WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 20, 2008
Tree.com, Inc.
(Exact name of registrant as specified in charter)
Delaware |
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001-34063 |
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26-2414818 |
(State or other jurisdiction |
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(Commission |
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(IRS Employer |
of incorporation) |
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File Number) |
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Identification No.) |
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11115 Rushmore Drive, Charlotte, NC |
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28277 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code: (704) 541-5351
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Following the close of The Nasdaq Stock Market on August 20, 2008, IAC/InterActiveCorp (IAC) completed the spin-off (the Spin-Off) of HSN, Inc. (HSN), Interval Leisure Group, Inc. (ILG), Ticketmaster and Tree.com, Inc. (Tree.com, and collectively with HSN, ILG and Ticketmaster, the Spincos) to IACs shareholders. Prior to the Spin-Off, each of the Spincos was a wholly-owned subsidiary of IAC. In connection with the Spin-Off, IAC and the Spincos entered into the following agreements (collectively, the Spin-Off Agreements):
· a Separation and Distribution Agreement that sets forth the arrangements among IAC and each of the Spincos regarding the principal transactions necessary to separate each of the Spincos from IAC, and that governs certain aspects of the relationship of a Spinco with IAC and the other Spincos after the Spin-Off;
· a Tax Sharing Agreement that governs the respective rights, responsibilities and obligations of IAC and each Spinco after the Spin-Off with respect to tax periods ending on or before the Spin-Off, including tax liabilities and benefits, tax attributes, tax contests and other matters regarding income taxes, other taxes and related tax returns;
· an Employee Matters Agreement that covers a wide range of compensation and benefit issues, including the allocation among IAC and the Spincos of responsibility for the employment and benefit obligations and liabilities of each companys current and former employees (and their dependents and beneficiaries), as well as the provision of health and welfare benefits to employees of each Spinco (the costs of which will be borne by each Spinco) pursuant to IACs employee benefit plans through the end of 2008; and
· a Transition Services Agreement that governs the provision of transition services among IAC and the Spincos.
The section of the prospectus dated August 20, 2008 (the Prospectus) forming part of Post-Effective Amendment No.1 to Tree.coms registration statement on Form S-1, as amended (SEC File No. 333-152700) (the Registration Statement), entitled Certain Relationships and Related Party TransactionsRelationships Among IAC and the Spincos, which describes the material terms of the Spin-Off Agreements, is incorporated herein by reference. These descriptions are qualified by reference in their entirety to the full text of the Spin-Off Agreements, which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4 to this report on Form 8-K.
Also in connection with the Spin-Off, pursuant to a Spinco Assignment and Assumption Agreement (the Assignment and Assumption Agreement), dated as of August 20, 2008, among Tree.com, IAC, Liberty Media Corporation (Liberty) and a subsidiary of Liberty that holds shares of IAC common stock and IAC Class B common stock (together with Liberty, the Liberty Parties), Tree.com (i) assumed from IAC all rights and obligations providing for post-Spin-Off governance and other arrangements at Tree.com under the Spinco Agreement, dated May 13, 2008, among IAC, Liberty and affiliates of Liberty that held shares of IAC common stock and/or Class B common stock at the time such Spinco Agreement was entered into and
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(ii) as required by the Spinco Agreement, entered into a registration rights agreement with the Liberty Parties (the Registration Rights Agreement).
The sections of the Prospectus entitled Certain Relationships and Related Party TransactionsSpinco Agreement and Registration Rights Agreement, which describe the material terms of the Spinco Agreement and the Registration Rights Agreement, respectively, are incorporated herein by reference. These descriptions are qualified by reference in their entirety to the full text of the Spinco Agreement, which is filed as Exhibit 10.4 to the Registration Statement, and the Registration Rights Agreement and Assignment and Assumption Agreement, which are filed as Exhibits 10.5 and 10.6, respectively, to this report on Form 8-K.
ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
Item 1.01 of this report on Form 8-K is incorporated herein by reference. In connection with certain internal restructuring steps implemented in contemplation of and in order for IAC to complete the Spin-Off of Tree.com and the other Spincos, on August 20, 2008, IAC transferred to Tree.com all of the outstanding common stock of LendingTree Holdings Corp., which, directly and through its subsidiaries, holds ownership interests in those entities and assets through which the businesses of Tree.com will be conducted, and the assets of Tree.com are held, following the completion of the Spin-Off.
ITEM 5.01. CHANGE IN CONTROL OF THE REGISTRANT.
Item 1.01 of this report on Form 8-K is incorporated herein by reference. Prior to the completion of the Spin-Off, IAC was the sole stockholder of Tree.com. To implement the Spin-Off, IAC distributed all of the outstanding shares of common stock of Tree.com and the other Spincos to holders of IAC common stock and Class B common stock. While Mr. Barry Diller controlled Tree.com prior to the completion of the Spin-Off indirectly through his control of IAC, Mr. Diller no longer controls Tree.com following the completion of the Spin-Off.
The sections of the Prospectus entitled Certain Relationships and Related Party TransactionsAgreements with Liberty Media Corporation and Spinco Agreement, which describe Tree.coms post-Spin-Off governance arrangements and the material terms of the Spinco Agreement, are incorporated herein by reference. This description of the Spinco Agreement is qualified by reference in its entirety to the full text of the Spinco Agreement, which is filed as Exhibit 10.4 to the Registration Statement.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
Election of Members to the Tree.com Board of Directors
Item 1.01 of this Form 8-K is incorporated herein by reference. On August 20, 2008, immediately preceding the completion of the Spin-Off, the following persons were elected members of the Tree.com Board of Directors: Peter C. Horan, Joseph Levin, Lance Melber and Steven Ozonian .
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The sections of the Prospectus entitled Management of Tree.comDirectors, Committees of the Board of Directors and Certain Relationships and Related Party TransactionsSpinco AgreementRepresentation of Liberty on the Spinco Boards of Directors are incorporated herein by reference.
Tree.com Director Deferred Compensation Plan
On August 20, 2008, the Tree.com Board of Directors and IAC, in its capacity as sole stockholder of Tree.com, approved the Tree.com, Inc. Deferred Compensation Plan for Non-Employee Directors. The section of the Prospectus entitled Management of Tree.comDirector Compensation is incorporated herein by reference. The description set forth in such section is qualified by reference in its entirety to the full text of the plan, which is filed as Exhibit 10.15 to the Registration Statement.
Equity Awards to Tree.com Directors
On August 20, 2008, the Tree.com Board of Directors and IAC, in its capacity as sole stockholder of Tree.com, approved the Tree.com, Inc. 2008 Stock and Annual Incentive Plan, (the 2008 Incentive Plan), which became effective on August 20, 2008. The 2008 Incentive Plan is filed as Exhibit 10.7 to this report on Form 8-K. In connection with the Spin-Off, non-employee members of the Tree.com Board of Directors (Messrs. Horan, Levin, Melber and Ozonian ) were each awarded 6,738 Tree.com restricted stock units under the 2008 Incentive Plan.
The sections of the Prospectus entitled Management of Tree.comDirector Compensation and Description of the Stock and Annual Incentive Plan are incorporated herein by reference.
ITEM 5.03. AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR.
On August 20, 2008, Tree.com amended and restated its certificate of incorporation, effective as of that date. The section of the Prospectus entitled Description of Capital Stock of Tree.com and Item 14. Indemnification of Directors and Officers of the Registration Statement, which include a description of the provisions of the amended and restated certificate of incorporation (the Amended and Restated Charter), are incorporated herein by reference. This description is qualified by reference in its entirety to the full text of the Amended and Restated Charter, which is filed as Exhibit 3.1 to this report on Form 8-K.
On August 20, 2008, Tree.coms Board of Directors approved the amendment and restatement of Tree.coms by-laws, effective immediately prior to the Spin-Off. The section of the Prospectus entitled Description of Capital Stock of Tree.com and Item 14. Indemnification of Directors and Officers of the Registration Statement, which include a description of the provisions of the amended and restated by-laws (the By-Laws) , are incorporated herein by reference. This description is qualified by reference in its entirety to the full text of the By-Laws, which are filed as Exhibit 3.2 to this report on Form 8-K.
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ITEM 5.06. CHANGE IN SHELL COMPANY STATUS.
Item 2.01 of this Form 8-K is incorporated herein by reference. Following the transactions described in Item 2.01 of this report on Form 8-K, Tree.com is no longer a shell company, as defined in Rule 12b-2 under the Securities Exchange Act of 1934.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
Item 1.01 of this report on Form 8-K is incorporated by reference. The financial statements and pro forma financial information required to be filed under Item 9.01 of this report on Form 8-K are included in the Prospectus. The Exhibit Index filed herewith is incorporated by reference herein.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Tree.com, Inc. |
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By: |
/s/ Scott Cammarn |
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Name: Scott Cammarn |
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Title: Senior Vice President and |
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General Counsel |
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Date: August 25, 2008 |
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EXHIBIT LIST
Exhibit No. |
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Description |
3.1 |
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Amended and Restated Certificate of Incorporation ofTree.com, Inc. |
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3.2 |
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Amended and Restated By-Laws of Tree.com, Inc. |
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10.1 |
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Separation and Distribution Agreement, dated as of August 20, 2008, by and among IAC/InterActiveCorp, HSN, Inc., Interval Leisure Group, Inc., Ticketmaster and Tree.com, Inc. |
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10.2 |
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Tax Sharing Agreement, dated as of August 20, 2008, by and among IAC/InterActiveCorp, HSN, Inc., Interval Leisure Group, Inc., Ticketmaster and Tree.com, Inc. |
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10.3 |
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Employee Matters Agreement, dated as of August 20, 2008, by and among IAC/InterActiveCorp, HSN, Inc., Interval Leisure Group, Inc., Ticketmaster and Tree.com, Inc. |
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10.4 |
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Transition Services Agreement, dated as of August 20, 2008, by and among IAC/InterActiveCorp, HSN, Inc., Interval Leisure Group, Inc., Ticketmaster and Tree.com, Inc. |
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10.5 |
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Registration Rights Agreement, dated as of August 20, 2008, among Tree.com, Inc., Liberty Media Corporation and Liberty USA Holdings, LLC. |
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10.6 |
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Spinco Assignment and Assumption Agreement, dated as of August 20, 2008, among IAC/InterActiveCorp, Tree.com, Inc., Liberty Media Corporation and Liberty USA Holdings, LLC. |
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10.7 |
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Tree.com, Inc. 2008 Stock and Annual Incentive Plan. |
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Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
TREE.COM, INC.
Tree.com, Inc. (the Corporation), a corporation organized and existing under the laws of the State of Delaware, hereby certifies that:
1. The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on April 14, 2008.
2. The name under which the Corporation was initially incorporated is Tree.com, Inc.
3. This Amended and Restated Certificate of Incorporation restates and amends in its entirety the Certificate of Incorporation of the Corporation.
4. This Amended and Restated Certificate of Incorporation was duly adopted by the Board of Directors of the Corporation and by the sole stockholder of the Corporation in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the DGCL).
5. The text of the Certificate of Incorporation of the Corporation is hereby amended and restated, effective as of 11:59 a.m., Eastern Daylight Time, on August 20, 2008, to read in full as follows:
FIRST : The name of the corporation is Tree.com, Inc. (the Corporation).
SECOND : The address of the registered office of the Corporation in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree Drive, Suite 101, City of Dover, County of Kent, State of Delaware 19904. The name of the registered agent of the Corporation at that address is National Registered Agents, Inc.
THIRD
: The purpose of the Corporation
is to engage in any lawful act or activity for which a corporation may be
organized under the General Corporation Law of the State
of Delaware (the DGCL).
FOURTH : A. The total number of shares of all classes of stock which the Corporation shall have authority to issue is fifty-five million (55,000,000), consisting of fifty million (50,000,000) shares of Common Stock, par value one cent ($.01) per share (the Common Stock) and five million (5,000,000) shares of Preferred Stock, par value one cent ($.01) per share (the Preferred Stock).
B. The board of directors (the Board) is authorized, subject to any limitations prescribed by law, to provide for the issuance of shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of Delaware (such certificate being hereinafter referred to as a Preferred Stock Designation), to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences, and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote thereon, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any Preferred Stock Designation.
C. Each outstanding share of Common Stock shall
entitle the holder thereof to one vote on each matter properly submitted to the
stockholders of the Corporation for their vote;
provided
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however
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that, except as otherwise required by law, holders of Common Stock shall not be
entitled to vote on any amendment to this Certificate of Incorporation
(including any Preferred Stock Designation relating to any series of Preferred
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Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including any Preferred Stock Designation relating to any series of Preferred Stock).
FIFTH : The Corporation elects not to be governed by Section 203 of the DGCL.
SIXTH : The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
A. The business and affairs of the Corporation shall be managed by or under the direction of the Board. In addition to the powers and authority expressly conferred upon them by statute or by this Certificate of Incorporation or the by-laws of the Corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.
B. The directors of the Corporation need not be elected by written ballot unless the by-laws so provide.
C. Subject to the rights of the holders of any series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.
D. Except
as otherwise required by law and subject to the rights of the holders
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of any series of Preferred Stock, special meetings of the stockholders of the Corporation may be called only by or at the direction of the Board or by a person specifically designated with such authority by the Board. Stockholders are not entitled to call special meetings.
SEVENTH : A. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, the number of directors shall be fixed from time to time exclusively by the Board pursuant to a resolution adopted by a majority of the Board.
B. Subject to the rights of the holders of any series of Preferred Stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board resulting from death, resignation, retirement, disqualification, removal from office or other cause shall, unless otherwise required by law or by resolution of the Board, be filled only by a majority vote of the directors then in office, though less than a quorum (and not by stockholders). Any director so chosen shall hold office for a term expiring at the next annual meeting of stockholders and until such directors successor shall have been duly elected and qualified, or until such directors earlier death, resignation, retirement, disqualification, removal from office or other reason.
C. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the by-laws of the Corporation.
EIGHTH : The Board is expressly empowered to adopt, amend or repeal by-laws of the Corporation.
NINTH
: A director of the Corporation shall
not be personally liable to the
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Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the directors duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
Any repeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification.
TENTH : The Corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner prescribed by the laws of the State of Delaware and all rights conferred upon stockholders are granted subject to this reservation.
IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be executed by its duly authorized officer this 20th day of August, 2008.
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TREE.COM, INC. |
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/s/ Scott A. Cammarn |
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By: |
Scott A. Cammarn |
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Title: |
Corporate Secretary |
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Exhibit 3.2
AMENDED AND RESTATED BY-LAWS
OF
TREE.COM, INC.
(as of August 20, 2008)
ARTICLE I - OFFICES
Section 1 . Registered Office .
The registered office of Tree.com, Inc. (the Corporation) shall be located in the City of Dover, State of Delaware, or such other place as the board of directors (the Board) may from time to time determine.
Section 2 . Other Offices .
The Corporation may have offices at such other places, both within and without the State of Delaware, as the Board may from time to time determine or the business of the Corporation may require.
ARTICLE II - STOCKHOLDERS
Section 1 . Annual Meeting .
(1) An annual meeting of the stockholders, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, on such date, and at such time as the Board shall each year fix.
(2) Nominations of persons for election to the Board and the proposal of business to be transacted by the stockholders may be made at an annual meeting of stockholders (a) pursuant to the Corporations proxy materials with respect to such meeting, (b) by or at the direction of the Board, or (c) by any stockholder of record of the Corporation (the Record Stockholder) at the time of the giving of the notice required in the following paragraph, who is
entitled to vote at the meeting and who has complied with the notice procedures set forth in this section. For the avoidance of doubt, clause (c) above shall be the exclusive means for a stockholder to make nominations and propose business (other than business included in the Corporations proxy materials pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (such act, and the rules and regulations promulgated thereunder, the Exchange Act)) before an annual meeting of stockholders.
(3) For nominations or business to be properly brought before an annual meeting by a Record Stockholder pursuant to clause (c) of the foregoing paragraph, (A) the Record Stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, (B) any such business must be a proper matter for stockholder action under Delaware law, and (C) the Record Stockholder and the beneficial owner, if any, on whose behalf any such proposal or nomination is made, must have acted in accordance with the representations set forth in the Solicitation Statement required by these By-Laws. To be timely, a Record Stockholders notice shall be received by the Secretary at the principal executive offices of the Corporation not less than 60 or more than 90 days prior to the first anniversary (the Anniversary) of the date for the preceding years annual meeting of stockholders; provided, however, that if the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding years annual meeting, or if the Corporation did not hold an annual meeting during the preceding year, notice by the Record Stockholder to be timely must be so delivered not later than the close of business on the later of (i) the 90th day prior to such annual meeting or (ii) the 10th day following the day on which public announcement of the date of such meeting is first made. Such Record Stockholders notice shall set forth:
(a) if such notice pertains to the nomination of directors, as to each person whom the
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Record Stockholder proposes to nominate for election or reelection as a director all information relating to such person as would be required to be disclosed in solicitations of proxies for the election of such nominees as directors pursuant to Regulation 14A under the Exchange Act, and such persons written consent to serve as a director if elected;
(b) as to any business that the Record Stockholder proposes to bring before the meeting, a brief description of such business, the reasons for conducting such business at the meeting and any material interest in such business of such Record Stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and
(c) as to the Record Stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such Record Stockholder, as they appear on the Corporations books, and of such beneficial owner,
(ii) (A) the class, series, and number of shares of the Corporation that are owned beneficially and of record by such Record Stockholder and such beneficial owner, (B) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a Derivative Instrument) directly or indirectly owned beneficially by such stockholder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the
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Corporation, (C) any proxy, contract, arrangement, understanding, or relationship pursuant o which such stockholder has a right to vote any shares of any security of the Company, (D) any short interest in any security of the Company (for purposes of this By-law a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (E) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder that are separated or separable from the underlying shares of the Corporation, (F) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (G) any performance-related fees (other than an asset-based fee) that such stockholder is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such stockholders immediate family sharing the same household (which information shall be supplemented by such stockholder and beneficial owner, if any, not later than 10 days after the record date for the meeting to disclose such ownership as of the record date) and
(iii) a statement whether or not such Record Stockholder or beneficial owner will deliver a proxy statement and form of proxy to holders of, in the case of a proposal, at least the percentage of voting power of all of the shares of capital stock
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of the Corporation required under applicable law to carry the proposal or, in the case of a nomination or nominations, at least the percentage of voting power of all of the shares of capital stock of the Corporation reasonably believed by such Record Stockholder or beneficial holder to be sufficient to elect the nominee or nominees proposed to be nominated by such Record Stockholder (such statement, a Solicitation Statement).
(4) Notwithstanding anything in the second sentence of the third paragraph of this Section 1 to the contrary, in the event that the number of directors to be elected to the Board is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board made by the Corporation at least 55 days prior to the Anniversary, a Record Stockholders notice required by this By-Law shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.
(5) A person shall not be eligible for election or re-election as a director at an annual meeting unless (i) the person is nominated by a Record Stockholder in accordance with Section 1(2)(c) or (ii) the person is nominated by or at the direction of the Board. Only such business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this section. The chairman of the meeting shall have the power and the duty to determine whether a nomination or any business proposed to be brought before the meeting has been made in accordance with the procedures set forth in these By-Laws and, if any proposed nomination or business is not in compliance with these
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By-Laws, to declare that such defectively proposed business or nomination shall not be presented for stockholder action at the meeting and shall be disregarded.
(6) For purposes of these By-Laws, public announcement shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(7) Notwithstanding the foregoing provisions of this Section 1, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to matters set forth in this Section 1. Nothing in this Section 1 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporations proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Section 2 . Special Meetings .
(1) Special meetings of the stockholders, other than those required by statute, may be called at any time only by or at the direction of the Board or by a person specifically designated with such authority by the Board. The Board may postpone or reschedule any previously scheduled special meeting. Stockholders are not entitled to call special meetings.
(2) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporations notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporations notice of meeting (a) by or at the direction of the Board or (b) by any stockholder of record of the Corporation who is a stockholder of record at the time of giving of notice provided for in this paragraph, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in Section 1 of this Article II.
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Nominations by stockholders of persons for election to the Board may be made at such a special meeting of stockholders only if the stockholders notice required by the third paragraph of Section 1 of this Article II shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. A person shall not be eligible for election or reelection as a director at a special meeting unless the person is nominated (i) by or at the direction of the Board or (ii) by a Record Stockholder in accordance with the notice procedures set forth in Section 1 of this Article II.
(3) Notwithstanding the foregoing provisions of this Section 2, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to matters set forth in this Section 2. Nothing in this Section 2 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporations proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Section 3 . Notice of Meetings .
Notice of the place, if any, date, and time of all meetings of the stockholders, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, shall be given, not less than ten (10) nor more than sixty (60) days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as otherwise provided herein or required by law (meaning, here and hereinafter, as required from time to time by the Delaware General Corporation Law (the DGCL), a national securities exchange, or the Certificate of Incorporation of the Corporation). Meetings may be held without notice if all stockholders entitled to vote are present (unless any such
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stockholders are present for the purpose of objecting to the meeting as lawfully called or convened), or if notice is waived by those not present. Any previously scheduled meeting of the stockholders may be postponed, and (unless the Certificate of Incorporation otherwise provides) any special meeting of the stockholders may be canceled, by resolution of the Board upon public notice given prior to the time previously scheduled for such meeting of stockholders.
When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty (30) days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, notice of the place, if any, date, and time of the adjourned meeting and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.
Section 4 . Quorum .
At any meeting of the stockholders, the holders of a majority of the voting power of all of the shares of the stock entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law. Where a separate vote by a class or classes or series is required, a majority of the voting power of the shares of such class or classes or series present in person or represented by proxy shall constitute a quorum entitled to take action with respect to that vote on
8
that matter.
If a quorum shall fail to attend any meeting, (a) the chairman of the meeting or (b) the holders of a majority of the voting power of all of the shares of the stock present in person or by proxy may adjourn the meeting to another place, if any, date, or time.
Section 5 . Organization .
Such person as the Board may have designated or, in the absence of such a person, the Chairman of the Board or, in his or her absence, such person as may be chosen by the holders of a majority of the voting power of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as chairman of the meeting. The Board may adopt by resolution such rules or regulations for the conduct of meetings of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the chairman of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to stockholders of record, their duly authorized and constituted proxies or such other persons as the chairman shall permit; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof, and (e) limitations on the time allotted to questions or comments by participants. In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such person as the chairman of the meeting appoints.
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Section 6 . Conduct of Business .
The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him or her in order. The chairman shall have the power to adjourn the meeting to another place, if any, date and time. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting.
Section 7 . Proxies and Voting .
At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.
The Corporation may, and to the extent required by law, shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting may, and to the extent required by law, shall, appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality
10
and according to the best of his or her ability. Every vote taken by ballots shall be counted by a duly appointed inspector or inspectors.
All elections shall be determined by a plurality of the votes cast, and except as otherwise required by law, all other matters shall be determined by a majority of the votes cast affirmatively or negatively.
Subject to the rights of the holders of any series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.
Section 8 . Stock List .
A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in his or her name, shall be open to the examination of any such stockholder for a period of at least 10 days prior to the meeting in the manner provided by law.
The stock list shall also be open to the examination of any stockholder during the whole time of the meeting as provided by law. This list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.
ARTICLE III - BOARD OF DIRECTORS
Section 1 . Number, Election and Term of Directors .
Subject to the rights of the holders of any series of preferred stock to elect directors under specified circumstances, the number of directors shall be fixed from time to time exclusively by the Board pursuant to a resolution adopted by a majority of the Board.
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Section 2 . Newly Created Directorships and Vacancies .
Subject to the rights of the holders of any series of preferred stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board resulting from death, resignation, retirement, disqualification, removal from office or other cause shall, unless otherwise required by law or by resolution of the Board, be filled only by a majority vote of the directors then in office, though less than a quorum (and not by stockholders). No decrease in the number of authorized directors shall shorten the term of any incumbent director.
Section 3 . Regular Meetings .
Regular meetings of the Board shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board and publicized among all directors.
Section 4 . Special Meetings .
Special meetings of the Board may be called by the Chairman of the Board, the CEO or by a majority of the Board and shall be held at such place, on such date, and at such time as they or he or she shall fix. Notice of the place, date, and time of each such special meeting shall be given to each director by whom it is not waived by mailing written notice not less than five (5) days before the meeting or by telephone or by telegraphing or telexing or by facsimile or electronic transmission of the same not less than twenty-four (24) hours before the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting. A meeting may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in accordance with Section 2 of Article VII of these By-Laws.
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Section 5 . Quorum .
At any meeting of the Board, a majority of the total number of directors shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date, or time, without further notice or waiver thereof.
Section 6 . Participation in Meetings By Conference Telephone.
Members of the Board, or of any committee thereof, may participate in a meeting of such Board or committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting.
Section 7 . Conduct of Business .
At any meeting of the Board, business shall be transacted in such order and manner as the Board may from time to time determine, and all matters shall be determined by the vote of a majority of the directors present, except as otherwise provided herein or required by law. Action may be taken by the Board without a meeting if all members thereof consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 8 . Compensation of Directors .
Unless otherwise restricted by the certificate of incorporation, the Board shall have the authority to fix the compensation of the directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board and may be paid a fixed sum for attendance at each meeting of the Board or paid a stated salary or paid other compensation as a director. No such
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payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed compensation for such service.
ARTICLE IV COMMITTEES; CONDUCT OF BUSINESS; CHAIRMAN
Section 1 . Committees of the Board .
The Board may from time to time designate committees of the Board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board and shall, for those committees and any others provided for herein, elect a director or directors to serve as the member or members, designating, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of any committee and any alternate member in his or her place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by unanimous vote appoint another member of the Board to act at the meeting in the place of the absent or disqualified member.
Section 2 . Conduct of Business .
Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; one-third (1/3) of the members, but never less than two members, shall constitute a quorum, unless the committee shall consist of one (1) member, in which event one (1) member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with
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the minutes of the proceedings of such committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 3 . Chairman of the Board .
The Board may elect one of its members to be Chairman of the Board and may fill any vacancy in the position of Chairman of the Board at such time and in such manner as the Board shall determine. The Chairman of the Board may but need not be an officer of or employed by the Corporation. Unless the resolutions appointing the Chairman of the Board specify that the Chairman of the Board shall be an officer, the Chairman of the Board shall not be an officer. The Chairman of the Board, if such be elected, shall, if present, preside at all meetings of the Board and exercise and perform such other powers and duties as be from time to time assigned to him by the Board.
ARTICLE V OFFICERS
Section 1 . Generally .
The Corporation shall have a Chief Executive Officer (the CEO), a Secretary, a Treasurer and such other officers as may from time to time be appointed by the Board, all of whom shall perform such duties as from time to time may be prescribed by the Board. Any two (2) or more offices may be held by the same person. Officers shall be elected by the Board, which shall consider that subject at its first meeting after every annual meeting of stockholders. Each officer shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any number of offices may be held by the same person. The salaries of officers elected by the Board shall be fixed from time to time by the Board or by such officers as
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may be designated by resolution of the Board.
Section 2 . The Chief Executive Officer .
Subject to the provisions of these By-laws and to the direction of the Board, the CEO shall have the responsibility for the general management and control of the business and affairs of the Corporation and shall perform all duties and have all powers which are commonly incident to the office of chief executive or which are delegated to him or her by the Board. He or she shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized and shall have general supervision and direction of all of the other officers, employees and agents of the Corporation.
Section 3 . President .
The Board or the CEO may elect a President of the Corporation to have such duties and responsibilities as from time to time may be assigned to him by the CEO or the Board. He or she shall have general responsibility for the management and control of the operations of the Corporation and shall perform all duties and have all powers which are commonly incident to the office of chief operating officer or which are delegated to him or her by the Board or the CEO. Subject to the direction of the Board and the Chairman of the Board, the President shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized, and to all acts which are authorized by the CEO or the Board, and shall, in general, have such other duties and responsibilities as are assigned consistent with the authority of President of a corporation.
Section 4 . Chief Financial Officer .
The Chief Financial Officer (if any) shall act in an executive financial capacity. He shall assist the CEO and the President, if any, in the general supervision of the Corporations financial policies and affairs. Subject to the direction of the Board and the Chairman of the Board,
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the Chief Financial Officer shall have the power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized and shall, in general, have such other duties and responsibilities as are assigned consistently with the authority of a Chief Financial Officer of a corporation.
Section 5 . Vice Presidents .
The Board or the CEO may from time to time name one or more Vice Presidents that may include the designation of Executive Vice Presidents or Senior Vice Presidents all of whom shall perform such duties as from time to time may be assigned to him by the CEO or the Board.
Section 6 . Treasurer .
The Treasurer shall have the responsibility for maintaining the financial records of the Corporation. He or she shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions and of the financial condition of the Corporation. The Treasurer shall also perform such other duties as the Board may from time to time prescribe.
Section 7 . Secretary .
The Secretary shall issue all authorized notices for, and shall keep minutes of, all meetings of the stockholders and the Board. He or she shall have charge of the corporate books and shall perform such other duties as the Board may from time to time prescribe.
Section 8 . Delegation of Authority .
The Board may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.
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Section 9 . Removal .
Any officer of the Corporation may be removed at any time, with or without cause, by the Board.
ARTICLE VI - STOCK
Section 1 . Certificates of Stock .
The stock of the Corporation shall be represented by certificates, provided that the Board may provide by resolution for any or all of the stock to be uncertificated shares. Each holder of stock represented by certificates shall be entitled to a certificate signed by, or in the name of the Corporation by, the Chairman or President, if any (or any Vice President), and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, certifying the number of shares owned by him or her. Any or all of the signatures on the certificate may be by facsimile. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer at the date of issue.
Section 2 . Record Date .
In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, or to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may, except as otherwise required by law, fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of any meeting of stockholders, nor more than sixty (60) days prior to the time for such other action as hereinbefore described; provided, however, that if no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a
18
meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, and, for determining stockholders entitled to receive payment of any dividend or other distribution or allotment of rights or to exercise any rights of change, conversion or exchange of stock or for any other purpose, the record date shall be at the close of business on the day on which the Board adopts a resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.
Section 3 . Lost, Stolen or Destroyed Certificates.
In the event of the loss, theft or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board may establish concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity. When authorizing such issue of new certificate(s), the Board may, in its discretion and as a condition precedent to the issuance thereof, require the owner of the lost or destroyed certificate(s), or such owners legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate(s) alleged to have been lost or destroyed.
Section 4 . Regulations .
The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board may establish.
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ARTICLE VII - NOTICES
Section 1 . Notices .
If mailed, notice to stockholders shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholders address as it appears on the records of the Corporation. Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the DGCL.
Section 2 . Waivers .
A written waiver of any notice, signed by a stockholder or director, or waiver by electronic transmission by such person, whether given before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in such a waiver. Attendance at any meeting shall constitute waiver of notice except attendance for the sole purpose of objecting to the transaction of business because the meeting is not lawfully called or convened.
ARTICLE VIII - MISCELLANEOUS
Section 1 . Facsimile Signatures .
In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these By-laws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board or a committee thereof.
Section 2 . Corporate Seal .
The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization, and the words Corporate Seal, Delaware. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.
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Section 3 . Reliance upon Books, Reports and Records .
Each director, each member of any committee designated by the Board, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board so designated, or by any other person as to matters which such director or committee member reasonably believes are within such other persons professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
Section 4 . Fiscal Year .
The fiscal year of the Corporation shall be as fixed by the Board.
Section 5 . Time Periods .
In applying any provision of these By-laws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.
ARTICLE IX - INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1 . Indemnification .
(A) Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a proceeding), by reason of the fact that he or a person of whom he is the legal representative is or was, at any time during which this By-Law is in effect (whether or not such person continues to serve in such capacity at the time any indemnification or payment of expenses pursuant hereto is sought or at the time any proceeding relating thereto exists or is
21
brought), a director or officer of the Corporation, or is or was at any such time serving at the request of the Corporation as a director, officer or trustee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Corporation (each such person, an indemnitee), whether the basis of such proceeding is alleged action in an official capacity as a director, officer or trustee or in any other capacity while serving as a director, officer or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer or trustee and shall inure to the benefit of his heirs, executors and administrators; provided, however, that except as provided in paragraph (C) of this By-Law, the Corporation shall indemnify any such indemnitee seeking indemnification in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board. The right to indemnification conferred in this By-Law shall include the right to be paid by the Corporation the expenses (including attorneys fees) incurred in defending any such proceeding in advance of its final disposition, such advances to be paid by the Corporation within twenty (20) days after the receipt by the Corporation of a statement or statements from the claimant requesting such advance or advances from time to time; provided, however, that if the DGCL requires, the payment of such expenses incurred by an indemnitee in his capacity as a director or officer (and not in any other
22
capacity in which service was or is rendered by such indemnitee while a director or officer, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter, the undertaking) by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal (a final disposition) that such indemnitee is not entitled to be indemnified for such expenses under this By-Law or otherwise. The rights conferred upon indemnitees in this By-Law shall be contract rights that vest at the time of such persons service to or at the request of the Corporation and such rights shall continue as to an indemnitee who has ceased to be a director, officer or trustee and shall inure to the benefit of the indemnitees heirs, executors and administrators.
(B) To obtain indemnification under this By-Law, a claimant shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine whether and to what extent the claimant is entitled to indemnification. Upon written request by a claimant for indemnification pursuant to the first sentence of this paragraph (B), a determination, if required by applicable law, with respect to the claimants entitlement thereto shall be made as follows: (i) by the Board by a majority vote of the Disinterested Directors (as hereinafter defined), even though less than a quorum, or (ii) by a committee of Disinterested Directors designated by majority vote of the Disinterested Directors, even though less than a quorum, or (iii) if there are no Disinterested Directors or the Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to the claimant, or (iv) if a quorum of Disinterested Directors so directs, by the stockholders of the Corporation. If it is so determined that the claimant is entitled to indemnification, payment to the claimant shall be made within 10 days after such
23
determination.
(C) If a claim under paragraph (A) of this By-Law is not paid in full by the Corporation within thirty (30) days after a written claim pursuant to paragraph (B) of this By-Law has been received by the Corporation (except in the case of a claim for advancement of expenses, for which the applicable period is twenty (20) days), the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct which makes it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including the Disinterested Directors, Independent Counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including the Disinterested Directors, Independent Counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.
(D) If a determination shall have been made pursuant to paragraph (B) of this By-Law that the claimant is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding commenced pursuant to paragraph (C) of this By-Law.
(E) The Corporation shall be precluded from asserting in any judicial proceeding
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commenced pursuant to paragraph (C) of this By-Law that the procedures and presumptions of this By-Law are not valid, binding and enforceable and shall stipulate in such proceeding that the Corporation is bound by all the provisions of this By-Law.
(F) The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this By-Law (i) shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-Laws, agreement, vote of stockholders or Disinterested Directors or otherwise and (ii) cannot be terminated by the Corporation, the Board or the stockholders of the Corporation with respect to a persons service prior to the date of such termination. Any amendment, modification, alteration or repeal of this By-Law that in any way diminishes, limits, restricts, adversely affects or eliminates any right of an indemnitee or his successors to indemnification, advancement of expenses or otherwise shall be prospective only and shall not in any way diminish, limit, restrict, adversely affect or eliminate any such right with respect to any actual or alleged state of facts, occurrence, action or omission then or previously existing, or any action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such actual or alleged state of facts, occurrence, action or omission.
(G) The Corporation may grant rights to indemnification, and rights to be paid by the Corporation the expenses incurred in defending any proceeding in advance of its final disposition, to any current or former employee or agent of the Corporation to the fullest extent of the provisions of this By-Law with respect to the indemnification and advancement of expenses of current or former directors and officers of the Corporation.
(H) If any provision or provisions of this By-Law shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (1) the validity, legality and enforceability of the
25
remaining provisions of this By-Law (including, without limitation, each portion of any paragraph of this By-Law containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (2) to the fullest extent possible, the provisions of this By-Law (including, without limitation, each such portion of any paragraph of this By-Law containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
(I) For purposes of this By-Law:
(i) Disinterested Director means a director of the Corporation who is not and was not a party to the matter in respect of which indemnification is sought by the claimant.
(ii) Independent Counsel means a law firm, a member of a law firm, or an independent practitioner, selected by the Disinterested Directors (if such Disinterested Directors so exist), that is experienced in matters of corporation law and shall include any person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the Corporation or the claimant in an action to determine the claimants rights under this By-Law.
(J) Any notice, request or other communication required or permitted to be given to the Corporation under this By-Law shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, postage prepaid, return receipt requested, to the Secretary of the Corporation and shall be effective only upon receipt by the Secretary.
Section 2 . Insurance .
The Corporation may maintain insurance, at its expense, to protect itself and any
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current or former director, officer, employee or agent of the Corporation and any current or former director, officer, trustee, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including any person who serves or served in any such capacity with respect to any employee benefit plan maintained or sponsored by the Corporation, against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.
ARTICLE X - AMENDMENTS
In furtherance and not in limitation of the powers conferred by law, the Board is expressly authorized to adopt, amend and repeal these By-Laws subject to the power of the holders of capital stock of the Corporation to adopt, amend or repeal the By-Laws.
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Exhibit 10.1
SEPARATION AND DISTRIBUTION AGREEMENT
by and among
IAC/INTERACTIVECORP,
HSN, INC.,
INTERVAL LEISURE GROUP, INC.,
TICKETMASTER
and
TREE.COM, INC.
DATED AS OF AUGUST 20, 2008
TABLE OF CONTENTS
ARTICLE I |
INTERPRETATION |
2 |
1.01. |
Definitions |
2 |
1.02. |
Schedules |
19 |
1.03. |
Effective Time; Suspension |
20 |
|
|
|
ARTICLE II |
THE SEPARATION |
20 |
2.01. |
Separation |
20 |
2.02. |
Implementation |
21 |
2.03. |
Transfer of Spun Assets; Assumption of Spun Liabilities |
21 |
2.04. |
TM Assets |
21 |
2.05. |
Interval Assets |
22 |
2.06. |
HSN Assets |
23 |
2.07. |
Tree Assets |
24 |
2.08. |
Deferred Spun Assets |
25 |
2.09. |
Excluded Assets |
25 |
2.10. |
Liabilities |
25 |
2.11. |
Third Party Consents and Government Approvals |
27 |
2.12. |
Preservation of Agreements |
27 |
2.13. |
Ancillary Agreements |
27 |
2.14. |
Resignations |
28 |
2.15. |
Cooperation |
28 |
2.16. |
Intercompany Accounts Among Groups |
28 |
2.17. |
Disclaimer of Representations and Warranties |
28 |
|
|
|
ARTICLE III |
DEFERRED SEPARATION TRANSACTIONS |
29 |
3.01. |
Deferred Transfer Assets |
29 |
3.02. |
Unreleased Liabilities |
30 |
3.03. |
No Additional Consideration |
30 |
|
|
|
ARTICLE IV |
COVENANTS |
31 |
4.01. |
General Covenants |
31 |
4.02. |
Covenants of the Spincos |
31 |
4.03. |
Spinco Common Stock Escrow Accounts |
32 |
4.04. |
Cash Balance True-Ups |
33 |
4.05. |
Non-Solicitation |
35 |
|
|
|
ARTICLE V |
THE DISTRIBUTION |
35 |
5.01. |
Conditions to the Distribution |
35 |
5.02. |
Distribution of Spinco Common Stock |
36 |
5.03. |
Fractional Shares |
37 |
5.04. |
Actions in Connection with the Distributions |
37 |
5.05 |
Treatment of Integrated Warrant |
38 |
i
ARTICLE VI |
MUTUAL RELEASES; INDEMNIFICATION |
39 |
6.01. |
Release of Pre-Distribution Claims |
39 |
6.02. |
Indemnification by Spincos |
43 |
6.03. |
Indemnification by IAC |
43 |
6.04. |
Procedures for Indemnification of Third Party Claims |
44 |
6.05. |
Procedures for Indemnification of Direct Claims |
46 |
6.06. |
Adjustments to Liabilities |
46 |
6.07. |
Payments |
47 |
6.08. |
Contribution |
47 |
6.09. |
Remedies Cumulative |
47 |
6.10. |
Survival of Indemnities |
47 |
6.11. |
Shared Liabilities |
47 |
|
|
|
ARTICLE VII |
INSURANCE |
48 |
7.01. |
Insurance Matters |
48 |
|
|
|
ARTICLE VIII |
EXCHANGE OF INFORMATION; CONFIDENTIALITY |
49 |
8.01. |
Agreement for Exchange of Information; Archives |
49 |
8.02. |
Ownership of Information |
50 |
8.03. |
Compensation for Providing Information |
51 |
8.04. |
Record Retention |
51 |
8.05. |
Other Agreements Providing for Exchange of Information |
51 |
8.06. |
Production of Witnesses; Records; Cooperation |
51 |
8.07. |
Confidentiality |
52 |
8.08. |
Protective Arrangements |
53 |
8.09. |
Disclosure of Third Party Information |
53 |
|
|
|
ARTICLE IX |
DISPUTE RESOLUTION |
54 |
9.01. |
Interpretation; Agreement to Resolve Disputes |
54 |
9.02. |
Dispute Resolution; Mediation |
54 |
9.03. |
Arbitration |
55 |
9.04. |
Costs |
56 |
9.05. |
Continuity of Service and Performance |
56 |
|
|
|
ARTICLE X |
FURTHER ASSURANCES |
56 |
10.01 |
Further Assurances |
56 |
|
|
|
ARTICLE XI |
CERTAIN OTHER MATTERS |
57 |
11.01. |
Auditors and Audits; Annual and Quarterly Financial Statements and Accounting |
57 |
|
|
|
ARTICLE XII |
SOLE DISCRETION OF IAC; TERMINATION |
59 |
12.01. |
Sole Discretion of IAC |
59 |
12.02. |
Termination |
59 |
|
|
|
ARTICLE XIII |
MISCELLANEOUS |
60 |
13.01. |
Limitation of Liability |
60 |
ii
13.02. |
Counterparts |
60 |
13.03. |
Entire Agreement |
60 |
13.04. |
Construction |
60 |
13.05. |
Signatures |
61 |
13.06. |
Assignability |
61 |
13.07. |
Third Party Beneficiaries |
61 |
13.08. |
Payment Terms |
62 |
13.09. |
Governing Law |
62 |
13.10. |
Notices |
62 |
13.11. |
Severability |
63 |
13.12. |
Publicity |
63 |
13.13. |
Survival of Covenants |
64 |
13.14. |
Waivers of Default; Conflicts |
64 |
13.15. |
Amendments |
64 |
iii
SEPARATION AND DISTRIBUTION AGREEMENT
This SEPARATION AND DISTRIBUTION AGREEMENT, dated as of AUGUST 20, 2008, is entered into by and among IAC/InterActiveCorp, a Delaware corporation ( IAC ), HSN, Inc., a Delaware corporation and wholly owned subsidiary of IAC ( HSN Spinco ), Interval Leisure Group, Inc., a Delaware corporation and wholly owned subsidiary of IAC ( Interval Spinco ), Ticketmaster, a Delaware corporation and wholly owned subsidiary of IAC ( TM Spinco ), and Tree.com, Inc., a Delaware corporation and wholly owned subsidiary of IAC ( Tree Spinco ; together with TM Spinco, Interval Spinco and HSN Spinco, the Spincos ; the Spincos and IAC, collectively, the Separate-cos or Parties ).
RECITALS :
WHEREAS, IAC, acting through its direct and indirect Subsidiaries, currently conducts a number of businesses, including (i) the Ticketing Business (as defined herein), (ii) the Vacations Business (as defined herein), (iii) the Retailing Business (as defined herein), (iv) the Lending and Real Estate Business (as defined herein) (together with the Ticketing Business, the Vacations Business and the Retailing Business, the Spun Businesses ) and (v) the Remaining Business (as defined herein);
WHEREAS, the Board of Directors of IAC (the IAC Board ) has determined that it is appropriate, desirable and in the best interests of IAC and its stockholders to separate IAC into five publicly-traded companies (the Separation ): (i) TM Spinco, which following the Separation will own and conduct, directly or indirectly, the Ticketing Business, (ii) Interval Spinco, which following the Separation will own and conduct, directly or indirectly, the Vacations Business, (iii) HSN Spinco, which following the Separation will own and conduct, directly or indirectly, the Retailing Business, (iv) Tree Spinco, which following the Separation will own and conduct, directly or indirectly, the Lending and Real Estate Business, and (v) IAC, which following the Separation will own and conduct, directly or indirectly, the Remaining Business;
WHEREAS, following the merger on August 8, 2008 of a wholly owned subsidiary of IAC with and into IAC, the outstanding shares of capital stock of IAC consist solely of common stock, par value $0.001 per share, of IAC ( IAC Common Stock ) and Class B common stock, par value $0.001 per share, of IAC ( IAC Class B Common Stock );
WHEREAS, in order to effect the Separation, the IAC Board has determined that it is appropriate, desirable and in the best interests of IAC and its stockholders: (i) for IAC and its Subsidiaries to enter into a series of transactions as set forth in the Transactions Memorandum dated of even date herewith (the Transactions Memo ) as a result of which one or more members of each Group (as defined herein) will, collectively, own all of such Groups Corresponding Assets (as defined herein) and assume (or retain) all of such Groups Corresponding Liabilities (as defined herein); and, thereafter (ii) for IAC to distribute to the holders of IAC Common Stock and the holders of IAC Class B Common Stock (in each case without consideration being paid by such stockholders), on a pro rata basis, all of the issued and
1
outstanding shares of Spinco Common Stock (as defined herein) of each Spinco;
WHEREAS, each of the Separate-cos has determined that it is necessary and desirable, on or prior to the Effective Time (as defined herein), to allocate and transfer to the applicable Group those Assets, and to allocate and assign to the applicable Group responsibility for those Liabilities, in respect of the activities of the Corresponding Businesses (as defined herein) of such Group;
WHEREAS, it is the intention of the Parties that each of the Distributions (as defined herein) qualify as a transaction that is generally tax free for United States federal income tax purposes under Sections 355 and/or 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the Code );
WHEREAS, in connection with the Distributions, each of HSN Spinco and/or its Subsidiaries, Interval Spinco and/or its Subsidiaries and TM Spinco and/or its Subsidiaries will, subject to the terms and provisions of this Agreement, enter into separate credit facilities and/or issue new debt securities, all or a portion of the cash proceeds of borrowings under which shall be distributed to IAC;
WHEREAS, (a) IAC has entered into an agreement with certain holders of its 7% Senior Notes due 2013 (the IAC Notes ) providing for, among other things, (i) IAC to exchange (the Exchange ) new 9.5% Senior Notes due 2016 of Interval Acquisition Corp. (as defined herein) that it will receive from Interval Acquisition Corp. as set forth in the Transactions Memorandum (the Interval Senior Notes ) and (ii) the simultaneous closing of the Exchange and the cash tender offer being made by IAC for any and all of the outstanding IAC Notes (the IAC Notes Tender Offer ) and (b) it is intended that the issuance of the Interval Senior Notes to IAC and the Exchange, together with the IAC Notes Tender Offer, are in connection with the Interval Distribution and are intended to give rise to a succession event (with Interval as the sole successor to IAC) for credit derivatives purposes; and
WHEREAS, the Parties wish to set forth in this Agreement the terms on which, and the conditions subject to which, they intend to implement the measures described above.
NOW THEREFORE, in consideration of the mutual agreements, covenants and other provisions set forth in this Agreement, the Parties hereby agree as follows:
2008 Internal Control Audit and Management Assessments has the meaning set forth in Section 11.01(b).
AAA has the meaning set forth in Section 9.03.
2
Accounts Receivable means in respect of any Person, (a) all trade accounts and notes receivable and other rights to payment from customers and all security for such accounts or rights to payment, including all trade accounts receivable representing amounts receivable in respect of goods shipped or products sold or otherwise disposed of or services rendered to customers, (b) all other accounts and notes receivable and all security for such accounts or notes, and (c) any claim, remedy or other right relating to any of the foregoing.
Action means any demand, action, suit, countersuit, arbitration, inquiry, proceeding or investigation by any Person or any Governmental Authority or before any Governmental Authority or any arbitration or mediation tribunal.
Affiliate of any Person means any other Person that, directly or indirectly, controls, is controlled by, or is under common control with such first Person as of the date on which or at any time during the period for when such determination is being made. For purposes of this definition, Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract or otherwise, and the terms Controlling and Controlled have meanings correlative to the foregoing.
Agent has the meaning set forth in Section 5.02(b).
Agreement means this Separation and Distribution Agreement, including all of the Schedules hereto.
Ancillary Agreements has the meaning set forth in Section 2.13.
Applicable Law means any applicable law, statute, rule or regulation of any Governmental Authority or any outstanding order, judgment, injunction, ruling or decree by any Governmental Authority.
Appurtenances means, in respect of any Land, all privileges, rights, easements, servitudes, hereditaments and appurtenances and similar interests belonging to or for the benefit of such Land, including all easements and servitudes appurtenant to and for the benefit of any Land (a Dominant Parcel ) for, and as the primary means of, access between, the Dominant Parcel and a public way, or for any other use upon which lawful use of the Dominant Parcel for the purposes for which it is presently being used is dependent, and all rights existing in and to any streets, alleys, passages and other rights-of-way included therein or adjacent thereto.
Asset-Related Claims means, in respect of any Asset, all claims of the owner against Third Parties relating to such Asset, whether choate or inchoate, known or unknown, absolute or contingent, disclosed or non-disclosed.
Assets means assets, properties and rights (including goodwill), wherever located (including in the possession of owners or Third Parties or elsewhere), whether real, personal or mixed, tangible or intangible, movable or immovable, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of a Person, including the following:
3
(a) |
|
Real Property; |
|
|
|
(b) |
|
Tangible Personal Property; |
|
|
|
(c) |
|
Inventories; |
|
|
|
(d) |
|
Accounts Receivable; |
|
|
|
(e) |
|
Contractual Assets; |
|
|
|
(f) |
|
Governmental Authorizations; |
|
|
|
(g) |
|
Business Records; |
|
|
|
(h) |
|
Intangible Property Rights; |
|
|
|
(i) |
|
Insurance Benefits; |
|
|
|
(j) |
|
Asset-Related Claims; and |
|
|
|
(k) |
|
Deposit Rights. |
Authorized Auditor has the meaning set forth in Section 11.01(c)(i).
Authorizing Spinco has the meaning set forth in Section 11.01(c)(i).
Business Concern means any corporation, company, limited liability company, partnership, joint venture, trust, unincorporated association or any other form of association.
Business Day means any day excluding (a) Saturday, Sunday and any other day which, in New York City is a legal holiday or (b) a day on which banks are authorized by Applicable Law to close in New York City.
Business Records means, in respect of any Person, all data and Records relating to such Person, including client and customer lists and Records, referral sources, research and development reports and Records, cost information, sales and pricing data, customer prospect lists, customer and vendor data, production reports and Records, service and warranty Records, equipment logs, operating guides and manuals, financial and accounting Records, personnel Records (subject to Applicable Law), creative materials, advertising materials, promotional materials, studies, reports, correspondence and other similar documents and records.
Claim Notice has the meaning set forth in Section 6.04(b).
Claimant Party has the meaning set forth in Section 9.02(a).
Code has the meaning set forth in the recitals hereto.
Confidential Information has the meaning set forth in Section 8.07(a).
4
Consent means any approval, consent, ratification, waiver or other authorization.
Contract means any contract, agreement, lease, purchase and/or commitment, license, consensual obligation, promise or undertaking (whether written or oral and whether express or implied) that is legally binding on any Person or any part of its property under Applicable Law, including all claims or rights against any Person, choses in action and similar rights, whether accrued or contingent with respect to any such contract, agreement, lease, purchase and/or commitment, license, consensual obligation, promise or undertaking, but excluding this Agreement and any Ancillary Agreement save as otherwise expressly provided in this Agreement or in any Ancillary Agreement.
Contractual Asset means, in respect of any Person, any Contract of, or relating to, such Person, any outstanding offer or solicitation made by, or to, such Person to enter into any Contract, and any promise or undertaking made by any other Person to such Person, whether or not legally binding.
Corresponding Annual Report has the meaning set forth in Section 11.01(d).
Corresponding Assets (a) with respect to HSN Spinco, any HSN Entity or the HSN Group, means the HSN Assets, (b) with respect to Interval Spinco, any Interval Entity or the Interval Group, means the Interval Assets, (c) with respect to TM Spinco, any TM Entity or the TM Group, means the TM Assets, (d) with respect to Tree Spinco, any Tree Entity or the Tree Group, means the Tree Assets and (e) with respect to IAC or the IAC Group, means the Retained Assets.
Corresponding Business (a) with respect to HSN Spinco, any HSN Entity or the HSN Group, means the Retailing Business, (b) with respect to Interval Spinco, any Interval Entity or the Interval Group, means the Vacations Business, (c) with respect to TM Spinco, any TM Entity or the TM Group, means the Ticketing Business, (d) with respect to Tree Spinco, any Tree Entity or the Tree Group, means the Lending and Real Estate Business and (e) with respect to IAC or the IAC Group, means the Remaining Business.
Corresponding Distribution Ratio (i) with respect to HSN Spinco, means the HSN Distribution Ratio, (ii) with respect to Interval Spinco, means the Interval Distribution Ratio, (iii) with respect to TM Spinco, means the TM Distribution Ratio and (iv) with respect to Tree Spinco, means the Tree Distribution Ratio.
Corresponding Escrow Shares has the meaning set forth in Section 4.03.
Corresponding Group (a) with respect to the Retailing Business, HSN Spinco or any HSN Entity, means the HSN Group, (b) with respect to the Vacations Business, Interval Spinco or any Interval Entity, means the Interval Group, (c) with respect to the Ticketing Business, TM Spinco or any TM Entity, means the TM Group, (d) with respect to the Lending and Real Estate Business, Tree Spinco or any Tree Entity, means the Tree Group and (e) with respect to the Remaining Business, IAC or any Remaining IAC Entity, means the IAC Group.
5
Corresponding Group Balance Sheet (a) with respect to the Retailing Business, HSN Spinco, any HSN Entity or the HSN Group, means the HSN Group Balance Sheet, (b) with respect to the Vacations Business, Interval Spinco, any Interval Entity or the Interval Group, means the Interval Group Balance Sheet, (c) with respect to the Ticketing Business, TM Spinco, any TM Entity or the TM Group, the TM Group Balance Sheet, and (d) with respect to the Lending and Real Estate Business, Tree Spinco, any Tree Entity or the Tree Group, means the Tree Group Balance Sheet.
Corresponding Liabilities (a) with respect to HSN Spinco, any HSN Entity or the HSN Group, means the HSN Liabilities, (b) with respect to Interval Spinco, any Interval Entity or the Interval Group, means the Interval Liabilities, (c) with respect to TM Spinco, any TM Entity or the TM Group, means the TM Liabilities, (d) with respect to Tree Spinco, any Tree Entity or the Tree Group, means the Tree Liabilities and (e) with respect to IAC or the IAC Group, means the Retained Liabilities.
Corresponding Opening Balance Sheet (a) with respect to the Retailing Business, HSN Spinco, any HSN Entity or the HSN Group, means the HSN Opening Balance Sheet, (b) with respect to the Vacations Business, Interval Spinco, any Interval Entity or the Interval Group, means the Interval Opening Balance Sheet, (c) with respect to the Ticketing Business, TM Spinco, any TM Entity or the TM Group, means the TM Opening Balance Sheet and (d) with respect to the Lending and Real Estate Business, Tree Spinco, any Tree Entity or the Tree Group, means the Tree Opening Balance Sheet.
Corresponding Other Separate-cos Indemnified Parties has the meaning set forth in Section 6.02.
Corresponding Separate-co (a) with respect to the Retailing Business, any HSN Entity or the HSN Group, means HSN Spinco, (b) with respect to the Vacations Business, any Interval Entity or the Interval Group, means Interval Spinco, (c) with respect to the Ticketing Business, any TM Entity or the TM Group, means TM Spinco, (d) with respect to the Lending and Real Estate Business, any Tree Entity or the Tree Group, means Tree Spinco and (e) with respect to the Remaining Business, any Remaining IAC Entity or the IAC Group, means IAC.
Corresponding Spinco (a) with respect to the Retailing Business, any HSN Entity or the HSN Group, means HSN Spinco, (b) with respect to the Vacations Business, any Interval Entity or the Interval Group, means Interval Spinco, (c) with respect to the Ticketing Business, any TM Entity or the TM Group, means TM Spinco and (d) with respect to the Lending and Real Estate Business, any Tree Entity or the Tree Group, means Tree Spinco.
Deferred Beneficiary has the meaning set forth in Section 3.01(b).
Deferred Corresponding Asset has the meaning set forth in Section 3.01(a).
Deferred Excluded Asset has the meaning set forth in Section 3.01(a).
Deferred Spun Asset has the meaning set forth in Section 3.01(a).
Deferred Transactions has the meaning set forth in Section 10.01(a)(ii).
6
Deferred Transfer Asset has the meaning set forth in Section 3.01(a).
Deposit Rights means rights relating to deposits and prepaid expenses, claims for refunds and rights of set-off in respect thereof.
DGCL means the General Corporation Law of the State of Delaware.
Disclosing Party has the meaning set forth in Section 8.08.
Dispute has the meaning set forth in Section 9.02(a).
Dispute Notice has the meaning set forth in Section 9.02(a).
Dispute Parties has the meaning set forth in Section 9.02(a).
Distribution Date means the HSN Distribution Date, the Interval Distribution Date, the TM Distribution Date or the Tree Distribution Date, as applicable.
Distribution Record Date means the HSN Distribution Record Date, the Interval Distribution Record Date, the TM Distribution Record Date or the Tree Distribution Record Date, as applicable
Distributions means the HSN Distribution, the Interval Distribution, the TM Distribution and the Tree Distribution, and each of them a Distribution .
Effective Time means (a) 9:00 a.m., New York City time, on the earliest to occur of one or more of the HSN Distribution Date, the Interval Distribution Date, the TM Distribution Date and the Tree Distribution Date if IAC determines to effect the applicable Distribution(s) prior to the opening of trading on NASDAQ or (b) otherwise, 4.01 p.m., New York City time, on such earliest date to occur.
EHS Liabilities means any Liability arising from or under any Environmental Law or Occupational Health and Safety Law.
Employee Matters Agreement means the Employee Matters Agreement among the Parties to be dated as of even date herewith.
Encumbrance means, with respect to any asset, mortgages, liens, hypothecations, pledges, charges, security interests or encumbrances of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under Applicable Law.
Environmental Law means any Applicable Law from any Governmental Authority (a) relating to the protection of the environment (including air, water, soil and natural resources) or (b) the use, storage, handling, release or disposal of Hazardous Substances.
Escrow Agent has the meaning set forth in Section 4.03(a).
Escrow Agreement has the meaning set forth in Section 4.03(a).
7
Exchange Act means the United States Securities Exchange Act of 1934, as amended.
Excluded Assets has the meaning set forth in Section 2.09(a).
GAAP has the meaning set forth in Section 2.04(d).
Governmental Authority means any court, arbitration panel, governmental or regulatory authority, agency, stock exchange, commission or body.
Governmental Authorization means any Consent, license, certificate, franchise, registration or permit issued, granted, given or otherwise made available by, or under the authority of, any Governmental Authority or pursuant to any Applicable Law.
Ground Lease means any long-term lease (including any emphyteotic lease) of Land in which most of the rights and benefits comprising ownership of the Land and the Improvements thereon or to be constructed thereon, if any, and the Appurtenances thereto for the benefit thereof, are transferred to the tenant for the term thereof.
Ground Lease Property means, in respect of any Person, any Land, Improvement or Appurtenance of such Person that is subject to a Ground Lease.
Group means the IAC Group, the HSN Group, the Interval Group, the TM Group or the Tree Group, as the context requires.
Guaranteed Entities has the meaning set forth in Section 4.02(c).
Guaranteed Group has the meaning set forth in Section 4.02(c).
Guaranteed Spinco has the meaning set forth in Section 4.02(c).
Guaranteeing Group has the meaning set forth in Section 4.02(c).
Guaranteeing Separate-co has the meaning set forth in Section 4.02(c).
Hazardous Substance means any substance to the extent presently listed, defined, designated or classified as hazardous, toxic or radioactive under any applicable Environmental Law, including petroleum and any derivative or by-products thereof.
HSN Assets has the meaning set forth in Section 2.06.
HSN Claims has the meaning set forth in Section 6.01(c).
HSN Common Stock means the common stock, par value $0.01 per share, of HSN Spinco.
HSN Distribution means the distribution on the HSN Distribution Date, to holders of record of shares of IAC Common Stock and IAC Class B Common Stock as of the HSN Distribution Record Date, of the HSN Common Stock owned by IAC on the basis of a
8
fraction of a share of HSN Common Stock equal to the HSN Distribution Ratio for every one share of IAC Common Stock or IAC Class B Common Stock.
HSN Distribution Date means the date on which IAC distributes all of the issued and outstanding shares of HSN Common Stock to the holders of IAC Common Stock and IAC Class B Common Stock.
HSN Distribution Ratio means 1/5, subject to adjustment pursuant to Section 5.02(a).
HSN Distribution Record Date means such date as may be determined by the IAC Board as the record date for the HSN Distribution.
HSN Effective Time Cash Balance has the meaning set forth in Section 4.04(c).
HSN Entities means those Business Concerns forming part of the IAC Group which are identified on Schedule 2.06(b) and which on and after the Effective Time form part of the HSN Group.
HSN Group means HSN Spinco, the HSN Entities and each other Person (other than any member of any other Group) that is a direct or indirect Subsidiary of HSN Spinco immediately after the Effective Time, and each Person that becomes a Subsidiary of HSN Spinco after the Effective Time.
HSN Group Balance Sheet has the meaning set forth in Section 2.06(c).
HSN Liabilities has the meaning set forth in Section 2.10.
HSN Opening Balance Sheet has the meaning set forth in Section 2.06(e).
HSN Releasors has the meaning set forth in Section 6.01(c).
HSN Spinco has the meaning set forth in the preamble hereto.
HSN Target Cash Balance has the meaning set forth in Section 4.04(c).
IAC has the meaning set forth in the preamble hereto.
IAC Auditor has the meaning set forth in Section 11.01(a).
IAC Board has the meaning set forth in the recitals hereto.
IAC Claims has the meaning set forth in Section 6.01(e).
IAC Class B Common Stock has the meaning set forth in the recitals hereto.
IAC Common Stock has the meaning set forth in the recitals hereto.
9
IAC Group means IAC, its Subsidiaries (subject to Section 1.04(b), other than any member of any Spinco Group) and their respective domestic and international businesses, assets and liabilities.
IAC Notes has the meaning set forth in the recitals hereto.
IAC Record Date Share Number with respect to any Distribution means the aggregate number of shares of IAC Common Stock and IAC Class B Common Stock outstanding on the applicable Distribution Record Date.
IAC Releasors has the meaning set forth in Section 6.01(e).
Improvements means, in respect of any Land, all buildings, structures, plants, fixtures and improvements located on such Land, including those under construction.
Indemnified Party has the meaning set forth in Section 6.04(a).
Indemnifying Party has the meaning set forth in Section 6.04(b).
Information means any information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, test procedures, research, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, manufacturing techniques, manufacturing variables, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, products, product plans, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer information, customer services, supplier information, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data.
Insurance Benefits means, in respect of any Asset or Liability, all insurance benefits, including rights to Insurance Proceeds, arising from or relating to such Asset or Liability.
Insurance Proceeds means those monies (in each case net of any costs or expenses incurred in the collection thereof and net of any applicable premium adjustments (including reserves and retrospectively rated premium adjustments)):
(a) received by an insured from an insurance carrier; or
(b) paid by an insurance carrier on behalf of the insured.
Intangible Property Rights means, in respect of any Person, all intangible rights and property of such Person, including IT Assets, going concern value and goodwill.
10
Intercompany Accounts means all balances related to indebtedness, including any intercompany indebtedness, loan, guaranty, receivable, payable or other account between a member of any Group, on the one hand, and a member of any other Group, on the other hand.
Interval Acquisition Corp. means Interval Acquisition Corp., a Delaware corporation and wholly owned subsidiary of IAC that, at the time of the Interval Distribution, will be a wholly owned subsidiary of Interval Spinco.
Interval Assets has the meaning set forth in Section 2.05.
Interval Claims has the meaning set forth in Section 6.01(b).
Interval Common Stock means the common stock, par value $0.01 per share, of Interval Spinco.
Interval Distribution means the distribution on the Interval Distribution Date, to holders of record of shares of IAC Common Stock and IAC Class B Common Stock as of the Interval Distribution Record Date, of the Interval Common Stock owned by IAC on the basis of a fraction of a share of Interval Common Stock equal to the Interval Distribution Ratio for every one share of IAC Common Stock or IAC Class B Common Stock.
Interval Distribution Date means the date on which IAC distributes all of the issued and outstanding shares of Interval Common Stock to the holders of IAC Common Stock and IAC Class B Common Stock.
Interval Distribution Ratio means 1/5, subject to adjustment pursuant to Section 5.02(a).
Interval Distribution Record Date means such date as may be determined by the IAC Board as the record date for the Interval Distribution.
Interval Effective Time Cash Balance has the meaning set forth in Section 4.04(b).
Interval Entities means those Business Concerns forming part of the IAC Group which are identified on Schedule 2.05(b) and which on and after the Effective Time form part of the Interval Group.
Interval Group means Interval Spinco, the Interval Entities and each other Person (other than any member of any other Group) that is a direct or indirect Subsidiary of Interval Spinco immediately after the Effective Time, and each Person that becomes a Subsidiary of Interval Spinco after the Effective Time.
Interval Group Balance Sheet has the meaning set forth in Section 2.05(c).
Interval Liabilities has the meaning set forth in Section 2.10.
Interval Opening Balance Sheet has the meaning set forth in Section 2.05(e).
11
Interval Releasors has the meaning set forth in Section 6.01(b).
Interval Spinco has the meaning set forth in the preamble hereto.
Interval Target Cash Balance has the meaning set forth in Section 4.04(b).
Inventories means, in respect of any Person, all inventories of such Person wherever located, including all finished goods, (whether or not held at any location or facility of such Person or in transit to or from such Person), work in process, raw materials, spare parts and all other materials and supplies to be used or consumed by the Person in production of finished goods.
IT Assets means computers, computer software, firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines, all other information technology equipments and all associated documentation.
Land means, in respect of any Person, all parcels and tracts of land in which the Person has an ownership interest.
Lending and Real Estate Business means (a) the businesses and operations of Tree Spinco and its subsidiaries described in the Information Statement included as an exhibit to Tree Spincos Registration Statement, (b) any other business conducted primarily through the use of the Tree Assets prior to the Effective Time and (c) the businesses and operations of Business Concerns acquired or established by or for Tree Spinco or any of its Subsidiaries after the date of this Agreement.
Liberty Spinco Agreement means that certain Spinco Agreement, dated as of May 13, 2008, among IAC, Barry Diller, Liberty Media Corporation and certain subsidiaries of Liberty Media Corporation that hold IAC Common Stock and/or IAC Class B Common Stock.
Liberty Spinco Assumption Agreement means an agreement substantially in the form of Exhibit 5 to the Liberty Spinco Agreement.
Liberty Registration Rights Agreement means an agreement substantially in the form of Exhibit 4 to the Liberty Spinco Agreement.
Liability means, with respect to any Person, any and all losses, claims, charges, debts, demands, actions, causes of action, suits, damages, obligations, payments, costs and expenses, sums of money, accounts, reckonings, bonds, specialties, indemnities and similar obligations, exoneration covenants, contracts, controversies, agreements, promises, doings, omissions, variances, guarantees, make whole agreements and similar obligations, and other liabilities and requirements, including all contractual obligations, whether absolute or contingent, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, joint or several, whenever arising, and including those arising under any Applicable Law, Action, threatened or contemplated Action (including the costs and expenses of demands, assessments, judgments, settlements and compromises relating thereto and attorneys fees and any and all costs and expenses, whatsoever reasonably incurred in investigating, preparing or defending against any such Actions or threatened or contemplated Actions) or Order of any
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Governmental Authority or any award of any arbitrator or mediator of any kind, and those arising under any contract, commitment or undertaking, in each case, whether or not recorded or reflected or otherwise disclosed or required to be recorded or reflected or otherwise disclosed, on the books and records or financial statements of any Person, including any Specified Financial Liability, EHS Liability or Liability for Taxes.
NASDAQ means the Nasdaq Stock Market.
New IAC Integrated Warrant has the meaning set forth in Section 5.05(a)(i).
Non-IAC Indemnified Parties has the meaning set forth in Section 6.03.
Non-IAC Parties has the meaning set forth in Section 6.01(e).
Non-Interval Parties has the meaning set forth in Section 6.01(b).
Non-HSN Parties has the meaning set forth in Section 6.01(c).
Non-Tree Parties has the meaning set forth in Section 6.01(d).
Non-TM Parties has the meaning set forth in Section 6.01(a).
Notice Period has the meaning set forth in Section 6.04(b).
Occupational Health and Safety Law means any Applicable Law designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, and any program, whether governmental or private (such as those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions.
Old IAC Integrated Warrant means the outstanding warrant to purchase shares of IAC Common Stock identified on Schedule 1.01(a) .
Order means any order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Authority or arbitrator.
Ordinary Course of Business means any action taken by a Person that is in the ordinary course of the normal, day-to-day operations of such Person and is consistent with the past practices of such Person.
Parties has the meaning set forth in the preamble hereto.
Person means any individual, Business Concern or Governmental Authority.
Post-Record Date IAC Shares has the meaning set forth in Section 5.02(a)
Potential Contributor has the meaning set forth in Section 6.06(a).
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Prime Rate means the rate which JPMorgan Chase & Co. (or any successor thereto or other major money center commercial bank agreed to by the Parties hereto) announces from time to time as its prime lending rate, as in effect from time to time.
Prospectus with respect to a Registration Statement means the prospectus forming a part of such Registration Statement, as the same may be amended or supplemented from time to time.
Providing Party has the meaning set forth in Section 8.08.
Real Property means any Land and Improvements and all Appurtenances thereto and any Ground Lease Property.
Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
Registration Statement means, for each Spinco, the Registration Statement on Form S-1 first filed by such Spinco with the SEC on August 1, 2008 (together with all amendments and supplements thereto) in connection with the registration under the Securities Act of such Spincos Spinco Common Stock.
Regulation S-K means Regulation S-K of the General Rules and Regulations promulgated by the SEC pursuant to the Securities Act.
Relevant Time means (a) as between any two Spincos, on the date of the later Distribution Date to occur with respect to such Spincos if such Distribution Dates are not the same date or, otherwise, on such Distribution Date and (b) as between IAC and any Spinco, on the Distribution Date with respect to such Spinco, in either such case (i) 9:00 a.m., New York City time, if IAC determines to effect the applicable Distribution(s) prior to the opening of trading on NASDAQ or (b) otherwise, 4:01 p.m., New York City time, on such earliest date to occur.
Remaining Business means all IAC Businesses other than the Spun Businesses.
Remaining IAC Entity means any Business Concern that is a member of the IAC Group on and after the Effective Time.
Representatives means, with respect to any Person, any of such Persons directors, officers, employees, agents, consultants, advisors, accountants or attorneys.
Requesting Party has the meaning set forth in Section 8.01(a).
Response has the meaning set forth in Section 9.02(a).
Responding Parties has the meaning set forth in Section 9.02(a).
Responsible Group has the meaning set forth in Section 3.02(b).
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Responsible Separate-co has the meaning set forth in Section 3.02.
Retailing Business means (a) the businesses and operations of HSN Spinco and its Subsidiaries as described in the Prospectus forming a part of HSN Spincos Registration Statement, (b) any other business conducted primarily through the use of the HSN Assets prior to the Effective Time and (c) the businesses and operations of Business Concerns acquired or established by or for HSN Spinco or any of its Subsidiaries after the date of this Agreement.
Retained Liabilities has the meaning set forth in Section 2.10.
Retaining Person has the meaning set forth in Section 3.01(b).
SEC means the Securities and Exchange Commission.
Securities Act means the United States Securities Act of 1933, as amended.
Senior Party Representatives has the meaning set forth in Section 9.02(a).
Separate-cos has the meaning set forth in the preamble hereto.
Separation has the meaning set forth in the recitals hereto.
Separation Transactions means the transactions to effect the Separation as described in the Transactions Memo and, in the singular, means any one of them.
Shared Liability of a Spinco means any Liability from, relating to, arising out of, or derivative of any matter, claim or litigation, whether actual or potential, associated with any securities law litigation relating to any public disclosure (or absence of public disclosure) with respect to such Spincos Spun Business or the Spun Entities in such Spincos Corresponding Group made by IAC prior to the Effective Time, including the fees and expenses of outside counsel retained by IAC in connection with the defense and/or settlement of any such matter. For purposes of this definition, the phrase securities law litigation shall include claims alleging any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact in alleged violation of the Securities Act, the Exchange Act or any similar state law and any claims premised on, related to or derivative of such alleged statements, omissions or violations, whether payable to any current, past or future holders of IAC securities or any Spinco securities, to any of the co-defendants in such action or to any Governmental Authority. Notwithstanding anything in Section 6.06 to the contrary, the amount of any Shared Liability shall be net of any insurance proceeds actually recovered by or on behalf of any member of any Group.
Specified Financial Liabilities means, in respect of any Person, all liabilities, obligations, contingencies, instruments and other Liabilities of a financial nature with Third Parties of, or relating to, such Person, including any of the following:
(a) foreign exchange contracts;
(b) letters of credit;
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(c) guarantees of Third Party loans;
(d) surety bonds (excluding surety for workers compensation self-insurance);
(e) interest support agreements on Third Party loans;
(f) performance bonds or guarantees issued by Third Parties;
(g) swaps or other derivatives contracts;
(h) recourse arrangements on the sale of receivables or notes; and
(i) indemnities for damages for any breach of, or any inaccuracy in, any representation or warranty or any breach of, or failure to perform or comply with, any covenant, undertaking or obligation.
Spinco has the meaning set forth in the preamble hereto.
Spinco Auditor has the meaning set forth in Section 11.01(a).
Spinco Common Stock means the HSN Common Stock, the Interval Common Stock, the TM Common Stock and/or the Tree Common Stock, as applicable.
Spinco Common Stock Escrow Account has the meaning set forth in Section 4.03.
Spinco Group means any of the HSN Group, the Interval Group, the TM Group and the Tree Group.
Spun Businesses has the meaning set forth in the recitals hereto.
Spun Assets means the HSN Assets, the Interval Assets, the TM Assets and the Tree Assets.
Spun Entities means the HSN Entities, the Interval Entities, the TM Entities and the Tree Entities.
Spun Liabilities means the HSN Liabilities, the Interval Liabilities, the TM Liabilities and the Tree Liabilities.
Subsidiary of any Person means any corporation, partnership, limited liability entity, joint venture or other organization, whether incorporated or unincorporated, of which a majority of the total voting power of capital stock or other interests entitled (without the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof, is at the time owned or controlled, directly or indirectly, by such Person.
Tangible Personal Property means, in respect of any Person, all machinery, equipment, tools, furniture, office equipment, supplies, materials, vehicles and other items of
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tangible personal or movable property (other than Inventories and IT Assets) of every kind and wherever located that are owned or leased by the Person, together with any express or implied warranty by the manufacturers, sellers or lessors of any item or component part thereof and all maintenance Records and other documents relating thereto.
Tax means Income Taxes and Other Taxes as defined in the Tax Sharing Agreement.
Tax Sharing Agreement means the Tax Sharing Agreement among the Parties to be dated as of even date herewith.
Third Party means a Person (a) that is not a Party to this Agreement, other than a member of any Group and (b) that is not an Affiliate thereof.
Third Party Claim has the meaning set forth in Section 6.04(b).
Third Party Consent has the meaning set forth in Section 2.11.
Ticketing Business means (a) the businesses and operations of TM Spinco and its subsidiaries as described in the Prospectus forming a part of TM Spincos Registration Statement, (b) any other business conducted primarily through the use of the TM Assets prior to the Effective Time and (c) the businesses and operations of Business Concerns acquired or established by or for TM Spinco or any of its Subsidiaries after the date of this Agreement.
TM Assets has the meaning set forth in Section 2.04.
TM Claims has the meaning set forth in Section 6.01(a).
TM Common Stock means the common stock, par value $0.01 per share, of TM Spinco.
TM Distribution means the distribution on the TM Distribution Date, to holders of record of shares of IAC Common Stock and IAC Class B Common Stock as of the TM Distribution Record Date, of the TM Common Stock owned by IAC on the basis of a fraction of a share of TM Common Stock equal to the TM Distribution Ratio for every one share of IAC Common Stock or IAC Class B Common Stock.
TM Distribution Date means the date on which IAC distributes all of the issued and outstanding shares of TM Common Stock to the holders of IAC Common Stock and IAC Class B Common Stock.
TM Distribution Ratio means 1/5, subject to adjustment pursuant to Section 5.02(a).
TM Distribution Record Date means such date as may be determined by the IAC Board as the record date for the TM Distribution.
TM Effective Time Cash Balance has the meaning set forth in Section 4.04(a).
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TM Entities means those Business Concerns forming part of the IAC Group which are identified on Schedule 2.04(b) and which on and after the Effective Time form part of the TM Group.
TM Group means TM Spinco, the TM Entities and each other Person (other than any member of any other Group) that is a direct or indirect Subsidiary of TM Spinco immediately after the Effective Time, and each Person that becomes a Subsidiary of TM Spinco after the Effective Time.
TM Group Balance Sheet has the meaning set forth in Section 2.04(c).
TM Liabilities has the meaning set forth in Section 2.10.
TM Opening Balance Sheet has the meaning set forth in Section 2.04(e).
TM Releasors has the meaning set forth in Section 6.01(a).
TM Spinco has the meaning set forth in the preamble hereto.
TM Target Cash Balance has the meaning set forth in Section 4.04(a).
Transfer Impediment has the meaning set forth in Section 3.01(a).
Transactions Memo has the meaning set forth in the recitals hereto.
Transition Services Agreement means the Transition Services Agreement among the Parties to be dated as of even date herewith.
Tree Assets has the meaning set forth in Section 2.07.
Tree Claims has the meaning set forth in Section 6.01(d).
Tree Common Stock means the common stock, par value $0.01 per share, of Tree Spinco.
Tree Distribution means the distribution on the Tree Distribution Date, to holders of record of shares of IAC Common Stock and IAC Class B Common Stock as of the Tree Distribution Record Date, of the Tree Common Stock owned by IAC on the basis of a fraction of a share of Tree Common Stock equal to the Tree Distribution Ratio for every one share of IAC Common Stock or IAC Class B Common Stock.
Tree Distribution Date means the date on which IAC distributes all of the issued and outstanding shares of Tree Common Stock to the holders of IAC Common Stock and IAC Class B Common Stock.
Tree Distribution Ratio means 1/30, subject to adjustment pursuant to Section 5.02(a).
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Tree Distribution Record Date means such date as may be determined by the IAC Board as the record date for the Tree Distribution.
Tree Effective Time Cash Balance has the meaning set forth in Section 4.04(d).
Tree Entities means those Business Concerns forming part of the IAC Group which are identified on Schedule 2.07(b) and which on and after the Effective Time form part of the Tree Group.
Tree Group means Tree Spinco, the Tree Entities and each other Person (other than any member of any other Group) that is a direct or indirect Subsidiary of Tree Spinco immediately after the Effective Time, and each Person that becomes a Subsidiary of Tree Spinco after the Effective Time.
Tree Group Balance Sheet has the meaning set forth in Section 2.07(c).
Tree Liabilities has the meaning set forth in Section 2.10.
Tree Opening Balance Sheet has the meaning set forth in Section 2.07(e).
Tree Releasors has the meaning set forth in Section 6.01(d).
Tree Spinco has the meaning set forth in the preamble hereto.
Tree Target Cash Balance has the meaning set forth in Section 4.04(d).
Unreleased Group has the meaning set forth in Section 3.02.
Unreleased Liabilities has the meaning set forth in Section 3.02.
Unreleased Person has the meaning set forth in Section 3.02.
Unreleased Separate-co has the meaning set forth in Section 3.02.
Vacations Business means (a) the businesses and operations of Interval Spinco and its subsidiaries as described in the Prospectus forming a part of Interval Spincos Registration Statement, (b) any other business conducted primarily through the use of the Interval Assets prior to the Effective Time and (c) the businesses and operations of Business Concerns acquired or established by or for Interval Spinco or any of its Subsidiaries after the date of this Agreement.
Warrant Share Number has the meaning set forth in Section 5.05(a)(i).
Schedule 1.01(a) |
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Old IAC Integrated Warrant |
Schedule 2.04(a) |
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TM Assets |
Schedule 2.04(b) |
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TM Entities |
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Schedule 2.04(c) |
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TM Group Balance Sheet |
Schedule 2.05(a) |
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Interval Assets |
Schedule 2.05(b) |
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Interval Entities |
Schedule 2.05(c) |
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Interval Group Balance Sheet |
Schedule 2.06(a) |
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HSN Assets |
Schedule 2.06(b) |
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HSN Entities |
Schedule 2.06(c) |
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HSN Group Balance Sheet |
Schedule 2.07(a) |
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Tree Assets |
Schedule 2.07(b) |
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Tree Entities |
Schedule 2.07(c) |
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Tree Group Balance Sheet |
Schedule 2.09(a) |
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Excluded Assets |
Schedule 2.10(a) |
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TM Liabilities |
Schedule 2.10(b) |
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Interval Liabilities |
Schedule 2.10(c) |
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HSN Liabilities |
Schedule 2.10(d) |
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Tree Liabilities |
Schedule 2.10(e) |
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Retained Liabilities |
Schedule 2.14(a) |
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IAC Resignation Exceptions |
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Notwithstanding the foregoing, there shall be excluded from the definition of TM Assets under this Section 2.04 Business Records to the extent they are included in or primarily relate to any Excluded Asset or Retained Liability or the Remaining Business or their transfer is prohibited by Applicable Law or by agreements between any other Separate-co or any member of another Separate-cos Corresponding Group and Third Parties or otherwise would subject any other Separate-co or any member of any other Corresponding Group to liability for such transfer. Access to such excluded Business Records shall be governed by Article VIII.
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Notwithstanding the foregoing, there shall be excluded from the definition of Interval Assets under this Section 2.05 Business Records to the extent they are included in or primarily relate to any Excluded Asset or Retained Liability or the Remaining Business or their transfer is prohibited by Applicable Law or by agreements between any other Separate-co or any member of another Separate-cos Corresponding Group and Third Parties or otherwise would subject any other Separate-co or any member of any other Corresponding Group to liability for such transfer. Access to such excluded Business Records shall be governed by Article VIII.
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Notwithstanding the foregoing, there shall be excluded from the definition of HSN Assets under this Section 2.06 Business Records to the extent they are included in or primarily relate to any Excluded Asset or Retained Liability or the Remaining Business or their transfer is prohibited by Applicable Law or by agreements between any other Separate-co or any member of another Separate-cos Corresponding Group and Third Parties or otherwise would subject any other Separate-co or any member of any other Corresponding Group to liability for such transfer. Access to such excluded Business Records shall be governed by Article VIII.
Notwithstanding the foregoing, there shall be excluded from the definition of Assets under this Section 2.07 Business Records to the extent they are included in or primarily relate to any Excluded Asset or Retained Liability or the Remaining Business or their transfer is prohibited by Applicable Law or by agreements between any other Separate-co or any member of another Separate-cos Corresponding Group and Third Parties or otherwise would subject any other Separate-co or any member of any other Corresponding Group to liability for such transfer. Access to such excluded Business Records shall be governed by Article VIII.
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(k) any Liability pursuant to contracts entered into by IAC and/or any member of the IAC Group (i) in connection with the acquisition, by IAC and/or any member of the IAC Group, of any Spun Entity and/or Spun Business or (ii) otherwise relating primarily to a Spun Entity and/or the conduct of a Spun Business, shall be a Corresponding Liability of such Spun Entitys or Spun Businesss Corresponding Group, unless it is expressly identified in this Agreement (including on any Schedule) or in any Ancillary Agreement as a Liability to be assumed or retained by IAC (or any other member of the IAC Group) or by a Spinco that is not included in such Spun Entitys Corresponding Group (or any other relevant member of such other Spincos Corresponding Group), in which case it shall be a Retained Liability or Spun Liability of such other Spincos Corresponding Group, as applicable;
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(b) Notwithstanding the foregoing, in lieu of issuing any fractional shares of its Spinco Common Stock upon the exercise of the New IAC Integrated Warrant, the applicable Spinco shall promptly deposit into the applicable Spinco Common Stock Escrow Account cash in lieu of such fractional share in an amount computed in accordance with the terms of the New IAC Integrated Warrant.
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In addition, nothing contained in Section 6.01(a), 6.01(b), 6.01(c), 6.01(d) or 6.01(e) hereof shall release any Separate-co from honoring its existing obligations to indemnify any director, officer or employee of any Group who was a director, officer or employee of such Separate-co on or prior to the Effective Time, to the extent that such director, officer or employee becomes a named defendant in any litigation involving such Separate-co and was entitled to such indemnification pursuant to then existing obligations.
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(c) An insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification provisions hereof, have any subrogation rights with respect thereto, it being expressly understood and agreed that no insurer or any other Third Party shall be entitled to a wind-fall (i.e., a benefit they would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification provisions hereof.
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Nothing in this Section 11.01 shall require any Party to violate any agreement with any Third Party regarding the confidentiality of confidential and proprietary Information relating to that Third Party or its business; provided , however , that in the event that a Party is required under this Section 11.01 to disclose any such Information, such Party shall use commercially reasonable efforts to seek to obtain such Third Party Consent to the disclosure of such Information.
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If to IAC, to:
IAC/InterActiveCorp
555 West 18th Street
New York, NY 10011
Attention: General Counsel
Telecopier: (212) 632-9642
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Pamela S. Seymon, Esq.
Telecopier: (212) 403-2000
If to TM Spinco:
Ticketmaster
8800 Sunset Boulevard
West Hollywood, California 90069
Attention: General Counsel
Telecopier: (310) 360-3373
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If to Interval Spinco:
Interval Leisure Group, Inc.
6262 Sunset Drive
Miami, Florida 33143
Attention: General Counsel
Telecopier: (305) 667-2072
If to HSN Spinco:
1 HSN Drive
St. Petersburg, Florida 33729
Attention: General Counsel
Telecopier: (727) 872-6866
If to Tree Spinco:
11115 Rushmore Drive
Charlotte, North Carolina 28277
Attention: General Counsel
Telecopier: (949) 255-5139
Any Party may, by notice to the other Parties as set forth herein, change the address or fax number to which such notices are to be given.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives.
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By: |
/s/ Gregg Winiarski |
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Name: Gregg Winiarski |
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Title: Vice President |
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HSN, INC. |
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By: |
/s/ Mindy Grossman |
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Name: Mindy Grossman |
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Title: Chief Executive Officer |
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INTERVAL LEISURE GROUP, INC. |
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By: |
/s/ Craig Nash |
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Name: Craig M. Nash |
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Title: Chairman, President & |
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Chief Executive Officer |
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TICKETMASTER |
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By: |
/s/ Sean Moriarty |
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Name: Sean P. Moriarty |
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Title: President and Chief Executive |
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Officer |
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TREE.COM, INC. |
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By: |
/s/ Douglas R. Lebda |
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Name: Douglas R. Lebda |
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Title: Chairman and Chief |
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Executive Officer |
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65
Exhibit 10.2
TAX SHARING AGREEMENT
by and among
IAC/INTERACTIVECORP,
TICKETMASTER,
INTERVAL LEISURE GROUP, INC.,
HSN, INC.
and
TREE.COM, INC.
Dated as of
August 20, 2008
TAX SHARING AGREEMENT
This TAX SHARING AGREEMENT (this Agreement ), dated as of August 20, 2008, by and among IAC/InterActiveCorp, a Delaware corporation ( Parent ), Ticketmaster, a Delaware corporation and a wholly-owned subsidiary of Parent ( Ticketmaster Spinco ), Interval Leisure Group, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent ( Interval Spinco ), HSN, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent ( HSN Spinco ), and Tree.com, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent ( Tree Spinco , together with Ticketmaster Spinco, Interval Spinco, and HSN Spinco, the Spincos , and each of the Spincos, a Spinco ). Each of Parent, Ticketmaster Spinco, Interval Spinco, HSN Spinco and Tree Spinco is sometimes referred to herein as a Party and collectively, as the Parties .
W I T N E S S E T H
WHEREAS, the Parties have entered into a Separation and Distribution Agreement, dated as of August 20, 2008 (the Separation Agreement ), providing for the restructuring of Parent and its subsidiaries into the Parent Group, the Ticketmaster Spinco Group, the Interval Spinco Group, the HSN Spinco Group, and the Tree Spinco Group (each as defined herein);
WHEREAS, pursuant to the terms of the Separation Agreement, Parent and its subsidiaries will consummate a series of internal restructuring steps (the Internal Restructuring Steps ) described in the Transactions Memo;
WHEREAS, for federal income tax purposes, it is intended that the Internal Distributions (as defined herein) shall qualify as tax-free transactions under Sections 355(a) and/or 368(a)(1)(D) of the Code;
WHEREAS, pursuant to the terms of the Separation Agreement, the Parties will effect the Distributions (as defined herein) and related transactions;
WHEREAS, for federal income tax purposes, it is intended that the Distributions shall qualify as tax-free transactions under Sections 355(a) and/or 368(a)(1)(D) of the Code;
WHEREAS, at the close of business on the Distribution Date of a Spinco, the taxable year of such Spinco shall close for federal income tax purposes; and
WHEREAS, the Parties wish to provide for the payment of Income Taxes and Other Taxes and entitlement to Refunds thereof, allocate responsibility and provide for cooperation in connection with the filing of returns in respect of Income Taxes and Other Taxes, and provide for certain other matters relating to Income Taxes and Other Taxes.
NOW, THEREFORE, in consideration of the premises and the representations, covenants and agreements herein contained and intending to be legally bound hereby, the Parties agree as follows:
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Actually Realized or Actually Realizes shall mean, for purposes of determining the timing of the incurrence of any Spin-Off Tax Liability, Income Tax Liability or Other Tax Liability or the realization of a Refund (or any related Tax cost or benefit), whether by receipt or as a credit or other offset to Taxes payable, by a Person in respect of any payment, transaction, occurrence or event, the time at which the amount of Income Taxes or Other Taxes paid (or Refund realized) by such Person is increased above (or reduced below) the amount of Income Taxes or Other Taxes that such Person would have been required to pay (or Refund that such Person would have realized) but for such payment, transaction, occurrence or event.
Aggregate Spin-Off Tax Liabilities shall mean the sum of the Spin-Off Tax Liabilities with respect to each Taxing Jurisdiction.
Breaching Party shall have the meaning set forth in Section 8(c) hereof.
Carryback shall mean the carryback of a Tax Attribute (including, without limitation, a net operating loss, a net capital loss or a tax credit) by a member of a Spinco Group from a Post-Distribution Taxable Period to a Pre-Distribution Taxable Period during which the member of the Spinco Group was included in a Combined Return filed for such Pre-Distribution Taxable Period.
Carryback Spinco shall have the meaning set forth in Section 7(b) hereof.
Cash Acquisition Merger shall mean a merger of a newly-formed Subsidiary of a Spinco with a corporation, limited liability company, limited partnership, general partnership or joint venture (in each case, not previously owned directly or indirectly by such Spinco) pursuant to which such Spinco acquires such corporation, limited liability company, limited partnership, general partnership or joint venture solely for cash and no Equity Securities of such Spinco or any Subsidiary of such Spinco are issued, sold, redeemed or acquired, directly or indirectly.
Code shall mean the Internal Revenue Code of 1986, as amended.
Combined Return shall mean a consolidated, combined or unitary Income Tax Return or Other Tax Return that includes, by election or otherwise, one or more members of the Parent Group together with one or more members of a Spinco Group.
Compensatory Equity Interests shall have the meaning set forth in Section 11(a).
Delayed Common Stock shall have the meaning ascribed to such term in the EMA.
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Distribution or Distributions shall mean, individually or collectively, the Ticketmaster Spinco Distribution, the Interval Spinco Distribution, the HSN Spinco Distribution and the Tree Spinco Distribution.
Distribution Date shall mean, with respect to a Spinco, the date on which the Distribution of such Spinco is completed.
Distribution-Related Proceeding shall mean any Proceeding in which the IRS, another Tax Authority or any other party asserts a position that could reasonably be expected to adversely affect the Tax-Free Status of any of the Spin-Off-Related Transactions.
EMA shall mean the Employee Matters Agreement by and among Parent and the Spincos dated as of August 20, 2008.
Employing Party shall have the meaning set forth in Section 11(a) hereof.
Equity Securities shall mean any stock or other securities treated as equity for federal income tax purposes, options, warrants, rights, convertible debt, or any other instrument or security that affords any Person the right, whether conditional or otherwise, to acquire stock or to be paid an amount determined by reference to the value of stock.
Fifty-Percent or Greater Interest shall have the meaning ascribed to such term for purposes of Sections 355(d) and (e) of the Code.
Final Determination shall mean the final resolution of liability for any Tax, which resolution may be for a specific issue or adjustment or for a taxable period, (a) by IRS Form 870 or 870-AD (or any successor forms thereto), on the date of acceptance by or on behalf of the taxpayer, or by a comparable form under the laws of any other Taxing Jurisdiction, except that a Form 870 or 870-AD or comparable form shall not constitute a Final Determination to the extent that it reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for Refund or the right of the Tax Authority to assert a further deficiency in respect of such issue or adjustment or for such taxable period (as the case may be); (b) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable; (c) by a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable agreement under the laws of any other Taxing Jurisdiction; (d) by any allowance of a Refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such Refund may be recovered (including by way of offset) by the Taxing Jurisdiction imposing such Tax; or (e) by any other final disposition, including by reason of the expiration of the applicable statute of limitations or by mutual agreement of the parties.
Group shall mean the Parent Group, the Ticketmaster Spinco Group, the Interval Spinco Group, the HSN Spinco Group or the Tree Spinco Group, as applicable.
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HSN Spinco Consolidated Group shall mean the affiliated group of corporations (within the meaning of Section 1504(a) of the Code without regard to the exclusions in Section 1504(b)(1) through (8)) of which HSN Spinco is the common parent, determined immediately after the HSN Spinco Distribution (and any predecessor or successor to such affiliated group other than the Parent Consolidated Group or any other Spinco Consolidated Group).
HSN Spinco Distribution shall mean the distribution by Parent of all the common stock of HSN Spinco pro rata to holders of Distributing Common Stock and Distributing Class B Common Stock.
HSN Spinco Group shall mean (a) HSN Spinco and each Person that is a direct or indirect Subsidiary of HSN Spinco (including any Subsidiary of HSN Spinco that is disregarded for federal Income Tax purposes (or for purposes of any state, local, or foreign tax law)) immediately after the HSN Spinco Distribution after giving effect to the Spin-Off-Related Transactions, (b) any corporation (or other Person) that shall have merged or liquidated into HSN Spinco or any such Subsidiary and (c) any predecessor or successor to any Person otherwise described in this definition.
Income Taxes (a) shall mean (i) any federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments that are based upon, measured by, or calculated with respect to (A) net income or profits (including, but not limited to, any capital gains, gross receipts, or minimum tax, and any tax on items of tax preference, but not including sales, use, value added, real property gains, real or personal property, transfer or similar taxes), (B) multiple bases (including, but not limited to, corporate franchise, doing business or occupation taxes), if one or more of the bases upon which such tax may be based, by which it may be measured, or with respect to which it may be calculated is described in clause (a)(i)(A) of this definition, or (C) any net worth, franchise or similar tax, in each case together with (ii) any interest and any penalties, fines, additions to tax or additional amounts imposed by any Tax Authority with respect thereto and (b) shall include any transferee or successor liability in respect of an amount described in clause (a) of this definition.
Income Tax Benefit shall mean, with respect to a Party and the members of its Group, the excess of (a) the hypothetical Income Tax Liability of the Party and the members of its Group for such taxable period, calculated as if such Carryback had not been utilized but with all other facts unchanged over (b) the actual Income Tax Liability of the Party or the members of its Group for such taxable period, calculated taking into account such Carryback (and treating any Refund as a negative Income Tax Liability for purposes of such calculation).
Income Tax Return shall mean any return, report, filing, statement, questionnaire, declaration or other document required to be filed with a Tax Authority in respect of Income Taxes.
Indemnified Party shall mean any Person seeking indemnification pursuant to the provisions of this Agreement.
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Indemnifying Party shall mean any Party from which any Indemnified Party is seeking indemnification pursuant to the provisions of this Agreement.
Indemnifying Spinco shall have the meaning set forth in Section 3(b) hereof.
Injured Party shall have the meaning set forth in Section 8(c) hereof.
Internal Distribution shall mean any of the Internal Restructuring Steps that is intended to qualify as a tax-free transaction under Section 355(a) and/or 368(a)(1)(D) of the Code.
Internal Restructuring Steps shall have the meaning set forth in the recitals to this Agreement.
Interval shall mean Interval Acquisition Corp.
Interval Spinco Consolidated Group shall mean the affiliated group of corporations (within the meaning of Section 1504(a) of the Code without regard to the exclusions in Section 1504(b)(1) through (8)) of which Interval Spinco is the common parent, determined immediately after the Interval Spinco Distribution (and any predecessor or successor to such affiliated group other than the Parent Consolidated Group or any other Spinco Consolidated Group).
Interval Spinco Distribution shall mean the distribution by Parent of all the common stock of Interval Spinco pro rata to holders of Distributing Common Stock and Distributing Class B Common Stock.
Interval Spinco Group shall mean (a) Interval Spinco and each Person that is a direct or indirect Subsidiary of Interval Spinco (including any Subsidiary of Interval Spinco that is disregarded for federal Income Tax purposes (or for purposes of any state, local, or foreign tax law)) immediately after the Interval Spinco Distribution after giving effect to the Spin-Off-Related Transactions, (b) any corporation (or other Person) that shall have merged or liquidated into Interval Spinco or any such Subsidiary and (c) any predecessor or successor to any Person otherwise described in this definition.
IRS shall mean the Internal Revenue Service.
IRS Ruling shall mean any private letter ruling issued by the IRS in connection with any of the Spin-Off-Related Transactions.
IRS Ruling Documents shall mean the request for a private letter ruling submitted by Parent to the IRS on April 11, 2008, together with the appendices and exhibits thereto, and any supplemental filings or other materials subsequently submitted to the IRS in connection with the Spin-Off-Related Transactions.
Losses shall mean any and all losses, liabilities, claims, damages, obligations, payments, costs and expenses, matured or unmatured, absolute or contingent,
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accrued or unaccrued, liquidated or unliquidated, known or unknown (including, without limitation, the costs and expenses of any and all Actions, threatened Actions, demands, assessments, judgments, settlements and compromises relating thereto and attorneys fees and any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any such Actions or threatened Actions).
Option shall have the meaning ascribed to such term in the EMA.
Other Tax Returns shall mean any return, report, filing, statement, questionnaire, declaration or other document required to be filed with a Tax Authority in respect of Other Taxes.
Other Taxes shall mean any federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments of any nature whatsoever, and without limiting the generality of the foregoing, shall include superfund, sales, use, ad valorem, value added, occupancy, transfer, recording, withholding, payroll, employment, excise, occupation, premium or property taxes (in each case, together with any related interest, penalties and additions to tax, or additional amounts imposed by any Tax Authority thereon); provided , however , that Other Taxes shall not include any Income Taxes.
Parent Consolidated Group shall mean the affiliated group of corporations (within the meaning of Section 1504(a) of the Code without regard to the exclusions in Section 1504(b)(1) through (8)) of which Parent is the common parent (and any predecessor or successor to such affiliated group).
Parent Group shall mean (a) Parent and each Person that is a direct or indirect Subsidiary of Parent (including any Subsidiary of Parent that is disregarded for federal Income Tax purposes (or for purposes of any state, local, or foreign tax law)) immediately after the Distributions after giving effect to the Spin-Off-Related Transactions, (b) any corporation (or other Person) that shall have merged or liquidated into Parent or any such Subsidiary and (c) any predecessor or successor to any Person otherwise described in this definition.
Parent Separate Return shall mean any Separate Return required to be filed by Parent or any member of the Parent Group.
Participating Spinco shall have the meaning set forth in Section 6(d) hereof.
Party or Parties shall have the meaning set forth in the recitals to this Agreement.
Permitted Transaction shall mean any transaction that satisfies the requirements of Sections 4(c).
Person shall mean any individual, partnership, joint venture, limited liability company, corporation, association, joint stock company, trust, unincorporated
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organization or similar entity or a governmental authority or any department or agency or other unit thereof.
Post-Distribution Taxable Period shall mean, with respect to a Spinco and its Subsidiaries, a taxable period that begins after the Distribution Date of such Spinco.
Pre-Distribution Taxable Period shall mean, with respect to a Spinco and its Subsidiaries, a taxable period that ends on or before the Distribution Date of such Spinco.
Proceeding shall mean any audit or other examination, or judicial or administrative proceeding relating to liability for, or Refunds or adjustments with respect to, Taxes.
Refund shall mean any refund of Taxes, including any reduction in Tax Liabilities by means of a credit, offset or otherwise.
Relying Party shall have the meaning set forth in Section 8(d) hereof.
Representative shall mean with respect to a Person, such Persons officers, directors, employees and other authorized agents.
Representing Spinco shall have the meaning set forth in Section 4(a) hereof.
Requesting Spinco shall have the meaning set forth in Section 4(c)(ii) hereof.
Responsible Spinco shall have the meaning set forth in Section 4(e) hereof.
Restriction Period shall mean, with respect to a Spinco, the period beginning on the Distribution Date after the Distribution of such Spinco and ending on the twenty five (25) month anniversary thereof.
Separate Return shall mean (a) in the case of any Tax Return required to be filed by any member of a Spinco Group (including any consolidated, combined or unitary return), any such Tax Return that does not include any member of the Parent Group or any member of any other Spinco Group and (b) in the case of any Tax Return required to be filed by any member of the Parent Group (including any consolidated, combined or unitary return), any such Tax Return that does not include any member of a Spinco Group.
Separation Agreement shall have the meaning set forth in the recitals of this Agreement.
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Specified Restructuring Income Taxes shall mean any Income Taxes of Parent or any entity that is or was a direct or indirect Subsidiary of Parent prior to the Distributions resulting from (a) the transfer of any Equity Securities of Interval to Interval Spinco prior to the Interval Spinco Distribution; (b) any transfer of assets by FLMG Holdings Corp. to TM Spinco or one of its direct or indirect Subsidiaries prior to the TM Spinco Distribution; (c) any Internal Distribution (or portion thereof) failing to achieve Tax-Free Status, (d) the sum of (i) any money and (ii) the fair market value of other property, in each case, transferred by any Spinco or Interval to any shareholder of such Spinco or Interval in connection with a Distribution exceeding (x) such shareholders tax basis in its shares of stock of such Spinco or Interval or (y) the net tax basis of any assets contributed by such shareholder to such Spinco, and (e) the triggering of any excess loss account as a result of the Distributions or the Internal Restructuring Steps.
Spinco Adjustment shall mean, with respect to a Spinco, an adjustment of any item of income, gain, loss, deduction or credit on a Combined Return that is attributable to members of such Spinco Group (including, in the case of any state or local consolidated, combined or unitary income or franchise Taxes, a change in one or more apportionment factors of members of a Spinco Group) pursuant to a Final Determination for a Pre-Distribution Taxable Period.
Spinco Business shall mean, with respect to a Spinco, each trade or business actively conducted (within the meaning of Section 355(b) of the Code) by such Spinco or any member of its respective Spinco Group immediately after the Distribution of such Spinco, as set forth in the IRS Ruling Documents (if applicable) and the Tax Opinion Documents.
Spinco Consolidated Group or Spinco Consolidated Groups shall mean, individually or collectively, the Ticketmaster Spinco Consolidated Group, the Interval Spinco Consolidated Group, the HSN Spinco Consolidated Group, and the Tree Spinco Consolidated Group.
Spinco Group or Spinco Groups shall mean, individually or collectively, the Ticketmaster Spinco Group, the Interval Spinco Group, the HSN Spinco Group, and the Tree Spinco Group.
Spinco Separate Return shall mean any Separate Return required to be filed by a Spinco or any member of its respective Spinco Group, including, without limitation, (a) any consolidated federal Income Tax Returns of the Spinco Consolidated Group required to be filed with respect to a Post-Distribution Taxable Period and (b) any consolidated federal Income Tax Returns for any group of which any member of the Spinco Group was the common parent.
Spin-Off-Related Transactions shall mean, with respect to a Distribution of a Spinco, any related contribution of assets to, and assumption of liabilities by, such Spinco, the Distribution of such Spinco and any Internal Restructuring
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Steps associated with such Distribution, in each case, as described in the Transactions Memo.
Spin-Off Tax Liabilities shall mean, with respect to any Taxing Jurisdiction, the sum of (a) any increase in a Tax Liability (or reduction in a Refund) Actually Realized as a result of any corporate-level gain or income recognized with respect to the failure of any of the Spin-Off-Related Transactions to qualify for Tax-Free Status under the Income Tax laws of such Taxing Jurisdiction pursuant to any settlement, Final Determination, judgment, assessment, proposed adjustment or otherwise, (b) interest on such amounts calculated pursuant to such Taxing Jurisdictions laws regarding interest on Tax liabilities at the highest Underpayment Rate in such Taxing Jurisdiction from the date such additional gain or income was recognized until full payment with respect thereto is made pursuant to Section 3 hereof (or in the case of a reduction in a Refund, the amount of interest that would have been received on the foregone portion of the Refund but for the failure of any of the Spin-Off-Related Transactions to qualify for Tax-Free Status), and (c) any penalties actually paid to such Taxing Jurisdiction that would not have been paid but for the failure of any of the Spin-Off-Related Transactions to qualify for Tax-Free Status in such Taxing Jurisdiction.
Supplying Party shall have the meaning set forth in Section 8(d) hereof.
Tax Attribute shall mean a consolidated, combined or unitary net operating loss, net capital loss, unused investment credit, unused foreign tax credit, or excess charitable contribution (as such terms are used in Treasury Regulations 1.1502-79 and 1.1502-79A or comparable provisions of foreign, state or local tax law), or a minimum tax credit or general business credit.
Tax Authority shall mean a governmental authority (foreign or domestic) or any subdivision, agency, commission or authority thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including, without limitation, the IRS).
Tax Benefits shall have the meaning set forth in Section 3(a) hereof.
Tax Counsel shall mean tax counsel or an accounting firm of recognized national standing that is acceptable to Parent in its sole discretion.
Taxes shall mean Income Taxes and Other Taxes.
Tax-Free Status shall mean, with respect to a Distribution, the qualification of each of the Spin-Off-Related Transactions (other than the transfer by Parent of its membership interests in LendingTree, LLC to LendingTree Holdings Corp.) as (a) a transaction described in Sections 355(a) and/or 368(a)(1)(D) of the Code (or, in the case of the Internal Restructuring Steps associated with a Distribution, the qualification of such Internal Restructuring Steps as one or more transactions that are generally tax-free for federal income tax purposes pursuant to Section 351, Section 355, Section 368(a), Sections 332 and 337, or otherwise), (b) except with respect to the Distribution of Tree Spinco, as a transaction in which the stock distributed thereby is
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qualified property for purposes of Section 361(c) of the Code, and (c) as a transaction in which the Parties and the members of their respective Groups recognize no income or gain other than intercompany items or excess loss accounts, if any, taken into account pursuant to the Treasury Regulations promulgated pursuant to Section 1502 of the Code.
Taxing Jurisdiction shall mean the United States and every other government or governmental unit having jurisdiction to tax one or more of the Parties or any of their respective Affiliates.
Tax Liabilities shall mean any liabilities for Taxes.
Tax Opinions shall mean the tax opinions issued by Tax Counsel in connection with the Spin-Off-Related Transactions.
Tax Opinion Documents shall mean the Tax Opinions and the information and representations provided by, or on behalf of, the Parties to Tax Counsel in connection therewith.
Tax-Related Losses shall mean:
(a) the Aggregate Spin-Off Tax Liabilities,
(b) all accounting, legal and other professional fees, and court costs incurred in connection with any settlement, Final Determination, judgment or other determination with respect to such Aggregate Spin-Off Tax Liabilities, and
(c) all costs, expenses and damages associated with stockholder litigation or controversies and any amount paid by a Party in respect of the liability of shareholders, whether paid to shareholders or to the IRS or any other Tax Authority payable by a Party or its respective Affiliates, in each case, resulting from the failure of any of the Spin-Off-Related Transactions to qualify for Tax-Free Status.
Ticketmaster Spinco Consolidated Group shall mean the affiliated group of corporations (within the meaning of Section 1504(a) of the Code without regard to the exclusions in Section 1504(b)(1) through (8)) of which Ticketmaster Spinco is the common parent, determined immediately after the Ticketmaster Spinco Distribution (and any predecessor or successor to such affiliated group other than the Parent Consolidated Group or any other Spinco Consolidated Group).
Ticketmaster Spinco Distribution shall mean the distribution by Parent of all the common stock of Ticketmaster Spinco pro rata to holders of Distributing Common Stock and Distributing Class B Common Stock.
Ticketmaster Spinco Group shall mean (a) Ticketmaster Spinco and each Person that is a direct or indirect Subsidiary of Ticketmaster Spinco (including any Subsidiary of Ticketmaster Spinco that is disregarded for federal Income Tax purposes (or for purposes of any state, local, or foreign tax law)) immediately after the Ticketmaster Spinco Distribution after giving effect to the Spin-Off-Related
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Transactions, (b) any corporation (or other Person) that shall have merged or liquidated into Ticketmaster Spinco or any such Subsidiary and (c) any predecessor or successor to any Person otherwise described in this definition.
Tree Spinco Consolidated Group shall mean the affiliated group of corporations (within the meaning of Section 1504(a) of the Code without regard to the exclusions in Section 1504(b)(1) through (8)) of which Tree Spinco is the common parent, determined immediately after the Tree Spinco Distribution (and any predecessor or successor to such affiliated group other than the Parent Consolidated Group or any other Spinco Consolidated Group).
Tree Spinco Distribution shall mean the distribution by Parent of all the common stock of Tree Spinco pro rata to holders of Distributing Common Stock and Distributing Class B Common Stock.
Tree Spinco Group shall mean (a) Tree Spinco and each Person that is a direct or indirect Subsidiary of Tree Spinco (including any Subsidiary of Tree Spinco that is disregarded for federal Income Tax purposes (or for purposes of any state, local, or foreign tax law)) immediately after the Tree Spinco Distribution after giving effect to the Spin-Off-Related Transactions, (b) any corporation (or other Person) that shall have merged or liquidated into Tree Spinco or any such Subsidiary and (c) any predecessor or successor to any Person otherwise described in this definition.
Underpayment Rate shall mean the annual rate of interest described in Section 6621(c) of the Code for large corporate underpayments of Income Tax (or similar provision of state, local, or foreign Income Tax law, as applicable), as determined from time to time.
Unqualified Tax Opinion shall mean an unqualified opinion of Tax Counsel on which Parent may rely to the effect that a transaction (a) will not disqualify any of the Spin-Off-Related Transactions from having Tax-Free Status, assuming that the Spin-Off-Related Transactions would have qualified for Tax-Free Status if such transaction did not occur, and (b) will not adversely affect any of the conclusions set forth in the IRS Ruling (if applicable) or the Tax Opinions; provided , that any tax opinion obtained in connection with a proposed acquisition of Equity Securities of a Spinco (or any entity treated as a successor to such Spinco), other than Tree Spinco, entered into during the Restriction Period shall not qualify as an Unqualified Opinion unless such tax opinion concludes that such proposed acquisition will not be treated as part of a plan (or series of related transactions), within the meaning of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder, that includes the Distribution of such Spinco.
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(b) Withholding and Reporting . The Employing Party (or any of its Affiliates) that is entitled to claim the Tax deductions described in 11(a) with respect to Compensatory Equity Interests held by a current or former employee shall be responsible for all applicable Taxes (including, but not limited to, withholding and excise taxes) and shall satisfy, or shall cause to be satisfied, all applicable Tax reporting obligations with respect to such Compensatory Equity Interests; provided , that in the event Compensatory Equity Interests are settled by the issuing corporation on a net basis that takes into account withholding or other Taxes for which the holder of the Compensatory Equity Interest is responsible, the issuing corporation shall promptly remit to the Employing Party an amount of cash equal to the fair market value of the shares withheld by the issuing corporation in respect of such withholding or other Taxes.
If to Parent, to:
IAC/InterActiveCorp
555 West 18th Street
New York, NY 10011
Attention: General Counsel
Telecopier: (212) 632-9642
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Pamela S. Seymon, Esq.
Telecopier: (212) 403-2000
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If to TM Spinco:
Ticketmaster
8800 Sunset Boulevard
West Hollywood, California 90069
Attention: General Counsel
Telecopier: (310) 360-3373
If to Interval Spinco:
Interval Leisure Group, Inc.
6262 Sunset Drive
Miami, Florida 33143
Attention: General Counsel
Telecopier: (305) 667-2072
If to HSN Spinco:
1 HSN Drive
St. Petersburg, Florida 33729
Attention: General Counsel
Telecopier: (727) 872-6866
If to Tree Spinco:
11115 Rushmore Drive
Charlotte, North Carolina 28277
Attention: General Counsel
Telecopier: (949) 255-5139
Such names and addresses may be changed by notice given in accordance with this Section 12.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf by its officers thereunto duly authorized, all as of the day and year first written above.
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IAC/INTERACTIVECORP |
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By: |
/s/ Gregory Blatt |
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Name: |
Gregory R. Blatt |
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Title: |
Executive Vice President |
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TICKETMASTER |
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By: |
/s/ Joanne Hawkins |
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Name: |
Joanne Hawkins |
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Title: |
Vice President and Assistant Secretary |
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INTERVAL LEISURE GROUP, INC. |
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By: |
/s/ Joanne Hawkins |
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Name: |
Joanne Hawkins |
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Title: |
Vice President and Assistant Secretary |
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HSN, INC. |
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By: |
/s/ Tanya Stanich |
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Name: |
Tanya Stanich |
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Title: |
Vice President and Assistant Secretary |
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TREE.COM, INC. |
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By: |
/s/ Tanya Stanich |
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Name: |
Tanya Stanich |
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Title: |
Vice President and Assistant Secretary |
[Signature Page to Tax Sharing Agreement]
Exhibit 10.3
EMPLOYEE MATTERS AGREEMENT
BY AND AMONG
IAC/INTERACTIVECORP
TICKETMASTER,
INTERVAL LEISURE GROUP, INC.,
HSN, INC.,
AND
TREE.COM, INC.
Dated as of August 20, 2008
TABLE OF CONTENTS
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ARTICLE I |
DEFINITIONS |
1 |
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ARTICLE II |
GENERAL PRINCIPLES |
10 |
2.1 |
Employment |
10 |
2.2 |
Assumption and Retention of Liabilities; Related Assets |
11 |
2.3 |
SpinCo Participation in IAC Benefit Plans |
12 |
2.4 |
Terms of Participation by SpinCo Employees in SpinCo Benefit Plans |
12 |
2.5 |
Commercially Reasonable Efforts |
13 |
2.6 |
Regulatory Compliance |
13 |
2.7 |
Approval by IAC as Sole Stockholder |
13 |
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ARTICLE III |
SAVINGS PLANS |
14 |
3.1 |
Savings Plans |
14 |
3.2 |
SpinCo Savings Plans |
14 |
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ARTICLE IV |
HEALTH AND WELFARE PLANS |
16 |
4.1 |
Transition Period |
16 |
4.2 |
Establishment of Health and Welfare Plans |
16 |
4.3 |
Retention of Sponsorship and Liabilities |
17 |
4.4 |
Vendor Contracts |
18 |
4.5 |
Flexible Benefit Plan |
19 |
4.6 |
Workers Compensation Liabilities |
19 |
4.7 |
Payroll Taxes and Reporting of Compensation |
20 |
4.8 |
COBRA and HIPAA Compliance |
20 |
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ARTICLE V |
EXECUTIVE BENEFITS AND OTHER BENEFITS |
21 |
5.1 |
Assumption of Obligations |
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5.2 |
IAC Incentive Plans |
22 |
5.3 |
IAC Long-Term Incentive Plans |
22 |
5.4 |
Registration Requirements |
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5.5 |
Executive Deferred Compensation Plans |
40 |
5.6 |
Severance |
41 |
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ARTICLE VI |
GENERAL AND ADMINISTRATIVE |
42 |
6.1 |
Sharing of Participant Information |
42 |
6.2 |
Reasonable Efforts/Cooperation |
42 |
6.3 |
No Third-Party Beneficiaries |
42 |
6.4 |
Audit Rights With Respect to Information Provided |
43 |
6.5 |
Fiduciary Matters |
43 |
6.6 |
Consent of Third Parties |
43 |
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ARTICLE VII |
MISCELLANEOUS |
44 |
7.1 |
Effect If Effective Time Does Not Occur |
44 |
7.2 |
Relationship of Parties |
44 |
7.3 |
Affiliates |
44 |
7.4 |
Notices |
44 |
7.5 |
Abandonment |
45 |
7.6 |
Incorporation of Separation Agreement Provisions |
45 |
i
EMPLOYEE MATTERS AGREEMENT
This Employee Matters Agreement (this Agreement ), dated as of August 20, 2008, with effect as of the Effective Time, is entered into by and among IAC/InterActiveCorp, a Delaware corporation ( IAC ), Ticketmaster, a Delaware corporation and a wholly owned subsidiary of IAC ( TM ), Interval Leisure Group, Inc., a Delaware corporation and a wholly owned subsidiary of IAC ( Interval ), HSN, Inc., a Delaware corporation and a wholly owned subsidiary of IAC ( HSN ) and Tree.com, Inc., a Delaware corporation and a wholly owned subsidiary of IAC ( Tree , together with TM, Interval and HSN, the SpinCos , the SpinCos and IAC, collectively, the Parties ).
RECITALS :
WHEREAS, IAC, TM, Interval, HSN and Tree have entered into a Separation and Distribution Agreement pursuant to which the Parties have set out the terms on which, and the conditions subject to which, they wish to implement the Separation (as defined in the Separation Agreement) (such agreement, as amended, restated or modified from time to time, the Separation Agreement ).
WHEREAS, in connection therewith, IAC, TM, Interval, HSN and Tree have agreed to enter into this Agreement to allocate between them assets, liabilities and responsibilities with respect to certain employee compensation, pension and benefit plans, programs and arrangements and certain employment matters.
NOW THEREFORE, in consideration of the mutual agreements, covenants and other provisions set forth in this Agreement, the Parties hereby agree as follows:
Unless otherwise defined in this Agreement, capitalized words and expressions and variations thereof used in this Agreement or in its Schedules have the meanings set forth below. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Separation Agreement.
Accelerated RSUs has the meaning set forth in Section 5.3(g).
Active HSN Participants has the meaning set forth in Section 5.5(c).
Adjustment Ratio means (a) the IAC Stock Value divided by (b) the sum of (i) 0.5 of the IAC Post-Separation Stock Value plus (ii) 0.2 of the TM Stock Value (or if IAC does not distribute shares of TM Common Stock on the Distribution Date, zero) plus (iii) 0.2 of the Interval Stock Value (or if IAC does not distribute shares of Interval Common Stock on the Distribution Date, zero) plus (iv) 0.2 of the HSN Stock Value (or if IAC does not distribute shares of HSN Common Stock on the Distribution Date, zero) plus (v) 0.03333 of the Tree Stock Value (or if IAC does not distribute shares of Tree Common Stock on the Distribution Date, zero).
Affiliate has the meaning given that term in the Separation Agreement.
Agreement means this Employee Matters Agreement, including all the Schedules hereto.
Ancillary Agreements has the meaning given that term in the Separation Agreement.
Approved Leave of Absence means an absence from active service (a) due to an individuals inability to perform his or her regular job duties by reason of illness or injury and resulting in eligibility to receive benefits pursuant to the terms of the IAC Short-Term Disability Plan or the IAC Long-Term Disability Plan, or (b) pursuant to an approved leave policy with a guaranteed right of reinstatement.
ASO Contract has the meaning set forth in Section 4.4(a).
Auditing Party has the meaning set forth in Section 6.4(b).
Award (a) when immediately preceded by IAC, means IAC Restricted Stock and IAC Restricted Stock Units, (b) when immediately preceded by TM, means TM Restricted Stock and TM Restricted Stock Units, (c) when immediately preceded by Interval, means Interval Restricted Stock and Interval Restricted Stock Units, (d) when immediately preceded by HSN, means HSN Restricted Stock and HSN Restricted Stock Units and (e) when immediately preceded by Tree means Tree Restricted Stock and Tree Restricted Stock Units.
Benefit Plan means, with respect to an entity or any of its Subsidiaries, (a) each employee welfare benefit plan (as defined in Section 3(1) of ERISA) and all other employee benefits arrangements, policies or payroll practices (including, without limitation, severance pay, sick leave, vacation pay, salary continuation, disability, retirement, deferred compensation, bonus, stock option or other equity-based compensation, hospitalization, medical insurance or life insurance) sponsored or maintained by such entity or by any of its Subsidiaries (or to which such entity or any of its Subsidiaries contributes or is required to contribute) and (b) all employee pension benefit plans (as defined in Section 3(2) of ERISA), occupational pension plan or arrangement or other pension arrangements sponsored, maintained or contributed to by such entity or any of its Subsidiaries (or to which such entity or any of its Subsidiaries contributes or is required to contribute). For the avoidance of doubt, Benefit Plans includes Health and Welfare Plans. When immediately preceded by IAC, Benefit Plan means any Benefit Plan sponsored, maintained or contributed to by IAC or any IAC Entity. When immediately preceded by TM, Benefit Plan means any Benefit Plan sponsored, maintained or contributed to by TM or any TM Entity. When immediately preceded by Interval, Benefit Plan means any Benefit Plan sponsored, maintained or contributed to by Interval or any Interval Entity. When immediately preceded by HSN, Benefit Plan means any Benefit Plan sponsored, maintained or contributed to by HSN or any HSN Entity. When immediately preceded by Tree, Benefit Plan means any Benefit Plan sponsored, maintained or contributed to by Tree or any Tree Entity.
Cliff Vest with respect to any Award means the lump-sum vesting of 100% of such Award following the passage of a multi-year period after the date of grant. The terms Cliff Vesting and Cliff Vested shall have correlative meanings.
Close of the Distribution Date means 11:59:59 P.M. New York City time, on the Distribution Date.
COBRA means the continuation coverage requirements for group health plans under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as codified in Code § 4980B and ERISA §§ 601 through 608.
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Code means the Internal Revenue Code of 1986, as amended, or any successor federal income tax law. Reference to a specific Code provision also includes any proposed, temporary or final regulation in force under that provision.
Committee has the meaning set forth in Section 5.3(a).
Delayed Common Stock has the meaning set forth in Section 5.3(g).
Delayed HSN Common Stock has the meaning set forth in Section 5.3(g).
Delayed IAC Common Stock has the meaning set forth in Section 5.3(g).
Delayed Interval Common Stock has the meaning set forth in Section 5.3(g).
Delayed TM Common Stock has the meaning set forth in Section 5.3(g).
Delayed Tree Common Stock has the meaning set forth in Section 5.3(g).
Distribution Date means the first date on which one or more of the Distributions (as defined in the Separation Agreement) occurs.
Effective Time has the meaning given that term in the Separation Agreement.
Effective Time Year means the calendar year during which the Effective Time occurs.
ERISA means the Employee Retirement Income Security Act of 1974, as amended. Reference to a specific provision of ERISA also includes any proposed, temporary or final regulation in force under that provision.
FICA has the meaning set forth in Section 5.3(g).
FICA Amount has the meaning set forth in Section 5.3(g).
Five Way IAC RSUs has the meaning set forth in Section 5.3(g).
Former HSN Employee means any individual who as of the Effective Time is a former employee of the IAC Group, the TM Group (as defined in the Separation Agreement), the Interval Group (as defined in the Separation Agreement), the HSN Group (as defined in the Separation Agreement) or the Tree Group (as defined in the Separation Agreement), and whose last employment with any such group, was with an HSN Entity.
Former IAC Employee means any individual who as of the Effective Time is a former employee of the IAC Group, the TM Group (as defined in the Separation Agreement), the Interval Group (as defined in the Separation Agreement), the HSN Group (as defined in the Separation Agreement) or the Tree Group (as defined in the Separation Agreement), and whose last employment with any such group, was with an IAC Entity.
Former Interval Employee means any individual who as of the Effective Time is a former employee of the IAC Group, the TM Group (as defined in the Separation Agreement), the Interval Group (as defined in the Separation Agreement), the HSN Group (as defined in the Separation Agreement) or the Tree Group (as defined in the Separation Agreement), and whose last employment with any such group, was with an Interval Entity.
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Former SpinCo Employee means a Former TM Employee, Former Interval Employee, Former HSN Employee and/or Former Tree Employee as the context requires.
Former TM Employee means any individual who as of the Effective Time is a former employee of the IAC Group, the TM Group (as defined in the Separation Agreement), the Interval Group (as defined in the Separation Agreement), the HSN Group (as defined in the Separation Agreement) or the Tree Group (as defined in the Separation Agreement), and whose last employment with any such group, was with a TM Entity.
Former Tree Employee means any individual who as of the Effective Time is a former employee of the IAC Group, the TM Group (as defined in the Separation Agreement), the Interval Group (as defined in the Separation Agreement), the HSN Group (as defined in the Separation Agreement) or the Tree Group (as defined in the Separation Agreement), and whose last employment with any such group, was with a Tree Entity.
Group Insurance Policies has the meaning set forth in Section 4.4(a).
Growth Share Awards has the meaning set forth in Section 5.3(g).
H&W Transition Period has the meaning set forth in Section 4.1(a).
Health and Welfare Plans means any plan, fund or program which was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, medical, dental, surgical or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs or day care centers, scholarship funds, or prepaid legal services, including any such plan, fund or program as defined in Section 3(1) of ERISA. When immediately preceded by IAC, Health and Welfare Plans means each Health and Welfare Plan that is an IAC Benefit Plan. When immediately preceded by TM, Health and Welfare Plans means each Health and Welfare Plan that is a TM Benefit Plan. When immediately preceded by Interval, Health and Welfare Plans means each Health and Welfare Plan that is an Interval Benefit Plan. When immediately preceded by HSN, Health and Welfare Plans means each Health and Welfare Plan that is an HSN Benefit Plan. When immediately preceded by Tree, Health and Welfare Plans means each Health and Welfare Plan that is a Tree Benefit Plan.
HIPAA means the health insurance portability and accountability requirements for group health plans under the Health Insurance Portability and Accountability Act of 1996, as amended.
HMO means a health maintenance organization that provides benefits under the IAC Medical Plans, the TM Medical Plans, the Interval Medical Plans, the HSN Medical Plans or the Tree Medical Plans.
HMO Agreements has the meaning set forth in Section 4.4(a).
HSN has the meaning set forth in the Preamble of this Agreement.
HSN Common Stock means common stock, par value $0.01 per share, of HSN.
HSN Deferred Compensation Plan has the meaning set forth in Section 5.5(c).
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HSN Employee means any individual who, immediately prior to the Effective Time, is either actively employed by, or then on Approved Leave of Absence from, an HSN Entity.
HSN Entities has the meaning given that term in the Separation Agreement.
HSN Executive Benefit Plans means the executive benefit and nonqualified plans, programs, and arrangements established, sponsored, maintained, or agreed upon, by any HSN Entity for the benefit of employees and former employees of any HSN Entity before the Close of the Distribution Date.
HSN Factor means the product obtained by multiplying (a) 0.2 and (b) the Adjustment Ratio.
HSN Long-Term Incentive Plan means the long-term incentive plan or program to be established by HSN, effective prior to the Effective Time.
HSN Ratio means the quotient obtained by dividing (a) the IAC Stock Value by (b) the HSN Stock Value.
HSN Retirement Savings Plan means the 401(k) and profit sharing plan to be established by HSN pursuant to Section 3.2 of this Agreement, as in effect as of the time relevant to the applicable provision of this Agreement.
HSN Retirement Savings Plan Trust means a trust relating to the HSN Retirement Savings Plan intended to qualify under Section 401(a) and be exempt under Section 501(a) of the Code.
HSN Stock Value means the closing per-share price of HSN Common Stock in the when issued market as listed on the NASDAQ as of 4:00 P.M. New York City time on August 20, 2008.
IAC has the meaning set forth in the Preamble of this Agreement.
IAC Common Stock means shares of common stock, $0.001 par value per share, of IAC.
IAC Deferred Compensation Plan has the meaning set forth in Section 5.5(a).
IAC Employee means any individual who, immediately prior to the Effective Time, is either actively employed by, or then on Approved Leave of Absence from, any IAC Entity.
IAC Entities means the members of the IAC Group, as defined in the Separation Agreement, and their respective Subsidiaries and Affiliates, excluding any business or operations (whether current or historical, regardless of whether discontinued or sold) that are included in the TM Group, the Interval Group, the HSN Group or the Tree Group.
IAC Executive Benefit Plans means the executive benefit and nonqualified plans, programs, and arrangements established, sponsored, maintained, or agreed upon, by any IAC Entity for the benefit of employees and former employees of any IAC Entity before the Close of the Distribution Date.
IAC Factor means the product obtained by multiplying (a) 0.5 and (b) the Adjustment Ratio.
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IAC Flexible Benefit Plan has the meaning set forth in Section 4.5.
IAC Incentive Plans means any of the annual or short term incentive plans of IAC, all as in effect as of the time relevant to the applicable provisions of this Agreement.
IAC Long-Term Incentive Plans means any of the HSN, Inc. 1997 Stock and Annual Incentive Plan, USA Interactive Amended and Restated 2000 Annual Stock and Incentive Plan, IAC/InterActiveCorp 2005 Stock and Annual Incentive Plan, Home Shopping Network, Inc. 1996 Stock Option Plan for Employees, Equity and Bonus Compensation Agreement with Barry Diller, Ticketmaster Stock Plan, Expedia, Inc. Amended and Restated 2001 Stock Plan, Expedia, Inc. 1999 Stock Option Plan, the Hotels Reservations Network, Inc. 2000 Stock Plan, Ticketmaster Online-Citysearch, Inc. 1996 Stock Option Plan, Ticketmaster Online-Citysearch, Inc. 1998 Stock Option Plan, Ticketmaster 1999 Stock Plan, ServiceMagic, Inc. Amended and Restated 1999 Stock Option Plan, 1998 Stock Option Plan of LendingTree, Inc., LendingTree Amended and Restated 1999 Stock Incentive Plan, Amended and Restated 2001 Stock Incentive Plan of LendingTree, Inc., the Silver King Communications, Inc. Directors Stock Option Plan, Hotwire, Inc. 2000 Equity Incentive Plan, Cornerstone Brands, Inc. 1998 Stock Incentive Plan, AskJeeves, Inc. 1996 Equity Incentive Plan, AskJeeves, Inc 1999 Equity Incentive Plan and any other stock incentive plan of IAC, all as in effect as of the time relevant to the applicable provisions of this Agreement.
IAC Post-Separation Stock Value means the closing per-share price of IAC Common Stock trading in the ex-distribution market as listed on the NASDAQ as of 4:00 P.M. New York City time on August 20, 2008.
IAC Rabbi Trust has the meaning set forth in Section 5.5(a).
IAC Ratio means the quotient obtained by dividing (a) the IAC Stock Value by (b) the IAC Post-Separation Stock Value.
IAC Retirement Savings Plan means the InterActiveCorp Retirement Savings Plan as in effect as of the time relevant to the applicable provision of this Agreement.
IAC Stock Value means the closing per share price of IAC Common Stock trading regular way with due bills as listed on the NASDAQ as of 4:00 P.M. New York City time on August 20, 2008.
Immediately after the Distribution Date means on the first moment of the day after the Distribution Date.
Interval has the meaning set forth in the Preamble of this Agreement.
Interval Common Stock means common stock, par value $0.01 per share, of Interval.
Interval Employee means any individual who, immediately prior to the Effective Time, is either actively employed by, or then on Approved Leave of Absence from, an Interval Entity.
Interval Entities has the meaning given that term in the Separation Agreement.
Interval Executive Benefit Plans means the executive benefit and nonqualified plans, programs, and arrangements established, sponsored, maintained, or agreed upon, by
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any Interval Entity for the benefit of employees and former employees of any Interval Entity before the Close of the Distribution Date.
Interval Factor means the product obtained by multiplying (a) 0.2 and (b) the Adjustment Ratio.
Interval Long-Term Incentive Plan means the long-term incentive plan or program to be established by Interval, effective prior to the Effective Time.
Interval Ratio means the quotient obtained by dividing (a) the IAC Stock Value by (b) the Interval Stock Value.
Interval Retirement Savings Plan means the 401(k) and profit sharing plan to be established by Interval pursuant to Section 3.2 of this Agreement, as in effect as of the time relevant to the applicable provision of this Agreement.
Interval Retirement Savings Plan Trust means a trust relating to the Interval Retirement Savings Plan intended to qualify under Section 401(a) and be exempt under Section 501(a) of the Code.
Interval Stock Value means the closing per-share price of Interval Common Stock in the when issued market as listed on the NASDAQ as of 4:00 P.M. New York City time on August 20, 2008.
Liability has the meaning given that term in the Separation Agreement.
Medical Plan when immediately preceded by IAC, means the Benefit Plan under which medical benefits are provided to IAC Employees established and maintained by IAC. When immediately preceded by TM, Medical Plan means the Benefit Plan under which medical benefits are provided to TM Employees to be established by TM pursuant to Article IV. When immediately preceded by Interval, Medical Plan means the Benefit Plan under which medical benefits are provided to Interval Employees to be established by Interval pursuant to Article IV. When immediately preceded by HSN, Medical Plan means the Benefit Plan under which medical benefits are provided to HSN Employees to be established by HSN pursuant to Article IV. When immediately preceded by Tree, Medical Plan means the Benefit Plan under which medical benefits are provided to Tree Employees to be established by Tree pursuant to Article IV.
NASDAQ means the National Association of Securities Dealers Inc. Automated Quotation System.
Net RSU Shares has the meaning set forth in Section 5.3(l).
Non-parties has the meaning set forth in Section 6.4(c).
Option when immediately preceded by IAC, means an option (either nonqualified or incentive) to purchase shares of IAC Common Stock pursuant to an IAC Long-Term Incentive Plan. When immediately preceded by TM, Option means an option (either nonqualified or incentive) to purchase shares of TM Common Stock following the Effective Time pursuant to the TM Long-Term Incentive Plan. When immediately preceded by Interval, Option means an option (either nonqualified or incentive) to purchase shares of Interval Common Stock following the Effective Time pursuant to the Interval Long-Term Incentive Plan. When immediately preceded by HSN, Option means an option (either
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nonqualified or incentive) to purchase shares of HSN Common Stock following the Effective Time pursuant to the HSN Long-Term Incentive Plan. When immediately preceded by Tree, Option means an option (either nonqualified or incentive) to purchase shares of Tree Common Stock following the Effective Time pursuant to the Tree Long-Term Incentive Plan.
Participating Company means (a) IAC and (b) any other Person (other than an individual) that participates in a plan sponsored by any IAC Entity.
Parties has the meaning set forth in the Preamble of this Agreement.
Person has the meaning given that term in the Separation Agreement.
Restricted Stock (a) when immediately preceded by IAC, means shares of IAC Common Stock that are subject to restrictions on transferability and a risk of forfeiture and are issued under an IAC Benefit Plan, (b) when immediately preceded by TM, means shares of TM Common Stock that are subject to restrictions on transferability and a risk of forfeiture and are issued under a TM Benefit Plan, (c) when immediately preceded by Interval, means shares of Interval Common Stock that are subject to restrictions on transferability and a risk of forfeiture and are issued under an Interval Benefit Plan, (d) when immediately preceded by HSN, means shares of HSN Common Stock that are subject to restrictions on transferability and a risk of forfeiture and are issued under an HSN Benefit Plan and (e) when immediately preceded by Tree, means shares of Tree Common Stock that are subject to restrictions on transferability and a risk of forfeiture and are issued under a Tree Benefit Plan.
Restricted Stock Unit (a) when immediately preceded by IAC, means units issued under an IAC Benefit Plan representing a general unsecured promise by IAC to pay the value of shares of IAC Common Stock in cash or shares of IAC Common Stock, (b) when immediately preceded by TM, means units issued under the TM Long-Term Incentive Plan representing a general unsecured promise by TM to pay the value of shares of TM Common Stock in cash or shares of TM Common Stock, (c) when immediately preceded by Interval, means units issued under the Interval Long-Term Incentive Plan representing a general unsecured promise by Interval to pay the value of shares of Interval Common Stock in cash or shares of Interval Common Stock, (d) when immediately preceded by HSN, means units issued under the HSN Long-Term Incentive Plan representing a general unsecured promise by HSN to pay the value of shares of HSN Common Stock in cash or shares of HSN Common Stock and (e) when immediately preceded by Tree, means units issued under the Tree Long-Term Incentive Plan representing a general unsecured promise by Tree to pay the value of shares of Tree Common Stock in cash or shares of Tree Common Stock.
Securities Act has the meaning set forth in Section 5.4(a).
Separation has the meaning given that term in the Separation Agreement.
Separation Agreement has the meaning set forth in the Recitals to this Agreement.
SpinCos has the meaning set forth in the Preamble of this Agreement.
SpinCo Employee means a TM Employee, Interval Employee, HSN Employee and/or Tree Employee as the context requires.
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SpinCo Long-Term Incentive Plans means the HSN Long-Term Incentive Plan, the Interval Long-Term Incentive Plan, the TM Long-Term Incentive Plan and/or the Tree Long-Term Incentive Plan, as applicable.
TM has the meaning set forth in the Preamble of this Agreement.
TM Common Stock means common stock, par value $0.01 per share, of TM.
TM Deferred Compensation Plan has the meaning set forth in Section 5.5(a).
TM Employee means any individual who, immediately prior to the Effective Time, is either actively employed by, or then on Approved Leave of Absence from, a TM Entity.
TM Entities has the meaning given that term in the Separation Agreement.
TM Executive Benefit Plans means the executive benefit and nonqualified plans, programs, and arrangements established, sponsored, maintained, or agreed upon, by any TM Entity for the benefit of employees and former employees of any TM Entity before the Close of the Distribution Date.
TM Factor means the product obtained by multiplying (a) 0.2 and (b) the Adjustment Ratio.
TM Long-Term Incentive Plan means the long-term incentive plan or program to be established by TM, effective prior to the Effective Time.
TM Participants has the meaning set forth in Section 5.5(a).
TM Rabbi Trust has the meaning set forth in Section 5.5(a).
TM Ratio means the quotient obtained by dividing (a) the IAC Stock Value by (b) the TM Stock Value.
TM Retirement Savings Plan means the 401(k) and profit sharing plan to be established by TM pursuant to Section 3.2 of this Agreement, as in effect as of the time relevant to the applicable provision of this Agreement.
TM Retirement Savings Plan Trust means a trust relating to the TM Retirement Savings Plan intended to qualify under Section 401(a) and be exempt under Section 501(a) of the Code.
TM Stock Value means the closing per-share price of TM Common Stock in the when issued market as listed on the NASDAQ as of 4:00 P.M. New York City time on August 20, 2008.
Tree has the meaning set forth in the Preamble of this Agreement.
Tree Common Stock means common stock, par value $0.01 per share, of Tree.
Tree Deferred Compensation Plan has the meaning set forth in Section 5.5(d).
Tree Employee means any individual who, immediately prior to the Effective Time, is either actively employed by, or then on Approved Leave of Absence from, a Tree Entity.
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Tree Entities has the meaning given that term in the Separation Agreement.
Tree Executive Benefit Plans means the executive benefit and nonqualified plans, programs, and arrangements established, sponsored, maintained, or agreed upon, by any Tree Entity for the benefit of employees and former employees of any Tree Entity before the Close of the Distribution Date.
Tree Factor means the product obtained by multiplying (a) 0.03333 and (b) the Adjustment Ratio.
Tree Long-Term Incentive Plan means the long-term incentive plan or program to be established by Tree, effective prior to the Effective Time.
Tree Participants has the meaning set forth in Section 5.5(d).
Tree Rabbi Trust has the meaning set forth in Section 5.5(d).
Tree Ratio means the quotient obtained by dividing (a) the IAC Stock Value by (b) the Tree Stock Value.
Tree Retirement Savings Plan means the 401(k) and profit sharing plan to be established by Tree pursuant to Section 3.2 of this Agreement, as in effect as of the time relevant to the applicable provision of this Agreement.
Tree Retirement Savings Plan Trust means a trust relating to the Tree Retirement Savings Plan intended to qualify under Section 401(a) and be exempt under Section 501(a) of the Code.
Tree Stock Value means the closing per-share price of Tree Common Stock in the when issued market as listed on the NASDAQ as of 4:00 P.M. New York City time on August 20, 2008.
U.S. means the 50 United States of America and the District of Columbia.
Withheld Shares has the meaning set forth in Section 5.3(g).
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For purposes of this Agreement, a compensable injury shall be deemed to be sustained upon the occurrence of the event giving rise to eligibility for workers compensation benefits
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or at the time that an occupational disease becomes manifest, as the case may be. The Parties shall cooperate with respect to any notification to appropriate governmental agencies of the effective time and the issuance of new, or the transfer of existing, workers compensation insurance policies and claims handling contracts.
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The Parties hereto agree that the consummation of the transactions contemplated by this Agreement and the Separation Agreement shall not constitute a COBRA qualifying event for any purpose of COBRA.
The Parties hereto agree that none of the transactions contemplated by the Separation Agreement or any of the Ancillary Agreements, including, without limitation, this Agreement, constitutes a change in control, change of control or similar term, as applicable, within the meaning of any Benefit Plan, any IAC Long-Term Incentive Plan or any of the SpinCo Long-Term Incentive Plans.
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provided , however , that the exercise price , the number of shares of IAC Common Stock, TM Common Stock, Interval Common Stock, HSN Common Stock and Tree Common Stock subject to such options and the terms and conditions of exercise of such options shall be determined in a manner consistent with the requirements of Section 409A of the Code; provided , further , that, in the case of any IAC Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code as of immediately prior to the Effective Time, the exercise price, the number of shares of IAC Common Stock, TM Common Stock, Interval Common Stock, HSN Common Stock and Tree Common Stock subject to such option and the terms and conditions of exercise of such option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code.
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Each SpinCo shall be responsible for all applicable Taxes (including, but not limited to, withholding and excise taxes) with respect to the settlement prior to the Effective Time and pursuant to this Section 5.3(g)(ii) of Accelerated RSUs held by such SpinCos SpinCo Employees and Former SpinCo Employees.
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5.4 Registration Requirements .
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5.5 Executive Deferred Compensation Plans .
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5.6 Severance .
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6.1 Sharing of Participant Information . IAC and each of the SpinCos shall share with one another, and IAC shall cause each other IAC Entity to share, TM shall cause each other TM Entity to share, Interval shall cause each other Interval Entity to share, HSN shall cause each other HSN Entity to share and Tree shall cause each other Tree Entity to share with one another and their respective agents and vendors (without obtaining releases) all participant information necessary for the efficient and accurate administration of each of the IAC Benefit Plans, the TM Benefit Plans, the Interval Benefit Plans, the HSN Benefit Plans and the Tree Benefit Plans. IAC, TM, Interval, HSN, Tree and their respective authorized agents shall, subject to applicable laws, be given reasonable and timely access to, and may make copies of, all information relating to the subjects of this Agreement in the custody of such other Party, to the extent necessary for such administration. Until December 31, 2008, all participant information shall be provided in the manner and medium applicable to Participating Companies in IAC Benefit Plans generally, and thereafter until December 31, 2009, all participant information shall be provided in a manner and medium as may be agreed to by IAC, TM, Interval, HSN and/or Tree, as applicable.
6.2 Reasonable Efforts/Cooperation . Each of the Parties hereto will use its commercially reasonable efforts to promptly take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the transactions contemplated by this Agreement. Each of the Parties hereto shall cooperate fully on any issue relating to the transactions contemplated by this Agreement for which the other Party seeks a determination letter or private letter ruling from the Internal Revenue Service, an advisory opinion from the Department of Labor or any other filing (including, but not limited to, securities filings (remedial or otherwise)), consent or approval with respect to or by a governmental agency or authority in any jurisdiction in the United States or abroad.
6.3 No Third-Party Beneficiaries . This Agreement is solely for the benefit of the Parties and is not intended to confer upon any other Persons any rights or remedies hereunder. Except as expressly provided in this Agreement, nothing in this Agreement shall preclude IAC or any other IAC Entity, at any time after the Close of the Distribution Date, from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in any respect any IAC Benefit Plan, any benefit under any Benefit Plan or any trust, insurance policy or funding vehicle related to any IAC Benefit Plan. Except as expressly provided in this Agreement, nothing in this Agreement shall preclude TM or any other TM Entity, at any time after the Close of the
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(a) if to IAC:
IAC/InterActiveCorp
555 West 18
th
Street
New York, NY 10011
Attention: General Counsel
Facsimile No.: (212) 314-7379
(b) if to TM:
Ticketmaster
8800 West Sunset Blvd
West Hollywood, CA 90069
Attention: General Counsel
Facsimile No.: (310) 360-3373
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(c) if to Interval:
Interval Leisure Group, Inc.
6262 Sunset Drive
Miami, FL 33143
Attention: General Counsel
Facsimile No.: (305) 667-2072
(d) if to HSN:
HSN, Inc.
1 HSN Drive
St. Petersburg, FL 33729
Attention: General Counsel
Facsimile No.: (727) 872-6866
(e) if to Tree:
Tree.com, Inc.
11115 Rushmore Drive
Charlotte, NC 28277
Attention: General Counsel
Facsimile No.: (949) 255-5139
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties have caused this Employee Matters Agreement to be duly executed as of the day and year first above written.
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IAC/INTERACTIVECORP |
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By: |
/s/ Gregory Blatt |
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Name: |
Gregory R. Blatt |
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Title: |
Executive Vice President |
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TICKETMASTER |
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By: |
/s/ Joanne Hawkins |
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Name: |
Joanne Hawkins |
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Title: |
Vice President and Assistant Secretary |
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INTERVAL LEISURE GROUP, INC. |
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By: |
/s/ Joanne Hawkins |
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Name: |
Joanne Hawkins |
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Title: |
Vice President and Assistant Secretary |
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HSN, INC. |
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By: |
/s/ Tanya Stanich |
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Name: |
Tanya Stanich |
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Title: |
Vice President and Assistant Secretary |
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TREE.COM, INC. |
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By: |
/s/ Tanya Stanich |
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Name: |
Tanya Stanich |
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Title: |
Vice President and Assistant Secretary |
[Signature Page to Employee Matters Agreement]
Exhibit 10.4
TRANSITION SERVICES AGREEMENT
by and among
IAC/INTERACTIVECORP,
HSN, INC.,
INTERVAL LEISURE GROUP, INC.
TICKETMASTER
and
TREE.COM, INC.
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT, dated as of August 20, 2008 (this Services Agreement ), is entered into by and among IAC/InterActiveCorp, a Delaware corporation ( IAC or New IAC ), HSN, Inc., a Delaware corporation and wholly owned subsidiary of IAC ( HSNSpinco or HSN ), Interval Leisure Group, Inc., a Delaware corporation and wholly owned subsidiary of IAC ( Interval Spinco or Interval ), Ticketmaster, a Delaware corporation and wholly owned subsidiary of IAC ( TMSpinco or TM ), and Tree.com, Inc., a Delaware corporation and wholly owned subsidiary of IAC ( Tree Spinco or LT and, together with HSNSpinco, Interval Spinco and TMSpinco, the Spincos and, the Spincos together with IAC, the Parties and each a Party ).
WHEREAS, the Board of Directors of IAC has determined it is appropriate and desirable to separate IAC and the Spincos into five publicly-traded companies all as set forth in that certain Separation and Distribution Agreement, dated as of even date herewith, by and among the Parties (the Separation Agreement );
WHEREAS, IAC and the Spincos expect to enter into the Separation Agreement on the date hereof, which sets forth, among other things, the assets, liabilities, rights and obligations of each of the Parties for purposes of effecting the separation of IAC and the Spincos; and
WHEREAS, in connection with such separation, (a) each of the Spincos desires to procure certain services from IAC and/or one or more of the other Spincos, and IAC and such other Spincos each are willing to provide such services, during a transition period commencing on the applicable Effective Date (as defined in Section 7.01), on the terms and conditions set forth in this Services Agreement; and (b) IAC desires to procure certain services from the Spincos, and each of the Spincos is willing to provide such services to IAC, during a transition period commencing on the applicable Effective Date, on the terms and conditions set forth in this Services Agreement.
NOW THEREFORE, in consideration of the mutual agreements, covenants and other provisions set forth in this Services Agreement, the Parties hereby agree as follows:
ARTICLE I
Definitions
1.01. All terms used herein and not defined herein shall have the meanings assigned to them in the Separation Agreement.
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ARTICLE II
Agreement To Provide and Accept Services
2.01. Provision of Services.
(a) On the terms and subject to the conditions contained herein, IAC agrees with each Spinco, as applicable, that it shall provide, or shall cause its Subsidiaries and Affiliates and their respective employees designated by IAC (such designated Subsidiaries, Affiliates and employees, together with IAC, being herein collectively referred to as the IAC Service Providers ) to provide, to such Spinco the services ( IAC Services ) listed on the Schedule of Services attached hereto (the Services Schedule ) as being performed by IAC or a member of its Corresponding Group identified in the column of the Services Schedule titled Spin Party and being received by such Spinco. Subject to Section 3.01 , any decisions as to which of the IAC Service Providers (including the decisions to use third parties) shall provide the IAC Services shall be made by IAC in its sole discretion, except to the extent specified in the Services Schedule. Each IAC Service shall be provided in exchange for the consideration set forth with respect to such IAC Service on the Services Schedule or as IAC and such Spinco may otherwise agree in writing. Each IAC Service shall be provided and accepted in accordance with the terms, limitations and conditions set forth herein and on the Services Schedule.
(b) On the terms and subject to the conditions contained herein, TMSpinco agrees with each other Spinco and IAC, as applicable, that it shall provide, or shall cause its Subsidiaries and Affiliates and their respective employees designated by it (such designated Subsidiaries, Affiliates and employees, together with TMSpinco, being herein collectively referred to as the Ticketmaster Service Providers ) to provide, to such other Spinco or IAC, as applicable, the services ( Ticketmaster Services ) listed on the Services Schedule as being performed by TM or a or a member of its Corresponding Group identified in the column of the Services Schedule titled Spin Party and being received by such other Spinco or IAC, as applicable. Subject to Section 3.01 , any decisions as to which of the Ticketmaster Service Providers (including the decisions to use third parties) shall provide the Ticketmaster Services shall be made by TMSpinco in its sole discretion, except to the extent specified in the Services Schedule. Each Ticketmaster Service shall be provided in exchange for the consideration set forth with respect to such Service on the Services Schedule or as TMSpinco and the applicable recipient of the Ticketmaster Services may otherwise agree in writing. Each Ticketmaster Service shall be provided and accepted in accordance with the terms, limitations and conditions set forth herein and on the Services Schedule.
(c) On the terms and subject to the conditions contained herein, HSNSpinco agrees with each other Spinco and IAC, as applicable, that it shall provide, or shall cause its Subsidiaries and Affiliates and their respective employees designated by it (such designated Subsidiaries, Affiliates and employees, together with HSNSpinco, being herein collectively referred to as the HSN Service Providers ) to provide, to such other Spinco or IAC, as applicable, the services ( HSN Services ) listed on the Services Schedule as being performed by HSN or a member of its Corresponding Group identified in the column of the Services Schedule titled Spin Party and being received by such other Spinco or IAC, as applicable. Subject to
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Section 3.01 , any decisions as to which of the HSN Service Providers (including the decisions to use third parties) shall provide the HSN Services shall be made by HSNSpinco in its sole discretion, except to the extent specified in the Services Schedule. Each HSN Service shall be provided in exchange for the consideration set forth with respect to such Service on the Services Schedule or as HSNSpinco and the applicable recipient of the HSN Services may otherwise agree in writing. Each HSN Service shall be provided and accepted in accordance with the terms, limitations and conditions set forth herein and on the Services Schedule.
(d) On the terms and subject to the conditions contained herein, Interval Spinco agrees with each other Spinco and IAC, as applicable, that it shall provide, or shall cause its Subsidiaries and Affiliates and their respective employees designated by it (such designated Subsidiaries, Affiliates and employees, together with Interval Spinco, being herein collectively referred to as the Interval Service Providers ) to provide, to such other Spinco or IAC, as applicable, the services ( Interval Services ) listed on the attached Services Schedule as being performed by Interval or a member of its Corresponding Group identified in the column of the Services Schedule titled Spin Party and being received by such other Spinco or IAC, as applicable. Subject to Section 3.01 , any decisions as to which of the Interval Service Providers (including the decisions to use third parties) shall provide the Interval Services shall be made by Interval Spinco in its sole discretion, except to the extent specified in the Services Schedule. Each Interval Service shall be provided in exchange for the consideration set forth with respect to such Service on the Services Schedule or as Interval Spinco and the applicable recipient of the Interval Services may otherwise agree in writing. Each Interval Service shall be provided and accepted in accordance with the terms, limitations and conditions set forth herein and on the Services Schedule.
(e) On the terms and subject to the conditions contained herein, Tree Spinco agrees with each other Spinco and IAC, as applicable, that it shall provide, or shall cause its Subsidiaries and Affiliates and their respective employees designated by it (such designated Subsidiaries, Affiliates and employees, together with Tree Spinco, being herein collectively referred to as the Tree Service Providers and together with the IAC Service Providers, the Ticketmaster Service Providers, the HSN Service Providers and the Interval Service Providers, being herein collectively referred to as the Service Providers ) to provide, to such other Spinco or IAC, as applicable, the services ( Tree Services and together with the IAC Services, the Ticketmaster Services, the HSN Services and the Interval Services, being herein collectively referred to as the Services ) listed on the Services Schedule as being performed by LT or a member of its Corresponding Group identified in the column of the Services Schedule titled Spin Party and being received by such other Spinco or IAC, as applicable. Subject to Section 3.01 , any decisions as to which of the Tree Service Providers (including the decisions to use third parties) shall provide the Tree Services shall be made by Tree Spinco in its sole discretion, except to the extent specified in the Services Schedule. Each Tree Service shall be provided in exchange for the consideration set forth with respect to such Service on the Services Schedule or as Tree Spinco and the applicable recipient of the Tree Services may otherwise agree in writing. Each Tree Service shall be provided and accepted in accordance with the terms, limitations and conditions set forth herein and on the Services Schedule.
(f) As used in this Services Agreement, the term Receiving Party shall mean the
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Party receiving (or the Party another member of whose Corresponding Group is receiving) the applicable Services from a Service Provider.
2.02. Books and Records; Availability of Information. Each Party shall create and maintain accurate books and records in connection with the provision of the Services performed or caused to be performed by it and, upon reasonable notice from a Receiving Party, shall make available for inspection and copying by such Receiving Partys agents such books and records to the extent relating to the Services provided to such Receiving Party hereunder during reasonable business hours with such inspection occurring no more than one (1) time during the term in which the Service Provider has provided the applicable Service to the Receiving Party. Moreover, such inspection shall be conducted by the Receive Party or its agents in a manner that will not unreasonably interfere with the normal business operations of the Service Provider. Each Receiving Party shall make available on a timely basis to the Service Providers all information and materials reasonably requested by such Service Providers to enable them to provide the applicable Services. Each Receiving Party shall provide to the Service Providers reasonable access to such Receiving Partys premises to the extent necessary for the purpose of providing the applicable Services.
ARTICLE III
Services; Payment; Independent Contractors
3.01. Services To Be Provided. (a) Unless otherwise agreed between the applicable Party providing Services hereunder and the Receiving Party (including to the extent specified in the applicable entry on the Services Schedule), (i) the Service Providers shall be required to perform the Services only in a manner, scope, nature and quality as provided by or within IAC that is similar in all material respects to the manner in which such Services were performed immediately prior to the applicable Effective Date, and (ii) the Services shall be used for substantially the same purposes and in substantially the same manner (including as to volume, amount, level or frequency, as applicable) as the Services have been used immediately prior to the applicable Effective Date; provided , however , that the applicable entry on the Services Schedule shall control the scope of the Service to be performed (to the extent provided therein), unless otherwise agreed in writing. Each Party and the Service Providers shall act under this Services Agreement solely as an independent contractor and not as an agent or employee of any other Party or any of such Partys Affiliates. As an independent contractor, all overhead and personnel necessary to the Services required of the Service Providers hereunder shall be the Service Providers sole responsibility and shall be at the Service Providers sole cost and expense. No Service Provider shall have the authority to bind the Receiving Party by contract or otherwise.
(b) The provision of Services by the Service Providers shall be subject to Article V hereof.
(c) Each Party agrees with each other Party providing Services to it hereunder to use its reasonable efforts to reduce or eliminate its dependency on such Services as soon as is
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reasonably practicable; provided that a breach of this Section 3.01(c) shall not affect a Service Providers obligation to provide any Service through the term applicable to such Service.
3.02. Each Receiving Party and Party providing Services to it hereunder will use good-faith efforts to reasonably cooperate with each other in all matters relating to the provision and receipt of Services. Such cooperation shall include obtaining all consents, licenses or approvals necessary to permit each such Party to perform its obligations to such Receiving Party hereunder; provided , however , under no circumstances shall any Service Provider be required to make any payments to any third party in respect of any such consents, licenses or approvals nor shall any Service Provider be required to make any alternative arrangements in the event that any such consents, licenses or approvals are not obtained.
3.03. Additional Services.
(a) From time to time during the term applicable to any Service being provided by a Service Provider, each Party may request any of the other Parties (i) to provide additional or different services which such other Party is not expressly obligated to provide under this Services Agreement if such services are of the type and scope provided by such providing Party within IAC during fiscal year 2008 or (ii) expand the scope of any Service (such additional or expanded services, the Additional Services ). The Party receiving such request shall consider such request in good faith and shall use commercially reasonable efforts to provide such Additional Service; provided , no Party shall be obligated to provide any Additional Services if it does not, in its reasonable judgment, have adequate resources to provide such Additional Services or if the provision of such Additional Services would interfere with the operation of its business. The Party receiving the request for Additional Services shall notify the requesting Party within fifteen (15) days as to whether it will or will not provide the Additional Services.
(b) If a Party agrees to provide Additional Services pursuant to Section 3.03(a) , then a representative of each applicable Party shall in good faith negotiate the terms of a supplement to the Services Schedule which will describe in detail the service, project scope, term, price and payment terms to be charged for the Additional Services. Once agreed to in writing, the supplement to the Services Schedule shall be deemed part of this Services Agreement as of such date and the Additional Services shall be deemed Services provided by such Service Provider to such Receiving Party hereunder, in each case subject to the terms and conditions of this Agreement.
3.04. Payments. Except as set forth on the Services Schedule, statements will be delivered to each applicable Receiving Party within fifteen (15) days after the end of each month by the Service Providers designated by each providing Party for Services provided by such Service Provider to the Receiving Party during the preceding month, and each such statement shall set forth a brief description of such Services, the amounts charged therefor, and, except as the applicable providing Party and Receiving Party may agree or as set forth on the Services Schedule, such amounts shall be due and payable by the Receiving Party within thirty (30) days after the date of such statement. Statements not paid within such 30-day period shall be subject to late charges, calculated at an interest rate per annum equal to the Prime Rate plus 2% (or the maximum legal rate, whichever is lower), and calculated for the actual number of days elapsed,
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accrued from the date on which such payment was due up to the date of the actual receipt of payment. Payments shall be made by wire transfer to an account designated in writing from time to time by the applicable Service Provider.
3.05. Disclaimer of Warranty. EXCEPT AS EXPRESSLY SET FORTH IN THIS SERVICES AGREEMENT, THE SERVICES TO BE PURCHASED UNDER THIS SERVICES AGREEMENT ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. In the event that the provision of any Service for the account of a Receiving Party by a Service Provider conflicts with such Service Providers provision of such Service for its own account or the account of other Receiving Parties, priority for the provision of such Service shall be allocated in a equitable manner on an aggregate basis, and in a manner consistent with the Receiving Partys level of use of such Service during fiscal year 2008 up to the applicable Effective Date (or as described in the applicable entry on the Services Schedule).
3.06. Taxes. In the event that any Tax is properly chargeable on the provision of the Services as indicated in the applicable entry on the Services Schedule, the Receiving Party shall be responsible for and shall pay to the applicable Service Provider the amount of any such Tax in addition to and at the same time as the applicable Service fees. All Service fees and other consideration will be paid free and clear of and without withholding or deduction for or on account of any Tax, except as may be required by law.
3.07. Use of Services. Each party, in its capacity as a Receiving Party agrees with each applicable providing Party that it shall not, and shall cause its Affiliates not to, resell any Services to any person whatsoever or permit the use of the Services by any person other than in connection with the conduct of such Receiving Partys operations as conducted immediately prior to the applicable Effective Date.
ARTICLE IV
Term of Services
4.01. Subject to Section 7.01 , the provision of each Service shall commence on the date hereof and shall terminate no later than twelve (12) months after the date hereof or as of the date indicated for each such Service in the applicable entry on the Services Schedule; provided , however , that subject to the applicable entry on the Services Schedule, any Service may be cancelled or reduced in amount or any portion thereof by the Receiving Party upon ninety (90) days written notice thereof (or such other notice period if one is set forth for such Service in the applicable entry on the Services Schedule) to the applicable Service Provider subject to the requirement that such Receiving Party pay to the applicable Service Provider the actual out-of-pocket costs incurred by such Service Provider, as well as the actual incremental internal costs incurred by such Service Provider, in each case directly resulting from such cancellation (including employee severance and other termination costs), which out-of-pocket and internal costs shall be set forth in a written statement provided by such Service Provider to the Receiving
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Party; provided , further , that such costs shall not exceed amounts payable hereunder in respect of the applicable Service for the ninety (90) days prior to such termination. The forgoing notwithstanding and subject to Section 7.02 , (i) a Service Provider may immediately terminate any individual Service provided to a Receiving Party in the event that the Receiving Party fails to make payments for such Service under Section 3.02 and has not cured such failure within thirty (30) days of written notice of such failure from the applicable Service Provider, and (ii) upon ninety (90) days written notice, the Service Provider may terminate any Service provided to a Receiving Party at such time as the Service Provider no longer provides the same Service to itself for its own account.
4.02. In the event a Receiving Party requests an extension of the term applicable to the provision of Services, such request shall be considered in good faith by the applicable Service Provider. Any terms, conditions or costs or fees to be paid by the Receiving Party for Services provided during an extended term will be on terms mutually acceptable to such Service Provider and Receiving Party. For the avoidance of doubt, under no circumstances shall a Service Provider be required to extend the term of provision of any Service if (i) the Service Provider does not, in its reasonable judgment, have adequate resources to continue providing such Services, (ii) the extension of the term would interfere with the operation of the Service Providers business or (iii) the extension would require capital expenditure on the part of the Service Provider or otherwise require the Service Provider to renew or extend any Contract with any third party.
ARTICLE V
Force Majeure
5.01. The Service Providers shall not be liable for any expense, loss or damage whatsoever arising out of any interruption of Service or delay or failure to perform under this Services Agreement that is due to acts of God, acts of a public enemy, acts of terrorism, acts of a nation or any state, territory, province or other political division thereof, changes in applicable law, fires, hurricanes, floods, epidemics, riots, theft, quarantine restrictions, freight embargoes or other similar causes beyond the reasonable control of the Service Providers. In any such event, the applicable Service Providers obligations hereunder shall be postponed for such time as its performance is suspended or delayed on account thereof. Each Service Provider will promptly notify the recipient of the Service, either orally or in writing, upon learning of the occurrence of such event of force majeure. Upon the cessation of the force majeure event, such Service Provider will use commercially reasonable efforts to resume, or to cause any other relevant Service Provider to resume, its performance with the least practicable delay ( provided that, at the election of the applicable Receiving Party, the applicable term for such suspended Service shall be extended by the length of the force majeure event).
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ARTICLE VI
Liabilities
6.01. Consequential and Other Damages. None of the Service Providers shall be liable to any Receiving Party with respect to this Services Agreement, whether in contract, tort (including negligence and strict liability) or otherwise, for any special, indirect, incidental or consequential damages whatsoever (except, in each case, to the extent any amount is paid to third parties by such Receiving Party or its Affiliates) which in any way arise out of, relate to or are a consequence of, the performance or nonperformance by it hereunder or the provision of, or failure to provide, any Service hereunder, including with respect to loss of profits, business interruptions or claims of customers.
6.02. Limitation of Liability. Subject to Section 6.03 hereof, the liability of any Service Provider with respect to this Services Agreement to any Receiving Party or in respect of any Services provided to such Receiving Party or any act or failure to act in connection herewith (including, but not limited to, the performance or breach hereof), or from the sale, delivery, provision or use of any Service provided under or covered by this Services Agreement, whether in contract, tort (including negligence and strict liability) or otherwise, shall be limited to actions or omissions resulting from intentional breach of this Services Agreement or gross negligence, and, in any event, such liability shall not exceed the fees previously paid to such Service Provider by such Receiving Party during the term of the applicable Service giving rise thereto.
6.03. Obligation to Re-perform. In the event of any breach of this Services Agreement by any Service Provider resulting from any error or defect in the performance of any Service (which breach such Service Provider can reasonably be expected to cure by re-performance in a commercially reasonable manner), the Service Provider shall use its reasonable commercial efforts to correct in all material respects such error, defect or breach or re-perform in all material respects such Service upon receipt of the written request of the applicable Receiving Party.
6.04. Indemnity. Except as otherwise provided in this Service Agreement (including the limitation of liability provisions in this Article VI ), each Party shall indemnify, defend and hold harmless each other Party from and against any Liability arising out of the intentional breach hereunder or gross negligence of the Indemnifying Party or its Affiliates, employees, agents, or contractors (including with respect to the performance or nonperformance of any Service hereunder). The procedures set forth in Sections 6.04 and 6.05 of the Separation Agreement shall apply to any claim for indemnification hereunder.
ARTICLE VII
Effectiveness; Certain Deemed References; Termination
7.01. Effectiveness; Certain Substitutions . The provision of Services hereunder to any Spinco by each other applicable Party and to each other applicable Party by such Spinco shall commence as of the Distribution Date for such Spinco (the time of commencement of the provision of such Services being referred to as the applicable Effective Date ); provided , that in
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the event Services are contemplated to be provided hereunder to such Spinco by another Spinco (a Later-Spun Spinco ) the spinoff of which shall not have been effected prior to or substantially simultaneously with the spinoff of such first-mentioned Spinco, references herein and in the Services Schedule to such Later-Spun Spinco in its capacity as Service Provider to such first-mentioned Spinco shall be deemed references to IAC until the Distribution Date for such Later-Spun Spinco; and, provided , further , that in the event Services are contemplated to be provided hereunder by such first-mentioned Spinco to any Later-Spun Spinco, to the extent requested in writing by IAC (a) references herein and in the Services Schedule to such Later-Spun Spinco in its capacity as Receiving Party of Services from such Spinco shall be deemed references to IAC until the Distribution Date for such Later-Spun Spinco or (b) the provision of such Service shall be suspended until the Distribution Date for such Later-Spun Spinco (it being understood that any such suspension shall not increase the term during which the Service Provider would otherwise have been required to provide such Service).
7.02 Termination. Notwithstanding anything herein to the contrary, with respect to each pair of Parties (i.e., with respect to IAC and TMSpinco; IAC and HSNSpinco; IAC and Interval Spinco; IAC and Tree Spinco; TMSpinco and HSN Spinco; TMSpinco and Interval Spinco; TMSpinco and Tree Spinco; HSNSpinco and Interval Spinco; HSNSpinco and Tree Spinco; and Interval Spinco and Tree Spinco) the rights and obligations of each such Party in respect of such other Party under this Services Agreement shall terminate, and the obligation of the applicable Service Provider to provide or cause to be provided any applicable Service shall cease, on the earliest to occur of (i) the last date indicated for the termination of any Service provided by one such Party to the other such Party on the Services Schedule, as the case may be, (ii) the date on which the provision of all Services by either such Party to the other such Party has been cancelled pursuant to Article IV hereof or (iii) the date on which this Services Agreement, to the extent of the rights and obligations of such pair of Parties to each other, is terminated by either such Party, as the case may be, in accordance with the terms of Section 7.03 hereof; provided that, in each case, no such termination shall relieve any Party of any liability for any breach of any provision of this Services Agreement prior to the date of such termination.
7.03. Breach of Services Agreement; Dispute Resolution. Subject to Article VI hereof, and without limiting a Partys obligations under Section 4.01 , if a Party shall cause or suffer to exist any material breach of any of its obligations to any other Party (the Nonbreaching Party ) under this Services Agreement, including any failure to make a payment within thirty (30) days after receipt of the statement describing the Services provided for pursuant to Section 3.04 with respect to more than one Service provided hereunder, and such breaching Party does not cure such default in all material respects within thirty (30) days after receiving written notice thereof from the Nonbreaching Party, the Nonbreaching Party shall have the right to terminate this Services Agreement to the extent of the rights and obligations of such Nonbreaching Party and breaching Party to each other hereunder immediately thereafter. In the event a dispute arises between two or more Parties regarding the terms of this Services Agreement, such dispute shall be governed by Article IX of the Separation Agreement.
7.03. Sums Due. In addition to any other payments required pursuant to this Services Agreement, in the event of a termination of this Services Agreement with respect to the rights and obligations of a Service Provider and a Receiving Party to each other, such Service Provider
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shall be entitled to the immediate payment of, and such Receiving Party shall within three (3) Business Days, pay to such Service Provider, all accrued amounts for Services, Taxes and other amounts due from such Receiving Party to such Service Provider under this Services Agreement as of the date of termination.
7.04. Effect of Termination. Section 2.02 hereof and Articles V , VI , VII and VIII hereof shall survive any termination or partial termination of this Services Agreement.
ARTICLE VIII
Miscellaneous
8.01. Incorporation of Separation Agreement Provisions. The provisions of Article XIII of the Separation Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions shall apply as if fully set forth herein.
8.02. Ownership of Work Product. Subject to the Separation Agreement, (i) each Service Provider acknowledges and agrees that it will acquire no right, title or interest (including any license rights or rights of use) to any work product resulting from the provision of Services hereunder for the Receiving Partys exclusive use and such work product shall remain the exclusive property of the Receiving Party and (ii) each Receiving Party acknowledges and agrees that it will acquire no right, title or interest (other than a non-exclusive, worldwide right of use) to any work product resulting from the provision of Services hereunder that is not for the Receiving Partys exclusive use and such work product shall remain the exclusive property, subject to license, of the Service Provider.
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IN WITNESS WHEREOF, the Parties have caused this Services Agreement to be executed by their duly authorized representatives.
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IAC/InterActiveCorp,
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/s/ Gregory Blatt |
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Name: |
Gregory R. Blatt |
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Title: |
Executive Vice President |
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HSN, Inc.,
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/s/ Tanya Stanich |
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Name: |
Tanya Stanich |
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Title: |
Vice President
and Assistant
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Interval
Leisure Group, Inc.,
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/s/ Joanne Hawkins |
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Name: |
Joanne Hawkins |
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Title: |
Vice
President and Assistant
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Ticketmaster,
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/s/ Joanne Hawkins |
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Name: |
Joanne Hawkins |
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Title: |
Vice
President and Assistant
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Tree.com, Inc., |
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a Delaware corporation |
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Name: |
Tanya Stanich |
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Title: |
Vice
President and Assistant
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[Signature Page to Transition Services Agreement]
Exhibit 10.5
REGISTRATION RIGHTS AGREEMENT (TREE.COM)
REGISTRATION RIGHTS AGREEMENT (this Agreement ), dated as of August 20, 2008, is entered into by and among LIBERTY MEDIA CORPORATION, a Delaware corporation ( Liberty ), the LIBERTY PARTIES (as defined below) and TREE.COM, INC., a Delaware corporation (the Issuer ).
RECITALS:
WHEREAS , Liberty, IAC (as defined below) and the other parties named therein have entered into the Settlement Agreement (as defined below), pursuant to which, among other things, IAC has agreed to cause the Issuer to enter into this Agreement in connection with the Single-Tier Spinoff (as defined in the Settlement Agreement) of the Issuer; and
WHEREAS , IAC, Liberty USA Holdings, LLC, a Delaware limited liability company, and Liberty have entered into that certain Affiliate and Assignment Agreement, dated as of August 20, 2008, pursuant to which Liberty Sub assumed all of the rights, benefits, liabilities and obligations of each Liberty Party (as defined in the Settlement Agreement) signatory to the Spinco Agreement under the Settlement Agreement other than Liberty.
NOW, THEREFORE in consideration of the mutual promises and covenants set forth herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms . As used in the Agreement, the following terms shall have the meanings set forth below:
1933 Act means the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations promulgated thereunder, as the same shall be in effect from time to time.
1934 Act means the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations promulgated thereunder, as the same shall be in effect from time to time.
Affiliate means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such first Person. For purposes of this definition, the term control (including its correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by
contract or otherwise. For purposes of this definition, (i) natural persons shall not be deemed to be Affiliates of each other, (ii) none of IAC, Barry Diller or any of their respective Affiliates shall be deemed to be an Affiliate of Liberty, any Liberty Party or any of their respective Affiliates and (iii) none of the Spincos shall be deemed to be an Affiliate of Liberty, any Liberty Party or any of their respective Affiliates.
ASRS means an automatic shelf registration statement as defined in Rule 405 promulgated under the 1933 Act.
ASRS Eligible means the Issuer meets or is deemed to meet the eligibility requirements to file an ASRS as set forth in General Instruction I.D. to Form S-3.
beneficially own has the meaning set forth in Rule 13d-3 under the 1934 Act, as such Rule is in effect on the date hereof.
Blackout Notice has the meaning set forth in Section 2.05(a).
Blackout Period has the meaning set forth in Section 2.05(a).
Board of Directors means the Board of Directors of the Issuer or an authorized committee thereof.
Business Day means any day other than a Saturday, a Sunday or a day on which banks in New York City are authorized or obligated by law or executive order to close.
Common Stock means Common Stock, par value $.01 per shares, of the Issuer.
Consolidated Action means the actions consolidated under the caption IN RE IAC/INTERACTIVECORP., C.A. No. 3468-VCL, in the Court of Chancery, New Castle County, State of Delaware.
Demand Registration Statement has the meaning set forth in Section 2.01.
Demand Request has the meaning set forth in Section 2.01.
Disadvantageous Condition has the meaning set forth in Section 2.05(a).
Effective Time has the meaning set forth in Section 2.01.
Effectiveness End Date has the meaning set forth in Section 2.01.
Effectiveness Period has the meaning set forth in Section 2.01.
Free Writing Prospectus means each free writing prospectus within the meaning of Rule 405 promulgated under the 1933 Act.
Hedging Counterparty means a broker-dealer registered under Section 15(b) of the 1934 Act or an Affiliate thereof or any other financial institution that routinely engages in Hedging Transactions in the ordinary course of its business.
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Hedging Transaction means any transaction involving a security linked to the Registrable Shares or any security that would be deemed to be a derivative security (as defined in Rule 16a-1(c) under the 1934 Act) with respect to the Registrable Shares or any transaction (even if not a security) which would (were it a security) be considered such a derivative security, or which transfers some or all of the economic risk of ownership of the Registrable Shares, including any forward contract, equity swap, put or call, put or call equivalent position, collar, non-recourse loan, sale of exchangeable security or similar transaction. For the avoidance of doubt, the following transactions shall be deemed to be Hedging Transactions:
(b) transactions pursuant to which a Holder sells short Common Stock pursuant to a prospectus and delivers Registrable Shares to close out its short position;
(c) transactions by a Holder in which the Holder delivers, in a transaction exempt from registration under the 1933 Act, Registrable Shares to a Hedging Counterparty who may then publicly resell or otherwise transfer such Registrable Shares pursuant to a prospectus or an exemption from registration under the 1933 Act; and
(d) a loan or pledge of Registrable Shares to a Hedging Counterparty who may then become a Permitted Transferee and sell the loaned shares or, in an event of default in the case of a pledge, then sell the pledged shares, in each case, in a public transaction pursuant to a prospectus.
Holder means Liberty, each of the Liberty Parties and each Permitted Transferee, for so long as such Person beneficially owns Registrable Shares.
IAC means IAC/InterActiveCorp, a Delaware corporation.
Indemnified Party has the meaning set forth in Section 4.03.
Indemnifying Party has the meaning set forth in Section 4.03.
Inspectors has the meaning set forth in Section 3.01(j).
Lead Holder means, until such time as the Liberty Parties effect a Permitted Restricted Transfer, Liberty, and, thereafter, shall mean the Restricted Transferee in such Permitted Restricted Transfer.
Liability has the meaning set forth in Section 4.01.
Liberty Parties means Liberty USA Holdings, LLC, a Delaware limited liability company (and any successor or assign or acquirer of a Liberty Party (whether by merger, consolidation, sale of assets or otherwise) provided that such Liberty Party shall have caused such successor, assign or acquirer to enter into an agreement, in writing in form and substance
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reasonably satisfactory to the Issuer, to be bound by the terms and provisions of this Agreement as a condition of any such transaction.
Litigation has the meaning set forth in Section 6.12.
Lock-up Agreements has the meaning set forth in Article IV.
Market Value of a share of Common Stock on any Trading Day means the last reported sale price, regular way, of a share of such stock on such Trading Day or, in case there is no last reported sale price on such Trading Day, the average of the reported closing bid and asked prices regular way of a share of such stock on such Trading Day, in either case on the principal stock exchange on which shares of such stock are traded. The Market Value of a share of Common Stock on any day which is not a Trading Day shall be deemed to be the Market Value of a share of Common Stock on the immediately preceding Trading Day.
Maximum Number of Shares means, with respect to any underwritten offering, the maximum number of shares of Common Stock (including Registrable Shares) that the co-managing underwriters advise the Issuer can be included in such offering without having an adverse effect on such offering, including the price at which the shares can be sold.
Offering Confidential Information has the meaning set forth in Section 2.10(e)(i).
Original Amount means the number of shares of Common Stock constituting Registrable Shares on the date hereof (as such number shall be appropriately adjusted to give effect to any of the events described in Section 6.01).
Other Shares means shares of Common Stock, other than Spinoff Shares, acquired by the Liberty Parties consistent with the Spinco Agreement, including such shares as may be transferred to a Holder which transfer is, at the time of such transfer, permitted by the Spinco Agreement.
Other Shareholders means holders of Common Stock that have obtained registration rights from the Issuer (other than the Holders).
Permitted Restricted Transfer has the meaning given such term in the Spinco Agreement.
Permitted Transferee has the meaning set forth in Section 2.09.
Person means any individual, partnership, joint venture, corporation, limited liability company, trust, unincorporated organization, government or department or agency of a government.
Piggyback Notice has the meaning set forth in Section 2.10.
Piggyback Registration has the meaning set forth in Section 2.10.
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prospectus means the prospectus related to any Registration Statement (including a prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance on Rule 415), as amended or supplemented by any amendment (including post-effective amendments), pricing term sheet, Free Writing Prospectus or prospectus supplement, and all documents and materials incorporated by reference in such prospectus.
Records has the meaning set forth in Section 3.01(j).
Registrable Shares means, at any time, the Spinoff Shares and the Other Shares that are beneficially owned by any of the Holders; provided that any particular shares will cease to be Registrable Shares: (i) if and when such shares shall have been disposed of pursuant to an effective Registration Statement; (ii) if and when such shares shall have been sold pursuant to Rule 144 under the 1933 Act; (iii) if and when such shares shall have been otherwise transferred and new certificates for them not bearing a legend or instructions restricting further transfer shall have been delivered; and (iv) if and when such shares shall have ceased to be outstanding (for the avoidance of doubt, any shares held in the treasury of the Issuer or by a subsidiary of the Issuer shall not be considered outstanding). Spinoff Shares and Other Shares which are Registrable Shares shall also cease to be Registrable Shares if and when such shares may be disposed of by the holder thereof without volume, holding period or manner of sale restrictions.
Registration Expenses means the following expenses incurred in connection with any registration of Registrable Shares or, in the case of a Hedging Counterparty, if applicable, other shares of Common Stock, pursuant to this Agreement: (i) the fees, disbursements and expenses of the Issuers counsel and accountants; (ii) all filing fees in connection with the filing of any Registration Statement, any prospectus, any other offering documents and any amendments and supplements thereto; (iii) all expenses in connection with the qualification of the Registrable Shares or other shares of Common Stock to be disposed of for offering and sale or distribution under state securities laws (other than those contemplated in clause (C) to the proviso below); (iv) the filing fees incident to securing any required review by the Financial Industry Regulatory Authority of the terms of the sale or distribution of the Registrable Shares or other shares of Common Stock to be disposed of; (v) all security engraving and security printing expenses; and (vi) all expenses in connection with the listing of the Registrable Shares on the principal stock exchange on which other shares of Common Stock are listed ; provided, however, that the term Registration Expenses shall not include (A) the fees, disbursements and expenses of Special Counsel or any other counsel for the Holders; (B) all expenses incurred in connection with the printing, mailing and delivering of copies of any Registration Statement, any prospectus, any other offering documents and any amendments and supplements thereto to any underwriters and dealers; (C) the cost of preparing, printing or producing any agreements among underwriters, underwriting agreements, and blue sky or legal investment memoranda, any selling agreements and any other similar documents in connection with the offering, sale, distribution or delivery of the Registrable Shares or other shares of Common Stock to be disposed of, including any fees of counsel for any underwriters in connection with the qualification of the Registrable Shares or other shares of Common Stock to be disposed of for offering and sale or distribution under state securities laws; (D) any brokers commissions or underwriters discount, fee or commission relating to the sale of Registrable Shares or other shares of Common Stock and any other fees
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and disbursements of underwriters; and (E) costs and expenses of the Issuer relating to analyst or investor presentations.
Registration Statement means a Demand Registration Statement or a Section 2.10 Registration Statement, as the context requires.
Restricted Transferee has the meaning given such term in the Spinco Agreement.
Rule 144 means Rule 144 as promulgated by the SEC under the 1933 Act, as such Rule may be amended from time to time, or any similar successor rule promulgated by the SEC.
Rule 405 means Rule 405 as promulgated by the SEC under the 1933 Act, as such Rule may be amended from time to time, or any similar successor rule promulgated by the SEC
Rule 415 means Rule 415 as promulgated by the SEC under the 1933 Act, as such Rule may be amended from time to time, or any similar successor rule promulgated by the SEC.
S-3 Eligible means the Issuer meets or is deemed to meet the eligibility requirements to file on Form S-3 as set forth in General Instruction I.A. to Form S-3.
SEC means the Securities and Exchange Commission.
Section 2.10 Registration Statement has the meaning set forth in Section 2.10.
Settlement Agreement means the Agreement, dated as of May 13, 2008, among Liberty, the Liberty Parties and IAC entered into in connection with the settlement of the Consolidated Action.
Special Counsel means Baker Botts LLP, or such other law firm of national reputation as may be selected by the Lead Holder (or any other Holder who (together with its Affiliates), at the time of such selection, beneficially owns the highest percentage of the Registrable Shares) and notified in writing to the Issuer.
Spinco Agreement means the Settlement Agreement, as assumed by and assigned to the Issuer pursuant to Section 9(b) thereof.
Spinoff Shares means the shares of Common Stock issued to the Liberty Parties as a result of the Single-Tier Spinoff (as defined in the Spinco Agreement) of the Issuer, including such shares as may be transferred to a Holder which transfer is, at the time of such transfer, permitted by the Spinco Agreement.
Total Registrable Amount means the Original Amount on the date hereof plus the number of Other Shares acquired after the date hereof, in each case appropriately adjusted, but only with respect to the number of Registrable Shares on the date of such event, to give effect to any of the events described in Section 6.01.
Trading Day means a day on which shares of the Common Stock are traded on the principal United States securities exchange on which such shares are listed.
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ARTICLE II
REGISTRATION RIGHTS
Section 2.01. Registration Upon Demand . At any time after the date hereof and for so long as there are any Registrable Shares, upon the written request of the Lead Holder acting on behalf of Holders holding an amount of Registrable Shares equal to at least ten percent (10%) of the Original Amount (a Demand Request ), the Issuer shall prepare a registration statement (a Demand Registration Statement ) on (i) if the Issuer is then S-3 Eligible, a Form S-3 or (ii) if the Issuer is not then S-3 Eligible, any other appropriate form under the 1933 Act, for the type of offering contemplated by the Demand Request (which may include an offering to be made on a delayed or continuous basis under Rule 415); provided , that the aggregate offering price applicable to any Demand Registration Statement so requested to be filed shall not be less than $75 million (determined by multiplying the number of Registrable Shares to be included in such Demand Registration Statement by the Market Value on the day on which such Demand Request is received by the Issuer). The Demand Request shall specify, for each Holder, the number of Registrable Shares to be included in such Demand Registration Statement for such Holders account. If the Issuer is ASRS Eligible at the time any Demand Request is received for a shelf registration statement, the Issuer shall use commercially reasonable efforts to cause the Demand Registration Statement to be an ASRS. Subject to Section 2.05, the Issuer shall use its commercially reasonable efforts to cause the Demand Registration Statement (i) to be filed with the SEC as promptly as reasonably practicable following the receipt of the Demand Request, (ii) to become effective as promptly as reasonably practicable after filing, and (iii) to remain continuously effective during the time period (the Effectiveness Period ) commencing on the date such Demand Registration Statement is declared effective (the Effective Time ) and ending on (A) the date that there are no longer any Registrable Shares covered by such Demand Registration Statement or (B) if earlier, the 30th day (90th day if the Demand Registration Statement is on Form S-3) after the Demand Registration Statement is initially declared effective (the ending date specified in this clause (iii), the Effectiveness End Date ). No more than three (3) Demand Requests may be made. In no event shall the Issuer be required to include a Holders Registrable Shares in a Demand Registration Statement if such Holder included in any Section 2.10 Registration Statement declared effective within the 60 calendar days preceding the Demand Request relating to such Demand Registration Statement all of the Registrable Shares such Holder sought to be included in such Section 2.10 Registration Statement, and such 2.10 Registration Statement remained effective until at least the Effectiveness End Date thereof (or is then still effective) (substituting for this purpose only the term 2.10 Registration Statement for Demand Registration Statement in the definition of Effectiveness End Date).
Section 2.02. Revocation of Demand Request . Any Demand Request may be revoked by notice from the Lead Holder to the Issuer prior to the effective date of the corresponding Demand Registration Statement; provided, that such revoked Demand Request shall count as one of the three Demand Requests referred to in the last sentence of Section 2.01 unless the Issuer as promptly as reasonably practicable is reimbursed for all out-of-pocket expenses (including fees of outside counsel and accountants and other Registration Expenses) incurred by the Issuer relating to the registration requested pursuant to such revoked Demand Request. A Demand Request may not be made for a minimum of 90 calendar days after the revocation of an earlier Demand Request.
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Section 2.03. Selection of Underwriters and Underwriters Counsel. The Holders may effect one or more underwritten public offerings with respect to the Registrable Shares included in a Demand Registration Statement; provided , that no underwritten public offering shall be effected in which the gross proceeds to the selling Holders are not expected to exceed $75 million. The Holder(s) effecting any such public offering, acting through the Lead Holder, and the Issuer shall mutually select the managing underwriter or co-managing underwriters for such public offering. The Issuer shall be entitled to designate counsel for such underwriter or underwriters, provided that such designated underwriters counsel shall be a firm of national reputation representing underwriters in capital markets transactions.
Section 2.04. Registration In Connection With Hedging Transactions .
(a) The Issuer acknowledges that from time to time a Holder may seek to enter into one or more Hedging Transactions with a Hedging Counterparty. The Issuer agrees that, in connection with any proposed Hedging Transaction then permitted by the Spinco Agreement, if, in the reasonable judgment of counsel to such Holder (after good faith consultation with counsel to the Issuer), it is necessary or desirable to register under the 1933 Act sales or transfers (whether short or long and whether by the Holder or by the Hedging Counterparty) of Registrable Shares or (by the Hedging Counterparty) other shares of Common Stock in connection therewith, then a Registration Statement covering Registrable Shares or such other shares of Common Stock may be used in a manner otherwise in accordance with the terms and conditions of this Agreement to register such such sales or transfers under the 1933 Act. Notwithstanding anything in this Agreement to the contrary, the Issuer shall not be required to register, and shall not be required to pay Registration Expenses in connection with the registration of, an aggregate number of sales or transfers of Registrable Shares or other shares of Common Stock in excess of the Total Registrable Amount, it being understood that a sale or transfer of a Registrable Share or other share of Common Stock shall be considered to have been registered for purposes of this Section 2.04 and Section 6.15 when (1) a Registration Statement covering such Registrable Share or other share of Common Stock shall have been declared effective or, following a request pursuant to Section 2.04(b), an effective shelf Registration Statement is available to cover the sale or transfer of the Registrable Share or other share of Common Stock requested to be covered and (2) in the case of a Demand Registration Statement, such Demand Registration Statement shall have remained effective until (A) such sale or transfer of such Registrable Share or other Share of Common Stock shall have occurred or (B) if earlier, the Effectiveness End Date thereof.
(b) If, in the circumstances contemplated by Section 2.04(a), a Holder seeks to register sales or transfers of Registrable Shares (or the sale or transfer by a Hedging Counterparty of other shares of Common Stock) in connection with a Hedging Transaction at a time when a shelf Registration Statement covering Registrable Shares is effective, upon receipt of written notice thereof from the Lead Holder, the Issuer shall use commercially reasonable efforts to take such actions as may reasonably be required to permit such sales or transfers in connection with such Hedging Transaction to be covered by such effective Registration Statement in a manner otherwise in accordance with the terms and conditions of this Agreement, which may include, among other things, the filing of a prospectus supplement or post-effective amendment including a description of such Hedging Transaction, the name of the Hedging Counterparty, identification of the Hedging Counterparty or its Affiliates as
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underwriters or potential underwriters, if applicable, and any change to the plan of distribution contained in the prospectus; provided that, in the case of a shelf Demand Registration Statement, in no event shall the foregoing require the Issuer to extend the Effectiveness Period of the Registration Statement beyond the Effectiveness End Date.
(c) Any information regarding a Hedging Transaction included in a Registration Statement pursuant to this Section 2.04 shall be deemed to be information provided by the Holder selling or tranferring Registrable Shares or shares of Common Stock pursuant to such Registration Statement for purposes of Article V of this Agreement.
(d) If, with respect to a Hedging Transaction in connection with which a registration is contemplated by Section 2.04(a), a Hedging Counterparty or any Affiliate thereof is (or may be considered) an underwriter or selling securityholder, then, as a condition to including in any Registration Statement any sales or transfers of Registrable Shares or other shares of Common Stock by such Hedging Counterparty in connection with such Hedging Transaction, it and the Issuer shall be required to enter into an agreement with the other (x) providing for indemnification rights substantially similar to those provided under Article V and (y) pursuant to which such Hedging Counterparty and/or Affiliate thereof, to the extent registering shares of Common Stock that are not Registrable Shares, agrees to be bound by the obligations applicable to a Holder hereunder as if such other shares were Registrable Shares .
Section 2.05. Blackout Periods .
(a) With respect to any Registration Statement, or amendment or supplement thereto, whether filed or to be filed pursuant to this Agreement, if the General Counsel of the Issuer shall determine, in his or her good faith judgment, that to maintain the effectiveness of such Registration Statement or file an amendment or supplement thereto (or, if no Registration Statement has yet been filed, to file such a Registration Statement) would (i) require the public disclosure of material non-public information concerning any transaction or negotiations involving the Issuer or any of its consolidated subsidiaries that would materially interfere with such transaction or negotiations, (ii) require the public disclosure of material non-public information concerning the Issuer at a time when its directors and executive officers are restricted from trading in the Issuers securities or (iii) otherwise materially interfere with financing plans, acquisition activities or business activities of the Issuer (a Disadvantageous Condition ), the Issuer may, for the shortest period reasonably practicable (a Blackout Period ), and in any event for not more than 60 consecutive days, notify the Lead Holder and the other Holders whose sales of Registrable Securities are covered (or to be covered) by such Registration Statement (a Blackout Notice ) that such Registration Statement is unavailable for use (or will not be filed as requested). Upon the receipt of any such Blackout Notice, the Holders shall forthwith discontinue use of the prospectus contained in any effective Registration Statement; provided , that, if at the time of receipt of such Blackout Notice any Holder shall have sold its Registrable Shares (or have signed a firm commitment underwriting agreement with respect to the purchase of such shares) and the Disadvantageous Condition is not of a nature that would require a post-effective amendment to the Registration Statement, then the Issuer shall use its commercially reasonable efforts to take such action as to eliminate any restriction imposed by federal securities laws on the timely delivery of such shares. When any Disadvantageous Condition as to which a Blackout Notice has been previously delivered
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shall cease to exist, the Issuer shall as promptly as reasonably practicable notify the Lead Holder and such other Holders and take such actions in respect of such Registration Statement as are otherwise required by this Agreement. If a Blackout Period occurs during the Effectiveness Period of any Demand Registration Statement, the Effectiveness End Date in respect of such Registration Statement shall be extended for a number of days equal to the total number of days during which the distribution of Registrable Shares included in such Registration Statement was suspended under this Section 2.05(a). The Issuer shall not impose, in any 360 calender day period, Blackout Periods lasting, in the aggregate, in excess of 120 calendar days.
(b) If the Issuer declares a Blackout Period with respect to a Demand Registration Statement that has not yet been declared effective, (i) the Lead Holder may by notice to the Issuer withdraw the related Demand Request without such Demand Request counting against the three Demand Requests permitted to be made under Section 2.01 and (ii) neither the Lead Holder nor any other Holder will be responsible for the Issuers related Registration Expenses.
Section 2.06. SEC Orders Suspending Effectiveness . The Issuer shall notify the Lead Holder and all other Holders that have Registrable Shares included in a Registration Statement of any stop order threatened or issued by the SEC (to the extent known to the Issuer) with respect to such Registration Statement and, as to threatened orders, shall use commercially reasonable efforts to prevent the entry of such stop order. If the effectiveness of a Registration Statement is suspended by a stop order issued by the SEC at any time during the Effectiveness Period, the Issuer shall use commercially reasonable efforts to obtain the prompt withdrawal of such order and to amend the Registration Statement in a manner reasonably expected by the Issuer to obtain the withdrawal of such order.
Section 2.07. Plan of Distribution . The plan of distribution section of each prospectus included in a Demand Registration Statement with respect to an offering to be made on a delayed or continuous basis under Rule 415 shall be substantially in the form of Annex A hereto or in a form otherwise appropriate, subject to the comments of the SEC and the inclusion of such other information as is required by applicable SEC regulations or to conform with applicable SEC practice. Each Holder agrees to dispose of its Registrable Shares under a Registration Statement in accordance with the plan of distribution section of the prospectus.
Section 2.08. Expenses . Subject to Section 2.02, the Issuer shall pay all Registration Expenses, and each Holder shall (i) pay all other expenses incurred by it and (ii) reimburse the Issuer for any other out-of-pocket expenses reasonably incurred by the Issuer, in each case in connection with any registration of its Registrable Shares pursuant to this Agreement.
Section 2.09. Transfer of Registration Rights . Each Holder shall have the right to transfer, by written agreement, any or all of its rights granted under this Agreement to any direct or indirect transferee of such Holders Registrable Shares (each Person to whom rights to register shares shall have been so transferred hereunder a Permitted Transferee ); provided , (i) such transferee is Liberty, a Liberty Party, or an Affiliate of Liberty or a Liberty Party, or (ii) such transferee is an accredited investor as such term is defined in Rule 501 of Regulation D promulgated under the 1933 Act, and in either such case (x) such transferee agrees, in writing in form and substance reasonably satisfactory to the Issuer, to be bound by the terms and provisions
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of this Agreement (it being specifically understood that any sale of Registrable Shares by a Permitted Transferee shall be in accordance with the plan of distribution section of the applicable prospectus); and (y) such transfer of Registrable Shares shall be effected in accordance with applicable securities laws, the Spinco Agreement (if the transferring Holder is a party thereto or has agreed to be bound thereby) and any other agreements between the Issuer and such Holder. Following any transfer or assignment made pursuant to this Section 2.09 in connection with the transfer by a Holder of a portion of its Registrable Shares, such Holder shall retain all rights under this Agreement with respect to the remaining portion of its Registrable Shares. Notwithstanding the foregoing, unless Liberty and the Liberty Parties shall have effected a Permitted Restricted Transfer to a Restricted Transferee (in which case the Restricted Transferee shall be substituted for Liberty in all respects hereunder as the Lead Holder), the Issuer shall have no obligation to deliver any notices under this Agreement to or otherwise interact with any Holder other than the Lead Holder for any purpose under this Agreement (other than in accordance with Sections 2.05(a), 2.06, 2.10(e)(ii), 3.01(f), 3.01(h), 3.02(d), 6.01, 6.02 and 6.13 and Article V hereof.)
Section 2.10. Incidental Registration .
(a) If the Issuer at any time proposes to register the offer and sale of shares of Common Stock under the 1933 Act (other than on Form S-8 or Form S-4 or a registration statement on Form S-1 or Form S-3 covering solely an employee benefit or dividend reinvestment plan) (any such registration statement covering sales or transfers of Registrable Shares, a Section 2.10 Registration Statement ) for its own account or for the account of any Other Shareholders, in a manner which would permit registration of Registrable Shares for sale to the public under the 1933 Act (a Piggyback Registration ), the Issuer will as promptly as reasonably practicable give written notice (a Piggyback Notice ) to the Lead Holder (which shall give notice to all other Holders) of its intention to do so, but in any event at least 10 Business Days prior to the anticipated filing date of the Section 2.10 Registration Statement. The Piggyback Notice shall offer all Holders the opportunity to include in such Section 2.10 Registration Statement such number of Registrable Shares as each Holder may request, acting through the Lead Holder, subject to Section 2.10(d); provided , however, that any Holder who has included Registrable Shares on a Demand Registration Statement that was declared effective within the 60 calendar days immediately preceding the receipt of such Piggyback Notice shall not be permitted to request the inclusion of any Registrable Shares in such Section 2.10 Registration Statement. Subject to the proviso to the immediately preceding sentence and to Section 2.10(d), the Issuer will use its commercially reasonable efforts to include in the Section 2.10 Registration Statement the number of Registrable Shares of each Holder sought to be included therein and so specified in a written notice delivered to the Issuer by the Lead Holder on behalf of such Holder within 5 Business Days after such Lead Holders receipt of the related Piggyback Notice. A Holder, acting through the Lead Holder, may, at least two Business Days prior to the effective date of a Section 2.10 Registration Statement, withdraw any Registrable Shares that it had sought to have included therein, whereupon such Holder shall as promptly as reasonably practicable pay to the Issuer all Registration Expenses incurred by the Issuer in connection with the registration of such withdrawn Registrable Shares under the 1933 Act or the 1934 Act and the inclusion of such shares in the Section 2.10 Registration Statement.
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(b) If a Piggyback Registration involves an underwritten offering, then all Holders whose Registrable Shares are included in the Section 2.10 Registration Statement must sell such shares in such underwitten offering and agree to the same terms and conditions as those agreed to by the Issuer or, if the Section 2.10 Registration Statement is for the benefit of Other Shareholders, such Other Shareholders.
(c) In connection with any Piggyback Registration, each Holder shall notify the Issuer in writing 24 hours prior to effecting any transaction in reliance on any Section 2.10 Registration Statement, or amendment or supplement thereto, whether filed or to be filed pursuant to this Agreement. In the case of a transaction by a Hedging Counterparty covered by such Section 2.10 Registration Statement, such notice may specify a period of time, not to exceed five Business Days, during which such sales or transfers may be effected. If (and only if) the Issuer does not give such Holder or Hedging Counterparty a Blackout Notice within 24 hours of the Issuers receipt of such Holders notice, such Holder or Hedging Counterparty may engage in the transaction referenced in the notice in accordance with the terms of this Agreement.
(d) The Issuer may elect, in its sole discretion, to terminate a Section 2.10 Registration Statement at any time prior to the effective date thereof. Upon giving written notice of such election to the Lead Holder, the Issuer shall be relieved of its obligation to register any Registrable Shares (or, in the case of a Hedging Counterparty, if applicable, other shares of Common Stock) in connection with such registration (without prejudice, however, to the rights of Holders under Section 2.01 hereof).
(e) If a Piggyback Registration involves an underwritten offering and the co-managing underwriters advise the Issuer (and, if applicable, the Other Shareholders) that the number of shares of Common Stock requested to be included in the Piggyback Registration exceeds the Maximum Number of Shares, the following rules shall apply:
(i) If the Section 2.10 Registration Statement was originated by the Issuer for a primary offering, then there will be included in such Registration Statement: (i) first, all of the shares of Common Stock that the Issuer proposes to sell for its own account; and (ii) second, to the extent that the number of shares of Common Stock included by the Issuer for its own account is less than the Maximum Number of Shares, the shares of Common Stock proposed to be included by the Other Shareholders and the Registrable Shares (or, in the case of a Hedging Counterparty, if applicable, other shares of Common Stock) proposed to be included by Holders (or Hedging Counterparties ), allocated pro rata among such Persons on the basis of the number of shares each such Person has requested to be included in such Registration Statement (up to the Maxium Number of Shares).
(ii) If the Section 2.10 Registration Statement was originated by Other Shareholders for a secondary offering, then there will be included in such Registration Statement: (i) first, all of the shares of Common Stock that such Other Shareholders propose to sell for their own account; and (ii) second, to the extent that the number of shares of Common Stock included by the Other Shareholders is less than the Maximum Number of Shares, the Registrable Shares (or, in the case of a Hedging Counterparty, if
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applicable, other shares of Common Stock) proposed to be included by Holders (or Hedging Counterparties), allocated pro rata among such Holders on the basis of the number of shares that each such Person has requested to be included in such Registration Statement (up to the Maxium Number of Shares).
(f) (i) The following shall be deemed to be Offering Confidential Information in respect of a Piggyback Registration: (x) the Issuers plan to file the relevant Registration Statement and engage in the offering so registered, (y) any information regarding the offering being registered (including, without limitation, the potential timing, price, number of shares, underwriters or other counterparties, selling stockholders or plan of distribution) and (z) any other information (including information contained in draft supplements or amendments to offering materials) provided to the Lead Holder or the Holders (or Hedging Counterparties) by the Issuer (or by third parties) in connection with the Piggyback Registration. Offering Confidential Information shall not include information that (1) was or becomes generally available to the public (including as a result of the filing of the relevant Registration Statement) other than as a result of a disclosure by any Holder (or Hedging Counterparty), (2) was or becomes available to any Holder (or Hedging Counterparty) from a source not bound by any confidentiality agreement with the Issuer or (3) was otherwise in such Holders (or Hedging Counterpartys) possession prior to it being furnished to such Holder (or Hedging Counterparty) by the Lead Holder or by the Issuer or on the Issuers behalf.
(ii) After a Holder has been notified of its opportunity to include Registrable Shares in a Piggyback Registration, such Holder (or Hedging Counterparty) shall treat the Offering Confidential Information as confidential information and shall not use the Offering Confidential Information for any purpose other than to evaluate whether to include its Registrable Shares (or other shares of Common Stock) in such Piggyback Registration and agrees not to disclose the Offering Confidential Information to any Person other than such of its agents, employees, advisors and counsel as have a need to know such Offering Confidential Information and to cause such agents, employees, advisors and counsel to comply with the requirements of this Section 2.10(e), provided , that such Holder (or Hedging Counterparty) may disclose Offering Confidential Information if such disclosure is required by legal process, but such Holder (or Hedging Counterparty) shall cooperate with the Issuer to limit the extent of such disclosure through protective order or otherwise, and to seek confidential treatment of the Offering Confidential Information.
ARTICLE III
REGISTRATION PROCEDURES
Section 3.01. Registration Procedures . In connection with any registration of Registrable Shares contemplated by this Agreement:
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(a) The Issuer shall, at least three Business Days prior to the initial filing of the Registration Statement with the SEC, furnish to Special Counsel a copy of such Registration Statement as proposed to be filed (including documents to be incorporated by reference therein, to the extent not then available via the SECs EDGAR system, but only to the extent they expressly relate to any offering to be effected thereunder), which will be subject to the reasonable review and comments of Special Counsel during such three-Business-Day period, and the Issuer will not file the Registration Statement (or any such documents incorporated by reference) containing any statements with respect to any Holder or the plan of distribution to which Special Counsel shall reasonably object in writing. After the filing of the Registration Statement, the Issuer will as promptly as reasonably practicable notify Special Counsel of: (i) if the SEC has determined to not review the Registration Statement, the effectiveness thereof; (ii) if the Registration Statement is an ASRS, the filing thereof; or (iii) if the SEC has determined to review the Registration Statement, such determination. If a Registration Statement is subject to review by the SEC: (A) the Issuer will as promptly as reasonably practicable provide the Special Counsel with a copy of each comment letter issued in respect of such Registration Statement and a copy of the Issuers draft responses thereto (it being understood that preliminary drafts shall not be required to be provided); (B) the Issuer shall further provide Special Counsel with a copy of any proposed amendment to be filed with the SEC no less than three Business Days prior to the Issuers proposed filing date, and each such amendment will be subject to the reasonable review and comments of Special Counsel during such three-Business-Day period; (C) the Issuer will not file any such amendment containing any statements with respect to any Holder or the plan of distribution to which Special Counsel shall reasonably object in writing; and (D) once the Registration Statement is cleared from review, the Issuer will as promptly as reasonably practicable inform Special Counsel of the effectiveness thereof.
(b) After the initial Effective Time of a Registration Statement, the Issuer shall, at least two Business Days prior to the filing of a post-effective amendment to the Registration Statement or a prospectus (including a prospectus supplement, a Free Writing Prospectus and any documents to be incorporated by reference in the prospectus but only to the extent they expressly relate to an offering or a Hedging Transaction under the Registration Statement), furnish a copy of such proposed filing to Special Counsel (who will furnish such copy to any Hedging Counterparty (if such filing relates to a Hedging Transaction) and any underwriter (if such filing relates to an underwritten offering)), which will be subject to the reasonable review and comments of Special Counsel during such two-Business-Day period, and the Issuer will not file any such post-effective amendment or prospectus that contains any statements with respect to any Holder, Hedging Counterparty or underwriter or the plan of distribution to which Special Counsel (on behalf of any Holder, any such Hedging Counterparty or any underwriter) shall reasonably object in writing.
(c) The Issuer shall as promptly as reasonably practicable furnish to Special Counsel copies of any and all transmittal letters and other correspondence with the SEC and all correspondence (including comment letters, such as those contemplated by Section 3.01(a)) from the SEC to the Issuer relating to the Registration Statement or any prospectus or any amendment or supplement thereto.
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(d) After a Registration Statement is declared effective, and in connection with any underwritten offering or Hedging Transaction under the Registration Statement, the Issuer will furnish to the Lead Holder (for distribution to the Holders whose Registrable Shares are included in such Registration Statement and to any Hedging Counterparties and underwriters) such number of copies of the Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto but excluding documents (x) incorporated by reference therein other than those that expressly relate to the offering, Hedging Transaction or underwritten offering or (y) that are available via the SECs EDGAR system), the prospectus included in such Registration Statement (including any prospectus supplements) and such other documents as any such Holders, Hedging Counterparties or underwriters may reasonably request through the Lead Holder in order to facilitate the disposition of the Registrable Shares included in the Registration Statement.
(e) The Issuer will use commercially reasonable efforts (i) to register or qualify the Registrable Shares under such other securities or blue sky laws of such jurisdictions in the United States (in the event an exemption is not available) as any Holder of Registrable Shares covered by a Registration Statement, acting through the Lead Holder, reasonably (in the light of such Holders intended plan of distribution) requests and (ii) to cause such Registrable Shares to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Issuer and do any and all other acts and things that may be reasonably necessary or advisable to enable such Holder to consummate the disposition in such jurisdictions of the Registrable Shares owned by such Holder; provided that the Issuer will not be required to (w) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (f), (x) conform its capitalization or the composition of its assets at the time to the securities or blue sky laws of any such jurisdiction, (y) subject itself to taxation in any such jurisdiction or (z) consent to general service of process in any such jurisdiction.
(f) The Issuer will as promptly as reasonably practicable notify the Lead Holder and each other Holder of Registrable Shares covered by the Registration Statement, at any time when a prospectus relating thereto is required to be delivered (or deemed delivered) under the 1933 Act, of the occurrence of an event of which the Issuer has knowledge requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered (or deemed delivered) to the purchasers of such Registrable Shares, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, and, subject to Section 2.05, the Issuer will as promptly as reasonably practicable prepare and furnish to the Lead Holder a supplement to or an amendment of such prospectus so that, as thereafter delivered (or deemed delivered) to the purchasers of such Registrable Shares, such prospectus will not contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.
(g) The Issuer will use commercially reasonable efforts to enter into reasonable and customary agreements (including an underwriting, registration or similar agreement in reasonable and customary form for the Issuer containing customary indemnification and
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contribution provisions) and use commercially reasonable efforts to take such other actions as are reasonably required or requested by a Holder, underwriter or Hedging Counterparty, acting through the Lead Holder, in order to expedite or facilitate the disposition of any Registrable Shares in a manner permitted by this Agreement and the Spinco Agreement; provided , that (i) any legal opinion that the Issuer is required to use commercially reasonable efforts to obtain pursuant to the foregoing may be rendered by the Issuers General Counsel (or another appropriate in-house lawyer), unless the Person to whom such opinion is to be delivered will not accept a 10b-5-opinion from such counsel, in which case the Issuer shall use commercially reasonable efforts to obtain such legal opinion from the Issuers outside counsel; and (ii) in no event shall the Issuer be required to obtain more than two comfort letters from the Issuers public accountants in connection with any Registration Statement.
(h) Upon execution of a customary confidentiality agreement, the Issuer will make available for inspection by any Holder of Registrable Shares covered by a Registration Statement, any Hedging Counterparty in connection with any Hedging Transaction, any underwriter participating in an underwritten offering pursuant to the Registration Statement, Special Counsel, and any attorney, accountant or other professional retained by any such Holder, Hedging Counterparty or underwriter (collectively, the Inspectors ), all financial and other records, pertinent corporate documents and properties of the Issuer (collectively, the Records ) and cause the Issuers and its significant subsidiaries officers, directors and employees to, and shall use commercially reasonable efforts to cause the Issuers independent accountants to, as promptly as reasonably practicable, supply all information reasonably requested by any Inspector in connection with such Registration Statement, Hedging Transaction or underwritten offering, in each case, to the extent reasonably necessary to establish the applicable Persons due diligence defense under U.S. securities laws; provided that in no event shall the Issuer be required to make available to the Holders any information which the Board of Directors in its good faith judgment believes is competitively sensitive or otherwise is confidential. The Inspectors shall coordinate with one another so that the inspection permitted hereunder will not unnecessarily interfere with the Issuers conduct of business. In any event, Records which the Issuer determines, in good faith, to be confidential and which it notifies or otherwise identifies in writing to the Inspectors are confidential shall not be disclosed by the Inspectors unless (and only to the extent that) (i) the disclosure of such Records is necessary to permit a Holder to enforce its rights under this Agreement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Each Holder agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Issuer or its Affiliates unless and until such is made generally available to the public by the Issuer or such Affiliate or for any reason not related to the registration of Registrable Securities. Each Holder further agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, cause the Lead Holder to give notice to the Issuer and allow the Issuer, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.
(i) The Issuer will otherwise use commercially reasonable efforts (i) to comply with all applicable rules and regulations of the SEC to the extent necessary to permit it to lawfully fulfill its obligations under this Agreement, and (ii) to make available to its security holders, as promptly as reasonably practicable, an earnings statement covering a period of 12 months,
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beginning upon the first disposition of Registrable Shares pursuant to a Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act.
(j) The Issuer will use its commercially reasonable efforts to cause all Registrable Shares to be listed on each securities exchange on which the Common Stock is listed.
(k) The Issuer will prepare and file with the SEC, as promptly as reasonably practicable upon the request of any Holder, acting through the Lead Holder, any amendments or supplements to a Registration Statement or prospectus which, in the reasonable opinion of Special Counsel, is required under the 1933 Act in connection with the distribution of the Registrable Shares contemplated by the Registration Statement or prospectus.
(l) The Issuer will use commercially reasonable efforts to timely file the reports and materials required to be filed by it under the 1933 Act and the 1934 Act to enable the Holders to sell Registrable Shares without registration under the 1933 Act within the limitation of the exemption provided by Rule 144. As promptly as reasonably practicable following its receipt of the request of the Lead Holder (acting on behalf of a Holder), the Issuer will deliver to the Lead Holder (which shall deliver to such Holder) a written statement as to whether it has complied with such requirements, and shall use commercially reasonable efforts to provide such assurances as any broker or dealer facilitating a sale of Registrable Shares under Rule 144 may reasonably request.
(m) The Issuer shall reasonably cooperate with each Holder, acting through the Lead Holder, in the disposition (provided such disposition is permitted by the Spinco Agreement) of such Holders Registrable Shares in accordance with the terms of this Agreement. Such cooperation shall include the endorsement and transfer of any certificates representing Registrable Shares (or a book-entry transfer to similar effect) transferred in accordance with this Agreement.
Section 3.02. Holder Responsibilities .
(a) The Issuer may require each Holder of Registrable Shares included in a Registration Statement and each Hedging Counterparty in respect of a Hedging Transaction as promptly as reasonably practicable to furnish in writing to the Issuer, through the Lead Holder, such information regarding such Holder, the Hedging Counterparty or the distribution of the Registrable Shares as the Issuer may from time to time reasonably request and such other information as may be legally required in connection with such registration. If a Holder or Hedging Counterparty fails to provide the requested information after being given 15 Business Days written notice of such request and the requested information is required by applicable law to be included in the Registration Statement, the Issuer shall be entitled to refuse to include for registration such Holders Registrable Shares or other shares of Common Stock in connection with such Hedging Counterpartys Hedging Transaction, as the case may be.
(b) In connection with any disposition of Registrable Shares pursuant to a Registration Statement, each Holder agrees that it will not use any Free Writing Prospectus
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without the prior consent of the Issuer, which consent will not be unreasonably withheld or delayed.
(c) Each Holder agrees that, upon receipt of any written notice from the Lead Holder or the Issuer of the happening of any event of the kind described in Section 3.01(f), such Holder will forthwith discontinue the disposition of such Holders Registrable Shares pursuant to the Registration Statement until such Holders receipt of the copies of the supplemented or amended prospectus contemplated by Section 3.01(f). If the Issuer shall give such notice with regards to any Demand Registration Statement, the Effectiveness End Date in respect of such Registration Statement shall be extended by the number of days during the period from and including the date such notice was given by the Issuer to the date when the Issuer shall have made available to the Lead Holder a prospectus or prospectus supplement that conforms with the requirements of Section 3.01(f).
(d) Each Holder will as promptly as reasonably practicable notify the Issuer and the Lead Holder, at any time when a prospectus relating thereto is required to be delivered (or deemed delivered) under the 1933 Act, of the occurrence of an event, of which such Holder has knowledge, relating to such Holder or its disposition of Registrable Shares thereunder requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered (or deemed delivered) to the purchasers of such Registrable Shares, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading.
ARTICLE IV
LOCK-UP AGREEMENTS
If requested by the managing underwriters in connection with an underwritten offering of Registrable Shares under a Registration Statement, each of the Holders and the Issuer shall execute and deliver agreements ( Lock-up Agreements ) containing customary restrictions on their ability to sell, offer to sell, or otherwise dispose of any shares of Common Stock or any securities convertible into or exercisable for such stock (or enter into any hedging or similar transaction with an economic effect similar to any of the foregoing); provided that such restrictions shall be the same for all such Persons and shall not have a duration in excess of the shortest period required by the managing underwriters and in any event not more than 180 days after the completion of such offering. Any Lock-up Agreements executed by the Holders shall contain provisions naming the Issuer as an intended third-party beneficiary thereof and requiring the prior written consent of the Issuer for any amendments thereto or waivers thereof. Any Lock-up Agreements executed by the Issuer shall contain provisions naming the Holders as intended third-party beneficiary thereof and requiring the prior written consent of the Holders for any amendments thereto or waivers thereof.
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ARTICLE V
INDEMNIFICATION
Section 5.01. Indemnification By the Issuer . The Issuer agrees to indemnify and hold harmless to the fullest extent permitted by law each Holder whose Registrable Shares are covered by the Registration Statement, its officers, directors and each Person, if any, who controls such Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all losses, claims, damages, liabilities, and expenses, or any action or proceeding in respect thereof (each, a Liability and collectively, Liabilities ) (including reimbursement of such Holder for any legal or any other expenses reasonably incurred by it in investigating or defending such Liabilities) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any prospectus relating to such Registrable Shares (or in any amendment or supplement thereto), or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such Liabilities arise out of or are based upon any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the Issuer by such Holder or on such Holders behalf, in either such case expressly for use therein; provided , that with respect to any untrue statement or omission or alleged untrue statement or omission made in any prospectus, the indemnity agreement contained in this paragraph shall not apply to the extent that any such Liability results from (a) the fact that a current copy of the prospectus was not sent or given to the Person asserting any such Liability at or prior to the written confirmation of the sale of the Registrable Shares concerned to such Person if it is determined that the Issuer has provided such prospectus and it was the responsibility of such Holder or its agents to provide such Person with a current copy of the prospectus and such current copy of the prospectus would have cured the defect giving rise to such Liability, (b) the use of any prospectus by or on behalf of any Holder after the Issuer has notified such Person (i) that such prospectus contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (ii) that a stop order has been issued by the SEC with respect to the Registration Statement or (iii) that a Disadvantageous Condition exists or (c) the use of any prospectus by or on behalf of any Holder with respect to any Registrable Shares after such time as the Issuers obligation to keep the Registration Statement effective in respect of such Registrable Shares has expired.
Section 5.02. Indemnification By Holders of Registrable Shares . Each Holder whose Registrable Shares are included in the Registration Statement agrees, severally and not jointly, to indemnify and hold harmless to the fullest extent permitted by law (including reimbursement of the Issuer for any legal or any other expenses reasonably incurred by it in investigating or defending such Liabilities) the Issuer, its officers, directors, agents, and each Person, if any, who controls the Issuer within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the same extent as the foregoing indemnity from the Issuer to such Holder in Section 5.01, but only (i) to the extent such Liabilities arise out of or are based upon information furnished in writing by such Holder or on such Holders behalf, in either case expressly for use in the Registration Statement, prospectus or in any amendment or supplement thereto relating to such Holders Registrable Shares or (ii) to the extent that any Liability described in this Section
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5.02 results from (a) the fact that a current copy of the prospectus was not sent or given to the Person asserting any such Liability at or prior to the written confirmation of the sale of the Registrable Shares concerned to such Person if it is determined that it was the responsibility of such Holder or its agent to provide such Person with a current copy of the prospectus and such current copy of the prospectus would have cured the defect giving rise to such loss, claim, damage, liability or expense, (b) the use of any prospectus by or on behalf of any Holder after the Issuer has notified such Person (x) that such prospectus contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (y) that the SEC has issued a stop order with respect to the Registration Statement or (z) that a Disadvantageous Condition exists or (c) the use of any prospectus by or on behalf of any Holder after such time as the obligation of the Issuer to keep the related Registration Statement in respect of such Holders Registrable Shares effective has expired.
Section 5.03. Conduct Of Indemnification Proceeding . After receipt by any Person (an Indemnified Party ) of any notice of the commencement of any action, suit, proceeding or investigation or threat thereof in respect of which indemnity may be sought pursuant to Section 5.01 or 5.02, such Indemnified Party shall as promptly as reasonably practicable notify the Person against whom such indemnity may be sought (the Indemnifying Party ) in writing. Following notice of commencement of any such action given to the Indemnifying Party as above provided, the Indemnifying Party shall be entitled to participate in and, to the extent it may wish, jointly with any other Indemnifying Party similarly notified, to assume the defense of such action at its own expense, with counsel reasonably satisfactory to such Indemnified Party. In any such proceeding so assumed by the Indemnifying Party, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) representation of both parties by the same counsel would be inappropriate due to actual or potential differing or conflicting interests between them. It is understood that the Indemnifying Party, in connection with any proceeding or related proceedings in the same jurisdiction, shall be liable only for the reasonable fees and expenses of one firm of attorneys (in addition to any necessary local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred upon submission of reasonably itemized invoices that comply with the Issuers standard billing policies for outside counsel. In the case of any such separate firm for Holders who are entitled to indemnity pursuant to Section 5.01, such firm shall be designated in writing by the Indemnified Party who had the largest number of Registrable Shares included in the Registration Statement at issue. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.
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Section 5.04. Contribution .
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If to Liberty or any Liberty Party, to:
Liberty Media Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
Attention: General Counsel
Fax: (720) 875-5382
with a copy to:
Baker Botts L.L.P.
30 Rockefeller Plaza
New York, New York 10112
Attention: Frederick H. McGrath
Fax: (212) 259-2530
If to the Issuer, to:
Tree.com, Inc.
11115 Rushmore Drive
Charlotte, NC 28277
Attention: General Counsel
Fax: (949) 255-5139
Any party to this Agreement may give any notice or other communication hereunder using any other means (including personal delivery, messenger service, telecopy or ordinary mail), but no such notice or other communication shall be deemed to have been duly given unless and until it actually is received by the office of the party for whom it is intended during business hours on a Business Day in the place of receipt. Any party to this Agreement may change the address to which notices and other communications hereunder are to be delivered by giving the other parties to this Agreement notice in the manner herein set forth. Each Person (other than Liberty or a Liberty Party) upon becoming a Holder hereunder shall concurrently provide notice to the other parties hereto of such Holders address. The Issuer shall have no obligation to deliver any
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notices under this Agreement to or otherwise interact with any purported Holder that has not provided notice to the Issuer pursuant to the preceding sentence, and no such Person shall have any rights under this Agreement unless and until such Person delivers such notice.
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(b) In no event shall the Issuer have any liability to any Holder or other Person under this Agreement for any act or failure to act by the Lead Holder in accordance with the terms hereof, each of which Holder agrees that its sole remedy, whether at equity or in law, in any such case shall be against the Lead Holder, and further agrees not to bring any action against the Issuer or any of Affiliates in connection with any such act or failure to act by the Lead Holder. Except in respect of the Issuers indemnification obligations under Article V of this Agreement, each Holder (other than the Lead Holder) hereby assigns to the Lead Holder such Holders right under this Agreement to bring any action or to pursue any remedy against the Issuer or any of its Affiliates for any breach or violation, or any alleged or threatened breach or violation, by the Issuer of its obligations under this Agreement, and each such Holder (other than the Lead Holder) hereby agrees not to directly bring any such action or to pursue any such remedy against the Issuer or any of its Affiliates therefor. The Issuer agrees not to challenge the standing of the Lead Holder to bring any such claim or cause of action or pursue any remedy in the name of the Lead Holder on behalf of a Holder. Any Holder and the Lead Holder may execute such instruments, including an assignment of any claims, as may be necessary to permit the Leader Holder to validly pursue any action or remedy on behalf of a Holder pursuant to this Section 6.13 and to preserve any injured Holders right to receive any recovery obtained by the Lead Holder on behalf of such Holder.
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Liberty Media Corporation, |
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TREE.COM, INC., a Delaware corporation |
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a Delaware corporation |
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/s/ Craig Troyer |
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/s/ Joanne Hawkins |
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Craig Troyer |
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Joanne Hawkins |
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Vice President |
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Vice President and Assistant Secretary |
Liberty USA Holdings, LLC |
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a Delaware limited liability company |
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By: Liberty Programming Company LLC, its |
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sole member and manager |
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By: LMC Capital LLC, its sole member and |
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manager |
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/s/ Craig Troyer |
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Name: |
Craig Troyer |
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Title: |
Vice President |
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[Signature Page to Tree Registration Rights Agreement (Liberty)]
ANNEX A
PLAN OF DISTRIBUTION
Each of the selling stockholders, including certain transferees who may later hold its interest in the shares covered by this prospectus and who are otherwise entitled to resell the shares using this prospectus, may sell the shares covered by this prospectus from time to time in any legal manner selected by the selling stockholder, including directly to purchasers or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions from the selling stockholder or the purchasers. These discounts, concessions or commissions as to any particular underwriter, broker-dealer or agent may be in excess of those customary in the types of transactions involved. The selling stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale of the shares covered by this prospectus.
Each selling stockholder has advised us that its shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market prices, at varying prices determined at the time of sale and/or at negotiated prices. These sales may be effected in one or more transactions, including:
· on the New York Stock Exchange or the Nasdaq Stock Market;
· in the over-the-counter market;
· in transactions otherwise than on the New York Stock Exchange or the Nasdaq Stock Market or in the over-the-counter market; or
· any combination of the foregoing.
In addition, the selling stockholders may also enter into hedging and/or monetization transactions. For example, a selling stockholder may:
· enter into transactions with a broker-dealer or affiliate of a broker-dealer or other third party in connection with which that other party will become a selling stockholder and engage in short sales of shares under this prospectus, in which case the other party may use shares received from the selling stockholder to close out any short positions;
· itself sell short the shares under this prospectus and use the securities held by it to close out any short position;
· enter into options, forwards or other transactions that require the selling stockholder to deliver, in a transaction exempt from registration under the Securities Act, the securities to a broker-dealer or an affiliate of a broker-dealer or other third party who may then become a selling stockholder and publicly resell or otherwise transfer the securities under this prospectus; or
· loan or pledge the securities to a broker-dealer or affiliate of a broker-dealer or other third party who may then become a selling stockholder and sell the loaned securities
A-1
or, in an event of default in the case of a pledge, become a selling stockholder and sell the pledged securities, under this prospectus.
Each selling stockholder has advised us that it has not entered into any agreements, arrangements or understandings with any underwriter, broker-dealer or agent regarding the sale of its shares. However, we are required, under a registration rights agreement relating to the shares being sold under this prospectus, to enter into customary underwriting and other agreements in connection with the distribution of the securities under this prospectus. The specific terms of any such underwriting or other agreement will be disclosed in a supplement to this prospectus filed with the SEC under Rule 424(b) under the Securities Act, or, if appropriate, a post-effective amendment to the registration statement of which this prospectus forms a part. Each selling stockholder may sell any or all of the shares offered by it pursuant to this prospectus. In addition, there can be no assurance that any selling stockholder will not transfer, devise or gift its shares by other means not described in this prospectus.
There can be no assurance that a selling stockholder will sell any or all of its shares pursuant to this prospectus. In addition, any shares covered by this prospectus that qualify for sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus.
The aggregate proceeds to a selling stockholder from the sale of the shares offered by it will be the purchase price of the shares less discounts and commissions, if any. If the shares are sold through underwriters or broker-dealers, the selling stockholder will be responsible for underwriting discounts and commissions and/or agents commissions. We will not receive any of the proceeds from the sale of the shares covered by this prospectus.
In order to comply with the securities laws of some states, if applicable, the shares may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the shares may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.
Any underwriters, broker-dealers or agents that participate in the sale of the securities may be deemed to be underwriters within the meaning of Section 2(11) of the Securities Act. As a result, any profits on the sale of the shares by the selling stockholder and any discounts, commissions or concessions received by any such broker-dealers or agents may be deemed to be underwriting discounts and commissions under the Securities Act.
To the extent required, the shares to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agent, dealer or underwriter, and any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement of which this prospectus is a part.
We have agreed to indemnify each selling stockholder and its directors, officers and controlling Persons against certain liabilities, including specified liabilities under the Securities Act, or to contribute with respect to payments which the selling stockholder may be required to make in respect of such liabilities. The selling stockholder has agreed to indemnify us for
A-2
liabilities arising under the Securities Act with respect to written information furnished to us by it or to contribute with respect to payments in connection with such liabilities.
We have agreed to pay certain costs, fees and expenses incident to our registration of the resale of the selling stockholders shares, excluding legal fees of the selling stockholders, commissions, fees and discounts of underwriters, brokers, dealers and agents and certain other expenses.
Under our registration rights agreement with the selling stockholders, we will use our commercially reasonable efforts to keep the registration statement of which this prospectus is a part continuously effective, subject to customary suspension periods, until the earlier of (i) the 30th day (or, if such registration statement is on Form S-3, the 90th day) after such registration statement is initially declared effective, and (ii) the date that there are no longer any securities covered by such registration statement.
Our obligation to keep the registration statement to which this prospectus relates effective is subject to specified, permitted exceptions. In these cases, we may suspend offers and sales of the shares pursuant to the registration statement to which this prospectus relates.
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Exhibit 10.6
SPINCO ASSIGNMENT AND ASSUMPTION AGREEMENT (TREE.COM)
AGREEMENT (this Agreement), dated as of August 20, 2008, among InterActiveCorp, a Delaware corporation ( IAC ), Tree.com, Inc., a Delaware corporation (the Company ), Liberty Media Corporation, a Delaware corporation ( Liberty ), and Liberty USA Holdings, LLC, a Delaware limited liability company ( Liberty Sub and, together with Liberty, the Liberty Parties ).
RECITALS
WHEREAS, IAC, Barry Diller, Liberty and the other parties named therein entered into that certain Spinco Agreement, dated as of May 13, 2008 (the Spinco Agreement );
WHEREAS, IAC, Liberty Sub and Liberty entered into that certain Affiliate and Assignment Agreement, dated as of August 20, 2008, pursuant to which Liberty Sub assumed all of the rights, benefits, liabilities and obligations of each Liberty Party (as defined in the Spinco Agreement) signatory to the Spinco Agreement under the Spinco Agreement other than Liberty;
WHEREAS, the Spinco Agreement provides that, in connection with each Single-Tier Spinoff of a Spinco consummated prior to the End Date, IAC will cause such Spinco to enter into this Agreement with the Liberty Parties;
WHEREAS, IAC has determined to proceed with the Single-Tier Spinoff of the Company and, in accordance with the terms of the Spinco Agreement, the parties are entering into this Agreement; and
WHEREAS, capitalized terms not otherwise defined herein will have the meanings specified in the Spinco Agreement.
NOW, THEREFORE, for good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereto agree as follows:
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Liberty Media Corporation |
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12300 Liberty Boulevard |
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Englewood, Colorado 80112 |
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Attention: |
General Counsel |
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Facsimile: |
(720) 875-5382 |
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with a copy to: |
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Baker Botts L.L.P. |
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30 Rockefeller Plaza |
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44th Floor |
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New York, New York 10112 |
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Attention: |
Frederick H. McGrath |
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Facsimile: |
(212) 408-2501 |
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if to the Company, to: |
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Tree.com, Inc. |
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11115 Rushmore Drive |
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Charlotte, NC 28277 |
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Attention: General Counsel |
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Fax: (949) 255-5139 |
and if to IAC, as specified in the Spinco Agreement; or such address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. Each such notice, request or other communication shall be effective when delivered personally, telegraphed, or telecopied, or, if mailed, five business days after the date of the mailing.
No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
Liberty Media Corporation, |
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IAC/InterActiveCorp, a Delaware corporation |
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a Delaware corporation |
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/s/ Craig Troyer |
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/s/ Joanne Hawkins |
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Name: |
Craig Troyer |
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Name: |
Joanne Hawkins |
Title: |
Vice President |
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Title: |
Senior Vice President |
Liberty USA Holdings, LLC |
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Tree.com, Inc., a Delaware corporation |
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a Delaware limited liability company |
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By: Liberty Programming Company LLC, its |
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/s/ Tanya Stanich |
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sole member and manager |
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Name: |
Tanya Stanich |
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Title: |
Vice President and Assistant Secretary |
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By: LMC Capital LLC, its sole member and |
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manager |
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/s/ Craig Troyer |
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Name: |
Craig Troyer |
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Title: |
Vice President |
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[Signature Page to Spinco Assignment/Assumption Agreement (Tree.com, Inc.)]
Exhibit 10.7
TREE.COM, INC.
2008 STOCK AND ANNUAL INCENTIVE PLAN
Section 1. Purpose; Definition
The purpose of this Plan is (a) to give the Company a competitive advantage in attracting, retaining and motivating officers, employees, directors and/or consultants and to provide the Company and its Subsidiaries and Affiliates with a stock and incentive plan providing incentives directly linked to stockholder value and (b) to assume and govern other awards pursuant to the adjustment of awards granted under any IAC Long Term Incentive Plan (as defined in the Employee Matters Agreement) in accordance with the terms of the Employee Matters Agreement ( Adjusted Awards ). Certain terms used herein have definitions given to them in the first place in which they are used. In addition, for purposes of this Plan, the following terms are defined as set forth below:
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Awards may be granted under the Plan to Eligible Individuals and, with respect to Adjusted Awards, in accordance with the terms of the Employee Matters Agreement; provided , however , that Incentive Stock Options may be granted only to employees of the Company and its subsidiaries or parent corporation (within the meaning of Section 424(f) of the Code) and, with respect to Adjusted Awards that are intended to qualify as incentive stock options within the meaning of Section 421 of the Code, in accordance with the terms of the Employee Matters Agreement.
With respect to Adjusted Awards, the provisions below will be applicable only to the extent that they are not inconsistent with the Employee Matters Agreement and the terms of the Adjusted Award assumed under the Employee Matters Agreement:
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Notwithstanding the foregoing, the Committee shall have the power, in its discretion, to apply different rules concerning the consequences of a Termination of Employment; provided , however , that if such rules are less favorable to the Participant than those set forth above, such rules are set forth in the applicable Award Agreement. If an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Option will thereafter be treated as a Nonqualified Option.
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With respect to Adjusted Awards, the provisions below will be applicable only to the extent that they are not inconsistent with the Employee Matters Agreement and the terms of the Adjusted Award assumed under the Employee Matters Agreement:
The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Tree.com, Inc. 2008 Stock and Annual Incentive Plan and an Award Agreement. Copies of such Plan and Agreement are on file at the offices of Tree.com, Inc., 11115 Rushmore Drive, Charlotte, NC 28277.
The Committee may require that the certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed and that, as a condition of any Award of Restricted Stock, the applicable Participant shall have delivered a stock power, endorsed in blank, relating to the Common Stock covered by such Award.
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With respect to Adjusted Awards, the provisions below will be applicable only to the extent that they are not inconsistent with the Employee Matters Agreement and the terms of the Adjusted Award assumed under the Employee Matters Agreement:
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Other Awards of Common Stock and other Awards that are valued in whole or in part by reference to, or are otherwise based upon or settled in, Common Stock, including (without limitation), unrestricted stock, performance units, dividend equivalents, and convertible debentures, may be granted under the Plan.
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Notwithstanding the foregoing, the Separation shall not constitute a Change in Control. For the avoidance of doubt, with respect to Adjusted Awards, any reference in an Award Agreement or
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the applicable IAC Long Term Incentive Plan to a change in control, change of control or similar definition shall be deemed to refer to a Change of Control hereunder.
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It is presently intended that the Plan constitute an unfunded plan for incentive and deferred compensation. The Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Common Stock or make payments; provided , however , that unless the Committee otherwise determines, the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan.
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