ASSET PURCHASE AGREEMENT

 

TABLE OF CONTENTS

 

ARTICLE 1	SALE OF ASSETS AND CLOSING		1
	Section 1.1	Assets Transferred	1
	Section 1.2	Excluded Assets	3
	Section 1.3	Liabilities	3
	Section 1.4	Payment Terms; Allocation	4
	Section 1.5	Closing	6
	Section 1.6	Prorations	7
	Section 1.7	Transition Period	7
	Section 1.8	Further Assurances; Post-Closing Cooperation	7
	Section 1.9	Third-Party Consents	8
ARTICLE 2	REPRESENTATIONS AND WARRANTIES OF SELLER		9
	Section 2.1	Corporate Existence of Seller	9
	Section 2.2	Authority	9
	Section 2.3	No Conflicts	9
	Section 2.4	Governmental Approvals and Filings	10
	Section 2.5	Legal Proceedings	10
	Section 2.6	Compliance With Laws and Orders	10
	Section 2.7	Tangible Personal Property	10
	Section 2.8	Intellectual Property Rights	11
	Section 2.9	Contracts	11
	Section 2.10	Brokers	12
ARTICLE 3	REPRESENTATIONS AND WARRANTIES OF PURCHASER		12
	Section 3.1	Corporate Existence	12
	Section 3.2	Authority	12
	Section 3.3	No Conflicts	12
	Section 3.4	Governmental Approvals and Filings	13
	Section 3.5	Legal Proceedings	13
	Section 3.6	Brokers	13
ARTICLE 4	COVENANTS OF SELLER		13
	Section 4.1	Regulatory and Other Approvals	13
	Section 4.2	Delivery of Assets, Books, and Records	14
	Section 4.3	Use of Intellectual Property	14
	Section 4.4	Non-Solicitation	14
ARTICLE 5	COVENANTS OF PURCHASER		14
	Section 5.1	Regulatory and Other Approvals	14
	Section 5.2	Fulfillment of Conditions	15
	Section 5.3	Discontinuance of LIME Mark	15
	Section 5.4	Preferred Vendor	15
	Section 5.5	Purchaser Reports	15
	Section 5.6	Late Payments	15
	Section 5.7	Inspection and Audit Rights	16

 

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ARTICLE 6	CONDITIONS TO OBLIGATIONS OF PURCHASER		16
	Section 6.1	Representations and Warranties	16
	Section 6.2	Performance	16
	Section 6.3	Officers’ Certificates	16
	Section 6.4	Orders and Laws	17
	Section 6.5	Regulatory Consents and Approvals	17
	Section 6.6	Third Party Consents	17
	Section 6.7	Deliveries	17
ARTICLE 7	CONDITIONS TO OBLIGATIONS OF SELLER		17
	Section 7.1	Representations and Warranties	17
	Section 7.2	Performance	17
	Section 7.3	Officers’ Certificates	17
	Section 7.4	Orders and Laws	17
	Section 7.5	Regulatory Consents and Approvals	17
	Section 7.6	Third Party Consents	18
	Section 7.7	Deliveries	18
ARTICLE 8	SURVIVAL; NO OTHER REPRESENTATIONS		18
	Section 8.1	Survival of Representations, Warranties	18
	Section 8.2	No Other Representations	18
ARTICLE 9	INDEMNIFICATION		18
	Section 9.1	Indemnification	18
	Section 9.2	Exclusivity	20
ARTICLE 10	DEFINITIONS		20
	Section 10.1	Definitions	20
ARTICLE 11	MISCELLANEOUS		24
	Section 11.1	Notices	24
	Section 11.2	Bulk Sales Act	25
	Section 11.3	Entire Agreement	25
	Section 11.4	Expenses	25
	Section 11.5	Public Announcements	25
	Section 11.6	[Intentionally omitted]	25
	Section 11.7	Waiver	26
	Section 11.8	Amendment	26
	Section 11.9	No Third Party Beneficiary	26
	Section 11.10	No Assignment; Binding Effect	26
	Section 11.11	Headings	26
	Section 11.12	Invalid Provisions	26
	Section 11.13	Governing Law and Arbitration	26
	Section 11.14	Counterparts	27

 

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EXHIBITS

 

Exhibit A	General Assignment and Bill of Sale
Exhibit B	Assumption Agreement
Exhibit C	Officer’s Certificate of Seller
Exhibit D	Secretary’s Certificate of Seller
Exhibit E	Officer’s Certificate of Purchaser
Exhibit F	Secretary’s Certificate of Purchaser
Exhibit G	Sales Transition Plan
Exhibit H	Press Release

 

 

This ASSET PURCHASE AGREEMENT dated as of August 10, 2009, is made and entered into by and between ELUTIONS, INC., a Delaware corporation (“Purchaser”), and MAXIMUM PERFORMANCE GROUP, INC., a Delaware corporation (“Seller”).  Capitalized terms not otherwise defined herein have the meanings set forth in Section 10.1 .

 

RECITALS

 

A.             Seller is engaged in the business of providing energy and asset management products and services marketed under its Energy Management and Control (“eMAC”) system of controllers for heating, ventilation and air-conditioning applications and its uMAC system for lighting applications, (the “Business”).

 

B.             Seller desires to sell, transfer and assign to Purchaser, and Purchaser desires to purchase and acquire from Seller, substantially all of the assets of Seller relating to the operation of the Business, and in connection therewith, Purchaser has agreed to assume certain of the liabilities of Seller relating to the Business, all on the terms set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE 1             SALE OF ASSETS AND CLOSING

 

Section 1.1              Assets Transferred .  On the terms and subject to the conditions set forth in this Agreement, Seller will sell, transfer, convey, assign and deliver to Purchaser, and Purchaser will purchase, at the Closing, all of Seller’s right, title and interest in, to and under the following assets and properties of Seller used or held for use in connection with the Business, except as otherwise provided in Section 1.2 , as the same shall exist on the Closing Date (collectively, the “Assets”):

 

(a)            Accounts Receivable .  All trade accounts receivables and all notes, invoices, and other evidences of Indebtedness of and rights to receive payments arising out of sales occurring in the conduct of the Business and the Security Agreements related thereto, as of the Closing Date, including any rights of Seller with respect to any third party collection procedures or any other Actions or Proceedings which have been commenced in connection therewith as listed in Section 1.1(a)  of the Disclosure Schedule (the “Accounts Receivable”);

 

(b)            Inventory .  All inventories of raw materials, work-in-process, finished goods, products under research and development, demonstration equipment, office and other supplies, parts, packaging materials and other accessories related thereto as listed in Section 1.1(b)  of the Disclosure Schedule, which are held at, or are in transit from or to, the locations at which the Business is conducted, in each case, which are used or held for use by Seller solely in the conduct of the Business, including any of the foregoing purchased subject to any conditional sales or title retention agreement in favor of any other Person, together with all rights of Seller against suppliers of such inventories (the “Inventory”);

 

(c)            Tangible Personal Property .  All servers, software and monitors used solely in the conduct of the Business at the locations at which the Business is conducted or otherwise used by Seller solely in the conduct of the Business (including but not limited to the

 

 

items listed in Section 1.1(c)  of the Disclosure Schedule), including any of the foregoing purchased subject to any title retention agreement in favor of any other Person (the “Tangible Personal Property”);

 

(d)            Business Contracts .  Subject to Section 1.6 for prepaid expenses, all Contracts (other than the Personal Property Leases and the Accounts Receivable) to which Seller is a party and which are utilized solely in the conduct of the Business, including without limitation Contracts relating to suppliers, sales representatives, distributors, purchase orders, marketing arrangements and manufacturing arrangements (the “Business Contracts”);

 

(e)            Intellectual Property .  All Intellectual Property, including pending patents, trademarks, service marks, or copyrights, if any, used solely in the conduct of the Business (including Seller’s goodwill therein) and listed in Section 1.1(e)  of the Disclosure Schedule (the “Intellectual Property”);

 

(f)             Customer Records and Agreements .  Seller customer lists, customer information, sales activity records customer orders, all customer agreements, including but not limited to product purchases, maintenance and monitoring agreements, product warranties and records of returned product, customer support, and other customer records for the period January 1, 2006, through the Closing Date, used or relating solely in the Business or otherwise relating solely to the Assets, other than the Excluded Books and Records (the “Customer Records”); provided that nothing herein shall preclude Lime Energy Co., parent of Seller, from marketing to or doing business with, at any time, any and all past, present and future customers of Seller.

 

To the extent any of the Customer Records are items susceptible to duplication and are either (x) used in connection with any of Seller’s businesses other than the Business or (y) are required by Law to be retained by Seller, Seller may deliver photostatic copies or other reproductions from which, in the case of Customer Records referred to in clause (x), information solely concerning Seller’s businesses other than the Business has been deleted.

 

(g)            Litigation Claims .  Any rights (including indemnification) and claims and recoveries under litigation of Seller against third parties relating solely to the Assets and arising out of or relating to events prior to the Closing Date; provided that this Section 1.1(g)  does not apply to claim of any type whatsoever from or against any directors, officers, employees, representatives, agents or Affiliates of the Seller or Lime Energy Co., respectively;

 

(h)            Sales and Marketing Materials .  All sales and marketing materials and collateral, in all forms, both hard copies and electronic versions relating solely to the Business;

 

(i)             Technical Product Materials .  All technical materials required to build, modify, and operate the eMAC and uMAC systems, related software, and firmware, including, but not limited to, all hardware technical drawings and specifications, Gerber drawings, bills of materials, executable software code, documentation, source files, libraries and development environments.

 

 

(j)             Hosted Server Software .  All software, third party software licenses, executable software code, documentation, source files, libraries and development environments related solely to the hosted software application and the servers, in each case constituting Tangible Personal Property.

 

Section 1.2              Excluded Assets .  Notwithstanding anything in this Agreement to the contrary, the following Assets and Properties of Seller (the “Excluded Assets”) shall be excluded from and shall not constitute Assets:

 

(a)            Cash .  Cash (including checks received prior to the close of business on the Closing Date, whether or not deposited or cleared prior to the close of business on the Closing Date), commercial paper, certificates of deposit and other bank deposits, treasury bills and other cash equivalents;

 

(b)            Insurance .  Life insurance policies of officers and other employees of Seller and all other insurance policies relating to the operation of the Business;

 

(c)            Employee Benefit Plans .  All assets owned or held by any Benefit Plans;

 

(d)            Tax Refunds .  All refunds or credits, if any, of Taxes due to or from Seller which cannot be assigned by Law;

 

(e)            Real and Personal Property .  The real or personal property described in Section 1.2(e)  of the Disclosure Schedule;

 

(f)             Excluded Books and Records .  Except for the Customer Records, all other books and records of Seller including, without limitation, the minute books and stock transfer books, the financial statements, tax returns, and computer files (the “Excluded Books and Records”);

 

(g)            Excluded Obligations .  The rights of Seller in, to and under all Contracts of any nature, the obligations of Seller under which expressly are not assumed by Purchaser pursuant to Section 1.3 ;

 

(h)            Trade Name and Logo .  All of Seller’s right, title and interest in, to and under the name and trademark “Lime Energy” and the Lime Energy logo; and

 

(i)             Seller’s Rights .  Seller’s rights under this Agreement and the Operative Agreements.

 

Section 1.3              Liabilities .

 

(a)            Assumed Liabilities .  In connection with the sale, transfer, conveyance, assignment and delivery of the Assets pursuant to this Agreement, on the terms and subject to the conditions set forth in this Agreement, at the Closing, Purchaser will assume and agree to pay, perform and discharge when due the following obligations of Seller arising in connection with the operation of the Business, as the same shall exist on the Closing Date (the “Assumed Liabilities”), and no others:

 

 

(i)             Obligations under Contracts and Licenses .  All obligations of Seller under the Business Contracts arising and to be performed on or after the Closing Date, and excluding any such obligations arising or to be performed prior to the Closing Date;

 

(ii)            Returned Goods .  All obligations of Seller with respect to Seller’s product warranties for replacement of, or refund for, damaged, defective or returned products, to the extent such products are subject to outstanding warranties;

 

(iii)           Service and Monitoring Contracts .  All obligations of Seller for maintenance, servicing and monitoring eMAC controllers and systems installed on or prior to the Closing Date for the customers and sites listed in Section 1.3(a)(iii)  of the Disclosure Schedule;

 

(iv)           Accrued Expenses .  All obligations of Seller with respect to the customer deposit, as more specifically listed in Section 1.3(a)(iv)  of the Disclosure Schedule; provided that if such customer demands a refund of its deposit prior to depletion of such deposit applied to services rendered by Purchaser, Seller shall be responsible for refund of such deposit as adjusted for depletion for services rendered by Purchaser.  Upon request, Purchaser agrees to provide Seller with records of services rendered to such customer; and

 

(v)            Product Liabilities .  All liabilities arising out of claims of third parties for damage or injury suffered as the result of defective products sold by Seller prior to the Closing Date where the occurrence giving rise to any such claim takes place on or after the Closing Date.

 

(b)            Retained Liabilities .  Except for the Assumed Liabilities, Purchaser shall not assume by virtue of this Agreement or the transactions contemplated hereby, and shall have no liability for, any Liabilities of Seller of any kind, character or description whatsoever (the “Retained Liabilities”).  Seller shall discharge in a timely manner or shall make adequate provision for all of the Retained Liabilities, provided that Seller shall have the ability to contest, in good faith, any such claim of liability asserted in respect thereof by any Person other than Purchaser and its Affiliates.

 

Section 1.4              Payment Terms; Allocation .

 

(a)            Closing Payment. On the Closing Date, Purchaser shall pay to Seller in immediately available funds by wire transfer the sum of Twenty-Five Thousand Dollars ($25,000.00) (“Closing Payment”).

 

(b)            Post-Closing Payment .  On November 9, 2009, Purchaser also shall pay to Seller in immediately available funds by wire transfer the sum of Fifty Thousand Dollars ($50,000.00), subject to offset up to a maximum of such $50,000, for any shortages in Inventory actually delivered by Seller as compared to the Inventory listed in Section 1.1((b)  of the Disclosure Schedule, provided that any such shortage shall be reported by Purchaser within thirty (30) days following delivery by Seller.  The amount to be offset, if any, shall be calculated based upon the price per unit, part or system, as applicable, set forth in Section 1.1(b)  of the Disclosure Schedule and all documents referenced therein.

 

 

(c)            Payment Terms .  Purchaser also will pay to Seller in immediately available funds by wire transfer, or such other method as mutually agreed, the amounts earned by Seller for a period of forty-eight (48) full months from the Closing Date (such 48 months, the “Earn-out Period”) as described below:

 

(i)             Purchaser shall be responsible for collecting the outstanding Accounts Receivable, as specifically set forth in Section 1.1(a)  of the Disclosure Schedule.  Purchaser shall remit ten percent (10%) of all amounts collected of the Accounts Receivable to Seller within ten (10) days of collection, less any actual out-of-pocket costs of collection related thereto.

 

(ii)            Purchaser shall pay Seller the following payouts (“Payout(s)”): (x) five percent (5%) of the sale price of the Inventory (sold by Seller under this Agreement) as it is sold until such Inventory is depleted, and (y) an additional ten percent (10%) of the following (in addition to the Payout in clause (x), if applicable,  but without duplication among clauses (A) through (D) below):  (A) the gross sale price of, and all software license fees, without offset collected from the sale of, the eMAC or uMAC controllers (other than the sale of the Inventory pursuant to clause (x) above), (B) the gross sale price of eMAC or uMAC systems excluding from such sale price the price of any Purchaser hardware or software that may be utilized to supplement or expand such systems beyond the systems marketed in the Business of the Seller as of the Closing Date, (C) all fees derived from monitoring and maintenance contracts or services related to eMAC systems or uMAC systems, or the controllers therein and (D) all fees from other services performed by Purchaser or its Affiliates relating to eMAC or uMAC systems including repairs and replacements, in each case as to clauses (A) through (D) above, whether in the ordinary course of business, upon the sale of Purchaser’s assets or otherwise, and including any similar or derivative fees or revenue however characterized (all sources of sales proceeds, fees and other revenue upon which Payouts will be computed and made under this clause (y), collectively, the “eMAC System Sales and Monitoring Revenue”), and Purchaser shall remit to Seller such Payouts within ten (10) days of receipt, directly or indirectly, of any such sales proceeds or fees however characterized.

 

(iii)           Purchaser’s obligation to make any Payout under Section 1.4(c)(ii)  for sales of Inventory and eMAC System Sales and Monitoring Revenue over the Earn-Out Period shall terminate upon receipt by Seller from Purchaser of an aggregate Four Million Dollars ($4,000,000.00) in Payouts and payments actually made to Seller pursuant to Section 5.4 below.

 

(iv)           Purchaser shall have no obligation to make any Payout with respect to the amount of the customer deposit listed on Section 1.3(a)(iv)  of the Disclosure Schedule.

 

(v)            During the Earn-out Period, for each 12-month period commencing August 10 th  through the following August 9 th , with the first 12-month period running August 10, 2009 through August 9, 2010  (each such 12-month period, the “Yearly Period”), the amount of Payouts to which the Seller shall be entitled during a Yearly Period shall be subject to the following:

 

(A)     If during a Yearly Period, the aggregate amount of sales of Inventory,  eMAC System Sales and Monitoring Revenue and Other Revenue (ass

 

 

defined in Section 5.4 below shall be $1,000,000 or less, then no Payout for such Yearly Period shall be due by Purchaser to Seller;

 

(B)     If during a Yearly Period, the aggregate amount of sales of Inventory , eMAC System Sales and Monitoring Revenue and Other Revenue shall be more than $1,000,000 but less than $1.5 million, Purchaser shall be obligated to pay Seller fifty percent (50%) of the Payout amount earned by Seller for such Yearly Period; and

 

(C)     If during a Yearly Period, the aggregate amount of sales of Inventory,  eMAC System Sales and Monitoring Revenue and Other Revenue shall be more than $1.5 million, Purchaser shall be obligated to pay Seller one hundred percent (100%) of the Payout amount earned by Seller for such Yearly Period.

 

(vi)           Semi-annual reconciliations for underpayments or overpayments made by Purchaser shall be made by written report from the Purchaser to the Seller to take into effect the revenue thresholds described in subclause (v) above.

 

(d)            Allocation . Purchaser and Seller shall negotiate in good faith prior to the Closing Date and determine the allocation of the consideration paid by Purchaser for the Assets.  Each party hereto agrees (i) that any such allocation shall be consistent with the requirements of Section 1060 of the Code and the regulations thereunder, (ii) to complete jointly and to file separately Form 8594 with its Federal Income Tax Return consistent with such allocation for the tax year in which the Closing Date occurs and (iii) that no party will take a position on any income, transfer or gains Tax Return, before any Governmental or Regulatory Authority charged with the collection of any such Tax or in any judicial proceeding, that is in any manner inconsistent with the terms of any such allocation without the consent of the other party.

 

Section 1.5              Closing .  The Closing will take place at the offices of William Blair & Company in Chicago, Illinois on August 10, 2009, or at such other place as Purchaser and Seller mutually agree, at 10:00 a.m. local time, on the Closing Date.  Simultaneously, (a) Seller will assign and transfer to Purchaser all of its right, title and interest in and to the Assets (free and clear of all Liens, other than Permitted Liens) by delivery of (i) a General Assignment and Bill of Sale substantially in the form of Exhibit A hereto (the “General Assignment”), duly executed by Seller, (ii) an assignment of the Intellectual Property in form and substance reasonably satisfactory to Purchaser, and (iii) such other good and sufficient instruments of conveyance, assignment and transfer, in form and substance reasonably acceptable to Purchaser’s counsel, as shall be effective to vest in Purchaser good title to the Assets (the General Assignment and the other instruments referred to in clauses (ii) and (iii) being collectively referred to herein as the “Assignment Instruments”), and (b) Purchaser will assume from Seller the due payment, performance and discharge of the Assumed Liabilities by delivery of (i) an Assumption Agreement substantially in the form of Exhibit B hereto (the “Assumption Agreement”), duly executed by Purchaser, and (ii) such other good and sufficient instruments of assumption, in form and substance reasonably acceptable to Seller’s counsel, as shall be effective to cause Purchaser to assume the Assumed Liabilities as and to the extent provided in Section 1.3(a)  (the Assumption Agreement and such other instruments referred to in clause (ii) being collectively referred to herein as the “Assumption Instruments”).  At the Closing, there shall also be delivered

 

 

to Seller and Purchaser the certificates and other contracts, documents and instruments required to be delivered under Articles 6 and 7 .

 

Section 1.6              Prorations .  The following prorations relating to the Assets and the ownership and operation of the Business will be made as of the Closing Date, with Seller liable to the extent such items relate to any time period prior to the Closing Date and Purchaser liable to the extent such items relate to periods beginning with and subsequent to the Closing Date:

 

(a)            All prepaid expenses relating to the Business including, but not limited to, the items listed in Section 1.6(a)  of the Disclosure Schedule (the “Prepaid Expenses”).

 

(b)            All other items (excluding personal property taxes and other Taxes) normally adjusted in connection with similar transactions

 

Except as otherwise agreed by the parties, the net amount of all such prorations will be settled and paid on the Closing .

 

Section 1.7              Transition Period .

 

(a)            Following the Closing and for a period or thirty (30) days, unless otherwise designated herein (“Transition Period”), Seller will effect the transfer of the following:  (i) records related to the Accounts Receivable within five (5) days after Closing, (ii) Inventory packaged and shipped to Purchaser at its Tampa, Florida headquarters within ten (10) days after Closing, (iii) customer records will be made available to Purchaser within ten (10) days after Closing, (iv) for Employees, such records as Seller is permitted under applicable law to copy and transfer to Purchaser, within five (5) days after Closing, provided that if Purchaser elects not to hire any such Employee, Purchaser shall return promptly to Seller all such Employee’s records and copies thereof made by Purchaser, and (v) such other Transition Services as provided in Exhibit G — Sales Transition Plan.  Should the Transition Plan not be completed during the foregoing Transition Period, the Parties agree to extend the Transition Period for an additional thirty (30) days or such shorter period as reasonably necessary to complete all transition activities.

 

(b)            Seller will continue to provide hosting services for customers during the Transition Period, and assist Purchaser in moving customers to Purchaser’s hosting environment.  Should that process extend beyond the Transition Period, Seller and Purchaser will negotiate a reasonable services fee to be paid to Seller to continue hosting the service for up to an additional thirty (30) days.

 

Section 1.8              Further Assurances; Post-Closing Cooperation .

 

(a)            Subject to the terms and conditions of this Agreement, at any time or from time to time after the Closing, at Purchaser’s request and without further consideration, Seller shall execute and deliver to Purchaser such other instruments of sale, transfer, conveyance, assignment and confirmation, provide such materials and information and take such other actions as Purchaser may reasonably deem necessary in order more effectively to transfer, convey and assign to Purchaser, and to confirm Purchaser’s title to, all of the Assets, and, to the full extent permitted by Law, to put Purchaser in actual possession and operating control of the Business and the Assets and to assist Purchaser in exercising all rights with respect thereto, and

 

 

otherwise to cause Seller to fulfill its obligations under this Agreement and the Operative Agreements.

 

(b)            Following the Closing, each party will afford the other party, its counsel and its accountants, during normal business hours, reasonable access to the books, records and other data relating to the Business in its possession with respect to periods prior to the Closing and the right to make copies and extracts therefrom, to the extent that such access may be reasonably required by the requesting party in connection with (i) the preparation of Tax Returns, (ii) the determination or enforcement of rights and obligations under this Agreement or any Operative Agreement or (iv) in connection with any actual or threatened Action or Proceeding.  Further each party agrees for a period extending three (3) years after the Closing Date not to destroy or otherwise dispose of any such books, records and other data unless such party shall first offer in writing to surrender such books, records and other data to the other party and such other party shall not agree in writing to take possession thereof during the ten (10) day period after such offer is made.

 

(c)            On or before August 17, 2009, Purchaser will determine which of Seller’s Employees that it does not wish to retain (collectively, “Designated Employees”).  Seller shall have no obligation to retain any Designated Employees, beyond August 17, 2009, or such earlier date as a Designated Employee may be identified by Purchaser. With respect to Employees of Seller who are not Designated Employees (collectively, “Post-Closing Seller Employees”), Seller will continue to provide employment, salary and benefits for each Post-Closing Seller Employee, until September 9, 2009, or such earlier date as Purchaser may hire such Post-Closing Seller Employee.  If a Post-Closing Seller Employee shall be hired by Purchaser, thereafter Purchaser shall be responsible for all employment, salary and benefits to such Post-Closing Seller Employee.  For clarification, Seller shall have no obligation to retain any of its Employees beyond September 9, 2009.

 

(d)            If, in order properly to prepare its Tax Returns, other documents or reports required to be filed with Governmental or Regulatory Authorities or its financial statements or to fulfill its obligations hereunder, it is necessary that a party be furnished with additional information, documents or records relating to the Business not referred to in paragraph (b) above, and such information, documents or records are in the possession or control of the other party, such other party shall use its commercially reasonable efforts to furnish or make available such information, documents or records (or copies thereof) at the recipient’s request, cost and expense.  Any information obtained by such party in accordance with this paragraph shall be held confidential by such party in accordance with the Confidentiality Agreement.

 

(e)            Notwithstanding anything to the contrary contained in this Section, if the parties are in an adversarial relationship in litigation or arbitration, the furnishing of information, documents or records in accordance paragraph (c) of this Section shall be subject to applicable rules relating to discovery.

 

Section 1.9              Third-Party Consents .  To the extent that any Business Contract 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 or a default thereunder.  Seller and Purchaser shall use commercially reasonable efforts to obtain the consent of such other party to the assignment of

 

 

any such Business Contract to Purchaser in all cases in which such consent is or may be required for such assignment.  If any such consent shall not be obtained, Seller shall cooperate with Purchaser in any reasonable arrangement designed to provide for Purchaser the benefits intended to be assigned to Purchaser under the relevant Business Contract, including enforcement at the cost and for the account of Purchaser of any and all rights of Seller against the other party thereto arising out of the breach or cancellation thereof by such other party or otherwise.

 

ARTICLE 2             REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller hereby represents and warrants to Purchaser as follows:

 

Section 2.1              Corporate Existence of Seller .  Seller is a corporation validly existing and in good standing under the Laws of the State of Delaware, and has full corporate power and authority to conduct the Business as and to the extent now conducted and to own, use and lease the Assets.

 

Section 2.2              Authority .  Seller has full corporate power and authority to execute and deliver this Agreement and the Operative Agreements to which it is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby, including without limitation to sell and transfer (pursuant to this Agreement) the Assets.  The execution and delivery by Seller of this Agreement and the Operative Agreements to which it is a party, and the performance by Seller of its obligations hereunder and thereunder, have been duly and validly authorized by the Board of Directors of Seller, no other corporate action on the part of Seller or its stockholders being necessary.  This Agreement has been duly and validly executed and delivered by Seller and constitutes, and upon the execution and delivery by Seller of the Operative Agreements to which it is a party, such Operative Agreements will constitute, legal, valid and binding obligations of Seller enforceable against Seller in accordance with their terms.

 

Section 2.3              No Conflicts .  The execution and delivery by Seller of this Agreement do not, and the execution and delivery by Seller of the Operative Agreements to which it is a party, the performance by Seller of its obligations under this Agreement and such Operative Agreements and the consummation of the transactions contemplated hereby and thereby will not:

 

(a)            conflict with or result in a violation or breach of any of the terms, conditions or provisions of the certificate of incorporation or by-laws of Seller;

 

(b)            subject to obtaining the consents, approvals and actions, making the filings and giving the notices disclosed in Section 2.4 of the Disclosure Schedule, conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to Seller or any of its Assets and Properties (other than such conflicts, violations or breaches (i) which could not in the aggregate reasonably be expected to adversely affect the validity or enforceability of this Agreement or any of such Operative Agreements or to have a material adverse effect on the Condition of the Business or (ii) as would occur solely as a result of the legal or regulatory status of Purchaser or any of its Affiliates); or

 

 

(c)            except as disclosed in Section 2.3 of the Disclosure Schedule or as could not, individually or in the aggregate, reasonably be expected to be materially adverse to the Condition of the Business or to adversely affect the ability of Seller to consummate the transactions contemplated hereby or by any such Operative Agreements or to perform its obligations hereunder or thereunder, (i) conflict with or result in a violation or breach of, (ii) constitute (with or without notice or lapse of time or both) a default under, (iii) require Seller to obtain any consent, approval or action of, make any filing with or give any notice to any Person as a result or under the terms of, or (iv) result in the creation or imposition of any Lien upon Seller or any of its Assets or Properties under, any Contract or License to which Seller is a party or by which any of its Assets and Properties is bound.

 

Section 2.4              Governmental Approvals and Filings .  Except as disclosed in Section 2.4 of the Disclosure Schedule, no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority on the part of Seller is required in connection with the execution, delivery and performance of this Agreement or any of the Operative Agreements to which it is a party or the consummation of the transactions contemplated hereby or thereby, except (i) where the failure to obtain any such consent, approval or action, to make any such filing or to give any such notice could not reasonably be expected to adversely affect the ability of Seller to consummate the transactions contemplated by this Agreement or any of such Operative Agreements or to perform its obligations hereunder or thereunder, or to have a material adverse effect on the Condition of the Business, and (ii) those as would be required solely as a result of the identity or the legal or regulatory status of Purchaser or any of its Affiliates.

 

Section 2.5              Legal Proceedings .  Except as disclosed in Section 2.5 of the Disclosure Schedule:

 

(a)            there are no Actions or Proceedings pending or, to the Knowledge of Seller, threatened against, relating to or affecting Seller with respect to the Business or any of its Assets and Properties which could reasonably be expected (i) to result in the issuance of an Order restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement or any of the Operative Agreements, or (ii) individually or in the aggregate with other such Actions or Proceedings, to have a material adverse effect on the Condition of the Business; and

 

(b)            there are no Orders outstanding against Seller which, individually or in the aggregate with other such Orders, materially adversely affect the Condition of the Business.

 

Section 2.6              Compliance With Laws and Orders .  Except as disclosed in Section 2.6 of the Disclosure Schedule, Seller is not in violation of or in default under any Law or Order applicable to the Business or the Assets the effect of which, individually or in the aggregate with other such violations and defaults, could reasonably be expected to be materially adverse to the Condition of the Business.

 

Section 2.7              Tangible Personal Property .  Seller is in possession of and has good title to, or has valid leasehold interests in or valid rights under Contract to use, all the Tangible Personal Property used in and individually or in the aggregate with other such property material to the Condition of the Business.  All the Tangible Personal Property is free and clear of all Liens, other

 

 

than Permitted Liens and Liens disclosed in Section 2.7 of the Disclosure Schedule, and is in all material respects in good working order and condition, ordinary wear and tear excepted.

 

Section 2.8              Intellectual Property Rights .  Section 1.1(e)  of the Disclosure Schedule discloses all Intellectual Property used in and individually or in the aggregate with other such Intellectual Property material to the Condition of the Business, each of which Seller either has all right, title and interest in or a valid and binding rights under Contract to use.  Except as disclosed in Section 2.8 of the Disclosure Schedule