Document:

Exhibit
10.1

 

 

 

 

 

 

TRANSACTION AGREEMENT

by and among

SOLERA, INC.,

AUTOMATIC DATA PROCESSING, INC.,

ADP ATLANTIC INC.,

ADP NEDERLAND B.V.,

ADP INTERNATIONAL B.V.,

ADP CANADA CO.

and

ADP PRIVATE LIMITED

Dated as of February 8, 2006

 

 

 

 

 

Table of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  2

  
	
  1.1

  	
  Defined Terms

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  PURCHASE AND SALE; PURCHASE PRICE

  	
  13

  
	
  2.1

  	
  Purchase and Sale

  	
  13

  
	
  2.2

  	
  Closing; Closing Date

  	
  14

  
	
  2.3

  	
  Deliveries at the Closing

  	
  14

  
	
  2.4

  	
  Adjustment to the Purchase Price

  	
  15

  
	
  2.5

  	
  Allocation of the Purchase Price

  	
  18

  
	
  2.6

  	
  Section 338 Elections and
  Canadian Tax Elections and Certificates

  	
  18

  
	
  2.7

  	
  Delayed Czech Reorganization

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REPRESENTATIONS AND WARRANTIES OF THE
  SHARE SELLERS

  	
  22

  
	
  3.1

  	
  Organization and Authority

  	
  22

  
	
  3.2

  	
  Enforceability and
  Non-Contravention

  	
  22

  
	
  3.3

  	
  Title to Shares

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS AND WARRANTIES OF THE
  SELLERS REGARDING THE BUSINESS

  	
  24

  
	
  4.1

  	
  Organization and Authority

  	
  24

  
	
  4.2

  	
  Subsidiaries

  	
  24

  
	
  4.3

  	
  Qualification

  	
  25

  
	
  4.4

  	
  Capitalization

  	
  25

  
	
  4.5

  	
  Financial Statements; Internal
  Controls

  	
  26

  
	
  4.6

  	
  No Material Adverse Change

  	
  27

  
	
  4.7

  	
  Tax Matters

  	
  27

  
	
  4.8

  	
  Compliance with Laws

  	
  28

  
	
  4.9

  	
  Permits

  	
  28

  
	
  4.10

  	
  Environmental Compliance

  	
  28

  
	
  4.11

  	
  Enforceability and
  Non-Contravention

  	
  29

  
	
  4.12

  	
  Contracts

  	
  30

  
	
  4.13

  	
  Property

  	
  31

  
	
  4.14

  	
  Intellectual Property

  	
  32

  
	
  4.15

  	
  Litigation

  	
  34

  
	
  4.16

  	
  Brokers

  	
  34

  
	
  4.17

  	
  Employee Benefit Plans

  	
  34

  
	
  4.18

  	
  Labor and Employment Matters

  	
  36

  
	
  4.19

  	
  Insurance

  	
  37

  
	
  4.20

  	
  Assets

  	
  37

  
	
  4.21

  	
  Absence of Undisclosed
  Liabilities

  	
  37

  
	
  4.22

  	
  Affiliate Transactions

  	
  38

  

 

i

 

	
  4.23

  	
  Customers

  	
  38

  
	
  4.24

  	
  Product Warranty

  	
  38

  
	
  4.25

  	
  Exclusivity of Representations

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  REPRESENTATIONS AND WARRANTIES OF THE BUYER

  	
  39

  
	
  5.1

  	
  Organization and Authority

  	
  39

  
	
  5.2

  	
  Enforceability and
  Non-Contravention

  	
  39

  
	
  5.3

  	
  Brokers

  	
  40

  
	
  5.4

  	
  Purchase for Investment

  	
  40

  
	
  5.5

  	
  Financial Ability

  	
  40

  
	
  5.6

  	
  Solvency

  	
  41

  
	
  5.7

  	
  Independent Investigation

  	
  41

  
	
  5.8

  	
  Compliance with Laws

  	
  41

  
	
  5.9

  	
  Permits

  	
  41

  
	
  5.10

  	
  Litigation

  	
  41

  
	
  5.11

  	
  Exclusivity of Representations

  	
  41

  
	
  5.12

  	
  Certain Canadian Tax
  Registrations

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  COVENANTS AND AGREEMENTS

  	
  42

  
	
  6.1

  	
  Conduct of the Business

  	
  42

  
	
  6.2

  	
  Confidentiality

  	
  45

  
	
  6.3

  	
  Expenses

  	
  46

  
	
  6.4

  	
  Publicity

  	
  46

  
	
  6.5

  	
  Consents and Other Matters

  	
  46

  
	
  6.6

  	
  Access to Information and Cooperation

  	
  48

  
	
  6.7

  	
  Preservation of Records

  	
  49

  
	
  6.8

  	
  Further Assurances

  	
  49

  
	
  6.9

  	
  Names and Marks

  	
  50

  
	
  6.10

  	
  Employee and Employee Benefits
  Matters

  	
  51

  
	
  6.11

  	
  Inter-Company Dividends and
  Distributions; Excess Cash

  	
  60

  
	
  6.12

  	
  Intercompany Accounts

  	
  62

  
	
  6.13

  	
  Non-Solicitation of the Buyer’s
  Employees

  	
  62

  
	
  6.14

  	
  Non-Compete

  	
  63

  
	
  6.15

  	
  Transition Services

  	
  63

  
	
  6.16

  	
  Reorganization

  	
  63

  
	
  6.17

  	
  Financing

  	
  64

  
	
  6.18

  	
  Insurance

  	
  66

  
	
  6.19

  	
  ABZ Share Purchase Agreement
  Obligations

  	
  66

  
	
  6.20

  	
  Notification of Certain Matters

  	
  67

  
	
  6.21

  	
  Exclusivity

  	
  67

  
	
  6.22

  	
  Director Resignations

  	
  67

  

 

ii

 

	
  6.23

  	
  Informex Matter

  	
  68

  
	
  6.24

  	
  ChoiceParts

  	
  68

  
	
  6.25

  	
  Overdraft Facilities

  	
  68

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  CONDITIONS PRECEDENT TO THE OBLIGATION OF
  THE BUYER TO CLOSE

  	
  68

  
	
  7.1

  	
  Representations and Covenants

  	
  68

  
	
  7.2

  	
  HSR Act Filing, Other Approvals
  and Requirements

  	
  69

  
	
  7.3

  	
  No Orders

  	
  69

  
	
  7.4

  	
  Other Transaction Documents

  	
  69

  
	
  7.5

  	
  Reorganization

  	
  70

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  CONDITIONS PRECEDENT TO THE OBLIGATION OF
  THE SELLERS TO CLOSE

  	
  70

  
	
  8.1

  	
  Representations and Covenants

  	
  70

  
	
  8.2

  	
  HSR Act Filing, Other Approvals
  and Requirements

  	
  70

  
	
  8.3

  	
  No Orders

  	
  71

  
	
  8.4

  	
  Other Transaction Documents

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  SURVIVAL; INDEMNIFICATION

  	
  71

  
	
  9.1

  	
  Indemnification by Sellers

  	
  71

  
	
  9.2

  	
  Indemnification by the Buyer

  	
  73

  
	
  9.3

  	
  Procedures for Indemnification

  	
  74

  
	
  9.4

  	
  Sole Remedy; No Duplication;
  Other Provisions

  	
  76

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  TAX MATTERS

  	
  78

  
	
  10.1

  	
  Preparation of Tax Returns and
  Payment of Taxes

  	
  78

  
	
  10.2

  	
  Straddle Periods

  	
  80

  
	
  10.3

  	
  Refunds

  	
  80

  
	
  10.4

  	
  Conveyance Taxes

  	
  81

  
	
  10.5

  	
  Section 338(h)(10) Election
  Taxes

  	
  81

  
	
  10.6

  	
  Termination of Tax Allocation
  Agreements

  	
  81

  
	
  10.7

  	
  Tax Indemnification Procedures

  	
  82

  
	
  10.8

  	
  Tax Audits and Contests;
  Cooperation

  	
  83

  
	
  10.9

  	
  Tax Treatment of Indemnity
  Payments

  	
  84

  
	
  10.10

  	
  Carrybacks

  	
  84

  
	
  10.11

  	
  Tax Elections

  	
  84

  
	
  10.12

  	
  No Access to Consolidated
  Returns

  	
  85

  
	
  10.13

  	
  Advance Pricing Agreement

  	
  85

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  TERMINATION OF AGREEMENT

  	
  86

  
	
  11.1

  	
  Termination

  	
  86

  

 

iii

 

	
  11.2

  	
  Survival After Termination

  	
  87

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MISCELLANEOUS

  	
  88

  
	
  12.1

  	
  Consent to Jurisdiction; Service
  of Process; Waiver of Jury Trial

  	
  88

  
	
  12.2

  	
  Notices

  	
  88

  
	
  12.3

  	
  Entire Agreement

  	
  90

  
	
  12.4

  	
  Waivers and Amendments

  	
  90

  
	
  12.5

  	
  Governing Law

  	
  90

  
	
  12.6

  	
  Binding Effect; Assignment

  	
  90

  
	
  12.7

  	
  Usage

  	
  90

  
	
  12.8

  	
  Articles and Sections

  	
  91

  
	
  12.9

  	
  Interpretation

  	
  91

  
	
  12.10

  	
  Severability of Provisions

  	
  91

  
	
  12.11

  	
  Counterparts

  	
  91

  
	
  12.12

  	
  No Personal Liability

  	
  91

  
	
  12.13

  	
  No Third Party Beneficiaries

  	
  91

  
	
  12.14

  	
  Specific Performance

  	
  92

  

 

Annexes

 

1.1(a)      Specified Business Groups

1.1(b)      Foreign Shares

1.1(c)      Knowledge of Parent

1.1(d)      Knowledge of the Buyer

1.1(e)      Foreign Transferred
Companies

2.1           Purchase Price
Allocation

2.3(f)       Assigned Intellectual
Property

6.5(d)      Foreign Works Council Laws

 

6.14         List of Excluded
Acquisitions/Merger Parties

 

Exhibits

 

A             Form of Asset
Transfer Agreement

B             Form of Foreign Share
Transfer Agreement

C             Form of Transition
Services Agreement

D             Form of Parent Shared
Facilities Agreement

E              Form of Buyer Shared
Facilities Agreement

 

Schedules

 

Seller Disclosure
Schedule

Buyer Disclosure Schedule

 

iv

 

TRANSACTION AGREEMENT

 

TRANSACTION AGREEMENT, dated as of February 8,
2006 (this “Agreement”), by and among
Solera, Inc., a Delaware corporation (the “Buyer”),
Automatic Data Processing, Inc., a Delaware corporation (“Parent”),
ADP Atlantic Inc., a Delaware corporation and a direct wholly owned subsidiary
of Parent (“ADP Atlantic”), ADP Nederland
B.V., a private limited liability company incorporated under the Laws of the
Netherlands and a direct and indirect wholly owned subsidiary of Parent (“ADP Nederland”), ADP International
B.V., a private limited liability company incorporated under the Laws of the
Netherlands and a direct wholly owned subsidiary of ADP Nederland (“ADP International” and, together
ADP Nederland, the “Foreign Share Sellers”
and, the Foreign Share Sellers, together with Parent and ADP Atlantic, the “Share Sellers”), ADP Canada Co., a
Nova Scotia unlimited liability company (“ADP Canada”),
and ADP Private Limited, a limited liability company incorporated under the
Laws of India (“ADP India”
and, together with ADP Canada, the “Foreign Asset Sellers”
and, the Foreign Asset Sellers, together with the Share Sellers, the “Sellers”). Capitalized terms used
but not otherwise defined herein shall have the respective meanings ascribed to
such terms in Article I.

 

WHEREAS, Parent is engaged in the Business through its
Claims Services Group;

 

WHEREAS, Parent intends to effect the Reorganization
immediately prior to the Closing, and following the Reorganization, the
Business will be conducted solely by the Companies;

 

WHEREAS, Parent owns the Hollander Shares and Parent
wishes to sell to the Buyer, and the Buyer wishes to purchase from Parent, all
of the Hollander Shares upon the terms and subject to the conditions of this
Agreement (the “Hollander Share Purchase”);

 

WHEREAS, ADP Atlantic owns the CSG Shares and the
IMS Shares and ADP Atlantic wishes to sell to the Buyer, and the Buyer
wishes to purchase from ADP Atlantic, all of the CSG Shares and
IMS Shares upon the terms and subject to the conditions of this Agreement
(the “CSG/IMS Share Purchase”);

 

WHEREAS, each Foreign Share Seller owns its respective
Foreign Shares and each Foreign Asset Seller owns its respective Foreign Assets
and is subject to its respective Foreign Liabilities, which, in each case, will
be transferred to, and assumed by, the Buyer upon the terms and subject to the
conditions of this Agreement and pursuant to the applicable Foreign Transfer
Agreement (collectively, the “Foreign Purchases”
and, together with the Hollander Share Purchase and the CSG/IMS Share
Purchase, the “Transaction”);
and

 

WHEREAS, the parties desire to make certain
representations, warranties and agreements in connection with the Transaction
and also to prescribe certain conditions to the Transaction.

 

 

NOW, THEREFORE, in consideration of the mutual
covenants, representations, warranties and agreements entered into herein, and
intending to be legally bound hereby, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1           Defined
Terms.

 

(a)           For all purposes of
this Agreement, the following terms shall have the respective meanings set
forth in this Section 1.1(a):

 

“ABZ Entities”
means the Persons identified as such on Annex 1.1(a) hereto.

 

“ABZ Retention Amount”
means an agreed upon amount, relating to the obligations and liabilities
arising under the ABZ Retention Plans, equal to $750,000.

 

“ABZ Share Purchase
Agreement” means the Share Purchase Agreement, dated
December 18, 2003, between ABZ Holding B.V., a private limited liability
company incorporated under the Laws of the Netherlands, and ADP Nederland.

 

“ACS Entities”
means the Persons identified as such on Annex 1.1(a) hereto.

 

“Additional
Adjustment Amount” means the sum of (i) each Specified
Business Group’s Indebtedness (other than unfunded or underfunded pension
obligations that may be considered Indebtedness), determined as of the open of
business on the Closing Date before giving effect to the transactions
contemplated hereby, on a consolidated basis in accordance with GAAP,
consistently applied during the periods involved, utilizing to the extent
consistent with GAAP the same methodology and adjustments as were used in
preparing the Company Financial Statements; provided, that for purposes
of such calculation all interest, prepayment penalties, premiums, fees and
expenses (if any) which would be payable if such Indebtedness was paid in full
on the Closing Date shall be treated as Indebtedness, and (ii) all
obligations or liabilities (other than unfunded or underfunded pension
obligations) arising under the Employee Transaction Agreements and all other
obligations payable in connection with or as a result of the Transaction to
current or former employees of the Companies or the Subsidiaries, including
bonuses and deferred compensation, in each case, determined as of the open of
business on the Closing Date but assuming consummation of the transactions
contemplated hereby, on a consolidated basis in accordance with GAAP, consistently
applied during the periods involved, utilizing to the extent consistent with
GAAP the same methodology and adjustments as were used in preparing the Company
Financial Statements.

 

2

 

“Affiliate”
means, with respect to any Person, any other Person controlling, controlled by
or under common control with such Person. The term “control” (including, with
correlative meaning, the terms “controlled by” and “under common control with”),
as applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting or other securities, by
contract or otherwise.

 

“Audatex Entities”
means the Persons identified as such on Annex 1.1(a) hereto.

 

“Business”
means the Claims Services provided by the Companies (after giving effect to the
Reorganization).

 

“Business Day”
means a day other than Saturday, Sunday or any day on which banks located in
New York, New York are authorized or obligated by Law to close.

 

“Business Material Adverse
Effect” means any effect, event, circumstance, change,
development, impairment or condition that, individually or in the aggregate
with all other effects, events, circumstances, changes, developments,
impairments or conditions, (i) would materially impair the ability of the
Sellers to consummate the Transaction or (ii) is or is reasonably likely
to be materially adverse to the financial condition, business, results of
operations, properties or assets of the Business, taken as a whole, except
that, with respect to this clause (ii), events, circumstances, changes,
developments, impairments or conditions resulting from (A) events,
changes, developments, conditions or circumstances in worldwide, foreign,
national, local or industry conditions or circumstances (political, economic,
regulatory or otherwise), so long as the foregoing do not disproportionately
affect the Business, (B) an outbreak or escalation of war, armed hostilities,
acts of terrorism, political instability or other national or international
calamity, crisis, emergency or natural disaster, or any governmental or other
response to any of the foregoing, in each case, whether occurring within or
outside the United States, so long as the foregoing do not disproportionately
affect the Business, (C) the announcement in and of itself of this
Agreement and the transactions contemplated hereby, (D) any change in Law
or interpretations thereof or any change in accounting principles or
requirements, in each case, occurring after the date hereof, (E) any
action of any Seller taken with the prior written consent of the Buyer or
(F) the fact in and of itself (and not the underlying cause(s) thereof)
that any Company failed to meet any estimates of revenues or earnings or other
financial performance for any period, in each case of clauses (A) through
(F), shall not constitute a Business Material Adverse Effect.

 

“Claims Services”
means (i) vehicle collision repair, medical bill auditing and claims
management and property and casualty claims estimating or processing services,
applications, databases, information services, auto collision and workers’
compensation bill review, workflow and payment solutions for insurers, adjusters,
assessors, recyclers, rental car companies, fleet owners, collision parts
suppliers and 

 

3

 

collision repairers involved in the vehicle collision
repair, bill audit and claims management and property and casualty claims
process, (ii) collision repairer, adjuster, assessor and recycler
management systems for collision repairers, adjusters, assessors and recyclers,
(iii) vehicle parts locating, valuation and disposition databases and
solutions for insurers, adjusters, assessors, collision repairers and
recyclers, (iv) salvage and aftermarket parts numbering exchange
methodologies and databases for insurers, adjusters, assessors, collision
repairers, parts suppliers and recyclers, (v) total loss vehicle valuation
solutions for insurers, adjusters, assessors, collision repairers and recyclers
and salvage vehicle disposition solutions for insurers, recyclers and salvage
auctions involved in the collision claims process and (vi) insurance
broker risk management and distribution services that help insurance brokers
create, update and manage insurance policies, sick leave activities and virtual
meeting place solutions used by insurance carriers in Europe.

 

“Code” means
the Internal Revenue Code of 1986, and the rules and regulations promulgated
thereunder.

 

“Companies”
means the Transferred Companies and the Foreign Asset Sellers.

 

“CSG” means
ADP Claims Services Group, Inc., a Delaware corporation and a direct wholly
owned subsidiary of ADP Atlantic.

 

“CSG Shares”
means all of the outstanding shares of common stock, par value $1.00, of CSG.

 

“Czech Audatex”
means Audatex Česká Republika, a.s., a joint stock company incorporated
under the Laws of the Czech Republic, with its registered seat in Praha 4,
Türkova 1001, postal code 149 00, identification number 618 58 684, and an
indirect wholly owned subsidiary of Parent.

 

“Czech Shelfco”
means Audatex Systems s.r.o., a limited liability company incorporated under
the Laws of the Czech Republic, with its registered seat in Praha 1, Olivova
4/2096, postal code 110 00, identification number 273 84 110, and an indirect
wholly owned subsidiary of Parent.

 

“Exchange Act”
means the Securities Exchange Act of 1934, and the rules and regulations
promulgated thereunder.

 

“Exchange Rate”
means, as of any date of determination (or if not available, the most recent
available date), (i) for any conversion of U.S. dollars into any other
currency, the noon (New York, New York local time) buying rate for such other
currency for cable transfers quoted in New York, New York as certified for
customs purposes by the Federal Reserve Bank of New York and (ii) for any
conversion of currency other than U.S. dollars into U.S. dollars or another non-U.S.
currency, the spot rate at noon local time in the relevant market at which, in
accordance with normal banking procedures, the U.S. dollars or other currency
into which conversion is being 

 

4

 

made could be purchased with the other currency from
which conversion is being made from major banks located in New York, New York
or, if not available, any other principal market for U.S. dollars or such
purchased other currency.

 

“Excluded Matters”
means the matters described in the letter from Parent to the Buyer dated as of
the date hereof.

 

“Foreign Antitrust Laws”
means all foreign Laws, Orders, rules and administrative and judicial doctrines
that are designed or intended to prohibit, restrict or regulate actions having
the purpose or effect of monopolization or restraint of trade or lessening of
competition through merger or acquisition.

 

“Foreign Assets”
means the Transferred Assets (in each case, as defined in the Asset Transfer
Agreements) that are to be transferred by the Foreign Asset Sellers to the
Buyer pursuant to the Asset Transfer Agreements.

 

“Foreign Liabilities”
means the Assumed Liabilities (in each case, as defined in the Asset Transfer
Agreements) that are to be assumed by the Buyer from the Foreign Asset Sellers
pursuant to the Asset Transfer Agreements.

 

“Foreign Shares”
means the capital shares and other ownership interests identified as such on Annex 1.1(b)
hereto.

 

“Foreign Transfer
Agreements” means the Asset Transfer Agreements and the Foreign
Share Transfer Agreements.

 

“Foreign Works Council Laws”
means all foreign Laws, Orders, rules and administrative and judicial doctrines
that are designed or intended to require the provision of information to, the
consultation with or the consent or approval of employees to any change of
control or extraordinary transaction involving such employees’ employer.

 

“GAAP” means
United States generally accepted accounting principles.

 

“Hollander”
means ADP Hollander, Inc., a Delaware corporation and a direct wholly owned
subsidiary of Parent.

 

“Hollander Shares”
means all of the outstanding shares of common stock, no par value, of
Hollander.

 

“HSR Act”
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the rules
and regulations promulgated thereunder.

 

“IMS” means
ADP Integrated Medical Solutions, Inc., a Delaware corporation and a direct
wholly owned subsidiary of ADP Atlantic.

 

“IMS Shares”
means all of the outstanding shares of common stock, par value $1.00, of IMS.

 

5

 

“Income Tax Returns”
means any and all Tax Returns or portions of Tax Returns relating exclusively
to Income Taxes.

 

“Income Taxes”
means any and all Taxes imposed on, or measured by, net income, including any
alternative or minimum taxes, estimated taxes, interest, fines, assessments,
penalties or additions to tax imposed in connection therewith or with respect
thereto, and including any transferee liability in respect thereof.

 

“Indebtedness”
of any Person means, without duplication: 
(i) indebtedness for borrowed money or for the deferred purchase
price of property or services in respect of which such Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
not more than 90 days past due or otherwise being contested in good faith);
(ii) any commitment by which such Person assures a creditor against loss,
including contingent reimbursement obligations with respect to letters of
credit; (iii) indebtedness guaranteed in any manner by such Person,
including a guarantee in the form of an agreement to repurchase or reimburse;
and (iv) obligations under leases that are classified as capitalized
leases in accordance with GAAP in respect of which such Person is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person assures a creditor against loss, other than, in
the case of clauses (i)-(iv), any such indebtedness, commitments or
obligations owing from any of the ABZ Entities or Audatex Entities (or their
respective Subsidiaries) to any of the ABZ Entities or Audatex Entities (or
their respective Subsidiaries).

 

“Insider”
means any (i) Affiliate of any Company or any Subsidiary (other than any
Company or any Subsidiary) and (ii) any officer, director, executive
employee or partner of any Company or Subsidiary or any Affiliate of any
Company or any Subsidiary or any spouse or descendant (whether natural or
adopted) of any such individual or any entity in which any of the foregoing
individuals owns a 5% or greater direct or indirect beneficial interest.

 

“Intellectual Property”
means all intellectual property in any jurisdiction anywhere in the world,
including all:  (i) patents, patent
applications and patent disclosures and any and all divisions, continuations,
re-examinations, re-issues or similar legal protections related thereto; (ii)
copyrights, copyrightable works and data base rights; (iii) trademarks, service
marks, trademark and service mark applications, trade names, trade dress,
corporate names, logos and slogans (and all translations, adaptations,
derivations and combinations of the foregoing), and Internet domain names,
together with all goodwill associated with each of the foregoing; (iv)
registrations and applications for any of the foregoing; (v) industrial
designs, trade secrets, confidential information, know-how and inventions; and
(vi) computer software (including source code, executable code, data, databases
and documentation); and (vii) all rights to bring an action at law or in equity
relating to the foregoing, including the right to receive proceeds and damages
therefrom.

 

“IRS” means
the U.S. Internal Revenue Service.

 

6

 

“Knowledge of Parent”
means the actual knowledge (without independent investigation) of any of the
individuals whose names are set forth on Annex 1.1(c) hereto.

 

“Knowledge of the Buyer”
means the actual knowledge (without independent investigation) of any of the
individuals whose names are set forth on Annex 1.1(d) hereto.

 

“Lien” means
any lien, pledge, mortgage, deed of trust, security interest, claim, lease,
license, charge, option, right of first refusal, easement, servitude, transfer
restriction, encumbrance or any other restriction or limitation whatsoever.

 

“Net Working
Capital” means, without duplication, with respect to each
Specified Business Group, (i) the sum of cash and cash equivalents
(including any Restricted Cash), accounts receivable (net of allowance for
doubtful accounts) and other current assets of such Specified Business Group
(excluding all items with respect to Income Taxes of the Companies and
Subsidiaries) minus (ii) the sum of (A) accounts payable, accrued
expenses, other current liabilities and accrued labor costs of such Specified
Business Group (excluding (1) Indebtedness, (2) unfunded or underfunded pension
obligations, whether or not such pension obligations are required by GAAP to be
included as a current liability for purposes of calculating Net Working
Capital, (3) all costs and expenses related to the proposed restructuring of Subsidiaries
of the Audatex Entities in Germany as previously disclosed to the Buyer,
whether or not any such costs and expenses related to such restructuring are
required by GAAP to be included as a current liability for purposes of
calculating Net Working Capital, (4) all obligations or liabilities arising
under the Employee Transaction Agreements and all other obligations payable in
connection with or as a result of the Transaction to current or former
employees of the Companies or the Subsidiaries, including bonuses and deferred
compensation, included in the definition of “Additional Adjustment Amount,”
(5) all obligations or liabilities arising under the ABZ Retention Plans
and (6) all items with respect to Income Taxes of the Companies and
Subsidiaries), determined as of the open of business on the Closing Date after
giving effect to the discharges, terminations and cancellations contemplated by
Section 6.12 and before giving effect to the transactions contemplated hereby
to occur on the Closing Date in accordance with GAAP, consistently applied
during the periods involved, utilizing to the extent consistent with GAAP the
same methodology and adjustments as were used in preparing the Company
Financial Statements plus (B) the Restructuring Amount plus (C) the Pension
Amount plus (D) the Additional Adjustment Amount plus (E) the ABZ
Retention Amount; provided, that with respect to any Person in any
Specified Business Group that is a Foreign Asset Seller, the determination of
Net Working Capital shall only include the items described in clauses (i)
and (ii) above to the extent such items are included in the Foreign Assets and
Foreign Liabilities to be transferred by such Person; provided, further,
that, notwithstanding anything to the contrary contained in this Agreement, for
purposes of determining Net Working Capital, (a) the Czech Business Assets
shall be deemed to be held by the Audatex Entities, whether or not the Czech
Reorganization has occurred prior to the Closing or Czech Shelfco is retained
by Parent at the Closing pursuant to 

 

7

 

Section 2.7 and (b) with respect to any
liabilities owed by any Transferred Company or Subsidiary that is directly or
indirectly wholly-owned by a Transferred Company, on the one hand, to any
Subsidiary that is not directly or indirectly wholly-owned by a Transferred
Company, on the other hand, an amount equal to the percentage ownership
interests of the applicable minority shareholders multiplied by the amount of
such liability shall be deducted from the Net Working Capital.

 

“Pension Amount” means an agreed upon amount, relating to the
underfunded status of certain of the Companies’ non-U.S. pension plans, equal
to $7,000,000.

 

“Permitted Liens”
means (i) except with respect to real property, Liens relating to purchase
money security interests entered into in the ordinary course of business,
(ii) mechanics’, materialmen’s, workmen’s, repairmen’s, warehousemen’s,
carrier’s and other similar Liens (including Liens created by operation of
Law), which are incurred in the ordinary course of business and secure amounts
that are not past due other than any past due amounts that are being contested
in good faith by appropriate proceedings, (iii) Liens for Taxes (and
assessments and other governmental charges) not yet due and payable or that are
being contested in good faith by appropriate proceedings, (iv) as to real
property, encroachments or any conditions that would be disclosed by a physical
inspection of the property or a current survey that do not have a material
adverse effect on the use of the underlying asset, (v) Liens in respect of
pledges or deposits under workers’ compensation Laws, unemployment insurance or
other types of social security, (vi) municipal bylaws or zoning, building
or planning regulations that are not violated by the current use and occupancy
of the Leased Real Property in the operation of the Business, (vii) Liens
(other than mortgages, deeds of trust, attachments and other monetary liens)
that do not have a material adverse effect on the use of any Owned Real
Property, Leased Real Property or Intellectual Property as currently used in
the operation of the Business, (viii) restrictions on transfer or
assignment imposed by applicable securities Laws and (ix) Liens reflected
or reserved against or otherwise disclosed in the audited combined balance
sheet of the Business as of June 30, 2005 included in the Company
Financial Statements.

 

“Person”
means any individual, corporation, partnership, limited liability company,
limited liability partnership, firm, joint venture, association, joint-stock
company, trust, unincorporated organization, Governmental Body or other entity.

 

“Restructuring Amount”
means an agreed upon amount, relating
to the proposed restructuring of Subsidiaries of the Audatex Entities in
Germany as previously disclosed to the Buyer, equal to $8,000,000.

 

“section 75 of
the Pensions Act 1995” means section 75 of the Pensions Act 1995
including: (1) section 75A of the Pensions Act 1995; (2) the Occupational
Pension Schemes (Employer Debt) Regulations 2005 as amended by the Occupational
Pension Schemes (Employer Debt etc.) (Amendment) Regulations 2005; (3) any
other regulations made under section 75 or section 75A of the Pensions Act
1995; and (4) any future legislation or provision relating to the same subject
matter as appropriate.

 

8

 

“Solvent”
means, as to any Person at any date of determination, that (i) the fair
saleable value of its assets (measured on a going concern basis) is greater
than the amount of its liabilities (including disputed, contingent and
unliquidated liabilities) as such value is established and liabilities
evaluated for purposes of Section 101(32)(A) of the Federal Bankruptcy
Reform Act of 1978 (11 U.S.C. §101, et seq.) and the regulations
issued from time to time thereunder, (ii) it is able to realize upon its
assets and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business,
(iii) it does not intend to, and does not believe that it will, incur
debts or liabilities beyond its ability to pay as such debts and liabilities
mature and (iv) it is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which its property would
constitute unreasonably small capital. The amount of disputed, contingent and
unliquidated liabilities at any time shall be computed as the amount that, in
light of all the facts and circumstances existing at the time, represents the
amount that can reasonably be expected to become an actual or matured
liability.

 

“Specified Business Group”
means each of the ABZ Entities, the ACS Entities and the Audatex
Entities.

 

“Target Net Working Capital”
means (i) with respect to the ABZ Entities, €1,600,000 (Euros),
(ii) with respect to the ACS Entities, $5,000,000 and (iii) with
respect to the Audatex Entities, €17,500,000 (Euros); provided, that
such amounts that are in Euros shall be converted into U.S. dollars using
the applicable Exchange Rate as of the date that is one Business Day prior to
the date of delivery by Parent of the statements of Estimated Closing Date Net
Working Capital pursuant to Section 2.4(a).

 

“Tax Returns”
means any and all reports, returns, declarations, claims for refund, elections,
disclosures, estimates, information reports or returns or statements required
to be supplied to a taxing authority in connection with Taxes, including any
schedule or attachment thereto or amendment thereof.

 

“Taxes”
means (i) any and all federal, state, regional, provincial, local, foreign
and other taxes, levies, fees, imposts, duties, and similar governmental
charges as well as any contributions to any social security or employee social
security scheme (including any interest, fines, assessments, penalties or
additions to tax imposed in connection therewith or with respect thereto),
including (x) taxes imposed on, or measured by, income, franchise, profits
or gross receipts, (y) ad valorem, value added, capital gains, sales,
goods and services, harmonized sales, consumption, use, real or personal
property, capital stock, license, branch, payroll, estimated, withholding,
employment, social security (or similar), unemployment, compensation, utility,
severance, production, excise, stamp, occupation, premium, windfall profits,
transfer and gains taxes, and customs duties and (z) any other taxes
denominated in any manner whatsoever, and (ii) any transferee liability in
respect of any items described in clause (i) above.

 

9

 

“Transaction Documents”
means this Agreement, the Foreign Transfer Agreements, the Transition Services
Agreement, the Parent Shared Facilities Agreement and the Buyer Shared
Facilities Agreement.

 

“Transferred Companies”
means CSG, IMS, Hollander and the Persons identified as such on Annex 1.1(e)
hereto.

 

“U.K. Company”
means Audatex (U.K.) Limited, a limited liability company registered in England
& Wales.

 

“U.K Pension Plan”
means the U.K. ADP Pension & Life Assurance Plan dated May 21, 1996.

 

(b)           The following
capitalized terms are defined in the following Sections:

 

	
  Term

  	
   

  	
  Section

  
	
  2006 Informex Letter

  	
   

  	
  6.23

  
	
  ABZ Retention Plans

  	
   

  	
  6.10(c)(ii)(5)

  
	
  Advanced Parts Locator
  IP

  	
   

  	
  6.24

  
	
  ADP Atlantic

  	
   

  	
  Preamble

  
	
  ADP Canada

  	
   

  	
  Preamble

  
	
  ADP India

  	
   

  	
  Preamble

  
	
  ADP International

  	
   

  	
  Preamble

  
	
  ADP Marks

  	
   

  	
  6.9(a)

  
	
  ADP Nederland

  	
   

  	
  Preamble

  
	
  ADSP

  	
   

  	
  2.6(c)

  
	
  ADSP Allocation

  	
   

  	
  2.6(c)

  
	
  Affiliate Contract

  	
   

  	
  4.22

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Allocation

  	
   

  	
  2.5

  
	
  APA

  	
   

  	
  10.13(a)

  
	
  Asset Transfer
  Agreements

  	
   

  	
  7.4(a)

  
	
  Buyer

  	
   

  	
  Preamble

  
	
  Buyer Consents and
  Notices

  	
   

  	
  5.2(b)(ii)

  
	
  Buyer Disclosure
  Schedule

  	
   

  	
  Article V

  
	
  Buyer FSA

  	
   

  	
  6.10(b)(v)(2)

  
	
  Buyer Group

  	
   

  	
  6.6(c)

  
	
  Buyer Indemnified Parties

  	
   

  	
  9.1(a)

  
	
  Buyer Permits

  	
   

  	
  5.9

  
	
  Buyer Shared Facilities
  Agreement

  	
   

  	
  7.4(e)

  
	
  Buyer’s Savings Plan

  	
   

  	
  6.10(b)(iii)

  
	
  Canadian APA Parties

  	
   

  	
  10.13(a)

  
	
  Closing

  	
   

  	
  2.2

  
	
  Closing Date

  	
   

  	
  2.2

  
	
  COBRA

  	
   

  	
  4.17(a)

  

 

10

 

	
  Term

  	
   

  	
  Section

  
	
  Commitment Letter

  	
   

  	
  5.5

  
	
  Company Benefit Plans

  	
   

  	
  4.17(a)

  
	
  Company Consents and
  Notices

  	
   

  	
  4.11(b)(ii)

  
	
  Company Financial
  Statements

  	
   

  	
  4.5(a)

  
	
  Company Intellectual Property

  	
   

  	
  4.14(a)

  
	
  Confidential Information

  	
   

  	
  6.2(b)

  
	
  Contest

  	
   

  	
  10.8(a)

  
	
  Contract

  	
   

  	
  3.2(b)(iii)

  
	
  Conveyance Taxes

  	
   

  	
  10.4

  
	
  CSG/IMS Share
  Purchase

  	
   

  	
  Recitals

  
	
  Czech
  Business Assets

  	
   

  	
  2.7(a)

  
	
  Czech Closing

  	
   

  	
  2.7(c)

  
	
  Czech Closing Date

  	
   

  	
  2.7(c)

  
	
  Czech Consents and
  Notices

  	
   

  	
  2.7(a)

  
	
  Czech Reorganization

  	
   

  	
  2.7(a)

  
	
  Debt Financing

  	
   

  	
  5.5

  
	
  Delayed Transfer Assets

  	
   

  	
  6.16

  
	
  DOJ

  	
   

  	
  6.5(b)

  
	
  Employee Transaction Agreements

  	
   

  	
  6.10(b)(vi)(3)

  
	
  Employees

  	
   

  	
  6.10(a)

  
	
  Environmental Laws

  	
   

  	
  4.10

  
	
  Equity Fund

  	
   

  	
  5.5

  
	
  Equity Funding

  	
   

  	
  5.5

  
	
  Equity Funding Letter

  	
   

  	
  5.5

  
	
  ERISA

  	
   

  	
  4.17(a)

  
	
  ERISA Affiliate

  	
   

  	
  4.17(a)

  
	
  Estimated Closing Date
  Net Working Capital

  	
   

  	
  2.4(a)

  
	
  Estimated Excess Net
  Working Capital Amount

  	
   

  	
  2.4(a)

  
	
  Estimated Working Capital Adjustment Limitation

  	
   

  	
  2.4(a)

  
	
  Excess Parent Cash Amount

  	
   

  	
  6.11(b)(iii)

  
	
  Final Net Working
  Capital

  	
   

  	
  2.4(b)

  
	
  Financing

  	
   

  	
  5.5

  
	
  First Choice Firm

  	
   

  	
  2.4(c)

  
	
  Foreign Asset Sellers

  	
   

  	
  Preamble

  
	
  Foreign Companies

  	
   

  	
  2.6(a)

  
	
  Foreign Purchases

  	
   

  	
  Recitals

  
	
  Foreign Share Sellers

  	
   

  	
  Preamble

  
	
  Foreign Share Transfer
  Agreements

  	
   

  	
  7.4(b)

  
	
  Former Employees

  	
   

  	
  6.10(a)

  
	
  Former
  U.S. Employees

  	
   

  	
  6.10(b)

  
	
  FTC

  	
   

  	
  6.5(b)

  
	
  Governmental Bodies

  	
   

  	
  3.2(b)(iv)

  
	
  Guaranties

  	
   

  	
  4.12(a)(iii)

  
	
  Hollander Share
  Purchase

  	
   

  	
  Recitals

  
	
  Indemnified Person

  	
   

  	
  9.3(a)

  

 

11

 

	
  Term

  	
   

  	
  Section

  
	
  Indemnifying Person

  	
   

  	
  9.3(a)

  
	
  IP Contract

  	
   

  	
  4.14(g)

  
	
  Laws

  	
   

  	
  3.2(b)(iv)

  
	
  Leased Real Property

  	
   

  	
  4.13(b)

  
	
  Leases

  	
   

  	
  4.13(b)

  
	
  Lenders

  	
   

  	
  5.5

  
	
  Litigation

  	
   

  	
  4.15

  
	
  Losses

  	
   

  	
  9.1(a)

  
	
  Material Contracts

  	
   

  	
  4.12(a)

  
	
  National Laws

  	
   

  	
  6.10(c)(ii)(1)

  
	
  Non-Disclosure
  Agreement

  	
   

  	
  6.2(a)

  
	
  Non-U.S. Benefits
  Plans

  	
   

  	
  6.10(c)(i)(2)

  
	
  Non-U.S. Business

  	
   

  	
  6.10(c)

  
	
  Non-U.S. Employees

  	
   

  	
  6.10(c)(i)(1)

  
	
  Non-U.S. Former
  Employees

  	
   

  	
  6.10(c)(i)(2)

  
	
  Objection Notice

  	
   

  	
  2.4(c)

  
	
  Orders

  	
   

  	
  3.2(b)(iv)

  
	
  Outside Date

  	
   

  	
  11.1(b)

  
	
  Owned Real Property

  	
   

  	
  4.13(c)

  
	
  Parent

  	
   

  	
  Preamble

  
	
  Parent FSA

  	
   

  	
  6.10(b)(v)(2)

  
	
  Parent Shared
  Facilities Agreement

  	
   

  	
  7.4(d)

  
	
  Parent’s Accounting Policies

  	
   

  	
  4.5(b)

  
	
  Parent’s Pension Plan

  	
   

  	
  6.10(b)(ii)

  
	
  Parent’s Savings Plan

  	
   

  	
  6.10(b)(iii)

  
	
  Parent’s Welfare
  Benefit Plans

  	
   

  	
  6.10(b)(v)(1)

  
	
  Permits

  	
   

  	
  4.9

  
	
  Post-Closing Positive
  Adjustment Amount

  	
   

  	
  2.4(d)

  
	
  Post-Closing Working Capital Adjustment Limitation

  	
   

  	
  2.4(d)

  
	
  Pre Closing Tax Returns

  	
   

  	
  10.1(a)

  
	
  Pre Closing Taxable
  Period

  	
   

  	
  10.1(a)

  
	
  Pre Closing Taxes

  	
   

  	
  10.1(b)

  
	
  Purchase Price

  	
   

  	
  2.1(d)

  
	
  Reorganization

  	
   

  	
  6.16

  
	
  Required Consents and
  Notices

  	
   

  	
  5.2(b)(ii)

  
	
  Restricted Cash

  	
   

  	
  6.1(c)

  
	
  Retained Marks

  	
   

  	
  6.9(a)

  
	
  Second Choice Firm

  	
   

  	
  2.4(c)

  
	
  Section 338(g)
  Election

  	
   

  	
  2.6(a)

  
	
  Section 338(h)(10)
  Election

  	
   

  	
  2.6(a)

  
	
  Section 338(h)(10)
  Forms

  	
   

  	
  2.6(b)

  
	
  Seller Consents and
  Notices

  	
   

  	
  3.2(b)(ii)

  
	
  Seller Disclosure
  Schedule

  	
   

  	
  Article III

  
	
  Seller Indemnified Parties

  	
   

  	
  9.2(a)

  
	
  Sellers

  	
   

  	
  Preamble

  

 

12

 

	
  Term

  	
   

  	
  Section

  
	
  Share Sellers

  	
   

  	
  Preamble

  
	
  Specified Non-U.S. Employees

  	
   

  	
  6.10(c)(ii)(1)

  
	
  Straddle Period

  	
   

  	
  10.2

  
	
  Straddle Tax Returns

  	
   

  	
  10.1(b)

  
	
  Subsidiaries

  	
   

  	
  4.2(a)

  
	
  Tax Loss

  	
   

  	
  9.1(a)(i)

  
	
  Tax Package

  	
   

  	
  10.1(d)

  
	
  Third Party Claim

  	
   

  	
  9.3(a)

  
	
  Transaction

  	
   

  	
  Recitals

  
	
  Transition Services
  Agreement

  	
   

  	
  7.4(c)

  
	
  U.S. APA Parties

  	
   

  	
  10.13(a)

  
	
  U.S. Transferred Employees

  	
   

  	
  6.10(b)(i)(1)

  
	
  U.S. Employees

  	
   

  	
  6.10(b)

  
	
  Unaudited Financial
  Statements

  	
   

  	
  4.5(b)

  
	
  WARN

  	
   

  	
  6.10(b)(vii)

  
	
  WARN Act

  	
   

  	
  6.10(b)(vii)

  

 

ARTICLE II

PURCHASE AND SALE; PURCHASE PRICE

 

2.1           Purchase
and Sale. At the Closing provided for in Section 2.2, upon the terms
and subject to the conditions of this Agreement:

 

(a)           Parent shall sell,
transfer, assign, convey and deliver to the Buyer, and the Buyer shall purchase
from Parent, all of the Hollander Shares free and clear of all Liens;

 

(b)           ADP Atlantic shall
sell, transfer, assign, convey and deliver to the Buyer, and the Buyer shall
purchase from ADP Atlantic, all of the CSG Shares and IMS Shares free
and clear of all Liens;

 

(c)           except as set forth in
Section 2.7(a), each Foreign Share Seller shall sell, transfer, assign,
convey and deliver to the Buyer, and the Buyer shall purchase from such Foreign
Share Seller, all of its respective Foreign Shares free and clear of all Liens
pursuant to the terms of the applicable Foreign Share Transfer Agreement; and

 

(d)           each Foreign Asset
Seller shall effect the transfer of its respective Foreign Assets and Foreign
Liabilities to the Buyer, and the Buyer shall purchase and assume from such
Foreign Asset Seller, all of its respective Foreign Assets free and clear of
all Liens (other than Permitted Liens) and Foreign Liabilities pursuant to the
terms of the applicable Asset Purchase Agreement;

 

13

 

in
each case, for the respective purchase prices set forth on Annex 2.1
hereto (collectively, the “Purchase Price”),
subject to adjustment in accordance with Section 2.4 and allocation in
accordance with Section 2.5, and to be paid in cash in accordance with
Section 2.3.

 

2.2           Closing;
Closing Date. The closing of the Transaction (the “Closing”)
shall take place at the offices of Paul, Weiss, Rifkind, Wharton & Garrison
LLP, at 1285 Avenue of the Americas, New York, New York at 10:00 a.m.
local time, on the later of (i) the second Business Day after the
conditions to the Closing set forth in Article VII and Article VIII
have been satisfied or waived (other than those conditions that by their nature
are to be satisfied at the Closing, but subject to the satisfaction or waiver of
those conditions), or such other place(s), time or date as the parties may
mutually agree in writing and (ii) a date to be determined by the Buyer
upon two Business Days written notice to Parent, which shall be no later than 90 days after the date hereof. The
date upon which the Closing occurs is referred to herein as the “Closing Date” and the Closing shall
be deemed to have occurred at 12:01 a.m. local time in New York, New York,
on the Closing Date.

 

2.3           Deliveries
at the Closing. At the Closing:

 

(a)           the Buyer shall
deliver, or cause to be delivered, to Parent (or its designee) the Purchase
Price in cash by one or more wire transfers (as designated by Parent in
writing) of immediately available funds in U.S. dollars to the bank account or
accounts designated by Parent in writing;

 

(b)           Parent shall deliver,
or cause to be delivered, to the Buyer, stock certificates representing the
Hollander Shares, duly endorsed in blank or accompanied by stock powers duly
executed in blank, in proper form for transfer;

 

(c)           ADP Atlantic shall
deliver, or cause to be delivered, to the Buyer, stock certificates
representing each of the CSG Shares and the IMS Shares, duly endorsed
in blank or accompanied by stock powers duly executed in blank, in proper form
for transfer;

 

(d)           except as set forth in
Section 2.7(a), each Foreign Share Seller shall (i) deliver, or cause
to be delivered, to the Buyer, stock certificates or the relevant local
equivalent or formality representing its respective Foreign Shares, duly
endorsed in blank or accompanied by stock powers duly executed in blank, in
proper form for transfer or (ii) subject to the cooperation of the Buyer,
take such other actions as are necessary to effect the transfer of its
respective Foreign Shares to the Buyer;

 

(e)           each Foreign Asset
Seller shall deliver, or cause to be delivered, to the Buyer, its respective
Foreign Assets, free and clear of all Liens other than Permitted Liens; and

 

14

 

(f)            Parent shall deliver,
or cause to be delivered, to the Buyer, executed assignments of the
Intellectual Property set forth on Annex 2.3(f) from Parent or its
Affiliates to the Buyer.

 

2.4           Adjustment
to the Purchase Price.

 

(a)           No later than three
Business Days prior to the Closing Date, Parent shall determine and deliver to
the Buyer, with respect to each Specified Business Group, a statement, together
with reasonable supporting documentation, setting forth the estimated Net
Working Capital of such Specified Business Group (the “Estimated
Closing Date Net Working Capital”). The Estimated Closing Date Net Working Capital of each Specified
Business Group shall be determined in accordance with GAAP, consistently
applied during the periods involved, utilizing to the extent consistent with
GAAP the same methodology and adjustments as were used in preparing the Company
Financial Statements. To the extent any of the items included in the Estimated
Closing Date Net Working Capital for any Specified Business Group is set forth
in a currency other than U.S. dollars, such item shall be converted into
U.S. dollars in determining such Estimated Closing Date Net Working
Capital, using an Exchange Rate that is determined by Parent as of a date not
more than ten Business Days prior to the Closing Date. If the Buyer does not in
good faith agree with any of the foregoing estimates by Parent (based on the
historical Net Working Capital levels of the Business as derived from the
Company Financial Statements), and Parent and the Buyer are unable, after
consultation in good faith, to resolve such dispute prior to the Closing, for
purposes of determining the Estimated Closing Date Net Working Capital, such
estimates shall be based on the average of Parent’s and the Buyer’s good faith
estimates of the amounts in dispute. With respect to each Specified Business
Group, if the Estimated Closing Date Net Working Capital for such Specified
Business Group exceeds the Target Net Working Capital for such Specified
Business Group (any such excess for such Specified Business Group, an “Estimated Excess Net Working Capital Amount”),
then the Purchase Price payable at the Closing shall be increased by the amount
of such Estimated Excess Net Working Capital Amount; provided, that if
the aggregate of all of the Estimated Excess Net Working Capital Amounts for
all of the Specified Business Groups is greater than $10,000,000, then the
Buyer’s obligation to pay the Estimated Excess Net Working Capital Amounts for
all of the Specified Business Groups at the Closing shall be limited to
$10,000,000 in the aggregate for all Specified Business Groups (with such
limitation being applied to reduce each Estimated Excess Net Working Capital
Amount for each Specified Business Group on a pro rata basis in accordance with
the relative amount of cash and cash equivalents included in each such
Estimated Excess Net Working Capital Amount) (the foregoing limitation, the “Estimated Working Capital Adjustment Limitation”);
provided, further, that, notwithstanding the foregoing
limitation, the Buyer shall continue to be obligated to satisfy its obligations
pursuant to Section 6.11(b). With respect to each Specified Business Group, if
the Target Net Working Capital of such Specified Business Group exceeds the
Estimated Closing Date Net Working Capital of such Specified Business Group,
then the Purchase Price payable at the Closing shall be reduced by the amount
of such excess.

 

15

 

(b)           As promptly as
practicable and in any event within 60 days following the Closing Date, the
Buyer shall prepare and deliver to Parent, with respect to each Specified
Business Group, a statement, in the same form as the statements delivered by
Parent to the Buyer pursuant to Section 2.4(a), setting forth the actual
final Net Working Capital of each Specified Business Group (the “Final Net Working Capital”); provided,
that the applicable Exchange Rate for any item included in Final Net Working
Capital for any Specified Business Group that is set forth in a currency other
than U.S. dollars shall be determined as of the Closing Date. The Final
Net Working Capital of each Specified Business Group shall be determined in
accordance with GAAP, consistently applied during the periods involved,
utilizing to the extent consistent with GAAP the same methodology and
adjustments as were used in preparing the Company Financial Statements.

 

(c)           Parent shall notify the
Buyer within 45 days after receipt of notification of the Final Net
Working Capital of each Specified Business Group of any objections thereto, setting
forth in such notice a statement, together with reasonable supporting
documentation, describing in reasonable detail such objections (an “Objection Notice”). If Parent does
not deliver an Objection Notice within such 45 day period, then the Final
Net Working Capital of each Specified Business Group shall be deemed final and
conclusive and binding upon all of the parties hereto for the purposes of
determining the U.S. dollar amounts therein. Each of the parties hereto shall
each use its commercially reasonable efforts to resolve any such objection and
to agree upon the definitive Final Net Working Capital of each Specified
Business Group. If within 15 days after the Buyer’s receipt of an
Objection Notice, the parties hereto have not resolved such objections and
agreed upon the definitive Final Net Working Capital of each Specified Business
Group, they shall submit such dispute to Houlihan Lokey to resolve any
remaining objections (the “First Choice Firm”).
If the First Choice Firm is unwilling to or otherwise cannot be engaged to
resolve such dispute within 10 days after the expiration of such
15 day period, Parent and the Buyer will select by lot a nationally
recognized valuation or consulting firm upon the expiration of such 10 day
period (after excluding each party’s and its respective Affiliates’ regular
accounting firms) (such firm, the “Second Choice Firm”).
Parent and the Buyer shall cause the First Choice Firm or the Second Choice
Firm, as the case may be, within 30 days after submission, to resolve such
disagreement and to prepare the definitive Final Net Working Capital of each
Specified Business Group in accordance with GAAP, consistently applied during
the periods involved, utilizing to the extent consistent with GAAP the same
methodology and adjustments as were used in preparing the Company Financial
Statements, which resolution and definitive Final Net Working Capital of each
Specified Business Group will be conclusive and binding upon the parties hereto.
The scope of the disputes to be
resolved by the First Choice Firm or the Second Choice Firm, as the case may
be, shall be limited to whether the items in dispute that were properly
included in the Objection Notice were determined in accordance with this
Agreement. The resolution by the First Choice Firm or the Second Choice Firm,
as the case may be, of the matters properly included in the Objection Notice
shall be based solely on presentations and written submissions by Parent and
the Buyer and their respective representatives and not by independent review. The
First Choice Firm or the Second Choice Firm, as the case may be, shall
(i) address only those items in dispute and (ii) not assign a value
greater than the 

 

16

 

greatest value for such item claimed by Parent or the Buyer, or smaller
than the smallest value for such item claimed by Parent or the Buyer. The
determination of the First Choice Firm or the Second Choice Firm, as the case
may be, will be based upon the definition of Net Working Capital set forth in
this Agreement. If the parties hereto submit any unresolved objections to the
First Choice Firm or the Second Choice Firm for resolution as provided in this
Section 2.4(c), the fees and expenses of such First Choice Firm or Second
Choice Firm, as the case may be, shall be borne equally by Parent and the
Buyer.

 

(d)           Upon the final
determination of the Final Net Working Capital of each Specified Business Group
in accordance with Section 2.4(c), if (i) the Final Net Working
Capital of such Specified Business Group is less than the Estimated Closing
Date Net Working Capital of such Specified Business Group, then Parent shall
pay to the Buyer an amount equal to the amount by which the Final Net Working
Capital of such Specified Business Group is less than the Estimated Closing
Date Net Working Capital of such Specified Business Group, and the Purchase
Price shall be so reduced; provided, that, Parent’s obligation to pay
such amount shall be reduced by the amount, if any, by which the Estimated Excess
Net Working Capital Amount for such Specified Business Group, if any, actually
paid by the Buyer at the Closing was reduced by the Estimated Working Capital
Adjustment Limitation, or (ii) the Final Net Working Capital of such
Specified Business Group is greater than the Estimated Closing Date Net Working
Capital of such Specified Business Group, then the Buyer shall pay to Parent an
amount  (any such excess for such
Specified Business Group, a “Post-Closing Positive
Adjustment Amount”) equal to the amount by which the Final Net
Working Capital of such Specified Business Group is greater than the Estimated
Closing Date Net Working Capital of such Specified Business Group, and the
Purchase Price shall be so increased; provided, that, if (A) the
aggregate of all of the Estimated Excess Net Working Capital Amounts for all of
the Specified Business Groups plus (B) the aggregate of all of the Post-Closing
Positive Adjustment Amounts for all of the Specified Business Groups, is
greater than an amount equal to $10,000,000, then the Buyer’s obligation to pay
the Post-Closing Positive Adjustment Amount for all of the Specified Business
Groups shall be limited to an aggregate amount equal to the excess of (i)
$10,000,000 over (ii) the aggregate amount of all of the Estimated Excess Net
Working Capital Amounts for all of the Specified Business Groups actually paid
by the Buyer at the Closing pursuant to Section 2.4(a) (with such limitation
being applied to reduce each Post-Closing Positive Adjustment Amount for each Specified
Business Group on a pro rata basis in accordance with the relative amount of
cash and cash equivalents included in each such Post-Closing Positive
Adjustment Amount) (the foregoing limitation, the “Post-Closing Working Capital Adjustment Limitation”);
provided, further, that, notwithstanding the foregoing
limitation, the Buyer shall continue to be obligated to satisfy its obligations
pursuant to Section 6.11(b).

 

(e)           Any payment required to
be made pursuant to Section 2.4(d) shall be made by the Buyer, on the one
hand, or by Parent, on the other hand, as applicable, in cash by wire transfer
of immediately available funds in U.S. dollars to the bank account or accounts
designated by the other in writing, within five Business Days after the final
determination of the Final Net Working Capital pursuant to 

 

17

 

Section 2.4(c).
If, pursuant to Section 2.4(c) above, there is a dispute as to the final
determination of the Final Net Working Capital, the Buyer and Parent shall
promptly pay to the other, as appropriate, such amounts as are not then in
dispute, pending final determination of such dispute pursuant to
Section 2.4(c).

 

2.5           Allocation
of the Purchase Price. No later than 90 days following the Closing Date,
Parent shall determine and prepare an allocation for each of (a) the
Hollander Shares, (b) the CSG Shares and the IMS Shares,
(c) the Foreign Shares and (d) the Foreign Assets (and the Foreign
Liabilities to the extent such Foreign Liabilities constitute part of the
consideration in respect of the Purchase Price for Tax purposes), of the
applicable portions of the Purchase Price set forth on Annex 2.1
hereto (the “Allocation”) payable to
(i) Parent, (ii) ADP Atlantic, (iii) each of the Foreign Share
Sellers and (iv) each of the Foreign Asset Sellers, respectively; provided,
that Parent shall amend the Allocation to reflect any adjustments to the
Purchase Price made in accordance with Section 2.4(d) no later than
90 days following the final determination thereof. Parent shall forward
the Allocation (and any amendment thereto) to the Buyer for the Buyer’s consent.
In the case of the allocation of the portion of the Purchase Price paid to ADP
Nederland for the shares of Audatex Holding GmbH, as set forth in Annex 2.1
hereto, among the shares of the Foreign Companies held directly and indirectly
by Audatex Holding GmbH, the allocation to each such Foreign Company shall not
be outside the ranges set forth in Section 2.5 of the Seller Disclosure
Schedule without the Buyer’s consent. So long as the allocation proposed
by Parent with respect to such Foreign Companies is within such range, the
Buyer may not withhold its consent to such allocation. If the Buyer does not
consent to any aspect of the Allocation, to the extent it has the right to do
so hereunder, the parties shall resolve such dispute in accordance with the
procedures set forth in Section 2.4(c). The Buyer and the Sellers agree to
use the Allocation (including any allocation of adjustments to the Purchase
Price) in preparing and filing all required forms under Section 1060 of
the Code and all other Tax Returns. The Buyer and the Sellers further agree
that they shall not take any position inconsistent with the Allocation
(including any allocation of adjustments to the Purchase Price) upon any
examination of any such Tax Return, in any refund claim or in any tax
Litigation. The Buyer and Parent shall notify the other within ten Business
Days if it receives written notice that any Tax authority proposes any allocation
different the Allocation (including the allocation of adjustments to the
Purchase Price).

 

2.6           Section 338
Elections and Canadian Tax Elections and Certificates.

 

(a)           Upon the request of the
Buyer, Parent shall join with the Buyer in making an election under
Section 338(h)(10) of the Code and any corresponding or similar elections
under state or local Tax law (each, a “Section 338(h)(10)
Election”) with respect to the purchase and sale of each of the
Hollander Shares and the CSG Shares hereunder (but not with respect to the
IMS Shares). Any such request shall be made by the Buyer in writing no
later than 60 days after the Closing Date. The Buyer shall make an
election under Section 338(g) of the Code (each, a “Section 338(g)
Election”) with 

 

18

 

respect to any of
the Transferred Companies or Subsidiaries that is organized outside the United
States (the “Foreign Companies”).

 

(b)           As soon as practicable
after the date hereof, the Buyer shall prepare IRS Form 8023 and any
similar or successor forms required by applicable state and local Laws
(collectively, the “Section 338(h)(10)
Forms”). Parent shall cooperate with the Buyer in the
preparation of the Section 338(h)(10) Forms and shall deliver such duly completed,
executed copies of such Section 338(h)(10) Forms as are reasonably
requested to complete any Section 338(h)(10) Election at least
30 days prior to the date that such documents or forms are required to be
filed. The Buyer shall bear all responsibility for filing the executed
Section 338(h)(10) Forms with the appropriate authorities.

 

(c)           Parent shall prepare
the allocation of the “aggregate deemed sales price” (the “ADSP”) with respect to the assets of each
of Hollander and CSG and their respective Subsidiaries and for each of the
Foreign Companies for which a Section 338(g) Election is to be made in
accordance with Section 338 of the Code and the applicable Treasury
Regulations promulgated thereunder or comparable provisions for state, local
and foreign Law (each, an “ADSP Allocation”).
Parent shall forward the ADSP Allocation (and any amendment thereto) to the
Buyer for the Buyer’s consent. In the case of the ADSP Allocation among the
assets of Hollander and CSG and their respective Subsidiaries, the allocation
shall not be outside the ranges set forth in Section 2.6 of the Seller
Disclosure Schedule without the Buyer’s consent. So long as the allocation
proposed by Parent with respect to such assets is within such range, the Buyer
may not withhold its consent to such allocation. If the Buyer does not consent
to any aspect of the ADSP Allocation, to the extent it has the right to do so
hereunder, the parties shall resolve such dispute in accordance with the
procedures set forth in Section 2.4(c). The Buyer and Parent shall file,
and shall cause their respective Affiliates to file, all Tax Returns in a
manner consistent with any Section 338(h)(10) Election or
Section 338(g) Election and ADSP Allocation and shall take no position
contrary thereto unless required to do so by applicable Tax laws or by a “final
determination” (as defined in Section 10.8(b) hereto).

 

(d)           ADP Canada and the
Buyer shall elect jointly in prescribed form under section 22 of the Income Tax
Act (Canada) and any corresponding provisions of provincial or territorial tax
law with respect to the sale of the accounts receivable transferred by ADP
Canada to the Buyer, and shall designate in such election an amount equal to
the portion of the Purchase Price allocated to such accounts receivable. ADP
Canada and the Buyer or its assignee shall each file such election with their
respective Canadian Federal income tax returns, or provincial tax returns, as
the case may be, for their respective taxation years that include the Closing.

 

(e)           ADP Canada and the
Buyer shall elect jointly in prescribed form under subsection 20(24) of the
Income Tax Act (Canada) and corresponding provisions of any applicable
provincial or territorial tax law with respect to any applicable undertakings
which are being assumed by the Buyer as contemplated in such provision. ADP
Canada and the Buyer acknowledge that ADP Canada shall be regarded 

 

19

 

as having made a
payment for purposes of subsection 20(24) in respect to such assumption by
transferring a portion of the Foreign Assets located in Canada to the Buyer.

 

(f)            If applicable, at the
Closing ADP Canada and the Buyer or its permitted assignee that purchases the
Foreign Assets located in Canada shall execute jointly an election under
Section 167 of the Excise Tax Act (Canada) and its equivalent in Quebec
pursuant to section 75 of the Act respecting the Quebec sales tax to have the
sale of the Foreign Assets located in Canada take place on a goods and services
tax-free basis under Part IX of the Excise Tax Act (Canada) and on a Quebec
sales tax-free basis pursuant to the Act respecting the Quebec sales tax. The
Buyer or its permitted assignee that purchases the Foreign Assets located in
Canada shall file the elections in the manner and within the time prescribed by
the relevant legislation. The Buyer shall indemnify ADP Canada for any
resulting costs, including any penalties or interest, of ADP Canada in the
event such election is entered into but is not available for whatever reason.

 

2.7           Delayed
Czech Reorganization.

 

(a)           If and to the extent
that Parent in good faith determines that the
transfer of the assets and liabilities primarily related to the Business from
Czech Audatex to Czech Shelfco
(the “Czech Business Assets”) intended
to be consummated in the form of a partial “sale of enterprise” (for purposes
of the Laws of the Czech Republic) of Czech
Audatex as a part of the Reorganization (the “Czech
Reorganization”) could result in a violation of applicable Law
or otherwise adversely affect the rights of the Buyer to own and operate
indirectly the Czech Business Assets from and after the Closing Date as a
result of the failure to obtain any consents, approvals, authorizations or
actions of, or make any filings with or give any notices to, any Governmental
Body in connection with the Czech Reorganization, in each case as set forth in
Section 2.7(a) of the Seller Disclosure Schedule (collectively, the “Czech Consents and Notices”), then,
notwithstanding anything to the contrary set forth herein, (i) the
consummation of the Czech Reorganization shall not be deemed to be a condition
to the Buyer’s obligation to enter into and complete the Closing, (ii) the
Czech Reorganization shall be automatically deemed deferred and shall be null
and void until such time as all legal impediments have been removed and/or all
Czech Consents and Notices have been made or obtained, (iii) the Foreign
Shares of Czech Shelfco shall not be included in the Foreign Shares for
purposes of Sections 2.1(c) and 2.3(d), (iv) the execution of the
Foreign Share Transfer Agreement relating to the Foreign Shares of Czech
Shelfco and the occurrence of the transactions contemplated thereby shall not
be deemed to be conditions to the obligations of the parties hereto to enter
into and complete the Closing and (v) there shall be no adjustment to the
Purchase Price at the Closing with respect to such deferral of the Czech
Reorganization.

 

(b)           If the
Czech Reorganization has not occurred on or prior to the Closing as set forth
in Section 2.7(a), then Parent or its Affiliate shall thereafter, to the
extent permitted by applicable Law, directly or indirectly, hold the Czech
Business Assets subject to the provisions of this Section 2.7(b). Subject
to the provisions of this Section 2.7(b), if the Czech Reorganization has not
occurred on or prior to the Closing, 

 

20

 

(i) Parent or its
Affiliate shall be entitled to, and shall be responsible for, the management of
any Czech Business Assets not transferred to Czech Shelfco as set forth in
Section 2.7(a), (ii) Section 6.6(c) hereto shall continue to apply mutatis mutandis to the Czech Business
Assets and Czech Shelfco until the Czech Closing Date and the Buyer shall
otherwise be entitled to be kept informed and consulted with respect to the
management of any such Czech Business Assets and Czech Shelfco, (iii) Section
6.1 hereto shall continue to apply mutatis
mutandis to the Czech Business Assets and Czech Shelfco until the
Czech Closing Date, provided that for this purpose the term “Material Contract”
shall mean any Contract that is material to the Czech Business Assets and/or
Czech Shelfco and the $1,000,000 threshold set forth in Section 6.1(b)(xi)
shall be deemed to be $200,000, (iv) subject to the provisions of Section
2.7(c), none of Parent or any of its Affiliates will enter into a Contract with
Czech Shelfco that would be included within the Czech Business Assets without
the prior written consent of the Buyer, (v) all royalty and other Contracts
with any Transferred Company or any Subsidiary that are included within the
Czech Business Assets or to which Czech Shelfco is or will become a party on
the Closing Date may not be amended, modified or terminated without the prior written
consent of the Buyer and Parent shall cause any royalties payable under such
Contracts to continue to be paid, and (vi) the Sellers and the Buyer agree to
cooperate and coordinate with respect to the foregoing clauses (i) through (v).
In connection with the Czech Closing, Parent shall comply with the provisions
of Section 6.12 with respect to Czech Shelfco as if the references to the “Closing
Date” in such Section were instead references to the “Czech Closing Date.”  During the period from the Closing until the
earlier of the Czech Closing Date and December 31, 2006, (i) Parent or its
Affiliate shall be entitled to retain an amount equal to all revenue generated
by the Czech Business Assets and shall pay or cause to be paid all expenses of
the Czech Business Assets and (ii) for each month (or portion thereof)
beginning with the last day of the first full calendar month following the
Closing, Parent shall pay or cause to be paid to the Buyer or its designee an
amount equal to $100,000 in cash by wire transfer to an account designated in
writing by the Buyer.

 

(c)           Parent shall, and shall
cause its Affiliates to, use commercially reasonable efforts to obtain all
Czech Consents and Notices and to cause the Czech Closing to occur, in each
case, as promptly as practicable after the date hereof, and the Buyer shall,
and shall cause its Affiliates to, use commercially reasonable efforts to
cooperate with Parent and its Affiliates in obtaining such Czech Consents and
Notices. If and when the Czech Consents and Notices are obtained, and any
applicable legal impediments are removed, and in any event no later than
December 31, 2006, the consummation of the Czech Reorganization and the
transfer of the Foreign Shares of Czech Shelfco to the Buyer shall be effected
in accordance with the terms of this Agreement and a Foreign Share Transfer
Agreement to be entered into and consummated (such consummation, the “Czech Closing”) no later than ten
Business Days thereafter (the date of such consummation, the “Czech Closing Date”).

 

21

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SHARE SELLERS

 

Except as set forth in the corresponding section of
the Disclosure Schedule, which is being delivered by Parent to the Buyer
concurrently herewith (the “Seller Disclosure Schedule”),
the Share Sellers represent and warrant to the Buyer as follows:

 

3.1           Organization
and Authority.

 

(a)           Each of Parent and ADP
Atlantic is a corporation duly incorporated, validly existing and in good
standing under the Laws of its state of incorporation, and has all requisite
corporate power and authority and has taken all corporate action required to
execute and deliver each Transaction Document to which it is a party and to
perform its obligations hereunder and thereunder.

 

(b)           Each Foreign Share
Seller is duly formed, validly existing and (to the extent the concept of good
standing exists in the applicable jurisdiction) in good standing under the Laws
of its jurisdiction of formation, and has all requisite power and authority and
has taken all action required to execute and deliver each Transaction Document
to which it is a party and to perform its obligations thereunder.

 

3.2           Enforceability
and Non-Contravention.

 

(a)           This Agreement
constitutes, and each other Transaction Document to which each Share Seller is
a party will, when executed and delivered on the Closing Date, constitute, the
legal, valid and binding obligation of such Share Seller enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar Laws, Laws of general
applicability relating to or affecting creditors’ rights, and to general equity
principles.

 

(b)           The execution and
delivery by each Share Seller of each Transaction Document to which it is a
party, and the performance by such Share Seller of each such Transaction
Document in accordance with its terms, will not:

 

(i)            violate the
certificate of incorporation, bylaws or organizational documents of such Share
Seller;

 

(ii)           require such Share
Seller to obtain any consents, approvals, authorizations or actions of, or make
any filings with or give any notices to, any Governmental Bodies or any other
Person, except for the notification requirements of the HSR Act and any applicable
Foreign Antitrust Laws, or as set forth in Section 3.2(b)(ii) of the
Seller Disclosure Schedule (collectively, the “Seller
Consents and Notices”);

 

(iii)          if the Seller Consents
and Notices are obtained or made, violate or result in the breach of any of the
terms and conditions of, cause the modification 

 

22

 

or termination of or give any other contracting party
the right to modify or terminate, accelerate or give rise to any obligations
under or constitute (or with notice or lapse of time, or both, constitute) a
default under, any contract, agreement, lease or license (each, a “Contract”) to which such Share
Seller is a party or by or to which such Share Seller or the Hollander Shares,
CSG Shares, IMS Shares or Foreign Shares held by such Share Seller is
or may be bound or subject, or result in the creation of any Lien on the
Hollander Shares, CSG Shares, IMS Shares or Foreign Shares held by
such Share Seller; or

 

(iv)          if the Seller Consents
and Notices are obtained and made, violate or result in the breach of any
applicable orders, judgments, injunctions, awards, decrees or writs
(collectively, “Orders”),
or any applicable laws (including common law), statutes, rules, regulations or
other requirements (collectively, “Laws”), of
any federal, state, regional, provincial, local or foreign courts,
administrative agencies or commissions or other governmental bodies or
authorities (collectively, “Governmental Bodies”);

 

except,
in the case of clause (ii) above, for any consent, approval,
authorization, action, filing or notice the failure to so obtain or make would
not have a Business Material Adverse Effect and except, in the case of
clauses (iii) and (iv) above, for any violation, breach, modification, termination,
right to modify or terminate, acceleration, obligation, default or creation of
any Lien that would not have a Business Material Adverse Effect.

 

3.3           Title
to Shares.

 

(a)           Parent owns
beneficially and of record, free and clear of any Liens, and has full power and
authority to convey to the Buyer, the Hollander Shares, free and clear of any
Liens.

 

(b)           ADP Atlantic owns
beneficially and of record, free and clear of any Liens, and has full power and
authority to convey to the Buyer, each of the CSG Shares and the
IMS Shares, free and clear of any Liens.

 

(c)           Each Foreign Share
Seller owns beneficially and of record, free and clear of any Liens, and has
full power and authority to convey to the Buyer, its respective Foreign Shares,
free and clear of any Liens.

 

23

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

OF THE SELLERS REGARDING THE BUSINESS

 

Except as set forth in the corresponding section of
the Seller Disclosure Schedule, the Sellers represent and warrant to the Buyer
as follows:

 

4.1           Organization
and Authority.

 

(a)           Each Company is duly
formed, validly existing and (to the extent the concept of good standing exists
in the applicable jurisdiction) in good standing under the Laws of its
jurisdiction of formation, and has taken all action required to execute and
deliver each Transaction Document to which it is a party and to perform its
obligations hereunder and thereunder. Each Company has all requisite power and
authority to own, lease and operate its properties and to carry on its Business
as now being conducted, except where the failure to have such power and
authority would not have a Business Material Adverse Effect.

 

(b)           The certificate of
incorporation, bylaws or other organizational documents of each Company, copies
of which have previously been made available to the Buyer, are true and correct
copies of such documents as in effect on the date hereof. No Company is in
default under or in violation of any provision of its certificate of
incorporation, bylaws or other organizational documents.

 

4.2           Subsidiaries.

 

(a)           Section 4.2(a) of
the Seller Disclosure Schedule sets forth the name and jurisdiction of
organization of each Person in which each Transferred Company directly or
indirectly owns or has the power to vote shares of any capital stock or other
ownership interests representing a majority in economic interest or having
voting power to elect a majority of the directors of such Person or other
individuals performing similar functions for such Person, as the case may be
(collectively, the “Subsidiaries”).
Except for the Subsidiaries, the Transferred Companies do not own, directly or
indirectly, any interest or right to acquire any interest in any other Person.

 

(b)           Each Subsidiary is duly
formed, validly existing and (to the extent the concept of good standing exists
in the applicable jurisdiction) in good standing under the Laws of its
jurisdiction of formation, and has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted, except where the failure to have such power and authority would not
have a Business Material Adverse Effect. The certificate of incorporation,
bylaws and similar organizational documents of each Subsidiary, copies of which
have previously been made available to the Buyer, are true and correct copies
of such documents as in effect on the date hereof. No Subsidiary is in default
under or in violation of any provision of its certificate of incorporation,
bylaws or other organizational documents. The minute books, equity interest
record books, and the other records of the Transferred Companies 

 

24

 

and each
Subsidiary have been furnished to the Buyer, and are complete and correct in
all material respects.

 

4.3           Qualification.
Each of the Companies and Subsidiaries is duly qualified or licensed to do
business in all jurisdictions where such Company or such Subsidiary, as
applicable, currently conducts business that requires such qualification or
licensing, except where the failure to be so qualified or licensed would not
have a Business Material Adverse Effect.

 

4.4           Capitalization.

 

(a)           The authorized and
issued shares of capital stock or other ownership interests of each Transferred
Company are as set forth in Section 4.4(a) of the Seller Disclosure
Schedule. All of the outstanding shares of capital stock of each Transferred
Company are duly authorized and validly issued and fully paid, and are not
subject to, nor were they issued in violation of, any preemptive rights or
rights of first refusal and all of the outstanding shares of capital stock of
CSG, IMS and Hollander are nonassessable. No other class of capital stock
or other ownership interests of any Transferred Company is authorized or
outstanding. None of the Transferred Companies has or is bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the purchase or issuance of any of its equity
securities or any securities representing the right to purchase or otherwise
receive any of its equity securities. There are no outstanding or authorized
equity appreciation, phantom equity or similar rights with respect to any
Transferred Company. There are no voting trusts, proxies or any other
agreements or understandings with respect to the voting of the equity
securities of any Transferred Company.

 

(b)           The authorized and
issued shares of capital stock or other ownership interests of each Subsidiary,
the name(s) of the Transferred Companies or Subsidiaries holding shares or
other ownership interests and the amount, type and percentage of shares or
other ownership interests held by such Transferred Companies or Subsidiaries
are as set forth in Section 4.4(b) of the Seller Disclosure Schedule. All
of the outstanding shares of capital stock of each Subsidiary are duly
authorized and validly issued, fully paid, and are not subject to, nor were
they issued in violation of, any preemptive rights or rights of first refusal
and are held of record and owned beneficially by the Persons and in the amounts
set forth in Section 4.4(b) of the Seller Disclosure Schedule, and all of
the outstanding shares of capital stock of each Subsidiary incorporated in the
United States are nonassessable. All shares of capital stock or other ownership
interests of each Subsidiary that are owned by any Transferred Company or
another Subsidiary are owned by such Transferred Company or such other
Subsidiary free and clear of any Liens. None of the Subsidiaries has or is
bound by any outstanding subscriptions, options, warrants, calls, commitments
or agreements of any character calling for the purchase or issuance of any of
its equity securities or any securities representing the right to purchase or otherwise
receive any of its equity securities. There are no outstanding or authorized
equity appreciation, phantom equity, or similar rights with respect to any
Subsidiary. There are no voting trusts, proxies or any other 

 

25

 

agreements or
understandings with respect to the voting of the equity securities of any
Subsidiary.

 

4.5           Financial
Statements; Internal Controls.

 

(a)           Attached to
Section 4.5(a) of the Seller Disclosure Schedule are the audited
combined balance sheets of the Business (without giving effect to the
Reorganization) as of June 30, 2004 and June 30, 2005 and audited
statements of combined earnings, group equity and cash flows, for the fiscal
years ended June 30, 2003, June 30, 2004 and June 30, 2005 (in
each case, without giving effect to the Reorganization), together with all
related notes and schedules thereto, accompanied by the audit report of
Deloitte & Touche LLP (collectively, the “Company
Financial Statements”). The Company Financial Statements fairly
present in all material respects the combined financial position of the
Business (without giving effect to the Reorganization) as of the respective
dates thereof, and the combined results of the operations of the Business
(without giving effect to the Reorganization) for the respective fiscal periods
covered thereby, in each case in accordance with GAAP consistently applied
during the periods involved, except as indicated in any notes thereto.

 

(b)           Attached to
Section 4.5(b) of the Seller Disclosure Schedule is the unaudited
combined balance sheet of the Business (without giving effect to the
Reorganization) as of December 31, 2005 and unaudited statements of
combined earnings, group equity and cash flows, for the quarterly period ended
December 31, 2005 (without giving effect to the Reorganization)
(collectively, the “Unaudited Financial
Statements”). The Unaudited Financial Statements fairly present
in all material respects the combined financial position of the Business
(without giving effect to the Reorganization) as of the date thereof, and the
combined results of the operations of the Business (without giving effect to
the Reorganization) for the fiscal period covered thereby, and have been
prepared in accordance with GAAP, consistently applied during the periods
involved, in a manner consistent with Parent’s accounting policies and
procedures described in Parent’s
Annual Report on Form 10-K, filed August 31, 2005, by Parent with the
Securities and Exchange Commission and its Quarterly Report on Form 10-Q,
filed November 7, 2005, by Parent with the Securities and Exchange
Commission (“Parent’s Accounting Policies”).

 

(c)           To the Knowledge of
Parent, no significant deficiencies or material weaknesses exist in the design
or operation of (i) disclosure controls and procedures (as defined in
Rule 13a-15(e) of the Exchange Act) to ensure that material information
relating to the Companies, including the Subsidiaries, is made known to the
management of the Companies by others within those entities, or
(ii) internal controls over financial reporting (as defined in
Rule 13a-15(f) of the Exchange Act), that would materially adversely affect
the Companies’ ability to record, process, summarize and report financial data.

 

(d)           As of the date hereof,
none of the Companies or Subsidiaries has any outstanding Indebtedness, other
than Indebtedness that will be discharged, terminated or cancelled pursuant to
Section 6.12.

 

26

 

(e)           The Companies and
Subsidiaries have not made, and as of the Closing Date will not have made, any
dividends or distributions that reduce the distributable reserves (or
equivalent items under local applicable Law) of any Company or Subsidiary to a
negative amount or in violation of applicable Law.

 

4.6           No
Material Adverse Change. Since June 30, 2005 there has not been any
Business Material Adverse Effect.

 

4.7           Tax
Matters.

 

(a)           All material federal,
state, regional, provincial, local and foreign Tax Returns required to be filed
by or with respect to any of the Companies or Subsidiaries have been timely
filed and are complete and correct in all material respects. Since July 1,
2002, no claim has been made in writing by a taxing authority in a jurisdiction
where any Company or any Subsidiary does not file material Tax Returns that it
is or may be subject to taxation by that jurisdiction.

 

(b)           Each Company and each
Subsidiary has timely paid all material Taxes it is required to pay and has
withheld with respect to its employees and other third parties such amounts as
are required to be withheld (and timely paid over any withheld amounts to the
appropriate taxing authority). There is no material claim, audit, action, suit,
proceeding or investigation now pending or threatened in writing against or
with respect to any of the Companies or Subsidiaries in respect of any Tax.

 

(c)           None of the Companies
or Subsidiaries that is organized in the United States or any political
subdivision thereof or therein, and, to the Knowledge of Parent, none of the
other Companies or Subsidiaries, is delinquent in the payment of any material
Tax or has requested any extension of time within which to file any material
Tax Return and has not yet filed such Return, nor has any Company or Subsidiary
that is organized in the United States or any potential subdivision thereof or
therein, or, to the Knowledge of Parent any other Company or Subsidiary, (or
any member of any affiliated, consolidated, combined or unitary group of which
such entity is a member) granted any extension or waiver of the statute of
limitations period applicable to any material Return, which period (after
giving effect to such extension or waiver) has not yet expired.

 

(d)           No Company or
Subsidiary is or has been, to the Knowledge of Parent, (i) a party to any “listed
transaction” within the meaning of Treasury Regulations Section 1.6011-4
or any substantially similar transaction thereto, (ii) a distributing or
controlled corporation in a transaction purported to be subject to
Section 355 of the Code or (iii) subject to the dual consolidated
loss provisions of Section 1503(d) of the Code.

 

(e)           Section 4.7(e) of
the Seller Disclosure Schedule contains a list of all closing agreements
and other analogous agreements entered into by any Company or Subsidiary that
is organized in the United States or any political subdivision thereof or
therein, and, to the Knowledge of Parent, any other Company or Subsidiary (or 

 

27

 

any Affiliate
thereof if such agreement would affect any Company or Subsidiary), with a
taxing authority since the later of (i) July 1, 2002 and (ii) the date on
which any such Company, Subsidiary or Affiliate was acquired by Parent or its
Affiliate.

 

(f)            Section 4.7(f) of
the Seller Disclosure Schedule contains a list of (i) all affiliated,
consolidated, combined or unitary groups of which any of the Companies or
Subsidiaries that is organized in the United States or any political
subdivision thereof or therein has been a member other than as common parent
since the later of (A) July 1, 2002 and (B) the date on which any such
Company, Subsidiary or Affiliate was acquired by Parent or its Affiliate and
(ii) such groups of which any other Company or Subsidiary has been a member
other than as common parent since the later of (A) July 1, 2002 and (B)
the date on which any such Company, Subsidiary or Affiliate was acquired by
Parent or its Affiliate, to the Knowledge of Parent.

 

(g)           ADP Canada is
registered for goods and services tax purposes under Part IX of the Excise Tax
Act (Canada) and its GST registration number is 100057413RT0003. ADP Canada is
registered for Quebec sales tax purposes pursuant to the Act respecting the
Quebec sales tax and its QST registration number is 1002571460TQ0004.

 

(h)           ADP Canada is not a
non-resident of Canada for purposes of section 116 of the Income Tax Act
(Canada).

 

4.8           Compliance
with Laws. Since July 1, 2002, the Business has been in compliance
with all applicable Orders and Laws, except as would not have a Business
Material Adverse Effect. This Section 4.8 does not relate to matters with
respect to Taxes, which are the subject of Section 4.7, environmental
matters, which are the subject of Section 4.10 or matters with respect to
employees, employee benefits and labor matters, which are the subject of
Sections 4.17 and 4.18.

 

4.9           Permits.
The Business has all licenses, franchises, permits and authorizations of any
Governmental Bodies as are necessary for the lawful conduct of the Business
(collectively, “Permits”),
except where the failure to have such Permits would not have a Business
Material Adverse Effect. All Permits are in full force and effect, except as
would not have a Business Material Adverse Effect, and neither any Company nor
any Subsidiary has received written notice from any Governmental Body asserting
that such Company or Subsidiary is not in material compliance with any material
Permit or threatening in writing to suspend, revoke, revise, limit or terminate
any Permit held by such Company or Subsidiary.

 

4.10         Environmental
Compliance. The Business is and, since July 1, 2002 has been, in
compliance with all applicable Laws, codes or ordinances relating to pollution,
protection of the environment or the exposure of persons to hazardous or toxic
substances, wastes, pollutants or contaminants, petroleum or radiation
(collectively, “Environmental Laws”),
except as would not have a Business Material Adverse Effect. None of the
Companies or Subsidiaries has received any written notice of any material
violation or alleged material violation, or any material liability under, any
Environmental 

 

28

 

Law in connection with or affecting the Business since July 1,
2002 that have not been fully resolved. There are no material Orders
outstanding, or any Litigation pending or, to the Knowledge of Parent,
threatened, relating to compliance with, or liability under, any Environmental
Law in connection with or affecting the Business. None of the Companies or the
Subsidiaries has assumed, contractually or by operation of law, any material
liabilities under any Environmental Laws. To the Knowledge of Parent
(i) none of the Companies or Subsidiaries has manufactured, treated,
stored, disposed of, transported, handled or released, or caused or permitted
persons to be exposed to, any hazardous or toxic substances, wastes, pollutants
or contaminants, petroleum or radiation in a manner that has given rise to
material liabilities for fines, penalties or injury or damages to persons,
property, natural resources or the environment under Environmental Laws; and
(ii) there are no hazardous or toxic substances, wastes, petroleum,
pollutants or contaminants present at any facility or property currently or formerly
owned, leased or operated by any of the Companies or Subsidiaries that have
given rise to material liabilities of the Companies or Subsidiaries for fines,
penalties or injury or damages to persons, property, natural resources or the
environment under Environmental Laws.

 

4.11         Enforceability
and Non-Contravention.

 

(a)           Each Transaction
Document to which each Foreign Asset Seller is a party will, when executed and
delivered on the Closing Date, constitute, the legal, valid and binding
obligation of such Foreign Asset Seller, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar Laws, Laws of general applicability relating to or
affecting creditors’ rights, and to general equity principles.

 

(b)           The execution and
delivery by each Seller of each Transaction Document to which it is a party,
the consummation of the transactions contemplated hereby, and the performance
by such Seller of each such Transaction Document in accordance with its terms
will not:

 

(i)            violate the
certificate of incorporation, bylaws or other organizational documents of any
of the Companies or Subsidiaries;

 

(ii)           require any of the
Companies to obtain any consents, approvals, authorizations or actions of, or
make any filings with or give any notices to, any Governmental Bodies or any
other Person, except (x) for the notification requirements of the HSR Act
and any applicable Foreign Antitrust Laws or (y) as set forth in
Section 4.11(b)(ii) of the Seller Disclosure Schedule (collectively,
the “Company Consents and Notices”); or

 

(iii)          if the Company Consents
and Notices are obtained or made, violate or result in the breach of any of the
material terms and conditions of, cause the modification or termination of or give
any other contracting party the right to modify or terminate, accelerate or
give rise to any obligations under or constitute (or with notice or lapse of
time, or both, constitute) a material default 

 

29

 

under, any Material Contract, Lease or Affiliate
Contract or result in the creation of any Lien (other than Permitted Liens)
upon any of the assets of the Business; or

 

(iv)          if the Company Consents
and Notices are obtained and made, violate or result in the breach of any
applicable Orders or any applicable Laws of any Governmental Bodies;

 

except,
in the case of clause (ii) above, for any consent, approval,
authorization, action, filing or notice the failure to so obtain or make would
not have a Business Material Adverse Effect and except, in the case of
clauses (iii) and (iv) above, for any violation, breach, modification,
termination, right to modify or terminate, acceleration, obligation, default,
acceleration or creation of any Lien that would not have a Business Material
Adverse Effect.

 

4.12         Contracts.

 

(a)           Section 4.12 of
the Seller Disclosure Schedule sets forth a list of third party Contracts
used in the Business, to which any of the Companies or Subsidiaries is a party
and which fall within any of the following categories (collectively, the “Material Contracts”):

 

(i)            any Contract that
involves aggregate payments or other consideration in excess of $1,000,000 per
year;

 

(ii)           any Contract relating
to the employment or termination of any individual on a full time, part-time,
consulting or other basis providing annual cash compensation in excess of
$500,000;

 

(iii)          (A) any Contract that
imposes restrictions on dividends, distributions or loans by the Company or
Subsidiary that is a party thereto or that requires the retention of assets,
reserves, earnings or capital, (B) all material Contracts, indentures or
instruments relating to Indebtedness or to placing a Lien (other than any
Permitted Lien) on any of its or their assets and (C) all guaranties, bonds,
letters of credit, letters of comfort and other indemnity obligations related
to the Business which are obligations of any Seller or any Affiliate of any
Seller (other than any Transferred Company or any Subsidiary) (clause (C)
collectively, the “Guaranties”);

 

(iv)          any Contract that
purports to materially limit the right of any Company or any Subsidiary to
engage or compete in any line of business or to compete with any Person or
operate in any location; and

 

(v)           any Contract with
respect to the formation, financing, ownership, control, operation or
management of any Person that is not directly or indirectly wholly owned by
Parent.

 

(b)           (i) Each of the
Material Contracts is legal, valid, binding, and in full force and effect
against such Company or Subsidiary, as applicable, and the 

 

30

 

other party
thereto, and enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar Laws,
Laws of general applicability relating to or affecting creditors’ rights, and
to general equity principles; (ii) no Company or Subsidiary is in breach
or default in any material respect with respect to any Material Contract to
which it is a party; (iii) to the Knowledge of Parent, no other party to
any Material Contract is in breach or default in any material respect with
respect to such Material Contract; and (iv) to the Knowledge of Parent, no
event has occurred which with notice or lapse of time would constitute a breach
or default in any material respect under any such Material Contract. Parent has
made available to the Buyer true and complete copies of all Material Contracts
and Affiliate Contracts, in each case together with all amendments, waivers or
other changes thereto.

 

4.13         Property.

 

(a)           After giving effect to
the Reorganization, each of the Companies and Subsidiaries will have good
title, free and clear of all Liens, to all of the owned properties and assets
used in the Business, whether tangible or intangible (other than Intellectual
Property), other than Permitted
Liens.

 

(b)           Section 4.13(b) of
the Seller Disclosure Schedule sets forth the address of any land,
buildings, improvements or other interests in real property that any of the
Companies or Subsidiaries leases, subleases or otherwise (whether pursuant to
written, oral or otherwise unwritten Leases) has the right to use or occupy
(each a “Leased Real Property”),
and all leases, subleases and other agreements under which any of the Companies
or Subsidiaries holds any Leased Real Property, including all amendments,
extensions, renewals, guaranties and other agreements relating to such leases,
subleases and agreements (collectively, the “Leases”), have been made available to the Buyer. All
Leases are legal, valid, in full force and effect, and binding on, such Company
or Subsidiary and, to the Knowledge of Parent, the other parties thereto, and
neither such Company or Subsidiary nor, to the Knowledge of Parent, any other
party thereto, is in default thereunder, nor has any event occurred that, with
notice or lapse of time, would constitute a default by any Company or
Subsidiary, except where any such default or any failure to be valid, in full
force and effect, and binding would not have a Business Material Adverse Effect.
None of the Companies or Subsidiaries has (i) subleased, licensed or
otherwise granted to any Person any right to the possession, use, occupancy or
enjoyment of the Leased Real Property or the Owned Real Property, or any
portion thereof or (ii) collaterally assigned or granted any other
security interests in any Lease. There are no Liens on the estate or interest
created by each Lease, other than Permitted Liens.

 

(c)           Section 4.13(c) of
the Seller Disclosure Schedule sets forth the address, and the name of the
owner of, any real property that any of the Companies or Subsidiaries owns (the
“Owned Real Property”). Such Company
or Subsidiary (i) is the legal owner of such property, (ii) has good
and marketable title to such property and (iii) would be beneficially
entitled to all proceeds from the sale of such property. None of the Companies
or Subsidiaries owns any real property except for the Owned Real Property.

 

31

 

4.14         Intellectual
Property.

 

(a)           Section 4.14(a) of the Seller Disclosure Schedule sets forth a list of
all patented or registered Intellectual Property and applications for
registration of Intellectual Property that is (i) owned by a Transferred
Company or Subsidiary or (ii) included in the Foreign Assets, in each case as
of the date hereof. After giving effect to the Reorganization and the
transactions to occur at the Closing hereunder, each of the Transferred
Companies and Subsidiaries and the Buyer (A) will own, free and clear of all
Liens, other than Permitted Liens, all right, title and interest to the items
set forth in Schedule 4.14(a) and to the Transferred Company’s or Subsidiaries’
and Foreign Asset Sellers’ material proprietary software used in conjunction
with the Business and (B) will own, free and clear of all Liens, other than
Permitted Liens, or have the right to use all Intellectual Property used in the
operation of the Business as presently conducted and on terms and conditions
substantially similar to those under which they owned or used such Intellectual
Property immediately prior to the Reorganization and the Closing (collectively,
the “Company Intellectual Property”),
except as would not have Business Material Adverse Effect. To the Knowledge of
Parent, neither the Transferred Companies and the Subsidiaries nor the Buyer
will require the use of the Intellectual Property of any Seller or its
Affiliates after Closing directly to provide the current products and services
of the Business to customers, except for the Intellectual Property to be
provided pursuant to the Transition Services Agreement.

 

(b)           To the Knowledge of Parent, all of the owned Company Intellectual
Property is valid and enforceable. None of the Companies or Subsidiaries has
been, since July 1, 2003, a party to any claim nor is any claim threatened in
writing, that challenges the validity or enforceability of any such Company’s
or Subsidiary’s ownership or right to use (after giving effect to the
Reorganization), any Company Intellectual Property, except as would not have a
Business Material Adverse Effect.

 

(c)           Except as would not have a Business Material Adverse Effect, (i) none
of the Companies or Subsidiaries has infringed or misappropriated, and the
operation of the Business as currently conducted does not infringe or
misappropriate, any Intellectual Property, excluding patents, of any third
party, (ii) to the Knowledge of Parent, none of the Companies or Subsidiaries
has infringed or misappropriated, and the operation of the Business as currently
conducted does not infringe or misappropriate, any patents of any third party,
and (iii) none of the Companies or Subsidiaries has, since July 1, 2003,
received any notices regarding any of the foregoing (including any offers to
license any Intellectual Property from any third party).

 

(d)           All Employees who have participated in the creation or development of
any Intellectual Property since January 1, 2001 included in the owned Company
Intellectual Property, including the Company Intellectual Property set forth in
Section 4.14(a) of the Seller Disclosure Schedule, have executed and delivered
to the Company an agreement (i) providing for the non disclosure by such Person
of any confidential information of any of the Companies or Subsidiaries and
(ii) providing for the assignment by such Person to any of the Companies or
Subsidiaries of any Intellectual Property arising directly out of such Person’s
employment by the Companies 

 

32

 

or Subsidiaries, to the extent permitted by Law. All consultants or
contractors who have participated in the creation or development of any
Intellectual Property since January 1, 2001 included in the owned Company
Intellectual Property, including the Company Intellectual Property set forth in
Section 4.14(a) of the Seller Disclosure Schedule, have executed and delivered
to the Company an agreement (i) providing for the non disclosure by such Person
of any confidential information of any of the Companies or Subsidiaries and
(ii) providing for the license grant or assignment by such Person to any of the
Companies or Subsidiaries of any Intellectual Property arising out of such
Person’s engagement by or contract with any of the Companies or Subsidiaries.

 

(e)           To the Knowledge of Parent, no third party has infringed or
misappropriated any of the Company Intellectual Property. Each of the Companies
and Subsidiaries has taken reasonable steps under the circumstances to maintain
and protect all of the Company Intellectual Property so as not to have a
Business Material Adverse Effect.

 

(f)            The material software included in the owned
Company Intellectual Property that is licensed by the Companies and
Subsidiaries to any third party is not subject to any “copyleft” or other
obligation or condition (including any obligation or condition under any “open
source” license such as the GNU Public License, Lesser GNU Public License or
Mozilla Public License) that (i) requires or conditions the use or distribution
of such software on the disclosure, licensing, or distribution of any source
code for any portion of such software or (ii) otherwise imposes any limitation,
restriction, or condition on the right or ability of each of the Companies or
Subsidiaries to use, license or distribute any software in the ordinary course
of business, as currently conducted.

 

(g)           Except as would not have a Business Material Adverse Effect, (i) each
Contract pursuant to which any of the Companies or Subsidiaries is a licensor
of Intellectual Property or a licensee of Intellectual Property (other than
commercially available “off the shelf” software) (“IP Contract”) is legal, valid, binding,
and in full force and effect against such Company or Subsidiary, as applicable,
and the other party thereto, and enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar Laws, Laws of general applicability relating to or
affecting creditors’ rights, and to general equity principles; (ii) no Company
or Subsidiary is in breach or default in any material respect with respect to
any such IP Contract; (iii) to the Knowledge of Parent, no other party to any
such IP Contract is in breach or default in any material respect with respect
to such IP Contract; and (iv) to the Knowledge of Parent, no event has occurred
which with notice or lapse of time would constitute a breach or default in any
material respect under any IP Contract.

 

(h)           To the Knowledge of Parent, (i) no source code for any software owned
by any of the Companies or Subsidiaries has been delivered, licensed or made
available to any escrow agent or other person who is not, as of the date of
this Agreement, an employee, agent or consultant of theirs, (ii) none of the
Companies or Subsidiaries has any duty or obligation to deliver, license or
make available the source 

 

33

 

code for any such software to any escrow agent or other person who is
not, as of the date of this Agreement, an employee, agent or consultant of theirs,
and (iii) no event has occurred, and no circumstance or condition exists, that
(with or without notice or lapse of time) will, or could reasonably be expected
to, result in the delivery, license, or disclosure of the source code for any
such software to any other person who is not, as of the date of this Agreement,
an employee, agent or consultant of theirs.

 

(i)            The computer systems, including the software,
hardware and networks currently used by the Companies and Subsidiaries in the
operation of the Business are materially sufficient for the needs of the
Business solely as conducted on the date hereof. Except as would not have a
Business Material Adverse Effect, Parent and the Transferred Companies and
Subsidiaries have taken commercially reasonable actions to protect the
confidentiality, integrity and security of the Transferred Companies’ and
Subsidiaries’ software, databases, systems, networks and Internet sites and all
information stored or contained therein from any unauthorized use, access or modification
by third parties.

 

4.15         Litigation.
There are no actions, suits, arbitrations, proceedings or investigations
(collectively, “Litigation”)
pending or, to the Knowledge of Parent, threatened against any of the
Companies, Subsidiaries or assets of the Business that if adversely determined
would have a Business Material Adverse Effect. None of the Companies,
Subsidiaries or assets of the Business is subject to any (i) outstanding
Orders under any antitrust Law or (ii) other outstanding Order that would
have a Business Material Adverse Effect.

 

4.16         Brokers.
Except for Lehman Brothers Inc., whose fees will be paid by Parent, none of the
Sellers or any of the Transferred Companies or Subsidiaries has paid or agreed
to pay, or received any claim with respect to, any brokerage commissions,
finders’ fees or similar compensation in connection with the transactions
contemplated hereby.

 

4.17         Employee
Benefit Plans.

 

(a)           All employee benefit
plans (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 (“ERISA”))
and all other plans, programs and policies which provide compensation or
benefits to Employees, Former Employees or directors or independent contractors
providing or who provided services to the Business or with respect to which any
Company or Subsidiary or the Business has any material liability, whether
contingent or otherwise (collectively, the “Company
Benefit Plans”), are identified in Section 4.17(a) of the
Seller Disclosure Schedule by the name shown on their plan documents, and
there are no Company Benefit Plans other than the Company Benefit Plans
identified in Section 4.17(a) of the Seller Disclosure Schedule. For each
Company Benefit Plan, copies of any ERISA required summary plan description and
any Form 5500 filed for 2004 (together with all related schedules,
exhibits and attachments) have previously been made available to the Buyer. No
Company Benefit Plan is subject to Title IV of ERISA or Code
Section 412. Each Company Benefit Plan has been maintained, funded and
administered in all material 

 

34

 

respects in
accordance with its terms and complies by its terms and in its operation with
all the applicable requirements of ERISA, the Code and other applicable Law. No
Company Benefit Plan is under audit or investigation by any Governmental Body
and, to the Knowledge of Parent, no such audit or investigation is pending or
threatened. Each Company Benefit Plan intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter
from the IRS and, to the Knowledge of Parent, there are no facts or
circumstances that could reasonably be expected to adversely affect the
qualification of any such Company Benefit Plan. None of the Companies, Subsidiaries
or any ERISA Affiliate has any liability, contingent or otherwise, under or
relating to any benefit plan that is or was subject to Title IV of ERISA
or Section 412 of the Code or is or was described in Section 413 of
the Code or Section 3(37) or Section 3(40) of ERISA. None of any
Company Benefit Plan or any fiduciary thereof or any Company, Subsidiary or
ERISA Affiliate has any liability under Chapter 43 of the Code or
Section 409 or Section 502(i) of ERISA which has not been
satisfied in full or, to the Knowledge of Parent, has engaged in any
transaction that would reasonably be expected to result in any such liability. All
contributions or premium payments which are called for under the terms of any
Company Benefit Plan or ERISA or the Code or other applicable Law have been
made in full on or before the deadline for making such contributions. There is
no Litigation against or otherwise involving any of the Company Benefit Plans
and no Litigation (excluding claims for benefits incurred in the ordinary
course of Company Benefit Plan activities) has been brought against or with
respect to any such Company Benefit Plan and, to the Knowledge of Parent, no
such Litigation is pending or threatened. Except as required by Part 6 of
Subtitle B of Title I of ERISA, Section 4980B of the Code or
similar state Law (“COBRA”),
none of the Companies or Subsidiaries has any liability, contingent or
otherwise, under any Company Benefit Plan to provide medical or other welfare
or welfare-type benefits to any Employee, Former Employee or director or
independent contractor providing services to the Business upon his or her
retirement or termination of employment or service, and none of the Companies
or Subsidiaries has ever agreed (whether in oral or written form) to provide
any such benefits to any such Employee, Former Employee, director or
independent contractor. The Companies, Subsidiaries and ERISA Affiliates have
complied and are in compliance with the requirements of COBRA. None of Parent,
the Companies or Subsidiaries is liable to indemnify any Employee or Former
Employee or any current or former non-employee officer or director for an
accelerated or additional tax under Section 409A of the Code. “ERISA Affiliate” means any Person
that is or at any relevant time within the last six years was treated as a
single employer with any Company or Subsidiary under Sections 414(b), (c),
(m) or (o) of the Code or Section 4001(a)(14) of ERISA.

 

(b)           Each Employee who, on
the basis of applicable regulations, if any, is entitled to participate in the
Company Benefit Plans, is participating in the Company Benefit Plans in
accordance with applicable pension regulations. There is not now nor has there
ever been any statutory obligation to participate in any branch industry or
otherwise obligatory pension fund in respect of any Employee or Former
Employee.

 

(c)           The amendments made on
January 1, 2005 to the pension schemes of the Transferred Companies and
the Subsidiaries in each case, organized under 

 

35

 

the laws of the
Netherlands, and which are currently in existence, have been individually
consented to by each employee of such Dutch Transferred Companies and such
Subsidiaries as well as by their spouses and their partners.

 

(d)           There is no contract,
agreement, plan or arrangement to which any Company or Subsidiary is a party,
including the provisions of this Agreement, covering any employee or former
employee of any Company or Subsidiary or other person, which, individually or
collectively, could give rise to the payment of any amount that would not be
deductible pursuant to Sections 280G, 404 or 162(m) of the Code or other
applicable Tax Law due to the consummation of the transactions contemplated
hereby.

 

4.18         Labor
and Employment Matters.

 

(a)           None of the Companies
or Subsidiaries is a party to, or bound by, any collective bargaining agreement
or other contracts, arrangements, agreements or understandings with a labor
union, works council or similar labor organization or required pursuant to any
applicable Law with respect to any Employee or Former Employee. There is no
existing, pending or, to the Knowledge of Parent, threatened (i) unfair
labor practice charge or complaint, labor dispute, labor arbitration proceeding
or any other matter against or involving any of the Companies or Subsidiaries
with respect to any Employee or Former Employee, (ii) activity or
proceeding by a labor union or representative thereof to organize any
Employees, (iii) certification or decertification question relating to
collective bargaining units at the premises of any of the Companies or
Subsidiaries with respect to any Employee or Former Employee or
(iv) lockout, strike, organized slowdown, work stoppage or work
interruption with respect to the Employees.

 

(b)           Since July 1,
2002, none of the Companies or Subsidiaries has experienced any labor strike,
work slowdown or stoppage or other material labor dispute and there is no such
strike, slowdown, stoppage, or dispute actually pending with respect to any Employee
or, to the Knowledge of Parent, threatened against or affecting any Employee.

 

(c)           There are no
investigations, administrative proceedings, charges or formal complaints of
discrimination (including discrimination based upon sex, age, marital status, race,
national origin, sexual orientation, disability, handicap, veteran status or
other protected category) pending or threatened before the Equal Employment
Opportunity Commission or any Governmental Body against any of the Companies or
Subsidiaries or involving any Employee or Former Employee that involve
allegations of disparate impact, pattern or practice or class-wide
discrimination.

 

(d)           None of the employees
identified by name in Section 6.13 of the Seller Disclosure
Schedule has given written notice of termination of his or her employment.

 

36

 

(e)           With respect to the ABZ
Entities and the Audatex Entities, there are no material liabilities which are
not funded (or not reflected in the Company Financial Statements) in respect of
the statutory pension schemes and social securities schemes applicable to each
of the Companies and/or the Subsidiaries.

 

(f)            Since July 1, 2002, the appropriate
Companies and Subsidiaries have in all material respects prepared, maintained,
timely filed with and reported to the appropriate Governmental Bodies all
information, records and statements concerning their officers and employees
required by applicable Law.

 

(g)           Since July 1, 2002, the
Companies and Subsidiaries have complied in all material respects with all
applicable Laws with respect to employment, labor and social security and with
all applicable collective bargaining agreements, social plans, shop agreements,
works agreements and similar agreements.

 

4.19         Insurance.
Section 4.19 of the Seller Disclosure Schedule sets forth a list of
all insurance policies covering the Business. The Sellers and the Companies and
Subsidiaries, as the case may be, collectively maintain, and have maintained
without interruption, policies or binders of insurance covering risks and
events and in amounts adequate for the Business and customary in the industry
in which the Business operates. The reserves set forth in the latest Company
Financial Statements are adequate to cover all anticipated liabilities with
respect to workers’ compensation and third party automotive and general
liability claims.

 

4.20         Assets.

 

(a)           Each Foreign Asset
Seller has good and marketable title to, or a valid leasehold on or a valid
right to use, all of its respective Foreign Assets, in each case free and clear
of all Liens (other than Permitted Liens) and the Asset Transfer Agreement to
which such Foreign Asset Seller will be a party or the deeds, endorsements,
assignments and other instruments to be executed and delivered at the Closing
related thereto will effectively convey to and vest in the Buyer good and
marketable title to, and ownership of, such Foreign Asset Seller’s respective
Foreign Assets free and clear of all Liens (other than Permitted Liens).

 

(b)           The assets that are
owned by or leased or licensed to the Transferred Companies (including the
Czech Business Assets), the Foreign Assets, the assets used by the providers of
services to be provided pursuant to the Transition Services Agreement and the
assets to be provided to the Buyer pursuant to the Parent Shared Facilities
Agreement collectively constitute all of the assets, tangible and intangible,
necessary to operate the Business in the manner presently operated, except as
would not have a Business Material Adverse Effect.

 

4.21         Absence
of Undisclosed Liabilities. There are no liabilities or obligations
(whether accrued, absolute, contingent, unliquidated or otherwise, whether due
or to become due and regardless of when asserted) of the Business, other than
any such liabilities (a) reflected in the Company Financial Statements,
(b) that were incurred 

 

37

 

in the ordinary course of business since December 31, 2005 (none
of which is a liability for breach of contract, breach of warranty, tort or
infringement or a claim or lawsuit or an environmental liability), (c) for
future performance obligations arising in the ordinary course of business under
Contracts that are disclosed in the Seller Disclosure Schedules or that
are not required to be disclosed pursuant to this Article IV or
(d) that would not have a Business Material Adverse Effect.

 

4.22         Affiliate
Transactions. No Insider is a party to any material Contract or transaction
(other than employment, severance or benefit arrangements or plans disclosed
pursuant to Sections 4.12 or 4.17) with any Company or any Subsidiary or
which is pertaining to the Business or, to the Knowledge of Parent, has any
interest in any property, real or personal or mixed, tangible or intangible,
used in or pertaining to the Business (any such Contract or transaction, an “Affiliate Contract”). Except for the
Retained Marks and the services, IT assets and Intellectual Property to be
provided pursuant to the Transition Services Agreement and the Parent Shared
Facilities Agreement and the other services, IT assets and Intellectual
Property described in Section 4.22 of the Seller Disclosure Schedule,
there are no material services, IT assets or Intellectual Property provided to
or on behalf of the Business by any of Parent or its Affiliates (other than the
Companies and the Subsidiaries).

 

4.23         Customers.
Since June 30, 2005, to the Knowledge of Parent, none of the Sellers, any
Company or any Subsidiary has received any notice from any of the top 10
customers of the Business, based on revenue generated during the 12 months
ended December 31, 2005, to the effect that such customer intends to
substantially reduce its use of products and services of the Business currently
used by it or otherwise materially and adversely change its relationship with
respect to the Business.

 

4.24         Product
Warranty. No product sold or licensed by any Company or any Subsidiary is
subject to any guaranty, warranty or other indemnity beyond the applicable
standard guaranty or warranty provided for in the sale or license of such
product, except for any such guaranty, warranty or other indemnity that would
not have a Business Material Adverse Effect.

 

4.25         Exclusivity
of Representations. The representations and warranties made by the Sellers
in this Agreement are in lieu of and are exclusive of all other representations
and warranties, including any implied warranties. The Sellers hereby disclaim
any such other or implied representations or warranties, notwithstanding the
delivery or disclosure to the Buyer or its officers, directors, employees,
agents or representatives of any documentation or other information (including
any pro forma financial information, supplemental data or financial projections
or other forward-looking statements).

 

38

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYER

 

Except as otherwise set forth in the Disclosure
Schedule which is being delivered by the Buyer to Parent concurrently
herewith (the “Buyer Disclosure Schedule”),
the Buyer represents and warrants to the Sellers as follows:

 

5.1           Organization
and Authority.

 

(a)           The Buyer is a
corporation duly incorporated, validly existing and in good standing under the
Laws of its state of incorporation, and has all requisite corporate power and
authority and has taken all corporate action required to execute and deliver
each Transaction Document to which it is a party and to perform its obligations
hereunder and thereunder. The Buyer has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to have such power and
authority could not be expected to materially impair or delay the ability of
the Buyer to consummate the transactions contemplated hereby.

 

(b)           The certificate of
incorporation and bylaws of the Buyer, copies of which have previously been
made available to Parent, are true and correct copies of such documents as in
effect as of the date hereof.

 

5.2           Enforceability
and Non-Contravention.

 

(a)           This Agreement has
been, and each other Transaction Document will, when executed and delivered on
the Closing Date, be, duly executed and delivered by the Buyer, and assuming
due execution and delivery hereof and thereof by any Seller which is a party
thereto, each Transaction Document will constitute the legal, valid and binding
obligation of the Buyer, enforceable against the Buyer in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar Laws, Laws of general applicability relating to or
affecting creditors’ rights, and to general equity principles.

 

(b)           The execution and
delivery by the Buyer of each Transaction Document, the consummation of the
transactions contemplated hereby, and the performance by the Buyer of each
Transaction Document in accordance with its terms, have been duly authorized by
the Buyer and will not:

 

(i)            violate the
certificate of incorporation, bylaws or other organizational documents of the
Buyer;

 

(ii)           require the Buyer to
obtain any material consents, approvals, authorizations or actions of, or make
any filings with or give any notices to, any Governmental Bodies or any other
Person, except for the notification requirements of the HSR Act and any
applicable Foreign Antitrust Laws, or as set forth in Section 5.2(b) of
the Buyer Disclosure Schedule (the 

 

39

 

“Buyer Consents and Notices”
and, together with the Seller Consents and Notices and the Company Consents and
Notices, the “Required Consents and Notices”);
or

 

(iii)          if the Buyer Consents
and Notices are obtained or made, violate or result in the breach of any of the
material terms and conditions of, cause the modification or termination of or
give any other contracting party the right to modify or terminate, accelerate
or give rise to any obligations under or constitute (or with notice or lapse of
time, or both, constitute) a material default under, any material Contract to
which the Buyer is a party or by or to which the Buyer or any of its assets is
or may be bound or subject.

 

5.3           Brokers.
Except for fees and commissions that will be paid by the Buyer, no Person
retained by or on behalf of the Buyer or any of its Affiliates is entitled to
any brokerage commissions, finders’ fees or similar compensation in connection
with the transactions contemplated hereby.

 

5.4           Purchase
for Investment. The Buyer is purchasing the Hollander Shares, the
CSG Shares and the IMS Shares for its own account for investment and
not for resale or distribution in any transaction that would be in violation of
the securities Laws of the United States or any state thereof. The Buyer is an “accredited
investor” as defined in Rule 501 of Regulation D promulgated under
the Securities Act of 1933.

 

5.5           Financial
Ability. The Buyer has delivered to Parent true and correct copies of
(a) an executed commitment letter to the Buyer (the “Equity
Funding Letter”) from GTCR Fund VIII, L.P., a Delaware limited
partnership (the “Equity Fund”),
to provide equity financing in an aggregate amount of $220,000,000 (the “Equity Funding”), and (b) an
executed commitment letter to the Buyer (the “Commitment
Letter”) from Goldman
Sachs Credit Partners L.P. and Citigroup Global Markets Inc. (the “Lenders”) pursuant to which the
Lenders have committed to provide the Buyer with financing in an aggregate
amount of $795,000,000 (the “Debt Financing”
and, together with the Equity Funding, the “Financing”).
The Equity Funding Letter is a legal, valid and binding obligation of the
parties thereto and is in full force and effect. The Commitment Letter is a
legal, valid and binding obligation of the Buyer, and to the Knowledge of the
Buyer, the other parties thereto, and is in full force and effect. Except as
specifically set forth in the Equity Funding Letter and the Commitment Letter,
(i) there are no conditions precedent to the obligations of (A) the
Equity Fund to fund the Equity Financing and (B) the Lenders to fund the
Debt Financing and (ii) there are no contingencies pursuant to any
contract, agreement or understanding relating to the Transaction to which the
Buyer or any of its Affiliates is a party that would permit any of the Equity
Fund or the Lenders to reduce the total amount of the Financing or impose any
additional condition precedent to the availability of the Financing. The Buyer
has fully paid any and all commitment fees and other fees required by the
Commitment Letter to be paid as of the date hereof. The Buyer shall have at the
Closing proceeds in connection with the Financing in an amount equal to up to
$1,015,000,000, which will provide the Buyer with acquisition financing at the
Closing sufficient to consummate the Transaction 

 

40

 

upon the terms contemplated by this Agreement and to pay all expenses
in connection with the Transaction and the transactions contemplated thereby.

 

5.6           Solvency.
On and as of the Closing Date, and after giving effect to the transactions
contemplated hereby and the Financing, assuming that the representation and
warranty contained in Section 4.5(d) is true and correct in all material
respects, the Buyer, the Transferred Companies and the Subsidiaries, taken as a
whole, will be Solvent.

 

5.7           Independent
Investigation. The Buyer hereby acknowledges and affirms that it has
conducted and completed its own investigation, analysis and evaluation of the
Companies, the Subsidiaries and the Business, that it has made reviews and
inspections of the financial condition, business, results of operations,
properties, assets and prospects of the Companies, the Subsidiaries and the
Business, that it has had the opportunity to request information it has deemed
relevant to the foregoing from Parent and that in making its decision to enter
into each Transaction Document to which it is a party, and to consummate the
transactions contemplated hereby, it has relied on (i) its own
investigation, analysis and evaluation of the Companies, the Subsidiaries and the
Business and (ii) the representations, warranties and covenants of the
Sellers contained in this Agreement.

 

5.8           Compliance
with Laws. None of the Buyer or any of its Affiliates is in violation of
any Orders, or any Laws, of any Governmental Bodies, which violations would
have a material adverse effect on the Buyer or would be reasonably likely to
prevent the transactions contemplated hereby from being consummated.

 

5.9           Permits.
The Buyer has all licenses, franchises, permits and authorizations of any Governmental
Bodies as are necessary for the lawful conduct of its business (collectively,
the “Buyer Permits”), except where the
failure to have such Buyer Permits would not have a material adverse effect on
the Buyer or would not be reasonably likely to prevent the transactions
contemplated hereby from being consummated.

 

5.10         Litigation.
As of the date hereof, there is no Litigation pending or, to the Knowledge of
the Buyer, threatened against the Buyer or any of its Affiliates, that would
have a material adverse effect on the Buyer or would be reasonably likely to
prevent the transactions contemplated hereby from being consummated.

 

5.11         Exclusivity
of Representations. The representations and warranties made by the Buyer in
this Agreement are in lieu of and are exclusive of all other representations
and warranties, including any implied warranties.

 

5.12         Certain
Canadian Tax Registrations. The Buyer or its permitted assignee that
purchases, pursuant to the terms of this Agreement, the Foreign Assets located
in Canada will, as of the Closing Date, be registered for goods and services
tax purposes under Part IX of the Excise Tax Act (Canada). The Buyer or its
permitted assignee that purchases, pursuant to the terms of this Agreement, the
Foreign Assets 

 

41

 

located in Canada will, as of the Closing Date, be registered for
Quebec sales tax purposes pursuant to the Act respecting the Quebec sales tax.

 

ARTICLE VI

COVENANTS AND AGREEMENTS

 

6.1           Conduct
of the Business. The Sellers agree that:

 

(a)           Between the date of
hereof and the Closing Date, except as contemplated by this Agreement or
otherwise agreed to in writing by the Buyer (which agrees to respond reasonably
promptly to any request for such agreement and not to unreasonably withhold or
condition such agreement), the Sellers shall, and shall cause each of the
Companies and the Subsidiaries to, operate the Business in the ordinary course
of business consistent with past practice.

 

(b)           Between the date hereof
and the Closing Date, except as contemplated by this Agreement or otherwise
agreed to in writing by the Buyer (which agrees to respond reasonably promptly
to any request for such agreement and not to unreasonably withhold or condition
such agreement), and except as required in connection with the Reorganization
(to the extent undertaken in accordance with Section 6.16 and, if
applicable, Section 2.7), the Sellers shall:

 

(i)            not permit any of the
Transferred Companies or Subsidiaries to amend their organizational documents;

 

(ii)           not permit any of the
Transferred Companies or Subsidiaries to incur any additional Indebtedness that
would not constitute a current liability, except in the ordinary course of
business in accordance with past practice;

 

(iii)          not permit any of the
Transferred Companies or Subsidiaries to make any loans or advances of borrowed
money or capital contributions to, or equity investments in, any other Person,
other than to Subsidiaries and other than the extension of trade credit to
customers and suppliers, in each case in the ordinary course of business
consistent with past practice;

 

(iv)          not permit any of the
Transferred Companies or Subsidiaries to issue, deliver, sell, authorize,
pledge or dispose of any shares of capital stock or any other equity security,
or any class of securities convertible into, or rights, warrants or options to
acquire, any such capital stock or other equity securities;

 

(v)           not permit any of the
Transferred Companies or Subsidiaries to enter into or adopt a plan or
agreement of recapitalization, reorganization, merger or consolidation, or
adopt a plan of complete or partial liquidation or dissolution;

 

42

 

(vi)          not permit any of the
Transferred Companies or Subsidiaries to split, combine or reclassify any
shares of capital stock or any other equity security or redeem, purchase,
acquire or offer to acquire any shares of capital stock or any other equity
security (other than as permitted by Section 6.11);

 

(vii)         not, and shall not permit
any of the Companies or Subsidiaries to, sell, convey, assign, pledge,
transfer, lease, dispose of or encumber (in whole or in part) any assets of the
Business (other than in the ordinary course of business or as permitted by
Section 6.11);

 

(viii)        not, and shall not permit
any of the Companies or Subsidiaries to, change any method of accounting or any
accounting principle, method, estimate or practice used in the Business, except
in the ordinary course of business consistent with past practice or as may be
required by changes in Law occurring after the date hereof;

 

(ix)           not permit any of the
Foreign Companies to make or change any material Tax election or adopt or
change any accounting method with respect to Taxes related to the Business
except as may be required by changes in Law occurring after the date hereof;

 

(x)            not permit any of the
Companies or Subsidiaries to (A) cancel, terminate, renew or materially
and adversely amend any Material Contract that is not with a customer, except in
the ordinary course of business, or (B) cancel, terminate, renew or
materially and adversely amend any Material Contract that is with a customer or
enter into any new Contract with a customer that would be a Material Contract
if such Contract were in effect on the date hereof, whether or not in the
ordinary course of business;

 

(xi)           not, and shall not
permit any of the Companies or Subsidiaries to, cancel or waive any claims or
rights of material value under any Material Contract or settle or comprise any
litigation of the Business for an amount in excess of $1,000,000;

 

(xii)          not, and shall not
permit any of the Companies or Subsidiaries to, (A) adopt, terminate or
amend, except as may be required by this Agreement or applicable Law, or
consistent with past practice, fund or secure any benefit plan or bonus, profit
sharing, deferred compensation, incentive, stock option or stock purchase plan,
program or commitment, paid time off for sickness or other plan, program or
arrangement for the benefit of Employees, Former Employees, consultants or
directors of the Business, (B) loan or advance any money or property to
any present or former officer or director of the Companies or the Subsidiaries
other than travel advances and other customary advances in the ordinary course
of business consistent with past practice, or (C) grant any material
general increase (other than increases required under a Contract, or consistent
with past practice) in the compensation of employees of the Business or any 

 

43

 

increase in the compensation payable or to become
payable to any officer, director or other management level employee of the
Business (other than increases required by any Contract of any Company or any
Subsidiaries in effect on the date hereof);

 

(xiii)         not, and shall not permit
any of the Companies or Subsidiaries to, except as required by Law, take any
action to institute or adopt any new severance or termination pay practices,
plan or program with respect to any employees of the Business, or to increase
in any respect the benefits payable under its severance or termination pay
practices, other than in the ordinary course of business consistent with past
practice, to the extent that the same would be obligations of any Company or
Subsidiary after the Closing, provided, however, that nothing in
this Agreement shall prevent any of the Companies or Subsidiaries from entering
into employment agreements with new employees or severance agreements (other
than officers or directors or other key employees) in the ordinary course of
business consistent with past practice;

 

(xiv)        not permit any of the
Companies or Subsidiaries to enter into, terminate, amend or modify any
collective bargaining agreements affecting the Employees;

 

(xv)         not, and shall not permit
any of the Companies or Subsidiaries to, issue any communication to Employees
with respect to compensation, benefits or employment continuation or
opportunity following the Closing Date, except as required by Law or reasonably
requested by the Buyer;

 

(xvi)        not permit any of the
Companies or Subsidiaries to acquire (by merger, consolidation or acquisition
of equity interest or assets) any Person, business or division;

 

(xvii)       not permit any of the
Transferred Companies or Subsidiaries to (A) modify or amend in any material
and adverse manner any Affiliate Contract or enter into any agreement or
arrangement that would be an Affiliate Contract when entered into or (B) modify
or amend any royalty, intercompany transfer pricing or similar agreement
between or among the Transferred Companies and/or the Subsidiaries, except as
may be required pursuant to the final resolution of the APA (as defined in
Section 10.13) or, to the extent advised by outside legal counsel or other tax
advisor, required by applicable Law;

 

(xviii)      maintain insurance covering
the Business at presently existing levels so long as such insurance is
available on commercially reasonable terms;

 

(xix)         cause the Companies and
Subsidiaries to make capital expenditures at a level at least equal to the
level set forth in the most recent budget approved by the governing body of
such entity; and

 

44

 

(xx)          not enter into any
Contract with respect to any of the matters set forth in Sections 6.1(b)(i)-(xvii) or
any Contract in contravention of the matters set forth in
Sections 6.1(b)(xviii)-(xix).

 

(c)           The Sellers shall cause
Informex S.A. to hold cash or cash equivalents as of the Closing in an amount
at least equal to €13,500,000 (Euros) in its bank accounts (the “Restricted Cash”).

 

6.2           Confidentiality.

 

(a)           The Buyer and Parent
each reaffirm and shall fulfill their respective obligations under the Non-Disclosure
Agreement, effective as of June 8, 2005 (the “Non-Disclosure
Agreement”), between Parent and Solera, Inc. If for any reason,
termination of this Agreement occurs prior to the Closing, the Buyer’s and
Parent’s obligations under the Non-Disclosure Agreement shall continue in full
force and effect. Except as otherwise required by Law or any Order, the Buyer
agrees to maintain the confidentiality of non-public information of  the Sellers beyond the Closing and in
accordance with Section 11.2(b). In the event that, after the Closing,
disclosure is required by applicable Law or any Order, the Buyer shall promptly
notify Parent of any such requirement and Parent shall be permitted to seek
confidential treatment for such information.

 

(b)           Parent shall, and shall
cause its Affiliate to, treat and hold as confidential all information
concerning the Business (the “Confidential
Information”). Notwithstanding the foregoing, the term
Confidential Information shall not include any information that is already or
becomes generally available to the public (through no breach of this
Section 6.2(b) by Parent or its Affiliates) or which is or becomes known
to Parent or its Affiliates independently of the Business. Except as set forth
in the next succeeding sentence, Parent shall, and shall cause its Affiliates
to, refrain from using any of the Confidential Information except in connection
with the Transaction, to enforce its rights and defend its obligations under
this Agreement, or the preparation of Tax returns or in connection with a Tax
audit, for purposes of financial reporting or as necessary in communications
with taxing authorities. In the event that any of Parent or it Affiliates is
required (by applicable Law, Order, subpoena or other legal process) to
disclose any Confidential Information, Parent shall notify the Buyer promptly
of the request or requirement so that the Buyer may seek, at its sole cost and
expense, an appropriate protective order or waive compliance with the
provisions of this Section 6.2(b). Parent shall, and shall cause its
Affiliates to, cooperate with the Buyer in seeking any such protective order
and if, in the absence of a protective order or the receipt of a waiver
hereunder, any of Parent or its Affiliates is, on the advice of counsel,
compelled to disclose any Confidential Information, such Person shall use its
commercially reasonable efforts to ensure that the Confidential Information
required to be disclosed shall be treated confidentially. The Buyer shall
reimburse Parent and its Affiliates for their reasonable out-of-pocket expenses
incurred in connection with compliance with the preceding sentence of this
Section 6.2(b).

 

45

 

6.3           Expenses.
Other than all HSR Act filing fees and filing fees under any applicable Foreign
Antitrust Laws, which shall be the responsibility of the Buyer, and except as
otherwise specifically provided herein, the Buyer, on the one hand, and Parent
and its Affiliates, on the other hand, shall bear their respective expenses
incurred in connection with the preparation, execution and performance of this
Agreement and the transactions contemplated hereby, including all fees and
expenses of agents, representatives, counsel and accountants; provided,
that any such fees and expenses of any Company or Subsidiary accrued prior to the
Closing shall be borne and paid by Parent.

 

6.4           Publicity.
Except as may be required by applicable Law (including the rules and
regulations of the New York Stock Exchange, Inc.), the parties hereto agree
that no publicity release or announcement concerning this Agreement or the
transactions contemplated hereby shall be made prior to the Closing Date
without reasonable and advance approval thereof by Parent and the Buyer. If any
public announcement is required by Law to be made by any party hereto, prior to
making such announcement, such party will deliver a draft of such announcement
to the other parties and shall give the other parties reasonable opportunity to
comment thereon.

 

6.5           Consents
and Other Matters.

 

(a)           Each of the Buyer and
the Sellers agrees, with respect to the transactions contemplated hereby, to
(i) make, or cause to be made, an appropriate filing of a Notification and
Report Form pursuant to the HSR Act and any filing required pursuant to
applicable Foreign Antitrust Laws, to the extent set forth in
Section 7.2(b) of the Seller Disclosure Schedule (as provided in
Section 7.2(b) below), as promptly as practicable and in any event within
10 calendar days of the date hereof, (ii) supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act and any applicable Foreign Antitrust Laws and
(iii) take all other commercially reasonable actions necessary to cause
the expiration or termination of the applicable waiting periods under the HSR
Act and any applicable Foreign Antitrust Laws as soon as practicable; provided,
that the foregoing shall not require the Buyer or the Sellers (and their
respective Affiliates) to (x) make any material expenditures other than
the payment of filing fees or (y) divest or dispose of any assets or lines
of business.

 

(b)           In connection with the
efforts referenced in Section 6.5(a), each of the Buyer and the Sellers
shall, to the extent permitted by applicable Law, (i) use its commercially
reasonable efforts to cooperate in all respects with the other in connection
with any filing or submission and in connection with any investigation or other
inquiry, including any proceeding initiated by a private party, (ii) keep
the other informed of any material communication received by such party from,
or given by such party to, the Federal Trade Commission (the “FTC”), the Antitrust Division of
the Department of Justice (the “DOJ”) or
any other Governmental Body and of any material communication received or given
in connection with any proceeding by a private party, in each case regarding
any of the transactions contemplated hereby, and (iii) permit the other to
review any material communication given by it to, and consult with each other
in 

 

46

 

advance of any
meeting or conference with, the FTC, the DOJ or any such other Governmental
Body or, in connection with any proceeding by a private party, with any other
Person.

 

(c)           The Sellers shall use
all commercially reasonable efforts to obtain or make all other Required
Consents and Notices and the Buyer shall use all commercially reasonable
efforts to assist the Sellers and cooperate with the Sellers in obtaining and
making such Required Consents and Notices. In
the event that any of the Company Consents and Notices are not obtained or
made, the Sellers shall, or shall cause their agents to, use all commercially
reasonable efforts to assist the Buyer, at the Buyer’s sole cost and expense,
in obtaining or making any such Company Consents and Notices after the Closing
Date until such time as such Company Consents and Notices have been obtained or
made; provided, that the receipt of any such Required Consents and
Notices shall not be a condition to Closing the transactions contemplated by
this Agreement. The Sellers shall also comply with, and provide the
notification required under, the Consent Order identified in
Section 3.2(b)(ii)(1) of the Seller Disclosure Schedule.

 

(d)           At all times prior to
the Closing, the parties hereto shall cooperate and coordinate with each other,
as appropriate, with respect to filings and notifications to Governmental
Bodies in connection with obtaining or making the Required Consents and Notices.
Without limiting the generality of the foregoing, the Sellers and the Buyer shall
make or cause to be made available all information reasonably requested by the
other to permit all necessary filings and notices to be made with or to
Governmental Bodies as promptly as practicable after the date hereof. Each
party shall promptly furnish or cause to be furnished all information and
documents reasonably required by the relevant Governmental Bodies as may be
appropriate in order to obtain or make the Required Consents and Notices. In
addition, the parties hereto shall take the actions specified on Annex 6.5(d)
with respect to the requirements of each of the Foreign Works Council Laws set
forth thereon.

 

(e)           Prior to the Closing,
the parties hereto shall use their respective commercially reasonable efforts
(which shall not require the payment of any consideration by the Buyer, any
Transferred Company or any Subsidiary or providing of any security by the
Buyer, any Transferred Company or any Subsidiary) to cause the Buyer to be
substituted for any Seller or any of its Affiliates (other than the Transferred
Companies and the Subsidiaries), as the case may be, and to cause such Seller
and such Affiliates to be released from all liability thereunder effective as
of the Closing, in respect of all obligations of such Seller or such Affiliates
under any of the Guaranties; provided, however, that if the
foregoing releases are not obtained, such Seller or such Affiliate shall not
terminate such Guaranties without the Buyer’s consent; provided, further,
that the Buyer or its subsidiaries shall enter into a separate guaranty with
such Seller or its Affiliates (and, if possible, the applicable third party) to
guarantee the performance of the obligations pursuant to the contract
underlying each such Guaranty on substantially the same terms as are set forth
in such Guaranty.

 

47

 

6.6           Access
to Information and Cooperation.

 

(a)           For a period of ten
years after the Closing Date, the Buyer (including, for the purpose of this
Section 6.6, the Transferred Companies, the Subsidiaries and the Business
after the Closing) shall provide the Sellers and their professional advisors
with reasonable access during normal business hours and upon reasonable prior
notice to the Buyer’s books and records relating to the operation of the
Business before the Closing Date if reasonably required in connection with any
Litigation, any Tax audit, any communications with taxing authorities or the
preparation of any Tax Returns.

 

(b)           For a period of ten
years after the Closing Date the Sellers and their Affiliates shall
(i) provide the Buyer and its professional advisors with reasonable access
during normal business hours and upon reasonable prior notice to the Sellers’
and their Affiliates’ books and records relating to the operation of the
Business before the Closing Date if reasonably required in connection with any
Litigation, any Tax audit, the preparation of any Tax Returns or the
preparation of any financial statements that include the financial results of
all or part of the Business for any period prior to the Closing and
(ii) cooperate with and assist the Buyer and its professional advisors in
connection with the preparation of any audited financial statements that
include the financial results of all or part of the Business for any period
prior to the Closing (including using commercially reasonable efforts to obtain
accountants’ comfort and reliance letters and management representation
letters).

 

(c)           Between the date hereof
and the Closing, the Sellers shall, and shall cause the Companies to, afford
the Buyer, its financing sources in connection with the Debt Financing and its
professional advisors (collectively, the “Buyer
Group”) reasonable access during normal business hours and upon
reasonable prior notice to all of the properties, personnel, contracts and
agreements, books and records of the Business and shall promptly deliver or
make available to the Buyer information concerning the business, properties,
assets and personnel of the Business as the Buyer may from time to time reasonably
request. Prior to the Closing Date, the Buyer shall not have any direct or
indirect contacts with any suppliers, customers or competitors of the Business
regarding the Transaction or the Business without the prior consent of Parent
or its representatives, which consent shall not be unreasonably withheld or
delayed; provided, however, that Parent shall be deemed to have
provided such consent with respect to any such supplier, customer or competitor
if and to the extent that Edward Cupoli or the President of CSG expressly
requests that the Buyer contact such supplier, customer or competitor. Notwithstanding
the foregoing, Parent hereby agrees that between the date hereof and the
Closing, the Lenders may contact up to five customers of the Business identified
to Parent, as long as one or more representatives of each of the Buyer and
Parent shall be present during any such contacts or meetings. The Sellers
acknowledge and agree that the Buyer Group may have contact with the Buyer’s
suppliers, customers and competitors in the ordinary course of the Buyer’s
business and nothing herein shall restrict any such contact by any of the Buyer
Group; provided, however, that any such contact shall not relate
to, or otherwise include, the Business or disclosure of the terms of the
transactions contemplated by this Agreement. The Buyer shall hold, and shall
cause its professional 

 

48

 

advisors to hold,
all Confidential Information (as such term is defined in the Non-Disclosure
Agreement) in confidence in accordance with the terms of the Non-Disclosure
Agreement and, in the event of the termination of this Agreement for any
reason, the Buyer promptly shall return all Confidential Information in
accordance with the terms of the Non-Disclosure Agreement.

 

(d)           Between the date hereof
and the Closing Date, within 20 days after the end of each calendar month
beginning with the calendar month ending January 31, 2006, Parent shall furnish
to the Buyer an unaudited monthly combined balance sheet of the Business
(without giving effect to the Reorganization), for the month then ended and
related statements of combined earnings, group equity and cash flows, in each
case, prepared in accordance with GAAP, consistently applied during the periods
involved, in a manner consistent with Parent’s Accounting Policies and in the
same format as the Unaudited Financial Statements. Parent is not making any
representation or warranty with respect to such information and shall have no
liability for its contents, except in the case of Parent’s or its Affiliates’
gross negligence or willful misconduct.

 

6.7           Preservation
of Records. The Buyer, at its own expense, shall use commercially
reasonable efforts to preserve and keep material records held by it or the
Transferred Companies or Subsidiaries or included in the Foreign Assets
relating to the Sellers, the Transferred Companies, the Subsidiaries, the
Foreign Assets, the Foreign Liabilities or the Business for a period of
ten years from the Closing Date, during which time the Buyer shall provide
the Sellers reasonable access to such records during normal business hours and
upon reasonable prior notice solely for purposes of complying with any
applicable Tax Laws or in connection with any Tax audit or communications with
any taxing authority. The Buyer may destroy such records after that time, but
not if Parent requests in writing within six months prior to such time that
such records not be destroyed, in which case the Buyer may give 90 days
prior written notice to Parent that details the general topics of the records
to be destroyed; provided, that if Parent elects to take possession of
such records by written notice to the Buyer within such 90 day period,
Parent shall take possession of such records at its own expense within
90 days of the date of such notice to the Buyer.

 

6.8           Further
Assurances. Subject to the terms and conditions herein provided, each of
the parties hereto agrees to use its commercially reasonable efforts to take or
cause to be taken all action and to do or cause to be done all things
reasonably necessary, proper or advisable consistent with applicable Laws to
consummate and make effective the transactions contemplated by this Agreement,
including (a) contesting any legal proceeding relating to the transactions
contemplated hereby and (b) executing any additional instruments necessary
to consummate the transactions contemplated hereby. If at any time after the
Closing Date any further action is necessary to carry out the purposes of this
Agreement, the proper officers and directors of each party hereto shall take
all such necessary action.

 

49

 

6.9           Names
and Marks.

 

(a)           The Buyer acknowledges
and agrees that, except as expressly set forth in this Section 6.9, the Buyer
has no rights in and to “ADP” or “Automatic Data Processing” (the “ADP Marks”), any marks, names, trade
names or trademarks incorporating the ADP Marks, any derivation thereof or any
marks or names confusingly similar thereto or any corporate symbols or logos
incorporating the ADP Marks. The ADP Marks and any marks, names, logos or
symbols incorporating the ADP Marks, including those set forth in Section
6.9(a) of the Seller Disclosure Schedule 
(the “Retained Marks”),
and any goodwill represented by the ADP Marks and pertaining to the ADP Marks
are and will remain the sole property of, or will be fully assigned to, Parent
and/or the other Sellers or the applicable Company or Subsidiary. Except as
provided in Section 6.9(b), the Buyer further acknowledges and agrees that
following the Closing Date the Buyer shall not have any right, title or
interest in and to, or right to use in any manner, including in connection with
any advertising, marketing or solicitation efforts, the Retained Marks. After
the Reorganization and Closing, and notwithstanding the foregoing, the Buyer or
its Affiliate, or a Transferred Company or Subsidiary, as applicable, shall own
the trademarks or service marks owned by the Buyer or its Affiliates pursuant hereto,
including the trademarks or service marks that, prior to the date hereof, have
been combined with the ADP Marks in the Retained Marks. Notwithstanding
anything herein to the contrary, the Sellers and their Affiliates may not,
after the Reorganization and Closing, use the non-ADP Mark portion of any of
the Retained Marks which solely relate to the Business. The Buyer and its
Affiliates may not use the ADP Marks or the Retained Marks, except as otherwise
provided herein and in the Transition Services Agreement, after the Closing.

 

(b)           Notwithstanding the
foregoing Section 6.9(a), the Transferred Companies, the Subsidiaries and the
Buyer may use the Retained Marks for a reasonable period of time following the
Closing not to exceed 90 days (except as may be expressly provided in the
Transition Services Agreement):  (i) in
correspondence with customers and the public for the purpose of informing them
of the consummation of the transactions contemplated hereby and (ii) on any pre
existing inventory, stationery, business cards, labels, packaging materials,
containers, signs, panels, flags, brochures, manuals, literature, invoices,
internet materials, real property signage, and other material or matter
(regardless of medium) used in the Business bearing or containing the Retained
Marks. During such period, the Buyer shall not, and shall procure that the
Transferred Companies and the Subsidiaries shall not, knowingly (or in
circumstances where they ought reasonably to have known) do anything to
prejudice or endanger the value or validity of the Retained Marks and the Buyer
shall, and shall procure that the Transferred Companies and the Subsidiaries
shall, comply promptly with any instructions from Parent relating to any
Transferred Company’s and/or Subsidiary’s use of the Retained Marks that may
prejudice or endanger the value or validity of the Retained Marks. At the end
of such period, the Buyer shall, and shall procure that each of the Transferred
Companies and the Subsidiaries shall, forthwith procure that all remaining
items on which the Retained Marks appear are either destroyed or that the
Retained Marks are removed or obliterated.

 

50

 

(c)           The Buyer covenants
that it will not hereafter adopt, use, or register or authorize others to
adopt, use, or register, any trade names, trademarks, service marks or Internet
domain names consisting of or incorporating the ADP Marks or any marks, names
or Internet domain names confusingly similar thereto.

 

(d)           Notwithstanding anything
in the Agreement to the contrary, the representations and warranties provided
by the Sellers pursuant to Article III and Article IV shall not apply to the
Retained Marks, except with respect to liability incurred by the Buyer as a
direct result of a claim covered by Section 4.14(c) with respect to a
Transferred Company’s or Subsidiary’s use of the Retained Marks prior to
Closing.

 

6.10         Employee
and Employee Benefits Matters.

 

(a)           Scope of Section.
This Section 6.10 contains the covenants and agreements of the parties
with respect to (i) the status of employment of the employees of Parent,
the Companies and the Subsidiaries, employed in the Business as of the Closing
Date (“Employees”), and (ii) the
employee benefits and employee benefit plans provided to or covering any such
Employee and former employees of Parent, the Companies and the Subsidiaries who
terminated employment with Parent, the Companies and the Subsidiaries while
employed in the Business or retired from the Business (“Former
Employees”). Nothing herein expressed or implied confers upon
any Employee or Former Employee any rights or remedies of any nature or kind
whatsoever under or by reason of this Section 6.10. Except to the extent
expressly assumed by the Buyer pursuant to this Section 6.10, Parent shall
assume and retain and have sole responsibility for all liabilities,
obligations, and commitments at any time relating to or arising under or in
connection with any Company Benefit Plan, any “employee benefit plan” (as
defined in Section 3(3) of ERISA), and any other benefit plan, program, or
arrangement of any kind at any time maintained, sponsored, or contributed or
required to be contributed to by Parent, the Companies, any of the
Subsidiaries, or any of their respective Affiliates, or with respect to which
Parent, the Companies, any of the Subsidiaries, or any of their respective
Affiliates has any current or potential obligation or liability.

 

(b)           U.S. Employees.
This Section 6.10(b) applies only to Employees and Former Employees employed
or previously employed by the Business in the United States (“U.S. Employees” and “Former U.S. Employees,”
respectively). Parent represents to the Buyer that Section 6.10(b) of the
Seller Disclosure Schedule sets forth a list of all U.S. Employees as
of a date not more than 30 Business Days prior to the date hereof.

 

(i)            Employment.

 

(1)           The Buyer shall cause
the Companies or Subsidiaries, as appropriate, to continue effective as of the
Closing Date the employment of all U.S. Employees who are employed by any
of the Companies or Subsidiaries immediately prior to the Closing Date (the “U.S. Transferred Employees”). A
U.S. Employee who is absent immediately prior to the Closing 

 

51

 

Date due to vacation, holiday, authorized leave of
absence, illness, injury or short-term disability (but not long-term
disability) shall be considered to be employed immediately prior to the Closing
Date. The Buyer shall cause the Companies or the Subsidiaries, as appropriate,
to provide each U.S. Transferred Employee until at least December 31,
2006, with base pay, substantially comparable in the aggregate to those
provided by the applicable Company or Subsidiary on the day before the Closing
Date. Notwithstanding the foregoing, nothing in this Agreement shall be
construed to affect the ability of the Buyer, the Companies, the Subsidiaries,
or any of their Affiliates to terminate the employment of any employee
(including any U.S. Transferred Employee) at any time and for any or no reason
or alter the “at-will” employment status of any Employee currently possessing
such status.

 

(2)           If the Buyer requires a
U.S. Employee’s principal place of business on or prior to
December 31, 2006 to be more than 50 miles from the
U.S. Employee’s current principal place of business with the applicable
Company or Subsidiary prior to the Closing Date, the Buyer acknowledges and
agrees that if such U.S. Employee refuses to accept such offer, the Buyer
shall be liable for the severance pay benefit described in
Section 6.10(b)(v)(1) to which such U.S. Employee may be entitled
under Parent’s or the applicable Company’s or Subsidiary’s severance plan or
applicable Law. If the Buyer terminates the employment of any
U.S. Transferred Employee on or prior to December 31, 2006 (other
than any temporary employee or any employee whose principal duties are or were
not performed in connection with the Business), the Buyer shall pay such
U.S. Transferred Employee a severance benefit, consisting of notice pay
and salary continuation, that shall in no event be less than, or paid later
than, the severance benefit, if any, to which such U.S. Transferred
Employee would have been entitled if Parent’s or the applicable Company’s or
Subsidiary’s severance plans, as in effect as of the Closing Date, applied to
such termination of employment. For purposes of the preceding sentence, service
with both Parent (or the applicable Company or Subsidiary) and the Buyer shall
be taken into account in computing the amount of such benefit.

 

(ii)           Pension Plan. Effective
as of the Closing Date, Parent shall cause each U.S. Employee who is a
participant under the Automatic Data Processing, Inc. Pension Retirement Plan (“Parent’s Pension Plan”) to become
fully vested in such participant’s accrued benefit under the Parent’s Pension
Plan determined as of the Closing Date.

 

(iii)          Savings Plans. The
Buyer shall maintain or establish as soon as practicable following the Closing
Date a tax-qualified defined contribution savings plan (“Buyer’s
Savings Plan”), which shall, for the period between the Closing
Date and December 31, 2006, provide benefits substantially comparable in the
aggregate to the benefits options available under the Automatic Data
Processing, Inc. Retirement and Savings Plan (“Parent’s
Savings Plan”). All service of the U.S. Transferred
Employees with Parent, a Company or Subsidiary shall be taken into account for
purposes of determining eligibility and 

 

52

 

vesting under Buyer’s Savings Plan. U.S. Transferred
Employees shall be eligible to effect a direct rollover (as described in
Section 401(a)(31) of the Code) of all of any such U.S. Transferred
Employee’s balance under Parent’s Savings Plan (other than any after-tax
employee contributions) solely in the form of cash and promissory notes
attributable to loans made to such U.S. Transferred Employees under Parent’s
Savings Plan, subject to the terms and conditions of each such plan, to Buyer’s
Savings Plan. Prior to or on the Closing Date, Parent shall contribute to
Parent’s Savings Plan on behalf of the U.S. Employees a pro-rated portion of
the employer match that would otherwise have been contributed on behalf of such
employees if no end-of-year employment requirement applied for purposes of
receiving such match, and shall cause each U.S. Employee who is a participant
under the Parent’s Savings Plan to become fully vested in such participant’s
accrued benefit under the Parent’s Savings Plan determined as of the Closing
Date.

 

(iv)          Executive Retiree
Health Insurance Benefits. The Buyer shall not assume any liabilities or
obligations of Parent or any Company or Subsidiary for (i) benefits
payable to Former U.S. Employees who retire prior to the Closing Date
under any of Parent’s or the applicable Company’s or Subsidiary’s executive
retiree medical benefit programs covering retired employees and (ii) the
provision of any retiree medical benefits to any U.S. Employee (or any
dependent or beneficiary thereof) including any U.S. Transferred Employee.

 

(v)           Employee Welfare
Plans.

 

(1)           Parent shall remain
responsible for and shall assume and pay all liabilities and obligations of
Parent and any of the Companies or Subsidiaries for the benefits payable or to
become payable to U.S. Employees and their beneficiaries under the
medical, dental, life insurance, disability, severance and other welfare
benefit plans and programs covering U.S. Employees identified in
Section 6.10(b)(v)(1) of the Seller Disclosure
Schedule (collectively “Parent’s Welfare Benefit
Plans”); with the exception of any flexible spending plan to the
extent provided in Section 6.10(b)(v)(2) immediately below and any
vacation pay for which the Companies and the Subsidiaries remain liable
pursuant to Section 6.10(b)(vi)(4) below. Parent hereby agrees that
(i) any U.S. Employee or Former U.S. Employee who (A) as of the
Closing Date is receiving or entitled to receive short-term disability benefits
and who subsequently becomes eligible to receive long-term disability benefits,
or (B) as of the Closing Date is receiving or entitled to receive long-term
disability benefits, shall become eligible or continue to be eligible, as
applicable, to receive long-term disability benefits under Parent’s long-term
disability plan unless and until such individual is no longer disabled, and
that (ii) Parent shall be solely liable for any obligations or liabilities
of any kind of any Company or any Subsidiary arising in connection with any
U.S. Employee or Former U.S. Employee who is receiving or entitled to
receive long-term disability benefits as of the Closing Date.

 

53

 

(2)           The Buyer shall have
established as of the Closing Date plans or programs to provide welfare
benefits to U.S. Transferred Employees that are substantially comparable in the
aggregate to those provided under Parent’s Welfare Benefit Plans (other than
any retiree medical plan) immediately prior to the Closing Date. The Buyer
shall, through the period beginning on the Closing Date and ending on the last
day of the calendar year in which the Closing Date occurs, maintain health care
and dependent care flexible spending accounts established under
Section 125 of the Code (the “Buyer FSA”).
The Buyer FSA shall provide that U.S. Transferred Employees, other than
those U.S. Transferred Employees who elect to continue to participate in
the ADP Health Care Spending Account Plan (the “Parent
FSA”) pursuant to COBRA, shall participate in the Buyer FSA and
each such U.S. Transferred Employee shall be credited immediately
following the Closing Date under the Buyer FSA with amounts available for
reimbursement equal to such amounts as were credited under the Parent FSA with
respect to such person immediately prior to the Closing Date. The Buyer shall
give effect under the Buyer FSA to any elections made by U.S. Transferred
Employees, other than those U.S. Transferred Employees who elect to
continue to participate in the Parent FSA pursuant to COBRA, with respect to
the Parent FSA for the year in which the Closing Date occurs. Parent shall
transfer cash to the Buyer, to an account specified by the Buyer, no later than
30 days following the Closing Date, in an amount equal to the aggregate
amount of all balances held by the U.S. Transferred Employees, other than
those U.S. Transferred Employees who elect to continue to participate in
the Parent FSA pursuant to COBRA, under the Parent FSA as of the Closing Date,
together with Parent’s cash contribution for each U.S. Transferred
Employee’s FSA account (which contribution shall be made by Parent pursuant to
the terms of the plan). The parties hereto agree to make reasonable, good faith
efforts to implement the provisions of this section to take into account the
complexity of transferring flexible spending accounts. Such welfare plan or
plans established by the Buyer shall, where applicable, (i) credit all
service with Parent or any Company or Subsidiary for all purposes, including
eligibility, participation and benefit entitlement for the U.S. Transferred
Employees to the extent credited as of the Closing Date under an analogous
Parent Welfare Benefit Plan, (ii) in the year in which the Closing Date
occurs waive any pre-existing condition, limitation or exclusion or any
actively-at-work requirement for the U.S. Transferred Employees to the extent
waived or satisfied under an analogous Parent Welfare Benefit Plan as of the
Closing Date, (iii) in the year in which the Closing Date occurs credit
all payments made under an analogous Parent Welfare Benefit Plan with respect
to U.S. Transferred Employees for healthcare expenses during the current plan
year for purposes of deductibles, co-payments and maximum out-of-pocket limits
and (iv)  until at least December 31, 2006, provide benefits and cost
sharing features which are substantially comparable in the aggregate to those
provided under Parent’s Welfare Benefit Plans (other than any retiree medical
plan) as of the date hereof. Parent shall facilitate arranging appropriate
healthcare provider contacts so that the Buyer can establish welfare benefit
plans and arrangements as required by this subsection.

 

54

 

(vi)          Other Compensation
Arrangements.

 

(1)           Parent shall cause all options to purchase shares of Parent’s common
stock that were granted prior to January 1, 2006 and are held as of the Closing
Date by Employees to become fully vested and immediately exercisable by such
Employees effective as of the Closing, and such options shall remain
exercisable for at least 60 days after the Closing Date.

 

(2)           The Buyer shall
establish on or as soon as practicable after the Closing Date and effective as
of the Closing Date, long-term and short-term incentive compensation plans
(other than any equity-based plans) for U.S. Transferred Employees which,
until June 30, 2006, shall provide participation, eligibility, vesting,
benefit determination and benefit payment provisions that are substantially
comparable in the aggregate to that provided under Parent’s or the applicable
Company’s or Subsidiary’s incentive compensation plans (other than any equity-based
plan) as of the date hereof. With respect to the applicable performance period
in which the Closing occurs, the Buyer shall determine any incentive
compensation awards for U.S. Transferred Employees under the Buyer’s
incentive compensation plan by taking into account each such
U.S. Transferred Employee’s service and performance with both Parent (or
the applicable Company or Subsidiary) and the Buyer during such applicable
performance period except to the extent any duplication of benefits would
result. Parent shall be relieved of any obligation to make incentive
compensation payments to U.S. Transferred Employees for the calendar year in
which Closing Date occurs solely to the extent any such obligations that relate
to any period of time on or prior to the Closing Date are included in the Final
Net Working Capital.

 

(3)           The Buyer shall, as of
the Closing Date, assume, be responsible for and pay all amounts which become
due or payable to U.S. Employees after the Closing Date pursuant to the
retention, separation and other agreements
with Parent or the applicable Company or Subsidiary which are listed in
Section 6.10(b)(vi)(3) of the Seller Disclosure
Schedule (collectively, the “Employee
Transaction Agreements”) to the extent such liabilities are
included in the Additional Adjustment Amount.

 

(4)           As of the Closing Date,
the Buyer shall assume and pay or cause to be paid, when due, all liabilities
and obligations of Parent and any applicable Company or Subsidiary relating to
accrued vacation as of the Closing Date with respect to U.S. Transferred
Employees to the extent such liabilities are included in the Final Net Working
Capital. For the avoidance of doubt, the respective U.S. Transferred
Employee shall be entitled to either use such vacation time on terms
substantially similar to those in effect under the vacation policy of Parent or
such Company or Subsidiary as of the Closing Date, or, consistent with such
applicable vacation policy, receive payment in respect of such accrued vacation
upon the U.S. Transferred Employee’s termination of employment with the
Buyer.

 

55

 

(5)           As of the Closing Date,
the Buyer shall assume and pay, when due, all liabilities and obligations for
time periods ending on December 31, 2006 of Parent and any applicable
Company or Subsidiary relating to U.S. Transferred Employees participating
in Parent’s or the applicable Company’s or Subsidiary’s tuition reimbursement
program as of the Closing Date. The Buyer shall, as of the Closing Date,
establish a tuition reimbursement program for U.S. Transferred Employees
with benefits and cost-sharing features which through December 31, 2006
are substantially comparable in the aggregate to those provided under Parent’s
or the applicable Company’s or Subsidiary’s tuition reimbursement plan
immediately prior to the Closing.

 

(vii)         Severance and WARN
Liability. The Buyer agrees to pay and be responsible for all liability,
cost or expense for severance, termination indemnity payments, salary
continuation, special bonuses and like costs that are fully disclosed to the
Buyer before the Closing Date and that arise from the termination of employment
of a U.S. Employee by the Buyer on or after the Closing Date, including
any such costs attributable to the Buyer’s termination of U.S. Transferred
Employees, which if aggregated with any conduct of Parent or any Company or
Subsidiary prior to the Closing Date, triggers obligations under the Worker
Adjustment and Retraining Notification Act of 1988, as amended, and any similar
applicable foreign, state or local law, regulation or ordinance (collectively, “WARN” or the “WARN Act”).
The Buyer agrees to pay and be responsible for all liability, cost, expense and
sanctions resulting from any failure to comply with WARN in connection with the
consummation of the Transaction. Parent agrees to provide to the Buyer, no
later than five Business Days prior to the Closing Date, a list by location and
date of all full-time employees permanently laid off by the Companies or
Subsidiaries in the 90-day period immediately preceding the Closing Date.

 

(viii)        Health Care
Continuation Coverage. The Buyer agrees to provide U.S. Transferred
Employees and their covered beneficiaries with continuation coverage required
by COBRA as a result of “qualifying
events” (as defined in Section 4980B of the Code) which occur on or after
the Closing Date. Parent shall be solely responsible for satisfying the
continuation coverage requirements for group health plans under COBRA for all
current and former employees, officers, directors, contractors and agents  (and eligible dependents and beneficiaries
thereof) of any Company or any Subsidiary who are receiving COBRA continuation
coverage as of the Closing Date or who are entitled to elect to receive such
coverage on account of a “qualifying event” (as such term is defined under
COBRA) occurring prior to the Closing Date.

 

(ix)           IRS Form W-2.
The parties agree that they shall comply with the alternative procedure of
Section 5 of IRS Revenue Procedure 96-60, 1996-2 C.B. 399 and
Section 5 of Revenue Procedure 99-50, 1999-52 I.R.B. 757, and that the
Buyer shall prepare and file Forms W-2 for the U.S. Employees for the
calendar year in which the Closing occurs and Parent, the Companies and the
Subsidiaries shall be relieved of preparing IRS Forms W-2 for 

 

56

 

the U.S. Employees for the calendar year in which
the Closing occurs. Notwithstanding the foregoing, Parent shall be solely
responsible for preparing IRS Forms W-2 for all U.S. Employees and Former U.S.
Employees for the 2005 calendar year.

 

(x)            Workers’
Compensation. Parent shall be responsible for the administration and the
financial obligation of all U.S. workers’ compensation claims with respect to
all U.S. Employees and Former U.S. Employees arising out of or relating to
occurrences before the Closing Date.

 

(c)           Non-U.S. Employees.
This Section 6.10(c) applies only to Employees and Former Employees employed
by or previously employed in the Business outside of the United States (the “Non-U.S. Business”). Parent
represents to the Buyer that Section 6.10(c) of the Seller Disclosure
Schedule sets forth a list of all Employees other than U.S. Employees as
of a date not more than 30 Business Days prior to the date hereof.

 

(i)            Scope of Section.
This Section 6.10(c) contains covenants and agreements of the parties on
and as of the Closing Date with respect to:

 

(1)           the status of
employment of the Employees employed by Parent or any Company or Subsidiary in
the Non-U.S. Business, whether hourly or salaried, and who are actively at
work on the Closing Date, or who are absent on the Closing Date due to vacation
or holiday or other leave, whether paid or unpaid, or due to illness (the “Non-U.S. Employees”) upon the
sale of the Business to the Buyer; and

 

(2)           the Company Benefit
Plans provided or covering such Non-U.S. Employees and certain former
employees of Parent or any Company or Subsidiary (the “Non-U.S. Former
Employees”) who terminated employment with Parent or any Company
or Subsidiary while employed in the Non-U.S. Business or retired from the
Non-U.S. Business (the “Non-U.S. Benefits
Plans”).

 

(ii)           Employment
and Other Employee Matters.

 

(1)           For those Non-U.S. Employees
that are not employed by any Transferred Company or Subsidiary and for those
Non-U.S. Employees that are employed by a Foreign Asset Seller, in each
case, identified in Section 6.10(c)(ii)(1) of the Seller Disclosure
Schedule (the “Specified Non-U.S.
Employees”), the parties understand and agree that wherever
legally permissible or required, the Specified Non-U.S. Employees shall
become employees of the Buyer, or of its nominee acquiring the relevant part of
the Business, by operation of any applicable Laws (“National
Laws”) or pursuant to the terms of any necessary transfer
agreement relating to that jurisdiction. If for any reason the employment of a
Specified Non-U.S. Employee does not 

 

57

 

transfer to the Buyer under National Laws or transfer
agreements, the Buyer shall make an offer of employment to such Specified
Non-U.S. Employee effective as of the Closing Date on terms and conditions
which are no less favorable in the aggregate than those on which they are
currently employed. The offer shall provide that service with the Sellers or
their Affiliates shall count as service with the Buyer for all purposes,
including under its benefit plans, save where this would result in duplication
of benefits received or prospectively payable. However, to the extent permitted
by applicable Law, any offers of employment made by the Buyer to Specified
Non-U.S. Employees who are on leave due to illness or disability will be
conditional on such Specified Non-U.S. Employee returning to active employment
in the Non-U.S. Business within 90 days following the Closing. The Sellers or
their Affiliates will provide the Buyer with such information about the
Non-U.S. Employees as it may reasonably require in order to make offers of
employment in accordance with this Section 6.10(c)(ii)(1) to the extent
permitted by applicable Law. The Buyer shall indemnify the Sellers and their
Affiliates for all
liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments
and penalties (including reasonable fees for outside counsel, accountants and
other outside consultants) suffered or incurred by them and arising from
the Buyer’s failure to comply with this Section 6.10(c)(ii)(1).

 

(2)           Except with respect to
those plans to be assumed by the Buyer under this Agreement or by operation of
Law, each Non-U.S. Employee and Non-U.S. Former Employee shall cease
participation in all Non-U.S. Benefits Plans on the Closing Date. The
Sellers and their Affiliates shall retain all liabilities under or in respect
of all Non-U.S. Benefit Plans not assumed by the Buyer under this Agreement or
by operation of applicable Law. Neither the Buyer nor its Affiliates shall have
any responsibility or liability under or in respect of any Non-U.S. Benefit
Plan unless such plan is assumed by the Buyer under this Agreement or by
operation of applicable Law.

 

(3)           For the avoidance of
doubt, the Buyer accepts that it shall be solely responsible for any amounts
becoming payable to Non-U.S. Employees under any National Laws as a result
of their being dismissed by the Buyer at any time on or after the Closing Date,
notwithstanding that such amount may be calculated under the National Laws by
reference to periods of employment with Parent or any of the Companies and
Subsidiaries as well as periods of employment with the Buyer.

 

(4)           The Buyer shall
indemnify the Sellers and their Affiliates against all liabilities, losses,
damages, claims, costs, expenses, interest, awards, judgments and penalties
(including reasonable fees for outside counsel, accountants and other outside
consultants) suffered or incurred by them and arising out of or in connection
with any claim by a Non-U.S. Employee (whether in contract or in tort or
under statute or at common law for any remedy, including for breach of
contract, unfair dismissal, redundancy, statutory redundancy, equal pay, sex,
race or disability discrimination, unlawful deductions from wages or for breach
of statutory duty or of any nature) as a result of anything 

 

58

 

done or omitted to be done by the Buyer in violation
of its obligations under this Agreement.

 

(5)           If the Buyer or one of
its Affiliates terminates the employment of any Non-U.S. Employee prior to
December 31, 2006, the Buyer or the relevant Affiliate shall pay such Non-U.S. Employee
a redundancy, termination or severance benefit that shall in no event be less
than, nor paid later than, the redundancy, termination or severance benefit
required by National Law or a collective bargaining agreement then in effect. The
Buyer shall assume (and Parent shall neither assume nor retain) any liabilities
or obligations of Parent or any Company or Subsidiary related to any severance,
sale bonus, retention or similar plan or Contract related to the acquisition of
the ABZ Entities or the businesses carried on by such entities by Parent or its
Affiliates (the “ABZ Retention Plans”).

 

(6)           The Buyer declares to
Parent that the Buyer or its Affiliate employing the relevant Non-US Employees
will accept the benefit and the burden of the collective bargaining agreements
covering Non-U.S. Employees as if such agreements had been made by the
Buyer or its Affiliate and not by Parent or any Foreign Asset Seller.

 

(7)           The Non-U.S. Employees
will no longer be eligible to participate in or receive awards under any stock
option, stock purchase or other stock plan of Parent and any Foreign Asset
Seller as of the Closing Date.

 

(8)           From and after the
Closing Date, the Buyer shall, and shall cause the Transferred Companies and
Subsidiaries to, assume and pay when due, all liabilities and obligations of
Parent or any Foreign Asset Seller relating to accrued vacation or leave
benefits and allowances of Non-U.S. Employees as of the Closing Date but
only to the extent such liabilities have been included in the Final Net Working
Capital.

 

(9)           With respect to the
period between the Closing Date and June 30, 2006, the Buyer shall be
responsible for and pay, or cause its Affiliate employing the relevant Non-US
Employee to pay, a cash incentive compensation award to each Non-U.S. Employee
who is eligible for an award under Parent’s or Foreign Asset Seller’s incentive
compensation plans for such year which is at least equal to the incentive
compensation award such Non-U.S. Employee would have received under Parent’s
or any Foreign Asset Seller’s compensation plans immediately prior to the
Closing Date, had such Non-U.S. Employee remained employed by Parent or
such Foreign Asset Seller through June 30, 2006 but only to the extent
liabilities for such obligations have been included in the Final Net Working
Capital. Parent and any applicable Foreign Asset Seller shall be relieved of
any obligation to make incentive compensation payments for the calendar year in
which the Closing occurs but only to the extent such liabilities have been
included in the Final Net Working Capital.

 

59

 

(10)         To the extent permitted
by Law, the Buyer shall give to Parent, and Parent shall give to the Buyer, on
a timely basis all requisite and pertinent information which Parent and the
Buyer, respectively, may require in order to comply with their respective
obligations with respect to the Non-U.S. Employees.

 

(11)         The Buyer shall comply with
all obligations under applicable National Laws to provide information to Parent
for onward transmission to Non-U.S. Employees or their representatives
and/or to provide such information directly to the Non-U.S. Employees or
their representatives.

 

(iii)          UK Pension Matters.

 

(1)           The Sellers shall
retain the U.K. Pension Plan and the past service pension liabilities for
employees and former employees of the U.K. Company within the U.K. Pension
Plan.

 

(2)           The Buyer covenants and
agrees that, except as may be required by applicable Law, it will not make any
application or request or other submission of any kind in relation to the U.K.
Pension Plan to the U.K. Pensions Regulator, without Parent’s prior written
request or consent (and the Buyer acknowledges that, as of the date hereof, no
such consent has been given and no such request has been made).

 

6.11         Inter-Company
Dividends and Distributions; Excess Cash.

 

(a)           Pre-Closing
Dividends. Other than Section 4.5(e), nothing set forth in this Agreement
(including Section 6.1) shall interfere with, delay, or prevent the dividend,
distribution or making of loans from time to time of any cash on hand among the
Sellers, any Company, any Subsidiary or any of their respective Affiliates
prior to the close of business on the day before the Closing Date; provided,
that any such dividends or distributions made in respect of equity interests by
a Transferred Company or Subsidiary are paid at the same time to the applicable
equityholders on a pro rata basis in accordance with their respective equity
interests.

 

(b)           Excess Cash at
Closing. Following the Closing:

 

(i)            This Section
6.11(b)(i) is subject to the provisions of Section 6.11(b)(ii). If there is an
Excess Parent Cash Amount, then the Buyer shall be obligated to pay to Parent
in cash the Excess Parent Cash Amount solely from the proceeds of, and only to
the extent of the proceeds of, cash dividends and distributions paid to the
Buyer by the Transferred Companies of the cash held by the Transferred
Companies and/or the Subsidiaries as of the open of business on the Closing
Date that is included in the calculation of the Excess Parent Cash Amount. The
Buyer shall use commercially reasonable efforts to, directly or indirectly,
hold the cash included in the Excess Parent Cash Amount for the benefit of
Parent in segregated accounts and not subject to any security, collateral, 

 

60

 

account control or similar obligations. The Buyer
shall use commercially reasonable efforts to take or cause to be taken such
actions as Parent may reasonably request with respect to the investment and
control of the cash included in the Excess Parent Cash Amount. The Buyer shall
use commercially reasonable efforts to cooperate with, and take direction from,
Parent and its Affiliates with respect to the dividend or distribution of the
cash included in the Excess Parent Cash Amount to the Buyer so that such
amounts may be paid by the Buyer to Parent as promptly as reasonably
practicable given the limitations set forth herein, including by using
commercially reasonable efforts to cause the relevant Transferred Companies and
Subsidiaries to complete the statutory audits required for any such dividend or
distribution and to take any and all action as reasonably requested by Parent
to dividend or distribute the Excess Parent Cash Amount. Parent shall indemnify
the Buyer and its Affiliates for all liabilities, losses, damages, claims,
costs, expenses, interest, awards, judgments and penalties (including reasonable
fees for outside counsel, accountants and other outside consultants) suffered
or incurred by them and arising from the ownership of the Excess Parent Cash
Amount and from any all actions taken at the direction or request of Parent
pursuant to this Section 6.11(b), except in the case of any of the Buyer’s or
its Affiliates’ gross negligence or willful misconduct.

 

(ii)           Notwithstanding
anything in this Section 6.11(b) or elsewhere in this Agreement to the
contrary, the Buyer’s obligations under this Agreement with respect to the
Excess Parent Cash Amount shall be limited as follows:  (A) the Buyer’s obligations shall be limited
to the extent they are reasonably determined based on the advice of outside
counsel to violate applicable Law, (B) the Buyer’s obligations shall be limited
by any restrictions set forth in the articles of association, bylaws or other
organizational documents or Contracts of any Transferred Company or Subsidiary
in effect as of immediately prior to the Closing, (C) the amount of any payment
to Parent in respect of the Excess Parent Cash Amount may be reduced by the
Buyer for any Losses realized or that are reasonably likely to be realized by
the Buyer or its Affiliates in order to make the payments to Parent as
contemplated by this Section 6.11(b) (including incremental Tax liabilities
that are payable by the Buyer or any of its Affiliates in connection with such
dividends or distributions, amounts payable to minority shareholders of the
Transferred Companies or Subsidiaries in connection with such dividends or
distributions, legal fees and other expenses to call and hold shareholder
meetings, and the costs of any statutory audits that would not otherwise be
required), and (D) the Buyer’s obligations shall be subject to and limited in
all respects by any restrictions, limitations or prohibitions on the Buyer or
its Affiliates set forth in any agreement between any of them and a third party
source of debt financing. Between the date hereof and the Closing Date, the
Buyer shall use commercially reasonable efforts to negotiate with any such debt
financing sources appropriate exceptions in the financing documentation for
such debt financing to minimize the extent to which clause (D) of the preceding
sentence will limit the Buyer’s obligations hereunder. Following the Closing Date, in connection with any new debt financing
or refinancing of debt by the Buyer or its Subsidiaries, the Buyer shall use
commercially reasonable efforts to

 

61

 

negotiate with any such debt
financing sources appropriate exceptions in the financing documentation for
such debt financing to minimize the extent to which the foregoing clause (D)
will limit the Buyer’s obligations hereunder.

 

(iii)          For purposes of this
Agreement, “Excess Parent Cash Amount”
means an amount equal to the lesser of (A) the aggregate amount, if any, by
which the amounts, if any, payable by the Buyer pursuant to Section 2.4 are
reduced as a result of the Estimated Working Capital Adjustment Limitation and
the Post-Closing Working Capital Adjustment Limitation and (B) the aggregate
amount of cash (other than Restricted Cash) included in the Final Net Working
Capital; provided, that to the extent that the amount of any cash held
by a Transferred Company or Subsidiary (other than Restricted Cash) that is
included in the Final Net Working Capital exceeds the distributable reserves
(or equivalent items under local applicable Law) of such Transferred Company or
Subsidiary as of the open of business on the Closing Date, the amount of such
excess shall be excluded from and reduce the amount of the Excess Parent Cash
Amount.

 

6.12         Intercompany
Accounts. Except (i) to the extent included in the Additional
Adjustment Amount and (ii) for obligations under the Transition Services
Agreement, the Buyer Shared Facilities Agreement and the Parent Shared
Facilities Agreement, Parent will cause all liabilities owing from any
Transferred Company or Subsidiary to any of the Sellers or any of their
Affiliates (except other Transferred Companies and Subsidiaries) as of the
close of business on the day before the Closing Date to be discharged,
terminated or cancelled (i.e.,
after the day before the Closing Date the Transferred Companies and
Subsidiaries shall not have any obligation to repay such liabilities). The
Sellers will cause all liabilities owing from any of the Sellers or any of
their Affiliates (other than the Transferred Companies or Subsidiaries) to any
Transferred Company or Subsidiary as of the close of business on the day before
the Closing Date to be discharged, terminated or cancelled (i.e., after the Closing none of the
Sellers or any of their Affiliates (other than the Transferred Companies or
Subsidiaries) shall have any obligation to repay such liabilities).

 

6.13         Non-Solicitation
of the Buyer’s Employees. For a period of two years following the Closing
Date, the Sellers shall not, and shall cause their Affiliates not to, directly
or indirectly, solicit for the purpose of offering employment or hire or offer
to hire (whether as an employee or consultant) or in any other manner persuade
or attempt to persuade any officer, employee or agent of any of the Transferred
Companies or Subsidiaries or the Buyer identified by name in Section 6.13
of the Seller Disclosure Schedule to discontinue his or her relationship
with such Transferred Company, Subsidiary, the Buyer or any of their
Affiliates; provided, however, that (a) if any such officer,
employee or agent has been terminated by such Transferred Company, Subsidiary
or the Buyer for any reason, then this Section 6.13 shall not apply
following the expiration of a period of 135 days after such termination,
and (b) this Section 6.13 shall not prohibit a general solicitation
for employment not specifically targeted to employees of the Business.

 

62

 

6.14         Non-Compete.
For a period of three years following the Closing Date, the Sellers shall not,
and shall cause their subsidiaries not to, in any state in the United States or
in another jurisdiction in which the Business operates on the Closing Date
(a) directly or indirectly, either as a principal, partner, agent,
manager, stockholder, director, officer or in any other capacity, provide
Claims Services; provided, however, that ownership of less than
5% of the voting stock of any Person providing Claims Services shall not
constitute a violation hereof or (b) acquire or enter an agreement to
acquire or merge or consolidate with any Person or business, if such Person or
business (i) shall have generated greater than 20% of its revenue from Claims
Services during its then most recently completed fiscal year, (ii) shall have
generated greater than $100 million of its revenue from Claim Services during
its then most recently completed fiscal year or (iii) shall be listed on Annex
6.14 attached hereto or shall be a successor to or Subsidiary of a Person
listed on Annex 6.14; provided, however, that nothing
contained in this Section 6.14 shall prohibit the acquisition, merger,
consolidation or combination by any Seller with any Person or business that
would otherwise be in violation of clause (b) above if, within
15 months of such acquisition, merger, consolidation or combination, such
Seller shall have consummated the sale to a third party of such Person or
business or substantially all of the assets of such Person or business that
generated such Claims Services revenue; provided, further, that
nothing contained in this Section 6.14 shall prohibit the Sellers or any
of their respective Affiliates from providing products or services that it or
they provide on the Closing Date, or reasonably related products or services
that it or they may provide following the Closing Date, in each case in the
ordinary course of business through Parent’s Dealer Services, Employer Services
or Brokerage Services Groups. Due to the irreparable injury and damage to the
Buyer that could result from a violation of this Section 6.14, the Buyer
shall be entitled to seek injunctive relief against the violation by the Sellers
of this Section 6.14 in addition to any remedy otherwise available to the
Buyer. If any court of competent jurisdiction shall hold that the restrictions
contained in this Section 6.14 are unreasonable, such restrictions shall
be deemed to be reduced, but only to the extent necessary, in the opinion of
such court, to make them reasonable. ADP Canada and the Buyer or its assignee
shall enter into a joint election to have proposed subsection 56.4(7) of the
Income Tax Act (Canada) apply to the above provision.

 

6.15         Transition
Services. Between the date hereof and the Closing Date, the Buyer and
Parent shall negotiate in good faith the scope and terms of any additional
services that may need to be provided pursuant to the Transition Services
Agreement and shall amend the form of Transition Services Agreement to reflect
any such additional services to which they may agree.

 

6.16         Reorganization.
Subject to Section 2.7, between the date hereof and the Closing Date, the
Sellers shall, and shall cause their Affiliates to, take or cause to be taken
all action and to do or cause to be done all things reasonably necessary,
proper or advisable under applicable Laws to consummate and make effective,
immediately prior to the Closing, the Reorganization. The Sellers agree to
consult with the Buyer on the timing, structure, procedural steps and all other
matters relating to the Reorganization. As used in this Agreement, the “Reorganization” means the actions
described in 

 

63

 

Section 6.16 of the Seller Disclosure Schedule. If and to the
extent that any portion of the Reorganization (other than the Czech
Reorganization, which is the subject of Section 2.7) has not occurred on
or prior to the Closing, and the transfer of the applicable securities, assets
or liabilities (the “Delayed Transfer Assets”)
as contemplated by the Reorganization has not been consummated, then,
notwithstanding anything to the contrary set forth herein, the Buyer or its
Affiliate shall thereafter, directly or indirectly, hold the Delayed Transfer
Assets for the use and benefit of Parent. In addition, the Buyer shall take or
cause to be taken such other actions as may be reasonably requested by Parent
in order to place Parent in the same position as if such portion of the
Reorganization had been consummated on or prior to the Closing, so that all the
benefits and burdens relating to the Delayed Transfer Assets, including
possession, use, risk of loss, potential for gain, and dominion, control and
command over the Delayed Transfer Assets, are to inure from and after the
Closing to Parent. Following the Closing, Parent shall be entitled to, and
shall be responsible for, the management of any Delayed Transfer Assets not
transferred pursuant to the Reorganization and the parties hereto agree to use
commercially reasonable efforts to cooperate and coordinate with respect
thereto. Parent shall, and shall cause its Affiliates to, use commercially
reasonable efforts to consummate such portion of the Reorganization as promptly
as practicable thereafter, and the Buyer shall, and shall cause its Affiliates
to, use commercially reasonable efforts to cooperate with Parent and its
Affiliates in consummating such portion of the Reorganization. Parent shall
indemnify the Buyer and its Affiliates for all liabilities, losses, damages,
claims, costs, expenses, interest, awards, judgments and penalties (including
reasonable fees for outside counsel, accountants and other outside consultants)
suffered or incurred by them and arising from (i) the ownership and
operation of the Delayed Transfer Assets from and after the Closing,
(ii) the performance of, or failure to perform, Parent’s obligations under
this Section 6.16, except in the case of any of the Buyer’s or its
Affiliates’ gross negligence or willful misconduct or (iii) any liabilities or
obligations of or related to ADP Wilco (Australia) Pty., Czech Audatex (other
than the Czech Business Assets) or the two employees of Audatex Slovakia s.r.o.
to be transferred to an Affiliate of Parent pursuant to the Reorganization.

 

6.17         Financing.

 

(a)           The Buyer shall use its
commercially reasonable efforts to arrange the Debt Financing on the terms and
conditions described in the Commitment Letter, including using its commercially
reasonable efforts to (i) negotiate definitive agreements with respect
thereto on terms and conditions contained therein, (ii) satisfy on a
timely basis all conditions applicable to the Buyer in such definitive
agreements that are within its control and (iii) consummate the Debt
Financing at the Closing. The Buyer shall obtain the Equity Financing upon
satisfaction or waiver of (A) the conditions to Closing set forth in
Article VII and Article VIII and (B) the conditions to the
funding of the Debt Financing (or any alternative financing) (in the case of
clauses (A) and (B), other than those conditions that by their nature are
to be satisfied at the Closing, but subject to the satisfaction or waiver of
those conditions). In the event any portion of the Debt Financing becomes
unavailable on the terms and conditions contemplated in the Commitment Letter,
the Buyer shall use its commercially reasonable efforts to arrange to 

 

64

 

obtain any such
portion from alternative sources on terms that are not materially less
beneficial to the Buyer and the Transferred Companies as promptly as
practicable following the occurrence of such event. The Buyer shall give the
Sellers notice of any material breach by any party to the Commitment Letter or
any termination of the Commitment Letter promptly upon becoming aware of any
such breach or termination. The Buyer shall keep the Sellers informed on a
reasonably current basis in reasonable detail of the status of its efforts to
arrange the Financing. The Buyer shall not permit any amendment or modification
to be made to, or any waiver of any provision or remedy under, the Equity
Funding Letter without obtaining the Sellers’ prior written consent (not to be
unreasonably withheld or delayed). For the avoidance of doubt, if the Debt
Financing (or any alternative financing) has not been obtained, the Buyer shall
continue to be obligated to consummate the Transaction on the terms
contemplated by this Agreement and subject only to the satisfaction or waiver
of the conditions set forth in Article VII and to the Buyer’s rights under
Section 11.1, regardless of whether the Buyer has complied with all of its
other obligations under this Agreement (including its obligations under this
Section 6.17(a)).

 

(b)           The Sellers agree to
provide, and shall cause the Companies and Subsidiaries and the Sellers’, the
Companies’ and Subsidiaries’ respective officers, employees, representatives,
and advisors, including legal and accounting, of the Sellers, the Companies and
Subsidiaries to provide, all reasonable cooperation in connection with the
arrangement of the Debt Financing as may be reasonably requested by the Buyer (provided,
that such requested cooperation does not (i) unreasonably interfere with
the ongoing operations of any Seller, any Company and any Subsidiary,
(ii) cause any representation or warranty in this Agreement to be
breached, (iii) cause any condition to Closing set forth in
Article VII to fail to be satisfied or otherwise cause any breach of this
Agreement or any material agreement to which any Seller or any Company or
Subsidiary is a party or (iv) involve any binding commitment by any Seller
or any Company or Subsidiary which commitment is not conditioned on the Closing
and does not terminate without liability to the Sellers, any Company and any
Subsidiary upon the termination of this Agreement), including
(A) participation in meetings, presentations, road shows, drafting
sessions, due diligence sessions and sessions with rating agencies, (B) upon
request, furnishing the Buyer and its financing sources with financial and
other pertinent information regarding the Transferred Companies and Foreign
Assets as may be reasonably requested by the Buyer, (C) assisting the
Buyer and its financing sources in the preparation of offering documents,
materials for rating agency presentations, private placement memoranda, bank
information memoranda, prospectuses and similar documents required in
connection with the financing, (D) executing and delivering at Closing any
pledge and security documents, other definitive financing documents, or other
certificates, legal opinions or documents as may be reasonably requested by the
Buyer (including using commercially reasonable efforts to facilitate any
amendments to the articles of incorporation, bylaws or other organizational
documents of any Transferred Company or Subsidiary reasonably requested by the
Buyer in connection with such security or other financing documents),
(E) furnishing the Buyer and its financing sources with financial and
other pertinent information regarding the Companies and the Subsidiaries as may
be reasonably requested by the Buyer, including all financial statements and
financial data 

 

65

 

of the type required
by Regulation S-X and Regulation S-K under the Securities Act and of
type and form customarily included in private placements under Rule 144A
of the Securities Act, to consummate the offerings of debt securities
contemplated by the Debt Commitment Letters at the time during the Company’s
fiscal year such offerings will be made, (F) using commercially reasonable
efforts to obtain management representation letters, accountants’ comfort and
reliance letters and opinions, legal opinions, surveys and title insurance as
reasonably requested by the Buyer, and (G) reasonably cooperating with the
marketing efforts of the Buyer and its financing sources for any debt raised by
the Buyer to complete the Transaction; provided, that none of the
Sellers, any Company or any Subsidiary shall be required to pay any commitment
or other similar fee or incur any other liability in connection with the Debt
Financing, except, in the case of the Transferred Companies and Subsidiaries,
following the Closing. The Buyer shall, promptly upon request by the Sellers,
reimburse the Sellers, as the case may be, for all reasonable out-of-pocket
costs incurred by any Seller, any Company or any Subsidiary in connection with
such cooperation. The Buyer shall indemnify and hold harmless each of the
Sellers, Transferred Companies and Subsidiaries and their respective
representatives for and against any and all liabilities, losses, damages,
claims, costs, expenses, interest, awards, judgments and penalties (including
reasonable fees for outside counsel, accountants and other outside consultants)
suffered or incurred by them in connection with the arrangement of the Debt
Financing and any information utilized in connection therewith (other than
historical information relating to the Sellers, any Company or any Subsidiary),
except in the case of any Seller’s, any Transferred Company’s or Subsidiary’s
or any of their respective representatives’ gross negligence or willful
misconduct. Notwithstanding anything in this Agreement to the contrary, the condition
set forth in Section 7.1, as it applies to the Sellers’ obligations under
this Section 6.17(b), shall be deemed satisfied unless (i) the Debt
Financing (or any alternative financing) has not been obtained primarily as a
result of the Sellers’ material breach of their obligations under this
Section 6.17(b) and (ii) such material breach has had a material and
adverse effect on the Buyer’s ability to obtain the Debt Financing (or any
alternative financing).

 

(c)           All non-public or
otherwise confidential information regarding any Seller, any Company, any
Subsidiary, the Foreign Assets or the Business obtained by the Buyer or its
representatives pursuant to Section 6.17(b) shall be kept confidential in
accordance with the Non-Disclosure Agreement.

 

6.18         Insurance.
Prior to the Closing, Parent shall use commercially reasonable efforts to cause
any carriers who have underwritten insurance policies of Parent which provide
insurance coverage to the Business to continue to make coverage available to
the Business following the Closing Date for claims arising out of occurrences
prior to the Closing Date. Parent acknowledges the right of the Buyer for
access to the benefit of such insurance for such pre-Closing occurrences. Following
the Closing Date, Parent and the Buyer shall cooperate with and assist the
other in issuing notices of claims under such insurance policies, presenting
such claims for payment and collecting insurance proceeds related thereto.

 

6.19         ABZ
Share Purchase Agreement Obligations. Following the Closing, for the
benefit of the Shareholder Clients (as
defined in the ABZ Share Purchase 

 

66

 

Agreement), the Buyer shall, and shall
cause its Affiliates to, ensure that the Group (as defined in the ABZ Share Purchase Agreement) shall perform its
obligations under Clauses 15.1 and 15.2 of the ABZ Share Purchase Agreement, a
true and correct copy of which has previously been made available to the Buyer.
Parent represents and warrants that Clauses 15.1 and 15.2 of the ABZ Share
Purchase Agreement set forth the services, products and service levels required
to be provided to the Shareholder Clients pursuant to the ABZ Share Purchase
Agreement. The Buyer shall indemnify the Sellers and their respective
Affiliates for all liabilities, losses, damages, claims, costs, expenses,
interest, awards, judgments and penalties (including reasonable fees for
outside counsel, accountants and other outside consultants) suffered or
incurred by them and arising from the Group’s performance of, or failure to
perform, its obligations under Clauses 15.1 and 15.2 of the ABZ Share Purchase
Agreement on or after the Closing Date.

 

6.20         Notification
of Certain Matters. The Sellers shall give prompt notice to the Buyer, and
the Buyer shall give prompt notice to the Sellers, upon obtaining knowledge
thereof, of (a) the occurrence, or failure to occur, of any event that
such party believes would be likely to cause any of its representations or
warranties contained in this Agreement to be untrue or inaccurate at any time
from the date of this Agreement to the Closing Date, the effect of which would
cause either of the conditions to Closing set forth in Sections 7.1 or 8.1
not to be satisfied and (b) any material failure by it to comply with or
satisfy any covenant, or agreement to be complied with or satisfied by it under
this Agreement; provided, however, that failure to give such
notice shall not constitute a waiver of any defense that may be validly
asserted.

 

6.21         Exclusivity.
Until this Agreement is terminated by its terms, Parent shall not, and shall
cause its Affiliates to not, and none of Parent or any of its Affiliates shall
cause or permit any officer, director, representative, or agent or any other
Person acting on behalf of Parent or any of its Affiliates to,
(a) solicit, initiate or encourage the submission of any proposal or offer
from any Person (including any of them) relating to any (i) liquidation,
winding-up, dissolution or recapitalization of, (ii) merger or
consolidation with or into, (iii) acquisition or purchase of assets of or
any equity interest in or (iv) similar transaction or business combination
involving, in the case of clauses (i)-(iv), the Business, the Companies or
the Subsidiaries or (b) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in,
or facilitate in any other manner any effort or attempt by any Person to do or
seek any of the foregoing. Parent shall, and shall cause its Affiliates to, discontinue
immediately any negotiations or discussion with respect to any of the
foregoing. Until this Agreement is terminated by its terms, Parent shall notify
the Buyer immediately if any Person makes any proposal, offer, inquiry or
contact with respect to any of the foregoing and shall provide the Buyer with
the terms thereof.

 

6.22         Director
Resignations. Prior to the Closing, except as otherwise specified in
writing by the Buyer to Parent prior to the Closing Date, Parent shall
(a) deliver to the Buyer evidence of the resignation, effective as of the
Closing, of all of the directors of the Transferred Companies and Subsidiaries
included in the ACS Entities that Parent or its Affiliates have the right to
remove (without loss or liability), appoint or 

 

67

 

designate, and (b) use commercially reasonable efforts to deliver
to the Buyer evidence of the resignation, effective as of the Closing, of all
of the directors of the Transferred Companies and Subsidiaries included in the
ABZ Entities and the Audatex Entities that Parent or its Affiliates have the
right to remove (without loss or liability), appoint or designate.

 

6.23         Informex
Matter. Parent shall use commercially reasonable efforts to facilitate a
meeting with each of the two entities that are currently shareholders of
Informex S.A. identified in Section 6.23 of the Seller Disclosure Schedule to
discuss the draft letter agreement referred to in Section 6.23 of the Seller
Disclosure Schedule (the “2006 Informex Letter”),
and Parent shall assist the Buyer in obtaining agreement on such 2006 Informex
Letter by such shareholders; provided, that the condition set forth in
Section 7.1, as it applies to Parent’s obligations under this
Section 6.23, shall be deemed satisfied notwithstanding the failure of
Parent to cause such meeting(s) to occur or to obtain agreement of such
shareholders to the 2006 Informex Letter on or prior to the Closing Date.

 

6.24         ChoiceParts.
On or after the Closing, to the extent owned, held or licensed by Parent or its
Affiliate, Parent shall, or shall cause such Affiliate to, in each case to the
extent reasonably possible and subject to any limitations in Parent’s or its
Affiliate’s rights, grant to the Buyer (i) co-ownership in the patents,
copyrights and trade secrets in the ChoiceParts, LLC Advanced Parts Locator
that, in each case, relate to the Business, if any (the “Advanced
Parts Locator IP”), for use in connection with the Business or
(ii) a non-exclusive, royalty-free, perpetual license to use the Advanced Parts
Locator IP in connection with the Business. With respect to the dissolution of
ChoiceParts, LLC, Parent shall not, or shall cause its applicable Affiliate not
to, agree that any of the other members of ChoiceParts, LLC will receive
greater rights in the Advanced Parts Locator IP than Parent or such Affiliate.

 

6.25         Overdraft
Facilities. Parent will cause all of the overdraft facilities identified in
Section 6.25 of the Seller Disclosure Schedule to be discharged, terminated or
cancelled with respect to the Transferred Companies and Subsidiaries on or
prior to the Closing.

 

ARTICLE VII

CONDITIONS PRECEDENT TO THE OBLIGATION OF THE BUYER TO CLOSE

 

The obligation of the Buyer to enter into and complete
the Closing is subject to the fulfillment on or prior to the Closing Date of
the following conditions, any one or more of which may be waived by the Buyer:

 

7.1           Representations
and Covenants. The representations and warranties of the Sellers contained
in Article III and Article IV to the extent qualified by “materiality”
or by reference to a “Business Material Adverse Effect” shall be true and
correct in all respects and, to the extent not so qualified, shall be true and
correct in all 

 

68

 

material respects, in each case on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date, except for
those representations and warranties that are expressly limited by their terms
to dates or times other than the Closing Date, which representations and
warranties need only be true and correct as aforesaid as of such other dates or
times. Notwithstanding the foregoing, the condition contained in this
Section 7.1 shall be deemed satisfied if the failure of any of the
representations and warranties referenced in this Section 7.1 (without
regard to any qualification as to “materiality” or “Business Material Adverse
Effect”) to be true and correct do not, and would not be reasonable likely to,
have a Business Material Adverse Effect. The Sellers shall have performed and
complied in all material respects with all covenants and agreements required by
this Agreement to be performed or complied with by the Sellers on or prior to
the Closing Date. The Sellers shall have delivered to the Buyer a certificate,
dated the date of the Closing and signed by an officer of Parent, to the
foregoing effect.

 

7.2           HSR
Act Filing, Other Approvals and Requirements

 

(a)           Any Person required in
connection with the transactions contemplated hereby to file a notification and
report form in compliance with the HSR Act shall have filed such form and the
applicable waiting period with respect to each such form (including any
extension thereof by reason of a request for additional information) shall have
expired or been terminated.

 

(b)           Any approvals or
waiting periods required under each of the Foreign Antitrust Laws identified in
Section 7.2(b) of the Seller Disclosure Schedule in connection with
the transactions contemplated hereby shall have been obtained or expired, as
the case may be.

 

7.3           No
Orders. No Order shall have been issued or Litigation initiated by any
Governmental Body to restrain or prohibit, or to obtain damages, or to impose
material conditions on the Business that would have a Business Material Adverse
Effect, or a discovery order in respect of, this Agreement, any other
Transaction Document or the consummation of the transactions contemplated
hereby.

 

7.4           Other
Transaction Documents.

 

(a)           Each of the Foreign
Asset Sellers and Parent shall have executed an agreement substantially in the
form attached hereto as Exhibit A (collectively, the “Asset Transfer Agreements”), and
the transactions contemplated by the Asset Transfer Agreements shall have
occurred contemporaneously with the Closing.

 

(b)           Except as set forth in
Section 2.7(a), each of the Foreign Share Sellers and Parent shall have
executed an agreement substantially in the form attached hereto as Exhibit B
(collectively, the “Foreign Share Transfer
Agreements”), and the transactions contemplated by the Foreign
Share Transfer Agreements shall have occurred contemporaneously with the
Closing.

 

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(c)           The Transition Services
Agreement, substantially in the form attached hereto as Exhibit C
(the “Transition Services Agreement”)
shall have been executed by Parent.

 

(d)           The Parent Shared
Facilities Agreement, substantially in the form attached hereto as Exhibit D
(the “Parent Shared Facilities Agreement”)
shall have been executed by Parent.

 

(e)           The Buyer Shared
Facilities Agreement, substantially in the form attached hereto as Exhibit E
(the “Buyer Shared Facilities Agreement”)
shall have been executed by Parent.

 

7.5           Reorganization.
Except as set forth in Section 2.7(a), the Reorganization shall have been
consummated, and Parent shall have provided the Buyer with evidence of the
consummation thereof.

 

ARTICLE VIII

CONDITIONS PRECEDENT

TO THE OBLIGATION OF THE SELLERS TO CLOSE

 

The obligation of the Sellers to enter into and complete
the Closing is subject to the fulfillment on or prior to the Closing Date of
the following conditions, any one or more of which may be waived by the
Sellers:

 

8.1           Representations
and Covenants. The representations and warranties of the Buyer contained in
Article V (other than the representations and warranties contained in
Section 5.6) to the extent qualified by materiality shall be true and
correct in all respects and, to the extent not so qualified, shall be true and
correct in all material respects, in each case on and as of the Closing Date
with the same force and effect as though made on and as of the Closing Date,
except for those representations and warranties that are expressly limited by
their terms to dates or times other than the Closing Date, which
representations or warranties need only be true and correct as aforesaid as of
such other dates or times. The Buyer shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by the Buyer on or prior to the Closing Date. The
Buyer shall have delivered to Parent a certificate, dated the date of the
Closing and signed by an officer of the Buyer, to the foregoing effect.

 

8.2           HSR
Act Filing, Other Approvals and Requirements

 

(a)           Any Person required in
connection with the transactions contemplated hereby to file a notification and
report form in compliance with the HSR Act shall have filed such form and the
applicable waiting period with respect to each such form (including any
extension thereof by reason of a request for additional information) shall have
expired or been terminated.

 

70

 

(b)           Any approvals or
waiting periods required under each of the Foreign Antitrust Laws identified in
Section 7.2(b) of the Seller Disclosure Schedule in connection with
the transactions contemplated hereby shall have been obtained or expired, as
the case may be.

 

8.3           No
Orders. No Order shall have been issued or Litigation initiated by any
Governmental Body to restrain or prohibit, or to obtain damages or to impose
material conditions on the Business that would have a Business Material Adverse
Effect, or a discovery order in respect of, this Agreement, any other
Transaction Document or the consummation of the transactions contemplated
hereby.

 

8.4           Other
Transaction Documents.

 

(a)           The Asset Transfer
Agreements shall have been executed by the Buyer, and the transactions
contemplated by the Asset Transfer Agreements shall have occurred
contemporaneously with the Closing.

 

(b)           Except as set forth in
Section 2.7(a), the Foreign Share Transfer Agreements shall have been
executed by the Buyer, and the transactions contemplated by the Foreign Share
Transfer Agreements shall have occurred contemporaneously with the Closing.

 

(c)           The Transition Services
Agreement shall have been executed by the Buyer.

 

(d)           The Parent Shared
Facilities Agreement shall have been executed by the Buyer.

 

(e)           The Buyer Shared
Facilities Agreement shall have been executed by the Buyer.

 

ARTICLE IX

SURVIVAL; INDEMNIFICATION

 

9.1           Indemnification
by Sellers.

 

(a)           From and after the
Closing, subject to the express provisions of this Article IX and except
as otherwise provided in Article X, the Sellers shall jointly and severally
indemnify, defend and hold harmless the Buyer, its Affiliates and the
respective officers, directors, employees and agents of the Buyer and its
Affiliates (collectively, the “Buyer
Indemnified Parties”) from and against all claims, liabilities,
losses, damages and costs (including the reasonable fees and expenses of
counsel), fines and penalties, whether or not involving a Third Party Claim
(collectively, “Losses”)
incurred or suffered by a Buyer Indemnified Party relating to or arising out
of:

 

(i)            any breach of
(A) any representation or warranty made by the Sellers in Article III
or Article IV of this Agreement or in any 

 

71

 

certificate delivered by a Seller to the Buyer with
respect thereto in connection with the Closing, other than the representations
and warranties contained in Section 3.1, 3.2(a), 3.2(b)(i), 3.3, 4.4(a),
4.11(a), 4.11(b)(i) or 4.16 (it being understood that, for purposes of
this Article IX, such representations and warranties, other than the
representations and warranties contained in Sections 4.5(a), 4.5(b),
4.5(c), 4.6, 4.12(a)(iii), 4.12(a)(iv), 4.15 and the first sentence of 4.17(a),
will be interpreted without giving effect to any qualifications or limitations
as to “materiality” or “Business Material Adverse Effect”) or (B) the
covenant of the Sellers set forth in Section 6.20; provided, that
with respect to any Losses attributable to the inaccuracy of any representation
or warranty made by the Sellers in Section 4.7 (a “Tax Loss”),
the Sellers shall indemnify the Buyer only to the extent such inaccuracy gives
rise to a Tax Loss in a Pre-Closing Taxable Period;

 

(ii)           any breach of any
representation or warranty made by the Sellers in Section 3.1, 3.2(a),
3.2(b)(i), 3.3, 4.4(a), 4.11(a), 4.11(b)(i) or 4.16 of this Agreement or
in any certificate delivered by a Seller to the Buyer with respect thereto in
connection with the Closing (it being understood that, for purposes of this
Article IX, such representations and warranties will be interpreted
without giving effect to any qualifications or limitations as to “materiality”
or “Business Material Adverse Effect”);

 

(iii)          any breach by any of the
Sellers of any of their covenants under this Agreement, any Foreign Share
Transfer Agreement or any Asset Transfer Agreement;

 

(iv)          without duplication, any
Income Taxes relating to periods prior to the Closing;

 

(v)           the Excluded Matters;

 

(vi)          Title IV of ERISA or
Section 412 or 4971 of the Code; or

 

(vii)         the U.K. Pension Plan
(including any Losses incurred by or in respect of the U.K. Company through its
involvement with the U.K. Pension Plan including any amount of which is now or
which might or will at some future date be treated as a debt of the U.K.
Company for the purpose of section 75 of the Pensions Act 1995 as a result of
that section applying to the U.K. Pension Plan or (except in relation to any
Loss which arises following a breach by the Buyer of its covenant set forth in
Section 6.10(c)(iii)(2) not to make any application or request or other
submission of any kind in relation to the U.K. Pensions Plan to the U.K.
Pensions Regulator without Parent’s prior written request or consent) in
connection with any other applicable legislation coming into force after the
date of this Agreement and whether amended, consolidated or re-enacted or on
any other basis and whether before or after the date of this Agreement) or any
Losses imposed by the U.K. Pensions Regulator on the U.K. 

 

72

 

Company or its Affiliates under a contribution notice
issued under section 38 of the U.K. Pensions Act 2004 or a financial support
direction issued under section 43 of the U.K. Pensions Act 2004, in relation to
the U.K. Pension Plan.

 

(b)           Subject to the express
provisions of this Article IX, and notwithstanding any provision to the
contrary, none of the Sellers shall have any liability under
Section 9.1(a)(i):

 

(i)            in connection with any
claim unless and until the aggregate liability that all such Persons would, but
for this Section 9.1(b)(i), have in connection with such claim for any
breach, exceeds an amount equal to $75,000; provided, however,
that related items or items having a common root cause or origin shall be
aggregated for purposes of this clause (i) and that individual items not
meeting the threshold set forth in this clause (i) shall nevertheless be
taken into account for purposes of clause (ii) below;

 

(ii)           unless and until the
aggregate liability of all such Persons under Section 9.1(a)(i) and
Section 9.1(a)(vi) would, but for this Section 9.1(b)(ii), have
exceeded on a cumulative basis an amount equal to $12,500,000; and

 

(iii)          to the extent the
aggregate liability of all such Persons under Section 9.1(a)(i),
Section 9.1(a)(v) and Section 9.1(a)(vi), taken together, would, but
for this Section 9.1(b)(iii), have exceeded $50,000,000;

 

provided,
however, that Sections 9.1(b)(i), (ii) and (iii) shall
not limit the liability of the Sellers under Section 9.1(a)(i) with
respect to Tax Losses attributable to Income Taxes arising in a Pre-Closing
Taxable Period.

 

9.2           Indemnification
by the Buyer.

 

(a)           From and after the
Closing, subject to the express provisions of this Article IX and except
as otherwise provided in Article X, the Buyer shall indemnify, defend and
hold harmless the Sellers and their respective Affiliates and the respective
officers, directors, employees and agents of the Sellers and their respective
Affiliates (collectively, the “Seller
Indemnified Parties”) from and against all Losses incurred or
suffered by a Seller Indemnified Party, relating to or arising out of:

 

(i)            any breach of
(A) any representation or warranty made by the Buyer in this Agreement or
in any certificate delivered by the Buyer to a Seller with respect thereto in
connection with the Closing (it being understood that, for purposes of this
Article IX, such representations and warranties will be interpreted
without giving effect to any qualifications or limitations as to “materiality”)
or (B) the covenant of the Buyer set forth in Section 6.20;

 

73

 

(ii)           any breach by the Buyer
of any of its covenants under this Agreement, any Foreign Share Transfer
Agreement or any Asset Transfer Agreement;

 

(iii)          the operation of the
Business from and after the Closing; provided, that this clause
(iii) shall not limit or qualify the scope of the indemnification in
Section 9.1(a); or

 

(iv)          any and all Tax Losses
arising out of Taxes of the Transferred Companies or Subsidiaries for periods
after the Closing.

 

(b)           Subject to the express
provisions of this Article IX, and notwithstanding any provision to the
contrary:

 

(i)            the Buyer shall have
no liability under Section 9.2(a)(i) in connection with any claim
unless and until the aggregate liability that the Buyer would, but for this
Section 9.2(b)(i), have in connection with such claim for any inaccuracy
or breach, exceeds an amount equal to $75,000; provided, however,
that related items or items having a common root cause or origin shall be
aggregated for purposes of this clause (i) and that individual items not
meeting the threshold set forth in this clause (i) shall nevertheless be
taken into account for purposes of clause (ii) below;

 

(ii)           the Buyer shall have no
liability under Section 9.2(a)(i) unless and until the aggregate
liability of the Buyer under Section 9.2(a)(i) would, but for this
Section 9.2(b)(ii), have exceeded on a cumulative basis an amount equal to
$12,500,000; and

 

(iii)          the aggregate liability
of the Buyer under Section 9.2(a)(i) shall not exceed $50,000,000.

 

9.3           Procedures
for Indemnification. Except as otherwise provided in Article X, which
shall be the exclusive provision governing Contests and Tax Claims:

 

(a)           If any suit, action,
proceeding, investigation, claim or demand shall be brought or asserted by any
third Person (including any Governmental Body) (a “Third Party Claim”) against any Person
in respect of which indemnity may be sought pursuant to Section 9.1 or
Section 9.2, such Person (the “Indemnified
Person”) shall notify the Person against whom such indemnity may
be sought (the “Indemnifying Person”)
in writing in reasonable detail of the Third Party Claim within 30 days after
receipt by such Indemnified Person of formal notice of such Third Party Claim,
and, thereafter, such Indemnified Person shall promptly forward to the
Indemnifying Person a copy of all notices and documents (including court
papers) received by the Indemnified Person pursuant to the Third Party Claim; provided,
however, that the failure to give such notification within 30 days after
such receipt of formal notice and the failure to forward a copy of such notices
and documents shall not affect the obligations of the Indemnifying Person or
the rights of the Indemnified Person 

 

74

 

except to the
extent the Indemnifying Person has actually been prejudiced as a result of such
failure.

 

(b)           Upon the receipt by the
Indemnifying Person of notice of a Third Party Claim, the Indemnifying Person
may electto assume the defense of
such Third Party Claim by promptly delivering a notice to the Indemnified
Person of the assumption of such defense and to retain defense counsel to
represent the Indemnified Person; provided, that if (i) the Third
Party Claim primarily seeks injunctive relief that would materially and
adversely affect the Indemnified Party or (ii) the Loss involves a claim
of criminal conduct against the Indemnified Party, the Indemnifying Party may
not assume the defense of any such claim. If the Indemnifying Person so elects
to assume the defense of a Third Party Claim, then (i) the Indemnified
Person may participate in such defense and employ counsel, at such Indemnified
Person’s expense, separate from the reasonably acceptable counsel employed by
the Indemnifying Person, but so long as it diligently pursues such defense, the
Indemnifying Person shall control such defense, shall be empowered to make any
settlement with respect to such Third Party Claim in the manner set forth in
Section 9.3(c) and shall not be liable to such Indemnified Person for the
fees and expenses of the separate counsel retained by such Indemnified Person,
and (ii) the Indemnified Person and any other Indemnified Persons will
reasonably cooperate with the Indemnifying Person in such defense, including by
providing, upon the reasonable request of the Indemnifying Person, books,
records and all other reasonably necessary items and by making available
employees on a mutually convenient basis.

 

(c)           No Indemnifying Person
shall, without the prior written consent of the Indemnified Person, which shall
not unreasonably be withheld, effect any settlement of any pending or
threatened Third Party Claim in respect of which such Indemnified Person is a
party, or is subject, and in respect of which indemnity is sought hereunder by
such Indemnified Person, if such settlement provides for any relief other than
the payment of money damages for which such Indemnified Person is indemnified
in full.

 

(d)           The Indemnifying Person
shall, at any time, be entitled to elect to no longer defend a Third Party
Claim; provided, that the Indemnifying Person shall reasonably assist in
transitioning the defense of such Third Party Claim back to the Indemnified
Person and that the Indemnifying Person shall not be entitled to make a claim
for reimbursement of expenses incurred in connection with its assumption of the
defense of such Third Party Claim.

 

(e)           In the event any
Indemnified Person should have a claim against the Indemnifying Person under
this Article IX that does not involve a Third Party Claim being asserted
against such Indemnified Person, the Indemnified Person shall deliver written
notice of such claim, specifying with particularity and detail the nature of
such claim. If the Indemnifying Person objects to such claim in a timely
manner, the Indemnified Person and the Indemnifying Person shall proceed in
good faith to resolve such dispute and, upon the failure to resolve such
dispute, the parties may pursue remedies in accordance with Section 12.1.

 

75

 

(f)            Notwithstanding
anything herein to the contrary, no party to this Agreement shall be obligated
to make indemnification payments under Section 9.1(a)(i), 9.1(a)(ii),
9.1(a)(iii), 9.1(a)(iv), 9.1(a)(v) or 9.2(a)(i) unless the
Indemnified Person shall have delivered to the Indemnifying Person written
notification pursuant to Sections 9.1 and 9.2, on or before:

 

(i)            October 1, 2007, with
respect to any such indemnification claim under (A) Section 9.1(a)(i),
9.1(a)(ii) or 9.2(a)(i), as the case may be, that arises from a breach of any
representation or warranty set forth in this Agreement, except for those set
forth in Sections 3.1, 3.2(a), 3.3 and 4.4(a), and (B) Section 9.1(a)(iii)
or 9.2(a)(ii), as the case may be, that arises from a breach of any covenants
or other agreements of the Sellers or the Buyer that were to be performed prior
to the Closing Date;

 

(ii)           the date of expiration
of the applicable statute of limitations with respect to any such
indemnification claim under Section 9.1(a)(iv) for Income Taxes relating to
periods prior to the Closing;

 

(iii)          at any time with respect
to any such indemnification claim under Section 9.1(a)(ii) that arises from a
breach of any representation or warranty set forth in Section 3.1, 3.2(a),
3.3 or 4.4(a); and

 

(iv)          the fifth anniversary of
the Closing Date with respect to any such indemnification claim under Section
9.1(a)(v) that arises from any of the Excluded Matters.

 

9.4          Sole
Remedy; No Duplication; Other Provisions.

 

(a)           Any liability for
indemnification hereunder shall be determined without duplication of recovery
by reason of the state of facts giving rise to such liability constituting a
breach of more than one representation, warranty, covenant or agreement.

 

(b)           From and after the
Closing, except as provided in Article X, the exclusive remedy of each
party in connection with this Agreement and the transactions contemplated
hereby shall be those provided in this Article IX, except that this
exclusive remedy for damages shall not preclude a Person from bringing an
action for fraud claims or injunctive relief as provided in Section 6.14. The
Buyer shall, and shall cause the Transferred Companies and Subsidiaries to,
take all reasonable steps to mitigate any Losses upon and after becoming aware
of any event which could reasonably be expected to give rise to any Losses with
respect to which indemnification may be requested hereunder.

 

(c)           The amount of the
Indemnifying Person’s liability under this Agreement shall be determined
(i) net of any specific reserves, liability accruals or other provisions
for such Losses on the face of the combined balance sheet of the Business as of
the Closing Date or amounts that otherwise constitute the Restructuring 

 

76

 

Amount, the
Pension Amount, the Additional Adjustment Amount or the ABZ Retention Amount,
provided that such limitation shall not apply in the case of any liability for
which a Seller has agreed to be liable or to retain or assume pursuant to this
Agreement, and (ii) after taking into account any applicable insurance
proceeds (net of reasonably expected costs of recovery, retroactive or
prospective premium adjustments, and chargebacks related to such insurance
claim) received or reasonably expected to be received by the Indemnified Party.
Any and all payments or offsets pursuant to this Agreement shall be deemed for
all purposes to be adjustments to the Purchase Price. None of the Buyer
Indemnified Parties shall be entitled to recover any Losses relating to any matter
arising under one provision of this Agreement to the extent that such Buyer
Indemnified Party has already recovered the full amount of such Buyer
Indemnified Party’s Losses with respect to such matter pursuant to other
provisions of this Agreement.

 

(d)           Without limiting the
generality of the foregoing, and notwithstanding any provisions to the
contrary, the operation of the adjustment to the Purchase Price pursuant to
Section 2.4 is an exclusive remedy (except in the case of fraud) (i) in
respect of the assets, liabilities, Indebtedness and obligations and related
items, in each case, to the extent included in the final determination of the
Final Net Working Capital or otherwise in the Restructuring Amount, the Pension
Amount, the Additional Adjustment Amount or the ABZ Retention Amount, and (ii)
in respect of any matter forming the basis for a reduction in the Net Working
Capital requested by the Buyer (whether or not included in the final
determination of the Final Net Working Capital) in its calculation of the Final
Net Working Capital, and no Buyer Indemnified Party shall be entitled to any
additional recourse in respect thereof, whether arising from a breach of a
representation or warranty or otherwise.

 

(e)           None of the Seller
Indemnified Parties shall have any claims or rights to contribution or
indemnity from any of the Transferred Companies or the Subsidiaries or any of
their respective officers, directors, partners or managers with respect to any
amounts paid by them pursuant to this Agreement.

 

(f)            To the extent that an
Indemnified Person recognizes a Tax benefit with respect to a Loss that is the
subject of an indemnification payment pursuant to this Article IX, the
Indemnifying Person shall be entitled to such Tax benefit and the Indemnified
Person shall pay to the Indemnifying Person the amount of such Tax benefit (but
not in excess of the indemnification payment or payments actually received from
the Indemnifying Person with respect to such Loss) at such time or times as and
to the extent that the Indemnified Person or any Affiliate thereof actually
realizes such benefit through a refund of Tax or reduction in the actual amount
of Taxes which such Indemnified Person or Affiliate would otherwise have had to
pay if such Loss had not been incurred, calculated by computing the amount of
Taxes before and after inclusion of any Tax items attributable to such Loss for
which indemnification was made and treating such Tax items as the last items
claimed for any taxable year; provided, that any such Tax benefit shall
be reduced by the amount of Tax detriment (including the tax effect of any item
of income or gain or other item (including any decrease in Tax basis) which
increases any amounts paid or payable with respect to Taxes, any reduction in
the amount of any refund of Tax which would otherwise have been available, the
utilization of any net operating 

 

77

 

loss or capital
loss or the utilization of any Tax credits or other Tax attributes) that the
Indemnified Party suffered as a result of any indemnification payment pursuant
to this Article IX. For the avoidance of doubt, the Buyer will provide to
Parent such information as Parent may reasonably request from time to time in
order to verify whether the Buyer has or has not recognized Tax benefits
described in this Section 9.4(f).

 

ARTICLE X

TAX MATTERS

 

10.1        Preparation
of Tax Returns and Payment of Taxes.

 

(a)           Except as otherwise
provided herein, Parent shall prepare (or cause to be prepared) and, timely file
all Tax Returns (“Pre Closing Tax Returns”)
of each of the Companies and Subsidiaries with respect to any taxable period
ending on or before the Closing Date (“Pre Closing Taxable Period”)
and, except as otherwise provided herein, shall pay (or cause to be paid) any
Taxes due in respect of such Pre Closing Tax Returns. The Buyer shall not have
the right to review any Pre-Closing Tax Returns. Such Tax Returns shall be
prepared on a basis consistent with those prepared for prior taxable periods
unless a different treatment is permitted or required by applicable Law. In the
case of Pre Closing Tax Returns that are filed after the Closing Date, other
than consolidated, combined or unitary Tax Returns that include one or more of
the Transferred Companies or Subsidiaries together with Parent or an Affiliate
of Parent other than the Transferred Companies or Subsidiaries, Parent shall
(A) provide the Buyer with such prepared Tax Returns in sufficient time
for the Buyer to timely file, or cause to be timely filed, such Tax Returns
(and the Buyer shall timely file, or cause to be timely filed, such Tax
Returns), but in any event at least two Business Days prior to the due date for
such Tax Return, and (B) provide to the Buyer at such time an amount equal
to the excess of (x) the Tax liability shown on such Tax Return over
(y) the sum of (1) all estimated or similar Tax payments made or
caused to be made by Parent on or prior to the Closing Date with respect to
such Tax and, without duplication, all credits arising on or prior to the
Closing Date with respect to such Tax, (2) any prior payments with respect
to such Tax made or caused to be made by Parent pursuant to this
Article X, (3) any amounts collected or withheld and held by or on
behalf of Parent, the Transferred Companies or Subsidiaries as of the Closing
Date pending remittance to Tax authorities in respect of such Tax and (4) any
portion of such Tax liability arising as a result of any actions taken by the
Transferred Companies or Subsidiaries on or after the Closing Date that are
outside the ordinary course of business unless explicitly provided for in this
Agreement. The Buyer shall cause the Transferred Companies and Subsidiaries and
their respective Affiliates to take such actions as Parent may reasonably request
in connection with the filing of refund claims and amended Tax Returns with
respect to Pre-Closing Taxable Periods; provided, that in the case of
refund claims and amended Income Tax Returns relating to any of the Foreign
Companies, such claims and amended Income Tax Returns do not cause a material
detriment to the Buyer or any of the Transferred Companies or Subsidiaries for
taxable periods or partial taxable periods after the Closing Date.

 

78

 

(b)           The Buyer shall prepare
(or cause to be prepared) and file or cause to be filed when due all Tax
Returns not otherwise the responsibility of Parent pursuant to
Section 10.1(a) and shall remit any Taxes due in respect of such Tax
Returns. With respect to any Tax Returns that are required to be filed by or
with respect to any of the Transferred Companies or Subsidiaries for Straddle
Periods (collectively, the “Straddle Tax Returns”),
such Straddle Tax Returns shall be prepared in a manner consistent with past practice
(unless otherwise required by Law), and Parent shall be responsible for the
Taxes of the Transferred Companies and Subsidiaries attributable to Pre Closing
Taxable Periods (as determined in accordance with Section 10.2),
excluding, however, Taxes arising from the transactions entered into on the
Closing Date but after the Closing, other than transactions in the ordinary
course of business or specifically contemplated by this Agreement (“Pre Closing Taxes”) due in
respect of such Straddle Tax Returns. The Buyer shall notify Parent of any
amounts due from Parent in respect of any Straddle Tax Return no later than 30
Business Days prior to the date on which such Straddle Tax Return is due, and
Parent shall remit such payment to the Buyer no later than five Business Days
prior to the date such Straddle Tax Return is due. The Buyer shall deliver any
Straddle Tax Return to Parent for its review at least 30 Business Days prior to
the date on which such Straddle Tax Return is required to be filed. If Parent
disputes any item on such Straddle Tax Return, it shall notify the Buyer of
such disputed item (or items) and the basis for its objection within 15
Business Days after Parent’s receipt of such Straddle Tax Return. The parties
shall act in good faith to resolve any such dispute prior to the date on which
the relevant Straddle Tax Return is required to be filed. If the parties cannot
resolve any disputed item within 10 Business Days after the Buyer receives
notice of such dispute, the item in question shall be resolved by an
independent accounting firm mutually acceptable to Parent and the Buyer. The
fees and expenses of such accounting firm shall be borne equally by Parent and
the Buyer. In the case of Straddle Tax Returns, Parent shall provide to the
Buyer at such time an amount equal to the excess of (A) the Tax liability
shown on such Straddle Tax Return and attributable to Pre-Closing Taxable
Periods over (B) the sum of (w) all estimated or similar Tax payments made
or caused to be made by Parent on or prior to the Closing Date with respect to
such Tax and, without duplication, all credits arising on or prior to the
Closing Date with respect to such Tax, (x) any prior payments with respect
to such Tax made or caused to be made by Parent pursuant to this Article X,
(y) any amounts collected or withheld and held by or on behalf of Parent,
the Transferred Companies or Subsidiaries as of the Closing Date pending
remittance to Tax authorities in respect of such Tax and (z) any portion
of such Tax liability arising as a result of any actions taken by the Companies
or Subsidiaries on or after the Closing Date that are outside the ordinary
course of business unless explicitly provided for in this Agreement.

 

(c)           Tax Returns relating to
the Foreign Companies for periods ending on or before the Closing Date shall be
prepared by the Foreign Companies. If such Tax Returns are filed prior to the
Closing Date, they shall be governed by Section 10.1(a). If they are filed
after the Closing Date, they shall be governed by the procedures in
Section 10.1(b) relating to Pre-Closing Taxes arising in Straddle Periods

 

(d)           With respect to any
taxable year of any of the Transferred Companies or Subsidiaries for which
Parent is required to file a Pre-Closing Tax Return 

 

79

 

pursuant to
Section 10.1(a), the Buyer shall promptly cause such Transferred Company
or Subsidiary to prepare and provide to Parent, at the Buyer’s sole cost and
expense, a package of tax information materials (the “Tax Package”),
which shall be completed in accordance with the past practice of such
Transferred Company or Subsidiary, including past practice as to providing the
information, schedules and work papers and as to the method of computation of
separate taxable income or other relevant measure of income. The Buyer shall
cause the Tax Package for the portion of the taxable period ending on the
Closing Date to be delivered to Parent within 120 days after the Closing Date.

 

(e)           Except as required by
law, neither the Buyer nor any of its Affiliates shall (or shall cause or
permit any of the Transferred Companies or Subsidiaries to) amend, refile or
otherwise modify any Tax Return relating in whole or in part to any of the
Companies or Subsidiaries with respect to any Pre Closing Taxable Period (or
with respect to any Straddle Period) without the written consent of Parent,
which consent may be withheld in the reasonable discretion of Parent.

 

(f)            The Buyer and Parent
shall preserve and cause to be preserved all information, returns, books,
records and documents relating to any liabilities for Taxes with respect to a
taxable period until the later of the expiration of all applicable statutes of
limitation and extensions thereof, or the conclusion of all litigation with respect
to Taxes for such period.

 

10.2        Straddle
Periods. For purposes of this Agreement, in the case of any Taxes of any of
the Companies or Subsidiaries that are payable with respect to any Tax period
that begins before and ends after the Closing Date (a “Straddle
Period”), the portion of any such Taxes that constitutes Pre
Closing Taxes shall be deemed equal to the amount that would be payable if the
Tax year or period ended on the Closing Date. For purposes of the preceding
sentence, any exemption, deduction, credit or other item (including the effect
of any graduated rates of tax) that is calculated on an annual basis shall be
allocated to the portion of the Straddle Period ending on the Closing Date on a
pro rata basis determined by multiplying the total amount of such item
allocated to the Straddle Period times a fraction, the numerator of which is
the number of calendar days in the portion of the Straddle Period ending on the
Closing Date and the denominator of which is the number of calendar days in the
entire Straddle Period. All determinations necessary to give effect to the
foregoing allocations shall be made in a manner consistent with past practice
of the relevant Companies and Subsidiaries. The parties hereto will, to the
extent permitted by applicable Law, elect with the relevant taxing authority to
treat a portion of any Straddle Period as a short taxable period ending as of
the close of business on the Closing Date.

 

10.3        Refunds.

 

(a)           Except as provided in
Section 10.3(b), each Company and Subsidiary will be entitled to any
refunds (including any interest received thereon) in respect of any federal,
state, provincial, local or foreign Tax liability of such Company or
Subsidiary.

 

80

 

(b)           Parent shall be
entitled to any refunds received for federal, state, provincial, local, foreign
or other Taxes paid for Pre Closing Taxable Periods with respect to any of the
Companies or Subsidiaries, along with any interest paid by the relevant taxing
authority with respect thereto but net of any tax or other cost to any of the
Companies or Transferred Subsidiaries of receiving the refund, in each case
other than refunds resulting from the carryback of net operating losses or
other tax attributes from tax periods or portions thereof that are not Pre
Closing Taxable Periods, and any such refunds (including interest but net of
any tax or other cost as described earlier in this sentence), to which Parent
is entitled that are received by any of the Companies or Transferred
Subsidiaries or any Affiliate thereof after the Closing Date, whether by
offset, credit, receipt of payment or otherwise, shall be caused by the Buyer
to be paid promptly to Parent.

 

10.4        Conveyance
Taxes. The Buyer and Parent agree to share equally all sales, goods and
services, harmonized sales, consumption, use, value added, transfer, stamp,
registration, documentary, excise, real property transfer or gains, or similar
Taxes incurred as a result of the transactions contemplated in this Agreement
(collectively, “Conveyance Taxes”),
and Parent and the Buyer agree to jointly file all required change of ownership
and similar statements. Notwithstanding the foregoing sentence, Conveyance
Taxes shall not include any goods and services tax or harmonized sales tax
payable under the Excise Tax Act (Canada) or Quebec sales tax payable under an
Act respecting the Quebec sales tax, for which the Buyer or its permitted
assignee is entitled to claim either input tax credits or input tax refunds. For
the avoidance of doubt, (i) the Buyer shall pay to Parent at the Closing
one-half of any Conveyance Taxes required to be collected by any Foreign Share
Seller or Foreign Asset Seller and remitted by such Foreign Share Seller or
Foreign Asset Seller to any applicable taxing authority, in accordance with
Section 2.3(a), and (ii) the Buyer’s payment to Parent at the Closing
shall be reduced by one-half of any Conveyance Taxes required to be paid after
the Closing to any applicable taxing authority by the Buyer or any of the Transferred
Companies or Subsidiaries. Parent and the Buyer shall cooperate with each other
to minimize applicable Conveyance Taxes in a manner that is mutually agreeable
and in compliance with applicable Law, and shall to that extent execute such
documents, agreements, applications, instruments or other forms as reasonably
required, and as shall permit any such Conveyance Taxes to be assessed and paid
in accordance with applicable Law.

 

10.5        Section 338(h)(10)
Election Taxes. Parent shall pay, or shall cause to be paid, any Taxes
attributable to the making of the Section 338(h)(10) Election as provided
in Section 2.6.

 

10.6        Termination
of Tax Allocation Agreements. Any and all Tax allocation or sharing
agreements or other agreements or arrangements relating to Tax matters between
any of the Transferred Companies or Subsidiaries, on the one hand, and Parent
or any of its other Affiliates, on the other hand, shall be terminated as to
such Transferred Company or Subsidiary as of the Closing Date and, from and after
the Closing Date, none of the Transferred Companies or Subsidiaries shall be
obligated to 

 

81

 

make any payment pursuant to any such agreement or arrangement for any
past or future period.

 

10.7        Tax
Indemnification Procedures.

 

(a)           After the Closing, each
party to this Agreement (whether the Buyer or any Seller, as the case may be)
shall promptly notify the other parties in writing of any demand, claim or
notice of the commencement of an audit received by such party from any taxing
authority or any other Person with respect to Taxes for which such other
parties may be liable pursuant to Article IX; provided, however,
that a failure to give such notice will not affect such party’s rights to
indemnification under Article IX, except to the extent that such other
parties are actually prejudiced thereby. Such notice shall contain factual
information (to the extent known) describing the asserted Tax liability and
shall include copies of the relevant portion of any notice or other document
received from any taxing authority or any other Person in respect of any such
asserted Tax liability.

 

(b)           Payment by an
indemnitor of any amount due to an indemnitee in respect of Tax Losses under
Article IX shall be made within ten days following written notice by the
indemnitee that payment of such amounts to the appropriate taxing authority or
other applicable third party is due by the indemnitee, provided that the
indemnitor shall not be required to make any payment earlier than five Business
Days before it is due to the appropriate taxing authority or applicable third
party. In the case of a Tax that is contested in accordance with the provisions
of Section 10.8, payment of such contested Tax will not be considered due
earlier than the date a “final determination” to such effect is made by such
taxing authority or a court of competent jurisdiction. For this purpose, a “final
determination” shall mean a settlement, compromise, or other agreement with the
relevant taxing authority, whether contained in an IRS Form 870 or other
comparable form, or otherwise, or such procedurally later event, such as a
closing agreement with the relevant taxing authority, and agreement contained
in an IRS Form 870 D or other comparable form, an agreement that constitutes a “determination”
under Section 1313(a)(4) of the Code, a deficiency notice with respect to
which the period for filing a petition with the Tax Court or the relevant
state, local or foreign tribunal has expired or a decision of any court of
competent jurisdiction that is not subject to appeal or as to which the time
for appeal has expired. In the event the indemnitee receives a refund of the
tax after payment, the indemnitee shall promptly pay such refund to the
indemnitor (including interest but net of tax or other cost to the indemnitee
or any Affiliate thereof of receiving such interest).

 

(c)           All amounts required to
be paid in respect of Tax Losses pursuant to Article IX shall be paid
promptly in immediately available funds by wire transfer to a bank account
designated by the indemnified party.

 

(d)           Any payments required
in respect of Tax Losses pursuant to Article IX that are not made within
the time period specified in this Article X shall bear interest at a rate
and in the manner provided in the Code for interest on underpayments of federal
income tax.

 

82

 

10.8        Tax
Audits and Contests; Cooperation.

 

(a)           Subject to
Section 10.8(b), Parent shall control the conduct, through counsel of its
own choosing at its own expense, of any audit, claim for refund, or
administrative or judicial proceeding involving any asserted Tax liability or
refund with respect to any of the Companies or Subsidiaries (any such audit,
claim for refund, or proceeding relating to an asserted Tax liability referred
to herein as a “Contest”)
relating to Pre Closing Taxable Periods, and the Buyer shall not have any right
to participate in such Contest; provided, however, that no
settlement or other disposition of any claim for Tax which would materially
adversely affect the Buyer or any of the Transferred Companies or Subsidiaries
or any Affiliate thereof shall be agreed to without the Buyer’s prior written
consent, which consent shall not be unreasonably withheld or delayed.

 

(b)           In the case of any
Contest with respect to a Straddle Period Return the Buyer and Parent shall
jointly represent their interests in any Contest, shall employ counsel of their
mutual choice and shall cooperate with the other and the other’s representatives
in a prompt and timely manner in connection with any Contest. The parties shall
mutually agree on any settlement or other disposition of the Contest; provided,
that Parent or the Buyer shall have the sole right to settle or dispose of any
issue that relates solely to the portion of the Straddle period ending on the
Closing Date or the portion of the Straddle Period ending after the Closing
Date, respectively. In the event the Buyer and Parent are unable to agree
regarding any aspect of the conduct of any such Contest, the decision shall be
made by the counsel employed to pursue such Contest on the basis of counsel’s
good faith judgment regarding the course of action that would produce the
overall lowest present value of Tax and litigation cost to the parties. Any
such Contest expenses shall be shall be borne by the Buyer and Parent in the
same proportion as such related Taxes are borne by the Buyer and Parent in
accordance with Section 10.1(b).

 

(c)           Except as provided in
Sections 10.8(a) and (b), the Buyer shall have the right to control the
conduct of any Contest in its sole discretion with respect to any other Tax
matter.

 

(d)           Except as provided in
Section 10.12, Parent and the Buyer agree to furnish or cause to be
furnished to each other, upon request, as promptly as practicable, such
information (including access to books and records) and assistance relating to
the Companies and Subsidiaries as is reasonably requested for the filing of any
Tax Returns and the preparation, prosecution, defense or conduct of any Contest.
Parent and the Buyer shall reasonably cooperate with each other in the conduct
of any Contest or other proceeding involving or otherwise relating to any of
the Companies or Subsidiaries (or their income or assets) with respect to any
Tax and each shall execute and deliver such powers of attorney and other
documents as are necessary to carry out the intent of this Section 10.8(d).
Any information obtained under this Section 10.8(d) shall be kept
confidential, except as may be otherwise necessary in connection with the
filing of Tax Returns or in the conduct of a Contest or other Tax proceeding.

 

83

 

(e)           The Buyer shall cause
each of the Transferred Companies to (a) use its commercially reasonable
efforts to properly retain and maintain the tax and accounting records of such
Transferred Company and its Subsidiaries that relate to Pre Closing Taxable
Periods for ten years following the Closing Date and shall thereafter provide
Parent with written notice prior to any destruction, abandonment or disposition
of all or any portions of such records, (b) transfer such records to
Parent upon its written request prior to any such destruction, abandonment or
disposition and (c) allow Parent and its Affiliates and their respective
agents and representatives, at times and dates reasonably and mutually
acceptable to the parties, to from time to time inspect and review such records
as Parent may deem necessary or appropriate; provided, however,
that in all cases, such activities are to be conducted by Parent during normal
business hours and at Parent’s sole expense. Any information obtained under
this Section 10.8(e) shall be kept confidential, except as may be
otherwise necessary in connection with the filing of Tax Returns or in the
conduct of a Contest or other Tax proceeding.

 

(f)            Parent shall, and
shall cause each of its Affiliates to (a) use its commercially reasonable
efforts to properly retain and maintain the tax and accounting records of such
Transferred Company and its Subsidiaries for ten years following the Closing
Date and shall thereafter provide the Buyer with written notice prior to any
destruction, abandonment or disposition of all or any portions of such records,
(b) transfer such records to the Buyer upon its written request prior to
any such destruction, abandonment or disposition and (c) allow the Buyer
and its Affiliates and their respective agents and representatives, at times
and dates reasonably and mutually acceptable to the parties, to from time to
time inspect and review such records as the Buyer may deem necessary or
appropriate; provided, however, that in all cases, such
activities are to be conducted by the Buyer during normal business hours and at
Buyer’s sole expense. Any information obtained under this Section 10.8(f)
shall be kept confidential, except as may be otherwise necessary in connection
with the filing of Tax Returns or in the conduct of a Contest or other Tax
proceeding.

 

10.9        Tax
Treatment of Indemnity Payments. It is the intention of the parties to
treat any indemnity payment made under this Agreement as an adjustment to the
Purchase Price for all federal, state, provincial, local and foreign Tax
purposes, and the parties agree to file their Tax Returns accordingly

 

10.10      Carrybacks. Following the Closing Date,
the Buyer and each Transferred Company shall, to the extent permissible, waive
the right to carryback any Income Tax losses, credits or similar items
attributable to such Transferred Company and from a taxable period (or portion
thereof) beginning after the Closing Date to a Pre Closing Taxable Period.

 

10.11      Tax Elections. The Buyer shall not,
without the prior consent of Parent (which may, in its sole and absolute
discretion, withhold such consent), make, or cause to permit to be made, any
Tax election, or adopt or change any method of accounting, or undertake any
other extraordinary action effective on or after the Closing Date, that would
adversely affect any Seller or any of the Companies or Subsidiaries with
respect to any taxable period or portions thereof ending on or prior to the
Closing Date. 

 

84

 

For the avoidance of doubt, Parent and the Buyer shall not make, and
shall cause their Affiliates not to make, with respect to the transactions
contemplated by this Agreement, any election under Treasury Regulations
Section 1.1502-76(b)(2) or any similar provision of state or local Tax
law.

 

10.12      No Access to Consolidated Returns. Notwithstanding
anything in this Agreement to the contrary, none of the Buyer or any of its
Affiliates shall be entitled to any information relating to, or a copy of, any
consolidated, combined, affiliated or unitary Tax Return which includes any
Seller.

 

10.13      Advance Pricing Agreement.

 

(a)           The Buyer understands
and agrees that Parent and certain of its Affiliates are engaged in ongoing
negotiations with U.S. and Canadian taxing authorities with respect to a
bilateral advance pricing agreement (the “APA”)
relating to intercompany transactions, including the use of software and other
technology, provision of processing services, and general and administrative
services, by and between (i) Parent, CSG and certain of their U.S.
Affiliates (the “U.S. APA Parties”)
and (ii) ADP Canada Co. and certain of its Canadian Affiliates (the “Canadian APA Parties”). Parent
represents, and the Buyer acknowledges, that estimated royalty payments have
been and will continue to be made by the Canadian APA Parties to the U.S. APA
Parties until such time as the APA is resolved by the appropriate U.S. and
Canadian taxing authorities. The parties hereto acknowledge that such
resolution is expected to occur subsequent to the Closing Date. The Buyer
covenants that, if necessary to resolve the APA, it will execute the APA or
cause the APA to be executed by or on behalf of any Transferred Companies that
are U.S. APA Parties.

 

(b)           If at the time of the
final resolution of the APA, and assuming such resolution occurs subsequent to
the Closing Date, it is determined by the relevant taxing authorities that the
payments (including estimated payments) previously made by the Canadian APA
Parties to the U.S. APA Parties with respect to periods or portions thereof
ending on or prior to the Closing are less than the amounts owed by the
Canadian APA Parties to the U.S. APA Parties for such periods, and such taxing
authorities require that additional payments be made, the Canadian APA Parties
shall remit such payments to Parent or its Affiliates (other than any
Transferred Company), and neither the Buyer nor its Affiliates shall have any
right to receive any such payments.

 

(c)           If at the time of the
final resolution of the APA, and assuming such resolution occurs subsequent to
the Closing Date, it is determined by the relevant taxing authorities that the
payments (including estimated payments) previously made by the Canadian APA
Parties to the U.S. APA Parties with respect to periods or portions thereof
ending on or prior to the Closing are in excess of the amounts owed by the Canadian
APA Parties to the U.S. APA Parties for such periods, and such taxing
authorities require that payment be made in respect of any such excess, Parent
will make or cause to be made such payments to the Canadian APA Parties and
shall indemnify the Buyer for any liability associated with making such
payments.

 

85

 

(d)           Parent shall be
entitled to any refunds from U.S. and Canadian taxing authorities, as the case
may be, attributable to the final resolution of the APA, including any payment
made pursuant to this Section 10.13, with respect to periods or portions
thereof ending on or prior to the Closing. If the Buyer or any of its
Affiliates receives any such refund, it shall promptly remit such amount to
Parent.

 

(e)           For the avoidance of
doubt, and notwithstanding anything to the contrary herein (including
Section 10.8), at no time shall the Buyer, and at no time subsequent to
the Closing shall any Transferred Company, have any right to participate in any
Contest or other proceeding relating to the negotiation of the APA. The Buyer
agrees to reasonably cooperate with Parent in the conduct of any proceeding
relating to the APA, and to provide such information (including access to books
and records) as is reasonably requested by Parent for the conduct of such
proceedings.

 

(f)            Parent shall use
commercially reasonable efforts to cause the Buyer and its Affiliates not to be
legally bound by the terms of the APA for any Post-Closing Taxable Period. If
Parent is unable to achieve such result, Parent shall be entitled to enter into
the final APA without the consent of the Buyer and the Buyer will comply with
its obligations under this Section 10.13; provided, that Parent shall
indemnify the Buyer for any net increase in the aggregate U.S. and Canadian Tax
liability of the Buyer and its Affiliates as a direct result of the terms and
methodology of the final APA being materially different, in the aggregate, from
those reflected in the document entitled “Transfer Pricing Analysis CS”
provided to the Buyer in connection with this transaction.

 

ARTICLE XI

TERMINATION OF AGREEMENT

 

11.1        Termination.
This Agreement may not be terminated prior to the Closing, except as follows:

 

(a)           by mutual agreement of
the Buyer and the Sellers;

 

(b)           at the election of the
Buyer or the Sellers, upon prior written notice, if any one or more of the
conditions set forth in Article VII or Article VIII, respectively
(other than those that by their nature are to be satisfied at the Closing), has
not been satisfied or waived as of the close of business on June 30, 2006
(the “Outside Date”); provided, however,
that the party whose conduct substantially results in the failure of such
condition to be fulfilled may not be the terminating party;

 

(c)           at the election of the
Buyer or the Sellers upon prior written notice, if any court of competent
jurisdiction or other Governmental Body shall have issued a final order, decree
or ruling or taken any other final action restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby, and such
order, decree, ruling or other action is or shall have become non-appealable;

 

86

 

(d)           at the election of the
Sellers or the Buyer upon prior written notice, if there has been an inaccuracy
in or breach by the other of any representation or warranty, or breach of any
covenant or agreement contained in this Agreement or any other agreement,
document or certificate delivered pursuant hereto such that the conditions set
forth in Section 7.1 or 8.1, as applicable, would be incapable of being
satisfied by the Outside Date (in the case of a breach of a covenant or
agreement, provided, such breach has not been cured within 20 days
after notice thereof); provided, however, that the breaching
party may not be the terminating party;

 

(e)           at the election of the
Sellers, upon prior written notice, if, solely as a result of the action or
inaction by the Buyer, the Closing shall not have occurred on or prior to the
date that is two Business Days following the date on which the Closing is
scheduled to occur pursuant to Section 2.2; provided, however,
that the Sellers may not elect to so terminate if the Sellers are then in
material breach of any of their respective obligations under this Agreement; or

 

(f)            at the election of the
Buyer, upon prior written notice, if, solely as a result of the action or
inaction by Parent or its Affiliates, the Closing shall not have occurred on or
prior to the date that is two Business Days following the date on which the
Closing is scheduled to occur pursuant to Section 2.2; provided, however,
that the Buyer may not elect to so terminate if the Buyer is then in material
breach of any of its obligations under this Agreement.

 

11.2        Survival
After Termination. If this Agreement terminates pursuant to
Section 11.1 and the transactions contemplated hereby are not consummated:

 

(a)           this Agreement and the
other Transaction Documents shall become null and void and have no further
force or effect, except that any such termination shall be without prejudice to
the rights of any party on account of intentional or willful breach or
violation of the representations, warranties, covenants or agreements of
another party under this Agreement;

 

(b)           notwithstanding
anything in this Agreement to the contrary, the provisions of Section 6.2,
Section 6.3, Section 6.4, this Section 11.2 and Article XII
shall survive any termination of this Agreement; and

 

(c)           the Buyer shall
promptly return to Parent all books and records and all other information
furnished by the Sellers, their agents, employees or representatives (including
all copies, if any) and shall not use or disclose the information contained in
such books and records for any purpose or make such information available to
any other Person; provided, that the Buyer may retain copies of such
information to the extent required for the enforcement of its rights hereunder
and the defense of any action related hereto.

 

87

 

ARTICLE XII

MISCELLANEOUS

 

12.1        Consent
to Jurisdiction; Service of Process; Waiver of Jury Trial.

 

(a)           Any claim arising out
of or relating to this Agreement or the transactions contemplated hereby may be
instituted in any federal court in the State of New York, and each party hereto
agrees not to assert, by way of motion, as a defense or otherwise, in any such
claim, that it is not subject personally to the jurisdiction of such court,
that the claim is brought in an inconvenient forum, that the venue of the claim
is improper or that this Agreement or the subject matter hereof may not be
enforced in or by such court. Each party hereto further irrevocably submits to
the jurisdiction of such court in any such claim.

 

(b)           Any and all service of
process and any other notice in any such claim shall be effective against any
party hereto if given personally or by registered or certified mail, return
receipt requested, or by any other means of mail that requires a signed
receipt, postage prepaid, mailed to such party as herein provided. Nothing
herein contained shall be deemed to affect the right of any party hereto to
serve process in any manner permitted by Law or to commence legal proceedings
or otherwise proceed against any other party hereto in any other jurisdiction.

 

(c)           EACH PARTY
HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY.

 

(d)           EACH PARTY
HERETO CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE WAIVER IN SECTION 12.1(c), (ii) SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (iii) SUCH PARTY MAKES SUCH
WAIVER VOLUNTARILY AND (iv) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS, AGREEMENTS AND
CERTIFICATIONS IN SECTION 12.1(c) AND THIS SECTION 12.1(d).

 

12.2        Notices.
Any notice or other communication required or permitted hereunder shall be in
writing and shall be deemed to have been duly given (x) on the day of
delivery if delivered in person, or if delivered by facsimile or other
electronic transmission upon confirmation of receipt, (y) on the first
Business Day following the date of dispatch if delivered by a nationally
recognized express courier service or (z) on 

 

88

 

the tenth Business Day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated by notice given in accordance with this
Section 12.2 by the party to receive such notice:

 

(a)           if to the Buyer, to:

 

Solera, Inc. 

12230 El Camino Real, Suite 200

San Diego, CA  92130

Attention:  Chief Executive Officer

Facsimile:  (858) 812-3011

 

with copies to:

GTCR Golder Rauner, L.L.C.

6100 Sears Tower

Chicago, Illinois  60606-6402

Attention:  Philip A. Canfield

                Craig
A. Bondy

Facsimile:  (312) 382-2201

 

and

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, IL 60601

Attention:  Stephen L. Ritchie, P.C.

Facsimile:  (312) 861-2200

 

(b)           if to the Sellers, to:

 

Automatic Data
Processing, Inc.

One ADP Boulevard

Roseland, NJ  07068-1728

Attention:  President and Chief Operating
Officer

Facsimile:  (973) 974-3371

 

with a copy to:

 

Automatic Data
Processing, Inc.

One ADP Boulevard

Roseland, NJ  07068-1728

Attention:  General Counsel

Facsimile:  (973) 974-3324

 

89

 

and with a copy to:

 

Paul, Weiss, Rifkind,
Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY  10019-6064

Attention:  Douglas A. Cifu

Facsimile:  (212) 757-3990

 

12.3        Entire
Agreement. This Agreement, together with the Non-Disclosure Agreement, the
other Transaction Documents and any other collateral agreements executed in
connection with the consummation of the transactions contemplated hereby and
thereby, contain the entire agreement among the parties hereto with respect to
the Transaction and supersede all prior agreements, written or oral, with
respect thereto.

 

12.4        Waivers
and Amendments. This Agreement and each of the Foreign Transfer Agreements
(when executed and delivered) may be amended, superseded, canceled, renewed or
extended, and the terms hereof and thereof may be waived, only by a written
instrument signed by the Buyer and the Sellers or, in the case of a waiver, by
the party waiving compliance. No delay on the part of any party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party hereto of any such
right, power or privilege, nor any single or partial exercise of any such
right, power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege.

 

12.5        Governing
Law. This Agreement shall be governed by and construed in accordance with
the Laws of the State of New York without regard to any conflict of laws rules
thereof that might indicate the application of the Laws of any other
jurisdiction.

 

12.6        Binding
Effect; Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. This
Agreement is not assignable by any party hereto without the prior written
consent of the other parties; provided, that the Buyer may assign any of
its rights under this Agreement to any Affiliate of the Buyer (it being
understood that no such assignment shall effect a novation or otherwise relieve
the Buyer of any of its obligations hereunder); provided, further,
that the Buyer may assign all or any of its rights pursuant to this Agreement,
including its rights to indemnification, to any lender as collateral security.

 

12.7        Usage.
All pronouns and any variations thereof refer to the masculine, feminine or
neuter, singular or plural, as the context may require. All terms defined in
this Agreement in their singular or plural forms have correlative meanings when
used herein in their plural or singular forms, respectively. Unless otherwise
expressly provided, the words “include,” “includes” and “including” do not
limit the preceding words or terms and shall be deemed to be followed by the
words “without limitation.”  Unless
otherwise expressly provided, monetary amounts are in U.S. dollars. The phrases
“made available to the Buyer” or “furnished to the Buyer” or similar phrases 

 

90

 

as used in this Agreement will mean that the subject documents were posted
to the “Project ONYX” data room at www.intralinks.com prior to, and remain
accessible to the Buyer on, the date that is two days prior to the date of this
Agreement.

 

12.8        Articles
and Sections. All references herein to Articles and Sections shall be
deemed references to such parts of this Agreement, unless the context shall
otherwise require. The Article and Section headings in this Agreement
are for reference only and shall not affect the interpretation of this
Agreement.

 

12.9        Interpretation.
The parties hereto acknowledge and agree that (a) each party hereto and
its counsel reviewed and negotiated the terms and provisions of this Agreement
and have contributed to its revision, (b) the rule of construction to
the effect that any ambiguities are resolved against the drafting party shall
not be employed in the interpretation of this Agreement and (c) the terms
and provisions of this Agreement shall be construed fairly as to all parties
hereto, regardless of which party was generally responsible for the preparation
of this Agreement. Any statute, regulation, or other Law defined or referred to
herein (or in any agreement or instrument that is referred to herein) means
such statute, regulation or other Law as, from time to time, may be amended,
modified or supplemented, including (in the case of statutes) by succession of
comparable successor statutes. References to a Person also refer to its
predecessors and permitted successors and assigns.

 

12.10      Severability of Provisions. If any
provision or any portion of any provision of this Agreement shall be held
invalid or unenforceable, the remaining portion of such provision and the
remaining provisions of this Agreement shall not be affected thereby. If the
application of any provision or any portion of any provision of this Agreement
to any Person or circumstance shall be held invalid or unenforceable, the
application of such provision or portion of such provision to Persons or
circumstances other than those as to which it is held invalid or unenforceable
shall not be affected thereby.

 

12.11      Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts together
shall constitute one and the same instrument. Each counterpart may consist of a
number of copies hereof each signed by less than all, but together signed by
all, of the parties hereto.

 

12.12      No Personal Liability. This Agreement (and
each agreement, certificate and instrument delivered pursuant hereto) shall not
create or be deemed to create or permit any personal liability or obligation on
the part of any officer, director, employee, agent, representative or investor
of any party hereto.

 

12.13      No Third Party Beneficiaries. Except as
otherwise provided in Article IX, no provision of this Agreement is
intended to, or shall, confer any third party beneficiary or other rights or
remedies upon any Person other than the parties hereto. Without limiting the
generality of the foregoing, no provision of this Agreement shall create any
third party beneficiary rights in any employee or former employee of any of 

 

91

 

the Companies or Subsidiaries (including any beneficiary or dependent
thereof) in respect of continued employment by any of the Companies or
Subsidiaries or otherwise.

 

12.14      Specific Performance. The Sellers
acknowledge that the Business is unique and recognize and affirm that in the
event of a breach of this Agreement by the Sellers, money damages would be
inadequate and the Buyer would have no adequate remedy at law. Accordingly, the
Sellers agree that the Buyer shall have the right, in addition to any other
rights and remedies existing in its favor, to enforce its rights and the obligations
hereunder of the Sellers not only by an action or actions for damages but also
by an action or actions for specific performance, injunctive and/or other
equitable relief.

 

[Remainder of page
intentionally left blank]

 

92

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.

 

 

	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  SOLERA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tony Aquila

  	
   

  
	
   

  	
   

  	
  Name: Tony Aquila

  	
   

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARENT:

  
	
   

  	
   

  
	
   

  	
  AUTOMATIC DATA PROCESSING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James B. Benson

  	
   

  
	
   

  	
   

  	
  Name: James B. Benson

  	
   

  
	
   

  	
   

  	
  Title: Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADP ATLANTIC:

  
	
   

  	
   

  
	
   

  	
  ADP ATLANTIC INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James B. Benson

  	
   

  
	
   

  	
   

  	
  Name: James B. Benson

  	
   

  
	
   

  	
   

  	
  Title: Chairman of the Board

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADP NEDERLAND:

  
	
   

  	
   

  
	
   

  	
  ADP NEDERLAND B.V.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ H.J.M. Brockhoff

  	
   

  
	
   

  	
   

  	
  Name: H.J.M. Brockhoff

  	
   

  
	
   

  	
   

  	
  Title: General Manager

  	
   

  
									

 

Transaction Agreement

 

 

	
   

  	
  ADP INTERNATIONAL:

  
	
   

  	
   

  
	
   

  	
  ADP INTERNATIONAL B.V.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ H.J.M. Brockhoff

  	
   

  
	
   

  	
   

  	
  Name: H.J.M. Brockhoff

  	
   

  
	
   

  	
   

  	
  Title: General Manager

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADP CANADA:

  
	
   

  	
   

  
	
   

  	
  ADP CANADA CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James B. Benson

  	
   

  
	
   

  	
   

  	
  Name: James B. Benson

  	
   

  
	
   

  	
   

  	
  Title: President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADP INDIA:

  
	
   

  	
   

  
	
   

  	
  ADP PRIVATE LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steve Penrose

  	
   

  
	
   

  	
   

  	
  Name: Steve Penrose

  	
   

  
	
   

  	
   

  	
  Title: Director

  	
   

  
						

 

Transaction AgreementExhibit 10.2

 

AMENDMENT NO. 1 TO TRANSACTION AGREEMENT

 

This
Amendment No. 1, dated as of March 28, 2006 (this “Amendment”), amends
the Transaction Agreement, dated as of February 8, 2006 (the “Transaction Agreement”),
by and among Solera, Inc., Automatic Data Processing, Inc., ADP Atlantic Inc.,
ADP Nederland B.V., ADP International B.V., ADP Canada Co. and ADP Private Limited.
Capitalized terms used but not otherwise defined herein shall have the respective
meanings ascribed to such terms in the Transaction Agreement.

 

WHEREAS,
the parties hereto desire to amend the Transaction Agreement  pursuant
to Section 12.4 thereof to permit the transfer of a 99% ownership interest  (obchodní podíl) in Czech Shelfco from ADP Nederland to
Audatex Holding GmbH  (Switzerland)
and a 1% ownership interest (obchodní podíl)
in Czech Shelfco from ADP  Nederland to Audatex GmbH (Swiss) in connection with the Reorganization, and to  eliminate
the provisions of the Transaction Agreement relating to the transfer of the  ownership
interest (obchodní podíl) in Czech Shelfco
directly to the Buyer.

 

NOW,
THEREFORE, in consideration of the foregoing, the parties hereto,  intending
to be legally bound, hereby agree as follows:

 

1.               Transaction Agreement. The Transaction Agreement is hereby amended  as
follows:

 

(a)                                  The definition of “Net Working Capital” in
Section 1.1(a) shall be  amended to delete the following phrase from
the final proviso thereof:

 

“(a)            the Czech Business Assets shall be deemed to
be held by the  Audatex Entities, whether or not the Czech
Reorganization has occurred prior to 
the Closing or Czech Shelfco is
retained by Parent at the Closing pursuant to  Section
2.7 and (b)”.

 

(b)                                 Section 1.1(b) shall be amended to delete the
following rows:

 

	
  “Czech Business Assets

  	
   

  	
  2.7(a

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Czech
  Closing

  	
   

  	
  2.7(c

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Czech
  Closing Date

  	
   

  	
  2.7(c

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Czech
  Consents and Notices

  	
   

  	
  2.7(a

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Czech
  Reorganization

  	
   

  	
  2.7(a

  	
  )”

  

 

(c)                                  Section 2.1(c) shall be amended to delete the
phrase “except as set  forth in Section 2.7(a),”.

 

(d)                                 Section 2.3(d) shall be amended to delete the
phrase “except as set  forth in Section
2.7(a),”.

 

(e)                                  Section 2.7 shall be deleted it its entirety.

 

 

(f)                                    Section 4.20(b) shall be amended to delete
the phrase “(including  the Czech
Business Assets)”.

 

(g)                                 Section 6.1(b) shall be amended to delete the
phrase “and, if  applicable, Section 2.7”.

 

(h)                                 Section 6.16 shall be amended to (i) delete
the phrase “Subject to  Section 2.7,”
from the first sentence thereof, (ii) delete the phrase “(other than the Czech  Reorganization,
which is the subject of Section 2.7)” from the third sentence thereof, and  (iii)
substitute the phrase “assets and liabilities of Czech Audatex primarily
related to the  Business” for the phrase “Czech Business
Assets” in the last sentence thereof.

 

(i)                                     Section 7.4(b) shall be amended to delete the
phrase “Except as set  forth in Section 2.7(a),”.

 

(j)                                     Section 7.5 shall be amended to delete the
phrase “Except as set  forth in Section 2.7(a),”.

 

(k)                                  Section 8.4(b) shall be amended to delete the
phrase “Except as set  forth in Section 2.7(a),”.

 

2.                                       Annexes and Exhibits. The Annexes and Exhibits to the Transaction  Agreement
are hereby amended as follows:

 

(a)                                  Annex 1.1(a) shall be amended to delete the phrase “Czech  Shelfco”
under the subheading “Audatex Entities”.

 

(b)                                 Annex 1.1(b) shall be amended to delete the phrase “All
of the  ownership interests (obchodní podíl)
in Czech Shelfco” under the subheading “ADP  Nederland”.

 

(c)                                  Annex 1.1(e) shall be amended to delete the phrase “Czech  Shelfco”.

 

(d)                                 Annex 2.1 shall be amended to substitute the
amount  “$567,500,000” for “$565,000,000” for the Purchase Price corresponding
to “Foreign  Shares (Audatex Holding GmbH (Switzerland))”, and further amended to delete the  following
row:

 

	
  “Foreign
  Shares (Czech Shelfco)

  	
  $2,500,000”

  

 

(e)                                  Exhibit B shall be amended to delete any and all references and  provisions
relating to Czech Shelfco.

 

3.                                       Seller Disclosure Schedule. The Seller Disclosure Schedule is hereby  amended
as follows:

 

(a)                                  Section 2.7(a) shall be deleted in its
entirety.

 

2

 

(b)                                 Section 3.3(c) shall be amended to delete
item (1)(d).

 

(c)                                  Section 4.2(a) shall be amended to insert the
following row under  the subheading “Transferred Company – Audatex
Holding GmbH (Switzerland)”:

 

	
  Czech
  Shelfco*

  	
  Czech
  Republic

  

 

*
This entity will become a Subsidiary after giving effect to the Reorganization.

 

(d)                                 Section 4.4(a) shall be amended to delete the
following row:

 

	
  Czech
  Shelfco

  	
  ownership interest (obchodní podíl)

  	
  100%

  

 

(e)                                  Section 4.4(b) shall be amended to insert the
following row under  the subheading “Transferred Company – Audatex
Holding GmbH (Switzerland)”:

 

	
  Czech Shelfco† 

  	
  ownership interest (obchodní

  	
  N/A

  	
  100% (directly

  
	
   

  	
  podíl) ††

  	
   

  	
  and indirectly)

  

 

†
This entity will become a Subsidiary after giving effect to the Reorganization.

††
Audatex GmbH (Swiss) will own a 1% ownership
interest (obchodní podíl) in Czech Shelfco after
giving effect to the Reorganization.

 

(f)                                    Section 4.11(b)(ii)(4)(b) shall be amended to
delete item (i) in its  entirety and to renumber items (ii) and (iii)
as items (i) and (ii), respectively.

 

(g)                                 Section 4.13, item (b)(3)(b)(ix) shall be
amended and restated in its  entirety to read as follows:  

 

“(ix)          Czech Shelfco: Türkova 1001, Prague, Czech Republic.”

 

(h)                                 Section 6.10(c) shall be amended to insert
the following footnote  after the word “Location” in the table
heading:

 

“*
All Employees listed under location “CSG Audatex Czech Republic” that are  employed
in the Business will be transferred to Czech Shelfco in connection with the
Reorganization.”

 

(i)                                     Section 6.16, item 2(b) shall be amended and
restated in its entirety  to read as follows:

 

“(b)           Czech Republic:

 

(i)                                     100% of the capital shares of Czech Audatex  (represented
by a global share) will be transferred 
from Audatex Holding GmbH (Switzerland) to ADP 
Nederland.

 

(ii)                                  A 99% ownership interest (obchodní podíl) in Czech  Shelfco
will be transferred from ADP Nederland to  Audatex
Holding GmbH (Switzerland) and a 1%  ownership
interest (obchodní podíl) in Czech Shelfco

 

3

 

will be transferred from ADP Nederland to Audatex  GmbH
(Swiss).

 

(iii)                               The tangible, personal and intangible assets and  corresponding
liabilities constituting the Claims 
Services division of Czech
Audatex, which division is  engaged in the Business, will be transferred
to Czech  Shelfco in the form of a “sale of a part of enterprise”  (prodej cásti podniku) under the Laws of the Czech  Republic
for consideration determined on the basis of  an
appraisal of the Claims Services division by a  court-sworn
appraiser appointed for this purpose by a  Czech
court.”

 

4.                                       The effectiveness of this letter agreement is
conditioned on the successful  completion of the Reorganization in the Czech
Republic in accordance with Section 
6.16(2)(b) of the Seller
Disclosure Schedule, as amended by paragraph 3(i) above, on or  prior
to April 7, 2006. Parent shall give written notice to the Buyer of such
successful completion (or the failure of such
completion) no later than five Business Days  thereafter;
provided, that notwithstanding anything to the contrary in the
Transaction  Agreement, such notice shall be deemed to
have been duly given if delivered by Paul,  Weiss,
Rifkind, Wharton & Garrison LLP to Kirkland & Ellis LLP by electronic  transmission.

 

5.                                       Except as specifically amended by this
Amendment, the Transaction  Agreement shall remain in full force and
effect and is hereby ratified and confirmed.  This
Amendment shall be construed as one with the Transaction Agreement, and the  Transaction
Agreement shall, where the context requires, be read and construed so as to  incorporate
this Amendment.

 

6.                                       This Amendment shall be governed by and
construed in accordance with  the Transaction Agreement.

 

7.                                       This Amendment may be executed by the parties
hereto in separate  counterparts, each of which when so executed
and delivered shall be an original, but all  such
counterparts together shall constitute one and the same instrument. Each  counterpart
may consist of a number of copies hereof each signed by less than all, but  together
signed by all, of the parties hereto.

 

[Remainder of page intentionally left blank]

 

4

 

IN WITNESS
WHEREOF, theparties hereto have executed this Amendment as of the date first
written above.

 

	
   

  	
  SOLERA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Conway

  
	
   

  	
   

  	
  Name: Michael D. Conway

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AUTOMATIC DATA PROCESSING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James B. Benson

  
	
   

  	
   

  	
  Name: James B. Benson

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADP ATLANTIC B.V.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James B. Benson

  
	
   

  	
   

  	
  Name: James B. Benson

  
	
   

  	
   

  	
  Title: Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADP NEDERLAND B.V.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ H.J.M. Brockhoff

  
	
   

  	
   

  	
  Name: H.J.M. Brockhoff

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADP INTERNATIONAL B.V.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ H.J.M. Brockhoff

  
	
   

  	
   

  	
  Name: H.J.M. Brockhoff

  
	
   

  	
   

  	
  Title: Managing Director

  

 

 

	
   

  	
  ADP CANADA CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James B. Benson

  
	
   

  	
   

  	
  Name: James B. Benson

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADP PRIVATE LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steve Penrose

  
	
   

  	
   

  	
  Name: Steve Penrose

  
	
   

  	
   

  	
  Title: Director

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