Exhibit 2.1
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ASSET PURCHASE AGREEMENT
by and among:
SHERWOOD PARTNERS, INC.
and
SEEC, INC.
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Dated as of January 8, 2003
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into as of
January 8, 2003, by and among SHERWOOD PARTNERS, INC., a California corporation
("SELLER"), solely as Assignee for the Benefit of Creditors of ASERA, INC., a
Delaware corporation ("ASSIGNOR"), SEEC, INC., a Pennsylvania corporation
("PARENT" or the "Purchaser"). Certain capitalized terms used in this Agreement
are defined in EXHIBIT A.
RECITALS
A. By resolutions of the board of directors and stockholders of
Assignor, as memorialized in the duly executed minutes, Assignor has transferred
ownership of all of its Assets to Seller, and in so doing has also designated
Seller to act, pursuant to California law, as the Assignee for the Benefit of
Creditors of Assignor (the "ASSIGNMENT"). The General Assignment Agreement (the
"GENERAL ASSIGNMENT AGREEMENT") between Assignor and Seller is attached hereto
as EXHIBIT B.
B. The board of directors of the Purchaser believe that it is in the
best interest of the company and its shareholders that the Purchaser purchase
substantially all of the Assets from the Seller as more fully identified in
Section 1.2 below (the "REQUIRED ASSETS") on the terms and conditions set forth
in this Agreement and, in furtherance thereof, have approved the same.
C. The Seller wishes to sell the Required Assets to the Purchaser, and
Purchaser wishes to purchase the Required Assets from the Seller, on the terms
set forth in this Agreement. After consummation of the Closing contemplated
under this Agreement, the Seller will liquidate any Assets that are not Required
Assets hereunder and will undertake the winding down of Assignor, which shall
ultimately include, but shall not be limited to, the distribution of net funds,
after payment of fees and costs associated with the liquidation and winding
down, to Assignor's creditors, which are generated from the sale of such assets.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties to this Agreement, intending to be
legally bound, agree as follows:
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1. SALE OF ASSETS; RELATED TRANSACTIONS.
1.1 SALE OF REQUIRED ASSETS. Subject to the terms and conditions of
this Agreement, and in reliance on the representations, warranties and covenants
set forth in this Agreement, Seller agrees to sell, assign, transfer and convey
to Purchaser at the Closing (as defined below), and Purchaser agrees to purchase
and acquire from Seller at the Closing, all of Seller's right, title and
interest in and to all of the Required Assets. The Required Assets, subject to
the provisions hereof, including, without limitation, Section 1.4 below, will be
sold, assigned, transferred and conveyed to Purchaser on the Closing Date "as
is" and "where is", with no representations or warranties from the Seller other
than those specifically set forth below, and subject to any and all pledges,
liens, security interests, encumbrances, charges, title retention, claims,
conditional sale or other security arrangements of any nature whatsoever
(collectively, "ENCUMBRANCES").
1.2 REQUIRED ASSETS DEFINED.
(A) As used in this Agreement, subject to the provisions contained
herein, the term "REQUIRED ASSETS" means, collectively, Seller's right, title
and interest, if any, in and to the Assets (other than Excluded Assets),
including, without limitation, the following:
(I) All cash and cash equivalents (including marketable
securities and short-term investments) held by Seller as Assignee for the
Benefit of Creditors of Assignor as of the Closing Date hereof ("CASH") in
excess of $650,000;
(II) All Accounts Receivable of Seller as Assignee for the
Benefit of Creditors of Assignor as of the Closing Date hereof, subject to the
provisions of Section 1.2 (c) below ("REQUIRED ACCOUNTS RECEIVABLE");
(III) All equipment, machinery, computer hardware and software,
materials, prototypes, tools, supplies, vehicles, furniture and fixtures, and
other tangible assets held by Seller as Assignee for the Benefit of Creditors of
Assignor as of the Closing Date hereof, including, without limitation, those
tangible assets held by Seller as Assignee for the Benefit of Creditors of
Assignor as of the Closing Date hereof ("FIXED ASSETS");
(IV) All raw materials, work-in-process and finished goods
inventory held by Seller as Assignee for the Benefit of Creditors of Assignor as
of the Closing Date;
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(V) All Intellectual Property and Intellectual Property Rights of
Seller as Assignee for the Benefit of Creditors of Assignor as of the Closing
Date hereof including, without limitation, all Intellectual Property and
Intellectual Property Rights of Seller as Assignee for the Benefit of Creditors
of Assignor as of the Closing Date listed on EXHIBIT C attached hereto;
(VI) Those customer lists as set forth in EXHIBIT C attached
hereto;
(VII) All Assignor Contracts (other than the General Assignment
Agreement) including, without limitation, all software licenses, maintenance
contracts, partner agreements and contracts or agreements set forth in EXHIBIT C
attached hereto; and
(VIII) All advertising, marketing and promotional materials of
Assignor in the possession of Seller as Assignee for the Benefit of Creditors of
Assignor as of the Closing Date hereof.
For purposes of this Agreement, "EXCLUDED ASSETS" shall mean
(i) all claims, deposits, prepayments, refunds, causes of action, rights of
recovery, rights of set-off and rights of recoupment relating to (x) any
Liability of Assignor that is not included in the Assumed Liabilities, (y) any
Asset other than a Required Asset, and/or (y) any preference or fraudulent
conveyance recoveries of Seller or Assignor under applicable law, (ii) state or
federal Tax refunds owing to Seller or Assignor, (iii) insurance refunds or
recoveries owing to Seller or Assignor, (iv) utility or leasehold security
deposits owing to Seller or Assignor, (v) any of the rights of the Seller under
this Agreement, (vi) Cash up to the aggregate amount equal to $650,000, (vii)
Excluded Receivables (as defined in Section 1.2(c) below), (viii) any rights of
Seller under any Assignor Contracts other than those Contracts included as part
of the Required Assets, including, without limitation, those Contracts listed on
EXHIBIT C and (ix) the Assets expressly identified on EXHIBIT D as Excluded
Assets. Notwithstanding anything contained herein to the contrary, within thirty
(30) days following the Closing, the Purchaser may exclude any Assets which
would otherwise be Required Assets under this Section 1.2, and such Assets shall
be deemed Excluded Assets, by delivery to Assignor of an amendment to EXHIBIT D
hereof including such Assets thereon.
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(b) For purposes hereof, to the extent that the amount of Cash
as of the Closing Date is less than $650,000 (the "CASH SHORTFALL AMOUNT"), then
(i) Seller shall be entitled to retain the first cash proceeds received by
Seller on behalf of Assignor from those Accounts Receivable of Seller as
Assignee for the Benefit of Creditors of Assignor in an amount equal to the Cash
Shortfall Amount, (ii) such Accounts Receivable shall be deemed "EXCLUDED
RECEIVABLES" hereunder, and (iii) the Required Accounts Receivable shall be
reduced by, and shall not include, those Accounts Receivable of Seller as
Assignee for the Benefit of Creditors of Assignor representing such Excluded
Receivables.
1.3 ASSET TRANSFER; PASSAGE OF TITLE; DELIVERY.
(A) TITLE PASSAGE. Except as otherwise provided in this
Section, upon the Closing, title to all of the Required Assets shall pass to
Purchaser, and Seller shall make available to Purchaser possession of all of the
Required Assets as provided in subsection 1.3(b), and shall further, upon
Purchaser's request, execute assignments, conveyances and/or bills of sale
reasonably requested to convey to Purchaser title to all the Required Assets,
subject to the Encumbrances, in accordance with Section 1.1 of this Agreement,
as well as such other instruments of conveyance as counsel for Purchaser may
reasonably deem necessary to effect or evidence the transfers contemplated
hereby.
(B) DELIVERY OF REQUIRED ASSETS. On the Closing Date (as defined
herein), Seller shall make available to Purchaser possession of the
Required Assets, provided however, that the expenses of retrieving, removing and
transferring the Required Assets shall be borne exclusively by Purchaser.
(C) RETENTION OF DOCUMENTS. As Assignee, Seller is responsiblefor
maintaining business records during the assignment process and, among other
things, will have to prepare and file final tax returns. Seller shall make
available to Purchaser upon reasonable prior written notice and as reasonable
and appropriate all of the books and records held by Seller as Assignee for the
Benefit of Creditors of Assignor relating to the Required Assets, and permit
Purchaser to review and make copies as reasonable and appropriate; PROVIDED,
HOWEVER, that (i) Seller does not have any delivery obligation whatsoever
hereunder, and (ii) Purchaser shall be solely responsible for all costs and
expenses incurred in connection with this Section
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1.3(c), including, without limitation, all copy charges associated therewith .
1.4 NON-ASSIGNABILITY. Anything to the contrary contained herein
notwithstanding, to the extent that any asset which would otherwise be a
Required Asset, or any claim, right or benefit arising thereunder or resulting
therefrom, is not capable of being sold, conveyed, assigned, transferred or
delivered without the approval, consent or waiver of any Persons (including any
Governmental Body) other than Seller or Assignor, and such approval, consent or
waiver of such Person is not obtained prior to the Closing or if such sale,
conveyance, assignment, transfer or delivery would constitute a breach or
termination right thereof or a violation of any Legal Requirements or Order,
this Agreement shall not constitute a sale, conveyance, assignment, transfer or
delivery thereof. Any such assets shall be "NON-TRANSFERRED ASSETS" and shall
not be deemed a Required Asset as of the Closing Date. Purchaser shall take such
actions as necessary and appropriate to obtain whatever approval, consent or
waiver is necessary to permit Purchaser to derive the benefits and assume the
obligations with respect to any such Non-Transferred Asset in accordance with
this Agreement. Seller shall use good faith commercially reasonable efforts to
execute any such approval, consent, waiver or instruments as reasonable or
appropriate to permit such sale, conveyance, assignment, transfer or delivery of
such Non-Transferred Asset. As soon as practicable after such approval, consent
or waiver has been received, or is no longer required, Seller shall sell,
convey, assign, transfer or deliver of such Non-Transferred Asset to Purchaser
for no additional consideration, and such Transferred Assets shall be deemed a
Required Asset, and subject to the terms and conditions hereof relating to the
sale, conveyance, assignment, transfer and delivery of Required Assets
hereunder. Notwithstanding the foregoing, the parties acknowledge and agree
that, assuming that Seller has used good faith commercially reasonable efforts
in performing its obligations as contemplated in this Section 1.4, the failure
to obtain any such approval, consent or waiver shall in no way modify or amend
the rights of the parties under this Agreement, or otherwise be deemed a Breach
by Seller in whole or in part whatsoever. Anything to the contrary contained
herein notwithstanding, Purchaser shall be solely responsible for any and all
licensing, transfer, conveyance or other fees, costs, expenses or charges that
may be associated with obtaining the subject approval, consent or waiver as
contemplated in this Section or that may otherwise be associated with the use,
possession or ownership of the Required
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Assets, including, without limitation, those Non-Transferred Assets which become
Required Assets pursuant to the provisions hereof.
2. PURCHASE PRICE; ASSUMED LIABILITIES; CLOSING
2.1 PURCHASE PRICE. As consideration for the sale, transfer, conveyance and
assignment of all of the Required Assets to the Purchaser, at the Closing or as
otherwise provided herein, the Purchaser shall (i) assume the Assumed
Liabilities pursuant to Section 2.2 hereof, (ii) issue and deliver to Seller the
Seller Warrants pursuant to Section 2.3 hereof and (iii) deliver such funds as
shall be payable under the Business Continuity Fund pursuant to Section 2.4
hereof (the "PURCHASE PRICE").
2.2 ASSUMED LIABILITIES.
(A) For purposes of this Agreement, "ASSUMED LIABILITIES" shall mean
the following liabilities of Seller and of Assignor expressly listed below which
the Purchaser agrees, upon the consummation of, and effective as of, the Closing
to assume:
(I) The indebtedness of Assignor owing to Venture Lending &
Leasing III, Inc. ("VLL"), Third Coast Capital ("TCC"), Venture Banking Group
("VBG"), GATX Ventures, Inc. ("GATX") and Xxxxxx Financial Leasing, Inc.
("XXXXXX" and, together with VLL, TCC, VBG and GATX, the "SYNDICATE") pursuant
to that certain Loan Agreement dated as of April 24, 2001, as amended by that
certain letter agreement dated August 6, 2002 and that certain letter agreement
dated November 15, 2002 (the "SYNDICATE LOAN AGREEMENT")(collectively, all
amounts owing under the Syndicate Loan Agreement, the "SYNDICATE INDEBTEDNESS");
PROVIDED, that in no event shall the Syndicate Indebtedness exceed
$1,065,213.60;
(II) The indebtedness of Assignor owing to Comdisco Ventures,
Inc. ("COMDISCO") pursuant to that certain Restructuring Agreement dated as of
November 15, 2002 (the "COMDISCO LOAN AGREEMENT")(collectively, all amounts
owing under the "COMDISCO INDEBTEDNESS"); PROVIDED, that in no event shall the
Comdisco Indebtedness exceed $506,440.37;
(III) The indebtedness of Assignor owing to KPCB Holdings, Inc.,
as nominee, and certain other lenders (collectively, the "BRIDGE LENDERS")
pursuant to that certain
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Note and Warrant Purchase Agreement dated as of November 15, 2002 (the "Bridge
Purchase Agreement") (collectively, all amounts owing under the Bridge Purchase
Agreement, the "BRIDGE INDEBTEDNESS"); PROVIDED, that in no event shall the
aggregate principal amount of all promissory notes issued pursuant to the Bridge
Purchase Agreement exceed $2,112,525; and
(IV) the obligations of Assignor arising under the Maintenance
Contracts and other Contracts identified on EXHIBIT C, but only to the extent
such obligations (A) arise after the Closing Date, (B) do not arise from or
relate to any Breach by Seller or Assignor of any provision of such Contracts
and (C) do not arise from or relate to any event, circumstance or condition
occurring or existing on or prior to the Closing Date that, with notice or lapse
of time, would constitute or result in a Breach of any of such Contracts.
(B) Notwithstanding the foregoing, and notwithstanding anything to the
contrary contained in this Agreement, the "ASSUMED LIABILITIES" shall not
include, and the Purchaser shall not assume or be required to perform or
discharge: (1) any Liability of Seller or any other Person other than those
Liabilities expressly assumed in Section 2.2(a); (2) any Liability of Seller or
Assignor arising out of or relating to the execution, delivery or performance of
the General Assignment, this Agreement or any of the Transactional Agreements
other than any Claim or Liability whatsoever of Seller arising out of a Breach
by Purchaser or other obligation by Purchaser in connection with this Agreement
and the Transactional Agreements; (3) any Liability of Seller or Assignor
arising from or relating to any action taken by Seller or Assignor, or any
failure on the part of Seller or Assignor to take any action, at any time after
the Closing Date, except with respect to the Non-Transferred Assets to the
extent that such assets are transferred hereunder pursuant to Section 1.4 hereof
and there are Encumbrances with respect to such Non-Transferred Assets as of the
time of such transfer pursuant to Section 1.4 hereof; (4) any Liability of
Seller or Assignor arising from or relating to (x) any services performed by
Seller or Assignor for any customer, or (y) any claim or Proceeding against
Seller or Assignor; (5) any Liability of Seller or Assignor for the payment of
any Tax except for such Taxes and any other charges, costs, expenses and fees
relating to the sale of the Required Assets as contemplated herein; (6) any
Liability of Seller or Assignor to any employee or former employee of Assignor
under or with respect to any Employee Plan or Employee Agreement including,
without limitation, any vacation pay and similar
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accruals, COBRA benefits or severance or termination pay; (7) any Liability
under any Contract, if Seller or Assignor shall not have obtained, prior to the
Closing Date, any Consent required to be obtained from any Person with respect
to the assignment or delegation to the Purchaser of any rights or obligations
under such Contract; (8) any Liability for (i) any indebtedness or accounts
payable of Assignor, whether secured or unsecured, not specifically assumed in
Section 2.2 above, (ii) any Syndicate Indebtedness in excess of $1,065,213.60,
(iii) any Comdisco Indebtedness in excess of $506,440.37, or (iv) any Bridge
Indebtedness which relates to any promissory notes issued pursuant to the Bridge
Purchase Agreement in the aggregate principal amount in excess of $2,112,525,
(9) any Liability which may be sustained, suffered or incurred under the WARN
Act in connection with the operation of the business of Assignor or the
consummation of the Assignment or the Transactions, (10) any Liability arising
out of or connected to the liquidation and winding down of Assignor's business
and (11) any other Liability that is not specially assumed in Section 2.2(a)
above.
(C) The execution and delivery of this Agreement shall not be
deemed to confer any rights upon any person or entity other than the parties
hereto, or make any person or entity a third party beneficiary of this
Agreement, or to obligate either party to any person or entity other than the
parties to this Agreement. Assumption by Purchaser of any liabilities or
obligations of Seller under this Section shall in no way expand the rights or
remedies of third parties against Purchaser as compared to the rights and
remedies such parties would have against Seller if the Closing were not
consummated.
2.3 BUSINESS CONTINUITY FUND. Following the Closing, from time to time
during the period commencing as of the Closing Date and continuing through the
first anniversary of the Closing Date (the "BUSINESS CONTINUITY FUND PERIOD"),
the Purchaser, in its sole and absolute discretion, shall deliver to Xxxxxxxx
xxxx for the purpose of paying certain unsecured creditors of Assignor listed on
SCHEDULE 2.3 attached hereto (collectively, the "BUSINESS CONTINUITY UNSECURED
CREDITORS"), and in such amounts as expressly directed by Purchaser in writing
from time to time, which designation of Business Continuity Unsecured Creditors
and payment directions shall be determined by Purchaser in its sole and absolute
discretion. Upon receipt of such funds, which funds shall be made payable to
Seller solely as Assignee for the Benefit of Creditors of Assignor and which
funds, upon receipt, will be deposited separately by Seller as Assignee for the
Benefit of Creditors of Assignor from all other funds used in
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connection with the administration of the estate of Assignor for the sole and
limited purpose as set forth in this Section 2.3 hereof, and at the direction of
the Purchaser, Sherwood shall promptly pay to such Business Continuity Unsecured
Creditors such amounts as shall be determined and directed by the Purchaser in
writing. Notwithstanding anything contained herein to the contrary: (i) the
maximum amount of cash which the Purchaser shall pay in connection with the
Business Continuity Fund shall be $500,000 ("MAXIMUM BUSINESS CONTINUITY FUND
PAYMENTS"); (ii) if at any time following the Closing any additional Audit Fees
must be paid by the Purchaser, such amounts shall be credited towards the
Maximum Business Continuity Fund Payments; (iii) the Business Continuity Fund is
an express condition of Purchaser in entering into this Agreement and performing
the Transactions contemplated herein; and (iv) the provisions of this Section
2.3 shall in no manner be deemed to expand the obligations or Liability, if any,
of Seller, as Assignee for the Benefit of Creditors of Assignor, to any creditor
of Assignor whatsoever, including, without limitation, any Business Continuity
Unsecured Creditor.
2.4 SELLER WARRANTS. Subject to the provisions of Section 6.6 hereof,
Purchaser shall issue to the Seller as Assignee for the Benefit of Creditors of
Assignor the Seller Warrants (as defined below) in favor of Seller to purchase
an aggregate of 20,000 shares of Parent Common Stock.
2.5 ALLOCATION. Within a reasonable time following the Closing, the parties
shall use good faith reasonable efforts to prepare and deliver a mutually
acceptable statement detailing a good faith allocation of the consideration
among the Required Assets hereof, such schedule to be attached hereto as
SCHEDULE 2.5 hereof. To the extent that the parties hereto mutually agree to an
acceptable allocation as contemplated herein, such allocation prescribed by such
statement, as between the parties hereto, shall be conclusive and binding, and
no party hereto may file any Tax Return or other document with, or make any
statement or declaration to, any Governmental Body that is inconsistent with
such allocation.
2.6 CLOSING. The closing of the purchase and sale of the Required Assets
contemplated hereby to the Purchaser (the "CLOSING") shall take place at a
closing at the offices of Sulmeyer, Kupetz, Xxxxxxx & Xxxxxxx, a professional
corporation, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000
at 10:00 a.m. on January 8, 2003 (the "CLOSING DATE"), or at such other time or
date, and at such place, or by such other
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means of exchanging documents, as may be agreed to by the parties hereto. If the
Closing does not occur on or prior to January 8, 2003, or such later date upon
which Purchaser and Seller may agree in writing, this Agreement shall terminate
upon written notice of termination given by either party hereto that is not in
default of its obligations hereunder, and thereupon this Agreement shall become
null and void and no party hereto will have any further rights or obligations
hereunder, except that Sections 5.1, 6.1 and 6.2 below shall survive such
termination.
3. REPRESENTATIONS AND WARRANTIES OF SELLER.
The Seller represents and warrants to the Purchaser that all of the
following statements are true, accurate and correct:
3.1 DUE ORGANIZATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of California.
3.2 AUTHORITY; BINDING NATURE OF AGREEMENTS. Seller has all requisite
corporate power and authority to enter into and to perform its obligations under
the General Assignment, this Agreement and each of the other Transactional
Agreements and to consummate the Assignment and the Transactions. The execution,
delivery and performance by the Seller of the General Assignment, this Agreement
and each of the other Transactional Agreements, and the consummation of the
Assignment and the Transactions, have been duly authorized by all necessary
corporate action on the part of the Seller. The General Assignment and this
Agreement have been duly executed and delivered by Seller and constitute the
legal, valid and binding obligations of the Seller, enforceable against the
Seller in accordance with their terms. Upon the execution and delivery of the
other Transactional Agreements, such Transactional Agreements will constitute
the legal, valid and binding obligations of the Seller and will be enforceable
against the Seller in accordance with their terms. To the best of Seller's
knowledge, (i) the execution, delivery and performance by the Assignor of the
General Assignment was duly authorized by all necessary corporate action on the
part of Assignor, (ii) the General Assignment has been duly executed and
delivered by Assignor and (iii) the General Assignment constitutes a valid and
binding obligation of the Assignor, enforceable against the Assignor in
accordance with its terms.
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3.3 NON-CONTRAVENTION; CONSENTS. The execution, delivery and performance of
the General Assignment, this Agreement or any of the other Transactional
Agreements by Seller, and the consummation of the Assignment and the
Transactions by Seller, do not and will not directly or indirectly (with or
without notice or lapse of time) (i) contravene, conflict with, or result in a
violation of, any term of Seller's Articles of Incorporation or Bylaws, (ii) to
the best of Seller's knowledge, require any material filing with, or permit,
authorization, consent or approval of, any Governmental Body or other Person,
except for any consents, approvals or waivers which must be obtained from the
Syndicate, Comdisco or the Bridge Lenders or (iii) to the best of Seller's
knowledge, contravene, conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge the Assignment or any
of the Transactions or exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which Seller, Assignor or any of the Required Assets
is subject, except as such may be limited by applicable bankruptcy laws of the
United States. To the best of Seller's knowledge, Seller was not, is not or will
not be required to make any filing with or give any notice to, or to obtain any
Consent from, any Person in connection with the execution and delivery of the
General Assignment, this Agreement or any of the other Transactional Agreements
or the consummation or performance of the Assignment or the Transactions, except
for any consents, approvals or waivers which must be obtained from the
Syndicate, Comdisco or the Bridge Lenders.
3.4 LITIGATION. To the best of Seller's knowledge, there is no Proceeding
by or before any Governmental Body or threatened against or involving Seller or
Assignor, or any of Assignor's subsidiaries or affiliates, (i) that relates to
or might affect in any material way any Required Asset or (ii) that challenges,
or that may have the effect of preventing, delaying, making illegal or otherwise
interfering with, the ability of Seller or Assignor to consummate the Assignment
or any of the Transactions. Seller is not aware nor have grounds to know of any
reasonable basis for the commencement of any such Proceeding. To the best of
Seller's knowledge, there are no Orders of any Governmental Body against Seller
or Assignor, or any of Assignor's subsidiaries or affiliates, affecting the
Required Assets or either Seller's or Assignor's ability to consummate the
Assignment or the Transactions.
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3.5 ASSIGNEE. All rights of Seller with regard to the ownership and
possession of the Required Assets are rights held as Assignee pursuant to the
General Assignment made by Assignor. Pursuant to the General Assignment,
Assignor has informed Seller that it transferred all of Assignor's right, title
and interest in and to the Required Assets to Seller. Pursuant to this
Agreement, Seller, solely in its capacity as Assignee, sells, assigns, and
transfers all of its right, title and interest in and to the Required Assets to
Purchaser.
3.6 TITLE TO ASSETS. To the best of Seller's knowledge after reasonable
inquiry, including, without limitation, competent assessment of a national UCC
search, Seller, as Assignee, has good and marketable title to, all of the
Required Assets. Seller sells, assigns, transfers and conveys the Required
Assets to Purchaser "as is" and "where is", with no representations or
warranties as to merchantability, fitness or use, and the Required Assets shall
be subject to the Encumbrances and the following:
(A) AS-IS SALE; DISCLAIMERS; RELEASE. IT IS UNDERSTOOD AND AGREED THAT,
UNLESS EXPRESSLY STATED HEREIN, SELLER IS NOT MAKING AND HAS NOT AT ANY TIME
MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, WITH RESPECT TO THE REQUIRED ASSETS, INCLUDING BUT NOT LIMITED TO, ANY
WARRANTIES OR REPRESENTATIONS AS TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
(B) PURCHASER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL
SELL AND CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTY "AS IS,
WHERE IS, WITH ALL FAULTS." PURCHASER HAS NOT RELIED AND WILL NOT RELY ON, AND
SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES,
GUARANTEES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE
REQUIRED ASSETS OR RELATING THERETO MADE OR FURNISHED BY SELLER OR ITS
REPRESENTATIVES, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN
WRITING, EXCEPT AS EXPRESSLY STATED HEREIN. PURCHASER ALSO ACKNOWLEDGES THAT THE
PURCHASE PRICE REFLECTS AND TAKES INTO ACCOUNT THAT THE REQUIRED ASSETS ARE
BEING SOLD "AS IS, WHERE IS, WITH ALL FAULTS."
(C) PURCHASER ACKNOWLEDGES TO SELLER THAT PURCHASER WILL HAVE THE
OPPORTUNITY TO CONDUCT PRIOR TO CLOSING SUCH INSPECTIONS AND INVESTIGATIONS OF
THE REQUIRED ASSETS AS PURCHASER DEEMS NECESSARY OR DESIRABLE TO SATISFY ITSELF
AS TO THE REQUIRED ASSETS AND ITS ACQUISITION THEREOF. PURCHASER FURTHER
WARRANTS AND REPRESENTS TO SELLER THAT PURCHASER WILL
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RELY SOLELY ON ITS OWN REVIEW AND OTHER INSPECTIONS AND INVESTIGATIONS IN THIS
TRANSACTION AND NOT UPON THE INFORMATION PROVIDED BY OR ON BEHALF OF SELLER, OR
ITS AGENTS, EMPLOYEES OR REPRESENTATIVES WITH RESPECT THERETO. PURCHASER HEREBY
ASSUMES THE RISK THAT ADVERSE MATTERS INCLUDING, BUT NOT LIMITED TO, LATENT OR
PATENT DEFECTS, ADVERSE PHYSICAL OR OTHER ADVERSE MATTERS, MAY NOT HAVE BEEN
REVEALED BY PURCHASER'S REVIEW AND INSPECTIONS AND INVESTIGATIONS.
3.7 INVESTMENT EXPERIENCE. Seller is an "accredited investor" as defined in
Rule 501(A) under the Securities Act.
3.8 INVESTMENT INTENT. Seller is hereby granted the Seller Warrants to
purchase the Warrant Shares as contemplated herein for its own account as
principal solely in its capacity as Assignee for the Benefit of Creditors of
Assignor, for investment purposes only, and not with a present view to, or for,
resale, distribution or fractionalization thereof, in whole or in part, within
the meaning of the Securities Act. The Seller understands that its acquisition
of the Seller Warrants has not been registered under the Securities Act or
registered or qualified under any state securities law in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other things, the
bona fide nature of such Seller's investment intent as expressed herein. Seller
shall not, directly or indirectly, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise acquire or take
a pledge of) the Seller Warrants or the underlying Warrant Shares, except in
compliance with the terms of this Agreement and the registration requirements of
the Securities Act, and the rules and regulations promulgated thereunder, or an
exemption thereunder.
3.9 OPPORTUNITY TO OBTAIN INFORMATION. Seller has had an opportunity to ask
questions of and receive answers from the Purchaser or a person acting on behalf
of Purchaser concerning the terms and conditions of the Transactions and the
business, properties and financial condition of Purchaser and has received and
considered all information it deems relevant to make an informed investment
decision.
3.10 REGISTRATION OR EXEMPTION REQUIREMENTS. Seller acknowledges and agrees
that the Seller Warrants and the Warrant Shares may not be resold, transferred,
pledged or hypothecated (i) except in a transaction registered under the
Securities Act or (ii) unless an exemption from such registration is available
and, if the Purchaser so requests in writing, an opinion of
13
counsel reasonably satisfactory to the Purchaser is obtained to the effect that
the transaction is so exempt; PROVIDED, HOWEVER, that an opinion of counsel
shall not be required upon the transfer by the Investor of any securities to its
Affiliates if such Affiliate is an "accredited investor" as defined in Rule
501(A) under the Securities Act and such Affiliate agrees to be bound by this
Agreement. The Seller understands that the certificate(s) evidencing the Seller
Warrants shall be imprinted with appropriate legends describing the above
restrictions. Seller is aware of the provisions of Rule 144 promulgated under
the Securities Act of 1933, as amended, which permit the limited resale of
securities purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things, the existence of a public
market for the securities, the availability of certain current public
information about Purchaser, the resale occurring not less than one year after a
party has acquired and given full consideration for the security to be acquired,
the sale being effected through a "broker's transaction" or in transactions
directly with a "market maker" and the number of securities being sold during
any three-month period not exceeding specified limitations under certain
circumstances.
3.11 NO LEGAL, TAX OR INVESTMENT ADVICE. Seller understands that nothing in
this Agreement or any other materials presented to Seller in connection with the
purchase of Seller Warrants constitutes legal, tax or investment advice. Seller
has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of the Seller Warrants.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser represents and warrants to the Seller that all of the
following statements are true, accurate and correct:
4.1 DUE ORGANIZATION. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania.
4.2 AUTHORITY; BINDING NATURE OF AGREEMENTS. The Purchaser has all
requisite corporate power and authority to enter into and perform its
obligations under this Agreement and each of the other Transaction Agreements to
which it is or may become a party, and to consummate the Transactions. The
execution, delivery and performance by the Purchaser of this Agreement and each
of the other Transaction Agreements, and the
14
consummation of the Transactions, have been duly authorized by all necessary
corporate action on the part of the Purchaser. This Agreement has been duly
executed and delivered by the Purchaser and constitutes the legal, valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms. Upon the execution and delivery of the other
Transactional Agreements to which the Purchaser is a party, such Transactional
Agreements will constitute the legal, valid and binding obligations of the
Purchaser, enforceable against the Purchaser in accordance with their terms.
4.3 NON-CONTRAVENTION; CONSENTS. The execution, delivery and performance of
this Agreement and each of the other Transactional Agreements to which it is a
party by the Purchaser, and the consummation of the Transactions by the
Purchaser, do not and will not directly or indirectly (with or without notice or
lapse of time) (i) contravene, conflict with, or result in a violation of, any
term of such party's Articles of Incorporation or Bylaws, or (ii) to the best of
Purchaser's knowledge, require any material filing with, or permit,
authorization, consent or approval of, any Governmental Body or other Person or
(iii) to the best of Purchaser's knowledge, contravene, conflict with or result
in a violation of, or give any Governmental Body or other Person the right to
challenge any of the Transactions or exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which Purchaser is subject, except
in the case of any of (i), (ii) or (iii) where such contravention, conflict or
violation, or the failure to so file or obtain such permit, authorization,
consent or approval, would not have a material adverse effect on the ability of
the Purchaser to consummate the Transactions.
4.4 LITIGATION. To the best of each of the Purchaser's knowledge, there is
no Proceeding by or before any Governmental Body or threatened against or
involving the Purchaser that challenges, or that may have the effect of
preventing, delaying, making illegal or otherwise interfering with, the ability
of the Purchaser to consummate the Transactions. The Purchaser is not aware and
has no grounds to know of any reasonable basis for the commencement of any such
Proceeding. To the best of Purchaser's knowledge, there are no Orders of any
Governmental Body against the Purchaser affecting the Purchaser's ability to
consummate the Transactions.
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5. COVENANTS OF THE SELLER.
Seller covenants and agrees with Purchaser as follows:
5.1 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. Seller shall not issue any
press release or make any disclosure or public announcement relating to this
Agreement or the Transactions without the prior written approval of the
Purchaser, which shall not be unreasonably withheld. The previous sentence
notwithstanding, (a) Seller may disclose certain information relating to this
Agreement if required to do so by law or applicable governmental regulation, (b)
Seller shall not be prevented from making any disclosures whatsoever concerning
the General Assignment or the Assignment except with respect to any mention of
the identity of the Purchaser or the terms of this Agreement, and (c) Seller
shall not publish a tombstone regarding the General Assignment, the Assignment
and this Agreement without the prior written approval of the Purchaser, which
shall not be unreasonably withheld.
5.2 FURTHER ASSURANCES. From and after the Closing Date, except as
otherwise expressly provided herein, Seller shall use good faith commercially
reasonable efforts to cooperate with and otherwise assist the Purchaser and the
Purchaser's affiliates and promptly sign and deliver to Purchaser any and all
such additional documents, instruments, endorsements and related information and
take actions, or omit to take action, as the Purchaser may reasonably request
for the purpose of effecting the transaction contemplated herein; PROVIDED,
HOWEVER, that such documents, instruments, endorsements or related information
shall be prepared solely by Purchaser at Purchaser's sole cost and expense.
Without limiting the generality of the foregoing, from and after the Closing
Date, Seller shall promptly remit to the Purchaser any funds that are received
by Seller or Assignor and that are included in, or that represent payment of
receivables included in, the Required Assets except as otherwise contemplated
herein relating to Excluded Receivables. Seller: (a) hereby irrevocably
authorize the Purchaser, at all times on and after the Closing Date, to endorse
in the name of Seller or Assignor any check or other instrument that is made
payable to Seller or Assignor and that represents funds included in, or that
represents the payment of any receivable included in, the Required Assets; and
(b) hereby irrevocably nominates, constitutes and appoints the Purchaser as the
true and lawful attorney-in-fact of Seller or Assignor (with full power of
substitution) effective as of the Closing Date, and hereby authorizes the
Purchaser, in the name of and on behalf of Seller or Assignor, to execute,
deliver, acknowledge, certify, file and record any document, to institute and
prosecute any Proceeding
16
and to take any other action (on or at any time after the Closing Date) that the
Purchaser may deem appropriate for the purpose of (i) collecting, asserting,
enforcing or perfecting any claim, right or interest of any kind that is
included in or relates to any of the Required Assets, (ii) defending or
compromising any claim or Proceeding relating to any of the Required Assets, or
(iii) otherwise carrying out or facilitating the Transactions. The power of
attorney referred to in the preceding sentence is and shall be coupled with an
interest and shall be irrevocable, and shall survive the dissolution or
insolvency of Seller or Assignor.
5.3 NOTIFICATION. Seller shall promptly notify the Purchaser in writing of:
(a) the discovery by Seller of any event, condition, fact or circumstance that
occurred or existed on or prior to the date of this Agreement and that caused or
constitutes a Breach of any representation or warranty made by Seller in this
Agreement, (b) any event, condition, fact or circumstance that occurs, arises or
exists after the date of this Agreement and that would cause or constitute a
Breach of any representation or warranty made by Seller in this Agreement if (i)
such representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event, condition, fact or circumstance or (ii)
such event, condition, fact or circumstance had occurred, arisen or existed on
or prior to the date of this Agreement and (c) any Breach of any covenant or
obligation of Seller set forth in this Agreement.
5.4 AUDITED FINANCIAL STATEMENTS. Seller shall use good faith commercially
reasonable efforts to cooperate with and otherwise assist Purchaser in
connection with the preparation of an audit of Assignor's books and records in
connection with the transaction contemplated hereby (the "AUDIT"). To the extent
not previously paid by the Assignor prior to the Closing Date, the Purchaser
agrees to pay all audit fees ("AUDIT FEES") associated with any such audit,
including, without limitation, all fees, costs, expenses and charges in
connection with (a) the auditors, (b) the contractors, audit support personnel
and other Persons providing direct or indirect assistance or support in the
preparation, review and completion of the audit(s) contemplated in connection
with the transaction contemplated herein. Anything contained herein
notwithstanding, the parties acknowledge and agree that, assuming that the
Seller has used good faith commercially reasonable efforts to cooperate with and
otherwise assist the Purchaser in the manner required pursuant to this Section
5.4, the failure of Purchaser to complete the audit of Assignor's books as
contemplated hereunder shall in no way
17
modify or amend the rights of the parties under this Agreement, or otherwise be
deemed a Breach by Seller in whole or in part whatsoever.
5.5 SELLER INFORMATION. In connection with the preparation, filing or
mailing by the Purchaser of any Regulation M-A Filing, Proxy Statement or Form
8-K, Seller shall use commercially reasonable good faith efforts to cooperate
with and otherwise assist Purchaser in connection with the preparation, filing
or compliance with all applicable securities laws, rules and regulations
required of Purchaser in connection with the transaction contemplated hereby at
Purchaser's sole cost and expense. Notwithstanding the foregoing, the parties
acknowledge and agree that, assuming that the Seller has used good faith
commercially reasonable efforts to cooperate with and otherwise assist Purchaser
as contemplated in this Section 5.5, the failure of Purchaser to comply with
applicable securities laws, rules and regulations required of Purchaser in
connection with the transaction contemplated hereby shall in no way modify or
amend the rights of the parties under this Agreement, or otherwise be deemed a
Breach by Seller in whole or in part whatsoever.
5.6 SURVIVAL OF COVENANTS. Each of the covenants set forth in this Section
5 shall survive the Closing.
6. COVENANTS OF THE PURCHASER.
6.1 CONFIDENTIALITY. The Purchaser shall ensure that all copies, if any, of
financial information, pricing, marketing plans, business plans, and other
confidential and/or proprietary information of Assignor and/or Seller disclosed
to the Purchaser in the course of negotiating the transaction contemplated by
this Agreement ("SELLER CONFIDENTIAL INFORMATION"), will be held in confidence
and not used or disclosed by Purchaser or any of its employees, affiliates or
stockholders, except to any public or private lender, for a period of six (6)
months from the Closing Date and will be promptly destroyed by the Purchaser, as
the case may be, or returned to Seller, upon Seller's written request to the
Purchaser, as the case may be; PROVIDED, HOWEVER that from and after the
Closing, the foregoing covenant shall not be applicable to any Seller
Confidential Information included in the Required Assets. It is agreed that
Seller Confidential Information will NOT include information that: (a) is proven
to have been known to Purchaser prior to receipt of such information from
Seller; (b) is disclosed by a third party having the legal right to disclose
such information and who owes
18
no obligation of confidence to Seller; (c) is now, or later becomes part of the
general public knowledge or literature, other than as a result of a breach of
this Agreement by Purchaser; (d) is independently developed by Purchaser without
the use of any Seller Confidential Information or (e) is required to be
disclosed by law or applicable governmental regulation including, without
limitation, in connection with the Purchaser's preparation and mailing to its
shareholders of the Proxy Statement or the filing of the Regulation M-A Filing
or Form 8-K with the SEC.
6.2 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. The Purchaser shall not issue
any press release or make any disclosure or public announcement relating to the
financial terms of this Agreement or identifying Seller without the prior
written approval of Seller, which shall not be unreasonably withheld.
Notwithstanding the foregoing, the Purchaser may disclose certain information
relating to this Agreement if required to do so by law or applicable
governmental regulation.
6.3 TAXES AND ANY OTHER CHARGES RELATED TO THE SALE. Purchaser agrees to
promptly pay all sales taxes, use taxes, transfer taxes, documentary charges,
recording fees or similar taxes, charges, fees or expenses that become payable
in connection with the sale of the Required Assets to the Purchaser under this
Agreement.
6.4 FURTHER ASSURANCES. From and after the Closing Date, Purchaser shall
use good faith commercially reasonable efforts to cooperate with and otherwise
assist Seller and promptly sign and deliver to Seller any and all such
additional documentation, instruments, endorsements and related information and
take such actions, or omit to take such actions, as Seller may reasonably
request for the purpose of effecting the transaction contemplated herein.
6.5 REPORTING. Purchaser shall provide Seller with quarterly status reports
regarding the Assumed Liabilities no later than fifteen (15) days after the
conclusion of each fiscal quarter until such time as all Assumed Liabilities are
fully satisfied (paid and/or released). Such reports shall contain a list of all
Assumed Liabilities, identifying the name, address and amount of the claim of
each claimant, and the amount of each Assumed Liability that has been paid
and/or released. Upon satisfaction of the Assumed Liabilities by Purchaser,
Purchaser shall provide Seller a certificate or other evidence acceptable
19
to Seller evidencing the satisfaction of such Assumed Liabilities.
6.6 WARRANTS.
(A) Subject to all required approvals of the Purchaser in connection with
the issuance thereof, and as soon as practicable following the receipt thereof,
Purchaser shall issue to Seller in the name of Seller as Assignee for the
Benefit of Creditors of Assignor warrants (the "SELLER WARRANTS") to purchase an
aggregate of 20,000 shares of common stock, par value $0.01 per share ("PARENT
COMMON STOCK") of Purchaser ("WARRANT SHARES") at an exercise price of $1.35 per
share. The Seller Warrants shall be substantially in the form that is attached
hereto as EXHIBIT E. Prior to the issuance of such Seller Warrants, and as a
condition thereto, Seller shall deliver to Purchaser an Investor Representation
Letter in the form attached hereto as EXHIBIT F. Subject to the provisions of
this Section 6.6, the parties expressly contemplate that:
(i) Seller shall not sell, transfer or assign the Seller Warrants, the
Warrant Shares or any interest therein, to the creditors of Assignor,
(ii) Seller, upon exercise of the Seller Warrants, will use any net
proceeds derived from the sale of such Warrant Shares for the benefit of the
unsecured creditors of Assignor as of the Assignment consistent with Seller's
fiduciary duties in connection with the estate of Assignor; provided, however,
that the provisions hereof shall in no manner be deemed to expand the
obligations or Liability, if any, of Seller as Assignee for the Benefit of
Creditors of Assignor to any creditor of Assignor; and
(iii) Except for fees and expenses incurred in connection with the
exercise of the Seller Warrants and the sale of any Warrant Shares (including,
without limitation, any legal, accounting or other fees, expenses and costs
incurred by or on behalf of Seller in connection with any opinion required or
appropriate for such exercise and sale as contemplated herein, and including,
without limitation, in connection with the registration and/or sale of the
Warrant Shares, or as otherwise reasonable and appropriate in connection with
compliance with the terms hereof, the Securities Act, the rules and regulations
promulgated thereunder, or any other relevant securities law, rule or
regulation), Seller shall not be entitled to use any proceeds from the sale of
such Warrant Shares for its own
20
benefit including, without limitation, for the payment of any Seller fees or
expenses except as otherwise provided herein.
(B) Purchaser shall use good faith commercially reasonable efforts to
seek all necessary approvals, including, without limitation, the approval of its
board of directors and shareholders, as applicable, following the Closing Date
in connection with the issuance of the Seller Warrants as contemplated herein.
6.7 SURVIVAL OF COVENANTS. The covenants set forth in this Section 6 shall
survive the Closing.
7. CONDITIONS PRECEDENT TO CLOSE.
7.1 CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligations of Purchaser
hereunder shall be subject to the satisfaction and fulfillment of each of the
following conditions, except as the Purchaser may expressly waive the same in
writing:
(A) ACCURACY OF REPRESENTATIONS. The representations and warranties
made by Seller in this Agreement shall be true and correct in all material
respects on and as of the date hereof;
(B) PERFORMANCE OF OBLIGATIONS. As of the Closing Date, Seller shall
have complied in all material respects with, and shall have fully performed, in
all material respects, all conditions, covenants and obligations of this
Agreement imposed on Seller and required to be performed or complied with by
Seller at, or prior to, the Closing Date;
(C) DELIVERY OF REQUIRED ASSETS. Seller shall have made the Required
Assets available to Purchaser as set forth in Section 1.3 above; and
(D) DELIVERY OF CLOSING DOCUMENTS. Seller shall have delivered, and
Purchaser shall have received, the documents described in Section 8.2 hereof in
form and substance reasonably acceptable to Purchaser.
(E) COMDISCO LOAN ASSUMPTION AGREEMENT. Comdisco shall have executed
and delivered to the Purchaser the Comdisco Loan Assumption Agreement, in the
form attached hereto as EXHIBIT G.
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(F) SYNDICATE LOAN ASSUMPTION AGREEMENT. Each of the members of the
Syndicate shall have executed and delivered to the Purchaser the Syndicate Loan
Assumption Agreement, in the form attached hereto as EXHIBIT H.
(G) BRIDGE LOAN ASSUMPTION AGREEMENT. The Collateral Agent (as such
term is defined in the Bridge Purchase Agreement) shall have executed and
delivered to the Purchaser the Bridge Loan Assumption Agreement, in the form
attached hereto as EXHIBIT I.
(H) CONSENT AND AGREEMENT. The Collateral Agent (as such term is
defined in the Bridge Purchase Agreement) shall have executed and delivered to
the Purchaser the Consent and Agreement, in the form attached hereto as EXHIBIT
J.
7.2 CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of Seller
hereunder shall be subject to the satisfaction and fulfillment of each of the
following conditions, except as Seller may expressly waive the same in writing:
(A) ACCURACY OF REPRESENTATIONS AND WARRANTIES ON CLOSING DATE. The
representations and warranties made by the Purchaser in this Agreement shall be
true and correct in all material respects on and as of the date hereof and at
and as of the Closing with the same force and effect as if they had been made on
and as of such date;
(B) PERFORMANCE OF OBLIGATIONS. As of the Closing Date, Purchaser
shall have complied in all material respects with, and shall have fully
performed, in all material respects, all conditions, covenants and obligations
of this Agreement imposed on Purchaser and required to be performed or complied
with by the Purchaser at, or prior to, the Closing Date; and
(C) DELIVERY OF CLOSING DOCUMENTS. Purchaser shall have delivered,
and Seller shall have received, the documents described in Section 8.1 hereof,
in form and substance reasonably satisfactory to Seller.
22
8. CLOSING OBLIGATIONS.
8.1 PURCHASER'S CLOSING OBLIGATIONS. At the Closing, Purchaser shall
deliver to Seller the following:
(A) The Assignment and Assumption Agreement, in the form attached
hereto as EXHIBIT K, signed by an authorized officer of Purchaser on behalf of
Purchaser; and
(B) Such other documents, instruments, endorsements, certificates and
agreements as reasonably requested by Seller to effectuate the transaction
contemplated herein.
8.2 SELLER'S CLOSING OBLIGATIONS. At the Closing, Seller shall deliver to
Purchaser the following:
(A) The Required Assets in accordance with Section 1.3;
(B) The Assignment and Assumption Agreement in the form attached hereto
as EXHIBIT K signed by an authorized officer of Seller on behalf of Seller, as
Assignee for the Benefit of Creditors of Assignee;
(C) The Xxxx of Sale Agreement, in the form attached hereto as EXHIBIT
L, signed by an authorized officer of Seller on behalf of Seller, as Assignee
for the Benefit of Creditors of Assignee;
(D) The Assignment of Trademarks, in the form attached hereto as
EXHIBIT M, signed by an authorized officer of Seller on behalf of Seller, as
Assignee for the Benefit of Creditors of Assignee; and
(E) Such other documents, instruments, endorsements, certificates and
agreements as reasonably requested by Purchaser to effectuate the transaction
contemplated herein.
9. MISCELLANEOUS PROVISIONS.
9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties made by Seller or the Purchaser herein, or in any
certificate, schedule or exhibit delivered pursuant hereto, shall survive the
Closing for a period of one (1) year after the Closing.
23
9.2 INDEMNIFICATION
(A) INDEMNIFIED LOSSES. For the purpose of this Section 9.2 and when
used elsewhere in this agreement, "Loss" shall mean and include any and all
liability, loss, damage, claim, expense, cost, fine, fee, penalty, obligation or
injury including, without limitation, those resulting from any and all actions,
suits, proceedings, demands, assessments, judgments, award or arbitration,
together with reasonable costs and expenses including the reasonable attorneys'
fees and other legal costs and expenses relating thereto.
(B) NO INDEMNIFICATION BY SELLER. Seller is selling to the Purchaser
the Required Assets defined in this Agreement "as is" and "where is", with no
representations or warranties as to merchantability, fitness or usability or in
any other regard (except for the limited representations and warranties
specifically set forth above) and does not agree to defend, indemnify or hold
harmless Purchaser, any parent, or any subsidiary or affiliate of Purchaser or
any director, officer, employee, stockholder, agent or attorney of Purchaser or
of any parent, subsidiary or affiliate of Purchaser from and against and in
respect of any Loss which arises out of or results from the transaction
described herein.
(C) INDEMNIFICATION BY PURCHASER. Subject to the provisions and
limitations set forth in this Section 9.2, Purchaser agrees to defend, indemnify
and hold harmless Seller, any parent, subsidiary or affiliate of Seller and any
director, officer, employee, stockholder, agent or attorney of Seller or of any
parent, subsidiary or affiliate of Seller (individually, a "SELLER INDEMNITEE"
and, collectively, the "SELLER INDEMNITEES") from and against and in respect of
any Loss which arises out of or results from: (i) the use of the Required Assets
after the Closing; or (ii) any Breach by the Purchaser with respect to the
payment or discharge by Purchaser in connection with any Assumed Liabilities
listed in Section 2.2(a) above; PROVIDED, HOWEVER, that nothing in this Section
9.2 shall impose on Purchaser any duty to indemnify Seller for any Excluded
Liabilities.
(D) PERIOD FOR MAKING CLAIMS. A claim for indemnification by a Seller
Indemnitee under this Section 9.2 may be brought, if at all, at any time after
the Closing Date, with respect to any claim or claims for indemnification under
this Section 9
24
(E) MAXIMUM LIABILITY. Notwithstanding anything contained herein to the
contrary, the liability of the Purchaser with respect to any claim for
indemnification by a Seller Indemnitee pursuant to Section 9.2(c)(ii) shall be
limited to $3,682,037; PROVIDED, HOWEVER, that the liability of the Purchaser
under this Section 9.2 shall not be limited pursuant to this Section 9.2(e) with
respect to any claim for indemnification by a Seller Indemnitee either (i)
pursuant to Section 9.2(c)(i) or (ii) pursuant to Section 9.2(c)(ii) solely with
respect to any Assumed Liability for which a claim for indemnification by a
Seller Indemnitee may be made pursuant to Section 2.2(a)(iv) and which relates
to the use of the Required Assets after the Closing Date.
9.3 FEES AND EXPENSES. Except as otherwise expressly provided herein, each
of the parties hereto shall bear its own expenses (including without limitation
attorneys' fees) in connection with the negotiation and consummation of the
transaction contemplated hereby.
9.4 ATTORNEYS' FEES. If any legal action or other legal proceeding,
including, without limitation, a suit or arbitration, relating to the
enforcement or interpretation of any provision of this Agreements or the
documents executed in connection herewith, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and disbursements (in
addition to any other relief to which the prevailing party may be entitled) to
be fixed in an amount by the court or arbitrator(s) (including, without
limitation, costs, expenses and fees on appeal). The prevailing party will be
entitled to recover its costs of suit or arbitration, as applicable, regardless
of whether such suit or arbitration proceeds to a final judgment or award.
9.5 NOTICES. Any notice or other communication required or permitted to be
delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties hereto):
25
if to the Seller:
Sherwood Partners, Inc. COPY TO:
000 Xxxxxxxx Xxxx., Xxxxx 000 Sulmeyer, Kupetz, Xxxxxxx
Xxx Xxxxxxx, XX 00000-0000 & Xxxxxxx
Tel: 000-000-0000 000 X. Xxxxx Xxx., 00xx Xxxxx
Fax: 000-000-0000 Xxx Xxxxxxx, XX 00000
Email: xxx@xxxxxxx.xxx Tel: 000-000-0000
Attention: Xxxxxxx Xxxxx Fax: 000-000-0000
Email: xxxxxxx@xxxx.xxx
Attention: Xxxxx X. Xxxxxx, Esq.
if to the Purchaser:
SEEC, Inc. COPY TO:
Park West One
Suite 200 Xxxxx & Xxxxxxx, P.C.
Cliff Mine Road 00 Xxxxxxx Xx., 00xx Xxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000-0000
Tel: 000-000-0000 Tel: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
Email: xxxxx@xxxx.xxx Email: xxxxxxxx@xxxxxxxx.xxx
Attention: Xxxx Xxxx Attention: Xxxxxx X. Xxxxxxx
9.6 TIME OF THE ESSENCE. Time is of the essence of this Agreement.
9.7 HEADINGS. The underlined headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
9.8 COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall constitute an original and all of which, when taken
together, shall constitute one agreement.
26
9.9 GOVERNING LAW. This Agreement shall be construed in accordance with,
and governed in all respects by, the internal laws of the State of Delaware
(without giving effect to principles of conflicts of laws).
9.10 SUCCESSORS AND ASSIGNS; PARTIES IN INTEREST.
(A) This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and the respective successors and assigns. Notwithstanding
anything contained herein to the contrary, Purchaser expressly agrees to assume
any and all immigration-related obligations of Assignor and as such, and solely
for purposes of the applicable federal and state immigration regulations,
Purchaser is the "successor-in-interest" to Assignor; PROVIDED, HOWEVER, that
the preceding sentence shall neither expand or limit the obligations of the
parties hereto except as expressly provided with respect to Purchaser in
connection with applicable federal and state immigration regulations.
(B) The Purchaser may freely assign any or all of its rights under this
Agreement, in whole or in part, to any other Person without obtaining the
consent or approval of any other Person. Seller may not assign any of its rights
or delegate any of its obligations under this Agreement without the Purchaser's
prior written consent (which consent shall not be unreasonably withheld).
(C) None of the provisions of this Agreement is intended to expressly
or impliedly provide, or shall be construed to confer upon or give, any rights
or remedies to any Person other than the parties to this Agreement, the
Syndicate, Comdisco and the Bridge Lenders, and their respective successors and
assigns (if any). Without limiting the generality of the foregoing, (i) no
employee of Assignee shall have any rights under this Agreement or under any of
the other Transactional Agreements, and (ii) no creditor of Assignor shall have
any rights under this Agreement or any of the other Transactional Agreements
except as otherwise contemplated herein and therein.
9.11 AMENDMENT; WAIVER. Any term or provision of this Agreement may be
amended only by a writing signed by Seller and Purchaser. The observance of any
term or provision of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a writing
signed by the party to be bound by such waiver. No waiver by a party of any
breach of this Agreement will be deemed
27
to constitute a waiver of any other breach or any succeeding breach.
9.12 SEVERABILITY. If any provision of this Agreement is for any reason and
to any extent deemed to be invalid or unenforceable, then such provision shall
not be voided but rather shall be enforced to the maximum extent then
permissible under then applicable law and so as to reasonably effect the intent
of the parties hereto, and the remainder of this Agreement will remain in full
force and effect.
9.13 ENTIRE AGREEMENT. This Agreement, together with the Exhibits and
Schedules attached hereto (which are hereby incorporated herein by reference),
and any agreements or documents to be executed in connection herewith, together
constitute the entire understanding of the parties relating to the subject
matter hereof and thereof and supersede all prior agreements and understandings
among or between any of the parties relating to the subject matter thereof, and
there are no agreements or commitments with respect to the transactions
contemplated herein except as set forth in this Agreement.
9.14 CONSTRUCTION.
(A) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine gender
shall include the feminine and neuter genders; the feminine gender shall include
the masculine and neuter genders; and the neuter gender shall include the
masculine and feminine genders.
(B) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
(C) As used in this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words "without limitation."
(D) Except as otherwise indicated, all references in this Agreement to
"Sections," "Schedules" and "Exhibits" are intended to refer to Sections of this
Agreement, Schedules to this Agreement and Exhibits to this Agreement.
28
9.15 EXECUTION IN COUNTERPARTS. For the convenience of the parties,
this Agreement may be executed in one or more counterparts, each of which shall
be deemed an original and all of which together shall constitute one and the
same instrument.
29
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Asset Purchase Agreement as of the date first above written.
SEEC, INC.,
a Pennsylvania corporation
By: /s/ Xxxxxxxx Xxxx
-----------------------------
Name: Xxxxxxxx Xxxx
Title: President and CEO
SHERWOOD PARTNERS, INC.,
a California corporation
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
XXXXXXX X. XXXXX, PRESIDENT
30
LIST OF SCHEDULE OF EXHIBITS AND SCHEDULES
Exhibit A Certain Definitions
Exhibit B General Assignment Agreement
Exhibit C Required Assets
Exhibit D Excluded Assets
Exhibit E Seller Warrants
Exhibit F Seller Representation Letter
Exhibit G Comdisco Loan Assumption Agreement
Exhibit H Syndicate Loan Assumption Agreement
Exhibit I Bridge Loan Assumption Agreement
Exhibit J Consent and Agreement
Exhibit K Assignment and Assumption Agreement
Exhibit L Xxxx of Sale
Exhibit M Assignment of Trademarks
Schedule 2.3 List of Business Continuity Unsecured Creditors
1.
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
ACCOUNTS RECEIVABLE. "Accounts Receivable" shall mean, with respect to
the rights assigned by Assignor to Seller under the Assignment, and subject to
the terms and conditions hereof, all trade accounts receivable, all evidences of
indebtedness arising out of the sale of Inventory or other property, assets or
services to any Person and, to the extent earned by performance which has
occurred, all rights to receive payments arising out of the sales of Inventory
or other property, assets or services to such Person.
AGREEMENT. "Agreement" shall mean the Asset Purchase Agreement to which
this Exhibit A is attached, as it may be amended from time to time.
ASSIGNOR CONTRACT. "Assignor Contract" shall mean any Contract to which
Assignor is a party as of immediately prior to the Assignment or otherwise
related to or involving the business of Assignor or the Assets, including those
in which any of the Required Assets is or may become bound.
ASSETS. "Assets" shall mean all of Asera's right, title and interest in
and to tangible and intangible assets owned by or on behalf of Asera, or
otherwise used in connection with the business of Asera (wherever located and
whether or not required to be reflected on a balance sheet prepared in
accordance with generally accepted accounting principles).
BREACH. There shall be deemed to be a "Breach" of a representation,
warranty, covenant, obligation or other provision if there is or has been (a)
any material inaccuracy in or material breach (including any inadvertent or
innocent breach) of, or any material failure (including any inadvertent failure)
to comply with or perform, such representation, warranty, covenant, obligation
or other provision, or (b) any material claim (by any Person) or other
circumstance that is inconsistent with such representation, warranty, covenant,
obligation or other provision; and the term "Breach" shall be deemed to refer to
any such inaccuracy, breach, failure, claim or circumstance.
CONSENT. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
CONTRACT. "Contract" shall mean any written, oral, implied or other
agreement, contract, lease, license, indenture, understanding, arrangement,
instrument, note, guaranty, indemnity, representation, warranty, deed,
assignment, power of attorney, certificate, purchase order, work order,
insurance policy, benefit plan, commitment, covenant, assurance or undertaking
of any nature.
DAMAGES. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, Liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee (including any legal fee, expert fee, accounting fee or
advisory fee), charge, cost (including any cost of investigation) or expense of
any nature.
EMPLOYEE AGREEMENT. "Employee Agreement" shall mean each management,
employment, severance, consulting, relocation, repatriation or expatriation
agreement or other Contract between Assignor or any ERAS Affiliate and any
Assignor Employee.
EMPLOYEE PLAN. "Employee Plan" shall mean any plan, program, policy,
practice, Contract or other arrangement providing for compensation, severance,
termination pay, deferred compensation, performance awards, stock or
stock-related awards, fringe benefits or other employee benefits or remuneration
of any kind, whether written, unwritten or otherwise, funded or unfunded,
including each "employee benefit plan," within the meaning of Section 3(3) of
ERISA (whether or not ERISA is applicable to such plan), that is or has been
maintained, contributed to, or required to be contributed to, by Assignor or any
ERISA Affiliate for the benefit of any Assignor Employee, or with respect to
which Assignor or any ERISA Affiliate has or may have any liability or
obligation, except such definition shall not include any Employee Agreement.
ENTITY. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, cooperative, foundation, society,
political party, union, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization or
entity.
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
ERISA AFFILIATE. "ERISA Affiliate" shall mean any Person under common
control with Assignor within the meaning of Sections 414(b), (c), (m) and (o) of
the Code, and the regulations issued thereunder.
EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, any the rules promulgated thereunder.
FORM 8-K. "Form 8-K" shall mean any current reports on Form 8-K filed
by the Purchaser with the SEC, and any amendments thereto, as required under the
Exchange Act in connection with the Assignment, the Transactions or any other
transactions involving Seller, Assignor or Xxxxxxx Xxxxxxx Xxxxxxxx and Xxxxx.
GAAP. "GAAP" shall mean generally accepted accounting principles.
GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" shall mean
any: (a) permit, license, certificate, franchise, concession, approval, consent,
ratification, permission, clearance, confirmation, endorsement, waiver,
certification, designation, rating, registration, qualification or authorization
issued, granted, given or otherwise made available by or under the authority of
any Governmental Body or pursuant to any Legal Requirement; or (b) right under
any Contract with any Governmental Body.
GOVERNMENTAL BODY. "Governmental Body" shall mean any: (a) nation,
principality, state, commonwealth, province, territory, county, municipality,
district or other jurisdiction of any nature; (b) federal, state, local,
municipal, foreign or other government; (c) governmental or quasi-governmental
authority of any nature (including any governmental division, subdivision,
department, agency, bureau, branch, office, commission, council, board,
instrumentality, officer, official, representative, organization, unit, body or
Entity and any court or other tribunal); (d) multi-national organization or
body; or (e) individual, Entity or body exercising, or entitled to exercise, any
executive, legislative, judicial, administrative, regulatory, police, military
or taxing authority or power of any nature.
INTELLECTUAL PROPERTY. "Intellectual Property" shall mean algorithms,
APIs, apparatus, circuit designs and assemblies, gate arrays, IP cores, net
lists, photomasks, semiconductor devices, test vectors, databases, data
collections, diagrams, formulae, inventions (whether or not patentable),
know-how,
logos, marks (including brand names, product names, logos, and slogans),
methods, network configurations and architectures, processes, proprietary
information, protocols, schematics, specifications, software, software code (in
any form, including source code and executable or object code), listings,
annotations, routines, subroutines, concepts, flow charts techniques, user
interfaces, URLs, web sites, enhancements, designs, improvements, works of
authorship and other forms of technology (whether or not embodied in any
tangible form and including all tangible embodiments of the foregoing, such as
instruction manuals, laboratory notebooks, prototypes, work product,
programmers' notes, samples, studies and summaries) including the goodwill
associated therewith, licenses, sublicenses granted with respect thereto and
remedies against infringement and rights of protection of interests therein
under the laws of all jurisdictions.
INTELLECTUAL PROPERTY RIGHTS. "Intellectual Property Rights" shall mean
all past, present, and future rights of the following types, which may exist or
be created under the laws of any jurisdiction in the world: (A) rights
associated with works of authorship, including exclusive exploitation rights,
copyrights, moral rights and mask works; (B) trademark and trade name rights and
similar rights; (C) trade secret rights; (D) patent and industrial property
rights; (E) other proprietary rights in Intellectual Property; and (F) rights in
or relating to registrations, renewals, extensions, combinations, divisions, and
reissues of, and applications for, any of the rights referred to in clauses
"(A)" through "(E)" above.
IRS. "IRS" shall mean the United States Internal Revenue Service.
LEGAL REQUIREMENT. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, legislation, constitution,
principle of common law, resolution, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, ruling, directive,
pronouncement, requirement, specification, determination, decision, opinion or
interpretation issued, enacted, adopted, passed, approved, promulgated, made,
implemented or otherwise put into effect by or under the authority of any
Governmental Body.
LIABILITY. "Liability" shall mean any debt, obligation, duty, expense,
loss, Damage or liability of any nature (including any unknown, undisclosed,
unmatured, unaccrued, unasserted, contingent, indirect, conditional, implied,
vicarious, derivative, joint, several or secondary liability), regardless of
whether such debt, obligation, duty, expense,
loss, Damage or would be required to be disclosed on a balance sheet prepared in
accordance with generally accepted accounting principles and regardless of
whether such debt, obligation, duty, expense, loss, Damage or liability is
immediately due and payable.
ORDER. "Order" shall mean any: (a) order, judgment, injunction, edict,
decree, ruling, pronouncement, determination, decision, opinion, verdict,
sentence, subpoena, writ or award issued, made, entered, rendered or otherwise
put into effect by or under the authority of any court, administrative agency or
other Governmental Body or any arbitrator or arbitration panel; or (b) Contract
with any Governmental Body entered into in connection with any Proceeding.
PROCEEDING. "Proceeding" shall mean any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding and any informal proceeding), prosecution,
contest, hearing, inquiry, inquest, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving, any
Governmental Body or any arbitrator or arbitration panel.
PROXY STATEMENT "Proxy Statement" shall mean any proxy statement
prepared and filed by the Purchaser with the SEC pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended, to solicit approval of its
shareholders with respect to any transactions involving Seller, Assignor or
Xxxxxxx Xxxxxxx Xxxxxxxx and Xxxxx.
PERSON. "Person" shall mean any individual, entity or governmental
body.
REGULATION M-A FILING. "Regulation M-A Filing" shall mean any filings
pursuant to Rule 165 under the Securities Act of 1933, as amended, or Rule
14a-12 under the Exchange Act of 1934, as amended, to be made by the Purchaser
in connection with the Assignment, the Transactions or any other transactions
involving Seller, Assignor or Xxxxxxx Xxxxxxx Xxxxxxxx and Xxxxx.
REPRESENTATIVES. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
SEC. "SEC" shall mean the Securities and Exchange Commission.
TAX. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, estimated tax, gross receipts tax, value-added tax, surtax,
excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax,
property tax, business tax, occupation tax, inventory tax, occupancy tax,
withholding tax or payroll tax), levy, assessment, tariff, impost, imposition,
toll, duty (including any customs duty), deficiency or fee, and any related
charge or amount (including any fine, penalty or interest), that is, has been or
may in the future be (a) imposed, assessed or collected by or under the
authority of any Governmental Body, or (b) payable pursuant to any tax-sharing
agreement or similar Contract.
TRANSACTIONAL AGREEMENTS. "Transactional Agreements" shall mean: (a)
the Agreement; (b) the Assignment and Assumption Agreement; (c) the Xxxx of
Sale, (d) the Assignment of Patents, (e) the Assignment of Trademarks and (e)
the Assignment of Copyrights.
TRANSACTIONS. "Transactions" shall mean (a) the execution and delivery
of the respective Transactional Agreements, and (b) all of the transactions
contemplated by the respective Transactional Agreements, including: (i) the sale
of the Assets by Seller to the Purchaser in accordance with the Agreement; (ii)
the assumption of the Assumed Liabilities by the Purchaser pursuant to the
Assumption Agreement; and (iii) the performance by Seller and the Purchaser of
their respective obligations under the Transactional Agreements, and the
exercise by Seller or the Purchaser of their respective rights under the
Transactional Agreements.
WARN ACT. "WARN Act" shall mean the Workers Adjustment and Retraining
and Notification Act of 1988, as amended.
EXHIBIT B
---------
General Assignment Agreement
EXHIBIT C
---------
Required Assets
EXHIBIT D
---------
Excluded Assets
EXHIBIT E
---------
Seller Warrants
EXHIBIT F
---------
Seller Representation Letter
EXHIBIT G
---------
Comdisco Loan Assumption Agreement
EXHIBIT H
---------
Syndicate Loan Assumption Agreement
EXHIBIT I
---------
Bridge Loan Assumption Agreement
EXHIBIT J
---------
Consent and Agreement
EXHIBIT K
---------
Assignment and Assumption Agreement
EXHIBIT L
---------
Xxxx of Sale
EXHIBIT M
---------
Assignment of Trademarks
