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EXECUTION COPY ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

EXECUTION COPY ASSET PURCHASE AGREEMENT | Document Parties: MACROVISION CORP | Flexco Holding Company, Inc | Macrovision Corporation You are currently viewing:
This Asset Purchase Agreement involves

MACROVISION CORP | Flexco Holding Company, Inc | Macrovision Corporation

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Title: EXECUTION COPY ASSET PURCHASE AGREEMENT
Governing Law: Delaware     Date: 2/21/2008
Industry: Software and Programming     Law Firm: Heller Ehrman;Kirkland Ellis     Sector: Technology

EXECUTION COPY ASSET PURCHASE AGREEMENT, Parties: macrovision corp , flexco holding company  inc , macrovision corporation
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EXHIBIT 10.1

EXECUTION COPY

ASSET PURCHASE AGREEMENT

Dated as of February 13, 2008

By and Among

MACROVISION CORPORATION

and

FLEXCO HOLDING COMPANY, INC.

 


ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “ Agreement ”) is made and entered into as of February 13, 2008, by and among Macrovision Corporation, a Delaware corporation (“ Mars ”) and certain Affiliates of Mars to be identified by Mars to take part in the transaction (collectively with Mars, “ Sellers ” and each individually with Mars, a “ Seller ”) and Flexco Holding Company, Inc., a Delaware corporation (“ Pluto ”) and certain Affiliates of Pluto to be identified by Pluto to take part in this transaction (collectively with Pluto, “ Buyers ” and each individually with Pluto, a “ Buyer ”). Prior to the Closing, each of Mars and Pluto will inform the other of any of its Affiliates which will become a party to any Transaction Documents as of the Closing. Each of Mars and Pluto acknowledges and agrees that the other retains the right to have all of its obligations performed by, and all of its rights inure to the benefit of, its identified Affiliates; provided, however, that any such designation of Affiliates will not relieve such party of its obligations under the Transaction Documents, to the extent such identified Affiliates fail to perform such obligations. Each of Sellers and Buyers may hereafter be referred to as a “party” or collectively as “parties.”

RECITALS:

A. Seller is engaged, among other things, in the business of designing, manufacturing, marketing, selling and supporting its software business, which consists of entitlement management and software asset management solutions comprised of the FLEXnet segment and a suite of software installation and packaging solutions comprised of the Installer and the AdminStudio segments (the “ Business ”);

B. The Installer segment of the Business is comprised of: (i) the InstallShield Windows installation tool, (ii) the InstallAnywhere installation toolset, and (iii) the InstallShield Collaboration product; and the AdminStudio segment of the Business is comprised of: (i) the AdminStudio toolset, and (ii) the Workflow Manager application management system;

C. The FLEXnet segment of the Business is comprised of the FLEXnet Publisher, FLEXnet Operations, FLEXnet Delivery, FLEXnet Connect and FLEXnet Manager solutions;

D. Buyer is interested in purchasing, and Seller is interested in selling, the Business, including, without limitation, all of Seller’s right, title and interest in, to and under certain assets, properties and rights of the Business as set forth herein; and

E. The Parties desire that Seller sell, assign, transfer, convey and deliver to Buyer, and that Buyer purchase from Seller, the Purchased Assets (as defined below) that are owned by Seller, that Seller convey the rights in the Licensed Assets (as defined below), that Buyer convey the rights in the Licensed-Back Assets (as defined below), and that Buyer assume from Seller the Assumed Liabilities (as defined below), subject to the terms and conditions set forth in this Agreement (the “ Acquisition ”), and desire to enter into a Transitional Services Agreement in substantially the form attached hereto as Exhibit A (the “ Transitional Services Agreement ”).

 

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NOW, THEREFORE, in consideration of the mutual benefits to be derived and the representations and warranties, conditions and promises contained herein, and intending to be legally bound hereby, the Parties hereby agree as follows:

ARTICLE I

Purchase and Sale of the Assets;

Purchase Price; Possession

1.1 Assets, Liabilities and License Back.

(a) Purchased Assets . Upon the terms and subject to the conditions of this Agreement, as of the Closing, Buyer shall purchase from Seller, and Seller shall sell, assign, transfer, convey and deliver to Buyer, all of Seller’s right, title and interest in, to and under the assets (i) exclusively used in the operation of the Business or (ii) otherwise described on Exhibit B (collectively the “ Purchased Assets ”).

(b) Excluded Assets . Seller shall not sell, assign, transfer, convey or deliver to Buyer hereunder, and Buyer shall not purchase hereunder, any assets of Seller or Seller’s business of whatever nature whether presently in existence or arising hereafter, except for the Purchased Assets, and any such assets other than Purchased Assets, are herein referred to as “ Excluded Assets ”. However, Seller hereby grants Buyer certain rights to the Excluded Assets listed in Schedule 1.1(b) (the “ Licensed Assets ”) which rights are also described in Schedule 1.1(b). THE LICENSED ASSETS ARE LICENSED TO BUYER “AS IS” WITHOUT WARRANTY OF ANY KIND, AND SELLER DISCLAIMS ALL WARRANTIES PERTAINING THERETO, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

(c) Liabilities Assumed by Buyer . Upon the terms and subject to the conditions of this Agreement, and in reliance on the representations, warranties, covenants and agreements made by Seller herein, effective as of the Closing Date, Buyer shall assume and be obligated pursuant to this Agreement to pay when due, perform or discharge only the debts, claims, liabilities, obligations and expenses described below and on Schedule 1.1(c) (collectively, the “ Assumed Liabilities ”):

(i) (A) product liability for the Inventory; and (B) executory obligations arising from the Assumed Contracts which are to be performed after the Closing Date; provided, however, that Buyer shall not assume any (x) accrued legal costs or expenses related to any Excluded Liabilities, or (y) obligations arising from any Contracts attributable or relating to the Business, the rights to which are not, for any reason, assigned to Buyer as required pursuant to the terms of this Agreement;

(ii) Buyer’s share of Transfer Taxes in accordance with Section 1.3;

(iii) subject to Section 7.8, all Liabilities in connection with, arising under or pursuant to, the Seller Intellectual Property comprising a portion of the Purchased Assets, whether or not occurring prior to the Closing Date;

(iv) all Liabilities of Seller with respect to accrued vacation and severance, if any, of all the Retained Employees;

 

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(v) all Liabilities of Seller with respect to its office leases in Schaumburg, Illinois, Cheshire, England, and Maidenhead, England;

(vi) Liabilities of Seller to accept returns or to provide product warranty services with respect to customers of the Business, regardless of when the products or services associated with the Business were purchased; and

(vii) all current trade accounts payable, current accrued expenses and other current liabilities, in each case to the extent related to the Business arising in the ordinary course of business consistent with past practice and calculated in accordance with GAAP (the “ Accounts Payable ”).

Buyer shall indemnify Seller with respect to the Assumed Liabilities in accordance with Article VII. Seller shall retain (and thereafter pay, perform, discharge or otherwise satisfy in accordance with their respective terms, and indemnify Buyer with respect thereto in accordance with Article VII hereof), all other liabilities not specifically identified above and/or on Schedule 1.1(c) .

(d) Excluded Liabilities . Except as set forth in Section 1.1(c) or any other express provision of this Agreement, Buyer shall not assume or otherwise become obligated pursuant to this Agreement to pay when due, perform or discharge any debts, claims, liabilities, obligations, damages or expenses of Seller (whether known or unknown, contingent or absolute, or arising before, on or after the Closing Date), including, without limitation, any (i) liability for Taxes (other than Taxes that are otherwise expressly attributed to or assumed by Buyer pursuant to this Agreement); (ii) obligations under Contracts of Seller not constituting Assumed Contracts; (iii) payment of any amounts pursuant to retention, stay bonus or similar agreements entered into prior to the Closing by Seller in connection with or related to the transactions contemplated by this Agreement; (iv) obligations of Seller incurred in connection with Seller’s operation of business activities other than the Business; (v) obligations related to intellectual property infringement claims known to Seller prior to the Closing Date; (vi) obligations with respect to being a member or part of Seller’s control group or affiliated group, or by virtue of being owned or controlled by Seller, under ERISA, or with respect to discrimination, wrongful termination or other employee claims the underlying facts of which relate to the pre-Closing period; (vii) obligations with respect to formerly leased or owned real properties; (viii) obligations with respect to offsite disposal of hazardous substances; (ix) any liability or obligation of Seller arising out of or relating to the execution and delivery of this Agreement, including any claim for payment of fees and/or expenses as a broker or finder in connection with the origination, negotiation, execution or consummation of this Agreement based upon any alleged agreement between the claimant and Seller; (x) any of Seller’s liabilities or obligations for indebtedness other than Assumed Liabilities; (xi) any liability or obligation relating to any Excluded Asset; (xii) any accrued expenses (to the extent not included in the definition of Accounts Payable); and (xiii) obligations with respect to any Actions pending or threatened prior to the Closing Date (collectively, the “ Excluded Liabilities ”).

(e) License Back . Effective as of the Closing, upon the terms and subject to the conditions of this Agreement, Buyer grants to Seller a fully-paid, perpetual, irrevocable, world-wide, transferable, assignable, sublicensable, non-exclusive license to use the Purchased Assets set forth in Schedule 1.1(e) (the “ Licensed-Back Assets ”) without restriction outside the

 

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Business. For the avoidance of doubt, fields of use relating to: (i) the existing businesses of Seller other than the Business, as currently conducted, or as publicly disclosed to be contemplated to be conducted, and (ii) any of the existing businesses to be acquired in the acquisition of Gemstar-TV Guide International, Inc., both (i) and (ii), as publicly disclosed in Seller’s Form 8-K and Rule 425 filings with the Securities and Exchange Commission between December 1, 2007 and the date of this Agreement, shall not be considered to be in the field of the Business. THE LICENSED-BACK ASSETS ARE LICENSED TO SELLER “AS IS” WITHOUT WARRANTY OF ANY KIND, AND BUYER DISCLAIMS ALL WARRANTIES PERTAINING THERETO, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

1.2 Purchase Price and Payment Terms.

(a) The aggregate purchase price for the Purchased Assets and the rights granted to the Licensed Assets in Section 1.1(b) (the “ Cash Purchase Price ”) is $200,000,000 adjusted by the amount (if any) by which the Business’s Working Capital as shown on the Closing Statement (the “ Closing Working Capital ”) is more or less than $28,000,000 (not more than $20,000,000 of which will be cash at Buyer’s election not less than 10 days prior to the Closing). “ Working Capital ” means the net book value as of the Closing Date of (i) cash plus Accounts Receivable (as such term is defined in Exhibit B ) minus (ii) the Accounts Payable. Working Capital shall be calculated in the manner set forth on Schedule 1.2(a) .

(b) At the Closing, Buyer shall purchase from Seller the Purchased Assets and the rights to the Licensed Assets described in Section 1.1(b), and shall assume the Assumed Liabilities.

(c) At the Closing, Buyer shall deliver to Seller $200,000,000 in immediately available funds.

(d) Within ninety (90) days following the Closing Date, Buyer shall deliver to Seller a statement (in its final and binding form as determined below, the “ Closing Statement ”) setting forth the Closing Working Capital as of the close of business on the day before the Closing Date. The Closing Statement shall include all known adjustments required in a year-end closing of the books and shall be prepared in accordance with GAAP. Seller shall cooperate as reasonably requested in connection with the preparation of the Closing Statement. During the 30-day period immediately following Seller’s receipt of the Closing Statement, Seller shall be permitted to review Buyer’s working papers related to the preparation of the Closing Statement and determination of the Closing Working Capital. The Closing Statement shall become final and binding upon the parties thirty (30) days following Seller’s receipt thereof, unless Seller shall give written notice of its disagreement (a “ Notice of Disagreement ”) to Buyer prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature and dollar amount of any disagreement so asserted. If a timely Notice of Disagreement is received by Buyer, then the Closing Statement (as revised in accordance with clause (x) or (y) below) shall become final and binding upon the parties on the earliest of (x) the date the parties resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement or (y) the date all matters in dispute are finally resolved in writing by the Accounting Firm. During the

 

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twenty (20) days following delivery of a Notice of Disagreement, Buyer and Seller shall seek in good faith to resolve in writing any differences which they may have with respect to the matters specified in the Notice of Disagreement. Following delivery of a Notice of Disagreement, Buyer and its agents and representatives shall be permitted to review Seller’s and its representatives’ working papers relating to the Notice of Disagreement. If, at the end of the 20-day period referred to above, the matters in dispute have not been fully resolved, then the parties shall submit to a mutually agreed upon independent accounting firm (the “ Accounting Firm ”) for review and resolution of all matters (but only such matters) which remain in dispute, and the Accounting Firm shall make a final determination of the Closing Working Capital to the extent such amounts are in dispute, in accordance with the guidelines and procedures set forth in this Agreement. The parties will cooperate with the Accounting Firm during the term of its engagement. In resolving any matters in dispute, the Accounting Firm may not assign a value to any item in dispute greater than the greatest value for such item assigned by Buyer, on the one hand, or Seller, on the other hand, or less than the smallest value for such item assigned by Buyer, on the one hand, or Seller, on the other hand. The Accounting Firm’s determination will be based solely on presentations by Buyer and Seller which are in accordance with the guidelines and procedures set forth in this Agreement ( i.e. , not on the basis of an independent review). The Closing Statement and the determination of the Closing Working Capital shall become final and binding on the parties on the date the Accounting Firm delivers its final resolution in writing to the parties (which the Accounting Firm shall be instructed to deliver not more than forty-five (45) days following submission of such disputed matters). The fees and expenses of the Accounting Firm shall be shall be paid by the party determined by the Accounting Firm to be the non-prevailing party in connection with the dispute; provided , however , that if the Accounting Firm shall determine in its reasonable discretion that neither party shall be the non-prevailing party, then such fees and expenses shall be borne 50% by the Seller and 50% by the Buyer.

(e) If $200,000,000 is greater than the Cash Purchase Price, Seller shall, within three (3) business days after the Closing Statement becomes final and binding on the parties, make payment by wire transfer to Buyer, in immediately available funds the amount of such difference.

(f) If the Cash Purchase Price is greater than $200,000,000, Buyer shall, within three (3) business days after the Closing Statement becomes final and binding on the parties, make payment by wire transfer to Seller, in immediately available funds the amount of such difference.

1.3 Sales, Use and Transfer Taxes. To the extent that the Transfer Taxes do not exceed $1,000,000, Buyer and Seller shall each be responsible for one half of any sale or use, transfer, value added, real property gains, excise, stamp or other similar Taxes (“ Transfer Taxes ”) imposed by reason of the transfer of the Purchased Assets, the license rights granted in Section 1.1(b) and the Assumed Liabilities provided hereunder and any deficiency, interest or penalty asserted with respect thereto. The party which is obligated by law to remit the Transfer Tax to the applicable governmental agency shall pay the entire Transfer Tax when due, and shall be reimbursed one-half of the Transfer Tax using the reimbursement procedures set forth in Section 4.7(f). Buyer and Seller agree to cooperate to the extent legally permitted to minimize any transfer taxes arising out of or relating to the transactions contemplated by this Agreement, including without limitation by Buyer accepting delivery of software assets located in the State

 

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of California by electronic transmission from Seller’s place of business to Buyer’s computers in accordance with California Sales and Use Tax Regulation 1502(f)(1)(D), with Seller having no obligation to deliver any tangible assets in connection with the delivery of such software. To the extent that the Transfer Taxes exceed $1,000,000 (such amount, the “ Excess Transfer Taxes ”), Seller shall be responsible for paying, shall promptly discharge when due, and shall reimburse, indemnify and hold harmless Buyer from, any such Excess Transfer Taxes imposed by reason of the transfer of the Purchased Assets and the Assumed Liabilities provided hereunder and any deficiency, interest or penalty asserted with respect thereto.

1.4 Transfer of Purchased Assets and Assumed Liabilities. The Purchased Assets shall be sold, conveyed, transferred, assigned and delivered, and the Assumed Liabilities shall be assumed, pursuant to transfer and assumption agreements, deeds, endorsements, consents or other instruments in such form as is necessary to effect a conveyance of good right, title and interest in, to and under the Purchased Assets and an assumption of the Assumed Liabilities in the jurisdictions in which such transfers are to be made, and which shall be satisfactory to the Buyer and the Seller, to be executed and delivered (upon the terms and subject to the conditions hereof) on the Closing Date by the Seller and/or its applicable subsidiaries and the Buyer.

1.5 Procedures for Assets and Contracts Not Transferable. Notwithstanding anything to the contrary contained in this Agreement, to the extent that the sale, conveyance, transfer, assignment or delivery or attempted sale, conveyance, transfer, assignment or delivery to the Buyer of any Purchased Asset is prohibited by applicable law or would require any governmental or third-party authorizations, approvals, consents or waivers (collectively, “ Consents ”) or would constitute a breach or would in any way adversely affect the rights of the Buyer to any Purchased Asset, each of the Seller and the Buyer shall use its, and shall cause its subsidiaries and Affiliates to use their respective, commercially reasonable efforts to obtain such Consents prior to the Closing and if any such Consents shall not have been obtained prior to the Closing, this Agreement shall not constitute an agreement to sell, convey, transfer, assign or deliver (or a sale, conveyance, transfer, assignment or delivery of) such Purchased Asset if any of the foregoing would constitute a breach of applicable Law or the rights of any third party; provided, however, that, subject to the satisfaction or waiver of the conditions set forth in this Agreement, the Closing shall occur notwithstanding the foregoing on the terms set forth herein; and provided further, however, that the Seller shall not be relieved of its obligation to sell, convey, transfer, assign and deliver, and the Buyer of its obligation to purchase, such Purchased Assets. Following the Closing, the parties shall use their commercially reasonable efforts and shall cooperate with each other to obtain promptly such Consents. If such Consent is obtained, Seller shall, and shall cause its subsidiaries and Affiliates to, promptly convey, transfer, assign and deliver, or cause to be conveyed, transferred, assigned and delivered, such Purchased Asset to the Buyer. The provisions of this Section 1.5 shall not in any way limit the Buyer’s rights under this Agreement in the event that the conditions to Closing are not satisfied.

1.6 Payments Post-Closing. If, following the Closing Date, the Seller or any of its subsidiaries receives any payment or other proceeds (including the benefit of a mistaken payment) (i) relating to any Purchased Assets, or (ii) otherwise relating to the conduct or operation of the Business after the Closing Date, the Seller shall, and shall cause its subsidiaries to, promptly remit to the Buyer the amount of any such payments to the extent relating to the Purchased Assets.

 

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ARTICLE II

Representations and Warranties of Seller

Seller represents and warrants to Buyer as follows, subject to such exceptions as are disclosed in a disclosure schedule supplied by Seller to Buyer (the “ Disclosure Schedule ”), which exceptions shall be deemed to be representations and warranties as if made hereunder, as of the date of this Agreement and as of the Closing Date. The Disclosure Schedule exceptions shall be arranged according to specific sections in this Article II and shall provide exceptions to, or otherwise qualify in reasonable detail, only the corresponding section in this Article II and any other section in this Article II where it is reasonably apparent that the disclosure would reasonably be expected to apply to such other section. For the avoidance of doubt, each of the representations and warranties set forth in this Article II shall be read as applying equally to each of the Sellers and all references herein to the “Seller” shall be read to include, as appropriate, each Seller.

2.1 Organization. Seller is a corporation, duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its formation and has the power and authority to conduct the Business as it is presently being conducted and to sell and convey the Purchased Assets to Buyer. With respect to the Business, Seller is duly qualified or licensed to do business and is in good standing as a foreign company in each of the jurisdictions in which Seller currently operates, and there are no other jurisdictions in which the conduct of its business or the ownership or lease of its assets requires such qualification under applicable law.

2.2 Authorization. The execution and delivery of this Agreement and each agreement, instrument, certificate and document being or to be executed and delivered by a Party pursuant to this Agreement (each a “ Transaction Agreement ”) by Seller and the performance of all obligations hereunder and thereunder have been duly authorized and no other action or approval is necessary for the execution, delivery or performance of this Agreement and each Transaction Agreement by Seller. Seller has the requisite corporate power and authority to execute and deliver this Agreement, each Transaction Agreement and such other agreements and instruments as are contemplated hereby. This Agreement and each Transaction Agreement has been duly executed and delivered by Seller and is a valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect, relating to or limiting creditors’ rights generally and (b) general principles of equity (whether considered in an action in equity or at law).

2.3 No Conflict. Except for the filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), neither the execution and delivery of this Agreement or any Transaction Agreement by Seller, nor the consummation of the transactions contemplated hereunder, will:

(a) except for such conflicts, breaches or defaults as would not (i) affect, in any material respect, Seller’s ability to convey the Purchased Assets or otherwise complete the transactions contemplated hereunder, or (ii) materially affect the Business or the Buyer’s ability

 

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to conduct the Business following the Closing, conflict with or result in a breach by Seller, or constitute default by Seller under, or create an event that, with the giving of notice or the lapse of time, or both, would be a default under or breach of, any of the terms, conditions or provisions of: (W) any material mortgage, lease, deed of trust, pledge, loan or credit agreement, license agreement, or any other material Contract to which any of the Purchased Assets is subject, (X) the Certificate of Incorporation or Bylaws of Seller, or (Y) any judgment, order, writ, injunction, decree or demand of any nation or any state, commonwealth, territory, possession or tribe and any political subdivision, courts, departments, commissions, boards, bureaus, agencies or other instrumentalities of any of the foregoing (a “ Governmental Entity ”) to which any of the Purchased Assets are subject;

(b) result in the creation or imposition of any material lien, mortgage, pledge, security interest, charge or encumbrance of any kind, whether voluntary or involuntary, (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest) (collectively, an “ Encumbrance ”) upon the Purchased Assets;

(c) require the consent, approval or authorization of, or declaration, filing or registration with, any Governmental Entity or other Person to be made or obtained by Seller in connection with the execution and delivery by Seller of this Agreement or any of the Transaction Agreements and the consummation of the transactions contemplated hereby; or

(d) subject to obtaining necessary consents, approvals and actions, making necessary filings and giving required notices, violate any provision of applicable law relating to the Business or the Purchased Assets (other than such conflicts, violations or breaches which would not, in any material respect, adversely affect (i) the validity or enforceability of this Agreement or any of the Transaction Agreements, or (ii) Seller’s ability to convey the Purchased Assets free and clear of any claims or Encumbrances or otherwise complete the transactions contemplated hereunder). As used in this Agreement, any reference to any fact, circumstance, event, effect or change having a “Material Adverse Effect” or a “material adverse change” means a fact, circumstance, event, effect or change that is materially adverse to the Business, or when used in reference to a party, the business or financial condition of such party and its subsidiaries, taken as a whole, but shall not include events or effects relating to or resulting from (A) changes in general economic or political conditions on the securities, credit or financial markets to the extent such changes do not have a materially disproportionate impact on the Business or such party and its subsidiaries, taken as a whole; (B) changes or developments in the industries in which the Business operates to the extent such changes or developments do not disproportionately impact the Business; (C) changes in law to the extent such changes do not disproportionately impact the Business or such party; (D) compliance with the terms of, or the taking of any actions required to be taken (other than the failure to perform a covenant or deliver the Purchased Assets) by the Agreement; (E) any acts of terrorism or war to the extent such acts do not disproportionately impact the Business or such party; (F) changes in generally accepted accounting principles or the interpretation thereof to the extent such changes do not disproportionately impact the Business or such party; (G) any litigation relating to the announcement, negotiation, execution or performance of this Agreement or the transactions contemplated hereby; and (H) any failure to meet internal or published projections, forecasts or revenue or earning predictions for any period (but, for the avoidance of doubt, not the underlying facts and circumstances).

 

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2.4 Judgments; Litigation. There is no (a) outstanding judgment, order, decree, award, stipulation or injunction of any Governmental Entity against Seller, the Purchased Assets or the Business which seeks to or is reasonably likely to have the effect of preventing Seller from conveying the Purchased Assets, or (b) action, suit, arbitration, hearing, inquiry, proceeding, complaint, charge or investigation, whether civil, criminal or administrative (“ Action ”), by or before any Governmental Entity or arbitrator or any appeal from any of the foregoing pending against Seller, the Purchased Assets or the Business which, if resolved adversely to Seller would be reasonably likely to impair Seller’s ability to convey the Purchased Assets or materially adversely affect the Business.

2.5 Intellectual Property and Proprietary Rights.

(a) For the purposes of this Agreement, “ Intellectual Property ” shall mean all worldwide (i) patents (including but not limited to continuations, continuations-in-part, divisionals, renewals, reissues, and extensions thereof) and inventions or discoveries (whether patentable or not and whether reduced to practice or not), (ii) works of authorship and any copyrights therein (including but not limited to databases and computer software, records and data, and all media on which any of the foregoing is recorded), (iii) trademarks, service marks, Internet domain names, URLs, logos, trade names and trade dress, brand names and other source indicators, and all goodwill related thereto, (iv) trade secrets and confidential information (including confidential ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer, sales prospect and supplier lists, pricing and cost information, and marketing plans and proposals), (v) all other intellectual property rights under any laws or international conventions throughout the world, and (vi) any registrations and applications for registration of any of the foregoing, including all renewals, reissues and extensions thereof.

(b) Except as described in Schedule 2.5(b) , to the Seller’s knowledge, Seller either has the exclusive right, title and interest in, or a valid and binding right under an Assumed Contract to use, all Intellectual Property used in the Business as currently conducted (collectively, the “ Seller Intellectual Property ”). Other than with respect to patents, the Licensed Assets, the Purchased Intellectual Property (as defined in Exhibit B ) and the Intellectual Property licensed pursuant to an Assumed Contract constitutes all of the Intellectual Property necessary to operate the Business in the manner currently conducted. To the Seller’s knowledge, the patents necessary to use the Licensed Assets, the patents constituting the Purchased Intellectual Property and the Intellectual Property licensed pursuant to an Assumed Contract together constitute all of the patents necessary to operate the Business in the manner currently conducted. Schedule 2.5(b) contains, to the extent included in the Purchased Assets and the Licensed Assets, an accurate (i) description of all patents, registered trademarks, registered trade names, registered Internet domain names and registered copyrights and all applications and registration statements therefor, (any such registered intellectual property rights being referred to herein as “ Registered Seller Proprietary Rights ”) including the jurisdictions in which each such Registered Seller Proprietary Right has been issued or registered or in which any application for such issuance or registration has been filed and the applicable registration or

 

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application numbers and dates, used in the operation of the Business, and (ii) list of all material licenses and other material agreements with third parties related to third party Intellectual Property used in the operation of the Business (the “ Third Party Licenses ”), other than commercially available off-the-shelf software licenses or non-exclusive customer agreements entered into in the ordinary course of the Business, indicating for each such Third Party License if it is not also an Assumed Contract (as defined in Exhibit B ). All registrations with Governmental Entities in respect of Registered Seller Proprietary Rights other than issued patents and, to the Seller’s knowledge, issued patents are valid and in full force and effect. Seller is not in default (or with the giving of notice or lapse of time or both, would be in default) in any material respect under any Contract involving Intellectual Property used in the Business, nor, to Seller’s knowledge, is any counterparty thereto. To the Seller’s knowledge, the Intellectual Property of the Business is not being infringed or misappropriated by any other Person. No cancellation, termination, expiration or abandonment of any of the registrations and applications in respect of Registered Seller Proprietary Rights (except natural expiration or termination at the end of the full possible term) is anticipated by Seller and Seller is not aware of any questions or challenges with respect to the patentability, validity of any claims of, or enforceability of any such registrations and applications. Seller has not received written notice that Seller is infringing or misappropriating any Intellectual Property of any other Person, and to Seller’s knowledge no claim is pending or has been made or asserted to such effect that has not been resolved.

(c) Seller has taken reasonable steps to protect and preserve the confidentiality of all Seller Intellectual Property not otherwise disclosed in published patents or patent applications or registered copyrights (“ Seller Confidential Information ”). Except as set forth on Schedule 2.5(c) , all use by and disclosure to employees or others of Seller Confidential Information has been pursuant to the terms of valid and binding written confidentiality and nonuse/restricted-use agreements or agreements that contain similar obligations.

(d) Except as set forth on Schedule 2.5(d) , each current and former employee and contractor of Seller who is or was involved in, or who has contributed to, the creation or development of any Seller Intellectual Property has executed and delivered (and to the Seller’s knowledge, is in compliance with) an agreement which provides a valid written assignment to Seller of all title and rights to all Seller Intellectual Property. No third party has “moral rights” or rights to terminate any assignment or license with respect thereto.

(e) To the Seller’s knowledge, all Software is free of all viruses, worms, trojan horses and other infections or harmful routines. Seller uses commercially available antivirus software with the intention of protecting the Business’s software products from becoming infected by viruses and other harmful code. “ Software ” means software (whether in source code or object code), programs, databases and related documentation, in any form (including Internet sites, Internet content and links) that is (i) material to the operation of the Business, including, but not limited to, that operated by Seller on its web sites or used by Seller in connection with processing customer’s orders, storing customer’s information, or storing or archiving data, or (ii) manufactured, distributed, sold, licensed or marketed by the Business.

(f) During the 36 month period prior to the Closing, Seller has not received any written notice (A) contesting the right of the Seller or any of its subsidiaries to use, exercise, sell, license, transfer or dispose of any Seller Intellectual Property or any products, processes or

 

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materials covered thereby in any manner or (B) challenging the ownership, validity or enforceability of any Seller Intellectual Property. No Seller Intellectual Property owned by Seller and, to the knowledge of Seller, no material in-licensed Intellectual Property that is incorporated into products or services of the Business (“ In-Licensed IP ”) is subject to any outstanding order, judgment, decree, stipulation or agreement related to or restricting in any manner the licensing, assignment, transfer, use or conveyance thereof by the Seller or any of its subsidiaries.

(g) During the 36 month period prior to the Closing, neither the Seller nor any of its subsidiaries has brought any actions or lawsuits alleging (A) infringement or misappropriation of any of the Seller Intellectual Property or (B) breach of any license, sublicense or other agreement authorizing another party to use any Seller Intellectual Property, and, to the knowledge of the Seller, there does not exist any facts which could currently form the basis of any such action or lawsuit. Neither the Seller nor any of its subsidiaries has entered into any agreement granting any third party the right to bring infringement or misappropriation actions with respect to, or otherwise to enforce rights with respect to, any of the Seller Intellectual Property.

(h) To the extent that any Seller Intellectual Property has been developed or created independently or jointly by an independent contractor or other third party for the Seller or any of its subsidiaries, the Seller or one of its subsidiaries has a written agreement with such independent contractor or third party and has thereby obtained ownership of, and is the exclusive owner of all such independent contractor’s or third party’s Intellectual Property in such work, material or invention by operation of law or valid assignment.

(i) Schedule 2.5(i) separately lists: (A) all In-Licensed IP incorporated by Seller into any currently marketed or distributed products or services of the Business (“ Products ”); (B) all Contracts pursuant to which Seller has granted a third party exclusive rights or “most favorable” pricing with respect to Products or the Intellectual Property of the Business; (C) all such licenses, sublicenses and other agreements that require the Seller or any of its subsidiaries to license, assign or otherwise grant rights to additions, modifications or improvements to material In-Licensed IP made by or for the Seller or any of its subsidiaries back to the licensor of any Third Party License; and (D) all licenses and other agreements entered into during the five (5) year period prior to the Closing pursuant to which a third party has been granted, with respect to Purchased Intellectual Property, rights to access, possess or use source code. The Seller has delivered or made available to the Buyer copies of all licenses, sublicenses and other agreements listed on Schedule 2.5(i) . The Seller and its subsidiaries are in compliance with all material terms and conditions of all such licenses, sublicenses, and other agreements, except where the failure to comply would not have a material adverse effect.

(j) No Software covered by or embodying any Seller Intellectual Property or Product has been or is being distributed, in whole or in part, or was used, or is being used in conjunction with any Public Software in a manner which would require that such software or Product (excluding the original Public Software) be disclosed or distributed in source code form or made available at no charge. “ Public Software ” means any software that contains, or is derived in any manner (in whole or in part) from, any software that is distributed as free software, open source software (e.g., Linux) or similar licensing or distribution models.

 

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(k) To the knowledge of Seller, the operation of the Business does not infringe or misappropriate any Intellectual Property of any third party, violate any right of any third party (including any right to privacy or publicity), or constitute unfair competition or trade practices under the Laws of any jurisdiction, nor has Seller received notice from a third party alleging any of the foregoing with regard to the Business.

(l) The consummation of the transactions contemplated by this Agreement will neither violate nor result in a breach, modification, cancellation, termination, suspension of any material Contracts relating to Seller Intellectual Property or relating to In-Licensed IP; or any acceleration of or increase in, or loss of, any payments or benefits thereunder.

2.6 Employees and Independent Contractors; Benefit Plans.

(a) Schedule 2.6(a) contains a true and complete list, as of February 12, 2008 of all employees employed in the Business (the “ Employees ”), including, to the extent applicable, each Employee’s (i) name, (ii) title, wage, salary, and target bonus, (iii) principal location of employment, and (iv) date of hire by Seller. Schedule 2.6(a) also contains a true and complete list of all Employees who are as of such date on a short- or long-term disability leave or other leave of absence (but not including vacation).

(b) Schedule 2.6(b) contains a true and complete list, as of December 31, 2007, of all consultants and other independent contractors who are providing material services to the Business (the “ Independent Contractors ”), including (i) each Independent Contractor’s name, (ii) the type of services being provided by each Independent Contractor, (iii) the principal location where services are provided by each Independent Contractor and (iv) date when each Independent Contractor was retained by Seller. Copies of all Contracts relating to Independent Contractors used in the Business have been provided to Buyer.

(c) (i) Seller is not a party to any collective bargaining agreement or other labor contract applicable to any Employee, (ii) to the Seller’s knowledge, no union has bargaining rights with respect to any Employee and there are no threatened or apparent union organizing activities involving any Employee, (iii) there are no strikes, slowdowns or work stoppages pending or, to the Seller’s knowledge, threatened between Seller and an Employee, and (iv) to the Seller’s knowledge, there are no unfair labor practice complaints involving an Employee pending against Seller. The Seller shall be responsible for providing continuation coverage to the extent required by Section 4980B of the Code or similar state law (“ COBRA ”) to employees (other than Retained Employees), and other qualified beneficiaries under COBRA with respect to such employees, who have a COBRA qualifying event (due to termination of employment with the Seller or otherwise) prior to or in connection with the transactions contemplated by this Agreement. Except as required by Law, neither the Buyer nor any of its Affiliates shall be responsible for the failure of the Seller to comply with any of the requirements of COBRA applicable to employees who are not Retained Employees (as defined in Section 4.5), including applicable notice requirements.

(d) Except as set forth on Schedule 2.6(d) , no “employee benefit plan” (as defined in Section 3(3) of ERISA) and each other benefit plan, program, agreement or arrangement maintained, sponsored or contributed or required to be contributed to by Seller in

 

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connection with the Business or with respect to which Seller, in connection with the Business, has or could have any liability or obligation (each, a “ Benefit Plan ”) that provides health and welfare benefits that exceed the type and/or level of benefits required by applicable Law or Governmental Authority is maintained outside the jurisdiction of the United States, or covers any Employee residing or working outside the United States (any such Benefit Plan, a “ Foreign Benefit Plan ”). With respect to any Foreign Benefit Plans, (A) all such Foreign Benefit Plans have been established, maintained and administered in compliance in all material respects with their terms and all applicable statutes, laws, ordinances, rules, orders, decrees, judgments, writs, and regulations of any controlling Governmental Authority, (B) all Foreign Benefit Plans that are required to be funded are funded to the full extent required by Law, and with respect to all other Foreign Benefit Plans, adequate reserves therefor have been established on the Business Balance Sheet, and (C) no liability or obligation of Seller or its subsidiaries exists with respect to such Foreign Benefit Plans that will as a matter of Law become a Liability of Buyer or its Affiliates.

(e) Seller does not maintain, sponsor, contribute to, or have any current or potential liability or obligation under or with respect to: (i) any “multiemployer plan” (as defined in Section 3(37) of ERISA); (ii) any “defined benefit plan” (as defined in Section 3(35) of ERISA); (iii) any “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA); or (iv) any “multiple employer plan” within the meaning of Section 210 of ERISA or Section 413(c) of the Code. Seller does not have any current or potential liability or obligation on account of at any time being considered a single employer under Section 414 of the Code with any other Person.

2.7 Financial Statements; Absence of Liabilities. As of the Closing, Schedule 2.7 of the Disclosure Schedule shall contain a true and complete copy of the unaudited balance sheet for the Business and the related unaudited consolidated statement of income for the Business as of and for the twelve month period ended December 31, 2007 (collectively, the “ Business Financial Statements ”). The unaudited December 31, 2007 balance sheet is referred to herein as the “ Business Balance Sheet .” The Business Financial Statements present fairly, in all material respects, the financial condition and results of operations of the Business, and the income statement fairly presents the income of the Purchased Assets, as of their respective dates and for the respective periods indicated therein. The Business Financial Statements were prepared in good faith and derived from the Seller’s financial statements. The Seller is not aware of, is not contemplating, nor has it been notified, in writing or orally, by its auditors or by the Securities and Exchange Commission (the “ SEC ”) of any fact or circumstance, or proposed or potential adjustment, that might require an adjustment to the Seller financial statements which would, if implemented, materially and adversely affect the Business Financial Statements. All of the Liabilities reflected on the Business Balance Sheet are related to the Business and arose out of or were incurred in the ordinary course of business. Except as set forth on Schedule 2.7 , Seller does not have and will not have any obligation or liability relating to the Business or the Purchased Assets (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due and regardless of when or by whom asserted) arising out of any transaction entered at or prior to the date hereof, or any action or inaction at or prior to the date hereof, or any state of facts existing at or prior to the date hereof, other than (a) liabilities reflected on the Business Financial Statements, (b) liabilities and obligations which have arisen after the date of the Business Financial Statements in the ordinary course of business (none of which is a liability for breach of contract, breach of warranty, tort, infringement, violation of law, claim or lawsuit),

 

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(c) obligations under contracts and commitments described on Schedule 2.20 or under contracts and commitments entered into in the ordinary course of business consistent with past practice which are not required to be disclosed on such Schedule pursuant to Section 2.20 below (but not liabilities for any breach of any such contract or commitment occurring on or prior to the Closing Date), and (d) other liabilities and obligations expressly disclosed in the other Schedules referred to in this Article II.

2.8 Changes. Since January 1, 2007, except as contemplated by or as disclosed in this Agreement, Seller has conducted the Business only in the ordinary course and in a manner consistent with past practice and, since such date, (a) there has not been any material adverse change in the Business or its financial results, (b) Seller has not taken or committed to take any of the actions specified in Section 4.3 and (c) Seller has continued to provide the business with all financial and operational support necessary to continue to operate in the ordinary course and in a manner consistent with past practice.

2.9 Assumed Contracts. Each Assumed Contract that is currently in effect and material to the Business (materiality for the purpose of this sentence being determined based on the Business as of December 31, 2007) (i) is in full force and effect and constitutes a legal, valid and binding agreement of Seller, enforceable in accordance with its terms, and to the Seller’s knowledge, of each other party thereto, (ii) upon consummation of the transactions contemplated by this Agreement, shall continue in full force and effect without penalty or other adverse consequence subject to the need to obtain the consents and approvals set forth in Schedule 2.3 of the Disclosure Schedule, and (iii) neither Seller nor, to the Seller’s knowledge, any other party to such Assumed Contract, is in material violation or breach of or default under such Assumed Contract (or with notice or lapse of time or both, would be in violation or breach of or default under such Assumed Contract in any material respect). To the Seller’s knowledge, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or could reasonably be expected to, (i) result in a material breach or violation of, or default under, any such Assumed Contract, (ii) give any entity the right to declare a default, seek damages or exercise any other remedy under any such Assumed Contract, (iii) give any entity the right to accelerate the maturity or performance of any such Assumed Contract or (iv) give any entity the right to cancel, terminate or modify any such Assumed Contract.

2.10 Compliance with Laws. Seller is not in violation of or in default in any material respect under any foreign or domestic (Federal, state or local) law, statute, treaty, rule, regulation, ordinance, franchise, permit, concession, license, order, decree, consent decree or similar instrument or determination or award (collectively a “ Law ”) applicable to it by which any of the Purchased Assets or the Business is bound or affected.

2.11 Taxes.

(a) The Purchased Assets are not subject to any liens for Taxes, except liens for Taxes not yet due, and Buyer will not become directly or indirectly liable for, and no lien, claim or encumbrance will be placed upon the Purchased Assets with respect to, (i) any Taxes attributable to the ownership or use of the Purchased Assets with respect to periods prior to and including the Closing Date or (ii) any other Taxes attributable to the actions or activities of the Seller on or prior to the Closing Date, in each case other than Transfer Taxes as provided in Section 1.3.

 

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(b) “ Tax ” or, collectively, “ Taxes ” shall mean (i) any and all federal, state, local, or non-US income, sales and use taxes, real and personal property (tangible and intangible) taxes, gross receipts taxes, documentary transfer taxes, excise taxes, employment taxes, withholding taxes, unemployment insurance contributions, value added taxes and any other taxes or governmental charges of any kind, however denominated, including any interest, penalties and additions to tax in respect thereto, for which Buyer could become liable as a result of acquiring the Business, the Purchased Assets, or the Assumed Liabilities or which could result in a lien on or charge against the Purchased Assets, and (ii) any liability for the payment of any amounts of the type described in clause (i) as a result of any express or implied obligation to indemnify any other person as a result of any obligations under any agreements or arrangements with any other person with respect to such amounts. “ Tax Returns ” means any return or report in respect of Taxes.

(c) All Tax Returns required to be filed in connection with the Business have been timely filed. All Taxes required to be paid (whether or not shown to be due on such Tax Returns), the non-payment of which would result in an Encumbrance on any Purchased Asset, have been timely paid. All such Tax Returns are true, correct and complete in all material respects. Except as otherwise disclosed on Schedule 2.11(c) , there is no proceeding, investigation, audit or examination proposed in writing or currently ongoing in connection with the Business or the Purchased Assets in respect of any Tax. Except as otherwise disclosed on Schedule 2.11(c) , no deficiencies for any Taxes have been proposed, asserted or assessed in connection with the Business or the Purchased Assets. Neither the Seller nor any of its subsidiaries is currently the beneficiary of any extension of time within which to pay any Tax, the non-payment of which would result in an Encumbrance on any Purchased Asset, or to file any Tax Return with respect to such Taxes. Neither the Seller nor any of its subsidiaries has waived any statute of limitations in respect of Taxes, the non-payment of which would result in an Encumbrance on any Purchased Asset, or agreed to any extension of time with respect to a Tax assessment or deficiency, the non-payment of which would result in an Encumbrance on any Purchased Asset. All Taxes required to have been withheld in connection with the Business have been withheld and paid over to the proper Governmental Authority. To the knowledge of the Seller, no claim has ever been made by a Governmental Entity in a jurisdiction where the Seller does not file Tax Returns that the Seller is or may be subject to imposition of Taxes by that jurisdiction.

2.12 Brokers. Except for Cowen and Company, LLC, whose fees, commissions and expenses are the sole responsibility of Seller, all negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by Seller directly with Buyer without the intervention of any Person on behalf of Seller in such manner as to give rise to any valid claim by any Person against Buyer for a finder’s fee, brokerage commission or similar payment.

2.13 Purchased Assets. The Purchased Assets together with the Licensed Assets constitute all of the assets related to, belonging to, used in or held for use in the Business. Seller or its applicable subsidiaries have good and valid title to, or in the case of any leased Purchased Assets have a valid leasehold interest in, all of the Purchased Assets and Licensed Assets, and at

 

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the Closing will transfer and deliver to Buyer good and valid title in, to and under the Purchased Assets, free and clear of all Encumbrances except the Buyer Field of Use Restrictions (as described in Schedule 1.1(b)) contained in the license granted in Section 1.1(b). Except for the Purchased Assets, Licensed Assets or as set forth on Schedule 2.13(i) , there are no assets which either are reflected in the Business Balance Sheet or are otherwise used primarily in the operation of the Business.

2.14 Customers. Listed in Schedule 2.14 are the names of the fifteen most significant customers (by revenue) of each of the major solution segments of the Business for the twelve-month period ended December 31, 2007 (“ Significant Customers ”). Seller has not received any written notice and has no reason to believe that any Significant Customer has ceased, or will cease, to use the products, equipment, goods or services of the Business or has substantially reduced, or will substantially reduce, the use of such products, equipment, goods or services.

2.15 Suppliers. Schedule 2.15 contains a complete list of each of the ten most significant suppliers of raw materials, supplies, merchandise, services and other goods for the Business for the twelve-month period ended December 31, 2007 (“ Significant Suppliers ”) and the amount for which each such Significant Supplier invoiced Seller during such period. Seller has not received any notice and has no reason to believe that any Significant Supplier will not sell raw materials, supplies, merchandise, services and other goods to the Business at any time after the Closing Date on terms and conditions similar to those imposed on current sales to the Business, subject only to general and customary price increases.

2.16 Legal Proceedings. Schedule 2.16 of the Disclosure Schedule sets forth, as of the date hereof, all proceedings pending or, to the knowledge of the Seller, threatened against, the Seller or any of its subsidiaries involving the Business or any of the Purchased Assets or the Assumed Liabilities or challenging the validity of this Agreement or any of the transactions contemplated hereby. Neither the Seller nor any of its subsidiaries nor any of their respective properties is or are subject to any order affecting or involving the Business, the Purchased Assets or the Assumed Liabilities, except for those that, individually or in the aggregate, would not reasonably be expected to interfere in any material respect with the conduct of the Business. To the knowledge of the Seller, there are no formal or informal SEC inquiries or investigations, other governmental inquiries or investigations or internal investigations or material whistle-blower complaints pending or threatened exclusively relating to or involving the Business, the Purchased Assets or the Assumed Liabilities.

2.17 Licenses and Permits; Compliance with Laws. Except as, individually or in the aggregate, has not and would not reasonably be expected to interfere in any material respect with the conduct of the Business:

(i) the Seller or a subsidiary owns or possesses all material licenses and permits (“ Licenses and Permits ”), and has made all filings, applications and registrations with all Governmental Authorities, and all such Licenses and Permits are in full force and effect;

(ii) no loss of any such material Licenses and Permits is pending in any proceeding or, to the knowledge of the Seller, has been threatened by a Governmental Authority, except for normal expirations in accordance with the terms thereof or applicable Law and all such material Licenses and Permits may be transferred to the Buyer or its subsidiaries;

 

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(iii) the Business has been operated in material compliance with (A) all terms and conditions of the Licenses and Permits and (B) all Laws applicable to the operation of the Business and ownership or use of the Purchased Assets, and neither the Seller nor any of its subsidiaries has received any written notice of any pending proceeding alleging facts which, if true, would constitute a failure to comply with either (A) or (B) of this Section 2.17(iii); and

(iv) there are no (A) unresolved violations or exceptions noted by any Governmental Authority in any report, comment letter or other written statement relating to or based on any examinations related to the Business or the Purchased Assets, or (B) written agreements, memoranda of understanding or commitment letters or similar undertakings to any Governmental Authority related to the Business or the Purchased Assets, to which the Seller or its subsidiaries is a party, or orders from, or any resolution adopted at the request of, any Governmental Authority related to the Business or the Purchased Assets.

2.18 Properties.

(a) Schedule 2.18(a) contains a complete and accurate list as of the date hereof of (A) all real property leased or subleased by Seller at which any ongoing material portion of the Business is conducted or at which any Employees are located and (B) the agreements under which such real property is leased (the “ Leases ”). Except as, individually or in the aggregate, has not interfered, and would not reasonably be expected to interfere in any material respect with the conduct of the Business, (A) each Lease has been executed and is in full force and effect, (B) Seller is not in breach or default in any respect under any such Lease, and, to the knowledge of Seller, no event has occurred which, with notice or lapse of time or both, would constitute such a material breach or default of such Lease, and (C) to the knowledge of Seller, no party to such Lease is in breach or default under such Lease or has repudiated any material provision thereof.

(b) All of the Furniture, Fixtures and Equipment and other tangible assets included in the Purchased Assets have been maintained in accordance with normal industry practice and are otherwise suitable for the purposes for which they are currently used.

2.19 Books and Records. The Books and Records are complete and correct in all material respects, have been maintained in accordance with good practice, and reflect the basis for the financial position and results of operations of the Business as set forth on the Business Financial Statements.

2.20 Certain Contracts. Neither the Seller nor any of its subsidiaries is a party to or bound by any Contract relating to th


 
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