agreement contained herein which has prevented the satisfaction of any condition to the obligations of the Buyer at the Closing and such breach has not been waived by the Buyer or cured by such Stockholder within ten (10) business days after such Stockholder's receipt of written notice thereof from the Buyer; (c) by a majority of the Stockholders, if there has been a material breach by the Buyer of any representation, warranty, covenant or other agreement contained herein which has prevented the
satisfaction of any condition to the obligations of the Stockholders at the Closing and such breach has not been waived by a majority of the Stockholders or cured by the Buyer within ten (10) business days after the Buyer's receipt of written notice thereof from the Stockholders; or
(d) by the Buyer or a majority of the Stockholders, if the transactions contemplated hereby have not been consummated on or before March 31, 2009.
The party desiring to terminate this Agreement pursuant to clauses (b), (c) or (d) of this section shall give written notice of such termination to the other parties hereto and shall only be entitled to so terminate if such terminating party is at the time of termination (after taking into account the modification of such representations and warranties by any supplements or amendments to the Schedules in accordance with Section 5.03) not in material default of any representation, warranty, covenant or other agreement contained herein.
Section 8.02 Effect of Termination. In the event this Agreement is terminated by either the Buyer or the Stockholders as provided in this section, the provisions of this Agreement shall immediately become void and of no further force and effect (other than Section 5.05 (Confidentiality), Section 6.03 (Public Announcements), this section and Article 10, each of which shall survive the termination of this
Agreement), and there shall be no liability on the part of the Buyer, the Company or the Stockholders, except for willful breaches of this Agreement prior to the time of such termination.
ARTICLE 9
ADDITIONAL COVENANTS
Section 9.01 Survival Period. The representations, warranties, covenants and agreements set forth in this Agreement and in any certificates delivered at the Closing in connection with this Agreement shall
survive for a period beginning on the Closing Date and ending on the date that is 12 months following the Closing Date (the \Section 9.02(c) below); provided that with respect to any covenant or agreement contained herein that expressly contemplates performance after the end of the Survival Period, the Survival Period for such covenant or agreement shall continue through the period of such contemplated performance, and further provided that the representations and warranties contained in Section 3.07 shall survive until sixty (60) days after the expiration of the applicable statute of limitations (including extensions). Section 9.02 Indemnification.
(a) Subject to the provisions of this Section 9.02 and Section 9.03 below, after the Closing, the
Stockholders, pro rata on a several basis based on their relative Indemnity Allocation Percentages shall indemnify the Buyer and its Affiliates (including after the Closing, the Company) and their respective officers, directors, employees, agents and representatives (the \harmless against any and all actual loss, liability, damage or expense (including reasonable legal fees and expenses incurred in connection with the defense, and/or settlement of any claim) (collectively, \and individually, a \representations, warranties, covenants and agreements of the Stockholders set forth herein and as restated in any certificates delivered by or on behalf of the Stockholders at the Closing.
(b) Subject to the provisions of this Section 9.02 and Section 9.03 below, after the Closing the Buyer shall indemnify the Stockholders and hold them harmless against any Loss which such Stockholder suffers as a result of (i) any breach by the Buyer of its covenants, agreements, representations and
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warranties set forth herein and as restated in any certificates delivered by the Buyer at the Closing or (ii) the operations of the Company following the Closing.
(c) No Person shall be liable for any claim for indemnification under subsections (a) or (b) above unless written notice (an \for indemnification is delivered by the Person seeking indemnification to the Person from whom
indemnification is sought prior to the expiration of the Survival Period, in which case the representation, warranty, covenant or agreement which is the subject of such claim and all indemnity obligations under this Article 9 related thereto shall survive, to the extent of such claim only, until such claim is resolved, whether or not the amount of the Losses resulting from such breach has been finally determined at the time the notice is given. Notwithstanding anything to the contrary set forth in this Article 9, if an
Indemnitee or Indemnitor, as the case may be, in accordance with this Article 9, (i) prevails in any suit, action or proceeding relating to or arising out of any Third Party Claim, or (ii) settles any Third Party Claim (including a settlement without admission of fault), any such outcome shall not, of itself, create a presumption that the Indemnitee in connection therewith did not pay, incur or suffer a Loss as a result of or in connection with such suit, action or proceeding or such Third Party Claim, as the case may be, that would be indemnifiable pursuant to this Article 9.
(d) Promptly after the assertion by any third party of any claim (a \Person entitled to indemnification under this Section 9.02 (the \the incurrence by such Indemnitee of any Loss for which such Indemnitee would be entitled to
indemnification pursuant to this Agreement, such Indemnitee shall promptly provide notice of such Third Party Claim to the parties from whom such indemnification could be sought (the \that the failure to so notify an Indemnifying Party shall not relieve the Indemnifying Party of its
obligations hereunder except and only to the extent the Indemnifying Party is actually prejudiced thereby. A majority of Stockholders shall act on behalf of all Indemnitors in the case of all Third Party Claims with respect to which the Buyer is seeking indemnification under subsection (a) above and may, at their option, assume the defense of the Indemnitee against such Third Party Claim (including the employment of counsel and the payment of reasonable expenses), so long as (i) the Indemnitor shall acknowledge in writing that, if any such Third Party Claim results in a Loss for which an Indemnitee is entitled to receive indemnification hereunder, the Indemnitor shall be responsible for the aggregate amount of such Loss (subject to the limitations set forth in this Agreement) or (ii) the claim or demand does not seek to impose on the Indemnitee any injunctive relief or other equitable relief (except where injunctive relief is merely incidental to a primary claim or claims for monetary damages). Any Indemnitee shall have the right to employ separate counsel in any such Third Party Claim and to participate in the defense thereof, but the fees and expenses of such counsel shall not be an expense of the Indemnitor unless (i) the Indemnitor shall have failed, within a reasonable time after having been notified by the Indemnitee of the existence of such Third Party Claim as provided in the preceding sentence, to assume the defense of such Third Party Claim or (ii) the employment of such counsel has been specifically authorized by the Indemnitor. In no event will an Indemnitee consent to the entry of any judgment or enter into any settlement with respect to any Third Party Claim without the prior written consent of the Indemnitor, and in no event will an Indemnitor consent to the entry of any judgment or enter into any settlement with respect to any Third Party Claim without the prior written consent of the Indemnitee unless such settlement involves only the payment of money damages, without admission of fault, and expressly and unconditionally releases the Indemnitee from all liabilities and obligations with respect to such claim.
(e) The amount of any Loss subject to indemnification hereunder or of any claim therefor shall be calculated net of (i) any Tax Benefit (as defined below) inuring to the Buyer, the Company or any of their Affiliates on account of such Loss and (ii) any insurance or other third party proceeds (net of direct collection expenses) received by the Buyer or the Company on account of such Loss. If the Buyer, the
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Company or any of their Affiliates receives a Tax Benefit after an indemnification payment is made, the Buyer shall promptly pay to the Stockholders in accordance with their respective Allocation Percentages the amount of such Tax Benefit at such time or times as and to the extent that such Tax Benefit is realized. For purposes hereof, \of Tax or reduction in the actual amount of Taxes which such Person would otherwise have had to pay if the relevant Tax attribute had not been incurred, calculated by computing the amount of Taxes before and after inclusion of such Tax attribute and treating such Tax attribute as the last items claimed for any taxable year. The Buyer and the Company shall seek full recovery under all insurance policies covering any Loss to the same extent as they would if such Loss were not subject to indemnification hereunder, and the Buyer and the Company shall not terminate or cancel any insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery is made by the Buyer, the Company or any of their Affiliates with respect to any Loss for which any such Person has been indemnified hereunder, then a refund equal to the aggregate amount of the recovery (net of all direct collection expenses) shall be made promptly to the Stockholders in accordance with their respective Allocation Percentages. The Indemnitors shall be subrogated to all rights of the Indemnitees in respect of any Losses indemnified by the Indemnitors.
(f) Each Person entitled to indemnification hereunder shall take all reasonable steps to mitigate all losses, costs, expenses and damages after becoming aware of any event which could reasonably be expected to give rise to any losses, costs, expenses and damages that are indemnifiable or recoverable hereunder or in connection herewith.
(g) All indemnification payments made hereunder shall be treated by all parties as adjustments to the Actual Purchase Price.
(h) Notwithstanding anything to the contrary contained in this Section 9.02, there shall be no recovery for any Loss or alleged Loss by the Buyer under this Section 9.02 to the extent that the amount of any liability or reserve for such item has been included in the Indebtedness Payoff Amount as determined pursuant to Section 2.04 hereof.
(i) For purposes of this Section 9.02, breaches of representations and warranties of the Company of the Stockholders (other than the representation and warranty contained in Section 3.12) will be determined without giving effect to any \qualifications.
Section 9.03 Limitation of Recourse. The indemnification provided by Section 9.02(a) shall be the sole and exclusive remedy for any Losses or other loss, liability, damage or expense of the Buyer or the Company with respect to any misrepresentation or inaccuracy in, or breach of, any representations or warranties or any breach or failure in performance of any covenants or agreements made by the Stockholders in this Agreement or in any exhibit or schedules hereto or any certificate delivered
hereunder, other than for claims of fraud against such Person committing such fraud. Notwithstanding any other provision of this Article 9 to the contrary, the Stockholders shall not be liable to Buyer under this Article 9 until the aggregate amount of Losses exceeds $5,000, after which the Stockholders shall be liable for all Losses.
Section 9.04 Manner of Payment. Any indemnification of the Buyer Indemnified Parties pursuant to Section 9.02 shall be paid on a several and not joint basis and shall be effected as follows: (i) first, so long as funds remain in the Escrow Account, payment shall be made from the Escrow Account on behalf of the Stockholders in accordance with the Escrow Agreement and, (ii) thereafter, by wire transfer of
immediately available funds from the applicable individual Stockholder to an account designated by the Buyer within fifteen (15) days after the determination thereof. Any indemnification of the Stockholders pursuant to Section 9.02 shall be effected by wire transfer of immediately available funds to an account
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designated by a majority of the Stockholders within fifteen (15) days after the determination thereof according to the Stockholder's Allocation Percentage.
ARTICLE 10 MISCELLANEOUS
Section 10.01 Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given, if to the Company (after the Closing) or to the Buyer, then to: Intelius Inc.
500 108th Ave. NE, Ste. 2500 Bellevue, WA 98004 Attn: General Counsel Facsimile: 425-974-6199
or, if to the Company (before the Closing), or the Stockholders, then to: Zaba, Inc.
22647 Ventura Blvd., Ste. 323 Woodland Hills, CA 91364 Attn: Robert Zakari
Facsimile: 818-332-7947
with a copy to (which shall not constitute notice): Nicholas J. Matzorkis
22647 Ventura Blvd., Ste. 323 Woodland Hills, CA 91364 and
Lloyd I. Miller 4550 Gordon Drive Naples, FL 34102 and
Robert Zakari
22647 Ventura Blvd., Ste. 323 Woodland Hills, CA 91364 and
Alan Howe
10755 Scripps Poway Parkway, No. 302 San Diego, CA 92131
All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received on a business day in the place of receipt prior to 5:00 p.m. in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt. Section 10.02 Amendments and Waivers.
(a) Except as otherwise provided herein, any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by the Buyer and the Stockholders, or in the case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure of 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.
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Section 10.03 Construction; Severability. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any Person. The headings of the sections and paragraphs of this Agreement have been inserted for convenience of reference only and shall in no way restrict or otherwise modify any of the terms or provisions hereof. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law or regulation, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law or regulation, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
Section 10.04 Expenses. Except as otherwise provided herein, each party shall pay all of its own fees, costs and expenses (including, without limitation, fees, costs and expenses of legal counsel, investment bankers, brokers or other representatives and consultants and appraisal fees, costs and expenses) incurred in connection with the negotiation of this Agreement and the other agreements contemplated hereby, the performance of its obligations hereunder and thereunder, and the consummation of the transactions contemplated hereby and thereby.
Section 10.05 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto.
Section 10.06 Governing Law. All issues and questions concerning the construction, validity, interpretation and enforceability of this Agreement and the exhibits and schedules hereto shall be
governed by and construed in accordance with the laws of the state of Washington, without giving effect to any choice of law or conflict of law rules or provisions (whether of the state of Washington or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the state of Washington.
Section 10.07 Jurisdiction. Except as otherwise expressly provided in this Agreement, any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought: (i) in the United States District Court for the Western District of Washington or any Washington State court sitting in King County, Washington, if initiated by any Stockholder, and (ii) in the United States District Court for the Central District of California (Western Division), if initiated by Buyer, and each of the parties hereby consents to the jurisdiction of such respective courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Section 10.08 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 10.09 Prevailing Party. If any litigation or other court action, arbitration or similar adjudicatory proceeding is commenced by any party hereto to enforce its rights under this Agreement against any other party, all fees, costs and expenses, including, without limitation, reasonable attorneys fees and court costs, incurred by the prevailing party in such litigation, action, arbitration or proceeding shall be reimbursed by the losing party; provided, that if a party to such litigation, action, arbitration or proceeding prevails in part, and loses in part, the court, arbitrator or other adjudicator presiding over such litigation, action,
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arbitration or proceeding shall award a reimbursement of the fees, costs and expenses incurred by such party on an equitable basis.
Section 10.10 Specific Performance. Notwithstanding anything in this Agreement to the contrary, the parties hereby acknowledge and agree that the failure of any party to perform its agreements and covenants hereunder, including its failure to take all actions as are necessary on its part to the
consummation of the transactions contemplated hereby, will cause irreparable injury to the other parties, for which damages, even if available, will not be an adequate remedy. Accordingly, each party hereby consents to the issuance of injunctive relief by any court of competent jurisdiction to compel performance of such party's obligations and to the granting by any court of the remedy of specific performance of its obligations hereunder, without bond or other security being required, this being in addition to any other remedy to which they are entitled at law or in equity.
Section 10.11 Counterparts; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts (including by facsimile or .pdf signature
pages), each of which shall be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. Except as otherwise specifically set forth herein, no provision of this Agreement is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder.
Section 10.12 Entire Agreement. This Agreement and the documents referred to herein contain the
complete agreement between the parties hereto and supersede any other prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way.
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