Exhibit 10.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made as of the 16th
day of April, 2004, by and between Glowpoint, Inc., a Delaware corporation
("Buyer") and Tandberg, Inc., a Delaware corporation ("Tandberg" and, together
with its wholly owned subsidiary, Network Systems, LLC ("Network"), referred to
herein as "Seller").
W I T N E S S E T H:
WHEREAS, Seller desires to sell, and Buyer desires to purchase, certain
assets and rights (collectively, the "Assets") owned or used by Seller in the
business (the "Business") currently conducted by Network, upon the terms and
subject to the conditions set forth in this Agreement; and
WHEREAS, as consideration for such asset sale and purchase, (i) Buyer
shall pay Seller the sum of $1.00 in cash, and (ii) Buyer shall assume certain
liabilities of Seller, upon the terms and subject to the conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises, agreements, representations, warranties, and covenants herein
contained, the parties hereby agree as follows:
1. Closing
1.1 Closing Date. The closing (the "Closing") of the transactions
contemplated hereby shall be held on the date hereof (the "Closing Date") at the
offices of counsel to Buyer, Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or on such other date or at such other
location as may be mutually agreed upon by the parties.
1.2 Sale of Assets. At the Closing, Seller shall sell to Buyer, free
and clear of all liens, mortgages, security interests, encumbrances, pledges,
charges, restrictions on transfer, or adverse claims (collectively, "Liens"),
and Buyer shall buy from Seller, all of Seller's right, title and interest in
the Assets, including, without limitation, the following:
(a) Seller's entire right, title and interest in, to and under all of
Seller's network services customer contracts, agreements, arrangements and other
commitments, oral or written, with any customer (each, a "Customer") of the
Business (collectively, the "Customer Contracts");
(b) computer equipment and other tangible property used in the
Business, including two Tandberg Codecs in good operating condition, and any
related documentation and user materials necessary to support the Customer
Contracts, and Seller's rights under all related warranties;
(c) all intellectual property owned by Seller relating to the NuVision
brand, whether now in existence or in development stage, including, without
limitation, all United States, international or foreign:
(i) patents, patent applications and statutory invention
registrations, including reissuances, divisions, continuations,
continuations in part, extensions and reexaminations thereof, all
inventions, and rights provided by international treaties or
conventions with respect to the foregoing, and all improvements
thereto;
(ii) trademarks, service marks, trade dress, logos, proprietary
icons, trade names, corporate names, internet domain names and other
source identifiers (whether or not registered) including all common law
rights therein, and registrations and applications for registration
therefor, all rights provided by international treaties or conventions
with respect to the foregoing, and all reissuances, extensions and
renewals and all goodwill associated therewith;
(iii) confidential and proprietary information, including trade
secrets, technology, technical data, know-how, formulae, databases,
research, product plans, markets, developments, inventions,
discoveries, processes, formulas, algorithms, designs, drawings,
business strategies and customer and supplier lists; and
(iv) all other proprietary rights, in each case, whether owned
or leased;
(d) Seller's entire right, title and interest in, to and under (i)
Seller's contracts with MCI Corporation, AT&T Corporation and Sprint
Communications relating to the Business (collectively, the "Vendor Contracts")
and (ii) Seller's agreement with Macrologic (the "Ancillary Agreement");
(e) The pro-rata portion of all prepayments relating to the Assets
received by Seller prior to the Closing for amounts due with respect to such
Assets after the Closing;
(f) all rights of Seller under express or implied warranties relating
to the Assets;
(g) all claims, causes of action, choses in action, rights of recovery
and rights of set-off of any kind relating to the Assets and arising on or after
or otherwise relating to the period commencing on the Closing Date;
(h) all existing business and marketing records relating to the Assets,
including accounting and operating records, asset ledgers, inventory records,
budgets, databases, event calendars, information and data respecting leased or
owned equipment, files, books, correspondence and mailing lists, creative,
promotional and advertising materials and brochures, and other business records;
and
(i) all media, including, without limitation disks, tapes and compact
discs, and other tangible property necessary for the transfer of the Assets from
Seller to Buyer pursuant to the terms and conditions of this Agreement.
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Without limitation of the foregoing, or the definition of "Assets"
contained herein, Schedule 1.2 hereto sets forth a description of specific
Assets that are being transferred pursuant to this Agreement.
1.3 Xxxx of Sale. The sale and delivery of the Assets shall be effected
by a Xxxx of Sale and Assignment and Assumption Agreement in substantially the
form of Exhibit A (the "Xxxx of Sale") and such endorsements, assignments and
other instruments of transfer and conveyance, agreements, and documents
reasonably satisfactory in form and substance to Buyer and its counsel as may be
requested by Buyer.
1.4 No Other Liabilities or Obligations Assumed. Schedule 1.4 sets
forth the liabilities of Seller to be assumed by Buyer as of the Closing (the
"Assumed Liabilities"), which Assumed Liabilities Buyer hereby assumes. Except
as specifically set forth in Schedule 1.4, Buyer expressly does not, and shall
not, assume or be deemed to have assumed under this Agreement or by reason of
any transaction contemplated hereunder or otherwise, any debts, liabilities
(contingent or otherwise) or obligations of Seller of any nature whatsoever,
whether the same are direct or indirect, fixed or contingent, or known or
unknown, whether arising under an agreement or contract or otherwise.
Notwithstanding any other provision of this Agreement, the Assumed Liabilities
shall not include (a) any debts, liabilities (contingent or otherwise) or
obligations of Seller with respect to those Assumed Liabilities referred to in
this Section arising out of any contract, agreement, commitment or lease (i)
required to be listed but not listed on Schedule 1.4 hereto regardless of any
knowledge thereof on the part of Buyer or (ii) the benefits of which are not
validly assigned to Buyer, or (b) any liabilities or obligations of Seller
(whether direct or indirect, contingent or otherwise) relating to Seller's
employees or arising (i) under or in connection with any employee benefit plan
or (ii) under Title IV or Section 302 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), Section 412 of the Internal Revenue Code of
1986, as amended (the "Code") or Section 4980B of the Code. Seller shall, and
hereby covenants to Buyer that it will as of the Closing Date or when due,
satisfy all of its liabilities or obligations that are not Assumed Liabilities.
1.5 Purchase Price; Allocation.
(a) Purchase Price. The consideration to be paid by Buyer for the
Assets shall consist of:
(i) The sum of One Dollar ($1.00); and
(ii) Buyer's assumption of the Assumed Liabilities.
(b) Allocation. Within 30 days following the Closing Date, Buyer shall
prepare and finalize a schedule setting forth an allocation of the consideration
described in Section 1.5(a) among the Assets (the "Allocation Schedule"). Each
party agrees to report the transactions contemplated hereby for federal income
tax and all other tax purposes (including, without limitation, for purposes of
Section 1060 of the Code) in a manner consistent with the Allocation Schedule,
and in accordance with all applicable rules and regulations, and to take no
position inconsistent with the allocation set forth therein in any
administrative or judicial examination or other proceeding. Each of Buyer and
Seller shall timely file the appropriate forms in accordance with the
requirements of Section 1060 of the Code and this Section.
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1.6 Excluded Assets. Anything to the contrary notwithstanding, the
Assets shall not include any of the following rights, properties or assets (the
"Excluded Assets"):
(a) This Agreement, and any of the other documents to be executed
in connection herewith (collectively, the "Other Transaction Documents"), or any
right, title or interest of Seller hereunder or thereunder;
(b) All cash, cash equivalents, bank accounts and letters of credit
of or for the benefit of Seller;
(c) All accounts receivable related to the Assets and arising prior
to the Closing;
(d) All real property and all leasehold interests related to the
Assets;
(e) Any records relating to the internal governance of Network;
(f) Credits from Vendors to the extent relating to the period prior
to the Closing Date; or
(g) Claims set forth in Network Systems LLC vs. American Whole
Health.
2. Representations and Warranties of Seller
Seller hereby represents and warrants to Buyer as follows:
2.1 Organization and Standing. Tandberg (a) is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, (b) has full right, power and authority to enter into and perform
and do all things contemplated under this Agreement and the Other Transaction
Documents necessary to give effect to the provisions of this Agreement and such
Other Transaction Documents. Network is a duly constituted, validly existing
Delaware limited liability company and has all necessary authority to own and
lease the Assets and to carry on and operate the Business as now being conducted
and proposed to be conducted by it under existing agreements, (c) is duly
qualified or licensed to do business and is in good standing as a foreign
corporation in every jurisdiction in which the character of the Assets or nature
of the Business requires such qualification, and (d) does not own any of the
Assets, and does not conduct any of the Business, through any other corporation,
limited liability company, partnership or other entity.
2.2 Authorization and Binding Obligations. The execution, delivery
and performance by Seller of this Agreement and the Other Transaction Documents
have been duly and validly authorized by all necessary corporate action. This
Agreement and the Other Transaction Documents have been duly executed and
delivered by Seller and constitute valid and binding agreements of Seller,
enforceable in accordance with their respective terms, except as their
enforceability may be limited by bankruptcy, insolvency, moratorium or other
laws relating to or affecting creditors' rights generally and the exercise of
judicial discretion in accordance with general equitable principles.
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2.3 No Contravention. The execution, delivery and performance of
this Agreement and the Other Transaction Documents, the consummation of the
transactions contemplated hereby and thereby and the compliance with the
provisions hereof and thereof by Seller do not (a) violate any provision of the
certificate of incorporation or bylaws of Seller, (b) conflict with, result in
the breach of, or constitute a default under, or result in the creation of any
Lien upon any of the Assets, or require any authorization, consent, approval,
exemption or other action by or notice to any third party, court or other
governmental or administrative body, under the provisions of any agreement or
other instrument to which Seller is a party or by which any of the Assets are
bound or affected or (c) violate any laws, regulations, orders or judgments
applicable to Seller.
2.4 Compliance with Laws. Seller has complied with, and is now in
compliance with, all laws, rules, regulations, orders, judgments and decrees of
any governmental, regulatory or administrative body, agency or authority, or any
court or judicial authority (each, an "Authority") applicable to the Business.
Seller possesses each franchise, license, permit, authorization, certification,
consent, variance, permission, order or approval of or from any Authority, and
has filed all filings, notices or recordings with any such Authority
(collectively, "Licenses") material to, or necessary for the conduct of, the
Business and is now and, has at all times in the past, been in compliance with
each of such Licenses. Each such License is identified on Schedule 2.4. No
proceeding or other action is pending or, to the best knowledge of Seller,
threatened to revoke, amend, or limit any License, and Seller has no basis to
believe that any such proceeding or action would result from the consummation of
the transactions contemplated by this Agreement or by the Other Transaction
Documents, or that any such License would not be renewed in the ordinary course.
2.5 Tax Matters. Except as set forth on Schedule 2.5, Seller has,
within the times and in the manner prescribed by law, filed all required tax
returns, including sales and use tax returns, has paid or provided for all
taxes, including sales and use taxes owed by Seller, with respect to the Assets
(whether or not shown on any tax return to be due and owing by it), has paid or
provided for all deficiencies or other assessments of taxes, interest or
penalties owed by it, and all such tax returns were correct and complete in all
material respects when filed. No taxing Authority has asserted, or will
successfully assert, any claim for the assessment of any additional taxes of any
nature with respect to any periods covered by any such tax returns, and all
taxes or other charges required to be withheld or collected by Seller with
respect to the Assets have been duly withheld or collected and, to the extent
required, have been paid to the proper taxing Authority or properly segregated
or deposited as required by law.
2.6 Litigation. Except as set forth on Schedule 2.6, there is no
pending or, to the best knowledge of Seller, threatened adverse claim, dispute,
governmental investigation, suit, action, arbitration, legal, administrative or
other proceeding of any nature, domestic or foreign, criminal or civil, at law
or in equity, by or against or otherwise affecting the Assets.
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2.7 Agreements.
(a) Schedule 2.7(a) sets forth a true and complete list of the
Customer Contracts, the Vendor Contracts and the Ancillary Agreement. True and
complete copies of each such contract have been delivered to Buyer.
(b) To the best knowledge of Seller, each such contract is the
valid and binding obligation of the other contracting party, enforceable in all
material respects in accordance with its terms against the other contracting
party, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, arrangement, moratorium or other similar laws and by
general principles of equity, has not been cancelled in whole or in part and is
in full force and effect.
(c) Except as set forth on Schedule 2.7(c), Seller has fulfilled
all material obligations required to have been performed by it prior to the date
hereof with respect to each such contract, and Seller has no reason to believe
that the other contracting party will not be able to fulfill all of its or his
obligations when due in respect thereof.
(d) To the best knowledge of Seller, no other contracting party to
any such contract is now in breach thereof, and there are not now, nor have
there been in the twelve (12) month period prior to the date hereof, any
material disputes between Seller and any other contracting party.
(e) Seller shall use its best efforts to ensure that each such
contract shall be validly assigned to Buyer at Closing.
(f) Seller is not a party to, or bound by, any agreement or
commitment that restricts the conduct of the Business anywhere in the world.
(g) Schedule 2.7(g) sets forth a true and complete list of each
proposed agreement, commitment, arrangement, or other understanding under
current discussion between Seller and any third party that would, or reasonably
could be expected to, be required to be disclosed pursuant to any provision of
this Agreement, if same had been executed prior to and remained in effect as of
the date hereof. True and complete copies of the most recent draft of each such
agreement and all other documents evidencing the current state of such
discussions have been delivered to Buyer.
2.8 Customers. Schedule 2.8 lists all customers (the "Customers")
of the Business with whom Seller has done business within twelve (12) months
prior to the Closing Date. Except as set forth on Schedule 2.8, none of the
Customers has prepaid its account in whole or in part or otherwise provided any
kind of credit to Seller with respect to services to be delivered by Seller at
any time following the Closing Date.
The relationships of Seller with the persons listed in Schedule 2.8
are good commercial working relationships, and, except as listed on Schedule
2.8, no such person has canceled or otherwise terminated, or threatened to
cancel or terminate, its relationship with Seller, or decreased or limited
materially, or threatened to decrease or limit materially, its business done
with Seller, and Seller has no reason to believe that any such person would not
continue its business relationship with Buyer following the Closing on
substantially the same terms as such person has heretofore done business with
Seller.
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2.9 Tangible Property. Except as set forth on Schedule 2.9, Seller
has good and marketable title to each item of tangible personal property that is
an Asset, free and clear of all liens and other encumbrances, and, with
immaterial exceptions, each such item of tangible personal property is in good
operating condition and repair, ordinary wear and tear excepted, and useable in
the ordinary course of business. Schedule 2.9 contains a complete and accurate
list setting forth a description of each item of tangible property that is an
Asset, and describes the nature of Seller's interest in any property listed
thereon that is not owned entirely by Seller free and clear of any Lien. Except
as set forth on Schedule 2.9, Seller has not granted, transferred, or assigned
any right, title or interest in or to any Asset to any person or entity.
2.10 Intellectual Property.
(a) Seller owns, Buyer shall receive at Closing, and Seller's
intellectual property includes, all assets described in Section 1.2(c) used by
Seller in the Business.
(b) Seller has promulgated and used best efforts to protect the
trade secrets of the Business. There has been no material unauthorized
disclosure of any trade secrets of the Business by any person or entity.
(c) No intellectual property right or other claims have been
asserted by any person or entity to the use of any Asset, and Seller is not
aware of any valid basis for any such claim. To the best knowledge of Seller,
the use of any Asset by Seller does not infringe on the intellectual property
rights or other rights of any person or entity.
(d) As of the Closing Date, all intellectual property purchased by
Buyer pursuant to this Agreement is and shall be useable in the same form as on
the Closing Date, under the same circumstances as on the Closing Date, and in
the ordinary course of the Business as such business actually has been operated
prior to the Closing Date.
(e) Seller (i) has good and marketable title to each intangible
Asset, including, but not limited to, each item of intellectual property used in
and material to, or necessary for the operation of, the Business, free and clear
of any Lien, and (ii) is the sole and rightful owner of all right, title and
interest in and to each intangible Asset, and has the unrestricted right to
market, license and otherwise exploit each intangible Asset.
2.11 Certain Transactions. Since December 31, 2003, Seller has not:
(i) suffered any change, event or condition that, individually
or in the aggregate, has had or could reasonably be expected to
have a material adverse effect upon the Business or Seller's
ability to consummate the transactions contemplated herein;
(ii) sold, transferred, leased, assigned or otherwise disposed
of any Asset of the Business, except in the ordinary course of
business, consistent with past custom and practice;
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(iii) made any tax election or settled or compromised any
federal, state, local or other tax liability either not in
accordance with past practice, or which has had or could reasonably
be expected to have a material adverse effect upon the Assets,
except as set forth on Schedule 2.11(iii);
(iv) taken any action that was intended or may reasonably be
expected to result in any of the representations and warranties set
forth in this Agreement being or becoming untrue;
(v) except in the ordinary course of business consistent with
past practice and custom, created, renewed, amended or terminated
or given notice of a proposed renewal, amendment of termination of,
any Customer Contracts, Vendor Contract or any other material
contract, agreement or lease by which any of the Assets are bound;
or
(vi) agreed to do any of the foregoing.
2.12 No Undisclosed Liabilities. Except as set forth on the
Schedules to this Agreement, Seller has no liability, indebtedness, obligation,
expense, claim, deficiency, guaranty or endorsement of any type, whether
accrued, absolute, contingent, matured, unmatured or other with respect to the
Assets.
2.13 Accounts Payable. Seller has provided Buyer with an accurate
and complete breakdown and aging of all accounts payable of Seller with respect
to the Customer Contracts, the Vendor Contracts and the other Assets as of the
Closing Date.
2.14 Assets. Except for the Excluded Assets, the Assets are all of
the assets, properties, goodwill, and rights of every nature, kind and
description, whether tangible or intangible, real, personal or mixed, wherever
located, used in and material to, or necessary for the operation of, the
Business.
2.15 Brokers or Finders. Seller has not incurred, and will not
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement,
the Other Transaction Documents or any transaction contemplated hereby or
thereby. Seller shall indemnify and hold Buyer harmless with respect to any
claim by any broker, agent, or finder claiming to have acted on behalf of
Seller, respecting the subject matter hereof.
3. Representations and Warranties of Buyer
Buyer represents and warrants to Seller as follows:
3.1 Organization and Standing. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, with full corporate right, power and authority to enter into and
perform and do all things contemplated under this Agreement and the Other
Transaction Documents to which it is a party necessary to give effect to the
provisions of this Agreement and such Other Transaction Documents.
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3.2 Authorization and Binding Obligations. The execution, delivery
and performance by Buyer of this Agreement and the Other Transaction Documents
to which Buyer is a party have been duly and validly authorized by all necessary
corporate action. This Agreement and the Other Transaction Documents to which
Buyer is a party have been duly executed and delivered by Buyer and constitute
valid and binding agreements of Buyer, enforceable in accordance with their
respective terms, except as their enforceability may be limited by bankruptcy,
insolvency, moratorium or other laws relating to or affecting creditors' rights
generally and the exercise of judicial discretion in accordance with general
equitable principles.
3.3 No Contravention. The execution, delivery and performance of
this Agreement and the Other Transaction Documents to which Buyer is a party,
the consummation of the transactions contemplated hereby and thereby and the
compliance with the provisions hereof and thereof by Buyer do not (a) violate
any provision of the certificate of incorporation or bylaws of Buyer, (b)
conflict with, result in the breach of, or constitute a default under, or
require any authorization, consent, approval, exemption or other action by or
notice to any third party, court or other governmental or administrative body,
under the provisions of any agreement or other instrument to which Buyer is a
party or by which the property of Buyer is bound, or (c) violate any laws,
regulations, orders or judgments applicable to Buyer.
3.4 Brokers or Finders. Buyer has not incurred, and will not incur,
directly or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement, the Other
Transaction Documents or any transaction contemplated hereby or thereby. Buyer
shall indemnify and hold Seller harmless with respect to any claim by any
broker, agent, or finder claiming to have acted on behalf of Buyer respecting
the subject matter hereof.
4. Closing Conditions and Deliveries
4.1 Conditions to Buyer's Obligations. The obligations of Buyer
under this Agreement are subject to the fulfillment on or before the Closing of
each of the following conditions, except such conditions as may be waived by
Buyer:
(a) Delivery of Other Transaction Documents. Seller shall have
delivered to Buyer the following Other Transaction Documents, duly executed by
the Seller:
(i) the Xxxx of Sale and Assignment and Assumption Agreement;
and
(ii) such other instruments of sale, transfer, conveyance or
assignment as Buyer and its counsel reasonably shall have requested
prior to the Closing Date for the sale, transfer, conveyance and
assignment of the Assets to Buyer.
(b) Secretary's Certificate. Tandberg shall have delivered to Buyer
a certification of the secretary of Tandberg, dated the Closing Date, (i)
attaching resolutions of the board of directors of Tandberg in connection with
the authorization and approval of the execution, delivery and performance by
Tandberg of this Agreement and the Other Transaction Documents to which Tandberg
is a party, certified as being in full force and effect as of the Closing Date;
and (ii) setting forth the incumbency of the officers of Tandberg who have
executed and delivered this Agreement and each of the Other Transaction
Documents to which Tandberg is a party, including therein a signature specimen
of each such officer.
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(c) Good Standing Certificate. Network shall have delivered to
Buyer a certificate, dated as of the Closing Date or within three (3) Business
Days prior to the Closing Date, executed by the proper official, as to the good
standing of Network in State of Delaware.
(d) Consents. Seller shall have delivered to Buyer all written
consents which are required under any contract or agreement being assigned to
Buyer hereunder; provided, however, that as to any such contract or agreement
the assignment of which by its terms requires prior consent of any of the
parties thereto, if such consent is not obtained prior to or on the Closing
Date, Seller shall take all actions reasonably necessary to obtain such
consents.
4.2 Conditions to Seller's Obligations. The obligations of Seller
under this Agreement are subject to the fulfillment on or before the Closing of
each of the following conditions, except such conditions as may be waived by
Seller:
(a) Other Transaction Documents. Buyer shall have delivered to
Seller the Xxxx of Sale and Assignment and Assumption Agreement, duly executed
by Buyer.
(b) Secretary's Certificate. Buyer shall have delivered to Seller a
certification of the secretary of Buyer, dated the Closing Date, (i) attaching
resolutions of the board of directors of Buyer in connection with the
authorization and approval of the execution, delivery and performance by Buyer
of this Agreement and the Other Transaction Documents to which Buyer is a party,
certified as being in full force and effect as of the Closing Date; and (ii)
setting forth the incumbency of the officers of Buyer who have executed and
delivered this Agreement and each of the Other Transaction Documents to which
Buyer is a party, including therein a signature specimen of each such officer.
5. Indemnification
5.1 Indemnification by Seller. Seller shall indemnify and hold
harmless Buyer, its successors and assigns, at all times after the Closing Date,
against and in respect of:
(a) Liabilities of Seller. Other than liabilities expressly assumed
by Buyer as provided in Section 1.4 of this Agreement, all liabilities and
obligations of Seller of any kind or nature whatsoever relating to Seller,
whether accrued, absolute, fixed, contingent or otherwise, known or unknown;
(b) Misrepresentations. Any damage, loss, cost, expense or
liability (including reasonable attorneys' fees) resulting to Buyer from any
false, misleading or inaccurate representation, breach of warranty or
non-fulfillment of any agreement or condition on the part of Seller under this
Agreement or any Other Transaction Document to which Seller is a party or from
any misrepresentation in or any omission from any certificate, schedule or other
instrument furnished or to be furnished to Buyer hereunder;
(c) Taxes. Any tax, including any use or sales tax, for which
Seller is or may be liable in respect of the Assets prior to the Closing;
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(d) Conduct of Business. Except as set forth on Schedule 5.1(d),
any claim arising out of or in connection with the conduct of the Business prior
to the Closing; and
(e) Actions and Suits. All claims, actions, suits, proceedings,
demands, assessments, judgments, costs and expenses, including, without
limitation, legal fees and expenses, incident to any of the foregoing.
5.2 Indemnification by Buyer. Buyer shall indemnify and hold
harmless Seller, at all times after the Closing Date, against and in respect of:
(a) Assumed Liabilities. All Assumed Liabilities;
(b) Misrepresentations. Any damage, loss, cost, expense or
liability (including reasonable attorneys' fees) resulting to Seller from any
false, misleading or inaccurate representation, breach of warranty or
non-fulfillment of any agreement or condition on the part of Buyer under this
Agreement or any Other Transaction Document to which Buyer is a party or from
any misrepresentation in or any omission from any certificate or other
instrument furnished or to be furnished to Seller hereunder;
(c) Taxes. Any tax, including any use or sales tax, for which Buyer
is or may be liable in respect of the Assets subsequent to the Closing;
(d) Conduct of Business. Any claim arising out of or in connection
with the conduct of the Business subsequent to the Closing; and
(e) Actions and Suits. All claims, actions, suits, proceedings,
demands, assessments, judgments, costs and expenses, including, without
limitation, legal fees and expenses, incident to any of the foregoing.
5.3 Indemnification Procedure.
(a) A party that may be entitled to indemnification pursuant to
Section 5.1 or 5.2 (the "Indemnitee") shall promptly give written notice (a
"Notice of Claim") to the party liable for such indemnification (the
"Indemnitor"). A Notice of Claim shall set forth (a) a description, in
reasonable detail, of the facts and circumstances with respect to the subject
matter of such claim or potential claim for indemnification, and (b) the
anticipated total amount of the indemnification claim (including any costs or
expenses which have been or may be reasonably incurred in connection therewith).
Upon receipt of a Notice of Claim, the Indemnitor may elect to cure the
circumstances giving rise to the indemnification claim (the "Event of Loss")
within thirty (30) days after the date of receipt of the Notice of Claim. If
such cure cannot be effected within such 30-day period, payment of the amount of
actual damage, loss, cost, expense or liability (including reasonable attorneys'
fees) (collectively, "Damages") due to the Indemnitee as set forth in the Notice
of Claim shall be made by Indemnitor no later than the thirtieth (30th) day
after the date of the Notice of Claim (or such later date as the Indemnitor
receives written notice that the Indemnitee has suffered Damages). The
Indemnitee's failure to give prompt notice or to provide copies of documents or
to furnish relevant data shall not constitute a defense (in whole or in part) to
any claim by the Indemnitee against the Indemnitor for indemnification, except
and only to the extent that such failure shall have caused or increased such
liability or adversely affected the ability of the Indemnitor to defend against
or reduce its liability.
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(b) If the Indemnitor shall reject any Damages as to which a Notice
of Claim is sent by the Indemnitee, the Indemnitor shall give written notice of
such rejection to the Indemnitee within thirty (30) days after the date of
receipt of the Notice of Claim.
(c) If any Notice of Claim relates to any claim made against an
Indemnitee by a third person, the Notice of Claim shall state the nature, basis
and amount of such claim. The Indemnitor shall have the right, at its election,
by written notice to the Indemnitee, to assume the defense of the claim as to
which such notice has been given. Except as provided in the next sentence, if
the Indemnitor so elects to assume such defense, it shall diligently and in good
faith defend such claim and shall keep the Indemnitee reasonably informed of the
status of such defense, and the Indemnitee shall cooperate fully with the
Indemnitor in the defense of such claim, provided that in the case of any
settlement providing for remedies other than monetary damages for which
indemnification is provided, the Indemnitee shall have the right to approve the
settlement, which approval shall not be unreasonably withheld or delayed. If the
Indemnitor does not so elect to defend any claim as aforesaid or shall fail to
defend any claim diligently and in good faith (after having so elected), the
Indemnitee may assume the defense of such claim and take such other action as it
may elect to defend or settle such claim as it may determine in its reasonable
discretion, provided that the Indemnitor shall have the right to approve any
settlement, which approval will not be unreasonably withheld or delayed.
6. Post-Closing Covenants
6.1 Further Assurances; Cooperation. The parties shall, at any
time, and from time to time, after the Closing Date, execute and deliver such
further instruments of conveyance and transfer and take such additional action
as may be reasonably necessary to effect, consummate, confirm or evidence the
transactions contemplated by this Agreement and the Other Transaction Documents,
including, without limitation (i) inventorying and listing of the Assets, (ii)
using their best efforts to obtain any third party consents not obtained as of
the Closing Date, (iii) filing of tax returns, including, without limitation,
the filing of sales and use tax returns and notices as any party hereto may
reasonably require, and (iv) cooperating to facilitate the transition of
Customers of the Business to Buyer.
6.2 Delivery of Assets; Additional Assets. (a) Seller agrees that
it will transfer or make available to Buyer, promptly after the receipt thereof,
any property that Seller receives after the Closing Date in respect of the
Assets transferred or intended to be transferred to Buyer under this Agreement.
(b) To facilitate Buyer's operation of the Business subsequent
to the Closing, Seller agrees to make available for purchase by Buyer, at
Buyer's option, one Tandberg MCU, one Tandberg gateway and TMS software with
sufficient licensing. The purchase price for any of such additional assets shall
be equal to Seller's cost for such assets.
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6.3 Transition Services. For a period of 60 days following the
Closing or such shorter period as Buyer shall notify Seller (the "Transition
Period"), Seller shall maintain, at the expense of the Business, all employees,
premises and infrastructure related to the Assets, except as otherwise agreed by
the parties. During the Transition Period (including any extension thereof
pursuant to this Section 6.3), the costs incurred by Seller pursuant to the
previous sentence shall be paid as an expense of the Business; provided,
however, that Buyer shall receive net income from the Customer Contracts in an
amount at least equal to Thirty Thousand Dollars ($30,000.00) per month,
calculated on a pro rata basis with respect to the actual duration of the
Transition Period. To the extent Buyer does not receive such agreed upon minimum
net income from the Customer Contracts in any month during the Transition Period
(or the applicable pro rata portion of such minimum net income for the final
part of the Transition Period if such part is shorter than a month), Seller
shall make up the shortfall by a direct payment to Buyer for such month (or
shorter period) no later than 30 days after the end of such month (or such
shorter period). Subject to the preceding sentence, all employment-related
liabilities arising out of the termination of any employees of the Business,
whether terminated before Closing or during or at the end of the Transition
Period shall be expenses of the Business; provided, however, that no severance
payments to employees of the Business that become employees of Seller or Buyer
prior to the end of the Transition Period shall be expenses of the Business; and
provided, further that Seller shall promptly reimburse Buyer for any such
employment-related liabilities for any employee of the Business that becomes an
employee of Seller at any time within twelve (12) months of the date of this
Agreement. During the Transition Period, Seller shall remain responsible for all
billing and collections related to the Assets. During the Transition Period,
Seller and Buyer shall each designate an employee dedicated to the transfer of
the Assets and related transfer of information and systems integration to Buyer,
including all call center, technical support, marketing and billing information
related to the Assets. During the Transition Period, Seller shall afford Buyer's
employees and other authorized representatives, access during normal business
hours to Seller's employees related to the Assets in order to effectuate the
transfer of the Assets. Buyer shall conduct these activities in a reasonable
manner during regular business hours using reasonable efforts to minimize
interferences to the business operations of Seller. Seller shall undertake to
promptly and completely provide all disclosures requested by Buyer or its
agents. Buyer shall have the right, upon written notice within 30 days following
the Closing, at Buyer's expense, to cause Seller to use its good faith efforts
to extend its maintenance of, and Buyer's access to (as described in this
Section 6.3), Seller's employees related to the Assets for an additional period
of 60 days following the Transition Period. At any time during the Transition
Period, Buyer shall have the right to make offers of employment to employees of
the Business.
6.4 Marketing. Seller shall cooperate with Buyer to develop and
jointly market with Buyer to Seller's current ISDN telecommunications Customers
a video communications service (the "Service"), including, but not limited to, a
package bundling Buyer's IP-based video communications service (the "Glowpoint
Service") and Seller equipment and hardware used in connection with the
Glowpoint Service. Seller shall use its reasonable best efforts to maintain its
Customers and market the Service to its Customers. During the Transition Period
and for a period of one year thereafter, Seller shall cooperate with Buyer to
issue joint communications to the Customers with respect to the transactions
effected by this Agreement and the Service.
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6.5 Exclusivity. (a) (i) Except as set forth in clause (ii) of this
Section 6.5(a), for a period of three years following the Closing (the
"Exclusivity Period"), the Glowpoint Service shall be the exclusive IP-based
video communications service used by Seller and offered or marketed by Seller to
the Customers. During the Exclusivity Period, Buyer shall not offer or market to
the Customers video communications hardware manufactured by a competitor of
Seller without Seller's prior approval and (ii) the Exclusivity Period shall
immediately terminate if and when Buyer, or the Assets acquired by Buyer
hereunder, are transferred to a competitor of Tandberg, Inc. set forth on
Schedule 6.5(a)(ii).
(b) During the Exclusivity Period, Seller shall purchase from Buyer
the corporate telecommunication services that Seller currently purchases from
AT&T, Sprint and MCI (collectively, the "Vendors"), including through Network,
at least the services set forth on Schedule 6.5(b).
Seller agrees that any services currently acquired by Seller from
the Vendors that have committed terms will be kept active for the duration of
such terms. If Seller elects to cancel any of such services prior to the
expiration of the term, Seller will be responsible for paying any early
termination fees incurred by Buyer as a result of such cancellation. During the
first year of the Exclusivity Period, the Glowpoint Service shall be offered to
Seller at the lower of (i) the lowest rates then offered by Buyer to any
customer with lesser or comparable usage volume or (ii) the rates in effect on
the Closing Date. Thereafter, Buyer may raise the rates charged to Seller upon
providing thirty (30) days written notice to Seller that Buyer's own direct
costs for the relevant communications services have increased. Any such increase
shall be limited to a percentage increase equal to the percentage increase in
Buyer's actual costs for such services.
6.6 Non-Solicitation; Non-Competition.
(a) For a period of two (2) years from the Closing Date, Seller
shall not, without Buyer's prior written consent, directly or indirectly, (i)
solicit the employment of any officer, senior manager or other key employee of
Buyer or any subsidiary of Buyer or (ii) hire any officer, senior manager or
other key employee whose employment Buyer or any subsidiary of Buyer has
terminated within 90 days of such solicitation or hire; provided, however, that
this Section 6.6(a) shall not prevent advertisements, solicitations, position
listings or notices of employment opportunities that are published or made
available to the public or hiring of personnel responding thereto.
(b) For a period of three (3) years from the Closing Date, Seller
shall not, directly or indirectly, for purposes competitive with the Business,
call on, solicit, or take away for Seller or for any other person or entity, any
person or entity who or that is or was a customer of Buyer or any of Buyer's
subsidiaries during such three-year period, or that was a Customer of Seller on
the Closing Date.
6.7 Employee Matters.
(a) Buyer does not and will not assume the sponsorship of, the
responsibility for contributions to, or any liability under or in connection
with, any employee benefit plan of Seller relating to employees of the Business.
Buyer will in no event be deemed to be a successor employer (within the meaning
of Treasury Regulation Section 54.4980B-2) of Seller for purposes of applying
the provisions of Section 4980B of the Code following the Closing with respect
to any current or former employee of Seller.
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(b) Seller shall be responsible for, and Buyer does not and will
not assume, any liability (direct or indirect, contingent or otherwise) that may
arise under or in connection with any state or local law similar to the Worker
Adjustment and Retraining Notification Act, 29 U.S. Stat. ss. 2010 et. seq., as
a result of the transactions contemplated hereby.
7. Miscellaneous
7.1 Governing Law. This Agreement shall be governed in all respects
by the laws of the State of New Jersey, without giving effect to any conflict of
law provision (whether of the State of New Jersey or any other jurisdiction that
would cause the application of the laws of any jurisdiction other than the State
of New Jersey).
7.2 Jurisdiction. Any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement, the Other Transaction Documents or the transactions contemplated
hereby or thereby shall be brought exclusively in either the state courts
located in Union County, New Jersey or the United States District Court located
in Newark, New Jersey, and each of the parties hereby expressly submits to such
jurisdiction and venue of such court (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
7.3 Survival. Except as otherwise expressly provided herein, the
several representations, warranties, covenants, and agreements of the parties
contained in this Agreement or in any Other Transaction Document shall be deemed
to be material and to have been relied upon by Buyer and Seller notwithstanding
any investigation made by Buyer or Seller, shall survive the Closing Date and
shall remain operative and in full force and effect for a period of two (2)
years following the Closing Date, except insofar as an indemnification claim has
been asserted by any party and has not been resolved prior to the end of such
two-year period; provided, however, that the representations and warranties of
Seller set forth in Section 2.5 shall survive for the period of the applicable
statute of limitations, and the respective representations, warranties,
covenants and agreements of Buyer and Seller contained in Sections 2.13, 2.15,
3.4, 5, 6, and 7 shall continue without any time limitation.
7.4 Notices. Any notices authorized to be given hereunder shall be
in writing and deemed given, if delivered personally or by overnight courier, on
the date of delivery, if a Business Day, or if not a Business Day, on the first
Business Day following delivery, or if mailed, three days after mailing by
registered or certified mail, return receipt requested, and in each case,
addressed, as follows:
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If to Buyer:
Glowpoint, Inc.
000 Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxxx, President and CEO
Facsimile: (000) 000-0000
and a copy to:
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X.X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Seller:
Tandberg Inc.
0000 Xxxxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxx, President
Facsimile: (000) 000-0000
and a copy to:
Klett, Rooney, Lieber, Schorling, P.C.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
or if delivered by facsimile, on a Business Day before 4:00 p.m. local time of
addressee, on transmission confirmed electronically, or if at any other time or
day on the first Business Day succeeding transmission confirmed electronically,
to the facsimile numbers provided above, or to such other address or facsimile
number as any party shall specify to the other, pursuant to the foregoing notice
provisions. When used in this Agreement, the term "Business Day" shall mean a
day other than a Saturday, Sunday or a day on which commercial banks in New
York, New York are generally closed for business.
7.5 Entire Agreement; Amendments. This Agreement and the Other
Transaction Documents (i) set forth the entire agreement of the parties
respecting the subject matter hereof, (ii) supersede any prior and
contemporaneous understandings, agreements, or representations by or among the
parties, written or oral, to the extent they related in any way to such subject
matter , and (iii) may not be amended orally, and no right or obligation of any
party may be altered, except as expressly set forth in a writing signed by such
party.
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7.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall for all purposes be deemed an original, and
all such counterparts shall together constitute but one document.
7.7 Headings. The section and subsection headings do not constitute
any part of this Agreement and are inserted herein for convenience of reference
only.
7.8 Public Announcements. The parties shall, after consultation,
issue a joint press release or otherwise make a public statement concerning the
transactions contemplated by this Agreement containing disclosure which is
mutually agreeable to the parties; provided, however, that prior to the issuance
of such press release, neither party shall make any press release or other
public statement concerning the matters covered by this Agreement without the
approval of the other party, except to the extent that, in the opinion of
counsel for the party making the release or statement, such release or statement
is required by law or applicable regulation, and shall, in any event, to the
extent practicable, permit the other party an opportunity to review any such
release or statement prior to dissemination.
7.9 Waiver. No waiver of a breach of, or default under, any
provision of this Agreement shall be deemed a waiver of such provision or of any
subsequent breach or default of the same or similar nature or of any other
provision or condition of this Agreement.
7.10 Binding Effect and Assignment. This Agreement shall be binding
upon and shall inure to the benefit of the parties and their successors and
assigns. Neither Seller nor Buyer may assign any obligation under this Agreement
except with the prior written consent of the other party hereto.
7.11 Expenses. Each party shall bear its own expenses incurred with
respect to the preparation of this Agreement and the Other Transaction Documents
and the consummation of the transactions contemplated hereby and thereby.
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IN WITNESS WHEREOF, the undersigned have executed this Asset
Purchase Agreement as of the date first written above.
BUYER:
------
GLOWPOINT, INC.
By: /s/ Xxxxx X. Xxxxxxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxxxxxx
Title: President and Chief Executive
Officer
SELLER:
-------
TANDBERG, INC.
By: /s/ Xxxx Xxxxxxxx
-----------------
Name: Xxxx Xxxxxxxx
Title: President
