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ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

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Analysts International Corporation | Netarx LLC

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Title: ASSET PURCHASE AGREEMENT
Governing Law: Michigan     Date: 8/5/2009
Industry: Software and Programming     Law Firm: Fredrikson Byron     Sector: Technology

ASSET PURCHASE AGREEMENT, Parties: analysts international corporation , netarx llc
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Exhibit 2.1

 

ASSET PURCHASE AGREEMENT

 

by and between

 

NETARX LLC,

a Michigan limited liability company

AS BUYER

 

and

 

ANALYSTS INTERNATIONAL CORPORATION

a Minnesota corporation

AS SELLER

 

August 4, 2009

 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

ASSET PURCHASE AGREEMENT

1

RECITALS

1

1.

Certain Definitions

1

2.

Sale and Transfer of Assets

4

3.

Sublease of Premises

6

4.

Excluded Assets

6

5.

Consideration

7

6.

Assumed Liabilities

7

7.

Allocations

7

8.

Deliverables

8

9.

Limited Scope

8

10.

Representations and Warranties of Seller

8

11.

Representations and Warranties of Buyer

11

12.

Additional Provisions – Customer Contracts

11

13.

Additional Provisions – Employment Matters

12

14.

Additional Provisions – Tangible Personal Property

13

15.

Additional Covenants and Agreements of Seller

13

16.

Non-Competition and Non-Solicitation Covenants

13

17.

Non-Disparagement

14

18.

Modification of Certain Covenants

14

19.

Customer and Other Business Relationships

14

20.

Further Assurances

15

21.

Indemnification and Reimbursement by Seller

15

22.

Indemnification and Reimbursement by Buyer

16

23.

Limitations on Liability

16

24.

Remedies

16

25.

Confidentiality

17

26.

Public Announcements

20

27.

Fees and Expenses

20

28.

Miscellaneous

20

 



 

Exhibit A – Customer Contracts

24

Exhibit B – Tangible Personal Property

233

Exhibit B1 – Intellectual Property

288

Exhibit B2 – Deferred Revenues

289

Exhibit B3 – Inventories

290

Exhibit B4 – Software, Etc.

312

Exhibit C – Form of Sublease Agreement

313

Exhibit D – Permitted Encumbrances

323

Exhibit E – Purchase Price Allocation

324

Exhibit F – Bill of Sale

325

Exhibit G – Waiver of Non-Compete

327

Exhibit H – Employees to be Hired by Buyer

328

Exhibit I – Form of Consent

335

Exhibit J – Licenses, Permits and Authorizations

337

Exhibit K – Form of Promissory Note

338

Exhibit B5 – Customer Credits

341

 



 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement, dated August 4, 2009, is made by and between Netarx LLC, a Michigan limited liability company (“Buyer”), and Analysts International Corporation, a Minnesota corporation (“Seller”).

 

RECITALS

 

Seller desires to sell, and Buyer desires to purchase, certain assets of Seller for the consideration and on the terms set forth in this Agreement.

 

The Parties, intending to be legally bound, agree as follows:

 

1.                                        Certain Definitions.

 

1.1.                               For purposes of this Agreement, the following terms and variations thereof have the meanings specified or referred to in this Section 1:

 

1.2.                               “Acquired Assets” — as defined in Section 2.

 

1.3.                               “Action” — as defined in Section 10.8.

 

1.4.                               “Affiliate” — any Person that directly or indirectly controls, is controlled by, or is under common control with Buyer, where “control” means (i) the power to direct (or cause the direction of) the management and policies of a Person, whether through ownership of voting securities, through contract or otherwise, or (ii) ownership of at least twenty percent (20%) of the voting stock, shares or interests of such Person.  A Person that otherwise qualifies under this definition will be included within the meaning of “Affiliate” even though acquired after the execution of this Agreement.

 

1.5.                               “Agreement” — this Asset Purchase Agreement, dated August 4, 2009, made by and between Buyer and Seller, including all Exhibits attached hereto.

 

1.6.                               “Assumed Liabilities” — as defined in Section 6.

 

1.7.                               “Best Efforts” —  the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to achieve that result as expeditiously as possible, provided, however , that a Person required to use Best Efforts under this Agreement will not be thereby required to take actions that would result in a material adverse change in the benefits to such Person of this Agreement and the Contemplated Transactions or to dispose of or make any change to its business, expend any material funds or incur any other material burden except as required by this Agreement.

 

1.8.                               “Breach” — any breach of, or any inaccuracy in, any representation or warranty or any breach of, or failure to perform or comply with, any covenant or obligation, in or of this Agreement, or any event which with the passing of time or the giving of notice, or both, would constitute such a breach, inaccuracy or failure.

 

Asset Purchase Agreement between Netarx LLC and Analysts International Corporation

 

1



 

1.9.                               “Contemplated Transactions” — all of the transactions contemplated by this Agreement.

 

1.10.                         “Cost Basis” — as defined in Section 2.3.

 

1.11.                         “Customer Consents” — as defined in Section 2.1.4.

 

1.12.                         “Customer Contracts” — the customer agreements identified on Exhibit A, attached hereto and made a part hereof.

 

1.13.                         “Customer Credits” — amounts received by Seller prior to the Effective Date from customers of its VAR Business in excess of the balances owed to Seller by such customers.

 

1.14.                         “Deferred Revenues” — prepayments actually received by the Seller prior to July 4, 2009 for services to be rendered by Buyer after the Effective Date in respect of certain Customer Contracts, which equal $820,774.88, as the same are substantiated on Exhibit B2.

 

1.15.                         “Effective Date” — the date on which this Agreement is executed.

 

1.16.                         “Encumbrance” — lien, option, pledge, security interest, encumbrance, charge, agreement, restriction and claim of any kind whatsoever, whether legal or equitable, including, but not limited to, rights of first refusal or other similar restrictions on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

 

1.17.                         “Excluded Assets” — as defined in Section 4.1.

 

1.18.                         “GAAP” — Generally Accepted Accounting Principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of any date of determination.

 

1.19.                         “Liability” — with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of such Person.

 

1.20.                         “Material Adverse Effect” — means, with respect to any Person, any event, change in or effect that is or would:  (i) be materially adverse to the business, financial condition or results of operations of such Person and its Subsidiaries or the VAR Business, or (ii) prevent the ability of such Person to consummate the Contemplated Transactions or to perform its obligations hereunder; in each case, other than any such event, change or effect to the extent resulting from (1) any change,

 

2



 

development, circumstance, event or occurrence generally affecting the industries in which the Seller operates, provided the Seller is not disproportionately affected by such change, development, circumstance, event or occurrence, (2) any change in the economy or the financial or securities markets in general, provided the Seller is not disproportionately affected by such change, or political conditions in the United States or any acts of terrorism, military actions or war, (3) this Agreement or the transactions contemplated hereby, including the announcement or pendency thereof, (4) any fees expenses incurred in connection with the transactions contemplated by this Agreement, or (5) any change in any law or GAAP or the interpretation thereof.

 

1.21.                         “Material Breach” — any Breach that is important, substantial or significant.

 

1.22.                         “Note” — as defined in Section 5.2.2.

 

1.23.                         “Ordinary Course of Business” — an action taken by a Person will be deemed to have been taken in the Ordinary Course of Business only if that action;

 

1.23.1.                            Is consistent in nature, scope and magnitude with the past practices of such Person and is taken in the ordinary course of the normal, day-to-day operations of such Person;

 

1.23.2.                            Does not require authorization by the board of directors, shareholders or partners of such Person (or by any Person or group of Persons exercising similar authority) and does not require any other separate or special authorization of any nature; and

 

1.23.3.                            Is similar in nature, scope and magnitude to actions customarily taken, without any separate or special authorization, in the ordinary course of the normal, day-to-day operations of other Persons that are in the same line of business as such Person.

 

1.24.                         “Party” and “Parties” — Seller and Buyer are sometimes individually referred to herein as a Party or collectively referred to herein as the Parties.

 

1.25.                         “Permitted Encumbrances” — the Encumbrances identified on Exhibit E, if any.

 

1.26.                         “Person” — an individual, partnership, limited partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity.

 

1.27.                         “Purchase Price” — as defined in Section 5.1.

 

1.28.                         “Record” — information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

 

1.29.                         “Recruited Employee” — as defined in Section 13.1.

 

3



 

1.30.                         “Representative” — with respect to a particular Person, any director, officer, manager, employee, agent, consultant, advisor, accountant, financial advisor, legal counsel or other representative of that Person.

 

1.31.                         “Subleases” — as defined in Section 3.

 

1.32.                         “Tangible Personal Property” — as defined in Section 2.1.5.

 

1.33.                         “Third Party” — a Person that is not a Party to this Agreement.

 

1.34.                         “Transitional Services Agreement” — as defined in Section 15.1.

 

1.35.                         “VAR Business” — the business currently operated by Seller of providing the types of services generally required of Seller in connection with the Customer Contracts through use of the Acquired Assets delineated in Section 2.1 below.

 

2.                                        Sale and Transfer of Assets.

 

2.1.                               Upon the terms and subject to the conditions set forth in this Agreement, Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from Seller, free and clear of any Encumbrances other than Permitted Encumbrances, all of Seller’s worldwide right, title and interest in and to the following assets wherever they exist throughout the world (the “Acquired Assets”) (but excluding the Excluded Assets):

 

2.1.1.                      The VAR Business conducted by Seller as a going concern through use of the enumerated assets to be conveyed pursuant to this Agreement.  The VAR Business includes any and all goodwill associated with said business and the assets owned, licensed (to the extent transferable) or used by Seller in connection with the operation of said business, as the same are identified in the Exhibits to this Agreement.

 

2.1.2.                      To the extent transferable, all third party warranties directly associated with the VAR Business or the Acquired Assets.

 

2.1.3.                      To the extent permitted under applicable law or regulations, all licenses, permits and authorizations held by Seller relating to the VAR Business or the Acquired Assets, including but not limited to the licenses, permits and authorizations set forth on Exhibit J.

 

2.1.4.                      The Customer Contracts identified on Exhibit A hereto (subject to the receipt of any required consents to the assignment to Buyer (or its Affiliate, if applicable) of any such Customer Contracts; hereinafter, the “Customer Consents”).  Seller represents that the Customer Contracts listed on Exhibit A represent Seller’s best estimate of all of Seller’s contracts related to the VAR Business and Seller agrees that not later than sixty (60) days after execution of this Agreement, Seller will endeavor in good faith, working cooperatively with Buyer, to add any of Seller’s customer contracts related to the VAR Business that

 

4



 

were omitted in the preparation of Exhibit A to the list of contracts of the VAR Business to be included in the definition of Customer Contracts and the Acquired Assets conveyed to Buyer pursuant to this Agreement.  For the avoidance of doubt, Seller’s project # 145097 for the Novi Schools is not one of the contracts to be assigned to Buyer; Seller will perform that project and collect all revenues derived therefrom.

 

2.1.5.                      Subject to and on the terms set forth in Section 14 hereof, all right, title and interest in the furniture, fixtures, equipment, supplies and other fixed assets used in connection with the VAR Business operated out of Seller’s locations, as listed on Exhibit B attached hereto (the “Tangible Personal Property”).  Seller represents that the Tangible Personal Property listed on Exhibit B represents Seller’s best estimate of such assets used in the VAR Business and Seller agrees that not later than sixty (60) days after execution of this Agreement Seller will endeavor in good faith, working cooperatively with Buyer, to update Exhibit B to add any furniture, fixtures, equipment, supplies or other fixed assets omitted in the preparation of Exhibit B to the list of Tangible Personal Property to be included in the Acquired Assets conveyed to Buyer pursuant to this Agreement.

 

2.1.6.                      To the extent legally permissible under applicable laws or regulations (as such laws or regulations may be updated from time to time within a reasonable period of time after the Effective Date): the contents of VAR Business databases, lists of VAR Business customers and vendors, VAR Business sales and business records and advertising and promotional materials, VAR Business inventory, operating and production records and copies of the personnel records of VAR Business employees (including any updates that may occur after the Effective Date), the credit records of customers and vendors of the VAR Business, accounting, banking and financial records of the VAR Business (including any financial statements of the VAR Business), and similar assets, including, but not limited to, those provided to Buyer during its due diligence investigation of the VAR Business prior to the Effective Date.

 

2.1.7.                      The intellectual property and other intangible rights identified on Exhibit B1 attached hereto.  Seller represents that the intellectual property listed on Exhibit B1 represents Seller’s best estimate of such assets used in the VAR Business and Seller agrees that not later than sixty (60) days after execution of this Agreement, Seller will endeavor in good faith, working cooperatively with Buyer, to update Exhibit B1 to add any intellectual property or other intangible rights omitted in the preparation of Exhibit B1 to the list of intellectual property and other intangible rights to be included in the Acquired Assets conveyed to Buyer pursuant to this Agreement.

 

2.1.8.                      All salable and usable inventories relating to the VAR Business set forth in Exhibit B3.

 

2.1.9.                      Software, computer programs, source and object codes used in or

 

5



 

relating to the VAR Business or the Acquired Assets identified on Exhibit B4.  Seller represents that the software, etc. listed on Exhibit B4 represents Seller’s best estimate of such assets used in the VAR Business and Seller agrees that not later than sixty (60) days after execution of this Agreement, Seller will endeavor in good faith, working cooperatively with Buyer, to update Exhibit B4 to add any software, computer programs, source codes or object codes omitted in the preparation of Exhibit B4 to the list of intellectual property and other intangible rights to be included in the Acquired Assets conveyed to Buyer pursuant to this Agreement (to the fullest extent permitted under any applicable license agreement but subject to the limitations set forth in Exhibit B4).

 

2.1.10.                To the extent permissible under applicable law and pursuant to the terms of any such agreements, all rights to enforce any confidentiality agreements relating to the VAR Business.

 

2.2.                               Title and risk of loss with respect to the Acquired Assets and the Assumed Liabilities shall transfer to Buyer upon the Effective Date.

 

2.3.                               The Parties agree that the cost basis for work to be performed by Buyer after the Effective Date for which Seller has previously received Deferred Revenues is $568,290 (the “Cost Basis”).  Buyer agrees to absorb the Cost Basis for work involving such Deferred Revenues as part of its on-going operations of the Business, but Buyer will be entitled to reimbursement from Seller for costs incurred by Buyer in completing such work that are in excess of the Cost Basis (but not to exceed the aggregate amount of the Deferred Revenues).  For purposes of this Agreement the effective date of determining such Deferred Revenues will be the close of business on July 4, 2009; provided, however, that to the extent of any increase in Deferred Revenues between such date and the Effective Date, the parties shall negotiate in good faith to determine a cost-basis for work to be performed by Buyer after the Effective Date with respect to such incremental Deferred Revenues, and the Buyer shall be entitled to reimbursement from Seller for costs incurred by Buyer in completing such work within thirty (30) days of Buyer invoicing Seller for such costs.

 

3.                                        Sublease of Premises.

 

Promptly after execution hereof, the Seller and Buyer shall work together to cause subleases in substantially the form of Exhibit C attached hereto and made a part hereof (the “Subleases”) to be executed.  In the alternative, Buyer will enter into new lease agreements for the relevant premises directly with their respective landlords.

 

4.                                        Excluded Assets.

 

Notwithstanding anything to the contrary contained in Section 2 or elsewhere in this Agreement, no assets of Seller of any kind are part of the sale and purchase contemplated hereunder unless identified in Section 2 hereof.  All such assets are excluded from the Acquired Assets and shall remain the exclusive property of Seller after the Effective Date (the “Excluded Assets”).  For purposes of clarity, the term Excluded Assets also includes (a) any and all written

 

6



 

or oral contracts or agreements (other than the Customer Contracts); (b) any and all employment benefit or profit sharing plans; (c) Seller’s working capital; and (d) the accounts receivable and associated collections and payments for work-in-process prior to the Effective Date with respect to any aspect of the VAR Business.

 

5.                                        Consideration.

 

5.1.          The consideration for the Acquired Assets (the “Purchase Price”) will be Three Million Seven Hundred Fifty Thousand Dollars ($3,750,000.00) plus the Assumed Liabilities, as hereinafter set forth.  The portion of the Purchase Price payable by way of the Note is subject to certain vesting conditions as set forth in Exhibit N hereto.

 

5.2.          Contemporaneously with its execution of this Agreement, Buyer will deliver to Seller:

 

5.2.1.       The sum of Three Million Dollars ($3,000,000.00) by wire transfer of immediately available funds to accounts specified by Seller (subject to offset in the amount of $245,505.98, the agreed-upon balance of the Customer Credits as delineated in Exhibit B5); and

 

5.2.2.       A non-negotiable promissory note in the face value of up to Seven Hundred Fifty Thousand Dollars ($750,000.00), in the form set forth in Exhibit K attached hereto and made a part hereof (the “Note”).

 

6.                                        Assumed Liabilities.

 

Buyer shall not assume and shall not be liable for any debts, liabilities or obligations of Seller, regardless of the type or nature of such debts, liabilities and obligations, other than the following (the “Assumed Liabilities”):

 

6.1.          All Liabilities under the Customer Contracts of any kind arising from and after the Effective Date, only to the extent any such Liability is based on services or products provided by Buyer under the Customer Contracts subsequent to the Effective Date (including the agreed upon cost-basis for work related to any Deferred Revenue as contemplated by Section 2.4); and specifically excluding warranty obligations based on services provided by Seller under the Customer Contracts prior to the Effective Date.

 

6.2.          The Permitted Encumbrances listed on Exhibit D.

 

7.                                        Allocations.

 

Within thirty (30) days after the Effective Date, the Parties shall work together, cooperatively and in good faith, to prepare a Purchase Price allocation which, when completed and signed by both Parties, shall become Exhibit E to this Agreement.  After completion of said Exhibit E, the Parties shall make consistent use of the allocation, fair market value and useful lives specified in Exhibit E for all tax purposes and in all filings, declarations and reports with the IRS in respect thereof, including the reports required to be filed under Section 1060 of the Internal Revenue Code.  Buyer shall prepare and deliver IRS Form 8594 in draft form to Seller

 

7



 

within forty-five (45) days prior to the filing due date for such form, and shall thereafter promptly file such form with the IRS unless Seller has a reasonable objection to its contents.  In any action or proceeding related to the determination of any tax assessed based on, related to arising out of such allocation, neither Party shall contend or represent that such allocation is not a correct allocation.

 

8.                                        Deliverables.

 

8.1.          Buyer acknowledges receipt of the following from Seller:

 

8.1.1.       A bill of sale for the Tangible Personal Property in the form of Exhibit F executed by Seller;

 

8.1.2.       A certificate executed by Seller as to the accuracy of its representations and warranties as of the date of this Agreement and as to its compliance with and performance of its covenants and obligations to be performed or complied with at or before the Effective Date;

 

8.1.3.       Certified resolutions of the Seller approving the execution and delivery of this Agreement and the consummation of the Contemplated Transactions;

 

8.1.4.       For each former employee of Seller to be employed by Buyer, the waivers required by Section 13.2 in the form of Exhibit G.

 

8.2.          Seller acknowledges receipt of the following from Buyer:

 

8.2.1.       The Purchase Price; and

 

8.2.2.       A certificate executed by Buyer as to the accuracy of its representations and warranties as of the date of this Agreement and as to its compliance with and performance of its covenants and obligations to be performed or complied with at or before the Effective Date.

 

9.                                        Limited Scope.

 

Except as otherwise expressly set forth in this Agreement, the Contemplated Transactions shall be without any express, implied, statutory or other warranty or representation as to the condition, quantity, quality, fitness for particular purpose, conformity to models or samples of materials or merchantability of any of the assets conveyed hereunder, their fitness for any purpose, and without any other express, implied, statutory or other warranty or representation whatsoever.

 

10.                                  Representations and Warranties of Seller.

 

Except as set forth in one of the exhibits to this Agreement, Seller represents and warrants to Buyer as follows:

 

8



 

10.1.        Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota and is duly qualified to conduct business in each jurisdiction in which the ownership of the Acquired Assets requires such qualification or where the failure to be so qualified would not have a Material Adverse Effect on Seller’s ownership or ability to transfer the Acquired Assets.

 

10.2.        Seller has the full corporate power and authority to enter into and perform its respective obligations under this Agreement without the consent or approval of any other person, entity or governmental agency.

 

10.3.        The execution, delivery and performance of this Agreement and each of the other ancillary transaction documents and the consummation of the Contemplated Transactions have been duly authorized by all necessary corporate action of Seller.  This Agreement and the other transaction documents have been duly executed and delivered by Seller, and are the valid and binding obligations of Seller in accordance with their respective terms, subject as to enforceability by applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws or equitable principles now or hereafter in effect relating to or affecting the rights of creditors generally.

 

10.4.        No Conflict .  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not (a) conflict with, result in a material breach of any provision of, constitute a material default under, result in the material modification or cancellation of, or give rise to any right of termination or acceleration in respect of, any contract, agreement, commitment, understanding, arrangement or restriction of any kind to which Seller is a party or to which Seller or any of its interest in any of the Acquired Assets are subject; (b) result in the creation of any Encumbrances upon, or any person obtaining the right to acquire, any of the Acquired Assets; (c) violate or conflict with any law, ordinance, code, rule, regulation, decree, order or ruling of any court, arbitral body or governmental authority, to which Seller or any of its interest in any of the Acquired Assets are subject; or (d) require any authorization, consent, order, permit or approval of, or notice to, or filing, registration or qualification with, any governmental, administrative or judicial authority or any other person or entity, other than as herein set forth with respect to Customer Contracts for which consents will be sought after the Effective Date.

 

10.5.        Compliance with Law .  As relates to the VAR Business, Seller is in material compliance, and has materially complied, with all applicable laws and has not received any notice of any violation of any such laws.  To Seller’s knowledge, Seller has not been subject to any investigations or reviews with respect to the VAR Business and, to Seller’s knowledge, no basis exists for any such review or investigation.  Seller has all material licenses, permits, approvals and other authorizations, and have made all necessary filings and registrations, which are necessary in order to conduct its VAR Business.  All such licenses permits, approvals and other authorizations are in full force and effect and no violations are outstanding or, to Seller’s knowledge, have been incurred with respect to such licenses, permits, approvals and other authorizations.

 

9



 

10.6.        Taxes.   Seller has paid all taxes, and filed all tax returns required to be filed by it in relation to the VAR Business including, but not limited to personal property tax, sales tax, federal and state income tax and withholding and employment tax.  There is no claim or assessment pending or, to Seller’s knowledge, threatened against Seller for any alleged deficiency in taxes and Seller has not received any notice of any audit or investigation with respect to any liability of Seller for taxes.

 

10.7.        Title.   Seller owns the Acquired Assets free and clear of all Encumbrances and Seller is exclusively entitled to possess and dispose of any interest in the Acquired Assets to Buyer.

 

10.8.        Litigation.  There is no Action (defined below) pending, or, to Seller’s knowledge, threatened against Seller involving the VAR Business or that otherwise  may have the effect of preventing, delaying, making illegal or otherwise or interfering Seller’s performance of its obligations under this Agreement and, to the knowledge of Seller, no basis exists for any such Action.  There are no existing or, to Seller’s knowledge, threatened orders, judgments or decrees of any court or other authority applicable to the VAR Business.  For the purposes of this Agreement, “Action” means any audit, action, suit, arbitration, inquiry, hearing, proceeding or investigation by or before any court of competent jurisdiction, governmental or other regulatory or administrative agency or commission or arbitral panel.

 

10.9.        Intangibles and Intellectual Property.   Seller has the complete and unrestricted right to use and own and has the exclusive right to convey or assign all of its owned Intangibles and Intellectual Property.  To the knowledge of Seller, there has been no infringement, misappropriation or misuse of any of Seller’s Intangibles and Intellectual Property or any other proprietary information related to the VAR Business.  Seller has not infringed on, misappropriated or misused any third party’s intellectual property or trade secrets.

 

10.10.      Customer Contracts.   Seller has complied in all material respects with the provisions of each of the Customer Contracts and Seller is not in default under any such Customer Contracts, and, to the knowledge of Seller, no other party to any of the Customer Contracts has failed to comply in any material respect with, or is in default under, the provisions of such Customer Contract.  Subject to the requirement to obtain Customer Consents,


 
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