ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of May __, 2003 (the
"Agreement Date") by and between Princeton Video Image, Inc., a Delaware
corporation ("Seller"), and PVI Virtual Media Services, LLC, a Delaware limited
liability company ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller is engaged in the business, directly and through its
Subsidiaries, of developing and marketing its Intellectual Property, including a
real-time video insertion system with its patented computer vision technology
and proprietary hardware and software system, known as the Live Video Insertion
System ("L-VIS(R)") and to develop products to allow viewers to interact with
video programming (the "Business");
WHEREAS, Seller, on or about this date, is commencing a case (the
"Chapter 11 Case") under chapter 11 of title 11 of the United States Code, 11
U.S.C. Sections 101 et seq. (the "Bankruptcy Code") in the United States
Bankruptcy Court for the District of New Jersey (the "Bankruptcy Court"); and
WHEREAS, Seller desires to sell to Buyer all of the assets of the
Business, and Buyer desires to purchase such assets, all in the manner and
subject to the terms and conditions set forth in this Agreement and pursuant to
Sections 105, 363, 365 and 1146 of the Bankruptcy Code and Fed. R. Bankr. P.
2002, 6004, 6006, 9014 and 9019.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used herein, the terms below shall have the
following respective meanings:
"Affiliate" means, as to any Person, any other Person or group acting
in concert in respect of the Person that, directly or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control with
that Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person or group of Persons, means
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of the Person, whether through the
ownership of voting securities, by contract, or otherwise.
"Agreement" means this Asset Purchase Agreement, together with the
Exhibits and Schedules, in each case as amended, restated, supplemented or
otherwise modified from time to time.
"Agreement Date" has the meaning specified in the preamble.
"Alternative Transaction" has the meaning specified in Section 8.1.
"Assumed Agreements" means all contracts and leases related to the
Business listed on Exhibit A and all other contracts and leases related to the
Business which Buyer agrees to assume by giving notice to Seller of such
assumption within 10 days prior to Closing; and Buyer may also elect to remove
any contract or lease from Exhibit A on notice to Seller given at least 5 days
prior to Closing.
"Assumed Liabilities" means all liabilities which arise and relate to
the period after the Closing Date under the Assumed Agreements. For avoidance of
doubt, Assumed Liabilities excludes any Liability attributable to any act,
occurrence or omission which occurred prior to Closing.
"Auction" means the sale of the Purchased Assets by auction as provided
in the Bidding Procedures Order.
"Bankruptcy Code" has the meaning specified in the recitals.
"Bankruptcy Court" has the meaning specified in the recitals.
"Bankruptcy Court Approval" has the meaning specified in Section
7.1(d).
"Bidding Procedures Order" means the order of the Bankruptcy Court
pursuant to 11 U.S.C. ss.ss.363(b) and 105(a) and Fed. R. Bankruptcy P. 2002,
6004, 6006, 9014 and 9019, in substantially the form of Exhibit G, approving (a)
the Bidding Procedures, (b) the Form and Manner of Notice of (i) the Sale of
Certain Assets to PVI Virtual Media Services, LLC and (ii) the Assumption and
Assignment of Certain Executory Contracts and Unexpired Leases, and Granting
Related Relief and (c) such other terms as Buyer or its counsel may reasonably
require.
"Business Day" means any day other than a Saturday, Sunday or a legal
holiday on which banking institutions in the State of Delaware are not required
to open.
"Buyer" has the meaning specified in the preamble.
"Challenge Deadline" shall mean the earlier of the date (a) 60 days
after the formation of the Creditors Committee or (b) 75 days after the filing
of the Chapter 11 petition commencing the Chapter 11 Case.
"Chapter 11 Case" has the meaning specified in the recitals.
"Claim Challenges" has the meaning specified in the order to be entered
by the Bankruptcy Court approving the DIP Facility.
"Closing" has the meaning specified in Section 3.1(a).
"Closing Date" has the meaning specified in Section 3.1(a).
"Contract" means any oral or written agreement, lease, license,
purchase order, commitment for the purchase of goods, or other contract,
instrument or arrangement to which Seller is a party and which relates to the
Business.
"Creditors Committee" means the official committee of unsecured
creditors in the Chapter 11 Case.
"Cure Amount" means the amount necessary for Seller to assume and
assign to Buyer the Assumed Agreements pursuant to Section 365 of the Bankruptcy
Code, subject only to the Assumed Liabilities, as such amount is determined in
accordance with the Bidding Procedure Order or is otherwise determined by the
Bankruptcy Court.
"DIP Facility" means that certain Debtor-in-Possession Loan and
Security Agreement by and between Seller, as borrower, and Buyer, as lender, in
the aggregate principal amount of up to $1.76 million.
"Excluded Assets" means (i) any cash or cash equivalents, (ii) any
accounts receivable, (iii) any avoidance actions under the Bankruptcy Code,
(iii) any rights under any lease or executory contract which is not an Assumed
Agreement, (iv) any real estate owned or leased by Seller except leases which
are Assumed Agreements and (v) all of Seller's interest in Princeton Video Image
Europe, N.V.
"Excluded Liabilities" has the meaning specified in Section 2.2.
"Final Order" means an order or judgment of the Bankruptcy Court or any
other court of competent jurisdiction (i) that is not the subject of a pending
appeal, petition for certiorari, motion for reconsideration or other proceeding
for review, rehearing or reargument, (ii) that has not been reversed, stayed,
modified or amended and (iii) respecting which the time to appeal, to petition
for certiorari, to move for reconsideration or to seek review, rehearing or
reargument shall have expired, as a result of which said order shall have become
final in accordance with Rule 8002 of the Federal Rules of Bankruptcy Procedure
and other applicable Laws.
"Intellectual Property" means the following property of Seller: (i) all
inventions (whether patentable or unpatentable and whether or not reduced to
practice), all improvements
thereto, and all rights arising under or in connection with all Patents, Patent
Applications and Patent disclosures related to the Purchased Assets, (ii) all
trademarks, service marks, trade dress, logos, slogans, trade names and
corporate names (including, without limitation, "L-VIS(R)" and "iPoint(TM)"),
together with all translations, adaptations, derivations and combinations
thereof (including all goodwill associated therewith), and all applications,
registrations and renewals related to the Purchased Assets, (iii) all
copyrightable works, all copyrights and all applications, registrations and
renewals related to the Purchased Assets, (iv) all trade secrets and
confidential business information (including, without limitation, ideas,
research, know-how, techniques, methods, data, product drawings, training
manuals, clinical and regulatory strategies, and business and marketing plans
and proposals) related to the Purchased Assets, (v) all computer software
related solely to the Purchased Assets and not other applications, (vi) all
computer generated data and documentation related to the Purchased Assets, (vii)
all Third Party License Rights related to the Purchased Assets, (viii) all
designs, plans and documentation in whatever form related to products under
development or products subject to a change in design or composition, (ix) all
other proprietary rights related to the Purchased Assets, and (x) all copies and
tangible embodiments thereof (in whatever form or medium) related to the
Purchased Assets.
"Interests" means all liens (including mechanics', materialmen's and
other consensual and non-consensual liens and statutory liens), security
interests, encumbrances and claims (including, but not limited to, any "claim"
as defined in section 101(5) or "lien" as defined in section 101(37) of the
Bankruptcy Code), reclamation claims, mortgages, deeds of trust, pledges,
covenants, restrictions, hypothecations, charges, indentures, loan agreements,
instruments, contracts, leases, licenses, options, rights of first refusal,
contracts, offsets, recoupment, rights of recovery, judgments, orders and
decrees of any court or foreign or domestic governmental entity, claims for
reimbursement, contribution, indemnity or exoneration, assignment, preferences,
debts, charges, suits, licenses, options, rights of recovery, interests,
products liability, alter-ego, environmental, successor liability, tax and other
liabilities, causes of action and claims, or other encumbrances or restrictions
on or conditions to transfer or assignment of any kind (including without
limitation to the generality of the foregoing restrictions or conditions on or
to the transfer, assignment, or renewal of licenses, permits, registrations, and
authorizations or approvals of or with respect to governmental units and
instrumentalities) to the fullest extent of the law, in each case whether
secured or unsecured, xxxxxx or inchoate, filed or unfiled, scheduled or
unscheduled, noticed or unnoticed, recorded or unrecorded, perfected or
unperfected, allowed or disallowed, contingent or non-contingent, liquidated or
unliquidated, matured or unmatured, material or non-material, disputed or
undisputed, or known or unknown, whether arising prior to, on, or subsequent to
the commencement of the Bankruptcy Case, whether imposed by agreement,
understanding, law, equity or otherwise.
"Inventory" means all inventory related to the Business which is owned
by Seller on the Closing Date including all inventories of raw materials,
work-in-process, finished goods, supplies, parts and packaging materials.
"Liabilities" means, as to any Person, all debts, claims of any kind or
nature, including contingent or unliquidated claims or any other claims falling
within the definition set forth in Section 101(5) of the Bankruptcy Code,
liabilities, commitments, responsibilities, and obligations of any kind or
nature whatsoever, direct or indirect, absolute or contingent, whether known or
unknown and whether or not actually reflected, or required to be reflected, in
such Person's balance sheet or other books and records.
"Machinery and Equipment" has the meaning specified in Section 2.1(a).
"Material Adverse Effect" means any state of facts, events, changes or
effects that, individually or aggregated with other states of facts, events,
changes or effects, is directly and materially adverse to or directly and
materially impairs, the value, condition or use of the Purchased Assets.
"Notices" has the meaning specified in Section 10.4.
"Order" means and includes any writ, judgment, decree, injunction,
award or other order of any court, arbitrator or governmental or regulatory
authority.
"Patent" means United States Letters Patent and design patent,
including, without limitation, any extension, registration, confirmation,
continuation, division, continuation-in-part, reissue, re-examination or renewal
thereof, and including any foreign equivalents of the foregoing, relating to
L-VIS(R) or iPoint(TM) or any other Intellectual Property of Seller.
"Patent Application" means an application, including a provisional
application, for a Patent.
"Permits" has the meaning specified in Section 4.8.
"Person" means an individual, a partnership, a joint venture, a
corporation, a business trust, a limited liability company, a trust, an
unincorporated organization, a joint stock company, a labor union, an estate, a
Governmental Entity or any other entity.
"Pre-Petition Facility" means the following credit facilities: (a) the
Note Purchase and Security Agreement, dated as of June 25, 2002, between Seller
and PVI Holding, LLC, as amended and (b) the Note Purchase and Security
Agreement, dated as of February 18, 2003, between Seller, Presencia en Medios,
S. A. de C.V. and PVI Holding, LLC, as amended.
"Purchase Price" has the meaning specified in Section 3.2.
"Purchased Assets" means all of the tangible and intangible personal
property of Seller, including all assets related to the Company's use, assembly,
manufacture, design, development, marketing and sale of L-VIS(R) and iPoint(TM),
wherever located, including, but not limited to: its interest in the
Subsidiaries; drawings; specifications; procedures; processes;
complaint files; all records related to regulatory matters; Machinery and
Equipment; fixtures; tooling; dies; molds; all computer generated drawings and
information related to the Purchased Assets; computer hardware related to the
Purchased Assets; Inventory; data bases; regulatory filings; assignable Permits;
prepaid airtime, prepaid discounts, other obligations owing to the Company;
goodwill; all Intellectual Property; customer and prospect lists; all Assumed
Agreements; the right to do business with existing customers and vendors;
proprietary or other rights regarding the Business; sales and promotional
materials, and all assets related to the developing and marketing a real-time
video insertion system; with the exception of the Excluded Assets.
"Sale Order" means an order substantially in the Form of Exhibit D
entered by the Bankruptcy Court that includes (i) a finding that the Transaction
is in good faith and otherwise satisfies the provisions of Section 363,
including Sections 363(m) and (n), of the Bankruptcy Code; (ii) authorization
and approval of the Transaction pursuant to this Agreement; (iii) a provision
that the Purchased Assets are being transferred free and clear of all Interests;
(iv) a provision that the permits the Buyer to acquire the obligations
represented by the Secured Loan Credit Amount from its Affiliates prior to the
Closing and to "credit bid" and use the Secured Loan Credit Amount as a set off
to its payment of the Purchase Price and (v) such other terms as Buyer or its
counsel may reasonably require.
"Secured Loan Credit Amount" means all amounts due to the Buyer or any
of its Affiliates at the Closing Date, including but not limited to Cablevision,
PVI Holding, LLC and Presencia en Medios, S.A. de C.V., under the DIP Facility
and the Pre-Petition Facility.
"Seller" has the meaning specified in the preamble.
"Subsidiaries" means all entities wholly or partially owned by Seller,
directly or indirectly, including but not limited to Princeton Video Image Latin
America, LLC, PVI LA, LLC, Publicidad Virtual, S.A. de C.V., Princeton Video
Image Israel, Ltd., and those other entities listed on Exhibit E, but excluding
Princeton Video Image Europe, N.V.
"Successful Bid" means, in the event the Purchased Assets are sold by
Auction, the bid accepted by Seller pursuant to which the Purchased Assets are
sold.
"Successful Bidder" means the Person who submits the Successful Bid.
"Third Party License Rights" means all permissions, licenses, covenants
not to xxx, grants, and other express or implied authorization to make, use,
sell, import, create derivative works, publicly display, publicly perform, rent,
or otherwise operate that may be needed by the Business to avoid violating an
Intellectual Property right of a third party relating to L-VIS(R) and
iPoint(TM).
"Transaction" means the sale of the Purchased Assets pursuant to the
terms of this Agreement.
1.2 Interpretation.
(a) Whenever the words "include," "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words
"without limitation."
(b) Words denoting any gender shall include all genders. Where a
word or phrase is defined herein, each of its other grammatical forms shall
have a corresponding meaning.
(c) A reference to any party to this Agreement or any other
agreement or document shall include such party's successors and permitted
assigns.
(d) A reference to any legislation or to any provision of any
legislation shall include any modification or re-enactment thereof, any
legislative provision substituted therefor and all regulations and
statutory instruments issued thereunder or pursuant thereto.
(e) All references to "$" and dollars shall be deemed to refer to
United States currency.
(f) All references to any financial or accounting terms shall be
defined in accordance with GAAP as applicable in the United States.
(g) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(h) The meanings given to terms defined herein shall be equally
applicable to both singular and plural forms of such terms.
(i) Buyer and Seller hereby acknowledge that (i) Buyer and Seller
jointly and equally participated in the drafting of this Agreement and all
other agreements contemplated hereby, (ii) Buyer and Seller have been
adequately represented and advised by legal counsel with respect to this
Agreement and the transactions contemplated hereby, and (iii) no
presumption shall be made that any provision of this Agreement shall be
construed against either party by reason of such role in the drafting of
this Agreement and any other agreement contemplated hereby.
(j) The headings of the Articles and Sections herein are inserted
for convenience of reference only and are not intended to be a part of, or
to affect the meaning or interpretation of, this Agreement.
ARTICLE II
TRANSFER OF ASSETS
2.1 Assets to be Acquired. At the Closing, and upon the terms and
conditions set forth herein, Seller shall sell, convey, assign, transfer and
deliver to Buyer, and Buyer shall purchase, acquire and accept, all right, title
and interest, free and clear of all Interests and Liabilities, in each and all
of the Purchased Assets including but not limited to all of Seller's interest in
the Subsidiaries, the Intellectual Property and the machinery and equipment
listed on Exhibit B (the "Machinery and Equipment").
For the avoidance of doubt, Seller shall retain and shall not transfer
to Buyer any of the Excluded Assets.
2.2 Liabilities. With the exception of the Assumed Liabilities, Buyer
shall not and does not assume any Liability of Seller or the Business
whatsoever, disclosed or undisclosed, liquidated or unliquidated, or contingent
or noncontingent (collectively, the "Excluded Liabilities").
ARTICLE III
CLOSING; PURCHASE PRICE
3.1 Closing; Transfer of Possession; Certain Deliveries.
(a) The consummation of the transactions contemplated herein (the
"Closing") shall take place on or before eleven (11) calendar days after
entry of the Sale Order, provided that all of the conditions set forth in
Section 7.1 hereof have been satisfied or waived by Buyer, or on such other
date as the parties hereto shall mutually agree. The Closing shall be held
at the offices of Xxxxxxxxxx Xxxxxxx PC, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx,
Xxx Xxxxxx at 10:00 a.m., local time, unless the parties hereto otherwise
agree. The actual date of the Closing is herein called the "Closing Date."
For purposes of this Agreement, from and after the Closing, the Closing
shall be deemed to have occurred at 12:01 A.M. on the Closing Date.
(b) At the Closing, Seller shall deliver to Buyer:
(i) duly executed bills of sale, in the form provided by
Buyer, transferring the Purchased Assets to Buyer;
(ii) Assignment and Assumption of Assumed Agreements duly
executed by Seller in the form attached hereto as Exhibit C (the
"Assignment of Agreements");
(iii) all other instruments of conveyance and transfer, in
form provided by Buyer, as are necessary to convey the Purchased Assets
to Buyer, including an assignment of all Patents, Patent Applications
and Trademarks in to be recorded in the U.S. Patent and Trademark
Office in the form attached hereto as Exhibit F (the "Patent
Assignment") and such other instruments of conveyance and transfer as
are necessary or desirable for transferring Seller's rights in the
Intellectual Property in any foreign jurisdictions, including all
jurisdictions referenced on Schedule 4.6; and
(iv) evidence satisfactory to Buyer that the Cure Amount has
been or will be paid by Seller.
(c) At the Closing, Buyer shall deliver to Seller:
(i) the Purchase Price; and
(ii) an Assignment of Agreements duly executed by Buyer.
3.2 Purchase Price. The Purchase Price is (i) $200,000 plus (ii)
satisfaction of the obligations of the Seller to repay principal, interest and
other charges under the DIP Facility plus (iii) satisfaction of the obligations
of the Seller to repay principal, interest and other charges under the
Pre-Petition Facility (approximately $8.3 million), plus (iv) waiver by
Presencia of its claim for Cure Costs (approximately $64,000), plus (v) the
assumption of the Assumed Liabilities, decreased by the sum of all transfer
taxes and sales taxes, if any, payable by Buyer in connection with the transfer
of the Purchased Assets to Buyer.
3.3 Payment of Purchase Price. The Purchase Price shall be paid as
follows:
(a) The Buyer shall credit bid the Secured Loan Credit Amount, so
that the Secured Loan Credit Amount is treated as a cash payment by Buyer
to Seller, followed by a cash payment by Seller to Buyer in satisfaction of
all amounts due under the DIP Facility and the Pre-Petition Facility.
(b) The Buyer shall execute such documents, or cause the execution
of such documents, as are necessary to waive the Presencia Cure Cost claim
and assume the Assumed Liabilities.
(c) The balance of the Purchase Price shall be paid in immediately
available funds by wire transfer to an account specified by Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as expressly set forth on the Disclosure Schedule annexed
hereto, Seller hereby represents and warrants to Buyer that, as of the Agreement
Date and as of the Closing Date (except with respect to representations and
warranties made as of a particular date, which shall be deemed to be made only
as of such date), as follows. Any exception to the following representations and
warranties listed on the Disclosure Schedule shall apply to each representation
herein to which the exception clearly relates, whether or not each
representation is specifically cross-referenced in the exception.
4.1 Due Organization. (a) Seller is a corporation, duly organized under
the laws of Delaware, with full power and authority to conduct its business as
presently conducted and to own or use its properties and assets. Seller is duly
qualified to do business and in good standing under the laws of New Jersey and
New York, which constitute all of the jurisdictions in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except where the
failure to be so qualified and in good standing would not reasonably be expected
to have a Material Adverse Effect. (b) Each Subsidiary is a corporation or
limited liability company, duly organized under the laws of its jurisdiction of
organization, with full power and authority to conduct its business as presently
conducted and to own or use its properties and assets. Each Subsidiary is duly
qualified to do business and in good standing under the Laws of each
jurisdiction in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it, requires such
qualification, except where the failure to be so qualified and in good standing
would not reasonably be expected to have a Material Adverse Effect. Exhibit E
accurately and completely sets forth the details of ownership of the securities
of each direct and indirect Subsidiary and other entity in which Seller holds an
equity interest. Seller holds such securities free and clear of all Interests
except Interests in favor of the Buyer and its Affiliates.
4.2 Authorization; Validity. Seller has the requisite corporate power
and authority to execute and deliver this Agreement and the other documents and
instruments to be executed and delivered by it pursuant hereto and to perform
its obligations hereunder and thereunder. The execution and delivery of this
Agreement by Seller and the other agreements to be executed and delivered by
Seller pursuant hereto, and the performance by Seller of its obligations
hereunder, including the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action on the part of
Seller, including by any action or required approval of the equityholder or
equityholders of Seller and approval by all board members not Affiliated with
Buyer or any of its Affiliates. This Agreement has been duly and validly
executed and delivered by Seller and constitutes, and each of the other
agreements to be executed and delivered by Seller pursuant hereto upon such
Seller's execution and delivery will constitute, a valid and legally binding
obligation of Seller enforceable against Seller in accordance with its
respective terms.
4.3 No Violation. The execution, delivery and performance by Seller of
this Agreement and the transactions contemplated hereby do not and will not: (a)
conflict with or result in, with or without the giving of notice or lapse of
time or both, any violation of or constitute a breach or default, or give rise
to any right of acceleration, payment, amendment, cancellation or termination,
under (i) the Articles of Incorporation, Bylaws or other organizational
documents of Seller or any Subsidiary, or (ii) any law or order pertaining to
the Business, the Purchased Assets or to which any Seller is otherwise subject;
or (b) result in the creation of any Interests in or upon any of the Purchased
Assets.
4.4 Third Party Approvals. Except for certain transfer restrictions
specifically described in Section 4.14, no order, consent, approval, waiver or
authorization of any governmental entity is required in connection with the
execution, delivery and performance by Seller of this Agreement and the other
documents and instruments to be executed and delivered by Seller pursuant hereto
and the transactions contemplated hereby and thereby other than orders,
consents, approvals, waivers or authorizations of, or declarations or filings
with, the Bankruptcy Court.
4.5 Title to Assets and Location of Assets. Seller has good and
marketable title to each of the Purchased Assets owned by such Seller, free of
any Interests other than liens for current taxes not yet due and Interests in
favor of the Buyer and/or its Affiliates, all of which Interests in favor of
Buyer or its Affiliates Seller shall cause to be released at Closing (including
the release of Interests held by Buyer or Affiliates of the Buyer by way of
setoff against the Purchase Price of all amounts due to Buyer or its
Affiliates). Schedule 4.5 sets forth (i) a description (including model number)
of each Purchased Asset that is not located on the premises of Seller, (ii) the
location of each such Purchased Asset, (iii) the name of each Person who holds
such Purchased Asset and the name, address, telephone number and fax number of
the individuals employed by each such Person who are primarily responsible for
the business relationship with Seller and (iv) the terms pursuant to which each
such Purchased Asset is held.
4.6 Patents, Copyrights, Trademarks, Trade Secrets and Trade Names.
Schedule 4.6 contains a complete and accurate list, and indicates the ownership
of (i) all currently used patents and patent applications owned by Seller or its
Subsidiaries, or which are used or held for use by Seller or its Subsidiaries in
the Business whether domestic or international, (ii) all currently used
trademarks and service marks owned by Seller, or which are used or held for use
by Seller in the Business which are unregistered and material to the Business or
for which registrations have been obtained or applications therefor have been
filed by Seller, and (iii) all currently used rights in Internet web sites and
Internet domain names owned by Seller, or which are presently used or held for
use in the Business. Except as set forth in Schedule 4.6, (a) no Person other
than Seller has the right to use any of the Intellectual Property, and Seller
has all right, title and interest to all Intellectual Property, free and clear
of all Interests or other encumbrances (except Interests in favor of Affiliates
of Buyer being acquired by Buyer prior to closing and discharged by set-off
against the Purchase Price) without any conflict known to Seller with the rights
of others, (b) documentation for the continuance of registration and
applications for registration or issuance have been timely filed with the
appropriate authorities for the patents, copyrights, trademarks, trade names,
and service marks included in the Intellectual Property and such items of
Intellectual Property which are used by, or registered or the subject of an
application filed with, as applicable, the U.S. Patent and Trademark Office, the
U.S. Copyright Office and each foreign patent or trademark office in which
filing has been made (as listed on Schedule 4.6) are currently in compliance
with formal legal requirements and are valid and enforceable, (c) neither the
operation of the Business nor use of any of the Intellectual Property infringes
on or conflicts with any right of any Person, (d) Seller has not received any
written notice alleging that (i) any operation of Seller or the Business or use
of any of the Intellectual Property requires payment for the use of, or
infringes on, conflicts with or otherwise interferes with, any patent,
copyright, trade secret, trade name, trademark, service xxxx or other
intellectual property right of another Person, or any such right which might be
so infringed has been applied for by another Person, or (ii) any of the
Intellectual Property has been legally declared invalid or unenforceable or is
the subject of a pending or threatened action for opposition or cancellation or
a declaration of invalidity, or is infringed or misappropriated by the
activities of another Person, (e) to the knowledge of Seller, there is no
violation or infringement by a third party of any of the Intellectual Property,
(f) Seller is not a party to any licenses or other agreements (i) which grant
Seller any right to use any patents, copyrights, trademarks, trade secrets,
trade names, service marks and other intellectual property of others or (ii)
under which Seller grants a third party the right to use any of the Intellectual
Property, and, to the extent that it is a party to the licenses or agreements
described in the foregoing subsections (i) or (ii), all such licenses and
agreements, are set forth on Schedule 4.6 and are each in full force and effect
and are valid, binding and enforceable in accordance with their terms and, to
the best of Seller's knowledge, there are no existing defaults or events which,
with the giving of notice or the lapse of time or both, would constitute a
default thereunder by Seller, (g) the Intellectual Property constitutes all
patents, copyrights, trademarks, trade secrets, know-how, trade names, service
marks, Internet web sites and Internet domain names and other intellectual
property necessary or appropriate to conduct the Business as it was conducted at
March 31, 2003 and as it is being conducted and (h) Seller has taken reasonable
security measures to protect the secrecy, confidentiality and value of Seller
Trade Secrets.
4.7 Legal and Administrative Proceedings. Schedule 4.7 sets forth each
instance in which Seller or any Subsidiary is (i) subject to any outstanding
judgment, injunction, order, decree, ruling or settlement agreement related to
the Business or (ii) is a party or, to the knowledge of Seller, is threatened to
be made a party to any action, suit, proceeding, hearing or investigation
related to the Business of, in or before any court or quasi-judicial or
administrative agency of any jurisdiction or before any arbitrator. Except as
disclosed in Schedule 4.7:
(a) There are no lawsuits or arbitrations pending or, to the
knowledge of Seller, threatened against Seller or any Subsidiary or which
Seller or any Subsidiary intend to initiate; and
(b) There are no Orders outstanding against Seller.
4.8 Compliance with Laws and Orders. Except as disclosed in Schedule
4.8, neither Seller nor any Subsidiary is in material violation of or in
material default under any Law applicable to the Business, the Purchased Assets
or the Assumed Liabilities. The Seller and its Subsidiaries hold all material
licenses, permits, registrations, authorizations, certificates and approvals
("Permits") of any governmental entity or authority necessary or required to
operate the Business. Schedule 4.8 lists all of such Permits. All Permits are
valid and effective as of the date hereof and will be as of the Closing Date,
and all of such Permits are transferable to the Buyer, except as set forth on
Schedule 4.8.
4.9 Condition of the Machinery and Equipment. (a) As of the date of
this Agreement, the Machinery and Equipment is satisfactory and in good working
condition to produce the products it has produced in recent experience, in
similar quantities and with similar quality and will, to the knowledge of
Seller, be in such condition on the Closing Date.
(b) Schedule 4.9 separately lists certain machinery and equipment owned
by Cablevision Systems Corporation ("Cablevision") or its Affiliates which is
located on Seller's premises (in addition to other equipment previously
purchased by and delivered to Cablevision or its Affiliates). Seller
acknowledges that it has no interest in such machinery and equipment, and that
such machinery and equipment are not part of the Purchased Assets.
4.10 Material Contracts.
(a) Schedule 4.10 and Exhibit A collectively is a true and correct
list of all of the following Contracts to which Seller is a party and which
pertain to the Business ("Material Contracts"):
(i) Any lease of tangible personal property;
(ii) Any Contract pursuant to which Seller receives any
consulting or advisory services, excluding Contracts for legal, audit
or routine accounting services;
(iii) Any Contract to which Seller or any Subsidiary is a
party pertaining to Intellectual Property;
(iv) Any Contracts pertaining to the Business to which Seller
or any Subsidiary is a party and which contain covenants limiting the
freedom of Seller or any Subsidiary to compete with any Person; and
(v) Any other material Contracts pertaining to the Business.
(b) Seller has delivered to Buyer a correct and complete copy of
each written Contract listed in Exhibit A or Schedule 4.10. Except as set
forth in Exhibit A or
Schedule 4.15A, with respect to each Contract listed in Exhibit A: (i) the
Contract is, with respect to Seller and, to Seller's knowledge, each other
party thereto, legal, valid, binding, enforceable, and in full force and
effect; (ii) Seller is not now and, to Seller's knowledge, no other party
is, in material breach or default, and no event has occurred which with
notice or lapse of time would constitute a material breach or default, or
permit termination, modification, or acceleration under the Contract; and
(iii) Seller has not and, to Seller's knowledge, no other party has
repudiated any material provision of the Contract.
4.11 ERISA. Neither Seller or any ERISA Affiliate, nor any Plan is or
has been in violation of any of the provisions of ERISA, any of the
qualification requirements of IRC Section 401(a), or any of the published
interpretations thereof. No lien upon the assets of Seller has arisen with
respect to any Plan. No "prohibited transaction" within the meaning of ERISA
Section 406 or IRC Section 4975(c) has occurred with respect to any Plan.
Neither Seller nor any ERISA Affiliate has incurred any withdrawal liability
with respect to any Multiemployer Plan. Seller and each ERISA Affiliate have
made all contributions required to be made by them to any Plan or Multiemployer
Plan when due. There is no accumulated funding deficiency in any Plan, whether
or not waived.
4.12 Tax Compliance. Seller has filed all tax returns required to be
filed by it and has paid all taxes due and payable on said returns and on any
assessment made against it or its assets, except for returns which have not been
filed but are the subject of appropriate extensions.
4.13 SEC Reports. Reference is made to Seller's Annual Report on Form
10-K for the fiscal year ended December 31, 2002, as amended on Form 10-K/A, and
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003 (the
"SEC Reports"). As of their filing dates, the SEC Reports complied (and all
other reports and registration statements, if any, filed by Seller with the SEC
after the date thereof and prior to Closing will comply) in all material
respects with the applicable requirements of the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder (other
than timely filing), and at the time filed did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.14 Transfer Restrictions.
(a) Seller is not subject to any restrictions on the transfer, sale,
assignment, pledge or hypothecation ("Transfer Restrictions") of any of its
direct and indirect equity ownership interests in other entities that will
materially interfere with the ownership, use or enjoyment of such ownership
interests, except for the following: (i) Seller's ownership interest in the
Revolution Company, LLC, is subject to the Operating Agreement dated January 24,
2001, by and among CBS Technology Corporation, Core Digital Technologies, Inc.,
and Seller (the
"Revolution Company Operating Agreement"); and (ii) any transfer of Seller's
ownership interest in Princeton Video Image Israel, Ltd. requires the consent or
approval of the government of Israel and its Office of the Chief Scientist.
(b) Neither Seller's nor its Subsidiaries' Intellectual Property are
subject to any Transfer Restrictions that will materially interfere with the
ownership, use or enjoyment of such Intellectual Property in the manner used by
Seller and its Subsidiaries to carry on their businesses as presently conducted
or proposed to be conducted, including without limitation the planned commercial
deployment of Seller's L-VIS(R) and iPoint(tm) products, except for the
following: (i) any transfer of the Intellectual Property of Princeton Video
Image Israel, Ltd. will require the consent or approval of the government of
Israel and its Office of the Chief Scientist; (ii) the Cross-License Agreement
among Seller, Sportvision, Inc. and the others named therein dated as of July
29, 2002 contains restrictions on the assignment of the licenses granted to
Seller thereby to parties other than Cablevision or Presencia, or their
respective affiliates; (iii) Seller's software license with Broadcom Corporation
prohibits Seller from transferring or distributing Broadcom proprietary software
used to create the existing iPoint(tm) interface with Broadcom products to third
parties other than in object code form; and (iv) any Transfer Restriction
identified in Schedule 4.6.
4.15 Liabilities. (a) Schedule 4.15A accurately and completely lists
(a) all Liabilities of Seller as of the Agreement Date and (b) Seller's good
faith reasonable estimate of all Liabilities of Seller as of the projected
Closing Date. Schedule 4.15A separately identifies secured and unsecured
liabilities, liabilities due to employees, and estimated costs of administering
the Chapter 11 case. Schedule 4.15A also identifies the Cure Costs to be
incurred with respect to the Assumed Agreements.
(b) Schedule 4.15B accurately and completely lists all Liabilities
of the Subsidiaries as of the Agreement Date.
4.16 Related Party Contracts. Schedule 4.16 accurately and completely
lists all contracts, agreements or relationships between the Subsidiaries and
any Affiliate of the Seller.
4.17 Brokers and Finders. No broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission from Buyer in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Seller.
EXCEPT AS SET FORTH ABOVE, (A) ALL THE PURCHASED ASSETS SHALL BE TRANSFERRED ON
AN AS-IS, WHERE-IS BASIS, AND (B) SELLER MAKES NO FURTHER REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, IN RESPECT OF THE PHYSICAL CONDITION OF THE
PURCHASED ASSETS, AND ANY SUCH REPRESENTATION AND WARRANTIES ARE HEREBY
EXPRESSLY DISCLAIMED.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller, as of the Agreement
Date and as of the Closing Date (except with respect to representations and
warranties made as of a particular date, which shall be deemed to be made only
as of such date), as follows:
5.1 Due Organization. Buyer is a limited liability company validly
existing and in good standing under the laws of the state of Delaware and has
the requisite power and authority to acquire and own the Purchased Assets.
5.2 Authority; Validity. Buyer has the requisite power and authority to
execute and deliver this Agreement and the other documents and instruments to be
executed and delivered by Buyer pursuant hereto and to perform its obligations
hereunder and thereunder. The execution and delivery of this Agreement and the
other agreements to be executed and delivered by Buyer pursuant hereto, and the
consummation by Buyer of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary limited liability company action on the
part of Buyer. This Agreement has been duly and validly executed and delivered
by Buyer and constitutes, and each of the other agreements to be executed and
delivered by Buyer pursuant hereto upon its execution and delivery by Buyer will
constitute, valid and legally binding obligations of Buyer enforceable against
Buyer in accordance with its terms.
5.3 No Violation. The execution, delivery and performance by Buyer of
this Agreement and the transactions contemplated hereby, do not and will not
conflict with or result in, with or without the giving of notice or lapse of
time or both, any violation of or constitute a breach or default, or give rise
to any right of acceleration, payment, amendment, cancellation or termination,
under (a) the Certificate of Formation, Operating Agreement or other
organizational documents of Buyer, (b) any mortgage, indenture, lease, contract
or other agreement to which Buyer is a party or by which Buyer or any of its
properties or assets is bound or subject, or (c) any law or order to which Buyer
is bound or subject.
5.4 Third Party Approvals. Except for certain transfer restrictions
specifically described in Section 4.14, no order, consent, approval, waiver or
authorization of any governmental entity is required in connection with the
execution, delivery and performance by Buyer of this Agreement and the other
documents and instruments to be executed and delivered by Buyer pursuant hereto
and the transactions contemplated hereby and thereby other than orders,
consents, approvals, waivers or authorizations of, or declarations or filings
with, the Bankruptcy Court.
5.5 Financing. As of the Closing Date, the Buyer will have adequate
financing available to it to pay the Purchase Price in accordance with the terms
of this Agreement.
5.6 Brokers and Finders. No broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission from Seller in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Buyer.
ARTICLE VI
COVENANTS OF THE PARTIES
6.1 Conduct of Business. So long as the DIP Facility remains effective
and is not terminated, Seller will continue to operate the Business, including
the Business of its Subsidiaries, as in effect immediately prior to and on
January 1, 2003, and will not engage in any practice, take any action, or enter
into any transaction outside of the ordinary and usual course of business
without the prior written consent of Buyer. Seller will maintain adequate
liquidity, retain its essential personnel, and operate the Business in
accordance with customary operating covenants as a debtor and
debtor-in-possession until the Closing. Seller will not reject any contract or
agreement to which it or any Subsidiary is a party without Buyer's prior written
consent unless it properly terminates this Agreement. Seller will take all
actions reasonably necessary to maintain its workforce, including incentive
bonuses as appropriate if consented to in advance by Buyer, and permitting Buyer
to communicate plans, status, activities and events related to Buyer's business
and plans with such employees, and will cause key personnel to assist Buyer with
transition of the Purchased Assets, all on terms acceptable to Buyer.
6.2 Cooperation of the Parties. Buyer and Seller will promptly take
such actions as are reasonably requested by the other party to assist in
obtaining the Bidding Procedures Order and the Sale Order and consummating the
Transaction in the most expeditious manner permitted under the Bankruptcy Code
and the Bankruptcy Rules, including furnishing affidavits, testimony or other
documents or information for filing with or presentation to the Bankruptcy Court
for purposes, among others, of demonstrating that Buyer is a "good faith" Buyer
under Section 363(m) of the Bankruptcy Code. Seller shall (a) take, or cause to
be taken, such additional appropriate actions and do, or cause to be done, all
things necessary, proper or advisable under applicable law or otherwise to
consummate the Transaction and (b) promptly confer with all appropriate federal,
state and local regulators to obtain their support for the Transaction, if
required. In the event the Bankruptcy Court Approval shall be appealed and Buyer
waives the condition that the Bankruptcy Court Approval be a Final Order, Seller
shall use all reasonable efforts to defend such appeal.
6.3 Access. From the date hereof until the Closing Date, Seller shall
give Buyer and its Representatives reasonable access during normal business
hours to the offices, properties, officers, employees, accountants, auditors,
counsel and other representatives, books and records of Seller, including
without limitation all books, records, files and papers, whether in hard copy or
electronic format, relating primarily to the Contracts, the Machinery and
Equipment and the Inventory. Buyer shall keep such information confidential
except as necessary for the
Chapter 11 Case, and except for information which (i) is or becomes generally
available to the public (other than as a result of a disclosure by the Buyer),
(ii) becomes available on a non-confidential basis from a source other than the
Seller or one of its representatives which the Buyer reasonably believes is
entitled to disclose it, (iii) was developed by or known by the Buyer prior to
its disclosure, or (iv) is otherwise in the public domain. From and after the
Closing Date and until the closure of the Seller's Chapter 11 Case, the parties
shall cooperate with each other to enable the Seller and the Buyer to obtain
information related to the Business from employees and former employees
regardless of any confidentiality agreement that was executed by such employee
and to enable Seller to obtain access to the books and records and other
information related to and in connection with the Business and the Seller's
financial affairs for the purpose of (i) the administration and completion of
the Chapter 11 Case, (ii) preparation and filing of tax returns and (iii)
Seller's compliance with any obligations under securities laws or other
applicable law.
6.4 Regulatory Compliance. Subsequent to the Closing, Seller will take
such actions as may be required to complete the transfer of any Permits and to
otherwise comply with all laws, orders and regulations. Seller shall provide
Buyer with all documentation and communications with any regulatory body which
are related to such compliance. Both parties shall complete such forms and make
all filings by June 30, 2003 which are reasonably required to obtain requisite
consent of the Office of Chief Scientist of the State of Israel to the transfer
of the shares of Princeton Video Image Israel, Ltd. to the Buyer.
6.5 Compliance with Bidding Procedures Order. Seller will comply with
all of the terms and conditions of the Bidding Procedures Order.
6.6 Public Announcements. The parties will consult with each other
before issuing, and provide the other the opportunity to review and comment
upon, any press release, any court filing or pleading filed with the Bankruptcy
Court relating to this Agreement or the transactions contemplated hereby, or
other public statements with respect to the transactions contemplated by this
Agreement. Notwithstanding the foregoing, nothing shall limit the ability of
either party to timely make any announcement or filing which they are required
to make by applicable law, court rule or regulation of any governmental or
regulatory authority or stock exchange.
6.7 Employment Matters. Buyer shall have no obligation to offer
employment or employ any employees of Seller. Notwithstanding the foregoing,
Buyer shall be free to offer employment and to employ any of Seller's employees,
or former employees, that Buyer desires to employ and Seller shall not object to
or make any claim against Buyer or its employees or former employees by reason
of their hiring by Buyer.
6.8 Further Assurances. Subsequent to the Closing Date, Seller shall
execute and deliver to Buyer such bills of sale, endorsements, assignments and
other good and sufficient instruments of assignment, transfer and conveyance, in
form and substance reasonably
satisfactory to Buyer, as shall be necessary to vest in Buyer all of Seller's
right, title and interest in and to the Purchased Assets. Simultaneously with
such delivery, Seller shall take such reasonable steps as may be reasonably
necessary or appropriate at and after the Closing, so that Buyer shall be placed
in actual possession and operating control of the Purchased Assets. Seller shall
provide copies or otherwise make available to Buyer and Buyer's Representatives,
all information and records (financial and otherwise) relating to the Purchased
Assets.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
7.1 Conditions Precedent to Obligations of Buyer. The obligation of
Buyer to consummate the transactions contemplated by this Agreement is subject
to the satisfaction (or waiver by Buyer in Buyer's sole discretion) at or prior
to the Closing Date of each of the following conditions:
(a) Accuracy of Representations and Warranties. Each of the
representations and warranties of Seller contained herein shall be true and
correct in all material respects on the date hereof and shall be true and
correct in all respects on and as of the Closing Date, with the same force
and effect as though such representations and warranties had been made on
and as of the Closing Date.
(b) Performance of Obligations. Seller shall have performed in all
material respects all obligations and agreements contained in this
Agreement required to be performed by it on or prior to the Closing Date.
(c) Officer's Certificates. Buyer shall have received
certificates, dated the Closing Date, of an executive officer of Seller to
the effect that the conditions specified in Sections 7.1(a) and (b) above
have been fulfilled.
(d) Bankruptcy Court Approval. The Bankruptcy Court shall have
entered a Sale Order on or before August 4, 2003. The Sale Order shall be
in full force and shall have become a Final Order on or before August 15,
2003. Seller shall have delivered to Buyer (i) a certified copy of the Sale
Order and (ii) copies of all affidavits, certificates of service or notices
required to be filed, served or published in connection with the approval
of the Bidding Procedures Order and the Sale Order. The Bidding Procedures
Order shall have been entered by the Bankruptcy Court and shall have become
a Final Order.
(e) Validity of Claims and Liens. The Challenge Deadline shall
have passed without the Creditors Committee having asserted or filed any
Claim Challenges, or all Claims Challenges raised or asserted by the
Creditors Committee shall have been dismissed by a Final Order or otherwise
resolved favorably to the Buyer in its sole
discretion, or the Creditors Committee shall have waived in writing or on
the record the right to file any Claim Challenge.
(f) Governmental Approval; Israel. All necessary federal, state
and local regulatory and other third-party consents, approvals and filings
will have been obtained or made, including but not limited to, the consent
of Office of the Chief Scientist of the Ministry of Trade and Industry of
the State of Israel to the transfer of the shares of Princeton Video Image
Israel, Ltd. to the Buyer.
(g) No Adverse Government Action. No governmental authority,
including any federal or state court of competent jurisdiction, will have
enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, judgment, decree, injunction or other order
(whether temporary, preliminary or permanent), which, in either case, is in
effect and which has the effect of making the Transaction illegal, or
otherwise restrains consummation of the Transaction, or that could
reasonably be expected to adversely affect Buyer's ownership and control or
rights to use or otherwise receive the benefit of any of the Purchased
Assets or to operate the Business.
(h) Operation of Business. Since the date of this Agreement, the
Business has been operated and continues to operate in the ordinary and
usual course within the parameters of the Approved Budget set forth in the
DIP Facility, and there has been no material adverse change in the
business, assets, properties, results of operations or condition of the
Purchased Assets (other than the commencement of the Chapter 11 Case).
7.2 Conditions Precedent to the Obligations of Seller. The obligation
of Seller to consummate the transactions contemplated by this Agreement is
subject to the satisfaction (or waiver by Seller) at or prior to the Closing
Date of each of the following conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties of Buyer contained herein shall be true and
correct in all material respects on the date hereof in and shall be true
and correct in all respects on and as of the Closing Date, with the same
force and effect as though such representations and warranties had been
made on and as of the Closing Date.
(b) Performance of Obligations. Buyer shall have performed in all
material respects all obligations and agreements contained in this
Agreement required to be performed by it prior to or on the Closing Date.
(c) Officer's Certificate. Seller shall have received a
certificate, dated the Closing Date, of an officer of Buyer to the effect
that the conditions specified in Sections 7.2(a) and (b) above have been
fulfilled.
(d) Bankruptcy Court Approval. The Sale Order shall be in full
force and effect and shall not have been stayed, enjoined or modified.
(e) No Adverse Government Action. No governmental authority,
including any federal or state court of competent jurisdiction, will have
enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, judgment, decree, injunction or other order
(whether temporary, preliminary or permanent), which, in either case, is in
effect and which has the effect of making the Transaction illegal, or
otherwise restrains consummation of the Transaction.
(f) Validity of Claims and Liens. The Challenge Deadline shall
have passed without the Creditors Committee having asserted or filed any
Claim Challenges, or all Claims Challenges raised or asserted by the
Creditors Committee shall have been dismissed by a Final Order or otherwise
resolved favorably to the Buyer in its sole discretion, or the Creditors
Committee shall have waived in writing or on the record the right to file
any Claim Challenge.
ARTICLE VIII
TERMINATION
8.1 Termination of Agreement. This Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing:
(a) by written agreement of Seller and Buyer;
(b) by Buyer, if the Bidding Procedures Order is not entered by
June 20, 2003 or, after it is entered if the Bidding Procedures Order is
rescinded, or modified without Buyer's consent;
(c) by Buyer if a Sale Order is not entered on or before August 4,
2003 or if the Sale Order does not become a Final Order on or before August
15, 2003;
(d) by Buyer if the Closing shall not have occurred on or before
ten (10) calendar days following the date that the Sale Order becomes a
Final Order and, provided, however, that Buyer is not in material breach of
any of its representations and warranties contained in this Agreement and
has not failed in any material respect to perform any of its obligations
hereunder;
(e) by Buyer if the DIP Facility is terminated prior to Closing
other than by reason of a breach of the DIP Facility by Buyer;
(f) by Buyer if Seller enters into an Alternative Transaction (as
defined below) or presents an Alternative Transaction to the Bankruptcy
Court;
(g) by Seller if Seller enters into a merger, consolidation, sale
or similar transaction involving any portion of the Purchased Assets with
any person other than Buyer or its assignee (an "Alternative Transaction")
and such Alternative Transaction is approved by the Bankruptcy Court;
(h) by Seller if the DIP Facility is terminated prior to Closing
by reason of a breach of the DIP Facility by Buyer; or
(i) by Seller if all of the following occur: (i) the Sale Order
has become a Final Order, (ii) the Buyer has ceased providing any financing
to the Seller, whether pursuant to the DIP Facility or otherwise, (iii) the
Seller is not in material breach of any of its representations and
warranties contained in this Agreement and has not failed in any material
respect to perform any of its obligations hereunder and (iv) the Closing
has not been consummated by the close of business on September 26, 2003.
8.2 Consequences of Termination. In the event of any termination of
this Agreement by either or both of Buyer and Seller pursuant to Section 8.1,
written Notice thereof shall forthwith be given by the terminating party to the
other party hereto, specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall thereupon terminate and become
void and of no further force and effect, and the transactions contemplated
hereby shall be abandoned without further action of the parties hereto;
provided, however, that such termination shall not relieve any party hereto of
any Liability for breach of this Agreement prior to termination.
8.3 Special Provision regarding Cure Costs. The parties have entered
into this Agreement on the understanding that Seller has made the representation
in Section 4.15 with respect to the aggregate amount of Cure Costs (the
"Represented Cure Amount") to the best of its ability and in good faith. If it
is finally determined, on or prior to the date that the Sale Order is entered,
that Seller's estimate was in good faith but that actual Cure Costs exceed the
Represented Cure Amount by more than $100,000, then Buyer shall have the option
to either (a) terminate this Agreement, (b) increase the Purchase Price by the
amount of the aggregate Cure Costs in excess of the sum of the Represented Cure
Amount plus $100,000 or (c) maintain the same Purchase Price but require that
Seller reject such of the Assumed Agreements as Buyer designates in its sole
discretion so as to reduce the amount of the actual aggregate Cure Costs to an
amount less than the sum of the Represented Cure Amount plus $100,000. If Buyer
fails to take one of the foregoing actions under the foregoing circumstances
notwithstanding the Seller's request that it do so, then the Seller shall have
the option of terminating this Agreement at the earlier of ten (10) days after
the date of delivery of its demand (or at Closing if Closing is scheduled for
less than 10 days after the date that the Sale Order is entered).
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ARTICLE IX
LIMITATION ON REMEDIES
9.1 No Survival of Representations and Warranties. The representations
and warranties of Buyer and Seller made in this Agreement and the covenants of
Buyer and Seller contained in this Agreement that, by their terms, are to be
performed prior to the Closing shall not survive the Closing Date and shall be
extinguished by the Closing and the consummation of the transaction contemplated
by this Agreement. Absent fraud, Buyer shall not have any remedy against Seller
or its Affiliates, and Seller shall not have any remedy against Buyer or its
Affiliates for (i) any breach of a representation or warranty contained in this
Agreement (other than to terminate the Agreement in accordance with the terms
hereof) and (ii) if the Closing occurs, any breach of a covenant contained in
this Agreement with respect to the period prior to the Closing Date.
ARTICLE X
MISCELLANEOUS
10.1 Expenses. Whether or not the transactions contemplated hereby are
consummated, each party hereto shall bear all costs and expenses incurred or to
be incurred by such party in connection with this Agreement and the consummation
of the transactions contemplated hereby. As between Buyer and Seller, Seller
shall bear all costs of any Persons (other than Buyer, its agents or
Affiliates), entitled to payment of compensation or reimbursement of expenses
pursuant to the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure.
10.2 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by Seller without the prior written
consent of Buyer. This Agreement and Buyer's rights and obligations hereunder
may be assigned by Buyer without Seller's consent. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
10.3 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of Seller and Buyer and Buyer's assignees, if any,
and nothing in this Agreement, express or implied, is intended to or shall
confer upon any other Person any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement except as expressly set forth
herein.
10.4 Notices. All notices, demands, requests, consents, approvals or
other communications (collectively, "Notices") required or permitted to be given
hereunder or that are given with respect to this Agreement shall be in writing
and shall be personally served, delivered by a nationally recognized overnight
delivery service with charges prepaid, or transmitted by hand delivery, or
facsimile, addressed as set forth below, or to such other address as such party
shall have specified most recently by written Notice. Notice shall be deemed
given on the date of service or transmission if personally served or transmitted
by facsimile with confirmation of receipt; provided, that if delivered or
transmitted on a day other than a Business Day or after normal business hours,
notice shall be deemed given on the next Business Day. Notice otherwise sent as
provided herein shall be deemed given on the next Business Day following timely
deposit of such Notice with an overnight delivery service:
If to Seller: Princeton Video Image, Inc.
00 Xxxxxxxx Xxxx
Xxxxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
Tel: 000.000.0000
Fax: 000.000.0000
With copies to: Fox Rothschild LLP
Princeton Pike Corporate Center
000 Xxxxx Xxxxx, Xxxxxxxx 0 (Xxxxxxxxxxxxx)
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxx X. Baume, Esq.
Tel: 000.000.0000
Fax: 000.000.0000
Smith, Stratton, Wise, Xxxxx & Xxxxxxx LLP
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Esq.
Tel: 000.000.0000
Fax: 000.000.0000
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxx, Esq. and Xxxxx Xxxxxx, Esq.
Tel: 000.000.0000
Fax: 000.000.0000
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If to Buyer: Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Xxxx Xxxxx, Esq.
Tel: 000.000.0000
Fax: 000.000.0000
With a copy to: Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxxx Xxxxxx, Esq.
Tel: 000.000.0000
Fax: 000.000.0000
Rejection of or refusal to accept any Notice, or the inability to deliver any
Notice because of changed address of which no Notice was given, shall be deemed
to be receipt of the Notice as of the date of such rejection, refusal or
inability to deliver.
10.5 Successful Bidder. If the sale of the Purchased Assets becomes
subject to an Auction and Buyer is the Successful Bidder, then this Agreement
shall remain in full force and effect except as expressly amended by the
Successful Bidder.
10.6 Choice of Law. This Agreement shall be construed and interpreted,
and the rights of the parties shall be determined, in accordance with the
substantive laws of the State of Delaware, without giving effect to any
provision thereof that would require the application of the substantive laws of
any other jurisdiction, except to the extent that such laws are superseded by
the Bankruptcy Code.
10.7 Entire Agreement; Amendments and Waivers. This Agreement and all
agreements entered into pursuant hereto and all certificates and instruments
delivered pursuant hereto and thereto constitute the entire agreement between
the parties hereto pertaining to the subject matter hereof and supersede all
prior agreements, understandings, negotiations, and discussions, whether oral or
written, of the parties. This Agreement may be amended, supplemented or
modified, and any of the terms, covenants, representations, warranties or
conditions may be waived, only by a written instrument executed by the Buyer and
Seller, or in the case of a waiver, by the party waiving compliance. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar), and no such
waiver shall constitute a continuing waiver unless otherwise expressly provided.
10.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall
constitute one and the same instrument. Counterparts to this Agreement may be
delivered via facsimile.
10.9 Invalidity. If any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein, shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, the parties
shall use their reasonable efforts, including the amendment of this Agreement,
to ensure that this Agreement shall reflect as closely as practicable the intent
of the parties hereto on the date hereof.
10.10 Exclusive Jurisdiction. Without limiting any party's right to
appeal any order of the Bankruptcy Court and except as otherwise provided
herein, (a) the Bankruptcy Court shall retain exclusive jurisdiction to enforce
the terms of this Agreement and to decide (insofar as they relate to Seller) any
claims or disputes which may arise or result from, or be connected with, this
Agreement, any breach or default hereunder, or the transactions contemplated
hereby, and (b) any and all claims, actions, causes of action, suits and
proceedings related to the foregoing shall be filed and maintained only in the
Bankruptcy Court, and the parties hereby consent to and submit to the
jurisdiction and venue of the Bankruptcy Court and shall receive Notices at such
locations as indicated in Section 10.4.
10.11 WAIVER OF RIGHT TO TRIAL BY JURY. SELLER AND BUYER HEREBY WAIVE
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, this Asset Purchase Agreement has been duly
executed and delivered by the duly authorized officers of Seller and Buyer as of
the date first above written.
PVI VIRTUAL MEDIA SERVICES, LLC
By:
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Name:
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Title:
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PRINCETON VIDEO IMAGE, INC.
By:
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Name:
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Title:
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