Exhibit 10.2
ASSET PURCHASE AGREEMENT
by and among
SYSTEMS SOLUTIONS, INC.,
JUDGE IMAGING SYSTEMS, INC.,
AOP ACQUISITION CORP.,
XXXX X. XXXXXX
and
XXXXXXX XXXXXX
SECTION 1. ACQUISITION OF ASSETS
1.1 Sale and Purchase of Assets
1.2 Excluded Assets
1.3 Assumption of Liabilities
1.4 Consents
SECTION 2. PURCHASE AND SALE
2.1 Purchase Price
2.2 Allocation of Consideration
2.3 Closing Costs
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Organization and Good Standing
3.2 Power and Authorization
3.3 No Conflicts
3.4 Brokers
3.5 Title; Liens
3.6 Accounts Payable and Accrued Liabilities
3.7 Accounts and Notes Receivable
3.8 Contracts
3.9 Tax Matters
3.10 Financial Statements
3.11 Material Adverse Changes
3.12 Undisclosed Liabilities
3.13 Legal Proceedings
3.14 Customers
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Organization and Good Standing
4.2 Power and Authorization
4.3 No Conflicts
4.4 Brokers
SECTION 5. CLOSING; CERTAIN COVENANTS
5.1 Closing and Effectiveness
5.2 Deliveries at the Closing
5.3 Use of Name
5.4 Remittance of Payments
5.5 Affiliate Payments
SECTION 6. EMPLOYEE BENEFITS AND EMPLOYMENT
6.1 Employment
6.2 Employee Pension Benefit Plans
6.3 Employee Welfare Benefit Plans
6.4 Health Continuation Coverage
6.5 Health Insurance Portability and Accountability Act ("HIPAA")
6.6 Reporting and Disclosure Requirements
6.7 Employee Records
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SECTION 7. INDEMNIFICATION
7.1 Indemnification by Seller
7.2 Indemnification by Buyer
7.3 Inter-Party Claims
7.4 Third Party Claims
7.5 Limitations and Requirements
SECTION 8. MISCELLANEOUS
8.1 Survival of Representations and Warranties
8.2 Further Assurances
8.3 Costs and Expenses
8.4 Acknowledgment of Warranty Disclaimer
8.5 Acknowledgment of Warranty Disclaimer
8.6 Public Announcements
8.7 Notices
8.8 Assignment and Benefit
8.9 Amendment, Modification and Waiver
8.10 Xxxx of Sale
8.11 Governing Law; Consent to Jurisdiction
8.12 Section Headings and Defined Terms
8.13 Invalidity/Severability
8.14 Counterparts
8.15 Entire Agreement
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is effective as of
June 30, 1999, (the "Effective Date") by and among Systems Solutions, Inc., a
Washington corporation ("Seller"), Judge Imaging Systems, Inc., a Pennsylvania
corporation ("Judge Imaging"), AOP Acquisition Corp., a New York corporation
("Buyer"), Xxxx X. Xxxxxx ("X. Xxxxxx") and Xxxxxxx Xxxxxx ("X. Xxxxxx"). Buyer,
Seller, Judge Imaging, X. Xxxxxx and X. Xxxxxx are collectively referred to
herein as the "Parties".
BACKGROUND
The Parties desire to provide for, among other things, the acquisition
by Buyer from Seller and the sale by Seller to Buyer of certain Assets (as
defined below) and the assumption by Buyer of certain liabilities relating to
the document solutions and information management business (the "Business") of
Seller upon the terms and subject to the conditions set forth in this Agreement.
Judge Imaging is the sole shareholder of Seller as a result of a Stock Purchase
Agreement dated as of June 5, 1998 (the "First Agreement").
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties, covenants and agreements herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
ACQUISITION OF ASSETS
Sale and Purchase of Assets. Upon the terms and subject to the
conditions of this Agreement, Seller hereby sells, transfers and delivers to
Buyer the Assets (as defined below) and Buyer hereby purchases the Assets from
Seller for the consideration set forth in Section 2 hereof. As used herein the
term "Assets" shall mean the following assets of the Business as of the
Effective Date:
All accounts receivable of the Business, including all receivables
identified on Schedule 3.7;
All supplies, machinery, furniture, furnishings, motor vehicles,
equipment and other personal property and tangible assets located at the
Business or used exclusively by the Business regardless of location;
All of Seller's rights to the names "Systems Solutions" and
"Corebridge Technology";
To the extent assignable, all right, title and interest in, to and
under all purchase orders, sales agreements, equipment leases, distribution
agreements, licensing agreements and other contracts, agreements and commitments
("Contracts") of the Business, including those set forth on Schedule 1.1(d);
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Prepaid expenses;
Copies of all books and records exclusively relating to the
Business or the Assets (including such books and records as are contained in
computerized storage media), including all inventory, purchasing, accounting,
sales, export, import, manufacturing, marketing, banking and shipping records
and all files, contractor, consultant, customer/client and supplier lists,
records, literature and correspondence, and marketing materials excluding tax
returns;
The lease (the "Lease") related to the facility at 0000 000xx
Xxxxxx XX, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx (the "Facility");
Any other assets of the Business which are of a nature not
customarily reflected in the books and records of a business, such as assets
which have been written off for accounting purposes but which are still used by
or of value to the Business;
To the extent assignable, all permits, licenses and authorizations
("Authorizations") associated with the Business and its operations which are
identified on Schedule 1.1(i);
All intangible assets and goodwill exclusively related to the
Business and its operations;
All deposits in the hands of third parties; and
All other assets of the Business exclusively related to the
Business and its operations other than "Excluded Assets" defined in Section 1.2.
Excluded Assets. The Assets being sold, assigned, and transferred to
Buyer hereunder do not include any other assets of Seller, including:
Cash and cash equivalents;
Any assets or rights used both for the Business and other
operations of Judge Imaging, which were not part of the "Purchased Assets" under
the First Agreement; or
Any name or xxxx which includes "Judge" or "On Site Solutions" or;
Any rights, claims or counterclaims under this Agreement or the
Transaction Documents (collectively, the "Excluded Assets").
Assumption of Liabilities. Buyer hereby assumes, and thereafter will
fully perform, pay and satisfy, all of the following debts, liabilities
(including contingent liabilities), claims, obligations, and commitments, known
and unknown ("Liabilities"), of Seller relating to the Business (the "Assumed
Liabilities") as of the Effective Date:
all obligations of Seller that are executory as of the Closing Date
under Contracts of the Business that are part of the Assets assigned to Buyer
and Seller's obligations under the Lease (rent under the Lease will be prorated
to the Closing Date);
all accounts payable of Seller relating to or arising out of the
operation of the Business (except as provided in Section 1.4), including all
payables set forth on Schedule 3.6;
vacation, severance and similar employment liabilities with respect
to Transferred Employees (except as provided in Section 6);
unearned revenues and customer deposits;
all liabilities of the Business arising after the Closing Date; and
all liabilities reflected in the balance sheet of the Business as
of June 30, 1999, attached hereto as
Schedule 1.3(f).
Buyer does not assume and shall not be liable for any other Liabilities,
including but not limited to (i) any Liability arising out of the First
Agreement; (ii) Taxes relating to periods prior to the Closing Date; or (iii)
any other Liability arising out of the operation of the Business prior to the
Closing Date.
Consents. Notwithstanding anything in this Agreement to the contrary,
if any Contract or Authorization included in the Assets may not be transferred
without the consent, approval or waiver ("Consent") of a third party (including,
without limitation, any governmental authority) and such transfer or attempted
transfer would constitute a breach thereof or a violation of any law, nothing in
this Agreement or any Transaction Document shall constitute a transfer or
attempted transfer thereof. Seller and Buyer will use reasonable efforts to
obtain each such Consent before or as soon as possible after the Closing Date,
but to the extent not obtained, Seller and Buyer shall cooperate (a) in
endeavoring to obtain such Consent promptly, and (b) if any such Consent is
unobtainable, in any reasonable arrangement so that Buyer has all of the
benefits and assumes all of the executory obligations under any such Contract or
Authorization as if such Contract and Authorization had been duly assigned to
Buyer.
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PURCHASE AND SALE
Purchase Price. In full consideration for the sale by Seller to Buyer
of the Assets pursuant to Section 1.1 hereof, and the other agreements by Seller
and Buyer herein, the aggregate purchase price for the Assets shall be
Forty-Five Thousand Dollars ($45,000) (the "Purchase Price") and shall be
payable by Buyer to Seller by means of wire transfer prior to or at the Closing.
Allocation of Consideration. The consideration for the Assets shall be
allocated to the Seller and among the Assets as specified on Schedule 2.2
hereto. Within 90 days following the Closing, Buyer shall prepare and submit to
Seller Internal Revenue Form 8594 (relating to purchase price allocation),
prepared in accordance with such allocation. Seller and Buyer shall prepare
their respective federal, state and local tax returns and reports employing the
allocation made pursuant to this Section and shall not take a position in any
tax proceeding or audit or otherwise that is inconsistent with such allocation;
provided, that nothing contained herein shall require Seller or Buyer to
contest, beyond the exhaustion of its administrative remedies before any taxing
authority or agency, and Seller and Buyer shall not be required to litigate
before any court, including, without limitation, the United States Tax Court,
any proposed deficiency or adjustment by any taxing authority or agency that
challenges such allocation. Seller and Buyer shall give prompt notice to each
other promptly upon becoming aware of the commencement or threat of any tax
audit or the threatened assertion of any proposed deficiency or adjustment by
any tax authority or agency that challenges such allocation.
Closing Costs. Buyer and Seller shall divide equally all documentary,
use, filing, sales and other taxes and fees due or payable as a result of the
transfer and delivery of the Assets from Seller to Buyer. Each of Buyer and
Seller shall pay all of its respective attorney, consultant, accounting and
other fees and any and all other expenses contemplated to be paid by Buyer or
Seller under this Agreement and the other agreements, documents and instruments
related hereto (this Agreement and such related agreements, documents and
instruments, collectively, the "Transaction Documents").
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller and Judge Imaging hereby jointly and severally represent and
warrant to Buyer as of the Closing Date as follows (except, in each case, to the
extent Buyer has knowledge or belief that any such representation and/or
warranty is incorrect as a result of Buyer's due diligence, or Buyer's
familiarity with the Business or otherwise):
Organization and Good Standing. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Washington,
and has all necessary power and authority to carry on its business as presently
conducted, to own and lease the assets which it owns and leases and to perform
all its obligations under each agreement and instrument by which it is bound.
Power and Authorization. Seller and Judge Imaging have the corporate
power and authority to enter into and perform their respective obligations under
this Agreement and under the other agreements and documents required to be
delivered by Seller and/or Judge Imaging prior to or at the Closing in
connection herewith (such agreements and documents, collectively, the "Seller
Transaction Documents"). The execution, delivery and performance by Seller and
Judge Imaging of this Agreement and the Seller Transaction Documents have been
duly authorized by all necessary corporate action. This Agreement has been duly
and validly executed and delivered by Seller and Judge Imaging and constitutes a
legal, valid and binding obligation of Seller and Judge Imaging, enforceable
against Seller and Judge Imaging in accordance with the terms hereof. When
executed and delivered as contemplated herein, each of the Seller Transaction
Documents shall constitute the legal, valid and binding obligation of Seller and
Judge Imaging, enforceable against Seller and Judge Imaging in accordance with
the terms thereof.
No Conflicts.
The execution, delivery and performance of this Agreement and the
Seller Transaction Documents do not and will not (with or without the passage of
time or the giving of notice):
violate or conflict with Seller's certificate or articles of
incorporation or by-laws, any statute, law, regulation, permit, license, or
certificate, or any judgment, order, award or other decision or requirement of
any arbitrator, court, government or governmental agency or instrumentality
(domestic or foreign) binding upon Seller or Seller's properties or assets (such
statutes, laws, regulations, permits, licenses, certificates, judgments, orders,
awards and other decisions or requirements, collectively, "Laws"); or
violate or conflict with, result in a breach of, or constitute a
default or otherwise cause any loss of benefit under, any material agreement or
other material obligation to which Seller is a party; or
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cause Buyer to become subject to or liable for any tax other than
taxes required to be prorated hereunder and/or sales tax due on this
transaction.
No Consents or registrations, notifications, filings and/or
declarations with, any court, government or governmental agency or
instrumentality, creditor, lessor or other person or entity are required to be
given or made by Seller in connection with the execution, delivery and
performance of this Agreement and the other agreements, documents and
instruments contemplated herein, other than such as have been obtained or made
and are in full force and effect.
There are no actions, proceedings or investigations ("Actions")
pending or, to the knowledge of Seller, threatened, that question any of the
transactions contemplated by, or the validity of, this Agreement or any of the
other Transaction Documents or which, if adversely determined, could reasonably
be expected to have a material adverse effect upon the Business or the ability
of Seller to enter into or perform its respective obligations under this
Agreement or any of the other Transaction Documents. Seller has not, on behalf
of itself or Buyer, received any request from any governmental agency or
instrumentality for information with respect to the transactions contemplated
hereby.
Notwithstanding anything in this Agreement to the contrary, Seller
makes no representation or warranty as to any law, agreement, obligation,
Consent or Approval or Action which relates to the Business and not Seller as a
whole.
Brokers. No person acting on behalf of Seller or any of Seller's
affiliates or under the authority of any of the foregoing, is or will be
entitled to any brokers' or finders' fee or any other commission or similar fee,
directly or indirectly, from any of the parties in connection with any of the
transactions contemplated by this Agreement.
Title; Liens. Except as described on Schedule 3.5, Seller has title to
the Assets free and clear of all liens, pledges, charges, claims, encumbrances,
proscriptions, restrictions, conditions, covenants, and easements of any kind
("Liens").
Accounts Payable and Accrued Liabilities. Schedule 3.6 contains a
correct and complete aging of all accounts payable and accrued liabilities of
Seller outstanding as of the date thereof. Seller has paid all accounts payable
in accordance with their terms, other than accounts payable which Seller is
disputing in good faith and which are identified on Schedule 3.6 as disputed.
Accounts and Notes Receivable. Schedule 3.7 contains a correct and
complete aging of all accounts and notes receivable of Seller as of the date set
forth thereon. All such accounts and notes receivable of Seller represent valid
obligations from sales made or services rendered in the ordinary course of
business. To the knowledge of Seller and Judge Imaging, there are no
counterclaims or rights of set-off with respect to any accounts and notes
receivable of the Business.
Contracts. All Contracts included in the Assets have been entered into
on an arms length basis and are on terms reflecting fair value for the assets or
services provided thereunder. Seller has made available to Buyer complete copies
of all Seller's written Contracts. Except as disclosed on Schedule 3.8, no event
has occurred which constitutes or, with the passage of time or the giving of
notice, or both, would constitute a material default by Seller or, to the
knowledge of Seller, by any other person under any Contracts, or which would
give any other person under such Contract the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Contract. Judge Imaging has not received
from any other person under any such Contract any notice or other communication
regarding any actual or alleged breach of any Contract. To the knowledge of
Judge Imaging, there are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to Seller
under any Contracts.
Tax Matters. All reports, returns or other information required to be
supplied to any federal, state, local or other governmental authority, or any
political subdivision thereof, and any governmental, judicial, public or
statutory instrumentality, tribunal agency, authority, body or entity having
legal jurisdiction over any matter in question with respect to taxes ("Tax
Returns") required to be filed by, or with respect to, the Assets have been
filed. Payment has been made of all taxes required to be paid in respect of the
periods covered by such Tax Returns (except where the failure to pay would not,
in the aggregate, have a material adverse effect on the Assets). No deficiency
for any taxes has been proposed, asserted or assessed in connection with the
Assets that has not been resolved or paid in full. No audits or other
administrative proceedings or court proceedings are presently pending with
regard to any material Tax Returns in connection with the Assets.
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Financial Statements. Seller has delivered to Buyer:
an unaudited balance sheet of the Business as of June 30, 1999;
an unaudited profit and loss statement for the six months ended
June 30, 1999;
listings of accounts payable and accounts receivable of the
Business as of June 30, 1999.
The financial statements referred to in subsections (a) and (b) fairly present
the financial condition and the results of operations of the Business as at June
30, 1999 and for the six month period then ended, all in accordance with GAAP,
consistently applied, except as provided in Schedule 3.10. The listings
described in subsection (c) are complete and accurate.
Material Adverse Changes. Since June 30, 1999, there has not been any
material adverse change in the business, operations, properties, prospects,
assets, or condition of the Business, and no event has occurred or circumstance
exists that may result in such a material adverse change.
Undisclosed Liabilities. Seller has, with respect to the Business, no
liabilities or obligations of any nature other than (i) those on the unaudited
balance sheet of the Business as of June 30, 1999, (ii) those incurred since
June 30, 1999 in the ordinary course of business, or (iii) those of a type that
GAAP does not require to be reported on a balance sheet.
Legal Proceedings. Except as set forth on Schedule 3.13, there are no
pending or, to the best knowledge of Seller or Judge Imaging, threatened
actions, claims or proceedings (i) that have been commenced by or against the
Business or that otherwise relate to or may affect the Business, or (ii) that
challenge, or that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, the Closing. To the knowledge of Seller and Judge
Imaging no event has occurred or circumstance exists that may give rise to or
serve as a basis for the commencement of any such proceeding.
Customers. Schedule 3.14 sets forth a complete and accurate list of all
customers of the Business.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller and/or Judge Imaging as
of the date of this Agreement as follows (except, in each case, to the extent
Seller and/or Judge Imaging has knowledge or belief that any such representation
and/or warranty is incorrect as a result of Seller's and/or Judge Imaging's due
diligence, or Seller's and/or Judge Imaging's familiarity with the Business or
otherwise):
Organization and Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York,
and has all necessary power and authority to carry on its business as presently
conducted, to own and lease the assets which it owns and leases and to perform
all its obligations under each agreement and instrument by which it is bound.
Power and Authorization. Buyer has the corporate power and authority to
enter into and perform its obligations under this Agreement, the Note and under
the other agreements, documents and instruments (collectively, the "Buyer
Transaction Documents") required to be delivered by it prior to or at the
Closing. The execution, delivery and performance by Buyer of this Agreement and
the Buyer Transaction Documents have been duly authorized by all necessary
corporate action. This Agreement has been duly and validly executed and
delivered by Buyer and constitutes the legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with the terms hereof. When
executed and delivered as contemplated herein, each of the Buyer Transaction
Documents shall constitute the legal, valid and binding obligation of Buyer,
enforceable in accordance with the terms thereof.
No Conflicts.
The execution, delivery and performance of this Agreement and the Buyer
Transaction Documents do not and will not (with or without the passage of time
or the giving of notice):
violate or conflict with Buyer's certificate or articles of
formation or organization or partnership agreement or any Laws; or
violate or conflict with, result in a breach of, or constitute a
default or otherwise cause any loss of benefit under, any material agreement or
other material obligation to which Buyer is a party.
No Consents or registrations, notifications, filings and/or
declarations with any court, government or governmental agency or
instrumentality, creditor, lessor or other person or entity are required to be
given or made by Buyer in connection with the execution, delivery and
performance of this Agreement and the other agreements, documents and
instruments contemplated herein, other than such as have been obtained or made
and are in full force and effect.
There are no actions, proceedings or investigations pending or, to the
knowledge of Buyer, threatened, that question any of the transactions
contemplated by, or the validity of, this Agreement or any of the other
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Transaction Documents or which, if adversely determined, could reasonably be
expected to have a material adverse effect upon the ability of Buyer or Seller
to enter into or perform its respective obligations under this Agreement or any
of the other Transaction Documents. Buyer has not, on behalf of itself or
Seller, received any request from any governmental agency or instrumentality for
information with respect to the transactions contemplated hereby.
Brokers. No person acting on behalf of Buyer or any of its affiliates
or under the authority of any of the foregoing is or will be entitled to any
brokers' or finders' fee or any other commission or similar fee, directly or
indirectly, from any of the parties in connection with any of the transactions
contemplated by this Agreement.
CLOSING; CERTAIN COVENANTS
Closing and Effectiveness. The closing of the purchase and sale of the
Assets and the assignment and assumption of the Assumed Liabilities (the
"Closing") pursuant to this Agreement shall be effective as of the close of
business on June 30, 1999 and shall take place on the date hereof (the "Closing
Date").
Deliveries at the Closing. At the Closing, in addition to the other
actions contemplated elsewhere herein:
Seller shall deliver, or shall cause to be delivered, to Buyer the
following:
a closing certificate and secretary's certificate, dated the
Closing Date and signed by the Chief Executive Officer or President or a Vice
President of Seller and by the Secretary of Seller, satisfactory to Buyer;
a copy of the resolutions of the board of directors of Seller
authorizing the execution, delivery and performance of this Agreement and the
other Transaction Documents, certified as of the Closing by the Secretary of
Seller;
the written consent of the landlord with respect to the assignment
to Buyer of the Lease;
UCC-3 termination statements effecting the termination or release
of all assets from the security interests identified in Schedule 3.5;
A release from PNC Bank, National Association, of the Assets from
all security interests of the bank; and
such other documents and instruments as Buyer may reasonably
request to effectuate or evidence the transactions contemplated by this
Agreement.
Buyer shall deliver, or shall cause to be delivered, to Seller the
items described below:
a closing certificate and secretary's certificate, dated the
Closing Date signed by the President or a Vice President of Buyer and by the
Secretary of Buyer, satisfactory to Seller;
a copy of the resolutions of the board of directors or
corresponding governing body of Buyer authorizing the execution, delivery and
performance by Buyer of this Agreement and the other Transaction Documents,
certified as of the Closing by the Secretary of Buyer;
such other documents and instruments as Seller may reasonably
request to effectuate or evidence the transactions contemplated by this
Agreement.
Use of Name. From and after thirty days after the Closing, Buyer shall
not have or use or permit any affiliate of Buyer to have or use any name or xxxx
which includes a reference to The Judge Group, Inc., a Pennsylvania corporation
("Judge Group"), or Judge Imaging, or On Site Solutions, or any name or xxxx
similar thereto, and no such name or xxxx or rights thereto shall be included in
the Assets. On request, Buyer shall deliver to Seller evidence (which shall be
reasonably satisfactory to Seller) of compliance with this Section. Buyer
acknowledges that breach of this Section will give rise to irreparable injury to
Seller, Judge Imaging and Judge Group and that as a result money damages are
inadequate. Accordingly, Buyer irrevocably acknowledges and agrees that Seller,
Judge Imaging and Judge Group may each seek and obtain injunctive relief and
other equitable remedies with respect to any breach or threatened breach of this
Section, in addition to any other remedies which may be available at law. In the
event of any alleged breach of this Section, Buyer will be responsible for the
legal fees and costs incurred by Seller, Judge Imaging and Judge Group. In the
event any such allegation is made incorrectly, as adjudicated by a court or
arbitrator, Seller and Judge Imaging will be responsible for the legal fees and
costs incurred by Buyer.
Remittance of Payments. From and after the Effective Date, Seller shall
immediately remit to Buyer, in the form received, any payments that it or any
affiliate may receive (such as payments of accounts receivable) which properly
belong to Buyer, and Buyer shall immediately remit to Seller, in the form
received, any payments that Buyer or any affiliate may receive which properly
belong to Seller. In particular, Seller shall immediately remit to Buyer any
cash remitted by a customer on or after the Effective Date that is attributable
to a receivable, which was part of the Assets purchased hereunder. Neither Party
may set off against any amount due under this section any amount owed to or
allegedly owed to such Party.
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Affiliate Payments. From and after the Closing, subject to applicable
law (including fraudulent conveyance law and law related to dividends and
distributions) that may restrict payments, until all of the obligations of Buyer
hereunder and under the Note and all of the Assumed Liabilities which constitute
trade accounts payable have been paid and satisfied in full, Buyer will not make
any distribution, dividend or other similar payment, make any loan to or
investment in any Affiliate or make any payment to or transfer any asset or
right to any Affiliate, except for reasonable salary for services rendered and
distributions necessary for Buyer's shareholders to pay income taxes arising
because of Buyer's status as an S corporation under the Internal Revenue Code of
1986, as amended (the "Code"). For purposes hereof, "Affiliate" shall mean any
direct or indirect equity holder of Buyer, any director, officer or employee of
Buyer or of any such equity holder, any spouse or relative of any of the
foregoing which is a natural person and any business entity of which any of the
foregoing is a director.
EMPLOYEE BENEFITS AND EMPLOYMENT
Employment.
Buyer will determine which employees of the Business to whom it will
offer employment and identify such employees by name to Seller not later than
July 12, 1999. Buyer shall offer employment to such individuals effective as of
the Closing. Employees who accept such employment shall be referred to as
"Transferred Employees" for purposes of this Agreement. Seller shall be
responsible for any severance pay obligations with respect to those individuals
employed in the Business who are not Transferred Employees and whose employment
with Seller is terminated. Seller shall also notify such individuals about the
termination of their employment and such notification may inform those
individuals not identified by Buyer as among those to whom Buyer will offer
employment that Buyer has decided not to offer employment to them. Anything
contained in or implied by the provisions of this Section 6.1 to the contrary
notwithstanding, the provisions of this Section shall not create any third-party
beneficiary rights in any person, including any Transferred Employee.
At Closing, Buyer shall assume the Employment Agreement, dated as of
June 5, 1999, between Xxxxx Xxxxxx and Seller.
Employee Pension Benefit Plans. The benefits under any Employee Pension
Benefit Plan (as defined in Section 3(2) of ERISA) maintained by Seller which
have accrued to any Transferred Employee as of the Closing Date shall be frozen
as of a date not later than 15 days after the Closing Date and no further
benefits shall accrue under any such Employee Pension Benefit Plan with respect
to such Transferred Employee. Buyer assumes no responsibility with respect to
any such Employee Pension Benefit Plan.
Employee Welfare Benefit Plans. Buyer shall be responsible for
establishing such Employee Welfare Benefit Plans (as defined in Section 3(1) of
ERISA) for Transferred Employees as it determines to be appropriate. Buyer shall
have no responsibility for any Employee Welfare Benefit Plan of Seller. Subject
to Section 1.3 hereof, Seller shall remain responsible and liable for any acts
or omissions by Seller with respect to such Employee Welfare Benefit Plans
occurring prior to the Closing Date.
Health Continuation Coverage. Buyer shall be responsible for all health
continuation coverage requirements of the Code, and ERISA for all Transferred
Employees and their beneficiaries in periods on and subsequent to the Closing
Date. Seller shall be responsible for notifying employees who are not
Transferred Employees (and the beneficiaries of such employees) of their right
to continue their health care coverage under Seller's health care plan at their
own cost pursuant to the relevant provisions of Federal Law.
Health Insurance Portability and Accountability Act ("HIPAA"). Buyer
shall be responsible for all health insurance obligations imposed by HIPAA with
respect to any Employee Welfare Benefit Plan which is a group health plan (as
defined under Section 5000(b)(1) of the Code or Part 6 of Subtitle B of Title I
of ERISA) for all periods on and subsequent to the Closing Date.
Reporting and Disclosure Requirements. Seller shall be responsible for
filing all annual reports and satisfying all other reporting and disclosure
requirements with respect to any Employee Benefit Plan for all Plan Years ending
prior to the Closing Date.
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Employee Records Buyer shall grant Seller full access to all employee
records relating to the Transferred Employees to the extent necessary to enable
Seller to comply with its obligations hereunder.
INDEMNIFICATION
Indemnification by Seller. Subject to Sections 7.5 and 8.4, Seller and
Judge Imaging shall indemnify and hold Buyer and its officers, directors and
shareholders harmless against and in respect of any and all losses, costs,
expenses, claims, damages, obligations and liabilities, including interest,
penalties and reasonable attorneys' fees and disbursements, but not including
any indirect or consequential damages (such losses, costs, expenses, claims,
damages, obligations and liabilities, including interest, penalties and
reasonable attorney's fees and disbursements, but not including any indirect or
consequential damages, collectively, "Damages"), which Buyer or any such person
may suffer, incur or become subject to arising out of, based upon or otherwise
in respect of:
any inaccuracy in or breach of any representation or warranty of
Seller and/or Judge Imaging made in or pursuant to this Agreement or any
Transaction Document;
any breach or nonfulfillment of any covenant or obligation of
Seller and/or Judge Imaging contained in this Agreement or any Transaction
Document; and
other than the Assumed Liabilities, any liability arising out of
the operation of the Business prior to the Closing Date.
The liabilities of Seller and Judge Imaging under this Section 7.1 shall be
joint and several.
Indemnification by Buyer. Buyer shall indemnify, defend and hold Seller
and Judge Imaging and its affiliates and their officers, directors and
shareholders harmless against and in respect of any and all Damages which Seller
and Judge Imaging or any such entity or person may suffer, incur or become
subject to arising out of, based upon or otherwise in respect of:
any inaccuracy in or breach of any representation or warranty of
Buyer made in or pursuant to this Agreement or any Transaction Document;
any breach or nonfulfillment of any covenant or obligation of Buyer
contained in this Agreement or any Transaction Document;
the Assumed Liabilities; and
any liability arising out of the operation of the Business after
the Closing Date.
Inter-Party Claims. Any party seeking indemnification pursuant to this
Section (the "Indemnified Party") shall notify in writing the other party or
parties from whom such indemnification is sought (the "Indemnifying Party") of
the Indemnified Party's assertion of such claim for indemnification, specifying
the basis of such claim, including all relevant facts and circumstances and the
section(s) of this Agreement under which such claim arises. The Indemnified
Party shall thereupon give the Indemnifying Party reasonable access to the
books, records and assets of the Indemnified Party which evidence or support
such claim or the act, omission or occurrence giving rise to such claim and the
right, upon prior notice during normal business hours, to interview any
appropriate personnel of the Indemnified Party related thereto.
Third Party Claims.
Each Indemnified Party shall promptly notify in writing the
Indemnifying Party of the assertion by any third party of any claim with respect
to which the indemnification set forth in this Section relates (which shall also
constitute the notice required by Section 7.3), specifying the basis of such
claim including all relevant facts and circumstances and the section(s) of this
Agreement under which such claim arises. The Indemnifying Party shall have the
right, upon notice to the Indemnified Party within sixty (60) business days
after the receipt of any such notice, to undertake the defense of or, with the
consent of the Indemnified Party (which consent shall not unreasonably be
withheld), to settle or compromise such claim. The failure of the Indemnifying
Party to give such notice and to undertake the defense of or to settle or
compromise such a claim shall constitute a waiver of the Indemnifying Party's
rights under this Section 7.4(a) and in the absence of gross negligence or
willful misconduct on the part of the Indemnified Party shall preclude the
Indemnifying Party from disputing the manner in which the Indemnified Party may
conduct the defense of such claim or the reasonableness of any amount paid by
the Indemnified Party in satisfaction of such claim.
The election by the Indemnifying Party, pursuant to Section 7.4(a), to
undertake the defense of a third-party claim shall not preclude the party
against which such claim has been made also from participating or continuing to
participate in such defense, so long as such party bears its own legal fees and
expenses for so doing.
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1.2 Limitations and Requirements.
Seller shall have no obligation to indemnify Buyer or any other
person against Damages pursuant to Section 7.1 of this Agreement unless and
until the aggregate of all such Damages suffered or incurred by Buyer and such
persons exceeds $20,000; in which event Buyer and such persons shall be entitled
to indemnification for all Damages in excess of such amount.
Except as may otherwise expressly be provided in this Agreement, no
claim arising out of or based upon any inaccuracy in or breach of any
representation or warranty contained in this Agreement or any Transaction
Document shall be made unless facts exist giving rise to a claim, and written
notice pursuant to Section 7.3 is delivered to the Indemnifying Party, within
the applicable statute of limitations period.
The indemnification obligations of Seller contained herein are
intended to be exclusive and preclude all other claims, rights or remedies
against Seller which may exist at law (whether statutory or otherwise) or in
equity with respect to the matters covered by such indemnification obligations.
MISCELLANEOUS
Survival of Representations and Warranties. Subject to Section 7.5(b)
above, the representations and warranties made by the parties in this Agreement
and in the certificates, documents and schedules delivered pursuant hereto shall
survive the consummation of the transactions herein contemplated.
Further Assurances. Each party hereto shall use commercially reasonable
efforts to comply with all requirements imposed hereby on such party and to
cause the transactions contemplated hereby to be consummated as contemplated
hereby and shall, from time to time and without further consideration, either
before or after the Closing, execute such further instruments and take such
other actions as any other party hereto shall reasonably request in order to
fulfill its obligations under this Agreement and to effectuate the purposes of
this Agreement and to provide for the orderly and efficient transition of the
ownership of the Assets to, and the assumption of the Assumed Liabilities by,
Buyer. Buyer and Seller shall, for two years after the Closing, retain the
various books and records relating to the Business and shall, upon prior notice,
provide the other party and its authorized representatives reasonable access
thereto. Each party shall promptly notify the other party of any event or
circumstance known to such party that could prevent or delay the consummation of
the transactions contemplated hereby or which would indicate a breach or
non-compliance with any of the terms, conditions, representations, warranties or
agreements of any of the parties to this Agreement.
Costs and Expenses. Except as otherwise expressly provided herein, each
party shall bear its own expenses in connection herewith.
Acknowledgment of Warranty Disclaimer. Buyer acknowledges and agrees
that
Buyer has had access to the assets, properties (real and personal,
owned and leased), permits, licenses, agreements, instruments, documents and
other contracts (oral and written), and the books and records related to the
Business and has had opportunity to inspect the same;
Buyer has decided to acquire the Assets and assume the Assumed
Liabilities based upon such access and inspection and the representations,
warranties and covenants of Seller specifically made in this Agreement;
accordingly the representations made by Seller in Section 3 hereof
are the sole representations and warranties made by Seller with respect to
itself, its assets and its liabilities and obligations, AND SELLER MAKES NO
OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, EITHER HEREIN OR OTHERWISE, AS TO THE ASSETS, PROPERTIES (REAL AND
PERSONAL, OWNED AND LEASED), AGREEMENTS, INSTRUMENTS, DOCUMENTS AND OTHER
CONTRACTS (ORAL AND WRITTEN), LIABILITIES AND/OR BUSINESS OF SELLER OR AS TO,
THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OTHER MATTER PERTAINING TO ANY OF
THE FOREGOING;
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER DISCLAIMS
ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, AS TO THE CONDITION OF
THE ASSETS, PROPERTIES (REAL AND PERSONAL, OWNED AND LEASED), AGREEMENTS,
INSTRUMENTS, DOCUMENTS AND OTHER CONTRACTS (ORAL AND WRITTEN ), BUSINESS, AND
BUSINESS PROSPECTS OF SELLER, INCLUDING, WITHOUT LIMITATION, THE WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE; and
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in furtherance and not limitation of the foregoing, Seller makes no
representation that Seller has, or that Buyer will have, all the licenses,
permits or other Authorizations or contracts required to carry on the operation
of the Business or that any of such licenses or permits or other Authorizations
or contracts are transferable, and Buyer shall be responsible for all such
matters.
Except as and to the extent set forth in this Agreement and the
certificates and schedules delivered under this Agreement, Seller hereby
disclaims all liability and responsibility for any statement or information made
or communicated in any way to Buyer or any agent, employee or representative
thereof (including, without limitation, any opinion, information or advice
provided by any officer, director, employee, agent, consultant or other
representative of Seller or any affiliate of Seller), and Buyer acknowledges
such disclaimer. No representation or warranty contained in Section 3 shall be
deemed to be untrue to the extent that Buyer had knowledge on the date hereof
that such representation or warranty was not correct as stated herein or, after
the date hereof and on or before the Closing Date, gave prior approval to an act
of the Seller or one of its subsidiaries which caused such representation or
warranty to be incorrect as stated herein.
Acknowledgment of Warranty Disclaimer. Seller acknowledges and agrees
that
The representations made by Buyer in Section 4 hereof are the sole
representations and warranties made by Buyer with respect to itself, its assets
and its liabilities and obligations, AND BUYER MAKES NO OTHER REPRESENTATIONS OR
WARRANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, EITHER HEREIN OR
OTHERWISE, AS TO THE ASSETS, PROPERTIES (REAL AND PERSONAL, OWNED AND LEASED),
AGREEMENTS, INSTRUMENTS, DOCUMENTS AND OTHER CONTRACTS (ORAL AND WRITTEN),
LIABILITIES AND/OR BUSINESS OF BUYER OR AS TO, THE TRANSACTIONS CONTEMPLATED
HEREBY OR ANY OTHER MATTER PERTAINING TO ANY OF THE FOREGOING;
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER DISCLAIMS
ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, AS TO THE CONDITION OF
THE ASSETS, PROPERTIES (REAL AND PERSONAL, OWNED AND LEASED), AGREEMENTS,
INSTRUMENTS, DOCUMENTS AND OTHER CONTRACTS (ORAL AND WRITTEN ), BUSINESS, AND
BUSINESS PROSPECTS OF BUYER, INCLUDING, WITHOUT LIMITATION, THE WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE; and
Except as and to the extent set forth in this Agreement and the
certificates and schedules delivered under this Agreement, Buyer hereby
disclaims all liability and responsibility for any statement or information made
or communicated in any way to Seller or any agent, employee or representative
thereof (including, without limitation, any opinion, information or advice
provided by any officer, director, employee, agent, consultant or other
representative of Buyer or any affiliate of Buyer), and Seller acknowledges such
disclaimer. No representation or warranty contained in Section 4 shall be deemed
to be untrue to the extent that Seller had knowledge on the date hereof that
such representation or warranty was not correct as stated herein or, after the
date hereof and on or before the Closing Date, gave prior approval to an act of
the Buyer or one of its subsidiaries which caused such representation or
warranty to be incorrect as stated herein.
Public Announcements. Prior to the Closing, neither Seller nor Buyer
shall make any public announcement or disclosure relating to the transactions
contemplated herein without the prior agreement of the other party hereto,
provided that each party shall use its best efforts to consult with the other in
advance of any disclosure required by law, but in such case the agreement of the
other party hereto shall not be required.
Notices. All notices or other communications permitted or required
under this Agreement shall be in writing and shall be sufficiently given if and
when hand delivered to the persons set forth below or if sent by documented
overnight delivery service or registered or certified mail, postage prepaid,
return receipt requested, or by telegram, telex or telecopy, receipt
acknowledged, addressed as set forth below or to such other person or persons
and/or at such other address or addresses as shall be furnished in writing by
any party hereto to the others. Any such notice or communication shall be deemed
to have been given as of the date received, in the case of personal delivery, or
on the date shown on the receipt or confirmation therefor in all other cases.
To Seller: With a copy to:
Systems Solutions, Inc. Drinker Xxxxxx & Xxxxx LLP
0 Xxxx Xxxxx, Xxxxx 000 One Xxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000 00xx xxx Xxxxxx Xxxxxxx
Xxxxxxxxx: Xxx Xxxxxxx, Esquire Philadelphia, PA 19103-6996
Phone (000) 000-0000
Telecopy (000) 000-0000
Attn: F. Xxxxxxx Xxxxxxx, Esquire
To Buyer: With a copy to:
AOP Acquisition Corp. Xxxxx Swados Xxxxxx Xxxxxxx
000 Xxxxxxxx Xxxxxxxx Xxxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx 00 Xxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000 Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx Phone (000) 000-0000
Telecopy (000) 000-0000
Attention: Xxxx Xxx, Esquire
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Assignment and Benefit.
No party shall assign this Agreement or any rights hereunder, or
delegate any obligations hereunder, without prior written consent of the other
party hereto. Subject to the foregoing, this Agreement and the rights and
obligations set forth herein shall inure to the benefit of, and be binding upon,
the parties hereto, and each of their respective successors and assigns.
This Agreement shall not be construed as giving any person, other than
the parties hereto and their permitted successors and assigns, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any of
the provisions herein contained, this Agreement and all provisions and
conditions hereof being intended to be, and being, for the sole and exclusive
benefit of such parties, and permitted successors and assigns and for the
benefit of no other person or entity.
Amendment, Modification and Waiver. The parties may amend or modify
this Agreement in any respect, provided that any such amendment shall be in
writing. The waiver by a party of any breach of any provision of this Agreement
shall not constitute or operate as a waiver of any other breach of such
provision or of any other provision hereof, nor shall any failure to enforce any
provision hereof operate as a waiver of such provision or of any other provision
hereof.
Xxxx of Sale. To the extent required by applicable law or statute, this
Agreement shall constitute a Xxxx of Sale.
Governing Law; Consent to Jurisdiction.
This Agreement is made pursuant to, and shall be construed and enforced
in accordance with, the internal laws of the Commonwealth of Pennsylvania (and
United States federal law, to the extent applicable), irrespective of the
principal place of business, residence or domicile of the parties hereto, and
without giving effect to otherwise applicable principles of conflicts of law.
Any legal action, suit or proceeding arising out of or relating to this
Agreement which is brought by Buyer shall be instituted in a court in the
Eastern District of Pennsylvania, and each party waives any objection which such
party may now or hereafter have to the laying of the venue of any such action,
suit or proceeding in, and irrevocably submits to the jurisdiction of, any such
court. Any and all service of process and any other notice in any such action,
suit or proceeding shall be effective against any party if made by certified or
registered mail, or by a nationally recognized overnight courier, directed to
Seller or Buyer, as the case may be, at the address provided for herein and
service so made shall be deemed to be completed upon actual receipt thereof, or
the next day following deposit of such notice with a nationally recognized
overnight courier.
Any legal action, suit or proceeding arising out of or relating to this
Agreement which is brought by Seller shall be instituted in a court in the
Western District of New York, and each party waives any objection which such
party may now or hereafter have to the laying of the venue of any such action,
suit or proceeding in, and irrevocably submits to the jurisdiction of, any such
court. Any and all service of process and any other notice in any such action,
suit or proceeding shall be effective against any party if made by certified or
registered mail, or by a nationally recognized overnight courier, directed to
Seller or Buyer, as the case may be, at the address provided for herein and
service so made shall be deemed to be completed upon actual receipt thereof, or
the next day following deposit of such notice with a nationally recognized
overnight courier.
Nothing herein contained shall be deemed to affect the right of any
party to serve process in any other manner permitted by law.
Section Headings and Defined Terms. The section headings contained
herein are for reference purposes only and shall not in any way affect the
meaning and interpretation of this Agreement. The terms defined herein and in
any agreement executed in connection herewith include the plural as well as the
singular and the singular as well as the plural, and the use of masculine
pronouns shall include the feminine and neuter. Except as otherwise indicated,
all agreements defined herein refer to the same as from time to time amended or
supplemented or the terms thereof waived or modified in accordance herewith and
therewith.
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Invalidity/Severability. The invalidity or unenforceability of this
Agreement or any particular provision, or part of any provision, of this
Agreement in one jurisdiction shall not affect the validity or enforceability of
this Agreement or any particular provision or part of any provision of this
Agreement in any other jurisdiction and the invalidity or unenforceability of
any particular provision or part of any provision shall not affect the other
provisions or parts hereof, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provisions or parts were omitted.
Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original; and any person may
become a party hereto by executing a counterpart hereof, but all of such
counterparts together shall be deemed to be one and the same instrument. It
shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.
Entire Agreement. This Agreement, together with the agreements,
exhibits, schedules and certificates referred to herein or delivered pursuant
hereto, constitutes the entire agreement between the parties hereto with respect
to the purchase and sale of the Assets and the assumption of the Assumed
Liabilities and supersedes all prior agreements and understandings. The
submission of a draft of this Agreement or portions or summaries thereof does
not constitute an offer to purchase or sell the Assets, it being understood and
agreed that neither Buyer nor Seller shall be legally obligated with respect to
such a purchase or sale or to any other terms or conditions set forth in such
draft or portion or summary unless and until this Agreement has been duly
executed and delivered by all parties. Buyer's rights and remedies with respect
to the transactions contemplated by this Agreement and the other Transaction
Documents shall be controlled by and subject to the provisions of this
Agreement, and Buyer shall have no other rights or remedies except as set forth
in this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Asset Purchase Agreement, under seal, all as of the date first above written.
Attest SYSTEMS SOLUTIONS, INC.
/s/ Xxxxx Xxxxxx, Secretary /s/ Xxxxxx X. Judge, Jr., Chief Executive Officer
---------------- ------------------------
[Seal]
Attest JUDGE IMAGING SYSTEMS, INC.
/s/ Xxxxxxxxx X. Xxxxxxxxxx, Secretary /s/ Xxxxxx X. Judge, Jr., Chief Executive Officer
--------------------------- ------------------------
[Seal]
Attest AOP ACQUISITION CORP.
/s/ Xxxxxxx X. Xxxxxx, Secretary /s/ Xxxx Xxxxxx, President
--------------------- ---------------
[Seal]
The undersigned does hereby unconditionally, absolutely and irrevocably
guarantee to Seller and Judge Imaging the performance by Buyer of all of Buyer's
obligations contained in the Agreement, subject only to the terms, conditions
and limitations contained herein. The undersigned hereby waives presentation,
demand of payment and protest of any such obligation of Buyer, and further
waives any right to require that resort be had by Seller and/or Judge Imaging to
Buyer with respect to any such obligation before demanding performance thereof
by the undersigned.
The undersigned further agrees that this guaranty shall inure to the
benefit of and may be enforced by Seller and/or Judge Imaging, its successors
and permitted assigns, and shall be binding upon and enforceable against the
undersigned and its permitted successors or assigns and that this guaranty shall
remain in full force and effect as to any and all modifications of the Agreement
that may be effected in accordance with the terms thereof after the date hereof.
AUTOMATED OFFICE PRODUCTS OF WESTERN NEW YORK, INC.
/s/ Xxxx Xxxxxx, President
---------------
The undersigned execute this Agreement for purposes of joining in the
covenants set forth in Section 5.5, jointly and severally with the Buyer.
/s/ Xxxx X. Xxxxxx
------------------
/s/ Xxxxxxx Xxxxxx
------------------
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