EXECUTION VERSION
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ASSET SALE AGREEMENT
by and between
iBEAM BROADCASTING CORPORATION
and
▇▇▇▇▇▇▇▇ COMMUNICATIONS, LLC
dated as of October 11, 2001
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions.............................................2
Section 1.2 Interpretation.........................................12
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.1 Sale and Transfer of Assets............................13
Section 2.2 Retained Assets........................................15
Section 2.3 Assumption of Liabilities..............................15
Section 2.4 Retained Liabilities...................................16
Section 2.5 The Purchase Price.....................................16
ARTICLE III
THE CLOSING
Section 3.1 The Closing............................................17
Section 3.2 Deliveries by Seller...................................17
Section 3.3 Deliveries by Purchaser................................19
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF SELLER
Section 4.1 Authorization..........................................19
Section 4.2 Binding Agreement......................................20
Section 4.3 Organization; Qualification of Seller;
Subsidiaries...........................................20
Section 4.4 Governmental Authorization; Third Party
Consents...............................................21
Section 4.5 SEC Reports; Financial Condition.......................21
Section 4.6 Absence of Change......................................21
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Section 4.7 Litigation.............................................22
Section 4.8 Compliance with Laws...................................23
Section 4.9 No Default or Breach; Contractual
Obligations............................................24
Section 4.10 Assets.................................................25
Section 4.11 Taxes..................................................26
Section 4.12 Employees; Employee Compensation.......................26
Section 4.13 Labor Relations........................................27
Section 4.14 Intellectual Property..................................27
Section 4.15 Trade Relations........................................30
Section 4.16 Absence of Undisclosed Liabilities.....................31
Section 4.17 Broker's, Finder's or Similar Fees.....................31
Section 4.18 Takeover Laws..........................................31
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Section 5.1 Corporate Existence and Power..........................32
Section 5.2 Authorization; No Contravention........................32
Section 5.3 Governmental Authorization; Third Party
Consents...............................................32
Section 5.4 Binding Effect.........................................32
Section 5.5 Broker's, Finder's or Similar Fees.....................33
ARTICLE VI
COVENANTS
Section 6.1 Interim Operations of the Business.....................33
Section 6.2 Access; Confidentiality................................34
Section 6.3 Efforts and Actions to Cause Closing to
Occur..................................................35
Section 6.4 Notification of Certain Matters........................36
Section 6.5 Transition of the Business.............................37
Section 6.6 Submission for Court Approval..........................37
Section 6.7 Bidding Procedures.....................................39
Section 6.8 Employee Matters.......................................44
Section 6.9 Prompt Payment of Cure Amounts.........................46
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Section 6.10 Insurance; Risk of Loss................................46
Section 6.11 Accounts Receivable....................................46
Section 6.12 Subsequent Actions.....................................46
Section 6.13 Publicity..............................................47
Section 6.14 Completion of Non-assignable Assigned
Contracts..............................................47
Section 6.15 Tax Matters............................................48
Section 6.16 Acquisition Agreements.................................50
Section 6.17 Bulk Sale..............................................50
Section 6.18 Disclosure Supplements.................................50
Section 6.19 Further Assurances.....................................50
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Obligations of Purchaser to
Effect the Closing.....................................51
Section 7.2 Conditions to Obligations of Seller to
Effect the Closing.....................................56
ARTICLE VIII
TERMINATION
Section 8.1 Termination............................................57
Section 8.2 Effect of Termination..................................60
Section 8.3 Extension; Waiver......................................60
ARTICLE IX
MISCELLANEOUS
Section 9.1 Survival of Covenants, Representations and
Warranties.............................................61
Section 9.2 Fees and Expenses......................................61
Section 9.3 Amendment and Modification.............................61
Section 9.4 Notices................................................62
Section 9.5 Counterparts...........................................63
Section 9.6 Entire Agreement; No Third Party
Beneficiaries..........................................63
Section 9.7 Severability...........................................64
Section 9.8 Governing Law..........................................64
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Section 9.9 Exclusive Jurisdiction.................................64
Section 9.10 Election of Remedies...................................64
Section 9.11 Assignment.............................................65
Section 9.12 Headings...............................................65
Section 9.13 No Third Party Beneficiaries...........................65
SCHEDULES
Schedule 2.2 - Retained Assets
Schedule 2.3 - Assumed Liabilities
Schedule 6.16 - Acquisition Agreements of Seller
Schedule 7.1(c) - Required Consents
Schedule 7.1(n) - IP Agreements
Schedule 7.1(p) - Employees Whose Arrangements Are to be Modified
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ASSET SALE AGREEMENT
Asset Sale Agreement, dated as of October 11, 2001, by and between
iBEAM Broadcasting Corporation, a Delaware corporation ("Seller"), and ▇▇▇▇▇▇▇▇
Communications, LLC, a Delaware limited liability company ("Purchaser").
WHEREAS, Seller is engaged in the business of providing streaming
technology and related services (the "Business"); and
WHEREAS, Seller intends to file a voluntary petition for relief (the
"Petition," and the date such Petition is filed, the "Petition Date") under
Chapter 11 of title 11 of the United States Code, 11 U.S.C. ▇▇.▇▇. 101-1330, as
amended (the "Bankruptcy Code"), in the United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court") (the "Bankruptcy Case"); and
WHEREAS, Purchaser desires to purchase and acquire from Seller
certain assets and rights, and Seller desires to sell, convey, assign and
transfer all of such assets and rights to Purchaser, in the manner and subject
to the terms and conditions set forth herein and as authorized under Sections
105, 363 and 365 of the Bankruptcy Code; and
WHEREAS, Seller desires to assign to Purchaser and Purchaser desires
to assume from Seller, certain liabilities in the manner and subject to the
terms and conditions set forth herein and as authorized under Sections 105, 363
and 365 of the Bankruptcy Code; and
WHEREAS, Purchaser and Seller have executed the Loan Agreement (as
hereinafter defined), of even date herewith, pursuant to which Purchaser will
lend up to $18,000,000 to Seller, as debtor-in-possession, subject to the
conditions set forth in and in accordance with the terms of the Loan Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context clearly requires
otherwise:
"Accounts Receivable" means any and all trade accounts, notes and
other receivables of Seller, iBEAM Broadcasting Kabushiki Kaisha and NextVenue
Europe Limited and all claims relating thereto or arising therefrom.
"Acquired Assets" has the meaning set forth in Section 2.1.
"Affiliate" has the meaning set forth in Rule 12b-2 of the Exchange
Act.
"Agreement" or "this Agreement" shall mean this Asset Sale
Agreement, together with the Schedules hereto and the Disclosure Letter.
"Alternative Bid" shall mean a letter from a Qualified Bidder
stating that (i) such Qualified Bidder offers to purchase the Acquired Assets
upon the terms and conditions set forth in a copy of the Definitive Sale
Documentation, marked to show those amendments and modifications to the
Definitive Sale Documentation, including, but not limited to, price and the time
of Closing, that such Qualified Bidder proposes, (ii) such Qualified Bidder is
prepared to enter into and consummate the transaction not later than 10 days
after entry by the Bankruptcy Court of an order approving such transaction,
subject to receipt of any governmental or regulatory approvals, and (iii) such
Qualified Bidder's offer is irrevocable until the closing of a purchase of the
Acquired Assets.
"Alternative Bid Deadline" has the meaning set forth in Section
6.7(a).
"Alternative Transaction" has the meaning set forth in Section
6.7(e).
"Ancillary Agreements" shall mean the ▇▇▇▇ of Sale, the Instrument
of Assumption, and the Loan Agreement and all exhibits and appendices thereto.
"Applicable Law" shall mean any law, regulation, rule, order,
judgment or decree to which the Business, the Assets, Seller or any of its
Subsidiaries is subject.
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"Assets" means the assets of every type and description, tangible or
intangible, real or personal, that are owned, leased or licensed by Seller or
any of its Subsidiaries.
"Assigned Contracts" means collectively those Contracts listed in
Section 2.1(b) and all Real Property Leases.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Auction" has the meaning set forth in Section 6.7(c)(i).
"Auction Transaction" has the meaning set forth in Section 6.7(e).
"Balance Sheet" shall mean the most recent unaudited balance sheet
of Seller and its Subsidiaries included in the Financial Statements.
"Balance Sheet Date" shall mean the date of the Balance Sheet.
"Bankruptcy Case" has the meaning set forth in the recitals hereof.
"Bankruptcy Code" has the meaning set forth in the recitals hereof.
"Bankruptcy Court" has the meaning set forth in the recitals hereof.
"Bidding Procedures" has the meaning set forth in Section 6.7.
"Bidding Procedures Order" shall mean an order of the Bankruptcy
Court, in form and substance satisfactory to Purchaser, approving, among other
things, (i) sale procedures relating to Seller's disposition of the Acquired
Assets, as set forth in Section 6.7, and (ii) payment of the Termination Fee and
Expense Reimbursement to Purchaser pursuant to Section 6.7.
"Business" has the meaning set forth in the recitals hereof.
"Business Combination" means with respect to any Person any (i)
merger, consolidation or combination to which such Person is a party, (ii) any
sale, dividend, split or other disposition of any capital stock or other equity
interests of such Person, or any acquisition of capital stock or equity
interests or securities of such Person, representing in any such case at least
50% of such class of capital stock or equity interests, (iii) any tender offer
(including, without limitation, a self-tender), exchange
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offer or recapitalization for or affecting the outstanding equity or debt
securities of such Person, (iv) any plan of reorganization in respect of such
Person under Chapter 11 of the Bankruptcy Code, (v) any liquidation, dissolution
or similar transaction involving such Person, (vi) any sale, dividend or other
disposition of all or a material portion of the assets of such Person or (vii)
the entering into of any agreement or understanding, or the granting of any
rights or options, with respect to any of the foregoing.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banks in California or Oklahoma are authorized or obligated by
Applicable Law or executive order to close or are otherwise generally closed.
"Claims" has the meaning set forth in Section 4.7.
"Closing" shall mean the closing referred to in Section 3.1.
"Closing Date" shall mean the date on which the Closing occurs.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company Privacy Policy" means the privacy policy posted on the
Company Website.
"Company Website" means the Internet website located at the URL
address ▇▇▇.▇▇▇▇▇.▇▇▇ and all other Internet websites owned and/or controlled by
Seller.
"Confidentiality Agreement" shall mean the letter agreement dated
August 21, 2001 between Purchaser and Seller.
"Contracts" has the meaning set forth in Section 2.1(b).
"Contractual Obligations" means, as to any Person, any provisions of
any security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument to which such Person is a
party or by which it or any of its property is bound.
"Copyrights" means any foreign or United States copyright
registrations and applications for registration thereof, and any nonregistered
copyrights.
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"Customer Information" means any and all of the personally
identifiable and non-personally identifiable customer information Seller
receives through the Company Website or otherwise.
"Definitive Sale Documentation" shall mean this Agreement, as
executed, together with all Exhibits and Schedules hereto.
"Disclosure Letter" shall mean the disclosure letter of even date
herewith prepared and signed by Seller and delivered to Purchaser simultaneously
with the execution hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" means any trade or business, whether or not
incorporated, that together with Seller would be deemed a "single employer"
within the meaning of Section 4001(b) of ERISA.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Matters" means any one or more of the following: (i) any
change in the market price or trading volume of the common stock of Seller after
the date hereof; (ii) any change arising from and related to the market in
general in which Seller operates the Business (whether in the United States or
internationally), the United States economy as a whole, or the international
economy; (iii) any change arising from earthquakes, acts of war or terrorism, or
military actions; or (iv) any matter listed on Section 1.1 of the Disclosure
Letter.
"Expense Reimbursement" has the meaning set forth in Section 6.7(e).
"Expenses" has the meaning set forth in Section 6.7(e).
"Final Order" shall mean an order or judgment of the Bankruptcy
Court or other court of competent jurisdiction, the implementation or operation
or effect of which has not been stayed, and as to which the time to appeal,
petition for certiorari, or move for reargument or rehearing has expired and as
to which no appeal, petition for certiorari, or other proceedings for reargument
or rehearing shall then be pending or in the event that an appeal, writ of
certiorari, reargument, or rehearing thereof has been sought, such order of the
Bankruptcy Court shall have been determined by the highest
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court to which such order was appealed, or certiorari, reargument or rehearing
shall have been denied and the time to take any further appeal, petition for
certiorari, or move for reargument or rehearing shall have expired; provided,
however, that the possibility that a motion, under Rule 59 or Rule 60 of the
Federal Rules of Civil Procedure or any analogous rule under the Bankruptcy
Code, may be filed with respect to such order shall not prevent such order from
being deemed a Final Order.
"Financial Statements" has the meaning set forth in Section 4.5(b).
"GAAP" shall mean United States generally accepted accounting
principles.
"Governmental Entity" means the government of any nation, state,
city, locality or other political subdivision thereof, any entity or Person
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"Indebtedness" shall mean, at any time and with respect to any
Person, (a) all indebtedness of such Person for borrowed money, (b) all
indebtedness of such Person for the deferred purchase price of property or
services (other than property, including Inventory, and services purchased, and
trade payables, other expense accruals and deferred compensation items arising
in the ordinary course of business, consistent with past practice), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments (other than performance, surety and appeal bonds arising in
the ordinary course of business in respect of which such Person's liability
remains contingent), (d) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations of such Person under
leases which have been or should be, in accordance with GAAP, recorded as
capital leases, to the extent required to be so recorded, (f) all reimbursement,
payment or similar obligations of such Person, contingent or otherwise, under
acceptance, letter of credit or similar facilities, (g) all Indebtedness of
others referred to in clauses (a) through (f) above guaranteed directly or
indirectly by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (i) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness, (ii)
to purchase, sell or lease (as lessee or lessor) property, or to purchase or
sell services, primarily for the purpose of enabling the debtor to make payment
of such Indebtedness, (iii) to supply funds to or
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in any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or such
services are rendered) or (iv) otherwise to assure a creditor against loss in
respect of such Indebtedness, and (h) all Indebtedness referred to in clauses
(a) through (g) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien upon
or in property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness.
"Intellectual Property" shall mean all of the following: Trademarks,
Patents (including any registrations, continuations, continuations in part,
renewals and applications for any of the foregoing), Copyrights (including any
registrations and applications for any of the foregoing), Trade Secrets,
Software and databases used in or necessary for the conduct of the Business as
currently conducted or contemplated to be conducted.
"Inventory" has the meaning set forth in Section 2.1(f).
"Lease Assignment Documents" has the meaning set forth in Section
3.2(b).
"Leased Real Property" shall mean the leasehold interests held by
Seller or any of its Subsidiaries under the Real Property Leases.
"Liabilities" shall mean the debts, liabilities, claims, Liens
(other than Permitted Liens), demands, expenses, commitments and obligations
(whether accrued or not, known or unknown, disclosed or undisclosed, matured or
unmatured, fixed or contingent, asserted or unasserted, liquidated or
unliquidated, arising prior to, at or after the Closing) of Seller or its
Subsidiaries.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien or preference, priority, right or other security
interest or preferential arrangement of any kind or nature whatsoever.
"License Agreements" has the meaning set forth in Section 4.14(c).
"Loan Agreement" means that certain Loan Agreement, by and between
Seller and Purchaser, dated as of the date hereof, including all exhibits,
schedules and appendices thereto.
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"Loan Amount" means the principal amounts, plus all accrued interest
thereon, and fees and expenses, in each case owed by Seller to Purchaser under
the Loan Agreement as of any date of determination.
"Material Adverse Effect" means a material adverse effect on the
Assets, Liabilities, Business, financial condition, results of operations or
prospects of Seller and its Subsidiaries (taken as a whole) other than an effect
resulting from an Excluded Matter. Notwithstanding anything to the contrary
herein and notwithstanding the effects of any of the matters set forth on
Section 1.1 of the Disclosure Letter, the following shall be deemed to be a
Material Adverse Effect: (1) any decrease in Seller's revenues by 20% or more in
any one calendar month as compared to the immediately preceding calendar month,
as such revenues are reported in the Weekly Reporting Certificates (as defined
in the Loan Agreement) delivered by Seller pursuant to the Loan Agreement for
such calendar months; (2) any decrease in Seller's revenues by 20% or more in
any one calendar month as compared to Seller's revenues for the calendar month
ended September 30, 2001, as such revenues are reported in the Weekly Reporting
Certificates (as defined in the Loan Agreement) delivered by Seller pursuant to
the Loan Agreement for such calendar months; or (3) any decrease in the monthly
volume of Streams served in any two consecutive calendar months by 20% or more,
as such volume of Streams are reported in the Weekly Stream Report.
"Patents" means all patents, patent applications and foreign
counterparts thereof.
"Permits" means permits, certificates, licenses, filings, approvals
and other authorizations of any Governmental Entity.
"Permitted Liens" means (i) Liens disclosed in Section 1.1(a) of the
Disclosure Letter; (ii) Liens disclosed on the Financial Statements; (iii) Liens
for Taxes, assessments, duties and similar charges that are not yet due and
payable; (iv) mechanic's, materialman's, carrier's, repairer's and other similar
Liens arising or incurred in the ordinary course of business consistent with
past practices, the existence of which does not, and would not reasonably be
expected to materially impair the value or use and enjoyment of the asset
subject to such Lien, (v) Liens incurred in the ordinary course of business
consistent with past practices since September 30, 2001, the existence of which
does not, and would not reasonably be expected to materially impair the value or
use and enjoyment of the asset subject to such Lien, or (vi) other Liens that do
not secure payment of Indebtedness for borrowed money, the existence of which
does not, and would not reasonably be expected to, materially impair the value
or use and enjoyment of the asset subject to such Lien.
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"Person" shall mean a natural person, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Entity or other entity
or organization.
"Petition" has the meaning set forth in the recitals hereof.
"Petition Date" has the meaning set forth in the recitals hereof.
"Plan" means each "welfare" plan, fund or program (within the
meaning of Section 3(1) of ERISA), each "pension" plan, fund or program (within
the meaning of Section 3(2) of ERISA), and each other material employee benefit
plan, fund, program, agreement or arrangement, in each case, that is sponsored,
maintained, contributed to or required to be contributed to by Seller or by any
trade or business, whether or not incorporated, that together with Seller would
be deemed a "single employer" within the meaning of Section 4001(b) of ERISA, or
to which Seller or any trade or business, whether or not incorporated, for the
benefit of any current or former employee, consultant or director of Seller and
its Subsidiaries.
"Proprietary Software" means all Software owned by Seller.
"Purchase Price" has the meaning set forth in Section 2.5.
"Purchaser" has the meaning set forth in the recitals hereof.
"Qualified Alternative Bid" has the meaning set forth in Section
6.7(b).
"Qualified Bidder" one or more Persons who the Board of Directors of
Seller has determined in the exercise of its fiduciary duty is financially able
to consummate the purchase, either jointly or separately, of all of the Acquired
Assets; provided, that, for all purposes, Purchaser shall constitute a Qualified
Bidder for purposes of this Agreement.
"Real Property" shall mean the Leased Real Property and any other
real property owned by Seller.
"Real Property Leases" shall mean the real property leases to which
Seller and/or a Subsidiary of Seller is a party described in Section 2.1(c).
"Requirements of Law" means, as to any Person, any law, statute,
treaty, rule, regulation, right, qualification, license or franchise or
determination of an arbitrator
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or a court or other Governmental Entity or stock exchange, in each case
applicable or binding upon such Person or any of its property or to which such
Person or any of its property is subject or pertaining to any or all of the
transactions contemplated or referred to herein.
"Retained Assets" has the meaning set forth in Section 2.2.
"Retained Liabilities" has the meaning set forth in Section 2.4.
"Sale" has the meaning set forth in Section 6.7.
"Sale Hearing" has the meaning set forth in Section 6.7.
"Sale Order" shall mean an order of the Bankruptcy Court, in form
and substance satisfactory to Purchaser, approving the Agreement and
consummation of the Transactions, under Sections 105, 363 and 365 of the
Bankruptcy Code.
"SEC Reports" with respect to any Person means all forms, reports,
statements and other documents (including exhibits, annexes, supplements and
amendments to such documents) required to be filed by it, or sent or made
available by it to its security holders, under the Exchange Act, the Securities
Act, any national securities exchange or quotation system or comparable
Governmental Entity since the date of such Person's initial public offering.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" has the meaning set forth in the recitals hereof.
"Software" means any computer software programs, including, without
limitation, any computer software programs that incorporate and run Seller's
pricing models, formulas and algorithms, source code, object code, data,
databases, compilations and documentation, including user manuals and training
materials.
"Streams" means individual instances of simultaneously downloaded
and viewed or listened to audio and/or video content.
"Subsidiary" shall mean, with respect to any Person, any corporation
or other organization, whether incorporated or unincorporated, of which (a) at
least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the Board of Directors or others
performing similar functions with
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respect to such corporation or other organization is directly or indirectly
owned or controlled by such Person or by any one or more of its Subsidiaries, or
by such Person and one or more of its Subsidiaries or (b) such Person or any
other Subsidiary of such Person is a general partner (excluding any such
partnership where such Person or any Subsidiary of such party does not have a
majority of the voting interest in such partnership).
"Takeover Laws" has the meaning set forth in Section 4.18.
"Tax" or "Taxes" shall mean all taxes, charges, fees, duties,
levies, penalties or other assessments imposed by any federal, state, local or
foreign Governmental Entity, including income, gross receipts, excise, personal
and real property (including leaseholds and interests in leaseholds), sales,
gain, use, license, custom duty, ad valorem, environmental, unemployment,
capital stock, transfer, franchise, payroll, withholding, social security,
minimum, estimated, profit, gift, severance, value added, disability, premium,
recapture, credit, occupation, service, leasing, employment, stamp and other
taxes, charges, fees, duties, levies, penalties or other assessments, and shall
include interest, penalties or additions attributable thereto or attributable to
any failure to comply with any requirement regarding Tax Returns.
"Tax Return" shall mean any return (including information and
estimated returns), report, statement, declaration or other document (including
any related or supporting information) filed or required to be filed with any
United States federal, state, local or foreign Governmental Entity in connection
with any determination, assessment or collection of any Tax or other
administration of any laws, regulations or administrative requirements relating
to taxes, including any amendments thereto.
"Third Party" shall mean any Person other than Seller, Purchaser or
any of their respective Affiliates.
"Termination Fee" has the meaning set forth in Section 6.7(e).
"Trademarks" means any foreign or U.S. trademarks, service marks,
trade dress, trade names, brand names, designs and logos, corporate names,
product or service identifiers, and general intangibles of like nature whether
registered or unregistered, together with all of the goodwill relating thereto
and all registrations and applications for registration thereof.
"Trade Secrets" means any confidential information, trade secrets,
research records, processes, procedures, manufacturing formulas, technical
know-how,
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technology, blue prints, designs, plans, models and methodologies (whether
patentable and whether reduced to practice), invention disclosures and
improvements thereto.
"Transactions" shall mean all the transactions provided for or
contemplated by this Agreement and/or the Ancillary Agreements.
"Transfer Taxes" has the meaning set forth in Section 6.15(a).
"Weekly Stream Report" means a report, delivered to Purchaser
simultaneous with the Weekly Reporting Certificate pursuant to the Loan
Agreement, and certified by an authorized officer of Seller, that details the
weekly volume of Streams.
Section 1.2 Interpretation.
(a) When a reference is made in this Agreement to a section,
article, paragraph, exhibit or schedule, such reference shall be to a section,
article, paragraph, exhibit or schedule of this Agreement unless clearly
indicated to the contrary.
(b) Whenever the words "include", "includes" or "including"
are used in this Agreement they shall be deemed to be followed by the words
"without limitation."
(c) The words "hereof", "herein" and "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement.
(d) The meaning assigned to each term defined herein shall be
equally applicable to both the singular and the plural forms of such term, and
words denoting any gender shall include all genders. Where a word or phrase is
defined herein, each of its other grammatical forms shall have a corresponding
meaning.
(e) A reference to any party to this Agreement or any other
agreement or document shall include such party's predecessors, successors and
permitted assigns.
(f) A reference to any legislation or to any provision of any
legislation shall include any amendment to, and any modification or re-enactment
thereof, any legislative provision substituted therefor and all regulations and
statutory instruments issued thereunder or pursuant thereto.
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(g) References to $ are to United States Dollars.
(h) The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.1 Sale and Transfer of Assets. On the terms and subject to
the conditions set forth in this Agreement, at the Closing Seller shall
unconditionally sell, convey, assign, transfer and deliver to Purchaser and/or
one or more of its Affiliates or Subsidiaries, as applicable, and Purchaser
and/or one or more of its Affiliates or Subsidiaries, as applicable, shall
purchase, acquire and accept from Seller, free and clear of all Liens, Claims
and interests (except for Permitted Liens and Assumed Liabilities), all of
Seller's right, title and interest in and to the Assets, properties, rights,
claims, contracts and businesses of every kind, character and description,
whether tangible or intangible, whether real, personal or mixed, whether
accrued, contingent or otherwise, and wherever located which are used in or are
related to the Business, other than the Retained Assets (collectively, the
"Acquired Assets"), including, without limitation:
(a) all Intellectual Property;
(b) all rights of Seller in and to all supply agreements,
License Agreements, services agreements, advisory agreements, promotional
agreements, confidentiality agreements (under which Seller or any Subsidiary of
Seller has provided information to or received information from a Third Party),
all purchase orders for the sale or purchase of goods or services, or both, and
all other contracts and other agreements of whatever nature to which Seller is a
party (collectively, the "Contracts");
(c) all rights of Seller in and to leases with respect to the
Real Property;
(d) all books, files, data, customer and supplier lists,
Customer Information, cost and pricing information, business plans, quality
control
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records and manuals, blueprints, research and development files, personnel
records and all other records of Seller;
(e) all personal computers, computer hardware and Software of
Seller;
(f) all inventory, supplies, finished goods, works in process,
goods-in-transit, packaging materials and other consumables of Seller (the
"Inventory"), including Inventory (A) in transit from suppliers of the Business
or (B) held by suppliers of the Business;
(g) all Permits of Seller;
(h) all machinery, vehicles, tools, equipment, furnishings,
office equipment, fixtures, furniture, spare parts and other fixed Assets which
are used in the Business, and which are owned or leased by Seller on the Closing
Date;
(i) all advertising or promotional materials of Seller;
(j) all manufacturer's warranties to the extent related to the
Assets and all claims under such warranties;
(k) all rights to the telephone numbers (and related directory
listings), Internet domain names, and Internet sites used by Seller;
(l) all prepaid expenses of Seller;
(m) all Tax refunds and recoveries and similar benefits of
Seller;
(n) all rights, privileges, claims, demands, choses in action,
prepayments, deposits, refunds, indemnification rights against Third Parties,
warranty claims (to the extent transferable) against Third Parties, offsets and
other claims of Seller (other than Accounts Receivable) against Third Parties;
(o) all security deposits, ▇▇▇▇▇▇▇ deposits and all other
forms of security placed with Seller for the performance of a contract or
agreement which otherwise constitute a portion of the Assets;
(p) all investments;
14
(q) all rights with respect to bank accounts of Seller;
(r) all insurance policies for the benefit of Seller or in
respect of the Business or Assets and all rights of every nature and description
under or arising out of such policies;
(s) all Accounts Receivable;
(t) customer relationships, the goodwill and all other
intangible assets relating to, symbolized by or associated with the Business;
and
(u) all other assets and properties related to or used in
connection with the Business.
Section 2.2 Retained Assets. Notwithstanding Section 2.1, the
Acquired Assets shall not include the Assets which are to be retained by Seller
and not sold or assigned to Purchaser (collectively, the "Retained Assets"),
which are listed in Schedule 2.2. Notwithstanding anything to the contrary in
this Agreement, the following shall be deemed Retained Assets: (i) all cash and
cash equivalents; (ii) all preference or avoidance claims and actions of Seller,
including, without limitation, any such claims and actions arising under
Sections 544, 547, 548, 549 and 550 of the Bankruptcy Code; (iii) Seller's
rights under this Agreement and all cash and non-cash consideration payable or
deliverable to Seller pursuant to the terms hereof; and (iv) insurance proceeds,
claims and causes of action with respect to or arising in connection with (A)
any Contract which is not assigned to Purchaser at Closing; or (B) any item of
tangible or intangible property not acquired by Purchaser at the Closing.
Section 2.3 Assumption of Liabilities. (a) At the Closing, Purchaser
shall assume, and shall be solely and exclusively liable for, the following
Liabilities of Seller and no others (collectively, the "Assumed Liabilities"):
all obligations of Seller (i) under the Assigned Contracts that arise after the
Closing Date or that arise prior to the Closing Date and require performance, in
whole or in part, after the Closing Date or (ii) otherwise relating to the other
Acquired Assets, but only to the extent set forth on Schedule 2.3.
(b) Nothing contained in this Agreement shall require
Purchaser or any of its Affiliates to pay, perform or discharge any Assumed
Liability so long as it shall in good faith contest or cause to be contested the
amount or validity thereof.
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(c) Nothing contained in this Section 2.3 or in any instrument
of assumption executed by Purchaser at the Closing shall release or relieve
Seller from its representations, warranties, covenants and agreements contained
in this Agreement or any certificate, schedule, instrument, agreement or
document executed pursuant hereto or in connection herewith.
(d) Notwithstanding the foregoing, Purchaser and its
Affiliates shall not, and nothing in this Agreement shall require Purchaser
and/or its Affiliates to, assume or be liable or otherwise be responsible for
any Liabilities of Seller or its Subsidiaries with respect to any Plan, except
as may be required by law or pursuant to any Assigned Contracts.
Section 2.4 Retained Liabilities. Notwithstanding anything in this
Agreement to the contrary, Purchaser shall not assume, and shall be deemed not
to have assumed, any Liabilities of Seller, any of its Subsidiaries or the
Business, other than the Assumed Liabilities specified in Section 2.3(a)
(collectively, the "Retained Liabilities").
Section 2.5 The Purchase Price. (a) The purchase price for the
Acquired Assets shall consist of (x) cash consideration of $25,000,000 (the
"Cash Consideration") plus (y) the assumption by Purchaser of the Assumed
Liabilities (collectively, the "Purchase Price").
(b) Payment of Purchase Price; Repayment of Loan Amount. At
the Closing, Purchaser shall pay Seller the Cash Consideration by wire transfer
or by other immediately available funds to an account specified in writing by
Seller at least two (2) Business Days prior to the Closing; provided, however,
that Purchaser shall offset the Loan Amount against the Cash Consideration.
(c) Allocation of Purchase Price. The parties agree that, for
all tax and other reporting purposes, Purchaser shall provide Seller with an
allocation of the Purchase Price among the Acquired Assets and Assumed
Liabilities not later than 60 days after the Closing in accordance with Section
1060 of the Code. Seller shall have the right to propose changes to such
allocation, provided that Purchaser shall have ultimate discretion to reject any
such proposals unless such rejection would be patently unreasonable. The parties
shall follow such purchase price allocation for purposes of filing Internal
Revenue Service Form 8594 and all other Tax Returns and for all other purposes,
and shall not voluntarily take any position inconsistent therewith. Each party
hereto shall prepare and timely file all applicable Internal Revenue Service and
other forms, to cooperate with the other party in the preparation of such forms,
and to furnish
16
the other party with a copy of such forms prepared in draft, within a reasonable
period before the filing due date thereof. If the Internal Revenue Service or
any other governmental entity responsible for the administration or collection
of any tax (a "Taxing Authority") proposes a different allocation, Seller shall
promptly notify Purchaser, and Purchaser shall have the right, but not the
obligation, to control (at the joint expense of Purchaser and Seller) any
resulting proceedings and to determine whether and when to settle any such
claim, assessment or dispute relating thereto. Seller shall provide Purchaser
with such information and shall take such actions (including, without
limitation, executing documents and powers of attorney in connection with such
proceedings) as may be reasonably requested by Purchaser to carry out the
purposes of this section.
(d) Any obligation of Seller to Purchaser pursuant to this
Agreement, including the obligations set forth in this Section 2.5, shall
constitute administrative expenses of Seller under sections 503(b) and 507(a)(1)
of the Bankruptcy Code.
ARTICLE III
THE CLOSING
Section 3.1 The Closing. Upon the terms and subject to the
conditions of this Agreement, the consummation of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at
10:00 a.m., New York time, on the first Business Day following the satisfaction
and/or waiver of all conditions to closing set forth in Article VII (other than
conditions which can be satisfied only by the delivery of certificates, opinions
or other documents at the Closing), unless another date and/or place is agreed
in writing by each of the parties hereto.
Section 3.2 Deliveries by Seller. At the Closing, Seller shall
deliver or cause to be delivered to Purchaser (unless previously delivered), the
following:
(a) a duly executed ▇▇▇▇ of sale in form and substance
reasonably satisfactory to Purchaser (the "▇▇▇▇ of Sale");
(b) duly executed counterparts of one or more instruments of
assignment and assumption, in form and substance reasonably satisfactory to
Purchaser, with respect to all Leased Real Property (the "Lease Assignment
Documents");
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(c) copies of all leases or subleases to Third Parties with
respect to all or any portion of any of the Real Property;
(d) all documents of title and instruments of conveyance
necessary to transfer record and/or beneficial ownership to Purchaser of all
automobiles, trucks, trailers, vehicles (and any other property owned by Seller
or any of its Subsidiaries which require execution, endorsement and/or delivery
of a document in order to vest record or beneficial ownership thereof in
Purchaser) which constitute Acquired Assets pursuant to this Agreement;
(e) executed copies of the consents required under Section
7.1(c);
(f) all documents containing or relating to "know-how" to be
acquired by Purchaser pursuant hereto;
(g) all of the books, files and other records of Seller
referred to in Section 2.1(d);
(h) the opinion of counsel referred to in Section 7.1(b);
(i) the Officers' Certificate referred to in Section 7.1(g);
(j) a certification of non-foreign status for Seller in the
form and manner which complies with the requirements of Section 1445 of the Code
and the regulations promulgated thereunder;
(k) all such other documents of title, deeds, endorsements,
assignments and other instruments of sale, conveyance or transfer as, in the
reasonable opinion of Purchaser's counsel, are necessary to vest in Purchaser
good and marketable title to the Acquired Assets;
(l) instruments of assignment or transfer, in form suitable
for recording in the appropriate office or bureau, effecting the transfer of the
Copyrights, Trademarks and Patents owned or held by Seller (collectively, the
"Intellectual Property Instruments");
(m) a certified copy of each of the Bidding Procedures Order,
Sale Order, and the docket of the Bankruptcy Court evidencing the entry of the
Bidding Procedures Order and the Sale Order; and
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(n) all other previously undelivered documents required to be
delivered by Seller to Purchaser at or prior to the Closing in connection with
the Transactions.
Section 3.3 Deliveries by Purchaser.
At the Closing, Purchaser shall deliver or cause to be delivered to
Seller (unless previously delivered), the following:
(a) the Cash Consideration, as provided in Section 2.5;
(b) a duly executed instrument of assumption in form and
substance reasonably satisfactory to Seller (the "Instrument of Assumption");
(c) a duly executed counterpart of each Lease Assignment
Document applicable to Purchaser; and
(d) all other previously undelivered documents required to be
delivered by Purchaser to Seller at or prior to the Closing in connection with
the Transactions.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
Section 4.1 Authorization. Subject to the entry of the Sale Order,
the execution, delivery and performance by Seller of this Agreement and each of
the other Ancillary Agreements to which it is party and the transactions
contemplated hereby and thereby (i) have been duly authorized by all necessary
corporate actions of Seller; (ii) do not contravene the terms of the Certificate
of Incorporation or the Bylaws; (iii) do not violate, conflict with or result in
any breach, default or contravention of (or with due notice or lapse of time or
both would result in any breach, default or contravention of), or the creation
of any Lien under, any Contract of Seller or its Subsidiaries or any Requirement
of Law applicable to Seller or its Subsidiaries; and (iv) do not violate any
judgment, injunction, writ, award, decree or order of any nature (collectively,
"Orders")
19
of any Governmental Entity against, or binding upon, Seller, except in the cases
of clauses (iii) and (iv) for such violations, conflicts, breaches or defaults
which would not have a Material Adverse Effect. The Board of Directors of Seller
has resolved to recommend that the Bankruptcy Court approve this Agreement, the
Ancillary Agreements and the Transactions; provided that such recommendation may
be withdrawn, modified or amended only in accordance with the provisions of
Section 6.7. Subject to the entry of the Bidding Procedures Order, Seller has
full power and authority to grant the Termination Fee and the Expense
Reimbursement, and the Termination Fee and Expense Reimbursement shall
constitute administrative expenses of Seller under Sections 503(b) and 507(a)(1)
of the Bankruptcy Code.
Section 4.2 Binding Agreement. This Agreement and the Loan Agreement
have been, and as of the Closing Date each of the other Ancillary Agreements to
which Seller is party will have been, duly executed and delivered by Seller,
and, subject to the entry of the Sale Order, this Agreement and the Loan
Agreement constitute, and as of the Closing Date each of the other Ancillary
Agreements will constitute, the legal, valid and binding obligations of Seller,
enforceable against Seller in accordance with their terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability (regardless of whether considered in a
proceeding at law or in equity).
Section 4.3 Organization; Qualification of Seller; Subsidiaries. (a)
Except as set forth in Section 4.3 of the Disclosure Letter, Seller and each of
its Subsidiaries: (a) is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware; (b) has all requisite
power and authority to own, lease, license and operate its properties and assets
and to carry on its business as now conducted and as presently proposed to be
conducted; and (c) is duly qualified as a foreign corporation, licensed and in
good standing under the laws of each jurisdiction in which its ownership, lease
or operation of property or the conduct of its business requires such
qualification and in which the failure to so qualify would have a Material
Adverse Effect. Subject to the entry of the Sale Order, Seller has all corporate
power and authority to execute, deliver and perform its obligations under this
Agreement and each of the other Ancillary Agreements to which it is party.
(b) Section 4.3(b) of the Disclosure Letter sets forth a true and
complete list of each of the Subsidiaries of Seller. Except as set forth in
Section 4.3(b) of the Disclosure Letter, Seller owns all of the issued and
outstanding capital stock of the Subsidiaries, free and clear of all Liens. All
of such shares of capital stock are duly
20
authorized, validly issued, fully paid and non-assessable, and were issued in
compliance with the registration and qualification requirements of applicable
foreign, federal and securities laws. iBEAM Broadcasting Kabushiki Kaisha and
NextVenue Europe Limited own no Assets and have no Liabilities other than as set
forth on Section 4.3(b) of the Disclosure Letter.
Section 4.4 Governmental Authorization; Third Party Consents. Except
as set forth in Section 4.4 of the Disclosure Letter, no material approval,
consent, compliance, exemption, authorization or other action by, or notice to,
or filing with, any Governmental Entity or any other Person, and no lapse of a
waiting period under a material Requirement of Law, is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, Seller of this Agreement, each of the other Ancillary Agreements to
which it is a party or the transactions contemplated hereby and thereby.
Section 4.5 SEC Reports; Financial Condition.
(a) Seller has filed all SEC Reports and has made available to
the Purchaser each SEC Report. The SEC Reports of Seller, including any
financial statements or schedules included or incorporated therein by reference,
(i) comply in all material respects with the requirements of the Exchange Act or
the Securities Act or both, as the case may be, applicable to those SEC Reports
and (ii) did not at the time they were filed contain any untrue statement of a
material fact or omit to state a material fact required to be stated or
necessary in order to make the statements made in those SEC Reports, in light of
the circumstances under which they were made, not misleading.
(b) Each of the consolidated balance sheets of Seller and the
related statements of income, stockholders' equity and cash flow, together with
the notes thereto, which are included in or incorporated by reference into the
SEC Reports of Seller (the "Financial Statements") fairly present, in all
material respects, the consolidated financial position of Seller as of the
respective dates thereof, and the consolidated results of operations and cash
flows of Seller as of the respective dates or for the respective periods set
forth therein, all in conformity with GAAP consistently applied during the
periods involved, except as otherwise set forth in the notes thereto and
subject, in the case of unaudited quarterly financial statements, to normal
year-end audit adjustments.
Section 4.6 Absence of Change. Since December 31, 2000, except as
fully disclosed in SEC Reports filed on or before the date hereof or as set
forth in Section 4.6 of the Disclosure Letter to the extent and only to the
extent such matters are
21
in effect on October 11, 2001 and without giving effect to any further adverse
developments in connection therewith after October 11, 2001, there has not been:
(a) any Material Adverse Effect;
(b) any satisfaction, discharge or payment of any liability or
obligation (including Indebtedness) by Seller, except in the ordinary course of
business and that is not material to the Acquired Assets, Assumed Liabilities or
the Business;
(c) any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets and
Intellectual Property;
(d) any resignation or termination of employment of any
officer or key employee of Seller;
(e) any material transaction in which Seller participated that
is outside the ordinary course of business, including any declaration, setting
aside or payment or other distribution with respect to any of Seller's capital
stock, or any direct or indirect redemption, purchase, or other acquisition of
any such stock by Seller;
(f) any material change in Seller's accounting principles or
practice except as required by reason of a change in GAAP; or
(g) any arrangement or commitment by Seller to do any of the
things described in this Section 4.6.
For purposes of this Section 4.6, the filing with the Bankruptcy
Court of a Petition commencing the Bankruptcy Case shall not constitute a
Material Adverse Effect; provided, however, that the effects of the filing of
such Petition may constitute a Material Adverse Effect.
Section 4.7 Litigation. Except as set forth on Section 4.7 of the
Disclosure Letter, there are no actions, suits, proceedings, claims, complaints,
disputes, mediations, controversies, arbitrations or investigations
(collectively, "Claims") pending or, to the knowledge of Seller, threatened, at
law, in equity, in arbitration, in mediation or before any Governmental Entity
against Seller or any of its Subsidiaries or relating to the Acquired Assets or
the Assumed Liabilities.
Section 4.8 Compliance with Laws.
22
(a) Seller and each of its Subsidiaries is, and since January
1, 2000 has been, in compliance in all material respects with all Requirements
of Law and all Orders issued by any court or Governmental Entity against Seller
or its Subsidiaries, as applicable. There is no existing or, to Seller's
knowledge, proposed Requirement of Law that would reasonably be expected to
prohibit or restrict Seller from conducting its business in any material
respect, or otherwise have a Material Adverse Effect.
(b) (i) Seller and each of its Subsidiaries have all material
Permits that are necessary for the conduct of their respective businesses as
presently conducted, (ii) such Permits are in full force and effect, and (iii)
no violations are or have been recorded in respect of any Permit.
(c) No expenditure in excess of $50,000 is presently required
by Seller to comply with any existing Requirement of Law or Order.
Section 4.9 No Default or Breach; Contractual Obligations.
(a) Section 4.9(a) of the Disclosure Letter contains a correct
and complete list of all Contracts (the "Material Contracts") pursuant to which
Seller has any rights or benefits or undertakes any obligations or liabilities
with respect to the Business or the Acquired Assets or Assumed Liabilities, in
each case that:
(i) have a duration of one year or more and are not
terminable without penalty upon 90 days or less prior written notice by
any party;
(ii) require or could reasonably be expected to require
any party thereto to pay $10,000 or more in any 12 month period, or
$25,000 or more 2 in the aggregate;
(iii) require any severance or retention payments to
employees of Seller or any Subsidiary;
(iv) contain any non-competition covenant or exclusivity
arrangement;
23
(v) constitute a lease, license, arrangement or other
Contract providing in whole or in part for the use of, or limiting the use
of, any Intellectual Property;
(vi) regard the employment, services, consulting,
termination or severance from employment relating to or for the benefit of
any director, officer, employee, sales agent, distributor, dealer,
independent contractor or consultant of Seller or any Subsidiary;
(vii) constitute (x) a trust indenture, mortgage,
promissory note, loan agreement, security agreement, pledge agreement,
deed of trust, guarantee, keep well agreement or other Contract for the
borrowing of money or guarantee of obligation in an amount exceeding
$10,000, or (y) letters of credit and surety, indemnity, performance and
similar bonds;
(viii) constitute a collective bargaining agreement;
(ix) constitute joint venture, partnership or similar
Contracts involving a sharing of profits or expenses (including but not
limited to joint research and development and joint marketing contracts);
(x) constitute asset purchase agreements or other
acquisition or divestiture agreements, including, but not limited to, any
Contracts relating to the sale, lease or disposal of any Acquired Assets
or involving continuing indemnity or other obligations;
(xi) constitute broker, sales agency, manufacturer's
representative, marketing or distributorship agreements;
(xii) constitute Contracts or arrangements with respect
to the representation of the Business in foreign countries;
(xiii) constitute Real Property Leases;
(xiv) constitute lease agreements providing for the
leasing of material personal property primarily used in, or held for use
primarily in connection with, the Business;
24
(xv) constitute any Contract under which any Liens,
except for Permitted Liens, exist with respect to any Acquired Asset;
(xvi) constitute any other Contracts or commitments that
are material to the Business, the Acquired Assets or Assumed Liabilities;
or
(xvii) constitute a Contract entered into by Seller or
any of its Subsidiaries relating primarily to the Business, Acquired
Assets or Assumed Liabilities, other than in the ordinary course of
business consistent with past practice.
(b) Except as set forth in Section 4.9(b) of the Disclosure
Letter: (i) all of the Material Contracts are in full force and effect, (ii)
Seller is not, and to the knowledge of Seller none of the other parties to the
Material Contracts is, in default under, and no event has occurred which, with
the passage of time or giving of notice or both, would result in Seller, or to
the knowledge of Seller any of the other parties to the Material Contracts,
being in default under any of the terms of the Material Contracts, and (iii)
none of the Material Contracts requires the consent of any other party thereto
in connection with the transactions contemplated by this Agreement except, in
the case of clause (i) above, for failures to be in full force and effect which
have not had, or would not reasonably be expected to have, a Material Adverse
Effect, in the case of clause (ii) above, for such defaults which have not had,
or would not reasonably be expected to have, a Material Adverse Effect, and in
the case of clause (iii) above, for consents the absence of which have not had,
or would not reasonably be expected to have, a Material Adverse Effect.
(c) Seller has no material oral agreements with respect to the
Acquired Assets, the Assumed Liabilities, or the Business.
Section 4.10 Assets.
(a) Seller and each of its Subsidiaries owns and has good,
valid, and marketable title to all of its Assets which are Acquired Assets, in
each case free and clear of all Liens, except for Permitted Liens.
(b) The Acquired Assets include all rights, properties and
other Assets used by Seller and its Subsidiaries to conduct the Business or
necessary to
25
permit Purchaser to conduct the Business after the Closing in all material
respects in the same manner as such Business has been conducted by Seller and
its Subsidiaries prior to the date hereof.
(c) Upon consummation of the transactions contemplated hereby,
Purchaser will have acquired good and marketable title in and to, or a valid
leasehold interest in or assignment of each of the Acquired Assets, free and
clear of all Liens.
Section 4.11 Taxes. Except as set forth on Section 4.11 of the
Disclosure Letter, Seller has paid all of its Taxes which have come due and are
required to be paid by it, other than Taxes being disputed by Seller in good
faith for which adequate reserves have been made in accordance with GAAP. Seller
has timely filed or caused to be filed all Tax Returns that it is required to
file, and all such Tax Returns are accurate and complete. With respect to all
Tax Returns of Seller, (i) there is no unassessed Tax deficiency proposed or, to
the knowledge of Seller, threatened against Seller or pertaining to the Acquired
Assets and (ii) no audit is in progress with respect to any Tax Return, no
extension of time is in force with respect to any date on which any Tax Return
was or is to be filed and no waiver or agreement is in force for the extension
of time for the assessment or payment of any Tax. All provisions for Tax
liabilities of Seller with respect to the Financial Statements have been made in
accordance with GAAP consistently applied, and all liabilities for Taxes of
Seller have been adequately provided for on the Financial Statements. There are
no Liens for Taxes upon any of the Acquired Assets, except for statutory Liens
for Taxes not yet due.
Section 4.12 Employees; Employee Compensation.
(a) Seller has complied in all material respects with all
applicable state and federal equal employment opportunity and other laws related
to employment and employment practices, terms and conditions of employment,
wages, hours of work, and occupational safety and health. To Seller's knowledge,
no charges or investigations with respect to Seller or its Subsidiaries are
pending or threatened before the Equal Employment Opportunity Commission, or any
other state or federal agency responsible for the prevention of unlawful
employment practices. Except as set forth in Section 4.12(a) of the Disclosure
Letter, to Seller's knowledge, there are no Claims pending or threatened
regarding the breach of any express or implied contract of employment, any law
or regulation governing employment or the termination thereof, or any other
discriminatory, wrongful or tortious conduct by Seller or its Subsidiaries in
connection with the employment relationship. To Seller's knowledge, no employee
of Seller or any of its Subsidiaries is or will be in violation of any judgment,
decree or
26
order, or any term of any employment contract, patent disclosure agreement, or
other contract or agreement relating to the relationship of any such employee
with Seller or any of its Subsidiaries or any other party because of the nature
of the business conducted by Seller or any of its Subsidiaries or to the use by
the employee of his or her best efforts with respect to such business. Seller
and its Subsidiaries are and have been in compliance with the requirements of
the Worker Adjustment and Retraining Notification Act of 1988 and any similar
state or local law governing layoffs and/or employment termination.
(b) Section 4.12(b) of the Disclosure Letter sets forth a
complete and correct list of all employees of Seller and its Subsidiaries and
all compensation (whether in the form of stock, securities or otherwise) paid or
to be paid for the current fiscal year of Seller and its Subsidiaries.
(c) No liability under Title IV or Section 302 of ERISA has
been incurred by Seller or any ERISA Affiliate that has not been satisfied in
full, and no condition exists that presents a material risk to Seller or any
ERISA Affiliate of incurring any such liability, other than liability for
premiums due the Pension Benefit Guaranty Corporation (which premiums have been
paid when due).
Section 4.13 Labor Relations. Except as set forth in Section 4.13 of
the Disclosure Letter, (i) Seller is not engaged in any unfair labor practice as
defined in the National Labor Relations Act, (ii) there is (A) no unfair labor
practice charge or complaint against Seller or its Subsidiaries pending or
threatened before the National Labor Relations Board or any similar agency, (B)
no grievance or arbitration proceeding arising out of or under collective
bargaining agreements pending or, to the knowledge of Seller, threatened against
Seller or its Subsidiaries, and (C) no strike, labor dispute, slowdown, stoppage
or lockout pending or, to the knowledge of Seller, threatened against Seller or
its Subsidiaries, (iii) Seller is not a party to any collective bargaining
agreement or similar contract, (iv) there is no union representation question
existing with respect to the employees of Seller, and (v) none of Seller
employees is represented by any labor organization and no union organizing
activities are taking place. Except as set forth in Section 4.13 of the
Disclosure Letter, to the knowledge of Seller, no officer or key employee, or
any group of key employees, intends to terminate his, her or their employment
with Seller. Except as set forth in Section 4.13 of the Disclosure Letter,
Seller has not taken any steps to terminate the employment of any officer, key
employee or group of key employees, nor does it have any plans to do so.
Section 4.14 Intellectual Property.
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(a) Section 4.14(a) of the Disclosure Letter sets forth, for
all Intellectual Property owned by Seller, a complete and accurate list of all
U.S. and foreign: (i) Patents; (ii) registered Trademarks and material
unregistered Trademarks; and (iii) registered Copyrights and material
unregistered Copyrights.
(b) Section 4.14(b) of the Disclosure Letter lists all
contracts for Software that is licensed, leased or otherwise used by Seller
(other than off-the-shelf Software), and all Software that is owned by Seller
("Proprietary Software"), and identifies which Software is owned, licensed,
leased, or otherwise used, as the case may be.
(c) Section 4.14(c) of the Disclosure Letter sets forth a
complete and accurate list of all agreements (whether verbal or written)
granting or obtaining any right to use or practice any rights under any
Intellectual Property, to which Seller is a party or otherwise bound, as
licensee or licensor thereunder, including, without limitation, license
agreements, settlement agreements and covenants not to ▇▇▇ (collectively, the
"License Agreements").
(d) (i) Seller is the owner of all, or has a license or
right to use, sell and license all Intellectual Property, free and clear of all
Liens.
(ii) Except as set forth in Section 4.14(d)(ii) of the
Disclosure Letter, no Claim is pending, or to the knowledge of Seller
threatened, against Seller relating to Intellectual Property.
(iii) To the knowledge of Seller, any Intellectual
Property owned or used by Seller has been duly maintained, is valid and
subsisting, in full force and effect and has not been cancelled, expired
or abandoned, nor does it infringe upon or otherwise violate any
intellectual property rights of others.
(iv) Except as set forth in Section 4.14(d)(iv) of the
Disclosure Letter, Seller has not received notice from any third party
regarding any actual or potential infringement or misappropriation by
Seller of any intellectual property of such third party, and Seller has no
knowledge of any basis for such a claim against Seller.
(v) Except as set forth in Section 4.14(d)(v) of the
Disclosure Letter, Seller has not received notice from any third party
regarding any assertion or claim challenging the validity of any
28
Intellectual Property owned or used by Seller and Seller has no knowledge
of any basis for such a claim.
(vi) None of the Trademarks Seller currently uses and
none of the Trademarks listed in Section 4.14(a) of the Disclosure Letter
for which Seller has obtained or applied for a registration have been
abandoned. To the knowledge of Seller, there has been no prior use of such
Trademarks by any third party that would confer upon said third party
superior rights in such Trademarks. Seller has taken reasonable steps to
maintain the validity of such Trademarks.
(vii) Except as set forth in Section 4.14(d)(vii) of the
Disclosure Letter, to the knowledge of Seller, no Person is
misappropriating, diluting, infringing upon or otherwise violating the
Intellectual Property rights of Seller.
(e) No former employer of any employee of Seller, and no
current or former client of any consultant of Seller, has made a claim against
Seller or, to the knowledge of Seller, against any other Person, that such
employee or such consultant is utilizing Intellectual Property of such former
employer or client.
(f) (i) Except as set forth in Section 4.14(f)(i) of the
Disclosure Letter, Seller is not a party to or bound by any license or other
agreement requiring the payment by Seller of any royalty payment, excluding such
agreements relating to software licensed for use solely on the computers of
Seller.
(ii) Seller has not licensed or sublicensed its rights
in any Intellectual Property, or received or been granted any such rights,
other than pursuant to the License Agreements.
(iii) Seller has substantially performed all obligations
imposed upon it under the License Agreements and the License Agreements
are valid and binding obligations of Seller, enforceable against Seller in
accordance with their terms, and there exists no event or condition that
will result in a violation or breach of, or constitute a default by Seller
or, to the best knowledge of Seller, the other party thereto, under any
such License Agreement.
(g) Seller takes reasonable measures to protect the
confidentiality of Trade Secrets. No Trade Secret of Seller has been disclosed
or
29
authorized to be disclosed to any third party other than pursuant to a written
nondisclosure agreement that reasonably protects Seller's proprietary interests
in and to such Trade Secrets, or pursuant to the filing of patent applications
related to such Trade Secrets;
(h) (i) It is the policy of Seller that all employees of
Seller with access to technical information execute and deliver proprietary
invention agreements with Seller, and are obligated under the terms thereof to
assign all inventions made by them during the course of employment to Seller.
(ii) All Proprietary Software set forth in Section
4.14(b) of the Disclosure Letter, was either developed (A) by employees of
Seller within the scope of their employment; or (B) by independent
contractors or other third parties who have assigned all of their rights
to Seller pursuant to written agreement.
(i) Except as set forth in Section 4.14(i) of the Disclosure
Letter, the consummation of the transactions contemplated hereby will not result
in the loss or impairment of Seller's rights to own, use, or to bring any action
for the infringement of, any of the Intellectual Property, nor will such
consummation require the consent of any third party in respect of any
Intellectual Property.
(j) Seller has not used or authorized the use of the Customer
Information, whether obtained through the Company Website or otherwise, in an
unlawful manner, or in a manner violative of the Company Privacy Policy or the
privacy rights of its customers; Seller has not collected any Customer
Information through the Company Website in an unlawful manner or in violation of
the Company Privacy Policy, and the transactions contemplated by this Agreement
will not violate the Company Privacy Policy or the privacy rights of its
customers. Seller has reasonable security measures in place to protect the
Customer Information it receives through the Company Website and which it stores
in its computer systems from illegal use by third parties or use by third
parties in a manner violative of the rights of privacy of its customers. Seller
represents to its customers on the Company Website that it assures reasonable
security as to the protection of Customer Information.
Section 4.15 Trade Relations. Except as set forth in Section 4.15 of
the Disclosure Letter or in the SEC Reports filed prior to the date hereof,
there exists no actual or, to the knowledge of Seller, threatened termination,
cancellation or limitation of, or any adverse modification or change in, the
business relationship of Seller or any of its Subsidiaries, or the business of
Seller or any of its Subsidiaries, with any customer
30
or supplier or any group of customers or suppliers whose purchases or
inventories provided to Seller's business are individually or in the aggregate
material to the Acquired Assets, Assumed Liabilities or the Business, and there
exists no present condition or state of fact or circumstance that would have a
Material Adverse Effect or prevent Seller or any of its Subsidiaries from
conducting such business relationships or such business with any such customer,
supplier or group of customers or suppliers in the same manner as heretofore
conducted by Seller or each Subsidiary.
Section 4.16 Absence of Undisclosed Liabilities. Neither Seller nor
any Subsidiary has any Liabilities or other obligations of any nature arising
out of or relating to the Business or the Acquired Assets except:
(a) Liabilities or other obligations as and to the extent
accrued or reserved against as set forth in the Balance Sheet;
(b) Liabilities or other obligations incurred after the date
of the Balance Sheet in the ordinary course of business consistent with past
practice;
(c) Liabilities or other obligations that may become payable
pursuant to this Agreement; and
(d) Liabilities or other obligations as and to the extent
disclosed in Section 4.16 of the Disclosure Letter.
Section 4.17 Broker's, Finder's or Similar Fees. There are no
brokerage commissions, finder's fees or similar fees or commissions payable by
Seller in connection with the transactions contemplated hereby.
Section 4.18 Takeover Laws. Neither Seller nor any of its
Subsidiaries is subject to any "moratorium", "control share", "fair price" or
other antitakeover laws and regulations of any state (collectively, the
"Takeover Laws") that would affect this Agreement or the Transactions
contemplated hereby. Seller's Board of Directors has approved this Agreement,
the Ancillary Agreements and the Transactions for the purpose of such Takeover
Laws.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
Section 5.1 Corporate Existence and Power. Purchaser (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, (b) has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement and each of
the other Ancillary Agreements to which it is a party, and (c) has the financial
resources to perform its obligations hereunder.
Section 5.2 Authorization; No Contravention. The execution, delivery
and performance by Purchaser of this Agreement and each of the other Ancillary
Agreements to which it is a party and the transactions contemplated hereby and
thereby, (i) have been duly authorized by all necessary corporate action, (ii)
do not contravene the terms of Purchaser's organizational documents, (iii) do
not violate, conflict with or result in any breach or contravention of, or the
creation of any Lien under, any Contractual Obligation of Purchaser or any
Requirement of Law applicable to Purchaser, and (iv) do not violate any Orders
of any Governmental Entity against, or binding upon, Purchaser, except in the
cases of clauses (iii) and (iv) for such violations, conflicts, breaches or
defaults which would not materially delay consummation of the transactions
contemplated by this Agreement.
Section 5.3 Governmental Authorization; Third Party Consents.
Subject to the entry of the Sale Order, no material approval, consent,
compliance, exemption, authorization or other action by, or notice to, or filing
with, any Governmental Entity or any other Person, and no lapse of a waiting
period under any Requirement of Law, is necessary or required in connection with
the execution, delivery or performance by, or enforcement against, Purchaser of
this Agreement and each of the other Ancillary Agreements to which it is a party
or the transactions contemplated hereby and thereby.
Section 5.4 Binding Effect. Subject to the entry of the Sale Order,
this Agreement has been, and as of the Closing Date each of the other Ancillary
Agreements to which Purchaser is a party will have been, duly executed and
delivered by Purchaser, and this Agreement constitutes, and as of the Closing
Date each of the other Ancillary Agreements will constitute, the legal, valid
and binding obligations of Purchaser, enforceable against Purchaser in
accordance with their terms, except as enforceability
32
may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability (regardless of whether considered in a proceeding at law or in
equity).
Section 5.5 Broker's, Finder's or Similar Fees. There are no
brokerage commissions, finder's fees or similar fees or commissions payable by
Purchaser in connection with the transactions contemplated hereby.
ARTICLE VI
COVENANTS
Section 6.1 Interim Operations of the Business. Subject to any
obligations as a debtor or debtor-in-possession under the Bankruptcy Code, or
order of the Bankruptcy Court or other court of competent jurisdiction, Seller
shall use its reasonable best efforts to ensure that, and Seller covenants and
agrees that, after the date hereof and prior to the Closing Date, except as (i)
expressly provided in this Agreement, the Bankruptcy Code or Applicable Law,
(ii) explicitly set forth in the operating plan submitted to Purchaser by Seller
in connection with the Loan Agreement, or (iii) may be agreed in writing by
Purchaser:
(a) (i) the Business shall be conducted in the same manner as
heretofore conducted and only in the ordinary course and (ii) each of Seller and
any Subsidiary of Seller shall use its reasonable best efforts to preserve the
business organization of the Business intact, keep available the services of the
current officers and employees of the Business and maintain the existing
relations with franchisees, customers, suppliers, creditors, business partners,
employees and others having business dealings with the Business, to the end that
the goodwill and ongoing business of the Business shall be unimpaired at the
Closing Date;
(b) Seller and any Subsidiary of Seller shall use its
reasonable best efforts to maintain, preserve and protect all of the Acquired
Assets in the condition in which they exist on the date hereof, except for
ordinary wear and tear;
(c) neither Seller nor any Subsidiary of Seller shall file
with the Bankruptcy Court any pleading seeking authority to reject, or to assume
and assign to any party other than Purchaser, any lease or executory contract to
be acquired hereunder by Purchaser;
33
(d) neither Seller nor any Subsidiary of Seller shall enter
into any employment or other agreement with or make any loan or advance to, any
officers or employees or hire any employees;
(e) neither Seller nor any Subsidiary of Seller shall take, or
agree to or commit to take, any action that would or is reasonably likely to
result in any of the conditions to the Closing set forth in Article VII not
being satisfied, or would make any representation or warranty of Seller
contained herein inaccurate in any respect at, or as of any time prior to, the
Closing Date, or that would materially impair the ability of Seller or Purchaser
to consummate the Closing in accordance with the terms hereof or materially
delay such consummation;
(f) neither Seller nor any Subsidiary of Seller shall take any
action which would have or reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect;
(g) neither Seller nor any Subsidiary shall (i) amend,
supplement or otherwise modify, waive any rights under or terminate any Assigned
Contract or (ii) enter into any Contract which would be an Assigned Contract
hereunder;
(h) neither Seller nor any Subsidiary shall take any action
not in compliance with any covenant or other agreements set forth in the Loan
Agreement; and
(i) neither Seller nor any Subsidiary of Seller shall enter
into any agreement, Contract, commitment or arrangement to do any of the
foregoing or to violate any of the foregoing, or authorize, recommend, propose
or announce an intention to do or violate any of the foregoing.
Section 6.2 Access; Confidentiality.
(a) Between the date of this Agreement and the Closing, Seller
shall (i) afford Purchaser and its authorized representatives reasonable access
to all offices and other facilities, all books and records and all employees and
personnel of Seller and its Subsidiaries, (ii) permit Purchaser and its
authorized representatives to make such inspections and to make copies of such
books and records as they may reasonably require and (iii) furnish Purchaser and
its authorized representatives with such financial and operating data and other
information concerning the Business as they may from time to time reasonably
request. Each party will direct its employees to render
34
any assistance which the other party may reasonably request in examining or
utilizing records referred to in this Section 6.2.
(b) Purchaser shall cooperate with Seller, at Seller's
expense, and make available to Seller such documents, books, records or
information transferred to Purchaser and relating to activities of the Business,
Seller or any of its Subsidiaries prior to the Closing as Seller may reasonably
require after the Closing in connection with any Tax determination or
contractual obligations to Third Parties or to defend or prepare for the defense
of any claim against Seller or any Subsidiary or to prosecute or prepare for the
prosecution of claims against third parties by Seller relating to the conduct of
the business of the Business by Seller or any Subsidiary prior to the Closing or
in connection with any governmental investigation of Seller or any of its
Affiliates.
(c) Each party shall not destroy any files or records which
are subject to this Section 6.2 without giving reasonable notice to the other
party, and within 15 days of receipt of such notice, such other party may cause
to be delivered to it the records intended to be destroyed, at such other
party's expense.
(d) Any information regarding the Business or Assets
heretofore or hereafter obtained from Seller or its Subsidiaries by Purchaser or
its representatives shall be subject to the terms of the Confidentiality
Agreement, and such information shall be held by Purchaser and its
representatives in accordance with the terms of the Confidentiality Agreement;
provided, however, that following the Closing, this Section 6.2 and the
Confidentiality Agreement shall not prohibit Purchaser from using and providing
to Third Parties such information concerning the Assets or the Business as it
may deem appropriate.
Section 6.3 Efforts and Actions to Cause Closing to Occur.
(a) Prior to the Closing, upon the terms and subject to the
conditions of this Agreement, Seller shall use its reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done all
things necessary, proper or advisable (subject to any Applicable Laws) to
consummate the Closing and the other Transactions as promptly as practicable
including, but not limited to (i) the preparation and filing of all forms,
registrations and notices required to be filed to consummate the Closing and the
other Transactions and the taking of such actions as are necessary to obtain any
requisite approvals, authorizations, consents, releases, orders, licenses,
Permits, qualifications, exemptions or waivers by any Third Party or
Governmental Entity, and (ii) the preparation of any documents reasonably
requested by Purchaser in order to facilitate financing of any of the
Transactions. In addition, neither party hereto
35
shall take any action after the date hereof that could reasonably be expected to
materially delay the obtaining of, or result in not obtaining, any permission,
approval or consent from any Governmental Entity or other Person required to be
obtained prior to Closing. Seller shall bear all costs, fees and expenses
relating to the obtaining of any approvals, authorizations, consents, releases,
orders, licenses, Permits, qualifications, exemptions or waivers referred to in
this Section 6.3(a).
(b) Prior to the Closing, each party shall promptly consult
with the other party hereto with respect to, provide any necessary information
with respect to, and provide the other party (or its counsel) with copies of,
all filings made by such party with any Governmental Entity or any other
information supplied by such party to a Governmental Entity in connection with
this Agreement and the Transactions. Each party hereto shall promptly provide
the other party with copies of any written communication received by such party
from any Governmental Entity regarding any of the Transactions. If any party
hereto or Affiliate thereof receives a request for additional information or
documentary material from any such Governmental Entity with respect to any of
the Transactions, then such party shall endeavor in good faith to make, or cause
to be made, as soon as reasonably practicable and after consultation with the
other party, an appropriate response in compliance with such request. To the
extent that transfers, amendments or modifications of Permits are required as a
result of the execution of this Agreement or consummation of any of the
Transactions, Seller shall use its reasonable best efforts to effect such
transfers, amendments or modifications.
(c) Notwithstanding the foregoing or any other covenant herein
contained, nothing in this Agreement shall be deemed to require Purchaser (i) to
commence any litigation against any Person in order to facilitate the
consummation of any of the Transactions, (ii) to take or agree to take any other
action or agree to any limitation that could reasonably be expected to have a
Material Adverse Effect, or (iii) to defend against any litigation brought by
any Governmental Entity seeking to prevent the consummation of, or impose
limitations on, any of the Transactions.
Section 6.4 Notification of Certain Matters.
(a) Seller shall give notice to Purchaser promptly after
becoming aware of (i) the occurrence or non-occurrence of any event, the
occurrence or non-occurrence of which would be likely to cause either (A) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Closing Date or (B) any condition set forth in Article VII to be unsatisfied in
any material respect at any time from the date hereof to the Closing Date and
(ii) any failure of Seller or any of its Subsidiaries or any officer,
36
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 6.4
shall not limit or otherwise affect the remedies available hereunder to
Purchaser.
(b) Seller shall deliver to Purchaser copies of (i) all audit
reports, letter rulings, technical advice memoranda and similar documents issued
by a Governmental Entity relating to the United States federal, state, local or
foreign Taxes due from or with respect to it or any Subsidiary of Seller and
(ii) any closing agreements entered into by or on behalf of Seller or any
Subsidiary of Seller with any taxing authority, which come into the possession
of Seller after the date hereof.
(c) Seller shall deliver to Purchaser the Weekly Stream Report
simultaneous with the delivery of the Weekly Reporting Certificate pursuant to
the Loan Agreement.
Section 6.5 Transition of the Business. Seller shall use reasonable
best efforts to assist Purchaser in accomplishing a smooth transition of the
Business from Seller to Purchaser, including, without limitation, providing
customer information to Purchaser as appropriate. In this regard, Seller and
Purchaser agree that they will enter into good faith discussions concerning the
Business, including, but not limited to, personnel policies and procedures, and
other operational matters relating to the Business. Purchaser acknowledges and
agrees that unless and until the Closing occurs, any information concerning
customers of the Business provided by Seller to Purchaser, or any of its
Affiliates, Subsidiaries, directors, officers, employees, representatives or
agents, shall be subject to the terms and conditions of the Confidentiality
Agreement.
Section 6.6 Submission for Court Approval.
(a) Within one Business Day of the execution of this
Agreement, Seller shall file a voluntary petition under Chapter 11 of the
Bankruptcy Code with the Bankruptcy Court. On the Petition Date, or as soon
thereafter as practicable, but in no event later than three Business Days after
the date hereof, Seller shall file with the Bankruptcy Court (i) a motion (the
"Bidding Procedures Motion") and supporting papers (including a proposed order)
in form and substance satisfactory to Purchaser seeking the entry of an order by
the Bankruptcy Court approving of the terms of Sections 6.7, 8.1 and 8.2 of this
Agreement, including, without limitation, the procedures relating to Alternative
Transactions (as hereinafter defined) and the payment of the Termination Fee and
Expense Reimbursement (the "Bidding Procedures Order") and (ii) a motion (the
"Sale Motion") for approval of this Agreement and supporting
37
papers (including the Sale Order) in form and substance satisfactory to
Purchaser seeking entry of the Sale Order. Seller shall use its reasonable best
efforts to have the Bankruptcy Court enter the Bidding Procedures Order as soon
as practicable following the filing of the Bidding Procedures Motion, but in no
event later than November 2, 2001.
(b) Seller shall provide Purchaser with copies of any and all
motions, applications, pleadings, schedules, statements, reports and other
papers (including exhibits and supporting documentation) filed by or on behalf
of Seller or any Subsidiary of Seller in its Bankruptcy Case.
(c) Seller shall provide the requisite notice, and provide an
opportunity to be heard, to all parties entitled thereto, of all motions,
orders, hearings or other proceedings relating in any manner to this Agreement
or the Transactions contemplated hereby. Seller shall provide timely notice to
any additional party designated by Purchaser.
(d) Seller shall use its reasonable best efforts to obtain the
approval of the Sale Order by the Bankruptcy Court on or before the 50th day
after the Petition Date.
(e) Notice of the Sale Motion, the Sale Hearing (as defined
below), and the deadline for the filing and service of objections, if any, to
the Sale Motion shall be served by Seller in accordance with Rules 2002, 6004,
6006 and 9014 of the Federal Rules of Bankruptcy Procedure and any applicable
local rules of the Bankruptcy Court on all Persons required to receive notice
under such rules including all Persons which have asserted Liens or other
interests in the Acquired Assets, all non-debtor parties to the Assigned
Contracts, on all official committees appointed in the Bankruptcy Case, the
office of the United States Trustee and each of Seller's known creditors,
including but not limited to:
(i) all creditors listed in the schedule of assets and
liabilities filed in the Bankruptcy Case by Seller;
(ii) all creditors who have filed proofs of claim in the
Bankruptcy Case; and
(iii) all creditors who have filed a request for all
notices or otherwise appeared in the Bankruptcy Case.
38
In addition, notice of the motion for the Sale Order, the Sale
Hearing thereon and the objection deadline shall be given by Seller by
publication of a notice, in form and substance reasonably satisfactory to
Purchaser, in the New York Times (National Edition) and the Wall Street Journal
National Edition. Such notice shall be published at Seller's expense.
Section 6.7 Bidding Procedures. Set forth below are the bidding
procedures (the "Bidding Procedures") to be employed with respect to this
Agreement concerning the sale of the Acquired Assets to Purchaser (the "Sale").
The Sale is subject to competitive bidding as set forth herein and approval by
the Bankruptcy Court at a hearing under Sections 363 and 365 of the Bankruptcy
Code (the "Sale Hearing"). The following alternative bid provisions and related
bid protections are designed to compensate Purchaser for its efforts and
agreements to date and to facilitate a full and fair process designed to
maximize the value of the Assets for the benefit of Seller's stakeholders.
(a) Alternative Bid Deadline. All Alternative Bids must be
submitted to Seller c/o the officer of Seller as indicated in Section 9.4, not
later than 11:00 a.m. (EST) on the fifth Business Day prior to the Sale Hearing
(the "Alternative Bid Deadline"). Seller shall immediately distribute a copy of
each such Alternative Bid received to counsel to Purchaser.
(b) Qualified Alternative Bid. Seller will consider an
Alternative Bid only if the Alternative Bid is a "Qualified Alternative Bid".
Except as otherwise provided in the Bidding Procedures Order, to be a Qualified
Alternative Bid, the Alternative Bid must:
(i) identify the proponent of the Alternative Bid and an
officer who is authorized to appear and act on behalf of the bidder;
(ii) propose in writing an all cash transaction that
Seller determines, in the good faith opinion of the Board of Directors of
Seller after consultation with the independent financial advisor of
Seller, is not materially more burdensome or conditional than the terms of
this Agreement and has a value greater than or equal to the sum of (x) the
Purchase Price plus (y) the amount of the Expense Reimbursement and the
Termination Fee plus (z) in the case of the initial Qualified Alternative
Bid, $1,000,000, and in the case of any subsequent
39
Qualified Alternative Bids, $250,000 over the immediately preceding
Qualified Alternative Bid;
(iii) consist of an agreement in the form of this
Agreement, marked to show changes thereto, that is on terms and conditions
no less favorable to Seller than the terms and conditions contained in
this Agreement, including but not limited to, price and time of Closing;
(iv) not be subject to termination by such Person except
on the same terms as this Agreement;
(v) be accompanied by relevant financial information for
the prospective bidder to enable Seller, Purchaser or any other party in
interest to determine such Person's creditworthiness and ability to close
a sale of the Assets; and
(vi) not be conditional on the outcome of any unperformed
due diligence by the bidder, the receipt of equity or debt financing, or
the approval of any Board of Directors, shareholder, or other corporate
approval.
(c) Auction, Bidding Increments, and Bids Remaining Open.
(i) If Seller receives a Qualified Alternative Bid,
Seller shall conduct an auction (the "Auction") at the offices of ▇▇▇▇▇▇▇,
Phleger and ▇▇▇▇▇▇▇▇ on the Business Day immediately prior to the Sale
Hearing, beginning at 11:00 a.m. (PST) or such later time or other place
as Seller shall notify all Qualified Bidders who have submitted Qualified
Bids. Only Purchaser, Seller, any representative of any official committee
appointed in the Bankruptcy Case and any Qualified Bidders who have timely
submitted Qualified Bids shall be entitled to attend the Auction, and only
Purchaser and Qualified Bidders shall be entitled to make any additional
bids ("Subsequent Bids") at the Auction. All bidders shall be entitled to
be present for all bidding with the understanding that the true identity
of each bidder shall be fully disclosed to all other bidders and that all
material terms of each Bid will be fully disclosed to all other bidders
throughout the entire Auction. Seller may announce at the Auction
additional procedural rules that are reasonable under the circumstances
(e.g., the amount of time allotted to
40
make subsequent alternative bids) for conducting the Auction so long as
such rules are not inconsistent with these Bidding Procedures.
(ii) At the Auction, bidding shall begin with the highest
Qualified Alternative Bid and continue in minimum increments of at least
$250,000 higher than the previous bid. The Auction shall continue in one
or more rounds of bidding and shall conclude after each participating
bidder has had the opportunity to submit an additional Subsequent Bid with
full knowledge and written confirmation of the then existing highest bid,
signed by Seller's counsel and identifying the party making the then
highest bid. For the purpose of evaluating the value of the consideration
provided by each Subsequent Bid (including any Subsequent Bid by
Purchaser), the value shall be the net consideration payable to Seller,
after giving effect to any Termination Fee and Expense Reimbursement that
may be payable to Purchaser under this Agreement. At the conclusion of the
bidding, Seller shall announce its determination as to the bidder
submitting the successful bid, which shall be submitted to the Bankruptcy
Court for approval at the Sale Hearing. Purchaser shall be deemed a
party-in-interest with standing to appear and be heard in connection with
any motion, hearing, or other proceeding relating to this Agreement and
any Alternative Bid or Subsequent Bid.
(iii) If Seller does not receive any Qualified
Alternative Bids, Seller will report the same to the Bankruptcy Court and
will proceed with a sale and assignment of the Assets to Purchaser.
(iv) At least one Business Day prior to the Auction,
Seller will give Purchaser and all other Qualified Bidders a copy of the
highest and best Qualified Alternative Bid received and copies of all
other Qualified Alternative Bids. In addition, Seller will inform
Purchaser and each Qualified Bidder who has expressed its intent to
participate in the Auction of the identity of all Qualified Bidders that
may participate in the Auction.
(d) Solicitation Procedures.
(i) Unless this Agreement has been terminated in
accordance with its terms, neither Seller nor any of its Subsidiaries nor
any Affiliate of any of them will take, nor will Seller
41
permit any of them to take (nor will Seller, any of its Subsidiaries or
any Affiliate of any of them authorize or permit any investment banker,
financial advisor, attorney, accountant or other Person retained by or
acting for or on behalf of Seller, any of its Subsidiaries or any such
Affiliate to take), directly or indirectly, any action to (A) initiate,
assist, solicit, negotiate, or encourage any offer, proposal or inquiry
from any Third Party that constitutes, or would reasonably be expected to
lead to, an Alternative Bid for the Acquired Assets or any transaction
involving the Acquired Assets, (B) engage in any Business Combination with
respect to Seller or any of its Subsidiaries, (C) reach any agreement or
understanding (whether or not such agreement or understanding is absolute,
revocable, contingent or conditional) for, or otherwise attempt to
consummate, any Alternative Bid or Business Combination with Seller or any
of its Subsidiaries or (D) furnish or cause to be furnished any
information with respect to Seller or any of its Subsidiaries to any Third
Party except in the ordinary course of business (other than to Purchaser
and its Affiliates).
(ii) Notwithstanding anything to the contrary set forth
in Section 6.7(d)(i) above, Seller may furnish non-public information with
respect to Seller and the Assets to any Qualified Bidder and elicit
information from a Qualified Bidder concerning its Qualified Alternative
Bid, if and only if, before doing so: (1) Seller enters into with such
Qualified Bidder a confidentiality agreement in reasonably customary form
on terms not more favorable to such Qualified Bidder than the terms
contained in the Confidentiality Agreement and Seller shall have
previously provided such non-public information to Purchaser, and (2) the
Board of Directors of Seller, after consultation with and having received
the advice of independent legal counsel, determines in good faith that the
failure to take such action would reasonably be expected to constitute a
breach of its fiduciary duties under Applicable Law.
(iii) Notwithstanding anything to the contrary set forth
in Section 6.7(d)(i) above, Seller may furnish non-public information with
respect to Seller and the Business to any Third Party and enter into
discussions or negotiations with, any Third Party in connection with an
unsolicited bona fide written proposal from such Third Party for a
Business Combination with respect to Seller or any of its Subsidiaries, if
before doing so: (1) Seller enters into with such Third
42
Party a confidentiality agreement in reasonably customary form on terms
not more favorable to such Third Party than the terms contained in the
Confidentiality Agreement and Seller shall have previously provided such
non-public information to Purchaser; (2) the Board of Directors of Seller,
after consultation with independent financial advisors, reasonably
determines in good faith that the Business Combination, if consummated, is
reasonably likely to result in a transaction more favorable to Seller than
the Transactions; (3) the Board of Directors of Seller reasonably
determines in its good faith judgment, after consultation with independent
financial advisors, that such Third Party has the financial ability to
consummate such proposal; and (4) the Board of Directors of Seller, after
consultation with and having received the advice of independent legal
counsel, determines in good faith that the failure to take such action
would reasonably be expected to constitute a breach of its fiduciary
duties under Applicable Law.
(iv) Seller shall immediately notify Purchaser orally and
in writing of all inquiries, proposals, or requests for information
received from any Third Party, and the material terms and conditions of
such inquiry, proposal or request, and the identity of the person making
such inquiry, proposal, or request. Seller shall keep Purchaser informed
of the status (including amendments or proposed amendments) of any such
inquiry, proposal or request with respect to a Alternative Bid or Business
Combination, and upon the request of Purchaser shall identify and furnish
to Purchaser all information provided in response to such inquiry,
proposal or request. Within twenty-four hours of receipt of any expression
of interest, bid proposal or similar communication from any other party,
Seller shall deliver a copy of such document or a written summary of any
oral communication to Purchaser.
(e) Termination Fee and Expense Reimbursement. In the event
that (i) Seller accepts a Qualified Alternative Bid, other than a bid of
Purchaser, as the highest or best offer (an "Auction Transaction") or (ii)
Seller sells, transfers, leases or otherwise disposes, directly or indirectly,
including through an asset sale, stock sale, merger, reorganization, plan of
reorganization or other similar transaction, of all or substantially all or a
material portion of its Assets (or agrees to do any of the foregoing) in a
transaction or series of transactions to a party or parties other than Purchaser
within twelve months from the date hereof (either of clause (i) or (ii) being an
"Alternative Transaction"), Seller shall pay, or cause to be paid, to Purchaser
a
43
termination fee equal to $750,000 (the "Termination Fee"). Purchaser shall be
paid the Termination Fee at the time of consummation of the Alternative
Transaction. In addition to the Termination Fee, Purchaser shall be entitled to
receive, at the time that it receives the Termination Fee, up to $350,000 in
reimbursement of all of its actual fees and expenses (including, without
limitation, expenses of counsel and other consultants and internal legal
expenses attributable to the purchase) (the "Expenses") incurred by Purchaser in
connection with this Agreement, the Ancillary Agreements and the Transactions
(the "Expense Reimbursement"). The Expense Reimbursement and the Termination Fee
shall be paid as administrative expenses of Seller under Sections 503(b), 507(a)
of the Bankruptcy Code.
Section 6.8 Employee Matters.
(a) (i) Prior to the Closing Date, Purchaser shall offer in
writing to employ up to the lesser of (x) 80% of the number of employees
of Seller and its Subsidiaries (taken as a whole) on the date hereof and
(y) the number of employees of Seller and its Subsidiaries (taken as a
whole) as of the Closing (collectively, the "Employees"). Such offer shall
be effective as of the Closing Date with respect to Employees who are
active employees of Seller immediately prior to the Closing Date and upon
the cessation of disability or any other approved leave of absence with
respect to Employees who, as of the Closing Date, are employees of the
Business but who are inactive due to disability or other approved leave of
absence to the extent such offer is accepted prior to or upon such
cessation and the Employee commences employment upon such cessation.
(ii) Purchaser shall have no responsibility for and
Seller shall reimburse Purchaser for any costs or liabilities that may be
incurred by Purchaser directly or indirectly in connection with any
employee of Seller who is not a Transferred Employee (as defined below),
it being the intent of this Agreement that all costs and liabilities
associated with the employment and termination of employment of such
employees be entirely borne by Seller. Seller shall remain solely liable
for any employment claims for any Employee based on acts occurring before
the Closing Date or as a result of the consummation of the Transactions
contemplated hereby or the entering into of this Agreement.
(b) Except to the extent necessary to avoid duplication of
benefits, Purchaser shall cause each Employee who accepts Purchaser's offer of
employment and commences employment with Purchaser or a Subsidiary of Purchaser
44
(collectively, the "Transferred Employees") to be given full credit for all
service with Seller or any Subsidiary of Seller prior to the Closing Date (and
service credited by Seller and/or any Subsidiary of Seller) for eligibility and
vesting purposes under any employee benefit plans (other than the ▇▇▇▇▇▇▇▇
Communications Group Pension Plan) or arrangements of Purchaser or any
Subsidiary of Purchaser in which such Transferred Employees participate from and
after the Closing Date, to the same extent such service was recognized by Seller
or any Subsidiary of Seller immediately prior to the Closing Date. Purchaser
shall, or shall cause a Subsidiary of Purchaser to, waive all limitations as to
preexisting conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to Transferred Employees
under any welfare plan in which such employees may be eligible to participate
after the Closing Date, other than limitations or waiting periods that are
already in effect with respect to such employees and that have not been
satisfied as of the Closing Date under any welfare plan of Seller or any
Subsidiary of Seller in which Transferred Employees participate immediately
prior to the Closing Date.
(c) The coverage and benefits provided to the Transferred
Employees pursuant to employee benefit plans and arrangements maintained by
Purchaser or its Subsidiaries shall be, in the aggregate, no less favorable than
those provided to similarly situated employees of Purchaser as of the Closing
Date.
(d) Seller shall retain, and Purchaser shall not assume any
Plans or any other arrangement or agreements (including with respect to any
retention or sale bonus arrangements of Seller) relating to the employees of
Seller or any of its Subsidiaries. All Liabilities to, or relating to, the
Plans, and all Liabilities to, or relating to, any employee of Seller or any of
its Subsidiaries shall be Retained Liabilities, and Purchaser shall have no
obligation or liability with respect to such Plans, arrangements or agreements.
Purchaser and Seller shall take all reasonable actions necessary to cause the
retention by Seller of all such Plans.
(e) To the extent that any obligations might arise under the
Worker Adjustment Retraining Notification Act ("WARN"), 29 U.S.C. Section 2101
et seq., or under any similar provision of any federal, state, regional, foreign
or local law, rule or regulation (hereinafter referred to collectively at "WARN
Obligations") as a consequence of the transactions contemplated by this
Agreement, Seller shall be responsible for any WARN Obligations arising as a
result of any employment losses to employees of Seller occurring prior to the
Closing Date.
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Section 6.9 Prompt Payment of Cure Amounts. With respect to each
Assigned Contract, Seller shall pay, prior to or at Closing, all amounts that
(i) accrue (or relate to a period) prior to Closing, (ii) are required to be
paid under section 365(b)(1)(A) or (b)(1)(B) of the Bankruptcy Code in order to
assume and assign such contract, or (iii) are due pursuant to order of the
Bankruptcy Court; provided, however, that cure amounts that are the subject of a
bona fide dispute shall be paid within two Business Days of the effectiveness of
a settlement or order of the Bankruptcy Court, as the case may be.
Section 6.10 Insurance; Risk of Loss. Seller shall maintain
insurance coverage and related risk of loss for one year following the Closing
with respect to the Business and the Assets for events occurring, circumstances
existing and Liabilities accruing before the Closing.
Section 6.11 Accounts Receivable.
(a) Promptly after 90 days from the Closing Date (the
"Accounts Receivable Adjustment Date"), Purchaser shall deliver a written notice
(the "Purchaser Receivables Notice") to Seller (after receipt of a report from
Seller indicating the amount of Accounts Receivable collected by Seller after
the Closing Date) which states either (i) that as of the Accounts Receivable
Adjustment Date Purchaser has not been paid in full in respect of all Accounts
Receivable (net of reserves for doubtful accounts and allowances for valid
promotional discounts) outstanding as of the Closing (the "Final Accounts
Receivable"), and, accordingly, Purchaser shall be entitled to receive payment
in cash of the excess of (x) the amount of the Final Accounts Receivable (net of
reserves for doubtful accounts and allowances for valid promotional discounts)
over (y) the amount of payments actually received by Purchaser or any of its
Affiliates in respect of the Final Accounts Receivable (such excess, the
"Accounts Receivable Adjustment Amount"), or (ii) that Purchaser has been paid
in full in respect of all Final Accounts Receivable (net of reserves for
doubtful accounts and allowances for valid promotional discounts).
(b) If Purchaser is entitled to receive funds equal to the
Accounts Receivable Adjustment Amount pursuant to Section 6.11(a), an amount
equal to the Accounts Receivable Adjustment Amount, in immediately available
same day funds, will promptly be paid to Purchaser by Seller within five (5)
Business Days after delivery of the Purchaser Receivables Notice.
Section 6.12 Subsequent Actions.
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(a) If at any time after the Closing, Purchaser will consider
or be advised that any deeds, bills of sale, instruments of conveyance,
assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm ownership (of record or otherwise) in
Purchaser, its right, title or interest in, to or under any or all of the Assets
or otherwise to carry out this Agreement, Seller shall, or cause the appropriate
Subsidiary of Seller to, execute and deliver all deeds, bills of sale,
instruments of conveyance, powers of attorney, assignments and assurances and
take and do all such other actions and things as may be requested by Purchaser
in order to vest, perfect or confirm any and all right, title and interest in,
to and under such rights, properties or assets in Purchaser or otherwise to
carry out this Agreement.
(b) In case at any time after the Closing Date any further
action is necessary, proper or advisable to carry out the purposes of this
Agreement, as soon as reasonably practicable, each party hereto shall take, or
cause its proper officers or directors to take, all such necessary, proper or
advisable actions.
Section 6.13 Publicity. The initial press release with respect to
the execution of this Agreement shall be a Seller press release acceptable to,
and approved prior to dissemination thereof by, Purchaser and Seller.
Thereafter, until the Closing, or the date the Transactions are terminated or
abandoned pursuant to Article VIII, neither Seller nor Purchaser, nor any of
their respective Affiliates, shall issue or cause the publication of any press
release or other public announcement with respect to this Agreement or the other
Transactions without prior consultation with the other party, except as may be
required by law, by an order of the Bankruptcy Court, or by any listing
agreement with a national securities exchange or trading market.
Section 6.14 Completion of Non-assignable Assigned Contracts. Seller
shall use its commercially reasonable efforts to obtain any consent, approval or
amendment, if any, required to novate and/or assign any Assigned Contract or any
other Asset to be assigned to Purchaser hereunder. Seller shall keep Purchaser
reasonably informed from time to time of the status of the foregoing and
Purchaser shall cooperate with Seller in this regard. To the extent that the
rights of Seller or any of its Subsidiaries under any Assigned Contract, or
under any other Asset to be assigned to Purchaser hereunder, may not be assigned
without the consent of a Third Party which has not been obtained prior to the
Closing, this Agreement shall not constitute an agreement to assign the same if
an attempted assignment would be unlawful. If any such consent has not been
obtained or if any attempted assignment would be ineffective or would impair
Purchaser's rights under the instrument in question so that Purchaser would not
acquire the benefit of all such rights, then Seller or a Subsidiary of Seller,
as applicable, to the maximum extent permitted by Applicable Law and the
instrument, shall act as
47
Purchaser's agent in order to obtain for Purchaser the benefits thereunder and
shall cooperate, to the maximum extent permitted by Applicable Law and the
instrument, with Purchaser in any other reasonable arrangement designed to
provide such benefits to Purchaser (including, without limitation, by entering
into an equivalent arrangement).
Section 6.15 Tax Matters.
(a) Seller shall be responsible for and shall pay, or cause
its Affiliates to pay, all sales, use, transfer, stamp duty, recording, value
added, and other similar taxes and fees, including, without limitation, all bulk
sales taxes, in each case including interest, penalties or additions
attributable thereto ("Transfer Taxes"), arising out of or in connection with
the Transactions. The party which has the primary responsibility under
Applicable Law for the payment of any particular Transfer Tax shall prepare and
file the relevant Tax Return, pay the Transfer Taxes shown on such Tax Return,
and notify the other party in writing of the Transfer Taxes shown on such Tax
Return and how such Transfer Taxes were calculated, and if the other party is
Seller or one of its Subsidiaries, Seller shall reimburse Purchaser for the
amount of such Transfer Taxes in immediately available funds within 10 days of
receipt of such notice.
(b) Purchaser and Seller agree to furnish, or cause their
Affiliates to furnish, to each other, upon request, as promptly as practicable,
such information and assistance relating to the Assets or the Business
(including, without limitation, access to books and records) as is reasonably
necessary for the filing of all Tax Returns, and making of any election related
to Taxes, the preparation for any audit by any Taxing Authority, and the
prosecution or defense of any claim, suit or proceeding relating to any Tax
Return. Purchaser and Seller shall cooperate, and cause their Affiliates to
cooperate, with each other in the conduct of any audit or other proceeding
related to Taxes and each shall execute and deliver such powers of attorney and
other documents as are necessary to carry out the intent of this Section
6.15(b). Purchaser and Seller shall provide, or cause their Affiliates to
provide, timely notice to each other in writing of any pending or threatened Tax
audits, assessments or litigation with respect to the Assets or the Business for
any taxable period for which the other party may have liability under this
Agreement. Purchaser and Seller shall furnish, or cause their respective
Affiliates to furnish, to each other copies of all correspondence received from
any Taxing Authority in connection with any Tax audit or information request
with respect to any taxable period for which the other or its Affiliates may
have liability under this Agreement.
(c) Seller and its Subsidiaries shall prepare all Tax Returns
of Seller and its Subsidiaries for periods ending on or prior to the Closing
Date.
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(d) Seller and Purchaser shall in good faith cooperate and
take commercially reasonable actions necessary or proper to eliminate or
otherwise reduce Transfer Taxes.
(e) Seller is and shall remain solely responsible for all
Taxes and tax matters arising from or relating to the Acquired Assets and
related businesses on or prior to the Closing Date ("Pre-Closing Period").
Seller shall indemnify and hold harmless Purchaser from any liability for, or
arising out of or based upon, or relating to any Taxes or Tax matter arising
from the Acquired Assets and related businesses during the Pre-Closing Period.
Purchaser shall be solely responsible for all Taxes and Tax matters arising from
or relating to the Acquired Assets and related businesses beginning after the
Closing Date ("Post-Closing Period"). Purchaser shall indemnify and hold
harmless Seller from any liability for, or arising out of or based upon, or
relating to any Taxes or Tax matter arising from the Acquired Assets and related
businesses during the Post-Closing Period. Seller and Purchaser shall cooperate
concerning all Taxes and Tax matters relating to this division of
responsibility, including, but not limited to, the filing of Tax returns and
other governmental filings associated therewith.
(f) In the case of Taxes that are payable with respect to a
taxable period that begins before the Closing Date and ends after the Closing
Date, the portion of any such Tax that is allocable to the portion of the period
ending on the Closing Date shall be:
(i) in the case of Taxes that are either (x) based upon
or related to income or receipts, or (y) imposed in connection with any
sale or other transfer or assignment of property (real or personal,
tangible or intangible), deemed equal to the amount which would be payable
if the taxable year ended with the Closing Date; and
(ii) in the case of Taxes imposed on a periodic basis
with respect to the assets of Seller, any Acquired Assets or otherwise
measured by the level of any item, deemed to be the amount of such Taxes
for the entire period (or, in the case of such Taxes determined on an
arrears basis, the amount of such Taxes for the immediately preceding
period) multiplied by a fraction the numerator of which is the number of
calendar days in the period ending on the Closing Date and the denominator
of which is the number of calendar days in the entire period.
49
Section 6.16 Acquisition Agreements. To the extent that any of the
acquisition agreements set forth on Schedule 6.16 (the "Acquisition Agreements")
are not assignable without the consent of another party, such consent is not
obtained and there is hereafter discovered any event or occurrence for which
Purchaser would have been entitled to indemnification if such Acquisition
Agreement had been assigned to Purchaser (an "Indemnification Claim"), Seller
shall, upon receipt of written notice from Purchaser, pursue such
Indemnification Claim on Purchaser's behalf. Purchaser shall control the
investigation, defense and settlement (including choice of counsel in its sole
discretion) of any Indemnification Claim. Seller shall make available to
Purchaser, its counsel and other representatives, all information and documents
available to it which relate to such Indemnification Claim. Seller shall also
render to Purchaser such assistance and cooperation as may reasonably be
required to ensure the proper and adequate pursuit of such Indemnification
Claim. Upon receipt of any recoveries (including pursuant to any settlement,
arbitration, judicial proceeding or otherwise) relating to any such
Indemnification Claim, Seller shall promptly deliver to Purchaser such
recoveries upon receipt thereof. Seller shall remit and turn-over to Purchaser
any recovery in any such claim and such recovery shall be deemed to be an
Acquired Asset.
Section 6.17 Bulk Sale. Each of the parties to this Agreement hereby
waives compliance with any bulk sales or bulk transfer laws that are applicable
to the sale of the Assets with respect to the Retained Liabilities. Seller
agrees to promptly and diligently pay and discharge when due or to contest or
litigate all claims of creditors which are asserted against Purchaser by reason
of any non-compliance with such laws and to indemnify and hold Purchaser
harmless from and against any and all such claims.
Section 6.18 Disclosure Supplements. From time to time (but in no
event more than once every thirty days) prior to the Closing, Seller shall
promptly supplement or amend the Disclosure Letter with respect to any matter,
condition or occurrence hereafter arising which, if existing or occurring at the
date of this Agreement, would have been required to be set forth or described in
the Disclosure Letter. No supplement or amendment shall be deemed to cure any
breach of any representation or warranty made in this Agreement or have any
effect for the purpose of determining satisfaction of the conditions set forth
in Article VII hereof or the compliance by Seller with any covenant set forth
herein.
Section 6.19 Further Assurances. Each party shall cooperate with the
other party, and execute and deliver, or use its commercially reasonable efforts
to cause to be executed and delivered, all such other instruments, including
instruments of conveyance, assignment and transfer, and to make all filings with
and to obtain all
50
consents, approvals or authorizations of any Governmental Entity or other
regulatory authority or any other Person under any Permit, agreement, indenture
or other instrument, and take all such other actions as such party may
reasonably be requested to take by another party hereto from time to time,
consistent with the terms of this Agreement, in order to effectuate the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Obligations of Purchaser to Effect the
Closing. The obligations of Purchaser to consummate the Closing shall be subject
to the satisfaction (or waiver by Purchaser) on or prior to the Closing Date of
each of the following conditions:
(a) Government Action. There shall not be threatened or
pending any suit, action or proceeding by any Governmental Entity:
(i) seeking to prohibit or impose any material
limitations on Purchaser's ownership or operation (or that of any of its
Subsidiaries or Affiliates) of all or a material portion of its businesses
or assets or the Acquired Assets, or to compel Purchaser or any of its
Subsidiaries or Affiliates to dispose of or hold separate any material
portion of the Acquired Assets or the business or assets of Purchaser or
any of its Subsidiaries or Affiliates;
(ii) seeking to restrain or prohibit the consummation of
the Closing or the performance of any of the other Transactions, or
seeking to obtain from Purchaser or any of its Subsidiaries any damages or
payments that are material;
(iii) seeking to impose material limitations on the
ability of Purchaser, or rendering Purchaser unable, to accept for payment
or pay for or purchase some or all of the Acquired Assets or otherwise to
consummate the Closing;
51
(iv) seeking to impose material limitations on the
ability of Purchaser effectively to exercise full rights of ownership of
the Acquired Assets;
(v) which otherwise is reasonably likely to have a
Material Adverse Effect; or
any other action shall be taken by any Governmental Entity that is reasonably
likely to result, directly or indirectly, in any of the consequences referred to
in clauses (i) through (v) above.
(b) Opinion of Seller's Counsel. Seller shall have delivered
to Purchaser at the Closing an opinion of Seller's counsel, dated the Closing
Date, in form and substance reasonably satisfactory to Purchaser and which may
contain customary qualifications, assumptions and exceptions, substantially to
the effect that:
(i) Seller: (x) is a corporation duly organized, validly
existing and in good standing under the laws of Delaware; (y) has full
corporate power and authority to carry on its business as it is now being
conducted and to own the properties and assets it now owns; and (z) is
duly qualified or licensed to do business as a foreign corporation in good
standing in California, Oklahoma, Illinois, Virginia, Georgia and New
Jersey.
(ii) Seller has corporate power and authority to execute
and deliver this Agreement and the Ancillary Agreements, and to consummate
the Transactions. The execution, delivery and performance by Seller of
this Agreement and the Ancillary Agreements and the consummation by it of
the Transactions have been duly authorized by Seller's Board of Directors,
and no other corporate action on the part of Seller is necessary to
authorize the execution and delivery by Seller of this Agreement or the
Ancillary Agreements or the consummation by Seller of the Transactions.
(iii) Each of this Agreement and each Ancillary Agreement
has been duly executed and delivered by Seller and, assuming due and valid
authorization, execution and delivery hereof and thereof by Purchaser,
each of this Agreement and each Ancillary Agreement is a valid and binding
obligation of Seller, enforceable against Seller in accordance with its
terms except the availability of the
52
remedy of specific performance or injunctive or other forms of equitable
relief may be subject to equitable defenses and would be subject to the
discretion of the court before which any proceeding therefor may be
brought.
(iv) To such counsel's knowledge, no motion or pleading
seeking relief under Fed. R. Bankr. P. 9024 or Fed. R. Civ. P. 60 has been
filed.
(c) Consents Obtained. All consents and approvals of any
Person required in connection with the consummation of the Closing and the other
Transactions, including consents and approvals to the Closing and the
Transactions required in connection with the Assigned Contracts set forth in
Schedule 7.1(c), shall have been obtained, except (x) where the failure to
obtain such consent or approval individually or in the aggregate would not
constitute a Material Adverse Effect or (y) to the extent that the requirement
for a particular consent or approval is rendered inapplicable by the Sale Order
or other order of the Bankruptcy Court; provided, however, that all consents and
approvals to the Closing and the Transactions required in connection with the
Assigned Contracts set forth in Schedule 7.1(c) shall have been obtained except
to the extent that the requirement for a particular consent or approval is
rendered inapplicable and unnecessary by the Sale Order or other order of the
Bankruptcy Court. All material consents and approvals from Governmental
Entities, whether federal, state, local or foreign, shall have been obtained. A
copy of each such consent or approval referred to in this Section 7.1(c) shall
have been provided to Purchaser at or prior to the Closing. All Permits
necessary for the operation of the Business either have been transferred to
Purchaser or have been obtained by Purchaser. All such consents, approvals and
Permits referred to in this Section 7.1(c) shall be in effect at the Closing and
shall not have been amended, modified, revoked or rescinded.
(d) Material Adverse Effect. Purchaser, in its reasonable good
faith judgement, shall be satisfied that there shall not have occurred any
Material Adverse Effect or any development that, insofar as reasonably can be
foreseen, is reasonably likely to result in a Material Adverse Effect.
(e) Representations and Warranties. All of the representations
and warranties of Seller set forth in this Agreement that are qualified as to
materiality shall be true and complete in all respects and any such
representations and warranties that are not so qualified shall be true and
complete in all material respects, in each case as of the date of this Agreement
and as of the Closing Date, other than
53
representations and warranties that speak as of a specific date or time (which
need only be so true and correct as of such date or time).
(f) Seller's Performance of Covenants. Seller shall not have
failed to perform in any material respect any obligation or to comply in any
material respect with any agreement or covenant of Seller to be performed or
complied with by it under this Agreement; provided, however, that no such
failure to perform or to comply shall be deemed to have occurred to the extent
resulting solely from any action or inaction taken by the Bankruptcy Court;
provided, further, however, that the provisions of the immediately preceding
clause shall not apply to any action or inaction taken by the Bankruptcy Court
at the request of, with the support of, or as a consequence of any act or
omission (whether knowing or otherwise) by, Seller.
(g) Certificate of Seller's Officers. Purchaser shall have
received from Seller a certificate, dated the Closing Date, duly executed by the
Chairman of the Board or the Chief Executive Officer, and the Chief Financial
Officer of Seller, satisfactory in form to Purchaser, to the effect of
paragraphs (c), (d), (e) and (f) above.
(h) Tax Certifications. Purchaser shall have received (i) a
certification of non-foreign status for Seller in the form and manner which
complies with the requirements of Section 1445 of the Code and the regulations
promulgated thereunder and (ii) any other certifications which may be required
under Applicable Law stating that no Taxes (or a reduced amount) are due to any
Taxing Authority for which Purchaser could have liability to withhold and pay
with respect to the transfer or in connection with the purchase of the Assets.
(i) Bidding Procedures Order and Sale Order. The Bankruptcy
Court shall have entered the Bidding Procedures Order on or prior to November 2,
2001 and the Sale Order within 50 days of the Petition Date, each of which shall
have become Final Orders. The Sale Order shall be in form and substance
reasonably acceptable to Purchaser and shall provide, among other things, (1)
that Seller is authorized to convey to Purchaser all of its right, title, and
interest in and to the Acquired Assets pursuant to Sections 105, 363(b) and
363(f) of the Bankruptcy Code, free and clear of all Liens (other than Permitted
Liens and Assumed Liabilities), which Liens shall attach to the proceeds of the
Sale under section 363(f) of the Bankruptcy Code; (2) that all other
requirements and conditions under Sections 363 and 365 of the Bankruptcy Code
for the assumption by Seller and assignment to Purchaser of each Assigned
Contract have been satisfied and that all Assigned Contracts will be transferred
to, and remain in full force and effect for the benefit of, Purchaser,
notwithstanding any
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provision in such Assigned Contracts (including those described in sections
365(b)(2) and (f) of the Bankruptcy Code) that prohibits such assignment or
transfer; (3) that all "cure" amounts necessary to cure monetary defaults under
any such contract shall be made in the appropriate amounts by Seller except to
the extent such "cure" amounts constitute Assumed Liabilities; (4) that
Purchaser is deemed to have purchased the Acquired Assets, including the
assignment of the Assigned Contracts, in good faith pursuant to Section 363(m)
of the Bankruptcy Code so that the reversal or modification of the Sale Order
does not affect the validity of the Sale to Purchaser of the Acquired Assets
pursuant to the Sale Order; (5) that Seller is authorized and directed to
execute, upon request by Purchaser, one or more assignments in form, substance,
and number reasonably acceptable to Purchaser, evidencing the conveyance of the
Acquired Assets to Purchaser; and (6) a general release by Seller and the
bankruptcy estate to Purchaser at the time of Closing, including a release of
successor liability, that specifically, upon Closing, Purchaser shall not be
deemed to (i) be the successor of Seller, (ii) have, de facto or otherwise,
merged with or into Seller, or (iii) be a mere continuation or substantial
continuation of Seller or the enterprise of Seller. Nothing in this Section
7.1(i), or any other Section of this Agreement, shall preclude Seller or
Purchaser from consummating the Transactions if Purchaser, in its sole
discretion, waives the requirement that the Sale Order or any other orders be
Final Orders. No notice of such waiver of this or any other condition to Closing
need be given except to Seller or Purchaser, as explicitly required in this
Agreement, it being the intention of the parties hereto that Purchaser shall be
entitled to, and is not waiving, the protection of Section 363(m) of the
Bankruptcy Code, the mootness doctrine or any similar statute or body of law if
the Closing occurs in the absence of a Final Order. The Sale Order shall not
have been modified, amended, dissolved, revoked or rescinded and shall be in
full force and effect on the Closing Date.
(j) Actions relating to Assigned Contracts. Seller shall have
taken all action required to have been taken and made all payments required to
have been made to permit assumption and assignment of the Assigned Contracts to
Purchaser under Sections 365(b) and (f) of the Bankruptcy Code.
(k) ▇▇▇▇ of Sale. Seller shall have duly executed and
delivered to Purchaser the ▇▇▇▇ of Sale.
(l) Lease Assignments. Seller shall have duly executed and
delivered to Purchaser each of the Lease Assignment Documents together with any
reasonably necessary transfer declarations or other filings.
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(m) Intellectual Property Instruments. Seller shall have duly
executed and delivered to Purchaser each of the Intellectual Property
Instruments.
(n) IP Agreements. Notwithstanding anything to the contrary
contained in this Agreement, in addition to the matters described in Section
7.1(i), the Sale Order shall provide and declare, to the extent not inconsistent
with the Bankruptcy Code or other Applicable Law, that all right, title and
interest of Seller under each of the Contracts described on Schedule 7.1(n)
hereto (the "IP Agreements") shall, upon Closing, be transferred and assigned to
and fully and irrevocably vest in Purchaser and remain in full force and effect,
unless Seller shall have otherwise obtained consent to the assignment to and
assumption by Purchaser of the IP Agreements in form and substance reasonably
satisfactory to Purchaser.
(o) Outstanding Claims. Seller shall have resolved, to
Purchaser's reasonable satisfaction, any outstanding Claims, including contract,
litigation, licensing or infringement Claims, relating to the Acquired Assets or
the Assumed Liabilities.
(p) Employment Arrangements. Seller's employment arrangements
with the individuals listed on Schedule 7.1(p) shall have been modified in a
manner reasonably acceptable to Purchaser, and such modified employment
arrangements, in the form approved by Purchaser, shall be in effect on the
Closing Date without giving effect to any supplement, waiver or additional
modification thereto.
The foregoing conditions are for the sole benefit of Purchaser and may be waived
by Purchaser, in whole or in part, at any time and from time to time in its sole
discretion. The failure by Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time prior
to the Closing.
Section 7.2 Conditions to Obligations of Seller to Effect the Clos
ing. The obligations of Seller to consummate the Closing shall be subject to the
satisfaction (or waiver by Seller) on or prior to the Closing Date of each of
the following conditions:
(a) Representations and Warranties. All of the representations
and warranties of Purchaser set forth in this Agreement that are qualified as to
materiality shall be true and complete in all respects and any such
representations and warranties that are not so qualified shall be true and
complete in all material respects, in each case as of the date of this Agreement
and as of the Closing Date, other
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than representations and warranties that speak as of a specific date or time
(which need only be so true and correct as of such date or time).
(b) Purchaser's Performance of Covenants. Purchaser shall not
have failed to perform in any material respect any material obligation or to
comply in any material respect with any agreement or covenant of Purchaser to be
performed or complied with by it under this Agreement.
(c) Certificate of Purchaser's Officers. Seller shall have
received from Purchaser a certificate, dated the Closing Date, duly executed by
the Chief Executive Officer or President of Purchaser, satisfactory in form to
Seller, to the effect of paragraphs (a) and (b) above.
(d) Sale Order. The Sale Order shall have been entered by the
Bankruptcy Court.
The foregoing conditions are for the sole benefit of Seller and may be waived by
Seller (except for Section 7.2(d)), in whole or in part, at any time and from
time to time in its sole discretion. The failure by Seller at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time prior to the Closing.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated or
abandoned at any time prior to the Closing Date:
(a) By the mutual written consent of Purchaser and Seller;
(b) By either Purchaser or Seller if the Bankruptcy Court or
any other Governmental Entity shall have issued an order, decree or ruling or
taken any other action (which order, decree, ruling or other action the parties
hereto shall use their reasonable efforts to lift), which permanently restrains,
enjoins or otherwise prohibits the (consummation of the Transactions) and such
order, decree, ruling or other action shall have become final and
non-appealable;
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(c) By either Purchaser or Seller upon written notice given to
the other party in the event that the Closing shall not have taken place on or
before March 31, 2002 (the "Termination Date"), provided that the failure of the
Closing to occur on or before such date is not the result of a breach of any
covenant, agreement, representation or warranty hereunder by the party seeking
such termination;
(d) By Seller if Purchaser shall have breached in any material
respect any of its representations, warranties, covenants or other agreements
contained in this Agreement, which breach cannot be or has not been cured within
ten Business Days after the giving of written notice by Seller to Purchaser
specifying such breach and so that the conditions set forth in Section 7.2(a) or
Section 7.2(b) would not be satisfied at the time of such breach;
(e) By Purchaser:
(i) if Seller shall have breached in any material respect
any of its representations, warranties, covenants or other agreements
contained in this Agreement, which breach cannot be or has not been cured
within ten Business Days after the giving of written notice by Purchaser
to Seller specifying such breach and so that the conditions set forth in
Section 7.1(e) or Section 7.1(f) would not be satisfied at the time of
such breach;
(ii) if there shall have occurred any Material Adverse
Effect or any development that, insofar as reasonably can be foreseen, is
reasonably likely to result in any Material Adverse Effect;
(iii) if Purchaser shall have determined that the
conditions to Purchaser's obligations hereunder set forth in Section
7.1(c) are not capable of being satisfied upon terms reasonably
satisfactory to Purchaser, whether or not any Governmental Entity shall
have issued an order, decree or ruling or taken any other action (which
order, decree, ruling or other action the parties hereto shall use their
reasonable efforts to lift), which restrains, enjoins or otherwise
prohibits the acquisition by Purchaser of such Assets;
(iv) if the Bankruptcy Court has not entered the Bidding
Procedures Order by November 2, 2001;
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(v) if the Bankruptcy Court has not entered the Sale
Order by the date that is 50 days after the Petition Date;
(vi) if the Sale Order has not become a Final Order or if
the Sale Order has been revoked, rescinded or modified in any material
respect;
(vii) if the Asset Purchase Agreement and the
Transactions are not approved by the Bankruptcy Court in accordance with
the Sale Order;
(viii) if Seller gives written notice to Purchaser that
it is unable to obtain a consent required by Section 7.1(c);
(ix) if Seller's Board of Directors determines in good
faith, after consultation with outside counsel, and evidenced by a duly
adopted board resolution, that, in order to comply with its fiduciary
duties under Applicable Law, it is required to enter into a definitive
agreement with respect to an Alternative Transaction and Seller executes
and delivers such a definitive agreement with respect to an Alternative
Transaction;
(x) if the Bankruptcy Court enters an order that
contemplates a Business Combination other than by Purchaser;
(xi) if there has been a Default or Event of Default (as
such terms are defined in the Loan Agreement) under the Loan Agreement;
(xii) if Seller becomes a proponent or co- proponent of
any plan of reorganization under the Bankruptcy Code filed with the
Bankruptcy Court which does not contemplate an acquisition of the Acquired
Assets by Purchaser on the terms set forth herein; or
(xiii) if Seller's Bankruptcy Case is converted from a
case under Chapter 11 of the Bankruptcy Code to a case under Chapter 7 of
the Bankruptcy Code or is dismissed, if a trustee is appointed in Seller's
Bankruptcy Case, or if the periods of exclusivity under Sections 1121(b)
and 1121(c) of the Bankruptcy Code are
59
terminated or reduced by the Bankruptcy Court pursuant to Section 1121(d)
in Seller's Bankruptcy Case.
(f) by Seller if the Loan Agreement is terminated; provided,
however, that Seller shall not be entitled to terminate this Agreement pursuant
to this Section 8.1(f) if there has occurred a Default or Event of Default (as
such terms are defined in the Loan Agreement) under the Loan Agreement or Seller
has otherwise materially breached any provision of the Loan Agreement.
Section 8.2 Effect of Termination.
(a) In the event of the termination or abandonment of this
Agreement by any party hereto pursuant to the terms of this Agreement, written
notice thereof shall forthwith be given to the other party or parties specifying
the provision hereof pursuant to which such termination or abandonment of this
Agreement is made, and there shall be no liability or obligation thereafter on
the part of Purchaser or Seller except (A) for fraud, (B) for willful breach of
any provision of this Agreement prior to such termination or abandonment of the
Transactions, or (C) as set forth in Section 8.2(b) or Section 6.7(e).
(b) If Purchaser terminates this Agreement pursuant to Section
8.1(e)(x) hereof, Seller shall pay, or cause to be paid to Purchaser, at the
time of termination, an amount equal to the Termination Fee plus the Expense
Reimbursement Amount. Subject to the provisions of the immediately preceding
sentence, unless this Agreement is terminated by Seller pursuant to Section
8.1(d), Seller shall pay, or cause to be paid to Purchaser, an amount equal to
the Expense Reimbursement Amount upon termination of this Agreement. Any
payments required to be made pursuant to this Section 8.2(b) shall be made by
wire transfer of same day funds to an account designated by Purchaser. Any
payment to Purchaser under this Section 8.2(b) shall not preclude any other
rights or remedies which may be exercised by Purchaser under this Agreement.
Section 8.3 Extension; Waiver. At any time prior to the Closing,
each of the parties hereto may (i) extend the time for the performance of any of
the obligations or acts of any other party hereto, (ii) waive any inaccuracies
in the representations and warranties of any other party contained herein or in
any document delivered pursuant hereto, (iii) waive compliance with any of the
agreements of the other party contained herein, or (iv) waive any condition to
its obligations hereunder. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Survival of Covenants, Representations and Warranties.
The representations and warranties set forth in Article IV and Article V shall
not survive the Closing Date; provided, that all covenants and agreements that
contemplate or may involve actions to be taken or obligations in effect after
the Closing shall survive the Closing Date.
Section 9.2 Fees and Expenses. (a) All costs and expenses incurred
in connection with this Agreement and the consummation of the Transactions shall
be paid by the party incurring such expenses, except as provided in Section
8.2(b) and Section 6.7(e).
(b) In accordance with Section 1146(c) of the Bankruptcy Code,
the instruments transferring the Acquired Assets to Purchaser shall contain the
following endorsement:
"Because this [instrument] has been authorized pursuant to an
Order of the United States Bankruptcy Court for the District
of Delaware dated _____, 2001, it is exempt from transfer
taxes, stamp taxes or similar taxes pursuant to 11 U.S.C.
ss.1146(c)."
(c) In the event sales, use or other Transfer Taxes (including
real estate transfer Taxes) are assessed at Closing or at any time thereafter on
the transfer of any other Assets, such Taxes incurred as a result of the
transactions contemplated hereby shall be paid by Seller or its Subsidiaries.
Purchaser and Seller and its Subsidiaries shall cooperate in providing each
other with any appropriate resale exemption certifications and other similar
documentation.
Section 9.3 Amendment and Modification. This Agreement may be
amended, modified and supplemented in any and all respects, but only by a
written instrument signed by all of the parties hereto expressly stating that
such instrument is intended to amend, modify or supplement this Agreement.
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Section 9.4 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given when mailed, delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by such party by like notice):
if to Purchaser, to:
▇▇▇▇▇▇▇▇ Communications, LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: P. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy (which shall not constitute
notice) under separate cover to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to Seller, to:
IBEAM Broadcasting Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy (which shall not constitute
notice) under separate cover to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ LLP
Two Embarcadero Place
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq. and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as a party may from time to time designate in writing
in accordance with this Section. Each notice or other communication given to any
party hereto in accordance with the provisions of this Agreement shall be deemed
to have been received (a) on the Business Day it is sent, if sent by personal
delivery, or (b) on the first Business Day after sending, if sent by overnight
delivery, properly addressed and prepaid or (c) upon receipt, if sent by mail
(regular, certified or registered); provided, however, that notice of change of
address shall be effective only upon receipt. The parties agree that delivery of
process or other papers in connection with any such action or proceeding in the
manner provided in this Section 9.4, or in such other manner as may be permitted
by law, shall be valid and sufficient service thereof.
Section 9.5 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other party.
Section 9.6 Entire Agreement; No Third Party Beneficiaries. This
Agreement, the Disclosure Letter and other schedules, annexes, and exhibits
hereto, the Ancillary Agreements, the Confidentiality Agreement, the Bidding
Procedures Order and the Sale Order (a) constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof and thereof and supersede
and cancel all prior agreements, negotiations, correspondence, undertakings,
understandings and communications of the parties, oral and written, with respect
to the subject matter hereof, and (b) are not intended to confer upon any Person
other than the parties hereto and thereto any rights or remedies hereunder.
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Section 9.7 Severability. Any term or provision of this Agreement
that is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction or other authority declares that any term or
provision hereof is invalid, void or unenforceable, the parties agree that the
court making such determination shall have the power to reduce the scope,
duration, area or applicability of the term or provision, to delete specific
words or phrases, or to replace any invalid, void or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision.
Section 9.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND, TO THE
EXTENT APPLICABLE, THE BANKRUPTCY CODE, WITHOUT GIVING EFFECT TO THE PRINCIPLES
OF CONFLICTS OF LAW THEREOF.
Section 9.9 Exclusive Jurisdiction. If the Bankruptcy Court does not
have or declines to exercise subject matter jurisdiction over any action or
proceeding arising out of or relating to this Agreement, then each party (a)
agrees that all such actions or proceedings shall be heard and determined in
federal court of the United States for the District of Delaware, (b) irrevocably
submits to the jurisdiction of such courts in any such action or proceeding, (c)
consents that any such action or proceeding may be brought in such courts and
waives any objection that such party may now or hereafter have to the venue or
jurisdiction or that such action or proceeding was brought in an inconvenient
court, and (d) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such party at its
address as provided in Section 9.4 (provided that nothing herein shall affect
the right to effect service of process in any other manner permitted by Delaware
law).
Section 9.10 Election of Remedies. Neither the exercise of nor the
failure to exercise a right of set-off or to give notice of a claim under this
Agreement will constitute an election of remedies or limit Purchaser in any
manner in the enforcement of any other remedies that may be available to any of
them, whether at law or in equity.
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Section 9.11 Assignment. Neither this Agreement not any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written content of the other party, except that (a) Purchaser may assign, in its
sole discretion, any or all of its rights, obligations and interests hereunder
to any Affiliate or Subsidiary of Purchaser, and (b) Purchaser may assign any or
all of its rights, obligations and interests under this Agreement to any Person
or Persons, or any assignee of such Person or Persons, providing to Purchaser or
any of its Affiliates or Subsidiaries financing for the Transactions, or to any
Person providing to Purchaser or any of its Affiliates or Subsidiaries financing
related to the Business or to any of the businesses of Purchaser and its
Affiliates or Subsidiaries. Subject to the first sentence of this Section 9.11,
this Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and permitted assigns.
Section 9.12 Headings. The article, section, paragraph and other
headings contained in this Agreement are inserted for convenience of reference
only and shall not affect in any way the meaning or interpretation of this
Agreement.
Section 9.13 No Third Party Beneficiaries. No Person other than the
parties hereto and their successors and permitted assigns is intended to be a
beneficiary of this Agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Purchaser and Seller have executed this
Agreement or caused this Agreement to be executed by their respective officers
thereunto duly authorized as of the date first written above.
▇▇▇▇▇▇▇▇ COMMUNICATIONS, LLC
By: ________________________________
Name:
Title:
iBEAM BROADCASTING CORPORATION
By: ________________________________
Name:
Title:
66