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innerop/pro-seller-spa-analyzed.json

Created June 8, 2024 01:54
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{
"section_header": "Section VII.06. Successors and Assigns",
"analysis": [
{
"clause": "This Agreement shall be binding uponand shall inure to the benefit of the parties hereto and their respective successors and permitted
assigns. Neither party may assign its rights or obligations hereunder without the prior written
consent of the other party, which consent shall not be unreasonably withheld or delayed. No
assignment shall relieve the assigning party of any of its obligations hereunder.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 45 - Unfair methods of competition unlawful; prevention by Commission",
"conflict": "The clause requires prior written consent for assignment, which may conflict with certain federal laws that allow for assignment without such consent under specific circumstances.",
"relevance": "The Federal Trade Commission (FTC) may prevent unfair methods of competition. The FTC may determine that requiring prior written consent for assignment constitutes an unfair method of competition, especially if it unreasonably restrains trade or limits the ability of businesses to operate freely.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section45&num=0&edition=prelim"
},
{
"law": "11 U.S.C. § 365 - Executory contracts and unexpired leases",
"conflict": "The clause's requirement for prior written consent may be overridden by federal bankruptcy laws, which allow for the assignment of contracts under certain conditions without the need for such consent.",
"relevance": "Under federal bankruptcy law, a trustee in bankruptcy may assume or assign executory contracts and unexpired leases without the need for prior written consent from the other party. This directly conflicts with any clause that requires such consent.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section365&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1995.240",
"conflict": "The clause requires prior written consent for assignment, which may be unreasonably withheld or delayed, contrary to the law.",
"relevance": "California Civil Code Section 1995.240 prohibits the unreasonable withholding of consent for assignment. However, the clause allows for consent to be withheld or delayed, which may be deemed unreasonable under California law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1995.240&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-1107",
"conflict": "The clause does not specify a time frame for consent, which may conflict with state laws requiring timely responses.",
"relevance": "New York General Obligations Law § 5-1107 requires a timely response to requests for consent. However, the clause does not specify a time frame for consent, which could potentially conflict with New York's requirement for timely responses.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-1107"
}
]
}
}
]
}
{
"section_header": "Section III.07. Undisclosed Liabilities",
"analysis": [
{
"clause": "The Company has no liabilities, obligations orcommitments of a type required to be reflected on a balance sheet prepared in accordance with
GAAP, except (i) those which are adequately reflected or reserved against in the Balance Sheet
as of the Balance Sheet Date; and (ii) those which have been incurred in the ordinary course of
business since the Balance Sheet Date and which are not material in amount.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (2002).",
"conflict": "The Sarbanes-Oxley Act imposes stringent requirements on the accuracy and completeness of financial statements, which may conflict with the clause's exceptions for liabilities incurred in the ordinary course of business and not material in amount.",
"relevance": "The Sarbanes-Oxley Act imposes stringent requirements on the accuracy and completeness of financial statements. However, there is a clause that allows for certain liabilities to be excluded if they are not material or incurred in the ordinary course of business. This clause may not meet the stringent requirements imposed by the Sarbanes-Oxley Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter98&edition=prelim"
},
{
"law": "Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010).",
"conflict": "The Dodd-Frank Wall Street Reform and Consumer Protection Act requires comprehensive reporting and transparency in financial statements, which may conflict with the clause's exceptions for liabilities.",
"relevance": "The Dodd-Frank Act requires comprehensive reporting and transparency for financial statements. However, the clause's exceptions for liabilities that are not material or incurred in the ordinary course of business may not align with these comprehensive reporting and transparency requirements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title12/chapter53&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Corporations Code § 1501",
"conflict": "The clause requires liabilities to be reflected on a balance sheet prepared in accordance with GAAP, with certain exceptions. However, some state laws may impose additional requirements or different standards for financial reporting and liability disclosure.",
"relevance": "California Corporations Code § 1501 requires corporations to prepare and distribute annual financial statements to shareholders, which may include additional disclosures not required by GAAP. However, the clause's reliance on GAAP may not fully comply with California's additional disclosure requirements, potentially leading to conflicts in financial reporting obligations.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=1501"
},
{
"state": "New York",
"law": "New York Business Corporation Law § 624",
"conflict": "The clause's exceptions for liabilities incurred in the ordinary course of business and not material in amount may conflict with state laws that have stricter requirements for liability disclosure.",
"relevance": "New York Business Corporation Law § 624 mandates that corporations maintain and provide access to detailed financial records, including all liabilities, regardless of materiality. However, the clause's materiality threshold for liabilities may not align with New York's requirement for comprehensive financial record-keeping and disclosure, potentially leading to non-compliance.",
"url": "https://www.nysenate.gov/legislation/laws/BSC/624"
}
]
}
}
]
}
{
"section_header": "Section I.01. Purchase and Sale",
"analysis": [
{
"clause": "Subject to the terms and conditions set forth herein, atthe Closing, Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Shares, free and
clear of any lien, pledge, mortgage, deed of trust, security interest, charge, claim, easement,
encroachment or other similar encumbrance (each, an \"Encumbrance\").",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause requires the seller to transfer shares free and clear of any encumbrances, but certain federal laws may impose restrictions or obligations that could create encumbrances.",
"relevance": "The Securities Exchange Act of 1934 imposes restrictions and obligations on the transfer of shares. These restrictions and obligations could be considered encumbrances, thereby conflicting with the clause's requirement for shares to be free and clear of any encumbrances.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "Internal Revenue Code, 26 U.S.C. § 6321",
"conflict": "The clause requires the seller to transfer shares free and clear of any encumbrances, but certain federal laws may impose liens or claims that could create encumbrances.",
"relevance": "The Internal Revenue Code imposes federal tax liens on property, including shares. These tax liens could be considered encumbrances, thereby conflicting with the clause's requirement for shares to be free and clear of any encumbrances.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleF/chapter64/subchapterC&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 2881 (2023)",
"conflict": "The clause requires the Shares to be free and clear of all encumbrances, but certain state laws may impose statutory liens or other encumbrances that cannot be waived or removed by agreement.",
"relevance": "California Civil Code Section 2881 imposes statutory liens that cannot be waived or removed by agreement. This conflicts with the clause's requirement that Shares must be free and clear of all encumbrances.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=2881"
},
{
"state": "New York",
"law": "N.Y. Tax Law § 1821 (2023)",
"conflict": "The clause requires the Shares to be free and clear of all encumbrances, but certain state laws may impose tax liens that cannot be waived or removed by agreement.",
"relevance": "N.Y. Tax Law § 1821 imposes tax liens. This law conflicts with the clause's requirement for Shares to be free and clear of all encumbrances, as the tax liens may not be waived or removed by agreement.",
"url": "https://www.nysenate.gov/legislation/laws/TAX/1821"
}
]
}
}
]
}
{
"section_header": "Section II.01. Closing",
"analysis": [
{
"clause": "The closing of the transactions contemplated by this Agreement
(the \"Closing\") shall take place simultaneously with the execution of this Agreement on the date
hereof (the \"Closing Date\") at the offices of LAW FIRM NAME, ADDRESS, or remotely by
exchange of documents and signatures (or their electronic counterparts). The consummation of
the transactions contemplated by this Agreement shall be deemed to occur at 12:01 a.m. TIME
ZONE time on the Closing Date.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq.",
"conflict": "The clause allows for the closing to occur remotely by exchange of documents and signatures, including electronic counterparts. However, certain federal laws impose stricter requirements on electronic signatures and remote transactions.",
"relevance": "The Electronic Signatures in Global and National Commerce Act (E-SIGN Act) imposes requirements on the validity and enforceability of electronic signatures and records. However, the clause's provision for remote closing and electronic signatures may not meet the E-SIGN Act's requirements for consumer consent, record retention, and other conditions, potentially rendering the electronic signatures invalid.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter96&edition=prelim"
},
{
"law": "Uniform Time Act of 1966, 15 U.S.C. § 260a",
"conflict": "The clause specifies that the consummation of the transactions shall be deemed to occur at 12:01 a.m. TIME ZONE time on the Closing Date. This could conflict with federal regulations on time-sensitive transactions.",
"relevance": "The Uniform Time Act of 1966 regulates the observance of time zones and daylight saving time. However, the clause's specification of a time zone for the consummation of transactions may not align with federal regulations on time observance, potentially causing legal ambiguities or conflicts.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter6&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1633.7 (California Civil Code Section 1633.7)",
"conflict": "The clause allows for the closing to occur remotely by exchange of documents and signatures (or their electronic counterparts), which may conflict with state laws that require physical presence or notarization for certain transactions.",
"relevance": "California Civil Code Section 1633.7 requires certain transactions to be conducted with physical presence or notarization, which may not be satisfied by electronic counterparts as allowed in the clause.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1633.7&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-701 (New York General Obligations Law Section 5-701)",
"conflict": "The clause specifies that the consummation of the transactions shall be deemed to occur at 12:01 a.m. TIME ZONE time on the Closing Date, which may conflict with state laws that have specific requirements for the timing of transaction consummation.",
"relevance": "New York General Obligations Law Section 5-701 requires certain transactions to be consummated within specific time frames that may not align with the 12:01 a.m. timing specified in the clause.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-701"
}
]
}
}
]
}
{
"section_header": "Section III.06. Financial Statements",
"analysis": [
{
"clause": "Copies of the Company's audited financialstatements consisting of the balance sheet of the Company as at FISCAL YEAR END DATE in
each of the years YEAR 1, YEAR 2 and YEAR 3 and the related statements of income and
retained earnings, stockholders' equity and cash flow for the years then ended (the \"Financial
Statements\") are included in the Disclosure Schedules/have been delivered to Buyer/have been
made available to Buyer in Seller's virtual data room maintained by DATA ROOM PROVIDER
NAME on behalf of Seller for purposes of this Agreement. The Financial Statements have been
prepared in accordance with generally accepted accounting principles in effect in the United
States from time to time (\"GAAP\"), applied on a consistent basis throughout the period
involved. The Financial Statements fairly present in all material respects the financial condition
of the Company as of the respective dates they were prepared and the results of the operations of
the Company for the periods indicated. For purposes of this Agreement, the balance sheet of the
Company as of MOST RECENT FISCAL YEAR END DATE is referred to herein as the
\"Balance Sheet\" and the date thereof as the \"Balance Sheet Date.\"",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (2002).",
"conflict": "The Sarbanes-Oxley Act imposes stricter requirements on the accuracy and reliability of financial statements, which may conflict with the clause's assertion that the financial statements 'fairly present in all material respects the financial condition of the Company.'",
"relevance": "The Sarbanes-Oxley Act imposes stricter requirements on the accuracy and reliability of financial statements. The clause's assertion that the financial statements 'fairly present in all material respects the financial condition of the Company' may not meet these stricter requirements, leading to potential legal conflicts.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter98&edition=prelim"
},
{
"law": "Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010).",
"conflict": "The Dodd-Frank Wall Street Reform and Consumer Protection Act requires additional disclosures and transparency in financial reporting, which may not be fully addressed by the clause.",
"relevance": "The Dodd-Frank Act requires additional disclosures and transparency in financial reporting. However, the clause may not fully address these requirements, leading to potential legal conflicts.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title12/chapter53&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Corporations Code § 1501",
"conflict": "The clause requires financial statements to be prepared according to GAAP, but some state laws may have different or additional requirements for financial reporting.",
"relevance": "California Corporations Code § 1501 requires corporations to prepare and distribute annual financial statements to shareholders. These statements may include additional disclosures that are not required by Generally Accepted Accounting Principles (GAAP).",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=1501"
},
{
"state": "New York",
"law": "New York Business Corporation Law § 624",
"conflict": "The clause specifies the use of a virtual data room for disclosure, but some state laws may have specific requirements for the handling and disclosure of financial information.",
"relevance": "New York Business Corporation Law § 624 mandates specific procedures for the inspection of corporate books and records. These procedures may conflict with the use of a virtual data room as specified in the clause.",
"url": "https://www.nysenate.gov/legislation/laws/BSC/624"
}
]
}
}
]
}
{
"section_header": "Section VII.05. Entire Agreement",
"analysis": [
{
"clause": "This Agreement constitutes the sole and entireagreement of the parties to this Agreement with respect to the subject matter contained herein,
and supersedes all prior and contemporaneous representations, warranties, understandings and
agreements, both written and oral, with respect to such subject matter. In the event of any
inconsistency between the statements in the body of this Agreement, any exhibits, and the
Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure
Schedules), the statements in the body of this Agreement will control.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Federal Arbitration Act, 9 U.S.C. §§ 1-16",
"conflict": "The clause's assertion that it constitutes the sole and entire agreement and supersedes all prior agreements may conflict with federal laws that protect certain pre-existing rights or obligations.",
"relevance": "The Federal Arbitration Act mandates the enforcement of arbitration agreements. However, a clause that asserts it supersedes all prior agreements may conflict with this Act. If there was a prior arbitration agreement between the parties, such a clause could be seen as an attempt to nullify it, which would be contrary to federal law.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title9&edition=prelim"
},
{
"law": "Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461",
"conflict": "The clause's assertion that it supersedes all prior agreements may conflict with federal laws that protect certain pre-existing rights or obligations.",
"relevance": "ERISA protects employee benefits and retirement plans. The clause's assertion that it supersedes all prior agreements may conflict with ERISA, which protects employee benefits and retirement plans. If there were prior agreements related to employee benefits, this clause could be seen as attempting to nullify those protections, which would be contrary to federal law.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1668",
"conflict": "The clause may be negatively aligned with state laws that enforce implied warranties or representations despite the language of the agreement.",
"relevance": "California Civil Code Section 1668 prohibits contracts that exempt anyone from responsibility for their own fraud, willful injury, or violation of law, even if the contract states otherwise.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1668.&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Bus. Law § 349",
"conflict": "The clause may conflict with state laws that require certain disclosures or representations to be made regardless of the contract terms.",
"relevance": "New York General Business Law Section 349 requires businesses to engage in truthful and non-deceptive practices. This law may override contract terms that attempt to disclaim prior representations or warranties.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/349"
}
]
}
}
]
}
{
"section_header": "Section III.04. No Subsidiaries",
"analysis": [
{
"clause": "The Company does not own, or have any interest in anyshares or have an ownership interest in any other corporation, partnership, joint venture, limited
liability company, unincorporated organization, trust, association, or other entity.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 78m - Periodical and other reports",
"conflict": "The clause states that the company does not own or have any interest in various entities, which may conflict with laws that require disclosure of such interests.",
"relevance": "Corporations are required by law to file periodical reports and disclose ownership interests. This legal requirement contradicts any clause that states the company does not own or have any interest in other entities.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78m&num=0&edition=prelim"
},
{
"law": "15 U.S.C. § 18 - Acquisition by one corporation of stock of another",
"conflict": "The clause may conflict with antitrust laws that scrutinize ownership and interest in other entities to prevent anti-competitive practices.",
"relevance": "The law restricts corporations from acquiring stock or assets in other entities to prevent anti-competitive practices. This may be at odds with the clause stating that the company does not own or have any interest in such entities.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section18&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Corp. Code § 1502 (2023)",
"conflict": "The clause states that the company does not own or have any interest in various entities, which may conflict with state laws that require disclosure of such interests.",
"relevance": "Corporations must disclose ownership interests and affiliations with other entities. The clause asserts that the company does not own or have any interest in other entities, which may be seen as non-compliance with California's requirement for disclosure of such interests.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1502.&lawCode=CORP"
},
{
"state": "New York",
"law": "N.Y. Bus. Corp. Law § 408 (2023)",
"conflict": "The clause may conflict with state laws that mandate transparency and disclosure of ownership interests in various entities.",
"relevance": "Corporations are required to disclose ownership interests and affiliations with other entities. The clause's assertion that the company does not own or have any interest in other entities may be at odds with New York's legal requirements for transparency and disclosure of such interests.",
"url": "https://www.nysenate.gov/legislation/laws/BSC/408"
}
]
}
}
]
}
{
"section_header": "Section III.01. Organization and Authority of Seller",
"analysis": [
{
"clause": "Seller is a corporation dulyorganized, validly existing and in good standing under the Laws (as defined in Section 3.05) of
the state of STATE. Seller has all necessary corporate power and authority to enter into this
Agreement, to carry out its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery by Seller of this Agreement, the performance
by Seller of its obligations hereunder, and the consummation by Seller of the transactions
contemplated hereby have been duly authorized by all requisite corporate action on the part of
Seller. This Agreement constitutes a legal, valid and binding obligation of Seller enforceable
against Seller in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors' rights
generally and by general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Bankruptcy Code, 11 U.S.C. §§ 101-1532",
"conflict": "The enforceability of the Agreement may be limited by federal bankruptcy laws.",
"relevance": "The clause asserts that the Agreement is a binding obligation enforceable against the Seller, but the Bankruptcy Code can impose automatic stays and discharge obligations, thereby limiting enforceability.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title11&edition=prelim"
},
{
"law": "Insolvency Statutes, 11 U.S.C. §§ 101-1532",
"conflict": "The enforceability of the Agreement may be affected by federal insolvency laws.",
"relevance": "Insolvency statutes affect the enforceability of agreements. The clause asserts that the Agreement is enforceable, but insolvency statutes can alter or nullify contractual obligations, thus negatively impacting enforceability.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title11&edition=prelim"
},
{
"law": "Reorganization Provisions, 11 U.S.C. §§ 1101-1174",
"conflict": "The enforceability of the Agreement may be limited by federal reorganization laws.",
"relevance": "The clause asserts that the Agreement is enforceable, but reorganization provisions can modify or discharge contractual obligations, thereby limiting enforceability.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title11&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Insolvency Law, Cal. Civ. Code § 3439 et seq.",
"conflict": "The clause asserts that the Agreement is enforceable against the Seller in accordance with its terms, subject to limitations such as bankruptcy and insolvency laws.",
"relevance": "California Insolvency Law provides provisions that can affect the enforceability of agreements during insolvency proceedings. The law can override the enforceability of the Agreement as stated in the clause, particularly in cases of insolvency, thus limiting the binding nature of the Agreement.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=CIV&division=4.&title=2.&part=2.&chapter=1.&article=1."
},
{
"state": "New York",
"law": "New York Debtor and Creditor Law, N.Y. Debt. & Cred. Law § 270 et seq.",
"conflict": "The clause asserts that the Agreement is a binding obligation of the Seller, subject to general principles of equity.",
"relevance": "New York Debtor and Creditor Law includes provisions that can affect the enforceability of agreements based on principles of equity. The law can impose equitable considerations that may limit the enforceability of the Agreement, thus challenging the assertion that the Agreement is a binding obligation of the Seller.",
"url": "https://www.nysenate.gov/legislation/laws/DCD"
}
]
}
}
]
}
{
"section_header": "Section VI.06. Tax Treatment of Indemnification Payments",
"analysis": [
{
"clause": "All indemnificationpayments made under this Agreement shall be treated by the parties as an adjustment to the
Purchase Price for Tax purposes, unless otherwise required by Law.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "26 U.S.C. § 61 - Gross Income Defined",
"conflict": "The clause treats indemnification payments as adjustments to the Purchase Price for tax purposes, which may conflict with certain IRS regulations.",
"relevance": "According to 26 U.S.C. § 61, gross income is defined as all income from whatever source derived, which includes indemnification payments. However, there is a potential conflict as the IRS may consider indemnification payments as taxable income rather than adjustments to the Purchase Price, which contradicts the clause's treatment.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section61&num=0&edition=prelim"
},
{
"law": "26 U.S.C. § 162 - Trade or Business Expenses",
"conflict": "The clause's treatment of indemnification payments may conflict with the IRS's specific rules on the tax treatment of such payments.",
"relevance": "Section 162 of the U.S. Internal Revenue Code allows for deductions of ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business. This may include indemnification payments. However, there is a potential conflict as the IRS may require these indemnification payments to be treated as deductible business expenses rather than adjustments to the Purchase Price, which could be contrary to the clause's treatment.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section162&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Rev. & Tax. Code § 17041",
"conflict": "The clause stipulates that indemnification payments should be treated as an adjustment to the Purchase Price for tax purposes unless otherwise required by law. However, certain state laws may have specific provisions that contradict this treatment.",
"relevance": "The California Revenue and Taxation Code mandates a particular method for handling indemnification payments for tax purposes. This requirement may conflict with a clause that specifies these payments should be treated as adjustments to the Purchase Price.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=17041&lawCode=RTC"
},
{
"state": "New York",
"law": "N.Y. Tax Law § 612",
"conflict": "The clause's stipulation may conflict with state-specific tax regulations that have different requirements for the treatment of indemnification payments.",
"relevance": "New York Tax Law mandates a different tax treatment for indemnification payments that may not be consistent with treating them as adjustments to the Purchase Price.",
"url": "https://www.nysenate.gov/legislation/laws/TAX/612"
}
]
}
}
]
}
{
"section_header": "Section I.03. Withholding Taxes",
"analysis": [
{
"clause": "Buyer shall be entitled to deduct and withhold fromamounts otherwise payable pursuant to this Agreement such amounts as are required to be
deducted and withheld under applicable law. Buyer shall provide Seller with written notice of its
intent to withhold at least ten (10) days prior to the Closing with a written explanation
substantiating the requirement to deduct or withhold, and the parties shall use commercially
reasonable efforts to cooperate to mitigate or eliminate any such withholding to the maximum
extent permitted by law. Assuming Seller delivers the certificate described in Section 2.02(c),
Buyer acknowledges and agrees that no withholding is required as of the date hereof. To the
extent that amounts are so withheld and paid over to the appropriate tax authority by the Buyer,
such withheld amounts shall be treated for all purposes of this Agreement as having been paid to
the person in respect of which such deduction and withholding was made.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "26 U.S.C. § 1445 - Withholding of tax on dispositions of United States real property interests",
"conflict": "The clause's requirement for the Buyer to provide written notice of intent to withhold at least ten (10) days prior to the Closing may conflict with certain federal tax laws that require immediate withholding without prior notice.",
"relevance": "Section 1445 of Title 26 of the United States Code requires the immediate withholding of tax on dispositions of United States real property interests without prior notice. The clause's notice requirement conflicts with this immediate withholding requirement, as Section 1445 does not allow for a ten-day notice period.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section1445&num=0&edition=prelim"
},
{
"law": "26 U.S.C. § 3402 - Income tax collected at source",
"conflict": "The clause's provision for cooperation to mitigate or eliminate withholding may conflict with federal tax laws that mandate specific withholding amounts and do not allow for mitigation or elimination.",
"relevance": "26 U.S.C. § 3402 mandates specific withholding amounts for income tax collected at source. The clause's cooperation effort to mitigate or eliminate withholding conflicts with the mandatory withholding requirements under 26 U.S.C. § 3402, which do not permit such mitigation or elimination.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section3402&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Rev. & Tax. Code § 18662",
"conflict": "The clause's requirement for the Buyer to provide written notice of intent to withhold at least ten (10) days prior to the Closing may conflict with state laws that have different notice requirements or do not mandate such notice.",
"relevance": "The California Revenue and Taxation Code requires withholding on certain payments to non-residents without a specific notice period. The clause's ten (10) day notice requirement may not align with California's withholding requirements, which do not specify such a notice period.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=18662"
},
{
"state": "New York",
"law": "N.Y. Tax Law § 671",
"conflict": "The clause's assumption that no withholding is required if the Seller delivers a certificate may conflict with state laws that have different criteria for withholding exemptions.",
"relevance": "New York Tax Law requires withholding on certain payments unless specific conditions are met. However, the assumption that no withholding is required if the Seller delivers a certificate may not align with New York's criteria for withholding exemptions, which may have additional or different requirements.",
"url": "https://www.nysenate.gov/legislation/laws/TAX/671"
}
]
}
}
]
}
{
"section_header": "Section V.03. Confidentiality",
"analysis": [
{
"clause": "Buyer acknowledges and agrees that the ConfidentialityAgreement, dated as of DATE, between Buyer and Seller (the \"Confidentiality Agreement\")
remains in full force and effect and, in addition, covenants and agrees to keep confidential, in
accordance with the provisions of the Confidentiality Agreement, information provided to Buyer
pursuant to this Agreement.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Freedom of Information Act (FOIA), 5 U.S.C. § 552",
"conflict": "The clause requires the Buyer to keep information confidential, but certain federal laws may mandate disclosure of information under specific circumstances, which could conflict with the confidentiality obligation.",
"relevance": "Federal agencies are required to disclose information requested by the public unless it falls under specific exemptions. This requirement is mandated by the Freedom of Information Act (FOIA). However, this could create a conflict with the Buyer's obligation to keep information confidential under an Agreement if the Buyer is a federal agency or if the information is later held by a federal agency.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title5/part1/chapter5/subchapter2&edition=prelim"
},
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause requires the Buyer to keep information confidential, but certain federal laws may require disclosure of information for regulatory or legal compliance purposes.",
"relevance": "Public companies are required to disclose material information to the public and regulatory bodies. This requirement is mandated by the Securities Exchange Act. However, this obligation could potentially conflict with a Buyer's duty to maintain confidentiality under an Agreement, especially if the Buyer is a public company or if the information in question is material and must be disclosed.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Consumer Privacy Act (CCPA), Cal. Civ. Code § 1798.100 et seq.",
"conflict": "The clause requires the Buyer to keep all information confidential, but certain state laws mandate disclosure under specific circumstances.",
"relevance": "The California Consumer Privacy Act (CCPA) requires businesses to disclose certain personal information to consumers upon request. However, this requirement may conflict with clauses that mandate the confidentiality of all information, as the CCPA's disclosure obligations could be seen as contradictory to such confidentiality requirements.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?division=3.&part=4.&lawCode=CIV&title=1.81.5"
},
{
"state": "New York",
"law": "New York Civil Practice Law and Rules (CPLR), N.Y. C.P.L.R. § 3101",
"conflict": "The clause's requirement for confidentiality may conflict with state laws that mandate disclosure of certain information in legal proceedings.",
"relevance": "The New York Civil Practice Law and Rules (CPLR) requires the disclosure of all material and necessary information in legal proceedings. This requirement could override any confidentiality agreement, such as a clause that requires the Buyer to keep information confidential, because the CPLR mandates the disclosure of relevant information in legal contexts.",
"url": "https://www.nysenate.gov/legislation/laws/CVP/3101"
}
]
}
}
]
}
{
"section_header": "Section IV.03. Investment Purpose",
"analysis": [
{
"clause": "Buyer is acquiring the Shares solely for its ownaccount for investment purposes and not with a view to, or for offer or sale in connection with,
any distribution thereof or any other security related thereto within the meaning of the Securities
Act of 1933, as amended (the \"Securities Act\"). Buyer acknowledges that Seller has not
registered the offer and sale of the Shares under the Securities Act or any state securities laws,
and that the Shares may not be pledged, transferred, sold, offered for sale, hypothecated or
otherwise disposed of except pursuant to the registration provisions of the Securities Act or
pursuant to an applicable exemption therefrom and subject to state securities laws and
regulations, as applicable. Buyer is able to bear the economic risk of holding the Shares for an
indefinite period (including total loss of its investment), and has sufficient knowledge and
experience in financial and business matters so as to be capable of evaluating the merits and risk
of its investment.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Act of 1933, 15 U.S.C. § 77a et seq.",
"conflict": "The clause requires the buyer to acknowledge that the shares are not registered under the Securities Act of 1933 and that they are being acquired for investment purposes only, not for distribution. However, the Securities Act of 1933 mandates that securities must be registered unless they qualify for an exemption.",
"relevance": "The Securities Act of 1933 requires the registration of securities unless an exemption applies. The clause's assertion that the shares are not registered and are for investment purposes only may conflict with the Act's registration requirements unless a valid exemption applies.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2A&edition=prelim"
},
{
"law": "Uniform Securities Act, 15 U.S.C. § 77r",
"conflict": "The clause implies that the buyer must bear the economic risk of the investment for an indefinite period, which may conflict with state securities laws that have specific provisions to protect investors from such risks.",
"relevance": "The Uniform Securities Act provides investor protections against indefinite economic risk. However, the clause's requirement for the buyer to bear economic risk for an indefinite period may be at odds with state laws designed to protect investors from such risks.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2A&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Corporations Code § 25110",
"conflict": "The clause requires the buyer to acknowledge the economic risk and the potential for total loss, which may conflict with state laws that impose stricter investor protection standards.",
"relevance": "California Corporations Code § 25110 prohibits the offer or sale of securities in California unless the sale has been qualified or is exempt from qualification. The clause's reliance on the buyer's acknowledgment of economic risk and non-registration may not satisfy California's stricter qualification requirements for securities sales.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=25110"
},
{
"state": "New York",
"law": "New York General Business Law § 352-e",
"conflict": "The clause's emphasis on the buyer's financial and business experience may conflict with state laws that require additional disclosures or protections for less experienced investors.",
"relevance": "New York General Business Law § 352-e requires detailed disclosures for the sale of securities to ensure investor protection. However, the clause's reliance on the buyer's financial and business experience may not meet New York's requirements for detailed disclosures, potentially leaving less experienced investors inadequately protected.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/352-E"
}
]
}
}
]
}
{
"section_header": "Section III.19. Brokers",
"analysis": [
{
"clause": "Except for BROKER, FINDER, OR INVESTMENTBANKER NAME, no broker, finder or investment banker is entitled to any brokerage, finder's
or other fee or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Seller.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 78o - Registration and regulation of brokers and dealers",
"conflict": "The clause states that no broker, finder, or investment banker is entitled to any fee or commission, which may conflict with federal laws that protect the rights of brokers and finders to receive compensation for their services.",
"relevance": "15 U.S.C. § 78o requires the registration and regulation of brokers and dealers, including their entitlement to fees and commissions. The clause in the agreement attempts to negate the entitlement of brokers, finders, or investment bankers to fees or commissions, which may be in conflict with the federal law that ensures their right to such compensation.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78o&num=0&edition=prelim"
},
{
"law": "Cal. Bus. & Prof. Code § 10131 - Definition of Real Estate Broker",
"conflict": "The clause may conflict with state laws that protect the rights of brokers and finders to receive compensation for their services.",
"relevance": "California Business and Professions Code Section 10131 defines the rights and entitlements of real estate brokers, including their right to fees and commissions. However, a clause in the agreement attempts to negate the entitlement of brokers, finders, or investment bankers to fees or commissions, which may be in conflict with the state law that ensures their right to such compensation.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=10131."
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Business and Professions Code § 10131",
"conflict": "The clause states that no broker, finder, or investment banker is entitled to any fee or commission, which may conflict with state laws that protect the rights of brokers to receive compensation for their services.",
"relevance": "California Business and Professions Code § 10131 requires brokers to be compensated for their services in real estate transactions. However, the clause in the agreement denies any entitlement to fees or commissions, which directly conflicts with the state law that mandates compensation for brokers.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=10131&lawCode=BPC"
},
{
"state": "New York",
"law": "New York Real Property Law § 442-d",
"conflict": "The clause may be in conflict with state laws that ensure brokers are compensated for their services, even if the agreement states otherwise.",
"relevance": "New York Real Property Law § 442-d ensures that brokers are entitled to commissions for their services. However, the clause in the agreement denies any entitlement to fees or commissions, which directly conflicts with the state law.",
"url": "https://www.nysenate.gov/legislation/laws/RPP/442-D"
}
]
}
}
]
}
{
"section_header": "Section III.05. No Conflicts or Consents",
"analysis": [
{
"clause": "The execution, delivery and performance bySeller of this Agreement, and the consummation of the transactions contemplated hereby, do not
and will not: (a) violate or conflict with any provision of the certificate of incorporation or
by-laws of Seller or the Company; (b) violate or conflict with any provision of any Law or
Governmental Order applicable to Seller or the Company; (c) except as set forth in Section 3.05
of the Disclosure Schedules, require the consent, notice or other action by any Person under,
violate or conflict with, or result in the acceleration of any Material Contract; or (d) except as
set forth in Section 3.05 of the Disclosure Schedules, require any consent, permit, Governmental
Order, filing or notice from, with or to any Governmental Authority; except, in the cases of
clauses (b) and (c), where the violation, conflict, acceleration or failure to obtain consent or give
notice would not have a Material Adverse Effect and, in the case of clause (d), where such
consent, permit, Governmental Order, filing or notice which, in the aggregate, would not have a
Material Adverse Effect. For purposes of this Agreement: (i) \"Law\" means any statute, law,
ordinance, regulation, rule, code, order, constitution, treaty, common law or other requirement or
rule of law of any Governmental Authority; (ii) \"Governmental Order\" means any order, writ,
judgment, injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority; (iii) \"Governmental Authority\" means any federal, state, local or
foreign government or political subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any arbitrator, court or tribunal of competent jurisdiction;(iv) \"Person\" means an individual, corporation, partnership, joint venture, limited liability
company, Governmental Authority, unincorporated organization, trust, association or other
entity; and (v) \"Material Adverse Effect\" means any event, occurrence, fact, condition or
change that is materially adverse to the business, results of operations, financial condition or
assets of the Company, taken as a whole.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (2002)",
"conflict": "The clause asserts that the execution, delivery, and performance of the Agreement by the Seller will not violate any provision of any Law or Governmental Order applicable to the Seller or the Company. However, certain federal laws may impose requirements that could conflict with this assertion.",
"relevance": "The Sarbanes-Oxley Act of 2002 imposes requirements on corporate governance and financial practices. However, it is important to note that the Act may impose additional requirements on the Seller or the Company, which could potentially conflict with the assertion that the Agreement will not violate any provision of any Law or Governmental Order.",
"url": "https://uscode.house.gov/"
},
{
"law": "Hart-Scott-Rodino Antitrust Improvements Act of 1976, Pub. L. No. 94-435, 90 Stat. 1383 (1976)",
"conflict": "The clause asserts that the execution, delivery, and performance of the Agreement by the Seller will not require any consent, permit, Governmental Order, filing, or notice from or to any Governmental Authority. However, certain federal laws may require such actions.",
"relevance": "The Hart-Scott-Rodino Antitrust Improvements Act of 1976 requires pre-merger notification and waiting period requirements. This conflicts with the assertion that no such actions are required, as the Act may necessitate the Seller or the Company to file pre-merger notifications and observe waiting periods.",
"url": "https://uscode.house.gov/"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Business and Professions Code § 16600",
"conflict": "The clause asserts that no consent, notice, or other action by any Person under any Material Contract is required, and that no violation or conflict with any Law or Governmental Order will occur. However, certain state laws may impose additional requirements or restrictions.",
"relevance": "California Business and Professions Code § 16600 prohibits any contract that restrains anyone from engaging in a lawful profession, trade, or business of any kind. The clause may conflict with this law if any Material Contract includes non-compete clauses or other restrictive covenants that are not enforceable under California law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=16600"
},
{
"state": "New York",
"law": "New York General Business Law § 899-aa",
"conflict": "The clause asserts that no consent, notice, or other action by any Governmental Authority is required, and that no violation or conflict with any Law or Governmental Order will occur. However, certain state laws may impose additional requirements or restrictions.",
"relevance": "New York General Business Law § 899-aa requires businesses to notify affected individuals and certain government agencies in the event of a data breach. The clause may conflict with this law if the Seller or Company experiences a data breach and fails to provide the required notices, thereby violating state law.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/899-AA"
}
]
}
}
]
}
{
"section_header": "Section V.04. Public Announcements",
"analysis": [
{
"clause": "Unless otherwise required by applicable Law, noparty to this Agreement shall make any public announcements in respect of this Agreement or
the transactions contemplated hereby without the prior written consent of the other party (which
consent shall not be unreasonably withheld, conditioned or delayed), and the parties shall
cooperate as to the timing and contents of any such announcement.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause restricts public announcements without prior written consent, which may conflict with certain disclosure requirements under federal securities laws.",
"relevance": "The Securities Exchange Act of 1934 requires public companies to disclose material information to the public. However, the clause's restriction on public announcements without prior written consent may hinder compliance with these mandatory disclosure requirements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "Dodd-Frank Wall Street Reform and Consumer Protection Act, 12 U.S.C. § 5301 et seq.",
"conflict": "The clause's restriction on public announcements may conflict with whistleblower protections under federal law.",
"relevance": "The Dodd-Frank Wall Street Reform and Consumer Protection Act protects whistleblowers who disclose information about securities law violations. However, the clause's restriction on public announcements without prior written consent may conflict with these protections, potentially discouraging the reporting of securities law violations.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title12/chapter53&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Gov't Code § 6250-6270 (California Public Records Act)",
"conflict": "The clause restricts public announcements without prior written consent, which may conflict with state laws ensuring freedom of speech and transparency in certain transactions.",
"relevance": "The California Public Records Act ensures public access to information concerning the conduct of the people's business. However, the clause's restriction on public announcements without prior written consent may conflict with the Act's emphasis on transparency and public access to information, especially if the agreement involves public entities or matters of public interest.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=GOV&division=7.&title=1.&part=&chapter=3.5.&article="
},
{
"state": "New York",
"law": "N.Y. Lab. Law § 740 (New York Whistleblower Protection Act)",
"conflict": "The clause's requirement for prior written consent for public announcements may conflict with state laws that protect whistleblowers and their right to disclose information.",
"relevance": "The New York Whistleblower Protection Act protects employees who disclose information about illegal or unsafe practices. However, the clause's restriction on public announcements without prior written consent could be seen as a barrier to whistleblowers who are protected under this law, potentially discouraging the disclosure of important information about illegal or unsafe practices.",
"url": "https://www.nysenate.gov/legislation/laws/LAB/740"
}
]
}
}
]
}
{
"section_header": "Section VII.02. Notices",
"analysis": [
{
"clause": "All notices, claims, demands and other communicationshereunder shall be in writing and shall be deemed to have been given: (a) when delivered by
hand (with written confirmation of receipt); (b) when received by the addressee if sent by a
nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or
email of a PDF document (with confirmation of transmission) if sent during normal business
hours of the recipient, and on the next business day if sent after normal business hours of the
recipient; or (d) on the third/NUMBER day after the date mailed, by certified or registered
mail, return receipt requested, postage prepaid, if sent to the respective parties at the following
addresses (or at such other address for a party as shall be specified in a notice given in
accordance with this Section 7.02): If to Seller: SELLER ADDRESS
Facsimile: FAX NUMBER
Email: EMAIL ADDRESS
Attention: TITLE OF OFFICER TO RECEIVE NOTICES
with a copy (which shall not SELLER LAW FIRM ADDRESS
constitute notice) to: Facsimile: FAX NUMBER
Email: EMAIL ADDRESS
Attention: ATTORNEY NAME
If to Buyer: BUYER ADDRESS
Facsimile: FAX NUMBER
Email: EMAIL ADDRESS
Attention: TITLE OF OFFICER TO RECEIVE NOTICES
with a copy (which shall not BUYER LAW FIRM ADDRESS
constitute notice) to:
Facsimile: FAX NUMBER
Email: EMAIL ADDRESS
Attention: ATTORNEY NAME",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Electronic Signatures in Global and National Commerce Act (E-SIGN Act), 15 U.S.C. §§ 7001-7031",
"conflict": "The clause's requirement for written confirmation of receipt for hand delivery may conflict with federal laws that recognize electronic signatures and records.",
"relevance": "The E-SIGN Act recognizes electronic signatures and records as valid and enforceable. However, the clause's insistence on written confirmation of receipt for hand delivery may not align with the E-SIGN Act's provisions that electronic records and signatures are legally valid, potentially making the clause overly restrictive.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter96&edition=prelim"
},
{
"law": "Uniform Electronic Transactions Act (UETA), 15 U.S.C. § 7002",
"conflict": "The clause's specific methods of delivery and confirmation requirements may conflict with federal laws that provide broader definitions and acceptance of electronic communications.",
"relevance": "The Uniform Electronic Transactions Act (UETA) provides legal recognition of electronic records, signatures, and contracts. However, the clause's detailed requirements for delivery methods and confirmations may not align with UETA's broader acceptance of electronic communications. This could potentially make the clause unnecessarily restrictive and not in compliance with federal standards.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter96&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1633.15 (California Civil Code Section 1633.15)",
"conflict": "The clause's provision for email and facsimile notices may conflict with state laws that require certain types of notices to be delivered by more traditional means.",
"relevance": "California Civil Code Section 1633.15 requires certain notices to be delivered by traditional means such as mail or in-person delivery. The clause allows for email and facsimile notices, which may not be considered valid under this California law for certain types of notices.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1633.15&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-701 (New York General Obligations Law Section 5-701)",
"conflict": "The clause's provision for email and facsimile notices may conflict with state laws that require certain types of notices to be delivered by more traditional means.",
"relevance": "New York General Obligations Law § 5-701 requires certain contracts to be in writing and signed by the party to be charged. However, the clause allows for email and facsimile notices, which may not meet the 'in writing and signed' requirement under this New York law for certain types of contracts.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-701"
}
]
}
}
]
}
{
"section_header": "Section IV.04. Brokers",
"analysis": [
{
"clause": "Except for BROKER, FINDER, OR INVESTMENTBANKER NAME, no broker, finder, or investment banker is entitled to any brokerage, finder's
or other fee or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Buyer.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 78o - Registration and regulation of brokers and dealers",
"conflict": "The clause states that no broker, finder, or investment banker is entitled to any fee or commission, which may conflict with federal laws that protect the rights of brokers and finders to receive compensation for their services.",
"relevance": "Brokers and dealers must be registered and regulated to ensure fair compensation practices. The clause's blanket statement that no broker, finder, or investment banker is entitled to any fee or commission may be seen as an attempt to circumvent the regulatory framework established by 15 U.S.C. § 78o, which aims to protect the rights of brokers and dealers to fair compensation.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78o&num=0&edition=prelim"
},
{
"law": "Cal. Bus. & Prof. Code § 10131 - Definition of a Real Estate Broker",
"conflict": "The clause may conflict with state laws that protect the rights of brokers and finders to receive compensation for their services.",
"relevance": "Real estate brokers are entitled to compensation for services rendered in connection with real estate transactions. However, the clause's assertion that no broker, finder, or investment banker is entitled to any fee or commission may be in direct conflict with state laws like California Business and Professions Code Section 10131, which entitles real estate brokers to compensation for their services.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=10131"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Bus. & Prof. Code § 10131",
"conflict": "The clause states that no broker, finder, or investment banker is entitled to any fee or commission, which may conflict with state laws that protect the rights of brokers and finders to receive compensation for their services.",
"relevance": "The California Business and Professions Code requires brokers to be compensated for their services. However, the clause in the agreement denies any entitlement to fees or commissions for brokers, which directly conflicts with California law that mandates compensation for brokers.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=10131&lawCode=BPC"
},
{
"state": "New York",
"law": "N.Y. Gen. Bus. Law § 359-e",
"conflict": "The clause denies any entitlement to fees or commissions for finders, which may conflict with state laws that recognize and protect the rights of finders to receive compensation.",
"relevance": "New York General Business Law recognizes the right of finders to receive compensation. However, the clause in the agreement denies any entitlement to fees or commissions for finders, which directly conflicts with New York law that recognizes and protects the rights of finders to be compensated.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/359-E"
}
]
}
}
]
}
\{
"section_header": "Section IV.06. Independent Investigation",
"analysis": [
{
"clause": "Buyer has conducted its own independentinvestigation, review and analysis of the Company, and acknowledges that it has been provided
adequate access to the personnel, properties, assets, premises, books and records and other
documents and data of Seller and the Company for such purpose. Buyer acknowledges and
agrees that: (a) in making its decision to enter into this Agreement and to consummate the
transactions contemplated hereby, Buyer has relied solely upon its own investigation and the
express representations and warranties of Seller set forth in ARTICLE III of this Agreement
(including related portions of the Disclosure Schedules); and (b) none of Seller, the Company or
any other Person has made any representation or warranty as to Seller, the Company or this
Agreement, except as expressly set forth in Article III of this Agreement (including the related
portions of the Disclosure Schedules).",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause limits the Buyer's reliance on representations and warranties to those expressly set forth in the Agreement, which may conflict with federal securities laws that impose broader disclosure obligations.",
"relevance": "The Securities Exchange Act of 1934 requires full and fair disclosure of all material information. However, the clause restricts the Buyer's reliance to specific representations and warranties, potentially excluding other material information that federal securities laws require to be disclosed.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "Uniform Commercial Code (UCC) § 1-304",
"conflict": "The clause's limitation on reliance may conflict with state laws that impose duties of good faith and fair dealing, which require parties to act honestly and not mislead each other.",
"relevance": "UCC § 1-304 imposes an obligation of good faith in the performance and enforcement of contracts. However, the clause's limitation on reliance could be seen as undermining the duty of good faith by allowing the Seller to withhold material information not expressly covered by the Agreement.",
"url": "https://www.law.cornell.edu/ucc"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1572 (Deceit Defined)",
"conflict": "The clause places the burden of investigation and reliance solely on the Buyer, which may conflict with state laws that impose a duty of disclosure on the Seller.",
"relevance": "The clause implies that the Buyer cannot rely on any representations outside of those expressly stated in the Agreement. This may conflict with California's requirement that the Seller must not deceive the Buyer, which implies a broader duty of disclosure.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1572.&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Bus. Law § 349 (Deceptive Acts and Practices Unlawful)",
"conflict": "The clause's limitation on reliance may conflict with state laws that protect buyers from fraudulent misrepresentations.",
"relevance": "The Seller must not engage in deceptive acts or practices. However, the clause limits the Buyer's reliance to specific representations in the Agreement. This limitation may conflict with New York's broader protection against deceptive acts and practices, implying that the Buyer could rely on other representations or omissions.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/349"
}
]
}
}
]
}
{
"section_header": "Section IV.05. Legal Proceedings",
"analysis": [
{
"clause": "Except as set forth in Section 4.05 of the DisclosureSchedules, there are no Actions pending or, to Buyer's knowledge, threatened against or by
Buyer that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated
by this Agreement.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause asserts that there are no pending or threatened actions against the Buyer that could affect the transaction, except as disclosed. However, certain federal laws may impose obligations or restrictions that could indirectly challenge or delay the transaction.",
"relevance": "The Securities Exchange Act of 1934 imposes reporting and disclosure obligations on companies involved in securities transactions. However, if the Buyer is subject to an investigation or enforcement action under this Act, it could challenge or delay the transaction, contrary to the clause's assertion.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "Clayton Act, 15 U.S.C. § 12 et seq.",
"conflict": "The clause does not account for potential antitrust actions that could be initiated by federal authorities, which could challenge or delay the transaction.",
"relevance": "The Clayton Act prohibits certain mergers and acquisitions that may substantially lessen competition or tend to create a monopoly. If the transaction is subject to antitrust review under the Clayton Act, it could be challenged or delayed, contrary to the clause's assertion.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter1&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Civil Code § 1572 - Actual Fraud",
"conflict": "The clause asserts that there are no pending or threatened actions against the Buyer that could delay the transaction, except as disclosed. However, certain state laws may impose additional disclosure requirements or have different standards for what constitutes a 'threatened' action.",
"relevance": "California Civil Code § 1572 defines actual fraud, which includes the suppression of a fact by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact. The clause in the agreement may be negatively aligned with this law if the Buyer fails to disclose any pending or threatened actions that should be disclosed under California's definition of actual fraud. This could lead to legal challenges based on non-disclosure or misleading information.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1572&lawCode=CIV"
},
{
"state": "New York",
"law": "New York General Business Law § 349 - Deceptive Acts and Practices Unlawful",
"conflict": "The clause may not fully comply with state laws that require more comprehensive disclosure of pending or threatened actions.",
"relevance": "New York General Business Law § 349 prohibits deceptive acts and practices in the conduct of any business, trade, or commerce or in the furnishing of any service in New York. If the Buyer fails to disclose any pending or threatened actions that could be considered deceptive under this law, the clause may be negatively aligned with New York's requirements for fair business practices.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/349"
}
]
}
}
]
}
{
"section_header": "Section VII.07. Amendment and Modification; Waiver",
"analysis": [
{
"clause": "This Agreement mayonly be amended, modified or supplemented by an agreement in writing signed by each party
hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly
set forth in writing and signed by the party so waiving. No failure to exercise or delay in
exercising, any right or remedy arising from this Agreement shall operate or be construed as a
waiver thereof. No single or partial exercise of any right or remedy hereunder shall preclude any
other or further exercise thereof or the exercise of any other right or remedy.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Uniform Commercial Code § 2-209: Modification, Rescission and Waiver",
"conflict": "The clause requires all amendments, modifications, and waivers to be in writing and signed by the parties involved. However, certain federal laws recognize oral modifications and waivers under specific circumstances.",
"relevance": "Uniform Commercial Code § 2-209 allows modifications and waivers without a written agreement under certain conditions. This contradicts the clause's requirement for all changes to be in writing and signed by the parties.",
"url": "https://www.law.cornell.edu/ucc/2/2-209"
},
{
"law": "Restatement (Second) of Contracts § 84: Promise to Perform a Duty in Spite of Non-Occurrence of a Condition",
"conflict": "The clause stipulates that no failure or delay in exercising any right or remedy shall be construed as a waiver. However, certain federal laws may interpret repeated failures to exercise rights as an implied waiver.",
"relevance": "The Restatement (Second) of Contracts § 84 recognizes implied waivers through conduct. However, this contradicts the clause's assertion that no failure or delay in exercising rights shall be construed as a waiver.",
"url": "https://www.law.cornell.edu/wex/restatements"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1698",
"conflict": "The clause requires all amendments, modifications, and waivers to be in writing and signed by the parties, which may conflict with state laws that recognize oral modifications or waivers under certain conditions.",
"relevance": "California Civil Code Section 1698 allows for oral modifications to written contracts under certain conditions. However, a clause that requires all modifications to be in writing and signed by the parties conflicts with California law. This is because California law permits oral modifications if they are supported by new consideration or if the parties' conduct demonstrates a modification.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1698.&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 15-301",
"conflict": "The clause's strict requirement for written waivers may conflict with state laws that recognize implied waivers through conduct.",
"relevance": "N.Y. Gen. Oblig. Law § 15-301 recognizes implied waivers through conduct. However, the clause requires waivers to be explicitly set forth in writing and signed by the waiving party, which conflicts with New York law that allows for waivers to be implied through the conduct of the parties.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/15-301"
}
]
}
}
]
}
{
"section_header": "Section V.05. Further Assurances",
"analysis": [
{
"clause": "Following the Closing, each of the parties heretoshall, and shall cause their respective Affiliates to, execute and deliver such additional
documents and instruments and take such further actions as may be reasonably required to carry
out the provisions hereof and give effect to the transactions contemplated by this Agreement.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 78n - Proxies",
"conflict": "The clause requires parties and their affiliates to execute and deliver additional documents and take further actions as reasonably required, which may conflict with certain federal laws that impose restrictions on post-closing obligations.",
"relevance": "15 U.S.C. § 78n imposes restrictions on the solicitation of proxies, consents, or authorizations in respect of any security registered pursuant to section 78l of this title. The clause's requirement for parties and their affiliates to execute and deliver additional documents and take further actions may conflict with the restrictions imposed by 15 U.S.C. § 78n on post-closing obligations related to securities.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "15 U.S.C. § 18 - Acquisition by one corporation of stock of another",
"conflict": "The clause's requirement for further actions and document execution may conflict with federal antitrust laws that restrict certain post-closing activities.",
"relevance": "15 U.S.C. § 18 prohibits acquisitions that may substantially lessen competition or tend to create a monopoly. The clause's requirement for further actions and document execution may lead to post-closing activities that are restricted under 15 U.S.C. § 18, potentially resulting in antitrust violations.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter1&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1654",
"conflict": "The clause requires parties and their affiliates to execute additional documents and take further actions post-closing, which may conflict with state laws that limit the enforceability of such broad obligations.",
"relevance": "California Civil Code Section 1654 states that in cases of uncertainty not resolved by the preceding rules, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist. This law could be used to argue that any ambiguity in the requirement for additional documents and actions should be interpreted against the party that drafted the agreement, potentially limiting the enforceability of such broad obligations.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1654"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-701",
"conflict": "The clause's requirement for parties to take further actions may conflict with state laws that restrict the imposition of additional obligations post-closing.",
"relevance": "New York General Obligations Law Section 5-701 requires certain agreements to be in writing and signed by the party to be charged, or by their lawful agent, if they are not to be performed within one year from the making of the agreement. This law could be interpreted to mean that any requirement for additional documents or actions that extend beyond one year must be explicitly stated in the original agreement, potentially invalidating broad post-closing obligations.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-701"
}
]
}
}
]
}
{
"section_header": "Section VII.09. Counterparts",
"analysis": [
{
"clause": "This Agreement may be executed in counterparts,each of which shall be deemed an original, but all of which together shall be deemed to be one
and the same agreement. A signed copy of this Agreement delivered by email or other means of
electronic transmission shall be deemed to have the same legal effect as delivery of an original
signed copy of this Agreement.
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers thereunto duly authorized.
SELLER NAME
By_____________________
NAME
TITLE
BUYER NAME
By_____________________
NAME
TITLE",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Electronic Signatures in Global and National Commerce Act (E-SIGN Act), 15 U.S.C. §§ 7001-7031",
"conflict": "The clause allows for the execution of the agreement via electronic transmission, which may conflict with certain federal laws that require original signatures for specific types of agreements.",
"relevance": "The E-SIGN Act requires certain types of agreements to have original signatures. However, the clause in the agreement allows for electronic signatures, which may not be valid for all types of agreements under the E-SIGN Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter96&edition=prelim"
},
{
"law": "Uniform Electronic Transactions Act (UETA), 7A U.L.A. 21 (1999)",
"conflict": "The clause's provision for electronic signatures may conflict with state laws that have stricter requirements for certain types of contracts.",
"relevance": "The Uniform Electronic Transactions Act (UETA) allows the use of electronic signatures, but it includes certain exceptions and requirements. However, if a clause in an agreement does not meet these specific exceptions and requirements, the electronic signatures may be deemed invalid.",
"url": "https://www.law.cornell.edu/ucc"
}
],
"potentially_conflicting_state_laws": [
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-701",
"conflict": "The clause allows for the execution of the agreement via electronic transmission, which may not be recognized as valid in certain jurisdictions.",
"relevance": "New York General Obligations Law Section 5-701 requires certain agreements to be in writing and signed by the party to be charged. However, there may be a conflict with the clause's assertion that electronic copies have the same legal effect as original signed copies, as the law may not recognize electronic signatures or counterparts as valid for certain types of agreements.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-701"
},
{
"state": "California",
"law": "Cal. Civ. Code § 1624",
"conflict": "The clause's provision for electronic signatures may not be enforceable under this state's statute of frauds.",
"relevance": "California Civil Code Section 1624 requires certain contracts to be in writing and signed by the party to be charged. However, there is a potential conflict with the statute of frauds in California, which may not recognize electronic signatures for certain types of contracts. This conflicts with the clause's assertion that electronic copies have the same legal effect as original signed copies.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1624.&lawCode=CIV"
}
]
}
}
]
}
{
"section_header": "Section VII.04. Severability",
"analysis": [
{
"clause": "If any term or provision of this Agreement is invalid,illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other term or provision of this Agreement.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Federal Arbitration Act, 9 U.S.C. §§ 1-16",
"conflict": "The clause attempts to preserve the enforceability of the remaining provisions of the agreement even if one part is found invalid, illegal, or unenforceable. However, certain federal laws may require the entire agreement to be voided if any part is found to be non-compliant.",
"relevance": "The Federal Arbitration Act may require the entire agreement to be voided if any part is found to be non-compliant. However, the clause in the agreement seeks to preserve the enforceability of the remaining provisions, which may conflict with the requirements of the Federal Arbitration Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title9&edition=prelim"
},
{
"law": "Federal Trade Commission Act, 15 U.S.C. §§ 41-58",
"conflict": "The clause aims to maintain the enforceability of the rest of the agreement even if one part is invalid. However, certain consumer protection laws may require the entire contract to be voided if any part is found to be unfair or deceptive.",
"relevance": "The Federal Trade Commission Act may require the entire contract to be voided if any part is found to be unfair or deceptive. However, the clause in the agreement seeks to preserve the enforceability of the remaining provisions, which may conflict with the requirements of the Federal Trade Commission Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1670.5",
"conflict": "The clause asserts that the invalidity, illegality, or unenforceability of any term in one jurisdiction does not affect the validity of other terms. However, some state laws may require that if a key provision is found invalid, the entire agreement may be rendered void.",
"relevance": "California Civil Code Section 1670.5 allows a court to refuse to enforce the entire contract if a term is found to be unconscionable. This law negatively aligns with the clause because it provides the court with the discretion to invalidate the entire agreement if a key provision is found unconscionable, contrary to the clause's assertion that other terms remain unaffected.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1670.5&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-1401",
"conflict": "The clause suggests that the invalidity of one term does not affect the rest of the agreement. However, some state laws may require that if a critical provision is invalid, the entire contract may be unenforceable.",
"relevance": "N.Y. Gen. Oblig. Law § 5-1401 allows a court to refuse to enforce the entire contract if a term is found to be invalid. This law negatively aligns with the clause because it provides the court with the discretion to invalidate the entire agreement if a key provision is found invalid, contrary to the clause's assertion that other terms remain unaffected.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-1401"
}
]
}
}
]
}
{
"section_header": "Section VII.03. Interpretation; Headings",
"analysis": [
{
"clause": "This Agreement shall be construedwithout regard to any presumption or rule requiring construction or interpretation against the
party drafting an instrument or causing any instrument to be drafted. The headings in this
Agreement are for reference only and shall not affect the interpretation of this Agreement.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Restatement (Second) of Contracts § 206 (1981)",
"conflict": "The clause attempts to negate the 'contra proferentem' rule, which is a common principle in contract law.",
"relevance": "Restatement (Second) of Contracts § 206 states that in case of ambiguity, the interpretation is generally against the party who supplied the term. However, the clause in the Agreement seeks to avoid this rule by stating that no presumption or rule should be applied against the drafting party, which is directly contrary to the principle established in the Restatement.",
"url": "https://www.ali.org/publications/show/contracts/"
},
{
"law": "Uniform Commercial Code § 1-303 (2017)",
"conflict": "The clause's attempt to disregard headings in the interpretation of the Agreement may conflict with certain statutory requirements that headings be considered.",
"relevance": "Uniform Commercial Code § 1-303 provides that course of performance, course of dealing, and usage of trade are relevant to the interpretation of the agreement, which may include headings. However, the clause in the Agreement states that headings are for reference only and should not affect interpretation. This may conflict with the UCC's broader interpretative principles that could consider headings as part of the context.",
"url": "https://www.law.cornell.edu/ucc"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1654",
"conflict": "The clause states that the Agreement should be interpreted without any bias against the drafting party, but certain state laws may impose a contra proferentem rule, which requires ambiguities to be interpreted against the drafter.",
"relevance": "California Civil Code Section 1654 requires that ambiguities in a contract be interpreted against the party who caused the uncertainty to exist. This law directly contradicts the clause's assertion that the Agreement should be interpreted without any bias against the drafting party.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1654"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 15-301",
"conflict": "The clause states that headings are for reference only and do not influence the interpretation of the Agreement, but some state laws may consider headings as part of the contract's context.",
"relevance": "New York General Obligations Law § 15-301 may consider headings as part of the contract's context in certain circumstances. This law potentially contradicts the clause's assertion that headings are for reference only and do not influence the interpretation of the Agreement.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/15-301"
}
]
}
}
]
}
{
"section_header": "Section III.12. Insurance",
"analysis": [
{
"clause": "Section 3.12 of the Disclosure Schedules sets forth a list, asof the date hereof, of all material insurance policies maintained by the Company or with respect
to which the Company is a named insured or otherwise the beneficiary of coverage (collectively,
the \"Insurance Policies\"). Such Insurance Policies are in full force and effect on the date of this
Agreement and all premiums due on such Insurance Policies have been paid, except as would not
have a Material Adverse Effect.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq.",
"conflict": "The clause asserts that all material insurance policies are in full force and effect and that all premiums have been paid, except where it would not have a Material Adverse Effect. However, certain federal laws impose strict requirements on insurance coverage and premium payments that may not align with this exception.",
"relevance": "ERISA imposes strict requirements on insurance coverage and premium payments for employee benefit plans. However, the clause's exception for Material Adverse Effect may not be sufficient to comply with ERISA's stringent requirements, potentially leading to non-compliance issues.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18&edition=prelim"
},
{
"law": "Patient Protection and Affordable Care Act (ACA), 42 U.S.C. § 18001 et seq.",
"conflict": "The clause's assertion that all premiums have been paid except where it would not have a Material Adverse Effect may conflict with federal laws that require timely payment of insurance premiums without exceptions.",
"relevance": "The Affordable Care Act (ACA) requires the timely payment of insurance premiums. However, the clause's exception for Material Adverse Effect may not be recognized under the ACA, which could lead to potential penalties or loss of coverage.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter157&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Ins. Code § 676.10 (West 2023)",
"conflict": "The clause asserts that all material insurance policies are in full force and effect and that all premiums have been paid, except as would not have a Material Adverse Effect. However, certain state laws may impose additional requirements or conditions that could affect the validity or enforceability of these assertions.",
"relevance": "California Insurance Code Section 676.10 requires insurers to provide a notice of cancellation or nonrenewal of certain insurance policies under specific conditions. This law could negatively impact the clause by introducing additional conditions under which an insurance policy might not be in full force and effect, thereby contradicting the assertion that all material insurance policies are in full force and effect.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=676.10&lawCode=INS"
},
{
"state": "New York",
"law": "N.Y. Ins. Law § 3426 (McKinney 2023)",
"conflict": "The clause asserts that all premiums due on such Insurance Policies have been paid, except as would not have a Material Adverse Effect. However, certain state laws may impose additional requirements or conditions that could affect the validity or enforceability of these assertions.",
"relevance": "N.Y. Ins. Law § 3426 requires insurers to provide a notice of cancellation, nonrenewal, or conditional renewal of certain insurance policies under specific conditions. This law could negatively impact the clause by introducing additional conditions under which an insurance policy might not be in full force and effect, thereby contradicting the assertion that all material insurance policies are in full force and effect.",
"url": "https://www.nysenate.gov/legislation/laws/ISC/3426"
}
]
}
}
]
}
{
"section_header": "Section I.02. Purchase Price",
"analysis": [
{
"clause": "The aggregate purchase price for the Shares shall be$NUMBER (the \"Purchase Price\"). Buyer shall pay the Purchase Price to Seller at the Closing
in cash by wire transfer of immediately available funds in accordance with the wire transfer
instructions set forth in Section 1.02 of the Disclosure Schedules. The term \"Disclosure
Schedules\" means the disclosure schedules, attached hereto and made a part hereof, delivered by
Seller and Buyer concurrently with the execution and delivery of this Agreement.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Bank Secrecy Act, 31 U.S.C. §§ 5311-5332",
"conflict": "The clause requires the payment to be made by wire transfer at the Closing, which may conflict with anti-money laundering regulations that impose stringent requirements on wire transfers.",
"relevance": "The Bank Secrecy Act imposes stringent requirements on wire transfers to prevent money laundering. The clause's requirement for payment by wire transfer at the Closing may not comply with these stringent requirements, potentially leading to legal issues.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title31/subtitle4/chapter53&edition=prelim"
},
{
"law": "Expedited Funds Availability Act, 12 U.S.C. §§ 4001-4010",
"conflict": "The clause's requirement for immediate availability of funds may conflict with federal regulations that govern the timing and availability of funds in wire transfers.",
"relevance": "The Expedited Funds Availability Act regulates the timing and availability of funds in wire transfers. However, the clause's requirement for immediate availability of funds may not align with these regulations, potentially causing delays or legal complications.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title12/chapter41&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Fin. Code § 2000 et seq.",
"conflict": "The clause requires immediate wire transfer of funds at the Closing, which may conflict with state laws that impose additional requirements or restrictions on wire transfers.",
"relevance": "The California Financial Code imposes additional requirements and restrictions on wire transfers. The clause's requirement for immediate wire transfer at the Closing may not comply with these additional state-imposed requirements, potentially causing delays or legal issues.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=FIN&division=1.1.&title=&part=&chapter=1.&article="
},
{
"state": "New York",
"law": "N.Y. Gen. Bus. Law § 349",
"conflict": "The clause's definition of 'Disclosure Schedules' may conflict with state laws that require specific disclosures in a different format or timing.",
"relevance": "New York General Business Law requires specific disclosures in a different format or timing. The clause's definition of 'Disclosure Schedules' may not meet the specific format or timing requirements mandated by New York law, potentially rendering the disclosures non-compliant.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/349"
}
]
}
}
]
}
{
"section_header": "Section VI.07. Exclusive Remedies",
"analysis": [
{
"clause": "The parties acknowledge and agree that from andafter the Closing their sole and exclusive remedy with respect to any and all claims (other than
claims arising from intentional fraud on the part of a party hereto in connection with the
transactions contemplated by this Agreement) for any breach of any representation, warranty,
covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of
this Agreement shall be pursuant to the indemnification provisions set forth in this ARTICLE VI.
In furtherance of the foregoing, each party hereby waives, from and after the Closing, to the
fullest extent permitted under Law, any and all rights, claims and causes of action for any breach
of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise
relating to the subject matter of this Agreement it may have against the other parties hereto and
their Affiliates arising under or based upon any Law, except pursuant to the indemnification
provisions set forth in this Article VI. Nothing in this Section 6.07 shall limit any Person's right
to seek and obtain any equitable relief to which such Person shall be entitled or to seek any
remedy on account of any intentional fraud by any party hereto.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 45 - Unfair methods of competition unlawful; prevention by Commission",
"conflict": "The clause limits the remedies available to the parties to indemnification provisions, which may conflict with federal laws that provide broader rights and remedies.",
"relevance": "The Federal Trade Commission (FTC) has the authority to prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce. However, any clause that limits remedies could be viewed as an attempt to waive rights protected under federal law, specifically the FTC's mandate to prevent unfair or deceptive practices. Such a clause could be unenforceable if it conflicts with these federal protections.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section45&num=0&edition=prelim"
},
{
"law": "15 U.S.C. § 78j - Manipulative and deceptive devices",
"conflict": "The clause's waiver of rights and remedies may conflict with federal securities laws that provide specific remedies for fraud and misrepresentation.",
"relevance": "The Securities Exchange Act of 1934 prohibits manipulative and deceptive devices in connection with the purchase or sale of any security. However, a clause that waives rights and remedies for breaches of representation, warranty, covenant, agreement, or obligation could be viewed as an attempt to limit the remedies available under federal securities laws. These laws provide specific protections and remedies for fraud and misrepresentation in securities transactions.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78j&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1668",
"conflict": "The clause limits the remedies available to the parties, which may conflict with state laws that provide for broader remedies in cases of breach of contract or fraud.",
"relevance": "California Civil Code Section 1668 states that any contract aiming to exempt someone from responsibility for their own fraud, intentional harm to another's person or property, or any violation of the law, whether intentional or negligent, is against public policy.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1668.&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-1401",
"conflict": "The clause's waiver of rights and claims may be unenforceable under New York law, which prohibits the waiver of certain statutory rights.",
"relevance": "New York General Obligations Law Section 5-1401 prohibits the waiver of certain statutory rights, including those related to fraud and misrepresentation.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-1401"
},
{
"state": "Texas",
"law": "Tex. Bus. & Com. Code § 27.01",
"conflict": "The clause's limitation on remedies may conflict with Texas law, which allows for broader remedies in cases of fraud and misrepresentation.",
"relevance": "Texas Business and Commerce Code Section 27.01 provides remedies for fraud in real estate and stock transactions, including the recovery of actual damages and exemplary damages.",
"url": "https://statutes.capitol.texas.gov/Docs/BC/htm/BC.27.htm"
}
]
}
}
]
}
{
"section_header": "Section III.08. Absence of Certain Changes, Events and Conditions",
"analysis": [
{
"clause": "Except asexpressly contemplated by this Agreement or as set forth on Section 3.08 of the Disclosure
Schedules, from the Balance Sheet Date until the date of this Agreement, the Company has
operated in the ordinary course of business in all material respects and there has not been: (a) an
MAE; or (b) any event, occurrence, fact, condition or change that is materially adverse to the
ability of Seller to consummate the transactions contemplated hereby.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause requires the Company to operate in the ordinary course of business and avoid any material adverse effect (MAE) on the ability of the Seller to consummate the transactions. However, certain federal laws may impose obligations or restrictions that could conflict with these requirements.",
"relevance": "The Securities Exchange Act of 1934 imposes reporting and disclosure obligations. These obligations may require the Company to disclose events or conditions that could be considered materially adverse, potentially conflicting with the clause's requirement to avoid any Material Adverse Effect (MAE).",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq.",
"conflict": "The clause's requirement for the Company to operate in the ordinary course of business may be impacted by federal labor laws that impose specific operational requirements.",
"relevance": "The Fair Labor Standards Act of 1938 requires compliance with wage and hour standards. However, adhering to these standards may necessitate changes in business operations that could be seen as outside the ordinary course of business, potentially conflicting with the clause's requirements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter8&edition=prelim"
},
{
"law": "Clean Air Act, 42 U.S.C. § 7401 et seq.",
"conflict": "Environmental regulations may impose operational changes that conflict with the clause's requirement for the Company to operate in the ordinary course of business.",
"relevance": "The Clean Air Act mandates compliance with air quality standards. However, achieving this compliance may necessitate operational changes that could be seen as outside the ordinary course of business, potentially conflicting with the clause's requirements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter85&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Consumer Privacy Act (CCPA), Cal. Civ. Code § 1798.100 et seq.",
"conflict": "The clause requires the Company to operate in the ordinary course of business and avoid any material adverse effects (MAE) on the ability of the Seller to consummate the transactions. However, certain state laws may impose additional obligations or restrictions that could conflict with this requirement.",
"relevance": "The California Consumer Privacy Act (CCPA) imposes additional obligations on businesses regarding consumer data privacy. The CCPA requires businesses to implement specific data privacy measures and respond to consumer requests, which may not align with the ordinary course of business operations as defined in the clause. This could potentially lead to a material adverse effect on the Seller's ability to consummate the transactions.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?division=3.&part=4.&lawCode=CIV&title=1.81.5"
},
{
"state": "New York",
"law": "New York Stop Hacks and Improve Electronic Data Security Act (SHIELD Act), N.Y. Gen. Bus. Law § 899-bb",
"conflict": "The clause's requirement for the Company to operate in the ordinary course of business may conflict with state laws that impose additional operational restrictions or requirements.",
"relevance": "The New York SHIELD Act requires businesses to implement data security measures. This mandate may necessitate changes in business operations, which could conflict with the requirement to operate in the ordinary course of business. Such changes might potentially result in a material adverse effect on the Seller's ability to consummate the transactions.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/899-BB"
}
]
}
}
]
}
{
"section_header": "Section IV.02. No Conflicts; Consents",
"analysis": [
{
"clause": "The execution, delivery and performance byBuyer of this Agreement, and the consummation of the transactions contemplated hereby, do not
and will not: (a) violate or conflict with any provision of the certificate of incorporation or
by-laws of Buyer; (b) violate or conflict with any provision of any Law or Governmental Order
applicable to Buyer; (c) except as set forth in Section 4.02 of the Disclosure Schedules, require
the consent, notice or other action by any Person under, violate or conflict with, or result in the
acceleration of any agreement to which Buyer is a party; or (d) except as set forth in Section
4.02 of the Disclosure Schedules, require any consent, permit, Governmental Order, filing or
notice from, with or to any Governmental Authority; except, in the cases of clauses (b) and (c),
where the violation, conflict, acceleration or failure to obtain consent or give notice would not
have a material adverse effect on the buyer's ability to consummate the transactions
contemplated hereby and, in the case of clause (d), where such consent, permit, Governmental
Order, filing or notice which, in the aggregate, would not have a material adverse effect on the
buyer's ability to consummate the transactions contemplated hereby.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause asserts that the execution, delivery, and performance of the agreement by the Buyer do not and will not violate any applicable Law or Governmental Order. However, certain federal laws may impose requirements that could conflict with this assertion.",
"relevance": "The Securities Exchange Act of 1934 imposes disclosure and reporting requirements on companies. However, the Act may require the Buyer to obtain consents, make filings, or provide notices that are not accounted for in the clause, potentially conflicting with the assertion that no such actions are required.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 18a",
"conflict": "The clause asserts that the execution, delivery, and performance of the agreement by the Buyer do not and will not violate any applicable Law or Governmental Order. However, certain federal laws may impose requirements that could conflict with this assertion.",
"relevance": "The Hart-Scott-Rodino Antitrust Improvements Act of 1976 requires pre-merger notification and waiting periods for certain transactions. This means that before completing a merger or acquisition, the involved parties must notify the Federal Trade Commission and the Department of Justice and wait for a specified period. This requirement ensures that the transaction does not violate antitrust laws. However, this could conflict with any clause in a contract that asserts no such actions are required, as the Act mandates these steps for compliance.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter1&edition=prelim"
},
{
"law": "Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78dd-1, et seq.",
"conflict": "The clause asserts that the execution, delivery, and performance of the agreement by the Buyer do not and will not violate any applicable Law or Governmental Order. However, certain federal laws may impose requirements that could conflict with this assertion.",
"relevance": "The Foreign Corrupt Practices Act of 1977 prohibits the bribery of foreign officials and requires accurate record-keeping. However, it is important to note that the Act may impose additional compliance requirements on the Buyer, which could potentially conflict with any clause asserting that no such actions are required.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Corporations Code § 310",
"conflict": "The clause states that the execution, delivery, and performance of the agreement by the Buyer do not and will not violate any provision of any Law or Governmental Order applicable to Buyer. However, certain state laws may impose additional requirements or restrictions that could conflict with this assertion.",
"relevance": "California Corporations Code § 310 imposes restrictions on transactions involving interested directors. While the clause asserts that the Buyer's actions do not violate any applicable law, California Corporations Code § 310 could impose additional requirements or restrictions on such transactions, potentially conflicting with the Buyer's assertion.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=310"
},
{
"state": "New York",
"law": "New York Business Corporation Law § 909",
"conflict": "The clause asserts that no consent, permit, Governmental Order, filing, or notice is required from any Governmental Authority, except as set forth in the Disclosure Schedules. However, certain state laws may require additional consents or filings that are not accounted for in the clause.",
"relevance": "New York Business Corporation Law § 909 requires shareholder approval for certain mergers and consolidations. This requirement may conflict with a clause that asserts no additional consents or approvals are needed, as the law mandates shareholder approval in specific cases.",
"url": "https://www.nysenate.gov/legislation/laws/BSC/909"
}
]
}
}
]
}
{
"section_header": "Section V.06. Transfer Taxes",
"analysis": [
{
"clause": "All transfer, documentary, sales, use, stamp, registration,value added and other such Taxes and fees (including any penalties and interest) incurred in
connection with this Agreement (including any real property transfer Tax and any other similar
Tax) shall be borne and paid by Buyer when due. Buyer shall, at its own expense, timely file any
Tax Return or other document with respect to such Taxes or fees (and Seller shall cooperate with
respect thereto as necessary).",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "26 U.S.C. § 1445 - Withholding of tax on dispositions of United States real property interests",
"conflict": "The clause places the responsibility for all taxes and fees on the Buyer, which may conflict with certain state laws that mandate the Seller to pay specific taxes or fees.",
"relevance": "According to 26 U.S.C. § 1445, the Buyer is required to withhold a portion of the sales price for tax purposes. This law mandates the Buyer to withhold tax on the sale of U.S. real property interests. This requirement may conflict with any clause that allocates all tax responsibilities to the Buyer without considering the withholding requirements.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section1445&num=0&edition=prelim"
},
{
"law": "Cal. Rev. & Tax. Code § 11911 - Imposition of tax",
"conflict": "The clause requires the Buyer to pay all taxes and fees, which may conflict with state laws that require the Seller to pay certain transfer taxes.",
"relevance": "California Revenue and Taxation Code Section 11911 imposes a tax on the transfer of real property, which is typically paid by the Seller. This state law requires the Seller to pay the transfer tax, which conflicts with the clause's stipulation that the Buyer is responsible for all taxes and fees.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=11911"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Rev. & Tax. Code § 11911",
"conflict": "The clause assigns all tax-related responsibilities to the Buyer, which may conflict with state laws that mandate certain tax obligations to be shared or borne by the Seller.",
"relevance": "According to the California Revenue and Taxation Code, the Seller is required to pay the documentary transfer tax unless there is a written agreement stating otherwise. If a clause assigns all tax-related responsibilities to the Buyer without such a written agreement, it may conflict with this law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=11911"
},
{
"state": "New York",
"law": "N.Y. Tax Law § 1404",
"conflict": "The clause requires the Buyer to pay all transfer taxes, which may conflict with state laws that require the Seller to pay certain taxes.",
"relevance": "Under New York Tax Law, the Seller is required to pay the real estate transfer tax unless there is an agreement in place where the Buyer agrees to pay it. If a clause assigns all tax-related responsibilities to the Buyer without such an agreement, it may conflict with this law.",
"url": "https://www.nysenate.gov/legislation/laws/TAX/1404"
},
{
"state": "Florida",
"law": "Fla. Stat. § 201.02",
"conflict": "The clause assigns all tax-related responsibilities to the Buyer, which may conflict with state laws that mandate the Seller to pay certain taxes.",
"relevance": "According to Florida Statutes, the Seller is required to pay the documentary stamp tax on real estate transactions. If a clause assigns all tax-related responsibilities to the Buyer, it may conflict with this law unless there is an agreement explicitly stating that the Buyer will pay the tax.",
"url": "http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0201/Sections/0201.02.html"
}
]
}
}
]
}
{
"section_header": "Section VI.01. Survival",
"analysis": [
{
"clause": "Subject to the limitations and other provisions of thisAgreement, the representations and warranties contained herein shall survive the Closing and
shall remain in full force and effect until the date that is NUMBER months/years from the
Closing Date. None of the covenants or other agreements contained in this Agreement shall
survive the Closing Date other than those which by their terms contemplate performance after
the Closing Date, and each such surviving covenant and agreement shall survive the Closing for
the period contemplated by its terms. Notwithstanding the foregoing, any claims asserted in good
faith with reasonable specificity (to the extent known at such time) and in writing by notice from
the non-breaching party to the breaching party prior to the expiration date of the applicable
survival period shall not thereafter be barred by the expiration of such survival period and such
claims shall survive until finally resolved.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause's limitation on the survival period for representations and warranties may conflict with federal securities laws that impose longer liability periods.",
"relevance": "The Securities Exchange Act of 1934 imposes liability for misrepresentations and omissions in securities transactions, even for periods that may exceed the survival period specified in the clause.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "Federal Rules of Civil Procedure, Rule 8(a)",
"conflict": "The clause's requirement for claims to be asserted with 'reasonable specificity' may conflict with federal rules that allow for more general pleadings.",
"relevance": "Federal Rules of Civil Procedure, Rule 8(a) requires a short and plain statement of the claim showing that the pleader is entitled to relief, which may be less specific than the 'reasonable specificity' requirement in the clause.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title28/part5/chapter131&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1668",
"conflict": "The clause limits the survival of representations and warranties to a specific period, which may conflict with state laws that allow for longer or indefinite periods for certain claims.",
"relevance": "California Civil Code Section 1668 prohibits contracts that exempt anyone from responsibility for their own fraud, willful injury, or violation of law, whether willful or negligent. The clause's limitation on the survival period for representations and warranties could be seen as an attempt to exempt parties from responsibility for fraud or willful injury beyond the specified period, which is prohibited by California law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1668&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-701",
"conflict": "The clause's requirement for claims to be asserted with reasonable specificity and in writing may conflict with state laws that have different standards for the assertion of claims.",
"relevance": "New York General Obligations Law Section 5-701 requires certain agreements to be in writing and signed by the party to be charged. However, the clause's requirement for claims to be asserted with reasonable specificity and in writing may impose additional burdens not contemplated by New York law, potentially conflicting with the state's standards for the assertion of claims.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-701"
}
]
}
}
]
}
{
"section_header": "Section III.02. Organization, Authority and Qualification of the Company",
"analysis": [
{
"clause": "TheCompany is a corporation duly organized, validly existing and in good standing under the Laws
of the state of STATE and has all necessary corporate power and authority to own, operate or
lease the properties and assets now owned, operated or leased by it and to carry on its business as
it is currently conducted. The Company is duly licensed or qualified to do business and is in
good standing in each jurisdiction in which the properties owned or leased by it or the operation
of its business as currently conducted makes such licensing or qualification necessary, except
where the failure to be so licensed, qualified or in good standing would not have a material
adverse effect. All corporate actions taken by the Company in connection with this Agreement
have been duly authorized.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (2002)",
"conflict": "The clause asserts that the company is duly organized, validly existing, and in good standing under the laws of the state, and that it has the authority to own, operate, and lease properties and assets. However, certain federal laws may impose additional requirements or restrictions that could challenge these assertions.",
"relevance": "The Sarbanes-Oxley Act of 2002 imposes additional corporate governance and financial reporting requirements. The Act could challenge the assertion that the company is in good standing if it fails to meet these federal requirements, even if it complies with state laws.",
"url": "https://uscode.house.gov/"
},
{
"law": "Interstate Commerce Act, 49 U.S.C. § 10101 et seq.",
"conflict": "The clause asserts that the company is duly licensed or qualified in each jurisdiction where necessary. However, federal laws related to interstate commerce and federal licensing requirements could impose additional obligations.",
"relevance": "The Interstate Commerce Act requires additional federal licensing and regulatory compliance. If a company fails to meet these federal requirements for interstate operations, even if it complies with state laws, the Act could challenge the assertion that the company is duly licensed or qualified.",
"url": "https://uscode.house.gov/"
},
{
"law": "Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq.",
"conflict": "The clause asserts that the company has the authority to own, operate, and lease properties and assets. However, federal environmental laws could impose restrictions on these activities.",
"relevance": "The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) imposes liability and restrictions on property ownership and operations. If a company fails to comply with federal environmental regulations, the Act could challenge the assertion that the company has the authority to own, operate, and lease properties and assets.",
"url": "https://uscode.house.gov/"
}
],
"potentially_conflicting_state_laws": [
{
"state": "Delaware",
"law": "Del. Code Ann. tit. 8, § 502 (2023)",
"conflict": "The clause asserts that the company is 'duly organized, validly existing, and in good standing' in the state of incorporation. However, certain state laws may impose additional requirements or conditions that could challenge this assertion.",
"relevance": "A corporation must file an annual report and pay franchise taxes to maintain good standing. If the company fails to file the annual report or pay the franchise taxes, it would not be in good standing, contradicting the clause's assertion.",
"url": "https://delcode.delaware.gov/title8/c001/sc05/index.html"
},
{
"state": "California",
"law": "Cal. Corp. Code § 2105 (2023)",
"conflict": "The clause asserts that the company is 'duly licensed or qualified' in each jurisdiction where it operates. However, state laws may have specific licensing requirements that could challenge this assertion.",
"relevance": "A foreign corporation must obtain a certificate of qualification to transact intrastate business. If the company has not obtained the necessary certificate of qualification, it would not be 'duly licensed or qualified,' contradicting the clause's assertion.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=2105.&lawCode=CORP"
}
]
}
}
]
}
{
"section_header": "Section VI.05. Indemnification Procedures",
"analysis": [
{
"clause": "Whenever any claim shall arise forindemnification hereunder, the Indemnified Party shall promptly provide written notice of such
claim to the Indemnifying Party. Such notice by the Indemnified Party shall: (a) describe the
claim in reasonable detail; (b) include copies of all material written evidence thereof; and (c)
indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be
sustained by the Indemnified Party. In connection with any claim giving rise to indemnity
hereunder resulting from or arising out of any Action by a Person who is not a party to this
Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice to the
Indemnified Party, may assume the defense of any such Action with counsel reasonably
satisfactory to the Indemnified Party. The Indemnified Party shall be entitled to participate in the
defense of any such Action, with its counsel and at its own cost and expense, subject to the
Indemnifying Party's right to control the defense thereof. If the Indemnifying Party does not
assume the defense of any such Action, the Indemnified Party may, but shall not be obligated to,
defend against such Action in such manner as it may deem appropriate, including settling such
Action, after giving notice of it to the Indemnifying Party, on such terms as the Indemnified
Party may deem appropriate and no action taken by the Indemnified Party in accordance with
such defense and settlement shall relieve the Indemnifying Party of its indemnification
obligations herein provided with respect to any damages resulting therefrom. Seller and Buyer
shall cooperate with each other in all reasonable respects in connection with the defense of any
claim, including: (i) making available (subject to the provisions of Section 5.03) records relating
to such claim; and (ii) furnishing, without expense (other than reimbursement of actual
out-of-pocket expenses) to the defending party, management employees of the non-defending
party as may be reasonably necessary for the preparation of the defense of such claim. The
Indemnifying Party shall not settle any Action without the Indemnified Party's prior written
consent (which consent shall not be unreasonably withheld, conditioned or delayed).",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Federal Rules of Civil Procedure, Rule 8. General Rules of Pleading",
"conflict": "The clause's requirement for 'prompt written notice' and detailed claim description may conflict with federal laws that provide more lenient notification requirements for certain claims.",
"relevance": "The Federal Rules of Civil Procedure require a short and plain statement of the claim showing that the pleader is entitled to relief. The clause's requirement for detailed claim descriptions and material evidence may impose stricter standards than the federal rules, potentially conflicting with the more lenient federal requirements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title28/title28a/node4&edition=prelim"
},
{
"law": "Federal Rules of Civil Procedure, Rule 24. Intervention",
"conflict": "The clause's provision allowing the Indemnifying Party to control the defense may conflict with federal laws that protect the rights of the Indemnified Party to participate in their own defense.",
"relevance": "The Federal Rules of Civil Procedure allow a party to intervene in an action if they have an interest relating to the property or transaction that is the subject of the action. However, the clause's provision for the Indemnifying Party to control the defense may limit the Indemnified Party's ability to intervene and protect their interests, potentially conflicting with federal rules that allow for such intervention.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title28/title28a/node4&edition=prelim"
},
{
"law": "Federal Rules of Civil Procedure, Rule 41. Dismissal of Actions",
"conflict": "The clause's requirement for the Indemnified Party to obtain prior written consent for settlements may conflict with federal laws that allow for settlements without such stringent requirements.",
"relevance": "The Federal Rules of Civil Procedure allow a plaintiff to dismiss an action without a court order by filing a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment. However, the clause's requirement for prior written consent for settlements may impose additional burdens on the Indemnified Party, potentially conflicting with federal rules that allow for more straightforward dismissals and settlements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title28/title28a/node4&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 2778",
"conflict": "The clause requires the Indemnified Party to provide prompt written notice of a claim, but some state laws may impose stricter or different notification requirements.",
"relevance": "California Civil Code Section 2778 requires specific terms for indemnity agreements, including notification requirements that may differ from the clause's 'prompt written notice' requirement.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=2778"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-322.1",
"conflict": "The clause allows the Indemnifying Party to control the defense, but some state laws may require the Indemnified Party to have more control or input in the defense process.",
"relevance": "New York General Obligations Law Section 5-322.1 prohibits certain indemnification agreements that require one party to indemnify another for their own negligence. This prohibition may affect the control of defense provisions in the clause.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-322.1"
},
{
"state": "Massachusetts",
"law": "Mass. Gen. Laws ch. 93H, § 2",
"conflict": "The clause's requirement for the Indemnified Party to cooperate and provide records may conflict with state privacy laws or regulations regarding the handling of sensitive information.",
"relevance": "Massachusetts General Laws Chapter 93H, Section 2 requires businesses to implement and maintain reasonable security procedures and practices. This requirement may conflict with the clause's broad requirement for cooperation and provision of records.",
"url": "https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/Chapter93H/Section2"
}
]
}
}
]
}
{
"section_header": "Section IV.01. Organization and Authority of Buyer",
"analysis": [
{
"clause": "Buyer is a corporation dulyorganized, validly existing and in good standing under the Laws of the state of STATE. Buyer
has all necessary corporate power and authority to enter into this Agreement, to carry out its
obligations hereunder and to consummate the transactions contemplated hereby. The execution
and delivery by Buyer of this Agreement, the performance by Buyer of its obligations hereunder,
and the consummation by Buyer of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of Buyer. This Agreement constitutes a
legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar Laws affecting creditors' rights generally and by general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in equity).",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Bankruptcy Code, 11 U.S.C. § 101 et seq.",
"conflict": "The clause asserts that the agreement is legal, valid, and binding, but certain federal laws can affect the enforceability of such agreements.",
"relevance": "The Bankruptcy Code affects the enforceability of agreements. Specifically, it can render certain agreements unenforceable or subject to modification during bankruptcy proceedings. This contradicts any clause that asserts the agreement is legal, valid, and binding under all circumstances.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title11&edition=prelim"
},
{
"law": "Federal Insolvency Laws, 11 U.S.C. § 101 et seq.",
"conflict": "The clause asserts that the agreement is legal, valid, and binding, but certain federal laws can affect the enforceability of such agreements.",
"relevance": "Federal Insolvency Laws can impact the enforceability of agreements, especially during insolvency proceedings. This contradicts any clause that asserts the agreement is legal, valid, and binding under all circumstances.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title11&edition=prelim"
},
{
"law": "Reorganization Laws, 11 U.S.C. § 101 et seq.",
"conflict": "The clause asserts that the agreement is legal, valid, and binding, but certain federal laws can affect the enforceability of such agreements.",
"relevance": "Reorganization Laws can impact the enforceability of agreements during reorganization proceedings, which contradicts the clause's assertion of the agreement being legal, valid, and binding under all circumstances.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title11&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1670.5 (West 2023)",
"conflict": "The clause asserts that the agreement is legal, valid, and binding, but certain state laws may impose conditions that affect enforceability.",
"relevance": "California Civil Code Section 1670.5 allows courts to refuse to enforce any contract or clause found to be unconscionable at the time it was made. This law negatively aligns with the clause's assertion that the agreement is legal, valid, and binding, as it introduces a condition under which the agreement may not be enforceable.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1670.5&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-701 (McKinney 2023)",
"conflict": "The clause asserts that the agreement is legal, valid, and binding, but certain state laws may impose conditions that affect enforceability.",
"relevance": "New York General Obligations Law Section 5-701 requires certain agreements to be in writing to be enforceable. This law negatively aligns with the clause's assertion that the agreement is legal, valid, and binding, as it introduces a condition under which the agreement may not be enforceable if not in writing.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-701"
},
{
"state": "Texas",
"law": "Tex. Bus. & Com. Code Ann. § 26.01 (West 2023)",
"conflict": "The clause asserts that the agreement is legal, valid, and binding, but certain state laws may impose conditions that affect enforceability.",
"relevance": "According to Tex. Bus. & Com. Code Ann. § 26.01, certain contracts must be in writing to be enforceable. This law contradicts the clause's assertion that the agreement is legal, valid, and binding, as it introduces a condition under which the agreement may not be enforceable if it is not in writing.",
"url": "https://statutes.capitol.texas.gov/Docs/BC/htm/BC.26.htm"
}
]
}
}
]
}
{
"section_header": "Section VII.01. Expenses",
"analysis": [
{
"clause": "Except as otherwise expressly provided herein
(including Section 5.06 hereof), all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party incurring such
costs and expenses; provided, however, Buyer/Seller shall pay all amounts payable to",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Federal Acquisition Regulation (FAR) 31.205-46",
"conflict": "The clause stipulates that each party is responsible for their own costs and expenses, which may conflict with certain federal regulations that mandate specific cost allocations in certain types of transactions.",
"relevance": "Federal Acquisition Regulation (FAR) 31.205-46 mandates specific cost allocations in certain types of transactions, which may conflict with the clause's stipulation that each party is responsible for their own costs and expenses.",
"url": "https://www.acquisition.gov/far/part-31#FAR_31_205_46"
},
{
"law": "Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq.",
"conflict": "The clause may conflict with federal labor laws that require employers to bear certain costs and expenses related to employment.",
"relevance": "The Fair Labor Standards Act (FLSA) requires employers to bear certain costs and expenses related to employment. This requirement may conflict with the clause's stipulation that each party is responsible for their own costs and expenses.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter8&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1717",
"conflict": "The clause requires each party to bear its own costs and expenses, which may conflict with state laws mandating that certain transaction-related costs be borne by a specific party.",
"relevance": "California Civil Code Section 1717 mandates that in any contract where attorney's fees are provided for, the prevailing party is entitled to reasonable attorney's fees in addition to other costs. However, the clause in the agreement requires each party to bear its own costs and expenses, which may include attorney's fees. This conflicts with California law that mandates the prevailing party in a contract dispute is entitled to recover attorney's fees.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1717.&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Real Prop. Law § 462",
"conflict": "The clause may conflict with state laws that require specific disclosures and allocations of costs in real estate transactions.",
"relevance": "New York Real Property Law Section 462 requires sellers to provide a Property Condition Disclosure Statement and may impose specific costs on the seller. However, the clause in the agreement that requires each party to bear its own costs and expenses may conflict with this New York law, which imposes specific disclosure-related costs on the seller in real estate transactions.",
"url": "https://www.nysenate.gov/legislation/laws/RPP/462"
}
]
}
},
{
"clause": "BROKER/FINDER/INVESTMENT BANKER NAME.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 78o - Registration and regulation of brokers and dealers",
"conflict": "The clause may conflict with federal regulations regarding the disclosure and transparency of fees and expenses related to brokers, finders, and investment bankers.",
"relevance": "15 U.S.C. § 78o requires the registration and regulation of brokers and dealers, including transparency in fees and expenses. However, the clause in Section VII.01 may not fully comply with these transparency requirements, potentially leading to legal issues.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78o&num=0&edition=prelim"
},
{
"law": "17 C.F.R. § 240.10b-10 - Confirmation of transactions",
"conflict": "The clause may not align with federal laws that mandate the disclosure of compensation arrangements for brokers, finders, and investment bankers.",
"relevance": "17 C.F.R. § 240.10b-10 requires detailed confirmation of transactions, including disclosure of compensation. However, the clause in Section VII.01 may not provide sufficient detail on compensation arrangements, potentially violating this regulation.",
"url": "https://www.law.cornell.edu/cfr/text/17/240.10b-10"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Business and Professions Code § 10176 - Prohibited Acts",
"conflict": "The clause may be negatively aligned with state laws that regulate the disclosure and transparency of broker, finder, and investment banker fees.",
"relevance": "California Business and Professions Code § 10176 prohibits certain acts by brokers, including the non-disclosure of fees and commissions. The clause in Section VII.01 may not fully comply with the disclosure requirements mandated by this law, leading to potential legal conflicts.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=10176.&lawCode=BPC"
},
{
"state": "New York",
"law": "New York General Business Law § 359-e - Registration of Brokers, Dealers and Salespersons",
"conflict": "The clause may conflict with state laws that require specific disclosures and transparency in financial transactions involving brokers and finders.",
"relevance": "New York General Business Law § 359-e requires brokers and dealers to register and disclose their fees. However, the clause in Section VII.01 may not meet these stringent disclosure and registration requirements, potentially leading to non-compliance issues.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/359-E"
}
]
}
}
]
}
{
"section_header": "Section VI.03. Indemnification by Buyer",
"analysis": [
{
"clause": "Subject to the other terms and conditions ofthis ARTICLE VI, from and after the Closing, Buyer shall indemnify Seller against, and shall
hold Seller harmless from and against, any and all Losses incurred or sustained by, or imposed
upon, Seller based upon, arising out of or with respect to:(a) any inaccuracy in or breach of any of the representations or warranties of
Buyer contained in this Agreement; or",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Federal Trade Commission Act, 15 U.S.C. §§ 41-58",
"conflict": "The clause may be negatively aligned with the Federal Trade Commission Act (FTCA) if the representations or warranties made by the Buyer are found to be deceptive or unfair.",
"relevance": "The Federal Trade Commission prohibits unfair or deceptive acts or practices in commerce. If the Buyer's representations or warranties are found to be deceptive or unfair, the Seller may not be able to enforce the indemnification clause as it could be deemed void or unenforceable under the FTCA.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2&edition=prelim"
},
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause may be negatively aligned with the Securities Exchange Act of 1934 if the representations or warranties involve securities and are found to be false or misleading.",
"relevance": "The Securities and Exchange Commission prohibits false or misleading statements in connection with the purchase or sale of securities. If the Buyer's representations or warranties are related to securities and are found to be false or misleading, the indemnification clause may be unenforceable under the Securities Exchange Act of 1934.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 2778",
"conflict": "The clause requires the Buyer to indemnify the Seller for any inaccuracies or breaches of representations or warranties, which may conflict with state laws that limit or prohibit indemnification for certain types of losses or liabilities.",
"relevance": "California Civil Code § 2778 limits the scope of indemnification agreements. Specifically, it states that indemnity agreements cannot cover losses resulting from the indemnitee's own negligence or willful misconduct. This creates a conflict with clauses that broadly define indemnification without explicitly excluding such scenarios.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=2778&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-322.1",
"conflict": "The clause's broad indemnification requirements may be restricted by state laws that impose limitations on indemnification for certain types of liabilities.",
"relevance": "New York General Obligations Law § 5-322.1 prohibits indemnification clauses in construction contracts that require one party to indemnify another for their own negligence. While the clause in question is not specific to construction contracts, it demonstrates a general legal principle that may be applied to other types of agreements, potentially limiting the enforceability of broad indemnification provisions.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-322.1"
}
]
}
},
{
"clause": "(b) any breach or non-fulfillment of any covenant, agreement or obligation to
be performed by Buyer pursuant to this Agreement.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 2308 - Implied Warranties",
"conflict": "The clause imposes strict liability on the Buyer for any breach or non-fulfillment of obligations, which may conflict with federal laws that provide for defenses or limitations on liability.",
"relevance": "15 U.S.C. § 2308 provides limitations on liability for implied warranties, which may conflict with the clause's imposition of strict liability on the Buyer for any breach or non-fulfillment of obligations.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section2308&num=0&edition=prelim"
},
{
"law": "15 U.S.C. § 45 - Unfair methods of competition unlawful; prevention by Commission",
"conflict": "The clause may be seen as overly punitive and not allowing for reasonable defenses, which could be in conflict with federal laws that protect against unfair contract terms.",
"relevance": "15 U.S.C. § 45 prohibits unfair methods of competition, which may include overly punitive contract terms that do not allow for reasonable defenses.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section45&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 3300 (West 2023)",
"conflict": "The clause imposes strict liability on the Buyer for any breach or non-fulfillment, which may conflict with state laws that require a showing of materiality or intent.",
"relevance": "California Civil Code Section 3300 requires that damages for breach of contract be limited to those which are the natural and probable consequence of the breach, and which were foreseeable at the time the contract was made. However, the clause in the agreement imposes liability on the Buyer for any breach or non-fulfillment without considering the materiality or foreseeability of the breach. This conflicts with California's requirement for damages to be foreseeable and a natural consequence of the breach.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=3300&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. U.C.C. Law § 2-601 (McKinney 2023)",
"conflict": "The clause may be overly broad and impose liability on the Buyer for minor or immaterial breaches, which could be inconsistent with state laws that require a breach to be material to warrant remedies.",
"relevance": "New York Uniform Commercial Code (U.C.C.) Law § 2-601 allows a buyer to reject goods if they fail in any respect to conform to the contract. However, remedies for breach are typically limited to material breaches. The clause in the agreement imposes liability on the Buyer for any breach or non-fulfillment, regardless of materiality, which may conflict with New York's approach that typically limits remedies to material breaches.",
"url": "https://www.nysenate.gov/legislation/laws/UCC/2-601"
}
]
}
}
]
}
{
"section_header": "Section III.03. Capitalization.",
"analysis": [
{
"clause": "(a) The authorized capital stock of the Company consists of NUMBER
shares of common stock, $NUMBER par value/no par value, of which NUMBER
shares are issued and outstanding and constitute the Shares. All of the Shares have been
duly authorized, are validly issued, fully paid and non-assessable, and are owned of
record and beneficially by Seller, free and clear of all Encumbrances, other than those
Encumbrances set forth in Section 3.03(a) of the Disclosure Schedules.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Act of 1933, 15 U.S.C. § 77a et seq.",
"conflict": "The clause asserts that the shares are 'duly authorized, validly issued, fully paid, and non-assessable,' which may conflict with federal securities laws if the issuance did not comply with registration requirements or exemptions.",
"relevance": "The Securities Act of 1933 requires the registration of securities unless an exemption applies. If the shares were not registered or did not qualify for an exemption, they may not be considered 'validly issued' under federal law, contradicting the clause.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2A&edition=prelim"
},
{
"law": "Internal Revenue Code, 26 U.S.C. § 6321",
"conflict": "The clause states that the shares are 'free and clear of all encumbrances,' which may conflict with federal tax liens if the Seller has outstanding tax liabilities.",
"relevance": "The Internal Revenue Code imposes a lien on all property and rights to property of a person who neglects or refuses to pay tax. This means that if the Seller has unpaid taxes, the shares may be subject to a federal tax lien. This contradicts the clause's assertion that the shares are 'free and clear of all encumbrances.'",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleF/chapter64/subchapterC&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Corp. Code § 409 (West 2023)",
"conflict": "The clause asserts that the shares are fully paid and non-assessable, but certain state laws may impose conditions under which shares can be assessed.",
"relevance": "The California Corporations Code allows for the assessment of shares under certain conditions. However, there is a clause that states the shares are fully paid and non-assessable, which may conflict with California law that permits assessment in specific circumstances.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=409.&lawCode=CORP"
},
{
"state": "Delaware",
"law": "Del. Code Ann. tit. 8, § 202 (2023)",
"conflict": "The clause asserts that the shares are free and clear of encumbrances, but certain state laws may impose liens or other claims on shares.",
"relevance": "The Delaware General Corporation Law permits restrictions on transfer and encumbrances on shares. However, the clause in question states that the shares are free and clear of encumbrances, which may conflict with Delaware law that allows for certain restrictions and encumbrances on shares.",
"url": "https://delcode.delaware.gov/title8/c001/sc05/index.html"
}
]
}
},
{
"clause": "(b) Except as set out in Section 3.03(b) of the Disclosure Schedules, there
are no outstanding or authorized options, warrants, convertible securities, stock
appreciation, phantom stock, profit participation or other rights, agreements or
commitments relating to the shares of the Company or obligating Seller or the Company
to issue or sell any shares of, or any other interest in, the Company. There are no voting
trusts, stockholder agreements, proxies, or other agreements in effect with respect to the
voting or transfer of any of the Shares.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Act of 1933, 15 U.S.C. § 77a et seq.",
"conflict": "The clause restricts the issuance or sale of shares and other interests in the Company, which may conflict with federal securities laws that govern the issuance and sale of securities.",
"relevance": "The Securities Act of 1933 regulates the issuance and sale of securities. However, the clause's restrictions on issuing or selling shares and other interests in the Company may conflict with the regulatory requirements and allowances under the Securities Act of 1933.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2A&edition=prelim"
},
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause's restrictions on voting trusts, stockholder agreements, proxies, and other agreements may conflict with federal laws that protect shareholder rights and proxy solicitation.",
"relevance": "The Securities Exchange Act of 1934 regulates proxy solicitation and shareholder rights. However, the clause's restrictions on voting trusts, stockholder agreements, proxies, and other agreements may conflict with the protections and regulations provided under the Securities Exchange Act of 1934.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "Delaware",
"law": "Del. Code Ann. tit. 8, § 151 - Classes and series of stock; redemption; rights.",
"conflict": "The clause restricts the issuance or sale of shares and other interests in the Company, which may conflict with state laws that protect shareholder rights and corporate governance.",
"relevance": "The Delaware General Corporation Law (DGCL) provides broad authority to corporations to issue different classes and series of stock with varying rights and preferences, subject to the corporation's certificate of incorporation.",
"url": "https://delcode.delaware.gov/title8/c001/sc05/index.html"
},
{
"state": "California",
"law": "Cal. Corp. Code § 706 - Voting trusts.",
"conflict": "The clause's restrictions on voting trusts, stockholder agreements, and proxies may conflict with state laws that allow such arrangements under certain conditions.",
"relevance": "The California Corporations Code permits the creation of voting trusts and other voting agreements, provided they meet certain statutory requirements.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=706."
},
{
"state": "New York",
"law": "N.Y. Bus. Corp. Law § 505 - Issuance of rights or options.",
"conflict": "The clause's restrictions on the issuance of convertible securities and other rights may conflict with state laws that allow such financial instruments under specific conditions.",
"relevance": "The New York Business Corporation Law authorizes corporations to issue rights or options to purchase shares, subject to the terms and conditions set forth in the corporation's certificate of incorporation or bylaws.",
"url": "https://www.nysenate.gov/legislation/laws/BSC/505"
}
]
}
}
]
}
{
"section_header": "Section III.13. Legal Proceedings; Governmental Orders.",
"analysis": [
{
"clause": "(a) Except as set forth in Section 3.13(a) of the Disclosure Schedules, there
are no claims, actions, suits, investigations or other legal proceedings (collectively,
\"Actions\") pending or, to Seller's knowledge, threatened against or by the Company
affecting any of its properties or assets (or by or against Seller or any Affiliate thereof
and relating to the Company), which if determined adversely to the Company (or to
Seller or any Affiliate thereof) would result in a Material Adverse Effect. For purposes of
this Agreement: (x) \"Affiliate\" of a Person means any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person; and (y) the term \"control\" (including the terms
\"controlled by\" and \"under common control with\") 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 the ownership of voting securities, by contract or otherwise.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Sherman Antitrust Act, 15 U.S.C. §§ 1-7",
"conflict": "The clause's broad definition of 'Affiliate' and 'control' may conflict with antitrust laws that aim to prevent anti-competitive practices and ensure fair competition.",
"relevance": "The Sherman Antitrust Act prohibits monopolistic practices and anti-competitive agreements. However, the clause's broad definitions of 'Affiliate' and 'control' could be interpreted as enabling anti-competitive practices, which are prohibited by the Sherman Antitrust Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter1&edition=prelim"
},
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause's provisions regarding 'pending' or 'threatened' legal actions may conflict with federal securities laws that require full disclosure of material information to investors.",
"relevance": "The Securities Exchange Act of 1934 requires full disclosure of material information to investors. However, the clause's handling of 'pending' or 'threatened' legal actions may not meet these full disclosure requirements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Corporations Code § 1601",
"conflict": "The clause's broad definition of 'Affiliate' and 'control' may conflict with state laws that have more restrictive definitions or requirements for disclosure.",
"relevance": "California Corporations Code § 1601 requires corporations to allow shareholders to inspect certain records, including those related to affiliates, under more restrictive definitions than those provided in the clause.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=1601"
},
{
"state": "Delaware",
"law": "Delaware General Corporation Law § 220",
"conflict": "The clause's provisions on 'pending' and 'threatened' actions may conflict with state laws that have specific requirements for disclosure of legal proceedings.",
"relevance": "Delaware General Corporation Law § 220 provides shareholders the right to inspect books and records, including those related to legal proceedings, under conditions that may be more stringent than those outlined in the clause.",
"url": "https://delcode.delaware.gov/title8/c001/sc07/index.shtml"
}
]
}
},
{
"clause": "(b) Except as set forth in Section 3.13(b) of the Disclosure Schedules, there
are no outstanding Governmental Orders against, relating to, or affecting the Company or
any of its properties or assets which would have a Material Adverse Effect.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq.",
"conflict": "The clause asserts that there are no outstanding Governmental Orders that would have a Material Adverse Effect on the Company or its properties or assets. However, certain federal laws could impose Governmental Orders that might contradict this assertion.",
"relevance": "The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) imposes liability on parties responsible for hazardous waste sites. If the Company is found to be responsible for contamination under CERCLA, it could face Governmental Orders requiring cleanup, which would have a Material Adverse Effect on its properties or assets, contradicting the clause.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter103&edition=prelim"
},
{
"law": "Occupational Safety and Health Act (OSHA), 29 U.S.C. § 651 et seq.",
"conflict": "The clause asserts that there are no outstanding Governmental Orders that would have a Material Adverse Effect on the Company or its properties or assets. However, certain federal laws could impose Governmental Orders that might contradict this assertion.",
"relevance": "OSHA authorizes the issuance of Governmental Orders to ensure workplace safety. If the Company is found to be in violation of OSHA standards, it could face Governmental Orders to rectify the situation, which could have a Material Adverse Effect on its operations, contradicting the clause.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter15&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Environmental Quality Act (CEQA), Cal. Pub. Res. Code § 21000 et seq.",
"conflict": "The clause asserts that there are no outstanding Governmental Orders that would have a Material Adverse Effect on the Company or its properties or assets. However, certain state laws may impose orders or regulations that could potentially have such an effect.",
"relevance": "The California Environmental Quality Act (CEQA) requires environmental review and mitigation measures for projects that may have significant environmental impacts. However, CEQA can also result in Governmental Orders requiring mitigation measures or project modifications that could have a Material Adverse Effect on the Company's properties or assets.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displayexpandedbranch.xhtml?tocCode=PRC&division=13.&title=&part=&chapter=&article="
},
{
"state": "New York",
"law": "New York State Environmental Quality Review Act (SEQRA), N.Y. Envtl. Conserv. Law § 8-0101 et seq.",
"conflict": "The clause asserts that there are no outstanding Governmental Orders that would have a Material Adverse Effect on the Company or its properties or assets. However, certain state laws may impose orders or regulations that could potentially have such an effect.",
"relevance": "The New York State Environmental Quality Review Act (SEQRA) requires environmental impact assessments for actions that may affect the environment. However, SEQRA can also result in governmental orders requiring environmental impact assessments and mitigation measures that could have a material adverse effect on the company's properties or assets.",
"url": "https://www.nysenate.gov/legislation/laws/ENV/A8"
}
]
}
}
]
}
{
"section_header": "Section III.09. Material Contracts.",
"analysis": [
{
"clause": "(a) Section 3.09(a) of the Disclosure Schedules lists each of the following
contracts and other agreements of the Company (together with all Leases listed in Section
3.10(a) of the Disclosure Schedules, collectively, the \"Material Contracts\"):(i) each agreement of the Company involving aggregate consideration
in excess of $NUMBER or requiring performance by any party more than one
year from the date hereof, which, in each case, cannot be cancelled by the
Company without penalty or without more than 180/NUMBER days' notice;(ii) all agreements that relate to the sale of any of the Company's
assets, other than in the ordinary course of business, for consideration in excess of
$NUMBER;(iii) all agreements that relate to the acquisition of any business, a
material amount of stock or assets of any other Person or any real property
(whether by merger, sale of stock, sale of assets or otherwise), in each case
involving amounts in excess of $NUMBER; and
(iv) except for agreements relating to trade payables, all agreements
relating to indebtedness (including, without limitation, guarantees) of the
Company, in each case having an outstanding principal amount in excess of
$NUMBER.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Privacy Act of 1974, 5 U.S.C. § 552a",
"conflict": "The clause's requirement for disclosure of agreements involving aggregate consideration or performance obligations may conflict with federal privacy laws that protect sensitive business information.",
"relevance": "The Privacy Act of 1974 protects sensitive business information from disclosure without consent. However, there is a clause that requires the disclosure of agreements involving aggregate consideration or performance obligations, which may include sensitive business information that is otherwise protected under the Privacy Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title5/part1/chapter5/subchapter2&edition=prelim"
},
{
"law": "Clayton Antitrust Act, 15 U.S.C. § 18",
"conflict": "The clause's stipulations on the sale of assets and acquisition of businesses may conflict with antitrust laws that regulate mergers and acquisitions to prevent anti-competitive practices.",
"relevance": "The Clayton Antitrust Act regulates mergers and acquisitions to prevent anti-competitive practices. It requires disclosure of agreements related to the sale of assets and acquisition of businesses, which may be scrutinized under the Act for anti-competitive practices.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter1&edition=prelim"
},
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78m",
"conflict": "The clause's requirements for disclosing agreements related to indebtedness may conflict with federal securities laws that govern the disclosure of financial information.",
"relevance": "The Securities Exchange Act of 1934 requires the disclosure of financial information in a specific manner. However, it does not specifically mandate the disclosure of agreements related to indebtedness, although such agreements may need to comply with the Act's specific disclosure requirements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Uniform Trade Secrets Act, Cal. Civ. Code §§ 3426-3426.11",
"conflict": "The clause requires disclosure of agreements involving aggregate consideration or performance obligations that extend beyond one year, which may conflict with state laws that protect confidential business information.",
"relevance": "The California Uniform Trade Secrets Act protects confidential business information from disclosure. However, the requirement to disclose material contracts involving significant consideration or long-term performance obligations may force the Company to reveal such confidential business information, which is protected under this Act.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=CIV&division=4.5.&title=1.&part=&chapter=&article="
},
{
"state": "Delaware",
"law": "Delaware General Corporation Law, Del. Code Ann. tit. 8, § 220",
"conflict": "The clause's requirement to disclose agreements related to the sale of assets or acquisition of businesses may conflict with state laws that govern the confidentiality of such transactions.",
"relevance": "The Delaware General Corporation Law allows corporations to keep certain business transactions confidential. However, there may be a conflict with the requirement to disclose agreements related to significant asset sales or business acquisitions, as this requirement could undermine the confidentiality protections intended to safeguard business interests.",
"url": "https://delcode.delaware.gov/title8/c001/sc07/index.shtml"
}
]
}
},
{
"clause": "(b) Except as set forth on Section 3.09(b) of the Disclosure Schedules, the
Company is not in breach of, or default under, any Material Contract, except for such
breaches or defaults that would not have a Material Adverse Effect.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause allows for exceptions to breaches or defaults that do not have a Material Adverse Effect, which may conflict with federal securities laws that require full disclosure of all material information.",
"relevance": "The Securities Exchange Act of 1934 requires full disclosure of all material information. However, the clause's exception for breaches or defaults that do not have a Material Adverse Effect may result in non-disclosure of information that could be considered material under federal securities laws.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "Sarbanes-Oxley Act of 2002, 15 U.S.C. § 7201 et seq.",
"conflict": "The clause's allowance for non-disclosure of certain breaches or defaults may conflict with the Sarbanes-Oxley Act's requirements for accurate financial reporting and internal controls.",
"relevance": "The Sarbanes-Oxley Act of 2002 requires accurate financial reporting and internal controls. However, the clause's exception for breaches or defaults that do not have a Material Adverse Effect may lead to inaccuracies in financial reporting, potentially violating the Sarbanes-Oxley Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter98&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 3300 (West 2023)",
"conflict": "The clause allows for exceptions to breaches or defaults that do not have a Material Adverse Effect, which may conflict with state laws that require strict compliance with all material contracts.",
"relevance": "California Civil Code Section 3300 requires strict compliance with all material contracts. However, there is a clause that allows for exceptions to breaches or defaults that do not have a Material Adverse Effect, which may conflict with the requirement for strict compliance under California law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=3300&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-1103 (McKinney 2023)",
"conflict": "The clause's allowance for exceptions to breaches or defaults that do not have a Material Adverse Effect may conflict with New York laws that enforce strict adherence to contract terms.",
"relevance": "New York General Obligations Law § 5-1103 enforces strict adherence to contract terms. However, there is a clause that allows for exceptions to breaches or defaults that do not have a Material Adverse Effect, which may conflict with New York's enforcement of strict adherence to contract terms.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-1103"
}
]
}
}
]
}
{
"section_header": "Section V.01. Employee Benefit Plans.",
"analysis": [
{
"clause": "(a) During the period commencing at the Closing and ending on the date
which is 12/NUMBER months from the Closing (or if earlier, the date of the
employee's termination of employment with the Company), Buyer shall and shall cause
the Company to provide each Employee who remains employed immediately after the
Closing (\"Company Continuing Employee\") with: (i) base salary or hourly wages
which are no less than the base salary or hourly wages provided by the Company
immediately prior to the Closing; (ii) target bonus opportunities (excluding equity-based
compensation), if any, which are no less than the target bonus opportunities (excluding
equity-based compensation) provided by the Company immediately prior to the Closing;(iii) retirement and welfare benefits that are no less favorable in the aggregate than those
provided by the Company immediately prior to the Closing; and (iv) severance benefits
that are no less favorable than the practice, plan or policy in effect for such Company
Continuing Employee immediately prior to the Closing.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Employment-at-Will Doctrine",
"conflict": "The clause mandates that the Buyer ensures the Company provides certain benefits to Company Continuing Employees for a specified period. However, this may conflict with the Employment-at-Will Doctrine, which allows employers to terminate employees at any time for any reason, except for illegal reasons.",
"relevance": "The Employment-at-Will Doctrine allows employers to terminate employees at any time for any reason, except for illegal reasons. However, the clause requires the Buyer to ensure the Company provides certain benefits for a specified period, which may be seen as conflicting with the Employment-at-Will Doctrine.",
"url": "https://uscode.house.gov/"
},
{
"law": "Employee Retirement Income Security Act of 1974 (ERISA)",
"conflict": "The clause requires the Buyer to ensure the Company provides severance benefits no less favorable than the practice, plan, or policy in effect immediately prior to the Closing. This may conflict with the Employee Retirement Income Security Act (ERISA), which sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.",
"relevance": "The Employee Retirement Income Security Act (ERISA) sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans. However, the clause's requirement for severance benefits may conflict with ERISA's standards and protections.",
"url": "https://uscode.house.gov/"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Labor Code § 201",
"conflict": "The clause mandates that the Buyer must provide severance benefits no less favorable than the practice, plan, or policy in effect immediately prior to the Closing. However, certain state laws may impose different requirements or limitations on severance benefits.",
"relevance": "California Labor Code § 201 requires immediate payment of wages upon termination. The clause's provision for severance benefits may conflict with California's requirement for immediate payment of wages upon termination, potentially complicating the implementation of severance benefits as described in the clause.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=201"
},
{
"state": "New York",
"law": "New York Labor Law § 195",
"conflict": "The clause requires the Buyer to provide retirement and welfare benefits no less favorable in the aggregate than those provided by the Company immediately prior to the Closing. However, state laws may have specific requirements for retirement and welfare benefits that could conflict with this clause.",
"relevance": "New York Labor Law § 195 requires written notice of pay rates, pay dates, and other employment terms. However, the clause's requirement for maintaining certain retirement and welfare benefits may conflict with New York's specific requirements for written notice of employment terms, potentially leading to discrepancies in compliance.",
"url": "https://www.nysenate.gov/legislation/laws/LAB/195"
}
]
}
},
{
"clause": "(b) With respect to any employee benefit plan maintained by Buyer
(collectively, \"Buyer Benefit Plans\") in which any Company Continuing Employees will
participate effective as of the Closing, Buyer shall, or shall cause the Company to,
recognize all service of the Company Continuing Employees with the Company, as if
such service were with Buyer, for vesting and eligibility purposes in any Buyer Benefit
Plan in which such Company Continuing Employees may be eligible to participate after
the Closing Date; provided, however, such service shall not be recognized to the extent
that (x) such recognition would result in a duplication of benefits or (y) such service was
not recognized under the corresponding Benefit Plan.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.",
"conflict": "The clause may conflict with the Employee Retirement Income Security Act (ERISA) requirements regarding the recognition of service for vesting and eligibility purposes.",
"relevance": "ERISA requires specific standards for recognizing service for vesting and eligibility purposes. The clause's provision to recognize all service of Company Continuing Employees for vesting and eligibility purposes may not align with ERISA's specific standards and requirements, potentially leading to non-compliance.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18&edition=prelim"
},
{
"law": "Internal Revenue Code, 26 U.S.C. § 401 et seq.",
"conflict": "The clause may conflict with the Internal Revenue Code (IRC) provisions related to qualified retirement plans and the recognition of service.",
"relevance": "The Internal Revenue Code (IRC) establishes requirements for qualified retirement plans, including the recognition of service. However, the clause that mandates the recognition of all service of Company Continuing Employees for vesting and eligibility purposes may not comply with the IRC's requirements for qualified retirement plans. This misalignment could potentially result in tax qualification issues.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleA/chapter1/subchapterD/partI&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Labor Code § 227.3",
"conflict": "The clause requires the Buyer to recognize all service of the Company Continuing Employees for vesting and eligibility purposes in any Buyer Benefit Plan, which may conflict with state laws that have specific requirements for employee benefit plans.",
"relevance": "California Labor Code § 227.3 requires employers to pay out accrued vacation time upon termination of employment. However, the clause's provision to recognize all service for vesting and eligibility purposes may conflict with California's requirement to pay out accrued benefits, potentially leading to a duplication of benefits.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=227.3"
},
{
"state": "New York",
"law": "New York Labor Law § 198-c",
"conflict": "The clause's requirement to recognize all service for vesting and eligibility purposes may conflict with state laws that have specific requirements for employee benefit plans.",
"relevance": "New York Labor Law § 198-c prohibits employers from failing to pay benefits or wage supplements. However, the clause's provision to recognize all service for vesting and eligibility purposes may conflict with this prohibition, potentially leading to a duplication of benefits.",
"url": "https://www.nysenate.gov/legislation/laws/LAB/198-C"
}
]
}
},
{
"clause": "(c) This Section 5.01 shall be binding upon and inure solely to the benefit of
each of the parties to this Agreement, and nothing in this Section 5.01, express or
implied, shall confer upon any other Person any rights or remedies of any nature
whatsoever under or by reason of this Section 5.01. Nothing contained herein, express or
implied, shall be construed to establish, amend or modify any benefit plan, program,
agreement or arrangement. The parties hereto acknowledge and agree that the terms set
forth in this Section 5.01 shall not create any right in any employee of the Company or
any other Person to any continued employment with the Company, Buyer or any of their
respective Affiliates or compensation or benefits of any nature or kind whatsoever.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq.",
"conflict": "The clause excludes any other person from benefiting from the agreement, which may conflict with certain federal employment laws that protect employee rights.",
"relevance": "ERISA protects employee benefits and rights. However, the clause's exclusion of any other person from benefiting from the agreement may violate ERISA's protections for employee benefits and rights.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18&edition=prelim"
},
{
"law": "Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. § 201 et seq.",
"conflict": "The clause's exclusion of any other person from benefiting from the agreement may conflict with federal laws that protect employees' rights to certain benefits and compensation.",
"relevance": "The Fair Labor Standards Act (FLSA) ensures minimum wage, overtime pay, and other employee rights. However, the clause's exclusion of any other person from benefiting from the agreement may violate FLSA's protections for employee compensation and benefits.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter8&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1559",
"conflict": "The clause excludes any other person from benefiting from the agreement, which may conflict with state laws that protect third-party beneficiaries.",
"relevance": "California Civil Code Section 1559 allows third-party beneficiaries to enforce contracts made for their benefit. However, the clause in Section 5.01 explicitly excludes any other person from benefiting from the agreement, which directly conflicts with California law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1559"
},
{
"state": "New York",
"law": "N.Y. Lab. Law § 198-c",
"conflict": "The clause does not confer any rights or remedies of any nature whatsoever, which may conflict with state laws that mandate certain employee rights and benefits.",
"relevance": "New York Labor Law Section 198-c requires employers to provide certain benefits and rights to employees. However, the clause in Section 5.01 does not confer any rights or remedies of any nature whatsoever, which is in direct conflict with this New York law.",
"url": "https://www.nysenate.gov/legislation/laws/LAB/198-C"
}
]
}
}
]
}
{
"section_header": "Section VI.02. Indemnification by Seller",
"analysis": [
{
"clause": "Subject to the other terms and conditions ofthis ARTICLE VI, from and after the Closing, Seller shall indemnify Buyer against, and shall
hold Buyer harmless from and against, any and all losses, damages, liabilities, deficiencies,
Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind,
including reasonable attorneys' fees (collectively, \"Losses\"), incurred or sustained by, or imposed
upon, Buyer based upon, arising out of, with respect to or by reason of:(a) any inaccuracy in or breach of any of the representations or warranties of
Seller contained in this Agreement; or",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Federal Trade Commission Act, 15 U.S.C. §§ 41-58",
"conflict": "The clause may be negatively aligned with the Federal Trade Commission Act (FTCA) as it pertains to unfair or deceptive acts or practices in commerce.",
"relevance": "The Federal Trade Commission prohibits unfair or deceptive acts or practices in commerce. The indemnification clause could be seen as unfair or deceptive if it imposes unreasonable burdens on the Buyer or misrepresents the extent of the Seller's liability.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2&edition=prelim"
},
{
"law": "Uniform Commercial Code, U.C.C. § 2-312 to 2-318",
"conflict": "The clause may conflict with the Uniform Commercial Code (UCC) provisions on warranties and indemnification.",
"relevance": "The Uniform Commercial Code (UCC) sets standards for warranties and indemnification in commercial transactions. However, the indemnification clause may impose obligations on the Seller that are inconsistent with the UCC's provisions on warranties, potentially leading to conflicts in enforcement.",
"url": "https://www.law.cornell.edu/ucc"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 2778",
"conflict": "The clause imposes broad indemnification obligations on the Seller, which may be limited or restricted by state laws that govern indemnification clauses in contracts.",
"relevance": "California Civil Code § 2778 outlines specific rules and limitations for indemnification agreements, which may restrict the broad indemnification obligations imposed on the Seller in the clause. For example, it specifies that indemnity against claims, demands, or liability does not cover losses caused by the indemnitee's own negligence or willful misconduct unless expressly stated.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=2778"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-322.1",
"conflict": "The clause's broad indemnification obligations may conflict with state laws that limit indemnification for certain types of damages or liabilities.",
"relevance": "New York General Obligations Law § 5-322.1 prohibits indemnification clauses in construction contracts that require one party to indemnify another for damages arising from the latter's own negligence. This law may limit the enforceability of the broad indemnification obligations imposed on the Seller in the clause.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-322.1"
},
{
"state": "Texas",
"law": "Tex. Civ. Prac. & Rem. Code § 130.002",
"conflict": "The clause's broad indemnification obligations may be restricted by state laws that limit indemnification for punitive damages or other specific types of liabilities.",
"relevance": "Texas Civil Practice and Remedies Code § 130.002 limits the enforceability of indemnification clauses in construction contracts, especially those that require one party to indemnify another for the latter's own negligence. This statute may restrict the broad indemnification obligations that are often imposed on the Seller in such clauses.",
"url": "https://statutes.capitol.texas.gov/Docs/CP/htm/CP.130.htm"
}
]
}
},
{
"clause": "(b) any breach or non-fulfillment of any covenant, agreement or obligation to
be performed by Seller pursuant to this Agreement.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Uniform Commercial Code (UCC) § 2-615. Excuse by Failure of Presupposed Conditions",
"conflict": "The clause imposes strict liability on the Seller for any breach or non-fulfillment of covenants, agreements, or obligations. However, certain federal laws provide protections or defenses that could limit or negate this liability.",
"relevance": "The Seller is excused from performance if performance as agreed has been made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made. The UCC § 2-615 provides a defense for the Seller against the strict liability imposed by the clause in the event of impracticability due to unforeseen contingencies.",
"url": "https://www.law.cornell.edu/ucc/2/2-615"
},
{
"law": "11 U.S.C. § 365. Executory Contracts and Unexpired Leases",
"conflict": "The clause does not account for potential defenses under federal bankruptcy laws, which can discharge certain obligations.",
"relevance": "A debtor (seller) has the option to assume or reject any executory contract or unexpired lease, but this decision is subject to the court's approval. However, under 11 U.S.C. § 365, if a seller files for bankruptcy, they may have the ability to reject the contract, which would negate the obligations imposed by the clause.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section365&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 3300 (West 2023)",
"conflict": "The clause imposes strict liability on the Seller for any breach or non-fulfillment of obligations, which may conflict with state laws that require a showing of fault or negligence.",
"relevance": "California Civil Code Section 3300 requires that damages must be proximately caused by the breach and must be foreseeable. However, the clause in the agreement imposes liability on the Seller for any breach or non-fulfillment without requiring a showing of proximate cause or foreseeability, which is inconsistent with California's requirement for damages.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=3300&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-322.1 (McKinney 2023)",
"conflict": "The clause may be seen as overly broad and unenforceable under state laws that limit the scope of indemnification clauses.",
"relevance": "New York General Obligations Law § 5-322.1 prohibits indemnification clauses that indemnify a party for its own negligence. The clause in the agreement could be interpreted to require the Seller to indemnify the other party for any breach or non-fulfillment, potentially including the other party's own negligence, which is prohibited under New York law.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-322.1"
}
]
}
}
]
}
{
"section_header": "Section II.03. Buyer's Deliveries",
"analysis": [
{
"clause": "At the Closing, Buyer shall deliver the following toSeller:(a) The Purchase Price pursuant to Section 1.02.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 1693 - Electronic Fund Transfers",
"conflict": "The clause requires the Buyer to deliver the Purchase Price at the Closing, which may conflict with federal laws regarding the timing and method of payment in certain transactions.",
"relevance": "15 U.S.C. § 1693 regulates the timing and method of electronic fund transfers. However, the clause mandates the delivery of the Purchase Price at the Closing, which may not align with the timing and method requirements stipulated by federal law for electronic fund transfers.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter41/subchapter6&edition=prelim"
},
{
"law": "31 U.S.C. § 5313 - Reports on domestic coins and currency transactions",
"conflict": "The clause may conflict with federal laws that impose restrictions on the transfer of funds in certain types of transactions, such as those involving large sums of money.",
"relevance": "31 U.S.C. § 5313 requires the reporting of certain domestic coins and currency transactions. This requirement may conflict with the clause that mandates the Buyer to deliver the Purchase Price at the Closing, especially if the transaction involves large sums of money subject to federal reporting requirements. The timing and method of such transactions could potentially be affected.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title31/subtitle4/chapter53&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1095 (2023)",
"conflict": "The clause requires the Buyer to deliver the Purchase Price at the Closing, which may conflict with state laws that impose specific conditions or timelines for the transfer of funds in real estate transactions.",
"relevance": "The California Civil Code requires specific conditions for the transfer of funds in real estate transactions. However, the clause mandates the Buyer to deliver the Purchase Price at the Closing, which may not align with the specific conditions or timelines required by California law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1095"
},
{
"state": "New York",
"law": "N.Y. Real Prop. Law § 294-b (2023)",
"conflict": "The clause's requirement for the Buyer to deliver the Purchase Price at the Closing may conflict with state laws that have different requirements for the timing and method of payment in real estate transactions.",
"relevance": "New York Real Property Law stipulates different requirements for the timing and method of payment in real estate transactions. The clause's requirement for the Buyer to deliver the Purchase Price at the Closing may not align with New York's specific requirements for payment timing and methods.",
"url": "https://www.nysenate.gov/legislation/laws/RPP/294-B"
}
]
}
},
{
"clause": "(b) A certificate of the Secretary (or other officer) of Buyer certifying: (i) that
attached thereto are true and complete copies of all resolutions of the board of directors
of Buyer authorizing the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, and that such resolutions are in
full force and effect; and (ii) the names, titles and signatures of the officers of Buyer
authorized to sign this Agreement.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (2002)",
"conflict": "The clause requires the Secretary or another officer of the Buyer to certify the authenticity and completeness of board resolutions and officer details. This may conflict with federal laws that impose stricter requirements on corporate governance and documentation.",
"relevance": "The Sarbanes-Oxley Act imposes stricter requirements on corporate governance and documentation. However, the clause's requirement for certification by the Secretary or another officer may not meet these stringent standards, potentially leading to non-compliance.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter98&edition=prelim"
},
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause's requirement for certification by the Secretary or another officer may conflict with federal regulations that mandate specific procedures for corporate documentation and officer verification.",
"relevance": "The Securities Exchange Act requires specific procedures for corporate documentation and officer verification. However, the clause's certification requirements may not align with the procedural and verification standards set forth by the Securities Exchange Act, leading to potential legal conflicts.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "Delaware",
"law": "Del. Code Ann. tit. 8, § 142 (2023)",
"conflict": "The clause requires the Secretary or another officer of the Buyer to certify the resolutions and officer details, which may conflict with state laws regarding corporate governance and officer responsibilities.",
"relevance": "Delaware Code Annotated Title 8, Section 142 requires specific procedures for the appointment and responsibilities of corporate officers. However, the clause's requirement for the Secretary or another officer to certify certain documents may not align with the specific procedural requirements and responsibilities outlined in Delaware law, potentially leading to conflicts in corporate governance.",
"url": "https://delcode.delaware.gov/title8/c001/sc04/index.html"
},
{
"state": "California",
"law": "Cal. Corp. Code § 312 (2023)",
"conflict": "The clause's requirement for certification by the Secretary or another officer may conflict with state laws that have different requirements for corporate resolutions and officer authorizations.",
"relevance": "California Corporation Code Section 312 stipulates specific requirements for the roles and responsibilities of corporate officers. However, the clause's requirement for the Secretary or another officer to certify resolutions and officer details may not align with California's specific statutory requirements for corporate governance, potentially leading to legal inconsistencies.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=312"
}
]
}
},
{
"clause": "(c) OTHER BUYER DELIVERABLES
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that the statements contained in this ARTICLE III
are true and correct as of the date hereof. For purposes of this Article III, \"Seller's knowledge,\"
\"knowledge of Seller,\" and any similar phrases shall mean the actual knowledge of NAMES
OR TITLES OF KNOWLEDGE PERSONS.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 78j(b) - Manipulative and Deceptive Devices",
"conflict": "The clause's definition of 'Seller's knowledge' as the 'actual knowledge of NAMES OR TITLES OF KNOWLEDGE PERSONS' may conflict with federal laws regarding representations and warranties, particularly those that require a higher standard of due diligence.",
"relevance": "15 U.S.C. § 78j(b) prohibits any manipulative or deceptive device or contrivance in connection with the purchase or sale of any security. The clause's definition of 'Seller's knowledge' as limited to 'actual knowledge' may be seen as insufficient under this law, which implies a need for a higher standard of due diligence to avoid deceptive practices.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78j&num=0&edition=prelim"
},
{
"law": "17 C.F.R. § 240.10b-5 - Employment of Manipulative and Deceptive Devices",
"conflict": "The clause's reliance on 'actual knowledge' may not meet the standards set by federal laws that require a more comprehensive investigation or due diligence.",
"relevance": "17 C.F.R. § 240.10b-5 makes it unlawful to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. The clause's definition of 'Seller's knowledge' as 'actual knowledge' may not be sufficient to meet the requirements of this regulation, which implies a need for thorough investigation to avoid misleading statements.",
"url": "https://www.law.cornell.edu/cfr/text/17/240.10b-5"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1572 (Deceit Defined)",
"conflict": "The clause's definition of 'Seller's knowledge' as 'actual knowledge' may conflict with state laws that impose a broader duty of inquiry or constructive knowledge on sellers.",
"relevance": "California Civil Code Section 1572 defines deceit as including the suppression of a fact by someone who is obligated to disclose it, or who provides information about other facts that are likely to mislead due to the lack of communication of that fact. This imposes a broader duty on the seller to disclose information, which may include constructive knowledge, conflicting with the clause's limitation to 'actual knowledge.'",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1572"
},
{
"state": "New York",
"law": "N.Y. Real Prop. Law § 462 (Property Condition Disclosure Statement)",
"conflict": "The clause's limitation to 'actual knowledge' may conflict with state laws that impose a duty to disclose material facts that a seller should have known.",
"relevance": "New York Real Property Law Section 462 mandates that sellers complete a property condition disclosure statement, revealing material facts about the property. This law suggests an obligation to disclose facts that the seller should have known, potentially including constructive knowledge, which may conflict with the clause's restriction to 'actual knowledge.'",
"url": "https://www.nysenate.gov/legislation/laws/RPP/462"
}
]
}
}
]
}
{
"section_header": "Section III.10. Real Property; Title to Assets.",
"analysis": [
{
"clause": "(a) Section 3.10(a) of the Disclosure Schedules lists all real property in which
the Company has an ownership or leasehold (subleasehold) interest (together with all
buildings, structures and improvements located thereon, the \"Real Property\"), including:(i) the street address of each parcel of Real Property, and (ii) a list, as of the date of this
Agreement, of all leases for each parcel of leased Real Property involving total annual
payments of at least $NUMBER (collectively, \"Leases\"), including the identification of
the lessee and lessor thereunder.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Privacy Act of 1974, 5 U.S.C. § 552a",
"conflict": "The clause requires detailed disclosure of real property and lease information, which may conflict with privacy and confidentiality obligations under certain federal laws.",
"relevance": "The Privacy Act of 1974 restricts the disclosure of personal information without consent. However, there is a clause that mandates the disclosure of detailed real property and lease information, which may include personal information of lessees and lessors. This requirement potentially violates the Privacy Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title5/part1/chapter5/subchapter2&edition=prelim"
},
{
"law": "Defend Trade Secrets Act of 2016, 18 U.S.C. § 1836",
"conflict": "The clause's requirement for detailed disclosure of real property and lease information may conflict with confidentiality obligations under federal trade secret laws.",
"relevance": "The Defend Trade Secrets Act of 2016 protects trade secrets from disclosure. However, there is a concern that certain clauses may require the disclosure of information that could be considered trade secrets, such as proprietary lease terms or property details, potentially conflicting with the protections afforded by the Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title18/part1/chapter90&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Consumer Privacy Act (CCPA), Cal. Civ. Code § 1798.100 et seq.",
"conflict": "The clause requires detailed disclosure of all real property interests and leases, which may conflict with state privacy laws regarding the disclosure of personal or sensitive information.",
"relevance": "The California Consumer Privacy Act (CCPA) restricts the disclosure of personal information without consent. The clause's requirement to disclose detailed information about real property and leases may include personal information about lessees and lessors, which could be restricted under the CCPA without their explicit consent.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?division=3.&part=4.&lawCode=CIV&title=1.81.5"
},
{
"state": "Texas",
"law": "Texas Uniform Trade Secrets Act (TUTSA), Tex. Civ. Prac. & Rem. Code Ann. § 134A.001 et seq.",
"conflict": "The clause's requirement for detailed disclosure of real property interests and leases may conflict with state laws protecting trade secrets and confidential business information.",
"relevance": "The Texas Uniform Trade Secrets Act (TUTSA) protects trade secrets and confidential business information from disclosure. However, there is a concern that the clause's requirement to disclose detailed information about real property and leases may include trade secrets or confidential business information. Such information could be protected under TUTSA and thus not subject to mandatory disclosure.",
"url": "https://statutes.capitol.texas.gov/Docs/CP/htm/CP.134A.htm"
}
]
}
},
{
"clause": "(b) The Company has good and valid (and, in the case of owned Real
Property, good and marketable fee simple) title to, or a valid leasehold interest in, all Real
Property and tangible personal property and other assets reflected in the Financial
Statements or acquired after the Balance Sheet Date (other than properties and assets sold
or otherwise disposed of in the ordinary course of business since the Balance Sheet Date).
All such properties and assets (including leasehold interests) are free and clear of
Encumbrances, except for the following (collectively, the \"Permitted Encumbrances\"):(i) those items set forth in Section 3.10(b) of the Disclosure
Schedules;(ii) liens for Taxes not yet due and payable or being contested in good
faith by appropriate procedures;(iii) mechanics', carriers', workmen's, repairmen's or other like liens
arising or incurred in the ordinary course of business;(iv) liens arising under original purchase price conditional sales
contracts and equipment leases with third parties entered into in the ordinary
course of business; and",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9675",
"conflict": "The clause asserts that the Company has good and marketable title to all Real Property and tangible personal property, free and clear of Encumbrances except for Permitted Encumbrances. However, certain federal laws may impose additional requirements or restrictions that could challenge this assertion.",
"relevance": "CERCLA imposes liability on property owners for environmental contamination. This means that property owners can be held responsible for contamination even if it occurred before they acquired the property. As a result, the assertion of clear title may be negatively impacted, leading to unforeseen encumbrances on the property.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter103&edition=prelim"
},
{
"law": "Federal Tax Lien Act, 26 U.S.C. § 6321",
"conflict": "The clause asserts that the Company has good and marketable title to all Real Property and tangible personal property, free and clear of Encumbrances except for Permitted Encumbrances. However, certain federal laws may impose additional requirements or restrictions that could challenge this assertion.",
"relevance": "The Federal Tax Lien Act creates a lien on all property and rights to property of a person who neglects or refuses to pay taxes. This means that if there are unpaid federal taxes, the Act can impose a lien on the Company's property, potentially resulting in unforeseen encumbrances. Consequently, the clause's assertion of clear title may be negatively impacted by this Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleF/chapter64/subchapterC&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Civil Code § 1102.6 - Real Property Transfer Disclosure Statement",
"conflict": "The clause asserts that the Company has good and marketable fee simple title to all owned Real Property, but certain state laws impose additional requirements or restrictions that could challenge this assertion.",
"relevance": "California Civil Code § 1102.6 requires a Real Property Transfer Disclosure Statement for the transfer of real property, which may reveal encumbrances or other issues affecting the marketability of the title.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1102.6&lawCode=CIV"
},
{
"state": "New York",
"law": "New York Lien Law § 3 - Mechanic's Lien",
"conflict": "The clause states that all properties and assets are free and clear of encumbrances except for Permitted Encumbrances, but certain state laws may impose additional liens or encumbrances that are not listed as Permitted Encumbrances.",
"relevance": "New York Lien Law § 3 provides for mechanics' liens that may not be considered Permitted Encumbrances under the clause, potentially conflicting with the assertion that properties are free and clear of encumbrances.",
"url": "https://www.nysenate.gov/legislation/laws/LIE/3"
},
{
"state": "Texas",
"law": "Texas Tax Code § 32.01 - Tax Lien",
"conflict": "The clause mentions that liens for taxes not yet due and payable or being contested in good faith are Permitted Encumbrances, but some state laws may impose stricter conditions on tax liens.",
"relevance": "Texas Tax Code § 32.01 establishes a tax lien on property for unpaid taxes, which may not align with the clause's definition of Permitted Encumbrances.",
"url": "https://statutes.capitol.texas.gov/Docs/TX/htm/TX.32.htm"
}
]
}
},
{
"clause": "(v) other imperfections of title or Encumbrances, if any, that would not
have a Material Adverse Effect.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 78m - Periodical and other reports",
"conflict": "The clause allows for certain imperfections of title or encumbrances as long as they do not have a Material Adverse Effect. However, certain federal laws impose strict requirements on title and encumbrances that do not consider the Material Adverse Effect standard.",
"relevance": "15 U.S.C. § 78m requires issuers of securities to disclose all material information, including imperfections of title or encumbrances, regardless of their Material Adverse Effect.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78m&num=0&edition=prelim"
},
{
"law": "42 U.S.C. § 9607 - Liability",
"conflict": "The clause's allowance for imperfections of title or encumbrances that do not have a Material Adverse Effect may conflict with federal environmental laws that impose strict liability for certain types of encumbrances.",
"relevance": "42 U.S.C. § 9607 imposes strict liability for the release of hazardous substances, which can be considered an encumbrance, regardless of the Material Adverse Effect.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section9607&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1107",
"conflict": "The clause allows for certain imperfections of title or encumbrances as long as they do not have a Material Adverse Effect. However, some state laws may have stricter requirements regarding title imperfections and encumbrances.",
"relevance": "California Civil Code Section 1107 mandates that any encumbrance or imperfection of title must be disclosed, and such issues may impact the validity of the title transfer. This law is more stringent than the clause, which permits certain imperfections or encumbrances as long as they do not have a Material Adverse Effect. Under California law, disclosure is required and the validity of the title transfer may be affected regardless of whether there is a Material Adverse Effect.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1107.&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Real Prop. Law § 235-b",
"conflict": "The clause allows for certain imperfections of title or encumbrances as long as they do not have a Material Adverse Effect. However, some state laws may have stricter requirements regarding title imperfections and encumbrances.",
"relevance": "New York Real Property Law Section 235-b implies a warranty of habitability, which includes the requirement that the property be free from significant encumbrances or title defects. This law is stricter than clauses that allow for certain imperfections or encumbrances as long as they do not have a Material Adverse Effect.",
"url": "https://www.nysenate.gov/legislation/laws/RPP/235-B"
}
]
}
}
]
}
{
"section_header": "Section III.18. Taxes.",
"analysis": [
{
"clause": "(a) Except as set forth in Section 3.18(a) of the Disclosure Schedules:(i) The Company has filed (taking into account any valid extensions)
all material returns, declarations, reports, information returns and statements and
other documents required to be filed by the Company with respect to Taxes
(including amended returns and claims for refund) (collectively, \"Tax Returns\").
Such Tax Returns are true, complete and correct in all material respects. The
Company is not currently the beneficiary of any extension of time within which to
file any material Tax Return other than extensions of time to file Tax Returns
obtained in the ordinary course of business. All material Taxes due and owing by
the Company have been paid or accrued. For purposes of this Agreement, \"Taxes\"
means all federal, state, local, foreign and other income, gross receipts, sales, use,
production, ad valorem, transfer, franchise, registration, profits, license, lease,
service, service use, withholding, payroll, employment, unemployment, estimated,
excise, severance, environmental, stamp, occupation, premium, property (real or
personal), real property gains, windfall profits, customs, duties or other taxes,
fees, assessments or charges of any kind whatsoever, together with any interest,
additions or penalties with respect thereto and any interest in respect of such
additions or penalties.
(ii) No extensions or waivers of statutes of limitations have been given
or requested with respect to any material Taxes of the Company.
(iii) There are no ongoing Actions by any taxing authority against the
Company.
(iv) The Company is not a party to any Tax-sharing agreement.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Internal Revenue Code, 26 U.S.C. § 6011",
"conflict": "The clause asserts that the Company has filed all required Tax Returns and that such returns are true, complete, and correct in all material respects. However, if the Company has not complied with the Internal Revenue Code (IRC) requirements, this assertion would be false.",
"relevance": "The Company is required to file all returns, declarations, reports, and other documents required by the IRC. If the Company has failed to file any required documents or if the filed documents are not true, complete, and correct, the assertion in the clause would be false, thus negatively aligning with the IRC requirements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleF/chapter61&edition=prelim"
},
{
"law": "Internal Revenue Code, 26 U.S.C. § 6501(c)(4)",
"conflict": "The clause asserts that no extensions or waivers of statutes of limitations have been given or requested with respect to any material Taxes of the Company. However, if the Company has requested or been granted such extensions or waivers, this assertion would be false.",
"relevance": "The Company may request an extension of the statute of limitations for tax assessments. However, if the Company has already requested or been granted such an extension, the assertion in the clause would be false, thereby conflicting with the provisions of the Internal Revenue Code (IRC).",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleF/chapter66&edition=prelim"
},
{
"law": "Internal Revenue Code, 26 U.S.C. § 7602",
"conflict": "The clause asserts that there are no ongoing Actions by any taxing authority against the Company. However, if there are ongoing investigations or actions, this assertion would be false.",
"relevance": "The IRS is authorized to examine any books, papers, records, or other data which may be relevant or material to an inquiry. If the IRS is conducting an examination or investigation, the assertion in the clause that there are no ongoing actions would be false, thus negatively aligning with the IRC provisions.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleF/chapter78&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Rev. & Tax. Code § 19132 (West 2023)",
"conflict": "The clause asserts that the Company has filed all material Tax Returns and that such returns are true, complete, and correct in all material respects. However, certain state laws impose stringent requirements and penalties for inaccuracies or omissions in tax filings.",
"relevance": "California Revenue and Taxation Code § 19132 imposes penalties for underpayment of tax due to negligence or intentional disregard of rules and regulations. The clause's assertion that all Tax Returns are true, complete, and correct in all material respects may be challenged if the Company is found to have underpaid taxes due to negligence or intentional disregard of rules, as per California law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=19132"
},
{
"state": "New York",
"law": "N.Y. Tax Law § 683 (McKinney 2023)",
"conflict": "The clause states that no extensions or waivers of statutes of limitations have been given or requested with respect to any material Taxes of the Company. However, some state laws allow for automatic extensions under certain conditions.",
"relevance": "New York Tax Law § 683 provides for automatic extensions of the statute of limitations for tax assessments under certain conditions. The clause's statement that no extensions or waivers have been given or requested may be contradicted by New York law, which allows for automatic extensions under specific circumstances, potentially affecting the accuracy of the clause.",
"url": "https://www.nysenate.gov/legislation/laws/TAX/683"
}
]
}
},
{
"clause": "(v) All material Taxes which the Company is obligated to withhold
from amounts owing to any employee, creditor or third party have been paid or
accrued.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "26 U.S.C. § 3402 - Income tax collected at source",
"conflict": "The clause requires that all material taxes be paid or accrued, but certain federal laws may provide exceptions or different requirements.",
"relevance": "26 U.S.C. § 3402 requires employers to withhold income tax from employees' wages but provides specific guidelines and exceptions for withholding. However, the clause in the agreement broadly states that all material taxes must be paid or accrued, which may not account for the specific exceptions and guidelines provided under 26 U.S.C. § 3402. This misalignment could lead to potential conflicts in interpretation and compliance.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section3402&num=0&edition=prelim"
},
{
"law": "26 U.S.C. § 3102 - Deduction of tax from wages",
"conflict": "The clause mandates payment or accrual of all material taxes, but federal laws may have different stipulations for certain types of taxes.",
"relevance": "26 U.S.C. § 3102 requires employers to deduct FICA taxes from employees' wages but includes specific provisions and exceptions for the deduction process. The clause's broad requirement for payment or accrual of all material taxes may not align with the specific provisions and exceptions outlined in 26 U.S.C. § 3102, potentially leading to discrepancies in compliance.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section3102&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Rev. & Tax. Code § 18662",
"conflict": "The clause asserts that all material taxes have been paid or accrued, but certain state laws may impose additional requirements or have different interpretations regarding tax withholding and payment obligations.",
"relevance": "California Revenue and Taxation Code § 18662 requires additional withholding obligations for certain payments to non-residents and other specific situations that may not be covered by the general clause in the agreement.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=18662&lawCode=RTC"
},
{
"state": "New York",
"law": "N.Y. Tax Law § 671",
"conflict": "The clause may not account for specific state-level requirements for tax withholding and payment, which could lead to non-compliance.",
"relevance": "New York Tax Law § 671 mandates specific withholding requirements for wages and other payments that may differ from the general obligations stated in the clause.",
"url": "https://www.nysenate.gov/legislation/laws/TAX/671"
},
{
"state": "Texas",
"law": "Tex. Tax Code Ann. § 171.101",
"conflict": "The clause's general statement may not align with specific state laws that impose unique or additional tax withholding requirements.",
"relevance": "Texas Tax Code Ann. § 171.101 imposes franchise tax obligations that may not be fully addressed by the general clause regarding material taxes.",
"url": "https://statutes.capitol.texas.gov/Docs/TX/htm/TX.171.htm"
}
]
}
},
{
"clause": "(b) Except for certain representations related to Taxes in Section 3.16, the
representations and warranties set forth in this Section 3.18 are the Seller's sole and
exclusive representations and warranties regarding Tax matters.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Internal Revenue Code, 26 U.S.C. § 6662 - Imposition of accuracy-related penalty on underpayments",
"conflict": "The clause limits the Seller's representations and warranties regarding Tax matters, which may conflict with federal tax laws that impose broader obligations.",
"relevance": "The Internal Revenue Code, 26 U.S.C. § 6662, imposes accuracy-related penalties on underpayments. The clause's limitation on the Seller's representations and warranties regarding Tax matters may not absolve the Seller from penalties under federal tax law for inaccuracies or underpayments, thus conflicting with the broader obligations imposed by the Internal Revenue Code.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section6662&num=0&edition=prelim"
},
{
"law": "Internal Revenue Code, 26 U.S.C. § 7206 - Fraud and false statements",
"conflict": "The clause's limitation on the Seller's representations and warranties regarding Tax matters may conflict with federal tax laws that require comprehensive disclosure and accuracy.",
"relevance": "The Internal Revenue Code, 26 U.S.C. § 7206, prohibits fraud and false statements. The clause's limitation on the Seller's representations and warranties regarding Tax matters may not protect the Seller from liability under federal tax law for fraud or false statements, thus conflicting with the comprehensive disclosure and accuracy requirements imposed by the Internal Revenue Code.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section7206&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Rev. & Tax. Code § 18662",
"conflict": "The clause limits the Seller's representations and warranties regarding Tax matters to those explicitly stated in Section 3.18, which may conflict with state laws requiring broader disclosures.",
"relevance": "California Revenue and Taxation Code Section 18662 requires broader tax disclosures and withholding requirements. The clause's limitation on the Seller's representations and warranties regarding tax matters may not meet the broader disclosure and withholding requirements mandated by California law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=18662"
},
{
"state": "New York",
"law": "N.Y. Tax Law § 1409",
"conflict": "The clause's limitation on tax representations and warranties may conflict with state laws that impose additional tax disclosure obligations on sellers.",
"relevance": "New York Tax Law Section 1409 imposes additional tax disclosure obligations on sellers. However, the clause's limitation on the Seller's representations and warranties regarding tax matters may not comply with these additional tax disclosure obligations required by New York law.",
"url": "https://www.nysenate.gov/legislation/laws/TAX/1409"
}
]
}
}
]
}
{
"section_header": "Section III.20. No Other Representations and Warranties",
"analysis": [
{
"clause": "Except for therepresentations and warranties contained in this ARTICLE III (including the related portions of
the Disclosure Schedules), none of Seller, the Company or any other Person has made or makes
any other express or implied representation or warranty, either written or oral, on behalf of Seller
or the Company, including any representation or warranty as to the accuracy or completeness of
any information regarding the Company furnished or made available to Buyer (including the
confidential information memorandum prepared by FINANCIAL ADVISOR NAME dated",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause attempts to exclude liability for the accuracy or completeness of information provided, which may conflict with federal securities laws that require full and fair disclosure.",
"relevance": "The Securities Exchange Act of 1934 requires full and fair disclosure of material information. However, the clause's exclusion of liability for the accuracy or completeness of information may violate the Act's requirements for full and fair disclosure.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "Uniform Commercial Code, U.C.C. § 2-314 (Implied Warranty: Merchantability; Usage of Trade)",
"conflict": "The clause's attempt to exclude implied warranties may conflict with the Uniform Commercial Code (UCC), which imposes certain implied warranties unless they are explicitly disclaimed.",
"relevance": "The Uniform Commercial Code (UCC) imposes implied warranties unless they are explicitly disclaimed. However, the broad exclusion of implied warranties in a clause may not meet the UCC's requirements for an explicit disclaimer.",
"url": "https://www.law.cornell.edu/ucc/2/2-314"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1668",
"conflict": "The clause attempts to exclude all express or implied representations and warranties, which may conflict with state laws that impose certain non-waivable warranties.",
"relevance": "California Civil Code Section 1668 prohibits contracts that exempt anyone from responsibility for their own fraud, willful injury, or violation of law, whether willful or negligent.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1668.&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. U.C.C. Law § 2-316",
"conflict": "The clause's broad exclusion of warranties may conflict with state laws that require certain implied warranties in sales transactions.",
"relevance": "New York Uniform Commercial Code Law Section 2-316 limits the ability to disclaim implied warranties of merchantability and fitness for a particular purpose unless specific language is used.",
"url": "https://www.nysenate.gov/legislation/laws/UCC/2-316"
},
{
"state": "Texas",
"law": "Tex. Bus. & Com. Code § 17.46",
"conflict": "The clause's attempt to exclude all representations and warranties may be at odds with state laws that protect buyers from deceptive trade practices.",
"relevance": "Texas Business and Commerce Code Section 17.46 prohibits false, misleading, or deceptive acts or practices in the conduct of any trade or commerce.",
"url": "https://statutes.capitol.texas.gov/Docs/BC/htm/BC.17.htm"
}
]
}
},
{
"clause": "DATE and any information, documents or material delivered to Buyer/made available to",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Privacy Act of 1974, 5 U.S.C. § 552a",
"conflict": "The clause implies unrestricted sharing of information, documents, and material with the Buyer, which may conflict with federal privacy and data protection laws.",
"relevance": "The Privacy Act of 1974 restricts the disclosure of personal information without consent. However, the clause does not specify any consent requirements or limitations on the sharing of personal information, which could lead to violations of the Privacy Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title5/part1/chapter5/subchapter2&edition=prelim"
},
{
"law": "Classified Information Procedures Act, 18 U.S.C. App. III",
"conflict": "The clause may conflict with federal regulations on the handling of sensitive information, particularly in the context of national security.",
"relevance": "The Classified Information Procedures Act regulates the handling and disclosure of classified information. However, the clause does not address the handling of classified information, which could result in unauthorized disclosures in violation of the Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title18/appendix3&edition=prelim"
},
{
"law": "Defend Trade Secrets Act of 2016, 18 U.S.C. § 1836",
"conflict": "The clause may conflict with federal trade secret laws that protect confidential business information.",
"relevance": "The Defend Trade Secrets Act of 2016 protects trade secrets from misappropriation. However, the clause does not include provisions to protect trade secrets, potentially leading to violations of the Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title18/part1/chapter90&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Consumer Privacy Act (CCPA), Cal. Civ. Code § 1798.100 et seq.",
"conflict": "The clause does not specify the protection or confidentiality of the information, documents, or material delivered to the Buyer, which may conflict with state laws requiring specific data protection measures.",
"relevance": "The California Consumer Privacy Act (CCPA) requires businesses to implement and maintain reasonable security procedures and practices to protect consumer information. However, the clause does not mention any specific security measures or confidentiality obligations, which may be required under the CCPA for the protection of consumer information.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?division=3.&part=4.&lawCode=CIV&title=1.81.5"
},
{
"state": "New York",
"law": "New York SHIELD Act, N.Y. Gen. Bus. Law § 899-bb",
"conflict": "The clause lacks specificity regarding the handling and protection of sensitive information, which may be required under state laws governing data security and breach notification.",
"relevance": "The New York SHIELD Act requires businesses to implement data security measures and provide breach notifications. The clause does not address data security measures or breach notification requirements, which may be necessary under the SHIELD Act for the protection of sensitive information.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/899-BB"
}
]
}
},
{
"clause": "Buyer in the Seller's virtual data room maintained by DATA ROOM PROVIDER NAME on
behalf of Seller for purposes of this Agreement or any management presentations made in
expectation of the transactions contemplated hereby) or as to the future revenue, profitability or
success of the Company, or any representation or warranty arising from statute or otherwise in
law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that the statements contained in this",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78j(b)",
"conflict": "The clause attempts to disclaim any representations or warranties, including those arising from statute or law, which may conflict with federal securities laws that impose liability for material misstatements or omissions.",
"relevance": "The Securities Exchange Act of 1934 imposes liability for material misstatements or omissions. The clause's attempt to disclaim any representations or warranties, including those arising from statute or law, may be unenforceable under this Act, which holds parties liable for material misstatements or omissions in connection with the sale of securities.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "Uniform Commercial Code § 2-316",
"conflict": "The clause's broad disclaimer of warranties may conflict with the Uniform Commercial Code (UCC), which provides certain implied warranties that cannot be disclaimed in some circumstances.",
"relevance": "The Uniform Commercial Code (UCC) provides certain implied warranties. However, a clause's broad disclaimer of warranties may be limited by the UCC, which stipulates that certain implied warranties, such as the warranty of merchantability, cannot be disclaimed in some circumstances.",
"url": "https://www.law.cornell.edu/ucc/2/2-316"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1668",
"conflict": "The clause attempts to disclaim any representations or warranties, including those arising from statute or law, which may conflict with state laws that impose mandatory disclosure requirements or prohibit certain disclaimers.",
"relevance": "California Civil Code Section 1668 prohibits contracts that exempt anyone from responsibility for their own fraud, willful injury to the person or property of another, or violation of law, whether willful or negligent. The clause's attempt to disclaim all representations and warranties, including those arising from statute or law, may be invalid under this section, which prohibits such disclaimers in cases of fraud or willful injury.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1668.&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Bus. Law § 349",
"conflict": "The clause's broad disclaimer of statutory representations and warranties may conflict with state laws that require certain disclosures or prohibit the waiver of specific rights.",
"relevance": "N.Y. Gen. Bus. Law § 349 prohibits deceptive acts or practices in the conduct of any business, trade, or commerce, or in the furnishing of any service in New York. The clause's attempt to disclaim all representations and warranties, including those arising from statute or law, may be invalid under this law, which may require certain disclosures.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/349"
},
{
"state": "Texas",
"law": "Tex. Bus. & Com. Code Ann. § 17.46",
"conflict": "The clause's broad disclaimer of statutory representations and warranties may conflict with state laws that impose mandatory disclosure requirements or prohibit the waiver of specific rights.",
"relevance": "Tex. Bus. & Com. Code Ann. § 17.46 prohibits false, misleading, or deceptive acts or practices in the conduct of any trade or commerce. The clause's attempt to disclaim all representations and warranties, including those arising from statute or law, may be invalid under this section, which may require certain disclosures.",
"url": "https://statutes.capitol.texas.gov/Docs/BC/htm/BC.17.htm"
}
]
}
}
]
}
{
"section_header": "Section VII.08. Governing Law; Submission to Jurisdiction; Waiver of Jury",
"analysis": [
{
"clause": "Trial.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "7th Amendment to the United States Constitution",
"conflict": "The clause's waiver of jury trial may conflict with federal laws that protect the right to a jury trial.",
"relevance": "The 7th Amendment guarantees the right to a jury trial in civil cases. However, there is a concern that the clause's waiver of jury trial may be seen as infringing upon this constitutional right, especially if it is not explicitly and knowingly agreed upon by all parties.",
"url": "https://uscode.house.gov/"
},
{
"law": "28 U.S.C. § 1391 - Venue generally",
"conflict": "The clause's submission to jurisdiction may conflict with federal laws that govern jurisdiction and venue in civil cases.",
"relevance": "28 U.S.C. § 1391 establishes rules for determining proper venue in federal civil cases. The clause's submission to jurisdiction may conflict with these statutory rules if it attempts to designate a venue that is not in accordance with federal law.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title28/part4/chapter87&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Proc. Code § 631",
"conflict": "The clause waives the right to a jury trial, which may be unenforceable under certain state laws.",
"relevance": "California Civil Procedure Code Section 631 states that a waiver of jury trial must be made in a specific manner, and any clause that does not comply with these requirements may be deemed unenforceable.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=631.&lawCode=CCP"
},
{
"state": "Florida",
"law": "Fla. Stat. § 47.025",
"conflict": "The clause's submission to jurisdiction may conflict with state laws that protect consumers from being forced to litigate in distant forums.",
"relevance": "Florida Statute Section 47.025 prohibits the enforcement of forum selection clauses that require a consumer to litigate outside of Florida if the consumer is a resident of Florida.",
"url": "http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0047/Sections/0047.025.html"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-1401",
"conflict": "The clause's governing law provision may be overridden by state laws that mandate the application of local law in certain types of contracts.",
"relevance": "N.Y. Gen. Oblig. Law § 5-1401 allows parties to choose New York law to govern their contract, but it also imposes certain conditions and limitations that may conflict with the clause's governing law provision.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-1401"
}
]
}
},
{
"clause": "(a) All matters arising out of or relating to this/This Agreement shall be
governed by and construed in accordance with the internal laws of the State of STATE
without giving effect to any choice or conflict of law provision or rule (whether of the
State of STATE or any other jurisdiction). Any Action arising out of or related to this
Agreement or the transactions contemplated hereby may be instituted in the federal courts
of the United States of America or the courts of the State of STATE in each case located
in the city of RELEVANT CITY and county of RELEVANT COUNTY, and each
party irrevocably submits to the exclusive jurisdiction of such courts in any such Action.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Supremacy Clause, U.S. Const. art. VI, cl. 2.",
"conflict": "The clause's stipulation that the internal laws of the State of STATE will govern all matters arising out of the Agreement may conflict with federal preemption principles.",
"relevance": "The Supremacy Clause establishes that federal law takes precedence over state laws when there is a conflict between federal and state law. If a state attempts to apply its internal laws without regard to federal law, such an attempt could be invalidated if federal law preempts state law in any relevant aspect of the agreement.",
"url": "https://uscode.house.gov/"
},
{
"law": "28 U.S.C. § 1331 (Federal Question Jurisdiction).",
"conflict": "The clause's exclusive jurisdiction provision may conflict with federal statutes that provide for jurisdiction in other courts.",
"relevance": "28 U.S.C. § 1331 provides that federal district courts have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States, regardless of any state law provisions to the contrary. The clause's exclusive jurisdiction provision could be challenged if a federal question is involved, as federal courts have jurisdiction over such matters irrespective of the Agreement's stipulations.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title28/part4/chapter85&edition=prelim"
},
{
"law": "Federal Arbitration Act, 9 U.S.C. §§ 1-16.",
"conflict": "The clause's choice of law provision may be overridden by federal statutes that mandate the application of federal law in certain contexts.",
"relevance": "The Federal Arbitration Act requires the enforcement of arbitration agreements according to federal standards, even if state law would otherwise apply. This means that if an agreement includes an arbitration clause, the choice of law provision in the clause could be preempted by the Federal Arbitration Act, as federal law would govern the enforceability of the arbitration agreement.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title9/chapter1&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1646.5",
"conflict": "The clause specifies that the internal laws of the State of STATE will govern the agreement without giving effect to any choice or conflict of law provision or rule. However, some states have laws that mandate the application of their own laws in certain circumstances, regardless of the parties' choice.",
"relevance": "California Civil Code Section 1646.5 mandates that California law will apply to contracts involving California residents or businesses, regardless of the parties' choice of law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1646.5&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-1402",
"conflict": "The clause specifies exclusive jurisdiction in the courts of the State of STATE. However, some states have laws that provide for concurrent jurisdiction or prohibit exclusive jurisdiction clauses.",
"relevance": "New York General Obligations Law Section 5-1402 allows for concurrent jurisdiction in New York courts even if the parties have agreed to exclusive jurisdiction in another state.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-1402"
}
]
}
},
{
"clause": "(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH
PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THIS
AGREEMENT, INCLUDING ANY EXHIBITS AND SCHEDULES ATTACHED TO
THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO
REPRESENTATIVE OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT SEEK TO ENFORCE
THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION; (II) EACH
PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (III) EACH
PARTY MAKES THIS WAIVER KNOWINGLY AND VOLUNTARILY; AND (IV)
EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "U.S. Const. amend. VII",
"conflict": "The Seventh Amendment to the United States Constitution guarantees the right to a jury trial in certain civil cases and inhibits courts from overturning a jury's findings of fact.",
"relevance": "The Seventh Amendment guarantees the right to a jury trial in certain civil cases. However, the clause in the agreement seeks to waive this right, which creates a conflict. This is because the waiver may not be enforceable if it is deemed to infringe upon the constitutional rights guaranteed by the Seventh Amendment.",
"url": "https://uscode.house.gov/"
},
{
"law": "Federal Arbitration Act, 9 U.S.C. §§ 1-16",
"conflict": "The Federal Arbitration Act (FAA) supports the enforcement of arbitration agreements, which often include waivers of jury trials. However, it also requires that such waivers be made knowingly and voluntarily, and courts have sometimes found waivers unenforceable if they were not clearly agreed upon.",
"relevance": "The Federal Arbitration Act supports the enforcement of arbitration agreements, including waivers of jury trials. However, while the FAA generally supports these agreements, it also requires that waivers of jury trials be made knowingly and voluntarily. If the clause in the agreement asserts that the waiver is made knowingly and voluntarily, it may still be challenged in court. In such cases, the waiver may be found unenforceable if it is not clearly agreed upon by both parties.",
"url": "https://uscode.house.gov/"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Const. art. I, § 16",
"conflict": "The clause waives the right to a jury trial, which is generally protected under state constitutions and laws.",
"relevance": "The California Constitution guarantees the right to a jury trial. However, the waiver clause in the agreement seeks to waive this right, which is protected under the California Constitution.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CONS&sectionNum=16.&article=I"
},
{
"state": "New York",
"law": "N.Y. Const. art. I, § 2",
"conflict": "The clause waives the right to a jury trial, which is generally protected under state constitutions and laws.",
"relevance": "The New York Constitution guarantees the right to a jury trial. However, the waiver clause in the agreement seeks to waive this right, which is protected under the New York Constitution.",
"url": "https://www.dos.ny.gov/info/constitution/article_1_rights.html"
},
{
"state": "Texas",
"law": "Tex. Const. art. I, § 15",
"conflict": "The clause waives the right to a jury trial, which is generally protected under state constitutions and laws.",
"relevance": "The Texas Constitution guarantees the right to a jury trial. However, the waiver clause in the agreement seeks to waive this right, which is protected under the Texas Constitution.",
"url": "https://statutes.capitol.texas.gov/Docs/CN/htm/CN.1.htm"
}
]
}
}
]
}
{
"section_header": "Section III.14. Compliance with Laws; Permits.",
"analysis": [
{
"clause": "(a) Except as set forth in Section 3.14(a) of the Disclosure Schedules, the
Company is in compliance with all Laws applicable to it or its business, properties or
assets, except where the failure to be in compliance would not have a Material Adverse
Effect.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq.",
"conflict": "The clause asserts that the Company is in compliance with all applicable laws unless non-compliance would not have a Material Adverse Effect. However, certain federal laws impose strict liability and do not consider the materiality of the effect.",
"relevance": "The company must comply with CERCLA regulations. However, CERCLA imposes strict liability for environmental contamination, regardless of the materiality of the effect on the company. This contradicts the clause's exception for non-compliance that does not have a Material Adverse Effect.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter103&edition=prelim"
},
{
"law": "Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq.",
"conflict": "The clause allows for non-compliance if it does not have a Material Adverse Effect, but certain labor laws require strict adherence regardless of the impact on the company.",
"relevance": "The company must comply with FLSA regulations. However, there is a conflict because FLSA mandates compliance with wage and hour laws regardless of the materiality of the effect on the company. This contradicts the clause that allows for non-compliance if it does not have a Material Adverse Effect.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter8&edition=prelim"
},
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause's exception for non-compliance that does not have a Material Adverse Effect is not aligned with certain securities laws that require strict compliance.",
"relevance": "A company must comply with Securities Exchange Act regulations. However, the Securities Exchange Act requires strict compliance with its provisions, including reporting and disclosure requirements, regardless of the materiality of the effect on the company. This contradicts any clause that allows for exceptions to compliance based on the lack of a Material Adverse Effect.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Consumer Privacy Act (CCPA), Cal. Civ. Code § 1798.100 et seq.",
"conflict": "The clause asserts that the Company is in compliance with all applicable laws unless non-compliance would not have a Material Adverse Effect. However, certain state laws impose strict liability regardless of materiality.",
"relevance": "The company must comply with all provisions of the CCPA. However, the CCPA imposes strict compliance requirements on businesses handling personal data of California residents, regardless of whether non-compliance has a Material Adverse Effect. This contradicts the clause's exception for non-material non-compliance.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?division=3.&part=4.&lawCode=CIV&title=1.81.5"
},
{
"state": "New York",
"law": "New York Environmental Conservation Law (ECL), N.Y. Envtl. Conserv. Law § 17-0101 et seq.",
"conflict": "The clause allows for non-compliance if it does not result in a Material Adverse Effect, but certain state environmental laws impose strict liability regardless of materiality.",
"relevance": "The company must comply with all provisions of the Environmental Conservation Law (ECL). However, the ECL imposes strict liability for environmental violations, regardless of whether the non-compliance has a Material Adverse Effect. This strict liability is in direct conflict with the clause's exception for non-material non-compliance.",
"url": "https://www.nysenate.gov/legislation/laws/ENV"
}
]
}
},
{
"clause": "(b) All permits, licenses, franchises, approvals, authorizations and consents
required to be obtained from Governmental Authorities (collectively, \"Permits\") for the
Company to conduct its business have been obtained and are valid and in full force and
effect, except where the failure to obtain such Permits would not have a Material Adverse
Effect.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Clean Water Act, 33 U.S.C. § 1251 et seq.",
"conflict": "The clause asserts that all necessary permits and licenses have been obtained and are valid, except where failure to obtain them would not have a Material Adverse Effect. However, certain federal laws impose strict liability for operating without required permits, regardless of the materiality of the effect.",
"relevance": "The Clean Water Act imposes strict liability for operating without required permits. However, it does not consider the materiality of the effect when determining liability, which contradicts the clause's exception for non-material adverse effects.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title33/chapter26&edition=prelim"
},
{
"law": "Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.",
"conflict": "The clause allows for the possibility that some permits may not be obtained if their absence does not have a Material Adverse Effect. However, certain federal laws mandate that specific permits must be obtained regardless of the impact on the business.",
"relevance": "The Resource Conservation and Recovery Act requires specific permits for hazardous waste management. However, this mandate conflicts with the clause's allowance for non-material adverse effects, as the Act does not provide exceptions based on materiality.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter82&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Bus. & Prof. Code § 26038 (2023)",
"conflict": "The clause asserts that all necessary permits and licenses have been obtained and are valid, except where failure to obtain them would not have a Material Adverse Effect. However, certain state laws impose strict liability for operating without required permits, regardless of the materiality of the effect.",
"relevance": "California Business and Professions Code Section 26038 imposes strict liability for operating without required permits. This means that individuals or entities can be held liable regardless of intent or negligence. However, the law does not consider the materiality of the effect when determining liability, which contradicts the clause's exception for non-material adverse effects.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=26038&lawCode=BPC"
},
{
"state": "New York",
"law": "N.Y. Gen. Bus. Law § 130 (2023)",
"conflict": "The clause allows for the possibility that some permits may not be obtained if their absence does not have a Material Adverse Effect. However, this is in direct conflict with New York state law, which mandates that all required permits must be obtained for lawful operation.",
"relevance": "New York General Business Law Section 130 requires that all necessary permits for lawful operation must be obtained. This law mandates that all required permits must be secured without any exceptions for materiality, which directly conflicts with any clause that allows for non-material adverse effects.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/130"
}
]
}
},
{
"clause": "(c) None of the representations and warranties contained in this Section 3.14
shall be deemed to relate to environmental matters (which are governed by Section 3.15),
employee benefits matters (which are governed by Section 3.16), employment matters
(which are governed by Section 3.17) or tax matters (which are governed by Section
3.18).",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq.",
"conflict": "The clause attempts to exclude certain matters from the scope of representations and warranties in Section 3.14, but federal laws may impose obligations that cannot be contractually excluded.",
"relevance": "CERCLA imposes liability for environmental contamination regardless of contractual exclusions. Even if an agreement includes a clause that attempts to exclude environmental matters from representations and warranties, CERCLA's liability provisions cannot be contractually excluded.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter103&edition=prelim"
},
{
"law": "Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq.",
"conflict": "The clause attempts to exclude certain matters from the scope of representations and warranties in Section 3.14, but federal laws may impose obligations that cannot be contractually excluded.",
"relevance": "ERISA imposes fiduciary duties on employers regarding employee benefit plans regardless of contractual exclusions. Even if a clause in an agreement attempts to exclude employee benefits matters from representations and warranties, these fiduciary duties mandated by ERISA cannot be contractually excluded.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18&edition=prelim"
},
{
"law": "Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq.",
"conflict": "The clause attempts to exclude certain matters from the scope of representations and warranties in Section 3.14, but federal laws may impose obligations that cannot be contractually excluded.",
"relevance": "The Fair Labor Standards Act (FLSA) imposes minimum wage and overtime pay requirements on employers regardless of any contractual exclusions. Although the clause in the agreement attempts to exclude employment matters from representations and warranties, the FLSA mandates that these wage and overtime pay requirements cannot be contractually excluded.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter8&edition=prelim"
},
{
"law": "Internal Revenue Code (IRC), 26 U.S.C. § 1 et seq.",
"conflict": "The clause attempts to exclude certain matters from the scope of representations and warranties in Section 3.14, but federal laws may impose obligations that cannot be contractually excluded.",
"relevance": "The clause in the agreement attempts to exclude tax matters from representations and warranties, but the IRC imposes tax obligations that cannot be contractually excluded. This means that regardless of any contractual exclusions, entities are still subject to tax obligations as mandated by the IRC.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Civil Code § 1668",
"conflict": "The clause attempts to exclude certain matters from the representations and warranties in Section 3.14, but state laws may require comprehensive disclosure and cannot be waived by contract.",
"relevance": "California Civil Code § 1668 prohibits contracts that exempt anyone from responsibility for their own fraud, willful injury, or violation of law, whether willful or negligent. The clause in the agreement attempts to exclude certain matters from representations and warranties, which could be seen as an attempt to limit liability in ways that are not permissible under California law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1668.&lawCode=CIV"
},
{
"state": "New York",
"law": "New York General Business Law § 349",
"conflict": "The clause's exclusion of certain matters from representations and warranties may conflict with state laws that require full disclosure in specific contexts.",
"relevance": "New York General Business Law § 349 prohibits deceptive acts and practices in the conduct of any business, trade, or commerce or in the furnishing of any service in New York. The clause's attempt to exclude certain matters from representations and warranties could be seen as a deceptive practice if it results in a lack of necessary disclosure, which is prohibited under New York law.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/349"
}
]
}
}
]
}
{
"section_header": "Section II.02. Seller Closing Deliverables",
"analysis": [
{
"clause": "At the Closing, Seller shall deliver to Buyerthe following:(a) Share certificates evidencing the Shares, free and clear of all
Encumbrances, duly endorsed in blank or accompanied by stock powers or other
instruments of transfer duly executed in blank.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Act of 1933, 15 U.S.C. § 77a et seq.",
"conflict": "The clause requires the delivery of share certificates free and clear of all encumbrances, which may conflict with federal securities laws that impose restrictions on the transfer of certain shares.",
"relevance": "The Securities Act of 1933 imposes restrictions on the transfer of certain shares. The clause's requirement for shares to be free and clear of all encumbrances may conflict with these restrictions, making it potentially non-compliant with federal law.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2A&edition=prelim"
},
{
"law": "Internal Revenue Code, 26 U.S.C. § 6321",
"conflict": "The clause's requirement for shares to be free and clear of all encumbrances may conflict with federal tax liens that could be placed on the shares.",
"relevance": "The Internal Revenue Code allows federal tax liens on property, including shares. However, the clause's requirement for shares to be free and clear of all encumbrances may be in conflict with existing federal tax liens, making it potentially non-compliant with federal tax law.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleF/chapter64/subchapterC&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Corp. Code § 418",
"conflict": "The clause requires the delivery of share certificates free and clear of all encumbrances, but certain state laws may impose restrictions or conditions on the transfer of shares that could create encumbrances.",
"relevance": "The California Corporations Code imposes restrictions on the transfer of shares. This could potentially conflict with a clause that requires share certificates to be free and clear of all encumbrances, as the restrictions imposed by California law may create encumbrances.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=418"
},
{
"state": "Delaware",
"law": "Del. Code Ann. tit. 8, § 201",
"conflict": "The clause requires the delivery of share certificates duly endorsed in blank or accompanied by stock powers, but certain state laws may have specific requirements for the endorsement and transfer of shares.",
"relevance": "The Delaware General Corporation Law requires specific procedures for the endorsement and transfer of shares. While a clause might state that share certificates need to be duly endorsed in blank or accompanied by stock powers, it is important to note that Delaware law may have additional specific requirements that could potentially conflict with this provision.",
"url": "https://delcode.delaware.gov/title8/c001/sc07/index.html"
}
]
}
},
{
"clause": "(b) A certificate of the Secretary (or other officer) of Seller certifying: (i) that
attached thereto are true and complete copies of all resolutions of the board of directors
and the stockholders of Seller authorizing the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby, and that
such resolutions are in full force and effect; (ii) the names, titles and signatures of the
officers of Seller authorized to sign this Agreement; and (iii) that attached thereto are true
and complete copies of the governing documents of the Company, including any
amendments or restatements thereof, and that such governing documents are in full force
and effect.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (2002)",
"conflict": "The clause requires the Secretary to certify the authenticity and completeness of certain documents and resolutions. However, the Sarbanes-Oxley Act imposes stringent requirements on corporate officers, including the CEO and CFO, to certify the accuracy of financial statements and disclosures, which could conflict with the responsibilities assigned to the Secretary in this clause.",
"relevance": "The Sarbanes-Oxley Act imposes stringent requirements on corporate officers to certify the accuracy of financial statements and disclosures. However, the clause assigns certification responsibilities to the Secretary, which may conflict with the Sarbanes-Oxley Act's requirements for the CEO and CFO.",
"url": "https://uscode.house.gov/"
},
{
"law": "Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010)",
"conflict": "The clause requires the Secretary to certify the completeness and authenticity of the governing documents and resolutions. The Dodd-Frank Act imposes additional corporate governance and disclosure requirements that could complicate the Secretary's ability to certify these documents without additional oversight or verification.",
"relevance": "The Dodd-Frank Act imposes additional corporate governance and disclosure requirements on corporate officers and directors. However, the clause's requirement for the Secretary to certify documents may conflict with these additional governance and disclosure requirements, necessitating further oversight.",
"url": "https://uscode.house.gov/"
}
],
"potentially_conflicting_state_laws": [
{
"state": "Delaware",
"law": "Del. Code Ann. tit. 8, § 103 - Execution, acknowledgment, filing, recording and effective date of documents",
"conflict": "The clause requires the Secretary to certify the authenticity and completeness of resolutions and governing documents, which may conflict with state laws that impose different or additional requirements for such certifications.",
"relevance": "Delaware Code Annotated, Title 8, Section 103 requires specific formalities for the execution and acknowledgment of corporate documents. These formalities may include notarization or other forms of verification that are not explicitly mentioned in the clause.",
"url": "https://delcode.delaware.gov/title8/c001/sc01/index.shtml"
},
{
"state": "California",
"law": "Cal. Corp. Code § 313 - Execution of instruments; presumptions",
"conflict": "The clause's requirement for the Secretary to certify the governing documents and resolutions may conflict with state laws that have specific provisions for the certification process.",
"relevance": "California Corporation Code Section 313 presumes that certain officers are authorized to execute instruments on behalf of the corporation. However, this presumption may conflict with the clause's specific requirements for certification by the Secretary.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=313"
}
]
}
},
{
"clause": "(c) A certificate pursuant to Treasury Regulations Section 1.1445-2(b) that
Seller is not a foreign person within the meaning of Section 1445 of the Internal Revenue
Code of 1986 (as amended, the \"Code\").",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Civil Rights Act of 1964, Title VII, 42 U.S.C. § 2000e et seq.",
"conflict": "The clause requires a certificate stating that the Seller is not a foreign person, but certain anti-discrimination laws may challenge the requirement to disclose nationality status.",
"relevance": "Title VII of the Civil Rights Act of 1964 prohibits discrimination based on national origin. Requiring a certificate that the Seller is not a foreign person could be seen as discriminatory based on national origin, which is prohibited under this law.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter21&edition=prelim"
},
{
"law": "Privacy Act of 1974, 5 U.S.C. § 552a",
"conflict": "The clause's requirement for a certificate may conflict with privacy laws that protect personal information, including nationality status.",
"relevance": "The Privacy Act of 1974 protects personal information from being disclosed without the individual's consent. Requiring a certificate that includes nationality status may violate this act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title5/part1/chapter5/subchapter2&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Rev. & Tax. Code § 18662",
"conflict": "The clause requires a certificate stating that the seller is not a foreign person, which may conflict with state laws that have different requirements or definitions regarding foreign persons in real estate transactions.",
"relevance": "California Revenue and Taxation Code Section 18662 requires withholding on sales of California real property by non-residents. However, this state requirement may conflict with federal regulations that necessitate a certificate stating that the seller is not a foreign person. This discrepancy could lead to a situation where adhering to one law does not fulfill the obligations of the other.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=18662&lawCode=RTC"
},
{
"state": "New York",
"law": "N.Y. Tax Law § 663",
"conflict": "The clause's requirement for a certificate stating that the seller is not a foreign person may conflict with state laws that have different definitions or additional requirements for foreign persons in real estate transactions.",
"relevance": "New York Tax Law Section 663 requires withholding on sales of New York real property by non-residents. However, this requirement may conflict with the federal requirement for a certificate stating that the seller is not a foreign person. This could create a situation where compliance with one law does not satisfy the requirements of the other.",
"url": "https://www.nysenate.gov/legislation/laws/TAX/663"
}
]
}
},
{
"clause": "(d) OTHER SELLER DELIVERABLES",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. §§ 2601-2617",
"conflict": "The clause requires the seller to provide certain deliverables at closing, which may conflict with federal laws governing the timing and nature of disclosures in real estate transactions.",
"relevance": "RESPA requires specific disclosures and timing for deliverables in real estate transactions. However, the clause in the agreement may impose additional or conflicting requirements on the seller that are not in compliance with RESPA's mandated disclosures and timing.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title12/chapter27&edition=prelim"
},
{
"law": "Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301-2312",
"conflict": "The clause may require the seller to provide deliverables that could be interpreted as warranties or guarantees, which might conflict with federal laws regulating such representations.",
"relevance": "The Magnuson-Moss Warranty Act regulates warranties and guarantees in consumer transactions. However, there is a concern that certain clauses may impose requirements on the seller that could be construed as warranties or guarantees, potentially conflicting with the Act's regulations.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter50&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1102.6 - Real Estate Transfer Disclosure Statement",
"conflict": "The clause requires the seller to provide certain deliverables at closing, which may conflict with state laws that impose different or additional requirements on sellers during real estate transactions.",
"relevance": "California Civil Code Section 1102.6 requires sellers to provide a Real Estate Transfer Disclosure Statement (TDS) that includes specific information about the property condition. However, the clause in the agreement may not account for the specific requirements of the TDS, leading to potential conflicts or omissions in the seller's deliverables.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1102.6&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Real Prop. Law § 462 - Property Condition Disclosure Statement",
"conflict": "The clause may not align with state laws that mandate specific disclosures or documentation from sellers, which could result in non-compliance.",
"relevance": "New York Real Property Law Section 462 requires sellers to provide a Property Condition Disclosure Statement (PCDS) that details the condition of the property. However, the clause may not include the specific requirements of the PCDS, which could lead to potential legal issues for the seller if the deliverables at closing are incomplete or incorrect.",
"url": "https://www.nysenate.gov/legislation/laws/RPP/462"
}
]
}
}
]
}
{
"section_header": "Section III.11. Intellectual Property.",
"analysis": [
{
"clause": "(a) The term \"Intellectual Property\" means any and all of the following
arising pursuant to the Laws of any jurisdiction throughout the world: (i) trademarks,
service marks, trade names and similar indicia of source or origin, all registrations and
applications for registration thereof, and the goodwill connected with the use of and
symbolized by the foregoing; (ii) copyrights and all registrations and applications for
registration thereof; (iii) trade secrets and know-how; (iv) patents and patent applications;(v) internet domain name registrations; and (vi) other intellectual property and related
proprietary rights.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Lanham Act, 15 U.S.C. §§ 1051-1127",
"conflict": "The clause broadly defines 'Intellectual Property' to include various forms of IP without specific limitations, which may conflict with certain federal laws that have more restrictive definitions or requirements.",
"relevance": "The Lanham Act provides specific definitions and requirements for trademarks and service marks, which may not align with the broad and inclusive definitions provided in the clause. For example, the Lanham Act requires actual use in commerce for trademark registration, which is not explicitly mentioned in the clause.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter22&edition=prelim"
},
{
"law": "Defend Trade Secrets Act, 18 U.S.C. § 1836",
"conflict": "The clause includes 'trade secrets and know-how' under 'Intellectual Property,' which may conflict with the specific requirements and definitions under the Defend Trade Secrets Act.",
"relevance": "The Defend Trade Secrets Act defines 'trade secrets' with specific criteria, which may not be fully captured by the broad term 'know-how' used in the clause. The Act requires that the information derives independent economic value from not being generally known and is subject to reasonable measures to keep it secret.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title18/part1/chapter90&edition=prelim"
},
{
"law": "Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d)",
"conflict": "The clause's inclusion of 'internet domain name registrations' as 'Intellectual Property' may conflict with the specific provisions and limitations under the Anticybersquatting Consumer Protection Act.",
"relevance": "The Anticybersquatting Consumer Protection Act provides specific protections and limitations for domain name registrations, which may not align with the broad categorization of domain names as 'Intellectual Property' in the clause. The Act focuses on preventing bad-faith registration of domain names that are identical or confusingly similar to trademarks.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter22&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Business and Professions Code § 17200",
"conflict": "The clause broadly defines 'Intellectual Property' to include all forms of IP arising under any jurisdiction's laws, which may conflict with state-specific IP laws that have unique definitions or protections.",
"relevance": "California Business and Professions Code § 17200 prohibits unfair competition, which includes any unlawful, unfair, or fraudulent business act or practice. However, the broad definition of 'Intellectual Property' in the clause may encompass practices that could be deemed unfair competition under California law, leading to potential conflicts.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=17200"
},
{
"state": "New York",
"law": "New York General Business Law § 360",
"conflict": "The clause's inclusion of 'trade secrets and know-how' may conflict with state-specific trade secret laws that have unique definitions or requirements.",
"relevance": "New York General Business Law § 360 defines trade secrets with specific criteria that may not align with the broad definition in the clause. The clause's broad definition of 'trade secrets and know-how' may not meet the specific criteria set forth by New York law, leading to potential legal conflicts.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/360"
}
]
}
},
{
"clause": "(b) Section 3.11(b) of the Disclosure Schedules lists all issued patents, patent
applications, trademark registrations and pending applications for registration, copyright
registrations and pending applications for registration and internet domain name
registrations owned by the Company. Except as set forth in Section 3.11(b) of the
Disclosure Schedules, or as would not have a Material Adverse Effect, the Company
owns or has the right to use all Intellectual Property necessary for the conduct of the
Company's business as currently conducted (the \"Company Intellectual Property\").",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Digital Millennium Copyright Act, 17 U.S.C. § 1201 et seq.",
"conflict": "The clause asserts that the Company owns or has the right to use all necessary Intellectual Property, but the Digital Millennium Copyright Act (DMCA) imposes restrictions that could limit the Company's use of certain copyrighted materials.",
"relevance": "The Digital Millennium Copyright Act (DMCA) imposes restrictions on the use of copyrighted materials. This could limit the Company's ability to use certain copyrighted materials, which contradicts the clause's assertion that the Company has the right to use all necessary Intellectual Property.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title17/chapter12&edition=prelim"
},
{
"law": "Lanham Act, 15 U.S.C. § 1051 et seq.",
"conflict": "The clause asserts ownership and right to use all necessary Intellectual Property, but the Lanham Act governs trademark use and could challenge the Company's claims if there are conflicting trademarks.",
"relevance": "The Lanham Act governs trademark use. However, it could challenge the Company's claims to trademark ownership and use, which contradicts the clause's assertion that the Company owns or has the right to use all necessary Intellectual Property.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter22&edition=prelim"
},
{
"law": "Patent Act, 35 U.S.C. § 1 et seq.",
"conflict": "The clause asserts ownership and right to use all necessary Intellectual Property, but the Patent Act governs patent rights and could challenge the Company's claims if there are conflicting patents.",
"relevance": "The Patent Act governs patent rights. However, there is a potential conflict as the Patent Act could challenge the Company's claims to patent ownership and use. This contradicts the clause's assertion that the Company owns or has the right to use all necessary Intellectual Property.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title35&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Business and Professions Code § 16600",
"conflict": "The clause asserts that the Company owns or has the right to use all necessary Intellectual Property, but certain state laws may impose additional requirements or restrictions on the use or ownership of specific types of Intellectual Property.",
"relevance": "California Business and Professions Code § 16600 prohibits any contract that restrains anyone from engaging in a lawful profession, trade, or business of any kind. This law could potentially invalidate non-compete clauses or other restrictive covenants that the Company relies on to protect its Intellectual Property, thereby affecting the assertion that the Company has the right to use all necessary Intellectual Property.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC&sectionNum=16600"
},
{
"state": "New York",
"law": "New York General Business Law § 360-l",
"conflict": "The clause asserts that the Company owns or has the right to use all necessary Intellectual Property, but certain state laws may impose additional requirements or restrictions on the use or ownership of specific types of Intellectual Property.",
"relevance": "New York General Business Law § 360-l prohibits the dilution of the distinctive quality of a mark or trade name. This law could restrict the Company's ability to use certain trademarks or trade names if their use is deemed to dilute the distinctive quality of another mark. Consequently, this could affect the assertion that the Company has the right to use all necessary Intellectual Property.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/360-L"
}
]
}
},
{
"clause": "(c) Except as would not have a Material Adverse Effect, to Seller's
knowledge: (i) the conduct of the Company's business as currently conducted does not
infringe, misappropriate or otherwise violate the Intellectual Property of any Person; and
(ii) no Person is infringing, misappropriating or otherwise violating any Company
Intellectual Property. This Section 3.11(c) constitutes the sole representation and warranty
of Seller under this Agreement with respect to any actual or alleged infringement,
misappropriation or other violation of Intellectual Property.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "17 U.S.C. § 501 - Infringement of copyright",
"conflict": "The clause's assertion that the Company's business does not infringe on any Intellectual Property may be contradicted by existing federal laws that protect intellectual property rights.",
"relevance": "Any person who violates any of the exclusive rights of the copyright owner is an infringer of the copyright. The clause asserts that the Company's business does not infringe on any Intellectual Property, but 17 U.S.C. § 501 states that any person who violates the exclusive rights of a copyright owner is an infringer. This could directly contradict the clause if the Company is found to be infringing on any copyright.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title17/chapter5&edition=prelim"
},
{
"law": "35 U.S.C. § 271 - Infringement of patent",
"conflict": "The clause's assertion that no Person is infringing on any Company Intellectual Property may be contradicted by existing federal laws that protect patent rights.",
"relevance": "According to 35 U.S.C. § 271, anyone who, without authority, makes, uses, offers to sell, or sells any patented invention is infringing the patent. This legal provision could directly contradict a clause that asserts no person is infringing on any Company Intellectual Property if it is found that someone is indeed infringing on the Company's patents.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title35/part3/chapter28&edition=prelim"
},
{
"law": "18 U.S.C. § 1836 - Civil proceedings to enjoin violations",
"conflict": "The clause's assertion that the Company's business does not misappropriate any Intellectual Property may be contradicted by existing federal laws that protect trade secrets.",
"relevance": "An owner of a trade secret that is misappropriated may bring a civil action to obtain appropriate relief. However, the clause asserts that the Company's business does not misappropriate any Intellectual Property. This could directly contradict the clause if the Company is found to be misappropriating any trade secrets, as 18 U.S.C. § 1836 allows the owner of a misappropriated trade secret to seek relief through civil action.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title18/part1/chapter90&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1798.82 - Notification of Security Breach",
"conflict": "The clause limits the Seller's liability to only what is known to them and excludes any unknown infringements that do not have a Material Adverse Effect. This could be negatively aligned with state laws that impose stricter liability on sellers for intellectual property infringements.",
"relevance": "Any person or business shall disclose any breach of the security of the system. The law requires disclosure of any security breach, which could include intellectual property infringements, regardless of the material adverse effect. This contrasts with the clause that limits the Seller's liability to known issues and those with a Material Adverse Effect.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1798.82&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Bus. Law § 349 - Deceptive Acts and Practices Unlawful",
"conflict": "The clause's limitation on the Seller's liability to known infringements and those with a Material Adverse Effect may conflict with state laws that impose broader responsibilities on businesses to protect intellectual property rights.",
"relevance": "Deceptive acts or practices are unlawful in the conduct of any business, trade, or commerce. The law broadly prohibits such deceptive acts or practices, which could include failing to disclose known or potential intellectual property infringements. This contrasts with the clause that limits the Seller's liability to known issues and those with a Material Adverse Effect.",
"url": "https://www.nysenate.gov/legislation/laws/GBS/349"
}
]
}
}
]
}
{
"section_header": "Section III.17. Employment Matters.",
"analysis": [
{
"clause": "(a) Except as set forth in Section 3.17(a) of the Disclosure Schedules, the
Company is not a party to, or bound by, any collective bargaining or other agreement
with a labor organization representing any of its employees. Except as set forth in
Section 3.17(a) of the Disclosure Schedules, since DATE, there has not been, nor, to
Seller's knowledge, has there been any threat of, any strike, slowdown, work stoppage,
picketing or other similar labor disruption or dispute affecting the Company.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "National Labor Relations Act, 29 U.S.C. §§ 151-169",
"conflict": "The clause asserts that there have been no strikes, slowdowns, work stoppages, picketing, labor disruptions, or labor disputes, and that the company is not party to any collective bargaining or labor organization agreements. However, certain federal laws protect the rights of employees to engage in such activities and to form or join labor organizations.",
"relevance": "The National Labor Relations Act (NLRA) protects employees' rights to organize, bargain collectively, and engage in concerted activities for mutual aid or protection. However, the clause's assertion that there have been no labor disputes or related activities and that the company is not party to any collective bargaining agreements could be seen as contrary to the protections afforded by the NLRA. The NLRA encourages collective bargaining and protects employees' rights to engage in activities such as strikes and picketing, which the clause seems to negate.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter7&edition=prelim"
},
{
"law": "Labor Management Reporting and Disclosure Act, 29 U.S.C. §§ 401-531",
"conflict": "The clause's assertion that there have been no labor disputes or related activities and that the company is not party to any collective bargaining agreements could be seen as contrary to the protections afforded by the Labor Management Reporting and Disclosure Act (LMRDA).",
"relevance": "The Labor Management Reporting and Disclosure Act (LMRDA) protects the rights of union members and promotes transparency and democracy within labor organizations. However, the clause's assertion that there have been no labor disputes or related activities and that the company is not party to any collective bargaining agreements could be seen as contrary to the protections afforded by the LMRDA. The LMRDA aims to protect union members' rights and ensure fair practices within labor organizations, which the clause seems to negate.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter11&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Labor Code § 923",
"conflict": "The clause asserts that there have been no strikes, slowdowns, work stoppages, picketing, labor disruptions, or labor disputes, and that the company is not party to any collective bargaining or labor organization agreements. However, certain state laws may provide protections or rights to employees that could conflict with these assertions.",
"relevance": "California Labor Code § 923 protects the rights of employees to engage in collective bargaining and other concerted activities for mutual aid or protection. The clause's assertion that there have been no labor disputes or collective bargaining agreements may be challenged under this law, which explicitly protects such activities.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=923"
},
{
"state": "New York",
"law": "New York Labor Law § 704",
"conflict": "The clause's assertion that there have been no labor disputes or disruptions may be at odds with state laws that protect employees' rights to organize and engage in concerted activities.",
"relevance": "New York Labor Law § 704 guarantees employees the right to organize and bargain collectively through representatives of their own choosing. The clause's assertion that there have been no labor disputes or collective bargaining agreements may be inconsistent with this law, which protects such employee activities.",
"url": "https://www.nysenate.gov/legislation/laws/LAB/704"
},
{
"state": "Illinois",
"law": "Illinois Public Labor Relations Act, 5 ILCS 315/6",
"conflict": "The clause's assertion that there have been no labor disputes or disruptions may be at odds with state laws that protect employees' rights to organize and engage in concerted activities.",
"relevance": "The Illinois Public Labor Relations Act, 5 ILCS 315/6, protects the rights of public employees to organize and engage in collective bargaining. The clause's assertion that there have been no labor disputes or collective bargaining agreements may be inconsistent with this law, which explicitly protects such activities for public employees.",
"url": "https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=108&ChapterID=2"
}
]
}
},
{
"clause": "(b) The Company is in compliance with all applicable Laws pertaining to
employment and employment practices to the extent they relate to employees of the
Company, except to the extent non-compliance would not result in a Material Adverse
Effect. Except as set forth in Section 3.17(b) of the Disclosure Schedules, or as would
not have a Material Adverse Effect, there are no Actions against the Company pending,
or to the Seller's knowledge, threatened to be brought or filed, by or with any
Governmental Authority or arbitral tribunal in connection with the employment or
termination of employment of any current or former employee of the Company,
including, without limitation, any Action relating to unfair labor practices, employment
discrimination, harassment, retaliation, leave, accommodation, minimum wages,
overtime compensation, equal pay or any other hiring, employment or employment
termination related matter arising under applicable Laws.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201-219.",
"conflict": "The clause's exception for non-compliance that does not result in a Material Adverse Effect may conflict with the strict compliance requirements of the Fair Labor Standards Act (FLSA).",
"relevance": "The Fair Labor Standards Act (FLSA) requires strict compliance with minimum wage, overtime pay, and other labor standards. However, the clause allows for exceptions to compliance if non-compliance does not result in a Material Adverse Effect, which may not align with the FLSA's strict requirements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter8&edition=prelim"
},
{
"law": "Civil Rights Act of 1964, Title VII, 42 U.S.C. §§ 2000e-2000e-17.",
"conflict": "The clause's exception for non-compliance that does not result in a Material Adverse Effect may conflict with the strict anti-discrimination requirements of Title VII of the Civil Rights Act.",
"relevance": "Title VII of the Civil Rights Act prohibits employment discrimination based on race, color, religion, sex, or national origin. However, there is a clause that allows for exceptions to compliance if non-compliance does not result in a Material Adverse Effect. This clause may not align with Title VII's strict anti-discrimination requirements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter21&edition=prelim"
},
{
"law": "Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12101-12213.",
"conflict": "The clause's exception for non-compliance that does not result in a Material Adverse Effect may conflict with the strict requirements of the Americans with Disabilities Act (ADA).",
"relevance": "The Americans with Disabilities Act (ADA) requires reasonable accommodations for employees with disabilities. However, there is a clause that allows for exceptions to compliance if non-compliance does not result in a Material Adverse Effect. This clause may not align with the ADA's strict requirements for reasonable accommodations.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter126&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Labor Code § 1194",
"conflict": "The clause's exception for non-compliance that does not result in a Material Adverse Effect may conflict with state laws that mandate strict compliance with employment laws regardless of the impact.",
"relevance": "California Labor Code § 1194 mandates strict compliance with minimum wage and overtime laws. However, the clause allows for exceptions to compliance if non-compliance does not result in a Material Adverse Effect, which contradicts California's strict compliance requirement.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1194&lawCode=LAB"
},
{
"state": "New York",
"law": "New York State Human Rights Law (NYSHRL), N.Y. Exec. Law § 290 et seq.",
"conflict": "The clause's exception for non-compliance that does not result in a Material Adverse Effect may conflict with state laws that mandate strict compliance with anti-discrimination and harassment laws.",
"relevance": "The New York State Human Rights Law requires strict compliance with anti-discrimination and harassment laws. However, the clause allows for exceptions to compliance if non-compliance does not result in a Material Adverse Effect, which contradicts New York's strict compliance requirement.",
"url": "https://dhr.ny.gov/law"
},
{
"state": "Massachusetts",
"law": "Massachusetts Equal Pay Act (MEPA), Mass. Gen. Laws ch. 149, § 105A",
"conflict": "The clause's exception for non-compliance that does not result in a Material Adverse Effect may conflict with state laws that mandate strict compliance with equal pay laws.",
"relevance": "The Massachusetts Equal Pay Act requires strict compliance with equal pay laws. However, the clause allows for exceptions to compliance if non-compliance does not result in a Material Adverse Effect, which contradicts Massachusetts' strict compliance requirement.",
"url": "https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXI/Chapter149/Section105A"
}
]
}
},
{
"clause": "(c) The representations and warranties set forth in this Section 3.17 are the
Seller's sole and exclusive representations and warranties regarding employment matters.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.",
"conflict": "The clause limits the Seller's representations and warranties to those explicitly stated, which may conflict with federal laws that impose broader obligations on employers regarding employment matters.",
"relevance": "Title VII of the Civil Rights Act of 1964 imposes obligations on employers regarding non-discrimination and equal employment opportunities. However, the clause's limitation to 'sole and exclusive' representations and warranties may not encompass all obligations under Title VII, potentially leading to non-compliance with federal non-discrimination laws.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter21&edition=prelim"
},
{
"law": "Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq.",
"conflict": "The clause's exclusivity may conflict with federal laws that require specific disclosures and adherence to employment standards.",
"relevance": "The Fair Labor Standards Act of 1938 requires employers to adhere to minimum wage, overtime pay, and child labor standards. However, the clause's limitation to 'sole and exclusive' representations and warranties may not cover all required disclosures and adherence to standards under the FLSA, potentially leading to non-compliance.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter8&edition=prelim"
},
{
"law": "Occupational Safety and Health Act of 1970, 29 U.S.C. § 651 et seq.",
"conflict": "The clause's exclusivity may not align with federal laws that mandate specific health and safety standards in the workplace.",
"relevance": "The Occupational Safety and Health Act of 1970 mandates that employers provide a safe and healthy workplace. However, the clause's limitation to 'sole and exclusive' representations and warranties may not encompass all obligations under OSHA, potentially leading to non-compliance with workplace safety standards.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter15&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Labor Code § 2802",
"conflict": "The clause limits the Seller's representations and warranties to those explicitly stated, which may conflict with state laws that impose broader obligations on employers regarding employment matters.",
"relevance": "Employers must indemnify employees for all necessary expenditures or losses incurred in direct consequence of the discharge of their duties. However, the clause's limitation on representations and warranties could be seen as an attempt to circumvent the broader indemnification obligations imposed by California Labor Code § 2802.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=2802"
},
{
"state": "New York",
"law": "New York Labor Law § 195",
"conflict": "The clause's exclusivity may conflict with state laws that require specific disclosures or representations regarding employment matters, which cannot be waived or limited by contract.",
"relevance": "Employers must provide written notice of wage rates, pay dates, and other employment terms. However, the clause's limitation on representations and warranties could be interpreted as an attempt to limit the mandatory disclosures required by New York Labor Law § 195.",
"url": "https://www.nysenate.gov/legislation/laws/LAB/195"
}
]
}
}
]
}
{
"section_header": "Section V.02. Director and Officer Indemnification Liability.",
"analysis": [
{
"clause": "(a) Buyer agrees that all rights to indemnification, advancement of expenses
and exculpation by the Company now existing in favor of each Person who is now, or has
been at any time prior to the date hereof, an officer or director of the Company, as
provided in the certificate of incorporation or by-laws of the Company, in each case as in
effect on the date of this Agreement, or pursuant to any other agreements in effect on the
date hereof and disclosed in Section 5.02(a) of the Disclosure Schedules, shall survive the
Closing Date and shall continue in full force and effect in accordance with their
respective terms.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause provides for indemnification, advancement of expenses, and exculpation for officers and directors, which may conflict with federal securities laws that impose liability on directors and officers for certain actions.",
"relevance": "The Securities Exchange Act of 1934 imposes liability on directors and officers for certain actions. The clause's provisions for indemnification, advancement of expenses, and exculpation may be limited or overridden by the federal securities laws, which hold directors and officers accountable for violations of securities regulations.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "Bankruptcy Code, 11 U.S.C. § 101 et seq.",
"conflict": "The clause's provisions for indemnification and exculpation may conflict with federal bankruptcy laws that limit the ability to indemnify or exculpate officers and directors in the event of bankruptcy.",
"relevance": "The Bankruptcy Code limits the ability to indemnify or exculpate officers and directors in the event of bankruptcy. The clause's provisions for indemnification and exculpation may be restricted by the Bankruptcy Code, which seeks to ensure that officers and directors cannot escape liability through indemnification or exculpation in bankruptcy proceedings.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title11&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Corporations Code § 317",
"conflict": "The clause provides for indemnification and advancement of expenses for officers and directors, which may be limited or restricted by state laws.",
"relevance": "California Corporations Code § 317 restricts the extent to which a corporation can indemnify its officers and directors. The clause in the agreement may provide broader indemnification and advancement of expenses than what is permissible under California law, which could render parts of the clause unenforceable.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=317"
},
{
"state": "New York",
"law": "New York Business Corporation Law § 722",
"conflict": "The clause may conflict with state laws that impose limitations on indemnification and advancement of expenses.",
"relevance": "New York Business Corporation Law § 722 limits the circumstances under which a corporation can indemnify its officers and directors. The clause may offer indemnification and advancement of expenses in situations that are not allowed under New York law, potentially making those provisions unenforceable.",
"url": "https://www.nysenate.gov/legislation/laws/BSC/722"
},
{
"state": "Delaware",
"law": "Delaware General Corporation Law § 145",
"conflict": "The clause's provisions for exculpation may be more expansive than what is allowed under state law.",
"relevance": "Delaware General Corporation Law § 145 provides specific conditions and limitations for indemnification and advancement of expenses. However, it is important to note that the clause may offer broader exculpation and indemnification than what is permissible under Delaware law, which could result in certain provisions being unenforceable.",
"url": "https://delcode.delaware.gov/title8/c001/sc04/index.html"
}
]
}
},
{
"clause": "(b) The Company shall, and Buyer shall cause the Company to (i) maintain in
effect for a period of six (6) years after the Closing Date, if available, the current policies
of directors' and officers' liability insurance maintained by the Company immediately
prior to the Closing Date (provided that the Company may substitute policies, of at least
the same coverage and amounts and containing terms and conditions that are not less
advantageous to the directors and officers of the Company when compared to the
insurance maintained by the Company as of the date hereof), or (ii) obtain as of the
Closing Date \"tail\" insurance policies with a claims period of six (6) years from the
Closing Date with at least the same coverage and amounts, and containing terms and
conditions that are not less advantageous to the directors and officers of the Company, in
each case with respect to claims arising out of or relating to events which occurred on or
prior to the Closing Date (including in connection with the transactions contemplated by
this Agreement).",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 1012 - State regulation of insurance",
"conflict": "The clause requires the maintenance of directors' and officers' liability insurance for six years post-closing, which may conflict with certain state insurance regulations that limit the duration or terms of such policies.",
"relevance": "State regulation may limit the duration or terms of directors' and officers' liability insurance policies. The clause's requirement for maintaining insurance for six years may be restricted by state laws that have different regulations on the duration or terms of such insurance policies.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section1012&num=0&edition=prelim"
},
{
"law": "12 U.S.C. § 1831e - Activities of insured State banks",
"conflict": "The clause's requirement for maintaining insurance 'if available' may conflict with federal regulations that mandate certain insurance coverages regardless of availability.",
"relevance": "Federal regulations mandate certain insurance coverages. The clause's conditional requirement for maintaining insurance 'if available' may be in conflict with these federal regulations, which require certain insurance coverages to be maintained regardless of their availability in the market.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1831e&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Ins. Code § 678.1",
"conflict": "The clause requires the maintenance of directors' and officers' liability insurance for six years post-closing, which may conflict with state laws that limit the duration or terms of such insurance.",
"relevance": "The California Insurance Code imposes restrictions on the duration and terms of insurance policies. This means that any clause requiring insurance to be maintained for six years might conflict with these state-imposed limitations, making it challenging to adhere to both the clause and California law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=INS&sectionNum=678.1"
},
{
"state": "New York",
"law": "N.Y. Ins. Law § 3420",
"conflict": "The clause's requirement for 'at least the same' coverage, amounts, and terms may conflict with state laws that have specific requirements or limitations on insurance policy terms.",
"relevance": "New York Insurance Law imposes specific requirements on insurance policy terms. However, the clause's stipulation for maintaining 'at least the same' coverage, amounts, and terms may not align with New York's specific insurance policy requirements, creating potential legal conflicts.",
"url": "https://www.nysenate.gov/legislation/laws/ISC/3420"
}
]
}
},
{
"clause": "(c) The obligations of Buyer and the Company under this Section 5.02 shall
not be terminated or modified in such a manner as to adversely affect any director or
officer to whom this Section 5.02 applies without the consent of such affected director or
officer (it being expressly agreed that the directors and officers to whom this Section 5.02
applies shall be third-party beneficiaries of this Section 5.02, each of whom may enforce
the provisions of this Section 5.02).",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause requires the consent of affected directors or officers for any adverse changes, which may conflict with federal securities laws that mandate certain disclosures and actions without requiring such consent.",
"relevance": "The Securities Exchange Act of 1934 mandates certain disclosures and actions without requiring consent of affected directors or officers. However, the clause in Section 5.02 requires consent from affected directors or officers for adverse changes, which may not be feasible under the mandatory disclosure requirements of the Securities Exchange Act of 1934.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
},
{
"law": "Federal Arbitration Act, 9 U.S.C. § 1 et seq.",
"conflict": "The clause's provision for third-party beneficiaries to enforce the agreement may conflict with federal laws that limit the rights of third parties in certain contexts.",
"relevance": "The Federal Arbitration Act limits the rights of third parties to enforce arbitration agreements. However, the clause in Section 5.02 allows directors and officers to enforce the provisions as third-party beneficiaries, which may be restricted under the Federal Arbitration Act.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title9/chapter1&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "Delaware",
"law": "Del. Code Ann. tit. 8, § 141(a) (2023)",
"conflict": "The clause requires the consent of affected directors or officers for any adverse changes, which may conflict with state laws governing corporate governance and fiduciary duties.",
"relevance": "The Board of Directors shall manage the business and affairs of every corporation, except as may be otherwise provided in this chapter or in its certificate of incorporation. However, the clause in Section 5.02 requiring consent from individual directors or officers for adverse changes could be seen as infringing on the board's statutory authority to manage the corporation's affairs.",
"url": "https://delcode.delaware.gov/title8/c001/sc04/index.html"
},
{
"state": "California",
"law": "Cal. Corp. Code § 309 (West 2023)",
"conflict": "The clause's provision for third-party enforcement rights by directors and officers may conflict with state laws that limit third-party beneficiary rights in corporate contracts.",
"relevance": "Directors shall perform their duties in good faith, in a manner such director believes to be in the best interests of the corporation, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. However, the clause in Section 5.02 granting enforcement rights to directors and officers as third-party beneficiaries may conflict with the fiduciary duties imposed on directors under California law, potentially leading to conflicts of interest.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=309"
}
]
}
},
{
"clause": "(d) In the event Buyer, the Company or any of their respective successors or
assigns (i) consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity in such consolidation or merger or (ii)
transfers all or substantially all of its properties and assets to any Person, then, and in
either such case, proper provision shall be made so that the successors and assigns of
Buyer or the Company, as the case may be, shall assume all of the obligations set forth in
this Section 5.02.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 18 - Acquisition by one corporation of stock of another",
"conflict": "The clause requires that successors and assigns assume all obligations in the event of a merger or transfer of assets. However, certain federal laws may impose restrictions or additional requirements that could conflict with this clause.",
"relevance": "A corporation shall not acquire the stock of another corporation if such acquisition may substantially lessen competition or tend to create a monopoly. This law could restrict the ability of a corporation to merge or transfer assets, potentially conflicting with the clause's requirements for successors and assigns to assume obligations.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section18&num=0&edition=prelim"
},
{
"law": "11 U.S.C. § 365 - Executory contracts and unexpired leases",
"conflict": "The clause mandates that successors and assigns assume all obligations, but certain federal laws may impose additional requirements or restrictions that could conflict with this mandate.",
"relevance": "A trustee may assume or reject any executory contract or unexpired lease of the debtor, subject to the court's approval. However, this law could interfere with the clause's requirement for successors and assigns to assume obligations, as it allows a trustee in bankruptcy to reject certain contracts, potentially overriding the clause's provisions.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section365&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Corp. Code § 1107",
"conflict": "The clause requires successors and assigns to assume all obligations, which may conflict with state laws that limit the enforceability of such provisions.",
"relevance": "The California Corporation Code limits the enforceability of certain obligations on successors and assigns in mergers and consolidations. While a clause may require successors and assigns to assume all obligations, this requirement may be limited by California law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=1107"
},
{
"state": "Delaware",
"law": "Del. Code Ann. tit. 8, § 259",
"conflict": "The clause mandates the assumption of obligations by successors and assigns, which may be restricted by state laws governing the transfer of liabilities.",
"relevance": "The Delaware General Corporation Law restricts the automatic transfer of liabilities to successors and assigns in certain mergers and consolidations. This means that the clause's requirement for successors and assigns to assume all obligations may be limited by Delaware law.",
"url": "https://delcode.delaware.gov/title8/c001/sc09/index.html"
}
]
}
}
]
}
{
"section_header": "Section VI.04. Certain Limitations",
"analysis": [
{
"clause": "The party making a claim under this ARTICLE VIis referred to as the \"Indemnified Party,\" and the party against whom such claims are asserted
under this Article VI is referred to as the \"Indemnifying Party.\" The indemnification provided
for in Section 6.02 and Section 6.03 shall be subject to the following limitations:(a) The Indemnifying Party shall not be liable to the Indemnified Party for
indemnification under Section 6.02(a) or Section 6.03(a), as the case may be, until the
aggregate amount of all Losses in respect of indemnification under Section 6.02(a) or
Section 6.03(a) exceeds $NUMBER/NUMBER% of the Purchase Price (the
\"Deductible\"), in which event the Indemnifying Party shall only be required to pay or be
liable for Losses in excess of the Deductible.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq.",
"conflict": "The clause's limitations on indemnification may conflict with federal laws that impose stricter liability standards or prohibit certain limitations on liability.",
"relevance": "The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) imposes strict liability on parties responsible for environmental contamination, regardless of any contractual indemnification limitations. This means that even if a contract includes clauses that limit indemnification through thresholds or deductibles, these limitations may not be enforceable under CERCLA, which holds parties strictly liable for environmental damages.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter103&edition=prelim"
},
{
"law": "Federal Trade Commission Act (FTCA), 15 U.S.C. § 41 et seq.",
"conflict": "The clause's limitations on indemnification may conflict with federal laws that prohibit certain limitations on liability in specific contexts.",
"relevance": "The Federal Trade Commission Act (FTCA) prohibits unfair or deceptive acts or practices in commerce, which may include certain indemnification limitations. The clause's limitations on indemnification could be considered unfair or deceptive under the FTCA, particularly if they significantly disadvantage the Indemnified Party.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2&edition=prelim"
},
{
"law": "Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.",
"conflict": "The clause's limitations on indemnification may conflict with federal laws that impose specific liability standards in certain industries.",
"relevance": "The Securities Exchange Act of 1934 imposes liability for fraudulent activities in securities transactions, regardless of contractual indemnification limitations. The clause's limitations on indemnification may not be enforceable under the Securities Exchange Act of 1934, which holds parties liable for fraudulent activities in securities transactions.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter2B&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 2778",
"conflict": "The clause limits the liability of the Indemnifying Party based on a deductible and a threshold, which may be contrary to state laws that do not allow such limitations.",
"relevance": "California Civil Code Section 2778 states that indemnity provisions should be interpreted in favor of providing full indemnity unless explicitly stated otherwise. This can conflict with the clause's limitations on indemnification, such as the deductible and threshold amounts.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=2778&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-322.1",
"conflict": "The clause's limitations on indemnification may be unenforceable under state laws that require certain indemnity obligations to be non-waivable.",
"relevance": "New York General Obligations Law Section 5-322.1 prohibits agreements that seek to exempt a party from liability for negligence in construction contracts. This could be interpreted to mean that limitations on indemnification, such as those in the clause, are not enforceable.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-322.1"
}
]
}
},
{
"clause": "(b) The aggregate amount of all Losses for which an Indemnifying Party shall
be liable pursuant to Section 6.02(a) or Section 6.03(a), as the case may be, shall not
exceed $NUMBER/NUMBER% of the Purchase Price.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq.",
"conflict": "The clause limits the liability of the Indemnifying Party to a specific monetary cap, which may conflict with federal laws that impose unlimited liability for certain types of damages or losses.",
"relevance": "CERCLA imposes unlimited liability for environmental cleanup costs. The clause's liability cap may be unenforceable under CERCLA, which mandates that responsible parties cover all cleanup costs without a monetary limit.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter103&edition=prelim"
},
{
"law": "Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq.",
"conflict": "The clause's liability cap may conflict with federal laws that prohibit limiting liability for certain types of damages, such as those related to consumer protection.",
"relevance": "The Magnuson-Moss Warranty Act prohibits limiting implied warranties and certain types of damages. The clause's liability cap may be unenforceable under this Act, which restricts the ability to limit liability for implied warranties and certain damages.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter50&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 2778",
"conflict": "The clause limits the liability of the Indemnifying Party to a specific monetary amount or percentage of the Purchase Price, which may conflict with state laws that do not allow such limitations on indemnification.",
"relevance": "California Civil Code Section 2778 states that indemnity provisions must be interpreted to cover all losses and damages unless explicitly stated otherwise. This can conflict with the clause's limitation on the aggregate amount of losses.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV§ionNum=2778"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-322.1",
"conflict": "The clause's limitation on liability may be unenforceable under New York law, which generally disfavors contractual provisions that limit liability for gross negligence or willful misconduct.",
"relevance": "New York General Obligations Law Section 5-322.1 prohibits contractual provisions that seek to exempt a party from liability for gross negligence or willful misconduct. This prohibition can conflict with clauses that limit the aggregate amount of losses.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-322.1"
}
]
}
},
{
"clause": "(c) In no event shall any Indemnifying Party be liable to any Indemnified
Party for any punitive, incidental, consequential, special or indirect damages, including
loss of future revenue or income, loss of business reputation or opportunity relating to the
breach or alleged breach of this Agreement, or diminution of value or any damages based
on any type of multiple.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.",
"conflict": "The clause limits liability for various types of damages, which may conflict with federal laws that allow for such damages in certain circumstances.",
"relevance": "Title VII of the Civil Rights Act of 1964 allows for punitive and compensatory damages in cases of intentional employment discrimination. However, the clause in the agreement seeks to limit liability for punitive and other types of damages, which may be in conflict with the rights provided under Title VII for victims of discrimination.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter21&edition=prelim"
},
{
"law": "Uniform Commercial Code (UCC) § 2-715, 1 U.L.A. 5 (2004)",
"conflict": "The clause limits liability for consequential damages, which may conflict with federal laws that allow for such damages in certain circumstances.",
"relevance": "UCC § 2-715 allows for incidental and consequential damages in the context of a breach of contract for the sale of goods. However, the clause in the agreement seeks to limit liability for incidental and consequential damages, which may be in conflict with the provisions of the UCC that allow for such damages in certain breach of contract situations.",
"url": "https://www.law.cornell.edu/ucc/2/2-715"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1668",
"conflict": "The clause limits liability for various types of damages, including punitive and consequential damages, which may be contrary to state laws that do not allow such limitations in certain contexts.",
"relevance": "California Civil Code Section 1668 states that any contract aiming to exempt someone from responsibility for their own fraud, intentional harm to another's person or property, or any violation of the law, whether intentional or negligent, is against public policy.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1668.&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-322.1",
"conflict": "The clause limits liability for consequential damages, which may be contrary to state laws that do not allow such limitations in certain contexts.",
"relevance": "New York General Obligations Law Section 5-322.1 prohibits any agreement related to the construction, alteration, repair, or maintenance of a building, structure, appurtenances, and appliances, including activities such as moving, demolition, and excavating, that seeks to indemnify or hold harmless the promisee against liability for damage arising from bodily injury to persons or damage to property if such damage is contributed to, caused by, or results from the negligence of the promisee, their agents or employees, or the indemnitee, whether such negligence is in whole or in part.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-322.1"
}
]
}
},
{
"clause": "(d) Seller shall not be liable under this ARTICLE VI for any Losses based
upon or arising out of any inaccuracy in or breach of any of the representations or
warranties of Seller contained in this Agreement if Buyer had knowledge of such
inaccuracy or breach prior to the Closing.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "15 U.S.C. § 78j(b) - Securities Exchange Act of 1934",
"conflict": "The clause limits the Seller's liability for inaccuracies or breaches of representations or warranties if the Buyer had prior knowledge of such issues. This could be negatively aligned with federal laws that impose strict liability or require full disclosure regardless of the Buyer's knowledge.",
"relevance": "The Securities Exchange Act of 1934 imposes liability for any manipulative or deceptive device or contrivance in contravention of SEC rules, regardless of the Buyer's knowledge. The clause in the agreement attempts to limit the Seller's liability based on the Buyer's knowledge, which could be seen as contrary to the strict liability imposed by the Securities Exchange Act of 1934.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section78j&num=0&edition=prelim"
},
{
"law": "15 U.S.C. § 45 - Federal Trade Commission Act",
"conflict": "The clause may conflict with federal consumer protection laws that require full disclosure and do not allow for liability waivers based on the Buyer's knowledge.",
"relevance": "The Federal Trade Commission Act prohibits unfair or deceptive acts or practices in commerce, regardless of the Buyer's knowledge. However, the clause in the agreement attempts to limit the Seller's liability based on the Buyer's knowledge, which could be seen as contrary to the consumer protection principles of the Federal Trade Commission Act.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section45&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Civ. Code § 1668",
"conflict": "The clause limits the Seller's liability if the Buyer had prior knowledge of inaccuracies or breaches, which may conflict with state laws that impose strict liability or do not recognize such exceptions.",
"relevance": "According to Cal. Civ. Code § 1668, any contract that exempts someone from responsibility for their own fraud, willful injury, or violation of law is invalid. The clause in the agreement attempts to exempt the Seller from liability for inaccuracies or breaches if the Buyer had prior knowledge. This could be seen as an attempt to exempt the Seller from responsibility for their own potential fraudulent misrepresentations or breaches of contract.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1668&lawCode=CIV"
},
{
"state": "New York",
"law": "N.Y. Gen. Oblig. Law § 5-401",
"conflict": "The clause may conflict with state laws that do not allow parties to contract out of liability for certain types of misrepresentations or breaches.",
"relevance": "N.Y. Gen. Oblig. Law § 5-401 prohibits agreements that exempt anyone from liability for their own fraud or willful misconduct. The clause in the agreement attempts to limit the Seller's liability for inaccuracies or breaches if the Buyer had prior knowledge, which could be interpreted as an attempt to exempt the Seller from liability for their own potential fraudulent misrepresentations or willful breaches.",
"url": "https://www.nysenate.gov/legislation/laws/GOB/5-401"
}
]
}
}
]
}
{
"section_header": "Section III.15. Environmental Matters.",
"analysis": [
{
"clause": "(a) The terms: (i) \"Environmental Laws\" means all Laws, now or hereafter
in effect, in each case as amended or supplemented from time to time, relating to the
regulation and protection of human health, safety, the environment and natural resources,
including any federal, state or local transfer of ownership notification or approval
statutes; and (ii) \"Hazardous Substances\" means: (A) \"hazardous materials,\" \"hazardous
wastes,\" \"hazardous substances,\" \"industrial wastes,\" or \"toxic pollutants,\" as such terms
are defined under any Environmental Laws; (B) any other hazardous or radioactive
substance, contaminant or waste; and (C) any other substance with respect to which any
Environmental Law or Governmental Authority requires environmental investigation,
regulation, monitoring or remediation.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9675",
"conflict": "The clause broadly defines 'Environmental Laws' and 'Hazardous Substances' to include any law or substance that could potentially impact human health, safety, or the environment. This broad definition could conflict with specific federal laws that have more narrow or specific definitions and requirements.",
"relevance": "CERCLA defines and regulates hazardous substances and response actions. However, CERCLA has specific definitions and requirements for hazardous substances and response actions that may not align with the broader definitions and requirements outlined in the clause. For example, CERCLA's definition of 'hazardous substances' is specific and may exclude certain substances that the clause includes.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter103&edition=prelim"
},
{
"law": "Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901-6992k",
"conflict": "The clause's broad definitions and requirements could conflict with the specific provisions and exemptions outlined in the Resource Conservation and Recovery Act (RCRA).",
"relevance": "The Resource Conservation and Recovery Act (RCRA) regulates the management of hazardous waste. However, it is important to note that RCRA has specific provisions and exemptions for the management of hazardous waste that may not align with broader and more inclusive definitions and requirements. For instance, certain wastes that are excluded from RCRA's definition of hazardous waste may still be considered hazardous under other regulations or clauses.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter82&edition=prelim"
},
{
"law": "Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601-2692",
"conflict": "The clause's broad definitions and requirements could conflict with the specific provisions and exemptions outlined in the Toxic Substances Control Act (TSCA).",
"relevance": "The Toxic Substances Control Act (TSCA) regulates the introduction of new or already existing chemicals. However, TSCA has specific provisions and exemptions for the regulation of chemicals that may not align with the broader and more inclusive definitions and requirements in the clause. For example, certain chemicals that are regulated under TSCA may not be considered hazardous under the clause, or vice versa.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title15/chapter53&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "Texas",
"law": "Tex. Health & Safety Code Ann. § 361.271 (West 2021)",
"conflict": "The clause requires compliance with all Environmental Laws, including state transfer of ownership notification or approval statutes. However, some state laws may have less stringent requirements or exemptions that could conflict with the clause's broad requirements.",
"relevance": "Tex. Health & Safety Code Ann. § 361.271 provides certain exemptions for small quantity generators of hazardous waste from notification requirements. However, this could lead to non-compliance with a clause that mandates adherence to all Environmental Laws, including state notification statutes, because the Texas law's exemptions might conflict with the broader requirements of the clause.",
"url": "https://statutes.capitol.texas.gov/Docs/HS/htm/HS.361.htm"
},
{
"state": "California",
"law": "Cal. Health & Safety Code § 25249.5 (West 2021)",
"conflict": "The clause requires compliance with all Environmental Laws, including those related to hazardous substances. However, some state laws may have less stringent definitions or requirements for hazardous substances.",
"relevance": "California Health & Safety Code Section 25249.5 defines hazardous substances with specific thresholds and exemptions. However, this clause requires compliance with all Environmental Laws, including those related to hazardous substances. The specific thresholds and exemptions in the California law may not align with the broader requirements of the clause.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=25249.5&lawCode=HSC"
}
]
}
},
{
"clause": "(b) Except as set forth in Section 3.15(b) of the Disclosure Schedules, or as
would not have a Material Adverse Effect, to Seller's knowledge, the Company is in
compliance with all Environmental Laws and neither the Company nor Seller has
received notice from any Person that the Company, its business or assets, or any Real
Property currently owned, leased, or used by the Company is in violation of any
Environmental Law or any applicable Law regarding Hazardous Substances.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9675",
"conflict": "The clause asserts compliance with all Environmental Laws, but the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) imposes strict liability for contamination, which may not be fully known or disclosed.",
"relevance": "CERCLA imposes strict liability for contamination. This means that parties can be held responsible for contamination without the need to prove knowledge or intent. The clause's assertion of compliance may be undermined by these strict liability provisions.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter103&edition=prelim"
},
{
"law": "Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901-6992k",
"conflict": "The clause claims no violations of Environmental Laws, but the Resource Conservation and Recovery Act (RCRA) has stringent requirements for hazardous waste management that may not be fully met.",
"relevance": "The Resource Conservation and Recovery Act (RCRA) requires stringent hazardous waste management. The clause's assertion of no violations may be contradicted if the Company has not fully complied with RCRA's stringent hazardous waste management requirements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter82&edition=prelim"
},
{
"law": "Clean Water Act (CWA), 33 U.S.C. §§ 1251-1387",
"conflict": "The clause states no notices received, but the Clean Water Act (CWA) has extensive reporting requirements for discharges that may not have been fully reported.",
"relevance": "The Clean Water Act (CWA) requires extensive reporting for discharges. The clause's assertion that no notices have been received may be inaccurate if the Company has failed to comply with these extensive reporting requirements.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title33/chapter26&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Health and Safety Code § 25249.5-25249.13 (Proposition 65)",
"conflict": "The clause asserts compliance with Environmental Laws, but this state law imposes stricter standards that may not be met.",
"relevance": "The California Health and Safety Code requires businesses to provide warnings about significant exposures to chemicals that cause cancer, birth defects, or other reproductive harm. However, the assertion of compliance may be inaccurate if the Company has not provided the required warnings under Proposition 65.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=25249.5&lawCode=HSC"
},
{
"state": "New York",
"law": "New York Environmental Conservation Law § 27-0900 et seq.",
"conflict": "The clause asserts no violations of Environmental Laws, but this state law has specific provisions that could be violated.",
"relevance": "New York Environmental Conservation Law regulates the management and disposal of hazardous waste. The clause's assertion of no violations may be inaccurate if the Company has not adhered to New York's specific hazardous waste management regulations.",
"url": "https://www.nysenate.gov/legislation/laws/ENV/A27"
},
{
"state": "Massachusetts",
"law": "Massachusetts General Laws Chapter 21E (Massachusetts Oil and Hazardous Material Release Prevention and Response Act)",
"conflict": "The clause asserts no received notices of violations, but this state law mandates reporting that could result in notices.",
"relevance": "Massachusetts General Laws Chapter 21E requires the reporting of releases of oil and hazardous materials. The clause's assertion of no received notices may be inaccurate if the Company has failed to report releases as required, potentially resulting in notices of violation.",
"url": "https://malegislature.gov/Laws/GeneralLaws/PartI/TitleII/Chapter21E"
}
]
}
},
{
"clause": "(c) Except as set forth in Section 3.15(c) of the Disclosure Schedules, or as
would not have a Material Adverse Effect, to Seller's knowledge, there has not been any
spill, leak, discharge, injection, escape, leaching, dumping, disposal or release of any kind
of any Hazardous Substances in violation of any Environmental Law with respect to the
business or assets of the Company or any Real Property currently owned, leased or used
by the Company. Neither the Company nor Seller received notice from any Person that
any Real Property currently owned, leased or used by the Company has been
contaminated with any Hazardous Substances which would reasonably be expected to
result in an environmental claim against, or a violation of Environmental Laws by, Seller
or the Company.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9675",
"conflict": "The clause asserts that there has been no violation of Environmental Laws with respect to hazardous substances. However, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) imposes strict liability for releases of hazardous substances, which could contradict the clause if any such release has occurred.",
"relevance": "CERCLA imposes strict liability for releases of hazardous substances. This means that the clause's assertion that there has been no violation of Environmental Laws could be contradicted by CERCLA's strict liability provisions if any release of hazardous substances has occurred, regardless of the Seller's knowledge or intent.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter103&edition=prelim"
},
{
"law": "Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901-6992k",
"conflict": "The clause asserts no violation of Environmental Laws, but the Resource Conservation and Recovery Act (RCRA) regulates the disposal of hazardous waste and could impose liability if any improper disposal has occurred.",
"relevance": "The Resource Conservation and Recovery Act (RCRA) regulates the disposal of hazardous waste. The clause's assertion that there has been no violation of Environmental Laws could be contradicted by RCRA if any improper disposal of hazardous waste has occurred, regardless of the Seller's knowledge or intent.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter82&edition=prelim"
},
{
"law": "Clean Water Act (CWA), 33 U.S.C. §§ 1251-1387",
"conflict": "The clause asserts no violation of Environmental Laws, but the Clean Water Act (CWA) regulates discharges into navigable waters and could impose liability if any unauthorized discharge has occurred.",
"relevance": "The Clean Water Act (CWA) regulates discharges into navigable waters. The clause's assertion that there has been no violation of Environmental Laws could be contradicted by the CWA if any unauthorized discharge into navigable waters has occurred, regardless of the Seller's knowledge or intent.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title33/chapter26&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Health and Safety Code § 25300 et seq. (Hazardous Substances Account Act)",
"conflict": "The clause asserts that there has not been any release of Hazardous Substances in violation of Environmental Law, but this state law imposes strict liability for any contamination regardless of knowledge or intent.",
"relevance": "California Health and Safety Code § 25300 et seq. imposes strict liability for any contamination with Hazardous Substances. This means that the law holds parties responsible for contamination regardless of their knowledge or intent. Therefore, any assertion that there has not been any release of Hazardous Substances in violation of Environmental Law is negated by this strict liability, as the state law does not take into account the Seller's awareness or intentions.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC&sectionNum=25300"
},
{
"state": "New Jersey",
"law": "New Jersey Spill Compensation and Control Act, N.J. Stat. Ann. § 58:10-23.11 et seq.",
"conflict": "The clause relies on the Seller's knowledge to assert no violations, but this state law holds parties liable for contamination regardless of their knowledge.",
"relevance": "The New Jersey Spill Compensation and Control Act holds parties liable for contamination regardless of their knowledge. This means that the clause's reliance on the Seller's knowledge to assert no violations is negated by this state law, which imposes liability for contamination irrespective of the Seller's knowledge.",
"url": "https://www.nj.gov/dep/srp/regs/spillcomp.htm"
},
{
"state": "Massachusetts",
"law": "Massachusetts General Laws, Chapter 21E (Massachusetts Oil and Hazardous Material Release Prevention and Response Act)",
"conflict": "The clause suggests no contamination has occurred, but this state law mandates reporting and remediation of any hazardous substance release, which could contradict the clause's assertions.",
"relevance": "Massachusetts General Laws, Chapter 21E, mandates the reporting and remediation of any hazardous substance release. The clause's suggestion that no contamination has occurred is negated by this state law, which requires reporting and remediation of any hazardous substance release, potentially contradicting the clause's assertions.",
"url": "https://malegislature.gov/Laws/GeneralLaws/PartI/TitleII/Chapter21E"
}
]
}
},
{
"clause": "(d) The representations and warranties set forth in this Section 3.15 are the
Seller's sole and exclusive representations and warranties regarding environmental
matters.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9675",
"conflict": "The clause limits the Seller's liability to the representations and warranties explicitly stated in Section 3.15, which may conflict with broader environmental liability standards imposed by federal law.",
"relevance": "CERCLA imposes liability on parties responsible for environmental contamination, regardless of contractual limitations. This means that any attempt to limit the Seller's liability to specific representations and warranties may not be enforceable under CERCLA's broader liability provisions.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter103&edition=prelim"
},
{
"law": "Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901-6992k",
"conflict": "The clause's limitation on the Seller's environmental representations and warranties may conflict with the strict liability standards for hazardous waste management under RCRA.",
"relevance": "The Resource Conservation and Recovery Act (RCRA) establishes strict liability for hazardous waste management violations, regardless of any contractual limitations. This means that any attempt to limit the Seller's liability to specific representations and warranties may not be enforceable under RCRA's strict liability provisions.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter82&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Health and Safety Code § 25300 et seq. (Hazardous Substances Account Act)",
"conflict": "The clause limits the Seller's liability to only the representations and warranties explicitly stated in Section 3.15, which may conflict with broader state environmental liability laws.",
"relevance": "California Health and Safety Code § 25300 et seq. imposes broad liability on parties responsible for hazardous substance releases, regardless of contractual limitations.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC&sectionNum=25300"
},
{
"state": "New Jersey",
"law": "New Jersey Spill Compensation and Control Act, N.J. Stat. Ann. § 58:10-23.11 et seq.",
"conflict": "The clause's limitation on the Seller's representations and warranties may be at odds with state laws that impose strict liability for environmental contamination.",
"relevance": "The New Jersey Spill Compensation and Control Act establishes strict liability for parties responsible for hazardous substance discharges, which cannot be contractually limited.",
"url": "https://www.nj.gov/dep/srp/regs/spillcomp.htm"
},
{
"state": "New York",
"law": "New York Environmental Conservation Law § 27-1301 et seq. (Inactive Hazardous Waste Disposal Sites)",
"conflict": "The clause's limitation on the Seller's representations and warranties may conflict with state laws that hold parties liable for environmental damages regardless of contractual terms.",
"relevance": "New York Environmental Conservation Law § 27-1301 et seq. imposes liability on parties for the cleanup of hazardous waste sites, regardless of any contractual limitations.",
"url": "https://www.dec.ny.gov/regs/4449.html"
}
]
}
}
]
}
{
"section_header": "Section III.16. Employee Benefit Matters.",
"analysis": [
{
"clause": "(a) Section 3.16(a) of the Disclosure Schedules contains a list of each material
benefit, retirement, employment, consulting, compensation, incentive, bonus, stock
option, restricted stock, stock appreciation right, phantom equity, change in control,
severance, vacation, paid time off, welfare and fringe-benefit agreement, plan, policy and
program, whether or not reduced to writing, in effect and covering one or more
employees or directors of the Company or the beneficiaries or dependents of any such
Persons, and is maintained, sponsored, contributed to, or required to be contributed to by
the Company, or under which the Company has any material liability for premiums or
benefits (each, a \"Benefit Plan\").",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.",
"conflict": "The Employee Retirement Income Security Act (ERISA) imposes strict requirements on the management and disclosure of employee benefit plans, which may conflict with the company's practices as outlined in Section 3.16(a).",
"relevance": "ERISA imposes strict requirements on the management and disclosure of employee benefit plans. However, the company's practices as outlined in Section 3.16(a) may not meet ERISA's stringent requirements, leading to potential legal conflicts.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18&edition=prelim"
},
{
"law": "Patient Protection and Affordable Care Act, 42 U.S.C. § 18001 et seq.",
"conflict": "The Affordable Care Act (ACA) mandates certain health benefits and coverage requirements that may not be fully addressed in the company's benefit plans as described in Section 3.16(a).",
"relevance": "The Affordable Care Act (ACA) mandates certain health benefits and coverage requirements. However, the company's benefit plans, as described in Section 3.16(a), may not fully comply with these mandates, which could lead to potential legal issues.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title42/chapter157&edition=prelim"
},
{
"law": "Consolidated Omnibus Budget Reconciliation Act of 1985, 29 U.S.C. § 1161 et seq.",
"conflict": "The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers to provide continued health insurance coverage after employment termination, which may not be fully reflected in the company's severance and benefit plans as outlined in Section 3.16(a).",
"relevance": "COBRA requires employers to provide continued health insurance coverage after employment termination. However, the company's severance and benefit plans as outlined in Section 3.16(a) may not fully comply with COBRA's requirements, leading to potential legal conflicts.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18/subchapter1&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Labor Code § 1198.5",
"conflict": "The clause requires the Company to disclose all material benefit plans, which may conflict with state laws that protect the confidentiality of certain employee benefits and compensation details.",
"relevance": "California Labor Code § 1198.5 prohibits the disclosure of certain employee records without consent. However, there is a clause that requires the disclosure of all material benefit plans, which may include employee records protected under California Labor Code § 1198.5. This requirement could potentially violate state confidentiality laws.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1198.5&lawCode=LAB"
},
{
"state": "New York",
"law": "New York Labor Law § 194",
"conflict": "The clause mandates disclosure of all material benefit plans, which may conflict with state laws that restrict the sharing of certain employee compensation and benefits information.",
"relevance": "New York Labor Law § 194 restricts the disclosure of employee compensation details. However, the clause's requirement to disclose all material benefit plans may include compensation details, which could be restricted under New York Labor Law § 194, leading to potential legal conflicts.",
"url": "https://www.nysenate.gov/legislation/laws/LAB/194"
},
{
"state": "Texas",
"law": "Texas Labor Code § 21.305",
"conflict": "The clause requires the Company to disclose all material benefit plans, which may conflict with state laws that protect the confidentiality of employee benefits and compensation information.",
"relevance": "Texas Labor Code § 21.305 protects the confidentiality of employee benefits information. However, the clause's requirement to disclose all material benefit plans may include information protected under Texas Labor Code § 21.305, potentially leading to legal conflicts regarding confidentiality.",
"url": "https://statutes.capitol.texas.gov/Docs/LA/htm/LA.21.htm"
}
]
}
},
{
"clause": "(b) Except as set forth in Section 3.16(b) of the Disclosure Schedules, or as
would not have a Material Adverse Effect, to Seller's knowledge, each Benefit Plan and
related trust complies with all applicable Laws (including the Employee Retirement
Income Security Act of 1974 (as amended, and including the regulations thereunder,
\"ERISA\") and the Code. Each Benefit Plan that is intended to be qualified under Section
401(a) of the Code (a \"Qualified Benefit Plan\") has received a favorable determination
letter from the Internal Revenue Service, or with respect to a prototype plan, can rely on
an opinion letter from the Internal Revenue Service to the prototype plan sponsor, to the
effect that such Qualified Benefit Plan is so qualified and that the plan and the trust
related thereto are exempt from federal income Taxes under Sections 401(a) and 501(a),
respectively, of the Code, and, to Seller's knowledge, nothing has occurred that could
reasonably be expected to cause the revocation of such determination letter from the
Internal Revenue Service or the unavailability of reliance on such opinion letter from the
Internal Revenue Service. Except as set forth in Section 3.16(b) of the Disclosure
Schedules, or as would not have a Material Adverse Effect, all benefits, contributions
and premiums required by and due under the terms of each Benefit Plan or applicable
Law have been timely paid in accordance with the terms of such Benefit Plan, the terms
of all applicable Laws and GAAP. With respect to any Benefit Plan, to Seller's
knowledge, no event has occurred or is reasonably expected to occur that has resulted in
or would subject the Company to a Tax under Section 4971 of the Code or the assets of
the Company to a lien under Section 430(k) of the Code.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq.",
"conflict": "The clause asserts compliance with ERISA and the Code, but certain provisions of these laws may impose additional requirements or restrictions that could conflict with the clause's assertions.",
"relevance": "ERISA imposes additional requirements and restrictions on Benefit Plans. However, there may be a conflict between the clause's assertions of compliance with ERISA and its claims of exemption from certain taxes, as ERISA's additional requirements and restrictions could contradict these assertions.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18&edition=prelim"
},
{
"law": "Internal Revenue Code, 26 U.S.C. § 4971",
"conflict": "The clause asserts that no event has occurred that could result in a tax under Section 4971 of the Code, but the Code may have provisions that could trigger such a tax under certain circumstances.",
"relevance": "The Internal Revenue Code imposes taxes under certain circumstances. However, there is a clause that asserts no event has occurred that could result in a tax under Section 4971 of the Code. Despite this assertion, the Code may contain provisions that could trigger such a tax, potentially conflicting with the clause's assertions.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleD/chapter43&edition=prelim"
},
{
"law": "Internal Revenue Code, 26 U.S.C. § 430(k)",
"conflict": "The clause asserts that no event has occurred that could result in a lien under Section 430(k) of the Code, but the Code may have provisions that could trigger such a lien under certain circumstances.",
"relevance": "The Internal Revenue Code imposes liens under certain circumstances. However, a clause asserts that no event has occurred that could result in a lien under Section 430(k) of the Code. Despite this assertion, the Code may contain provisions that could trigger such a lien, potentially conflicting with the clause's claims.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleA/chapter1/subchapterD/part3&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Labor Code § 2800-2810.5",
"conflict": "The clause asserts compliance with ERISA and the Code, but certain state laws may impose additional requirements or restrictions that could conflict with these federal standards.",
"relevance": "The California Labor Code imposes additional requirements on employee benefit plans that may conflict with ERISA and the Code. The clause assumes compliance with federal laws (ERISA and the Code), but California's additional requirements could create conflicts, making it difficult to ensure full compliance as asserted in the clause.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=2800"
},
{
"state": "New York",
"law": "New York Tax Law § 612",
"conflict": "The clause assumes that no event has occurred that could cause a tax under Section 4971 of the Code, but state tax laws may impose additional liabilities.",
"relevance": "New York tax law may impose additional tax liabilities on employee benefit plans. This could potentially conflict with a clause that asserts no event has occurred that could cause a tax under Section 4971 of the Code, as New York's tax laws could introduce additional liabilities.",
"url": "https://www.nysenate.gov/legislation/laws/TAX/612"
}
]
}
},
{
"clause": "(c) Except as set forth in Section 3.16(c) of the Disclosure Schedules, no
Benefit Plan: (i) is subject to the minimum funding standards of Section 302 of ERISA or
Section 412 of the Code; or (ii) is a \"multiemployer plan\" (as defined in Section 3(37) of
ERISA). Except as would not have a Material Adverse Effect, neither Seller nor the
Company: (i) has withdrawn from any pension plan under circumstances resulting (or
expected to result) in a liability to the Pension Benefit Guaranty Corporation; or (ii) has
engaged in any transaction which would give rise to a liability of the Company or Buyer
under Section 4069 or Section 4212(c) of ERISA.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1082 (ERISA § 302)",
"conflict": "The clause asserts that no Benefit Plan is subject to the minimum funding standards of Section 302 of ERISA or Section 412 of the Code. However, if a Benefit Plan is found to be underfunded, it would be subject to these minimum funding standards.",
"relevance": "The Benefit Plan is subject to the minimum funding standards of Section 302 of ERISA. However, if a Benefit Plan is underfunded, it must comply with these minimum funding standards, which contradicts the clause's assertion.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1082&num=0&edition=prelim"
},
{
"law": "Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1002(37) (ERISA § 3(37))",
"conflict": "The clause asserts that no Benefit Plan is a multiemployer plan as defined in Section 3(37) of ERISA. However, if a Benefit Plan is classified as a multiemployer plan, it would be subject to specific regulations and liabilities.",
"relevance": "A Benefit Plan is a multiemployer plan as defined in Section 3(37) of ERISA. However, if a Benefit Plan is classified as a multiemployer plan, it would be subject to specific regulations, which contradicts the assertion made in the clause.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1002&num=0&edition=prelim"
},
{
"law": "Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1369 (ERISA § 4069)",
"conflict": "The clause asserts that neither Seller nor the Company has engaged in any transaction which would give rise to a liability under Section 4069 or Section 4212(c) of ERISA. However, if such transactions have occurred, they would result in liabilities.",
"relevance": "The Seller or the Company has not engaged in any transaction which would give rise to a liability under Section 4069 of ERISA. If such transactions had occurred, they would result in liabilities, contrary to the clause's assertion.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1369&num=0&edition=prelim"
},
{
"law": "Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1392(c) (ERISA § 4212(c))",
"conflict": "The clause asserts that neither Seller nor the Company has engaged in any transaction which would give rise to a liability under Section 4212(c) of ERISA. However, if such transactions have occurred, they would result in liabilities.",
"relevance": "The Seller or the Company has not engaged in any transaction which would give rise to a liability under Section 4212(c) of ERISA. If such transactions had occurred, they would result in liabilities, contrary to the clause's assertion.",
"url": "https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1392&num=0&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Lab. Code § 3076.3",
"conflict": "The clause asserts that no Benefit Plan is subject to the minimum funding standards of Section 302 of ERISA or Section 412 of the Code, and that neither Seller nor the Company has engaged in transactions that would result in liability under ERISA sections 4069 or 4212(c).",
"relevance": "California Labor Code Section 3076.3 requires employers to meet specific funding standards for pension plans. This requirement may conflict with the clause's assertion that no Benefit Plan is subject to the minimum funding standards of Section 302 of ERISA or Section 412 of the Code.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=3076.3"
},
{
"state": "New York",
"law": "N.Y. Lab. Law § 211-a",
"conflict": "The clause asserts that neither Seller nor the Company has engaged in any transaction which would give rise to a liability of the Company or Buyer under Section 4069 or Section 4212(c) of ERISA.",
"relevance": "New York Labor Law Section 211-a imposes liability on employers for certain transactions related to pension plans. This may conflict with the clause's assertion that neither the Seller nor the Company has engaged in any transaction that would result in liability under ERISA sections 4069 or 4212(c).",
"url": "https://www.nysenate.gov/legislation/laws/LAB/211-A"
}
]
}
},
{
"clause": "(d) Except as set forth in Section 3.16(d) of the Disclosure Schedules and
other than as required under Section 4980B of the Code or other applicable Law, no
Benefit Plan provides benefits or coverage in the nature of health, life or disability
insurance following retirement or other termination of employment (other than death
benefits when termination occurs upon death).",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), 29 U.S.C. §§ 1161-1168",
"conflict": "The clause states that no Benefit Plan provides benefits or coverage in the nature of health, life, or disability insurance following retirement or other termination of employment, except for death benefits when termination occurs upon death. However, certain federal laws mandate the continuation of health insurance coverage under specific circumstances.",
"relevance": "COBRA requires employers to provide continuation of group health coverage that otherwise might be terminated. The clause asserts that no Benefit Plan provides health insurance following termination of employment, except as required by Section 4980B of the Code. However, COBRA mandates continuation of health insurance coverage, which contradicts the general assertion of the clause.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18/subchapter1&edition=prelim"
},
{
"law": "State Continuation Laws",
"conflict": "The clause does not account for state laws that may require continuation of certain benefits post-termination.",
"relevance": "State continuation laws require employers to provide continuation of health insurance coverage beyond federal COBRA requirements. However, this clause does not consider state-specific continuation laws that may impose additional requirements for the continuation of health insurance coverage post-termination, thereby potentially conflicting with the clause's assertion.",
"url": "https://www.law.cornell.edu/ucc"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "Cal. Ins. Code § 10128.50",
"conflict": "The clause states that no Benefit Plan provides benefits or coverage in the nature of health, life, or disability insurance following retirement or other termination of employment, except for death benefits when termination occurs upon death. However, certain state laws may require continuation of such benefits under specific conditions.",
"relevance": "California Insurance Code Section 10128.50 requires the continuation of health insurance benefits for certain periods following the termination of employment. This law mandates that health insurance benefits must be continued for a specified period after employment termination, which contradicts the clause's assertion that no such benefits are provided post-termination except for death benefits.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=10128.50&lawCode=INS"
},
{
"state": "New York",
"law": "N.Y. Ins. Law § 3221(m)",
"conflict": "The clause asserts that no Benefit Plan provides benefits or coverage in the nature of health, life, or disability insurance following retirement or other termination of employment, except for death benefits when termination occurs upon death. However, some state laws may require the continuation of such benefits under certain conditions.",
"relevance": "New York Insurance Law Section 3221(m) requires the continuation of health insurance benefits for a specified period following the termination of employment. This law mandates that health insurance benefits must be continued for a certain period after employment termination, which contradicts any clause asserting that no such benefits are provided post-termination except for death benefits.",
"url": "https://www.nysenate.gov/legislation/laws/ISC/3221"
}
]
}
},
{
"clause": "(e) Except as set forth in Section 3.16(e) of the Disclosure Schedules, or as
would not have a Material Adverse Effect: (i) there is no pending or, to Seller's
knowledge, threatened action relating to a Benefit Plan; and (ii) no Benefit Plan has
within the three/NUMBER years prior to the date hereof been the subject of an
examination or audit by a Governmental Authority.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq.",
"conflict": "The clause asserts that there are no pending or threatened actions relating to a Benefit Plan and no examinations or audits by a Governmental Authority within the past three years. However, certain federal laws impose strict requirements and oversight on Benefit Plans, which may contradict these assertions.",
"relevance": "ERISA imposes strict requirements and oversight on Benefit Plans, including mandatory reporting and disclosure, fiduciary responsibilities, and enforcement actions by the Department of Labor (DOL). The clause's assertion that there are no pending or threatened actions and no examinations or audits within the past three years may be contradicted by ERISA's stringent oversight and enforcement mechanisms, which could result in actions or audits that the Seller may not be fully aware of or may not have disclosed.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18&edition=prelim"
},
{
"law": "Internal Revenue Code (IRC), 26 U.S.C. § 401 et seq.",
"conflict": "The clause's assertion that there are no pending or threatened actions relating to a Benefit Plan may be contradicted by the IRS's authority to audit and enforce compliance with tax-related aspects of Benefit Plans.",
"relevance": "The IRC authorizes the IRS to audit and enforce compliance with tax-related aspects of Benefit Plans, including qualification requirements and nondiscrimination rules. However, the clause's assertion that there are no pending or threatened actions and no examinations or audits within the past three years may be contradicted by the IRS's authority to conduct audits and enforce compliance. This could result in actions or audits that the Seller may not be fully aware of or may not have disclosed.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleA/chapter1/subchapterD/partI&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Labor Code § 2800-2810.5",
"conflict": "The clause asserts that there are no pending or threatened actions relating to a Benefit Plan and no examinations or audits by a Governmental Authority within the last three years. However, certain state laws may impose stricter requirements or have different standards for what constitutes a 'Material Adverse Effect' or 'Seller's knowledge'.",
"relevance": "The California Labor Code imposes stricter requirements on employers regarding Benefit Plans and employee protections. The clause may not fully comply with California's stricter standards, potentially leading to legal challenges or non-compliance issues.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=2800"
},
{
"state": "New York",
"law": "New York Labor Law § 200-299",
"conflict": "The clause's reliance on 'Seller's knowledge' and 'Material Adverse Effect' may not align with New York's legal standards, which could interpret these terms differently.",
"relevance": "New York Labor Law defines employer obligations and standards for Benefit Plans. However, the clause's definitions and conditions may not meet New York's legal standards, leading to potential legal discrepancies.",
"url": "https://www.nysenate.gov/legislation/laws/LAB"
}
]
}
},
{
"clause": "(f) Except as set forth in Section 3.16(f) of the Disclosure Schedules, or as
would not have a Material Adverse Effect, no Benefit Plan exists that could: (i) result in
the payment to any employee, director or consultant of any money or other property; (ii)
accelerate the vesting of or provide any additional rights or benefits (including funding of
compensation or benefits through a trust or otherwise) to any employee, director or
consultant, except as a result of any partial plan termination resulting from this
Agreement; or (iii) limit or restrict the ability of Buyer or its Affiliates to merge, amend
or terminate any Benefit Plan, in each case, as a result of the execution of this
Agreement. Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby will result in \"excess parachute payments\" within the
meaning of Section 280G(b) of the Code.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq.",
"conflict": "The clause aims to ensure that no Benefit Plan will result in excess parachute payments or other adverse effects due to the execution of the Agreement. However, certain federal laws impose restrictions and requirements that could conflict with these aims.",
"relevance": "ERISA imposes fiduciary responsibilities and funding requirements on Benefit Plans, which may limit the ability to amend or terminate such plans as freely as the clause suggests.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18&edition=prelim"
},
{
"law": "Internal Revenue Code, 26 U.S.C. § 280G",
"conflict": "The clause seeks to avoid any adverse tax consequences from excess parachute payments, but certain tax laws impose strict regulations that could be triggered by the transactions contemplated in the Agreement.",
"relevance": "Section 280G of the Internal Revenue Code imposes a 20% excise tax on excess parachute payments, which could be triggered by the transactions contemplated in the Agreement despite the clause's assertions.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleA/chapter1/subchapterB/partII/section280G&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Labor Code § 2802",
"conflict": "The clause restricts the ability to provide additional rights or benefits to employees, directors, or consultants, which may conflict with state laws that protect employee benefits and rights.",
"relevance": "California Labor Code § 2802 requires employers to indemnify employees for all necessary expenditures or losses incurred in direct consequence of the discharge of their duties. However, the clause's restriction on providing additional rights or benefits could be seen as conflicting with California's requirement to indemnify employees, potentially limiting the protections and benefits employees are entitled to under state law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=2802"
},
{
"state": "New York",
"law": "New York Labor Law § 193",
"conflict": "The clause's limitations on Benefit Plans may conflict with state laws that ensure certain employee benefits and protections.",
"relevance": "New York Labor Law § 193 prohibits unauthorized deductions from wages. The clause's potential to limit or restrict benefits could be interpreted as a form of unauthorized deduction or withholding of benefits, which is prohibited under New York law.",
"url": "https://www.nysenate.gov/legislation/laws/LAB/193"
}
]
}
},
{
"clause": "(g) The representations and warranties set forth in this Section 3.16 are the
Seller's sole and exclusive representations and warranties regarding employee benefit
matters.",
"reasoning": {
"potentially_conflicting_federal_laws": [
{
"law": "Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq.",
"conflict": "The clause limits the Seller's representations and warranties to those explicitly stated, which may conflict with federal laws that impose broader obligations on employers regarding employee benefits.",
"relevance": "ERISA imposes broad obligations on employers regarding employee benefits. However, the clause's limitation to 'sole and exclusive' representations and warranties may not encompass all obligations under ERISA, potentially leading to non-compliance.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18&edition=prelim"
},
{
"law": "Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), 29 U.S.C. § 1161 et seq.",
"conflict": "The clause's exclusivity may conflict with federal laws that require certain disclosures and fiduciary responsibilities regarding employee benefits.",
"relevance": "COBRA requires specific disclosures and continuation of health benefits. However, the clause's 'sole and exclusive' language may not cover all required disclosures and obligations under COBRA, which could lead to potential legal issues.",
"url": "https://uscode.house.gov/view.xhtml?path=/prelim@title29/chapter18/subchapter1&edition=prelim"
}
],
"potentially_conflicting_state_laws": [
{
"state": "California",
"law": "California Labor Code § 2800-2810.5",
"conflict": "The clause limits the Seller's representations and warranties to those explicitly stated, which may conflict with state laws requiring broader disclosures or protections regarding employee benefits.",
"relevance": "The California Labor Code requires employers to provide comprehensive disclosures and protections regarding employee benefits. However, the clause's limitation to 'sole and exclusive' representations may not meet the broader disclosure requirements mandated by California law.",
"url": "https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=2800"
},
{
"state": "New York",
"law": "New York Labor Law § 195",
"conflict": "The clause's exclusivity may conflict with state laws that impose additional obligations on employers regarding employee benefits, beyond what is stated in the agreement.",
"relevance": "New York Labor Law imposes additional obligations on employers regarding employee benefits. However, the clause's 'sole and exclusive' limitation may not align with New York's broader requirements for employer disclosures and obligations.",
"url": "https://www.nysenate.gov/legislation/laws/LAB/195"
}
]
}
}
]
}
marcfawzi
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