Exhibit
10.1
ASSET PURCHASE
AGREEMENT
by and
among
TRAVELZOO
INC.,
TRAVELZOO
K.K.,
AZZURRO
CAPITAL INC.
And
A Buyer Entity
to be Designated by
AZZURRO
CAPITAL INC.
Dated
September 30, 2009
TABLE
OF CONTENTS
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Page
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ARTICLE I DEFINITIONS
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1
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1.1
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“Acquisition Proposal”
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1
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1.2
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“Affiliate”
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1
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1.3
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“Agreement”
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2
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1.4
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“Asia Pacific Business”
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2
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1.5
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“Assumed Contracts”
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2
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1.6
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“Assumed Liabilities”
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2
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1.7
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“Arbitrator”
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2
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1.8
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“Accounting Firm”
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2
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1.9
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“Business”
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2
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1.10
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“Business Day”
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2
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1.11
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“Buyer”
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2
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1.12
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“Closing”
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2
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1.13
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“Closing Balance Sheet”
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2
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1.14
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“Closing Date”
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2
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1.15
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“Code”
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3
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1.16
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“Contract”
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3
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1.17
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“Effective Time”
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3
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1.18
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“Employee”
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3
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1.19
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“Encumbrances”
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3
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1.20
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“Excluded Assets”
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3
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1.21
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“Excluded Liabilities”
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3
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1.22
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“Excluded Party”
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3
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1.23
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“GAAP”
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3
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1.24
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“Hong Kong Affiliate”
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3
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1.25
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“Hong Kong Purchase
Agreement”
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3
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1.26
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“Hong Kong Purchased
Assets”
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3
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1.27
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“Hosting Agreement”
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3
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1.28
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“Indemnifying Party”
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3
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1.29
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“Indemnity Basket”
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3
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1.30
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“Indemnity Cap”
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3
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1.31
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“Injured Party”
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3
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1.32
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“Intellectual Property”
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3
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1.33
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“IRS”
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4
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1.34
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“Law” or
“Laws”
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4
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1.35
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“License Agreement”
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4
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1.36
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“Loss” or
“Losses”
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4
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1.37
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“Material Adverse Effect”
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4
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1.38
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“Net Working Capital”
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4
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1.39
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“Notice of Claim”
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4
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1.40
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“Notice of Dispute”
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4
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1.41
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“Notice of Intent to
Exercise”
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4
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1.42
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“Notice Period”
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4
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1.43
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“Option Agreement”
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4
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1.44
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“Ordinary Course”
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5
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1.45
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“Party”
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5
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1.46
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“Person”
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5
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1.47
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“Permitted Encumbrances”
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5
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1.48
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“Post-Closing Periods”
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5
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1.49
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“Pre-Closing Periods”
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5
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1.50
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“Purchase Price”
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5
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1.51
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“Purchased Assets”
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5
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1.52
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“Referral Agreement”
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5
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1.53
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“Records”
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5
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1.54
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“Representatives”
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5
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1.55
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“Seller”
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5
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1.56
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“Solicitation Period
End-Date”
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6
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1.57
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“Straddle Period”
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6
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1.58
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“Superior Proposal”
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6
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1.59
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“Tax” or
“Taxes”
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6
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1.60
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“Tax Returns”
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6
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1.61
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“Territory”
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6
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1.62
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“Total Current Assets”
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6
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1.63
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“Total Current
Liabilities”
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6
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1.64
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“Transition Services
Agreement”
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6
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1.65
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“Travelzoo”
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6
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1.66
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“Voting Agreement”
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6
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ARTICLE II PURCHASE AND SALE OF THE
BUSINESS
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7
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2.1
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Transfer of Assets and Liabilities
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7
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2.2
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Consideration
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7
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2.3
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Closing
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7
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2.4
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Purchase Price Adjustment
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7
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2.5
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Taxes
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9
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2.6
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Allocation of Purchase Price
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10
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2.7
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Completion of Transfers
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10
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2.8
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Excluded Liabilities
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11
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2.9
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Further Assurances
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11
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ARTICLE III REPRESENTATIONS AND
WARRANTIES OF SELLER AND TRAVELZOO
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11
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3.1
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Seller Existence and Power
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11
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3.2
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Seller Valid and Enforceable Agreement;
Authorization
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12
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3.3
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Taxes
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12
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3.4
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Litigation
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12
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3.5
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Condition of Real and Personal
Property
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12
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3.6
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Contracts
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13
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3.7
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Title
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13
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3.8
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Licenses and Permits
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13
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3.9
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Compliance with Laws
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13
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3.10
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Labor Matters
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13
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3.11
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Intellectual Property Matters
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14
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3.12
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Brokers, Finders
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14
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3.13
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Travelzoo Existence and Power
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14
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3.14
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Travelzoo Valid and Enforceable Agreement;
Authorization
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14
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3.15
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No Other Representations or
Warranties
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14
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
BUYER
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15
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4.1
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Existence and Power
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15
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4.2
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Valid and Enforceable Agreement;
Authorization
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15
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4.3
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Brokers, Finders
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15
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4.4
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Litigation
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16
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4.5
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Funds
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16
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4.6
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No Knowledge of Breach of Seller
Representation
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16
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4.7
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No Other Representations or
Warranties
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16
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF
AZZURRO
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16
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5.1
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Existence and Power
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16
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5.2
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Valid and Enforceable Agreement;
Authorization
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17
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5.3
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Brokers, Finders
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17
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5.4
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Litigation
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17
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5.5
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Funds
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17
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5.6
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No Knowledge of Breach of Seller
Representation
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17
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5.7
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No Other Representations or
Warranties
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18
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ARTICLE VI ADDITIONAL COVENANTS OF THE
PARTIES
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18
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6.1
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Conduct of Business Until Closing
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18
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6.2
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Access Pending Closing
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18
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6.3
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Books and Records
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18
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6.4
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Confidentiality; Announcements
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19
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6.5
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Advertiser and Subscriber Information
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20
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6.6
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Filings; Cooperation
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20
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6.7
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Obligations with Respect to Employees
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21
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6.8
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Acquisition Proposals
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21
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ARTICLE VII CONDITIONS PRECEDENT TO
OBLIGATIONS OF BUYER AND AZZURRO
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26
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7.1
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Accuracy of Representations and Warranties and
Performance of Obligations
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26
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7.2
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Consents and Approvals
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26
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7.3
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No Contrary Judgment or Litigation
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26
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7.4
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Hong Kong Purchase Agreement
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26
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7.5
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Deliveries
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26
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7.6
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No Material Adverse Effect
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27
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7.7
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Due Diligence and Disclosure
Schedules
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27
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7.8
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Formation of Buyer
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28
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ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS
OF SELLER
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28
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8.1
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Accuracy of Representations and Warranties and
Performance of Obligations
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28
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8.2
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Consents and Approvals
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28
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8.3
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No Contrary Judgment
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28
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8.4
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Deliveries
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28
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8.5
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Hong Kong Purchase Agreement
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29
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8.6
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Expiration of the Solicitation Period
End-Date
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29
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ARTICLE IX INDEMNIFICATION
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29
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9.1
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Indemnification by Seller
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29
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9.2
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Indemnification by Buyer
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30
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9.3
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Notice and Payment of Losses
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30
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9.4
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Defense of Third-Party Claims
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31
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9.5
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Survival of Representations and
Warranties
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31
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9.6
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Limitation on Indemnification
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32
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9.7
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Characterization of Indemnity
Payments
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33
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9.8
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Exclusive Remedy
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34
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ARTICLE X MISCELLANEOUS PROVISIONS
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34
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10.1
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Notice
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34
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10.2
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Termination; Termination Fee
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35
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10.3
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Entire Agreement
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36
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10.4
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Severability
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36
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10.5
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Assignment; Binding Agreement
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36
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10.6
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Expenses
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36
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10.7
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Counterparts
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37
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10.8
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Headings; Interpretation
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37
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10.9
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Governing Law
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37
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10.10
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Arbitration
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37
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10.11
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Disclosure Generally
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38
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10.12
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No Third Party Beneficiaries or Other
Rights
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38
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10.13
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Knowledge
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38
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10.14
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Travelzoo Guarantee
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38
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ASSET PURCHASE
AGREEMENT
THIS ASSET
PURCHASE AGREEMENT (the “Agreement”) is entered into as
of this 30 th day of September, 2009, by and between
TRAVELZOO, INC.,
a
Delaware corporation (“Travelzoo”), TRAVELZOO
K.K., a
Japanese kabushiki kaisha and wholly-owned subsidiary of Travelzoo
(“Seller”), and AZZURRO CAPITAL
INC.,
a
Cayman Islands corporation (“Azzurro”), for itself and
for the benefit of a subsidiary of Azzurro to be formed for the
purpose of completing the transactions described herein
(“Buyer”) (provided, that Buyer shall execute, deliver
and become a party to this Agreement at Closing). Capitalized terms
are defined in Article I.
RECITALS
A. The
Buyer desires to purchase the Purchased Assets from Seller and to
assume the Assumed Liabilities, on the terms and conditions set
forth herein; and
B. Seller
desires to sell the Purchased Assets and to assign the Assumed
Liabilities to Buyer, on the terms and conditions set forth herein;
and
C. Azzurro,
for the benefit of a company organized under the laws of Hong Kong
which will be a wholly-owned subsidiary of Azzurro (the “Hong
Kong Affiliate”), is entering into an Asset Purchase
Agreement (“the “Hong Kong Purchase Agreement”),
dated as of the date hereof, pursuant to which the Hong Kong
Affiliate will acquire the Purchased Assets referred to therein
(the “Hong Kong Purchased Assets”) and will assume the
Assumed Liabilities referred to therein; and
D. Travelzoo,
which is the parent company of the Seller, will enter into
additional agreements, as of Closing, with Azzurro, the Buyer and
the Hong Kong Affiliate, relating to the transactions provided for
herein and in the Hong Kong Purchase Agreement.
NOW,
THEREFORE, in consideration of the foregoing recitals and the
mutual covenants, representations, warranties, conditions, and
agreements hereinafter expressed, the Parties agree as
follows:
ARTICLE
I
DEFINITIONS
Without
limiting the effect of any other terms defined in the text of this
Agreement, the following words shall have the meaning given them in
this Article I:
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1.1
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“ Acquisition Proposa l” has
the meaning set forth in Section 6.8(a).
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1.2 “
Affiliate ” means, with respect to any Person, any
Person which is controlling, controlled by, or under common control
with, directly or indirectly through any Person, the Person
referred to, and, if the Person referred to is a natural person,
any member of such Person’s immediate family. The term
“control” (including, with
correlative
meaning, the terms “controlled by” and “under
common control with”) as used with respect to any Person,
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by
contract or otherwise.
1.3 “
Agreement ” means this Agreement as executed on the
date hereof and as amended or supplemented in accordance with the
terms hereof, including all Schedules and Exhibits hereto, as
attached hereto at the time of signing and as subsequently updated
or amended by Travelzoo, subject to approval, in their sole
discretion, by Azzurro or the Buyer of such updates or
amendments.
1.4 “
Asia Pacific Business ” means the Business referred to
herein and the Business referred to in the Hong Kong Purchase
Agreement, collectively.
1.5 “
Assumed Contracts ” means those Contracts to which
Seller is a party or by which it is bound as of the Effective Time
and which are exclusively related to the Business. For the
avoidance of doubt, the Assumed Contracts include all of those
Contracts listed on Section 1.5 and Section 3.6 of the Disclosure
Schedules.
1.6 “
Assumed Liabilities ” means all of the debts,
liabilities and obligations of Seller as of the Effective Time
listed on Section 1.6 of the Disclosure Schedules or arising out of
or pertaining to the Assumed Contracts.
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1.7
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“ Arbitrator ” shall have the
meaning Section 10.9.
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1.8
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“ Accounting Firm ” shall
have the meaning Section 2.4(c).
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1.9 “
Business ” means the business of publishing travel and
entertainment offers from various travel and entertainment
companies by means of the internet, email newsletter and alert
services and similar media, in the Territory, as such business has
been conducted by Seller, but not including the business related to
the fly.com website and
domain name.
1.10 “
Business Day ” means any day which is not a Saturday,
Sunday or a legal holiday in the State of New York, United States
of America.
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1.11
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“ Buyer ” has the meaning set
forth in the preamble.
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1.12 “
Closing ” means the consummation of the transactions
contemplated by this Agreement, as provided for in Section
2.3.
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1.13
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“ Closing Balance Sheet ” has
the meaning set forth in Section 2.4(a).
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1.14 “
Closing Date ” means such date as shall be mutually
agreed upon by the Parties (which shall in any event be within five
(5) Business Days from the satisfaction or waiver of all applicable
conditions to Closing set out herein).
1.15 “
Code ” means the United States Internal Revenue Code
of 1986, as amended.
1.16 “
Contract ” means any contract, agreement, lease,
indenture, mortgage, deed of trust, evidence of indebtedness,
binding commitment or instrument to which Seller (in respect of the
Business) is a party or by which it is bound.
1.17 “
Effective Time ” means the effective time of the
Closing, which shall be deemed to be as of 11:59 p.m. Japan Time on
the Closing Date.
1.18 “
Employee ” means any person that is a full-time
employee of the Business working for Seller on the Closing
Date.
1.19 “
Encumbrances ” means mortgages, liens, charges,
claims, security interests, easements or other
encumbrances.
1.20 “
Excluded Assets ” means all of the assets, properties,
rights and interests of Seller listed in Section 1.20 of the
Disclosure Schedule.
1.21 “
Excluded Liabilities ” means those debts, liabilities
and obligations of Seller listed on Section 1.21 of the Disclosure
Schedules.
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1.22
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“ Excluded Party ” has the
meaning set forth in Section 6.8(b).
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1.23 “
GAAP ” means generally accepted accounting principles
in the United States.
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1.24
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“ Hong Kong Affiliate ” has
the meaning set forth in the Recitals.
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1.25 “
Hong Kong Purchase Agreement ” has the meaning set
forth in the Recitals.
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1.26
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“ Hong Kong Purchased Assets
” has the meaning set forth in the Recitals.
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1.27
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“ Hosting Agreement ” has the
meaning set forth in Section 7.5(d).
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1.28
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“ Indemnifying Party ” has
the meaning set forth in Section 9.3.
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1.29 “ Indemnity
Basket ” has the meaning set forth in Section
9.6(a).
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1.30
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“ Indemnity Cap ” has the
meaning set forth in Section 9.6(c).
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1.31
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“ Injured Party ” has the
meaning set forth in Section 9.3.
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1.32 “
Intellectual Property ” means patents, inventions,
designs, models, know-how, trade secrets, trademarks, trade dress,
service marks, copyrights, business names, source codes, domain
names and other material business identifiers, registrations and
applications and all renewals of the foregoing and rights to apply
for any of the foregoing, and all the goodwill associated
therewith, and rights to sue or take
any
other action with respect to any past or future infringement,
misappropriation, dilution or other violation of any rights with
respect to the foregoing. This term does not include
non-proprietary information, know-how or processes otherwise
available to the industry or public, or rights obtained pursuant to
licenses associated with software and other intellectual property
generally made available for purchase or use by industry or the
public.
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1.33
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“ IRS ” means the United
States Internal Revenue Service.
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1.34 “
Law ” or “ Laws ” means any
statute, law, ordinance, decree, order, injunction, rule,
directive, or regulation of any government or quasi-governmental
authority, and includes rules and regulations of any regulatory or
self-regulatory authority compliance with which is required by law,
in effect on the date hereof in the Territory.
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1.35
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“ License Agreement ” has the
meaning set forth in Section 7.5(b).
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1.36 “
Loss ” or “ Losses ” means each and
all of the following items to the extent actually paid or incurred:
losses, liabilities, damages, judgments, fines, costs, penalties,
amounts paid in settlement and reasonable out-of-pocket costs and
expenses incurred in connection therewith (including, without
limitation, costs and expenses of suits and proceedings, and
reasonable fees and disbursements of counsel), but net of any
insurance proceeds received or receivable by the Injured Party with
respect to such Losses, and net of any tax benefit received or
receivable by the Injured Party in respect of such Losses.
Notwithstanding anything to the contrary herein, in no event shall
special, speculative, incidental, punitive, indirect or
consequential damages or damages for lost profits be deemed to be
“Losses”, except that the foregoing exclusion shall not
apply to the extent such items are included in a third-party
claim.
1.37 “
Material Adverse Effect ” means a material adverse
effect on the assets, business, financial condition or results of
operations of the Business taken as a whole.
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1.38
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“ Net Working Capital ” has
the meaning set forth in Section 2.4(a).
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1.39
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“ Notice of Claim ” has the
meaning set forth in Section 9.3.
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1.40
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“ Notice of Dispute ” has the
meaning set forth in Section 2.4(b).
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1.41
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“ Notice of Intent to Exercise
” has the meaning set forth in Section 5.9(d).
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1.42
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“ Notice Period ” has the
meaning set forth in Section 6.8(e).
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1.43 “
Option Agreement ” means the Option Agreement, dated
this date, between Azzurro and Travelzoo, relating to, among other
things, the Purchased Assets and the Buyer.
1.44 “
Ordinary Course ” means, with respect to the Business,
the ordinary course of commercial operations customarily engaged in
by Seller with respect to the Business and consistent with past or
current practice.
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1.45
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“ Party ” means Seller or the
Buyer, and “ Parties ” means both of
them.
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1.46 “
Person ” means an individual, general or limited
partnership, corporation (including any non-profit corporation),
business trust, limited liability company, limited liability
partnership, joint stock company, estate, trust, association,
organization, unincorporated association, joint venture or other
entity.
1.47 “
Permitted Encumbrances ” means, collectively, (a)
Encumbrances that are disclosed in the Disclosure Schedules, (b)
liens for Taxes, fees, levies, duties or other governmental charges
of any kind which are not yet delinquent or are being contested in
good faith by appropriate proceedings, (c) liens for mechanics,
materialmen, laborers, employees, suppliers or similar liens
arising by operation of Law which are not material to the Business
as a whole, (d) rights or liens of any lessors with respect to any
of the leased real property or leased personal property and (e) in
the case of real property, and only to the extent such items do not
materially and adversely impact the operation of such real property
in the Ordinary Course, any matters, restrictions, covenants,
conditions, limitations, rights, rights of way, encumbrances,
encroachments, reservations, easements, agreements and other
matters of record, such state of facts of which an accurate survey
or inspection of the property would reveal, and the provisions of
any Law.
1.48 “
Post-Closing Periods ” means all taxable periods of
Seller commencing after the Effective Time and the portion of any
Straddle Period ending after the Effective Time.
1.49 “
Pre-Closing Periods ” means all taxable periods of
Seller ending on or before the Effective Time and the portion of
any Straddle Period commencing prior to the Effective
Time.
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1.50
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“ Purchase Price ” has the
meaning set forth in Section 2.2.
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1.51 “
Purchased Assets ” means the assets owned by Seller
listed in Section 1.51 of the Disclosure Schedules, and all other
assets of the Seller other than the Excluded Assets.
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1.52
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“ Referral Agreement ” has
the meaning set forth in Section 7.5(e).
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1.53
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“ Records ” has the meaning
set forth in Section 6.3.
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1.54 “
Representatives ” means directors, officers,
employees, Affiliates, investment bankers, attorneys, accountants
and other advisors or representatives.
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1.55
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“ Seller ” has the meaning
set forth in the preamble.
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1.56
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“ Solicitation Period End-Date
” has the meaning set forth in Section 6.8(a).
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1.57 “
Straddle Period ” means any taxable period of Seller
that begins before and ends after the Effective Time.
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1.58
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“ Superior Proposal ” has the
meaning set forth in Section 6.8(c).
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1.59 “
Tax ” or “ Taxes ” means all
material taxes, charges, fees, levies, or other like governmental
assessments applicable to the Business in the countries in which it
operates, including, without limitation, all material federal,
possession, state, city, county and foreign (or governmental unit,
agency, or political subdivision of any of the foregoing) income,
profits, employment (including unemployment insurance and employee
income tax withholding), franchise, gross receipts, sales, use,
transfer, stamp, occupation, property, capital, severance, premium,
windfall profits, tariff, customs, duties, ad valorem, value-added
and excise taxes, and any other governmental charges of the same or
similar nature; and all penalties, additions to tax and interest
relating to any such taxes, premiums or charges. Any one of the
foregoing Taxes shall be referred to sometimes as a
“Tax”.
1.60 “
Tax Returns ” means all returns, reports, estimates,
declarations, claims for refund, information returns or statements
relating to, or required to be filed in connection with any Taxes,
including any schedule or attachment thereto, and including any
amendment or supplement thereof.
1.61 “
Territory ” means all countries located in those time
zones that are more than five (5) hours ahead of Greenwich Mean
Time, based on Standard time, including, without limitation, India
and Pakistan, but excluding Russia.
1.62 “
Total Current Assets ” means “total current
assets” plus “deposits, less current portion” as
such line items are defined and reported on Seller’s balance
sheet in the Ordinary Course and determined in accordance with
GAAP.
1.63 “
Total Current Liabilities ” means “total current
liabilities” plus “deferred rent” plus
“commitments and contingencies” as such line items are
defined and reported on Seller’s balance sheet in the
Ordinary Course and determined in accordance with GAAP.
1.64 “
Transition Services Agreement ” has the meaning set
forth in Section 7.5(g).
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1.65
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“ Travelzoo ” has the meaning
set forth in the preamble.
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1.66
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“ Voting Agreement ” has the
meaning set forth in Section 7.5(f).
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ARTICLE
II
PURCHASE AND
SALE OF THE BUSINESS
2.1
Transfer of Assets and Liabilities . Upon the terms and
subject to the conditions of this Agreement, at the Closing and as
of the Effective Time:
(a) Seller
shall sell, assign, transfer and convey to the Buyer, and the Buyer
shall purchase, acquire and accept from Seller, all of
Seller’s right, title and interest in and to the Purchased
Assets, free and clear of all Encumbrances other than Permitted
Encumbrances; and
(b) Buyer
shall assume all of the obligations of Seller in respect of the
Assumed Liabilities.
2.2
Consideration . The consideration that the Buyer shall pay
Seller for the Purchased Assets and other rights of the Buyer
hereunder shall be One Million Six Hundred Thousand Dollars
(US$1,600,000.00)(the “ Purchase Price ”),
subject to adjustment as provided in Section 2.4 of this
Agreement.
2.3
Closing . The Closing shall take place at 9:00 a.m., United
States Central Time, on the Closing Date at the offices of Bryan
Cave LLP, in St. Louis, Missouri, or at such other place or time,
or in such other method (including via email or other electronic
transmission), as the Parties may agree in writing. At Closing,
Seller shall deliver or cause to be delivered to the Buyer
possession of the Purchased Assets and the documents and other
items identified in Article VII, and the Buyer shall deliver to
Seller (a) by wire transfer of immediately available funds, in
accordance with the wire transfer instructions set forth on
Schedule 2.3 , the Purchase Price and (b) the documents and
other items identified in Article VIII.
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2.4
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Purchase Price Adjustment
.
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(a) Promptly
after the Closing Date, and in any event not later than thirty (30)
calendar days following the Closing Date, Buyer shall prepare, or
cause to be prepared, and deliver to Seller a balance sheet of
Seller as of the Effective Time (the “ Closing Balance
Sheet ”). Such Closing Balance Sheet shall be accompanied
by a statement calculating the “ Net Working Capital
,” which shall be the Total Current Assets of the Business
minus the Total Current Liabilities of the Business.
(b) Buyer
shall permit Seller and its accountants to review promptly upon
request all accounting records, work papers and computations used
by Buyer in the preparation of such Closing Balance Sheet and the
computation of Net Working Capital. If Seller disputes the Net
Working Capital as calculated by Buyer, not more than forty-five
(45) calendar days after the date Seller receive Buyer’s
calculation thereof, Seller shall deliver to Buyer a notice of its
objection to the Closing Balance Sheet (such notice to contain a
statement of the basis of Seller’s objection) (a “
Notice of Dispute ”). Seller hereby waives the right
to assert any objection with respect to the Closing Balance Sheet
that is not asserted in the Notice of Dispute delivered to Buyer by
Seller within forty-five (45) calendar days after the delivery of
the Closing Balance
Sheet. If
Seller fails to deliver a Notice of Dispute within such forty-five
(45) calendar day period, Seller shall be deemed to have accepted
the Closing Balance Sheet as prepared by Buyer.
(c) Upon
receipt of a Notice of Dispute, Buyer shall promptly consult with
Seller in good faith with respect to their specified points of
disagreement in an effort to resolve the dispute. If any such
dispute cannot be resolved by Buyer and Seller within thirty (30)
calendar days (or longer, as mutually agreed by the Parties) after
Buyer receives the Notice of Dispute, the Parties shall refer the
dispute to a national accounting firm in the United States, as
agreed by the Parties (the “ Accounting Firm ”),
as an arbitrator to finally determine, as soon as practicable, and
in any event within twenty (20) calendar days after such reference,
all points of disagreement with respect to the calculation of the
Net Working Capital. If the Parties fail to select an Accounting
Firm within the thirty (30) calendar day period or any Accounting
Firm selected by them shall not have agreed to perform the services
called for hereunder, the Accounting Firm shall thereupon be
selected in accordance with the International Rules of the American
Arbitration Association, with preference being given to any
independent, national accounting firm in the United States that has
no material relationship with any of the Parties. For purposes of
such arbitration, each Party shall submit a proposed calculation of
the Net Working Capital. The Accounting Firm shall decide only
those matters in dispute, and may not assign a value to any item in
dispute which is either higher or lower than the respective
calculations for such item submitted by the parties. The Accounting
Firm shall apply the terms of Section 2.4 of this Agreement, and
shall otherwise conduct the arbitration under such procedures as
the Parties may agree or, failing such agreement, under then
prevailing International Rules of the American Arbitration
Association. The fees and expenses of the arbitration and the
Accounting Firm incurred in connection with the calculation of the
Net Working Capital shall be shared equally by the Parties;
provided, that such fees and expenses shall not include, so long as
a Party complies with the procedures of this Section 2.4, the other
Party’s outside counsel or accounting fees. All
determinations by the Accounting Firm shall be final, conclusive
and binding with respect to the calculation of the Net Working
Capital in the absence of fraud or manifest error.
(d) The
Purchase Price shall be adjusted as follows, based on (i) the Net
Working Capital set forth on the Closing Balance Sheet finally
determined under this Section 2.4 and (ii) the Net Working Capital
set forth on the Closing Balance Sheet finally determined under
Section 2.4 of the Hong Kong Purchase Agreement: Seller shall pay
to Buyer the amount by which the total Net Working Capital set
forth on both Closing Balance Sheets is less than Twenty Five
Thousand Dollars (US$25,000), or Buyer shall pay to Seller the
amount by which the total Net Working Capital set forth on both
Closing Balance Sheets is greater than Seventy Five Thousand
Dollars (US$75,000); provided that any such payment shall be
allocated 44.4% to the Purchase Price hereunder and the remainder
shall be allocated to the Purchase Price under the Hong Kong
Purchase Agreement. Any payment so required to be made by Buyer or
Seller shall be by transfer of immediately available funds not more
than five (5) Business Days after final determination
thereof.
(a) All
customs, sales, use, value-added, gross receipts, registration,
stamp duty or other similar transfer Taxes incurred in connection
with the transfer and sale of the Purchased Assets as contemplated
by the terms of this Agreement, including all recording or filing
fees, notarial fees and other similar costs of Closing, that may be
imposed upon, or payable, collectible or incurred, shall be borne
by the Buyer. The parties agree to furnish or cause to be furnished
to each other, upon request, as promptly as practical, such
information (including reasonable access to books and records) and
assistance as is reasonably necessary in an effort to allow Buyer
to minimize all such Taxes.
(b) Except
as provided in Section 2.5(a), any Taxes with respect to the
Purchased Assets or the Business for any Pre-Closing Periods shall
be borne by Seller. The Buyer shall be responsible for any Taxes
with respect to the Purchased Assets or the Business for any
Post-Closing Periods and for any Taxes to the extent set forth in
Section 2.5(a). All Taxes collected by Seller from third parties
prior to the Effective Time, including, but not limited to, sales
and use Taxes and all payroll withholding Taxes, including both
employee and employer portions, shall be paid by Seller to the
appropriate governmental authority.
(c) Property
Taxes covering any Straddle Period shall be pro-rated between
Seller and the Buyer based upon the number of days in the Straddle
Period ending as of the Effective Time and number of days in the
Straddle Period ending after the Effective Time, respectively. The
portion of such Tax that relates to the portion of such Tax period
ending as of the Effective Time shall be deemed to be the amount of
such Tax for the entire Tax period multiplied by a fraction the
numerator of which is the number of days in the Tax period ending
as of the Effective Time and the denominator of which is the number
of days in the entire Tax period.
(d) The
Buyer and Seller agree to furnish or cause to be furnished to each
other, upon request, as promptly as practical, such information
(including reasonable access to books and records) and assistance
as is reasonably necessary for the filing of any Tax Return, the
conduct of any Tax audit, and for the prosecution or defense of any
claim, suit or proceeding relating to any Tax matter. The Buyer and
Seller shall cooperate with each other in the conduct of any Tax
audit or other Tax proceedings and each shall execute and deliver
other documents as are reasonably necessary to carry out the intent
of this Section 2.5(d). Any Tax audit or other Tax proceeding shall
be deemed to be a third party claim subject to the procedures set
forth in Section 9.4 of this Agreement.
(e) The
Buyer shall promptly pay or shall cause prompt payment to be made
to Seller of all refunds of Taxes and interest thereon received by,
or credited against any Tax liability of the Buyer or any Affiliate
of the Buyer attributable to Taxes paid by Seller or its Affiliates
with respect to any Pre-Closing Period. Seller shall promptly pay
or shall cause prompt payment to be made to Buyer of all refunds of
Taxes and interest thereon received by, or credited against any Tax
liability of Seller or
any
Affiliate of the Seller attributable to Taxes paid by Buyer or its
Affiliates with respect to any Post-Closing Period.
2.6
Allocation of Purchase Price . Within ninety (90) calendar
days following the Closing, the Parties shall mutually agree to an
allocation of the Purchase Price among the Purchased Assets. Seller
and the Buyer shall report the acquisition of the Purchased Assets
for all Tax purposes in a manner consistent with such allocation,
and shall take no position inconsistent therewith or contrary
thereto, unless required by Law. The allocation may not be amended
or changed without the mutual written consent of the Parties. The
Buyer and Seller hereby agree and acknowledge that such allocation
shall be made in accordance with Section 1060 of the Code and the
regulations thereunder.
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2.7
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Completion of Transfers .
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(a) The
entire beneficial interest in and to, and the risk of loss with
respect to, the Purchased Assets, shall, regardless of when legal
title thereto shall be transferred to the Buyer, pass to the Buyer
at Closing as of the Effective Time. All operations of the Business
shall be for the account of Seller up to and including the
Effective Time and shall be for the account of the Buyer
thereafter. In the event legal title to any of the Purchased Assets
or the Assumed Liabilities is not transferred at Closing, Seller
shall hold such Purchased Assets or Assumed Liabilities as nominee
for the Buyer until completion of such transfers.
(b) In
the event that the legal interest in any of the Purchased Assets or
the Assumed Liabilities to be sold, assigned, transferred or
conveyed pursuant to this Agreement, or any claim, right or benefit
arising thereunder or resulting therefrom cannot be sold, assigned,
transferred or conveyed hereunder as of the Closing Date because
any waiting or notice period has not expired or any consents or
approvals required for such sale, assignment, transfer or
conveyance have not been obtained or waived, then the legal
interest in such Purchased Assets or Assumed Liabilities shall not
be sold, assigned, transferred or conveyed unless and until such
waiting or notice period shall have expired or until approval,
consent or waiver thereof is obtained. In such event, Seller, at
its expense, and the Buyer shall and shall cause its designated
Affiliates, at their expense, to use commercially reasonable
efforts to cooperate in obtaining such consents or approvals as may
be necessary to complete such transfers as soon as practicable.
Except as provided in Section 7.2, the failure of Seller to obtain
any required consents or approvals prior to Closing shall not
affect the Buyer’s obligations to close under this Agreement
or to pay, or cause to be paid, the Purchase Price. Nothing in this
Agreement shall be construed as an attempt to assign to the Buyer
any legal interest in any of the Purchased Assets or the Assumed
Liabilities which, as a matter of Law or by the terms of any
legally binding contract, engagement or commitment to which Seller
is subject, is not assignable without the consent of any other
Party, unless such consent shall have been given.
(c) Pending
the assignments, conveyances and transfers referred to in Section
2.7(b), Seller shall hold any such non-assigned, non-conveyed and
non-
transferred
Purchased Assets or Assumed Liabilities for the benefit and at the
risk of the Buyer and shall cooperate with the Buyer in any Lawful
and reasonable arrangements designed to provide the benefits of
ownership thereof to the Buyer.
2.8
Excluded Liabilities . Seller acknowledges that the Excluded
Liabilities are the obligations of Seller and not of the Buyer, and
the Buyer is not assuming any of the Excluded Liabilities under the
terms of this Agreement.
2.9
Further Assurances . From and after the Closing, the Parties
shall do such acts and execute such documents and instruments as
may be reasonably required to make effective the transactions
contemplated hereby.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF SELLER AND TRAVELZOO
Seller hereby
makes the representations and warranties set forth in Sections 3.1
through 3.12, each of which is true and correct on the date hereof
and as of the Closing Date, and which shall survive the Closing
Date and the transactions contemplated hereby to the extent set
forth herein. Travelzoo hereby makes the representations and
warranties set forth in Sections 3.12 through 3.14, each of which
is true and correct on the date hereof and as of the Closing Date,
and which shall survive the Closing Date and the transactions
contemplated hereby to the extent set forth herein.
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3.1
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Seller Existence and Power
.
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(a) Seller
has the corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder, and to consummate
the transactions contemplated hereby. Seller has the corporate
power and authority to transfer the Purchased Assets and to
consummate the transactions contemplated hereby.
(b) Seller
is duly organized, validly existing and in good standing under the
laws of Japan.
(c) Seller
is not a party to, subject to or bound by any material Contract
(including the Assumed Contracts), Encumbrance, Law or
organizational document (i.e. articles, charters, bylaws, operating
agreements, shareholders agreements and other similar agreements,
documents and instruments) which would (i) be breached or violated
or its obligations thereunder accelerated or increased (whether or
not with notice or lapse of time or both) in any material respect
by the execution or delivery by it of this Agreement or the
performance by Seller of the transactions contemplated by this
Agreement, or (ii) prevent the carrying out of the transactions
contemplated hereby. Except as set forth on Section 3.1 of the
Disclosure Schedule or otherwise provided for herein, no permit,
consent (including any consent with respect to the Assumed
Contracts), waiver, approval or authorization of, or declaration to
or filing or registration with, any governmental or regulatory
authority or third party is required in connection
with the
execution, delivery or performance of this Agreement by Seller or
the consummation by Seller of the transactions contemplated hereby,
except for any such permits, consents, waivers, approvals,
authorizations, declarations, filings or registrations the failure
of which to obtain does not have and will not have a Material
Adverse Effect. The transactions contemplated hereby will not
result in the creation of any material Encumbrance against the
Purchased Assets.
(d) Seller
has the power and authority to own, lease and use its assets and to
transact the business in which it is engaged, and holds all
material authorizations, franchises, licenses and permits required
therefor.
3.2
Seller Valid and Enforceable Agreement; Authorization . This
Agreement has been duly executed and delivered by Seller and
constitutes a legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except
that such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting or
relating to enforcement of creditors’ rights generally, and
(ii) general principles of equity. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized, approved and
ratified by all necessary corporate action on the part of
Seller.
3.3
Taxes . Except as set forth on Section 3.3(a) of the
Disclosure Schedules, all Tax Returns in respect of Pre-Closing
Periods required to be filed with respect to the Purchased Assets
have been filed in a timely manner (taking into account all
extensions of due dates) and all Taxes for Pre-Closing Periods
affecting the Purchased Assets (other than Excluded Liabilities),
that are due and payable have been paid. No deficiencies for any
Taxes (including penalties and interest) in respect of Purchased
Assets have been asserted or assessed in writing which remain
unpaid and which would have a Material Adverse Effect.
3.4
Litigation . Except as set forth on Section 3.4 of the
Disclosure Schedules, there are no material actions, suits or
proceedings pending or, to Seller’s knowledge, threatened
against Seller (in respect of the Business). Seller (in respect of
the Business) is not subject to any order, judgment, writ,
injunction or decree of any court or governmental or regulatory
authority or body (excluding any such matters of general
applicability or applicable to entities situated similarly to
Seller rather than to them specifically).
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3.5
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Condition of Real and Personal
Property .
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(a) All
of the leased real property which are material to the conduct of
the Business have been maintained in reasonable condition in the
Ordinary Course in a manner consistent with past maintenance
practices of the Business.
(b) All
tangible personal property which is material to the conduct of the
Business has been maintained in reasonable operating condition and
repair, in the
Ordinary Course
in a manner consistent with past maintenance practices of the
Business.
(a) Section
3.6 sets forth a list (including all amendments) of all Assumed
Contracts which require payments by Seller or another party thereto
in excess of $10,000 during any calendar year or which are
otherwise material to the Business (such listed Assumed Contracts
being referred to as the “ Material Contracts
”).
(b) The
terms of all Assumed Contracts have been complied with in all
material respects by Seller and, to Seller’s knowledge, by
the other parties to such Assumed Contract. The Assumed Contracts
are in full force and effect, and Seller has not waived any of its
material rights thereunder.
(c) The
Seller has not given or received any written notice of any
intention to terminate, repudiate or disclaim any Assumed
Contract.
3.7
Title . Seller is the sole owner of all right, title and
interest in and to the Purchased Assets.
3.8
Licenses and Permits . Except as set forth on Section 3.8 of
the Disclosure Schedules, Seller (in respect of the Business) has
all governmental permits, licenses and authorizations necessary
under Law for the conduct of the Business as presently conducted in
the Ordinary Course, and all such permits, licenses and
authorizations are valid and in full force and effect in all
material respects. Seller is, and at all times has been, in
compliance in all material respects with the terms and requirements
of all such permits, licenses and authorizations. Seller has
received no notice of any revocation or non-renewal of such
permits, licenses and authorizations.
3.9
Compliance with Laws . Except as set forth on Section 3.9 of
the Disclosure Schedules, Seller (in respect of the Business) is in
compliance in all material respects with all applicable Laws, rules
and regulations currently in effect.
(a) Except
as set forth on Section 3.10 of the Disclosure Schedule, there are
no material controversies existing, pending or, to Seller’s
knowledge, threatened with any association or union or collective
bargaining representative of the Employees of the
Business.
(b) Except
as set forth on Section 3.10 of the Disclosure Schedule, there is
no charge or complaint relating to unfair labor practice pending
against Seller (in connection with its operation of the Business),
nor is there any labor strike, work stoppage, grievance or other
labor dispute pending or, to Seller’s knowledge, threatened
against Seller in relation to the Business.
3.11
Intellectual Property Matters . All domain names and web
site addresses included in the Intellectual Property have been
registered in the name of Seller and are in compliance in all
material respects with all formal legal requirements.
3.12
Brokers, Finders . No finder, broker, agent, or other
intermediary acting on behalf of Seller or Travelzoo is entitled to
a commission, fee, or other compensation in connection with the
negotiation or consummation of this Agreement or any of the
transactions contemplated hereby.
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3.13
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Travelzoo Existence and Power
.
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(a) Travelzoo
has the corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.
(b) Travelzoo
is duly organized, validly existing and in good standing under the
laws of the State of Delaware, United States of America.
(c) Travelzoo
is not a party to, subject to or bound by any material Contract,
Encumbrance, Law or organizational document which would (i) be
breached or violated or its obligations thereunder accelerated or
increased (whether or not with notice or lapse of time or both) in
any material respect by the execution or delivery by it of this
Agreement or the performance by Seller of the transactions
contemplated by this Agreement, or (ii) prevent the carrying out of
the transactions contemplated hereby. Except as set forth on
Section 3.13 of the Disclosure Schedule or otherwise provided for
herein, no permit, consent, waiver, approval or authorization of,
or declaration to or filing or registration with, any governmental
or regulatory authority or third party is required in connection
with the execution, delivery or performance of this Agreement by
Travelzoo.
3.14
Travelzoo Valid and Enforceable Agreement; Authorization .
This Agreement has been duly executed and delivered by Travelzoo
and constitutes a legal, valid and binding obligation of Travelzoo,
enforceable against Travelzoo in accordance with its terms, except
that such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting or
relating to enforcement of creditors’ rights generally, and
(ii) general principles of equity. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized, approved and
ratified by all necessary corporate action on the part of
Travelzoo.
3.15
No Other Representations or Warranties . Except for the
representations and warranties contained in this Article III,
neither Seller, Travelzoo nor any other Person, makes any other
express or implied representation or warranty on behalf of Seller,
Travelzoo or any other Affiliate of Seller or Travelzoo with
respect to the Business, the Purchased Assets, the Assumed
Liabilities or otherwise with respect to the subject matter of this
Agreement.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF BUYER
The Buyer
hereby makes the following representations and warranties to
Seller, each of which is true and correct as of the Closing Date,
and which shall survive the Closing Date and the transactions
contemplated hereby to the extent set forth herein.
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4.1
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Existence and Power .
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(a) The
Buyer has the corporate power and authority to enter into this
Agreement, to perform its obligations hereunder, and to consummate
the transactions contemplated hereby.
(b) The
Buyer is duly incorporated, validly existing and in good standing
under the laws of Japan.
(c) The
Buyer is not a party to, subject to or bound by any material
Contract, Encumbrance, Law or organizational document (i.e.
articles, charters, bylaws, operating agreements, shareholders
agreements and other similar agreements, documents and instruments)
which would prevent Buyer from performing its obligations hereunder
or consummating the transactions contemplated hereby. Except as set
forth on Section 4.1 of the Disclosure Schedules or otherwise
provided for herein, no permit, consent, waiver, approval or
authorization of, or declaration to or filing or registration with,
any governmental or regulatory authority or third party is required
in connection with the execution, delivery or performance of this
Agreement by the Buyer or the consummation by the Buyer of the
transactions contemplated hereby, except for any such permits,
consents, waivers, approvals, authorizations, declarations, filings
or registrations the failure of which to obtain does not have and
will not have a material adverse effect on Buyer’s ability to
perform its obligations hereunder or consummate the transactions
contemplated hereby.
4.2
Valid and Enforceable Agreement; Authorization . This
Agreement constitutes a legal, valid and binding obligation of the
Buyer, enforceable against it in accordance with its terms, except
that such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting or
relating to enforcement of creditors’ rights generally and
(ii) general principles of equity. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized, approved and
ratified by all necessary action on the part of the Buyer. The
Buyer has full authority to enter into and deliver this Agreement,
to perform its obligations hereunder, and to consummate the
transactions contemplated hereby.
4.3
Brokers, Finders . No finder, broker, agent, or other
intermediary acting on behalf of the Buyer is entitled to a
commission, fee, or other compensation in connection with the
negotiation or consummation of this Agreement or any of the
transactions contemplated hereby.
4.4
Litigation . There are no actions, suits, proceedings,
orders or investigations pending or threatened against the Buyer or
any of the Buyer’s Affiliates, at Law or in equity, which if
adversely determined would have a material adverse effect on the
Buyer’s performance under this Agreement or the consummation
of the transactions contemplated hereby. There are no injunctions,
decrees or unsatisfied judgments outstanding against or related to
the Buyer which would have a material adverse effect on the
Buyer’s performance under this Agreement or the consummation
of the transactions contemplated hereby.
4.5
Funds . The Buyer has, and at all times will have,
sufficient funds on hand or available pursuant to unconditional
commitments to pay the Purchase Price and any adjustment
thereof.
4.6
No Knowledge of Breach of Seller Representation . As of the
Closing, Buyer has no knowledge of any current, material breach by
Seller of Seller’s representations or warranties contained in
this Agreement or any other agreements contemplated hereby. For
purposes of this provision, Buyer’s knowledge means the
actual knowledge at Closing of Ralph Bartel.
4.7
No Other Representations or Warranties . Except for the
representations and warranties contained in this Article IV,
neither the Buyer, nor any other Person, makes any other express or
implied representation or warranty on behalf of the
Buyer.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF AZZURRO
Azzurro hereby
makes the following representations and warranties to Seller, each
of which is true and correct on the date hereof and as of the
Closing Date, and which shall survive the Closing Date and the
transactions contemplated hereby to the extent set forth
herein.
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5.1
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Existence and Power .
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(a) Azzurro
has the corporate power and authority to enter into this Agreement,
to perform its obligations hereunder, and to consummate the
transactions contemplated hereby.
(b) Azzurro
is duly incorporated, validly existing and in good standing under
the laws of the Cayman Islands.
(c) Azzurro
is not a party to, subject to or bound by any material Contract,
Encumbrance or Law or organizational document (i.e. articles,
charters, bylaws, operating agreements, shareholders agreements and
other similar agreements, documents and instruments) which would
prevent Azzurro from performing its obligations hereunder or
consummating the transactions contemplated hereby. Except as set
forth on Section 5.1 of the Disclosure Schedules or otherwise
provided for herein, no permit, consent, waiver, approval or
authorization of, or declaration to or filing or
registration
with, any governmental or regulatory authority or third party is
required in connection with the execution, delivery or performance
of this Agreement by Azzurro or the consummation by Azzurro of the
transactions contemplated hereby, except for any such permits,
consents, waivers, approvals, authorizations, declarations, filings
or registrations the failure of which to obtain does not have and
will not have a material adverse effect on Azzurro’s ability
to perform its obligations hereunder or consummate the transactions
contemplated hereby.
5.2
Valid and Enforceable Agreement; Authorization . This
Agreement constitutes a legal, valid and binding obligation of
Azzurro, enforceable against it in accordance with its terms,
except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar Laws
affecting or relating to enforcement of creditors’ rights
generally and (ii) general principles of equity. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized, approved and
ratified by all necessary action on the part of Azzurro. Azzurro
has full authority to enter into and deliver this Agreement, to
perform its obligations hereunder, and to consummate the
transactions contemplated hereby.
5.3
Brokers, Finders . No finder, broker, agent, or other
intermediary acting on behalf of Azzurro is entitled to a
commission, fee, or other compensation in connection with the
negotiation or consummation of this Agreement or any of the
transactions contemplated hereby.
5.4
Litigation . There are no actions, suits, proceedings,
orders or investigations pending or threatened against Azzurro or
any of Azzurro’s Affiliates, at Law or in equity, which if
adversely determined would have a material adverse effect on
Azzurro’s performance under this Agreement or the
consummation of the transactions contemplated hereby. There are no
injunctions, decrees or unsatisfied judgments outstanding against
or related to Azzurro which would have a material adverse effect on
Azzurro’s performance under this Agreement or the
consummation of the transactions contemplated hereby.
5.5
Funds . The Buyer has, and at all times will have,
sufficient funds on hand or available pursuant to unconditional
commitments to pay the Purchase Price and any adjustment thereof.
Additionally, Azzurro will cause the Buyer and the Hong Kong
Affiliate to have, at the Closing Date, sufficient funds on hand,
in an aggregate amount no less than Eight Million Dollars
(US$8,000,000.00), to execute their business plans with respect to
the Purchased Assets and the Hong Kong Purchased Assets.
5.6
No Knowledge of Breach of Seller Representation . As of the
Closing, Azzurro has no knowledge of any current, material breach
by Seller of Seller’s representations or warranties contained
in this Agreement or any other agreements contemplated hereby. For
purposes of this provision, Azzurro’s knowledge means the
actual knowledge at Closing of Ralph Bartel.
5.7
No Other Representations or Warranties . Except for the
representations and warranties contained in this Article V, neither
Azzurro, nor any other Person, makes any other express or implied
representation or warranty on behalf of the Buyer.
ARTICLE
VI
ADDITIONAL
COVENANTS OF THE PARTIES
6.1
Conduct of Business Until Closing . Except as set forth on
Schedule 6.1 or otherwise
provided in this Agreement, or as Azzurro may otherwise consent to
or approve in writing on and after the date hereof and prior to the
Closing Date with respect to the Business, which consent shall not
be unreasonably withheld, Seller agrees (in respect of the
Business):
(a) (i)
to conduct its business, operations, activities and practices in
all material respects in accordance with past practice and (ii) to
use commercially reasonable efforts to preserve its current
business organization and existing business relationships and
prospects in all material respects;
(b) neither
to (i) change the overall character of the business, operations,
activities and practices in any material way; nor (ii) except in
the Ordinary Course, sell, lease, or grant any option to sell or
lease, give a security interest in or otherwise create any
Encumbrance (other than a Permitted Encumbrance) on any material
part of its assets;
(c) not
to sell, license or transfer any material Intellectual Property
rights other than in the Ordinary Course;
(d) not
to enter into any binding agreement or arrangement with the IRS (or
any similar Tax authority), with respect to the Business, which
relates to any period or periods after the Effective Time;
or
(e) not
to enter into any agreement (conditional or otherwise) to do any of
the actions prohibited or restricted by any of the
foregoing.
6.2
Access Pending Closing . Seller shall, at all reasonable
times prior to Closing, make its facilities, properties, books and
records (each in respect of the Business) available during normal
business hours to the Buyer and Azzurro, their representatives,
financial and legal advisors, lenders and auditors, and to furnish
or cause to be furnished to such persons during such period all
such information and data concerning the same as such persons may
reasonably request. Notwithstanding the above, Seller may limit
such access to the extent it reasonably deems necessary to avoid
disruption of the Business.
6.3
Books and Records . From and after the Closing, the Buyer
shall provide Azzurro, Seller and their Affiliates and their
representatives with reasonable access, subject to customary
restrictions and confidentiality obligations, for any reasonable
purpose, including but not limited to (a) preparing Tax Returns or
(b) defending any
claim in
respect of which a Notice of Claim has been served on Seller,
during normal business hours, to all books and records related to
the Purchased Assets, including, but not limited to, accounting and
Tax records, sales and purchase documents, notes, memoranda, and
any other electronic or written data (“ Records
”) pertaining or relating to the period prior to the
Effective Time. To the extent deemed necessary by Seller and its
Affiliates with respect to their other business operations, Seller
and its Affiliates may retain copies of such Records prior to
providing the originals to the Buyer, or, as soon as practicable
after Closing, the Buyer shall provide to Seller and its Affiliates
copies of all or any portion of such Records as requested by Seller
and its Affiliates. Unless otherwise consented to in writing by
Seller, the Buyer shall not, for a period of ten (10) years
following the date hereof or such longer period as retention
thereof is required by applicable Law, destroy, alter or otherwise
dispose of (or allow the destruction, alteration or disposal of)
any of the Records without first offering to surrender to Seller
such Records.
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6.4
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Confidentiality; Announcements
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(a) The
Buyer and Azzurro acknowledge that, in the course of their
investigations of the Business, they and their representatives have
and will become aware of confidential information and documents of
the Business, and that their use of such confidential information
and documents, or communication of such information to third
parties, prior to Closing, could be detrimental to Seller or the
Business. Each of the Buyer and Azzurro covenants that prior to
Closing all information and documents concerning the Business
reviewed by them or their representatives in connection with this
Agreement or the transactions contemplated hereby and, following
either Closing or termination of this Agreement, all such
information and documents to the extent related to any of the
Excluded Assets or the Excluded Liabilities and any confidential
information known to the Buyer or Azzurro (including through any
employee) with respect to other businesses operated by Seller or
any of its Affiliates, shall be maintained in confidence and shall
not be disclosed or used by the Buyer, Azzurro or their
representatives without Seller’s prior written consent,
unless they can demonstrate that such information is (i) otherwise
publicly available, (ii) required to be disclosed pursuant to
judicial order, regulation or Law, or (iii) required to be
disclosed by the rules of a securities exchange on which the Buyer
or Azzurro may from time to time be listed, or (iv) disclosed to
any Person that proposes to finance, in whole or in part, the
Purchased Assets, solely for the purpose of permitting such party
to evaluate the advisability of providing such financing. With
respect to information and documents related to the Business, at
Seller’s request in the event that the Closing shall not
occur, and, with respect to information and documents related to
the Excluded Assets, the Excluded Liabilities or other businesses
operated by Seller or any of its Affiliates, as soon as practicable
following Closing, (i) the Buyer and Azzurro shall, and shall cause
their representatives to (to the extent reasonably practicable with
respect to information and documents related to Excluded Assets,
the Excluded Liabilities or other businesses operated by Seller or
any of its Affiliates should the Closing occur), promptly destroy
all information and documents concerning the Business, the Excluded
Assets, the Excluded Liabilities or other businesses operated by
Seller or any of its Affiliates, as the case may be (including any
copies thereof or extracts therefrom), and (ii) the Buyer
and
Azzurro shall
keep confidential and shall not use any such information or
documents unless required to disclose such information or documents
pursuant to judicial order, regulation or Law. In the event that
the Buyer, Azzurro or any of their representatives becomes legally
compelled to disclose any such information or documents as referred
to in this paragraph, the Buyer shall provide Seller with prompt
written notice before such disclosure, sufficient to enable Seller
either to seek a protective order, at its expense, or other
appropriate remedy preventing or prohibiting such disclosure or to
waive compliance with the provisions of this Section 6.4 or
both.
(b) Following
the Closing, Seller shall maintain, and shall cause its Affiliates
to maintain, in confidence any information it or they may have in
relation to the Business, other than with respect to the Excluded
Assets and the Excluded Liabilities, and such information shall not
be disclosed or used by Seller or its Affiliates without the
Buyer’s prior written consent, unless such information is (i)
otherwise publicly available (except as a result of a breach hereof
by Seller or its affiliates), (ii) required to be disclosed
pursuant to judicial order, regulation or Law or (iii) required to
be disclosed by the rules of the NASDAQ Global Select Market or any
other applicable exchange or quotation system. In the event that
Seller or any of its Affiliates or representatives become legally
compelled to disclose any such information or documents as referred
to in this paragraph, Seller shall, to the extent reasonably
practicable, provide the Buyer with prompt written notice before
such disclosure, sufficient to enable the Buyer either to seek a
protective order, at its expense, or other appropriate remedy
preventing or prohibiting such disclosure or to waive compliance
with the provisions of this Section 6.4.
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6.5
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Advertiser and Subscriber Information
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(a) As
promptly as reasonably practicable following the Closing, Seller
shall make available, and shall cause its Affiliates to make
available, to Buyer information relating to advertisers,
subscribers and Web site visitors pertaining to the Territory
(“ Client Information ”) to the extent permitted
by applicable Law. Seller or its Affiliates may withhold any Client
Information to the extent it reasonably believes (based on the
opinion of legal counsel) that providing such could violate
applicable Law or the terms of any agreement to which Seller or any
of its Affiliates is a party. Seller represents and warrants that
it is not currently aware of any Laws or agreements which would
prevent Seller from providing such Client Information.
(b) Buyer
shall not use any Client Information in any way that could violate
the privacy policies of Seller or its Affiliates as in effect as of
the Closing Date. Buyer further agrees to comply with all
applicable data protection and privacy Laws in connection with the
use of such Client Information.
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6.6
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Filings; Cooperation .
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(a) Prior
to the Closing, the Parties shall take such commercially reasonable
actions as may be necessary to satisfy the conditions to Closing
set forth in Article VII and Article VIII.
(b) On
or after the Closing Date, the Parties shall, on request, cooperate
with one another by furnishing any additional information,
executing and delivering any additional documents and instruments
and doing any and all such other things as may be