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EXHIBIT 99.2
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ASSET PURCHASE AGREEMENT
AMONG
SPECTEL GROUP LTD.
AND
MULTILINK, INC.
(DELAWARE)
AND
SPECTEL LIMITED
AND
PICTURETEL CORPORATION
AND
MULTILINK, INC.
(MASSACHUSETTS)
NOVEMBER 27, 2000
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TABLE OF CONTENTS
PAGE
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SUMMARY OF TRANSACTION 1
ARTICLE I - SALE OF ASSETS AND TERMS OF PAYMENT 1
1.01 Assets Being Sold (the "Purchased Assets") 1
(a) Real Property Leases 1
(b) Furniture, Machinery and Equipment 1
(c) Inventories 1
(d) Contracts and Commitments 1
(e) Books and Records 2
(f) Accounts and Notes Receivable 2
(g) Deposits, Credits and Prepaid Expenses 2
(h) Cash 2
(i) Other Assets 2
(A) Proprietary Rights 2
(i) Patents, Trademarks and Related Assets 2
(ii) Technical Know-how 2
(iii) "MultiLink," "IMM" and "Internet Meeting
Manager" 2
(iv) Governmental Licenses, Permits and Authorizations 3
(v) Licenses 3
(vi) Related Agreements 3
(B) Intangible Assets 3
1.02 Retained Assets 3
1.03 Assumed Liabilities 3
(a) Accounts Payable 3
(b) Uncompleted Contracts 3
(c) Accrued Expenses and Current Liabilities 3
1.04 Retained Liabilities 3
1.05 Purchase Price 4
(a) Cash Payment 4
(b) Assumption of Obligations 4
(c) Parent Stock 4
1.06 Purchase Price Adjustments 5
(a) Balance Sheet and Statement of Receivables 5
(b) Review by Seller 5
(c) Base-Line Net Receivables 5
(d) Amount of Receivables Adjustment 6
(e) Payment of Receivables Adjustment 6
1.07 Allocation of the Purchase Price 6
1.08 Absolute Sale 6
1.09 Other Contracts 6
1.10 Bulk Sales Laws 7
1.11 UK Assets Excluded 7
ARTICLE II - UNITED KINGDOM ASSETS 7
ARTICLE III - REPRESENTATIONS AND WARRANTIES 7
3.01 Organization and Good Standing 7
3.02 Authorization, Compliance with Other Instruments and Law 7
3.03 Financial Statements 8
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3.04 Operation of Seller in the Ordinary Course 9
3.05 Tax Matters 9
3.06 Material Contracts and Commitments 9
3.07 Licenses, Permits and Authorizations 9
3.08 Title to Purchased Assets 10
3.09 Proprietary Rights 10
3.10 Employee Benefit Plans 10
3.11 Litigation and Other Claims 12
3.12 No Material Adverse Change 12
3.13 Sufficiency of Purchased Assets 12
3.14 Compliance with Laws 13
3.15 Insurance 13
3.16 Accounts Receivable 13
3.17 Real Property Leases 13
3.18 Labor Matters 13
3.19 Condition of Purchased Assets 14
3.20 Environmental Matters 14
3.21 Investment Representations 15
3.22 Full Disclosure 16
ARTICLE IV - REPRESENTATIONS AND WARRANTIES 16
4.01 Organization 16
4.02 Due Authorization 16
4.03 Ordinary Shares 17
ARTICLE V - COVENANTS PENDING CLOSING 17
5.01 Conduct of Business of Seller Prior to the Closing 17
5.02 Access to Information 18
5.03 Consents 18
5.04 Public Announcements 18
5.05 Confidentiality 18
5.06 Xxxx-Xxxxx-Xxxxxx 19
5.07 No-Shop 20
ARTICLE VI - CLOSING CONDITIONS 20
6.01 Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby 20
(a) No Order, Decree or Injunction 20
(b) HSR Waiting Period Expired 20
6.02 Conditions to the Obligations of Seller to Effect the
Transactions Contemplated Hereby 20
(a) Covenants Performed; Representations and
Warranties True 20
(b) Opinion Letter 20
(c) Fairness Opinion 21
(d) Bank Consent 21
6.03 Conditions to the Obligations of Buyer to Effect the
Transactions Contemplated Hereby 21
(a) Covenants Performed; Representations and
Warranties True 22
(b) No Material Adverse Change 22
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(c) Opinion Letter 22
(d) Consents Obtained 23
(e) Funding 23
(f) Name Change 23
ARTICLE VII - THE CLOSING 24
7.01 Time and Place of Closing 24
7.02 Closing 24
ARTICLE VIII - SUCCESSOR EMPLOYER 24
8.01 Employment with Buyer 24
8.02 Accrued Vacation Liability 25
8.03 Benefits 25
8.04 Third Parties 25
ARTICLE IX - WORKERS' COMPENSATION AND PRODUCT LIABILITY RESPONSIBILITY 25
9.01 Workers' Compensation 25
9.02 Product Liability and Warranty Claims 25
9.03 Responsibility for Prior Claims 26
ARTICLE X - POST-CLOSING COVENANTS 26
10.01 Expenses 26
10.02 Further Assurances 26
10.03 Commissions and Fees 26
10.04 Sales, Transfer and Use Taxes 27
10.05 Nondisclosure; Noncompetition 27
10.06 Indemnification 28
(a) By Seller and PictureTel 28
(b) By Buyer and Spectel Ireland 28
10.07 Defense of Claims 29
10.08 Transition Services 30
ARTICLE XI - RIGHTS OF ORDINARY SHARES 32
11.01 Registration Rights 32
ARTICLE XII - MISCELLANEOUS 33
12.01 Binding Effect 33
12.02 No Assignment 33
12.03 Counterparts 34
12.04 Governing Law 34
12.05 Suits in Massachusetts 34
12.06 Survival 34
12.07 Notices 34
(a) To Parent, Buyer or Spectel Ireland 35
(b) To Seller or PictureTel 35
12.08 Amendment and Modification 35
12.09 Waiver of Compliance 35
12.10 Interpretation 36
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12.11 Entire Agreement 36
12.12 Guarantee by PictureTel 36
12.13 Guarantee by Parent 36
12.14 Specific Performance 36
12.15 Severability of Covenants 37
ARTICLE XIII - TERMINATION AND ABANDONMENT 37
13.01 Termination 37
13.02 Procedure and Effect of Termination 38
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SCHEDULES
Page/Section
Schedule Description Reference
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1.01(a) Real Property Leases 1 [ss.1.01(a)]
1.01(b) Furniture, Machinery and Equipment 1 [ss.1.01(b)]
1.01(d) Contracts and Commitments 2 [ss.1.01(d)]
1.01(g) Governmental Licenses,
Permits and Authorizations 2 [ss.1.01(g)]
1.01(A) Proprietary Rights 3 [ss.1.01(A)]
1.02 Retained Assets 3 [ss.1.02]
3.02 Compliance Exceptions 8 [ss.3.02]
3.03 Financial Statements 9 [ss.3.03]
3.05 Tax Matters 9 [ss.3.05]
3.07 Licenses, Permits and 10 [ss.3.07]
Authorizations
3.08 Title Exceptions 10 [ss.3.08]
3.10 Employee Benefit Plans 10 [ss.3.10]
3.11 Litigation and Other Claims 12 [ss.3.11]
3.15 Insurance 13 [ss.3.15]
3.16 Accounts Receivable 14 [ss.3.16]
3.18 Labor Matters 14 [ss.3.18]
3.20 Environmental Matters 14 [ss.3.20]
8.01 Transferred Employees 25 [ss.8.01]
10.03 Commissions and Fees 27 [10.03]
EXHIBITS
Page/Section
Exhibit Description Reference
------- ----------- ------------
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A Form of Assignment and Assumption 4 [ss.1.05(b)]
of Liabilities Agreement
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made as of November 27, 2000 among SPECTEL
GROUP LTD., an Irish corporation ("Parent"), MULTILINK, INC., a Delaware
corporation ("Buyer"), SPECTEL LIMITED, an Irish corporation ("Spectel
Ireland"), PICTURETEL CORPORATION, a Delaware corporation ("PictureTel") and
MULTILINK, INC., a Massachusetts corporation and wholly-owned subsidiary of
PictureTel ("Seller").
SUMMARY OF TRANSACTION
Seller wishes to sell and Buyer and Spectel Ireland wish to
purchase the business and assets of Seller, subject to certain of the
liabilities of Seller.
To effect such transaction and in consideration of the mutual
covenants, representations, warranties and agreements hereinafter set forth, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
SALE OF ASSETS AND TERMS OF PAYMENT
1.01 ASSETS BEING SOLD (THE "PURCHASED ASSETS"). Seller
agrees to sell and Buyer agrees to purchase, at the Closing (as defined in
Section 7.01 hereof), all of the assets of Seller as they shall exist on the
Closing Date (as defined in Section 7.01 hereof), except for the Retained Assets
(as defined in Section 1.02 hereof), including without limitation the following
assets:
(a) REAL PROPERTY LEASES. All of the right, title and
interest of Seller in, to and under the leases (the "Real Property
Leases") covering Seller's leased premises used in connection with its
operations as more fully described in SCHEDULE 1.01(A) hereto;
(b) FURNITURE, MACHINERY AND EQUIPMENT. All the furniture,
machinery, transportation vehicles, equipment, fixtures and leasehold
improvements of Seller (i) located within Seller's facility at 000
Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx, and (ii) located elsewhere and
listed in SCHEDULE 1.01(B) hereto, which shall be updated to include
all similar assets of Seller acquired hereafter prior to the Closing;
(c) INVENTORIES. All inventories of Seller of any kind,
including, but not limited to, finished goods (whether manufactured or
purchased), work-in-process, supplies and raw materials;
(d) CONTRACTS AND COMMITMENTS. Subject to the provisions of
Section 1.09 hereof, all of the right, title and interest of Seller in,
to and under all pending and executory contracts, agreements,
commitments and understandings of Seller, including, without
limitation, those with respect to (w) confidentiality of information
relating to the business of Seller supplied to potential purchasers of
the business of Seller, (x) the purchase of materials, supplies or
services, (y) the sale of products, and (z) the Material Contracts as
defined in Section 3.06, which Material Contracts are listed in
SCHEDULE 1.01(D) hereto;
(e) BOOKS AND RECORDS. All books and records, including all
sales and credit records, advertising and sales material, literature,
customer lists, financial records and personnel and payroll records of
Seller, but excluding the corporate books and records of the Seller;
(f) ACCOUNTS AND NOTES RECEIVABLE. All of Seller's accounts
receivable and notes receivable;
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(g) DEPOSITS, CREDITS AND PREPAID EXPENSES. To the
extent assignable, all of Seller's deposits, credits, prepaid expenses
and other current assets;
(h) CASH. All cash, if any, and bank accounts of Seller;
and
(i) OTHER ASSETS. All other assets, properties, rights and
businesses of every kind and nature owned or held by Seller or in which
Seller has an interest on the Closing Date, known or unknown, fixed or
unfixed, accrued, absolute, contingent or otherwise, whether or not
specifically referred to in this Agreement, other than the Retained
Assets.
Seller agrees to sell and Spectel Ireland agrees to purchase,
at the Closing, the following assets (the "Spectel Ireland Purchased Assets"),
which assets shall, for purposes of this Agreement and unless specifically
referenced separately herein as "Spectel Ireland Purchased Assets," be included
within the definition of "Purchased Assets:"
(A) PROPRIETARY RIGHTS.
(i) PATENTS, TRADEMARKS AND RELATED ASSETS. All
United States and foreign patents, trademarks, service marks, domain
names, Internet web sites, software and goodwill appurtenant thereto,
and applications therefor, copyrights, tradenames, brand names and
licenses ("Proprietary Rights") of Seller, including those listed in
SCHEDULE 1.01(A) hereto;
(ii) TECHNICAL KNOW-HOW. All proprietary and other
technical information and technology ("Technical Know-how") owned by
Seller (including research and development in progress), including
inventions and discoveries, improvements, processes, know-how,
formulae, drawings, specifications, production data, trade secrets,
plans, files, notebooks and other records and documents pertaining to
research and development;
(iii) "MULTILINK," "IMM" AND "INTERNET MEETING
MANAGER". All right, title and interest of Seller in and to the names
"MultiLink," "IMM," "Internet Meeting Manager," related domain names,
goodwill and any variations thereof;
(iv) GOVERNMENTAL LICENSES, PERMITS AND
AUTHORIZATIONS. To the extent assignable, all governmental licenses,
permits and authorizations, if any, a complete list of which is set
forth in SCHEDULE 1.01(G) hereto;
(v) LICENSES. All right, title and interest of
Seller in, to and under any licenses of any Proprietary Rights or
Technical Know-how owned by any third party; and
(vi) RELATED AGREEMENTS. All secrecy or other
agreements of Seller with others, including employees, relating to
disclosure, assignment or patenting of any Proprietary Rights or
Technical Know-how; and
(B) INTANGIBLE ASSETS. The business of Seller as a going
concern and the goodwill thereof.
1.02 RETAINED ASSETS. Notwithstanding the foregoing, the
Purchased Assets shall not include the assets listed in SCHEDULE 1.02 hereof
(collectively, the "Retained Assets").
1.03 ASSUMED LIABILITIES. Buyer agrees to assume, perform and
discharge those of Seller's liabilities (the "Assumed Liabilities") which shall
appear on the Closing Balance Sheet (as defined in Section 1.06 hereof) except
for the Retained Liabilities (as defined in Section 1.04 hereof), which shall
include:
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(a) ACCOUNTS PAYABLE. All of Seller's accounts payable to the
extent reflected in the Closing Balance Sheet; and
(b) UNCOMPLETED CONTRACTS. All of Seller's obligations with
respect to the uncompleted contracts and commitments accruing after the
Closing being purchased as Purchased Assets; and
(c) ACCRUED EXPENSES AND CURRENT LIABILITIES. All of Seller's
accrued expenses and other current liabilities to the extent reflected
in the Closing Balance Sheet.
Buyer shall not assume any liabilities or obligations of
Seller except those amounts specifically identified as liabilities in the
Closing Balance Sheet or specifically assumed by Buyer pursuant to the
provisions of this Section 1.03, and Seller and PictureTel jointly and severally
agree to indemnify and hold harmless Buyer with respect to any such non-assumed
liabilities and obligations in the manner provided in Section 10.06 hereof.
1.04 RETAINED LIABILITIES. Notwithstanding the foregoing,
even if generally included under Section 1.03 above, the Assumed Liabilities
shall not include (i) provisions for intercompany balances between Seller and
PictureTel, tax liabilities of Seller arising prior to the Closing Date and
legal costs without supporting invoices, which shall be set forth on the Closing
Balance Sheet, and (ii) any liabilities or obligations arising out of, resulting
from, or relating to claims, whether founded upon negligence, breach of
warranty, strict liability in tort or any other similar legal theory, seeking
compensation or recovery for or relating to injury to person or damage to
property arising out of or related to a defect or alleged defect of, or
otherwise related to, any product sold by Seller or any predecessor of Seller on
or prior to the Closing Date; and (iii) any liabilities or obligations arising
out of, resulting from, or relating to claims of infringement or other
misappropriation of intellectual property rights of third parties with respect
to the manufacture, use and sale of products by Seller or any predecessor of
Seller on or prior to the Closing Date; and (iv) any liabilities or obligations
arising out of, resulting from or relating to any litigation, proceedings,
actions, arbitrations, claims or investigations at law or in equity or by or
before any governmental agency pending against Seller as of the Closing Date;
and (v) Environmental Claims (as defined in Section 3.20); and (vi) any
liabilities or obligations of Seller, or any consolidated group of which Seller
is a member, for any foreign, Federal, state or local income, franchise, gross
receipts, property, sales, use or value added taxes or any interest, additions
to tax or penalties thereon, accrued for or applicable to Seller on or prior to
the Closing Date; and (vii) any unknown, undisclosed or contingent liabilities
or any other liabilities not specifically identified and provided for in the
Closing Balance Sheet (collectively, the "Retained Liabilities").
1.05 PURCHASE PRICE.
(a) CASH PAYMENT. Spectel Ireland, in consideration for the
purchase of the Spectel Ireland Purchased Assets, pursuant to this Agreement,
agrees to deliver to PictureTel, as agent for Seller, at the Closing cash in the
amount of US$19,400,000, and Buyer, in consideration for the purchase of the
Purchased Assets being sold, exclusive of the Spectel Ireland Purchased Assets,
pursuant to this Agreement, agrees to deliver to PictureTel, as agent for
Seller, at the Closing cash in the amount of US$6,500,000, both payments in
immediately available Federal Funds by wire transfer to the bank account of
Seller designated by Seller at the Closing, subject to the Receivables
Adjustment as contemplated by Section 1.06 hereof;
(b) ASSUMPTION OF OBLIGATIONS. At the Closing, Buyer shall
deliver to Seller an instrument in the form of EXHIBIT A hereto by which Buyer
shall assume and agree to perform and discharge the Assumed Liabilities; and
(c) PARENT STOCK. As soon as practical after audited
financial statements of Seller are available for calendar year 2000, Buyer shall
deliver to PictureTel, as agent for Seller, ordinary shares of Parent ("Ordinary
Shares") having an aggregate deemed valuation of up to US$4,000,000 based upon
the price per share (computed from Irish pounds into U.S. dollars based on the
exchange rate as of the Closing Date) in the private placement of Ordinary
Shares most recently completed prior to or at the Closing by Parent (the
"Private
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Placement"). The value of the shares Seller shall receive shall be based
on the revenues of Seller for the calendar year 2000 as audited by
independent certified public accountants in accordance with generally accepted
accounting principles applied on a basis consistent with past practice and shall
be determined in accordance with the following table:
------------------------------------------------------------ ---------------------------------------------------------
If Year 2000 Audited Revenues Are: Value of Spectel Shares Payable Will Be:
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$26 million or higher $4 million
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At least $25 million, but less than $26 million $3 million
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At least $24 million, but less than $25 million $2 million
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At least $23 million, but less than $24 million $1 million
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Less than $23 million None
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The number of shares Seller shall receive shall be computed by dividing the
respective value of Ordinary Shares to be delivered by the purchase price per
share paid by the investors in the Private Placement.
1.06 PURCHASE PRICE ADJUSTMENTS.
(a) BALANCE SHEET AND STATEMENT OF RECEIVABLES. Promptly
after the Closing, Buyer shall prepare a balance sheet (the "Closing Balance
Sheet") stating the net asset value of the Purchased Assets and the Assumed
Liabilities and including the net receivables (excluding intercompany balances
and bad debt reserves) of the Seller as of the close of business on the Closing
Date (the "Closing Net Receivables"). As soon as reasonably possible after the
Closing (and in any event no later than 45 days after the Closing Date), the
Buyer will deliver to Seller the Closing Balance Sheet. The Closing Balance
Sheet shall be prepared and the Closing Net Receivables shall be calculated in
conformity with the method used in the preparation of Exhibit A attached to the
Letter of Intent dated October 3, 2000 (the "Pro Forma Balance Sheet") and
generally accepted accounting principles ("GAAP") which shall be applied
consistently with the past practices of Seller.
(b) REVIEW BY SELLER. Following receipt of the Closing
Balance Sheet, Seller will be afforded a period of 30 days to review the Closing
Balance Sheet, during which period Seller and its advisors shall have the right
to inspect the work papers generated by Buyer in preparation of the Closing
Balance Sheet. At or before the end of such 30-day period, Seller will either
(i) accept the Closing Balance Sheet in its entirety, in which case the Closing
Net Receivables will be as stated in the Closing Balance Sheet, or (ii) deliver
to Buyer written notice and a written explanation of those items in the Closing
Balance Sheet which Seller disputes, in which case the items identified by
Seller shall be deemed to be in dispute. Upon delivery by Seller of such notice
of dispute, the appropriate party shall make payment of the amount of the
Receivables Adjustment (as defined below) which is not in dispute. Within a
further period of 30 days from the end of the aforementioned review period, the
parties and their accountants will attempt to resolve in good faith any disputed
items. Failing such resolution, the unresolved disputed items will be referred
for final binding resolution to Ernst & Young, a nationally-recognized firm of
certified public accountants. In such event the Closing Net Receivables will be
deemed to be as determined by such firm in accordance with the aforementioned
accounting principles within 30 days of such reference. The decision of such
firm will be nonappealable and incontestable by the parties and will not be
subject to collateral attack for any reason.
(c) BASE-LINE NET RECEIVABLES. For purposes hereof, the
Base-Line Net Receivables of Seller will be an amount equal to the net
receivables as at August 22, 2000.
(d) AMOUNT OF RECEIVABLES ADJUSTMENT. If the Closing Net
Receivables is less than US$250,000 more or less than the Base-Line Net
Receivables, then the Receivables Adjustment will equal zero. If the Closing Net
Receivables is less than US$250,000 less than the Base-Line Net Receivables,
then the Receivables Adjustment will be a negative amount equal to the amount by
which the Closing Net Receivables is less than the
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Base-Line Net Receivables. If the Closing Net Receivables is more than
US$250,000 more than the Base-Line Net Receivables, then the Receivables
Adjustment will be a positive amount equal to the amount by which the Closing
Net Receivables is more than the Base-Line Net Receivables.
(e) PAYMENT OF RECEIVABLES ADJUSTMENT. If the Receivables
Adjustment is a negative amount, then Seller will pay Buyer the absolute value
of the amount of the Receivables Adjustment, such payment to be made within five
business days after the final determination of the amount of the Receivables
Adjustment or at the option of Buyer, if it has been determined that Buyer has
an obligation to deliver Ordinary Shares to Seller pursuant to Section 1.05(c),
the Purchase Price shall be reduced by such negative amount by decreasing the
number of Ordinary Shares to be delivered to Seller. If the Receivables
Adjustment is a positive amount, then Buyer will pay PictureTel, as agent for
Seller, the absolute value of the amount of the Receivables Adjustment, such
payment to be made within five business days after the final determination of
the amount of the Receivables Adjustment.
1.07 ALLOCATION OF THE PURCHASE PRICE. As promptly as
possible after the Closing (and in any event no later than 30 days after the
Closing Date), Seller and Buyer shall agree in writing to an allocation of the
Purchase Price for the Purchased Assets, which allocation the parties shall
adhere to for the purposes of all Federal, state and local tax returns filed by
them subsequent to the Closing, including the determination by Seller of taxable
gain or loss on the sale of the Purchased Assets hereunder and the determination
by Buyer of its tax basis with respect to the Purchased Assets.
1.08 ABSOLUTE SALE. Seller agrees that the sale, conveyance,
transfer and delivery of the Purchased Assets to Buyer and Spectel Ireland shall
be free and clear of all title defects, liabilities, obligations, liens,
encumbrances, charges and claims of any kind, except any liabilities and
obligations expressly assumed by Buyer pursuant to Section 1.03 hereof.
1.09 OTHER CONTRACTS. This Agreement shall not constitute an
agreement to assign or sublicense, as the case may be, any contracts, leases,
licenses, agreements or arrangements (for purposes of this Section 1.09
collectively called "contracts") if such attempted assignment or sublicense,
without the consent of the other party thereto, is not permitted as a matter of
law or in accordance with the terms of such contracts or would constitute a
breach of such contracts or would in any way impair the rights of Seller or
Buyer thereunder. Seller will use its best efforts to obtain, or will assist
Buyer to obtain, such consents as may be necessary or appropriate to vest in
Buyer all of Seller's right, title and interest in all such contracts. If such
consent is not obtained or if an assignment, attempted assignment or sublicense
is not so permitted or would be ineffective or would impair Buyer's rights
thereunder, Seller will cooperate with Buyer in any reasonable arrangement
designed to provide for Buyer the benefits under any such contracts.
1.10 BULK SALES LAWS. Seller and Buyer hereby waive
compliance with the provisions of any applicable bulk sales laws; PROVIDED,
HOWEVER, that Seller agrees to pay and discharge when due or to contest or
litigate all claims of creditors which are asserted against Buyer or the
Purchased Assets by reason of such noncompliance, to indemnify, defend and hold
harmless Buyer from and against any and all such claims in the manner provided
in Section 10.06 hereof, and to take promptly all necessary action to remove any
lien or encumbrance which is placed on the Purchased Assets by reason of such
noncompliance.
1.11 UK ASSETS EXCLUDED. Notwithstanding any language herein
to the contrary, the Purchased Assets shall not include the business and assets
of Seller located in the United Kingdom, pursuant to Article II hereof.
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ARTICLE II
UNITED KINGDOM ASSETS
Seller agrees to sell and Buyer agrees to cause its affiliate in the
United Kingdom to purchase, as soon as practicable after the Closing, all of the
assets of Seller located in the United Kingdom for US$100,000. The parties shall
use their best efforts to document and effect such sale as soon as practicable
after the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND PICTURETEL
PictureTel and Seller jointly and severally represent and
warrant to, and covenant with, Buyer and Spectel Ireland that as of the date
hereof and as of the Closing Date:
3.01 ORGANIZATION AND GOOD STANDING. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, and has the corporate power and authority to own
and operate its properties and assets (including the Purchased Assets) and to
conduct its business as it is now being conducted. Seller is duly qualified to
do business in all other jurisdictions in which Seller owns, leases or operates
property or otherwise conducts Seller's business if the failure to be qualified
would have a material adverse effect on Seller's ability to conduct business
using the Purchased Assets. PictureTel is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
3.02 AUTHORIZATION, COMPLIANCE WITH OTHER INSTRUMENTS AND
LAW. Seller and PictureTel each have full corporate power and authority to enter
into this Agreement and the other agreements and documents to be executed and
delivered by them at Closing as contemplated hereby (collectively, the "Closing
Documents"), to consummate the transactions contemplated hereby and thereby and
to perform their obligations hereunder and thereunder. The execution, delivery
and performance of this Agreement and the Closing Documents and the consummation
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of the shareholders and boards of
directors of Seller and PictureTel. This Agreement has been duly executed and
delivered by Seller and PictureTel, and is a valid and binding obligation of
each of Seller and PictureTel enforceable against Seller and PictureTel in
accordance with its terms and the Closing Documents will, when executed and
delivered by Seller and PictureTel at Closing, constitute valid and binding
obligations of Seller and PictureTel enforceable against Seller and PictureTel
in accordance with their terms. The execution, delivery and performance of this
Agreement and the Closing Documents will not (i) conflict with or result in a
breach or violation of any provision of the Certificate of Incorporation or
By-Laws of Seller or PictureTel or of any order, writ, injunction, judgment,
decree, law, statute, rule or regulation to which Seller or PictureTel is a
party or by which Seller or PictureTel or the Purchased Assets may be bound or
affected; or (ii) except as set forth in SCHEDULE 3.02, result in a default (or
give rise to any right of termination, cancellation or acceleration) or result
in the creation of any lien, encumbrance, security agreement, charge, pledge,
equity or other claim or right of any person in or to the Purchased Assets under
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, agreement or other instrument or obligation to which Seller or
PictureTel is a party or by which Seller or PictureTel or the Purchased Assets
may be bound. All necessary authorizations of the transactions contemplated by
this Agreement required to be obtained by Seller or PictureTel from any Federal,
state, local or foreign government or agency shall have been obtained prior to
the Closing, and any filings, notifications or disclosures required by law or
regulation of any such government or agency shall have been made in such form as
is acceptable as filed. Buyer and Spectel Ireland shall cooperate with Seller
and PictureTel with respect to the aforesaid filings, notifications or
disclosures to the extent necessary to obtain said authorizations. Seller and
PictureTel will deliver to Buyer at the Closing true and complete copies of all
resolutions of their shareholders, if required, and boards of directors by which
the execution, delivery and performance of this Agreement and the Closing
Documents and the consummation of the transactions contemplated hereby and
thereby were authorized, certified by their respective Secretary or Assistant
Secretary as of the Closing Date.
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3.03 FINANCIAL STATEMENTS.
(a) Seller has previously furnished to Buyer true and correct
copies of (i) the unaudited balance sheets of Seller as at December 31, 1998 and
1999 and September 30, 2000; and (ii) the unaudited income statements of Seller
for the fiscal years ended December 31, 1998 and 1999 and for the nine months
ended September 30, 2000 (collectively, the "Financial Statements"). The balance
sheets included in the Financial Statements (including the related notes
thereto) are true, complete and correct and present fairly the financial
position of Seller as of their respective dates, and the related income
statements included in the Financial Statements are true, complete and correct
and present fairly the results of operations of Seller for the periods then
ended, all in conformity with United States GAAP applied on a consistent basis
except as otherwise disclosed in SCHEDULE 3.03 hereto. The Financial Statements
dated as at and for the nine months ended September 30, 2000 are hereinafter
referred to as the "Recent Financial Statements."
(b) The Closing Balance Sheet will, when prepared and as
delivered to Buyer pursuant to Section 1.06 hereof, present fairly the financial
position of Seller reflected therein as at the Closing Date in accordance with
methods employed on the Pro Forma Balance Sheet and GAAP applied on a consistent
basis.
(c) Except for contractual obligations which accrue after the
Closing to be assumed by Buyer, Seller has no liabilities or obligations
(whether absolute, accrued, contingent or otherwise, and whether due or to
become due) which are not fully reflected or reserved against in the Recent
Financial Statements except those which have been incurred in the ordinary
course of business of Seller since the date of the Recent Financial Statements
(all of which will, unless satisfied on or prior to the Closing Date, be
reflected or reserved against in the Closing Balance Sheet or will constitute
Retained Liabilities).
3.04 OPERATION OF SELLER IN THE ORDINARY COURSE. Since the
close of business on October 3, 2000, Seller's business has been operated, and
through the Closing Date will have been operated, in the ordinary course, except
to the extent that Buyer has otherwise agreed (or may prior to the Closing Date
otherwise agree) in writing or as is expressly contemplated by this Agreement.
From the date hereof until the Closing Date, Seller shall continue to use its
best efforts to preserve the goodwill of Seller's business and its relationship
with employees, customers and suppliers.
3.05 TAX MATTERS. Other than as disclosed on SCHEDULE 3.05,
there is no tax obligation of Seller or PictureTel which constitutes, or may in
the future constitute, a lien on the Purchased Assets, and if any such lien
exists or arises, it will be promptly discharged by Seller.
3.06 MATERIAL CONTRACTS AND COMMITMENTS. SCHEDULE 1.01(D)
hereto constitutes a full and complete list, as of the date hereof, of all
contracts and commitments of Seller involving aggregate rights or obligations of
Seller in excess of $10,000 per contract or which have a remaining term, as of
the date hereof, of over six months in length of obligation on the part of
Seller ("Material Contracts"). Except as indicated on SCHEDULE 1.01(D), Seller
is not in breach or violation of, or in default under, in any material respect,
any of the Material Contracts; the execution of this Agreement and the
consummation of the transactions contemplated hereby will not constitute a
default or breach under the Material Contracts; and, except as specifically
indicated in SCHEDULE 1.01(D), the execution of this Agreement and the
consummation of the transactions contemplated hereby will not give rise to any
consent requirement under any of the Material Contracts. All of the contracts
listed on SCHEDULE 1.01(D) are in full force and effect and have not been
modified or amended, except as set forth on SCHEDULE 1.01(D).
3.07 LICENSES, PERMITS AND AUTHORIZATIONS. Seller has
obtained, and will as of the Closing Date continue to have, all material
approvals, authorizations, consents, licenses, franchises, orders, certificates
and other permits of, and has made and will have made on the Closing Date all
filings with, any governmental authority, whether foreign, Federal, state or
local, which are required for the ownership of the Purchased Assets or the
conduct of Seller's business as presently conducted. A complete list of all such
approvals, authorizations, consents, licenses, franchises, orders, certificates,
permits and filings is included as SCHEDULE 3.07 hereto.
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3.08 TITLE TO PURCHASED ASSETS. Seller has good title to the
Purchased Assets and shall at the Closing deliver to Buyer good title to the
Purchased Assets free and clear of all title defects, liabilities, obligations,
liens, mortgages, security interests, encumbrances, easements, claims or similar
adverse interests of any kind or character except (i) any Assumed Liabilities
expressly assumed by Buyer pursuant to Section 1.03 hereof, and (ii) the title
exceptions listed in SCHEDULE 3.08 hereto. All leases pursuant to which Seller
leases any of the Purchased Assets are valid and binding in accordance with
their respective terms.
3.09 PROPRIETARY RIGHTS. SCHEDULE 1.01(A) hereto sets forth a
complete list of all patents, patent applications, registered trademarks,
trademark applications, registered service marks, service xxxx applications,
registered domain names, domain name applications, trade secrets, trade names,
registered copyrights, licenses, inventions or proprietary know-how which are
held or owned or licensed by Seller. Seller is not to the best of its knowledge
and has not received notice otherwise, by virtue of the conduct of the Seller's
business, infringing upon or making an unauthorized use of any proprietary right
or intellectual property right of any third party.
3.10 EMPLOYEE BENEFIT PLANS.
(a) Except as set forth in SCHEDULE 3.10 hereto, Seller does
not maintain, administer or otherwise contribute to any "employee benefit plan,"
as defined in section 3(3) of the Employment Retirement Income Security Act of
1974, as amended ("ERISA"), whether or not such plan is subject to any of the
provisions of ERISA, or any qualified or non-qualified current or deferred
compensation (other than base salary and base wages), bonus, incentive
compensation, stock right, stock option, stock appreciation right, severance
pay, retirement, pension, supplemental pension, profit-sharing, stock bonus,
salary continuation, tuition assistance dependent care assistance, legal
assistance, vacation, fringe benefit (cash and non-cash), group or individual
health, medical, dental, vision, disability, life insurance or survivor benefit
or similar plan, policy or arrangement, which covers any employee, self-employed
individual or beneficiary of any employee or self-employed individual, whether
active or retired, of Seller (any such plan being herein referred to as an
"Employee Plan"). Seller has no commitment to create any additional Employee
Plans. No amendments or improvements to the Employee Plans have been promised
and no amendments or improvements to the Employee Plans will be made or promised
prior to the Closing Date, except as required by any applicable law or any
applicable regulatory authority. Except as set forth in SCHEDULE 3.10, (i) none
of such Employee Plans is a money purchase plan or a defined benefit plan, and
(ii) none of such Employee Plans is a "multi-employer plan" as defined in
Section 3(37) of ERISA and Seller has not been obligated to make a contribution
to any "multi-employer plan" within the past five years. Seller would have no
withdrawal liability if it withdrew from any "multi-employer plan" in which it
participates. Each of the Employee Plans that is intended to be qualified under
Section 401(a) of the Internal Revenue Code (the "Code") has been determined by
the Internal Revenue Service ("IRS") to be so qualified, such determination by
the IRS covers the most recent restatement of each such Employee Plan, such
determination may be relied upon by Seller as of the Closing Date, any amendment
upon which any such determination is conditioned has been duly adopted by Seller
and Seller is not aware of any fact which would adversely affect the qualified
status of any such Employee Plan. None of the Employee Plans provide benefits to
retired employees or to the beneficiaries or dependents of retired employees.
(b) True and complete copies of each Employee Plan, including
all amendments thereto and related trust or other funding agreements, the latest
financial statements thereof and all investment agreements, contracts or reports
have been delivered to Buyer, together with (i) a true and complete copy of the
three most recent annual reports or filings (if required by law) for each such
plan including any and all schedules, opinions and attachments thereto prepared
in connection with any such reports, (ii) a copy of the most recent summary plan
description and summary of material modifications of each such plan, and (iii)
for each Employee Plan intended to be covered under Section 401(a) of the Code,
a copy of the most recent IRS determination letter and the application therefore
or of any other equivalent proof of registered status. None of Seller, any
Employee Plan, any "party in interest" as defined in section 3(14) of ERISA or
any "disqualified person" as defined under Section 4975 of the Code has engaged
in a "prohibited transaction," as defined in Section 406 of ERISA or Section
4975 of the Code, with respect to any Employee Plan which could subject any of
them or Buyer to liability or penalty under Section 409 or 502(i) of ERISA or
Section 4975 of the Code.
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(c) Seller, and each fiduciary for each of the Employee Plans,
is in material compliance with, and has administered each of the Employee Plans
in accordance with, the terms of the Employee Plans and with the requirements of
any and all laws, statutes, orders, decrees, rules and regulations, including
but not limited to ERISA, applicable to each such plan. Seller has not failed to
make any contribution to, or to pay any amount due and owing, as required by
applicable law or by the terms of any Employee Plan, or to avoid a funding
deficiency, to or with respect to any Employee Plan as of the last day of the
most recent plan year of each of such plans ended prior to the Closing Date.
(d) There is no pending or, to the best of Seller's knowledge,
threatened legal action, arbitration or other proceeding or investigation
against Seller or any Employee Plan with respect to any Employee Plan, other
than routine claims for benefits, which could result in liability to any such
Employee Plan, Seller or Buyer, and there is no reasonable basis for any such
legal action or proceeding.
(e) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not result in payment
(either of severance pay or otherwise) becoming due from any of the Employee
Plans, Seller or Buyer to any current or former employee or self-employed
individual, and will not result in the payment, vesting, acceleration or
increase of any benefit payable under any Employee Plan to any current or former
employee or self-employed individual.
(f) There does not exist any liability, obligation or claim
(other than a routine claim for benefits) resulting from, relating to or arising
out of any Employee Plan, or any liability, obligation or claim (other than a
routine claim for benefits) resulting from, relating to or arising out of any
"employee benefit plan," as defined in section 3(3) of ERISA, maintained by an
employer which, with Seller, is considered to be, or to be part of, a single
employer under Section 414(b), (c), (m) or (o) of the Code, including, but not
limited to, any liability, obligation or claim (other than a routine claim for
benefits) in connection with a "multi-employer plan" as defined in Section 3(37)
of ERISA, or in connection with the Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA).
(g) All obligations relating to the Employee Plans (including,
without limitation, payroll taxes and deductions) have been satisfied and there
are no outstanding defaults or violations by any party thereto and no taxes,
penalties or fees owing or exigible under any of the Employee Plans.
3.11 LITIGATION AND OTHER CLAIMS. Except as described in
SCHEDULE 3.11, there are no actions, suits, arbitration proceedings, claims or
other proceedings arising out of or related to the business of the Seller
pending or, to the knowledge of Seller, threatened before any foreign, Federal,
state, municipal or other court, department, commission, arbitration panel,
board, bureau, agency, body or instrumentality against Seller or affecting the
Purchased Assets at law or in equity. Seller is not a party to or subject to the
provisions of any order, writ, injunction, decree or judgment of any court or
foreign, Federal, state, municipal or other governmental or administrative body,
department, commission, board, bureau, securities exchange or other agency or
instrumentality in connection with the ongoing operations of Seller except as
set forth in SCHEDULE 3.11. PictureTel and Buyer shall share equally in the cash
settlement amount paid to PictureTel and MultiLink pursuant to the Settlement
Agreement dated November 13, 2000, between Seller, PictureTel, Octave
Communications, Inc. and Messrs. Xxxxxx Xxxxx and Xxxxxx Xxxxxxxxx (the
"Settlement Agreement"). PictureTel has received $100,000 to date pursuant to
the Settlement Agreement, of which $50,000 shall be paid to Buyer. All future
payments paid to PictureTel or MultiLink pursuant to the Settlement Agreement
subsequent to Closing shall be shared equally by PictureTel and Buyer.
PictureTel agrees to pay to Buyer half of any such cash received within five
days of receipt thereof.
3.12 NO MATERIAL ADVERSE CHANGE. Since the close of business
on the date of the Recent Financial Statements, there has been no material
adverse change in the financial condition, results of operations or business of
Seller.
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3.13 SUFFICIENCY OF PURCHASED ASSETS. Except for the services
to be provided to Buyer pursuant to Section 10.08 hereof, the Purchased Assets
are sufficient to operate Seller's business as currently operated. Seller is not
a party to any contract which is necessary in any material respect to Seller's
business other than contracts which will be assigned to Buyer at the Closing
hereunder.
Without limitation of the foregoing, the Purchased Assets will
include all assets reflected in the balance sheet included in the Recent
Financial Statements and all assets utilized by Seller to achieve the results of
operations reflected in the income statement included in the Recent Financial
Statements except for the services to be provided to Buyer pursuant to the
covenants contained in Section 10.08 and except for intercompany balances and
assets sold in the ordinary course of Seller's business since the date of the
Recent Financial Statements.
3.14 COMPLIANCE WITH LAWS.
(a) Neither the Purchased Assets nor the operations of
Seller's business, as conducted at the date hereof and as will be conducted
through the Closing Date, violate, in any material respect, any foreign,
Federal, state or local law, ordinance, rule or regulation.
(b) Seller complies in all material respects with the
standards established by and set forth in ISO 9001.
3.15 INSURANCE. PictureTel maintains, and through the Closing
Date will maintain, adequate insurance including self-insurance insuring the
Purchased Assets and the operations of Seller's business. All policies of
insurance of any kind maintained, owned or held by Seller which cover the
Purchased Assets or Seller's business are set forth in SCHEDULE 3.15 hereto and
such policies are in full force and effect, all premiums with respect thereto
covering all periods up to and including the Closing Date have been paid, and no
notice of cancellation or termination has been received with respect to any such
policy which has not been replaced on substantially similar terms prior to the
date of such cancellation or termination. The insurance policies to which Seller
is a party which cover the Purchased Assets or Seller's business are sufficient
for compliance with all requirements of applicable laws and all agreements to
which Seller is a party or by which Seller or the Purchased Assets may be bound.
In the three years preceding the date of this Agreement, Seller has not been
refused any insurance with respect to the Purchased Assets or the operations of
Seller or had its coverage limited by any insurance carrier to which it has
applied for any such insurance or with which it has carried such insurance.
3.16 ACCOUNTS RECEIVABLE. The accounts receivable reflected
on the balance sheet of Seller included in the Recent Financial Statements, and
all accounts receivable of Seller arising since the date of such balance sheet,
arose from bona fide transactions in the ordinary course of business, and the
materials or services involved have been provided to the account obligor, and no
further materials or services are required to be provided in order to complete
the sales and to entitle Seller, or its assignee, to collect such accounts
receivable in full. Except as set forth in SCHEDULE 3.16 hereto, none of such
accounts receivable have been assigned or pledged to any other person, firm or
corporation, and no defense or setoff to any such accounts receivable has been
asserted by any obligor, except as reserved. All accounts receivable less any
collections made by Seller prior to the execution of this Agreement included in
the Purchased Assets will be collected in full by Buyer net of any applicable
reserves for doubtful accounts included in the Closing Balance Sheet.
3.17 REAL PROPERTY LEASES. The Real Property Leases are valid
and binding upon the lessor and are in full force and effect. There are no
existing defaults by Seller under the Real Property Leases and no event has
occurred which (whether with or without notice, lapse of time, or both) would
constitute a default thereunder by Seller. Seller has delivered to Buyer true
and complete copies of the Real Property Leases.
3.18 LABOR MATTERS. Except as set forth in SCHEDULE 3.18: (a)
Seller is in compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, and is not engaged in any unfair labor
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practice; (b) there is no unfair labor practice complaint against Seller
pending or threatened with respect to Seller's employees before the National
Labor Relations Board or any other applicable tribunal; (c) there is no labor
strike, dispute, slowdown or stoppage actually pending or, to the best of
Seller's knowledge, threatened against or affecting Seller; (d) Seller has
received no notice that any representation or petition respecting the employees
of Seller has been filed with the National Labor Relations Board or any other
applicable tribunal; (e) no grievance nor any arbitration proceeding arising out
of or under any collective bargaining agreements with respect to Seller's
employees is pending against Seller; and (f) Seller has not experienced any
strike or work stoppage or other industrial dispute involving Seller's employees
in the past five years.
3.19 CONDITION OF PURCHASED ASSETS. The Purchased Assets are
in good repair and working condition, normal wear and tear excepted, are suited
for the uses currently intended, are in conformity with all applicable laws,
ordinances, rules and regulations and are in good saleable condition, normal
wear and tear excepted.
3.20 ENVIRONMENTAL MATTERS.
(a) Except as set forth in SCHEDULE 3.20 hereto: (i) Seller is
in compliance in all material respects with all environmental laws, regulations,
permits and orders applicable to it, and with all laws, regulations, permits and
orders governing or relating to asbestos removal and abatement; (ii) Seller has
not transported, stored, treated or disposed, or allowed or arranged for any
third parties to transport, store, treat or dispose, of any Hazardous Substances
or other waste to or at any location other than a site lawfully permitted to
receive such Hazardous Substances or other waste for such purposes, or had
performed, arranged for or allowed by any method or procedure such
transportation, storage, treatment or disposal in contravention of any laws or
regulations, nor has Seller disposed, or allowed or arranged for any third
parties to dispose, Hazardous Substances or other waste upon property owned or
leased by it; (iii) there has not occurred, nor is there presently occurring, a
Release of any Hazardous Substance on, into or beneath the surface of any parcel
of real property in which Seller has an ownership interest or any leasehold
interest; (iv) Seller has not transported or disposed, or allowed or arranged
for any third parties to transport or dispose, any Hazardous Substance or other
waste to or at a site which, pursuant to the U.S. Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA") or any
similar law, (A) has been placed on the National Priorities List or its state
equivalent, or (B) the Environmental Protection Agency or the relevant state
agency has proposed or is proposing to place on the National Priorities List or
its state equivalent; (v) Seller has not received notice, and has no knowledge
of any facts which could give rise to any notice, that Seller is a potentially
responsible party for a Federal or state environmental cleanup site or for
corrective action under CERCLA or any other applicable law or regulation or
notice of any other Environmental Claim; (vi) Seller has not received any
written or oral request for information in connection with any Federal or state
environmental cleanup site and has not undertaken (or been requested to
undertake) any response or remedial actions or cleanup actions of any kind at
the request of any Federal, state or local governmental entity, or at the
request of any other person or entity; (vii) there are no laws, regulations,
ordinances, licenses, permits or orders relating to environmental or worker
safety matters requiring any work, repairs, construction or capital expenditures
with respect to the assets or properties of Seller; and (viii) SCHEDULE 3.20
identifies (w) all environmental audits, assessments or occupational health
studies undertaken by Seller or its agents or by any governmental agencies with
respect to the operations or properties of Seller; (x) the results of any ground
water, soil, air or asbestos monitoring undertaken with respect to any real
property owned or leased by Seller; (y) all written communications of Seller
with environmental agencies; and (z) all citations issued to Seller under the
Occupational Safety and Health Act (29 U.S.C. Sections 651 ET SEQ.).
(b) For the purposes of this Agreement, "Environmental Claim"
shall mean any demand, claim, governmental notice or threat of litigation or the
actual institution of any action, suit or proceeding at any time by a person
other than the parties which asserts that an Environmental Condition constitutes
a violation of or otherwise may give rise to any liability or obligation under,
any statute, ordinance, regulation, or other governmental requirement or the
common law, including, without limitation, any such statute, ordinance,
regulation, or other governmental requirement relating to the emission,
discharge, or release of any Hazardous
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Substance into the environment or the generation, treatment, storage,
transportation, or disposal of any Hazardous Substance. "Environmental
Condition" shall mean the presence on the Closing Date, whether discovered or
undiscovered on the Closing Date, in surface water, ground water, drinking water
supply, land surface, subsurface strata or ambient air of any pollutant,
contaminant, industrial solid waste or Hazardous Substance arising out of or
otherwise related to the operations or other activities of Seller, or of any
predecessor in interest or line of business to Seller, conducted or undertaken
prior to the Closing Date. "Hazardous Substance" shall mean any substance
defined in the manner set forth in Section 101(14) of the U.S. Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, and
shall include any additional substances designated under Section 102(a) thereof.
"Release" shall mean releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment.
3.21 INVESTMENT REPRESENTATIONS. Seller is receiving the
Ordinary Shares hereunder for its own account and not for the account of others
and for investment purposes only and not with a view to or for the transfer,
assignment, resale or distribution thereof, in whole or in part. Seller has no
present plans to enter into any contract, undertaking, agreement or arrangement
providing for the transfer, assignment, resale or distribution of its Ordinary
Shares, in whole or in part. Seller understands that the statutory basis on
which the Ordinary Shares are being transferred to it would not be available if
its present intention were to hold the Ordinary Shares for a fixed period of
time or until the occurrence of a certain event. Seller realizes that receipt
now with a present intent to sell (i) by reason of a foreseeable specific
contingency, (ii) by reason of any anticipated change in the market value or in
the condition of Buyer, or that of the industry in which the business of Buyer
is engaged, (iii) in connection with a contemplated liquidation of Buyer, (iv)
in connection with settlement of any loan obtained by the undersigned for the
acquisition of the Ordinary Shares, under which such Ordinary Shares may be
pledged as security, or (v) in connection with the pledge of the Ordinary Shares
as donations to religious or charitable institutions for the purpose of securing
a deduction or an income tax return, would, in fact, represent receipt with an
intent inconsistent with its representations to Buyer. Seller will not pledge,
transfer or assign its Ordinary Shares except to a person or entity which
controls, is controlled by or is under common control with Seller.
3.22 FULL DISCLOSURE. All information furnished to Buyer in
accordance herewith is, and as of the Closing Date shall be, correct and
complete in all material respects. No representation or warranty of Seller or
PictureTel and no information, Schedule or certificate furnished or to be
furnished by or on behalf of Seller or PictureTel to Buyer, its affiliates or
its agents pursuant to or in connection with this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer and Spectel Ireland jointly and severally represent and
warrant to, and covenant with, PictureTel and Seller that as of the date hereof
and as of the Closing Date:
4.01 ORGANIZATION. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has the corporate power and authority to own and operate its properties and
assets and to conduct its business as it is now being conducted. Buyer is duly
qualified to do business in all other jurisdictions in which Buyer owns, leases
or operates property or otherwise conducts Buyer's business if the failure to be
qualified would have a material adverse effect on Buyer's ability to conduct
business using the Purchased Assets. Spectel Ireland is a corporation duly
organized and validly existing under the laws of Ireland.
4.02 DUE AUTHORIZATION. Each of Buyer and Spectel Ireland has
full corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement and the
consummation of the
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transactions contemplated hereby, have been duly authorized by all necessary
corporate action on the part of Buyer and Spectel Ireland. This Agreement
has been duly executed and delivered by Buyer and Spectel Ireland and
is a valid and binding obligation of Buyer and Spectel Ireland enforceable
against Buyer and Spectel Ireland in accordance with its terms. The execution,
delivery and performance of this Agreement will not conflict with or result in a
violation of any provision of the Certificate of Incorporation or By-Laws (or
similar corporate organizational documents) of either Buyer or Spectel Ireland,
or of any material contract by which they are bound, or of any judgment or
decree to which they are a party or by which they are bound. All necessary
authorizations of the transactions contemplated by this Agreement required to be
obtained by Buyer and Spectel Ireland from any Federal, state, local or foreign
government or agency shall have been obtained prior to the Closing, and any
filings, notifications or disclosures required by law or regulations of such
government or agency shall have been made in such form as is acceptable to file.
Seller and PictureTel shall cooperate with Buyer and Spectel Ireland with
respect to the aforesaid filings, notifications or disclosures to the extent
necessary to obtain said authorizations. Buyer and Spectel Ireland will deliver
to Seller at the Closing true and complete copies of all resolutions of their
boards of directors by which the execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby were
authorized, certified by their respective Secretary or Assistant Secretary as of
the Closing Date.
4.03 ORDINARY SHARES. The issuance of the Ordinary Shares has
been duly authorized, and upon issuance and sale for the consideration provided
for herein, the Ordinary Shares will be duly and validly issued, fully paid and
nonassessable.
ARTICLE V
COVENANTS PENDING CLOSING
5.01 CONDUCT OF BUSINESS OF SELLER PRIOR TO THE CLOSING.
Except as contemplated by this Agreement, during the period from the date of
this Agreement to the Closing Date, Seller will, and PictureTel will cause
Seller to, conduct Seller's business and operations in, and only in, the
ordinary course of business and substantially in the manner heretofore
conducted. Without limiting the generality of the foregoing, and except as
contemplated in this Agreement, prior to the Closing Date, without the prior
written consent of Buyer, Seller will not, and PictureTel will not permit Seller
to:
(a) except for Retained Liabilities, create, incur or assume
any indebtedness for money borrowed, including obligations in respect
of capital leases; or incur any material liabilities or obligations
other than in the ordinary course of business consistent with past
practices; or assume, guarantee, endorse or otherwise become liable or
responsible (whether directly or contingently or otherwise) for the
obligations of any person; PROVIDED, that Seller may endorse negotiable
instruments for collection in the ordinary course of business;
(b) except as a result of a normal individual review cycle, or
individual plan cycle, increase the rate or terms of compensation
payable or to become payable by Seller to Seller's employees; or
increase the rate or terms of any bonus, insurance, pension or other
employee benefit plan, payment or arrangement made to, for or with the
employees of Seller; or enter into any new employment agreement or
modify the terms of any existing employment agreement;
(c) except in the ordinary course of business with product
purchasers, enter into any material contract or arrangement providing
for, in the aggregate, payment or receipt of more than US$100,000 or
which is greater than six months in duration without Buyer's consent
which shall not be unreasonably withheld or delayed;
(d) in any material way, violate, breach or allow to lapse any
material contract or enter into any other agreement, commitment or
transaction (including without limitation any borrowing, capital
expenditure or capital financing), except in the ordinary course of
business consistent with past practice;
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(e) sell, transfer, mortgage, encumber or otherwise dispose of
any of the Purchased Assets, except in the ordinary course of business
consistent with past practice; or
(f) agree or make any commitment to take any actions
prohibited by this Section 5.01.
5.02 ACCESS TO INFORMATION. Subject to the Confidentiality
Agreement, between the date of this Agreement and the Closing Date, Seller will,
and PictureTel will cause Seller to, during ordinary business hours (a) give
Buyer and its authorized representatives and advisors access to all books,
records, offices and other facilities and properties of Seller, (b) permit Buyer
to make such inspections thereof as Buyer may reasonably request, and (c) cause
its officers and advisors to furnish Buyer with such financial and operating
data and other information with respect to Seller as Buyer may from time to time
reasonably request; in addition, Seller will cause its accountants to make their
personnel, their work papers and such other requested documentation relating to
their work papers and to their audits of the books and records of Seller
available to Buyer and its advisors and representatives.
5.03 CONSENTS. The parties hereto will use their best efforts
to promptly obtain consents (including any required consents to the assignment
of contracts) of all persons and governmental authorities necessary for the
consummation of the sale of the Purchased Assets and the other transactions
contemplated by this Agreement.
5.04 PUBLIC ANNOUNCEMENTS. From the date hereof through the
Closing, no party hereto shall make any press release or public announcement or
any disclosure to any third person (other than to employees of Seller, employees
of Buyer and Spectel Ireland, attorneys, accountants and other advisors of the
parties hereto in connection with the transactions contemplated hereby and
except for the HSR filing contemplated by Section 5.06 hereof) concerning the
transactions contemplated by this Agreement; PROVIDED, HOWEVER, that the parties
will make such announcements, if any, as are required by applicable law or stock
exchange rules and will mutually agree to the content thereof. In conjunction
with the Closing, Buyer and PictureTel shall consult with each other concerning
the form of any post-closing press release or any other public announcement
concerning the transactions contemplated by this Agreement, and the parties
shall use their best efforts to cause a mutually agreeable form of such release
or announcement to be issued.
5.05 CONFIDENTIALITY.
(a) All information furnished by Buyer (or its agents and
representatives) to Seller (or their agents and representatives) or furnished by
Seller (or their agents or representatives) to Buyer (or its agents and
representatives) pursuant hereto shall be treated as the sole property of the
party furnishing the information until the Closing Date, and if the Closing
shall not occur, the party receiving the information shall return to the party
which furnished such information all copies of any documents or other materials
containing, reflecting or referring to such information, shall keep confidential
all of such information regarded as confidential by the party supplying such
information, and shall not directly or indirectly use such information for any
competitive or other commercial purpose. The obligation to keep such information
confidential shall not apply to (i) any information which (w) the party
receiving the information can establish was already in its possession prior to
the disclosure thereof by the party furnishing the information, (x) was then
generally known to the public, (y) became known to the public through no fault
of the party receiving the information; or (z) was disclosed to the party
receiving the information by a third party not bound by an obligation of
confidentiality to the party furnishing the information; or (ii) disclosures in
accordance with an order of a court of competent jurisdiction or as required by
any law, rule or regulation applicable to the party making the disclosure,
including any rule of, or agreement of any party or its affiliates with, any
stock exchange.
(b) Seller and Buyer agree, whether or not the Closing shall
occur, to maintain, and to cause their agents and representatives to maintain,
the confidentiality of the terms and conditions of this Agreement and
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all documents executed and delivered in connection with the transactions
contemplated by this Agreement. The provisions of this Section 5.05(b) shall not
apply to particular conditions or terms of the above referenced documents (i) if
the party seeking to make such disclosure shall have obtained the prior written
consent of the other party to the disclosure of such conditions or terms, (ii)
that are required to be disclosed during the course of any litigation or
arbitration which may be brought by any party related to the provisions of any
of the above referenced documents, (iii) that are or become generally available
to the public other than as a result of actions taken by the party seeking to
make such disclosure or its agents and representatives, or (iv) that are
required to be disclosed pursuant to and in accordance with any law, rule or
regulation applicable to the party seeking to make such disclosure, including
any rule of, or agreement of any party or its affiliates with, any stock
exchange.
Notwithstanding the foregoing, if a party is requested or
required (by oral questions, interrogatories, requests for information or
document subpoena, civil investigative demand or similar process) to disclose
any of the above-referenced documents, such party will promptly notify the other
party of such request so that such other party may seek an appropriate
protective order or waive compliance with the provisions hereof. If, in the
absence of a protective order or the receipt of a waiver hereunder, a party is
nonetheless, in the opinion of its counsel, compelled to disclose any terms or
conditions of the above-referenced documents to any tribunal or else stand
liable for contempt or suffer other censure or penalty, such party may disclose
such information to such tribunal without liability hereunder.
5.06 XXXX-XXXXX-XXXXXX. Promptly following the execution of
this Agreement, the parties or their appropriate affiliates will make all
filings which are required in connection with the transactions contemplated
hereby under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended ("HSR"). Each of the parties and their appropriate affiliates will
furnish the other parties such information and assistance as may reasonably be
requested in connection with preparation of filings or submissions to any
governmental agency, including, without limitation, any filings necessary under
the provisions of HSR. The parties will each use their reasonable efforts to
resist any assertion that the transactions contemplated by this Agreement
constitute a violation of federal or state antitrust laws and shall seek early
termination of the waiting period under HSR.
5.07 NO-SHOP. Each of Seller and PictureTel hereby agree that
it shall not pursue or become involved in any negotiations or discussions or
enter into any agreement regarding the sale of the business, assets or stock of
Seller to any third person or entity.
ARTICLE VI
CLOSING CONDITIONS
6.01 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE
TRANSACTIONS CONTEMPLATED HEREBY. The respective obligations of each party to
effect the transactions contemplated hereby shall be subject to the fulfillment
at or prior to the Closing Date of the following conditions:
(a) NO ORDER, DECREE OR INJUNCTION. None of Seller,
PictureTel, Buyer or Spectel Ireland shall be subject to any order,
decree or injunction of a court of competent jurisdiction or
governmental agency and no statute, rule or regulation shall be in
effect or be enacted or issued which (i) prevents or delays any of the
transactions contemplated by this Agreement, or (ii) would impose any
limitation on the ability of Buyer and Spectel Ireland effectively to
exercise full rights of ownership of the Purchased Assets; and
(b) HSR WAITING PERIOD EXPIRED. The waiting period for
consummation of the transactions contemplated hereby prescribed by HSR
shall have expired or early termination thereof shall have been granted
or the parties shall agree that no HSR filings are required.
6.02 CONDITIONS TO THE OBLIGATIONS OF SELLER TO EFFECT THE
TRANSACTIONS CONTEMPLATED HEREBY. The obligations of Seller to effect the
transactions contemplated hereby shall be further subject to the
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fulfillment at or prior to the Closing Date of the following conditions, any one
or more of which may be waived by Seller:
(a) COVENANTS PERFORMED; REPRESENTATIONS AND WARRANTIES TRUE.
Buyer and Spectel Ireland shall have performed and complied with the
covenants and agreements contained in this Agreement required to be
performed and complied with by it at or prior to the Closing Date and
the representations and warranties of Buyer and Spectel Ireland set
forth in this Agreement shall be true and correct as of the Closing
Date as though made at and as of the Closing Date, and Seller shall
have received a certificate to that effect signed by authorized
officers of each of Buyer and Spectel Ireland;
(b) OPINION LETTER. At the Closing, Seller shall have
received an opinion or opinions from Irish and United States counsel of
Buyer and Spectel Ireland, dated the Closing Date and satisfactory in
form and substance to Seller and its counsel, to the effect that:
(i) Buyer is a corporation duly incorporated under
the laws of the State of Delaware and Spectel Ireland is a
corporation duly organized and validly existing under the laws
of Ireland;
(ii) Each of Buyer and Spectel Ireland has the
corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated
hereby, and the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have
been duly and validly authorized by all requisite corporate
action taken on the part of Buyer and Spectel Ireland and no
other corporate proceedings on the part of Buyer or Spectel
Ireland are necessary to authorize this Agreement or the
consummation the transactions contemplated hereby;
(iii) This Agreement has been duly and validly
executed and delivered by Buyer and Spectel Ireland and,
assuming this Agreement is a valid and binding obligation of
the other parties thereto, is a valid and binding obligation
of Buyer and Spectel Ireland, enforceable against them in
accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally, and by general principles of equity
(regardless of whether such enforcement is considered in a
proceeding in equity or at law); and
(iv) Except as disclosed in SCHEDULE 3.11 to this
Agreement, such counsel has no knowledge after reasonable
investigation of any claim, action, arbitration, proceeding or
investigation pending or threatened against or relating to the
Buyer or Spectel Ireland before any court or governmental or
regulatory authority or arbitrator or other body acting in an
investigative or adjudicative capacity or of any outstanding
order, writ, injunction or decree to which Buyer or Spectel
Ireland is a party or is subject which adversely affects the
business, operations or financial condition of Buyer or
Spectel Ireland;
(v) The shares of stock issued to PictureTel pursuant
to this Agreement have been duly authorized and are validly
issued.
(c) FAIRNESS OPINION. Prior to the Closing, PictureTel shall
have received a fairness opinion from its investment banker in form and
substance satisfactory to PictureTel.
(d) BANK CONSENT. Prior to the Closing, PictureTel shall have
received a consent from Congress Financial allowing Seller to sell the
Purchased Assets.
6.03 CONDITIONS TO THE OBLIGATIONS OF BUYER TO EFFECT THE
TRANSACTIONS CONTEMPLATED HEREBY. The obligations of Buyer to effect the
transactions contemplated hereby shall be further subject to the
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fulfillment at or prior to the Closing Date of the following conditions, any
one or more of which may be waived by Buyer:
(a) COVENANTS PERFORMED; REPRESENTATIONS AND WARRANTIES TRUE.
Seller and PictureTel shall have performed and complied with the
covenants and agreements contained in this Agreement required to be
performed and complied with by them at or prior to the Closing Date,
and the representations and warranties of Seller and PictureTel set
forth in this Agreement shall be true and correct as of the Closing
Date as though made at and as of the Closing Date, and Buyer shall have
received a certificate to that effect signed by authorized officers of
each of Seller and PictureTel;
(b) NO MATERIAL ADVERSE CHANGE. There shall not have been,
since the date of the Recent Financial Statements, any material adverse
change in the business, results of operations, financial condition or
prospects of Seller;
(c) OPINION LETTER. At the Closing, Buyer shall have received
an opinion or opinions from Ropes & Xxxx and W. Xxxxxx Xxxxxxxxx, Xx.,
as appropriate, counsels for Seller and PictureTel, dated the Closing
Date and satisfactory in form and substance to Buyer and its counsel,
to the effect that, except that counsel need not pass upon the covenant
not to compete in Section 10.05(b):
(i) Seller is a corporation duly organized, validly
existing and in good standing under the laws of the
Commonwealth of Massachusetts, and PictureTel is a corporation
duly organized, validly existing and in good standing under
the laws of the State of Delaware, and each of Seller and
PictureTel has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its
business as now being conducted;
(ii) Seller and PictureTel have the corporate power
and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby, and the
execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and
validly authorized by all requisite corporate action taken on
the part of Seller and PictureTel and no other corporate
proceedings on the part of Seller or PictureTel are necessary
to authorize this Agreement or the consummation of the
transactions contemplated hereby;
(iii) This Agreement has been duly and validly
executed and delivered by Seller and PictureTel and, assuming
this Agreement is a valid and binding obligation of Buyer,
constitutes a valid and binding obligation of Seller and
PictureTel, enforceable against Seller and PictureTel in
accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally, and by general principles of equity
(regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(iv) Except for those approvals and consents which
have already been obtained, neither execution and delivery by
Seller and PictureTel of this Agreement, the sale by Seller of
the Purchased Assets pursuant to this Agreement, nor the
consummation of the other transactions contemplated by this
Agreement, will (A) conflict with or result in any breach of
any provision of the Certificate of Incorporation or By-Laws
of Seller and PictureTel; (B) require any consent, approval,
authorization or permit of, or filing with or notification to,
any governmental or regulatory authority other than those
which have been made or obtained; (C) to the best of such
counsel's knowledge after reasonable investigation, constitute
a default (or give rise to any right of termination,
cancellation or acceleration) in any material respect under
any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, agreement or other instrument or
obligation known to such counsel to which Seller or PictureTel
is a party or by
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which Seller or PictureTel or any of their respective
assets may be bound, except for such defaults (or rights
of termination, cancellation or acceleration) as to which
requisite waivers or consents have been obtained; (D) to
the best of such counsel's knowledge after reasonable
investigation, result in the creation of any encumbrance,
mortgage, security interest, lien, equity or right of others
upon any of the Purchased Assets under any of the terms,
conditions or provisions of any agreement, instrument or
obligation known to such counsel to which Seller or PictureTel
or any of their respective assets may be bound or affected; or
(E) violate any order, writ, injunction, judgment or decree
known to such counsel, to which Seller or PictureTel is a
party, or by which any of their respective assets are bound or
any law, statute, rule or regulation applicable to Seller or
PictureTel or any of their respective assets; and
(v) Except for Retained Liabilities or as disclosed
in SCHEDULE 3.11 to this Agreement, such counsel has no
knowledge after reasonable investigation of any claim, action,
arbitration, proceeding or investigation pending or threatened
against or relating to Seller before any court or governmental
or regulatory authority or arbitrator or other body acting in
an investigative or adjudicative capacity or of any
outstanding order, writ, injunction or decree to which Seller
is a party or is subject which adversely affects the business,
operations or financial condition of Seller;
(d) CONSENTS OBTAINED. Prior to Closing, all licenses,
permits and other governmental approvals and authorizations and all
consents of third parties required to effect the transactions
contemplated by this Agreement and for the business of Seller to be
operated by Buyer and Spectel Ireland after the Closing in the manner
and to the extent of Seller's current operations shall have been
obtained and delivered to Buyer;
(e) FUNDING. Prior to Closing, Buyer shall have negotiated
diligently and in good faith to obtain and have obtained sufficient
debt and equity funding to consummate the purchase of the Purchased
Assets on reasonable terms and conditions; and
(f) NAME CHANGE. Contemporaneously with the Closing, Seller
shall file the appropriate charter amendments to change its name so
that the word "MultiLink" is omitted therefrom.
ARTICLE VII
THE CLOSING
7.01 TIME AND PLACE OF CLOSING. Upon the terms and subject to
the satisfaction or waiver of the conditions in this Agreement, the Closing of
the transactions contemplated hereby (the "Closing") shall take place as of the
close of business on the business day following satisfaction of the condition
set forth in Section 6.01(b) hereof (or, if the other conditions to the Closing
contained in Article VI hereof have not been satisfied or waived by such date,
then on the business day after the satisfaction or waiver of the last such
condition which is outside of the control of the parties) at the offices of
Buyer's counsel, Xxxxxx, Xxxxxxx & Xxxxxxx, Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or at such other time and place as the parties hereto may agree in
writing. The effective time of the Closing is herein referred to as the "Closing
Date."
7.02 CLOSING. At the Closing, the Buyer and Spectel Ireland
shall deliver to Seller an instrument in the form of EXHIBIT A hereto by which
Buyer shall assume and agree to perform and discharge the Assumed Liabilities
with effect from the Closing Date in a form satisfactory to PictureTel. Seller
and PictureTel will deliver to Buyer such warranty deeds, bills of sale,
instruments of assignment, including an instrument in the form of and other good
and sufficient instruments of transfer and the other instruments and documents
contemplated hereby, executed by Seller and PictureTel or their affiliates and
in form and substance reasonably satisfactory to Buyer, as Buyer may reasonably
require to vest in Buyer and Spectel Ireland all right, title and interest of
Seller and PictureTel and their affiliates in and to the Purchased Assets, and
Buyer and Spectel Ireland shall pay to Seller and
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PictureTel the amount, and deliver to Seller and PictureTel the other
instruments and documents required of them at the Closing.
Seller and PictureTel shall deliver to Buyer and Spectel
Ireland at the Closing possession of the Purchased Assets being sold pursuant to
this Agreement and the entire right, title and interest of Seller and PictureTel
in and to such Purchased Assets shall pass to Buyer and Spectel Ireland at the
Closing.
ARTICLE VIII
SUCCESSOR EMPLOYER
8.01 EMPLOYMENT WITH BUYER. Buyer, as a successor employer,
agrees to offer employment immediately after the Closing to all persons listed
on SCHEDULE 8.01 hereto who, immediately prior to the Closing, are employed by
Seller. Such offer of employment shall include provision for compensation at
rates substantially similar to the rates of compensation in effect for such
employees immediately prior to the Closing Date. (Those employees of Seller who
accept employment with Buyer are hereinafter referred to as the "Transferred
Employees.") Notwithstanding the foregoing, nothing herein shall be deemed to
require Buyer to continue to employ any such Transferred Employee for any
specific period of time after the Closing Date. Seller shall be responsible for
the payment of severance, if any, to any employee of Seller who refuses
employment with Buyer.
8.02 ACCRUED VACATION LIABILITY. Buyer shall pay to Seller as
of the Closing a sum equal to 50% of the accrued liability of the Transferred
Employees' vacation accrual under Seller's vacation policy in effect as of the
Closing Date. Seller shall be responsible for paying to the Transferred
Employees any and all vacation accrued during their tenure with Seller.
8.03 BENEFITS. PictureTel agrees to pay to Buyer all
retention bonus amounts as set forth on SCHEDULE 8.01 hereto which are generally
due and payable to the Transferred Employees who remain employed by Buyer on the
date which is 90 days after the Closing Date and on the date which is six months
after the Closing Date (collectively, "Retention Bonus Payment Dates"), no later
than five days after such Retention Bonus Payment Dates, unless an individual
Retention Plan requires otherwise, in which case PictureTel shall make payment
in accordance with the specific plan. Buyer agrees to pay the retention bonus
amounts received from PictureTel, less applicable withholding taxes, to the
Transferred Employees who remain employed by Buyer on the Retention Bonus
Payment Dates, no later than five days after receipt of such payments from
PictureTel.
8.04 THIRD PARTIES. The covenants of Buyer and Seller in this
Article VIII are not intended to create any right in any Transferred Employee or
his or her heirs, executors, beneficiaries or personal representatives.
ARTICLE IX
WORKERS' COMPENSATION AND PRODUCT LIABILITY RESPONSIBILITY
9.01 WORKERS' COMPENSATION. Seller will retain responsibility
for all workers' compensation claims of employees of Seller other than
Transferred Employees and will retain responsibility for workers' compensation
claims by Transferred Employees pending as of the Closing Date or arising as a
result of events occurring or conditions caused solely on or prior to the
Closing Date. For workers' compensation claims by Transferred Employees filed
after the Closing Date and arising solely as a result of events occurring or
conditions caused solely after the Closing Date, Buyer will be responsible. The
responsibility for claims by Transferred Employees relating to events occurring
or conditions caused both during the period before and the period after the
Closing Date shall be shared equitably by Buyer and Seller.
9.02 PRODUCT LIABILITY AND WARRANTY CLAIMS. At the Closing,
Buyer shall assume and agree to perform and discharge all product liability and
warranty claims (including claims for injury to person or property) and
litigation relating to the business conducted by Buyer and arising from products
sold after the Closing
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Date; Seller shall retain responsibility for such claims and litigation relating
to products sold by Seller or any predecessor of Seller's business on or prior
to the Closing Date.
9.03 RESPONSIBILITY FOR PRIOR CLAIMS. It is understood and
agreed that Buyer does not assume any liability for, and shall not otherwise be
responsible for, any product liability or other claims (including claims for
injury to person or property) of Seller and arising from products sold or
occurrences on or prior to the Closing Date, and Seller and PictureTel jointly
and severally agree to indemnify and hold harmless Buyer with respect to any
such claims as provided in Section 10.06.
ARTICLE X
POST-CLOSING COVENANTS
10.01 EXPENSES. Except as otherwise provided herein, Seller
and Buyer shall each bear their own costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby. Buyer shall be
responsible for the fees, commissions, expenses and reimbursements incurred by
or required to be paid to Buyer's and Spectel Ireland's professional advisors,
and Seller shall be responsible for the fees, commissions, expenses and
reimbursements incurred by or required to be paid to Seller's and PictureTel's
professional advisors. Buyer and Seller will each pay one-half of any fees
charged by any accountants retained to resolve disputes pursuant to Section 1.06
hereof.
10.02 FURTHER ASSURANCES. Subject to the terms and conditions
of this Agreement, each of the parties hereto will use its best efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the sale of the Purchased Assets, the Assumed
Liabilities and the other transactions contemplated by this Agreement. From time
to time after the date hereof (including after the Closing Date if requested),
Seller and its affiliates will, at their own expense and without further
consideration, execute and deliver such instruments and documents to Buyer as
Buyer or Spectel Ireland may reasonably request in order more effectively to
vest in Buyer and Spectel Ireland good title to the Purchased Assets and to more
effectively consummate the transactions contemplated by this Agreement. From
time to time after the date hereof, including after the Closing Date if
requested, Parent, Buyer and Spectel Ireland will, at their expense and without
further consideration, execute and deliver such instruments and documents to
Seller as Seller may reasonably request in order to more effectively transfer to
Buyer the Assumed Liabilities and to more effectively consummate the
transactions contemplated hereby.
10.03 COMMISSIONS AND FEES. Seller and PictureTel, on the one
hand, and Buyer and Spectel Ireland, on the other hand, shall each be
responsible for and shall pay any amounts owed respectively by such party, to
any broker, finder, financial adviser or other person is entitled to any
brokerage fees, commissions or finder's fees in connection with the transactions
contemplated hereby. Seller and PictureTel, on the one hand, and Buyer and
Spectel Ireland, on the other hand, will pay to the other or otherwise
discharge, and will jointly and severally indemnify and hold the other harmless
from and against, any and all claims or liabilities for all brokerage fees,
commissions and finder's fees incurred by reason of any action taken by such
party.
10.04 SALES, TRANSFER AND USE TAXES. Subject to the
following, all sales, transfer and use taxes incurred in connection with this
Agreement and the transactions contemplated hereby will be borne by Buyer, and
Buyer will, at its own expense, file all necessary tax returns and other
documentation with respect to all such sales, transfer and use taxes, and, if
required by applicable law, Seller will join in the execution of any such tax
returns or other documentation. Notwithstanding the foregoing, the parties
believe that no sales, transfer or use taxes will become due as a result of this
transaction. If the Commonwealth of Massachusetts seeks to collect such tax,
Seller shall reasonably contest such collection and if unsuccessful in such
opposition be liable for a sum up to and equal to US$100,000. Buyer shall be
liable for any amount in excess of US$100,000.
10.05 NONDISCLOSURE; NONCOMPETITION.
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(a) Seller and PictureTel agree not to use or disclose at any
time after consummation of the transactions contemplated hereby, except with the
prior written consent of an officer authorized to act in the matter by the Board
of Directors of Buyer, any trade secrets, proprietary information or other
information that Buyer considers confidential relating to designs, suppliers,
inventions, operations, marketing, cost and pricing data, master files or
customer lists utilized by Seller prior to the Closing or by Buyer or any of its
affiliates (the "Buyer Group"), or the skills, abilities and compensation of the
Buyer Group's employees, and all other similar information material to the
conduct of the Buyer Group's business, which is not presently generally known to
the public; PROVIDED, HOWEVER, that this provision shall not preclude Seller or
PictureTel from (i) the use or disclosure of such information which presently is
known generally to the public or which subsequently comes into the public
domain, other than by way of disclosure in violation of this Agreement or in any
other unauthorized fashion, or (ii) disclosure of such information required by
law or court order, provided that prior to such disclosure required by law or
court order Seller or PictureTel will give Buyer three business days' written
notice (or, if disclosure is required to be made in less than three business
days, then such notice shall be given as promptly as practicable after
determination that disclosure may be required) of the nature of the law or order
requiring disclosure and the disclosure to be made in accordance therewith.
(b) For a period of three years from the Closing Date, Seller,
PictureTel and their affiliates (the "PictureTel Group") shall not, without the
written consent of an officer authorized to act in the matter by the Board of
Directors of Buyer, directly or indirectly: (i) own, manage, operate, control,
invest in so that a more than 10% interest is acquired, whether as an officer,
director, employee, partner, investor, consultant, lender or otherwise, any
business entity which is engaged in, or is in any way related to or competitive
with, the business currently conducted by Seller; or (ii) on the PictureTel
Group's behalf or on behalf of anyone else engaged in any such line of business
(1) persuade or attempt to persuade any employee of any member of the Buyer
Group or any individual who was an employee of any member of the Buyer Group
during the one year prior to the date of this Agreement, to leave the employ of
any member of the Buyer Group or to become employed by any person other than the
members of the Buyer Group or hire any such employee; (2) persuade or attempt to
persuade any current client or former customer of any member of the Buyer Group
to cease doing business with, or to reduce the amount of business it does or
intends or anticipates doing with, Buyer (or any successor to Buyer's business);
or (3) solicit the business of any of such customer or former customer with
respect to the business conducted by Seller.
10.06 INDEMNIFICATION.
(a) BY SELLER AND PICTURETEL. Seller and PictureTel jointly
and severally agree to save, defend and indemnify Buyer and Spectel Ireland
against and hold them harmless from any and all claims, liabilities, losses,
damages, deficiencies, costs and expenses, of every kind, nature and
description, fixed or contingent (including, without limitation, interest,
penalties and counsel's fees and expenses in connection with any action, claim
or proceeding relating thereto or seeking enforcement of a party's obligations
hereunder) ("Losses"), asserted against, resulting to, imposed upon or incurred
by Buyer or Spectel Ireland, directly or indirectly, arising out of (i) any
breach of any representation, warranty, covenant or agreement made by Seller or
PictureTel under this Agreement, or (ii) any Retained Liability, or (iii) any
Environmental Claim; PROVIDED, HOWEVER, that (A) Seller and PictureTel shall not
have any obligation to indemnify Buyer or Spectel Ireland from and against any
Losses with respect to breaches described in (i) above until Buyer and Spectel
Ireland have suffered aggregate Losses by reason of all such breaches (excluding
de Minimis Claims as hereinafter defined) in excess of US$150,000, in which
event Buyer and Spectel Ireland shall be entitled to indemnification for the
full amount of their aggregate Losses, (B) in no event shall the aggregate of
Seller's and PictureTel's indemnification payments with respect to breaches
described in (i) above exceed the Purchase Price paid by Buyer and Spectel
Ireland hereunder, and (C) indemnification claims with respect to the
representations and warranties contained in Article III hereof must be made by
Buyer and Spectel Ireland within the survival period therefor specified in
Section 12.06 hereof. The foregoing limitations shall not apply with respect to
any Losses resulting from any breach of Seller's obligations under Section 10.08
hereof or with respect to any Losses arising out of any Retained Liability or
any third party claim. For purposes hereof, "de Minimis Claims" shall mean any
indemnification claim for which the amount of
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Losses claimed is less than US$5,000 (providing that any series of claims
arising from the same or substantially similar facts or circumstances shall be
treated as one claim for such determination).
(b) BY BUYER AND SPECTEL IRELAND. Buyer and Spectel Ireland
jointly and severally agree to save, defend and indemnify Seller and PictureTel
against and hold them harmless from any and all Losses arising out of (i) any
breach of any representation, warranty, covenant or agreement made by Buyer
under this Agreement, or (ii) any Assumed Liability; PROVIDED, HOWEVER, that (A)
Buyer and Spectel Ireland shall not have any obligation to indemnify Seller or
PictureTel from and against any Losses with respect to breaches described in (i)
above until Seller or PictureTel has suffered aggregate Losses by reason of all
such breaches (excluding de Minimis Claims) in excess of US$150,000, in which
event Seller and PictureTel shall be entitled to indemnification for the full
amount of their aggregate Losses, and (B) in no event shall the aggregate of
Buyer's and Spectel Ireland's indemnification payments with respect to breaches
described in (i) above exceed the Purchase Price paid by Buyer and Spectel
Ireland hereunder, and (C) indemnification claims with respect to the
representations and warranties contained in Article IV hereof must be made by
Seller and PictureTel within the survival period therefor specified in Section
12.06 hereof. The foregoing limitations shall not apply with respect to any
Losses arising out of any Assumed Liability or any third party claim.
10.07 DEFENSE OF CLAIMS.
(a) Should any claim, action or proceeding by or involving a
third party arise after the Closing Date for which any party (the "Indemnifying
Party") is liable for indemnification under the terms of this Agreement, the
other party (the "Indemnified Party") shall notify the Indemnifying Party within
a reasonable time after such claim, action or proceeding arises and is known to
the Indemnified Party (provided that the failure to give timely notice shall not
affect the right to indemnification hereunder except to the extent that the
Indemnifying Party is actually damaged or prejudiced by such delay), and if the
Indemnifying Party shall admit in writing its potential indemnification
obligation in respect thereof, the Indemnified Party shall give the Indemnifying
Party a reasonable opportunity:
(i) to take part in any examination of the books and
records;
(ii) to conduct any proceedings or negotiations in connection
therewith and necessary or appropriate to defend the Indemnified Party
or prosecute any claim, action, counterclaim or other proceeding with
respect thereto;
(iii) to take all other required steps or proceedings to
settle or defend any such claim, action or proceeding; and
(iv) to employ counsel to contest any such claim, action
or proceeding in the name of the Indemnified Party or otherwise.
The expenses of all proceedings, contests or lawsuits with
respect to such claims or actions shall be borne by the Indemnifying Party. If
the Indemnifying Party wishes to assume the defense and/or settlement of any
such claim or action, it shall give written notice to the Indemnified Party
admitting the possibility of its indemnification obligation in respect thereof
and stating that it intends to assume such defense within 15 days after notice
from the Indemnified Party of such claim or action (unless the claim or action
reasonably requires a response in less than 15 days after notice thereof is
given to the Indemnifying Party, in which event it shall notify the Indemnified
Party at least five days prior to such reasonably required response date), and
the Indemnifying Party shall thereafter assume the defense of such claim or
action, through counsel reasonably satisfactory to the Indemnified Party;
provided that the Indemnified Party may participate in any such defense at its
own expense. The Indemnified Party shall afford the Indemnifying Party's counsel
and other authorized representatives reasonable access during normal business
hours to all books, records, offices and other facilities and properties of the
Indemnified Party, and to the personnel of the Indemnified Party, and shall
otherwise use all reasonable efforts to cooperate with the Indemnifying Party,
such counsel and such other authorized representatives in connection with
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the exercise of the rights of the Indemnifying Party pursuant to this Section
10.07; PROVIDED, HOWEVER, that prior to the Indemnifying Party entering into any
settlement arrangement it must first acknowledge its obligation to indemnify the
Indemnified Party.
(b) If the Indemnifying Party shall not assume the defense of,
or if after so assuming it shall fail to actively defend, any such claim or
action, the Indemnified Party may defend against any such claim or action in
such manner as it may deem appropriate, and the Indemnified Party may settle
such claim or action on such terms as it may deem appropriate, and the
Indemnifying Party promptly shall reimburse the Indemnified Party for the amount
of such settlement and for all expenses, legal and otherwise, reasonably and
necessarily incurred by the Indemnified Party in connection with the defense
against and settlement of such claim or action. If no settlement of such claim
or action is made, the Indemnifying Party shall satisfy any judgment rendered
with respect to such claim or in such action, before the Indemnified Party is
required to do so, and pay all expenses, legal or otherwise, reasonably and
necessarily incurred by the Indemnified Party in the defense against such claim
or action.
(c) If a judgment is rendered against the Indemnified Party in
any action covered by the indemnification hereunder, or any lien attaches to any
of the assets of the Indemnified Party, the Indemnifying Party immediately upon
such entry or attachment shall pay such judgment in full or discharge such lien
unless, at the Indemnifying Party's expense and direction, an appeal is taken
under which the execution of the judgment or satisfaction of the lien is stayed.
If and when a final judgment is rendered in any such action, the Indemnifying
Party shall forthwith pay such judgment before the Indemnified Party is
compelled to do so.
10.08 TRANSITION SERVICES.
(a) After the Closing Date and up to and including January 7,
2001 (except as otherwise set forth below), PictureTel shall provide or cause to
be provided to Buyer, at no additional cost, other than actual third party
expenses incurred, to Buyer, the services set forth below for the business to be
carried on by Buyer with the assets of Seller (collectively, the "Services"),
each case in scope, quality and timeliness to be not less than those provided by
PictureTel to Seller in the six-month period prior to the date of this
Agreement:
information technology administration and support;
telephony services and support, through and including
February 28, 2001;
human resources services;
accounting software systems, general accounting
support and credit and collection; and
on-site support for the Singapore facility, as
currently provided.
In addition, PictureTel shall assist Buyer with the Year 2000
audit, and will provide such services as are reasonably requested by Buyer with
respect thereto.
(b) The Services shall be performed in accordance with
PictureTel's standard rules of operation in a competent and workmanlike manner
and in a no less diligent manner as such Services are performed by PictureTel
for its own operations. For purposes of this Section 10.08(b), "Services" shall
include audit assistance for the Year 2000.
(c) Buyer agrees to provide reasonable assistance to
PictureTel with regard to any audit and tax requirements relating to the Year
2000 and prior.
(d) All parties agree to retain any financial records related
to the Seller for a minimum of five years or until any active government review
is completed, whichever is longer.
(e) Buyer agrees to perform all services required under all
assumed contracts from the date of the Closing forward, regardless of when the
actual date of assignment for any particular agreement actually
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occurs; PROVIDED, THAT, Buyer shall not be required or obligated to perform
under any contract for which consent to assignment of such contract to Buyer
is not obtained.
(f) Seller hereby subleases to Buyer those certain leased
premises located at 000 Xxxxxxxxx Xxxx, 0xx Xxxxx Xxxx, Xxxxxxx, XX 00000 under
the lease with 200 Minuteman Limited Partnership ("Lease"), which premises are
approximately 35,910 sq. ft., as depicted as Area A on Exhibit B of the Lease
(the "3rd Floor Lease Premises"). Seller hereby subleases the 3rd Floor Lease
Premises to Buyer for that period of time which begins on the Closing Date and
ends on December 27, 2000. Buyer shall be responsible for payment to PictureTel,
as agent for Seller, of the monthly rental payment of US$56,109.38 + CAM
(US$9,821) + taxes (US$7,170.90) for possession of the 3rd Floor Lease Premises
during such period; payment for the sublease by Buyer shall be due to Seller on
December 1, 2000. Buyer will be responsible for insuring its contents located
within the 3rd Floor Lease Premises during the term of the sublease. Buyer will
not assume liability under the Lease, but merely sublease the 3rd Floor Lease
Premises and occupy the same pursuant to the terms and conditions of the Lease,
as if Buyer were the Tenant under the Lease.
(g) Seller has entered into a lease for certain leased
premises located at 000 Xxxxxxxxx Xxxx, 0xx Xxxxx Xxxx, Xxxxxxx, XX 00000 under
a lease with 200 Minuteman Limited Partnership, as amended ("2nd Floor Lease"),
which premises are approximately 35,850 sq. ft. ("2nd Floor Lease Premises"). In
connection with the execution of the 2nd Floor Lease, Seller paid to Landlord a
deposit of US$537,825. Buyer hereby agrees to deliver to PictureTel, as agent
for Seller, at the Closing, cash in the amount of US$537,825. Should completion
of modifications to the 2nd Floor Lease Premises with respect to manufacturing
and engineering space not be completed by December 27, 2000, PictureTel will
provide Seller space within PictureTel leased premises suitable for
manufacturing and engineering functions, in scope and quality comparable to such
functions carried on by Seller prior to the Closing, at no charge to Seller,
until such time as the manufacturing and engineering space is complete at the
2nd Floor Lease Premises.
(h) If Buyer requires services beyond the time periods set
forth in this Section 10.08, the parties agree to negotiate in good faith to
provide additional services until no later than March 31, 2000 upon such terms
and conditions as may be agreed by the parties.
ARTICLE XI
RIGHTS OF ORDINARY SHARES
11.01 REGISTRATION RIGHTS. In the event Parent shall register
for public sale in a secondary offering any Ordinary Shares held by holders of
outstanding Ordinary Shares of Parent ("Selling Holders"), at any time after one
year from and after the closing of a public offering of Parent's Ordinary Shares
in any country ("IPO") and prior to three years after the closing of the IPO,
then Buyer or Parent shall give adequate prior notice to PictureTel and then
Parent shall:
(a) promptly give written notice of the proposed registration,
qualification or compliance to PictureTel or the other holders of
Ordinary Shares issued pursuant to this Agreement; and
(b) as soon as practicable, use its reasonable best efforts to
effect such registration, qualification or compliance as may be so
requested and as would permit or facilitate the sale and distribution
of all or such portion of such Ordinary Shares as are specified in such
request, together with all or such portion of the Ordinary Shares of
PictureTel and any other holders joining in such request with all costs
and expenses, other than filing fees, paid by Buyer or Parent;
provided, however, that Parent shall not be obligated to take any
action to effect any such registration, qualification or compliance
pursuant to this Section 11.01:
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(i) In any jurisdiction in which Parent would be
required to execute a general consent to service of process in
effecting such registration, qualification or compliance
unless Parent is already subject to service in such
jurisdiction;
(ii) During the period starting with the date 60 days
prior to Parent's estimated date of filing of, and ending on
the date 180 days immediately following the effective date of
any registration statement pertaining to securities of Parent
to be sold for the account of Parent; provided that Parent is
actively employing in good faith all reasonable efforts to
cause such registration statement to become effective;
(iii) After Parent has effected two such
registrations pursuant to this Section 11.01 which have been
declared or ordered effective and pursuant to which securities
have been sold; or
(iv) If Parent shall furnish to such Selling Holders
a certificate signed by the President of Parent stating that
in the good faith judgment of its Board of Directors it would
be seriously detrimental to Parent or its shareholders for a
registration statement to be filed in the near future, in
which case Parent's obligation to use its reasonable best
efforts to register, qualify or comply under this Section
11.01 shall be deferred for a period not to exceed 180 days
from the date of receipt of written request from the Selling
Holders, provided that Parent may not exercise this deferral
right more than once.
The right of PictureTel to registration pursuant to this
Section 11.01 shall be conditioned upon PictureTel's participation in such
underwriting and the inclusion of PictureTel's Ordinary Shares in the
underwriting to the extent requested (unless otherwise mutually agreed by a
majority in interest of the Selling Holders, intending to participate in such
registration and PictureTel with respect to such participation and inclusion) to
the extent provided herein.
Parent shall (together with all holders selling Ordinary
Shares) enter into an underwriting agreement in customary form with the managing
underwriter selected for such underwriting by Parent. Notwithstanding any other
provision of this Section 11.01, if the managing underwriter advises the Selling
Holders in writing that marketing factors require a limitation of the number of
shares to be underwritten, then Parent shall so advise all holders and the
number of shares of Ordinary Shares that may be included in the registration and
underwriting shall be allocated among all holders pro rata, in proportion to the
respective amounts of Ordinary Shares held by all such holders at the time of
filing the registration statement. No Ordinary Shares excluded from the
underwriting by reason of the underwriter's marketing limitation shall be
included in such registration. To facilitate the allocation of shares in
accordance with the above provisions, Parent or the underwriters may round the
number of shares allocated to any holder to the nearest 100 shares.
If PictureTel disapproves of the terms of the underwriting, it
may elect to withdraw therefrom by written notice to Parent, the managing
underwriter and the Selling Holders. The Ordinary Shares so withdrawn shall also
be withdrawn from registration, and such Ordinary Shares shall not be
transferred in a public distribution prior to 180 days after the effective date
of such registration, or such other shorter period of time as the underwriters
may require.
If the managing underwriter has not limited the number of
Ordinary Shares to be underwritten, Parent may include securities for its own
account or for the account of others in such registration if the managing
underwriter so agrees and if the number of Ordinary Shares which would otherwise
have been included in such registration and underwriting will not thereby be
limited.
ARTICLE XII
MISCELLANEOUS
12.01 BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
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12.02 NO ASSIGNMENT. This Agreement may not be assigned by
any party hereto without the prior written consent of the other parties,
PROVIDED, HOWEVER, that each party may assign its rights, but not its
obligations, hereunder, in whole or in part, to any corporation or other entity
controlled by, controlling or under common control with such party, and such
party or its assignee may assign their rights hereunder, in whole or in part, to
any purchaser of substantially all of the assets or business of such party or
such assignee. Any attempted or purported assignment by either party other than
in accordance with this Section 12.02 shall be null and void. Nothing herein is
intended to prohibit Seller or PictureTel from assigning the proceeds of the
sale hereunder to a third party. Prior to Closing Buyer may assign its rights
and obligations hereunder only an affiliate thereof.
12.03 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, and by any party on separate counterparts, each of which
as so executed and delivered shall be deemed an original but all of which
together shall constitute one and the same instrument, and it shall not be
necessary in making proof of this Agreement as to any party hereto to produce or
account for more than one such counterpart executed and delivered by such party.
Execution by facsimile signature shall be deemed to be, and shall have the same
effect as, execution by original signature.
12.04 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
Delaware (without regard to conflict of law principles) as to all matters,
including but not limited to matters of validity, construction, effect,
performance and remedies.
12.05 SUITS IN MASSACHUSETTS. The parties agree that any
action or proceeding relating in any way to this Agreement or the transactions
contemplated hereby shall be brought and enforced in either the state or federal
district courts for the Commonwealth of Massachusetts, and the parties hereby
waive any objection to jurisdiction or venue in any such proceeding commenced in
or removed to such courts.
12.06 SURVIVAL. The representations, warranties, indemnities
and agreements of the parties to this Agreement contained herein or in any
document delivered pursuant to or in connection herewith shall survive the
Closing for 18 months and shall survive any investigation by any party hereto;
PROVIDED, HOWEVER, that the representations and warranties of Seller and
PictureTel contained in Sections 3.05, 3.10 and 3.20 shall survive until the
expiration of the relevant statute of limitations. The covenants contained in
Section 5.05 and Article X shall survive the Closing indefinitely, except as
otherwise provided therein.
12.07 NOTICES. All notices required to be given under the
terms of this Agreement or which any of the parties desires to give hereunder
shall be in writing and personally delivered or sent by registered or certified
mail, return receipt requested, or sent by overnight courier, addressed as
follows:
(a) TO PARENT, BUYER OR SPECTEL IRELAND. If to Parent,
Buyer or Spectel Ireland addressed to:
Spectel Group Ltd.
00 Xxxxxxxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxx Xxxxxx
Xxxxxxx
Fax: 000-000-0000-0000
Attn: Xxxxxxxx X. X'Xxxxxxx, CFO
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With a copy to:
Xxxxxx, Xxxxxxx & Xxxxxxx
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Attn: Xxxx X. Xxxxxxxxx, Esq.
(b) TO SELLER OR PICTURETEL. If to Seller or PictureTel
addressed to:
PictureTel Corporation
000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Mr. W. Xxxxxx Xxxxxxxxx, Xx., General
Counsel
Telecopier No.: 000-000-0000
With a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxx, Esq.
Telecopier No.: 000-000-0000
Any party may designate a change of address at any time by
giving written notice thereof to the other parties.
12.08 AMENDMENT AND MODIFICATION. This Agreement may be
amended, modified or supplemented only by a written instrument executed by all
of the parties hereto.
12.09 WAIVER OF COMPLIANCE. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party or parties
entitled to the benefits thereof only by a written instrument signed by the
party or parties granting such waiver, but any such waiver or the failure to
insist upon strict compliance with any obligation, covenant, agreement or
condition herein, shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other failure or breach.
12.10 INTERPRETATION. The table of contents and the article
and section headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall not in any way
affect the meaning or interpretation of this Agreement. As used in this
Agreement, the term "person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization or a governmental entity or any department or agency thereof. As
used in this Agreement, the term "subsidiary," when used in reference to any
other person, shall mean any corporation of which outstanding securities having
ordinary voting power to elect a majority of the Board of Directors of such
corporation are owned directly or indirectly by such other person. As used in
this Agreement, the term "generally accepted accounting principles" means
generally accepted accounting principles as in effect and as applied in the
United States. As used in this Agreement, the term "affiliate" shall have the
meaning set forth in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934. When used herein, the masculine, feminine or
neuter gender and the singular or plural number shall each be deemed to include
the others whenever the context so indicates or permits.
12.11 ENTIRE AGREEMENT. This Agreement, including the
schedules, exhibits, documents, certificates and instruments referred to herein,
embodies the entire agreement and understanding of the parties
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hereto in respect of any transactions contemplated by this Agreement and
supersedes all prior agreements, representations and understandings among the
parties with respect thereto or with respect to the transactions contemplated
hereby.
12.12 GUARANTEE BY PICTURETEL. PictureTel hereby guarantees
the payment and performance by Seller of each and every obligation and agreement
of Seller pursuant to this Agreement.
12.13 GUARANTEE BY PARENT. Parent hereby guarantees the
payment and performance by Buyer and Spectel Ireland of each and every
obligation and agreement of Buyer and Spectel Ireland pursuant to this
Agreement.
12.14 SPECIFIC PERFORMANCE.
(a) Seller and PictureTel acknowledge that, in view of the
uniqueness of the business of Seller and the transactions contemplated hereby,
Buyer and Spectel Ireland may not have an adequate remedy at law for money
damages in the event that this Agreement with respect to the sale of the
Purchased Assets has not been performed in accordance with its terms by Seller
and PictureTel, and therefore Seller and PictureTel agree that Buyer and Spectel
Ireland shall be entitled to specific enforcement of the terms hereof with
respect to the sale of the Purchased Assets and the other transactions
contemplated hereby in the event of breach by Seller or PictureTel in addition
to any other remedy to which Buyer and Spectel Ireland may be entitled, at law
or in equity, for such breach.
(b) In the event of a breach or threatened breach by the
PictureTel Group of their covenants under Section 10.05 hereof, Seller and
PictureTel acknowledge that Buyer and Spectel Ireland may not have an adequate
remedy at law for money damages. Accordingly, in the event of such breach or
threatened breach, Buyer and Spectel Ireland will be entitled to such equitable
and injunctive relief as may be available to restrain the PictureTel Group from
the violation of the provisions of said Section 10.05 in addition to any other
remedy to which Buyer and Spectel Ireland may be entitled, at law or in equity,
for such breach or threatened breach.
12.15 SEVERABILITY OF COVENANTS. Seller and PictureTel
acknowledge that the covenants contained in Section 10.05 of this Agreement are
reasonable and necessary for the protection of Buyer and Spectel Ireland and
their investment in the Purchased Assets and that each covenant, and the period
or periods of time and the types and scope of restrictions on the activities
specified therein are, and are intended to be, divisible and shall be deemed a
series of separate covenants, one for each state or jurisdiction to which they
are applicable. In the event that any provision of this Agreement, including any
sentence, clause or part hereof, shall be deemed contrary to law or invalid or
unenforceable in any respect by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect to the extent that such
provisions can still reasonably be given effect in accordance with the
intentions of the parties, and any invalid and unenforceable provisions shall be
deemed, without further action on the part of the parties, modified, amended and
limited solely to the extent necessary to render the same valid and enforceable.
ARTICLE XIII
TERMINATION AND ABANDONMENT
13.01 TERMINATION. This Agreement may be terminated at
any time prior to the Closing:
(a) by the written agreement of all of the parties hereto;
(b) by Buyer if there has been a material violation or
breach by Seller or PictureTel of any covenant, agreement, representation or
warranty contained in this Agreement entitling Buyer not to Close under
Article VI;
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(c) by Seller if there has been a material violation or breach
by Buyer or Spectel Ireland of any covenant, agreement, representation or
warranty contained in this Agreement entitling Seller not to Close under Article
VI; or
(d) by either Buyer or Seller if the Closing of the
transactions contemplated by this Agreement shall not have been consummated on
or before December 15, 2000, PROVIDED, HOWEVER, that termination pursuant to
this subsection (d) shall not relieve any party of the liabilities contemplated
by the proviso to the second sentence of Section 13.02 hereof, if applicable.
13.02 PROCEDURE AND EFFECT OF TERMINATION. In the event of
termination of this Agreement and abandonment of the transactions contemplated
hereby by any of the parties pursuant to Section 13.01(b), (c) or (d) of this
Agreement, written notice thereof shall forthwith be given by the terminating
party to the other parties and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action by
any of the parties hereto. If this Agreement is properly terminated, none of the
parties hereto nor any of their respective directors, officers or affiliates, as
the case may be, shall have any liability or further obligation to any of the
other parties or any of their respective directors, officers or affiliates, as
the case may be, pursuant to this Agreement; PROVIDED, HOWEVER, that if any such
termination shall result from the breach of a warranty or the failure of a party
to fulfill a condition to the performance of the obligations of the other
parties or to perform a covenant or agreement contained in this Agreement or
from any other willful breach by any party to this Agreement, such party shall
be solely liable for any and all damages, costs and expenses (including, but not
limited to, counsel's fees) sustained or incurred by the other parties as a
result of such failure or breach. The provisions of Sections 5.05, 12.04, 12.05,
12.07, 12.12, 12.13, 12.14 and 13.02 shall survive any termination hereof.
[Signatures appear on following page.]
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IN WITNESS WHEREOF, the parties have each caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
SPECTEL GROUP LTD.
By:
----------------------------------
Name:
Title:
MULTILINK, INC. (Delaware)
By:
----------------------------------
Name:
Title:
SPECTEL LIMITED
By:
----------------------------------
Name:
Title:
PICTURETEL CORPORATION
By:
----------------------------------
Name:
Title:
MULTILINK, INC. (Massachusetts)
By:
----------------------------------
Name:
Title:
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EXHIBIT A
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Attached.
