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EXHIBIT 2
ASSET PURCHASE AGREEMENT
DATED AS OF
NOVEMBER 9, 0000
XXXXXXX
XXXXXXXX GROUP, INC.
AND
ACTIVE VOICE CORPORATION
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.......................................................................1
SECTION 1.1 Definitions...........................................................1
ARTICLE II PURCHASE AND SALE................................................................4
SECTION 2.1 Purchase and Sale.....................................................4
SECTION 2.2 Excluded Assets.......................................................6
SECTION 2.3 Assumption of Liabilities.............................................7
SECTION 2.4 Excluded Liabilities..................................................8
SECTION 2.5 Assignment of Contracts and Rights....................................8
SECTION 2.6 Purchase Price; Allocation of Purchase Price..........................8
SECTION 2.7 Closing...............................................................9
SECTION 2.8 Further Assurances....................................................9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER.......................................10
SECTION 3.1 Corporate Existence and Power........................................10
SECTION 3.2 Corporate Authorization..............................................10
SECTION 3.3 Governmental Authorization...........................................10
SECTION 3.4 Finders' Fees........................................................10
SECTION 3.5 Opinion of Financial Advisor.........................................11
SECTION 3.6 Non-Contravention....................................................11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER.........................................11
SECTION 4.1 Organization and Existence...........................................11
SECTION 4.2 Corporate Authorization..............................................11
SECTION 4.3 Governmental Authorization...........................................11
SECTION 4.4 Non-Contravention....................................................12
SECTION 4.5 Finders' Fees........................................................12
SECTION 4.6 Litigation...........................................................12
SECTION 4.7 Solvency.............................................................12
ARTICLE V COVENANTS OF SELLER..............................................................12
SECTION 5.1 Confidentiality......................................................12
SECTION 5.2 Trademarks; Tradenames...............................................13
SECTION 5.3 Certain Agreements...................................................13
ARTICLE VI COVENANTS OF BUYER..............................................................13
SECTION 6.1 Confidentiality......................................................13
SECTION 6.2 Covenant Not to Compete..............................................14
SECTION 6.3 Certain Agreements...................................................14
SECTION 6.4 Access...............................................................15
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SECTION 6.5 Payments.............................................................15
ARTICLE VII COVENANTS OF BOTH PARTIES......................................................15
SECTION 7.1 Reasonable Best Efforts..............................................15
SECTION 7.2 Consents; Cooperation. (a)...........................................15
SECTION 7.3 Legal Requirements...................................................16
SECTION 7.4 Public Announcements.................................................16
ARTICLE VIII TAX MATTERS...................................................................16
SECTION 8.1 Tax Cooperation; Allocation of Taxes; Tax Reimbursement..............16
ARTICLE IX EMPLOYEES AND EMPLOYEE BENEFITS.................................................17
SECTION 9.1 Employees and Offers of Employment...................................17
SECTION 9.2 Seller's Employee Group Health Plans.................................18
SECTION 9.3 Buyer Benefit Plans..................................................19
SECTION 9.4 No Third Party Beneficiaries.........................................19
ARTICLE X CONDITIONS TO CLOSING............................................................19
SECTION 10.1 Conditions to the Obligations of Each Party..........................19
SECTION 10.2 Conditions to Obligations of Buyer...................................20
SECTION 10.3 Conditions to Obligations of Seller..................................20
ARTICLE XI INDEMNIFICATION.................................................................21
SECTION 11.1 Indemnification......................................................21
SECTION 11.2 Procedures...........................................................21
ARTICLE XII TERMINATION....................................................................22
SECTION 12.1 Grounds for Termination..............................................22
SECTION 12.2 Effect of Termination................................................23
ARTICLE XIII MISCELLANEOUS.................................................................23
SECTION 13.1 Notices..............................................................23
SECTION 13.2 Amendments; No Waivers...............................................24
SECTION 13.3 Expenses.............................................................24
SECTION 13.4 Successors and Assigns...............................................25
SECTION 13.5 Governing Law........................................................25
SECTION 13.6 Counterparts; Effectiveness..........................................25
SECTION 13.7 Entire Agreement.....................................................25
SECTION 13.8 Bulk Sales Laws......................................................25
SECTION 13.9 Captions.............................................................25
SECTION 13.10 Survival.............................................................25
SECTION 13.11 Severability.........................................................25
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EXHIBITS
Exhibit A -- Form of License Agreement
Exhibit B -- Form of Note Agreement
Exhibit C Form of Security Agreement
Exhibit D -- Form of Undertaking and Assumption Agreement
Exhibit E -- Form of Xxxx of Sale and Assignment
Exhibit F -- Form of Offer Letter
Exhibit G -- Form of Employee Benefit Plan
Exhibit H Form of Offer of Retention Bonus and General Release
Exhibit I -- Form of Employment Agreement
SCHEDULES
Schedule 1.1 Unity Technology Description
Schedule 2.1(a) Real Property
Schedule 2.1(b) Personal Property
Schedule 2.1(c) Purchased Inventories
Schedule 2.1(d) Assumed Contracts
Schedule 2.1(e) Buyer Payments
Schedule 2.1(f) Permits and Licenses
Schedule 2.1(g) Capital Stock
Schedule 2.2(a) Proprietary Rights
Schedule 2.2(b) Unity Contracts
Schedule 2.2(c) Unity Licenses and Permits
Schedule 2.2(d) Retained Contracts
Schedule 2.2(e) Unity Inventories
Schedule 2.2(f) Unity Personal Property
Schedule 9.1(a) Interviewed Employees
Schedule 9.1(b) Cisco Employees
Schedule 9.1(c) Key Employees
Schedule 9.2 Employee Plans and Benefit Arrangements
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ASSET PURCHASE AGREEMENT
AGREEMENT dated as of November 9, 2000 between Atlantis Group, Inc., a
Washington corporation ("Buyer"), and Active Voice Corporation, a Washington
corporation ("Seller").
WITNESSETH:
WHEREAS, Seller designs, manufactures, sells, markets and supports a
family of call processing systems; and
WHEREAS, Buyer desires to purchase substantially all of the assets of
Seller, other than Seller's Excluded Assets, and is willing to assume all of
Seller's liabilities, other than the Excluded Liabilities, and Seller desires to
sell such assets to Buyer, upon the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. (a) The following terms, as used herein, have
the following meanings:
"Affiliate" means, with respect to any Person, any Person deemed an
affiliate of such Person within the meaning of Rule 144 of the rules and
regulations of the Commission promulgated under the 1933 Act.
"Ancillary Agreements" means the License Agreement, the Note Agreement
and the Conveyance Documents.
"Benefit Arrangement" means an employment, severance or similar
contract, arrangement or policy, and each plan or arrangement, providing for
severance, insurance coverage (including any self-insured arrangements),
workers' compensation, disability benefits, supplemental unemployment benefits,
vacation benefits, pension or retirement benefits or deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights or other forms
of incentive compensation or post-retirement insurance, compensation or benefits
that (i) is not an Employee Plan and (ii) is maintained or contributed to by
Seller or any of its ERISA Affiliates.
"Business" means all of the business and assets of Seller other than the
Excluded Assets.
"Cisco" means Cisco Systems, Inc., a California corporation.
"Closing" means the closing of the transactions contemplated hereby
which shall take place as soon as practicable after the satisfaction or waiver
of each of the conditions set forth in
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Article X hereof and immediately after the Effective Time (as defined in the
Merger Agreement) of the Merger.
"Closing Date" means the date of the Closing.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Employee Plan" means each "employee benefit plan," as such term is
defined in Section 3(3) of ERISA, that is maintained or contributed to by Seller
or any of its ERISA Affiliates, as the case may be.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" of Seller means any other Person that, together with
Seller, would be treated as a single employer under Section 414 of the Code or
otherwise deemed to be under common control with such Person pursuant to Section
414 of the Code.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"License Agreement" means that certain license agreement to be dated as
of the Closing Date between Buyer and Seller in the form attached as Exhibit A
hereto.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"Material Adverse Effect" with respect to any Person means a material
adverse effect on the business, assets, condition (financial or otherwise) or
results of operations of such Person.
"Merger" means the merger of Merger Sub with and into Seller with Seller
surviving the merger pursuant to the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger and
Reorganization among Merger Sub, Cisco and Seller of even date herewith.
"Merger Sub" means Aqua Acquisition Corporation, a Delaware corporation
and a wholly owned subsidiary of Cisco.
"Multiemployer Plan" means each Employee Plan that is a multiemployer
plan, as defined in Section 3(37) of ERISA.
"Note" means the Senior Secured Note of Buyer in the principal amount of
$29,533,280 (as adjusted as set forth therein) in the form attached as an
exhibit to the Note Agreement.
"Note Agreement" means the Noteholder Rights and Security Agreement to
be dated as of the Closing Date between Buyer and Seller, including the Security
Agreements in the form attached hereto as Exhibit B.
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"Person" means an individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Proprietary Rights" means all (A) patents, patent applications, patent
disclosures and all related continuation, continuation-in-part, divisional,
reissue, re-examination, utility, model, certificate of invention and design
patents, patent applications, registrations and applications for registrations,
(B) trademarks, service marks, domain names, database rights, trade dress,
logos, tradenames, service names and corporate names and registrations and
applications for registration thereof, (C) copyrights and registrations and
applications for registration thereof, (D) mask works and registrations and
applications for registration thereof, (E) computer software, data and
documentation, (F) trade secrets and confidential business information, whether
patentable or nonpatentable and whether or not reduced to practice, know-how,
manufacturing and product processes and techniques, research and development
information, copyrightable works, financial, marketing and business data,
pricing and cost information, business and marketing plans and customer and
supplier lists and information, (G) other proprietary rights relating to any of
the foregoing (including without limitation associated goodwill and remedies
against past and future infringements thereof and rights of protection of an
interest therein under the laws of all jurisdictions) and (H) copies and
tangible embodiments thereof.
"Security Agreement" means the Patent Security Agreement, Trademark
Security Agreement and Copyright Security Agreement to be dated as of the
Closing Date and executed by Buyer, each in the form attached as Exhibit C
hereto.
"Special Meeting" means the special meeting of the shareholders of
Seller to approve the transactions contemplated hereby.
"Tax" means any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, franchise, capital, paid-up
capital, profits, greenmail, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any governmental authority
(domestic or foreign) responsible for the imposition of any such tax.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendments thereof.
"Unity Assets" means Seller's unified messaging and related technology
described in Schedule 1.1 and all related personal property, whether tangible or
intangible, including, without limitation, any and all related (i) inventory;
(ii) furniture, computers and equipment; (iii) documentation; (iv) Proprietary
Rights, including, without limitation, the Unity Trademark, (v) goodwill and
(vi) any other items, materials and information necessary for Seller to
continue, without interruption or delay, the research, development and
commercialization of and other activities in connection with the Seller's
unified messaging and related technology.
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"Unity Trademark" means the trademark "Unity" and any Unity related
trademark and all (i) applications and registrations therefor, (ii) common law
rights related thereto and (iii) goodwill associated therewith.
"1933 Act" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
(b)Each of the following terms is defined in the Section set
forth opposite such term:
TERM SECTION
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Antitrust Law 7.2
Assumed Contracts 2.1
Assumed Liabilities 2.3
Assumed Tax Liabilities 2.3
Closing 2.7
Conveyance Documents 2.7
Excluded Assets 2.2
Excluded Liabilities 2.4
Purchased Assets 2.1
Purchase Price 2.6
Retained Contracts 2.2
Transferred Employees 9.1
Unity Contracts 2.2
ARTICLE II
PURCHASE AND SALE
SECTION 2.1 PURCHASE AND SALE. Upon the terms and subject to the
conditions of this Agreement, Buyer agrees to purchase from Seller and Seller
agrees to sell, transfer, assign and deliver, or cause to be sold, transferred,
assigned and delivered, to Buyer at Closing all of Seller's right, title and
interest in and to all of the assets, properties and business (other than the
Excluded Assets) of every kind and description, wherever located, real, personal
or mixed, tangible or intangible, owned, held or used in the conduct of the
Business by Seller as the same shall exist on the Closing Date (the "Purchased
Assets"), including, without limitation, all right, title and interest of Seller
in, to and under such of the foregoing as are more specifically described below:
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(i) all real property and leases of, and other interests
in, real property, in each case together with all buildings,
fixtures, and improvements erected thereon, listed on Schedule
2.1(a);
(ii) all personal property and interests therein,
including machinery, equipment, furniture, office equipment,
communications equipment, vehicles and other tangible property
relating to the Business listed on Schedule 2.1(b);
(iii) all raw materials, work-in-process, finished goods,
supplies and other inventories relating to the Business listed on
Schedule 2.1(c);
(iv) all rights under all contracts, agreements, leases,
licenses, commitments, sales and purchase orders and other
instruments listed on Schedule 2.1(d) (collectively, the "Assumed
Contracts");
(v) all accounts, notes and other receivables relating to
the Business;
(vi) all prepaid expenses and deposits relating to the
Business including without limitation ad valorem taxes, leases
and rentals;
(vii) all of Seller's cash and cash equivalents on hand
and in banks in excess of the amount set forth in Section
2.2(ii), including xxxxx cash located at the operating facilities
of the Business, which shall be used by Buyer to make the
payments on or after the Closing Date set forth on Schedule
2.1(e);
(viii) all of Seller's rights, claims, credits, causes of
action or rights of set-off against third parties relating to the
Purchased Assets;
(ix) all transferable licenses, permits or other
governmental authorizations affecting, or relating in any way to,
the Business, which licenses, permits or other authorizations are
listed on Schedule 2.1(f);
(x) all books, records, files and papers of Seller,
whether in hard copy or computer format, relating to the
Business, including, without limitation, engineering information,
sales and promotional literature, manuals and data, sales and
purchase correspondence, lists of present and former suppliers,
lists of present and former customers, personnel and employment
records (to the extent permitted by applicable law) relating to
the Transferred Employees, and any information relating to Tax
imposed on the Purchased Assets;
(xi) all of Seller's outstanding capital stock in the
entities identified on Schedule 2.1(g);
(xii) all of the rights to use the intellectual property
of Seller described in the License Agreement, subject to the
terms and conditions thereof; and
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(xiii) all goodwill associated with the Business or the
Purchased Assets, together with the right to represent to third
parties that Buyer is the successor to the Business.
SECTION 2.2 EXCLUDED ASSETS. Buyer expressly understands and agrees that
the following assets and properties of Seller (the "Excluded Assets") shall be
excluded from the Purchased Assets:
(i) the Unity Assets;
(ii) $5 million of Seller's cash and cash equivalents on
hand and in banks;
(iii) Seller's right to enforce any non-competition or
nondisclosure provision relating to the Unity Assets or Seller's
Proprietary Rights that may exist in any agreements between
Seller and any of its employees or third parties;
(iv) all of Seller's Proprietary Rights, including those
listed on Schedule 2.2(a);
(v) all rights under all contracts, agreements, leases,
licenses, commitments, sales and purchase orders and other
instruments relating to the Unity Assets, including those listed
on Schedule 2.2(b) (the "Unity Contracts");
(vi) all rights under Seller's current and former
directors' and officers' liability insurance policies;
(vii) all transferable licenses, permits or other
governmental authorizations affecting, or relating in any way to,
the Excluded Assets, which licenses, permits or other
authorizations are listed on Schedule 2.2(c);
(viii) all rights under the contracts, agreements, leases,
licenses, and instruments listed on Schedule 2.2(d) (the
"Retained Contracts");
(ix) all rights, claims, credits, causes of action or
rights of set-off against third parties relating to the Excluded
Assets;
(x) all work-in-process, finished goods, supplies and
other inventories listed on Schedule 2.2(e), provided, however,
in the event Buyer and Seller agree prior to the Closing Date
that certain inventories listed on Schedule 2.2(e) shall be
transferred, assigned and delivered to Buyer at Closing, such
inventories shall be deleted from Schedule 2.2(e) and added to
Schedule 2.1(c) prior to the Closing Date and included as
Purchased Assets with the consent of Seller;
(xi) all personal property and interests therein,
including machinery, equipment, furniture, office equipment,
communications equipment, vehicles and other tangible property
relating to the Business listed on Schedule 2.2(f), provided,
however, in the event Buyer and Seller agree prior to the Closing
Date
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that certain personal property listed on Schedule 2.2(f) shall be
transferred, assigned and delivered to Buyer at Closing, such
personal property shall be deleted from Schedule 2.2(f) and added
to Schedule 2.1(b) prior to the Closing Date and included as
Purchased Assets with the consent of Seller;
(xii) all books, records, files and papers of Seller,
whether in hard copy or computer format, relating to the Unity
Assets and Seller's Proprietary Rights, including, without
limitation, engineering information, sales and promotional
literature, manuals and data, sales and purchase correspondence,
lists of present and former suppliers and list of present and
former customers; and
(xiii) all goodwill associated with the Unity Assets and
Seller's Proprietary Rights.
SECTION 2.3 ASSUMPTION OF LIABILITIES. Upon the terms and subject to
the conditions of this Agreement, Buyer agrees, effective at the time of
Closing, to assume all debts, obligations, contracts and liabilities of Seller
arising prior to the Closing or relating to acts or omissions to act occurring
prior to the Closing and all debts, obligations, contracts and liabilities
relating to the Purchased Assets and the Business, of any kind, character or
description whether known or unknown, accrued, absolute, contingent or
otherwise, except for the Excluded Liabilities (the "Assumed Liabilities"),
including without limitation, the following:
(i) all liabilities arising out of or relating to the
Business;
(ii) all liabilities and obligations of Seller arising
under the Assumed Contracts;
(iii) all warranty claims or expenses of Seller in respect
of products sold or services rendered by the Business on or prior
to the Closing Date;
(iv) Seller's obligation to provide vacation time and
vacation pay to the employees of Seller to the extent such time
or pay shall have accrued on or prior to the Closing Date;
(v) Seller's obligation to provide any payment to
employees of Seller in connection with their assignment to Buyer
in connection with the transactions contemplated hereby;
(vi) all obligations and liabilities arising from any
action, suit, investigation, or proceeding relating to or arising
out of the Business or the Purchased Assets, including, without
limitation, any obligations or liabilities resulting from the
actions, suits, investigations or proceedings set forth on
Schedule 2.7 to the Merger Agreement;
(vii) all liabilities and obligations relating to any
products manufactured or sold by the Business on or prior to the
Closing Date, including without limitation warranty obligations
and product liability claims;
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(viii) all obligations relating to the Transferred
Employees, including, without limitation, any bonus;
(ix) all Taxes of Seller incurred on or prior to the
Closing Date, whether due before or after the Closing Date, and
all Taxes of Seller relating to the sale of the Purchased Assets
to Buyer, including, without limitation, all income taxes of
Seller ("Assumed Tax Liabilities"); and
(x) all fees and expenses of Seller including, without
limitation, fees and expenses of legal counsel, accountants and
financial advisors, incurred in connection with the transactions
contemplated hereby and the Merger Agreement other than those
constituting Excluded Liabilities pursuant to Section 2.4(ii).
SECTION 2.4 EXCLUDED LIABILITIES. Notwithstanding any provision in this
Agreement, Buyer is assuming only the Assumed Liabilities and is not assuming
(i) any liability or obligation arising after the Closing Date with respect to
acts or omissions to act of Seller arising after the Closing Date relating to an
Excluded Asset or (ii) up to an aggregate of $150,000 of the fees and expenses
of Seller, including, without limitation, fees and expenses of legal counsel,
accountants and financial advisors, incurred in connection with the transactions
contemplated hereby and the Merger Agreement. The foregoing liabilities and
obligations shall be retained by and remain obligations and liabilities of
Seller (such liabilities and obligations not being assumed being herein referred
to as the "Excluded Liabilities").
SECTION 2.5 ASSIGNMENT OF CONTRACTS AND RIGHTS. Anything in this
Agreement to the contrary notwithstanding, this Agreement shall not constitute
an agreement to assign any Purchased Asset or any claim or right or any benefit
arising thereunder or resulting therefrom if an attempted assignment thereof,
without consent of a third party thereto, would constitute a breach or other
contravention thereof or in any way adversely affect the rights of Buyer or
Seller thereunder. Prior and subsequent to Closing, Seller and Buyer will use
their reasonable best efforts (but without any payment of money by Seller or
Buyer) to obtain the consent of the other parties to any such Purchased Asset or
claim or right or any benefit arising thereunder for the assignment thereof to
Buyer as Buyer may request. If such consent is not obtained, or if an attempted
assignment thereof would be ineffective or would adversely affect the rights of
Seller thereunder so that Buyer would not in fact receive all such rights,
Seller and Buyer will cooperate in a mutually agreeable arrangement under which
Buyer would obtain the benefits and assume the obligations thereunder in
accordance with this Agreement, including subcontracting, sublicensing, or
subleasing to Buyer, or under which Seller would enforce for the benefit of
Buyer, with Buyer assuming Seller's obligations, any and all rights of Seller
against a third party thereto. Seller will promptly pay to Buyer when received
all monies received by Seller with respect to any Purchased Asset or any claim
or right or any benefit arising thereunder, except to the extent the same
represents an Excluded Asset.
SECTION 2.6 PURCHASE PRICE; ALLOCATION OF PURCHASE PRICE.
(a) The purchase price for the Purchased Assets (the "Purchase
Price") is (i) the Note and (ii) the assumption of the Assumed Liabilities.
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(b) The Purchase Price paid by Buyer for the Purchased Assets (as
adjusted upward or downward by any increase or decrease in the amount due from
Buyer to Seller under the Note) shall be allocated in such reasonable manner as
shall be proposed by Buyer and approved by Seller prior to the Closing Date.
(c) Seller and Buyer agree to utilize such allocation in the
preparation of financial statements and filing of all Tax Returns (including,
without limitation, filing Form 8594 with its Federal income tax return for the
taxable year that includes the date of the Closing) and in the course of any tax
audit, tax review or tax litigation relating thereto.
No later than ten (10) days prior to the filing of its respective
Forms 8594 relating to this transaction, each party shall deliver to the other
party a copy of its Form 8594.
SECTION 2.7 CLOSING. The closing (the "Closing") of the purchase and
sale of the Purchased Assets and the assumption of the Assumed Liabilities
hereunder shall take place at the offices of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP,
Palo Xxxx, Xxxxxxxxxx 00000, or at such other place as Buyer and Seller may
agree, immediately after the effective time of the Merger.
At the Closing:
(a) Buyer shall deliver to Seller the executed Note.
(b) Seller and Buyer shall enter into the Undertaking and
Assumption Agreement and the Xxxx of Sale and Assignment substantially in the
forms attached hereto as Exhibits D and E, respectively, and Seller shall
deliver to Buyer such quitclaim deeds, endorsements, consents, assignments and
other good and sufficient instruments of conveyance and assignment (collectively
with the Undertaking and Assumption Agreement and Xxxx of Sale and Assignment,
the "Conveyance Documents") as the parties and their respective counsel shall
deem reasonably necessary or appropriate to vest in Buyer all right, title and
interest in, to and under the Purchased Assets.
(c) Buyer shall enter into the Security Agreements and execute
the UCC financing statements as described in Section 10.3(b).
(d) Seller and Buyer shall execute and deliver to each other the
License Agreement.
(e) Each of Seller and Buyer shall deliver any other instruments
and documents required of it pursuant to Article X hereof.
(f) Seller and Buyer shall also execute and deliver all such
instruments, documents and certificates as may be reasonably requested by the
other party that are necessary, appropriate or desirable for the consummation at
the Closing of the transactions contemplated by this Agreement.
SECTION 2.8 FURTHER ASSURANCES. From time to time following the date
hereof, Seller shall execute and deliver, or cause to be executed and delivered,
to Buyer such other instruments of conveyance and transfer as Buyer may
reasonably request or as may be otherwise necessary to
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more effectively convey and transfer to, and vest in, Buyer and put Buyer in
possession of, any part of the Purchased Assets, and, in the case of licenses,
certificates, approvals, authorizations, agreements, contracts, leases,
easements and other commitments included in the Purchased Assets (i) which
cannot be transferred or assigned effectively without consent of third parties
which consent has not been obtained prior to the date hereof, to cooperate with
Buyer at its request in endeavoring to obtain such consent promptly, and if any
such consent is unobtained, to use its reasonable best efforts to secure to
Buyer the benefits thereof in some other manner, or (ii) which are otherwise not
transferable or assignable, to use its reasonable best efforts jointly with
Buyer to secure to Buyer the benefits thereof in some other manner (including
the exercise of the rights of Seller thereunder).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that:
SECTION 3.1 CORPORATE EXISTENCE AND POWER. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Washington. Seller has the corporate power to own its properties and to carry on
its business as now being conducted and as presently proposed to be conducted
and is duly qualified to do business and is in good standing in each
jurisdiction in which the failure to be so qualified and in good standing would
have a Material Adverse Effect on Seller.
SECTION 3.2 CORPORATE AUTHORIZATION. Seller has all requisite corporate
power and authority to enter into this Agreement and the Ancillary Agreements
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Ancillary Agreements and the
consummation by Seller of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of Seller,
subject only to any required approval by Seller's stockholders. This Agreement
and the Ancillary Agreements have been duly executed and delivered by Seller and
constitutes a valid and binding agreement of Seller, enforceable against Seller
in accordance with its terms, except as enforceability may be limited by
bankruptcy and other laws affecting the rights and remedies of creditors
generally and general principles of equity.
SECTION 3.3 GOVERNMENTAL AUTHORIZATION. No consent, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality is required by or with respect to Seller in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, except for (i) compliance with any applicable
requirements of the HSR Act, (ii) compliance with the requirements of the 1934
Act, and (iii) any action, which if not taken, or filing, which if not made,
would not, individually or in the aggregate, have a Material Adverse Effect on
Seller.
SECTION 3.4 FINDERS' FEES. Except for Xxxxxxx Xxxxx & Company, L.L.C.,
whose fees will be paid by Seller and Buyer in accordance with Sections 2.3(x)
and 2.4(ii) and Schedule
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2.1(e), there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of Seller who might
be entitled to any fee or commission from Seller or any of its Affiliates upon
consummation of the transactions contemplated by this Agreement.
SECTION 3.5 OPINION OF FINANCIAL ADVISOR. Seller has been advised in
writing by its financial advisor, Xxxxxxx Xxxxx & Company, L.L.C., that in such
advisor's opinion, as of the date hereof, the consideration to be received by
Seller in connection with the transactions contemplated hereby is fair to Seller
from a financial point of view.
SECTION 3.6 NON-CONTRAVENTION. The execution and delivery of this
Agreement and the Ancillary Agreements by Seller does not, and the consummation
of the transactions contemplated hereby and thereby will not, conflict with, or
result in any violation of, or default under (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any benefit under (i) any provision of
the Articles of Incorporation or Bylaws of Seller or any of its subsidiaries, as
amended, or (ii) any material mortgage, indenture, lease, contract or other
agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Seller
or any of its subsidiaries or any of their properties or assets.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that:
SECTION 4.1 ORGANIZATION AND EXISTENCE. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Washington. Buyer has the corporate power to own its properties and to carry on
its business as now being conducted and as presently proposed to be conducted
and is duly qualified to do business and is in good standing in each
jurisdiction in which the failure to be so qualified and in good standing would
have a Material Adverse Effect on Buyer.
SECTION 4.2 CORPORATE AUTHORIZATION. Buyer has all requisite corporate
power to enter into this Agreement and the Ancillary Agreements and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Ancillary Agreements and the consummation by
Buyer of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of Buyer. This
Agreement and each of the Ancillary Agreements has been duly executed and
delivered by Buyer and constitutes valid and binding agreements of Buyer,
enforceable against Buyer in accordance with their terms, except as
enforceability may be limited by bankruptcy and other laws affecting the rights
and remedies of creditors generally and general of principles of equity.
SECTION 4.3 GOVERNMENTAL AUTHORIZATION. No consent, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality is required by or with respect to Buyer in connection with the
execution and delivery of this Agreement and the Ancillary
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Agreements and the consummation of the transactions contemplated hereby, except
for (i) compliance with any applicable requirements of the HSR Act, and (ii) any
action, which if not taken, or filing which if not made, would not, individually
or in the aggregate, have a Material Adverse Effect on Buyer.
SECTION 4.4 NON-CONTRAVENTION. The execution and delivery of this
Agreement and the Ancillary Agreements by Buyer does not, and the consummation
of the transactions contemplated hereby and thereby will not, conflict with, or
result in any violation of, or default under (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any benefit under (i) any provision of
the Articles of Incorporation or Bylaws of Buyer or any of its subsidiaries, as
amended, or (ii) any material mortgage, indenture, lease, contract or other
agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Buyer
or any of its subsidiaries or any of their properties or assets.
SECTION 4.5 FINDERS' FEES. There is no investment banker, broker, finder
or other intermediary that has been retained by or is authorized to act on
behalf of Buyer who might be entitled to any fee or commission from Buyer or any
of its Affiliates upon consummation of the transactions contemplated by this
Agreement.
SECTION 4.6 LITIGATION. There is no action, suit, investigation or
proceeding pending against or, to the knowledge of Buyer, threatened against,
Buyer before any court or arbitrator or any governmental body, agency or
official which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated hereby.
SECTION 4.7 SOLVENCY. After giving effect to the transactions
contemplated hereby and by the Merger Agreement, Buyer will not (i) be insolvent
(either because its financial condition is such that the sum of its debts is
greater than the fair value of its assets or because the present fair saleable
value of its assets will be less than the amount required to pay its probable
liability on its debts as they become absolute and matured), (ii) have
unreasonably small capital with which to engage in its business or (iii) have
incurred or plan to incur debts beyond its ability to pay as they become
absolute and matured.
ARTICLE V
COVENANTS OF SELLER
Seller agrees that:
SECTION 5.1 CONFIDENTIALITY. Seller will hold, and will use its
reasonable best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning Buyer
or the Business, except to the extent that such information can be shown to have
been (i) previously known on a nonconfidential basis by Seller, (ii) in the
public domain through no fault of Seller or (iii) later lawfully acquired by
Seller from sources other than Buyer; provided that Seller may disclose such
information to its officers, directors, employees, accountants, counsel,
consultants,
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advisors and agents in connection with the transactions contemplated by this
Agreement so long as such persons are informed by Seller of the confidential
nature of such information and are directed by Seller to treat such information
confidentially. The obligation of Seller and its Affiliates to hold any such
information in confidence shall be satisfied if they exercise the same care with
respect to such information as they would take to preserve the confidentiality
of their own similar information. If this Agreement is terminated, Seller and
its Affiliates will, and will use their reasonable best efforts to cause their
respective officers, directors, employees, accountants, counsel, consultants,
advisors and agents to, destroy or deliver to Buyer, upon request, all documents
and other materials, and all copies thereof, obtained by Seller or its
Affiliates or on their behalf from Buyer in connection with this Agreement that
are subject to such confidence. The provisions of this Section shall survive the
Closing or the termination of this Agreement.
SECTION 5.2 TRADEMARKS; TRADENAMES. As soon as practicable after the
Closing Date, Seller shall eliminate the use of all of the trademarks,
tradenames, service marks and service names used in the Business, other than the
Unity Trademark, in any of their forms or spellings, on all advertising,
stationery, business cards, checks, purchase orders and acknowledgments,
customer agreements and other contracts and business documents.
SECTION 5.3 CERTAIN AGREEMENTS. Without limiting the rights of the
parties to pursue all other legal and equitable rights available to them for
violation of Section 5.1 or Section 5.2 by any of the other parties hereto, it
is agreed that other remedies cannot fully compensate a party for such a
violation and that the parties shall be entitled to injunctive relief to prevent
the violation or the continuing violation thereof. It is the intent and
understanding of each party hereto that if, in any action before any
governmental entity legally empowered to enforce Section 5.1 or Section 5.2, any
term, restriction, covenant or promise in Section 5.1 or Section 5.2 is found to
be unreasonable and for that reason unenforceable, then such term, restriction,
covenant or promise shall be deemed modified to the extent necessary to make it
enforceable by such court or agency.
ARTICLE VI
COVENANTS OF BUYER
SECTION 6.1 CONFIDENTIALITY.
(a) Prior to the Closing Date and after any termination of this
Agreement, Buyer and its Affiliates will hold, and will use their reasonable
best efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning the
Business furnished to Buyer or its Affiliates in connection with the
transactions contemplated by this Agreement.
(b) Buyer and its Affiliates will hold, and will use their reasonable
best efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents (collectively,
"Representatives") to hold, in confidence, unless compelled to disclose by
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judicial or administrative process or by other requirements of law, all
documents and information concerning Seller, the Unity Assets and Seller's
Proprietary Rights; in each case, except to the extent that such information can
be shown to have been (i) previously known on a nonconfidential basis by Buyer,
(ii) in the public domain through no fault of Buyer or (iii) later lawfully
acquired by Buyer from sources other than Seller; provided that Buyer may
disclose such information to its officers, directors, employees, accountants,
counsel, consultants, advisors and agents in connection with the transactions
contemplated by this Agreement so long as such persons are informed by Buyer of
the confidential nature of such information and are directed by Buyer to treat
such information confidentially. The obligation of Buyer and its Affiliates to
hold any such information in confidence shall be satisfied if they exercise the
same care with respect to such information as they would take to preserve the
confidentiality of their own similar information. Buyer and its Affiliates shall
not, and will use their reasonable best efforts to cause their respective
Representatives not to (A) use for any purpose the Unity Assets or any
information relating to the Unity Assets or (B) use other than as permitted
pursuant to the License Agreement the Sellers' Proprietary Rights or any
information relating to Seller's Proprietary Rights. If this Agreement is
terminated, Buyer and its Affiliates will, and will use their reasonable best
efforts to cause their respective officers, directors, employees, accountants,
counsel, consultants, advisors and agents to, destroy or deliver to Seller, upon
request, all documents and other materials, and all copies thereof, obtained by
Buyer or its Affiliates or on their behalf from Seller in connection with this
Agreement that are subject to such confidence. The provisions of this Section
shall survive the Closing or the termination of this Agreement.
SECTION 6.2 COVENANT NOT TO COMPETE. Upon the consummation of the
transactions contemplated hereby, Buyer agrees that, for a period commencing on
the Closing Date and ending on the first annual anniversary of the Closing Date,
Buyer and its Affiliates will not: directly or indirectly (whether as an
employer, employee, partner, stockholder, consultant, investor, director,
representative or otherwise) anywhere within the world own, manage, operate,
control or be employed by, participate in, consult with, or be otherwise
connected in any manner with the ownership, management or operation of any
business involving the unified messaging and related technology described in
Schedule 1.1 (the "Covered Activities"). Notwithstanding the foregoing, nothing
herein shall restrict Buyer or its Affiliates from (i) owning, solely for
investment purposes up to five percent of any class of securities of any person
engaged in the Covered Activities or (ii) engaging and operating the Business.
The provisions of this Section shall survive the Closing or the termination of
this Agreement.
SECTION 6.3 CERTAIN AGREEMENTS. Without limiting the rights of the
parties to pursue all other legal and equitable rights available to them for
violation of Section 6.1 or Section 6.2 by any of the other parties hereto, it
is agreed that other remedies cannot fully compensate a party for such a
violation and that the parties shall be entitled to injunctive relief to prevent
the violation or the continuing violation thereof. It is the intent and
understanding of each party hereto that if, in any action before any
governmental entity legally empowered to enforce Section 6.1 or Section 6.2, any
term, restriction, covenant or promise in Section 6.1 or Section 6.2 is found to
be unreasonable and for that reason unenforceable, then such term, restriction,
covenant or promise shall be deemed modified to the extent necessary to make it
enforceable by such court or agency.
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SECTION 6.4 ACCESS. On and after the Closing Date, Buyer will afford to
Seller and its agents reasonable access, upon at least twenty-four (24) hours'
prior notice, to its properties, books, records, employees and auditors to the
extent necessary to permit Seller to determine any matter relating to its rights
and obligations hereunder or to any period ending on or before the Closing Date;
provided that any such access by Seller shall not unreasonably interfere with
the conduct of the Business by Buyer.
SECTION 6.5 PAYMENTS. On and after the Closing Date, Buyer shall make
all payments required to be paid to the Transferred Employees under the terms of
the Offer Letter (as defined below), the Employment Agreement (as defined below)
and any other employment agreement or plan of Buyer, as applicable, and make all
the payments set forth on Schedule 2.1(e).
ARTICLE VII
COVENANTS OF BOTH PARTIES
The parties hereto agree that:
SECTION 7.1 REASONABLE BEST EFFORTS. Subject to the terms and conditions
of this Agreement, each party will use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary or desirable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement.
SECTION 7.2 CONSENTS; COOPERATION. (a) Each of Buyer and Seller shall
promptly apply for or otherwise seek, and use its reasonable best efforts to
obtain, all consents, approvals, authorizations or permits required to be
obtained by it for the consummation of the transactions contemplated herein,
including those required under the HSR Act. Each of Buyer and Seller shall use
its reasonable best efforts to obtain all necessary consents, waivers and
approvals under any of its material contracts in connection with the
transactions contemplated hereby. The parties hereto will consult and cooperate
with one another, and consider in good faith the views of one another, in
connection with any analyses, appearances, presentations, memoranda, briefs,
arguments, opinions and proposals made or submitted by or on behalf of any party
hereto in connection with proceedings under or relating to the HSR Act or any
other federal, state or foreign antitrust or fair trade law.
(b) Each of Buyer and Seller shall use its reasonable best
efforts to resolve such objections, if any, as may be asserted by any
governmental entity with respect to the transactions contemplated by this
Agreement and the Ancillary Agreements under the HSR Act, the Xxxxxxx Act, as
amended, the Xxxxxxx Act, as amended, the Federal Trade Commission Act, as
amended, and any other Federal, state or foreign statutes, rules, regulations,
orders or decrees that are designed to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade
(collectively, "Antitrust Laws"). In connection therewith, if any administrative
or judicial action or proceeding is instituted (or threatened to be instituted)
challenging any transaction contemplated by this Agreement as violative of any
Antitrust Law, each of Buyer and Seller shall cooperate and use all commercially
reasonable efforts vigorously to contest and resist any such action or
proceeding and to have vacated, lifted, reversed, or
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overturned any decree, judgment, injunction or other order, whether temporary,
preliminary or permanent (each an "Order"), that is in effect and that
prohibits, prevents, or restricts consummation of the transactions contemplated
hereby, unless by mutual agreement Buyer and Seller decide that litigation is
not in their respective best interests. Notwithstanding the provisions of the
immediately preceding sentence, it is expressly understood and agreed that
neither party shall have any obligation to litigate or contest any
administrative or judicial action or proceeding or any Order beyond the earlier
of (i) Final Date (as defined below) or (ii) the date of a ruling preliminarily
enjoining the transactions contemplated hereby issued by a court of competent
jurisdiction. Each of Buyer and Seller shall use all commercially reasonable
efforts to take such action as may be required to cause the expiration of the
notice periods under the HSR Act or other Antitrust Laws with respect to such
transactions as promptly as possible after the execution of this Agreement.
SECTION 7.3 LEGAL REQUIREMENTS. Each of Buyer and Seller will, and will
cause their respective subsidiaries to, take all reasonable actions necessary to
comply in all material respects promptly with all legal requirements which may
be imposed on them with respect to the consummation of the transactions
contemplated by this Agreement and will promptly cooperate with and furnish
information to any party hereto necessary in connection with any such
requirements imposed upon such other party in connection with the consummation
of the transactions contemplated by this Agreement and will take all reasonable
actions necessary to obtain (and will cooperate with the other parties hereto in
obtaining) any consent, approval, order or authorization of, or any
registration, declaration or filing with, any governmental entity or other
person, required to be obtained or made by them in connection with the taking of
any action contemplated by this Agreement.
SECTION 7.4 PUBLIC ANNOUNCEMENTS. The parties agree to consult with each
other before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby and, except as
may be required by applicable law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such
public statement prior to such consultation.
ARTICLE VIII
TAX MATTERS
SECTION 8.1 TAX COOPERATION; ALLOCATION OF TAXES; TAX REIMBURSEMENT. (a)
Buyer and Seller agree to furnish or cause to be furnished to each other, upon
request, as promptly as practicable, such information and assistance relating to
the Purchased Assets and the Business as is reasonably necessary for the filing
of all Tax Returns, and making of any election related to Taxes, the preparation
for any audit by any taxing authority, and the prosecution or defense of any
claim, suit or proceeding relating to any Tax Return.
(b) All Taxes assessed upon or with respect to the transfer of
the Purchased Assets to Buyer, and any recording or filing fees with respect
thereto shall be the responsibility of Buyer.
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(c) Buyer shall pay to Seller all amounts of Taxes which
constitute Assumed Tax Liabilities under this Agreement five (5) days prior to
the date on which any such Assumed Tax Liability is due upon written demand
therefor from Seller. Seller's written demand shall be forwarded to Buyer ten
(10) business days prior to the due date for any such Assumed Tax Liability and
shall include a copy of the Tax Return or other appropriate documentation
(including notices or demands from taxing authorities) evidencing such Assumed
Tax Liability. If Buyer believes that such Assumed Tax Liability is being
invalidly assessed and/or may be recovered through a claim for refund or other
proceeding, Buyer shall so notify Seller. Seller and Buyer shall promptly
consult with each other regarding the potential contest or recovery of said
Assumed Tax Liability. If Buyer and Seller are unable to agree on the
appropriate course of action, the dispute shall be promptly referred to an
independent accounting firm or law firm acceptable to the parties in order to
resolve the dispute, which resolution shall be binding on both parties. If, as a
result of the consultation between the parties or other resolution, it is
determined that the subject Assumed Tax Liability will be paid and not
contested, Buyer shall pay Seller the amount of such Assumed Tax Liability
(together with any applicable interest and penalties). If it is determined that
the subject Assumed Tax Liability will be contested, Buyer shall pay Seller the
amount of any Tax (together with any applicable interest and penalties)
eventually determined to be due promptly upon such determination. Subject to the
foregoing, Seller shall control, and Seller and Buyer shall cooperate with each
other in the conduct of, any audit or other proceeding related to Taxes
involving the Business, and each shall execute and deliver such powers of
attorney and other documents as are necessary to carry out the intent of this
Article VIII.
ARTICLE IX
EMPLOYEES AND EMPLOYEE BENEFITS
SECTION 9.1 EMPLOYEES AND OFFERS OF EMPLOYMENT.
(a) On or prior to the Closing Date, Buyer shall confirm the
assignment to Buyer of existing employment rights and obligations, via a notice
of confirmation of assignment in the form attached hereto as Exhibit F ("Offer
Letter"), of each of the employees of Seller listed on Schedule 9.1(a) who are
"active employees" of Seller on the Closing Date. For purposes of this Article
IX, the term "active employee" shall mean any Person who, on the Closing Date,
is actively employed by Seller or who is on short-term disability leave,
authorized leave of absence, military service or lay-off with recall rights as
of the Closing Date (such inactive employees shall be offered employment by
Buyer as of the date they return to active employment), but shall exclude any
other inactive or former employee including any Person who has been on long-term
disability leave or unauthorized leave of absence or who has terminated his or
her employment, retired or died on or before the Closing Date. Any such offers
shall be at such salary or wage levels as are applicable to such employees on
the Closing Date. The employees who are assigned to Buyer and the Key Employees
(as defined below) are hereinafter collectively referred to as the "Transferred
Employees." Seller will not take any action that would impede, hinder, interfere
or otherwise compete with Buyer's effort to hire any Transferred Employees
except as described in this Section 9.1 below. Buyer hereby agrees to employ the
Transferred Employees in accordance with the terms of the Offer Letter for not
less than sixty (60) days following the Closing Date; provided, however, Buyer
may terminate any Transferred Employee
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for "cause," excluding any position elimination, and provided further that (i)
Buyer complies in all respects with the provisions of the federal Worker
Adjustment, Retraining and Notification Act, 29 U.S.C. Section 2101, et seq.
(the "WARN Act"); and (ii) Buyer adopts, and does not modify, terminate or
discontinue, an Employee Benefit Plan in the form attached hereto as Exhibit G,
the benefits of which are in addition to any entitlements Transferred Employees
may have under the WARN Act and under their employment agreement previously
entered with the Seller. In addition, prior to or following the Closing Date at
Buyer's election, Buyer shall offer a retention bonus to those Transferred
Employees mutually agreed to by Buyer and Seller prior to the Closing Date, and
such retention bonus shall be conditioned on such Transferred Employee's
execution of a general release that expressly waives, releases and discharges
any and all claims against Seller and Cisco. The offer of retention bonus and
general release shall be substantially in the form attached hereto as Exhibit H.
Prior to the Closing Date, Cisco may interview and consider for employment and
may, in its sole discretion, offer employment to any of the Transferred
Employees listed on Schedule 9.1 (the "Interviewed Employees") upon such terms
and conditions determined by Cisco. In the event that any Interviewed Employee
accepts an offer of employment with Cisco prior to the Closing Date, such
employee shall execute a stock option acceleration waiver and an acceptance of
employment letter in form and substance acceptable to Cisco. The provisions of
this Section 9.1(a) shall survive the Closing for a period of three years.
(b) Buyer hereby agrees that, commencing on the date hereof,
neither it nor any of its Affiliates shall induce or encourage, or assist others
to induce or encourage, any of the employees of the Seller listed on Schedule
9.1(b) or any of the Interviewed Employees who accept an offer of employment
with Cisco to decline an employment arrangement with Cisco or Seller after the
Merger, or interfere in any manner with the relationship between Cisco or Seller
and such employee and Buyer hereby agrees that for a period of three years from
the Closing Date, neither it nor any of its Affiliates shall induce or
encourage, or assist others to induce or encourage, any of the employees of
Seller listed on Schedule 9.1(b) or any of the Interviewed Employees who accept
an offer of employment with Cisco, if such employee is hired by Cisco or Seller
after the Merger, to leave Cisco's or Seller's employ, whether to accept a
position with it or an entity related to or affiliated with it or otherwise. The
provisions of this Section 9.1(b) shall survive the Closing for a period of
three years.
(c) On or prior to the Closing Date, Buyer shall offer employment
to each of the employees listed on Schedule 9.1(c) (the "Key Employees")
pursuant to an Employment and Non-Competition Agreement in the form of Exhibit
I, ("Employment Agreement") and such employees shall have accepted employment
with Buyer and shall have entered into such Employment Agreement which shall not
be amended without Seller's consent.
SECTION 9.2 SELLER'S EMPLOYEE GROUP HEALTH PLANS. Each of Seller's
Employee Group Health Plans is listed on Schedule 9.2. On or as soon as
practicable following the Closing Date, Buyer shall adopt employee group health
plans for the benefit of each of the Transferred Employees that are comparable
to those of Seller prior to the Closing Date. Each such employee shall, with
respect to any group health plan that has a co-payment, deductible or other
co-insurance features, receive credit for any amounts such individual has paid
to date in the plan year of the Closing Date under Seller's group health plans
maintained by Seller prior to the Closing Date. Each such employee and eligible
dependent who, at the Closing Date, was
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participating in employee group health plans maintained by Seller shall not be
excluded from Newco's employee group health plans or limited in coverage
thereunder by reason of any waiting period restriction or pre-existing condition
limitation.
SECTION 9.3 BUYER BENEFIT PLANS. Buyer or one of its Affiliates will
recognize all service of the Transferred Employees with Seller or any of its
Affiliates, for purposes of eligibility to participate in those employee benefit
plans, within the meaning of Section 3(3) of ERISA, in which the Transferred
Employees are enrolled by Buyer or one of its Affiliates immediately after the
Closing Date. Any medical plan adopted by Buyer after the Closing, to the extent
available on commercially reasonable terms, shall contain no pre-existing
exclusions and shall provide credit for deductibles and co-payments for the 2000
calendar year so that the Transferred Employees shall not be entitled to any
continuation coverage under Seller's plans pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended.
SECTION 9.4 NO THIRD PARTY BENEFICIARIES. No provision of this Article
shall create any third party beneficiary or other rights in any employee or
former employee (including any beneficiary or dependent thereof) of Seller or of
any of its subsidiaries in respect of continued employment (or resumed
employment) with either Buyer or the Business or any of their Affiliates and no
provision of this Article IX shall create any such rights in any such Persons in
respect of any benefits that may be provided, directly or indirectly, under any
Employee Plan or Benefit Arrangement or any plan or arrangement that may be
established by Buyer or any of its Affiliates. No provision of this Agreement
shall constitute a limitation on rights to amend, modify or terminate after the
Closing Date any such plans or arrangements of Buyer or any of its Affiliates.
ARTICLE X
CONDITIONS TO CLOSING
SECTION 10.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The
obligations of Buyer and Seller to consummate the Closing are subject to the
satisfaction of the following conditions:
(a) The approval of the transactions contemplated hereby and by
the Merger Agreement shall have been approved and adopted by the requisite vote
of the stockholders of Seller under Washington law.
(b)(i) The closing of the Merger shall have occurred and (ii)
Buyer and Seller shall have received a certificate to that effect from each of
the parties to the Merger Agreement.
(c) Any applicable waiting period under the HSR Act relating to
the transactions contemplated hereby shall have expired or been terminated.
(d) No preliminary or permanent injunction or other order shall
have been issued by any court, arbitrator or governmental body, agency or
authority which restrains or prohibits the consummation of the transactions
contemplated hereby.
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(e) All actions by or in respect of or filings with any
governmental body, agency, official or authority required to permit the
consummation of the Closing shall have been obtained except where the failure so
to obtain would not have a Material Adverse Effect.
(f) The Purchase Price paid by Buyer for the Purchased Assets (as
adjusted upward or downward by any increase or decrease in the amount due from
Buyer to Seller under the Note) shall have been allocated in accordance with a
schedule proposed by Buyer and approved by Seller.
SECTION 10.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of Buyer
to consummate the Closing is subject to the satisfaction of the following
further conditions:
(a)(i) Seller shall have performed and complied in all material
respects with all of its covenants, obligations and conditions hereunder
required to be performed with and complied by it at or prior to the Closing
Date, (ii) the representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects (except for such
representations and warranties that are qualified by their terms by a reference
to materiality which representations and warranties as so qualified shall be
true and correct in all respects) both when made and on and as of the Closing
Date as though such representations and warranties were made on and as of such
time; and (iii) Buyer shall have received a certificate signed by an officer of
Seller to the foregoing effect.
(b) Seller shall have executed and delivered to Buyer the License
Agreement, the Note Agreement and the Xxxx of Sale and Assignment.
SECTION 10.3 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of
Seller to consummate the Closing and the transactions contemplated hereby is
subject to the satisfaction of the following further conditions:
(a)(i) Buyer shall have performed and complied in all material
respects with all of its covenants, obligations and conditions hereunder
required to be performed and complied with by it at or prior to the Closing
Date, (ii) the representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects (except for such
representations and warranties that are qualified by their terms by a reference
to materiality which representations and warranties as so qualified shall be
true and correct in all respects) both when made and on and as of the Closing
Date as though such representations and warranties were made on and as of such
time; and (iii) Seller shall have received a certificate signed by an officer of
Buyer to the foregoing effect.
(b) Buyer shall have executed and delivered to Seller a Security
Agreement, filed or appropriately recorded with the applicable governmental
agencies all related financing statements and other similar instruments and
documents (including, without limitation, filings in the U.S. Patent and
Trademark Office and U.S. Copyright Office), and taken all actions necessary to
perfect the security interests granted.
(c) Buyer shall have delivered to Seller copies of all insurance
policies of Buyer together with loss payable endorsements in favor of Seller.
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(d) Buyer shall have received all consents, authorizations or
approvals from governmental agencies referred to in Section 4.3, in each case in
form and substance reasonably satisfactory to Seller, and no such consent,
authorization or approval shall have been removed.
(e) The opinion of Xxxxxxx Xxxxx & Company, L.L.C., financial
advisor to Seller, referred to in Section 3.10, shall not have been withdrawn on
or prior to the Closing.
(f) Buyer shall have executed and delivered to Seller the Note,
the Note Agreement, the Security Agreements, the License Agreement, the UCC
Financing Statements and the Undertaking and Assumption.
ARTICLE XI
INDEMNIFICATION
SECTION 11.1 INDEMNIFICATION. (a) Buyer shall, for a period of five (5)
years from the Closing Date, indemnify and hold harmless Cisco, Seller, any
Affiliate thereof and the directors, officers, employees, counsel or agents of
Cisco, Seller or any such Affiliate (the "Indemnified Parties"), from and
against any and all Loss and Expense (as defined below) arising from or relating
to (i) the operations of Seller or the ownership use or operations of Seller's
assets, including the Purchased Assets, prior to and after the Closing Date,
whether known or unknown, other than the Excluded Liabilities, (ii) the Assumed
Liabilities, including, without limitation, any obligations or liabilities
resulting from the actions, suits, investigations or proceedings set forth on
Schedule 2.7 to the Merger Agreement and any Assumed Tax Liabilities, (iii)
noncompliance with any applicable bulk sales laws; (iv) any third party
liability claims for acts or omissions to act prior to the Closing Date; and (v)
the Business, either preceding or after the Closing. Loss and Expense shall mean
any and all liabilities, obligations, losses, costs, damages or diminution of
value and all out-of-pocket expenses, including attorney's and accountant fees.
SECTION 11.2 PROCEDURES. (a) If any of the Indemnified Parties
determines to seek indemnification under this Article XI with respect to any
Loss and Expense resulting from the assertion of liability by third parties,
such Indemnified Party shall give notice to the Buyer within 30 days of such
Indemnified Party becoming aware of any such Loss and Expense, or of facts upon
which any such Loss and Expense will be based. The notice shall set forth such
material information with respect thereto as is then reasonably available to
such Indemnified Party. In case any such liability is asserted against an
Indemnified Party, and such Indemnified Party notifies the Buyer thereof, the
Buyer will be entitled, if it so elects by written notice delivered to such
Indemnified Party within 20 days after receiving such Indemnified Party's
notice, to assume the defense thereof with counsel satisfactory to such
Indemnified Party. Notwithstanding the foregoing, (i) an Indemnified Party shall
also have the right to employ its own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party
unless such Indemnified Party shall reasonably determine that there is a
conflict of interest between or among such Indemnified Party and the Buyer with
respect to such Loss and Expense in which case the fees and expenses of such
counsel will be borne by the Buyer, (ii) such Indemnified Party shall not have
any obligation to give any notice of any assertion of liability by a third party
unless such assertion is in writing, and (iii) the rights of any Indemnified
Party to be
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indemnified hereunder in respect of any Loss and Expense resulting from the
assertion of liability by third parties shall not be adversely affected by its
failure to give notice pursuant to the foregoing unless, and, if so, only to the
extent that, Buyer is materially prejudiced thereby. With respect to any
assertion of liability by a third party that results in a Loss and Expense, the
parties hereto shall make available to each other all relevant information in
their possession material to any such assertion. Buyer shall not settle any
claim without the written consent of the Indemnified Parties; provided, however,
in the event such settlement contemplates that (i) neither party involved in the
claim shall make any admission, (ii) each party involved in the claim shall
execute standard releases for the claim and (iii) a cash settlement payment, the
Indemnified Parties shall consent to such settlement.
(b) In the event that an Indemnified Party asserts the existence
of a claim giving rise to a Loss and Expense (but excluding claims resulting
from the assertion of liability by third parties), it shall give written notice
to Buyer. Such written notice shall state that it is being given pursuant to
this Section 11.2(b), specify the nature and amount of the claim asserted, and
indicate the date on which such assertion shall be deemed accepted and the
amount of the claim deemed a valid claim (such date to be established in
accordance with the next sentence). If Buyer, within 30 days after the giving of
notice by such Indemnified Party, shall not give written notice to such
Indemnified Party announcing its intent to contest such assertion of such
Indemnified Party, such assertion shall be deemed accepted and the amount of
claim shall be deemed a valid claim. In the event, however, that Buyer contests
the assertion of a claim by giving such written notice to such Indemnified Party
within said period, then the parties shall act in good faith to reach agreement
regarding such claim. In the event that arbitration or litigation shall arise
with respect to any such claim, the prevailing party in such arbitration or
litigation shall be entitled to reimbursement of costs and expenses incurred in
connection with such arbitration or litigation including attorney fees, if the
parties hereto, acting in good faith, cannot reach agreement with respect to
such claim within thirty (30) days after such notice.
(c) In the event that Buyer, within 30 days after receipt of the
aforesaid notice of any Loss and Expense, fails to assume the defense of any
Indemnified Party against such Loss and Expense, such Indemnified Party shall
have the right to undertake the defense, compromise or settlement of such action
on behalf of and for the account, expense, and risk of Buyer; provided, however
that the Indemnified Party shall keep Buyer timely apprised of the status of any
claim with respect to such Loss and Expense and shall not settle such claim
without the written consent of Buyer, which consent shall not be unreasonably
withheld.
ARTICLE XII
TERMINATION
SECTION 12.1 GROUNDS FOR TERMINATION. This Agreement may be terminated
at any time prior to the Closing:
(i) by mutual written agreement of Seller and Buyer;
(ii) by either Seller or Buyer, if, without fault of the
terminating party, the Closing shall not have been consummated on
or before February 28, 2001 or
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such later date as may be agreed upon in writing by the parties
hereto (the "Final Date"); provided, however, that the Final Date
shall be extended to March 30, 2001 in the event that if the only
reason the Closing shall not have occurred by February 28, 2001
is the failure of the conditions set forth in Section 6.1(b)
and/or Section 6.1(d) of the Merger Agreement;
(iii) by either Seller or Buyer if any permanent
injunction or other order of a court or other competent authority
preventing the consummation of the transactions contemplated
hereby shall have become final and nonappealable;
(iv) by either Seller or Buyer if the Merger Agreement is
terminated pursuant to the provisions contained therein.
The party desiring to terminate this Agreement pursuant to clause (ii)
or (iii) shall give notice of such termination to the other party.
SECTION 12.2 EFFECT OF TERMINATION. Subject to Section 13.3, if this
Agreement is terminated as permitted by Section 12.1, such termination shall be
without liability of either party (or any shareholder, director, officer,
employee, agent, consultant or representative of such party) to the other party
to this Agreement; provided, however, that if such termination shall result from
the failure of either party to fulfill a condition to the performance of the
obligations of the other party or to perform a covenant of this Agreement or
from a breach by either party to this Agreement, such party shall be fully
liable for any and all Losses and Expenses incurred or suffered by the other
party as a result of such failure or breach. The provisions of Sections 5.1, 6.1
and 6.3, this Article XII and Article XIII shall survive any termination hereof
pursuant to Section 12.1.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or by
commercial delivery service, or mailed by registered or certified mail (return
receipt requested) or sent via facsimile (with confirmation of receipt) to the
parties at the following address (or at such other address for a party as shall
be specified by like notice):
if to Buyer, to:
Atlantis Group, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxx Xxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
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with a copy to:
Xxxxxxx Xxxxxxxx X.X.
0000 Xxxxxx Xxxxxx Xxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
Facsimile No: (000) 000-0000
Telephone No. (000) 000-0000
if to Seller, to:
Cisco Systems, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Senior Vice President,
Legal and Government Affairs
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxx Xxxx
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
SECTION 13.2 AMENDMENTS; NO WAIVERS. (a) Any provisions of this
Agreement may be amended or waived prior to the Closing Date if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Buyer and Seller, or in the case of a waiver, by the party against whom
the waiver is to be effective.
(b) No failure or delay by either party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. Any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
SECTION 13.3 EXPENSES. Except as otherwise provided herein, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense, whether or not the Closing occurs.
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SECTION 13.4 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that neither party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other party.
SECTION 13.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without regard
to the laws that might otherwise govern under applicable principles of conflicts
of law. Each of the parties hereto irrevocably consents to the exclusive
jurisdiction of any court located within the State of California in connection
with any matter based upon or arising out of this Agreement or the matters
contemplated herein, agrees that process may be served upon them in any manner
authorized by the laws of the State of California for such persons and waives
and covenants not to assert or plead any objection which they might otherwise
have to such jurisdiction and such process.
SECTION 13.6 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
a counterpart hereof signed by the other party hereto.
SECTION 13.7 ENTIRE AGREEMENT. This Agreement and each of the Ancillary
Agreements constitute the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements, understandings
and negotiations, both written and oral, between the parties with respect to the
subject matter of this Agreement. No representation, inducement, promise,
understanding, condition or warranty not set forth herein has been made or
relied upon by either party hereto. Neither this Agreement nor any of the
Ancillary Agreements nor any provision hereof or thereof, is intended to confer
upon any Person other than Cisco and the parties hereto any rights or remedies
hereunder.
SECTION 13.8 BULK SALES LAWS. Buyer and Seller each hereby waive
compliance by Seller with the provisions of the "bulk sales," "bulk transfer" or
similar laws of any state.
SECTION 13.9 CAPTIONS. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
SECTION 13.10 SURVIVAL. All representations, warranties, covenants,
indemnities and agreements made in this Agreement shall survive the Closing
except that the representations and warranties set forth in Articles III and IV
shall terminate one year after the Closing.
SECTION 13.11 SEVERABILITY. In the event that any provision of this
Agreement, or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree
to replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that will
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achieve, to the extent possible, the economic, business and other purposes of
such void or unenforceable provision.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto here caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
ATLANTIS GROUP, INC.
By:
-----------------------------------
Name:
Title:
ACTIVE VOICE CORPORATION
By:
-----------------------------------
Name:
Title:
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EXHIBIT D
UNDERTAKING AND ASSUMPTION
Undertaking and Assumption, dated [Insert Closing Date], by Atlantis
Group, Inc., a Washington corporation ("Buyer"), in favor of Active Voice
Corporation, a Washington Corporation ("Seller").
WITNESSETH:
WHEREAS, pursuant to the Asset Purchase Agreement dated November 9, (the
"Agreement") between Buyer and Seller, Seller is concurrently herewith selling,
assigning, transferring, conveying and delivering the assets, properties and
business defined in the Agreement as the Purchased Assets;
WHEREAS, in partial consideration for such sale, assignment, transfer
conveyance and delivery of the Purchased Assets, the Agreement requires Buyer to
assume and agree to discharge certain obligations and liabilities of Seller;
NOW, THEREFORE, pursuant to the terms of the Agreement and for good and
valuable consideration, Buyer hereby assumes and undertakes and agrees to
discharge the Assumed Liabilities as defined in the Agreement. Other than as
specifically stated in this Undertaking and Assumption, Buyer assumes no
obligation or liability of Seller.
This Undertaking and Assumption shall inure to the benefit of and be
binding upon the successors and assigns of Buyer and Seller.
IN WITNESS WHEREOF, Buyer has caused this Undertaking and Assumption to
be duly executed and delivered this ___ day of ______, 2000.
----------------------------------------
By:
-----------------------------------
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EXHIBIT E
XXXX OF SALE AND ASSIGNMENT
Pursuant to the Asset Purchase Agreement dated November 9, 2000 (the
"Agreement") between Atlantis Group, Inc., a Washington corporation ("Buyer")
and Active Voice Corporation, a Washington corporation ("Seller"), for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller does hereby sell, assign, transfer, convey and deliver unto
Buyer, each and all of the "Purchased Assets" (as such term is defined in the
Agreement) and all of the right, title and interest of Seller therein; provided,
however, as to any lease, contract, agreement, permit or other authorization
included in the Business which cannot be sold, transferred, assigned, conveyed
or delivered effectively without the consent of a third party, which consent has
not been obtained, this instrument shall be of no force or effect until such
requisite consent is obtained, whereupon this instrument shall become of full
force and effect with respect thereto.
Seller hereby covenants and agrees to and with Buyer, its successors and
assigns, to do, execute, acknowledge and deliver, or to cause to be done,
executed, acknowledged and delivered, to Buyer, its successors and assigns, all
such further acts, assignments, transfer, conveyances, powers of attorney and
assurances that may be reasonably requested by Buyer for the better selling,
assigning, transferring, conveying, delivering, assuring and confirming, to
Buyer, its successors or assigns, or for aiding and assisting in collecting or
reducing to possession, any or all of the Purchased Assets.
This Xxxx of Sale and Assignment shall be binding upon the successors
and assigns of Seller and shall inure to the benefit of the successors and
assigns of Buyer. This Xxxx of Sale and Assignment may be executed in
counterparts, each of which shall be considered an original but when taken
together shall be deemed one and the same instrument.
IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale and Assignment
to be duly executed and delivered this __ day of _________, 2000.
----------------------------------------
By:
-----------------------------------
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Schedule 2.1(e)
Buyer Payments
On and after the Closing Date, Buyer shall pay up to (i) $4,000,000 to the
Transferred Employees for bonus payments and for obtaining an enforceable
general release upon Closing, (ii) $2,200,000 for severance payments, (iii)
$395,000 to Xxxxx Xxxxx, Xxxx Xxxxx, Xxx Xxxx and Xxxxxx Xxxxxxxx for bonus
payments, (v) $749,000 to Xxxxx Xxxxx in lieu of granting stock options to Xxxxx
Xxxxx, (vi) $2,500,000 for the fees and expenses of the financial advisor for
Seller, (vii) $500,000 for the finders fee for the Key Employees and (viii)
$200,000 as payments to certain Transferred Employees with economic stress which
result from their assignment to Buyer to reduce the economic stress of these
employees. Buyer shall reimburse Seller for the following payments to be made by
Seller: (i) $195,000 for bonus payments to Xxxxx Xxxxxxxx and Xx Xxxxxxx, and
(ii) $798,000 to Xxxxx Xxxxxxxx and Xx Xxxxxxx in lieu of granting stock options
to these employees, plus any employer payroll taxes incurred by Seller in
connection with such payments.
2
