Exhibit 10.4
ASSET PURCHASE AGREEMENT
AMONG
MTVP (FIRST VIRTUAL INVESTMENTS), LLC
SILICON VALLEY BANK
XXXXXXXX & XXXXXXXX LLP
FIRST VIRTUAL COMMUNICATIONS, INC.
AND
CUSEEME NETWORKS, INC.
FEBRUARY 12, 2005
TABLE OF CONTENTS
PAGE
ARTICLE I SALE OF ASSETS AND TERMS OF PAYMENT.........................................1
1.01 Assets Being Sold to Buyer....................................................1
1.02 Retained Assets...............................................................3
1.03 Assumed Liabilities...........................................................4
1.04 Retained Liabilities..........................................................5
1.05 Purchase Price................................................................6
1.06 Allocation of the Purchase Price..............................................6
1.07 Absolute Sale.................................................................7
ARTICLE II RELATED AGREEMENTS..........................................................7
2.01 Assignments of Patent, Trademark, and Copyright Rights........................7
2.02 Xxxx of Sale..................................................................7
2.03 Real Property Lease Assignments...............................................7
2.04 Contract Assignment...........................................................7
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLERS........................7
3.01 Organization and Good Standing; Assets of Subsidiaries........................8
3.02 Authorization; Compliance with Other Instruments and Law......................8
3.03 Due Diligence.................................................................9
3.04 Operation of the Business in the Ordinary Course..............................9
3.05 Tax Matters...................................................................9
3.06 Material Contracts and Commitments: Cure Costs................................9
3.07 Licenses, Permits and Authorizations.........................................10
3.08 Title to Purchased Assets....................................................11
3.09 Proprietary Rights...........................................................11
3.10 Employee Benefit Plans; Labor Matters........................................12
3.11 Litigation and Other Claims..................................................13
3.12 [Intentionally Omitted]......................................................13
3.13 Compliance with Laws.........................................................13
3.14 Insurance....................................................................14
3.15 Real Property Leases.........................................................14
3.16 Condition of Purchased Assets................................................14
3.17 Environmental Matters........................................................14
3.18 Full Disclosure..............................................................16
3.19 Representations and Warranties True at the Closing...........................16
ARTICLE IV REPRESENTATIONS, WARRANTIES
AND COVENANTS OF BUYER.....................................................16
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TABLE OF CONTENTS
(CONTINUED)
PAGE
4.01 Organization and Good Standing...............................................16
4.02 Due Authorization; Noncontravention..........................................16
ARTICLE V EMPLOYEES..................................................................17
5.01 Employees and Employee Benefits..............................................17
5.02 Third Parties................................................................18
ARTICLE VI WORKERS COMPENSATION, PRODUCT
LIABILITY AND WARRANTY RESPONSIBILITY......................................19
6.01 Workers Compensation.........................................................19
6.02 Product Liability and Warranty Claims........................................19
ARTICLE VII COVENANTS AND AGREEMENTS REGARDING BANKRUPTCY..............................19
7.01 Bankruptcy Actions...........................................................19
ARTICLE VIII PRE-CLOSING COVENANTS......................................................21
8.01 General......................................................................21
8.02 Operation of Business........................................................21
8.03 Books of Account.............................................................21
8.04 Access to Information........................................................21
8.05 Key Employees................................................................22
8.06 Consents.....................................................................22
8.07 Delivery of Schedules; Notice of Developments................................22
8.08 Related Agreements...........................................................22
8.09 Press Releases and Public Announcements......................................22
8.10 Enforcement of Rights with Respect to Employees, etc.........................22
8.11 Limitation on Solicitation, etc..............................................22
ARTICLE IX CLOSING CONDITIONS.........................................................23
9.01 Condition to Obligations of all Parties......................................23
9.02 Conditions to the Obligations of Sellers.....................................23
9.03 Conditions to the Obligations of Buyer.......................................23
ARTICLE X THE CLOSING................................................................24
10.01 Time and Place of Closing....................................................24
10.02 Instruments of Transfer, Etc.................................................24
10.03 Termination of Agreement.....................................................25
10.04 Effect of Termination........................................................26
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE XI POST-CLOSING COVENANTS.....................................................26
11.01 Expenses.....................................................................26
11.02 Further Assurances...........................................................26
11.03 Commissions and Fees.........................................................26
11.04 Sales, Transfer and Use Taxes................................................27
11.05 Accounts Receivable..........................................................27
11.06 Enforcement of Rights with Respect to Employees, etc.........................27
ARTICLE XII MISCELLANEOUS..............................................................27
12.01 Binding Effect...............................................................27
12.02 No Assignment................................................................27
12.03 Counterparts.................................................................28
12.04 Governing Law................................................................28
12.05 Venue........................................................................28
12.06 Notices......................................................................28
12.07 Amendment and Modification...................................................30
12.08 Waiver of Compliance.........................................................30
12.09 Interpretation...............................................................30
12.10 Incorporation of Exhibits and Schedules......................................30
12.11 Entire Agreement.............................................................30
12.12 Buyer's Assignee.............................................................30
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SCHEDULES
SECTION
SCHEDULE DESCRIPTION REFERENCE
1.01(a) Real Property Leases 1.01(a)
1.01(b) Furniture, Machinery & Equipment 1.01(b)
1.01(c) Assumed Contracts; Defaults 1.01(c)
1.01(f) Government Licenses, Permits and Authorizations 1.01(f)
1.01(h) Proprietary Rights 1.01(h)
1.01(k) Assumed Insurance Policies 1.01(k)
1.01(m) Budget 1.01(m)
1.02 Retained Assets 1.02
3.01 Organization and Good Standing; 3.01
3.01(b) Assets of Subsidiaries 3.01(b)
3.02 Noncontravention 3.02
3.03 Due Diligence Checklist 3.03
3.04 Operation of the Business in the Ordinary Course 3.04
3.06(a) Sellers' Contracts; Defaults 3.06(a)
3.06(b) Government Contracts; Defaults 3.06(b)
3.06(c) Cure Costs 3.06(c)
3.07 Licenses, Permits and Authorizations - Exceptions 3.07
3.08 Encumbrances on Assets 3.08
3.09(b) IP - Computer Programs 3.09(b)
3.09(c) Licensee Software 3.09(c)
3.09(d) IP - Litigation 3.09(d)
3.09(e) IP - Infringements 3.09(e)
3.09(f) IP - Encumbrances 3.09(f)
3.09(g) IP - Licenses 3.09(g)
3.09(h) IP - Royalty Fees 3.09(h)
3.10 Employee Benefit Plans 3.10
3.11 Litigation 3.11
3.12 Material Adverse Change 3.12
3.13 Compliance with Laws 3.13
3.13(b) List of US and ISO Standards 3.13(b)
3.14 Insurance 3.14
3.15 Real Property Leases 3.15
3.17 Environmental Matters 3.17
5.01 Employees 5.01(b)
8.06 Key Employees 8.06
11.03 Commissions and Fees 11.03
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EXHIBITS
SECTION
EXHIBIT DESCRIPTION REFERENCE
A Form of Assignment of Patent Rights 2.01
B Form of Assignment of Trademark Rights 2.01
C Form of Assignment of Copyright Rights 2.01
D Form of Xxxx of Sale 2.02
E Form of Assignment of Leases 2.03
F Form of Contract Assignment 2.04
G Form of Sale Order 7.01
H Form of 9.03(a) Certificate 9.03(a)
I Certain Definitions Recitals
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made as of February
12, 2005 among MTVP (First Virtual Investments), LLC, a Washington limited
liability company, Silicon Valley Bank, a California banking corporation, and
Xxxxxxxx & Xxxxxxxx LLP, a limited liability partnership (collectively "Buyer"),
First Virtual Communications, Inc., a Delaware corporation ("FVC"), and CUseeMe
Networks, Inc., a Delaware corporation ("CUseeMe"; and together with FVC
referred to herein collectively as "Sellers" and each individually as a
"Seller"). Each of Buyer, FVC and CUseeMe are sometimes individually referred to
herein as a "Party" or collectively as the "Parties".
SUMMARY OF TRANSACTION
Sellers are engaged in the business of providing integrated rich media
communication solutions to the enterprise, service provider and public sector
markets (the "Business"). CUseeMe is a wholly owned subsidiary of FVC.
On January 20, 2005 (the "Petition Date"), each Seller filed with the
United States Bankruptcy Court for the Northern District of California, San
Francisco Division (the "Bankruptcy Court") a voluntary petition (the "Chapter
11 Cases") for relief under chapter 11 of Title 11 of the United States Code
(the "Bankruptcy Code").
Each of Buyer is a secured lender to Sellers pursuant to certain written
agreements. Prior to the Closing, Buyer will form a separate entity ("Buyer's
Assignee") which will take ownership of the assets described below and assume
the Assumed Liabilities and become the Buyer for all purposes under this
Agreement other than the forgiveness of the secured debt owed by the Sellers to
Buyer.
Sellers wish to sell, and Buyer wishes to purchase, through forgiveness
of its secured debt and the secured debt of Huron Consulting Services LLC,
substantially all of the assets of Sellers on the conditions and pursuant to the
terms herein set forth. Capitalized terms used herein shall have the meanings
ascribed to them in this Agreement, including the Schedule of Definitions
annexed hereto as Exhibit I. To effect such transaction and in consideration of
the mutual covenants, representations, warranties and agreements hereinafter set
forth, and intending to be legally bound hereby, the Parties hereto agree as
follows:
ARTICLE I
SALE OF ASSETS AND TERMS OF PAYMENT
1.01 ASSETS BEING SOLD TO BUYER. Upon the terms and conditions set forth
in this Agreement and subject to the provisions of the Sale Order, Seller agrees
to sell and transfer to Buyer and Buyer agrees to purchase, at the Closing, all
of Sellers' assets used in or associated with the Business (the "Purchased
Assets"), as they shall exist on the Closing Date (as defined in Section 10.01
hereof), but excluding the Retained Assets (as defined in Section 1.02 hereof)
including without limitation the following assets:
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(a) REAL PROPERTY LEASES. To the extent that the Bankruptcy Court
has authorized Seller to assume and assign such leases to Buyer pursuant
to section 365 of the Bankruptcy Code, all of the right, title and
interest of Sellers in, to and under the leases (the "Assumed Real
Property Leases") covering Sellers' leased premises (the "Leased
Premises") listed on Schedule 1.01(a) hereto and all of the right, title
and interest of Sellers in and to all leasehold improvements in or on
the Leased Premises, which Schedule 1.01(a) shall be initially finalized
by Buyer on or before February 18, 2005, provided, however, that Buyer
may remove any lease from Schedule 1.01(a) at any time on or before the
date that is 30 days after Closing;
(b) FURNITURE, MACHINERY, AND EQUIPMENT. All the furniture,
machinery, transportation vehicles, equipment, tools, fixtures, molds
and dies and other fixed assets of Sellers located on the Leased
Premises, on the premises of vendors or elsewhere, substantially all of
which are listed on Schedule 1.01(b) hereto, except those items sold or
otherwise disposed of after the date hereof in the ordinary course of
business (subject to prior approval of Buyer);
(c) ASSUMED CONTRACTS. To the extent that that the Bankruptcy
Court has authorized Seller to assume and assign such contracts to Buyer
pursuant to section 365 of the Bankruptcy Code or otherwise to transfer
its rights under such contracts to Buyer pursuant to section 363 of the
Bankruptcy Code, all of the right, title and interest of Sellers in, to
and under those executory contracts, agreements, commitments and
understandings (including leases of personal property) which are
specifically listed on Schedule 1.01(c) hereto, which Schedule 1.01(c)
shall be initially finalized by Buyer on or before February 18, 2005,
provided, however, that Buyer may remove any contract from Schedule
1.01(c) at any time on or before the date that is 30 days after Closing
(the "Assumed Contracts");
(d) ACCOUNTS RECEIVABLE AND CUSTOMER CLAIMS. All of Sellers'
accounts receivable and notes receivable, subject to any trade credits
or offsets owed to customers of Sellers and all of Sellers' rights,
claims and causes of action against customers of the Business;
(e) BOOKS AND RECORDS. All of Sellers' books and records (the
"Records"), including all sales and credit records, advertising and
sales material, literature, customer and distributor lists, financial
records, personnel and payroll records to the extent transferable under
applicable law, tax, accounting and other books and records;
(f) GOVERNMENTAL LICENSES, PERMITS AND AUTHORIZATIONS. To the
extent assignable and transferable under their terms and applicable law,
all governmental licenses, permits and authorizations related to the
Business a complete list of which, to Sellers' Knowledge, is set forth
on Schedule 1.01(f) hereto (the "Assumed Licenses");
(g) DEPOSITS, CREDITS AND PREPAID EXPENSES. All of Sellers'
deposits, credits, prepaid expenses, other current assets and all
security deposits and similar assets relating to the Assigned Contracts
(as defined below);
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(h) PROPRIETARY RIGHTS. Any and all Seller Proprietary Rights and
any and all Seller Registered Proprietary Rights which, to the extent
they can be specified, are included on Schedule 1.01(h) hereto;
(i) INVENTORIES. All inventories of Sellers of any kind
including, but not limited to, finished goods, work in progress,
supplies and raw materials;
(j) INTANGIBLE ASSETS. The intangible assets of the Business of
Sellers as a going concern and good will thereof;
(k) INSURANCE POLICIES. Those insurance policies specified by
Buyer on Schedule 1.01(k) hereof (the "Assumed Insurance Policies"), to
the extent such insurance policies are assignable and transferable under
their terms and applicable law, which Schedule 1.01(k) shall be
initially finalized by Buyer on or before February 18, 2005, provided,
however, that Buyer may remove any insurance policy from Schedule
1.01(k) at any time on or before the date that is 30 days after Closing;
(l) RIGHTS WITH RESPECT TO EMPLOYEES, ETC. To the extent
assignable and transferable under applicable law, any and all of
Sellers' rights to enforce employee secrecy, non-disclosure,
non-competition agreements or covenants by current or former employees
and any other rights to protect the Seller Proprietary Rights and Seller
Registered Proprietary Rights and the Business;
(m) CASH AND BANK ACCOUNTS. Sellers' cash and cash equivalents as
of the Closing Date, including, but not limited to any bank deposit
accounts, provided, however, that Sellers may retain the total sum (the
"Retained Cash") in the amount of (i) the Carve-Out as defined in the
Interim Order Authorizing Debtor to Obtain Postpetition Financing
Secured by Liens on Property of the Estate or the Final Order
Authorizing Debtor to Obtain Postpetition Financing Secured by Liens on
Property of the Estate, whichever is then in effect (the "DIP Order"),
except that the time period in the Carve-Out following and defined by
reference to the delivery of a Default Notice in the DIP Order follows
and is defined instead under this Agreement by reference to the Closing
Date, plus (ii) accrued, unpaid administrative expenses under 11 U.S.C.
ss. 503(b) through and including the Closing Date (other than the
Carve-out, as modified under this Agreement) to the extent previously or
subsequently allowed, provided that such administrative expenses are
included in the budget attached as Schedule 1.01(m); and
(n) OTHER ASSETS. All other assets, properties and rights of
Sellers, of every kind and nature, owned or held by Sellers or in which
Sellers have an interest on the Closing Date, known or unknown, fixed or
unfixed, xxxxxx or inchoate, accrued, absolute, contingent or otherwise,
whether or not specifically referred to in this Agreement, where and as
they are held, other than the Retained Assets.
1.02 RETAINED ASSETS. Notwithstanding the foregoing, the Purchased
Assets shall not include any of the following (collectively the "Retained
Assets"):
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(a) any equity security of a Seller or any direct or indirect
subsidiary of a Seller;
(b) Sellers' rights, title and interests under this Agreement and
any agreements executed in connection herewith;
(c) any leases covering leased premises that are not Assumed Real
Property Leases;
(d) any executory contracts, agreements, commitments and
understandings (including leases of personal property) that are not
Assumed Contracts;
(e) the corporate seal, minute books, charter documents,
corporate stock record books and such other Records as pertain to the
organization, existence or share capitalization of Sellers and duplicate
copies of the Records as are necessary to enable Seller to file its tax
returns and reports as well as any other Records or materials relating
to Seller generally and not involving or relating to the Purchased
Assets;
(f) all personnel records and other Records that Sellers are
required by applicable law to retain in its possession, provided that
Buyer will receive copies of such Records (to the extent permitted by
applicable law);
(g) all "employee benefit plans" (as such term is defined by
Section 3(3) of the Employee Retirement Security Act of 1974, as amended
("ERISA")), "employee pension benefit plans" (as such term is defined by
Section 3(2) of ERISA) and all other pension, profit sharing or cash or
deferred compensation plans and trusts and assets thereof and any other
employee benefit plan or arrangement thereof, if any, maintained by
Sellers;
(h) any tax attributes of the Sellers, including without
limitation, any net operating loss carryovers and any right or claim for
a tax refund attributable to the operation or assets of the Sellers,
whether arising before or after the Closing;
(i) the Retained Cash;
(j) Any rights or actions for avoidance of transactions or
obligations, or recovery under Sections 541 through 550 of the
Bankruptcy Code (the "Avoidance Actions"), that may be asserted on
behalf of Sellers as debtors in possession or a trustee in the Chapter
11 Cases against a Person other than Buyer or its Affiliates, provided
that Sellers shall not assert Avoidance Actions or other claims against
a Person with whom Sellers had a business relationship with as of the
date immediately prior to the Closing Date; and
(k) those assets specifically listed on Schedule 1.02 hereto.
1.03 ASSUMED LIABILITIES. Buyer agrees to (A) assume, perform and
discharge all post-Closing liabilities due under the Assumed Real Property
Leases, the Assumed Contracts and Assumed Licenses and otherwise related to the
Purchased Assets arising on and after the Closing Date and (B) cure, at Buyer's
expense, any and all monetary defaults existing under each Assumed Real Property
Lease, Assumed License, Assumed Insurance Policy and Assumed Contract included
4
within the Purchased Assets (collectively the "Assigned Contracts") to the
extent required for Sellers to assume such Assigned Contracts in the Chapter 11
Cases, provided, however, that Buyer shall not be required to pay, and shall
have no liability for, any amounts to cure the Assigned Contracts in excess of
the total amount of cash and cash equivalents transferred to Buyer under Section
1.01(m) above (collectively, the foregoing shall be referred to as the "Assumed
Liabilities"); provided, however, any other provision of this Agreement
notwithstanding, that the Parties agree and acknowledge that MTVP (First Virtual
Investments), LLC, Silicon Valley Bank, Huron Consulting Services LLC and
Xxxxxxxx & Xxxxxxxx LLP shall not in any way or at any time assume or otherwise
be obligated for Assumed Liabilities, which shall only be assumed by Buyer's
Assignee, or otherwise be liable for any of the debts of Sellers, and Huron is
not a Buyer for the purposes of this or any other section or provision of this
Agreement.
On the Closing Date or, as regards a particular Assigned Contract, on
such later date as Buyer pays the monetary cure for such Assigned Contract,
Sellers shall (i) cure, at Sellers' sole expense, any and all non-monetary
defaults existing under each Purchased Asset, and Assigned Contract to the
extent required for Sellers to assume such Assigned Contracts in the Chapter 11
Cases, (ii) assume each Assigned Contract in the Chapter 11 Cases to the extent
necessary to transfer such Assigned Contracts to Buyer, and (iii) subject to
Buyer providing adequate assurance of performance to the counterparty thereto to
the extent required by the Bankruptcy Court, assign such Assigned Contracts to
Buyer pursuant to an order of the Bankruptcy Court (which may be the Sale Order
or one or more other orders that are no less favorable to Buyer than the
provisions of the Sale Order). Effective upon and concurrently with such
assignment(s), Buyer shall assume each Assigned Contract assigned to it pursuant
to this Section 1.03 by executing and delivering to Sellers the Assignment and
Assumption of Contracts attached hereto as Exhibit F. Buyer shall not assume any
liabilities or obligations of Sellers except those specifically assumed by Buyer
pursuant to the provisions of this Section 1.03.
1.04 RETAINED LIABILITIES. Buyer shall not assume any liabilities or
obligations of Sellers except those specifically assumed by Buyer pursuant to
the provisions of Section 1.03. Except for the Assumed Liabilities, Buyer shall
not assume and shall not be liable for any of the debts, obligations,
responsibilities (including, but not limited to, Sellers' responsibility for any
warranty or product liability claims (including claims for injury to person or
property) relating to the Business and arising from products sold or work
performed on or prior to the Closing Date), undertakings or liabilities, whether
matured or unmatured, fixed or contingent, secured or unsecured, accrued,
absolute or other of Sellers and all such liabilities will remain the
responsibility of the Sellers and shall be retained, paid, performed and
discharged by the Seller and the Sale Order shall so provide. The Assumed
Liabilities shall not include any of Sellers' accrued expenses or other
indebtedness or liabilities incurred, related to, or arising as a result of
operations conducted, actions taken or events occurring on or prior to the
Closing Date, including specifically, but without limitation, (i) federal, state
and local income tax liabilities, including, without limitation, all tax
liabilities associated with deferred income items and all franchise, gross
receipts, property, sales, use or value added taxes or any interest, additions
to tax or penalties thereon; (ii) bank and other short-term debt; (iii)
intercompany current liabilities; (iv) all environmental liabilities and claims
arising out of conditions existing or actions taken or not taken prior to the
Closing Date, (v) all litigations, arbitrations and other third party claims and
proceedings, (vi) all employee benefit liabilities and obligations (including
specifically, but without limitation, post-retirement medical benefits,
severance pay,
5
bonuses, incentive pay and deferred compensation, and accrued vacation and WARN
Act liability to the extent arising or accruing prior to the Closing Date), and
(vii) all unknown, contingent and other liabilities and obligations not
specifically assumed by Buyer pursuant to Section 1.03 above (collectively the
"Retained Liabilities").
1.05 PURCHASE PRICE. The purchase price of the Purchased Assets is the
amount which is equal to the aggregate sum of the outstanding principal
balances, accrued but unpaid interest, late fees, and any other charges and
fees, including but not limited to any administrative or attorneys' fees, due
and owing to the Buyer and Huron Consulting Services LLC on account of all of
the secured loans described immediately below (the "Secured Debt"). The Purchase
Price will be paid solely by the forgiveness of the Secured Debt as follows:
(a) MTVP (First Virtual Investments), LLC: all sums outstanding
pursuant to that certain Debtor In Possession Revolving Credit
Agreement and all amendments and related documents thereto, which
sums total approximately $780,000 as of the date of this
Agreement;
(b) Silicon Valley Bank: all sums outstanding pursuant to that
certain Loan And Security Agreement and Schedule To Loan And
Security Agreement dated April 3, 2003 and all amendments and
related documents thereto, which sums total approximately
$2,850,000 as of the date of this Agreement;
(c) Huron Consulting Services LLC: all sums outstanding and owed
to Huron Consulting Services LLC pursuant to that certain
Services, Payment & Security Agreement dated August 19, 2004 and
all amendments and related documents thereto, which sums total
approximately $500,000 as of the date of this Agreement; and
(d) Xxxxxxxx & Xxxxxxxx LLP: all sums outstanding and owed to
Xxxxxxxx & Xxxxxxxx LLP pursuant to that certain Services,
Payment & Security Agreement dated August 19, 2004 and all
amendments and related documents thereto, which sums total
approximately $1,060,000 as of the date of this Agreement.
1.06 ALLOCATION OF THE PURCHASE PRICE. Each of the parties agrees that
the Purchase Price shall be allocated as reasonably determined by Buyer (and
reasonably satisfactory to Sellers) prior to the Closing on a schedule to be
prepared by Buyer (and reasonably satisfactory to Sellers) in accordance with
Section 1060 of the Code. Each of the parties agrees to report this transaction
for all state and federal tax purposes and all accounting purposes in accordance
with such allocation. If any state or federal taxing authority challenges such
allocation, Buyer and Sellers shall cooperate in good faith in responding to
such challenge and shall each bear their own costs and expenses in any response.
The party receiving the notice of such challenge shall give prompt written
notice to the other party of any such challenge. Within thirty (30) calendar
days after receipt of such notice, Buyer shall have the option to elect to
assume the defense of any such challenge. Regardless of whether Buyer elects to
assume such defense, both Buyer and Sellers, respectively, shall be entitled to
approve the settlement, if any, that the other may desire to make with respect
to any such challenge,
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which approval shall not be unreasonably withheld. The foregoing allocation
shall not be determinative of the appropriate allocation of the Purchase Price
among any creditors of Sellers asserting the right to receive a portion of the
Purchase Price as a distribution under the Bankruptcy Code.
1.07 ABSOLUTE SALE. Subject to the Sale Order (as defined below) and to
the extent provided in the Sale Order, the Sellers' sale, conveyance, transfer
and delivery of the Purchased Assets to Buyer shall be free and clear of all
title defects, liabilities, obligations, liens, mortgages, security interests,
encumbrances, claims or similar adverse interests of any kind or character to
the extent provided in the Sale Order.
ARTICLE II
RELATED AGREEMENTS
Simultaneously with the Closing hereunder or, as regards a particular
Assigned Contract, on such later date as Buyer pays the monetary cure for such
Assigned Contract, the following agreements (the "Related Agreements") will be
executed and delivered:
2.01 ASSIGNMENTS OF PATENT, TRADEMARK, AND COPYRIGHT RIGHTS. Assignment
agreements (the "Intellectual Property Assignments") in the forms of Exhibit A,
Exhibit B, and Exhibit C hereto, pursuant to which Sellers will assign to Buyer,
all of Sellers' right, title and interest in, to and under all Seller
Proprietary Rights and Seller Registered Proprietary Rights included in the
Purchased Assets.
2.02 XXXX OF SALE. Xxxx of Sale, in the form of Exhibit D hereto,
transferring title to the Purchased Assets (other than the Real Property Leases)
to Buyer.
2.03 REAL PROPERTY LEASE ASSIGNMENTS. Assignments and/or Subleases of
the Leased Premises to Buyer in the form of Exhibit E hereto.
2.04 CONTRACT ASSIGNMENT. Assignment of the Assumed Contracts to Buyer
in the form of Exhibit F hereto.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF SELLERS
Each Seller, jointly and severally, represents and warrants to, and
covenants with, Buyer that as of the date hereof and as of the Closing Date:
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3.01 ORGANIZATION AND GOOD STANDING; ASSETS OF SUBSIDIARIES.
(a) Each Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has
the corporate power and authority to own, lease and operate its
properties and assets (including the Purchased Assets) and to conduct
its business as it is now being conducted. Each Seller is duly qualified
to do business in each jurisdiction in which it owns, leases or operates
property or otherwise conducts business, each of which is set forth on
Schedule 3.01 hereto. Except as set forth on Schedule 3.01 hereto, no
Seller has equity or similar investments, direct or indirect, in any
corporation, partnership, association, joint venture or other entity.
(b) Schedule 3.01(b) lists all material assets of the
subsidiaries of the Sellers, including, but not limited to, any
Proprietary Rights of such subsidiaries.
3.02 AUTHORIZATION; COMPLIANCE WITH OTHER INSTRUMENTS AND LAW. Subject
to the entry of the Sale Order, Sellers have full corporate power and authority
to enter into this Agreement, the Related Agreements and any other agreements
and documents to be executed and delivered by it at Closing as contemplated
hereby (collectively, the "Closing Documents"), to consummate the transactions
contemplated hereby and thereby and to perform its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and the
Closing Documents and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action on the
part of Sellers. This Agreement has been duly executed and delivered by each
Seller, and is a valid and binding obligation of each Seller enforceable in
accordance with its terms and the Closing Documents will, when executed and
delivered by each Seller at Closing, constitute valid and binding obligations of
each Seller enforceable in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws from time to time in effect which affect
creditor's rights generally and by legal and equitable limitations on the
availability of specific remedies.
Except as set forth on Schedule 3.02 and upon entry of the Sale Order,
the execution, delivery and performance of this Agreement and the Closing
Documents will not to the Sellers' Knowledge (i) conflict with or result in a
breach or violation of any provision of the Certificate of Incorporation or
By-Laws or any other applicable organizational documents of either Seller or of
any order, writ, injunction, judgment, decree, law, statute, rule or regulation
to which either Seller is a party or by which any Seller or the Purchased Assets
may be bound or affected; or (ii) result in a default (or give rise to any right
of termination, cancellation or acceleration) or result in the creation of any
lien, encumbrance, security agreement, charge, pledge, equity or other claim or
right of any person in or to the Purchased Assets under the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which any of the Sellers is a party or by which any
Seller or the Purchased Assets may be bound. All necessary authorizations of the
transactions contemplated by this Agreement required to be obtained by any
Seller from any Federal, state, local or foreign government or agency shall have
been obtained prior to the Closing, and any filings, notifications or
disclosures required by law or regulation of any such government or agency shall
have been made in such form as is acceptable as filed. Buyer shall cooperate
with Sellers with respect to the aforesaid
8
filings, notifications or disclosures to the extent necessary to obtain said
authorizations. Sellers will deliver to Buyer at the Closing true and complete
copies of all resolutions of their boards of directors by which the execution,
delivery and performance of this Agreement and the Closing Documents and the
consummation of the transactions contemplated hereby and thereby were
authorized, certified by the Secretary or Assistant Secretary of each Seller as
of the Closing Date.
3.03 DUE DILIGENCE. To the Sellers' Knowledge, the due diligence
materials provided by Sellers and their agents to Buyer in connection with the
Transactions contemplated by this Agreement do not contain any materially
incorrect information.
3.04 OPERATION OF THE BUSINESS IN THE ORDINARY COURSE. Since January 20,
2005, except as set forth on Schedule 3.04, except as to any foreign operations
and except by reason of the filing of Chapter 11 Cases, the Sellers' Business
has been operated in the ordinary course, except to the extent that Buyer has
otherwise agreed in writing or as is expressly contemplated by this Agreement.
3.05 TAX MATTERS. The Sellers will file any and all required tax returns
and pay any and all taxes due in connection with such returns on or prior to the
Closing Date.
3.06 MATERIAL CONTRACTS AND COMMITMENTS; CURE COSTS.
(a) Schedule 3.06(a) hereto constitutes a full and complete list,
as of the date hereof, of the possible Assigned Contracts. Except as
indicated on Schedule 1.01(c) or Schedule 3.06(a), the Sellers are not
in breach or violation, or in default under, any of the possible
Assigned Contracts, and upon entry of the Sale Order, the execution of
this Agreement and the consummation of the transactions contemplated
hereby will not constitute a default or breach under the possible
Assigned Contracts; and except as specifically indicated on Schedule
1.01(c) or Schedule 3.06(a), the execution of this Agreement and the
consummation of the transactions contemplated hereby will not give rise
to any consent requirement under any of the possible Assigned Contracts
for which consent has not already been obtained ("Required Consents").
All of the contracts listed on Schedule 1.01(c) and Schedule 3.06(a) are
in full force and effect and have not been modified or amended in any
material respect, except as set forth on Schedule 1.01(c) or Schedule
3.06(a). To Sellers' Knowledge, there exists no reason why any one of
the possible Assigned Contracts or Government Contracts cannot be
assumed and assigned.
(b) Schedule 3.06(b) contains a list of all Government Contracts
(as hereinafter defined) as of the date hereof, true, complete and
correct copies of which have been provided or made available to Buyer.
Except as set forth in Schedule 3.06(b) and except for the commencement
of the Chapter 11 Cases, to Sellers' Knowledge: (i) no Seller has taken
any action or omitted to take any action required under the terms of a
Government Contract which would cause a material breach or default under
such Government Contract or cause a Seller to be subject to
disqualification or removal from any capacity which a Seller now
occupies with respect to, or as a result of the Government Contracts,
either directly or as a subcontractor, consultant or otherwise, nor has
any Seller been disqualified or removed from any such capacity; (ii) no
Seller has received notice of any default under, or notice of any
violation of the terms of, any Government Contract, other than those
relating to the
9
commencement of the Chapter 11 Cases; (iii) no Seller is participating
in, or is the subject of, any investigation by an Governmental Authority
relating to the Government Contracts, xxxxxxxx, claims or business
practices that is reasonably likely to lead to criminal or material
civil penalties or the cancellation of any Government Contract, and no
such investigation has been threatened or is actively being considered;
(iv) no Seller is debarred or suspended under the Federal Acquisition
Regulations or other similar applicable federal or state laws or
regulations by any Governmental Authority from bidding for, or obtaining
any Government Contract for services provided by, Sellers, and no such
proceeding is pending or threatened; (v) each Seller has complied in all
material respects with all applicable requirements, if any, under the
Federal Truth in Negotiations Act (codified at 10 U.S.C. Sections 2306
and 2306a; 41 U.S.C. Section 254b) with respect to Government Contracts
for services provided by Sellers; (vi) no Government Contract is subject
to the U.S. Government Cost Accounting Standards, as set forth in 48
C.F.R. Part 30; and (vii) no Seller has engaged in any fraudulent act,
bribery or other act of dishonesty or made any misrepresentation of
material fact in connection with soliciting, negotiating, obtaining or
maintaining any Government Contract which could serve as the basis of
the termination of any such Government Contract. Except as set forth in
Schedule 3.06(b) and to the Sellers' Knowledge: (i) the operation of the
Purchased Assets has conformed, and is expected to conform, with the
delivery schedule requirements of each Government Contract except as
otherwise agreed by the applicable Governmental Authority; (ii) there
has not been, nor is there expected to be, any cost overrun liability or
spending in excess of any limitation of cost and fund provisions under
any cost reimbursement type Government Contracts; and (iii) no
Governmental Authority has, in writing or orally communicated, asserted
or filed any actual or potential material price reduction, adverse
contract adjustment, or disallowance of costs or claims in respect of
any Government Contract. Except as set forth in Schedule 3.06(b) and to
the Sellers' Knowledge no Seller has received, with respect to any
Government Contract, notice of: (i) any cure notice pursuant to
applicable contract default provisions or notice of default, however
termed; (ii) any contract termination, whether for default, convenience,
cancellation or a lack of funding or other reasons; (iii) any final
decision or unilateral modification assessing a price reduction, penalty
or claim for damages or other remedy, however termed; (iv) any claim,
based on assertions of defective pricing or asserted violations of
government cost accounting standards or cost principles; (v) any claim
for indemnification by an Governmental Authority; (vi) other than in the
ordinary course of business and in amounts less than $50,000, an
equitable adjustment of or claim concerning such Government Contract
submitted by or brought by any Seller or brought by any subcontractors
or suppliers against a Seller; or (vii) any disallowance of costs
(direct or indirect) or related claims, in each case referred to in one
of the preceding clauses of this Section 3.06.
(c) Schedule 3.06(c) lists the costs associated with curing
defaults under each possible Assigned Contract to the extent the default
must be cured under Bankruptcy Code Section 365(b).
3.07 LICENSES, PERMITS AND AUTHORIZATIONS. Except as set forth on
Schedule 3.07, each of the Sellers has all approvals, authorizations, consents,
licenses, franchises, orders, certificates and other permits of, and has made
all filings with, any governmental authority, whether foreign, Federal, state or
local, which are required for the ownership of their assets (including the
Purchased Assets)
10
or the conduct of Seller's Business as presently conducted. A complete list to
the Sellers' Knowledge of all such approvals, authorizations, consents,
licenses, franchises, orders, certificates, permits and filings is included on
Schedule 3.07 hereto.
3.08 TITLE TO PURCHASED ASSETS. Except as set forth on Schedule 3.08
hereto, Sellers have good and marketable legal title to the Purchased Assets
and, subject to entry of the Sale Order (as defined below) shall at the Closing
deliver to Buyer good and marketable legal title to the Purchased Assets free
and clear of all title defects, liabilities, obligations, liens, mortgages,
security interests, encumbrances, claims or similar adverse interests of any
kind or character to the extent provided in the Sale Order. All leases pursuant
to which Sellers lease any of the Purchased Assets, including the frequency and
amount of payments thereunder and duration of such leases are set forth on
Schedule 3.08 hereto. All such leases are valid and binding in accordance with
their respective terms.
3.09 PROPRIETARY RIGHTS.
(a) Schedule 1.01(h) sets forth a list of the Seller Proprietary
Rights and Seller Registered Proprietary Rights to the extent they can
be specified.
(b) Schedule 3.09(b) sets forth a list of computer programs
(excluding readily available, off-the-shelf personal computer software
packages) currently used or held for use by the Sellers.
(c) To the Sellers' Knowledge, the Seller Proprietary Rights and
Seller Registered Proprietary Rights are valid and enforceable and the
Sellers have the right to use all Seller Proprietary Rights and Sellers
Registered Proprietary Rights used or held for use in the Business
except computer software identified on Schedule 3.09(c) as computer
software not owned by the Sellers and used in the Business ("Licensee
Software"). With respect to Licensee Software, at Buyer's request and to
the extent permitted under the license applicable to such Licensee
Software, Sellers shall sublicense the Licensee Software to Buyer on the
same terms and conditions as Sellers' license applicable thereto.
(d) Except as set forth on Schedule 3.09(d), to the Sellers'
Knowledge there are no pending or threatened proceedings or litigation
against any Seller: (i) based upon the Seller Proprietary Rights or the
Seller Registered Proprietary Rights, or (ii) alleging that operation of
the Sellers' Business or any of the Purchased Assets infringe or
misappropriate the patents, trademarks, trade names, copyrights, trade
secrets or other intellectual property rights of others.
(d) Except as set forth on Schedule 3.09(e), (i) there are no
infringements, misappropriations or other violations by others of valid,
enforceable items of Seller Proprietary Rights and Seller Registered
Proprietary Rights, and (ii) use of the Seller Proprietary Rights and
Seller Registered Proprietary Rights in the operation of the Sellers'
Business as currently conducted do not infringe, misappropriate or
violate the patents, trademarks, trade names, copyrights, trade secrets
or other intellectual property rights of others.
11
(f) Except as set forth on Schedule 3.09(f) and upon entry of the
Sale Order, the Sellers have good and marketable title to the Seller
Proprietary Rights and Seller Registered Proprietary Rights, free and
clear of all encumbrances.
(g) Except as set forth on Schedule 3.09(g), the Sellers have not
granted any license with respect to any of the Seller Proprietary Rights
or Seller Registered Proprietary Rights to any person.
(h) Except as set forth on Schedule 3.09(h), none of the Seller
Proprietary Rights and Seller Registered Proprietary Rights requires
payment of any royalty or fee, however classified, to any person to be
used in connection with the Sellers' Business as presently used.
3.10 EMPLOYEE BENEFIT PLANS; LABOR MATTERS.
(a) Except as set forth on Schedule 3.10 hereto, no Seller
maintains, administers or otherwise contributes to any "employee benefit
plan," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), whether or not such plan is
subject to any of the provisions of ERISA, which covers any employee or
beneficiary of any employee, whether active or retired (any such plan
being herein referred to as an "Employee Plan"). None of such Employee
Plans is intended to be qualified under Section 401 of the Code. No
Seller has any commitment to create any additional Employee Plans.
(b) True and complete copies of each Employee Plan, including all
amendments thereto and related trust or other funding agreements and the
latest financial statements thereof, have been heretofore delivered to
Buyer, together with (i) a true and complete copy of the three most
recent annual reports (if required by law) for each such plan including
any and all schedules, opinions and attachments thereto prepared in
connection with any such reports, and (ii) a copy of the most recent
summary plan description and summary of material modifications of each
such plan. None of Seller, any Employee Plan or any "party in interest",
as defined in section 3(14) of ERISA, has engaged in a "prohibited
transaction", as defined in section 406 of ERISA, which could subject
any of them or Buyer to liability under section 409 or 502(i) of ERISA.
(c) Each Seller and each fiduciary for each of the Employee
Plans, is in compliance with the terms of the Employee Plans and with
the requirements of any and all laws, statutes, orders, decrees, rules
and regulations, including but not limited to ERISA, applicable to each
such plan. No Seller has failed to make any contribution to, or to pay
any amount due and owing, as required by applicable law or by the terms
of any Employee Plan as of the last day of the most recent fiscal year
of each of such plans ended prior to the Closing Date.
(d) To Sellers' Knowledge, there is no pending or threatened
legal action, proceedings or investigations against any Seller or any
Employee Plan with respect to any
12
such plan, other than routine claims for benefits, which could result in
liability to any such plan, or to any Seller, and there is no basis for
any such legal action or proceeding.
(e) Except as set forth on Schedule 3.10, (i) each Seller is in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and
is not engaged in any unfair labor practice; (ii) there is no unfair
labor practice complaint against any Seller pending before the National
Labor Relations Board or any other tribunal; (iii) to Sellers' Knowledge
there is no labor strike, dispute, slowdown or stoppage actually pending
or threatened against or affecting Seller; (iv) no Seller has received
notice that any representation or petition respecting any of its
employees has been filed with the National Labor Relations Board or
comparable foreign regulatory authority; (v) no grievance or any
arbitration proceeding arising out of or under any collective bargaining
agreements is pending against any Seller; (vi) no Seller has experienced
any strike or work stoppage or other industrial dispute involving its
employees in the past five years; and (vii) to Sellers' Knowledge no
claims, charges, investigations, audits, arbitrations, administrative
proceedings or lawsuits are pending or threatened concerning any alleged
violation of any Law referenced in subparagraph (i) above.
3.11 LITIGATION AND OTHER CLAIMS. To the Sellers' Knowledge, there are
no actions, suits, arbitration proceedings, claims, administrative charges,
investigations, audits or other proceedings related to the Sellers or relating
to any of the Purchased Assets pending or threatened before any foreign,
federal, state, municipal or other court, department, commission, arbitration
panel, board, bureau, agency, body or instrumentality against any Seller or
affecting any of the Sellers' property or assets (including the Purchased
Assets) at law or in equity except as set forth on Schedule 3.11. No Seller is a
party to or subject to the provisions of any order, writ, injunction, decree or
judgment of any court or foreign, federal, state, municipal or other
governmental or administrative body, department, commission, board, bureau, any
securities exchange or other agency or instrumentality in connection with the
ongoing operations of the Sellers except as set forth on Schedule 3.11. No
Seller is engaged in any arbitration nor has either Seller submitted any
disputed matter to an arbitrator in connection with the ongoing operations of
the Sellers except as set forth on Schedule 3.11.
3.12 [INTENTIONALLY OMITTED]
3.13 COMPLIANCE WITH LAWS. Except as set forth on Schedule 3.13 hereof:
(a) The Sellers' Business is being conducted in material
compliance with all applicable Laws.
(b) The Sellers comply in all material respects with the
standards applicable to the Sellers' Business established by the
International Organization for Standardization (ISO). Schedule 3.13(b)
sets forth all United States and ISO standards with which the Sellers
comply and includes copies of all certificates received by any Seller
regarding its compliance with any United States or ISO standards.
13
3.14 INSURANCE. The Sellers maintain reasonable and customary insurance
insuring the Purchased Assets and the operations of their Business. All policies
of insurance of any kind maintained, owned or held by the Sellers are set forth
on Schedule 3.14 hereto and such policies are in full force and effect, all
premiums with respect thereto covering all periods up to and including the
Closing Date have been paid other than premiums for which the Sellers are
prohibited from making payment by the Bankruptcy Code or the Bankruptcy Court,
and to Sellers' Knowledge no notice of cancellation or termination has been
received with respect to any such policy which has not been replaced on
substantially similar terms prior to the date of such cancellation or
termination.
3.15 REAL PROPERTY LEASES. Except as set forth on Schedule 3.15, all
possible Real Property Leases are valid and binding upon the lessor and are in
full force and effect. Except as set forth on Schedule 3.15 and upon entry of
the Sale Order, there are no existing defaults by either Seller under the
possible Real Property Leases and no event has occurred which (whether with or
without notice, lapse of time, or both) would constitute a default thereunder by
the Sellers. Sellers have delivered to Buyer true and complete copies of the
possible Real Property Leases.
3.16 CONDITION OF PURCHASED ASSETS. The Purchased Assets are in good
repair and working condition, normal wear and tear excepted, are suited for the
uses intended, and are in conformity with all applicable laws, ordinances, rules
and regulations.
3.17 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 3.17 hereto:
(a) Each Seller is in compliance with all environmental laws,
regulations, permits and orders applicable to it, and with all laws,
regulations, permits and orders governing or relating to asbestos
removal or abatement. No Seller has received nor is the subject of any
Environmental Claim (as hereinafter defined) with respect to its
business.
(b) Except for temporary storage on premises pending arrangements
for removal, no Seller has transported, stored, treated, disposed of or
released, nor has it allowed or arranged for any third parties not a
party to this Agreement, to transport, store, treat, dispose of or
release, Hazardous Substances (as hereinafter defined) or other waste to
or at any location other than a site lawfully permitted to receive such
Hazardous Substances or other waste for such purposes; no Seller has
performed, arranged for or allowed by any method or procedure such
transportation, storage, treatment, disposal or release in contravention
of any laws or regulations. No Seller has disposed, treated, stored,
released or allowed or arranged for any third parties to dispose, treat,
store or release Hazardous Substances or other waste upon any property
or facility of the Sellers, whether owned or leased.
(c) There has not occurred, nor is there presently occurring, a
Release (as hereinafter defined), treatment, storage or disposal of any
Hazardous Substance or other waste on, into, above or beneath the
surface of any parcel of real property in which any Seller has or has
had an ownership interest or any leasehold interest or which any Seller
manages or operates or has managed or operated. For purposes of this
Section the term "Release" shall mean releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing into the environment.
14
(d) No Seller has transported or disposed of, nor has it allowed
or arranged for any third parties to transport or dispose of, any
Hazardous Substance or other waste to or at a site, nor does or has any
property or facility owned, leased, managed or operated by any Seller,
constitute or constituted a site, which, pursuant to the U.S.
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA") or any similar state law, (A) has been
placed on the National Priorities List or its state equivalent or
otherwise been designated as an environmental or hazardous waste
clean-up site, or (B) the Environmental Protection Agency or the
relevant state agency has proposed or is proposing to place on the
National Priorities List or its state equivalent or otherwise designate
as an environmental or hazardous waste clean-up site. To Sellers'
Knowledge, no Seller has received a notice or notice of any facts which
could give rise to any notice that any Seller is a potentially
responsible party for a federal or state environmental cleanup site or
for corrective action under CERCLA or any other applicable law or
regulation or of any other Environmental Claim. No Seller has submitted
nor was required to submit any notice pursuant to Section 103(c) of
CERCLA. To Sellers' Knowledge, no Seller has received any written or
oral request for information in connection with any federal or state
environmental cleanup site nor has it undertaken (or been requested to
undertake) any response or remedial actions or cleanup actions of any
kind at the request of any federal, state or local governmental entity,
or at the request of any other person or entity.
(e) To Sellers' Knowledge, there are no laws, regulations,
ordinances, licenses, permits or orders relating to environmental or
worker safety matters requiring any work, repairs, construction or
capital expenditures with respect to the assets or properties of any
Seller or otherwise required to be performed by any Seller with respect
to any properties or facilities owned, leased, managed or operated by
any Seller.
(f) Schedule 3.17 identifies (A) all environmental audits,
assessments or occupational health studies undertaken by any Seller or
its agents or by any governmental agencies with respect to the business
or properties of any Seller; (B) the results of any groundwater, soil,
air or asbestos monitoring undertaken with respect to any real property
owned or leased by any Seller; (C) all written communications of any
Seller with environmental agencies; and (D) all citations issued with
respect to any Seller under the Occupational Safety and Health Act (29
U.S.C. Sections 651 et seq.).
(g) For the purposes of this Agreement, "Environmental Claim"
shall mean any demand, claim, governmental notice or threat of
litigation or the actual institution of any action, suit or proceeding
at any time by a Person or entity which asserts that an Environmental
Condition constitutes a violation of or otherwise may give rise to any
liability or obligation under, any statute, ordinance, regulation, or
other governmental requirement or the common law, including, any such
statute, ordinance, regulation, or other governmental requirement
relating to the emission, discharge, or release of any Hazardous
Substance into the environment or the generation, treatment, storage,
transportation, or disposal of any Hazardous Substance. "Environmental
Condition" shall mean the presence on the Closing Date, or the
occurrence on or at any time prior to the Closing Date of any storage,
treatment, disposal or Release, or the presence on the Closing Date of
any condition or circumstances which thereafter causes or gives rise to
any storage, treatment, disposal or Release, whether
15
discovered or undiscovered on the Closing Date, in surface water, ground
water, drinking water supply, land surface, subsurface strata or ambient
air or any other location, of any pollutant, contaminant, industrial
solid waste or Hazardous Substance, arising out of or otherwise related
to (i) the operations or other activities of any Seller, or of any
predecessor in interest or line of business of any Seller, conducted or
undertaken prior to the Closing Date or (ii) any property, facility
owned, leased, managed or operated by any Seller. "Hazardous Substance"
shall mean any substance defined in the manner set forth in Section
101(14) of the U.S. Comprehensive Environment Response, Compensation and
Liability Act of 1980, as amended, and shall include any additional
substances designated under Section 102(a) thereof or any other
substance which is or contains asbestos in any form, urea formaldehyde
foam insulation, methane, petroleum, gasoline, diesel fuel or another
petroleum hydrocarbon product, transformers or other equipment which
contain dielectric fluid containing levels of polychlorinated biphenys
in excess of 50 parts per million, or any other chemical material or
substance which is regulated as toxic or hazardous or exposure to which
is prohibited, limited, or regulated by foreign, federal, state, county,
regional, local or other governmental authority or which, even if not so
regulated, may or could pose a hazard to the health or safety of the
occupants of any property or facility or the owners or occupants of any
property or facility adjacent thereto.
3.18 FULL DISCLOSURE. To Sellers' Knowledge, no representation or
warranty by Sellers herein (including the Schedules hereto) or in any
certificate furnished by or on behalf of Sellers to Buyer in connection
herewith, contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary in order to make the
statements herein or therein, in the light of the circumstances under which they
were made, not misleading.
3.19 REPRESENTATIONS AND WARRANTIES TRUE AT THE CLOSING. The
representations and warranties of Sellers herein and in any schedule attached
hereto shall be true and complete at the Closing Date with the same effect as
though made at and as of such time.
ARTICLE IV
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF BUYER
Buyer hereby represents and warrants to, and covenants with, Sellers
that:
4.01 ORGANIZATION AND GOOD STANDING. Each of Buyer represents that as to
itself, it is a duly incorporated or otherwise formed entity under the laws of
its respective state of formation and has all requisite power and authority to
own, lease and operate its properties and to carry on its business as proposed
to be conducted.
4.02 DUE AUTHORIZATION; NONCONTRAVENTION. Each of Buyer represents as to
itself that it has full corporate power and authority to enter into this
Agreement, the Related Agreements and any other agreements and documents to be
executed and delivered by it at Closing as contemplated hereby (collectively,
the "Closing Documents"), to consummate the transactions contemplated hereby and
thereby and to perform its obligations hereunder and thereunder. The execution,
delivery
16
and performance of this Agreement, the Related Agreements and the Closing
Documents and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Buyer. This Agreement has been duly executed and delivered by Buyer, and is a
valid and binding obligation of Buyer enforceable in accordance with its terms
and the Related Agreements and the Closing Documents will, when executed and
delivered by Buyer at Closing, constitute valid and binding obligations of Buyer
enforceable in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws from time to time in effect which affect creditor's rights
generally and by legal and equitable limitations on the availability of specific
remedies.
The execution, delivery and performance of this Agreement, the Related
Agreements and the Closing Documents will not (i) conflict with or result in a
breach or violation of any provision of the organizational documents of Buyer,
or of any order, writ, injunction, judgment, decree, law, statute, rule or
regulation to which Buyer is a party or by which Buyer may be bound or affected;
or (ii) result in a default (or give rise to any right of termination,
cancellation or acceleration) or result in the creation of any lien,
encumbrance, security agreement, charge, pledge, equity or other claim or right
of any person under the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, agreement or other instrument or obligation to
which Buyer is a party or by which Buyer may be bound. All necessary
authorizations of the transactions contemplated by this Agreement and the
Related Agreements required to be obtained by Buyer from any federal, state,
local or foreign government or agency shall have been obtained prior to the
Closing, and any filings, notifications or disclosures required by law or
regulation of any such government or agency shall have been made in such form as
is acceptable as filed. Sellers shall cooperate with Buyer with respect to the
aforesaid filings, notifications or disclosures to the extent necessary to
obtain said authorizations. Buyer will deliver to Sellers at the Closing true
and complete copies of all resolutions of its board of directors by which the
execution, delivery and performance of this Agreement, the Related Agreements
and the Closing Documents and the consummation of the transactions contemplated
hereby and thereby were authorized, certified by the Secretary or Assistant
Secretary of Buyer as of the Closing Date.
ARTICLE V
EMPLOYEES
5.01 EMPLOYEES AND EMPLOYEE BENEFITS.
(a) Buyer shall have no requirement to offer employment to any of
the employees of Sellers. Any offer Buyer determines to make shall be
for employment at-will by Buyer as new employees of Buyer (subject to
any applicable probation period not prohibited by law) to occupy
positions designated by Buyer and pursuant to the terms and conditions
determined by Buyer in its sole discretion, unless Buyer otherwise
agrees in writing with any such employee.
(b) Schedule 5.01 is a true and complete list of the names and
positions of those of Sellers' current and furloughed employees who work
in positions related to the Business (the "Employees"). At Buyer's
request, Sellers shall deliver, with respect to any Employee designated
by Buyer, the following compensation information for fiscal year 2004
and as of
17
the date of Buyer's request: (i) annual base salary; (ii) annual bonus;
(iii) commissions; (iv) perquisites; (v) benefits; (vi) severance; and
(vii) all other material items of compensation. Buyer may engage in
negotiations to employ any Employee on the condition that any such
employment not begin until on or after the Closing Date.
(c) Sellers shall make available to Buyer to the fullest extent
permitted by law, all information and materials reasonably requested by
Buyer from the personnel files of each of the Employees who shall have
elected to accept employment with Purchaser ("Applicable Employees").
(d) Seller shall remain responsible for the payment of all
benefits that accrue under each of such Seller's or its Affiliates'
compensation plans, "employee benefit plans" (as defined in Section 3(3)
of ERISA) and stock plans (collectively "Benefit Plans"). Buyer shall
not at any time assume any liability under any of the Sellers' Benefit
Plans for the payment of any benefits to any active or any terminated,
vested or retired participants (or any of their beneficiaries) in any of
the Benefit Plans. Buyer assumes no obligations to continue or assume
any Benefit Plan or liabilities of the Sellers under any Benefit Plans.
(e) With respect to any Applicable Employee (and any dependent or
beneficiary of any such Applicable Employee), Sellers shall retain all
liabilities and obligations arising under any group life, accident,
medical, dental or disability plan or similar arrangement (whether or
not insured) and any other "employee welfare benefit plan" (as defined
in Section 3(1) of ERISA) maintained for the benefit of Sellers'
employees and their dependents and other beneficiaries under each such
plan or similar arrangement, and such liabilities and obligations shall
constitute Retained Liabilities. Buyer shall be responsible only for
liabilities and obligations with respect to claims incurred by any
Applicable Employee (and any dependent or beneficiary of any such
Applicable Employee) on or after the later of the Closing Date and the
date upon which such Applicable Employee is hired by Buyer which are
covered under any life, accident, medical, dental or disability plan or
similar arrangement (whether or not insured) established or made
available to Buyer for the benefit of Applicable Employees and their
dependents and beneficiaries after the Closing Date. For this purpose
claims under any medical, dental, vision, or prescription drug plan, a
claim generally will be deemed to be incurred on the date that the
service giving rise to such claim is performed and not when such claim
is made.
(f) Any former or current employees of Sellers hired by Buyer may
share and utilize any Proprietary Rights, information, inventions or
know how derived from their work for Sellers, including without
limitation customer lists and employee lists, and Buyer may use any such
shared Proprietary Rights, information, inventions or know how. Sellers
waive any claims against such employees and Buyer based on such sharing
or use including, without limitation, any claims arising under contract,
statute or common law.
5.02 THIRD PARTIES. The covenants of Buyer and Sellers in this Article V
are not intended to create any right in any of Sellers' current or former
employees or his or her heirs, executors, beneficiaries or personal
representatives.
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ARTICLE VI
WORKERS COMPENSATION, PRODUCT
LIABILITY AND WARRANTY RESPONSIBILITY
6.01 WORKERS COMPENSATION. Sellers will retain responsibility for all
workers' compensation claims of employees of Sellers other than Applicable
Employees and will retain responsibility for workers' compensation claims by
Applicable Employees pending as of the Closing Date or arising as a result of
events occurring or conditions caused on or prior to the Closing Date. Buyer
will be responsible for workers' compensation claims by Applicable Employees
filed after the Closing Date and arising solely as a result of events occurring
or conditions caused solely after the later of the Closing Date and the date
upon which such Applicable Employee is hired by Buyer.
6.02 PRODUCT LIABILITY AND WARRANTY CLAIMS. Buyer shall discharge all
product liability claims (including claims for injury to person or property),
warranty claims and litigation relating to the Business conducted by Buyer and
arising from products sold and work performed after the Closing Date; Sellers
shall retain responsibility for such claims and litigation relating to products
sold and work performed on or prior to the Closing Date.
ARTICLE VII
COVENANTS AND AGREEMENTS REGARDING BANKRUPTCY
7.01 BANKRUPTCY ACTIONS.
(a) COOPERATION; EFFORTS. Each of Sellers and Buyer shall use its
best reasonable efforts to cooperate, assist and consult with each other
to procure the entry of the Sale Procedures Order and a sale order (the
"Sale Order," substantially in the form attached as Exhibit G, and
together with the Sale Procedures Order, the "363/365 Orders") as
promptly hereafter as practicable. Without limiting the generality of
the foregoing, Sellers each (i) shall comply with all requirements under
the Bankruptcy Code and Federal Rules of Bankruptcy Procedure and the
Local Rules of the United States Bankruptcy Court for the Northern
District of California and any applicable guidelines and procedures
(collectively, the "Bankruptcy Rules") in connection with obtaining the
363/365 Orders, (ii) agree to proceed with their Chapter 11 Cases
pursuant to and in accordance with the terms and provisions contemplated
by the 363/365 Orders, in each case after the order has been entered by
the Bankruptcy Court and (iii) comply or cause the compliance with the
notice requirements of the 363/365 Orders, in each case after the order
has been entered by the Bankruptcy Court, any other applicable order of
the Bankruptcy Court as it relates to the Chapter 11 Cases, the
Bankruptcy Rules (including, without limitation, Rules 2002, 6004, 6006
and 9014 of the Federal Rules of Bankruptcy Procedure) and any
applicable local rules of the Bankruptcy Court with respect to the
transactions contemplated by this Agreement. Sellers further agree to
give notice of any proceeding in the Chapter 11 Cases to any Person
specified by Buyer in writing. In the event that the 363/365 Orders or
any other orders of the Bankruptcy Court relating to this Agreement
shall be appealed by any party (or a petition for certiorari or motion
for reconsideration, amendment, clarification, modification, vacation,
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stay, rehearing or reargument shall be filed with respect to any such
order), each of Sellers and Buyer will cooperate in taking such steps
diligently to defend against such appeal, petition or motion and each of
Sellers and Buyer and Buyer shall use its best reasonable efforts to
obtain an expedited resolution of any such appeal, petition or motion.
Buyer must timely provide to Sellers, or to the Bankruptcy Court upon
Sellers' request, any information necessary or prudent to obtain
Bankruptcy Court approval of the Sale Order, including, but not limited
to, the 363/365 Orders, and Sellers agree that Sellers shall cooperate
with Buyer to avoid the unnecessary disclosure of any of Buyer's
confidential proprietary information. Buyer agrees that Buyer shall
cooperate with Sellers to present such information as is necessary or
prudent in connection with the Bankruptcy Court's consideration or
approval of the Sale Order, including, but not limited to, the 363/365
Orders, and Sellers agree that Sellers shall cooperate with Buyer to
avoid the unnecessary disclosure of any of Buyer's confidential
proprietary information. Buyer shall not make any filing in the
Bankruptcy Court with respect to the 363/365 Orders (or otherwise take
any position in the Bankruptcy Court proceedings with respect thereto)
without the express written consent of Sellers, which consent may not be
unreasonably withheld, conditioned or delayed, or otherwise that would
be reasonably likely to result in the failure of the transactions
contemplated hereby. Notwithstanding anything to the contrary herein,
however, nothing in this Agreement shall be deemed to prohibit or
otherwise restrain Buyer from making any filing in the Bankruptcy Court
to challenge or object to the entry of an order by the Bankruptcy Court
approving the entry by one or more Sellers into an Alternate Transaction
(as hereinafter defined); provided that the Sellers do not acknowledge
and reserve all rights to challenge Buyer's standing to make any filing
in the Bankruptcy Court. Notwithstanding anything to the contrary
contained herein, the Sellers shall not be required to act in a manner
inconsistent with their fiduciary duties under (a) applicable Law,
arising from their status as corporations organized under Delaware Law,
or (b) the Bankruptcy Code, arising from their status as a debtor in
possession.
(b) BREAK-UP FEE. Each of Sellers hereby agrees, in the event
that a Bankruptcy Court enters an order that becomes final and
non-appealable approving a sale or restructuring transaction involving
the Sellers' Business or any part thereof (a "Transaction") with a party
other than Buyer (an "Alternate Transaction"), Sellers shall pay to
Buyer a cash break-up fee (the "Break-Up Fee") in the amount of three
percent (3%) of the dollar amount of the Purchase Price. These amounts
are intended to compensate Buyer for the time and expense dedicated to
this transaction and the value added by Buyer in (i) establishing a bid
standard or minimum for other bidders, (ii) placing the Sellers' estate
property in a sales configuration mode attracting other bidders to the
auction and (iii) for serving, by its name and its expressed interest,
as a catalyst for other potential or actual bidders. Subject to entry of
the final Sale Procedure Order, the Break-Up Fee shall be deemed a claim
and a cost of sale of the Alternate Transaction and shall be payable
from the cash proceeds of the Alternate Transaction, if any, before any
claim of a lien holder or other creditor of the Sellers, at such time as
the order of the Bankruptcy Court approving an Alternate Transaction
becomes final and non-appealable. The Sellers agree to support inclusion
of the Break-Up Fee provided by this subparagraph in the final Sale
Procedures Order .
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(c) NOTIFICATION. Sellers shall promptly provide written
notification to Buyer of the fact of any submissions, proposals, offers
or inquiries regarding an Alternate Transaction.
(d) ASSIGNMENT OF RIGHTS. If, in connection with the auction or
sale referred to in the Sale Procedures Order, any of Sellers or any of
their Affiliates enter into confidentiality or similar agreements with
any Person, such Sellers shall assign all rights under those agreements
to the extent relating to the Sellers' Business to Buyer at the Closing.
ARTICLE VIII
PRE-CLOSING COVENANTS
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing.
8.01 GENERAL. Each of the Parties will use its reasonable efforts to
take all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including supplementing the Schedules hereto as facts become known to the
parties and satisfaction, but not waiver, of the closing conditions set forth in
Article IX below). Notwithstanding the foregoing, the supplementing of the
Schedules will not relieve Sellers of the obligations with respect to the
representations and warranties made herein, subject to the Schedules as
originally prepared, nor will it relieve Sellers of their obligations to
republish the representations and warranties of Sellers herein at the Closing.
8.02 OPERATION OF BUSINESS. Except as contemplated by this Agreement,
during the period from the date of this Agreement to the Closing, each member of
the Seller shall (i) maintain its corporate existence in good standing, (ii)
conduct the Business in the ordinary course of business as contemplated in the
budget(s) approved in the Chapter 11 Cases, except as otherwise provided in
Section 3.04, (iii) decline to accept prepayments of sums due to Sellers under
any contracts, provided however, that Seller may collect payments as they
normally come due even if such payments constitute payments for obligations to
be performed in the future; (iv) maintain each Benefit Plan, (v) maintain the
property, plant and equipment included in the Purchased Assets in the ordinary
course of business as contemplated in the budget(s) approved in the Chapter 11
Cases, and (vi) refrain from offering to any customer any discount on or
incentive with respect to any product or service (collectively, the
"Incentives") in excess of the discount or incentive being offered with respect
to such product or service as of the date of this Agreement.
8.03 BOOKS OF ACCOUNT. The Sellers shall, in respect of the Sellers'
Business and the Purchased Assets, maintain its books and records of account in
the usual, regular and ordinary manner, consistent with past practices.
8.04 ACCESS TO INFORMATION. Sellers agree to permit Buyer and
representatives of Buyer (including, without limitation, Buyer's legal counsel
and accountants) access during normal business hours to Sellers' premises and
books and records, following receipt of reasonable notice.
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8.05 KEY EMPLOYEES. Sellers shall use its reasonable efforts to assist
Buyer in procuring the employment immediately following the Closing of the
employees identified on Schedule 8.06 (the "Key Employees") pursuant to
employment agreements reasonably acceptable to Buyer; provided that Buyer
acknowledges that such employment decisions will be made by such employees.
8.06 CONSENTS. The Parties will use their commercially reasonable
efforts (including the giving of required notices) to promptly obtain consents
(including any Required Consents and any required approvals or permit transfers)
of all Persons and governmental authorities necessary for the consummation of
the transactions contemplated by this Agreement and the Related Agreements.
8.07 DELIVERY OF SCHEDULES; NOTICE OF DEVELOPMENTS. (a) The Sellers
shall deliver to Buyer as set forth in Section 12.06, a proposed set of
Schedules as set forth in this Agreement no later than February 12, 2005. Buyer
shall deliver to Sellers' counsel the Schedules set forth in this Agreement no
later than 5:00 p.m. (Pacific Standard Time) on February 18, 2005 except as
otherwise provided in Section 1.01. (b) From the date hereof until the Closing
Date, the Parties shall promptly notify each other in writing and supply full
details of (i) any facts indicating that any representation or warranty was not
true and correct when made, and (ii) any matter arising after the date hereof
which, if existing or occurring at the date of this Agreement would have been
required to be set forth or described in the Schedules hereto.
8.08 RELATED AGREEMENTS. The Parties hereto agree that at Closing or, as
regards a particular Assigned Contract, on such later date as Buyer pays the
monetary cure for such Assigned Contract, they will execute and deliver the
Related Agreements to which they are a Party.
8.09 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing, without the prior written approval of the
other Parties, and Seller shall not issue any press release or make any public
announcement relating to the subject matter of this Agreement following the
Closing without the prior written approval of Buyer; provided, however, that any
Party may make any public disclosure it believes in good faith is (a) required
by applicable law or any listing or trading agreement concerning its
publicly-traded securities or (b) permitted or required to be filed with the
Bankruptcy Court or otherwise disclosed by this Agreement or the Sale Procedures
Order (in the case of either (a) or (b) above, the disclosing Party will, prior
to making any such disclosure, consult with the other Party regarding such
disclosure).
8.10 ENFORCEMENT OF RIGHTS WITH RESPECT TO EMPLOYEES, ETC. Sellers shall
enforce any employee secrecy, non-disclosure, non-competition agreements or
covenants by current or former employees and any other rights to protect the
Seller Proprietary Rights, the Seller Registered Proprietary Rights and the
Business.
8.11 LIMITATION ON SOLICITATION, ETC. Until the Closing and except as
provided in Section 8.05, Buyer shall not, and Buyer shall cause each of its
subsidiaries and affiliates not to, directly or indirectly, actively solicit for
employment any individual while employed by Sellers; provided, however, general
advertisements and other forms of general solicitations for employment shall not
be deemed a violation of this provision, provided that if this Agreement is
terminated for any reason other than a default by Buyer, this provision shall no
longer apply after the date of that termination.
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ARTICLE IX
CLOSING CONDITIONS
9.01 CONDITION TO OBLIGATIONS OF ALL PARTIES. The respective obligations
of each Party to effect the transactions contemplated hereby shall be subject to
the fulfillment at or prior to the Closing Date of the following condition:
(a) NO ORDER, DECREE OR INJUNCTION. Neither Sellers nor Buyer
shall be subject to any order, decree or injunction of a court of
competent jurisdiction or governmental agency and no statute, rule or
regulation shall be enacted or issued which (i) prevents or delays any
of the transactions contemplated by this Agreement, or (ii) would impose
any limitation on the ability of Buyer effectively to exercise full
rights of ownership of the Purchased Assets.
9.02 CONDITIONS TO THE OBLIGATIONS OF SELLERS. The obligations of
Sellers to effect the transactions contemplated hereby shall be further subject
to the fulfillment at or prior to the Closing Date of the following conditions,
any one or more of which may be waived by Sellers:
(a) COVENANTS PERFORMED; REPRESENTATIONS AND WARRANTIES TRUE.
Buyer shall have performed and complied in all material respects with
the covenants and agreements contained in this Agreement required to be
performed and complied with by it at or prior to the Closing Date, and
there shall be as of the Closing Date no material incorrectness of any
representation and warranty of Buyer set forth in this Agreement, and
Sellers shall have received a certificate to that effect signed by an
authorized officer of Buyer;
(b) BANKRUPTCY COURT APPROVAL. (i)The Bankruptcy Judge presiding
over the Chapter 11 Cases shall have signed the Sale Order substantially
in the form of Exhibit G, without modification or the imposition of
conditions or limitations with respect thereto, except for such
immaterial modifications, conditions or limitations which do not,
individually or in the aggregate, materially and adversely affect
Sellers or Buyer and which Sellers and Buyer approve, (ii) the signed
Sale Order shall include a determination that this Agreement has been
made and negotiated in good faith and that Buyer is entitled to the
protections of Section 363(m) of the Bankruptcy Code as a result, and
(iii) the Sale Order shall not have been vacated, stayed, amended,
reversed or modified.
9.03 CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligations of Buyer to
effect the transactions contemplated hereby shall be further subject to the
fulfillment at or prior to the Closing Date of the following conditions, any one
or more of which may be waived by Buyer:
(a) COVENANTS PERFORMED; REPRESENTATIONS AND WARRANTIES TRUE.
Sellers shall have performed and complied in all material respects with
the covenants and agreements contained in this Agreement required to be
performed and complied with by them at or prior to the Closing Date, and
there shall be as of the Closing Date no material incorrectness of any
representation and warranty of Sellers set forth in this Agreement, and
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Buyer shall have received a certificate to that effect in the form of
Exhibit H from Xxxxxxxx Xxxxxx.
(b) BANKRUPTCY COURT APPROVAL. (i) The Bankruptcy Judge presiding
over the Chapter 11 Cases shall have signed the Sale Order substantially
in the form of Exhibit G, without modification or the imposition of
conditions or limitations with respect thereto, except for such
immaterial modifications, conditions or limitations which do not,
individually or in the aggregate, materially and adversely affect Buyer
and Sellers and which Buyer and Sellers approve, (ii) the signed Sale
Order shall include a determination that this Agreement has been made
and negotiated in good faith and that Buyer is entitled to the
protections of Section 363(m) of the Bankruptcy Code as a result, and
(iii) the Sale Order shall not have been vacated, stayed, amended,
reversed or modified.
(c) ASSIGNMENTS AND NOVATIONS. Buyer shall have received an
assignment or novation (including any necessary third-party consents and
approvals) reasonably satisfactory to Buyer to each of the Assigned
Contracts which by their terms or by law require third-party consent or
approval as a result of the transactions contemplated by this Agreement,
except where the Sale Order makes such assignment or novation
unnecessary.
(d) BUYER'S ASSIGNEE. Buyer shall have formed Buyer's Assignee,
which shall have assumed all of the rights, obligations and liabilities
of Buyer under this Agreement and shall have become "Buyer" for all
purposes under this Agreement; provided, however, that MTVP (First
Virtual Investments), LLC, Silicon Valley Bank, Huron Consulting
Services LLC and Xxxxxxxx & Xxxxxxxx LLP shall remain obligated for the
forgiveness of debt as set forth in Section 1.05 and for the delivery of
acknowledgements of satisfaction of the Secured Debt as set forth in
Section 10.02.
ARTICLE X
THE CLOSING
10.01 TIME AND PLACE OF CLOSING. Upon the terms and conditions of this
Agreement, the Closing of the transactions contemplated hereby (the "Closing")
shall take place, effective as of the close of business on March 11, 2005, or if
the conditions contained in Article VIII hereof have not been satisfied or
waived by such date then on the second Business Day after the satisfaction or
waiver of the last such condition (the "Closing Date"), at the offices of
Xxxxxxx XxXxxxxxx LLP, Three Embarcadero Center, San Francisco, California, or
at such other time and place as the Parties hereto may agree in writing. All
Closing transactions shall be deemed to take place simultaneously, and no
Closing transaction shall be deemed consummated until all transactions to take
place at the Closing have been consummated.
10.02 INSTRUMENTS OF TRANSFER, ETC. At the Closing, or, as regards a
particular Assigned Contract, on such later date as Buyer pays the monetary cure
for such Assigned Contract, Sellers will deliver to Buyer such deeds, bills of
sale, instruments of assignment and other good and sufficient
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instruments of transfer, executed by Sellers and in a form reasonably
satisfactory to Buyer, as Buyer may reasonably require to vest in Buyer all
right, title and interest of Sellers in and to the Purchased Assets, and Buyer
and Huron Consulting Services LLC shall deliver to Seller the Purchase Price in
the form of acknowledgments of satisfaction of the Secured Debt as contemplated
by Section 1.05 hereof, and shall also deliver to Sellers the other documents
and instruments reasonably required of it at the Closing.
Without limiting the foregoing, the documents to be delivered by the
Parties at the Closing or, as regards a particular Assigned Contract, on such
later date as Buyer pays the monetary cure for such Assigned Contract, shall
include the following:
(a) SELLERS. Sellers shall execute and deliver (i) the Related
Agreements, (ii) the Secretary's Certificate contemplated by Section
3.02 hereof, (iii) the certificates contemplated by Section 9.03(a)
hereof, and (iv) such other instruments and documents as may reasonably
be required of it at the Closing pursuant to the terms of this
Agreement.
(b) BUYER. Buyer shall execute and deliver (i) the Related
Agreements, (ii) the Secretary's Certificates contemplated by Section
4.02 hereof, (iii) the Officer's Certificate contemplated by Section
9.02(a) hereof, and (iv) such other instruments and documents as may
reasonably be required of it at the Closing pursuant to the terms of
this Agreement.
Sellers shall deliver to Buyer at the Closing possession of the
Purchased Assets being sold pursuant to this Agreement and the entire right,
title and interest of Sellers in and to such Purchased Assets shall pass to
Buyer at the Closing or, as regards a particular Assigned Contract, on such
later date as Buyer pays the monetary cure for such Assigned Contract.
10.03 TERMINATION OF AGREEMENT. This Agreement may be terminated by
the Parties as provided below:
(a) The Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing;
(b) Buyer may terminate this Agreement by giving written notice
to Sellers at any time prior to the Closing (i) in the event that
Sellers have breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, Buyer has notified
Sellers of the breach, and the breach has continued without cure for a
period of 10 days after the notice of breach, or (ii) if the Closing
shall not have occurred on or before March 18, 2005, by reason of the
failure of any condition precedent under Section 9.01 or 9.03 hereof
(unless the failure results primarily from Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement);
(c) Sellers may terminate this Agreement by giving written notice
to Buyer at any time prior to the Closing (i) in the event Buyer has
breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, Sellers have notified Buyer of
the breach, and the breach has continued without cure for a period of 10
days after the notice of breach, or (ii) if the Closing shall not have
occurred on or before
25
March 18, 2005, by reason of the failure of any condition precedent
under Section 9.01 or 9.02 hereof (unless the failure results
primarily from Sellers' breach of any representation, warranty, or
covenant contained in this Agreement); and
(d) Buyer or Sellers may terminate this Agreement by giving
written notice to the other if there shall be in effect any law or
regulation that prohibits the consummation of the Closing or if
consummation of the Closing would violate any non-appealable final
order, decree or judgment of any court or governmental body having
competent jurisdiction.
10.04 EFFECT OF TERMINATION. If either Party terminates this Agreement
pursuant to Section 10.03 above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
or their respective Affiliates, directors, officers or employees, except for the
return of the escrow deposit upon the termination of this Agreement or the
consummation of an Alternative Transaction. Notwithstanding the foregoing
sentence, the obligations of the Parties hereto contained in provisions which
are stated to survive any termination of this Agreement, including, without
limitation, Sections 7.01(b), 8.11, 11.01, 11.03, 12.04 and 12.05 shall survive
termination of this Agreement.
ARTICLE XI
POST-CLOSING COVENANTS
11.01 EXPENSES. Except as otherwise provided herein, Sellers and Buyer
shall each bear their own costs and expenses incurred in connection with this
Agreement, the Related Agreements and the transactions contemplated hereby and
thereby. Buyer shall be responsible for fees, commissions, expenses and
reimbursements incurred by or required to be paid to its professional advisors
(including, without limitation, its legal counsel) and Sellers shall be
responsible for the fees, commissions, expenses and reimbursements incurred by
or required to be paid to their professional advisors (including, without
limitation, its legal counsel).
11.02 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, each of the Parties hereto will use their best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the sale of the Purchased Assets and the other
transactions contemplated by this Agreement and the Related Agreements. From
time to time after the date hereof (including after the Closing Date if
requested), Sellers will, at their own expense, execute and deliver such
documents to Buyer as Buyer may reasonably request in order more effectively to
vest in Buyer good title to the Purchased Assets and to more effectively
consummate the transactions contemplated by this Agreement and the Related
Agreements.
11.03 COMMISSIONS AND FEES. Except as set forth on Schedule 11.03
hereto, Sellers and Buyer each represent and warrant to the other that no
broker, finder, financial adviser or other person is entitled to any brokerage
fees, commissions or finder's fees in connection with the transactions
contemplated hereby by reason of any action taken by the Party making such
representation. Sellers and Buyer will pay to the other or otherwise discharge,
and will indemnify and hold the other
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harmless from and against, any and all claims or liabilities for all brokerage
fees, commissions and finder's fees (other than as described above) incurred by
reason of any action taken by such Party.
11.04 SALES, TRANSFER AND USE TAXES. The Parties recognize and
acknowledge that the sale, transfer, assignment and delivery of the Purchased
Assets may be exempt under Section 1146(c) of the Bankruptcy Code and the Sale
Order from all state and local transfer, recording, stamp or other similar
transfer Taxes that may be imposed by reason of the sale, transfer, assignment
and delivery of the Purchased Assets. Notwithstanding the foregoing, the Seller
on the one hand and the Buyer on the other, will each bear and pay one-half of
any sales Taxes, use Taxes, transfer Taxes, documentary charges, recording fees,
filing fees or similar Taxes, charges, fees or expenses that may become payable
by Buyer or Seller in connection with the sale of the Purchased Assets to Buyer,
the assumption by Buyer of the Assumed Liabilities or any of the other
transactions contemplated by this Agreement (the "Transfer Taxes").
11.05 PUBLICITY. Seller shall not issue any press release or make any
public announcement relating to the subject matter of this Agreement following
the Closing without the prior written approval of Buyer; provided, however, that
any Party may make any public disclosure it believes in good faith is (a)
required by applicable law or any listing or trading agreement concerning its
publicly-traded securities or (b) permitted or required to be filed with the
Bankruptcy Court or otherwise disclosed by this Agreement or the Sale Procedures
Order (in the case of either (a) or (b) above, the disclosing Party will, prior
to making any such disclosure, consult with the other Party regarding such
disclosure).
11.06 ACCOUNTS RECEIVABLE. In the event that, following the Closing
Date, Sellers receive any payment with respect to any account receivable that is
a Purchased Asset, then Sellers shall promptly remit or forward such payment to
Buyer.
11.07 ENFORCEMENT OF RIGHTS WITH RESPECT TO EMPLOYEES, ETC. For a period
beginning as of the Closing Date and continuing until the third anniversary of
the Closing Date, Sellers shall assign to Buyer or shall enforce any employee
secrecy, non-disclosure, non-competition agreements or covenants by current or
former employees and any other rights to protect the Seller Proprietary Rights,
the Seller Registered Proprietary Rights and the Business.
ARTICLE XII
MISCELLANEOUS
12.01 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their respective successors and permitted
assigns.
12.02 NO ASSIGNMENT. This Agreement may not be assigned by any Party
hereto without the prior written consent of the other Parties, provided,
however, that Buyer may assign its rights hereunder, in whole or in part, to any
corporation or other entity controlled by, controlling, or under common control
with Buyer or its assignee may assign its rights hereunder, in whole or in part,
to any purchaser of substantially all of the assets or business of Buyer. In the
event of Buyer's assignment of this Agreement to an Affiliate, Buyer will be
fully released of all obligations set forth
27
herein except as expressly set forth in Section 12.12 below, and Seller will
look solely to the assignee of Buyer with respect thereto. Any attempted or
purported assignment by either Party other than in accordance with this Section
12.02 shall be null and void.
12.03 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by any Party on separate counterparts, each of which as so
executed and delivered shall be deemed an original but all of which together
shall constitute one and the same instrument, and it shall not be necessary in
making proof of this Agreement as to any Party, hereto to produce or account for
more than one such counterpart executed and delivered by such Party.
12.04 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal substantive laws of the State of California as
to all matters, including but not limited to matters of validity, construction,
effect, performance and remedies.
12.05 VENUE. Each of the Parties submits to the jurisdiction of the
Bankruptcy Court, or, if the Bankruptcy Court declines to exercise jurisdiction,
any state or federal court sitting in the County of San Mateo, California, in
any action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Any
Party may make service on any other Party by sending or delivering a copy of the
process (i) to the Party to be served at the address and in the manner provided
for the giving of notices in Section 12.06 below. Nothing in this Section 12.05,
however, shall affect the right of any Party to bring any action or proceeding
arising out of or relating to this Agreement in any other court or to serve
legal process in any other manner permitted by law or at equity. Each Party
agrees that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.
12.06 NOTICES. All notices required to be given under the terms of this
Agreement or which any of the Parties desires to give hereunder shall be in
writing and personally delivered or sent by registered or certified mail, return
receipt requested, or sent by facsimile, addressed as follows:
(a) TO BUYER . If to Buyer addressed to:
Advisory Services Department
Silicon Valley Bank
00 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000 Facsimile: 000-000-0000
Attention: Xxxxx XxXxx, Senior Advisor
With a copy to:
Xxxxxxx & Xxxxxx, A Law Corporation
00 X. Xxxxx Xx.
Xxx Xxxx, Xx. 00000
Mailing
X.X. Xxx 0000
00
Xxx Xxxx, Xx. 00000-0000
Facsimile: 408-998-4790
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
MTVP (First Virtual Investments), LLC
0000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxx Xxxxxx
With a copy to:
Xxxxxxx XxXxxxxxx LLP
Three Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx Xxxxx, Esq.
(b) TO SELLERS. If to Sellers addressed to:
First Virtual Communications, Inc.
0000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxx
Facsimile No.: 000-000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Van X. Xxxxxx, XX, Esq.
Facsimile No.: 213-687-5600
Any Party may designate a change in address at any time upon written
notice to the other Party.
29
12.07 AMENDMENT AND MODIFICATION. The Agreement may be amended, modified
or supplemented only by a written instrument executed by the Party against whom
such amendment, modification or supplement is sought to be enforced.
12.08 WAIVER OF COMPLIANCE. Except as otherwise provided in this
Agreement, any failure of any of the Parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the Party or Parties
entitled to the benefits thereof only by a written instrument signed by the
Party or Parties granting such waiver, but any such waiver or the failure to
insist upon strict compliance with any obligation, covenant, agreement or
condition herein, shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other failure or breach.
12.09 INTERPRETATION. The table of contents and the article and section
headings contained in this Agreement are solely for the purpose of reference,
are not part of the agreement of the Parties and shall not in any way affect the
meaning or interpretation of this Agreement. When used herein, the masculine,
feminine or neuter gender and the singular or plural number shall each be deemed
to include the others whenever the context so indicates or permits.
12.10 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
12.11 ENTIRE AGREEMENT. This Agreement, the Related Agreements and that
certain letter agreement from Huron Consulting Services LLC dated February 12,
2005, including the schedules, exhibits, documents, certificates and instruments
referred to herein and therein, embody the entire agreement and understanding of
the Parties hereto in respect of any transactions contemplated by this Agreement
and the Related Agreements and supersede all prior agreements and understandings
between all the Parties with respect thereto.
12.12 BUYER'S ASSIGNEE. Buyer may assign all of its rights and
obligations hereunder to Buyer's Assignee without the consent of Sellers. At the
time that Buyer does so, then wherever the term Buyer is used herein, said term
shall thereafter be construed to mean Buyer's Assignee; provided, however, that
MTVP (First Virtual Investments), LLC, Silicon Valley Bank, Huron Consulting
Services LLC and Xxxxxxxx & Xxxxxxxx LLP shall remain obligated for the
forgiveness of debt as set forth in Section 1.05 and for the delivery of
acknowledgements of satisfaction of the Secured Debt as set forth in Section
10.02.
30
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of
the date first above written.
MTVP (FIRST VIRTUAL INVESTMENTS), LLC
By: /s/ Xxxxxx Xxxxxx
------------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Managing Partner
SILICON VALLEY BANK
By: /s/ C. Xxxxx XxXxx
------------------------------------------------
Name: C. Xxxxx XxXxx
Title: Senior Vice President
XXXXXXXX & XXXXXXXX LLP
By: /s/ Xxxx X. Xxxxx
------------------------------------------------
Name: Xxxx X. Xxxxx
Title: Partner
FIRST VIRTUAL COMMUNICATIONS, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
CUSEEME NETWORKS, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
31
Schedule 1.01(a)
Real Property Leases
Schedule 1.01(b)
Furniture, Machinery & Equipment
Schedule 1.01(c)
Assumed Contracts; Defaults
Schedule 1.01(f)
Government Licenses, Permits and Authorizations
Schedule 1.01(h)
Seller Proprietary Rights and Seller Registered Proprietary Rights
Schedule 1.01(k)
Assumed Insurance Policies
Schedule 1.02
Retained Assets
Schedule 3.01
Organization and Good Standing
Schedule 3.01(b)
Assets of Subsidiaries
Schedule 3.02
Noncontravention
Schedule 3.04
Operation of Business in the Ordinary Course - Exceptions
Schedule 3.06(a)
Sellers' Contracts; Defaults
Schedule 3.06(b)
Government Contracts; Defaults
Schedule 3.06(c)
Cure Costs
Schedule 3.07
Licenses, Permits and Authorizations -- Exceptions
Schedule 3.08
Encumbrances on Assets
Schedule 3.09(b)
IP -- Computer Programs
Schedule 3.09(c)
Licensee Software
Schedule 3.09(d)
IP -- Litigation
Schedule 3.09(e)
IP -- Infringements
Schedule 3.09(f)
IP -- Encumbrances
Schedule 3.09(g)
IP -- Licenses
Schedule 3.09(h)
IP -- Royalty Fees
Schedule 3.10
Employee Benefit Plans
Schedule 3.11
Litigation
Schedule 3.13
Compliance with Laws
Schedule 3.13(b)
List of US and ISO Standards
Schedule 3.14
Insurance
Schedule 3.16
Real Property Leases; Exceptions
Schedule 3.17
Environmental Matters
Schedule 5.01
Employees
Schedule 8.06
Key Employees
Schedule 11.03
Commissions and Fees
EXHIBIT A
FORM OF PATENT ASSIGNMENT
THIS PATENT ASSIGNMENT ("Assignment") is made as of this day
of , 2005 ( the "Closing Date"), by
[ ], a Delaware corporation with its
principal office at [ ] ("Assignor"), in favor
of ____________., a corporation organized under the laws of the _______________
with its principal office at [
] ("Assignee").
WHEREAS, pursuant to the Asset Purchase Agreement dated as of , 2005,
among Assignor, Assignee, and the parties named therein, (the "Purchase
Agreement"), Assignor is transferring substantially all assets of the Business
(as defined in such Purchase Agreement), including the assignment to Assignee of
the United States patents, United States patent applications and their foreign
equivalents identified and set forth on Schedule A hereto (the "Patents"); and
WHEREAS, Assignee wishes to acquire and Assignor wishes to assign to
Assignee all right, title and interest in and to the Patents;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Assignor agrees as follows:
1. Assignor does hereby sell, assign, transfer and set over to Assignee,
the entire right, title and interest in and to the Patents, for the United
States and for all foreign countries (if any), including any divisions,
reissues, reexaminations, extensions or foreign equivalents thereof or
continuations or continuations-in-part that have been filed, and including the
subject matter of all claims which may be obtained therefrom for its own use and
enjoyment, and for the use and enjoyment of its successors, assigns or other
legal representatives, as fully and entirely as the same would have been held
and enjoyed by Assignor if this assignment had not been made; together with all
income, royalties, damages or payments due or payable as of the Closing Date (as
defined in the Purchase Agreement) or thereafter, including, without limitation,
all claims for damages by reason of past, present or future infringement or
other unauthorized use of the Patents, with the right to xxx for, and collect
the same for its own use and enjoyment, and for the use and enjoyment of its
successors, assigns, or other legal representatives.
2. Assignor authorizes and requests the Commissioner of Patent and
Trademarks to record Assignee as owner of the Patents, including any divisions,
reissues, reexaminations or extensions thereof or continuations or
continuations-in-part that have been filed, and to issue any
A-1
and all letters patent of the United States thereon to Assignee, as assignee of
the entire right, title and interest in, to and under the same, for the sole use
and enjoyment of Assignee, its successors, assigns or other legal
representatives.
[SIGNATURE PAGE FOLLOWS]
A-2
IN TESTIMONY WHEREOF, Assignor has caused this Assignment to be signed
and executed by its undersigned duly authorized officer.
[ASSIGNOR]
By:
--------------------------------------
Name:
------------------------------------
Title:
------------------------------------
STATE OF )
: ss.:
COUNTY OF )
On this day of , 2005, there appeared before me , personally
known to me, who acknowledged that he signed the foregoing Assignment as
[his/her] voluntary act and deed on behalf and with full authority of
[Assignor].
--------------------------
Notary Public
A-3
SCHEDULE A
Patents
A-4
EXHIBIT B
FORM OF ASSIGNMENT OF TRADEMARKS
KNOW ALL MEN BY THESE PRESENTS that [ ], Assignor, a corporation
organized and existing under the laws of Delaware, having a principal office or
place of business at [ ], has adopted, owns and has used the trademarks listed
in Schedule A (the "Marks").
WHEREAS, ______________, a corporation organized and existing under the
laws of the __________________, with its principal place of business at [ ]
("Assignee"), desires to acquire the Marks and all associated goodwill in said
Marks, and the pending application;
In consideration of the Purchase Price, as defined in that certain Asset
Purchase Agreement dated as of _________________, 2005 by and among Assignor,
Assignee, and the parties named therein, and other good and valuable
consideration to it paid by Assignee, the receipt whereof is hereby
acknowledged, Assignor does hereby sell, assign and transfer to Assignee, all of
Assignor's rights, title and interest in and to the Marks, together with the
goodwill of the business symbolized by the Marks and with all causes of action,
claims and demands or other rights for, or arising from, any infringement,
including the right to xxx for any past, present or future infringement of the
Marks and related claims, including the right to xxx for injunctive relief and
to collect damages for its own use and enjoyment, and for the use and enjoyment
of its successors, assigns, or other legal representatives.
Executed at _________________________________________, this _____ day of
_______________________, 2005
[ASSIGNOR]
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
B-1
SCHEDULE A -- SCHEDULE OF MARKS
B-2
EXHIBIT C
FORM OF COPYRIGHT ASSIGNMENT
THIS COPYRIGHT ASSIGNMENT ("Assignment") is made as of this day
of , 2005 ( the "Closing Date"), by [
], a Delaware corporation with
its principal office at [ ] ("Assignor"), in
favor of ______________a corporation organized under the laws of the
____________with its principal office at [
] ("Assignee").
WHEREAS, pursuant to the Asset Purchase Agreement dated as of , 2005,
among Assignor, Assignee, and the parties named therein, (the "Purchase
Agreement"), Assignor is transferring substantially all assets of the Business
(as defined in such Purchase Agreement), including the assignment to Assignee of
the United States copyrights, United States copyright registrations and
applications and their foreign equivalents identified and set forth on Schedule
A hereto (the "Copyrights"); and
WHEREAS, Assignee wishes to acquire and Assignor wishes to assign to
Assignee all right, title and interest in and to the Copyrights;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Assignor agrees as follows:
1. Assignor does hereby sell, assign, transfer and set over to Assignee,
the entire right, title and interest in and to the Copyrights, for the United
States and for all foreign countries (if any), including any renewals,
extensions or foreign equivalents thereof, and for the use and enjoyment of its
successors, assigns or other legal representatives, as fully and entirely as the
same would have been held and enjoyed by Assignor if this assignment had not
been made; together with all causes of actions, claims and demands or other
rights for, or arising from, any infringement, including the right to xxx for
any past, present or future infringement of the Copyrights and related claims,
including the right to xxx for injunctive relief and to collect damages.
2. Assignor authorizes and requests the Register of Copyrights to record
Assignee as owner of the Copyrights, including any renewals or extensions
thereof, and to issue any registrations to Assignee, as assignee of the entire
right, title and interest in, to and under the same, for the sole use and
enjoyment of Assignee, its successors, assigns or other legal representatives.
C-1
[SIGNATURE PAGE FOLLOWS]
C-2
IN TESTIMONY WHEREOF, Assignor has caused this Assignment to be signed
and executed by its undersigned duly authorized officer.
[ASSIGNOR]
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
STATE OF )
: ss.:
COUNTY OF )
On this day of , 2005, there appeared
before me , personally known to me, who acknowledged that he signed the
foregoing Assignment as [his/her] voluntary act and deed on behalf and with full
authority of [Assignor].
-----------------------
Notary Public
C-3
SCHEDULE A
Copyrights
C-4
EXHIBIT D
FORM OF XXXX OF SALE
This XXXX OF SALE dated as of _________________, 2005 entered into by
FIRST VIRTUAL COMMUNICATIONS, INC., a Delaware corporation, CUSEEME NETWORKS,
INC., a Delaware corporation (collectively, the "Sellers") in favor of
_________________, a corporation organized under the laws of the __________(the
"Buyer").
All capitalized terms used herein and not defined shall have the
meanings given to them in the Asset Purchase Agreement dated as of February ___,
2005 by and among the Sellers and the Buyer (the "Purchase Agreement").
BACKGROUND
Pursuant to the terms and conditions of the Purchase Agreement the
Sellers have agreed that they may sell, convey, transfer, assign and deliver to
the Buyer, or cause to be sold, conveyed, transferred, assigned and delivered to
the Buyer, and the Buyer has agreed to purchase, acquire and accept from the
Sellers, all of their right, title and interest in and to the Purchased Assets
being sold to the Buyer thereunder.
To effect such transactions and in consideration of the foregoing and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged and intending to be legally bound hereby, the Sellers
agree as follows:
TERMS
Section 1. Sale. Pursuant to the Purchase Agreement, and upon the terms
and subject to the conditions set forth therein, the Sellers hereby sell,
convey, transfer, assign and deliver to the Buyer, its successors and assigns,
all of the Sellers' right, title and interest as of the date hereof in and to
the Purchased Assets, free and clear of all liens to the extent provided in the
Sale Order.
Section 2. Rights Cumulative; Conflict With Purchase Agreement. The
rights and remedies of the Buyer and the duties and obligations of Sellers
hereunder shall be cumulative and in addition to the rights and remedies of the
Buyer and the duties and obligations of Sellers under the Purchase Agreement.
Nothing herein shall be deemed to limit the rights and remedies of the Buyer and
the duties and obligations of Sellers under the Purchase Agreement and, to the
extent of any conflict between the terms and conditions of this Xxxx of Sale and
the terms and conditions of the Purchase Agreement, the terms and conditions of
the Purchase Agreement shall govern, supersede and prevail. Notwithstanding
anything to the contrary herein, nothing herein is intended to, nor shall it,
extend, amplify or otherwise alter the representations, warranties, covenants
and obligations of the Sellers or the Buyer contained in the Purchase Agreement
or the survival thereof.
D-1
Section 3. Further Assurances. The Sellers do hereby agree, from and
after the date hereof upon the reasonable request of the Buyer, to execute such
other documents as the Buyer may require to obtain the full benefit of this Xxxx
of Sale and the Sellers' obligations hereunder.
Section 4. Governing Law. This Xxxx of Sale shall be governed by and
construed under the substantive laws of the State of California without
reference to conflicts of laws principles.
IN WITNESS WHEREOF, the Sellers have caused this Xxxx of Sale to be
executed by its duly authorized officer and Sellers have executed this Xxxx of
Sale as of the date first above written.
FIRST VIRTUAL COMMUNICATIONS, INC.
By:
----------------------------------------
Name:
Title:
CUSEEME NETWORKS, INC.
By:
----------------------------------------
Name:
Title:
D-2
EXHIBIT E
FORM OF ASSIGNMENT AND
ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") is made this
______ day of ______________, 2005 (the "Effective Date"), by and between
[ ], a Delaware corporation
(hereinafter called "Assignor") and [__________., a corporation organized under
the laws of _____________] (hereinafter called "Assignee").
W I T N E S S E T H :
(a) Pursuant to that certain Purchase Agreement dated as of February ,
2005, by and among Assignor, Assignee and the parties named therein, Assignor
agreed to assign and Assignee agreed to assume the lease for the premises known
as (the "Lease").
(b) Assignor desires to assign to Assignee by this Assignment the Lease,
and Assignee intends to assume and undertake to perform all of Assignor's
obligations from and after the Effective Date, under and with respect to the
Lease.
NOW, THEREFORE, the parties do hereby agree as follows:
1. Assignor assigns and transfers to Assignee all of Assignor's right,
title and interest with respect to the Lease, and all of the rights of Assignor
thereunder.
2. Assignee assumes and agrees to perform and discharge all obligations
of Assignor with respect to the Lease from and after the Effective Date.
3. This Assignment shall be binding upon, enforceable by and shall inure
to the benefit of the successors and assigns of the parties.
4. This Assignment may be signed in multiple counterparts which, when
taken together and signed by all parties and delivered to any other party
hereto, shall constitute a binding agreement between the parties.
5. This Assignment shall be governed by and construed in accordance with
the laws of the State of [ ].
E-1
IN WITNESS WHEREOF, Assignor and Assignee have signed this Assignment as
of the date and year first above written.
ASSIGNOR:
[ ]
By:
----------------------------------------
Name:
Title:
ASSIGNEE:
--------------------------------------------
By:
----------------------------------------
Name:
Title:
E-2
ACKNOWLEDGEMENT AND RELEASE
The undersigned, as Landlord pursuant to the Lease (as defined in the foregoing
Assignment and Assumption of Lease) hereby acknowledges the Assignment and
Assumption of Lease and agrees that [ ] (the "Assignor") shall be and hereby is
relieved from any further obligations, duties or liabilities accruing under the
Lease from and after the Effective Date of the foregoing Assignment and
Assumption of Lease. Assignor shall be exclusively liable for any obligations,
duties or liabilities accruing under the Lease prior to the Effective Date of
the foregoing Assignment and Assumption of Lease.
[LANDLORD]
By:
-------------------------------------
Name:
Title:
E-3
EXHIBIT F
FORM OF ASSIGNMENT AND ASSUMPTION OF CONTRACTS
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS is made and entered
into on _______________, 2005 by and between [ ], a Delaware corporation (the
"Assignor"), and [____________ a corporation organized under the laws of
___________ (the "Assignee").
All capitalized terms used herein and not defined shall have the
meanings given to them in the Asset Purchase Agreement dated as of
_____________, 2005 by and among the Assignor, the Assignee, and the parties
named therein (the "Purchase Agreement").
BACKGROUND
Pursuant to the terms and conditions of the Purchase Agreement,
the Assignor has agreed to assign to the Assignee the Assignor's right, title
and interest in and to the Assigned Contracts free and clear of all liens, and
the Assignee has agreed to assume certain of the Assignee's performance
obligations under the Assigned Contracts.
To effect such transactions and in consideration of the foregoing
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, the Assignor
and the Assignee agree as follows:
TERMS
SECTION 1 ASSIGNMENT. Pursuant to the Purchase Agreement, and on
the same terms and conditions stated therein, the Assignor hereby sells,
conveys, transfers, assigns and delivers to the Assignee all of the Assignor's
right, title and interest in and to the Assigned Contracts, free and clear of
all liens to the extent provided in the Sale Order.
SECTION 2 ASSUMPTION. The Assignee hereby accepts the foregoing
assignment, and assumes and undertakes to timely discharge and perform the
performance obligations under the Assigned Contracts to the extent set forth in
Section 1.03 of the Purchase Agreement.
SECTION 3 DUTIES AND OBLIGATIONS OF ASSIGNOR. The Assignor shall
not be bound by, liable for or required to perform any duties and obligations
under the Assigned Contracts which are provided for in any amendment,
modification, renewal, extension or supplement to any of the Assigned Contracts
which may be entered into after the date hereof.
SECTION 4 FURTHER ASSURANCES. The Assignor agrees to execute and
deliver all such further transfers, assignments and conveyances and assurances
as may reasonably be requested by the Assignee in order to effect the full
assignment of the Assigned Contracts to the Assignee as contemplated herein.
F-1
SECTION 5 RIGHTS CUMULATIVE; CONFLICT WITH PURCHASE AGREEMENT.
The rights and remedies of the Assignee and the duties and obligations of the
Assignor hereunder shall be cumulative and in addition to the rights and
remedies of the Assignee and the duties and obligations of the Assignor under
the Purchase Agreement. Nothing herein shall be deemed to limit the rights and
remedies of the Assignee and the duties and obligations of the Assignor under
the Purchase Agreement and, to the extent of any conflict between the terms and
conditions of this Assignment and Assumption of Contracts and the terms and
conditions of the Purchase Agreement, the terms and conditions of the Purchase
Agreement shall govern, supersede and prevail. Notwithstanding anything to the
contrary herein, nothing herein is intended to, nor shall it, extend, amplify or
otherwise alter the representations, warranties, covenants and obligations of
the Buyer contained in the Purchase Agreement or the survival thereof.
SECTION 6 GOVERNING LAW. This Assignment and Assumption of
Contracts shall be governed and construed under the substantive laws of
California, without reference to conflicts of laws principles.
IN WITNESS WHEREOF, the Assignor and Assignee have caused this
Assignment and Assumption of Contracts to be executed as of the date first above
written.
Assignor:
[ ]
By:
---------------------------------------
Name:
Authorized Signatory
Assignee:
----------------------------------------------
By:
----------------------------------------
Name:
Authorized Signatory
F-2
EXHIBIT G
FORM OF SALE ORDER
(attached)
G-1
EXHIBIT H
FORM OF CERTIFICATE OF
XXXXXXXX XXXXXX
I, Xxxxxxxx Xxxxxx, certify that:
1. I am delivering this certificate to Buyer pursuant to Section 9.03(a)
of the Asset Purchase Agreement by and among MTVP (First Virtual Investments),
LLC, Silicon Valley Bank, Xxxxxxxx & Xxxxxxxx LLP, First Virtual Communications,
Inc. and CUseeMe Networks, Inc. dated as of February ___, 2004 (the
"Agreement").
2. All capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms in the Agreement.
3. As of the date hereof, Sellers have performed and complied in all
material respects with the covenants contained in the Agreement.
4. As of the date hereof, the representations and warranties of the
Sellers set forth in the Agreement are true and correct in all material
respects.
IN WITNESS WHEREOF, I have executed this Certificate as of this _____
day of March, 2005.
----------------------------------------
Xxxxxxxx Xxxxxx
H-1
EXHIBIT I
DEFINITIONS
Capitalized terms used in this Agreement that are not otherwise defined herein
shall have the following meaning for the purposes of this Agreement:
(a) "Affiliate" of any Person means another Person that directly
or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first Person. For
purposes of this definition, "control" as applied to any Person means
the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether
through the ownership of voting securities, by contract, or otherwise.
(b) "Business Day" means any day other than a Saturday, a Sunday
or a day on which banks in San Francisco, California, are authorized or
obliged by law or executive order to close.
(c) "Code" means the Internal Revenue Code of 1986, as amended,
together with the Treasury regulations promulgated thereunder.
(d) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(e) "GAAP" means generally accepted accounting principles as in
effect and as applied in the United States.
(f) "Government Contract" means those Assumed Contracts between a
Seller and the U.S. Federal government or any agency thereof or a Seller
and another party which is party to a contract with the U.S. federal
government or any agency therefor under which such Seller acts as
subcontractor to such other party and is obligated pursuant to any
contractual flow-down provisions to abide by any government contracting
regulations, including the Federal Acquisition Regulations, that are
applicable for the principal contractor.
(g) "Governmental Authority" means any domestic or foreign
supranational, national, federal, state or local judicial, legislative,
executive or regulatory authority.
(h) "Law" means any federal, state, local or foreign law,
statute, code, ordinance, rule, regulation, Order or rule of common law.
(i) "Order" means any decree, injunction, judgment, order,
ruling, binding settlement agreement or writ.
(j) "Person" means and includes an individual, a partnership, a
joint venture, a
I-1
corporation, a trust, an unincorporated organization or a governmental
entity or any department or agency thereof.
(k) "Proprietary Rights" means all (i) U.S. and foreign patents,
patent applications, patent disclosures and improvements thereto,
including xxxxx patents, utility models, design patents and provisional
and non-provisional applications therefor and reissues and extensions
thereof, and rights of priority thereunder, (ii) registered and
unregistered U.S. and foreign trademarks, service marks, trade dress,
logos, trade names and corporate names and the goodwill associated
therewith and registrations and applications for registration thereof,
(iii) U.S. and foreign copyrights and registrations and applications for
registration thereof, (iv) U.S. and foreign mask work rights and
registrations and applications for registration thereof, (v) rights in
know-how, proprietary information and trade secrets, (vi) software and
database and data rights, (vii) domain name registrations and contents
of all websites, (viii) other proprietary rights, and (ix) licenses
granting any rights with respect to any of the foregoing.
(l) "Registered Proprietary Rights" means all United States,
international and foreign: (i) issued patents and patent applications
(including provisional applications), (ii) registered trademarks and
servicemarks, applications to register trademarks and servicemarks,
intent-to-use applications, other registrations or applications to
trademarks or servicemarks, (iii) registered copyrights and applications
for copyright registration, (iv) any mask work registrations and
applications to register mask works, and (v) any other Proprietary Right
that is the subject of an application, certificate, filing, registration
or other document issued by, filed with, or recorded by, any state,
government or other public legal authority.
(m) "Sale Procedures Order" means the Interim Order Approving
Bidding Procedures and Protections entered on February 8, 2005 in the
Sellers' Chapter 11 Cases, as it may be amended or modified by the Final
Order Approving Bidding Procedures to be considered at and entered
following the hearing scheduled for February 14, 2005 before the
Bankruptcy Court.
(n) "Securities Act" means the U.S. Securities Act of 1933, as
amended.
(o) "Seller Proprietary Rights" means any Proprietary Right
(including, but not limited to, all websites maintained or owned by any
Seller or anyone on its behalf (or used by others with the approval of
any Seller) and the exclusive right to use the names First Virtual
Communications, Inc., FVC, CUseeMe Networks, Inc. and Click to Meet
Version 4.1) that (i) is owned or used by, (ii) is licensed to, or (iii)
was developed or created by or for the Sellers.
(p) "Seller Registered Proprietary Rights" means all Registered
Proprietary Rights owned by, filed in the name of, assigned to or
applied by or for the Sellers.
I-2
(q) "Sellers' Knowledge" means, with respect to the Transactions
and the Purchased Assets, the actual knowledge of any of the officers of
the Sellers.
(r) "Tax" or "Taxes" means any foreign, United States federal,
state or local income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration,
value added, alternative or add-on minimum, estimated or other tax of
any kind whatsoever, including all estimated taxes, deficiency
assessments and any interest, penalty or addition thereto.
(s) "Transactions" means the sale of the Purchased Assets,
assumption of the Assumed Liabilities and the other transactions
contemplated by this Agreement.
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