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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) DECEMBER 29, 1999
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DOUBLECLICK INC.
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(Exact name of registrant as specified in charter)
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<S> <C> <C>
DELAWARE 000-23709 13-3870996
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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450 WEST 33RD STREET, NEW YORK, NEW YORK 10001
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)683-0001
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NOT APPLICABLE
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(Former name or former address, if changed since last report.)
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ITEM 2 Acquisition or Disposition of Assets
On December 29, 1999 DoubleClick Inc. (the "Company") completed the
acquisition of DoubleClick Scandinavia AB ("DoubleClick Scandinavia") under
the terms of the Agreement on the Sale and Purchase of Shares, dated as of
December 17, 1999 (the "Agreement"), between the Company and the Sellers listed
on Appendix 1 thereto. Under the Agreement, the Company acquired the remaining
90.7% of the outstanding shares of DoubleClick Scandinavia that the Company did
not previously own. In the transaction, the shares of DoubleClick Scandinavia
not owned by the Company were exchanged for an aggregate of 356,642 shares of
Company common stock (or 713,284 shares after giving effect to the 2-for-1 stock
split effected on January 10, 2000). A second incremental payment is anticipated
at approximately 90,000 shares (post-split) to be issued by March 15, 2000.
Additional shares of Company common stock will be issued in intervals through
March 2002, which number of shares will be determined based on the revenues
achieved by DoubleClick Scandinavia and the Company's share price at the times
of determination. The minimum value of these additional shares that will be
issued under the agreement is approximately $32 million. The terms of the
transaction were determined through arms-length negotiations between the Company
and the DoubleClick Scandinavia shareholders.
Copies of the Company's press release announcing the transaction and
describing DoubleClick Scandinavia's business, which the Company intends to
continue, are incorporated herein by reference and included as Exhibit 99.1
hereto.
Item 7 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired. To be filed by Amendment to
this Current Report on Form 8-K on or prior to March 13, 2000.
(b) Pro Forma Financial Information. To be filed by Amendment to this
Current Report on Form 8-K on or prior to March 13, 2000.
(c) Exhibits. The following documents are filed as exhibits to this
report:
2.1 Agreement for the Sale and Purchase of Shares, dated as
of December 17, 1999, between DoubleClick Inc. and the
Sellers listed on Appendix 1 thereto.
99.1 Press Release dated December 22, 1999.
2
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DOUBLECLICK INC.
Date: January 12, 2000 By: /s/ Stephen R. Collins
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Name: Stephen R. Collins
Title: Chief Financial Officer
3
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EXHIBIT INDEX
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Exhibit
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2.1 Agreement for the Sale and Purchase of Shares, dated
December as of 17, 1999, between DoubleClick Inc.
and the Sellers listed on Appendix 1 thereto.
99.1 Press Release dated December 22, 1999.
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AGREEMENT ON THE SALE AND PURCHASE OF SHARES
This Agreement has been made on the date set out below between
the Sellers mentioned in Appendix 1, (hereinafter referred to as "the Sellers"),
and
DoubleClick Inc. (hereinafter referred to as "DoubleClick"), a company
incorporated under the laws of the State of Delaware with its office located in
New York.
BACKGROUND
DoubleClick owns 9.3 percent of the shares in DoubleClick Scandinavia AB
("DCS"). DoubleClick is interested to purchase the remaining 90.7 percent of the
shares in DCS.
The outstanding shares are owned by a number of shareholders. DoubleClick is
interested to enter into agreements with other shareholders regarding the
transfer of their shares in DCS to DoubleClick under the terms stated in this
Agreement. However, DoubleClick is only interested to enter into such
agreements, if the agreements may be terminated should less than 81 per cent of
all Shares are transferred to DoubleClick (excluding DoubleClick's Shares).
The Sellers are interested in selling their shares in DCS to DoubleClick under
the terms stated in this Agreement.
DEFINITIONS
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Balance Sheet The Balance Sheet of DCS as of September 30, 1999
Balance Sheet Date September 30, 1999
Balance Sheet II The Balance Sheet of DCS as of December 31, 1999
Closing Date Closing Date will be seven days after the Date of
Agreement or when at least 81 per cent of the Shares
have been transferred to DoubleClick. However, Closing
Date shall be no later than December 29, 1999.
Competition Warrantors Management shareholders as well as Mats Sundstrom
Confidential Information Any information, technical, commercial or of any other
kind, whether written or oral, except such information
which is or will be publicly known or which
has come to or will come to
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2 (20)
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the public knowledge in any way other than
through the Sellers' breach of the secrecy
undertaking under Article 27
Date of Agreement December 17, 1999
DCLK Stock Common stock of DoubleClick, Inc.
DCS DoubleClick Scandinavia AB
Earn-out Shareholders Management shareholders and any Non-Management shareholder that has chosen
payment under article 2.2 of this Agreement
Group Companies or Group DCS and its subsidiaries as defined in accordance with Chapter 1, Section 2
of the Swedish Companies Act
Incremental Value Valuation 1999 reduced by USD 60 million
Management Goran Arvinius, Lars Hallen, Bo
Alexandersson, Joakim Antelius, Ola Heffler
and Thomas Munck, as well as all entities
through which any such shareholders own
shares in DCS
Management's Shares The Management's Shares in relation to the total
number of Shares
Non-Management The Sellers excluding the Management
Payment 2000 Payment to Management by March 15, 2001
Payment 2001 Payment to Management by March 15, 2002
Registration Amount Aggregate amount of additional payment a
proportion of which each Seller shall receive
if S-3 registration statement for shares
issued on Closing Date is not filed by
December 31, 1999 and closing price of DCLK
Stock on effective date of such registration
statement is lower than closing price of
DCLK Stock on December 31, 1999, all in
accordance with Section 2
Registration Payment Date Date of payment of Registration Amount to Sellers
in proportions described in Section 2
Revenue 1999 DCS' revenues as per December 31, 1999
Revenue 2000 DCS' revenues as per December 31, 2000
Revenue 2001 DCS' revenues as per December 31, 2001
SEC The Securities and Exchange Commission
Second Payment 1999 Payment to Sellers by March 15, 2000
Signatories Mats Sundstrom and Goran Arvinius
Shares All issued and outstanding shares of DCS
Valuation 1999 A valuation of DCS based on 7.5 times DCS'Revenue 1999
Valuation 2000 A valuation of DCS based on DCS' Revenue 2000
Valuation 2001 A valuation of DCS based on DCS' Revenue 2001
Warrantors Definition, see Appendix 2
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1. TRANSFER OF SHARES AND CERTAIN DEFINITIONS
1.1. Upon the terms and conditions herein contained, the Sellers, according to
the list below,
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3 (20)
sell and transfer this day ("the Date of Agreement") to
DoubleClick 745,000 Shares, representing 90.7 per cent of the outstanding
capital stock of DoubleClick Scandinavia AB ("DCS").
1.2. Closing Date will be seven days after the Date of Agreement or when at
least 81 per cent of the Shares have been transferred to DoubleClick.
However, Closing Date shall be no later than December 29, 1999 (the
"Closing Date"). Closing will take place at the offices of Magnusson
Wahlin Advokatbyra, Stockholm.
1.3. DCS and its subsidiaries (as defined in accordance with Chapter 1,
Section 2 of the Companies Act and listed in Appendix 3) are hereinafter
referred to as the "Group Companies" or "the Group".
1.4. The transfer is, inter alia, based on a balance sheet ("the Balance
Sheet") made on 30 September, 1999 (the "Balance Sheet Date").
1.5. Goran Arvinius, Lars Hallen, Bo Alexandersson, Joakim Antelius, Ola
Heffler and Thomas Munck, as well as all entities through which any
such shareholders own Shares, are considered "Management" for the
purposes of this Agreement.
The Management's Shares and the Non-Management shares that have
chosen payment under Article 2.2 of this Agreement in relation to the
total number of Shares, constitute the Earn-out Shareholder's
Proportion.
1.6. The other Sellers are considered "Non-Management".
1.7. Management will be paid in four installments in a way described under
Article 2.2 of this Agreement. Non-Management may chose to be paid
according to a Non-Management scheme described under Article 2.1 of
this Agreement or as Management in the way described under Article 2.2
of this Agreement. Non-Management must choose payment under either 2.1
or 2.2 for all shares owned by the shareholder as well as for all
shares owned by the shareholder through any entity.
1.8. The Sellers shall provide DoubleClick with a list of Non-Management
that has chosen payment under Article 2.2 under this Agreement five (5)
days prior to Closing Date.
1.9. The Sellers defined in Appendix 2 of this Agreement (the "Warrantors")
shall make the representations and warranties stated in this Agreement.
1.10. The Warrantors' obligations under this Agreement shall be fulfilled
jointly and severally. However, each Warrantor shall not be liable for
an amount exceeding the total amount he has received, or will receive
as earn-out payment, in consideration for his Shares.
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2. CONSIDERATION AND PAYMENT
All payments described below in this Article 2 shall be made in common stock of
DoubleClick, Inc. ("DCLK Stock").
DoubleClick will use reasonable commercial efforts to file a form S-3
registration statement with the Securities Exchange Commission ("SEC"), (i) by
February 7, 2000 in order to register the resale of the transactional shares to
be issued at Closing Date and, (ii) promptly after the Second Payment 1999,
Payment 2000 and Payment 2001, respectively, in order to register the resale of
the transactional shares to be issued on such dates. Any shares issued as
payment of a portion of the Registration Amount (defined below), if issued by
March 15, 2000, shall be registered for resale together with the shares issued
pursuant to the Second Payment 1999. Provided that the SEC has declared such
registration statements effective, the shares issued can be resold in the United
States without further registration, subject to certain limitations under
applicable law.
If (i) the first S-3 registration statement filed for the shares issued at
Closing is not filed with the SEC by December 31, 1999, and (ii) the closing
stock price of DCLK Stock on the NASDAQ Stock Exchange on the date such
registration statement for the shares issued at Closing is declared effective
(the "Effective Date") is lower than the closing stock price of DCLK Stock on
the NASDAQ Stock Exchange on December 31, 1999, then in addition to all other
payments due hereunder, the Sellers will receive a portion of the following
aggregate amount (the "Registration Amount"), in DCLK Stock, determined as
follows:
USD 60 million X [(number of days between January 1, 2000 and the date on which
a form S-3 registration for the transactional shares issued at Closing is filed
with the SEC) / 366 days] X 20% = Registration Amount
Each Non-Management Seller shall receive, at the time of Second Payment 1999
(or, if the registration statement for the shares issued at Closing is not
effective by such date, within ten (10) days of the Effective Date) (such date
of issuance, the "Registration Payment Date"), its percentage of the
Registration Amount, which percentage shall represent the number of Shares held
by each Seller on the Date of Agreement, in relation to the toal amount of
Shares outstanding on such date. Each Earn Out Shareholder shall, on the
Registration Payment Date, receive a percentage of one third of the Registration
Amount, which percentage shall represent the number of Shares held by each Earn
Out Shareholder on the Date of Agreement in relation to the total amount of
Shares. The number of shares of DCLK Stock to be paid on the Registration
Payment Date in the proportions described above will be calculated using a share
price of $114.
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2.1 Non-Management
The consideration to Non-Management shall be paid to the amounts and in the way
prescribed below in this section.
Each Seller shall on the Closing Date receive a first payment of 0.64107 shares
in DoubleClick per Share.
By March 15, 2000, Non-Management shall receive a possible second payment based
on Valuation 1999.
As per December 31, 1999, DoubleClick will determine a valuation of DCS
("Valuation 1999") based on 7.5 times DCS' 1999 revenue (the "Revenue 1999").
DoubleClick shall establish the Revenue 1999 at the latest on March 1, 2000.
Should the Valuation 1999 exceed USD 60 million, each Seller shall, as a second
payment, receive its percentage of the Incremental Value, which percentage shall
represent the number of Shares held by each Seller on the Date of Agreement, in
relation to the total amount of Shares outstanding on such date. If Valuation
1999 should be less than or equal to USD 60 million, the Sellers shall not
receive any additional end-of-year payment. The number of shares of DCLK Stock
to be transferred to the Sellers for the possible second payment will be 0.08013
shares in DoubleClick for every USD one (1) million in incremental Revenue 1999.
2.2 Earn-out shareholders
The consideration to Earn-out Shareholders shall be paid to the amounts and in
the way prescribed below in this section. Those Earn-out Shareholders employed
by DCS, will receive the four payments below contingent on not resigning their
employment at DCS before March 1, 2002. Should DCS terminate the employment
agreement of any of the Earn-out Shareholders due to the employee's breach of
employment agreement or grossly negligent conduct, the employee in question is
not entitled to any outstanding earn-out payment due hereunder after the date of
termination of the employment.
DoubleClick will not pay any of the payments under this Article should DCS enter
into liquidation, either voluntary or compulsory, or become insolvent or enter
into composition or corporate reorganization proceedings or if DCS enters into
bankruptcy or receivership.
However, the Earn-out Shareholder are entitled to any outstanding earn-out
payment should DoubleClick decide to liquidate DCS for other reasons than
required by applicable law.
2.2.1 First payment:
Each Earn-out Shareholder shall on the Closing Date receive a payment of 0.21369
shares in
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DoubleClick per Share.
2.2.2 Second payment:
By March 15, 2000, Earn-out Shareholders shall receive a possible second payment
("Second Payment 1999") based on Valuation 1999.
Should Valuation 1999 exceed USD 60 million, Earn-out Shareholders shall, as a
second payment, receive a percentage of one-third of the Incremental Value,
which shall represent the number of Shares held by each Earn-out Shareholders on
the Date of Agreement in relation to the total amount of Shares. If Valuation
1999 should be less than or equal to USD 60 million, Earn-out Shareholders shall
not receive any additional end-of-year payment.
The number of shares of DCLK Stock to be transferred to Earn-out Shareholders
for the second payment will be 0.02671 shares in DoubleClick for every USD one
(1) million in incremental Revenue 1999.
2.2.3 Third payment:
By March 15, 2001, Earn-out Shareholders shall receive a third payment in DCLK
Stock ("Payment 2000") in exchange of the Shares transferred to DoubleClick on
Closing Date, based on a valuation of DCS' 2000 revenues (the "Revenue
2000"), which DoubleClick shall establish at the latest on March 1, 2001
("Valuation 2000").
The Payment 2000 shall equal one-third of Earn-out Shareholders' Proportion of
the Valuation 2000, which valuation shall be determined by multiplying the
Revenue 2000 with a multiple of 6.16.
For purposes of determining the Valuation 2000, the minimum Revenue 2000 shall
be no less than USD 18.9 million. The maximum Revenue 2000 shall be no more than
USD 35.1 million.
The number of shares of DCLK Stock received by Earn-out Shareholders will be
calculated using the average closing stock price ten trading days on the NASDAQ
stock exchange prior to the payment date.
2.2.4 Fourth payment:
By March 15, 2002, Earn-out Shareholders shall receive a fourth payment
("Payment 2001") of DCLK Stock in exchange for the Shares transferred to
DoubleClick on Closing Date, based on a valuation of DCS' 2001 revenues (the
"Revenue 2001"), which valuation DoubleClick shall establish at the latest on
March 1, 2002 (the Valuation 2001").
The Payment 2001 shall equal one-third of Earn-out Shareholder's Proportion of a
Valuation
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2001 determined by multiplying the Revenue 2001 with a multiple of 4.34.
For purposes of determining the Valuation 2001, the minimum Revenue 2001 shall
be no less than USD 38.5 million. The maximum Revenue 2001 shall be no more than
USD 71.5 million.
The number of shares of DCLK Stock received by Earn-out Shareholders will be
calculated using the average closing stock price ten trading days on the NASDAQ
stock exchange prior to the payment date.
2.3 General payment conditions etc
2.3.1 Revenue
Annual "Revenue" shall mean consolidated US GAAP revenue after provisions for
bad debt and advertising discounts and less a proportionate share of revenue
owned by minority shareholdings in DoubleClick Norway and DoubleClick Denmark.
There will be no proportionate deduction for revenues owned by minority share
holdings in DoubleClick Finland for 1999. There will be proportionate deduction
for revenues owned by minority share holdings in DoubleClick Finland for the
years 2000 and 2001.
The minority shareholders in DoubleClick Finland, DoubleClick Norway and
DoubleClick Denmark are listed in Appendix 4.
DoubleClick shall appoint an auditor in order to determine the annual revenue in
question. DoubleClick shall bear the cost for such an appointed auditor.
The Sellers may at their own expense appoint an additional auditor in order to
determine the annual revenue in question for the Group. All Sellers shall share
the cost for such an appointed auditor for establishing Valuation 1999. Earn-out
Shareholders shall bear the cost for such an appointed auditor for establishing
Valuation 2000 and 2001.
In case of disagreement between the Parties regarding any question in connection
with establishing the annual revenue in question, any such unresolved question
shall, at the request of one of the Parties, with binding effect for them, be
finally resolved by an authorised public accountant of one of the five largest
internationally recognised accountant firms that the Parties mutually agree on.
The accountant thus appointed shall give his opinion in writing. The costs in
connection with the process shall be borne by the Parties in equal parts.
2.3.2 Transfer of Shares
DoubleClick shall not be obligated to make any payments hereunder until the
Sellers have demonstrated, to DoubleClick's satisfaction, that DoubleClick has
been registered as owner of
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all Shares owned by the Sellers in the shareholders register kept by the
Securities Register Center (Vardepapperscentralen) of the Shares.
3. CONDITIONS
3.1 If not at least 81 percent of all Shares have been transferred to
DoubleClick to an account to be appointed by DoubleClick the day
before Closing Date, DoubleClick is entitled to terminate this
Agreement. Should a compulsory redemption be necessary in order for
DoubleClick to get 100 percent of the Shares, the Sellers shall pay
all costs for establishing a holding company based in the EU (the
"Holding Company") and costs for the transfer to the Holding Company
of all Shares owned by DoubleClick.
3.2 If DoubleClick terminates the Agreement on the ground mentioned in
Article 3.1, none of the Parties shall have any liability to the
other.
4. THE INTERIM BETWEEN THE BALANCE SHEET DATE AND THE DATE
OF AGREEMENT
The Warrantors represent and warrant that, since the Balance Sheet Date and
until the Date of Agreement, unless otherwise provided in this Agreement, there
has not, with respect to business transactions of the Group Companies, been:
a) any change in the manner of conducting the business of the Group Companies
relative to previously applied business principles, nor has there been any
entering into agreements and undertakings by the Group Companies other than on
terms and conditions generally applied in the respective company's field of
business,
b) any change in employment compensation, pension and other employment benefits
with respect to the personnel nor has there been any new employment or any
termination of employment, deviating from Appendix 5 hereto.
c) any divestment of, nor investment in any fixed assets,
d) any change in agreements entered into after the Balance Sheet Date with
respect to terms and conditions, prices and credit risks compared to previous
agreements,
e) any indebtedness (except ordinary credits from suppliers) incurred by the
Group Companies either directly by way of loans or other credits, or indirectly
by way of guarantee or pledge,
f) any payment of dividend or any similar distribution of funds or assets,
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9 (20)
g) any payment of (or decision regarding) any shareholder's contribution, or
similar payment.
5. THE INTERIM BETWEEN THE DATE OF AGREEMENT AND THE CLOSING DATE
During the period from the Date of Agreement and until the Closing Date, the
Sellers shall take any necessary steps to cause the management of the Group to
consult with DoubleClick's representatives prior to all material business
decisions and to ensure that the Group's business activities will be carried out
in accordance with previously applied business principles. DoubleClick shall
have unlimited rights to investigate and control the Sellers' compliance with
the provisions of this paragraph.
The Sellers shall cause the management of the Group to obtain prior approval
from DoubleClick with respect to any of the following matters.
a) issuance of binding offers which in each case concern products having a sales
value exclusive of VAT in excess of USD 100,000,
b) acceptance of orders which in each case concern products having a sales value
exclusive of VAT in excess of USD 100,000,
c) payment of dividend or similar distribution of funds or assets,
d) payment of shareholder's contribution or similar,
e) new employment or termination of employment of personnel, except as
specified in writing to DoubleClick and approved by DoubleClick prior to
December 1, 1999.
f) entering into any pension commitments,
g) sale of any asset having a market value in excess of USD 15,000,
h) acquisition of any asset having a value in excess of USD 15,000,
i) entering into or amendment of any credit commitment (other than ordinary
supplier's credits),
j) the granting of any credit (other than ordinary customer credits) or
entering into guarantee commitments or the furnishing of any other security,
k) entering into, or amendment of any long-term agreement, any agreement with
the Sellers or any person or entity related to or associated with the Sellers
or entering into any other
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agreement which contains terms and conditions which are not strictly in
accordance with generally accepted market conditions,
l) material changes of prices or rebates.
6. DIRECTORS AND AUDITORS
Immediately upon the Closing Date, the Sellers shall, on DoubleClick's
request, cause extraordinary shareholders' meetings of the Group Companies to be
held for purposes of electing new directors and auditors.
The Sellers covenant that the present directors and auditors, if so requested by
DoubleClick, will be removed from their positions without any claim for
compensation or remuneration and that these directors will not thereafter
exercise their formal authority to represent DCS.
DoubleClick covenants that the next ordinary shareholders' meetings of the Group
Companies will pass the necessary resolutions whereby the present directors will
be discharged from liability with respect to their administration of the
respective Group Company's affairs, provided, however, that DCS' auditors will
approve such discharge from liability.
The Sellers agree to cause general powers of attorney to be duly and validly
issued as of the Closing Date in favour of persons appointed by DoubleClick
which individuals shall have unlimited authority to represent the Group
Companies in all matters until the new Board of Directors has been officially
registered.
7. BALANCE SHEET II
As of December 31, 1999 a balance sheet and a profit and loss account,
(hereinafter "Balance Sheet II") shall be prepared in accordance with the same
accounting principles which applied in preparation of the balance sheet and the
profit and loss account as of the Balance Sheet Date.
Balance Sheet II shall be prepared jointly by DoubleClick and the Sellers and in
consultation with DCS' present auditors and the auditors to be appointed by
DoubleClick.
8. VALUATION
In case of disagreement between the Parties regarding any question in connection
with Balance Sheet II, any such unresolved question shall, at the request of one
of the Parties, with binding effect for them, be finally resolved by one
authorised public accountant appointed by The Stockholm Chamber of Commerce. The
accountant thus appointed shall give his opinion
11 (20)
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in writing. The costs in connection with the process shall be borne by the
Parties in equal parts.
9. INFORMATION ABOUT THE GROUP
The information concerning the Group upon which DoubleClick has relied in
concluding this Agreement is mentioned in Appendix 1 of the Due Diligence
Report, see Appendix 6.
The Parties acknowledge that DoubleClick has been provided access to any and all
information and documents regarding DCS which are in the possession of the
Warrantors and which the Warrantors in its discretion deems relevant to this
transaction. The Warrantors represents that, to the best of their knowledge, the
information so provided is true, complete, accurate, fairly disclosed and not
misleading. Based hereof, DoubleClick has performed a business, financial and
legal due diligence of the DCS.
The following warranties and representations in Articles 10-22 are given subject
to DoubleClick's actual knowledge as a result of the due diligence performed by
DoubleClick. Notwithstanding the foregoing, in its due diligence DoubleClick has
discovered that DCS is not fully indemnified towards a number of third parties
due to DCS's lack of reference to standard terms normally referred to in DCS'
agreements. This Article 9 does not exclude the Warrantors from any liability
incurred as a result of any claims that may be raised against DCS as a result of
DCS' lack of entering into standard terms including, inter alia, indemnification
clauses, clauses of disclaimer of warranties and other material protective
clauses, towards such third parties.
10. DCS' SHARES; WARRANTY
DCS' total paid up share capital is 1,642,000 SEK represented by 821,000 Shares.
The Warrantors represent and warrant that:
a) the Shares constitute all issued and outstanding shares of DCS, for which
payment in full has been made.
b) the Shares noted in Appendix 1 are owned by the Sellers free and clear of all
liens, claims, options, pre-emption rights, charges or other encumbrances,
c) all Shares are of the same class with respect to the rights vested therein,
d) no resolutions have been made regarding issue of (i) new shares, (ii)
convertible debt instruments, (iii) debt instruments with a right of option to
subscribe to new shares or (iv) participating debt instruments, or (v) similar
instruments.
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11. BALANCE SHEETS AND ACCOUNTS; WARRANTY
The Warrantors represent and warrant that:
a) the accounts of the Group including annual reports and balance sheets
presented to DoubleClick are correct, have been prepared in accordance with law
and Swedish generally accepted accounting principles, and correctly present the
financial position of the Group as of their respective dates.
b) the Group's accounting principles have been consistently applied since its
incorporation,
c) the Balance Sheet as presented to DoubleClick is correct in all respects and
includes all of the Group Companies' assets, liabilities, pledges, guarantees
and other undertakings.
12. THE GROUP COMPANIES' ASSETS; WARRANTY
The Warrantors represent and warrant that :
a) unless otherwise stated herein, the Group Companies have legal title to all
assets described herein as being the property of the respective Group Company,
and that such legal title is unrestricted and includes full right of disposition
and that any such property is free of any lien, charge or other encumbrance,
b) the receivables as of the Balance Sheet Date have been collected or will be
collected at book value within one month from the Balance Sheet Date and that
the receivables reported in the Group's accounts as of the Closing Date will be
collected at book value within one month from the Closing Date,
c) the Group Companies have not failed to maintain, service and repair their
assets and that all material assets, whether owned by the Group Companies or
not, are in good and functional condition,
d) the Group Companies' IT-products and other electronic products (hardware as
well as software) are able - with their functionality intact - to store, treat,
give and receive date and time indications in respect of both the 20th and 21st
centuries and that such products will treat the year 2000 as a leap-year.
13. PERSONNEL; WARRANTY
The Warrantors represent and warrant that:
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a) all employees of the Group as of the Date of Agreement have been listed in
Appendix 5 and that no salary, pension or other employment benefits have been
granted to such employees on terms and conditions which are more favourable than
those indicated in the said Appendix,
b) no previously employed personnel are entitled to receive pension benefits or
severance payments,
c) no claim for compensation except as expressly provided herein will be or is
likely to be raised against any Group Company from any person now or previously
employed or from any trade union of which such employee is or has been a member.
d) no employee of DCS has been or will be offered employment (or assignment as a
consultant) by the Sellers or any enterprise controlled by the Sellers for a
period of two years after the Closing Date.
e) Goran Arvinius, Joakim Antenius, Lars Hallen, Ola Heffler and Thomas Munck
are obliged to observe a notice period of termination of at least six (6) months
and that each such employee holding a key position is obliged to observe
competition restrictions specified in such employees' employment agreement
during 12 months after termination of the employment.
14. AGREEMENTS AND UNDERTAKINGS; WARRANTY
The Warrantors represent and warrant that the Group Companies are not bound by
any agreement or undertaking which is not made in the ordinary course of
business or which has not been made on market conditions or terms customary in
the trade, and the Group Companies are not and have not been partners in
partnerships or limited partnerships,
15. ORDERS AND OUTSTANDING OFFERS; WARRANTY
The Warrantors represent and warrant that the Group Companies' outstanding
offers and agreements entered into after the Balance Sheet Date:
a) include orders and offers containing prices and other terms and conditions
which do not deviate from the principles which were applied by the respective
Group Company prior to the Balance Sheet Date,
b) concern customers whose good credit standing has been thoroughly examined and
accepted and that the respective Group Company in making any such judgement has
not deviated from principles applied prior to the Balance Sheet Date,
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16. THE ACTIVITIES OF THE GROUP COMPANIES; WARRANTY
The Warrantors represent and warrant that:
a) the Group Companies have obtained all necessary permits from authorities,
i.a. the Swedish Data Inspection Board, to carry out their activities and that
all such activities always have been in accordance with applicable laws and
regulations,
b) the production and marketing of the Group Companies' products have not
caused, and will not, in the Sellers' best judgement, cause any claims to be
raised against any Group Company by reason of infringement of any third party
patent, design, trademark, copyright or similar intellectual or industrial
property rights,
c) no other circumstance or event has occurred or may reasonably be expected to
occur which implies or could imply any limitation or restriction in the conduct
of the Group Companies' activities.
17. TAXES AND CHARGES ETC; WARRANTY
The Warrantors represent and warrant that:
a) all necessary cost reservations for taxes, fees and other public charges have
been made in the accounts as of the Balance Sheet Date,
b) the Group Companies will not be the subject of additional assessment of
taxes, fines or other punitive charges which are attributable to business
transactions prior to the Closing Date,
c) the Group Companies currently have fully paid and will, prior to the Closing
Date, make any and all payments for taxes, fees and other public charges as
required by laws and regulations.
d) no expenses etc. incurred in connection with the transaction reflected in
this agreement has been born by any Group Company.
18. WARRANTY PROVISIONS; WARRANTY
The Warrantors represent and warrant that the Group Companies have not issued
any warranties which are not in the ordinary course of DCS's business or not
normal in the trade and which relate to products which either have been
delivered prior to the Closing Date or, as
<PAGE>
15 (20)
evident from the orders or offers made as of the Closing Date, will be delivered
subsequent thereto.
19. INSURANCE; WARRANTY
The Warrantors represent and warrant that:
a) any and all assets of the Group Companies are adequately insured against
fire, damage and loss,
b) the Group Companies maintain adequate liability insurance and product
liability insurance
c) the Group Companies maintain adequate insurance against operational
interruption
d) the insurance policies under a)-c) above have been validly in effect since
the Balance Sheet Date and that such policies will be in full force and effect
at least one month after the Closing Date.
The Warrantors also represent and warrant that:
a. the assets of the Group Companies during the time between the Balance Sheet
Date and the Closing Date have not diminished and will not diminish in value due
to fire, theft, damage, flooding or any other unexpected event, which is not
completely covered by insurance
b. neither the Group Companies nor anyone for whom the Group Companies are
responsible has or will commit any act or omission, which subjects any of the
Group Companies to tort liability and which is not covered by liability or
product liability insurance, and that
c. the value of the Group during the time between the Balance Sheet Date and the
Closing Date has not diminished and will not diminish as a result of an event
entailing that the business activities of any Group Company cannot be conducted
to an ordinary extent and which business activities are not covered by valid
insurance against the risk of operational interruption.
20. LITIGATION; WARRANTY
The Warrantors represent and warrant that the Group Companies are not involved
in any litigation, arbitration proceedings or any other dispute which may result
in liability or costs and that no such litigation, arbitration or dispute will
arise by reason of any event or circumstance which is attributable to the period
prior to the Closing Date.
<PAGE>
16 (20)
21. DOCUMENTATION AND REGISTRATION; WARRANTY
The Warrantors represent and warrant that as of the Closing Date all
documentation concerning the Group Companies, such as share register, minutes of
meetings of the Board of Directors and the shareholders, contracts,
undertakings, Government permits, books and accounts, etc, will be in the
possession and safe custody of the respective Group Company and freely available
to DoubleClick and that all prescribed registrations, notices and applications
have been made.
22. AUTHORISATION; WARRANTY
The Warrantors represent and warrant, jointly and severally, that Mats Sundstrom
and Goran Arvinius (the "Signatories") are entitled to enter into this Agreement
on behalf of the Sellers. The Warrantors represent and warrant that the
Signatories have informed the Sellers of the contents of this Agreement and that
they have given the Sellers reasonable time to review and consent to the
conditions of the Agreement.
23. INDEMNITY
In the event that any representation or warranty expressly contained in or
otherwise implied under this Agreement shall be inaccurate or false the
Warrantors shall compensate DoubleClick by 0.9 USD for each USD of the amount in
deficit, including all costs and expenses incurred by DoubleClick as a
consequence.
DoubleClick is entitled to withhold any outstanding earn-out payment to the
Warrantors under Article 2 should a dispute arise as regards the representations
and warranties or any other remedy, until such a dispute is finally resolved.
Interest on the amount of payment due to DoubleClick hereunder shall be payable
at a rate which by four percentage units exceeds the official Swedish discount
rate from the Closing Date until payment is made through set-off against
outstanding payments under Article 2 above or otherwise.
24. OTHER REMEDIES
Instead of claiming compensation by reason of inaccurate representations or
warranties, DoubleClick may, in case of the Sellers' material breach of
contract, terminate this Agreement, in which case DoubleClick, in exchange for
the delivery to the Sellers of the Shares, shall receive the value equal to the
paid-out part of the consideration hereunder including interest at a rate which
by four percentage units exceeds the official Swedish discount rate as from the
time of payment, until repayment is made.
Without limitation of the foregoing and without prejudice to any other rights
and remedies
<PAGE>
17 (20)
which DoubleClick may have against the Sellers, DoubleClick shall in any case be
entitled to damages by reason of the Sellers' breach of contract. However, each
Warrantor shall not be liable for an amount exceeding the total amount he has
received, or will receive as earn-out payment, as consideration for his Shares,
excluding all costs and expenses incurred by DoubleClick in order for
DoubleClick to recover such compensation. DoubleClick is not entitled to damages
in cases where DoubleClick has been adequately compensated by invoking the
representations and warranties.
25. NOTICE OF CLAIMS AND TIME LIMIT
Regardless of the time at which DoubleClick discover the inaccuracy of any
representation or warranty or any other contractual breach of the Sellers,
DoubleClick shall invoke any claim or other remedy within 12 months from Closing
Date.
With respect to remedies based on representations or warranties concerning
taxes, fees and other public charges, DoubleClick reserves its right up to the
passage of six months after a final decision by the Authorities of such tax, fee
or charge has entered into force.
26. NON-COMPETITION
Management shareholders as well as Mats Sundstrom (the "Competition Warrantors")
undertake during a period of twelve months after the Closing Date not to carry
out or further support any activity which in any way may compete with any
activity which is carried out by any Group Company or which, according to the
articles of association is allowed to be carried out by such company. Such said
activity shall be defined as Online Advertising Networks and Online Advertising
Technology Solutions.
In the event that the Competition Warrantors should commit a breach of the
covenant in the preceding paragraph the Competition Warrantors shall pay to
DoubleClick an aggregate penalty of USD 1,000,000 or, if the breach continues
during a period longer than one month, USD 1,500,000 for each month during which
the breach prevails.
27. SECRECY
The Warrantors undertake not to make any unauthorised disclosure of any
Confidential Information regarding any Group Company or its activities. The
Warrantors ensure that DCS's employees, consultants and directors of the board
and any other representative acting on behalf of DCS will be bound by a
corresponding secrecy undertaking.
"Confidential information" shall include any information, technical, commercial
or of any other kind, whether written or oral, except such information which is
or will be publicly
<PAGE>
18 (20)
known or which has come to or will come to the public knowledge in any way other
than through the Sellers' breach of this secrecy undertaking.
Also non-intentional or non-negligent acts or omissions shall be considered as
breaches of contract under this secrecy clause.
In the event that the Warrantors should commit a breach of the covenant in the
preceding paragraph the Warrantors shall pay to DoubleClick an aggregate penalty
of USD 500,000 or, if the breach continues during a period longer than one
month, USD 1,000,000 for each month during which the breach prevails.
28. PRESS RELEASE
The Parties shall issue one press release in the U.S. and one in Sweden any
appropriate time after the Date of Agreement. The representatives of the Parties
shall mutually agree on the respective contents of the press releases.
29. GOVERNING LAW
This Agreement shall be construed in accordance with and be governed by the laws
of Sweden.
30. NOTICES AND LANGUAGE
Notices and other communications shall be in the English language and deemed to
be valid and effective if sent by courier or registered letter to the addresses
of the Parties stated in the Preamble to this Agreement or to other addresses
supplied at a later date.
The communications will be considered as having reached the addressee, see
Appendix 7:
1. if sent by courier; on delivery
2. if sent by registered letter: 5 days after the date of mailing.
Changes of address are to be notified as set out in this provision.
31. AMENDMENTS
Only those amendments and additions to this contract that are made in writing
and signed by the Parties are valid.
<PAGE>
19 (20)
32. ENTIRE AGREEMENT
The contract and its appendices constitute the entire agreement between the
Parties on all issues to which the Agreement relates. Those issues that have not
been expressly dealt with under the terms of the Agreement are to be decided
with reference to the intentions upon which the Agreement is based.
The contents of this Agreement and its appendices supersede all previous written
or oral commitments and undertakings with respect to the subject matter hereof.
33. SEVERABILITY
If any provision of this Agreement or part thereof shall to any extent be or
become invalid or unenforceable, the Parties shall agree upon any necessary and
reasonable adjustment of the Agreement in order to secure the vital interests of
the Parties and the main objectives prevailing at the time of execution of the
Agreement. Failing an agreement between the Parties on adjustments of the
Agreement, such adjustments shall be made by arbitrators in accordance with the
provisions of the arbitration clause in this Agreement.
34. DISPUTES/ARBITRATION
Any dispute, controversy or claim arising out of or in connection with this
contract, or the breach, termination or invalidity thereof, shall be settled by
arbitration in accordance with the Rules of the Arbitration Institute of the
Stockholm Chamber of Commerce. The arbitral tribunal shall be composed of three
arbitrators, all appointed by the Institute.
The place of arbitration shall be Stockholm.
The language to be used in the arbitral proceedings shall be English.
<PAGE>
20 (20)
This contract has been executed in two copies of which the Sellers have taken
one and DoubleClick one.
<TABLE>
<S> <C>
DOUBLECLICK INC THE SELLERS
/s/ Barry Salzman /s/ Mats Sundstrom
..................................... ........................
Barry Salzman, Vice President DoubleClick Inc. Mats Sundstrom
(place, date) 1999-12-21
/s/ Goran Arvinius
........................
Goran Arvinius
(place, date)........................ (place, date) 1999-12-20
</TABLE>
<PAGE>
DOUBLECLICK SCANDINAVIA AB APPENDIX 1
SHAREHOLDERS
<TABLE>
<CAPTION>
NO NAME
- -- ----
<S> <C>
1 Goran Arvinius
2 Lars Hallen
3 Ola Heffler
4 Joakim Antelius
5 Thomas Munck
6 Mats Sundstrom
7 Nordic IT Provider BV
8 Leader Industries Ltd
9 Sandridge Services Ltd
10 Credit Agricole Indosuez
11 Bo Alexandersson
12 Ledstiernan Business Development Ltd
13 Ledstiernan BV
14 Ledstiernan Investment
15 Karl Stockman
16 Thomas Rosen
17 Bryson Investments Ltd
18 Andrimner
19 Minvest
20 Linus Marmstedt
21 Ven Capital
22 Staffan Liljeqvist
23 Nils Lundgren
24 Carama Invest AB
25 Fredrik Ladin
26 Mats Nilsson
27 Hipshot AB
28 Magnus Hedman
29 Anders Nohrborg
30 Per Sanda
31 Billy Gustavsson
32 Henrik Hedman
33 Simon Gustavsson
34 Lars Fromm
35 Michael Mattsson
36 Henrik Ingvarsson
37 Aso Ingenjorsfortbildning
38 Pia Bjorkman
39 Carl Palmstierna
40 Barbro Mattson
41 ANS Ltd
42 Oskar Lindstrom
43 Richard Bage
44 Lars Hammar
45 Cantrade Private Bank
46 Anthony Saliba
47 Ragnar Mostrom Dodsbo
48 Petter Martensson
49 Gustav Ode
50 Celsia
51 Royal Skandia Life Insurance
52 Claes Goran Rangstad
</TABLE>
<PAGE>
FOR IMMEDIATE RELEASE CONTACT:Jennifer Blum
Corporate Communications
212.381.5705
[email protected]
DOUBLECLICK INC. TO ACQUIRE DOUBLECLICK SCANDINAVIA
-- Consolidates Market Leadership Position in Sweden,
Denmark, Norway and Finland --
NEW YORK, December 22, 1999 -- DoubleClick Inc. (Nasdaq: DCLK), the leading
global Internet advertising solutions company, today announced the acquisition
of all outstanding shares of DoubleClick Scandinavia AB not previously owned by
DoubleClick, in a stock-for-stock transaction.
DoubleClick Scandinavia was launched in December 1997 and has offices in
Stockholm, Copenhagen, Oslo and Helsinki. It holds a leading position in Sweden,
Denmark, Norway and Finland, with market share in excess of 30%. DoubleClick
Scandinavia, which has a reach of 80% of all Internet users in Scandinavia,
represents many of Scandinavia's most attractive and important Web sites and
works with advertisers including Ericsson, SAS and SAAB.
"As DoubleClick expanded internationally, we established presence with local
partners in select markets to maintain our first mover advantage and to build
global scale rapidly," said Barry Salzman, President, DoubleClick International.
"Our strategy was to buy back these local companies over time. We are currently
implementing that strategy and are delighted to have DoubleClick Scandinavia,
operating in a region that is on the forefront of Internet development, become a
full subsidiary of DoubleClick."
DoubleClick currently has operations in 22 countries and its international
operations accounted for 20% of the Company's third quarter 1999 revenue.
"Our partnership with DoubleClick has been a great success," added Goran
Arvinius, Managing Director of DoubleClick Scandinavia. "As a full member of the
DoubleClick family we will now be in an even better position to build our market
leadership position in Scandinavia."
Terms of the deal were not disclosed.
-- more --
<PAGE>
ABOUT DOUBLECLICK INC.
DoubleClick Inc. (www.doubleclick.net) is a leading provider of comprehensive
global Internet advertising solutions for marketers and Web publishers.
Combining technology and media expertise, DoubleClick centralizes planning,
execution, control, tracking and reporting for online media campaigns.
DoubleClick Inc. has Global headquarters in New York City and maintains offices
in Atlanta, Boston, Chicago, Detroit, Dallas, Denver, Los Angeles, San
Francisco, San Mateo, Seattle, Amsterdam, Barcelona, Copenhagen, Dublin,
Dusseldorf, Hamburg, Helsinki, Hong Kong, London, Madrid, Melbourne, Milan,
Montreal, Munich, Oslo, Paris, Sao Paulo, Singapore, Stockholm, Sydney, Taipei,
Tokyo and Toronto.
ABOUT DOUBLECLICK SCANDINAVIA
DoubleClick Scandinavia (www.doubleclick.net/se) is a leading provider of
comprehensive global Internet advertising solutions for marketers and Web
publishers in Scandinavia. Combining technology and media expertise, DoubleClick
Scandinavia helps the Scandinavian advertisers to build image and attract
visitors to their websites. DoubleClick Scandinavia's headquarter is located
in Stockholm with local offices in Oslo, Copenhagen and Helsinki.
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