Exhibit 10.45
ASSET PURCHASE
AGREEMENT
This ASSET PURCHASE AGREEMENT (this
“Agreement”) dated as of October 3, 2007, is
entered into by and among Averion International Corp., a Delaware
corporation and IT&E International, Inc., a California
corporation (together, the “Seller”) on the one hand;
and IT&E, Inc., a Pennsylvania corporation
(“Buyer”), and Phil Clarke and Harvey F. Greenawalt
(individually, a “Shareholder,” and collectively, the
“Shareholders”) on the other hand.
RECITALS
A.
Capitalized terms not otherwise defined as they are referenced
herein shall have the meanings ascribed to such terms in Section
13.1 below.
B.
Seller operates a business known as the staffing services operating
segment of Seller, which provides staffing and regulatory
compliance and validation services to life sciences companies (the
“IT&E Business”).
C.
Seller desires to sell to Buyer, and Buyer desires to purchase from
the Seller, the Purchased Assets that relate to the IT&E
Business at the price and under the specified terms and conditions
as set forth herein.
NOW THEREFORE , in
consideration of the foregoing and the respective representations,
warranties, covenants, agreements and conditions hereinafter set
forth, and intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1.
Assets to be Transferred . Subject to
the terms and conditions of this Agreement, on the Closing Date,
Seller shall sell, transfer, convey, assign, and deliver to Buyer
and Buyer shall purchase and accept, the following assets of
Seller, in each case that are used solely in the IT&E Business,
together with all rights, privileges and goodwill associated with
such assets, other than the Excluded Assets, free and clear of all
Encumbrances (collectively the “Purchased
Assets”):
(a)
Tangible Personal Property
. All machinery, equipment,
computers, hardware, tools, supplies, furniture and all other fixed
assets owned, utilized or held for use by Seller solely in or for
the IT&E Business on the Closing Date.
(b)
Contracts . All of Seller’s
rights in, to and under all contracts to which it is a party and
that relate solely to the IT&E Business, other than the
Excluded Contracts (hereinafter the “Assumed
Contracts”). To the extent that any Assumed Contract for
which assignment to Buyer is provided herein is not assignable
without the consent of another party, this Agreement shall not
constitute an assignment or an attempted assignment thereof if
such
assignment or attempted assignment would
constitute a breach thereof. The Seller and Buyer agree to use
their commercially reasonable efforts (without any requirement on
the part of Seller or Buyer to pay any money or agree to any change
in the terms of any such Assumed Contract) to obtain the consent of
such other party to the assignment of any such Assumed Contract to
Buyer in all cases in which such consent is or may be required for
such assignment. Buyer shall be primarily responsible for obtaining
each such required consent, and Buyer shall report to Seller on a
weekly basis after the Closing Date as to the status of obtaining
each such consent if all such consents are not obtained prior to
the Closing. Each “Excluded Contract” (as defined in
Section 2.2(b) ) shall be set forth on Schedule
2.2(a) .
(c)
Accounts Receivable . All accounts
receivable, fees earned and accrued and other rights to payment
arising from the conduct of the IT&E Business, in whatever
form, which arise or accrue before the Closing Date, an aged
schedule of which is attached hereto as Schedule 1.1(c).
(d)
Rights in “IT&E” Name
. Subject to Section 1.2(c) below,
all right, title and interest of Seller, if any, in and to the name
“IT&E” and any and all derivatives thereof,
including, without limitation, any domain names, together with all
goodwill associated therewith, rights thereunder, remedies against
infringers or any other rights or claims related thereto or arising
therefrom.
(e)
Leased Real Property . The leases of
real property described on Schedule 1.1(e) (the “Real
Property Leases”) with respect to the real property described
thereon (the “Leased Real Property”) as well as any
cash security deposit related to any such Real Property Lease, it
being understood that the only Real Property Lease being assigned
to and assumed by the Buyer is that which relates to the Pottstown,
Pennsylvania location.
(f)
Personal Property Leases . All
leases of machinery, equipment, vehicles, furniture and other
personal property leased by Seller solely for the IT&E Business
and that are set forth on Schedule 1.1(f) (the
“Personal Property Leases”).
(g)
Records; Databases . All books,
records, ledgers, databases (including, without limitation the
Customer Relationship Management Database of the IT&E
Business), data and files of Seller related solely to the IT&E
Business of every kind including, without limitation, client and
investor lists, agreements with all clients, operating and
marketing plans, advertising and promotional materials, accounting
records, personnel and payroll records, and all other documents,
tapes, discs, programs or other embodiments of information of the
Seller, provided that Seller may keep a copy of any such records
necessary for audit, litigation or other legitimate business
purposes.
1.2.
Excluded Assets . The provisions of
Section 1.1 notwithstanding, the Purchased Assets shall not
include, and Seller shall not sell, transfer, assign, convey or
deliver to Buyer, and Buyer will not purchase or accept, the
following assets of Seller (collectively, the “Excluded
Assets”):
(a)
Cash . Any and all cash and cash
equivalents of Seller in existence or accrued prior to the Closing
Date, including, without limitation, any cash that relates to the
IT&E Business, including, without limitation, the Purchase
Price, but excluding any account receivable contemplated by Section
1.1(c) to the extent the same may be deemed a cash equivalent.
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(b)
Organizational Documents . (i)
Seller’s charter documents, taxpayer and other
identification numbers, minute books, capitalization tables and
other documents relating to the organization, maintenance and
existence of IT&E International, Inc., a California
corporation, (ii) any qualification to do business in any state, or
(iii) any of the rights of Seller under this Agreement (or any
related agreement between Seller, on the one hand, and the Buyer,
on the other hand, entered into on or after the date of this
Agreement).
(c)
Limited Use of “IT&E” Name .
Seller shall have and retain the right to
use and display the name “IT&E” and its derivatives
in connection with descriptions of Seller in which the phrase
“formerly known as IT&E International Group” or
similar wording is reasonably required, and Buyer hereby grants
Seller the right to so use and display such name for such purpose.
In addition, the parties acknowledge and agree that IT&E
International, Inc. shall continue to exist as a wholly-owned
subsidiary of Seller after the Closing and that Seller may continue
to own, operate and display the name IT&E International, Inc.
until such time as the same may be dissolved in accordance with
applicable laws and without resulting in any adverse tax
consequence or other Liability to Seller, provided that Seller does
not use IT&E International, Inc. or its name in a manner that
is inconsistent with this Agreement or to engage in any activity
expressly precluded pursuant to Section 11.7.
ARTICLE II
ASSUMPTION OF LIABILITIES
2.1.
Liabilities to be Assumed . On the
Closing Date, Buyer will assume and agree to discharge any and all
Liabilities related to or otherwise associated with the IT&E
Business, except the Excluded Liabilities (collectively the
“Assumed Liabilities”). The Assumed Liabilities shall
include, but not be limited to, the following:
(a)
Obligations under Assumed Contracts .
All obligations under the Assumed
Contracts, including without limitation, obligations: (i) to
furnish goods, services, and other non-cash benefits to a third
party after the Closing, (ii) to pay for goods, services or other
non-cash benefits that a third party will furnish after the
Closing, or (iii) to indemnify any third party pursuant to the
terms of any such Assumed Contract.
(b)
Obligations under Real Property Leases .
All obligations under the Real Property
Leases arising after the Closing Date, including, without
limitation, any letter of credit required by the Landlord
thereunder for future performance.
(c)
Accounts Payable . All accounts
payable and other payment obligations to third parties arising from
or related to the IT&E business, in whatever form, which arise
or accrue prior to the Closing Date, an aged schedule of which is
attached hereto on Schedule 2.1(c) (collectively, the
“Accrued Accounts Payable”).
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2.2.
Excluded Liabilities . Buyer is not
assuming the following Liabilities of the IT&E Business or
Seller which shall be and remain the responsibility of Seller
(collectively, the “Excluded Liabilities”):
(a)
Excluded Contracts . Any and all
Liabilities under the agreements and contracts listed on
Schedule 2.2(a) and any contract that does not relate solely
to the IT&E Business (the “Excluded
Contracts”).
(b)
Michael Watts Dispute . Any
Liability that may become due or owing to Michael Watts arising out
of the current dispute with Mr. Watts.
(c)
Evonne Portland Dispute . Any
Liability that may become due or owing to Evonne Portland arising
out of the current dispute with Ms. Portland.
(d)
Relocation Expenses . Any Liability
related to any relocation expenses claimed by any former officer or
director of Seller.
(e)
Governmental Investigations . Any
Liability associated with any action brought by a governmental
entity with respect to the activities of the IT&E
Business.
(f)
Shareholder Actions . Any Liability
arising from any action by a stockholder of the Seller for actions
or conduct relating to this Agreement or action undertaken by any
officer or director of the Seller which is not disclosed on
Schedule 2.2(f) .
ARTICLE III
PURCHASE PRICE - PAYMENT
3.1.
Purchase Price . The aggregate
purchase price for the Purchased Assets and assumption of the
Assumed Liabilities shall be $2,275,000 which amount shall be paid
as set forth in this Article III (the “Purchase
Price”).
3.2.
Payment of Purchase Price . The
Purchase Price shall be paid by Buyer as follows:
(a)
At the Closing, Buyer shall deliver to Seller such documents and
instruments as are reasonably required to evidence the assumption
of the Assumed Liabilities.
(b)
At the Closing, Buyer shall make a cash payment to Seller in the
aggregate amount of Four Hundred Fifty-Five Thousand Dollars
($455,000) payable by wire transfer of immediately available funds
to an account or accounts designated by the Seller in writing at
least two (2) days before the Closing.
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(c)
Buyer shall pay the Seller an additional Two Hundred and Fifty
Thousand Dollars ($250,000) in cash by wire transfer of immediately
available funds to a bank account identified by Seller in
accordance with the following:
(i)
Eighty Three Thousand Three Hundred Thirty-Three Dollars ($83,333)
shall be paid on or before January 31, 2008;
(ii)
An additional Eighty Three Thousand Three Hundred Thirty-Three
Dollars ($83,333) shall be paid on or before April 30, 2008;
and
(iii)
An additional Eighty Three Thousand Three Hundred Thirty-Four
Dollars ($83,334) shall be paid on or before July 31, 2008.
(d)
At the Closing, Buyer shall deliver to Seller an originally
executed promissory note in the form attached hereto as Exhibit
C (the “Term Note”), in principal amount of Eight
Hundred Thousand Dollars ($800,000).
(e)
At the Closing, Buyer shall deliver to Seller an originally
executed promissory note in the form attached hereto as Exhibit
D (the “Interest Only Note”), in principal amount
of Seven Hundred Seventy Thousand Dollars ($770,000).
3.3.
Allocation of Purchase Price . Seller
shall prepare an allocation of the Purchase Price (and all other
capitalized costs) among the Purchased Assets in accordance with
Section 1060 of the Internal Revenue Code of 1986, as amended, and
the Treasury regulations thereunder (and any similar provision of
state, local or foreign law, as appropriate). Seller shall deliver
such allocation to the Buyer within sixty (60) days after the
Closing Date. Buyer shall report, act and file tax returns
(including, but not limited to Internal Revenue Services Form 8594)
in all respects and for all purposes consistent with such
allocation. Buyer shall not take any position (whether in audits,
tax returns or otherwise) that is inconsistent with such allocation
unless required to do so by applicable law.
ARTICLE IV
CLOSING
4.1.
Closing . The closing of the
transactions contemplated by this Agreement (the
“Closing”), shall take place at 10:00 a.m. (PDT) at the
offices of Foley & Lardner LLP, 402 W. Broadway, Suite 2100,
San Diego, California 92101, on or before October 3, 2007,
unless another date or place is agreed to in writing by the parties
hereto. The date on which the Closing actually occurs is
hereinafter referred to as the “Closing Date.”
4.2.
Documents to be Delivered by Seller
. At the Closing, Seller shall deliver the
following documents, in each case duly executed by each of the
parties thereto or otherwise in proper form:
(a)
Bill of Sale . A bill of sale for
all of the Purchased Assets described in Section 1.1
substantially in the form attached hereto as Exhibit A (the
“Bill of Sale”);
(b)
Assignment and Assumption Agreement .
An assignment and assumption agreement for
the Assumed Contracts (including the Real Property Leases)
substantially in the form attached hereto as Exhibit B (the
“Assignment and Assumption Agreement”).
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4.3.
Documents to be Delivered by Buyer
. At the Closing, Buyer shall deliver the
following documents, in each case duly executed or otherwise in
proper form:
(a)
Assignment and Assumption Agreement
The Assignment and Assumption
Agreement;
(b)
Certified Resolutions . A certified
copy of the resolutions of the board of directors and shareholders
of the Buyer authorizing and approving this Agreement and the
consummation of the transactions contemplated by this
Agreement;
(c)
Term Note . The Term Note;
(d)
Interest Only Note . The Interest Only
Note;
(e)
Evidence of Line of Credit . Evidence of
the existence of the Secured Debt (as that term is defined in
Section 11.1 below) in a form reasonably satisfactory to
Seller and Seller’s counsel; and
(f)
IT&E Employee Acknowledgments . Seller
shall have received the requisite acknowledgments from each Hired
IT&E Employee (as that term is defined in Section 7.1
below) as set forth in Section 7.5 hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer
as of the date hereof as follows:
5.1.
Organization, Standing and Authority
. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation. Seller has all
requisite company, corporate or partnership, as applicable, power
and authority to conduct the IT&E Business as presently
conducted and to execute and deliver this Agreement and the
documents contemplated hereby and to perform and comply with all of
the terms, covenants and conditions to be performed and complied
with by it hereunder and thereunder.
5.2.
Authorization and Binding Obligation
. The execution, delivery and performance of
this Agreement and each Transaction Document by Seller have been
duly authorized by all necessary company, corporate or partnership
action on the part of Seller. This Agreement and each applicable
Transaction Document have been duly executed and delivered by
Seller and, assuming the due authorization, execution and delivery
of this Agreement by Buyer, constitute the legal, valid and binding
obligations of Seller enforceable against Seller in accordance with
their terms, except as the enforceability hereof may be limited by
bankruptcy, insolvency, reorganization or similar laws relating to
or affecting creditors’ rights generally, or by general
equity principles (whether applied in a court of law or a court of
equity and including limitations on the availability of specific
performance or other equitable remedies).
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5.3.
No Representations or Warranties with Respect to Purchased
Assets or the IT&E Business . EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SALE OF THE PURCHASED
ASSETS IS “AS IS,” “WHERE IS,” AND
“WITH ALL FAULTS” IN THEIR PRESENT CONDITION WITHOUT
ANY RECOURSE, WARRANTY OR REPRESENTATION OF ANY KIND, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY, TITLE OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller
as of the date hereof as follows:
6.1.
Organization, Standing and Authority
. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the state
of its organization. Buyer has all requisite company power and
authority to conduct its business as presently conducted to execute
and deliver this Agreement and the documents contemplated hereby
and to perform and comply with all of the terms, covenants and
conditions to be performed and complied with by Buyer hereunder and
thereunder. Buyer is duly qualified or licensed to do business as a
foreign company, and is in good standing, in every jurisdiction
where failure to be so qualified or licensed could have a Material
Adverse Effect on Buyer.
6.2.
Authorization and Binding Obligation
. The execution, delivery and performance of
this Agreement and the Transaction Documents by Buyer have been
duly authorized by all necessary company action on the part of
Buyer. This Agreement and each applicable Transaction Document have
been duly executed and delivered by Buyer and, assuming the due
authorization, execution and delivery of this Agreement by Seller,
constitute the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with their terms, except as
the enforceability hereof may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to or affecting
creditors’ rights generally, or by general equity principles
(whether applied in a court of law or a court of equity and
including limitations on the availability of specific performance
or other equitable remedies).
ARTICLE VII
EMPLOYEES - EMPLOYEE BENEFITS
7.1.
IT&E Business Employees . Buyer
may, in its sole discretion, offer employment to each employee
employed in the IT&E Business (each, an “IT&E
Business Employee”), except as otherwise agreed to in writing
between the parties prior to the Closing Date. Buyer shall hire
those IT&E Business Employees to whom it makes offers effective
as of the Closing Date, at which time each such IT&E Business
Employee will become an “at will” employee of the
Buyer. At the time such IT&E Business Employee becomes an
employee of
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Buyer, such IT&E Business Employee will be
eligible to participate in Buyer’s benefit plans and programs
to the same extent available to other similarly situated employees
of Buyer. The IT&E Business Employees actually hired by Buyer
on the Closing Date shall be referred to herein as “Hired
IT&E Employees.” Buyer shall be responsible for
paying any wages or salaries for work performed by each Hired
IT&E Employee after the Closing, accrued vacation pay or other
earned time off and severance benefits due to each Hired IT&E
Employee, and Buyer shall assume, and shall give each Hired
IT&E Employee credit for all accrued vacation and other earned
time off, which assumption is intended to discharge any obligation
that the Seller may have with respect to such vacation pay and
other earned time off as to each such Hired IT&E
Employee.
7.2.
Buyer Benefit Plans . With respect to
any plans, programs and arrangements of Buyer in which any Hired
IT&E Employee is eligible to participate on or after the
Closing Date (“Buyer Employee Plans”), Buyer shall: (i)
waive all pre-existing conditions, exclusions and waiting periods
with respect to participation and coverage requirements applicable
to any such employees and their eligible dependents under any Buyer
benefit plans in which such employees and their eligible dependents
may be eligible to participate after the Closing Date, except to
the extent such pre-existing conditions, exclusions or waiting
periods would apply under the analogous Seller benefit plan; (ii)
provide each Hired IT&E Employee and their eligible dependents
with credit for any co-payments and deductibles paid prior to the
Closing Date (to the same extent that such credit was given under
the analogous Seller benefit plan prior to the Closing Date) in
satisfying any applicable deductible or out-of-pocket requirements
under any Buyer Employee Plans in which such employees may be
eligible to participate after the Closing Date; and (iii) recognize
all service of the Hired IT&E Employees with Seller and its
respective affiliates, for all purposes (including, purposes of
eligibility to participate, vesting credit, entitlement to
benefits, and, except with respect to defined benefit pension
plans, benefit accrual) in any Buyer Employee Plans in which such
employees may be eligible to participate after the Closing Date, to
the extent that such service was credited under the analogous
Seller benefit plan prior to the Closing Date; provided that the
foregoing shall not apply to the extent it would result in
duplication of benefits. In addition, the parties shall cooperate
with each other and take those actions reasonably necessary in
order to transfer each Hired IT&E Employee’s 401(k)
account to an analogous plan sponsored by the Buyer. On or before
the Closing Date, Seller will pay all employer 401(k) matching
contributions that are due as of the Closing Date and Buyer assumes
no obligation with respect to any such employer contributions that
were due prior to the Closing Date.
7.3.
Retained Responsibilities . Seller
agrees to satisfy, or cause its insurance carriers to satisfy, all
claims for benefits, whether insured or otherwise (including, but
not limited to, workers’ compensation, life insurance,
medical and disability programs), under its employee benefit
programs brought by, or in respect of, IT&E Business Employees
who do not become Hired IT&E Employees. Buyer agrees to
satisfy, or cause its insurance carriers to satisfy, all claims for
benefits, whether insured or otherwise (including, but not limited
to, workers’ compensation, life insurance, medical and
disability programs), under its employee benefit programs brought
by, or in respect of, Hired IT&E Employees. If any action on
the part of any Seller prior to the Closing, or if the transactions
contemplated by this Agreement shall result in any liability for
severance payments or termination benefits, such liability shall be
the sole responsibility of the Seller, and the Seller shall
indemnify, defend and hold harmless Buyer against such
liability.
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7.4.
Payroll Tax . Seller shall make a
clean cut-off of payroll and payroll tax reporting with respect to
each Hired IT&E Employee paying over to the federal, state and
city governments those amounts respectively withheld or required to
be withheld for periods ending on or prior to the Closing Date.
Seller shall issue, by the date prescribed by IRS Regulations,
Forms W-2 for wages paid through the Closing Date to each such
Hired IT&E Employee. Buyer shall be responsible for all payroll
and payroll tax obligations after the Closing Date with respect to
each Hired IT&E Employee.
7.5.
Employment with Buyer . No later than
two (2) days prior to the Closing, each Hired IT&E Employee
shall execute an acknowledgment of employment with Buyer to be
effective at the Closing, acknowledging, among other things, that:
(i) the employee’s employment with the Seller has terminated
and that such employee has no carry over rights with respect to any
and all employee benefits relating to any former employment with
the Seller, including, without limitation, any accrued vacation or
other paid time off, all of which shall be and remain the sole
responsibility of the Buyer and that such employee has been paid
all wages or other cash remuneration due or owing to such employee
as of the Closing Date and that Seller has made all 401(k) matching
contributions with respect to such employee that are due as of the
Closing Date; (ii) such employee has ninety (90) days to exercise
the vested portion of such employee’s options to purchase
Seller common stock, if any, after which time such options shall
immediately terminate and be of no further force or effect, (iii)
upon execution of the appropriate documentation, such employee will
be fully covered under the Buyer’s standard health insurance
benefits; (iv) demotion and transfer of such employee may occur in
the sole and absolute discretion of Buyer at any time, with or
without cause and/or notice; and (v) employment with Buyer is
“at-will.”
7.6.
No Third-Party Rights . Nothing in
this Agreement, express or implied, is intended to confer upon any
of Seller’s employees or former employees, collective
bargaining representatives, job applicants, any association or
group of such persons any rights or remedies of any nature or kind
whatsoever under or by reason of this Agreement, including, without
limitation, any rights of employment.
ARTICLE VIII
CONDITIONS PRECEDENT TO BUYER’S OBLIGATIONS
8.1.
Conditions to Obligations of Buyer to Consummate the
Transactions . The obligation of Buyer
to consummate the transactions contemplated by this Agreement shall
be subject to the satisfaction of the following conditions, unless
waived in writing prior to the Closing by Buyer:
(a)
The Seller shall have performed, in all material respects, all
obligations and complied with all covenants required by this
Agreement to be performed or complied with by it prior to the
Closing.
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(b)
Each of the documents or other items to be delivered by the Seller
at the Closing pursuant to Section 4.2 shall have been
delivered.
(c)
All consents, approvals, authorizations, orders and action of any
governmental entity required to permit the consummation of the
transactions contemplated by this Agreement shall have been
obtained, made or waived and shall be in full force and
effect.
(d)
No action shall have been taken, and no statute, rule, regulation,
executive order, judgment, decree, or injunction shall have been
enacted, entered, promulgated or enforced (and not repealed,
superseded, lifted or otherwise made inapplicable), by any court or
governmental or regulatory agency of competent jurisdiction which
restrains, enjoins or otherwise prohibits the consummation of the
transactions contemplated by this Agreement (each party agreeing to
use its reasonable best efforts to avoid the effect of any such
statute, rule, regulation or order or to have any such order,
judgment, decree or injunction lifted).
ARTICLE IX
CONDITIONS PRECEDENT TO SELLER’S OBLIGATIONS
9.1.
Conditions to Obligations of the Seller to Consummate the
Transactions . The obligation of Seller
to consummate the transactions contemplated by this Agreement shall
be subject to the satisfaction of the following conditions, unless
waived in writing prior to the Closing by Seller:
(a)
Buyer shall have performed, in all material respects, all
obligations and complied with all covenants required by this
Agreement to be performed or complied with, in all material
respects, by it prior to the Closing.
(b)
Each of the documents and other items to be delivered by the Buyer
at the Closing pursuant to Section 4.3 shall have been
delivered.
(c)
All consents, approvals, authorizations, orders and action of any
governmental entity required to permit the consummation of the
transactions contemplated by this Agreement shall have been
obtained, made or waived and shall be in full force and
effect.
(d)
No action shall have been taken, and no statute, rule, regulation,
executive order, judgment, decree, or injunction shall have been
enacted, entered, promulgated or enforced (and not
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