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ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

ASSET PURCHASE AGREEMENT | Document Parties: TECHNOLOGY SOLUTIONS COMPANY | VALKRE SOLUTIONS, INC You are currently viewing:
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TECHNOLOGY SOLUTIONS COMPANY | VALKRE SOLUTIONS, INC

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Title: ASSET PURCHASE AGREEMENT
Governing Law: Illinois     Date: 1/7/2009
Industry: Computer Networks     Sector: Technology

ASSET PURCHASE AGREEMENT, Parties: technology solutions company , valkre solutions  inc
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Exhibit 10.1

ASSET PURCHASE AGREEMENT

BETWEEN

VALKRE SOLUTIONS, INC.

AND

TECHNOLOGY SOLUTIONS COMPANY

Effective as of December 31st, 2008

 

 


 

TABLE OF CONTENTS

 

 

 

 

 

ARTICLE I. PURCHASE AND SALE OF ASSETS

 

 

1

 

 

 

 

 

 

Section 1.1 Conveyance and Transfer of Assets

 

 

1

 

Section 1.2 Assumption of Liabilities and Obligations

 

 

2

 

Section 1.3 Prorations

 

 

3

 

Section 1.4 Purchase Price

 

 

3

 

Section 1.5 Payment of Cash Purchase Price

 

 

4

 

Section 1.6 Allocation of Purchase Price

 

 

4

 

 

 

 

 

 

ARTICLE II. THE CLOSING

 

 

4

 

 

 

 

 

 

Section 2.1 Date and Place

 

 

4

 

Section 2.2 Delivery of Documents

 

 

4

 

 

 

 

 

 

ARTICLE III. RELATED TRANSACTIONS

 

 

4

 

 

 

 

 

 

Section 3.1 Employment Releases

 

 

4

 

 

 

 

 

 

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLER

 

 

5

 

 

 

 

 

 

Section 4.1 Corporate Organization

 

 

5

 

Section 4.2 Corporate Authority; Authorization of Agreement

 

 

5

 

Section 4.3 No Violation

 

 

5

 

Section 4.4 No Undisclosed Liabilities

 

 

5

 

Section 4.5 Absence of Changes

 

 

6

 

Section 4.6 Title to Properties; Encumbrances

 

 

7

 

Section 4.7 Sufficiency of Assets

 

 

7

 

Section 4.8 Real Property

 

 

7

 

Section 4.9 Leases

 

 

7

 

Section 4.10 Condition of Tangible Assets

 

 

7

 

Section 4.11 Accounts Receivable

 

 

8

 

Section 4.12 Intellectual Property Matters

 

 

8

 

Section 4.13 Contracts and Commitments

 

 

8

 

Section 4.14 Insurance

 

 

9

 

Section 4.15 Compliance with Laws

 

 

9

 

Section 4.16 Employment Matters

 

 

10

 

Section 4.17 Employee Benefit Plans and Arrangements

 

 

10

 

Section 4.18 Litigation

 

 

11

 

Section 4.19 Governmental Consents

 

 

11

 

Section 4.20 Other Consents

 

 

11

 

Section 4.21 Product and Service Warranty

 

 

11

 

Section 4.22 Product and Service Liability

 

 

11

 

Section 4.23 Customers, Suppliers and Sales Representatives

 

 

11

 

Section 4.24 Guarantees

 

 

12

 

Section 4.25 Brokers or Finders

 

 

12

 

Section 4.26 Taxes

 

 

12

 

Section 4.27 Full Disclosure

 

 

12

 

 

 

 

 

 

ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

 

12

 

 

 

 

 

 

Section 5.1 Organization

 

 

12

 

Section 5.2 Authorization

 

 

13

 

Section 5.3 No Violation

 

 

13

 

Section 5.4 Governmental Consents

 

 

13

 

Section 5.5 Other Consents

 

 

13

 

Section 5.6 No Brokers

 

 

13

 

Section 5.7 Insurance

 

 

13

 

Section 5.8 Compliance With the Law

 

 

14

 

Section 5.9 Litigation

 

 

14

 

Section 5.10 Full Disclosure

 

 

14

 

 

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ARTICLE VI. CERTAIN COVENANTS OF SELLER

 

 

14

 

 

 

 

 

 

Section 6.1 Satisfaction of Conditions

 

 

14

 

 

 

 

 

 

ARTICLE VII. CERTAIN COVENANTS OF PURCHASER

 

 

15

 

 

 

 

 

 

Section 7.1 Satisfaction of Conditions

 

 

15

 

 

 

 

 

 

ARTICLE VIII. ADDITIONAL COVENANTS AND AGREEMENTS

 

 

15

 

 

 

 

 

 

Section 8.1 Payment of Taxes and Certain Expenses

 

 

15

 

Section 8.2 Noncompetition; Nonsolicitation; Nondisclosure

 

 

15

 

Section 8.3 Mail Received After Closing

 

 

16

 

Section 8.4 Cooperation and Records Retention

 

 

16

 

Section 8.5 Offers of Employment

 

 

17

 

Section 8.6 Further Assurances

 

 

17

 

 

 

 

 

 

ARTICLE IX. CONDITIONS TO THE OBLIGATIONS OF PURCHASER

 

 

17

 

 

 

 

 

 

Section 9.1 Representations and Warranties True

 

 

17

 

Section 9.2 Compliance with this Agreement

 

 

17

 

Section 9.3 Documents to be Delivered

 

 

17

 

Section 9.4 Consents, Releases and Approvals

 

 

18

 

Section 9.5 No Injunctions

 

 

18

 

Section 9.6 Material Adverse Changes

 

 

18

 

 

 

 

 

 

ARTICLE X. CONDITIONS TO THE OBLIGATIONS OF SELLER

 

 

19

 

 

 

 

 

 

Section 10.1 Representations and Warranties True

 

 

19

 

Section 10.2 Compliance with this Agreement

 

 

19

 

Section 10.3 Payment of Purchase Price

 

 

19

 

Section 10.4 Documents to be Delivered

 

 

19

 

Section 10.5 No Injunction

 

 

19

 

 

 

 

 

 

ARTICLE XI. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

 

 

20

 

 

 

 

 

 

Section 11.1 Survival of Representations and Warranties

 

 

20

 

Section 11.2 Indemnification by Seller

 

 

20

 

Section 11.3 Indemnification by Purchaser

 

 

21

 

Section 11.4 Limitation on Amount

 

 

21

 

Section 11.5 Notice of Claims

 

 

22

 

 

 

 

 

 

ARTICLE XII. MISCELLANEOUS PROVISIONS

 

 

22

 

 

 

 

 

 

Section 12.1 Amendment

 

 

22

 

Section 12.2 Waiver of Compliance

 

 

22

 

Section 12.3 Notices

 

 

23

 

Section 12.4 Specific Performance

 

 

23

 

Section 12.5 Expenses

 

 

23

 

Section 12.6 Severability

 

 

23

 

Section 12.7 Assignment

 

 

24

 

Section 12.8 Dispute Resolution

 

 

24

 

Section 12.9 Governing Law

 

 

24

 

Section 12.10 Counterparts

 

 

24

 

Section 12.11 Headings

 

 

24

 

Section 12.12 Entire Agreement

 

 

24

 

Section 12.13 Third Parties

 

 

25

 

Section 12.14 Performance Following Closing

 

 

25

 

Section 12.15 Certain Definitions

 

 

25

 

Section 12.16 Source Code Escrow

 

 

25

 

 

iii


 

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into this 31st day of December, 2008 by and between TECHNOLOGY SOLUTIONS COMPANY , a Delaware corporation (the “Seller”), and VALKRE SOLUTIONS, INC, a Delaware corporation (“Purchaser”).

WITNESSETH:

WHEREAS , Seller desires to sell to Purchaser substantially all of the assets, certain liabilities, properties, operations and business relating to its Customer Value Creation Consulting Practice (the “CVC Practice”), which is engaged in the business of providing software and services related to assisting customers indentify, measure and improve the value they create for their clients; and Purchaser desires to purchase from Seller such assets, liabilities, properties and business, as set forth below and in the attached schedules, upon the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE , in consideration of the premises and of the respective representations, warranties, covenants, agreements and conditions contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I.

PURCHASE AND SALE OF ASSETS

Section 1.1 Conveyance and Transfer of Assets Upon the terms and subject to all of the conditions contained herein and the performance by each of the parties hereto of their respective obligations hereunder, Purchaser hereby agrees to purchase from Seller, and Seller hereby agrees to sell and deliver to Purchaser at the Closing (hereinafter defined) the assets of the Seller’s CVC Practice set forth in Schedule 1.1(a) hereto (the “Assets”); assign the services agreements set forth in Schedule 1.1(b) hereto (the “Services Agreements”) and transfer other properties of the business which are set forth in this section, Section 1.1 (i) through (viii); all of which shall constitute “Transferred Assets” as defined in this Agreement free and clear of all liens, claims, encumbrances, charges, security interests or restrictions of any type whatsoever (“Encumbrances”), other than the Assumed Liabilities (as defined in Section 1.2 hereof) to be assumed by Purchaser as set forth in Section 1.2 hereof:

(i) all of the intangible rights and property of the CVC Practice utilized exclusively in the CVC Practice, including all such trademarks, trade names, service marks, inventions, patents, patent rights, applications for patents, similar rights, trade secrets, know-how, processes, product mixes, software, licenses, including software licenses, designs, going concern value and goodwill, and website content directly related to the CVC Practice;

 

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(ii) all marketing studies, customer lists, files, supplier files, sales agent and manufacturers’ representatives’ files, credit files, credit data, appraisals, valuations, and consulting studies used by the CVC Practice and all other records and reports used exclusively by the CVC Practice and all computers, computer programs, computer software, computer manuals, flowcharts, printouts, data files, program documentation and related materials and copies used exclusively by the CVC Practice, excluding any like items previously mentioned, which are used to run the daily operations of Seller’s other businesses;

(iii) all deposits (other than income tax deposits) and the appropriate amount of all expenses and deferred charges that have been prepaid or paid in advance by Seller prior to the Closing that directly relate to the CVC Practice (“Pre-Paid Obligations”);

(iv) all accounts receivable of the CVC Practice, other than those excluded pursuant to Section 1.6 hereof (the “Accounts Receivable”);

(v) all of Seller’s right, title and interest in and to all contracts, licenses and agreements of Seller exclusively relating to the CVC Practice that are transferable, including personal property leases, all contracts and agreements with customers and suppliers of Seller relating to the CVC Practice entered into in the ordinary course of business, including open orders (the “Contracts”), including those described on Schedules 4.10 and 4.14 hereto;

(vi) all stationery and other printed material, office supplies, catalogs and circulars, telephone, telecopy and email addresses and listings exclusively related to the CVC Practice, and the right to receive mail and other communications and shipments of merchandise addressed to the CVC Practice;

(vii) all files, records and documentation relating to the CVC Practice; and

(viii) all of Seller’s right, title and interest in and to all of the CVC Practice’s service agreements, maintenance agreements and express and implied warranties of third parties that continue in effect after the Closing.

Section 1.2 Assumption of Liabilities and Obligations

(a) As of the Closing Date and subject to the limitations set forth in this Section and Section 1.3 below, Purchaser shall assume and pay, discharge and perform all of the liabilities set forth in Schedule 1.2(a) hereto (the “Assumed Liabilities”) which shall include the following:

(i) all obligations and liabilities of Seller under any service agreements and other Contracts, relating to the time period after the Closing (the “Assumed Contract Liabilities”); and

(ii) the CVC Current Liabilities (as defined in Section 1.6); and

(iii) those obligations and liabilities specifically set forth in Schedule 1.2(a) hereto.

 

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(b) Except for the Assumed Liabilities, Purchaser shall not assume or otherwise agree to pay, discharge or perform any other liabilities or obligations of Seller in respect of the CVC Practice of Seller (whether accrued, absolute, contingent or otherwise, whether or not disputed, or whether or not disclosed to Purchaser), and the Transferred Assets shall be transferred, assigned and conveyed to Purchaser free and clear of all Encumbrances (other than the Assumed Liabilities).

(c) Seller shall remain responsible for the payment of those liabilities and obligations of Seller which relate to the CVC Practice other than Assumed Liabilities.

(d) Except as set forth in Schedule 1.2(b) Purchaser shall assume all warranty claims related to the CVC Practice.

Section 1.3 Prorations Except as otherwise specifically provided in this Agreement, real and personal property taxes and assessments levied against the Transferred Assets, property and equipment rentals, and similar prepaid and deferred items shall be prorated between Purchaser and Seller in accordance with the principle that Seller shall be responsible for such liabilities allocable to the conduct of the CVC Practice for the period prior to the Closing, and Purchaser shall be responsible only for such liabilities allocable to the conduct of the Business by Purchaser following the Closing. Seller and Purchaser shall deliver a statement setting forth such prorations at the time of making any such proration payment. Any prorations will, insofar as feasible, be determined and paid on the Closing Date, with final settlement and payment by the appropriate party occurring no later than 30 days after the actual amount becomes known.

Section 1.4 Purchase Price Subject to the terms and conditions hereof, in consideration of the sale, transfer, conveyance, assignment and delivery of the Transferred Assets and for the rights to receive and rely upon the representations, warranties, covenants and agreements of Seller, the Purchaser (a) shall pay Four Hundred Thousand and No/100 Dollars ($400,000.00) and (b) shall assume the Assumed Liabilities (the “Purchase Price”); and

(a)  Other Consideration Subject to the terms and conditions hereof, in consideration of the sale, transfer, conveyance, assignment and delivery of the Transferred Assets and for the rights to receive and rely upon the representations, warranties, covenants and agreements of Seller, the Purchaser (a) shall pay a seven percent (7%) commission on all signed contracts exceeding One Million Two Hundred and Fifty Thousand and No/100 Dollars ($1,250,000) for a period of twelve months from the date hereof and (b) shall make such payments to Seller when invoiced to its clients regardless of the twelve month period of time. For the purposes of this Section 1.4(a), the Parties agree that contract executed between Purchaser and Owens Corning Sales, LLC, dated December 19 th , 2008, and indentified in Schedule 1.1(b) , for One Million and No/100 Dollars ($1,000,000) will be applied to the threshold requirements One Million Two Hundred and Fifty Thousand and No/100 Dollars ($1,250,000) identified above.

(b)  Disclosure of Records Purchaser shall make available, upon request by Seller the books, documents, and records of Purchaser necessary to certify and fulfill the nature and extent of this Section 1.4.

 

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Section 1.5 Payment of Cash Purchase Price The Cash Purchase Price payable at Closing shall be paid in the following manner:

(a) At the Closing, Purchaser shall pay to Seller an amount equal to the Cash Purchase Price (as defined in Section 1.4 above) minus Two Hundred and Seventy Thousand Dollars ($270,000.00) by wire transfer of immediately available funds to an account designated by Seller in writing prior to Closing; and

(b) At the Closing, Purchaser shall execute a promissory note in form attached hereto as EXHIBIT A (the “Promissory Note”) evidencing Purchaser’s senior obligation to pay Two Hundred and Seventy Thousand Dollars ($270,000.00) to Seller under the terms thereof.

Section 1.6 Allocation of Purchase Price The parties agree that the Purchase Price shall be allocated among the Transferred Assets as determined by Purchaser in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder. Purchaser and Seller shall prepare and submit Internal Revenue Form 8594 prepared in accordance with such allocation and this Section 1.6, and Seller and Purchaser shall file all tax returns consistent with this Section 1.6. A tentative allocation is attached hereto as Schedule 1.6 , subject to adjustment pursuant to Section 1.5.

ARTICLE II.

THE CLOSING

Section 2.1 Date and Place The closing of the transaction contemplated hereby (the “Closing”) shall take place on December 31, 2008 at the offices of Seller in Chicago, Illinois, or at such other time and place as the parties mutually agree. The transactions contemplated by this Agreement shall be deemed to be effective for all purposes as of 12:01 a.m. on the Effective Date.

Section 2.2 Delivery of Documents

(a) At Closing, Seller shall execute and deliver to Purchaser such assignments, bills of sale and any other instruments of transfer necessary to convey to or perfect in Purchaser all of Seller’s right, title and interest in and to the Transferred Assets.

(b) At Closing, Seller shall deliver to Purchaser those other items specified in Section 9.3 and Purchaser shall deliver to Seller those items specified in Section 10.4.

ARTICLE III.

RELATED TRANSACTIONS

Section 3.1 Employment Releases At Closing, Purchaser and Jerry Alderman, Brian Kiep, Alex Monacelli, Gbenga Babarinde, Jamal Austin, and Matthew Cobb shall execute a Resignation and Release Agreement in the form attached here as Exhibit B (the “Releases”).

 

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ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents, warrants and covenants to Purchaser that:

Section 4.1 Corporate Organization Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; Seller has full power and authority to carry on its business as it is now being conducted and to own the properties and assets it now owns; and Seller is duly licensed and qualified to do business in any state or other jurisdiction or any foreign country or subdivision thereof where the nature of the CVC Practice or the character and location of any properties and assets owned or leased by the Seller for the CVC Practice make such qualification necessary (each of which are set forth in Schedule 4.1 ), except where the failure to so qualify could not reasonably be expected to have a material adverse effect on the CVC Practice or the Transferred Assets.

Section 4.2 Corporate Authority; Authorization of Agreement Seller has all requisite power and authority to execute and deliver this Agreement, to consummate the transactions contemplated hereby, and to perform all the terms and conditions hereof to be performed by it. The execution and delivery of this Agreement, the performance of all the terms and conditions hereof to be performed by Seller, and the consummation of the transactions contemplated hereby have been duly authorized and approved by the Seller. This Agreement has been duly executed and delivered by Seller and constitutes the valid and binding obligation of Seller enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency or other laws relating to or affecting the enforcement of creditors’ rights generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

Section 4.3 No Violation Except as set forth in Schedule 4.3 , neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will: (a) conflict with or violate any provision of the Certificate of Incorporation or Bylaws of Seller; (b) violate, conflict with, constitute a default (or an event which, with or without notice, lapse of time or both, or the occurrence of any other event, would constitute a default) under, result in the termination of, accelerate the performance required by, cause the acceleration of the maturity of any debt or obligation pursuant to, or result in the creation or imposition of any security interest, lien or other encumbrance upon any of the Transferred Assets under any agreement or commitment to which Seller is a party or by which Seller is bound, or to which the Transferred Assets are subject; or (c) violate any federal, state or local law or any judgment, decree, order, regulation or rule of any court or governmental authority.

Section 4.4 No Undisclosed Liabilities Seller has no material liabilities or obligations of any nature (whether absolute, accrued, contingent or otherwise, and whether due or to become due) relating to the CVC Practice, the Transferred Assets or otherwise that are not fully reflected or reserved against in the Interim Financial Statements of Seller, except for (a) liabilities and obligations identified in Schedule 4.4 and (b) liabilities and obligations incurred in the ordinary course of business and consistent with past business practice since the date of the Interim Financial Statements.

 

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Section 4.5 Absence of Changes Except as set forth in Schedule 4.5 hereto, since December 31, 2007, the Seller has conducted the CVC Practice in all material respects only in the ordinary course, including employee terminations for cost reduction and performance reasons, and during such period there has been no:

(i) transactions by the CVC Practice or affecting the CVC Practice except in the ordinary course of business that individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect on the CVC Practice;

(ii) destruction of, damage to, or loss of any of the assets to be included in the Transferred Assets (whether or not covered by insurance) that could reasonably be expected to have a Material Adverse Effect;

(iii) sale or transfer of any material asset which would otherwise be included in the Transferred Assets except in the ordinary course of business;

(iv) amendment or termination of any material contract, agreement or license to which Seller is a party in connection with the operation of the CVC Practice except for such normal closure of service engagements with customers and suppliers;

(v) waiver of any right of material value with respect to the Transferred Assets;

(vi) mortgage, pledge or other encumbrance of any of the Transferred Assets;

(vii) waiver or release of any Transferred Asset, except in the ordinary course of business;

(viii) any capital expenditure by the CVC Practice (or series of related capital expenditures) involving more than $10,000 in the aggregate;

(ix) creation, incurrence, assumption, or guarantee by Seller of any indebtedness of the CVC Practice, other than those included in the Assumed Liabilities impacting, affecting or that could form an Encumbrance on the Transferred Assets;

(x) delay or postponement by Seller, beyond its normal practice, of the payment of accounts payable and other liabilities of the CVC Practice which are being assumed by the Purchaser and Seller has not instituted any unusual or accelerated collection efforts with respect to its accounts receivable;

(xi) loan made by Seller to, or any other transaction with, any of the CVC Practice’s officers, and employees which could give rise to any claim or right on Seller’s part against any such person, or on the part of any such person against Seller, which exceeds $1,000, other than reflected on the financial statements of Seller;

(xii) new employment contract or collective bargaining agreement involving the CVC Practice or any of its employees, whether written or oral, or the substantial modification of the terms of any existing such contract or agreement (other than wage or salary increases in the ordinary course of business); or

(xiii) other event or condition of any character that has or might reasonably have a material, adverse effect on the financial condition, business, assets or prospects of the CVC Practice as it is being purchased by the Purchaser.

 

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Section 4.6 Title to Properties; Encumbrances Except as set forth on Schedule 4.6 , Seller has complete and unrestricted power and authority and the unqualified right to sell, transfer, convey, assign, and deliver to Purchaser, and upon consummation of the transactions contemplated by this Agreement, Purchaser will acquire good, valid and marketable title to, all the Transferred Assets, free and clear of all title defects or other Encumbrances, including, without limitation, leases, chattel mortgages, pledges, conditional sales contracts, collateral security arrangements and other title or interest retention arrangements. The bills of sale, deeds, assignments and other instruments to be executed and delivered to Purchaser by Seller at the Closing will be valid and binding obligations of Seller enforceable in accordance with their terms, and will vest in Purchaser good, valid and marketable title to all the Transferred Assets, free and clear of all Encumbrances, including, without limitation, leases, chattel mortgages, pledges, conditional sales contracts, collateral security arrangements and other title or interest retention arrangements.

Section 4.7 Sufficiency of Assets The Transferred Assets include all assets, properties and rights currently being used by Seller in the operation of the CVC Practice, and all assets, properties and rights necessary to permit Purchaser to conduct the CVC Practice in all material respects in the same manner as Seller has conducted it to date.

Section 4.8 Real Property The Transferred Assets do not include any interest in real property, neither fee nor leasehold.

Section 4.9 Leases Schedule 4.9 contains an accurate and complete list of all leases and subleases pursuant to which Seller leases personal property used in or relating to the CVC Practice and which are being assumed by the Purchaser as part of the transaction contemplated hereby. Except as set forth in Schedule 4.9 , all such leases are valid, binding and enforceable in accordance with their terms, except to the extent that such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors’ rights and remedies generally, and are in full force and effect; there are no existing defaults by Seller or lessor thereunder; and no event of default has occurred which (whether with or without notice, lapse of time or the happening or occurrence of any other event) would constitute a material default thereunder by any party thereto.

Section 4.10 Condition of Tangible Assets Except as set forth in Schedule 4.10 hereto, all material items of tangible property and assets which comprise the Transferred Assets contain no material defects and are in good operating condition and repair, subject to normal routine wear and maintenance, are usable in the regular and ordinary course of business, and conform in their current condition to all applicable laws, ordinances, codes, rules and regulations, and authorizations relating to their construction, use and operation, without any need for capital improvements or other modification or alteration. Except for leased property identified in Schedule 4.9 , no person other than Seller owns any equipment or other tangible assets or properties necessary to the operation of the Business.

 

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Section 4.11 Accounts Receivable Each of the Accounts Receivables of the CVC Practice included in the Transferred Assets represents a valid obligation arising from services rendered or products sold in the ordinary course of business of Seller and was created in compliance with applicable law. Unless paid prior to Closing, the Accounts Receivables are or will be as of Closing current and collectible net of the reserves shown on the Interim Balance Sheet. Seller and all of its collection agents have complied with all laws, rules and regulations with respect to the Accounts Receivables. None of the Accounts Receivables is subject to any right of offset or reduction and Seller is the sole beneficial and legal owner of all Accounts Receivables and none have been assigned to collection agents or otherwise. The Transferred Assets include sufficient records with respect to the receivables to determine the status of collection efforts and to enforce collection thereof. Any liabilities arising in connection with the creation of the receivables or the collection by Seller or its agents of the receivables which arose because of an act of the Seller or its agents prior to Closing shall remain the liability of Seller.

Section 4.12 Intellectual Property Matters Seller owns trademarks, service marks, trade names, copyrights, inventions, patents, patent rights, applications for patent rights, similar rights, trade secrets, know-how, processes, formulas, and designs (“Intellectual Property”) used or relied upon by the CVC Practice in the conduct of its business and which are included in the Transferred Assets, each of which are described and set forth with particularity in Schedule 4.12, other than licensed rights to software identified in such schedule, to which Seller has a valid licensed interest. Seller has the right to use and holds good and marketable title, free and clear of all Encumbrances, to each of such items of Intellectual Property described above in this Section 4.12. Seller has no knowledge of the infringement by any person, firm, associate, partnership or corporation of any such right of Seller. There is no claim pending or, to Seller’s knowledge, threatened against Seller with respect to alleged infringement of any trademark, service mark, trade name or copyright owned by any person related to the CVC Practice. No such Intellectual Property consisting of trademarks, service marks, trade names and copyrights have been registered with the United States Patent and Trademark Office or the United States Copyrights Office except as described on Schedule 4.12 , and Seller is currently in compliance with all formal legal requirements (including the timely post-registration filing of affidavits of use and incontestability and renewal applications) with respect to such registered Intellectual Property.

Section 4.13 Contracts and Commitments Schedules 1.1(b) and 4.13 list all of the written or oral Contracts which are included in the Transferred Assets, other than the leases which are identified on Schedule 4.9 . The Contracts include all service agreements, contracts, licenses or commitments which are material to the business and operations of the CVC Practice, other than the leases identified on Schedule 4.9 . Except as set forth in Schedule 4.13 :

(i) All Contracts are valid and in full force and effect, and are transferable and assignable to Purchaser, which assignment or transfer will not result in any additional cost or expense on the part of Purchaser;

(ii) Seller is not in material breach or default under or in violation of any Contract;

 

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(iii) Seller is not a party to any written or oral agreement, contract or commitment with any present or former employee or consultant or for the employment of any person, including any consultant, who is engaged in the conduct of the CVC Practice;

(iv) Seller is not a party to any written or oral commitment or agreement for any capital expenditure or leasehold improvement in excess of $10,000 relating to the CVC Practice, except for such normal operating expenditures of the CVC Practice; and

Seller is not a party to any written or oral agreement, contract or commitment limiting or restraining the CVC Practice, or any successor thereto from engaging or competing in any manner or in any business, nor, to Seller’s knowledge, is any employee of the CVC Practice engaged in the conduct of the CVC Practice subject to any such agreement, contract or commitment.

Section 4.14 Insurance

(a) Seller maintains insurance policies insuring the CVC Practice with financially sound insurance companies of such types (including, but not limited to, public liability, product and service liability, worker’s compensation and property damage) and such amounts as are adequate for the CVC Practice as currently conducted (and as conducted heretofore).

(b)  Schedule 4.14 contains (i) an accurate and complete list of all policies of insurance providing coverage for the CVC Practice, and (ii) a schedule setting forth the aggregate claims and all individual claims made under each such policy (or any predecessor policy) during the last two years.

(c) No notice of cancellation (except for those received during renewal periods), termination or reduction in coverage has been received with respect to any policy listed in Schedule 4.14 . Seller has not been refused any insurance with respect to its assets or operations, nor has its coverage been limited, by any insurance carrier to which it has applied for any such insurance or with which it has carried insurance during the last two years that has had or would reasonable be expected to have a Material Adverse Effect on the CVC Practice.

Section 4.15 Compliance with Laws Except as set forth in Schedule 4.15 :

(i) Seller has conducted the CVC Practice and any other activities in accordance in all material respects with all applicable laws, rules, regulations, judgments, orders and other requirements of all courts, administrative agencies, or governmental authorities having jurisdiction over Seller, including, without limitation, applicable laws, rules, regulations and requirements relating to antitrust, consumer protection, equal opportunity, occupational safety and health (OSHA), ERISA, Americans with Disabilities Act, employment, Environmental Law, clean air, labor, wage and hour, pension, welfare and securities matters;

(ii) Seller has not received within the last two years any notification of any asserted present or past failure by Seller to comply with such laws, rules or regulations that relates in any way to the CVC Practice;

 

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(iii) Seller has all licenses, certificates of occupancy, permits and other governmental authorizations or approvals (collectively, “Licenses”) required for the operation of the CVC Practice and the current use of the properties of the CVC Practice, each of which are described on Schedule 4.15 hereto, and all such Licenses are valid and in effect; and

(iv) Seller is not materiall


 
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