Exhibit 2.3
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into as of
February 1, 2000 by and among ZHONE TECHNOLOGIES, INC., a Delaware corporation
("Buyer"), ROUNDVIEW, INC., a Minnesota corporation ("Seller"), and ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇, the shareholders of Seller
("Shareholders"), in recognition of the following facts:
RECITALS
A. Seller owns certain assets which it uses in the conduct of its
business. Shareholders are principally responsible for the day-to-day operation
of Seller's business.
B. Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, such assets upon the terms and subject to the conditions of this
Agreement.
AGREEMENT
In consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:
ARTICLE I.
PURCHASE AND SALE OF ASSETS
1.1 Transfer of Assets. Upon the terms and subject to the conditions set
forth herein, at the Closing (as defined below), Buyer shall purchase from
Seller, and Seller shall sell to Buyer, all of the Assets (as defined below).
The total purchase price for all of the Assets shall be payable as provided in
Section 1.2. Each of the parties agrees to report this transaction for federal
tax purposes in accordance with an allocation of the purchase price to be
mutually agreed upon by the parties. For purposes of this Agreement, the term
"Assets" shall mean all of Seller's right, title and interest in and to the cash
and fixed assets listed on Exhibit "A" hereto.
1.2 Payment of Purchase Price. Upon the terms and subject to the
conditions set forth herein, at the Closing, Buyer shall pay to Seller as the
purchase price for the Assets $250,000 in immediately available funds (the
"Purchase Price").
1.3 No Assumption of Liabilities. Buyer shall not assume, or otherwise be
responsible for, any liabilities or obligations of Seller, whether actual or
contingent, matured or unmatured, liquidated or unliquidated, or known or
unknown, whether arising out of occurrences prior to, at or after the date
hereof.
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ARTICLE II.
CLOSING
2.1 Closing. The closing of the transactions contemplated hereby (the
"Closing") shall be held on February 1, 2000 (the "Closing Date") at the offices
of Buyer, unless the parties mutually agree otherwise. To effect the sale and
transfer of the Assets, at the Closing, Seller shall execute and deliver to
Buyer a ▇▇▇▇ of Sale in the form attached hereto as Exhibit "B," and Buyer shall
pay to Seller the Purchase Price pursuant to Section 1.2.
2.2 Transfer Taxes and Fees. Seller and Shareholders shall be solely
responsible for any documentary and transfer taxes and any sales, use or other
taxes imposed by reason of the transfer of the Assets provided hereunder and any
deficiency, interest or penalty asserted with respect thereto.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS
Seller and Shareholders (severally, and not jointly) each hereby represent
and warrant to Buyer as follows:
3.1 Organization. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Minnesota. Seller is duly
qualified to do business and is in good standing in each jurisdiction where the
character of its properties owned or leased or the nature of its activities make
such qualification necessary, except where the failure to so qualify would not
have a material adverse effect on Seller's business as currently conducted.
3.2 Authority. Seller and Shareholders each has full right, power and
authority, and has taken all action necessary, to enter into this Agreement and
to perform its obligations hereunder; no other proceedings, corporate or
otherwise, on the part of Seller or Shareholders are necessary to authorize this
Agreement and the transactions contemplated hereby; this Agreement constitutes a
valid and binding obligation of Seller and Shareholders, enforceable against
each of them in accordance with its terms; and none of the execution, delivery
and performance of this Agreement by Seller or Shareholders violates or
conflicts with any law, agreement, regulation, order or judgment to which Seller
or Shareholders is subject.
3.3 Assets. Seller has and will transfer to Buyer good and marketable
title to all of the Assets, and upon consummation of the transactions
contemplated hereby, Buyer will acquire good and marketable title to all of the
Assets, free and clear of any claim, mortgage, pledge, security interest,
encumbrance, lien or charge of any kind.
3.4 Compliance with Laws. Seller, Shareholders and the conduct of Seller's
business have not violated and are in compliance in all material respects with
all laws, statutes, ordinances, regulations, rules and orders of any foreign,
federal, state or local government and any other governmental department or
agency relating to the Assets or the business or operations of Seller.
3.5 Litigation. To the best knowledge of Seller and Shareholders, there is
no suit, action, order, arbitration, or legal, administrative or other
proceeding or governmental investigation, pending or threatened against or
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affecting the Assets.
3.6 Insurance. Seller has maintained insurance policies of fire, general
liability and worker's compensation on its business, its employees and the
Assets (the "Policies"). To the best knowledge of Seller and Shareholders, the
Policies provide, and during such period provided, coverage to the extent and in
the manner (a) customary for the industry in which Seller is engaged and (b) as
may be required by law and by any and all contracts to which Seller is a party.
Seller is not in default under any of the Policies, and Seller has not failed to
give any notice or to present any claim under any of the Policies in a due and
timely fashion. All Policies provide sufficient coverage for the risks insured
against and are in full force and effect on the date hereof.
3.7 Employees. To the best knowledge of Seller and Shareholders, neither
Seller nor Shareholders has received any notice that any of the Rehired
Employees (as defined below) intends to terminate his or her employment with
Buyer following the Closing. Upon termination of the employment of any of said
employees, Buyer will not by reason of the transactions contemplated by this
Agreement or anything done prior to the Closing be liable to any of said
employees for so-called "severance pay" or any other payments.
3.8 Finder's Fee. Neither Seller nor Shareholders has employed or made any
agreement with any broker, finder or similar agent which will result in the
obligation of Buyer to pay any finder's fee, brokerage fee or commission or
similar payment in connection with the transactions contemplated hereby.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller and Shareholders as follows:
4.1 Organization. Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
4.2 Authority. Buyer has full right, power and authority, and has taken
all action necessary, to enter into this Agreement and to perform its
obligations hereunder; no other proceedings, corporate or otherwise, on the part
of Buyer are necessary to authorize this Agreement and the transactions
contemplated hereby; this Agreement constitutes a valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms; and none of
the execution, delivery and performance of this Agreement by Buyer violates or
conflicts with any law, agreement, regulation, order or judgment to which Buyer
is subject.
4.3 Finder's Fee. Buyer has not employed or made any agreement with any
broker, finder or similar agent which will result in the obligation of Seller or
Shareholders to pay any finder's fee, brokerage fee or commission or similar
payment in connection with the transactions contemplated hereby.
ARTICLE V.
ACTIONS BY SELLER, SHAREHOLDERS AND BUYER AFTER THE CLOSING
5.1 Further Assurances and Cooperation. From time to time, at the request
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of any party to this Agreement, and without further consideration, the other
parties shall execute and deliver such documents, obtain such third party
consents and take any such other action as may be reasonably necessary in order
to consummate more effectively the transactions contemplated by this Agreement.
5.2 Employee Matters.
(a) Buyer shall extend offers of employment to all of Seller's
employees (such employees who become employed by Buyer are hereinafter referred
to as the "Rehired Employees"). Seller shall terminate the employment of all
Rehired Employees immediately prior to the Closing and shall cooperate with and
use its best efforts to assist Buyer in its efforts to secure satisfactory
employment arrangements with the Rehired Employees.
(b) All wages, salary, bonuses and other compensation and accrued
benefits (including accrued vacation and sick leave) owed to the employees of
Seller through the Closing Date shall be paid by Seller. Seller shall be solely
responsible for all of its employee programs and all obligations and liabilities
thereunder. Neither Buyer nor any of its affiliates shall assume any of Seller's
employee programs or any obligation or liability thereunder.
(c) Promptly following the Closing, Buyer shall grant stock
options to acquire an aggregate of 250,000 shares of Buyer common stock to the
Rehired Employees. Such stock options shall be subject to Buyer's standard terms
and conditions, and shall be apportioned among the Rehired Employees as mutually
agreed upon by Buyer and Seller. Nothing contained in this Agreement, however,
shall confer upon any Rehired Employee any right with respect to continuance of
employment by Buyer, nor shall anything herein interfere with the right of Buyer
to terminate the employment of any of the Rehired Employees at any time, with or
without cause, or restrict Buyer in the exercise of its independent business
judgment in modifying any of the terms and conditions of the employment of the
Rehired Employees.
(d) No provision of this Agreement shall create any third party
beneficiary rights in any Rehired Employee, any beneficiary or dependents
thereof, or any collective bargaining representative thereof, with respect to
the compensation, terms and conditions of employment and benefits that may be
provided to any Rehired Employee by Buyer or under any benefit plan which Buyer
may maintain.
5.3 Survival of Representations, Etc. All representations, warranties,
covenants and agreements of the parties contained in this Agreement or in any
certificate, exhibit, instrument or conveyance delivered by or on behalf of the
parties pursuant hereto are material, shall be deemed to have been relied upon
by the other parties and shall survive the Closing regardless of any
investigation until the first anniversary of the Closing Date.
5.4 Indemnity.
(a) Each party shall indemnify, defend and hold harmless the
other parties against and in respect of any and all claims, demands, losses,
costs, expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorneys' fees (collectively,
"Damages"), that it shall incur or suffer, which arise, result from, or relate
to any breach of, or failure by any party to perform any of its representations,
warranties, covenants or agreements in this Agreement. The party to be
indemnified shall promptly notify the other parties of the existence of any
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claim, demand or other matter to which the other parties' indemnification
obligations would apply, and shall give them a reasonable opportunity to defend
the same at their own expense and with counsel of their own selection; provided
that the party to be indemnified shall at all times also have the right to
participate fully in the defense at its own expense. If a party shall, within a
reasonable time after such notice, fail to defend, the party to be indemnified
shall have the right, but not the obligation, to undertake the defense of, and
to compromise or settle (exercising reasonable business judgment), the claim or
other matter on behalf, for the account, and at the risk, of the other parties.
(b) Each party's right of indemnification, as provided in this
Section 5.4, is not exclusive; it is cumulative in addition to any and all
remedies now or later allowed by law. Shareholders shall be severally, in
accordance with their proportionate interests in Seller, and not jointly, liable
to Buyer for any rights, claims or remedies that Buyer may have against
Shareholders. Notwithstanding anything herein to the contrary, no party shall be
entitled to indemnification pursuant to this Section 5.4 (i) with respect to any
Damages until the aggregate amount of such Damages exceeds $25,000, whereupon
such party shall be entitled to indemnification for all Damages in excess of
such amount, and (ii) with respect to any claims asserted after the first
anniversary of the Closing Date.
5.5 Bulk Sale Provisions. The parties acknowledge that it may not be
practicable to comply or attempt to comply with the procedures of the "Bulk
Sales Act" or similar laws of any or all of the states in which the Assets are
situated or of any other state which may be asserted to be applicable to the
transactions contemplated hereby. Accordingly, to induce Buyer to waive any
requirements for compliance with any or all of such laws, Seller and
Shareholders hereby agree that the indemnity provisions of Section 5.4 shall
apply to any Damages of Buyer arising out of or resulting from the failure of
Buyer, Seller or Shareholders to comply with any such laws.
ARTICLE VI.
MISCELLANEOUS
6.1 Notices. Any notice, request, demand or other communication required
or permitted hereunder shall be in writing and shall be deemed to have been
given if delivered or sent by facsimile transmission, upon receipt, or if sent
by registered or certified mail, upon the sooner of the date on which receipt is
acknowledged or the expiration of three (3) days after deposit in United States
post office facilities properly addressed with postage prepaid. All notices to a
party will be sent to the addresses set forth below or to such other address or
person as such party may designate by notice to each other party hereunder:
If to Buyer: Zhone Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ "▇" ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller or Shareholders: Roundview, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Pge 5
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇ Plant & ▇▇▇▇▇
3400 City Center
▇▇ ▇▇▇▇▇ ▇/▇▇/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
6.2 Entire Agreement. This Agreement constitutes the entire agreement
among the parties pertaining to the subject matter contained in it and
supersedes all prior and contemporaneous agreements, representations and
understandings of the parties. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by all of the parties.
6.3 Public Statements. The parties hereto covenant and agree that, except
as provided for hereinbelow, each will not from and after the date hereof make,
issue or release any public announcement, press release, statement or
acknowledgment of the existence of, or reveal publicly the terms, conditions and
status of, the transactions provided for herein, without the prior written
consent of the other parties; provided, however, that in the case of
announcements, statements, acknowledgments or revelations which any party is
required by law to make, issue or release, the making, issuing or releasing of
any such announcement, statement, acknowledgment or revelation by the party so
required to do so by law shall not constitute a breach of this Agreement.
6.4 No Waiver. No waiver of any of the provisions of this Agreement shall
be deemed, or shall constitute a waiver of any other provisions, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed by the party making the waiver.
6.5 Expenses. Except as otherwise provided herein, the parties shall pay
their own fees and expenses, including their own attorneys' fees, incurred in
connection with this Agreement or any transaction contemplated hereby.
6.6 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
6.7 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective affiliates,
successors and assigns.
6.8 Attorneys' Fees. If any legal action is brought for the enforcement of
this Agreement or because of any alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party shall be entitled to recover attorneys' fees
and all other costs incurred in that action in addition to any other relief to
which it may be entitled.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ZHONE TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO
ROUNDVIEW, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇
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EXHIBIT A
List of Assets
Description Identifier Date Acquired Amount
----------- ---------- ------------- -----------
▇▇▇▇
▇▇▇▇▇▇▇▇ cards for firewall 12/13/1998
Dell PC, chair, floppies, door locks 12/13/1998
Reimb: Compaq, tables, ether hubs and cable 11/23/1998
1999
Gateway E-4200 ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ 06/14/1999
▇▇▇▇▇▇▇ ▇▇▇-▇▇▇ Peggy's SN 0014136505 06/14/1999
Gateway E-4200 Mark's SN 0014315988 06/25/1999
Gateway E-4200 Paul's SN 0014315989 06/25/1999
Gateway E-4200 Build Server SN 0014366425 06/25/1999
8 Port Switch 07/01/1999
16 Port Hub 07/01/1999
Telephone System 07/09/1999
Back Up Drive 07/13/1999
Sparc Stations 07/15/1999
2100 TN Laser printer 07/25/1999
2 486 PCs 07/26/1999
2 Dell Dimension XPS 450 PIII Vern's, Joel's 08/09/1999
2 Dell Dimension XPS 450 PIII Ted's, Heidi's 08/09/1999
Safe SN Z498728 08/13/1999
Shredder 08/13/1999
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ 08/17/1999
Side Chairs 08/17/1999
2100SE Laser printer ▇▇ ▇▇▇▇▇▇▇▇▇▇ 08/17/1999
Xerox Work Centre Copier SN 070801 08/18/1999
HP Color Printer 08/18/1999
Brother Fax Machine 08/18/1999
Overhead projector 08/20/1999
Dell XPS T450 PIII Donna's 09/02/1999
Office Furniture Desks 09/06/1999
Desk Chair Vern's 09/07/1999
Office Furniture Shelf 10/01/1999
Desk Chair Heidi's 10/14/1999
Cash $ 25,000.00
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EXHIBIT B
▇▇▇▇ of Sale
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which are
hereby acknowledged, Roundview, Inc., a Minnesota corporation ("Seller"), does
hereby convey, transfer, assign and deliver to Zhone Technologies, Inc., a
Delaware corporation ("Buyer"), all right, title and interest in and to the
Assets, as such term is defined in the Asset Purchase Agreement dated as of
February 1, 2000 by and among Buyer, Seller and the shareholders of Seller, to
have and to hold by Buyer, its successors and assigns, forever.
Seller for itself, its successors and assigns hereby covenants and agrees
that, at any time and from time to time forthwith upon the written request of
Buyer, Seller will do, execute, acknowledge and deliver or cause to be done,
executed, acknowledged and delivered, each and all of such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and assurances as may
reasonably be required by Buyer in order to assign, transfer, set over, convey,
assure and confirm unto and vest in Buyer, its successors and assigns, title to
the Assets sold, conveyed, transferred and delivered by this ▇▇▇▇ of Sale.
IN WITNESS WHEREOF, Seller has executed this ▇▇▇▇ of Sale as of the 1/st/
day of February, 2000.
ROUNDVIEW, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: /s/ President
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