SUBSCRIPTION AGREEMENT AND PLAN OF MERGER

Exhibit 10.1

EXECUTION COPY

SUBSCRIPTION AGREEMENT AND PLAN OF MERGER

by and among

PROQUEST COMPANY,

PROQUEST INFORMATION AND LEARNING COMPANY,

PROQUEST CANADA/U.K. HOLDINGS, LLC,

and

I&L HOLDINGS, INC.,

I&L OPERATING LLC,

CAMBRIDGE SCIENTIFIC ABSTRACTS, LIMITED PARTNERSHIP

Dated as of December 14, 2006

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

* Exhibit B, Schedules to the Agreement and Parent Disclosure Schedule omitted pursuant to Item 601(b)(2) of Regulation S-K.

 

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SUBSCRIPTION AGREEMENT AND PLAN OF MERGER

SUBSCRIPTION AGREEMENT AND PLAN OF MERGER, dated as of December 14, 2006 (this “ Agreement ”), is by and among ProQuest Information and Learning Company, a Delaware corporation (the “ U.S. Company ”); I&L Holdings, Inc., a Delaware corporation (“ Buyer Parent ”); I&L Operating LLC, a Delaware limited liability company and wholly owned subsidiary of Buyer Parent (“ Buyer Sub ,” and with Buyer Parent, the “ Buying Parties ”); ProQuest Company (“ Parent ”), a Delaware Corporation; ProQuest Canada/U.K. Holdings, LLC, a Delaware limited liability company and wholly-owned subsidiary of Parent (“ Canada/U.K. LLC ”); and, solely for purposes of Article V and Section 12.1, Cambridge Scientific Abstracts, Limited Partnership, a Maryland limited partnership (“ Guarantor ”). Parent, the Buying Parties and Guarantor may be referred to in this Agreement individually as a “ Party ” or collectively as “ Parties .” Capitalized terms used herein shall have the meanings set forth in Article I unless otherwise defined herein.

RECITALS

WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, Buyer Parent desires to purchase from the U.S. Company 1,000 shares of the Preferred Stock (as hereinafter defined) (such transaction, the “ Issuance ”);

WHEREAS, the U.S. Company and Buyer Parent desire to establish certain rights and obligations in connection therewith;

WHEREAS, Section 18-209 of the Delaware Act authorizes the merger of a Delaware limited liability company with and into another domestic limited liability company;

WHEREAS, in connection with and immediately after the Issuance, Buyer Parent desires to merge Canada/U.K. LLC with and into Buyer Sub (the “ Merger ,” together with the Issuance, the “ Transactions ”), upon the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, following the consummation of the Transactions, Buyer Parent shall cause Buyer Sub (or a wholly-owned subsidiary of Buyer Sub) to merge with and into the U.S. Company.

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in this Agreement, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Defined terms used in this Agreement shall have the following meanings ascribed to such terms:

“ Acquired Entities ” shall mean the U.S. Company, and its Subsidiaries (except for Voyager Holding Corp. and its Subsidiaries which shall be deemed Retained Subsidiaries), and the Foreign Subsidiaries.

“ Acquisition Proposal ” shall mean any inquiry, proposal or offer from any Person or Group, as such term is defined in Section 13(d)(3) of the Securities and Exchange Act of 1934, as amended (other than the Buying Parties) relating to any direct or indirect acquisition (whether in a single transaction or a series of related transactions) (i) of assets included in the Business (excluding sales of assets in the ordinary course of business) that in aggregate constitutes 35% or more of the value of the Business’s assets or to which in aggregate 35% or more of the Business’s net revenues or net earnings are attributable, taken as a whole, (ii) 35% or more of any class or series of capital stock of any the Acquired Entities (by vote or value) or (iii) any merger, reorganization, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving the assets of the Business with a value set forth in clause (i) of this definition, other than the Transactions.

“ Affiliate ” shall mean, with respect to any Person, any other Person that controls, is controlled by, or is under common control with such Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, by ownership of securities, contract, credit arrangement or otherwise.

“ Agreement ” shall have the meaning set forth in the preamble.

“ Allocated Tax Credit ” shall mean any Tax refund, credit or reduction in otherwise required Tax payments attributable to the minimum tax credit carryovers and general business credit carryovers allocated to the U.S. Company as of the Closing Date pursuant to the Treasury Regulations under Section 1502 of the Code.

“ Allocated Tax Credits Benefit ” shall mean the value of any Allocated Tax Credit actually realized by the U.S. Company, the Buying Parties, or any Group of which any of the U.S. Company or a Buying Party is a member. The extent to which an Allocated Tax Credit is realized shall be determined by comparing (i) the amount of the federal Income Tax liability shown on any federal Income Tax Return that includes an Allocated Tax Credit in the calculation of Tax liability with (ii) the amount of such Tax liability computed without the use of such Allocated Tax Credit.

“ Alternative Proposal ” shall mean any inquiry, proposal or offer from any Person or Group, as such term is defined in Section 13(d)(3) of the Securities and Exchange Act of 1934, as amended (other than the Buying Parties) relating to any direct or indirect acquisition or purchase (whether in a single transaction or a series of related transactions) (i) of a business or division (or more than one of them) that in aggregate constitutes 75% or more of the value of Parent’s assets or to which in aggregate 75% or more of Parent’s net revenues or net earnings are attributable, taken as a whole, (ii) 75% or more of any class or series of capital stock of Parent (by vote or value) or (iii) any merger, reorganization, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving any of Parent (or any Subsidiary of Parent whose business constitutes 75% or more of the net revenues, net earnings or assets of Parent and its Subsidiaries, taken as a whole).

 

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“ Antitrust Laws ” shall mean the Sherman Act, the Clayton Act, the HSR Act, the Federal Trade Commission Act and all other applicable Laws issued by any Governmental Authority that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.

“ Base Price ” shall have the meaning prescribed to such term in Section 2.3(b).

“ Beneficial Interest ” shall mean the right to vote, receive the dividends and distributions on or sell or cause the sale, transfer or any other disposition whatsoever of, and all other rights incident to legal and beneficial ownership of, the securities subject to such interest.

“ Benefit Plans ” shall mean all employee benefit plans (as defined in Section 3(3) of ERISA, whether or not subject to ERISA), pension, retirement, stock purchase, stock option, severance, employment, change-in-control, vacation, medical, dental, vision care, disability, employee relocation, cafeteria benefit, dependant care, life or accident insurance, equity-related service award, car allowance, fringe benefit, collective bargaining, bonus, incentive and deferred compensation plans and agreements, including governmental, state sponsored, social or similar arrangements (a) under which any Business Employee currently has any current or future right to benefits or (b) under which any Acquired Entity has or may have any liability.

“ Books and Records ” shall have the meaning prescribed to such term in Section 6.6(a).

“ Business ” shall mean the business of providing content through paper, electronic, digital, compact disc and microfilm media to schools, academic institutions, corporations and public libraries on a worldwide basis by Parent through the Acquired Entities on the date hereof; provided , however , that the Business shall not include the Parent’s Voyager business segment, including the K-12 Curriculum and Reading A-Z business.

“ Business Day ” shall mean any day, excluding Saturday, Sunday and any other day on which commercial banks in New York, New York are authorized or required by Law to close.

“ Business Employees ” shall mean Current Business Employees and Other Business Employees, or any one of them.

“ Buyer Event ” shall have the meaning prescribed to such term in Section 6.7(l)(3).

“ Business IT Systems ” means all computer systems and networks, including all hardware, equipment, computer software and Internet websites and content therein, owned by, licensed to or leased by the Business that are used or held for use primarily in connection with the Business.

“ Buyer Group Company ” shall have the meaning prescribed to such term in Section 8.5(a)(1).

 

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“ Buyer Indemnitees ” shall have the meaning prescribed to such term in Section 10.1(a).

“ Buyer Material Adverse Effect ” shall mean a material adverse effect on the ability of any of the Buying Parties to consummate the Transactions and perform all of its obligations hereunder.

“ Buyer Notice ” shall have the meaning prescribed to such term in Section 8.2.

“ Buyer Parent ” shall have the meaning prescribed to such term in the preamble.

“ Buyer Parent Termination Fee ” shall have the meaning prescribed to such term in Section 11.3(b).

“ Buyer Savings Plan ” shall have the meaning prescribed to such term in Section 6.7(c).

“ Buyer Sub ” shall have the meaning prescribed to such term in the preamble.

“ Buying Parties ” shall have the meaning prescribed to such term in the preamble.

“ Canada/U.K. LLC ” shall have the meaning prescribed to such term in the preamble.

“ Cash Flow ” shall have the meaning prescribed to such term in Section 4.7.

“ Clayton Act ” shall mean the Clayton Act of 1914, as amended, and the rules and regulations promulgated thereunder, and any successor to such statute, rules or regulations.

“ Closing ” shall have the meaning prescribed to such term in Section 9.1.

“ Closing Date ” shall have the meaning prescribed to such term in Section 9.1.

“ Closing Working Capital Value ” shall be determined in accordance with the principles employed in Schedule 1.1 hereto.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder, and any successor to such statute, rules or regulations.

“ Commitment Letters ” shall have the meaning prescribed to such term in Section 5.6.

“ Common Stock ” shall mean all common shares of stock of the U.S. Company issued and outstanding as of the Closing Date.

“ Confidentiality Letter ” shall mean the Nondisclosure Agreement dated July 26, 2006 between Parent and Cambridge Information Group, Inc.

 

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“ Continuing Employees ” shall have the meaning prescribed to such term in Section 6.7(a).

“ Contract ” shall mean any contract or other legally binding agreement.

“ Controlled Group Liabilities ” are any and all liabilities incurred (a) under Title IV of ERISA, (b) under Section 302 of ERISA, (c) under Sections 412 and 4971 of the Code, and/or (d) as a result of Parent failing to comply with the continuation coverage requirements of Section 601 et. seq. of the Code and Section 701 et. seq. of ERISA, in each case relating to any Employee Benefit Plan.

“ Current Assets ” shall mean those current and other assets of the Acquired Entities set forth on Schedule 1.1 hereto.

“ Current Business Employee ” shall mean all Persons who are employed by the Acquired Entities.

“ Current Liabilities ” shall mean those current and other liabilities of the Acquired Entities set forth on Schedule 1.1 hereto.

“ Debt Financing ” shall have the meaning prescribed to such term in Section 5.6.

“ Deed ” shall have the meaning prescribed to such term in Section 6.7(l)(1).

“ Delaware Act ” shall mean the Delaware Limited Liability Company Act, 6 Del.C. §18-101, et seq.

“ Designated Arbitrator ” shall have the meaning prescribed to such term in Section 3.2(b).

“ Disclosed Contracts ” shall have the meaning prescribed to such term in Section 4.11(b).

“ Employee Welfare Benefit Plan ” shall have the meaning set forth in ERISA §3(1).

“ Environmental Law ” shall mean all U.S. and foreign federal, state, local and other statutes and regulations having the force of law and as in force on the date of this Agreement and concerning pollution or protection of the environment, including all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control, or cleanup of any Hazardous Substances, materials, or wastes, chemical substances, or mixtures, pollutants, contaminants, toxic chemicals.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder, and any successor to such statute, rules or regulations.

 

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“ ERISA Affiliate ” means any entity that would be deemed a “single employer” with Parent or any of the Acquired Entities under Section 414(b),(c),(m) or (o) of the Code or Section 4001 of ERISA.

“ Excluded Assets ” shall mean (a) the equity interests or other Beneficial Interests in Voyager Holding Corp. and its Subsidiaries, (b) any and all assets, properties, rights and claims of ProQuest Information Access Canada that are not used exclusively in or arise exclusively out of the conduct of the Business, (c) any and all assets properties, rights and claims of the U.S. Company that are used primarily in or arise primarily out of the conduct of the K-12 Curriculum and Reading A to Z business as conducted as of the date hereof, (d) those assets, properties, rights and claims set forth on Schedule 1.2 hereto and (e) any refunds payable to the U.S. Company with respect to Michigan sales and use taxes for the years 1999 through 2005.

“ Excluded Liabilities ” shall mean (a) liabilities relating to or arising out of the Excluded Assets and (b) any liability of the U.S. Company for Michigan sales and use taxes for the years 1999 through 2005 in excess of amounts previously paid therefore by the U.S. Company.

“ Existing Severance Costs ” means the amount of unpaid cash severance as of the Closing Date payable to the terminated employees set forth on Schedule 1.3 .

“ Federal Trade Commission Act ” shall mean the Federal Trade Commission Act of 1914, as amended, and the rules and regulations promulgated thereunder, and any successor to such statute, rules or regulations.

“ Foreign Subsidiaries ” shall mean (a) ProQuest Information Access Canada and (b) ProQuest UK Holdings, Ltd., ProQuest Information & Learning UK and its Subsidiary.

“ Funded Debt ” shall mean all debt (including principal and accrued and unpaid interest) for borrowed money, and all swaps or similar hedging instruments of the Business owed to any Affiliate or any bank, other financial institution or any other Person that under GAAP are required to be reflected as indebtedness, excluding current trade accounts payable and capitalized lease obligations of any Acquired Entity.

“ GAAP ” shall mean United States generally accepted accounting principles.

“ Group ” shall have the meaning prescribed to such term in Section 8.1(a).

“ Governmental Authority ” shall mean any foreign, federal, state, provincial or local governmental or regulatory commission, board, bureau, agency, court or regulatory or administrative body.

“ Guarantor ” shall have the meaning prescribed to such term in the preamble.

“ Hazardous Substances ” shall have the meaning of that term as defined in the Comprehensive Environmental Response, Compensation and Liberty Act of 1980, as amended, at 42 U.S.C. Section 9601(14) (and any regulations promulgated thereunder).

 

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“ HSR Act ” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder, and any successor to such statute, rules or regulations.

“ IBM Cancellation Fee ” shall mean the remaining amount payable to IBM Global Services as of the Closing Date pursuant to Section 2.8.4 of that certain ProQuest Wind-Down Agreement & Transition Services Statement of Work, dated February 15, 2006, between IBM Global Services, Parent and the U.S. Company.

“ Income Taxes ” shall mean Taxes that are based on or related to net income.

“ Indemnifying Party ” shall have the meaning prescribed to such term in Section 10.3.

“ Initial Payment ” shall have the meaning prescribed to such term in Section 2.3(d).

“ Intellectual Property ” means United States and non-United States: (a) patents, patent applications and statutory invention registrations, (b) trademarks, service marks, trade names, trade dress, domain names and other identifiers of source or goodwill, together with the goodwill associated therewith, (c) copyrights, including copyrights in computer software, and Internet websites, (d) trade secrets, know-how, inventions (whether patented or not), and designs, and (e) registrations and applications for registration of the foregoing, including provisionals, divisions, continuations, continuations in part, reexaminations, reissues, renewals, extensions and counterparts thereof.

“ Intellectual Property Assets ” means all Intellectual Property that is owned by, licensed to, or otherwise used or held for use by the Business.

“ Issuance ” shall have the meaning prescribed to such term in the Recitals.

“ Issuance Price ” shall have the meaning prescribed to such term in Section 2.3(a).

“ Knowledge ”, when used to qualify any representation or warranty, shall mean that such Party has no actual knowledge that such representation or warranty is not true and correct to the same extent as provided in the applicable representation or warranty. For the purpose of this definition, (a) the “actual knowledge” of Parent shall mean the actual present awareness of Alan Aldworth, Richard Surratt, Todd Buchardt, David “Skip” Prichard, Bill Rozek and Kevin Norris and, for the purposes of Section 4.23 only, Suzanne BeDell and Rod Galvin, and (b) the “actual knowledge” of a Buying Party shall mean the actual present awareness of Andrew Snyder, Larisa Trainor and Michael Jakobowski.

“ Law ” shall mean any foreign, federal, state or local law, statute, ordinance, regulation, rule, constitution, code, order or treaty of any Governmental Authority.

“ Lease ” shall have the meaning prescribed to such term in Section 4.10(b).

 

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“ Leased Real Property ” shall have the meaning prescribed to such term in Section 4.10(b).

“ Liens ” shall mean all liens, charges, security interests, pledges, mortgages, easements or other encumbrances of any kind (other than restrictions on transfer generally arising under the Securities Act or other applicable securities Laws).

“ LLC Agreement ” shall have the meaning prescribed to such term in Section 2.2(b)(2).

“ Loss ” shall mean any liability, expense (including reasonable attorneys’ fees), loss, damage, obligation or responsibility; provided , however , Losses shall not include consequential damages, special damages, incidental damages, indirect damages, lost profits, punitive damages or similar items, except to the extent that such damages reflect actual amounts owed to any Person as a result of any Third Party Claim.

“ Material Adverse Effect ” shall mean any effect, event, change, condition or occurrence that has or would reasonably be expected to have a material adverse effect on (a) the results of operations, condition (financial or otherwise), assets or liabilities of the Business or the Acquired Entities taken as a whole, after taking into effect any insurance recoveries, other than effects relating to (i) changes, effects, events, occurrences or circumstances that generally affect the United States or the global economy or the industries in which the Business operates, except to the extent that the Business is affected in a disproportionate manner as compared to other similar businesses within the industry in which it operates, (ii) general economic, financial or securities market conditions in the United States or elsewhere, (iii) the execution, delivery or announcement of this Agreement or the announcement of the Transactions, (iv) changes in GAAP applicable to the Business after the date hereof, (v) changes in Laws or interpretations thereof by a Governmental Authority after the date hereof, (vi) changes, effects or events caused by or resulting from the taking of any action required or permitted by this Agreement or approved by Buyer Parent or (vii) any outbreak or material escalation of hostilities in which the United States is involved or any act of terrorism within the United States or directed against its facilities or citizens wherever located or (b) the ability of the U.S. Company or Canada/U.K. LLC to consummate the Transactions.

“ Maximum Amount ” shall have the meaning prescribed to such term in Section 10.1(b)(2).

“ Merger ” shall have the meaning prescribed to such term in the Recitals.

“ Minimum Amount ” shall have the meaning prescribed to such term in Section 10.1(b)(1).

“ Names and Marks ” shall have the meaning prescribed to such term in Section 6.9(a).

“ Objection ” shall have the meaning prescribed to such term in Section 3.2(b).

 

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“ Objection Disputes ” shall have the meaning prescribed to such term in Section 3.2(b).

“ Other Business Employees ” shall mean (i) all Persons who were previously employed by the Acquired Entities, and (ii) directors, consultants and independent contractors who perform services for the Acquired Entities.

“ Owned Real Property ” shall have the meaning prescribed to such term in Section 4.10(a).

“ Parent ” shall have the meaning set forth in the preamble.

“ Parent Affiliated Group ” shall have the meaning prescribed to such term in Section 4.14(a).

“ Parent’s Auditors ” shall mean KPMG LLP.

“ Parent Disclosure Schedule ” shall mean the schedules delivered by Parent to the Buying Parties in a letter executed by Parent dated the date hereof.

“ Parent Group Company ” shall have the meaning prescribed to such term in Section 8.5(a)(1).

“ Parent Guarantees ” shall have the meaning prescribed to such term in Section 6.8.

“ Parent Indemnitees ” shall have the meaning prescribed to such term in Section 10.1(c).

“ Parent Termination Fee ” shall have the meaning prescribed to such term in Section 11.3(a).

“ Party ” or “ Parties ” shall have the meaning set forth in the preamble.

“ Paying Party ” shall have the meaning prescribed to such term in Section 6.7(l)(4).

“ PBGC ” shall have the meaning prescribed to such term in Section 4.16(c).

“ Permits ” shall mean licenses, permits or franchises issued by any Governmental Authority and other certificates, authorizations and approvals of any Governmental Authority.

“ Permitted Liens ” shall mean all (a) Liens set forth on Schedule 1.4 ; (b) Liens for Taxes, assessments and other governmental charges not yet due and payable or, if due, (i) not delinquent or (ii) being contested in good faith by appropriate proceedings during which collection or enforcement against the property is stayed; (c) mechanics’, workmen’s, repairmen’s, warehousemen’s, carriers’ or other like liens arising or incurred in the ordinary course of business; (d) liens associated with original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business;

 

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(e) with respect to any parcel of the Real Property: (i) easements, licenses, covenants, rights-of-way and other similar restrictions, including any other agreements or restrictions that are filed of record or otherwise set forth in a title insurance policy, title insurance commitment, abstract or other similar report or listing, (ii) any conditions that may be shown by a plat of survey or physical inspection of the Real Property and (iii) zoning, building and other similar restrictions, so long as none of (i), (ii) or (iii) prevent the use of such Real Property substantially as currently used; and (f) other Liens, that would not be reasonably be expected to materially impair the continued use or operation of the applicable asset or real property.

“ Permitted Transactions ” shall have the meaning prescribed to such term in Section 6.1.

“ Person ” shall mean any individual, firm, partnership, association, trust, corporation, joint venture, unincorporated organization, limited liability company, Governmental Authority or other entity, or, for the purposes of Section 6.3, group (which term will include a “group” as such term is defined in section 13(d)(3) of the Exchange Act).

“ Pre-Closing Period ” shall have the meaning prescribed to such term in Section 8.1(a).

“ Preferred Stock ” shall mean the U.S. Company’s Series A Preferred Stock, the certificate of designation of which is attached hereto as Exhibit A .

“ Preliminary Statement ” shall have the meaning prescribed to such term in Section 3.1.

“ Proceeding ” shall mean any action, suit or formal investigation.

“ Proceeding Notice ” shall have the meaning prescribed to such term in Section 8.2.

“ Proper Courts ” shall have the meaning prescribed to such term in Section 13.9.

“ ProQuest Equity Plans ” shall mean the Bell and Howell Company 1995 Stock Option Plan, the 2003 ProQuest Strategic Performance Plan, the Non-Employee Directors’ Stock Option Plan and any other plan or arrangement pursuant to which equity awards have been made to Business Employees.

“ ProQuest Information Access Canada ” shall mean ProQuest Information Access Limited, a Canadian corporation.

“ ProQuest Information & Learning UK ” shall mean ProQuest Information & Learning Limited, a company incorporated in England and Wales.

“ ProQuest Savings Plan ” shall have the meaning prescribed to such term in Section 6.7(c).

 

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“ ProQuest UK Holdings ” shall mean ProQuest UK Holdings Limited, a company incorporated in England and Wales.

“ Purchase Price ” shall have the meaning prescribed to such term in Section 2.3(c).

“ Qualified Claims ” shall have the meaning prescribed to such term in Section 10.1(b)(1).

“ Real Property ” shall have the meaning prescribed to such term in Section 4.10(c).

“ Receiving Party ” shall have the meaning prescribed to such term in Section 6.7(l)(4).

“ Reference Statement ” shall have the meaning prescribed to such term in Schedule 1.1.

“ Related Party Transaction ” shall have the meaning prescribed to such term in Section 4.21.

“ Representatives ” shall mean, with respect to any party hereto, that Party’s employees, officers, directors, agents, accountants, consultants, legal counsel, investment bankers, financing sources, agents and other representatives.

“ Restrictions ” shall mean any transfer restrictions, proxies, voting agreements, agreements to sell or purchase and similar restrictions (other than restrictions on transfer generally arising under the Securities Act or other applicable securities Laws).

“ Retained Subsidiaries ” shall mean Voyager Holding Corp. and its Subsidiaries.

“ Savings Plan Participants ” shall have the meaning prescribed to such term in Section 6.7(c).

“ SEC ” shall mean the Securities and Exchange Commission, and any successor thereto.

“ Second Merger ” shall have the meaning prescribed to such term in Section 6.15.

“ Second Merger Common Stock Consideration ” shall have the meaning prescribed to such term in Section 6.15.

“ Securities Act ” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, and any successor to such statute, rules or regulations.

“ September Working Capital Value ” shall mean - $110,366,000.

“ Serial Solutions Earnout Amount ” shall mean the amount of “Earn-out Payments” payable as of the Closing Date pursuant to that certain Stock Purchase Agreement dated as of July 7, 2004, by and among Parent, the U.S. Company, Serial Solutions, Inc. and the stockholders of Serial Solutions, Inc.

 

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“ Sherman Act ” shall mean the Sherman Act of 1890, as amended, and the rules and regulations promulgated thereunder, and any successor to such statute, rules or regulations.

“ Stand-Alone Benefit Plans ” shall have the meaning prescribed to such term in Section 6.7(b).

“ Straddle Period ” shall have the meaning prescribed to such term in Section 8.1(a).

“ Subsidiary ” or “ Subsidiaries ” of any Person shall mean any corporation, partnership, limited liability company or other legal entity in which such Person (either alone or through or together with any other Subsidiary), owns, directly or indirectly, 50% or more of the stock or other equity or ownership interests, the holder of which is generally entitled to elect a majority of the board of directors or other governing body of such legal entity.

“ Superior Proposal ” means any bona fide written Alternative Proposal that Parent’s Board determines in good faith (after consultation with its financial advisor) to be more favorable (taking into account (i) all financial and strategic considerations, including relevant legal, financial, regulatory and other aspects of such Alternative Proposal and the Transactions deemed relevant by Parent’s Board, (ii) the identity of the third party making such Alternative Proposal, (iii) the anticipated timing, conditions and prospects for completion of such Alternative Proposal, including the prospects for obtaining regulatory approvals and financing, and any third party shareholder approvals and (iv) the other terms and conditions of such Alternative Proposal) to Parent’s stockholders than the Transactions.

“ Supplemental Information ” shall have the meaning prescribed to such term in Section 6.11.

“ Surviving LLC ” shall have the meaning prescribed to such term in Section 2.2.

“ Taxes ” shall mean (i) any federal, state, provincial, local, territorial and foreign income, profits, capital gains, franchise, gross receipts, payroll, sales, employment, use, property, real estate, excise, value added, estimated, stamp, withholding and any other taxes, duties or assessments, together with all interest, penalties and additions imposed with respect to such amounts or (ii) any liability for the taxes of any Person other than the Acquired Entities (A) under Treasury Regulation § 1.1502-6 (or any similar provision of state, local or foreign Law), (B) as a transferee or successor, (C) by contract or (D) otherwise.

“ Tax Returns ” shall mean all federal, state, local, provincial and foreign tax returns, declarations, statements, reports, schedules, forms and information returns and any amended tax return relating to Taxes (as they relate to the Business).

“ Termination Date ” shall mean April 1, 2007.

 

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“ Third Party Claim ” shall have the meaning prescribed to such term in Section 10.4.

“ Transaction Bonuses ” shall mean transaction bonuses which become payable in connection with the Transactions, other than those payable by Parent.

“ Transactions ” shall have the meaning prescribed to such term in the Recitals.

“ Transition Services Agreement ” shall have the meaning prescribed to such term in Section 9.4.

“ UK Companies ” means ProQuest Information & Learning UK and ProQuest UK Holdings Ltd.

“ UK Pension Plan ” shall have the meaning prescribed to such term in Section 6.7(l)(1).

“ UK Pension Underfunding ” shall have the meaning prescribed to such term in Section 6.7(l)(1).

“ Units ” shall have the meaning prescribed to such term in Section 2.2(a).

“ U.S. Company “ shall have the meaning prescribed to such term in the preamble.

“ Voyager Holding Corp. ” shall mean Voyager Holding Corp., a Delaware corporation.

“ Voyager Transfer ” shall mean the transfer of all of the issued and outstanding capital stock of Voyager Holding Corp. to Parent or a designated Subsidiary of Parent.

ARTICLE II

TRANSACTIONS; CONSIDERATION

2.1 Issuance of Preferred Stock . Subject to the satisfaction or waiver of the conditions set forth in Article VII, at the Closing and as of the Closing Date (as hereinafter defined), the U.S. Company shall issue to Buyer Parent (or to a wholly-owned Subsidiary of Buyer Parent designated in writing at least two (2) days prior to the Closing Date), 1,000 shares of Preferred Stock, and Buyer Parent shall deliver (or cause to be delivered) the Issuance Price to the U.S. Company in exchange therefor.

2.2 Merger . Subject to the satisfaction or waiver of the conditions set forth in Article VII, at the Closing and as of the Closing Date, and in accordance with Section 18-209 of the Delaware Act, immediately after the Issuance on the Closing Date and the UK Pension Underfunding payment pursuant to Section 6.7(l)(1) and (2) (if applicable), Canada/U.K. LLC shall be merged with and into Buyer Sub and the separate existence of Canada/U.K. LLC shall thereupon cease, and Buyer Sub, as the surviving entity, shall by virtue of the Merger continue its existence as a limited liability company under the laws of the State of Delaware (the “ Surviving LLC ”).

 

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(a) Conversion of Units . At the Closing Date, by virtue of the Merger, and without any action or the part of Buyer Sub or Canada/U.K. LLC:

(1) all membership interests of Buyer Sub outstanding immediately prior to the Closing date shall be remain outstanding as membership interests in the Surviving LLC.

(2) all membership interests of Canada/U.K. LLC outstanding immediately prior to the Closing Date (the “ Units ”) shall be exchanged for the right to receive, in the aggregate, the Base Price.

(b) The Surviving LLC .

(1) The name of the Surviving LLC from and after the Closing Date shall be “I&L Operating LLC”.

(2) The Certificate of Formation and the Limited Liability Company Agreement of Buyer Sub (the “ LLC Agreement ”), as in effect on the date hereof, shall, from and after the Closing Date, be and continue to be the Certificate of Formation and the LLC Agreement of the Surviving LLC unless and until amended in accordance with their terms and applicable law.

(3) As of the Closing Date, the managers of Buyer Sub immediately prior to the Closing Date shall manage the Surviving LLC in accordance with the Delaware Act and the LLC Agreement of the Surviving LLC.

(4) The officers of Buyer Sub immediately prior to the Closing Date shall be the officers of the Surviving LLC, each of whom shall hold office until his or her respective successor is elected and shall qualify in accordance with the LLC Agreement of the Surviving LLC.

(c) Effects of the Merger . Upon the Merger, for all purposes of the laws of the State of Delaware:

(1) all of the rights, privileges and powers of Buyer Sub and Canada/U.K. LLC, and all property, real, personal and mixed, and all debts due to Buyer Sub and Canada/U.K. LLC, as well as all other things and causes of action belonging to Buyer Sub and Canada/U.K. LLC, shall be vested in the Surviving LLC and shall thereafter be the property of the Surviving LLC as they were of Buyer Sub and Canada/U.K. LLC;

(2) the title to any real property vested by deed or otherwise, under the laws of the State of Delaware, in Buyer Sub and Canada/U.K. LLC, shall not revert or be in any way impaired;

 

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(3) all rights of creditors and all liens upon any property of Buyer Sub and Canada/U.K. LLC shall be preserved unimpaired, and all debts, liabilities and duties of Buyer Sub and Canada/U.K. LLC shall attach to the Surviving LLC, and may be enforced against it to the same extent as if such debts, liabilities and duties had been incurred or contracted by the Surviving LLC; and

(4) the Merger shall not require Canada/U.K. LLC to wind up its affairs under Section 18-803 of the Delaware Act or pay its liabilities and distribute its assets under Section 18-804 of the Delaware Act.

(d) Transfer, Conveyance and Assumption . At the Closing Date, Buyer Sub shall continue in existence as the Surviving LLC, and without further transfer, succeed to and possess all of the rights, privileges and powers of Canada/U.K. LLC, and all of the assets and property of whatever kind and character of Canada/U.K. LLC shall vest in the Surviving LLC without further act or deed; thereafter, Buyer Sub, as the Surviving LLC, shall be liable for all of the liabilities and obligations of Canada/U.K. LLC, and any claim or judgment against Canada/U.K. LLC may be enforced against Buyer Sub, as the Surviving LLC, in accordance with Section 18-209 of the Delaware Act.

(e) Further Assurances . If at any time Buyer Sub shall consider or be advised that any further assignment, conveyance or assurance is necessary or advisable to vest, perfect or confirm of record in the Surviving LLC the title to any property or right of Canada/U.K. LLC, or otherwise to carry out the provisions hereof, the proper representatives of Canada/U.K. LLC as of the Closing Date shall execute and deliver any and all proper deeds, assignments, and assurances and do all things necessary or proper to vest, perfect or convey title to such property or right in the Surviving LLC, and otherwise to carry out the provisions hereof.

2.3 Purchase Price .

(a) The aggregate consideration in the Issuance for all of the Preferred Stock shall be $122,000,000 (the “ Issuance Price ”). Immediately after the Issuance, but before the Merger, the U.S. Company shall use the net proceeds of the Issuance (i) to repay Funded Debt owed by the U.S. Company to Parent and, following such repayment, all intercompany balances between Parent and its Subsidiaries (other than the Acquired Entities), on the one hand, and the Acquired Entities, on the other hand, shall be cancelled, and (ii) to cause UK Holdings to make the UK Pension Underfunding payment pursuant to Section 6.7(l)(1) and (2) (if applicable).

(b) The aggregate consideration in the Merger shall be $222,262,000 less the Issuance Price, less the Second Merger Common Stock Consideration, less the amount of the Funded Debt of the Acquired Entities as of the Closing Date (after giving effect to the transactions referred to in the second sentence of Section 2.3(a)), less the Transaction Bonuses, less the Existing Severance Costs, less the Serial Solutions Earnout Amount, less the IBM Cancellation Fee (the “ Base Price ”).

 

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(c) The aggregate consideration in the Transactions shall be the Issuance Price, plus the Base Price, plus the Second Merger Common Stock Consideration, subject to adjustment pursuant to Article III below (the “ Purchase Price ”).

(d) Payment . At the Closing, (i) Buyer Parent shall pay to the U.S. Company the aggregate amount of the Issuance Price in immediately available U.S. federal funds, and (ii) Buyer Sub shall pay to the holders of Units the aggregate amount of the Base Price in immediately available U.S. federal funds the Base Price (collectively, the “ Initial Payment ”), to an account designated in writing by Parent at least two (2) Business Days prior to the Closing Date.

(e) Purchase Price Allocation . Schedule 2.3(e) sets forth the allocation of the consideration for the Transactions. The Buying Parties and Parent agree that no Party will take a position on any report, return, or other documents filed with any Governmental Authority or in any Proceeding that is in any manner inconsistent with Schedule 2.3(e) .

ARTICLE III

ADJUSTMENTS TO PURCHASE PRICE

3.1 Adjustment Calculation . Not later than ninety (90) days after the Closing Date, Buyer Parent shall deliver to Parent a statement of the Closing Working Capital Value (the “ Preliminary Statement ”). The Preliminary Statement shall include Buyer’s calculation of Closing Working Capital Value. The Preliminary Statement shall be prepared in accordance with Schedule 1.1 .

3.2 Final Determination .

(a) If Parent indicates in writing its acceptance of the Preliminary Statement and of Buyer Parent’s calculation of the Closing Working Capital Value, or fails to object thereto in accordance with Section 3.2(b), then Buyer Parent’s calculation of the Closing Working Capital Value reflected in the Preliminary Statement shall be deemed to be the final Closing Working Capital Value. When determining the final amount of the Closing Working Capital Value, the Closing Working Capital Value shall be decreased by fifty percent (50%) of the amount of any accruals incurred by the Acquired Entities between the period commencing on October 1, 2006 and ending on the Closing Date for payment obligations of the Acquired Entities or the Buying Parties referenced in Schedule 3.2(a ) (it being understood that such accruals shall be excluded from the calculation of September Working Capital Value and from the calculation of the Closing Working Capital Value except as expressly provided in this sentence). Such accruals shall be determined consistent with the internal balance sheet of the Acquired Entities at September 30, 2006.

(b) Parent may indicate in writing its objection to the calculation of the Closing Working Capital Value by written notice to Buyer Parent delivered within twenty (20) days following delivery by Buyer Parent of the Preliminary Statement (the “ Objection ”), which shall specify in detail any disputes or objections thereto (the “ Objection Disputes ”) and Parent’s proposed resolution of each such dispute. If proper Objection is timely delivered, then Parent and Buyer Parent shall endeavor in good faith

 

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to resolve the Objection Disputes and to agree on a mutually acceptable calculation of the Closing Working Capital Value. If, within twenty (20) days following delivery of the Objection, Parent and Buyer Parent have not resolved all Objection Disputes and agreed to the Closing Working Capital Value, then Buyer Parent and Parent shall engage one of the so-called “big four” accounting firms (other than Parent’s Auditors or the auditors used by Buyer Parent or its Affiliates), reasonably acceptable to Parent and Buyer Parent (the “ Designated Arbitrator ”), to resolve any unresolved Objection Disputes. If the parties fail to agree upon a Designated Arbitrator, then the Designated Arbitrator shall be a firm of certified public accountants designated by the American Arbitration Association in New York, New York. The Designated Arbitrator shall be instructed to set forth a procedure to provide for prompt resolution and make its determination in respect of the Closing Working Capital Value within thirty (30) days following its retention. The Closing Working Capital Value will be determined by the Designated Arbitrator in accordance with the Schedule 1.1 . Each Party shall submit to the Designated Arbitrator and exchange with each other, on a schedule to be determined by the Designated Arbitrator, a proposed Closing Working Capital Value, together with a statement, including all supporting documents or other evidence upon which it relies, setting forth such party’s explanation as to why its proposal is reasonable and appropriate. Based upon the Parties’ submission of such proposals and supporting documents to the Designated Arbitrator, the Designated Arbitrator shall resolve all unresolved Objection Disputes and shall determine the Closing Working Capital Value. The Designated Arbitrator’s determination shall be limited to awarding only one of the two proposals submitted, shall be made within fifteen (15) days of its receiving such proposals and supporting documents, and shall be set forth in a written statement delivered to Parent and Buyer Parent. The Designated Arbitrator’s determination of such Objection Disputes and the Closing Working Capital Value shall be final and binding upon the parties hereto. A judgment of a court of competent jurisdiction in accordance with Section 13.9 may be entered to enforce the Designated Arbitrator’s determination. All fees and costs of the Designated Arbitrator, if any, shall be paid by the Party whose Closing Working Capital Value is rejected by the Designated Arbitrator. The process set forth in this Section 3.2 shall be the exclusive remedy of the Parties for any disputes related to items reflected on the Preliminary Statement or covered by the calculation of the Closing Working Capital Value, whether or not the underlying facts and circumstances constitute a breach of any representations or warranties.

3.3 Purchase Price Adjustment .

(a) Following Closing, in accordance with Section 3.2, the Base Price will be increased or decreased as set forth below to arrive at the Purchase Price:

(1) if the Closing Working Capital Value exceeds the September Working Capital Value, the amount of such excess will be added to the Base Price and Buyer Parent shall pay the amount of such excess to Parent in accordance with Section 3.3(c); and

(2) if the Closing Working Capital Value is less than the September Working Capital Value, the amount of such deficit will be subtracted from the Base Price and Parent shall pay the amount of such excess to Buyer Parent in accordance with Section 3.3(c).

 

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(b) Any amount owing pursuant to Section 3.3(a) above shall bear interest from and including the Closing Date to, but excluding, the date of payment or delivery, as applicable, at a rate per annum equal to 8%, calculated daily on the basis of a year of three hundred sixty-five (365) days and the actual number of days elapsed.

(c) Any amounts owing under this Section 3.3 shall be paid by Buyer Parent or Parent, as the case may be, by wire transfer to the account or accounts specified by the payee within five (5) Business Days following the final determination of the Closing Working Capital Value.

3.4 Allocated Tax Credits Benefit .

(a) After the Closing, the Buyer Parent shall pay or cause to be paid to the Parent eighty percent (80%) of the amount of any Allocated Tax Credits Benefit not later than five (5) Business Days after the date on which the Company, the Buying Parties or any Group of which any of the Company or a Buying Party is a member files an annual (or part-year, in the case of a short Tax year) federal Income Tax Return with respect to a period for which an Allocated Tax Credits Benefit is actually realized.

(b) Within thirty (30) days of filing a federal Income Tax Return with respect to a period for which an Allocated Tax Credits Benefit is actually realized, the accounting firm that prepared the federal Income Tax Return shall provide the Parent with a notice setting forth the Allocated Tax Credits Benefit that was realized during such period.

3.5 Cooperation . Following the Closing, the Buying Parties shall and shall cause the Business and their officers, employees, consultants, accountants and agents to cooperate fully with Parent and its representatives in connection with Parent’s evaluation of the Preliminary Statements or any Objection Dispute and to provide any information reasonably requested by Parent and its representatives in connection with its evaluation of the Preliminary Statement or with any Objection Dispute.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT, THE U.S. COMPANY, AND CANADA/U.K. LLC

Except as set forth on the Parent Disclosure Schedule, Parent, the U.S. Company, and Canada/U.K. LLC hereby represent and warrant to the Buying Parties as follows:

4.1 Corporate Existence and Good Standing .

(a) Parent is a corporation validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, directly or indirectly, its assets and to carry on its business as now conducted. Each Acquired Entity is a corporation or similar legal entity, validly existing and in good standing under the laws of the jurisdiction of its formation and has all necessary corporate or other power and authority to conduct its business as it is now conducting business. Each Acquired Entity is legally qualified to transact business as a foreign corporation and is in good standing in each jurisdiction where

 

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the nature of its properties and the conduct of its business requires such qualification, except for those jurisdictions where the failure to so qualify or be in good standing would not reasonably be expected to have a Material Adverse Effect. True and complete copies of the Certificate of Incorporation, as amended, and Bylaws of the U.S. Company, each as in effect on the date hereof, have been made available to Buyer.

(b) Canada/U.K. LLC is a newly formed Delaware limited liability company whose only holdings consist of all of the issued and outstanding stock of ProQuest Information Access Limited and ProQuest UK Holdings Limited. Canada/U.K. LLC has been formed solely for the purpose of entering into the Merger and, prior to the Closing Date, will have no other assets and will have incurred no liabilities, except as contemplated herein.

4.2 Authority; Execution; Enforceability . Each of Parent, the U.S. Company, and Canada/U.K. LLC has all requisite power and authority to (a) execute and deliver this Agreement, (b) perform its obligations hereunder, and (c) consummate the Transactions contemplated hereby. The execution and delivery of this Agreement, the performance of its obligations hereunder, and the consummation of the Transactions, by each of Parent, the U.S. Company, and Canada/U.K. LLC has been duly authorized by all requisite action on the part of each of them and no other action on the part of Parent, the U.S. Company or Canada/U.K. LLC is necessary for the execution, delivery and performance of this Agreement or the consummation of the Transactions. Assuming the due authorization, execution and delivery of this Agreement by all other parties hereto, this Agreement constitutes the valid and binding obligation of Parent, the U.S. Company, and Canada/U.K. LLC, enforceable against Parent, the U.S. Company, and Canada/U.K. LLC in accordance with its terms, subject to (x) bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies generally and (y) general principles of equity.

4.3 Capitalization . The U.S. Company has an authorized capitalization consisting of 1,000 shares of Common Stock and 1,000 shares of Preferred Stock. All the shares to be issued hereunder to Buyer Parent will have been duly issued, fully paid and non-assessable. Except for rights arising under this Agreement, there is no, and immediately following the Closing there will not be any, outstanding option, warrant, right, subscription, call, unsatisfied preemptive right or other agreement or right of any kind to purchase or otherwise acquire from the U.S. Company any capital stock of the U.S. Company.

4.4 Absence of Conflicts . Except as set forth on Section 4.4 of the Parent Disclosure Schedule, the execution and delivery of this Agreement by Parent and the consummation by each of Parent, the U.S. Company, and Canada/U.K. LLC of the Transactions will not (a) violate, conflict with or result in the breach of the certificate of incorporation or bylaws (or similar organizational documents) of Parent, the U.S. Company, or Canada/U.K. LLC, (b) conflict with or violate any Law or order, judgment or decree of any Governmental Authority applicable to Parent or any Acquired Entity or (c) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination or cancellation, modification or acceleration of, any Contract to which Parent or any Acquired Entity is a party, except, in the case of clauses (b) and (c), as would not reasonably be expected to have a Material Adverse Effect.

 

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4.5 Governmental Approvals; Consents . No claim, legal action, suit, arbitration, governmental investigation or other legal or administrative Proceeding is pending or, to the Knowledge of Parent, threatened against any of Parent, the U.S. Company, and Canada/U.K. LLC or the Business which would enjoin or delay the Transactions. Except as required by Antitrust Laws or clearance with respect to the UK Pension contemplated by Section 6.7(l), no consent, approval, order or authorization of, license or permit from, notice to or registration, declaration or filing with any Governmental Authority or of any third party, is or has been required on the part of Parent or the Acquired Entities in connection with the execution and delivery of this Agreement or the consummation of the Transactions, except for such consents, approvals, orders or authorizations of, licenses or permits, filings or notices the failure of which to obtain or make would not reasonably be expected to have a Material Adverse Effect or which have been obtained or which may be necessary as a result of any facts relating solely to the Buying Parties or their Affiliates.

4.6 Acquired Entities .

(a) Section 4.6(a) of the Parent Disclosure Schedule sets forth for each Acquired Entity (i) its name and jurisdiction of formation, (ii) the authorized, issued and outstanding equity ownership interests of such entity, and (iii) the names of the holders thereof, and the number of ownership interests held by each such holder.

(b) Each holder of the ownership interests of each Acquired Entity listed on Section 4.6(a) of the Parent Disclosure Schedule has good and valid title to, and is the sole record and beneficial owner of, such ownership interests, free and clear of all Liens and Restrictions.

(c) All of the equity ownership interests of each Acquired Entity listed on Section 4.6(a) of the Parent Disclosure Schedule have been validly issued, have been fully paid and are nonassessable. There are no outstanding options, warrants, agreements or other rights of any kind relating to the sale or issuance of additional shares of capital stock or other securities in, or of any securities convertible into, exchangeable for or evidencing the right to purchase any shares of capital stock or other securities in any Acquired Entity.

4.7 Financial Representation . The Cash Flow of the Business was not less than $3.75 million for the 12 months ended September 30, 2006. For purposes of this Section 4.7 “ Cash Flow ” shall mean earnings before interest, taxes, depreciation and amortization, minus capital expenditures, plus or minus the change in the Working Capital balance between October 1, 2005 and September 30, 2006, minus cash payments for capitalized leases. For this purpose, Working Capital shall be determined in the same manner as Closing Working Capital Value and September Working Capital Value are determined for purposes of Schedule 1.1 .

4.8 Absence of Changes . Except as set forth on Section 4.8 of the Parent Disclosure Schedule or as contemplated or permitted by this Agreement, since October 1, 2006 (i) the Acquired Entities have conducted the Business in all material respects in the ordinary course consistent with past practice, (ii) there has not occurred any change or event that has resulted in, or would reasonably be expected to have, a Material Adverse Effect and (iii) the Acquired Entities and Parent and its Affiliates (relative to the Acquired Entities) have not:

 

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(a) sold, assigned, licensed, transferred, leased or otherwise disposed of assets having a fair market value in excess of $100,000, except for sales of inventory or non-exclusive licenses in the ordinary course of business;

(b) taken any action that, if taken during the period from the date of this Agreement through the Closing, would have required the consent of Buyer Parent under Section 6.1(a), (b) or (c); or

(c) entered into any agreement, arrangement, understanding or commitment to take any of the actions specified in clauses (a) through (c) in this Section 4.8.

4.9 Assets . Except as set forth on Section 4.9 of the Parent Disclosure Schedule, the assets of the Acquired Entities constitute substantially all of the properties, assets and rights used by the Acquired Entities in the conduct of the Business as currently conducted.

4.10 Real Property .

(a) Section 4.10(a) of the Parent Disclosure Schedule lists all of the real property and interests therein owned by any Acquired Entity (with all easements and other rights appurtenant to such property, the “ Owned Real Property ”) and, relative to each such property or interest, the Acquired Entity that owns it. The applicable Acquired Entity holds fee simple title to each applicable parcel of Owned Real Property, free and clear of any Liens, except Permitted Liens.

(b) Section 4.10(b) of the Parent Disclosure Schedule lists all of the material real property and interests therein leased or subleased by any Acquired Entity (the “ Leased Real Property ”). For each item of Leased Real Property, Section 4.10(b) of the Parent Disclosure Schedule lists the lease or sublease, pursuant to which the applicable Acquired Entity holds a possessory interest in the Leased Real Property and all material amendments, renewals, or extensions thereto (each, a “ Lease ”). To the Parent’s Knowledge, each Lease is valid and binding. The leasehold interest of an Acquired Entity with respect to each item of Leased Real Property is held free and clear of any Liens, except Permitted Liens. Except as set forth on Section 4.10(b) of the Parent Disclosure Schedule, no Acquired Entity is a sublessor of, and has not assigned any Lease covering, any portion of the Leased Real Property.

(c) The Owned Real Property and the Leased Real Property (collectively, the “ Real Property ”) constitute all material interests in real property currently owned or leased in connection with the Business. No Acquired Entity has received written notice that the location, construction, occupancy, operation or use of the buildings located on the Real Property violates any restrictive covenant or deed restriction recorded against such Real Property or any other Laws, except for such violations which would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

4.11 Contracts .

(a) Except as set forth in Section 4.11 of the Parent Disclosure Schedule, there are no outstanding Contracts to which any Acquired Entity is a party or by which any Acquired Entity is bound that:

(1) involve commitments by such Person for terms in excess of three (3) years and involve annual payments or receivables of more than $200,000;

 

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(2) individually involve payment of more than $500,000 in the aggregate by such Person and are not terminable by their terms, without penalty, on twelve (12) months or less notice;

(3) consist of obligations for Funded Debt in excess of $1,000,000;

(4) involve employment, severance or other agreements involving compensation of Business Employees for services rendered or to be rendered, other than arrangements with Business Employees having base salaries less than $150,000 per year;

(5) consist of Contracts for the supply of products or services, involving annual payments in excess of $250,000, which are required for the ongoing conduct of the Business following Closing and not reasonably available from another source;

(6) consist of Contracts for the license, use, development or disclosure of material Intellectual Property owned by a third party (other than Contracts for (i) the license of off-the-shelf computer software that is generally available to the public or (ii) content provided by publishers to the Acquired Entities in connection with the Business);

(7) consist of Contracts between an Acquired Entity, on one hand, and Parent or any of Parent’s other Affiliates that are not an Acquired Entity, on the other hand;

(8) grants any Lien upon any asset of the Business outside of the ordinary course of business, except for Permitted Liens;

(9) contains any covenant or provision currently in effect which by its terms prohibits the Business from competing with any Person in any geographic area in which the Business generated more than 5% of its revenue in fiscal year 2005; or

(10) provides by its terms that the Business indemnify any other Person, other than as is in the ordinary course of business.

(b) Contracts required to be disclosed on Section 4.11 of the Parent Disclosure Schedule are hereafter referred to as the “ Disclosed Contracts ”.

(c) Each Disclosed Contract is valid and binding on the applicable Acquired Entity, and, to the Knowledge of Parent, is valid and binding on the other parties thereto, except as would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect. The applicable Acquired Entity that is a party to the Disclosed Contract and, to the Knowledge of Parent, the other parties thereto are not in default or breach under any such Disclosed Contract, and there are no pending claims affecting the Disclosed Contracts as of which any Acquired Entity has written notice, except where such default, breach or claim would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

 

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4.12 Litigation; Orders . Except as set forth on Section 4.12 of the Parent Disclosure Schedule, there is no pending or, to the Knowledge of Parent, threat of any legal or administrative Proceeding against the Business or the Acquired Entities that would reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect. There is no judgment, order, injunction or decree imposed upon any Acquired Entity by any Governmental Authority relating to the Acquired Entity, except for such judgments, orders, injunctions or decrees which would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

4.13 Intangible Property Rights . Section 4.13(i) of the Parent Disclosure Schedule sets forth a true and complete list of all patents and patent applications, registered trademarks and trademark applications, registered copyrights and copyright applications, and domain name registrations included in the Intellectual Property Assets that are material to the operation of the Business as currently conducted. To the Knowledge of Parent, with respect to each item of Intellectual Property Assets that is material to the operation of the Business as currently conducted, an Acquired Entity has the valid right to own or use such Intellectual Property Asset, free and clear of any Liens, other than Permitted Liens. Except as set forth on Section 4.13(ii) of the Parent Disclosure Schedule, to the Knowledge of Parent, (a) no Person is engaging in any activity that infringes any Intellectual Property Asset that is material to the operation of the Business as currently conducted, (b) there is no pending or written threat of any claim, action or proceeding or allegation of infringement or offer of license asserted against Parent or the Acquired Entities alleging that the operation of the Business as currently conducted or the use of any Intellectual Property Assets in the operation of the Business as currently conducted infringes, misappropriates, dilutes, or violates the Intellectual Property of any third party, and (c) the operation of the Business as currently conducted, and the use of the Intellectual Property Assets in connection therewith, does not infringe, misappropriate, dilute, or violate the Intellectual Property of any third party. Except as set forth on Section 4.13(iii) of the Parent Disclosure Schedule or as otherwise provided in the Transition Services Agreement, each item of Intellectual Property Assets owned or used by the Acquired Entities immediately prior to the Closing hereunder will be owned or available for use by the Business on substantially similar terms and conditions immediately subsequent to the Closing hereunder. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the Acquired Entities are taking or have taken commercially reasonable actions to maintain, and the actions that, to the Knowledge of Parent, are required to protect, each Intellectual Property Asset. The Acquired Entities have a valid right to access and use all Business IT Systems in connection with the operation of the Business. Except for the services to be provided pursuant to the Transition Services Agreement, the consummation of the Transactions will not impair or interrupt, in any material respect, (i) the Acquired Entities’ or the Buying Parties’ access and use of, or their right to access and use, any material portion of the Business IT Systems and (ii) to the Knowledge of Parent, the Business’s customers’ and vendors’ access and use of any material portion of the Business IT Systems. The Acquired Entities have taken commercially reasonable steps (A) to secure the Business IT Systems from unauthorized access or use by any Person and (B) to ensure the continued and uninterrupted operation of the Business IT Systems, including employing adequate security, encryption, maintenance, disaster recovery, redundancy, backup, archiving and virus or malicious device scanning/protection measures. Neither Parent (with respect to the

 

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Business) nor any of the Acquired Entities has received written communication from any customer alleging that the Business IT Systems used by the Acquired Entities to provide products and services to their customers contain any material errors or problems of a material nature that disrupt their operation.

4.14 Tax Matters .

(a) Neither the U.S. Company nor any of its U.S. Subsidiaries has been a member of an affiliated group (within the meaning of Section 1504(a) of the Code or any similar group defined under a similar provision of state, local or foreign Law) filing a consolidated federal Income Tax Return other than a group the common parent of which is Parent (the “ Parent Affiliated Group ”).

(b) The Parent Affiliated Group has filed all material Income Tax Returns that it was required to file for each taxable period during which the U.S. Company or any of its U.S. Subsidiaries was a member of the Parent Affiliated Group and all such Income Tax Returns are true, correct and complete in all material respects. All Income Taxes owed by the Parent Affiliated Group (whether or not shown on any Tax Return) have been paid or have been adequately accrued for with respect to each taxable period during which the U.S. Company or any of its U.S. Subsidiaries was a member of the Parent Affiliated Group. No Parent or director or officer (or employee responsible for Tax matters) of any of Parent and its U.S. Subsidiaries expects any Governmental Authority to assess any additional material Income Taxes against Parent Affiliated Group for any taxable period during which the U.S. Company or any of its U.S. Subsidiaries was a member of the Parent Affiliated Group. There is no dispute or claim concerning any Income Tax Liability of the Parent Affiliated Group for any taxable period during which the U.S. Company or any of its U.S. Subsidiaries was a member of the Parent Affiliated Group either (A) claimed or raised by any Governmental Authority in writing or (B) as to which any of Parent or the directors and officers (and employees responsible for Tax matters) of any of Parent and its Subsidiaries has Knowledge based upon personal contact with any agent of such authority. Except as disclosed in Section 4.14(b) of the Parent Disclosure Schedule, Parent Affiliated Group has not waived any statute of limitations in respect of any material Income Taxes or agreed to any extension of time with respect to a material Income Tax assessment or deficiency for any taxable period during which the U.S. Company or any of its U.S. Subsidiaries was a member of the Parent Affiliated Group.

(c) Except as disclosed in Section 4.14(c) of the Parent Disclosure Schedule, each Acquired Entity has timely filed all material Tax Returns that it was required to file and each such Tax Return is true, correct and complete in all material respects. All Taxes due and owing (whether or not shown on any Tax Return) have either been timely paid by each Acquired Entity or have been adequately accrued for, and since October 1, 2006, no Acquired Entity has incurred any material liability for Taxes outside the ordinary course of business.

(d) No Acquired Entity is a party to any Tax sharing agreement. No Acquired Entity is subject to any joint venture, cooperative, partnership or other arrangement or contract that is treated as an entity (including a partnership) for Federal income tax purposes.

 

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(e) Each Acquired Entity, its officers, directors, or any employee responsible for Tax matters has complied with all rules and regulations relating to the withholding of Taxes and the remittance of withheld Taxes in connection with any amounts paid or owing to any employee, independent contractor, creditor, shareholder or other third party. No Governmental Authority is conducting or has proposed in writing to conduct an audit with respect to any Tax Returns filed by or with respect to any Acquired Entity. Except as set forth on Section 4.14(e) of the Parent Disclosure Schedule, no material Tax deficiency has been proposed or assessed in writing against any Acquired Entity, or with respect to the activities of any Acquired Entity. No power of attorney has been granted by or with respect to any Acquired Entity with respect to any matter relating to Taxes which remains in effect. No Acquired Entity has engaged in any transaction that would constitute a “reportable transaction,” a transaction substantially similar to a “reportable transaction,” or a “tax shelter” within the meaning of Sections 6011, 6111, 6662 or 6707A of the Code and the Treasury Regulations thereunder or any analogous or similar state, local, or foreign Law. Except as set forth on Section 4.14(e) of the Parent Disclosure Schedule, no Acquired Entity will be required to include any item of income in, or exclude any item of deduction from, any Tax period ending on or after the Closing Date as a result of any (i) change in method of accounting for a taxable period (or portion thereof) ending on or prior to the Closing Date, (ii) disposition made on or prior to the Closing Date, (iii) item having been reported on the completed contract method of accounting or the percentage of completion method of accounting, (iv) “closing agreement” as described in Section 7121 of the Code or similar state, local or foreign Tax Law, (v) prepaid amount received on or prior to the Closing Date (excluding any amounts realized pursuant to Section 455) or (vi) intercompany transaction or excess loss account described in Treasury Regulations under Code Section 1502 (or any corresponding or similar provision of state, local or foreign Tax Law). No claim has ever been made in writing by a Governmental Authority in a jurisdiction where any Acquired Entity does not file Tax Returns that such Acquired Entity is or may be subject to Tax in that jurisdiction.

(f) Parent has delivered to the Buying Parties (i) complete and correct copies of all material Tax Returns of each Acquired Entity, and of all material examination reports and statements of deficiencies assessed against or agreed to by any Acquired Entity for all taxable periods for which the applicable statute of limitations has not yet expired, and (ii) complete and correct copies of all federal consolidated income Tax Returns of the Parent Affiliated Group for the last three taxable years. Section 4.14(f) of the Parent Disclosure Schedule lists each state, local, county, municipal or foreign jurisdiction in which any Acquired Entity or any Subsidiary of an Acquired Entity files or is or has been determined by any Governmental Entity to be required to file a Tax Return or is or has been determined by a Governmental Entity to be liable for any Tax on a “nexus” basis at any time for a taxable period for which the statute of limitations has not expired.

(g) In the past five (5) years, no Acquired Entity has been a party to a transaction that has been reported as a reorganization within the meaning of Section 368 of the Code, or distributed a corporation (or been distributed) in a transaction that is reported to qualify under Section 355 of the Code.

 

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(h) Each of the Foreign Subsidiaries has timely filed all material Tax Returns that it was required to file and all such Tax Returns are true, correct and complete in all material respects, and has timely paid all Taxes required to be paid by it.

(i) There are no Liens for Taxes on any of the assets of the Acquired Entities, other than Permitted Liens.

(j) None of the Foreign Subsidiaries is engaged in a trade or business in the United States or has a permanent establishment in the United States.

(k) The aggregate Tax basis of the assets of the Business of the U.S. Company as of September 30, 2006, was at least $288 million, and there has been no change to the basis of such assets other than in the ordinary course of business since that date.

(l) The amount of net operating loss carryforwards of Bigchalk Inc. apportioned to the U.S. Company pursuant to the Treasury Regulations under Section 1502 of the Code in connection with the Transactions and the Second Merger will be at least $30 million.

(m) The aggregate Taxes payable in connection with the non-Income Tax matters described in item 5 under the heading “Current Examinations (Audits) in Process” in Section 4.14(e) of the Parent Disclosure Schedule shall not exceed $500,000.

4.15 Labor Matters .

(a) Except as described on Section 4.15 of the Parent Disclosure Schedule,

(1) neither Parent nor its Affiliates are party to any collective bargaining or similar agreement with respect to the Business;

(2) no material employee strike, work stoppage, lock-out or labor dispute is pending or, to Parent’s Knowledge, threatened against or involving the Business;

(3) no material unfair labor practice or similar charge or complaint against the Business is pending, or to Parent’s Knowledge, threatened; and neither Parent nor any of its Affiliates have engaged in any material unfair labor practices within the meaning of the National Labor Relations Act and the Railway Labor Act;

(4) no union grievance or similar complaint is pending or, to Parent’s Knowledge, threatened with respect to the Business that is material to the ongoing operation of the Business;

(5) no material collective bargaining or similar agreement is currently being negotiated or is currently subject to negotiation or renegotiation by Parent or its Affiliates with respect to the Business Employees; and

(6) no material action, suit or complaint, by or before any court, arbitrator or governmental body, agency or authority has been brought against Parent or any of its Affiliates by or on behalf of any Business Employee and is pending or, to Parent’s Knowledge, is threatened.

 

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(b) Parent and its Affiliates (i) are in compliance in all material respects with all applicable Laws respecting employment, employment practices, labor, terms and conditions of employment, occupational safety and wage and hours, in each case, with respect to the Business Employees; (ii) have withheld all amounts required by law or by agreement to be withheld from the wages, salaries and other payments to the Business Employees; (iii) are not liable for any arrears of wages or any penalty for failure to comply with any of the foregoing; and (iv) are not liable for any payment to any trust or other fund or to any governmental or administrative authority, with respect to unemployment compensation benefits, social security or other benefits for the Business Employees.

(c) Notwithstanding the generality of any other representations and warranties in this Agreement, the representations and warranties in this Section 4.15 and Section 4.16 shall be deemed the only representations and warranties in this Agreement with respect to matters directly or indirectly relating to, or arising out of, employment, employment practices, labor, terms and conditions of employment, occupational safety and wage and hours.

4.16 Employee Benefit Plans .

(a) Section 4.16(a) of the Parent Disclosure Schedule sets forth a list of material Benefit Plans.

(b) Each Benefit Plan has in all material respects been established, maintained and administered in accordance with its terms and in compliance with the applicable Laws, including, without limitation, ERISA and the Code.

(c) With respect to each Benefit Plan: (i) each plan which is intended to be “qualified” within the meaning of Section 401(a) of the Code has been determined to be so qualified by the Internal Revenue Service and is so qualified, and each related trust is exempt from taxation under Section 501(a) of the Code, if applicable; (ii) there has been no “prohibited transaction,” as such term is defined in Section 4975 of the Code or Section 406 of ERISA, within the last five (5) years, (iii) within the last five (5) years, no such plan has been terminated under either a distress or standard termination as provided in Title IV of ERISA, nor has any notice of intent to terminate any plan been filed with the Pension Benefit Guaranty Corporation (“ PBGC ”), nor has the PBGC issued any notice of intent to terminate a plan; and (iv) no plan has incurred any “accumulated funding deficiency,” as such term is defined in Section 412 of the Code and Section 302 of ERISA (whether or not waived) within the last five (5) years. Except as set forth on Section 4.16(c) of the Parent Disclosure Schedule, there are no material actions, suits or other claims pending with respect to any such Benefit Plan, other than routine claims for benefits, qualified domestic relations orders (as defined in ERISA Section 206(d)) and qualified medical child support orders (as defined in ERISA Section 609) and, to Parent’s Knowledge, no such actions, suits or other claims are threatened.

(d) Except as set forth on Section 4.16(d) of the Parent Disclosure Schedule, neither the execution and delivery of this Agreement, nor the consummation or performance of any of the transactions contemplated herein, will (either alone or together with

 

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any other event): (i) result in any payment (including, without limitation, any bonus, severance, unemployment compensation, or forgiveness of indebtedness) becoming due to any Business Employee, (ii) increase any benefit otherwise payable under any Benefit Plan, (iii) result in the acceleration of the time of payment, vesting or funding, of any such benefit, or (iv) result in any payment or provision of any benefit or other right that would constitute an “excess parachute payment” for purposes of Section 280G or Section 4999 of the Code.

(e) Neither Parent nor any ERISA Affiliate has or will have any liability (contingent or otherwise) to or in connection with (i) any Benefit Plan that is a “multiemployer plan,” within the meaning of Section 3(37) of ERISA, or (ii) any other Benefit Plan subject to Title IV of ERISA.

(f) Except as set forth in Section 4.16(f) of the Parent Disclosure Schedule, neither Parent nor its Affiliates (i) maintains or contributes to any Benefit Plan (excluding any plan mandated by law) which provides, or has any liability to provide, life insurance, health, severance or other employee welfare benefits to any Business Employee upon his or her retirement or termination of employment, except as may be required by Section 4980B of the Code; or (ii) has ever represented, promised or contracted in written form to any Business Employee (either individually or to Business Employees as a group) that such Business Employee(s) would be provided with life insurance, health, severance or other employee welfare benefits upon their retirement or termination of employment, except to the extent required by Section 4980B of the Code.

(g) Neither Parent nor its Affiliates has classified any individual as an “independent contractor” or of similar status who, according to a Benefit Plan or the law of the jurisdiction, should have been classified as an employee of the Acquired Entities or of similar status.

(h) Neither Parent nor its Affiliates has any liability, actual or contingent, by reason of any Business Employee who was improperly excluded from participating in any Benefit Plan.

(i) Parent and its Affiliates have complied in all material respects with all Laws relating to the employment or retention of Business Employees. There are no material lawsuits, grievances, proceedings, complaints or other proceedings pending, or to the knowledge of Parent, threatened, including involving governmental authorities and otherwise, in respect of such employment or retention.

(j) Notwithstanding the generality of any other representations and warranties in this Agreement, the representations and warranties in this Section 4.16 and Section 4.15 shall be deemed the only representations and warranties in this Agreement with respect to matters directly or indirectly relating to, or arising out of, Benefit Plans or any Laws relating to the employment or retention of Business Employees.

4.17 Compliance with Laws . Except as would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, (i) each Acquired Entity has all Permits required by any Governmental Authority for the operation of the

 

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Business and the use of its properties as presently conducted or used; (ii) all such Permits are in full force and effect and no action, claim or proceeding is pending nor overtly threatened in writing, to suspend, revoke, revise, limit, restrict or terminate any of such Permits or declare any such Permit invalid; and (iii) each Acquired Entity is in compliance with all Laws applicable to its existence, financial condition, operations, properties or Business, and neither Parent nor any Acquired Entity has received any written notice to the contrary.

4.18 Finders; Brokers . Neither Parent nor any Acquired Entity is party to any agreement with any finder or broker, or in any way obligated to any finder or broker for any commissions, fees or expenses, in connection with the origin, negotiation, execution or performance of this Agreement for which the Buying Parties will be liable.

4.19 Environmental Matters .

(a) The Acquired Entities are in compliance with all Environmental Laws applicable to the Business as presently conducted by the Acquired Entities except for such instances of noncompliance that would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

(b) Since January 1, 2003, neither Parent nor any Acquired Entity has received any written notice of the institution or pendency of any proceeding, investigation or claim by any Person alleging any liability under any Environmental Law arising from or relating to the conduct of the Business, as presently conducted by the Acquired Entities, except for such cases that have been concluded.

(c) To the Knowledge of Parent, the Owned Real Property and the Leased Real Property are free of any material contamination by any Hazardous Substances that would require any investigation, correction or remediation under any Environmental Law.

(d) None of the Acquired Entities are subject to any agreement with any Governmental Authority to correct noncompliance or alleged noncompliance with any Environmental Law, or to investigate or remediate the presence or alleged presence of any Hazardous Substances on any Real Property, except for such agreements that are no longer binding upon any Acquired Entity or do not impose cost or obligations on the Acquired Entities are material to the ongoing operations of the Business.

(e) Notwithstanding the generality of any other representations and warranties in this Agreement, the representations and warranties in this Section 4.19 shall be deemed the only representations and warranties in this Agreement with respect to matters directly or indirectly relating to, or arising out of, Environmental Laws or Hazardous Substances.

4.20 No Undisclosed Liabilities . Except as set forth on Section 4.20 of the Parent Disclosure Schedule, the Acquired Entities have no indebtedness, obligations or liabilities of any kind that are not accrued or reserved against in the Reference Statement, other than (a) liabilities or obligations incurred since September 30, 2006 in the ordinary course of business consistent with past practice, (b) liabilities or obligations incurred in connection with this Agreement or the Transactions, (c) liabilities or obligations arising under the express terms of any Contract (excluding any liabilities or obligations arising out of any breach or violation by the

 

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Acquired Companies of the terms and conditions of any such Contract), (d) Excluded Liabilities, or (e) liabilities or obligations that would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

4.21 Related-Party Transactions . Except as set forth on Section 4.21 of the Parent Disclosure Schedule or as contemplated by this Agreement or the Transition Services Agreement, since December 31, 2005, to the Knowledge of Parent, no Affiliate of Parent that is not an Acquired Entity (i) has been a party to any Contract, or has otherwise entered into any transaction, with the Acquired Entities that calls for the payment by or on behalf of the Business in excess of $250,000 per annum, or the delivery by the Business of goods or services with a fair market value in excess of $250,000 per annum, or provides for the Business to receive any payments in excess of, or any property with a fair market value in excess of, $250,000 per annum, or (ii) owns any material property or right, tangible or intangible, which is used by the Business (each, a “ Related Party Transaction ”).

4.22 Insurance . Section 4.22 of the Parent Disclosure Schedule contains a list of all policies of fire, liability, workers’ compensation, property or casualty insurance that are material to the Business and that are owned or held by Parent or the Acquired Entities for the benefit of the Business as of the date of this Agreement. To the Knowledge of Parent, all such policies are in full force and effect. The insurance policies listed in Section 4.22 of the Parent Disclosure Schedule are in amounts and have coverages as required by any Disclosed Contract.

4.23 Publishers . Except as set forth on Section 4.23 of the Parent Disclosure Schedule, since October 1, 2006, none of the 50 largest publishers (as measured by royalties during the twelve months ended December 31, 2005) listed on Section 4.23 of the Parent Disclosure Schedule, has notified Parent or any of the Acquired Entities that it is terminating, nor to the Knowledge of Parent has explicitly threatened to terminate in the last six months, its business relationship with Parent (with respect to the Business) or the Acquired Entities.

4.24 No Other Representations or Warranties . EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE IV, NEITHER PARENT, THE RETAINED SUBSIDIARIES NOR ANY OF THE ACQUIRED ENTITIES NOR ANY OTHER PERSON MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, WITH RESPECT TO THE ACQUIRED ENTITIES, OR THE BUSINESS, OPERATIONS, ASSETS, LIABILITIES, CONDITION (FINANCIAL OR OTHERWISE) OR PROSPECTS OF THE ACQUIRED ENTITIES OR THE NEGOTIATION, EXECUTION, DELIVERY OR PERFORMANCE OF THIS AGREEMENT BY PARENT, THE U.S. COMPANY, AND CANADA/U.K. LLC. THE BUYING PARTIES ACKNOWLEDGE THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, PARENT, THE U.S. COMPANY, AND CANADA/U.K. LLC HAVE NOT MADE, AND PARENT, THE U.S. COMPANY, AND CANADA/U.K. LLC HEREBY EXPRESSLY DISCLAIM AND NEGATE, AND THE BUYING PARTIES HEREBY EXPRESSLY WAIVE, ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO, AND THE BUYING PARTIES HEREBY EXPRESSLY WAIVE AND RELINQUISH ANY AND ALL RIGHTS, CLAIMS AND CAUSES OF ACTION AGAINST EACH

 

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OF PARENT, THE U.S. COMPANY, AND CANADA/U.K. LLC, THEIR AFFILIATES AND THEIR RESPECTIVE REPRESENTATIVES IN CONNECTION WITH, THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) HERETOFORE FURNISHED TO THE BUYING PARTIES AND THEIR RESPECTIVE REPRESENTATIVES BY OR ON BEHALF OF PARENT, THE U.S. COMPANY, AND CANADA/U.K. LLC. WITHOUT LIMITING THE FOREGOING, PARENT, THE U.S. COMPANY, AND CANADA/U.K. LLC ARE NOT MAKING ANY REPRESENTATION OR WARRANTY TO THE BUYING PARTIES WITH RESPECT TO ANY FINANCIAL PROJECTION OR FORECAST RELATING TO THE BUSINESS, OPERATIONS, ASSETS, LIABILITIES, CONDITION (FINANCIAL OR OTHERWISE) OR PROSPECTS OF THE ACQUIRED ENTITIES OR ANY SUBSET THEREOF. WITH RESPECT TO ANY PROJECTION OR FORECAST DELIVERED ON BEHALF OF PARENT, THE U.S. COMPANY, OR CANADA/U.K. LLC TO THE BUYING PARTIES OR THEIR RESPECTIVE REPRESENTATIVES, THE BUYING PARTIES ACKNOWLEDGE THAT (I) THERE ARE UNCERTAINTIES INHERENT IN ATTEMPTING TO MAKE SUCH PROJECTIONS AND FORECASTS, (II) THE BUYING PARTIES ARE FAMILIAR WITH SUCH UNCERTAINTIES, (III) THE BUYING PARTIES ARE TAKING FULL RESPONSIBILITY FOR MAKING THEIR OWN EVALUATION OF THE ADEQUACY AND ACCURACY OF ALL SUCH PROJECTIONS AND FORECASTS FURNISHED TO IT AND (IV) THE BUYING PARTIES SHALL HAVE NO CLAIM AGAINST ANY OF PARENT, THE U.S. COMPANY, AND CANADA/U.K. LLC, THE RETAINED SUBSIDIARIES, ANY ACQUIRED ENTITY OR THEIR RESPECTIVE AFFILIATES WITH RESPECT THERETO.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYING PARTIES

The Buying Parties and Guarantor jointly and severally represent and warrant to Parent, the U.S. Company, and Canada/U.K. LLC as follows:

5.1 Authority; Execution; Enforceability . Such Buying Parties and Guarantor have all requisite capacity, power and authority to (a) execute and deliver this Agreement, (b) perform their obligations hereunder, and (c) consummate the Transactions contemplated hereby. The execution and delivery of this Agreement, the performance of its obligations hereunder, and the consummation of the Transactions, in each case by such Buying Parties and Guarantor, has been duly authorized by all requisite actio