of the offices
and other facilities located on TNT Leased Property does not violate any local
zoning ordinance and, to the knowledge of True North, there is no proposed
change in any local zoning ordinance that would have a material adverse effect
on the Transferred Business.
(b) Neither the whole nor any part of the TNT Leased Property is
subject to any pending suit for condemnation or other taking by any public
authority, and, to the knowledge of True North, no such condemnation or other
taking is threatened or contemplated.
Section 5.10 Intellectual Property.
(a) Schedule 5.10 sets forth a true and complete list of all
Intellectual Property owned, used, filed by or licensed to the Transferred
Business (the "TNT Intellectual Property"). With respect to patents, copyrights,
trademarks and other TNT Intellectual Property, Schedule 5.10 also sets forth
lists of such TNT Intellectual Property and of all jurisdictions in which such
TNT Intellectual Property is issued, registered or applied for and all
registration and application numbers. Except as expressly set forth on Schedule
5.10, True North owns the freely transferable right to make, use, sell, have
made, lease, export, execute, reproduce, display, perform, modify, enhance,
distribute, prepare derivative works of and sublicense, without payment to any
other person, all TNT Intellectual Property, and the consummation of the
transactions contemplated hereby will not conflict with, alter or impair any
such rights. The Transferred Business owns or licenses under valid agreements
all TNT Intellectual Property as is necessary to conduct its business as is
presently conducted which is also set forth on Schedule 5.10.
(b) The Transferred Business has not granted any options,
licenses or agreements of any kind relating to TNT Intellectual Property or the
marketing or distribution thereof, except non-exclusive licenses to end users in
the ordinary course of business. The Transferred Business is not bound by or a
party to any options, licenses or agreements of any kind relating to the TNT
Intellectual Property of any other person, except as expressly set forth on
Schedule 5.10. Except as set forth in the Intellectual Property Agreement,
neither True North nor any Transferring Entity will hold any interest in the TNT
Intellectual Property after the Acquisition. Except as set forth on Schedule
5.10, all TNT Intellectual Property is free and clear of the claims of others
and of all liens, security interests and encumbrances whatsoever. Except as set
forth on Schedule 5.10, the Transferred Business' conduct of its business as
presently conducted does not, and the conduct of such business as proposed to be
conducted by TN Technologies Holding (as described in its business plan) will
not, violate, conflict with or infringe the Intellectual Property of any other
person. Except as set forth on Schedule 5.10, (i) no claims are pending or, to
the knowledge of True North, threatened, against the Transferred Business by any
person with respect to the ownership, validity, enforceability, effectiveness or
use of any TNT Intellectual Property, and, to the knowledge of True North, there
are
-15-
no reasonable grounds existing to support the commencement or assertion of any
such claims which such claims would be of a material nature and (ii) none of
True North, the Transferring Entities, the Transferred Business or any of their
Affiliates has received any written communications alleging that any such party
has violated any rights relating to Intellectual Property of any person.
(c) The TNT Intellectual Property has been maintained in
confidence in accordance with protection procedures customarily used in the
industries of the Transferred Business to protect rights of like importance.
Except as disclosed on Schedule 5.10, all former and current members of
management and key personnel of the Transferred Business, including all current
employees, agents, consultants and independent contractors who have contributed
to or participated in the conception and development of software or other TNT
Intellectual Property (collectively, "TNT Personnel"), have executed and
delivered to the Transferred Business a proprietary information agreement
restricting such person's right to disclose proprietary information of the
Transferred Business and its clients. Except as disclosed on Schedule 5.10, all
former and current TNT Personnel either (i) have been party to a "work-for-hire"
arrangement or agreement with the Transferred Business, in accordance with
applicable Federal and state law, that has accorded the Transferred Business
full, effective, exclusive and original ownership of all tangible and intangible
property thereby arising or (ii) have executed appropriate instruments of
assignment in favor of the Transferred Business as assignee that have conveyed
to the Transferred Business full, effective and exclusive ownership of all
tangible and intangible property thereby arising. None of the current or former
officers or employees of the Transferred Business have any patents issued or
applications pending for any device, process, design or invention of any kind
now used in its business.
Section 5.11 Contracts. Except as set forth on Schedule 5.11, the
Transferred Business is not a party to nor is it bound by any:
(a) employment agreement that represents an aggregate future
liability in excess of $50,000 and is not terminable by the Transferred Business
by notice of not more than sixty (60) days for a cost of less than $10,000;
(b) employee collective bargaining agreement or other contract
with any labor union;
(c) covenant of the Transferred Business not to compete or other
covenant of the Transferred Business restricting in any material respect the
development, manufacture, marketing or distribution of the Transferred Business'
products and services;
(d) agreement or other material arrangement with any current or
former officer, director or employee of the Transferred Business;
(e) lease, sublease or similar agreement with any person (other
than True North) under which the Transferred Business is a lessor or sublessor
of, or makes available for use to any person, (A) any TNT Leased Property or (B)
any portion of any premises otherwise occupied by the Transferred Business;
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(f) lease, sublease or similar agreement with any person (other
than True North or a Modem Media Party) under which (A) the Transferred Business
is lessee of, or holds or uses, any machinery, equipment, vehicle or other
tangible personal property owned by any person or (B) the Transferred Business
is a lessor or sublessor of, or makes available for use by any person, any
tangible personal property owned or leased by the Transferred Business, in any
such case which represents an aggregate future liability or receivable, as the
case may be, in excess of $50,000 and is not terminable by the Transferred
Business by notice of not more than 60 days for a cost of less than $10,000;
(g) (A) continuing contract or arrangement with a stated term
(including permitted renewals) of more than 180 days for the future purchase of
materials, supplies or equipment, (B) management service, consulting or other
similar type of contract or arrangement or (C) advertising agreement or
arrangement, in any such case which represents an aggregate future liability to
any person (other than True North) in excess of $50,000 and is not terminable by
the Transferred Business by notice of not more than 60 days for a cost of less
than $50,000;
(h) license, option or other agreement relating in whole or in
part to the TNT Intellectual Property set forth on Schedule 5.10 (including any
license or other agreement under which True North, the Transferred Business or
any of its Affiliates is licensee or licensor of any such TNT Intellectual
Property) or to trade secrets, confidential information or proprietary rights
and processes of the Transferred Business or any other person to which the
Transferred Business is a party;
(i) agreement, contract or other instrument under which the
Transferred Business has borrowed any money from, or issued any note, bond,
debenture or other evidence of indebtedness to, any person or any other note,
bond, debenture or other evidence of indebtedness issued to any person;
(j) agreement or other arrangement (including so-called take-or-
pay or keepwell agreements) under which (A) any person (including the
Transferred Business) has directly or indirectly effectively guaranteed
indebtedness, liabilities or obligations of True North or (B) the Transferred
Business has directly or indirectly effectively guaranteed indebtedness,
liabilities or obligations of any person (in each case other than endorsements
for the purpose of collection in the ordinary course of business);
(k) agreement or arrangement under which the Transferred
Business has, directly or indirectly, made any advance, loan, extension of
credit or capital contribution to, or other investment in, any person;
(l) mortgage, pledge, security agreement, deed of trust or other
instrument granting a lien or other encumbrance upon any real and personal
property of the Transferred Business (other than such that fall within clauses
(a) and (c) of the definition of TNT Permitted Liens), except as set forth on
Schedule 5.9;
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(m) agreement or instrument providing for indemnification of any
person with respect to liabilities relating to any current or former business of
the Transferred Business or any predecessor person;
(n) other agreement, contract, lease, sublease, license,
commitments or instrument to which the Transferred Business is a party or by or
to which it or any of its assets or business is bound or subject which
represents an aggregate future liability to any person (other than an Acquired
Entity) in excess of $50,000 and is not terminable by the Transferred Business
by notice of not more than 60 days for a cost of less than $10,000; or
(o) group of agreements, contracts, leases, subleases, licenses,
commitments or instruments falling within subparagraphs (a), (f), (g) and (n) of
this Section 5.11 that collectively represent future aggregate liabilities in
excess of $100,000 or that are not terminable by the Transferred Business by
notice of not more than sixty (60) days for an aggregate cost of less than
$10,000; except as specifically contemplated by this Agreement, any contract not
made in the ordinary course of business; or any other contract, agreement,
commitment or understanding that is material to the Transferred Business.
Except as expressly set forth on Schedule 5.11, all agreements, contracts,
leases, subleases, licenses, commitments or instruments of the Transferred
Business listed in the Schedules hereto (collectively, the "TNT Contracts") are
valid, binding and in full force and effect and are enforceable by the
Transferred Business in accordance with their terms (except as against third
parties that properly invoke the protection of applicable bankruptcy laws of
which, to the knowledge of True North, there are currently none) and, to the
knowledge of True North, the consummation of the transactions contemplated
hereby will not affect the validity or enforceability of the TNT Contracts.
Except as set forth on Schedule 5.11, the Transferred Business has performed all
material obligations required to be performed by it to date under the TNT
Contracts and they are not (with or without the lapse of time or the giving of
notice, or both) in breach or default in any material respect thereunder and, to
the knowledge of True North and/or TN Technologies Holding, no other party to
any of the TNT Contracts is (with or without the lapse of time or the giving of
notice, or both) in breach or default in any material respect thereunder.
Complete copies of all TNT Contracts have been made available to the Modem Media
Parties. Neither True North nor TN Technologies Holding is currently
renegotiating any of the TNT Contracts or paying liquidated damages in lieu of
performance.
Section 5.12 Litigation. Schedule 5.12 sets forth a list of all
pending lawsuits, and of all claims with respect to which an officer of the
Transferred Business has been contacted in writing, against or affecting the
Transferred Business or any of its properties, assets, operations or businesses
and which (a) relate to or involve a claim for more than $10,000 either on the
face of the claim or in the reasonable judgment of True North, (b) seek any
injunctive relief or (c) relate to or may give rise to any legal restraint on or
prohibition against the transactions contemplated by this Agreement. None of the
lawsuits or claims listed on Schedule 5.12 could reasonably be expected to have,
if so determined, individually or in the aggregate, a Material Adverse Effect.
Except as set forth on Schedule 5.12, to the knowledge of True North, there are
no unasserted claims of the type that would be required to be disclosed on
Schedule 5.12 if counsel for the claimant had contacted the Transferred
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Business which if asserted could reasonably be expected to have a Material
Adverse Effect. The Transferred Business is not a party or subject to or in
default under any judgment, order, injunction or decree of any Governmental
Entity or arbitration tribunal applicable to the Transferred Business or any of
its properties, assets, operations or business. Except as set forth on Schedule
5.12, there is no lawsuit or claim by the Transferred Business pending, or which
such claim the Transferred Business intends to initiate, against any other
person involving a claim in excess of $10,000. To the knowledge of True North,
there is no pending or threatened investigation of the Transferred Business by
any Governmental Entity.
Section 5.13 Insurance. The insurance policies maintained by the Transferred
Business are listed on Schedule 5.13. All such policies are in full force and
effect, all premiums due and payable thereon have been paid (other than
retroactive or retrospective premium adjustments that are not yet, but may be,
required to be paid with respect to any period ending prior to the Closing Date
under comprehensive general liability and workmen's compensation insurance
policies), and no notice of cancellation or termination has been received with
respect to any such policy which has not been replaced on substantially similar
terms prior to the date of such cancellation. In addition, to True North's
knowledge, the transactions contemplated hereby will not affect the validity or
enforceability of any of such policies. To the knowledge of True North, the
Transferred Business has been conducted in a manner so as to conform in all
material respects to all applicable provisions of such insurance policies.
Section 5.14 Environmental.
-------------
(a) For the purposes of this Agreement, the following terms shall have
the following definitions:
(i) "Environmental Claim" means any notice, claim, act, cause of
action or investigation by any Person alleging potential liability (including
potential liability for investigatory costs, cleanup costs, governmental
response costs, natural resources damages, property damages, personal injuries
or penalties) arising out of, based on or resulting from (A) the presence, or
release into the environment, of any Hazardous Materials (as hereinafter
defined) or (B) any violation, or alleged violation, of any Environmental Law.
(ii) "Environmental Laws" means all Federal, state, local and foreign
laws and regulations relating to pollution or protection of the environment
(including ambient air, surface water, ground water, land surface or subsurface
strata) or the protection of human health, including laws and regulations
relating to emissions, discharges, releases or threatened releases of Hazardous
Materials, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials.
(iii) "Hazardous Materials" means chemicals, pollutants, contaminants,
wastes, toxic substances, radioactive and biological materials, asbestos
containing materials (ACM), hazardous substances, petroleum and petroleum
products or any fraction thereof.
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(b) To True North's knowledge, the Transferred Business has been and
is in compliance (which compliance includes, but is not limited to, the
possession of all permits and other governmental authorizations required under
applicable Environmental Laws and compliance with the terms and conditions
thereof) in all material respects with all Environmental Laws and the
Transferred Business has not received any notice of any alleged claim, violation
of or liability under any Environ mental Law which has not heretofore been cured
or for which there is any remaining liability.
(c) Neither True North nor the Transferred Business have received
notice of any Environmental Claim filed or threatened against the Transferred
Business or relating to the Trans ferred Business, or against any person or
entity whose liability for any Environmental Claim the Transferred Business has
retained or assumed either contractually or by operation of law and there are no
past or present actions, activities, circumstances, conditions, events or
incidents, that could reasonably be expected to form the basis of any
Environmental Claim against the Transferred Business or against any person or
entity whose liability for any Environmental Claim the Transferred Business has
retained or assumed either contractually or by operation of law.
(d) To True North's knowledge, the Transferred Business has not
disposed of, emitted, discharged, handled, stored, transported, used or released
any Hazardous Materials, arranged for the disposal, discharge, storage or
release of any Hazardous Materials, or exposed any employee or other individual
to any Hazardous Materials so as to give rise to any material liability or
corrective or remedial obligation under any Environmental Laws.
(e) To True North's knowledge, no Hazardous Materials are present in,
on, under or adjacent to any properties owned, leased or used at any time
(including both land and improve ments thereon) by the Transferred Business or
for its business so as to give rise to any material liability or corrective or
remedial obligation under any Environmental Laws.
Section 5.15 Benefit Plans. Except as disclosed on Schedule 5.15, the
Transferred Business does not maintain or contribute to, or is not required to
maintain or contribute to an "employee pension plan" (as defined in Section 3(2)
of ERISA) or an "employee welfare benefit plan" (as defined in Section 3(1) of
ERISA) and neither the Transferred Business nor any benefit plan maintained by
the Transferred Business is subject to ERISA.
Section 5.16 Compliance with Applicable Laws. The Transferred Business is
in compliance in all material respects with all Applicable Laws, including those
relating to occupational health and safety. Neither True North nor the
Transferred Business has received any order or communication during the past
three years from a Governmental Entity that alleges that the Transferred
Business is not in compliance in any respect with any Applicable Laws.
Section 5.17 Employee and Labor Matters. Except as set forth on Schedule
5.17, (a) there is, and during the past three years there has been, no labor
strike, dispute, work stoppage or lockout pending, or, to the knowledge of True
North, threatened, against the Transferred Business, (b) to the knowledge of
True North, no union organizational campaign is in progress with respect to the
employees of the Transferred Business and no question concerning representation
exists respecting
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such employees; (c) the Transferred Business is not engaged in any unfair labor
practice; (d) there is no unfair labor practice charge or complaint against the
Transferred Business pending, or, to the knowledge of True North, threatened,
before the National Labor Relations Board; (e) there are no pending, or, to the
knowledge of True North, threatened, union grievances against the Transferred
Business; (f) there are no pending, or, to the knowledge of True North,
threatened, charges against the Transferred Business or any current or former
employee of the Transferred Business before the Equal Employment Opportunity
Commission or any state or local agency responsible for the prevention of
unlawful employment practices; (g)neither True North nor any Tranferring Entity
has not received written notice during the past three years of the intent of any
Governmental Entity responsible for the enforcement of labor or employment laws
to conduct an investigation of or affecting the Transferred Business and, to the
knowledge of True North, no such investigation is in progress; and (h) the
Transferred Business is not liable for any arrears of wages, penalties or taxes
with respect to the foregoing.
No officer or director of the Transferred Business is, and, to the
knowledge of True North, no other employee of the Transferred Business is a
party to or bound by any contract, license, covenant or agreement of any nature,
or subject to any judgment, decree or order of any Governmental Entity, that
would conflict with the Transferred Business or the transactions contemplated
hereby or by the Related Agreements or have a Material Adverse Effect. To the
knowledge of True North, no activity of any employee of the Transferred Business
as or while an employee of True North or the Transferred Business has caused a
violation of any employment contract, confidentiality agreement, patent
disclosure agreement, or other contract or agreement. To the knowledge of True
North, the execution and delivery of this Agreement and the Related Agreements
will not conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any such employees are now obligated.
Section 5.18 Customer Accounts Receivable. All customer accounts
receivable of the Transferred Business, whether reflected on the TNT Balance
Sheet or subsequently created, have arisen from bona fide transactions in the
ordinary course of business. To the knowledge of True North, all accounts
receivable reflected in the TNT Balance Sheet are good and collectible in the
ordinary course of business. Set forth on Schedule 5.18 is a list of the names
of the ten largest customers of the Transferred Business and the percentage of
the Transferred Business' total revenues that each customer represented during
the fiscal year ended December 31, 1995 and the seven months ended July 31,
1996. Except as set forth on Schedule 5.18, there exists no actual or threatened
termination, cancellation or limitation of, or any material modification of or
change in, the business relationship of the Transferred Business with any
customer or group of customers listed on Schedule 5.18 and, to the knowledge of
the True North, the consummation of the transactions contemplated hereby will
not result in the termination, cancellation or limitation of, or any material
change in, the business relationship of the Transferred Business with any
customer or group of customers listed on Schedule 5.18 for the seven month
period ended July 31, 1996.
Section 5.19 Licenses; Permits. Schedule 5.19 sets forth a true and
complete list of all licenses, permits and authorizations issued or granted to
the Transferred Business by Governmental Entities which are necessary for the
conduct of the Transferred Business. All such licenses, permits
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and authorizations are validly held by the Transferred Business, the Transferred
Business has complied in all material respects with all terms and conditions
thereof and, the same will not be subject to suspension, modification,
revocation or nonrenewal as a result of the execution and delivery of this
Agreement, the Acquisition or the consummation of the transactions contemplated
hereby.
Section 5.20 Equipment. Schedule 5.20 sets forth a list of each material
item of machinery, furniture, computer equipment or other equipment used in
connection with the Transferred Business, indicating in each case the owner and
the lessee or sublessee, if any.
Section 5.21 Sufficiency of Transferred Business. The assets of the
Transferred Business comprise all of the business, properties, assets (including
Intellectual Property) and goodwill necessary for, and are sufficient for, the
conduct of the Transferred Business by TN Technologies in the same manner as
conducted by True North, the Transferring Entities and their Affiliates
immediately prior to the Closing.
Section 5.22 Effect of Transaction. Except as set forth on Schedule 5.22,
no creditor, employee, client, customer or other person having a material
business relationship with the Transferred Business has informed True North, the
Transferring Entities or the Transferred Business in writing, that such person
intends to change such relationship because of the consummation of any other
transaction contemplated hereby.
Section 5.23 Disclosure. No representation or warranty of True North
contained in this Agreement, and no statement contained in any document,
certificate, Schedule, Annex or Exhibit furnished or to be furnished by or on
behalf of True North to any of the Limited Partners or any of their
representatives pursuant to this Agreement or any Related Agreement, contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary, in the light of the circumstances under which
it was or will be made, in order to make the statements herein or therein not
misleading or necessary in order to fully and fairly provide the information
required to be provided in any such document, certificate, Schedule or Exhibit.
Section 5.24 Finders Fees. True North has retained the investment bankers,
brokers and finders listed on Schedule 5.24; and no other investment bankers or
finders have been retained by True North or the Transferring Entities. True
North represents and warrants that it is solely responsible for any and all fees
associated with the parties identified on Schedule 5.24 and will not charge such
fees to the Transferred Business or the Limited Partners or Stockholders.
Section 5.25 Certain Intercompany Arrangements. Schedule 5.25 sets forth a
description of the amounts and terms of all intercompany receivables, payables
and loans outstanding as of the date hereof between True North, the Transferring
Entities, the Transferred Business, any Acquired Entity and/or any employee of
True North, the Transferring Entities, the Transferred Business and any Acquired
Entity.
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Section 5.26 Events Subsequent to Most Recent Audited Financial Statements
of the Transferred Business. Since December 31, 1995, there has not been any
material adverse change in the business, assets, condition (financial or
otherwise), results of operations or business prospects of the Transferred
Business and, except as set forth on Schedule 5.26, since September 30, 1996,
the Transferred Business has not taken any action specified in Section 6.1
below.
ARTICLE VI
COVENANTS OF TRUE NORTH; INITIAL PUBLIC OFFERING
True North covenants and agrees with TN Technologies Holding and the
Limited Partners and TN Technologies Holding covenants and agrees with the
Limited Partners as follows:
Section 6.1 Ordinary Conduct. Except as otherwise expressly permitted or
required by the terms of this Agreement, from the date hereof to the Closing
Date, True North shall cause the Transferred Business to be conducted in the
ordinary course in substantially the same manner as presently conducted
(including, without limitation, with respect to research and development
efforts, advertising, promotions and capital expenditures), and shall make all
commercially reasonable efforts consistent with past practices to preserve its
relationships with employees, customers, suppliers and others with whom the
Transferred Business deals. True North shall not, and shall not permit any
Transferring Entities, Acquired Entity or the Transferred Business to, (i) take
any action that would, or that could reasonably be expected to, result in any of
the material conditions to the Acquisition not being satisfied or (ii) do any of
the following without the prior written consent of the Limited Partners, which
consent shall not be unreasonably withheld:
(a) amend the Certificate of Incorporation or By-laws of any Acquired
Entity;
(b) except as disclosed on Schedule 6.1(b), declare or pay any
dividend, declare or make any distributions (whether in cash or other property)
in respect of any Acquired Entity's ownership interests in the Transferred
Business;
(c) except as disclosed on Schedule 6.1(c), issue, deliver or sell or
otherwise authorize or propose the issuance, delivery or sale of, any shares of
capital stock or other ownership interests of the Transferred Business or any
Acquired Entity or securities convertible into, or subscriptions, rights,
warrants or options to acquire, or other agreements or commitments of any
character obligating the Transferred Business or any Acquired Entity to issue,
any such ownership interests;
(d) redeem or otherwise acquire, directly or indirectly, any
ownership interests, or any option, warrant or right relating thereto or any
securities convertible into or exchangeable for an ownership interest of the
Transferred Business or any Acquired Entity;
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(e) except as disclosed on Schedule 6.1(e), adopt or amend in any
material respect or terminate any benefit plan or collective bargaining
agreement relating to or otherwise affecting the Transferred Business, except as
required by law;
(f) except as disclosed on Schedule 6.1(f), grant to any Transferred
Employee or any officer or employee of the Transferred Business or any Acquired
Entity any increase in compensation or benefits, except as may be required under
existing agreements;
(g) except as disclosed on Schedule 6.1(g), incur or assume any
liabilities, obligations or indebtedness for borrowed money or guarantee any
such liabilities, obligations or indebtedness, other than in the ordinary course
of business consistent with past practice;
(h) permit, allow or suffer any of their/its respective assets to
become subjected to any mortgage, lien, security interest, encumbrance,
easement, covenant, right-of-way or other similar restriction which would have
been required to be set forth on Schedule 5.9 or disclosed pursuant to Section
5.8 if existing on the date of this Agreement other than in the ordinary course
of business consistent with past practice;
(i) except as disclosed on Schedule 6.1(i), revalue any of its assets
or cancel any receivables or indebtedness owed to the Transferred Business or
waive any claims or rights of value exceeding $10,000 in the aggregate;
(j) except as disclosed on Schedule 6.1(j), except as specifically
contemplated hereby, pay, loan or advance any amount to, or sell, transfer,
lease or sublease any of its assets to, or enter into any agreement or
arrangement with True North or any of its affiliates or related parties;
(k) transfer to any person or entity any rights to TNT Intellectual
Property, except to customers in the ordinary course of its business consistent
with past practices;
(l) amend or modify a material term of, or violate any term of, any
of the agreements set forth or described on Schedule 5.11;
(m) initiate any litigation, other than collection actions in the
ordinary course of business;
(n) except as disclosed on Schedule 6.1(n), make or change any
material election in respect of Taxes, adopt or change any accounting method in
respect of Taxes, enter into any closing agreement, settle any material claim or
assessment in respect of Taxes, or consent to any material extension or waiver
of the limitation period applicable to any claim or assessment in respect of
Taxes (except to the extent that any liability for Taxes associated with any of
the foregoing shall be solely the liability of True North);
(o) except as disclosed on Schedule 6.1(o), enter into any strategic
alliance or joint marketing arrangement or agreement that is material to the
Transferred Business;
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(p) except as disclosed on Schedule 6.1(p), except as specifically
permitted by the other terms of this Agreement, enter into any transaction with
any Affiliate of True North or the Transferred Business with respect to the
assets or liabilities constituting any portion of the Transferred Business, make
any payment or transfer any article of tangible or intangible property to any
such party, or permit any such party to receive any payment or any article of
tangible or intangible property from any third party doing business, seeking
business, or desiring to do business with True North or the Transferred
Business;
(q) make any change in any method of accounting or accounting practice
or policy other than those required by generally accepted accounting principles
in effect on the date of this Agreement ("GAAP");
(r) acquire or agree to acquire by merging or consolidating with, or
by purchasing any portion of the assets or equity securities of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof or otherwise acquire or agree to
acquire any assets which are material, individually or in the aggregate, to the
Transferred Business;
(s) except as disclosed on Schedule 6.1(s), make or incur any capital
expenditure which, individually, is in excess of $15,000 or make or incur any
such expenditures which, in the aggregate, are in excess of $75,000;
(t) sell, lease, license or otherwise dispose of any of its assets or
properties, except in the ordinary course of business and consistent with past
practice;
(u) enter into any lease of real property, except in the ordinary
course of business and consistent with past practice;
(v) modify, amend, terminate or permit the lapse of any lease of, or
reciprocal easement agreement, operating agreement or other material agreement
relating to, real property;
(w) delay or accelerate the payment of any account payable or other
liability of any Acquired Entity or the Transferred Business beyond or in
advance of its due date or the date when such liability would have been paid in
the ordinary course of business consistent with past practice;
(x) delay or accelerate collection of notes or accounts receivable in
advance or beyond their regular due dates or the dates when the same would have
been collected in the ordinary course of business consistent with past practice;
(y) except as specifically permitted by this Agreement, enter into any
agreements that extend for a period exceeding one year from the date hereof or
require a payment in aggregate of more than $25,000; or
(z) agree, whether in writing or otherwise, to do any of the
foregoing.
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Section 6.2 Other Transactions. From the date of this Agreement to the
Closing, True North shall not, directly or indirectly, encourage, solicit,
initiate or participate in discussions or negotiations with, or provide any
information or assistance to, any person or group (other than TN Technologies
Holding, the Limited Partners and their representatives) concerning any merger,
sale of securities, sale of substantial assets or similar transaction involving
the Transferred Business.
Section 6.3 Supplemental Disclosure. True North shall promptly notify TN
Technologies Holding and the Limited Partners in writing of, and furnish TN
Technologies Holding and the Limited Partners any information it may reasonably
request with respect to, the receipt by any party, either written or oral, of a
proposal to enter into a transaction contemplated by Section 6.2 or of the
occurrence to such party's knowledge of any event or condition or the existence
to such party's knowledge of any fact that would cause any of the conditions to
the obligation of True North to consummate the Acquisition not to be fulfilled.
Section 6.4 Code Section 351. True North and the Transferring Entities
agree that they shall not, within one year after the Closing, sell, transfer or
otherwise dispose of the shares of TN Technologies Holding Common Stock received
by them pursuant to this Agreement, or any interest therein, in such a manner or
to the extent that any such sale, transfer or other disposition could adversely
affect the qualification of the transactions described in the Reorganization
Agreement as transfers to a controlled corporation under Section 351 of the
Code.
Section 6.5 Consummation of the IPO. Subject to the conditions specified
in Section 6.7, True North and TN Technologies Holding shall use their best
efforts to consummate the IPO as promptly as practicable following the Closing
on a valuation agreed upon by the Limited Partners, True North and TN
Technologies Holding, which agreement shall not be unreasonably withheld.
Section 6.6 Lock-up Agreements. The parties hereto hereby agree to enter
into lock-up agreements reasonably requested by the underwriters in connection
with the IPO.
Section 6.7 Conditions Precedent to Consummation of the IPO. The parties
hereto acknowledge that, the obligations of the parties to consummate the IPO
shall be conditioned on the satisfaction, or waiver by True North, of the
following conditions:
(a) True North shall be satisfied in its sole discretion that it,
together with its Affiliates, will own at least 70% of the voting control of TN
Technologies Holding following the IPO on a fully diluted basis, after giving
effect to the issuance of any shares of restricted stock or employee stock
options to any employees of TN Technologies Holding.
(b) No order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Acquisition or the IPO or any of the other transactions
contemplated by this Agreement or any Related Agreement shall be in effect; the
parties hereto hereby agree to use commercially reasonable efforts to have such
order, injunction or decree removed or lifted.
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(c) A committee of TN Technologies Holding designated by the Board of
Directors of TN Technologies Holding shall have determined that the terms of the
IPO are acceptable to TN Technologies Holding.
Section 6.8 Certificate of Incorporation. Prior to consummation of the
IPO, True North and TN Technologies Holding shall cause the Certificate of
Incorporation in the form of Exhibit H hereto to be filed with the Secretary of
State of the State of Delaware.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1 Obligations of True North and the Transferring Entities. The
obligations of True North and the Transferring Entities under this Agreement are
subject to the satisfaction (or waiver by True North) as of the Closing of the
following conditions:
(a) The representations and warranties of TN Technologies Holding made
in this Agreement qualified as to materiality shall be true and correct, and
those not so qualified shall be true and correct in all material respects, as of
the Closing Date. TN Technologies Holding shall have performed or complied with
in all material respects all obligations and covenants required by this
Agreement and the Related Agreements to be performed or complied with by TN
Technologies by the time of the Closing. TN Technologies Holding shall have
delivered to True North certificates dated the Closing Date and signed by an
authorized officer of TN Technologies confirming the foregoing.
(b) Between the date hereof and the Closing Date, there shall have
been (i) no Material Adverse Change in the assets, business, operations,
liabilities, profits, prospects or condition (financial or otherwise) of TN
Technologies Holding; (ii) no material adverse federal or state legislative or
regulatory change affecting TN Technologies Holding; and (iii) no material
damage to the assets or properties of TN Technologies Holding by fire, flood,
casualty, act of God or the public enemy or other cause, regardless of insurance
coverage for such damage. TN Technologies Holding and the Limited Partners shall
have delivered to True North a certificate dated the Closing Date and signed by
the Limited Partners and by an authorized officer of TN Technologies Holding
confirming the foregoing.
(c) The parties shall have received all approvals and actions of or by
all Governmental Entities which are necessary to consummate the transactions
contemplated hereby.
(d) TN Technologies Holding shall have received consents, in form and
substance reasonably satisfactory to True North, to the transactions
contemplated hereby from the other parties to all contracts, leases, agreements
and permits to which TN Technologies Holding is a party or by which TN
Technologies Holding or any of their respective assets or properties is affected
and which
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are necessary to prevent a Material Adverse Change in the assets, business,
operations, liabilities, profits, prospects or condition (financial or
otherwise) of TN Technologies Holding.
(e) No action, suit or proceeding by any Governmental Entity shall
have been instituted or threatened to restrain, prohibit or otherwise challenge
the legality or validity of the transactions contemplated hereby or by any of
the Related Agreements.
(f) Each of the Related Agreements to which TN Technologies Holding is
a party shall have been executed by such party and shall not have been amended
or terminated.
(g) The Certificate of Incorporation of TN Technologies Holding in the
form of Exhibit G hereto shall have been filed with the Secretary of State of
the State of Delaware.
Section 7.2 Obligations of TN Technologies Holding. The obligations of TN
Technologies Holding under this Agreement are subject to the satisfaction (or
waiver by TN Technologies Holding) as of the Closing of the following
conditions:
(a) The representations and warranties of True North made in this
Agreement and the Related Agreements qualified as to materiality shall be true
and correct, and those not so qualified shall be true and correct in all
material respects, as of the Closing Date. True North and the Transferring
Entities shall have performed or complied with in all material respects all
obligations and covenants required by this Agreement and the Related Agreements
to be performed or complied with by True North and the Transferring Entities by
the time of the Closing. True North shall have delivered to TN Technologies
Holding and the Limited Partners a certificate dated the Closing Date and signed
by authorized officers of True North confirming the foregoing.
(b) The parties shall have received all approvals and actions of or by
all Governmental Entities necessary to consummate the transactions contemplated
hereby.
(c) True North, the Transferring Entities and each Acquired Entity, as
the case may be, shall have received consents, in form and substance reasonably
satisfactory to TN Technologies Holding and the Limited Partners, necessary to
consummate the transactions contemplated hereby.
(d) No action, suit or proceeding by any Governmental Entity shall
have been instituted or threatened to restrain, prohibit or otherwise challenge
the legality or validity of the transactions contemplated hereby or of any of
the Related Agreements.
(e) True North shall have delivered an opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇, investment bankers, that the value of the Transferred Business
is not less than $11,000,000.
Section 7.3 Frustration of Closing Conditions. None of TN Technologies
Holding, True North, the Transferring Entities or any of the Limited Partners
may rely on the failure of any
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condition set forth in Section 7.1 or 7.2, as the case may be, to be satisfied
if such failure was caused by such party's failure to act in good faith or to
use its commercially reasonable efforts to cause the Closing to occur.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival of Representations and Warranties; Liability
Threshold; Limitation on Recovery.
(a) All representations, warranties, covenants and agreements of the
parties contained in this Agreement shall survive the Closing Date.
(b) Except as specifically provided herein, the provisions of this
Article 8 shall terminate and be of no further force and effect on the third
anniversary of the Closing Date. Such termination shall in no way limit the
obligations of TN Technologies Holding with respect to the Assumed Liabilities
or the obligations of True North and the Transferring Entities with respect to
the Retained Liabilities and related indemnification rights under this
Agreement, which shall survive indefinitely. Notwithstanding the foregoing, (a)
the representations and warranties of True North to the Limited Partners
contained in Sections 5.7 and 5.14 shall survive the Acquisition and shall
continue in full force and effect without limit as to time (subject to any
applicable statutes of limitations) and (b) the representations and warranties
of True North to the Limited Partners contained in Section 5.21 shall survive,
with respect to physical assets, for a period of 120 days.
(c) Except as provided in Section 8.9 hereof, TN Technologies
Holdings, the Transferring Entities and the Limited Partners shall not be
entitled to indemnification for any loss contemplated by this Article 8 until
the aggregate of all indemnified or indemnifiable losses, damages or expenses
suffered by such party or its successors and assigns, pursuant to this
Agreement, the Partnership Interest and Stock Purchase Agreement and the
Reorganization Agreement, exceeds $375,000 (the "Initial Threshold"). If such
losses, damages or expenses exceed the Initial Threshold, the applicable
indemnifying party shall be obligated to pay the entire amount of such losses,
damages or expenses suffered by the other, less $100,000.
(d) The obligations under this Article 8 of TN Technologies Holding to
True North and the Transferring Entities and of True North to TN Technologies
Holding shall survive the sale or other transfer by either of them of any assets
or businesses or the assignment by either of them of any Liabilities. To the
extent that True North or the Transferring Entities assigns any of its Retained
Liabilities (except for such amounts of Retained Liabilities which are not
material individually or in the aggregate), True North and the Transferring
Entities shall cause such transferee of such Retained Liabilities to assume
specifically its obligations with respect thereto under this Agreement and to
fulfill its obligations related to such Retained Liabilities. To the extent TN
Technologies Holding transfers to another party other than a subsidiary of TN
Technologies
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Holding any of the Assumed Liabilities (except for such amounts of Assumed
Liabilities which are not material individually or in the aggregate), TN
Technologies Holding will cause the transferee of such Assumed Liabilities to
assume specifically its obligations with respect thereto under this Agreement
and will cause such transferee to fulfill its obligations related to such
Assumed Liabilities. In the event the transferee of the Retained Liabilities or
Assumed Liabilities does not fulfill its obligations with respect thereto, True
North, the Transferring Entities and TN Technologies Holding, as the case may
be, shall fulfill their obligations with respect thereto.
Section 8.2 Indemnification.
---------------
(a) True North shall indemnify, defend and hold harmless TN
Technologies Holding, each of its directors, officers, employees and agents and
each Affiliate of TN Technologies Holding from and against any and all
Indemnifiable Losses of TN Technologies Holding or any of its Affiliates arising
out of or due to, directly or indirectly, (i) any breach by True North of any
representation or warranty of True North given for the benefit of TN
Technologies Holding contained in Article IV of this Agreement or in any
certificate or Schedule delivered pursuant hereto, (ii) any of the Retained
Liabilities and (iii) any breach of any covenant of True North or a Transferring
Entity contained in this Agreement.
(b) True North shall indemnify the Limited Partners their Affiliates
and each of their respective officers, directors, employees, stockholders and
control persons against and hold them harmless from any loss, liability, claim,
damage or expense (including legal fees and expenses reasonably incurred)
suffered or incurred by any such indemnified party arising from, relating to or
otherwise in respect of any pollution or threat to human health or the
environment that is related in any way to True North's, any Transferring
Entities, or the Transferred Business' management, use, control, ownership or
operation of any properties owned, leased or used at any time by True North, a
Transferring Entity or the Transferred Business, that occurred or existed, or
was caused, in whole or in part, on or before the Closing Date, and any
Environmental Claim True North, a Transferring Entity or the Transferred
Business has assumed or retained either contractually or by operation of law.
(c) True North shall indemnify the Limited Partners and the
Stockholders, their Affiliates and each of their respective officers, directors,
employees, stockholders and control persons against and hold each of them
harmless from any loss, liability, claim, damage or expense (including legal
fees and expenses reasonably incurred) suffered or incurred by any such
indemnified party (other than any loss, liability, claim, damage or expense, for
which exclusive indemnification is provided under Section 8.2(b)) arising from,
relating to or otherwise in respect of (a) any breach of any representation or
warranty of True North contained in Article V of this Agreement and (b) any
breach of any covenant of True North, a Transferring Entity or TN Technologies
Holding contained in Article VI or Section 9.2 of this Agreement.
Notwithstanding the foregoing, Kraft Enterprises LTD shall have no right to seek
indemnification from True North or any Transferring Entities pursuant to this
Section 8.2 or otherwise unless at least one other Limited Partner also seeks
such indemnification pursuant to this Section 8.2 for the same alleged breach of
a representation, warranty or covenant of True North or any Transferring
Entities
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(d) TN Technologies Holding shall indemnify, defend and hold harmless
True North and each of the Transferring Entities, each of their respective
directors, officers, employees and agents and each Affiliate of True North and
each of the Transferring Entities from and against any and all Indemnifiable
Losses of True North or any Transferring Entity or any of their respective
Affiliates arising out of or due to, directly or indirectly, (i) any breach by
TN Technologies Holding of any representations or warranties of TN Technologies
Holding contained in Article III of this Agreement, or in any certificate or
Schedule delivered pursuant hereto, (ii) any of the Assumed Liabilities, (iii)
any claim that the information provided by TN Technologies in the IPO
Registration Statement or the Prospectus is false and misleading with respect to
any material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading or (iv) any breach
of any covenant of TN Technologies Holding contained in this Agreement.
Section 8.3 Insurance. Amounts required to be paid pursuant to this
Article 8 are hereafter sometimes collectively called "Indemnity Payments" and
are individually called an "Indemnity Payment." The amount which any party (an
"Indemnifying Party") is required to pay to any other party (an "Indemnitee")
pursuant to Section 8.2 shall be reduced (including, without limitation,
retroactively) by any insurance proceeds and other amounts actually recovered by
such Indemnitee in reduction of the related Indemnifiable Loss. If an
Indemnitee shall have received an Indemnity Payment in respect of an
Indemnifiable Loss and shall subsequently actually receive insurance proceeds or
other amounts in respect of such Indemnifiable Loss, then such Indemnitee shall
pay to such Indemnifying Party a sum equal to the lesser of (a) the amount of
such insurance proceeds or other amounts or (b) such Indemnity Payment actually
received previously. The Indemnitee agrees that the Indemnifying Party shall be
subrogated to such Indemnitee under any insurance policy.
Section 8.4 Losses Net of Taxes, Etc. The amount of any loss, liability,
claim, damage, expense or Tax (collectively, a "Loss") for which indemnification
is provided under this Article 8 shall be (a) increased to take account of any
net Tax cost incurred by the indemnified party arising from the receipt of
indemnity payments hereunder (i.e. grossed up for such increase) and (b) reduced
to take account of any net Tax benefit realized by the indemnified party arising
from the incurrence or payment of any such Loss. In computing the amount of any
such Tax cost or Tax benefit, the indemnified party shall be deemed to
recognize all other items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt of any indemnity payment hereunder
or the incurrence or payment of any indemnified Loss. Any indemnification
payment hereunder shall initially be made without regard to this paragraph and
shall be increased or reduced to reflect any such net Tax cost (including gross-
up) or net Tax benefit only after the indemnified party has actually realized
such cost or benefit. For purposes of this Agreement, an indemnified party shall
be deemed to have "actually realized" a net Tax cost or a net Tax benefit to the
extent that, and at such time as, the amount of Taxes payable by such
indemnified party is increased above or reduced below, as the case may be, the
amount of Taxes that such indemnified party would be required to pay but for the
receipt of the indemnity payment or the incurrence or payment of such Loss, as
the case may be. The amount of any increase or reduction hereunder shall be
adjusted to reflect any Final Determination (which shall include the execution
of Form 870-AD or any successor form) with respect to the indemnified
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party's liability for Taxes and payments between the parties to this Agreement
to reflect such adjustment shall be made if necessary.
Section 8.5 Procedures Relating to Indemnification. In order for
a party (the "indemnified party") to be entitled to any indemnification provided
for under this Agreement in respect of, arising out of or involving a claim or
demand made by any person against the indemnified party (a "Third Party Claim"),
such indemnified party must notify the indemnifying party in writing, and in
reasonable detail, of the Third Party Claim within twenty (20) business days
after receipt by such indemnified party of written notice of the Third Party
Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent the
indemnifying party shall have been actually prejudiced as a result of such
failure (except that the indemnifying party shall not be liable for any expenses
incurred by the indemnified party during the period in excess of twenty (20)
days in which the indemnified party failed to give such notice). Thereafter,
the indemni fied party shall deliver to the indemnifying party, within ten (10)
business days after the indemnified party's receipt thereof, copies of all
notices and documents (including court papers) received by the indemnified party
relating to the Third Party Claim.
If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses and acknowledges its obligation to indemnify the indemnified
party therefor, to assume the defense thereof at its sole expense with counsel
selected by the indemnifying party and reasonably acceptable to the indemnified
party; provided, however, that the indemnified party shall have the right to
employ separate counsel to represent itself in connection with any claim in
respect of which indemnity may be sought hereunder if the defendants in respect
of any such claim reasonably conclude that there may be legal defenses available
to them or another indemnified party that are different from or additional to
those available to the indemnifying party or that there exists some other
conflict of interest between the interests of the indemnified parties and the
indemnifying party with respect to such claim that makes separate representation
desirable in the reasonable judgment of the indemnified parties, and, in the
event of the foregoing, the fees and expenses reasonably incurred by such
separate counsel shall be paid by the indemnifying party. It is understood,
however, in connection with the proviso in the preceding sentence that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel for all the indemnified parties (together with not more than
one local counsel in each jurisdiction in which any claim or action is brought).
Should the indemnifying party elect to assume the defense of a Third Party
Claim, except where it may not so elect pursuant to the proviso in the second
preceding sentence, in accordance with the second preceding sentence the
indemnifying party shall not be liable to the indemnified party for legal
expenses subsequently incurred by the indemnified party in connection with the
defense thereof. If the indemnifying party assumes such defense, the
indemnified party shall have the right to participate in the defense thereof and
to employ counsel, at its own expense, separate from the counsel employed by the
indemnifying party, it being understood that the indemnifying party shall
control such defense. The indemnifying party shall be liable for the fees and
expenses of counsel employed by the indemnified party for any period during
which the indemnifying party has failed to assume the defense thereof (other
than during any period during which the indemnified party shall have failed to
give timely notice of the Third Party Claim as provided above).
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If the indemnifying party elects to assume the defense of any Third Party
Claim in accordance with the provisions of this Section 8.5, all of the
indemnified parties shall cooperate with the indemni fying party in the defense
or prosecution thereof. Such cooperation shall include the retention and (upon
the indemnifying party's request) the provision to the indemnifying party of
records and infor mation which are reasonably relevant to such Third Party
Claim, and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.
Whether or not the indemnifying party shall have assumed the defense of a Third
Party Claim, the indemnified party shall not settle, compromise or discharge
such Third Party Claim without the indemnifying party's prior written consent
(which consent shall not be unreasonably withheld). If the indemnifying party
shall have assumed the defense of a Third Party Claim, the indemnified party
shall agree to any settlement, compromise or discharge of a Third Party Claim
which the indemnifying party may recommend and which by its terms obligates the
indemnifying party to pay the full amount of the liability in connection with
such Third Party Claim, which releases the indemnified party completely in
connection with such Third Party Claim and which would not otherwise adversely
affect the indemnified party.
Notwithstanding the foregoing, the indemnifying party shall not be entitled
to assume the defense of any Third Party Claim (and shall be liable for the fees
and expenses of counsel incurred by the indemnified party in defending such
Third Party Claim) if the Third Party Claim seeks an order, injunction or other
equitable relief or relief for other than money damages against the indemnified
party which the indemnified party reasonably determines cannot be separated from
any related claim for money damages. If such equitable relief or other relief
portion of the Third Party Claim can be so separated from that for money
damages, the indemnifying party shall be entitled to assume the defense of the
portion relating to money damages. The indemnification required hereunder shall
be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or loss, liability,
claim, damage or expense is incurred. All claims under Section 8.2 other than
Third Party Claims shall be governed by Section 8.6.
Section 8.6 Other Claims. Subject to Section 8.9 below, in the event any
indemnified party should have a claim against any indemnifying party under
Section 8.2 that does not involve a Third Party Claim being asserted against or
sought to be collected from such indemnified party, the indemnified party shall
deliver notice of such claim with reasonable promptness to the indemnifying
party. The failure by any indemnified party so to notify the indemnifying party
shall not relieve the indemnifying party from any liability which it may have to
such indemnified party under Section 8.2. If the indemnifying party does not
notify the indemnified party within twenty (20) business days following its
receipt of such notice that the indemnifying party disputes its liability to the
indemnified party under Section 8.2, such claim specified by the indemnified
party in such notice shall be conclusively deemed a liability of the
indemnifying party under Section 8.2 and the indemnifying party shall pay the
amount of such liability to the indemnified party on demand or, in the case of
any notice in which the amount of the claim (or any portion thereof) is
estimated, on such later date when the amount of such claim (or such portion
thereof) becomes finally determined. If the indemnifying party has timely
disputed its liability with respect to such claim, as provided above, the
indemnifying party and the indemnified party shall proceed in good faith to
negotiate a resolution of such dispute and, if
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not resolved through negotiations, such dispute shall be resolved by litigation
in an appropriate court of competent jurisdiction.
Section 8.7 Termination of Indemnification. The obligations to indemnify
and hold harmless a party hereto pursuant to Section 8.2 shall not terminate
except as provided in Section 8.1 hereof.
Section 8.8 Mitigation. The parties hereto shall cooperate with each other
with respect to resolving any claim or liability with respect to which one party
is obligated to indemnify any other party hereunder, including by making
commercially reasonable efforts to mitigate or resolve any such claim or
liability; provided, that an indemnified party shall not be required to make
such efforts if they would be detrimental in any material respect to such party.
Section 8.9 Dispute Resolution.
(a) TN Technologies Holding and the Limited Partners acknowledge and
agree that in the event that TN Technologies Holding or the Limited Partners
determine that the representations and warranties contained in Section 5.21
shall not be true and correct as of the Closing, the parties shall attempt to
resolve any such dispute in accordance with the provisions of this Section 8.9.
(b) In the event of any such dispute, TN Technologies Holding or the
Limited Partners shall deliver, within 120 days of the Closing, a certificate of
the Limited Partners or the President or Chief Executive Officer of TN
Technologies Holding a notice (a "Deficiency Notice") describing, in reasonable
detail, (i) the manner in which the assets of the Transferred Business were
deficient at the time of Closing, and (ii) an identification of the additional
assets that are necessary to make Section 5.21 true and correct as of the
Closing Date; provided however, that TN Technologies Holding and the Limited
Partners shall be entitled to provide no more than three Deficiency Notices
pursuant to this Section 8.9. The Limited Partners acknowledge and agree that
the Dispute Resolution mechanism of this Section 8.9 is for the benefit of TN
Technologies Holding. The Limited Partners further acknowledge and agree that
the resolutions of any claim or controversy pursuant to Section 8.9 shall
satisfy the obligations of True North to the Limited Partners pursuant to the
Representations and Warranties contained in Section 5.21 with respect to
physical assets.
(c) The Chief Financial Officer of True North shall respond to the
Deficiency Notice within 10 days of receipt of such notice. True North and TN
Technologies Holding agree to to cause their respective Chief Financial Officers
(i) to reach a good faith settlement regarding the issues raised in such
Deficiency Notice and (ii) to collect a transfer of such additional assets to TN
Technologies Holding as is agreed upon by such Chief Financial Officers. In the
event that the Chief Financial Officers are unable to agree, the President of
each of True North and TN Technologies Holding shall meet to resolve such
dispute. In the event that a dispute still exists, TN Technologies Holding
shall be entitled to seek arbitration pursuant to Section 14.1 hereof.
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ARTICLE IX
CERTAIN ADDITIONAL MATTERS
Section 9.1 Conveyancing and Assumption Instruments. In connection with
the transfer, conveyance, assignment and delivery of the Transferred Assets and
the assumption of Liabilities contemplated by this Agreement, True North, the
Transferring Entities and TN Technologies Holding agree that, on or before the
Closing Date, each shall execute or cause to be executed by the appropriate
parties and deliver to each other, as appropriate, the Conveyancing and
Assumption Instruments.
Section 9.2 Further Assurances; Subsequent Transfers.
(a) Each of True North, the Transferring Entities and TN Technologies
Holding will execute and deliver such further instruments of conveyance,
transfer and assignment and will take such other actions as each of them may
reasonably request of the other in order to effectuate the purposes of this
Agreement and to carry out the terms hereof. Without limiting the generality of
the foregoing but subject to Section 4.2, at any time and from time to time
after the Closing Date, at the request of any of the Limited Partners and TN
Technologies Holding and without further consideration, True North and the
Transferring Entities will execute and deliver to TN Technologies Holding such
other instruments of transfer, conveyance, assignment and confirmation and take
such action as the Limited Partners or TN Technologies Holding may reasonably
deem necessary or desirable in order to more effectively transfer, convey and
assign to TN Technologies Holding and to confirm TN Technologies Holding's title
to all of the Transferred Assets, to put TN Technologies Holding in actual
possession and operating control thereof and to permit TN Technologies Holding
to exercise all rights with respect thereto (including, without limitation,
rights under contracts and other arrangements as to which the consent of any
third party to the transfer thereof shall not have previously been obtained) and
TN Technologies Holding will execute and deliver to True North and the
Transferring Entities all instruments, undertakings or other documents and take
such other action as True North and the Transferring Entities may reasonably
deem necessary or desirable in order to have TN Technologies Holding fully
assume and discharge the Assumed Liabilities and relieve True North and the
Transferring Entities of any Liability or obligations with respect thereto and
evidence the same to third parties. Notwithstanding the foregoing, True North
and the Transferring Entities and TN Technologies Holding shall not be
obligated, in connection with the foregoing, to expend monies other than their
respective reasonable out-of-pocket expenses and attorneys' fees.
(b) True North, the Transferring Entities and TN Technologies Holding
will use their commercially reasonable efforts to obtain any consent, approval
or amendment required to novate and/or assign all agreements, leases, licenses
and other rights of any nature whatsoever relating to the Transferred Business
to TN Technologies Holding; provided, however, that True North and the
Transferring Entities shall not be obligated to pay any consideration therefor
(except for filing fees and other administrative charges) to the third party
from whom such consents, approvals and amendments are requested. To the extent
that the novation or assignment of any contract or agreement (or their proceeds)
pursuant to this Section 9.2 is prohibited by law or not
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obtainable through such commercially reasonable efforts, the assignment
provisions of this Section 9 shall operate to create a subcontract with TN
Technologies Holding to perform each relevant unassignable contract or agreement
at a subcontract price equal to the monies, rights and other consi derations
received by True North or the Transferring Entities, as the case may be, with
respect to the performance by TN Technologies Holding under such subcontract.
True North or the Transferring Entities, as the case may be, shall and the
Transferring Entities, as the case may be, shall, without further consideration
therefor, pay and remit to TN Technologies Holding promptly all monies, rights
and other considerations received in respect of such performance. True North
and the Transferring Entities shall exercise or exploit their rights and options
under all such agreements, leases, licenses and other rights and commitments
referred to in this Section 9.2(b) only as reasonably directed by TN
Technologies Holding and at TN Technologies Holding's expense. If and when any
such consent shall be obtained or such agreement, lease, license or other right
shall otherwise become assignable or able to be novated, True North or the
Transferring Entities, as the case may be, shall promptly assign and novate all
its rights and obligations thereunder to TN Technologies Holding without payment
of further consideration and TN Technologies Holding shall, without the payment
of any further consideration therefor, assume such rights and obligations.
(c) All Bids, Quotations and Proposals included in the Transferred
Assets shall be transferred to TN Technologies Holding to the extent permitted
by law. True North, the Transferring Entities and TN Technologies Holding shall
work together and use their commercially reasonable efforts to preserve such
Bids, Quotations and Proposals and facilitate the award of contracts pursuant
thereto consistent with applicable laws and regulations. Any contracts awarded
pursuant to an outstanding Bid, Quotation or Proposal shall be considered an
agreement and treated in the same manner as provided for in the last two
sentences of Section 9.2(b) hereof.
Section 9.3 Certain Intercompany Arrangements.
(a) Except as specifically provided by this Agreement or the Related
Agreements, to the extent that True North, on the one hand, and the Transferred
Business, on the other hand, are providing or selling at the Closing Date to the
other, or charging each other for, any services or products, pursuant to any
written agreement or arrangement, then such agreement or arrangement shall not
be deemed altered, amended or terminated as a result of this Agreement or the
consumma tion of the transactions contemplated hereby; provided, however, that
following the Closing Date any services and products to be provided which were
not subject to a written agreement or arrangement shall be provided only on an
arm's length basis. Nothing in this Section 9.3 shall require or authorize True
North or TN Technologies Holding to provide and charge each other for any
services other than on the terms and conditions specified in the Administrative
Services Agreement.
(b) Except as otherwise provided herein, any intercompany receivable,
payable or loan between True North and TN Technologies Holding outstanding on
the Closing Date shall not be deemed altered, amended or terminated as a result
of this Agreement or the consummation of the transactions contemplated hereby.
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Section 9.4 Other Agreements. As of the Closing Date, True North and TN
Technologies Holding shall enter into the Related Agreements.
Section 9.5 Sales and Transfer Taxes. TN Technologies Holding and True
North agree to cooperate to determine the amount of sales, transfer or other
taxes or fees (including, without limita tion, all real estate, patent,
copyright and trademark transfer taxes and recording fees) payable in connection
with the transactions contemplated by this Agreement (the "Transaction Taxes").
True North agrees to file promptly and timely the returns for such Transaction
Taxes with the appropriate taxing authorities and remit payment of the
Transaction Taxes and TN Technologies Holding will, if required, join in the
execution of any such tax returns or other documentation. Payment of all such
Transaction Taxes shall be the responsibility of True North.
Section 9.6 Proration of Taxes, Lease and Utility Payments. All real
property, personal property and similar taxes and installments of general and
special assessments, if any, with respect to the Transferred Assets shall be
prorated on the basis of actual days elapsed between the commence ment of the
relevant fiscal tax year and the Closing Date, based on a 365-day year and the
most recent tax statements or bills applicable thereto, without later
adjustment. Any installment of rental payments with respect to leases that are
part of the Transferred Assets or utility or similar periodic charges incurred
by the Transferred Business which are payable with respect to the current period
in which the Closing Date occurs shall be prorated between True North and TN
Technologies Holding on the basis of actual days elapsed from the first day of
the relevant period to the Closing Date. True North shall be responsible for all
such taxes, payments and charges allocable to all times prior to and including
the Closing Date and TN Technologies Holding shall be responsible for all such
taxes, payments and charges allocable to all times after the Closing Date.
Following the Closing Date, each party shall, upon request of the other party,
immediately reimburse the other party for any such taxes, payments and charges
or other expenses for which said party is responsible but have been paid by or
are owed by the other party and for allocations made by one party on behalf of
the other party.
Section 9.7 Real Estate. Schedule 9.7 indicates the locations for which TN
Technologies Holding and True North will enter into Space Sharing Agreements
prior to the Acquisition.
Section 9.8 Plant Closings and Layoffs. TN Technologies Holding agrees
that it shall not, at any time during the ninety (90) day period following the
Closing Date, effectuate (i) a "plant closing" as defined in the Worker
Adjustment and Retraining Notification Act of 1988 (the "WARN Act") affecting
any site of employment or operating units within any site of employment of the
Transferred Business or (ii) take any action to precipitate a "mass layoff" as
defined in the WARN Act affecting any site of employment of the Transferred
Business, except, in either case, after complying fully with the
notice and other requirements of the WARN Act.
Section 9.9 Non-Competition. For a period of three (3) years after the
Closing Date, True North shall not directly or indirectly engage in the
Restricted Business (as hereinafter defined); provided, however, that True North
or any of its subsidiaries may acquire other businesses or entities that are
deemed to be engaging in the Restricted Business so long as such activity
constitutes less than 15% of such business' or entity's revenues and such
revenues associated with the Restricted
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Business are less than $3,000,000. If True North or any of its subsidiaries
(other than TN Technologies Holding) shall acquire any business or entity that
is engaging in the Restricted Business and such business or entity has revenues
from the Restricted Business in excess of 15%, but less than 50% of such
business' or entity's aggregate revenues, True North shall offer to TN
Technologies Holding the reasonable opportunity to purchase the business or
entity engaged in the Restricted Business (i) on terms and conditions that are
consistent with the agreement to purchase such business or entity by True North
and (ii) at a purchase price that reasonably reflects the relative value of the
business conducting the Restricted Business. If TN Technologies Holding elects
not to purchase such business or entity, True North may retain and operate such
business or entity. If True North or any of its subsidiaries (other than TN
Technologies Holding) shall acquire any business or entity that is engaging in
the Restricted Business and such business or entity has revenues from the
Restricted Business in excess of 50% of such business' or entity's aggregate
revenues, True North shall offer to TN Technologies Holding the reasonable
opportunity to purchase the business or entity engaged in the Restricted
Business on terms and conditions that are consistent with the purchase of the
business or entity by True North. If TN Technologies Holding elects not to
purchase such business or entity, True North shall sell or otherwise dispose of
the business unit or units of such business or entity that are engaging in the
Restricted Business within a reasonable time. Notwithstanding the foregoing,
neither True North nor any of its subsidiaries shall use any confidential or
other proprietary information of TN Technologies Holding for competitive
purposes, nor shall True North or any of its subsidiaries furnish any such
information to any business or entity that is engaging in the Restricted
Business without the prior written consent of TN Technologies Holding. For
purposes of this Agreement, "Restricted Business" shall mean advertising
services delivered through the Internet or corporate Intranets and digital
communications services dedicated to marketing purposes.
ARTICLE X
ACCESS TO INFORMATION AND SERVICES
Section 10.1 Provision and Retention of Corporate Records. As soon as
practicable after the Closing Date, True North and the Transferring Entities
shall deliver to TN Technologies Holding all Books and Records and all material
information relating to the Transferred Business (collectively, the
"Information"). Such documents shall be retained for a period of at least eight
years following the Closing Date. Notwithstanding the foregoing, in lieu of
retaining any specific Information (as defined below), True North or TN
Technologies Holding may offer in writing to deliver such Information to the
other and, if such offer it not accepted within ninety (90) days, the offered
Information may be destroyed or otherwise disposed of. If a recipient of such
offer shall request in writing prior to the scheduled date for such destruction
or disposal that any of the Information proposed to be destroyed or disposed of
be delivered to such requesting party, the party proposing the destruction or
disposal shall promptly arrange for the delivery of such of the Information as
was requested (at the cost of the requesting party).
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Section 10.2 Access to Information. From and after the Closing Date, True
North, TN Technologies Holding and the Transferring Entities shall afford to
each other and to each other's authorized accountants, counsel and other
designated representatives reasonable access and duplicating rights (with
copying costs to be borne by the requesting party) during normal business hours
to all Books and Records and documents, communications, items and matters
(collectively, "Information") within each other's knowledge, possession or
control relating to the Transferred Assets, the Transferred Business and the
Transferred Employees, insofar as such access is reasonably required by True
North or TN Technologies Holding, as the case may be (and shall use reasonable
efforts to cause persons or firms possessing relevant Information to give
similar access). Information may be requested under this Article 10 for, without
limitation, audit, accounting, claims, Actions, litigation and tax purposes, as
well as for purposes of fulfilling disclosure and reporting obligations and
other business purposes.
Section 10.3 Production of Witnesses and Individuals. From and after the
Closing Date, True North, TN Technologies Holding and the Transferring Entities
shall use reasonable efforts to make available to each other, upon written
request, its officers, directors, employees and agents for fact finding,
consultation and interviews and as witnesses to the extent that any such person
may reasonably be required in connection with any actions in which the
requesting party may from time to time be involved relating to the conduct of
the Transferred Business prior to the Closing Date. Except as otherwise agreed
between the parties, True North and TN Technologies Holding agree to reimburse
each other for reasonable out-of-pocket expenses (but not labor charges or
salary payments) incurred by the other in connection with providing individuals
and witnesses pursuant to this Section 10.3.
Section 10.4 Confidentiality. Each of True North and TN Technologies
Holding shall hold, and shall cause its officers, employees, agents, consultants
and advisors to hold, in strict confidence, unless compelled to disclose by
judicial or administrative process or, in the opinion of its independent, legal
counsel, by other requirements of law, all confidential Information concerning
the other party furnished it by such other party or its representatives pursuant
to this Agreement (except to the extent that such Information can be shown to
have been (a) available to such party on a non-confidential basis prior to its
disclosure by the other party, (b) in the public domain through no fault of such
party or (c) later lawfully acquired from other sources by the party to which it
was furnished), and each party shall not release or disclose such Information to
any other person, except its auditors, attorneys, financial advisors, bankers
and other consultants and advisors who shall be bound by the provisions of this
Section 10.4; provided, however, that after the Acquisition, True North (subject
to Section 9.9) and TN Technologies Holding may use or disclose any confidential
Information related to the Transferred Business. Each party shall be deemed to
have satisfied its obligation to hold confidential Information concerning or
supplied by the other party if it exercises the same care as it takes to
preserve confidentiality for its own similar information.
Section 10.5 Publicity. The parties hereto agree that, from the date
hereof through the Closing Date, no public release or announcement concerning
the transactions contemplated hereby shall be issued by any party without the
prior consent of True North; provided, however, that True
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North and TN Technologies Holding may make internal announcements to its
employees regarding the transactions contemplated hereby.
Section 10.6 Privileged Matters.
------------------
(a) True North and TN Technologies Holding agree that TN Technologies
Holding will maintain, preserve and assert all privileges arising under or
relating to the attorney-client relationship, including but not limited to the
attorney-client and work product privileges, that relate exclusively to the
Retained Liabilities ("Privilege" or Privileges"). True North shall be entitled
to control the assertion or waiver of any and all Privileges in perpetuity. TN
Technologies Holding shall not waive any Privilege which could be asserted under
applicable law without the prior written consent of True North. The rights and
obligations created by this paragraph shall apply to all information as to
which, but for the Acquisition, True North would have been entitled to assert or
did assert the protection of a Privilege ("Privileged Information"), including,
but not limited to, (i) any and all information generated prior to the Closing
Date but which, after the Acquisition, is in the possession of TN Technologies
Holding; (ii) all communications subject to a privilege occurring prior to the
Closing Date between counsel for True North and any person who, at the time of
the communications, was an employee of True North, regardless of whether such
employee is or becomes a TN Technologies Holding employee; and (iii) all
information generated, received or arising after the Closing Date that refers or
relates to Privileged Information generated, received or arising prior to the
Closing Date.
(b) Upon receipt by TN Technologies Holding of any subpoena, discovery
or other request which arguably calls for the production or disclosure of
Privileged Information or if TN Technologies Holding obtains knowledge that any
current or former employee of TN Technologies Holding has received any subpoena,
discovery or other request which arguably calls for the production or disclosure
of Privileged Information, TN Technologies Holding shall promptly notify True
North of the existence of the request and shall provide True North a reasonable
opportunity to review the Privileged Information and at True North's cost and
expense to assert any rights it may have under this Section 10.5 or otherwise to
prevent the production or disclosure of Privileged Information. TN Technologies
Holding will not produce or disclose any information arguably covered by a
Privilege under this Section 10.5 unless (a) True North has provided its express
written consent to such production or disclosure or (b) a court of competent
jurisdiction has entered a final, nonappealable order finding that the
information is not entitled to protection under any applicable privilege.
(c) True North's transfer of Books and Records and other information
to TN Technologies Holding, and True North's agreement to permit TN Technologies
Holding to possess Privileged Information occurring or generated prior to the
formation of TN Technologies Holding, are made in reliance on TN Technologies
Holding's agreement, as set forth in this Section 10.5, to maintain the
confidentiality of Privileged Information and to assert and maintain all
applicable Privileges. The access to information being granted pursuant to
Section 10.2 hereof, the agreement to provide witnesses and individuals pursuant
to Section 10.3 hereof and the transfer of Privileged Information to TN
Technologies Holding pursuant to this Agreement shall not be deemed
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a waiver of any Privilege that has been or may be asserted under this Section
10.5 or otherwise. Nothing in this Agreement shall operate to reduce, minimize
or condition the rights granted to True North in, or the obligations imposed
upon TN Technologies Holding by, this Section 10.5.
ARTICLE XI
EMPLOYEE MATTERS: LABOR MATTERS
Section 11.1 Employment. Schedule 11.1 lists the Transferred Employees.
Section 11.2 Welfare Plans. TN Technologies anticipates adopting an
employee stock option plan, an employee stock purchase plan and a 401(k) plan.
Section 11.3 Preservation of Rights to Amend or Terminate Plans. No
provisions of this Agreement, including, without limitation, the agreement of
True North or TN Technologies Holding that it will make a contribution or
payment to or under any plan referred to herein for any period, shall be
construed as a limitation on the right of True North or TN Technologies Holding
to amend such plan or terminate its participation therein which True North or TN
Technologies Holding would otherwise have under the terms of such plan or
otherwise.
Section 11.4 Reimbursement. TN Technologies Holding and True North
acknowledge that each may incur costs and expenses (including, without
limitation, contributions to plans and the payment of insurance premiums)
pursuant to any of the employee benefit or compensation plans, programs or
arrangements which are, as set forth in this Agreement, the responsibility of
the other party. Accordingly, True North and TN Technologies Holding agree to
reimburse each other, as soon as practicable but in any event within thirty (30)
days of receipt from the other party of appropriate verification, for all such
costs and expenses reduced by the amount of any tax reduction or recovery of tax
benefit realized by True North or TN Technologies Holding, as the case may be,
as an indemnitee in respect of the corresponding payment made by it, as
determined pursuant to Section 8.4 hereof. All liabilities and obligations
retained, assumed or indemnified by TN Technologies Holding pursuant to this
Agreement shall in each case be deemed to be Assumed Liabilities and all
liabilities and obligations retained, assumed or indemnified by True North
pursuant to this Agreement shall in each case be deemed to be Retained
Liabilities and, in each case, shall be subject to the indemnification
provisions set forth in Article 8 hereof.
Section 11.5 Limitation on Enforcement. This Article 11 is an agreement
solely between True North and TN Technologies Holding. Nothing in this Article
11, whether express or implied, confers upon any employee of True North or TN
Technologies Holding, any Transferred Employee, any Employee, any collective
bargaining representative of any such person, any former employee of True North,
any beneficiary of an Employee, Transferred Employee or former employee of True
North or any other person, any rights or remedies, including, but not limited to
(a) any right to employment or recall, (b) any right to continued employment for
any specified period or (c) any right
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to claim any particular compensation, benefit or aggregation of benefits, of any
kind or nature whatsoever, as a result of this Article 11.
Section 11.6 Employment Solicitation. True North and TN Technologies
Holding acknowledge and agree that both such parties shall adhere to the
Employment Solicitation Policy of True North, a copy of which is attached hereto
as Exhibit F.
ARTICLE XII
INSURANCE
Section 12.1 General. True North shall keep in effect all policies under
its Insurance Program in effect as of the date hereof insuring the Transferred
Assets and operations of the Transferred Business until the end of the day on
the Closing Date, unless TN Technologies Holding shall have earlier obtained
appropriate coverage and notified True North in writing to that effect. TN
Technologies Holding understands that True North is terminating coverage under
its Insurance Program with respect to the Transferred Assets and Transferred
Business as of such time and that it is the responsibility of TN Technologies
Holding to obtain insurance policies which will allow TN Technologies Holding to
make claims for any occurrence (an "Occurrence" as defined in the applicable
insurance policy or policies in the Insurance Program) on or prior to the
Closing Date. True North shall, if so requested by TN Technologies Holding, use
reasonable efforts to assist TN Technologies Holding in obtaining its own
initial insurance coverage, but shall not be obligated to obtain or pay for such
insurance, and if TN Technologies Holding is unable to obtain its own policies,
True North will use reasonable efforts to obtain coverage for TN Technologies
Holding, at TN Technologies Holding's expense, under the Insurance Program
maintained by True North for claims made for Occurrences relating to the
Transferred Business on or prior to the Closing Date ("TN Technologies Holding
Paid Coverage"). Following the Closing Date, each of True North and TN
Technologies Holding shall cooperate with and assist the other party in making
claims under insurance policies and collecting recoveries.
Section 12.2 Certain Insured Claims. True North agrees that with respect
to (a) claims made prior to the Closing Date by True North and (b) claims for
Occurrences which are covered by TN Technologies Holding Paid Coverage, it will
use its reasonable efforts to obtain Recoveries for TN Technologies Holding and
that it will reimburse TN Technologies Holding for any Recovery obtained by it
pursuant to such claims; provided, however, that notwithstanding the foregoing,
if True North has made a claim or claims under an insurance policy which is not
to be paid to TN Technologies Holding pursuant to this Section 12.2 and a claim
or claims which are to be paid to TN Technologies Holding pursuant to this
Section 12.2 and the amount of the Recovery for such claims is limited by the
amount of coverage provided by such policy, True North may use its reasonable
discretion in allocating the Recovery between it and TN Technologies Holding for
such claims. TN Technologies Holding shall pay all costs incurred by True North
after the Closing Date in making any claim pursuant to this Section 12.2,
including the salaries of its officers and employees based on the portion of
time spent on such claims and that such costs incurred in pursuing a claim
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may be deducted from any Recovery for such claim and TN Technologies Holding
agrees to make available to True North such of its employees as True North may
reasonably request as witnesses or deponents in connection with True North's
management of claims, at TN Technologies Holding's sole cost and expense.
ARTICLE XIII
TERMINATION
Section 13.1 Termination. Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date:
(a) by mutual written consent of the parties hereto;
(b) by TN Technologies Holding or the Limited Partners, if they
are not in material breach of its obligations under this Agreement and there has
been a breach of any representation, warranty, covenant or agreement contained
or incorporated by reference in this Agreement on the part of True North or the
Transferring Entities and such breach has not been cured within ten (10)
business days after written notice to True North or the Transferring Entities,
as the case may be (provided that no cure period shall be required for a breach
which by its nature cannot be cured);
(c) by True North or the Transferring Entities, as the case may
be, if it is not in material breach of its respective obligations under this
Agreement and there has been a breach of any representation, warranty, covenant
or agreement included in this Agreement on the part of TN Technologies Holding
or the Limited Partners and such breach has not been cured within ten (10)
business days after written notice to the Limited Partners, the Stockholders and
TN Technologies Holding (provided that no cure period shall be required for a
breach which by its nature cannot be cured); or
(d) by any party hereto, if the Closing does not occur on or
prior to January 15, 1997.
Section 13.2 Return of Documents and Other Material. In the event of
termination pursuant to Section 13(b), (c) or (d), written notice thereof shall
forthwith be given by the terminating party to the other parties hereto and the
transactions contemplated by this Agreement shall be terminated, without further
action by any party. If the transactions contemplated by this Agreement are
terminated as provided herein, the parties shall at the written request of any
other party hereto return all documents and other material and all copies
thereof received from any other party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to such party.
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Section 13.3 Survival. If this Agreement is terminated and the
transactions contemplated hereby are abandoned as described in this Section 13,
this Agreement shall become void and of no further force or effect, except for
the provisions of, (a) Section 5.24 relating to finder's fees and broker's fees,
(b) Sections 10.4 and 10.5 relating to confidentiality and publicity,
respectively, (c) Section 15.2 relating to expenses and (d) this Article 13.
Nothing in this Article 13 shall be deemed to release either party from any
liability for any breach by such party of the terms and provisions of this
Agreement or to impair the right of any party to compel specific performance by
any other party of its obligations under this Agreement.
ARTICLE XIV
DISPUTE RESOLUTION
Section 14.1 Binding Arbitration.
(a) Except as set forth in Section 14.2, (a) any dispute,
controversy or claim arising in connection with this Agreement, shall be settled
by binding arbitration if so requested by any party hereto pursuant to paragraph
(b) below. The arbitration shall be conducted by three arbitrators, who shall be
appointed pursuant to the rules of the American Arbitration Association (the
"AAA"). The arbitration shall be held in Chicago, Illinois and shall be
conducted in accordance with the commercial arbitration rules of the AAA, except
that the rules set forth in this Section 14.1 shall govern such arbitration to
the extent they conflict with the rules of the AAA.
(b) Upon written notice by a party to the other parties of a
request for arbitration hereunder, the parties shall use their commercially
reasonable efforts to cause the arbitration to be conducted in an expeditious
manner. All other procedural matters shall be within the discretion of the
arbitrators. In the event a party fails to comply with the procedures in any
arbitration in a manner deemed material by the arbitrators, the arbitrators
shall fix a reasonable period of time for compliance and, if the party does not
comply within said period, a remedy deemed just by the arbitrators, including an
award of default, may be imposed.
(c) The determination of the arbitrators shall be final and
binding on the parties. Judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction. The parties shall each be
responsible for their own expenses in connection with such arbitration,
including, without limitation, counsel fees and fees of experts; provided,
however, that the parties shall share equally in the expense of the arbitrators
and of the AAA.
(d) Notwithstanding anything contained herein to the contrary,
the arbitrators shall not be limited as to the form of relief or remedy provided
pursuant to this Section 14.1.
Section 14.2 Injunctive Relief. The parties hereto acknowledge that
should they breach any of their respective obligations under Sections 10.4, 10.5
and 10.6 such other parties hereto may suffer irreparable injury for which money
damages may be inadequate, and therefore consent to the
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enforcement of such obligations by means of temporary or permanent injunction of
any court having jurisdiction thereof, and each party hereto shall be entitled
to assert any claim it may have for damages resulting from breach of such
obligations in addition to seeking injunctive relief. In addition, if True North
is in violation of its Non-Competition Agreement pursuant to Section 9.9, TN
Technologies Holding may suffer irreparable injury for which money damages may
be inadequate, and therefore consent to the enforcement of such obligations by
means of temporary or permanent injunction of any court having jurisdiction
thereof, and each party hereto shall be entitled to assert any claim it may have
for damages resulting from breach of such obligations in addition to seeking
injunctive relief.
ARTICLE XV
GENERAL PROVISIONS
Section 15.1 Complete Agreement. This Agreement, including the
Related Agreements, Schedules and Exhibits and the agreements and other
documents referred to herein and other writings exchanged between the parties
hereto, shall constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Section 15.2 Expenses. Except as otherwise provided in this
Agreement, any Related Agreement or any other agreement being entered into by
the parties hereto pursuant to this Agreement, the parties hereto shall pay
their own costs and expenses incurred in connection with the Reorganization
(whether or not payable as of the Closing Date) and in connection with the
consummation of the transactions contemplated by this Agreement. Such costs and
expenses shall include, without limitation, investment banking, legal,
accounting and printing costs and expenses and transfer taxes.
Section 15.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, regardless of
the laws that might otherwise govern after applicable principles of conflicts of
laws thereof. Each of the parties hereto irrevocably consents to the
nonexclusive jurisdiction and venue of any court within Chicago, State of
Illinois, in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be served
upon them in any manner authorized by the laws of the State of Illinois for such
persons and waives and covenants not to assert or plead any objection which they
might otherwise have to such jurisdiction, venue and such process.
Section 15.4 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (a) on the date of service if served personally on the
party to whom notice is given, (b) on the day of transmission if sent via
facsimile transmission to the facsimile number given below, provided telephonic
confirmation of receipt is obtained promptly after completion of transmission,
(c) on the business day after delivery to an overnight courier service or the
Express mail service maintained by the United States Postal
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Service, provided receipt of delivery has been confirmed, or (d) on the fifth
day after mailing, provided receipt of delivery is confirmed, if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, properly addressed and return-receipt requested, to
the party as follows:
If to True North True North Communications Inc.
or a Transferring Entity: ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Director of Corporate Development
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to TN Technologies Holding: TN Technologies Holding Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chairman and Chief Executive Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Limited Partners: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇: ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇
Kraft Enterprises LTD: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
Any party may change its address by giving the other party written notice of its
new address in the manner set forth above.
Section 15.5 Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of the parties.
Section 15.6 Successors and Assigns. This Agreement and the rights and
obligations hereunder shall not be assignable or transferable by the parties
hereto (including by operation of law in connection with a merger, or sale of
substantially all the assets, of True North, a Transferring Entity or TN
Technologies Holding); provided, however, that True North, a Transferring Entity
and TN Technologies Holding may assign their rights hereunder to a majority-
owned subsidiary of True North, a Transferring Entity or TN Technologies Holding
without the prior written consent of the
-46-
Limited Partners; provided, further, however, that no such assignment shall be
permitted if it results in a violation of Section 6.4 Any attempted assignment
in violation of this Section 15.6 shall be void.
Section 15.7 No Third Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing herein
expressed or implied shall give or be construed to give to any person, other
than the parties hereto and such assigns, any legal or equitable rights
hereunder.
Section 15.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and same instrument.
Section 15.9 Interpretation. The Article and Section headings contained
in this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. Whenever any words are used herein in the
masculine gender, they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply.
Section 15.10 Annexes, Etc. The Schedules and Exhibits shall be construed
with and as an integral part of this Agreement to the same extent as if the same
had been set forth verbatim herein.
Section 15.11 Legal Enforceability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the day and year first above written.
TN TECHNOLOGIES HOLDING INC.
By:
------------------------------------
Name:
Title:
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TRUE NORTH COMMUNICATIONS INC.
By:
----------------------------------
Name:
Title:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
KRAFT ENTERPRISES LTD
By:
----------------------------------
Name:
Title:
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▇▇▇▇▇, CONE & ▇▇▇▇▇▇▇ ADVERTISING, INC.
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇, CONE & ▇▇▇▇▇▇▇, INC.
By:
-----------------------------------
Name:
Title:
R/GA MEDIA GROUP, INC.
By:
-----------------------------------
Name:
Title:
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SCHEDULE 2.3
CONTRIBUTION NUMBER OF SHARES
------------------------------------------------------- ----------------
True North Communications Inc. ........................ 1,326,728
Transferring Entities
▇▇▇▇▇, Cone & ▇▇▇▇▇▇▇ Advertising, Inc. ............... 178,740
▇▇▇▇▇, Cone & ▇▇▇▇▇▇▇, Inc. ........................... 298,258
R/GA Media Group, Inc. ................................ 487,960
EXCHANGE
True North Communications Inc. 2,802,114
---------
Total............................................. 5,093,800
=========
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