ASSET SALE AND PURCHASE
AGREEMENT
This ASSET SALE
AND PURCHASE AGREEMENT is made and entered into as of the 17th day
of February, 2004, by and between PINNACLE ELECTRONICS, LLC, a
Delaware limited liability company (the "Seller"), and LABARGE
ELECTRONICS, INC., a Missouri corporation (the "Buyer").
BACKGROUND
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The Seller and its
subsidiary, Pinnacle POS, are engaged in the business of (i)
designing, manufacturing and marketing printed circuit assemblies
and electronic/electro-mechanical systems and (ii) providing
contract electronic manufacturing services (the "Business"). Unless
the context requires otherwise, all references to Seller shall
include Seller and its subsidiaries.
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The Buyer desires to
acquire from the Seller and the Seller desires to transfer to the
Buyer, the "Purchased Assets" (as hereinafter defined), and, in
connection therewith the Buyer is willing to assume the "Assumed
Obligations" (as hereinafter defined), all in accordance with and
subject to the terms and conditions hereinafter provided (the
"Transaction").
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The Seller and the Buyer
(sometimes referred to herein individually as a "Party" and
collectively as the "Parties") desire to state the terms and
conditions of the Transaction, including the mode of carrying out
the same, the consideration to be exchanged by the Parties in
connection with the Transaction and such other matters as the
Parties consider to be necessary or desirable.
NOW, THEREFORE, in
consideration of the foregoing premises and of the mutual and
independent promises and undertakings hereinafter set forth, and
subject to the terms and conditions hereinafter provided, the
Parties, intending to be legally bound hereby, agree as
follows:
ARTICLE I. Definitions and Certain
Usages
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Defined Terms
. Initially capitalized
words and phrases set forth below in this Section 1.1 have the
following meanings:
"AAA" has the meaning given to it in
Section 7.5 hereof.
"Accounts Receivable" means, at the
relevant time, all amounts receivable from customers of the Seller
in respect of the sales of products and services by the Seller in
the operation of the Business, subject to customary discounts,
offsets, contras and the like.
"Adjustment Escrow" has the meaning
given to it in Section 2.3 hereof.
"Affiliate" means, when used with
reference to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common
control with, the referenced Person. For purposes of this
definition, "control," when used with respect to any specified
Person, means the power to direct or cause the direction of the
management and/or policies of such Person, directly or indirectly,
whether through ownership of voting securities or other voting
rights, by contract or otherwise (and the words "controlling" and
"controlled" have meanings correlative of the
foregoing).
"Agreement" means this Asset Sale and
Purchase Agreement (including the Exhibits and Schedules hereto),
as the same may, from time to time, be amended, modified or
supplemented in accordance with its terms.
"Applicable Legal Requirements" means,
with respect to any Person, any federal, state or local law
(whether statutory or common law), rule, regulation, code or
ordinance, and any administrative, judicial or arbitral decision,
order, ruling, judgment, award, writ or decree to which such Person
and/or all or a portion of the business or assets of such Person is
subject.
"Assumed Contracts" means those
Contracts identified on Schedule 1.1(a) hereto.
"Assumed Obligations" means the
following liabilities and obligations of the Seller:
(a) all liabilities and obligations
under the Assumed Contracts which remain unsatisfied as of the
Closing Date;
(b) all accounts payable of the Seller
arising in the ordinary course of the Business prior to the Closing
Date, including all accrued payroll, vacation pay and other
obligations to Retained Employees which are not Retained
Liabilities;
(c) all obligations of the Seller for
repair, replacement or return of products shipped or services
provided in the ordinary course of the Business prior to the
Closing Date; and
(d) all obligations of the Seller for
any warranty claim relating to products shipped or services
provided in the ordinary course of the Business prior to the
Closing Date.
"Bill of Sale, Assignment and
Assumption Agreement" means the agreement, substantially in the
form of Exhibit A hereto, to be entered into by and between
the Seller and the Buyer.
"Books and Records" means (in whatever
form or medium) all of the following that pertain to the Business:
(i) books, records, ledgers, files, documents, correspondence,
lists, creative materials, advertising and promotional materials,
studies, reports, and other printed or written materials, (ii) all
computer files and programs, retrieval programs, operating data and
plans, (iii) all production records, customer and supplier lists,
item specifications, product literature, sales records, and pricing
models and schedules, and (iv) all schematics, drawings,
blueprints, plans, specifications and similar documentation but
excluding any of the foregoing that are part of the Excluded
Assets.
"Business" has the meaning given to it
in paragraph A of the Background hereto.
"Business Day" means any day other than
a Saturday, Sunday or any other day on which commercial banks
located in Pittsburgh, Pennsylvania are permitted or required by
law to be closed.
"Buyer" has the meaning given to it in
the introductory paragraph hereto.
"Buyer Loss" and "Buyer Losses" have
the meanings given to them in Section 6.2 hereof.
"Buyer Material Adverse Effect" means
any state of facts, event, effect or change in circumstances that,
individually or together with any other state of facts, event,
effect or change in circumstances, (a) is materially adverse to or
materially impairs the ability of the Buyer to perform its
obligations under this Agreement or (b) prevents or materially
delays the taking of any action on the part of the Buyer necessary
for the consummation of the Transaction.
"Buyer Party" and Buyer Parties" have
the meanings given to them in Section 6.2 hereof.
"Charter Documents" means, with respect
to the Seller or the Buyer, as the case may be, (a) the certificate
of organization, certificate of formation, articles of
incorporation, certificate of incorporation or other organizational
document (however designated) required by the laws of the
jurisdiction in which such Party is organized in order for it to
commence its existence, and (b) the operating agreement, limited
liability agreement, by-laws or other document (however designated)
governing the internal affairs of such Party.
"Claim" and "Claims" have the meanings
given to them in paragraph (a) of Section 6.3 hereof.
"Claim Expiration Date" has the meaning
given to it in Paragraph (e) of Section 6.3 hereof.
"Claim Representative" has the meaning
given to it in paragraph (a) of Section 6.3 hereof.
"Closing" has the meaning given to it
in Section 2.1 hereof.
"Closing Conditions" has the meaning
given to it in Section 5.3 hereof.
"Closing Date" has the meaning given to
it in Section 2.1 hereof.
"Closing Balance Sheet" has the meaning
given to it in Section 2.4 hereof.
"Closing Statement" has the meaning
given to it in Section 2.4 hereof.
"Code" means the Internal Revenue Code
of 1986, as amended.
"Commencement Date" means September 14,
2001, the date that the Seller began operating the
Business.
"Confidential Information" means with
respect to any Person, any information concerning the business or
affairs of such Person, or the ownership of such Person (including
the identity of the direct and indirect owners), that is not
generally known to the public.
"Contracts" means all rights and
obligations of the Seller under all contracts, agreements, purchase
orders and sale orders, whether written or oral, relating to the
Business, including (i) all orders and agreements for the sale of
products or services of the business, (ii) all agreements for the
purchase or delivery of utilities, inventory, supplies, parts or
maintenance services, and (iii) all equipment or facility leases,
but excluding all plan documents and contracts relating to Employee
Benefit Plans.
"Conveyance Documents" means the Bill
of Sale, Assignment and Assumption Agreement, the Lease Assignment
and all other instruments and documents required (or reasonably
requested by the Buyer) for the sale, assignment, conveyance,
grant, transfer and delivery by the Seller to the Buyer of the
Purchased Assets pursuant to this Agreement.
"Disclosure Schedule" means the
attached list of disclosures and exceptions relating to the
representations and warranties of the Parties.
"Dispute" has the meaning given to it
in Section 7.5 hereof.
"Disputing Parties" has the meaning
given to it in Section 7.5 hereof.
"Employee Benefit Plan" means any
"employee benefit plan," as such term is defined in Section 3(3) of
ERISA, and all other employee compensation and benefit plans of the
Seller (including all bonus, profit sharing, incentive compensation
and deferred compensation plans maintained by the Seller or to
which the Seller contributes or has contributed).
"Environmental Law" means any
Applicable Legal Requirement relating to (a) the protection of the
environment (including, without limitation, air, water, surface
water, ground water, drinking water, surface land and subsurface
land), (b) the exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling,
labeling, protection, release or disposal of pollutants,
contaminants, wastes or chemicals or any toxic, radioactive,
ignitable, corrosive or otherwise hazardous substance or material,
or (c) the effect of any of the foregoing on human health or
safety.
"ERISA" means the Employee Retirement
Security Act of 1974, as amended.
"Escrow Agent" has the meaning given to
it in Section 2.3 hereof.
"Escrow Agreement" has the meaning
given to it in Section 2.3 hereof.
"Escrow Funds" has the meaning given to
it in Section 2.3 hereof.
"Excluded Assets" means the following
which shall not be included in the sale and purchase hereunder, are
excluded from the Purchased Assets and shall remain the property of
the Seller:
(a) all cash and cash equivalents of
the Business on hand as of the Closing Date;
(b) all rights of the Seller to any Tax
refunds, Tax abatements and Tax carry forwards or carrybacks
relating to Taxes imposed and paid by Seller prior to the Closing
Date;
(c) all minute books and limited
liability company records of the Seller;
(d) all rights of the Seller under this
Agreement and the Conveyance Documents;
(e) all Contracts which are not Assumed
Contracts;
(f) all insurance policies maintained
by the Seller (including the term life insurance policy on the life
of Ty Eggemeyer);
(g) all personnel records, Tax records
and any other records that the Seller is required by Applicable
Legal Requirements to retain in its possession (provided that Buyer
will be entitled to copies of all such records related to Retained
Employees);
(h) all claims, causes of action,
rights of recovery or set-off and defenses and all other rights
relating to the Excluded Assets and the Retained
Liabilities;
(i) the cause of action captioned
Pinnacle Electronics, LLC v. IoWare, Inc. (Civil Action No. 218670)
in the circuit Court for Fairfax County, Virginia; and
(j) disputed tax payment in the amount
of $39,727.00 made to the Pennsylvania Department of Revenue on
behalf of Braddock Holding, LLC.
"Governmental Authority" means any
federal, state or local governmental authority charged with the
administration or enforcement of any Applicable Legal
Requirement.
"Governmental Authorizations" means all
licenses, permits, certificates, and other authorizations and
approvals required under all Applicable Legal Requirements to which
the Business and/or any of the Purchased Assets are
subject.
"Indemnified Party" and "Indemnified
Parties" have the meanings given to them in paragraph (a) of
Section 6.3 hereof.
"Indemnifying Party" has the meaning
given to it in paragraph (a) of Section 6.3 hereof.
"Indemnity Escrow" has the meaning
given to it in Section 2.3 hereof.
"Initial Balance Sheet" has the meaning
given to it in Section 2.4 hereof.
"Initial Purchase Price" has the
meaning given to it in Section 2.3 hereof.
"Intellectual Property" means all of
the following, owned, used or licensed by the Seller as licensee or
licensor: (i) all fictional business names, trademarks and service
marks (registered or unregistered), trade dress, trade names and
other names and slogans embodying business or product goodwill or
indications of origin, all applications or registrations in any
jurisdiction pertaining to the foregoing and all goodwill
associated therewith (collectively "Marks"); (ii) patents,
patentable inventions, discoveries, improvements, ideas, and all
applications or registrations in any jurisdiction pertaining to the
foregoing, including all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof (collectively
"Patents"); (iii) trade secrets, processes, technology and computer
programs, software and databases, know-how, including confidential
and other non-public information, and the right in any jurisdiction
to limit the use or disclosure thereof (collectively, "Trade
Secrets"), (iv) copyrights in writings, designs, mask works or
other works, and registrations or applications for registration of
copyrights in any jurisdiction; (v) licenses, immunities, covenants
not to sue and the like relating to any of the foregoing; (vi)
Internet Web sites, domain names and registrations or applications
for registration thereof; and (vii) claims or causes of action
arising out of or related to infringement or misappropriation of
any of the foregoing.
"Inventory" means all of the Seller's
raw materials, work in process, finished goods and all other items
of a kind or character customarily carried as inventory in the
Seller's accounts, including any such items that are in transit,
held at the premises of others or paid for and not
delivered.
"Lease Agreement" means the Keystone
Commons Lease dated as of December 1, 2000 between Regional
Industrial Development Corporation of Southwestern Pennsylvania and
the Seller (as assignee of Contraves, Inc.).
"Lease Assignment" means the Assignment
and Assumption of Lease substantially in the form of Exhibit B
hereto.
"Legal Proceedings" has the meaning
given to it in paragraph (e) of Section 3.1 hereof.
"Lien" means any restriction, adverse
claim, charge, mortgage, deed of trust, pledge, security interest,
option, right of first refusal, right of first offer, right to
purchase, or other encumbrance on or against or with respect to
property.
"Loss Threshold Amount" has the meaning
given to it in paragraph (c) of Section 6.3 hereof.
"Non-Assignable Asset" has the meaning
given to it in Section 2.2 hereof.
"Normalized Net Working Capital" has
the meaning given to it in Section 2.4 hereof.
"Party" and "Parties" have the meanings
given to them in paragraph C of the Background hereof.
"Permitted Encumbrances" means, without
duplication, (a) materialmens', mechanics', carriers' and other
like Liens arising in the ordinary course of the Business, (b)
imperfections of title that do not materially interfere with the
use or materially detract from the value of the subject property,
(c) in the case of real property leased by the Seller, (i) the
leases for such real property, (ii) zoning and other municipal
ordinances, and (iii) easements, rights of way, standard title
insurance exceptions, building and use restrictions and covenants
which do not materially interfere with the present use of or
materially detract from the value of the subject property, (d)
Liens for Taxes not yet due and payable, (e) interests of licensors
of tangible personal property and Intellectual Property licensed to
the Seller, (f) interests of lessors of equipment or other tangible
personal property leased to the Seller and (g) the Assumed
Obligations.
"Person" includes an individual,
corporation, partnership, limited liability company, business or
other trust, unincorporated association or other entity.
"Personal Property" means all
machinery, equipment, computer hardware, tools, dies, vehicles,
furniture, fixtures, office supplies, sales display equipment,
product displays, and other tangible personal property (other than
Inventory) owned or held under lease by the Seller that is
necessary for, or used by the Seller in the operation of, the
Business.
"Pinnacle POS" means Pinnacle POS, LLC,
a Delaware limited liability company.
"Post-Closing Adjustment" has the
meaning given to it in Section 2.4 hereof.
"Prepaid Expenses" means all rights to
properties, credits, services or other tangible benefits resulting
from the prepayment by the Seller of expenses relating to the
Business.
"Purchased Accounts Receivable" means
all Accounts Receivable generated as of the Closing Date which
remain unpaid in whole or in part as of the Closing
Date.
"Purchased Assets" means all of the
Seller's right, title and interest in and to the following assets
and property, wherever located, which are used or usable in the
Business:
(a) the Personal Property;
(b) the Inventory;
(c) the Assumed Contracts;
(d) the names Pinnacle and Pinnacle
Electronics;
(e) all of the Seller's ownership
interest in Pinnacle POS;
(f) the Intellectual Property and the
goodwill associated therewith;
(g) the Purchased Accounts
Receivable;
(h) the Books and Records;
(i) the Prepaid Expenses (other than
Prepaid expenses relating to insurance policies maintained by the
Seller);
(j) the Governmental Authorizations, to
the extent that they are assignable to the Buyer; and
(k) all telephone numbers currently
assigned to the Business, to the extent that they are assignable to
the Buyer.
"Purchase Price" has the meaning given
to it in Section 2.3 hereof.
"Retained Employees" has the meaning
given to it in Section 4.3 hereof.
"Retained Liabilities" means all
liabilities and obligations of the Seller that are not Assumed
Obligations, including, but not limited to:
(a) indebtedness for borrowed
money;
(b) accruals for or obligations
relating to dividends or distributions to members of Seller with
respect to their membership interests;
(c) management bonuses or incentives
accrued for fiscal year 2003 or for Ty Eggemeyer for fiscal year
2004;
(d) liabilities or obligations not
reflected on Seller's audited balance sheet as of December 28, 2003
and not accrued in the ordinary course of business since that
date;
(e) obligations for severance of
Seller's employees existing as of the Closing Date;
(f) obligations of Seller to make
contributions to or make payments from any of Seller's Employee
Benefit Plans with respect to periods prior to the Closing;
and
(g) Seller's transaction costs, which
are covered by Section 7.9 hereof.
"Seller" has the meaning given to it in
the introductory paragraph hereto.
"Seller Loss" and "Seller Losses" shall
have the meanings given to them in Section 6.1 hereof.
"Seller Material Adverse Effect" means
any state of facts, event, effect or change in circumstances that,
individually or together with any other state of facts, event,
effect or change in circumstances, (a) is materially adverse to or
materially impairs the ability of the Seller to perform its
obligations under this Agreement, (b) is materially adverse to or
impairs the value, condition or use and enjoyment by the Buyer of
the Purchased Assets or the value or condition, financial or
otherwise, of the Business, other than (i) facts, events or changes
resulting from the announcement of the execution and delivery of
this Agreement or (ii) changes in economic or business conditions
generally, or (c) prevents or materially delays the taking of any
action on the part of the Seller necessary for the consummation of
the Transaction.
"Seller Party" and "Seller Parties"
have the meanings given to them in Section 6.1 hereof.
"Tax" means any form of taxation,
assessment, levy, duty or other charge imposed by any Governmental
Authority, including any tax, levy, duty or other charge based on
income or profits, gross receipts, accumulated earnings, sales, use
or occupation, capital stock or franchise, real or personal
property, or employment or payroll. The foregoing includes any
alternative or add-on minimum Tax, ad valorem or value-added Tax,
transfer Tax, social security Tax (including national insurance
contributions), payroll, disability or unemployment Tax, stamp Tax
or customs or excise tax.
"Third-party Legal Proceeding" means
any Legal Proceeding in which at least one Person other than a
Party is a participant and, for purposes of Section 6.3 hereof but
not necessarily Section 7.6 hereof, with respect to which one or
more Claims has been or may be asserted.
"Trademark Assignment" means the
Trademark Assignment substantially in the form of Exhibit F
hereto.
"Transaction" has the meaning given to
it in paragraph B of the Background hereto.
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Certain
Usages . As used
in this Agreement:
a.
the meanings of
words and phrases used herein are equally applicable to the
singular and plural forms of those terms where appropriate, and
references herein to the masculine, feminine or neuter gender
include each other gender unless the context indicates
otherwise;
b.
the word
"dollar" or the symbol "$" refers to the legal tender of the United
States of America;
c.
the words
"herein," "hereof," "hereto," "hereunder" and similar words refer
to this Agreement; and
d.
the word
"knowledge" means, and words of similar import mean, actual
knowledge after reasonable inquiry; and
e.
the captions and
headings contained in this Agreement are for convenience of
reference only and shall not expand, limit or otherwise affect the
provisions of this Agreement or the interpretation or applicability
of such provisions.
ARTICLE II. The Closing; Sale and
Purchase of the Purchased Assets
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The Closing
. The consummation of the
sale and purchase of the Purchased Assets (the "Closing") shall
take place at the offices of Eckert Seamans Cherin & Mellott,
LLC, 600 Grant Street, 44 th Floor, Pittsburgh,
Pennsylvania 15219, commencing at 10:00 a.m. (prevailing eastern
time) as soon as practicable (and in any event not later than three
Business Days) after the date on which all of the conditions set
forth in Article V hereof have been satisfied or waived in writing,
unless a different place, time and/or date is mutually agreed upon
by the Parties. The purchase and sale of the Purchased Assets shall
be effective as of 12:01 a.m. (prevailing eastern time) on the day
on which the Closing occurs (the "Closing Date").
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Sale and Purchase of the
Purchased Assets . Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, the Seller
shall sell, assign, convey, transfer and deliver to the Buyer (by
the execution and delivery of the Conveyance Documents to the
Buyer), and the Buyer shall purchase from the Seller, all of the
Purchased Assets free and clear of all Liens other than Permitted
Encumbrances. To the extent that the Seller's rights under any
Assumed Contract, permit, franchise, claim or asset included in the
Purchased Assets may not be assigned without the consent of another
Person which consent has not been obtained (each, a "Non-Assignable
Asset"), this Agreement shall not constitute an agreement to assign
the same if an attempted assignment would constitute a breach
thereof or be unlawful, and Seller shall use its commercially
reasonable efforts to obtain prior to the Closing any such required
consents with respect to any such Assumed Contract, permit,
franchise, claim or asset. The Parties agree that if any consent to
an assignment of any such Non-Assignable Asset shall not be
obtained or if any attempted assignment would be ineffective or
would impair Buyer's rights so that Buyer would not acquire the
benefit of all such rights, Seller, to the maximum extent permitted
by law, shall act as Buyer's agent in order to obtain for it the
benefits thereunder and shall cooperate, to the maximum extent
permitted by law and the Non-Assignable Asset, with Buyer in any
other reasonable arrangement designed to provide such benefits to
Buyer (including entering into an equivalent alternate
arrangement). The Parties shall cooperate and shall use their
commercially reasonable efforts after the Closing to obtain an
assignment of each such Non-Assignable Asset to Buyer.
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Consideration
. In consideration of the
sale, assignment, conveyance, transfer and delivery by the Seller
to the Buyer of the Purchased Assets and the performance and
compliance by the Seller of all covenants and agreements to be
performed and complied with by the Seller pursuant to this
Agreement, the Buyer shall (a) assume the Assumed Obligations and
(b) pay to the Seller an amount, in cash, equal to Forty-One
Million Dollars ($41,000,000.00) (the "Initial Purchase Price")
less Two Million Dollars ($2,000,000.0) (the "Escrow Funds") to be
deposited in an interest bearing escrow account with National City
Bank, N.A. (the "Escrow Agent") pursuant to a mutually acceptable
Escrow Agreement in substantially the form attached hereto as
Exhibit E (the "Escrow Agreement"), Two Million Dollars
($2,000,000.00) of which is established for the purpose of
satisfying claims, if any, of Buyer under Article VI hereof (the
"Indemnity Escrow") and Zero Dollars ($0.00) of which is
established for the purpose of satisfying the obligations, if any,
of the Seller in connection with the Post-Closing Adjustment, as
hereinafter defined (the "Adjustment Escrow"). The Initial Purchase
Price, as adjusted pursuant to the Post-Closing Adjustment, shall
be the "Purchase Price."
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Post-Closing
Adjustment . As
soon as is practicable, but in any event not later than forty-five
(45) days following the Closing, Buyer shall prepare (with Seller's
reasonable assistance and input) and cause to be delivered to
Seller a Closing Date statement containing Buyer's calculation of
Normalized Net Working Capital (as hereinafter defined) (the
"Closing Statement"), which Closing Statement shall include, but
not be limited to, the following, all of which shall be prepared
consistently with the November 30, 2003 unaudited balance sheet of
the Seller (the "Initial Balance Sheet"):
(a) a schedule of Seller's Inventory as
of the Closing Date;
b) schedule of Seller's accounts
payable as of the Closing Date;
c) a schedule of Seller's
Accounts Receivable as of the Closing Date; and
d) a balance sheet of Seller as
at the Closing Date (such balance sheet, the "Closing Balance
Sheet") prepared in a manner consistent with generally accepted
accounting principles, consistently applied, with inventories,
accounts payable and accounts receivable reflected on such Closing
Balance Sheet taken from the schedules prepared pursuant to
subparagraphs (a), (b) and (c) above.
The term
"Normalized Net Working Capital" shall mean the Seller's net
accounts receivable plus net inventory less trade payables, accrued
employee payroll deductions and all accrued payroll, vacation pay,
and other obligations to Retained Employees which are Assumed
Obligations, determined as of the Closing Date in the same manner
and using the same methodology as in the determination of
Normalized Net Working Capital based on the Company's Initial
Balance Sheet; provided, however, that the receivables reserve on
the Closing Balance Sheet will be increased by $250,520.91 and the
inventory reserve on the Closing Balance Sheet will be increased by
$636,725.07 and Normalized Net Working Capital shall be increased
by the amount, if any, by which other current liabilities on the
Closing Balance Sheet are less than $213,500 and decreased by the
amount, if any, by which other current liabilities on the Closing
Balance Sheet are more than $213,500.
Seller shall have thirty (30) days
following receipt of the Closing Statement to review the Closing
Statement and make any objections in writing to Buyer. If no
objection is received from Seller within such thirty (30) day time
period or if Seller notifies the Buyer that the Seller accepts the
Closing Statement as presented, Seller shall be deemed to have
accepted Buyer's calculation of Normalized Net Working Capital and
the Closing Balance Sheet, and such calculation of Normalized Net
Working Capital and the Closing Balance Sheet shall be final. If
Seller objects to the Closing Statement within such thirty (30) day
time period, Buyer and Seller shall use reasonable efforts to reach
agreement on any disputed items or amounts. If Buyer and Seller are
unable to reach such agreement within ten (10) days after Seller's
delivery of a written objection, they shall promptly thereafter
cause a nationally recognized firm of independent accountants
chosen by and mutually acceptable to Buyer and Seller (the
"Accounting Referee") to review the Initial Balance Sheet, the
Closing Statement, this Agreement as it pertains to the calculation
of Normalized Net Working Capital and the disputed items or amounts
for the purpose of determining the final normalized Net Working
Capital.
The Accounting Referee shall deliver to
Buyer and Seller, as promptly as practicable, but in no event later
than thirty (30) days after retention of the Accounting Referee, a
report setting forth the Accounting Referee's determination of the
final Normalized Net Working Capital and the Closing Balance Sheet.
Such report shall be final and binding upon Buyer and Seller and
shall constitute an arbitral award upon which a judgment may be
entered in any court having jurisdiction thereof. The cost of such
review and report shall be borne by the Party whose calculation of
the Normalized Net Working Capital was mathematically farthest from
the Accounting Referee's final calculation of the Normalized Net
Working Capital.
Within three (3) business days
following the final determination of the Normalized Net Working
Capital in accordance with this Section 2.4, a dollar for dollar
adjustment (the "Post-Closing Adjustment") shall be made to the
Purchase Price to reflect any difference between Eight Million Two
Hundred Ninety Thousand Nine Hundred Twelve Dollars
($8,290,912.00), which is the Seller's Normalized Net Working
Capital determined by the Parties based on the Initial Balance
Sheet, and the Normalized Net Working Capital as of the Closing
Date.
If Normalized Net Working Capital
exceeds Eight Million Two Hundred Ninety Thousand Nine Hundred
Twelve Dollars ($8,290,912.00) (the amount of such excess being
herein called the "Overage"), (a) the Adjustment Escrow shall be
released to the Seller and (b) the Buyer shall pay to the Seller an
amount equal to the Overage. If Normalized Net Working Capital is
less than Eight Million Two Hundred Ninety Thousand Nine Hundred
Twelve Dollars ($8,290,912.00) (the amount of such deficiency being
herein called the "Shortfall"), the Seller shall pay to the Buyer
an amount equal to the Shortfall; any Shortfall shall be satisfied
first out of the Adjustment Escrow, with any amount of the
Adjustment Escrow not necessary to satisfy the Shortfall to be
released to the Seller, and next, if the amount of the Adjustment
Escrow is not sufficient to satisfy the Shortfall, by direct
payment from the Seller to the Buyer.
The Post-Closing Adjustment shall be
payable within three Business Days after the final determination of
Normalized Net Working Capital in accordance with this Section 2.4
by wire transfer of immediately available funds.
If there is a Post-Closing Adjustment
pursuant to this Section 2.4, the allocation of the Purchase Price
under Section 2.7 shall also be adjusted accordingly.
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Method of
Payment . At the
Closing, the Buyer shall pay to the Seller the Initial Purchase
Price less the Escrow Funds in cash by wire transfer to an account
specified by the Seller by notice given to the Buyer not later than
two Business Days prior to the date of the Closing or, in the
absence of such notice, by a bank check payable to the order of the
Seller. The Post-Closing Adjustment, if any, shall be paid in the
manner set forth in Section 2.4 hereof.
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Actions at the
Closing . At the
Closing, the following shall take place:
a.
the Buyer shall
deliver to the Seller a certificate of the Buyer executed by
Buyer's President and Vice President stating that (i) all
representations and warranties made by the Buyer in Section 3.1
hereof are accurate, true and correct in all material respects as
of the Closing Date, and (ii) the Buyer has performed and complied
in all respects with all covenants and agreements to be performed
and complied with by the Buyer at or prior to the Closing
Date;
b.
the Seller shall
deliver to the Buyer a certificate of the Seller executed by
Seller's Chief Executive Officer and Director of Finance stating
that (i) all representations and warranties made by the Seller in
Section 3.2 hereof are accurate, true and correct in all material
respects as of the Closing Date, and (ii) the Seller has performed
and complied in all respects with all covenants and agreements to
be performed and complied with by the Seller at or prior to the
Closing Date;
(c) the Buyer shall
deliver to Seller a certificate of the Secretary of Buyer
certifying, as complete and accurate as of the Closing, attached
copies of the Charter Documents of Buyer, certifying and attaching
all requisite resolutions or actions of Buyer's board of directors
approving the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereunder and
certifying to the incumbency and signatures of the officers of
Seller executing this Agreement and any other document relating to
the transactions contemplated by this Agreement;
(d) the Seller shall
deliver to Buyer a certificate of the Secretary of Seller
certifying, as complete and accurate as of the Closing, attached
copies of the Charter Documents of Seller, certifying and attaching
all requisite resolutions or actions of Seller's board of managers
and members approving the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereunder and
certifying to the incumbency and signatures of the officers of
Seller executing this Agreement and any other document relating to
the transactions contemplated by this Agreement;
(e) the Buyer shall
deliver to the Seller an opinion of Armstrong Teasdale LLP, counsel
to the Buyer, substantially in the form of Exhibit C
hereto;
(f) the Seller shall
deliver to the Buyer an opinion of Eckert Seamans Cherin &
Mellott, LLC, counsel to the Seller, substantially in the form of
Exhibit D hereto;
(g) the Seller and the
Buyer shall execute and deliver the Bill of Sale, Assignment and
Assumption Agreement;
(h) the Seller and the
Buyer shall execute and deliver the Lease Assignment;
(i) the Seller and the
Buyer shall execute and deliver the Escrow Agreement;
(j) the Buyer shall
enter into employment agreements, in form and substance
satisfactory to Buyer, executed by each of Teresa Huber, Melanie
Keenan, Gregg Mozdy and Bruce Darr and an agreement with Ty
Eggemeyer providing for reasonable consultation for a period not
exceeding twelve (12) months;
(k) the Seller shall
execute and deliver all other Conveyance Documents and, except with
respect to the Non-Assignable Assets, deliver evidence of all
consents or authorizations necessary to convey the Purchased
Assets;
(l) the Buyer shall pay
the Initial Purchase Price less the Escrow Funds to the Seller in
the manner specified in Section 2.3 hereof;
(m) the Buyer, if it so
elects, shall be authorized to file UCC Financing Statements with
the office of the Secretary of State of the State of Delaware with
respect to the Purchased Assets;
(n) the Seller shall
notify all account debtors under the Purchased Accounts Receivables
to make all payments owing thereunder to the Buyer, which notice
shall be in the form provided by the Buyer to the
Seller;
(o) the Seller and
Buyer shall execute and deliver an assignment and assumption of
Seller's entire ownership interest in Pinnacle POS, in a form
reasonably acceptable to the Buyer;
(p) the Seller shall
execute and deliver the Trademark Assignment; and
(q) the Seller and the
Buyer shall execute and deliver an acknowledgement that the Closing
Conditions have been fulfilled to the satisfaction of the Seller
and the Buyer.
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Allocation of Purchase
Price . The
total Purchase Price shall be allocated among the Purchased Assets
in the manner set forth on Schedule 2.7 hereto which the
Parties acknowledge and agree has been (or will be) prepared in
accordance with Section 1060 of the Code and the regulations
thereunder. Each of the Seller and the Buyer agree to adhere to
such allocations for the purposes of all federal, state and local
tax returns filed by them after the date of the Closing, including
the determination by the Seller of taxable gain or loss on the sale
of the Purchased Assets hereunder and the determination by the
Buyer of its tax basis with respect to the Purchased Assets, and
agree to record the transactions contemplated hereby on their
respective books and records, and otherwise act, consistent with
such allocations. In any proceeding related to the determination of
any Tax, neither the Buyer nor any Seller shall contend that such
allocation is not correct.
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Excluded
Assets .
Anything in this Agreement to the contrary notwithstanding, the
Excluded Assets, and all related rights, liabilities and
obligations, are not part of the Transaction and shall remain the
property of, and be retained by, the Seller.
ARTICLE III. Representations and
Warranties
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Representations and
Warranties of the Buyer . Except as disclosed on the Disclosure
Schedule bearing a number corresponding to the applicable Section
of this Agreement and subject to the provisions of Section 6.4
hereof, the Buyer represents and warrants to the Seller that the
statements contained in this Section 3.1 are correct and complete
as of the date hereof and will be correct and complete as of the
Closing Date:
(a) Organization;
Power and Authority . The Buyer is a corporation duly organized
and validly existing under the laws of the State of Missouri and
has the full power and authority to carry on its
business.
a.
Due
Authorization .
This Agreement, and each other agreement, certificate and other
writing executed and delivered (or to be executed and delivered) by
the Buyer hereunder, and the taking by the Buyer of all actions to
be taken by it in connection with the transactions contemplated by
this Agreement, have been (or as of the Closing Date will have
been) duly authorized by the board of directors of the Buyer, and
no other proceedings on the part of the Buyer are necessary to
authorize the execution and delivery by the Buyer of this Agreement
and each other agreement, certificate and other writing executed
and delivered by the Buyer hereunder and the taking by the Buyer of
all actions to be taken by it in connection with the transactions
contemplated by this Agreement.
b.
Due Execution
and Delivery; Binding Effect . The Buyer has the requisite power and
authority to execute and deliver this Agreement, and each other
agreement, certificate and other writing executed and delivered (or
to be executed and delivered) by the Buyer hereunder, and to
perform fully its obligations hereunder and thereunder. This
Agreement, and each other agreement, certificate and other writing
executed and delivered (or to be executed and delivered) by the
Buyer hereunder, has been (or will be) duly executed and delivered
by the Buyer and is (and will be) the valid and binding obligation
of the Buyer enforceable against it in accordance with each of
their respective terms, except as such validity, binding effect and
enforceability may be limited or otherwise affected by applicable
bankruptcy, insolvency, reorganization, fraudulent transfer and
moratorium laws, and laws and related judicial doctrines of similar
application, from time to time in effect limiting or affecting
creditors' rights generally. The execution and delivery by the
Buyer of this Agreement, and each other agreement, certificate and
other writing executed and delivered (or to be executed and
delivered) by the Buyer hereunder, and the taking by the Buyer of
the actions to be taken by it in connection with the Transaction do
not and will not:
(i) constitute a breach or violation
of, or a default under (or an event which, with the giving of
notice, the passage of time or both, would constitute a default
under) any of the terms or conditions of the Buyer's Charter
Documents;
(ii) require the filing with, notice
to, or consent, authorization or approval of, any Governmental
Authority or any other Person except where the failure to make or
obtain such filings, notices, consents, authorizations or approvals
would not, individually or in the aggregate, reasonably be expected
to have a Buyer Material Adverse Effect; or
(iii) constitute a
breach or violation of, or a default under (or an event which, with
the giving of notice, the passage of time or both, would constitute
a default under) any indenture, mortgage, loan agreement, contract
or other instrument to which the Buyer is a party or by which its
properties are bound, or any applicable Legal Requirement by which
the Buyer or any of its properties is bound, except for
inconsequential breaches, violations or defaults that may exist and
which do not, individually or in the aggregate, in whole or in
part, impair the value of the Transaction to the Seller.
c.
Brokers,
Finders, Financial Advisors, Etc. No financial advisory fee, brokerage
fee, finder's fee, commission or similar fee is payable by the
Seller to any Person on account of this Agreement or the
Transaction based upon arrangements made by or on behalf of the
Buyer.
d.
Legal
Proceedings No
complaint, suit, action or judicial, regulatory or governmental
action, proceeding or investigation (each a "Legal Proceeding") is
pending, or, to the knowledge of the Buyer, threatened, against the
Buyer that challenges, or is reasonably expected to prevent, delay
or otherwise interfere with, the Transaction.
e.
Financing . The Buyer has, or will have at the
Closing, sufficient funds available to it in order to pay the
Initial Purchase Price in accordance with the terms of this
Agreement.
3.2 Representations and Warranties
of the Seller . Except as disclosed on the Disclosure Schedule
bearing a number corresponding to the applicable Section of this
Agreement and subject to the provisions of Section 6.4 hereof, the
Seller represents and warrants to the Buyer that the statements
contained in this Section 3.2 are correct and complete as of the
date hereof and will be correct and complete as of the Closing
Date.
a.
Organization;
Power and Authority . Each of the Seller and Pinnacle POS
is a limited liability company duly organized and validly existing
under the laws of the State of Delaware and has the full power and
authority to carry on its business. Each of the Seller and Pinnacle
POS is qualified or registered to conduct business and is in good
standing under the laws of each jurisdiction where such
qualification or registration is required, except where the failure
to be so qualified or registered would not reasonably be expected
to result in a Seller Material Adverse Effect.
b.
Due
Authorization .
This Agreement, and each other agreement, certificate and other
writing executed and delivered (or to be executed and delivered) by
the Seller hereunder, and the taking by the Seller of all actions
to be taken by it in connection with the transactions contemplated
by this Agreement, have been (or as of the Closing Date will have
been) duly authorized by the managers and by the members of the
Seller, and no other proceedings on the part of the Seller are
necessary to authorize the execution and delivery by the Seller of
this Agreement and each other agreement, certificate, and other
writing executed and delivered by the Seller hereunder and the
taking by the Seller of all actions to be taken by it in connection
with the transactions contemplated by this Agreement. Seller does
not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Authority
or any Person in order for the Parties to consummate the
transactions contemplated by this Agreement.
c.
Due Execution
and Delivery; Binding Effect . The Seller has the requisite power
and authority to enter into, execute and deliver this Agreement,
and each other agreement, certificate and other writing executed
and delivered (or to be executed and delivered) by the Seller
hereunder, and to perform fully its obligations hereunder and
thereunder. This Agreement, and each other agreement, certificate
and other writing executed and delivered (or to be executed and
delivered) by the Seller hereunder has been (or will be) duly
executed and delivered by the Seller and is (and will be) the valid
and binding obligation of the Seller enforceable against it in
accordance with each of their respective terms, except as such
validity, binding effect and enforceability may be limited or
otherwise affected by applicable bankruptcy, insolvency,
reorganization, fraudulent transfer and moratorium laws and laws
and related judicial doctrines of similar application from time to
time in effect limiting or affecting creditors' rights and remedies
generally. The execution and delivery by the Seller of this
Agreement, and each other agreement, certificate and other writing
executed and delivered (or to be executed and delivered) by the
Seller hereunder, and the taking by the Seller of the actions to be
taken by it in connection with the Transaction do not and will
not:
(i) constitute a breach or violation
of, or a default under (or an event which, with the giving of
notice, the passage of time or both, would constitute a default
under) any of the terms or conditions of the Seller's Charter
Documents;
(ii) require the filing with, notice
to, or consent, authorization or approval of, any Governmental
Authority or any other Person; or
(iii) constitute a
breach or violation of, or a default under (or an event which, with
the giving of notice, the passage of time or both, would constitute
a default under) any indenture, mortgage, loan agreement, contract
or other instrument to which the Seller is a party or by which its
properties are bound, or any Applicable Legal Requirement by which
the Seller, or any of its properties, is bound.
d.
Purchased
Assets . The
Seller has good and marketable title to, or holds valid leasehold
interests in, or licenses for, all of the Purchased Assets to be
sold, assigned, transferred and delivered by the Seller to the
Buyer, free and clear of all Liens other than Liens to be released
at or prior to the Closing and Permitted Encumbrances. All
properties and assets of the Seller that are material to the
Business are included in the Purchased Assets. All buildings,
machinery, equipment and other tangible assets used in the Business
and included in the Purchased Assets have been maintained in
accordance with normal industry practice, are in good operating
condition and repair, subject to normal wear and tear, and are
suitable for the purposes for which they are presently used by the
Seller.
e.
Operation of
the Business .
Since the Commencement Date, the Seller has operated the Business
in the ordinary course, and no event has occurred which would
reasonably be expected to have a Seller Material Adverse
Effect.
f.
Compliance . Except where failure to comply would
not result in Seller's inability to operate the Business as
currently conducted or a Seller Material Adverse Effect, the Seller
is in compliance with all Applicable Legal Requirements (including
all Environmental Laws) to which the Business and/or any of the
Purchased Assets is subject and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against Seller alleging any failure to
so comply of which the Seller has received notice.
g.
Customers,
Suppliers and Providers . Section 3.2(g) of the Disclosure
Schedule sets forth (i) a list of the ten largest customers (by
dollar volume) for whom the Seller directly or indirectly provided
products during fiscal year 2003 and (ii) a list of the ten largest
suppliers of goods and services to the Seller for fiscal year 2003
in terms of the dollar amount of purchases, including the name and
address of each such customer and supplier. No Person listed on
Section 3.2(g) of the Disclosure Schedule hereto has terminated,
cancelled or adversely curtailed its business relationship with the
Seller or, to the Seller's knowledge, threatened to do so, and the
Seller has not received any written or oral notice or other
communication that any such Person intends to cease or reduce, or
is considering ceasing or reducing, its business relationship with
the Seller. The Seller is not aware of any future material increase
in the amounts paid for the goods and services used by the Seller
in the Business.
h.
Employee
Matters .
Section 3.2(h) of the Disclosure Schedule contains a true and
complete list of the name, title, job description, length of
service, current location and base salary or hourly rate of each
employee of Seller, including employees on personal, military,
family, educational or medical leave, each employee receiving
sickness disability benefits or occupational, illness and injury
benefits and each employee on long-term disability, excluding
part-time and temporary employees (each an "Employee" and
collectively referred to as the "Employees"), as of the date of
this Agreement, together with a statement of the basis, amount and
nature of any other remuneration, whether in cash or kind, paid to
each such Employee during the current fiscal year or accrued for or
payable to each such Employee in the future, and the basis for
accrual and amount of all vacation and similar benefits to which
each such non-salaried Employee was entitled as of the date of this
Agreement.
With respect to
the Employees:
(i) Seller is not a party to or bound
by any employment agreement or any collective bargaining
agreement;
(ii) There is not
pending, or to the knowledge of Seller threatened, any strike,
walkout or other work stoppage or any union organizing effort
relating to Seller or its employees;
(iii) Seller is in
compliance with all Applicable Laws in all material respects with
respect to employment and employment practices, terms and
conditions of employment, and wages and hours, and there is no
complaint of unfair labor practice, employment discrimination or
unjust enrichment against Seller pending before the National Labor
Relations Board.
(iv) Seller has not
experienced any labor stoppage, concerted labor activity, or other
material labor difficulty during the last three years;
(v) No labor organization has been
certified or is currently negotiating as a bargaining
representative of an employee of Seller;
(vi) No current or
former employee of Seller has asserted a claim against Seller (of
which Seller has received notice) on account or for:
A. overtime pay, other than
overtime pay for the current payroll period;
B. wages or salary for any
period other than the current payroll period;
C. with respect to non-salaried
employees, vacation, time off or pay in lieu of vacation or time
off, or other than that earned with respect to the current fiscal
year; or
D. any violation of any law
relating to minimum wages or maximum hours of work; and
(ix) Seller has no
outstanding commitment or agreement to effect any general wage or
salary increase for any of its employees.
(x) Except for persons hired on a
short-term, temporary basis, none of the persons employed in
Seller's business is provided to the Seller under contract with a
third party.
(xi) Seller is not in
violation in any material respect of the Americans with
Disabilities Act of 1990 or any state law, regulation or order
relating to employment discrimination or occupational safety, nor
has Seller received any unresolved complaint from any Federal,
state or regulatory body alleging violations of any such laws or
regulations, nor is Seller implementing any orders or consent
decrees remedying any such prior violation.
(i) Intellectual Property . The
Seller owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property
necessary for the operation of the Business as presently conducted
and as presently proposed to be conducted. Each item of
Intellectual Property owned or used by the Seller during the twelve
(12) month period immediately prior to the Closing hereunder will
be owned or available for use by the Buyer on identical terms and
conditions (except as otherwise agreed by the Buyer) immediately
subsequent to the Closing hereunder. The Seller has taken all
necessary and desirable action to maintain and protect each item of
Intellectual Property that it owns or uses.
The Seller has not
interfered with, infringed upon, misappropriated, or otherwise
violated any Intellectual Property rights of third parties, and the
Seller has not received any charge, complaint, claim, demand, or
notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that the Seller
must license or refrain from using any Intellectual Property rights
of any third party). To the knowledge of the Seller, no third party
has interfered with, infringed upon, misappropriated, or otherwise
violated any Intellectual Property rights of the Seller. No Patent
has been or is now involved in any interference, reissue,
reexamination, invalidation or opposition proceeding and, to the
knowledge of Seller, no such action is threatened with respect to
any of the Patents. No Mark has been or is now involved in any
opposition, invalidation or cancellation and, to the knowledge of
Seller, no such action is threatened with respect to any of the
Marks. The conduct of the Business as currently conducted does not
violate or infringe in any way any proprietary right of any third
party.
The Seller is not, nor
will it be as a result of Seller's execution and delivery of this
Agreement or Seller's performance of its obligations under this
Agreement, in material breach of any license, sublicense or other
agreement relating to the Intellectual Property. The validity and
enforceability of the Intellectual Property and the registration
thereof will not be affected adversely as a result of the
consummation of the transactions contemplated by this
Agreement.
No former or present
employees, officers or directors of the Seller hold any right,
title or interest directly or indirectly, in whole or in part, in
or to any Intellectual Property.
A. Section
3.2(i)(A) of the Disclosure Schedule identifies each Patent and
identifies each license, agreement, or other permission which the
Seller has granted to any third party with respect to any of its
Intellectual Property (together with any exceptions). The Seller
has delivered to the Buyer correct and complete copies of all such
patents, registrations, applications, licenses, agreements, and
permissions (as amended to date) and has made available to the
Buyer correct and complete copies of all other written
documentation evidencing ownership and prosecution (if applicable)
of each such item. All of the issued Patents are currently
subsisting, unexpired, in proper form and enforceable, and to the
knowledge of Seller, are valid, and all renewal fees and other
maintenance fees which have become due on or prior to the effective
date of this Agreement have been paid.
B. Section
3.2(i)(B) of the Disclosure Schedule identifies each Mark used by
the Seller in connection with the Business. All of the registered
Marks and registered copyrights are currently valid, subsisting,
unexpired, in proper form and enforceable, and all renewal fees and
other maintenance fees which have become due on or prior to the
effective date of this Agreement have been paid.
C. Section
3.2(i)(C) of the Disclosure Schedule identifies each material Trade
Secret used by the Seller in connection with the Business and known
to the Seller to be a Trade Secret.
D. With respect
to each item of Intellectual Property required to be identified in
Schedules 3.2(i)(A), 3.2(i)(B) and 3.2(i)(C) of the Disclosure
Schedule, the Seller possess all right, title, and interest in and
to the item, free and clear of any Lien (other than Permitted
Encumbrances), the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge and no
action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or to the knowledge of the
Seller is threatened which challenges the legality, validity,
enforceability, use, or ownership of the item.
E. Section
3.2(i)(E) of the Disclosure Schedule identifies each item of
Intellectual Property that any third party owns and that the Seller
uses pursuant to license, sublicense, agreement, or permission. The
Seller has delivered to the Buyer 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 Section 3.2(i)(E) of the
Disclosure Schedule, the license, sublicense, agreement, or
permission covering the item is legal, valid, binding, enforceable,
and in full force and effect, the license, sublicense, agreement,
or permission will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms
(except as otherwise agreed to by the Buyer) following the
consummation of the transactions contemplated hereby, no party to
the license, sublicense, agreement, or permission is in breach or
default, and no event has occurred which with notice or lapse of
time would constitute a breach or default or permit termination,
modification, or acceleration thereunder.
F. To the
knowledge of Seller, the Intellectual Property is sufficient,
adequate and represents all intellectual property rights necessary
for the Seller to carry on its Business as presently conducted.
(j) Governmental Authorizations
. The Seller holds all Governmental Authorizations that are
required for the operation of the Business. All such Governmental
Authorizations are valid and in full force and effect. No claims or
notices have been received by the Seller alleging that the Seller
is not in compliance with the terms of any such Governmental
Authorizations and/or with all related Applicable Legal
Requirements.
(k) Legal Proceedings . No Legal
Proceeding is pending, or, to the knowledge of the Seller,
threatened, against the Seller that (i) challenges, or would
reasonably be expected to prevent, delay or otherwise interfere
with, the Transaction or (ii) that could have a Seller Material
Adverse Effect
(l) Brokers, Finders, Financial
Advisors, Etc . No financial advisory fee, brokerage fee,
finder's fee, commission or similar fee is payable by the Buyer to
any Person on account of this Agreement or the Transaction based
upon arrangements made by or on behalf of the Seller.
(m) Accounts Receivable . All of
the Purchased Accounts Receivable are valid Accounts
