TABLE OF CONTENTS

 

ARTICLE I	INTERPRETATION	2
1.01.	Definitions	2
1.02.	Schedules	19
1.03.	Effective Time; Suspension	20
ARTICLE II	THE SEPARATION	20
2.01.	Separation	20
2.02.	Implementation	21
2.03.	Transfer of Spun Assets; Assumption of Spun Liabilities	21
2.04.	TM Assets	21
2.05.	Interval Assets	22
2.06.	HSN Assets	23
2.07.	Tree Assets	24
2.08.	Deferred Spun Assets	25
2.09.	Excluded Assets	25
2.10.	Liabilities	25
2.11.	Third Party Consents and Government Approvals	27
2.12.	Preservation of Agreements	27
2.13.	Ancillary Agreements	27
2.14.	Resignations	28
2.15.	Cooperation	28
2.16.	Intercompany Accounts Among Groups	28
2.17.	Disclaimer of Representations and Warranties	28
ARTICLE III	DEFERRED SEPARATION TRANSACTIONS	29
3.01.	Deferred Transfer Assets	29
3.02.	Unreleased Liabilities	30
3.03.	No Additional Consideration	30
ARTICLE IV	COVENANTS	31
4.01.	General Covenants	31
4.02.	Covenants of the Spincos	31
4.03.	Spinco Common Stock Escrow Accounts	32
4.04.	Cash Balance True-Ups	33
4.05.	Non-Solicitation	34
ARTICLE V	THE DISTRIBUTION	35
5.01.	Conditions to the Distribution	35
5.02.	Distribution of Spinco Common Stock	36
5.03.	Fractional Shares	37
5.04.	Actions in Connection with the Distributions	37
5.05.	Treatment of Integrated Warrant	38

 

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ARTICLE VI	MUTUAL RELEASES; INDEMNIFICATION	39
6.01.	Release of Pre-Distribution Claims	39
6.02.	Indemnification by Spincos	43
6.03.	Indemnification by IAC	44
6.04.	Procedures for Indemnification of Third Party Claims	44
6.05.	Procedures for Indemnification of Direct Claims	46
6.06.	Adjustments to Liabilities	46
6.07.	Payments	47
6.08.	Contribution	47
6.09.	Remedies Cumulative	47
6.10.	Survival of Indemnities	47
6.11.	Shared Liabilities	47
ARTICLE VII	INSURANCE	48
7.01.	Insurance Matters	48
ARTICLE VIII	EXCHANGE OF INFORMATION; CONFIDENTIALITY	49
8.01.	Agreement for Exchange of Information; Archives	49
8.02.	Ownership of Information	50
8.03.	Compensation for Providing Information	51
8.04.	Record Retention	51
8.05.	Other Agreements Providing for Exchange of Information	51
8.06.	Production of Witnesses; Records; Cooperation	51
8.07.	Confidentiality	52
8.08.	Protective Arrangements	53
8.09.	Disclosure of Third Party Information	53
ARTICLE IX	DISPUTE RESOLUTION	54
9.01.	Interpretation; Agreement to Resolve Disputes	54
9.02.	Dispute Resolution; Mediation	54
9.03.	Arbitration	55
9.04.	Costs	56
9.05.	Continuity of Service and Performance	56
ARTICLE X	FURTHER ASSURANCES	56
10.01.	Further Assurances	56
ARTICLE XI	CERTAIN OTHER MATTERS	57
11.01.	Auditors and Audits; Annual and Quarterly Financial Statements and Accounting	57
ARTICLE XII	SOLE DISCRETION OF IAC; TERMINATION	59
12.01.	Sole Discretion of IAC	59
12.02.	Termination	59
ARTICLE XIII	MISCELLANEOUS	60
13.01.	Limitation of Liability	60

 

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13.02.	Counterparts	60
13.03.	Entire Agreement	60
13.04.	Construction	60
13.05.	Signatures	61
13.06.	Assignability	61
13.07.	Third Party Beneficiaries	61
13.08.	Payment Terms	62
13.09.	Governing Law	62
13.10.	Notices	62
13.11.	Severability	63
13.12.	Publicity	64
13.13.	Survival of Covenants	64
13.14.	Waivers of Default; Conflicts	64
13.15.	Amendments	64

 

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SEPARATION AND DISTRIBUTION AGREEMENT

 

This SEPARATION AND DISTRIBUTION AGREEMENT, dated as of [      ], 2008, is entered into by and among IAC/InterActiveCorp, a Delaware corporation (“ IAC ”), HSN, Inc., a Delaware corporation and wholly owned subsidiary of IAC (“ HSN Spinco ”), Interval Leisure Group, Inc., a Delaware corporation and wholly owned subsidiary of IAC (“ Interval Spinco ”), Ticketmaster, a Delaware corporation and wholly owned subsidiary of IAC (“ TM Spinco ”), and Tree.com, Inc., a Delaware corporation and wholly owned subsidiary of IAC (“ Tree Spinco ”; together with TM Spinco, Interval Spinco and HSN Spinco, the “ Spincos ”; the Spincos and IAC, collectively, the “ Separate-cos ” or “ Parties ”).

 

RECITALS:

 

WHEREAS, IAC, acting through its direct and indirect Subsidiaries, currently conducts a number of businesses, including (i) the Ticketing Business (as defined herein), (ii) the Vacations Business (as defined herein), (iii) the Retailing Business (as defined herein), (iv) the Lending and Real Estate Business (as defined herein) (together with the Ticketing Business, the Vacations Business and the Retailing Business, the “ Spun Businesses ”) and (v) the Remaining Business (as defined herein);

 

WHEREAS, the Board of Directors of IAC (the “ IAC Board ”) has determined that it is appropriate, desirable and in the best interests of IAC and its stockholders to separate IAC into five publicly-traded companies (the “ Separation ”): (i) TM Spinco, which following the Separation will own and conduct, directly or indirectly, the Ticketing Business, (ii) Interval Spinco, which following the Separation will own and conduct, directly or indirectly, the Vacations Business, (iii) HSN Spinco, which following the Separation will own and conduct, directly or indirectly, the Retailing Business, (iv) Tree Spinco, which following the Separation will own and conduct, directly or indirectly, the Lending and Real Estate Business, and (v) IAC, which following the Separation will own and conduct, directly or indirectly, the Remaining Business;

 

WHEREAS, following the merger on                  , 2008 of a wholly owned subsidiary of IAC with and into IAC, the outstanding shares of capital stock of IAC consist solely of common stock, par value $0.001 per share, of IAC (“ IAC Common Stock ”) and Class B common stock, par value $0.001 per share, of IAC (“ IAC Class B Common Stock ”);

 

WHEREAS, in order to effect the Separation, the IAC Board has determined that it is appropriate, desirable and in the best interests of IAC and its stockholders: (i) for IAC and its Subsidiaries to enter into a series of transactions as set forth in the Transactions Memorandum dated of even date herewith (the “ Transactions Memo ”) as a result of which one or more members of each Group (as defined herein) will, collectively, own all of such Group’s Corresponding Assets (as defined herein) and assume (or retain) all of such Group’s Corresponding Liabilities (as defined herein); and, thereafter (ii) for IAC to distribute to the holders of IAC Common Stock and the holders of IAC Class B Common Stock (in each case without consideration being paid by such stockholders), on a pro rata basis, all of the issued and

 

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outstanding shares of Spinco Common Stock (as defined herein) of each Spinco;

 

WHEREAS, each of the Separate-cos has determined that it is necessary and desirable, on or prior to the Effective Time (as defined herein), to allocate and transfer to the applicable Group those Assets, and to allocate and assign to the applicable Group responsibility for those Liabilities, in respect of the activities of the Corresponding Businesses (as defined herein) of such Group;

 

WHEREAS, it is the intention of the Parties that each of the Distributions (as defined herein) qualify as a transaction that is generally tax free for United States federal income tax purposes under Sections 355 and/or 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the “ Code ”);

 

WHEREAS, in connection with the Distributions, each of HSN Spinco and/or its Subsidiaries, Interval Spinco and/or its Subsidiaries and TM Spinco and/or its Subsidiaries will, subject to the terms and provisions of this Agreement, enter into separate credit facilities and/or issue new debt securities, all or a portion of the cash proceeds of borrowings under which shall be distributed to IAC;

 

WHEREAS, (a) IAC has entered into an agreement with certain holders of its 7% Senior Notes due 2013 (the “ IAC Notes ”) providing for, among other things, (i) IAC to exchange (the “ Exchange ”) new 9.5% Senior Notes due 2016 of Interval Acquisition Corp. (as defined herein) that it will receive from Interval Acquisition Corp. as set forth in the Transactions Memorandum (the “ Interval Senior Notes ”) and (ii) the simultaneous closing of the Exchange and the cash tender offer being made by IAC for any and all of the outstanding IAC Notes (the “ IAC Notes Tender Offer ”) and (b) it is intended that the issuance of the Interval Senior Notes to IAC and the Exchange, together with the IAC Notes Tender Offer, are in connection with the Interval Distribution and are intended to give rise to a succession event (with Interval as the sole successor to IAC) for credit derivatives purposes; and

 

WHEREAS, the Parties wish to set forth in this Agreement the terms on which, and the conditions subject to which, they intend to implement the measures described above.

 

NOW THEREFORE, in consideration of the mutual agreements, covenants and other provisions set forth in this Agreement, the Parties hereby agree as follows:

 

ARTICLE I
INTERPRETATION

 

1.01.        Definitions .  The capitalized words and expressions and variations thereof used in this Agreement or in its schedules, unless a clearly inconsistent meaning is required under the context, shall have the meanings set forth below:

 

“ 2008 Internal Control Audit and Management Assessments ” has the meaning set forth in Section 11.01(b).

 

“ AAA ” has the meaning set forth in Section 9.03.

 

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“ Accounts Receivable ” means in respect of any Person, (a) all trade accounts and notes receivable and other rights to payment from customers and all security for such accounts or rights to payment, including all trade accounts receivable representing amounts receivable in respect of goods shipped or products sold or otherwise disposed of or services rendered to customers, (b) all other accounts and notes receivable and all security for such accounts or notes, and (c) any claim, remedy or other right relating to any of the foregoing.

 

“ Action ” means any demand, action, suit, countersuit, arbitration, inquiry, proceeding or investigation by any Person or any Governmental Authority or before any Governmental Authority or any arbitration or mediation tribunal.

 

“ Affiliate ” of any Person means any other Person that, directly or indirectly, controls, is controlled by, or is under common control with such first Person as of the date on which or at any time during the period for when such determination is being made.  For purposes of this definition, “ Control ” means 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 or other interests, by contract or otherwise, and the terms “ Controlling ” and “ Controlled ” have meanings correlative to the foregoing.

 

“ Agent ” has the meaning set forth in Section 5.02(b).

 

“ Agreement ” means this Separation and Distribution Agreement, including all of the Schedules hereto.

 

“ Ancillary Agreements ” has the meaning set forth in Section 2.13.

 

“ Applicable Law ” means any applicable law, statute, rule or regulation of any Governmental Authority or any outstanding order, judgment, injunction, ruling or decree by any Governmental Authority.

 

“ Appurtenances ” means, in respect of any Land, all privileges, rights, easements, servitudes, hereditaments and appurtenances and similar interests belonging to or for the benefit of such Land, including all easements and servitudes appurtenant to and for the benefit of any Land (a “ Dominant Parcel ”) for, and as the primary means of, access between, the Dominant Parcel and a public way, or for any other use upon which lawful use of the Dominant Parcel for the purposes for which it is presently being used is dependent, and all rights existing in and to any streets, alleys, passages and other rights-of-way included therein or adjacent thereto.

 

“ Asset-Related Claims ” means, in respect of any Asset, all claims of the owner against Third Parties relating to such Asset, whether choate or inchoate, known or unknown, absolute or contingent, disclosed or non-disclosed.

 

“ Assets ” means assets, properties and rights (including goodwill), wherever located (including in the possession of owners or Third Parties or elsewhere), whether real, personal or mixed, tangible or intangible, movable or immovable, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of a Person, including the following:

 

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(a)           Real Property;

 

(b)           Tangible Personal Property;

 

(c)           Inventories;

 

(d)           Accounts Receivable;

 

(e)           Contractual Assets;

 

(f)            Governmental Authorizations;

 

(g)           Business Records;

 

(h)           Intangible Property Rights;

 

(i)            Insurance Benefits;

 

(j)            Asset-Related Claims; and

 

(k)           Deposit Rights.

 

“ Authorized Auditor ” has the meaning set forth in Section 11.01(c)(i).

 

“ Authorizing Spinco ” has the meaning set forth in Section 11.01(c)(i).

 

“ Business Concern ” means any corporation, company, limited liability company, partnership, joint venture, trust, unincorporated association or any other form of association.

 

“ Business Day ” means any day excluding (a) Saturday, Sunday and any other day which, in New York City is a legal holiday or (b) a day on which banks are authorized by Applicable Law to close in New York City.

 

“ Business Records ” means, in respect of any Person, all data and Records relating to such Person, including client and customer lists and Records, referral sources, research and development reports and Records, cost information, sales and pricing data, customer prospect lists, customer and vendor data, production reports and Records, service and warranty Records, equipment logs, operating guides and manuals, financial and accounting Records, personnel Records (subject to Applicable Law), creative materials, advertising materials, promotional materials, studies, reports, correspondence and other similar documents and records.

 

“ Claim Notice ” has the meaning set forth in Section 6.04(b).

 

“ Claimant Party ” has the meaning set forth in Section 9.02(a).

 

“ Code ” has the meaning set forth in the recitals hereto.

 

“ Confidential Information ” has the meaning set forth in Section 8.07(a).

 

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“ Consent ” means any approval, consent, ratification, waiver or other authorization.

 

“ Contract ” means any contract, agreement, lease, purchase and/or commitment, license, consensual obligation, promise or undertaking (whether written or oral and whether express or implied) that is legally binding on any Person or any part of its property under Applicable Law, including all claims or rights against any Person, choses in action and similar rights, whether accrued or contingent with respect to any such contract, agreement, lease, purchase and/or commitment, license, consensual obligation, promise or undertaking, but excluding this Agreement and any Ancillary Agreement save as otherwise expressly provided in this Agreement or in any Ancillary Agreement.

 

“ Contractual Asset ” means, in respect of any Person, any Contract of, or relating to, such Person, any outstanding offer or solicitation made by, or to, such Person to enter into any Contract, and any promise or undertaking made by any other Person to such Person, whether or not legally binding.

 

“ Corresponding Annual Report ” has the meaning set forth in Section 11.01(d).

 

“ Corresponding Assets ” (a) with respect to HSN Spinco, any HSN Entity or the HSN Group, means the HSN Assets, (b) with respect to Interval Spinco, any Interval Entity or the Interval Group, means the Interval Assets, (c) with respect to TM Spinco, any TM Entity or the TM Group, means the TM Assets, (d) with respect to Tree Spinco, any Tree Entity or the Tree Group, means the Tree Assets and (e) with respect to IAC or the IAC Group, means the Retained Assets.

 

“ Corresponding Business ”  (a) with respect to HSN Spinco, any HSN Entity or the HSN Group, means the Retailing Business, (b) with respect to Interval Spinco, any Interval Entity or the Interval Group, means the Vacations Business, (c) with respect to TM Spinco, any TM Entity or the TM Group, means the Ticketing Business, (d) with respect to Tree Spinco, any Tree Entity or the Tree Group, means the Lending and Real Estate Business and (e) with respect to IAC or the IAC Group, means the Remaining Business.

 

“ Corresponding Distribution Ratio ” (i) with respect to HSN Spinco, means the HSN Distribution Ratio, (ii) with respect to Interval Spinco, means the Interval Distribution Ratio, (iii) with respect to TM Spinco, means the TM Distribution Ratio and (iv) with respect to Tree Spinco, means the Tree Distribution Ratio.

 

“ Corresponding Escrow Shares ” has the meaning set forth in Section 4.03.

 

“ Corresponding Group ” (a) with respect to the Retailing Business, HSN Spinco or any HSN Entity, means the HSN Group, (b) with respect to the Vacations Business, Interval Spinco or any Interval Entity, means the Interval Group, (c) with respect to the Ticketing Business, TM Spinco or any TM Entity, means the TM Group, (d) with respect to the Lending and Real Estate Business, Tree Spinco or any Tree Entity, means the Tree Group and (e) with respect to the Remaining Business, IAC or any Remaining IAC Entity, means the IAC Group.

 

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“ Corresponding Group Balance Sheet ” (a) with respect to the Retailing Business, HSN Spinco, any HSN Entity or the HSN Group, means the HSN Group Balance Sheet, (b) with respect to the Vacations Business, Interval Spinco, any Interval Entity or the Interval Group, means the Interval Group Balance Sheet, (c) with respect to the Ticketing Business, TM Spinco, any TM Entity or the TM Group, the TM Group Balance Sheet, and (d) with respect to the Lending and Real Estate Business, Tree Spinco, any Tree Entity or the Tree Group, means the Tree Group Balance Sheet.

 

“ Corresponding Liabilities ” (a) with respect to HSN Spinco, any HSN Entity or the HSN Group, means the HSN Liabilities, (b) with respect to Interval Spinco, any Interval Entity or the Interval Group, means the Interval Liabilities, (c) with respect to TM Spinco, any TM Entity or the TM Group, means the TM Liabilities, (d) with respect to Tree Spinco, any Tree Entity or the Tree Group, means the Tree Liabilities and (e) with respect to IAC or the IAC Group, means the Retained Liabilities.

 

“ Corresponding Opening Balance Sheet ” (a) with respect to the Retailing Business, HSN Spinco, any HSN Entity or the HSN Group, means the HSN Opening Balance Sheet, (b) with respect to the Vacations Business, Interval Spinco, any Interval Entity or the Interval Group, means the Interval Opening Balance Sheet, (c) with respect to the Ticketing Business, TM Spinco, any TM Entity or the TM Group, means the TM Opening Balance Sheet and (d) with respect to the Lending and Real Estate Business, Tree Spinco, any Tree Entity or the Tree Group, means the Tree Opening Balance Sheet.

 

“ Corresponding Other Separate-cos Indemnified Parties ” has the meaning set forth in Section 6.02.

 

“ Corresponding Separate-co ” (a) with respect to the Retailing Business, any HSN Entity or the HSN Group, means HSN Spinco, (b) with respect to the Vacations Business, any Interval Entity or the Interval Group, means Interval Spinco, (c) with respect to the Ticketing Business, any TM Entity or the TM Group, means TM Spinco, (d) with respect to the Lending and Real Estate Business, any Tree Entity or the Tree Group, means Tree Spinco and (e) with respect to the Remaining Business, any Remaining IAC Entity or the IAC Group, means IAC.

 

“ Corresponding Spinco ” (a) with respect to the Retailing Business, any HSN Entity or the HSN Group, means HSN Spinco, (b) with respect to the Vacations Business, any Interval Entity or the Interval Group, means Interval Spinco, (c) with respect to the Ticketing Business, any TM Entity or the TM Group, means TM Spinco and (d) with respect to the Lending and Real Estate Business, any Tree Entity or the Tree Group, means Tree Spinco.

 

“ Deferred Beneficiary ” has the meaning set forth in Section 3.01(b).

 

“ Deferred Corresponding Asset ” has the meaning set forth in Section 3.01(a).

 

“ Deferred Excluded Asset ” has the meaning set forth in Section 3.01(a).

 

“ Deferred Spun Asset ” has the meaning set forth in Section 3.01(a).

 

“ Deferred Transactions ” has the meaning set forth in Section 10.01(a)(ii).

 

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“ Deferred Transfer Asset ” has the meaning set forth in Section 3.01(a).

 

“ Deposit Rights ” means rights relating to deposits and prepaid expenses, claims for refunds and rights of set-off in respect thereof.

 

“ DGCL ” means the General Corporation Law of the State of Delaware.

 

“ Disclosing Party ” has the meaning set forth in Section 8.08.

 

“ Dispute ” has the meaning set forth in Section 9.02(a).

 

“ Dispute Notice ” has the meaning set forth in Section 9.02(a).

 

“ Dispute Parties ” has the meaning set forth in Section 9.02(a).

 

“ Distribution Date ” means the HSN Distribution Date, the Interval Distribution Date, the TM Distribution Date or the Tree Distribution Date, as applicable.

 

“ Distribution Record Date ” means the HSN Distribution Record Date, the Interval Distribution Record Date, the TM Distribution Record Date or the Tree Distribution Record Date, as applicable

 

“ Distributions ” means the HSN Distribution, the Interval Distribution, the TM Distribution and the Tree Distribution, and each of them a “ Distribution .”

 

“ Effective Time ” means (a) 9:00 a.m., New York City time, on the earliest to occur of one or more of the HSN Distribution Date, the Interval Distribution Date, the TM Distribution Date and the Tree Distribution Date if IAC determines to effect the applicable Distribution(s) prior to the opening of trading on NASDAQ or (b) otherwise, 11:59 p.m., New York City time, on such earliest date to occur.

 

“ EHS Liabilities ” means any Liability arising from or under any Environmental Law or Occupational Health and Safety Law.

 

“ Employee Matters Agreement ” means the Employee Matters Agreement among the Parties to be dated as of even date herewith.

 

“ Encumbrance ” means, with respect to any asset, mortgages, liens, hypothecations, pledges, charges, security interests or encumbrances of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under Applicable Law.

 

“ Environmental Law ” means any Applicable Law from any Governmental Authority (a) relating to the protection of the environment (including air, water, soil and natural resources) or (b) the use, storage, handling, release or disposal of Hazardous Substances.

 

“ Escrow Agent ” has the meaning set forth in Section 4.03(a).

 

“ Escrow Agreement ” has the meaning set forth in Section 4.03(a).

 

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“ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

 

“ Excluded Assets ” has the meaning set forth in Section 2.09(a).

 

“ GAAP ” has the meaning set forth in Section 2.04(d).

 

“ Governmental Authority ” means any court, arbitration panel, governmental or regulatory authority, agency, stock exchange, commission or body.

 

“ Governmental Authorization ” means any Consent, license, certificate, franchise, registration or permit issued, granted, given or otherwise made available by, or under the authority of, any Governmental Authority or pursuant to any Applicable Law.

 

“ Ground Lease ” means any long-term lease (including any emphyteotic lease) of Land in which most of the rights and benefits comprising ownership of the Land and the Improvements thereon or to be constructed thereon, if any, and the Appurtenances thereto for the benefit thereof, are transferred to the tenant for the term thereof.

 

“ Ground Lease Property ” means, in respect of any Person, any Land, Improvement or Appurtenance of such Person that is subject to a Ground Lease.

 

“ Group ” means the IAC Group, the HSN Group, the Interval Group, the TM Group or the Tree Group, as the context requires.

 

“ Guaranteed Entities ” has the meaning set forth in Section 4.02(c).

 

“ Guaranteed Group ” has the meaning set forth in Section 4.02(c).

 

“ Guaranteed Spinco ” has the meaning set forth in Section 4.02(c).

 

“ Guaranteeing Group ” has the meaning set forth in Section 4.02(c).

 

“ Guaranteeing Separate-co ” has the meaning set forth in Section 4.02(c).

 

“ Hazardous Substance ” means any substance to the extent presently listed, defined, designated or classified as hazardous, toxic or radioactive under any applicable Environmental Law, including petroleum and any derivative or by-products thereof.

 

“ HSN Assets ” has the meaning set forth in Section 2.06.

 

“ HSN Claims ” has the meaning set forth in Section 6.01(c).

 

“ HSN Common Stock ” means the common stock, par value $0.01 per share, of HSN Spinco.

 

“ HSN Distribution ” means the distribution on the HSN Distribution Date, to holders of record of shares of IAC Common Stock and IAC Class B Common Stock as of the HSN Distribution Record Date, of the HSN Common Stock owned by IAC on the basis of a

 

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fraction of a share of HSN Common Stock equal to the HSN Distribution Ratio for every one share of IAC Common Stock or IAC Class B Common Stock.

 

“ HSN Distribution Date ” means the date on which IAC distributes all of the issued and outstanding shares of HSN Common Stock to the holders of IAC Common Stock and IAC Class B Common Stock.

 

“ HSN Distribution Ratio ” means 1/5, subject to adjustment pursuant to Section 5.02(a).

 

“ HSN Distribution Record Date ” means such date as may be determined by the IAC Board as the record date for the HSN Distribution.

 

“ HSN Effective Time Cash Balance ” has the meaning set forth in Section 4.04(c).

 

“ HSN Entities ” means those Business Concerns forming part of the IAC Group which are identified on Schedule 2.06(b)  and which on and after the Effective Time form part of the HSN Group.

 

“ HSN Group ” means HSN Spinco, the HSN Entities and each other Person (other than any member of any other Group) that is a direct or indirect Subsidiary of HSN Spinco immediately after the Effective Time, and each Person that becomes a Subsidiary of HSN Spinco after the Effective Time.

 

“ HSN Group Balance Sheet ” has the meaning set forth in Section 2.06(c).

 

“ HSN Liabilities ” has the meaning set forth in Section 2.10.

 

“ HSN Opening Balance Sheet ” has the meaning set forth in Section 2.06(e).

 

“ HSN Releasors ” has the meaning set forth in Section 6.01(c).

 

“ HSN Spinco ” has the meaning set forth in the preamble hereto.

 

“ HSN Target Cash Balance ” has the meaning set forth in Section 4.04(c).

 

“ IAC ” has the meaning set forth in the preamble hereto.

 

“ IAC Auditor ” has the meaning set forth in Section 11.01(a).

 

“ IAC Board ” has the meaning set forth in the recitals hereto.

 

“ IAC Claims ” has the meaning set forth in Section 6.01(e).

 

“ IAC Class B Common Stock ” has the meaning set forth in the recitals hereto.

 

“ IAC Common Stock ” has the meaning set forth in the recitals hereto.

 

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“ IAC Group ” means IAC, its Subsidiaries (subject to Section 1.04(b), other than any member of any Spinco Group) and their respective domestic and international businesses, assets and liabilities.

 

“ IAC Notes ” has the meaning set forth in the recitals hereto.

 

“ IAC Record Date Share Number ” with respect to any Distribution means the aggregate number of shares of IAC Common Stock and IAC Class B Common Stock outstanding on the applicable Distribution Record Date.

 

“ IAC Releasors ” has the meaning set forth in Section 6.01(e).

 

“ Improvements ” means, in respect of any Land, all buildings, structures, plants, fixtures and improvements located on such Land, including those under construction.

 

“ Indemnified Party ” has the meaning set forth in Section 6.04(a).

 

“ Indemnifying Party ” has the meaning set forth in Section 6.04(b).

 

“ Information ” means any information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, test procedures, research, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, manufacturing techniques, manufacturing variables, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, products, product plans, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer information, customer services, supplier information, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data.

 

“ Insurance Benefits ” means, in respect of any Asset or Liability, all insurance benefits, including rights to Insurance Proceeds, arising from or relating to such Asset or Liability.

 

“ Insurance Proceeds ” means those monies (in each case net of any costs or expenses incurred in the collection thereof and net of any applicable premium adjustments (including reserves and retrospectively rated premium adjustments)):

 

(a)           received by an insured from an insurance carrier; or

 

(b)           paid by an insurance carrier on behalf of the insured.

 

“ Intangible Property Rights ” means, in respect of any Person, all intangible rights and property of such Person, including IT Assets, going concern value and goodwill.

 

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“ Intercompany Accounts ” means all balances related to indebtedness, including any intercompany indebtedness, loan, guaranty, receivable, payable or other account between a member of any Group, on the one hand, and a member of any other Group, on the other hand.

 

“Interval Acquisition Corp.” means Interval Acquisition Corp., a Delaware corporation and wholly owned subsidiary of IAC that, at the time of the Interval Distribution, will be a wholly owned subsidiary of Interval Spinco. “ Interval Assets ” has the meaning set forth in Section 2.05.

 

“ Interval Claims ” has the meaning set forth in Section 6.01(b).

 

“ Interval Common Stock ” means the common stock, par value $0.01 per share, of Interval Spinco.

 

“ Interval Distribution ” means the distribution on the Interval Distribution Date, to holders of record of shares of IAC Common Stock and IAC Class B Common Stock as of the Interval Distribution Record Date, of the Interval Common Stock owned by IAC on the basis of a fraction of a share of Interval Common Stock equal to the Interval Distribution Ratio for every one share of IAC Common Stock or IAC Class B Common Stock.

 

“ Interval Distribution Date ” means the date on which IAC distributes all of the issued and outstanding shares of Interval Common Stock to the holders of IAC Common Stock and IAC Class B Common Stock.

 

“ Interval Distribution Ratio ” means 1/5, subject to adjustment pursuant to Section 5.02(a).

 

“ Interval Distribution Record Date ” means such date as may be determined by the IAC Board as the record date for the Interval Distribution.

 

“ Interval Effective Time Cash Balance ” has the meaning set forth in Section 4.04(b).

 

“ Interval Entities ” means those Business Concerns forming part of the IAC Group which are identified on Schedule 2.05(b)  and which on and after the Effective Time form part of the Interval Group.

 

“ Interval Group ” means Interval Spinco, the Interval Entities and each other Person (other than any member of any other Group) that is a direct or indirect Subsidiary of Interval Spinco immediately after the Effective Time, and each Person that becomes a Subsidiary of Interval Spinco after the Effective Time.

 

“ Interval Group Balance Sheet ” has the meaning set forth in Section 2.05(c).

 

“ Interval Liabilities ” has the meaning set forth in Section 2.10.

 

“ Interval Opening Balance Sheet ” has the meaning set forth in Section 2.05(e).

 

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Governmental Authority or any award of any arbitrator or mediator of any kind, and those arising under any contract, commitment or undertaking, in each case, whether or not recorded or reflected or otherwise disclosed or required to be recorded or reflected or otherwise disclosed, on the books and records or financial statements of any Person, including any Specified Financial Liability, EHS Liability or Liability for Taxes.

 

“ NASDAQ ” means the Nasdaq Stock Market.

 

“ New IAC Integrated Warrant ” has the meaning set forth in Section 5.05(a)(i).

 

“ Non-IAC Indemnified Parties ” has the meaning set forth in Section 6.03.

 

“ Non-IAC Parties ” has the meaning set forth in Section 6.01(e).

 

“ Non-Interval Parties ” has the meaning set forth in Section 6.01(b).

 

“ Non-HSN Parties ” has the meaning set forth in Section 6.01(c).

 

“ Non-Tree Parties ” has the meaning set forth in Section 6.01(d).

 

“ Non-TM Parties ” has the meaning set forth in Section 6.01(a).

 

“ Notice Period ” has the meaning set forth in Section 6.04(b).

 

“ Occupational Health and Safety Law ” means any Applicable Law designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, and any program, whether governmental or private (such as those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions.

 

“ Old IAC Integrated Warrant ” means the outstanding warrant to purchase shares of IAC Common Stock identified on Schedule 1.01(a) .

 

“ Order ” means any order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Authority or arbitrator.

 

“ Ordinary Course of Business ” means any action taken by a Person that is in the ordinary course of the normal, day-to-day operations of such Person and is consistent with the past practices of such Person.

 

“ Parties ” has the meaning set forth in the preamble hereto.

 

“ Person ” means any individual, Business Concern or Governmental Authority.

 

“ Post-Record Date IAC Shares ” has the meaning set forth in Section 5.02(a)

 

“ Potential Contributor ” has the meaning set forth in Section 6.06(a).

 

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“ Prime Rate ” means the rate which JPMorgan Chase & Co. (or any successor thereto or other major money center commercial bank agreed to by the Parties hereto) announces from time to time as its prime lending rate, as in effect from time to time.

 

“ Prospectus ” with respect to a Registration Statement means the prospectus forming a part of such Registration Statement, as the same may be amended or supplemented from time to time.  A Prospectus may, but need not, be a joint prospectus of all of the Spincos.

 

“ Providing Party ” has the meaning set forth in Section 8.08.

 

“ Real Property ” means any Land and Improvements and all Appurtenances thereto and any Ground Lease Property.

 

“ Record ” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

 

“ Registration Statement ” means, for each Spinco, the Registration Statement on Form S-1 first filed by such Spinco with the SEC on August [      ], 2008 (together with all amendments and supplements thereto) in connection with the registration under the Securities Act of such Spinco’s Spinco Common Stock.

 

“ Regulation S-K ” means Regulation S-K of the General Rules and Regulations promulgated by the SEC pursuant to the Securities Act.

 

“ Relevant Time ” means (a) as between any two Spincos, on the date of the later Distribution Date to occur with respect to such Spincos if such Distribution Dates are not the same date or, otherwise, on such Distribution Date and (b) as between IAC and any Spinco, on the Distribution Date with respect to such Spinco, in either such case (i) 9:00 a.m., New York City time, if IAC determines to effect the applicable Distribution(s) prior to the opening of trading on NASDAQ or (b) otherwise, 11:59 p.m., New York City time, on such earliest date to occur.

 

“ Remaining Business ” means all IAC Businesses other than the Spun Businesses.

 

“ Remaining IAC Entity ” means any Business Concern that is a member of the IAC Group on and after the Effective Time.

 

“ Representatives ” means, with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, advisors, accountants or attorneys.

 

“ Requesting Party ” has the meaning set forth in Section 8.01(a).

 

“ Response ” has the meaning set forth in Section 9.02(a).

 

“ Responding Parties ” has the meaning set forth in Section 9.02(a).

 

“ Responsible Group ” has the meaning set forth in Section 3.02(b).

 

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“ Responsible Separate-co ” has the meaning set forth in Section 3.02.

 

“ Retailing Business ” means (a) the businesses and operations of HSN Spinco and its Subsidiaries as described in the Prospectus forming a part of HSN Spinco’s Registration Statement, (b) any other business conducted primarily through the use of the HSN Assets prior to the Effective Time and (c) the businesses and operations of Business Concerns acquired or established by or for HSN Spinco or any of its Subsidiaries after the date of this Agreement.

 

“ Retained Liabilities ” has the meaning set forth in Section 2.10.

 

“ Retaining Person ” has the meaning set forth in Section 3.01(b).

 

“ SEC ” means the Securities and Exchange Commission.

 

“ Securities Act ” means the United States Securities Act of 1933, as amended.

 

“ Senior Party Representatives ” has the meaning set forth in Section 9.02(a).

 

“ Separate-cos ” has the meaning set forth in the preamble hereto.

 

“ Separation ” has the meaning set forth in the recitals hereto.

 

“ Separation Transactions ” means the transactions to effect the Separation as described in the Transactions Memo and, in the singular, means any one of them.

 

 “ Shared Liability ” of a Spinco means any Liability from, relating to, arising out of, or derivative of any matter, claim or litigation, whether actual or potential, associated with any securities law litigation relating to any public disclosure (or absence of public disclosure) with respect to such Spinco’s Spun Business or the Spun Entities in such Spinco’s Corresponding Group made by IAC prior to the Effective Time, including the fees and expenses of outside counsel retained by IAC in connection with the defense and/or settlement of any such matter.  For purposes of this definition, the phrase “securities law litigation” shall include claims alleging any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact in alleged violation of the Securities Act, the Exchange Act or any similar state law and any claims premised on, related to or derivative of such alleged statements, omissions or violations, whether payable to any current, past or future holders of IAC securities or any Spinco securities, to any of the co-defendants in such action or to any Governmental Authority.  Notwithstanding anything in Section 6.06 to the contrary, the amount of any Shared Liability shall be net of any insurance proceeds actually recovered by or on behalf of any member of any Group.

 

“ Specified Financial Liabilities ” means, in respect of any Person, all liabilities, obligations, contingencies, instruments and other Liabilities of a financial nature with Third Parties of, or relating to, such Person, including any of the following:

 

(a)           foreign exchange contracts;

 

(b)           letters of credit;

 

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(c)           guarantees of Third Party loans;

 

(d)           surety bonds (excluding surety for workers’ compensation self-insurance);

 

(e)           interest support agreements on Third Party loans;

 

(f)            performance bonds or guarantees issued by Third Parties;

 

(g)           swaps or other derivatives contracts;

 

(h)           recourse arrangements on the sale of receivables or notes; and

 

(i)            indemnities for damages for any breach of, or any inaccuracy in, any representation or warranty or any breach of, or failure to perform or comply with, any covenant, undertaking or obligation.

 

“ Spinco ” has the meaning set forth in the preamble hereto.

 

“ Spinco Auditor ” has the meaning set forth in Section 11.01(a).

 

“ Spinco Common Stock ” means the HSN Common Stock, the Interval Common Stock, the TM Common Stock and/or the Tree Common Stock, as applicable.

 

“ Spinco Common Stock Escrow Account ” has the meaning set forth in Section 4.03.

 

“ Spinco Group ” means any of the HSN Group, the Interval Group, the TM Group and the Tree Group.

 

“ Spun Businesses ” has the meaning set forth in the recitals hereto.

 

“ Spun Assets ” means the HSN Assets, the Interval Assets, the TM Assets and the Tree Assets.

 

“ Spun Entities ” means the HSN Entities, the Interval Entities, the TM Entities and the Tree Entities.

 

“ Spun Liabilities ” means the HSN Liabilities, the Interval Liabilities, the TM Liabilities and the Tree Liabilities.

 

“ Subsidiary ” of any Person means any corporation, partnership, limited liability entity, joint venture or other organization, whether incorporated or unincorporated, of which a majority of the total voting power of capital stock or other interests entitled (without 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 such Person.

 

“ Tangible Personal Property ” means, in respect of any Person, all machinery, equipment, tools, furniture, office equipment, supplies, materials, vehicles and other items of

 

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tangible personal or movable property (other than Inventories and IT Assets) of every kind and wherever located that are owned or leased by the Person, together with any express or implied warranty by the manufacturers, sellers or lessors of any item or component part thereof and all maintenance Records and other documents relating thereto.

 

“ Tax ” means Income Taxes and Other Taxes as defined in the Tax Sharing Agreement.

 

“ Tax Sharing Agreement ” means the Tax Sharing Agreement among the Parties to be dated as of even date herewith.

 

“ Third Party ” means a Person (a) that is not a Party to this Agreement, other than a member of any Group and (b) that is not an Affiliate thereof.

 

“ Third Party Claim ” has the meaning set forth in Section 6.04(b).

 

“ Third Party Consent ” has the meaning set forth in Section 2.11.

 

“ Ticketing Business ” means (a) the businesses and operations of TM Spinco and its subsidiaries as described in the Prospectus forming a part of TM Spinco’s Registration Statement, (b) any other business conducted primarily through the use of the TM Assets prior to the Effective Time and (c) the businesses and operations of Business Concerns acquired or established by or for TM Spinco or any of its Subsidiaries after the date of this Agreement.

 

“ TM Assets ” has the meaning set forth in Section 2.04.

 

“ TM Claims ” has the meaning set forth in Section 6.01(a).

 

“ TM Common Stock ” means the common stock, par value $0.01 per share, of TM Spinco.

 

“ TM Distribution ” means the distribution on the TM Distribution Date, to holders of record of shares of IAC Common Stock and IAC Class B Common Stock as of the TM Distribution Record Date, of the TM Common Stock owned by IAC on the basis of a fraction of a share of TM Common Stock equal to the TM Distribution Ratio for every one share of IAC Common Stock or IAC Class B Common Stock.

 

“ TM Distribution Date ” means the date on which IAC distributes all of the issued and outstanding shares of TM Common Stock to the holders of IAC Common Stock and IAC Class B Common Stock.

 

“ TM Distribution Ratio ” means 1/5, subject to adjustment pursuant to Section 5.02(a).

 

“ TM Distribution Record Date ” means such date as may be determined by the IAC Board as the record date for the TM Distribution.

 

“ TM Effective Time Cash Balance ” has the meaning set forth in Section 4.04(a).

 

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“ TM Entities ” means those Business Concerns forming part of the IAC Group which are identified on Schedule 2.04(b)  and which on and after the Effective Time form part of the TM Group.

 

“ TM Group ” means TM Spinco, the TM Entities and each other Person (other than any member of any other Group) that is a direct or indirect Subsidiary of TM Spinco immediately after the Effective Time, and each Person that becomes a Subsidiary of TM Spinco after the Effective Time.

 

“ TM Group Balance Sheet ” has the meaning set forth in Section 2.04(c).

 

“ TM Liabilities ” has the meaning set forth in Section 2.10.

 

“ TM Opening Balance Sheet ” has the meaning set forth in Section 2.04(e).

 

“ TM Releasors ” has the meaning set forth in Section 6.01(a).

 

“ TM Spinco ” has the meaning set forth in the preamble hereto.

 

“ TM Target Cash Balance ” has the meaning set forth in Section 4.04(a).

 

“ Transfer Impediment ” has the meaning set forth in Section 3.01(a).

 

“ Transactions Memo ” has the meaning set forth in the recitals hereto.

 

“ Transition Services Agreement ” means the Transition Services Agreement among the Parties to be dated as of even date herewith.

 

“ Tree Assets ” has the meaning set forth in Section 2.07.

 

“ Tree Claims ” has the meaning set forth in Section 6.01(d).

 

“ Tree Common Stock ” means the common stock, par value $0.01 per share, of Tree Spinco.

 

“ Tree Distribution ” means the distribution on the Tree Distribution Date, to holders of record of shares of IAC Common Stock and IAC Class B Common Stock as of the Tree Distribution Record Date, of the Tree Common Stock owned by IAC on the basis of a fraction of a share of Tree Common Stock equal to the Tree Distribution Ratio for every one share of IAC Common Stock or IAC Class B Common Stock.

 

“ Tree Distribution Date ” means the date on which IAC distributes all of the issued and outstanding shares of Tree Common Stock to the holders of IAC Common Stock and IAC Class B Common Stock.

 

“ Tree Distribution Ratio ” means 1/30, subject to adjustment pursuant to Section 5.02(a).

 

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“ Tree Distribution Record Date ” means such date as may be determined by the IAC Board as the record date for the Tree Distribution.

 

“ Tree Effective Time Cash Balance ” has the meaning set forth in Section 4.04(d).

 

“ Tree Entities ” means those Business Concerns forming part of the IAC Group which are identified on Schedule 2.07(b)  and which on and after the Effective Time form part of the Tree Group.

 

“ Tree Group ” means Tree Spinco, the Tree Entities and each other Person (other than any member of any other Group) that is a direct or indirect Subsidiary of Tree Spinco immediately after the Effective Time, and each Person that becomes a Subsidiary of Tree Spinco after the Effective Time.

 

“ Tree Group Balance Sheet ” has the meaning set forth in Section 2.07(c).

 

“ Tree Liabilities ” has the meaning set forth in Section 2.10.

 

“ Tree Opening Balance Sheet ” has the meaning set forth in Section 2.07(e).

 

“ Tree Releasors ” has the meaning set forth in Section 6.01(d).

 

“ Tree Spinco ” has the meaning set forth in the preamble hereto.

 

“ Tree Target Cash Balance ” has the meaning set forth in Section 4.04(d).

 

“ Unreleased Group ” has the meaning set forth in Section 3.02.

 

“ Unreleased Liabilities ” has the meaning set forth in Section 3.02.

 

“ Unreleased Person ” has the meaning set forth in Section 3.02.

 

“ Unreleased Separate-co ” has the meaning set forth in Section 3.02.

 

“ Vacations Business ” means (a) the businesses and operations of Interval Spinco and its subsidiaries as described in the Prospectus forming a part of Interval Spinco’s Registration Statement, (b) any other business conducted primarily through the use of the Interval Assets prior to the Effective Time and (c) the businesses and operations of Business Concerns acquired or established by or for Interval Spinco or any of its Subsidiaries after the date of this Agreement.

 

“ Warrant Share Number ” has the meaning set forth in Section 5.05(a)(i).

 

1.02.   Schedules .  The following schedules are attached to this Agreement and form a part hereof:

 

Schedule 1.01(a)		Old IAC Integrated Warrant
Schedule 2.04(a)		TM Assets
Schedule 2.04(b)		TM Entities

 

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Schedule 2.04(c)		TM Group Balance Sheet
Schedule 2.05(a)		Interval Assets
Schedule 2.05(b)		Interval Entities
Schedule 2.05(c)		Interval Group Balance Sheet
Schedule 2.06(a)		HSN Assets
Schedule 2.06(b)		HSN Entities
Schedule 2.06(c)		HSN Group Balance Sheet
Schedule 2.07(a)		Tree Assets
Schedule 2.07(b)		Tree Entities
Schedule 2.07(c)		Tree Group Balance Sheet
Schedule 2.09(a)		Excluded Assets
Schedule 2.10(a)		TM Liabilities
Schedule 2.10(b)		Interval Liabilities
Schedule 2.10(c)		HSN Liabilities
Schedule 2.10(d)		Tree Liabilities
Schedule 2.10(e)		Retained Liabilities
Schedule 2.14(a)		IAC Resignation Exceptions

 

1.03.   Effective Time; Suspension .  (a) This Agreement shall be effective as of the Effective Time.

 

(b)           Notwithstanding Section 1.03(a) above, as between any two of the Parties, the provisions of, and the obligations under, this Agreement shall be suspended as between such Parties until the applicable Relevant Time (and, as the context requires, references to the Effective Time shall be deemed to refer to the Relevant Time), other than Sections 2.01, 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.09 and 2.10, each of which shall be effective as of the Effective Time.  For the avoidance of doubt, in the event that one or more of the Distributions shall not be effected on the first Distribution Date to occur, then for purposes of determining the rights and obligations between IAC and any Spinco the Spinco Common Stock of which shall have been distributed on such date, until the Distribution Date, if any, for each Spinco not so distributed, such undistributed Spinco and the members of its Corresponding Group shall continue to be treated as members of the IAC Group and shall not, upon its Distribution Date, bear any Liability for any Retained Liabilities.

 

ARTICLE II
THE SEPARATION

 

2.01.        Separation .  To the extent not already complete, IAC and the Spincos agree to implement the Separation and to cause the Corresponding Businesses of each Spinco to be transferred to such Spinco and its Subsidiaries and the Remaining Business to be held by IAC and its Subsidiaries (other than the Spincos and their Subsidiaries) as of the Effective Time, on the terms and subject to the conditions set forth in this Agreement.  The Parties acknowledge that the Separation is intended to result in each Spinco, directly or indirectly, operating its Corresponding Business, owning its Corresponding Assets and assuming its Corresponding Liabilities as set forth in this Article II.

 

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2.02.        Implementation .  The Separation shall be completed in accordance with the agreed general principles, objectives and other provisions set forth in this Article II and shall be implemented in the following manner:

 

(a)           through the completion of the steps described in the Transactions Memo;

 

(b)           through the transfer from time to time following the Effective Time of the Deferred Transfer Assets as described in Article III;

 

(c)           through the completion from time to time following the Effective Time of the Deferred Transactions, as described in Section 10.01(a); and

 

(d)           through the performance by the Parties of all other provisions of this Agreement.

 

2.03.        Transfer of Spun Assets; Assumption of Spun Liabilities .  On the terms and subject to the conditions set forth in this Agreement, and in furtherance of the Separation, with effect as of the Effective Time:

 

(a)           To the extent not already complete, IAC agrees to cause the Corresponding Assets of each Spinco to be contributed, assigned, transferred, conveyed and delivered, directly or indirectly, to such Spinco, and each Spinco agrees to accept all of its Corresponding Assets and all of the rights, title and interest in and to all its Corresponding Assets owned, directly or indirectly, by IAC which, except with respect to Deferred Corresponding Assets and Unreleased Liabilities, will result in such Spinco owning, directly or indirectly, its Corresponding Business.

 

(b)           Each Spinco agrees to accept, assume and faithfully perform, discharge and fulfill all of its Corresponding Liabilities in accordance with their respective terms.

 

2.04.        TM Assets .  For the purposes of this Agreement, “ TM Assets ” shall mean, without duplication, those Assets whether now existing or hereinafter acquired, used or contemplated to be used or held for use exclusively or primarily in the ownership, operation or conduct of the Ticketing Business or relating exclusively or primarily to the Ticketing Business or to a TM Entity including the following:

 

(a)           all Assets expressly identified in this Agreement or in any Ancillary Agreement or in any Schedule hereto or thereto, including those, if any, listed on Schedule 2.04(a) , as Assets to be transferred to, or retained by, TM Spinco or any other member of the TM Group;

 

(b)           the outstanding capital stock, units or other equity interests of the TM Entities, as listed on Schedule 2.04(b) , and the Assets owned by such TM Entities;

 

(c)           all Assets properly reflected on Schedule 2.04(c)  (the “ TM Group Balance Sheet ”), excluding Assets disposed of by IAC or any other Subsidiary or entity controlled by IAC subsequent to the date of the TM Group Balance Sheet;

 

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(d)           all Assets that have been written off, expensed or fully depreciated by IAC or any Subsidiary or entity controlled by IAC that, had they not been written off, expensed or fully depreciated, would have been reflected on the TM Group Balance Sheet in accordance with accounting principles generally accepted in the United States (“ GAAP ”);

 

(e)           all Assets acquired by IAC or any Subsidiary or entity controlled by IAC after the date of the TM Group Balance Sheet and that would be reflected on the balance sheet of TM Spinco as of the Effective Time (the “ TM Opening Balance Sheet ”), if such balance sheet were prepared in accordance with GAAP; and

 

(f)            all Assets transferred to TM Spinco or any member of the TM Group pursuant to Section 10.01(a); provided , however , that any such transfer shall take effect under Section 10.01(a) and not under this Section 2.04.

 

Notwithstanding the foregoing, there shall be excluded from the definition of TM Assets under this Section 2.04 Business Records to the extent they are included in or primarily relate to any Excluded Asset or Retained Liability or the Remaining Business or their transfer is prohibited by Applicable Law or by agreements between any other Separate-co or any member of another Separate-co’s Corresponding Group and Third Parties or otherwise would subject any other Separate-co or any member of any other Corresponding Group to liability for such transfer.  Access to such excluded Business Records shall be governed by Article VIII.

 

2.05.        Interval Assets .  For the purposes of this Agreement, “ Interval Assets ” shall mean, without duplication, those Assets whether now existing or hereinafter acquired, used or contemplated to be used or held for use exclusively or primarily in the ownership, operation or conduct of the Vacations Business or relating exclusively or primarily to the Vacation Business or to an Interval Entity including the following:

 

(a)           all Assets expressly identified in this Agreement or in any Ancillary Agreement or in any Schedule hereto or thereto, including those, if any, listed on Schedule 2.05(a) , as Assets to be transferred to, or retained by, Interval Spinco or any other member of the Interval Group;

 

(b)           the outstanding capital stock, units or other equity interests of the Interval Entities, as listed on Schedule 2.05(b), and the Assets owned by such Interval Entities;

 

(c)           all Assets properly reflected on Schedule 2.05(c)  (the “ Interval Group Balance Sheet ”), excluding Assets disposed of by IAC or any other Subsidiary or entity controlled by IAC subsequent to the date of the Interval Group Balance Sheet;

 

(d)           all Assets that have been written off, expensed or fully depreciated by IAC or any Subsidiary or entity controlled by IAC that, had they not been written off, expensed or fully depreciated, would have been reflected on the Interval Group Balance Sheet in accordance with GAAP;

 

(e)           all Assets acquired by IAC or any Subsidiary or entity controlled by IAC after the date of the Interval Group Balance Sheet and that would be reflected on the balance

 

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sheet of Interval Spinco as of the Effective Time (the “ Interval Opening Balance Sheet ”), if such balance sheet were prepared in accordance with GAAP; and

 

(f)            all Assets transferred to Interval Spinco or any member of the Interval Group pursuant to Section 10.01(a); provided , however , that any such transfer shall take effect under Section 10.01(a) and not under this Section 2.05.

 

Notwithstanding the foregoing, there shall be excluded from the definition of Interval Assets under this Section 2.05 Business Records to the extent they are included in or primarily relate to any Excluded Asset or Retained Liability or the Remaining Business or their transfer is prohibited by Applicable Law or by agreements between any other Separate-co or any member of another Separate-co’s Corresponding Group and Third Parties or otherwise would subject any other Separate-co or any member of any other Corresponding Group to liability for such transfer.  Access to such excluded Business Records shall be governed by Article VIII.

 

2.06.        HSN Assets .  For the purposes of this Agreement, “ HSN Assets ” shall mean, without duplication, those Assets whether now existing or hereinafter acquired, used or contemplated to be used or held for use exclusively or primarily in the ownership, operation or conduct of the Retailing Business or relating exclusively or primarily to the Retailing Business or to an HSN Entity including the following:

 

(a)           all Assets expressly identified in this Agreement or in any Ancillary Agreement or in any Schedule hereto or thereto, including those, if any, listed on Schedule 2.06(a) , as Assets to be transferred to, or retained by, HSN Spinco or any other member of the HSN Group;

 

(b)           the outstanding capital stock, units or other equity interests of the HSN Entities, as listed on  Schedule 2.06(b) , and the Assets owned by such HSN Entities;

 

(c)           all Assets properly reflected on Schedule 2.06(c)  (the “ HSN Group Balance Sheet ”), excluding Assets disposed of by IAC or any other Subsidiary or entity controlled by IAC subsequent to the date of the HSN Group Balance Sheet;

 

(d)           all Assets that have been written off, expensed or fully depreciated by IAC or any Subsidiary or entity controlled by IAC that, had they not been written off, expensed or fully depreciated, would have been reflected on the HSN Group Balance Sheet in accordance with GAAP;

 

(e)           all Assets acquired by IAC or any Subsidiary or entity controlled by IAC after the date of the HSN Group Balance Sheet and that would be reflected on the balance sheet of HSN as of the Effective Time (the “ HSN Opening Balance Sheet ”), if such balance sheet were prepared in accordance with GAAP; and

 

(f)            all Assets transferred to HSN Spinco or any member of the HSN Group pursuant to Section 10.01(a); provided , however , that any such transfer shall take effect under Section 10.01(a) and not under this Section 2.06.

 

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Notwithstanding the foregoing, there shall be excluded from the definition of HSN Assets under this Section 2.06 Business Records to the extent they are included in or primarily relate to any Excluded Asset or Retained Liability or the Remaining Business or their transfer is prohibited by Applicable Law or by agreements between any other Separate-co or any member of another Separate-co’s Corresponding Group and Third Parties or otherwise would subject any other Separate-co or any member of any other Corresponding Group to liability for such transfer.  Access to such excluded Business Records shall be governed by Article VIII.

 

2.07.        Tree Assets .  For the purposes of this Agreement, “ Tree Assets ” shall mean, without duplication, those Assets whether now existing or hereinafter acquired, used or contemplated to be used or held for use exclusively or primarily in the ownership, operation or conduct of the Lending and Real Estate Business or relating exclusively or primarily to the Lending and Real Estate Business or to a Tree Entity including the following:

 

(a)           all Assets expressly identified in this Agreement or in any Ancillary Agreement or in any Schedule hereto or thereto, including those, if any, listed on Schedule 2.07(a) , as Assets to be transferred to, or retained by, Tree Spinco or any other member of the Tree Group;

 

(b)           the outstanding capital stock, units or other equity interests of the Tree Entities, as listed on Schedule 2.07(b) , and the Assets owned by such Tree Entities;

 

(c)           all Assets properly reflected on Schedule 2.07(c)  (the “ Tree Group Balance Sheet ”), excluding Assets disposed of by IAC or any other Subsidiary or entity controlled by IAC subsequent to the date of the Tree Group Balance Sheet;

 

(d)           all Assets that have been written off, expensed or fully depreciated by IAC or any Subsidiary or entity controlled by IAC that, had they not been written off, expensed or fully depreciated, would have been reflected on the Tree Group Balance Sheet in accordance with GAAP;

 

(e)           all Assets acquired by IAC or any Subsidiary or entity controlled by IAC after the date of the Tree Group Balance Sheet and that would be reflected on the balance sheet of Tree Spinco as of the Effective Time (the “ Tree Opening Balance Sheet ”), if such balance sheet were prepared in accordance with GAAP; and

 

(f)            all Assets transferred to Tree Spinco or any member of the Tree Group pursuant to Section 10.01(a); provided , however , that any such transfer shall take effect under Section 10.01(a) and not under this Section 2.07.

 

Notwithstanding the foregoing, there shall be excluded from the definition of Assets under this Section 2.07 Business Records to the extent they are included in or primarily relate to any Excluded Asset or Retained Liability or the Remaining Business or their transfer is prohibited by Applicable Law or by agreements between any other Separate-co or any member of another Separate-co’s Corresponding Group and Third Parties or otherwise would subject any other Separate-co or any member of any other Corresponding Group to liability for such transfer.  Access to such excluded Business Records shall be governed by Article VIII.

 

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2.08.        Deferred Spun Assets .  Notwithstanding anything to the contrary contained in Section 2.04, 2.05, 2.06 or 2.07 or elsewhere in this Agreement, the Spun Assets shall not include any Deferred Spun Assets.  The transfer to a Spinco or its Corresponding Group of any such Deferred Spun Asset shall only be completed at the time, in the manner and subject to the conditions set forth in Article III.

 

2.09.        Excluded Assets .  (a) Notwithstanding anything to the contrary contained in Section 2.04, 2.05, 2.06 or 2.07 or elsewhere in this Agreement, the following Assets of IAC (or of any other relevant member of the IAC Group) that would otherwise be included among the Corresponding Assets of a Spinco shall not be transferred to such Spinco (or any other member of its Corresponding Group), shall not form part of its Corresponding Assets and shall remain the exclusive property of IAC (or the relevant member of the IAC Group) on and after the Effective Time (the “ Excluded Assets ”):

 

(i)            any Asset expressly identified on Schedule 2.09(a) ; and

 

(ii)           any Asset transferred to IAC or to any other relevant member of the IAC Group pursuant to Section 10.01(a); provided , however , that any such transfers shall take effect under Section 10.01(a) and not under this Section 2.09.

 

(b)           Notwithstanding anything to the contrary in this Agreement, Excluded Assets shall not include Deferred Excluded Assets.  The transfer to IAC (or to the relevant member of the IAC Group) or to another Spinco (or to the relevant member of its Corresponding Group) of any such Asset shall be completed at the time, in the manner and subject to the conditions set forth in Article III.

 

2.10.        Liabilities .  For the purposes of this Agreement, Liabilities shall be identified as “ TM Liabilities ,” “ Interval Liabilities ,” “ HSN Liabilities ,”  “ Tree Liabilities or “ Retained Liabilities ” under the following principles:

 

(a)           any Liability which is expressly identified on Schedule 2.10(a)  shall be a TM Liability;

 

(b)           any Liability which is expressly identified on Schedule 2.10(b)  shall be an Interval Liability;

 

(c)           any Liability which is expressly identified on Schedule 2.10(c)  shall be an HSN Liability;

 

(d)           any Liability which is expressly identified on Schedule 2.10(d)  shall be a Tree Liability;

 

(e)           any Liability which is expressly identified on Schedule 2.10(e)  shall be a Retained Liability;

 

(f)            (i) 50% of any Shared Liability of Ticketmaster Spinco shall be a Ticketmaster Liability and 50% shall be a Retained Liability, (ii) 50% of any Shared Liability of Interval Spinco shall be an Interval Liability and 50% shall be a Retained Liability, (iii) 50% of

 

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any Shared Liability of HSN Spinco shall be an HSN Liability and 50% shall be a Retained Liability and (iv) 50% of any Shared Liability of Tree Spinco shall be a Tree Liability and 50% shall be a Retained Liability;

 

(g)           any Liability of a Spun Entity, whether arising or accruing prior to, on or after the Effective Time and whether the facts on which it is based occurred on, prior to or after the Effective Time and whether or not reflected on the Corresponding Group Balance Sheet or on the Corresponding Opening Balance Sheet, shall be a Corresponding Liability of such Spun Entity’s Corresponding Group, unless it is expressly identified in this Agreement (including on any Schedule) or in any Ancillary Agreement as a Liability to be assumed or retained by IAC (or any other member of the IAC Group) or by a Spinco that is not included in such Spun Entity’s Corresponding Group (or any other relevant member of such other Spinco’s Corresponding Group), in which case it shall be a Retained Liability or a Spun Liability of such other Spinco’s Corresponding Group, as applicable;

 

(h)           any Liability relating to, arising out of, or resulting from the conduct of, a Spun Business (as conducted at any time prior to, on or after the Effective Time) or relating to a Spun Asset or a Deferred Spun Asset and whether arising or accruing prior to, on or after the Effective Time and whether the facts on which it is based occurred on, prior to or after the Effective Time and whether or not reflected on the Corresponding Group Balance Sheet or the Corresponding Opening Balance Sheet, shall be a Corresponding Liability of such Spun Business’ Corresponding Group, unless it is expressly identified in this Agreement (including on any Schedule) or in any Ancillary Agreement as a Liability to be assumed or retained by IAC (or any other member of the IAC Group) or by a Spinco that is not included in such Spun Entity’s Corresponding Group (or any other relevant member of such other Spinco’s Corresponding Group), in which case it shall be a Retained Liability or Spun Liability of such other Spinco’s Corresponding Group, as applicable;

 

(i)            any Liability which is reflected or otherwise disclosed as a liability or obligation of any Spinco Group on its Corresponding Group Balance Sheet shall be a Corresponding Liability of such Spinco Group;

 

(j)            any Liability which would be reflected or otherwise disclosed on the Corresponding Group Balance Sheet of any Spinco Group, if such balance sheet were prepared under GAAP, shall be a Corresponding Liability of such Spinco Group;

 

(k)           any Liability pursuant to contracts entered into by IAC and/or any member of the IAC Group (i) in connection with the acquisition, by IAC and/or any member of the IAC Group, of any Spun Entity and/or Spun Business or (ii) otherwise relating primarily to a Spun Entity and/or the conduct of a Spun Business, shall be a Corresponding Liability of such Spun Entity’s or Spun Business’s Corresponding Group, unless it is expressly identified in this Agreement (including on any Schedule) or in any Ancillary Agreement as a Liability to be assumed or retained by IAC (or any other member of the IAC Group) or by a Spinco that is not included in such Spun Entity’s Corresponding Group (or any other relevant member of such other Spinco’s Corresponding Group), in which case it shall be a Retained Liability or Spun Liability of such other Spinco’s Corresponding Group, as applicable;

 

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2.14.        Resignations .  (a)  IAC agrees to cause each Person who is a director or an officer of any Spun Entity and who will not be or become an employee of such Spun Entity’s Spinco Group (or any member thereof) at the Effective Time to resign from such position with effect as of the Effective Time; provided , however , that this Section 2.14(a) shall not apply to the persons in the capacities set forth on Schedule 2.14(a).

 

(b)           Each Spinco agrees to cause each Person (i) who is a director or an officer of a Remaining IAC Entity or any Spun Entity that is not a member of such Spinco’s Corresponding Group and (ii) who will become an employee of such Spinco’s Corresponding Group (or any member thereof) at the Effective Time to resign from such position with effect as of the Effective Time.

 

(c)           Each Separate-co agrees to obtain all such letters of resignation or other evidence of such resignations as may be necessary or desirable in performing their respective obligations under this Section 2.14.

 

2.15.        Cooperation .  The Parties shall cooperate in all aspects of the Separation and shall sign all such documents and perform all such other acts as may be necessary or desirable to give full effect to the Separation; and each Separate-co shall cause each other member of its Corresponding Group to do likewise.

 

2.16.        Intercompany Accounts Among Groups .  Except as otherwise expressly provided in any Ancillary Agreement, from and after the Effective Time, each Separate-co agrees to cause any Intercompany Account payable by any member of its Corresponding Group to any member of any other Group to be satisfied in full.

 

2.17.        Disclaimer of Representations and Warranties .  (a)  Each of the Parties (on behalf of itself and each other member of its respective Corresponding Group) understands and agrees that, except as expressly set forth herein or in any Ancillary Agreement, no Party to this Agreement, any Ancillary Agreement or any other agreement or document contemplated by this Agreement, any Ancillary Agreement or otherwise, makes any representation or warranty, express or implied, regarding any of the Spun Assets, Spun Entities, Spun Businesses, Excluded Assets, Spun Liabilities or Retained Liabilities including any warranty of merchantability or fitness for a particular purpose, or any representation or warranty regarding any Consents or Governmental Authorizations required in connection therewith or their transfer, regarding the value or freedom from Encumbrances of, or any other matter concerning, any Spun Asset or Excluded Asset, or regarding the absence of any defense or right of setoff or freedom from counterclaim with respect to any claim or other Spun Asset or Excluded Asset, including any Account Receivable of any Party, or as to the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any Spun Asset or Excluded Asset upon the execution, delivery and filing hereof or thereof.

 

(b)           Except as may expressly be set forth herein or in any Ancillary Agreement, all Spun Assets and Excluded Assets are being transferred on an “as is, where is” basis, at the risk of the respective transferees without any warranty whatsoever on the part of the transferor, formal or implicit, legal, statutory or conventional (and, in the case of any Real Property, by means of a quitclaim or similar form deed or conveyance).

 

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ARTICLE III
DEFERRED SEPARATION TRANSACTIONS

 

3.01.        Deferred Transfer Assets .  (a)  If the transfer to, or retention by, any member of a Spinco Group of any Asset that would otherwise constitute its Corresponding Asset (a “ Deferred Spun Asset ”; with respect to such Spinco, a “ Deferred Corresponding Asset ”) or the transfer to, or retention by, any member of the IAC Group of any Asset that would otherwise constitute an Excluded Asset (a “ Deferred Excluded Asset ,” and together with a Deferred Spun Asset, a “ Deferred Transfer Asset ”) cannot be accomplished without giving rise to a violation of Applicable Law, or without obtaining a Third Party Consent or a Governmental Authorization (collectively, a “ Transfer Impediment ”) and any such Third Party Consent or Governmental Authorization has not been obtained prior to the Effective Time, then such Asset shall be dealt with in the manner described in this Section 3.01.

 

(b)           Pending removal of such Transfer Impediment, the Person holding the Deferred Transfer Asset (the “ Retaining Person ”) shall hold such Deferred Transfer Asset for the use and benefit, insofar as reasonably possible, of the Party to whom the transfer of such Asset could not be made at the Effective Time (the “ Deferred Beneficiary ”).  The Retaining Person sha