EXECUTION
COPY
CONTRIBUTION
AGREEMENT
DATED AS OF
DECEMBER 11, 2006
BY AND
AMONG
LOCAL INSIGHT MEDIA,
LLC,
as Local
Insight
CBD INVESTOR,
INC.,
as CBD
Investor
CINCINNATI BELL INC.
HOLDINGS,
as CBIH
SPECTRUM EQUITY
INVESTORS III, L.P.,
SEI III
ENTREPRENEURS’ FUND, L.P.,
SPECTRUM III
INVESTMENT MANAGERS’ FUND, L.P.,
SPECTRUM IV
INVESTMENT MANAGERS’ FUND, L.P.,
SPECTRUM EQUITY
INVESTORS IV, L.P.,
SPECTRUM EQUITY
INVESTORS PARALLEL IV, L.P.,
as the CBD Investor
Stockholders
THE HOLDERS OF
COMPANY CLASS C UNITS SET FORTH ON THE SIGNATURE PAGES
HERETO
and
WCAS MANAGEMENT
CORPORATION,
WELSH, CARSON,
ANDERSON & STOWE X, L.P.
WCAS CAPITAL PARTNERS
IV, L.P.
as the Local Insight
Members
TABLE OF CONTENTS
Page
ARTICLE I.
DEFINITIONS
2
1.1
Previously Defined
Terms
2
1.2
Other
Definitions
2
ARTICLE II. CONTRIBUTION
AND ISSUANCE OF LOCAL INSIGHT MEMBERSHIP INTERESTS
11
2.1
Contribution and
Consideration
11
2.2
Limited Liability
Company Agreement of Local Insight
11
2.3
Directors and Executive
Officers of Local Insight
12
2.4
Reporting
12
2.5
Subsequent
Transaction
12
ARTICLE III.
REPRESENTATIONS AND WARRANTIES with RESPECT TO the Company and CBD
Investor 12
3.1
Organization
12
3.2
Capitalization;
Subsidiaries
13
3.3
Authority; No
Violation
14
3.4
Consents and
Approvals
15
3.5
Reports
15
3.6
Financial
Statements
15
3.7
Brokers’
Fees
16
3.8
Absence of Certain
Changes or Events
16
3.9
Legal
Proceedings
17
3.10
Taxes and Tax
Returns
17
3.11
Employees
18
3.12
Employee
Plans
19
3.13
Internal
Controls
20
3.14
Compliance with Laws;
Licenses
21
3.15
Company Material
Contracts
21
3.16
Agreements with
Governmental Agencies
23
3.17
Environmental
Liability
24
3.18
Real Property
24
3.19
Personal
Property
24
3.20
Company Intellectual
Property
25
3.21
Insurance
26
3.22
Corporate
Records
26
3.23
Affiliate
Transactions
26
3.24
Anti-Corruption
Laws
26
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS
27
4.1
Representations and
Warranties of CBD Investor Stockholders
27
4.2
Representations and
Warranties of CBIH
29
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF LOCAL INSIGHT
30
5.1
Corporate
Organization
30
5.2
Capitalization;
Subsidiaries
31
5.3
Authority; No
Violation
32
5.4
Consents and
Approvals
33
5.5
Financial
Statements
33
TABLE OF CONTENTS
Page
5.6
Brokers’
Fees
34
5.7
Absence of Certain
Changes or Events
34
5.8
Legal
Proceedings
34
5.9
Taxes and Tax
Returns.
34
5.10
Employees
35
5.11
Employee
Plans
37
5.12
Internal
Controls
38
5.13
Compliance with Laws;
Licenses
38
5.14
Local Insight Material
Contracts
39
5.15
Agreements with
Governmental Agencies
41
5.16
Environmental
Liability
41
5.17
Real Property
41
5.18
Personal
Property
42
5.19
Local Insight
Intellectual Property
42
5.20
Insurance
43
5.21
Corporate
Records
43
5.22
Holding
Company
44
5.23
Affiliate
Transactions
44
5.24
Anti-Corruption
Laws
44
5.25
Material Misstatements
or Omissions
45
5.26
ACS Acquisition
Documents
45
ARTICLE VI. COVENANTS
RELATING TO CONDUCT OF BUSINESS
45
6.1
Conduct of Businesses
Prior to the Closing
45
6.2
CBD Investor and Company
Forbearances
46
6.3
Local Insight
Forbearances
48
6.4
Control of Other
Party’s Business
50
6.5
Contribution by Class C
Holders
50
6.6
Assignment of
Copyrights
50
6.7
Update of Domain
Name
51
ARTICLE VII. ADDITIONAL
AGREEMENTS
51
7.1
Regulatory
Matters
51
7.2
Access to
Information
52
7.3
Legal Conditions to
Consummation of the Transaction
53
7.4
Advice of
Changes
54
7.5
No Negotiations by the
Contributors or the Company
54
7.6
No Negotiations by the
Local Insight Members or Local Insight
55
7.7
Cooperation With Special
Dividend Financing
56
7.8
Tax Matters
57
7.9
Indemnification;
Directors’ and Officers’ Insurance.
58
ARTICLE VIII. CONDITIONS
PRECEDENT
59
8.1
Conditions to Each
Party’s Obligation To Effect the Transaction
59
8.2
Conditions to
Obligations of Local Insight
59
8.3
Conditions to
Obligations of the Contributors
60
ARTICLE IX. TERMINATION
AND AMENDMENT
61
9.1
Termination
61
9.2
Effect of
Termination
61
TABLE OF CONTENTS
Page
ARTICLE X. GENERAL
PROVISIONS
62
10.1
Closing
62
10.2
Non-Survival of
Representations and Warranties
62
10.3
Fees and
Expenses
62
10.4
Notices
64
10.5
Interpretation
66
10.6
Amendment
66
10.7
Extension;
Waiver
66
10.8
Counterparts
66
10.9
Entire
Agreement
66
10.10
Governing Law
66
10.11
Jurisdiction
67
10.12
Publicity
67
10.13
Assignment; Third Party
Beneficiaries
67
10.14
Specific
Performance
67
10.15
Severability
67
10.16
Waiver of Jury
Trial
68
CONTRIBUTION
AGREEMENT
This CONTRIBUTION
AGREEMENT (this “ Agreement ”) is entered into
as of December 11, 2006, by and among Local Insight Media, LLC
1 , a Delaware limited liability company (“
Local Insight ”), CBD Investor, Inc., a Delaware
corporation (“ CBD Investor ”), and Cincinnati
Bell Inc. Holdings, an Ohio corporation (“ CBIH
”), and the holders of equity securities of CBD Investor set
forth in the signature pages hereto (each such holder of equity
securities of CBD Investor, a “ CBD Investor
Stockholder ” and collectively, the “ CBD
Investor Stockholders ”), the individuals set forth on
the signature pages here to as holders of Company Class C Units
(each a “ Class C Holder ” and collectively, the
“ Class C Holders ”), and the holders of equity
securities of Local Insight set forth in the signature pages
hereto (each such holder a “ Local Insight Member
” and collectively, the “ Local Insight Members
”). As used herein, each CBD Investor Stockholder, each
Class C Holder and CBIH are sometimes referred to individually as a
“ Contributor ” and collectively as the “
Contributors .”
RECITALS:
WHEREAS, the CBD
Investor Stockholders collectively own all of the issued and
outstanding equity securities of CBD Investor (the “ CBD
Investor Securities ”);
WHEREAS, (a) CBD
Investor and CBIH collectively own all of the issued and
outstanding Class A limited liability company membership units (the
“ Company Class A Units ”) and Class B limited
liability company membership units (the “ Company Class B
Units ”) and (b) the Class C Holders own all of the
issued and outstanding Class C limited liability company membership
unites (the “ Company Class C Units ”), in each
case of CBD Media Holdings LLC, a Delaware limited liability
company (the “ Company ”);
WHEREAS, each of the
CBD Investor Stockholders desires to transfer and assign to Local
Insight all of its CBD Investor Securities in exchange for Local
Insight Membership Interests (as that term is defined below), and
Local Insight desires to issue Local Insight Membership Interests
to the CBD Investor Stockholders in exchange for all the issued and
outstanding CBD Investor Securities, all on the terms and subject
to the conditions set out in this Agreement;
WHEREAS, CBIH desires
to transfer and assign to Local Insight all of its Company
Class A Units and Company Class B Units in exchange for
Local Insight Membership Interests, and Local Insight desires to
issue Local Insight Membership Interests to CBIH in exchange for
all of the issued and outstanding Company Class A Units and
Company Class B Units held by CBIH, all on the terms and
subject to the conditions set out in this Agreement;
WHEREAS, the Class C
Holders desire to transfer and assign to Local Insight all of their
respective Company Class C Units in exchange for Local Insight
Membership Interests, and Local Insight desires to issue Local
Insight Membership Interests to the Class C Holders in exchange for
all of the issued and outstanding Company Class C Units held
by the Class C Holders, all on the terms and subject to the
conditions set out in this Agreement;
1
To be converted to a
Limited Partnership prior to closing.
1
WHEREAS, the parties
hereto intend that the transactions contemplated by this Agreement
qualify as an exchange pursuant to Section 721 of the Code;
and
WHEREAS, immediately
prior to the transactions contemplated herein, the CBD Investor
Stockholders and CBD Investor shall have completed the
Reorganization and the Company and the Company Subsidiaries shall
have completed the Special Dividend Financing and shall have paid
the Special Dividend to the Contributors.
NOW, THEREFORE, in
consideration of the premises and the representations, warranties,
covenants and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I.
DEFINITIONS
1.1
Previously Defined
Terms
. Whenever used
herein, each term defined in the first paragraph or Recitals of
this Agreement shall have the meaning set forth above, unless
otherwise expressly provided or unless the context clearly requires
otherwise.
1.2
Other
Definitions
. As used herein,
the following terms shall have the following respective meanings,
unless otherwise expressly provided or unless the context clearly
requires otherwise:
“ ACS
Acquisition ” means the acquisition by Pendo Acquisition
ULC, an indirect wholly owned subsidiary of Local Insight, of:
(i) all the issued and outstanding shares of common stock of
ACS Media Canada, Inc., and (ii) certain indebtedness owing
from ACS Media Canada Inc. to ACS Media Income Fund, pursuant to
that certain Share Purchase Agreement dated as of September 25,
2006, by and between ACS Media Income Fund and Pendo Acquisition
ULC, which acquisition was consummated on November 22,
2006.
“ ACS
Indebtedness ” means: (i) the $140 million credit
facility established pursuant to that certain Credit Agreement,
dated as of November 22, 2006, by and among Pendo Acquisition
Holding Inc., a wholly owned Subsidiary of Local Insight, ACS Media
(as defined below), the Subsidiary Guarantors (as defined therein),
the several banks and other financial institutions parties thereto,
and Wachovia Bank, National Association, as administrative agent
and (ii) the issuance and sale by Pendo Acquisition Holding Inc. of
$35 million in aggregate principal amount of 10% Senior
Subordinated Notes Due 2014 pursuant to that certain Notes Purchase
Agreement, dated as of November 22, 2006, by and between Pendo
Acquisition Holding Inc. and WCAS Capital Partners IV,
L.P.
“ ACS
Media ” means ACS Media LLC, an Alaska limited liability
company, an indirect, 99.9% owned Subsidiary of Local
Insight.
“ Action
” means any action, complaint, claim, petition, arbitration
proceeding, investigation, suit or other proceeding before any
Governmental Entity or other tribunal.
2
“
Affiliate ” means, with respect to any Person, a
Person that, directly or indirectly, is controlled by, controls, or
is under common control with such Person. As used in the
preceding sentence, “control” shall mean and include,
but not necessarily be limited to: (i) the ownership of 50% or more
of the voting securities or other voting interests of any Person or
(ii) the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by
contract or otherwise.
“ Axesa
” means Axesa Servicios de Información S. en C., a
Puerto Rico limited partnership and a 60%-owned Subsidiary of
Caribe Media.
“ Bank
Debt ” means the Company’s existing Term Loan
Facility and Revolving Term Loan Facility entered into on June 13,
2003.
“ Business
Day ” means any day on which banks are not required or
authorized to close in the City of New York.
“Caribe
Media ” means Caribe Media, Inc., a
Puerto Rico corporation and an indirect 100%-owned Subsidiary of
Local Insight.
“ CBD
Investor ” has the meaning set forth in the
recitals.
“ CBD Investor
Charter ” means the certificate of incorporation and
bylaws of CBD Investor, each as amended through, and in effect as
of, the date of this Agreement.
“ CBD Investor
Securities ” has the meaning set forth in the
recitals.
“ CBD Investor
Stockholders ” has the meaning set forth in the
recitals.
“ CERCLA
” means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
“ Closing
” means the closing of the transactions contemplated by this
Agreement.
“ Closing
Date ” has the meaning ascribed thereto in Section
10.1 .
“ COBRA
” means Part 6 of Subtitle B of Title I of ERISA, Section
4980B of the Code, and any similar state Law.
“ Code
” means the Internal Revenue Code of 1986, as
amended.
“ Company
Acquisition Proposal ” means any inquiry, proposal or
offer regarding any merger, reorganization, exchange,
consolidation, sale of assets, sale of membership or other equity
interests or similar transaction involving CBD Investor, the
Company or any Company Subsidiary which, if consummated, would
constitute a Company Alternative Transaction.
“ Company
Alternative Transaction ” has the meaning ascribed
thereto in Section 7.5(b) .
3
“ Company
Audited Financial Statements ” means the audited
consolidated balance sheets of the Company and its Subsidiaries as
of December 31, 2005 and 2004, the related consolidated statements
of operations and cash flows for the years ended December 31, 2005,
2004 and 2003, and the related consolidated statements of
members’ capital (deficit) for the years ended December 31,
2005, 2004 and 2003.
“ Company
Benefit Plan ” means each “employee benefit
plan” (as such term is defined in Section 3(3) of ERISA) and
each other material benefit plan, program, agreement, or
arrangement maintained, sponsored, or contributed or required to be
contributed to by CBD Investor, the Company or any Company
Subsidiary or with respect to which CBD Investor, the Company or
any Company Subsidiary has or could have any material
liability.
“ Company
Bylaws ” means the Company’s Amended and Restated
Bylaws, as amended through, and as in effect as of, the date of
this Agreement.
“ Company
Class A Unit ” has the meaning set forth in the
recitals.
“ Company
Class B Unit ” has the meaning set forth in the
recitals.
“ Company
Class C Unit ” has the meaning set forth in the
recitals.
“ Company
Employee ” means any full-time or part-time employee of
CBD Investor, the Company or any Company Subsidiary; any employee
of CBD Investor, the Company or any Company Subsidiary on
workers’ compensation, maternity leave, or leave under
short-term disability; and any employee of CBD Investor, the
Company or any Company Subsidiary on other approved leaves of
absence with a legal right to reinstatement.
“ Company
ERISA Affiliate ” means CBD Investor, the Company, any
Company Subsidiary, and any Person, whether or not incorporated,
which together with CBD Investor, the Company or any Company
Subsidiary would at any relevant time be deemed a “single
employer” within the meaning of Section 414 of the Code or
Section 4001(b) of ERISA.
“ Company
Financial Advisor ” has the meaning ascribed thereto in
Section 3.7 .
“ Company
Financial Statements ” means the Company Audited
Financial Statements and the Company Unaudited Financial
Statements.
“ Company
Intellectual Property ” means all Intellectual Property
owned by the Company or any of the Company Subsidiaries that is
owned or used in the conduct of business of CBD Investor, the
Company or the Company Subsidiaries.
“ Company
Latest Balance Sheet ” has the meaning ascribed thereto
in the definition of “Company Unaudited Financial
Statements”.
“ Company
Leased Property ” means any real property leased,
subleased or otherwise used or occupied by the Company or any
Company Subsidiary that is used in the conduct of the business of
the Company or any Company Subsidiary.
4
“
Company-Licensed Third Party Intellectual Property ”
means all Intellectual Property owned by any Person other than the
Company or any Company Subsidiary that is used, in connection with
the conduct of the business of CBD Investor, the Company or any
Company Subsidiary.
“ Company LLC
Agreement ” means the Company’s Limited Liability
Company Agreement, as amended through, and in effect as of, the
date of this Agreement.
“ Company
Material Contract ” has the meaning ascribed thereto in
Section 3.15(a) .
“ Company
Regulatory Agreement ” has the meaning ascribed thereto
in Section 3.16 .
“ Company SEC
Report ” means any registration statement, prospectus,
report, form, schedule or definitive proxy statement filed by the
Company or any Company Subsidiary with the SEC pursuant to the
Securities Act or the Exchange Act.
“ Company S-K
404 Arrangements ” has the meaning ascribed thereto in
Section 3.23 .
“ Company
Subsidiary ” means any Subsidiary of the
Company.
“ Company
Systems ” has the meaning ascribed thereto in Section
3.20(e) .
“ Company
Unaudited Financial Statements ” means the unaudited
condensed consolidated balance sheet of the Company and its
Subsidiaries as of September 30, 2006 (the “ Company
Latest Balance Sheet ”) the related unaudited condensed
consolidated statements of operations and cash flows for the nine
month period ended September 30, 2006 and the related unaudited
condensed consolidated statements of members’ capital
(deficit) for the nine month period ended September 30,
2006.
“ Company
Units ” means the Company Class A Units, the Company
Class B Units and the Company Class C Units.
“ Company
Voting Debt ” means any bond, debenture, note or other
indebtedness of the Company having the right to vote on any matters
on which the Company’s members may vote.
“
Confidentiality Agreement ” means the Confidentiality
Agreement October 31, 2006, between CBD Media LLC and Welsh,
Carson, Anderson & Stowe, L.P. (an Affiliate of Local Insight),
as amended from time to time.
“ Contributor
Disclosure Schedule ” means the disclosure schedule
delivered by the Contributor s to Local Insight prior to the
execution of this Agreement.
“
Environmental Laws ” shall mean all Laws and similar
provisions having the force or effect of law, all judicial and
administrative orders and determinations, and all common law,
concerning public health and safety, worker health and safety, and
pollution or protection of the environment, including without
limitation all those relating to hazardous materials, substances or
wastes, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls, noise,
mold, odor or radiation.
5
“ ERISA
” means the Employee Retirement Income Security Act of 1974,
as amended.
“ Exchange
Act ” means the Securities Exchange Act of 1934, as
amended.
“ Excluded
Software ” means any software or license pursuant to a
standard “shrink wrap” agreement, “click
wrap” agreement or other agreement for commercially
available, off-the-shelf software where the replacement cost and/or
annual license fee for such software is less than
$25,000.
“ GAAP
” means United States generally accepted accounting
principles.
“ Governing
Documents ” means the legal document(s) by which any
Person (other than an individual) establishes its legal existence
or which govern its internal affairs. For example, the
“Governing Documents” of a corporation would be its
certificate of incorporation and by-laws, the “Governing
Documents” of a limited partnership are its certificate of
formation and its limited partnership agreement and the
“Governing Documents” of a limited liability company
are its certificate of formation and its operating
agreement.
“ Governmental
Entity ” means any federal, state, local or foreign
governmental or regulatory authority, agency, commission, bureau,
court or other governmental instrumentality.
“ HSR Act
” means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
“
Indebtedness ” means the aggregate amount (including
the current portions thereof) of all (i) indebtedness for borrowed
money, (ii) indebtedness of the type described in subsection (i)
above guaranteed, directly or indirectly, in any manner, but
excluding endorsements of checks and other instruments in the
ordinary course of business, (iii) indebtedness for the deferred
purchase price of property or services (other than current trade
payables arising in the ordinary course of business, but including
all seller notes and “earn-out” payments); (iv)
indebtedness evidenced by any note, bond, debenture or other debt
security; (v) obligations under any interest rate, currency or
other hedging agreements; (vi) commitments by which a Person
assures a creditor against loss (excluding contingent reimbursement
obligations with respect to letters of credit entered into in the
ordinary course of business); (vii) indebtedness secured by a Lien
on a Person’s assets; (viii) obligations to make any payments
required upon a change of control of the Person in question or any
payments with respect to any phantom stock plan or obligations with
respect to stock appreciation rights that have become due and
payable; (ix) any obligations under capitalized leases; (x)
interest expense accrued but unpaid on or relating to any of such
indebtedness, and (xi) prepayment penalties and premiums relating
to any of such indebtedness.
“ Intellectual
Property ” means: (i) all inventions (whether or not
patentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications and
patent disclosures, together with all reissues, continuations,
continuations-in-part, revisions, divisionals, extensions, and
reexaminations thereof; (ii) all trademarks, trade names, domain
names, trade dress, logos, slogans, corporate names, brand names,
service marks, together with all translations, adaptations,
derivations, and combinations thereof, and all applications,
registrations and renewals in connection therewith, and all
goodwill associated with any of the foregoing; (iii) all works of
authorship, copyrights and website content, and all registrations,
applications and renewals in connection therewith; (iv) all source
code and
6
object code versions of
computer software (including data, databases and related
documentation); (v) all trade secrets and confidential business
information (including ideas, know-how, formulas, compositions,
processes, methods and techniques, technical data, designs,
drawings, specifications, research data, financial, marketing and
business data, pricing and cost information, business and marketing
plans and proposals and customer and supplier lists and
information); (vi) all other intellectual property and proprietary
rights; and (vii) all copies and tangible embodiments of the
foregoing, in whatever form or medium.
“ IRS
” means the Internal Revenue Service.
“ Knowledge of
Local Insight ” or “ Local Insight’s
Knowledge ” means the actual knowledge of Scott Pomeroy,
Linda Martin and John Fischer after due inquiry of those employees,
officers and consultants of Local Insight or Caribe Media who could
reasonably be expected to have knowledge of the matters in
question.
“ Knowledge of
the Contributors ” or “ Contributors’
Knowledge ” means the actual knowledge of Douglas Myers
or John Schwing after due inquiry of those employees, officers and
consultants of the Company or any of the Company Subsidiaries who
could reasonably be expected to have knowledge of the matters in
question.
“ Law
” means any federal, state, local or foreign law, statute,
ordinance, rule, regulation, order, injunction, judgment, decree,
award, agency requirement, license or permit of any Governmental
Entity.
“ License
” means any license, permit, franchise, variance, exemption,
order, consent, certificate of public convenience and/or necessity,
approval or other authorization issued or granted by a Governmental
Entity.
“ Lien
” means any lien, pledge, charge, mortgage, claim, security
interest or other encumbrance. For the avoidance of doubt,
“Lien” shall not be deemed to include any license of
Intellectual Property.
“ Local
Insight Acquisition Proposal ” means any inquiry,
proposal or offer regarding any merger, reorganization, exchange,
consolidation, sale of assets, sale of membership or other equity
interests or similar transaction involving Local Insight or any
Local Insight Subsidiary which, if consummated, would constitute a
Local Insight Alternative Transaction.
“ Local
Insight Alternative Transaction ” has the meaning
ascribed thereto in Section 7.5(b) .
“ Local
Insight Benefit Plan ” means each “employee
benefit plan” (as such term is defined in Section 3(3) of
ERISA) and each other material benefit plan, program, agreement, or
arrangement maintained, sponsored, or contributed or required to be
contributed to by Local Insight or any Local Insight Subsidiary
or with respect to which Local Insight or any Local Insight
Subsidiary has or could have any material
liability.
“ Local
Insight Board ” means the Board of Directors of Local
Insight.
7
“ Local
Insight Disclosure Schedule ” means the disclosure
schedule delivered by Local Insight to the Contributors prior to
the execution of this Agreement.
“ Local
Insight Dominicana ” means Local Insight Servicios de
Información Dominicana, S.A., a Dominican Republic corporation
and an indirect 100%-owned Subsidiary of Local Insight.
“ Local
Insight Employee ” means any full-time or part-time
employee of Local Insight or any Local Insight Subsidiary; any
employee of Local Insight or any Local Insight Subsidiary on
workers’ compensation, maternity leave, or leave under
short-term disability; and any employee of Local Insight or any
Local Insight Subsidiary on other approved leaves of absence with a
legal right to reinstatement.
“ Local
Insight ERISA Affiliate ” means Local Insight, any Local
Insight Subsidiary and any Person, whether or not incorporated,
which together with Local Insight or any Local Insight Subsidiary
would at any relevant time be deemed a “single
employer” within the meaning of Section 414 of the Code or
Section 4001(b) of ERISA.
“ Local
Insight Financial Advisor ” has the meaning ascribed
thereto in Section 5.6 .
“ Local
Insight Financial Statements ” means: (i) the audited
balance sheets of Axesa and Caribe Dominicana, respectively, as of
December 31, 2003 and December 31, 2004, and the related statements
of income and cash flows of Axesa and Caribe Dominicana,
respectively, for the years ended December 31, 2002, December 31,
2003 and December 31, 2004; (ii) the unaudited balance sheets of
Axesa and Caribe Dominicana, respectively, as of December 31, 2005
and the related unaudited statements of income and cash flows of
Axesa and Caribe Dominicana, respectively, for the year ended
December 31, 2005; and (iii) the unaudited consolidated and
consolidating balance sheet of Caribe Media as of September 30,
2006 and the related unaudited consolidated and consolidating
statements of operations and cash flows of Caribe Media for the six
(6)-month period ended September 30, 2006.
“ Local
Insight Intellectual Property ” means all Intellectual
Property owned by Local Insight or any of the Local Insight
Subsidiaries that is used, directly or indirectly, in connection
with the conduct of business of Local Insight and the Local Insight
Subsidiaries.
“ Local
Insight Latest Balance Sheet ” has the meaning ascribed
thereto in Section 5.5(a) .
“ Local
Insight Leased Property ” means any real property leased,
subleased or otherwise used or occupied by Local Insight or any
Local Insight Subsidiary that is owned by or used in the conduct of
business of Local Insight or any Local Insight
Subsidiary.
“ Local
Insight-Licensed Third Party Intellectual Property ”
means all Intellectual Property owned by any Person other than
Local Insight or any Local Insight Subsidiary that is used in the
conduct of the business of Local Insight or any Local Insight
Subsidiary.
“ Local
Insight LLC Agreement ” means Local Insight’s
Amended and Restated Limited Liability Company Agreement, as
amended through, and in effect as of, the date of this Agreement.
8
“ Local
Insight Material Contract ” has the meaning ascribed
thereto in Section 5.14(a) .
“ Local
Insight Membership Interest ” means a limited liability
company membership interest in Local Insight.
“ Local
Insight Membership Interest Percentage ” means the
percentage of the total Local Insight Membership Interests
corresponding to a specific Local Insight Membership
Interest.
“ Local
Insight Option ” means any option to purchase Local
Insight Membership Interests.
“ Local
Insight Regulatory Agreement ” has the meaning ascribed
thereto in Section 5.15 .
“ Local
Insight Subsidiary ” means any Subsidiary of Local
Insight; provided that none of the entities acquired by Pendo
Acquisition ULC in the ACS Transaction shall constitute a
Subsidiary for purposes of this Agreement, except for purposes of
Sections 5.2(d) and (e) hereof.
“ Local
Insight Systems ” has the meaning ascribed thereto in
Section 5.19(c) .
“ Local
Insight Voting Debt ” means any bond, debenture, note or
other indebtedness of Local Insight having the right to vote on any
matters on which Local Insight’s members may vote.
“ Material
Adverse Effect ,” when used with respect to any Person,
means any change, effect, event, occurrence or state of facts that
has had or would be reasonably expected to have a material adverse
effect on the business, results of operations, properties, assets,
liabilities or financial condition of such Person and its
Subsidiaries taken as a whole, but excluding any such effect or
change that is generally applicable to: (i) the United States
economy; (ii) the United States financial, credit or securities
markets; or (iii) the United States directory publishing industry
(so long as such Person and its Subsidiaries, taken as a whole, are
not disproportionately affected thereby).
“ NewCo
LLC ” has the meaning ascribed thereto in Section
7.7(b) .
“ Order
” means any order, injunction, rule, regulation, decree,
judgment, determination, arbitration award, legal restraint or
prohibition (whether temporary, preliminary or permanent) issued,
enacted, promulgated, entered or enforced by any Governmental
Entity.
“ Permitted
Lien ” means: (i) any Lien for current Taxes and
assessments not yet past due; (ii) any inchoate mechanics’
and materialmens’ Lien for construction in progress; (iii)
any workmen’s, repairmen’s, warehousemen’s or
carrier’s Lien arising in the ordinary course of business
consistent with past practice; (iv) any Lien or other imperfection
in title (including matters of record) that does not and would not
materially interfere with the conduct of the business of the party
in question or its Subsidiaries, taken as a whole, and would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Person in question; (v) zoning,
building codes and other land use Laws regulating the use or
occupancy of real property or the activities conducted thereon,
which are imposed by any governmental authority having jurisdiction
over such real property, which are not violated by the
9
current use or occupancy
of such real property or the operation of the business thereon; or
(vi) Liens pursuant to the Company’s existing Term Loan
Facility and Revolving Loan Facility entered into on June 13,
2003.
“ Person
” means an individual, a corporation, a partnership, a
limited liability company, an association, a joint stock company, a
business trust or an unincorporated organization.
“ Preclosing
Contribution ” has the meaning ascribed thereto in
Section 7.7(b) .
“
Reorganization ” means the transactions that occur
prior to the Closing Date by which the CBD Investor Stockholders
cease to hold an option over the Company Class B
Units.
“
Sarbanes-Oxley Act ” means the Sarbanes-Oxley Act of
2002.
“ SEC
” means the United States Securities and Exchange
Commission.
“ Securities
Act ” means the Securities Act of 1933, as
amended.
“ Special
Dividend ” means a distribution in the aggregate amount
of $82.0 million to be paid to the Contributors immediately prior
to the Closing of the transactions contemplated hereby.
“ Special
Dividend Financing ” means the debt financing incurred by
the Company and the Company Subsidiaries necessary to (i) fund the
payment of the Special Dividend, (ii) replace the Bank Debt, (iii)
replace the debt outstanding under the (a) Indenture with respect
to 9 ¼% Senior Notes due 2012 by and among Company, CBD
Holdings Finance, Inc. and HSBC Bank USA, National Association, as
trustee, dated October 26, 2004 and (b) Indenture with respect to 8
5/8% Senior Subordinated Notes due 2011 by and among CBD Media, CBD
Finance, Inc. and HSBC Bank USA, as trustee, dated June 13,
2003.and (iv) provide for the ongoing working capital needs of the
Company and the Company Subsidiaries following the Closing, all as
directed by and on terms and conditions satisfactory to Local
Insight.
“
Subsidiary ,” means, with respect to any Person, any
corporation, limited liability company, partnership, association or
other business entity of which (i) if a corporation, a majority of
the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a limited liability company, partnership, association or
other business entity, a majority of the partnership or other
similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For
purposes hereof, a Person or Persons shall be deemed to have a
majority ownership interest in a limited liability company,
partnership, association or other business entity if such Person or
Persons shall be allocated a majority of limited liability company,
partnership, association or other business entity gains or losses
or shall be or control any managing director or general partner of
such limited liability company, partnership, association or other
business entity.
10
“ Tax
” means any federal, state, local and foreign income, excise,
gross receipts, gross income, ad valorem, profits, gains, real
property, personal property, capital, sales, transfer, use,
payroll, employment, severance, withholding, occupancy, stamp,
duties, intangibles, franchise, customs backup withholding or other
tax, charge, impost, levy or like assessment of any nature,
together with any penalty or addition to tax or interest
thereon.
“ Tax
Return ” means any return, filing, report, questionnaire,
information statement or other document required to be filed,
including any amendments that may be filed, for any taxable period
with any Tax authority (including elections, declarations,
disclosures, schedules, estimates and information returns), whether
or not a payment is required to be made with respect to such
filing.
ARTICLE II.
CONTRIBUTION AND ISSUANCE OF LOCAL INSIGHT MEMBERSHIP
INTERESTS
2.1
Contribution and
Consideration
. At the Closing:
(a) each of the CBD Investor
Stockholder s
hereby agrees to contribute, convey, assign, transfer and deliver
to Local Insight, and Local Insight hereby agrees to accept and
receive from each CBD Investor
Stockholder , all
of such CBD Investor
Stockholder ’s right, title and interest
in and to the CBD Investor Securities set forth opposite
such CBD Investor
Stockholder ’s name on
Schedule 2.1 , (b) CBIH hereby agrees to contribute,
convey, assign, transfer and deliver to Local Insight, and Local
Insight hereby agrees to accept and receive from CBIH all of
CBIH’s right, title and interest in and to the Company Class
A Units and Company Class B Units set forth opposite such
Contributor’s name on Schedule 2.1 , and (c) each
Class C Holder agrees to contribute, convey, assign, transfer and
deliver to Local Insight, and Local Insight hereby agrees to accept
and receive from such Class C Holders all of such Class C
Holder’s right, title and interest in and to the Company
Class C Units set forth opposite such Class C Holder’s name
on Schedule 2.1 . For purposes of the contribution
contemplated by this Section 2.1 if the Pre-Closing
Contribution described in Section 7.7 occurs, (X) CBIH shall
be deemed to have contributed its Company Class A Units and Company
Class B Units and (Y) the Class C Holders shall be deemed to have
contributed their Company Class C Units, in each case upon transfer
of the membership interests such party received in Newco LLC in the
Pre-Closing Contribution. Provided such CBD Investor
Securities, Company Class A Units, Company Class B Units and
Company Class C Units are so contributed to Local Insight, Local
Insight hereby agrees, at the Closing, to issue and deliver to:
(A) each CBD Investor
Stockholder , in
exchange for all of its CBD Investor Securities, (B) CBIH in
exchange for all of its Company Class A Units and Company
Class B Units and (C) each Class C
Holder , in
exchange for all of such Class C Holder’s Company Class C
Units the Local Insight Membership Interest Percentage set forth
opposite such CBD Investor
Stockholder ’s, CBIH’s or
such Class C
Holder’s name as applicable on Schedule
2.1 . The Local Insight Membership Interest Percentage
delivered pursuant to this Section 2.1 upon contribution of
CBD Investor Securities, the Company Class A Units, the Company
Class B Units and Company Class C Units will be deemed to have been
issued in full satisfaction of all rights pertaining to the CBD
Investor Securities, Company Class A Units, Company Class B Units
and Company Class C Units.
2.2
Limited Liability Company Agreement of
Local Insight. At the
Closing, the Local Insight LLC Agreement will be amended and
restated in the form attached hereto as Exhibit 2.2.
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2.3
Directors and
Executive Officers of Local Insight
(a)
Immediately following
the Closing, the Board of Directors of Local Insight will be
composed of the individuals set forth in Exhibit 2.3(a) ,
each of whom will serve until the earlier of his or her resignation
or removal and until his or her or successor is duly elected and
qualified.
(b)
Immediately following
the Closing, the officers of Local Insight will be as set forth in
Exhibit 2.3(b) , each of whom will serve until the earlier
of his or her resignation or removal and until his or her or
successor is duly elected and qualified.
2.4
Reporting
. The parties
hereto shall treat the contribution of the CBD Investor Securities,
Company Class A Units, Company Class B Units and Company
Class C Units to Local Insight as an exchange for the Local
Insight Percentage Interest under Section 721 of the
Code.
2.5
Subsequent
Transaction
. Immediately
following the transactions described in Section 2.1 of this
Agreement, Local Insight shall contribute all of the Class A
Company Units, Class B Company Units and Class C Company Units that
it received pursuant to Section 2.1 to CBD Investor.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY AND CBD
INVESTOR
The CBD Investor
Stockholders and CBIH, jointly and severally, represent and warrant
to Local Insight with respect to the Company and the Company
Subsidiaries as follows and the CBD Investor Stockholders, jointly
and severally, represent and warrant to Local Insight with respect
to CBD Investor as follows; provided that the disclosures set forth
in the Forms 10-K, Forms 10-Q and Forms 8-K (including all exhibits
thereto) filed with the SEC by CBD Media LLC and CBD Media Holdings
LLC during the period from and after October 1, 2005 through the
date hereof (collectively the “ Forms ”), shall
qualify each representation and warranty to the extent that it is
readily apparent on the face of the disclosure in the Forms that
such matters should be excepted from such representation or
warranty contained in this Agreement:
3.1
Organization
(a)
The Company is a
limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware. CBD
Investor is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of
Delaware.
(b)
The Company: (i) has
all requisite power and authority to own, lease, license and
operate its properties and assets and to carry on its business as
it is being conducted on the date hereof and (ii) is duly licensed
or qualified to do business in each jurisdiction in which the
nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes
such
12
licensing or
qualification necessary, except where the failure to be so licensed
or qualified would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.
(c)
True and complete
copies of the CBD Investor Charter, the Company LLC Agreement, the
Company Bylaws, and the Company Subsidiaries’ Governing
Documents have previously been made available to Local
Insight.
3.2
Capitalization;
Subsidiaries
(a)
Section
3.2(a) of the
Contributor Disclosure Schedule sets forth the authorized and
issued and outstanding capital stock of the Company as of the date
hereof. All the issued and outstanding Company Units: (i)
have been duly authorized and validly issued; (ii) are fully paid,
nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof; (iii) are owned,
beneficially and of record, by the Persons whose names and
addresses are set forth in Section 3.2(a) of the Contributor
Disclosure Schedule in the amounts described therein; and (iv) have
been offered, issued, sold and delivered by the Company in
compliance with applicable federal and state securities Laws; and
(v) are owned by CBIH, CBD Investor and the Class C Holders, free
and clear of any Liens, and free of any restriction on the right to
vote, sell or otherwise dispose of such Company Units (other than
restrictions under applicable securities Laws).
(b)
The Company does not
have and is not bound by any outstanding subscriptions, options,
warrants, calls, commitments, preemptive rights, redemption
obligations or agreements of any character calling for the
purchase, issuance or registration of any Company Units, any other
equity interests of the Company or any securities representing the
right to purchase, redeem or otherwise receive any Company Units or
other equity interests of the Company.
(c)
There is no Company
Voting Debt issued or outstanding.
(d)
Section
3.2(d) of the
Contributor Disclosure Schedule identifies each Company Subsidiary,
its jurisdiction of incorporation or formation, the total number of
outstanding and issued securities of each Company Subsidiary and
the percentage of each such Company Subsidiary’s capital
stock or other equity interests that are owned by the Company (or
its Subsidiary in case of an indirect ownership). Each Company
Subsidiary (i) is duly organized, validly existing and in good
standing under the laws of the state of its organization; (ii) has
all requisite power and authority to own, lease, license and
operate its properties and assets and to carry on its business as
it is being currently conducted on the date hereof; and (iii) is
duly licensed or qualified to do business in each jurisdiction in
which the nature of the business conducted by it or the character
or location of the properties and assets owned or leased by it
makes such licensing or qualification necessary, except for such
variances from the matters set forth in clauses (ii) and (iii) as
would not, individually or in the aggregate, have a Material
Adverse Effect on the Company.
(e)
Except as set forth on
the Contributor Disclosure Schedule, all the issued and outstanding
limited liability company interests, shares of capital stock or
other equity ownership interests of each Company Subsidiary: (i)
are owned by the Company, directly or indirectly, free and clear of
any
13
Liens, and free of any
restriction on the right to vote, sell or otherwise dispose of such
capital stock, limited liability company interests or other equity
ownership interest (other than restrictions under applicable
securities Laws); (ii) are duly authorized and validly issued;
(iii) are fully paid, nonassessable and free of preemptive rights,
with no personal liability attaching to the ownership thereof; and
(iv) have been offered, issued, sold and delivered by the Company
in compliance with applicable federal and state securities Laws.
No Company Subsidiary is bound by any outstanding
subscriptions, options, warrants, calls, commitments, preemptive
rights, redemption obligations or agreements of any character
calling for the purchase or issuance of any shares of capital
stock, limited liability company interests or any other equity
security of such Company Subsidiary or any securities representing
the right to purchase or otherwise receive any shares of capital
stock, limited liability company interests or any other equity
security of such Company Subsidiary. Except for the capital
stock, limited liability company interests or other equity
ownership interests of the Company Subsidiaries, the Company does
not beneficially own, directly or indirectly, any capital stock,
membership interest, partnership interest, joint venture interest
or other equity interest in any Person.
3.3
Authority; No
Violation
(a)
CBD Investor has full
corporate power and authority to execute, deliver and perform this
Agreement and each other agreement to be executed and delivered by
it at the Closing and to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance
of this Agreement and each other agreement to be executed and
delivered by each of the Company and CBD Investor, and the
consummation of the transactions contemplated hereby and thereby,
have been duly and validly authorized and approved by all necessary
actions on the part of such Person. No other corporate
proceedings on the part of CBD Investor or the Company are
necessary to approve or adopt this Agreement or to consummate the
transactions contemplated hereby.
(b)
This Agreement has been
duly and validly executed and delivered by CBD Investor and
(assuming due authorization, execution and delivery by the other
parties hereto) constitutes the valid and binding obligation of CBD
Investor, enforceable against it in accordance with its terms
(except as may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the rights of creditors
generally and the availability of equitable remedies). Each
other agreement to be executed and delivered by each of the Company
and CBD Investor, when duly executed and delivered by such Person,
will (assuming due authorization, execution and delivery by the
other parties hereto) constitute the valid and binding obligation
of such Person, enforceable against it in accordance with its terms
(except as may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the rights of creditors
generally and the availability of equitable remedies).
(c)
Neither the execution,
delivery and performance of this Agreement by CBD Investor nor the
consummation by such party of the transactions contemplated hereby,
nor compliance by CBD Investor with any of the terms or provisions
of this Agreement, will: (i) violate any provision of the CBD
Investor Governing Documents or the Company LLC Agreement or (ii)
assuming that the consents, approvals and filings referred to in
Section 3.4 are duly obtained and/or made, (A) violate any
Order or
14
any Law applicable to
CBD Investor, the Company or any Company Subsidiary or (B) violate,
conflict with, result in a breach of any provision of or the loss
of any benefit under, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right of termination or
cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the respective
properties or assets of CBD Investor, the Company, or any Company
Subsidiary under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease,
contract, agreement or other instrument or obligation to which CBD
Investor, the Company or any Company Subsidiary is a party, or by
which it or any of its properties or assets may be bound or
affected, except in the case of clause (ii), for such violations,
breaches, defaults, terminations, rights of termination or
cancellation, accelerations or Liens as would not, individually or
in the aggregate, have a Material Adverse Effect on CBD Investor or
the Company.
3.4
Consents and
Approvals
. Except for: (i)
any notices or filings under the HSR Act; (ii) such filings and
approvals as are required to be made or obtained under the
Securities Act or the securities or “Blue Sky” laws of
various states in connection with the issuance of Local Insight
Membership Interests pursuant to this Agreement; and (iii) the
consents or approvals listed in Section 3.4 of the
Contributor Disclosure Schedule, no consents or approvals of, or
filings or registrations with, any Governmental Entity or other
Person are necessary in connection with (A) the execution and
delivery by CBD Investor of this Agreement or (B) the consummation
of the transactions contemplated hereby.
3.5
Reports
. The Company and
each Company Subsidiary have timely filed all reports,
registrations, schedules, forms, statements and other documents,
together with any amendments required to be made with respect
thereto, that they were required to file since August 8, 2003 with:
(i) the SEC and (ii) any other Governmental Entity (other than any
Tax authority, which is covered by Section 3.10 ) and have
paid all fees and assessments due and payable in connection
therewith, except in each case under clause (ii) where the failure
to file such report, registration, schedule, form, statement or
other document, or to pay such fees and assessments, would not,
individually or in the aggregate, have a Material Adverse Effect on
the Company. No Company SEC Report, as of the date of such
Company SEC Report, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements made therein,
in light of the circumstances in which they were made, not
misleading. Since August 8, 2003, as of their respective
dates, all Company SEC Reports complied as to form in all material
respects with the applicable requirements of the Securities Act,
the Exchange Act, the Sarbanes-Oxley Act and the rules and
regulations thereunder with respect thereto. Based solely
upon the representations and warranties contained in this Agreement
and any exhibit, certificate or schedule furnished to Local Insight
pursuant hereto by the Contributors, including the Contributor
Disclosure Schedule, such representations and warranties, taken as
a whole, do not contain any untrue statement of a material fact, or
omit to state any material fact necessary to make the statements or
facts contained therein not materially misleading.
3.6
Financial
Statements
(a)
The Company has
previously made available to Local Insight copies of the Company
Audited Financial Statements and the Company Unaudited Financial
Statements. The
15
consolidated balance
sheets of the Company (including the related notes, where
applicable) included in the Company Financial Statements present
fairly in all material respects the consolidated financial position
of the Company and the Company Subsidiaries as of the dates
thereof, and the other financial statements included in the Company
Financial Statements (including the related notes, where
applicable) present fairly in all material respects the
consolidated results of the operations, cash flows and statements
of member’s capital (deficit) of the Company and the Company
Subsidiaries for the respective periods therein set forth, subject
in the case of the Company Unaudited Financial Statements to normal
year-end audit adjustments. Each of the Company Financial
Statements (including the related notes, where applicable) has been
prepared in accordance with GAAP consistently applied during the
periods involved, except, in each case, as indicated in such
statements or in the notes thereto.
(b)
CBD Investor does not
prepare any independent financial statements and any financial
statements for CBD Investor would consist only of a consolidation
of the financial statements of the Company and the Company
Subsidiaries based on its ownership of CBD Investor
Securities.
(c)
Neither CBD Investor,
the Company nor any Company Subsidiary has incurred any liability
of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether due or to become due and including any
off-balance sheet arrangements, loans, financings, Indebtedness,
make-whole or similar liabilities or obligations) that would be
required, in accordance with GAAP, to be disclosed in its balance
sheet (rather than the notes thereto), except, in the case of the
Company or any Company Subsidiary, for: (i) those liabilities that
are reflected on the face of the Company Latest Balance Sheet and
(ii) liabilities incurred in the ordinary course of business
consistent with past practice since the date of the Company Latest
Balance Sheet (none of which is a liability resulting from breach
of contract, breach of warranty, tort, infringement, violation of
law or environmental liability) .
3.7
Brokers’
Fees
. Neither CBD
Investor, the Company nor any Company Subsidiary, nor any of their
respective officers, directors or Affiliates has employed any
broker or finder, incurred or will incur any liability for any
broker’s fee, commission, finder’s fee or similar
payment in connection with the transactions contemplated by this
Agreement, other than Merrill Lynch & Co. (“ Company
Financial Advisor ”), which firm has been retained by the
Contributors pursuant to an engagement letter dated December 5,
2006.
3.8
Absence of Certain
Changes or Events
(a)
Other than as a result
of the consummation of the transactions contemplated by this
Agreement, since the date of the Company Latest Balance Sheet, no
event has occurred that has had, individually or in the aggregate,
a Material Adverse Effect on CBD Investor or the
Company.
(b)
Since the date of the
Company Latest Balance Sheet through the date hereof, the Company
and the Company Subsidiaries have carried on their respective
businesses in the ordinary and usual course substantially
consistent with past practice and have not taken any action or
failed to take any action that would have resulted in a breach of
Section 6.2 had such Section been in effect since the date
of the Company Latest Balance Sheet.
16
3.9
Legal
Proceedings
(a)
There is no Order or
Action pending or, to the Knowledge of the Contributors,
threatened, against CBD Investor, the Company or any Company
Subsidiary that questions the validity of this Agreement or which
seeks to enjoin or materially delay or impair the ability of the
Contributors or the Company to consummate the transactions
contemplated hereby.
(b)
There is no Order or
Action pending or, to the Knowledge of the Contributors,
threatened, to which the Company or any Company Subsidiary is a
party which: (i) solely with respect to Actions, involves a prayer
for relief in excess of $500,000 or (ii) individually or in the
aggregate, would have a Material Adverse Effect on the Company.
3.10
Taxes and Tax
Returns
. Except as would
not, individually or in the aggregate, have a Material Adverse
Effect on CBD Investor or the Company and except as set forth on
Section 3.10 of the Contributor Disclosure
Schedule:
(a)
Each of CBD Investor,
the Company and each Company Subsidiary have duly and timely filed
all Tax Returns required to be filed by it on or prior to the date
of this Agreement, taking into account any extensions of time
within which to file such Tax Returns, and have paid all Taxes
required to be paid by it, other than Taxes that are not yet due or
that are being contested in good faith in appropriate proceedings
and which are fully reflected on the Company Latest Balance Sheet
or the books and records of CBD Investor. All such Tax Returns are
true, accurate and complete in all material respects. There
are no Liens for Taxes on any assets of CBD Investor, the Company
or the Company Subsidiaries, other than Liens for Taxes that are
not yet due and payable which are fully reflected on the Company
Latest Balance Sheet or the books and records of CBD
Investor.
(b)
There are no
outstanding agreements with any Tax authority or waivers extending
the statute of limitations for any period with respect to any
material Tax to which CBD Investor, the Company or any Company
Subsidiary may be subject. No Tax audits, examinations or
administrative or judicial proceedings with respect to CBD
Investor, the Company or any Company Subsidiary are pending or
proposed in writing by any taxing authority. No deficiency for any
Tax has been asserted or assessed by any taxing authority against
CBD Investor, the Company or any Company Subsidiary, except for
deficiencies that have been fully paid or are being contested in
good faith in appropriate proceedings.
(c)
CBD Investor, the
Company and each Company Subsidiary have provided adequate reserves
in their financial statements for any Taxes that have not been paid
as of the dates of such financial statements. None of CBD
Investor, the Company, nore any Company Subsidiary has any
transferee liability.
(d)
None of CBD Investor,
the Company nor any Company Subsidiary is a party to or bound by
any Tax sharing, allocation or indemnification agreement or
arrangement.
(e)
None of CBD Investor,
the Company nor any Company Subsidiary has received written notice
from any Tax authority in a jurisdiction in which such entity does
not file a Tax Return that such entity is or may be subject to
taxation in that jurisdiction.
17
(f)
Except as set forth on
the Contributor Disclosure Schedule, none of CBD Investor, the
Company nor any Company Subsidiary will be required to include any
item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the
Closing Date (except consistent with its treatment of such items in
Tax Returns for prior periods) as a result of: (i) any change in
method of accounting; (ii) any written agreement with a Tax
authority relating to Taxes; (iii) any installment sale or open
transaction disposition or inter-company transaction made on or
prior to the Closing Date; or (iv) the completed contract method of
accounting or other method of accounting applicable to long-term
contracts (or any comparable provisions of state, local or foreign
law).
(g)
The Company and each
Company Subsidiary have withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or
owing to any employee, former employee, independent contractor,
creditor, stockholder, Affiliate, customer, supplier or other third
party.
(h)
Neither the Company nor
any of the Company Subsidiaries has at any time engaged in
any tax shelter, listed transaction or reportable transaction
within the meaning of Section 6011, Section 6111 or Section 6112 of
the Code and the Treasury Regulations thereunder, or in any
transaction that would be considered a tax shelter under comparable
provisions of state Tax law.
3.11
Employees
(a)
Section
3.11(a) of
the Contributor Disclosure Schedule identifies each Company
Employee, together with each such Employee’s title or job
position, compensation and employment status.
(b)
(A) The Company
and each Company Subsidiary: (i) since January 1, 2003 has been in
material compliance with all applicable Laws relating to the
employment of labor, including those related to wages, hours,
collective bargaining, occupational safety and health and the
payment and withholding of Taxes and other sums as required by the
appropriate Governmental Entity; (ii) have withheld and paid to the
appropriate Governmental Entity or are holding for payment not yet
due to such Governmental Entity all amounts required to be withheld
from the Company Employees; and (iii) are not liable for any
arrears of wages, Taxes, penalties or other sums for failure to
comply with any of the foregoing, (B) the Company and each Company
Subsidiary have paid in full to all Company Employees or adequately
accrued for in accordance with GAAP consistently applied all wages,
salaries, commissions, bonuses, benefits and other compensation due
to or on behalf of such Company Employees and there is no claim
with respect to the payment of wages, salary or overtime pay that
has been asserted or is now pending or threatened before any
Governmental Entity with respect to any persons currently or
formerly employed by the Company or any Company Subsidiary, (C)
neither the Company nor any Company Subsidiary is a party to, or
otherwise bound by, any consent decree with any Governmental Entity
relating to any Company Employee or the Company’s employment
practices, (D) there is no charge or proceeding with respect to a
violation of any occupational safety or health standards that has
been asserted or is now pending or, to the Knowledge of the
Contributors, threatened with respect to the Company or any Company
Subsidiary, and (E) there is no charge of discrimination in
employment or
18
employment practices,
for any reason, including, without limitation, age, gender, race,
religion or other legally protected category, which has been
asserted or is now pending or, to the Knowledge of the
Contributors, threatened before the United States Equal Employment
Opportunity Commission or any other Governmental Entity in any
jurisdiction in which the Company or any Company Subsidiary has
employed or employs any employee.
(c)
Neither the Company nor
any Company Subsidiary has engaged in, or is engaged in, any unfair
labor practice. No unfair labor practice compliant, grievance or
arbitration proceeding is pending or, to the Knowledge of the
Contributors, threatened against the Company or any Company
Subsidiary.
(d)
Neither the Company nor
any Company Subsidiary is a party to or otherwise bound by a
collective bargaining or other labor union contract. As of the date
hereof, there are not any organizational campaigns, petitions or
other activities or proceedings of any labor union to organize any
Company Employees. There is no labor strike, dispute, work slowdown
or stoppage or lock-out pending, or to the Knowledge of the
Contributors, threatened against the Company or any Company
Subsidiary.
3.12
Employee
Plans
(a)
Section
3.12(a) of
the Contributor Disclosure Schedule sets forth a true and complete
list of each Company Benefit Plan.
(b)
The Company has
previously provided to Local Insight true and complete copies of:
(i) each written Company Benefit Plan; (ii) the actuarial report
for each Company Benefit Plan (if applicable) for each of the last
three years; (iii) the most recent determination letter from the
IRS (if applicable) for each Company Benefit Plan; (iv) the current
summary plan description of each Company Benefit Plan that is
subject to ERISA; (v) a copy of the description of each Company
Benefit Plan not subject to ERISA that is currently provided to
participants in such plan; (vi) a summary of the material terms of
each unwritten Company Benefit Plan; and (vii) the annual report
for each Company Benefit Plan (if applicable) for each of the last
three years.
(c)
(i) Except as set forth
on the Contributor Disclosure Schedule, each Company Benefit Plan
has been maintained, funded and administered in compliance in all
material respects with its terms and applicable Law, including
ERISA and the Code; (ii) each Company Benefit Plan intended to be
“qualified” within the meaning of Section 401(a) of the
Code has received a favorable determination letter from the IRS,
and there are no circumstances that would reasonably be expected to
adversely affect the qualified status of any such Company Benefit
Plan, and each such Company Benefit Plan has been timely amended
for the legislation commonly known as “GUST” and
“EGTRRA” and has been submitted to the IRS for a
determination letter on the GUST legislation within the
applicable remedial amendment period; (iii) none of the Company,
any Company Subsidiary, or any other Company ERISA Affiliate
maintains, sponsors, contributes to, or has any current or
potential liability or obligation under (or with respect to) (A)
any “defined benefit plan” (as defined in Section 3(35)
of ERISA), (B) any “multiemployer plan” (as
defined in Section 3(37) of ERISA), (C) any benefit plan, program,
agreement, or arrangement that provides for post-retirement or
post-termination medical, life insurance or other
19
welfare-type benefits
other than as described in Section 3.12(d) of the
Contributor Disclosure Schedule, (D) any “multiple employer
welfare arrangement” as defined in Section 3(40) of ERISA, or
(E) “multiple employer plan” within the meaning of
Section 210 of ERISA or Section 413(c) of the Code; (iv) no
liability under Title IV of ERISA has been incurred by a Company
ERISA Affiliate that has not been satisfied in full, and no
condition exists that presents a risk to the Company, the Company
Subsidiaries or any other Company ERISA Affiliate of incurring a
liability thereunder; (v) none of the Company, any
Company Subsidiary or, to the Knowledge of the Contributors, any
other Person, including any fiduciary, has engaged in a transaction
or taken or failed to take any action in connection with which the
Company, the Company Subsidiaries or any Company Benefit Plan would
reasonably be expected to be subject to either a material civil
penalty assessed pursuant to Section 409 or 502(i) of ERISA or a
material Tax imposed pursuant to Section 4975 or 4976 of the Code;
(vi) there are no pending, or, to the Knowledge of the
Contributors, threatened or anticipated claims (other than routine
claims for benefits), audits, investigations, proceedings, or suits
by, on behalf of or against any of the Company Benefit Plans; (vii)
all payments, premiums, contributions, distributions,
reimbursements or other amounts required to be paid by the Company
or the Company Subsidiaries for all periods ending prior to or as
of the Closing Date with respect to each Company Benefit Plan have
been made or properly accrued; (viii) the Company, the
Company Subsidiaries and the other Company ERISA Affiliates have
complied and are in compliance in all material respects with COBRA;
(ix) the Company and the Company Subsidiaries have no current or
potential obligation or liability by reason of being treated as a
single employer under Section 414 of the Code with any Person other
than the Company and the Company Subsidiaries; (x) each Company
Benefit Plan that constitutes a nonqualified deferred compensation
plan for purposes of Section 409A of the Code has been operated in
good faith compliance with Section 409A of the Code and all
applicable IRS guidance thereunder; and (xi) the Company and the
Company Subsidiaries have, for purposes of each Company Benefit
Plan, correctly classified those individuals performing services
for the Company and the Company Subsidiaries as common law
employees, leased employees, independent contractors or
agents.
(d)
Except as described in
Section 3.12(d) of the Contributor Disclosure Schedule,
neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated by this Agreement
will (either alone or in conjunction with any other event): (i)
result in the Company or any of the Company Subsidiaries being
liable for any payment or benefit (including non-deductible
remuneration (as described in Section 162(m) of the Code)
severance, retention, stay-put, change of control, unemployment
compensation, “excess parachute payment” (within the
meaning of Section 280G of the Code), tax gross-up, forgiveness of
indebtedness or otherwise) becoming due to any Person from
the Company or any of the Company Subsidiaries under any Company
Benefit Plan or otherwise; (ii) increase any amounts or benefits
otherwise payable or due to any Person under any Company Benefit
Plan or otherwise; or (iii) result in any acceleration of the time
of payment or vesting of, or any requirement to fund or secure, any
amounts or benefits or result in any breach of or default under any
Company Benefit Plan.
3.13
Internal
Controls
. Except as
described in Section 3.13 of the Contributor Disclosure
Schedule, the Company and the Company Subsidiaries have designed
and maintained a system of internal controls over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the
Exchange Act) sufficient to provide reasonable assurances regarding
the reliability of financial reporting. The Company: (i) has
designed and
20
maintains disclosure
controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) of the Exchange Act) to ensure that material information
required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the
SEC’s rules and forms and is accumulated and communicated to
the Company’s management as appropriate to allow timely
decisions regarding required disclosure and (ii) has disclosed to
Local Insight, the Company’s auditors and the audit committee
of the Company’s board or directors (A) any significant
deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting that are reasonably
likely to adversely affect in any material respect the
Company’s ability to record, process, summarize and report
financial information and (B) any fraud, whether or not material,
that involves management or other Company Employees who have a
significant role in the Company’s internal controls over
financial reporting. Neither the Company nor any Company
Subsidiary has received any complaint, allegation, assertion or
claim in writing regarding the accounting practices, procedures,
methodologies or methods of the Company or any Company Subsidiary
or the internal accounting controls of any of them. Neither
the Company nor any Company Subsidiary has identified any
significant deficiency or material weaknesses in the design or
operation of internal controls over financial reporting.
3.14
Compliance with
Laws; Licenses
. Since January
1, 2003, the business of CBD Investor, the Company and each Company
Subsidiary has been conducted in compliance with all Laws, except
where the failure to so comply would not, individually or in the
aggregate, have a Material Adverse Effect on the Company.
Each of CBD Investor, the Company and each Company Subsidiary
is in possession of all Licenses necessary for it to own, lease and
operate its properties or to carry on its business as it is now and
as presently contemplated as being conducted, except where the
failure to have, or the suspension or cancellation of, any such
License would not, individually or in the aggregate, have a
Material Adverse Effect on CBD Investor or the Company. As of
the date of this Agreement, no suspension or cancellation of any
such License is pending or, to the Knowledge of the Contributors,
threatened, except where the failure to have, or the suspension or
cancellation of, any such License would not, individually or in the
aggregate, have a Material Adverse Effect on CBD Investor or the
Company. Neither CBD Investor, nor the Company nor any
Company Subsidiary is in conflict with, in default under, or breach
or violation of any such License, except for any such conflicts,
defaults, breaches or violations that would not, individually or in
the aggregate, have a Material Adverse Effect on the Company.
Since January 1, 2003, neither the Company nor any Company
Subsidiary has received any written notice from a Governmental
Authority that alleges that the Company or a Company Subsidiary is
not in compliance, except where the failure to comply would not,
individually or in the aggregate, have a Material Adverse Effect on
the Company.
3.15
Company Material
Contracts
(a)
Section
3.15(a) of
the Contributor Disclosure Schedule contains a list, as of the date
hereof, of each binding written or oral agreement, license,
arrangement, note, bond, mortgage, commitment, indemnity, indenture
or lease (each, a “ Company Material Contract ”)
to which Company or any Company Subsidiary is a party:
21
(i)
that involves payment
or other obligations due to be paid by or to the Company or by or
to any Company Subsidiary aggregating more than $500,000 in any
calendar year;
(ii)
that relates to the
lease of real property;
(iii)
that involves any
Intellectual Property (other than Excluded Software);
(iv)
that creates a
partnership, joint venture or limited liability company;
(v)
that involves any
capital expenditure or commitment with respect thereto in excess of
$500,000;
(vi)
that (A) creates,
incurs, assumes or guarantees any Indebtedness (other than pursuant
to lease obligations), (B) grants a Lien on its assets, whether
tangible or intangible, to secure such Indebtedness, or (C) extends
credit or advances funds to any Person (other than to customers of
Company or any Company Subsidiary in the ordinary course of
business), in each case, in excess of $500,000, individually or in
the aggregate;
(vii)
that materially limits
or restricts the ability of Company or any Company Subsidiary to
compete in, or otherwise to conduct its business;
(viii)
that involves the
purchase or sale of any business, corporation, partnership, joint
venture, association or other business organization or any
division, operating unit or product line thereof or any other
material assets;
(ix)
that involves any
guarantee, indemnification obligation or similar commitment with
respect to the obligations or liabilities of any other Person, in
an aggregate amount in excess of $500,000;
(x)
that relates to
management services or to the employment of any officer, employee
or other Person on a full-time or consulting basis;
(xi)
that provides for
severance, termination or employment or similar payments, including
upon a change of control of the Company or any Company
Subsidiary;
(xii)
that is between Company
or any Company Subsidiary (on the one hand) and any holder of
Company Units;
(xiii)
that is relating to the
mortgaging or pledging any material property or group of material
properties of the Company and any of the Company
Subsidiaries;
(xiv)
that involves that
leasing, holding or operating of any personal property;
22
(xv)
that is between the
Company or any of the Company Subsidiaries and any agent and sales
representative or that is relating to the marketing, printing,
publishing or advertising of the Company’s or any of the
Company Subsidiaries’ products or services;
(xvi)
that creates a power of
attorney or other similar grant of agency;
(xvii)
that involves a
settlement pursuant to which the Company or any of the Company
Subsidiaries will be required to pay, as of or after the date of
this Agreement, consideration in excess of $500,000; or
(xviii)
that is a
“material contract” (as such term is defined in Item
601(b)(10) of SEC Regulation S-K).
(b)
True and complete
copies of all Company Material Contracts, including all amendments,
extension, renewals, guaranties waivers and modifications thereto
(and, in the case of any oral leases, a written summary of the
material terms of such lease), have been made available to Local
Insight.
(c)
(i) Each Company
Material Contract is valid and binding on, and enforceable by, the
Company or the relevant Company Subsidiary, as applicable, and is
in full force and effect; (ii) the Company and each Company
Subsidiary has performed all material obligations required to be
performed by it to date under each Company Material Contract; (iii)
neither the Company nor any Company Subsidiary has received written
notice of, any breach or violation of, or default under, any
Company Material Contract; (iv) no event or condition exists that
constitutes or, after notice or lapse of time or both, will
constitute, a material default on the part of the Company or any
Company Subsidiary under any Company Material Contract; (v) to the
Knowledge of the Contributors, no other party to any Company
Material Contract is in material breach or default thereunder; and
(vi) none of the Company Material Contracts will terminate or
be rescinded, or give rise to such right, or cease to be valid and
enforceable agreements of the Company or a Company Subsidiary, as
applicable, by reason of the execution, delivery and performance of
this Agreement or by any ancillary agreements executed in
connection with this Agreement or the consummation of the
transactions contemplated hereby or thereby.
(d)
CBD Investor is not a
party to any binding written or oral agreement, license,
arrangement, note, bond, mortgage, commitment, indemnity, indenture
or lease other than as described in Section 3.15(d) of the
Contribution Disclosure Schedule.
3.16
Agreements with
Governmental Agencies
. Neither the
Company nor any Company Subsidiary is subject to any material
cease-and-desist or other material order or enforcement action
issued by, or is a party to any material written agreement, consent
agreement or memorandum of understanding with, or is a party to any
material commitment letter or similar undertaking to, or is subject
to any material order or directive by, or has been ordered to pay
any material civil money penalty by, any Governmental Entity (other
than a Tax authority, which is covered by Section 3.10 )
(each item in this sentence, whether or not set forth in the
Contributor Disclosure Schedule, being referred to as a “
Company Regulatory Agreement ”), nor has the Company
or
23
any Company Subsidiary
been advised in writing since January 1, 2005 by any Governmental
Entity that it is considering issuing, initiating, ordering or
requesting any Company Regulatory Agreement.
3.17
Environmental
Liability
. The Company and
the Company Subsidiaries have complied and are in compliance in all
material respects with all Environmental Laws, including without
limitation all Licenses required under Environmental Law.
Neither the Company nor any Company Subsidiary is subject to
or has received any written notice of any pending or threatened
Action, Order or other claim regarding any material violation of or
material liabilities arising under any Environmental Laws.
Neither the Company nor any Company Subsidiary has treated,
stored, disposed of, arranged for or permitted the disposal of,
transported, handled, released or exposed any person to any
substance, including without limitation any hazardous substance, as
would give rise to material liabilities or obligations pursuant to
CERCLA or any other Environmental Laws. The Company has
provided Local Insight with all environmental reports and other
material environmental documents that are in its possession or
reasonable control.
3.18
Real
Property
(a)
Neither the Company nor
any Company Subsidiary owns any real property.
(b)
Section
3.18(b) of
the Contributor Disclosure Schedule lists by address each parcel of
Company Leased Property and any guaranty given by the Company or
any Company Subsidiary in connection therewith. The Company or one
of the Company Subsidiaries has a valid leasehold interest in each
of the Company Leased Properties, free and clear of all Liens
(other than Permitted Liens). The Company or one of the Company
Subsidiaries has the right to the use and occupancy of the Company
Leased Properties, subject to: (i) the terms of the applicable
leases and subleases relating thereto and (ii) Permitted Liens.
The Company’s or Company Subsidiary’s possession
and quiet enjoyment of the Company Leased Property has not been
disturbed and to the Contributor’s Knowledge, there are no
disputes with respect to such Company Leased Property. No
security deposit or portion thereof deposited with respect to such
Company Leased Property has been applied in respect of a breach or
default under any lease which has not been redeposited in full.
The other party to any lease for such Company Leased Property
is not an affiliate of, and otherwise does not have any economic
interest in, the Company or any Company Subsidiary. Neither
the Company nor any of the Company Subsidiaries has subleased,
licensed, mortgaged or otherwise granted any Person the right to
use or occupy such Company Leased Property or any portion thereof.
The Company Leased Property comprise all of the real property
used or intended to be used in, or otherwise related to, the
business of the Company or the Company Subsidiaries.
3.19
Personal
Property
. Except as would
not, individually or in the aggregate, have a Material Adverse
Effect on the Company, the Company or one of the Company
Subsidiaries has good and marketable title to, or a valid leasehold
interest in, each item of tangible personal property that is used,
directly or indirectly, in connection with the conduct of the
business of the Company and the Company Subsidiaries, free and
clear of all Liens (other than Permitted Liens).
24
3.20
Company Intellectual
Property
(a)
Section
3.20(a) of
the Contributor Disclosure Schedule lists all Company Intellectual
Property owned by the Company or any Company Subsidiary that is the
subject of any issuance, registration, or application for
registration or patent with any Governmental Entity. The
Company Intellectual Property and the Company-Licensed Third Party
Intellectual Property constitutes all Intellectual Property
necessary for or used in the operation of the business of the
Company and the Company Subsidiaries. Except as disclosed in
Section 3.20(a) of the Contributor Disclosure Schedule, with
respect to each item of Company Intellectual Property: the Company
or a Company Subsidiary is the sole owner thereof and possesses all
right, title and interest in and to such item of Company
Intellectual Property, free and clear of any Liens other than
Permitted Liens. To the Knowledge of the Contributors, the
Company Intellectual Property set forth on Section 3.20(a)
of the Contributor Disclosure Schedule is valid, subsisting and
enforceable. The Company has taken all actions necessary or
commercially reasonable to maintain and protect the material
Company Intellectual Property owned by the Company or any Company
Subsidiary.
(b)
Except as disclosed in
Section 3.20(b) of the Contributor Disclosure Schedule, (i)
there are no Actions against the Company or a Company Subsidiary
that were made in the last six (6) years or are presently pending
challenging the validity, enforceability, use or ownership of, or
the right to register, any item of Intellectual Property owned by
the Company, or to the Knowledge of the Company, licensed to the
Company or the Company Subsidiaries and, to the Knowledge of the
Contributors, there is no reasonable basis for the foregoing, and
(ii) to the Knowledge of the Contributors, neither the Company nor
any Company Subsidiary, or their use of the Company Intellectual
Property, is infringing or misappropriating any Intellectual
Property rights of any third party in connection with the operation
of the business of the Company and the Company Subsidiaries. Except
as disclosed in Section 3.20(b) of the Contributor
Disclosure Schedule, neither the Company nor any Company Subsidiary
has received any written charge, complaint, claim, demand or notice
during the past six (6) years (or earlier, if not resolved)
alleging any such infringement or misappropriation. To the
Knowledge of the Contributors, except as disclosed in Section
3.20(b) of the Contributor Disclosure Schedule, during the past
six (6) years (or earlier, if not resolved) no third party has
infringed upon or misappropriated any Company Intellectual Property
rights. All of the Company Intellectual Property and the
Company Systems shall be owned or available for use by the Company
immediately after the Closing on terms and conditions substantially
similar to those under which the Company owned or used the Company
Intellectual Property and the Company Systems immediately prior to
the Closing. The Company Intellectual Property is not subject
to any outstanding Order restricting the use thereof.
(c)
Section
3.20(c) of
the Contributor Disclosure Schedule lists all Company-Licensed
Third Party Intellectual Property, other than Excluded Software
licensed by the Company or a Company Subsidiary, and the Company
and the Company Subsidiaries have valid and enforceable rights or
licenses to use all of the Company-Licensed Third Party
Intellectual Property listed thereon. To the Knowledge of the
Contributors, the owners of the Company-Licensed Third Party
Intellectual Property have taken all actions necessary or
commercially reasonable to maintain and protect the
Company-Licensed Third Party Intellectual Property.
25
(d)
The Company or a
Company Subsidiary owns all Intellectual Property created by any
current or former employee or independent contract of the Company
or a Company Subsidiary in the course of his or her engagement with
the Company or the Company Subsidiary, as applicable.
(e)
The computer systems,
including the software, firmware, hardware, networks, and
interfaces owned by or used in the operation of the business of the
Company and the Company Subsidiaries (collectively, “
Company Systems ”) are sufficient for the immediate
needs of the Company and the Company Subsidiaries. In the
last twelve (12) months, the Company Systems have not experienced
any material disruption, interruption or outage.
(f)
The Company’s and
each Company Subsidiary’s collection, use, dissemination and
transfer of any data and other information concerning customers,
including users of their web sites, is in material compliance with
all applicable privacy policies, terms of use and Laws. The
transactions contemplated hereby will not violate any privacy
policy, terms of use or Laws concerning the collection, use,
dissemination or transfer of such data or other
information.
3.21
Insurance
.
Section 3.21 of the Contributor Disclosure Schedule
contains a list of all policies of fire, liability, workers’
compensation, property, casualty and other forms of insurance owned
or held by the Company or any of the Company Subsidiaries as of the
date of this Agreement, the premium payable with respect to each
such policy, the name of the insurer for each such policy, and each
such policy’s termination date. All such policies are
in full force and effect, all premiums with respect thereto
covering all periods up to and including the Closing will have been
paid, and no notice of cancellation or termination has been
received by the Company or any Company Subsidiary (as applicable)
with respect to any such policy.
3.22
Corporate
Records
. The corporate
minute books of the Company and the Company Subsidiaries contain
minutes of all meetings and resolutions of the directors and
shareholders held, except for those minutes, which are not yet
finalized. Local Insight has been provided with complete and
correct copies of the minutes of all such meetings (or, in the case
of minutes that have not been finalized, drafts
thereof).
3.23
Affiliate
Transactions
. There are no
transactions, contracts, arrangements, commitments or
understandings between the Company or any Company Subsidiary, on
the one hand, and any of the Company’s or the
Contributor’s Affiliates (other than wholly owned Company
Subsidiaries), on the other hand, that would be required to be
disclosed by the Company under Item 404 of Regulation S-K under the
Securities Act (“ Company S-K 404 Arrangements
”).
3.24
Anti-Corruption
Laws
. Neither Company
or any Company Subsidiary or any representative of the Company or
Company Subsidiary has corruptly or illegally offered or given,
and, to the Knowledge of Contributors, no Person has otherwise
corruptly or illegally offered or given on behalf of Company or
Company Subsidiary, anything of value to: (i) any
official of a Governmental Authority, any political party or
official thereof, or any candidate for political office;
(ii) any member of any Governmental Authority; or
(iii) any other Person, in any such case while knowing, or
having reason to know, that all or a portion of such money or thing
of value may be offered, given or promised, directly or indirectly,
to any official or
26
employee of a
Governmental Authority or candidate for political office for the
purpose of the following: (x) influencing any action or
decision of such Person, in his or her official capacity, including
a decision to fail to perform his or her official function;
(y) inducing such Person to use his or her influence with any
Governmental Authority to affect or influence any act or decision
of such Governmental Authority to assist the Company or a Company
Subsidiary in obtaining or retaining business for, or with, any
Governmental Authority; or (z) where such payment would
constitute a bribe, kickback or
