EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
AMERICAN TELECONFERENCING SERVICES, LTD.
D/B/A PREMIERE GLOBAL SERVICES
and
ILINC COMMUNICATIONS, INC.
APRIL 28, 2008
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT ("AGREEMENT") is made as of the
commencement of business on the 28th day of April, 2008, by and between AMERICAN
TELECONFERENCING SERVICES, LTD. D/B/A PREMIERE GLOBAL SERVICES, a Missouri
corporation ("PURCHASER") and ILINC COMMUNICATIONS, INC., a Delaware corporation
("SELLER"). Capitalized terms not otherwise defined shall have the meaning
ascribed to such terms in ARTICLE X.
WHEREAS, Seller is engaged in the Audio Conferencing Business as a
conferencing service provider;
WHEREAS, Seller is also engaged in the Web Collaboration Business
(primarily as a direct provider of its own proprietary web collaboration
software known as the "iLinc Suite") and permits the resale of its web
conferencing services by its agents, resellers and distributors;
WHEREAS, Purchaser is also engaged in the Audio Conferencing Business;
WHEREAS, Purchaser also provides web conferencing products and services
(as both a direct provider of its own proprietary web collaboration software
known as "Netspoke" and as a reseller of products competitive with Seller's web
conferencing products) and permits the resale of web conferencing services by
its agents, resellers and distributors; and
WHEREAS, Purchaser wishes to purchase from Seller and Seller is willing
to sell to Purchaser, certain identified assets of Seller used directly in the
Audio Conferencing Business, all on and subject to the terms and conditions set
forth in this Agreement (the "ACQUISITION"); and at Closing Seller is to be
simultaneously engaged (through other reseller agreements) as an agent and
wholesale reseller of Purchaser's audio conferencing services in a cooperative
and mutually beneficial relationship, notwithstanding the competitive nature of
the Purchaser's and Seller's respective web conference businesses.
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 ACQUIRED ASSETS. Subject to the terms and conditions set forth in
this Agreement, at the Closing, Seller shall sell, convey, assign, transfer and
deliver to Purchaser and Purchaser shall purchase, accept, acquire and take
assignment and delivery of, all right, title and interest in, to and under the
following assets of Seller related directly to the Seller's Audio Conferencing
Business (collectively, the "ACQUIRED ASSETS") free and clear of all
Encumbrances (except for Permitted Encumbrances):
(a) all right, title and interest under the Audio Customer Service
Contracts listed on SCHEDULE 3.7 related directly to the provisioning, use and
purchase of audio conferencing services and any revenues to be derived
therefrom;
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(b) all accounts receivable, trade receivables, notes receivable,
contingent rights, deposits, advances and other receivables of Seller relating
directly to the Audio Conferencing Business, as listed on SCHEDULE 1.1(b);
(c) the toll free telecommunications access numbers listed on
SCHEDULE 1.1(c) (the "ACCESS NUMBERS");
(d) all accounting books and records, customer files (including
customer credit and collection information), sales agent records and sales and
purchase correspondence relating directly to the Audio Conferencing Business;
PROVIDED, that Seller may retain a copy of such records, on a confidential
basis, to support its own Web Collaboration Business and its accounting and
collection activities or any obligation arising under this Agreement or the
Transition Services Agreement;
(e) all warranties, indemnities or other rights and causes of
action relating directly to the Audio Conferencing Business;
(f) all goodwill related to, arising from or used in connection
with the Audio Conferencing Business; and
(g) to the extent transferable, all permits, licenses, Consents,
approvals, certificates, variances or other authorizations required in
connection with the operation of the Audio Conferencing Business under any Law
or any contract, lease, commitment, sales order, purchase order, license,
mortgage, note, bond or other agreement, whether written or oral (the
"PERMITS").
1.2 EXCLUDED ASSETS. Those assets of Seller not constituting Acquired
Assets (collectively, the "EXCLUDED ASSETS"), including the following, shall be
retained by Seller, and are not being sold or assigned to Purchaser hereunder:
(a) All taxpayer and other identification numbers and minute
books, stock transfer books and other documents relating to the organization,
maintenance, and existence of Seller as a corporation;
(b) Seller's rights under this Agreement and the agreements to be
executed by Seller in connection herewith; and
(c) Any right, title, interest or asset of Seller not described in
SECTION 1.1, including but not limited to any right or asset associated with the
Web Collaboration Business or the EventPlus Business.
(d) Any right, title, interest or asset of Seller in: (i) any
EventPlus Business account; and (iii) any wholesale account listed on SCHEDULE
1.2 that is to be serviced by iLinc post Closing under the Agent Agreement, in
either case, including any revenue or accounts receivable therefrom.
1.3 ASSUMED LIABILITIES. As part of the consideration for the Acquired
Assets, subject to SECTION 1.4, at the Closing, Purchaser shall assume only
those obligations of Seller to be performed after the Closing under the Audio
Customer Service Contracts and the Reseller Agreements, in each case solely to
the extent legally transferred or assigned to Purchaser, but excluding any
obligations or liabilities arising from or related to any default, breach or
violation of any Audio Customer Services Contract due to activities or events
occurring on or prior to the Closing (the "ASSUMED LIABILITIES").
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1.4 NO OTHER LIABILITIES ASSUMED. Notwithstanding anything in this
Agreement to the contrary, neither Purchaser nor any of its Affiliates shall
assume and in no event shall be deemed to have assumed, any Liability of Seller
or any of its Affiliates whatsoever (collectively, the "RETAINED LIABILITIES"),
other than as specifically set forth in SECTION 1.3. Without limiting the
generality of the foregoing, Purchaser is assuming no obligation for, and shall
have no responsibility with respect to, Taxes, the IP Liabilities, Liabilities
with respect to Seller's employees (including Liabilities with respect to
employment compensation, benefits or severance), governmental charges or
assessments or any other operating Liabilities of Seller (including accounts
payable or other obligations under any contract, lease, commitment, sales order,
purchase order, license, mortgage, note, bond or other agreement, whether
written or oral (other than as expressly set forth in SECTION 1.3)).
1.5 PROCEDURES FOR ASSETS NOT TRANSFERABLE. If any Reseller Agreement,
Permit, or any other property or right included in the Assumed Liabilities or
the Acquired Assets is not assignable or transferable without the Consent of any
Person, and such Consent has not been obtained prior to the Closing Date: (a)
this Agreement and the related instruments of transfer shall not constitute an
assignment or transfer thereof; (b) Purchaser shall not assume Seller's
obligations with respect thereto; (c) Seller shall continue to use its
commercially reasonable efforts to obtain or cause to be obtained such Consent
following the Closing Date; and (d) Purchaser shall provide its cooperation in
such regard if reasonably requested by Seller and Seller shall cooperate in any
reasonable arrangement which is designed to provide Purchaser with the benefits
of such Consent until such time as: (y) the Consent is actually obtained by
Seller; or (z) Purchaser executes a replacement contract with the Person from
whom Consent was not obtained.
1.6 WAIVER OF BULK SALES COMPLIANCE. Purchaser and Seller hereby waive
compliance with the bulk sales Laws of any applicable jurisdiction, and Seller
agrees to indemnify and hold harmless Purchaser and its Affiliates from and
against any claims arising out of or due to the failure to comply with such bulk
sales Laws in accordance with SECTION 8.2.
ARTICLE II
PURCHASE PRICE
2.1 PURCHASE PRICE. The aggregate purchase price for the Acquired
Assets shall be $3,330,000 (the "CLOSING PAYMENT"), PLUS the assumption of the
Assumed Liabilities, PLUS the Estimated Accounts Receivable Payment (subject to
adjustment in accordance with SECTION 2.4), PLUS the Accrued Revenue Payment (as
determined in accordance with SECTION 2.5), PLUS the Transition Date Payment
(collectively, the "PURCHASE PRICE").
2.2 PAYMENT OF THE PURCHASE PRICE. The Purchase Price shall be paid by
Purchaser to Seller, subject to Purchaser's rights under SECTION 8.2: (a) at the
Closing, by assumption of the Assumed Liabilities and delivery to Seller of the
Closing Payment and the Estimated Accounts Receivable Payment; (b) at the times
and in the amounts specified in SECTIONS 2.4 and 2.5, by delivery to Seller of
the applicable payments set forth therein; and (c) ten (10) calendar days
following the Transition Date, by delivery to Seller of the Transition Date
Payment.
2.3 ESTIMATED ACCOUNTS RECEIVABLE PAYMENT.
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(a) Within three (3) Business Days after the Closing Date, Seller
shall deliver to Purchaser a statement (the "ESTIMATED ACCOUNTS RECEIVABLE
STATEMENT") of Seller's estimated Collectible Accounts Receivable outstanding as
of the date thereof (the "ESTIMATED ACCOUNTS RECEIVABLE"). The Estimated
Accounts Receivable Statement shall be accompanied by: (i) all relevant backup
materials, including a 30-, 60- and 90-day aging report, along with a
certificate from Seller's Chief Executive Officer and Chief Financial Officer
certifying the Estimated Accounts Receivable Statement; and (ii) a statement
setting forth the calculation of Collectible Accounts Receivable, on a
customer-by-customer basis.
(b) Purchaser will review the Estimated Accounts Receivable
Statement and the calculation of the Estimated Accounts Receivable within three
(3) Business Days after receipt of the Estimated Accounts Receivable Statement
and if Purchaser disagrees with the calculation of Estimated Accounts
Receivable, Purchaser shall notify Seller in writing (the "DISPUTE NOTICE") of
the amount, nature and basis of such disagreement. Seller shall have two (2)
Business Days from the receipt of the Dispute Notice to dispute Purchaser's
adjustment to the Estimated Accounts Receivable Statement. In the event of a
dispute, Purchaser and Seller shall first use their diligent good faith efforts
to resolve such dispute between themselves. If the parties are unable to resolve
the dispute within ten (10) Business Days after delivery of the Dispute Notice,
then any remaining items in dispute shall be submitted to arbitration in
accordance with ARTICLE XI.
(c) (i) Within five (5) Business Days after receipt of the
Estimated Accounts Receivable Statement, Purchaser shall pay to Seller ninety
percent (90%) of that portion of the Estimated Accounts Receivable set forth in
the Estimated Accounts Receivable Statement to which Purchaser is not disputing
in a Dispute Notice; (ii) Purchaser shall pay to Seller the final amount of the
Estimated Accounts Receivable, as determined pursuant to SECTION 2.3(b), less
any amounts Purchaser previously paid pursuant to clause (i) of this SECTION
2.3(c), within five (5) Business Days after such determination (such amounts,
collectively, the "ESTIMATED ACCOUNTS RECEIVABLE PAYMENT").
2.4 FINAL ACCOUNTS RECEIVABLE PAYMENT.
(a) Three (3) Business Days following the Transition Date, Seller
shall deliver to Purchaser a statement setting forth the dollar amount of the
Collectible Accounts Receivable set forth on the Estimated Accounts Receivable
Statement which was ultimately collected by Seller as of the Transition Date
(the "COLLECTED RECEIVABLES").
(b) No later than ten (10) calendar days after the Transition
Date, if the Collected Receivables exceeds the Estimated Accounts Receivable
Payment, Purchaser will pay to Seller an amount equal to the difference of: (i)
One Hundred Three Percent (103%) of the Collected Receivables; and (ii) the
Estimated Accounts Receivable Payment.
2.5 ACCRUED REVENUE PAYMENTS. On the date which is no later than
thirteen (13) months following the Closing Date, Purchaser shall pay to Seller
an amount (the "ACCRUED REVENUE PAYMENT") equal to: (a) 1.25; MULTIPLIED BY (b)
the difference of: (i) the Collectible Accrued Revenue; MINUS (ii) $2,700,000;
PROVIDED, that in no event shall the Accrued Revenue Payment exceed $780,000.
2.6 TRANSITION DATE PAYMENT. Ten (10) Business Days after the
Transition Date, Purchaser shall deliver to Seller an amount equal to $833,000
(the "TRANSITION DATE PAYMENT").
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2.7 METHOD OF PAYMENT. The payments being made from one party to
another under this Agreement shall be made by wire transfer of immediately
available federal funds in United States dollars to an account previously
designated in writing by the party to receive such payment.
2.8 ALLOCATION OF PURCHASE PRICE. Within thirty (30) days of the
Closing Date, the parties shall allocate the Purchase Price among the Acquired
Assets, and such allocation shall be attached to this Agreement as SCHEDULE 2.8.
Purchaser and Seller shall, within thirty (30) days of the date of any
post-Closing payment made pursuant to or in connection with this Agreement,
revise SCHEDULE 2.8 to the extent necessary to reflect any post-Closing payment
made pursuant to or in connection with this Agreement. Such allocation is
intended to comply with the requirements of Section 1060 of the Internal Revenue
Code of 1986, as amended. Seller and Purchaser shall file Form 8594 with their
respective Tax Returns consistent with such allocation. The parties shall treat
and report the transaction contemplated by this Agreement in all respects
consistently for purposes of any federal, state or local tax, including the
calculation of gain, loss and basis with reference to the Purchase Price
allocation made pursuant to this SECTION 2.8. The parties shall not take any
action or position inconsistent with the obligations set forth in this SECTION
2.8, except as may otherwise be required by applicable Law.
2.9 TAXES. Seller shall pay all Taxes and fees imposed by Governmental
Authorities and required to be paid in connection with or arising from the sale,
transfer, or assignment of the Acquired Assets.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that the statements
contained in this ARTICLE III are true and correct on and as of the date hereof
and the Closing Date, except as set forth in the disclosure schedule
accompanying this Agreement (the "DISCLOSURE SCHEDULE"). The Disclosure Schedule
will be arranged in paragraphs corresponding to the numbered paragraphs
contained in this ARTICLE III.
3.1 DUE ORGANIZATION. Seller is a corporation, duly organized and
validly existing and in good standing under the laws of the state of its
incorporation with all requisite power and authority to own, lease and operate
the Acquired Assets. Seller is duly authorized to do business and in good
standing in each other jurisdiction in which either the nature of the activities
conducted by it or ownership of the Acquired Assets requires it to be so
qualified, each of which jurisdictions is set forth on SCHEDULE 3.1, except
where the failure to be so qualified would not have a material adverse effect on
Seller or the Acquired Assets.
3.2 DUE AUTHORIZATION. Seller has full power and authority to enter
into this Agreement and to carry out the transactions contemplated hereby to be
performed by it. The execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of Seller's
Board of Directors ("SELLER'S BOARD OF DIRECTORS"). This Agreement has been duly
and validly executed and delivered by Seller and constitutes the legal, valid
and binding obligation of Seller, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium, reorganization and
other similar laws affecting the rights of creditors generally, and to the
exercise of a court's equitable powers. The execution, delivery and performance
by Seller of this Agreement and all other instruments, agreements, certificates
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and documents contemplated hereby to be executed, delivered and performed by
Seller: (a) do not, and will not, violate or conflict with any provision of the
certificate of incorporation, bylaws or other organizational and governing
documents of Seller; (b) do not, and will not, violate or constitute a default
under any contract, lease, commitment, sales order, purchase order, license,
mortgage, note, bond or other agreement, whether written or oral, or, to
Seller's Knowledge, any Law to which Seller is a party, or by which it or any of
the Acquired Assets are bound; and (c) will not result in the creation of any
Encumbrance upon the Acquired Assets, or permit the acceleration of the maturity
of any indebtedness secured by the Acquired Assets. No notice to, filing with,
authorization of, exemption by, or Consent of any Person is required in order
for Seller to consummate the transactions contemplated hereby, except as shall
have been obtained on or prior to the Closing Date.
3.3 NO ADVERSE CHANGE. Since December 31, 2007, the Audio Conferencing
Business has been operated only in the usual, regular and ordinary course and
manner and there has not been any: (a) material loss or damage or other
materially adverse change to any of the Acquired Assets (whether or not covered
by insurance); (b) sale, transfer or disposition of any of the Acquired Assets
except in the ordinary course of business; (c) Encumbrance placed on any of the
Acquired Assets (except for Permitted Encumbrances); (d) contract, lease,
commitment, sales order, purchase order, license, mortgage, note, bond or other
agreement, whether written or oral, entered into by Seller other than in the
ordinary course of business; (e) material modification, cancellation or
termination of any material Audio Customer Service Contract; or (f) loss or
threatened loss of any customer material to the results of operations of the
Audio Conferencing Business.
3.4 TITLE TO AND CONDITION OF ASSETS. Seller has good and valid title
to the Acquired Assets. Seller hereby conveys the Acquired Assets to Purchaser
and hereby vests in Purchaser good and valid title to the Acquired Assets, free
and clear of any Encumbrance, except Permitted Encumbrances. The Access Numbers
constitute all of the telecommunications access numbers used in the Audio
Conferencing Business other than local telecommunications access numbers.
3.5 REVENUE STATEMENTS; ACCOUNTS RECEIVABLE; DEFERRED REVENUE; BILLING
PRACTICES.
(a) The list of Audio Customer Service Contracts and associated
gross revenues therefrom, broken out by month for the period beginning March 1,
2007 through and including March 31, 2008 (the "REVENUE STATEMENTS"): (i) are
true, complete and correct in all material respects; and (ii) fairly present the
audio conferencing revenues of Seller by service and by customer as of the dates
thereof and the periods then ended. A true and correct copy of the Revenue
Statements is set forth on SCHEDULE 3.5(a). The Revenue Statements have been
prepared in accordance with the books and records of Seller and do not reflect
any transactions that are not bona fide.
(b) The Collectable Accounts Receivable are owned by and in the
name of Seller, and SCHEDULE 3.5(b) sets forth all Collectable Accounts
Receivable of the Audio Conferencing Business outstanding as of the date hereof,
presented on an aged basis, and separately identifies the name of each account
debtor and the total amount of each related accounts receivable. All of Seller's
accounts receivable represent bona fide amounts owed for products previously
delivered or services previously rendered and none of Seller's accounts
receivable represent a billing for products not yet delivered or services not
yet performed. No material portion of any accounts receivable is in dispute or
subject to any counterclaim, defense or setoff. Seller has not accepted any
prepayment or other payment for products to be delivered or services to be
performed on or after the Closing Date. Seller does not have any issued and
outstanding invoices for payments due in consideration for services not yet
rendered or goods not yet delivered as of the Closing Date.
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(c) Set forth on SCHEDULE 3.5(c) is an accurate and complete
description of the billing practices utilized by Seller in billing the Audio
Customer Service Contacts for services and fees.
3.6 TAXES. All Taxes attributable to the Acquired Assets and the Audio
Conferencing Business have been properly determined in all material respects in
accordance with applicable Laws and have been timely paid in full if due and if
not due will be timely paid when due. Seller has duly and timely filed all
material Tax Returns required to be filed by it as of the Closing Date, in every
jurisdiction in which the same may have been so required and has paid all Taxes
disclosed on such returns. Each such Tax Return is true and complete in all
material respects and Seller does not have and will not have any additional
Liability with respect to such Tax Returns. All Taxes attributable to the
Acquired Assets and the Audio Conferencing Business that Seller is required by
Law to withhold or collect, including sales and use Taxes and amounts required
to be withheld for Taxes of employees, have been duly withheld or collected and,
to the extent required, have been paid over to the proper Governmental
Authorities. No material Tax Return of Seller is under audit or examination, and
no written notice of such an audit or examination has been received by Seller.
3.7 AGREEMENTS.
(a) SCHEDULE 3.7(a) sets forth an accurate and complete list of
all Audio Customer Service Contracts with rate information. Other than as
indicated next to each customer account on Schedule 3.7(a), no Audio Customer
Service Contract contains "most favored nation" or similar pricing provisions.
No Audio Customer Service Contract contains any restriction on the ability of
Seller to run its business, whether through "non-competition,"
"non-solicitation" or similar provisions. SCHEDULE 3.7(a) contains a true and
complete list of each Audio Customer Service Contract, together with any
material written agreements related thereto, if any, and a complete summary of
all oral Audio Customer Service Contracts. Seller is not aware any provision in
any written agreement or any oral understanding or any technological impediment
related to any Audio Customer Service Contract that would prohibit or impair
Purchaser's ability to provide the audio conferencing services to any Audio
Customer Service Contract. No event of default by Seller has occurred and is
continuing with respect to any such Audio Customer Service Contract, to Seller's
Knowledge no event of default by the other party or parties to such Audio
Customer Service Contract exists and no circumstance exists that, with notice or
lapse of time or both, would constitute an event of default by any party
thereto.
(b) SCHEDULE 3.7(b) sets forth an accurate and complete list of
all employment, consultant or independent contractor agreements and employee,
consultant or independent contractor non-competition or confidentiality
agreements currently in effect relating to the Audio Conferencing Business.
Seller has delivered to Purchaser a true and complete copy of all agreements
listed on SCHEDULE 3.7(b).
3.8 PERMITS. Seller holds the Permits described on SCHEDULE 3.8 (each
of which is in full force and effect) and to Seller's Knowledge no other Permits
are necessary for the lawful operation of the Audio Conferencing Business by
Seller or its ownership of the Acquired Assets. Seller has not received notice
of termination, revocation or modification of any Permit and is not delinquent
in the payment of any Taxes or fees with respect TO such Permits. Seller has
delivered true, correct and complete copies of each such Permit to Purchaser.
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3.9 LITIGATION. Except as disclosed in Seller's Form 10-K for the
fiscal year ending March 31, 2007, Form 10-Q for the fiscal quarter ending
December 31, 2007 or any Form 8-K filed with the Securities and Exchange
Commission after December 31, 2007, there is no notice of any claims, actions,
suits, disputes, proceedings, inquiries or governmental investigations (each, a
"PROCEEDING") pending or, to Seller's Knowledge, threatened against or affecting
the Audio Conferencing Business or any of the Acquired Assets or relating to the
transactions contemplated by this Agreement. Seller is not named in any order,
judgment, decree, stipulation or consent of or with any Governmental Authority
that affects or may affect the Audio Conferencing Business, the Acquired Assets
or the transactions contemplated by this Agreement. SCHEDULE 3.9 sets forth and
describes all Proceedings relating to the Audio Conferencing Business in the
three (3) years prior to the date hereof.
3.10 CUSTOMERS. Except as set forth in SCHEDULE 3.10(a), since December
31, 2007, no customer of the Audio Conferencing Business that was one of the top
fifty (50) customers of the Audio Conferencing Business as measured by audio
conferencing revenues during the twelve (12) months ended December 31, 2007 has
discontinued or materially limited its purchases from or dealings with Seller,
and, to Seller's Knowledge, as of the Closing Date, no such customer intends to
terminate or materially reduce its purchases from or dealings with the Audio
Conferencing Business.
3.11 COMPLIANCE WITH LAWS. To Seller's Knowledge, Seller has complied
with all Laws applicable to it, the Audio Conferencing Business and the Acquired
Assets. No claims have been filed against Seller alleging a violation of any
such Laws.
3.12 SOLVENCY. As of and for the one hundred eighty (180) day period
following the Closing: (i) the assets of Seller shall exceed its Liabilities;
(ii) the capital of Seller shall not be unreasonably small to conduct its
business; and (iii) Seller shall not have incurred debts, nor shall have
intended to incur debts, beyond its ability to pay such debts as they mature.
3.13 BROKERS. Seller has not incurred any Liability for brokerage or
finders' fees or agents' commission or other similar payment in connection with
the Acquisition.
3.14 DISCLOSURE. Neither this Agreement, nor any of the Schedules or
Exhibits hereto, or other agreements entered into connection with the
transactions contemplated hereby, contains any untrue statement of a material
fact or omits a material fact necessary to make the statements contained herein
or therein, in light of the circumstances in which they were made, not
misleading. No investigation or due diligence conducted by, or knowledge
obtained by, Purchaser or its Affiliates shall limit, modify or negate any of
the foregoing representations and warranties.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as of the date hereof and
the Closing Date as follows:
4.1 DUE INCORPORATION. Purchaser is a corporation duly organized and
validly existing under the laws of the State of Missouri with full corporate
authority to conduct its business as it is now conducted. Purchaser is duly
authorized to do business and in good standing in each other jurisdiction in
which either the nature of the activities intended to be conducted by it or
ownership of the Acquired Assets requires it to be so qualified, except where
the failure to be so qualified would not have a material adverse effect on
Purchaser or the Acquired Assets.
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4.2 DUE AUTHORIZATION. Purchaser has the full power and authority to
enter into this Agreement and to carry out the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by Purchaser has been
duly authorized by all necessary corporate action on the part of Purchaser. This
Agreement has been duly and validly executed and delivered by Purchaser and
constitutes the legal, valid and binding obligation of Purchaser enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium, reorganization and other similar laws affecting the right of
creditors generally, and to the exercise of a court's equitable powers. The
execution, delivery and performance by Purchaser of this Agreement and all other
instruments, agreements, certificates and documents contemplated hereby to be
executed, delivered and performed by Purchaser: (a) do not, and will not,
violate or conflict with any provision of the articles of incorporation, bylaws
or other organizational and governing documents of Purchaser; and (b) do not,
and will not, violate or constitute a default under any contract or, to
Purchaser's Knowledge, any Law to which Purchaser is a party, or by which it is
bound. No notice to, filing with, authorization of, exemption by or consent of
any Person or entity is required in order for Purchaser to consummate the
transactions contemplated hereby, except as shall have been obtained on or prior
to the Closing Date.
4.3 BROKERS. Purchaser has not incurred any Liability for brokerage or
finders' fees or agents' commission or other similar payment in connection with
the Acquisition.
4.4 PERMITS. Purchaser holds the permits (each of which is in full
force and effect) and to Purchaser's Knowledge no other Permits are necessary
for the lawful operation of the Audio Conferencing Business by Purchaser or its
ownership of the Acquired Assets.
4.5 LITIGATION. Except as disclosed in Purchaser's Form 10-K for it's
fiscal year ending December 31, 2007, there is no Proceeding pending or, to
Purchaser's Knowledge, threatened against or affecting Purchaser that would
impair Purchaser's ability to derive revenue from the Audio Conferencing Service
Contacts post-closing.
ARTICLE V
COVENANTS
5.1 ACCESS TO INFORMATION. Until the earlier of the Closing Date or
termination of this Agreement in accordance with ARTICLE VII, Seller shall give
to Purchaser, its officers, agents, employees, counsel, accountants and other
representatives, reasonable access to the books and records of the Audio
Conferencing Business as it requests. Seller shall cause its officers,
employees, consultants, agents, accountants, attorneys and other representatives
to cooperate with Purchaser and Purchaser's representatives in connection with
such investigation and examination.
5.2 CONDUCT OF THE AUDIO CONFERENCING BUSINESS PENDING THE CLOSING.
Prior to the Closing, except: (i) as required by applicable Law; or (ii) with
the prior written consent of Purchaser, Seller shall:
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(a) conduct the Audio Conferencing Business only in the ordinary
course of business consistent with past practices; and
(b) use its commercially reasonable efforts to preserve the
present relationships with customers and vendors of the Audio Conferencing
Business.
(c) not take or omit to take any action that would violate the
representation contained in SECTION 3.3 or otherwise agree to anything
prohibited by this SECTION 5.2.
5.3 TRANSITION COOPERATION; MAIL RECEIVED AFTER CLOSING.
(a) Promptly following the Closing, Purchaser and Seller shall
cooperate in coordinating with all third-party telecommunications companies
regarding the smooth and prompt transfer to Purchaser of all toll free numbers
constituting Acquired Assets.
(b) From and after the Closing Date, Seller shall promptly forward
or cause to be forwarded to Purchaser any mail received by Seller that relates
to the Audio Conferencing Business, the Acquired Assets or the Assumed
Liabilities, and Purchaser shall promptly forward or cause to be forwarded to
Seller any mail received by Purchaser that relates to the Excluded Assets or the
Retained Liabilities.
(c) Following the Closing Date, Seller hereby grants to Purchaser
the power, right and authority, coupled with an interest, to receive, endorse,
cash, deposit, and otherwise deal with, in the name of Seller, any checks,
drafts, documents and instruments constituting payment of any notes or accounts
receivable included in the Acquired Assets and that are payable to, payable to
the order of, or endorsed in favor of Seller or any agent of Seller. Seller
agrees promptly to endorse and pay over or cause to be endorsed and paid over to
Purchaser, without deduction or offset, the full amount of any payment received
by Seller after the Closing Date in respect of goods sold or services rendered
as part of the Audio Conferencing Business.
(d) Following the Closing Date, Seller and Purchaser will
cooperate in a commercially reasonable manner to permit Seller to integrate
Purchaser's unattended audio conferencing services with the Seller's Web
conferencing offering. Purchaser agrees to provide the Seller with documentation
of and access to its published application programming interface ("API") for its
audio conferencing bridge and provide assistance in its ordinary course of
business so as to permit the Seller's engineers a reasonable opportunity to
integrate Purchaser's unattended audio conferencing services with the Seller's
Web conferencing offering. In no event shall Purchaser be required to alter or
modify its API or its audio conferencing bridges as a result of this Agreement.
5.4 POST-CLOSING EXPENSES. Subject to the provisions of SECTION 8.1,
Seller is responsible for all expenses (other than Assumed Liabilities) related
to the Audio Conferencing Business incurred prior to and on the Closing Date and
Purchaser is responsible for all Assumed Liabilities and for all expenses
related to the Audio Conferencing Business first incurred after the Closing
Date, and Purchaser will forward to Seller invoices for expenses relating solely
to the period on and before the Closing Date (other than Assumed Liabilities)
and Seller shall pay such invoices directly to the payee. In order to assure
Purchaser of no disruption in services, Purchaser will pay any invoices which
reflect expenses relating to both the period before and after the Closing Date,
however, Seller shall remain obligated for its portion of such expenses in
accordance with the terms of this Agreement. On or before sixty (60) days after
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the Closing Date, Purchaser and Seller will provide each other with a list of
all such pro-rated, pre-Closing Date-paid, Closing Date-paid and post-Closing
Date-paid expenses that are not otherwise addressed by this Agreement as Assumed
Liabilities. Purchaser and Seller shall reimburse each other promptly for any
amounts due each other at that time and thereafter within ten (10) calendar days
after receipt of proof of payment of any such expenses.
5.5 PAYMENT OF RETAINED LIABILITIES. Seller shall pay, or make adequate
provision for the payment, in full all of the Retained Liabilities and other
Liabilities of Seller under this Agreement. If any such Liabilities are not so
paid or provided for and Purchaser determines that the failure to so pay or
provide for such Liabilities would materially impair Seller's ability to satisfy
its obligations under the Transition Services Agreement, Purchaser shall provide
notice to Seller of such event and, if Seller has failed to pay or provide for
such Liabilities after five (5) calendar days notice, Purchaser may, at any time
after the Closing Date, elect to make all such payments directly (but shall have
no obligation to do so) and the full amount of all such payments made by
Purchaser shall be promptly reimbursed by Seller following Purchaser's written
notice to Seller thereof.
5.6 FURTHER ASSURANCES. All deliveries, payments and other transactions
and documents relating to the transactions contemplated herein shall be
interdependent and none shall be effective unless and until all are effective
(except to the extent that the party entitled to the benefit thereof has waived
in writing satisfaction or performance thereof as a condition precedent to the
Closing). Each party shall, at the request of any other party from time to time
and at any time, whether on or after the Closing Date, and without further
consideration, execute and deliver such deeds, assignments, transfers,
assumptions, conveyances, powers of attorney, receipts, acknowledgments,
acceptances and assurances as may be reasonably necessary to procure for the
party so requesting, and its successors and assigns, or for aiding and assisting
in collecting and reducing to possession, any and all of the Acquired Assets, or
for the assumption of the Assumed Liabilities, or to otherwise satisfy and
perform the obligations of the parties hereunder or to otherwise give effect to
the transactions contemplated hereby. Without limiting the generality of the
foregoing, Seller shall, upon the request of Purchaser and without further
consideration, in a timely manner on and after the Closing Date execute and
deliver to Purchaser such other documents, releases, assignments and other
instruments as may be reasonably required to effectuate completely the transfer
and assignment to Purchaser of, and to vest fully in Purchaser all of Seller's
rights to the Acquired Assets.
5.7 PRESS RELEASES AND ANNOUNCEMENTS. Prior to the Closing, except as
required by applicable Law or exchange on which such Person's securities are
listed, neither party nor any of their respective stockholders, officers,
directors, employees, agents or Affiliates shall make any press release or other
direct or indirect public announcement or disclosure regarding or relating to
this Agreement or any transaction contemplated hereby without the prior written
consent of the other party. To the extent either party makes a press release or
other direct or indirect public announcement or disclosure, such party will
provide the other party with reasonable notice and opportunity to comment on
such press release, announcement or disclosure.
5.8 CONDUCT OF THE AUDIO CONFERENCING BUSINESS POST CLOSING. After the
Closing for a period of one year following the Closing Date, except: (i) as
required by applicable Law; or (ii) with the prior written consent of Seller,
Purchaser shall conduct its audio conferencing business concerning the Audio
Customer Service Contracts in the ordinary course of business consistent with
Purchaser's past practices. After the Closing and until the Transition Date,
except: (i) as required by applicable Law; or (ii) with the prior written
consent of Purchaser, Seller shall conduct the audio conferencing business
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concerning the Audio Customer Service Contracts (to the extent required by the
Transition Services Agreement) in the ordinary course of business consistent
with Seller's past practices. Each party agrees to, for the one (1) year period
following the Closing Date, use its commercially reasonable efforts consistent
with its respective past practices to preserve the Audio Customer Service
Contracts and customer and vendor relationships related to the Audio Customer
Service Contracts.
5.9 KEY PERSONNEL. Following the Closing and until the Transition Date,
Seller shall continue to employ the Key Personnel to assist in the transition of
the Audio Conferencing Business from Seller to Purchaser. Following the
Transition Date, Seller shall also pay severance to the Key Personnel. The
payments set forth in this SECTION 5.9 shall be for, among other things, the Key
Personnel's execution of and compliance with the non-competition and
non-solicitation agreement to be delivered pursuant to SECTION 6.2(k).
ARTICLE VI
CLOSING
6.1 CLOSING. The consummation of the transactions contemplated in this
Agreement (the "CLOSING") will take place at the offices of Xxxxxx Xxxxxxx Xxxxx
& Xxxxxxxxxxx LLP, 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx, at 10:00 a.m.,
Atlanta, Georgia time, on the second Business Day following the satisfaction or
waiver (to the extent waivable) of the conditions set forth in SECTIONS 6.2 and
6.3, or at such other place and time as the parties have mutually agreed, with
such date anticipated to be no later than May 1, 2008. The date on which the
Closing actually occurs is referred to herein as the "CLOSING DATE ."
6.2 CONDITIONS TO OBLIGATION OF PURCHASER. The obligations of Purchaser
to purchase the Acquired Assets and assume the Assumed Liabilities at the
Closing are subject to the satisfaction of each of the following conditions,
unless explicitly waived by Purchaser in writing:
(a) Seller shall have performed and satisfied each of its
obligations hereunder required to be performed and satisfied at or prior to the
Closing; PROVIDED, that for purposes of clarification, Seller's failure to
obtain any Consent to the transfer or assignment of any Audio Customer Service
Contract shall not be deemed a failure of Seller to satisfy its obligations
under this SECTION 6.2(a).
(b) (i) Each of the representations and warranties of Seller and
contained herein was true and correct as of the date hereof and will be true and
correct at and as of the Closing Date; and (ii) there shall not have been any
material adverse change in the business, prospects, condition (financial or
otherwise) or results of operations of the Audio Conferencing Business and no
event shall have occurred that would require disclosure under SCHEDULE 3.3.
(c) Purchaser shall have received from Seller a certificate signed
by a duly authorized executive officer of Seller certifying the satisfaction of
the conditions set forth in SECTIONS 6.2(a) AND 6.2(b).
(d) All required Consents or approvals from Governmental
Authorities for the transactions contemplated by this Agreement shall have been
obtained in form and substance reasonably satisfactory to Purchaser and its
counsel and shall remain in full force and effect as of the Closing Date.
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(e) No temporary restraining order, preliminary or permanent
injunction, cease and desist order or other order issued by any court of
competent jurisdiction or Governmental Authority preventing any transfer
contemplated hereby or the consummation of the Closing, or imposing damages in
respect thereto, shall be in effect, and there shall be no pending or threatened
Proceedings by any Governmental Authority or by any other Person challenging or
in any manner seeking to restrict or prohibit the Acquisition or the
consummation of any other transactions contemplated hereby.
(f) Purchaser shall have received a certificate from the Secretary
or comparable official of Seller, dated as of the Closing Date, attesting to
Seller's Board of Directors' resolutions and authorizing the execution, delivery
and performance of this Agreement and the other agreements contemplated to be
executed, performed and delivered by Seller hereunder.
(g) Purchaser shall have received a counterpart of the Transition
Services Agreement, in the form attached hereto as EXHIBIT A (the "TRANSITION
SERVICES AGREEMENT"), duly executed by Seller.
(h) Purchaser shall have received a counterpart of an agent
agreement and wholesale reseller agreement permitting the sale by Seller of
Purchaser's audio conferencing services (referred to together in the singular as
the "AGENT AGREEMENT"), duly executed by Seller.
(i) Purchaser shall have received a Xxxx of Sale, in form attached
hereto as EXHIBIT B, duly executed by Seller (the "XXXX OF SALE"), and such
other instruments as may be reasonably requested by Purchaser to transfer full
legal and beneficial ownership of the Acquired Assets to Purchaser, free and
clear of Encumbrances other than Permitted Encumbrances.
(j) Purchaser shall have received a counterpart of the Assignment
and Assumption Agreement, in the form attached hereto as EXHIBIT C, duly
executed by Seller, whereby Seller will assign, and Purchaser will assume, the
Assumed Liabilities (the "ASSIGNMENT AND ASSUMPTION AGREEMENT").
(k) Purchaser shall have received a counterpart of a
non-competition and non-solicitation agreement by and between the Purchaser and
the Key Personnel, in a form mutually agreeable between Purchaser and the Key
Personnel, duly executed by the Key Personnel.
(l) Purchaser shall have received evidence reasonably satisfactory
to Purchaser and its counsel that all mortgages, security interests, collateral
assignments and other Encumbrances (other than Permitted Encumbrances) on any of
the Acquired Assets shall have been released, discharged and terminated in full.
(m) Purchaser shall have received all other documents, instruments
and certificates in connection with the transactions contemplated by this
Agreement as Purchaser may reasonably request in form and substance reasonably
satisfactory to Purchaser and its counsel.
6.3 CONDITIONS TO OBLIGATION OF SELLER. The obligations of Seller to
sell the Acquired Assets and assign the Assumed Liabilities at the Closing are
subject to the satisfaction of each of the following conditions, unless
explicitly waived in writing by Seller:
(a) Purchaser shall have performed and satisfied each of its
obligations hereunder required to be performed and satisfied by it at or prior
to the Closing.
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(b) Each of the representations and warranties of Purchaser
contained herein was true and correct as of the date hereof and will be true and
correct at and as of the Closing Date.
(c) Seller shall have received a certificate signed by a duly
authorized officer or representative of Purchaser certifying the satisfaction of
the conditions set forth in SECTIONS 6.3(a) and 6.3(b).
(d) No temporary restraining order, preliminary or permanent
injunction, cease and desist order or other order issued by any court of
competent jurisdiction or any Governmental Authority preventing any transfer
contemplated hereby or the consummation of the Closing, or imposing damages in
respect thereto, shall be in effect, and there shall be no pending or threatened
actions or Proceedings by any Governmental Authority (or determinations by any
Governmental Authority) or by any other Person challenging or in any manner
seeking to restrict or prohibit the sale of the Acquired Assets or the
consummation of any other transactions contemplated hereby.
(e) Seller shall have received a counterpart of the Transition
Services Agreement, duly executed by Purchaser.
(f) Seller shall have received a counterpart of the Agent
Agreement, duly executed by Purchaser.
(g) Seller shall have received a counterpart of the Assignment and
Assumption Agreement, duly executed by Purchaser.
(h) Purchaser shall have tendered payment of the amounts described
in ARTICLE II required to be tendered to Seller at the Closing in accordance
with ARTICLE II.
(i) Seller shall have received all other documents, instruments
and certificates in connection with the transactions contemplated by this
Agreement as Seller may reasonably request in form and substance reasonably
satisfactory to Seller and its counsel.
ARTICLE VII
TERMINATION
7.1 TERMINATION OF AGREEMENT. This Agreement may be terminated prior to
the Closing as follows:
(a) by mutual written consent of Seller and Purchaser;
(b) Seller may terminate this Agreement by giving written notice
to Purchaser at any time prior to the Closing if: (i) Purchaser has breached any
covenant, representation or warranty in any material respect contained in this
Agreement and such breach has not been cured within twenty (20) calendar days
following the delivery of notice of such breach to Purchaser (so long as Seller
is not then in material breach of any covenant, representation or warranty
contained in this Agreement); or (ii) if the Closing shall not have occurred on
or before May 2, 2008 (the "EXPIRATION DATE"), by reason of the failure of any
condition precedent under SECTION 6.3 hereof (unless the failure results
primarily from Seller's breach of any representation, warranty or covenant
contained in this Agreement);
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(c) Purchaser may terminate this Agreement by giving written
notice to Seller at any time prior to the Closing: (i) if Seller has breached
any covenant, representation or warranty in any material respect contained in
this Agreement and such breach has not been cured within twenty (20) calendar
days following the delivery of notice of such breach to Seller (so long as
Purchaser is not then in material breach of any covenant, representation or
warranty contained in this Agreement); or (ii) if the Closing shall not have
occurred on or before the Expiration Date, by reason of the failure of any
condition precedent under SECTION 6.2 hereof (unless the failure results
primarily from Purchaser's breach of any representation, warranty or covenant
contained in this Agreement); or
(d) by Seller or Purchaser if there shall be in effect a final
nonappealable judgment or order of a Governmental Authority of competent
jurisdiction restraining, enjoining or otherwise prohibiting the consummation of
the transactions contemplated hereby; it being agreed that the parties hereto
shall use commercially reasonable efforts to appeal any adverse determination
which is not nonappealable (and pursue such appeal with reasonable diligence).
7.2 PROCEDURE UPON TERMINATION. In the event of termination and
abandonment by Purchaser or Seller, or both, in accordance with SECTION 7.1,
written notice thereof shall forthwith be given to the other party, and this
Agreement shall terminate, and the Acquisition shall be abandoned, without
further action by Purchaser or Seller.
7.3 EFFECT OF TERMINATION. In the event that this Agreement is validly
terminated in accordance with SECTION 7.2, the parties shall be relieved of
their duties and obligations arising under this Agreement after the date of such
termination and such termination shall be without liability to the parties;
PROVIDED, that no such termination shall relieve any party hereto from liability
for any willful breach of this Agreement; PROVIDED FURTHER, that the obligations
of the parties set forth in SECTION 5.8 (Press Releases and Announcements) and
ARTICLE XI (Miscellaneous) hereof shall survive any such termination and shall
be enforceable hereunder.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
8.1 SURVIVAL. The representations, warranties and covenants of the
parties contained in this Agreement or in any other certificate, report or other
writing delivered pursuant hereto shall survive until the earlier of: (i) two
(2) years after the Closing Date, and (ii) eighteen (18) months after the
Transition Date, unless on or before the termination thereof (or of the period
set forth below applicable to certain representations and warranties), the
complaining party notifies the other party in writing of a claim specifying the
factual basis for that claim in reasonable detail; PROVIDED, HOWEVER, that (i)
the representations and warranties set forth at SECTIONS 3.1, 3.2, 3.4, 4.1 and
4.2 shall survive and shall not expire; (ii) the representation and warranty set
forth in SECTION 3.6 shall survive until the ninetieth (90th) day after
expiration of the applicable statute of limitations; and (iii) the covenants set
forth in Articles V and IX that by their terms survive the Closing until the
period reflected therein in each covenant. After a representation, warranty or
covenant has terminated and expired, no indemnification will or may be sought
pursuant to this ARTICLE VIII on the basis of that representation, warranty or
covenant by any Person who would have been entitled pursuant to this ARTICLE
VIII to indemnification on the basis of that representation and warranty prior
to its termination and expiration.
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8.2 INDEMNIFICATION BY SELLER. Subject to SECTION 8.6, Seller shall
indemnify and defend Purchaser and its Affiliates (the "PURCHASER INDEMNIFIED
PARTIES") against, and shall hold them harmless from, any Losses incurred or
suffered (as incurred or suffered) by any of the Purchaser Indemnified Parties
relating to or arising out of any of the following: (a) any breach (on or prior
to the Closing Date) of or inaccuracy in any representation or warranty made by
Seller pursuant to this Agreement or any certificate, document, writing or
instrument delivered by Seller pursuant to this Agreement; (b) any breach of or
failure by Seller to perform any covenant or obligation of Seller set out in
this Agreement; (c) any alleged, contingent or absolute debt, claim, obligation
or other Liability of Seller other than the Assumed Liabilities; (d) any and all
Taxes of Seller; (e) any brokerage or finders' fees or commissions or similar
payments based upon any agreement or understanding made, or alleged to have been
made, by any Person with Seller (or any Person acting on its behalf) in
connection with the Acquisition; (f) the Retained Liabilities; or (g) any
violation of the bulk transfers law of any state. Purchaser shall be entitled to
apply any Losses indemnifiable by Seller pursuant to this SECTION 8.2 against
any amounts to which Purchaser is obligated to pay to Seller, including pursuant
to ARTICLE II.
8.3 INDEMNIFICATION BY PURCHASER. Subject to SECTION 8.6, Purchaser
shall indemnify and defend Seller against, and shall hold it harmless from, any
Losses incurred or suffered (as incurred or suffered) by Seller relating to or
arising out of any of the following: (a) any breach of or any inaccuracy in any
representation or warranty made by Purchaser pursuant to this Agreement or any
certificate, document, writing or instrument delivered by Purchaser pursuant to
this Agreement; (b) any breach of or failure by Purchaser to perform any
covenant or obligation of Purchaser set out in this Agreement; (c) the Assumed
Liabilities; or (d) the ownership, management, operation or use by Purchaser of
the Acquired Assets or the conduct of the Audio Conferencing Business by
Purchaser after the Closing Date.
8.4 NOTICE OF CLAIMS; ASSUMPTION OF DEFENSE. The indemnified party
shall give prompt notice to the indemnifying party, in accordance with the terms
of SECTION 12.2, of the assertion of any Proceeding in respect of which
indemnity may be sought hereunder, specifying with reasonable particularity the
basis therefor and giving the indemnifying party such information with respect
thereto as the indemnifying party may reasonably request (but the giving of such
notice shall not be a condition precedent to indemnification hereunder). At its
own expense, the indemnifying party may participate in and, at any time during
the course of any such Proceeding, upon notice to the indemnified party and the
indemnifying party's written agreement that the indemnified party is entitled to
indemnification pursuant to SECTION 8.2 or SECTION 8.3, assume the defense
thereof; PROVIDED, that the indemnifying party's counsel is reasonably
satisfactory to the indemnified party, and the indemnifying party shall
thereafter consult with the indemnified party upon the indemnified party's
request for such consultation from time to time with respect to such Proceeding.
If the indemnifying party assumes such defense, the indemnified party shall have
the right (but not the duty) to participate in the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by the
indemnifying party. Whether or not the indemnifying party chooses to defend or
prosecute any such Proceeding, the parties hereto shall cooperate in the defense
or prosecution thereof. In the event that the indemnifying party elects not to
assume the defense of any Proceeding, such election shall not relieve the
indemnifying party of its obligations hereunder.
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8.5 SETTLEMENT OR COMPROMISE. No party shall settle or compromise any
Proceeding without the prior written consent of the other party, which shall not
be unreasonably withheld, conditioned or delayed. Any settlement or compromise
made or caused to be made by the indemnified party or the indemnifying party, as
the case may be, of any such Proceeding of the kind referred to in SECTION 8.4
shall also be binding upon the indemnifying party or the indemnified party, as
the case may be, in the same manner as if a final judgment or decree had been
entered by a court of competent jurisdiction in the amount of such settlement or
compromise.
8.6 LIMITATIONS ON INDEMNIFICATION. No Person shall be entitled to seek
indemnification for Losses arising out of SECTIONS 8.2(a) or 8.3(a): (a) unless
and until the aggregate amount of Losses arising out of SECTIONS 8.2(a) or
8.3(a), as applicable, exceed in the aggregate $12,500 (after which all such
Losses (including the first $12,500) shall be indemnifiable pursuant to this
ARTICLE VIII); and (b) to the extent Purchaser or Seller, as applicable, has
made indemnification payments under this ARTICLE VIII in excess of fifty percent
(50%) of the Purchase Price; PROVIDED, HOWEVER, that the limitations set forth
in this SECTION 8.6 shall not apply to claims for Losses arising out of willful
breach or fraud of either party.
ARTICLE IX
NON-COMPETITION AND CONFIDENTIALITY
9.1 DEFINITION. "CONFIDENTIAL INFORMATION" shall mean any and all
information concerning the business affairs of the Purchaser or Seller, and
shall include such information as it relates to any Affiliate of the Purchaser
or Seller. Without limiting the generality of the foregoing, Confidential
Information includes but is not limited to information:
(a) which constitutes proprietary information of the Purchaser or
Seller (including, with respect to Purchaser, the API);
(b) which contains financial statements, financial projections and
budgets, historical and projected sales, capital spending budgets and plans,
business plans, the names and backgrounds of key personnel, customer lists and
customer information, personnel training and techniques and materials, marketing
plans or market expansion proposals and sales techniques and materials of the
Purchaser or Seller, however documented;
(c) from which it could be reasonably inferred that would confer a
competitive advantage on the Purchaser or Seller;
(d) from which it could be reasonably inferred that would be
detrimental to the Purchaser or Seller;
(e) product specifications, discoveries, improvements, processes,
marketing and service methods or techniques, formulae, designs, styles,
specifications, data bases, computer programs (whether in source code or object
code), know-how, strategies, current and anticipated customer requirements,
price lists, market studies, and any other information, however documented, that
is a trade secret of Purchaser or Seller under applicable law; and
(f) notes, analyses, compilations, studies, summaries, and other
material prepared by or for the Purchaser or Seller containing or based, in
whole or in part, on any information included in the foregoing.
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Notwithstanding anything to the contrary above, the term "Confidential
Information" does not include information that: (x) is or becomes generally
available to the public other than as a result of a disclosure by the receiving
party or its representatives; (y) was within the receiving party's possession
prior to its being furnished to the receiving party by or on behalf of the
disclosing party pursuant hereto; or (z) becomes available to the receiving
party on a non-confidential basis from a source other than the disclosing party
or any of its representatives (provided that with respect to clauses (y) and (z)
above, the source of such information was not bound by a confidentiality
agreement with, or other contractual, legal or fiduciary obligation of
confidentiality to, the disclosing party or any other party with respect to such
information).
9.2 CONFIDENTIALITY ACKNOWLEDGMENTS AND AGREEMENTS.
(a) Seller hereby acknowledges, agrees and covenants that until
the date that is five (5) years after the Closing Date (or earlier termination
as the case may be), Seller and its Affiliates will keep confidential, will hold
for the sole benefit of the Purchaser, and will not use except on behalf of the
Purchaser, all Confidential Information of Purchaser (whether obtained pursuant
to this Agreement or otherwise), which Seller acknowledges is, or shall be,
proprietary to the Purchaser; PROVIDED, HOWEVER, that any Confidential
Information that is also considered a trade secret under applicable Law, shall
not be disclosed by Seller as long as such information remains a trade secret
and is not generally known or available to the public other than as a result of
unauthorized or unlawful disclosure directly or indirectly by Seller. Seller
agrees that upon request it shall forthwith return to the Purchaser, or destroy
to the satisfaction of the Purchaser, all Confidential Information of Purchaser
(whether obtained pursuant to this Agreement or otherwise) in whatever form such
information is in the possession of Seller or under Seller's control, and shall
additionally return all documents and other property that is in Seller's
possession or under Seller's control and belonging to the Purchaser.
Notwithstanding the foregoing, the obligations of confidentiality, nondisclosure
and non-use with respect to Confidential Information required by this SECTION
9.2(a) shall not apply to any Confidential Information required to be disclosed
in a judicial or administrative proceeding, or is otherwise required to be
disclosed by Law, in any such case only after giving the non-disclosing party as
much advance notice of the possibility of such disclosure as practical so that
the non-disclosing party may attempt to stop such disclosure or obtain a
protective order concerning such disclosure.
(b) Purchaser hereby acknowledges, agrees and covenants that until
the date that is five (5) years after the Closing Date (or earlier termination
as the case may be), Purchaser and its Affiliates will keep confidential all
Confidential Information of Seller, which Purchaser acknowledges is, or shall
be, proprietary to Seller; PROVIDED, HOWEVER, that any Confidential Information
that is also considered a trade secret under applicable Law, shall not be
disclosed by Purchaser as long as such information remains a trade secret and is
not generally known or available to the public other than as a result of
unauthorized or unlawful disclosure directly or indirectly by Purchaser.
Purchaser agrees that upon termination of this Agreement in accordance with
ARTICLE VII it shall forthwith return to the Seller, or destroy to the
satisfaction of the Seller, all Confidential Information of Seller in whatever
form such information is in the possession of Purchaser or under Purchaser's
control. Notwithstanding the foregoing, the obligations of confidentiality,
nondisclosure and non-use with respect to Confidential Information required by
this SECTION 9.2(b) shall not apply to any Confidential Information required to
be disclosed in a judicial or administrative proceeding, or is otherwise
required to be disclosed by Law, in any such case only after giving the
non-disclosing party as much advance notice of the possibility of such
disclosure as practical so that the non-disclosing party may attempt to stop
such disclosure or obtain a protective order concerning such disclosure.
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9.3 LIMITED ACTIVITIES. Should Closing occur, then until the date that
is three (3) years after the Closing Date, Seller and its Affiliates will not,
directly or indirectly, for any reason, for its own benefit, or for the benefit
of or together with any Person:
(a) solicit, or attempt to solicit , any employee, officer, or
director of Purchaser or its Affiliates to terminate that Person's engagement or
relationship with Purchaser or its Affiliates.
(b) solicit or attempt to solicit, any Person party to an Audio
Customer Service Contracts (each, a "Customer") for the purpose of having that
Customer cease purchasing audio conferencing services from Purchaser or its
Affiliates;
(c) divert or attempt to divert any or all of such Customers'
business from Purchaser or its Affiliates in violation of any unfair competition
Laws or other applicable Laws; or
(d) be engaged as an executive officer, limited liability entity
manager or director or in any other managerial or sales capacity or as an owner,
co-owner, or other investor of or in, whether as an employee, independent
contractor, consultant or advisor, or sales representative or distributor of any
kind, in any business constituting audio conference calling, including
on-demand, reservationless and operator-assisted conferencing anywhere in the
United States (the "RESTRICTED AUDIO CONFERENCING BUSINESS"), with the parties
acknowledging that Purchaser and its Affiliates are actively engaged in such
business throughout and beyond all parts of the United States; PROVIDED,
HOWEVER, the foregoing prohibition on ownership shall not apply to the ownership
of less than one percent (1%) of the outstanding capital stock of any such
Restricted Audio Conferencing Business that is publicly traded; PROVIDED,
FURTHER, that the foregoing restrictions and prohibitions contained in this
SECTION 9.3 shall not prohibit or restrict: (i) Seller's serving as an
independent sales representative pursuant to the Agent Agreement; (ii) Seller's
conducting its EventPlus Business; or (iii) Seller's conducting its Web
Collaboration Business. For clarity and to avoid dispute in the future, it is
acknowledged by the parties that the Seller and the Purchaser are engaged, and
plan to continue to be engaged, in competitive web conferencing and web
collaboration businesses, and that nothing herein shall restrict or limit
Seller's ability to engage in all respects in Seller's EventPlus Business or
Seller's Web Collaboration Business (which shall include (and shall not be
restricted by this SECTION 9.3) the sale and offer of audio conferencing
services by third-party resellers of Seller (I.E. not Affiliates of Seller) in
conjunction with such third-party resellers' sale of Seller's web conferencing
services and products).. The foregoing restrictions contained in this SECTION
9.3 shall not apply to any non-Affiliated, third-party purchaser ("THIRD PARTY
BUYER") who acquires (whether by merger, consolidation or otherwise) all of the
outstanding equity securities of Seller in a BONA fide, third-party transaction,
where such Third Party Buyer is engaged in the Restricted Audio Conferencing
Business; PROVIDED, HOWEVER, that Seller shall not under any circumstances
reveal to the Third Party Buyer the Confidential Information of Purchaser or the
Confidential Information of Seller specifically related to the Audio
Conferencing Business or the Audio Customer Service Contracts.
9.4 PURCHASER NON-SOLICIT.
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(a) Should the Closing occur, then subject to the remaining
provisions of this SECTION 9.4, until the date that is three (3) years after the
Closing Date, Purchaser and its Affiliates will not for any reason, for its own
benefit, or for the benefit of or together with any Person solicit or attempt to
solicit, any of the Web Accounts (as defined below) of Seller for the purpose of
having the Web Account customers cease using Seller's Web Collaboration Business
and instead use similar services available from Purchaser or its Affiliates;
provided, however, that this restriction shall not apply to any Web Account
which is also an existing customer of Purchaser as of the Closing Date. As used
herein, "WEB ACCOUNTS" shall be defined as any Audio Conferencing Business
account identified on SCHEDULE 3.7(A) as a "web account" of Seller.
(b) In the event any Web Account notifies Purchaser or its
Affiliates that such Person is seeking a new provider of services competitive
with or substitutable for Seller's Web Collaboration Business (an "OPEN WEB
ACCOUNT"), Purchaser shall provide reasonably prompt notice to Seller (the "WEB
ACCOUNT NOTICE"). If, after thirty (30) days following Purchaser's delivery of
the Web Account Notice, the relevant Open Web Account continues to seek a new
provider of services competitive with or substitutable for Seller's Web
Collaboration Business, Purchaser and its Affiliates shall be entitled to
solicit such Open Web Account for such competitive or substitutable services so
long as: (a) the Audio Conferencing Business and the services provided thereto
by Purchaser (or its Affiliate) with an Open Web Account would be at-risk of
loss of audio conferencing services (as reasonably determined by Purchaser in
good faith); and (b) Purchaser provides notice to Seller regarding Purchaser's
intent to offer such competitive or substitutable services.
(c) The foregoing limitations contained in SECTIONS 9.4(a) and (b)
shall not apply to: (i) any Person with whom Purchaser or any of its Affiliates
is in active discussions as of the Closing Date as evidenced by mutual
correspondence (excluding general marketing communications), meetings, or
receipt of a request for proposal (or similar correspondence) within two months
prior to the Closing Date; or (ii) any separate unit or department within a
Customer who is not then a customer of Seller's Web Collaboration Business. For
the avoidance of doubt, the foregoing restrictions of SECTION 9.4(A) and (B) are
applicable to Purchaser and its Affiliates and are not applicable to any third
party resellers or wholesale customers of Purchaser or its Affiliates.
9.5 SEVERABILITY; REFORMATION. The covenants in this ARTICLE IX are
severable and separate, and the unenforceability of any specific covenant in
this ARTICLE IX is not intended by either party to, and shall not, affect the
provisions of any other covenant in this ARTICLE IX. If any court of competent
jurisdiction shall determine that the scope, time, or territorial restrictions
set forth in SECTION 9.3 are unreasonable as applied to either party, the
parties acknowledge their mutual intention and agreement that those restrictions
be enforced to the fullest extent the court deems reasonable, and thereby shall
be reformed to that extent as applied to such party and its Affiliates.
9.6 INDEPENDENT COVENANT. All of the covenants in this ARTICLE IX are
intended by each party hereto to be, and shall be construed as, an agreement
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of a party against the other party or its Affiliates,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by either party or its Affiliate of any covenant in
this ARTICLE IX. It is specifically agreed that the period specified in SECTION
9.3 shall be computed by excluding from that computation any time during which
Seller is in violation of any provision of SECTION 9.3.
9.7 MATERIALITY. Purchaser and Seller hereby agree that this ARTICLE IX
is a material and substantial part of this Agreement, and absent both parties
entering into the restrictions of this ARTICLE IX, neither party would have
entered into this Agreement and consummated the Acquisition.
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ARTICLE X
CERTAIN DEFINITIONS
10.1 DEFINITIONS. The following terms, as used in this Agreement, have
the following meanings:
"AAA" shall have the meaning set forth in SECTION 11.1.
"ACCESS NUMBERS" shall have the meaning set forth in SECTION 1.1(c).
"ACCRUED REVENUE PAYMENT" shall have the meaning set forth in SECTION
2.5.
"ACQUIRED ASSETS" shall have the meaning set forth in SECTION 1.1.
"ACQUISITION" shall have the meaning set forth in the Preamble.
"AFFILIATES" of any Person shall mean any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
"AGENT AGREEMENT" shall have the meaning set forth in SECTION 6.2(i).
"AGREEMENT" shall have the meaning set forth in the Preamble.
"API" shall have the meaning set forth in SECTION 5.3(d).
"ARBITRATION NOTICE" shall have the meaning set forth in SECTION 11.1.
"ARBITRATION RULES" shall have the meaning set forth in SECTION 11.1.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall have the meaning set forth
in SECTION 6.2(k).
"ASSUMED LIABILITIES" shall have the meaning set forth in SECTION 1.3.
"AUDIO CONFERENCING BUSINESS" means the business of Seller as a
conferencing service provider thereby providing audio conferencing products and
services (specifically and primarily on-demand reservationless toll and toll
free audio conferencing and reserved toll free operator-assisted and dedicated
operator conferencing services) by the provisioning of audio conferencing
accounts using telephony lines or data lines to access conferencing bridges for
Seller's customers (whether via VOIP networks or the public switched telephone
network); and permitting the resale of audio conferencing services by its
agents, resellers and distributors; but excluding all services and assets
related specifically to Seller's Web Collaboration Business and Seller's
EventsPlus Business.
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"AUDIO CUSTOMER SERVICE CONTRACT" shall mean any customer account or
contract, lease, commitment, sales order, purchase order, license, mortgage,
note, bond or other agreement, whether written or oral (including any customer
account or contract resulting from any Reseller Agreement) relating specifically
to Seller's Audio Conferencing Business, pursuant to which Seller provides,
whether directly or through the relevant Reseller Agreement, audio conference
calling services, including specifically on-demand, reservationless and
operator-assisted conferencing to any Person classified by Seller as "Type 0,"
"Xxxx 0," "Type 3" and "Type 4" in the materials provided to Purchaser, as
identified and disclosed on SCHEDULE 3.7(a).
"XXXX OF SALE" shall have the meaning set forth in SECTION 6.2(j).
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day
on which commercial banks in Atlanta, Georgia are authorized or required by law
to close.
"CHOSEN FIRM" shall have the meaning set forth in SECTION 2.3(b).
"CLOSING" shall have the meaning set forth in SECTION 6.1.
"CLOSING DATE" shall have the meaning set forth in SECTION 6.1.
"CLOSING PAYMENT" shall have the meaning set forth in SECTION 2.1.
"COLLECTED RECEIVABLES" shall have the meaning set forth in SECTION
2.4(a).
"COLLECTIBLE ACCOUNTS RECEIVABLE" shall mean, for any applicable
period, the outstanding amounts invoiced in respect of Audio Customer Service
Contracts constituting Acquired Assets with an aging of less than 90 days, plus,
all outstanding amounts due for minutes, usage of services, participant fees or
other ancillary charges from such Audio Customer Service Contracts prior to the
Closing Date.
"COLLECTIBLE ACCRUED REVENUE" shall mean: (a) all net revenues derived
from per minute, subscription, or usage charges related to unattended or
automated audio conferencing services (characterized by Seller as "On Demand"
and "MeetMe" services which totaled $3.18 million in revenue for the trailing
twelve months ended March 31, 2008); LESS (b) a normal charge for related bad
debt (in each case determined in accordance with GAAP and Purchaser's normal
collection practices and percentages taken as a whole without isolation of the
Acquired Assets), in each case in respect of Audio Customer Service Contracts,
for the twelve month period beginning on the first day of the first full month
following the Closing; PROVIDED, that if the Closing occurs within the first
five (5) days of any given month, then the relevant determination period shall
be the twelve month period beginning on the first day of the month in which the
Closing occurs.
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in SECTION
9.1.
"CONSENT" means any approval, consent, ratification, waiver or other
authorization of any Person.
"CUSTOMER" shall have the meaning set forth in SECTION 9.3(b).
"DISCLOSURE SCHEDULE" shall have the meaning set forth in the Preamble
to ARTICLE III.
"DISPUTE NOTICE" shall have the meaning set forth in SECTION 2.3(b).
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"ENCUMBRANCE" shall mean any encumbrance or restriction of any kind,
including any pledge, security interest, lien, charge, mortgage, hypothecation,
deed of trust, easement, lease, finance lease, sublease, claim, right of way,
covenant, option, condition, or right of first refusal, however imposed.
"ESTIMATED ACCOUNTS RECEIVABLE" shall have the meaning set forth in
SECTION 2.3(a).
"ESTIMATED ACCOUNTS RECEIVABLE PAYMENT" shall have the meaning set
forth in SECTION 2.3(c).
"ESTIMATED ACCOUNTS RECEIVABLE STATEMENT" shall have the meaning set
forth in SECTION 2.3(a).
"EXCLUDED ASSETS" shall have the meaning set forth in SECTION 1.2.
"EXPIRATION DATE" shall have the meaning set forth in SECTION 7.1(b).
"EVENTPLUS BUSINESS" shall mean the business of the Seller as a
provider of products and services currently classified by the Seller as its
events business, that may utilize Seller's proprietary software for on-line
registration and management of virtual events called "EventPlus," and is more
closely associated with a webinar or high touch and regularly recurring
dedicated operator service.
"GAAP" shall mean United States generally accepted accounting
principles, consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean the government of the United
States, any state or political subdivision thereof, or any foreign government.
"IP LIABILITIES" shall mean those Liabilities set forth on SCHEDULE
1.4.
"KEY PERSONNEL" shall mean Xxxx Xxxxxxx.
"LAW" shall mean any federal, state, local or other law, statute,
ordinance, regulation, rule, policy, guideline, ordinance, bylaw (zoning or
otherwise), order, judgment, consent decree, permit, settlement agreement,
judicial or administrative decision, injunction or requirement of any kind
applicable to or binding on Purchaser, Seller, the Audio Conferencing Business,
or any of the Acquired Assets.
"LIABILITY" means any liability or obligation of any kind, character or
description, whether known or unknown, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, secured or unsecured, joint or several,
due or to become due, vested or unvested, executory, determined, determinable or
otherwise and whether or not the same is required to be accrued or reflected on
financial statements prepared in accordance with GAAP or is disclosed or
required to be disclosed on any Schedule to this Agreement.
"LOSSES" shall mean all liabilities, equitable remedies, losses, costs
(including costs of settlement), fines, damages of any nature, judgments,
penalties, diminution of value, or expenses (including reasonable attorneys'
fees and costs of litigation).
"OPEN WEB ACCOUNT" shall have the meaning set forth in SECTION 9.4.
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"PERMITS" shall have the meaning set forth in SECTION 1.1(g).
"PERMITTED ENCUMBRANCES" shall mean liens for Taxes, assessments and
governmental charges with respect to the Acquired Assets not yet due and
payable.
"PERSON" shall mean any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, association, trust, Governmental Authority or
other entity or organization.
"PROCEEDING" shall have the meaning set forth in SECTION 3.9.
"PURCHASE PRICE" shall have the meaning set forth in SECTION 2.1.
"PURCHASER" shall have the meaning set forth in the Preamble.
"PURCHASER INDEMNIFIED PARTIES" shall have the meaning set forth in
SECTION 8.2.
"PURCHASER'S KNOWLEDGE" shall mean the actual knowledge of X. Xxxxx
Xxxxxx Xxxxxxx and Xxx Xxxxxxxx, and such knowledge as such individuals could
reasonably expect to discover or otherwise become aware of in the ordinary
course of their duties for the Purchaser.
"RELATED PARTY" means Seller and any employee, officer, member of
Seller's Board of Directors or stockholder of Seller (or immediate family member
of any of the foregoing) or Affiliate of Seller.
"RESELLER AGREEMENT" means an agreement, whether written or oral
through which Seller has authorized a third party to resell its audio
conferencing services, whether as an authorized agent, value-added reseller, or
wholesale distributor listed on SCHEDULE 10.1; PROVIDED, that to the extent a
Reseller Agreement authorizes a third party to sell both audio and web
conferencing services, then only the rights associated with the audio
conferencing services shall be deemed to constitute a "Reseller Agreement" for
all purposes hereunder, including for purposes of SECTIONS 1.1 and 1.3.
"RESTRICTED AUDIO CONFERENCING BUSINESS" shall have the meaning set
forth in SECTION 9.3(d).
"RETAINED LIABILITIES" shall have the meaning set forth in SECTION 1.4.
"REVENUE STATEMENTS" shall have the meaning set forth in SECTION
3.5(a).
"SELLER" shall have the meaning set forth in the Preamble.
"SELLER'S BOARD OF DIRECTORS" shall have the meaning set forth in
SECTION 3.2.
"SELLER'S KNOWLEDGE" shall mean the actual knowledge of the officers of
Seller, and such knowledge as any of them could reasonably expect to discover or
otherwise become aware of in the ordinary course of such person's duties for the
Seller.
"TAX RETURN" shall mean any report, return or other information
required to be supplied to a Governmental Authority or any other Person in
connection with Taxes.
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"TAXES" shall mean all taxes and USF Payments, including, income, gross
receipts, net proceeds, ad valorem, turnover, real and personal property
(tangible and intangible), sales, use, franchise, excise, value added, stamp,
leasing, lease, user, transfer, fuel, excess profits, occupational and interest
equalization, windfall profits, payroll, severance and employees' income
withholding and Social Security taxes imposed by the United States or by any
state, municipality, subdivision or instrumentality of the United States or by
any other tax authority, including all applicable penalties and interest.
"THIRD PARTY BUYER" shall have the meaning set forth in SECTION 9.3(d).
"TRANSITION DATE" shall mean the date the delivery of services for the
customer accounts is transitioned to Purchaser's infrastructure and ready for
commercial use by Purchaser (as reasonably determined by Purchaser) with the
anticipated date to be July 31, 2008.
"TRANSITION DATE PAYMENT" shall have the meaning set forth in SECTION
2.6.
"TRANSITION SERVICES AGREEMENT" shall have the meaning set forth in
SECTION 6.2(g).
"USF PAYMENTS" shall mean any and all payments, fees, charges,
contributions or assessments required by rules, regulations or orders of the
Federal Communications Commission, including contributions to the federal
Universal Service Fund pursuant to 47 CFR xx.xx. 54.706 through 54.713,
contributions to the cost of establishing numbering administration pursuant to
47 CFR ss. 52.17, contributions to the shared costs of number portability
pursuant to 47 CFR ss. 52.32, contributions to the federal Telecommunications
Relay Service Fund pursuant to 47 CFR ss. 64.604, and regulatory fees assessed
pursuant to 47 CFR xx.xx. 1.1151 through 1.1167, in each case, as provided by
such regulations at any time and from time to time prior to the Closing; any and
all similar payments, fees, charges, contributions or assessments required by
any Governmental Authority pursuant to the Law of any state; and any and all
interest or penalties resulting from the nonpayment or late payment of any such
payment, fee, charge, contribution or assessment or any failure to file or delay
in filing any Tax Return associated therewith.
"WEB ACCOUNT" shall have the meaning set forth in SECTION 9.4.
"WEB ACCOUNT NOTICE" shall have the meaning set forth in SECTION 9.4.
"WEB COLLABORATION BUSINESS" shall mean all aspects of Seller's
business other than Seller's Audio Conferencing Business and EventPlus Business,
specifically but not limited to any on-line meetings, conferences, training and
customer support using Seller's web conferencing and collaboration software and
services. The Web Collaboration Business shall specifically include and make
reference to Seller's provision, sale, offering for sale, and use by customers
of voice-over-Internet-protocol conferencing to the extent necessary to support,
and as an integrated component and part of, Seller's web conferencing and web
collaboration software. The Web Collaboration Business will not include the
offering by Seller or its Affiliates of audio conferencing services utilizing a
third party's API (or other programming interface) that provides a connection to
the conferencing bridges (whether TDM or VoIP) of a third party conferencing
service provider's audio conferencing bridges (with that third party
conferencing service provider being someone other than, and competitive with,
Purchaser; e.g. Inter-call) through which participants in an iLinc web session
receive their audio conferencing services.
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ARTICLE XI
DISPUTE RESOLUTION
11.1 AGREEMENT TO ARBITRATE. The parties hereby agree that upon notice
by either party to the other (the "ARBITRATION NOTICE"), such dispute, claim,
question, or disagreement shall be finally settled by binding arbitration in
accordance with the provisions of the Commercial Arbitration Rules (the
"ARBITRATION RULES") of the American Arbitration Association ("AAA"). The
Arbitration Notice delivered pursuant to this SECTION 11.1 shall contain a
detailed statement of the claim(s), including a description of the factual
contentions which support said claim(s). The parties hereby agree that any
Dispute Notice delivered pursuant to SECTION 2.3(b) shall be deemed an
Arbitration Notice if the parties are unable to resolve any dispute set forth in
a Dispute Notice in the time frame required by SECTION 2.3(b). In such event,
the arbitrator chosen to settle the dispute set forth in the Dispute Notice
shall only resolve matters contained in the Dispute Notice or in Seller's
response thereto.
11.2 SELECTION OF ARBITRATOR. The parties shall, by joint agreement,
select a single arbitrator, but if they do not agree on the selection of an
arbitrator within twenty (20) days after the date that the Arbitration Notice
was received by the non-sending party, then selection shall be made in
accordance with the Arbitration Rules.
11.3 PLACE OF ARBITRATION. The arbitration shall be held in the
jurisdiction of the corporate office of the defendant in any arbitration
proceeding, or such other place as the parties shall mutually agree.
11.4 EXPEDITED PROCEDURES. The parties agree that any claims that are
submitted to arbitration pursuant to the provisions of this ARTICLE XI, and
which seek, in the aggregate, damages or payment of Seventy-Five Thousand
Dollars ($75,000) or less, shall be resolved through the application of the
AAA's Expedited Procedures for commercial cases.
11.5 INTERIM RELIEF. Either party may, without inconsistency with this
Agreement, seek from a court any injunctive relief that may be necessary to
protect the rights or property of that party pending the selection of the
arbitrator or pending the arbitrator's determination of the merits of the
controversy.
11.6 ENFORCEMENT OF ARBITRATOR'S DECISION; FEES. Judgment on the award
of the arbitrator may be entered in any court having jurisdiction over the party
against which enforcement of the award is being sought. The costs of the
arbitration, including but not limited to all reasonable attorneys' fees, shall
be borne by the substantially non-prevailing party in the arbitration, as shall
be determined by the arbitrator.
ARTICLE XII
MISCELLANEOUS
12.1 AMENDMENT; WAIVERS. This Agreement may not be amended, modified or
supplemented unless such amendment is in writing and duly executed by the
parties. No approval, consent or waiver will be enforceable unless signed by the
granting party. Failure to insist on strict performance or to exercise a right
when entitled does not prevent a party from doing so later for that breach or a
future one.
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12.2 NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given: (a) if
personally delivered, when so delivered; (b) if mailed, five (5) Business Days
after having been sent by first class, registered or certified U.S. mail, return
receipt requested, postage prepaid and addressed to the intended recipient as
set forth below; (c) if given by telecopier, once such notice or other
communication is transmitted to the telecopier number specified below; PROVIDED,
that: (i) the sending telecopier generates a transmission report showing
successful completion of such transaction; and (ii) such notice or other
communication is promptly thereafter mailed in accordance with the provisions of
clause (b) above, and PROVIDED, FURTHER, that if such telecopy is sent after
5:00 p.m. local time at the location of the receiving telecopier, or is sent on
a day other than a Business Day, such notice or communication shall be deemed
given as of 9:00 a.m. local time at such location on the next succeeding
Business Day; or (d) if sent through a nationally-recognized overnight delivery
service that guarantees next day delivery, the Business Day following its
delivery to such service in time for next day delivery.
If to Seller, to:
iLinc Communications, Inc.
Attention: Xx. Xxxxx X. Xxxxxx, Xx.
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Copy to:
Xxxxxxx Xxxxxx L.L.P.
Attention: Xxxxx Xxxx, Esq.
0000 XxXxxxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Purchaser, to:
American Teleconferencing Services, Ltd.
Attention: Xxx Xxxxxxxx
The Terminus Building
0000 Xxxxxxxxx Xxxx, XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Copy to:
American Teleconferencing Services, Ltd.
Attention: X. Xxxxx Xxxxxx Xxxxxxx, Esq.
SVP - Legal and General Counsel
The Terminus Building
0000 Xxxxxxxxx Xxxx, XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxxx Xxxxxxx Xxxxx & Scarborough LLP
Attention: Xxxxxxx X. Xxxxxxxxxxxxx, XX, Esq.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change the address to which notices, requests, demands, claims and
other communications hereunder are to be delivered by giving the other parties
notice in the manner herein set forth.
12.3 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12.4 HEADINGS. The headings preceding the text of Articles and Sections
of this Agreement are for reference only and shall not be deemed part of this
Agreement.
12.5 APPLICABLE LAW; WAIVER OF JURY TRIAL. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Georgia. THE PARTIES EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION OR
CAUSE OF ACTION BASED ON, OR ARISING OUT OF, UNDER OR IN CONJUNCTION IN ANY
MANNER WITH TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
12.6 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns; PROVIDED, HOWEVER, that no assignment
shall be made hereof without the prior written consent of the non-assigning
party, except that Purchaser may assign its rights hereunder to any of its
Affiliates without any other party's prior consent; PROVIDED, that the assignee
assumes all of Purchaser's obligations hereunder.
12.7 EXPENSES. All fees and expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement, including all
legal, accounting, financial advisory, consulting and all other fees and
expenses of third parties, shall be paid by the party incurring such expenses,
regardless of whether the Closing occurs.
12.8 NO THIRD PARTY BENEFICIARIES. This Agreement is solely for the
benefit of the parties and their respective Affiliates and no provision of this
Agreement shall be deemed to confer upon third parties any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.
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12.9 SPECIFIC PERFORMANCE. The parties hereto recognize and affirm that
in the event of breach by the any party of any of the provisions of ARTICLE IX
of this Agreement, money damages would be inadequate and the non-breaching would
have no adequate remedy at law. Accordingly, each party agrees that the
non-breaching party shall have the right, in addition to any other rights and
remedies existing in its favor, to enforce its rights and its obligations under
ARTICLE IX of this Agreement not only by an action or actions for damages, but
also by an action or actions for specific performance, injunction and other
equitable relief, or any of them, in order to enforce or prevent any violations
(whether anticipatory, continuing or future) of the provisions of this Agreement
without the necessity of proving actual damages or posting bond.
12.10 ENTIRE UNDERSTANDING. This Agreement sets forth the entire
agreement and understanding of the parties in respect to the transactions
contemplated hereby and supersedes all prior agreements, arrangements and
understandings relating to the subject matter hereof and is not intended to
confer upon any other person any rights or remedies hereunder. There have been
no representations or statements, oral or written, that have been relied on by
any party hereto, except those expressly set forth in this Agreement.
12.11 CONSTRUCTION. The parties acknowledge and agree that each of them
has participated in the drafting of this Agreement and that this Agreement has
been reviewed by the respective legal counsel for such parties and that the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be applied to the interpretation
of this Agreement. No inference in favor of, or against, any party shall be
drawn from the fact that one party has drafted any portion of this Agreement.
12.12 SCHEDULES. The parties hereto are exchanging copies of all
Schedules referred to in this Agreement, which Schedules are hereby made a part
hereof and incorporated herein by reference. All such Schedules read as of the
Closing Date or, as to any of the Schedules bearing a particular date, as of any
other date specified therein.
12.13 SEVERABILITY. Whenever possible each provision and term of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision or term of this Agreement shall be held to
be prohibited by or invalid under such applicable law, or determined to be void
or unenforceable for any reason, then such provision or term shall be
ineffective only to the extent of such prohibition, invalidity or
unenforceability, without invalidating or affecting in any manner whatsoever the
remainder of such provision or term or the remaining provisions or terms of this
Agreement, and the prohibited, invalid or unenforceable provision shall be
modified to the minimum extent necessary to make it permissible, valid and
enforceable, unless the result of any such invalidity or unenforceability shall
be to cause a material failure of consideration to the party seeking to sustain
the validity or enforceability of the subject provision.
12.14 ELECTRONIC SIGNATURES. The parties agree that signatures
transmitted and received via electronic transmission shall be treated for all
purposes of this Agreement as original signatures and shall be deemed valid,
binding and enforceable by and against all parties
12.15 PRINCIPLES OF CONSTRUCTION. In this Agreement and all other
attached exhibits, annexes and schedules to this Agreement, unless otherwise
expressly indicated or required by the context:
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(a) reference to and the definition of any document shall be
deemed a reference to such document as it may be amended, supplemented, revised,
or modified, in writing, from time to time but disregarding any amendment,
supplement, replacement or novation made in breach of this Agreement;
(b) references in this Agreement to any document or agreement
shall be deemed to include references to such document or agreement as amended,
varied, supplemented or replaced from time to time in accordance with such
document's or agreement's terms;
(c) defined terms in the singular shall include the plural and
vice versa, and the masculine, feminine or neuter gender shall include all
genders;
(d) the words "including" or "includes" shall be deemed to mean
"including without limitation" and "including but not limited to" (or "includes
without limitation" and "includes but is not limited to") regardless of whether
the words "without limitation" or "but not limited to" actually follow the term;
and
(e) the words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement or exhibits, annexes and schedules
shall refer to this Agreement and its exhibits, annexes and schedules as a whole
and not to any particular provision hereof or thereof, as the case may be.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the parties have executed and caused this Asset
Purchase Agreement to be executed and delivered on the date first above written.
PURCHASER:
----------
AMERICAN TELECONFERENCING SERVICES, LTD.
By:
----------------------------------------
Name:
--------------------------------
Title:
--------------------------------
SELLER:
-------
ILINC COMMUNICATIONS, INC.
By:
----------------------------------------
Name:
--------------------------------
Title:
--------------------------------
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LIST OF EXHIBITS
Exhibit A Form of Transition Services Agreement
Exhibit B Form of Xxxx of Sale
Exhibit C Form of Assignment and Assumption Agreement
LIST OF SCHEDULES
Schedule 1.1(b) Accounts Receivable
Schedule 1.1(c) Telecommunications Numbers
Schedule 1.2 Excluded Assets
Schedule 1.4 IP Liabilities
Schedule 2.6 Allocation of Purchase Price
Schedule 3.1 Foreign Qualification
Schedule 3.3 No Adverse Change
Schedule 3.5(a) Revenue Statements
Schedule 3.5(b) Accounts Receivable
Schedule 3.5(c) Billing Practices
Schedule 3.7(a) Contracts
Schedule 3.7(b) Employment Agreements
Schedule 3.8 Permits
Schedule 3.9 Litigation
Schedule 3.10(a) Customers
Schedule 3.13 Related Party Transactions
Schedule 10.1 Third Party Resellers
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