ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") dated as of February 19, 2004, is between COLLECTORS UNIVERSE, INC., a Delaware corporation ("Seller"), and SPECTRUM NUMISMATICS INTERNATIONAL, INC., a California corporation, or its assignee ("Buyer").
R E C I T A L S :
A. Seller through unincorporated divisions (the "Divisions") owns and operates (i) a business under the trade name "Bowers & Merena" ("BaM"), which acquires Collectible Coins (as defined below), by purchase or consignment, and conducts internet, in-person and telephonic auctions at which such Collectible Coins are sold and, to a lesser extent, sells Collectible Coins by direct retail sales methods, (ii) a business under the trade name "Kingswood Coin Auctions" ("Kingswood"), which also acquires Collectible Coins, by purchase or consignment, and conducts internet, in-person and telephonic auctions at which such Collectible Coins are sold, and (iii) a business under the trade name "Superior Sports Auctions" ("SSA"), which acquires Collectible Sports Memorabilia (as defined below), by purchase or consignment, and conducts internet, in-person and telephonic auctions at which such Collectible Sports Memorabilia are sold and, to a lesser extent, sells Collectible Sports Memorabilia by direct retail sales methods (collectively, the "Auction Businesses").
B. Seller desires to sell and Buyer desires to purchase the Auction Businesses and the assets used in connection with the operation of the Auction Businesses that are identified in Section 2.1 hereof, and Buyer desires to license from Seller and Seller is willing to license to Buyer the rights to use certain other assets used in connection with the Auction Businesses as more fully set forth in Sections 2.1 and 2.7, all upon the terms and conditions contained in this Agreement.
C. Seller also owns and operates other businesses (hereinafter, the "Seller Retained Businesses") that are engaged in (i) the provision of grading and authentication and other services to collectors and dealers of Collectible Coins, collectible stamps, entertainment memorabilia, autographs and other collectibles; and (ii) the acquisition and sale (either by auction or by other means) of entertainment and historical memorabilia, autographs and other collectibles, including Collectible Coins, except that the Seller Retained Businesses do not conduct auctions of Collectible Coins or Sports Memorabilia (other than autographed Sports Memorabilia). Seller is not selling, but is retaining, the Seller Retained Businesses and Seller is not selling, but is licensing to Buyer, the use of certain assets that are used not only in the Auction Businesses, but also in or for the Seller Retained Businesses, all as more fully set forth hereinafter.
The parties therefore agree as follows:
When used in this Agreement, the following terms have the following meanings:
"Affiliate" means, with respect to any given Person, any other Person at the time directly or indirectly controlling, controlled by or under common control with that Person. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
"Auction Business Confidential Information" means information that is owned and used by Seller in the conduct of any of the Auction Businesses and is not publicly available, nor available from sources other than Seller and shall include, without limitation, the Auction Business Records (as defined below); provided , however , that each of the parties hereby acknowledges and agrees that neither the "Auction Business Confidential Information" nor the Auction Business Records (as defined below) shall include any of the following, any and all of which shall constitute (and be referred to hereinafter as) "Seller Retained Information": (a) the Licensed Information (as hereinafter defined); (b) the Proprietary Software, (c) except as otherwise set forth in Section 2.8(18) below, the Third Party Software Programs identified as such in Schedule 2.1(7) hereto and any documentation relating thereto; (d) information relating to the Auction Businesses accounts receivable or the Collectibles Inventory (as defined below), which are being retained by Seller and are not being purchased by Buyer; (e) information relating to the Seller Retained Liabilities (as defined in Section 2.3(1)); (f) the corporate records of Seller, including Sellers tax returns and information and financial data or financial statements prepared, compiled or maintained by or for Seller for purposes or in connection with the preparation of (i) its periodic reports or other filings under the Exchange Act or the Securities Act, (ii) its income or other tax returns or reports, or any other regulatory reports required to be filed by Seller, and (g) the Retained Business Information (as defined below in this Article 1).
"Auction Business Consignors" means (i) all Persons that consigned any Collectible Coins or Sports Memorabilia for sale at auctions conducted by any of the Auction Businesses prior to the Closing Date, (ii) any other Persons from whom any of the Auction Businesses sought, by written solicitation, to obtain consignments prior to the Closing Date, and (iii) any other Person who consigned Collectible Coins or Collectible Sports Memorabilia to the direct retail sales component of the Auction Businesses.
"Auction Business Customers" means (i) all Persons that purchased any Collectible Coins or Sports Memorabilia at auctions conducted by, or sold any Collectible Coins or Sports Memorabilia to, any of the Auction Businesses prior to the Closing Date, (ii) any other Persons to which any of the Auction Businesses invited, by written invitation, to participate as purchasers in any of the auctions conducted by any of the Auction Businesses, or from whom any of the Auction Businesses sought, by written solicitation, to purchase any Collectible Coins or Sports Memorabilia, prior to the Closing Date, in each case as reflected in the Auction Business Records (as hereinafter defined), and (iii) and any other Person who purchased Collectible Coins or Collectible Sports Memorabilia from or sold Collectible Coins or Collectible Sports Memorabilia to the direct retail sales component of the Auction Businesses.
"Auction Business Records" means all business and accounting records in the possession or control of Seller that relate to any of the Auction Businesses, including, without limitation, any such business or accounting records, and website and application content (including all data, files, graphics, text, articles and information used and all backups and associated documentation) on the Auction Businesses websites, and any database relating to or used in the Auction Businesses that is located on or accessible only in conjunction with any of the Third Party Software Programs located on all of the computers or servers listed on Schedule 2.1(11), or that is located on Sellers CUSQL01 server (possession of which records and data shall be transferred to Buyer in the manner described in Section 2.8(18) below); and including, but not limited to, (i) all historical auction records and data (other than the Licensed Information and the Proprietary Software) acquired, created or generated by or for and used in or by the Auction Businesses, such as, but not limited to auction prices realized and sale information, whether in electronic form or otherwise, concerning the previous auctions conducted by the Auction Businesses, any records or information relating to transactions between any of the Auction Businesses, on the one hand, and any Persons who are or were Auction Business Customers, Auction Business Consignors or Auction Business Vendors (even if they also are or were customers or vendors of the Seller Retained Businesses), and historical commission rates charged by or paid to the Auction Businesses by their consignors or customers; (ii) historical auction catalog data and promotional materials used in any of the Auction Businesses; (iii) outstanding proposals made by any of the Auction Businesses to acquire consignments of Collectible Coins or Collectible Sports Memorabilia to consignors or prospective consignors; (iv) any "want lists" of Auction Business Customers maintained by any of the Auction Businesses relating to Collectible Coins or Collectible Sports Memorabilia that their customers have informed them, in writing, that they desire to acquire; (v) the identities of prospective consignors or customers of the Auction Businesses to the extent maintained by any of the Auction Businesses, (vi) all logs of outgoing/incoming emails, (vii) website traffic and (viii) all other information relating to or
arising out of the operation of the Auction Businesses. Notwithstanding anything to the contrary contained in this definition or elsewhere in this Agreement, however, the Auction Business Records shall not include any of the information identified in clauses (a) through (g) in the definition of Auction Business Confidential Information set forth above.
"Buyer Indemnitees" means Buyer, each Affiliate of Buyer, and each of its respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing.
"Code" means the Internal Revenue Code of 1986, as amended, or any successor law, and regulations issued by the IRS pursuant thereto.
"Collectible Coins" means coins that derive much of their value from their age, physical condition, limited availability or uniqueness, or their association with famous or infamous historical events.
"Collectible Sports Memorabilia" means sports cards and sports memorabilia which derive much of their value from their age, physical condition, limited availability or uniqueness, or their association with popular or famous athletes or athletic events.
"Consent" means any approval, consent, ratification, filing, declaration, registration, waiver, or other authorization required to be obtained to enable either of the parties to enter into this Agreement or to consummate the transactions contemplated hereby.
"Contract" means any agreement, contract, obligation, promise, arrangement, or undertaking that is legally binding.
"Environmental Law" means any Law relating to the environment, natural resources, or public or employee health and safety, and includes the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq., the Clean Water Act, 33 U.S.C. 1251 et seq., the Clean Air Act, 33 U.S.C. 2601 et seq., the Toxic Substances Control Act, 15 U.S.C. 2601 et seq., the Oil Pollution Act of 1990, 33 U.S.C. 2701 et seq., and the Occupational Safety and Health Act, 29 U.S.C. 651 et seq.
"ERISA" means the Employee Retirement Income Security Act of 1974 or any successor law, and regulations and rules issued pursuant thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor law, and any rules or regulations issued pursuant thereto.
"GAAP" means generally accepted United States accounting principles.
"GMAI" means Greg Manning Auctions, Inc., of which Buyer is a wholly-owned subsidiary.
"Governmental Authority" means any (1) nation, state, county, city, town, village, district, (2) federal, state, local, municipal, foreign, or other government, (3) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal, including an arbitral tribunal), (4) multi-national organization or body, or (5) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing power of any nature.
"Hazardous Material" means any substance, material or waste which is regulated under Environmental Law, including, without limitation, any material, substance or waste that is defined as a "hazardous waste," "hazardous material," or "hazardous substance" under any provision of Environmental Law.
"Indemnifiable Losses" means all out of pocket losses, liabilities, taxes, damages, deficiencies, obligations, fines, out of pocket expenses, claims, demands, actions, suits, proceedings, judgments or settlements, whether or not resulting from third party claims, incurred or suffered by an indemnitee, including interest and penalties with respect thereto and reasonable out-of-pocket expenses and reasonable attorneys and accountants fees and disbursements incurred in the investigation or defense of any of the same or in asserting or enforcing any of the indemnitys rights hereunder.
"IRS" means the United States Internal Revenue Service or any successor agency, and, to the extent relevant, the United States Department of the Treasury.
"Law" means any federal, state, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty.
"Legal Proceeding" means any judicial, administrative or arbitral action, suit, claim, investigation or proceeding, whether at law or in equity, civil or criminal in nature, before a Governmental Authority.
"Licensed Information" shall mean the identities and contact information (as described in Section 2.1(5) hereof), of the Auction Business Customers, the Auction Business Consignors and the Auction Business Vendors, the possession and use of which Information is being licensed by Seller to Buyer pursuant to the Information License Agreement attached as Exhibit 2.1(5) hereto (the "Information License Agreement").
"Lien" means, with respect to the property of any Person, any claim, lien, pledge, option, charge, easement, security interest, deed of trust, mortgage, right-of-way, encroachment, building or use restriction, conditional sales agreement, encumbrance, whether voluntarily incurred or arising by operation of law, and includes, without limitation, any agreement to give any of the foregoing in the future, and any contingent sale or other title retention agreement or lease in the nature thereof.
"Material Adverse Effect" means:
(1) When used with reference to the Auction Businesses, a state of facts, event, consequence, result or change that materially and adversely affects, or would reasonably be expected to affect materially and adversely, the Auction Businesses considered as a whole or the Acquired Assets or the condition (financial or other), or operating results of the Auction Businesses considered as a whole or which would prevent Seller from consummating the transactions contemplated hereby; and
(2) When used with reference to the Buyer, a state of facts, event, consequence, result or change that materially and adversely affects, or would reasonably be expected to affect materially and adversely, the condition (financial or other) or operating results of Buyer or that would prevent Buyer from consummating the transactions contemplated hereby, including Buyers ability to deliver the GMAI Guaranty (as hereinabove defined).
"Order" means any award, decision, injunction, judgment, order, ruling, or verdict of any court, arbitral tribunal, administrative agency, or other Governmental Authority.
"Ordinary Course of Business" means, with respect to an action taken by a Person, that that action is (1) consistent with the past practices of that Person and taken in the ordinary course of the normal day-to-day operations of that Person, and (2) is not required under applicable law to be authorized by the board of directors of that Person (or by any Person or group of Persons exercising similar authority).
"Permits" means governmental licenses, permits, authorizations, franchises, certificates or rights required to operate the Auction Business.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, governmental body or authority or any other entity.
"Release" means any release, spill, emission, leaking, pumping, pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal, leaching, or migration on or into the indoor or outdoor environment or into or out of any property.
"Remedial Action" means all actions, including, without limitation, any capital expenditures, required by any Governmental Authority to (1) clean up, remove, treat, or in any other way address any Hazardous Material or other substance, (2) prevent the Release or threat of Release, or minimize the further Release of any Hazardous Material or other substance so it does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (3) perform pre-remedial studies and investigations or post-remedial monitoring, or (4) bring facilities on any property owned, operated or leased by Seller and the facilities located and operations conducted thereon into compliance with all Environmental Laws.
"Representative" means with respect to a particular Person, any director, officer, employee, agent, consultant, or advisor of that Person, including legal counsel, accountants, and financial advisors.
"Retained Business Information" means any information which is or has been used by or in the conduct of any of the Seller Retained Businesses, and not otherwise used by or in the conduct of the Auction Businesses, and which includes, but is not limited to, the following: (i) the identities of and other information about Persons who are or have been customers of one or more of the Seller Retained Businesses, but who are not Auction Business Consignors or Auction Business Customers (as defined below); (ii) information relating to transactions between any of the Seller Retained Businesses and any of their respective customers or vendors, even if any such customers or vendors also are or have been Auction Business Consignors or Auction Business Customers or Auction Business Vendors, but excluding information relating to transactions between any of the Auction Grading Businesses and such customers or vendors, which shall constitute Auction Business Confidential Information); (iii) any and all trade names, brand names or trade marks used by Seller (other than the tradenames which are being sold hereunder to Buyer and identified in Schedules 2.1(1), (2) and (3) hereto), (iv) any inventions, trade secrets, know-how (including collectibles grading, authentication and certification techniques) and all other intellectual property of or used in the conduct of or by any of the Seller Retained Businesses and any records, documents or notes relating thereto, (v) all business and strategic plans relating to, and all financial data and financial statements and projections and estimates of future operating results of any of the Seller Retained Businesses; and (vi) all other information relating to or arising out of the operations of any the Seller Retained Businesses, including information relating to Sellers employees, other than those identified in Schedule 5.1 hereto that are hired by and accept employment with Buyer.
"SEC" means the Securities and Exchange Commission.
"SEC Reports" means reports, schedules, statements and other documents filed by GMAI with the SEC under the Exchange Act during the period from July 1, 2001 to the date hereof.
"Securities Act" means the Securities Act of 1933, as amended, or any successor law, and rules or regulations issued pursuant thereto.
"Seller Indemnitees" means Seller, each Affiliate of Seller, and each of its respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing.
"Seller Retained Assets" shall mean the assets of Seller ownership of which is not being sold or transferred to Buyer pursuant to this Agreement.
"Seller Retained Businesses" means (i) Sellers collectibles grading, authentication or certification businesses, including those operated under the names "PCGS", PSA, PSA-DNA and PSE, (ii) the business operated by Odyssey Publications, Inc., a wholly owned subsidiary of Seller, and (iii) the business operated by David Hall Rare Coins, and also know as "DHRC, currently operated as a division of Seller.
"Third Party Software" means Navision, Lyris, Webtrends, Keynote (configuration files only), Ipswich Gold, Microsoft Exchange, Goldmine and all configuration files.
ARTICLE 2PURCHASE AND SALE
2.1 Acquired Assets. Seller will sell to Buyer, and Buyer will purchase from Seller, at Closing (as defined in Section 9.1 herein), all of Sellers rights, title and interests in and to the following assets and properties used in the operation of or otherwise in connection with the Auction Businesses, including the goodwill of such Businesses (collectively, the "Acquired Assets"):
(1) the trade name "Bowers and Merena" and any variation thereof, including, but not limited to, the trade names, "Auctions by Bowers and Merena", "Bowers and Merena Galleries, Inc.", "Bowers and Merena Research, Inc.", and all intellectual property rights and logos to the name "Bowers and Merena" owned by Seller as set forth on Schedule 2.1(1).
(2) the trade name "Kingswood Coin Auctions" and any variation thereof, and all intellectual property rights and logos to the name "Kingswood Coin Auctions" owned by Seller as set forth on Schedule 2.1(2).
(3) the trade name "Superior Sports Auctions" and any variation thereof, and all intellectual property rights and logos to the name "Superior Sports Auctions" owned by Seller as set forth on Schedule 2.1(3).
(4) all post office box addresses and access and the following telephone numbers used in connection with the conduct of the Auction Businesses, which includes: (800) 458-4646, (800) 222-5993 and (888) 337-4492, and Buyers right to retain (at Buyers expense following the Closing) placement in any directory or advertising associated with such telephone numbers and names of the Auction Businesses, and as set forth on Schedule 2.1(4).
(5) The rights to have and to use, on the terms and conditions set forth in the Information License Agreement, a copy of which is attached hereto as Exhibit 2.1(5) (the "Information License"), the identities (including name, address, phone number, email address and other contact information), in a Microsoft SQL Server Database format or printed format, of: (i) the Auction Business Customers, who are identified on Schedule 2.1(5)(A) hereto (the "Auction Business Customer List"); (ii) the Auction Business Consignors, who are identified on Schedule 2.1(5)(B) hereto (the "Auction Business Consignor List"); (iii) the Auction Businesses Vendors, who are identified on Schedule 2.1(5)(C) hereto (the "Auction Business Vendor List").
(6) all domain names and web site assets owned by Seller and used exclusively in the conduct of the Auction Businesses, including, without limitation, which are listed on Schedule 2.1(6) hereto (the "Auction Business Website Assets").
(7) a fully paid non-exclusive, non-transferable license entitling Buyer to use, after the Closing, the software programs developed and owned by and proprietary to Seller and used in the conduct of the Auction Businesses, which includes any proprietary software programs used in conjunction with the operation of any of the Auction Business web sites located at the URLs identified in Schedule 2.1(6) hereto, and any related technical manuals and written instructions that were developed or authored by Seller, its employees or otherwise acquired and owned by Seller (collectively the "Proprietary Software"), which consists of all of the software programs identified as "proprietary software" on Schedule 2.1(7) and related technical manuals and written instructions.
(8) all copyrights held by Seller for numismatics books, subject to the retention by Seller of a perpetual royalty free, non-transferable license entitling Seller to copy and insert any or all of such copyrighted material, in whole or in part, into the Sellers web sites for purposes of providing educational and other information to customers and clients of Sellers Retained Businesses (except that Seller may not use any such copyrighted material in connection with Sellers ownership or operation of DHRC), provided , however , that this license
shall not grant Seller any ownership or other rights in or to any of such copyrighted materials, and provided, further, however, that notwithstanding the restriction on transferability of such license, Seller shall be entitled to transfer such license to any Person to which it may sell or transfer any of the Seller Retained Businesses (whether such sale or transfer is effectuated by a sale of assets, a sale of shares or a merger or other reorganization); and Sellers entire inventory of (i) books offered for sale by BaM, as set forth on Schedule 2.1(8), and (ii) reference books, guides and catalogues identified set forth in Schedule 2.1(8) hereto, which consist of reference books, guides and catalogues used by one or more of the Auction Businesses to catalogue Collectible Coins and Sports Memorabilia (collectively, the "Coin and Collectible Library").
(9) The Auction Business Records (as defined above), whether created by Seller or acquired from any third party, whether in electronic form or hard copy, subject to the right of Seller to retain copies of such Auction Business Records in electronic form or otherwise, as are reasonably necessary for the purpose of defending against or otherwise relevant to, any claims by or against Seller or for any reporting requirements of Seller provided such purposes of or use by Seller are approved by Buyer, which approval shall not be unreasonably withheld or delayed by Buyer and which approval shall be deemed given if Seller has made a written request for copies of any such Auction Business Records and Buyer has failed to notify Seller of its disapproval within ten (10) days thereof.
(10) all of Sellers rights arising from and after the Closing under the Contracts relating to the conduct of the Auction Businesses which Buyer has agreed to assume, a list of which Contracts is set forth on Schedule 2.1(10) hereto (the "Assumed Contracts"), and which include, without limitation, (i) all contractual rights of Seller to hold auctions at contracted venues and to use trade show booths, and the advertising agreements, listed on Schedule 2.1(10) and (ii) the Settlement and Release Agreement dated December 5, 2003, entered into between Seller and Q. David Bowers ("Bowers"), and the New Confidentiality Agreement dated December 23, 2003, also between Seller and Bowers relating to the BaM Auction Business (collectively the "Bowers Agreements"), and (iii) the Settlement and Release Agreement dated December 17, 2003, entered into between Seller and Christine Karstedt ("Karstedt"), and the Confidentiality Agreement dated December 17, 2003, between Seller and Karstedt relating to the BaM Auction Business (collectively, the "Karstedt Agreements").
(11) the office furniture, fixtures and equipment identified in Schedule 2.1(11) hereto, which is utilized by Seller in the Auction Business, including without limitation all office furniture, fixtures and equipment located at 1 Sanctuary Boulevard, Suite 201, Mandeville, Louisiana 70471 and 3191 Logan Valley Road, Traverse City, Michigan 49684 and the "traveling auction show set-up" which consists of the laptop computers and software installed thereon described in Schedule 2.1(11) (the "Tangible Personal Property").
(12) an assignment of the lease to the certain warehouse space, totaling approximately 900 square feet and located at ONeil Storage, 2061 S. Ritchey Street, Santa Ana, California 92705, where some of the Auction Business Records are maintained.
(13) all of Sellers rights and remedies under warranty or otherwise, against a manufacturer, vendor, or other Person for any defects in any Acquired Asset.
(14) all of Sellers prepaid expenses, all materials (including all promotional materials, images and catalogues) and all work in process of Seller concerning the auctions scheduled to be held after the Closing Date as set forth on Schedule 2.1(14).
(15) all Permits used or required on the operation of the Auction Business if and to the extent that (i) such Permits are assignable under applicable law and (ii) Buyer has obtained any necessary Consents for the assignment thereof by Seller to Buyer. A list of such Permits is set forth in Schedule 2.1(15).
(16) the causes of action, claims, suits, proceedings, or demands, of whatsoever nature, of or held by Seller against any third parties arising out of or related to the Auction Businesses and which concern operation of the Auction Businesses after the Closing, all of which are listed on Schedule 2.1(16) (the "Assigned Claims").
(17) all promotional materials, photographs and images and stationary, that have been used by Seller in the conduct of any of the Auction Businesses.
(18) all goodwill associated with the Auction Businesses and the Acquired Assets.
(19) the items of intellectual property and other intangible assets used by Seller exclusively in the conduct of the Auction Businesses and listed in Schedule 2.1(19) hereto.
(20) Any other assets of Seller that are not identified above in this Section 2.1 that are used by Seller in the conduct of the Auction Businesses and which are reasonably necessary for the conduct of the Auction Businesses in the manner and to the extent to which Seller has conducted it prior to the Closing; provided that, in no event shall these other assets include (i) any of the assets included among the Excluded Assets as set forth in Section 2.2, (ii) the Seller Retained Information or (iii) the Retained Business Information.
2.2 Excluded Assets. Seller shall retain and not sell to Buyer, and Buyer will not purchase from Seller: (i) any of the Seller Retained Assets, and (ii) except for the rights being granted to Buyer under the Information License, any of the Licensed Information (collectively, the "Excluded Assets"), which shall include, without limitation:
(1) all of Sellers inventory of Collectible Coins and Sports Memorabilia (the "Auction Businesses Inventory");
(2) all of Sellers accounts, notes and other receivables and any other rights to payment, that arose, or may arise between the date hereof and the Closing, out of any of the operations of any of the Auction Businesses, including amounts payable by any insurers or under any manufacturer, supplier or vendor or consignor warranties, whether or not accrued and whether or not billed, and all of the proceeds thereof (collectively, the " Auction Business Accounts Receivable "), other than (i) the Auction Advances which Buyer has approved pursuant to Section 2.8(7), and (ii) the customer accounts outstanding as of the Closing Date under the BaM customer portfolio program described in Schedule 2.7(8) hereto (the "CPP Accounts"), which are being acquired by Buyer pursuant to Section 2.7(8) hereof, subject to the rights of Buyer as set forth in Paragraph 2.8(7)(b) below;
(3) Sellers cash on hand or in transit, bank deposits, and all of Sellers cash equivalents and securities or other investments;
(4) all books, records, files, and other documents relating to any of the Seller Retained Businesses or any of the operations thereof or included as part of the Licensed Information;
(5) all office furniture and equipment not acquired by Buyer pursuant to Section 2.1(11);
(6) Except for the rights being granted to Buyer under the Software License Agreement, the Proprietary Software; and Sellers web site assets (other than the website assets identified in Section A of Schedule 2.1(6), and the Proprietary Software identified in Schedule 2.1(7) that is used in conjunction with the operation of the Auction Businesses, which are being transferred or licensed to Buyer); and
(7) all other assets of Seller not identified as Acquired Assets in Section 2.1 hereto.
2.3 Assumption of Liabilities and Obligations.
(1) Retained Liabilities. Except for the Buyer Assumed Obligations set forth or referenced in Section 2.3(2) below, Seller shall retain and perform or otherwise discharge when due in accordance with their terms (without any liability, cost or expense to Buyer), the following liabilities or obligations, whether known or unknown, fixed or contingent, matured or unmatured, certain or uncertain, disclosed or undisclosed (the "Seller Retained Liabilities"):
(i) obligations and liabilities of Seller, including those of the Auction Businesses, that have or will have arisen prior to the Closing Date, including without limitation, all liabilities or obligations of Seller resulting from Sellers activities in operating the Auction Business prior to the Closing Date, and (ii) the obligations and liabilities of Seller arising from and after the Closing Date, other than the Buyer Assumed Obligations.
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