Exhibit 10.1

 

TRANSITION SERVICES AGREEMENT

 

dated as of February 6, 2014

 

between

 

SIZMEK INC.

 

and

 

DIGITAL GENERATION, INC.

 

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TRANSITION SERVICES AGREEMENT

 

This TRANSITION SERVICES AGREEMENT (together with the Schedules attached hereto,
this “Agreement”) is entered into as of February 6, 2014 (this “Agreement”), by
and between Sizmek Inc., a Delaware corporation (“SpinCo”), and Digital
Generation, Inc., a Delaware corporation ( “DG”).

 

RECITALS

 

WHEREAS, DG and SpinCo have entered enter into that certain Separation and
Redemption Agreement dated as of the date hereof (the “Separation Agreement”)
providing for, among other things, the contribution by DG to SpinCo of all of
the assets and liabilities of its Online Business and all of its cash and all of
its working capital, as more fully set forth therein; and

 

WHEREAS, the Separation Agreement contemplates that the parties hereto will, at
the Closing (as defined in the Agreement and Plan of Merger, dated as of
August 12, 2013, (the “Merger Agreement”) by and among DG, Extreme Reach, Inc.
and Dawn Blackhawk Acquisition Corp.), enter into this Agreement for the
provision of certain services by DG for SpinCo and certain services by SpinCo
for DG, on the terms and conditions set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, for themselves, their
successors and permitted assigns, hereby agree as follows:

 

ARTICLE 1
DEFINITIONS

 

Section 1.01.  Definitions.

 

(a)                       Any capitalized term that is used herein but not
defined herein shall have the meaning assigned to such term in the Separation
Agreement.

 

(b)                       As used in this Agreement, the following terms shall
have the following meanings, applicable both to the singular and the plural
forms of the terms described:

 

“DG Systems” means any computer software program or routine or part thereof
owned, licensed or provided by DG, its Affiliates or its suppliers on DG’s or
any of its Affiliates’ behalf, each as modified, maintained or enhanced from
time to time by DG, SpinCo, any of their respective Affiliates or any third
party.

 

“Insolvency Event” means with respect to either party, as applicable, (i) the
making by such party of any assignment for the benefit of creditors of all or
substantially all of its assets or the admission by such party in writing of its
inability to pay all or substantially all of its debts as they become due;
(ii) the adjudication of such party as bankrupt or insolvent or the filing by
such party of a petition or application to any tribunal for the appointment of a
trustee or receiver for such party or any substantial part of the assets of such
party; or (iii) the commencement of any

 

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voluntary or involuntary bankruptcy proceedings (and, with respect to
involuntary bankruptcy proceedings, the failure of such proceedings to be
discharged within 60 days), reorganization proceedings or similar proceeding
with respect to such party or the entry of an order appointing a trustee or
receiver or approving a petition in any such proceeding.

 

“SpinCo Systems” means any computer software program or routine or part thereof
owned, licensed or provided by SpinCo, its Affiliates or its suppliers on
SpinCo’s or any of its Affiliates’ behalf, each as modified, maintained or
enhanced from time to time by SpinCo, DG, any of their respective Affiliates or
any third party.

 

“Schedule” means a Schedule attached hereto forming part of this Agreement.

 

“Service Costs” means costs for the services as provided on any Schedule hereto.

 

“Service Provider” means (i) SpinCo, in the case of SpinCo Provided Services,
and (ii) DG, in the case of DG Provided Services.

 

“Service Provider Indemnitees” means with respect to any Service Provider, such
Service Provider, its Affiliates or any of its or their respective directors,
officers, agents, consultants, representatives and/or employees.

 

“Service Recipient” means (i) DG or its Affiliates, as the case may be, in the
case of SpinCo Provided Services, and (i) SpinCo or its Affiliates, as the case
may be, in the case of DG Provided Services.

 

“Service Recipient Indemnitees” means with respect to any Service Recipient,
such Service Recipient, its Affiliates or any of its or their respective
directors, officers, agents, consultants, representatives and/or employees.

 

“Systems” means the DG Systems or the SpinCo Systems, individually, or the DG
Systems and the SpinCo Systems, collectively, as the context may indicate or
require.

 

(c)                        Each of the following terms is defined in the
Section set forth opposite such term:

 

Term

 

Section

Agreement

 

Preamble

Baseline Period

 

4.01

Chosen Courts

 

9.12

Confidential Information

 

7.01(a)

DG

 

Preamble

DG Provided Services

 

2.01(a)

force majeure

 

9.03

Invoice Date

 

3.03(a)

Liaison

 

4.04

Merger Agreement

 

Recitals

SpinCo

 

Preamble

SpinCo Provided Services

 

2.01(a)

Separation Agreement

 

Recitals

Services

 

2.01(a)

 

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ARTICLE 2
SERVICES

 

Section 2.01.  Provision of Services.

 

(a)                       On the terms and subject to the conditions of this
Agreement and in consideration of the charges described in Section 3.01 below,
SpinCo agrees to provide to DG, or procure the provision to DG of, the
transition services (the “SpinCo Provided Services”) set forth on Schedules A-1
through A-6 (referred to herein collectively as Schedule A).  On the terms and
subject to the conditions of this Agreement and in consideration of the charges
described in Section 3.01 below, DG agrees to provide to SpinCo, or procure the
provision to SpinCo of, the transition services (the “DG Provided Services” and,
together with the SpinCo Provided Services, the “Services”) set forth on
Schedules B-1 through B-5 (referred to herein collectively as Schedule B).

 

(b)                       It is understood that (i) the Services to be provided
under this Agreement shall only be provided for the purpose of conducting the
Service Recipient’s business substantially as it was conducted prior to the
Closing Date, and (ii) the Service Provider may satisfy its obligations to
provide or procure Services hereunder by causing one or more of its Affiliates
to provide or procure such Services, which Affiliates it may change at its
discretion from time to time.

 

(c)                        Except for the Services expressly contemplated to be
provided in accordance with this Section 2.01, neither party shall have any
obligation under this Agreement to provide any services to the other party.

 

(d)                                 If a party requires services from the other
party for the purpose of conducting its business as it was conducted prior to
the Closing that are not otherwise required to be provided hereunder, the
parties will negotiate in good faith the terms under which such services will be
provided under this Agreement as “Services”, including appropriate Service Costs
therefor.

 

Section 2.02.  Third Party Licenses and Consents.  The parties shall use
commercially reasonable efforts to obtain, and to keep and maintain in effect,
all governmental or third party licenses and consents required for the provision
of any Service in accordance with the terms of this Agreement; provided that if
the Service Provider is unable to obtain any such license or consent, the
Service Provider shall promptly notify the Service Recipient in writing and
shall, and shall cause its Affiliates to, use commercially reasonable efforts to
implement an appropriate alternative arrangement.  The reasonable costs relating
to obtaining any such licenses or consents shall be deemed to be Service Costs. 
If any such license, consent or alternative arrangement is not available despite
the commercially reasonable efforts of the Parties, Service Provider shall not
be required to provide the affected Services.

 

Section 2.03.  Third Party Providers.  If Service Provider receives written
notice from any third party service provider that such Person intends to
terminate a service pursuant to which the Service Provider provides a Service to
the Service Recipient, then the Service Provider shall provide a copy of such
written notice to the Service Recipient and shall use commercially

 

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reasonable efforts to secure the continued provision of that Service from such
third party or an alternative service provider, the reasonable costs of which
shall be deemed to be Service Costs.  If the Service Provider is unable to
secure the continued provision of that Service from such third party or an
alternative service provider, Service Provider shall not be required to provide
the affected Service.

 

Section 2.04.  Cooperation.  The parties agree to cooperate in good faith in
providing for an orderly transition of Services to the Service Recipient or a
successor service provider designated by Service Recipient.

 

Section 2.05.  No Licenses.  No licenses are granted to any party (including by
implication, estoppel or otherwise) except as expressly set forth in this
Agreement.

 

ARTICLE 3
SERVICE COSTS; OTHER CHARGES

 

Section 3.01.  Service Costs Generally.  The charges for the Services to be
provided by a party hereunder shall be such party’s Service Costs.

 

Section 3.02.  Taxes.  Each Service Recipient shall pay all applicable sales or
use taxes incurred with respect to provision of applicable Services.  Such taxes
shall be incremental to other payments or charges identified in this Agreement. 
All sums payable under this Agreement shall be paid free and clear of all
deductions or withholdings unless the deduction or withholding is required by
Law, in which event the amount of the payment due from the party required to
make such payment (other than amounts of interest) shall be increased to an
amount which after any withholding or deduction leaves an amount equal to the
payment which would have been due if no such deduction or withholding had been
required.

 

Section 3.03.  Invoicing and Settlement.

 

(a)                       Unless any Schedule hereto indicates otherwise or the
parties agree in writing to a different arrangement following the Closing, each
Service Provider shall invoice the applicable Service Recipient on a monthly
basis in arrears for the Service Costs (the date of delivery of such invoice,
the “Invoice Date”).

 

(b)                       Each Service Recipient shall pay each undisputed
invoice within 15 days after each Invoice Date by wire transfer of immediately
available funds payable to the order of Service Provider to such
account(s) designated by Service Provider.  Late payments shall be subject to an
interest charge equal to the lesser of (i) an annual rate of eighteen percent
(18%) or (ii) the highest rate of interest allowable by applicable law.

 

(c)                        Effective upon closing under the Merger Agreement,
SpinCo will purchase and take title to laptops used by 25 SpinCo employees
originally purchased as part of the Television Business, and DG will purchase
and take title to computer laptops used by 9 DG employees originally purchased
as part of the Online Business, and SpinCo shall pay to DG $15,000 within five
(5) business days in settlement of such purchases by each party.

 

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ARTICLE 4
THE SERVICES

 

Section 4.01.  Standards of Service.

 

(a)                       Unless any Schedule hereto indicates otherwise or the
parties agree in writing to a different arrangement following the Closing, the
level or volume of any specific Service required to be provided hereunder shall
be at a level or volume consistent in all material respects with the level or
volume, as the case may be, of such specific Service as utilized by the
applicable Service Recipient during the twelve-month period prior to the date
hereof (the “Baseline Period”).

 

(b)                       Unless any Schedule hereto indicates otherwise or the
parties agree in writing to a different arrangement following the Closing, the
manner, nature, quality and standard of care applicable to the delivery by the
applicable Service Provider of the Services hereunder shall be substantially the
same as that of similar services provided by or to the Service Recipient during
the Baseline Period.

 

(c)                        No Service Provider shall have such obligation to
provide any Services hereunder in respect of any business, assets or properties
not forming part of the Service Recipient as of the date hereof.

 

Section 4.02.  Changes to Services.  It is understood and agreed that each
Service Provider may from time to time modify or change the manner, nature,
quality and/or standard of care of any Service provided to Service Recipient to
the extent such Service Provider is making a similar change in the performance
of such services for such Service Provider and its Affiliates and provided that
any such modification, change or enhancement will not reasonably be expected to
materially affect such Service or the business of the Service Recipient.  Each
Service Provider shall furnish to Service Recipient substantially the same
notice (in content and timing), if any, as such Service Provider furnishes to
its own organization with respect to such modifications or changes.

 

Section 4.03.  Management of Services By Service Provider.  Except as may
otherwise be expressly provided in this Agreement, the management of and control
over the provision of the Services by the applicable Service Provider shall
reside solely with such Service Provider.  Without limiting the terms of this
Agreement, each Service Provider shall have the right in its sole discretion to
choose the personnel, methodology, systems, applications and third party
providers it utilizes in the provision of such Services.  The provision, use of
and access to the Services shall be subject to (a) the applicable Service
Provider’s business, operational, technical and security environment, standards,
policies and procedures as in effect from time to time, (b) applicable Law and
(c) the terms of this Agreement.

 

Section 4.04.  Liaisons.  Each party shall designate one representative to act
as such party’s primary contact person in connection with the Services (each, a
“Liaison”).  The Liaisons will oversee the implementation and ongoing operation
of this Agreement and shall attempt in good faith to resolve disputes between
the parties.  The parties have designated their respective initial Liaisons and
provided contact information therefor on Schedule C.  The parties shall ensure
that their respective Liaisons shall meet in person or telephonically at such
times as are

 

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reasonably requested by DG or SpinCo to review and discuss the status of, and
any issues arising in connection with, the Services or this Agreement.  Each
party may re-designate its Liaison(s) from time to time upon written notice
(including by email) to the other party’s Liaisons.

 

ARTICLE 5
DISCLAIMER, LIABILITY AND INDEMNIFICATION

 

Section 5.01.  EXCLUSION OF WARRANTIES.  EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE SERVICES ARE PROVIDED “AS-IS” WITH NO WARRANTIES, AND EACH
SERVICE PROVIDER EXPRESSLY EXCLUDES AND DISCLAIMS ANY WARRANTIES UNDER OR
ARISING AS A RESULT OF THIS AGREEMENT, WHETHER EXPRESS, IMPLIED OR
STATUTORY, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT AND
ANY OTHER WARRANTY WHATSOEVER.

 

Section 5.02.  Limitation of Liability.

 

(a)                       Except for the indemnity obligations set forth in
Sections 5.03, 5.04 and 6.03, neither DG nor SpinCo shall have any liability,
whether direct or indirect, in contract or tort or otherwise, for or in
connection with the Services rendered or to be rendered by or on behalf of any
Service Provider pursuant to this Agreement, the transactions contemplated
hereby or any actions or inactions by or on behalf of any Service Provider in
connection with any such Services or the transactions contemplated hereby,
except to the extent any damages have resulted from such Service Provider’s
gross negligence or willful misconduct or such Service Provider’s failure to
comply with Laws applicable to it or them in the conduct of their business in
the ordinary course; provided, that no action taken (whether before or after the
date hereof) by any Person that is expressly contemplated by this Agreement or
any Schedule hereto shall be deemed to be gross negligence or willful misconduct
or a failure to comply with Laws applicable to it.

 

(b)                       Notwithstanding the provisions of Section 5.02(a),
neither DG nor SpinCo shall be liable for any special, indirect, incidental,
consequential or punitive damages of any kind whatsoever in any way due to,
resulting from or arising in connection with any of the Services or the
performance of or failure to perform any obligations under this Agreement.  This
disclaimer applies without limitation (i) to claims arising from the provision
of the Services or any failure or delay in connection therewith, (ii) to claims
for lost profits or opportunities, (iii) regardless of the form of action,
whether in contract, tort (including negligence), strict liability, or
otherwise, and (iv) regardless of whether such damages are foreseeable or
whether DG or SpinCo, as applicable, or any of its Affiliates has been advised
of the possibility of such damages.

 

Section 5.03.  Indemnification of Service Provider.  Each Service Recipient
shall indemnify, defend and hold harmless the Service Provider Indemnitees from
and against any and all Liabilities and related losses of the Service Provider
Indemnitees relating to, arising out of or resulting from the Services rendered
or to be rendered by or on behalf of any of the Service Provider Indemnitees
pursuant to this Agreement, the transactions contemplated hereby or any actions
or inactions by or on behalf of any of the Service Provider Indemnitees in
connection with any such Services or transactions; provided that Service
Recipient shall not be responsible

 

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for any Liabilities resulting from a Service Provider’s gross negligence or
willful misconduct or Service Provider’s failure to comply with Laws applicable
to it in the conduct of its business in the ordinary course; provided, further,
that no action taken (whether before or after the date hereof) by any Person
that is expressly contemplated by this Agreement or any Schedule hereto shall be
deemed to be gross negligence or willful misconduct or a failure to comply with
Laws applicable to it.

 

Section 5.04.  Indemnification of Service Recipient.  Each Service Provider
agrees to indemnify and hold harmless the each Service Recipient Indemnitee from
and against any Liabilities incurred in investigating, preparing, or defending
any Action, in each case solely to the extent such Liabilities have arisen out
of such Service Provider’s gross negligence or willful misconduct or such
Service Provider’s failure to comply with Laws applicable to it in the conduct
of its business in the ordinary course; provided, that no action taken (whether
before or after the date hereof) by any Person that is expressly contemplated by
this Agreement or any Schedule hereto shall be deemed to be gross negligence or
willful misconduct or a failure to comply with Laws applicable to it.

 

Section 5.05.  Indemnification as Exclusive Remedy; Limit on Indemnification. 
The indemnification provisions of this Article 5 set forth the exclusive remedy
for money damages for breach of this Agreement and any matters relating to this
Agreement.  In no case shall the liability under Section 5.03 or 5.04 of any
Service Recipient or Service Provider, as the case may be, exceed the amount of
Service Costs paid by a Service Recipient, in the case of indemnification under
Section 5.04, or Service Costs received by a Service Provider, in the case of
indemnification under Section 5.05.

 

ARTICLE 6
TERM AND TERMINATION

 

Section 6.01.  Term.  Unless terminated earlier or except as expressly set forth
in Schedule A or Schedule B, the term of this Agreement with respect to each of
the Services shall commence on the Closing Date and shall cease on 270 days
after the Closing Date.  This Agreement shall terminate in its entirety upon the
expiration of the terms (as determined pursuant to the preceding sentence) of
all Services; provided that the provisions of Articles 5, 6, 7 and 9 shall
survive any such termination indefinitely.

 

Section 6.02.  Termination.

 

(a)                       Except as otherwise provided in any Schedule hereto,
any Service Recipient may from time to time terminate this Agreement with
respect to one or more of the Services it receives, in whole or in part, upon
giving at least 30 days’ prior notice to Service Provider.

 

(b)                       Either party may terminate this Agreement or any
Service if (i) the other party shall have failed to perform any of its material
obligations with respect to such Service under this Agreement, (ii) the
terminating party has notified the other party in writing of such failure and
(iii) such failure (x) shall have continued uncured for a period of 15 days
after receipt of written notice of such failure or (y) is incapable of remedy.

 

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(c)                        Either party may terminate this Agreement at any time
with immediate effect upon serving written notice upon the other party if the
other party suffers an Insolvency Event.

 

Section 6.03.  Effect of Termination.

 

(a)                       Other than as required by Law, upon termination of any
Service pursuant to Section 6.02, the applicable Service Provider shall have no
further obligation to provide the terminated Service.  Notwithstanding any
termination, Service Recipient shall remain liable to Service Provider for
(i) Service Costs and other fees owed and payable in respect of Services
provided to Service Recipient prior to the effective date of the termination and
(ii) in the case of a termination under Section 6.02(a) or (b), any costs
incurred by Service Provider between the time of such termination and the time
the provision of the relevant Service(s) would have terminated absent such early
termination to the extent such Service Provider cannot avoid the incurrence of
such costs using commercially reasonable efforts.

 

(b)                       Termination of this Agreement as provided for herein
shall not prejudice or affect any rights or remedies which shall have accrued to
either party, or any Service Provider Indemnitee or Service Recipient Indemnitee
of either party.

 

ARTICLE 7
ADDITIONAL AGREEMENTS

 

Section 7.01.  Confidential Information

 

(a)                       The parties hereby covenant and agree to keep
confidential all Confidential Information relating to the other party or any of
such other party’s Affiliates.  Without limiting the generality of the
foregoing, each party shall cause its employees and agents to exercise the same
level of care with respect to Confidential Information relating to the other
party or any of its Affiliates as it would with respect to proprietary
information, materials and processes relating to itself or any of its
Affiliates.  “Confidential Information” shall mean all information, materials
and processes relating to a party or any Affiliate of such party obtained or
observed by the other party or any Affiliate of such other party at any time
(whether prior to or after the date hereof) in any format whatsoever (whether
orally, visually, in writing, electronically or in any other form) arising out
of the rendering or receipt of Services hereunder (or preparations for the same
or for the termination thereof) and shall include, but not be limited to,
economic and business information or data, business plans, computer software and
information relating to employees, vendors, customers, products, financial
performance and projections, processes, strategies and systems but shall not
include (i) information which is or becomes generally available to the public
other than by release in violation of the provisions of this Section 7.01(a),
(ii) information which is or becomes available on a non-confidential basis to a
party from a source other than the other party to this Agreement, provided the
party in question reasonably believes that such source is not or was not bound
by a legal or contractual obligation to the other party or one of its Affiliates
to hold such information confidential and (iii) information acquired or
developed independently by a party without use or reference to otherwise
Confidential Information of the other party.  Except with the prior written
consent of the other party, each party will use the other party’s Confidential
Information only in connection with the performance of its obligations hereunder
and each party shall use commercially reasonable efforts to restrict access to
the other

 

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party’s Confidential Information to those employees of such party requiring
access for the purpose of providing or receiving Services hereunder. 
Notwithstanding any provision of this Section 7.01(a) to the contrary, a party
may disclose such portion of the Confidential Information relating to the other
party to the extent, but only to the extent, the disclosing party reasonably
believes that such disclosure is required under Law or the rules of a
Governmental Authority; provided that if permissible under Law and practicable,
the disclosing party shall first notify the other party hereto of such
requirement and allow such party a reasonable opportunity to seek a protective
order or other appropriate remedy to prevent such disclosure.  The parties
acknowledge that money damages would not be a sufficient remedy for any breach
of the provisions of this Section 7.01(a) and that the non-breaching party shall
be entitled to equitable relief in a court of law in the event of, or to
prevent, a breach of this Section 7.01(a).

 

Section 7.02.  Ownership of Assets.

 

(a)                       DG Systems and any and all enhancements thereof or
improvements thereto are and shall remain the sole exclusive property of DG or
its Affiliates and/or their suppliers as applicable.

 

(b)                       SpinCo Systems and any and all enhancements thereof or
improvements thereto are and shall remain the sole exclusive property of SpinCo
or its Affiliates and/or their suppliers as applicable.

 

Section 7.03.  Security.  Except as otherwise set forth on the Schedules, each
party, its Affiliates and their respective employees, authorized agents and
subcontractors shall only use or access such other party’s Systems, premises or
data to the extent such Person is authorized by the other party or pursuant to
the terms hereof.  Except as otherwise set forth on the Schedules, each party,
its Affiliates and their employees, authorized agents and subcontractors shall
comply with the other party’s policies and procedures in relation to the use and
access of the other party’s Systems, provided that they do not conflict with the
terms of this Agreement and further provided that to the extent such policies
and procedures of Service Recipient make the provision of a given Service
impracticable, Service Provider will be relieved of the obligation to provide
such Service.

 

Section 7.04.  Compliance with Law.  Each party shall at all times fully comply
with all Law to which such party and its Affiliates (to the extent such
Affiliates are engaged in the receipt or provision of Services) is subject in
connection with the receipt or provision of Services hereunder, as applicable.

 

Section 7.05.  Labor Matters.  Nothing in this Agreement is intended to transfer
the employment of employees engaged in the provision of any Service from one
party to the other.  All employees and representatives of a party and any of its
Affiliates will be deemed for all compensation, employee benefits, tax and
social security contribution purposes to be employees or representatives of such
party or its Affiliates (or their subcontractors) and not employees or
representatives of the other party or any of its Affiliates (or their
subcontractors).  In providing the Services, such employees and representatives
of Service Provider and its Affiliates (or their subcontractors) will be under
the direction, control and supervision of Service Provider or its Affiliates (or
their subcontractors) and not of Service Recipient or its Affiliates.

 

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Section 7.06.  Record Retention.  Each party shall take reasonable steps to
preserve and maintain complete and accurate accounts, books, and records of and
supporting documentation relating to the Services provided hereunder, which
records shall be retained by such party and/or its Affiliates for the period of
time specified in such party’s record retention policies and procedures (which
are governed by applicable Law and good industry practices).

 

Section 7.07.  Manual Access.  SpinCo shall have access to the online drives of
the Company’s operating and management information systems for a period of five
(5) Business Days from the date hereof to complete the manual deletion of Online
Business data, under the reasonable supervision of a Company information
technology supervisor.

 

ARTICLE 8
REPRESENTATIONS AND WARRANTIES

 

Section 8.01.  Representations and Warranties of DG.  DG represents and warrants
to SpinCo as of the date hereof that:

 

(a)                       The execution, delivery and performance by DG of this
Agreement are within DG’s corporate powers and have been duly authorized by all
necessary corporate action on the part of DG.  This Agreement constitutes a
valid and binding agreement of DG enforceable against DG in accordance with its
terms (subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws affecting creditors’ rights generally
and general principles of equity).

 

(b)                       The execution, delivery and performance by DG of this
Agreement require no action by or in respect of, or filing with, any
Governmental Authority other than any such action or filing that has already
been taken or made or as to which the failure to make or obtain would not
reasonably be expected to materially impede or delay the performance by DG of
its obligations hereunder.

 

(c)                        The execution, delivery and performance by DG of this
Agreement do not and will not (i) violate the certificate of incorporation or
bylaws of DG, (ii) violate any Law or (iii) constitute a default under or give
rise to any right of termination, cancellation or acceleration of any right or
obligation under any provision of any agreement or other instrument binding upon
DG, with such exceptions, in the case of clauses (ii) and (iii), as would not
reasonably be expected to materially impede or delay the performance by DG of
its obligations hereunder.

 

Section 8.02.  Representations and Warranties of SpinCo.  SpinCo represents and
warrants to DG as of the date hereof that:

 

(a)                       The execution, delivery and performance by SpinCo of
this Agreement are within SpinCo’s corporate or other applicable powers and have
been duly authorized by all necessary corporate or other applicable action on
the part of SpinCo.  This Agreement constitutes a valid and binding agreement of
SpinCo enforceable against SpinCo in accordance with its terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws affecting creditors’ rights generally and general
principles of equity).

 

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(b)                       The execution, delivery and performance by SpinCo of
this Agreement require no action by or in respect of, or filing with, any
Governmental Authority other than any such action or filing that has already
been taken or made or as to which the failure to make or obtain would not
reasonably be expected to materially impede or delay the performance by SpinCo
of its obligations hereunder.

 

(c)                        The execution, delivery and performance by SpinCo of
this Agreement do not and will not (i) violate the certificate of incorporation
or bylaws or other equivalent organizational documents of SpinCo, (ii) violate
any Law or (iii) constitute a default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation under any
provision of any agreement or other instrument binding upon SpinCo, with such
exceptions, in the case of each of clauses (ii) and (iii), as would not
reasonably be expected to materially impede or delay the performance by SpinCo
of its obligations hereunder.

 

ARTICLE 9
MISCELLANEOUS

 

Section 9.01.  No Agency; Independent Contractor Status.  Nothing in this
Agreement shall constitute or be deemed to constitute a partnership or joint
venture between the parties hereto or constitute or be deemed to constitute any
party the agent or employee of the other party for any purpose whatsoever and
neither party shall have authority or power to bind the other or to contract in
the name of, or create a liability against, the other in any way or for any
purpose.  Each party hereto acknowledges and agrees that the other party is an
independent contractor in the performance of each and every part of this
Agreement and nothing herein shall be construed to be inconsistent with this
status.  Subject to the terms and conditions of this Agreement, each party shall
have the authority to select the means, methods and manner by which any Service
is performed by it.

 

Section 9.02.  Subcontractors.  Each party may hire or engage one or more
subcontractors to perform all or any of its obligations under this Agreement;
provided that, (i) such party shall use the same degree of care in selecting any
subcontractors as it would if such subcontractor was being retained to provide
similar services to it and (ii) such party shall in all cases shall remain
responsible for ensuring that obligations with respect to the standards of
services set forth in this Agreement are satisfied with respect to any Service
provided by a subcontractor hired or engaged by it.

 

Section 9.03.  Force Majeure.

 

(a)                       For purposes of this Section 9.03, “force majeure”
means an event beyond the reasonable control of either party, which by its
nature was not foreseen by such party, or, if it was foreseen, was not
reasonably avoidable, and includes without limitation, acts of God, storms,
floods, riots, fires, sabotage, civil commotion or civil unrest, interference by
civil or military authorities, threat, declaration, continuation, escalation or
acts of war (declared or undeclared) or acts of terrorism, failure or shortage
of energy sources, raw materials or components, strike, walkout, lockout or
other labor trouble or shortage, delays by unaffiliated suppliers or carriers,
and acts, omissions or delays in acting by any Governmental Authority or the
other party.

 

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(b)                       Without limiting the generality of Section 5.02(a),
neither party shall be under any liability for failure to fulfill any obligation
under this Agreement, so long as and to the extent to which the fulfillment of
such obligation is prevented, frustrated, hindered, or delayed as a consequence
of circumstances of force majeure; provided that (i) such party shall have used
commercially reasonable efforts to minimize to the extent practicable the effect
of force majeure on its obligations hereunder and (ii) nothing in this
Section 9.03 shall be construed to require the settlement of any strike,
walkout, lockout or other labor dispute on terms which, in the reasonable
judgment of the affected party, are contrary to its interests.  It is understood
that the settlement of a strike, walkout, lockout or other labor dispute will be
entirely within the discretion of the affected party.  The party affected by the
force majeure event shall notify the other party of that fact as soon as
practicable.

 

Section 9.04.  Entire Agreement.  This Agreement, together with the Merger
Agreements and the other Spin-off Agreements (as defined in the Merger Agreement
including all schedules and exhibits hereto and thereto), constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter hereof.  No provision of
this Agreement is intended to confer any rights, benefits, remedies,
obligations, or liabilities hereunder upon any Person other than the parties
hereto and their respective successors and permitted assigns.  No licenses are
granted to any party (including by implication, estoppel or otherwise) except as
expressly set forth in this Agreement.

 

Section 9.05.  Notices.  Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission (provided that any
notice received by facsimile transmission or otherwise at the addressee’s
location on any Business Day after 5:00 p.m.  (addressee’s local time) shall be
deemed to have been received at 9:00 a.m. (addressee’s local time) on the next
Business Day), by reliable overnight delivery service (with proof of service),
hand delivery or certified or registered mail (return receipt requested and
first-class postage prepaid), addressed as follows (or at such other address for
a party as shall be specified in a notice given in accordance with this
Section 9.05):

 

if to DG:

 

c/o Extreme Reach, Inc.
75 2nd Avenue
Needham, MA  02494
Attention: John Roland, President and CEO
Facsimile: (877) 484-8836

 

with a copy (which shall not constitute notice) to:

 

Pierce Atwood LLP
100 Summer Street, Suite 2250
Boston, MA  02110
Attention: Timothy C. Maguire, Esq.
Facsimile:  (617) 824-2020

 

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if to SpinCo:

 

Sizmek Inc.
750 West John Carpenter Freeway, Suite 700
Irving, TX 75039
Attention: Craig Holmes, Chief Financial Officer
Facsimile: (972) 581-2100

 

with a copy to:

 

Sean N. Markowitz
General Counsel and Secretary
Sizmek Inc.

750 West John Carpenter Freeway, Suite 700
Irving, TX 75039
Facsimile: (972) 581-2100

 

and a copy (which shall not constitute notice) to:

 

Latham & Watkins LLP
555 Eleventh Street, N.W., Suite 1000
Washington, D.C. 20004-1304
Attention: William P. O’Neill
Facsimile: (202) 637-2201
E-mail: william.o’neill@lw.com

 

For the avoidance of doubt, copies delivered solely to counsel shall not
constitute notice.

 

Section 9.06.  Interpretation; Certain Definitions.  When a reference is made in
this Agreement to an Article, Section or Exhibit, such reference shall be to an
Article or Section of, or an Exhibit to, this Agreement, unless otherwise
indicated.  The table of contents and headings for this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.  Whenever the words “include,” “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation.”  The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.  All
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.  The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term.  Any statute defined or
referred to herein or in any agreement or instrument that is referred to herein
means such statute as from time to time amended, modified or supplemented,
including (in the case of statutes) by succession of comparable successor
statutes.  References to a Person are also to its permitted successors and
assigns.

 

Section 9.07.  Severability.  If any term or other provision of this Agreement
is invalid,

 

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illegal or incapable of being enforced by any rule of Law, or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
Separation is not affected in any manner materially adverse to any party.  Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the Separation
be consummated as originally contemplated to the fullest extent possible.

 

Section 9.08                             Further Assurances.  In addition to and
without limiting the actions specifically provided in this Agreement, each of
the Parties hereto shall use its reasonable best efforts, on and after the date
hereof, to take, or cause to be taken, all actions, and to do, or cause to be
done, all things, reasonably necessary, proper or advisable under applicable Law
to consummate and make effective the transactions contemplated by this
Agreement.  Without limiting the foregoing, on and after the date hereof, each
Party hereto shall cooperate with the other Party, and without any further
consideration, but at the expense of the requesting Party, to execute and
deliver, or use its reasonable best efforts to cause to be executed and
delivered, all instruments, including instruments of conveyance, assignment and
transfer, and to make all filings with, and to obtain all consents, approvals or
authorizations of, any Governmental Authority or any other Person under any
permit, license, agreement, indenture or other instrument, and to take all such
other actions as such Party may reasonably be requested to take by the other
Party hereto from time to time, consistent with the terms of this Agreement, in
order to effectuate the provisions and purposes of this Agreement.  From and
after the date hereof, if there is any asset that is used primarily in the
Television Business or the Online Business that is critical to the operation of
the other, the parties shall negotiate in good faith to make such asset or the
benefit thereof available to the other pursuant to this Agreement or such other
arrangement as the parties may in good faith agree.

 

Section 9.09                             Assignment.  Neither this Agreement nor
any rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of Law or otherwise) without the prior
written consent of the other parties hereto, except that either party upon
written notice to the other, may assign, in its sole discretion, any of or all
its rights, interests and obligations under this Agreement to any direct or
indirect wholly- owned subsidiary or affiliate of the assigning party, but no
such assignment shall relieve the assigning party of any of its obligations
hereunder.

 

Section 9.10.                          Entire Agreement; No Third-Party
Beneficiaries.  Except for the Subsidiaries and Affiliates of a Service
Recipient or Service Provider with respect to such Services this Agreement
(including the Schedules) is not intended to and shall not confer upon any
person other than the parties hereto any rights or remedies hereunder.  The
Parties acknowledge and agree that the provisions of Article IX (Dispute
Resolution) and Section 12.13 (Specific Performance) of the Separation Agreement
shall apply hereto mutatis mutandis.

 

Section 9.11                             Governing Law.  This Agreement shall be
governed by, and construed in accordance with the laws of the State of Delaware,
without giving effect to any choice or conflict of laws provision or
rule (whether of the State of Delaware or any other jurisdiction) that would
cause the application of the Laws of any jurisdiction other than the State of
Delaware.

 

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Section 9.12                             Consent to Jurisdiction.  Subject to
the last sentence of Section 9.10, the Parties hereby irrevocably submit to the
personal jurisdiction of the Court of Chancery of the State of Delaware, or to
the extent such Court does not have subject matter jurisdiction, the Superior
Court of the State of Delaware (the “Chosen Courts”) solely in respect of the
interpretation and enforcement of the provisions of this Agreement and of the
documents referred to in this Agreement, and in respect of the transactions
contemplated hereby and thereby, or the negotiation, execution or performance
hereof, and hereby waive, and agree not to assert, as a defense in any action,
suit or proceeding for the interpretation or enforcement hereof or of any such
document, that it is not subject thereto or that such action, suit or proceeding
may not be brought or is not maintainable in the Chosen Courts or that the
Chosen Courts are an inconvenient forum or that the venue thereof may not be
appropriate, or that this Agreement or any such documentation may not be
enforced in or by such Chosen Courts, and the parties hereto irrevocably agree
that all claims, actions, suits and proceedings or their causes of action
(whether at Law, in contract, in tort or otherwise) that may be based upon,
arising out of or relating to this Agreement or any of the transactions
contemplated b this Agreement, or the negotiation, execution or performance
hereof shall be heard and determined exclusively in the Chosen Courts.  The
Parties hereby consent to and grant any such Chosen Courts jurisdiction over the
person of such parties and, to the extent permitted by law, over the subject
matter of such dispute and agree that mailing of process or other papers in
connection with any such action, suit or proceeding in the manner provided in
Section 9.9 or in such other manner as may be permitted by law shall be valid,
effective and sufficient service thereof.

 

(b)                                 Each of SpinCo and DG irrevocably consents
to the service of the summons and complaint and any other process in any other
action or proceeding relating to the transactions contemplated by this
Agreement, on behalf of itself or its property, by personal delivery of copies
of such process to such party.  Nothing in this Section 9.12 shall affect the
right of any party to serve legal process in any other manner permitted by Law.

 

Section 9.13                             Counterparts.  This Agreement may be
executed and delivered (including by facsimile transmission) in two (2) or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed and delivered shall be deemed to be an original but all
of which taken together shall constitute one and the same agreement.

 

Section 9.14                             No Strict Construction.  The parties
hereto acknowledge that this Agreement has been prepared jointly by them and
shall not be strictly construed against any party hereto.

 

Section 9.15                             WAIVER OF JURY TRIAL.  EACH OF BUYER
AND THE COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF BUYER
OR THE COMPANY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
THEREOF.

 

Section 9.15                             Amendments.  This Agreement may not be
modified or amended except by an agreement in writing signed by each of the
Parties.

 

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IN WITNESS WHEREOF, SpinCo and DG have caused this Agreement to be executed as
of the date first written above by their respective officers thereunto duly
authorized.

 

 

SIZMEK INC.

 

 

 

 

 

By:

/s/ Neil Nguyen

 

Name:

Neil Nguyen

 

Title:

President and Chief Executive Officer

 

 

 

 

 

DIGITAL GENERATION, INC.

 

 

 

 

 

By:

/s/ Craig Holmes

 

Name:

Craig Holmes

 

Title:

Chief Financial Officer

 

[Signature Page to Transition Services Agreement]

 

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