Exhibit 2.01
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of September 8,
1999 (the "Effective Date"), by and among Xxxxxxx.xxx, Inc., a Delaware
corporation with its principal offices at 0000 Xxx Xxxxxx, Xxxxxxxx 0, Xxxxx
Xxxxx, Xxxxxxxxxx 00000 ("Buyer"), The Xxxx Group, Inc., a Delaware corporation
with its principal offices at 00000 Xxxxx Xxxx, Xxxxxxxxxx Xxxxx, Xxxxxxxx
00000-0000 ("Seller"), Thomson Information Licensing Corporation, a Delaware
corporation with its principal offices at Brandywine Corporate Center, 000
Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000 ("TILC") and THI (U.S.) Inc, a
Delaware corporation with its address at c/o The Thomson Corporation, Xxx
Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 ("THI").
R E C I T A L S
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A. Seller is engaged in the operation of a division called the Automotive
Information Center ("AIC") that acquires, develops, markets, distributes and
licenses certain automotive-related data, software products and services (the
"AIC Business").
B. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, certain assets of Seller related to the AIC Business, on the terms and
conditions set forth in this Agreement.
C. Buyer desires to assume certain liabilities associated with the AIC
Business upon the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, Buyer and Seller hereby agree as follows:
1. PURCHASE AND SALE OF ASSETS.
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1.1 Agreement to Sell and Purchase Assets. Subject to the terms and
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conditions of this Agreement, and in reliance on the representations, warranties
and covenants set forth in this Agreement, Seller agrees to sell, assign,
transfer and convey to Buyer at the Closing (as defined in Section 3.3 below),
and Buyer agrees to purchase and acquire from Seller at the Closing, all of
Seller's right, title and interest in and to all of the Assets (as defined
below). The Assets will be sold, assigned, transferred and conveyed to Buyer on
the Closing Date (as hereinafter defined), free and clear of all mortgages,
pledges, liens, licenses, rights of possession, security interests,
restrictions, encumbrances, charges, title retention, conditional sale or other
security arrangements and all claims or agreements of any nature whatsoever,
except for Permitted Liens and as otherwise expressly disclosed in the Seller's
Disclosure Letter. For the purposes of this Agreement, "Permitted Liens" shall
mean (a) liens for current taxes not yet due and payable and (b) such
imperfections in title and other encumbrances that are not material in
character, amount or extent, and do not detract in any material way from the
value or interfere with the use of the subject thereto or affected thereby.
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1.2 Assets Defined. As used in this Agreement, the term "Assets" means,
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collectively, all of the assets, rights and properties of Seller, whether
tangible or intangible, real or personal, owned by Seller and primarily
constituting, or primarily used or useful in connection with, or primarily
related to, the AIC Business, including without limitation those assets, rights
and properties described in the following paragraphs of this Section 1.2, and
except for the Excluded Assets (as defined in Section 1.3 below):
(a) Technology and Intellectual Property. All Seller owned copies of
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documentation, drafts, papers, designs, drawings, schematics, diagrams, models,
prototypes, software (in both source code and object code form and in any media
or format and for all hardware platforms, software platforms and operating
environments) including but not limited to the software products listed in
Schedule 1.2(a)(i) hereto, computer stored data, diskettes, manuscripts and
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other items describing any product, development tools, testing tool or suite,
application, operating system, routine, subroutine, module or other proprietary
technology, together with any derivative works made or developed therefrom, that
are related to or used, developed, sold, marketed or purchased in connection
with the AIC Business and all of Seller's rights, title and interest in and to
all Intellectual Property (as defined in Section 5.7 below) that is solely
related to or used, developed or purchased in connection with the AIC Business
(a complete list of such Intellectual Property is set forth in Schedule
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1.2(a)(ii) hereto).
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(b) AIC Business Records. All extant logs, books, records, files,
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engineering and design drawings, diagrams and other documentation depicting or
specifying the designs of all technology related to the AIC Business, and all
sales literature and sales aids, pictures, product sheets and documentation,
product displays, advertising materials, manuals, computer and electronic data
processing materials and correspondence relating to the AIC Business, and copies
of all Contracts (hereafter defined) with customers and prospective customers of
the AIC Business, (collectively, the "Customer Records") as well as copies of
all licenses relating to the AIC Business; provided that Seller shall retain
title to and ownership of such Customer Records and may retain copies for
Seller's use in compliance with this Agreement.
(c) Trade Names; Trade Secrets; Domain Names. All of the know-how,
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trademarks, trade names, and trade secrets associated with the AIC Business,
including without limitation, the exclusive right to use the trademark
"Xxxxxxxx.xxx," the domain name "Xxxxxxxx.xxx" and any substantially similar
name or variant thereof.
(d) Marketing Information; Customer Lists. All of Seller's customer
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lists (whether current or prior) and customer account histories for customers or
prospective customers of the AIC Business, including all extant data regarding
such customers, and all other marketing, promotional, and sales information,
whether stored in written form, magnetic or electronic media or in any other
form, that have been or now are related to the AIC Business or that have been or
now are used, developed or purchased in connection with the AIC Business,
including all competitive and expense market studies and analyses. Upon Closing,
Buyer shall acquire and have sole and exclusive ownership of, access to, and use
of all assets described in this Section 1.2(d).
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(e) Accounts Receivable. All accounts ands notes receivable (whether
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current or non-current) refunds, deposits, prepayments, or prepaid expenses of
Seller.
(f) Tangible Assets. All equipment, inventory, furniture component
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pieces and other tangible property listed set forth in Schedule 1.2(f) hereto
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(the "Tangible Assets").
(g) Contracts. All right, title and interest in and claims under those
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contracts, leases, agreements, licenses and commitments used in the AIC
Business, including but not limited to all computer and software agreements,
intellectual property rights licenses, independent contractor agreements,
distribution and re-seller agreements, including without limitation those
identified in Section 5.6 of the Seller's Disclosure Letter.
1.3 Excluded Assets. The following assets relating to the operation of the
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AIC Business shall be retained by Seller and shall not be sold, assigned or
transferred to Buyer (the "Excluded Assets"):
(a) Claims by Seller with respect to the Excluded Assets and the
Excluded Liabilities (as defined in Section 2.1), including without limitation
claims for tax refunds and counterclaims with respect to the Excluded
Liabilities;
(b) All contracts of insurance;
(c) All employee benefits plans of any nature;
(d) Cash on hand and in banks, bank accounts, money market holdings,
post office deposits and other cash items;
(e) Corporate minute and stock books and ledgers;
(f) Bank statements, general ledgers, account receivable ledgers,
checkbook registers and tax returns; and
(g) All other assets of Seller related to or used, developed or
purchased in connection with the AIC Business that are listed on Schedule 1.3
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hereto.
1.4 Asset Transfer; Passage of Title. Except as otherwise expressly
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disclosed in the Seller's Disclosure Letter, upon the Closing, title to all of
the Assets shall pass to Buyer; and Seller shall deliver to Buyer possession of
all of the Assets as provided herein, and shall further deliver to Buyer proper
assignments, conveyances and bills of sale sufficient to convey to Buyer good
and marketable title to all the Assets, and, other than for Permitted Liens,
free and clear of all mortgages, pledges, liens, licenses, rights of possession,
security interests, restrictions, encumbrances, charges, title retention,
conditional sale or other security arrangements and all claims or agreements of
any nature whatsoever, as well as such other instruments of conveyance as
counsel for Buyer may reasonably deem necessary or desirable (both at and after
the Closing) to effect or evidence the transfers contemplated hereby.
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2. ASSUMPTION OF LIABILITIES.
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2.1 Buyer shall assume, discharge and perform only the following
liabilities (the "Assumed Liabilities"):
(a) Those liabilities and obligations arising on or after the Closing
Date under the Contracts assigned to Buyer as Assets hereunder (but excluding
any liabilities or obligations arising from acts or omissions occurring prior to
the Closing Date);
(b) All liabilities of Seller shown on the Closing Statement of Net
Assets (as hereafter defined) (including, but not limited to, rent obligations
for AIC offices, severance for employees. trade payables, pro rata payroll
obligations and royalty obligations); and
(c) All liabilities of Seller incurred after the Closing Date.
2.2 Buyer shall not assume or become obligated in any way to pay any
liabilities, debts or obligations of Seller or of the AIC Business not described
above whatsoever other than the Assumed Liabilities (the "Excluded
Liabilities"), including but not limited to any liabilities or obligations now
or hereafter arising from or with respect to, the sale or license of any
products or services of Seller, the termination by Seller of the employment of
any current or future employees of Seller or any of its affiliates, any other
claims brought against Seller arising from Seller's employment of any person,
any duties or obligations under any existing or future employee benefit plans of
Seller or any of its affiliates, any present or future obligations or
liabilities of Seller or any of its affiliates to existing or future employees
of Seller or any of its affiliates under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), the Federal Worker Adjustment
and Retraining Act ("WARN") or any severance pay obligations of Seller or any of
its affiliates, or any obligations or liabilities or arising from any breach or
default by Seller of any contract, agreement or commitment of Seller.
3. PURCHASE PRICE; CLOSING.
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3.1 Purchase Price; Net Asset Adjustment.
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(a) Purchase Price. In consideration of the sale, transfer,
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conveyance and assignment of all the Assets to Buyer at the Closing, Buyer shall
pay to Seller the Purchase Price (hereafter defined) as hereafter provided.
Buyer shall (i) pay to Seller at the Closing in immediately available funds the
sum of Sixteen Million Dollars ($16,000,000) in cash (the "Closing Payment") and
(ii) issue to Seller at the Closing that number of shares of Buyer's Common
Stock, $0.001 par value (the "Shares") calculated by dividing Four Million
Dollars ($4,000,000) by the Closing Price (as hereafter defined) and (iii)
assume the Assumed Liabilities. The "Closing Price" shall equal the average
closing price of one share of Seller Common Stock as quoted on the Nasdaq
National Market over the ten (10) trading days immediately prior to the date of
this Agreement; provided, however, that if such average closing price is higher
than $16.00, then the Closing Price shall equal $16.00 and if such average
closing price is lower than
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$11.00, then the Closing Price shall equal $11.00. The Closing Payment and the
Shares are collectively referred to herein as the "Purchase Price."
(b) Net Asset Adjustment.
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(i) Post Closing Adjustment. For purposes of this Section 3.1,
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the following terms shall have the meanings set forth hereinafter:
(A) "Closing Statement of Net Assets" shall mean the
Statement of Net Assets of the AIC Business as of the Closing Date, prepared by
the Buyer as provided in Section 3.1(b)(ii) hereof.
(B) "Closing Liabilities" shall mean the net book value of
all of the current liabilities of the business, as set forth on the Closing
Statement of Net Assets.
(C) "Closing Net Assets" shall mean the net book value of
all of the current assets of the business (exclusive of cash and cash
equivalents) as of the Closing Date, as set forth on the Closing Statement of
Net Assets, less the Closing Liabilities.
(D) "Net Assets Surplus" shall mean the amount, if any, by
which the Closing Net Assets exceed $250,000.
(E) "Net Assets Deficiency" shall mean the amount, if any,
by which the Net Assets are less than $250,000.
(F) "Post Closing Payment" shall mean the Net Assets Surplus
or the Net Assets Deficiency, as the case may be. In the event of a Net Assets
Surplus, the Buyer shall pay to the Seller an amount equal to the Post Closing
Payment. In the event of a Net Assets Deficiency, the Seller shall pay to the
Buyer an amount equal to the Post Closing Payment.
(ii) Preparation of Closing Statement of Net Assets. After the
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Closing, Seller will prepare the Closing Statement of Net Assets within thirty
(30) days of the Closing Date in accordance with accounting principals set forth
in Schedule 5.8 applied in a consistent manner, and shall promptly deliver the
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Closing Statement of Net Assets to Buyer. Concurrently with the delivery of the
Closing Statement of Net Assets, Seller shall deliver to the Buyer its
calculation of the Net Assets Surplus or the Net Assets Deficiency, if any, and
the Post Closing Payment, if any. Within thirty (30) days after such delivery of
the Closing Statement of Net Assets and the calculations of Post Closing
Payment, Buyer may give written notice of disagreement with the Closing
Statement of Net Assets or the Post Closing Payment to Buyer. If the Buyer shall
give the Seller timely notice of any disagreement, Seller and Buyer will, if
possible, resolve the matters in dispute promptly after the notice thereof. Any
disputed matters that are not resolved by the parties within the 30-day period
following Seller's receipt of such notice of disagreement will be set forth in
writing by Seller and Buyer and such matters shall be submitted to one
arbitrator ("Arbitrator") for resolution. The Arbitrator shall be agreed upon
between the parties and, if the parties are unable to so agree within the 30-day
period following Buyer's receipt of such notice of disagreement, shall be
selected by the American Arbitration Association ("AAA"), with preference being
given by the AAA in making such selection to an independent accounting firm of
nationally recognized standing. The Arbitrator shall consider only those matters
in dispute and shall act promptly to resolve all disputed matters and its
decision with respect thereto shall be final and binding upon the Buyer and the
Seller. If the notice of disagreement is received by the Seller in a timely
manner,
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then the Closing Statement of Net Assets shall be final and binding upon the
parties on the earlier of a) the date the parties resolve in writing any
disputed matters and b) the date any disputed matters are finally resolved in
writing by the Arbitrator. All amounts due shall be paid within ten (10) days of
the date the Closing Statement of Net Assets becomes final. The fees and
expenses, if any, of the Arbitrator shall be shared equally by the parties.
3.2 Securities Law Compliance; Additional Restrictions on Resale.
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(a) Private Placement. The parties to this Agreement intend that Buyer
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shall issue the Shares pursuant to a "private placement" under Regulation D
and/or Section 4(2) of the Securities Act and applicable state securities laws.
The Shares shall constitute "restricted securities" within the meaning of the
Securities Act. The certificates for Shares shall bear appropriate legends to
identify such privately placed shares as being restricted under the Securities
Act, to comply with applicable state securities laws, and, if applicable, to
notice the restrictions on transfer set forth in Section 3.2(c) below. Seller
shall furnish Buyer with all information concerning Seller as may be reasonably
requested in connection with any action contemplated by this Section 3.2(a).
(b) Registration of Shares. Pursuant to the terms of the Registration
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Rights Agreement in substantially the form attached as Exhibit 3.2 (the "Rights
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Agreement"), Buyer shall file with the SEC a shelf registration statement to
provide for the resale of the Shares and any additional securities that become
Registerable Securities (as defined in the Rights Agreement) by Seller. Buyer
shall use commercially reasonable efforts, in accordance with the terms and
conditions of the Rights Agreement, (i) to cause a registration statement to
become effective on or before November 5, 1999 and (ii) to keep such
registration statement continuously effective, except as provided therein.
Seller shall furnish Buyer with all information concerning Seller as may be
reasonably requested in connection with any action contemplated by this Section
3.2(b).
(c) Additional Restrictions on Resale. Resale of the Shares shall be
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subject to the terms and conditions of the Rights Agreement.
3.3 Closing. The consummation of the purchase and sale of the Assets
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contemplated hereby will take place at a closing to be held at the offices of
Buyer's counsel, Fenwick & West, Two Xxxx Xxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx,
Xxxxxxxxxx (the "Closing") on September __, 1999 (the "Closing Date"), provided
all applicable waiting periods under the HSR Act shall have expired or early
termination granted, and all closing conditions are waived or satisfied, or at
such other time or date, and at such place, or by such other means of exchanging
documents, as may be agreed to by the parties hereto.
3.4 Allocation of Purchase Price. The Purchase Price shall be allocated
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among the Assets in accordance with Schedule 3.4 hereof. Seller and Buyer agree
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to report the allocation as provided in applicable Sections of the Internal
Revenue Code of 1986 and regulations promulgated thereunder in accordance with
such allocation and agree to prepare and file all income tax returns in a manner
consistent with such allocation.
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4. REPRESENTATIONS AND WARRANTIES OF BUYER.
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Buyer hereby represents and warrants to Seller that all the following
statements are true, accurate and correct:
4.1 Corporate Organization. Buyer is a corporation duly organized, validly
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existing, and in good standing under the laws of the State of Delaware. Buyer
has all necessary corporate power and authority to enter into this Agreement and
all assignments or other documents that Buyer is required to execute and deliver
hereunder (the "Buyer Ancillary Documents"), and holds all permits, licenses,
orders and approvals of all federal, state and local governmental or regulatory
bodies necessary and required therefor.
4.2 Power and Authority; No Default. The execution, delivery and
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performance by Buyer of this Agreement and the Buyer Ancillary Documents, and
the consummation of all the transactions contemplated hereby and thereby, have
been duly and validly authorized by Buyer by all necessary corporate action of
Buyer's Board of Directors and, if necessary, Buyer's stockholders. This
Agreement and the Buyer Ancillary Documents, when executed and delivered by
Buyer, will be duly and validly executed and delivered and will be the valid and
binding obligations of Buyer, enforceable against Buyer in accordance with their
respective terms, except as enforcement may be limited by applicable bankruptcy,
insolvency or similar laws affecting the rights of creditors generally. Neither
the execution and delivery of this Agreement or the Buyer Ancillary Documents by
Buyer, nor the performance by Buyer of its obligations under this Agreement,
will (i) violate Buyer's Certificate of Incorporation or Bylaws, (ii) result in
a material violation or breach of, or permit any third party to rescind any term
or provision of, or constitute a default under, any loan, note, indenture,
mortgage, deed of trust, security agreement or material contract, license, lease
or other agreement to which Buyer is a party or by which Buyer, or (iii) violate
any law, statute, rule or regulation or order, writ, judgment, injunction or
decree of any court, administrative agency or government body applicable to
Buyer. No filing, authorization or approval, governmental or otherwise, is
necessary to enable Buyer to enter into, and to perform its obligations under,
this Agreement and the Buyer Ancillary Agreements, except for (a) such filings
as may be required to comply with federal and state securities laws and (b) the
filings required by the Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act").
4.3 Valid Issuance of Buyer's Common Stock. The Shares have been duly
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authorized and reserved for issuance and, when issued in accordance with the
terms of this Agreement, will be validly issued, fully paid and non-assessable,
will not be subject to any preemptive or similar rights and will be issued in
compliance with all applicable federal securities laws and pursuant to a valid
exemption from registration under Section 4(2) and/or Rule 506 of Regulation D
of the Securities Act.
4.4 SEC Reports. Buyer has filed all required forms, reports and documents
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with the SEC since its initial public offering on March 22, 1999 including and
not limited to a final Prospectus dated March 22, 1999 (collectively, the "SEC
Reports"), each of which has complied in all material respects with all
applicable requirements of the Securities Act of 1933, as amended, and the rules
and regulations thereunder (the "1933 Act"), and the Securities Exchange
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Act of 1934, as amended, and the rules and regulations thereunder (the "Exchange
Act"), each as in effect on the date so filed. The audited consolidated
financial statements and unaudited consolidated interim financial statements of
Buyer included in its final Prospectus (together with related schedules and
notes) and Quarterly Reports on Form 10-Q comply as to form in all material
respects with the requirements of the 1933 Act and the Exchange Act,
respectively, were prepared in accordance with GAAP consistently applied
throughout the periods specified therein, are correct and complete, and present
fairly, in all material respects, the consolidated financial position and
results of operations of Buyer for the periods specified therein, subject in the
case of the unaudited consolidated interim financial statements to an absence of
footnotes and to normal year-end audit adjustments. The authorized, issued and
outstanding capitalization of Buyer is as set forth in Buyer's SEC Reports as of
the dates of the financial statements or other information included in Buyer's
SEC Reports. The SEC Reports, this Agreement, the exhibits hereto and any
certificates or documents to be delivered to Seller pursuant to this Agreement,
when taken together, do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
contained herein and therein, in light of the circumstances under which such
statements were made, not misleading.
4.5 Taxes. Buyer will pay, when due, any federal, state or local taxes
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attributable to periods after the Effective Date with respect to the Assets or
the AIC Business for all taxes first due after the Closing.
4.6 Availability of Funds. Buyer currently has sufficient immediately
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available funds in cash or cash equivalents and will at the Closing have
sufficient immediately available funds in cash or cash equivalents, to pay the
Purchase Price and to pay any other amounts payable pursuant to this Agreement
and to effect the transactions contemplated hereby.
4.7 Brokerage and Finder's Fees. Neither Buyer nor any of its affiliates
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has employed any broker, finder or agent, or agreed to pay or incurred any
brokerage fee, finder's fee or commission with respect to the transactions
contemplated by this Agreement, or dealt with anyone purporting to act in the
capacity of a broker, finder or agent with respect thereto as a result of which
any claim for a fee can be asserted against Seller.
4.8 No Adverse Change. Except as disclosed in the public filings of the
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Buyer, since June 30, 1999, there has been no actual or threatened material
adverse change in the business, operations, properties, assets, condition
(financial or other) or prospects of the Buyer, or any event that has had or is
likely to have a material adverse effect on the Buyer, and no factor or
condition exists and no event has occurred that would be likely to result in any
such change. Except as disclosed in the public filings of Buyer since June 30,
1999, the Buyer has operated its business in the ordinary course of business and
consistent with past practices in all material respects.
5. REPRESENTATIONS AND WARRANTIES OF SELLER.
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Seller represents and warrants to Buyer that, except as set forth in the
disclosure letter that has been delivered by Seller to Buyer prior to the
Effective Date (the "Seller's Disclosure Letter")(any items disclosed in the
Seller's Disclosure Letter being considered an exception to
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the other representations and warranties not referenced therein if a reasonable
business person who was not familiar with the AIC Business would reasonably
except such item to apply to such other representations and warranties), all of
the following statements are true, accurate and correct in all material
respects:
5.1 Corporate Organization. Seller is a corporation duly incorporated,
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validly existing, and in good standing under the laws of the State of Delaware.
Seller has all necessary corporate power and authority to own and use the
Assets, to operate the AIC Business and to enter into this Agreement and all
assignments or other documents that Seller is required to execute and deliver
hereunder (the "Seller Ancillary Documents" and, together with the Buyer
Ancillary Documents, the "Ancillary Documents"), and holds all permits,
licenses, orders and approvals of all federal, state and local governmental or
regulatory bodies necessary and required therefor. Seller has delivered true and
correct copies of each company's respective Certificate of Incorporation and
Bylaws in effect on the date hereof.
5.2 Power and Authority; No Default Upon Transfer. The execution, delivery
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and performance by Seller of this Agreement and the Seller Ancillary Documents,
and the consummation of all the transactions contemplated hereby and thereby
have been duly and validly authorized, where required, by Seller, by all
necessary corporate action of Seller's Board of Directors and, if necessary,
Seller's stockholders. This Agreement and the Seller Ancillary Documents, when
executed and delivered by Seller, will be duly and validly executed and
delivered and will be the valid and binding obligations of Seller, enforceable
against Seller in accordance with their respective terms, except as enforcement
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the rights of creditors generally. Except as disclosed in Section 5.2 of the
Seller's Disclosure Letter, neither the execution and delivery of this Agreement
or the Seller Ancillary Documents by Seller, nor the performance by Seller of
its obligations under this Agreement, will (i) violate the Certificate of
Incorporation and Bylaws of Seller, (ii) result in a material violation or
breach of, or permit any third party to rescind any term or provision of, or
constitute a default under, any loan, note, indenture, mortgage, deed of trust,
security agreement, lease or material contract, license, lease or other
agreement to which Seller is a party or by which Seller or any of the Assets is
bound or (iii) violate any law, statute, rule or regulation or order, writ,
judgment, injunction or decree of any court, administrative agency or government
body applicable to Seller or the AIC Business. No filing, authorization or
approval, governmental or otherwise, is necessary to enable Seller to enter
into, and to perform its obligations under, this Agreement and the Seller
Ancillary Agreements, except for (a) such filings as may be required to comply
with federal and state securities laws and (b) the filings required by the HSR
Act.
5.3 Title and Condition of Assets. Seller owns all of the Assets. Other
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than for Permitted Liens, Seller has good and marketable title in and to all of
such Assets, except where failure to hold such title would not have a Material
Adverse Effect on the AIC Business. Title to all such Assets is freely
transferable from Seller to Buyer free and clear of all encumbrances without
obtaining the consent or approval of any person, except where failure to hold
such title or the existence of such encumbrance would not have a Material
Adverse Effect on the AIC Business. All of the tangible personal property
included in the Assets is in good working
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condition and repair, ordinary wear and tear excepted, except where failure of
such assets to be in such condition would not have a Material Adverse Effect on
the AIC Business. For the purposes of this Agreement, a "Material Adverse
Effect" shall mean a material adverse change in, or effect on, the AIC Business
or the financial condition of the AIC Business taken as a whole; provided
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however, that the effects of changes that exists on the date hereof and have
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been reflected in this Agreement or disclosed in the Seller's Disclosure Letter
or that are generally applicable to industries in which the AIC Business
operates or the United States economy in generally shall be excluded from such
determination.
5.4 Sufficiency of Assets. The Assets are sufficient to enable Buyer,
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following the Closing, to conduct and operate the AIC Business substantially as
it has been conducted and operated by Seller since January 1, 1999, except that
the AIC Business currently uses the Seller's benefit plans and administration.
5.5 Litigation. As of the date hereof, Seller has received no demand
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regarding any claim, action, suit, arbitration, mediation nor, to Seller's
knowledge, is there pending any investigation, at law or in equity, by way of
arbitration or before any court, governmental department, commission, board or
agency that: (i) could reasonably be expected to contest or challenge Seller's
authority, right or ability to sell, lease, license or convey any of the Assets
(or any Intellectual Property Right thereto); (ii) challenges or contests
Seller's right, title or ownership of any of the Assets (or any Intellectual
Property Right thereto) or seeks to impose an encumbrance on, or a transfer of
title or ownership of, any Asset (or any Intellectual Property Right thereto);
(iii) asserts that any Asset (or any Intellectual Property Rights thereto), or
any action taken by any employee, consultant or contractor of Seller, or any
other subsidiary of Seller with respect to any Asset (or any Intellectual
Property Rights thereto), infringes or misappropriates any intellectual property
rights of any third party; (iv) seeks to enjoin, prevent or materially hinder
operation of the AIC Business, the sale, license, marketing or distribution of
any of the AIC Business products or the consummation of any of the transactions
contemplated by this Agreement or any of the Seller Ancillary Agreements; or (v)
would impair or have a Material Adverse Effect on the AIC Business (or any
Intellectual Property Rights thereto). As of the date hereof, there are no
judgments, decrees, injunctions or orders of any court, governmental department,
commission, agency, instrumentality or arbitrator pending or binding against
Seller which affect any of the Assets or Buyer's ability to hire any employee
that provides services to the AIC Business.
5.6 Contracts and Commitments. Section 5.6 of the Seller's Disclosure
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Letter sets forth a description of (i) all Contracts of Seller related to the
AIC Business, whether written or oral, or the purchase or license of any
Intellectual Property (as defined in Section 5.7 below), both individually and
when combined with related agreements with the same customer or such customer's
agent, that involve over forty thousand dollars ($40,000) and (ii) a true and
correct listing for January 1, 1999 through July 31, 1999, by payer, of all
deposits and fees paid for each AIC Business payer that when aggregated, equals
no less than $40,000. To Seller's knowledge, Seller is not in violation, breach
or default of any of the Contracts required to be listed on Section 5.6 of the
Seller's Disclosure Letter. Seller has delivered to Buyer true and correct copy
of each of the Customer Records. A true and correct copy of Seller's standard
customer product warranty
10
related to the AIC Business and a true and correct accounting of Seller's
warranty claims experience for the AIC Business is set forth on Section 5.6 of
the Seller's Disclosure Letter.
5.7 Intellectual Property.
---------------------
(a) The term "Intellectual Property" means and includes,
collectively, any extant worldwide rights to all patents, patent applications
(including but not limited to continuations, continuations-in-part, divisionals
and reissues), trademarks (whether or not registered), trade names, service
marks (whether or not registered), copyrights (whether or not registered), moral
rights, trademark and service xxxx registrations (and pending applications
therefor), mask works and mask work registrations, computer software in object
and source code form (whether owned by Seller, or authored or developed for
Seller by any of its employees, contractors or agents), licenses, sublicenses,
and franchise agreements of Seller, and all know-how, formulae, recipes,
compositions by matter, processes, techniques, confidential business
information, designs, patterns, shapes, inventions (whether or not patented or
patentable), trade secrets, and other proprietary information (including without
limitation customer lists) and technology owned by or licensed to Seller.
(b) Schedule 1.2(a)(i) contains a true and accurate list of all
------------------
products and services currently offered as part of the AIC Business and
Schedule 1.2(a)(ii) sets forth a true and accurate list of all registered
-------------------
Intellectual Property referred to in Section 1.2(a). Seller owns, possesses, has
the exclusive right to make, use, sell and license, has the right to bring
actions for the infringement of, and where necessary and appropriate to the
operation of the AIC Business, in the reasonable exercise of Seller's judgment,
has made timely and proper application for, all Seller owned Intellectual
Property rights that are used in the AIC Business. Except as may be granted to
customers in the ordinary course of operation of the AIC Business, Seller has
not granted any third party any outstanding licenses or other rights to any of
its Intellectual Property that is used in the AIC Business, and, other than as
disclosed in Section 5.7(b) of the Seller's Disclosure Letter, Seller is not
liable, nor has it made any contract or arrangement whereby it may become
liable, to any person for any royalty or other compensation for the use of any
Intellectual Property that is used in the AIC Business. Except for third party
Intellectual Property, the Intellectual Property that is used in the AIC
Business does not infringe any patent, copyright, moral right, mask work, trade
secret or proprietary right of any third party and, to Seller's knowledge, there
is no basis for such claim known to Seller. For third party Intellectual
Property, to Seller's knowledge, the third party Intellectual Property that is
used in the AIC Business does not infringe any patent, copyright, moral right,
mask work, trade secret or proprietary right of any third party and, to Seller's
knowledge, there is no basis for such claim known to Seller. All employees and
consultants of Seller and any other third parties who have been involved in
product development for the AIC Business have executed invention assignment
agreements or have otherwise conveyed to Seller their right, title and interest
in the product development, and all employees and consultants who have access to
confidential or trade secret information concerning Seller's technology or
products have executed nondisclosure agreements or are otherwise bound by
enforceable obligations of nondisclosure. To the extent such employees and
consultants of Seller or other third parties involved in product development for
11
the AIC Business have executed written agreements, Seller has delivered to Buyer
representative forms for each such Agreement.
(c) "AIC Data Structures" (whether used as a capitalized term or
otherwise) where used in any agreement to which AIC is or has been a party means
and has meant the logical data structures for the database which database has
been marketed by AIC under the trademarks "AutoNet" and "AutoSite" (the "AIC
Database"), including without limitation the organizational and relational
structure of the data records in the AIC Database, and excluding software
applications that manipulate the data and operate on the AIC Data Structures to
achieve particular results, such as the AIC Code Base Pertaining to Equipped
Pricing (as defined below). The conceptual framework for the AIC Data
Structures was created by AIC prior to February of 1996, and the AIC Data
Structures were included in products leased by AIC prior to February of 1996.
The AIC Data Structures have on occasion been licensed to third parties.
(d) The "AIC Code Base Pertaining to Equipped Pricing" is proprietary
software code for pricing automobiles designed and authored by AIC and based on
algorithms and a methodology invented by AIC, and includes but is not limited to
the AIC Package Trace Creation Algorithm, the AIC Package Trace Reduction
Algorithm, the AIC Package Trace Combination Algorithm, and the AIC Equipped
Pricing Code which generates a pricing schedule for the lowest priced vehicle
meeting a categorical equipment criteria. The AIC Code Base Pertaining to
Equipped Pricing operates on the AIC Data Structures. The foundation AIC Code
Base Pertaining to Equipped Pricing was authored by AIC prior to February of
1996, it has been improved on multiple occasions since 1996, and the source code
of the AIC Code Base Pertaining to Equipped Pricing has not been licensed to any
third party and has been maintained as a trade secret. The concepts underlying
the AIC Code Base Pertaining to Equipped Pricing have been discussed with AIC
Licensees.
(e) All software components involving source code developed by Seller
that are contained in the Assets which could be adversely affected by the Year
2000 challenge have been and will be tested and are, or will be by September 30,
1999, fully capable of providing accurate results using data having date ranges
spanning the twentieth (20th) and twenty-first (21st) centuries (i.e., years
1900-2099) ("Millennium Compliant"), where used with third party systems,
software and hardware that are also Millennium Compliant. Based on the
foregoing, all software components involving source code developed by Seller
that are contained in the Assets can (i) manage and manipulate data involving
all dates from the 20th and 21st centuries without functional or data
abnormality related to such dates; (ii) manage and manipulate data involving all
dates from the 20th and 21st centuries without inaccurate results related to
such dates; and (iii) have user interfaces which are capable of distinguishing
between dates from the 20th and 21st centuries.
5.8 Seller Statement of Net Assets. Seller has delivered to Buyer copies
------------------------------
of: (a) an unaudited statement of net assets as of July 31, 1999 (the "Statement
of Net Assets Date") for the AIC Business (the "Statement of Net Assets"),
copies of which are attached hereto in Section 5.8 of the Seller's Disclosure
---------------------------
Letter. The Statement of Net Assets: (i) has been prepared in accordance with
------
the books and records of Seller; (ii) fairly presents in all material respects
each
12
such company's financial condition at the date therein indicated and the results
of operations for the period therein specified; and (iii) have been prepared in
accordance with the accounting principals set forth in Section 5.8
of the Seller's Disclosure Letter, consistently applied. Except as set forth in
---------------------------------
the Statement of Net Assets or disclosed on the Seller's Disclosure Letter,
Seller does not have any debt, obligation, duty or liability of any nature
including any unknown, undisclosed, unmatured, unaccrued, unasserted,
contingent, indirect, conditional, implied, vicarious, derivative, joint,
several or secondary liability, regardless of whether such debt, obligation,
duty or liability related to the AIC Business that (i) would be required to be
disclosed on a balance sheet prepared in accordance with the accounting
principals set forth in Section 5.8 of the Seller's Disclosure Letter,
---------------------------------
consistently applied, as qualified herein, (ii) is immediately due and payable
or (iii) was incurred after the Statement of Net Assets Date and before the
Closing Date.
5.9 No Adverse Change. Since the Statement of Net Assets Date:
-----------------
(a) there has been no actual or threatened material adverse change
in the financial condition or results of operation, the AIC Business or the
Assets or any event, condition or state of facts, in either case that is, or
would result in a material adverse change in the Assets or the AIC Business or
the prospects for the AIC Business;
(b) there has not been any sale or other disposition, except in the
ordinary course of business of any of the Assets, or any encumbrance placed on
the Assets; and
(c) Seller has operated the AIC Business in the ordinary course.
5.10 Brokerage and Finder's Fees. Neither Seller nor any of its respective
---------------------------
affiliates has employed any broker, finder or agent, or agreed to pay or
incurred any brokerage fee, finder's fee or commission with respect to the
transactions contemplated by this Agreement other than a bonus payable to Xxxxx
Xxxxxx, or dealt with anyone purporting to act in the capacity of a broker,
finder or agent with respect thereto as a result of which any claim for a fee
can be asserted against Buyer.
5.11 Compliance with Laws. In the operation of the AIC Business. Seller
--------------------
has, to Seller's knowledge, duly complied with all applicable laws, rules,
regulations and orders of federal, state, local and foreign governments
(including but not limited to all export control laws and regulations of the
United States of America or any governmental, authority or agency of the United
States government), except where the failure to comply would not result in a
Material Adverse Effect with regard to the Assets or the AIC Business, and
Seller is not in default with respect to any order, judgment, writ, injunction,
decree, award, rule or regulation of any court, governmental or regulatory body
or arbitrator which restrains or limits the operations of the AIC Business or
the use of the Assets.
5.12 Taxes. At the Closing, and upon the date of any subsequent transfer
-----
of Assets to Buyer in accordance with this Agreement, other than for liens for
current taxes not yet due and payable, there will be no federal, state or local
tax liens against any of the Assets to be
13
transferred to Buyer hereunder. Seller has paid or will pay, when due, any
federal, state or local taxes attributable to periods prior to the Effective
Date with respect to the Assets or the AIC Business which, if unpaid, may result
in a lien against any of the Assets.
5.13 Employees; Employee Benefit Plans. Attached hereto as Section 5.13 of
---------------------------------
the Seller's Disclosure Letter is a complete list of Seller's employees whose
work relates to the AIC Business as of the Closing, including a description of
the title of each such employee, the current compensation payable to each such
employee, the date of hire and the date and amount of last compensation
adjustment and any contract, agreement, understanding or ongoing commitment of
Seller to such employee, whether or not in written form. Other than as disclosed
on Section 5.13 of the Seller's Disclosure Letter, Seller has no pension,
retirement, profit sharing, deferred compensation agreements, severance, stock,
stock options, bonus or other incentive plans or other employee benefit plans or
other employee benefit plans or arrangements. maintained by Seller for any of
its employees, including all "Employee Benefit Plans" as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
5.14 Accounts Receivable. The accounts receivable set forth on the
-------------------
Statement of Net Assets, and all accounts receivable arising since the Statement
of Net Assets Date, represent bona fide claims of Seller against debtors for
sales, services performed or other charges arising on or before the date hereof,
and all the goods delivered and services performed which gave rise to said
accounts were delivered or performed in accordance with the applicable orders,
contracts or customer requirements. To Seller's knowledge, said accounts
receivable are subject to no defenses, counterclaims or rights of setoff and are
fully collectible in the ordinary course of business without cost in collection
efforts therefor, except to the extent of the appropriate reserves for bad debts
on accounts receivable as set forth on the Statement of Net Assets and, in the
case of accounts receivable arising since the Statement of Net Assets Date, to
the extent of a reasonable reserve rate for bad debts on accounts receivable
which is not greater than the rate reflected by the reserve for bad debts on the
Statement of Net Assets.
5.15 No Other Agreements to Sell the Assets. Neither Seller nor any of its
--------------------------------------
affiliates has any commitment or legal obligation, absolute or contingent, to
any other person or firm other than the Buyer to sell, assign, transfer or
effect a sale of any of the Assets (other than inventory in the ordinary course
of business), to sell or effect a sale of the capital stock of Seller, to effect
any merger, consolidation, liquidation, dissolution or other reorganization of
Seller, or to enter into any agreement or cause the entering into of an
agreement with respect to any of the foregoing.
5.16 Books and Records. The books, records and accounts of Seller (i) are
-----------------
in all material respects true, complete and correct, (ii) have been maintained
in accordance with good business practices on a basis consistent with prior
years, (iii) are stated in reasonable detail and accurately and fairly reflect
the transactions and dispositions of the assets of Seller, and (iv) accurately
and fairly reflect the basis for the Statement of Net Assets.
5.17 Purchase for Own Account. The Shares to be acquired as part of the
------------------------
Purchase Price hereunder will be acquired for investment for Seller's own
account, not as a nominee or
14
agent, and not with a view to the public resale or distribution thereof within
the meaning of the 1933 Act, except in compliance with the provisions of the
1933 Act or an exemption therefrom. Seller also represents that Seller has not
been formed for the specific purpose of acquiring Shares.
5.18 Disclosure of Information. Seller has had an opportunity to ask
-------------------------
questions and receive answers from Buyer regarding the terms and conditions of
the offering of the Shares and to obtain additional information (to the extent
Buyer possessed such information or could acquire it without unreasonable effort
or expense) necessary to verify any information furnished to Seller or to which
Seller had access. The foregoing, however, does not in any way limit or modify
the representations and warranties made by Buyer in Section 4.
5.19 Investment Experience. Seller understands that the purchase of the
---------------------
Shares involves substantial risk. Seller: (i) has experience as an investor in
securities of companies in the Buyer's stage of development and acknowledges
that Seller can bear the economic risk of Seller's investment in the Shares for
an indefinite period of time and has such knowledge and experience in financial
or business matters that Seller is capable of evaluating the merits and risks of
this investment in the Shares and protecting its own interests in connection
with this investment and/or (ii) has a preexisting personal or business
relationship with Buyer and certain of its officers, directors or controlling
persons of a nature and duration that enables Seller to be aware of the
character, business acumen and financial circumstances of such persons.
5.20 Accredited Seller Status. Seller is an "accredited investor" as
------------------------
defined in Rule 501(a) under the 1933 Act.
5.21 Restricted Securities. Seller understands that the Shares are
---------------------
characterized as "restricted securities" under the 1933 Act inasmuch as they are
being acquired from Buyer in a transaction not involving a public offering and
that under the 1933 Act and applicable regulations thereunder such securities
may be resold without registration under the 1933 Act only in certain limited
circumstances. In this connection, Seller represents that Seller is familiar
with Rule 144 of the U.S. Securities and Exchange Commission, as presently in
effect, and understands the resale limitations imposed thereby and by the 0000
Xxx. The foregoing shall not be deemed to effect the obligations of the Buyer
under the Rights Agreement.
5.22 Further Limitations on Disposition. Without in any way limiting the
----------------------------------
representations set forth above, Seller further agrees not to make any
disposition of all or any portion of the Shares unless and until: (a) there is
then in effect a registration statement under the 1933 Act covering such
proposed disposition and such disposition is made in accordance with such
registration statement; or (b) (i) Seller shall have notified Buyer of the
proposed disposition, and (ii) Seller shall have furnished Buyer, at the expense
of Seller or its transferee, with an opinion of counsel, reasonably satisfactory
to Buyer, that such disposition will not require registration of such securities
under the 1933 Act.
5.23 Material Misstatements or Omissions. No representation or warranty by
-----------------------------------
Seller in this Agreement contains any untrue statement of a material fact, or
omits to state, a material fact necessary to make any statement of facts
contained herein not materially misleading.
15
5.24 Express Representations and Warranties. EXCEPT FOR THE EXPRESS
--------------------------------------
REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE 5 OF THIS AGREEMENT, THE
ASSETS ARE BEING CONVEYED TO BUYER ON AN "AS IS, WHERE IS, WITH ALL FAULTS"
BASIS. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN
SECTION 5 OF THIS AGREEMENT, SELLER MAKES NO REPRESENTATION OR WARRANTY AND
EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, RELATING TO THE
ASSETS INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
5.A. REPRESENTATIONS AND WARRANTIES OF TILC.
--------------------------------------
TILC gives, except as set forth in Seller's Disclosure Letter (any items
disclosed in the Seller's Disclosure Letter being considered an exception to the
other representations and warranties not referenced therein if a reasonable
business person who was not familiar with the AIC Business would reasonably
except such item to apply to such other representations and warranties), the
following foregoing representations and warranties, for itself, and only as
related to trademark Assets: 5.1, 5.2, 5.3, 5.5, 5.7, 5.11, 5.16, 5.18, 5.23 and
5.24.
5.B. REPRESENTATIONS AND WARRANTIES OF THI.
-------------------------------------
THI gives, except as set forth in Seller's Disclosure Letter (any items
disclosed in the Seller's Disclosure Letter being considered an exception to the
other representations and warranties not referenced therein if a reasonable
business person who was not familiar with the AIC Business would reasonably
except such item to apply to such other representations and warranties), the
following foregoing representations and warranties, for itself: 5.1, 5.2, 5.23
and 5.24.
6. MUTUAL COVENANTS.
----------------
6.1 Public Announcement.
-------------------
(a) Neither party shall make any public disclosure regarding the
negotiation of the transactions contemplated by this Agreement unless, in the
reasonable opinion of each other party's counsel, such disclosure is required by
law, in which event the other party shall have a reasonable opportunity to
comment on any public disclosure before it is made. Buyer and Seller will
cooperate to prepare a joint press release promptly after the date of this
Agreement.
(b) From the Effective Date until the Closing, Seller shall take
reasonable actions necessary to avoid any trading in Buyer equity securities by
Seller's directors, officers, employees and agents having knowledge of the
subject transaction, provided however, Seller shall have no liability for such
----------------
trading by Seller's directors, officers, employees and agents.
(c) From and after the Closing, Seller shall take reasonable actions
necessary to avoid any trading in Buyer equity securities by Seller's directors,
officers, employees and
16
agents that would be based on material nonpublic information, that relates to
the transactions contemplated by this Agreement or that was learned in the due
diligence process, provided however, Seller shall have no liability for such
----------------
trading by Seller's directors, officers, employees and agents. Seller and, to
the actual knowledge of Seller, its affiliates have not traded in Buyer
securities for the ten (10) day period preceding the Effective Date; provided
--------
however, that it shall not be deemed to be a breach of this clause if Seller or
-------
its affiliates own beneficially or of record shares of common stock of Buyer and
such shares are traded through a blind trust, a 401(k) plan or similar plan or
other similar trusts, plans or accounts.
6.2 Confidentiality. Seller and Buyer each recognize that they have
---------------
received and will receive confidential information concerning the other during
the course of the transactions contemplated by this Agreement negotiations,
preparations and due diligence. Accordingly, Buyer and Seller each: (a) shall
use its respective commercially reasonable efforts to prevent the unauthorized
disclosure of any confidential information concerning the other that was or is
disclosed during the course of such negotiations, preparations and due
diligence; and (b) shall not make use of or permit to be used any such
confidential information other than for the purpose of effectuating the
transactions contemplated by this Agreement. The obligations of this section
will not apply to information that: (a) is or becomes part of the public domain
other than by fault of the receiving party; (b) is received by the receiving
party from a third party without breach of a contractual or fiduciary
nondisclosure obligation to the other party; or (c) is required to be disclosed
by law. If this Agreement is terminated, all copies of documents containing
confidential information shall be returned by the receiving party to the
disclosing party. In addition to this paragraph 6.2, the provisions of the
Mutual Nondisclosure Agreement executed by the parties on May 4, 1999 (the
"NDA") will apply. To the extent there is a contradiction or ambiguity between
this Agreement and the NDA, the terms of this Agreement shall control.
6.3 Antitrust Law Compliance. If required, as promptly as practicable,
------------------------
Seller and Buyer shall make all filings and submissions under the HSR Act as may
be reasonably required to be made in connection with the transactions
contemplated by this Agreement and the transactions contemplated by this
Agreement or the Ancillary Documents. Each party will furnish to the other such
information and assistance as the other may reasonably request in connection
with the preparation of any such filings or submissions. Each party will furnish
the other with copies of all correspondence, filings or communications (or
memoranda setting forth the substance thereof) between such party and any
governmental body with respect to the transactions contemplated by this
Agreement and the transactions contemplated by this Agreement Agreements, except
to the extent that either party is advised by independent counsel that the
provision of such information would be inadvisable under applicable antitrust
laws.
6.4 Further Assurances. If, at any time before or after the Closing, Buyer
------------------
considers or is advised that any further deeds, assignments or assurances are
reasonably necessary or desirable to vest, perfect or confirm in Buyer title to
any property or rights of Seller or Buyer and their proper officers and
directors are authorized and shall use their commercially reasonable efforts to
execute and deliver all such proper deeds, assignments and assurances and do all
other things necessary or desirable to vest, perfect or confirm title to such
property or rights in Buyer and otherwise to carry out the purpose of this
Agreement.
17
6.5 Survival of Covenants. Each of the covenants set forth in Sections
---------------------
6.1(c), 6.2, 6.4 and this Section 6.5 shall survive the Closing. The covenants
set forth in Sections 6.2 above shall survive the termination of this Agreement
for any reason.
7. COVENANTS OF SELLER.
-------------------
Seller covenants and agrees with Buyer as follows:
7.1 Protection of Assets. From the Effective Date to the Closing Date,
--------------------
Seller agrees to use reasonable efforts to retain its employees, to protect and
preserve the Assets, and to preserve the goodwill of its customers, suppliers,
and others having business relations with the AIC Business. Without limiting the
generality of the foregoing, without Buyer's prior written consent, Seller
shall: (a) not engage in any transaction that would be inconsistent with any
representation or warranty of Seller set forth herein that would cause a breach
of any such representation or warranty resulting in a Material Adverse Effect;
(b) not sell, transfer, convey, assign, lease, license or otherwise dispose of
any of the Assets other than in the ordinary course of business; or (c) not (i)
conduct the AIC Business in the ordinary course and will not enter into any
transaction or agreement or take any action other than in the ordinary course
and in a reasonable and prudent manner, consistent with past practices that
would result in a Material Adverse Effect, (ii) use its commercially reasonable
efforts to preserve its existing relationships with employees, customers,
suppliers and the like of the AIC Business, (iii) use its commercially
reasonable efforts to preserve and protect the Assets; (iv) not incur any
liabilities of the AIC Business other than in the ordinary course, consistent
with past practices; (v) transfer any Key Employee (as each term is defined in
Section 8 below) to any other division or position of employment within Seller
or any other subsidiaries of Seller; (vi) terminate the employment of any Key
Employee without the prior written consent of Buyer which shall not be
unreasonably withheld or delayed; (vii) encourage any Key Employee not to accept
any offer of employment by Buyer made pursuant to Section 8 hereof; or (viii)
change the base salaries or bonus programs of any Key Employee or establish a
bonus plan or any new employee benefits for any Key Employee without Buyer's
prior written approval unless such change applies to substantially all of the
employees of Seller or occurs in the ordinary course of business consistent with
past practices.
7.2 Access to Information. From the Effective Date to the Closing Date, at
---------------------
Buyer's expense, upon notice to Seller, Seller will afford to the
representatives of Buyer during normal business hours, and at an off-site
location if requested by Seller, access to any and all of the Assets and
information with respect to the AIC Business to the end that Buyer may have a
reasonable opportunity to make such a full investigation of the Assets and the
AIC Business in advance of the Closing Date as it shall reasonably desire, and
the officers of Seller will confer with representatives of Buyer and will
furnish to Buyer, either orally or by means of such records, documents, and
memoranda as are available or reasonably capable of preparation, such
information as Buyer may reasonably request. Such access will include access to
Buyer's independent accountants for the purpose of conducting an audit of the
financial records of Seller after the Effective Date at Buyer's expense (the
Post-Signing Audit").
18
7.3 Consent of Third Parties. From the Effective Date to the Closing Date,
------------------------
Seller shall obtain the consent in writing of all persons necessary to permit
Seller to assign and transfer all of the Assets (including but not limited to
copies of the Customer Records) to Buyer, free and clear, other than of
Permitted Liens, of all liens, security interest, restrictions, claims and
encumbrances and to perform its obligations under, and to conclude the
transactions contemplated by, this Agreement in order that the performance
hereof will not result in the termination of, or any violation, breach or
default under, any material Contracts to which Seller is a party or by which any
of Seller's property is bound.
7.4 Use of Name "Autosite". From and after the Closing Date, Seller shall
----------------------
cease to use the trademarks and trade name "AutoSite" and the domain name
"xxxxxxxx.xxx" or any similar name, without the prior written consent of Buyer.
7.5 Exclusivity. After the Effective Date, Seller will not (i) solicit,
-----------
initiate, or encourage the submission of any proposal or offer from any legal
entity relating to any acquisition or purchase of the AIC Business or any of the
Assets, or (ii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any attempt by any legal entity to do any of the foregoing.
Seller will notify Buyer immediately if any legal entity makes such an offer,
proposal, inquiry or contact.
7.6 Post-Closing Covenant Not to Solicit. Except as provided by law, for a
------------------------------------
period of one (1) year after the Closing Date, Seller shall not solicit any
then-employee of Buyer (including any New Hire) to terminate his employment with
Buyer to become an employee of Seller (other than through general solicitation
or advertising or search consultants who contact candidates on their own
initiative without identification by Seller).
7.7 Pre-Closing Covenant Not to Solicit. Except as provided in Section 8
-----------------------------------
below or by law, from that period from the Effective Date through the first
anniversary of the Closing Date, Buyer shall not solicit any then-employee of
Seller to terminate his employment with Seller to become an employee of Buyer
(other than through general solicitation or advertising or search consultants
who contact candidates on their own initiative without identification by Buyer).
7.8 Survival of Covenants. Each of the covenants set forth in Sections
---------------------
7.4, 7.6, 7.7 and this Section 7.8 shall survive the Closing.
19
8. EMPLOYEE MATTERS.
----------------
8.1 Obligation to Offer Employment.
------------------------------
(a) Key Employees. Schedule 8.1 contains a current list of the
------------- ------------
employees of Seller who Buyer reasonably deems to be particularly important to
the AIC Business and whom Buyer desires to employ following the Closing Date
(the "Key Employees").
(b) Offers of Employment. Buyer shall contact each Key Employee at
--------------------
reasonable times and places prior to the Closing Date and shall make offers of
employment with Buyer for a position with Buyer substantially similar to those
such Key Employee has with Seller on the date hereof. In each case such offers
of employment shall be contingent on consummation of the transactions
contemplated by this Agreement. Each Key Employee from whom Buyer receives a
written acceptance of an offer of employment by Buyer (a "Written Acceptance")
shall be hired by Buyer effective as of the next business day following the
Closing Date and is hereafter referred to as a "New Hire". Seller shall
terminate the employment of all Key Employees upon the Closing. Seller waives,
with respect to the employment by Buyer of such New Hires, any claims or rights
Seller may have against any such New Hire under any non-competition,
confidentiality or employment agreement with respect to the AIC Business, and
agrees to pay compensation and benefits for New Hires through the Closing Date
in accordance with its then existing policies and obligations. Such offers of
employment as may be extended by Buyer to Key Employees who are on a workers'
compensation-related or disability leave or a Family Medical Leave Act leave or
other statutory leave shall be conditioned upon their return from such leave in
accordance with Seller's leave of absence policy.
(c) Employee Compensation. Seller shall be liable for all expenses,
---------------------
contracts, agreements, commitments, and other liabilities with respect to (i)
the termination of employment by Seller of any Employee or (ii) any claims of
discrimination against by Seller under local, state or federal law, or the
termination by Seller of Employees who do not accept employment with Buyer.
8.2 Employment Taxes. Seller shall be responsible for any withholding or
----------------
employment taxes with respect to any Employees which accrue or become payable
during the period of such Employee's employment or service with Seller or any
subsidiary of Seller and any taxes which arise out of the termination of an
Employee's employment with Seller for filing all United States and non-U.S.
federal, state and local employment tax returns with respect to Employees
attributable to periods of employment or service with Seller. Buyer shall be
responsible for any withholding or employment taxes with respect to any
Employees which accrue or become payable during the period of such Employee's
employment or service with Buyer or any subsidiary of Buyer and any taxes which
arise out of the termination of an Employee's employment with Buyer for filing
all United States and non-U.S. federal, state and local employment tax returns
with respect to Employees attributable to periods of employment or service with
Seller.
8.3 Termination of Employment. Seller agrees to comply with the provisions
-------------------------
of any United States, or other applicable non-U.S. federal, state or local
statute or regulation regarding
20
termination of employment, plant closing or layoffs and to perform all
obligations required by Seller with respect to the cessation of any operations
of the AIC Business or reductions in workforce or the termination, re-
assignment, re-location or change in position of any Employee related thereto
prior to, on or after the Closing Date, as a result of such Employee not being
offered employment by Buyer in relation to the transactions contemplated herein
or otherwise.
8.4 No Rights Conferred Upon Employees. Nothing in this Section 8 or any
----------------------------------
other provision of this Agreement shall confer any rights or remedies on any
employee (including without limitation any Employee or New Hire) and no employee
(including without limitation any Employee or New Hire) shall be a third party
beneficiary with respect to any covenant, representation or agreement in this
Agreement.
8.5 Survivability. Each of the agreements and covenants set forth in this
-------------
Section 8 shall survive the Closing.
9. CONDITIONS TO CLOSING.
---------------------
9.1 Conditions to Buyer's Obligations. The obligations of Buyer hereunder
---------------------------------
shall be subject to the satisfaction and fulfillment of each of the following
conditions, except as Buyer may expressly waive the same in writing:
(a) No Material Adverse Change. From the Effective Date through the
--------------------------
Closing Date, there shall have been no material adverse change in the Assets or
the AIC Business.
(b) Conduct of AIC Business in Ordinary Course. From the Effective
------------------------------------------
Date through the Closing Date, Seller shall have conducted the AIC Business only
in the ordinary course, consistent with Seller's past practices, except for
actions expressly permitted by this Agreement, matters incident to carrying out
this Agreement, or such further matters as may be consented to by Buyer in
writing.
(c) Accuracy of Representations and Warranties on Closing Date. The
----------------------------------------------------------
representations and warranties made herein by Seller (as qualified by Seller's
Disclosure Letter which shall be updated as of the Closing Date) shall be true
and correct in all material respects, and not misleading in any material
respect, on and as of the date given, and on and as of the Closing Date with the
same force and effect as though such representations and warranties were made on
and as of the Closing Date.
(d) Compliance. As of the Closing Date, Seller shall have complied in
----------
all material respects with, and shall have fully performed, in all material
respects, all conditions, covenants and obligations of this Agreement imposed on
Seller and required to be performed or complied with by Seller at, or prior to,
the Closing Date.
(e) Delivery of Assets. Seller shall have delivered, and Buyer shall
------------------
have received, the Assets.
21
(f) Delivery of Closing Documents. Seller shall have delivered, and
-----------------------------
Buyer shall have received, the documents described in Section 10.2 hereof.
(g) Seller's Consents Obtained. All material consents and approvals
--------------------------
required to be obtained by Seller shall have been obtained, including but not
limited to, if any, the approval of authorizing the execution and delivery by
Seller of this Agreement, all related agreements, the consummation of the
transactions contemplated hereby and thereby.
(h) Xxxx-Xxxxx-Xxxxxx Compliance. All applicable waiting periods under
----------------------------
the HSR Act shall have expired or early termination shall have been granted by
both the Federal Trade Commission and the United States Department of Justice.
(i) Assumption of Liabilities. Seller shall have executed and
-------------------------
delivered the Assignment, Xxxx of Sale and Assumption Agreement in the form
attached as Exhibit 9.1(i) hereto (the "Assignment, Xxxx of Sale and Assumption
--------------
Agreement").
9.2 Conditions to Seller's Obligations. The obligations of Seller
----------------------------------
hereunder shall be subject to the satisfaction and fulfillment of each of the
following conditions, except as Seller may expressly waive the same in writing:
(a) Payment of Purchase Price. Seller has delivered the Purchase
-------------------------
Price.
(b) Accuracy of Representations and Warranties on Closing Date. The
----------------------------------------------------------
representations and warranties made herein by Buyer in Section 4 hereof shall be
true and correct in all material respects, and not misleading in any material
respect, on and as of the date given, and, other than for the representations
and warranties given in Section 4.8, on and as of the Closing Date with the same
force and effect as though such representations and warranties were made on and
as of the Closing Date.
(c) Assumption of Liabilities. Buyer shall have executed and delivered
-------------------------
the Assignment, Xxxx of Sale and Assumption Agreement.
(d) Compliance. Buyer shall have complied in all material respects
----------
with, and shall have fully performed, the terms, conditions, covenants and
obligations of this Agreement imposed thereon to be performed or complied with
by Buyer at, or prior to, the Closing Date.
(e) Delivery of Closing Documents. Buyer shall have delivered, and
-----------------------------
Seller and shall have received, the documents described in Section 10.1 hereof.
(f) Xxxx-Xxxxx-Xxxxxx Compliance. All applicable waiting periods under
----------------------------
the HSR Act shall have expired or early termination shall have been granted by
both the Federal Trade Commission and the United States Department of Justice.
10. CLOSING OBLIGATIONS.
-------------------
10.1 Buyer's Closing Obligations. At the Closing, Buyer shall deliver to
---------------------------
Seller the following:
22
(a) A certificate signed by the President or Chief Financial Officer
of Buyer, on behalf of Buyer, to the effect that the representations and
warranties of Buyer made in the Agreement are true and correct in all material
respects as of the Closing Date and that Buyer has fully performed all of its
pre-closing commitments hereunder;
(b) A certified copy of the resolutions of the Board of Directors of
Buyer authorizing the execution and delivery by Buyer of this Agreement, and all
related agreements, and the consummation of the transactions contemplated hereby
and thereby;
(c) Payment of the Closing Payment from Buyer to Seller;
(d) The Rights Agreement, signed by Buyer;
(e) The Assignment, Xxxx of Sale and Assumption Agreement, signed by
Buyer; and
(f) The stock certificate(s) of Buyer representing all of the Shares
duly issued in the name of the Seller.
10.2 Seller's Closing Obligations. At the Closing, Seller, TILC or THI, as
----------------------------
the case may be, shall deliver to Buyer the following:
(a) The Assets, or if Seller has delivered the Assets to Buyer prior
to the Closing, a certificate signed by an officer of Seller, on behalf of
Seller, to the effect that the Assets have been earlier delivered to Buyer;
(b) If required for Seller's consummation of this transaction, a
certified copy of the resolutions of the Board of Directors and, if required by
law, the stockholders of Seller;
(c) A certificate signed by the President or Chief Financial Officer
of Seller, on behalf of each such company, to the effect that the
representations and warranties of Seller made herein are true and correct in all
material respects as of the Closing Date and that Seller has fully performed all
its pre-closing obligations hereunder;
(d) The Rights Agreement, signed by Seller;
(e) The Assignment, Xxxx of Sale and Assumption Agreement, signed by
Seller;
(f) The Trademark Assignment, signed by TILC, in the form attached as
Exhibit 10.2(f) hereto;
---------------
(g) The Guaranty, signed by THI, in the form attached as Exhibit
-------
10.2(g) hereto;
-------
(h) Such specific assignments and other instruments of conveyance as
Buyer and/or Buyer's counsel may reasonably request; and
23
(i) All consents required to be obtained by Seller pursuant to Section
7.3.
11. SURVIVAL OF WARRANTIES AND INDEMNIFICATION.
------------------------------------------
11.1 Survival of Warranties. All representations and warranties made by
----------------------
Seller or Buyer herein shall survive the Closing for a period of one (1) year
after the Closing Date except that all representations contained in Section 5.12
shall survive until the expiration of the applicable statute of limitations
(including extensions).
11.2 Indemnified Losses. For the purpose of this Section 11.2 and when
------------------
used elsewhere in this agreement, "Loss" shall mean and include any and all
liability, loss, damage, claim, expense, cost, fine, fee, penalty, obligation or
injury including, without limitation, those resulting from any and all actions,
suits, proceedings, demands, assessments, judgments, award or arbitration,
together with reasonable costs and expenses including the reasonable attorneys'
fees and other legal costs and expenses relating thereto.
11.3 Indemnification by Seller. Subject to the provisions and limitations
-------------------------
set forth in this Section 11, Seller agrees to defend, indemnify and hold
harmless Buyer, any parent, subsidiary or affiliate of Buyer and any director,
officer, employee, stockholder, agent or attorney of Buyer or of any parent,
subsidiary or affiliate of Buyer (collectively, the "Buyer Indemnitees") from
and against any Loss which arises out of or results from:
(a) any breach of any covenant, or the inaccuracy or untruth of any
representation or warranty of Seller made herein;
(b) taxes, assessments and other governmental charges of any kind or
nature whatsoever, including without limitation any withholding, social security
or unemployment levies, arising out of, or payable with respect to, Seller's
business operations;
(c) any demand, claim, debt, suit, cause of action or proceeding made
or asserted by a stockholder, creditor, receiver, or trustee in bankruptcy of
Seller asserting that the transfer of the Assets to Buyer hereunder constitutes
a bulk sale, bulk transfer, fraudulent conveyance, fraudulent transfer, or
constitutes a preference under any applicable state or federal law, including
but not limited to the United States Bankruptcy Code, or under any doctrine of
de facto merger or successor liability, or otherwise by operation of law;
(d) any demand, claim, debt, suit, cause of action, arbitration or
other proceeding (including, but not limited to, a warranty claim, a strict
product liability claim or any other claim) that is made or asserted by any
third party that relates to any product or service, that was sold, licensed or
otherwise provided by Seller to any AIC Business customer;
(e) any demand, claim, debt, suit, cause of action or proceeding made
or asserted by any employee or independent contractor or any former employee or
independent contractor of Seller, that relates in any manner to any termination
by Seller of its employment or the services of such employee or independent
contractor or any other matter relating to Seller's employment of such employee
or independent contractor; or
24
(f) any of the Excluded Liabilities and any claim, suit, action,
loss, judgment, award, damages, debt, liability, costs and expenses incurred or
suffered by Buyer in connection with any Excluded Liabilities.
11.4 Indemnification by Buyer. Subject to the provisions and limitations
------------------------
set forth in this Section 10, Buyer agrees to defend, indemnify and hold
harmless Seller, any parent, subsidiary or affiliate of Seller and any director,
officer, employee, stockholder, agent or attorney of Seller or of any parent,
subsidiary or affiliate of Seller (collectively, the "Seller Indemnitees") from
and against and in respect of any Loss which arises out of or results from:
(a) any breach of any covenant, or the inaccuracy or untruth of any
representation or warranty of Buyer made herein;
(b) taxes, assessments and other governmental charges of any kind or
nature whatsoever, including without limitation any withholding, social security
or unemployment levies, arising out of, or payable with respect to, Buyer's
business operations, and the operation of the AIC Business after the Closing
Date;
(c) any demand, claim, debt, suit, cause of action, arbitration or
other proceeding (including, but not limited to, a warranty claim, a strict
product liability claim or any other claim) that is made or asserted by any
third party that relates to any product or service, that was sold, licensed or
otherwise provided by Buyer to any AIC Business customer;
(d) any demand, claim, debt, suit, cause of action or proceeding made
or asserted by any employee or independent contractor or any former employee or
independent contractor of Seller, that relates in any manner to any termination
by Buyer of its employment or the services of such employee or independent
contractor or any other matter relating to Buyer's employment of such employee
or independent contractor;
(e) any of the Assumed Liabilities and any claim, suit, action, loss,
judgment, award, damages, debt, liability, costs and expenses incurred or
suffered by Buyer in connection with any Assumed Liabilities, or
(f) any of the Assets after the Closing Date and any claim, suit,
action, loss, judgment, award, damages, debt, liability, costs and expenses
incurred or suffered by Buyer in connection with the operation of the AIC
Business after the Closing Date.
11.5 Procedures for Indemnification. If any action, suit or proceeding
------------------------------
shall be commenced against, or any claim or demand be asserted against, Seller
or Buyer, as the case may be, in respect of which Seller or Buyer is entitled to
demand indemnification under this Section 11, then as a condition precedent
thereto, the party seeking indemnification ("Indemnitee") shall promptly notify
the other party ("Indemnitor") in writing to that effect, and with reasonable
particularity and with reference to the applicable provision(s) of this
Agreement. The Indemnitor shall have the right to assume the entire control of
the defense, compromise or settlement of such action, suit, proceeding or claim
and including the selection of counsel, subject to the right of the Indemnitee
to participate (at its expense and with counsel of its choice)
25
in the defense, compromise or settlement of such action, suit, proceeding, claim
or demand, and in connection therewith, the Indemnitee shall cooperate fully at
Indemnitor's expense in all respects with the Indemnitor in any such defense,
compromise or settlement. The Indemnitor will not compromise or settle any such
action, suit, proceeding, claim or demand without the prior written consent of
the Indemnitee, which consent will not be unreasonably withheld or delayed. So
long as the Indemnitor is defending in good faith any such action, suit,
proceeding, claim or demand asserted by a third party against the Indemnitee,
the Indemnitee shall not settle or compromise such action, suit, proceeding,
claim or demand without the prior written consent of the Indemnitor, which
consent will not be unreasonably withheld or delayed. The Indemnitee shall make
available to the Indemnitor or its agents all records and other materials in the
Indemnitee's possession reasonably required for contesting any third party claim
or demand. If the Indemnitor shall fail to promptly and adequately defend any
such action, suit, proceeding, claim or demand, then the Indemnitee may defend,
through counsel of its own choosing, such action, suit, proceeding, claim or
demand and (so long as Indemnitee gives the Indemnitor at least ten (10) days'
notice of the terms of the proposed settlement thereof and permits the
Indemnitor to then undertake the defense thereof if Indemnitor objects to the
proposed settlement) to settle such action, suit, proceeding, claim or demand
and to recover from the Indemnitor the amount of such Losses.
11.6 Period for Making Claims. A claim for indemnification under this
------------------------
Section 11:
(a) must be brought, if at all, at any time within one (1) year after
the Closing Date, with respect to any claim or claims for indemnification under
this Section 11 not described in subsection 11.6(b) below; or
(b) may be brought at any time up to expiration of the applicable
statute of limitations (including extensions) with respect to any claim for
indemnification relating to or based upon the provisions of Section 5.12.
11.7 Limitations on Indemnification.
------------------------------
(a) Subject to Section 11.7(b) hereof, the maximum aggregate Losses
recoverable by Seller Indemnitees (considered together as a group) against
Buyer, in the aggregate, shall not exceed the Purchase Price and the maximum
aggregate Losses recoverable by Buyer Indemnitees (considered together as a
group) against Seller, in the aggregate, shall not exceed the Cash Payment plus
the product of the Shares and the average closing price of one share of Seller
Common Stock as quoted on the Nasdaq National Market over the ten (10) trading
days immediately prior to the date of this Agreement. The limits set forth in
this Section 11.7 shall not apply to any Losses arising out of or resulting from
the fraud or willful misconduct of the indemnifying party.
(b) Anything in this Agreement to the contrary notwithstanding, no
indemnification payment shall be sought or made by an Indemnitee pursuant to
Sections 11.2 or 11.3 hereof except to the extent that any individual amount
which would otherwise be payable
26
under Sections 11.2 or 11.3 exceeds $20,000, and the amounts which would
otherwise be payable under Sections 11.2 or 11.3 aggregate at least $100,000.
12. MISCELLANEOUS.
-------------
12.1 Expenses. Buyer and Seller shall each bear their respective expenses
--------
(including without limitation attorneys' and accountant's fees) in connection
with the negotiation and consummation of the transaction contemplated hereby,
except that (i) the parties shall share equally any and all filing or submission
fees that are necessary or advisable under the HSR Act and (ii) Buyer shall pay
any and all costs and expenses charged by Buyer's independent accountants in
connection with the Post-Signing Audit.
12.2 Notices. Any notice required or permitted to be given under this
-------
Agreement shall be in writing and shall be personally or sent by certified or
registered United States mail, postage prepaid, or sent by nationally recognized
overnight express courier and addressed as follows:
(a) If to Seller:
------------
The Xxxx Group, Inc.
00000 Xxxxx Xxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: President
with copy to:
------------
The Thomson Corporation
Xxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
(b) If to TILC:
----------
Thomson Information Licensing Corporation
Brandywine Corporate Center
000 Xxxxxxx, Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
with copy to:
------------
The Thomson Corporation
Xxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
27
(c) If to THI:
---------
THI (U.S.) Inc.
c/o The Thomson Corporation
Xxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Vice President and General Counsel
(d) If to Buyer:
-----------
Xxxxxxx.xxx, Inc.
0000 Xxx Xxxxxx, Xxxxxxxx 0
Xxxxx Xxxxx, XX 00000
Attention: President
with copy to:
------------
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
12.3 Entire Agreement; Captions. This Agreement, the Exhibits and
--------------------------
Schedules hereto (which are incorporated herein by reference), the agreements to
be executed and delivered in connection herewith and the NDA, together
constitute the entire agreement and understanding between the parties and there
are no agreements or commitments with respect to the transactions contemplated
herein except as set forth in this Agreement. This Agreement supersedes any
prior offer, agreement or understanding between the parties with respect to the
transactions contemplated hereby. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement.
12.4 Amendment; Waiver. Any term or provision of this Agreement may be
-----------------
amended only by a writing signed by Seller and Buyer. The observance of any term
or provision of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a writing
signed by the party to be bound by such waiver. No waiver by a party of any
breach of this Agreement will be deemed to constitute a waiver of any other
breach or any succeeding breach.
12.5 No Third Party Beneficiaries. Nothing expressed or implied in this
----------------------------
Agreement is intended, or shall be construed, to confer upon or to give any
person, firm or corporation, other than the parties hereto, any rights or
remedies under or by reason of this Agreement.
12.6 Execution in Counterparts. For the convenience of the parties, this
-------------------------
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
28
12.7 Assignment. This Agreement may not be assigned by any party hereto
----------
without the prior written consent of each other party; except that Buyer may
------
assign this Agreement (and all related agreements) by operation of law or in
connection with any merger, consolidation or sale of all or substantially all
Buyer's assets or in connection with any similar transaction.
12.8 Benefit and Burden. This Agreement shall be binding upon, shall inure
------------------
to the benefit of, and be enforceable by and against, the parties hereto and
their respective successors and permitted assigns.
12.9 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the internal laws of the State of Delaware (excluding
application of any choice of law doctrines that would make applicable the law of
any other state or jurisdiction) and, where appropriate, applicable federal law.
12.10 Severability. If any provision of this Agreement is for any reason
------------
and to any extent deemed to be invalid or unenforceable, then such provision
shall not be voided but rather shall be enforced to the maximum extent then
permissible under then applicable law and so as to reasonably effect the intent
of the parties hereto, and the remainder of this Agreement will remain in full
force and effect.
29
IN WITNESS WHEREOF, Buyer and Seller executed and delivered this Agreement
by their duly authorized representatives as of the Effective Date.
SELLER: BUYER:
The Xxxx Group, Inc. Xxxxxxx.xxx, Inc.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ X X Xxxxxxxx
--------------------------- ----------------------------
Its: CEO Its: V P
-------------------------- ---------------------------
TILC:
Thomson Information Licensing Corporation
(only for purposes of Section 5.A. and Section 10.2(f) hereof)
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Its: President
--------------------------
THI:
THI (U.S.) Inc.
(only for purposes of Section 5.B. and 10.2(g) hereof)
By: /s/ unreadable
---------------------------
Its: V.P.
--------------------------
30
EXHIBITS AND SCHEDULES
----------------------
Schedule 1.2(a)(i) Seller's AIC Products
Schedule 1.2(a)(ii) Seller's Intellectual Property
Schedule 1.2(f) Seller's Tangible Assets
Schedule 1.3 Excluded Assets
Schedule 3.4 Allocation of Purchase Price
Schedule 5.8 Statement of Net Assets
Schedule 8.1 Key Employees
Exhibit 3.2 Rights Agreement
Exhibit 9.1(i) Assignment, Xxxx of Sale and Assumption Agreement
Exhibit 10.2(f) Trademark Assignment
Exhibit 10.2(g) Form of Guaranty
31
