ASSET PURCHASE AGREEMENT

Exhibit 10.1

 

 

ASSET PURCHASE AGREEMENT

 

between:

 

C RITICAL P ATH , I NC .

a California corporation;

 

and

 

T UCOWS . COM C O .

a Nova Scotia corporation

 

 

Dated as of December 14, 2005

 

 

T ABLE O F C ONTENTS

 

 

i

T ABLE O F C ONTENTS

( CONTINUED )

 

 

ii

T ABLE O F C ONTENTS

( CONTINUED )

 

 

iii

ASSET PURCHASE AGREEMENT

 

T HIS A SSET P URCHASE A GREEMENT (this “ Agreement ”) is entered into as of December 14, 2005, by and between C RITICAL P ATH , I NC . , a California corporation ( “Seller” ); and T UCOWS . COM C O . , a Nova Scotia corporation ( “Purchaser” ). Capitalized terms used in this Agreement are defined in Exhibit A or elsewhere in this Agreement.

 

R ECITALS

 

W HEREAS , Seller wishes to sell and transfer substantially all of its assets and certain liabilities related to the Business to Purchaser, and Purchaser wishes to purchase and acquire such assets and liabilities.

 

W HEREAS , concurrently with the consummation of the Transactions, Purchaser and Seller will enter into the Escrow Agreement, Transition Services Agreement, the Software License Agreement, the Patent License Agreement and the Media Mail License Agreement.

 

A GREEMENT

 

The parties to this Agreement, intending to be legally bound, agree as follows:

 

1. S ALE OF A SSETS ; R ELATED T RANSACTIONS .

 

1.1 Sale of Assets.

 

(a) Seller shall cause to be granted, sold, assigned, transferred, conveyed and delivered to Purchaser, at the Closing (as defined below), good and valid title to the assets set forth on Schedule 1.1(a) , free and clear of Encumbrances (collectively, the “Acquired Assets” ), on the terms and subject to the conditions set forth in this Agreement. To the extent practicable, Seller and Purchaser agree to deliver any of the Acquired Assets in an intangible media.

 

(b) Notwithstanding anything herein to the contrary, all assets of Seller and its Subsidiaries not expressly set forth on Schedule 1.1(a) , including those assets which are used in the Business and set forth on Schedule 2.15 , shall not be sold or transferred hereunder and shall be excluded from the definition of Acquired Assets (the “ Excluded Assets ”), which assets shall remain the property of Seller or its Subsidiaries, as the case may be.

 

1.2 Assumption of Liabilities.

 

(a) At the Closing and except as otherwise specifically provided in this Section 1.2 , Purchaser will assume only the Liabilities of Seller or its Subsidiaries explicitly set forth on Schedule 1.2 (the “ Assumed Liabilities ”).

 

(b) Notwithstanding the foregoing, and notwithstanding anything to the contrary contained in this Agreement, the Assumed Liabilities shall not include, and Purchaser shall not assume, perform, discharge or be responsible for any Liabilities of Seller or its

 

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Subsidiaries not expressly set forth on Schedule 1. 2 (collectively, the “Excluded Liabilities” ) . Without limiting the generality of the foregoing, the Excluded Liabilities shall include any liability for services provided by Seller prior to the Closing.

 

1.3 Consideration. As consideration for the sale of the Acquired Assets to Purchaser, subject to the terms and conditions of this Agreement and in reliance upon the representations, warranties, covenants and agreements of Seller contained herein, at the Closing, Purchaser shall:

 

(a) pay to Seller the Cash Closing Payment in immediately available funds by wire transfer to an account designated by Seller in writing by December 22, 2005;

 

(b) assume the Assumed Liabilities in accordance with the Assumption Agreement; and

 

(c) deposit the Escrow Amount with the Escrow Agent, to be held in escrow pursuant to the terms of the Escrow Agreement; which Escrow Amount shall be released as follows:

 

(i) if, after the Closing Date, Purchaser signs a Renewal Agreement with Customer X, Purchaser will provide Seller, within ten (10) business days of such renewal, with: (A) a copy of such Renewal Agreement with Customer X and (B) the calculation of the Annualized Renewal Contribution (such notice, the “ Customer X Notice ”). If the Renewal Agreement with Customer X is for a term of service beyond July 31, 2006 then, within ten (10) business days after the execution of the Renewal Agreement with Customer X, the Customer X Portion shall be paid from the Escrow Amount to Seller. For purposes of clarity, if Purchaser does not sign a Renewal Agreement with Customer X for a term of service extending beyond July 31, 2006, no Customer X Portion shall be payable to Seller. Seller shall have ten (10) business days from receipt of the Customer X Notice in which to notify Purchaser of any objection to the calculation of the Annualized Renewal Contribution. If Seller provides notice of such objection, Purchaser and Seller shall meet and negotiate in good faith to determine the calculation of the Annualized Renewal Contribution. If Seller and Purchaser are unable to reach an agreement as to the calculation of the Annualized Renewal Contribution, Seller and Purchaser shall submit the dispute to binding arbitration before a panel of three arbitrators in New York, New York in accordance with the commercial arbitration rules then in effect of the American Arbitration Association. The award of the arbitrators, or of the majority of them, shall be final and binding upon Seller and Purchaser; and

 

(ii) on October 31, 2006, the following amount, if any, of the Escrow Amount shall be released to Seller: (A) (1) the Escrow Amount multiplied by (2) the quotient of the Annual Contribution of each Select Customer which has signed a Renewal Agreement prior to such date divided by the Aggregate Annual Contribution plus (B) any interest accrued on such portion of the Escrow Amount; and

 

(iii) any portion of the Escrow Amount not released to Seller by October 31, 2006 (and not subject to any dispute among Seller and Purchaser) shall be released to Purchaser.

 

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1.4 Sales Taxes. Each of Purchaser on the one hand and Seller on the other hand shall bear and shall pay any one-half of and all Taxes, including sales taxes, use taxes, transfer taxes, documentary charges, recording fees or similar taxes, charges, fees or expenses that may become payable in connection with the transfer of the Acquired Assets to Purchaser or in connection with any of the other Transactions.

 

1.5 Closing.

 

(a) The closing of the sale of the Acquired Assets to Purchaser (the “ Closing ”) shall take place at the offices of Paul, Hastings, Janofsky & Walker LLP in San Francisco, California, or such other location as the parties may agree, no earlier than January 3, 2006, and after that date no event later than five (5) business days after satisfaction (or waiver) of the conditions set forth in Article 5. For purposes of this Agreement, “Closing Date” shall mean the date as of which the Closing actually takes place, and “Effective Time” shall mean the time as of which the Closing actually takes place.

 

(b) At the Closing:

 

(i) Purchaser shall pay the Cash Closing Payment as contemplated by Section 1.3(a);

 

(ii) Purchaser shall deliver the Escrow Amount to the Escrow Agent and Purchaser, Seller and Escrow Agent shall execute and deliver the Escrow Agreement substantially in the form of Exhibit B (the “ Escrow Agreement ”);

 

(iii) Seller and Purchaser shall execute and deliver the Transition Services Agreement substantially in the form of Exhibit C (the “ Transition Services Agreement ”);

 

(iv) Seller and Purchaser shall execute and deliver the Software License Agreement substantially in the form of Exhibit D (the “ Software License Agreement ”);

 

(v) Seller shall execute and deliver to Purchaser a bill of sale in the form of Exhibit E (the “ Bill of Sale ”);

 

(vi) Purchaser shall execute and deliver to Seller an Assumption Agreement in substantially the form of Exhibit F (the “Assumption Agreement” );

 

(vii) Seller and Purchaser shall execute and deliver the Patent License Agreement in substantially the form of Exhibit G (the “Patent License Agreement” ); and

 

(viii) Seller and Purchaser shall execute and deliver the Media Mail License Agreement in substantially the form of Exhibit H (the “Media Mail License Agreement” ).

 

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2. R EPRESENTATIONS AND W ARRANTIES OF S ELLER .

 

Seller represents and warrants to Purchaser as follows:

 

2.1 Due Organization. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of California with full corporate power and authority to conduct the Business as it is presently conducted and to own and lease the Acquired Assets.. Seller is duly qualified to do business and is in good standing in all jurisdictions in which the operation of the Business makes such qualification necessary, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.

 

2.2 Authority; Binding Nature of Agreements. Seller has the corporate power and authority to enter into and to perform its obligations under this Agreement and each of the Transaction Agreements to which it is a party and to consummate the Transactions contemplated hereby. This Agreement has been, and each of the Transaction Documents will be as of the Closing Date, duly authorized, executed and delivered by Seller, and (assuming due execution and delivery by Purchaser) this Agreement constitutes, and each of the Transaction Documents when executed and delivered will constitute, a legal, valid and binding obligation of Seller, enforceable in accordance with its terms, subject to any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereinafter in effect relating to creditors’ rights generally or to general principles of equity.

 

2.3 Non-Contravention. Except as set forth on Schedule 2.3 , the execution, delivery and performance of this Agreement and the Transaction Agreements by Seller, the consummation by Seller of the Transactions and the compliance by Seller with any of the provisions hereof, do not and will not (a) contravene or conflict with the articles of incorporation, bylaws of Seller or (b) contravene or conflict with or constitute a material violation of any provision of any applicable Legal Requirement binding upon or applicable to Seller or its Subsidiaries; nor will such execution, delivery or performance violate, be in conflict with or result in the breach (with or without the giving of notice or lapse of time, or both) of any term, condition or provision of any Contract which is an Acquired Asset or Assumed Liability, or give any party with rights thereunder the right to terminate, modify, accelerate or otherwise change the existing rights or obligations of Seller thereunder.

 

2.4 Litigation; Compliance with Legal Requirements. There are no Proceedings related to the Business pending or, to Seller’s Knowledge, threatened against Seller, its respective activities, properties or assets, that seeks to prevent, enjoin, alter or delay the Transactions. Neither Seller nor any of its Subsidiaries is a party to or subject to the provisions of any Order relating to the Business. Seller has complied in all material respects with any applicable Legal Requirement relating to its business and properties. This Section 2.4 shall not apply to any Tax matters.

 

2.5 Title To Assets. Seller has good, valid and marketable title to, or a valid leasehold interest in, the Acquired Assets, free and clear of any Encumbrances, other than Permitted Encumbrances.

 

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2.6 Contractual and Government Consents. None of the execution, delivery or performance of this Agreement or any other Transaction Document by Seller requires any authorization, approval or consent and no action by or in respect of, or filing with, notification to, or registration with any Governmental Body, except as described on Schedule 2.6 . Except as set forth on Schedule 2.6 , no consent, approval, waiver or other action by any Person under any Material Assigned Contract is required or necessary for, or as a result of, the execution, delivery and performance of this Agreement or any other Transaction Document by Seller or the consummation of the other Transactions.

 

2.7 Permits. There are no material licenses, franchises, permits and other governmental authorizations necessary for the continued operation of the Business as it is currently being conducted (the “Permits ”).

 

2.8 Absence of Liabilities. Except as disclosed on Schedule 2.8 , there are no Liabilities relating to the Business that Purchaser will assume of any nature except Assumed Liabilities.

 

2.9 Absence of Material Adverse Effect. Since September 30, 2005, the Business has not suffered a Material Adverse Effect.

 

2.10 Material Agreements.

 

(a) Schedule 2.10(a) sets forth each Contract outstanding as of the date hereof to which Seller is a party that relates to the Business or the operation of the Business as a going concern.

 

(b) Except as disclosed on Schedule 2.10(b) :

 

(i) As of the date hereof, all Contracts listed on Schedule 2.10(a) (the “ Assigned Contracts ”) are valid, binding and in full force and effect and are enforceable against Seller and, to Seller’s Knowledge, the other party thereto, in accordance with their respective terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and general equitable principles regardless of whether such enforceability is considered in a proceeding at law or in equity; and

 

(ii) Seller is not (with or without the lapse of time or the giving of notice, or both) in material breach or default in any respect under any Assigned Contract and, to the Knowledge of Seller, no other party to any Assigned Contract is (with or without the lapse of time or the giving of notice, or both) in material breach or default in any respect thereunder. Seller has not received any written notice of the intention of any party to terminate any Assigned Contract. Complete and correct copies of all Assigned Contracts listed in the Schedules, together with all material modifications and amendments thereto, have been made available to Purchaser.

 

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2.11 Intellectual Property.

 

(a) Schedule 2.11(a) identifies all Intellectual Property used in the Business, including each patent or registration that has been issued to Seller and which is used in the Business, each pending patent application or application for registration that Seller has made with respect to any of its Intellectual Property used in the Business, and each material license, agreement, or other permission that Seller has granted to any third party with respect to any of its Intellectual Property used in the Business. Seller has delivered to Purchaser correct and complete copies of all such Intellectual Property. Schedule 2.11(a) also identifies each material trade name or unregistered trademark, service mark, corporate name, Internet domain name, copyright and material computer software item used by Seller in connection with the Business. With respect to each item of Intellectual Property:

 

(i) Seller possess all right, title, and interest in and to the item, free and clear of any Encumbrances;

 

(ii) the item is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge;

 

(iii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to the Knowledge of Seller, is threatened that challenges the legality, validity, enforceability, use, or ownership of the item;

 

(iv) no loss or expiration of the item is threatened, pending, or reasonably foreseeable, except for patents expiring at the end of their statutory terms (and not as a result of any act or omission by Seller, including, without limitation, a failure by Seller to pay any required maintenance fees);

 

(v) neither Seller nor any of its Affiliates has any obligation to compensate any person for the use of any Intellectual Property, and neither Seller nor any of its Affiliates has granted to any person any license, option, or other rights to use in any manner any of the Intellectual Property, whether requiring the payment of royalties or not;

 

(vi) neither Seller nor any of its Affiliates has received any notice of invalidity or infringement of any rights of others with respect to the Intellectual Property, and no Person has notified Seller or any of its Affiliates that it is claiming any ownership of or right to use such Intellectual Property;

 

(vii) to the Knowledge of Seller, no Person is infringing upon any such Intellectual Property in any way;

 

(viii) to the Knowledge of Seller, the use of the Intellectual Property by Seller does not and will not conflict with, infringe upon or otherwise violate the valid rights of any third party in or to such Intellectual Property;

 

(ix) Seller has taken commercially reasonable steps to protect and preserve the confidentiality of its trade secrets, including entering into binding and written

 

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confidentiality and non-use agreements between employees of the Business and third parties as necessary; and

 

(x) all current and former employees, consultants and contractors of the Business have executed and delivered, and are in compliance with, enforceable agreements regarding the protection of Intellectual Property and have provided valid written assignments of all Intellectual Property conceived or developed by such employees, consultants or contractors in connection with their services for the Business, and no current or former employee, consultant, contractor or other Person has any right, claim or interest to any of the Intellectual Property.

 

(b) Schedule 2.11(b) identifies each item of Intellectual Property that any third party owns and that Seller uses pursuant to license, sublicense, agreement, or permission in the Business. Seller has delivered to Purchaser correct and complete copies of all such licenses, sublicenses, agreements, and permissions (as amended to date). With respect to each item of Intellectual Property required to be identified in Schedule 2.11(b) :

 

(i) the license, sublicense, agreement, or permission covering the item is legal, valid, binding, enforceable, and in full force and effect in all material respects;

 

(ii) no party to the license, sublicense, agreement, or permission is in material breach or default, and no event has occurred that with notice or lapse of time would constitute a material breach or default or permit termination, modification, or acceleration thereunder;

 

(iii) no party to the license, sublicense, agreement, or permission has repudiated any material provision thereof; and

 

(iv) Seller has not granted any sublicense or similar right with respect to the license, sublicense, agreement, or permission.

 

2.12 Affiliated Party Transactions . Except as set forth on Schedule 2.12 none of Seller’s Affiliates has been involved in any business arrangement or relationship with the Business within the past three years , and none of Seller’s Affiliates own, directly or indirectly, or within the past three years has had, any interest, either of record or beneficially or equitably, in any business, corporate or otherwise that (a) has or had, or which is or was a party to, or in any asset or property which is or was the subject of, any Contract included as an Acquired Asset, or (b) conducts the same business as, or a similar business to, the Business. None of Seller’s Affiliates own, directly or indirectly, any material asset, tangible or intangible, that is used in the Business.

 

2.13 Taxes.

 

(a) With respect to the income or operations of the Business and the ownership of the Acquired Assets on or prior to the Closing Date, Seller has filed or caused to be filed on a timely basis (taking into account all applicable extension periods) with the appropriate Governmental Bodies all material Tax Returns that were required to be filed by it pursuant to applicable Laws. All such Tax Returns were true, correct, and complete in all material respects.

 

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(b) All material Taxes (whether or not shown on any Tax Return) due by or with respect to the income or operations of the Business and the ownership of the Acquired Assets for all taxable years or other taxable periods that end on or before the Closing Date and, with respect to any taxable year or other taxable period beginning on or before and ending after the Closing Date (each an “ Overlap Period ”), for the portion of such Overlap Period ending on and including the Closing Date (each a “ Pre-Closing Period ”) have been timely paid or will be timely paid in full on or prior to the Closing Date or accrued and adequately disclosed and, to the extent not yet due and payable, fully provided for in accordance with United States generally accepted accounting principles (“ GAAP ”) on Seller’s financial statements.

 

(c) With respect to the Business and the ownership of the Acquired Assets: (i) there is no action, audit, dispute or claim now proposed, threatened or pending against, or with respect to, Seller in respect of any Taxes; (ii) Seller has not received any written notices from any Governmental Body of proposed adjustment, deficiency, or underpayment of any material Taxes, or requesting information with respect to any material Taxes; (iii) Seller is not contesting presently any Tax liability before any court, tribunal or agency; (iv) Seller is not the beneficiary of any extension of time within which to file any Tax Return, nor has Seller made (or had made on its behalf) any requests for such extensions; and (v) Seller has not given any waiver or extensions (or is or would be subject to a waiver) of any statute of limitations relating to the payment of Taxes.

 

(d) There are no Encumbrances on any of the Acquired Assets with respect to Taxes and Seller has no knowledge of any basis for assertion of any claims attributable to Taxes which, if adversely determined, would result in any Encumbrance with respect to Taxes on the Acquired Assets.

 

(e) All material Taxes which Seller is (or was) required by law to withhold or collect in connection with the income or operations of the Business and the ownership of the Acquired Assets have been duly withheld or collected, and have been timely paid over to the proper authorities to the extent due and payable.

 

(f) No written claim has ever been made by any Governmental Body in a jurisdiction where Seller does not file Tax Returns that a Tax Return is required to be filed in such jurisdiction with regard to the income or operations of the Business and the ownership of the Acquired Assets.

 

(g) Seller is not a “foreign person” within the meaning of Section 1445 of the Code.

 

2.14 Seller Benefit Plans .

 

(a) Schedule 2.14 contains a complete list of each Seller Benefit Plan. Except for Seller Benefit Plans disclosed on Schedule 2.14 Seller does not have any liability with respect to any other benefit plan or arrangement and has no commitment or obligation to establish any other benefit plan or arrangement with respect to the Business. For purposes of this Section 2.14 , the term “Seller” includes any ERISA Affiliate.

 

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(b) As of the Closing Date, Purchaser will not, either directly or indirectly, have any obligation or liability, as a matter of law or otherwise, with respect to any Seller Benefit Plan that was sponsored or maintained by Seller or to which Seller contributes or for which Seller had, or may have, any liability, contingent or otherwise, either directly or indirectly through an ERISA Affiliate.

 

2.15 Sufficiency of Assets . Except as set forth on Schedule 2.15 , the Acquired Assets and Assumed Liabilities (together with the services provided pursuant to the Transition Services Agreement and the licenses under the Software License Agreement, the Patent License Agreement and the Media Mail License Agreement) comprise all of the assets, properties and rights primarily and principally used by Seller in the Business and necessary for Purchaser to conduct the Business immediately following the Closing in all respects as it was conducted prior to the Closing. The Acquired Assets are in good operating condition and repair (except for ordinary wear and tear and routine maintenance in the Ordinary Course of Business).

 

2.16 Investment Banking Fees. Except for the fees due to Updata Capital which will be fully paid by Seller, Seller and its Affiliates have not employed or made any agreement with any broker, investment banker, finder or similar agent or person which will result in the obligation of Purchaser to pay any finder’s fee, brokerage fees or other commission or similar payment before or after the Effective Time.

 

2.17 Disclaimer of Warranties. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES MADE BY SELLER IN THIS ARTICLE 2 AND IN THE TRANSACTION AGREEMENTS, SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE TRANSFERRED ASSETS AND ASSUMED LIABILITIES, IT BEING SPECIFICALLY UNDERSTOOD BY PURCHASER THAT, EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS ARTICLE 2, THE TRANSFERRED ASSETS AND ASSUMED LIABILITIES ARE BEING SOLD AND TRANSFERRED “AS IS” IN ALL RESPECTS. SELLER SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF PURCHASER’S, WHETHER OR NOT SELLER HAS BEEN MADE AWARE OF ANY SUCH PURPOSE.

 

2.18 Financial Information. A true, correct and complete list of the revenue and the direct cost of revenue for the Business for the four fiscal quarters of 2004 and the first three fiscal quarters of 2005 is attached hereto as Schedule 2.18 (the “Financial Data” ). The Financial Data has been prepared in accordance with GAAP and presents fairly the financial information reflected therein as of the dates indicated thereon, consistently applied.

 

2.19 Disclosure. Except as set forth on Schedule 2.10(b) , Seller has delivered to Purchaser true and complete copies of each Contract that is a part of the Acquired Assets. Neither this Agreement nor any certificate or schedule furnished or to be furnished to Purchaser pursuant hereto, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not misleading.

 

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3. R EPRESENTATIONS AND W ARRANTIES OF P URCHASER .

 

Purchaser represents and warrants as of the date hereof that each of the following representations and warranties is true and correct except as expressly set forth otherwise in Purchaser Disclosure Schedule:

 

3.1 Due Organization. Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of Nova Scotia, Canada with full company power and authority to conduct the business as it is presently conducted and to own and lease its properties and assets. Purchaser is duly qualified to do business and is in good standing in all jurisdictions in which the character of its properties owned or leased or the nature of its activities make such qualification necessary, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.

 

3.2 Authority; Binding Nature Of Agreements. Purchaser has the corporate power and authority to enter into and to perform its obligations under this Agreement and each of the Transaction Agreements to which it is a party and to consummate the Transactions contemplated hereby. This Agreement has been, and each of the Transaction Documents will be as of the Closing Date, duly authorized, executed and delivered by Purchaser, and (assuming due execution and delivery by Seller) this Agreement constitutes, and each of the Transaction Documents when executed and delivered will constitute, a legal, valid and binding obligation of Purchaser, enforceable in accordance with its terms, subject to any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereinafter in effect relating to creditors’ rights generally or to general principles of equity.

 

3.3 Non-Contravention. The execution, delivery and performance of this Agreement and the Transaction Agreements by Purchaser, the consummation by Purchaser of the Transactions and the compliance by Purchaser with any of the provisions hereof, do not and will not (a) contravene or conflict with the articles of incorporation, bylaws of Purchaser or (b) contravene or conflict with or constitute a material violation of any provision of any applicable Legal Requirement binding upon or applicable to Purchaser or its Subsidiaries.

 

3.4 Litigation; Compliance with Legal Requirements. There are no Proceedings pending or, to Purchaser’s Knowledge, threatened against Purchaser, its respective activities, properties or assets that seeks to prevent, enjoin, alter or delay the Transactions.

 

3.5 Financial Ability to Perform . Sufficient funds and credit arrangements are available to Purchaser as of the date hereof, and will be so available to Purchaser at the Closing, to enable Purchaser to pay the Cash Closing Payment, the Escrow Amount and all other amounts payable by it hereunder at the Closing.

 

3.6 Investment Banking Fees . Purchaser and its Affiliates have not employed or made any agreement with any broker, investment banker, finder or similar agent or person which will result in the obligation of Seller to pay any finder’s fee, brokerage fees or other commission or similar payment before or after the Effective Time.

 

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4. O THER A GREEMENTS .

 

4.1 Further Actions. From and after the Effective Time, Seller shall reasonably cooperate with Purchaser and Purchaser’s Representatives, and shall execute and deliver such documents and take such other actions as Purchaser may reasonably request to put Purchaser in possession and control of all of the Acquired Assets. Subject to the terms and conditions of this Agreement, each of the parties to this Agreement will use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper, desirable, or advisable under applicable Legal Requirements, so as to permit consummation of the Transactions in accordance with the terms of this Agreement and the Transaction Agreements and will use commercially reasonable efforts to cooperate fully with the other parties hereto to that end. Without limiting the foregoing, Seller shall use its commercially reasonable efforts to obtain any consent set forth on Schedule 2.6 .

 

4.2 Public Announcements. Purchaser and Seller will consult with each other as to the form, substance and timing of the initial press release or other initial public statement relating to this Agreement, or any of the Transactions, and no such initial statement will be made by one without the prior written consent of the other, which consent will not be unreasonably withheld or delayed; provided that each may make such disclosures as are necessary to comply with any Legal Requirement or the request of any Governmental Body after making good faith efforts under the circumstances to consult in advance with the other.

 

4.3 Access to Records and Cooperation . From and after the Effective Time, each party shall cooperate in good faith with the other party and the other party’s Representatives in connection with any tax inquiry, audit, investigation or dispute, or in connection with the filing of any Tax Return, including by providing access during normal business hours to all books and records, information and employees relating to the Acquired Assets and Assumed Liabilities. The party requesting any such books and records, information or employees shall bear all of the out-of-pocket costs and expenses (including, without limitation, attorneys’ fees, but excluding reimbursement for salaries and employee benefits) reasonably incurred in connection with providing such books and records, information or employees.

 

4.4 Confidentiality. Each party will hold, and will cause its Representatives to hold, in confidence all documents and information furnished to it by or on behalf of the other party in connection with the Transactions pursuant to the terms of that certain Confidential Disclosure Agreement entered into between Seller and Purchaser effective August 4, 2005 (the “Confidentiality Agreement” ).

 

4.5 Purchase Price Allocation. As soon as practicable after the date hereof, Purchaser and Seller shall consult with each other and agree upon the allocation of the Aggregate Purchase Price and Assumed Liabilities among the Acquired Assets and the non-competition covenant set forth in Section 4.8 . Notwithstanding any other provision of this Agreement, this Section 4.5 shall survive the Closing Date indefinitely. Seller and Purchaser agree that the values attributed to the Acquired Assets shall be arrived at in compliance with Section 1060 of the Code and the regulations promulgated thereunder. Each of Seller and Purchaser shall (i) timely file all forms required to be filed in connection with such allocation, (ii) be bound by

 

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such allocation for purposes of determining Taxes, (iii) prepare and file, and cause its Affiliates to prepare and file, its Tax Returns on a basis consistent with such allocation, and (iv) not take any position on any return, declaration, report or information return or statement inconsistent with the allocation agreed to among Purchaser and Seller, unless otherwise required by any Applicable Law. Purchaser shall prepare and deliver IRS Form 8594 to Seller within sixty (60) days after the Closing Date to be filed with the IRS. Any post-Closing adjustment to the Aggregate Purchase Price shall be reflected in the final allocation of the Aggregate Purchase Price among the Acquired Assets in a manner consistent with Section 1060 of the Code and the regulations promulgated thereunder. Each party hereto will promptly notify the other if it receives notice that a Governmental Body proposes any allocation that is different from the allocation agreed upon by Purchaser and Seller.

 

4.6 Collection of Accounts Receivables. From and after the Effective Time, Purchaser shall remit to Seller any portion of the accounts receivable of the Business received by Purchaser and which represent services provided by Seller prior to the Closing Date (the “Retained A/Rs” ). Seller will provide Purchaser a list of the Retained A/Rs at Closing. Any such Retained A/Rs received by Purchaser during any month shall be remitted to Seller on the last day of each such month. Seller shall have a right to audit Purchaser’s records pertaining to the Retained A/Rs on reasonable notice, during ordinary business hours in order to verify the accuracy of payments of any portion of the Retained A/Rs made to Seller. In the event of a dispute, the parties agree to meet and confer in good faith in an effort to resolve any disputes thereto.

 

4.7 Non-Solicitation. For a period of one (1)