EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
By
and
Among
YPG DIRECTORIES, LLC
YPG SYSTEMS, LLC
(Buyers)
and
YPG HOLDINGS INC.
(Guarantor),
on the one side,
and
VOLT INFORMATION SCIENCES, INC.,
DATANATIONAL, INC., and
DATANATIONAL OF GEORGIA, INC.
(Sellers),
on the other side.
Dated as of July 29, 2008
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TABLE OF CONTENTS
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1.
DEFINITIONS; CERTAIN RULES OF
CONSTRUCTION.............................................................1
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2.
ACQUISITION OF ASSETS BY THE
BUYERS...................................................................13
-----------------------------------
2.1. Purchase
and Sale of
Assets.................................................................13
---------------------------
2.2. Excluded
Assets.............................................................................15
---------------
2.3.
Liabilities.................................................................................15
-----------
2.4. Purchase
Price..............................................................................17
--------------
2.5. The
Closing.................................................................................18
-----------
2.6. Deliveries
by the Sellers and the
Buyers....................................................18
----------------------------------------
2.7. Allocation
of Purchase
Price................................................................20
----------------------------
2.8. Post
Closing
Adjustment.....................................................................21
-----------------------
3.
REPRESENTATIONS AND WARRANTIES OF THE
SELLER..........................................................22
--------------------------------------------
3.1.
Organization and Qualification of the
Sellers...............................................23
---------------------------------------------
3.2.
Authorization of
Transaction................................................................23
----------------------------
3.3.
Governmental
Authorization..................................................................23
--------------------------
3.4.
Noncontravention............................................................................23
----------------
3.5. Brokers'
Fees...............................................................................24
-------------
3.6. Assets;
Ownership...........................................................................24
-----------------
3.7. Legal and
Other Compliance;
Permits.........................................................24
-----------------------------------
3.8.
Consents....................................................................................24
--------
3.9. Property
and Equipment; Liens; Completeness of Acquired
Assets..............................25
--------------------------------------------------------------
3.10.
Litigation..................................................................................26
----------
3.11. Environmental
Matters.......................................................................26
---------------------
3.12. Affiliated
Transactions.....................................................................27
-----------------------
3.13. Absence of
Certain
Developments.............................................................27
-------------------------------
3.14.
Contracts...................................................................................28
---------
3.15.
Employment..................................................................................29
----------
3.16. Certain
Financial Information; Undisclosed
Liabilities......................................30
------------------------------------------------------
3.17.
Taxes.......................................................................................31
-----
3.18.
Insurance...................................................................................32
---------
3.19. Customers and
Suppliers.....................................................................32
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3.20. Intellectual
Property.......................................................................33
---------------------
3.21. Publication of
Directories..................................................................35
--------------------------
3.22. Intercompany
Settlements....................................................................35
------------------------
3.23. Books and
Records...........................................................................35
-----------------
4.
REPRESENTATIONS AND WARRANTIES OF THE BUYERS AND THE
GUARANTOR........................................35
--------------------------------------------------------------
4.1.
Organization and Qualification of the
Buyers................................................36
--------------------------------------------
4.2.
Authorization of
Transaction................................................................36
----------------------------
4.3. Government
Authorization....................................................................36
------------------------
4.4.
Noncontravention............................................................................36
----------------
4.5. Brokers'
Fees...............................................................................36
-------------
4.6. Necessary
Funds.............................................................................36
---------------
5.
COVENANTS.............................................................................................36
---------
5.1. Covenants
of the Sellers Relating to Conduct of the
Business................................36
------------------------------------------------------------
5.2. Payment
Received............................................................................39
----------------
5.3.
Commercially Reasonable
Efforts.............................................................39
-------------------------------
5.4. Access to
Books, Records,
etc...............................................................41
-----------------------------
5.5.
Confidentiality.............................................................................41
---------------
5.6.
Post-Closing
Cooperation....................................................................42
------------------------
5.7.
Non-Assignable
Assets.......................................................................43
---------------------
5.8.
Responsibility for Taxes and Tax
Returns....................................................44
----------------------------------------
5.9. Sales
Taxes, Transfer Taxes and
Fees........................................................45
------------------------------------
5.10. Wage
Reporting..............................................................................45
--------------
5.11. Landlord
Estoppel
Certificates..............................................................45
------------------------------
5.12. Use of Office
Space.........................................................................45
-------------------
5.13. Employment
Matters..........................................................................45
------------------
5.14.
Non-competition.............................................................................46
---------------
5.15.
Non-solicitation............................................................................46
----------------
5.16. License
Agreements..........................................................................46
------------------
5.17. Seller
Release..............................................................................46
--------------
5.18.
Exclusivity.................................................................................46
-----------
5.19.
Publicity...................................................................................47
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5.20. Corporate
Name..............................................................................47
--------------
5.21.
Insurance...................................................................................47
---------
5.22.
Automobiles.................................................................................47
-----------
5.23. Accounting
Services.........................................................................47
-------------------
5.24. URL
Redirect................................................................................47
------------
6. CONDITIONS
PRECEDENT..................................................................................47
--------------------
6.1. Conditions
to Each Party's Obligation to Effect the
Closing.................................47
-----------------------------------------------------------
6.2. Conditions
to Obligations of the
Buyers.....................................................48
---------------------------------------
6.3. Conditions
to Obligation of the
Sellers.....................................................49
---------------------------------------
7.
INDEMNIFICATION.......................................................................................50
---------------
7.1.
Indemnification.............................................................................50
---------------
7.2. Time
Limitations............................................................................52
----------------
7.3. Monetary
Limitations........................................................................52
--------------------
7.4. Tax
Indemnity...............................................................................53
-------------
7.5.
Third
Party
Claims..........................................................................54
------------------
7.6. Remedies
Cumulative; Sole
Remedy............................................................56
--------------------------------
7.7. Purchase
Price
Adjustment...................................................................56
-------------------------
7.8. Insurance
Recoveries........................................................................56
--------------------
8.
TERMINATION...........................................................................................56
-----------
8.1.
Termination
Events..........................................................................56
------------------
8.2. Effect of
Termination.......................................................................59
---------------------
9.
GUARANTY..............................................................................................57
--------
9.1.
Guaranty....................................................................................57
--------
10.
MISCELLANEOUS.........................................................................................57
-------------
10.1. Entire
Agreement............................................................................57
----------------
10.2. Succession and
Assignment; No Third-Party
Beneficiary.......................................57
-----------------------------------------------------
10.3.
Counterparts................................................................................58
------------
10.4.
Headings....................................................................................58
--------
10.5.
Notices.....................................................................................58
-------
10.6.
Mail........................................................................................59
----
10.7. Governing
Law...............................................................................59
-------------
10.8. Amendments and
Waivers......................................................................59
----------------------
10.9.
Severability................................................................................60
------------
10.10.
Expenses....................................................................................60
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10.11.
Construction................................................................................60
------------
10.12.
Schedules; Listed Documents,
etc............................................................60
--------------------------------
10.13.
Jurisdiction................................................................................60
------------
10.14.
Venue.......................................................................................61
-----
10.15.
Service of
Process..........................................................................61
------------------
10.16.
Further
Assurances..........................................................................61
------------------
10.17.
Waiver of Jury
Trial........................................................................61
--------------------
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Exhibits
--------
Exhibit A-1
Bill of Sale
Exhibit A-2
Assignment and Assumption of Lease
Exhibit A-3
Intellectual Property Assignment
Exhibit B
Instrument of Assignment and Assumption
Exhibit C
Transition Services Agreement
Exhibit D
Sellers' Legal Opinion
Exhibit E
Current Assets of the Business
Exhibit F
Current Liabilities of the Business
Exhibit G
Landlord Estoppel Certificate
Exhibit H
Summary of Terms of Office Sublease
Exhibit I
[Intentionally omitted]
Exhibit J
[Intentionally omitted]
Exhibit K
Non-competition and Non-solicitation Covenants
Exhibit L
Summary of Terms of Uruguay Support Agreement
Schedules
---------
Schedule I
Seller Employees
Schedule II
Sample Estimated Collection Adjustment Statement
Schedule III
Permitted Liens
Schedule IV
Allocation of Purchase Price
Disclosure Schedules
--------------------
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<PAGE>
ASSET PURCHASE AGREEMENT
This
Asset Purchase Agreement (this "Agreement") is dated as of July
29,
2008, by and among, YPG DIRECTORIES, LLC, a Delaware limited
liability company
("YPG Directories"), YPG SYSTEMS, LLC, a Delaware limited liability
company
("YPG Systems" and with YPG Directories, the "Buyers"), and YPG
HOLDINGS INC., a
corporation governed by the laws of Canada (the "Guarantor"), on
the one side,
and VOLT INFORMATION SCIENCES, INC., a New York corporation (the
"Parent"),
DATANATIONAL, INC., a Delaware corporation (the "DE Sub"), and
DATANATIONAL OF
GEORGIA, INC., a Georgia corporation (the "GA Sub", and together
with the Parent
and DE Sub, the "Sellers"; and, individually, each a "Seller"), on
the other
side. The Buyers, the Guarantor and the Sellers are collectively
referred to
herein as the "Parties."
WHEREAS, the Sellers desire to sell to the Buyers, and the Buyers
desire to
purchase from the Sellers, the assets used or held for use in the
Business (as
defined below) on the terms and subject to the conditions set forth
herein; and
WHEREAS, in connection with the purchase and sale of such assets,
the
Buyers are willing to assume certain liabilities of the Sellers on
the terms and
subject to the conditions set forth herein.
NOW,
THEREFORE, in consideration of the premises and the mutual
promises
herein made, and in consideration of the representations,
warranties, and
covenants herein contained, the Parties agree as follows:
1. DEFINITIONS;
CERTAIN RULES OF CONSTRUCTION.
For
the purposes of this Agreement: (i) words (including capitalized
terms
defined herein) in the singular shall be held to include the plural
and vice
versa and words (including capitalized terms defined herein) of one
gender shall
be held to include the other gender as the context requires; (ii)
the terms
"hereof," "herein" and "herewith" and words of similar import
shall, unless
otherwise stated, be construed to refer to this Agreement as a
whole (including
all of the Exhibits) and not to any particular provision of this
Agreement, and
Article, Section and paragraph references shall be to the Articles,
Sections and
paragraphs of this Agreement, unless otherwise specified; (iii) the
word
"including" and "include" and words of similar import when used in
this
Agreement mean "including without limitation"; and (iv) all
references herein to
"$" or dollars shall refer to United States dollars, unless
otherwise specified.
As
used herein, the following terms will have the following
meanings:
"Acquired Assets" has the meaning set forth in Section 2.1.
"Action" means any claim, action, cause of action or suit (whether
in
contract or tort or otherwise), litigation (whether at law or in
equity and
whether civil or criminal), controversy, assessment, arbitration,
investigation,
hearing, charge, complaint, demand, notice or proceeding to, from,
by or before
any Governmental Authority.
"Adjusted Net Purchase Price" shall have the meaning set forth in
Section
2.8(e).
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"Adjustment for Collection" shall mean, for each Telephone
Directory not
published as of the Closing, all revenues collected by the Sellers
at such time,
calculated as deferred income minus accounts receivable unpublished
(as
reflected in the schedule of deferred income in the combined
financial
statements of the DE Sub and the GA Sub and in the Ordinary Course
of Business)
and calculated in accordance with the sample Estimated Collection
Adjustment
Statement attached hereto as Schedule II (which, solely for
illustrative
purposes, was prepared as though the Closing had occurred on May
25, 2008).
"Affiliate" means, as
to any specified Person at any time, each Person who
is directly or indirectly controlling, controlled by or under
direct or indirect
common control with such specified Person at such time.
"Agreement" has the meaning set forth in the preamble.
"Assigned Intellectual Property" means Intellectual Property owned,
held
for use, licensed or used by the Sellers or any of their respective
Affiliates
in connection with the Business including all rights to use the
name
"DataNational", as well as the right to sue and recover damages for
any past,
current or future infringements, dilution, misappropriations,
misuses,
violations, unlawful imitation or breaches of any such Intellectual
Property.
"Assignment and Assumption of Lease" has the meaning set forth in
Section
2.6(a).
"Assumed Contracts" has the meaning set forth in Section
2.1(e).
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Assigned Software" has the meaning set forth in Section
3.20(h).
"Bill of Sale" has the meaning set forth in Section 2.6(a).
"Business" means the operations of the Sellers related to the
Parent's
"telephone directory" segment (as shown in the Parent's financial
statements
contained in the 2007 annual report on Form 10-K filed with the
Securities and
Exchange Commission) including (i) the Telephone Directories
business known as
DataNational carried on and conducted by the Sellers as of the date
of this
Agreement and (ii) the "Directory Systems/Services" business
carried on and
conducted by the Sellers as of the date of this Agreement,
including developing
and operating proprietary software, publishing, invoicing and
marketing, in each
case, for Telephone Directories, but excluding any assets that are
used
exclusively in the Parent's "telephone directory" segment's
operations in
Uruguay.
"Business Day" means a day, other than Saturday, Sunday or other
day on
which commercial banks in New York, New York or Montreal, Canada
are authorized
or required by law to close.
"Buyers' Assumed Payroll" means the salaries and benefits payable
to the
Seller Employees hired by the Buyers and directly associated
employment and
withholding Taxes related to the Seller Employees hired by the
Buyers for the
week immediately preceding the date on which the Closing Date
occurs, provided
that such employment period shall never exceed five (5) weekdays
and no amount
shall be included in this definition without duplication to the
extent it is
included in Exhibit F (with respect to accrued expenses related to
employees'
salaries and benefits).
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"Buyers Dispute Notice" has the meaning set forth in Section
2.4(b).
"Buyers Indemnified Person" has the meaning set forth in Section
7.1(a).
"Buyers' Representatives" has the meaning set forth in Section
5.4.
"Buyers' Tax Returns" has the meaning set forth in Section
5.8(a).
"Buyers" has the meaning set forth in the preamble.
"Cap" has the meaning set forth in Section 7.3(a).
"Cash" means, as of any date of determination, the cash and
cash
equivalents (including, but not limited to marketable securities),
each as
determined in accordance with GAAP, of the Sellers related to the
Business as of
the close of business as of such date.
"CERCLA" means the federal Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended.
"Closing" has the meaning set forth in Section 2.5.
"Closing Date" has the meaning set forth in Section 2.5.
"Closing Documents" has the meaning set forth in Section 2.6.
"Closing Payment" has the meaning set forth in Section 2.4(a).
"COBRA" has the meaning set forth in Section 5.13.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contemplated Transactions" means the transactions as contemplated
by this
Agreement and the other Transaction Documents.
"Contractual Obligation" means, with respect to any Person, any
contract,
agreement, purchase order, deed, mortgage, lease, license, promise,
commitment,
undertaking, arrangement or understanding, whether written or oral
and whether
express or implied, or other document or instrument, including
without
limitation any document or instrument evidencing or otherwise
relating to any
Debt or Guarantee (but excluding the charter and by-laws of such
Person), to
which or by which such Person is a Party or otherwise subject or
bound or to
which or by which any property, business, operation or right of
such Person is
subject or bound.
"Current Assets of the Business" shall mean the sum of the current
asset
accounts of the Business identified on Exhibit E as of 12:01 a.m.
(New York City
time) on the Closing Date, in each case to the extent such accounts
reflect
Acquired Assets, calculated in accordance with GAAP provided that
such current
assets shall not include Tax assets.
-3-
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"Current Liabilities of the Business" shall mean the sum of the
current
liability accounts of the Business identified on Exhibit F as of
12:01 a.m. (New
York City time) on the Closing Date, in each case to the extent
such accounts
reflect Assumed Liabilities, calculated in accordance with GAAP.
Current
Liabilities of the Business shall include the employee compensation
owed to
employees of the Business for the Buyers' Assumed Payroll and any
directly
associated benefit expense, employment taxes and withholding
taxes.
"Debt" of any Person means all obligations of such Person (i) for
borrowed
money, (ii) evidenced by notes, bonds, debentures or similar
Contractual
Obligation or upon which interest charges are customarily paid,
(iii) for
deferred purchase price of property, goods or services, except
current accounts
payable arising in the ordinary course of business of such Person,
(iv) under
conditional sale or other title retention agreements relating to
property
purchased by such Person and all capitalized lease obligations, (v)
arising out
of obligations of third party secured by property or assets of such
Person
(regardless of whether or not such Person is liable for repayment
of such
obligations), (vi) in respect of letters of credit and bankers'
acceptances,
(vii) for Contractual Obligations relating to interest rate
protection, swap
agreements and collar agreements, (viii) in the nature of
Guarantees of the
obligations described in clauses (i) through (vii) above of any
other Person or
(ix) any prepayment or similar penalties for any of the
foregoing.
"DE
Sub" has the meaning set forth in the preamble.
"Disclosure Letter" has the meaning set forth in Section 3.
"Disputes Auditor" means any nationally recognized independent
registered
public accounting firm mutually agreed upon by the Sellers and the
Buyers.
"EBITDA" means operating income before interest expense, income
tax
expense, depreciation and amortization, non-recurring items, and
after
allocation of overhead expenses.
"Effective Time" means 11:59 p.m., New York City time, on the
date
immediately preceding the Closing Date.
"Employee Plans" means any "employee benefit plan" (as defined in
Section
3(3) of ERISA, whether or not subject to ERISA), any other bonus,
profit
sharing, compensation, pension, retirement, savings, severance,
deferred
compensation, fringe benefit, insurance, welfare, post-retirement
health or
welfare benefit, health, life, stock option, stock purchase,
restricted stock,
tuition refund, service award, company car or car allowance,
scholarship,
housing or living allowances, relocation, disability, accident,
sick pay, sick
leave, accrued leave, vacation, holiday, termination, unemployment,
individual
employment, independent contractor, consulting, executive
compensation,
incentive, commission, payroll practices, retention, change in
control,
non-competition, other material plan, agreement, policy, trust fund
or
arrangement (whether written or unwritten, insured or
self-insured).
"Employment Taxes" has the meaning set forth in Section 5.8(b).
-4-
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"Enforceable" means, with respect to any Contractual Obligation
stated to
be Enforceable by or against any Person, that such Contractual
Obligation is a
legal, valid and binding obligation of such Person enforceable by
or against
such Person in accordance with its terms, except to the extent that
enforcement
of the rights and remedies created thereby is subject to
bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general
application
affecting the rights and remedies of creditors and to general
principles of
equity (regardless of whether enforceability is considered in a
proceeding in
equity or at law).
"Environmental Laws" means all applicable federal, state and
local
statutes, rules, orders, judgments, permits, regulations, and
ordinances or the
common law concerning or relating to the environment, occupational
health and
safety, pollution, or protection of public health including without
limitation
all those relating to the generation, manufacture, processing,
import, export,
labeling, recycling, registration, investigation, documentation,
use, handling,
transportation, treatment, storage, remediation, disposal, Release,
or
threatened Release of any Materials of Environmental Concern, as
such
requirements are enacted and in effect on or prior to the Closing
Date,
including, without limitation, any statute, regulation,
administrative decision
or order pertaining to: (i) air, water, and noise pollution, (ii)
groundwater
and soil contamination, (iii) the Release, threatened Release, or
accidental
Release into the environment, the workplace or other areas of
Materials of
Environmental Concern, including emissions, discharges, injections,
spills,
escapes or dumping of Materials of Environmental Concern, (iv)
transfer of
interests in or control of real property which may be contaminated,
(v)
community or worker right-to-know disclosures with respect to
Materials of
Environmental Concern, (vi) the protection of wild life, marine
life and
wetlands, and endangered and threatened species, (vii) storage
tanks, vessels,
containers, abandoned and discarded barrels and other closed or
breached
receptacles, and (viii) health and safety of employees and other
persons. As
used in this Agreement, the term "Release" shall have the meaning
set forth in
CERCLA.
"Equity Interests" means (a) any capital stock, share, partnership
or
membership interest, unit of participation or other similar
interest (however
designated) in any Person and (b) any option, warrant, purchase
right,
conversion right, exchange right or other Contractual Obligation
which would
entitle any Person to acquire any such interest in such Person or
otherwise
entitle any Person to share in the equity, profit, earnings, losses
or gains of
such Person (including stock appreciation, phantom stock, profit
participation
or other similar rights).
"ERISA" means the Employment Retirement Income Security Act of
1974, as
amended, and the rules and regulations promulgated thereunder, or
any successor
statute, rules and regulations thereto.
"ERISA Affiliate" means any entity (whether or not incorporated)
that is
treated as a single employer together with the Sellers under
Section 414(b) or
(c) of the Code and, with respect to Section 412 of the Code, under
Section
414(m) or (o) of the Code or Section 4001(b) of ERISA.
"Estimated Adjustment for Collection" has the meaning set forth in
Section
2.4(a).
"Estimated Collection Adjustment Statement" has the meaning set
forth in
Section 2.4(a).
-5-
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"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section
2.3.
"Facilities" means any and all buildings and other structures,
improvements
and fixtures located on the Real Property.
"Final Closing Statement" has the meaning set forth in Section
2.8(d).
"Financial Information" shall mean the following financial
information
related to the Business and prepared without audit but in
accordance with GAAP
(but does not include footnotes) applied on a consistent basis
throughout the
periods covered thereby, including the application of the pro forma
adjustments
contained therein to reflect the Business on a stand alone basis:
(a) balance
sheets and statements of income as of and for the fiscal years
ended October 30,
2005, October 29, 2006, and October 28, 2007; (b) a balance sheet
and a
statement of income as of and for the six (6) month period ended
April 27, 2008;
and (c) a balance sheet and a statement of income as of and for the
months ended
May 25, 2008 and June 22, 2008.
"FIRPTA Certificate" has the meaning set forth in Section
2.6(d).
"GAAP" means United States generally accepted accounting
principles
consistently applied.
"GA
Sub" has the meaning set forth in the preamble.
"Governmental Authority" means any United States federal, state,
local or
foreign government, or political subdivision thereof, or any
multinational
organization or authority, or any authority, agency or commission
entitled to
exercise any administrative, executive, judicial, legislative,
police,
regulatory or taxing authority or power, or any court or tribunal
(or any
department, bureau or division thereof), or any arbitrator or
arbitral body.
"Guarantee" means, with respect to any Person, (i) any guarantee of
the
payment or performance of, or any contingent obligation in respect
of, any Debt
or other obligation of any other Person, (ii) any other arrangement
whereby
credit is extended to one obligor on the basis of any promise or
undertaking of
another Person (A) to pay the Debt or other Liability of such
obligor, (B) to
purchase any obligation owed by such obligor, (C) to purchase or
lease assets
under circumstances that would enable such obligor to discharge one
or more of
its obligations or (D) to maintain the capital, working capital,
solvency or
general financial condition of such obligor, or (iii) any liability
as a general
partner of a partnership or as a venturer in a joint venture in
respect of Debt
or other obligations of such partnership or venture.
"Guarantor" has the meaning set forth in the preamble.
"Hazardous Materials" means all explosive or radioactive materials
or
substances, hazardous or toxic substances, wastes or chemicals,
petroleum
(including crude oil or any fraction thereof) and all other
materials or
chemicals regulated pursuant to any Environmental Law, provided,
however,
Hazardous Materials shall exclude routine office cleaning supplies
used in the
Ordinary Course of Business.
-6-
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"HSR
Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976,
as amended.
"Indemnified Party" has the meaning set forth in Section 7.2.
"Indemnifying Party" has the
meaning set forth in Section 7.2.
"Instrument of Assignment and Assumption" has the meaning set forth
in
Section 2.6(b).
"Intellectual Property Assignment" has the meaning set forth in
Section
2.6(a).
"Intellectual Property" or "Intellectual Property Rights" means
all
proprietary and intellectual property rights, in any jurisdiction,
whether owned
or held for use or under license, including such rights in and to:
(i)
trademarks, service marks, brand names, distinguishing guises,
trade dress,
trade names, words, symbols, color schemes, business names,
internet domain
names and other indications of origin (collectively, "Trademarks");
(ii) patents
and pending patent applications (including all provisionals,
divisionals,
continuations, continuations-in-part, re-examination and reissue
patents),
utility models, inventors' certificates, invention disclosures,
inventions, and
discoveries (collectively, "Patents"); (iii) trade secrets and
other
confidential or non-public business or technical information,
including ideas,
formulas, compositions, program devices, compilations, patterns,
discoveries and
improvements, know-how, show-how, manufacturing and production
methods,
processes and techniques, and research and development information
drawings,
designs, specifications, plans, proposals and technical and system
data;
analytical models, investment and lending strategies and records,
financial and
other products; financial, marketing and business data, pricing and
cost
information; business and marketing plans and customer and supplier
lists and
information; in each case whether patentable, copyrightable or not
("Trade
Secrets"); (iv) software computer programs and databases, including
all object
code, source code, algorithms, subroutines, specifications, data
and
documentation and all translations, compilations, arrangements,
adaptations, and
derivative works thereof, in each case whether patentable,
copyrightable or not,
and all documentation and embodiments thereof in all forms of
media
(collectively, "Software"); (v) all copyrights, including
copyright
registrations and applications to register copyrights, including
for writings
and other works of authorship, product documentation, marketing
materials,
brochures and training materials ("Copyrights"); (vi) rights to
limit the
access, use or disclosure of Confidential Information by any
Person; (vii)
rights of privacy and publicity; and (viii) any technology owned,
held for use,
licensed or used by the Sellers in connection with the Business,
that may not be
deemed to be not encompassed in the aforementioned sub-definitions,
including
without limiting the generality of the foregoing specifications,
financial,
marketing and business data, analytical models, customer and
supplier lists, and
engineering data; show-how and know-how. Each of the foregoing
includes without
limitation all registrations of, and applications to register, with
any
government authority and any renewals or extensions thereof; the
goodwill
associated with each of the aforementioned categories; and any
past, present or
future claims or causes of action or defenses arising out of or
related to any
of the foregoing.
"IRS" means the United States Internal Revenue Service or any
successor
thereto.
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<PAGE>
"Key
Seller Employees" means those Seller Employees listed on
Schedule
6.2(i)(x).
"Large Basket" has the meaning set forth in Section 7.3(a).
"Leases" means, collectively, the Real Property Leases and the
Personal
Property Leases.
"Legal Requirement" means any United States federal, state, local
or
foreign law, statute, standard, ordinance, code, rule, regulation,
resolution or
promulgation, or any order, judgment or decree of any Governmental
Authority, or
any similar provision having the force and effect of law.
"Liability" means, with respect to any Person, any liability or
obligation
of such Person whether known or unknown, whether asserted or
unasserted, whether
determined, determinable or otherwise, whether absolute or
contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, whether
incurred or
consequential, whether due or to become due and whether or not
required under
GAAP to be accrued on the financial statements of such Person.
"Lien" means, with respect to any property or asset, any mortgage,
lien,
pledge, charge, security interest, community or other marital
property interest,
equitable interest, license, option, right of way, easement,
encroachment,
servitude, right of first offer or first refusal, buy/sell
agreement or other
encumbrance with respect to the use, construction, voting (in the
case of any
security or equity interest), transfer, receipt of income or
exercise of any
other attribute of ownership in respect of such property or
asset.
"Listings" means the name, street address (including suite or
apartment
number) and telephone number of a business or residential telephone
subscriber.
"Losses" means, collectively, any Actions, Liabilities,
governmental
orders, Liens, losses, damages, diminution of value, bonds, dues,
assessments,
fines, penalties, Taxes, fees, costs (including costs of
investigation, defense
and enforcement of this Agreement), expenses or amounts paid in
settlement (in
each case, including reasonable attorneys' and experts' fees and
expenses),
whether or not involving a Third Party Claim. Losses shall only
include actual
damages and shall not include any punitive damages.
"Maintech Amendment Agreement" means the amendment, reasonably
acceptable
to Buyers, to add each Buyer as a party and to include all services
received
from Maintech as of the date of this Agreement, dated on or around
the Effective
Time, to the Maintenance Agreement, effective as of April 4, 2007,
between Volt
Delta Resources, LLC (Maintech Division) and Volt Directory, Inc.,
and the
related Maintech server service contracts.
"Material Adverse Effect" means any change in, or effect on, the
Business,
the Acquired Assets or the Assumed Liabilities that, when
considered either
individually or in the aggregate, (i) has had or would reasonably
be expected to
have a material adverse effect on the condition (financial or
otherwise),
operations, assets or prospects of the Business or would impair the
ability to
consummate the Contemplated Transactions, other than those
resulting from
general economic conditions affecting the industry in which the
Business is
carried on or (ii) would prevent or materially impair the
consummation of the
Contemplated Transactions.
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<PAGE>
"Materials of Environmental Concern" means (i) any pollutants,
contaminants, or hazardous substances (as such terms are defined
under CERCLA),
pesticides, (as such term is defined under the Federal Insecticide,
Fungicide
and Rodenticide Act), hazardous wastes (as such term is defined
under the
Resource Conservation and Recovery Act), other hazardous,
radioactive or toxic
materials, oil, petroleum and petroleum products (and fractions
thereof), or any
other material listed or subject to regulation under any law,
statute, rule,
regulation, permit, or directive due to its potential, directly or
indirectly,
to harm the environment or the health of humans or other living
beings,
including, without limitation, those substances defined or
regulated as
hazardous or toxic under Environmental Laws.
"Net
Purchase Price" has the meaning set forth in Section 2.4(a).
"Non-competition and Non-solicitation Agreement" means the
agreement in
form and substance agreed to by the Parties containing the
covenants set forth
in Exhibit K hereto.
"Notice of Communication" has the meaning set forth in Section
5.3(b).
"Office Lease" means the Real Property Lease for the Real
Property
described in Exhibit H.
"Office Sublease" means the sublease from the Sellers to the
Buyers
containing the terms set forth in Exhibit H, in satisfactory form
to the
landlord, the Sellers and the Buyers, of the Real Property
described in Exhibit
H.
"Ordinary Course of Business" means an action taken by any Seller
in the
ordinary course of such Seller's Business which is consistent with
past customs
and practices of such Seller (including past practice with respect
to quantity,
amount, magnitude and frequency, standard employment, inventory and
payroll
policies) which is taken in the ordinary course of the normal
day-to-day
operations of such Seller.
"Organizational Documents" means, with respect to any Person (other
than an
individual), (a) the certificate or articles of incorporation or
organization
and any joint venture, limited liability company, operating or
partnership
agreement and other similar documents adopted or filed in
connection with the
creation, formation or organization of such Person and (b) all
by-laws, voting
agreements and similar documents, instruments or agreements
relating to the
organization or governance of such Person, in each case, as amended
or
supplemented.
"Outside Date" shall mean October 31, 2008.
"Parent" has the meaning set forth in the preamble.
"Parties" has the meaning set forth in the preamble.
"Party" means any of the Parties individually.
"Permitted Liens" means (i) statutory or common law liens to
secure
landlords, lessors or renters under real or personal property
leases or rental
agreements to the extent that no payment or performance under any
such lease or
rental agreement is in default, arrears or is otherwise past due,
(ii) deposits
or pledges made in connection with, or to secure payment of,
workers'
compensation, unemployment insurance or old age pension programs
mandated under
applicable laws, (iii) statutory or common law liens in favor of
carriers,
warehousemen, mechanics and materialmen, statutory or common law
liens to secure
claims for labor, materials or supplies and other like liens, which
secure
obligations to the extent the payment thereof is not in arrears or
otherwise
past due, and (iv) any other Liens set forth on Schedule III
specified as a
Permitted Lien; provided that each of clauses (i), (ii), (iii) and
(iv) shall
only include such Liens that relate to the Business.
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<PAGE>
"Person" means an individual, a partnership, a corporation, an
association,
a joint stock company, a limited liability company, a business
trust, a trust, a
joint venture, an unincorporated organization, a Governmental
Authority, an
estate or other entity or organization of any kind.
"Personal Property" has the meaning set forth in Section
2.1(a).
"Personal Property Leases" has the meaning set forth in Section
2.1(b).
"Policies" has the meaning set forth in Section 3.16(c).
"Post-Effective Time Tax Period" means (a) any Tax period beginning
after
the Effective Time and (b) with respect to any Straddle Period, the
portion of
such period beginning after the Effective Time.
"Pre-Effective Time Tax Period" means (a) any Tax period ending on
or
before the Effective Time and (b) with respect to any Straddle
Period, the
portion of such period ending on or before the Effective Time.
"Preliminary Closing Statement" has the meaning set forth in
Section
2.8(a)(i).
"Purchase Price" has the meaning set forth in Section 2.4(a).
"Real Property" means, collectively, each real property, premises
or
location used or held for use in connection with, the conduct of
the Business.
"Real Property Leases" has the meaning set forth in Section
2.1(b).
"Records" has the meaning set forth in Section 2.1(j).
"Related Person" means, with respect to a particular
individual:
(a)
each other
member of such individual's Family (as defined below);
(b)
any Person
that is directly controlled by such individual or one
or more members of such individual's Family;
(c)
any Person
in which such individual or members of such individual's
Family hold (individually or in the aggregate) a Material Interest
(as defined
below); or
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<PAGE>
(d)
any Person
with respect to which such individual or one or more
members of such individual's Family serves as a director, officer,
manager,
partner, executor or trustee (or in a similar capacity).
With
respect to a specified Person other than an individual:
(a)
any Person
that holds a Material Interest in such specified Person
(as defined below);
(b)
each
Person that serves as a director, officer, partner, executor
or trustee of such specified Person (or in a similar capacity);
(c)
any Person
in which such specified Person holds a Material Interest
(as defined below);
(d)
any Person
with respect to which such specified Person serves
as a general partner or a trustee (or in a similar capacity);
or
(e)
any
Related Person of any individual described in clause (a) or
(b).
For
purposes of this definition, (a) the "Family" of an individual
includes
(i) the individual, (ii) the individual's spouse, (iii) any other
natural person
who is related to the individual or the individual's spouse within
the first
degree, and (iv) any other natural person who resides with such
individual, and
(b) "Material Interest" means direct or indirect beneficial
ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) of
voting securities or other voting interests representing at least
five percent
(5%) of the outstanding voting power of a Person or equity
securities or other
equity interests representing at least five percent (5%) of the
outstanding
equity securities or equity interests in a Person.
"Release" has the meaning set forth in the definition of
Environmental
Laws.
"Retained Contracts" has the meaning set forth in Section
3.14(a).
"Sales Tax" has the meaning set forth in Section 5.9.
"Seller Dispute
Notice" has the meaning set forth in Section 2.8(b).
"Seller Employee" means all of those individuals who are actively
employed
by the Sellers in connection with the Business as of the Effective
Time, whether
on a full-time or part-time basis, and who are listed on Schedule
I.
"Sellers Indemnified Person" has the meaning set forth in Section
7.1(b).
"Seller Plan" means an Employee Plan that the Sellers or any of
their
Affiliates sponsor, maintain, contribute to or are obligated to
contribute to,
or under which the Sellers or any of their Affiliates have or may
have any
liability, directly or indirectly, or which benefits any current or
former
employee, director, consultant or independent contractor of the
Sellers or any
of their Affiliates or the beneficiaries or dependents of such
person, by or on
behalf of the Sellers or any of their Affiliates.
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<PAGE>
"Seller" and "Sellers" have the meanings set forth in the
preamble.
"Sellers' Consents" has the meaning set forth in Section 3.8.
"Sellers' Knowledge" means the actual knowledge, after
reasonable
investigation, of Scott Bialor, Louise Ross, Ron Cunigan, Gerard
DiPippo, Jack
Egan, Robert Epstein, Dave Gilbert, Ron Kochman, Steven Shaw, Greg
Shearer and
Ed Valentine.
"Significant Leases" shall mean the leases set forth on Schedule
3.9(f).
"Small Basket" has the meaning set forth in Section 7.3(a).
"Software" has the meaning set forth in the definition of
Intellectual
Property.
"Straddle Period" has the meaning set forth in Section 5.8(b).
"Tax" or "Taxes" means (i) any United States federal, state, or
local or
any non-United States income, gross receipts, license, payroll,
employment,
excise, severance, stamp, occupation, premium, windfall profits,
environmental,
customs duties, capital stock, franchise, profits, withholding,
social security
(or similar, including FICA), unemployment, disability, real
property, personal
property, sales, use, ad valorem, license, transfer, registration,
value added,
alternative or add-on minimum, estimated, or other tax of any kind
or any charge
of any kind whatsoever, including any interest, penalty, or
addition, in each
case whether disputed or not, and (ii) any liability for the
payment of any
amounts of the type described in clause (i) of this definition as a
result of
being a member of an affiliated, consolidated, combined or unitary
group for any
period, as a result of any tax sharing or tax allocation agreement,
arrangement
or understanding, or as a result of being liable for another
person's taxes as a
transferee or successor, by contract or otherwise.
"Tax
Return" means any return, declaration, report, claim for refund,
or
information return or statement relating to Taxes, including any
schedule or
attachment thereto, and including any amendment thereof.
"Taxing Authority" means the IRS and any other Governmental
Authority
responsible for the administration of any Tax.
"Telephone Directory" means a compilation of Listings organized
alphabetically, by subject or any other means of classification, or
compiled in
a manner designed to facilitate search and retrieval, and which is
intended for
public dissemination, regardless of the distribution medium in
which such
Listings are published, produced or otherwise offered or made
available to
end-users, whether now known or later developed (including print
media, CD-ROM
or other disk, computer, telephone, television, cable, electronic
kiosk or
similar device, cellular phone, personal organizer or other
hand-held device,
Internet or combination of multiple media) or whether such
end-users are charged
for such Listings information.
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<PAGE>
"Third Party Claim" has the meaning set forth in Section
7.5(a).
"Transaction Documents" means this Agreement and each Closing
Document.
"Transfer Taxes" has the meaning set forth in Section 5.9.
"Transition Services Agreement" has the meaning set forth in
Section
2.6(c).
"Treasury Regulations" means the Treasury Regulations (including
Temporary
Regulations) promulgated by the United States Department of
Treasury with
respect to the Code or other United States federal Tax
statutes.
"United States" means the United States of America.
"Uruguay Support Agreement" means the agreement, dated on or around
the
Effective Time, from the Buyers to the Sellers, containing the
terms set forth
in Exhibit L.
"WARN" shall have the meaning set forth in Section 3.15(b).
"YPG
Directories" has the meaning set forth in the preamble.
"YPG
Systems" has the meaning set forth in the preamble.
2. ACQUISITION
OF ASSETS BY THE BUYERS.
2.1.
Purchase and
Sale of Assets. The Sellers agree to sell and transfer
to the Buyers, and the Buyers agree to purchase and acquire from
the Sellers, at
the Closing, subject to the exclusions contained in Section 2.2 and
subject to
and upon the other terms and conditions contained herein, all of
the Sellers'
right, title and interest in and to all of the assets, properties
and rights of
the Sellers which are used or maintained in connection with the
Business of
whatever nature, kind and description, whether tangible or
intangible (including
goodwill) wherever located (collectively, the "Acquired Assets")
free and clear
of any Liens and Liabilities, other than Permitted Liens and
Assumed
Liabilities. The Acquired Assets shall include, without limitation,
the
following assets and rights of the Sellers used in the
Business:
(a)
(i) the
tangible personal property and leasehold improvements,
including machinery, equipment, computer hardware,
telecommunications systems,
alarm systems, tools, furniture, fixtures, furnishings and
shelving, owned by
the Sellers as of the date hereof and used in the conduct of the
Business, each
as set forth on the fixed asset register attached hereto as
Schedule 2.1(a)(i),
and (ii) the inventories and supplies owned by the Sellers as of
the date hereof
for use in connection with the conduct of the Business, each as set
forth on
Schedule 2.1(a)(ii) (collectively with the items set forth on
Schedule
2.1(a)(i), the "Personal Property");
(b)
all rights
of each Seller (i) as tenant under the leases,
subleases, licenses or other type of use or occupancy agreements
relating to any
Real Property (collectively, the "Real Property Leases"), and (ii)
under the
leases relating to such Personal Property as is used in the
Business
(collectively, the "Personal Property Leases"), which Real Property
Leases and
Personal Property Leases are set forth on Schedule 2.1(b);
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<PAGE>
(c)
all Cash
generated by the operation of the Business after the
Effective Time;
(d)
all rights
of the Sellers to the telephone numbers used in
the Business, as set forth on Schedule 2.1(d);
(e)
all of the
Sellers' rights under the Contractual Obligations of
the Sellers used in the conduct of the Business listed on Schedule
2.1(e) (the
"Assumed Contracts") and all outstanding offers or solicitations
made by or to
the Sellers to enter any Contractual Obligation related to the
Business;
(f)
Assigned
Intellectual Property, including as set forth in
Schedule 2.1(f);
(g)
Intentionally omitted;
(h)
all
licenses, permits, consents, certificates, franchises or
other governmental authorizations used in the conduct of the
Business, other
than any such licenses, permits, consents, certificates, franchises
or other
governmental franchises which cannot be legally transferred,
which
non-transferable governmental authorizations are listed on Schedule
2.1(h);
(i)
software
licenses and other licenses granting rights or
providing access to technology that is exclusively used in the
Business, or if
used in the Business and other businesses retained by the Sellers,
then such
portion of such licenses that are used in the Business, to the
extent such
licenses can be divided, sublicensed or proportionally
transferred;
(j)
all books, records, files,
printouts, drawings, data, files,
notes, notebooks, accounts, invoices, correspondence,
specifications, creative
materials, customer lists, databases, financial, business,
scientific,
technical, economic or engineering information, patterns, plans,
compilations,
advertising or promotional materials, marketing materials, studies,
reports,
memoranda or papers (collectively, the "Records") in the Sellers'
possession,
whether in hard copy, electronic or other format, currently used in
the conduct
of the Business; provided, however, such Records shall not include
any original
(i) employee personnel files or (ii) accounting and Tax Records,
but shall
include copies thereof;
(k)
all
goodwill associated with the Business or the Acquired
Assets, together with the right to represent to third parties that
the Buyers
are the successor to the Business;
(l)
without
duplication, all current assets listed on Exhibit E;
(m)
all
proceeds received or receivable by the Sellers under
insurance policies as a result of any damage to or destruction of
any Acquired
Asset that occurs during the period between the date hereof and the
Closing (but
excluding any proceeds due under business interruption insurance)
to the extent
the Sellers have not used such proceeds to repair or replace such
damaged or
destroyed Acquired Assets;
(n)
all
lockboxes of the DE Sub and GA Sub, including those held at
Bank
of America; and
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<PAGE>
(o)
other than
the categories of assets enumerated in subsections
(a) through (n) of this Section 2.1, all other assets of the
Sellers of every
kind and description, tangible or intangible, used in the conduct
of the
Business, other than the Excluded Assets.
For
the avoidance of doubt, except as set forth in this Section 2.1,
any
assets of the Sellers that are used in the operation of the
Business, as of the
date hereof, shall be Acquired Assets.
2.2.
Excluded Assets.
Notwithstanding any provision in the
Transaction Documents to the contrary, the Buyers agree that none
of the
following assets, properties, rights or interests of the Sellers
(the "Excluded
Assets") shall be Acquired Assets:
(a)
the
consideration delivered to the Sellers by the Buyers pursuant
to
the Transaction Documents;
(b)
all rights
of each Seller arising under the Transaction Documents;
(c)
other than
as described in Section 2.1(m), all rights in and with
respect to insurance policies of each Seller;
(d)
any
governmental authorization listed in Schedule 2.1(h);
(e)
refunds or
claims for refunds of Taxes paid by the Sellers;
(f)
except as
set forth in Section 5.24, all rights to use the name
"Volt", including any names under which the Sellers currently
conduct the
Business (other than the Trademarks and domain names as set out in
Schedule
3.20(a) section (ii) (Domain Names) and section (iv)
(Trademarks);
(g)
any Cash
owned by the Sellers as of the Effective Time;
(h) all minute books,
stock records and corporate seals (provided the
Buyers shall have the right to inspect such items, other than those
of the
Parent, upon reasonable notice at the Parent's New York City
location);
(i)
any and
all assets that are used exclusively in the operations of
the Parent or its Affiliates in Uruguay; and
(j)
[intentionally omitted]; and
(k)
any other
item specifically listed on Schedule 2.2(k).
For
the avoidance of doubt, any assets of the Sellers that are not
currently used in the operation of the Business, as of the date
hereof, shall be
Excluded Assets.
2.3.
Liabilities.
Notwithstanding any provision in this Agreement or
any other writing to the contrary, the Buyers are not assuming any
Liability of
the Sellers or any of the Sellers' respective Affiliates of
whatever nature,
whether presently in existence or arising hereafter, other than (i)
the Current
Liabilities of the Business (excluding Liabilities for any Taxes
other than
those assumed by the Buyers in clause (ii), the current portion of
any Debt or
Guarantee, claims for severance and/or change of control payments,
and claims
arising under Employee Plans, and other current Liabilities not
related to the
Acquired Assets, in each case that were generated prior to the
Effective Time)
outstanding as of the Effective Time as determined in accordance
with GAAP (in
each case, as they exist at the Effective Time provided they are
related to the
Acquired Assets) and (ii) property, Sales and Employment Taxes
specifically
allocated to the Buyers pursuant to Sections 5.8(b) and 5.9, which,
at the
Closing, and effective as of the close of business at the Effective
Time, the
Buyers shall assume (collectively, the "Assumed Liabilities");
provided that
notwithstanding anything to the contrary herein, Assumed
Liabilities shall not
include any other Liability of the Sellers or their Affiliates for
any Tax
related to any period prior to the Effective Time other than
withholding Taxes
as part of Buyers' Assumed Payroll obligation. For the avoidance of
doubt, the
Assumed Liabilities shall include:
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<PAGE>
(a)
all
Liabilities of each Seller under the Assumed Contracts and
Leases listed on Schedule 2.1(b) and Schedule 2.1(e) (other than
those
Liabilities that arose or accrued based on any act, event, or
omission that
occurred prior to the Effective Time (other than the execution of
this Agreement
and any ancillary agreements related to this Agreement) which shall
in all cases
be retained by such Seller irrespective of whether they are known
at Closing or
become known only after the Closing, or based on any breach or
default of a
Seller which occurred prior to the Effective Time);
(b)
all
Liabilities of the Sellers arising after the Effective Time
under any Contractual Obligation of the Sellers relating to or used
in the
conduct of the Business (other than the execution of this Agreement
and any
ancillary agreements related to this Agreement) included in the
Acquired Assets
that is entered into by the Sellers after the date hereof in
accordance with the
provisions of this Agreement (other than any Liabilities arising
out of or
relating to a breach or default that occurred prior to the
Effective Time);
(c)
all
Liabilities arising out of the ownership or operation of the
Business or the Acquired Assets after the Effective Time, except
with respect to
Liabilities arising from or related to compensation, employee
benefits,
severance and/or change of control payments, or Employee Plans, in
each case,
related to the period on or prior to the Closing (other than with
respect to the
Buyers' Assumed Payroll which shall be assumed by Buyers); and
(d)
all
Liabilities arising after the Effective Time related to the
Seller Employees who are hired by either Buyer other than claims of
Seller
Employees with respect to actions taken by the Sellers or their
Affiliates;
provided, that the Buyers shall in no event assume any Liabilities
of the
Sellers arising from or in connection with (i) any Excluded Asset;
(ii) any
transactions between the Sellers and any of their respective
Affiliates; (iii)
any Liabilities not relating to the Business or the Acquired
Assets; (iv) any
Debt or Guarantee (excluding Guarantees of Leases, which shall
constitute
Assumed Liabilities) of the Sellers; (v) any Seller's breach or
default of any
Contractual Obligation; (vi) any insurance policies of the Sellers,
(vii) any
Leases or Assumed Contracts that arose or accrued based on any act,
event, or
omission that occurred prior to the Closing Date, which shall in
all cases be
retained by the Sellers irrespective of whether they are known at
Closing or
become known only after the Closing or based on any breach or
default of the
Sellers that occurred prior to the Effective Time, (viii) any
claims, costs or
other Liabilities under any Employee Plans, including without
limitation
relating to health or retirement benefits, except as set forth on
Schedule
2.3(d), (ix) all claims arising under applicable Legal
Requirements; (x) any
severance or change of control payments; (xi) any Liability of the
Sellers
incurred (or resulting from any action occurring) prior to the
Closing that is
not otherwise an Assumed Liability, including, for the avoidance of
doubt, any
item set forth on Schedule 3.10; or (xii) any Liability related to
the Seller
Employees listed on Schedule 2.3(xii). All Liabilities that are not
expressly
assumed hereunder shall be retained by and remain Liabilities of
the Sellers and
satisfied by the Sellers in accordance with their terms (all such
Liabilities
not being assumed being herein referred to as the "Excluded
Liabilities").
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<PAGE>
2.4.
Purchase
Price.
(a)
In
consideration for the Acquired Assets, the Buyers shall assume
the Assumed Liabilities and pay to the Sellers at the Closing
aggregate cash
consideration of (i) $185 million (the "Purchase Price"), minus
(ii) the
Estimated Adjustment for Collection (such amount, the "Net Purchase
Price"). No
later than five (5) Business Days prior to the anticipated Closing
Date, the
Sellers shall deliver to the Buyers a written statement (the
"Estimated
Collection Adjustment Statement"), calculated in accordance with
Schedule II,
that is reasonably acceptable to the Buyers, and sets forth the
Sellers' good
faith calculation, as of 12:01 a.m. (New York City time) on the
Closing Date of
the Adjustment for Collection (the "Estimated Adjustment for
Collection"). The
Sellers will make available to the Buyers and their representatives
as requested
by the Buyers, all books, records and other documents used by the
Sellers in
preparing the Estimated Collection Adjustment Statement and
personnel of the
Sellers responsible for preparing or maintaining such books,
records and
documents. On the Closing Date, the Buyers shall deliver to the
Sellers payment,
by wire transfer to a bank account designated in writing by the
Sellers (such
designation to be made at least five (5) Business Days prior to the
Closing
Date), of immediately available funds in an amount equal to the Net
Purchase
Price (the "Closing Payment").
(b)
If the
Buyers object to the Sellers' calculation of the Estimated
Adjustment for Collection, the Buyers shall notify the Sellers in
writing within
two (2) Business Days after receipt of the Estimated Collection
Adjustment
Statement of its objections thereto (the "Buyers Dispute Notice").
The Buyers
Dispute Notice shall specify in reasonable detail the items of the
Estimated
Adjustment for Collection which are being disputed, shall set forth
a reasonably
detailed summary of the reasons for such dispute and shall include
the Buyers'
calculation of the Estimated Adjustment for Collection.
(c)
At the
request of the Buyers or the Sellers, any dispute between the
Parties relating to the Estimated Adjustment for Collection that
cannot be
resolved by them within two (2) Business Days after the Sellers'
receipt of the
Buyers Dispute Notice shall be referred to the Disputes Auditor for
decision,
and the decision of the Disputes Auditor shall be final and binding
on the
Parties. The Parties agree that they will require the Disputes
Auditor to render
its decision within five (5) Business Days after referral of the
dispute to the
Disputes Auditor for decision pursuant hereto. In making such
decision, the
Disputes Auditor shall consider only those items or amounts in the
Estimated
Collection Adjustment Statement as to which the Buyers objected in
the Buyers
Dispute Notice and that remain in dispute between the Buyers and
the Sellers.
Before referring a matter to the Disputes Auditor, the Parties
shall make a good
faith attempt to agree on procedures to be followed by the Disputes
Auditor
(including procedures for presentation of evidence). If the Parties
are unable
to agree upon procedures before the end of five (5) Business Days
after the
Sellers' receipt of the Buyers Dispute Notice, either Party may
refer the
dispute to the Disputes Auditor, and the Disputes Auditor shall
render its
decision as to such dispute in accordance with the terms of this
Agreement,
including GAAP where such determination is required under this
Agreement to be
in accordance with GAAP. If the Parties are able to agree upon such
procedures
before the end of such five (5) Business Day period, they shall, as
promptly as
practicable, submit evidence in accordance with the procedures
agreed upon, and
the Disputes Auditor shall decide the dispute in accordance
therewith as
promptly as practicable. The fees and expenses of the Disputes
Auditor for, and
relating to, the making of any such decision shall be borne by the
Parties
equally.
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<PAGE>
(d)
The
Estimated Collection Adjustment Statement shall be prepared in
good faith and in a manner consistent with the methodologies set
forth on
Schedule II attached hereto.
2.5.
The Closing. The
closing (the "Closing") of the purchase and sale
of the Acquired Assets and the assumption of the Assumed
Liabilities hereunder
shall take place at the offices of Ropes & Gray LLP, 1211
Avenue of the
Americas, New York, New York 10036 on the date that is the later to
occur of (x)
September 5, 2008 or (y) three (3) Business Days following the
satisfaction of
the conditions set forth in Sections 6.1, 6.2 and 6.3 (the "Closing
Date"). The
effective time of the Closing will be 12:01 a.m. (New York City
time) on the
Closing Date.
2.6.
Deliveries by
the Sellers and the Buyers. At the Closing:
(a)
The
Sellers shall deliver to the Buyers (i) a bill of sale in the
form attached hereto as Exhibit A-1 (the "Bill of Sale"), (ii) an
Assignment and
Assumption of Lease (or sublease), with respect to any Real
Property Lease, if
obtained prior to the Closing, in the form attached hereto as
Exhibit A-2 (with
such modifications as may be necessary (x) for the satisfaction of
such
landlord, provided that no modifications may be made to any such
Real Property
Lease without prior written consent of the Buyers and (y) to comply
with
applicable Legal Requirements of the state, county or municipality
in which the
applicable Real Property covered by a Real Property Lease is
located, as
reasonably determined by the Parties) (each an "Assignment and
Assumption of
Lease"), (iii) an Intellectual Property Assignment (or sublicense)
in the form
attached hereto as Exhibit A-3 with such modifications as may be
necessary to
comply with applicable Legal Requirements of the relevant
intellectual property
office or registrar, as reasonably determined by the Parties (each
an
"Intellectual Property Assignment"), and (iv) such other
instruments of sale,
transfer, conveyance and assignment as the Buyers and their counsel
have
reasonably requested at least two (2) Business Days prior to the
Closing. The
Sellers acknowledge and agree that the terms and provisions of the
Assignment
and Assumption of Lease are not intended to, and do not, in any way
waive,
modify, limit, or replace any of the terms, provisions, rights or
remedies
contained in this Agreement or any document or instrument executed
and delivered
in connection with this Agreement or the transactions contemplated
hereby. To
the extent of any conflict (actual or perceived) between the terms
of this
Agreement and the Assignment and Assumption of Lease, the terms of
this
Agreement shall govern.
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<PAGE>
(b)
The Buyers
shall deliver to the Sellers (i) payment in an amount
equal to the Closing Payment, in immediately available funds by
wire transfer to
a bank account designated by the Sellers (such designation to be
provided to the
Buyers not later than five (5) Business Days prior to the Closing
Date), (ii) an
instrument of assignment and assumption in the form attached hereto
as Exhibit B
(the "Instrument of Assignment and Assumption"), (iii) such other
instruments of
assumption of liabilities as the Sellers and their counsel have
reasonably
requested at least two (2) Business Days prior to the Closing.
(c)
The
Sellers and the Buyers shall enter into a Transition Services
Agreement substantially in the form attached hereto as Exhibit C
(the
"Transition Services Agreement").
(d)
The
Sellers will have delivered to the Buyers a certification dated
as of the Closing Date (in such form as may be reasonably requested
by counsel
to the Buyers) conforming to the requirements of Treasury
Regulations
1.1445-2(b)(2) (the "FIRPTA Certificate").
(e)
The
Sellers will have delivered to the Buyers all documentation
necessary to (i) release any Liens other than Permitted Liens on
the Acquired
Assets and (ii) all Guarantees related to the Business.
(f)
The Buyers
shall have delivered to the Sellers signed copies of all
real property transfer Tax Returns that the Sellers have determined
are
necessary, either in connection with the Sellers' payment of
Transfer Taxes
pursuant to Section 5.9 or (as long as Seller is liable under this
Agreement for
such Taxes) otherwise in connection with the assignment of leases
included among
the Acquired Assets. Such transfer Tax Returns shall be prepared by
the Sellers
at their sole cost and expense and shall be subject to the Buyers'
prior
approval before filing or submission, which approval the Buyers
shall not
unreasonably withhold, condition or delay.
(g)
The
Sellers shall deliver to the Buyers hard copies and an
electronic copy existing and in use as of the Closing of the
marketing,
advertising and promotional documents owned by the Sellers, such as
customer
lists, marketing and promotional plans, documents and materials,
field force
training manuals and materials, and the like, used in the
Business.
(h)
The
Sellers will have delivered to the Buyers all consents
obtained,
if any, pursuant to Section 5.3(b).
(i)
The
Sellers and the Buyers will have delivered to each other
fully-executed copies of each of the Maintech Amendment Agreement,
the Uruguay
Support Agreement, the Non-competition and Non-solicitation
Agreement and the
Office Sublease.
Each
of the agreements and instruments referenced in clauses (a)
through
(i) shall be governed by and construed in accordance with the terms
of this
Agreement and, in the event that any provision of such agreements
is construed
to conflict with a provision in this Agreement, the provision in
this Agreement
shall be deemed to be controlling. As used in this Agreement, the
term "Closing
Documents" shall mean the documents described in clauses (a)
through (i) and any
other instruments of sale, transfer, conveyance, assignment, and
assumption of
liabilities executed and delivered by the Parties pursuant to this
Section 2.6
or Section 5.3 (Commercially Reasonable Efforts; Third Party
Consents).
Simultaneously with such deliveries, the Sellers shall deliver to
the Buyers the
keys and any other instruments needed for physical access to the
Acquired Assets
at any of the Sellers' locations.
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<PAGE>
2.7.
Allocation of
Purchase Price.
(a) No later than ten (10) days prior to the anticipated Closing
Date,
the Buyers shall prepare and deliver to the Sellers a draft
allocation schedule
allocating the Purchase Price (and all other capitalized costs)
among the
Acquired Assets in accordance with Code Section 1060 and the
Treasury
Regulations thereunder (and any similar provision of state, local,
or non-United
States law, as appropriate) and the methodology set forth on
Schedule 2.7(a),
which allocation and any adjustments thereto shall be non-binding
among the
Parties hereto (but the allocation methodology on Schedule 2.7(a)
shall be
binding on the Parties hereto).
(b) No later than the day on which the Preliminary Closing
Statement
is provided pursuant to Section 2.8(a)(i), the Buyers shall prepare
an
allocation of the Net Purchase Price (and all other capitalized
costs) among the
Acquired Assets in accordance with Schedule 2.7(a) and consistent
with Code
Section 1060 and the Treasury Regulations thereunder (and any
similar provision
of state, local, or non-United States law, as appropriate) and the
methodology
set forth on Schedule 2.7(a), which allocation and any adjustments
thereto shall
be binding among the Parties hereto. The Buyer shall deliver such
allocation to
the Sellers no later than the day on which the Preliminary Closing
Statement is
provided pursuant to Section 2.8(a)(i). In connection with the
Buyers'
preparation of the allocation, the Sellers shall timely and
properly prepare,
execute, file, and deliver all such documents, forms, and other
information as
the Buyers may reasonably request. If the Sellers do not provide
any comments to
the Buyers in writing within five (5) Business Days following
delivery by the
Buyers of the proposed allocation, then the allocation proposed by
the Buyers
shall be deemed to be final and binding. If, however, the Sellers
submit
comments to the Buyers within such five (5) Business Day period,
the Buyers and
the Sellers shall negotiate in good faith to resolve any
differences within five
(5) Business Days after the receipt of such comments from the
Sellers. If the
Sellers and the Buyers are unable to reach a resolution within such
five (5)
Business Day period, then all remaining disputed items shall be
submitted for
resolution to the Disputes Auditor, which shall make a final
determination as to
the disputed items within five (5) Business Days after such
submission, and such
determination shall be final, binding and conclusive on the Sellers
and the
Buyers. Once the allocation of the Purchase Price is determined to
be final, it
shall be set forth on Schedule IV to this Agreement. The fees and
disbursements
of the Disputes Auditor shall be shared equally between the Buyers
and the
Sellers. The Buyers and the Sellers and their respective Affiliates
shall
report, act, and file Tax Returns (including, but not limited to,
Internal
Revenue Service Form 8594) in all respects and for all purposes
consistent with
the allocation. The Buyers shall prepare any adjustments required
to the
allocation. Neither the Buyers nor the Guarantor nor any Seller
shall take any
position (whether in audits, Tax Returns, or otherwise) that is
inconsistent
with such allocation unless required to do so by applicable Legal
Requirement.
(c) The Parties acknowledge that all of the Real Property Leases
are at
or above market and have no value.
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<PAGE>
2.8.
Post Closing
Adjustment.
(a)
Preparation of Preliminary Closing Statement.
(i)
As soon as reasonably practicable after the Closing Date but
in any
event within ninety (90) days thereafter, the Buyers
shall prepare and deliver to the Sellers a statement (the
"Preliminary Closing Statement") setting forth, as of 12:01
a.m. (New York City time) on the Closing Date a statement
detailing the final adjustment for the Adjustment for
Collection.
(ii) The
Preliminary Closing Statement shall be prepared in
accordance with GAAP, and shall be prepared in a form and
manner consistent with the preparation of the sample
Preliminary Closing Statement attached hereto as Schedule II
(which, solely for illustrative purposes, was prepared as
though the Closing had occurred on May 25, 2008).
(iii) The Buyers
will make available to the Sellers and their
representatives, including their independent registered
public accounting firm, as requested by the Sellers, all
books, records and other documents pertaining to the
Business used by the Buyers in preparing the Preliminary
Closing Statement and personnel of the Buyers responsible
for preparing or maintaining such books, records and
documents and the Buyers' independent registered public
accounting firm.
(b)
Review of
Preliminary Statements. The Preliminary Closing Statement
shall be binding and conclusive upon, and deemed accepted by, the
Sellers unless
the Sellers shall have notified the Buyers in writing within thirty
(30) days
after receipt of the Preliminary Closing Statement of any
objections thereto
(the "Seller Dispute Notice"). The Seller Dispute Notice shall
specify in
reasonable detail the items of the Preliminary Closing Statement
which are being
disputed, shall set forth a reasonably detailed summary of the
reasons for such
dispute. Except as specified in the Seller Dispute Notice, the
Sellers shall be
deemed to have agreed with the Preliminary Closing Statement
delivered by the
Buyers pursuant to Section 2.8(a).
(c)
Resolution
of Disputes. At the request of the Buyers or the
Sellers, any dispute between the Parties relating to the
Preliminary Closing
Statement that cannot be resolved by them within thirty (30) days
after the
Buyers' receipt of the Seller Dispute Notice shall be referred to
the Disputes
Auditor for decision, and the decision of the Disputes Auditor
shall be final
and binding on both Parties. The Parties agree that they will
require the
Disputes Auditor to render its decision within thirty (30) days
after referral
of the dispute to the Disputes Auditor for decision pursuant
hereto. In making
such decision, the Disputes Auditor shall consider only those items
or amounts
in the Preliminary Closing Statement as to which the Sellers
objected in the
Seller Dispute Notice and that remain in dispute between the Buyers
and the
Sellers. Before referring a matter to the Disputes Auditor, the
Parties shall
make a good faith attempt to agree on procedures to be followed by
the Disputes
Auditor (including procedures for presentation of evidence). If the
Parties are
unable to agree upon procedures before the end of fifteen (15)
Business Days
after the Buyers' receipt of the Seller Dispute Notice, either
Party may refer
the dispute to the Disputes Auditor, and the Disputes Auditor shall
render its
decision as to such dispute in accordance with the terms of this
Agreement,
including GAAP where such determination is required under this
Agreement to be
in accordance with GAAP. If the Parties are able to agree upon such
procedures
before the end of such fifteen (15) Business Day period, they
shall, as promptly
as practicable, submit to the Disputes Auditor evidence in
accordance with the
procedures agreed upon, and the Disputes Auditor shall decide the
dispute in
accordance therewith as promptly as practicable. The fees and
expenses of the
Disputes Auditor for, and relating to, the making of any such
decision shall be
borne by the Parties equally.
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<PAGE>
(d)
Final
Closing Statement. The Preliminary Closing Statement shall
become final and binding on both Parties upon the earliest of (i)
if no Seller
Dispute Notice has been given, the expiration of the period within
which the
Sellers may notify the Buyers of any objections to the Preliminary
Closing
Statement pursuant to Section 2.8(b), (ii) if the Seller Dispute
Notice has been
given, upon the agreement by the Sellers and the Buyers that such
Preliminary
Closing Statement, together with any modifications thereto agreed
to in writing
by the Sellers and the Buyers is final and binding, and (iii) if
the Seller
Dispute Notice has been given but there is no such agreement, the
date on which
the Disputes Auditor shall issue its decision with respect to any
dispute
relating to such Preliminary Closing Statement referred to the
Disputes Auditor
pursuant to Section 2.8(c), giving effect to any items reflected in
the Seller
Dispute Notice as to which the Buyers and the Sellers were able to
reach
agreement prior to such referral. The Preliminary Closing
Statement, as
adjusted, if applicable, pursuant to any agreement between the
Parties or
pursuant to the decision of the Disputes Auditor, when final and
binding on both
Parties, is herein referred to as the "Final Closing
Statement."
(e)
Calculation of Adjusted Net Purchase Price; Payment. The Net
Purchase Price shall be increased or decreased by the difference,
if any, by
which the Estimated Adjustment for Collection differs from the
Adjustment for
Collection shown on the Final Closing Statement (the Net Purchase
Price, as so
increased or decreased after taking into account the net effect of
the foregoing
shall hereinafter be referred to as the "Adjusted Net Purchase
Price"). If the
Closing Payment is more than the Adjusted Net Purchase Price, the
Sellers shall
pay such difference within five (5) Business Days to the Buyers by
wire transfer
in immediately available funds to a bank account designed in
writing by the
Buyers. If the Adjusted Net Purchase Price is more than the Closing
Payment, the
Buyers shall pay such difference within five (5) Business Days to
the Sellers by
wire transfer in immediately available funds to a bank account
designed in
writing by the Sellers.
(f)
Purchase
Price Adjustment for Tax Purposes. Any payment made
pursuant to Section 2.8(e) shall be treated for tax purposes as an
adjustment to
the Purchase Price except to the extent otherwise required by any
applicable
Legal Requirement.
3.
REPRESENTATIONS AND WARRANTIES OF THE SELLER. EACH SELLER
REPRESENTS AND
WARRANTS JOINTLY AND SEVERALLY TO THE BUYERS that the statements
set forth in
this Section 3 are true, correct and complete as of the date of
this Agreement
or such other date as may be referred to in any particular
representation and
warranty, except as set forth in the disclosure letter dated as of
the date
hereof and provided to the Buyers by the Sellers in connection with
the signing
of this agreement (the "Disclosure Letter"). The Disclosure Letter
has been
arranged in sections and paragraphs corresponding to the sections
and paragraphs
contained in this Section 3.
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<PAGE>
3.1.
Organization and
Qualification of the Sellers.
(a)
Each of
the DE Sub and GA Sub (i) is duly organized, validly
existing and in good standing under the laws of its jurisdiction
of
organization, (ii) is duly qualified to do business and in good
standing in each
jurisdiction in which the nature of its business makes such
qualification or
licensing necessary, other than in such jurisdictions where the
failure to be so
qualified or licensed would not have a Material Adverse Effect and
(iii) has all
power and authority and all material governmental licenses,
authorizations,
permits, consents and approvals to enter into and perform this
Agreement.
(b)
The Parent (i) is duly organized,
validly existing and in good
standing under the laws of its jurisdiction of organization, (ii)
is duly
qualified to do business and in good standing in each jurisdiction
in which its
operation of the Business makes such qualification or licensing
necessary, other
than in such jurisdictions where the failure to be so qualified or
licensed
would not have a Material Adverse Effect and (iii) has all power
and authority
and all material governmental licenses, authorizations, permits,
consents and
approvals to enter into and perform this Agreement.
3.2.
Authorization of
Transaction. The execution, delivery and
performance by each Seller of this Agreement and each Closing
Document to which
it is (or will be) a party and the consummation of the Contemplated
Transactions
have been duly and validly authorized by all necessary corporate
action, and no
other corporate proceedings on the part of such Seller are
necessary to
authorize this Agreement or any Closing Document to which it is a
party or to
consummate the Contemplated Transactions. This Agreement and each
Closing
Document to which each Seller is or will be a party has been (or,
in the case of
Closing Documents to be entered into at or prior to the Closing,
will be) duly
executed and delivered by such Seller and, assuming the due
authorization,
execution and delivery by the other Parties, is (or, in the case of
Closing
Documents to be entered into at or prior to the Closing, will be)
the legal
valid and binding obligation of such Seller, enforceable against
such Seller in
accordance with its terms, except as such enforceability may be
limited by
bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights
generally and general principles of equity (whether considered in a
proceeding
at law or in equity). The Contemplated Transactions do not require
the approval
of the stockholders of the Parent.
3.3.
Governmental
Authorization. The execution, delivery and performance
by the Sellers of the Transaction Documents and the consummation of
the
Contemplated Transactions by the Sellers requires no action
(including any
authorization, registration, qualification, consent or approval) by
or in
respect of, or filing with, any Governmental Authority by the
Sellers, except
for such filings required by the HSR Act.
3.4.
Noncontravention. Except as set forth in Schedule 3.4, the
execution, delivery and performance by each Seller of the
Transaction Documents
and the consummation of the Contemplated Transactions by such
Seller do not and
will not (i) violate, conflict with or result in a default under
the
Organizational Documents of such Seller, (ii) violate any
applicable Legal
Requirement related to the Business, (iii) conflict with, violate,
constitute a
default (with or without notice or lapse of time, or both) or
result in any
breach under or give rise to any right of termination, amendment,
cancellation
or acceleration of any right or obligation or to a loss of any
benefit relating
to the Business or to any Acquired Asset t
