EXHIBIT 2.1.
REORGANIZATION AGREEMENT
DATED AS OF APRIL 7, 2000
BY AND BETWEEN
VOYAGER INTERNET GROUP . COM
AND
VOYAGER GROUP, INC
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS AND INTERPRETATION -2-
1.1. Definitions -2-
1.2. Interpretation -9-
ARTICLE II - THE DISTRIBUTION -10-
2.1. Issuance and Delivery of VYGP-VYGP Shares -10-
2.2. Distribution of VYGP Shares -10-
2.3. VIGC majority Shareholders Action -11-
2.4. Additional Approvals -11-
ARTICLE III - FORMATION OF VYGP/CORPORATE GOVERNANCE -11-
3.1. Certificate of Incorporation of VYGP -11-
3.2. By-laws -11-
3.3. Election of Majority Shareholders -11-
3.4. Appointment of Officers -12-
3.5. Capital Stock of VYGP -12-
3.6. Name Reservations and Registrations -12-
3.7. Foreign Qualifications -12-
3.8. Corporate Seal -12-
3.9. Adoption of Stockholders Rights Plan -12-
ARTICLE IV - ASSET SEPARATION -13-
4.1. Transfer of Assets -13-
4.2. Assumption of Liabilities -16-
4.3. Retained Assets -17-
4.4. Retained Liabilities -18-
4.5. Termination of Existing Intercompany Agreements -18-
4.6. Shared Contracts -18-
ARTICLE V - ASSET SEPARATION CLOSING MATTERS -19-
5.1. Delivery of Instruments of Conveyance -19-
5.2. Delivery of Other Agreements -19-
5.3. Provision of Corporate Records -19-
ARTICLE VI - NO REPRESENTATIONS AND WARRANTIES -19-
ARTICLE VII - CERTAIN COVENANTS -20-
7.1. Third Party Consents -20-
7.2. Material Governmental Approvals and Consents -20-
7.3. Non-Assignable Contracts -20-
7.4. Novation of Assumed Liabilities -21-
7.5. Further Assurances -21-
7.6. Nominee Shares -22-
7.7. Collection of Accounts Receivable -23-
7.8. Election of VYGP Majority Shareholders -23-
7.9. Late Payments -23-
7.10. Registration and Listing -23-
7.11. No Noncompetition; Nonhiring; Nonsolicitation -24-
7.12. Litigation -24-
7.13. VYGP Bank Accounts -25-
7.14. Signs; Use of Company Name -25-
7.15. Reasonable Efforts -25-
7.16. Use of Transferred Intellectual Property -26-
ARTICLE VIII - CONDITIONS TO THE DISTRIBUTION -26-
8.1. Approval by VIGC Majority Shareholders -26-
8.2. Receipt of IRS Private Letter Tax Ruling -26-
8.3. Compliance with State and Foreign Securities
and "Blue Sky" Laws -26-
8.4. SEC Filings and Approvals -27-
8.5. Filing and Effectiveness of Registration Statement;
No Stop Order -27-
8.6. Dissemination of Information to VIGC Stockholders -27-
8.7. Approval of NASDAQ Listing Application -27-
8.8. Receipt of Viability and Fairness Opinion of
Financial Advisor -27-
8.9. Operating Agreements -27-
8.10. Resignations -27-
8.11. Consents -27-
8.12. No Actions -28-
8.13. Consummation of Pre-Distribution Transactions -28-
8.14. No Other Events -28-
8.15. Satisfaction of Conditions -28-
ARTICLE IX - EMPLOYEES AND EMPLOYEE BENEFIT MATTERS -28-
9.1. Employment of VYGP Employees -28-
9.2. Severance -28-
9.3. Withdrawal from Participation in VIGC Plans
and Establishment of VYGP Plans -29-
9.4. Transfer of Savings Plan Account Balances -29-
9.5. Welfare Benefits Provided Under VYGP Plans -29-
9.6. Stock Purchase Plans -30-
9.7. Deferred Compensation Plan -30-
9.8. Stock Options -31-
9.9. Workers' Compensation -32-
9.10. WARN Act -32-
9.11. Information to be provided to VIGC -32-
ARTICLE X - INSURANCE MATTERS -32-
10.1. Insurance Prior to the Distribution Date -32-
10.2. Ownership of Existing Policies and Programs -33-
10.3. Procurement of Insurance for VYGP -33-
10.4. Acquisition and Maintenance of Post-Distribution VYGP
Insurance Policies and Programs -33-
10.5. VYGP Directors' and Officers' Insurance -34-
10.6. Post-Distribution Insurance Claims Administration -34-
10.7. Non-Waiver of Rights to Coverage -35-
10.8. Scope of Affected Policies of Insurance -35-
ARTICLE XI - EXPENSES -35-
11.1. Allocation of Expenses -35-
ARTICLE XII - INDEMNIFICATION -36-
12.1. Release of Pre-Distribution Claims -36-
12.2. Indemnification by VYGP -38-
12.3. Indemnification by VIGC -39-
12.4. Applicability of and Limitation on Indemnification -40-
12.5. Adjustment of Identifiable Losses -40-
12.6. Procedures for Indemnification of Third Party Claims -41-
12.7. Procedures for Indemnification of Direct Claims -43-
12.8. Contribution -44-
12.9. Remedies Cumulative -44-
12.10. Survival -44-
ARTICLE XIII - DISPUTE RESOLUTION -44-
13.1. Agreement to Arbitrate -44-
13.2. Escalation and Mediation -45-
13.3. Procedures for Arbitration -45-
13.4. Selection of Arbitrator -46-
13.5. Hearings -47-
13.6. Discovery and Certain Other Matters -47-
13.7. Certain Additional Matters -48-
13.8. Continuity of Service and Performance -49-
13.9. Law Governing Arbitration Procedures -49-
13.10. Choice of Forum -49-
ARTICLE XIV - ACCESS TO INFORMATION AND SERVICES -49-
14.1. Agreement for Exchange of Information -49-
14.2. Ownership of Information -50-
14.3. Compensation for Providing Information -50-
14.4. Retention of Records -50-
14.5. Limitation of Liability -50-
14.6. Production of Witnesses -50-
14.7. Confidentiality -51-
14.8. Privileged Matters -51-
ARTICLE XV - MISCELLANEOUS -52-
15.1. Entire Agreement -52-
15.2. Choice of Law and Forum -53-
15.3. Amendment -53-
15.4. Waiver -53-
15.5. Partial Invalidity -53-
15.6. Execution in Counterparts -53-
15.7. Successors and Assigns -53-
15.8. Third Party Beneficiaries -54-
15.9. Notices -54-
15.10. Performance -55-
15.11. Force Majeure -55-
15.12. No Public Announcement -55-
15.13. Termination -55-
EXHIBITS
Exhibit 99 - Information Statement -Business Summary-Voyager Internet ▇▇▇▇▇.▇▇▇
Exhibit 10.8 - Voyager Group Inc Subsidiary -Earn at ▇▇▇▇.▇▇▇ -Business Summary
Exhibit 10.6 - Voyager Internet ▇▇▇▇▇.▇▇▇ - Intellectual Property License
Agreement
Exhibit 10.7 - Voyager Group Inc - Intellectual Property License
Agreement
Exhibit 10.4 - Shared Services Agreement
Exhibit 10.5 - Tax Sharing and Disaffiliation Agreement
Exhibit 03.2.1 - Indemnification Agreement Voyager Group Inc
Exhibit 10.1 - 1999-Stock Incentive Plan and amendments of Voyager
Group Inc
Exhibit 10.2 - Form of Common Stock Option & Notice of Exercise -
Voyager Group Inc.
Exhibit 10.3 - Preferred Stock Purchase Agreement - Voyager
Group Inc
Exhibit 10.3.1 - Certificate of Designation-Preferred Stock -Voyager
Group Inc
Exhibit 10.3.2 - Shareholders Rights Agreement - Voyager Group Inc
Exhibit 99.2- F - Balance Sheet Assets
REORGANIZATION AGREEMENT
REORGANIZATION AGREEMENT, dated as of February 9, 2000 by and between
Voyager Internet Group. Com, a Nevada corporation ("VIGC"), and Voyager Group,
Corporation, a Delaware corporation ("VYGP") and, as of the date hereof, a
wholly owned Subsidiary (as hereinafter defined) of VIGC.
WHEREAS, VIGC provides, inter alia, Internet Holding Company engaged in
managing and operating a network of business-to-business e commence companies.
(as more fully described in Exhibit 99 hereto, the "Voyager Internet ▇▇▇▇▇.▇▇▇
Business");
WHEREAS, the Majority Shareholders of VIGC has determined that it would
be advisable and in the best interests of VIGC and its stockholders for VIGC's
existing business into two independent business; WHEREAS, VIGC has agreed to
transfer and assign, or cause to be transferred and assigned, to VYGP
substantially all of the assets and properties of the VYGP Business held by VIGC
and its Subsidiary Earn at ▇▇▇▇.▇▇▇,( more fully described in Exhibit 10.8
hereto.) and VYGP has agreed to assume, or cause to be assumed its Subsidiary
Earn at ▇▇▇▇.▇▇▇, certain liabilities and obligations arising out of or relating
to the VYGP Business (collectively, the "Contribution");
WHEREAS, the Majority Shareholders of VIGC has further determined that
it is appropriate and desirable on the terms and conditions hereby, to cause to
file a Registration Statement and concurrently for VIGC to distribute all of the
outstanding shares on a pro-rata basis to the holders of record (the "VIGC
Common Stock, Par Value $0.001") all the outstanding shares of VYGP Common Stock
owned directly or indirectly by VIGC. (the Distribution");
WHEREAS, for federal income tax purposes, the Contribution and
Distribution are intended to qualify for tax-free treatment under Sections 355
and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the "Code");
and
WHEREAS, it is appropriate and desirable to set forth the principal
corporate transactions required to effect the Contribution, Distribution,
Separation and Registration and certain other Ancillary Agreements that will
govern the relationship of VIGC and VYGP following the Distribution;
NOW, THEREFORE, the parties intending to be legally bound agree as
follows:
ARTICLE I DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS.
In this Agreement, the following terms have the meanings specified or
referred to in this Section 1.1:
"ACTION" means any action, claim, suit, arbitration, inquiry, subpoena,
discovery request, proceeding, or investigation by or before any court or grand
jury, any governmental or other regulatory or administrative entity, agency or
commission or any arbitration tribunal.
"AFFILIATE", means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with such Person. For the purpose of this definition, the term "control" means
the power to direct the management of an entity, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
term "controlled" has the meaning correlative to the foregoing. After the
Distribution Date, VYGP and VIGC shall not be deemed to be under common control
for purposes hereof due solely to the fact that VYGP and VIGC have common
stockholders.
"AGENT mean the distribution agent appointed to distribute to the
shareholders of VIGC the Shares of VYGP Common Stock held by VIGC pursuant to
the distribution.
"APPLICABLE DEADLINE" has the meaning set forth in Section 13.3(b).
"ARBITRATION ACT" means the United States Arbitration Act, 9 U.S.C.
1-14, as the same may be amended from time to time.
"ARBITRATION DEMAND DATE" has the meaning specified in Section 13.3(a).
"ARBITRATION DEMAND NOTICE" has the meaning specified in Section
13.3(a).
"ASSET TRANSFER DATE" means the date determined by the Majority
Shareholders of VIGC as the date on which the Transferred Assets are transferred
to VYGP.
"ASSUMED ACTIONS" has the meaning specified in Section 7.12(a).
"ASSUMED LIABILITIES" has the meaning specified in Section 4.2.
"BALANCE SHEET" has the meaning specified in Section 4.1(a).
" MAJORITY SHAREHOLDERS" means the Majority Shareholders of the
referenced corporation or any duly authorized committee's thereof.
"CODE" has the meaning specified in the sixth paragraph of this
Agreement.
"COMBINED VALUE" has the meaning specified in Section 9.8(a).
"CONTRACTS" has the meaning specified in Section 4.1(g).
"CONTRIBUTION" has the meaning specified in the fourth paragraph of
this Agreement.
"CONVEYANCING INSTRUMENTS" has the meaning specified in Section 5.1.
"COPYRIGHTS," means United States and foreign copyrights, both
registered and unregistered, along with the registrations and applications to
register any such copyrights.
"DISTRIBUTION" has the meaning specified in the fifth paragraph of this
Agreement.
"DISTRIBUTION DATE" means the date determined by the Majority
Shareholders of VIGC as the date on which the VYGP Shares are distributable to
holders of record of VIGC Common Stock as of the Record Date.
"VYGP" has the meaning specified in the first paragraph of this
Agreement.
"VYGP BUSINESS" has the meaning specified in the second paragraph of
this Agreement.
"VYGP COMMON STOCK" has the meaning specified in the fifth paragraph of
this Agreement.
"VYGP DEFERRED COMPENSATION PLAN" has the meaning specified in Section
9.3(b).
"VYGP DISTRIBUTABLE SHARE" means one (1) VYGP Share.
"VYGP INDEMNIFIED PARTIES" has the meaning specified in Section 12.3.
"VYGP SAVINGS PLAN" has the meaning specified in Section 9.3(b).
"VYGP SHARE" means one share of VYGP Common Stock.
"VYGP VALUE" has the meaning specified in Section 9.8(a).
"ESCALATION NOTICE" has the meaning specified in Section 13.2(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
(together with the rules and regulations promulgated thereunder).
"EXPENSES" means any and all expenses incurred in connection with
investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against hereunder (including court filing
fees, court costs, arbitration fees or costs, witness fees, and
reasonable fees and disbursements of legal counsel, investigators, expert
witnesses, consultants, accountants and other professionals).
"FOREIGN EXCHANGE RATE" means, with respect to any currency other than
United States dollars, as of any date of determination, the average of the
opening bid and asked rates on such date at which such currency may be exchanged
for United States dollars as quoted by Bank of America, N.A.
"GOVERNMENTAL AUTHORITY" means any foreign, federal, state, local or
other government, governmental, statutory or administrative authority,
regulatory body or commission or any court, tribunal or judicial or arbitral
body.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the regulations promulgated thereunder.
"INDEMNIFIED PARTY" has the meaning specified in Section 12.5(a).
"INDEMNIFYING PARTY" has the meaning specified in Section 12.5(a).
"INDEMNITY PAYMENT" has the meaning specified in Section 12.5(a).
"INFORMATION" has the meaning specified in Section 14.1(a).
"INFORMATION STATEMENT" has the meaning specified in Section 7.10(a).
"INSURANCE AMOUNT" has the meaning specified in Section 10.5.
"INSURANCE CHARGES" has the meaning specified in Section 10.6.
"INSURANCE POLICIES" means the insurance policies written by insurance
carriers unaffiliated with VIGC pursuant to which VYGP or one or more of its
Subsidiaries (or their respective officers or directors) will be insured parties
after the Distribution Date.
"INSURANCE PROCEEDS" means those monies (i) received by an insured from
an insurance carrier, (ii) paid by an insurance carrier on behalf of the insured
or (iii) received from any third Person in the nature of insurance, contribution
or indemnification in respect of any Liability, in each such case net of any
applicable premium adjustments (including reserves and retrospectively-rated
premium adjustments) and net of any costs or expenses (including allocated costs
of in-house counsel and other personnel) incurred in the collection thereof.
"INSURED CLAIMS" means those Liabilities that, individually or in the
aggregate, are covered within the terms and conditions of any of the VIGC
Policies, whether or not subject to deductibles, co-insurance, uncollectability,
premium adjustments (including reserves), retrospectively-rated premium
adjustments or retentions, but only to the extent that such Liabilities are
within applicable VIGC Policy limits, including aggregates and deductibles.
"INTELLECTUAL PROPERTY LICENSE AGREEMENTS" means the VIGC and VYGP
intellectual property license agreements Exhibits 10.6 and 10.7 hereto.
"INTERCOMPANY AGREEMENTS" means any Contract between VIGC and VYGP
entered into prior to the Distribution Date.
"INTERFACES," means software that creates interfaces between the
Software and third-party software programs.
"INVESTORS" has the meaning specified in Section 3.3.
"IRS" means the Internal Revenue Service.
"LIABILITY" means any and all debts, liabilities and obligations,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising (unless otherwise
specified in this Agreement), including all costs and expenses relating thereto,
and including, without limitation, those debts, liabilities and obligations
arising under any law, rule, regulation, Action, threatened Action, order or
consent decree of any Governmental Authority or any award of any arbitrator of
any kind, and those arising under any contract, commitment or undertaking.
"LOSSES" means any and all losses, costs, obligations, liabilities,
settlement payments, awards, judgments, fines, penalties, damages, fees,
expenses, deficiencies, claims or other charges, absolute or contingent, matured
or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown
(including, without limitation, the costs and expenses of any and all Actions,
threatened Actions, demands, assessments, judgments, settlements and compromises
relating thereto and attorneys' fees and any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending against any such
Actions or threatened Actions).
"MATERIAL GOVERNMENTAL APPROVALS AND CONSENTS" means any material
notices, reports or other filings to be made with or to, or any consents,
registrations, approvals, permits, clearances or authorizations to be obtained
from, any Governmental Authority.
"METHODOLOGIES" means methodologies, architectures, processes,
algorithms, and technologies, include, without limitation, all related trade
secrets and know-how.
"NASDAQ" means The NASDAQ Stock Market's National Market System or any
successor thereto.
"NON-PERMITTED NAMES" has the meaning specified in Section 7.14.
"OPERATING AGREEMENTS" means the Intellectual Property License
Agreements, the Tax Sharing Agreement, the Shared Services Agreement and any
other agreement regarding the ongoing business and service relationships between
VIGC and VYGP and their respective Subsidiaries and Affiliates following the
Distribution.
"PARTY" means VIGC or VYGP.
"PATENTS," means United States and foreign patents and applications for
patents, including any continuations, continuations-in-part, divisions,
renewals, reissues, and extensions thereof.
"PERSON" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization, or Governmental Authority.
"PERSONAL PROPERTY LEASES" has the meaning specified in Section 4.1(e).
"PRIME RATE" means the rate that Bank of America, N.A. (or any
successor thereto or other major money center commercial bank agreed to by the
Parties) announces from time to time as its prime-lending rate, as in effect
from time to time.
"PRIVILEGE" OR "PRIVILEGES" has the meaning specified in Section
14.8(a).
"PRIVILEGED INFORMATION" has the meaning specified in Section 14.8(a).
"PURCHASE AGREEMENT" has the meaning specified in Section 3.3.
"REAL ESTATE LEASES" has the meaning specified in Section 4.1(d).
"RECEIVABLES" has the meaning specified in Section 4.1(b)(i).
"RECORD DATE" means the date determined by the Majority Shareholders of
VIGC as the record date for determining stockholders of VIGC entitled to receive
shares of VYGP Common Stock in the Distribution.
"REGISTRATION STATEMENT" has the meaning specified in Section 7.10(a).
"RETAINED ASSETS" has the meaning specified in Section 4.3.
"RETAINED BUSINESS" means those portions of the business of VIGC that
are not part of the VYGP Business.
"RETAINED LIABILITIES" has the meaning specified in Section 4.4.
"RIGHTS PLAN" has the meaning specified in Section 3.9.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended (together
with the rules and regulations promulgated thereunder).
"SECURITY INTEREST" means any mortgage, security interest, pledge,
lien, charge, claim, option, right to acquire, voting or other restriction,
right-of-way, covenant, condition, easement, encroachment, restriction on
transfer or other encumbrance of any nature whatsoever.
"SHARED CONTRACT" means a Contract with a third Person that directly
benefits both VIGC and VYGP.
"SHARED CONTRACTUAL LIABILITIES" mean Liabilities in respect of Shared
Contracts.
"SHARED SERVICES AGREEMENT" means the shared service agreement in
substantially the form of Exhibit 10.4 hereto.
"SOFTWARE" means computer software programs, in source code and object
code form, including, without limitation, all related source diagrams, flow
charts, specifications, documentation and all other materials and documentation
necessary to allow a reasonably skilled third party programmer or technician to
maintain, support or enhance the Software.
"SUBSIDIARY" means, when used with reference to any Person, any
corporation or other organization whether incorporated or unincorporated of
which at least a majority of the securities or interests having by the terms
thereof ordinary voting power to elect at least a majority of the Majority
Shareholders or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such Person or by any one or more of its Subsidiaries, or by such Person and
one or more of its Subsidiaries; provided, however, that no Person that is not
directly or indirectly wholly-owned by any other Person shall be a Subsidiary of
such other Person unless such other Person controls, or has the right, power or
ability to control, that Person.
"TAX" (and, with correlative meaning, "Taxes" and "Taxable") means:
( i ) any federal, state, local or foreign net income, gross
income, gross receipts, windfall profit, severance, property,
production, sales, use, license, excise, franchise,
employment, payroll, withholding, alternative or add-on
minimum, ad valorem, value-added, transfer, stamp, or
environmental tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest or penalty,
addition to tax or additional amount imposed by any
Governmental Authority; and
( ii ) any Liability of either Party for the payment of
amounts with respect to payments of a type described in clause
( i ) as a result of being a member of an affiliated,
consolidated, combined or unitary group, or as a result of any
obligation of either Party under any Tax sharing arrangement
or Tax indemnity arrangement.
"TAX SHARING AGREEMENT" means the Tax Sharing and Disaffiliation
Agreement in substantially the form of Exhibit 10.5 hereto.
"THIRD PARTY CLAIM" has the meaning specified in Section 12.6(a).
"THIRD PARTY CONSENTS" has the meaning specified in Section 7.1.
"TRADEMARKS" has the meaning specified in Section 4.1(m).
"TRANSFER AGENT" means Certified Share Transfer, Ltd., the transfer
agent appointed by VIGC to distribute shares of VYGP Common Stock pursuant to
the Distribution.
"TRANSFERRED ACTIONS" has the meaning specified in Section 7.12(b).
"TRANSFERRED ASSETS" has the meaning specified in Section 4.1.
"TRANSFERRED EMPLOYEES" has the meaning specified in Section 9.1.
"TRANSFERRED INTELLECTUAL PROPERTY" has the meaning specified in
Section 4.1(f).
"VIGC" has the meaning specified in the first paragraph of this
Agreement.
"VIGC COMMON STOCK" has the meaning specified in the fifth paragraph of
this Agreement.
"VIGC DEFERRED COMPENSATION PLAN" has the meaning specified in Section
9.7.
"VIGC INDEMNIFIED PARTIES" has the meaning specified in Section
12.2(a).
"VIGC PLANS" has the meaning specified in Section 9.3(a).
"VIGC POLICY" and "VIGC POLICIES" have the meanings specified in
Section 10.2.
"VIGC SAVINGS PLAN" has the meaning specified in Section 9.4.
"VIGC VALUE" has the meaning specified in Section 9.8(b).
"VOTING STOCK" means all of the capital stock of VYGP entitled to vote
generally in the election of directors but excluding any class or series of
capital stock entitled to vote only in the event of dividend arrearages thereon,
whether or not at the time of determination there are any such dividend
arrearages.
1.2. INTERPRETATION. (a) In this Agreement, unless the context clearly
indicates otherwise:
(i) words used in the singular include the plural and words in
the plural include the singular;
(ii) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and
assigns are permitted by this Agreement;
(iii) reference to any gender includes the other gender;
(iv) the word "including" means "including but not limited
to";
(v) reference to any Article, Section, Exhibit or Schedule
means such Article or Section of, or such Exhibit or Schedule
to, this Agreement, as the case may be, and references in any
Section or definition to any clause means such clause of such
Section or definition;
(vi) the words "herein," "hereunder," "hereof," "hereto" and
words of similar import shall be deemed references to this
Agreement as a whole and not to any particular Section or
other provision hereof;
(vii) reference to any agreement, instrument or other document
means such agreement, instrument or other document as amended,
supplemented and modified from time to time to the extent
permitted by the provisions thereof and by this Agreement;
(viii) reference to any law (including statutes and
ordinances) means such law (including all rules and
regulations promulgated there under) as amended, modified,
codified or reenacted in whole or in part, and in effect at
the time of determining compliance or applicability;
(ix) relative to the determination of any period of time,
"from" means "from and including," "to" means "to but
excluding" and "through" means "through and including";
(x) accounting terms used herein shall have the meanings
historically ascribed to them by VIGC and its Subsidiaries
based upon VIGC's internal financial policies and procedures
in effect prior to the date of this Agreement;
(xi) in the event of any conflict between the provisions of
the body of this Agreement and the Exhibits or Schedules
hereto, the provisions of the body of this Agreement shall
control; and
(xii) the titles to Articles and headings of Sections
contained in this Agreement have been inserted for convenience
of reference only and shall not be deemed to be a part of or
to affect the meaning or interpretation of this Agreement.
(b) This Agreement was negotiated by the Parties with the benefit of
legal representation, and any rule of construction or interpretation otherwise
requiring this Agreement to be construed or interpreted against either Party
shall not apply to any construction or interpretation hereof.
ARTICLE II THE DISTRIBUTION
2.1. ISSUANCE AND DELIVERY OF VYGP SHARES. VYGP shall issue to VIGC the
number of VYGP Shares required so that the total number of VYGP Shares held by
VIGC on the Distribution Date is equal to the total number of VYGP Shares
distributable pursuant to Section 2.2. VIGC shall deliver to the Transfer Agent
one or more stock certificates representing all of the VYGP Shares held by VIGC,
together with one or more stock power(s) duly endorsed in blank. The Transfer
Agent will then transfer and distribute such shares in the manner described in
Section 2.2 below.
2.2. DISTRIBUTION OF VYGP SHARES. VYGP shall provide to the Transfer
Agent sufficient certificates in such denominations as the Transfer Agent may
request in order to effect the Distribution. VIGC shall instruct the Transfer
Agent (i) to distribute to all holders of record of VIGC Common Stock as of the
Record Date the VYGP Distributable Share for each share of VIGC Common Stock
outstanding and held of record by such holder as of the Record Date, and (ii) to
deliver to VYGP, as a contribution to VYGP, all of the remaining VYGP Shares, if
any, then held by the Transfer Agent. Any such returned VYGP Shares shall be
canceled immediately by VYGP, and the Majority Shareholders of VYGP shall take
appropriate action so that such returned shares shall not constitute treasury
shares. All of the distributed VYGP Shares shall be validly issued, fully paid,
and non-assessable and shall be free of any preemptive rights.
2.3. VIGC MAJORITY SHAREHOLDERDS ACTION. The Majority Shareholders of
VIGC shall, in its sole discretion, determine the Record Date, the Distribution
Date, and all appropriate procedures in connection with the Distribution. The
Majority Shareholders of VIGC also shall have the right to adjust at any time
prior to the Distribution Date the VYGP Distributable Share. The consummation of
the transactions provided for in this Article II shall be effected only after
the Distribution has been declared by the Majority Shareholders of VIGC and
after all, of the conditions set forth in Article VIII hereof shall have been
satisfied or waived by VIGC.
2.4. ADDITIONAL APPROVALS. VIGC shall cooperate with VYGP in effecting,
and if so requested by VYGP, VIGC shall, as the majority stockholder of VYGP
prior to the Distribution, ratify all actions that are reasonably necessary or
desirable to be taken by VYGP to effectuate, the transactions referenced in or
contemplated by this Agreement in a manner consistent with the terms of this
Agreement.
ARTICLE III FORMATION OF VYGP/CORPORATE GOVERNANCE
3.1. CERTIFICATE OF INCORPORATION OF VYGP. The original Certificate of
Incorporation of VYGP was filed with the Secretary of State of the State of
Delaware on January 11, 1995 an amendment to the Certificate of Incorporation
was filed January 5, 2000 that (i) increased the number of authorized shares of
capital stock to 105,000,000, consisting of 5,000,000 shares of
VYGP preferred stock, par value $0.001 per share, and 100,000,000 shares of VYGP
Common Stock.
3.2. BY-LAWS. The original By-laws of VYGP were adopted on January 11,
1995 by written action of the sole incorporator of VYGP . The original By laws
were Amended July 17, 1996 by the then Board of Directors of VYGP.
3.3 MAJORITY SHAREHOLDERS. The Board of Directors of VYGP, consist of
Messrs. Southerland, Johnson, were elected June of 1999 by written action of
VIGC in its capacity as the sole stockholder of VYGP.
3.4. APPOINTMENT OF OFFICERS. June of 1999 the Board of Directors of
VIGC, Messrs. ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ will resign from their respective
positions as officers VIGC having appointed officers and additional Directors
for the vacancies created by the resignation of Messrs. ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
of VIGC
3.5. CAPITAL STOCK OF VYGP. On February 9, 2000, the Majority
Shareholders of VIGC, by written action, approved the issuance and delivery to
VYGP of a stock certificate evidencing VIGC's ownership of 100 shares of VYGP
Common Stock. On February 9, 2000, the Board of Directors of VYGP issued
11,300,034 additional shares of VYGP Common Stock to VIGC.
3.6. NAME RESERVATIONS AND REGISTRATIONS. VYGP has reserved the name
"VYGP Corporation" in the state of California other than Delaware. VYGP has
registered the name "The Voyager Group Inc".
3.7. FOREIGN QUALIFICATIONS. VYGP has qualified in California and will
qualify in all jurisdictions (other than its place of incorporation) in which it
intends to conduct business.
3.8. CORPORATE SEAL. On January 11, 1995, VYGP by written consent of
the board of Directors approved the form of the corporate seal. Inscribed
thereon is the name "VYGP Corporation" and the words "Corporate Seal, Delaware".
3.9. VYGP ADOPTION HEREIN. February 8, 2000 the Board of Directors of
VYGP met to discuss, among other things, the desirability of adopting varies
Plans, Agreements, and shareholder rights. February 8, 2000 Board of Directors
of VYGP, by written action, unanimously adopted (the "Varies Plans, Agreements,
Benefits and shareholders") in substantially the form attached as Exhibit 3.2.1
- 10.1 - 10.2 - 10.3 and 10.3.1 hereto.
ARTICLE IV ASSET SEPARATION
4.1. TRANSFER OF ASSETS. Subject to the terms and conditions of this
Agreement, on or prior to the Distribution Date, VIGC shall convey, assign,
transfer, contribute and set over, or cause to be conveyed, assigned,
transferred, contributed and set over, to VYGP, and VYGP shall accept and
receive, all right, title and interest of VIGC in and to the tangible and
intangible assets of the VYGP Business (all of such assets being hereinafter
referred to as the "Transferred Assets"),
including the following:
(a) Balance Sheet Assets. All assets reflected or disclosed on the
unaudited balance sheet of the VYGP Business as of Jan.31,00attached as Exhibit
99.2 hereto (the "Balance Sheet"), including all tangible and intangible
property, whether owned or leased, used primarily in the operation of the VYGP
Business, subject to acquisitions, dispositions and adjustments in the
ordinary course of the VYGP Business, consistent with past practice, after such
date;
(b) Receivables.
(i) All accounts receivable, notes receivable, lease
receivables, prepayments (other than prepaid insurance),
advances and other receivables arising out of or produced by
the VYGP Business and owing by any Persons (the
"Receivables");
(ii) all cash payments received after the Distribution Date on
account of the Receivables;
(iii) all manufacturers' warranties or guarantees related to
the Transferred Assets or related to any of the Assumed
Liabilities; and
(iv) any and all manufacturers' or third party service or
replacement programs relating to the Transferred Assets;
(c) Inventories. All supplies, packaging, and other inventories related
to the VYGP Business.
(d) Real Property Leases. Those certain real estate leases set forth on
Exhibit 99. Form 10 K July 31, 1999-Item hereto (the "Real Estate Leases") and
all improvements, fixtures, machinery, equipment, and other property located on
the premises demised under such Real Estate Leases;
(e) Intellectual Property. All Copyrights, Interfaces, Methodologies,
Patents and Software to the extent the foregoing are used primarily in
connection with the VYGP Business, including
(i) those set forth on Schedule 4.1(f) hereto;
(ii) all business and technical information, no patented
inventions, discoveries, processes, formulations, trade
secrets, know-how and technical data used primarily in
connection with the VYGP Business made or conceived by
employees, consultants or contractors of VIGC or its
Subsidiaries as to which VIGC or its Subsidiaries have rights
under any agreement or otherwise relating to the foregoing;
(iii) all business and technical information, no patented
inventions, discoveries, processes, formulations, trade
secrets, know-how and technical data used primarily in
connection with the VYGP Business made or conceived by third
parties as to which VIGC or its Subsidiaries have rights
pursuant to executor agreements with said
third parties relating to the foregoing; and (iv) all permits,
grants, contracts, agreements and licenses running to or from
VIGC or its Subsidiaries relating to the foregoing; and all
rights that is associated with the foregoing (collectively,
the "Transferred Intellectual Property");
(f) Contracts. All of the following contracts, agreements,
arrangements, leases (other than Real Estate Leases ), manufacturers'
warranties, memoranda, understandings and offers open for acceptance of any
nature, whether written or oral (the "Contracts"):
( i ) all supplier Contracts related primarily to the VYGP
Business relating either to raw materials or distributed
products, including those set forth on Exhibit 99.2 *****
hereto;
(ii) the Shared Contracts that are designated as being
assigned to VYGP; and
(iii) all other Contracts related primarily to the VYGP
Business.
(g) Permits and Licenses. All permits, approvals, licenses, franchises,
authorizations or other rights granted by any Governmental Authority held or
applied for by VIGC and its Subsidiaries and that are used primarily in the VYGP
Business or that relate primarily to the Transferred Assets, and all other
consents, grants and other rights that are used primarily for the lawful
ownership of the Transferred Assets or the operation of the VYGP Business and
that are legally transferable to VYGP;
(h) Claims and Indemnities. All rights, claims, demands, causes of
action, judgments, decrees and rights to indemnity or contribution, whether
absolute or contingent, contractual or otherwise, in favor of VIGC relating
primarily to the VYGP Business, including the right to ▇▇▇, recover and retain
such recoveries and the right to continue in the name of VIGC and its
Subsidiaries any pending actions relating to the foregoing, and to recover and
retain any damages there from;
(i) Subsidiaries, Joint Ventures and Minority Interests. All shares of
capital stock or equity or debt or other interests owned by VIGC or its
Subsidiaries in the Subsidiaries, joint ventures and minority investments set
forth Exhibit 99.2 Form 10-K-July 31, 1999 herein;
(j) Books And Records. All books and records (including all records
pertaining to customers, suppliers and personnel), wherever located, that relate
primarily to the operation of the VYGP Business;
(k) Supplies. All office supplies, production supplies, spare parts,
purchase orders, forms, labels, shipping material, art work, catalogues, sales
brochures, operating manuals and advertising and promotional material and all
other printed or written material that relate primarily to the operation of the
VYGP Business;
(l) Trademarks. All United States, state and foreign trademarks,
service marks, logos, trade dress and trade names (including all assumed or
fictitious names under which VIGC is conducting the VYGP Business), whether
registered or unregistered, including all goodwill associated with the
foregoing, and all registrations and pending applications to register the
foregoing to the extent the foregoing are used or intended to be used primarily
in connection with the VYGP Business, including those set forth on Exhibit 99.2
Form 10-K July 31,1999 -******hereto (collectively, the "Trademarks");
(m) Loans to Transferred Employees. All loans, notes or other debts
owed to VIGC and its Subsidiaries by any Transferred Employees (as hereinafter
defined), which are none;
(n) Industry Awards. All industry awards that are sponsored primarily
by the VYGP Business;
(o) Tax Credits. Any right, title or interest in any tax refund, credit
or benefit to which VYGP or any of its Subsidiaries is entitled in accordance
with the terms of the Tax Sharing Agreement; and
(p) Other Assets. All other assets, tangible or intangible, include all
goodwill that are used primarily in or relate primarily to the operations of the
VYGP Business, including, without limitation, e-mail addresses, domain names,
and websites.
4.2. ASSUMPTION OF LIABILITIES. Except as expressly limited in this
Article IV, VYGP shall assume, effective on or before the Distribution Date, and
pay, comply with and discharge all contractual and other Liabilities of VIGC
arising out of or relating to the VYGP Business, whether due or to become due,
including:
(a) All Liabilities of VIGC that are reflected, disclosed or reserved
for on the Balance Sheet, as such Liabilities may be increased or decreased in
the operation of the VYGP Business from the date of the Balance Sheet through
the Distribution Date in the ordinary course of business consistent with past
practice;
(b) All Liabilities of VIGC under or related to the Real Estate Leases,
and the Contracts, such assumption to occur as (i) assignee if such Real Estate
Leases, and Contracts are assignable and are assigned or otherwise transferred
to VYGP, or (ii) subcontractor, sub lessee or sublicenses provided in Exhibit
99.2 Form 10-K- July 31, 1999if assignment of such Real Estate Leases, and
Contracts and/or the proceeds thereof is prohibited by law, by the terms thereof
or not permitted by the other contracting party;
(c) All warranty, performance, and similar obligations entered into or
made by VIGC prior to the Distribution Date with respect to the products or
services of the VYGP Business;
(d) All Liabilities of VIGC in connection with claims of past or
current employees of the VYGP Business, except as otherwise expressly provided
in this Agreement;
(e) All Liabilities of VIGC related to any and all Actions asserting a
violation of any law, rule
or regulation related to or arising out of the operations of the VYGP Business,
whether before or after the Distribution Date and the Liabilities relating to
any Assumed Actions (as hereinafter defined);
(f) All Liabilities for which VYGP is liable in accordance with the
terms of the Tax Sharing Agreement;
(g) All Liabilities of VIGC related to the immigrant and nonimmigrant
status of any foreign national employees who are Transferred Employees (as
hereinafter defined); and
(h) All other Liabilities of VIGC relating to the VYGP Business,
whether existing on the date hereof or arising at any time or from time to time
after the date hereof, and whether based on circumstances, events or actions
arising heretofore or hereafter, whether or not such Liabilities shall have been
disclosed herein, and whether or not reflected on the books and records of VIGC
or VYGP or the Balance Sheet.
The Liabilities described in this Section 4.2 are referred to in this
Agreement collectively as the "Assumed Liabilities".
4.3. RETAINED ASSETS. Notwithstanding anything to the contrary herein,
the following assets (the "Retained Assets") are not, and shall not be deemed to
be, Transferred Assets:
(a) Cash and cash equivalents, any cash on hand or in bank accounts,
certificates of deposit, commercial paper and similar securities, except for (i)
deposits securing bonds, letters of credit, leases and all other obligations
related to the VYGP Business, (ii) ▇▇▇▇▇ cash and impressed funds related to the
VYGP Business, (iii) cash held in foreign bank accounts and (iv) $20,000,000;
(b) Any right, title or interest in any tax refund, credit or benefit
to which VIGC or any of its Subsidiaries is entitled in accordance with the
terms of the Tax Sharing Agreement.
(c) Any amounts accrued on the books and records of VIGC or the VYGP
Business and Subsidiary with respect to any Retained Liabilities (as hereinafter
defined);
(d) Except as provided in Sections 9.4 and 9.7, assets relating to the
provision of benefits to present or former employees of the VYGP Business; and
(e) Any intellectual property rights in and to the name "VIGC" and the
related emblem design, and any variants thereof, and the trademarks and trade
names used by VIGC or its Subsidiaries in relation to the Retained Business,
except as provided in the Intellectual Property License Agreements attached as
Exhibits 10.6 and 10.7 hereto.
4.4. RETAINED LIABILITIES. Notwithstanding anything to the contrary in
this Agreement, neither VYGP nor any of its Subsidiaries shall assume any of the
following Liabilities of VIGC (the "Retained Liabilities"):
(a) Except as provided in Article IX, the Liabilities under all the
VIGC Plans; and
(b) All Liabilities for which VIGC is liable in accordance with the
terms of the Tax Sharing Agreement.
4.5. TERMINATION OF EXISTING INTERCOMPANY AGREEMENTS. Except as
otherwise expressly provided in this Agreement, the Operating Agreements or the
agreements set forth on Schedule 4.5, all Intercompany Agreements and all other
inter-company arrangements and course of dealings, whether or not in writing and
whether or not binding, in effect immediately prior to the Distribution Date,
shall be terminated and be of no further force and effect from and after the
Distribution Date.
4.6. SHARED CONTRACTS. (a) With respect to Shared Contractual
Liabilities pursuant to, arising under or relating to any Shared Contract, such
Shared Contractual Liabilities shall be allocated between VIGC and VYGP as
follows:
(i) First, if a Liability is incurred exclusively in respect
of a benefit received by one Party, the Party receiving such
benefit shall be responsible for such Liability;
(ii) Second, if a Liability cannot be so allocated under
clause (i), such Liability shall be allocated between the
Parties based on the relative proportions of total benefit
received (over the term of the Shared Contract, measured as of
the date of the allocation) under the relevant Shared
Contract. Notwithstanding the foregoing, each Party shall be
responsible for all Liabilities arising out of or resulting
from its breach of the relevant Shared Contract.
(b) If either VIGC or VYGP improperly receives any benefit or payment
under any Shared Contract that was intended for the other Party, the Party
receiving such benefit or payment will use commercially reasonable efforts to
deliver, transfer, or otherwise afford such benefit or payment (on an after-tax
basis) to the other Party.
ARTICLE V ASSET SEPARATION CLOSING MATTERS
5.1. DELIVERY OF INSTRUMENTS OF CONVEYANCE. In order to effectuate the
transactions contemplated by Article IV, the Parties shall execute and deliver,
or cause to be executed and delivered, prior to or as of the Distribution Date
such deeds, bills of sale, instruments of assumption, instruments of assignment,
stock powers, certificates of title and other instruments of assignment,
transfer, assumption and conveyance (collectively, the "Conveyance Instruments")
as the Parties shall reasonably deem necessary or appropriate to effect such
transactions.
5.2. DELIVERY OF OTHER AGREEMENTS. Prior to or as of the Distribution
Date, the Parties shall execute and deliver, or shall cause to be executed and
delivered, each of the Operating Agreements.
5.3. PROVISION OF CORPORATE RECORDS. Prior to or as promptly as
practicable after
the Distribution Date, VIGC shall deliver to VYGP all corporate books and
records of VYGP and copies of all corporate books and records of VIGC relating
to the VYGP business, including in each case all active agreements, litigation
files and government filings. From and after the Distribution Date, all books,
records, and copies so delivered shall be the property of VYGP.
ARTICLE VI NO REPRESENTATIONS AND WARRANTIES
Except as expressly set forth herein or in any Operating Agreement,
VIGC does not represent or warrant in any way (i) as to the value or freedom
from encumbrance of, or any other matter concerning, any of the Transferred
Assets or (ii) as to the legal sufficiency to convey title to any of the
Transferred Assets on the execution, delivery and filing of the Conveyance
Instruments.
ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN "AS IS, WHERE IS" BASIS WITHOUT ANY
REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
MARKETABILITY, TITLE, VALUE, FREEDOM FROM ENCUMBRANCE OR ANY THER REPRESENTATION
OR WARRANTY, EXPRESS OR
IMPLIED, and VYGP shall bear the economic and legal risks that any conveyances
of such assets shall prove to be insufficient or that VYGP's title to any such
assets shall be other than good and marketable and free of encumbrances. Except
as expressly set forth in this Agreement or in any Operating Agreement, VIGC
does not represent or warrant that the obtaining of the consents or approvals,
the execution and delivery of any amendatory agreements and the 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, and, subject to Section 7.4, VYGP shall bear the economic and
legal risk that any necessary consents or approvals are not obtained or that any
requirements of law or judgments are not complied with. Notwithstanding the
foregoing, the Parties shall fully cooperate and use reasonable efforts to
obtain all consents and enter into all amendatory agreements and to make all
filings and applications that may be required for the consummation of the
transactions contemplated by this Agreement.
ARTICLE VII CERTAIN COVENANTS
7.1. THIRD PARTY CONSENTS. To the extent that the transactions
contemplated by this Agreement require any material consents, approvals, or
waivers from third parties (the "Third Party Consents"), the Parties will use
commercially reasonable efforts to obtain any such Third Party Consents.
7.2. MATERIAL GOVERNMENTAL APPROVALS AND CONSENTS. To the extent that
the transactions contemplated by this Agreement require any approvals or
consents of any Governmental Authority, the Parties will use commercially
reasonable efforts to obtain any Material Governmental Approvals and Consents.
7.3. NON-ASSIGNABLE CONTRACTS. In the event and to the extent that VIGC
is unable to obtain any consent, approval or amendment to any Contract, lease,
license or other rights relating to the VYGP Business that would therwise be
transferred or assigned to VYGP as contemplated by this Agreement or any other
agreement or document contemplated hereby, (i) VIGC shall continue
to be bound thereby and the purported transfer or assignment to VYGP shall
automatically be deemed deferred until such time as all legal impediments are
removed and/or all necessary consents have been obtained, and (ii) unless not
permitted by the terms thereof or by law, VYGP shall pay, perform and discharge
fully all of the obligations of VIGC thereunder from and after the Distribution
Date, or such earlier date as such transfer or assignment would otherwise have
taken place, and indemnify VIGC for all identifiable Losses arising out of such
performance by VYGP. VIGC shall, without further consideration therefore, pay
and remit to VYGP promptly all monies, rights, and other considerations received
in respect of such performance. VIGC shall exercise or exploit its rights and
options under all such Contracts, leases, licenses and other rights and
commitments referred to in this Section 7.3 only as reasonably directed by VYGP
and at VYGP's expense. If and when any such consent shall be obtained or such
Contract, lease, license or other right shall otherwise become assignable or be
able to be novated, VIGC shall promptly assign and novate (to the extent
permissible) all of its rights and obligations thereunder to VYGP without
payment of further consideration, and VYGP shall, without the payment of any
further consideration therefore, assume such rights and obligations. To the
extent that the assignment of any Contract, lease, license or other right (or
the proceeds thereof) pursuant to this Section 7.3 is prohibited by law, the
assignment provisions of this Section 7.3 shall operate to create a subcontract
with VYGP to perform each relevant unassignable VIGC Contract at a subcontract
price equal to the monies, rights and other considerations received by VIGC with
respect to the performance by VYGP under such subcontract.
7.4. NOVATION OF ASSUMED LIABILITIES. (a) Except as otherwise
specifically provided in Section 4.6 with respect to Shared Contracts and
elsewhere in this Agreement, it is expressly understood and agreed to by the
Parties that upon the assumption by VYGP of the Assumed Liabilities, VIGC, its
Subsidiaries and their respective officers, directors and employees shall be
released unconditionally by VYGP from any and all Liability, whether joint,
several or joint and several, for the discharge, performance or observance of
any of the Assumed Liabilities, so that VYGP will be solely responsible for such
Assumed Liabilities.
(b) VYGP, at the reasonable request of VIGC, shall use commercially
reasonable efforts to obtain, or cause to be obtained, any consent, approval,
release, substitution or amendment required to novate (including with respect to
any federal government contract) or assign all obligations under the Assumed
Liabilities, or to obtain in writing the unconditional release of all parties to
such arrangements other than VYGP; provided, however, that VYGP shall not be
obligated to pay any consideration therefore to any third party from whom such
consents, approvals, releases, substitutions or amendments are requested.
(c) If VYGP is unable to obtain, or to cause to be obtained, any such
required consent, approval, release, substitution or amendment, VIGC shall
continue to be bound by such Assumed Liability and, unless not permitted by law
or the terms thereof, VYGP shall, as agent or subcontractor for VIGC, pay,
perform and discharge fully all of the obligations or other Liabilities of VIGC
thereunder from and after the date hereof. VYGP shall indemnify and hold
harmless VIGC against any Liabilities arising in connection with such Assumed
Liability or with VYGP's payment, performance, and discharge of such Assumed
Liability. Except as otherwise set forth in this Agreement, VIGC shall, without
further consideration, pay and remit, or cause to be paid or remitted,
to VYGP promptly the after-tax amount of all money, rights and other
consideration received by it in respect of such performance (unless any such
consideration is a Retained Asset), increased by any actual tax benefit derived
by VIGC as a result of such payment or remittance (with such tax benefit
determined pursuant to Section 12.5(d)). If and when any such consent, approval,
release, substitution or amendment shall be obtained or such Assumed Liability
shall otherwise become assignable or be able to be novated, VIGC shall
thereafter assign, or cause to be assigned, all of its rights, obligations and
other Liabilities thereunder to VYGP without payment of further consideration
and VYGP shall, without the payment of any further consideration, assume such
rights and obligations.
7.5. FURTHER ASSURANCES. (a) In addition to the actions specifically
provided for elsewhere in this Agreement, each of the Parties shall use
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable laws, regulations and agreements to consummate and make
effective the Distribution and the other agreements and documents contemplated
hereby. Without limiting the generality of the foregoing, each Party shall
cooperate with the other Party to execute and deliver, or use commercially
reasonable efforts to cause to be executed and delivered, all instruments,
including instruments of conveyance, assignment and transfer, and to make all
filings with, and to obtain all consents, approvals or authorizations of, any
governmental or regulatory authority or any other Person under any permit,
license, Contract or other instrument, and to take all such other actions as
such Party may reasonably be requested to take by the other Party from time to
time, consistent with the terms of this Agreement, in order to confirm the title
of VYGP to all of the VYGP Business, to put VYGP in actual possession and
operating control thereof and to permit VYGP to exercise all rights with respect
thereto and to effectuate the provisions and purposes of this Agreement and the
other agreements and documents contemplated hereby or thereby.
(b) If, as a result of mistake or oversight, any asset reasonably
necessary to the conduct of the VYGP Business is not transferred to VYGP, or any
asset reasonably necessary to the conduct of the Retained Business is
transferred to VYGP, VIGC and VYGP shall negotiate in good faith after the
Distribution Date to determine whether such asset should be transferred to VYGP
or to VIGC, as the case may be, and/or the terms and conditions upon which such
asset shall be made available to VYGP or to VIGC, as the case may be. Unless
expressly provided to the contrary in this Agreement or any Operating Agreement,
if, as a result of mistake or oversight, any Liability arising out of or
relating to the VYGP Business is retained by VIGC, or any Liability arising out
of or relating to the Retained Business is assumed by VYGP, VIGC and VYGP shall
negotiate in good faith after the Distribution Date to determine whether such
Liability should be transferred to VYGP or VIGC, as the case may be, and/or the
terms and conditions upon which any such Liability shall be transferred.
(c) If either Party identifies any commercial or other service that is
needed to assure a smooth and orderly transition of the businesses in connection
with the consummation of the transactions contemplated hereby or any desired
modification to any such service, including any service that is governed by the
provisions of any Operating Agreement, the Parties shall give reasonable notice
of such service or proposed modification, and shall cooperate in implementing
any such service or modification and in determining the mutually acceptable
arm's-length basis on which one Party will provide such service to the other
Party.
7.6. NOMINEE SHARES. VIGC agrees to use commercially reasonable efforts
to cause to be transferred to, or as directed by, VYGP all director's qualifying
or other shares of capital stock of any of the transferred Subsidiaries held as
of the Distribution Date by persons who are not employees of VYGP. VYGP agrees
to use commercially reasonable efforts to cause to be transferred to, or as
directed by, VIGC all director's qualifying or other shares of capital stock of
any VIGC Subsidiary other than VYGP and the transferred Subsidiaries held as of
the Distribution Date by employees of VYGP.
7.7. COLLECTION OF ACCOUNTS RECEIVABLE. (a) VIGC shall be entitled to
control all collection actions related to the Retained Assets, including the
determination of what actions are necessary or appropriate and when and how to
take any such action.
(b) VYGP shall be entitled to control all collection actions related to
the Transferred Assets, including the determination of what actions are
necessary or appropriate and when and how to take any such action.
(c) If, after the Distribution Date, VYGP shall receive any remittance
from any account debtors with respect to the accounts receivable arising out of
the Retained Assets or other amounts due VIGC in respect of services rendered by
VIGC after the Distribution Date, or VIGC shall receive any remittance from any
account debtors with respect to the accounts receivable arising out of the
Transferred Assets or other amounts due VYGP in respect of services rendered by
VYGP after the Distribution Date, such Party shall receive and deposit the
after-tax amount of such remittance and deliver cash in an amount equal thereto
to the other Party, increased by any actual tax benefit derived by such Party as
a result of payment to such other Party (with such tax benefit determined
pursuant to Section 12.5(d)) as soon as practicable and, in any event, within
five (5) business days of receiving such remittance. The Parties shall reconcile
any amounts due and owed under this Section 7.7 on a daily basis.
(d) Each Party shall deliver to the other such schedules and other
information with respect to the accounts receivable included in the Transferred
Assets and those not included therein as each shall reasonably request from time
to time in order to permit such Parties to reconcile their respective records
and to monitor the collection of all accounts receivable (whether or not
Transferred Assets). Each Party shall afford the other reasonable access to its
books and records relating to any accounts receivable.
7.8. ELECTION OF VYGP MAJORITY SHAREHOLDERS. Prior to the Distribution
Date, VIGC agrees to vote all shares of VYGP Common Stock held by it in favor of
the nominees to the Majority Shareholders of VYGP, as set forth on Exhibit F
hereto.
7.9. LATE PAYMENTS. Except as expressly provided to the contrary in
this Agreement or in any Operating Agreement, any amount not paid when due
pursuant to this Agreement or any Operating Agreement (and any amounts billed or
otherwise invoiced or demanded and properly payable that are not paid within
thirty (30) days of such ▇▇▇▇, invoice or other demand) shall accrue interest at
a rate per annum equal to the Prime Rate plus 2%.
7.10. REGISTRATION AND LISTING. Prior to the Distribution Date:
(a) VIGC and VYGP shall prepare a registration statement on Form 10 SB,
including such amendments or supplements thereto as may be necessary (together,
the "Registration Statement") to effect the registration of the VYGP Common
Stock an Preferred Stock under the Exchange Act, which Registration Statement
shall include an information statement to be sent by VIGC to its stockholders in
connection with the Distribution (the "Information Statement"). VYGP shall file
the Registration Statement with the SEC and shall use commercially reasonable
efforts to cause the Registration Statement to become and remain effective under
the Exchange Act as soon as reasonably practicable. After the Registration
Statement becomes effective, VIGC shall mail the Information Statement to the
holders of VIGC Common Stock as of the Record Date.
(b) The Parties shall use commercially reasonable efforts to take all
such action as may be necessary or appropriate under state and foreign
securities and "Blue Sky" laws in connection with the transactions contemplated
by this Agreement.
(c) VIGC and VYGP shall prepare, and VYGP shall file and seek to make
effective, an application for the listing of the VYGP Common Stock on the
NASDAQ, subject to official notice of issuance.
(d) The Parties shall cooperate in preparing, filing with the SEC and
causing to become effective any Registration Statements or Amendments thereto
that are necessary or appropriate in order to effect the transactions
contemplated hereby or to reflect the establishment of, or amendments to, any
employee benefit plans contemplated hereby.
7.11. NO NONCOMPETITION; NONHIRING; NONSOLICITATION. (a) After
the Distribution Date, neither Party shall have any duty to refrain from (i)
engaging in the same or similar activities or lines of business as the other
Party, (ii) doing business with any potential or actual supplier or customer of
the other Party or (iii) engaging in, or refraining from, any other activities
whatsoever relating to any of the potential or actual suppliers or customers of
the other Party.
(b) During the period beginning on July 1, 2000 and ending eighteen
(29) days after such date, neither VIGC nor VYGP shall, nor shall either Party
permit any of its respective Subsidiaries, Affiliates or agents to, directly or
indirectly, without the prior written consent of the other, actively solicit or
recruit for employment any then current employee of the other Party or of any of
the other Party's Subsidiaries or Affiliates. However, nothing contained in this
Section 7.11(b) shall (i) prohibit the hiring of any employee who is seeking
employment on his or her own initiative without prior contact initiated by any
employee or agent of the company where employment is sought, or any of such
company's Affiliates, provided that such employee has obtained authorization
from an officer (or a direct report to a current officer) of his or her current
employer; or (ii) prohibit VIGC or VYGP or any of their respective Subsidiaries
or Affiliates from hiring any person who has terminated employment with the
other Party. The foregoing restriction shall cease to apply on July 1, 2001.
7.12. LITIGATION. (a) On or as of the Distribution Date, VYGP shall
assume and pay all
Liabilities that may result from the Assumed Actions (as hereinafter defined)
and all fees and costs relating to the defense of the Assumed Actions, including
attorneys' fees and costs incurred after the Distribution Date. "Assumed
Actions" shall mean those cases, claims, and investigations (on which VIGC, its
Subsidiaries or its Affiliates, other than VYGP, are a defendant or the party
against whom the claim or investigation is directed) primarily related to the
VYGP Business.
(b) VIGC and its Subsidiaries shall transfer the Transferred Actions
(as hereinafter defined) to VYGP, and VYGP shall receive and have the benefit of
all of the proceeds of such Transferred Actions. "Transferred Actions" shall
mean those cases and claims (on which VIGC, its Subsidiaries or its Affiliates
are a plaintiff or claimant) primarily relating to the VYGP Business.
7.13. VYGP BANK ACCOUNTS. On or prior to the Distribution Date, VIGC
and its Subsidiaries shall transfer the bank accounts set forth on Schedule 7.13
hereto to VYGP. VYGP shall cause any amounts received, by mistake or otherwise,
in such accounts after the Distribution Date on account of the Retained Business
to be transferred promptly to VIGC, as appropriate. VIGC shall cause any amounts
received, by mistake or otherwise, after the Distribution Date on account of the
VYGP Business to be transferred promptly to VYGP.
7.14. SIGNS; USE OF COMPANY NAME. As soon as practicable, and in any
event within sixty (60) days after the Distribution Date, the Parties, at VYGP's
expense, shall remove (or, if necessary, on an interim basis cover up) any and
all exterior and interior signs and identifiers that refer or pertain to VIGC or
the Retained Business on the Transferred Assets, in the case of VYGP, or that
refer or pertain to VYGP or the Transferred Business on the Retained Assets, in
the case of VIGC. After such period, (i) VYGP shall not use or display the names
"VIGC," or any variations thereof, or other trademarks, trade names, logos or
identifiers using any of such names or otherwise owned by or licensed to VIGC
that have not been assigned or licensed to VYGP, and (ii) VIGC shall not use or
display the name "VYGP," "VYGP Corporation" or any variations thereof, or other
trademarks, trade names, logos or identifiers using any of such names or
otherwise owned by or licensed to VYGP that have not been assigned or licensed
to VIGC (collectively, the "Non-Permitted Names"), without the prior written
consent of the other Party; provided, however, that notwithstanding the
foregoing, nothing contained in this Agreement shall prevent either Party from
using the other's name in public filings with Governmental Authorities,
materials intended for distribution to either Party's stockholders or any other
communication in any medium that describes the relationship between the Parties.
7.15. REASONABLE EFFORTS. Upon the terms and subject to the conditions
set forth in this Agreement, each of the Parties agrees to use all commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, and to assist and cooperate with the other Parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by this
Agreement, including;
(i) the obtaining of all necessary actions or non-actions, waivers,
consents and approvals from Governmental Authorities and the making of
all necessary registrations and filings (including filings with
Governmental Authorities) and the taking of all reasonable steps as may
be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding
by, any Governmental Authority (including those in connection with the
HSR Act, if any),
(ii) the obtaining of all necessary consents, approvals or waivers from
third parties,
(iii) the defending of any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated hereby, including seeking
to have any stay or temporary restraining order entered by any court or
other Governmental Authority vacated or reversed and (iv) the execution
and delivery of any additional instruments necessary to consummate the
transactions contemplated by this Agreement.
7.16. USE OF TRANSFERRED INTELLECTUAL PROPERTY. As of the Distribution
Date, and except as permitted pursuant to the terms and conditions of the
Intellectual Property License Agreements, VIGC and its Subsidiaries, other than
VYGP and its Subsidiaries, shall cease all use of the Transferred Intellectual
Property, and VIGC agrees to terminate any license granted to its Subsidiaries,
other than VYGP and its Subsidiaries, with respect to the foregoing.
ARTICLE VIII CONDITIONS TO THE DISTRIBUTION
The obligation of VIGC to effect the Distribution is subject to the
satisfaction or the waiver by VIGC, at or prior to the Distribution Date, of
each of the following conditions:
8.1. APPROVAL BY VIGC MAJORITY SHAREHOLDERS. This Agreement and the
transactions contemplated hereby, including the declaration of the Distribution,
shall have been duly approved by the Majority Shareholders of VIGC in accordance
with applicable law and the Certificate of Incorporation, as amended, and
By-laws of VIGC.
8.2. TAX RULING. VIGC 's tax counsel shall review, substantially to the
effect that the Contribution will qualify as a tax-free transaction for federal
income tax purposes under Section 368(a)(1)(D) or Section 351 of the Code, that
the Distribution will qualify as a tax-free distribution for federal income tax
purposes under Section 355 of the Code, and that no income, gain or loss will be
recognized by VIGC, VYGP or their respective stockholders upon the Contribution
or the Distribution.
8.3. COMPLIANCE WITH STATE AND FOREIGN SECURITIES AND "BLUE SKY"
LAWS. The Parties shall have taken all such action as may be necessary or
appropriate under state and foreign securities and "blue sky" laws in connection
with the Distribution.
8.4. SEC FILINGS AND APPROVALS. The Parties shall have prepared and
VYGP shall, to the extent required under applicable law, have filed with the SEC
any such documentation and any requisite no action letters that VIGC reasonably
determines are necessary or desirable to effectuate the Distribution, and each
Party shall use commercially reasonable efforts to obtain all necessary
approvals from the SEC with respect thereto as soon as practicable.
8.5. FILING AND EFFECTIVENESS OF REGISTRATION STATEMENT; NO STOP
ORDER. The Registration Statement shall have been filed with and declared
effective by the SEC, and no stop order suspending the effectiveness of the
Registration Statement shall have been initiated or, to the knowledge of the
Parties, threatened by the SEC.
8.6. DISSEMINATION OF INFORMATION TO VIGC STOCKHOLDERS. Prior to the
Distribution Date, the Parties shall have prepared and mailed to the holders of
VIGC Common Stock such information concerning VYGP, its business, operations and
management, the Distribution and such other matters as VIGC shall reasonably
determine and as may be required by law.
8.7. APPROVAL OF NASDAQ LISTING APPLICATION. The VYGP Common Stock to
be distributed in the Distribution shall have been approved for listing on the
NASDAQ, subject to official notice of issuance.
8.8. RECEIPT OF VIABILITY AND FAIRNESS OPINION OF FINANCIAL ADVISOR.
The VIGC Majority Shareholders is of the opinion the Distribution will not have
a material adverse effect on the financial viability of VIGC or of VYGP through
the period ending July 31, 2000, and the Distribution is fair to the VIGC
stockholders from a financial point of view.
8.9. OPERATING AGREEMENTS. Each of the Operating Agreements shall have
been executed and delivered, and each of such agreements shall be in full force
and effect.
8.10. RESIGNATIONS. On or prior to the Distribution Date, VIGC shall
cause all of its designees to resign or to be removed as officers.
8.11. CONSENTS. (a) All Material Governmental Approvals and Consents
required to permit the valid consummation of the Distribution shall have been
obtained without any conditions being imposed that would have a material adverse
effect on VIGC or VYGP.
(b) VIGC shall have obtained the consent, approval or waiver of each
Person (other than the Governmental Authorities referred to in Section 8.11(a))
whose consent, approval or waiver shall be required in connection with the
Distribution, except those for which the failure to obtain such consents or
approvals would not, in the reasonable opinion of VIGC, individually or in the
aggregate have a material adverse effect on VIGC, VYGP or the consummation of
the Distribution.
8.12. NO ACTIONS. No action, suit or proceeding shall have been
instituted or threatened by or before any court or quasi-judicial or
administrative agency of any federal, state, local or foreign jurisdiction or
before any arbitrator to restrain, enjoin or otherwise prevent the Distribution
or the other transactions contemplated this Agreement (including but not limited
to a stop order with respect to the effectiveness of the Registration
Statement), and no order, injunction, judgment, ruling or decree issued by any
court of competent jurisdiction shall be in effect restraining the Distribution
or such other transactions.
8.13. CONSUMMATION OF PRE-DISTRIBUTION TRANSACTIONS. The
pre-Distribution transactions contemplated by Articles III-V of this Agreement
shall have been consummated in all material respects.
8.14. NO OTHER EVENTS. No other events or developments shall have
occurred that, in the judgment of the VIGC Majority Shareholders, would result
in the Distribution having a material adverse effect on VIGC or its
stockholders.
8.15. SATISFACTION OF CONDITIONS. The satisfaction of the foregoing
conditions are for the sole benefit of VIGC and shall not give rise to or create
any duty on the part of VIGC or the VIGC Majority Shareholders to waive or not
waive any such condition, to effect the Distribution or in any way limit VIGC's
power of termination set forth in Section 15.13 .
ARTICLE IX EMPLOYEES AND EMPLOYEE BENEFIT MATTERS
9.1. EMPLOYMENT OF VYGP EMPLOYEES. On the Asset Transfer Date, VYGP
shall, or shall cause its Subsidiaries to, employ each employee of the VYGP
Business ("Transferred Employees") set forth on Schedule 9.1 hereto, and VIGC
shall cause all such Transferred Employees to resign from all positions as
officers or employees of VIGC and its Subsidiaries. VYGP and VIGC (and their
respective Subsidiaries) shall use commercially reasonable efforts to accomplish
any transfers of employment required by this Section 9.1 in a timely manner. As
of the Asset Transfer Date, VYGP shall assume each employment agreement between
VIGC and a Transferred Employee and shall be solely responsible for all of the
obligations of the employer thereunder.
9.2. SEVERANCE. (a) Transferred Employees shall not be eligible for any
severance benefits from VIGC or its Subsidiaries or Affiliates as a result of
their employment with VYGP or it is Subsidiaries, Affiliates, or their
subsequent termination of employment with VYGP or its Subsidiaries or
Affiliates.
(b) VYGP (or the applicable VYGP Subsidiary) shall have the obligation
to pay severance benefits to any employee or former employee of the VYGP
Business whose employment terminates on or after January 1, 2001. VIGC shall
continue to have the obligation to pay severance benefits to any employee or
former employee of the VYGP Business whose employment terminated prior to
January 1, 2001.
9.3. WITHDRAWAL FROM PARTICIPATION IN VIGC PLANS AND
ESTABLISHMENT OF VYGP PLANS.
(a) No later than the Distribution Date, Transferred Employees shall
cease to participate in the VIGC employee benefit plans and programs (the "VIGC
Plans"), except as otherwise specifically provided in this Article IX.
(b) No later than the Distribution Date, VYGP or an VYGP Subsidiary
shall establish its own employee benefit plans and programs for the benefit of
eligible employees of VYGP and its Subsidiaries that shall be substantially
similar to the VIGC Plans, including but not limited to a 401(k) savings plan
(the "VYGP Savings Plan"), a nonqualified executive deferred compensation plan
(the "VYGP Deferred Compensation Plan"), a medical and dental plan, a group
vision care plan or other Ancillary Agreements.
9.4. TRANSFER OF SAVINGS PLAN ACCOUNT BALANCES. Subject to applicable
law and the provisions of the VIGC 401(k) Plan (the "VIGC Savings Plan"), as
soon as administratively practicable following the establishment of the VYGP
Savings Plan, or effective as of any other date as agreed to in writing by the
plan administrator for the VIGC Savings Plan and the plan administrator for the
VYGP Savings Plan, the account balances (including outstanding loans) of all
VIGC Savings Plan participants who are Transferred Employees shall be
transferred from the VIGC Savings Plan to the VYGP Savings Plan. Each
Transferred Employee shall receive credit for all purposes under the VYGP
Savings Plan for periods of service with VIGC or any of its Affiliates. The plan
administrator for the VYGP Savings Plan shall take any other action reasonably
requested by the plan administrator for the VIGC Savings Plan that is necessary
or advisable, in the opinion of the plan administrator for the VIGC Savings
Plan, to maintain the tax-qualified status of the VIGC Savings Plan or to avoid
the imposition of any penalties with respect to such plan.
9.5. WELFARE BENEFITS PROVIDED UNDER VYGP PLANS. (a) Each Transferred
Employee who becomes eligible to participate in an VYGP welfare benefit plan
shall be credited under such plan with (i) any deductibles and co-payments paid
by such employee during the same plan year under the medical or dental plan
maintained by VIGC and (ii) periods of service with VIGC or any of its
Affiliates for all purposes under such plan. Amounts paid under a VIGC medical
or dental plan that are taken into account for purposes of determining each VYGP
employee's lifetime maximum benefits under such plan shall be taken into account
for purposes of determining such VYGP employee's lifetime maximum benefits under
the VYGP medical or dental plan.
(b) VYGP (or the applicable VYGP Subsidiary) shall pay all costs
associated with the provision of disability benefits to any employee or former
employee of the VYGP Business, other than an employee or former employee whose
long-term disability benefits commenced prior to the earlier of (i) the
Distribution Date or (ii) the effective date of the VYGP long-term disability
insurance plan. Any employee or former employee of the VYGP Business receiving
benefits under the VIGC long-term disability insurance plan prior to such date
shall continue to receive benefits under the terms of such plan and the
insurance contract used to fund such plan, and neither VYGP nor any VYGP
Subsidiary shall be charged for the payment of such benefits.
(c) VIGC (or the applicable VIGC Subsidiary) shall pay all claims under
the VIGC medical plan relating to Transferred Employees that have been incurred
but not paid prior to the earlier of (i) the Distribution Date or (ii) the
effective date of the VYGP medical plan, but only if claims for such costs are
submitted in written form to the authorized agents of VIGC during the nine-month
period beginning on such date.
9.6. STOCK PURCHASE PLANS. VIGC 2000 Plan, and as of the later of (i)
the first business day after the record date of the Distribution or (ii) the
first day on which VYGP Common Stock is traded on a "when issued" basis,
Transferred Employees shall become eligible to participate in the VYGP 2000
Plan.
9.7. DEFERRED COMPENSATION PLAN. No later than the Distribution Date,
VYGP shall establish the VYGP Deferred Compensation Plan, (the "VIGC Deferred
Compensation Plan") in effect immediately prior to the date, the VYGP Deferred
Compensation Plan is established.
9.8. WORKERS' COMPENSATION. VYGP shall assume the Liability for any
workers' compensation or similar workers' protection claims with respect to any
employee of the VYGP Business, whether incurred prior to, on, or after the
Distribution Date, which are the result of an injury or illness originating
prior to, or on the Distribution Date.
9.9. INFORMATION TO BE PROVIDED TO VIGC. VYGP (or the applicable VYGP
Subsidiary) shall provide any information that VIGC (or any VIGC Subsidiary) may
reasonably request, including but not limited to information relating to dates
of termination of employment, in order to provide benefits to any eligible
employee of VYGP or any of its Subsidiaries under the terms and conditions
described herein or under the applicable VIGC Plans. Any information relating to
an employee's termination of employment shall be provided by VYGP (or the
applicable VYGP Subsidiary) to VIGC as soon as available to VYGP or any of its
Subsidiaries, but in any event no later than 30 days after such information is
made available to VYGP or any such Subsidiaries. VYGP (or the applicable VYGP
Subsidiary) shall, as necessary, update the system used to keep such information
in such timely manner as is required to administer the VIGC Plans.
ARTICLE X INSURANCE MATTERS
10.1. INSURANCE PRIOR TO THE DISTRIBUTION DATE. VYGP does hereby agree
that VIGC shall not have any Liability whatsoever as a result of the insurance
policies and practices of VIGC in effect at any time prior to the Distribution
Date, including as a result of the level or scope of any such insurance, the
creditworthiness of any insurance carrier, the terms and conditions of any
policy and the adequacy or timeliness of any notice to any insurance carrier
with respect to any claim or potential claim or otherwise.
10.2. OWNERSHIP OF EXISTING POLICIES AND PROGRAMS. VIGC or one or more
of its Subsidiaries shall continue to own all property, casualty and liability
insurance policies and programs, including, without limitation, primary and
excess general liability, errors and omissions, automobile, workers'
compensation, property, fire, crime and surety insurance policies, in effect on
or before the Distribution Date (collectively, the "VIGC Policies" and
individually, a "VIGC Policy"). VIGC shall use reasonable efforts to maintain
the VIGC Policies in full force and effect up to and including the Distribution
Date, and, subject to the provisions of this Agreement, VIGC and its
Subsidiaries shall retain all of their respective rights, benefits and
privileges, if any, under the VIGC Policies. Nothing contained herein shall be
construed to be an attempted assignment of or to change the ownership of the
VIGC Policies.
10.3. PROCUREMENT OF INSURANCE FOR VYGP. To the extent not already
provided for by the terms of a VIGC Policy, VIGC shall use reasonable efforts to
cause VYGP to be named as an additional insured under VIGC Policies whose
effective policy periods include the Distribution Date, in respect of claims
arising out of or relating to periods prior to the Distribution Date; provided,
however, that nothing contained herein shall be construed to require VIGC or any
of its Subsidiaries to pay any additional premium or other charges in respect
to, or waive or otherwise limit any of its rights, benefits or privileges under,
any VIGC Policy in order to effect the naming of VYGP as such an additional
insured.
10.4. ACQUISITION AND MAINTENANCE OF POST-DISTRIBUTION VYGP INSURANCE
POLICIES AND PROGRAMS. Commencing on and as of the Distribution Date, VYGP shall
be responsible for establishing and maintaining separate property, casualty and
liability insurance policies and programs (including, without limitation,
primary and excess general liability, errors and omissions, automobile, workers'
compensation, property, fire, crime, surety and other similar insurance
policies) for activities and claims involving VYGP or any of its Subsidiaries or
Affiliates. In addition to the foregoing, VYGP shall obtain insurance covering
its contractual obligations to indemnify VIGC and the VIGC Indemnified Parties
under this Agreement and shall arrange for VIGC and the VIGC Indemnified Parties
to be named insured under such policies. All insurance policies required to be
maintained by VYGP shall be with insurers reasonably acceptable to VIGC with
respect to financial condition and claims paying ability. VYGP will exercise
commercially reasonable efforts to secure liability insurance to avoid potential
gaps in coverage for claims arising from events prior to the Distribution Date,
which gap would not exist had the VYGP Business continued to be covered with the
same retroactive dates existing in the VIGC Policies in effect on the
Distribution Date. VYGP and each of its Subsidiaries and Affiliates, as
appropriate, shall be responsible for all administrative and financial matters
relating to insurance policies established and maintained by VYGP and its
Subsidiaries or Affiliates for claims relating to any period on or after the
Distribution Date involving VYGP or any of its Subsidiaries or Affiliates.
Notwithstanding any other agreement or understanding to the contrary, except as
set forth in Section 10.6 with respect to claims administration and financial
administration of the VIGC Policies, neither VIGC nor any of its Subsidiaries or
Affiliates shall have any responsibility for or obligation to VYGP or any of its
Subsidiaries or Affiliates relating to property and casualty insurance matters
for any period, whether prior to, on or after the Distribution Date.
10.5. VYGP DIRECTORS' AND OFFICERS' INSURANCE. VIGC shall use
commercially reasonable efforts to cause the persons currently serving as
officers and/or directors of VIGC or any of its Subsidiaries to be covered for a
period of three (3) years from the Distribution Date by the directors' and
officers' liability insurance policy maintained by VIGC (including corporate
reimbursement) (provided that VIGC may substitute therefore policies of at least
the same coverage and amounts containing terms and conditions that are not less
advantageous than such policy) with respect to matters covered under the
existing policy occurring prior to the Distribution Date that were committed by
such officers and/or directors in their capacity as such; provided, however,
that in no event shall VIGC be required to expend with respect to any year more
than 200% of the current annual premium expended by VIGC (the "Insurance
Amount") to maintain or procure insurance coverage pursuant hereto; and
provided, further, that if VIGC is unable to maintain or obtain the insurance
called for by this Section 10.5, VIGC shall use commercially reasonable efforts
to obtain as much comparable insurance as available for the Insurance Amount. In
the event VIGC or any of its successors or assigns (i) consolidates with or
merges into any other Person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or (ii) transfers or
conveys all or substantially all of its properties and assets to any Person,
then, and in each such case, to the extent necessary, proper provision shall be
made so that the successors and assigns of VIGC assume the obligations set forth
in this Section 10.5. The provisions of this Section 10.5 are intended to be for
the benefit of, and shall be enforceable by, each such officer and director and
his or her heirs and representatives. As provided in Section 12.5, any amount
VYGP is required to pay to VIGC as an indemnity under this Agreement is reduced
to the extent VIGC receives insurance
proceeds from the above coverage, but only to the extent such proceeds are
actually received by VIGC.
10.6. POST-DISTRIBUTION INSURANCE CLAIMS ADMINISTRATION. VIGC and its
Subsidiaries shall have the primary right, responsibility, and authority for
claims administration and financial administration of claims that relate to or
affect the VIGC Policies. Upon notification by VYGP or one of its Subsidiaries
or Affiliates of a claim relating to VYGP or a Subsidiary or Affiliate thereof
under one or more of the VIGC Policies, VIGC shall cooperate with VYGP in
asserting and pursuing coverage and payment for such claim by the appropriate
insurance carrier(s). In asserting and pursuing such coverage and payment, VIGC
shall have sole power and authority to make binding decisions, determinations,
commitments and stipulations on its own behalf and on behalf of VYGP and its
Subsidiaries and Affiliates, which decisions, determinations, commitments and
stipulations shall be final and conclusive if reasonably made to maximize the
overall economic benefit of the VIGC Policies. VYGP and its Subsidiaries and
Affiliates shall assume responsibility for, and shall pay to the appropriate
insurance carriers or otherwise, any premiums, retrospectively-rated premiums,
defense costs, indemnity payments, deductibles, retentions or other charges
(collectively, "Insurance Charges") whenever arising, which shall become due and
payable under the terms and conditions of any applicable VIGC Policy in respect
of any liabilities, losses, claims, actions or occurrences, whenever arising or
becoming known, involving or relating to any of the assets, businesses,
operations or liabilities of VYGP or any of its Subsidiaries or Affiliates,
whether the same relate to the period prior to, on or after the Distribution
Date. To the extent that the terms of any applicable VIGC Policy provide that
VIGC or any of its Subsidiaries shall have an obligation to pay or guarantee the
payment of any Insurance Charges relating to VYGP or any of its Subsidiaries,
VIGC shall be entitled to demand that VYGP make such payment directly to the
Person or entity entitled thereto. In connection with any such demand, VIGC
shall submit to VYGP a copy of any invoice received by VIGC pertaining to such
Insurance Charges together with appropriate supporting documentation, to the
extent available. In the event that VYGP fails to pay any such Insurance Charges
when due and payable, whether at the request of the Person entitled to payment
or upon demand by VIGC, VIGC and its Subsidiaries may (but shall not be required
to) pay such insurance charges for and on behalf of VYGP and, thereafter, VYGP
shall forthwith reimburse VIGC for such payment. Subject to the other provisions
of this Article X, the retention by VIGC of the VIGC Policies and the
responsibility for claims administration and financial administration of such
policies are in no way intended to limit, inhibit or preclude any right of VYGP,
VIGC or any other insured to insurance coverage for any Insured Claims under the
VIGC Policies.
10.7. NON-WAIVER OF RIGHTS TO COVERAGE. An insurance carrier that would
otherwise be obligated to pay any claim shall not be relieved of the
responsibility with respect thereto, or, solely by virtue of the provisions of
this Article X, have any subrogation rights with respect thereto, it being
expressly understood and agreed that no insurance carrier or any third party
shall be entitled to a windfall (i.e., a benefit they would not be entitled to
receive had no Distribution occurred or in the absence of the provisions of this
Article X) by virtue of the provisions hereof.
10.8. SCOPE OF AFFECTED POLICIES OF INSURANCE. The provisions of this
Article X relate solely to matters involving liability, casualty and workers'
compensation insurance, and shall not be construed to affect any obligation of
or impose any obligation on the Parties with respect to
any life, health and accident, dental or medical insurance policies applicable
to any of the officers, directors, employees or other representatives of the
Parties or their Affiliates.
ARTICLE XI EXPENSES
11.1. ALLOCATION OF EXPENSES. (a) Except as otherwise provided in this
Agreement or any other Ancillary Agreement contemplated hereby, or as otherwise
agreed to in writing by the Parties, all fees and expenses incurred in
connection with the transactions contemplated hereby or thereby shall be paid by
VIGC. Specifically, (i) VIGC shall absorb all of the costs associated with the
dedication of internal resources and personnel to such transaction at all times
prior to the Distribution Date, and (ii) VIGC shall pay all fees and expenses
that are related directly to the implementation of the Distribution transactions
on or prior to the Distribution Date.
(b) Without limiting the generality of the foregoing, VIGC shall be
solely responsible for the following costs incurred in connection with the
transactions contemplated hereby: (i) the reasonable fees and expenses of Tax
Counsel in connection with its representation of VIGC; (ii) the reasonable fees
and expenses of investment banks relating to their financial advisory services
rendered to VIGC and VYGP in connection with the Distribution; (iii) the
reasonable fees and expenses of ▇▇▇▇▇▇-▇▇▇▇ in connection with its audit and tax
services rendered to VIGC; (iv) all SEC registration and "blue sky" filing fees
associated with the Registration Statement; (v) the printing, mailing and
distribution of the Information Statement to VIGC's stockholders; (vi) the
reasonable fees and expenses of VYGP's Transfer Agent and registrar relating to
the initial issuance of VYGP Shares as a dividend to VIGC's stockholders; (vii)
the NASDAQ listing fees for the VYGP Shares; (viii) the design and initial
printing of certificates of the VYGP Shares; (ix) the design and initial
printing of certificates of VYGP Common Stock as a dividend to VIGC
stockholders; (x) the development, search and registration of the name "VYGP";
(xi) third party vendors for software licenses; and (xii) various international
professional services related directly to the Distribution.
(c) Notwithstanding Section 11.1(a) (i) above, VYGP shall be solely
responsible for all fees, expenses and other costs incurred in connection with
the transactions contemplated hereby related to: (i) the reasonable fees and
expenses of Legal Counsel in connection with its representation of VYGP related
to the creation of benefits plans; (ii) the reasonable fees and expenses
relating to the syndication and arrangement of revolving credit facilities for
VYGP; and (iii) the reasonable fees or expenses of any financial advisors, other
than those approved by VIGC, retained by VYGP in connection with any "road
shows" or presentations to investors.
ARTICLE XII INDEMNIFICATION
12.1. RELEASE OF PRE-DISTRIBUTION CLAIMS. (a) Except as provided in
Section 12.1(b), effective as of the Distribution Date, each Party does hereby,
on behalf of itself and its respective Subsidiaries and Affiliates, successors
and assigns and all Persons who at any time prior to the Distribution Date have
been shareholders, directors, officers, agents or employees of either Party (in
each case, in their respective capacities as such), remise, release and forever
discharge the other Party, its respective Subsidiaries and Affiliates,
successors and assigns and all Persons who at any time prior to the Distribution
Date have been shareholders, directors, officers, agents or
employees of such Party (in each case, in their respective capacities as such),
and their respective heirs, executors, administrators, successors and assigns,
from any and all Liabilities whatsoever, whether at law or in equity (including
any right of contribution), whether arising under any contract or agreement, by
operation of law or otherwise, existing or arising from any acts or events
occurring or failing to occur or alleged to have occurred or to have failed to
occur or any conditions existing or alleged to have existed on or before the
Distribution Date, including in connection with the transactions and all other
activities to implement the Distribution.
(b) Nothing contained in Section 12.1(a) shall impair any right of any
Person to enforce this Agreement, any Operating Agreement or any agreements,
arrangements, commitments or understandings that are specified in Section 4.5 or
the applicable Schedules thereto not to terminate as of the Distribution Date,
in each case in accordance with its terms. Nothing contained in Section 12.1(a)
shall release any Person from:
(i) any Liability provided in or resulting from any agreement of the
Parties that is specified in Section 4.5 or the applicable Schedules thereto as
not to terminate as of the Distribution Date, or any other Liability specified
in Section .5 as not to terminate as of the Distribution Date;
(ii) any Liability, contingent or otherwise, assumed, transferred,
assigned, retained or allocated to a Party in accordance with, or any other
Liability of any Party under, this Agreement or any Operating Agreement;
(iii) any Liability for the sale, lease, construction, or receipt of
goods, property, or services purchased, obtained, or used in the ordinary course
of business by one Party from the other Party prior to the Distribution Date;
(iv) any Liability for unpaid amounts for products or services or
refunds owing on products or services due on a value-received basis for work
done by one Party at the request or on behalf of the other Party; or
(v) any Liability that the Parties may have with respect to
indemnification or contribution pursuant to this Agreement for claims brought
against the Parties by third Persons, which Liability shall be governed by the
provisions of this Article XIII and, if applicable, the appropriate provisions
of the Operating Agreements.
(c) Neither Party shall make, nor permit any of its Subsidiaries or
Affiliates to make, any claim or demand, or commence any Action asserting any
claim or demand, including any claim of contribution or indemnification, against
the other Party, or any other Person released pursuant to Section 12.1(a), with
respect to any Liability released pursuant to Section 12.1(a).
(d) It is the intent of each of the Parties by virtue of the provisions
of this Section 12.1 to provide for a full and complete release and discharge of
all Liabilities existing or arising from all acts and events occurring or
failing to occur or alleged to have occurred or to have failed to occur and all
conditions existing or alleged to have existed on or before the Distribution
Date, between the Parties (including any contractual agreements or arrangements
existing or alleged to exist between the
Parties on or before the Distribution Date), except as expressly set forth in
Section 12.1(b). At any time, at the reasonable request of either Party, the
other Party shall execute and deliver releases reflecting the provisions hereof.
12.2. INDEMNIFICATION BY VYGP. (a) Except as provided in Section 12.5,
VYGP shall indemnify, defend and hold harmless VIGC and each of its Affiliates,
directors, officers, employees and agents, and each of the heirs, executors,
successors and assigns of any of the foregoing (collectively, the "VIGC
Indemnified Parties"), from and against any and all Expenses or Losses incurred
or suffered by VIGC (and/or one or more of the VIGC Indemnified Parties), in
connection with, relating to, arising out of or due to, directly or indirectly,
any of the following items:
(i) any claim that the information included in the Registration
Statement or the Information Statement that relates to the VYGP
Business or any other information relating to the VYGP Business
provided to VIGC or distributed to third parties by employees of VYGP
or individuals who were employees of the VYGP Business prior to the
Distribution Date, is or was false or misleading with respect to any
material fact or omits or omitted to state any material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, regardless of whether the occurrence, action or other event
giving rise to the applicable matter took place prior to or subsequent
to the Distribution Date;
(ii) the VYGP Business as conducted by VIGC or its Subsidiaries,
Affiliates or predecessors on or at any time prior to the Distribution
Date;
(iii) the Transferred Assets;
(iv) the Assumed Liabilities;
(v) the breach by VYGP or any of its Subsidiaries of any covenant or
agreement set forth in this Agreement, any Operating Agreement or any
Conveyance Instrument, regardless of when or where the loss, claim,
accident, occurrence, event or happening giving rise to the Expense or
Loss took place, or whether any such loss, claim, accident, occurrence,
event or happening is known or unknown, or reported or unreported;
(vi) the employee benefits provided or the actions taken or omitted to
be taken with respect thereto in connection with this Agreement or
otherwise relating to the provision of employee benefits to employees
or former employees of VYGP (or its Subsidiaries), their beneficiaries,
alternate payees or any other person claiming benefits through them
(except to the extent such Expenses or Losses are specifically
allocated to VIGC pursuant to Article IX), including, without
limitation, Expenses or Losses arising in connection with VYGP's
reduction, elimination or failure to provide any benefit provided prior
to or after the Distribution Date to its employees or employees of any
of its Subsidiaries or (B) the transfer of account balances from the
VIGC Savings Plan to the VYGP Savings Plan where such Expenses or
Losses are incurred as a result of (1) any act or omission by VYGP (or
VYGP's representative) or (2) a determination by the IRS that the VYGP
Savings Plan is not a
tax-qualified plan; or
(vii) any use of, access to or reliance upon the technical information
or data made available to VYGP or its Subsidiaries pursuant to Section
14.1.
(b) In addition, except as provided in Section 12.5, VYGP shall
indemnify, defend and hold harmless the VIGC Indemnified Parties from and
against fifty percent (50%) of any Expenses or Losses incurred or suffered by
VIGC (and/or one or more of the VIGC Indemnified Parties), in connection with,
relating to, arising out of or due to, directly or indirectly, any claims of any
infrastructure employee of VIGC to the extent such claim relates to the period
prior to the Distribution Date.
12.3. INDEMNIFICATION BY VIGC. Except as provided in Section 12.5, VIGC
shall indemnify, defend and hold harmless VYGP and each of its Affiliates,
directors, officers, employees and agents, and each of the heirs, executors,
successors and assigns of any of the foregoing (collectively, the "VYGP
Indemnified Parties"), from and against any and all Expenses or Losses incurred
or suffered by VYGP (and/or one or more of the VYGP Indemnified Parties) in
connection with, relating to, arising out of or due to, directly or indirectly,
any of the following items:
(a) the business (other than the VYGP Business) conducted by VIGC or
its Subsidiaries, Affiliates or predecessors on or at any time prior to the
Distribution Date;
(b) the assets owned by VIGC or its Subsidiaries other than the
Transferred Assets;
(c) the Liabilities (including the Retained Liabilities) of VIGC or its
Subsidiaries other than the Assumed Liabilities;
(d) the breach by VIGC or any of its Subsidiaries of any covenant or
agreement set forth in this Agreement, any Operating Agreement or any Conveyance
Instrument, regardless of when or where the loss, claim, accident, occurrence,
event or happening giving rise to the Expense or Loss took place, or whether any
such loss, claim, accident, occurrence, event or happening is known or unknown,
or reported or unreported; and
(e) VIGC's reduction, elimination or failure to provide any benefit
provided prior to or after the Distribution Date to its employees (or employees
of its Subsidiaries), other than a benefit assumed by VYGP pursuant to Article
IX, or any act or omission by VIGC in connection with the transfer of assets and
liabilities from the VIGC Savings Plan to the VYGP Savings Plan.
12.4. APPLICABILITY OF AND LIMITATION ON INDEMNIFICATION. EXCEPT AS
EXPRESSLY PROVIDED HEREIN, THE INDEMNITY OBLIGATION UNDER THIS ARTICLE XII SHALL
APPLY NOTWITHSTANDING ANY INVESTIGATION MADE BY OR ON BEHALF OF ANY INDEMNIFIED
PARTY AND SHALL APPLY WITHOUT REGARD TO WHETHER THE LOSS, LIABILITY, CLAIM,
DAMAGE, COST OR EXPENSE FOR WHICH INDEMNITY IS CLAIMED HEREUNDER IS BASED ON
STRICT LIABILITY, ABSOLUTE LIABILITY OR ARISES AS AN OBLIGATION FOR
CONTRIBUTION.
12.5. ADJUSTMENT OF INDEMNIFIABLE LOSSES. (a) The amount that any Party
(an "Indemnifying Party") is required to pay to any Person entitled to
indemnification hereunder (an "Indemnified Party") shall be reduced (including,
without limitation, retroactively) by any Insurance Proceeds and other amounts
actually recovered by or on behalf of such Indemnified Party in reduction of the
related Expense or Loss. If an Indemnified Party receives a payment (an
"Indemnity Payment") required by this Agreement from an Indemnifying Party in
respect of any Expense or Loss and subsequently actually receives Insurance
Proceeds or other amounts in respect of such Expense or Loss, then such
Indemnified Party shall pay to the Indemnifying Party a sum equal to the lesser
of (1) the after-tax amount of such Insurance Proceeds or other amounts actually
received or (2) the net amount of Indemnity Payments actually received
previously, in each case increased by any actual tax benefit derived by the
Indemnified Party as a result of such payment (with such tax benefit determined
pursuant to Section 12.5(d)). The Indemnified Party agrees that the Indemnifying
Party shall be subrogated to such Indemnified Party under any insurance policy.
(b) An insurer who would otherwise be obligated to pay any claim shall
not be relieved of the responsibility with respect thereto, or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with
respect thereto, it being expressly understood and agreed that no insurer or any
other third party shall be entitled to a "windfall" (i.e., a benefit he or she
would not be entitled to receive in the absence of the indemnification
provisions) by virtue of the indemnification provisions hereof.
(c) If any Indemnified Party realizes a Tax benefit or detriment in one
or more Tax periods by reason of having incurred an Expense or a Loss for which
such Indemnified Party receives an Indemnity Payment from an Indemnifying Party
(or by reason of the receipt of any Indemnity Payment), then such Indemnified
Party shall pay to such Indemnifying Party an amount equal to the Tax benefit or
such Indemnifying Party shall pay to such Indemnified Party an additional amount
equal to the Tax detriment (taking into account, without limitation, any Tax
detriment resulting from the receipt of such additional amounts), as the case
may be. The amount of any Tax benefit or any Tax detriment for a Tax period
realized by an Indemnified Party by reason of having incurred an Expense or a
Loss (or by reason of the receipt of any Indemnity Payment) shall be deemed to
equal the product obtained by multiplying (i) the amount of any deduction or
loss or inclusion in income for such period resulting from such Expense or Loss
(or the receipt of any Indemnity Payment or additional amount), as the case may
be without regard to whether such deduction or loss or such inclusion in income
results in any actual decrease or increase in Tax liability for such period
(with the amount of any deduction or loss or inclusion in income determined in
accordance with Section 12.5(d) below), by (ii) the highest applicable marginal
Tax rate for such period (provided, however, that the amount of any Tax benefit
attributable to an amount that is creditable shall be deemed to equal the amount
of such creditable item). Any payment due under this Section 12.5(c) with
respect to a Tax benefit or Tax detriment realized by an Indemnified Party in a
Tax period shall be due and payable within 30 days from the time the return for
such Tax period is due, without taking into account any extension of time
granted to the Party filing such return.
(d) Amounts paid by VIGC to or for the benefit of VYGP, or by VYGP to
or for the benefit of VIGC, under this Article XII (and under other specified
provisions of this Agreement) shall be treated by the Parties, for all
applicable Tax purposes, as adjustments to the amount of Transferred
Assets.
(e) In the event that an Indemnity Payment shall be denominated in a
currency other than United States dollars, the amount of such payment shall be
translated into United States dollars using the Foreign Exchange Rate for such
currency determined in accordance with the following rules:
(i) with respect to an Expense or a Loss arising from payment by a
financial institution under a guarantee, comfort letter, letter of
credit, foreign exchange contract or similar instrument, the Foreign
Exchange Rate for such currency shall be determined as of the date on
which such financial institution shall have been reimbursed;
(ii) with respect to an Expense or a Loss covered by insurance, the
Foreign Exchange Rate for such currency shall be the Foreign Exchange
Rate employed by the insurance company providing such insurance in
settling such Expense or Loss with the Indemnifying Party; and
(iii) with respect to an Expense or a Loss not covered by clause (i) or
(ii) above, the Foreign Exchange Rate for such currency shall be
determined as of the date that notice of the claim with respect to such
Expense or Loss shall be given to the Indemnified Party.
12.6. PROCEDURES FOR INDEMNIFICATION OF THIRD PARTY CLAIMS.
(a) If any third party shall make any claim or commence any arbitration
proceeding or suit (collectively, a "Third Party Claim") against any one or more
of the Indemnified Parties with respect to which an Indemnified Party intends to
make any claim for indemnification against VYGP under Section 12.2 or against
VIGC under Section 12.3, such Indemnified Party shall promptly give written
notice to the Indemnifying Party describing such Third Party Claim in reasonable
detail, and the following provisions shall apply. Notwithstanding the foregoing,
the failure of any Indemnified Party to provide notice in accordance with this
Section 12.6(a) shall not relieve the related Indemnifying Party of its
obligations under this Article XII, except to the extent that such Indemnifying
Party is actually prejudiced by such failure to provide notice.
(b) The Indemnifying Party shall have 20 business days after receipt of
the notice referred to in Section 12.6(a) to notify the Indemnified Party that
it elects to conduct and control the defense of such Third Party Claim. If the
Indemnifying Party does not give the foregoing notice, the Indemnified Party
shall have the right to defend, contest, settle or compromise such Third Party
Claim in the exercise of its exclusive discretion subject to the provisions of
Section 12.6
(c), and the Indemnifying Party shall, upon request from any of the
Indemnified Parties, promptly pay to such Indemnified Parties in accordance with
the other terms of this Section 12.6
(b) the amount of any Expense or Loss resulting from their liability to
the third party claimant. If the Indemnifying Party gives the foregoing notice,
the Indemnifying Party shall have the right to undertake, conduct and control,
through counsel reasonably acceptable to the Indemnified Party, and at its sole
expense, the conduct and settlement of such Third Party Claim, and the
Indemnified Party shall cooperate with the Indemnifying Party in connection
therewith, provided that
(i) the Indemnifying Party shall not thereby permit any lien, encumbrance or
other adverse charge to thereafter attach to any asset of any Indemnified Party;
(ii) the Indemnifying Party shall not thereby permit any injunction against any
Indemnified Party; (iii) the Indemnifying Party shall permit the Indemnified
Party and counsel chosen by the Indemnified Party and reasonably acceptable to
the Indemnifying Party to monitor such conduct or settlement and shall provide
the Indemnified Party and such counsel with such information regarding such
Third Party Claim as either of them may reasonably request (which request may be
general or specific), but the fees and expenses of such counsel (including
allocated costs of in-house counsel and other personnel) shall be borne by the
Indemnified Party unless (A) the Indemnifying Party and the Indemnified Party
shall have mutually agreed to the retention of such counsel or (B) the named
parties to any such Third Party Claim include the Indemnified Party and the
Indemnifying Party and in the reasonable opinion of counsel to the Indemnified
Party representation of both parties by the same counsel would be inappropriate
due to actual or likely conflicts of interest between them, in either of which
cases the reasonable fees and disbursements of counsel for such Indemnified
Party (including allocated costs of in-house counsel and other personnel) shall
be reimbursed by the Indemnifying Party to the Indemnified Party; and (iv) the
Indemnifying Party shall agree promptly to reimburse to the extent required
under this Article XII the Indemnified Party for the full amount of any Expense
or Loss resulting from such Third Party Claim and all related expenses incurred
by the Indemnified Party. In no event shall the Indemnifying Party, without the
prior written consent of the Indemnified Party, settle or compromise any claim
or consent to the entry of any judgment that does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party a release from all liability in respect of such claim.
If the Indemnifying Party shall not have undertaken the conduct and
control of the defense of any Third Party Claim as provided above, the
Indemnifying Party shall nevertheless be entitled through counsel chosen by the
Indemnifying Party and reasonably acceptable to the Indemnified Party to monitor
the conduct or settlement of such claim by the Indemnified Party, and the
Indemnified Party shall provide the Indemnifying Party and such counsel with
such information regarding such Third Party Claim as either of them may
reasonably request (which request may be general or specific), but all costs and
expenses incurred in connection with such monitoring shall be borne by the
Indemnifying Party.
(c) So long as the Indemnifying Party is contesting any such Third
Party Claim in good faith, the Indemnified Party shall not pay or settle any
such Third Party Claim. Notwithstanding the foregoing, the Indemnified Party
shall have the right to pay or settle any such Third Party Claim, if in such
event, the Indemnified Party shall waive any right to indemnity therefore by the
Indemnifying Party, and no amount in respect thereof shall be claimed as an
Expense or a Loss under this Article XII.
If the Indemnified Party shall have undertaken the conduct and control
of the defense of any Third Party Claim as provided above, the Indemnified
Party, on not less than 30 days prior written notice to the Indemnifying Party,
may make settlement (including payment in full) of such Third Party Claim, and
such settlement shall be binding upon the Parties for the purposes hereof,
unless within said 30-day period the Indemnifying Party shall have requested the
Indemnified Party to contest such Third Party Claim at the expense of the
Indemnifying Party. In such event, the Indemnified Party shall promptly comply
with such request and the Indemnifying Party shall have
the right to direct the defense of such claim or any litigation based thereon
subject to all of the conditions of Section 12.6(b). Notwithstanding anything in
this Section 12.6(c) to the contrary, if the Indemnified Party, in the belief
that a claim may materially and adversely affect it other than as a result of
money damages or other money payments, advises the Indemnifying Party that it
has determined to settle a claim, the Indemnified Party shall have the right to
do so at its own cost and expense, without any requirement to contest such claim
at the request of the Indemnifying Party, but without any right under the
provisions of this Article XII for indemnification by the Indemnifying Party.
(d) To the extent that, with respect to any Claim (as defined in the
Tax Sharing Agreement Exhibit 10.5 ) governed by Article V of the Tax Sharing
Agreement, there is any inconsistency between the provisions of such Article V
and of this Section 12.6, the provisions of Article V of the Tax Sharing
Agreement shall control with respect to such Claim (as defined in the Tax
Sharing Agreement).
12.7. PROCEDURES FOR INDEMNIFICATION OF DIRECT CLAIMS. Any claim for
indemnification on account of an Expense or a Loss made directly by the
Indemnified Party against the Indemnifying Party and that does not result from a
Third Party Claim shall be asserted by written notice from the Indemnified Party
to the Indemnifying Party specifically claiming indemnification hereunder. Such
Indemnifying Party shall have a period of 30 business days after the receipt of
such notice within which to respond thereto. If such Indemnifying Party does not
respond within such 30 business-day period, such Indemnifying Party shall be
deemed to have accepted responsibility to make payment and shall have no further
right to contest the validity of such claim. If such Indemnifying Party does
respond within such 30 business-day periods and rejects such claim in whole or
in part, such Indemnified Party shall be free to pursue resolution as provided
in Article XIII.
12.8. CONTRIBUTION. If the indemnification provided for in this Article
XII is unavailable to an Indemnified Party in respect of any Expense or Loss
arising out of or related to information contained in the Registration Statement
or the Information Statement, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Expense or Loss in such
proportion as is appropriate to reflect the relative fault of the VYGP
Indemnified Parties, on the one hand, or the VIGC Indemnified Parties, on the
other hand, in connection with the statements or omissions that resulted in such
Expense or Loss. The relative fault of any VYGP Indemnified Party, on the one
hand, and of any VIGC Indemnified Party, on the other hand, shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission of a material
fact relates to information about or supplied by the VYGP Business or an VYGP
Indemnified Party, on the one hand, or about or by the Retained Business or a
VIGC Indemnified Party, on the other hand.
12.9. REMEDIES CUMULATIVE. The remedies provided in this Article XII
shall be cumulative and, subject to the provisions of Article XIII below, shall
not preclude assertion by an Indemnified Party of any other rights or the
seeking of any and all other remedies against any Indemnifying Party.
12.10. SURVIVAL. All covenants and agreements of the Parties contained
in this Agreement relating to indemnification shall survive the Distribution
Date indefinitely, unless a specific survival or other applicable period is
expressly set forth herein.
ARTICLE XIII
DISPUTE RESOLUTION
13.1. AGREEMENT TO ARBITRATE. Except as otherwise specifically provided
in any Operating Agreement, the procedures for discussion, negotiation and
arbitration set forth in this Article XIII shall apply to all disputes,
controversies or claims (whether sounding in contract, tort or otherwise) that
may arise out of or relate to, or arise under or in connection with, this
Agreement or any Operating Agreement, or the transactions contemplated hereby or
thereby (including all actions taken in furtherance of the transactions
contemplated hereby or thereby on or prior to the date hereof), or the
commercial or economic relationship of the Parties. Each Party agrees on behalf
of itself and its respective Subsidiaries and Affiliates that the procedures set
forth in this Article XIII shall be the sole and exclusive remedy in connection
with any dispute, controversy or claim relating to any of the foregoing matters
and irrevocably waives any right to commence any Action in or before any
Governmental Authority, except as expressly provided in Section 13.7(b) and
except to the extent provided under the Arbitration Act in the case of judicial
review of arbitration results or awards. EACH PARTY ON BEHALF OF ITSELF AND ITS
RESPECTIVE SUBSIDIARIES AND AFFILIATES IRREVOCABLY WAIVES ANY RIGHT TO ANY TRIAL
IN A COURT THAT WOULD OTHERWISE HAVE JURISDICTION OVER ANY CLAIM, CONTROVERSY OR
DISPUTE SET FORTH IN THE FIRST SENTENCE OF THIS SECTION 13.1.
13.2. ESCALATION AND MEDIATION. (a) The Parties agree to use
commercially reasonable efforts to resolve expeditiously any dispute,
controversy, or claim between them with respect to the matters covered hereby
that may arise from time to time on a mutually acceptable negotiated basis. In
furtherance of the foregoing, any Party involved in a dispute, controversy or
claim may deliver a notice (an "Escalation Notice") demanding an in-person
meeting involving representatives of the Parties at a senior level of management
of the Parties (or if the Parties agree, of the appropriate strategic business
unit or division within such entity). A copy of any such Escalation Notice shall
be given to the General Counsel, or like officer or official, of each Party
involved in the dispute, controversy or claim (which copy shall state that it is
an Escalation Notice pursuant to this Agreement). Any agenda, location or
procedures for such discussions or negotiations between the Parties may be
established by the Parties from time to time; provided, however, that the
Parties shall use commercially reasonable efforts to meet within 30 days of the
Escalation Notice.
(b) The Parties must retain a mediator to aid the Parties in their
discussions and negotiations by informally providing advice to the Parties. Any
opinion expressed by the mediator shall be strictly advisory and shall not be
binding on the Parties, nor shall any opinion expressed by the mediator be
admissible in any arbitration proceeding. The mediator shall be selected by the
Party that did not deliver the applicable Escalation Notice from the list of
individuals set forth on Exhibit I, the names of which individuals were supplied
to the Parties by JAMS/Endispute. Costs of the
mediation shall be borne equally by the Parties involved in the matter, except
that each Party shall be responsible for its own expenses. Mediation is a
prerequisite to a demand for arbitration under Section 13.3.
13.3. PROCEDURES FOR ARBITRATION. (a) At any time after the completion
of the mediation required by Section 13.2(b) (the "Arbitration Demand Date"),
any Party involved in the dispute, controversy or claim (regardless of whether
such Party delivered the Escalation Notice) may, unless the Applicable Deadline
(as hereinafter defined) has occurred, make a written demand (the "Arbitration
Demand Notice") that the dispute be resolved by binding arbitration, which
Arbitration Demand Notice shall be given to the Parties to the dispute,
controversy or claim in the manner set forth in Section 15.9. In the event that
any Party shall deliver an Arbitration Demand Notice to another Party, such
other Party may itself deliver an Arbitration Demand Notice to such first Party
with respect to any related dispute, controversy or claim with respect to which
the Applicable Deadline has not passed without the requirement of delivering an
Escalation Notice. No Party may assert that the failure to resolve any matter
during any discussions or negotiations, the course of conduct during the
discussions or negotiations or the failure to agree on a mutually acceptable
time, agenda, location or procedures for the meeting, in each case, as
contemplated by Section 13.2, is a prerequisite to a demand for arbitration
under this Section 13.3. In the event that any Party delivers an Arbitration
Demand Notice with respect to any dispute, controversy or claim that is the
subject of any then pending arbitration proceeding or of a previously delivered
Arbitration Demand Notice, all such disputes, controversies and claims shall be
resolved in the arbitration proceeding for which an Arbitration Demand Notice
was first delivered unless the arbitrator in his or her sole discretion
determines that it is impracticable or otherwise inadvisable to do so.
(b) Except as may be expressly provided in any Operating Agreement, any
Arbitration Demand Notice may be given until one year and 45 days after the
later of (i) the occurrence of the act or event giving rise to the underlying
claim or (ii) the date on which such act or event was, or should have been, in
the exercise of reasonable due diligence, discovered by the Party asserting the
claim (as applicable and as it may in a particular case be specifically extended
by the Parties in writing, the "Applicable Deadline"). Any discussions,
negotiations or mediations between the Parties pursuant to this Agreement or
otherwise will not toll the Applicable Deadline unless expressly agreed in
writing by the Parties. Each Party agrees on behalf of itself and its respective
Subsidiaries and Affiliates that if an Arbitration Demand Notice with respect to
a dispute, controversy, or claim is not given prior to the expiration of the
Applicable Deadline, such dispute, controversy or claim will be barred. Subject
to Section 13.7(d), upon delivery of an Arbitration Demand Notice pursuant to
Section 13.3(a) prior to the Applicable Deadline, a sole arbitrator in
accordance with the rules set forth in this Article XIII shall decide the
dispute, controversy, or claim.
13.4. SELECTION OF ARBITRATOR. (a) If the amount in dispute is less
than $100,000, the mediator selected by the provisions set forth in Section
13.2(b) above shall also serve as the sole arbitrator. If the amount is dispute
equals or exceeds $100,000, the mediator selected by the provisions set forth in
Section 13.2(b) above shall select a sole arbitrator from a list provided by
JAMS/Endispute. After selection of such sole arbitrator, the mediator shall have
no further role with respect to the dispute. Any arbitrator selected pursuant to
this paragraph (a) shall be disinterested with respect to any of the Parties and
the matter and shall be reasonably competent in the applicable
subject matter.
(b) The sole arbitrator selected pursuant to paragraph (a) above will
set a time for the hearing of the matter which will commence no later than 90
days after the date of appointment of the sole arbitrator pursuant to paragraph
(a) above, and such hearing will be no longer than 30 days (unless in the
judgment of the arbitrator the matter is unusually complex and sophisticated and
thereby requires a longer time, in which event such hearing shall be no longer
than 90 days). The final decision of such arbitrator will be rendered in writing
to the Parties not later than 60 days after the last hearing date, unless
otherwise agreed by the Parties in writing.
13.5. HEARINGS. Within the time period specified in Section 13.4(d),
the matter shall be presented to the arbitrator at a hearing by means of written
submissions of memoranda and verified witness statements, filed simultaneously,
and responses, if necessary in the judgment of the arbitrator or both of the
Parties. If the arbitrator deems it essential to a fair resolution of the
dispute, live cross-examination or direct examination may be permitted, but is
not generally contemplated to be necessary. The arbitrator shall actively manage
the arbitration with a view to achieving a just, speedy, and cost-effective
resolution of the dispute, claim, or controversy. The arbitrator may, in his or
her sole discretion, set time and other limits on the presentation of each
Party's case, its memoranda or other submissions, and refuse to receive any
proffered evidence that the arbitrator, in his or her sole discretion, finds to
be cumulative, unnecessary, irrelevant or of low probative nature. Except as
otherwise set forth herein, any arbitration hereunder will be conducted in
accordance with the JAMS/Endispute Streamlined Rules for Commercial, Real
Estate, and Construction Cases then prevailing. The decision of the arbitrator
will be final and binding on the Parties, and judgment thereon may be had and
will be enforceable in any court having jurisdiction over the Parties.
Arbitration awards will bear interest at an annual rate of the Prime Rate plus
2% per annum. To the extent that the provisions of this Agreement and the
prevailing rules of JAMS/Endispute conflict, the provisions of this Agreement
shall govern.
13.6. DISCOVERY AND CERTAIN OTHER MATTERS. (a) Any Party involved in
the applicable dispute may request limited document production from the other
Party of specific and expressly relevant documents, with the reasonable expenses
of the producing Party incurred in such production paid by the requesting Party.
Any such discovery (which rights to documents shall be substantially less than
document discovery rights prevailing under the Federal Rules of Civil Procedure)
shall be conducted expeditiously and shall not cause the hearing provided for in
Section 13.5 to be adjourned except upon consent of all of the Parties or upon
an extraordinary showing of cause demonstrating that such adjournment is
necessary to permit discovery essential to a Party to the proceeding.
Depositions, interrogatories, or other forms of discovery (other than the
document production set forth above) shall not occur except by consent of all of
the Parties. Disputes concerning the scope of document production and
enforcement of the document production requests will be determined by written
agreement of the Parties or, failing such agreement, will be referred to the
arbitrator for resolution. All discovery requests will be subject to the
Parties' rights to claim any applicable privilege. The arbitrator will adopt
procedures to protect the proprietary rights of the Parties and to maintain the
confidential treatment of the arbitration proceedings (except as may be required
by law). Subject to the foregoing, the arbitrator shall have the power to issue
subpoenas to compel the production of documents relevant to the dispute,
controversy, or claim.
(b) The arbitrator shall have full power and authority to determine
issues of arbitrability but shall otherwise be limited to interpreting or
construing the applicable provisions of this Agreement or any Operating
Agreement, and will have no authority or power to limit, expand, alter, amend,
modify, revoke or suspend any condition or provision of this Agreement or any
Operating Agreement; it being understood, however, that the arbitrator will have
full authority to implement the provisions of this Agreement or any Operating
Agreement and to fashion appropriate remedies for breaches of this Agreement
(including interim or permanent injunctive relief); provided, however, that the
arbitrator shall not have any authority in excess of the authority a court
having jurisdiction over the Parties and the controversy or dispute would have
absent these arbitration provisions. It is the intention of the Parties that in
rendering a decision the arbitrator give effect to the applicable provisions of
this Agreement and the Operating Agreements and follow applicable law (it being
understood and agreed that this sentence shall not give rise to a right of
judicial review of the arbitrator's award).
(c) If a Party fails or refuses to appear at and participate in an
arbitration hearing after due notice, the arbitrator may hear and determine the
controversy upon evidence produced by the appearing Party.
(d) Arbitration costs will be borne equally by each Party involved in
the matter, except that each Party will be responsible for its own attorney's
fees and other costs and expenses, including the costs of witnesses selected by
such Party.
13.7. CERTAIN ADDITIONAL MATTERS. (a) Any arbitration award shall be a
bare award limited to a holding for or against a Party and shall be without
findings as to facts, issues or conclusions of law (including with respect to
any matters relating to the validity or infringement of patents or patent
applications) and shall be without a statement of the reasoning on which the
award rests, but must be in adequate form so that a judgment of a court may be
entered thereupon. Judgment upon any arbitration award hereunder may be entered
in any court having jurisdiction thereof.
(b) Prior to the time at which an arbitrator is appointed pursuant to
Section 13.4, any Party may seek one or more temporary restraining orders in a
court of competent jurisdiction if necessary in order to preserve and protect
the status quo. Neither the request for, nor the grant or denial of, any such
temporary restraining order shall be deemed a waiver of the obligation to
arbitrate as set forth herein, and the arbitrator may dissolve, continue or
modify any such order. Any such temporary restraining order shall remain in
effect until the first to occur of the expiration of the order in accordance
with its terms or the dissolution thereof by the arbitrator.
(c) Except as required by law, the Parties shall hold, and shall cause
their respective officers, directors, employees, agents and other
representatives to hold, the existence, content and result of mediation or
arbitration in confidence in accordance with the provisions of Article XIV and
except as may be required in order to enforce any award. Each of the Parties
shall request that any mediator or arbitrator comply with such confidentiality
requirement.
(d) In the event that at any time the sole arbitrator shall fail to
serve as an arbitrator for any
reason, the Parties shall select a new arbitrator who shall be disinterested as
to the Parties and the matter in accordance with the procedure set forth herein
for the selection of the initial arbitrator. The extent, if any, to which
testimony previously given shall be repeated or as to which the replacement
arbitrator elects to rely on the stenographic record (if there is one) of such
testimony shall be determined by the replacement arbitrator.
13.8. CONTINUITY OF SERVICE AND PERFORMANCE. Unless otherwise agreed in
writing, the Parties will continue to provide service and honor all other
commitments under this Agreement and each Operating Agreement during the course
of dispute resolution pursuant to the provisions of this Article XIII with
respect to all matters not subject to such dispute, controversy or claim.
13.9. LAW GOVERNING ARBITRATION PROCEDURES. The Arbitration Act and
other applicable federal law, only insofar as they relate to the agreement to
arbitrate and any procedures pursuant thereto, shall govern the interpretation
of the provisions of this Article XIII. In all other respects, the
interpretation of this Agreement shall be governed as set forth in Section 15.2.
13.10. CHOICE OF FORUM. Any arbitration hereunder shall take place in
San Diego, California, unless otherwise agreed in writing by the Parties.
ARTICLE XIV ACCESS TO INFORMATION AND SERVICES
14.1. AGREEMENT FOR EXCHANGE OF INFORMATION. (a) At all times from and
after the Distribution Date for a period of (6) months, as soon as reasonably
practicable after written request: (i) VIGC shall afford to VYGP, its
Subsidiaries and their authorized accountants, counsel and other designated
representatives reasonable access during normal business hours to, or, at VYGP's
expense, provide copies of, all records, books, contracts, instruments, data,
documents and other information (collectively, "Information") in the possession
or under the control of VIGC immediately following the Distribution Date that
relates to VYGP, the VYGP Business or the VYGP Employees; and (ii) VYGP shall
afford to VIGC, its Subsidiaries and their authorized accountants, counsel and
other designated representatives reasonable access during normal business hours
to, or, at VIGC's expense, provide copies of, all Information in the possession
or under the control of VYGP immediately following the Distribution Date that
relates to VIGC, the VIGC Business or the VIGC Employees; provided, however,
that in the event that either Party determines that any such provision of or
access to Information could be commercially detrimental, violate any law or
agreement or waive any attorney-client privilege, the Parties shall take all
reasonable measures to permit the compliance with such obligations in a manner
that avoids any such harm or consequence.
(b) Either Party may request Information under Section 14.1(a) (i) to
comply with reporting, disclosure, filing or other requirements imposed on the
requesting party (including under applicable securities or tax laws) by a
Governmental Authority having jurisdiction over the requesting party, (ii) for
use in any other judicial, regulatory, administrative, tax or other proceeding
or in order to satisfy audit, accounting, claims defense, regulatory filings,
litigation, tax or other similar requirements, (iii) for use in compensation,
benefit or welfare plan administration or other bona fide business purposes or
(iv) to comply with its obligations under this Agreement or any Operating
Agreement.
14.2. OWNERSHIP OF INFORMATION. Any Information owned by one Party that
is provided to a requesting Party pursuant to Section 14.1 shall be deemed to
remain the property of the providing Party. Unless specifically set forth
herein, nothing contained in this Agreement shall be construed to grant or
confer rights of license or otherwise in any such Information.
14.3. COMPENSATION FOR PROVIDING INFORMATION. The Party requesting
Information agrees to reimburse the providing Party for the reasonable costs, if
any, of creating, gathering, and copying such Information, to the extent that
such costs are incurred for the benefit of the requesting Party. Except as
otherwise specifically provided in this Agreement, such costs shall be computed
in accordance with the providing Party's standard methodology and procedures.
14.4. RETENTION OF RECORDS. To facilitate the possible exchange of
Information pursuant to this Article XIV after the Distribution Date, the
Parties agree to use commercially reasonable efforts to retain all Information
in their respective possession or control on the Distribution Date in accordance
with the policies and procedures of VIGC as in effect on the Distribution Date.
No party will destroy, or permit any of its Subsidiaries or Affiliates to
destroy, any Information that the other Party may have the right to obtain
pursuant to this Agreement prior to the seventh anniversary of the date hereof,
and thereafter without first using commercially reasonable efforts to notify the
other Party of the proposed destruction and giving the other Party the
opportunity to take possession of such Information prior to such destruction;
provided, however, that in the case of any Information relating to Taxes, such
period shall be extended to one year after the expiration of the applicable
statute of limitations (giving effect to any extensions thereof).
14.5. LIMITATION OF LIABILITY. No Party shall have any liability to the
other Party (i) if any Information exchanged or provided pursuant to this
Agreement that is an estimate or forecast, or that is based on an estimate or
forecast, is found to be inaccurate, in the absence of willful misconduct by the
Party providing such Information, or (ii) if any Information is destroyed after
commercially reasonable efforts to comply with the provisions of Section 14.4.
14.6. PRODUCTION OF WITNESSES. At all times from and after the
Distribution Date, each Party shall use commercially reasonable efforts to make
available to the other Party (without cost (other than reimbursement of actual
out-of-pocket expenses) to, and upon prior written request of, the other Party)
its directors, officers, employees and agents as witnesses to the extent that
the same may reasonably be required by the other Party in connection with any
legal, administrative or other proceeding in which the requesting Party may from
time to time be involved with respect to the VYGP Business, the Retained
Business or any transactions contemplated hereby.
14.7. CONFIDENTIALITY. (a) From and after the Distribution Date, each
of VIGC and VYGP shall hold, and shall cause their respective directors,
officers, employees, agents, consultants, advisors and other representatives to
hold, in strict confidence, with at least the same degree of care that applies
to VIGC's confidential and proprietary information pursuant to policies in
effect as of the Distribution Date, all non-public information concerning or
belonging to the other Party or any of its Subsidiaries or Affiliates obtained
by it prior to the Distribution Date, accessed by it pursuant
to Section 14.1 hereof, or furnished to it by the other Party or any of its
Subsidiaries or Affiliates pursuant to this Agreement or any agreement or
document contemplated hereby, including, without limitation, any trade secrets,
technology, know-how and other non-public, proprietary intellectual property
rights licensed pursuant to the Intellectual Property License Agreements and
shall not release or disclose such information to any other Person, except its
representatives, who shall be bound by the provisions of this Section 14.7;
provided, however, that VIGC and VYGP and their respective directors, officers,
employees, agents, consultants, advisors and other representatives may disclose
such information if, and only to the extent that, (i) a disclosure of such
information is compelled by judicial or administrative process or, in the
opinion of such Party's counsel, by other requirements of law (in which case the
disclosing Party will provide, to the extent practicable under the
circumstances, advance written notice to the other Party of its intent to make
such disclosure), or (ii) such Party can show that such information (A) is
published or is or otherwise becomes available to the general public as part of
the public domain without breach of this Agreement; (B) has been furnished or
made known to the recipient without any obligation to keep it confidential by a
third party under circumstances which are not known to the recipient to involve
a breach of the third party's obligations to a Party hereto; (C) was developed
independently of information furnished to the recipient under this Agreement; or
(D) in the case of information furnished after the Distribution Date, was not
known to the recipient at the time of the Distribution but became known to the
recipient prior to the time of receipt thereof from the other Party.
(b) Each Party acknowledges that the other Party would not have an
adequate remedy at law for the breach by the acknowledging Party of any one or
more of the covenants contained in this Section 14.7 and agrees that, in the
event of such breach, the other Party may, in addition to the other remedies
that may be available to it, apply to a court for an injunction to prevent
breaches of this Section 14.7 and to enforce specifically the terms and
provisions of this Section. Notwithstanding any other Section hereof, the
provisions of this Section 14.7 shall survive the Distribution Date
indefinitely.
14.8. PRIVILEGED MATTERS. (a) Each of VIGC and VYGP agrees to maintain,
preserve and assert all privileges, including, without limitation, privileges
arising under or relating to the attorney-client relationship (which shall
include without limitation the attorney-client and work product privileges), not
heretofore waived, that relate to the VYGP Business and the Transferred Assets
for any period prior to the Distribution Date ("Privilege" or "Privileges").
Each Party agrees that it shall not waive any Privilege that could be asserted
under applicable law without the prior written consent of the other Party. The
rights and obligations created by this Section 14.8 shall apply to all
information relating to the VYGP Business as to which, but for the Distribution,
either Party would have been entitled to assert or did assert the protection of
a Privilege ("Privileged Information"), including without limitation, (i) any
and all information generated prior to the Distribution Date but which, after
the Distribution, is in the possession of either Party; and (ii) all information
generated, received or arising after the Distribution Date that refers to or
relates to Privileged Information generated, received or arising prior to the
Distribution Date.
(b) Upon receipt by either Party of any subpoena, discovery or other
request that may call for the production or disclosure of Privileged Information
or if either Party obtains knowledge that any current or former employee of VIGC
or VYGP s received any subpoena, discovery or other request
that may call for the production or disclosure of Privileged Information, h
Party shall notify promptly the other Party of the existence of the request and
shall provide the other Party a reasonable opportunity to review the information
and to assert any rights it may have under this Section 14.8 or otherwise to
prevent the production or disclosure of Privileged Information. Each Party
agrees that it will not produce or disclose any information that may be covered
by a Privilege under this Section 14.8 unless (i) the other Party has provided
its written consent to such production or disclosure (which consent shall not be
unreasonably withheld), or (ii) 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) VIGC's transfer of books and records and other information to VYGP,
and VIGC's agreement to permit VYGP to possess Privileged Information existing
or generated prior to the Distribution Date, are made in reliance on VYGP's
agreement, as set forth in Sections 14.7 and 14.8, to maintain the
confidentiality of Privileged Information and to assert and maintain all
applicable Privileges. The access to information being granted pursuant to
Section 14.1, the agreement to provide witnesses and individuals pursuant to
Section 14.6 and the transfer of Privileged Information to VYGP pursuant to this
Agreement shall not be deemed a waiver of any Privilege that has been or may be
asserted under this Section 14.8 or otherwise. Nothing in this Agreement shall
operate to reduce, minimize, or condition the rights granted to VIGC in, or the
obligations imposed upon VYGP by, this Section 14.8.
ARTICLE XV MISCELLANEOUS
15.1. ENTIRE AGREEMENT. This Agreement, Ancillary Agreements and the
Operating agreements, including the Schedules and Exhibits referred to herein
and therein and the documents delivered pursuant hereto and thereto, constitute
the entire agreement between the Parties with respect to the subject matter
contained herein or therein, and supersede all prior agreements, negotiations,
discussions, understandings, writings and commitments between the Parties with
respect to such subject matter.
15.2. CHOICE OF LAW AND FORUM. This Agreement ,Ancillary Agreements
shall be governed by and construed and enforced in accordance with the
substantive laws (except for any otherwise applicable conflicts of law
provisions) of the State of California and the federal laws of the United States
of America applicable therein, as though all acts and omissions related hereto
occurred in Illinois. To the extent permissible by law, the Parties hereby
consent to the jurisdiction and venue of such courts. Each Party hereby waives,
releases and agrees not to assert, and agrees to cause its Affiliates to waive,
release and not to assert, any rights such Party or its Affiliates may have
under any foreign law or regulation that would be inconsistent with the terms of
this Agreement as governed by Illinois law.
15.3. AMENDMENT. This Agreement shall not be amended, modified, or
supplemented except by a written instrument signed by an authorized
representative of each of the Parties.
15.4. WAIVER. Any term or provision of this Agreement may be waived,
the Party may extend the time for its performance, or Parties entitled to the
benefit thereof. Any such waiver shall
be validly and sufficiently given for the purposes of this Agreement if, as to
any Party, it is in writing signed by an authorized representative of such
Party. The failure of any Party to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, or in any way
to affect the validity of this Agreement or any part hereof or the right of any
Party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
15.5. PARTIAL INVALIDITY. Wherever possible, each provision hereof
shall be interpreted in such a manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such provision or provisions shall be ineffective to the extent, but
only to the extent, of such invalidity, illegality or unenforceability without
invalidating the remainder of such provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.
15.6. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original instrument, but
all of which shall be considered one and the same agreement, and shall become
binding when one or more counterparts have been signed by and delivered to each
of the Parties.
15.7. SUCCESSORS AND ASSIGNS. (a) This Agreement and each Operating
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and thereto, respectively, and their successors and permitted assigns; provided,
however, that the rights of either Party under this Agreement and each Operating
Agreement shall not be assignable by such Party without the prior written
consent of the other Party. The successors and permitted assigns hereunder shall
include, without limitation, any permitted assignee, as well as the successors
in interest to such permitted assignee (whether by merger, liquidation
(including successive mergers or liquidations) or otherwise).
15.8. THIRD PARTY BENEFICIARIES. Except to the extent otherwise
provided in Section 10.5 or Article XII hereof or in any Operating Agreement,
the provisions of this Agreement and each Operating Agreement are solely for the
benefit of the Parties and their respective Affiliates, successors and permitted
assigns and shall not confer upon any third Person any remedy, claim, liability,
reimbursement or other right in excess of those existing without reference to
this Agreement or any Operating Agreement. Nothing in this Agreement or any
Operating Agreement shall obligate VIGC or VYGP to assist any VYGP Employee to
enforce any rights such employee may have with respect to any of the employee
benefits described in this Agreement.
15.9. NOTICES. All notices, requests, claims, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed given or delivered (i) when delivered personally, (ii) if transmitted by
facsimile when confirmation of transmission is received, (iii) if sent by
registered or certified mail, postage prepaid, return receipt requested, on the
third business day after mailing or (iv) if sent by private courier when
received; and shall be addressed as follows:
If to VIGC, to:
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If to VYGP, to:
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Alternatively, to such other address, as such Party may indicate by a notice
delivered to the other Party.
15.10. PERFORMANCE. Each Party shall cause to be performed, and hereby
guarantees the performance of, all actions, agreements and obligations set forth
herein to be performed by any Subsidiary or Affiliate of such Party.
15.11. FORCE MAJEURE. No Party shall be deemed in fault of this
Agreement Ancillary Agreement or any Operating Agreement to the extent that any
delay or failure in the performance of its obligations under this Agreement or
any Operating Agreement results from any cause beyond its reasonable control and
without its fault or negligence, including, without limitation, acts of God,
acts of civil or military authority, embargoes, epidemics, war, riots,
insurrections, fires, explosions, earthquakes, floods, unusually severe weather
conditions, labor problems or unavailability of parts, or, in the case of
computer systems, any failure in electrical or air conditioning equipment. In
the event of any such excused delay, the time for performance shall be extended
for a period equal to the time lost by reason of the delay.
15.12. NO PUBLIC ANNOUNCEMENT. Neither VIGC nor VYGP shall, without the
approval of the other, make any press release or other public announcement
concerning the transactions contemplated by this Agreement, except as and to the
extent that any such Party shall be so obligated by law or the rules of any
stock exchange or quotation system, in which case the other Party shall be
advised and the Parties shall use commercially reasonable efforts to cause a
mutually agreeable release or announcement to be issued; provided, however, that
the foregoing shall not preclude communications or disclosures necessary to
implement the provisions of this Agreement or to comply with the accounting and
SEC disclosure obligations or the rules of any stock exchange.
15.13. TERMINATION. Notwithstanding any provisions hereof, this
Agreement may be terminated and the Distribution abandoned at any time prior to
the Distribution Date by and in the sole discretion of the Majority Shareholders
of VIGC without the prior the approval of any Person. In the event of such
termination, this Agreement shall forthwith become void and no Party shall have
any liability to any Person by reason of this Agreement, except that VIGC shall
be liable for any costs and expenses, including attorneys' fees, incurred by
VYGP or its Subsidiaries prior to or arising out of such termination.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their authorized representatives as of the date first above written.
Voyager Internet Group . Com
By: /s/s ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇,
Director,
Voyager Group Inc.
By: /s/s ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer