Exhibit 2.1
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
dated as of
April 25, 2003
by and among
DTVN HOLDINGS, INC.
a Delaware corporation
DATAVON, INC.
a Texas corporation
ZYDECO EXPLORATION, INC.
a Texas corporation
VIDEO INTELLIGENCE, INC.
a Pennsylvania corporation
and
TRANSCOM COMMUNICATIONS, INC.
a Texas corporation
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of this day of April, 2003, by
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and among DTVN HOLDINGS, INC., a Delaware corporation ("DTVN"), DATAVON, INC., a
Texas corporation ("DataVoN"), ZYDECO EXPLORATION, INC. a Texas corporation
("Zydeco"), and VIDEO INTELLIGENCE, INC., a Pennsylvania corporation ("VI"),
each as debtor and debtor-in-possession (DTVN, DataVoN, Zydeco, and VI being,
collectively, the "DataVoN Sellers"), and TRANSCOM COMMUNICATIONS, INC., a Texas
corporation (together with its subsidiaries, affiliates or assigns "Buyer").
W I T N E S S E T H
WHEREAS, DTVN owns 100% of the stock of DataVoN, Zydeco, and VI;
WHEREAS, the DataVoN Sellers own or have the right to use, and will
own or have the right to use as of the Closing Date, all of the assets currently
used in its next-generation communications services and infrastructure business
(the "Business");
WHEREAS, the DataVoN Sellers desire to sell certain assets currently
used in the Business to Buyer in exchange for the purchase price described in
Section 9.36 (the "Purchase Price");
WHEREAS, the DataVoN Sellers and Buyer desire to set forth their
agreement with respect to the transfer of certain assets primarily used in the
Business to, and the assumption of specified liabilities by, Buyer in exchange
for the Purchase Price;
WHEREAS, the DataVoN Sellers are currently debtors and
debtors-in-possession in cases under the Bankruptcy Code titled, respectively,
In re: DTVN Holdings, Inc., Case No. 02-38770, In re: DataVoN, Inc., Case No.
02-38600, In re: Zydeco Exploration, Inc., Case No. 02-38774, and In re Video
Intelligence, Inc., Case No. 02-38773 (Jointly Administered under Case No.
02-38600) in the Bankruptcy Court (together, the "Bankruptcy Case");
WHEREAS, pursuant to this Agreement and in furtherance of the transfer
of certain assets primarily used in the Business of the DataVoN Sellers, the
DataVoN Sellers have filed a Motion for Order (I) approving (A) this Agreement
for the sale of substantially all of the assets used in the Business and (B) the
buyer protection and bidding procedures in connection with the sale, (II)
authorizing the sale of assets, free and clear of Liens, claims and interests,
(III) determining that the sale is exempt from any stamp, transfer, recording or
similar tax, (IV) authorizing the assumption of certain executory contracts and
establishing the cure amounts, if any, as to such contracts and (V) granting
related relief (the "Sale Motion") and seek the entry of the Sale Order.
NOW THEREFORE, in consideration of the mutual promises contained
herein, and intending to be legally bound, the DataVoN Sellers and Buyer do
hereby agree as follows:
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ARTICLE I
TRANSFER OF ASSETS
1.1 Transferred Assets.
(a) Transferred Assets. Except as to any Excluded Assets and
Restricted Assets, the DataVoN Sellers hereby agree to contribute, convey,
grant, assign and transfer to Buyer at the Closing, and Buyer hereby agrees to
accept from the DataVoN Sellers at the Closing, all those assets, properties,
rights and privileges owned, used or held for use by the DataVoN Sellers in the
conduct of the Business, including but not limited to the those expressly
described below but excluding the assets, properties, rights and privileges
described in Section 1.1(b)(the "Transferred Assets"):
(1) All equipment (the "Equipment"), including, without
limitation, all machinery, equipment, furniture, fixtures, computers, printers,
computer disks and other storage devices, computer software, supplies, spare and
replacement parts, and all other tangible property and all related manuals,
drawings, diagrams and other documentation;
(2) All customer and supplier lists and all other information as
to sources of supply and relationships with suppliers and customers;
(3) Copies of all books and records, correspondence, files and
computer data relating to the Business or any of the Transferred Assets;
(4) All artwork and other graphic medium used in connection with
the manufacture of products for the DataVoN Sellers' past and present customers;
(5) All inventory, supplies and work in process;
(6) All general intangibles, including the right to any tax
refunds or reductions;
(7) All of the DataVoN Sellers' assignable rights and interests
arising under or in connection with the Assumed Contracts, which Buyer expressly
elects to acquire or assume pursuant to Section 6.5;
(8) All of the DataVoN Sellers' rights, claims or causes of
action, asserted or unasserted, contingent or fixed, known or unknown, against
third parties under warranties relating to, or rights to indemnity from
manufacturers, vendors and others in connection with, the Transferred Assets
(but no liabilities therefrom) and any cause of action or avoiding right under
Bankruptcy Code (S)(S) 542-550 against any party to an executory contract that
is an Assumed Contract;
(9) All transferable authorizations and permits;
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(10) All of the intellectual property rights which the DataVoN
Sellers own, and, to the extent assignable under an Assumed Contract, all rights
of the DataVoN Sellers to intellectual property rights of others, including all
rights of the DataVoN Sellers in and to all patents, trademarks, trade names,
domain names, service marks, copyrights and trade secrets, whether registered or
not, and all related and ancillary rights (the "Transferred Intellectual
Property Rights");
(11) All cash, cash equivalents, checking accounts, savings
accounts and other accounts;
(12) All accounts receivable, notes receivable, commercial paper
and other evidences of indebtedness except for indebtedness between the DataVoN
Sellers (the "Accounts Receivable");
(13) All prepayments related to the Assumed Contracts;
(14) All customer deposits held by the DataVoN Sellers;
(15) All goodwill relating to the above assets and the Business;
(16) All deposits made by the DataVoN Sellers in relation to the
Assumed Contracts; and
(17) All Tax Assets; and
(18) Any Restricted Asset for which the DataVoN Sellers and Buyer
obtain the Approval from the requisite third party, pursuant to Section 1.1(b)
of this Agreement
(b) Excluded Assets. "Excluded Assets" shall include the following:
(1) The consideration delivered to the DataVoN Sellers pursuant
to this Agreement;
(2) All prepaid expenses and retainers as of the Closing Date and
as reflected in the DataVoN Sellers' books and records on such date other than
those described in Section 1.1(a)(13) above;
(3) Any and all equipment or software subject to and within the
terms of any lease listed on Schedule 1.1(b);
(4) All contracts of insurance (including, without limitation,
those providing employee benefits);
(5) All Employee Benefits Assets;
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(6) Causes of action arising prior to the Closing Date, including
without limitation any cause of action or avoiding right under Bankruptcy Code
(S)(S)542-550; provided that such causes of action do not impair or are not
necessary to the Transferred Assets or related to the contracts listed on
Schedule 6.5 or a Restricted Asset ultimately assigned to Buyer; provided
further that such causes of action do not include warranty claims relating to
the Transferred Assets;
(7) Indebtedness between the DataVoN Sellers; and
(8) All other assets listed on Schedule 1.1(b);
(9) The account receivable and associated proof of claim filed in
the MCI Worldcom bankruptcy case and any associated proceeds from the sale of
the claim;
(10) The proofs of claim filed in the bankruptcy of Focal
Communications Corporation (and any recovery thereunder) ("Focal");
(11) The proofs of claim filed in the bankruptcy cases of Vision
Communications and any recovery thereunder; and
(12) Except as provided in Section 1.1(a)(8) the DataVoN Sellers
retain all rights and causes of action, including without limitation, claim
allowance, breaches of contract, insider acts, fraud, negligence, or other tort
claims, or other causes of action that may be raised under any statute,
applicable federal or state law, common law, or other ground, and intend to
transfer same to the liquidating trust to be formed pursuant to the Joint Plan
of Reorganization of the DataVoN Sellers. Some or all of these causes of action
may be brought against Buyer, creditors, vendors, customers, former
employees/1/, shareholders/2/, or other parties. In addition, the Unsecured
Creditors Committee has advised the DataVoN Sellers that it continues to review
pre-petition liens and pre-petition transactions with insiders, including Buyer.
Nothing herein shall limit the Unsecured Creditors Committee rights or claims to
bring such causes of action as it deems appropriate, or to transfer such causes
of action to the Trust under the Plan.
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/1/ The Debtors retain the right to pursue claims against former employees.
including, without limitation. those arising from the wrongful utilization of
information or processes developed by the Debtors.
/2/ The Sellers and the Unsecured Creditors Committee retain all rights
regarding litigation against shareholders, including without limitation. claims
against former management and Transcom.
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(c) Restricted Assets. Prior to and after the Closing, the DataVoN
Sellers and Buyer shall use their respective best efforts to obtain the Approval
of any third party that is required in connection with the transfer of the
Restricted Assets as listed on Schedule 1.1(c), and upon receipt of such
Approval such Restricted Assets shall, without any further consideration or
action of the parties, be deemed to be contributed, conveyed, granted, assigned
and transferred to Buyer and shall thereafter constitute part of the Transferred
Assets as if they had been so sold, conveyed, granted, assigned and transferred
as of the Closing Date. If for any reason any Restricted Asset cannot be
transferred to Buyer, as a result of the inability to obtain a required consent
or otherwise, this Agreement shall constitute an equitable assignment by each
DataVoN Seller to Buyer of all of such DataVoN Seller's rights, benefits, title
and interest in and to such Restricted Assets, and the Buyer and the DataVoN
Sellers shall use their respective best efforts to give Buyer benefits of such
Restricted Asset as if it had been transferred to Buyer as of the Closing Date,
including, but not limited to, (i) Buyer's receiving all economic benefits of
such Restricted Assets, (ii) Buyer's enforcing any rights of a DataVoN Seller
arising with respect to any such Restricted Assets (including, without
limitation, the right to terminate in accordance with the terms thereof upon the
advice of such DataVoN Seller), and (iii) Buyer's enforcing any rights arising
with respect to such Restricted Assets as if they had been sold, conveyed,
assigned or transferred to Buyer. Each DataVoN Seller hereby agrees that in the
event of the transfer or assignment of any Restricted Asset, the transferee or
assignee thereof shall agree, as a condition to such transfer or assignment, to
be bound by the terms of this Section 1.1(c).
1.2 "As Is" Condition. Except as set forth in Article VII, the
Transferred Assets shall be conveyed to and accepted by Buyer on the Closing
Date in an "as is" "where is" and "with all faults" condition, free of any
warranties or representations whatsoever, whether express or implied, patent or
latent and each DataVoN Seller EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES,
EXPRESS OR IMPLIED, WITH RESPECT THERETO AND EXPRESSLY DISCLAIMS LIABILITY FOR
LOSS OF PROFIT OR FOR INDIRECT, CONSEQUENTIAL OR COMMERCIAL LOSSES AND ALL OTHER
OBLIGATIONS AND LIABILITIES.
1.3 Further Assurances. Each DataVoN Seller, for itself and its
respective successors and assigns, hereby covenants and agrees that, without
further consideration, at any time and from time to time after the Closing Date,
it shall execute and deliver to Buyer such further instruments of sale,
conveyance, assignment and transfer, and take such other action, all upon the
reasonable request of Buyer, in order to (a) further document or evidence the
contribution, conveyance, grant, assignment, transfer and delivery of all or any
portion of the Transferred Assets to Buyer, (b) assure and confirm to any other
person the ownership of the Transferred Assets by Buyer, and (c) permit Buyer to
exercise any of the franchises, rights, licenses or privileges intended to be
contributed, granted, conveyed, assigned, transferred and delivered by the
DataVoN Sellers to Buyer pursuant to this Agreement.
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ARTICLE II
ASSUMPTION OF CERTAIN LIABILITIES
2.1 Assumed Liabilities.
(a) Assumed Liabilities. Buyer shall assume only those obligations of
the DataVoN Sellers expressly described below (the "Assumed Liabilities"):
(1) Liabilities incurred, accruing or arising after Closing associated
with the Assumed Contracts set forth on Schedule 6.5 ;
(2) Liabilities incurred, accruing or arising before Closing
associated with each Assumed Contract listed in Schedule 6.5, but only to the
limit of the "Proposed Cure Amount" set forth in Schedule 6.5;
(3) Liabilities for the secured indebtedness of the DataVoN Sellers to
Regions Bank and Xxx Xxxxxxx;
(4) Allowed administrative claims against the DataVoN Sellers in the
Bankruptcy Case for post-petition liabilities arising in the ordinary course of
business, subject to the right of Buyer to contest the allowance of any such
administrative claim. The parties hereto acknowledge and agree that the
following are not assumed pursuant to this Section 2.1(a)(4) to the extent they
might otherwise be deemed to have arisen in the ordinary course of business:
(i) any administrative claim of any professional employed in the
Bankruptcy Case pursuant to Section 327 or 328 of the Bankruptcy Code or
expert witness employed pursuant to Federal Rule of Evidence 706;
(ii) any retention bonuses payable to Key executives or employees
in accordance with the terms of that certain Order Authorizing Debtors to
Implement Employee Retention Plan (as amended) entered in the Bankruptcy
Case; and
(iii) any alleged post-petition claim of the operating telephone
subsidiaries of Verizon Communications, Inc.
(5) Tax Liabilities attributable solely to federal income Taxes for
the 2002 calendar year, subject to the obligation of the DataVoN Sellers to
reasonably cooperate with Buyer to mitigate, reduce or contest any such Tax
Liabilities.
(6) Liabilities owed to the DataVoN Sellers' employees for any sick
leave or vacation pay accrued as of Closing.
(b) Security for Assumed Liabilities. In order to secure its
obligations to satisfy the Assumed Liabilities, Buyer shall grant to the DataVoN
Sellers a first lien security interest in the Accounts Receivable.
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(c) Excluded Liabilities. Buyer shall not assume and the DataVoN
Sellers shall be solely and exclusively liable with respect to all obligations
of the DataVoN Sellers except for the Assumed Liabilities (the "Excluded
Liabilities").
2.2 Further Assurances. Upon the reasonable request of the DataVoN
Sellers, at any time and from time to time after the Closing Date, without
further consideration, Buyer shall execute and deliver such further instruments
of assumption and take such other actions as the DataVoN Sellers reasonably may
require of Buyer to further document or evidence the assumption of the Assumed
Liabilities, including but not limited to the execution of such instruments as
may be requested by any creditor, lessor or any other person whose consent is
required to consummate the transactions contemplated by this Agreement.
ARTICLE III
CONDITIONS TO OBLIGATIONS
3.1 Conditions to Obligations of the DataVoN Sellers. All obligations
of the DataVoN Sellers under this Agreement are subject to the fulfillment,
unless waived in writing at the sole option of the DataVoN Sellers, at or prior
to the Closing Date, of each of the following conditions precedent:
(a) Representations and Warranties. The representations and warranties
of Buyer herein contained shall be true and correct as of the date of this
Agreement and shall be true and correct in all material respects (except that
where any statement in a representation or warranty expressly includes a
standard of materiality, such statement shall be true and correct) on and as of
the Closing Date, except that any representation or warranty which by its terms
is made as of a specified date shall be true and correct in all material
respects as of such specified date (except that where any statement in a
representation or warranty expressly includes a standard of materiality, such
statement shall be true and correct) with the same force and effect as though
made on and as of said date.
(b) Covenants. Buyer shall have performed all of the obligations and
agreements and complied with all of the covenants contained in this Agreement to
be performed and complied with by it at or prior to the Closing Date in each
case except where such failure to perform or comply would not have a Material
Adverse Effect. At Closing, Buyer is the owner and holder of any obligations
allegedly owed by DataVoN Sellers to Buyer.
(c) Closing Documents. The DataVoN Sellers shall have received all
reports, agreements, certificates, instruments and other documents required to
be delivered by Buyer on the Closing Date pursuant to Section 4.4, and the form
and substance of all such reports, agreements, certificates, instruments and
other documents shall be reasonably satisfactory to the DataVoN Sellers.
(d) Absence of Orders; Actions. No Law or Order shall have been
enacted, entered, issued, promulgated or enforced by any Governmental Entity
which prohibits or restricts the transactions contemplated by this Agreement
except where such restriction would not have a Material Adverse Effect.
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(e) Third-Party Approvals. Buyer shall have obtained all Approvals
required to be obtained by it in connection with the transactions contemplated
by this Agreement, except for such Approvals the failure of which so to have
been obtained would not have a Material Adverse Effect on the ability of Buyer
to perform their obligations under this Agreement, or on any aspect of the
transactions contemplated by this Agreement.
(f) Bankruptcy Court Orders. The Sale Order, in form and substance
satisfactory to the DataVoN Sellers, shall be entered in full effect.
(g) Purchase Consideration. In accordance with Section 5.1, the
Purchase Price shall be simultaneously paid by Buyer to the DataVoN Sellers at
Closing. In accordance with Section 5.3, the cash portion of the Purchase Price
shall be paid to the Seller and the Deposit shall be credited against the cash
portion of the Purchase Price.
(h) Financing : Assignability of Certain Assets and Software. Buyer
shall by the Sale Hearing satisfy the obligation provided in Section 3.2(e) or
provide a written waiver acceptable to the DataVoN Sellers waiving such
obligation provided in Section 3.2(e).
3.2 Conditions to the Obligations of Buyer: All obligations of Buyer
under this Agreement are subject to the fulfillment, unless waived in writing at
the sole option of Buyer, at or prior to the Closing Date, of the following
conditions precedent:
(a) Covenants. The DataVoN Sellers shall have performed all of the
obligations and agreements and complied with all of the covenants contained in
this Agreement to be performed and complied with by the DataVoN Sellers on or
prior to the Closing Date in each case except where such failure to perform or
comply would not have a Material Adverse Effect.
(b) Closing Documents. Buyer shall have received all, agreements,
certificates, instruments and other documents required to be delivered by the
DataVoN Sellers on the Closing Date pursuant to Section 4.3, and the form and
substance of all such, agreements, certificates, instruments and other documents
shall be reasonably satisfactory to the Buyer.
(c) Absence of Orders: Actions. No Law or Order shall have been
enacted, entered, issued, promulgated or enforced by any Governmental Entity
which prohibits or materially restricts the transactions contemplated by this
Agreement except where such restriction would not have a Material Adverse
Effect.
(d) Bankruptcy Court Orders. The Sale Order, in form and substance
satisfactory to Buyer, shall be entered in full effect. Prior to or concurrently
with the entry of the Sale Order, the Bankruptcy Court shall have determined
that the amount of the cure, if any, as to the Assumed Contracts is not greater
than the Proposed Cure Amount associated with each Assumed Contract in Schedule
6.5.
(e) Assignability of Certain Lease and License Agreements. Buyer and
each of the vendors (each a "Vendor" and collectively the "Vendors") with
respect to the lease and license agreements set forth on Schedule 3.2(f) (the
"Lease and License Agreements") shall have modified, assumed, assigned or
consented to the Lease and License Agreements or entered
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into such other agreements, documents or instruments, in each case in form and
substance satisfactory to Buyer, on the one hand, and the Vendor, on the other,
evidencing the modification, assumption, assignment or consent of the Lease and
License Agreements to or on behalf of Buyer.
(f) Material Adverse Effect. At any time after the date of the this
Agreement and before the Closing date, there shall not have been any event or
occurrence, individually or in the aggregate with all such events or
occurrences, that have had or is likely to have a Material Adverse Effect or
change on the operations, revenue or prospects of the Business.
CLOSING
4.1 Time and Place. The Closing shall take place at 10:00 a.m. on the
Closing Date at the offices of Xxxxxx & Xxxx, Xxxxxx, Xxxxx, 00000.
4.2 Closing Transactions. All documents and other instruments required
to be delivered at the Closing shall be regarded as having been delivered
simultaneously, and no document or other instrument shall be regarded as having
been delivered until all have been delivered.
4.3 Deliveries by the DataVoN Sellers to Buyer. At the Closing, each
of the DataVoN Sellers shall deliver or cause to be delivered to Buyer:
(a) such instruments of transfer and assignment for the Transferred
Assets that the Buyer may reasonably request to vest the Transferred Assets in
the Buyer, free and clear of Liens and claims, in accordance with terms of this
Agreement; and
(b) such other instruments and documents as are required by any other
provisions of this Agreement or any agreement executed in connection herewith to
be delivered on the Closing Date by such DataVoN Seller to Buyer, as the case
may be, including without limitation evidence of the Bankruptcy Court approvals
of the Orders described in Section 6.6(e).
4.4 Deliveries by Buyer. At the Closing, Buyer, as the case may be,
shall deliver or cause to be delivered to the DataVoN Sellers:
(a) the Purchase Price in accordance with Article 5 hereof.
(b) a certificate of the secretary or assistant secretary of Buyer
certifying to: (i) the certificate or articles of incorporation and by-laws (or
comparable organizational documents) of Buyer; (ii) the resolutions of the board
of directors (or other governing body) of Buyer approving the execution,
delivery and performance of this Agreement, the Transaction Document to which
they are a party and the consummation of the transactions contemplated hereby;
and (iii) the incumbency and signatures of the officers of Buyer executing this
Agreement and any other certificate or document delivered in connection
herewith;
(c) a certificate executed by the president and a vice president or
the treasurer of Buyer, dated as of the Closing Date, to the effect that the
conditions specified in Section 3.1 (a) and 3.1(b) are satisfied in all
respects;
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(d) the certificate of incorporation or articles of incorporation (or
comparable organizational documents) of Buyer certified by the Secretary of
State of its jurisdiction of organization, a certificate of existence or good
standing therefrom, as applicable, dated as of a recent date and a "bring-down"
telegram or certificate of good standing from such jurisdiction of organization
dated as of a date within three (3) Business Days of the Closing Date; and
(e) such other instruments and documents as are required by any other
provisions of this Agreement or any agreement executed in connection herewith to
be delivered on the Closing Date by Buyer to the DataVoN Sellers.
ARTICLE V
PAYMENT OF PURCHASE PRICE AND SALE/CLOSING
5.1 Payment of Purchase Price. At the Closing and in consideration for
the sale and transfer of the Transferred Assets, Buyer shall pay to the DataVoN
Sellers the Purchase Price. In that regard, Buyer shall deliver to the DataVoN
Sellers the cash portion of the Purchase Price. In accordance with Section 5.3,
$50,000 of the cash portion of the Purchase Price shall be paid by Buyer by
crediting the Deposit against the cash portion of the Purchase Price.
5.2 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Transferred Assets as set forth in Schedule 5.2, and the
Buyer and the DataVoN Sellers agree to act in a manner consistent with such
allocation. Buyer and the DataVoN Sellers shall reflect such allocation in any
filings required pursuant to Section 1060 of the Internal Revenue Code of 1986,
as amended, or any similar provisions of state, local or foreign law, and in all
tax returns.
5.3 Deposit. Concurrently with the execution and delivery of this
Agreement, Buyer has tendered to the DataVoN Sellers a deposit in the amount of
Fifty Thousand Dollars ($50,000) (the "Deposit"). From the date of this
Agreement through the Closing Date, the Deposit shall be maintained by the
DataVoN Sellers, or their counsel, in an segregated escrow account. At the
Closing, the Deposit shall be credited against the cash portion of the Purchase
Price. The Deposit shall be immediately refunded to the Buyer in the event that
(i) the DataVoN Sellers breach any of their obligations hereunder and the Buyer
elects to terminate this Agreement based upon such breach as provided for in
Section 8.1(f); (ii) a condition set forth under Section 3.2 has not been
satisfied and the Buyer elects to terminate this Agreement as provided for in
Section 8.1(f); (iii) the Bankruptcy Court does not approve the transaction
through no fault of Buyer; or (iv) the Agreement is terminated pursuant to
Section 8.1(g).
ARTICLE VI
COVENANTS
6.1 Access.
(a) Buyer agrees that it shall preserve and keep the books and records
held by it, its subsidiaries or its controlled Affiliates relating to the
Business for a period of three years from the date hereof.
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(b) For as long as the Bankruptcy Case remains open, Buyer shall give
the Trustee reasonable access, during Buyer's normal business hours and upon
reasonable prior written notice, to all books and records of Buyer relating to
the operation of the Business prior to the Closing Date or to any Excluded
Liabilities including, without limitation, all relevant computer data files
stored, used, held or kept in connection with the operation of the Business, to
the extent such files are in Buyer's possession; provided that as a condition to
such access the Trustee shall have executed and delivered a confidentiality
agreement reasonably satisfactory to Buyer; provided further that the purpose
and extent of such access shall be as necessary in connection with either (i)
the prosecution or defense of any Action brought by or against the bankruptcy
estate of the DataVoN Sellers or the Trustee, or any Liquidation Trust approved
in the confirmed plan of reorganization, involving facts, events or
circumstances relating to the Business or the Excluded Liabilities, or (ii) the
preparation of any Tax return, election, contest or claim for Tax refund or any
audit, examination or proceeding with respect to the Taxes of the DataVoN
Sellers. The Trustee shall have the right at their own expense to make copies of
such materials to the extent that they relate to the operations of the Business
prior to the Closing Date or to any Excluded Liabilities.
6.2 Insurance.
(a) Until 12:00 a.m. on the date following the Closing Date, the
DataVoN Sellers shall maintain all insurance coverage maintained by the DataVoN
Sellers under which the Transferred Assets are insured, including any and all
bonds or other indemnity obligations. Effective at 12:01 a.m. on the date
following the Closing Date, all insurance coverage maintained by the DataVoN
Sellers under which the Transferred Assets are insured, including any and all
bonds and indemnity obligations, shall be cancelled and terminated (except to
the extent that they may not, by their terms, be so cancelled or terminated),
and Buyer shall obtain separate insurance coverage for the Transferred Assets.
All premium refunds paid to the DataVoN Sellers relating to such insurance
covering the Transferred Assets shall be the property of the DataVoN Sellers
regardless of whether such refunds are paid on, before or after the Closing
Date.
Buyer shall continue to be entitled to such claims or rights to receive any
insurance proceeds under insurance covering the Transferred Assets prior to the
Closing Date as the DataVoN Sellers may have, whether such coverage is or was
maintained on an "occurrence" basis or a "claims-made" basis. From and after the
Closing Date, the DataVoN Sellers and Buyer shall cooperate in connection with
the adjustment and administration of claims under all such insurance coverage.
Buyer and the DataVoN Sellers shall be responsible for any deductible, retention
or other charge provided for by the terms of any such coverage.
Assumed and Assigned Contracts.
(a) Subject to the approval of the Bankruptcy Court and pursuant to
the Sale Order, the Assumed Contracts will be assumed by the DataVoN Sellers and
sold and assigned to Buyer (or Buyer's designee) free and clear of all Liens and
claims, except for Assumed Liabilities, on the Closing Date under Sections
363(f), 365(a) and 365(b) of the Bankruptcy Code. At Closing, all Assumed
Contracts shall be sold and assigned to Buyer (or Buyer's designee) free and
clear of all Liens and claims, except for Assumed Liabilities. Subject to
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Xxxxxxxxxx Xxxxx approval, Buyer's determination of the contracts that shall
constitute Assumed Contracts is set forth on Schedule 6.5.
(b) If after the date hereof (including after the Closing Date), Buyer
or a DataVoN Seller discover a contract relating primarily to the Business which
Buyer in good faith believes should have been treated as an Assumed Contract
hereunder and for which Buyer had not been given reasonable opportunity prior to
Closing to review and include such contract as an Assumed Contract and if such
contract has not been otherwise assigned to a third party after the Closing,
Buyer and the DataVoN Sellers shall take such action and execute such agreements
as may be appropriate to effect the Buyer's assumption and the DataVoN Seller's
assignment of such contract and Schedule 6.5 shall be updated to reflect the
addition of such contract, provided, however, Buyer acknowledges its obligation
to cure such contract pursuant to Section 2.1(a)(1).
6.4 Pre-Closing Covenants.
(a) Further Actions. During the period from the date of this Agreement
through the Closing Date, each of Buyer and the DataVoN Sellers agrees to use
its commercially reasonable best efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things reasonably necessary, proper
or advisable to satisfy the conditions to the other parties' obligation to
consummate and make effective the transactions contemplated by this Agreement,
including using its commercially reasonable best efforts: (i) to defend any
lawsuits or other Actions, whether judicial or administrative, whether brought
derivatively or on behalf of third parties (including any Governmental Entity),
challenging this Agreement or the consummation of the transactions contemplated
hereby; and (ii) to furnish to each other such information and assistance as
reasonably may be requested in connection with the foregoing.
(b) Notification of Certain Matters. Buyer and the DataVoN Sellers
shall promptly notify the other parties to this Agreement of (a) the occurrence
or non-occurrence of any fact or event which would be reasonably likely (i) to
cause any representation or warranty contained in this Agreement to be untrue or
inaccurate in any respect at any time from the date hereof to the Closing Date
except to the extent that such untruth or inaccuracy will not have a Material
Adverse Effect or (ii) to cause any covenant, condition or agreement hereunder
not to be complied with or satisfied in all material respects except to the
extent that any such noncompliance will not have a Material Adverse Effect and
(b) any failure of Buyer or a DataVoN Seller to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder except to the extent that any such failure will not have a Material
Adverse Effect. Each DataVoN Seller will promptly notify Buyer of any event of
which it obtains knowledge that has had or is reasonably likely to have a
Material Adverse Effect or materially and adversely affect any of the
Transferred Assets.
(c) Conduct of Business. Except as otherwise contemplated by this
Agreement and as Buyer may otherwise consent in writing, until the Closing:
(1) No DataVoN Seller will amend, change, terminate or otherwise
modify any Assumed Contract, except with Buyer's consent and Buyer shall not
unreasonably withhold such consent;
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(2) No DataVoN Seller will sell, transfer, mortgage, encumber or
otherwise dispose of any Transferred Assets and Assumed Liabilities, except with
Buyer's consent and Buyer shall not unreasonably withhold such consent;
(3) No DataVoN Seller will dispose of or permit to lapse any material
intangible property that is a Transferred Asset or any rights to its use;
(4) Each DataVoN Seller will use reasonable efforts to preserve the
Transferred Assets; and
(5) No DataVoN Seller will enter into, or become obligated under, any
contract, agreement, commitment or plan with respect to the Transferred Assets
or that would contractually bind Buyer subsequent to the Closing, except with
Buyer's consent and Buyer shall not unreasonably withhold such consent.
(d) Approvals and Best Efforts. Each of Buyer and the DataVoN Sellers
will use its commercially reasonable best efforts to obtain as promptly as
practicable all Approvals of any Governmental Entity or other Person required in
connection with the consummation of the transactions contemplated by this
Agreement, including, without limitation, the Approval of the assignment of the
Restricted Assets to Buyer. In addition, subject to the terms and conditions
herein provided, each of Buyer and the DataVoN Sellers covenants and agrees to
use its commercially reasonable best efforts to take, or cause to be taken, all
action or do, or cause to be done, all things reasonably necessary, proper or
appropriate to consummate and make effective the transactions contemplated
hereby and to cause the fulfillment of the parties' obligations hereunder.
(e) Bankruptcy Court Approval.
(1) The DataVoN Sellers shall use their best efforts to obtain the
Bankruptcy Court approval of the Sale Order which, among other things, (i)
grants the Sale Motion, (ii) approves and authorizes the DataVoN Sellers to
perform this Agreement and the Related Agreements and consummate the sale of the
Transferred Assets and otherwise consummate the transaction contemplated herein,
(iii) authorizes the assumption of each Assumed Contract under which any DataVoN
Seller is a party, (iv) determines that this Agreement was proposed by Buyer in
good faith and represents the highest and best offer for the Transferred Assets,
(v) determines that Buyer is a good faith purchaser under Section 363(m) of the
Bankruptcy Code and that the provisions of Section 363(n) of the Bankruptcy Code
have not been violated, (vi) authorizes the DataVoN Sellers to sell the
Transferred Assets to Buyer pursuant to this Agreement and Sections 363(f),
365(a) and 365(b) of the Bankruptcy Code, free and clear of all claims,
interests, liabilities and Liens except for those assumed by Buyer, (vii)
authorizes the DataVoN Sellers to execute, deliver, perform under, consummate
and implement this Agreement, together with all additional instruments and
documents that may be reasonably necessary or desirable to implement the
foregoing, (viii) deems properly assumed and assigned each of the Assumed
Contracts to which the DataVoN Sellers are parties, and (ix) waives the stay of
the Sale Order pursuant to Rules 6004(g) and 6006 of the Rules of Bankruptcy
Procedure, and (x) is in a form and substance acceptable to Buyer.
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(2) The DataVoN Sellers shall promptly make any filings, take all
actions, and use best efforts to obtain any and all other Approvals and Orders
necessary or appropriate for consummation of the sale of the Transferred Assets
or the assumption of the Assumed Contracts, subject to their obligations to
comply with any order of the Bankruptcy Court.
(3) In the event an appeal is taken, or a stay pending appeal is
requested, from the Sale Order, the DataVoN Sellers shall immediately notify
Buyer of such appeal or stay request and shall promptly provide to Buyer a copy
of the related notice of appeal or order of stay.
(4) Buyer shall cooperate in providing such information and evidence
as is necessary to obtain Bankruptcy Court approval of the Orders described in
this Section 6.8(g).
(5) The form of the Sale Order shall be approved by Buyer before it is
submitted to the Bankruptcy Court, which approval shall not be unreasonably
withheld or delayed.
(f) Transfer Taxes. In accordance with Section 1146(c) of the
Bankruptcy Code, the making or delivery of any instrument of transfer, including
the filing of any deed or other document of transfer to evidence, effectuate or
perfect the rights, transfers and interest contemplated by this Agreement, shall
be in contemplation of a plan or plans of reorganization to be confirmed in the
Bankruptcy Case, and as such shall be free and clear of any and all transfer
Tax, stamp Tax or similar Taxes. Such instruments transferring the Transferred
Assets to Buyer shall contain the following endorsement:
"Because this [instrument] has been authorized pursuant to Order of
the United States Bankruptcy Court for the Northern District of Texas,
Dallas Division, in contemplation of a plan of reorganization of the
Grantor, it is exempt from transfer taxes, stamp taxes or similar
taxes pursuant to 11 U.S.C. (S) 1146(c)."
6.5 Bankruptcy Filings. From and after the date hereof until the
Closing Date, the DataVoN Sellers shall deliver to Buyer (a) copies of all
pleadings, motions, notices, statements, schedules, applications, reports and
other papers that the DataVoN Sellers file in the Bankruptcy Case within a
reasonable time after filing, but with respect to any such papers that relate,
in whole or in part, to this Agreement, the sale of the Transferred Assets, or
Buyer, its constituent members or its or their agents or representatives, the
DataVoN Sellers shall use all reasonable efforts to provide such prior notice as
may be reasonable under the circumstances before the filing of such papers and
(b) copies of all pleadings, motions, notices, statements, schedules,
applications, reports and other papers filed in the Bankruptcy Case.
6.6 Turnover of Payments. After Closing, in the event that a DataVoN
Seller receives any payment or instrument of payment of any amount included in
the Transferred Assets or any other payment or amount to which the Buyer is
entitled, such DataVoN Seller shall deliver the same promptly to the Buyer (with
endorsement if necessary but otherwise in the same
14
form as received) and, until so delivered, hold the same in trust for the
Buyer's benefit and as property of the Buyer.
6.7 Corporate Name Change. The DataVoN Sellers agree no later than
ninety (90) days after the Closing to cease using the name "DataVoN," or any
derivative thereof, and hereby acknowledge and covenant to change their
respective charter documents to reflect such change.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1 DataVoN Sellers. Each DataVoN Seller represents and warrants the
following:
(a) At the Closing, it possesses, and is hereby transferring, the
Transferred Assets to Buyer free and clear of any and all Liens and claims
(subject to all liens agreed to by Buyer and Vendors or other third parties) in
accordance with, and with all of the protections afforded by, Section 363 of the
Bankruptcy Code; provided, however, that this representation is not made with
respect to any claims that the applicable Vendor has with respect to items as to
which Section 3.2(e) applies, which claims must be resolved by Buyer pursuant to
that section.
(b) It has good and marketable title to or, in the case of leased
assets and properties, valid leasehold interest in, all tangible real and
personal assets and properties constituting Transferred Assets held by it;
provided, however, that this representation is not made with respect to any
claims that the applicable Vendor has with respect to items as to which Section
3.2(e) applies, which claims must be resolved by Buyer pursuant to that section.
All of the tangible Transferred Assets have been reasonably maintained and are
in good working order and condition, ordinary wear and tear excepted. Schedule
7.1(d) sets forth the address of each location of the tangible Transferred
Assets.
(c) From the date of this Agreement to the Closing Date, there has
been no event or occurrence, individually or in the aggregate, with all such
events or occurrences that have had or is likely to have a Material Adverse
Effect or change in the Business, or in the DataVoN Seller's revenues or
prospects.
7.2 Buyer. Buyer represents and warrants the following:
(a) Buyer is a corporation, validly existing and in good standing
under the laws of its state of incorporation with all necessary corporate power
and authority to execute, deliver and perform this Agreement.
(b) The execution, delivery and performance of this Agreement and the
other Transaction Documents by Buyer have been duly and validly authorized by
the board of directors of Buyer and by all other necessary corporate action on
the part of Buyer and this Agreement and the other Transaction Documents
constitute the valid and legally binding obligation of Buyer, enforceable
against Buyer in accordance with their respective terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization,
15
moratorium, and other laws of general application now or hereafter in effect
affecting enforcement of creditors' rights generally and (ii) general principles
of equity.
(c) The execution, delivery and performance of this Agreement, the
other Transaction Documents to which Buyer is a party and the consummation of
the transactions contemplated hereby will not result in any violation or be in
conflict with or constitute, with or without notice or the passage of time and
giving of notice, a default under any provision of Buyer's articles or
certificate of incorporation or bylaws or any Order or contract to which Buyer
is a party or its respective assets or properties are bound.
(d) As of Closing, the Buyer is the owner and holder of all
obligations and liens then owed by the DataVoN Sellers to the Buyer.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated prior to the Closing
and the transactions contemplated hereby may be abandoned:
(a) by the mutual written consent of Buyer and the DataVoN Sellers;
(b) by the DataVoN Sellers, upon written notice from the DataVoN
Sellers to Buyer, if the Closing has not taken place on or prior to May 27,
2003, other than by reason of a material breach of this Agreement by the DataVoN
Sellers;
(c) by Buyer, upon written notice to the DataVoN Sellers, if the
Closing has not taken place on or prior to May 27, 2003, other than by reason of
a material breach of this Agreement by Buyer;
(d) by Buyer or the DataVoN Sellers, upon written notice to the other,
if there shall be in effect a non-appealable order of a court of competent
jurisdiction permanently prohibiting the consummation of the transactions
contemplated hereby;
(e) by the DataVoN Sellers if Buyer is in material breach of any
covenant or agreement under this Agreement, or if any representation or warranty
of Buyer is not true and correct in all material respects (except that where any
statement in a representation or warranty expressly includes a standard of
materiality, such statement shall be true and correct), in either case such that
the conditions set forth in Sections 3.2(a) and (b) would not be satisfied and
which is not curable or, if curable, is not cured within 10 calendar days after
written notice of such breach is given to Buyer by the DataVoN Sellers;
(f) by Buyer if a DataVoN Seller is in material breach of any covenant
or agreement under this Agreement, or if any representation or warranty of a
DataVoN Seller is not true and correct in all material respects (except that
where any statement in a representation or warranty expressly includes a
standard of materiality, such statement shall be true and correct), in either
case such that the conditions set forth in Sections 3.1 (a) and (b) would not be
satisfied and which is not curable or, if curable, is not cured within 10
calendar days after written notice of such breach is given to Buyer by the
DataVoN Sellers;
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(g) by Buyer or the DataVoN Sellers, if any of the following shall
occur:
(A) the Bankruptcy Case is dismissed or converted to chapter 7 of
the Bankruptcy Code or a trustee is appointed for the DataVoN Sellers;
or
(B) the Sale Order in form and substance satisfactory to Buyer
shall not have been entered by May 21, 2003;
(h) by Buyer if any of the conditions to the obligations of Buyer in
Section 3.2 are not satisfied on or before May 21, 2003.
8.2 Status of Agreement after Termination. Upon any termination of
this Agreement pursuant to Section 8.1, this Agreement shall become void and
shall have no effect; except for those obligations in Sections 8.3 and 10.4
hereof and pursuant to the Confidentiality Agreement, which shall survive the
termination of this Agreement in accordance with its terms.
(a) Fees and Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses.
8.3 Exclusive Remedy. The parties acknowledge and agree that (x) the
rights and remedies provided in this Article VIII are the exclusive rights and
remedies in the event of any breach of any representation, warranty, agreement
or covenant by Buyer and the DataVoN Sellers prior to the Closing and (y) the
representations, warranties, agreements or covenants of the parties made in this
Agreement, and any rights arising out of any breach of any such representation,
warranty, agreement or covenant, shall not survive beyond the Closing Date,
except for those covenants or agreements of the parties which by its terms
contemplates performance after the Closing Date and as set forth in Section 8.4
and Article 10, all of which shall survive the Closing Date subject to the terms
hereof.
8.4 Return of Deposit. Upon termination of this Agreement by Buyer in
accordance with Section 8.1, the Deposit, and any accrued interest, shall be
returned to Buyer, or Buyer's nominee.
ARTICLE IX
CERTAIN DEFINITIONS
As used in this Agreement, the following definitions shall apply:
9.1 "Accounts Receivable" has the meaning set forth in Section
1.1(a)(12).
9.2 Action" means any charge, claim, lawsuit, complaint, request for
investigation, report of alleged violation of law or regulation, or legal
proceeding of any nature filed with or made to any Governmental Entity or
organization having jurisdiction or authority over the bankruptcy estate of the
DataVoN Sellers, the Trustee, a DataVoN Seller, its assets, its property or its
operations, including but not limited to actions filed under Chapter 5 of the
Bankruptcy Code and objections to proofs of claim filed by any creditor.
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9.3 "Affiliate" means a Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, a specified Person.
9.4 "Agreement" means this Asset Purchase Agreement by and among Buyer
and the DataVoN Sellers, as amended or supplemented, together with all Schedules
attached hereto.
9.5 "Approval" means any approval, authorization, consent,
qualification or registration, or any waiver of any of the foregoing, required
to be obtained from, or any notice, statement or other communication required to
be filed with or delivered to, any Governmental Entity or any other Person.
9.6 "Assumed Contracts" means, subject to Section 6.5, all contracts,
purchase orders, personal property leases, security agreements, guaranties and
other documents and arrangements with customers, suppliers and others relating
primarily to the operation of the Business as specifically set forth on Schedule
6.5.
9.7 "Assumed Liabilities" has the meaning set forth in Section 2.1(a).
9.8 "Bankruptcy Case", has the meaning set forth in the Recitals.
9.9 "Bankruptcy Code" means 11 U.S.C.(S) 101 et seq., and applicable
federal rules of bankruptcy procedure thereunder.
9.10 "Bankruptcy Court" means the United States Bankruptcy Court for
the Northern District of Texas, Dallas Division.
9.11 "Business" has the meaning set forth in the Recitals.
9.12 "Business Day" means a day that is not a Saturday, Sunday or
legal holiday in Dallas, Texas.
9.13 "Closing" means the closing of the transactions contemplated by
this Agreement.
9.14 "Closing Date" means on or before Tuesday, May 27, 2003, or such
other date as may be agreed by Buyer and the DataVoN Sellers, but not later than
June 2, 2003.
9.15 "Confidentiality Agreement" means the Confidentiality Agreement
among the DataVoN Sellers and Buyer dated prior to the date hereof.
9.16 "Deposit" has the meaning set forth in Section 5.3.
9.17 "Employee Benefits Assets" means all assets of any of the DataVoN
Sellers' employee benefit plans.
9.18 "Environmental Loss" means all (A) attorneys', experts',
consultants', contractors' or accountants' fees, expenses, court costs and other
out-of-pocket expenses, (B) all judgments, liabilities, losses, damages, civil
penalties and civil fines, (C) all costs of
18
investigation, characterization, remediation, clean-up, or disposal and (D) any
other cost, loss or expense, in each case as incurred or suffered in connection
with, or resulting from, the presence, the use or disposal of any Hazardous
Substance in connection with the Business prior to the Closing Date if, and only
to the extent, resulting from or related to any third-party claim, action or
suit or governmental action, proceeding, or investigation against a DataVoN
Seller.
9.19 "Excluded Assets" has the meaning set forth in Section 1.1(b).
9.20 "Excluded Liabilities" has the meaning set forth in Section
2.1(b).
9.21 "Expenses" means reasonable attorneys' and accountants' fees and
expenses, costs of investigation and all other reasonable out-of-pocket
expenses.
9.22 "Governmental Entity" means any government or any agency, bureau,
board, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government, whether federal, state or local,
domestic or foreign.
9.23 "Hazardous Substance" means (i) substances that are defined,
listed or otherwise classified, or which may come to be so defined, listed or
otherwise classified, pursuant to any applicable statutes, laws, rules or
regulations on or prior to the first anniversary of the Closing Date as
"hazardous substances," "hazardous materials," "hazardous wastes" or "toxic
substances," or any other formulation intended to define, list or classify
substances by reason of deleterious properties such as ignitibility,
corrosivity, reactivity, radioactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import, (ii) any
oil, petroleum or petroleum derived substance, (iii) any drilling fluids,
produced waters and other wastes associated with the exploration, development,
or production of crude oil, natural gas or geothermal resources, (iv) any
flammable substances or explosives, (v) any radioactive materials, (vi) asbestos
in any form, (vii) urea formaldehyde foam insulation, (viii) electrical
equipment which contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty parts per million, (ix) pesticides
or (x) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority or which may or
could pose a hazard to the health and safety of any persons.
9.24 "Hired Employees" means those individuals who are employed by the
DataVoN Sellers immediately prior to the Closing Date and who are offered
employment by Buyer on such date.
9.25 "Laws" means any law, statute, regulation, rule, ordinance or
Order of a Governmental Entity.
9.26 "Lease and License Agreements" has the meaning set forth in
Section 3.2(i).
9.27 "Lien" means any mortgage, pledge, deed of trust, hypothecation,
lien security interest, encumbrance, conditional sale or other title retention
or security agreement or any other similar restriction, claim or right of
others.
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9.28 "Litigation Liabilities" means all obligations and liabilities
arising in connection with any litigation matters, including, without
limitation, actions, proceedings, settlements, appeals and other similar
matters, relating to the operations of the Business prior to the Closing Date.
9.29 "Material Adverse Effect" means an event or occurrence,
individually or in the aggregate with all such events or occurrences, that have
had or is likely to have a material adverse effect or change on the operations,
revenue or prospects of Seller's Business (taken as a whole) or to the
Transferred Assets.
9.30 "Order" means any decree, injunction, judgment, order, ruling,
writ, quasi-judicial decision or award or administrative decision or award of
any federal, state, local, foreign or other court, arbitrator, tribunal,
administrative agency or Governmental Entity to which any Person is a party or
that is or may be binding on any Person or its securities, assets or business.
9.31 "Person" means an association, a corporation, an individual, a
partnership, a trust or any other entity or organization, including a
Governmental Entity.
9.32 "Purchase Price" means the sum of:
a) $1,080,000 to be paid in cash at Closing by wire transfer to an
account designated by the DataVoN Sellers; plus
b) An amount in cash equal to the principal, accrued interest and all
other sums due on indebtedness of the DataVoN Sellers to Xxx Xxxxxx allowed as a
secured claim in the Bankruptcy Case, payable in cash at Closing, to be held by
the DataVoN Sellers until such time as the Bankruptcy Court allows the secured
claim of Xxx Xxxxxx, at which time any part of this sum not necessary to pay the
allowed claim of Xxx Xxxxxx shall be refunded to Buyer; plus
c) To the extent a satisfactory waiver or assumption document is not
received by the DataVoN Sellers at Closing, an amount in cash equal to the
principal, accrued interest and all other sums due on indebtedness of the
DataVoN Sellers to Xxx Xxxxxxx allowed as a secured claim in the Bankruptcy
Case, payable in cash at Closing, to be held by the DataVoN Sellers until such
time as the Bankruptcy Court allows the secured claim of Xxx Xxxxxxx, at which
time any part of this sum not necessary to pay the allowed claim of Xxx Xxxxxxx
shall be refunded to Buyer;
d) A liability assumption agreement, security agreement and UCC-1
establishing and securing the obligations of Buyer in accordance with Section
2.1 (a) and 2.1(b) of this Agreement; plus
e) A promissory note (in form reasonably satisfactory to the DataVoN
Sellers) payable by Buyer to the order of the Trustee in the original principal
amount of $1,500,000, bearing interest at the rate of 10% per annum and payable
in seven equal monthly payments of $221,487.87 commencing one month following
the Closing Date, such note to be secured by a perfected first priority security
interest in the Equipment which cannot be subordinated without the consent of
the Trustee; plus
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f) To the extent the DataVoN Sellers contract(s) with Focal
Communications Inc. ("Focal") are not assumed at Closing and assigned to Buyer,
and further to the extent that the Focal proof of claim for approximately $8.3
million is not waived in full at or prior to Closing, then Buyer shall pay at
Closing to the DataVoN Sellers $250,000 in cash by wire transfer to an account
designated by the DataVoN Sellers and a promissory note in the original
principal amount of $200,000, bearing no interest and payable in twelve equal
monthly installments commencing one month following the Closing Date provided
that the DataVoN Sellers shall segregate all amounts paid pursuant to this
Section 9.32(e) from all other funds and shall pay and assign such amounts to
Focal at such time as Focal's assumption of the Focal contract(s) is approved by
the bankruptcy court having jurisdiction over Focal's Chapter 11 bankruptcy
case; plus
g) A promissory note (in form reasonably satisfactory to the DataVoN
Sellers) payable by Buyer to the order of the DataVoN Sellers in the original
principal amount of $1,279,262.37 or in any event an offsetting amount exactly
equivalent to all principal, interest and charges owed in connection with the
pre-petition obligations owed by the DataVoN Sellers to Buyer at Closing,
bearing interest at the rate of 10% per annum and payable on the date that a
final, unappealable Order allowing or disallowing the pre-petition claim of
Buyer in the Bankruptcy Case is entered; provided, however, that the original
principal amount of such promissory note shall be reduced, effective as of the
Closing Date, in an amount equal to that portion of the pre-petition claim of
Buyer which becomes an allowed claim in the Bankruptcy case and further provided
that Buyer shall deliver a subordination agreement at Closing subordinating any
such allowed claim to the allowed claims of all other creditors; plus
9.33 "Restricted Assets" means those Transferred Assets the transfer
of which to Buyer requires the Approval of a third-party (including, without
limitation, consents or assignments to be obtained from those parties listed on
Schedule 1.1(b)) and which Approval has not been obtained as of the Closing
Date.
9.34 "Sale Hearing" has the meaning set forth in Section 6.6(e).
9.35 "Sale Motion" has the meaning set forth in the Recitals.
9.36 "Sale Order" means an Order of the Bankruptcy Court which, among
other things, (i) grants the Sale Motion, (ii) approves and authorizes the
DataVoN Sellers to perform this Agreement and the Related Agreements and
consummate the sale of the Transferred Assets and otherwise consummate the
transaction contemplated herein and (iii) authorizes the assumption of each
Assumed Contract under which any DataVoN Seller is a party; (iv) determines that
this Agreement was proposed by Buyer in good faith and represents the highest
and best offer for the Transferred Assets, (v) determines that Buyer is a good
faith purchaser under Section 363(m) of the Bankruptcy Code and that the
provisions of Section 363(n) of the Bankruptcy Code have not been violated, (vi)
authorizes the DataVoN Sellers to sell the Transferred Assets to Buyer pursuant
to this Agreement and Sections 363(f), 365(a) and 365(b) of the Bankruptcy Code,
free and clear of all claims, interests, liabilities and Liens except for those
assumed by Buyer, (vii) authorizes the DataVoN Sellers to execute, deliver,
perform under, consummate and implement this Agreement, together with all
additional instruments and documents that may be reasonably necessary or
desirable to implement the foregoing, (viii)
21
deems properly assumed and assigned each of the Assumed Contracts to which the
DataVoN Sellers are parties, and (ix) waives the stay of the Sale Order pursuant
to Rules 6004(g) and 6006 of the Rules of Bankruptcy Procedure.
9.37 "Tax" means any federal, state, local or foreign income, gross
receipts, property, sales, use, license, excise, employment, payroll,
withholding or minimum tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge of any kind whatsoever.
9.38 "Tax Assets" means all Tax related assets of or relating to the
Business for any period (or portion thereof) ending on or prior to the Closing
Date which are or may become available to the DataVoN Sellers, including but not
limited to all net operating losses or Tax refunds.
9.39 "Tax Liabilities" means all liability for Taxes relating to the
Business for any period (or portion thereof) ending on or prior to the Closing
Date which are or may become payable in connection with the Business.
9.40 "Transaction Documents" has the meaning set forth in Section
7.1(b).
9.41 "Transferred Assets" has the meaning set forth in Section 1.1.
9.42 "Transferred Intellectual Property Rights" means has the meaning
set forth in Section 1.1(a)(10).
9.43 "Trustee" means any Trustee appointed by the Bankruptcy Court
either under a confirmed plan of reorganization or pursuant to applicable
provisions of the Bankruptcy Code.
9.44 "Vendors" has the meaning set forth in Section 3.2(h).
ARTICLE X
MISCELLANEOUS
10.1 Amendments; Waivers. This Agreement and any Schedule attached
hereto may be amended only by agreement in writing of Buyer and the DataVoN
Sellers.
10.2 Governing Law. This Agreement and the legal relations between the
parties shall be governed by and construed in accordance with the laws of the
State of Texas applicable to contracts made and performed in such State and
without regard to conflicts of law doctrines, except to the extent that certain
matters are preempted by federal law or are governed by the law of the
jurisdiction of incorporation or formation of the respective parties.
10.3 No Assignment. Neither this Agreement nor any right or obligation
hereunder is assignable. Notwithstanding the foregoing Buyer may (a) assign any
or all of its rights and interests hereunder to one or more of its Affiliates
and (b) designate one or more of its Affiliates to perform its obligations
hereunder (in any or all of which cases Buyer, as the case may be, nonetheless
shall remain responsible for the performance of all of its obligations
22
hereunder); provided that such assignment or designation shall not diminish or
impair the rights of the DataVoN Sellers hereunder.
10.4 Expenses. Except as provided for in Article VIII, each party
shall pay its own expenses incident to the negotiation, preparation and
performance of this Agreement and the transactions contemplated hereby, and
Buyer shall pay all transfer taxes, if any, all sales, use and other similar
taxes, if any, imposed on or in connection with the transfer of the Transferred
Assets to, and the assumption of the Assumed Liabilities by, Buyer pursuant to
this Agreement or on the use thereof by Buyer hereafter.
10.5 Parties in Interest. This Agreement shall be binding upon and
inure to the benefit of each party, and nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement. Nothing in this
Agreement is intended to relieve or discharge the obligation of any third person
to, or to confer any right of subrogation or action over against, any party to
this Agreement.
10.6 Notices. Any notice, consent, waiver and other communication
hereunder must be in writing and shall be deemed to be duly given when (a)
delivered in person, (b) transmitted by confirmed telefax or facsimile or (c)
received if sent mailed by certified or registered mail, postage prepaid, return
receipt requested, as follows:
If to the DataVoN Sellers, addressed to:
DataVoN, Inc.
0000 Xxxx Xxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
With a copy to:
Xxxxxx & Xxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Fine, Esq.
23
If to Buyer, addressed to:
Transcom Communications, Inc.
0000 X. Xxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Telecopy: 000-000-0000
Attention: Xxxxx Xxxxxxxx
With a copy to:
XxXxxxx, Xxxxxxxx & Xxxxxxxx, P.C.
0000 Xxxxxxx Xxxxx
000 X. Xxxxx
Xxxxxx, Xxxxx 00000
Telecopy: 214-954-6868
Attention: J. Xxxx Xxxxxxxxxx, Esq.
or to such other address or to such other person as either party shall have last
designated by such notice to the other party.
10.7 Severability. If any provision of this Agreement is determined to
be invalid, illegal or unenforceable by any court of competent jurisdiction or
other Governmental Entity, the remaining provisions of this Agreement shall
remain in full force and effect.
10.8 Headings. The descriptive headings of the articles, sections and
subsections of this Agreement are for convenience only and do not constitute a
part of this Agreement.
10.9 Counterparts. This Agreement and any amendment hereto or any
other agreement (or document) delivered pursuant hereto may be executed in one
or more counterparts and by different parties in separate counterparts. All of
such counterparts shall constitute one and the same agreement (or other
document) and shall become effective (unless otherwise therein provided) when
one or more counterparts have been signed by each party and delivered to the
other party. Facsimile signatures shall constitute original signatures for all
purposes of this Agreement.
10.10 Entire Agreement. This Agreement supersedes all prior agreements
(other than the Confidentiality Agreement) between the parties with respect to
its subject matter and constitutes (along with Transaction Documents) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
24
IN WITNESS WHEREOF, each of DTVN, DataVoN, Zydeco, VI and Buyer has
caused this Agreement to be duly executed on its behalf as of the date first
above written.
DTVN HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CRO
DATAVON, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CRO
ZYDECO EXPLORATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CRO
VIDEO INTELLIGENCE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: CRO
TRANSCOM COMMUNICATIONS, INC.
By:
------------------------------------
Name: Xxxxx Xxxxxxxx
Title:
25
IN WITNESS WHEREOF, each of DTVN, DataVoN, Zydeco, VI and Buyer has
caused this Agreement to be duly executed on its behalf as of the date first
above written.
DTVN HOLDINGS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
DATAVON, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ZYDECO EXPLORATION, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
VIDEO INTELLIGENCE, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TRANSCOM COMMUNICATIONS, INC.
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chief Executive Officer
