Exhibit 2.2
OPTION AGREEMENT
among
1. United Internet AG, a stock corporation incorporated under German law
with corporate seat in Montabaur, registered in the commercial register
of the local court of Montabaur under HRB 4278,
- hereinafter referred to as the "Seller" -
and
2. Channon Management Limited, a company incorporated under the laws of the
British Virgin Islands, with corporate seat in Tortola, British Virgin
Islands, registered in the company register of British Virgin Islands,
under No. 466516,
- hereinafter referred to as the "Purchaser" -
and
3. DoubleClick Inc., a corporation incorporated under the laws of the State
of Delaware, United States, with corporate seat in New York, New York,
- hereinafter referred to as the "Guarantor" -
- the Seller, the Purchaser and the Guarantor
hereinafter are together referred to as the
"Parties" -
TABLE OF CONTENTS
Page
Recitals.............................................................................1
Article 1 - Put Option...............................................................2
Article 2 - Option Shares............................................................4
Article 3 - Conditions and Termination...............................................8
Article 4 - Purchase Price...........................................................9
Article 5 - Representations and Warranties..........................................10
Article 6 - Breach of Representations or Warranties of Seller and Limitation
of Claims of Purchaser..................................................17
Article 7 - Limitation of Liability.................................................18
Article 8 - Announcement and Communications.........................................19
Article 9 - Costs and Taxes.........................................................19
Article 10 - Guarantee..............................................................19
Article 11 - Further Covenants......................................................20
Article 12 - Miscellaneous..........................................................20
RECITALS
(A) The Seller is a stock corporation incorporated under German law and
listed on the Neuer Markt in Frankfurt am Main, Germany. The Seller is a
holding company for and an investor in, inter alia, young technology
companies, whose area of activity is focused on the commercial
exploitation of the internet.
(B) The Seller holds 77.27% of the shares in AdLINK Internet Media AG, a
company incorporated under the laws of Germany with corporate seat in
Montabaur, registered in the commercial register of Montabaur, under HRB
5432 (hereinafter referred to as the "Company"). The Company is a
corporation active in the Internet marketing business. It has an issued
share capital of Euro 25,750,000 of which 786,875 shares are treasury
stock. Other than the shareholder resolution of May 15, 2001, which has
authorized the repurchase of up to 2,575,000 shares, a conditional
capital of EURO 2,000,000 and an authorized capital of EURO 12,800,000 no
resolutions, whether by management, supervisory board or shareholders
have been passed with a view to increase or decrease the stated capital
or to issue or repurchase any of the shares of the Company.
"Subsidiaries" for the purpose of this Agreement shall mean any company
in which the majority of interests is directly or indirectly held by the
Company.
(C) The Guarantor is a company active in the internet marketing business,
focusing on the provision of a broad range of technology, media, direct
marketing and research solutions to its customers.
(D) The Purchaser is a holding company incorporated under the laws of the
British Virgin Islands. The Purchaser is a wholly owned indirect
subsidiary of the Guarantor.
(E) The Purchaser is interested in acquiring a participation of 15% of the
stated share capital of the Company, amounting to 3,862,500 shares in the
Company (the "Shares"). After the Company has had a positive EBITDA for
at least two out of three consecutive quarters, the Purchaser wishes to
have the option to increase its holdings in the Company by 21% of the
current stated share capital of the Company, amounting to 5,407,500
shares (the "Option Shares"). The Shares shall comprise the shares with
the lowest numbers held by the Seller, until the number of the shares
purchased is reached. The Option Shares shall consist of the shares with
the lowest numbers following the Shares, held by the Seller until the
number of the shares requested is reached.
(F) The shares in the Company are evidenced in global registered
certificates, which are deposited with Clearstream Banking AG. All shares
of the Company have been admitted for trading on the Neuer Markt at the
Frankfurt Stock Exchange.
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(G) The Seller is interested in selling such participation in the Company to
the Purchaser.
This being premised, the contracting parties agree as follows:
Article 1 - Put Option
The Purchaser hereby irrevocably offers to acquire the Shares from the Seller as
follows:
1.1 The Seller shall have the right (hereinafter referred to as the "Put
Option") to sell by unilateral declaration in accordance with Article 1.3
to the Purchaser or a party designated by the Purchaser, provided such
designated party is a wholly owned subsidiary of the Guarantor, and the
Purchaser or such designated party shall be obliged upon such unilateral
declaration to purchase from the Seller, the Shares with commercial
effect as of the Effective Date as defined in Article 1.3 hereof in
accordance with the terms and conditions specified in Articles 3 through
11 hereof.
1.2 The Put Option may be exercised with an Effective Date of any date during
the period from January 15, 2002 to March 31, 2002, both dates inclusive.
1.3 The Put Option has to be exercised by the Seller by written declaration
(hereinafter referred to as the "Exercise Notice") that
(a) is addressed to the Purchaser;
(b) relates to all of the Shares; and
(c) specifies the date with effect as from which the Put
Option is being exercised (the "Effective Date").
1.4 The Put Option may be exercised by executing and delivering an Exercise
Notice not earlier than January 15, 2002 and no later than seven days
before the Effective Date.
1.5 The Put Option shall be deemed to have been exercised on the date on
which the Exercise Notice was sent to the Purchaser with a copy to
DoubleClick Inc., New York, N.Y., legal department, by courier,
registered mail or by confirmed facsimile transmission.
1.6 Upon the exercise of the Put Option by the Seller in accordance with the
provisions in this Article 1, a share sale and purchase agreement shall
be deemed to have been concluded between the Seller and the Purchaser
with the contents set
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out in this Article and Articles 3 to 11 hereof.
1.7 On the Effective Date, the Shares shall be assigned by the Seller to the
Purchaser, subject only to the payment of the Purchase Price in
accordance with Article 4 hereof. The Seller shall instruct the bank, in
the account of which the Shares are being held by the Seller (hereinafter
referred to as the "Depositing Bank"), to transfer the Shares to the bank
account of the Purchaser in return for the Purchase Price
(Wertpapierubertrag mit Gegenwert gegen Empfang). For the purposes of
such transfer, the Purchaser shall open a bank account with a bank, which
itself shall have an account with Clearstream Banking AG.
Along with the title to the Shares, all ancillary rights, including the
right to any profits not yet distributed on the Effective Date, shall be
transferred to the Purchaser.
In case the Put Option is exercised, the purchase price shall amount to
EURO 35.5 Mio.
(in words: Euro thirty five million five hundred thousand)
(herein referred to as the "Purchase Price").
1.8 The Company may make payments to former shareholders of its subsidiaries
in France, Spain, Switzerland and in the United Kingdom arising out of
the acquisition of such Subsidiaries or for the acquisition of minority
interests in such Subsidiaries. If and to the extent such payments made
during the time period of five years after the Date of Signing exceed an
amount of EURO 2.3 million in the aggregate, the Seller shall be obliged
to pay to the Purchaser an amount equaling 36 % of such excess payments.
For a period of five years following the Effective Date and to the extent
legally permissible, the Seller shall annually enquire with the Company
as to the status and payments made with respect to the above mentioned
subsidiaries and minority interests and will submit the received
information to the Purchaser without delay. The Seller shall, to the
extent legally permissible, use its influence as a shareholder with a
view to enabling the Purchaser to review the relevant accounts, books and
records of the Company to fully verify whether the information provided
is correct, or if no information has been provided, to determine the
amounts of the relevant payments.
1.9 The Seller confirms that to the best of its knowledge the Company at the
Date of Signing does not intend to resolve on, or implement, an increase
of its stated share capital until February 28, 2002. If, during the time
period between January 2, 2002, and the Effective Date, the Company
should issue new shares for subscription by its shareholders the seller
may (i) either sell the preemptive rights attaching to the shares, in
which case the net proceeds from such sale shall be
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payable to the Purchaser on the Effective Date, or (ii) exercise such
pre-emptive rights, in which case, upon the exercise of the Put Option,
the Purchaser shall be entitled to request the transfer of such new
shares together with the Shares on the Effective Date and the Purchase
Price therefor shall be increased by the contributions made by the Seller
for such new shares. Alternatively, the Purchaser may request from the
Seller a compensation for the dilution suffered by such capital increase
in the amount of the difference between the issue price of the new shares
and their market value on the first day of trading. In case the Company
issues new shares with the use of company funds (Kapitalerhohung aus
Gesellschaftsmitteln), the number of shares to be transferred upon the
exercise of the Put Option shall be increased by the number of new shares
attributable to the shares.
Article 2 - Option Shares
2.1 The Seller hereby undertakes, upon one or several requests in accordance
with Article 2.2 and subject to the time constraints set forth in Article
2.3, to transfer to the Purchaser, the Option Shares, provided the
Company has shown positive earnings before interest, taxes, all
depreciation, amortization, and one-time items such as restructuring
costs, mergers and acquisition related costs, and other extraordinary
items, determined in accordance with U.S. GAAP ("EBITDA") for the second
time in three consecutive fiscal quarters in its quarterly accounts as
publicly announced (Quartalsabschlu[B]) and provided the Put Option
contained in Article 1 hereof has been exercised by the Seller.
2.2 The Purchaser is entitled to request the transfer of all or part of the
Option Shares from the Seller, if the provisos contained in the Article
2.1 hereof have been met, by written declaration (hereinafter each such
request referred to as a "Transfer Request")
(a) addressed to the Seller and the Escrow Agent; and
(b) naming the number of Option Shares that are subject to the
Transfer Request; and
(c) requesting the transfer of such number of Option Shares.
The Purchaser may not issue more than three Transfer Requests in total.
2.3 The Transfer Requests have to be received by the Seller within 100 days
of the date on which the Company publicly announces for the second time
within three consecutive fiscal quarters a positive EBITDA for the
preceding quarter. If and to the extent Transfer Requests are not
received by the Seller during such period of 100 days after the public
announcement, the right to request the transfer of the
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Option Shares shall expire.
The right to request the transfer of the Option Shares expires if the
Company has not publicly announced a positive EBITDA for two out of three
consecutive fiscal quarters with respect to the eighth full fiscal
quarters following December 31, 2001 or, if a positive EBITDA has been
announced for the seventh or the eighth full fiscal quarter following
December 31, 2001, with respect to the ninth full fiscal quarter
following December 31, 2001.
To the extent legally permissible the Purchaser shall, during the time
period ending three months after the announcement of the quarterly
results for the eighth or ninth, as the case may be, full fiscal quarter
following December 31, 2001 (the "Review Period") be entitled to review
the accounts, books and records of the Company to fully verify whether
the published quarterly results that relate to the period of eight or
nine, as the case may be, fiscal quarters are correct and conform with
U.S. GAAP. The Purchaser may send his professional advisors to conduct
the review. Seller shall ensure that the Purchaser and its advisors are
granted full access to the accounts, books and records of the Company to
conduct the review described in the two preceding sentences. If EBITDA of
the Company has, contrary to the announcements of the Company in fact
been positive for two out of three consecutive quarters, the expiry date
for the requests to transfer the Option shares shall be extended to 100
days after the date on which the Seller expressly acknowledges this fact
in writing to the Purchaser or the date of a final judgment confirming
it, provided the Purchaser has informed the Seller in reasonable detail
about such deviation during the Review Period.
2.4 The Escrow Agent is obliged to transfer title to the Option Shares with
effect as of the 10th day following the receipt of the respective
Transfer Request by the Seller and the Escrow Agent. The Purchaser and
the Escrow Agent or, if applicable, the Seller shall enter into a
transfer deed transferring title to the number of the Option Shares that
is subject of the individual Transfer Request to the Purchaser on such
date. Together with the title to this number of Option Shares, all
ancillary rights, including the right to any profits not yet distributed
shall be transferred. Seller shall take all steps necessary to effect
such transfer.
2.5 The consideration for any and all Option Shares is included in the
compensation and consideration granted to Seller in other parts of this
Agreement. No further consideration shall be payable for the sale and
transfer of the Option Shares. The Purchaser is, however, obliged to
reimburse the Seller for any fees, charges and costs arising out of or in
connection with the transfer of the Option Shares.
2.6 The transfer of the respective number of Option Shares is, in each case
if and to the extent the relevant thresholds are exceeded, subject to the
condition precedent that all notice and filing obligations of all
applicable national and international
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merger control laws are complied with if any of the Parties would be in
breach of applicable antitrust or merger control laws by proceeding
without meeting these obligations.
The parties are obliged to comply with all applicable merger control laws
and to fully co-operate in the filing of the transfer of the Option
Shares as a merger with the respective national and international cartel
authorities, as applicable, without undue delay following the issuance of
the Transfer Request. The filing shall be carried out by the Purchaser in
close cooperation with the Seller. All filings to be submitted by the
Purchaser to the respective national and international cartel authorities
shall require the prior consent of the Seller which shall not be
unreasonably withheld. The Seller shall assist the Purchaser in making
such filing in any way as reasonably requested by the Purchaser.
In the event that a transfer of Option Shares is prohibited, or clearance
not granted, by the respective national or international cartel
authorities, the obligations of the Seller to transfer the Option Shares
and the right of the Purchaser to request the transfer of the Option
Shares shall be considered modified as follows: The Purchaser shall have
the right, at its option, to (i) designate a third party to purchase
these Option Shares; (ii) engage a third party to sell the Option Shares
in one or several block trades; (iii) appoint a trustee that purchases
and holds those Option Shares for the benefit of the Purchaser, provided
that such third party or trustee agrees to be bound, to the extent
required by Article 2 of the shareholders agreement between the Seller
and the Purchaser (the "Shareholders Agreement"), by the obligations
contained in the Shareholders Agreement. The Purchaser shall be entitled
to any compensation paid by third parties for the acquisition of any and
all of the Option Shares. The remainder of this Agreement shall remain
unaffected.
2.7 Provided the Seller has exercised the Put Option contained in Article 1
hereof and without giving regard to the other proviso contained in
Article 2.1 and the conditions set out in Article 2.3, the Purchaser
shall, in addition to rights to request the transfer under Article 2.1
above, also be entitled to issue Transfer Requests and require the
transfer of title to parts or all of the Option Shares under the time
constraints contained in Articles 2.3 second paragraph, 2.4 to 2.6, if:
- the general assembly of the Company has resolved on the
liquidation of the Company, the disposition of all or
substantially all of its assets, a merger into or with any other
entity or any other action under the German Transformation Act
(Umwandlungsgesetz); or
- the general assembly of the Company has resolved on an
extraordinary distribution or another distribution that does not
refer to profits of the
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preceding business year; or
- a non-declared distribution is made to the Seller, or at the
direction of the Seller to a third party, or any contributions are
repaid to the Seller in violation and within the meaning of
Section 57 of the German Stock Corporation Act (Aktiengesetz).
In these events, Transfer Requests can be issued within 100 days of the
occurrence of the events, or in the third case, within 100 days of the
knowledge of the directors of the Purchaser.
2.8 If the situations described in Article 2.7 (first point) have occurred
and the resulting right to request the transfer of all or parts of the
Option Shares has not been exercised, the Option Shares shall be replaced
by such securities, interests, participations or substitutes that are
issued or granted on account of or for the Option Shares.
2.9 Concurrent with the payment of the Purchase Price as set out in Article
1.7, the Seller shall transfer all Option Shares to a German or a US
American Bank to be reasonably agreed upon between the parties (the
"Escrow Agent") to be held in escrow under an escrow agreement to be
reasonably agreed upon between the Parties as a security for the
Purchaser's claims for transfer of title to the Option Shares following
the issuance of Transfer Requests. The Option Shares shall be transferred
so that the Seller can no longer transfer title to the Option Shares and
the escrow agreement shall provide that the Seller is not entitled to
transfer title to the Option Shares. However, the Purchaser may request
that the Escrow Agreement contains provisions according to which, as
between the Purchaser and the Seller, the Seller remains the primary
holder of the Option Shares while they are held in escrow.
2.10 Should the Company increase its stated capital at any time before the
expiry of the potential right of the Purchaser to receive Option Shares,
the Seller will according to the instructions of the Purchaser (unless
performed by the escrow agent): (i) exercise pre-emptive rights against
prior reimbursement of the contribution and increase the number of Option
Shares accordingly; (ii) sell the pre-emptive rights and pay out the
received consideration (plus interest) to the Purchaser at a time
directed by the Purchaser; or (iii) in the case of the issuance of shares
with the use of company funds, increase the number of Option Shares by a
proportional number of shares.
2.11 The Purchaser shall be entitled to sell and transfer its rights to issue
Transfer Requests and to receive Option Shares from the Seller in whole
or in part to any of its Affiliates, provided such Affiliate agrees to be
bound, to the extent required by Article 2 of the Shareholders Agreement,
by the obligations contained in the
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Shareholders Agreement.
2.12 Purchaser shall be entitled to waive any and all of its rights under this
Agreement by unilateral declaration to Seller. The waiver can be declared
with respect to a right in whole or in part, temporarily or indefinitely.
Article 3 - Conditions and Termination
3.1 With the exception of Article 9, which shall be effective as of the
signing hereof, this Agreement and all rights and obligations hereunder
are subject to the conditions precedent that:
(a) the Effective Date under the Business Purchase Agreement
with respect to the European Media Business of the
Guarantor of even date entered into between, among others,
the Company, the Seller and the Purchaser (the "Business
Purchase Agreement") has occurred, and
(b) the Company and/or its Affiliates have (i) fulfilled their
payment obligations that are to be performed at Closing
under Article 7.2 lit. (a), (b), (c) and (d) of the
Business Purchase Agreement and (ii) made a binding and
complete offer in the sufficient form to the Purchaser
and/or its Affiliates (or accepted an offer from the
Purchaser and/or its Affiliates, as the case may be) to
agree on the transfer of the Shares and the Majority
Interests in accordance with Article 7.3 lit. (a) and (f)
of the Business Purchase Agreement and (iii) made a binding
and complete offer to DoubleClick International
TechSolutions Ltd. (or accepted an offer from DoubleClick
International TechSolutions Ltd.) to enter into the DART
Agreement in accordance with Article 7.3 (i) of the
Business Purchase Agreement.
3.2 Should not all of the conditions precedent set forth in Article 3.1 be
met by March 15, 2002, Seller and Purchaser shall be entitled to rescind
this Agreement by written notice to the respective other party with
immediate effect, provided, however, that the Business Purchase Agreement
has been terminated.
3.3 In addition, this Agreement and the share sale and purchase agreement
mentioned in Article 1.6 are subject to the condition subsequent that the
Business Purchase Agreement terminates, whether by rescission (Rucktritt
or Anfechtung) or otherwise, is rescinded or otherwise reversed or is
invalid and the Purchaser and/or any other seller under the Business
Purchase Agreement is obligated to repay the Purchase Price under the
Business Purchase Agreement in full. In
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this case, the Put Option may not be exercised, any transfers of shares
and any payments of monies made pursuant to this Agreement or the share
sale and purchase agreement mentioned in Article 1.6 must be reversed and
the respective transferor or payor shall have a claim for retransfer or
repayment against the respective transferee or payee. If the events set
out in the first sentence occur between the exercise of the Put Option
and the transfer of the Shares, the Put Option shall be deemed not
exercised, cease to exist and no further Exercise Notices may be issued.
3.4 The Purchaser shall be entitled to a proportional reduction of the
Purchase Price under this Agreement and the share sale and purchase
agreement mentioned in Article 1.6 and shall be obliged to simultaneously
retransfer a proportional number of the received shares in the Company to
the extent the Purchaser and/or any other seller under the Business
Purchase Agreement is or becomes obligated to repay parts or all of the
purchase price under the Business Purchase Agreement or to otherwise make
payments in this context to the Company or its minority shareholders. The
repayment obligations described in Sentence 2 of Article 3.3 shall apply
accordingly. Any payment obligations of the Purchaser or any other seller
under the Business Purchase Agreement, expressly or implicitly, contained
in the Business Purchase Agreement, such as damages claims arising out of
a breach of a representation and warranty or a purchase price adjustment,
shall not be considered a partial repayment of the Purchase Price under
the Business Purchase Agreement for the purposes of this Article 3.4.
In the event the Purchaser has disposed of the received Option Shares, so
that the Purchaser does not hold the sufficient number of shares in the
Company available for purposes of retransfer pursuant to Article 3.3 or
3.4, Purchaser may instead of such retransfer make a payment to the
Seller in the amount equal to the weighted average share price for the
five German Banking Days prior to the time when such Purchase Price
reduction is requested.
3.5 To the extent legally permissible, except as expressly provided for in
this Agreement any and all claims of the Parties for a rescission,
termination or other reversal of this Agreement shall be excluded.
Article 4 - Purchase Price
4.1 The Purchase Price shall be due and payable on the Effective Date against
delivery of the Shares. The Purchaser shall transfer the Purchase Price,
when due and payable, in full amount in accordance with Article 1.7 of
this Agreement to an account designated by the Seller. The Purchaser
shall bear the costs of the transfer.
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Any other retention rights or rights of set-off with respect to the
Purchase Price, regardless of their legal basis shall be excluded.
Section 454 of the German Civil Code (Burgerliches Gesetzbuch) shall not
apply.
4.2 Should the Purchase Price or any part thereof not be paid by the
Purchaser when due and payable, the Purchaser shall (in derogation of
Section 284 paragraph 3 of the German Civil Code) immediately be in
default without any further notice from the Seller. In such case, the
Purchaser shall be obliged to pay to the Seller default interest in an
amount of 5% p.a.
Article 5 - Representations and Warranties
Seller hereby represents and warrants as an independent guarantee (Section 305
of the German Civil Code) that the following representations and warranties are
correct as of the Date of Signing (as defined below), unless indicated otherwise
herein, subject to the exceptions disclosed in writing in the Annexes, all such
exceptions to be referenced to a specific Article of this Agreement to which the
exception relates or to otherwise be reasonably apparent that such disclosure
relates to representations hereof not specifically referenced. "Date of Signing"
shall mean the date of signing of this Agreement . For the purposes of this
Article 5, all references to Subsidiaries as of the Effective Date shall not
include those entities transferred to the Company in connection with the
Business Purchase Agreement. Best Knowledge of the Seller shall mean the actual
knowledge of the managing directors of the Seller and the knowledge these
persons would have had after reasonable inquiry and investigation. "Affiliate"
in this Option Agreement shall mean any affiliated enterprise in the meaning of
Sections 15 et. seq. of the German Stock Corporation Act.
5.1 Enforceability, No Conflict
Assuming due authorization, execution and delivery by the other parties
to this Agreement and the conditions set forth therein being met, this
Agreement constitutes a legal, valid and binding obligation of the Seller
as of the Date of Signing and as of the Effective Date, enforceable
against the Seller in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to or
affecting the rights of creditors generally and except that the remedy of
specific performance and injunctive relief and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the
court before which any proceeding therefore may be brought. The Seller
has all necessary corporate power, authority and capacity to execute this
Agreement and to perform its obligations under this Agreement, which
actions have been duly authorized and approved by all necessary corporate
action of the Seller. Neither the execution of this Agreement nor the
consummation or performance of any of the transactions
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contemplated thereby will contravene, in any material respect, any
governmental authorization or order to which Seller is bound or subject,
any provision of the Seller's organizational documents, or any resolution
adopted by its management board or shareholders.
5.2 Corporate
5.2.1 On the Date of Signing and the Effective Date, the business of the
Company is organized as set forth in Annex 5.2.1a. Annex 5.2.1b sets
forth a true, correct and complete list of (a) the issued share capitals
of each of the Company and its Subsidiaries and (b) the direct or
indirect participations of the Seller in the Company. The Shares and the
Option Shares are validly created, are fully paid in and have not been
repaid, neither openly nor concealed, are non-assessable, and are, other
than the restrictions contained in the Articles of Association and the
agreements listed in Annex 5.2.1c or other restrictions arising from
statutory law, freely transferable and free of secondary or other
obligations or restrictions. Any acquisition of minority interests in a
Subsidiary prior to the Effective Date shall not constitute a breach
hereof.
5.2.2 Other than as set forth in Annex 5.2.2a as of the Date of Signing and the
Effective Date, no persons or companies hold any direct or indirect
equity interest of any type whatsoever (including but not limited to
sub-participations and silent partnerships) in the Company, and there are
no claims for the granting of any such interest. The Shares and the
Option Shares are free from any encumbrance and rights of third parties
of any type whatsoever and there are no claims for the granting of such
rights or of the transfer of such participations. Other than as set forth
in Annex 5.2.2b, the Shares and the Option Shares are not affected by
any change of control provisions, pre-emptive rights or rights of first
refusal in the Articles of Association of the Company, in any shareholder
agreement or otherwise.
5.2.3 Except for (i) the Articles of Association of the Company, (ii) as set
forth in Annex 5.2.3, or (iii) any agreements or resolutions contemplated
by the Business Purchase Agreement, as of the Date of Signing and the
Effective Date, there are no agreements or resolutions that will be
binding upon the Purchaser following the Effective Date concerning (a)
the corporate relationship between the Company and its shareholders or
(b) the appointment of members of any board of the Company or its
Subsidiaries, nor are there any obligations to enter into such agreements
or resolutions.
5.2.4 Annex 5.2.4 hereto contains a correct and complete list of (a) all
managing directors of the Company and the Subsidiaries (b) all members of
any supervisory or advisory board or similar bodies, if any, of the
Company and the Subsidiaries
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and (c) all general Powers of Attorney or similar grants of
authorizations granted by the Company or its Subsidiaries.
5.2.5 As of the Date of Signing, no bankruptcy, composition or insolvency
proceedings have been commenced with regard to the Company or its
Subsidiaries, nor has a petition been filed for the commencement of
bankruptcy, composition or insolvency proceedings.
5.2.6 Except for Agreements indicated in Annex 5.2.6, neither the Company nor
any of its Subsidiaries is indebted to, nor does it owe any contractual
commitment or arrangement to, with or for the benefit of, any officer,
director, supervisory or other board member or 5% holder of the Company
or of any of its Subsidiaries (except for amounts due as normal salaries
and bonuses and in reimbursement of ordinary expenses and any amounts due
by any Subsidiary to the Company). Except for normal salaries and bonuses
and reimbursement of ordinary expenses and except as set forth in Annex
5.2.6, since December 31, 2000, neither the Company nor any of its
Subsidiaries has made any payments, loans or advances of any kind, or
paid any dividends or distributions of any kind, to or for the benefit of
any securityholders of the Company, or any of their respective
Affiliates.
5.3 Ownership
5.3.1 To the Best Knowledge of the Seller and as of the Date of Signing, all
tangible property material to the business of the Company and its
Subsidiaries and all tangible assets (that are material for their
respective business) are in good working conditions, subject to normal
wear and tear, and has been adequately maintained and serviced. The
Company and its Subsidiaries have title to all such tangible property and
the tangible assets, free and clear of any liens or encumbrances, except
for those assets that are leased or licensed on normal market terms or
which are subject to usual reservations of title by suppliers pending
payment or other restriction or encumbrance in the ordinary course of
business (collectively, the "Permitted Liens").
5.3.2 As of the Date of Signing and as of the Effective Date, and except as set
forth in Annex 5.3.2, the Company and its Subsidiaries do not hold any
interest in any enterprises other than the Subsidiaries and are under no
obligation, contingent or otherwise, to acquire such interest.
5.3.3 With the consummation of the sale and transfer of the Shares and the
Option Shares, the Seller will, except for any liens and encumbrances
that the Purchaser or any of its Affiliates might have arranged for, will
have effected transfer of full, unrestricted and unencumbered title to
the Shares and the Option Shares.
12
5.4 Financial Statements
5.4.1 The audited consolidated financial statements of the Company and the
Subsidiaries as of December 31, 1999 and 2000 together and the unaudited
consolidated balance sheet of the Company and the Subsidiaries as of
September 30, 2001 (together the "Financial Statements"), have been
prepared with the care of a diligent business person and give a true and
fair view, in all material respects, of the financial position of the
Company and the Subsidiaries as of the dates specified. The Financial
Statements for the business year 1999 in Germany and the Financial
Statements for the business year 2000 and as of Septembre 30, 2001 have
been prepared in accordance with generally accepted accounting principles
in the United States ("U.S. GAAP"), applied on a consistent basis
throughout the periods covered thereby (except as may be indicated in the
notes thereto). The Financial Statements and the Audited Financial
Statements are attached as Annex 5.4.1.
5.4.2 The Financial Statements give a true and fair view, in all material
respects, of the consolidated financial position of the Company and its
Subsidiaries as of the respective dates thereof and a true and fair view,
in all material respects, of the result of operations and cash flows of
the Company and it Subsidiaries as of December 31, 1999 and 2000.
5.4.3 Except for liabilities (a) set forth, or reserved against, in the
Financial Statements, (b) set forth in Annex 5.4.3, (c) disclosed
pursuant to the provisions of this Article 5 or any annex modifying any
representation and warranty set forth in this Article 5, or (d) incurred
in the ordinary course of business consistent with past practice, none of
the Company or its Subsidiaries is subject to any liability (whether
final or contingent) that would have been required by a diligent business
person to be set forth in the Financial Statements that would have a
Material Adverse Effect.
5.5 Employees and Employee Benefits
5.5.1 Annex 5.5.1 lists each employee benefit plan according to which the
Employees (as defined below) are entitled to benefits as of the Date of
Signing and the Effective Date (the " Employee Benefit Plan").
5.5.2 Except as provided for in the accounts as of September 30, 2001, as of
the Effective Date all material contributions (including all employer
contributions and employee salary reduction contributions) which are due
have been made to each such Employee Benefit Plan and all material
premiums or other payments which are due have been paid with respect to
each such Employee Benefit Plan.
5.5.3 Annex 5.5.3.a hereto contains a complete and correct list as of the Date
of Signing of all employees of the Company and its Subsidiaries (the
"Employees"),
13
and shows the gross monthly aggregate amount of salaries, the aggregate
amount of bonuses to be paid in 2001 (assuming a level of achievement of
100%), and the number of Employees that have company cars. Annex 5.5.3.b
lists the collective labor agreements (including shop agreements)
applicable to the employees of the Company and the Subsidiaries and all
other existing agreements concluded between the Company or the
Subsidiaries and trade unions or works councils as of the Date of
Signing.
5.5.4 As of the Date of Signing no more than a total number of 1,103,588 stock
options to shares in the Company have been granted to the Employees and
are outstanding. The strike price for these stock options is EURO 4.96
with respect to 870,088 stock options and EURO 1.84 with respect to
237,500 stock options.
5.5.5 As of the Effective Date, all material social security contributions,
employment related social welfare and other governmental charges, with
regard to the Employees have been paid by the respective employers when
due and in full.
5.6 Litigation
Except as set forth in Annex 5.6, as of the Date of Signing the Company
and its Subsidiaries are not a party to, nor to the Best Knowledge of the
Seller have they been threatened with, any litigation, arbitration
proceedings administrative proceedings or investigations with a value
individually of (i) more than EURO 50,000 with respect to debt collection
matters or (ii) more than EURO 100,000 with respect to all other matters.
As of the Date of Signing, the Company and its Subsidiaries are not
subject to any judgment, decree or settlement in any legal or
administrative proceedings that restricts them in their regular business
activity as conducted on the Date of Signing in any material way.
5.7 Sureties
Except as set forth on Annex 5.7, the Company and its Subsidiaries have
neither issued any guarantees, suretyships or any other similar
securities for any other person's debenture loans, liabilities due to
banks and financial or other institutions or other indebtedness for
borrowed money, with the exception of the Company or its Subsidiaries,
that has not terminated or expired, nor are they jointly and severally
liable for obligations, for which any other person (including the Seller
and its Affiliates) is primarily responsible.
5.8 Insurance
Annex 5.8 sets forth a complete list of all material insurance cover of
the Company and its Subsidiaries. As of the Date of Signing, the
insurance contracts are in full force and effect, and have not been
terminated and all premiums due
14
have been paid.
5.9 Approvals and Licenses
Except where the failure to do so would not have a Material Adverse
Effect, the Company and its Subsidiaries have obtained all administrative
approvals, permits and licenses, which they require for the conduct of
their business as it is conducted as of the Date of Signing. As of the
Date of Signing no circumstances exist which would result in a revocation
or limitation of the approvals, permits and licenses as a consequence of
the consummation of this Agreement or which would lead to the imposition
of conditions to the approvals, permits and licenses which, in each case,
would cause a Material Adverse Effect as a consequence of the
consummation of this Agreement.
5.10 Real Property
5.10.1 None of the Company or its Subsidiaries owns any real property or has any
interests in real property.
5.10.2 Annex 5.10.2 contains a true and complete list of all leases for real
property to which the Company and the Subsidiaries are a party as lessee.
5.11 Material Agreements
5.11.1 None of the Company or its Subsidiaries are party to any one of the
following agreements and commitments which have not yet been completely
fulfilled (herein collectively "Material Agreements"):
(i) loan and credit agreements, or other agreements or instruments
evidencing indebtedness of any of the Company or its Subsidiaries
in excess of EURO 50,000.00 or securing such indebtedness such as
pledges, guarantees, securities or letters of comfort and that
will continue in effect or with respect to which any of the
Company or the Subsidiaries will have any liabilities after the
Effective Date;
(ii) non-compete agreements that restrict any of the Company or the
Subsidiaries from operating their respective businesses as
conducted on the Date of Signing;
(iii) research and development agreements involving an amount in excess
of EURO 20,000.00 per annum;
(iv) trademark and know how license agreements which involve an amount
in excess of EURO 20,000.00 per annum;
15
(v) agreements relating to the acquisition or sale of interests in
other companies or businesses (other than the Company or its
Subsidiaries);
(vi) lease agreements other than car leases and the leases set forth in
Annex 5.10.2, which, individually, provide for annual payments of
EURO 30,000.00 or more;
(vii) contracts or other agreements relating to construction or
acquisition of fixed assets or other capital expenditures
involving an amount in excess of EURO 50,000.00 per annum;
(viii) contracts and other agreements to sell, lease or otherwise dispose
of any assets owned by the Company or its Subsidiaries other than
in the ordinary course of business or involving an amount in
excess of EURO 50,000.00; and
(ix) contracts providing for a payment obligation for or to the Company
or the Subsidiaries in excess of EURO 10,000.00 per annum that
would terminate or could be reasonably expected to be terminated
as a result of the consummation of the transaction contemplated
under this Agreement;
except for the agreements and commitments listed or disclosed in Annex
5.11.1 with an express reference to the individual sub-paragraph above
and except for agreements between the Company and any of its
Subsidiaries.
5.11.2 The Company and its Subsidiaries have, as of the Date of Signing,
complied with their obligations under the Material Agreements in all
material respects. To the Best Knowledge of the Seller, the Material
Agreements are valid and in full force, unless indicated otherwise in
Annex 5.11.2. The transactions contemplated by this Agreement will not
trigger any contractually agreed termination or similar rights for the
other contracting party under any Material Agreement, except as set forth
in Annex 5.11.2.
5.12 Customers/Suppliers
Annex 5.12 contains a complete and correct list showing the names of the
respective other parties of (a) the website customers, which made up 60%
of the turnover of the business of the Company and its Subsidiaries
during the quarter ended September 30, 2001 (the "Top Website Contracts")
and (b) the 20 largest advertising customers (based on revenues to the
business of the Company and its Subsidiaries) for the year 2001 through
September 30, 2001 The non-weighted average revenue split of the Top
Website Contracts for the quarter ended September 30, 2001 was 70 % of
revenues received for advertising on the respective web site payable to
the Web Publisher. No guarantees with regard to
16
payments to Web Publishers have been given in any of the Top Website
Contracts. For the Top Website Contracts, no termination notice has been
received as of September 30, 2001.
5.13 Public Grants
The Company and its Subsidiaries have not received any grants or
subsidies from any governmental, state, municipal or EU authority.
5.14 Transaction Fees
Other than as provided for in this Agreement, the Seller and the Company
do not have any obligation or liability to pay bonuses or other incentive
payments to the directors and/or employees of the Company or its
Subsidiaries solely as a result of the consummation of the transaction
contemplated hereunder for which the Purchaser, the Company or the
Subsidiaries would become liable.
5.15 IP/IT
None of the Company or its Subsidiaries has received notice of any claims
(i) challenging the validity, effectiveness or ownership by the Company
or its Subsidiaries of any of such person's intellectual property rights,
or (ii) to the effect that the use or any other exercise of rights in
such person's intellectual property rights by the Company or its
Subsidiaries through the business or their agents or use by their
customers infringes on any intellectual property right of any third
party.
5.16 Material Adverse Effect
For the purpose of this Article 5, "Material Adverse Effect" means any
change or effect that is materially adverse to the financial condition,
business operations or assets, taken as a whole, of the business.
Article 6 - Breach of Representations or Warranties of Seller and
Limitation of Claims of Purchaser
6.1 If a representation or warranty contained in Article 5 of this Agreement
is untrue or not complied with, the Seller shall, subject to the
following provisions, compensate the Purchaser in an amount of 100 % of
the damages suffered by the Purchaser or, at the choice of the Purchaser,
36 % of the damages suffered by the business as a result thereof.
6.2 The Purchaser shall inform the Seller of any alleged breach of a
representation or warranty under Article 5 and shall set a deadline of at
least one month to enable
17
the Seller to restore conformity with this Agreement. No such request
shall be required in case the Seller is unable to restore conformity or
finally refuses to do so.
6.3 Should the Seller fail, refuse or be unable to restore conformity
pursuant to Article 6.2 above, the Seller shall pay such amount of money
to the Purchaser, that is required to compensate the Purchaser or the
Company for the damage suffered as a result of the breach. The obligation
to compensate for damages shall exist as to 100 % of the damages suffered
by the Purchaser or, at the choice of the Purchaser, 36 % of the total
damages suffered by the Company. The legal principle of
"Vorteilsausgleichung" shall apply.
6.4 The Purchaser shall take all appropriate and reasonable actions to
mitigate the damages of the Purchaser.
6.5 The Purchaser shall have claims based upon a breach of a representation
or warranty only if the individual claim or a series of connected claims
exceeds an amount of EURO 100,000 or the equivalent thereof in a foreign
currency at the then current exchange rate, and, in addition, only if the
aggregate amount of such claims exceeds EURO 500,000.
6.6 Unless provided otherwise herein, the claims of the Purchaser based upon
a breach of a representation or warranty shall be time-barred on June 30,
2003, except for claims of the Purchaser arising out of Article 5.2.1 and
5.2.2 of this Agreement, which shall be time barred 5 years after the
Effective Date.
6.7 Claims of the Purchaser against the Seller arising out of or in
connection with a breach of a representation and warranty contained in
Article 5 with the exception of claims arising out of a breach of
Articles 5.2.1 second sentence or 9.3.3 (which shall be limited to the
Purchase Price) may not in their aggregate exceed the amount of EURO 5
million. Except as expressly provided for in this Agreement, any and all
claims of the Purchaser based on a breach of a representation and
warranty contained in Article 5 hereof for specific performance,
reduction (Minderung) of the purchase price, rescission, whether on the
basis of the law of sales (Wandelung) or general principles (Anfechtung)
and damages based on the violation of any pre-contractual obligations
(culpa in contrahendo), positive breach of contract (positive
Vertragsverletzung) or tort (unerlaubte Handlung) are excluded, to the
extent legally permissable.
Article 7 - Limitation of Liability
Damage claims of the Purchaser against the Seller under this Agreement are
limited to an aggregate maximum amount of EURO 7 million. Payments made by the
Seller under Article 6 thereof, with the exception of claims based on a breach
of Articles 5.2.1
18
second sentence, or 5.3.3 shall reduce such maximum amount. No such cap shall
apply to any claims for specific performance which shall, among others, include
claims under Articles 3.3 and 3.4.
Article 8 - Announcement and Communications
8.1 Purchaser and Seller shall ensure that all communications, oral or
written, with their respective shareholders, customers, and employees
regarding the Tansaction as defined in the Business Purchase Agreement
(together, "Transaction Communications") comply in all material respects
with all applicable laws, and Seller and Purchaser shall provide each
other all information reasonably requested by the respective other party
which is necessary to do so, and, without limiting the generality of the
foregoing, Purchaser and Seller shall ensure that none of the Transaction
Communications contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to
make the statements contained therein not misleading in light of the
circumstances in which they are made.
8.2 Subject to the other paragraphs of this Article 8, Purchaser and Seller
shall not include in the written Transaction Communications any
information with respect to the respective other party or its Affiliates
or associates, the form and substance of which information shall not have
been approved by such other party prior to such inclusion, such approval
not to be unreasonably withheld or delayed.
Both parties shall apply procedures that allow the respective other party
appropriate time to review the Transaction Communication whereby the
legal requirements and circumstances shall be taken into account. With
regard to any other publication or communication, the parties shall
consult with each other prior to making publication or communication.
Article 9 - Costs and Taxes
Any fees and charges (including those incurred in connection with the antitrust
clearances, governmental approvals, filings and the like) payable in connection
with the signing and implementation of this Agreement shall be borne by the
Purchaser. Apart therefrom and subject to any other agreement in the Business
Purchase Agreement, each contractual party shall bear its own costs and taxes
and the costs of its advisors and auditors.
Article 10 - Guarantee
The Purchaser shall provide the Seller with a letter of credit issued by a large
credit institution licensed to conduct banking transactions in Europe, according
to which such
19
credit institution undertakes to pay as principal (selbstschuldnerisch) and upon
first demand of the Seller to Seller the Purchase Price. It may be issued under
the condition precedent that the Estimated Purchase Price under the Business
Purchase Agreement has been paid to the sellers under the Business Purchase
Agreement and that an officer's certificate has been issued by members of the
management board of the Seller, authorized to represent the Seller, confirming
that (i) the Put-Option has been executed and (ii) an amount of EURO 5 million
has been paid to one or more Affiliates of the Purchaser in settlement of the
Financial Debt owed by the business, both as defined in the Business Purchase
Agreement, to the Purchaser or any of its Affiliates. Such letter of credit is
to be delivered to the Seller at the Closing of the Business Purchase Agreement
and shall be returned by the Seller upon payment of the Purchase Price.
Article 11 - Further Covenants
11.1 The Parties hereby conclude with effect as of the Effective Date the
shareholder agreement attached hereto as Annex 11.1 (hereinafter referred
to as the "Shareholder Agreement").
11.2 The Seller and the Company have not, and will not, incur total costs in
excess of an aggregate of EURO 750,000 for their legal, tax and financial
advisors, or any investment banker, broker, finder, or other intermediary
in connection with the preparation, negotiation and implementation of the
Business Purchase Agreement, this Agreement and the business combination
agreement among the Company, the Seller and the Purchaser that are, or
will be, ultimately borne by the Company or any of its wholly or majority
owned Subsidiaries. Seller shall reimburse the respective payor for
payments made in violation of the foregoing sentence.
11.3 Provided the Put Option set out in Article 1 hereof is exercised, the
Seller shall pay to the Company as contribution without consideration,
including in shares, the amount by which the cash and cash equivalents of
the Company on the earlier of February 28, 2002 or the Effective Date
fall short of EURO 59 million. The effect of the negotiation and
implementation of the Business Purchase Agreement (including the
preparing and holding of the shareholder assembly) on the cash position
of the Company shall be disregarded.
11.4 To the extent legally permissible, Seller shall use its influence as a
shareholder with a view to ensure that during the period between the Date
of Signing and the Effective Date the Company conducts its business
consistent with past practices, in particular to the best of its ability
maintains, keeps and preserves its assets.
Article 12 - Miscellaneous
12.1 This Agreement is governed by the laws of the Federal Republic of Germany
20
except for the Uniform Code on the International Sale of Goods.
12.2 Changes and amendments to this Agreement as well as declarations to be
made hereunder shall be valid only if made in writing unless a notarial
deed is legally required. This shall also apply to any change of this
provision.
12.3 All disputes arising under or in connection with this Agreement or any
other agreement executed in connection herewith or in consummation hereof
shall be finally settled by the courts of Frankfurt am Main.
12.4 The headings in this Agreement shall not affect the interpretation
thereof. Unless explicitly noted otherwise, references to Articles and
Annexes shall be to Articles and Annexes of this Agreement.
12.5 All notices, requests, consents, approvals or other communications
hereunder shall be delivered by hand, by courier, by registered mail or
by confirmed facsimile transmission addressed as follows (or to such
other person or destination as a Party may indicate by notice to the
other Parties):
To the Seller:
United Internet AG
Attn: Chief Financial Officer/Finanzvorstand
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
D-56410 Montabaur
Germany
To the Purchaser:
Channon Management Limited
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
P.O. Box 71
Road Town
Tortola
British Virgin Islands
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
With a copy to:
DoubleClick Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
21
U.S.A.
Attention: General Counsel
And a copy to
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
Frankfurter Welle
▇▇ ▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
To the Guarantor:
DoubleClick Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
U.S.A.
Attention: Chief Executive Officer
With a copy to:
DoubleClick Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
U.S.A.
Attention: General Counsel
And a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
Frankfurter Welle
▇▇ ▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
12.6 Should any provision of this Agreement be or become invalid or
unenforceable, the validity of the remainder of this Agreement shall not
be affected thereby. In lieu of the invalid or unenforceable provision, a
fair provision shall apply which to the extent legally permissible, comes
as close as possible to what the parties
22
had intended or would have intended according to the spirit and purpose
of this Agreement if they had considered the matter at the time this
Agreement was executed. The same applies if the provision is invalid
because of the stipulated scope or time period.
The rules of Article 12.6 shall not apply with respect to Articles 3.1,
3.3 and 3.4 hereof; the invalidity or unenforceability of any of the
provisions contained therein will extend to the remainder of this
Agreement and thus this Agreement in its entirety.
12.7 Unless otherwise provided in this Agreement, no rights, obligations or
liabilities hereunder shall be assignable by any party without the prior
written consent of the other parties.
Frankfurt, November 12, 2001
UNITED INTERNET AG:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
CHANNON MANAGEMENT LIMITED:
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------
DOUBLECLICK INC.:
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------
23
