Exhibit 10/36
EXECUTION COPY
ASSET PURCHASE AGREEMENT
BETWEEN
LIGHTBRIDGE, INC.,
AS SELLER
VESTA CONSUMER CREDIT SERVICES, INC.,
AS BUYER
AND
VESTA CORPORATION
DATED AS OF FEBRUARY 20, 2007
CONTENTS
1. Definitions........................................................... 1
2. Purchase and Sale of Assets........................................... 7
2.1 Purchase and Sale............................................... 7
2.2 Excluded Assets................................................. 9
2.3 Assumption of Liabilities....................................... 10
2.4 Excluded Liabilities............................................ 11
2.5 Instruments of Sale and Transfer................................ 12
3. Purchase Price........................................................ 13
3.1 Purchase Price.................................................. 13
3.2 Allocation of Purchase Price.................................... 13
3.3 Price for Restrictive Covenants................................. 13
3.4 Withholding..................................................... 13
4. Closing............................................................... 13
4.1 Closing Date.................................................... 13
4.2 Closing Payments and Deliveries................................. 14
5. Representations and Warranties of Seller.............................. 14
5.1 Organization, Valid Existence, etc.............................. 14
5.2 Corporate Authority............................................. 14
5.3 No Conflict..................................................... 15
5.4 Consents and Approvals.......................................... 15
5.5 Financial Information........................................... 15
5.6 Absence of Certain Changes or Events............................ 16
5.7 Taxes........................................................... 16
5.8 Property; Assets................................................ 18
5.9 Equipment....................................................... 18
5.10 Environmental and Safety Matters................................ 19
5.11 Contracts....................................................... 20
5.12 Claims and Legal Proceedings.................................... 21
5.13 Employees; Labor Matters........................................ 21
-i-
5.14 Intellectual Property........................................... 22
5.15 Inventory....................................................... 28
5.16 Permits......................................................... 28
5.17 Warranties...................................................... 28
5.18 Compliance With Law............................................. 28
5.19 Insurance....................................................... 29
5.20 Employee Plans.................................................. 29
5.21 Brokerage....................................................... 30
5.22 Absence of Questionable Payments................................ 30
5.23 Customers and Suppliers......................................... 30
5.24 Controls........................................................ 31
5.25 Full Disclosure................................................. 31
6. Representations and Warranties of Buyer............................... 31
6.1 Organization, Valid Existence, etc.............................. 31
6.2 Transaction Documents........................................... 31
6.3 No Conflict..................................................... 32
6.4 Claims and Local Proceedings.................................... 32
6.5 Brokerage....................................................... 32
7. Certain Covenants..................................................... 32
7.1 Access.......................................................... 32
7.2 Assignment of Contracts......................................... 34
7.3 Conduct of Business Prior to Closing............................ 34
7.4 Employees....................................................... 36
7.5 Covenants to Satisfy Conditions................................. 37
7.6 Pre-Closing Accounts Receivable................................. 37
8. Conditions Precedent to Obligations of Buyer.......................... 37
8.1 No Injunction or Litigation..................................... 37
8.2 Representations, Warranties and Covenants....................... 37
8.3 No Material Adverse Effect...................................... 38
8.4 Consents and Approvals.......................................... 38
8.5 Taxes........................................................... 38
-ii-
8.6 Delivery of Documents and Business Software..................... 39
8.7 Satisfaction of Conditions...................................... 40
9. Conditions Precedent to Obligations of Seller......................... 40
9.1 No Injunction or Litigation..................................... 40
9.2 Representations, Warranties and Covenants....................... 40
9.3 Delivery of Documents........................................... 40
9.4 Satisfaction of Conditions...................................... 41
9.5 Consents and Approvals.......................................... 41
10. Certain Post-Closing Covenants........................................ 41
10.1 Further Assurances.............................................. 41
10.2 Books and Records............................................... 42
10.3 Services Requests and Product Orders............................ 42
10.4 Warranty Claims................................................. 42
10.5 Post-Closing Cooperation........................................ 42
10.6 Payment of Business Excluded Liabilities........................ 42
10.7 Customer Payments............................................... 42
10.8 Data Management................................................. 43
10.9 Confidentiality Obligations of Buyer following the Closing...... 43
11. Taxes and Costs; Apportionments....................................... 43
11.1 Transfer Taxes.................................................. 43
11.2 Transaction Costs............................................... 43
11.3 Apportionments.................................................. 44
11.4 Employment Taxes................................................ 44
12. Covenants Not to Compete.............................................. 44
12.1 Covenants....................................................... 44
12.2 Minor Investments............................................... 45
12.3 Remedies........................................................ 45
13. Survival and Indemnification.......................................... 45
13.1 Survival........................................................ 45
13.2 Indemnification by Seller....................................... 46
13.3 Indemnification by Buyer........................................ 46
-iii-
13.4 Threshold and Time Limitations.................................. 47
13.5 Procedure....................................................... 47
13.6 Exclusive Remedy................................................ 49
13.7 Specific Performance............................................ 49
14. Termination........................................................... 49
14.1 Termination..................................................... 49
14.2 Effect of Termination........................................... 50
15. Miscellaneous......................................................... 50
15.1 Confidentiality Obligations of Seller Following the Closing..... 50
15.2 Public Announcements............................................ 51
15.3 Severability.................................................... 51
15.4 Modification and Waiver......................................... 51
15.5 Notices......................................................... 51
15.6 Assignment...................................................... 53
15.7 Captions........................................................ 53
15.8 Entire Agreement................................................ 53
15.9 No Third-Party Rights........................................... 53
15.10 Counterparts.................................................... 53
15.11 Governing Law; Jurisdiction and Venue........................... 54
SCHEDULES AND EXHIBITS
Schedule A Business Software
Schedule B Other Encumbrances
Schedule C Products
Schedule 7.4 Offeree Employees
Exhibit 2.5(a) Xxxx of Sale and Assignment
Exhibit 2.5(b) Assumption Agreement
Exhibit 8.6(c) Lease Assignment and Assumption
Exhibit 8.6(d) Assignment of Trademarks
Exhibit 8.6(e) Assignment of Patents
Exhibit 8.6(i) Transition Services Agreement
Disclosure Memorandum
-iv-
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is made as of February 20,
2007, by and among Lightbridge, Inc., a Delaware corporation ("SELLER"), Vesta
Consumer Credit Services, Inc. ("BUYER") and Vesta Corporation.
RECITALS
A. Seller desires and intends to sell certain of its assets used in or
related to the Business (as defined below) to Buyer, at the price and on the
terms and conditions herein set forth.
B. Buyer desires and intends to purchase such assets and to assume certain
of the operating liabilities relating to the Business, at the price and on the
terms and conditions herein set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the covenants and agreements set forth
herein, the parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
meanings set forth below:
"AFFILIATE": means with respect to any entity, any other Person or other
entity which, directly or indirectly, controls or is controlled by or is under
common control with such entity. "Control" (including, with correlative
meanings, the terms "controlled by" and "under common control with"), as used
with respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.
"AFFILIATED GROUP": As defined in Section 5.7(a).
"AGREEMENT": This Agreement and all Schedules and Exhibits hereto,
including, without limitation, the Disclosure Memorandum.
"ASSETS": As defined in Section 2.1.
"ASSUMED LIABILITIES": As defined in Section 2.3.
"ASSUMPTION AGREEMENT": As defined in Section 2.5.
"XXXX OF SALE": As defined in Section 2.5.
1
"BUSINESS": The business, operations and activities of Seller relating to
its Telecom Decisioning Services business as conducted on the Closing Date.
"BUSINESS DAY": Any day that is not a Saturday, a Sunday or any other day
on which banks generally are required or authorized to be closed in Portland,
Oregon.
"BUSINESS SOFTWARE": Seller's proprietary software (in source code and
object code format) used in the Business, which software is identified on
SCHEDULE A.
"CLAIM": Any claim, demand, cause of action, suit, proceeding, arbitration,
hearing or investigation.
"CLOSING": The consummation of the purchase and sale of the Assets under
this Agreement.
"CLOSING DATE": The date upon which the Closing becomes effective.
"CODE": The Internal Revenue Code of 1986, as amended, and all regulations
promulgated thereunder, as in effect from time to time.
"CONTRACT": Any contract, agreement, lease, license, grant of immunity from
suit, commitment, arrangement, purchase or sale order, or undertaking, whether
written or oral.
"DISCLOSURE MEMORANDUM": That certain Disclosure Memorandum dated as of the
date hereof and delivered by Seller to Buyer on the date hereof in connection
with this Agreement.
"EMPLOYEE BENEFIT PLAN": Any employee benefit plan, program, policy,
practice, contract, agreement, fund or other arrangement (including any
"employee benefit plan," as defined in Section 3(3) of ERISA) or any employment,
consulting or personal services contract, whether written or oral or funded or
unfunded, (a) sponsored, maintained or contributed to by Seller or to which
Seller is a party, (b) covering or benefiting any current or former officer,
employee, agent, director or independent contractor of Seller (or any dependent
or beneficiary of any such individual), or (c) with respect to which Seller has
(or could have) any obligation or liability, in each case that relates to the
Business.
"ENCUMBRANCE": Any security interest, mortgage, lien, charge, option,
easement, license, adverse claim or restriction of any kind, including, without
limitation, any restriction on the use, transfer, voting, receipt of income or
other exercise of any attributes of ownership. For avoidance of doubt, the term
"restriction on the use" or any similar expression does not mean or refer to
intellectual property rights of another the violation of which constitutes or
could give rise to a claim of infringement.
"ENVIRONMENT": The air, ground (surface and subsurface) or water (surface
and groundwater), or the workplace.
2
"ENVIRONMENTAL AND SAFETY LAW": Any federal, state, local or other Law
pertaining to public or worker health, welfare or safety or the Environment
(including, without limitation, those Laws regulating the disposal, removal,
production, storing, refining, handling, transferring, processing or
transporting of Hazardous Materials), including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
42 U.S.C. Section 9601 et seq., as amended by the Superfund Amendments and
Reauthorization Act of 1986; the Resource Conservation and Recovery Act of 1976,
as amended, 42 U.S.C. Section 6901 et seq.; the Federal Clean Air Act, 42 U.S.C.
Section 7401-7626; the Federal Water Pollution Control Act and Federal Clean
Water Act of 1977, as amended, 33 U.S.C. Section 1251 et seq.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 135 et seq.; the
Federal Environmental Pesticide Control Act, the Federal Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq.; the Federal Safe Drinking Water
Act, 42 U.S.C. Section 300(f) et seq.; the Emergency Planning and Community
Right-To-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Occupational
Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq.; and any applicable
Judgments issued by a court of competent jurisdiction in connection with any of
the foregoing.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended,
and all regulations and rulings promulgated thereunder, as in effect from time
to time.
"ERISA AFFILIATE": Any corporation, partnership, limited liability company,
sole proprietorship, trade, business or other entity or organization that,
together with the Company, is or was treated as a single employer under Section
414(b), (c), (m) or (o) of the Code.
"EXCLUDED ASSETS": As defined in Section 2.2.
"EXCLUDED CONTRACTS": As defined in Section 2.2.4.
"EXCLUDED LIABILITIES": As defined in Section 2.4.
"FACILITIES": All structures, improvements and fixtures located on the
Leased Real Property.
"GAAP": United States generally accepted accounting principles.
"GOVERNMENTAL BODY": Any federal, state or other court or governmental
body, any subdivision, agency, commission or authority thereof, or any
quasi-governmental or private body exercising any regulatory or taxing authority
thereunder, domestic or foreign.
"HAZARDOUS MATERIALS": Any hazardous or toxic substances, materials and
wastes, including, without limitation, those substances included in the
definitions of "Hazardous Substances," "Hazardous Materials," "Toxic
Substances," "Hazardous Waste," "Solid Waste," "Pollutant," or "Contaminant" in
any Environmental and Safety Law or the Hazardous Material Transportation Act,
49 U.S.C. Section 1801 et seq., or in the regulations promulgated
3
pursuant to those Laws; those substances listed in the United States Department
of Transportation Table (49 C.F.R. Section 172.101 and any amendments thereto);
such other substances, materials and wastes which are regulated or are
classified as hazardous or toxic by any Governmental Body; and asbestos,
polychlorinated biphenyls and oil and petroleum products or by-products.
"INDEMNIFIED PARTY": As defined in Section 13.5.
"INDEMNIFYING PARTY": As defined in Section 13.5.
"INTELLECTUAL PROPERTY RIGHTS": All worldwide intellectual property rights
of any kind or nature, including without limitation all domestic and foreign
trade names, trademarks (including common-law trademarks), service marks, domain
names, art work, packaging, plates, emblems, logos, insignia, works of
authorship, and copyrights, and any related registrations and applications, and
all goodwill associated therewith, all domestic and foreign patents and patent
applications, all technology, know-how, show-how, trade secrets, processes,
formulae, drawings, inventions, methods, designs, schematics, specifications,
algorithms, systems, forms, technical and user manuals, data, databases and
database rights, compilations, computer programs and software, object and source
code, software and data licenses, firmware, applications, tools and toolsets,
interfaces, product information and development work-in-progress and all
documentary evidence of any of the foregoing, and versions, derivatives,
enhancements and improvements of any of the foregoing, and all copies and
tangible embodiments thereof (in whatever form or medium), together with all
statutory, contractual and other claims, demands and rights for royalties, fees
or other income from any of the foregoing, and all rights to xxx for
infringement or violation of any of the foregoing, and all proceeds thereof.
"JUDGMENT": Any judgment, order, award, writ, injunction, ruling or decree
of any Governmental Body or arbitrator.
"KNOWLEDGE": With reference to (a) Seller, the actual knowledge of the
directors and executive officers of Seller and Xxxxxx Xxxxxx, Xxxxx XxXxxxx and
Xxxx Xxxxxxxxx, after due inquiry with respect to the particular item or topic;
and (b) Buyer, the actual knowledge of the directors and officers of Buyer,
after due inquiry with respect to the particular item or topic.
"LAW" shall mean all applicable provisions of all constitutions, treaties,
statutes, laws (including common laws), rules, regulations, ordinances, codes or
orders of any Governmental Body.
"LEASED REAL PROPERTY": The real property described in Section 2.1.6.
"LOSS": Any loss, damage, Judgment, debt, liability, obligation, fine,
penalty, cost or expense (including, without limitation, any legal and
accounting fees or expenses).
4
"MATERIAL ADVERSE EFFECT": With respect to any event or circumstance
(either individually or in the aggregate with all other such events and
circumstances), an effect caused thereby or resulting therefrom that would be
materially adverse as to, or in respect of:
(a) the Assets, or the Assumed Liabilities, in each case taken as a whole;
(b) the business, operations, profits, assets, liabilities, or condition
(financial or other) of the Business;
(c) the ability of Seller to perform its obligations under this Agreement
or any Transaction Document; or
(d) the validity or enforceability of this Agreement or any Transaction
Document.
The expiration or termination of any customer contract or reduction in goods or
services obtained by a customer from Seller shall not be deemed a Material
Adverse Effect.
"OFFEREE EMPLOYEES": As defined in Section 7.4.
"PERMIT": Any permit, license, approval, certification, endorsement or
qualification of any Governmental Body or any other Person (including, without
limitation, any customer).
"PERMITTED ENCUMBRANCES": (a) inchoate workmen's, repairmen's or other
similar Encumbrances arising or incurred in the ordinary course of business
consistent with past practices in respect of obligations which are not overdue
and that constitute Assumed Liabilities; (b) recorded easements; (c) building
codes, zoning ordinances, planning restrictions and other Laws or determinations
of any Governmental Body heretofore, now or hereafter enacted, made or issued by
any such authority affecting the property; and (d) any other Encumbrances set
forth on SCHEDULE B to this Agreement.
"PERSON": an individual, partnership, corporation, limited liability
company, trust, joint venture, unincorporated organization or a government
agency or subdivision thereof.
"PERSONAL PROPERTY": As defined in Section 5.8.
"PRODUCTS": Any and all products or services relating to the Business that
Seller now licenses, provides or sells or is developing, including, without
limitation, those listed in SCHEDULE C hereto.
"PURCHASE PRICE": As defined in Section 3.1.
"REAL PROPERTY LEASE": The lease relating to the real property described in
SCHEDULE 2.1.6 of the Disclosure Memorandum.
"REMEDIAL ACTION": Any investigation, site assessment, monitoring or other
evaluation of conditions relating to the Environment at a site, or any clean-up,
treatment,
5
containment, removal, restoration, corrective action or remedial work
involving any Hazardous Materials.
"RESTRICTED ACTIVITIES": As defined in Section 12.1.
"SELLER IP RIGHTS": As defined in Section 2.1.1.
"SELLER-LICENSED IP RIGHTS": As defined in Section 2.1.1.
"SELLER-OWNED IP RIGHTS": As defined in Section 2.1.1.
"SELLER SOURCE CODE": As defined in Section 5.14(i).
"TAX" or "TAXES": Any and all (i) taxes, charges, fees, levies or other
assessments, including, without limitation, income, excise, gross receipts,
personal property, real property, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, severance, stamp,
occupation, windfall profits, social security and unemployment or other taxes
imposed by the United States or any agency or instrumentality thereof, any
state, county, local or foreign government, or any agency or instrumentality
thereof, and any interest or fines, and any and all penalties or additions
relating to such taxes, charges, fees, levies or other assessments or the
failure to comply with any requirement imposed with respect to any Tax Returns,
(ii) liability in respect of any items described in clause (i) payable by reason
of being a member of an affiliated, combined, unitary, consolidated, fiscal
unity or similar group for any period, and (iii) liability in respect of any
items described in clause (i) or (ii) payable as a result of any express or
implied obligation to indemnify any other Person with respect to such amount by
reason of contract, assumption, transferee liability, operation of law or
otherwise, including any liability for Taxes of a predecessor or transferor
entity and (iv) any and all interest, penalties, additions to tax and additional
amounts imposed in connection with or with respect to any amounts described in
(i), (ii) or (iii).
"TAX RETURNS": As defined in Section 5.7(a).
"THIRD-PARTY CLAIM": As defined in Section 13.5.
"THIRD PARTY PRODUCT TECHNOLOGY": As defined in Section 5.14(e).
"THRESHOLD": As defined in Section 13.4.
"TRANSACTION DOCUMENTS": The agreements, documents, instruments and
certificates delivered at the Closing pursuant to Sections 8.2(c), 8.3, 8.6,
9.2(c) and 9.3.
"TRANSFER": As defined in Section 2.1.
6
2. PURCHASE AND SALE OF ASSETS
2.1 PURCHASE AND SALE
Subject to the terms and conditions of this Agreement, at the Closing,
Seller shall sell, transfer, convey, assign and deliver (collectively,
"TRANSFER"), or cause to be transferred, to Buyer, free and clear of all
Encumbrances other than Permitted Encumbrances, and Buyer shall purchase and
acquire, all of Seller's right, title and interest in and to all of the
following assets and rights of Seller relating to the Business (whether tangible
or intangible, real, personal or mixed, wherever located and whether or not
reflected on the books and records of Seller), except for the Excluded Assets
(collectively, the "ASSETS"):
2.1.1 INTELLECTUAL PROPERTY
All right, title and interest of Seller in, to and under those licenses,
sublicenses or similar agreements described and set forth in Part II of SCHEDULE
2.1.1 to the Disclosure Memorandum providing Seller any right or concession to
use any information, intellectual property or Intellectual Property Rights as of
the Closing (the "SELLER-LICENSED IP RIGHTS"), and all information and
intellectual property (whether or not protectible by patent, trademark,
copyright or trade secret rights) and Intellectual Property Rights owned by
Seller as of the Closing to the extent used primarily in the Business as of the
Closing, including, without limitation, the Seller-owned IP described in Part I
of SCHEDULE 2.1.1 to the Disclosure Memorandum (the "SELLER-OWNED IP RIGHTS"
and, together with the Seller-Licensed IP Rights, collectively the "SELLER IP
RIGHTS").
2.1.2 EQUIPMENT
All machinery, equipment, furniture, computer hardware, motor vehicles,
tooling, improvements and other tangible personal property owned by Seller as of
the Closing described in SCHEDULE 2.1.2 to the Disclosure Memorandum, and all
rights to the warranties received from the manufacturers and distributors of all
such personal property and fixtures and any related claims, credits, rights of
recovery and setoffs with respect to such personal property and fixtures.
2.1.3 PERSONAL PROPERTY LEASES
All of Seller's right, title and interest in, to and under the leases and
rental agreements in respect of equipment or other tangible personal property
used in the operation of the Business as of the Closing described in SCHEDULE
2.1.3 to the Disclosure Memorandum.
2.1.4 PERMITS
All Permits relating to the Assets or Seller's operation of the Business as
of the Closing, to the extent actually assignable or transferable, described and
set forth in SCHEDULE 2.1.4 to the Disclosure Memorandum.
7
2.1.5 CONTRACTS
All of Seller's right, title and interest in, to and under all Contracts
relating to the Assets or Seller's operation of the Business as of the Closing
and described in SCHEDULE 2.1.5 to the Disclosure Memorandum.
2.1.6 LEASED REAL PROPERTY
All of Seller's rights under the Real Property Lease for the real property
described in SCHEDULE 2.1.6 to the Disclosure Memorandum (the "LEASED REAL
PROPERTY") and all of Seller's right, title and interest in and to the
Facilities.
2.1.7 BOOKS AND RECORDS
All of Seller's books and records (including, without limitation, all
discs, tapes and other media-storage data and information) relating to the
Assets, the Assumed Liabilities or Seller's operation of the Business as of the
Closing, provided that the Seller shall be expressly entitled to retain, in both
written and electronic form, one copy of such books and records as may be
necessary solely for the purposes of defending any legal claims made against it,
preparing its financial statements and tax returns, and otherwise complying with
law or Seller's contractual obligations (and Seller shall not use or cause such
books and records to be used for any other purpose and shall not transfer any of
such books and records to any third party, other than transfers to an offsite
data storage facility, other than a purchaser of all or substantially all its
assets that agrees to be bound by the foregoing terms).
2.1.8 OTHER RECORDS, MANUALS AND DOCUMENTS
All of Seller's mailing lists, customer lists, supplier lists, vendor data,
marketing information and procedures, files (including, without limitation,
sales and customer files), advertising and promotional materials, current
product material, equipment maintenance records, warranty information, standard
forms of documents, manuals (including, without limitation, manuals of
operations or business procedures and other similar procedures), and all other
information of Seller relating to the Assets, the Assumed Liabilities or
Seller's operation of the Business as of the Closing.
2.1.9 PRODUCTS
All of Seller's rights in and to the Products, including, without
limitation, the sole and exclusive right to make, use and sell the Products and
derivatives based on the Products.
2.1.10 DOMAIN NAMES
All Seller's domain names set forth in Section A of SCHEDULE 2.1.10 of the
Disclosure Memorandum and the related rights set forth in Section B of SCHEDULE
2.1.10 of the Disclosure Memorandum.
8
2.1.11 TELEPHONE NUMBERS
All telephone numbers used primarily in connection with the Business and
listed on SCHEDULE 2.1.11 to the Disclosure Memorandum.
2.2 EXCLUDED ASSETS
Anything in Section 2.1 to the contrary notwithstanding, Seller and Buyer
expressly understand and agree that Seller is not transferring to Buyer pursuant
to this Agreement, any Transaction Document or otherwise, any assets not
included in the Assets, including, without limitation, any of the following
assets or rights of Seller (the "EXCLUDED ASSETS"):
2.2.1 CASH AND CASH EQUIVALENTS AND CURRENT ASSETS
All cash, cash equivalents, short term investments, accounts and accounts
receivable of Seller as of the Closing, whether or not relating to the Business.
2.2.2 TAX REFUNDS
Any rights to refunds of Taxes paid with respect to the Business or the
ownership, operation or use of the Assets, on or prior to the Closing.
2.2.3 EMPLOYEE BENEFIT PLAN ASSETS
Assets of Seller's Employee Benefit Plans relating to employees engaged in
the Business or otherwise.
2.2.4 CONTRACT RIGHTS
All of Seller's right, title and interest in, to and under all Contracts
described in SCHEDULE 2.2.4 to the Disclosure Memorandum (the "EXCLUDED
CONTRACTS").
2.2.5 REAL PROPERTY
All real property owned by Seller and all rights of Seller under leases for
real property other than the Leased Real Property, and all of Seller's right,
title and interest in and to structures, improvements and fixtures located on
such owned real property and such other leased real property.
9
2.2.6 ENTERPRISE ASSETS AND OTHER EXCLUDED ASSETS
All of Seller's right, title and interest in its Oracle Financial Systems,
Hyperian, Great Plains and Lotus Notes databases and enterprise software
systems, Seller's name and marks and the names and marks of Seller's
subsidiaries, Seller's and Seller's subsidiaries' website and domain names
(other than those listed on SCHEDULE 2.1.10 of the Disclosure Memorandum), all
assets and rights of Seller used in Seller's businesses other than the Business
and not primarily used in the Business, and those assets and rights of Seller
used in the Business listed on SCHEDULE 2.2.6 of the Disclosure Memorandum.
2.3 ASSUMPTION OF LIABILITIES
Upon the terms and subject to the conditions of this Agreement, Buyer
agrees, effective at the time of Closing, to assume, to the extent not paid,
performed or discharged on or prior to the Closing, the following obligations
and liabilities of Seller (the "ASSUMED LIABILITIES") to the extent related to
the Business and not constituting Excluded Liabilities:
2.3.1 CONTRACT RIGHTS; REAL PROPERTY LEASE
All Seller's liabilities and obligations arising after the Closing under
the Contracts and the Real Property Lease included in the Assets; provided,
however, that Buyer shall not succeed to or assume, and Seller shall be
responsible for, any liability or obligation arising out of any breach by Seller
of any such Contract or Real Property Lease or any failure by Seller to
discharge or perform any liability or obligation arising on or prior to the
Closing under any such Contract or Real Property Lease;
2.3.2 PERMITS
All Seller's liabilities and obligations arising after the Closing under
the Permits transferred to Buyer;
2.3.3 INTELLECTUAL PROPERTY
All Seller's liabilities and obligations, if any, arising after the Closing
with respect to Seller's patents, trade names, trademarks, service marks,
copyrights and Seller IP Rights included in the Assets; provided, however, that
Buyer shall not succeed to or assume, and Seller shall be responsible for, any
liability or obligation arising out of any infringement or alleged infringement
relating to such items of Intellectual Property on or prior to the Closing; and
10
2.3.4 PROFILE
The liabilities and obligations arising after the Closing described in
SCHEDULE 2.3.4 of the Disclosure Memorandum and relating to the maintenance and
operation of the Profile database.
2.4 EXCLUDED LIABILITIES
Buyer shall not assume any obligations or liabilities other than the
Assumed Liabilities, which other obligations and liabilities shall remain
obligations and liabilities of Seller and which include, without limitation, the
following (all obligations or liabilities not assumed by Buyer are called the
"EXCLUDED LIABILITIES"):
2.4.1 TAXES
Any and all liabilities of Seller for Taxes and liabilities for Taxes with
respect to the Business, or the ownership, operation or use of the Assets, on or
prior to the Closing.
2.4.2 LITIGATION
Any claim, Judgment, penalty, settlement agreement or other obligation to
pay in respect of any Claim that is pending or, to the Knowledge of the Seller,
threatened on or prior to the Closing, including, without limitation, those
listed in SCHEDULE 5.12 to the Disclosure Memorandum.
2.4.3 CLAIMS
All claims, liabilities or other obligations that relate to injuries,
actions, omissions, conditions or events that occurred or existed on or prior to
the Closing, whether based on any act or omission of Seller, in connection with
the ownership or use of the Assets or the Assumed Liabilities or the operation
of the Business, including, without limitation, claims based on defective
products or services or other claims relating to products made, installed,
shipped or sold or services rendered by Seller, or missed delivery or
installation dates, on or prior to the Closing, including, without limitation,
any warranty claims.
2.4.4 ENVIRONMENTAL LIABILITY
All claims and liabilities arising out of or relating to (a) the treatment,
storage or disposal on or prior to the Closing of Hazardous Materials by Seller
or any other Person (including, without limitation, any previous owner, lessor
or sublessor) on or at the Leased Real Property or any other real property
previously owned, leased, subleased or used by Seller in the operation of the
Business or otherwise; (b) releases of Hazardous Materials on, at or from any
assets or properties (including, without limitation, the Leased Real Property)
owned, leased, subleased or used by Seller in the operation of the Business or
otherwise; (c) generation or transportation of Hazardous Materials by or on
behalf of Seller in the
11
operation of the Business or otherwise; and (d) releases of Hazardous Materials
by any Person (including, without limitation, any previous owner, lessee or
sublessee) on or from the Leased Real Property prior to Seller's ownership or
use thereof; or (e) the violation by Seller of or the noncompliance by Seller
with any applicable Environmental and Safety Laws.
2.4.5 SEVERANCE COSTS
All severance obligations and other costs of terminating employees wherever
located resulting from any termination or cessation (or deemed termination or
cessation) by the Seller of employment occurring on or prior to or in connection
with the Closing (including, without limitation, any such termination or
cessation occurring in connection with the transactions contemplated by this
Agreement), from whatever source such obligations and costs arise, including,
without limitation, contractual obligations, notices to employees, employment
manuals, course of dealings, past practices, obligations arising under Law, or
otherwise.
2.4.6 EMPLOYEE EXPENSES
All liabilities and obligations with respect to either the continuation or
the termination by Seller of any Employee Benefit Plan for the benefit of
Seller's employees engaged in the Business or otherwise, and all liabilities
with respect to accrued payroll, workers compensation liability, vacation or
sick time liability, fringe benefits and other employee benefits with respect to
or that relate to periods of employment by Seller on or prior to the Closing,
and all liabilities and obligations under retention agreements between Seller
and any of its employees.
2.4.7 OTHER CURRENT LIABILITIES
All other current liabilities of Seller.
2.5 INSTRUMENTS OF SALE AND TRANSFER
On or prior to the Closing Date, Seller shall deliver to Buyer and Buyer
shall deliver to Seller, as the case may be, such instruments of sale and
assignment as shall, in the reasonable judgment of Buyer and Seller, be
effective to vest in Buyer on the Closing Date all of Seller's right, title and
interest in and to the Assets and to evidence the assumption of the Assumed
Liabilities by Buyer, including, without limitation, a Xxxx of Sale and
Assignment substantially in the form of EXHIBIT 2.5(A) (the "XXXX OF SALE") and
an Assumption Agreement substantially in the form of EXHIBIT 2.5(B) (the
"ASSUMPTION AGREEMENT"). Seller shall take all reasonable additional steps as
may be necessary to put Buyer in possession and operating control of the Assets
at the Closing, and Buyer shall take all reasonable additional steps as may be
necessary for it to assume the Assumed Liabilities at the Closing.
12
3. PURCHASE PRICE
3.1 PURCHASE PRICE
Subject to Section 11.3, the aggregate purchase price for the Assets (the
"PURCHASE PRICE") is $2,500,000. The Purchase Price is payable as provided in
Sections 4.2(b).
3.2 ALLOCATION OF PURCHASE PRICE
The parties shall cooperate in determining, prior to February 28, 2007, the
fair market values of the Assets as of the Closing Date and on the allocation of
the Purchase Price, together with the Assumed Liabilities, for federal, state,
local and other Tax purposes in accordance with Section 1060 of the Code. Each
party agrees to report the federal, state, local and other Tax consequences of
the transactions contemplated by this Agreement and the Transaction Documents in
a manner consistent with such allocation and shall not take any position
inconsistent therewith upon examination of any Tax return, in any refund claim,
or in any litigation, investigation or otherwise. Any subsequent adjustments to
the Purchase Price in accordance with the terms of Section 13 of this Agreement
shall be reflected in such allocation in a manner consistent with Treasury
Regulation Section 1.1060-1(e). Each party shall cooperate with the other party
in the filing of Form 8594 with the U.S. Internal Revenue Service.
3.3 PRICE FOR RESTRICTIVE COVENANTS
Buyer and Seller agree that $100,000 of the Purchase Price shall be
allocated to the covenants set forth in Section 12.
3.4 WITHHOLDING
Buyer shall be entitled to deduct and withhold from any amounts payable
under this Agreement such amounts as may be required to be deducted or withheld
therefrom under applicable Law. To the extent that any amounts are so deducted
and withheld, those amounts shall be treated as having been paid to the Persons
to whom such amounts would otherwise have been paid.
4. CLOSING
4.1 CLOSING DATE
Subject to the terms and conditions of this Agreement, the Closing shall
take place at the offices of Xxxxxxx Coie LLP, 1120 NW Couch St., Tenth Floor,
Portland, at 10:00 a.m., local time, on February 20, 2007, or at such other
location or time or on such other date as the parties may agree, and shall be
effective as of 11:59 p.m. of the Closing Date.
13
4.2 CLOSING PAYMENTS AND DELIVERIES
(a) At the Closing, Seller shall deliver or cause to be delivered to
Buyer:
(i) a receipt for the Purchase Price; and
(ii) the certificates, opinion and other documents and items required
to be delivered to Buyer pursuant to Section 8.
(b) At the Closing, Buyer shall deliver to Seller:
(i) the Purchase Price, by wire transfer in immediately available
funds to an account designated by Seller; and
(ii) the certificates, opinion and other documents required to be
delivered to Seller pursuant to Section 9.
5. REPRESENTATIONS AND WARRANTIES OF SELLER
To induce Buyer to enter into and perform this Agreement, Seller represents
and warrants to Buyer (which representations and warranties shall survive the
Closing as provided in Section 13) as follows in this Section 5, except as set
forth in the Disclosure Memorandum, dated as of the date of this Agreement:
5.1 ORGANIZATION, VALID EXISTENCE, ETC.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Seller has all requisite
corporate power and authority to own, operate and lease the Assets and to carry
on the Business as now being conducted. Seller is duly qualified or has been
duly licensed, and is authorized to do business and is in good standing in each
state in the United States and in each other jurisdiction (each such state and
jurisdiction is listed in SCHEDULE 5.1 to the Disclosure Memorandum) where it is
required due to (a) the ownership or lease of real or personal property for use
in the operation of the Business (other than the lease of real property other
than the Leased Real Property), (b) the nature of the business conducted by
Seller or (c) otherwise, except where the failure to be so qualified, licensed,
authorized or in good standing could not reasonably be expected to have a
Material Adverse Effect.
5.2 CORPORATE AUTHORITY
Seller has full corporate power and authority to execute and deliver this
Agreement and the Transaction Documents to which it is a party and perform its
obligations hereunder and thereunder. The execution and delivery by Seller of
this Agreement and the Transaction Documents to which it is a party, the
performance by Seller of its obligations hereunder and thereunder and the
consummation by Seller of the transactions contemplated hereby and
14
thereby have been duly authorized by all necessary corporate action. The
stockholders of Seller are not required to approve this Agreement or the
transactions contemplated hereby. This Agreement constitutes a valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
and the Transaction Documents to which Seller is a party, when executed and
delivered by Seller, will constitute valid and binding obligations of Seller,
enforceable against Seller in accordance with their respective terms, except, in
each such case, as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, and other similar laws relating to or limiting
creditors' rights generally and by equitable principles.
5.3 NO CONFLICT
Except as set forth in SCHEDULE 5.3 of the Disclosure Memorandum, the
execution, delivery and performance of this Agreement and the Transaction
Documents by Seller and the consummation of the transactions contemplated hereby
and thereby do not and will not (a) violate, conflict with, or result in any
breach of, any provision of Seller's certificate of incorporation or bylaws (or
similar charter documents); or (b) violate, conflict with, result in any breach
of, or constitute a default (or an event that, with notice or lapse of time or
both, would constitute a default) under any Contract or Judgment to which Seller
is a party or by which it is bound or which relates to the Assets, the Assumed
Liabilities or the Business; or (c) result in the creation of any Encumbrance on
any of the Assets; or (d) violate any applicable Law; or (e) violate or result
in the suspension, revocation, modification, invalidity or limitation of any
Permits relating to the Assets or the Business; or (f) give any party with
rights under any Contract, Judgment or other restriction to which Seller is a
party or by which it is bound or which relates to the Assets, the Assumed
Liabilities or the Business, the right to terminate, modify or accelerate any
rights, obligations or performance under such Contract, Judgment or restriction.
5.4 CONSENTS AND APPROVALS
Except as set forth in SCHEDULE 5.4 to the Disclosure Memorandum, (a) no
consent, approval or authorization of, or declaration, filing or registration
with, any Governmental Body is required for the execution, delivery and
performance by Seller of this Agreement and the Transaction Documents to which
it is or will be a party and for the consummation by Seller of the transactions
contemplated hereby and thereby and (b) no consent, approval or authorization of
any third party is required for the execution, delivery and performance by
Seller of this Agreement and the Transaction Documents to which it is or will be
a party and the consummation by Seller of the transactions contemplated hereby
and thereby.
5.5 FINANCIAL INFORMATION
With respect to historical revenue and volume information included as Item
9.A.1 in Seller's electronic data room and relating to the Business, such
historical revenue and volume information is true and correct in all material
respects.
15
5.6 ABSENCE OF CERTAIN CHANGES OR EVENTS
Except as set forth in SCHEDULE 5.6 to the Disclosure Memorandum, since
January 1, 2007, and through the Closing Date, Seller has conducted the Business
in the ordinary course consistent with Seller's past practice, and has not, with
respect to the Assets, the Assumed Liabilities or the Business and without the
prior written consent of Buyer:
(a) taken any action or entered into any transaction, Contract or
commitment (other than this Agreement and matters related thereto) not in the
ordinary course of business;
(b) cancelled, compromised, waived or released any valuable right or claim
not in the ordinary course of business;
(c) disposed of any assets or made any capital expenditures, except in the
ordinary course of business, or created or suffered to be created any
Encumbrance on any assets;
(d) granted any license or sublicense of any rights under or with respect
to any Intellectual Property not in the ordinary course of business;
(e) delayed or postponed payment of any material accounts payable or of
other material liabilities, or accelerated the collection of a material accounts
receivable, in each case outside the ordinary course of business;
(f) changed the compensation, benefits or terms of employment provided to
any of the Business' officers, employees or consultants, except for any changes
required by Law;
(g) entered into any transaction, Contract or commitment, suffered the
occurrence of any event or events or experienced any change that, in the
aggregate, has (i) interfered with the normal and usual operations of the
Business or its prospects or (ii) resulted in a Material Adverse Effect or could
reasonably be expected to result in a Material Adverse Effect;
(h) modified or amended any Contract included in the Assets;
(i) changed any method of accounting or accounting practice employed by
Seller and affecting the Business, except for any change after the date hereof
required by reason of a concurrent change in GAAP;
(j) increased any customer discounts or changed its pricing terms; or
(k) agreed or committed to do any of the things or take any of the actions
described in this Section 5.6.
5.7 TAXES
(a) Seller, and any affiliated group within the meaning of Section 1504 of
the Code (or comparable provision of state, local or foreign Law) ("AFFILIATED
GROUP") of which
16
Seller is or has been a member (but only for the taxable period during which
Seller has been a member thereof), (i) has filed or caused to be filed all
federal, state, local and foreign Tax returns, notices, reports, statements or
other information or documentation, including any schedule or attachment
thereto, and any amendment thereof ("TAX RETURNS"), required to be filed by or
with respect to it under applicable federal, state, local or foreign Law, and
(ii) has timely paid or caused to be paid in full all Taxes owed (whether or not
shown or required to be shown on such Tax Returns). All such Tax Returns are
(and were at the time they were filed) true, correct and complete in all
material respects.
(b) There are no liens for Taxes on any of the Assets other than liens for
Taxes not yet due and payable. Seller has no liability for any Taxes with
respect to the Business, or the ownership, operation or use of the Assets,
except Taxes that, if not timely paid by Seller, could not result in (i) an
Encumbrance on any of the Assets or (ii) the commencement of a Claim against
Buyer.
(c) All deficiencies asserted or assessments made by any Tax authority
against Seller, and any Affiliated Group of which Seller is or has been a member
(but only for the taxable period during which Seller has been a member thereof),
have been fully paid, and there are no audits, investigations or examinations by
any Tax authority with respect to Taxes relating to the Business or the assets
in progress, pending or, to the Knowledge of Seller, threatened. Seller
currently is not the beneficiary of any extension of time within which to file
any Tax Return, and has not waived any statute of limitation with respect to any
Tax or agreed to any extension of time with respect to a Tax assessment or
deficiency.
(d) In respect of the Business, no claim has ever been made by a Tax
authority in any jurisdiction where Seller does not file Tax Returns that Seller
is or may be subject to taxation by that jurisdiction. Seller is not a party to
any Tax allocation, sharing, indemnity or similar agreement. Seller (i) has not
been a member of an Affiliated Group (other than the Affiliated Group of which
Seller is the common parent), and (ii) has no liability for the Taxes of any
Person under Treasury Regulation Section 1.1502-6 (or any corresponding
provision of state, local or foreign Law), or as a transferee or successor, or
by contract, or otherwise.
(e) Seller has withheld and paid all Taxes required to have been withheld
and paid in connection with amounts paid or owing to any employee, stockholder,
independent contractor, creditor or other third party. None of the Assumed
Liabilities is an obligation to make a payment that may not be deductible under
Section 280G of the Code.
(f) Seller has made available to Buyer copies of all income and other
material Tax Returns filed by Seller with respect to Taxes relating to the
Business or the Assets, and all audit or examination reports, statements of
deficiencies and closing or other agreements relating thereto, with respect to
each of Seller's taxable years ended on or after December 31, 2003.
17
5.8 PROPERTY; ASSETS
(a) SCHEDULE 2.1.2 to the Disclosure Memorandum is a complete and accurate
list of all personal property (the "PERSONAL PROPERTY") to be transferred by
Seller to Buyer. Seller has furnished to Buyer true and complete copies of all
leases, subleases, rental agreements, contracts of sale, tenancies or licenses
of any portion of the Leased Real Property and the Personal Property.
(b) Except as set forth in SCHEDULE 5.8(B) to the Disclosure Memorandum,
Seller has good and marketable title to all Personal Property owned by it, and
valid leasehold interests in the Leased Real Property, free and clear of all
Encumbrances except Permitted Encumbrances.
(c) Except as set forth in SCHEDULE 5.8(C) to the Disclosure Memorandum, to
Seller's Knowledge, there are no applicable adverse zoning, building or land use
codes or rules, ordinances, regulations or other restrictions relating to zoning
or land use that currently or may prospectively prevent, or cause the imposition
of material fines or penalties as the result of, the use of all or any material
portion of the Leased Real Property for the conduct thereon of the Business as
presently conducted.
(d) The Assets to be transferred to Buyer pursuant to this Agreement and
the Transaction Documents include all the assets and rights used by Seller, and
sufficient to permit Buyer, to operate the Assets and the Business in
substantially the same manner as currently operated by Seller, other than (i)
for leased real property other than the Leased Real Property, (ii) the assets
and rights of the Seller listed on SCHEDULES 2.2.4 AND 2.2.6 of the Disclosure
Memorandum, and (iii) hardware and "off-the-shelf" software maintenance and
support services as provided in the Transition Services Agreement.
(e) Each lease of any portion of the Leased Real Property to which Seller
is a party is, to Seller's Knowledge, valid, subsisting and in full force and
effect, and Seller has performed in all material respects the obligations
imposed on it thereunder, and neither Seller nor, to the Knowledge of Seller,
any other party thereto is in default thereunder, nor is there any event that
with notice or lapse of time, or both, would constitute a default thereunder by
Seller or, to the Knowledge of Seller, any other party thereto. Seller has not
received notice, and Seller has no Knowledge, that any party to any such lease
intends to cancel, terminate or refuse to renew the same or to exercise or
decline to exercise any option or other right thereunder.
(f) Seller has no Knowledge of any material physical defect in the Leased
Real Property or the Facilities.
5.9 EQUIPMENT
The machinery, equipment, furniture and other physical assets included in
the Assets are in good operating condition and repair (ordinary wear and tear
excepted) and are adequate
18
for the conduct of the Business as currently conducted. Except as set forth on
SCHEDULE 5.14(O), since January 1, 2006 there has not been any significant
interruption in the conduct of the Business due to the malfunctioning of any
such Assets.
5.10 ENVIRONMENTAL AND SAFETY MATTERS
(a) Seller has conducted the Business and owned and operated the Assets,
and is using and operating the Assets and the Facilities and conducting the
Business, in compliance with all Environmental and Safety Laws.
(b) Seller has not received notice from any Governmental Body alleging that
it, the Business, the Assets or the Facilities are not in compliance with
Environmental and Safety Laws.
(c) To Seller's Knowledge, there is no Claim by any Person alleging
potential liability of Seller (including potential liability for investigatory
costs, cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries or penalties) arising out of, based on, or
resulting from the presence or release into the Environment of any Hazardous
Materials at the Facilities or any other premises currently or previously owned,
operated or leased by Seller in connection with the Business, that is pending
or, to the Knowledge of the Seller, threatened against Seller, any Assets or any
such premises.
(d) To Seller's Knowledge, it has not used, treated, stored, disposed of,
or released any Hazardous Materials in violation of any Environmental and Safety
Laws on or from any premises currently or previously owned, leased or operated
by it in connection with the Business.
(e) Seller is not currently undertaking any remedial or response action
relating to any disposal, release or threatened release of Hazardous Materials,
whether or not required by Environmental and Safety Laws.
(f) Seller does not own, lease or operate any underground storage tanks,
below ground-level liquids collection or storage sumps, or any treatment,
storage or disposal facilities under the Resource Conservation and Recovery Act,
as amended, or any solid waste disposal facility, in each case in connection
with the Business.
(g) To Seller's Knowledge, on the Leased Real Property there are no
polychlorinated biphenyls in a form or condition prohibited by Environmental and
Safety Laws or any asbestos in a friable or otherwise unencapsulated form that
represents a health hazard.
(h) Seller has made available to Buyer all records and files (including any
assessments, reports, studies, audits, analyses, tests and monitoring) in the
possession of or available to Seller pertaining to the existence of Hazardous
Materials at the premises
19
currently leased or operated by it in connection with the Business or concerning
compliance with or liability under any Environmental and Safety Laws relating to
any of such premises.
5.11 CONTRACTS
SCHEDULE 2.1.5 to the Disclosure Memorandum is an accurate and complete
list of the Contracts included in the Assets in effect as of the date hereof,
including, without limitation:
(a) all Contracts for the purchase or sale by Seller, in connection with
the Business, of services or Products, supplies, machinery, equipment, or other
tangible or intangible property, in each case involving the payment or receipt
by Seller of $10,000 or more in the case of any single Contract, or providing
for performance, regardless of dollar amount, over a period of one year or more;
(b) all sales, agency or distributorship Contracts or franchises, and all
reseller Contracts for the sale, distribution or resale of the Products;
(c) all Contracts providing for the services of consultants or independent
contractors, including, without limitation, Contracts relating to research,
design, development, advertising or promotion;
(d) all Contracts relating to patents, trade names, trademarks, service
marks, copyrights, or applications for any of the foregoing, or software
development, inventions, formulas, processes, technology, know-how, trade
secrets, technical information or other intellectual property rights, including,
without limitation, the Intellectual Property;
(e) all Contracts relating to real property or any interest therein or to
personal property located at the Facilities; and
(f) all other Contracts relating to the Assets, the Assumed or the Business
that involve the payment or receipt by Seller of $10,000 or more in the case of
any single Contract, or providing for performance, regardless of dollar amount,
over a period of one year or more.
Except as set forth on SCHEDULE 5.11 of the Disclosure Memorandum, all such
Contracts are valid and in full force and effect and are enforceable against
Seller and Seller has no Knowledge of any reasonable basis on which such
Contracts would not be enforceable against the other parties thereto, in
accordance with their respective terms, except, in each such case, as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, and other similar laws relating to or limiting creditors' rights
generally and by equitable principles. Seller has performed in all material
respects the obligations required to be performed by it under all such
Contracts, and no material breach or default by Seller of any provision thereof,
20
nor any condition or event that, with notice or lapse of time or both, would
constitute such a breach or default, has occurred. Further, to Seller's
Knowledge, no material breach or default by any other party to any such Contract
of any provision thereof, nor any condition or event that, with notice or lapse
of time or both, would constitute such a breach or default, has occurred. Except
as set forth on SCHEDULE 5.6 of the Disclosure Memorandum, Seller has not
received any notice of any modification, termination or cancellation of any such
Contract and knows of no intent to effect the same or any reasonable basis
therefor. Except as set forth in SCHEDULE 5.4 to the Disclosure Memorandum, no
consent, approval or authorization of any third party is required for the
assignment of any such Contract to Buyer. Seller has no reason to believe that
any obligations that remain to be performed by Seller under any such Contract
cannot be fulfilled. To Seller's Knowledge, no such Contract, together with all
other such Contracts, will likely result in a Material Adverse Effect, and there
is no material dispute with any party under any such Contract.
Except for the oral agreement described in SCHEDULE 2.1.5 to the Disclosure
Memorandum and except for Employee Confidentiality and Non-Competition
Agreements with respect to former TDS employees, Seller has delivered to Buyer
or made available in the Seller's electronic data room, true, correct and
complete copies of each Contract included in the Assets.
5.12 CLAIMS AND LEGAL PROCEEDINGS
Except as specifically set forth in SCHEDULE 5.12 to the Disclosure
Memorandum, there are no Claims pending or, to Seller's Knowledge, threatened
against Seller with respect to the Assets, the Assumed Liabilities or the
Business, before or by any Governmental Body or nongovernmental department,
commission, board, bureau, agency or instrumentality or any other Person. Seller
has no Knowledge of any valid basis for any such Claim. There are no outstanding
or unsatisfied Judgments to which Seller is a party or by which it or any of its
properties is bound, that involve the transactions contemplated herein or that
affect the Business, the Assets or the Assumed Liabilities.
5.13 EMPLOYEES; LABOR MATTERS
(a) SCHEDULE 5.13 to the Disclosure Memorandum lists all employees of
Seller engaged in the Business as of the date hereof (the "TDS EMPLOYEES"), and
sets forth their title, starting date with Seller and compensation levels. To
Seller's Knowledge, no officer or key employee of Seller engaged in the Business
as of the date hereof intends to terminate his or her involvement with the
Business.
(b) There are no disputes, material employee grievances or material
disciplinary actions pending or, to Seller's Knowledge, threatened between
Seller and any of the TDS Employees. Seller has complied in all material
respects with all provisions of applicable Laws relating to the employment of
the TDS Employees (including, without limitation, all applicable federal, state,
local and foreign Laws regarding employment, wages, hours, equal opportunity,
collective bargaining, payment of Social Security and other taxes and
occupational safety and health standards) and has no material liability for any
arrears of wages or Taxes or penalties for failure to comply with any such Laws
and has not received any complaints from any Governmental Body alleging
violations thereof. Seller has not
21
experienced, nor does Seller know of any basis for, any strike, labor troubles
or strife, work stoppages, slow downs, or other similar interference with or
impairment of the Business. Seller has not experienced, nor does it know of any
union or collective bargaining organization efforts or negotiations, or requests
for negotiations, for any representation or any labor contract relating to any
of its employees engaged in the Business.
(c) Except as specifically set forth in SCHEDULE 5.13 to the Disclosure
Memorandum, the employment of all TDS Employees is terminable at will without
any penalty or severance obligation of any kind on the part of Seller or any
successor thereto. All sums due for employee compensation and benefits and all
vacation time owing to any TDS Employee have been duly and adequately accrued on
the accounting records of Seller. All TDS Employees are either United States
citizens or resident aliens specifically authorized to engage in employment in
the United States in accordance with all applicable Laws.
(d) Except as specifically set forth in SCHEDULE 5.13 to the Disclosure
Memorandum, with respect to the Business Seller is not a party to any:
(i) management, employment or other contract providing for the
employment or rendition of executive services;
(ii) bonus, incentive, deferred compensation, severance pay, pension,
profit-sharing, retirement, stock purchase, stock option, employee benefit or
similar plan, agreement or arrangement, other than those plans agreements,
arrangements and benefits generally offered to Seller's full-time employees;
(iii) collective bargaining agreement or other agreement with any
labor union or other employee organization (and no such agreement is currently
being requested by, or is under discussion by management with, any group of
employees or others); or
(iv) other employment contract or other compensation agreement or
arrangement, oral and written, affecting or relating to TDS Employees.
All such contracts and other agreements and arrangements set forth in
SCHEDULE 5.13 to the Disclosure Memorandum are valid, in full force and effect,
Seller has performed all material obligations imposed on it thereunder, and
there are, under any of such contracts, agreements or arrangements, no defaults
or events of default by Seller or, to its Knowledge, any other party thereto.
5.14 INTELLECTUAL PROPERTY
(a) Seller (i) owns and has independently developed the Seller-Owned IP
Rights; and (ii) has the valid right or license to exercise all Intellectual
Property Rights in the Seller-Licensed IP Rights that have been exercised by the
Business as at the Closing Date, including all Intellectual Property Rights used
in connection with the development, licensing, use, and sale of the Products and
provision of services relating to the Business by or for Seller, and the
22
use or application of the Products by customers in accordance with the
promotions or recommendations of Seller. Except as set forth on SCHEDULE 5.14(A)
of the Disclosure Memorandum and except for those services to be provided
pursuant to the Transition Services Agreement, the Seller IP Rights are
sufficient for the conduct of the Business as it is conducted as of the Closing.
(b) Except as set forth on SCHEDULE 5.14(B), neither the execution,
delivery and performance of this Agreement or the Transaction Documents, nor the
consummation of the transactions contemplated by this Agreement or the
Transaction Documents shall: (i) constitute a breach of or default under any
instrument, license or other agreement governing Seller IP Rights; (ii) cause
the forfeiture or termination of, or give rise to a right of forfeiture or
termination of, any Seller IP Right; or (iii) impair the right of the Buyer, as
successor-in-interest to Seller, to use, possess, sell or license any
Seller-Owned IP Right or portion thereof, or exercise any Seller-Licensed IP
Right to the extent such rights were exercised by Seller prior to the Closing
Date. Except to the extent disclosed in SCHEDULE 5.14(B) of the Disclosure
Memorandum, there are no royalties, honoraria, fees or other payments payable by
the Seller to any third person (other than salaries payable to employees and
independent contractors not contingent on or related to use of their work
product, and ordinary course payments due to any governmental authorities in
order to maintain any registrations of Intellectual Property Rights) as a result
of the ownership, use, possession, license-in, sale, marketing, advertising or
disposition of any Seller IP Rights by the Seller to the extent necessary for
the conduct of the Business or the use, sale, licensing or distribution of the
Products, and none shall become payable by Seller, or by Buyer as
successor-in-interest to Seller, as a result of the consummation of the
transactions contemplated by this Agreement. After the Closing, all Seller-Owned
IP Rights will be fully transferable, alienable or licensable by Buyer without
restriction and without payment of any kind to any third party. Except as set
forth on SCHEDULE 5.14(B) of the Disclosure Memorandum, the Seller IP Rights may
be transferred to Buyer hereunder without the consent or approval of any other
Person or Governmental Body.
(c) SCHEDULE C of the Disclosure Memorandum sets forth a list of each of
the Products currently produced, manufactured, marketed, licensed, sold,
furnished or distributed by the Seller in connection with the Business and each
product and service currently under development by the Seller in connection with
the Business. Except to the extent related to Seller not having obtained
consents to assignment for certain licenses as set forth on SCHEDULE 5.14(E),
neither the operation of the Business, nor the use, development, manufacture,
marketing, license, sale or furnishing of any of the Products (or any component
or portion thereof), nor the use or application of the Products by customers in
accordance with the promotions or recommendations of Seller (i) violates or will
violate any license or other Contract between Seller and any third party, or
(ii) infringes or misappropriates or will infringe or misappropriate any
Intellectual Property right of any other party. There is no pending or, to the
Knowledge of the Seller, threatened claim or litigation made or brought against
Seller contesting the validity, ownership or right of the Seller to exercise any
Seller IP Right, nor to the Knowledge of Seller is there any legitimate basis
for any such claim, nor has
23
Seller received any notice asserting that any Seller IP Right or the proposed
use, sale, license or disposition thereof conflicts with or infringes or shall
conflict with or infringe the rights of any other Person, nor is there any
legitimate basis for any such assertion. The Seller has not received any notice
from any third party with regard to any Seller IP Right offering a license under
any third party patents. Except for restrictions contained in any Contracts
identified in Part II of SCHEDULE 2.1.1 of the Disclosure Memorandum, none of
the Seller IP Rights or the Products is subject to any proceeding or outstanding
order, Contract or stipulation (i) restricting in any manner the use,
distribution, transfer or licensing by the Seller of the Seller IP Rights or the
Products, or which may affect the validity, use or enforceability of any such
Seller IP Rights or Products, or (ii) restricting the conduct of the Business in
order to accommodate Intellectual Property rights of a third party.
(d) Except as set forth in SCHEDULE 5.14(D) of the Disclosure Memorandum,
no current or former employee, consultant or independent contractor of Seller:
(i) is, to the Knowledge of Seller, in violation of any term or covenant of any
employment contract, patent disclosure agreement, invention assignment
agreement, nondisclosure agreement, noncompetition agreement or any other
agreement with any other Person by virtue of such employee's, consultant's or
independent contractor's being employed by, or performing services for, Seller
in connection with the Business or in connection with the development of any of
the Products or using trade secrets or proprietary information of others without
permission in the Business or in connection with the development of any of the
Products; or (ii) to the Knowledge of Seller, has developed any technology,
software or other copyrightable, patentable or otherwise proprietary work for
Seller in connection with the Business or in connection with the development of
any of the Products that is subject to any agreement under which such employee,
consultant or independent contractor has assigned or otherwise granted to any
third party any rights (including Intellectual Property) in or to such
technology, software or other copyrightable, patentable or otherwise proprietary
work.
(e) Seller has taken reasonable steps under the circumstances to protect,
preserve and maintain the secrecy and confidentiality of the Seller IP Rights
and to preserve and maintain all Seller's trade secrets in the Seller IP Rights.
Except as set forth in SCHEDULE 5.14(E) of the Disclosure Memorandum, all
current officers, employees, consultants and independent contractors of the
Seller having access to trade secrets or confidential or proprietary information
of the Seller relating to the Business or the Products or its customers or
business partners with regard to the Business or the Products have executed and
delivered to the Seller an agreement regarding the protection of such trade
secrets or confidential or proprietary information (in the case of trade secrets
or confidential or proprietary information of the Seller's customers and
business partners, to the extent required by such customers and business
partners); and copies of all such agreements have been delivered to Buyer's
legal counsel. Seller, to Seller's Knowledge, is not aware that any such
employee, independent contractor, consultant or officer is in violation of any
such agreement. Except as set forth in SCHEDULE 5.14(E) of the Disclosure
Memorandum, Seller has secured valid written assignments from all of the
Seller's current consultants, independent contractors, employees and officers
who were involved in, or who contributed to, the creation or development of any
24
Seller-Owned IP Rights, of the rights to such contributions that may be owned by
such Persons or that Seller would not already own by operation of Law. No
current or former employee, officer, director, consultant or independent
contractor of the Seller has any right, license, claim or interest whatsoever in
or with respect to any Seller-Owned IP Rights. To the extent that any
technology, software or Intellectual Property developed or otherwise owned by a
third party is incorporated into, integrated or bundled with any of the Products
("THIRD PARTY PRODUCT TECHNOLOGY"), Seller has a written license from or
agreement with such third party with respect thereto pursuant to which the
Seller, unless otherwise described in SCHEDULE 5.14(E) of the Disclosure
Memorandum, either (i) is the exclusive owner thereof, or (ii) has obtained,
licenses (sufficient for the conduct of the Business and the sale, licensing or
distribution of the Products) to, all such third party's Intellectual Property
in such Third Party Product Technology by operation of Law or by valid contract.
SCHEDULE 5.14(E) of the Disclosure Memorandum sets forth a list and description
of all Third Party Product Technology.
(f) SCHEDULE 2.1.1 of the Disclosure Memorandum contains a true and
complete list of (i) all registrations made by or on behalf of Seller of any
patents, copyrights, mask works, trademarks and service marks with any
Governmental Body, (ii) all applications, registrations, filings and other
formal written governmental actions made or taken pursuant to applicable law by
Seller to secure, perfect or protect its interest in the Seller-Owned IP Rights,
including all patent applications, copyright applications, mask work
applications and applications for registration of trademarks and service marks,
and where applicable the jurisdiction in which each of the items of the
Seller-Owned IP Rights has been applied for, filed, issued or registered. All
registered patents, trademarks, service marks, copyrights and mask work rights
on SCHEDULE 2.1.1 are, to the Knowledge of Seller, valid, enforceable and
subsisting, and the Seller is the record owner thereof. The Seller is the
exclusive owner of all trademarks and trade names listed on SCHEDULE 2.1.1 of
the Disclosure Memorandum. Other than any copyrighted works included in
Seller-Licensed IP Rights, the Seller owns exclusively, and has good title to,
all copyrighted works that are included or incorporated into Products. SCHEDULE
2.1.11 of the Disclosure Memorandum contains a true and complete list of the
Internet domain names or Internet or World Wide Web URLs or addresses necessary
to the operation of the Business, and such Internet domain names or Internet or
World Wide Web URLs or addresses are valid, enforceable and subsisting, and
Seller is the record owner thereof. SCHEDULE 5.14(F) of the Disclosure
Memorandum sets forth all inter partes proceedings or actions before any court
or tribunal (including, without limitation, the United States Patent and
Trademark Office or equivalent authority anywhere else in the world) related to
any of the Seller-Owned IP Rights.
(g) Seller owns all right, title and interest in and to all Seller-Owned IP
Rights free and clear of all Encumbrances (other than licenses and rights listed
in SCHEDULE 5.14(H)-1 of the Disclosure Memorandum and Permitted Encumbrances).
The right, license and interest of the Seller in and to all Seller-Licensed IP
Rights are free and clear of all Encumbrances (other than Permitted Encumbrances
and Encumbrances set forth in the terms and conditions of the Contracts under
which Seller-Licensed IP Rights are licensed to the
25
Seller, all of which Contracts are listed in SCHEDULE 5.14(H)-2 of the
Disclosure Memorandum, and complete and correct copies of such agreements have
been provided to counsel to Buyer).
(h) SCHEDULE 5.14(H)-1 of the Disclosure Memorandum contains a true and
complete list of all licenses, sublicenses and other Contracts in effect on the
date hereof to which the Seller is a party and pursuant to which any Person is
authorized to use any Seller-Owned IP Rights. SCHEDULE 5.14(H)-2 of the
Disclosure Memorandum contains a true and complete list of all licenses,
sublicenses and other Contracts in effect on the date hereof to which the Seller
is a party and pursuant to which the Seller is authorized to use any
Seller-Licensed IP Rights (other than licenses of software generally available
to the public at a per copy license fee of less than $2,500 per copy). None of
the licenses or other Contracts listed in SCHEDULE 5.14(H)-1 of the Disclosure
Memorandum grants any third party exclusive rights to or under any Seller-Owned
IP Rights or grants any third party the right to sublicense any of such
Seller-Owned IP Rights. The Seller has not made confidential Intellectual
Property relating to the Business public, except for the publication of
applications or registrations relating to such Intellectual Property as required
by applicable law.
(i) Except as disclosed in SCHEDULE 5.14(I) of the Disclosure Memorandum,
neither the Seller nor any other Person acting on its behalf has disclosed or
delivered to any other Person, or permitted the disclosure or delivery to any
other Person of, any Seller Source Code (as defined below). No event has
occurred, and no circumstance or condition exists, that (with or without notice
or lapse of time, or both) shall, or would reasonably be expected to, result in
the disclosure or delivery by the Seller or any Person acting on its behalf to
any other Party of any Seller Source Code. SCHEDULE 5.14(I) of the Disclosure
Memorandum identifies each Contract (whether written or oral) pursuant to which
the Seller has deposited, or is or may be required to deposit, with an escrow
agent or other party, any Seller Source Code and further describes whether the
execution of this Agreement or the Transaction Documents or the consummation of
the transactions contemplated hereby or thereby, in and of itself, would
reasonably be expected to result in the release from escrow of any Seller Source
Code. As used in this Section 5.14(i), "SELLER SOURCE CODE" means, collectively,
any human readable software source code that constitutes Seller-Owned IP Rights.
Seller has not authorized any other Person to prepare any versions of Seller's
Products for commercial use.
(j) As at the Closing Date there is no unauthorized use, disclosure,
infringement or misappropriation of any Seller-Owned IP Rights by any third
party, including any employee or former employee of the Seller.
(k) All software developed by Seller and licensed by the Seller to
customers and all Products provided by or through the Seller to customers on or
prior to the Closing Date conform in all material respects to applicable
contractual commitments, express and implied warranties (to the extent not
expressly disclaimed in Contracts with such customers) and to any
representations provided to customers, except to the extent that Seller's
liability for breach of applicable contractual commitments, express and implied
warranties and
26
representations would not exceed $50,000 in the aggregate. Seller has made
available to Buyer all documentation and notes relating to the testing of the
Products and plans and specifications for products currently under development
by Seller in connection with the Business. The Seller has a policy and procedure
for tracking bugs, errors and defects of which it becomes aware in any of the
Products and maintains a database covering the foregoing. For all software used
by Seller in providing Products, or in developing or making available any of the
Products, Seller has implemented any and all security patches or upgrades that
are generally available for that software and that would be material to the
sale, licensing or distribution of any Products.
(l) No government funding, facilities of a university, college, or other
educational institution or research center was used in the development of the
Products. No current or former employee, consultant or independent contractor of
Seller who was involved in, or who contributed to, the creation or development
of any Seller-Owned IP Rights has performed services for the government, for a
university, college or other educational institution or for a research center
during a period of time during which such employee, consultant or independent
contractor was also performing services for the Seller in connection with the
Business.
(m) Except as set forth in SCHEDULE 5.14(M) of the Disclosure Memorandum,
and notwithstanding any disclosure regarding Public Software in SCHEDULE 5.14(E)
of the Disclosure Memorandum, no software covered by any Seller-Owned IP Right
has been distributed in whole or in part or used with, or is being used in
conjunction with any Public Software in a manner which would require that such
software be disclosed or distributed in source code form or made available at no
charge. As used in this Section 5.14(m), "PUBLIC SOFTWARE" means any software
that (i) contains, or is derived in any manner (in whole or in part) from, any
software that is distributed as free software, open source software (e.g.,
Linux) or (ii) requires as a condition of its use, modification or distribution
that it be disclosed or distributed in source code form or made available at no
charge. Public Software includes, without limitation, software licensed under
the GNU's General Public License (GPL) or Lesser/Library GPL, the Mozilla Public
License, the Netscape Public License, the Sun Community Source License, the Sun
Industry Standards License, the BSD License, and the Apache License.
(n) Except as disclosed in SCHEDULE 5.14(N) of the Disclosure Memorandum,
as of the Closing, Seller has not received any notice of any pending action or
opposition with respect to any Seller-Owned IP Rights that is the subject of an
application, certificate, filing registration or other document issued, filed
with or recorded by any Governmental Body or any non-governmental registrar or
administrative entity, anywhere in the world (such Seller-Owned IP Rights being
"REGISTERED IP RIGHTS"). SCHEDULE 5.14(N) of the Disclosure Memorandum contains
a complete and accurate list of all actions that must be taken within 90 days
after the Closing Date relating to the payment of any Taxes, fees or other
amounts, or the filing of any documents necessary or appropriate to maintain any
Registered IP Rights
27
with the appropriate official office or registry (e.g., patent or trademark
office or the appropriate Governmental Body or non-governmental registrar).
(o) SCHEDULE 5.14(O) of the Disclosure Memorandum contains a complete and
accurate list of all downtime experienced by the Business since January 1, 2006
as a result of any software included in the Seller-Owned IP Rights (including,
without limitation, due to malfunctions or "bugs" of or in such software). As
used in this Section, "downtime" means any (x) occurrence scheduled by Seller
and lasting over 2 hours or (y) unscheduled occurrence in which the operation of
the software or the performance of its functions is impaired.
5.15 INVENTORY
Seller has no inventory related to the Business.
5.16 PERMITS
All Permits that are required for the ownership or operation of the Assets
or the Facilities or the conduct of the Business have been obtained by Seller,
are in full force and effect and are listed in SCHEDULE 2.1.4 to the Disclosure
Memorandum. Seller is and has been in compliance in all material respects with
all such Permits, and Seller has not received any notice of any alleged
violation (whether past or present and whether remedied or not) of, nor any
threat of the suspension, revocation, modification, invalidity or limitation of,
any such Permit, nor does Seller have any Knowledge of any basis for any claim
of any such violation or any such threat.
5.17 WARRANTIES
SCHEDULE 5.17 to the Disclosure Memorandum sets forth Seller's warranties
currently made with respect to the services rendered and Products provided by
the Business. Except as set forth in SCHEDULE 5.17 to the Disclosure Memorandum,
Seller has not made any warranties in connection with the Business. Since
January 1, 2006, there have been no warranty Claims made or threatened against
Seller that relate to the Business or its services or Products and that exceed
$10,000 individually or $50,000 in the aggregate.
5.18 COMPLIANCE WITH LAW
Except as set forth on SCHEDULE 5.18 of the Disclosure Memorandum, Seller
is and has been in compliance in all material respects with all Laws (including,
without limitation, all Environmental and Safety Laws) and all Judgments
applicable to the ownership or operation of the Assets or the Facilities, or the
conduct of the Business. Except as set forth on SCHEDULE 5.18, Seller has not
received any notice of any alleged violation (whether past or present and
whether remedied or not), and Seller has no Knowledge of any basis for any claim
of any such violation, of any such Law or Judgment. To Seller's Knowledge, there
is no Law or any Judgment that materially and adversely affects, or could
reasonably be
28
expected to materially and adversely affect, the ownership or operation of the
Assets or the Facilities or the conduct of the Business.
5.19 INSURANCE
Seller has, with respect to the Business, maintained adequate insurance
protection against all liabilities, Claims and risks against which it is
customary for corporations engaged in the same or a similar business similarly
situated to insure. SCHEDULE 5.19 to the Disclosure Memorandum lists each policy
of insurance in force as of the date of this Agreement that Seller maintains
with respect to the Business.
5.20 EMPLOYEE PLANS
(a) Neither Seller nor any ERISA Affiliate sponsors, maintains or
contributes to, or has ever sponsored, maintained or contributed to (or been
obligated to sponsor maintain or contribute to), any (i) "multiemployer plan,"
as defined in Sections 3(37) or 4001(a)(3) of ERISA, (ii) multiple employer
plan, within the meaning of Section 4063 or 4064 of ERISA or Section 413 of the
Code, (iii) employee pension plan that is subject to Section 412 of the Code,
Section 302 of ERISA or Title IV of ERISA, or (iv) "voluntary employees
beneficiary association," as defined in Section 501(c)(9) of the Code.
(b) Each Employee Benefit Plan was properly and legally established
and at all time since inception has been maintained, administered, operated and
funded in all material respects in accordance with its terms and in compliance
with all applicable Laws, including, without limitation, ERISA and the Code.
Seller, each ERISA Affiliate and each other Person (including, without
limitation, each fiduciary) has, at all times and in all material respects,
properly performed all of its, his or her duties and obligations (whether
arising by operation of Law or by contract) under or with respect to each
Employee Benefit Plan, including, without limitation, all reporting, disclosure
and notification obligations. Seller has not incurred, and there exists no
condition or set of circumstances in connection with which Seller or the Buyer
could incur, directly or indirectly, any material liability or expense under
ERISA, the Code or any other applicable Law, or pursuant to any indemnification
or similar agreement, with respect to any Employee Benefit Plan.
(c) Each Employee Benefit Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and its related trust and/or group
annuity contract is exempt from taxation under Section 501(a) of the Code.
Nothing has occurred, or is reasonably expected by Seller or any ERISA Affiliate
to occur, that could adversely affect the qualification or exemption of any such
Employee Benefit Plan or its related trust or group annuity contract.
(d) Each "group health plan," as defined in Section 607(1) or
733(a)(1) of ERISA or Section 5000(b)(1) of the Code, sponsored, maintained,
provided, administered or contributed to by Seller or any ERISA Affiliate is,
and at all times since inception has been, maintained, administered and operated
in compliance with all applicable requirements of
29
Parts 6 and 7 of Subtitle B of Title I of ERISA, Section 4980B(f), 9801, 9802
and 9803 of the Code and all other applicable laws, statutes, orders, rules and
regulations relating to the provision or continuation of health insurance
coverage or other welfare benefits (within the meaning of Section 3(1) of
ERISA). Seller, each ERISA Affiliate and each other Person has, at all times and
in all material respects, properly performed all of his, her or its duties and
obligations (whether arising by operation of law or by contract) under or with
respect to each such group health plan, including, without limitation, any
notification obligations imposed under Parts 6 or 7 of Subtitle B of Title I of
ERISA or Section 4980B(f) or 9801(e) of the Code.
(e) There are no actions, suits or claims (other than routine claims
for benefits) pending or, to the Knowledge of Seller, threatened with respect to
(or against the assets of) any Employee Benefit Plan, nor, to the Knowledge of
Seller, is there a basis for any such action, suit or claim. No Employee Benefit
Plan is currently under investigation, audit or review, directly or indirectly,
by any Governmental Body, and, to the Knowledge of Seller, no such action is
contemplated or under consideration by any Governmental Body.
5.21 BROKERAGE
Seller has not retained any broker or finder in connection with the
transactions contemplated by this Agreement or the Transaction Documents. Any
brokerage or finder's fee due to any broker or finder in violation of the
foregoing representation shall be paid by Seller.
5.22 ABSENCE OF QUESTIONABLE PAYMENTS
Neither Seller nor, to Seller's Knowledge, any director, officer, agent,
employee or other Person acting on behalf of Seller has used any of Seller's
funds for improper or unlawful contributions, payments, gifts or entertainment,
or made any improper or unlawful expenditures relating to political activity to
any government official or other Person. Neither Seller nor, to Seller's
Knowledge, any director, officer, agent, employee or other person acting on
behalf of Seller has accepted or received any improper or unlawful
contributions, payments, gifts or expenditures in connection with the operation
of the Business.
5.23 CUSTOMERS AND SUPPLIERS
Except as set forth on SCHEDULE 5.23 of the Disclosure Memorandum, Seller
has not received any notice that any material customer or supplier of Seller
relating to the Business intends to terminate or adversely modify its
relationship with Seller. Except as set forth on SCHEDULE 5.23 to the Disclosure
Memorandum, no customer or supplier of the Business has, since January 1, 2007,
decreased or limited materially, or to the Knowledge of Seller, threatened to
decrease or limit materially, its purchase of Seller's services or Products, or
its supply of materials or services to Seller, as the case may be.
30
5.24 CONTROLS
Seller maintains accurate books and records reflecting its assets and
liabilities and maintains proper and adequate internal accounting controls which
provide reasonable assurance that, with respect to the Business, (a)
transactions are executed with management's authorization; (b) transactions are
recorded as necessary to permit preparation of the consolidated financial
statements of Seller and to maintain accountability for the assets relating to
the Business; and (c) access to such assets is permitted only in accordance with
management's authorization.
5.25 FULL DISCLOSURE
Neither the statements made in this Agreement or the other Transaction
Documents, taken as a whole, contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained herein and
therein not misleading. There is no fact to Seller's Knowledge that Seller has
not disclosed to Buyer in writing that has had or could reasonably be expected
to have a Material Adverse Effect.
6. REPRESENTATIONS AND WARRANTIES OF BUYER
To induce Seller to enter into this Agreement, Buyer and Vesta Corporation
jointly and severally represent and warrant to Seller (which representations and
warranties shall survive the Closing as provided in Section 13) all as follows
in this Section 6:
6.1 ORGANIZATION, VALID EXISTENCE, ETC.
Buyer and Vesta Corporation are each corporations duly organized and
validly existing under the laws of the State of Oregon. Buyer and Vesta
Corporation have all requisite power and authority to own or lease and operate
their assets and to carry on their business as it is now conducted.
6.2 TRANSACTION DOCUMENTS
Buyer and Vesta Corporation have full corporate power and authority to
execute and deliver this Agreement and the Transaction Documents to which they
are a party and perform their obligations hereunder and thereunder. The
execution and delivery by Buyer and Vesta Corporation of this Agreement and the
Transaction Documents to which they are a party, the performance by Buyer and
Vesta Corporation of their obligations hereunder and thereunder and the
consummation by Buyer and Vesta Corporation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action.
This Agreement constitutes a valid and binding obligation of Buyer and Vesta
Corporation, enforceable against Buyer and Vesta Corporation in accordance with
its terms, and the Transaction Documents to which Buyer and Vesta Corporation
are a party, when executed and delivered by Buyer and Vesta Corporation, will
constitute valid and binding obligations
31
of Buyer and Vesta Corporaiton, enforceable against Buyer and Vesta Corporation
in accordance with their terms.
6.3 NO CONFLICT
Neither the execution and delivery by Buyer or Vesta Corporation of this
Agreement or the Transaction Documents to which Buyer or Vesta Corporation is a
party, the performance by Buyer and Vesta Corporation of their obligations
hereunder or thereunder, nor the consummation of the transactions contemplated
hereby or thereby will (a) violate, conflict with or result in any breach of any
provision of Buyer's or Vesta Corporation's articles of incorporation or bylaws;
or (b) violate, conflict with, result in any breach of, or constitute a default
(or an event that, with notice or lapse of time or both, would constitute a
default) under any Contract or Judgment to which Buyer of Vesta Corporation is
party or by which they are bound; or (c) violate any applicable Law.
6.4 CLAIMS AND LOCAL PROCEEDINGS
There are no Claims pending or, to the Knowledge of Buyer or Vesta
Corporation, threatened against Buyer or Vesta Corporation or affecting the
transactions contemplated herein, before or by any Governmental Body or
nongovernmental department, commission, board, bureau, agency or
instrumentality, or any other Person, and there are no outstanding or
unsatisfied Judgments or stipulations to which Buyer or Vesta Corporation is a
party or that involve the transactions contemplated herein.
6.5 BROKERAGE
Neither Buyer nor Vesta Corporation has retained any broker or finder in
connection with the transactions contemplated by this Agreement or the other
Transaction Documents. Any brokerage or finder's fee due to any broker or finder
in violation of the foregoing representation shall be paid by Buyer or Vesta
Corporation.
7. CERTAIN COVENANTS
7.1 ACCESS
(a) Prior to the Closing Date, Seller shall (i) give Buyer and its
accounting, legal, business, environmental, engineering, intellectual property
and other authorized representatives and advisors full access, during normal
business hours, to all facilities and properties of Seller relating to the
Assets, the Assumed Liabilities and the Business, (ii) furnish Buyer and its
authorized representatives and advisors with all documents and information
relating to the Assets, the Assumed Liabilities and the Business as may be
reasonably requested by Buyer and its authorized representatives and advisors,
(iii) permit Buyer and its authorized representatives and advisors to review all
books, records and Contracts relating to the Assets, the Assumed Liabilities and
the Business as may be reasonably requested by Buyer and its authorized
representatives and advisors, and make
32
copies thereof, (iv) make available Seller's employees and advisors, including
those responsible for the management of the Business, and cause Seller's
employees and advisors to furnish Buyer and its authorized representatives and
advisors with data and other information with respect to the Assets, the Assumed
Liabilities and the Business as may be reasonably requested by Buyer and its
authorized representatives and advisors, and discuss with Buyer and its
authorized representatives and advisors the affairs of the Business, (v)
facilitate Buyer or its authorized representatives and advisors in conversations
with customers of the Business for the purpose of assisting Buyer in determining
whether it will be able or given the opportunity to conduct the Business after
the Closing with respect to such customers in the manner heretofore conducted by
Seller or otherwise to qualify itself or its products or facilities for the
purpose of so conducting the Business, and (vi) cooperate with Buyer and its
authorized representatives and advisors in their investigation and examination
of the Assets and the affairs of the Business. No investigation or receipt of
information provided by or on behalf of Seller or review thereof by Buyer or its
representatives or advisors shall diminish or obviate, or relieve Seller from,
or affect Buyer's ability or right to rely on, any of the representations,
warranties, covenants and agreements of Seller contained in this Agreement or
the Transaction Documents.
(b) If the Closing under this Agreement shall not occur, Buyer and Vesta
Corporation shall keep confidential and not use or disclose to any party any
confidential information acquired by Buyer or Vesta Corporation from Seller
pursuant to this Section 7.1 or otherwise disclosed in connection with the
negotiation of this Agreement, unless Seller shall give its written consent to
the contrary; provided, however, that the foregoing obligations of
confidentiality and non-use shall not apply to any information which (i) at the
time of disclosure is, or thereafter becomes, available to the public through no
breach of this Agreement by Buyer or Vesta Corporation; or (ii) was known to, or
otherwise in the possession of, Buyer or Vesta Corporation prior to the receipt
of such information from Seller; or (iii) is obtained by Buyer or Vesta
Corporation from a source other than Seller and other than one who would be
breaching a commitment of confidentiality to Seller by disclosing the
information to Buyer or Vesta Corporation; or (iv) is developed by Buyer or
Vesta Corporation or its Affiliates independently of Seller's confidential
information; or (v) is required to be disclosed by Buyer or Vesta Corporation in
connection with a pending Claim; and, provided further, that in the event Buyer
or Vesta Corporation becomes required in connection with a pending Claim to
disclose any of the information acquired from Seller in connection with this
Agreement, then Buyer or Vesta Corporation shall provide Seller with reasonable
notice so that Seller may seek a court order protecting against or limiting such
disclosure or any other appropriate remedy; and in the event such protective
order or other remedy is not sought, or is sought but not obtained, Buyer or
Vesta Corporation shall furnish only that portion of the information which is
required and shall endeavor, at Seller's expense, to obtain a protective order
or other assurance that the portion of the information furnished by Buyer or
Vesta Corporation will be accorded confidential treatment.
33
7.2 ASSIGNMENT OF CONTRACTS
If any Contract constituting any of the Assets is not assignable by Seller
to Buyer without the consent of a third party, or will not continue in effect
after the Closing, then Seller shall use commercially reasonable efforts to
provide Buyer with such third-party consent prior to the Closing Date to the
satisfaction of Buyer (but if Seller's assignment or attempted assignment of any
such Contract prior to obtaining the third-party consent would constitute a
breach of such Contract, then such assignment or attempted assignment shall not
be or be deemed effective unless and until the third-party consent is obtained).
For any licenses associated with the Contracts listed on Part A of SCHEDULE
ANNEX 5.14(E) of the Disclosure Memorandum for which consent is not obtained
prior to the Closing, Seller shall, at Seller's expense, use commercially
reasonable efforts to provide Buyer with such third-party consents as soon as
practicable after the Closing Date. For the avoidance of doubt, nothing in this
Section 7.2 or Section 10.1 shall obligate the Seller to obtain consent with
regards to the transfer of licenses associated with the Contracts listed in Part
B of SCHEDULE ANNEX 5.14(E).
Until Buyer's receipt of any such consent not obtained as of the Closing,
Seller and Buyer shall reasonably cooperate so that Buyer shall enjoy the
benefits and rights of Seller under any such Contract and Buyer shall be
responsible for the obligations arising thereunder after the date hereof
pursuant to the express terms of such Contract in the ordinary course of
business; provided, however, that, with respect to the licenses associated with
each Contract listed on Part A of SCHEDULE ANNEX 5.14(E) of the Disclosure
Memorandum, if, prior to (a) Seller's obtaining the related consent for
assignment of such Contract to Buyer and (b) assignment of such Contract to
Buyer, Seller fails to provide to Buyer the benefits and rights of Seller under
such Contract (as such benefits and rights are determined prior to the Closing),
Seller shall, to extent such license is still required for purposes of the
Business, promptly pay to Buyer the amount indicated in Part A of SCHEDULE ANNEX
5.14(E) of the Disclosure Memorandum as the estimated per copy license fee
applicable to such Contract for each copy licensed by Seller immediately prior
to the Closing. Seller agrees to be solely responsible for any other obligations
or liabilities arising under or related to such Contract prior to receipt of
such consent.
7.3 CONDUCT OF BUSINESS PRIOR TO CLOSING
Except for actions taken with the prior written consent of Buyer, from the
date of this Agreement until the Closing Date, Seller shall conduct the Business
in the ordinary course consistent with Seller's past practice, Seller shall not
take or permit to exist any action or condition specified in Sections 5.6(a)
through 5.6(k), and Seller shall:
(a) use commercially reasonable efforts to maintain the Business intact, to
market, promote, sell and distribute the Products of the Business consistently
with Seller's past practice, and to preserve the goodwill of the Business and
present relationships with the
34
customers and suppliers of the Business and others with whom the Business has
business relations;
(b) maintain the improvements and machinery and equipment constituting any
of the Assets in good operating condition and repair (ordinary wear and tear
excepted);
(c) meet the contractual obligations of the Business and perform and pay
its obligations as they mature, and conduct its accounts receivable collection
efforts relating to the Business, in each case in the ordinary course of
business;
(d) make payments and filings required to continue the Intellectual
Property and continue to prosecute and maintain all pending applications
therefor in all jurisdictions in which such applications are pending;
(e) comply with all Judgments, all Laws and all Permits applicable to the
conduct of the Business or the ownership or operation of the Assets or the
Facilities, and maintain and prosecute applications for such Permits and pay all
Taxes, assessments and other charges applicable thereto;
(f) promptly advise Buyer in writing of the occurrence of any Material
Adverse Effect or of any change, condition or event that could reasonably be
expected to result in a Material Adverse Effect;
(g) not take any action, or omit to take any action, that would result in
any of Seller's representations and warranties made herein being materially
inaccurate at the time of such action or omission as if made at and as of such
time;
(h) give notice to Buyer promptly upon becoming aware of any material
inaccuracy of any of Seller's representations or warranties made herein or in
the Disclosure Memorandum or of any event or state of facts that would result in
any such representation or warranty being materially inaccurate at the time of
such event or state of facts as if made at and as of such time (any such notice
to describe such material inaccuracy, event or state of facts in reasonable
detail);
(i) not solicit, approach or furnish information to any prospective buyer,
or negotiate with any third party concerning the sale or transfer of any of the
Assets, the Business or any part thereof, whether any of such actions are taken
directly or indirectly, through a director, officer, employee or other
representative or otherwise; and
(j) immediately notify Buyer regarding any contact between Seller or any of
its directors, officers, employees or any other representative and any other
Person or any offer, proposal or inquiry regarding any sale or transfer
described in Section 7.3(i).
35
7.4 EMPLOYEES
(a) Unless otherwise agreed by Seller and Buyer or Vesta Corporation, Buyer
or Vesta Corporation will offer employment on an "at-will" basis to those
employees of Seller set forth on SCHEDULE 7.4 (which Schedule Buyer shall
provide to Seller prior to or at the Closing) (the "OFFEREE EMPLOYEES"), with
such employment to become effective immediately after the Closing, unless
otherwise set forth on SCHEDULE 7.4. Seller shall use commercially reasonable
efforts to assist Buyer and Vesta Corporation in their efforts to hire the
Offeree Employees and, prior to the Closing, shall release those employees who
accept employment with Buyer or Vesta Corporation from their obligations under
any non-competition or confidentiality agreement in favor of Seller, to the
extent necessary to allow them to be employed by Buyer or Vesta Corporation.
Nothing contained herein shall require (or be deemed to require) Buyer or Vesta
Corporation to continue after the Closing Date (i) the employment of any
employee of Seller employed by Buyer or Vesta Corporation after the Closing or
(ii) the salary or benefits paid or provided to any such employee.
(b) On the Closing Date Seller shall pay all current liabilities owing as
of the Closing Date to employees who accept employment with Buyer or Vesta
Corporation, including, without limitation, any and all accrued vacation and
sick time and bonuses.
(c) Seller agrees and acknowledges that the selling group (as defined in
Treasury Regulation Section 54.4980B-9, Q&A-3(a)) of which it is a part (the
"SELLING GROUP") will continue to offer a group health plan to employees after
the Closing Date and, accordingly, that Seller and the Selling Group will be
solely responsible for providing continuation coverage in accordance with
Section 4980B(f) of the Code ("COBRA"), to those individuals who are M&A
qualified beneficiaries (as defined in Treasury Regulation Section 54.4980B-9,
Q&A-4(a)) with respect to the transactions contemplated by this Agreement
(collectively, the "M&A QUALIFIED BENEFICIARIES"). Seller and the Selling Group
shall indemnify, defend and hold harmless Buyer and the buying group (as defined
in Treasury Regulation Section 54.4980B-9, Q&A-3(b)) for, from and against any
and all Losses relating to, arising out of, or resulting from any and all COBRA
obligations, liabilities and claims related to M&A Qualified Beneficiaries.
Seller and the Selling Group further agree and acknowledge that in the event
that the Selling Group ceases to provide any group health plan to any employee
prior to the expiration of the continuation coverage period for all M&A
Qualified Beneficiaries (pursuant to Treasury Regulation Section 54.4980B-9,
Q&A-8(c)), then Seller or a member of the Selling Group shall provide Buyer with
(i) written notice of such cessation as far in advance of such cessation as is
reasonably practicable (and in any event, at least thirty (30) days prior to
such cessation), and (ii) all information necessary or appropriate to enable
Buyer to offer continuation coverage to such M&A Qualified Beneficiaries if
Buyer determines it is legally obligated to do so.
36
7.5 COVENANTS TO SATISFY CONDITIONS
Each party shall proceed with all reasonable diligence and use commercially
reasonable efforts to satisfy or cause to be satisfied all of the conditions
precedent to the other party's obligation to purchase or sell the Assets that
are set forth in Section 8 or 9, as the case may be; provided, however, that
this provision shall not impose upon any party any obligation to incur
unreasonable expenses under the circumstances in order to fulfill any condition
contained in such Sections.
7.6 PRE-CLOSING ACCOUNTS RECEIVABLE
Seller agrees that, without the prior written consent of Buyer, it will not
transfer to a third party or engage a collection agent to collect any accounts
receivable arising from transactions relating to the Business that have occurred
prior to the date hereof or that occur prior to the Closing.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligation of Buyer to purchase the Assets and assume the Assumed
Liabilities at the Closing shall be subject to the satisfaction at or prior to
the Closing of each of the following conditions, any one or more of which may be
waived by Buyer:
8.1 NO INJUNCTION OR LITIGATION
As of the Closing Date, there shall not be any Claim or Judgment of any
nature or type threatened, pending or made by or before any Governmental Body
that questions or challenges the lawfulness of the transactions contemplated by
this Agreement or the Transaction Documents under any Law or seeks to delay,
restrain or prevent such transactions.
8.2 REPRESENTATIONS, WARRANTIES AND COVENANTS
(a) The representations and warranties of Seller made in this Agreement and
the other Transaction Documents (i) that are qualified by materiality shall be
true, complete and correct on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date, and (ii) that are not
qualified by materiality shall be true, complete and correct in all material
respects on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date;
(b) Seller shall have performed and complied in all material respects with
the covenants and agreements required by this Agreement to be performed and
complied with by it on or prior to the Closing Date; and
(c) Seller shall have delivered to Buyer a certificate dated the Closing
Date to the foregoing effects, signed by a duly authorized executive officer of
Seller.
37
8.3 NO MATERIAL ADVERSE EFFECT
From January 1, 2007 to the Closing Date, there shall not have occurred any
Material Adverse Effect, and Seller shall have no Knowledge of any change,
condition or event that could reasonably be expected to result in a Material
Adverse Effect; and Seller shall have delivered to Buyer a certificate dated the
Closing Date to the foregoing effects signed by a duly authorized executive
officer of Seller.
8.4 CONSENTS AND APPROVALS
Any authorizations of Seller's stockholders required for the consummation
of the transactions contemplated by this Agreement and the Transaction Documents
shall have been obtained and shall be in full force and effect. All consents,
approvals or authorizations of, or declarations, filings or registrations with,
all Governmental Bodies required for the consummation of the transactions
contemplated by this Agreement and the Transaction Documents shall have been
obtained or made on terms satisfactory to Buyer, in its sole discretion, and
shall be in full force and effect. Without limiting the generality of the
foregoing, all consents, approvals and authorizations necessary for the transfer
to Buyer of all Permits of all Governmental Bodies held by Seller with respect
to the Business, as listed in SCHEDULE 2.1.4 to the Disclosure Memorandum, shall
have been obtained and such consents, approvals and authorizations shall be in
full force and effect or shall, in Buyer's reasonable judgment, be obtainable
after the Closing Date upon compliance with applicable recording, registration
or filing procedures and without additional liability to Buyer. Buyer shall have
been granted all Permits of all Governmental Bodies substantially equivalent to
those held by Seller with respect to the Business, as listed in Schedule 2.1.4
to the Disclosure Memorandum, without having to accept any significantly more
burdensome conditions than are now imposed on Seller under such Permits.
Furthermore, except as set forth on SCHEDULE 5.4, all consents, approvals or
authorizations of any other third parties required for the consummation of the
transactions contemplated by this Agreement and the Transaction Documents,
including, without limitation, all consents of any third parties required for
the assignment to Buyer of any Contracts that constitute any of the Assets and
the continuation in effect of such Contracts following the Closing and such
assignment, and all Permits (including but not limited to all certifications,
endorsements and qualifications) of any third parties required in connection
with the conduct by Buyer of the Business following the Closing in the manner
heretofore conducted by Seller, shall have been obtained on terms satisfactory
to Buyer, in its sole discretion, and shall be in full force and effect. In
addition, the originals of all the consents, approvals, authorizations and
Permits referenced in this Section 8.4 shall have been delivered to Buyer.
8.5 TAXES
All Taxes and other assessments applicable to the Assets or the Business
that are due and owing as of the Closing Date shall have been paid, except for
Taxes and assessments to
38
be apportioned between the parties as of the Closing pursuant to Section 11.3 or
paid pursuant to Section 11.1.
8.6 DELIVERY OF DOCUMENTS AND BUSINESS SOFTWARE
Seller shall deliver the following documents, agreements and other items to
Buyer at the Closing, and the delivery of each shall be a condition to Buyer's
performance of its obligations to be performed at the Closing:
(a) a counterpart of the Xxxx of Sale executed by Seller;
(b) a counterpart of the Assumption Agreement executed by Seller;
(c) Lease Assignment and Assumptions, each in substantially the form of
EXHIBIT 8.6(C), duly executed by all parties thereto (other than Buyer) with
respect to the Leased Real Property;
(d) executed counterparts of one or more Assignments of Trademarks in
substantially the form of EXHIBIT 8.6(D) hereto covering each of the trademarks
described in SCHEDULE 2.1.1 to the Disclosure Memorandum, in due form for
recordation with the appropriate Governmental Body;
(e) executed counterparts of one or more Assignments of Patents in the form
of EXHIBIT 8.6(E) covering each of the patents and patent applications described
in SCHEDULE 2.1.1 to the Disclosure Memorandum, in due form for recordation with
the appropriate Governmental Body;
(f) any and all certificates of title relating to Personal Property
included within the Assets;
(g) one master copy of all the Business Software in both source and object
code formats, including, without limitation, source and object code formats for
(i) all versions of the Business Software that Seller is obligated to support
and maintain as of the Closing Date and (ii) prior releases of the Business
Software that Seller has in its possession that are not currently supported or
maintained by Seller, together with all access codes, login IDs, activation keys
and similar items required to use the Business Software in all applicable
environments;
(h) an executed Certificate of Non-Foreign Status in accordance with
Treasury Regulations Section 1.1445-2; and
(i) a Transition Services Agreement, in substantially the form of EXHIBIT
8.6(I), duly executed by Seller.
39
8.7 SATISFACTION OF CONDITIONS
All agreements and other documents required to be delivered by Seller
hereunder on or prior to the Closing Date shall be satisfactory in the
reasonable judgment of Buyer and its counsel. Buyer shall have received such
other agreements, documents and information as it may reasonably request in
order to establish satisfaction of the conditions set forth in this Section 8.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligation of Seller to sell the Assets to Buyer at the Closing shall
be subject to the satisfaction at or prior to the Closing of each of the
following conditions, any one or more of which may be waived by Seller:
9.1 NO INJUNCTION OR LITIGATION
As of the Closing Date, there shall not be any Claim or Judgment of any
nature or type threatened, pending or made by or before any Governmental Body
that questions or challenges the lawfulness of the transactions contemplated by
this Agreement or the Transaction Documents under any Law or seeks to delay,
restrain or prevent such transactions.
9.2 REPRESENTATIONS, WARRANTIES AND COVENANTS
(a) The representations and warranties of Buyer and Vesta Corporation made
in this Agreement or in the Transaction Documents shall be true, complete and
correct on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date;
(b) Buyer and Vesta Corporation shall have performed and complied in all
material respects with the covenants and agreements required by this Agreement
to be performed and complied with by it on or prior to the Closing Date; and
(c) Each of Buyer and Vesta Corporation shall have delivered to Seller a
certificate dated the Closing Date to the foregoing effects signed by a duly
authorized executive officer of Buyer.
9.3 DELIVERY OF DOCUMENTS
Buyer shall have executed and delivered to Seller the Xxxx of Sale, the
Assumption Agreement and, for each of the Leased Real Property parcels, Lease
Assignment and Assumptions, substantially in the forms of EXHIBITS 2.5(A),
2.5(B) and 8.6(C), respectively.
40
9.4 SATISFACTION OF CONDITIONS
All agreements and other documents required to be delivered by Buyer and by
Vesta Corporation hereunder on or prior to the Closing Date shall be
satisfactory in the reasonable judgment of Seller and its counsel. Seller shall
have received such other agreements, documents and information as it may
reasonably request in order to establish satisfaction of the conditions set
forth in this Section 9.
9.5 CONSENTS AND APPROVALS
All material consents, approvals or authorizations of, or declarations,
filings or registrations with, all Governmental Bodies required for the
consummation of the transactions contemplated by this Agreement and the
Transaction Documents shall have been obtained and shall be in full force and
effect. Furthermore, except as set forth on SCHEDULE 5.4 of the Disclosure
Memorandum, all material consents, approvals or authorizations of any other
third parties required for the consummation of the transactions contemplated by
this Agreement and the Transaction Documents, including, without limitation, all
consents of any third parties required for the assignment to Buyer of any
Contracts or Permits that constitute any of the Assets shall have been obtained
and shall be in full force and effect. To the extent that any of the Assets to
be transferred to the Buyer on the Closing, or any claim, right or benefit
arising under or resulting from such Assets (collectively, the "RIGHTS") is not
capable of being transferred without the approval, consent or waiver of any
third person, or if the transfer of a Right would constitute a breach of any
obligation under, or a violation of, any applicable law unless the approval,
consent or waiver of a third person is obtained, then, except as expressly
otherwise provided in this Agreement and without limiting the rights and
remedies of Buyer contained elsewhere in this Agreement, this Agreement shall
not constitute an agreement to transfer such Rights unless and until such
approval, consent or waiver has been obtained.
10. CERTAIN POST-CLOSING COVENANTS
10.1 FURTHER ASSURANCES
For a period of two years after the Closing Date, Seller shall from time to
time at Buyer's request execute and deliver, or cause to be executed and
delivered, such further instruments of conveyance, assignment and transfer or
other documents, and perform such further acts and obtain such further consents,
approvals and authorizations, as Buyer may reasonably require in order to fully
effect the conveyance and transfer to Buyer of, or perfect Buyer's right, title
and interest in, any of the Assets, to assist Buyer in obtaining possession of
any of the Assets, or to otherwise comply with the provisions of this Agreement
and consummate the transactions contemplated by this Agreement and the
Transaction Documents including, without limitation, obtaining at Seller's
expense those third party consents and assignments specifically identified in
Part A of SCHEDULE 5.14(E) of the Disclosure Memorandum as consents and
assignments to be delivered after the Closing.
41
10.2 BOOKS AND RECORDS
Within ten Business Days after the Closing, Seller shall deliver to Buyer
(a) all of the technical information and data and other Intellectual Property
rights to be transferred hereunder (including, without limitation, all of the
assets referenced in Section 2.1.1) which have been reduced to writing, (b)
except as set forth on SCHEDULE 5.14(B), all of the original Contracts
referenced in Section 2.1.5, (c) all of the books and records referenced in
Section 2.1.7, and (d) all of Seller's information and materials referenced in
Section 2.1.8.
10.3 SERVICES REQUESTS AND PRODUCT ORDERS
Seller shall promptly forward to Buyer all requests for services and orders
for Products, and other inquiries from customers or prospective customers of the
Business that are received by Seller within one year after the Closing Date.
10.4 WARRANTY CLAIMS
Seller shall promptly notify Buyer of all warranty claims, and other
warranty-related inquiries from customers or former customers received by Seller
after the Closing Date in regard to services rendered or products sold on or
prior to the Closing Date.
10.5 POST-CLOSING COOPERATION
For a period of two years after the Closing Date, each party shall provide
the other party with such reasonable assistance (without charge) as may be
requested by the other party in connection with any Claim or audit of any kind
or nature whatsoever or the preparation of any response, demand, inquiry,
filing, disclosure or the like (including, without limitation, any tax return or
form) relating to the Assets, the Assumed Liabilities or the Business. Such
assistance shall include, but not be limited to, permitting the party requesting
assistance to have reasonable access to the employees, books and records of the
other party.
10.6 PAYMENT OF BUSINESS EXCLUDED LIABILITIES
After the Closing Date, Seller shall pay when due the Excluded Assets that
relate to the Business.
10.7 CUSTOMER PAYMENTS
(a) No later than March 16, 2007, Seller shall deliver to Buyer a true and
complete list and accounting of all services rendered by Seller to customers of
the Business for which invoices were not issued on or prior to the Closing Date.
Buyer shall, in the ordinary course of the Business, issue to customers of the
Business invoices for services indicated on the list provided to Buyer pursuant
to this Section 10.7. Such invoices may also cover services rendered by Buyer
following the Closing. Upon receipt of any payments
42
relating to such invoices and services rendered by Seller prior to the Closing,
Buyer shall promptly pay to Seller an amount equal to such payments.
(b) Seller shall promptly pay to Buyer any payments it receives relating to
services rendered by Buyer following the Closing.
10.8 DATA MANAGEMENT.
In connection with the sale of the Assets hereunder (but without such data
and information constituting Assets), Seller has provided Buyer and Vesta
Corporation with data and information ("DATA") as described on SCHEDULE 10.8 of
the Disclosure Memorandum. Such Data shall be stored, maintained and used by
Buyer on behalf of Seller only as described in SCHEDULE 10.8 of the Disclosure
Memorandum. After the Closing, Buyer and Vesta Corporation shall use
commercially reasonably efforts, at Seller's expense, to assist Seller with
respect to the Data as described in SCHEDULE 10.8 of the Disclosure Memorandum.
10.9 CONFIDENTIALITY OBLIGATIONS OF BUYER FOLLOWING THE CLOSING.
From and after the Closing, Buyer and Vesta Corporation shall not disclose
or cause to be disclosed in any manner any Seller Confidential Information (as
hereinafter defined) or any part thereof, to any Person, or use or permit the
use of any Seller Confidential Information on its own behalf or for the benefit
of others, for any reason or purpose, except as otherwise set forth in this
Agreement, without the express prior written consent of the Seller. For purposes
of this Agreement, "SELLER CONFIDENTIAL INFORMATION" shall mean any written,
unwritten or electronic information relating to the Excluded Liabilities,
Excluded Assets or Data; provided, however, that "Seller Confidential
Information" shall not include information which: (i) is now, or hereafter
becomes, through no act on the part of the Buyer or Vesta Corporation, generally
known or available to the public; or (ii) is required to be disclosed by the
Buyer or Vesta Corporation by judicial action after all reasonably available
legal remedies to maintain the confidentiality of such information have been
exhausted at Seller's expense.
11. TAXES AND COSTS; APPORTIONMENTS
11.1 TRANSFER TAXES
Seller shall be responsible for the payment of all transfer, sales and use
and documentary taxes, filing and recordation fees and similar charges relating
to the sale or transfer of the Assets hereunder. Buyer shall furnish Seller with
any necessary certificates of Tax exemption. The parties shall cooperate with
each other to minimize any such Taxes.
11.2 TRANSACTION COSTS
Each party shall be responsible for its own costs and expenses incurred in
connection with the preparation, negotiation and delivery of this Agreement and
the Transaction
43
Documents, including but not limited to attorneys', accountants' and brokers'
fees and expenses.
11.3 APPORTIONMENTS
Any and all personal property taxes, assessments, lease rentals, prepaid
items, unbilled receivables, open purchase orders, and other charges applicable
to the Assets will be pro-rated to the Closing Date, and shall be allocated
between the parties by adjustment at the Closing, or as soon thereafter as the
parties may agree. All such taxes shall be allocated on the basis of the fiscal
year of the tax jurisdiction in question. Any security deposits relating to the
Assets shall be transferred to Buyer at the Closing and the Purchase Price shall
be increased by the amount thereof.
11.4 EMPLOYMENT TAXES
Seller shall prepare and furnish to each of the Offeree Employees employed
by Buyer following the Closing a Form W-2 that shall reflect all wages and
compensation paid to such employee for such portion of the calendar year
preceding the Closing Date in which such employee was in fact employed by
Seller, and shall file with the Social Security Administration Forms W-2 (Copy
A) that report all wages and compensation in fact paid by Seller with respect to
such employees. Buyer shall prepare and furnish to each of the Offeree Employees
employed by Buyer following the Closing a Form W-2 that shall reflect all wages
and compensation paid to such employee for such portion of the calendar year
following the Closing Date in which such employee is in fact employed by Buyer,
and shall file with the Social Security Administration Forms W-2 (Copy A) that
report all wages and compensation in fact paid by Buyer with respect to such
employees. Buyer will obtain new Forms W-4 and W-5, as applicable, from each of
the Offeree Employees employed by Buyer following the Closing Date. It is the
intent of the parties hereunder that the obligations of Buyer and the Seller
under this Section 11.4 shall be carried out in accordance with Section 4 of
Revenue Procedure 2004-53.
12. COVENANTS NOT TO COMPETE
12.1 COVENANTS
In consideration of the payment of a portion of the Purchase Price, as
described in Section 3.3, to the covenants set forth in this Section, Seller
covenants and agrees as follows:
(a) During the three-year period commencing on the Closing Date, Seller
shall not engage in any Restricted Activities (as such term is defined below),
whether directly or indirectly, for its account or otherwise, or as a
shareholder, owner, partner, manager, member, principal, agent, joint venturer,
consultant, advisor, franchisor or franchisee, independent contractor or
otherwise, in, with or of any Person that engages directly or indirectly in any
Restricted Activities. As used herein, "RESTRICTED ACTIVITIES" shall mean the
following types
44
of activities relating to or contemplated by the Business as of the Closing,
which Restricted Activities are conducted anywhere in the world: transaction
processing services for consumer credit qualification and service activation.
Subject to Sections 12.1(b) and (c) below, nothing contained herein shall
prohibit Seller from being acquired by any Person even if such Person is engaged
in the Restricted Activities, whether by asset or stock purchase, merger,
consolidation or otherwise, or in any manner inhibit or limit an acquiring
Person or any of its Affiliates from making any further acquisitions in the
Restricted Activities after the consummation of such acquisition.
(b) During the three-year period commencing on the Closing Date, Seller
shall not, directly or indirectly, hire, or solicit or encourage to leave the
employment of Buyer or any of its Affiliates, any TDS Employee hired by Buyer or
its Affiliates, or any employee of Buyer or its Affiliates, or have any
arrangement (financial, consulting or otherwise) with any such individual.
(c) During the three-year period commencing on the Closing Date, Seller
shall not, directly or indirectly, solicit, direct, encourage, induce or in any
way divert any customer of the Business to terminate such customer's
relationship with the Business or Buyer or to do business with any competitive
business.
12.2 MINOR INVESTMENTS
Notwithstanding the provisions of Section 12.1(a) above, Seller may at any
time own in the aggregate, directly or indirectly, for investment purposes only,
5% or less of any class of securities of any entity engaged in any Restricted
Activities traded on any national securities exchange.
12.3 REMEDIES
Seller acknowledges that compliance with the provisions of this Section 12
is necessary and proper to preserve and protect the Assets acquired by Buyer
under this Agreement and to assure that the parties receive the benefits
intended to be conveyed pursuant to this Agreement. Seller agrees that any
failure by Seller or any of its Affiliates to comply with the provisions of this
Section 12 shall entitle Buyer and its Affiliates, in addition to such other
relief and remedies as may be available, to equitable relief, including, without
limitation, the remedy of injunction. Resort to any remedy shall not prevent the
concurrent or subsequent employment of any other remedy, or preclude the
recovery by Buyer and its Affiliates of monetary damages and compensation.
13. SURVIVAL AND INDEMNIFICATION
13.1 SURVIVAL
All representations and warranties of Seller and Buyer contained in this
Agreement or in the Transaction Documents or in any certificate delivered
pursuant hereto or thereto shall
45
survive the Closing for a period of one year after the Closing Date (provided,
however, that Sections 5.2 (Corporate Authority), 5.7 (Taxes) and 5.8(b)
(Property; Assets) shall survive until the expiration of the applicable statute
of limitations, plus sixty (60) days, and Section 5.10 (Environmental and Safety
Matters) shall survive for five years after the Closing Date), and shall not be
deemed waived or otherwise affected by any investigation made or any Knowledge
acquired with respect thereto. The covenants and agreements of Seller and Buyer
contained in Sections 3.2, 7.1(b), 7.2, 7.4(c), 7.6, 10, 11, 12 and 15 and this
Section 13 of this Agreement and in the Transaction Documents shall survive the
Closing and shall continue until (i) all obligations with respect thereto shall
have been performed, satisfied or waived or (ii) expire or have been terminated
in accordance with their terms.
13.2 INDEMNIFICATION BY SELLER
From and after the Closing Date, Seller shall indemnify and hold Buyer and
its Affiliates harmless from and against, and shall reimburse Buyer and its
Affiliates for, any and all Losses arising out of or in connection with:
(a) any inaccuracy in any representation or warranty made by Seller in this
Agreement or in the Transaction Documents or in any certificate delivered
pursuant hereto or thereto;
(b) any failure by Seller to perform or comply with any covenant or
agreement in this Agreement or in the Transaction Documents;
(c) any claim by any Person for brokerage or finder's fees or commissions
or similar payments based upon any agreement or understanding alleged to have
been made by such Person directly or indirectly with Seller or any of its
officers, directors or employees in connection with any of the transactions
contemplated by this Agreement or the Transaction Documents;
(d) the conduct of the Business or the ownership or operation of the Assets
or the Assumed Liabilities on or prior to the Closing; or
(e) any Claim relating to any Excluded Assets or Excluded Liabilities.
13.3 INDEMNIFICATION BY BUYER
From and after the Closing Date, Buyer and Vesta Corporation, jointly and
severally, shall indemnify and hold harmless Seller and its Affiliates from and
against, and shall reimburse Seller and its Affiliates for, any and all Losses
arising out of or in connection with:
(a) any inaccuracy in any representation or warranty made by Buyer or Vesta
Corporation in this Agreement or in the Transaction Documents or in any
certificate delivered pursuant hereto or thereto;
46
(b) any failure by Buyer or Vesta Corporation to perform or comply with any
covenant or agreement in this Agreement or the Transaction Documents;
(c) any Claim by any Person for brokerage or finders' fees or commissions
or similar payments based upon any agreement or understanding alleged to have
been made by such Person directly or indirectly with Buyer or Vesta Corporation
or any of its officers, directors or employees in connection with any of the
transactions contemplated by the Agreement or the Transaction Documents; or
(d) the Assumed Liabilities or, to the extent relating exclusively to
periods after the Closing, the conduct by Buyer of the Business or the ownership
or operation by Buyer of the Assets.
13.4 THRESHOLD AND TIME LIMITATIONS
Neither party or its Affiliates shall be entitled to receive any
indemnification payment with respect to Claims for indemnification made under
Section 13.2(a) or Sections 13.3(a), as the case may be, until the aggregate
Losses that such party and its Affiliates would be otherwise entitled to receive
indemnification for with respect to such Claims under all such relevant Sections
exceed $50,000 (the "THRESHOLD"); provided, however, that once such aggregate
Losses exceed the Threshold, such party and its Affiliates shall be entitled to
receive indemnification payment for the aggregate Losses that they would be
entitled to receive without regard to the Threshold; and, provided further, that
Buyer or any of its Affiliates shall be entitled to indemnification for all
Losses arising in connection with Sections 5.2 (Corporate Authority), 5.7
(Taxes) and 5.8(b) (Property; Assets), or 5.22 (Brokerage) or based upon a claim
of fraud, in each case without regard to the Threshold, and Seller or any of its
Affiliates shall be entitled to indemnification for all Losses arising in
connection with Section 6.5 (Brokerage) or based upon a claim for fraud without
regard to the Threshold. Furthermore, neither party or its Affiliates shall be
entitled to assert any right of indemnification with respect to any Claim under
Section 13.2 or 13.3, as the case may be, of which neither such party or its
Affiliates have given written notice to the other party on or prior to the end
of the applicable survival period set forth in Section 13.1 above, except that
if such party or its Affiliates have given written notice of any such Claim to
the other party on or prior to the end of such survival period, then they shall
continue to have the right to be indemnified with respect to such pending Claim,
notwithstanding the expiration of such survival period. Notwithstanding anything
to the contrary, except for Claims based upon fraud, the aggregate
indemnification obligation of Seller under this Section 13 shall not exceed the
Purchase Price.
13.5 PROCEDURE
(a) Any party hereto or any of its Affiliates seeking indemnification
hereunder (in this context, the "INDEMNIFIED PARTY") shall notify the other
party (in this context, the "INDEMNIFYING PARTY") in writing reasonably promptly
after the assertion against the indemnified party of any Claim by a third party
(a "THIRD-PARTY CLAIM") in respect of which
47
the indemnified party intends to base a Claim for indemnification hereunder, but
the failure or delay so to notify the indemnifying party shall not relieve the
indemnifying party of any obligation or liability it may have to the indemnified
party except to the extent, and only to the extent, that the indemnifying party
demonstrates that its ability to defend or resolve such Third Party Claim is
adversely affected thereby.
(b) (i) Subject to the provisions of Section 13.5(c) below, the
indemnifying party shall have the right, upon written notice given to the
indemnified party within 30 days after receipt of the notice from the
indemnified party of any Third Party Claim, to assume the defense or handling of
such Third Party Claim, at the indemnifying party's sole expense, in which case
the provisions of Section 13.5(b)(ii) below shall govern.
(ii) The indemnifying party shall select counsel reasonably acceptable
to the indemnified party in connection with conducting the defense or handling
of such Third Party Claim, and the indemnifying party shall defend or handle the
same in consultation with the indemnified party, and shall keep the indemnified
party timely apprised of the status of such Third Party Claim. The indemnifying
party shall not consent to any settlement or to the entry of any judgment with
respect to any Third Party Claim which does not include a complete release of
the indemnified party from all liability with respect thereto or which imposes
any liability or obligation on the indemnified party without the prior written
consent of the indemnified party The indemnified party shall cooperate with the
indemnifying party and shall be entitled to participate in the defense or
handling of such Third Party Claim with its own counsel and at its own expense.
Notwithstanding the foregoing, in the event the indemnifying party fails to
conduct the defense or handling of any Third Party Claim in good faith after
having assumed such defense or handling, then the provisions of Section
13(c)(ii) below shall govern.
(c) (i) If the indemnifying party does not give written notice to the
indemnified party, within 30 days after receipt of the notice from the
indemnified party of any Third Party Claim, of the indemnifying party's election
to assume the defense or handling of such Third Party Claim, the provisions of
Section 13(c)(ii) below shall govern.
(ii) The indemnified party may, at the indemnifying party's expense,
select counsel in connection with conducting the defense or handling of such
Third Party Claim and defend and handle such Third Party Claim in such manner as
it may deem appropriate, provided, however, that the indemnified party shall
keep the indemnifying party timely apprised of the status of such Third Party
Claim and shall not settle such Third Party Claim without the prior written
consent of the indemnifying party, which consent shall not be unreasonably
withheld. If the indemnified party defends or handles such Third Party Claim,
the indemnifying party shall cooperate with the indemnified party and shall be
entitled to participate in the defense or handling of such Third Party Claim
with its own counsel and at its own expense.
48
(d) If the indemnified party intends to seek indemnification hereunder,
other than for a Third Party Claim, then it shall notify the indemnifying party
in writing within 90 days after its discovery of facts upon which it intends to
base its Claim for indemnification hereunder, but the failure or delay so to
notify the indemnifying party shall not relieve the indemnifying party of any
obligation or liability that the indemnifying party may have to the indemnified
party except to the extent, and only to the extent, that the indemnifying party
demonstrates that the indemnifying party's ability to defend or resolve such
Claim is adversely affected thereby.
(e) The indemnified party may notify the indemnifying party with respect to
a Claim even though the amount thereof plus the amount of other Claims
previously notified by the indemnified party aggregate less than the Threshold.
13.6 EXCLUSIVE REMEDY
The sole recourse and exclusive remedy of the Buyer against the Seller and
the for indemnifiable Claims, and the sole recourse and exclusive remedy of the
Seller against the Buyer and Vesta Corporation for indemnifiable Claims, in each
case arising out of this Agreement, the Transaction Documents or any
certificate, instrument or document delivered in connection with this Agreement,
or otherwise arising from the transactions contemplated hereby, whether in
contract, tort or otherwise, shall be to assert indemnification as provided in
this Section 13.
In the event that any party or any of its Affiliates alleges that it is
entitled to indemnification hereunder, and that its Claim is covered under more
than one provision of this Section 13, such party or Affiliate shall be entitled
to elect the provision or provisions under which it may bring a claim for
indemnification.
13.7 SPECIFIC PERFORMANCE
The parties to this Agreement acknowledge that it may be impossible to
measure in money the damages that a party would incur if any covenant or
agreement contained in this Agreement were not performed in accordance with its
terms and agree that each of the parties hereto shall be entitled to obtain an
injunction to require specific performance of, and prevent any violation of the
terms of, this Agreement, in addition to any other remedy available under this
Agreement or applicable Law. In any such action specifically to enforce any
provision of this Agreement, each party hereby waives any claim or defense
therein that an adequate remedy at law or in damages exists.
14. TERMINATION
14.1 TERMINATION
This Agreement may be terminated upon written notice given at any time
before the Closing:
49
(a) by the mutual written consent of Seller and Buyer;
(b) by Seller or Buyer, if the Closing shall not have occurred prior to
February 28, 2007 (the "EXPIRATION DATE"); provided, however, that the right to
terminate this Agreement under this Section 14.1(b) shall not be available to
any party whose failure to fulfill any obligation under this Agreement shall
have been the cause of, or shall have resulted in, the failure of the Closing to
occur prior to such date;
(c) by Seller, in the event of a material breach by Buyer of any
representation, warranty, covenant or agreement of Buyer contained herein that
has not been cured or is not curable by the Expiration Date; or
(d) by Buyer, in the event of a material breach by Seller of any
representation, warranty, covenant or agreement of Seller contained herein that
has not been cured or is not curable by the Expiration Date.
14.2 EFFECT OF TERMINATION
In the event of the termination of this Agreement pursuant to Section 14.1
above, (a) each party shall return or destroy all documents containing
confidential information of the other party (and, upon request, certify as to
the return or destruction thereof), and (b) no party hereto shall have any
liability or further obligation to the other party hereunder, except for
liabilities or obligations relating to any willful breach by Seller or Buyer of
any representation, warranty, covenant or agreement set forth herein.
15. MISCELLANEOUS
15.1 CONFIDENTIALITY OBLIGATIONS OF SELLER FOLLOWING THE CLOSING
From and after the Closing, Seller shall not disclose or cause to be
disclosed in any manner any Confidential Information (as hereinafter defined) or
any part thereof, to any Person, or use or permit the use of any Confidential
Information on its own behalf or for the benefit of others, for any reason or
purpose, except as otherwise set forth in this Agreement, without the express
prior written consent of the Buyer. For purposes of this Agreement,
"CONFIDENTIAL INFORMATION" shall mean any written, unwritten or electronic
information relating to the Business, the Assets or the Assumed Liabilities on
or prior to the Closing Date, including, without limitation, its products,
services, processes, equipment, customer lists, vendor lists, intellectual
property, source code, know-how and trade secrets regardless of how such
information was developed or acquired; provided, however, that "Confidential
Information" shall not include information which: (i) had been published and was
generally available to the public prior to the date of this Agreement; (ii) had
been published and became generally available to the public after the date of
this Agreement, unless such publication results from the breach of this
Agreement by the Seller, (iii) is now, or hereafter becomes, through no act on
the part of the Seller, generally known or available to the public; (iv) is
hereafter rightfully furnished to the Seller by a third party without
restriction and
50
without any breach of this Agreement or any other confidentiality agreement by
such third party; or (v) is required to be disclosed by the Seller by judicial
action after all reasonably available legal remedies to maintain the
confidentiality of such information have been exhausted at Buyer's expense.
15.2 PUBLIC ANNOUNCEMENTS
Each party agrees not to make any public announcement in regard to the
transactions contemplated by this Agreement and the Transaction Documents
without the other party's prior consent, except as may be required by law, in
which case the parties shall use reasonable efforts to coordinate with each
other with respect to the timing, form and content of such required disclosures.
15.3 SEVERABILITY
If any court determines that any part or provision of this Agreement is
invalid or unenforceable, the remainder of this Agreement shall not be affected
thereby and shall be given full force and effect and remain binding upon the
parties. Furthermore the court shall have the power to replace the invalid or
unenforceable part or provision with a provision that accomplishes, to the
extent possible, the original business purpose of such part or provision in a
valid and enforceable manner. Such replacement shall apply only with respect to
the particular jurisdiction in which the adjudication is made. Without in any
way limiting the generality of the foregoing, it is understood and agreed that
this Section 15.3 shall apply to the provisions of Section 12 and that the
provisions of Section 12, as they relate to each jurisdiction within their
geographical scope, constitute separate and distinct covenants.
15.4 MODIFICATION AND WAIVER
This Agreement may not be amended or modified in any manner, except by an
instrument in writing signed by each of the parties hereto. The failure of any
party to enforce at any time any of the provisions of this Agreement shall in no
way be construed to be a waiver of any such provision, or in any way affect the
right of such party thereafter to enforce each and every such provision. No
waiver of any breach of this Agreement shall be deemed to be a waiver of any
other or subsequent breach.
15.5 NOTICES
All notices and other communications required or permitted to be given
under this Agreement shall be in writing and shall be sent by facsimile
transmission, or mailed postage prepaid by first-class certified or registered
mail, or by a nationally recognized express courier service, or hand-delivered,
addressed as follows:
51
if to Buyer: Vesta Consumer Credit Services, Inc.
00000 XX Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to: Xxxxxxx Coie LLP
0000 XX Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
if to Seller: Lightbridge, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000)000-0000
Attention: General Counsel
with a copy to: Xxxxx Xxxx LLP
Seaport World Trade Center West
000 Xxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000)000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
if to Vesta Corporation Vesta Corporation
00000 XX Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to: Xxxxxxx Coie LLP
0000 XX Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
Either party may change the persons or addresses to which any notices or
other communications to it should be addressed by notifying the other party as
provided above. Any notice or other communication, if addressed and sent, mailed
or delivered as provided above, shall be deemed given or received three days
after the date of mailing as indicated on the certified or registered mail
receipt, or on the next business day if delivered by express courier service, or
on the date of delivery if hand-delivered, or on the date of transmission if
sent by facsimile transmission and received on or before 5:00 pm local time.
Facsimile
52
transmissions received after 5:00 pm local time will be deemed given or received
on the next business day after the date of transmission.
15.6 ASSIGNMENT
Neither Seller nor Buyer may assign any of its rights or obligations
hereunder without the prior written consent of the other party. Notwithstanding
the foregoing, Buyer may assign its rights and obligations under this Agreement
to any Affiliate of Buyer, and furthermore Buyer may assign its rights and
obligations hereunder to any successor of Buyer in the conduct of the Business
after the Closing; provided, however, that any such assignment by Buyer shall
not relieve Buyer from its obligations hereunder. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. Seller shall use commercially reasonable
efforts to cause any acquirer of substantially all its assets to agree to be
bound by its obligations hereunder as a condition to such acquisition. To the
extent such acquirer does not agree to be bound by Seller's obligations under
this Agreement, Seller and Buyer shall negotiate in good faith to provide
assurance to Buyer that those obligations will be satisfied.
15.7 CAPTIONS
The captions and headings used in this Agreement have been inserted for
convenience of reference only and shall not be considered part of this Agreement
or be used in the interpretation thereof.
15.8 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement and understanding between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations, representations and statements,
whether oral, written, implied or expressed, relating to such subject matter.
15.9 NO THIRD-PARTY RIGHTS
Nothing in this Agreement is intended, nor shall be construed, to confer
upon any Person other than Buyer and Seller (and, to the extent expressly
provided herein, their respective Affiliates) any right or remedy under or by
reason of this Agreement or the Transaction Documents.
15.10 COUNTERPARTS
This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, each of which shall be deemed to be
an original, but all of which shall constitute one agreement. To expedite the
process of entering into this Agreement, the parties acknowledge that
Transmitted Copies of this Agreement will be equivalent to original documents
until such time as original documents are completely executed and delivered.
53
"TRANSMITTED COPIES" will mean copies that are reproduced or transmitted via
photocopy, facsimile or other process of complete and accurate reproduction and
transmission.
15.11 GOVERNING LAW; JURISDICTION AND VENUE
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Oregon as though made and to be fully performed in that
State.
[Remainder of This Page Intentionally Left Blank]
54
IN WITNESS WHEREOF, the parties have caused this Asset Purchase Agreement
to be duly executed by their respective representatives hereunto authorized as
of the day and year first above written.
LIGHTBRIDGE, INC.
By: /s/ Xxxxxxx X. X'Xxxxx
------------------------------------
Name: Xxxxxxx X. X'Xxxxx
Title: Chief Financial Officer
VESTA CONSUMER CREDIT SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
VESTA CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
