Assignment of Contract

Table of Contents:

• Assignment Conditions

• To Related Parties

• To a Successor in Interest

• Assignment of Accounts Receivable

Assignment of Contract

The default condition in most contracts is that neither party to a contract may assign its rights and obligations to a third party without the prior written consent of the other party.

Assignment Conditions

As illustrated in the following exemplars, the non-assigning party may condition its approval to an assignment upon certain requirements of the assigning party that safeguards the rights of the non-assigning party, including evidence of the assignee’s assumption of the assigning party’s obligations and its ability to perform, confirmation that the assignee is not a competitor of the non-assigning party, and the assignor’s continued liability under the contract for any pre-assignments acts and omissions:

Exemplar C8-1

No party to this Agreement will assign its rights or obligations hereunder without the prior written consent of the other party, except to any third party into which the assigning party has merged or which has otherwise succeeded to all or substantially all of its business and assets to which this Agreement pertains, by purchase of stock, assets, merger, reorganization or otherwise. In each of the above instances, the assigning party will provide the other party with written evidence of such future assignee’s acceptance of the assignment, delegation and assumption of the obligations under this Agreement, including assumption of all accepted purchase orders.

Exemplar C8-2

Without the consent of Contractor, Customer may assign this Agreement to an Acquirer of Customer, or allow this Agreement to be assumed by such Acquirer so long as: (a) Acquirer agrees to be fully bound by the terms and conditions set forth in this Agreement, (b) Acquirer has the financial and other resources necessary to fully perform Customer’s obligations hereunder, and (c) Acquirer is not a Contractor Competitor and does not control, is not controlled by or is not under common control with a Contractor Competitor. Except as otherwise provided herein, Customer shall not assign, delegate or transfer this Agreement or any right, interest or benefit under this Agreement, or allow this Agreement to be assumed by any third party without the prior written consent of Contractor and any such assignment, delegation, transfer or assumption without Contractor’s prior consent shall be wholly void and invalid. Subject to the foregoing, this Agreement shall be fully binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns.

Exemplar C8-3

The Company shall not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Contractor. The Company may assign or transfer all of its rights and obligations under this Agreement to an affiliate of the the Company without the prior written consent of the Contractor; provided that the Company delivers written notice to the Contractor of such assignment and transfer of its rights and obligations under this Agreement together with a photocopy of this Agreement attached thereto within ten (10) Business Days following assignment and transfer of its rights and obligations under this Agreement, which notice shall specifically identify such assignee and such assignee’s address for communications under this Agreement and shall contain the agreement of the assignee to assume all obligations of the Company under this Agreement. No assignment by the Company hereunder shall be effective until the notice described in the foregoing proviso has been received and implemented by the Contractor. The assignment and transfer by the Company of its rights and obligations under this Agreement shall not relieve the Company of any obligations incurred by the Company under this Agreement prior to the effective date of the assignment and transfer of its rights and obligations under this Agreement and assumption of this Agreement by the assignee of the Company. Any such assignment by the Company of its rights and obligations under this Agreement shall not affect the Contractor’s right to terminate this Agreement pursuant to Section X above.

To a Related Party

The parties may also agree to allow assignment to affiliates or other related parties:

Exemplar C8-4

Either party shall have the right to assign or otherwise transfer this Agreement, including as part of a merger, acquisition, or sale of assets or equity, or to any parent, subsidiary, or affiliated corporation, provided that the surviving entity or assignee agrees in writing to be bound by the terms of this Agreement and, should the assignor still exist, the assignor remaining liable for the performance of the terms of this Agreement.

Exemplar C8-5

No party may assign this Agreement, in whole or in part, nor delegate except as contemplated herein, all or part of the performance of duties required of it by this Agreement without the consent of the other party, except as permitted by applicable law or regulation, provided, however, that a Party may assign all or a portion of this Agreement to any affiliate using a negative consent process whereby the Authorizing Party has no less than sixty (60) days to respond to a notice of intended assignment, and failure to respond to any such notice of such intended assignment shall constitute assent to such proposed assignment.

To a Successor in Interest

In the following exemplars, no consent is necessary for an assignment to a legal successor-in-interest of the assigning party as a result of merger or acquisition:

Exemplar C8-6

Neither party may assign this Agreement or any of the rights or obligations granted hereunder, without the written consent of the other party, except to an affiliate or in connection with a merger, acquisition or sale of all or substantially all of a party’s assets.

Exemplar C8-7

Neither party may assign its own rights and delegate its duties under this Agreement in whole or in part at any time, without the other party’s written consent (which shall not be unreasonably withheld), provided, however, that either party may assign this Agreement without the other party’s consent to a successor in interest (whether by merger, sale, or otherwise). This Agreement will bind and inure to the benefits of, the parties and their respective successors and permitted assigns.

Exemplar C8-8

Neither party may transfer or assign its rights or obligations under this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld, provided that no such consent of the other party shall be required in the event of a transfer or assignment by a party to its parent or subsidiary or to a successor in interest or to the acquirer of all or substantially all of its assets where such acquirer is not a direct competitor of the other party. Subject to the foregoing sentence, this Agreement will be binding upon and inure to the benefit of the parties hereto, their successors and assigns.

Exemplar C8-9

The Contract is issued to the Seller, in reliance upon its personal performance of the duties imposed. Without prior written consent of Customer, Seller may not assign these General Terms or any Contract or subcontract or delegate the performance of its duties thereunder, by operation of law or otherwise, to a third-party competitor of Customer, and any attempt to do so shall be void. All assignments of rights to a competitor of Customer are prohibited under this section, whether they are voluntary or involuntary, by merger, consolidation, dissolution, operation of law, change of control or any other manner. For purposes of this Section, (i) a “change of control” is deemed an assignment of rights; and (ii) “merger” refers to any merger in which Seller participates, regardless of whether it is the surviving or disappearing corporation, and any attempt to do so shall be void. Notwithstanding the foregoing, no such consent of Customer shall be required in the event of a transfer or assignment by Seller to its parent or subsidiary or to a successor in interest or to the acquirer of all or substantially all of its assets where such acquirer is not a direct competitor of Customer. Subject to the foregoing sentence, the terms and conditions of this Contract will be binding upon and inure to the benefit of the parties hereto, their successors and assigns. Any subcontracting, assignment or delegation does not relieve Seller of any responsibility under the Contract, and Seller shall be responsible to the same extent as if the subcontracted duties were retained by Seller (including all acts and omissions of the subcontractor, such as purchasing, labor and material control, quality of material and workmanship, and proper performance of obligations).

In the following exemplar, the non-assigning party agrees not to withhold consent unreasonably to an assignment in connection with a merger or acquisition to a non-competitor:

Exemplar C8-10

The rights and obligations under this Agreement are personal, and may not be assigned or transferred, voluntarily, by operation of law or otherwise, without our prior written consent, which consent will not be unreasonably withheld if the proposed transfer occurs in connection with the sale of substantially all of your assets or outstanding voting securities to a third party that is not a Competitor of the non-assigning party. Any attempt assignment or transfer without our consent will be void.

Nota Bene: Merger structures are beyond the scope of this site. However, non-assignment clauses should not be confused with change-of-control provisions that require the consent of the other party in connection with a material change in the control, structure, and/or ownership of that party (see the section entitled “Change of Control”). For example, when a change of control is accomplished via a “reverse triangular merger” structure, whereby the target company retains its assets as well as it contractual rights and obligations, contracts of the target that contain non-assignment clauses do not need the non-changing party’s consent to be transferred because the target company is the nominal survivor in the merger and retains its assets and contractual rights and obligations post merger, and therefore no assignment is required or made.

Assignment of Accounts Receivables

In the following exemplars, a party possesses the right to assign any benefit arising from a contract, namely the right to receive payment, to any third party upon notice to the non-assigning party (with and without the non-assigning party’s consent):

Exemplar C8-11

Both Parties may assign their respective right to receive money due hereunder, but any assignment of money will be void if (i) the assignor fails to give the non-assigning Party at least thirty (30) days prior written notice, or (ii) the assignment purports to impose upon the non-assigning Party additional costs or obligations in addition to the payment of such money, or (iii) the assignment purports to preclude Contractor from dealing solely and directly with Supplier in all matters pertaining to this Agreement.

Exemplar C8-12

Notwithstanding anything to the contrary in this Agreement the Supplier shall without limitation be permitted to assign or otherwise transfer any of its accounts receivable resulting from the sale of Products and Services to Customer pursuant to this Agreement.

Exemplar C8-13

Vendor may not assign or transfer any of its rights (except rights to payments) or obligations under this Agreement or any SOW without the prior written consent of Customer. Customer may assign this Agreement or any SOW to any Customer Affiliate without any prior notice to or consent of Vendor.

Exemplar C8-14

CUSTOMER shall consider void any assignment to which it has not consented, except where SUPPLIER assigns its rights to receive monies pursuant to this Agreement. In such case, SUPPLIER only needs to notify CUSTOMER in writing. However, SUPPLIER cannot assign monies due if SUPPLIER tries to transfer to the assignee any of SUPPLIER’s other rights or obligations hereunder.

Exemplar C8-15

Seller may not, without Buyer’s prior written consent (on the face of an Order or in a signed writing by an authorized representative of Buyer), (i) assign or delegate (including without limitation by subcontract) its obligations under the Order, or (ii) enter or offer to enter into a transaction that includes a sale of a substantial portion of its assets used for the production of the Supplies for Buyer or a merger, sale or exchange of stock or other equity interests that would result in a change of control of Seller. In the event of any approved assignment (including without limitation subcontract), sale or delegation authorized by Buyer, Seller retains all responsibility for Supplies, including all related warranties and claims, unless otherwise expressly agreed in writing by Buyer. Notwithstanding the foregoing, with Buyer’s prior written consent, Seller may make an assignment of receivables due or to become due to a single financial institution; provided, however, that any such assignment shall be subject to set-off or other proper method of enforcing any claims that Buyer may have under the Order.

Exemplar C8-16

The written consent of the opposing party to the contract is also to be obtained for the pledging of receivables from the contractual relationship.

Exemplar C8-17

If Vendor assigns payments to an assignee/factor, Vendor understands and agrees that Vendor and the assignee/factor will be required to sign Dealer’s standard terms and conditions agreement to assure Dealer that the assignee/factor understands the rights and obligations being assigned, including the right of Dealer to make offsets.