Legal OTL Document

LEGAL OTL DOCUMENT

This Operational Transfer and Liability Agreement (the "Agreement") is made and entered into as of Date: by and between Transferor Name: (the "Transferor") and Transferee Name: (the "Transferee").

RECITALS

WHEREAS, Transferor operates certain business operations, assets, contracts and related rights described herein and desires to transfer such operations and certain related assets and obligations to Transferee; and

WHEREAS, Transferee desires to accept the transfer of specified assets and to assume designated liabilities on the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, the parties intend by this Agreement to allocate responsibility and liability for post-transfer events and to provide contractual remedies for breaches and third-party claims arising from the transferred operations.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below:

"Transferred Assets" means all tangible and intangible assets transferred by Transferor to Transferee pursuant to Section 2, including, without limitation, equipment, inventory, customer lists, contracts and intellectual property rights expressly identified in Schedule A attached hereto and described in the Transferor Asset Description field below.

"Assumed Liabilities" means those liabilities expressly listed in Schedule B and those obligations arising after the Effective Date that are expressly assumed by Transferee pursuant to Section 3.

2. TRANSFER OF ASSETS

Subject to the terms and conditions of this Agreement, on the Effective Date Transferor shall transfer, convey and assign to Transferee all right, title and interest in and to the Transferred Assets free and clear of liens and encumbrances except as expressly set forth in Schedule C (Permitted Encumbrances). Transferor shall execute such further instruments of transfer and deliver such documents as reasonably requested by Transferee to effectuate the transfers contemplated by this Section 2.

3. ASSUMPTION OF LIABILITIES

Transferee shall assume, perform and discharge only the Assumed Liabilities described in Schedule B. Except as expressly assumed, Transferor shall retain responsibility for all liabilities arising from events or occurrences prior to the Effective Date. The allocation in this Section 3 constitutes an express bargained-for allocation of risk between the parties.

4. CONSIDERATION

As consideration for the transfers and assumptions under this Agreement, Transferee shall pay to Transferor the amount and on the payment terms set forth below. Payment shall be made in immediately available funds to an account designated in writing by Transferor.

5. REPRESENTATIONS AND WARRANTIES

5.1 Transferor Representations. Transferor represents and warrants to Transferee that: (a) Transferor has full power and authority to enter into and perform this Agreement; (b) the Transferred Assets are owned by Transferor free and clear of liens except as disclosed in Schedule C; (c) to Transferor's knowledge, there are no pending actions or governmental investigations that would reasonably be expected to impair Transferee's receipt or use of the Transferred Assets.

5.2 Transferee Representations. Transferee represents and warrants to Transferor that: (a) Transferee has full power and authority to enter into and perform this Agreement; and (b) acceptance of the Transferred Assets and assumption of the Assumed Liabilities will not, after giving effect to this Agreement, violate any material agreement, law or order applicable to Transferee.

6. INDEMNIFICATION

6.1 Transferor Indemnity. Transferor shall indemnify, defend and hold harmless Transferee and its affiliates from and against all losses, claims, damages, liabilities and expenses (including reasonable attorneys' fees) arising out of or resulting from any liability not expressly assumed by Transferee under this Agreement and arising from events or facts occurring prior to the Effective Date.

6.2 Transferee Indemnity. Transferee shall indemnify, defend and hold harmless Transferor and its affiliates from and against all losses, claims, damages, liabilities and expenses arising out of or resulting from the Assumed Liabilities and Transferee's use of the Transferred Assets after the Effective Date.

6.3 Claims Procedure. A party seeking indemnity under this Agreement shall give prompt written notice to the indemnifying party of any claim; provided, however, that failure to give prompt notice shall not relieve the indemnifying party of its obligations except to the extent the indemnifying party is materially prejudiced by such failure.

7. LIMITATION OF LIABILITY

Except for willful misconduct or fraud, neither party shall be liable to the other for incidental, consequential, punitive or special damages. The aggregate liability of each party for direct damages arising under this Agreement shall be limited to the amount of the Total Consideration actually paid by Transferee to Transferor hereunder.

8. INSURANCE

From the Effective Date, Transferee shall maintain insurance coverages customary for the industry and sufficient to cover the Assumed Liabilities. Upon reasonable request, Transferee shall provide Transferor certificates evidencing such insurance.

9. CONFIDENTIALITY

Each party shall keep confidential and not disclose to any third party any non-public information received from the other party in connection with this Agreement, except as required by law, court order or as necessary to perform obligations under this Agreement. Confidentiality obligations shall survive the termination of this Agreement for a period of three (3) years.

10. NOTICES

All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing and delivered to the addresses set forth below or to such other address as a party may designate by written notice to the other party. Notices shall be deemed given when delivered in person, one business day after delivery by nationally recognized overnight courier, or three business days after deposit in the United States mail, postage prepaid, certified or registered mail.

11. AMENDMENTS; WAIVER

No amendment or waiver of any provision of this Agreement shall be effective unless made in writing and signed by both parties. No failure or delay by either party in exercising any right shall operate as a waiver of that right.

12. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the state or jurisdiction specified below without regard to its conflict of law principles.

13. ENTIRE AGREEMENT

This Agreement (including all schedules and exhibits hereto) constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and negotiations, whether written or oral, relating to such subject matter.

14. SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, the remainder of this Agreement shall remain in full force and effect and such provision shall be reformed only to the extent necessary to make it enforceable.

15. COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures transmitted by electronic means shall be effective for all purposes.

16. MISCELLANEOUS PROVISIONS

The parties acknowledge that each has had the opportunity to seek independent legal counsel of its choosing in connection with this Agreement. The provisions of this Agreement that by their nature survive termination shall so survive, including representations, warranties, indemnities and confidentiality obligations.

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