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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
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CONTENTS
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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
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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
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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
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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
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SCHEDULES AND EXHIBITS
Schedule A
Business Software
Schedule B
Other Encumbrances
Schedule C
Products
Schedule 7.4 Offeree
Employees
Exhibit 2.5(a)
Bill 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
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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.
"BILL OF SALE": As defined in Section 2.5.
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"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.
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"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
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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 sue
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 Thomas Tivnan, Chris
LeBlanc and
Kate Cosentino, 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).
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"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,
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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.
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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.
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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.
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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.
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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
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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
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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 Bill of Sale
and
Assignment substantially in the form of EXHIBIT 2.5(A) (the "BILL
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.
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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 Perkins 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.
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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
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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.
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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
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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.
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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
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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
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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
<PAGE>
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
