Exhibit 10.33
SHARE PURCHASE AND ASSET TRANSFER
AGREEMENT
By and Among
IHS ENERGY GROUP,
INC.
As Purchaser,
IHS ENERGY INNOVATIONS,
INC.
and
LUNA INNOVATIONS
INCORPORATED
Kent A.
Murphy
Kenneth D.
Ferris
Roberta Denise
Couch
Walter Daub
Robert L.
Martinet
Michael F.
Gunther
Robert Harman
As Sellers
Dated October 1,
2003
EXECUTION COPY
SHARE PURCHASE AND ASSET TRANSFER
AGREEMENT
THIS SHARE PURCHASE AND ASSET
TRANSFER AGREEMENT (this
“ Agreement ”), is made and entered into as of
October 1, 2003, by and among IHS Energy Group Inc., a
Delaware corporation (the “ Purchaser ”), IHS
Energy Innovations, Inc., a Colorado corporation and wholly-owned
subsidiary of Purchaser (“ IHS Sub ”), and each
of Luna Innovations Incorporated, a Delaware corporation (“
Luna Innovations ”), Kent A. Murphy (“
Murphy ”), Kenneth D. Ferris (“
Ferris ”), Roberta Denise Couch, Walter Daub,
Robert L. Martinet, Michael F. Gunther and Robert Harman
(each, a “ Seller ,” and collectively, the
“ Sellers ”).
WHEREAS , the Sellers are the owners and holders of all
of the issued and outstanding capital stock of Luna
i–Monitoring Inc., a Delaware corporation (“the
Company ”), with each Seller owning that number of
shares of Common Stock, par value $0.0001 per share, of the Company
(the “ Common Stock ”) as is set forth opposite
each such Seller’s name on Schedule 1(a)
hereto;
WHEREAS , the Sellers desire to sell to the Purchaser,
and the Purchaser desires to purchase from the Sellers, all of the
Securities (as hereinafter defined), on the terms and subject to
the conditions contained in this Agreement;
WHEREAS , Luna Innovations owns and/or has licenses to
all of the i–Monitoring Intellectual Property (as defined in
Article I below);
WHEREAS , Luna Innovations wishes to grant to the
Company, and the Company wishes to receive, a non-exclusive license
to Company Licensed Sensor IP (as defined in Article I
below);
WHEREAS , Luna Innovations wishes to sell, transfer,
grant, assign and convey (the “ Transfer ”) to
IHS Sub, and IHS Sub wishes to receive, accept and assume, all of
Luna Innovations’ claims, right, title and interest in and to
the Purchaser Transferred Property (as defined in Article I
below);
WHEREAS , in consideration of the Transfer by Luna
Innovations of the Purchaser Transferred Property to IHS Sub
pursuant to Purchaser Transfer Documents (as defined in
Article I below), the Sellers desire that 56.83% of the Net
Proceeds (as defined in Article I below) be allocated to Luna
Innovations in accordance with Section 2.1(b) hereof;
and
NOW, THEREFORE
, in consideration of the mutual
agreements hereinafter contained, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the
following terms shall have the meanings set forth below:
“ Adjusted Net Proceeds
” means the product of 1.5 and the aggregate amount of Net
Proceeds (as defined below).
“ Assigned IP ”
shall mean all rights and assets assigned by Luna Innovations to
IHS Sub pursuant to the Intellectual Property Assignment, including
the Intellectual Property Rights of Luna Innovations assigned
thereunder.
“ Closing Creditors
” shall mean (i) Luna Innovations, (ii) the
Company’s legal counsel in connection with this Agreement and
the transactions contemplated hereby, and (iii) WWC (as
defined below).
“ Company Entities
” means the Company and all of its subsidiaries, if any, and
any successor entities of the foregoing.
“ Company Licensed Sensor
IP ” shall mean all rights licensed by Luna Innovations
to Company pursuant to the Non-Exclusive Intellectual Property
License Agreement, including the Intellectual Property Rights of
Luna Innovations licensed thereunder.
“ Company Material Adverse
Effect ” means any event, occurrence, fact, condition,
change or effect that is materially adverse to the assets,
business, operations, prospects, condition (financial or otherwise)
or results of operations of the Company, or that questions the
validity of this Agreement or any of the other Transaction
Documents to be delivered by Sellers, or the right of Sellers to
enter into such Transaction Documents or to consummate the
transactions contemplated hereby and thereby.
“ Company Products
” means all wireless sensing devices, wireless sensing device
technology, and all elements of any of the foregoing, developed
and/or currently under development, solely or jointly with a third
party, by the Company prior to the Closing Date (or on behalf of
the Company and/or Luna Innovations by the i–Monitoring
Employees prior to the Closing Date), as set forth on
Schedule 2(a) hereto.
“ Direct Manufacturing
Cost ” means any direct costs, expenses or expenditures
incurred by the Company Entities and the Purchaser Entities in the
manufacture of Wireless Sensing Products, including, without
limitation, materials, subcontract assembly testing, shipping,
quality assurance and configuration. To the extent the manufacture
of Wireless Sensing Products is not outsourced to a third party,
Direct Manufacturing Cost shall also include any overhead charges
reasonably allocated to labor, plant and equipment costs directly
associated with the manufacture, testing, shipping, quality control
and configuration of Wireless Sensing Products.
“ Exclusive Intellectual
Property License Agreement ” means the Exclusive
Intellectual Property License Agreement dated as of the Closing
Date between Luna Innovations and IHS Sub, in the form attached
hereto as Exhibit A .
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“ Governmental Entity
” means any domestic or foreign federal, state, municipal,
local or other governmental or multi-national body, or any
subdivision, agency, commission or authority thereof, or any
quasi-governmental or private body exercising any regulatory or
taxing authority thereunder.
“ IHSGI ” means
Information Handling Services Group, Inc. and all of its
subsidiaries.
“ i–Monitoring
Product Failure ” means that the Purchaser Entities have
in good faith determined that the wireless sensing devices or
wireless sensing device technology, or any element of any of the
foregoing, that are material to the Luna i–Monitoring
Business and are developed, solely or jointly with a third party,
by the Company Entities (or by the i–Monitoring Employees on
behalf of the Company or Luna Innovations prior to the Closing
Date) or by the Purchaser Entities, and that are sold or licensed
on a stand-alone basis or are incorporated into any product that is
sold or licensed by the Company Entities or by the Purchaser
Entities, are not reasonably commercially viable.
“ i–Monitoring
Intellectual Property ” means the wireless sensing
devices and technology (including wireless sensing devices and
technology under development), including sensors and all hardware,
firmware and software designs, and all Intellectual Property Rights
of Luna Innovations in and to the i–Monitoring Wireless
Sensing Technology (as defined in the Intellectual Property
Assignment) and all other rights and assets (other than the
Retained Assets (as defined below) and other than such rights to
the Licensed Sensor Technology (as defined below) licensed to Luna
Energy, LLC, Baker Hughes Incorporated or any of their respective
affiliates under the Technology Agreement (as defined below)), that
are assigned or licensed, as applicable, to IHS Sub or the Company,
as applicable, by Luna Innovations pursuant to the LI Transfer
Documents (as defined below).
“ including ”
means including, without limitation.
“ Intellectual Property
Assignment ” means that certain Intellectual Property
Assignment, dated as of the Closing Date, between Luna Innovations
and IHS Sub, in the form attached hereto as Exhibit B
.
“ Intellectual Property
Rights ” means all proprietary or other rights throughout
the world provided under (i) patent law, including inventions,
whether patentable or not, issued patents, applications therefor
pending before any relevant authority worldwide, including, without
limitation, any additions, continuations, continuations-in-part,
divisions, reissues, reexaminations, renewals or extensions based
thereon, (ii) copyright law, (iii) trademark and service
mark law, (iv) design patent or industrial design law,
(v) semi-conductor chip or mask work law, (vi) trade
secret or trade dress law, and (vii) any other statutory
provisions, common law principle or principle of law under any
jurisdiction in the world which provides proprietary or other
intellectual property rights.
“ Licensed Sensor
Technology ” means the technology listed on
Schedule 1(e) to this Agreement.
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“ Lien ” means
any lien, mortgage, encumbrance, security interest, charge or other
similar restriction of any kind.
“ LI Transfer Documents
” means (a) the Intellectual Property Assignment;
(b) the Exclusive Intellectual Property License Agreement; and
(c) the Non-Exclusive Intellectual Property License
Agreement.
“ Luna i–Monitoring
Assets ” means all of the rights and assets owned,
licensed or used by the Company and Luna Innovations on and as of
the Closing Date in connection with the Luna i–Monitoring
Business (other than the Retained Assets (as defined in
Section 4.12 below) and other than such rights to the Licensed
Sensor Technology licensed to Luna Energy, LLC, Baker Hughes
Incorporated or any of their respective affiliates under the
Technology Agreement), including but not limited to, (i) all
right, title and interest of Luna Innovations in and to the
i–Monitoring Intellectual Property; (ii) all right,
title and interest of Luna Innovations and the Company in and to
the Company Products; (iii) all associated goodwill of the
Company; (iv) all computer and other equipment and other
tangible property of the Company set forth on Schedule 2(b)
hereto (the “ Tangible Property ”); (v) all
contracts of the Company; and (vi) all cash, accounts
receivable and prepaid expenses of the Company on and as of the
Closing Date.
“ Luna i–Monitoring
Business ” means the entire business conducted by the
Company on the Closing Date, and conducted on behalf of the Company
by Luna Innovations and the i–Monitoring Employees (as
defined in Section 4.14(a) hereof) prior to the Closing Date,
in connection with the design, development, marketing and/or sale
of the Company Products.
“ Net Proceeds ”
shall mean One Million Dollars ($1,000,000) less the Transaction
Costs (as defined below).
“ Non-Exclusive
Intellectual Property License Agreement ” means the
Intellectual Property License Agreement dated as of the Closing
Date by and between Luna Innovations and the Company, in the form
attached hereto as Exhibit C .
“ Person ” means
any individual, firm, corporation, partnership, limited liability
company, trust, joint venture, Governmental Entity or other
entity.
“ Purchaser Entities
” means the Purchaser and all of its subsidiaries (including,
without limitation, IHS Sub), IHSGI, and any successor entities of
the any of the foregoing.
“ Purchaser Licensed Sensor
IP ” shall mean all rights and assets licensed by Luna
Innovations to IHS Sub pursuant to the Exclusive Intellectual
Property License Agreement, including the Intellectual Property
Rights of Luna Innovations licensed thereunder.
“ Purchaser Material
Adverse Effect ” means any event, occurrence, fact,
condition, change or effect that is materially adverse to the
assets, business, operations, prospects, condition (financial or
otherwise) or results of operations of Purchaser, or that questions
the validity of this Agreement or any of the other Transaction
Documents to be delivered by Purchaser, or the right of Purchaser
to enter into such Transaction Documents or to consummate the
transactions contemplated hereby and thereby.
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“ Purchaser Transfer
Documents ” means (a) the Intellectual Property
Assignment, and (b) the Exclusive Intellectual Property
License Agreement.
“ Purchaser Transferred
Property ” shall mean the (a) Assigned IP, and
(b) Purchaser Licensed Sensor IP.
“ Retained IP Assets
” means any and all Intellectual Property Rights retained by
Luna Innovations under any of the LI Transfer Documents.
“ Securities ”
means all of the issued and outstanding shares of capital stock of
the Company, including all shares of capital stock of the Company
issuable upon the exercise of all outstanding stock options and
warrants.
“ Tax ” or
“ Taxes ” means all income taxes, excise taxes,
sales taxes, goods and services taxes, value added taxes, transfer
taxes, property taxes, capital taxes, import and customs duties and
other governmental charges and assessments, and includes additions
by way of penalties, interest, fines and other amounts with respect
thereto.
“ Tax Legislation
” means all legislation, statutes, laws, judgments, rules,
regulations, interpretation bulletins and releases, orders and
decrees of any jurisdiction, domestic or foreign, pursuant to which
Taxes are payable.
“ Tax Returns ”
means all tax returns required to be filed under the provisions of
any applicable Tax Legislation and any tax forms required to be
filed, whether in connection with a Tax Return or not, under the
provisions of any applicable Tax Legislation.
“ Technology Agreement
” means the Amended and Restated Technology Transfer and
License Agreement dated February 19, 2002 by and among Luna
Innovations, Baker Hughes Incorporated and Luna Energy,
LLC.
“ Transaction Costs
” means all fees, expenses, costs and expenditures incurred
by the Company from the Closing Creditors in connection with this
Agreement, as determined in good faith by the Board of Directors of
the Company, set forth on Schedule 1(b) hereto, which fees,
expenses, costs and expenditures may be updated by notice pursuant
to Section 2.1(b) prior to the Closing.
“ Transaction Documents
” means this Agreement and all other agreements, instruments,
certificates and documents contemplated hereby, including, without
limitation, the Intellectual Property Assignment, the Exclusive
Intellectual Property License Agreement, the Non-Exclusive
Intellectual Property License Agreement, and the Key Employee
Agreements (as defined in Section 3.2(a)(vi)).
“ Upstream Petroleum
Market ” means the segment of the petroleum industry
engaged in the exploration and extraction of oil and/or gas and the
delivery to a refinery or other processing point.
“ Wireless Sensing
Products ” means (i) all Company Products, and
(ii) any wireless sensing devices or wireless sensing device
technology, or any element of any of the foregoing, developed
on
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or after the Closing Date, solely or jointly
with a third party, by the Company Entities or by the Purchaser
Entities, or licensed or acquired on or after the Closing Date by
the Company Entities or the Purchaser Entities, that is sold or
licensed on a stand-alone basis or is incorporated into any product
that is sold or licensed by the Company Entities or the Purchaser
Entities, either directly or indirectly through resellers,
distributors, original equipment manufacturers and the like;
excluding, however, any alternative, competing wireless sensing
devices or wireless sensing device technology that the Company
Entities or the Purchaser Entities license, develop or otherwise
acquire as a result of and in response to an i–Monitoring
Product Failure.
“ WWC ” shall
mean WWC Securities, LLC.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale of
Securities and Purchaser Transferred Property .
(a) Purchase and Sale . At
the Closing (as defined in Section 3.1 below), on the terms
and subject to the conditions of this Agreement, (i) the
Sellers shall sell, transfer and deliver to the Purchaser, and the
Purchaser shall purchase from the Sellers, the Securities, and
(ii) Luna Innovations shall sell, transfer, assign, and convey
to IHS Sub, and IHS Sub shall accept and assume from Luna
Innovations, in accordance with the terms of the Purchaser Transfer
Documents, the Purchaser Transferred Property.
(b) Purchase Price . The
aggregate purchase price (the “ Purchase Price
”) payable by the Purchaser for the Securities and the
Purchaser Transferred Property shall be the sum of (a) an
aggregate amount of One Million Dollars ($1,000,000) payable in
cash on the Closing Date payable to the following persons in the
amounts set forth herein as follows: (i) the amount of the
Transaction Costs payable in cash to the Closing Creditors listed
on Schedule 1(b) to this Agreement, in accordance with the
amount of Transaction Costs set forth opposite each such Closing
Creditor’s name on Schedule 1(b), as updated by written
notice to the Purchaser prior to the Closing Date, (ii) in
consideration of the Transfer by Luna Innovations of the Purchaser
Transferred Property to IHS Sub, the amount of 56.83% of the Net
Proceeds payable to Luna Innovations in cash, and (iii) in
consideration of the sale of the Securities to the Purchaser, the
amount of 43.17% of the Net Proceeds payable in cash pro
rata to each Seller listed on Schedule 1(c) to this
Agreement in accordance with the percentage of the Net Proceeds set
forth opposite each such Seller’s name on such
Schedule 1(c), plus (b) in further consideration of the
sale of the Securities to the Purchaser, as provided in
Section 2.2, the Earn-Out Consideration (as defined below)
payable, in cash pro rata to each Seller listed on
Schedule 1(d) to this Agreement in accordance with
Section 2.2(d), based on the percentage of such Earn-Out
Consideration set forth opposite the name of each such Seller on
such Schedule 1(d).
2.2 Earn-Out Consideration
.
(a) The Sellers shall receive
contingent additional consideration for the sale of the Securities
to Purchaser (the “ Earn-Out Consideration ”) as
provided in this Section 2.2. The aggregate Earn-Out
Consideration shall be an amount equal to ten percent (10%) of
the greater of:
(i) all gross revenue (the “
Revenue ”) received from the sale, license, servicing
or third-party development of any Wireless Sensing Products, or any
element thereof, by the Company Entities or the Purchaser Entities
during the period commencing on the Closing Date and ending on the
fifth (5 th ) anniversary of the Closing
Date (the “ Earn-Out Period ”), or
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(ii) the quotient of (A) all
Direct Manufacturing Costs incurred in connection with Wireless
Sensing Products sold or licensed during the Earn-Out Period,
divided by (B) 0.75.
Notwithstanding anything of the
foregoing to the contrary, in no event shall the Earn-Out
Consideration payable to Sellers exceed nine million dollars
($9,000,000) in the aggregate (the “ Maximum Earn-Out
Consideration ”).
The parties hereto acknowledge and
agree that Revenue and Direct Manufacturing Costs shall be measured
in accordance with GAAP (as defined in Section 4.4 below). The
Earn-Out Consideration shall be paid quarterly within
thirty (30) days of the end of each quarter for each fiscal
year during the Earn-Out Period as set forth in Section 2.2(c)
below. Purchaser shall act in good faith in connection with
marketing, selling and licensing the Wireless Sensing Products,
including setting the price, sales terms or licensing terms for
such products at fair market value and commercially reasonable
terms, including commercially reasonable discounts. The parties
hereby acknowledge and agree that the Earn-Out Consideration shall
not include any payment based on sales by the Company Entities or
the Purchaser Entities, of Purchaser’s (or its
subsidiary’s) product entitled “Field Direct”,
any database or software products or any other products or services
of the Company Entities or Purchaser Entities (other than Wireless
Sensing Products or elements thereof) (collectively, the “
Purchaser Products ”), whether made in conjunction
with the sale, license or servicing of any Wireless Sensing
Products or otherwise; provided , however , that if
any Wireless Sensing Product hardware and/or Wireless Sensing
Product embedded software is included in any Purchaser Product
without a separate charge to the customer for such Wireless Sensing
Product hardware and/or Wireless Sensing Product embedded software,
credit for such Wireless Sensing Product hardware and/or Wireless
Sensing Product embedded software shall be given towards Revenue
for purposes of the Earn-Out Consideration on a commercially
reasonable basis based on the fair market value of such Wireless
Sensing Product hardware and/or Wireless Sensing Product embedded
software.
(b) In the event of any transfer,
sale, assignment, license or other disposition by the Purchaser or
the Purchaser Entities of the Company, of all or substantially all
of the assets of the Company, or of the Intellectual Property
Rights of the Company, not in connection with any Purchaser Change
of Control (as defined below) (each, a “ Company Change of
Control ”) prior to the end of the Earn-Out Period, then
prior to such Company Change of Control, Purchaser shall make
appropriate provision or cause appropriate provision to be made so
that (i) the Earn-Out Consideration may be calculated and paid
following such Company Change of Control, and
(ii) Purchaser’s obligations under this Section 2.2
and Articles VI and IX are expressly assumed by the acquiring
Person; provided , however , Purchaser shall not be
relieved of its obligations under this Agreement as a result of
such assumption in the event of a breach by the acquiring Person,
and Purchaser’s obligation to pay the Earn-Out Consideration
hereunder shall survive any Company Change of Control in the event
of such breach. In the event of a Company Change of Control,
or
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any subsequent Company Change of
Control following acquisition by an acquiring Person (each, a
“ Subsequent Company Change of Control ”), the
provisions of this Section 2.2(b) shall apply with respect to
such Company Change of Control or Subsequent Company Change of
Control; provided , however , in the event
(i) of a Company Change of Control or a Subsequent Company
Change of Control, or (ii) that in connection with any sale of
Purchaser, or any transfer, sale, assignment, license or other
disposition of all or substantially all of the assets of Purchaser
(each, a “ Purchaser Change of Control ”)
Purchaser, shortly prior to such sale, or any successor or assign
of Purchaser, shortly following such sale, elects to make a
Business Termination Decision (as defined in Section 6.7
hereof) pursuant to Section 6.7 hereof (a “ Purchaser
Change of Control Termination ”), then, Sellers may elect
(an “ Earn-Out Election ”) in lieu of receiving
any further Earn-Out Consideration to receive the payment computed
in accordance with the next sentence (the “ Earn-out
Election Payment ”). The Earn-Out Election Payment shall
be an amount equal to the product of (x) the product of
(A) 75%, in the event the Qualifying Election Event occurs
during the first year following the Closing Date, (B) 65%, in
the event the Qualifying Election Event occurs during the second
year following the Closing Date or (C) 50%, in the event the
Qualifying Election Event occurs during the remainder of the
Earn-Out Period, times the quotient of the Earn-Out Consideration
paid to the Sellers for the four Earn-Out Quarters (as defined in
Section 2.2(c) below) immediately preceding the Company Change
of Control, Subsequent Company Change of Control or Purchaser
Change of Control Termination (each, a “ Qualifying
Election Event ”), as applicable, divided by 12, times
(y) the number of months remaining in the Earn-Out Period;
provided , the Earn-Out Election Payment plus the Earn-Out
Consideration paid shall in no event exceed the Maximum Earn-Out
Consideration. In the event of an Earn-Out Election, the Earn-Out
Period shall terminate on the date of the applicable Qualifying
Election Event. Purchaser, or any applicable successor or assign of
Purchaser, shall provide Sellers with written notice (the “
Purchaser Notice ”) of a proposed Qualifying Election
Event at least ten (10) days prior to or after the date of
such Qualifying Election Event, and shall provide Sellers with
reasonable information (“ Change of Control
Information ”) about the acquiring Person in connection
with a Company Change of Control or a Subsequent Company Change of
Control, as applicable, so that the Sellers may make a reasonably
informed decision with respect to an Earn Out Election;
provided , that if such Change of Control Information would
involve confidential information, such Change of Control
Information shall only be provided to Murphy and Ferris, and Murphy
and Ferris execute an appropriate confidentiality agreement.
Sellers shall notify Purchaser, or any applicable successor or
assign of Purchaser, of their intention to exercise the Earn-Out
Election within thirty (30) days of the Purchaser Notice. If
the Qualifying Election Event is not consummated or effected, as
applicable, the Earn-Out Election shall have no force or effect,
and the Sellers shall retain the right to an Earn-Out Election with
respect to any subsequent Qualifying Election Event. For purposes
of an Earn-Out Election, a vote (a “ Seller Majority
Vote ”) by Sellers holding a right to receive at least
67% of the Earn-Out Consideration (the “ Seller
Majority ”) shall be deemed binding on all Sellers. The
parties hereto acknowledge and agree that the consideration
received by the Purchaser or the Company from any Company Change of
Control shall not constitute Revenue or Direct Manufacturing Costs
for purposes of Section 2.2(a).
(c) Within thirty (30) days of
the end of the fourth fiscal quarter of the fiscal year beginning
on December 1, 2002 and ending on November 30, 2003, and
within thirty (30) days of the end of each succeeding fiscal
quarter for the five fiscal year periods commencing on
December 1 of such year and ending on November 30 of such
year, up to and including the fiscal year ended
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November 30, 2008, the
Purchaser shall provide the Sellers with an initial statement of
the Company’s Revenues and Direct Manufacturing Costs during
the preceding fiscal quarter or, in the event that such period does
not cover a full fiscal quarter, partial fiscal quarter during the
Earn-Out Period (each such fiscal quarter or partial fiscal quarter
during the Earn-Out Period, an “ Earn-Out Quarter
”) certified by Purchaser’s Chief Financial Officer as
to the accuracy of such statement (each, a “ Purchaser
Statement ”). Purchaser hereby covenants and agrees that
it shall maintain the Company’s corporate existence, and
separate books and records for the Company and the Wireless Sensing
Products during the Earn-Out Period, which books and records shall
be available for review by the Sellers and their respective
accountants and auditors as provided in subsection (f)
below.
(d) Together with such Purchaser
Statements, the Purchaser shall pay the Sellers the applicable
Earn-Out Consideration for such Earn-Out Quarter calculated in
accordance with Section 2.2(a) above, payable (i) with
respect to the first amount of dollars of Earn-Out Consideration
earned up to an aggregate amount equal to the Adjusted Net
Proceeds, pro rata to each Seller in accordance with the percentage
set forth opposite the name of each Seller under the column “
Seller’s Percentage ” in Column A of
Schedule 1(d) hereto, and (ii) after payment in full of
the Adjusted Net Proceeds pursuant to Section 2.2(d)(i), with
respect to any remaining Earn-Out Consideration earned during the
Earn-Out Period, pro rata to each Seller in accordance with the
percentage set forth opposite the name of each Seller under the
column “ Seller’s Percentage ” in Column B
of Schedule 1(d) hereto.
(e) Payment of the Earn-Out
Consideration shall be made by check or, if requested by a Seller,
by wire transfer of immediately available funds to an account
specified by such Seller.
(f) The Seller Majority shall have
the right to appoint a representative (the “
Sellers’ Representative ”) to audit the
Purchaser Statement on an annual basis within forty-five (45)
days of the conclusion of the applicable fiscal year during the
Earn-Out Period. If Sellers’ Representative disagrees with
any of the quarterly Purchaser Statements received from Purchaser
for the preceding fiscal year, Sellers’ Representative (the
“ Seller Disputant ”, and collectively with
Purchaser, the “ Disputants ”) shall deliver a
reasonably detailed statement (the “ Seller
Disputant’s Notice ”) describing its objections to
Purchaser within forty-five (45) days after the later of
(i) conclusion of the applicable fiscal year, or (ii) the
Sellers’ receipt of all four quarterly Purchaser Statements
for the preceding fiscal year. In the event the Sellers’
Representative fails to provide a Seller Disputant’s Notice
within such forty-five (45) day period, the Earn-Out
Consideration for the applicable fiscal year shall be deemed to be
conclusively agreed to by the parties. In the event of any such
dispute between the Sellers’ Representative, on the one hand,
and Purchaser, on the other hand, with respect to the applicable
Purchaser Statement(s), or any calculation of Revenues, Direct
Manufacturing Costs, or the Earn-Out Consideration for the
preceding fiscal year, or any quarter of such fiscal year, the
Sellers’ Representative and Purchaser shall first use their
best efforts to resolve such dispute among themselves. If the
Disputants are unable to resolve the dispute within
twenty (20) business days of the Seller Disputant’s
Notice, they agree to submit the dispute to mediation in accordance
with the Commercial Mediation Rules of the American Arbitration
Association. The Disputants will jointly appoint a mutually
acceptable mediator, and shall in good faith make a reasonable
effort to resolve the dispute with the assistance of the mediator.
If the dispute is not resolved within sixty (60) business days
after initiation of the initial attempts at
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resolution, such dispute shall be
resolved solely and exclusively by binding arbitration in Roanoke,
Virginia, under the commercial arbitration rules of the American
Arbitration Association (the “ AAA ”). Following
the filing by either party of a demand for arbitration with the
AAA, the Sellers’ Representative, on the one hand, and
Purchaser, on the other hand, shall select a single arbitrator and
file with the AAA a notice of appointment. The two arbitrators so
chosen shall select a third arbitrator who shall act as chairperson
of the arbitration. If either Purchaser or the Sellers’
Representative have failed to file a notice of appointment
designating an arbitrator within fifteen (15) business days
following the filing by either party of a demand for arbitration,
or should the two arbitrators selected above fail to select a third
arbitrator within fifteen (15) business days, then at the
request of any party, the President of the AAA shall select an
arbitrator to fill the vacant position within fifteen (15)
business days of a request by any party. The arbitrators shall
commence a hearing on the matter within forty-five (45)
calendar days of their appointment and shall continue the
proceedings without interruption until all evidence and arguments
are presented. The arbitrators shall have the authority to
determine all issues regarding the dispute, including
arbitrability. The arbitrators shall only interpret and apply the
terms and provisions of this Agreement and the Transaction
Documents at issue, and shall not change any such terms or
provisions and, to the extent practicable, shall, notwithstanding
its rules, apply Delaware law to the resolution of legal issues.
The arbitrators shall thereafter resolve the dispute, and such
resolution shall be final and binding on all Sellers and Purchaser.
Purchaser and Sellers’ Representative agree to cooperate with
the arbitrators to facilitate the speedy resolution of the dispute.
The arbitrators shall provide the parties with a written decision
within five (5) business days of the adjournment of the
hearing and shall set forth the reasoning for such decision. The
decision and award (if any) of the arbitrators shall be binding and
final, i.e., not subject to appeal by Purchaser or any Seller, or
any of their respective successors or assigns, and may be enforced
in any court of competent jurisdiction. If the arbitrators find
that the claims of either party in such arbitration are not
warranted by existing law or by a non-frivolous argument for the
extension, modification, or reversal of existing law or the
establishment of new law, the arbitrators may award to the
prevailing party its reasonable costs and expenses incurred in the
arbitration (including legal fees). In all other instances, the
fees and expenses of the arbitration panel and the mediator shall
be borne one half (1/2) by Purchaser and one half
(1/2) by the Sellers’ Representative, and each of the
parties shall bear their own other fees and expenses (including
legal fees) incurred in the arbitration and the mediation;
provided, that the Sellers shall share all fees and expenses of the
Sellers’ Representative on a pro rata basis based on their
respective allocation of cash Earn-Out Consideration actually paid
to the Sellers.
(g) The Earn-Out Consideration
payable pursuant to this Section 2.2 does not constitute
compensation for services, but rather constitutes part of the
consideration for the Securities purchased by Purchaser under this
Agreement and shall be treated as such for all tax
purposes.
ARTICLE III
CLOSING; CONDITIONS PRECEDENT TO
CLOSING;
ITEMS TO BE DELIVERED AT
CLOSING
3.1 Closing, Date and Place .
The consummation of the purchase and sale of the Securities and
Purchaser Transferred Property contemplated hereby (the “
Closing ”) will take place at 10:00 a.m. Eastern
Standard Time on October 1, 2003, or at such other time on or
before the End
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Date (as defined in Section 7.1(b) below)
as the parties shall mutually agree, at the offices of Wilson
Sonsini Goodrich & Rosati, PC, 11921 Freedom Drive, Suite
600, Reston, Virginia 20190. The date upon which the Closing occurs
is referred to herein as the “ Closing Date
.”
3.2 Conditions Precedent to the
Closing .
(a) Conditions Precedent to
Purchaser’s Obligations . All obligations of Purchaser
under this Agreement are subject to the fulfillment or
satisfaction, prior to or at the Closing, of each of the following
conditions precedent:
(i) Representations and
Warranties True as of the Closing Date . The representations
and warranties of Sellers contained in this Agreement shall be true
and correct in all material respects at and as of the date hereof
and at and as of the Closing Date.
(ii) Compliance with this
Agreement . Sellers shall have performed and complied with in
all material respects all agreements and conditions required by
this Agreement to be performed or complied with by them prior to or
at the Closing.
(iii) Closing Certificate .
Purchaser shall have received a certificate from Luna Innovations
and the other Sellers, as applicable, dated the Closing Date,
certifying in such detail as Purchaser may reasonably request that
the conditions specified in Sections 3.2(a)(i) and 3.2(a)(ii)
hereof have been fulfilled by Luna Innovations and the other
Sellers, as applicable, and certifying that Luna Innovations and
the other Sellers, as applicable, have obtained all consents and
approvals required by Section 3.2(a)(iv) hereof (the “
Sellers’ Closing Certificate ”).
(iv) Consents and Approvals .
All consents and approvals to be obtained by Sellers, including,
without limitation, the consent or approval of any governmental or
regulatory official, body or authority and any governmental,
judicial or regulatory official, body or authority having
jurisdiction over Sellers to the extent that their consent or
approval is required or necessary for the consummation of the
transactions contemplated hereby in the manner herein provided,
shall have been obtained.
(v) No Threatened or Pending
Litigation . On the Closing Date, no suit, action or other
proceeding, or injunction or final judgment relating thereto, shall
be pending before any court or governmental or regulatory official,
body or authority in which it is sought to restrain or prohibit or
to obtain damages or other relief in connection with this Agreement
or the consummation of the transactions contemplated hereby, and no
investigation that might result in any such suit, action or
proceeding shall be pending.
(vi) Key Employee Agreements
. Each of Kenneth D. Ferris, Robert Harman and Philip Couch
(collectively, the “ Key Employees ”) shall have
executed employment agreements and bonus agreements with the
Company, in the forms attached hereto as Exhibits D, E and F,
respectively, (collectively, the “ Key Employee
Agreements ”).
(vii) Approval of Counsel;
Corporate Matters . All actions, proceedings, resolutions,
instruments and documents required to carry out this Agreement or
incidental hereto and all other related legal matters shall have
been approved on the Closing Date by the General Counsel
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of Purchaser, in the exercise of his
reasonable judgment. Sellers shall also have delivered to Purchaser
such other documents, instruments, certifications and further
assurances as such counsel may reasonably require.
(viii) Opinion of Counsel to the
Company . Wilson Sonsini Goodrich & Rosati, P.C.,
counsel to the Company, shall have delivered to Purchaser a written
opinion, dated the Closing Date, in the form of
Exhibit G hereto, with only such changes as shall be in
form and substance reasonably satisfactory to the Purchaser and its
General Counsel (the “ WSGR Opinion
”).
(ix) Intellectual Property
Assignment . Luna Innovations shall have executed and delivered
to IHS Sub the Intellectual Property Assignment.
(x) Exclusive Intellectual
Property License Agreement . Luna Innovations shall have
executed and delivered to IHS Sub the Exclusive Intellectual
Property License Agreement.
(xi) Non-Exclusive Intellectual
Property License Agreement . Luna Innovations and the Company
shall have executed and delivered to the Purchaser the
Non-Exclusive Intellectual Property License Agreement.
(b) Conditions Precedent to the
Obligations of Sellers . All obligations of Sellers under this
Agreement are subject to the fulfillment or satisfaction, prior to
or at the Closing, of each of the following conditions
precedent:
(i) Representations and
Warranties True as of the Closing Date . The representations
and warranties of Purchaser and IHS Sub contained in this Agreement
shall be true and correct in all material respects at and as of the
date hereof and at and as of the Closing Date.
(ii) Compliance with this
Agreement . Purchaser and IHS Sub shall have performed and
complied in all material respects with all agreements and
conditions required by this Agreement to be performed or complied
with by each of them prior to or at the Closing.
(iii) Closing Certificates .
Sellers shall have received a certificate from Purchaser and IHS
Sub dated the Closing Date certifying in such detail as Sellers may
reasonably request that the conditions specified in Sections
3.2(b)(i) and 3.2(b)(ii) hereof have been fulfilled and certifying
that Purchaser and IHS Sub have obtained all consents and approvals
required by Section 3.2(b)(iv) hereof (the “
Purchaser’s Closing Certificate ”).
(iv) Consents and Approvals .
All consents and approvals to be obtained by Purchaser and IHS Sub,
including, without limitation, the consent or approval of any
governmental or regulatory official, body or authority and any
governmental, judicial or regulatory official, body or authority
having jurisdiction over Purchaser and IHS Sub to the extent that
their consent or approval is required or necessary for the
consummation of the transactions contemplated hereby in the manner
herein provided, shall have been obtained.
(v) No Threatened or Pending
Litigation . On the Closing Date, no suit, action or other
proceeding, or injunction or final judgment relating thereto, shall
be pending before
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any court or governmental or
regulatory official, body or authority in which it is sought to
restrain or prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of the
transactions contemplated hereby, and no investigation that might
result in any such suit, action or proceeding shall be
pending.
(vi) Approval of Counsel;
Corporate Matters . All actions, proceedings, resolutions,
instruments and documents required to carry out this Agreement or
incidental hereto and all other related legal matters shall have
been approved on the Closing Date by counsel for Sellers in the
exercise of their reasonable judgment. Purchaser and IHS Sub shall
also have delivered to Sellers such other documents, instruments,
certifications and further assurances as such counsel for Sellers
may reasonably require.
(vii) Opinions of Counsel for
Purchaser . The General Counsel of Purchaser shall have
delivered to Sellers a written opinion, dated the Closing Date, in
the form of Exhibit H hereto with only such changes as
shall be in form and substance reasonably satisfactory to Sellers
and their counsel (the “ Purchaser Legal Opinion
”).
(viii) Intellectual Property
Assignment . IHS Sub shall have executed and delivered to Luna
Innovations the Intellectual Property Assignment.
(ix) Exclusive Intellectual
Property License Agreement . IHS Sub shall have executed and
delivered to Luna Innovations the Exclusive Intellectual Property
License Agreement.
3.3 Items to be Delivered at
Closing .
(a) Items to be delivered by
Sellers . At the Closing, the Sellers shall deliver, or cause
to be delivered, to the Purchaser the following:
(i) Certificates representing the
Securities, duly endorsed in blank for transfer or accompanied by
stock powers duly executed in blank, sufficient in form and
substance to convey to the Purchaser good title to the Securities
free and clear of all Liens, with appropriate transfer stamps, if
any, affixed.
(ii) A certificate dated as of the
Closing Date, signed by the Secretary of the Company and certifying
as to the Certificate of Incorporation and By-Laws of the Company,
and a certificate of the Secretary of State of Delaware certifying
as to the good standing of the Company.
(iii) A certificate dated as of the
Closing Date, signed by the Secretary of Luna Innovations and
certifying as to (A) the Certificate of Incorporation and
By-laws of Luna Innovations, and incumbency of officers executing
each of the Transaction Documents to which Luna Innovations is a
party, and (B) resolutions of the Board of Directors of Luna
Innovations authorizing the execution, delivery and performance by
Luna Innovations of each of the Transaction Documents to which Luna
Innovations is a party.
(iv) Copies of all consents,
approvals, authorizations and filings with third Persons required
for the consummation of the sale of the Securities or any of the
other transactions
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contemplated by any of the
Transaction Documents, or for the conduct of the business of the
Company subsequent to the Closing Date, including, without
limitation, those consents, approvals, authorizations and filings
listed on Schedule 3.3(a)(iv) of the Disclosure Schedule (as
defined in Article IV below).
(v) The WSGR Opinion dated as of the
Closing Date.
(vi) Copies of resignations from all
directors and officers of the Company (or, with respect to the
officers, evidence that the officers have otherwise been removed
from their officer positions), effective as of the Closing
Date.
(vii) All books and records
belonging to the Company.
(viii) Evidence that all holders of
outstanding options to acquire shares of the Company have converted
such options into Common Stock and all holders of warrants have
exercised such warrants and that such former option holders and
warrant holders are Sellers with respect to the Securities issued
upon such exercise or conversion.
(ix) The Key Employment Agreements
between the Company and each of the Key Employees, duly executed by
each such Key Employee.
(x) The Sellers’ Closing
Certificate.
(xi) The Intellectual Property
Assignment, duly executed by Luna Innovations.
(xii) The Exclusive Intellectual
Property License Agreement, duly executed by Luna
Innovations.
(xiii) The Non-Exclusive
Intellectual Property License Agreement, duly executed by each of
Luna Innovations and the Company.
(xiv) Such other instruments or
documents as may be reasonably required by the Purchaser as
necessary or appropriate to carry out the transactions contemplated
hereby.
(b) Items to be Delivered by the
Purchaser and IHS Sub . At the Closing, the Purchaser and IHS
Sub shall deliver, or cause to be delivered, to the Sellers the
following:
(i) An aggregate amount equal to One
Million Dollars ($1,000,000) payable in cash by wire transfer or
cashier’s check, as requested by (A) the Company
Creditors, to such Persons in the amounts set forth opposite each
such Person’s name on Schedule 1(b) hereto,
(B) Luna Innovations, to such Person in the amount of 56.83%
of the Net Proceeds, and (C) the Sellers, to such Persons in
accordance with the percentage of Net Proceeds set forth opposite
each such Person’s name on Schedule 1(c)
hereto.
(ii) (A) An aggregate amount equal
to One Hundred Three Thousand Four Hundred Thirty Dollars
($103,430) payable in cash by wire transfer or cashiers check as
requested
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by Luna Innovations, per the
payables due by the Company to Luna Innovations shown on
Schedule 4.5, and (B) an amount equal to the product of
(x) Four Thousand Four Hundred Sixty One and 43/100 Dollars
($4,461.43), and (y) the number of week days beginning on and
including Friday, September 26, 2003 through and including the
Closing Date, payable by Purchaser company check to Luna
Innovations.
(iii) The Purchaser Legal Opinion
dated as of the Closing Date.
(iv) A certificate dated as of the
Closing Date, signed by the Secretary of the Purchaser and
certifying as to (A) the Certificate of Incorporation and
By-laws of the Purchaser, and incumbency of officers executing each
of the Transaction Documents to which the Purchaser is party, and
(B) the resolutions of the Board of Directors of the Purchaser
authorizing the execution, delivery and performance by the
Purchaser of each of the Transaction Documents to which the
Purchaser is a party.
(v) A certificate dated as of the
Closing Date, signed by the Secretary of IHS Sub and certifying as
to the resolutions of the Board of Directors of IHS Sub authorizing
the execution, delivery and performance by IHS Sub of each of the
Transactions Documents to which IHS Sub is a party.
(vi) The Key Employment Agreements
between the Company and each of the Key Employees, duly executed by
the Purchaser or the Company.
(vii) The Purchaser’s Closing
Certificate.
(viii) The Intellectual Property
Assignment, duly executed by IHS Sub.
(ix) The Exclusive Intellectual
Property License Agreement, duly executed by IHS Sub.
(x) Such other instruments or
documents as may reasonably required by the Sellers as necessary or
appropriate to carry out the transactions contemplated
hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF
LUNA INNOVATIONS AND THE
SELLERS
Except as set forth in the section
of the Disclosure Schedule attached as Exhibit I hereto
corresponding to the applicable representation and warranty (the
“ Disclosure Schedule ”), (i) Luna
Innovations hereby represents and warrants to the Purchaser, and
(ii) solely with respect to Sections 4.18, 4.19, 4.20,
4.22(b) and 4.23 hereof, each Seller hereby represents and
warrants, severally but not jointly, to the Purchaser, as
follows:
4.1 Organization and
Authorization . The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, has all requisite corporate power and lawful authority
to own, lease and operate its assets, properties and business and
to carry on its business as now conducted, and is duly qualified
and in good standing to do
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business in each jurisdiction in which the
nature of its business or the ownership or leasing of its
properties makes such qualification necessary, except where the
failure to be so qualified would not have a Company Material
Adverse Effect. Copies of the Certificate of Incorporation and
By-Laws of the Company as amended to date, and the corporate
minutes of the Company, have been delivered to the Purchaser and
are complete and correct in all material respects.
4.2 Capitalization of the
Company . The authorized capital of the Company consists one
million (1,000,000) shares of Common Stock, $0.0001 par value,
of which five hundred ninety thousand (590,000) shares are
issued and outstanding. All of the Securities have been duly
authorized and validly issued and are fully paid and non-assessable
and have been issued in compliance with all applicable laws. There
are not any bonds, debentures, notes or other indebtedness having
the right to vote on any matters on which the Company’s
stockholders may vote (“ Voting Debt ”) issued
or outstanding. There exists no preemptive right of any kind with
respect to the capital of the Company. Schedule 4.2 to the
Disclosure Schedule lists all options granted to acquire shares of
the Company, including the name of the grantee, the number of
options, the date of grant, the expiration dates and the exercise
price. All options formerly outstanding, including the options
listed on Schedule 4.2 to the Disclosure Schedule, to acquire
shares of the Company have been exercised, terminated, or have
expired by their terms prior to the date hereof. There exists no
subscription, warrant, option, (whether or not presently
exercisable), call, right (including phantom stock or stock
appreciation rights), commitment, or other agreement of any
character to which the Company is party or by which it is bound
obligating the Company to issue, deliver or sell, or cause to be
issued, delivered or sold, shares of capital stock or any Voting
Debt of the Company or any security convertible into shares or any
Voting Debt of the Company or obligating the Company to grant or
enter into any such subscription, warrant, option, call, right,
commitment or agreement. Schedule 4.2 to the Disclosure
Schedule sets forth the registered owners of the Securities and the
number of Securities owned by each such Person.
4.3 Equity Interest . The
Company does not directly or indirectly own, and has not ever
directly or indirectly owned, any shares of or other equity
interests in any Person and the Company is not a member of or
participant in any partnership, joint venture or similar
Person.
4.4 Financial Information .
Attached hereto as Schedule 4.4(a) to the Disclosure Schedule is
the unaudited balance sheet of the Company at September 19,
2003. Attached hereto as Schedule 4.4(b) to the Disclosure Schedule
is a pro forma statement of operations of the Luna
i–Monitoring Business for the period commencing
January 1, 2003 and ended September 19, 2003. (Schedule
4.4(a) and Schedule 4.4(b) to the Disclosure Schedule,
collectively, the “ Financial Statements ”). The
Financial Statements (i) are correct and complete in all
material respects, (ii) are in accordance with the books and
records of Luna Innovations and the Company, (iii) have been
prepared in conformity with U.S. generally accepted accounting
principles (“ GAAP ”) applied on a consistent
basis throughout the period indicated, except that they do not
contain additional financial statements and footnotes required
under GAAP, and are subject to normal year-end adjustments, and
(iv) present fairly the financial condition and results of
operations of the Company and the Luna i–Monitoring Business
as of the date thereof and for the period referred to therein.
Attached hereto as Schedule 4.4(c) is a statement showing the
investment of Luna Innovations in the Luna i–Monitoring
Business through July 31, 2003, which statement is correct in
all material respects.
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4.5 Absence of Undisclosed
Liabilities . Neither the Company, nor Luna Innovations with
respect to the Luna i–Monitoring Business, has any
liabilities of any nature or kind (whether known or unknown,
accrued, absolute, contingent, liquidated, unliquidated, matured,
unmatured or otherwise and regardless of when asserted), including,
but not limited to, accounts payable, accrued expenses and
commitments to purchase component parts and accrued employee
vacations and other employee obligations, which were not shown or
that are in excess of amounts shown on Schedule 4.5 of the
Disclosure Schedule.
4.6 Compliance with Laws .
The operation of the business of the Company, and of Luna
Innovations with respect to the Luna i–Monitoring Business,
has been conducted in accordance with all applicable laws,
ordinances, regulations, orders, judgments, injunctions, awards,
decrees and other requirements of any Governmental Entity,
including those with regard to environmental matters and
workers’ safety and health matters (“
Regulations ”), except where failure to do so would
not have a Company Material Adverse Effect. Neither the Company,
nor Luna Innovations with respect to the Luna i–Monitoring
Business, has received any notice of any asserted present or past
material failure by it to comply with such Regulations. The Company
owns, holds, possesses or lawfully uses all material permits,
licenses, franchises, and other governmental authorizations
necessary for the conduct of its business, each of which is listed
on Schedule 4.6 of the Disclosure Schedule and each of which
is valid and in full force and effect.
4.7 Absence of Conflict . The
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not, and
the transfer of Luna Innovations’ rights in and to the
i–Monitoring Intellectual Property from Luna Innovations to
the Company and the Purchaser, as applicable, will not, result in
the creation or imposition of any Lien (other than such rights to
Licensed Sensor Technology licensed to Luna Energy, LLC, Baker
Hughes Incorporated or any of their respective affiliates under the
Technology Agreement) upon any property or assets of the Company or
the Purchaser Transferred Property, including the Luna
i–Monitoring Assets, and will not violate, conflict with and
or otherwise result in the breach or violation of any of the terms
and conditions of, result in a modification of or constitute (or
with notice or lapse of time or both would constitute) a default
under:
(a) the Certificate of Incorporation
or By-Laws of the Company or Luna Innovations;
(b) any material contract,
instrument or other agreement to which the Company or Luna
Innovations with respect to the Luna i–Monitoring Business is
a party or by or to which they or any of their assets or properties
are bound or subject; or
(c) any statute or any regulation,
order, judgment, injunction, award or decree of any court,
arbitrator or other Governmental Entity against or binding upon or
applicable to, the Company, or Luna Innovations with respect to the
Luna i–Monitoring Business, or upon the properties or
business of the Company, or Luna Innovations with respect to the
Luna i–Monitoring Business.
4.8 Litigation and Claims .
There are no adverse claims pending, or to the knowledge of Luna
Innovations, threatened against or affecting the Company, or Luna
Innovations with respect to
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the Luna i–Monitoring Business. Except as
set forth in Schedule 4.8, there are no actions, suits,
proceedings or investigations at law or in equity before or by any
court or Governmental Entity, pending or, to the knowledge of Luna
Innovations, threatened against or affecting the Company, or Luna
Innovations with respect to the Luna i–Monitoring Business,
any of the Company’s officers or directors, any of the
Company’s properties, assets, operations or business, or the
transactions contemplated by this Agreement. There are no actions,
suits or proceedings pending in which the Company, or Luna
Innovations with respect to the Luna i–Monitoring Business,
is a plaintiff. Neither the Company, nor Luna Innovations with
respect to the Luna i–Monitoring Business, has engaged in or
been party to any action, suit, proceeding or investigation during
the five-year period prior to the date hereof. Neither the Company,
nor Luna Innovations with respect to the Luna i–Monitoring
Business, or any of the Company’s or Luna Innovations’
(with respect to the i–Monitoring Business) properties,
operations, business or assets, are subject to any judgment, order,
writ, injunction or decree of any kind of any court or any
Governmental Entity.
4.9 Agreements .
Schedule 4.9 of the Disclosure Schedule lists each agreement
or contract, oral or written (collectively, the “
Contracts ”), (i) to which the Company is a
party, by which the Company is bound or to which the Company is
subject, or (ii) to which Luna Innovations is a party or by
which Luna Innovations is bound or to which Luna Innovations is
subject arising out of, relating to or affecting the Luna
i–Monitoring Business, in each case including, but not
limited to, customer agreements listed in Schedule 4.9(a) of the
Disclosure Schedule, supplier agreements listed in Schedule 4.9(b)
of the Disclosure Schedule, agreements with respect to the
Intellectual Property Rights listed in Schedule 4.9(c) of the
Disclosure Schedule and agreements with Luna Innovations and any
affiliate of Luna Innovations listed in Schedule 4.9(d) of the
Disclosure Schedule.
Copies of all Contracts have been
delivered to the Purchaser and are true, complete and correct, and
all such Contracts are valid, subsisting agreements, in full force
and effect. Each such Contract will continue in full force and
effect in all material respects following the transactions
contemplated by this Agreement, in each case without the material
breach of any of the terms or conditions therein or the forfeiture
or impairment of any material rights thereunder or the payment of
any penalty or incurrment of any additional obligation or change of
any material terms, and without the necessity of consent of any
other Person or party. The Company and/or Luna Innovations, as
applicable, has performed all material obligations required to be
performed by it and is not in default under any Contract, nor, to
the best knowledge of Luna Innovations, is any other party to any
such Contract in default thereunder, nor does any condition exist
which with notice or lapse of time or both would constitute a
default thereunder. To Luna Innovations’ knowledge, there has
been no threatened cancellation of any such Contract nor is there
any outstanding dispute thereunder. To Luna Innovations’
knowledge, there exists no unperformed Contract, bid or contract
proposal made by the Company, or by Luna Innovations with respect
to the Luna i–Monitoring Business, which if performed,
accepted or entered into might have a Company Material Adverse
Effect. Each contract or agreement to which Luna Innovations or any
of its affiliates is a party or by which it is bound or to which it
is subject, arising out of, relating to or affecting the Luna
i–Monitoring Business in any material respect (each, a
“ Material LI Contract ”) is listed on
Schedule 4.9 of the Disclosure Schedule and will be
subcontracted by Luna Innovations to the Company after the Closing
Date pursuant to Section 6.4. Each such Material LI Contract
will continue in full force and effect in all material respects
following such transfer to the Purchaser and following the
transactions contemplated by this Agreement, in each case without
material breach of any of the terms and
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conditions therein or the forfeiture or
impairment of any material right thereunder or the payment of any
penalty or incurrment of any additional obligation or change of any
material terms, and without the necessity of consent of any other
Person or party.
4.10 Intellectual Property
.
(a) Upon the Closing, IHS Sub or the
Company shall own, or be licensed or otherwise possess legally
enforceable rights to use, all i–Monitoring Intellectual
Property, which constitutes all patents, trademarks, trade names,
service marks, copyrights, and all applications therefor,
schematics, inventions, technology, know-how, computer software
programs or applications, trade secrets and tangible or intangible
information, content, data or material that are used in the Luna
i–Monitoring Business (“ Intellectual Property
Assets ”). Except for commercially available
off-the-shelf computer software programs (“ Off-The-Shelf
Software ”), all right, title and interest in and to any
Intellectual Property Assets that ar
