The undersigned hereby appoints Alan M. Meckler
as proxy holder, with the power to designate a substitute, and hereby authorizes him to represent and to vote as designated below,
all the shares of common stock of Mediabistro Inc. held of record by the undersigned on May 29, 2014, at the Annual Meeting of
Stockholders to be held at the offices of Mediabistro Inc., 475 Park Avenue South, 4th Floor, New York, New York 10016 on [_____],
2014, or any adjournment thereof. At his discretion, the proxy holder is authorized to vote such shares of common stock upon such
other business as may properly come before the Annual Meeting.
/ To vote by mail, please detach along
the perforated line and mail in the envelope provided. /
PLEASE
MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
x
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE “FOR” ITEMS 1, 2, 3, 4, 6, and 7.
|
1.
|
|
To approve the sale of specified assets and the assumption of specified liabilities related to the Business by Mediabistro to PGM-MB as contemplated by the Asset Purchase Agreement, dated May 28, 2014, by and among Mediabistro, PGM-MB Holdings LLC and Prometheus Global Media, LLC.
|
|
|
|
FOR
¨
|
|
|
|
AGAINST
¨
|
|
|
|
ABSTAIN
¨
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.
|
|
To approve an amendment to our certificate of incorporation to change our name to Mecklermedia Corporation.
|
|
|
|
FOR
¨
|
|
|
|
AGAINST
¨
|
|
|
|
ABSTAIN
¨
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
|
To approve, by non-binding, advisory
vote, the compensation of Mediabistro’s named executive officers to be received in connection with the sale of the Business.
|
|
|
|
FOR
¨
|
|
|
|
AGAINST
¨
|
|
|
|
ABSTAIN
¨
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
|
To ratify the adoption by the Board of Directors of the Rights Agreement, dated July 3, 2013, between Mediabistro and American Stock Transfer & Trust Company.
|
|
|
|
FOR
¨
|
|
|
|
AGAINST
¨
|
|
|
|
ABSTAIN
¨
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.
|
|
To approve, by non-binding, advisory vote, the compensation of the named executive officers.
|
|
|
|
FOR
¨
|
|
|
|
AGAINST
¨
|
|
|
|
ABSTAIN
¨
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.
|
|
To approve the adjournment of the Annual Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Annual Meeting to approve the sale of the Business proposed under Item 1.
|
|
|
|
FOR
¨
|
|
|
|
AGAINST
¨
|
|
|
|
ABSTAIN
¨
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE DIRECTOR NOMINEES LISTED BELOW WITH TERMS EXPIRING AT THE 2015 ANNUAL MEETING.
|
|
|
NOMINEES:
o
Alan
M. Meckler
o
Wayne A. Martino
o
John R. Patrick
o
William A. Shutzer
|
|
|
|
|
|
¨
FOR all nominees listed at left, except as marked below
|
|
|
¨
WITHHOLD AUTHORITY for all nominees listed to the left
|
|
|
INSTRUCTION: To withhold a vote for an individual nominee(s), write the name of such nominee(s) in the space provided below. Your shares will be voted for the remaining nominee(s).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To change the address on your account, please check the
box at right and indicate your new address in the space below. Please note that changes to the registered name(s) on the account
may not be submitted via this method.
|
|
¨
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature of
Stockholder:
|
|
|
|
|
|
Date:
|
|
|
|
|
|
Signature of
Stockholder:
|
|
|
|
|
|
Date:
|
|
|
Note:
|
|
Please sign exactly as your name or names appear on this proxy. When shares of common stock are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign in full corporate name by a duly authorized officer, giving full title as such. If the signer is a partnership, please sign in partnership name by an authorized person.
|
ANNEX A
ASSET PURCHASE AGREEMENT
BY AND AMONG
MEDIABISTRO INC.,
PGM-MB HOLDINGS
LLC, AND
PROMETHEUS GLOBAL
MEDIA, LLC
MAY 28, 2014
TABLE OF CONTENTS
|
Page
|
|
|
ARTICLE I PURCHASE AND SALE
|
1
|
1.1
|
Purchase and Sale of Assets
|
1
|
1.2
|
Retained Assets
|
3
|
1.3
|
Assumed Liabilities
|
3
|
1.4
|
Retained Liabilities
|
4
|
1.5
|
Closing Payment
|
5
|
1.6
|
Allocation of Purchase Price
|
6
|
ARTICLE II CLOSING
|
6
|
2.1
|
Closing
|
6
|
2.2
|
Documents To Be Delivered By Seller
|
7
|
2.3
|
Payment and Documents To Be Delivered By Buyer
|
7
|
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER
|
8
|
3.1
|
Corporate Organization and Standing
|
9
|
3.2
|
Authorization
|
9
|
3.3
|
No Conflict or Violation
|
10
|
3.4
|
Seller SEC Documents; Financial Statements
|
10
|
3.5
|
Absence of Undisclosed Liabilities
|
11
|
3.6
|
Real Property
|
11
|
3.7
|
Contracts
|
12
|
3.8
|
Books and Records
|
14
|
3.9
|
Equipment
|
14
|
3.10
|
Acquired Assets
|
14
|
3.11
|
Litigation
|
14
|
3.12
|
Licenses and Permits
|
14
|
3.13
|
Environmental
|
15
|
3.14
|
Intellectual Property
|
15
|
3.15
|
Customers, Distributors and Suppliers
|
21
|
3.16
|
Taxes
|
21
|
3.17
|
Employee Plans
|
23
|
TABLE OF CONTENTS
(continued)
|
|
Page
|
|
|
|
3.18
|
Employee Matters
|
24
|
3.19
|
Labor Unions
|
24
|
3.20
|
Brokers, Finders
|
25
|
3.21
|
Compliance With Laws
|
25
|
3.22
|
Insurance
|
25
|
3.23
|
Changes in Circumstances
|
25
|
3.24
|
Agreements with Affiliates
|
27
|
3.25
|
Information in Proxy Statement
|
27
|
3.26
|
Opinion of Financial Advisor
|
27
|
3.27
|
Solvency
|
27
|
3.28
|
Seller Subsidiaries
|
28
|
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER
|
28
|
4.1
|
Corporate Organization and Standing
|
28
|
4.2
|
Authorization
|
28
|
4.3
|
No Conflict or Violation
|
28
|
4.4
|
Litigation
|
28
|
4.5
|
Brokers, Finders
|
28
|
4.6
|
Source of Funds
|
28
|
ARTICLE V CONDITIONS TO CONSUMMATION OF THE CLOSING
|
29
|
5.1
|
Conditions to Buyer’s Obligations
|
29
|
5.2
|
Conditions to Seller’s Obligations
|
30
|
ARTICLE VI COVENANTS OF THE PARTIES
|
30
|
6.1
|
Conduct of Business
|
30
|
6.2
|
Acquisition Proposals
|
31
|
6.3
|
Preparation of Proxy Statement; Stockholders Meeting
|
33
|
6.4
|
Access to Records and Properties; Supplemental Information
|
35
|
6.5
|
Efforts to Consummate Closing; Cooperation
|
36
|
6.6
|
Restrictive Covenants
|
36
|
6.7
|
Maintenance of Insurance
|
39
|
6.8
|
Public Announcement
|
39
|
TABLE OF CONTENTS
(continued)
|
|
Page
|
|
|
|
6.9
|
Employment
|
39
|
6.10
|
Employee Benefit Matters
|
39
|
6.11
|
Defined Contribution Plans
|
40
|
6.12
|
COBRA
|
40
|
6.13
|
Tax Matters
|
40
|
6.14
|
Assignability and Consents
|
42
|
6.15
|
Litigation Support
|
43
|
6.16
|
Seller’s Obligation to Change Name
|
43
|
6.17
|
Seller Status
|
43
|
6.18
|
Contract Renewal
|
43
|
ARTICLE VII INDEMNIFICATION
|
44
|
7.1
|
Survival of Representations, Warranties and Covenants
|
44
|
7.2
|
Indemnification by Seller
|
44
|
7.3
|
Indemnification by Buyer
|
45
|
7.4
|
Payment Source
|
46
|
7.5
|
Procedures for Indemnification
|
46
|
7.6
|
Determination of Loss Amount
|
47
|
7.7
|
Tax Treatment
|
47
|
7.8
|
Other Exclusions
|
47
|
7.9
|
Remedies Exclusive
|
48
|
7.10
|
Additional Limitations, Mitigation, Subrogation.
|
48
|
ARTICLE VIII TERMINATION
|
48
|
8.1
|
Termination
|
48
|
8.2
|
Effect of Termination
|
49
|
8.3
|
Expenses and Termination Fee
|
50
|
ARTICLE IX MISCELLANEOUS
|
50
|
9.1
|
Expenses
|
50
|
9.2
|
Notices
|
51
|
9.3
|
Counterparts
|
52
|
9.4
|
Entire Agreement
|
52
|
TABLE OF CONTENTS
(continued)
|
|
Page
|
|
|
|
9.5
|
Interpretation
|
52
|
9.6
|
Headings
|
52
|
9.7
|
Assignment; Amendment
|
52
|
9.8
|
Governing Law
|
53
|
9.9
|
No Third-Party Rights
|
53
|
9.10
|
Non-Waiver
|
53
|
9.11
|
Severability
|
53
|
9.12
|
Incorporation of Exhibits and Schedules
|
54
|
9.13
|
Remedies
|
54
|
9.14
|
Specific Performance
|
54
|
9.15
|
WAIVER OF JURY TRIAL
|
54
|
ARTICLE X BUYER PARENT GUARANTEE
|
54
|
10.1
|
Buyer Parent Guarantee
|
54
|
10.2
|
Buyer Parent Representations and Warranties
|
55
|
EXHIBITS
Exhibits
|
|
Exhibit A
|
Definitions
|
Exhibit B
|
Form of Escrow Agreement
|
Exhibit C
|
Form of Bill of Sale and Assignment and Assumption Agreement
|
Exhibit D
|
Form of IP Assignments
|
Exhibit E
|
Form of Transition Services Agreement
|
Exhibit F
|
Form of Non-Compete Agreement
|
|
|
ASSET PURCHASE
AGREEMENT
THIS ASSET PURCHASE AGREEMENT
(this “
Agreement
”), dated as of May 28, 2014, is entered into by and among Mediabistro Inc., a Delaware corporation
(“
Seller
”), PGM-MB Holdings LLC, a Delaware limited liability company (“
Buyer
”), and solely
with respect to
Sections 6.5
,
6.6,
6.8
,
6.18
and
Article X
and the applicable provisions of
Article IX
, Prometheus Global Media, LLC, a Delaware limited liability company (“
Buyer Parent
”). Capitalized
terms used and not otherwise defined herein have the meanings set forth in
Exhibit A
attached hereto for the purposes of
this Agreement.
RECITALS
WHEREAS
, the Seller
Parties are engaged in the business of providing online publishing of editorial content, e-commerce offerings, online job board
(including career oriented services such as freelancer marketplaces), online education and certificate programs for social media,
traditional media and creative professionals and bundled subscription services of the foregoing (the “
Business
”);
WHEREAS
, Seller’s
services offerings include trade shows and conferences and research and data services and products (the “
Retained Businesses
”);
WHEREAS
, Seller
desires to sell substantially all of its and the Seller Subsidiaries’ assets, properties, rights and interests used in or
related to the Business to Buyer, and Buyer desires to purchase and acquire the same from the Seller Parties in consideration of
certain payments by Buyer to Seller and the assumption by Buyer of certain Liabilities of the Seller Parties, all on the terms
and conditions set forth in this Agreement;
WHEREAS
, the Seller
Parties desire to conduct the Retained Business after the Closing of this Agreement; and
WHEREAS
, concurrently
with the execution of this Agreement, Alan M. Meckler and Buyer have entered into a voting agreement whereby Mr. Meckler has agreed
to vote his shares of Seller’s stock in favor of the Transactions;
NOW, THEREFORE
,
in consideration of the promises and the mutual covenants hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE
I
PURCHASE AND SALE
1.1
Purchase
and Sale of Assets
. On the terms and subject to the conditions of this Agreement and the Ancillary Agreements, at
the Closing, Seller shall, and shall cause the Seller Subsidiaries to, sell, assign, transfer, convey and deliver to Buyer,
and Buyer shall purchase and acquire from the Seller Parties, all right, title and interest of the Seller Parties in and to
the Acquired Assets, as the same shall exist as of the Closing Date free and clear from all Liens, other than Permitted
Liens. For purposes of this Agreement, “
Acquired Assets
” means all of the Assets, properties and rights of
every kind (whether tangible or intangible) of any Seller Party other than the Retained Assets (as defined below), whether
now existing or acquired prior to the Closing Date as the same may exist on the Closing Date, including:
(a) the Equipment,
and all third party warranties and guarantees and other similar contractual rights as to third parties held by or in favor of any
Seller Party with respect to any of the Equipment;
(b) the Inventory;
(c) all rights and
interests in all contracts, agreements, arrangements, understandings, personal property leases, obligations (including purchase
orders), commitments, undertakings, and pending bids or proposals which bids or proposals if accepted would result in a binding
contract (whether written or oral, express or implied) (the “
Contracts
”) primarily related to the Business;
(d) to the extent
transferable under applicable Law, the Licenses and Permits, if any;
(e) the Business IP
and all content of Seller hosted on Twitter, Facebook, LinkedIn and all other social media sites (including all passwords associated
with the foregoing accounts), together with the right to sue and collect for past, present and future infringement or misappropriation
thereof, and all tangible embodiments thereof;
(f) to the extent
transferable, all rights under or pursuant to warranties and guarantees made by suppliers, manufacturers or contractors in connection
with products or services provided to the Business and all other claims and rights against third parties relating to the Acquired
Assets or the Assumed Liabilities;
(g) to the extent
transferable, any credits, prepaid expenses, deferred charges, deposits and claims for refunds or reimbursements, in each case,
relating to any of the Acquired Assets or Assumed Liabilities;
(h) to the extent
transferable, all insurance proceeds or rights to insurance proceeds under any insurance policies of Seller with respect to any
of the Acquired Assets or Assumed Liabilities;
(i) all transferable
telephone numbers listed on
Schedule 1.1(i)
;
(j) other than as
specifically set forth in
Section 1.2(e)
, all books, records, ledgers, files, documents, correspondence, lists, plats, specifications,
drawings, advertising and promotional materials, studies, Tax Returns (to the extent they relate to the Business and Acquired Assets,
provided, however, that Seller may retain copies of such Tax Returns), reports and other materials (in whatever form or medium)
that are used or held for use that relate to the conduct of the Business;
(k) all non-disclosure
or confidentiality agreements entered into by or on behalf of Seller within the last 12 months related to the sale of the Business;
and
(l) all goodwill associated,
or arising in connection, with the Business or any of the Acquired Assets.
1.2
Retained
Assets
. Notwithstanding any other provision of this Agreement to the contrary, the Seller Parties shall retain, and Buyer
shall not acquire any Seller Party’s right, title or interest in or to, and the Acquired Assets will not include the
following (collectively, the “
Retained Assets
”):
(a) Seller’s
rights under this Agreement and the Ancillary Agreements to which any Seller Party is a party;
(b) all cash on hand
and cash equivalents at the time of Closing, except for such cash or cash equivalents included in the Acquired Assets under
Section
1.1(h)
, and all bank accounts;
(c) all Contracts
of insurance and policies of insurance held by any Seller Party, including casualty, liability or group life, health or accident
insurance;
(d) all Employee Plans
and Assets related to any Employee Plan;
(e) each Seller Party’s
corporate charter, qualification to conduct business as a foreign corporation, arrangements with registered agents relating to
foreign qualifications, taxpayer and other identification numbers, corporate seal, minute books, stock transfer books, blank stock
certificates, books and records (including Tax Returns) relating to federal, state, local or foreign income, net or gross receipts,
franchise, estimated, alternative minimum, or add-on Taxes, and any other documents relating to the organization, maintenance or
existence of any Seller Party as a corporation; and
(f) all Assets exclusively
related to or used in the Retained Businesses;
(g) all equity interests
in Seller and Seller’s Subsidiaries;
(h) the Leases;
(i) all accounts receivable
for money due to any Seller Party arising out of the sale of goods or materials or the rendering of services prior to the Closing
by or on behalf of any Seller Party that are in existence as of the Closing;
(j) Seller’s
interests in that certain Asset Purchase Agreement dated as of August 7, 2009 by and between Seller (f/k/a WebMediaBrands Inc.)
and QuinStreet, Inc.; and
(k) the Contracts,
Assets, properties, rights and interests specifically described on
Schedule 1.2(k)
.
1.3
Assumed
Liabilities
. On the terms and subject to the conditions contained in this Agreement and except as otherwise provided in
Section 1.4
,
at the Closing, Buyer will assume and thereafter pay, perform or otherwise discharge only the following Liabilities of the
Seller Parties (the “
Assumed Liabilities
”):
(a) all Liabilities arising under or
related to the Contracts included in the Acquired Assets from and after the Closing (other than Liabilities attributable to any
breach or default, or deemed breach or default, by a Seller Party under the terms thereof), including all deferred revenue, including
prepaid subscriptions and other similar liabilities, associated with such Contracts or the Business;
(b) all Liabilities, including without
limitation Tax Liabilities, arising after the Closing Date to the extent arising out of or related to Buyer’s ownership or
operation of the Business or Buyer’s use or ownership of the Acquired Assets;
(c) all Liabilities relating to the Transferred
Employees, only to the extent arising following the Closing Date;
(d) Taxes arising
as a result of the Transactions that are the responsibility of the Buyer pursuant to
Section 6.13(f)
, or for which Buyer
is responsible pursuant to any of the Ancillary Agreements; and
(e) all Liabilities
specifically described on
Schedule 1.3(e)
.
1.4
Retained Liabilities
.
Notwithstanding any other provision of this Agreement, the Seller Parties shall retain, and Buyer shall not assume or be responsible
or liable with respect to any, Liabilities of any Seller Party other than the Assumed Liabilities (collectively, the “
Retained
Liabilities
”). By way of example and not of limitation, Buyer will not be responsible for any of the following (each
of which will constitute a Retained Liability):
(a) all accounts payable of the Seller
arising out of the purchase of goods, materials or services prior to the Closing by or on behalf of the Seller that are in existence
as of the Closing;
(b) the Seller Transaction Expenses;
(c) any Liability relating to, based
in whole or in part on events or conditions occurring or existing in connection with, or arising out of, any Retained Assets;
(d) all Indebtedness of any Seller Party
outstanding as of the close of business on the Closing Date (including, for the avoidance of doubt, all Indebtedness payable to
Alan M. Meckler);
(e) any Liabilities under the Leases
or with respect to the Leased Real Property;
(f) any Liability
or obligation of any Seller Party or relating to the Business, the Acquired Assets or the Assumed Liabilities with respect to:
(i) Taxes for any Pre-Closing Tax Period, (ii) Taxes arising as a result of the Transactions that are the responsibility of Seller
pursuant to
Section 6.13(f)
, or for which a Seller Party is responsible pursuant to any of the Ancillary Agreements, and
(iii) other Taxes of a Seller Party of any kind that become a Liability of the Buyer as a transferee or successor, or otherwise
by operation of Contract or Law;
(g) any Liability arising out of or related
to the generation, use, handling, presence, treatment, storage, transportation, disposal or Release of any Hazardous Materials,
including any offsite disposal of Hazardous Materials, in connection with (i) the Retained Assets, whether before or after Closing,
or (ii) the ownership or the operation of the Business, the Leased Real Property, or the Acquired Assets prior to the Closing,
in each case, including any such Liabilities resulting from violations of applicable Environmental Laws;
(h) any Liabilities arising out of or
relating to any current or former officer, director, employee, consultant, leased employee, independent contractor or contract
employee, including all eligible beneficiaries, of any Seller Party, and further including the employment, engagement, compensation
and termination thereof by any Seller Party occurring prior to, and on or after the Closing Date or as a result of the Transactions,
including as a result of a change of control or under any Employee Plan, Multiemployer Plan (including any related withdrawal liability)
or any claim for benefits, equity awards, bonuses or other incentives or under COBRA or HIPAA;
(i) other than as
expressly assumed pursuant to
Section 1.3(a)
above, any Liability arising out of or relating to services provided or products
designed, manufactured, sold or repaired in connection with the Business on or prior to the Closing Date, including all product
return, rebate, credit and warranty obligations, and all product liabilities, relating thereto;
(j) any Liability arising out of or relating
to any action, charge, claim (including any cross-claim or counter-claim), suit, litigation, arbitration, proceeding (including
any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation
relating to the Business relating to any period on or prior to the Closing Date;
(k) any Liability of Seller under the
Agreement and the Ancillary Agreements to which any Seller Party is a party; and
(l) the Liabilities
specifically described on
Schedule 1.4(l)
.
1.5
Closing Payment.
(a)
Closing Payment
Calculation
. At the Closing, Buyer will pay to Seller, by wire transfer of immediately available funds to an account or accounts
designated by Seller, an amount equal to (i) Eight Million Dollars ($8,000,000) (the “
Initial Purchase Price
”),
minus
(ii) the Escrow Amount. The sum of the Initial Purchase Price less the Escrow Amount, is referred to herein as the
“
Closing Payment
”.
(b)
Escrow Holdback
.
To secure the indemnification obligations of Seller set forth in
Article VII
, at the Closing, Buyer will deposit an amount
equal to One Million Five Hundred Thousand Dollars ($1,500,000) less the amount by which any Covered Buyer Expenses incurred as
of the Closing Date exceed, in the aggregate, the Covered Buyer Expense Deductible (the “
Escrow Amount
”) out
of the Initial Purchase Price in immediately available funds in an escrow account (the “
Escrow Fund
”) with
Deutsche Bank Trust Company Americas, a New York banking corporation, as escrow agent (the “
Escrow Agent
”),
pursuant to the terms and conditions of an escrow agreement (the “
Escrow Agreement
”) in substantially the form
attached hereto as
Exhibit B
.
1.6
Allocation
of Purchase Price
.
(a) Within 90 days
after the Closing Date, Buyer will provide to Seller copies of Internal Revenue Service Form 8594 and any required exhibits thereto
(the “
Allocation Statement
”), prepared in accordance with Section 1060 of the Code setting forth its calculation
of the amount of the total consideration (including Assumed Liabilities) allocable to the Acquired Assets, including the amount
allocable to the covenant not to compete described in
Section 6.6(b)
.
(b) Seller will review the Allocation
Statement and, to the extent Seller disagrees in good faith with the content of the Allocation Statement, Seller will inform Buyer
of such disagreement within 45 days after receipt of the Allocation Statement. Seller and Buyer will attempt in good faith to resolve
such disagreement. If Seller and Buyer are unable to agree on the Allocation Statement within 180 days after the Closing Date,
Seller and Buyer will each use their own allocation statement.
(c) If Buyer and Seller agree on the
Allocation Statement, Buyer and Seller will report the allocation of the total consideration among the Acquired Assets in a manner
consistent with the Allocation Statement and will act in accordance with the Allocation Statement in the preparation and timely
filing of all income Tax Returns (including filing Form 8594 with their respective federal income Tax Returns for the taxable year
that includes the Closing Date and any other forms or statements required by the Code, the Internal Revenue Service or any applicable
state or local Tax Authority). Buyer and Seller agree to promptly provide the other Party with any additional information and reasonable
assistance required to complete Form 8594 or compute Taxes arising in connection with (or otherwise affected by) the Transactions.
(d) Buyer and Seller will promptly inform
one another in writing of any challenge by any Tax Authority to any allocation made pursuant to this section and agree to consult
with and keep one another informed with respect to the status of, and any discussion, proposal or submission with respect to, such
challenge.
(e) Any adjustments to the Purchase Price
shall be allocated in a manner consistent with the Allocation Statement.
ARTICLE II
CLOSING
2.1
Closing
.
The closing of the Transactions (the “
Closing
”) will occur within three Business Days following the satisfaction
or waiver of each of the conditions to Closing set forth in
Article V
at the offices of Jenner & Block LLP, 919 Third
Avenue, New York, New York, or at such other place or on such other date as the Parties may agree in writing. The date on which
the Closing actually occurs will be referred to as the “
Closing Date
,” and the Closing will be deemed effective
as of 11:59 p.m., Eastern Time, on the Closing Date.
2.2
Documents
To Be Delivered By Seller
. At the Closing, Seller shall (and with respect to items (a) and (b) below shall cause the Seller
Subsidiaries to) deliver to Buyer:
(a) a duly executed
counterpart of the bill of sale and assignment and assumption agreement, in substantially the form attached as
Exhibit C
(the “
Bill of Sale and Assignment and Assumption Agreement
”);
(b) duly executed
counterparts of the intellectual property assignments, in substantially the form attached as
Exhibit D
and domain name
assignments in the form required by the registrars of the domain names included in the Acquired Assets (the “
IP Assignments
”);
(c) a duly executed counterpart of the
Escrow Agreement;
(d) a duly executed
counterpart of the transition services agreement, in substantially the form attached as
Exhibit E
(the “
Transition
Services Agreement
”);
(e) a good standing certificate for Seller
from the Secretary of State of the State of Delaware, dated no earlier than 10 Business Days prior to the Closing Date;
(f) a certificate of a Secretary, Assistant
Secretary or other similar officer of Seller certifying as to (i) the resolutions of the board of directors of Seller approving
and authorizing this Agreement, the Ancillary Agreements to which Seller is a party and the Transactions and (ii) the requisite
approval and authorization of this Agreement and the Transactions by the stockholders of Seller;
(g) copies of all Closing Consents;
(h) the certificate
required by
Section 5.1(e)
;
(i) releases, including
termination statements under the Uniform Commercial Code of any financing statements filed against any Acquired Assets, evidencing
discharge, removal and termination of all Liens required by
Section 5.1(h)
, which releases shall be effective at or
prior to the Closing;
(j) evidence of the
change of Seller’s and Mediabistro.com Subsidiary Inc.’s, a Delaware corporation (“
MB Sub
”), corporate
name, effective as of the Closing;
(k) a certificate of non-foreign status
from Seller dated as of the Closing Date in form and substance required by Treasury Regulations Section 1.1445-2(b)(2) issued pursuant
to Section 1445 of the Code stating that no Seller Party is a foreign person within the meaning of Section 1445 of the
Code; and
(l) a noncompetition
and nonsolicitation agreement, duly executed by Alan Meckler in the form attached hereto as
Exhibit F
(the “
Noncompete
Agreement
”).
2.3
Payment and
Documents To Be Delivered By Buyer
.
(a) At the Closing, Buyer shall deliver
to Seller (and with respect to items (ii) and (iii) below, the applicable Seller Subsidiary):
(i) the Closing Payment;
(ii) a duly executed counterpart of the
Bill of Sale and Assignment and Assumption Agreement;
(iii) duly executed counterparts of the
IP Assignments;
(iv) a duly executed counterpart of the
Escrow Agreement;
(v) a duly executed counterpart of the
Transition Services Agreement;
(vi) a duly executed counterpart of the
Noncompete Agreement
(vii) the
certificate required by
Section 5.2(d)
;
(viii) a good standing certificate for
Buyer from the Secretary of State of the State of Delaware, dated no earlier than 10 Business Days prior to the Closing Date; and
(ix) a certificate of a Secretary, Assistant
Secretary or other similar officer of Buyer certifying as to (i) the resolutions of the board of directors of Buyer approving and
authorizing this Agreement, the Ancillary Agreements to which Seller is a party and the Transactions and (ii) the requisite approval
and authorization of this Agreement and the Transactions by the stockholders of Buyer.
(b) At the Closing, Buyer shall deliver
the Escrow Amount to the Escrow Agent.
ARTICLE III
REPRESENTATIONS
AND WARRANTIES OF SELLER
Except as set forth
in the Disclosure Schedules delivered by Seller to Buyer concurrently with the execution and delivery of this Agreement, Seller
hereby represents and warrants to Buyer as set forth in this
Article III
. The schedule numbers contained in the Disclosure
Schedules correspond to the section numbers of the representations and warranties in the Agreement. Any matter, information or
item disclosed in the Disclosure Schedules qualifies the corresponding section in the Agreement and the other sections in the
Agreement, as the case may be, to the extent that it is reasonably apparent on its face that such disclosure qualifies or applies
to such other section(s). The inclusion of any matter, information or item in the Disclosure Schedules does not (i) constitute
an admission of any liability or obligation by Seller or any other person to any third party, or (ii) otherwise imply that any
such matter, information or item is material or creates a measure for materiality for the purposes of the Agreement or any other
purpose. No disclosure in the Disclosure Schedules relating to any possible breach or violation of any Contract or Law may be
construed as an admission or indication that any such breach or violation exists or has actually occurred. Where the terms of
a Contract, action or other disclosure item have been summarized or described in the Disclosure Schedules, such summary or description
does not purport to be a complete statement of the material terms of such Contract, action or other item and are qualified by
reference to the text of the Contract, action or documents described.
3.1
Corporate
Organization and Standing
. Seller is a corporation duly organized, validly existing and in good standing under the Laws of
the State of Delaware and has all requisite corporate power and authority to operate the Business, to own, lease or use the properties
used or held for use in the Business, to carry on the Business as presently conducted and to enter into and perform this Agreement
and the Ancillary Agreements to which Seller is a party and the Transactions. Seller is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the nature of the Business as now being conducted by it or the
property owned or leased by it makes such qualification necessary. Each Seller Subsidiary is a corporation duly organized, validly
existing and in good standing under the Laws of the state of its incorporation and has all requisite corporate power and authority
to operate the Business, to own, lease or use the properties used or held for use in the Business, to carry on the Business as
presently conducted and to enter into and perform the Ancillary Agreements to which it is a party and the Transactions. Each Seller
Subsidiary is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the
nature of the Business as now being conducted by it or the property owned or leased by it makes such qualification necessary.
3.2
Authorization
.
The execution and delivery by Seller of this Agreement and the Ancillary Agreements to which Seller is or is to become a party,
the performance of its obligations hereunder and thereunder, and the Transactions have been duly and validly authorized by all
necessary corporate action on the part of Seller other than the Seller Stockholder Approval. Seller has the right, power and authority
to execute and deliver this Agreement and the Ancillary Agreements to which it is or is to become a party and to perform its obligations
hereunder and thereunder. This Agreement has been, and each of the Ancillary Agreements to which Seller or a Seller Subsidiary
is or is to become a party, when executed and assuming due authorization, execution and delivery by Buyer and each other party
hereto or thereto other than a Seller Party, will be, duly executed and delivered by such Seller Party and constitute valid and
legally binding obligations of Seller enforceable in accordance with their respective terms, except as such enforceability may
be (i) limited by applicable bankruptcy, insolvency, reorganization, fraudulent transfer and other laws affecting creditors’
rights generally (other than claims brought by Alan Meckler), and (ii) subject to the rules of law governing specific performance,
injunctive relief, or other equitable remedies. The Board of Directors of Seller, has (a) (i) determined that the Transactions
are in the best interests of Seller and its stockholders and approved and declared advisable this Agreement and the Transactions,
on the terms and subject to the conditions set forth herein, and (ii) resolved to recommend that Seller’s stockholders vote
in favor of the Transactions and (b) directed that this Agreement and the terms of the Transaction be submitted to the Seller’s
stockholders for their approval. The execution and delivery by each Seller Subsidiary of the Ancillary Agreements to which it
is to become a party, the performance of its obligations thereunder, and the Transactions have been duly and validly authorized
by all necessary corporate action on the part of such Seller Subsidiary other than the Seller Stockholder Approval. Each Seller
Subsidiary has the right, power and authority to execute and deliver the Ancillary Agreements to which it is to become a party
and to perform its obligations hereunder and thereunder.
3.3
No Conflict
or Violation
. Except as set forth on
Schedule 3.3
, neither the execution and delivery of this Agreement or the Ancillary
Agreements to which any Seller Party is a party nor the consummation of the Transactions will (a) require consent under or
violate, conflict with or result in or constitute a default under or result in the termination or the acceleration of, or the
creation in any party of any right (whether or not with notice or lapse of time or both) to declare a default, accelerate, terminate,
modify or cancel any Material Contract to which any Seller Party is a party or by which it is bound, (b) violate, conflict
with or result in a breach of or constitute a default under any provision of the articles of incorporation or by-laws of any Seller
Party, (c) violate, conflict with or result in a breach of or constitute a default under any judgment, order, decree, pronouncement,
rule or regulation of any court or Governmental Authority to which any Seller Party or the Business is subject, (d) violate,
conflict with or result in a breach of any law, statute, regulation, rule, ordinance, requirement, directive, restriction, order,
judgment, decree, or other binding action or requirement of any Governmental Authority (a “Law”), or (e) result
in the creation or imposition of any Lien upon the Acquired Assets, other than a Permitted Lien.
3.4
Seller SEC
Documents; Financial Statements
.
(a) Seller has filed
and furnished all required reports, schedules, forms, prospectuses, and registration, proxy and other statements with the SEC
since January 1, 2012 (collectively and together with all documents filed on a voluntary basis on Form 8-K, and in each case including
all exhibits and schedules thereto and documents incorporated by reference therein, the “
Seller SEC Documents
”).
None of Seller’s Subsidiaries is required to file periodic reports with the SEC pursuant to the Exchange Act. Seller has
made available (including via EDGAR) to Buyer true and complete copies of the Seller SEC Documents filed with the SEC by Seller
on or prior to the Closing Date, and Seller shall make available (including via EDGAR) to Buyer true and complete copies of any
Seller SEC Documents filed with the SEC by Seller after the date hereof and prior to the Closing Date. As of their respective
filing dates, (i) the Seller SEC Documents complied or will comply, as applicable, in all material respects with the requirements
of the Exchange Act and the Securities Act and (ii) none of the Seller SEC Documents contained or will contain, as applicable,
any untrue statement of a material fact related to the Business or the Acquired Assets, or omitted or will omit, as applicable,
to state a material fact required to be stated therein or necessary to make the statements made therein related to the Business
or the Acquired Assets, in the light of the circumstances under which they were made, not misleading, except to the extent amended
or superseded by a subsequently filed Seller SEC Document.
(b)
Schedule 3.4(b)
sets forth the following financial statements of the Business: (i) the unaudited balance sheet of the Business as of December
31, 2012 and December 31, 2013 and the related statements of income for the year then ended; and (ii) the unaudited balance sheet
of the Business as of March 31, 2014 and the related statements of income for the three months then ended (together, the “
Financial
Statements
”). The Financial Statements were prepared in accordance with GAAP applied on a basis consistent throughout
the periods indicated (except as otherwise stated in such Financial Statements) and fairly present in all material respects the
consolidated financial condition and the results of operations of the Business as at the respective dates thereof and for the
periods indicated therein.
(c) Seller has implemented and maintains
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) designed to ensure that all
material information relating to Seller, including its consolidated Subsidiaries, required to be disclosed by Seller in the reports
that it files or submits under the Exchange Act is recorded, processed, summarized and reported to the individuals responsible
for preparing such reports within the time periods specified in the rules and forms of the SEC and all such information is accumulated
and communicated to Seller’s management, including its principal executive and principal financial officers, and to other
individuals responsible for preparing such reports as appropriate to allow timely decisions regarding required disclosure and to
make the certifications of the principal executive officer and principal financial officer of Seller required under the Exchange
Act with respect to such reports. Seller has disclosed, based on its most recent evaluation prior to the date hereof, to Seller’s
outside auditors and the audit committee of Seller’s board of directors (i) any significant deficiencies and material weaknesses
in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange
Act) that are reasonably likely to adversely affect Seller’s ability to record, process, summarize and report financial information
and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in Seller’s
internal control over financial reporting.
(d) Seller’s system of internal
controls over financial reporting is reasonably sufficient in all material respects to provide reasonable assurance regarding the
reliability of Seller’s financial reporting and financial statements, and includes policies and procedures (i) providing
reasonable assurance that (A) transactions are recorded as necessary to permit preparation of financial statements in accordance
with GAAP and (B) receipts and expenditures are in accordance with the authorization of Seller’s management and directors
and (ii) regarding prevention or timely detection of unauthorized acquisition, use or disposition of Seller’s assets that
could have a material effect on Seller’s financial statements. No significant deficiency or material weakness was identified
in management’s assessment of internal controls as of December 31, 2013 with respect to the Business or Acquired Assets,
nor has any such deficiency or weakness been identified between that date and the date of this Agreement with respect to the Business
or Acquired Assets.
3.5
Absence of
Undisclosed Liabilities
. Neither Seller nor any of its Subsidiaries has any Liabilities related to the Business, other than
those (i) set forth or adequately provided for in the Financial Statements, (ii) incurred or accrued since March 31, 2014
consistent with past practice (including in amount) and in the ordinary and normal course of business, (iii) incurred in connection
with this Agreement or (iv) set forth on
Schedule 3.5
.
3.6
Real Property
.
(a)
Schedule 3.6(a)
sets forth a list of each lease or similar agreement, including all amendments, modifications, supplements, renewals, extensions
and guarantees related thereto (collectively, the “
Leases
”), related to the Leased Real Property.
(b) Seller’s possession and quiet
enjoyment of the Leased Real Property have not been disturbed, and Seller has not subleased, licensed or otherwise granted any
Person the right to use or occupy all or any portion of the Leased Real Property nor has Seller collaterally assigned, mortgaged
or otherwise encumbered its interest in any Leased Real Property. There are no condemnation or eminent domain proceedings pending
against the Leased Real Property or, to the Knowledge of Seller, contemplated or threatened against the Seller’s interest
in all or any part of the Leased Real Property, and all buildings, facilities and other improvements located on the Leased Real
Property are supplied with utilities and other services necessary for the normal conduct of the business undertaken at such Leased
Real Property.
3.7
Contracts
.
Set forth on
Schedule 3.7
is a list of the following Contracts in each case which are used or held for use in or related
to the conduct of the Business:
(a) any Contract, sales order or purchase
order (i) to which Seller is a party or which is otherwise binding on Seller or the Business and is presently in effect which involves
aggregate future payments by or to the Business in excess of $20,000 in any 12-month period or extends for a period of more than
one year and is not terminable at will without penalty (other than normal course inventory purchase or sale Contracts) or (ii) between
Seller and any distributors, customers, manufacturers’ agents or selling agents in excess of $10,000 (excluding advertising
insertion orders);
(b) each joint venture, partnership,
teaming or similar Contract involving a sharing of profits or expenses to which Seller is a party;
(c) each Contract or other agreement
entered into outside the ordinary course of business under which Seller has agreed to indemnify any Person;
(d) each non-competition, restrictive
covenant, exclusivity covenant or other agreement that restricts Seller or, to the Knowledge of Seller, any of its Employees from
doing business anywhere in the world;
(e) each Contract presently in effect,
whether or not fully performed, by Seller with any current or former officer, director, consultant, independent contractor, other
Employee (or group of Employees) or equity holder (or group of equity holders), or labor organization representing Employees, of
Seller;
(f) each Contract pursuant to which the
Business is committed to make a capital expenditure or to purchase a capital asset in excess of $50,000 which is not contemplated
by Seller’s capital expenditure budget for the Business;
(g) each Contract between Seller and
any consultant, representative or broker of Seller;
(h) each Contract that is material to
the Business and which relates to the Business IP or to third-party Intellectual Property Rights (including licenses-in and licenses-out);
(i) each Contract that (A) grants any
Person other than Seller and its Affiliates any (1) exclusive license, supply or distribution rights or other exclusive rights,
(2) “most favored nation” rights or (3) rights of first refusal, rights of first negotiation or similar rights with
respect to any Business Product or Business IP or (B) contain any provision that requires the purchase of all or a given portion
of the Business’s requirements from a given third party;
(j) each Contract relating to the employment
of any Employee and any change in control or retention agreement or other compensatory agreement under which benefits (including
any severance, termination or “golden parachute” payments or similar payments, additional rights or benefits) exist
or will arise, be increased or accelerated by the occurrence of the Transactions or upon the termination of employment or any other
compensatory agreement (other than any agreement for “at will” employment) that provides for aggregate payments to
any Person in any calendar year in excess of $50,000;
(k) each other Contract that is material
to the Business or outside the ordinary course of business; and
(l) each Contract
that would reasonably be expected to have a Material Adverse Effect if (i) any other party cancelled or terminated such Contract
(with or without notice or passage of time), (ii) any other party claimed monetary damages (either individually or in the aggregate
with all other such claims under such Contract) from Seller, or (iii) any obligation were accelerated or any benefit were
lost under such Contract (the items described in clauses (a) through (k) together with the Leases and Business IP Contracts being
collectively referred to herein as the “
Material Contracts
”).
Seller has made available
to Buyer correct and complete copies of all Contracts listed or required to be listed on
Schedule 3.7
, together with all
modifications or supplements thereto (or a description if unwritten). Seller has performed, or is performing, in all material
respects all contractual obligations required to be performed by it to date under all Material Contracts. Seller is not in default
in any material respect under any Material Contract, and to the Knowledge of Seller, no other party is in breach or default under
or has repudiated any term of any Material Contract. Each Material Contract is legally valid and binding and enforceable against
Seller and, to the Knowledge of Seller, against each other party thereto, in either case subject to the effect of bankruptcy,
insolvency, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally and except as the
availability of equitable remedies may be limited by general principles of equity. Each Material Contract will continue to be
legally valid and binding and enforceable immediately following the Closing in accordance with its terms as in effect prior to
the Closing, subject to the effect of bankruptcy, insolvency, moratorium or other similar Laws affecting the enforcement of creditors’
rights generally and except as the availability of equitable remedies may be limited by general principles of equity. Seller has
no Liabilities under any Material Contract providing for (i) penalties in the event of misfeasance by Seller in the performance
of its duties thereunder, or (ii) the renegotiation or redetermination of profits or prices, nor will any of Seller’s
costs which are incurred or accruable prior to the Closing under Material Contracts, or under subcontracts entered into between
Seller and any other Person, be subject to disallowance. Seller has not received any written notice of termination, cancellation
or non-renewal with respect to any Material Contract, and to the Knowledge of Seller, no other party to a Material Contract plans
to terminate, cancel or not renew any Material Contract.
3.8
Books and
Records
. The books and records of Seller maintained in connection with the Business (including (a) books and records relating
to the purchase of materials and supplies, manufacture or processing of products, sales of products, dealings with customers,
invoices, customer lists, inventories, supplier lists and personnel records, and (b) computer software and data in computer readable
and human readable form used to maintain such books and records together with the media on which such software and data are stored
and all documentation relating thereto) accurately record all transactions relating to the Business, and have been maintained
consistent with good business practice.
3.9
Equipment
.
Set forth on
Schedule 3.9
is a list of all material equipment, tools, goods, furnishings, fixtures, office equipment, production
and other supplies and spare and repair parts, stores and other tangible personal property (whether owned or leased) in each case
which is used by the Business or otherwise used or held for use in or related to the conduct of the Business (the “
Equipment
”).
3.10
Acquired
Assets
. Seller has good, valid and marketable title to all items of owned Acquired Assets, free and clear of all Liens of
any kind except (a) Liens for Taxes and assessments or governmental charges or levies, in each case not yet due and payable, (b)
Liens of landlords, carriers, warehousemen, mechanics and materialmen arising in the ordinary course of business under applicable
Law, and (c) for Acquired Assets other than Intellectual Property Rights, minor imperfections of title, none of which, individually
or in the aggregate, materially detracts from the value of or impairs the use of the affected Acquired Asset or impairs any operations
of the Business as it is currently conducted (the Liens described in clauses (a) through (c) being collectively referred to herein
as “
Permitted Liens
”). Other than as set forth on
Section 3.10
, the Acquired Assets include all Assets,
properties and rights used or held for use by Seller that (y) are necessary to operate the Business as presently conducted and
(z) generated the financial performance and results of operations reflected in the Financial Statements. The tangible Acquired
Assets, including Equipment and the Leased Real Property, are in good operating condition and repair, ordinary wear and tear excepted,
and are usable in the ordinary course of business.
3.11
Litigation
.
Except as set forth on
Schedule 3.11
, since January 1, 2011, Seller has not been a party to, nor, to the Knowledge of Seller,
been threatened with any judgment, order, decree, claim, action, suit, proceeding or investigation related to the Business and,
to the Knowledge of Seller, none of Seller’s Affiliates, directors, officers, agents or Employees (in their capacity as
such) have been a party to or been threatened with any such judgment, order, decree, claim, action, suit, proceeding or investigation.
There is no legal, arbitration, administrative or other formal proceeding or governmental investigation pending or, to the Knowledge
of Seller, threatened against Seller that seeks to enjoin or otherwise challenges the consummation of any of the Transactions.
3.12
Licenses
and Permits
.
Schedule 3.12
sets forth a list of all material licenses, franchises, permits, approvals and other similar
authorizations, and any waivers of the foregoing, issued by or obtained from any Governmental Authority that are necessary for,
or otherwise material to, the conduct of the Business (collectively, “
Licenses and Permits
”). All such Licenses
and Permits are in full force and effect, and Seller is in compliance in all material respects with such Licenses and Permits.
3.13
Environmental
.
(a) To the Knowledge of Seller, the Business,
Leased Real Property and Acquired Assets have at all times been in compliance with all Environmental Laws and the Licenses and
Permits. Seller has timely given all notices, made all reports, and prepared and maintained all records required by Environmental
Law.
(b) To the Knowledge of Seller, there
has been no Release on or from the Leased Real Property which, with notice or the lapse of time, or both, would be required under
Environmental Laws to be abated, remediated or reported to any Governmental Authority, and, to the Knowledge of Seller, there are
no past or present conditions, events, circumstances or facts that could reasonably be expected to form the basis of any claim
against Seller or the Business or related to the Leased Real Property based on or related to any Release or any violation of any
Environmental Law.
(c) Seller has not received any notice
of alleged, actual or potential responsibility for, or any inquiry concerning, and has no Knowledge of any investigation regarding,
(i) any Release or threatened Release from or relating to its operation of the Business, the Leased Real Property or the Acquired
Assets; or (ii) an alleged violation of or non-compliance of any Environmental Law or with the conditions of any License or
Permit required under applicable Environmental Law and relating to its operation of the Business, Leased Real Property or the Acquired
Assets.
(d) Notwithstanding any other provision
herein, the representations and warranties contained in Section 3.13(a), (b), and (c) constitute Seller’s sole representations
and warranties in respect of the compliance of the Business, Leased Real Property and Acquired Assets with Environmental Laws.
3.14
Intellectual
Property
.
(a)
Registered
IP
.
Schedule 3.14(a)
accurately identifies: (i) each item of Registered Business IP (excluding uniform resource
locators where the host is a domain name listed on
Schedule 3.14(a))
; (ii) the jurisdiction in which each such item of
Registered Business IP has been registered or filed and the applicable registration or serial number; and (iii) any other Person
that has an ownership interest in each such item of and the nature of such ownership interest.
(b)
Inbound Licenses
.
Schedule 3.14(b)
accurately identifies: (i) each Business IP Contract pursuant to which any Intellectual Property
Right is licensed, sold, assigned, or otherwise conveyed or provided (including in the form of a covenant not to assert) by any
Person to Seller (other than (A) agreements between Seller and its employees or freelancers and (B) any non-customized
Software that (1) is so licensed, sold, assigned, or otherwise conveyed or provided solely in executable or object code form
pursuant to a non-exclusive, internal use software license, and (2) is generally available on standard terms and has been
licensed by Seller for less than $10,000 for internal-use in the Business); and (ii) whether the licenses or rights granted
to Seller in each such Business IP Contract are exclusive or non-exclusive.
(c)
Outbound Licenses
.
Schedule 3.14(c)
accurately identifies (i) each Business IP Contract pursuant to which any Person has been granted
any license under, or otherwise has received or acquired any right (whether or not currently exercisable) or interest in (including
in the form of a covenant not to assert), any Business IP (other than (A) the end user terms and conditions of use of the
websites included in the Acquired Assets, and (B) any Business IP Contract that has expired or terminated and under which
the benefit of any right or interest (including in the form of a covenant not to assert) granted in that Business IP Contract
with respect to any Business IP does not continue to inure to any Person; and (ii) whether the licenses or rights granted
under each such Business IP Contract are exclusive or non-exclusive. Seller is not bound by, and no Business IP is subject to,
any Contract containing any covenant or other provision that in any way materially limits or restricts the use, sale, exploitation,
assertion, or enforcement of any Business IP anywhere in the world.
(d)
Royalty Obligations
.
Schedule 3.14(d)
contains a complete and accurate list of all royalties, fees, commissions, and other amounts payable
by Seller or its Affiliates to any other Person (other than sales commissions paid to employees according to Seller’s standard
commissions plan) upon or for the use, manufacture, sale, license, or distribution of any Business Product or the use of any Business
IP.
(e)
Standard Form
IP Agreements
. Seller has provided to Buyer a complete and accurate copy of Seller’s standard form of any Business IP
Contract currently used by Seller or currently in effect, including Seller’s standard form of: (i) employee handbook;
(ii) consulting or independent contractor agreement containing any intellectual property assignment or license of Intellectual
Property Rights; (iii) confidentiality or nondisclosure agreement; and (iv) end user terms and conditions of use of
the Websites. Except as set forth in
Schedule 3.14(f)(iv)
or as would not have a material and adverse effect on the
Business, no Business IP Contract materially deviates from the corresponding standard form agreement provided to Buyer in any
of the following manners: (1) any Person has been granted any license under, or otherwise has received or acquired any right
(whether or not currently exercisable) or interest in (including in the form of a covenant not to assert), any Business IP that
is materially broader in scope than as set forth in the corresponding standard form agreement; (2) any Person has granted
an assignment of, or license, right or other interest to, any Intellectual Property Right that is materially narrower in scope
than as set forth in the corresponding standard form agreement (excluding any Business IP Contract with any freelancer pursuant
to which Seller is granted a shorter period of exclusive publication rights than as set forth in the corresponding standard form
agreement provided to Buyer); (3) Seller has undertaken any indemnification obligation that is materially broader in scope
than as set forth in the corresponding standard form agreement; (4) any Person has undertaken any indemnification obligation
that is materially narrower in scope than as set forth in the corresponding standard form agreement; or (5) any limitation
of liability provision materially deviates from the corresponding standard form agreement.
(f)
Ownership
Free and Clear
. Seller exclusively owns all right, title and interest to and in the Business IP free and clear of any Encumbrances
(other than licenses and rights granted pursuant to the Business IP Contracts identified in
Schedule 3.14(c)
, Permitted
Liens, the end user terms and conditions of use of the Websites, or as set forth in
Schedule 3.14(f))
. Without limiting
the generality of the foregoing:
(i)
Employees
and Contractors
. Except as set forth in
Schedule 3.14(f)(i)(A)
, no current or former stockholder, officer, director
or employee of Seller has any valid claim, right (whether or not currently exercisable) or interest to or in any Business IP or
Business Product. To the Knowledge of Seller, no employee of the Business is (a) bound by or otherwise subject to any Contract
restricting him or her from performing his or her duties for Seller or (b) in breach of any Contract with any former employer
or other Person concerning Intellectual Property Rights or confidentiality due to his or her activities as an employee of Seller.
Except as set forth in
Schedule 3.14(f)(i)(B)
, to the Knowledge of Seller, each Person who is or was an employee or contractor
of a third party who is or was involved in the creation or development of any Business Product or Business IP which has been assigned
by such third party to Seller, has signed a valid, enforceable agreement containing an assignment of Intellectual Property Rights
pertaining to such Business Product or Business IP in relation to such third party (enabling such rights to be assigned from such
third party to Seller) and confidentiality provisions protecting the Business IP.
(ii)
Government
Rights
. To the Knowledge of Seller, no funding, facilities or personnel of any Governmental Authority or any public or private
university, college, or other educational or research institution were used, directly or indirectly, to develop or create, in
whole or in part, any Business IP.
(iii)
Protection
of Proprietary Information
. Seller has taken commercially reasonable steps to maintain the confidentiality of and otherwise
protect and enforce its rights in all proprietary information pertaining to the Business or any Business Product that Seller holds,
or purports to hold, as a trade secret. Without limiting the generality of the foregoing, no portion of the source code for any
Software owned by Seller and currently used by Seller in connection with the Business has been disclosed (other than to employees
or contractors of Seller bound by nondisclosure obligations) or licensed to any escrow agent or other Person.
(iv)
Past
IP Dispositions
. Except as set forth in the Schedule 3.14(f)(iv), in the five-year period immediately preceding
the date hereof, Seller has not assigned or otherwise transferred ownership of, or agreed to assign or otherwise transfer ownership
of, any Intellectual Property Rights to any other Person that, absent such assignment or transfer, would constitute Business IP.
(v)
Standards
Bodies
. Seller is not and has not been a member or promoter of, or a contributor to, any industry standards body or similar
organization that requires or obligates Seller to grant or offer to any other Person any license or right to any Business IP.
(vi)
Sufficiency
.
Seller owns or otherwise has, and at the Closing Buyer will have, by ownership or license, all Intellectual Property Rights needed
to conduct the Business as currently conducted and currently planned to be conducted by Seller.
(g)
Valid and
Enforceable
. All Business IP is valid, subsisting and enforceable. Without limiting the generality of the foregoing:
(i)
Misuse
and Inequitable Conduct
. To the Knowledge of Seller, Seller has not engaged in patent or copyright misuse or any fraud or
inequitable conduct in connection with Registered Business IP.
(ii)
Trademarks
.
Except as set forth in
Schedule 3.14(g)(ii)
, no Trademark owned, used or applied for by Seller in connection with
the Business (collectively, the “
Business Trademarks
”) conflicts or interferes with any Trademark owned, used
or applied for by any other Person; provided, however, that the foregoing representation and warranty shall be deemed to be made
to the Knowledge of Seller with respect to any such conflict or interference caused by the use by Seller of any Business Trademark
on any Website in any jurisdiction in which (A) such Business Trademark also is not Registered Business IP and (B) such
use is solely an incidental consequence of such Website being available on a worldwide basis (and not, for example, as a result
of Seller intentionally targeting such Website or Business Trademark use to Persons in that jurisdiction). No event or circumstance
(including a failure to exercise adequate quality controls and an assignment in gross without the accompanying goodwill) has occurred
or exists that has resulted in, or could reasonably be expected to result in, the abandonment of any Business Trademark.
(iii)
Legal
Requirements and Deadlines
. To the Knowledge of Seller, each item of Registered Business IP is and at all times has been in
material compliance with all Laws, and all filings, payments and other actions required to be made or taken to maintain such item
of Business IP in full force and effect have been made by the applicable deadline, except where such failure would not have a
material and adverse effect on the Business. No application for a copyright or trademark registration or any other type of Registered
IP filed by or on behalf of Seller in connection with the Business has been abandoned, allowed to lapse or rejected in the last
two years, except where such failure would not have a material and adverse effect on the Business.
(iv)
Interference
Proceedings and Similar Claims
. Except as set forth in
Schedule 3.14(h)(iv)
, no third party has challenged the
scope, validity or enforceability of any Business IP in any Proceeding currently pending before the U.S. Patent and Trademark
Office (or any foreign equivalent) or any other court or tribunal. To the Knowledge of Seller, there is no reasonable basis for
a claim that any Business IP is invalid or unenforceable.
(h)
Third-Party
Infringement of Business IP
. Except as set forth in
Schedule 3.14(h)
, to the Knowledge of Seller, no Person is
currently infringing, misappropriating or otherwise violating any Business IP.
Schedule 3.14(h)
accurately identifies
(and Seller has provided to Buyer a complete and accurate copy of) each letter or other written or electronic communication or
correspondence that has been sent or otherwise delivered by Seller or any representative of Seller in the past two years regarding
any actual, alleged or suspected infringement or misappropriation of any Business IP (other than (i) any notice of infringement
sent or otherwise delivered by Seller or any representative of Seller under the Digital Millennium Copyright Act with respect
to which the recipient has expeditiously removed or disabled access to the materials claimed to be infringing in such notice,
(ii) cease and desist or other similar letters that were not material or that were otherwise resolved in the Ordinary Course
of Business, where such resolution would not have a material and adverse effect on the Business), and provides a brief description
of the current status of the matter referred to in such letter, communication, or correspondence.
(i)
Effects of
This Transaction
. Except as set forth in
Schedule 3.14(i)
, neither the execution, delivery or performance of this
Agreement (or any of the Ancillary Agreements) nor the consummation of any of the Transactions will, with or without notice or
lapse of time, result in, or give any other Person the right or option to cause or declare, (i) a loss of, or Encumbrance
on, any Business IP, (ii) a breach of or default under any Business IP Contract, (iii) the release, disclosure, or delivery
of any Business IP by or to any escrow agent or other Person, or (iv) the grant, assignment or transfer to any other Person
of any license or other right or interest under, to or in any of the Business IP.
(j)
No Infringement
of Third Party IP Rights
. Except as set forth in
Schedule 3.14(j)
, in connection with the operation of the Business,
including the making, using, selling, development, licensing and distribution of the Business Products by Seller, Seller has not
infringed (directly, contributorily, by inducement or otherwise), misappropriated or otherwise violated or made unlawful use of
any Intellectual Property Right of any other Person or engaged in unfair competition and, and the operation of the Business, including
the use, sale, manufacture or importation of any Business Product or Business Asset, does not infringe, violate or make unlawful
use of any Intellectual Property Right of any other Person; provided, however, that the foregoing representation and warranty
shall be deemed to be made to the Knowledge of Seller with respect to any such infringement, misappropriation or violation caused
by the use by Seller of any Business Trademark on any Website in any jurisdiction in which (A) such Business Trademark also
is not Registered Business IP
and
(B) such use is solely an incidental consequence of such Website being
available on a worldwide basis (and not, for example, as a result of Seller intentionally targeting such Website or Business Trademark
use to Persons in that jurisdiction). Except as set forth in
Schedule 3.14(j)
, to the Knowledge of Seller, there is
no reasonable basis for a claim that Seller, through the operation of the Business or use of sale of any Business Product, has
(i) engaged in unfair competition, (ii) has infringed or misappropriated any Intellectual Property Right of another
Person. Except as set forth in
Schedule 3.14(j)
, to the Knowledge of Seller, there is no reasonable basis for a claim
that any Business Product infringes, violates or makes unlawful use of any Intellectual Property Right of, or contains any Intellectual
Property Right misappropriated from, any other Person. Without limiting the generality of the foregoing:
(i)
Infringement
Claims
. Except as set forth in
Schedule 3.14(j)(i)
, no infringement, misappropriation or similar claim or Proceeding
is pending or, to the Knowledge of Seller, threatened against Seller (or against any other Person who is or may be entitled to
be indemnified, defended, held harmless, or reimbursed by Seller) with respect to such claim or Proceeding with respect to the
Business, Acquired Assets or Business IP. Other than any notice of infringement received by Seller under the Digital Millennium
Copyright Act with respect to which Seller has expeditiously removed or disabled access to the materials claimed to be infringing
in such notice, or cease-and-desist or other similar letters from third parties that were not material or that were otherwise
resolved in the Ordinary Course of Business, where such resolution would not have a material and adverse effect on the Business,
Seller has not received, within the two-year period preceding the Closing Date (or, in the case of any allegation of Patent infringement,
within the four-year period preceding the Closing Date), any notice (whether in writing, via electronic communication or otherwise)
(a) alleging infringement, misappropriation, or violation by Seller, the Business or the Acquired Assets, any of its employees
or agents, or any Business Product of any Intellectual Property Rights of another Person or (b) asserting that Seller must (or
suggesting that Seller) obtain a license to any Intellectual Property Right of another Person.
(ii)
Other
Infringement Liability
. Except as set forth in the Schedule 3.14(j)(ii), Seller is not bound by any Contract to indemnify,
defend, hold harmless or reimburse any other Person with respect to, or otherwise assumed or agreed to discharge or otherwise
take responsibility for, any existing or potential intellectual property infringement, misappropriation, or similar claim (other
than indemnification provisions in Seller’s standard forms of Business IP Contracts) with respect to the Business.
(iii)
Infringement
Claims Affecting In-Licensed IP
. Except as set forth in the
Schedule 3.14(j)(iii)
, to the Knowledge of Seller,
no claim or Proceeding involving any Intellectual Property Right licensed to Seller in connection with the Business is pending
or has been threatened, except for any such claim or Proceeding that, if adversely determined, would not adversely affect (a)
the use or exploitation of such Intellectual Property Right by Seller in connection with the operation of the Business, or (b)
the design, development, marketing, distribution, provision, licensing or sale of any Business Product.
(k)
Bugs
.
To the Knowledge of Seller, none of the Software used by Seller in connection with the Business at any time since January 1,
2010 (excluding any third-party software that is generally available on standard commercial terms and is licensed to Seller solely
for internal use on a non-exclusive basis) (collectively, “
Business Software
”) either (i) contains any
bug, defect or error that materially and adversely affects the use, functionality or performance of such Business Software or
any product or system containing or used in conjunction with such Business Software, or (ii) fails to comply in any material
respect with any applicable warranty or other contractual commitment relating to the use, functionality or performance of such
Business Software.
(l)
Harmful Code
.
To the Knowledge of Seller, no Business Software contains any “back door,” “drop dead device,” “time
bomb,” “Trojan horse,” “virus” or “worm” (as such terms are commonly understood in the
software industry) or any other code designed or intended to have, or capable of performing, any of the following functions: (a) disrupting,
disabling, harming or otherwise impeding in any manner the operation of, or providing unauthorized access to, a computer system
or network or other device on which such code is stored or installed; or (b) damaging or destroying any data or file without
the user’s consent.
(m)
Open Source.
Schedule 3.14(m)
accurately identifies and describes each item of Open Source Code that is contained in or distributed
with the Business Products, or from which any part of any Business Product is derived. No Business Product contains, is derived
from, is distributed with, or is being or was developed using Open Source Code that is licensed under any terms that (i) impose
or could impose a requirement or condition that any Business Product or part thereof (A) be disclosed or distributed in source
code form, (B) be licensed for the purpose of making modifications or derivative works, or (C) be redistributable at
no charge, or (ii) otherwise impose or could impose any other material limitation, restriction, or condition on the right
or ability of Seller to use or distribute any Business Product.
(n)
Privacy. Schedule 3.14(n)
contains the current Business Privacy Policy and identifies the period of time during which such Business Privacy Policy was
or has been in effect. Seller has complied at all times and in all material respects with all of the Business Privacy Policies
and, to the Knowledge of Seller, with all applicable United States Laws pertaining to privacy (including the obtaining, storing,
using or transmitting of User Data) and User Data. To the Knowledge of Seller, Seller has complied at all times and in all material
respects with the “safe harbor” framework developed by the United States Department of Commerce in consultation with
the European Commission regarding the European Commission’s Directive on Data Protection in connection with User Data (including
the obtaining, storing, using or transmitting of User Data), except where such failure to comply would not have a material and
adverse effect on the Business. To the Knowledge of Seller, Seller has complied with all other applicable foreign Laws pertaining
to privacy (including the obtaining, storing, using or transmitting of User Data) and User Data, except where such failure to
comply would not have a material and adverse effect on the Business. Neither the execution, delivery, or performance of this Agreement
(or any of the Ancillary Agreements) nor the consummation of any of the Transactions, nor Buyer’s possession or use of User
Data, will result in any violation of any Business Privacy Policy or any applicable Laws pertaining to privacy or User Data.
3.15
Customers,
Distributors and Suppliers
.
Schedule 3.15
sets forth a complete and accurate list of the top ten (a) customers
of the Business based on annual sales, showing the approximate total sales in dollars by the Business to each such customer during
the 12-month period ended December 31, 2013, and (b) suppliers to the Business during the 12-month period ended December 31,
2013, showing the approximate total of purchases in dollars by the Business from each such supplier during such fiscal year. Seller
has not received any written communication from any customer named on
Schedule 3.15
of any intention to terminate
or materially reduce purchases from the Business and since December 31, 2013 there has been no material change to the business
relationship of Seller with any customer or supplier named on
Schedule 3.15
.
3.16
Taxes
.
(a) Seller has timely filed all material
Tax Returns that it was required to file with respect to the Business and the Acquired Assets, all such Tax Returns were correct
and complete in all material respects and all material Taxes due and owed by Seller with respect to the Business and the Acquired
Assets (whether or not shown on such Tax Returns) have been timely paid in full. No claim has ever been made in writing to the
Seller by any Tax Authority in a jurisdiction where the Seller does not file Tax Returns that the Seller, the Business, or the
Acquired Assets are subject to taxation by that jurisdiction.
(b) Seller has timely withheld and paid
all Taxes required by Law to have been withheld and paid in connection with amounts paid or owing to any employee, independent
contractor, creditor or other third party, and has properly and timely filed all Tax Returns with respect to such amounts.
(c) Seller has not waived any statute
of limitations with respect to Taxes, or agreed to any extension of time with respect to a Tax assessment or deficiency, with respect
to the Business or the Acquired Assets.
(d) No examination or audit by a Tax
Authority of any Tax Return of Seller concerning or attributable to the Business, the Acquired Assets or Assumed Liabilities has
ever been conducted.
(e) Seller is a “United States
person” within the meaning of section 7701(a)(30) of the Code.
(f) Seller has not received any written
notice of assessment or proposed assessment from a Tax Authority in connection with the Business or any of the Acquired Assets.
To the Knowledge of the Seller, no Tax Authority has threatened any assessment in connection with the Business or any of the Acquired
Assets.
(g) There are no outstanding orders,
rulings or requests for rulings with any Tax Authority with respect to the Business or the Acquired Assets.
(h) Seller is not (i) liable for Taxes
of any other Person by operation of Law, (ii) currently under any contractual obligation to indemnify any Person with respect to
Taxes or (iii) a party to any Tax sharing agreement or any other contract providing for payments by it with respect to Taxes.
(i) None of the Acquired Assets: (i)
are property that Seller is required to treat as being owned by any other Person pursuant to the “safe harbor lease”
provisions of former section 168(f)(8) of the Code; (ii) are required to be depreciated under the alternative depreciation system
under section 168(g)(2) of the Code; or (iii) are “tax-exempt use property” within the meaning of section 168(h) of
the Code.
(j) Seller has not engaged in a transaction
that is a “listed transaction,” as set forth in Treasury Regulation section 1.6011-4(b)(2).
(k) Seller is not a party to or otherwise
bound by any agreement, contract, arrangement or plan that obligates it to compensate any Person for additional Taxes or interest
imposed pursuant to Code sections 280G or 409A.
(l) Seller has (i) collected all sales,
use, value added, goods and services, and similar Taxes required to be collected in connection with the Business and (ii) timely
remitted all such Taxes collected to the appropriate Tax Authority in accordance with applicable Laws.
3.17
Employee
Plans
.
(a)
Schedule 3.17(a)
lists: (i) each plan, fund, program, Contract or arrangement for the provision of executive compensation, deferred or incentive
compensation, profit sharing, stock bonus, bonus, stock option or other equity-based awards, stock purchase, termination, salary
continuation, employee assistance, supplemental retirement, severance, vacation, post-employment/post-retirement health and welfare
(including retiree medical or retiree life) sickness, disability, death, fringe benefit, insurance, medical or other benefits
to any current or former officer, director, Employee, consultant, leased employee, independent contractor or contract employee,
or any dependent, survivor or beneficiary with respect to any of the foregoing, which is currently maintained, administered or
contributed to by Seller or any Affiliate of Seller in connection with the Business or to which Seller or any Affiliate of Seller
has or may have any Liability; (ii) each Employee Pension Benefit Plan (including any Multiemployer Plan) which has been maintained,
administered or contributed to by Seller or any Affiliate of Seller in connection with the Business or to which Seller or any
Affiliate of the Seller has or may have any Liability with respect to such Employee Pension Benefit Plan; and (iii) each
Employee Welfare Benefit Plan which is currently maintained, administered or contributed to by Seller or any Affiliate of Seller
in connection with the Business (collectively, all arrangements described in this
Section 3.17(a)
are hereinafter referred
to as the “
Employee Plans
”).
(b) Neither this Agreement nor the consummation
of any of the Transactions will cause Buyer to assume any Liabilities for any Tax, fine, Lien, penalty or other Liability imposed
by ERISA, the Code or other Laws with respect to any Employee Plan.
(c) No action, investigation, suit, proceeding,
audit, hearing or claim with respect to any Employee Plan (other than routine claims for benefits) is pending or, to the Seller’s
Knowledge, threatened, that could reasonably be expected to result in any Liability to the Buyer.
(d) No facts or circumstances exist that
could directly or indirectly subject the Buyer or any of its Affiliates as the purchaser of the Acquired Assets or as “successor
employer” or any of their assets to any Lien, Tax, penalty or other Liability of any nature with respect to any Employee
Plan described in this Section 3.17(d). No Employee Plan has terms requiring the assumption thereof by the Buyer.
(e) Each Employee Plan intended to be
qualified under Section 401(a) of the Code has received a favorable determination letter from the IRS or is comprised of a master
or prototype plan that has received a favorable opinion letter from the IRS, and since the date of such determination, no event
has occurred and no condition or circumstance has existed that resulted or is likely to result in the revocation of any such determination
letter or opinion letter.
(f) The execution of this Agreement and
the consummation of the Transactions do not constitute a triggering event under any Employee Plan, policy, arrangement, statement,
commitment or Contract, whether or not legally enforceable, which (either alone or upon the occurrence of any additional or subsequent
event) will or may result in any payment (whether of severance pay or otherwise), “parachute payment” (as such term
is defined in Section 280G of the Code), or liability to Buyer under any Employee Plan or Multiemployer Plan, acceleration, vesting
or increase in benefits to any current or former officer, director, employee, consultant, leased employee, independent contractor
or contract employee of Seller or any Affiliate of Seller.
3.18
Employee
Matters
.
(a)
Schedule 3.18(a)
lists for each employee of the Business who is actively employed by the Business or on an approved leave of absence on the
date hereof (the “
Current Employees
”) his job title, hire date, salaried or hourly pay status, exempt status
under the Fair Labor Standards Act, current rates of pay, latest annual bonus, total annual compensation, leave status (including
anticipated return). Seller has not undertaken any activities in the 90 day period immediately preceding the Closing Date which
would give rise to Liability under the WARN Act, and no former employees of the Business have suffered an “employment loss”
(as defined by the WARN Act) in the 90-day period immediately preceding the Closing Date. There are no grievances, arbitrations,
causes of action or other claims pending or, to the Knowledge of Seller, threatened against Seller arising from the hiring, compensation,
employment or discharge of any Current Employees, including any claims pending or, to the Knowledge of Seller, threatened, against
Seller under any workers’ compensation or long-term disability plan or policy. Seller has paid or provided all Current Employees,
former employees and any qualified beneficiaries with all wages, benefits, relocation benefits, stock options, bonuses and incentives,
and all other compensation due and payable, including any such amounts or benefits due and payable under any Employee Plan.
(b)
Schedule 3.18(b)
sets forth a complete and accurate list of all third party temporary employees, consultants, and independent contractors who
are currently providing services to Seller or any Affiliate of Seller as of April 30, 2014 and includes their name, position description
or service performed, and fee structure.
(c) To Seller’s Knowledge, no employee
at the director level or a more senior position whose work relates primarily to the Business has notified Seller of an intention
to terminate his or her employment with Seller, any of its Affiliates, or the Business within the first twelve (12) months following
the Closing Date.
(d) No current employee of Seller has
a principal place of employment outside the United States or is subject to the labor and employment Laws of any country other than
the United States.
(e) Except as set
forth on
Schedule 3.18(e)
, the Seller Subsidiaries have no employees.
3.19
Labor Unions
.
Seller is not a party to any collective bargaining agreement or other agreement with a labor organization with respect to any
current or former employees of the Business. There is no pending, anticipated or threatened strike, slowdown, picketing, boycott,
work stoppage or other such concerted activity with respect to employees of the Business. To the Knowledge of Seller, no employees
of the Business have undertaken any activity to form, join or seek representation by a labor organization or to decertify any
existing bargaining unit representative with respect to their employment with Seller at any time in the past two years.
3.20
Brokers,
Finders
. Neither Seller nor any of its Affiliates has retained any broker or finder in connection with the Transactions, and
neither Seller nor any of its Affiliates is obligated or has agreed to pay any brokerage or finder’s commission, fee or
similar compensation with respect to such Transactions.
3.21
Compliance
With Laws
.
(a) Seller has conducted and is conducting
the Business in material compliance with all Laws and no written notice, action or assertion has been received by Seller or, to
the Knowledge of Seller, has been filed, commenced or threatened against Seller alleging any violation of any Law.
(b) To the Knowledge of Seller, no event
has occurred, and no condition or circumstance exists, that would reasonably be expected (with or without notice or lapse of time)
to constitute or result directly or indirectly in a material violation by Seller of, or a material failure on the part of Seller
to comply with, any applicable Law to which the Business, any of the Acquired Assets or the Assumed Liabilities are subject.
(c) Neither Seller nor any of its Affiliates
have made, offered or agreed to offer anything of value to any employees or any customers of a company, as applicable, or to any
foreign or domestic governmental official, political party or candidate for government office or any of its employees or representatives
in any manner which would result in Seller being in violation of any Applicable Law, including the Foreign Corrupt Practices Act
of 1977, as amended (“FCPA”). Without limiting the foregoing, Seller does not provide and has not provided, cash, gifts,
or other personal benefits to its customers in violation of any Law. Seller is not currently the subject of, nor has it been the
subject of, an investigation, inquiry, audit, or compliance assessment, or been the recipient of a subpoena, letter of investigation
or other document alleging a violation, or possible violation, of the FCPA or other applicable anti-bribery legislation.
3.22
Insurance
.
Schedule 3.22
contains a list of all insurance policies (collectively, the “
Policies
”) and bonds
(specifying the insured, insurer, amount of coverage, expiration date, type of insurance and policy number) covering the Acquired
Assets and the operation of the Business which are maintained by Seller. There is no claim pending under any of such Policies
or bonds as to which coverage has been questioned, denied or disputed by the underwriters of such Policies or bonds. All premiums
due and payable under all such Policies and bonds have been paid and Seller is otherwise in compliance with the terms of such
Policies and bonds, and such Policies and bonds are in full force and effect. Seller is not self-insured for any insurance or
bonding.
3.23
Changes in
Circumstances
. Except as disclosed on
Schedule 3.23
or as required by the terms of this Agreement, since December 31,
2013, (a) there has not been a Material Adverse Effect, and to the Knowledge of Seller, no events, facts or circumstances
exist, individually or in the aggregate, that could reasonably be expected to have a Material Adverse Effect, and (b) Seller
has, in all material respects, conducted the operations of the Business in the ordinary course of business consistent with past
practice and has not taken any of the following actions:
(i) adopted or proposed any amendment
or change in its certificate of incorporation or bylaws or other applicable governing instruments;
(ii) merged or consolidated with any
other Person, or restructured, reorganized or approved of any plan of liquidation;
(iii) except for any repurchase, cancellation
or exchange by Seller of its stock or warrants or as otherwise provided in any existing option plan of Seller that has been made
available to Buyer or as deemed necessary in the sole discretion of Seller for ordinary course working capital needs and not in
connection with the sale of the Seller, issued, sold, pledged, disposed of, granted, transferred, encumbered, or authorized the
issuance, sale, pledge, disposition, grant, delivery or encumbrance of, any shares of capital stock of Seller, or securities convertible
or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind
to acquire any shares of such capital stock or such convertible or exchangeable securities;
(iv) except for dispositions in the ordinary
course of business, sold, transferred or otherwise disposed of any of its properties or Assets used or held for use in connection
with the operation of the Business having a book value in excess of $10,000, individually, or $50,000 in the aggregate;
(v) entered into, accelerated, terminated,
modified or amended any Material Contract;
(vi) changed in any material respect
any of its accounting methods, principles or practices (other than changes required by GAAP), revalued or reclassified in any material
respect any of its assets or liabilities related to the Business, including write-downs of Inventory, except in the ordinary course
of business, changed its pricing policies or credit practices, the rate or timing of its payment of accounts payable or its collection
of accounts receivable, changed its earnings accrual rates on Contracts or failed to pay any creditor any amount owed to such creditor
when due;
(vii) entered into any settlement of
pending or threatened litigation other than any settlement that, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect;
(viii) mortgaged, pledged or otherwise
subjected to any Lien any of the Acquired Assets, whether tangible or intangible, except for Permitted Liens in the ordinary course
of business;
(ix) other than in the ordinary course
of business consistent with past practice or as required by applicable Laws, made any change in the rate of compensation, commission,
bonus or other remuneration to or in respect of any Employee;
(x) other than as required by any applicable
Laws or under the terms of any Employee Plan (including as may be required or desirable to protect any Employee from incurring
adverse tax consequences under Section 409A of the Code), (A) established, entered into or adopted any Employee Plan, (B) caused
or permitted any Employee Plan to be amended (other than as required to comply with any Law) or (C) waived any of its material
rights under, or permitted or provided for the acceleration or vesting or payment under, any provisions of any Employee Plan;
(xi) sold, assigned, licensed or otherwise
transferred or disposed of any Business IP or taken (or omitted to take) any action that adversely affects, or could reasonably
be expected to adversely affect, any rights of Seller to the Business IP; or
(xii) taken any action or omitted to
take any action that could reasonably be expected to result in the occurrence of any of the foregoing.
3.24
Agreements
with Affiliates
. Except as disclosed on
Schedule 3.24
, there are no Contracts between Seller and any of Seller’s
Affiliates which relate to the conduct of the Business or the ownership of the Acquired Assets.
3.25
Information
in Proxy Statement
. The Proxy Statement and any other document filed with the SEC by Seller in connection with the Transactions
(or any amendment thereof or supplement thereto), at the date first mailed to the stockholders of the Company, at the time of
the Seller Stockholders Meeting and at the time filed with the SEC, as the case may be, will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading; provided, however, that no representation is
made by Seller with respect to statements made therein based on information supplied in writing by Buyer specifically for inclusion
in such documents. The Proxy Statement and such other documents filed with the SEC by Seller will comply in all material respects
with the provisions of the Exchange Act.
3.26
Opinion of
Financial Advisor
. The Board of Directors of Seller has received the opinion of Janney Montgomery Scott LLC, dated the date
of this Agreement, to the effect that, as of such date, and subject to the various assumptions and qualifications set forth therein,
the consideration contemplated in connection with the Transactions is fair, from a financial point of view, to Seller’s
stockholders (the “
Fairness Opinion
”). A correct and complete copy of the Fairness Opinion has been delivered
to Buyer. Seller has been authorized by Janney Montgomery Scott LLC to permit the inclusion of the Fairness Opinion and references
thereto in the Proxy Statement.
3.27
Solvency
.
Immediately after giving effect to the Transactions, Seller will be able to pay its debts as they become due and will own property
having a fair saleable value greater than the amounts required to pay its debts (including a reasonable estimate of the amount
of all contingent liabilities). Immediately after giving effect to the Transactions, Seller will have adequate capital to carry
on its business.
3.28
Seller Subsidiaries
.
All representations and warranties made by Seller in this Agreement are true and correct with respect to each Seller Subsidiary,
as if the term “Seller Subsidiary” were substituted with the term “Seller” in each such representation;
provided
,
however
, that the foregoing shall not apply with respect to the representations and warranties contained
in
Sections 3.1-3.5
and
3.25
and
3.26
.
ARTICLE IV
REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to
Seller, as of the date hereof and as of the Closing Date:
4.1
Corporate
Organization and Standing
. Buyer is a limited liability company duly organized, validly existing and in good standing under
the Laws of the State of Delaware and has all requisite limited liability company power and authority to enter into and perform
this Agreement and the Ancillary Agreements to which Buyer is a party contemplated hereby and thereby. Buyer is duly qualified
to do business as a foreign limited liability company in each jurisdiction in which the nature of its business as now being conducted
by it or the property owned or leased by it makes such qualification necessary.
4.2
Authorization
.
This Agreement and the Ancillary Agreements to which Buyer is a party have been duly authorized, executed and delivered by Buyer,
and this Agreement and the Ancillary Agreements to which Buyer is a party are the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, moratorium
or other similar Laws affecting the enforcement of creditors’ rights generally. All necessary consents, approvals and authorizations
have been provided by the manager of Buyer in connection with this Agreement, the Ancillary Agreements to which Buyer is a party
and the Transactions.
4.3
No Conflict
or Violation
. Neither the execution and delivery of this Agreement or the Ancillary Agreements to which Buyer is a party nor
the consummation of the Transactions will (a) violate, conflict with or result in a breach of or constitute a default under
any provision of Buyer’s certificate of formation or operating agreement, (b) violate, conflict with or result in a
breach of or constitute a default under any judgment, order, decree, rule or regulation of any court or Governmental Authority
to which Buyer or its business is subject, or (c) violate, conflict with or result in a breach of any Law.
4.4
Litigation
.
There is no litigation, arbitration or administrative proceeding pending or threatened against Buyer, or investigation pending
or threatened by a Governmental Authority, that seeks to enjoin or otherwise challenges the consummation of the Transactions.
4.5
Brokers, Finders
.
Buyer has not retained any broker or finder in connection with the Transactions, and Buyer is not obligated and has not agreed
to pay any brokerage or finder’s commission, fee or similar compensation with respect to such Transactions.
4.6
Source of
Funds
. Buyer will have on the Closing Date, sufficient immediately available funds to pay, in cash, the Initial Purchase Payment
and all other amounts payable pursuant to this Agreement or otherwise necessary to consummate all the Transactions.
ARTICLE V
CONDITIONS TO
CONSUMMATION OF THE CLOSING
5.1
Conditions
to Buyer’s Obligations
. The obligation of Buyer to effect the Closing and consummate the Transactions is subject to
the satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by Buyer in
its discretion:
(a)
Stockholder
Approval
. Seller Stockholder Approval shall have been obtained.
(b)
Accuracy of
Representations and Warranties
. All of the representations and warranties of Seller contained in
Sections 3.1
(Corporate
Organization and Standing) and
3.2
(Authorization) and the first sentence of
Section 3.10
(Acquired Assets) shall
be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on the
Closing Date (except to the extent in either respect such representations and warranties are expressly made only as of an earlier
date, in which case they shall be true and correct in all material respects as of such earlier date). All of the other representations
and warranties of Seller contained in this Agreement shall be true and correct in all respects as of the date of this Agreement
and as of the Closing Date as though made on the Closing Date (except to the extent in either respect such representations and
warranties are expressly made only as of an earlier date, in which case they shall be true and correct in all respects as of such
earlier date), except where the failure of such representations and warranties to be so true and correct has not had, or would
not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(c)
Compliance
with Covenants
. Seller shall have performed or complied in all material respects with each of the covenants, agreements and
obligations required by this Agreement to be performed or complied with by Seller on or prior to the Closing Date.
(d)
Material Adverse
Effect
. Since the date hereof, there shall have occurred no Material Adverse Effect.
(e)
Certificate
of Seller
. At the Closing, Seller shall have delivered to Buyer a certificate dated the Closing Date and executed by an officer
of Seller, to the effect that the conditions specified in
Sections 5.1(a)
,
(b)
,
(c)
and
(d)
have
been fulfilled.
(f)
No Proceeding
or Litigation
. No litigation, action, suit, investigation, claim or proceeding brought by or on behalf of any Person or Governmental
Authority challenging the legality of, or seeking to restrain, prohibit, materially modify or rescind, the Transactions shall
have been instituted and not settled or otherwise terminated.
(g)
Ancillary
Agreements and Other Closing Deliveries
. Seller shall have delivered all agreements and other deliveries required to be delivered
by Seller in accordance with Section 2.2, including all Ancillary Agreements to which Seller is a party.
(h)
Release of
Liens
. Seller shall have taken such actions as may be necessary to secure the release as of the Closing of any and all Liens
(other than Permitted Liens), including any guarantees relating to or otherwise affecting the Acquired Assets.
(i)
Consents
.
All Closing Consents will have been obtained.
5.2
Conditions
to Seller’s Obligations
. The obligation of Seller to effect the Closing and consummate the Transactions is subject to
the satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by Seller in
its discretion:
(a)
Stockholder
Approval
. Seller Stockholder Approval shall have been obtained.
(b)
Accuracy of
Representations and Warranties
. All of the representations and warranties of Buyer contained in
Article IV
of this
Agreement shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made
on the Closing Date, except to the extent such representations and warranties are expressly made only as of an earlier date, in
which case as of such earlier date.
(c)
Compliance
with Covenants
. Buyer shall have performed or complied in all material respects with each of the covenants, agreements and
obligations required by this Agreement to be performed or complied with by Buyer on or prior to the Closing Date.
(d)
Certificate
of Buyer
. At the Closing, Buyer shall have delivered to Seller a certificate dated the Closing Date and executed by an officer
of Buyer, to the effect that the conditions specified in
Sections 5.2(b)
and
(c)
have been fulfilled.
(e)
No Proceeding
or Litigation
. No litigation, action, suit, investigation, claim or proceeding brought by or on behalf of any Person or Governmental
Authority challenging the legality of, or seeking to restrain, prohibit, materially modify or rescind, the Transactions shall
have been instituted and not settled or otherwise terminated.
(f)
Ancillary
Agreements and Other Closing Deliveries
. Buyer shall have delivered all agreements and other deliveries required to be delivered
by Buyer in accordance with
Section 2.3
, including all Ancillary Agreements to which Buyer is a party, delivery of the
Closing Payment to Seller and delivery of the Escrow Amount to the Escrow Agent.
ARTICLE VI
COVENANTS OF THE PARTIES
6.1
Conduct of
Business
. During the period from the date hereof through the Closing Date, Seller shall (a) conduct the Business and operate
the Acquired Assets in the Ordinary Course of Business and not materially reduce the price of its offerings, including its jobs
packs; (b) maintain the tangible Acquired Assets in good operating condition and repair, ordinary wear and tear excepted, and
maintain and use commercially reasonable efforts consistent with past practices to protect the Business IP; (c) use commercially
reasonable efforts to preserve the goodwill associated with the Business and the beneficial relationships between Seller and its
agents, Employees, distributors, lessors, suppliers and customers and continue normal maintenance, marketing, advertising, distributional
and promotional expenditures in connection with the Business in the ordinary course of business in accordance with commercially
reasonable practices; and (d) except upon the prior written consent of Buyer (which consent may not be unreasonably withheld,
delayed, or conditioned) not engage in any practice, take or fail to take any commercially reasonable action, or enter into any
transaction that would cause any of the representations or warranties set forth in (i)
Section 3.23
to be breached or become
untrue in any respect or (ii)
Article III
to be materially breached or to become materially untrue (except where such representations
or warranties are qualified by “materiality,” “Material Adverse Effect” or similar qualification, in which
case Seller shall not engage in any practice, take or fail to take any commercially reasonable action, or enter into any transaction
that would cause any of the representations and warranties in
Article III
to be breached or to become untrue). Seller shall
not, except for any repurchase, cancellation or exchange by Seller of its stock or warrants or as deemed necessary in the sole
discretion of Seller for working capital needs and not in connection with the sale of the Seller, issue, sell, pledge, dispose
of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, deliver, lease, license, guarantee
or encumbrance of, any shares of capital stock of Seller, or securities convertible or exchangeable into or exercisable for any
shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock
or such convertible or exchangeable securities. Nothing contained in this Agreement will give to Buyer, directly or indirectly,
rights to control or direct the operations of Seller prior to the Closing Date. Prior to the Closing Date, Seller will exercise,
consistent with the terms and conditions of this Agreement, complete control and supervision of the Business.
6.2
Acquisition
Proposals
.
(a) Seller, and its
directors, officers, employees, financial advisors, attorneys, accountants and consultants, shall immediately cease any discussions
or negotiations presently being conducted with respect to any Acquisition Proposal, and direct all such persons in writing to
return or cause the destruction of all copies of confidential information previously provided to such parties by Seller, its Subsidiaries
or representatives. Seller shall not and shall cause its directors, officers, employees, financial advisors, attorneys, accountants
and consultants not to, directly or indirectly (i) initiate, solicit, knowingly take any action to facilitate or knowingly encourage
any inquiries with respect to, or the making of, any Acquisition Proposal, (ii) engage in any negotiations or discussions with,
furnish any information or data to or enter into any letter of intent (except for any confidentiality agreement contemplated by
Section 6.3(b)
, subject to compliance with this
Section 6.2(a))
, agreement in principle, acquisition agreement or
similar agreement with any party relating to any Acquisition Proposal, (iii) grant any waiver or release under any standstill
or similar agreement with respect to acquisitions of any of the Acquired Assets by any party other than Buyer or (iv) propose
publicly or agree to do any of the foregoing related to any Acquisition Proposal. Seller shall be responsible for any breach of
the provisions of this
Section 6.2
by any director, officer, financial advisor, attorney, accountants or consultant of
Seller.
(b) Notwithstanding
anything to the contrary contained in this
Section 6.2
, Seller may engage in discussions or negotiations with, and furnish
information and data to, any party that submits an unsolicited written Acquisition Proposal after the date of this Agreement and
on or prior to the date the Seller Stockholder Approval is obtained, (the “
Applicable Period
”) if (i) the Board
of Directors of Seller determines in good faith that such Acquisition Proposal constitutes, or is reasonably likely to result
in, a Superior Acquisition Proposal (ii) the Board of Directors of Seller determines in good faith that the failure to take such
action would be reasonably likely to result in a breach of the fiduciary duties of the Board of Directors under applicable Law,
(iii) prior to providing any material, non-public information regarding Seller, Seller receives from the party submitting such
Acquisition Proposal an executed confidentiality agreement containing provisions that are no less favorable to Seller than the
provisions contained in the Confidentiality Agreement, and which permits Seller to perform and comply with its obligations under
this Agreement, and (iv) Seller promptly, and in any event by 5:00 p.m. New York time, on the second Business Day after the day
on which Seller became aware of the same, provide Buyer with notice of such determination by the Board of Directors of Seller.
(c) Notwithstanding
anything to the contrary contained in this
Section 6.2
, if at any time during the Applicable Period and after receipt of
a Superior Acquisition Proposal the Board of Directors of Seller, in the exercise of its fiduciary duties, determines in good
faith that to do otherwise would be reasonably likely to result in a breach of its fiduciary duties under applicable Law, the
Board of Directors of Seller may, pursuant to this
Section 6.2
, fail to make, withdraw or modify in a manner adverse to
Buyer its recommendation to Seller’s stockholders for approval of this Agreement (a “
Change in Recommendation
”).
(d) Notwithstanding anything to the contrary
contained in this Section 6.2, the Board of Directors of Seller may terminate this Agreement in accordance with Section 8.1(g),
if (i) Seller has received an unsolicited written Acquisition Proposal during the Applicable Period, (ii) the Applicable Period
has not expired prior to the date of termination, (iii) the Board of Directors of Seller determines in good faith that such Acquisition
Proposal constitutes a Superior Acquisition Proposal (after taking into account any changes in the terms and conditions of this
Agreement proposed by Buyer in accordance with Section 6.2(e)) and (iv) the Board of Directors of Seller determines in good faith
that the failure to take such action would likely result in a breach of the fiduciary duties of the Board of Directors under applicable
Law.
(e) Seller shall
provide Buyer with not less than three (3) Business Days prior written notice of its determination to take any action referred
to in
Section 6.2(c)
or
(d)
. Seller’s notice shall include a description of the reasons for any Change in
Recommendation and a copy of the most recent version of any written agreement relating to the Superior Acquisition Proposal, which
may be redacted to conceal the identity of the party submitting the Superior Acquisition Proposal. If requested by Buyer after
the delivery of such notice, during such three (3) Business Day period Seller shall engage in reasonable, good faith negotiations
with Buyer regarding any modifications to the terms and conditions of this Agreement proposed by Buyer. If Buyer proposes any
such modifications in the form of a binding written offer to modify the terms and conditions of this Agreement prior to the expiration
of the three (3) Business Day period following delivery of Seller’s notice and such modifications were material, Seller
may not take any action referred to in
Section 6.2(c)
or
(d)
unless and until the Board of Directors of Seller determines
in good faith that the Acquisition Proposal resulting in the proposed Change in Recommendation or termination pursuant to
Section
6.2(d)
continues to constitute a Superior Acquisition Proposal, after taking into account any changes in the terms and conditions
of this Agreement proposed in Buyer’s binding written offer in accordance with this
Section 6.2(e)
. If any material
modifications are made to the terms and conditions of any Acquisition Proposal after the date notice thereof is provided by Seller
to Buyer pursuant to this
Section 6.2(e)
, then Seller shall again be required to comply with the provisions of this
Section
6.2(e)
with respect to such modified Acquisition Proposal, except the three (3) Business Day time period contained herein
shall be two (2) Business Days.
(f) Seller shall, by 5:00 p.m. New York
time on the first Business Day after the day on which Seller received any written Acquisition Proposal, provide Buyer with a copy
of such Acquisition Proposal or, in connection with any non-written Acquisition Proposal, a written statement setting forth in
reasonable detail the material terms and conditions of such Acquisition Proposal. Seller shall furnish to Buyer copies of any written
proposals and draft documentation or, if drafted, written summaries of any material oral inquiries or discussions involving the
Acquisition Proposal. If Seller provides any non-public information to any party submitting an Acquisition Proposal that has not
previously been provided to Buyer, Seller shall provide a copy of such information to Buyer by 5:00 p.m. New York time on the first
Business Day after the time it is first provided to such other party.
(g) Nothing in this
Section 6.2
shall prevent the Board of Directors of Seller from taking, and disclosing to Seller’s stockholders,
a position contemplated by Rules 14d-9 and 14e-2 or Item 1012(a) of Regulation MA promulgated under the Exchange Act with respect
to any unsolicited tender offer publicly announced during the Applicable Period; provided that, any such disclosure, other than
(i) a “stop, look and listen” or similar communication of the type contemplated by Rule 14d-9(f) promulgated under
the Exchange Act, (ii) an express rejection of such tender offer or (iii) an express reaffirmation of the Seller’s Board
of Directors’ recommendation to Seller’s stockholders for approval of this Agreement, shall be deemed a Change in
Recommendation.
6.3
Preparation
of Proxy Statement; Stockholders Meeting
.
(a) As soon as practicable after the
date hereof, Seller shall prepare and file with the SEC a Proxy Statement. Seller and Buyer shall cooperate with each other in
the preparation of the Proxy Statement and without limiting the generality of the foregoing, Seller shall consult with Buyer prior
to filing the Proxy Statement (or any amendment or supplement thereto) with the SEC and shall include in the Proxy Statement any
comments reasonably proposed by Buyer relating thereto. The Proxy Statement shall include the Recommendation of the Board of Directors
of Seller that Seller’s stockholders authorize the Transactions contemplated by this Agreement and the Ancillary Agreements
(including, for the avoidance of doubt, the approval of the change of Seller’s corporate name as contemplated herein). The
Proxy Statement shall additionally include a copy of the Fairness Opinion.
(b) Seller shall use its commercially
reasonable efforts to respond promptly to any comments made by the SEC with respect to the Proxy Statement. Seller shall use its
commercially reasonable efforts to cause the Proxy Statement to be mailed to its stockholders as promptly as practicable following
the filing thereof with the SEC and the resolution of any comments thereon by the SEC. Seller shall advise Buyer promptly after
it receives notice of any request by the SEC for amendment of the Proxy Statement or comments thereon and responses thereto or
requests by the SEC for additional information, and Seller shall consult with Buyer prior to responding to any of the foregoing
and shall consider in good faith including any reasonable comments of Buyer relating to any such responses. The Proxy Statement
and any amendments or supplements to the Proxy Statement will, when filed, comply as to form in all material respects with the
applicable requirements of the Exchange Act. The information supplied by Buyer for inclusion in the Proxy Statement or any amendment
or supplement to the Proxy Statement, will not, on the date it is first mailed to Seller’s stockholders, on the date Seller’s
stockholders vote on this Agreement and at the Closing, contain any misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and will
not at the time of the Seller Stockholders Meeting, omit to state any material fact necessary to correct any statement in any earlier
communication with respect to the Seller Stockholders Meeting that shall have become false or misleading in any material respect.
If at any time prior to the Closing Date any information relating to Seller or Buyer, or any of their respective Affiliates, officers
or directors, is discovered by Seller or Buyer that should be set forth in an amendment or supplement to the Proxy Statement, so
that the Proxy Statement would not include any misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were made, not misleading, the party that discovers
such information shall promptly notify the other party and an appropriate amendment or supplement describing such information shall
be promptly filed with the SEC and, to the extent required by Law, disseminated to the stockholders of Seller.
(c) Seller shall,
as soon as practicable after the date hereof, and in accordance with Seller’s certificate of incorporation and bylaws and
Law, establish a record date (which will be as soon as practicable after the date hereof) for, duly call, and give notice of,
a meeting of its stockholders (the “
Seller Stockholders Meeting
”) for the purpose of considering and taking
action upon this Agreement and the Transactions.
(d) As soon as practicable
following the date on which the Proxy Statement is mailed to Seller’s stockholders, Seller shall convene and hold the Seller
Stockholders Meeting. Once the Seller Stockholders Meeting has been called and noticed, except pursuant to the following sentence,
Seller shall not postpone or adjourn the Seller Stockholders Meeting without the consent of Buyer. If a quorum of stockholders
has not been obtained by the scheduled date for the Seller Stockholders Meeting, or supplemental or amended proxy materials are
required to be filed with the SEC or disseminated to Seller’s stockholders prior to the Seller Stockholders Meeting, then
Seller shall postpone or adjourn the Seller Stockholder Meeting until such time as a quorum is obtained or a period complying
with Law is permitted for the filing or dissemination of such supplemental or amended proxy materials. In the event that the Seller
Stockholders Meeting is delayed to a date after the End Date (as defined in
Section 8.1(b))
as a result of any adjournment
or postponement pursuant to this
Section 6.3(d)
, then the End Date shall be extended to the fifth (5th) Business Day after
the date on which the Sellers Stockholder Meeting is convened and a vote by the stockholders of Seller on the proposal set forth
in the Proxy Statement is taken.
(e) Unless the Board
of Directors of Seller has effected a Change in Recommendation in accordance with
Section 6.2(c)
, Seller shall use its
reasonable best efforts to solicit from stockholders of Seller proxies in favor of the approval of this Agreement and the Transactions
and shall take all other action necessary or advisable to secure the Seller Stockholder Approval. Unless the Board of Directors
of Seller has effected a Change in Recommendation in accordance with
Section 6.2(c)
, Seller shall use its reasonable best
efforts, including by attending in person meetings, participating in phone conferences and providing requested information, to
cause any proxy advisory firms advising their clients in connection with the Seller Stockholders Meeting to recommend that client
stockholders vote in favor of the approval of this Agreement and the transactions contemplated hereby.
6.4
Access to
Records and Properties; Supplemental Information
.
(a) Between the date hereof and the Closing
Date, (i) Buyer shall be entitled, and Seller shall permit Buyer, to conduct such investigation of the business, operations, properties,
assets, prospects and condition (financial or otherwise) of Seller to the extent related to the Business as Buyer shall reasonably
request, and (ii) Seller shall during normal business hours and upon reasonable notice (A) provide Buyer and its agents and representatives,
including its independent accountants, internal auditors and attorneys, reasonable access to all the properties, facilities, offices,
assets and personnel of Seller to the extent related to the Business, and to all of the books and records and other documents of
Seller to the extent related to the Business, including books and records related to the Acquired Assets (including work papers
of any independent accountant), (B) furnish Buyer with such other financial and operating data and other information with respect
to the business, operations, properties, assets, prospects or condition (financial or otherwise) of Seller to the extent related
to the Business as Buyer shall reasonably request, and (C) permit Buyer to make such assessments thereof as Buyer may reasonably
require, provided such access, requests and assessments do not unreasonably interfere with the operation of the Business, except
that, in no event will Buyer be entitled to conduct invasive soil or ground water sampling upon the properties without Seller’s
prior written permission.
(b) Seller shall
give prompt notice to Buyer, and Buyer shall give prompt notice to Seller, of (i) any notice or other communication received by
such party from any Governmental Authority in connection with the Transactions or from any Person alleging that the consent of
such Person is or may be required in connection with the Transactions, if the subject matter of such communication or the failure
of such party to obtain such consent could be material to Seller, (ii) any actions, suits, claims, investigations or proceedings
commenced or, to such party’s knowledge, threatened against, relating to or involving or otherwise affecting such party
or any of its Subsidiaries which relate to the Transactions, (iii) the discovery of any fact or circumstance that, or the occurrence
or non-occurrence of any event the occurrence or non-occurrence of which, would cause any representation or warranty made by such
party contained in this Agreement (A) that is qualified as to materiality or Material Adverse Effect to be untrue and (B) that
is not so qualified to be untrue in any material respect, and (iv) any material failure of such party to comply with or satisfy
any covenant or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this
Section 6.4(b)
shall not (x) cure any breach of, or non-compliance with, any other provision of this Agreement
or (y) limit the remedies available to the party receiving such notice.
(c) Notwithstanding
anything in this Agreement to the contrary, from time to time prior to or at the Closing and by notice given in accordance with
this Agreement, Seller may supplement or amend
Section 3.23
the Disclosure Schedules and any appropriately related section
of the Disclosure Schedules to reflect any development in the business of the Seller provided such development occurred in accordance
with Section 6.1. In such event, each written notice provided by Seller to Buyer pursuant to this
Section 6.4(c)
shall
be deemed (i) to have amended such sections of the Disclosure Schedules as of the date of such notice, (ii) to have added a description
of the development and qualified the representations and warranties of Seller in
Section 3.23
and such other appropriately
related section of the Disclosure Schedules as of the date of such notice and (iii) to have cured any breach that otherwise might
have existed hereunder by reason of such development; provided, however, that no such supplements or amendments, individually
or in the aggregate, shall indicate the occurrence of an event or change that constitutes or would be reasonably expected to constitute
a Material Adverse Effect.
6.5
Efforts to
Consummate Closing; Cooperation; Further Assurances
.
(a) Except as otherwise
expressly set forth in this Agreement, and subject to the terms hereof, Seller, Buyer Parent and Buyer each will use their reasonable
best efforts to cause the conditions set forth in
Sections 5.1
and
5.2
, respectively, to be satisfied by the Closing
Date.
(b) Buyer Parent, Buyer and Seller shall
cooperate with each other, and shall cause their respective Affiliates, officers, employees, agents and representatives to cooperate
with each other, to ensure the orderly transition of the Acquired Assets from Seller to Buyer. Prior to the Closing, Seller shall
cooperate with Buyer in making any required or, in Buyer’s reasonable discretion, necessary and proper, communications with
Employees regarding the Transactions and any employee benefit plans or other benefit arrangements.
(c) At any time and from time to time
after the Closing, at the request and expense of any Party, the other Parties (including for this purpose, Buyer Parent) shall
execute and deliver, or cause to be executed and delivered, all such deeds, assignments, and other documents, and take or cause
to be taken all such other actions, as the requested Party reasonably deems necessary or advisable in order to complete, perfect
or evidence any of the Transactions. Any out-of-pocket expenses related to any such request shall be paid by the requesting Party.
In furtherance, and not by way of limitation, of the foregoing, if after the Closing, either Seller or Buyer discovers that any
of the Assets or Liabilities were incorrectly or mistakenly characterized as an Acquired Asset, Retained Asset, Assumed Liability
or Retained Liability, as applicable, then Buyer or Seller, as applicable, will cooperate (and cause its Affiliates to cooperate)
with the other Party and its Affiliates in ascertaining whether any such characterization was incorrect or mistaken and, if so,
will promptly re-transfer or reassign such Assets or Liabilities to Seller or Buyer (or one of their designees), as applicable,
and execute and deliver any amendments or supplements to this Agreement or the Disclosure Schedules, as applicable, to reflect
such Assets or Liabilities as “Acquired Assets,” “Retained Assets,” “Assumed Liabilities” or
“Retained Liabilities” effective as of the Closing.
6.6
Restrictive
Covenants
.
(a)
Confidentiality
.
(i) Between
the date hereof and the Closing Date, the terms of the Confidentiality Agreement, effective February 27, 2014 by and between Buyer
and Seller (the “
Confidentiality Agreement
”), are hereby incorporated herein by reference.
(ii) From
and after the Closing Date, Seller will, and will cause its Affiliates to, keep confidential and not disclose or use in any manner
competitive to the Business any and all confidential or other proprietary information relating to the Business that remains in
or comes into its possession after the Closing. Notwithstanding anything to the contrary contained in this
Section 6.6(a)(ii)
,
the confidentiality obligations of
Section 6.6(a)(ii)
shall not apply to information: (A) which Seller is compelled to
disclose by judicial or administrative process, or, in the opinion of Seller’s outside counsel, by other mandatory requirements
of Law (subject to the following provisions of this section); (B) which can be shown to have been generally available to the public,
other than as a result of a breach of
Section 6.6(a)(ii)
; or (C) which can be shown to have been provided to Seller by
a third Person that is not known to Seller to be under an obligation to keep such information confidential.
(iii) If Seller or any of its Affiliates
is requested or required (by written or oral questions, interrogatories, requests for information or documents in legal, administrative,
arbitration or other formal proceedings, subpoena, civil investigative demand or other similar process) to disclose any such confidential
information, Seller will promptly notify Buyer of any such request or requirement so that Buyer may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this section. If, in the absence of a protective order
or other remedy or the receipt of a waiver by Buyer, Seller or any of its Affiliates is required to disclose such information,
such Person, without Liability hereunder, may disclose that portion of such information which it is legally required to disclose.
(b)
Non-Competition
.
For a period commencing on the Closing Date and terminating 5 years after the Closing Date, Seller will not, and will cause the
Seller Subsidiaries not to, directly or indirectly engage in any Competing Business anywhere in the world. For purposes of this
Agreement, “
Competing Business
” means a business that competes with the Business as conducted by Seller immediately
prior to the Closing Date. Nothing in this
Section 6.6(b)
will restrict or prevent Seller or any Seller Subsidiary from
maintaining or undertaking passive investments in Persons engaged in a Competing Business so long as the aggregate interest represented
by such investments does not exceed five percent (5%) of any class of the outstanding debt or equity securities of any such Person.
(c)
Non-Solicitation
.
For a period commencing on the Closing Date and terminating 5 years after the Closing Date:
(i) Seller and its Affiliates will not,
directly or indirectly, solicit for hire any Person while such Person is, or was within the six-month period prior to his or her
solicitation or hiring, a Transferred Employee or any independent contractor or consultant of the Business whose Contract was included
in the Acquired Assets; provided, however, that the foregoing provision shall not prohibit Seller or any of its Affiliates from,
directly or indirectly, soliciting for hire or hiring any Transferred Employee whose employment is terminated by Buyer; and
(ii) Buyer,
Buyer Parent and their respective Subsidiaries will not, directly or indirectly, solicit for hire any Person while such
Person is, or was within the six-month period prior to his or her solicitation or hiring, an employee of Seller (other than a
Transferred Employee) or any independent contractor or consultant of Seller (other than such contractor or consultant whose
Contract was included in the Acquired Assets);
For the avoidance of doubt, a Person will not be deemed to have been solicited
for employment if such Person responds to a general public advertisement or other general solicitation of employment.
(d)
Non-Disparagement
.
From and after the Closing, Seller will not, and will cause its Subsidiaries, executive officers and directors not to, engage
in any conduct that involves the making or publishing of written or oral statements or remarks (including the repetition or distribution
of derogatory rumors, allegations, negative reports or comments) that are disparaging, deleterious or damaging to the integrity,
reputation or goodwill of the Business, Buyer or its Affiliates or their respective management, officers, employees, independent
contractors or consultants. From and after the Closing, Buyer and Buyer Parent will not, and will cause their respective Subsidiaries,
executive officers and directors not to, engage in any conduct that involves the making or publishing of written or oral statements
or remarks (including the repetition or distribution of derogatory rumors, allegations, negative reports or comments) that are
disparaging, deleterious or damaging to the integrity, reputation or goodwill of the Retained Business, Seller or its Affiliates
or their respective management, officers, employees, independent contractors or consultants. This provision is not applicable
to (i) truthful testimony obtained through legal process, (ii) any truthful information provided pursuant to investigation by
any governmental body, or (iii) any truthful information provided pursuant to any legal action between the parties.
(e)
Acknowledgement
.
Each of Seller, Buyer Parent and Buyer acknowledges that the periods of restriction, the geographical areas of restriction and
the restraints imposed by the provisions of this
Section 6.6
, as applicable, are fair and reasonably required for the protection
of Buyer and Seller, respectively. If the final judgment of a court of competent jurisdiction declares that any term or provision
of this
Section 6.6
is invalid or unenforceable, the Parties agree that the court making the determination of invalidity
or unenforceability will have the power to reduce the scope, duration or area of the term or provision, to delete specific words
or phrases or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable
and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement will
be enforceable against the Parties as so modified. Seller agrees that any violation of the covenants contained in this
Section
6.6
will cause irreparable damage to Buyer; therefore, in addition to any other remedies Buyer may have under this Agreement
or otherwise, Buyer will be entitled to an injunction from any court of competent jurisdiction restraining Seller from committing
or continuing any violation of this
Section 6.6
, without the requirement of posting any bond or other indemnity. Buyer
and Buyer Parent agree that any violation of the covenants contained in this
Section 6.6
will cause irreparable damage
to Seller; therefore, in addition to any other remedies Seller may have under this Agreement or otherwise, Seller will be entitled
to an injunction from any court of competent jurisdiction restraining Buyer and/or Buyer Parent from committing or continuing
any violation of this
Section 6.6
, without the requirement of posting any bond or other indemnity.
6.7
Maintenance
of Insurance
. Seller will maintain all policies of insurance in effect on the date hereof relating to the Business or the
Acquired Assets through and until the Closing.
6.8
Public Announcement
.
On or after the date hereof, Seller shall issue a press release regarding the terms of this Agreement, which press release shall
be approved by Buyer prior to its issuance (such approval not to be unreasonably withheld, delayed or conditioned). Seller, Buyer
Parent and Buyer shall consult with each other before issuing any press release or otherwise making any public statement or making
any other public (or non-confidential) disclosure (whether or not in response to an inquiry) regarding the terms of this Agreement,
and neither Seller on the one hand, nor Buyer Parent or Buyer on the other hand, shall issue any such press release or make any
such statement or disclosure without the prior approval of the other (which approval shall not be unreasonably withheld or delayed),
except as may be required by law or by obligations pursuant to any listing agreement with any national securities exchange or
over-the-counter exchange, in which case the Party proposing to issue any such press release or make such public statement or
disclosure shall use commercially reasonable efforts to consult with the other Party before issuing such press release or making
such public statement or disclosure and to cooperate with the other Party to accommodate any reasonable objections made thereto.
6.9
Employment
.
Effective as of the Closing Date, Buyer will offer to employ each employee of the Business set forth on
Schedule 6.9
(collectively,
“
Employees
”) who remains actively employed exclusively by the Business or on an approved leave of absence on
the Closing Date. The offers of employment for the Employees will provide for the same initial level of base salary as in effect
for such employee on the date of this Agreement, and with employee benefits substantially comparable to the employee benefits
offered to similarly situated employees of the Buyer. Notwithstanding the foregoing, nothing in this Agreement will, after the
Closing Date, impose on Buyer any obligation to retain any employee in its employment. Employees who accept Buyer’s offer
of employment and commence employment with Buyer as of the Closing Date shall be referred to as “
Transferred Employees
.”
To the extent Buyer is, for any reason, unable to enroll a Transferred Employee and, as applicable, their dependents, under Buyer’s
health insurance plan effective as of such Transferred Employee’s employment start date with Buyer, Buyer will provide notice
to such Transferred Employee as promptly as practicable and will pay or reimburse such Transferred Employee for all costs related
to such Transferred Employee obtaining COBRA coverage for themselves and their dependents, as applicable, through the date that
Buyer is able to migrate such Transferred Employee and their dependents, as applicable, to Buyer’s health insurance plan.
6.10
Employee
Benefit Matters
.
(a) As of the Closing
Date, all of the Transferred Employees will cease participation in all Employee Plans and fringe benefit programs maintained by
Seller. Effective as of the Closing Date, Transferred Employees will be eligible to participate in employee benefit plans and
fringe benefit plans provided by Buyer (collectively, “
Buyer Benefit Plans
”).
(b) Nothing contained in this Agreement,
express or implied, (i) is intended to confer or shall confer upon any individual or any legal representative of any individual
(including employees, retirees, or dependents or beneficiaries of employees or retirees) any right as a direct party to, or a third
party beneficiary of, this Agreement or (ii) shall be deemed to confer upon any such individual or legal representative any rights
under or with respect to any plan, program or arrangement described in or contemplated by this Agreement, and each such individual
or legal representative shall be entitled to look only to the express terms of any such plans, program or arrangement for his or
her rights thereunder.
(c) Nothing contained in this Agreement,
express or implied, shall prohibit Buyer from, subject to Law, adding, deleting or changing providers of benefits, changing, increasing
or decreasing co-payments, deductibles or other requirements for coverage or benefits (e.g., utilization review or pre-certification
requirements), and/or making other changes in the administration or in the design, coverage and benefits provided to Transferred
Employees. No provision of this Agreement shall be construed as a limitation on the right of Buyer to suspend, amend, modify or
terminate any Buyer Benefit Plan. Further, (i) no provision of this Agreement shall be construed as an amendment to any employee
benefit plan and (ii) no provision of this Agreement shall be construed as limiting Buyer’s discretion and authority to interpret
its respective employee benefit and compensation plans, agreements arrangements, and programs, in accordance with their terms and
Law.
6.11
Defined Contribution
Plans
. As of the Closing Date, Transferred Employees will cease participation in any Employee Plan that is a defined contribution
plan intended to be qualified under Section 401(a) of the Code and is maintained by or for the benefit of such Transferred Employees.
As of the Closing Date or as soon as practicable thereafter, each Transferred Employee will be permitted to elect a distribution
of his or her account balance in such Employee Plan and will be permitted to roll over (including a direct rollover) his or her
account balances (but not including any outstanding loans) in such Employee Plan (or any portion thereof) to a defined contribution
plan maintained by Buyer for 90 days after the Closing Date.
6.12
COBRA
.
As of the Closing Date, Buyer will assume the Liability for providing and administering all required notices and benefits under
COBRA and all Liabilities under COBRA with respect to Transferred Employees and their spouses and dependents for qualifying events
that occur after the Closing Date. Seller will retain any and all Liabilities under COBRA for qualifying events that occurred
on or prior to the Closing Date and will continue to maintain the applicable Employee Plans until such obligations to provide
COBRA continuation coverage for such qualifying events has ended.
6.13
Tax Matters
.
(a) Seller will prepare
and timely file all Tax Returns in respect of the Acquired Assets for all Tax periods ending on or prior to the Closing Date (each
a “
Pre-Closing Tax Period
”) that are due on or prior to the Closing Date. Buyer will prepare and timely file
all other Tax Returns that are required to be filed in respect of the Acquired Assets and the Business. Notwithstanding the foregoing,
for the avoidance of doubt, each Party will be responsible for preparing and filing its own Tax Returns.
(b) The Parties agree
that any Apportioned Obligation, or any refund, rebate or similar payment received by Seller or Buyer with respect to any Taxes
that are Apportioned Obligations, will be apportioned between Seller and Buyer (x) based upon the number of days in the applicable
Straddle Period falling on or before the Closing Date and the number of days in the applicable Straddle Period falling after the
Closing Date, if it relates to a Tax that is imposed on a periodic basis or (y) based on an interim closing of the books as of
the Closing Date, if it relates to all other Taxes. Seller will be responsible for the amount apportioned to the period ending
on the Closing Date, and Buyer will be responsible for the amount apportioned to the period beginning after the Closing Date.
Seller will pay Apportioned Obligations that are due and payable on or prior to the Closing Date and bill Buyer for any part of
that amount apportioned to Buyer, and Buyer will reimburse Seller for any such Taxes within fifteen (15) days of payment by Seller.
Buyer will pay Apportioned Obligations that are due and payable after the Closing Date and bill Seller for any part of that amount
apportioned to Seller, and Seller will reimburse Buyer for any such Taxes within fifteen (15) days of payment by Buyer. Notwithstanding
any other provision contained in this Agreement (including the limitations set forth in
Sections 7.2
and
7.3
hereof),
any obligation arising out of this
Section 6.13
will not be considered a Loss that is subject to the Threshold Amount,
Cap, or any survival period or other limit of time, and any loss for which Seller is responsible may be satisfied out of the Escrow
Amount or, thereafter, by Seller.
(c) If Buyer receives
a refund with respect to Taxes for which Seller is wholly or partially responsible under
Section 6.13(b)
hereof, Buyer
will pay, within 30 days following the receipt of such refund, the amount of such refund attributable to Seller. If Seller receives
a refund with respect to Taxes for which Buyer is wholly or partially responsible under
Section 6.13(b)
hereof, Seller
will pay, within 30 days following the receipt of such refund, the amount of such refund attributable to Buyer.
(d) Each Party will provide the other
Party with such assistance and non-privileged information relating to the Business and the Acquired Assets as may reasonably be
requested in connection with the preparation of any Tax Return or the conduct of any audit, examination or any other proceeding
by any Tax Authority. Each Party will retain and provide to the other Party all non-privileged records and other information which
may be relevant to any such Tax Return, audit, examination or any other proceeding. Without limiting the generality of the foregoing,
each Party will retain, for a period of six years from and after the Closing Date, copies of all Tax Returns, supporting work schedules
and other records relating to the Business and the Acquired Assets for all Pre-Closing Tax Periods and Straddle Periods, or (if
they will be retained for less than six years) will offer such records to the other Party prior to disposing of them.
(e) Each Party will
be responsible for the handling, disposition and settlement of any inquiry, proceeding or examination against it with respect
to its own federal, state or local income, franchise, net or gross receipts, estimated, alternative minimum, add-on and similar
Taxes. Buyer will exercise control over the handling, disposition and settlement of any inquiry, examination or proceeding by
a Tax Authority with respect to the Acquired Assets. However, if such proceeding could result in a determination with respect
to Taxes due or payable by Seller, Seller may elect to participate in the handling of such proceeding at its sole expense. Buyer
will notify Seller in writing promptly upon learning of any such inquiry, examination or proceeding. Notwithstanding the foregoing,
if such proceeding could give rise to an indemnification obligation on the part of Seller, Seller may elect to undertake and conduct
the handling, disposition and settlement of the inquiry, proceeding or examination in accordance with
Section 7.5(c)
.
(f) Each of Seller and Buyer will be
obligated to pay half of any amounts that are required to be paid in respect of any transfer, sales, use, recording, value-added
or similar Taxes (including any registration and/or stamp Taxes, levies and duties) that may be imposed by reason of the sale,
assignment, transfer and delivery of the Acquired Assets, and Buyer will timely file all Tax Returns required to be filed in connection
with such Taxes. Buyer and Seller will cooperate in timely filing all Tax Returns required to be filed in connection with the payment
of such Taxes, in obtaining all available exemptions from such Taxes, and in timely providing one another resale certificates and
any other documentation necessary to satisfy any such exemptions.
6.14
Assignability
and Consents
.
(a) As promptly as
practicable after the date hereof, (i) Seller will give all required notices to any third parties and will use commercially reasonable
efforts to obtain all consents, approvals and other authorizations set forth or required to be set forth on
Schedule 3.3
,
and (ii) Seller shall use its reasonable best efforts to obtain an extension of the Contract set forth on
Schedule 6.14
on the terms set forth on
Schedule 6.14
.
(b) Notwithstanding any other provisions
in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign any Contract if an attempted assignment
thereof, without the consent of another party thereto or any Governmental Authority, would constitute a breach or violation of
any such Contract. Seller shall, at its expense, use commercially reasonable efforts and Buyer shall, at Seller’s expense,
use commercially reasonable efforts to assist Seller in obtaining all consents, novations and waivers and to resolve all impracticalities
of assignments, novations or transfers necessary to convey any Contract to Buyer at the earliest practicable date after the Closing.
Notwithstanding the foregoing, any fees and expenses incurred by the Parties in connection with obtaining an assignment, novation
or transfer of any Contract will be paid by the Party incurring such expense.
(c) In the case of Contracts included
in the Acquired Assets, if such consents, novations or waivers are not obtained on or prior to the Closing Date, or if an attempted
assignment would be ineffective, until such consent, novation or waiver is obtained, Seller shall use commercially reasonable efforts
to (A) provide to Buyer the benefits of each such Contract; (B) cooperate in any reasonable and lawful arrangement designed to
provide such benefits to Buyer and (C) enforce, at the request and expense of Buyer and for the account of Buyer, any rights
of Seller arising from any such Contract; and Seller will promptly pay to Buyer when received all monies received by Seller under
such Contract. To the extent Buyer is provided the benefit of any such Contract, Buyer will perform or discharge, on behalf of
Seller, Seller’s obligations and liabilities under each such Contract in accordance with the provisions thereof except for
any obligations and liabilities under any such Contract that constitute a Retained Liability. Once a necessary consent, novation
or waiver is obtained, the applicable Contract will be deemed to have been automatically transferred to Buyer on the terms set
forth in this Agreement with respect to the other Contracts transferred and assumed at the Closing, and consistent with the foregoing,
the obligations pursuant to the applicable Contract will be deemed to be Assumed Liabilities, and the rights pursuant to the applicable
Contract will be deemed to be Acquired Assets.
6.15
Litigation
Support
. In the event and for so long as either Party is actively contesting or defending against any third party charge,
complaint, action, suit, proceeding, hearing, investigation, claim or demand in connection with any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act or transaction involving the
Business, the other Party will reasonably cooperate with the contesting or defending Party and its counsel in the contest or defense,
make available its personnel at reasonable times and upon reasonable notice and provide such testimony and access to its books
and records to the extent related to the Business as may be reasonably requested in connection with the contest or defense and
in each case to the extent commercially reasonable for such other Party, at the sole cost and expense of the contesting or defending
Party (unless such contesting or defending Party is entitled to indemnification therefor under
Article VII
in which case,
the costs and expense will be borne by the Parties as set forth in
Article VII
).
6.16
Seller’s
Obligation to Change Name. Prior to the Closing
, Seller will take any and all action necessary to change the name of Seller
and MB Sub, effective no later than as of the Closing, to a name that does not include or relate to and is not based on or likely
to be confused with the name “Mediabistro.” Beginning immediately following the Closing, Seller will, and will cause
its Affiliates to, cease using any trademark, brand name, trade name, corporate name, domain name or other indication of source
or origin, that includes, is based on, relates to or is likely to be confused with or is confusingly similar to the term Mediabistro
or any other similar terms or derivatives thereof.
6.17
Seller Status
.
Following the Closing, Seller intends to continue to operate and develop the Retained Business. Seller further intends to remain
a publicly traded company and to file reports with the SEC pursuant to the provisions of the Exchange Act. At or promptly following
the Closing, Seller may use a portion of the Closing Payment to repay outstanding indebtedness of Seller (the exact amount of
such repayment, which shall be determined by the Seller’s Board of Directors, the “
Initial Debt Payment
”).
Seller will use commercially reasonable efforts to ensure that, after the Initial Debt Payment, (i) at least $2.5 million of the
Closing Payment remains, and is reserved, for working capital purposes, and (ii) Seller will not prepay any other outstanding
indebtedness until at least six (6) months following the Closing; provided, that the foregoing shall not limit the Seller’s
right and ability to repay indebtedness (or interest on such indebtedness) that becomes due and payable during such period.
6.18
Contract
Renewal
. Between the date hereof and the Closing Date, Buyer, Buyer Parent and Seller shall use commercially reasonable efforts
to coordinate the renewal of the Contract set forth on
Schedule 6.18
in accordance with the terms set forth on
Schedule
6.18
.
ARTICLE VII
INDEMNIFICATION
7.1
Survival of
Representations, Warranties and Covenants
. The representations and warranties of Seller (including representations and warranties
made on behalf of the Seller Subsidiaries) contained in this Agreement or in any certificates delivered pursuant to
Article
V
shall survive the Closing until the eighteen (18) month anniversary of the Closing Date, except that (a) the representations
and warranties set forth in
Section 3.14
(Intellectual Property) shall survive the Closing until the three (3) year anniversary
of the Closing Date, (b) the representations and warranties set forth in
Sections 3.16
(Taxes) and
3.21
(Compliance
with Laws) shall survive until thirty (30) days after the expiration of the applicable statute of limitations (including any waivers
or extensions thereof) to which the underlying matter relates, the representations and warranties set forth in the first sentence
of
Section 3.10
(Acquired Assets) and the representations and warranties set forth in
Sections 3.1
(Corporate Organization
and Standing),
3.2
(Authorization),
3.3
(No Conflict or Violation),
3.5
(Absence of Undisclosed Liabilities),
3.20
(Brokers; Finders),
3.24
(Agreements with Affiliates),
3.25
(Information in Proxy Statement),
3.26
(Opinion of Financial Advisor) and 3.28 (Subsidiaries) shall survive forever and (c) the representations and warranties set
forth in
Sections 4.1
(Corporate Organization and Standing),
4.2
(Authorization),
4.3
(No Conflict or
Violation) and
4.5
(Brokers, Finders) shall survive forever. The representations and warranties identified in clause
(b) of the first sentence of this
Section 7.1
are referred to herein as the “
Fundamental Representations
.”
The covenants contained in this Agreement shall survive the Closing and remain in full force and effect until fully performed
in accordance with their terms. Notwithstanding the foregoing, any claim made under and in accordance with this
Article VII
prior to the expiration of the applicable period set forth above shall survive until such claim is finally resolved.
7.2
Indemnification
by Seller
.
(a) Subject to the
provisions of this
Article VII
, from and after the Closing, Seller shall indemnify Buyer, its Affiliates and their respective
officers, directors, attorneys, accountants, representatives and agents (the “
Buyer Indemnified Parties
”) for
all losses, Liabilities, Taxes, damages (including punitive damages solely to the extent such punitive damages are actually recovered
by a Third Party pursuant to a Third Party Claim), costs, interest, awards, judgments, penalties and expenses, including reasonable
attorneys’ and accountants’ fees and expenses (herein individually a “
Loss
” and collectively “
Losses
”)
that any Buyer Indemnified Party suffers, sustains or incurs and that result from, arise out of, relate to, or are caused by,
any of the following:
(i) any
breach or inaccuracy of any representation or warranty of the Sellers contained in this Agreement or in any certificates delivered
pursuant to
Article V
, other than the Fundamental Representations;
(ii) any breach or inaccuracy of any
of the Fundamental Representations;
(iii) any failure by Seller to perform
or comply with any covenant or agreement contained in this Agreement;
(iv) the ownership or operation of the
Retained Assets;
(v) the Retained Liabilities;
(vi) any
Third Party Claim related to the foregoing that alleges facts that, if true, would entitle the Buyer Indemnified Parties to recovery
under this
Article VII
;
(vii) the
matters set forth on
Schedule 7.2(a)
(subject to the limitations set forth therein); and
(viii) any fraud committed by or on behalf
of Seller related to this Agreement or any Ancillary Agreement.
(b) Notwithstanding
anything in this Agreement to the contrary, in the absence of a showing of fraud by or on behalf of Seller related to this Agreement
or any Ancillary Agreement, (i) no Buyer Indemnified Party shall be entitled to indemnification for any Losses under
Section
7.2(a)(i)
or
(iii)
unless and until one or more claims identifying such Losses in excess of $75,000 in the aggregate
(the “
Deductible Amount
”) has or have been delivered to Seller, and such amount is payable in accordance with
this
Article VII
, whereupon only the aggregate amount of such Losses in excess of the Deductible Amount shall thereafter
be recoverable in accordance with the terms hereof and (ii) the aggregate amount of Losses in excess of the Deductible Amount
for which the Buyer Indemnified Parties shall be entitled to indemnification pursuant to
Section 7.2(a)(i)
shall not
exceed $2,000,000 (the “
Cap
”).
(c) The aggregate
amount of Losses in excess of the Deductible Amount for which the Buyer Indemnified Parties shall be entitled to indemnification
pursuant to
Section 7.2(a)(ii)
and
(iii)
shall not exceed $8,000,000.
7.3
Indemnification
by Buyer
. Subject to the provisions of this
Article VII
, from and after the Closing, Buyer shall indemnify Seller and
its officers, directors, Affiliates, attorneys, accountants, representatives and agents (the “
Seller Indemnified Parties
”)
for all Losses that any Seller Indemnified Party may suffer, sustain or incur and that result from, arise out of, relate to, or
are caused by any of the following:
(a) any breach or inaccuracy of any representation
or warranty of Buyer contained in this Agreement;
(b) any failure by Buyer to perform or
comply with any covenant or agreement contained in this Agreement;
(c) any Assumed Liability;
(d) the conduct of the Business after
the Closing; and
(e) any fraud committed by or on behalf
of Buyer related to this Agreement or any Ancillary Agreement.
7.4
Payment Source
.
All amounts owing to the Buyer Indemnified Parties pursuant to this
Article VII
shall be first paid through distributions
from the then remaining balance of the Escrow Fund (if any) in accordance with this Agreement and the Escrow Agreement and second,
following the earlier of the termination or exhaustion of the Escrow Fund, paid by Seller.
7.5
Procedures
for Indemnification
.
(a) No Party shall
be liable for any claim for indemnification under this
Article VII
unless written notice of a claim for indemnification
is delivered by the Party seeking indemnification (the “
Indemnified Party
”) to the Party from whom indemnification
is sought (the “
Indemnifying Party
”) prior to the expiration of any applicable survival period set forth in
Section 7.1
(in which event the claim shall survive until resolved). If any third party notifies the Indemnified Party
with respect to any matter which may give rise to a claim for indemnification (a “
Third Party Claim
”) against
the Indemnifying Party under this
Article VII
, then the Indemnified Party shall notify the Indemnifying Party within 10
Business Days thereof in writing; provided that no delay on the part of the Indemnified Party in notifying the Indemnifying Party
shall relieve the Indemnifying Party from any obligation hereunder except to the extent that the Indemnifying Party is actually
and materially prejudiced thereby. All notices given pursuant to this
Section 7.5(a)
shall describe with reasonable specificity
the nature of the claim, the amount of the claim (to the extent then known) and the basis of the Indemnified Party’s claim
for indemnification.
(b) Following receipt
of notice in accordance with
Section 7.5(a)
(other than a notice of a Third Party Claim against the Indemnified Party,
in which case
Section 7.5(c)
below shall apply), the Indemnifying Party shall have thirty (30) days from the date it receives
such notice (the “
Dispute Period
”) to make such investigation of the claim as the Indemnifying Party deems
necessary or desirable. For purposes of such investigation, the Indemnified Party shall make available to the Indemnifying Party
all the information related to such claim relied upon by or in possession or control of, the Indemnified Party. If the Indemnifying
Party disagrees with the validity or amount of all or a portion of such claim made by the Indemnified Party, the Indemnifying
Party shall deliver to the Indemnified Party written notice thereof (the “
Dispute Notice
”) prior to the expiration
of the Dispute Period. If no Dispute Notice is received by the Indemnified Party within the Dispute Period or the Indemnifying
Party provides notice that it does not have a dispute with respect to such claim, such claim shall be deemed approved and consented
to by the Indemnifying Party (such claim, an “
Approved Indemnification Claim
”). If a Dispute Notice is received
by the Indemnified Party within the Dispute Period and the Indemnified Party and the Indemnifying Party do not agree to the validity
and/or amount of such disputed claim, no payment shall be made until such disputed claim is resolved, whether by adjudication
of such matter, agreement between the Indemnified Party and the Indemnifying Party, or otherwise (and upon any such resolution,
such claim shall be deemed to be an Approved Indemnification Claim). Each Approved Indemnification Claim shall be paid no later
than five (5) Business Days after the date on which the subject claim became an Approved Indemnification Claim, in each case by
wire transfer of immediately available funds to the account designated in writing by the party entitled to such payment.
(c) After the Indemnified
Party has given notice of a Third Party Claim to the Indemnifying Party pursuant to
Section 7.5(a)
, the Indemnifying Party
may, at its election, undertake and conduct the defense of such Third Party Claim; provided that the Indemnifying Party fully
acknowledges in writing its indemnification obligations to the Indemnified Party. In such case, the Indemnified Party may continue
to participate in the defense of such Third Party Claim; provided, however, that following the Indemnifying Party’s assumption
of the defense of such Third Party Claim, all legal or other expenses subsequently incurred by the Indemnified Party shall be
borne by the Indemnified Party unless the Indemnified Party reasonably concludes that the Indemnifying Party and the Indemnified
Party have conflicting interests, in which case the Indemnified Party shall be indemnified for the reasonable fees and expenses
of one counsel to the Indemnified Party (including one local counsel). If the Indemnifying Party assumes the defense of any Third
Party Claim, the Indemnifying Party shall not settle or consent to judgment with respect to such Third Party Claim without the
written consent of the Indemnified Party, which consent shall not be unreasonably withheld, conditioned or delayed. If (i) the
Indemnifying Party has failed to assume the defense of such Third Party Claim within ten (10) days of the Indemnified Party’s
delivery of notice of such Third Party Claim to the Indemnifying Party, (ii) such Third Party Claim involves criminal or quasi-criminal
allegations or (iii) the Third Party Claim includes a claim for injunctive relief, then the Indemnified Party shall have
the right to assume the defense of such Third Party Claim. The Indemnified Party and the Indemnifying Party shall render to each
other such assistance as may reasonably be required of each other in order to ensure proper and adequate defense of any Third
Party Claim subject to this
Section 7.5
. To the extent that the Indemnified Party or the Indemnifying Party does not participate
in the defense of a particular Third Party Claim, the Party so proceeding with such Third Party Claim shall keep the other party
informed of all material developments and events relating to such Third Party Claim. No Indemnified Party shall settle or consent
to judgment with respect to any Third Party Claim without the written consent of the Indemnifying Party, which consent shall not
be unreasonably withheld, conditioned or delayed. In the event that the Indemnifying Party has consented to any settlement or
consented to any judgment and except as otherwise provided in such settlement or judgment, such Indemnifying Party shall not have
any power or authority to object to any claim by any Indemnified Person under this
Article VII
or against the Escrow Fund
for indemnity in the amount of such settlement or judgment.
7.6
Determination
of Loss Amount
. If an indemnifiable matter is identified and noticed prior to the end of any applicable period set forth in
Section 7.1
, all Losses incurred or paid in connection with such matter shall remain subject to indemnification hereunder.
7.7
Tax Treatment
.
Any payment under
Article VI
I of this Agreement shall be treated by the parties for federal, state, local and foreign income
Tax purposes as an adjustment to the Purchase Price unless otherwise required by Law.
7.8
Other Exclusions
.
In the event that any Person alleges that they are entitled to indemnification hereunder, and that Person’s claim is covered
under more than one provision of this Agreement, such Person shall be entitled to elect the provision or provisions under which
it may bring a claim for indemnification. Any entitlement of an Indemnified Party to make a claim under this Agreement shall be
determined without duplication of recovery by reason of the state of facts giving rise to such claim constituting a breach or
inaccuracy of more than one representation, warranty, covenant or agreement.
7.9
Remedies Exclusive
.
Except (a) for remedies that cannot be waived as a matter of Applicable Law, (b) for specific performance, injunctive relief or
other equitable remedies, or (c) in respect of claims based on fraud, willful misconduct or criminal acts committed by or on behalf
of Seller, the indemnification provisions of this
Article VII
shall be the sole and exclusive remedy for any breach of
this Agreement from and after the Closing.
7.10
Additional
Limitations, Mitigation, Subrogation
.
(a) For purposes
of this
Article VII
only, the amount of any Loss shall be reduced by any insurance proceeds or other third party recovery
actually received by the Indemnified Party with respect to such Loss. If an indemnification payment is received by the Indemnified
Party and the Indemnified Party later receives insurance proceeds or other third party recoveries specifically in respect of the
related Loss, the Indemnified Party shall promptly pay the indemnifying party a sum equal to the lesser of (y) the actual amount
of insurance proceeds or other third party recoveries specifically in respect of the related Loss and (z) the actual amount of
the indemnification payment previously paid to the Indemnified Party with respect to such Loss.
(b) Any Indemnified Party shall act in
good faith and in a commercially reasonable manner to mitigate any Losses it suffers, incurs or otherwise becomes subject to as
a result of or in connection with any inaccuracy in or breach of any representation, warranty, covenant or obligation under this
Agreement.
(c) In the event of any indemnification
payment by Seller under this Agreement, Seller shall be subrogated to the extent of such payment to all of the rights of recovery
of the Buyer Indemnified Party, who shall execute all papers required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable Seller to bring suit to enforce such rights.
ARTICLE VIII
TERMINATION
8.1
Termination
.
This Agreement and the Transactions may be terminated at any time prior to the Closing as follows:
(a) by mutual written consent of Seller
and Buyer;
(b) by either Seller
or Buyer if the Closing shall not have occurred on or before November 1, 2014 (the “
End Date
”); provided, however,
that the right to terminate this Agreement under this
Section 8.1(b)
shall not be available to any Party whose failure
to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing
to occur on or prior to such date;
(c) by Buyer if:
(i) Seller shall have breached any of its representations, warranties or obligations hereunder to an extent that would cause the
conditions set forth in
Sections 5.1(b)
or
(c)
not to be satisfied and such breach shall not have been cured within
20 Business Days of receipt by Seller of written notice of such breach (provided that the right to terminate this Agreement
by Buyer shall not be available to Buyer if Buyer is at that time in material breach of this Agreement or if such breach has not
had, or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect); (ii) Seller’s
board of directors shall have withdrawn or modified the Recommendation in any manner adverse to Buyer or shall have resolved to
do so; or (iii) Seller’s board of directors shall (x) have recommended, endorsed, accepted or agreed to a Acquisition Proposal
or shall have resolved to do so, or (y) not have sent to holders of shares of Seller’s outstanding equity stock within 10
Business Days after the commencement of any tender or exchange offer or solicitation made in connection with any Acquisition Proposal,
a statement recommending rejection of such offer or solicitation;
(d) by Seller at
any time prior to the Closing Date, if Buyer shall have breached any of its representations, warranties or obligations hereunder
to an extent that would cause the conditions set forth in
Sections 5.2(b)
or
(c)
not to be satisfied and such breach
shall not have been cured within 20 Business Days of receipt by Buyer of written notice of such breach (provided that the right
to terminate this Agreement by Seller shall not be available to Seller if Seller is at that time in material breach of this Agreement);
(e) by Seller or Buyer, if consummation
of the Transactions would violate any non-appealable final order, decree, ruling or judgment of any court or Governmental Authority
having competent jurisdiction;
(f) by either Seller or Buyer if the
Seller Stockholder Approval shall not have been obtained at the Seller Stockholders Meeting or any postponement or adjournment
thereof;
(g) by Seller, if
at any time prior to receipt of the Seller Stockholder Approval, it concurrently enters into a definitive agreement providing
for a Superior Acquisition Proposal in accordance with
Section 6.2(e)
; provided, however, that prior thereto or concurrently
therewith Seller shall have paid or caused to be paid the Termination Fee to Buyer in accordance with
Section 8.2
of this
Agreement (and such termination of this Agreement by Seller shall not take effect unless and until the Termination Fee shall have
been so paid); or
(h) by Buyer, if since the date hereof
any event has occurred or failed to occur, the result of which constitutes a Material Adverse Effect.
8.2
Effect of
Termination
. If this Agreement is terminated pursuant to
Section 8.1
, this Agreement shall thereafter become void
and have no further force and effect and all further obligations of the Parties under this Agreement shall terminate without further
Liability of the Parties, except that (a) the obligations of the Parties under
Section 6.6(a)
and under the Confidentiality
Agreement shall survive such termination and remain in full force and effect, (b) the provisions of this
Section 8.2
,
Section 8.3
and
Article IX
shall survive such termination and remain in full force and effect, and (c) such
termination shall not constitute a waiver by either Party of any claim it may have for damages caused by reason of, or relieve
either Party from Liability for, any breach of this Agreement prior to its termination under
Section 8.1
. Notwithstanding
the foregoing, nothing set forth in this
Section 8.2
shall be deemed to modify, affect or diminish either Party’s
right to terminate this Agreement pursuant to
Section 8.1
.
8.3
Expenses and
Termination Fee
.
(a) In the event
that Buyer shall terminate this Agreement pursuant to Section 8.1(c)(ii) or (iii), or in the event that Seller shall terminate
this Agreement pursuant to
Section 8.1(g)
, Seller shall pay the Termination Fee to Buyer and reimburse Buyer’s Transaction
Expenses.
(b) In the event
that (A) either (i) Buyer shall terminate this Agreement pursuant to
Section 8.3(c)(i)
, or
(ii)
Buyer or Seller
shall terminate this Agreement pursuant to
Section 8.1(e)
or
(f)
, (B) prior to the time of such termination there
shall have been an Acquisition Proposal with respect to Seller, and (C) within twelve months after such termination of this Agreement,
either (i) a definitive agreement is entered into by Seller with respect to an Acquisition Proposal or (ii) an Acquisition Proposal
is consummated, Seller shall pay the Termination Fee to Buyer and reimburse Buyer’s Transaction Expenses.
(c) In the event
that either Buyer or Seller shall terminate this Agreement pursuant to
Section 8.1(f)
, and no Acquisition Proposal has
been made prior thereto, Seller shall reimburse Buyer’s Transaction Expenses.
(d) In the event
that Seller must pay a Termination Fee to Buyer or reimburse Buyer’s Transaction Expenses, Seller shall pay such amounts:
(i) within ten (10) days after the date of termination, in the event that the Termination Fee and Buyer’s Transaction Expenses
are due pursuant to
Section 8.3(b)
, (ii) at the earlier of the time that a definitive agreement is entered into by Seller
or the time the Acquisition Proposal is consummated, in the event that the Termination Fee and Buyer’s Transaction Expenses
are due pursuant to
Section 8.3(a)
, or (iii) within five (5) days after the date of termination, in the event that the
Buyer’s Transaction Expenses are due pursuant to
Section 8.3(c)
.
(e) In the event
that Seller fails to pay either the Termination Fee or the Buyer’s Transaction Expenses or both when due under this
Section
8.3
and Buyer commences a suit which results in a judgment against Seller for such overdue amount, then (i) Seller shall reimburse
Buyer for all costs and expenses (including disbursements and reasonable fees of counsel) incurred in connection with such suit
and the collection of such overdue amount and (ii) Seller shall pay to Buyer interest on such overdue amount (for the period commencing
as of the date such overdue amount was originally required to be paid and ending on the date such overdue amount is actually paid
to Buyer in full) at the rate of 7% per annum.
ARTICLE IX
MISCELLANEOUS
9.1
Expenses
.
Except as otherwise specifically set forth in this Agreement or on
Schedule 9.1
, Buyer shall pay all costs and expenses
incurred by it on its behalf, and Seller shall pay all costs and expenses incurred by it on its behalf, in connection with this
Agreement and the Transactions, including fees and expenses of their respective financial consultants, accountants and legal counsel.
Seller shall pay the amount of any Covered Buyer Expenses incurred during the period from the date of this Agreement through the
six month anniversary of the Closing Date to the extent they exceed, in the aggregate, the Covered Buyer Expense Deductible; provided
that any Covered Buyer Expenses incurred as of the Closing Date that result in a reduction of the Escrow Amount pursuant to
Section
1.5(b)
shall be deemed paid by virtue of such Escrow Amount reduction. Expenses incurred in connection with preparing, filing,
printing and distributing the Proxy Statement shall be expenses of Seller.
9.2
Notices
.
Any notice, request, instruction or other document to be given hereunder will be sent in writing and delivered personally, sent
by reputable, overnight courier service (charges prepaid), sent by registered or certified mail, postage prepaid, or by facsimile,
according to the instructions set forth below. Such notices will be deemed given: at the time delivered by hand, if personally
delivered; one Business Day after being sent, if sent by reputable, overnight courier service; at the time received, if sent by
registered or certified mail; and at the time when confirmation of successful transmission is received by the sending facsimile
machine, if sent by facsimile.
If to Seller:
Mediabistro Inc.
475 Park Avenue South
New York, NY 10016
Attn: Alan M. Meckler
Fax (203) 831-0233
With a copy (which shall not constitute notice) to:
Wyrick Robbins Yates & Ponton LLP
4101 Lake Boone Trail
Suite 300
Raleigh, North Carolina 27607
Attn: David L. Wilke, Esq.
Fax: ( 919) 781-4865
If to Buyer or Buyer Parent:
PGM-MB Holdings LLC
c/o Prometheus Global Media, LLC
770 Broadway, 15th Floor
New York, NY 10003
Attention: Jeffrey Wilbur
Fax: (212) 493-4266
With a copy (which shall not constitute notice) to:
Prometheus Legal Department
330 Madison Ave
New York, NY 10017
Fax: (212) 644-8107
and
Jenner & Block LLP
919 Third Avenue
New York, NY 10022
Attention: Tobias L. Knapp
Fax: (212) 891-1699
or to such other address or to the attention of such other party
that the recipient Party has specified by prior written notice to the sending Party in accordance with the proceeding.
9.3
Counterparts
.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
9.4
Entire Agreement
.
This Agreement, the Disclosure Schedules, the Exhibits hereto and the Ancillary Agreements constitute the entire agreement of
the Parties with respect to the subject matter hereof and thereof and supersede all prior negotiations, agreements and understandings,
whether written or oral, of the Parties.
9.5
Interpretation
.
Words used in this Agreement in the singular number shall include the plural, and vice versa, unless the context requires otherwise.
Words of gender used in this Agreement may be read as masculine, feminine or neuter as the context may require. Unless the context
clearly requires otherwise, the terms “this Agreement,” “hereto,” “herein,” “hereby,”
“hereunder,” “hereof,” “hereafter” and similar expressions refer to this Agreement (including
the Disclosure Schedules and Exhibits hereto) in its entirety and not to any particular provision or portion of this Agreement.
When a reference is made to Sections, Schedules or Exhibits, such reference shall be to a Section of, or a Disclosure Schedules
to or an Exhibit to, this Agreement, unless otherwise indicated. Whenever the words “include,” “includes”
or “including” are used herein, they shall be deemed to be followed by the words “without limitation.”
If any period of days referred to in this Agreement shall end on a day that is not a Business Day, then the expiration of such
period shall be automatically extended until the end of the first succeeding Business Day.
9.6
Headings
.
The headings contained in this Agreement and in the Disclosure Schedules and Exhibits hereto are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
9.7
Assignment;
Amendment
. This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns
of the Parties. Neither this Agreement nor any of the rights, interests or obligations provided by this Agreement may be assigned
by either Party or Buyer Parent (whether by operation of Law or otherwise) without the prior written consent of (a) Buyer, in
the case of a proposed assignment by Seller, and (b) Seller, in the case of a proposed assignment by Buyer or Buyer Parent;
provided,
however
, that Buyer shall be permitted, upon notice to Seller but without the consent of Seller, to assign any or all of its
rights and interests (but not its obligations) hereunder and under any Ancillary Agreement to one or more of Buyer’s Affiliates.
This Agreement may be amended only by a written instrument, duly executed and delivered by each of Seller and Buyer.
9.8
Governing
Law
.
(a) This Agreement, the Ancillary Agreements
and all other agreements, documents and instruments delivered pursuant hereto and incorporated herein, unless otherwise expressly
provided therein, shall be governed by, and construed in accordance with, the substantive Laws of the State of Delaware applicable
to agreements made and to be performed entirely within such State, without reference to the conflicts of laws rules of such State.
(b) Each of the Parties (including for
this purpose, Buyer Parent) irrevocably consents to the exclusive jurisdiction and venue of any state court located within New
Castle County, State of Delaware in connection with any matter based upon or arising out of this Agreement or the Transactions,
agrees that process may be served upon them in any manner authorized by the laws of the State of Delaware for such persons and
waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction, venue and process.
Each Party (including for this purpose, Buyer Parent) hereby agrees not to commence any legal proceedings relating to or arising
out of this Agreement or the Transactions in any jurisdiction or courts other than as provided herein.
9.9
No Third-Party
Rights
. This Agreement is not intended, and shall not be construed, to create any rights in any parties other than Buyer and
Seller, their respective successors and permitted assigns and the Indemnified Persons, and no other Person shall assert any rights
as third-party beneficiary hereunder.
9.10
Non-Waiver
.
At any time prior to the Closing, either Party may extend the time for performance of or waive compliance with any of the covenants
or agreements of the other Party, and may waive any breach of the representations or warranties of such other Party. No agreement
extending or waiving any provision of this Agreement will be valid or binding unless it is in writing and is executed and delivered
by or on behalf of the Party against which it is sought to be enforced. The failure in any one or more instances of a Party hereto
to insist upon performance of any of the terms, covenants or conditions of this Agreement, to exercise any right or privilege
in this Agreement conferred, or the waiver by said Party of any breach of any of the terms, covenants or conditions of this Agreement
shall not be construed as a subsequent waiver of any such terms, covenants, conditions, rights or privileges, but the same shall
continue and remain in full force and effect as if no such forbearance or waiver had occurred.
9.11
Severability
.
If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of
Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the Transactions is not affected in any manner adverse to any Party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith
to modify this Agreement so as to affect the original intent of the Parties as closely as possible in an acceptable manner to
the end that the Transactions are fulfilled to the extent possible.
9.12
Incorporation
of Exhibits and Schedules
. The Exhibits and Disclosure Schedules are incorporated into this Agreement and shall be deemed
a part hereof as if set forth herein in full. In the event of any conflict between the provisions of this Agreement and any such
Exhibit or Disclosure Schedules, the provisions of this Agreement shall control.
9.13
Remedies
.
Except as otherwise provided herein, any and all remedies herein expressly conferred upon a Party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, and the exercise by a Party of any
one remedy will not preclude the exercise of any other remedy.
9.14
Specific
Performance
. Each of the Parties (including for this purpose, Buyer Parent) acknowledges and agrees that any other Party would
be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each Party (including for this purpose, Buyer Parent) agrees that any other Party,
without any requirement to post a bond or other security, shall be entitled to an injunction or injunctions to prevent breaches
of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having jurisdiction over the Parties (including for this purpose,
Buyer Parent) and the matter (subject to the provisions set forth in
Section 9.8
), in addition to any other remedy to which
they may be entitled, at law or in equity.
9.15
WAIVER OF
JURY TRIAL
. EACH OF BUYER, BUYER PARENT AND SELLER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THE ACTIONS OF BUYER, BUYER PARENT OR SELLER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
OF THIS AGREEMENT.
ARTICLE X
BUYER PARENT GUARANTEE
10.1
Buyer Parent
Guarantee.
Buyer Parent, intending to be legally bound, hereby irrevocably guarantees (a) prior to and at the Closing, the
full and punctual payment and performance of all obligations of Buyer (or any transferee of Buyer pursuant to
Section 9.7
)
set forth herein , including without limitation the payment by Buyer of the Initial Purchase Payment, (b) from and after the Closing,
Buyer’s payment, performance or other discharge of the Assumed Liabilities and (c) from and after the Closing, Buyer’s
payment of the amounts payable to Seller pursuant to
Appendix B
of the Transition Services Agreement (collectively, the
“
Guaranteed Obligations
”). Buyer Parent acknowledges and agrees that the obligations of Buyer Parent under
his
Section 10.1
shall be unconditional and absolute and no release or extinguishments of Buyer’s (or any Transferee’s)
obligations or Liabilities (other than in accordance with the terms of this Agreement), whether by decree in any bankruptcy proceeding
or otherwise, shall affect the continuing validity and enforceability of this guarantee; provided, however, that Buyer Parent
shall be entitled to assert as a defense to any claim for payment or performance of any Guaranteed Obligations any and all of
the rights, defenses, counterclaims, exculpations, set-offs, indemnities and limitations on liability to which Buyer (or any transferee
of Buyer pursuant to
Section 9.7
) may be entitled to assert under this Agreement or the Transition Services Agreement,
including that (i) such Guaranteed Obligations are not currently due under the terms of this Agreement, or (ii) that such Guaranteed
Obligations have previously been paid or performed in full. The foregoing guarantee shall remain in full force and effect until
the earlier of (x) the termination of this Agreement in accordance with
Article VIII
and (y) the date on which each Guaranteed
Obligation has been completely performed and/or paid in full, as applicable. In any Proceeding to enforce rights under this
Section
10.1
, the prevailing party will be entitled to recover its reasonable attorneys fees.
10.2
Buyer Parent
Representations and Warranties
. Buyer Parent hereby represents and warrants to Seller, as of the date hereof and as of the
Closing Date:
(a) Buyer Parent is a limited liability
company duly organized, validly existing and in good standing under the Laws of the State of Delaware and has all requisite limited
liability company power and authority to enter into and perform its obligations under this Agreement. Buyer Parent is duly qualified
to do business as a foreign limited liability company in each jurisdiction in which the nature of its business as now being conducted
by it or the property owned or leased by it makes such qualification necessary.
(b) This Agreement has been duly authorized,
executed and delivered by Buyer Parent, and this Agreement is the legal, valid and binding obligation of Buyer Parent, enforceable
against Buyer Parent in accordance with its terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar
Laws affecting the enforcement of creditors’ rights generally. All necessary consents, approvals and authorizations have
been provided by the manager of Buyer Parent in connection with this Agreement and the Transactions.
(c) Neither the execution and delivery
of this Agreement nor the consummation of the Transactions will (a) violate, conflict with or result in a breach of or constitute
a default under any provision of Buyer Parent’s certificate of formation or operating agreement, (b) violate, conflict
with or result in a breach of or constitute a default under any judgment, order, decree, rule or regulation of any court or Governmental
Authority to which Buyer Parent or its business is subject, or (c) violate, conflict with or result in a breach of any Law.
(d) Buyer Parent has, as of the date
of this Agreement, and will have on the Closing Date, sufficient immediately available funds to guarantee, in cash, the payment
by Buyer of the Initial Purchase Payment.
(e)
Buyer Parent
has delivered to Seller
the unaudited balance sheet of Buyer Parent as of April 30, 2014. Such balance sheet was prepared
in accordance with GAAP applied on a basis consistent throughout the period indicated (except as otherwise stated in such balance
sheet) and fairly presents in all material respects the assets and liabilities of Buyer Parent as of April 30, 2014.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have
duly executed and delivered this Agreement as of the date first written above.
SELLER:
Medibistro Inc.
By:
/s/ Alan Meckler
Name: Alan Meckler
Title: Chief Executive Officer
BUYER:
PGM-MB Holdings LLC
By:
/s/ Jeffrey
Wilbur
Name: Jeffrey Wilbur
Title: Chief Financial Officer
BUYER PARENT (solely with respect
to
Sections 6.5
,
6.6
,
6.8
and
6.18
the applicable pr*ovisions of
Article IX
, and
Article
X
):
Prometheus Global Media, LLC
By:
/s/ Jeffrey
Wilbur
Name: Jeffrey Wilbur
Title: Chief Financial Officer
EXHIBIT A
As used in the Agreement,
the following terms shall have the following meanings:
“
Acquired Assets
”
has the meaning set forth in
Section 1.1
.
“
Acquisition
Proposal
” means any bona fide written proposal, made by a party to acquire beneficial ownership (as defined under Rule
13(d) promulgated under the Exchange Act) of all or a material portion of the assets of, or any material equity interest in, Seller
pursuant to a merger, consolidation or other business combination, sale of shares of capital stock, sale of assets, licensing transaction,
tender or exchange offer or similar transaction involving Seller, including any single or multi-step transaction or series of related
transactions that is structured to permit such party to acquire beneficial ownership of any material portion of the assets of,
or any material equity interest in, Seller. For purposes of the definition of Acquisition Proposal, a material portion of the assets
of, or material equity interest in, Seller means greater than 20% of the assets of, or equity interest in, Seller.
“
Affiliate
”
means, with respect to any Person, any other Person which directly, or indirectly through one or more intermediaries, Controls,
is Controlled by, or is under common Control with, the first Person. “
Control
” means the right to exercise,
directly or indirectly, 25% or more of the voting rights attributable to the stock of, or other ownership interest in, any entity,
or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such
entity. For the avoidance of doubt, Alan Meckler is deemed an “Affiliate” of Seller for purposes of this Agreement.
“
Agreement
”
has the meaning set forth in the preamble.
“
Allocation
Statement
” has the meaning set forth in
Section 1.6(a)
.
“
Ancillary Agreement(s)
”
means (a) the Bill of Sale and Assignment and Assumption Agreement, (b) the IP Assignments (c) the Escrow Agreement, (d) the Transition
Services Agreement, (e) the Noncompete Agreement and (f) any and all other documents and agreements delivered in connection with
the Transactions.
“
Apportioned
Obligations
” means (a) any Tax (including any additional Tax determined subsequent to the Closing Date other than additional
Tax resulting from a breach by Buyer of Section 6.13(e)) relating to any Acquired Asset, and (b) all rents, royalties, utilities
and other periodic charges with respect to the Acquired Assets, that are due or become due without acceleration for any Straddle
Period or Pre-Closing Tax Period.
“
Approved Indemnification
Claim
” has the meaning set forth in
Section 7.5(b)
.
“
Acquired Assets
”
has the meaning set forth in
Section 1.1
.
“
Applicable
Period
” has the meaning set forth in
Section 6.2(b)
.
“
Assets
”
of any Person means all of such Person’s right, title and interest in and to all assets and properties of every kind, nature,
character and description (whether real, personal or mixed, whether tangible or intangible and wherever situated), including Contracts
and Intellectual Property Rights.
“
Assumed Liabilities
”
has the meaning set forth in
Section 1.3
.
“
Bill of Sale
and Assignment and Assumption Agreement
” has the meaning set forth in
Section 2.2(a)
.
“
Business
”
has the meaning set forth in the Recitals.
“
Business Day
”
means any day, other than a Saturday, Sunday or a day on which banks located in New York, New York shall not be authorized or required
by Law to transact business.
“
Business IP
”
means all Intellectual Property Rights owned (whether exclusively, jointly with another Person, or otherwise) by Seller (or any
of Seller’s Subsidiaries), which are used, held or intended for use in or related to the operation of the Business as currently
conducted or currently contemplated to be conducted, including all Intellectual Property Rights in or pertaining to the Business
Products.
“
Business IP
Contract
” means any Contract to which any Seller Party is a party or by which any Seller Party is bound, or to which
any Business IP is subject, which contains any assignment or license of, or covenant not to assert or enforce, any Intellectual
Property Right or that relates to any Business IP.
“
Business Privacy
Policy
” means each privacy policy of a Seller Party relating to the Business in effect at any time within the two-year
period preceding the Closing Date, including any policy relating to (i) the privacy of users of the Business Products or other
users of the Business or of any of the Websites or (ii) the collection, storage, disclosure and transfer of any User Data
or Personal Data.
“
Business Product
”
means any product or service that is (i) marketed, distributed, licensed or sold by or on behalf of a Seller Party in connection
with the Business as presently conducted or (ii) currently under development by or on behalf of a Seller Party and intended
by Seller to be marketed, distributed, licensed or sold by or on behalf of a Seller Party in connection with the Business as presently
conducted.
“
Business Trademarks
”
has the meaning set forth in
Section 3.14(g)(ii)
of this Agreement.
“
Buyer
”
has the meaning set forth in the preamble.
“
Buyer Parent
”
has the meaning set forth in the preamble.
“
Buyer Benefit
Plans
” has the meaning set forth in
Section 6.10(a)
.
“
Buyer Indemnified
Parties
” has the meaning set forth in
Section 7.2(a)
.
“
Buyer’s
Transaction Expenses
” means all of the fees and expenses incurred by Buyer or its Affiliates in connection with the negotiation,
documentation and consummation of the Transactions, including all fees, expenses, disbursements and other similar amounts paid
to attorneys, financial advisors or accountants, provided that in no event shall the Buyer’s Transaction Expenses exceed
$320,000 in the aggregate for purposes of Seller’s reimbursement obligations set forth in
Section 8.3
.
“
Cap
”
has the meaning set forth in
Section 7.2(b)
.
“
Change in Recommendation
”
has the meaning set forth in
Section 6.2(c)
.
“
Closing
”
has the meaning set forth in
Section 2.1
.
“
Closing Consents
”
means those consents, approvals, authorizations, orders, filings, registrations and qualifications set forth on
Schedule 3.3
which are designated by an asterisk.
“
Closing Date
”
has the meaning set forth in
Section 2.1
.
“
Closing Payment
”
has the meaning set forth in
Section 1.5(a)
.
“
Copyrights
”
means all works of authorship, and all copyrights therein.
“
Covered Buyer
Expenses
” means any out of pocket losses, Liabilities, damages, costs, interest, awards, judgments, penalties and expenses,
including reasonable and documented attorneys’ and accountants’ fees and expenses incurred by any Buyer Indemnified
Parties as a result of a Covered Expense Event.
“
Covered Buyer
Expense Deductible
” means the first One Hundred Thousand Dollars ($100,000) of Covered Buyer Expenses.
“
Covered Expense
Event
” has the meaning provided in
Schedule 9.1
.
“
Databases
” means
all proprietary databases and other data sets and compilations, whether written, electronic or in another form, and all documentation
relating to the foregoing, including manuals, memoranda and records.
“
COBRA
”
means the continuation coverage requirements of
Section 601
et
seq
. of ERISA and Section 4980B of
the Code.
“
Code
”
means the Internal Revenue Code of 1986, as amended, together with all rules and regulations promulgated thereunder.
“
Competing Business
”
has the meaning set forth in
Section 6.6(b)
.
“
Confidentiality
Agreement
” has the meaning set forth in
Section 6.6(a)(i)
.
“
Contracts
”
has the meaning set forth in
Section 1.1(c)
.
“
Deductible
Amount
” has the meaning set forth in
Section 7.2(b)
.
“
Disclosure
Schedules
” means the disclosure schedules accompanying this Agreement.
“
Dispute Notice
”
has the meaning set forth in
Section 7.5(b)
.
“
Dispute Period
”
has the meaning set forth in
Section 7.5(b)
.
“
Employee
”
has the meaning set forth in
Section 6.9(b)
.
“
Employee Pension
Benefit Plan
” has the meaning set forth in Section 3(2) of ERISA.
“
Employee Plans
”
has the meaning set forth in
Section 3.17(a)
.
“
Employee Welfare
Benefit Plan
” has the meaning set forth in Section 3(1) of ERISA.
“
Encumbrance
”
means any security interest, pledge, hypothecation, mortgage, lien, lease, license, option, exception, reservation, limitation,
impairment, imperfection of title, condition or restriction of any nature or similar encumbrance.
“
End Date
”
has the meaning set forth in
Section 8.1(b)
.
“
Environmental
Law
” means any Law
regulating, relating to, or imposing Liability or standards of conduct
concerning, pollution, the preservation of the environment or natural resources, or the promotion of worker health and safety,
including any Law relating to Hazardous Materials. Without limiting the generality of the foregoing, the term encompasses each
of the following statutes and the regulations promulgated thereunder, and any similar Law, each as amended: (a) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, (b) the Solid Waste Disposal Act, (c) the Hazardous Materials Transportation
Act, (d) the Toxic Substances Control Act, (e) the Clean Water Act, (f) the Clean Air Act, (g) the Safe Drinking Water Act, (h)
the National Environmental Policy Act of 1969, (i) the Superfund Amendments and Reauthorization Act of 1986, (j) the Emergency
Planning and Community Right to Know Act, (k) the Federal Insecticide, Fungicide and Rodenticide Act, (l) the Oil Pollution Act,
(m) the Uranium Mill Tailings Radiation Control Act, (n) the Atomic Energy Act, and (o) the Occupational Safety and Health Act
of 1970, and all state and local counterpart or related Law.
“
Equipment
”
has the meaning set forth in
Section 3.9
.
“
ERISA
”
means the Employee Retirement Income Security Act of 1974, as amended.
“
Escrow Agent
”
has the meaning set forth in
Section 1.5(b)
.
“
Escrow Agreement
”
has the meaning set forth in
Section 1.5(b)
.
“
Escrow Amount
”
has the meaning set forth in
Section 1.5(b)
.
“
Escrow Fund
”
has the meaning set forth in
Section 1.5(b)
.
“
Exchange Act
”
means the Securities Exchange Act of 1934, as amended.
“
Fairness Opinion
”
has the meaning set forth in
Section 3.26
.
“
FCPA
”
has the meaning set forth in
Section 3.22(c)
.
“
Financial Statements
”
has the meaning set forth in
Section 3.4(b)
.
“
Fundamental
Representations
” has the meaning set forth in
Section 7.1
.
“
GAAP
”
means United States generally accepted accounting principles in effect from time to time as consistently applied.
“
Governmental
Authority
”
means any government or governmental or regulatory entity, body thereof, or political
subdivision thereof, whether federal, state, local or foreign, or any agency, or authority thereof or any other entity exercising
executive, legislative, judicial, regulatory or administrative functions or pertaining to government, including any department,
board, commission, court or tribunal.
“
Guaranteed
Obligations
” has the meaning set forth in
Section 10.1
.
“
Hazardous Materials
”
means
any element, compound, chemical mixture, contaminant, pollutant, material, waste or other substance
(a) that is defined, determined or identified as hazardous or toxic (or by any similar term) under any Environmental Law or (b)
the presence of which may give rise to Liability under any Environmental Law; without limiting the generality of the foregoing,
Hazardous Materials include (i) “hazardous substances” as defined in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, and regulations promulgated thereunder, each as amended, (ii) “extremely hazardous substance”
as defined in the Emergency Planning and Community Right to Know Act and regulations promulgated thereunder, each as amended, (iii)
“hazardous waste” as defined in the Solid Waste Disposal Act and regulations promulgated thereunder, each as amended,
(iv) “hazardous materials” as defined in the Hazardous Materials Transportation Act and the regulations promulgated
thereunder, each as amended, (v) “chemical substance or mixture” as defined in the Toxic Substances Control Act and
regulations promulgated thereunder, each as amended, (vi) petroleum and petroleum products and byproducts, (vii) asbestos, (viii)
radioactive materials, (ix) mold, and (x) lead.
“
Indebtedness
”
means the aggregate amount of all borrowings and indebtedness in the nature of borrowings (including financing, acceptance credits,
discounting or similar facilities, finance or capital leases (but not operating leases), bonds, debentures, notes, sale and lease
back arrangements, obligations incurred in connection with the acquisition of, or as the deferred purchase price for, property,
assets or businesses, overdrafts, net obligations under any accounts receivable financing or securitization transactions, or net
obligations arising from hedging arrangements in respect of interest rates, currencies or raw materials or other commodities, whether
or not accounted for on the balance sheet), together with accrued interest on such amounts and all fees, expenses and premiums
payable in connection with the repayment or settlement of the foregoing, in each case calculated in accordance with GAAP but excluding
(i) office equipment leases, and (ii) open or blanket purchase orders. For the avoidance of doubt, “Indebtedness”
shall include all amounts Seller owes to Alan Meckler.
“
Indemnified
Party
” has the meaning set forth in
Section 7.5(a)
.
“
Indemnifying
Party
” has the meaning set forth in
Section 7.5(a)
.
“
Initial Purchase
Price
” has the meaning set forth in
Section 1.5(a)
.
“
Intellectual
Property Rights
” means any and all intellectual property rights and other similar proprietary rights in any jurisdiction,
whether registered or unregistered, whether owned or held for use under license, including all rights and interests pertaining
to or deriving from: (a) Patents, inventions, invention disclosures, discoveries and improvements, whether or not patentable; (b)
Software; (c) Copyrights; (d) Trade Secrets; (e) Trademarks; (f) Databases; (g) Internet Properties; (h) publicity rights; and
(i) moral rights; including in each case of (a) through (i) any registrations of, applications to register, and renewals and extensions,
continuations, continuations-in-part, counterparts, divisions, or reissues of, and applications for, any of the foregoing with
or by any governmental authority in any jurisdiction.
“
Internet Properties
”
means all rights to uniform resource locators and domain names.
“
Inventory
”
means all inventory and spare parts, whether located at the Leased Real Property or in transit, supplies, storehouse stocks, raw
materials, work in process, scrap, containers and spare parts, in each case used, held or intended for use in or related to the
conduct of the Business.
“
IP Assignments
”
has the meaning set forth in
Section 2.2(b)
.
“
Knowledge
”
with respect to Seller means any fact, matter or circumstance of which Alan Meckler, Thomas Kitt or Mark Scarinzi had actual knowledge
after due inquiry.
“
Law
”
has the meaning set forth in
Section 3.3
.
“
Leased Real
Property
” means all real property the subject of the Leases.
“
Leases
”
has the meaning set forth in
Section 3.6(a)
.
“
Liability
”
means any debt, liability, guarantee, assurance, commitment or obligation, whether known or unknown, fixed, absolute or contingent,
matured or unmatured, accrued or unaccrued, liquidated or unliquidated, asserted or unasserted, due or to become due, whenever
or however arising (including whether arising out of any Contract or tort based on negligence or strict liability) and whether
or not the same would be required by GAAP to be stated in financial statements or disclosed in the notes thereto.
“
Licenses and
Permits
” has the meaning set forth in
Section 3.12
.
“
Lien
”
means any security interest, lien, encumbrance, mortgage, pledge, equity, charge, assessment, easement, covenant, restriction,
reservation, defect in title, encroachment, license, ownership interest of another Person and other burden.
“
Losses
”
has the meaning set forth in
Section 7.2(a)
.
“
Material Adverse
Effect
” means any circumstance, change, event, development or effect that is, individually or in the aggregate, material
and adverse to (i) the Business, the Acquired Assets, or the Business’ liabilities, operations or financial performance or
(ii) the ability of Seller to consummate the Transactions; provided, however, that none of the following shall be deemed to constitute,
or be taken into account in determining whether there has been, a Material Adverse Effect: (a) changes in conditions in the U.S.
or global economy or capital or financial markets generally, including changes in interest or exchange rates, (b) changes after
the date hereof in any applicable Law or in GAAP, (c) changes resulting from the announcement or pendency of this Agreement or
the Transactions, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, vendors or
employees, (d) acts of war, armed hostilities, sabotage or terrorism occurring after the date of this Agreement, or any escalation
or worsening of any such acts of war, armed hostilities, sabotage or terrorism threatened or underway as of the date of this Agreement,
(e) acts of God such as lightning, earthquakes, floods, storms, hurricanes, freezes, cyclones, tidal waves, tornadoes, unusual
weather conditions, epidemics, or plagues, (f) any failure by Seller to meet any internal or external projections, forecasts or
estimates of revenues or earnings, in and of itself, for any period ending on or after the date hereof; provided, however, that
the exceptions in this clause (f) shall not apply to facts and circumstances underlying any such failure, (g) any action by Buyer
or any of its Affiliates or the omission of an action that was required to be taken by Buyer or any of its Affiliates, (h) changes
after the date hereof in the industry in which the Business is operated or (i) any action taken by Seller or its Affiliates at
the request or with the consent of Buyer (but only if with respect to the foregoing effects in (a), (b), (d), (e) or (h), the Business
is not disproportionately affected thereby relative to other Persons in the industry in which Seller and its Subsidiaries are engaged).
For the avoidance of doubt, any material adverse effect solely and exclusively on any business or division of Seller other than
the Business shall not be taken into account in determining whether a Material Adverse Effect exists.
“
Material Contract
”
has the meaning set forth in
Section 3.7(l)
.
“
MB Sub
”
has the meaning set forth in
Section 2.2(j)
.
“
Multiemployer
Plan
” means a multiemployer plan within the meaning of Section 3(37) or 4001(a)(3) of ERISA.
“
Noncompete
Agreement
” has the meaning set forth in
Section 2.2(l)
.
“
Open Source
Code
” means any software code that is distributed as “free software” or “open source software”
or is otherwise distributed publicly in source code form under terms that permit modification and redistribution of such software.
Open Source Code includes software code that is licensed under the GNU General Public License, GNU Lesser General Public License,
Mozilla License, Common Public License, Apache License, BSD License, Artistic License, or Sun Community Source License.
“
Ordinary Course
of Business
” means, with respect to the operation by the Seller Parties of the Business, the operation thereof in the
ordinary course of business consistent with prior practices with respect to the operation thereof.
“
Parties
”
means Buyer and Seller.
“
Party
”
means Buyer or Seller.
“
Patents
”
means
all patents and patent applications.
“
Permitted Liens
”
has the meaning set forth in
Section 3.10
.
“
Person
”
means any individual, corporation, limited liability company, partnership, trust or other entity or organization.
“
Personal Data
”
means a natural person’s name, street address, telephone number, e-mail address, photograph, social security number, driver’s
license number, passport number, or customer or account number, or any other piece of information that allows the identification
of a natural person.
“
Policies
”
has the meaning set forth in
Section 3.23
.
“
Pre-Closing
Tax Period
” has the meaning set forth in
Section 6.13(a)
.
“
Proceeding
”
means any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate
proceeding and any informal proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation commenced,
brought, conducted or heard by or before, or that otherwise has involved or may involve, any Governmental Authority or any arbitrator
or arbitration panel.
“
Proxy Statement
”
means a definitive form proxy statement relating to Seller Stockholders Meeting to be held in connection with the Transactions.
“
Purchase Price
”
means the Initial Purchase Price, as adjusted pursuant to
Article VII
.
“
Recommendation
”
means a recommendation of the Board of Directors of Seller that the stockholders of Seller authorize the Transactions.
“
Registered
Business IP
” means all Business IP that is Registered IP.
“
Registered
IP
” means (a) all Intellectual Property Rights that are registered, filed, or issued under the authority of any Governmental
Authority, including all Patents, registered Copyrights and registered Trademarks, (b) all Internet Properties and (c) all applications
for any of the foregoing.
“
Release
”
means any releasing, spilling, emitting, leaking, pumping, pouring, emptying, injecting, depositing, disposing, discharging, dispersing,
leaching, dumping, storing, escaping, discarding, burying, abandoning or migrating of Hazardous Materials into the environment.
“
Retained Assets
”
has the meaning set forth in
Section 1.2
.
“
Retained Businesses
”
means the meaning set forth in the Recitals.
“
Retained Liabilities
”
has the meaning set forth in
Section 1.4
.
“
SEC
”
means the Securities and Exchange Commission.
“
Securities
Act
” means the Securities Act of 1933, as amended.
“
Seller
”
has the meaning set forth in the preamble.
“
Seller Indemnified
Parties
” has the meaning set forth in
Section 7.3
.
“
Seller Parties
”
means Seller and the Seller Subsidiaries.
“
Seller SEC
Documents
” has the meaning set forth in
Section 3.4(a)
.
“
Seller Stockholder
Approval
” means the affirmative vote of the holders of at least a majority of the votes of the outstanding shares of
Seller’s equity stock entitled to vote thereon to approve the Transactions.
“
Seller Stockholders
Meeting
” has the meaning set forth in
Section 6.3(c)
.
“
Seller Subsidiaries
”
means the Subsidiaries of Seller.
“
Seller Transaction
Expenses
” means (i) all of the fees and expenses incurred by Seller or its Affiliates in connection with the negotiation,
documentation and consummation of the Transactions, including all fees, expenses, disbursements and other similar amounts paid
to attorneys, financial advisors or accountants, (ii) all payments required to obtain third party consents in connection with the
consummation of the Transactions, (iii) all deferred compensation, severance, stock appreciation, phantom stock or similar payments
due by Seller to any Person and (iv) all stay, change of control, severance, bonus or similar payments due by Seller to any Person
and other accelerations or increases in rights or benefits of any Seller’s employees under any Employee Plan which obligation,
in each case, either (x) arises at or prior to the Closing or (y) is payable or becomes due in whole or in part as a result of
the consummation of the Transactions, including all Taxes that are payable by Seller in connection with or as a result of the payment
of such Liability.
“
Software
”
means all software of any type (including firmware), including all related databases, data collections and data files, algorithms,
application programming interfaces, user interfaces, source code, object code, executable code, and specifications and documentation,
and all rights therein.
“
Straddle Period
”
means any taxable period beginning on or before the Closing Date and ending after the Closing Date.
“
Subsidiary
”
means, with respect to any Person, any and all corporations, partnerships, limited liability companies, joint ventures, associations
and other entities controlled by such Person.
“
Subscription
Agreement
” means any Contract or license between a Subscriber and Seller pursuant to which the Subscriber uses the services
provided by the Business.
“
Superior Acquisition
Proposal
” means any unsolicited Acquisition Proposal made by a third party for consideration to Seller’s stockholders
or Board of Directors providing for the payment or exchange of cash and/or securities for a material equity interest in, or a material
portion of the assets (including the Acquired Assets) of, Seller, which the Board of Directors of Seller, acting in its good faith
judgment in accordance with
Section 6.2(h)
, determines (a) is superior to Seller’s stockholders from a financial point
of view to the transactions contemplated by this Agreement and (b) is reasonably likely to be consummated on its terms, taking
into account all legal, financial, regulatory and other aspects of the proposal.
“
Tax
”
and “
Taxes
” means a tax or taxes of any kind or nature, or however denominated, including liability for federal,
state, canton, provincial, local or foreign sales, use, transfer, registration, business and occupation, value added, excise, severance,
stamp, premium, windfall profit, customs, duties, real property, personal property, capital stock, social security, unemployment,
workers’ compensation, health insurance, disability, payroll, license, employee or other withholding, income (which includes
any income, alternative minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth or gross receipts
taxes) or other tax, of any kind whatsoever, imposed by a Tax Authority, including any estimated tax, interest, penalties, fines
or additions to tax or additional amounts in respect to the foregoing, including any transferee or secondary liability for a tax
and any liability assumed by agreement or arising as a result of being or ceasing to be a member of any affiliated group, or being
included or required to be included in any Tax Return relating thereto.
“
Tax Authority
”
means any Governmental Authority having the power to regulate, impose or collect Taxes, including the Internal Revenue Service
and any state Department of Revenue.
“
Tax Returns
”
means, with respect to any Tax, any information return for such Tax, and any return, report, statement, declaration, claim for
refund or document filed or required to be filed under Law for such Tax, and any amendment thereto.
“
Termination
Fee
” means $80,000.
“
Third Party
”
means any Person or group other than a Party hereto.
“
Third Party
Claim
” has the meaning set forth in
Section 7.5(a)
.
“
Trademarks
”
means all registered, unregistered and common law trademarks, trade names, service marks, certification marks, service names, brands,
trade dress and logos, trademark and service mark registrations and applications, and the goodwill associated therewith.
“
Trade Secrets
”
means all trade secrets, business, technical and know-how information, non-public information and confidential information and
rights to limit the use or disclosure thereof by any Person.
“
Transactions
”
means the transactions contemplated by this Agreement and the Ancillary Agreements.
“
Transferred
Employees
” has the meaning set forth in
Section 6.9(b)
.
“
Transition
Services Agreement
” has the meaning set forth in
Section 2.2(c)
.
“
User Data
”
means any Personal Data or other data or information collected by or on behalf of any Seller Party from users of the Business Products
or of any Website.
“
WARN Act
”
means the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2102 - 2109, as amended.
ANNEX B
VOTING AGREEMENT
This Voting Agreement
(this “
Agreement
”), dated as of May 28, 2014 between Alan M. Meckler (“
Stockholder
”) of Mediabistro
Inc., a Delaware corporation (the “
Seller
”), and PGM-MB Holdings LLC, a Delaware limited liability company (“
Buyer
”).
WHEREAS, concurrently
with the execution of this Agreement, Seller, Buyer and Prometheus Global Media, LLC have entered into an Asset Purchase Agreement
(as the same may be amended from time to time, the “
Purchase Agreement
”), providing for, among other things,
Buyer’s acquisition of substantially all of Seller’s assets (other than the Retained Assets) and the change of Seller’s
corporate name (the “
Transactions
”) pursuant to the terms and conditions of the Purchase Agreement; and
WHEREAS, in order to
induce Buyer to enter into the Purchase Agreement, Stockholder is willing to make certain representations, warranties, covenants
and agreements with respect to the voting securities of Seller (“
Seller Stock
”) beneficially owned by Stockholder
and set forth on
Exhibit A
(the “
Original Shares
” and, together with any additional shares of Seller
Stock pursuant to Section 6 hereof, the “
Shares
”).
NOW, THEREFORE, in
consideration of the premises and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1.
Definitions
.
For purposes of this
Agreement, capitalized terms used and not defined herein shall have the respective meanings ascribed to them in the Purchase Agreement.
2.
Representations
of Stockholder
.
Stockholder represents
and warrants to Buyer that:
(a) (i) Stockholder
owns beneficially (as such term is defined in Rule 13d-3 under the Exchange Act) all of the Original Shares free and clear of all
Liens, and (ii) except pursuant hereto and as disclosed on
Exhibit A
, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character to which Stockholder is a party relating to the pledge, disposition or voting of any
of the Original Shares and there are no voting trusts or voting agreements with respect to the Original Shares.
(b) Stockholder
does not beneficially own any shares of Seller Stock other than (i) the Original Shares and (ii) any options, warrants or other
rights to acquire any additional shares of Seller Stock or any security exercisable for or convertible into shares of Seller Stock,
set forth on Exhibit A (collectively, “
Options
”).
(c) Stockholder
has full corporate power and authority and legal capacity to enter into, execute and deliver this Agreement and to perform fully
Stockholder’s obligations hereunder (including the proxy described in
Section 3(b)
below)). This Agreement has been
duly and validly executed and delivered by Stockholder and constitutes the legal, valid and binding obligation of Stockholder,
enforceable against Stockholder in accordance with its terms.
(d) None of the
execution and delivery of this Agreement by Stockholder, the consummation by Stockholder of the transactions contemplated hereby
or compliance by Stockholder with any of the provisions hereof will conflict with or result in a breach, or constitute a default
(with or without notice of lapse of time or both) under any provision of, any trust agreement, loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument or Law applicable to Stockholder or to Stockholder’s property
or assets.
(e) No consent,
approval or authorization of, or designation, declaration or filing with, any Governmental Authority or other Person on the part
of Stockholder is required in connection with the valid execution and delivery of this Agreement. No consent of Stockholder’s
spouse is necessary under any “community property” or other laws in order for Stockholder to enter into and perform
his obligations under this Agreement.
3.
Agreement to
Vote Shares; Irrevocable Proxy
.
(a) Stockholder
agrees during the term of this Agreement to vote the Shares, and to use reasonable efforts to cause any holder of record of Shares
to vote: (i) in favor of the Transactions and the Purchase Agreement, at every meeting of the stockholders of Seller at which such
matters are considered and at every adjournment or postponement thereof; (ii) against (A) any Acquisition Proposal, (B) any action,
proposal, transaction or agreement which could reasonably be expected to result in a breach of any covenant, representation or
warranty or any other obligation or agreement of Seller under the Purchase Agreement or of Stockholder under this Agreement and
(C) any action, proposal, transaction or agreement that could reasonably be expected to impede, interfere with, delay, discourage,
adversely affect or inhibit the timely consummation of the Transactions or the fulfillment of Buyer’s or Seller’s conditions
under the Purchase Agreement or change in any manner the voting rights of any class of shares of the Seller (including any amendments
to Seller’s certificate of incorporation or bylaws).
(b) Stockholder
hereby appoints Buyer and any designee of Buyer, and each of them individually, its proxies and attorneys-in-fact, with full power
of substitution and resubstitution, to vote during the term of this Agreement with respect to the Shares in accordance with
Section
3(a)
. This proxy and power of attorney is given to secure the performance of the duties of Stockholder under this Agreement.
Stockholder shall take such further action or execute such other instruments as may be necessary to effectuate the intent of this
proxy. This proxy and power of attorney granted by Stockholder shall be irrevocable during the term of this Agreement, shall be
deemed to be coupled with an interest sufficient in law to support an irrevocable proxy and shall revoke any and all prior proxies
granted by Stockholder with respect to the Shares. The power of attorney granted by Stockholder herein is a durable power of attorney
and shall survive the dissolution, bankruptcy, death or incapacity of Stockholder. The proxy and power of attorney granted hereunder
shall terminate upon the termination of this Agreement.
(c) Subject to the
proxy granted under Section 3(b) above, Stockholder retains at all times the right to vote or exercise Stockholder’s
right to consent with respect to the Shares in such Stockholder’s sole discretion and without any other limitation on those
matters other than those set forth in Section 3(b) that are at any time or from time to time presented for consideration to
the Company’s stockholders generally;
provided
that such vote or consent would not reasonably be expected to frustrate
the purposes, or prevent or delay consummation, of the Transactions.
4.
No Voting Trusts
or Other Arrangement
.
Stockholder agrees
that Stockholder will not, and will not permit any entity under Stockholder’s control to, deposit any of the Shares in a
voting trust, grant any proxies with respect to the Shares or subject any of the Shares to any arrangement with respect to the
voting of the Shares other than agreements entered into with Buyer.
5.
Transfer and
Encumbrance
.
Stockholder agrees
that during the term of this Agreement, Stockholder will not, directly or indirectly, transfer, sell, offer, exchange, assign,
pledge or otherwise dispose of or encumber (“
Transfer
”) any of the Shares or enter into any contract, option
or other agreement with respect to, or consent to, a Transfer of, any of the Shares or Stockholder’s voting or economic interest
therein. Any attempted Transfer of Shares or any interest therein in violation of this
Section 5
shall be null and void.
This
Section 5
shall not prohibit a Transfer of the Shares by Stockholder to any member of Stockholder’s immediate
family, or to a trust for the benefit of Stockholder or any member of Stockholder’s immediate family, or upon the death of
Stockholder; provided, that a Transfer referred to in this sentence shall be permitted only if, as a precondition to such Transfer,
the transferee agrees in a writing, reasonably satisfactory in form and substance to Buyer, to be bound by all of the terms of
this Agreement. If requested by Buyer, Stockholder agrees to cause all certificates representing Shares to bear a prominent legend
stating that such Shares are subject to the transfer, voting and other restrictions described in this Agreement.
6.
Additional Shares
.
Stockholder agrees
that all shares of Seller Stock that Stockholder purchases, acquires the right to vote or otherwise acquires beneficial ownership
(as defined in Rule 13d-3 under the Exchange Act, but excluding shares of Seller Stock underlying unexercised Options) of after
the execution of this Agreement shall be subject to the terms of this Agreement and shall constitute Shares for all purposes of
this Agreement.
7.
Termination
.
This Agreement shall
terminate upon the earliest to occur of (i) the Closing and (ii) the date on which the Purchase Agreement is terminated in accordance
with its terms.
8.
No Agreement
as Director or Officer
.
Stockholder makes no
agreement or understanding in this Agreement in Stockholder’s capacity as a director or officer of the Seller or any of its
subsidiaries (if Stockholder holds such office), and nothing in this Agreement: (a) will limit or affect any actions or omissions
taken by Stockholder in stockholder’s capacity as such a director or officer, including in exercising rights under the Purchase
Agreement, and no such actions or omissions shall be deemed a breach of this Agreement or (b) will be construed to prohibit, limit
or restrict Stockholder from exercising Stockholder’s fiduciary duties as an officer or director to the Seller or its stockholders.
9.
No Solicitation
.
Stockholder agrees
that, during the period from the date of this Agreement through the termination of this Agreement in accordance with
Section
7
above, Stockholder shall not, directly or indirectly, take any action which would cause a breach of Section 6.2 of the Purchase
Agreement. Stockholder shall immediately cease and discontinue any existing discussions with any Person that relate to any Acquisition
Proposal.
10.
Specific Performance
.
The parties agree that
irreparable damage would occur in the event that any of the provisions of this Agreement (including the proxy set forth herein)
were not performed in accordance with its specific terms or were otherwise breached. Stockholder agrees that, in the event of any
breach or threatened breach by Stockholder of any covenant or obligation contained in this Agreement (including the proxy set forth
herein), Buyer shall be entitled (in addition to any other remedy that may be available to it, including monetary damages) to seek
and obtain (a) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation,
and (b) an injunction restraining such breach or threatened breach. Stockholder further agrees that neither Buyer nor any other
Person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining
any remedy referred to in this
Section 10
, and Stockholder irrevocably waives any right he or it may have to require the
obtaining, furnishing or posting of any such bond or similar instrument.
11.
Entire Agreement
.
This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof and thereof and supersede all prior negotiations,
agreements and understandings, whether written or oral, of the parties.
12.
Notices
.
Any notice, request,
instruction or other document to be given hereunder will be sent in writing and delivered personally, sent by reputable, overnight
courier service (charges prepaid), sent by registered or certified mail, postage prepaid, or by facsimile, according to the instructions
set forth below. Such notices will be deemed given: at the time delivered by hand, if personally delivered; one Business Day after
being sent, if sent by reputable, overnight courier service; at the time received, if sent by registered or certified mail; and
at the time when confirmation of successful transmission is received by the sending facsimile machine, if sent by facsimile.
If to Stockholder:
Alan M. Meckler
c/o Mediabistro Inc.
475 Park Avenue South
New York, NY 10016
Fax (203) 831-0233
With a copy (which shall not constitute notice)
to Seller’s counsel:
Wyrick Robbins Yates & Ponton LLP
4101 Lake Boone Trail
Suite 300
Raleigh, North Carolina 27607
Attn: David L. Wilke, Esq.
Fax: (919) 781-4865
If to Buyer:
PGM-MB Holdings LLC
770 Broadway, 15th Floor
New York, NY 10003
Attention: Jeffrey Wilbur
Fax:
(212)
493-4266
With a copy (which shall not constitute notice)
to:
Prometheus Legal Department
330 Madison Ave
New York, NY 10017
Fax: (212) 644-8107
and
Jenner & Block LLP
919 Third Avenue
New York, NY 10022
Attention: Tobias L. Knapp
Fax: (212) 891-1699
or to such other address
or to the attention of such other party that the recipient party has specified by prior written notice to the sending party in
accordance with the proceeding.
13.
Miscellaneous
.
(a) This Agreement
and all other agreements, documents and instruments delivered pursuant hereto and incorporated herein, unless otherwise expressly
provided therein, shall be governed by, and construed in accordance with, the substantive Laws of the State of Delaware applicable
to agreements made and to be performed entirely within such State, without reference to the conflicts of laws rules of such State.
(b) Each of the
parties irrevocably consents to the exclusive jurisdiction and venue of any state court located within New Castle County, State
of Delaware in connection with any matter based upon or arising out of this Agreement or the Transactions, agrees that process
may be served upon them in any manner authorized by the laws of the State of Delaware
for such persons and waives
and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction, venue and process. Each
party hereby agrees not to commence any legal proceedings relating to or arising out of this Agreement or the Transactions in any
jurisdiction or courts other than as provided herein.
(c) EACH PARTY ACKNOWLEDGES
AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND,
THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL
ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS
OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
Section 13(c)
.
(d) If any term
or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of Law or public
policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the Transactions is not affected in any manner adverse to any Party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify
this Agreement so as to affect the original intent of the Parties as closely as possible in an acceptable manner to the end that
the Transactions are fulfilled to the extent possible.
(e) Any provision
of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by the parties hereto or, in the case of a waiver, by the party or parties against whom the waiver is to be effective.
Any party to this Agreement may in accordance with the preceding sentence, (i) extend the time for the performance of any of the
obligations or other acts of the other party; or (ii) waive compliance with any of the agreements of the other party or conditions
to such obligations contained herein. Notwithstanding the foregoing, no failure or delay by any party hereto in exercising any
right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or future
exercise of any other right hereunder. The failure of any party hereto to assert any of its rights hereunder shall not constitute
a waiver of any of such rights.
(f) This Agreement
may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute
one and the same instrument.
(g) Each party hereto
shall execute and deliver such additional documents as may be necessary or desirable to effect the transactions contemplated by
this Agreement.
(h) All Section
headings herein are for convenience of reference only and are not part of this Agreement, and no construction or reference shall
be derived therefrom.
(i) Neither party
to this Agreement may assign any of its rights or obligations under this Agreement without the prior written consent of the other
party hereto, except that Buyer may assign, in its sole discretion, all or any of its rights, interests and obligations hereunder
to any of its Affiliates. Any assignment contrary to the provisions of this
Section 13(i)
shall be null and void.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties
hereto have executed and delivered this Agreement as of the date first written above.
|
PGM-MB Holdings LLC
|
|
By /s/ Jeffrey Wilbur
Name: Jeffrey Wilbur
Title: Chief Financial Officer
|
|
Alan M. Meckler
|
|
By /s/ Alan M. Meckler
|
Exhibit A
Original Shares
Title of Security
|
Amount of Securities Beneficially Owned
|
Ownership Form: Direct (D) or Indirect (I)
|
Nature of Indirect Beneficial Ownership
|
|
|
|
|
Common Stock
|
1,738,480
|
D
|
|
Common Stock
|
401,194
|
I
(1)
|
By Spouse
|
Common Stock
|
35,050
|
I
(1)
|
Herman Meckler Family Trust #1
|
Common Stock
|
9,871
|
I
(1)
|
Herman Meckler Family Trust #2
|
Common Stock
|
75,176
|
I
(1)
|
The Meckler Foundation
|
Common Stock
|
49,493
|
I
(1)
|
Alan M. Meckler 2010 Grantor Retained Annuity Trust
|
Notes:
|
1. Mr. Meckler indirectly owns 570,784 shares: 49,493 are held in the Alan M. Meckler 2010 Grantor Retained Annuity Trust, 37,000 shares donated by Mr. Meckler to the Meckler Foundation, a non-profit charitable foundation founded by Mr. Meckler and for which he acts as a trustee, 38,176 shares purchased by the Meckler Foundation, 401,194 shares purchased by Mr. Meckler's wife and 44,921 shares held in trust for the benefit of Mr. Meckler's mother. Mr. Meckler exercises shared voting and investment control over all of these shares except the shares held by the 2010 Grantor Retained Annuity Trust, over which Mr. Meckler exercises investment control but not voting control.
|
Options
Title of Derivative Security
|
Date Exercisable and Expiration Date
(Month/Day/Year)
|
Title and Amount of Underlying Securities
|
Number of Derivative Securities Beneficially Owned
|
Ownership Form of Derivative Security: Direct (D) or Indirect (I)
|
|
Date Exercisable
|
Expiration Date
|
Title
|
Amount or Number of Shares
|
|
|
Employee Stock Option (right to buy)
|
(2)
|
03/04/2014
|
Common Stock
|
25,000
|
25,000
|
D
|
Employee Stock Option (right to buy)
|
(2)
|
12/09/2014
|
Common Stock
|
42,858
|
42,858
|
D
|
Employee Stock Option (right to buy)
|
(3)
|
09/27/2020
|
Common Stock
|
42,858
|
42,858
|
D
|
Employee Stock Option (right to buy)
|
(4)
|
09/08/2021
|
Common Stock
|
21,429
|
21,429
|
D
|
Employee Stock Option (right to buy)
|
(2)
|
11/14/2021
|
Common Stock
|
142,858
|
142,858
|
D
|
Employee Stock Option (right to buy)
|
(5)
|
12/12/2021
|
Common Stock
|
21,429
|
21,429
|
D
|
Employee Stock Option (right to buy)
|
(6)
|
12/04/2022
|
Common Stock
|
10,000
|
10,000
|
D
|
Employee Stock Option (right to buy)
|
(7)
|
12/16/2023
|
Common Stock
|
20,000
|
20,000
|
D
|
Warrants (right to buy)
|
11/14/2013
|
11/13/2018
|
Common Stock
|
301,124
|
301,124
|
D
|
Notes
|
2. Option is 100% vested.
|
3. Option vested 33.33% ratably over a three-year period on 09/27/2011, 09/27/2012 and 09/27/2013.
|
4. Option vests 33.33% ratably over a three-year period on 09/08/2012, 09/08/2013 and 09/08/2014.
|
5. Option vests 33.33% ratably over a three-year period on 12/12/2012, 12/12/2013 and 12/12/2014.
|
6. Option vests 33.33% ratably over a three-year period on 12/05/2013, 12/05/2014 and 12/05/2015.
|
7. Option vests 33.33% ratably over a three-year period on 12/17/2014, 12/17/2015 and 12/17/2016.
|
ANNEX C
|
INVESTMENT
BANKING
JANNEY
MONTGOMERY SCOTT
1717
Arch Street
Philadelphia,
PA 19103
www.janney.com
|
May 28, 2014
The Board of Directors
Mediabistro Inc.
475 Park Avenue South
4th Floor
New York, NY 10016
Members of the Board of Directors:
We understand that Mediabistro Inc. (the “Company”
or the “Seller”), a Delaware corporation, intends to enter into an Asset Purchase Agreement (“the Agreement”)
with PGM-MB Holdings LLC (“Buyer”), a Delaware limited liability company and an affiliate of Prometheus Global Media,
LLC, a Delaware limited liability company (“PMG;” PMG is a guarantor of Buyer’s obligations under the Agreement),
pursuant to which, among other things, the Seller intends to sell, assign, transfer, convey and deliver to Buyer, and Buyer shall
purchase and acquire from Seller, all right, title and interest of Seller in and to certain assets and liabilities as described
in the Agreement (the “Target”) (such purchase and sale, the “Transaction”).
Pursuant to the Agreement, as a result of the
Transaction, at the Closing, Buyer will pay to Seller in cash, U.S. $8,000,000 (the “Transaction Consideration”). An
aggregate amount of U.S. $1,500,000 of the Transaction Consideration will be deposited into an escrow account at closing in order
to secure the Sellers’s indemnification obligations pursuant to the Agreement (the “Escrow Amount”). Such Escrow
Amount may be decreased in the event Seller is required to pay certain expenses of Buyer that arise during the period between signing
of the Agreement and closing of the Transaction. Pursuant to the terms of the Escrow Agreement to be entered into by the parties,
the Escrow Amount will be reduced to $1,000,000 six months after closing, with the remainder of the Escrow Amount to be paid out
12 months after closing, subject in each instance to hold backs for claims submitted during the applicable period. You have requested
the opinion of Janney Montgomery Scott LLC (“Janney,” “we,” “our” or “us”), as
of the date hereof, whether the Transaction Consideration is fair, from a financial point of view, to the stockholders of the Company.
Janney, as part of its investment banking business,
engages in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate
transactions.
For the purposes of rendering our opinion,
we have undertaken such review and inquiries as we deemed necessary or appropriate under the circumstances, including the following:
|
(a)
|
reviewed a draft, dated May 28, 2014 of the Agreement as provided to us as of such date;
|
|
(b)
|
reviewed certain financial statements of the Company and certain other business, financial and
operating information relating to the Company provided to Janney by the management of the Company, including without limitation
an unaudited balance sheet as of March 31, 2014 and the related statements of income for the three months then ended;
|
|
(c)
|
reviewed certain business, financial and other information relating to the Company, including financial
forecasts for the Company through December 31, 2018 provided to or discussed with Janney by the management of the Company, and
discussed with Company management the operations of the Target and the Target’s industry, history and current and future
prospects;
|
|
(d)
|
reviewed certain publicly available business and financial information relating to the Company;
|
|
(e)
|
reviewed certain publicly available business and financial information relating to the industries
in which the Company operates;
|
|
(f)
|
reviewed certain financial and stock trading data and information for the Company and compared that data and information with corresponding data and information for companies with publicly traded securities that Janney deemed relevant;
|
|
(g)
|
compared the financial terms of the proposed Transaction with the financial terms of certain other
business combinations and other transactions that Janney deemed relevant and which have recently been effected or announced;
|
|
(h)
|
discussed with certain members of senior management of the Company the strategic aspects of the
Transaction; and
|
|
(i)
|
considered such other information, financial studies, analyses and investigations and financial,
economic and market criteria that Janney deemed relevant, including a discounted cash flow analysis.
|
Several analytical methodologies have been
employed and no one method of analysis should be regarded as critical to the overall conclusion we have reached. Each analytical
technique has inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular
techniques. The overall conclusions we have reached are based on all the analysis and factors presented, taken as a whole, and
also on application of our own experience and judgment. Such conclusions may involve significant elements of subjective judgment
and qualitative analysis. We therefore give no opinion as to the value or merit standing alone of any one or more parts of the
analyses.
In rendering our opinion, we have assumed at
your direction and relied upon the accuracy and completeness of all of the financial and other information that was available to
us from public sources, that was provided to us by the Company or its representatives or that was otherwise reviewed by us. We
have further relied on the assurances of management of the Company that it is not aware of any facts or circumstances that would
make any of such information inaccurate or misleading. We have not been asked to and have not undertaken any independent verification
of any of such information and we do not assume any responsibility or liability for the accuracy or completeness thereof. Furthermore,
in connection with this opinion, we have not been requested to make, and have not made, any physical inspection or independent
appraisal or evaluation of any of the assets, properties or liabilities (contingent or otherwise) of the Company or any other party.
We did not estimate, and express no opinion regarding, the liquidation value of any entity.
We have assumed at your direction that all
financial projections and other information provided to us by the Company or its agents, as the case may be, were reasonably prepared
or obtained on bases reflecting the best currently available information, estimates and good faith judgments of the persons preparing
or obtaining the same as to the future financial performance of the Company, including the Target. We express no opinion as to
such financial projections or other information or the information or assumptions upon which they were based.
We have also assumed that there has been no
change in the Company’s assets, financial condition, results of operations, business or prospects since the date of the most
recent financial statements made available to us. We have assumed in all respects material to our analysis that the Company will
remain as a going concern for all periods relevant to our analysis, that all of the representations and warranties contained in
the Agreement and all related agreements are true and correct, that each party to such agreements will perform all of the covenants
required to be performed by such party under such agreements and that the conditions precedent to the Agreement are not waived.
With your consent, we have relied on the advice that the Company has received from its legal, accounting and tax advisors as to
all legal, accounting and tax matters relating to the Transaction and the other transactions contemplated by the Agreement.
1717 Arch Street
Philadelphia, PA 19103-1675
Tel 215.665.6180
Fax 215.665.6197
Members New York Stock Exchange, Inc.
Other Principal Exchanges
In rendering our opinion, we have assumed that
in connection with obtaining the necessary approvals for the Transaction, no restrictions or conditions will be imposed that would
have a material adverse effect on the contemplated benefits of the Transaction.
Our opinion speaks only as of the date hereof,
is based on the conditions as they exist and information which has been provided to us as of the date hereof and is without regard
to any market, economic, financial, legal or other circumstances or event of any kind or nature which may exist or occur after
such date. In addition, we express no recommendation as to how the stockholders of the Company should vote at the stockholders’
meeting held in connection with the Transaction.
We have been engaged by the Board of Directors
of the Company for the purpose of rendering this opinion and will receive a fee for our services, which fee is not contingent on
the successful completion of the Transaction. The Company has agreed to indemnify us for certain liabilities arising out of rendering
this opinion.
In the ordinary course of our business, we
may, from time to time, act as a market maker and broker in the publicly traded securities of the Company and receive customary
compensation, and we may also actively trade securities of the Company for our own account or the account of customers and, accordingly,
may hold a long or short position in such securities. We do not currently have, and have not had at any time in the past thirty
six (36) months, any material relationship with the Buyer, PMG, Guggenheim Partners, LLC or any person or entity that, to our knowledge,
is an affiliate of any of the foregoing parties.
Our opinion is directed to the Board of Directors
of the Company in connection with its consideration of the Transaction and does not constitute a recommendation to any stockholder
as to how such stockholder should vote when considering the Transaction. Our opinion is directed only to the fairness, from a financial
point of view, of the Transaction Consideration to the Company’s stockholders and does not address the underlying business
decision of the Company to engage in the Transaction, the relative merits of the Transaction as compared to any other alternative
business strategies that might exist for the Company, the effect of any other transaction in which Company might engage or the
value of the assets that will be retained by the Company after the closing of the Transaction. Other than with regard to the Agreement
and the proxy statement, our opinion is not to be quoted or referred to, in whole or in part, in any other document, nor shall
this opinion be used for any other purposes, without our prior written consent. This opinion has been approved by our fairness
opinion committee.
On the basis of and
subject to the foregoing, we are of the opinion that as of the date hereof, the Transaction Consideration pursuant to the Agreement
is fair, from a financial point of view, to the stockholders of the Company.
Very truly yours,
JANNEY MONTGOMERY
SCOTT LLC
1717 Arch Street
Philadelphia, PA 19103-1675
Tel 215.665.6180
Fax 215.665.6197
Members New York Stock Exchange, Inc.
Other Principal Exchanges
ANNEX D
MEDIABISTRO INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
LLC
as Rights Agent,
Rights Agreement
Dated as of July 3, 2013
Table of Contents
Section 1. Definitions
|
1
|
Section 2. Appointment of Rights Agent
|
5
|
Section 3. Issue of Rights Certificates
|
5
|
Section 4. Form of Rights Certificates
|
6
|
Section 5. Countersignature and Registration
|
7
|
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates
|
7
|
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights
|
8
|
Section 8. Cancellation and Destruction of Rights Certificates
|
10
|
Section 9. Reservation and Availability of Capital Stock
|
10
|
Section 10. Preferred Stock Record Date
|
11
|
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights
|
11
|
Section 12. Certificate of Adjusted Purchase Price or Number of Shares
|
16
|
Section 13. Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power
|
16
|
Section 14. Fractional Rights and Fractional Shares
|
18
|
Section 15. Rights of Action
|
19
|
Section 16. Agreement of Rights Holders
|
19
|
Section 17. Rights Certificate Holder Not Deemed a Stockholder
|
19
|
Section 18. Concerning the Rights Agent
|
20
|
Section 19. Merger or Consolidation or Change of Name of Rights Agent
|
20
|
Section 20. Duties of Rights Agent
|
21
|
Section 21. Change of Rights Agent
|
22
|
Section 22. Issuance of New Rights Certificates
|
23
|
Section 23. Redemption and Termination
|
23
|
Section 24. Exchange
|
24
|
Section 25. Notice of Certain Events
|
25
|
Section 26. Notices
|
25
|
Section 27. Supplements and Amendments
|
26
|
Section 28. Successors
|
26
|
Section 29. Determination and Actions by the Board of Directors, etc.
|
26
|
Section 30. Benefits of this Agreement
|
27
|
Section 31. Severability
|
27
|
Section 32. Governing Law; Submission to Jurisdiction
|
27
|
Section 33. Counterparts
|
27
|
Section 34. Descriptive Headings; Interpretation
|
27
|
Section 35. Force Majeure
|
27
|
Exhibit A
|
—
|
Form of Certificate of Designation
|
|
|
|
Exhibit B
|
—
|
Form of Rights Certificate
|
|
|
|
Exhibit C
|
—
|
Summary of Rights to Purchase Preferred Stock
|
RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of July
3, 2013 (this “
Agreement
”), by and between Mediabistro Inc., a Delaware corporation (the “
Company
”),
and American Stock Transfer & Trust Company, LLC, a New York limited liability trust company (the “
Rights Agent
”).
W I T N E S S E T H:
WHEREAS, on July 3, 2013 (the “
Rights
Dividend Declaration Date
”), the board of directors of the Company (the “
Board of Directors
”) authorized
the issuance and declared a dividend distribution of one Right (as hereinafter defined) for each share of Common Stock (as hereinafter
defined) outstanding at the Close of Business (as hereinafter defined) on July 15, 2013 (the “
Record Date
”),
each Right initially representing the right to purchase one one-thousandth of a share of Series A Junior Participating Preferred
Stock of the Company having the rights, powers and preferences set forth in the form of the Certificate of Designation attached
hereto as
Exhibit A
, upon the terms and subject to the conditions hereinafter set forth (the “
Rights
”),
and has further authorized the issuance of one Right (as such number may hereinafter be adjusted pursuant to the provisions of
Section 11(p)
) for each share of Common Stock that shall become outstanding between the Record Date (whether originally
issued or delivered from the Company’s treasury) and the earlier of the Distribution Date and the Expiration Date (as such
terms are hereinafter defined) or, in certain circumstances provided in
Section 22
, after the Distribution Date;
NOW, THEREFORE, in consideration of the
premises and the mutual agreements herein set forth, the parties hereby agree as follows:
Section 1.
Definitions
.
For
purposes of this Agreement, the following terms have the meanings indicated:
“
Acquiring Person
” means
any Person and such Person’s Group who, alone or together, is or becomes the Beneficial Owner of 30% or more of the shares
of Common Stock then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan of the Company or of any Subsidiary of the Company, (iv) any Person organized, appointed or established
by the Company for or pursuant to the terms of any such plan, (v) any Person who, as of immediately prior to the first public
announcement of the adoption of this Agreement, is the Beneficial Owner of 30% or more of the outstanding shares of Common Stock,
until such time as such Person shall become the Beneficial Owner (other than pursuant to a dividend or distribution paid or made
by the Company on the outstanding Common Stock or pursuant to a split or subdivision of the outstanding Common Stock) of any additional
shares of Common Stock while such Person is the Beneficial Owner of 30% or more of the outstanding shares of Common Stock, or (vi)
Mr. Alan M. Meckler, together with any of his Associates, Affiliates and any Person with whom he is Acting in Concert (as defined
below). The foregoing notwithstanding, no Person shall become an “Acquiring Person” as the result of an acquisition
of shares of Common Stock by the Company which, by reducing the number of shares outstanding, increases the proportionate number
of shares beneficially owned by such Person to 30% or more of the shares of Common Stock then outstanding;
provided
,
however
,
that if a Person, other than those Persons excepted in clauses (i), (ii), (iii), (iv), (v) or (vi) of the preceding sentence,
shall become the Beneficial Owner of 30% or more of the shares of Common Stock then outstanding by reason of acquisitions of Common
Stock by the Company and shall, after such purchases by the Company, become the Beneficial Owner of any additional shares of Common
Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Stock or pursuant
to a split or subdivision of the outstanding Common Stock), then such Person shall be deemed to be an “Acquiring Person”.
The foregoing notwithstanding, if the Board of Directors determines in good faith that a Person who would otherwise be an “Acquiring
Person” has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an “Acquiring Person”, then such Person shall not be deemed to
be an “Acquiring Person” for any purposes of this Agreement.
A Person shall be deemed to be “
Acting
in Concert
” with another Person if such Person knowingly acts (whether or not pursuant to an express agreement, arrangement
or understanding) in concert with such other Person in, or towards a common goal relating to, changing control of the Company or
in connection with or as a participant in any transaction having that purpose or effect, or in parallel with such other Person
where at least one additional factor supports a determination by the Board of Directors that such Person intended to act in concert
or in parallel with the other Person, which such additional factors may include, without limitation, exchanging information, attending
meetings, conducting discussions, or making or soliciting invitations to act in concert or in parallel. A Person who or which is
Acting in Concert with another Person shall also be deemed to be Acting in Concert with any third party who is also Acting in Concert
with such other Person.
“
Act
” means the Securities
Act of 1933, as amended.
“
Adjustment Shares
” has
the meaning set forth in
Section 11(a)(ii)
.
“
Affiliate
” and “
Associate
”
have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as
in effect on the date of this Agreement.
“
Agreement
” has the meaning
set forth in the preamble.
A Person shall be deemed the “
Beneficial
Owner
” of, and shall be deemed to “beneficially own,” any securities:
(i) which such Person, or any of such Person’s
Group, owns directly or indirectly or has the right to acquire (whether such right is exercisable immediately or only after the
passage of time or upon the satisfaction of conditions, whether or not within the control of such Person, or any of such Person’s
Group, pursuant to any agreement, arrangement or understanding (whether or not in writing and other than customary agreements with
and between underwriters and selling group members with respect to a bona fide public offering of securities) or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise;
provided
,
however
,
that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” (A) securities
tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Group until such
tendered securities are accepted for purchase or exchange, or (B) securities issuable upon exercise of Rights at any time
prior to the occurrence of a Triggering Event, or (C) securities issuable upon exercise of Rights from and after the occurrence
of a Triggering Event which Rights were acquired by such Person or any of such Person’s Group prior to the Distribution Date
or pursuant to
Section 3(a)
or
Section 22
(the “
Original Rights
”) or pursuant to
Section 11(i)
in connection with an adjustment made with respect to any Original Rights;
(ii) which such Person, or any of such Person’s
Group, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act), including pursuant to any agreement, arrangement
or understanding (whether or not in writing and other than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities);
provided
,
however
, that a Person shall not be
deemed the “Beneficial Owner” of, or to “beneficially own,” any security under this subparagraph (ii) as
a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable provisions of the General Rules and Regulations under the Exchange Act, and (B) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report);
(iii) which are beneficially owned, directly
or indirectly, by any other Person, or such other Person’s Group, with which such Person, or any of such Person’s Group,
has any agreement, arrangement or understanding (whether or not in writing and other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public offering of securities), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy or consent as described in the proviso to subparagraph (ii) of this
definition) or disposing of any voting securities of the Company; or
(iv) which such Person, or any of such Person’s
Group, is determined to Constructively Own;
provided
,
however
, that (x) nothing in this
definition shall cause a Person engaged in business as an underwriter of securities to be the “Beneficial Owner” of,
or to “beneficially own,” any securities acquired through such Person’s participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date of such acquisition and (y) no officer or director
of the Company shall be deemed to Beneficially Own any securities of any other Person solely by virtue of any actions that such
officer or director takes in such capacity.
“
Board of Directors
”
has the meaning set forth in the recitals of this Agreement.
“
Business Day
” means
any day other than a Saturday, a Sunday or a day on which banking institutions in the City of New York, New York or the state in
which the principal office of the Rights Agent is located are authorized or obligated by law or executive order to close.
“
Close of Business
” on
any given date means 5:00 P.M., New York City time, on such date,
provided
,
however
, that if such date is not a Business
Day it means 5:00 P.M., New York City time, on the next succeeding Business Day.
“
Common Stock
” means
the common stock, par value $0.01 per share, of the Company, except that “Common Stock” when used with reference to
any Person other than the Company shall mean the capital stock of such Person with the greatest voting power, or the equity securities
or other equity interest having power to control or direct the management, of such Person.
“
Common Stock Equivalents
”
has the meaning set forth in
Section 11(a)(iii)
.
“
Company
” has the meaning
set forth in the preamble to this Agreement.
A Person shall be deemed to “
Constructively
Own
” shares of Common Stock in respect of which such Person, or such Person’s Group, has or has the right to acquire
a Synthetic Long Position, calculated in the manner set forth below. The number of shares of Common Stock in respect of a Synthetic
Long Position that shall be deemed to be Constructively Owned is the notional or other number of shares of Common Stock in respect
of such Synthetic Long Position that is specified in a filing by such Person, or such Person’s Group, with the SEC or in
the documentation evidencing such Synthetic Long Position as the basis upon which the value or settlement amount of such Synthetic
Long Position, or the opportunity of the holder of such Synthetic Long Position to profit or share in any profit, is to be calculated
in whole or in part, and in any case (or if no such number of shares of Common Stock is specified in any filing or documentation),
as determined by the Board of Directors in good faith to be the number of shares of Common Stock to which such Synthetic Long Position
relates.
“
Current Market Price
”
has the meaning set forth in
Section 11(d)(i)
.
“
Current Value
” has the
meaning set forth in
Section 11(a)(iii)
.
“
Derivative
” means any
option, warrant, convertible security, stock appreciation right, swap agreement or other security, contract right or derivative
position other than any interest, right, option or other security described in Rule 16a-1(c)(1)-(5) or (7) of the General
Rules and Regulations under the Exchange Act.
“
Distribution Date
” has
the meaning set forth in
Section 3(a)
.
“
Equivalent Preferred Stock
”
has the meaning set forth in
Section 11(b)
.
“
Exchange Act
” means
the Securities and Exchange Act of 1934, as amended.
“
Exchange Ratio
” has
the meaning set forth in
Section 24(a)
.
“
Expiration Date
” has
the meaning set forth in
Section 7(a)
.
“
OTCBB
” has the meaning
set forth in
Section 11(d)(i)
.
“
Person
” means any individual,
partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, and
shall include any successor (by merger or otherwise) of such entity, as well as any group under Rule 13d-5(b)(1) of the Exchange
Act.
“
Person’s Group
”
means, with respect to any Person, all Affiliates and Associates of such Person, together with any other Person with whom such
Person is Acting in Concert (or any Affiliate or Associate thereof).
“
Preferred Stock
” means
the Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company having the rights and preferences
set forth in the Form of Certificate of Designation attached to this Agreement as
Exhibit A
, and, to the extent that there
is not a sufficient number of shares of Series A Junior Participating Preferred Stock authorized to permit the full exercise of
the Rights, any other series of preferred stock, par value $0.01 per share, of the Company designated for such purpose containing
terms substantially similar to the terms of the Series A Junior Participating Preferred Stock.
“
Principal Party
” has
the meaning set forth in
Section 13(b)
.
“
Purchase Price
” has
the meaning set forth in
Section 4(a)
.
“
Record Date
” has the
meaning set forth in the recitals of this Agreement.
“
Redemption Price
” has
the meaning set forth in
Section 23(a)
.
“
Rights
” has the meaning
set forth in the recitals of this Agreement.
“
Rights Agent
” has the
meaning set forth in the first paragraph of this Agreement.
“
Rights Certificates
”
has the meaning set forth in
Section 3(a)
.
“
Rights Dividend Declaration Date
”
has the meaning set forth in the recitals of this Agreement.
“
SEC
” means the Securities
and Exchange Commission.
“
Section 11(a)(ii) Event
”
has the meaning set forth in
Section 11(a)(ii)
.
“
Section 11(a)(ii) Trigger Date
”
has the meaning set forth in
Section 11(a)(iii)
.
“
Section 13 Event
” has
the meaning set forth in
Section 13
.
“
Spread
” has the meaning
set forth in
Section 11(a)(iii)
.
“
Stock Acquisition Date
”
means the first date of public announcement (which, for purposes of this definition, shall include a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such.
“
Subsidiary
” means, with
reference to any Person, any corporation or other entity of which an amount of voting securities sufficient to elect at least a
majority of the directors of such corporation or other entity is beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such Person.
“
Substitution Period
”
has the meaning set forth in
Section 11(a)(iii)
.
“
Summary of Rights
” has
the meaning set forth in
Section 3(b)
.
“
Synthetic Long Position
”
means any Derivative, whether or not presently exercisable, that has an exercise or conversion privilege or a settlement payment
or mechanism at a price related to the value of the Common Stock or a value determined in whole or in part with reference to, or
derived in whole or in part from, the value of the Common Stock and that increases in value as the value of the Common Stock increases
or that provides to the holder an opportunity, directly or indirectly, to profit or share in any profit derived from any increase
in the value of the Common Stock, in any case without regard to whether (i) such Derivative conveys any voting rights in the
Common Stock to such Person or such Person’s Group, (ii) such Derivative is required to be, or capable of being, settled
through delivery of Common Stock or (iii) such Person or such Person’s Group may have entered into other transactions
that hedge the economic effect of such Derivative.
“
Trading Day
” has the
meaning set forth in
Section 11(d)(i)
.
“
Triggering Event
” means
a Section 11(a)(ii) Event or any Section 13 Event.
“
Trust
” has the meaning
set forth in
Section 24(a)
.
“
Trust Agreement
” has
the meaning set forth in
Section 24(a)
.
Section 2.
Appointment of Rights Agent
.
The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the express terms and conditions
of this Agreement (and no implied terms or conditions), and the Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such co-Rights Agents as it may deem necessary or desirable. The Rights Agent shall have no duty to supervise,
and shall in no event be liable for the acts or omissions of, any such co-Rights Agents.
Section 3.
Issue of Rights Certificates
.
(a) Until the earlier of (i) the Stock
Acquisition Date (or, if the Stock Acquisition Date occurs before the Record Date, the Close of Business on the Record Date) or
(ii) the Close of Business on the tenth Business Day (or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date that a tender or exchange offer by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company,
or any Person organized, appointed or established by the Company for or pursuant to the terms of any such plan) is first published
or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation
thereof, such Person would become an Acquiring Person (the earlier of (i) and (ii) being herein referred to as the “
Distribution
Date
”), (x) the Rights, unless earlier expired, redeemed or terminated, will be evidenced (subject to the provisions
of paragraph (b) of this
Section 3
) by the certificates for the Common Stock registered in the names of the holders
of the Common Stock (or, in the case of uncertificated Common Stock by the book-entry account that evidences record ownership of
such Common Stock) (which certificates or book-entries for Common Stock shall be deemed also to be certificates for Rights) and
not by separate certificates and (y) the Rights will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company). The Company must promptly notify the Rights Agent of a Distribution
Date and request its transfer agent to give the Rights Agent a stockholder list together with all other relevant information and
documents. If notification of the Distribution Date to the Rights Agent is given orally, the Company shall confirm the same in
writing on or prior to the next Business Day. Until such notice has been received by the Rights Agent, the Rights Agent may presume
conclusively for all purposes that the Distribution Date has not occurred. As soon as practicable after the Rights Agent is notified
of the Distribution Date and receives such information and documents, the Rights Agent will, if requested, send, at the expense
of the Company, by first-class, insured, postage prepaid mail, to each record holder of the Common Stock as of the Close of Business
on the Distribution Date, at the address of such holder shown on the records of the Company, one or more Rights certificates, in
substantially the form of
Exhibit B
(the “
Rights Certificates
”), evidencing one Right for each share
of Common Stock so held, subject to adjustment as provided herein. In the event that any adjustment in the number of Rights per
share of Common Stock has been made pursuant to
Section 11
, at the time of distribution of the Rights Certificates,
the Company shall make the necessary and appropriate rounding adjustments (in accordance with
Section 14(a)
) so that
Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights.
As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates.
(b) The Company will make available, as
promptly as practicable, a copy of a Summary of Rights, in substantially the form attached as
Exhibit C
(the “
Summary
of Rights
”), to any holder of Rights who so requests from time to time prior to the Expiration Date. With respect to
certificates for the Common Stock outstanding as of the Record Date, or which become outstanding subsequent to the Record Date,
until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof.
With respect to uncertificated Common Stock outstanding as of the Record Date or which becomes outstanding subsequent to the Record
Date, until the Distribution Date, the Rights will be evidenced by the book-entry account that evidences record ownership of such
Common Stock in the name of the holders thereof. Until the earlier of the Distribution Date or the Expiration Date, the surrender
for transfer of any certificate representing shares of Common Stock (or, in the case of uncertificated shares of Common Stock,
a transfer recorded in the book-entry accounts that evidence record ownership) in respect of which Rights have been issued shall
also constitute the transfer of the Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of
all shares of Common Stock issued (whether originally issued or from the Company’s treasury) after the Record Date but prior
to the earlier of the Distribution Date or the Expiration Date or, in certain circumstances provided in
Section 22
,
after the Distribution Date. Certificates representing such shares of Common Stock shall also be deemed to be certificates for
Rights, and shall bear a legend substantially in the following form:
This certificate
also evidences and entitles the holder hereof to certain rights as set forth in the Rights Agreement between Mediabistro Inc. (the
“Company”) and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC (the “Rights Agent”) dated as of July 3,
2013, as the same may be amended from time to time (the “Rights Agreement”), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal offices of the Company. Under circumstances set forth in the
Rights Agreement, such Rights (as defined in the Rights Agreement) will be evidenced by separate certificates and will no longer
be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after receipt of a written request therefor. Under circumstances set forth
in the Rights Agreement, Rights issued to, or held by, any Person who is, was or becomes an Acquiring Person (as such TERM IS defined
in the Rights Agreement), whether currently held by or on behalf of such Person or by any subsequent holder, may become null and
void.
Until the earlier of (i) the Distribution
Date or (ii) the Expiration Date, the Rights associated with the Common Stock represented by certificates or by book-entries
that evidence record ownership shall be evidenced by such certificates or book-entries alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer of any Common Stock represented by such certificates
or book-entries shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates
or book-entries. In the event the Company purchases or acquires any shares of Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such shares shall be deemed cancelled and retired so that the Company shall not be
entitled to exercise any Rights associated with shares of Common Stock that are no longer outstanding. The omission of any legend
described in this
Section 3
shall not affect the status, validity or enforceability of any part of this Agreement or
the rights of any holder of the Rights.
Section 4.
Form of Rights Certificates
.
(a) The Rights Certificates (and the forms
of election to purchase and of assignment to be printed on the reverse thereof), when and if issued, shall each be substantially
in the form set forth in
Exhibit B
and may have such changes or marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company deems appropriate (but which do not affect the rights, duties, obligations
or immunities of the Rights Agent) and as are not inconsistent with the provisions of this Agreement, or as required to comply
with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights are listed, or to conform to customary usage. Subject to the provisions of
Section 11
and
Section 22
,
the Rights Certificates, whenever distributed, shall be dated as of the Record Date or, in the case of Rights with respect to shares
of Common Stock issued or becoming outstanding after the Record Date, the same date as the date of the stock certificate (or, with
respect to uncertificated shares of Common Stock, dated the date of issuance of the shares indicated in the books of the registrar
and transfer agent) evidencing such shares, and on their face shall entitle the holders thereof to purchase such number of one
one-thousandth of a share of Preferred Stock as shall be set forth therein at the price set forth therein (such exercise price
per one one-thousandth of a share, the “
Purchase Price
”), but the amount and type of securities purchasable
upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment from time to time as provided in
Section 11
and
Section 13(a)
.
(b) Any Rights Certificate issued pursuant
to
Section 3(a)
,
Section 11(a)(ii)
or
Section 22
that represents Rights beneficially owned
by any Person or any of such Person’s Group known to be: (i) an Acquiring Person, (ii) any Person or any of such
Person’s Group with whom such Acquiring Person was or is Acting in Concert, (iii) a transferee of an Acquiring Person who
becomes a transferee after the Acquiring Person becomes such, or (iv) a transferee of an Acquiring Person who becomes a transferee
prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any
Person or any of such Person’s Group with whom such Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect avoidance of
Section 7(e)
, and any Rights Certificate issued
pursuant to
Section 6
or
Section 11
upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent the Rights Agent has notice thereof and to the extent feasible)
a legend in substantially the following form:
The Rights represented
by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or a person with whom such acquiring person was or is acting in concert (as such terms are defined
in the Rights Agreement). Accordingly, this Rights Certificate and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
The absence of the foregoing legend on any
Rights Certificate shall in no way affect any of the other provisions of this Agreement, including the provisions of
Section 7(e)
.
Section 5.
Countersignature and Registration
.
(a) The Rights Certificates shall be executed
on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its President or any Vice President, either
manually or by facsimile signature. The Rights Certificates shall be countersigned manually or by facsimile signature by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed
or attested any of the Rights Certificates shall cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though the person who signed or attested such Rights
Certificates had not ceased to be such officer of the Company; and any Rights Certificates may be signed or attested on behalf
of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall be a proper officer of
the Company to sign or attest such Rights Certificate, although at the date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, and
upon receipt by the Rights Agent of written notice to that effect and all other relevant information and documentation referred
to in
Section 3(a)
hereof, the Rights Agent will keep or cause to be kept, at its office or offices designated for
such purpose, books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Rights Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the certificate number and the date of each of the Rights Certificates.
Section 6.
Transfer, Split Up, Combination
and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates
.
(a) Subject to the provisions of
Section 4(b)
,
Section 7(e)
and
Section 14
, at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the Expiration Date, any Rights Certificate or Certificates (other than Rights Certificates representing
Rights that have become null and void pursuant to
Section 7(e)
or that have been exchanged pursuant to
Section 24
)
may be transferred, split up, combined or exchanged for another Rights Certificate or Certificates, entitling the registered holder
to purchase a like number of one one-thousandth of a share of Preferred Stock (or, following a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as the Rights Certificate or Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer, split up, combine
or exchange any Rights Certificate or Certificates shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be transferred, split up, combined or exchanged at the office of the Rights
Agent designated for such purpose. The Right Certificates are transferable only on the registry books of the Rights Agent. Neither
the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have properly completed and duly signed, with signature guaranteed, the certificate
contained in the form of assignment on the reverse side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof (or any other Person or
any of such other Person’s Group with whom such Person or any of such Person’s Group is Acting in Concert (or any Affiliate
or Associate thereof)) as the Company or the Rights Agent shall reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b)
,
Section 7(e)
,
Section 14
and
Section 24
, countersign, either manually
or by facsimile, and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as
so requested. The Company may require payment of a sum sufficient to cover any tax or charge that may be imposed in connection
with any transfer, split up, combination or exchange of Rights Certificates. If and to the extent that the Company does require
payment of any such taxes or charges, the Company shall give the Rights Agent prompt written notice thereof and the Rights Agent
shall not deliver any Rights Certificate unless and until it is satisfied that all such payments have been made, and the Rights
Agent shall forward any such sum collected by it to the Company or to such Persons as the Company may specify by written notice.
The Rights Agent shall have no duty or obligation to take any action under any Section of this Agreement which requires the payment
by a Rights holder of applicable taxes and charges unless and until the Rights Agent is satisfied that all such taxes/and or charges
have been paid.
(b) Upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a valid Rights Certificate,
and, in case of loss, theft or destruction, of indemnity or security satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the
Rights Certificates if mutilated, the Company will prepare, execute and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7.
Exercise of Rights; Purchase
Price; Expiration Date of Rights
.
(a) Subject to
Section 7(e)
,
the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein
including the restrictions on exercisability set forth in
Section 9(c)
,
Section 11(a)(iii)
and
Section 23(a)
)
in whole or in part at any time after the Close of Business on the Distribution Date upon surrender of the Rights Certificate,
with the form of election to purchase and the certificate on the reverse side thereof properly completed and duly executed with
signature guaranteed, to the Rights Agent at the office of the Rights Agent designated for such purpose, together with payment
of the aggregate Purchase Price with respect to the total number of one one-thousandth of a share of Preferred Stock (or Common
Stock, other securities, cash or other assets, as the case may be) as to which such surrendered Rights are then exercisable, at
or prior to the earliest of (i) the Close of Business on the third anniversary of the Record Date, (ii) the time at which
the Rights are redeemed as provided in
Section 23
, (iii) the time at which such Rights are exchanged pursuant
to
Section 24
and (iv) the first anniversary of the Record Date if a holders of a majority of the Company’s
outstanding stock have not approved this Agreement prior to such time (the earliest of such dates being herein referred to
as the “
Expiration Date
”).
(b) The Purchase Price for each one one-thousandth
of a share of Preferred Stock pursuant to the exercise of a Right shall initially be $9.50, and shall be subject to adjustment
from time to time as provided in
Section 11
and
Section 13(a)
and shall be payable in accordance with paragraph
(c) below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to purchase and the certificate properly completed and duly executed
with signature guaranteed, accompanied by payment, with respect to each Right so exercised, of the Purchase Price per one one-thousandth
of a share of Preferred Stock (or other shares, securities, cash or other assets, as the case may be) to be purchased as set forth
below and an amount equal to any applicable transfer tax or charge required to be paid by the holder of the Rights Certificate
in accordance with
Section 9(e)
, the Rights Agent shall, subject to
Section 20(k)
, thereupon promptly (i) (A) requisition
from any transfer agent of the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one one-thousandth of a share of Preferred Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests, or (B) if the Company shall have elected to deposit
the total number of shares of Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition
from the depositary agent depositary receipts representing such number of one one-thousandth of a share of Preferred Stock as are
to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct the depositary agent to comply with such request, (ii) requisition
from the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with
Section 14
,
(iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights Certificate. The payment
of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii)
) shall be made in cash or by certified
bank check or bank draft payable to the order of the Company. In the event that the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash and/or distribute other property pursuant to
Section 11(a)
, the Company
will make all arrangements necessary so that such other securities, cash and/or other property are available for distribution by
the Rights Agent, if and when necessary to comply with the terms of this Agreement. The Company reserves the right to require prior
to the occurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares
of Preferred Stock would be issued.
(d) In case the registered holder of any
Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be designated by such holder, subject to the provisions
of
Section 14
.
(e) Anything in this Agreement to the contrary
notwithstanding, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, (ii) any Person or any of such Person’s Group
with whom such Acquiring Person was or is Acting in Concert, (iii) a transferee of an Acquiring Person, or a Person or member of
such Acquiring Person’s Group, who becomes a transferee after the Acquiring Person becomes such, or (iv) a transferee
of an Acquiring Person, or a Person or member of such Acquiring Person’s Group, who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person or any of such Person’s
Group with whom the Acquiring Person is Acting in Concert, or has any continuing agreement, arrangement or understanding, whether
or not in writing, regarding the transferred Rights or (B) a transfer which the Board of Directors has determined is part
of an agreement, arrangement or understanding which has as a primary purpose or effect the avoidance of this
Section 7(e)
,
shall become null and void without any further action and no holder of such Rights shall have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement or otherwise. The Company shall notify the Rights Agent in writing
when this
Section 7(e)
applies and shall use all reasonable efforts to ensure that the provisions of this
Section 7(e)
and
Section 4(b)
are complied with, but neither the Company nor the Rights Agent shall have any liability to any holder
of Rights Certificates or other Person as a result of the Company’s or the Rights Agent’s failure to make any determinations
with respect to an Acquiring Person or any of its Affiliates, Associates or transferees hereunder.
(f) Anything in this Agreement to the contrary
notwithstanding, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth in this
Section 7
unless such registered holder shall
have (i) properly completed and duly signed, with signature guaranteed, the certificate contained in the form of election
to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates (or any other
Person or any of such other Person’s Group with whom such Person is Acting in Concert (or any Associate or Affiliate thereof))
thereof as the Company or the Rights Agent shall reasonably request.
Section 8.
Cancellation and Destruction
of Rights Certificates
. All Rights Certificates surrendered for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights Certificates shall be issued in lieu thereof,
except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other Rights Certificates purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy, or cause to be destroyed, such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9.
Reservation and Availability
of Capital Stock
.
(a) The Company covenants and agrees that
it will cause to be reserved and kept available out of its authorized and unissued shares of Preferred Stock (and, following the
occurrence of a Triggering Event, out of its authorized and unissued shares of Common Stock and/or other securities or out of its
authorized and issued shares held in its treasury), the number of shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) that, as provided in this Agreement, including
Section 11(a)(iii)
,
will be sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred
Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) issuable and deliverable upon
the exercise of the Rights may be listed on any national securities exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed on such exchange,
upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts
to (i) prepare and file, as soon as practicable following the earliest date after the first occurrence of a Section 11(a)(ii)
Event on which the consideration to be delivered by the Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii)
, a registration statement under the Act with respect to the securities purchasable upon exercise
of the Rights on an appropriate form, (ii) cause such registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements
of the Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities, and (B) the
Expiration Date. The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities
or “blue sky” laws of the various states in connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the date set forth in clause (i) of the first sentence
of this
Section 9(c)
, the exercisability of the Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the Company shall issue a public announcement (with prompt notice to the
Rights Agent) stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement (with
prompt notice to the Rights Agent) at such time as the suspension is no longer in effect. In addition, if the Company shall determine
that a registration statement is required following the Distribution Date, and a Section 11(a)(ii) Event has not occurred,
the Company may temporarily suspend (and shall give the Rights Agent prompt notice thereof) the exercisability of Rights until
such time as a registration statement has been declared effective. Any provision of this Agreement to the contrary notwithstanding,
the Rights shall not be exercisable in any jurisdiction if the requisite qualification or exemption in such jurisdiction shall
not have been obtained, the exercise thereof shall not be permitted under applicable law or a registration statement shall not
have been declared effective.
(d) The Company covenants and agrees that
it will take all such actions as may be necessary to ensure that all one one-thousandth of a share of Preferred Stock (and, following
the occurrence of a Triggering Event, shares of Common Stock and/or other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares (subject to payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees
that it will pay, when due and payable, any and all taxes and charges which may be payable in respect of the issuance or delivery
of the Rights Certificates and of any certificates for a number of one one-thousandths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) upon the exercise of Rights. The Company shall not, however, be required to
pay any tax or charge which may be payable in respect of any transfer or delivery of Rights Certificates to a Person other than,
or the issuance or delivery of a number of one one-thousandths of a share of Preferred Stock (or Common Stock and/or other securities,
as the case may be) in respect of a name other than that of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) in a name other than that of the registered holder upon the exercise
of any Rights until such tax shall have been paid (any such tax being payable by the holder of such Rights Certificate at the time
of surrender) or until it has been established to the Company’s satisfaction that no such tax or charge is due.
Section 10.
Preferred Stock Record Date
.
Each Person in whose name any certificate for a number of one one-thousandths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such fractional shares of Preferred Stock (or Common Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and all applicable transfer taxes) was made;
provided
,
however
, that if the date
of such surrender and payment is a date upon which the Preferred Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares (fractional
or otherwise) on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of a stockholder of the Company with
respect to shares or other securities for which the Rights shall be exercisable, including the right to vote, to receive dividends
or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings
of the Company, except as provided herein.
Section 11.
Adjustment of Purchase Price,
Number and Kind of Shares or Number of Rights
. The Purchase Price, the number and kind of shares covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as provided in this
Section 11
.
(a) (i) In the event the Company shall
at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred
Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number
of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise
provided in this
Section 11(a)
and
Section 7(e)
, the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect,
the aggregate number and kind of shares of Preferred Stock or capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment under both this
Section 11(a)(i)
and
Section 11(a)(ii)
,
the adjustment provided for in this
Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment
required pursuant to
Section 11(a)(ii)
.
(ii) Subject
to
Section 24
, in the event any Person becomes an Acquiring Person, other than pursuant to any transaction set forth
in
Section 13(a)
, then promptly following the occurrence of such event (a “
Section 11(a)(ii) Event
”),
each holder of a Right (except as provided below and in
Section 7(e)
) shall,
for a period of 60 days after
the later of such time any Person becomes an Acquiring Person or the effective date of an appropriate registration statement filed
under the Act pursuant to
Section 9
hereof (provided, however that, if at any time prior to the expiration or termination
of the Rights there shall be a temporary restraining order, a preliminary injunction, an injunction, or temporary suspension by
the Board of Directors, or similar obstacle to exercise of the Rights (the “
Injunction
”) which prevents exercise
of the Rights, a new 60-day period shall commence on the date the Injunction is removed),
have the right
to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement,
in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company
as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths
of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event and (y) dividing that product (which, following such first occurrence shall thereafter be referred to as the “Purchase
Price” for each Right and for all purposes of this Agreement) by fifty percent (50%) of the current market price (determined
pursuant to
Section 11(d)
) per share of Common Stock on the date of such first occurrence (such number of shares,
the “
Adjustment Shares
”).
(iii) In the event that the number of
shares of Common Stock which are authorized by the Company’s Certificate of Incorporation, as amended, but not outstanding
or reserved for issuance for purposes other than upon exercise of the Rights, is not sufficient to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii) of this
Section 11(a)
, the Company shall: (A) determine
the value of the Adjustment Shares issuable upon the exercise of a Right (the “
Current Value
”), and (B) with
respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment
of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including shares, or units of shares, of preferred stock, such as the Preferred Stock, which the Board
of Directors has deemed to have substantially the same value or economic rights as shares of Common Stock (such shares or units
of shares of preferred stock, “common stock equivalents”)), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value (less the amount of
any reduction in the Purchase Price), where such aggregate value has been determined by the Board of Directors based upon the advice
of a nationally recognized investment banking firm selected by the Board of Directors;
provided
,
however
, if the
Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company’s
right of redemption pursuant to
Section 23(a)
expires (the later of (x) and (y) being referred to herein
as the “
Section 11(a)(ii) Trigger Date
”), then the Company shall be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and
then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence,
the term “Spread” shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board
of Directors shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized
for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may
seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended,
the “
Substitution Period
”). To the extent the Company determines that action should be taken pursuant to the
first and/or third sentences of this
Section 11(a)(iii)
, the Company (x) shall provide, subject to
Section 7(e)
,
that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek such stockholder approval for such authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof.
In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect (with prompt
notice of such announcements to the Rights Agent). For purposes of this
Section 11(a)(iii)
, the value of each Adjustment
Share shall be the current market price (as determined pursuant to
Section 11(d)
) per share of Common Stock on
the Section 11(a)(ii) Trigger Date and the value of any common stock equivalent shall be deemed to equal the current market
price (as determined pursuant to
Section 11(d)
) per share of the Common Stock on such date.
(b) In case the Company shall fix a record
date for the issuance of rights (other than the Rights), options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within forty-five (45) calendar days after such record date) Preferred Stock
(or shares having the same rights, privileges and preferences as the shares of Preferred Stock (“Equivalent Preferred Stock”))
or securities convertible into Preferred Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or per share
of Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred Stock or Equivalent
Preferred Stock) less than the current market price (as determined pursuant to
Section 11(d)
) per share of Preferred
Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such current market price, and the denominator of which
shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred
Stock and/or Equivalent Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so
to be offered are initially convertible). In case such subscription price may be paid by delivery of consideration part or all
of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is
fixed, and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record
date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular periodic
cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock,
but including any dividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred
to in
Section 11(b)
), the Purchase Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market
price (as determined pursuant to
Section 11(d)
) per share of Preferred Stock on such record date, less the fair
market value (as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred
Stock and the denominator of which shall be such current market price (as determined pursuant to
Section 11(d)
) per
share of Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that
such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect
if such record date had not been fixed.
(d) (i) For the purpose of any computation
hereunder, other than computations made pursuant to
Section 11(a)(iii)
, the “current market price” per
share of common stock (or similar equity interest) of an issuer on any date shall be deemed to be the average of the daily closing
prices per share of such common stock (or other security) for the thirty (30) consecutive Trading Days immediately prior to
but not including such date, and for purposes of computations made pursuant to
Section 11(a)(iii)
, the “current
market price” per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share
of such Common Stock for the ten (10) consecutive Trading Days immediately following but not including such date;
provided
,
however
, that in the event that the current market price per share of common stock (or other security) of an issuer is determined
during a period following the announcement by the issuer of such common stock (or other security) of (A) a dividend or distribution
on such common stock (or other security) payable in shares of such common stock (or other security) or securities convertible into
shares of such common stock (or other security) (other than the Rights), or (B) any subdivision, combination or reclassification
of such common stock (or other security), and the ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading
Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the “current market price”
shall be properly adjusted to take into account any trading during the period prior to such ex-dividend date or record date. The
closing price for each day shall be, if the common stock (or other security) is listed and admitted to trading on a national securities
exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal
national securities exchange on which such common stock (or other security) is listed or admitted to trading or, if such common
stock (or other security) is not listed or admitted to trading on any national securities exchange, the last quoted sales price
or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the Over-the-Counter
Bulletin Board (“
OTCBB
”) or such other system then in use, or, if on any such date such common stock (or other
security) is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional
market maker making a market in such common stock (or other security) selected by the Board of Directors. If on any such date no
market maker is making a market in such common stock (or other security), the fair value of such shares on such date as determined
in good faith by the Board of Directors shall be used. The term “
Trading Day
” shall mean a day on which the
principal national securities exchange on which shares of an issuer’s common stock (or other security) are listed or admitted
to trading is open for the transaction of business or, if such shares of common stock (or other security) are not listed or admitted
to trading on any national securities exchange, a Business Day. If an issuer’s shares of common stock (or other security)
are not publicly held or not so listed or traded, “current market price” per share shall mean the fair value per share
as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the “current market price” per share of Preferred Stock shall be determined in the same manner as set forth
above for the Common Stock in clause (i) of this
Section 11(d)
(other than the last sentence thereof). If
the current market price per share of Preferred Stock cannot be determined in the manner provided above, or if the Preferred Stock
is not publicly held or listed or traded in a manner described in clause (i) of this
Section 11(d)
, the “current
market price” per share of Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (as such number may
be appropriately adjusted for such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the current market price per share of the Common Stock. If neither the
Common Stock nor the Preferred Stock is publicly held or so listed or traded, “current market price” per share of the
Preferred Stock shall mean the fair value per share as determined in good faith by the Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights.
For all purposes of this Agreement, the “current market price” of one one-thousandth of a share of Preferred Stock
shall be equal to the “current market price” of one share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least
one percent (1%) in the Purchase Price;
provided
,
however
, that any adjustments which by reason of this
Section 11(e)
are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under
this
Section 11
shall be made to the nearest cent or to the nearest one ten-thousandth of a share of Common Stock or
one one-millionth of a share of Preferred Stock or one ten-thousandth of any other share or security, as the case may be. The first
sentence of this
Section 11(e)
notwithstanding, any adjustment required by this
Section 11
shall be made
no later than the earlier of (i) three (3) years from the date of the transaction which mandates such adjustment, or
(ii) the Expiration Date.
(f) If as a result of an adjustment made
pursuant to
Section 11(a)(ii)
or
Section 13(a)
, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in
Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k)
and
(m)
, and the provisions of
Sections 7, 9, 10, 13
and
14
with
respect to the Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the
Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-thousandths of a share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised
its election as provided in
Section 11(i)
, upon each adjustment of the Purchase Price as a result of the calculations
made in
Sections 11(b)
and
(c)
, each Right outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of one-thousandths of a share of Preferred Stock (calculated
to the nearest one-ten-thousandth) obtained by (i) multiplying (x) the number of one one-thousandths of a share covered
by a Right immediately prior to this adjustment, by (y) the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price, and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) The Company may elect on or after the
date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of any adjustment in the number of one one-thousandths
of a share of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one-ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement (with prompt notice thereof to the Rights Agent) of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to
be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Rights Certificates
have been issued, shall be at least ten (10) days later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i)
, the Company shall, as promptly
as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights Certificates evidencing,
subject to
Section 14
, the additional Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company,
new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Rights Certificates
so to be distributed shall be issued, executed and delivered by the Company and countersigned and delivered by the Rights Agent
in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change
in the Purchase Price or the number of one one-thousandths of a share of Preferred Stock issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to express the Purchase Price per one one-thousandth of
a share and the number of one one-thousandths of a share which were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would
cause an adjustment reducing the Purchase Price below the then stated value, if any, of the number of one one-thousandths of a
share of Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable shares of Preferred
Stock at such adjusted Purchase Price.
(l) In any case in which this
Section 11
shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company
may elect to defer (with prompt notice to the Rights Agent) until the occurrence of such event the issuance to the holder of any
Right exercised after such record date the number of one one-thousandths of a share of Preferred Stock and other capital stock
or securities of the Company, if any, issuable upon such exercise over and above the number of one one-thousandths of a share of
Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment (and shall provide the Rights Agent prompt notice of such election);
provided
,
however
, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s
right to receive such additional shares (fractional or otherwise) or securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this
Section 11
to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those
adjustments expressly required by this
Section 11
, as and to the extent that the Board of Directors, in its good faith
judgment, shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance
wholly for cash of any shares of Preferred Stock at less than the current market price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are convertible into or exchangeable for shares of Preferred Stock,
(iv) stock dividends or (v) issuance of rights, options or warrants referred to in this
Section 11
, hereafter
made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that
it shall not, at any time after the Distribution Date, (i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with
Section 11(o)
), (ii) merge with or into any other Person (other than
a Subsidiary of the Company in a transaction which complies with
Section 11(o)
), or (iii) sell or transfer (or
permit any Subsidiary to sell or transfer), in one transaction, or a series of related transactions, assets, cash flow or earning
power aggregating more than fifty percent (50%) of the assets, cash flow or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions
each of which complies with
Section 11(o)
), if (x) at the time of or immediately after such consolidation, merger,
sale or transfer there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior to, simultaneously
with or immediately after such consolidation, merger, sale or transfer, the stockholders of the Person who constitutes, or would
constitute, the “Principal Party” for purposes of
Section 13(a)
shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that,
after the Distribution Date, it will not, except as permitted by
Section 23
,
Section 24
or
Section 27
,
take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) In the event that the Company shall
at any time after the Rights Dividend Declaration Date and prior to the Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine
the outstanding shares of Common Stock into a smaller number of shares, the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter but prior to the Distribution Date, shall be proportionately adjusted
so that the number of Rights thereafter associated with each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction
the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of Common Stock outstanding immediately following the occurrence
of such event.
Section 12.
Certificate of Adjusted Purchase
Price or Number of Shares
. Whenever an adjustment is made as provided in
Section 11
or
Section 13
,
the Company shall (a) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts and
computations accounting for such adjustment, (b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate, and (c) if a Distribution Date has occurred, mail a brief
summary thereof to each holder of a Rights Certificate in accordance with
Section 26
. The Rights Agent shall be fully
protected and shall incur no liability in relying on any such certificate and on any adjustment therein contained and shall not
be deemed to have knowledge of such adjustment unless and until it shall have received such certificate.
Section 13.
Consolidation, Merger or
Sale or Transfer of Assets, Cash Flow or Earning Power
.
(a) In the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o)
), and the Company shall
not be the continuing or surviving corporation of such consolidation or merger, (y) any Person or any of such Person’s
Group (other than a Subsidiary of the Company in a transaction which complies with
Section 11(o)
) shall engage in a
share exchange with or shall consolidate with, or merge with or into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such share exchange, consolidation or merger, all or part of
the outstanding shares of Common Stock shall be changed into or exchanged for stock or other securities of any other Person or
any of such other Person’s Group or cash or any other property, or (z) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer), in one transaction or a series of related transactions,
assets, cash flow or earning power aggregating more than 50% of the assets, cash flow or earning power of the Company and its Subsidiaries
(taken as a whole) to any Person or Persons or any of such Person’s Group (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies with
Section 11(o)
) (any event described in clauses (x),
(y) or (z) of this
Section 13(a)
following the Stock Acquisition Date, a “
Section 13 Event
”),
then, and in each such case, proper provision shall be made so that: (i) each holder of a Right, except as provided in
Section 7(e)
,
shall thereafter have the right to receive upon the exercise thereof at the then-current Purchase Price in accordance with the
terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of validly authorized
and issued, fully paid, nonassessable and freely tradeable shares of Common Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the result
obtained by (l) multiplying the then-current Purchase Price by the number of one one-thousandths of a share of Preferred Stock
for which a Right is exercisable immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13 Event, multiplying the number of such one one-thousandths
of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first occurrence), and dividing that product (which, following
the first occurrence of a Section 13 Event, shall be referred to as the “Purchase Price” for each Right and for
all purposes of this Agreement) by (2) 50% of the current market price (determined pursuant to
Section 11(d)(i)
) per
share of the Common Stock of such Principal Party on the date of consummation of such Section 13 Event; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11
shall apply only to such Principal
Party following the first occurrence of a Section 13 Event; (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of its common stock (or similar equity interest)) in connection
with the consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of
Section 11(a)(ii)
shall be of no effect following the first occurrence of any Section 13
Event.
(b) “
Principal Party
”
shall mean:
(i) in the case of any transaction described
in clause (x) or (y) of the first sentence of
Section 13(a)
, the Person that is the issuer of any securities
into which shares of Common Stock of the Company are converted or exchanged in such merger, consolidation or exchange, and if no
securities are so issued, the Person that is the other party to such merger, consolidation or exchange; and
(ii) in the case of any transaction described
in clause (z) of the first sentence of
Section 13(a)
, the Person that is the party receiving the greatest portion
of the assets, cash flow or earning power transferred pursuant to such transaction or transactions;
provided
,
however
,
that in any such case described in the foregoing clause (i) or (ii) of this
Section 13(b)
, (1) if the
common stock (or similar equity interest) of such Person is not at such time and has not been continuously over the preceding twelve
(12) month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary
of another Person the common stock (or similar equity interest) of which is and has been so registered, “Principal Party”
shall refer to such other Person; and (2) in case such Person is a Subsidiary, directly or indirectly, of more than one Person,
the common stock (or similar equity interest) of two or more of which are and have been so registered, “Principal Party”
shall refer to whichever of such Persons is the issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any
Section 13 Event unless the Principal Party shall have a sufficient number of authorized shares of its Common Stock which
have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this
Section 13
and unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13
and further providing
that, as soon as practicable after the date of any consolidation, merger, exchange, sale or transfer of assets mentioned in paragraph
(a) of this
Section 13
, the Principal Party will:
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, and
will use its best efforts to cause such registration statement to (A) become effective as soon as practicable after such filing
and (B) remain effective (with a prospectus at all times meeting the requirements of the Act) until the Expiration Date;
(ii) use its best efforts to qualify or
register the Rights and the securities purchasable upon exercise of the Rights under blue sky laws of such jurisdiction, as may
be necessary or appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
(d) The provisions of this
Section 13
shall similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a Section 13
Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a)
.
Section 14.
Fractional Rights and Fractional
Shares
.
(a) The Company shall not be required to
issue fractions of Rights, except prior to the Distribution Date as provided in
Section 11
, or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right. For purposes of this
Section 14(a)
, the current market
value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of the Rights for any day shall be, if the Rights are listed
or admitted to trading on a national securities exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading
or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted sales price or, if
not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by OTCBB or such other
system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of Directors. If on
any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors shall be used and such determination shall be described in a statement filed with the Rights
Agent and the holders of the Rights and shall be binding on the Rights Agent and the holders of the Rights.
(b) The Company shall not be required to
issue fractions of shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share
of Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock). Fractions of shares of
Preferred Stock in integral multiples of one one-thousandth of a share may, at the election of the Company, be evidenced by depositary
receipts pursuant to an appropriate agreement between the Company and a depositary selected by it;
provided
,
however
,
that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the shares represented by such depositary receipts. In lieu of fractional shares
of Preferred Stock that are not integral multiples of one one-thousandth of a share of Preferred Stock, the Company shall pay to
the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one one-thousandth of a share of Preferred Stock. For purposes of this
Section 14(b)
,
the current market value of one one-thousandth of a share of Preferred Stock shall be one one-thousandth of the closing price of
a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii)
) for the Trading Day immediately prior to the
date of such exercise.
(c) Following the occurrence of a Triggering
Event, the Company shall not be required to issue fractions of shares of Common Stock or other securities upon exercise of the
Rights or to distribute certificates which evidence fractional shares of Common Stock or other securities. In lieu of fractional
shares of Common Stock or other securities, the Company shall pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one share
of Common Stock or other securities. For purposes of this
Section 14(c)
, the current market value of one share of Common
Stock or other security shall be the closing price of one share of Common Stock or such other security, as applicable, (as determined
pursuant to
Section 11(d)(i)
) for the Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance
of the Rights expressly waives such holder’s right to receive any fractional Rights or any fractional shares upon exercise
of a Right, except as permitted by this
Section 14
.
(e) Whenever a payment for fractional Rights
or fractional shares is to be made by the Rights Agent under any Section of this Agreement, the Company shall (i) promptly
prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payment and
the prices and/or formulas utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in
the form of fully collected funds to make such payments. The Rights Agent shall be fully protected in relying upon such a certificate
and shall have no duty with respect to, and shall not be deemed to have knowledge of any payment for fractional Rights or fractional
shares under any Section of this Agreement relating to the payment of fractional Rights or fractional shares unless and until the
Rights Agent shall have received such a certificate and sufficient monies.
Section 15.
Rights of Action
. All
rights of action in respect of this Agreement, other than rights of action vested in the Rights Agent pursuant to the terms of
this Agreement, are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date,
the registered holders of the Common Stock); and any registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior
to the Distribution Date, of the Common Stock), may, in such holder’s own behalf and for such holder’s own benefit,
enforce, and may institute and maintain any suit, action or proceeding against the Company or any other Person to enforce, or otherwise
act in respect of, such holder’s right to exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights,
it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement
by the Company, and shall be entitled to specific performance of the obligations hereunder and injunctive relief against actual
or threatened violations of the obligations hereunder by the Company of any Person subject to this Agreement.
Section 16.
Agreement of Rights Holders
.
Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and with every holder of
a Right that:
(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office of the Rights Agent designated
for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate forms and certificates
properly completed and duly executed;
(c) subject to
Section 6(a)
and
Section 7(f)
, the Company and the Rights Agent may deem and treat the person in whose name a Rights Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates or the associated Common
Stock certificates made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company
nor the Rights Agent, subject to the last sentence of
Section 7(e)
, shall be required to be affected by any notice
to the contrary; and
(d) anything in this Agreement to the contrary
notwithstanding, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as
a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction
or other order, decree, judgment or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided
,
however
, the Company must use commercially
reasonable efforts to have any such injunction, order, decree, judgment or ruling lifted or otherwise overturned as soon as possible.
Section 17.
Rights Certificate Holder
Not Deemed a Stockholder
. No holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be
deemed for any purpose to be the holder of the number of one one-thousandths of a share of Preferred Stock or any other securities
of the Company which may at any time be issuable upon the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders
at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in
Section 25
), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate shall have been exercised in accordance with the provisions hereof.
Section 18.
Concerning the Rights Agent
.
(a) The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the preparation, negotiation, execution,
delivery and amendment of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement,
cost or expense (including, without limitation, the reasonable fees and expenses of legal counsel), incurred without gross negligence,
bad faith or willful misconduct on the part of the Rights Agent (each as determined by a final, non-appealable judgment of a court
of competent jurisdiction), for any action taken, suffered or omitted to be taken by the Rights Agent in connection with the acceptance,
administration, exercise and performance of its duties under this Agreement, including, without limitation, the reasonable costs
and expenses of defending against any claim of liability. The costs and expenses incurred in enforcing this right of indemnification
shall also be paid by the Company. The provisions of this
Section 18
and
Section 20
below shall survive
the termination of this Agreement, the exercise or expiration of the Rights and the resignation or removal of the Rights Agent.
(b) The Rights Agent shall be authorized
and protected and shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it in connection
with its acceptance and administration of this Agreement in reliance upon any Rights Certificate or certificate for Common Stock
or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed
and, where necessary, guaranteed, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel
as set forth in
Section 20
.
Section 19.
Merger or Consolidation or
Change of Name of Rights Agent
.
(a) Any Person into which the Rights Agent
or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation
to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the stock transfer or shareowner
services business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of any of the parties hereto;
provided
,
however
,
that such Person would be eligible for appointment as a successor Rights Agent under the provisions of
Section 21
.
The purchase of all or substantially all of the Rights Agent’s assets employed in the performance or transfer agent activities
shall be deemed a merger or consolidation for purposes of this
Section 19
. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at the time any of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the predecessor or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the
Rights Agent shall be changed, and at such time any of the Rights Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case,
at that time, any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates
either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
Section 20.
Duties of Rights Agent
.
The Rights Agent undertakes to perform only the duties and obligations expressly imposed by this Agreement (and no implied duties
or obligations), upon the following terms and conditions, by all of which the Company and the holders of Rights Certificates, by
their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains
from acting, the Rights Agent may consult with legal counsel (who may be legal counsel for the Company or any employee of the Rights
Agent), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect to, any action taken, suffered or omitted to be taken by it in accordance
with such advice or opinion.
(b) Whenever in the performance of its
duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including the identity
of any Acquiring Person and the determination of “current market price”) be proved or established by the Company prior
to taking, suffering or omitting to take any action hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman
of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary
or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization and
protection to the Rights Agent, and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or
omitted to be taken by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder
only for its own gross negligence, bad faith or willful misconduct (each as determined by a final, non-appealable judgment of a
court of competent jurisdiction). Anything to the contrary notwithstanding, in no event shall the Rights Agent be liable for special,
indirect, incidental, punitive or consequential losses (including, but not limited to, lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and regardless of the form of action. Any liability of the Rights Agent
under this Agreement will be limited to the annual fees paid by the Company to the Rights Agent.
(d) The Rights Agent shall not be liable
for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Rights Certificates or be required
to verify the same (except as to its countersignature on such Rights Certificates), but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any
liability for, nor be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Rights Certificate (except
its countersignature thereof); nor shall it be liable or responsible for any breach by the Company of any covenant or failure by
the Company to satisfy any condition contained in this Agreement or in any Rights Certificate; nor shall it be liable or responsible
for any adjustment required under the provisions of
Section 11
,
Section 13
or
Section 24
or
responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after actual notice of any
such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or Preferred Stock to be issued pursuant to this Agreement or any Rights Certificate
or as to whether any shares of Common Stock or Preferred Stock will, when so issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent
of its duties under this Agreement.
(g) The Rights Agent is hereby authorized
and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and such advice
or instructions shall be full authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for
or in respect of any action taken, suffered or omitted to be taken by it in accordance with such advice or instructions of any
such officer or for any delay in acting while waiting for those instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken, suffered or omitted
to be taken by the Rights Agent under this Agreement and the date on and/or after which such action shall be taken, suffered or
such omission shall be effective. The Rights Agent shall not be liable for any action taken, suffered or omitted to be taken by
it in accordance with a proposal included in any such application on or after the date specified in such application (which date
shall not be less than five Business Days after the date any officer of the Company actually receives such application, unless
any such officer shall have consented in writing to an earlier date) unless, prior to (i) taking such action or (ii) the
effective date of such omission, the Rights Agent shall have received written instructions in response to such application specifying
the action to be taken, suffered or omitted to be taken.
(h) The Rights Agent and any stockholder,
director, Affiliate, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of
the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent, any Affiliate, director, officer or employee of the Rights Agent from acting in any other capacity
for the Company or for any other Person.
(i) The Rights Agent may execute and exercise
any of the rights or powers hereby vested in it or perform any duty hereunder either itself (through its employees, directors,
and officers) or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or for any loss to the Company, any holders of Rights or any other
Person resulting from any such act, default, neglect or misconduct absent gross negligence, bad faith or willful misconduct (each
as determined by a final non-appealable judgment of a court of competent jurisdiction) on the part of the Rights Agent, including
in the selection, oversight and continued employment of such attorneys or agents.
(j) No provision of this Agreement shall
require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, either (i) the certificate attached to the form of assignment or
form of election to purchase, as the case may be, has either not been completed (including, without limitation, to certify the
holder is not an Acquiring Person) or indicates an affirmative response to any item therein, or (ii) any other actual or suspected
irregularity exists, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without
first consulting with the Company.
(l) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate contained in the form of assignment or the form of election
to purchase set forth on the reverse thereof, as the case may be, has not been properly completed to certify the holder is not
an Acquiring Person, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without
first consulting with the Company.
(m) The Rights Agent shall not be required
to take notice or be deemed to have notice of any fact, event or determination (including, without limitation, any dates or events
defined in this Agreement or the designation of any Person or any of such Person’s Group as an Acquiring Person, Affiliate
or Associate) under this Agreement unless and until the Rights Agent shall be specifically notified in writing by the Company of
such fact, event or determination.
Section 21.
Change of Rights Agent
.
The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon at least
thirty (30) days’ notice in writing mailed to the Company, and to each transfer agent of the Common Stock and Preferred
Stock known to the Rights Agent by registered or certified mail at the expense of the Company, and, if such removal occurs after
the Distribution Date, to the holders of the Rights Certificates by first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon at least thirty (30) days’ notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail, if such removal occurs after the Distribution Date.
If
the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after giving notice
of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights
Agent or by any registered holder of a Rights Certificate (who shall, with such notice, submit such holder’s Rights Certificate
for inspection by the Company), then the Rights Agent or any registered holder of any Rights Certificate may apply, at the expense
of the Company, to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (i) a Person organized and doing business under the laws of the United
States or any state of the United States, so long as such Person is authorized to do business in the such state, in good standing,
which is authorized under such laws to exercise stock transfer powers or shareowner services and is subject to supervision or examination
by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (ii) an Affiliate of such Person. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent under this Agreement without
further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further reasonable assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and, if such appointment occurs after
the Distribution Date, mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to give any
notice provided for in this
Section 21
or any defect therein shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22.
Issuance of New Rights Certificates
.
Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue
new Rights Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement.
Section 23.
Redemption and Termination
.
(a) The Board of Directors may, at its
option, at any time prior to the earlier of (i) the Stock Acquisition Date (or, if the Stock Acquisition Date shall have occurred
prior to the Record Date, the Close of Business on the Record Date), or (ii) the Expiration Date, redeem all but not less than
all of the then outstanding Rights at a redemption price of $0.001 per Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter
referred to as the “
Redemption Price
”). Anything contained in this Agreement to the contrary notwithstanding,
the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as the Company’s
right of redemption hereunder has expired. The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock
(based on the “current market price”, as defined in
Section 11(d)(i)
, of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board of Directors. The redemption of the Rights by the
Board of Directors may be made effective at such time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish.
(b) Immediately upon the action of the
Board of Directors ordering the redemption of the Rights pursuant to
Section 23(a)
, evidence of which shall have been
filed with the Rights Agent and without any further action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held. Promptly
after the action of the Board of Directors ordering the redemption of the Rights, the Company shall give notice of such redemption
to the Rights Agent and the holders of the then-outstanding Rights by mailing such notice to the Rights Agent and to all such holders
at each holder’s last address as it appears upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Stock. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
Section 24.
Exchange
.
(a) The Board of Directors may, at its
option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become null and void pursuant to the provisions of
Section 7(e)
) for
shares of Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to
as the “
Exchange Ratio
”). The foregoing notwithstanding, the Board of Directors shall not be empowered to effect
such exchange at any time after any Person or any of such Person’s Group (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company, any Person organized, appointed or established by
the Company for or pursuant to the terms of any such plan, or Mr. Alan M. Meckler or any of his Associates, Affiliates or any Person
with whom he is Acting in Concert), becomes the Beneficial Owner of fifty percent (50%) or more of the Common Stock then outstanding.
Before effecting an exchange pursuant to this
Section 24
, the Board may direct the Company to enter into a trust agreement
in such form and with such terms as the Board shall then approve (the “
Trust Agreement
”). If the Board so directs,
the Company shall enter into the Trust Agreement and shall issue to the trust created by the Trust Agreement (the “
Trust
”)
all or some (as designated by the Board) of the shares of Common Stock (or other securities) issuable pursuant to the exchange,
and all or some (as designated by the Board) holders of Rights entitled to receive shares pursuant to the exchange shall be entitled
to receive such shares (and any dividends paid or distributions made thereon after the date on which such shares are deposited
in the Trust) only from the Trust and solely upon compliance with the relevant terms and provisions of the Trust Agreement.
(b) Immediately upon the effectiveness
of the action of the Board of Directors ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24
and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter
of a holder of any such Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights held
by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice (with prompt notice thereof to the
Rights Agent) of any exchange;
provided
,
however
, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall promptly mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Stock for Rights will be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged. Any partial exchange will be effected pro rata based on the number of Rights (other than Rights
which have become null and void pursuant to the provisions of
Section 7(e)
) held by each holder of Rights. Prior to
effecting an exchange and registering shares of Common Stock (or such other securities) in any Person’s name, including any
nominee or transferee of a Person, the Company may require (or cause the trustee of the Trust to require), as a condition thereof,
that any holder of Rights provide evidence, including, without limitation, the identity of the Beneficial Owners (or former Beneficial
Owners) thereof or Affiliates and Associates (or former Affiliates and Associates) thereof (or any other Person or any of such
other Person’s Group) as the Company shall reasonably request in order to determine if such Rights are null and void. If
any Person shall fail to comply with such request, the Company shall be entitled conclusively to deem the Rights formerly held
by such Person to be null and void pursuant to
Section 7(e)
.
(c) In any exchange pursuant to this
Section 24
,
the Company, at its option, may substitute shares of Preferred Stock (or Equivalent Preferred Stock, as such term is defined in
paragraph (b) of
Section 11
) for shares of Common Stock exchangeable for Rights, at the initial rate of one one-thousandth
of a share of Preferred Stock (or Equivalent Preferred Stock) for each share of Common Stock, as appropriately adjusted to reflect
adjustments in the voting rights of the Preferred Stock pursuant to the terms thereof, so that the fraction of a share of Preferred
Stock delivered in lieu of each share of Common Stock shall have the same voting rights as one share of Common Stock.
(d) In the event that there shall not be
sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated
in accordance with this
Section 24
, the Company shall take all such actions as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to
issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares of Common Stock. In lieu
of such fractional shares of Common Stock, there shall be paid to the registered holders of the Rights Certificates with regard
to which such fractional shares of Common Stock would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the purposes of this subsection (e), the current market value of a whole
share of Common Stock shall be the closing price of a share of Common Stock (as determined pursuant to the second sentence of
Section 11(d)(i)
)
for the Trading Day immediately prior to the date of exchange pursuant to this
Section 24
.
Section 25.
Notice of Certain Events.
(a) In case the Company shall propose,
at any time after the Distribution Date, (i) to pay any dividend payable in stock of any class to the holders of Preferred
Stock or to make any other distribution to the holders of Preferred Stock (other than a regular periodic cash dividend out of earnings
or retained earnings of the Company), or (ii) to offer to the holders of Preferred Stock rights or warrants to subscribe for
or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options,
or (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision
of outstanding shares of Preferred Stock), or (iv) to effect any consolidation or merger into or with any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o)
), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one transaction or a series of
related transactions, of more than fifty percent (50%) of the assets, cash flow or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions
each of which complies with
Section 11(o)
), or (v) to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to the Rights Agent and to each holder of a Rights Certificate, to the
extent feasible and in accordance with
Section 26
, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders
of the shares of Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20) days prior to the record date for determining holders of
the shares of Preferred Stock for purposes of such action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of Preferred
Stock, whichever shall be the earlier.
(b) In case a Section 11(a)(ii) Event
shall occur, then, in any such case, (i) the Company shall as soon as practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26
, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii)
, and (ii) all
references in the preceding paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if appropriate,
other securities.
Section 26.
Notices
. Notices or demands
authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Rights Certificate to or on the Company
shall be sufficiently given or made if in writing and sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) or by facsimile transmission as follows:
Mediabistro Inc.
50 Washington St., Suite 912
Norwalk, Connecticut 06854
Attention: Chief Executive Officer
Telephone No.: (203) 662-2800
Facsimile No.:
with a copy to (which shall not constitute notice):
Wyrick Robbins Yates & Ponton LLP
4101 Lake Boone Trail, Suite 300
Raleigh, North Carolina 27607
Attention: David L. Wilke
Telephone No.: (919) 781-4000
Facsimile No.: (919) 781-4865
Subject to the provisions of
Section 21
, any notice
or demand authorized by this Agreement to be given or made by the Company or by the holder of any Rights Certificate to or on the
Rights Agent shall be sufficiently given or made if in writing and sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) or by facsimile transmission as follows:
American Stock Transfer & Trust Company, LLC
6201 15
th
Avenue
Brooklyn, New York 11219
Attention: Corporate Trust Department
Telephone No.:
Facsimile No.:
with a copy to:
American Stock Transfer & Trust Company, LLC
6201 15
th
Avenue
Brooklyn, New York 11219
Attention: General Counsel
Telephone No.: (718) 921-8200
Facsimile No.: (718) 331-1852
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the
holder of shares of Common Stock) shall be sufficiently given or made if in writing, sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry books of the Company.
Section 27.
Supplements and Amendments
.
The Company and the Rights Agent may from time to time supplement or amend this Agreement without the approval of any holders of
Rights (a) prior to the Distribution Date, in any respect, and (b) on or after the Distribution Date, to make any changes
that the Company may deem necessary or desirable (i) that shall not materially adversely affect the interests of the holders
of Rights (other than the Acquiring Person, or any other Person or any of such other Person’s Group or transferee of any
Acquiring Person, or transferee of any other Person or any of such other Person’s Group) or (ii)(A) in order to cure any
ambiguity or (B) to correct or supplement any provision contained herein that may be inconsistent with any other provision
herein or otherwise defective, including any change in order to satisfy any applicable law, rule or regulation. Any supplement
or amendment authorized by this
Section 27
shall be evidenced by a writing signed by the Company and the Rights Agent.
The Rights Agent shall duly execute and deliver any supplement or amendment hereto requested by the Company in writing
provided
that the Company has delivered to the Rights Agent a certificate from an appropriate officer of the Company that states that the
proposed supplement or amendment complies with the terms of this Agreement. Anything in this Agreement to the contrary notwithstanding,
the Rights Agent may, but shall not be obligated to, enter into any supplement or amendment that affects the Rights Agent’s
own rights, duties, immunities or obligations under this Agreement.
Section 28.
Successors
. All the covenants
and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of
their respective successors and assigns hereunder.
Section 29.
Determination and Actions
by the Board of Directors, etc
. The Board of Directors, or a duly authorized committee thereof, shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board of Directors
or to the Company, or as may be necessary or advisable in the administration of this Agreement, including the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, but not limited to, a determination to redeem or not redeem the Rights or to amend
this Agreement). All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board of Directors in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other Persons, and (y) not subject
the Board of Directors to any liability to the holders of the Rights. The Rights Agent is always entitled to assume that the Company’s
Board of Directors acted in good faith and shall be fully protected and incur no liability in reliance thereon.
Section 30.
Benefits of this Agreement
.
Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of
the Common Stock).
Section 31.
Severability
. If any
term, provision, covenant or restriction of this Agreement or the Rights is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
and the Rights shall remain in full force and effect and shall in no way be affected, impaired or invalidated;
provided
,
however
, that anything in this Agreement to the contrary notwithstanding, if any such term, provision, covenant or restriction
is held by such court or authority to be invalid, void or unenforceable and the Board of Directors determines in its good faith
judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in
Section 23
shall be reinstated and shall not expire until the Close of Business
on the tenth day following the date of such determination by the Board of Directors;
provided
,
further
, that if any
such invalid, void or unenforceable term, provision, covenant or restriction shall adversely affect the rights, duties, immunities
or obligations of the Rights Agent, the Rights Agent shall be entitled to resign immediately.
Section 32.
Governing Law; Submission
to Jurisdiction
.
This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws
of such State applicable to contracts made and to be performed entirely within such State;
provided
,
however
, that
all provisions regarding the rights, duties and obligations of the Rights Agent shall be governed by and construed in accordance
with the laws of the state of Colorado applicable to contracts made and to be performed entirely within such state, without regard
to the principles or rules concerning conflicts of laws which might otherwise require application of the substantive laws of another
jurisdiction. The Company and each holder of Rights hereby irrevocably submits to the exclusive jurisdiction of the Court of Chancery
of the State of Delaware, or, if such court shall lack subject matter jurisdiction, the United States District Court for the District
of Delaware, over any suit, action or proceeding arising out of or relating to this Agreement. The Company and each holder of Rights
acknowledge that the forum designated by this
Section 32
has a reasonable relation to this Agreement and to such Persons’
relationship with one another. The Company and each holder of Rights hereby waive, to the fullest extent permitted by applicable
law, any objection which they now or hereafter have to personal jurisdiction or to the laying of venue of any such suit, action
or proceeding brought in any court referred to in this
Section 32
. The Company and each holder of Rights undertake
not to commence any action subject to this Agreement in any forum other than the forum described in this
Section 32
.
The Company and each holder of Rights agree that, to the fullest extent permitted by applicable law, a final and non-appealable
judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon such Persons.
Section 33.
Counterparts
. This Agreement
may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same instrument.
Section 34.
Descriptive Headings; Interpretation
.
Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof. The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.” Each reference in this Agreement to a period of
time following or after a specified date or event shall be calculated without including such specified date or the day on which
such specified event occurs.
Section 35.
Force Majeure
. Notwithstanding
anything to the contrary contained herein, the Rights Agent shall not be liable for any delays or failures in performance resulting
from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns
or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties
with information storage or retrieval systems, labor difficulties, war, or civil unrest.
* * * * * * *
IN WITNESS WHEREOF,
the parties hereto
have caused this Agreement to be duly executed as of the day and year first above written.
MEDIABISTRO INC.
By:
/s/ Alan M. Meckler
Name: Alan M. Meckler
Title: CEO
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC
By:
_____________________________
Name:
Title:
Exhibit A
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED
STOCK
OF
MEDIABISTRO INC.
Pursuant to Section 151 of the
General Corporation Law of the State
of Delaware
The undersigned do hereby certify that the
following resolution was duly adopted by the Board of Directors of Mediabistro Inc., a Delaware corporation (the “Corporation”),
on July 3, 2013:
RESOLVED
, that pursuant to the authority
vested in the board of directors of the Corporation (the “Board of Directors”) by the Certificate of Incorporation,
as amended (the “Charter”), the Board of Directors does hereby create, authorize and provide for the issue of a series
of Preferred Stock, par value $0.01 per share, of the Corporation, to be designated “Series A Junior Participating Preferred
Stock” (hereinafter referred to as the “Series A Preferred Stock”), initially consisting of 600,000 shares, and
to the extent that the designations, powers, preferences and relative and other special rights and the qualifications, limitations
or restrictions of the Series A Preferred Stock are not stated and expressed in the Charter, does hereby fix and herein state and
express such designations, powers, preferences and relative and other special rights and the qualifications, limitations and restrictions
thereof, as follows (all terms used herein which are defined in the Charter shall be deemed to have the meanings provided therein):
Section 1.
Designation and Amount
.
The shares of such series shall be designated as “Series A Junior Participating Preferred Stock” and the number of
shares constituting such series shall be 600,000.
Section 2.
Dividends and Distributions
.
(A) Subject to the prior and superior rights
of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A Preferred Stock
with respect to dividends, the holders of shares of Series A Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first business
day of January, April, July and October in each year (each such date being referred to herein as a “Quarterly Dividend Payment
Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share
of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject
to the provision for adjustment hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, plus 1,000
times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable
in shares of common stock, par value $0.01 per share, of the Corporation (the “Common Stock”) or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the Corporation shall at any time after July 3, 2013 (the
“Rights Declaration Date”) (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each
case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend
or distribution on the Series A Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend
or distribution on the Common Stock (other than a dividend payable in shares of Common Stock);
provided
,
however
,
that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior to and superior to the shares of Series A Preferred Stock
with respect to dividends, a dividend of $1.00 per share on the Series A Preferred Stock shall nevertheless by payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and
be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date
of issue of such shares of Series A Preferred Stock, unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 60 days prior to the date fixed for the payment thereof.
Section 3.
Voting Rights
.
The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted
to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes
per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein
or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock shall vote collectively
as one class on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise
provided by law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
Section 4.
Certain Restrictions
.
(A) Whenever quarterly dividends or other
dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any
other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of capital stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make
any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any capital stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares
of any such parity stock in exchange for shares of any capital stock of the Corporation ranking junior (either as to dividends
or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of capital stock ranking on a parity with the Series A Preferred Stock, except
in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders
of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time
and in such manner.
Section 5.
Reacquired Shares
.
Any shares of Series A Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued
as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
Section 6.
Liquidation, Dissolution
or Winding Up
.
(A) Upon any liquidation (voluntary or
otherwise), dissolution or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of capital
stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have received $1,000.00 per share, plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that
the holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to be distributed per share to holders of shares
of Common Stock, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution
or winding up (the “Series A Liquidation Preference”). In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares
of Series A Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7.
Consolidation, Merger,
etc
.
In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other property, then in any such case the shares of Series A Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share (subject to the provision for adjustment hereinafter set
forth) equal to 1,000 times the aggregate amount of capital stock, securities, cash and/or any other property (payable in kind),
as the case may be, for which or into which each share of Common Stock is exchanged or changed. In the event the Corporation shall
at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series
A Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 8.
No Redemption
.
The shares of Series A Preferred Stock shall
not be redeemable.
Section 9.
Ranking
.
The Series A Preferred Stock shall rank
junior to all other series of the Corporation’s Preferred Stock as to the payment of dividends and the distribution of assets,
whether or not upon the dissolution, liquidation or winding up of the Corporation, unless the terms of any such series shall provide
otherwise.
Section 10.
Amendment
.
The Charter shall not be amended in any
manner which would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of two-thirds of the outstanding shares of Series A Preferred
Stock, voting separately as a class.
Section 11.
Fractional Shares
.
Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Preferred
Stock.
IN WITNESS WHEREOF, this Certificate of
Designation has been executed on behalf of the Corporation this ______ day of ______, 2013.
MEDIABISTRO INC.
By: _______________________________
Name:
Title:
Exhibit B
[Form of Rights Certificate]
Certificate No. R—
|
Rights
|
NOT EXERCISABLE AFTER JULY 15, 2016 OR EARLIER IF REDEEMED OR
EXCHANGED BY THE COMPANY. THE FOREGOING NOTWITHSTANDING, THE RIGHTS ARE NOT EXERCISABLE AFTER JULY 15, 2014 UNLESS THE HOLDERS
OF A MAJORITY OF THE COMPANY’S OUTSTANDING STOCK HAVE APPROVED THE RIGHTS AGREEMENT PRIOR TO THAT DATE. THE RIGHTS ARE SUBJECT
TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT, AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM
IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BECOME NULL AND VOID. THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY SHALL BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.
Rights Certificate
MEDIABISTRO INC.
This certifies that [ ],
or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights Agreement, dated as of July 3, 2013 (the “Rights Agreement”),
between Mediabistro Inc., a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company,
LLC, a New York limited liability trust company (the “Rights Agent”), to purchase from the Company at any time prior
to 5:00 P.M. (New York City time) on July 15, 2016, or any earlier Expiration Date, as defined in the Rights Agreement, at the
office or offices of the Rights Agent designated for such purpose, or its successors as Rights Agent, one one-thousandth of a fully
paid, nonassessable share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”),
of the Company, at a purchase price of $9.50 per one one-thousandth of a share (the “Purchase Price”), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed. The number
of Rights evidenced by this Rights Certificate (and the number of shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per share set forth above, are the number and Purchase Price as of July 3, 2013, based on the Preferred
Stock as constituted at such date. The Company reserves the right to require prior to the occurrence of a Triggering Event (as
such term is defined in the Rights Agreement) that, upon any exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii)
Event (as such term is defined in the Rights Agreement), if the Rights evidenced by this Rights Certificate are beneficially owned
by (i) an Acquiring Person or an Affiliate or Associate of an Acquiring Person, (ii) any Person or member of such Person’s
Group with whom such Acquiring Person was or is Acting in Concert (as such terms are defined in the Rights Agreement), (iii) a
transferee of any such Acquiring Person, or a Person or member of such Person’s Group with whom such Acquiring Person was
or is Acting in Concert, or (iv) under certain circumstances specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, or a Person or member of such Person’s Group with whom such Acquiring Person
was or is Acting in Concert, such Rights shall become null and void and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the
Purchase Price and the number and kind of shares of Preferred Stock or other securities which may be purchased upon the exercise
of the Rights evidenced by this Rights Certificate are subject to modification and adjustment upon the happening of certain events,
including Triggering Events.
This Rights Certificate is subject to all
of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated
herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of
the Rights Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the office of the Company
and are also available upon written request to the Company.
This Rights Certificate, with or without
other Rights Certificates, upon surrender at the principal office or offices of the Rights Agent designated for such purpose, may
be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of one one-thousandths of a share of Preferred Stock as the Rights evidenced by the Rights
Certificates surrendered shall have entitled such holder to purchase. If this Rights Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Rights Certificate or Rights Certificates for the number of whole
Rights not exercised.
Subject to the provisions of the Rights
Agreement, the Rights evidenced by this Certificate may, in each case at the option of the Company, be (i) redeemed by the
Company at its option at a redemption price of $0.001 per Right or (ii) exchanged in whole or in part for shares of Common
Stock or other securities of the Company. Immediately upon the action of the Board of Directors of the Company authorizing redemption,
the Rights will terminate and the only right of the holders of Rights will be to receive the redemption price.
No fractional shares of Preferred Stock
will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of
one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall
be entitled to vote or receive dividends or be deemed for any purpose the holder of shares of Preferred Stock or of any other securities
of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, to receive notice of meetings or other actions affecting stockholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by
this Rights Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid
or obligatory for any purpose until it shall have been countersigned manually or by facsimile signature by the Rights Agent.
WITNESS the facsimile signature of the proper
officer of the Company.
Dated as of
,
MEDIABISTRO INC.
By:
_________________________________________
Name:
Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC
By:
_________________________________________
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder
if such holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED_______________
hereby sells, assigns
and transfers unto
_______________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint _____________ Attorney, to transfer the within
Rights Certificate on the books of the within-named Company, with full power of substitution.
Dated: _______________, ______
___________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the Financial Industry Regulatory Authority, Inc., or a commercial bank or trust company
having an office or correspondent in the United States.
Certificate
The undersigned hereby certifies by checking
the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is
not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or a Person or member of
such Person’s Group with whom such Acquiring Person was or is Acting in Concert (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge
of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person or member of
such Person’s Group who is, was or subsequently became an Acquiring Person or a Person or member of such Person’s Group
with whom such Acquiring Person was or is Acting in Concert.
Dated: _______________, ______
___________________________
Signature
NOTICE
The signature to the foregoing Assignment
and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration
or enlargement or any change whatsoever.
In the event the certification set forth
above is not completed, the Company will deem the beneficial owner of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or a Person or member of such Person’s Group with whom such Acquiring Person was or is Acting in Concert
(as defined in the Rights Agreement) and, in the case of an Assignment, will affix a legend to that effect on any Right Certificates
issued in exchange for this Rights Certificate.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
TO: MEDIABISTRO INC.
The undersigned hereby irrevocably elects
to exercise
____________
Rights represented by this Rights Certificate to purchase the shares of Preferred Stock issuable upon the
exercise of the Rights (or such other securities of the Company or of any other person which may be issuable upon the exercise
of the Rights) and requests that certificates for such shares (or other securities) be issued in the name of and delivered to:
Please insert social security
or other identifying number: ___________________
(Please print name and address)
If such number of Rights shall not be all
the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in
the name of and delivered to:
Please insert social security
or other identifying number: _______________________
(Please print name and address)
Dated: _______________, ______
___________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the Financial Industry Regulatory Authority, Inc., or a commercial bank or trust company
having an office or correspondent in the United States.
Certificate
The undersigned hereby certifies by checking
the appropriate boxes that:
(1) the Rights evidenced by this Rights
Certificate [ ] are [ ] are not being exercised by or on behalf of a Person or member of such Person’s Group who is or was
an Acquiring Person or a Person or member of such Person’s Group with whom such Acquiring Person is or was Acting in Concert
(as such terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge
of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person or member
of such Person’s Group who is, was or subsequently became an Acquiring Person or a Person or member of such Person’s
Group with whom such Acquiring Person was or is Acting in Concert.
Dated: _______________, ______
___________________________
Signature
NOTICE
The signature to the foregoing Election
to Purchase and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
In the event the certification set forth
above is not completed, the Company will deem the beneficial owner of the Rights evidenced by this Rights Certificate to be an
Acquiring Person or a Person or member of such Person’s Group with whom such Acquiring Person was or is Acting in Concert
(as defined in the Rights Agreement) and, in the case of an Assignment, will affix a legend to that effect on any Right Certificates
issued in exchange for this Rights Certificate.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED
STOCK
On July 3, 2013, the board of directors
of Mediabistro Inc., a Delaware corporation (the “
Company
”), adopted a stockholders rights plan and declared
a dividend distribution of one right for each outstanding share of our common stock to stockholders of record at the close of business
on July 15, 2013. Each right entitles its holder, under the circumstances described below, to purchase from us one one-thousandth
of a share of our Series A Junior Participating Preferred Stock at an exercise price of $9.50 per right, subject to adjustment.
The description and terms of the rights are set forth in a rights agreement between us and American Stock Transfer & Trust
Company, LLC, as rights agent.
Initially, the rights are associated with
our common stock and evidenced by common stock certificates or, in the case of uncertificated shares of common stock, the book-entry
records evidencing the common stock, and are transferable with and only with the underlying shares of common stock. Subject to
certain exceptions, the rights become exercisable and trade separately from the common stock only upon the “distribution
date”, which occurs upon the earlier of:
|
•
|
a public announcement (such date, the “stock acquisition date”) that a person or group of affiliated or associated
persons, along with any persons with whom such person or group has been acting in concert, has become an “Acquiring Person”,
defined, with certain exceptions, as a person or group of persons that acquires or obtains the right to acquire beneficial ownership
of 30% or more of our shares of common stock then outstanding; or
|
|
•
|
ten business days (or later date if determined by our board of directors prior to such time as any person or group becomes
an Acquiring Person) following the commencement or first public announcement of a tender offer or exchange offer that, if consummated,
could result in a person or group, together with any persons with whom such person or group has been acting in concert, becoming
an Acquiring Person.
|
If the Company’s board of directors
determines in good faith that a person became an Acquiring Person inadvertently and such person divests as promptly as practicable
a sufficient number of shares of common stock so that such person would no longer be an Acquiring Person, then such person will
not be deemed to be an Acquiring Person.
Until the distribution date, the surrender
for transfer of any shares of common stock outstanding will also constitute the transfer of the rights associated with those shares.
As soon as practicable after the distribution
date, separate certificates or book-entry statements will be mailed to holders of record of the common stock as of the close of
business on the distribution date. From and after the distribution date, the separate rights certificates or book-entry records
alone will represent the rights. Except as otherwise provided in the rights agreement, only shares of common stock issued prior
to the distribution date will be issued with rights.
The rights are not exercisable until the
distribution date and will expire at the close of business on the third anniversary of the distribution date or any earlier Expiration
Date, as defined in the Rights Agreement, unless earlier redeemed or exchanged by us as described below.
In the event that a person or group becomes
an Acquiring Person (a “flip-in event”), each holder of a right (other than any Acquiring Person and certain related
parties, including those parties with whom the Acquiring Person has been acting in concert, each of whose rights automatically
become null and void) will have the right to receive, upon exercise, common stock having a value equal to two times the exercise
price of the right. If an insufficient number of shares of common stock is available for issuance, then our board of directors
would be required to substitute cash, property or other securities of the Company for the common stock. The rights may not be exercised
following a flip-in event while the Company has the ability to cause the rights to be redeemed, as described later in this summary.
This flip-in right terminates 60 days after the date on which the rights were triggered (and could be exercised pursuant to an
effective registration statement), unless there is an injunction or similar obstacle to the exercise of the rights, in which case
this flip-in right would terminate 60 days after the rights again became exercisable.
For example, at an exercise price of $9.50
per right, each right not owned by an Acquiring Person (or by certain related parties) following a flip-in event would entitle
its holder to purchase $19.00 worth of common stock (or other consideration, as noted above) for $9.50. Assuming that the common
stock had a per share value of $1.90 at that time, the holder of each valid right would be entitled to purchase 10 shares of common
stock for $9.50.
In the event (a “flip-over event”)
that, at any time following the stock acquisition date:
|
•
|
the Company shall consolidate with, or merge with or into, any other entity and the Company is not the continuing or surviving
corporation,
|
|
|
|
|
•
|
any entity engages in a share exchange with or consolidates with, or merges with or into, the Company and the Company is the
continuing or surviving corporation and, in connection with such share exchange, consolidation or merger, all or part of the outstanding
shares of common stock are changed into or exchanged for stock or other securities of any other entity or cash or any other property,
or
|
|
|
|
|
•
|
the Company sells or otherwise transfers more than 50% of the Company’s and its subsidiaries’ (taken as a whole)
assets, cash flow or earning power,
|
each holder of a right (except rights which previously have
been voided as described above) will have the right to receive, upon exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the right. Flip-in events and flip-over events are collectively referred to as “triggering
events”.
The exercise price payable, and the number
of shares of preferred stock or other securities or property issuable, upon exercise of the rights are subject to adjustment from
time to time to prevent dilution:
|
•
|
in the event of a stock dividend on, or a subdivision, combination or reclassification of, the preferred stock,
|
|
|
|
|
•
|
if holders of the preferred stock are granted certain rights, options or warrants to subscribe for preferred stock or convertible
securities at less than the current market price of the preferred stock, or
|
|
|
|
|
•
|
upon the distribution to holders of the preferred stock of evidences of indebtedness or assets (excluding regular quarterly
cash dividends) or of subscription rights or warrants (other than those referred to above).
|
With certain exceptions, no adjustment in
the exercise price will be required until cumulative adjustments amount to at least 1% of the exercise price. No fractional shares
of preferred stock will be issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the preferred
stock on the last trading day prior to the date of exercise.
In general, the Company may redeem the rights
in whole, but not in part, at a price of $0.001 per right (subject to adjustment and payable in cash, common stock or other consideration
deemed appropriate by our board of directors) at any time until ten days following the date the Acquiring Person acquires stock
that triggers the flip-in event. Immediately upon the action of the board of directors authorizing any redemption, the rights will
terminate and the only right of the holders of rights will be to receive the redemption price.
At any time after there is an Acquiring
Person and prior to the acquisition by the Acquiring Person of 50% or more of the outstanding shares of common stock, we may exchange
the rights (other than rights owned by the Acquiring Person and the Acquiring Person’s Group, all of which will have become
void), in whole or in part, at an exchange ratio of one share of common stock, or one one-thousandth of a share of preferred stock
(or of a share of a class or series of our preferred stock having equivalent rights, preferences and privileges), per right (subject
to adjustment).
Until a right is exercised, its holder will
have no rights as a stockholder of the Company, including the right to vote or to receive dividends. While the distribution of
the rights will not result in the recognition of taxable income by us or our stockholders, stockholders may, depending upon the
circumstances, recognize taxable income after a triggering event.
The Company and the rights agent may from
time to time amend or supplement the rights agreement without the consent of the holders of the rights. After the distribution
date, however, no amendment can materially adversely affect the interests of the holders of the rights (other than the Acquiring
Person or any affiliate or associate thereof).
The previous summary of the rights agreement
is a general description only and is qualified in its entirety by the full text of the rights agreement
,
which is attached as Exhibit 4.1 hereto and incorporated by reference herein
.