Back to top

EXECUTION COPY ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

EXECUTION COPY ASSET PURCHASE AGREEMENT | Document Parties: INFOSPACE, INC | Motricity, Inc You are currently viewing:
This Asset Purchase Agreement involves

INFOSPACE, INC | Motricity, Inc

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: EXECUTION COPY ASSET PURCHASE AGREEMENT
Governing Law: Delaware     Date: 10/18/2007
Industry: Computer Services     Law Firm: Wilson Sonsini;Boult Cummings;Kirkland Ellis     Sector: Technology

EXECUTION COPY ASSET PURCHASE AGREEMENT, Parties: infospace  inc , motricity  inc
50 of the Top 250 law firms use our Products every day

EXHIBIT 2.1

EXECUTION COPY

ASSET PURCHASE AGREEMENT

between

INFOSPACE, INC.

and

MOTRICITY, INC.

Dated as of October 15, 2007

 


TABLE OF CONTENTS

 

     Page

ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION

   1
   1.1     

Definitions

   1
   1.2     

Rules of Construction

   1

ARTICLE II SALE OF ASSETS AND ASSUMPTION OF LIABILITIES

   2
   2.1     

Asset Purchase

   2
   2.2     

Assumption by Purchaser of Certain Liabilities; Retention by Seller of Remaining Liabilities

   2
   2.3     

Transfer of Purchased Assets, Transferred Business Intellectual Property Rights and Assumed Liabilities

   5
   2.4     

Approvals and Consents; Novation

   6
   2.5     

Novation and Assignment

   8
   2.6     

Consents for Real Property Assignments and Subleases

   9

ARTICLE III PURCHASE PRICE AND ADJUSTMENTS

   10
   3.1     

Purchase Price

   10
   3.2     

Payment of Purchase Price

   10
   3.3     

Working Capital Amount; Reimbursement

   10
   3.4     

Allocation of Purchase Price

   12

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER

   13
   4.1     

Corporate Existence

   13
   4.2     

Corporate Authority

   13
   4.3     

Governmental Approvals and Consents

   14
   4.4     

Properties and Assets

   15
   4.5     

Contracts

   16
   4.6     

Litigation

   18
   4.7     

Intellectual Property Rights

   18
   4.8     

Finders; Brokers

   20
   4.9     

Tax Matters

   20
   4.10   

Employment and Benefits

   21
   4.11   

Compliance with Laws

   22
   4.12   

Environmental Matters

   22
   4.13   

Financial Information

   22
   4.14   

Netherlands Subsidiary Shares

   23
   4.15   

Customers

   23
   4.16   

Suppliers

   24
   4.17   

Absence of Changes

   24
   4.18   

Restrictions on Business Activities

   25
   4.19   

Sufficiency of Assets

   25
   4.20   

Condition of Purchased Assets

   26

 

-i-

 


TABLE OF CONTENTS

(Continued)

 

     Page
   4.21   

Accounts Receivable

   26
   4.22   

Labor and Employment Matters

   26
   4.23   

Insurance

   26
   4.24   

Absence of Sensitive Payments; Suitability

   27
   4.25   

Affiliated Transactions

   27
   4.26   

No Other Representations or Warranties

   27

ARTICLE V REPRESENTATIONS OF PURCHASER

   28
   5.1     

Corporate Existence

   28
   5.2     

Corporate Authority

   28
   5.3     

Governmental Approvals and Consents

   29
   5.4     

Financial Capacity

   29
   5.5     

Finders; Brokers

   30
   5.6     

Purchase for Investment

   30
   5.7     

No Other Representations or Warranties

   31

ARTICLE VI AGREEMENTS OF PURCHASER AND SELLER

   31
   6.1     

Operation of the Business

   31
   6.2     

Investigation of Business; Confidentiality

   34
   6.3     

Reasonable Best Efforts; No Inconsistent Action

   35
   6.4     

Public Disclosures

   37
   6.5     

Access to Records and Personnel

   37
   6.6     

Employee Relations and Benefits

   38
   6.7     

Non-U.S. Employees

   40
   6.8     

Post-Closing Arrangements

   42
   6.9     

Non-Solicitation

   43
   6.10   

Intellectual Property License Agreement

   44
   6.11   

Insurance Matters

   44
   6.12   

Tax Matters

   44
   6.13   

Notice of Breaches

   47
   6.14   

Mail Handling

   47
   6.15   

Interim Financial Statements

   48
   6.16   

Business Financial Statements

   48
   6.17   

Netherlands Subsidiary Directorships

   49
   6.18   

Purchase Funds Escrow Agreements

   50
   6.19   

Closing of Series I Preferred Stock Financing

   50
   6.20   

Additional Transactions

   50

ARTICLE VII CONDITIONS TO CLOSING

   51
   7.1     

Conditions Precedent to Obligations of Purchaser and Seller

   51
   7.2     

Conditions Precedent to Obligation of Seller

   51

 

-ii-

 


TABLE OF CONTENTS

(Continued)

 

               Page
   7.3     

Conditions Precedent to Obligation of Purchaser

   52

ARTICLE VIII CLOSING

   54
   8.1     

Closing Date

   54
   8.2     

Purchaser Obligations

   54
   8.3     

Seller Obligations

   54

ARTICLE IX INDEMNIFICATION

   55
   9.1     

Indemnification

   55
   9.2     

Certain Limitations and Term; Indemnification Buyout

   56
   9.3     

Procedures for Third-Party Claims and Excluded Liabilities

   58
   9.4     

Certain Procedures

   61
   9.5     

Remedies Exclusive

   62
   9.6     

Mitigation and Insurance

   62

ARTICLE X TERMINATION

   63
   10.1     

Termination Events

   63
   10.2     

Effect of Termination

   63

ARTICLE XI MISCELLANEOUS AGREEMENTS OF THE PARTIES

   64
   11.1     

Dispute Resolution

   64
   11.2     

Notices

   65
   11.3     

Bulk Transfers

   66
   11.4     

Severability

   66
   11.5     

Further Assurances; Further Cooperation

   66
   11.6     

Counterparts

   66
   11.7     

Expenses

   66
   11.8     

Non-Assignability

   67
   11.9     

Amendment; Waiver

   67
   11.10   

Specific Performance

   67
   11.11   

Third Parties

   67
   11.12   

Governing Law

   67
   11.13   

Consent to Jurisdiction; Waiver of Jury Trial

   68
   11.14   

Entire Agreement

   68
   11.15   

Responsibility for Subsidiary Breach

   68
   11.16   

Section Headings; Table of Contents

   69

 

-iii-

 


LIST OF EXHIBITS

 

Exhibit A    Bill of Sale
Exhibit B    Assignment and Assumption Agreement
Exhibit C    Transferred Business Intellectual Property Rights Assignment
Exhibit D    Transition Services Agreement
Exhibit E-1    Lease Assignments
Exhibit E-2    Real Property Sublease
Exhibit F    Hosting and Co-Location Services Agreement
Exhibit G    Intellectual Property License Agreement
Exhibit H    Assumed Contracts
Exhibit I    Excluded Assets
Exhibit I-1    Other Excluded Assets
Exhibit J    Purchased Assets
Exhibit J-1    Other Purchased Assets
Exhibit K    Post-Execution Contracts
Annex 1    Investor Escrow Agreements
Annex 2    Koala Escrow Agreement
Annex 3    Purchaser Escrow Agreement

 

-iv-

 


ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement is dated as of October 15, 2007 (the “ Agreement ”), between InfoSpace, Inc., a Delaware corporation (“ Seller ”), and Motricity, Inc., a Delaware corporation (“ Purchaser ”).

W I T N E S S E T H:

WHEREAS , Seller and certain Subsidiaries of Seller are engaged in, among other things, the Business; and

WHEREAS , Purchaser, through itself and one or more of its Subsidiaries, desires to purchase and assume, and Seller, through itself and one or more of its Subsidiaries, desires to sell, transfer and assign certain of the assets and liabilities related to the operation of Seller’s mobile data infrastructure business, as it is currently conducted, which includes the delivery of (i) mobile private-label software products, consulting and management services to mobile operator customers for the provisioning of portal, storefront, search and messaging solutions for mobile devices, and (ii) mobile media content products, including ringtones, news and information, graphics and games, to mobile devices used by subscribers of mobile operator customers and certain other specified customers (collectively, the “ Business ”), to Purchaser, on the terms and subject to the conditions specified in this Agreement.

NOW, THEREFORE , for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

1.1 Definitions .

Unless otherwise provided herein, capitalized terms used in this Agreement have the meanings ascribed to them by definition in this Agreement or in Annex A .

1.2 Rules of Construction .

(a) This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted.

(b) Whenever the words “include”, “including”, or “includes” appear in this Agreement, they shall be read to be followed by the words “without limitation” or words having similar import.

 

-1-

 


(c) When a reference is made in this Agreement to an Article, Section, Annex, Exhibit, Schedule, clause or subclause, such reference shall be to an Article, Section, Annex, Exhibit, Schedule, clause or subclause of this Agreement.

(d) The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement.

(e) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice versa.

(f) Any reference herein to “dollars” or “$” shall mean United States dollars.

ARTICLE II

SALE OF ASSETS AND ASSUMPTION OF LIABILITIES

2.1 Asset Purchase .

(a) On the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall, and shall cause each of the Other Sellers, as appropriate, to, sell, assign, transfer, convey and deliver to Purchaser and/or its Designees, and Purchaser shall or shall cause one or more of its Designees to purchase, acquire and accept from Seller and the Other Sellers, as appropriate, all of Seller’s and the Other Sellers’ respective right, title and interest in and to the Purchased Assets, free and clear of all Liens (other than Permitted Liens).

(b) On the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall, and shall cause each of the Other Sellers, as appropriate, to, sell, assign, transfer, convey and deliver to Purchaser and/or its Designees, and Purchaser shall, or shall cause one or more of its Designees to, purchase, acquire and accept from Seller and the Other Sellers, as appropriate, the Transferred Business Intellectual Property Rights, including the right to pursue past damages based on third-party infringement of the Transferred Business Intellectual Property Rights, subject to the terms of any preexisting non-exclusive licenses granted to third parties in the ordinary course of business concerning such Transferred Business Intellectual Property Rights.

2.2 Assumption by Purchaser of Certain Liabilities; Retention by Seller of Remaining Liabilities .

(a) On the terms and subject to the conditions set forth in this Agreement, at the Closing, Purchaser or one of its Designees shall assume and agree to pay, perform and discharge

 

-2-

 


when due the following liabilities, obligations, guarantees (including lease guarantees), damages, losses, debts, claims, demands, judgments or settlements of any nature or kind, whether known or unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated, matured or unmatured, (collectively, “ Liabilities ”), of Seller and the Other Sellers (the “ Assumed Liabilities ”):

(i) all Liabilities of Seller and its Subsidiaries arising on, prior to or after the Closing Date under the Assumed Contracts, including liabilities to suppliers thereunder, but excluding any Liabilities with respect to any Proceedings arising out of such Assumed Contracts prior to the Closing Date;

(ii) any Liabilities arising on or after the Closing Date for any infringement or alleged infringement by Purchaser or any Subsidiary of Purchaser of (i) the rights of any other Person relating to Technology or Intellectual Property Rights, or (ii) any right of any other Person relating to Technology or Intellectual Property Rights pursuant to any license, sublicense or agreement;

(iii) all Liabilities of Seller and its Subsidiaries in respect of the Products to the extent that such Products were provided, developed and/or sold on or after the Closing Date, including Liabilities for refunds, adjustments, allowances, repairs, and warranty and other claims arising on or after the Closing Date;

(iv) except as expressly provided herein, all Liabilities of Seller and its Subsidiaries relating to any Transferred Employee arising out of events or occurrences on or after the Closing Date, including severance for any terminations of Transferred Employees by Purchaser or Seller on or after the Closing Date, in each case in accordance with Purchaser’s covenants in Section 6.6(a)(v);

(v) all Business Environmental Liabilities to the extent arising from facts or circumstances caused or occurring as a result of the conduct of the Business on or after the Closing Date;

(vi) except as expressly provided herein, all Liabilities in respect of Taxes to the extent based upon the operation of the Business by Purchaser on or after the Closing Date;

(vii) except as expressly provided herein, all other Liabilities arising out of or relating to or incurred in connection with the operation of the Business, on or after the Closing Date by Purchaser (including the use of any of the Business Intellectual Property Rights or Licensed Business Intellectual Property Rights by Purchaser, its Designees or permissible licensees and any condition arising on or after the Closing Date with respect to the Purchased Assets); and

(viii) all Liabilities set forth on the Final Closing Statement of Working Capital.

Notwithstanding anything to the contrary above, the Assumed Liabilities shall not include (i) any Liability of Seller or any Other Seller for Taxes (except as provided in Section 6.12(a)), (ii) any

 

-3-

 


Liability of the Netherlands Subsidiary for Taxes for any taxable period ending prior to the Closing Date and the portion of any Straddle Period ending on the Closing Date, (iii) any Liability of Seller or any Other Seller for the Taxes of any other Person as a transferee or successor, by contract, or otherwise, or (iv) any Liability of the Netherlands Subsidiary for the Taxes of any other Person as transferee or successor, by contract or otherwise, for any taxable period ending prior to the Closing Date and the portion of any Straddle Period ending on the Closing Date.

Nothing set forth in this Section 2.2(a) is intended or shall be construed to derogate any of the representations or warranties set forth in this Agreement.

(b) Neither Purchaser nor any of its Designees shall be obligated to assume, pay, perform, discharge or be responsible for any Liabilities of Seller or any Subsidiary thereof other than (i) the Assumed Liabilities and (ii) as otherwise expressly set forth herein (collectively, the “ Excluded Liabilities ”). Without limiting the generality of the foregoing, the Excluded Liabilities shall include:

(i) any Liability of Seller or any Subsidiary thereof to the extent arising out of or relating to the operation, use or operation of (x) any Retained Business or any discontinued operation of Seller or any of its Subsidiaries as of the Closing, or (y) any Excluded Asset;

(ii) except as otherwise expressly provided for herein, all Liabilities to or in respect of any employees of Seller or any Subsidiary thereof other than Transferred Employees;

(iii) any Liabilities relating to or at any time arising under or in connection with any Seller Plan, Seller International Plan, “employee benefit plan” (as defined in Section 3(3) of ERISA), or any other benefit plan, program, agreement or arrangement at any time maintained, sponsored or contributed or required to be contributed to by Seller or any of its Affiliates, or with respect to which Seller or any of its Affiliates has any Liability, and any Liabilities arising out of, relating to or incurred in connection with the employment or service by, or termination from employment or service with, Seller or any of its Affiliates of any Person (including any Transferred Employee), including any and all Liabilities pertaining to any salary or wages, vacation pay, bonuses or any other type of compensation or benefits, other than the Assumed Liabilities described in Section 2.2(a)(iv) and Section 2.2(a)(viii);

(iv) any Liability arising out of any Proceeding commenced on or prior to the Closing;

(v) notwithstanding the actual accounting treatment thereof as a reduction to accounts receivable or as a Liability, any reduction to the revenue recognized or receivables collectable after the Closing with respect to the Business that results from Purchaser having to provide a credit, offset or other similar adjustment to a customer due to a service level violation (or other like event preventing Seller or any Other Seller from providing services to a customer of the Business) occurring on or prior to the Closing;

(vi) any Liability of Seller or any Subsidiary thereof to any of its stockholders (in their capacity as stockholders);

 

-4-

 


(vii) any Liability (x) for indebtedness for borrowed money, (y) pursuant to capital leases, or (z) pursuant to a guarantee of indebtedness of any other Person for borrowed money;

(viii) all Business Environmental Liabilities to the extent arising from facts or circumstances caused or occurring as a result of the conduct of the Business prior to the Closing Date; and

(ix) all Liabilities for any legal, accounting, investment banking, brokerage or similar fees or expenses incurred by Seller or any Subsidiary thereof in connection with, resulting from or attributable to the transactions contemplated by this Agreement.

2.3 Transfer of Purchased Assets, Transferred Business Intellectual Property Rights and Assumed Liabilities .

(a) The Purchased Assets and the Transferred Business Intellectual Property Rights shall be sold, conveyed, transferred, assigned and delivered, and the Assumed Liabilities shall be assumed, pursuant to transfer and assumption agreements and such other instruments in such form as may be necessary or appropriate to effect a conveyance of the Purchased Assets and an assumption of the Assumed Liabilities in the jurisdictions in which such transfers are to be made in each case in a mutually agreeable form. Such transfer and assumption agreements and other instruments shall include a bill of sale in the form attached hereto as Exhibit A (the “ Bill of Sale ”), an assignment and assumption agreement in the form attached hereto as Exhibit B (the “ Assignment and Assumption Agreement ”), and/or assignment in the form attached hereto as Exhibit C (the “ Transferred Business Intellectual Property Rights Assignment ”), with only such deviations therefrom as are required by local Law and, where necessary, such other agreements as may be necessary or appropriate to effect the purchase and assignment of the Purchased Assets, Transferred Business Intellectual Property Rights and Assumed Liabilities (collectively, the “ Ancillary Agreements ”), and shall be executed no later than at or as of the Closing by Seller and all Other Sellers, as appropriate, and Purchaser and/or one or more of its Designees, as appropriate.

(b) Notwithstanding the foregoing and unless otherwise stated in the Transition Services Agreement, the Intellectual Property License Agreement, the Hosting and Co-Location Services Agreement or any agreements to effect the transfer of the Real Property:

(i) Purchaser and Seller will cooperate reasonably and in good faith and provide reasonable assistance to the other party to prepare the Purchased Assets for relocation and relocate the Purchased Assets from Seller’s or its Subsidiaries’ facilities at which such Purchased Assets are then located (each a “ Seller Facility ”);

(ii) Purchaser and Seller will cooperate reasonably and in good faith and provide reasonable assistance to the other party to prepare the Excluded Assets for relocation and relocate the Excluded Assets from Purchaser’s or its Subsidiaries’ facilities at which such Excluded Assets are then located (each a “ Purchaser Facility ”);

 

-5-

 


(iii) Purchaser and Seller will cooperate reasonably and in good faith and provide reasonable assistance to the other party (A) in connection with the planning and implementation of the transfer of the Purchased Assets and Excluded Assets, as appropriate, and (B) on all data transfer, delivery, transmission and reformatting activities reasonably necessary to convey the Purchased Assets and the Transferred Business Intellectual Property Rights;

(iv) With respect to costs incurred in connection with third parties, Seller will be responsible for performing and bearing the cost of separating shared applications and data related to the Business and its and its Subsidiaries other business, including obtaining and paying for required “base” hardware and licenses associated with such separation (but not any per-user, per-seat, periodic recurring or similar fees), provided that any such costs paid by Seller shall be deemed to be Consent Payment Amounts;

(v) Each party hereto will reimburse the other party for all damages to the such other party’s facility caused by the party hereto’s removal, detachment, disconnection or transportation of the Purchased Assets or Excluded Assets, as appropriate;

(vi) Until all of the Purchased Assets are removed from a Seller Facility and all of the Excluded Assets are removed from a Purchaser Facility, Purchaser and Seller will cooperate reasonably and in good faith and provide reasonable assistance to the other party so that Purchaser and its authorized agents or representatives or Seller and its authorized agents or representatives, respectively, upon prior notice, will have reasonable access to the Seller Facility or the Purchaser Facility, as appropriate, to the extent necessary to disconnect, detach, remove, package and crate the Purchased Assets or Excluded Assets, respectively, for transport; and

(vii) except as otherwise set forth in this Section 2.3(b), each party will bear its own costs and expenses in cooperating and providing assistance, or taking such other actions as are necessary, contemplated by this Section 2.3(b).

2.4 Approvals and Consents; Novation .

(a) Notwithstanding anything to the contrary contained in this Agreement and subject to the last proviso of this sentence and the provisions of Sections 2.5 and 2.6, to the extent that the sale, conveyance, transfer, assignment or delivery or attempted sale, conveyance, transfer, assignment or delivery to Purchaser or any of its Designees of any Purchased Asset (or any asset that would otherwise be a Purchased Asset hereunder) (i) would result in a violation of any applicable Law, (ii) would require any licenses, certificates, permits, approvals, clearances, expirations or terminations of applicable waiting periods, authorizations, qualifications or orders of any Governmental Authority (each a “ Governmental Consent ”), (iii) would require any approvals, waivers, licenses or consents of any third party (each a “ Third Party Consent ,” and, together with Governmental Consents, “ Consents ”), or (iv) would require any notices to any Governmental Authority or any third party, and such Consents shall not have been obtained or notices given prior to the Closing, this Agreement shall not constitute a sale, conveyance, transfer, assignment or delivery, or an attempted sale, conveyance, transfer, assignment or delivery thereof if any of the foregoing would constitute a

 

-6-

 


breach of applicable Law or the rights of any such Governmental Authority or third party; provided , however , that the Closing shall occur notwithstanding the foregoing without any adjustment to the Purchase Price on account of such required authorization; provided , further , however , that this Section 2.4 (other than the immediately following sentences, to which the Required Consents shall apply) shall not (x) be applicable to any Required Consents, other than with respect to any Required Consent which is waived as a condition to Closing or (y) be construed to derogate any of the representations or warranties set forth in Section 4.2(b) or Section 4.5(b). Prior to the Closing, and, as necessary, following the Closing, the parties shall use commercially reasonable efforts, and shall cooperate with each other, to obtain promptly (A) such Consents and deliver such notices (including identifying such Consents or notices and consulting with each other regarding such Consents or notices) and (B) the enterprise software license agreement with Microsoft Corporation referred to in the definition of Consent Payment Amount; provided , however , that Seller shall be responsible for, and shall control any negotiations with third parties regarding any such Consents; provided , further , however , that (I) neither party shall agree to the payment of any Consent Payment Amounts without the consent of the other party, such consent not to be unreasonably withheld, delayed or conditioned, and (II) Seller shall not agree to any modification to the terms of any Contract for purposes of obtaining a Consent or agree to any material term in such enterprise software license agreement in any such case without the prior consent to Purchaser, such consent not to be unreasonably withheld, delayed or conditioned. Pending or in the absence of such Consents or notices, Seller shall, and shall cause any Other Seller to, hold such Purchased Assets for the use and benefit, insofar as reasonably possible, of Purchaser or any of its Designees. The parties shall cooperate with each other to enter into mutually agreeable and lawful arrangements designed to provide to Purchaser or its Designee with the costs and benefits of the use of such Purchased Asset and to Seller or any Other Seller the benefits, including any indemnities, that they would have obtained had the Purchased Asset been conveyed to Purchaser or its Designee at the Closing. Once such Consent is obtained or notice is delivered, Seller shall or shall cause the Other Sellers to sell, assign, transfer, convey and license such Purchased Asset to Purchaser or its Designee for no additional consideration. Purchaser and Seller shall equally share any applicable Transfer Taxes in connection with such sale, assignment, transfer, conveyance or license in accordance with Section 6.12(a)(i). To the extent that any Purchased Asset cannot be provided to Purchaser or its Designee following the Closing pursuant to this Section 2.4, Purchaser and Seller shall use commercially reasonable efforts to enter into such arrangements (including subleasing, sublicensing or subcontracting) to provide to the parties the economic (taking into account Tax costs and benefits) and, to the extent permitted under applicable Law, operational equivalent of obtaining such Consent or delivering such notice and the performance by Purchaser or its Designee of its obligations thereunder. Subject to the terms above, to the extent permitted under applicable Law, Seller and the Other Sellers shall hold in trust for and pay to Purchaser or its Designee promptly upon receipt thereof, such Purchased Assets and all income, proceeds and other monies (net of all reasonable incremental costs associated with the retention and maintenance of the Purchased Assets (“ Maintenance Costs ”)) received by Seller or any Other Seller to the extent related to its use of any such Purchased Asset in connection with the arrangements under this Section 2.4. Notwithstanding the foregoing, Seller shall have no obligation whatsoever to retain any portion of the Business, other than any individual asset or Contract (but only until such time as the transfer thereof may be effected in accordance with this Agreement), in

 

-7-

 


order to obtain any such Consents or waivers referred to in this Section 2.4 or elsewhere in this Agreement. Nothing in this Section 2.4 shall require any waiver of any conditions to the conditions to the consummation of the transactions contemplated hereby set forth in Article VII.

(b) Seller and Purchaser shall equally share the cost of all Consent Payment Amounts for all amounts up to and not in excess of the Consent Payment Threshold Amount, and Seller shall be responsible for, and shall reimburse Purchaser for all Consent Payment Amounts incurred or paid by Purchaser in excess of the Pro Rata Threshold Amount. Without derogating the intent of the foregoing sentence, until the forty-fifth (45th) calendar day following the Closing Date, Seller shall make any payments that are Consent Payment Amounts and be reimbursed by Purchaser following such forty-fifth (45 th ) calendar day as set forth in this Section 2.4(b). On the forty-fifth (45th) calendar day following the Closing Date, and at such additional dates thereafter as reasonably requested by a party, Seller and Purchaser shall: (i) prepare and deliver to the other party a statement showing the total Consent Payment Amounts paid or incurred by such party as of the date thereof (each a “ Consent Payment Statement ”); and (ii) make available to the other party and its representatives all relevant receipts and records relating to such Consent Payment Statement. The parties shall then add the amounts set forth on the Consent Payment Statement prepared by Seller and the Consent Payment Statement prepared by Purchaser (the “ Aggregate Consent Payment Amount ”). To the extent that the Aggregate Consent Payment Amount is less than or equal to the Consent Payment Threshold Amount, the parties shall divide (x) the Aggregate Consent Payment Amount by (y) two (the “ Pro Rata Consent Payment Amount ”), and the party that has shown a lower Consent Payment Amount on its Consent Payment Statement shall promptly pay to the other party the difference between (1) the Pro Rata Consent Payment Amount and (2) the Consent Payment Amount set forth on such party’s Consent Payment Statement (to the extent such amounts have not been previously paid or reimbursed). To the extent that the Aggregate Consent Payment Amount is in excess of the Consent Payment Threshold Amount, then Seller shall reimburse to Purchaser all Consent Payment Amounts incurred or paid by Purchaser in excess of the Pro Rata Threshold Amount.

2.5 Novation and Assignment .

Without limiting the generality of Section 2.4 or any other provision hereof, each party hereto, at the request of the other party, shall, and shall cause any Subsidiary thereof to, use commercially reasonable efforts to obtain, or to cause to be obtained, any Consent, substitution, or amendment required to novate any Contract requiring a novation pursuant to such Contract or local Law that constitutes part of the Purchased Assets or the Assumed Liabilities or to obtain in writing the unconditional release of such third party to such arrangements, so that, Purchaser and/or its Designees will be solely responsible for performance of Assumed Liabilities under such Contracts. If and when any such Consent or waiver shall be obtained or such agreement, lease, license or other rights or obligations shall otherwise become assignable or able to be novated, Seller or such Subsidiary shall thereafter assign, or cause to be assigned, all its rights, obligations and other liabilities thereunder to Purchaser or its Designee without receipt of further consideration (other than Maintenance Costs), and Purchaser or its Designee shall, without the payment of any further consideration (other than Maintenance Costs), assume such rights and obligations.

 

-8-

 


2.6 Consents for Real Property Assignments and Subleases . Without limiting the generality of Section 2.4 or any other provision hereof:

(a) Promptly following execution of this Agreement, Seller or such Other Seller, as applicable, shall contact the Landlords of the Assigned Real Property and the Subleased Real Property and seek each Landlord’s Consent (which, for purposes of this Section 2.6, shall be deemed to include providing a substitute for that certain underlease between Aleri Limited and InfoSpace Investments Ltd., dated February 17, 2006, with the Landlord thereunder) to the applicable Lease assignments or subleases. Seller or such Other Seller, as applicable, shall use commercially reasonable efforts to obtain such Consents, but shall not be required to commence judicial proceedings for a declaration that a required Landlord Consent has been unreasonably withheld or delayed. In connection with the foregoing, Seller or such Other Seller, as applicable, shall have the right to pay any additional consideration payable prior to the Closing or provide any additional security or guarantees to the Landlords at its sole cost and expense and at Seller’s or Other Seller’s sole option; provided , however , that neither Seller nor such Other Seller shall agree to any amendment or modification to the terms of the Lease with respect to the Assigned Real Property and the Subleased Real Property that will have a material and adverse effect on the terms of such Lease on or after the Closing without Purchaser’s prior written consent.

(b) Purchaser and its Designees shall use commercially reasonable efforts to cooperate with Seller or such Other Seller, as applicable, in attempting to obtain the Consents contemplated by Section 2.6(a), including (i) providing financial statements, references and substitute security and/or guarantees as may be reasonably requested by the relevant Landlords, (ii) entering into any amendments to the Leases of the Assigned Real Property as may be reasonably requested by the relevant Landlords or (iii) entering into direct Leases of the Assigned Real Property and, if possible, the property that is the subject of the Real Property Subleases with the relevant Landlords, if requested by such Landlords. Any additional consideration paid by Seller in order to obtain a Consent from any such Landlord shall be deemed to be a Consent Payment Amount. Neither Purchaser nor any of its Designees shall communicate directly with any of Seller’s or any Other Seller’s Landlords without the prior consent of Seller or such Other Seller, as applicable.

(c) If, despite the efforts of the parties as set forth above, a Landlord of an Assigned Real Property or Subleased Real Property fails to consent to the applicable Lease assignment or sublease prior to the Closing Date, Purchaser or one of its Designees shall be entitled to occupy the relevant Assigned Real Property or Subleased Real Property as a licensee upon the terms and conditions contained in the Seller’s, or Other Seller’s, Lease of such Assigned Real Property or the terms of the relevant sublease, as applicable. Such license shall not be revocable due to the relevant Landlord’s failure to consent, unless (A) the relevant Landlord formally, unconditionally refuses to consent or (B) an enforcement action or forfeiture by the relevant Landlord due to Purchaser’s or one of its Designee’s occupation of such Real Property cannot, in the reasonable opinion of Seller, be avoided other than by requiring Purchaser or one of its Designees to immediately vacate the relevant Real Property. In either such event, Seller or such Other Seller, as applicable, may terminate the license by delivering written notice to Purchaser, and Purchaser or its Designee shall vacate the relevant Real Property as promptly as commercially practicable after a

 

-9-

 


notice served by Seller. Neither Purchaser nor any of its Designees shall be entitled to make any claim or demand against, or obtain reimbursement from, Seller or any Other Seller with respect to any costs, losses, claims, liabilities or damages incurred by Purchaser or any of its Designees as a consequence of being obliged to vacate a Real Property or in obtaining alternative premises, including, without limitation, any enforcement action which a Landlord may take against Purchaser or any of its Designees.

ARTICLE III

PURCHASE PRICE AND ADJUSTMENTS

3.1 Purchase Price .

The purchase price in respect of the transactions contemplated hereby shall be an amount in cash equal to One Hundred and Thirty-Five Million dollars and no cents ($135,000,000)(the “ Purchase Price ”), which comprises the total purchase price to be paid for the Purchased Assets, Transferred Business Intellectual Property Rights and Assumed Liabilities in each respective jurisdiction as provided in the Allocation Schedule. The amounts payable in respect of transactions contemplated hereby shall be further adjusted as contemplated by Section 3.3.

3.2 Payment of Purchase Price .

On the Closing Date, Purchaser shall pay for itself (where it is acting as Purchaser) and on behalf of its Designees to Seller for its own account and otherwise as agent for each of the relevant Other Sellers the Purchase Price. Without modifying Section 9.2(i), such amount shall be payable in United States dollars in immediately available federal funds to such bank account or accounts as shall be designated in writing by Seller no later than the second Business Day prior to the Closing.

3.3 Working Capital Amount; Reimbursement .

(a) At least five (5) Business Days prior to the Closing Date, Seller shall prepare and deliver to Purchaser a statement (the “ Estimate Statement ”) setting forth the Estimated Working Capital Amount. The Estimate Statement shall contain a level of detail sufficient to identify the components used to calculate the Estimated Working Capital Amount and shall be prepared in good faith by Seller in accordance with the accounting principles, procedures and assumptions set forth in Section 4.13 of the Disclosure Letter. To the extent that the Estimated Working Capital Amount is less than zero, Seller shall pay to Purchaser at Closing the amount by which the Estimated Working Capital Amount is less than zero (the “ Working Capital Deficiency Adjustment ”).

(b) As promptly as practicable following the Closing, but in no event later than ninety (90) calendar days following the Closing Date, Seller shall: (i) prepare and deliver to Purchaser a statement (x) showing the Working Capital Amount as calculated by Seller and (y) the total Consent Payment Amounts incurred by any party as of the date thereof (the “ Closing Statement of Working Capital ”); and (ii) make available to Purchaser and its representatives all relevant books and records relating to the Closing Statement of Working Capital. Purchaser shall provide Seller and its

 

-10-

 


representatives with reasonable access, during normal business hours, to the facilities, personnel and accounting records of the Business acquired by Purchaser or its Designee, to the extent reasonably necessary to permit Seller to prepare the Closing Statement of Working Capital.

(c) During the 45-day period following Purchaser’s receipt of the Closing Statement of Working Capital (the “ Review Period ”), Purchaser and its representatives, including its independent auditors, shall be afforded the opportunity to review the Closing Statement of Working Capital and the calculations related thereto. Seller or any Subsidiary thereof shall provide reasonable assistance, including reasonable access to information concerning the Business that is retained by Seller and its Subsidiaries following the Closing, to Purchaser its Designees or any representatives, including its independent auditors, in connection with such review.

(d) If Purchaser disputes the Closing Statement of Working Capital or any calculation related thereto (other than the accounting principles, procedures, assumptions and estimates set forth in Section 4.13 of the Disclosure Letter, which Purchaser shall not be permitted to dispute), Purchaser shall deliver to Seller, prior to the expiration of the Review Period, a proposed adjustment notice (“ Proposed Adjustment Notice ”), which shall contain, in reasonable detail, the items of dispute and the adjustment it recommends making to the Closing Statement of Working Capital to address such disputes, to the extent reasonably available. If the Proposed Adjustment Notice is not delivered to Seller prior to the expiration of the Review Period, the Closing Statement of Working Capital shall become final, binding and conclusive on all parties.

(e) If a Proposed Adjustment Notice is delivered within the Review Period, Purchaser and Seller shall negotiate in good faith to resolve such dispute for a 30-day period commencing on the date such notice is received by Seller. If Purchaser and Seller subsequently resolve such dispute during such 30-day period, Purchaser and Seller shall document such resolution in writing and the Closing Statement of Working Capital, as modified, if applicable, by such writing, shall be final, binding and conclusive on all parties. If Purchaser and Seller cannot resolve such dispute within such 30 day period, Purchaser and Seller shall retain Ernst & Young LLP to act as the arbitrator (the “ Arbitrator ”) of such dispute; provided , however , that if either party shall reasonably discover a conflict of interest associated with the Arbitrator, the parties shall retain a mutually agreeable alternative nationally-recognized accounting firm without such a conflict of interest to act as the Arbitrator. Any arbitration shall be conducted in New Castle County, Delaware, and such proceedings shall be in English. The parties hereto shall instruct the Arbitrator to act promptly to resolve any dispute in accordance with the terms of this Agreement. In resolving any disputed items, the Arbitrator may not assign a value to any disputed item greater than the greatest value for such disputed item claimed by any party or less than the lowest value for such disputed item claimed by any party. The parties shall use reasonable best efforts to have the Arbitrator issue its written decision within 30 days after the appointment of such Arbitrator, which decision shall be final, binding and conclusive on both Purchaser and Seller. The resolution of the Arbitrator with respect to any such dispute shall be final, binding and conclusive on all parties. The final, binding and conclusive Closing Statement of Working Capital (x) as deemed accepted by Purchaser, (y) as modified by any writing among Purchaser and Seller, if applicable, and/or (z) as modified, if applicable, by the written decision of the Arbitrator shall be the “ Final Closing Statement of Working Capital ”. Purchaser and

 

-11-

 


Seller shall cooperate with the Arbitrator in connection with this Section 3.3(e). Without limiting the generality of the foregoing, Purchaser and Seller shall each provide promptly, or cause to be provided promptly, to the Arbitrator all information, and to make available at the arbitration proceeding all personnel, as are reasonably necessary to permit the Arbitrator to resolve any disputes pursuant to this Section 3.3(e). The expenses of the Arbitrator in resolving any disputes under this Section 3.3(e) shall be borne equally by Purchaser and Seller.

(f) Within five (5) Business Days of the determination of the Final Closing Statement of Working Capital:

(i) if the Working Capital Amount specified in the Final Closing Statement of Working Capital is less than zero, Seller shall pay to Purchaser the amount to which the Working Capital Amount specified in the Final Closing Statement of Working Capital is less than zero; and

(ii) if (A) there has been a Working Capital Deficiency Adjustment; and (B) the Working Capital Amount set forth on the Final Closing Statement of Working Capital is greater than the Estimated Working Capital Amount, then the amount of the Working Capital Deficiency Adjustment shall be added to the Working Capital Amount specified in the Final Closing Statement of Working Capital, and, if the sum of (x) the Working Capital Deficiency Adjustment amount plus (y) the Working Capital Amount specified in the Final Closing Statement of Working Capital, is greater than zero (such amount in excess of zero the “ Deficiency Reimbursement Amount ”), Purchaser shall pay to Seller the Deficiency Reimbursement Amount; provided , however , that in no event shall the Deficiency Reimbursement Amount exceed the lesser of (1) the amount by which the Working Capital Amount specified in the Final Closing Statement of Working Capital is greater than zero, and (2) amount of the Working Capital Deficiency Adjustment.

3.4 Allocation of Purchase Price .

Purchaser and Seller shall agree on an allocation of the Purchase Price (and all other capitalized costs) among the Purchased Assets and the Transferred Business Intellectual Property Rights in accordance with (i) the pro forma allocation schedule attached hereto as Schedule 3.4 and (ii) Code Section 1060 and the U.S. Treasury Income Tax Regulations promulgated thereunder (and any similar provision of state, local or foreign law, as appropriate) (the “ Allocation Schedule ”) within ninety (90) days of the Closing Date. If Purchaser and Seller are unable to agree on the final Allocation Schedule within ninety (90) days after the Closing Date, the parties shall submit such dispute to the Arbitrator, following the administrative procedures set forth Section 3.3(d), and the Arbitrator shall resolve the allocation of the consideration to any items with respect to which there is a dispute between the parties. In the absence of manifest error, the determination of the Allocation Schedule by the Arbitrator shall be final and binding on all parties and shall not be subject to contest. Seller and Purchaser and their Affiliates shall report, act and file Tax Returns (including, but not limited to, IRS Form 8594) in all respects and for all purposes consistent with the Allocation Schedule. Neither Seller nor Purchaser shall take any position (whether in audits, Tax Returns or otherwise) that is inconsistent with the Allocation Schedule unless required to do so by applicable

 

-12-

 


Law. Each of the parties agrees that they shall promptly advise each other regarding the existence of any Tax audit, controversy or litigation related to the Allocation Schedule. Notwithstanding the foregoing, nothing contained herein shall prevent Purchaser or Seller from settling any proposed deficiency or adjustment assessed against it by any Governmental Authority based upon or arising out of the Allocation Schedule, and neither Purchaser nor Seller shall be required to litigate before any court any such proposed deficiency or adjustment by any Governmental Authority challenging the Allocation Schedule.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Purchaser, subject to the disclosures and exceptions set forth in the disclosure letter delivered by Seller to Purchaser on the date hereof and attached hereto (the “ Disclosure Letter ”), as follows:

4.1 Corporate Existence .

(a) Seller is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization. Seller is duly qualified to conduct business and is in good standing under the Laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification, except for those jurisdictions in which the failure to be so qualified or in good standing has not had and would not reasonably be expected, individually or in the aggregate, to have a Seller Material Adverse Effect. Seller has the requisite corporate, partnership or similar power and authority to carry on the Business as the same is now being conducted. Seller is not in default under or in violation of any provision of its corporate charter or by-laws.

(b) Each Other Seller is duly organized, validly existing and in good standing (to the extent such concept is recognized under applicable Law) under the Laws of its jurisdiction of organization. Each Other Seller is duly qualified to conduct business and, where applicable, is in good standing under the Laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification, except for those jurisdictions in which the failure to be so qualified or in good standing has not had and would not reasonably be expected, individually or in the aggregate, to have a Seller Material Adverse Effect. Each Other Seller has the requisite corporate, partnership or similar power and authority to carry on the Business as the same is now being conducted by such Other Seller. Each Other Seller is not in default under or in violation of any provision of its corporate charter or by-laws.

4.2 Corporate Authority .

(a) This Agreement and the other agreements, instruments and documents to be executed and delivered in connection herewith including the Ancillary Agreements, the Intellectual Property License Agreement, the Real Property Agreements, the Transition Services Agreement and the Hosting and Co-Location Services Agreement (collectively with this Agreement, the “ Transaction

 

-13-

 


Documents ”) to which any of Seller or Other Seller entering into the other Transaction Documents) are (or may become) a party and the consummation of the transactions contemplated hereby and thereby (i) have been duly authorized by Seller, including Seller’s Board of Directors, and no other corporate proceedings on the part of Seller and no stockholder votes are necessary to authorize this Agreement or the other Transaction Documents or to consummate the transactions contemplated hereby or thereby, and (ii) will be duly authorized by each applicable Other Seller by all requisite corporate, partnership or other action prior to the Closing. Seller has, and in the case of the Other Sellers will have at or prior to the Closing, full power and authority to execute and deliver, as the case may be, this Agreement and the other Transaction Documents to which it is a party and to perform its obligations hereunder or thereunder. This Agreement and the Transaction Documents have been duly executed and delivered by Seller, and, solely as it relates to the Other Sellers and the other Transaction Documents will be duly executed and delivered by any Other Seller as necessary. This Agreement constitutes, and the other Transaction Documents when so executed and delivered will constitute, a valid and legally binding obligation of Seller and/or any Other Sellers, enforceable against it or them, as the case may be, in accordance with its terms, except as enforceability may be affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and the implied covenant of good faith and fair dealing.

(b) Except (i) for required filings under the HSR Act, and any other applicable Laws or regulations relating to antitrust or competition (collectively, “ Antitrust Regulations ”) and (ii) if determined to be necessary by Seller, the filing of this Agreement with the Securities and Exchange Commission (the “ SEC ”), the execution and delivery of this Agreement and the other Transaction Documents by Seller and/or each of the Other Sellers and the consummation by Seller and each of the Other Sellers of the transactions contemplated hereby and thereby do not and will not (A) violate or conflict with any provision of the respective certificate of incorporation or by-laws or similar organizational documents of Seller or any Other Seller, (B) result in any violation or breach or constitute any default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or a loss of a benefit under, or result in the creation of any Lien (other than a Permitted Lien) under, any Assumed Contract to which Seller or any Other Seller is a party or to which any of their assets are subject, or (C) violate, conflict with or result in any breach under any provision of any Law applicable to Seller or any Other Seller or any of their respective properties or assets, except, in the case of clauses (B) and (C), to the extent that any such breach, default, termination, cancellation, acceleration, loss, Lien, violation, conflict, breach or loss would not reasonably be expected, individually or in the aggregate, to result in a Seller Material Adverse Effect.

4.3 Governmental Approvals and Consents .

Except for any requirements under any Antitrust Regulations, no Consent, order, or license from, notice to or registration, declaration or filing with, any United States or foreign, federal, state, provincial, municipal or local government agency, court of competent jurisdiction, administrative agency or commission or other governmental or regulatory authority or instrumentality

 

-14-

 


(“ Governmental Authority ”), is required on the part of Seller or any Other Seller in connection with the execution, delivery or performance of this Agreement or any of the other Transaction Documents or the consummation of the transactions contemplated hereby and thereby, except for such Consents, orders, licenses, filings or notices which have been or will be obtained as of the Closing Date and remain in full force and effect and those with respect to which the failure to have been so obtained or to remain in full force and effect would not reasonably be expected, individually or in the aggregate, to result in a Seller Material Adverse Effect.

4.4 Properties and Assets .

(a) Seller or one or more of the Other Sellers has, and at the Closing will have and convey, good and valid title to the Purchased Assets, free and clear of all Liens, except (i) Liens for taxes, assessments and other governmental charges not yet due and payable or, if due, (A) not delinquent or (B) being contested in good faith by appropriate proceedings, (ii) mechanics’, workmen’s, repairmen’s, warehousemen’s, carriers’ or other similar Liens, including all statutory Liens, arising or incurred in the ordinary course of business for amounts which are not due and payable, (iii) equipment leases with third parties entered into in the ordinary course of business, which, in the aggregate, are not material in amount, (iv) Liens against the underlying interests of the real property landlord or owner of any Business Facility (except to the extent caused by Seller or any Other Seller), and (v) Liens that do not materially affect the value or use of the underlying Purchased Asset (collectively, “ Permitted Liens ”).

(b) Neither Seller nor any of the Other Sellers possess or otherwise hold any Owned Real Property.

(c) Section 4.4(c) of the Disclosure Letter contains a true and complete list of all Leases of real properties that are current Business Facilities, including a notation of those Leases to be assigned to Purchaser or its Designees in accordance with Section 6.8(b)(i) (“ Assigned Real Property ”), and that Lease related to Subleased Real Property, as appropriate, and sets forth the address for the Assigned Real Property or Subleased Real Property governed thereby. True and complete copies of each Lease relating to each Assigned Real Property have been delivered, or made available, to Purchaser prior to the date hereof. Except as set forth in Section 4.4(c) of the Disclosure Letter, with respect to each of such Leases: (i) such Lease is legal, valid, binding, enforceable and in full force and effect, except as enforceability may be affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and the implied covenant of good faith and fair dealing; Seller’s or the Other Seller’s possession and quiet enjoyment of the Real Property under such Lease has not been materially disturbed, and to Seller’s knowledge, there are no material disputes with respect to such Lease; (ii) neither Seller, any Other Seller, nor, to Seller’s knowledge, any other party to the Lease is in material default under such Lease, and to Seller’s knowledge, no event has occurred or circumstance exists which, after the giving of notice, the lapse of time, or otherwise, would constitute such a material default, or permit the termination, material modification or acceleration of rent under such Lease; (iii) no security deposit or portion thereof deposited with respect such Lease has been applied in respect of a breach or default

 

-15-

 


under such Lease which has not been redeposited in full; (iv) neither Seller nor any Other Seller currently owes any brokerage or finder’s fees with respect to such Lease; (v) neither Seller nor any Other Seller has subleased, licensed or otherwise granted any Person the right to use or occupy such Real Property or any portion thereof (other than as set forth in the Real Property Agreements); and (vi) neither Seller nor any Other Seller has collaterally assigned or granted any other security interest in such Lease or any interest therein.

(d) Section 4.4(d) of the Disclosure Letter contains a list of all real property to which Seller or any Other Seller is a party to a Lease, of which a portion will be subleased to Purchaser or its Designees on the Closing Date in accordance with Section 6.8(b)(ii) (the “ Subleased Real Property ”) and a description of the portion thereof to be subleased to Purchaser or its Designees. For the purposes of this Agreement, the Assigned Real Property and the Subleased Real Property shall hereinafter be referred to together as the “ Real Property .”

4.5 Contracts .

(a) Section 4.5(a) of the Disclosure Letter lists all the following Assumed Contracts (any Contract set forth or required to be set forth on Section 4.5(a) of the Disclosure Letter, collectively, the “ Assumed Material Contracts ”):

(i) any Contract (x) with any of the customers listed on Section 4.15 of the Disclosure Letter or (y) which (together with all other material Contracts with any such customer) accounted for in excess of $1 million of revenues in the most recent completed fiscal year;

(ii) any Contract (x) with the suppliers listed on Section 4.16 of the Disclosure Letter or (y) which (together with all other material Contracts with such any supplier) accounted for in excess of $1 million of expenditures in the most recent completed fiscal year;

(iii) any Contract involving any agency, marketing, licensing or sales arrangement relating to the Business involving payments (or guarantees of minimum payments or usage), other than Contracts listed under Section 4.5(a)(i) or Section 4.5(a)(ii), in excess of $250,000 in the most recent completed fiscal year;

(iv) any Contract concerning the establishment or operation of a partnership, joint venture or limited liability company;

(v) any Contract for the disposition of a material portion of the assets or business of Seller or any Other Seller related to the Business (other than sales of products in the ordinary course of business) or any agreement related to the Business for the acquisition of the assets or business of any other entity (other than purchases of inventory or components in the ordinary course of business) that would be Purchased Assets hereunder if held by Seller or any Other Seller as of the Closing;

 

-16-

 


(vi) any Contract concerning noncompetition (other than noncompetition agreements entered into with Transferred Employees in the ordinary course of business) or restricting the operation of the Business in any geographic region or businesses, product or service;

(vii) any (A) employment agreement (other than “at will” employment agreements) or consulting agreement with any Transferred Employee, other than Non-U.S. Employees, providing for fixed annual cash compensation in excess of $100,000 or any material severance or change-in-control or similar payment or benefit, or (B) collective bargaining agreement;

(viii) any settlement, conciliation or similar agreement with any Governmental Authority or any other Person, or pursuant to which any Seller or any Other Seller would reasonably be expected to be required after the date hereof to pay consideration in excess of $250,000 or that would reasonably be expected to restrict the operation of the Business from and after the Closing ;

(ix) all material Transferred Business Intellectual Property Licenses (other than licenses for generally commercially available software and other licenses where total fees for which are less than $10,000);

(x) any Contract under which the consequences of a default or termination or expiration without renewal would reasonably be expected to have a Seller Material Adverse Effect;

(xi) any information technology agreement or similar Contract material to the operation of the Business’ data centers, including (A) the primary connectivity, bandwidth and/or telecommunications agreement for each data center, (B) the primary agreement relating to back-up and disaster recovery services for each data center, (C) the primary agreement for hardware maintenance and support for each data center, and (D) the primary agreement for software maintenance and support for each data center;

(xii) any Contract which contains any provisions requiring Seller or any Other Seller to indemnify any other party (excluding indemnities contained in agreements for the purchase, sale, distribution or license of products or leases of real property entered into in the ordinary course of business for which, to the Company’s knowledge, there are not expected to be material Liabilities thereunder);

(xiii) any Contract for the acquisition or disposition of any business containing any profit sharing arrangements or “earn-out” arrangements;

(xiv) any Contract providing for or relating to indebtedness for borrowed money or material guarantees of any Liability of any Person other than Seller or any Other Seller;

(xv) any personal property leases which involves payment or the provision of services to or from Seller or any Other Seller of in excess of $100,000 in any year; and

 

-17-

 


(xvi) any other Contract the performance of which involves payment or the provision of services to or from Seller or any Other Seller of in excess of $1,000,000 in any year, excluding any Leases for Real Property.

(b) Seller has made available to Purchaser true and complete copies of all Assumed Material Contracts, including any amendments thereto, and, as of the Closing, all Assumed Contracts entered into from and after the date hereof that would be Assumed Material Contracts if entered into on or prior to the execution hereof (which shall also are deemed “Assumed Material Contracts” solely for purposes of this Section 4.5(b)). All Assumed Material Contracts are valid and binding with respect to Seller or any Other Seller and, to the knowledge of Seller, each other party thereto. Each Assumed Material Contract is assignable to Purchaser and/or its Designees without the consent or approval of any party (except as set forth in Section 4.5(b) of the Disclosure Letter) and will continue to be legal, valid, binding and enforceable against Seller or any Other Seller party thereto and, to the knowledge of Seller, all other parties thereto immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws relating to or affecting the enforcement of creditors’ rights generally, by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law) or by the implied covenant of good faith and fair dealing. Neither Seller or any Other Seller nor, to the knowledge of Seller, any other party, is in breach or violation of, or default under, any such Assumed Material Contract, and no event has occurred, is pending or, to the knowledge of Seller, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a material breach or default under such Assumed Material Contract.

(c) Notwithstanding the foregoing, this Section 4.5 shall not apply to Real Property (which is covered by Section 4.4).

4.6 Litigation .

Neither Seller nor any Other Seller, nor any of their respective properties or assets, is subject to any order, judgment, stipulation, injunction, decree or agreement with any Governmental Authority, which would prevent or materially interfere with or delay the consummation of the transactions contemplated by the Transaction Documents. No Proceeding is pending or, to the knowledge of Seller, threatened against Seller or any Other Seller, or any of their respective properties or assets, which would prevent or materially interfere with or delay the consummation of the transactions contemplated by the Transaction Documents. Except as disclosed in Section 4.6 of the Disclosure Letter, there are no material Proceedings pending or, to the knowledge of Seller, threatened against Seller or any Other Sellers in respect of the Business or the Purchased Assets.

4.7 Intellectual Property Rights .

(a) Section 4.7(a) of the Disclosure Letter sets forth a true and complete list of all material Business Intellectual Property Licenses (other than licenses for generally commercially available software and other licenses where the total fees for which are less than $10,000), indicating

 

-18-

 


which are Transferred Business Intellectual Property Licenses and which are Excluded Business Intellectual Property Licenses.

(b) Seller or an Other Seller is the sole and exclusive owner of all Transferred Business Intellectual Property Rights free and clear of any Liens (excluding non-exclusive outbound licenses in the ordinary course of business); except that this Section 4.7(b) is not a representation or warranty (and does not expand any other representation or warranty) regarding the infringement, misappropriation, or violation of the Intellectual Property Rights of any Third Party.

(c) Section 4.7(c) of the Disclosure Letter contains a true, complete and accurate list of (i) the Transferred Trademarks, (ii) the Transferred Patents, (iii) the Transferred Internet Properties, and (iv) registered Copyrights and Database Rights included in the Transferred Business Intellectual Property Rights, including, in each case, where applicable, the application number, registration number, filing date, date of issuance, assignee of record and country of origin.

(d) There are no royalties, fees, annuities or other payments payable to any third person by reason of (i) Seller’s or any Other Seller’s ownership, development, use, license, sale or disposition of any Transferred Business Intellectual Property Rights, or (ii) Seller’s or any Other Seller’s licensing of the Licensed Business Intellectual Property Rights to Purchaser or its subsidiaries under the Intellectual Property License Agreement, and no such royalties, fees, annuities, or other payments payable to any third party will arise directly as a result of the transactions contemplated by this Agreement, in each case other than fees and annuities paid to governmental or quasi-governmental bodies or registration entities (e.g., Internet domain name registration services) in the ordinary course of business to secure and maintain such Transferred Business Intellectual Property Rights.

(e) No proceedings have been instituted or are pending against Seller or any Other Seller or, to the knowledge of Seller, threatened, which challenge the rights of Seller or any of the Other Sellers with respect to the Business Technology, Licensed Business Intellectual Property Rights, or Transferred Business Intellectual Property Rights.

(f) (i) None of the Transferred Business Technology or Transferred Business Intellectual Property Rights are subject to any outstanding judgment, decree, order, writ, award, injunction or determination of an arbitrator or court or other Governmental Authority affecting the rights of Seller or any of the Other Sellers with respect thereto, and (ii) none of the Transferred Business Intellectual Property Licenses are subject to any outstanding judgment, decree, order, writ, award, injunction or determination of an arbitrator or court or other Governmental Authority to which Seller or any Other Seller is a party which affects the rights of Seller or any of the Other Sellers with respect thereto.

(g) To the knowledge of Seller, neither Seller nor any Other Seller has, in connection with the Business, infringed (whether directly, as a contributory infringer, or through inducement), misappropriated or violated the Intellectual Property Rights of any third party.

 

-19-

 


(h) Neither Seller nor any Other Seller has received any notice alleging that Seller’s or any Other Seller’s use of the Business Technology or operation of the Business infringes (whether directly, as a contributory infringer, or through inducement), misappropriates or violates any Intellectual Property Right owned or enforceable by any third party. Section 4.7(h) of the Disclosure Letter lists any written third party complaint, claim or notice, or threat of any of the foregoing (including any notification that a license under any patent is or may be required), received by Seller or any Other Seller alleging any such infringement, violation or misappropriation and any request or demand for indemnification or defense received by Seller or any Other Seller from any reseller, distributor, customer, user or any other third party in relation to the Business or any Product; and Seller has provided to the Purchaser true and complete copies of all such written complaints, claims, notices, requests, demands or threats.

(i) To the knowledge of Seller, there is no unauthorized use, disclosure or infringement of any Transferred Business Intellectual Property Right or Licensed Business Intellectual Property Right by any third party, including by any employee or former employee of Seller or an Other Seller, which would be reasonably likely to result in a Seller Material Adverse Effect. Seller has provided to Purchaser true and complete copies of all written correspondence, complaints, claims or notices sent by Seller or an Other Seller to a third party, as of the date of the Agreement, concerning the infringement, violation or misappropriation of any Transferred Business Intellectual Property Rights or Licensed Business Intellectual Property Rights.

(j) To the knowledge of Seller, no third party (including any present or former employee or consultant) is in violation of any written agreement relating to confidentiality.

4.8 Finders; Brokers . Neither Seller nor any Other Seller has employed any finder or broker in connection with the transactions contemplated by the Transaction Documents who would have a valid claim for a fee or commission in connection with the transactions contemplated by the Transaction Documents for which Purchaser or any of its Affiliates would have any liability.

4.9 Tax Matters .

(a) The Netherlands Subsidiary has timely filed all material Tax Returns that it was required to file. All such material Tax Returns were correct and complete in all respects and were prepared in substantial compliance with all applicable laws and regulations. All Taxes owed by the Netherlands Subsidiary have been paid. The Netherlands Subsidiary is currently not the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where the Netherlands Subsidiary does not file Tax Returns that the Netherlands Subsidiary is or may be subject to taxation by that jurisdiction. Notwithstanding anything contained herein to the contrary, Seller makes no representation or warranty regarding the amount or availability of any net operating loss carryforwards or any similar Tax attribute of the Netherlands Subsidiary as of the Closing Date, or the ability of Purchaser to utilize any such attributes in a taxable period or portion thereof commencing after the Closing Date.

 

-20-

 


(b) The Netherlands Subsidiary has withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party, and all Tax withholding reporting statements required with respect thereto have been properly completed and timely filed.

(c) Seller, each Other Seller and the Netherlands Subsidiary are not currently engaged and have not been engaged during the three year period ending on the Closing Date, in any material disputes with any Governmental Authority with respect to Taxes attributable to the Purchased Assets or Transferred Business Intellectual Property Rights. No Governmental Authority has proposed to make or has made any material adjustment with respect to Taxes attributable to the Purchased Assets or Transferred Business Intellectual Property Rights, and none of the Purchased Assets is “tax-exempt use property” within the meaning of Section 168(h) of the Code.(d) There is no material liability for any unpaid Taxes in respect of the Purchased Assets or Transferred Business Intellectual Property Rights.

(e) The Netherlands Subsidiary is not a party to any Tax allocation or sharing agreement. The Netherlands Subsidiary has no liability for the Taxes of any other Person under any provision of U.S. or foreign law, as a transferee or successor, by contract, or otherwise.

4.10 Employment and Benefits .

(a) Section 4.10(a) of the Disclosure Letter sets forth a list of each material Seller Plan and each material Seller International Plan as of the date of this Agreement.

(b) With respect to each material Seller Plan and each material Seller International Plan, Seller has provided or made available to Purchaser true and complete copies of the material Seller Plans and material Seller International Plans.

(c) The Seller Plans and Seller International Plans are in compliance in all material respects with all applicable requirements of ERISA, the Code, and other applicable Laws and have been administered in material accordance with their terms and such Laws, except where the failure to so comply has not had and should not reasonably be expected to have a Seller Material Adverse Effect.

(d) There are no pending or, to the knowledge of Seller, threatened Proceedings (other than routine claims for benefits) with respect to any Seller Plans that would reasonably be expected to result in material liability to the Seller or any of its Affiliates.

(e) Neither Seller nor any Subsidiary or any other person or entity under common control with Seller or any of its Subsidiaries within the meaning of Section 414(b), (c), (m) or (o) of the Code and the regulations issued thereunder maintains, sponsors, contributes to or has any Liability under or with respect to any (i) “employee pension benefit plan,” within the meaning of Section 3(2) of ERISA, which is subject to Title IV of ERISA or Section 412 of the Code, (ii) multiemployer plan, as defined in Section 3(37) of ERISA, (iii) “multiple employer plan” as defined in Section 210 of ERISA or Section 413(c) of the Code, or (iv) “multiple employer welfare

 

-21-

 


arrangement” as defined in Section 3(40) of ERISA, in each case with respect to which Purchaser or any of its Affiliates could be subject to any Liability.

4.11 Compliance with Laws .

The Business is and has been conducted by Seller and its Subsidiaries in compliance with the Laws applicable thereto, except for such violations or failures so to comply, if any, that would not reasonably be expected to have a material adverse effect on the Business. No investigation or review by any Governmental Authority with respect to the operation of the Business, or any of its assets or employees (in their capacity as employees of the Business), is or during the preceding two (2) years has been pending or, to the knowledge of Seller, threatened. Seller and its Subsidiaries each have and have had, and are and have been in compliance with, all permits, licenses, registrations, certificates, franchises, variances, exemptions, orders and other governmental authorizations, consents and approvals (collectively, “ Permits ”) necessary to conduct the Business as presently conducted, except for such Permits, the absence of which would not reasonably be expected to have a Seller Material Adverse Effect.

4.12 Environmental Matters .

Except as would not reasonably be expected to result in a Seller Material Adverse Effect: (a) Seller and each Other Seller in respect of the Business, the Business Facilities, the Hazardous Materials Activities and the Purchased Assets are and have at all times been in compliance with all Environmental Laws, including the possession of, and the compliance with, all Permits required under Environmental Laws; (b) there has not been any Release, disposal or arrangement for disposal of, or any exposure to, Hazardous Materials at or from any of the Business Facilities or otherwise in connection with the operation of the Business in violation of Environmental Laws or in a manner that could give rise to liability under any Environmental Laws; (c) Seller has not received any Environmental Claim relating to the Business or the Business Facilities; and (d) Seller has delivered to Purchaser, or has otherwise made available to Purchaser or its counsel, copies of all material environmental reports, studies, assessments, audits, sampling data, correspondence alleging any violation of Environmental Laws and other Environmental Claims in their possession relating to the Purchased Assets and the Business.

4.13 Financial Information .

(a) Section 4.13 of the Disclosure Letter sets forth (i) the unaudited pro forma balance sheet of the Business as of July 31, 2007 (the “ Interim Balance Sheet ”), and unaudited pro forma profit and loss statement for the Business for the seven months ended July 31, 2007 (the “ Interim Profit and Loss Statement ,” and, together with the Interim Balance Sheet, the “ Interim Business Financial Statements ”), and (ii) the unaudited statement of operations for the Mobile Business segment for the years ended December 31, 2006 and 2005 (the “ Statement of Operations ,” and, together with the Interim Business Financial Statements, the “ Financial Statements ”), and in each case, such Financial Statements have been prepared subject to the basis of presentation footnote(s) included on Section 4.13 of the Disclosure Letter. Unless otherwise set forth on Section 4.13 of the

 

-22-

 


Disclosure Letter, and subject to the basis of presentation included thereon with respect to the Financial Statements: (i) the Interim Balance Sheet has been derived from the unaudited consolidated financial statements of Seller and its Subsidiaries as of July 31, 2007, (ii) the Interim Profit and Loss Statement and the Statement of Operations have been derived from the unaudited consolidated financial statements of Seller and its Subsidiaries for the seven months ended July 31, 2007, and for the years ended December 31, 2006, and 2005, respectively, and (iii) the Financial Statements fairly present, in all material respects, the pro forma financial condition and pro forma operating results of the Business as of and for the periods covered thereby in accordance with GAAP (except as disclosed in Section 4.13 of the Disclosure Letter) and the accounting principles, procedures, assumptions and estimates set forth in Section 4.13 of the Disclosure Letter and consistent with the books and records of Seller and its Subsidiaries.

(b) Neither Seller nor any Other Seller has any Liability with respect to the Business, except for (i) liabilities reflected in the Interim Business Financial Statements, (ii) liabilities which have arisen since July 31, 2007 in the ordinary course of business, (iii) contractual and other liabilities incurred in the ordinary course of business which are not required by GAAP to be reflected on a balance sheet and (iv) the Excluded Liabilities, all of which liabilities listed in clauses (ii) and (iii) have not had and would not reasonably be expected, individually or in the aggregate, to have a Seller Material Adverse Effect.

4.14 Netherlands Subsidiary Shares . The number and class of the Netherlands Subsidiary Shares is set forth in Section 4.14 of the Disclosure Letter of the Disclosure Letter. All of the Netherlands Subsidiary Shares are and at all times during the preceding three (3) years have been held of record and owned beneficially by Seller free and clear of any Liens (other than Permitted Liens). All of the issued and outstanding Netherlands Subsidiary Shares of the Netherlands Subsidiary have been duly authorized and are validly issued, fully paid and non-assessable. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights or other Contracts that would require the Netherlands Subsidiary to issue, sell, or otherwise cause to become outstanding any of its capital stock or other equity interests. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights with respect to any of the Netherlands Subsidiary. Neither Seller nor any of its Subsidiaries is a party to any option, warrant, purchase right or other Contract (other than this Agreement) that would require Seller or any of its Subsidiaries to sell, transfer, or otherwise dispose of the Netherlands Subsidiary Shares or any other capital stock or other equity interests of the Netherlands Subsidiary. Neither Seller nor any of its Subsidiaries is a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of any capital stock or other equity interests of the Netherlands Subsidiary.

4.15 Customers .

Section 4.15 of the Disclosure Letter sets forth the top five (5) customers of the Business by revenue during the seven (7) month period ended July 31, 2007. (a) Neither Seller nor any Other Seller has received written notification that any such customer of the Business has threatened to terminate, fail to renew or materially and adversely change its relationship with Seller or any Other

 

-23-

 


Seller, as applicable (including with respect to the terms or quantity of business such customer does with Seller or any Other Seller, as applicable), nor (b) to the knowledge of Seller, does any such customer intend to terminate, fail to renew or materially and adversely change its relationship with Seller or any Other Seller, as applicable (including with respect to the terms or quantity of business such customer does with Seller or any Other Seller, as applicable), in each case with respect to the Business.

4.16 Suppliers .

Section 4.16 of the Disclosure Letter sets forth the material suppliers to the Business for the seven (7) month period ended July 31, 2007. (a) Neither Seller nor any Other Seller has received written notification that any such supplier of the Business has threatened to terminate, fail to renew or materially and adversely change its relationship with Seller or any Other Seller, as applicable (including with respect to the terms or quantity of business such supplier does with Seller or any Other Seller, as applicable), nor (b) to the knowledge of Seller, does any such supplier intend to terminate, fail to renew or materially and adversely change its relationship with Seller or any Other Seller, as applicable (including with respect to the terms or quantity of business such supplier does with Seller or any Other Seller, as applicable), in each case with respect to the Business.

4.17 Absence of Changes .

Except as otherwise disclosed in this Agreement or the exhibits or schedules hereto, (x) from December 31, 2006 and through the date hereof, Seller and its Subsidiaries have conducted the Business in the ordinary course consistent with past practices, and (y) from December 31, 2006 and through the date hereof, there has not occurred any Seller Material Adverse Effect. Without limiting the generality of the foregoing, from December 31, 2006 and through the date hereof, Seller and its Subsidiaries have not, with respect to the Business, the Purchased Assets (or any asset, which if held by Seller or any Other Seller as of the Closing would be a Purchased Asset) or the Assumed Liabilities:

(a) sold, assigned, pledged, hypothecated or otherwise transferred any assets, properties or rights except those which, when taken together with all assets, properties or rights disposed of, are immaterial to the Business taken as a whole;

(b) terminated or materially amended, or been in any material breach under, any Assumed Material Contract (or any contract, which if held by Seller or any Other Seller as of the Closing would be an Assumed Material Contract);

(c) suffered any material damage, destruction or other casualty loss (whether or not covered by insurance);

(d) incurred any Lien, other than Permitted Liens, upon any of the assets, rights or properties of the Business;

 

-24-

 


(e) changed any accounting methods or practices followed by or applicable to Seller or the Subsidiaries (other than such as have been required by applicable law or GAAP) related to the Business, the Purchased Assets or the Assumed Liabilities;

(f) disposed of or failed to keep in effect any rights in, to or for the use of any material Permit (including any pending application therefor) of the Business;

(g) cancelled, modified or waived any material debts or material claims held by Seller or any Other Seller or any waiver of any other rights of Seller or any Other Seller;

(h) disposed of or failed to keep in effect any rights in, to or for the use of any of material Intellectual Property Rights;

(i) except for salary, bonuses and incentive compensation in the ordinary course of business consistent with past practices, (i) increased the compensation payable or to become payable by Seller or Other Seller to any Transferred Employee or (ii) increased any employee benefit plan, payment or arrangement for any Transferred Employee; or

(j) entered into an agreement to do any of the foregoing.

4.18 Restrictions on Business Activities .

There is no Contract, agreement or commitment to which Seller or any Other Seller is a party limiting in any material respect the right of Seller or any Other Seller to engage in any material line of business or to compete with any Person, in each case which would apply to the activities of Purchaser after the Closing with respect to the Business.

4.19 Sufficiency of Assets .

The Purchased Assets, the Transferred Business Intellectual Property Rights, the Transferred Business Technology, the Licensed Business Intellectual Property Rights, the Licensed Business Technology, the Assigned Real Property, the Subleased Real Property, and the services and benefits provided under the Transition Services Agreement, (a) constitute all the assets, properties and rights necessary to conduct the Business after the Closing in all material respects as currently conducted, and (b) include all of the assets and properties (other than assets and properties that, individually and in the aggregate, are immaterial) (x) held by Seller or any Other Seller and used with respect to the Business as currently conducted, or (y) included in the Balance Sheet (other than, with respect to clauses (x) and (y) above, supplies and inventory used, sold or disposed of in the ordinary course of business and restocked in accordance with past practice). Notwithstanding the foregoing, this Section 4.19 shall not be deemed a representation or warranty regarding non-infringement, validity or enforceability of Intellectual Property Rights.

 

-25-

 


4.20 Condition of Purchased Assets .

The tangible Purchased Assets that are material to the Business are free from material defects, have been maintained in accordance with normal industry practice, are in good operating condition and repair (subject to normal wear and tear) and are suitable for the purposes for which they presently are used. The other tangible Purchased Assets are free from material defects, have been maintained in accordance with normal industry practice, are in good operating condition and repair (subject to normal wear and tear) and are suitable for the purposes for which they presently are used except as individually or in the aggregate is not material to the Business.

4.21 Accounts Receivable .

All accounts receivable reflected on the Interim Balance Sheet as of July 31, 2007 or as set forth on the Final Closing Statement of Working Capital (net of allowances for doubtful accounts as reflected thereon) are valid receivables arising in the ordinary course of business and are current and, to the knowledge of the Seller, collectible at the aggregate recorded amount therefore as shown on the Balance Sheet (net of allowances for doubtful accounts as reflected thereon). Except as set forth in Section 4.21 of the Disclosure Letter, no Person has any Lien on such receivables or any part thereof, and no agreement for deduction, free goods, discount or other deferred price or quantity adjustment has been made with respect to any such receivables.

4.22 Labor and Employment Matters .

Except as disclosed in Section 4.22(a) of the Disclosure Letter, with respect to Business: (i) there is no collective bargaining agreement or a union which represents Seller’s employees; (ii) to the knowledge of Seller, no management-level Transferred Employee has any present intention to terminate their employment; (iii) no labor organization has filed any representation petition or made any written or oral demand for recognition; (iv) to the knowledge of Seller, no union organizing or decertification efforts are underway or threatened and no other question concerning representation exists; (v) during the past five (5) years, no labor strike, work stoppage, slowdown, or other material labor dispute has occurred, and none is underway or, to the knowledge of Seller, threatened; (vi) there is no workers compensation liability outside the ordinary course of business; (vii) there is no material employment-related charge, complaint, grievance, investigation, audit or inquiry pending or threatened in any forum, relating to an alleged violation or breach by Seller or any of its Subsidiaries (or any of their respective officers or directors) of any Law or Contract. Section 4.22(b) of the Disclosure Letter contains a true and correct description of all severance and change-in-control or other similar benefits that may become payable to any Transferred Employee as of the Closing which are not the sole responsibility of Seller and the Other Sellers (it being understood that acceleration of equity awards are the sole responsibility of Seller).

4.23 Insurance .

Section 4.23 of the Disclosure Letter sets forth a list of each insurance policy providing for liability exposure (including policies providing property, casualty, liability and workers’

 

-26-

 


compensation coverage and bond and surety arrangements) to which Seller is currently a party, a named insured or otherwise the beneficiary of coverage (“ Insurance Policies ”). All Insurance Policies are in full force and effect. Since January 1, 2005, Seller has paid all premiums due thereunder, and no notice (whether oral or written) of cancellation of any such coverage has been received by Seller.

4.24 Absence of Sensitive Payments; Suitability .

(a) None of Seller or any Other Seller, nor to Seller’s knowledge, any of their respective officers, directors or senior level employees with responsibilities relating to the Business, acting alone or together, has performed any of the following acts: (i) the making of any contribution, payment, remuneration, gift or other form of economic benefit (a “ Payment ”) to or for the private use of any governmental official, employee or agent where the Payment or the purpose of the Payment was illegal under the Laws of the U.S. or any foreign jurisdiction or the jurisdiction in which such Payment was made, or (ii) the establishment or maintenance of any unrecorded fund, asset or liability for any purpose or the making of any false or artificial entries on its books.

(b) None of Seller or any Other Seller, nor to Seller’s knowledge, any of their respective officers, directors or senior level employees with responsibilities relating to the Business, acting alone or together: (i) has ever been indicted for or convicted of any felony or any crime involving fraud or misrepresentation; (ii) is subject to any outstanding judgment, order, writ, injunction, stipulation, ruling, decree or award barring, suspending or otherwise limiting the right of Seller or any Other Seller or such person to engage in any activity conducted as part of the business of Seller or any Other Seller as currently conducted; or (iii) to Seller’s knowledge, has ever been denied any Permit affecting Seller’s or any Other Seller’s or such person’s ability to conduct any activity conducted as part of the business of Seller or any Other Seller.

4.25 Affiliated Transactions .

There are no transactions, or series of related transactions, agreements, arrangements or understandings, nor are there any currently proposed transactions, or series of related transactions, related to Business or the Purchased Assets that would be required to be disclosed by Seller under Item 404 of Regulation S-K promulgated under the Securities Act or would be required to be disclosed by Seller thereunder if the individual listed on Section 4.25 of the Disclosure Letter was and is an executive officer of Seller.

4.26 No Other Representations or Warranties .

Except for the representations and warranties contained in this Agreement, Purchaser acknowledges that none of Seller, the Other Sellers, the other Subsidiaries or Affiliates of Seller nor any other Person makes any other express or implied representation or warranty with respect to the Business, the Purchased Assets, the Transferred Business Intellectual Property Rights, the Assumed Liabilities or otherwise, including as to (a) the physical condition or usefulness for a particular purpose of the real or tangible personal property included in the Purchased Assets, (b) the use of the

 

-27-

 


Purchased Assets and Transferred Business Intellectual Property Rights and the operation of the Business by Purchaser or any of its Designees after the Closing in any manner other than as used and operated by Seller or the Other Sellers, or (c) the probable success or profitability of the ownership, use or operation of the Business by Purchaser or any of its Designees after the Closing.

ARTICLE V

REPRESENTATIONS OF PURCHASER

Purchaser represents and warrants to Seller as follows:

5.1 Corporate Existence .

Purchaser and each Designee is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Purchaser and each Designee is duly qualified to conduct business and is in good standing under the Laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification, except for those jurisdictions in which the failure to be so qualified or in good standing has not had and would not reasonably be expected, individually or in the aggregate, to have a Purchaser Material Adverse Effect. Purchaser and each Designee have the requisite corporate power and authority to own, lease and operate the Purchased Assets and the Transferred Business Intellectual Property Rights and assume the Assumed Liabilities, and to carry on the Business in substantially the same manner as the same is now being conducted by Seller and the Other Sellers. Neither Purchaser nor any Designee is in default under or in violation of any provision of its corporate charter or by-laws.

5.2 Corporate Authority .

(a) This Agreement and the other Transaction Documents to which Purchaser and the Designees are a party and the consummation of the transactions contemplated hereby and thereby involving such Person (i) have been duly authorized by Purchaser’s Board of Directors and, other than the delivery of notice to stockholders of Purchaser pursuant to Section 228 of the Delaware General Corporation Law with respect to certain matters authorized by stockholders of Purchaser by written consent in connection with the transactions contemplated hereby, no other corporate proceedings on the part of Purchaser are necessary to authorize this Agreement or the other Transaction Documents or to consummate the transactions contemplated hereby or thereby, and (ii) will be duly authorized by each applicable Designee by all requisite corporate, partnership or other action prior to the Closing. Purchaser and each Designee has full power and authority to execute and deliver, as the case may be, this Agreement and the Transaction Documents to which it is a party and to perform its obligations hereunder or thereunder. This Agreement has been duly executed and delivered by Purchaser, and the other Transaction Documents will be duly executed and delivered by Purchaser and any Designee party thereto, and this Agreement constitutes, and the other Transaction Documents when so executed and delivered will constitute, a valid and legally binding obligation of Purchaser and each of its Designees party thereto, enforceable against it or them, as the case may be, in accordance with its terms except as enforceability may be affected by bankruptcy, insolvency, fraudulent conveyance,

 

-28-

 


reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at Law) and the implied covenant of good faith and fair dealing.

(b) Except for the required filings under the applicable Antitrust Regulations, the execution and delivery of this Agreement and the other Transaction Documents by Purchaser and the Designees and the consummation by Purchaser and the Designees of the transactions contemplated hereby and thereby do not and will not (A) violate or conflict with any provision of the respective certificate of incorporation or by-laws or similar organizational documents of Purchaser or any of its Designees, (B) result in any violation or breach or constitute any default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material benefit under, or result in the creation of any Lien under any material contract, indenture, mortgage, lease, note or other agreement or instrument to which Purchaser or any of its Designees is subject or is a party, or (C) violate, conflict with or result in any breach under any provision of any Law applicable to Purchaser or any of its Designees or any of their respective properties or assets, except, in the case of clauses (B) and (C), to the extent that any such breach, default, termination, cancellation, acceleration, Lien, violation, conflict, breach or loss would not reasonably be expected, individually or in the aggregate, to result in a Purchaser Material Adverse Effect.

5.3 Governmental Approvals and Consents .

Neither Purchaser nor any of its Designees is subject to any order, judgment, decree, stipulation, injunction or agreement with any Governmental Authority which would prevent or materially interfere with or delay the consummation of the transactions contemplated by the Transaction Documents or would be reasonably likely to have a Purchaser Material Adverse Effect. No claim, action, suit, proceeding or investigation is pending or, to the knowledge of Purchaser, threatened against Purchaser or any of its Designees which would prevent or materially interfere with or delay the consummation of the transactions contemplated by the Transaction Documents. Except for any requirements under any Antitrust Regulations, no Consent, approval, order or authorization of, license or permit from, notice to or registration, declaration or filing with, any Governmental Authority, is required on the part of Purchaser or any of its Designees in connection with the execution, delivery or performance of this Agreement or any of the other Transaction Documents or the consummation of the transactions contemplated hereby and thereby except for such Consents, approvals, orders or authorizations of, licenses or permits, filings or notices which have been obtained or will be obtained as of the Closing Date and remain in full force and effect and those with respect to which the failure to have been so obtained or to remain in full force and effect would not reasonably be expected, individually or in the aggregate, to result in a Purchaser Material Adverse Effect.

5.4 Financial Capacity .

Purchaser and certain investors have duly executed and delivered that certain Series I Preferred Stock Purchase Agreement, dated October 12, 2007 (the “ Stock Purchase Agreement ”), by

 

-29-

 


and among Purchaser, certain of its Affiliates, and the investors that are parties thereto (the “ Investors ”), and concurrently with the entering into of the Stock Purchase Agreement, (i) the Investors (other than Koala Holdings Limited Partnership, a Delaware limited partnership (“ Koala ”)) have deposited cash into an escrow account pursuant to one or more definitive escrow agreements between such Investors and Boult, Cummings, Conners & Cummings, PLC, as escrow agent, which escrow agreements are attached hereto as Annex 1 (the “ Investor Escrow Agreements ”), (ii) Koala has deposited cash into an escrow account pursuant to a definitive escrow agreement by and between Koala, Purchaser and U.S. Bank National Association, a national banking association, as escrow agent, which escrow agreement is attached hereto as Annex 2 (the “ Koala Escrow Agreement ”), and (iii) Purchaser has deposited cash into an escrow account pursuant to a definitive escrow agreement by and between Purchaser and Boult, Cummings, Conners & Cummings, PLC, as escrow agent, which escrow agreement is attached hereto as Annex 3 (the “ Purchaser Escrow Agreement ”) (such deposited cash by the Investors and Purchaser, the “ Purchase Escrow Funds ,” and the Investor Escrow Agreements, the Koala Escrow Agreement and the Purchaser Escrow Agreement, collectively, the “ Purchase Funds Escrow Agreements ”). Each of the Purchase Funds Escrow Agreements have been duly executed and delivered by all of the parties to such agreements. Purchaser has delivered to Seller on or prior to the date hereof a true and correct, fully executed copy of the Stock Purchase Agreement and the Purchase Funds Escrow Agreements, and such agreements have not been amended or modified (except, from and after the date hereof, to add additional parties who are investing additional equity funds in Purchaser) and are in full force and effect. The Purchase Escrow Funds are in the aggregate at least equal to the Purchase Price. The proceeds from the transactions contemplated by the Stock Purchase Agreement and the cash of Purchaser held as part of the Purchase Escrow Funds are sufficient to enable Purchaser to consummate the transactions contemplated hereby.

5.5 Finders; Brokers .

Neither Purchaser nor any Designee has employed any finder or broker in connection with the transactions contemplated by the Transaction Documents who would have a valid claim for a fee or commission in connection with the transactions contemplated by the Transaction Documents for which Seller or any of its Subsidiaries would have any liability.

5.6 Purchase for Investment .

With respect to the Netherlands Subsidiary Shares, Purchaser and its Designees are aware that such Netherlands Subsidiary Shares were not registered under the Securities Act, or any other applicable securities Laws, and were issued pursuant to exemptions therefrom. Purchaser or the Designee thereof is purchasing the Netherlands Subsidiary Shares solely for investment, with no present intention to distribute the Netherlands Subsidiary Shares to any Person.

 

-30-

 


5.7 No Other Representations or Warranties .

Except for the representations and warranties contained in this Agreement, none of Purchaser, the Subsidiaries or Affiliates of Purchaser nor any other Person makes any other express or implied representation or warranty on behalf of Purchaser.

ARTICLE VI

AGREEMENTS OF PURCHASER AND SELLER

6.1 Operation of the Business .

Except as required by this Agreement or as disclosed in Section 6.1 of the Disclosure Letter, Seller covenants that, in respect of the Business (it being understood that nothing in this Section 6.1 shall in any way limit Seller’s or any of its Subsidiaries’ operation of the Retained Business except to the extent related to the Business or Seller’s other obligations hereunder), until the Closing it will, and it will cause the Other Sellers to, (x) operate, invest in and conduct the Business in all material respects in the ordinary course, and (y) use commercially reasonable efforts to continue, in a manner consistent with the past practice of the Business, to keep available the services of their respective employees, to pay accounts payable, to comply with Law and Permits, to maintain and preserve intact the Business in all material respects and to maintain in all material respects the ordinary and customary relationships of the Business with its suppliers, customers, licensees, licensors, consultants and others having business relationships with it with a view toward preserving for Purchaser and its Designees after the Closing Date the Business, the Purchased Assets and the goodwill associated therewith. Except as otherwise contemplated by this Agreement or as disclosed in Section 6.1 of the Disclosure Letter, without limiting the generality of the foregoing, Seller shall not, and shall cause the Other Sellers not to, without the prior written approval of Purchaser (which approval shall not be unreasonably withheld or delayed), take any of the following actions with respect to the Business:

(a) transfer, sell, lease, license or otherwise convey or dispose of, or subject to any Lien, any of the Purchased Assets or Transferred Business Intellectual Property Rights or any asset or Intellectual Property Right which, if held by Seller or any Other Seller as of the Closing would be a Purchased Asset or Transferred Business Intellectual Property Right, respectively, other than (i) sales of inventory in the ordinary course of business, (ii) other transfers, leases, licenses and dispositions made in the ordinary course of business, or (iii) Permitted Liens;

(b) directly or indirectly, through any officer, director or agent, solicit inquiries or proposals that constitute, or are intended to lead to a proposal or offer from, provide any confidential information to, enter into any agreement, understanding or arrangement with, or initiate any discussions or negotiations or coop


 
SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)


Try our advanced search >>
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates
Email:
This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more