Exhibit 2.1
-----------
EXECUTION COPY
CONTRIBUTION AGREEMENT
BY AND BETWEEN
NORTEL NETWORKS INC.
AND
VOLT DELTA RESOURCES, LLC
AS OF
JUNE 11, 2004
<PAGE>
TABLE OF CONTENTS
PAGE
Article I
DEFINITIONS
Section 1.01. Certain Defined
Terms..........................................1
Section 1.02. Other Defined
Terms...........................................15
Section 1.03. Terms
Generally...............................................16
Article II
CONTRIBUTION
Section 2.01.
Contribution..................................................16
Section 2.02. Assumption and Exclusion of
Liabilities.......................17
Section 2.03. Issuance of Shares and
Membership Interests...................17
Section 2.04.
Closing.......................................................18
Section 2.05. Closing Deliveries by Nortel
Networks.........................18
Section 2.06. Closing Deliveries by the
Company.............................19
Section 2.07.
Accounting....................................................19
Article III
REPRESENTATIONS AND WARRANTIES OF NORTEL NETWORKS
Section 3.01. Incorporation and Authority
of Nortel Networks and the Nortel
Contributing Entities........................................
19
Section 3.02. No
Conflict...................................................20
Section 3.03. Consents and
Approvals........................................20
Section 3.04. Financial Information; No
Undisclosed Liabilities.............21
Section 3.05. Absence of Material Adverse
Effect............................21
Section 3.06. Absence of
Litigation.........................................21
Section 3.07. Compliance with
Laws..........................................21
Section 3.08. Governmental
Licenses.........................................22
Section 3.09. The
Assets....................................................22
Section 3.10. Employee Benefit
Matters......................................22
Section 3.11. Environmental
Matters.........................................24
Section 3.12. Nortel Networks
Contracts.....................................24
Section 3.13.
Brokers.......................................................25
Section 3.14. Intellectual
Property.........................................25
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TABLE OF CONTENTS
(continued)
PAGE
Section 3.15. Relationships with Customers
and Suppliers....................26
Section 3.16. Inventory and
Supplies........................................26
Section 3.17. EXCLUSIVITY OF
REPRESENTATIONS................................27
Article IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.01. Incorporation and Authority
of the Company and the Company
Entities......................................................27
Section 4.02. No
Conflict...................................................28
Section 4.03. Consents and
Approvals........................................28
Section 4.04. Capitalization;
Subsidiaries..................................28
Section 4.05. Financial Information; No
Undisclosed Liabilities.............29
Section 4.06. Absence of Material Adverse
Effect............................30
Section 4.07. Absence of
Litigation.........................................30
Section 4.08. Compliance with
Laws..........................................30
Section 4.09. Governmental
Licenses.........................................30
Section 4.10.
Assets........................................................30
Section 4.11. Real
Property.................................................31
Section 4.12. Company Employee
Plans........................................31
Section 4.13. Environmental
Matters.........................................34
Section 4.14. Company
Contracts.............................................34
Section 4.15.
Brokers.......................................................34
Section 4.16. Intellectual
Property.........................................34
Section 4.17. Working
Capital...............................................35
Section 4.18. Tax
Matters...................................................35
Section 4.19. Relationships with Customers
and Suppliers....................36
Section 4.20. Revenues of the
Company.......................................36
Section 4.21. EXCLUSIVITY OF
REPRESENTATIONS................................37
Article V
ADDITIONAL AGREEMENTS
Section 5.01. Conduct of Business Prior to
the Closing......................37
Section 5.02. Access to
Information.........................................40
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TABLE OF CONTENTS
(continued)
PAGE
Section 5.03.
Confidentiality...............................................41
Section 5.04. Regulatory and Other
Authorizations; Consents.................42
Section 5.05. Bulk
Sales....................................................42
Section 5.06. Risk of
Loss..................................................42
Section 5.07. Certain Services and
Benefits Provided by Affiliates..........42
Section 5.08. Further
Action................................................42
Section 5.09. Ancillary
Agreements..........................................43
Section 5.10. Maintenance of
Records........................................43
Section 5.11. Obtaining
Consents............................................44
Section 5.12. Deletion of Non-Transferred
Software..........................44
Section 5.13. Equipment
Leases..............................................44
Section 5.14. Notice of Certain
Events......................................45
Section 5.15. Nortel Networks Software
License..............................45
Section 5.16. Supplementary
Rights..........................................45
Section 5.17. Certain Cash
Adjustments......................................45
Section 5.18. Certain Obligations
regarding Licensed IPLA IP................45
Section 5.19. Other
Marks...................................................46
Section 5.20. Assignment
Back...............................................46
Section 5.21. License
Agreements............................................47
Section 5.22. Company
Entities..............................................47
Article VI
EMPLOYEE MATTERS
Section 6.01. Employee
Matters..............................................47
Article VII
TAX MATTERS
Section 7.01. Tax
Matters...................................................48
Section 7.02.
Procedure.....................................................49
Article VIII
CONDITIONS TO CLOSING
Section 8.01. Conditions to Obligations of
Nortel Networks..................50
Section 8.02. Conditions to Obligations of
the Company......................51
<PAGE>
TABLE OF CONTENTS
(continued)
PAGE
Article IX
TERMINATION AND WAIVER
Section 9.01.
Termination...................................................52
Section 9.02. Effect of
Termination.........................................52
Section 9.03.
Waiver........................................................52
Article X
INDEMNIFICATION
Section 10.01. Indemnification by the
Company................................52
Section 10.02. Indemnification by Nortel
Networks............................53
Section 10.03. Limitations on
Indemnification................................54
Section 10.04. Notification of
Claims........................................55
Section 10.05. Exclusive
Remedies............................................56
Section 10.06. No Special
Damages............................................56
Article XI
GENERAL PROVISIONS
Section 11.01.
Survival......................................................56
Section 11.02.
Expenses......................................................57
Section 11.03.
Notices.......................................................57
Section 11.04. Public
Announcements..........................................57
Section 11.05.
Headings......................................................58
Section 11.06. Disclosure
Schedules..........................................58
Section 11.07.
Severability..................................................58
Section 11.08. Entire
Agreement..............................................58
Section 11.09.
Assignment....................................................59
Section 11.10. No Third-Party
Beneficiaries..................................59
Section 11.11.
Amendment.....................................................59
Section 11.12. Governing
Law.................................................59
Section 11.13.
Counterparts..................................................59
Section 11.14. No
Presumption................................................59
Section 11.15. Specific
Performance..........................................59
<PAGE>
EXHIBITS
A.
Assumption Agreements
B. Bills
of Sale
C.
Members' Agreement
D.
Principles for Transferring Employees
E.
Subcontract Agreement
F. OEM
Supply Agreement No. 021896
G. IWS/MWS Software License
Agreement
H.
Relationship Agreement
I.
Employee Loan Agreement
J.
Services Agreement
K.
Transition Services Agreement
L.
Intellectual Property License Agreement
M.
Multimedia Work Station Intellectual Property License Agreement
N. Voice
Over IP Interface and IWS License Agreement
O.
Trademark License Agreement
P.
Assignments of Trademark
Q.
Assignment of Patents Agreement
R. Nortel
Networks Lab Software License Schedule
S. Real
Estate License Agreements
COMPANY DISCLOSURE SCHEDULE
NNI DISCLOSURE SCHEDULE
<PAGE>
CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT is made and entered into as of June
11,
2004, by and between Volt Delta Resources,
LLC, a Nevada limited liability
company (the "Company"), and Nortel
Networks Inc., a Delaware corporation
("Nortel Networks").
RECITALS
WHEREAS, Nortel Networks or its Affiliates and the Company or
its
Subsidiaries own certain properties, assets
and goodwill that are primarily used
or held for use in connection with their
respective Directory and Operator
Services businesses;
WHEREAS, Nortel Networks and its Affiliates and the Company and
its
Affiliates desire to combine their
respective directory and operator services
businesses;
WHEREAS, the Company desires to acquire the Assets and to assume
the
Assumed Liabilities in exchange for
Membership Interests (each as defined
below); and
WHEREAS, the parties desire to effect the transactions described
above,
to make certain representations and
warranties and to enter into certain
agreements and undertakings with respect
thereto.
NOW, THEREFORE, in consideration of the mutual covenants,
representations and warranties, and subject
to the terms and conditions
contained herein, the parties hereto agree
as follows:
Article I
DEFINITIONS
Section 1.01. Certain
Defined Terms. As used
in this Agreement,
the
following terms shall have the following
meanings:
"Action" means any claim, action, suit, arbitration, inquiry,
audit,
proceeding or investigation by or before
any Governmental Authority.
"Administrative Services Software" means any financial, human
resources
and corporate administrative and management
information systems and Software,
and general infrastructure-related systems
and Software, including general
Software development and design tools and
databases (as distinguished from and
excluding any applications or operating
information systems and Software
embodied in or used in the design,
development, manufacture, maintenance,
operation and testing of the Products).
"Affiliate" means, with respect to any specified Person, any
other
Person who or that, directly or indirectly
through one or more intermediaries,
Controls, is Controlled by or is under
common Control with such specified
Person.
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"Agreement" means this Agreement, including all exhibits and
schedules
hereto, and all amendments hereto.
"Ancillary Agreements" means the Assumption Agreements, the Bills
of
Sale, the Members' Agreement, the General
Supply Agreement, the Relationship
Agreement, the Subcontract Agreement, the
Employee Loan Agreement, the Services
Agreement, the Transition Services
Agreement, the License Agreements, the
Trademark Assignment, the Trademark License
Agreement, the Real Estate License
Agreements, the Nortel Networks Software
License, the Patent Assignment and the
IWS/MWS Software License Agreement.
"Applicable Law" means, with respect to any Person, any U.S. or
foreign, federal, state, provincial or
local, law, statute, ordinance,
regulation, rule, code, order, common law,
other requirement or rule of law or
stock exchange rule applicable to such
Person or any of its respective
properties, assets, officers, directors,
employees, independent contractors,
consultants or agents.
"Assets" means all right, title and interest of Nortel Networks and
the
Nortel Contributing Entities in and to the
following assets, properties and
rights:
(a) Transferred Equipment;
(b) Business Information;
(c) Employee Information;
(d) the Transferred Intellectual Property;
(e) the tangible embodiment of the Transferred Software (as such
is
embodied in or used in or for Products)
(the "Tangible Software"), including
user manuals, specifications, flow charts
and source code therefor;
(f) the Nortel Networks Contracts;
(g) permits, licenses, waivers and authorizations from or with
any
Governmental Authority listed or described
in Section 1.01(a) of the NNI
Disclosure Schedule;
(h) Business Software; and
(i) Inventory.
Notwithstanding the foregoing, the Assets shall not include any
Excluded Assets.
"Assumed Liabilities" means all Liabilities of Nortel Networks and
the
Nortel Contributing Entities in respect of
the Assets or the Transferring
Employees arising on or after the Effective
Time (excluding any Retained
Liabilities) whether or not accrued,
including:
(a) any Liability arising on or after the applicable Employment
Transfer Time which relates to or arises
from or in connection with the
Company's employment or the
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employment by any of its Subsidiaries
(including coverage under the Company
Benefit Plans) of Transferring
Employees;
(b) any Liability arising on or after the Effective Time under
the
Nortel Networks Contracts (other than any
Liability arising out of or relating
to a breach or default of a Nortel Networks
Contract that occurred prior to the
Effective Time);
(c) any Liability arising on or after the Effective Time with
respect
to the Transferred Intellectual Property
and the Tangible Software (other than
Liabilities arising from Nortel Networks'
and its Affiliates' exercise of rights
granted under Section 2.05 of the
Intellectual Property License Agreement); and
(d) Liabilities for, or related to any obligation for, any Tax that
the
Company or any Company Entity bears under
Article VII of this Agreement.
"Assumption Agreements" means the Assumption Agreements to be
executed
by the parties thereto on the Closing Date,
substantially in the forms of
Exhibit A-1, Exhibit A-2 and Exhibit
A-3.
"Bill of Sale" means the Bills of Sale and Conveyance to be
executed by
the parties thereto on the Closing Date,
substantially in the forms of Exhibit
B-1, Exhibit B-2 and Exhibit B-3.
"Business Day" means any day that is not a Saturday, a Sunday or
other
day on which banks are required or
authorized by Applicable Law to be closed in
New York, New York, USA or Toronto,
Ontario, Canada.
"Business Employees" means employees of Nortel Networks or a
Nortel
Contributing Entity listed in Section
3.10(b) of the NNI Disclosure Schedule.
"Business Information" means copies of all books, records, files,
sales
and promotional literature, customer lists
and other sales-related materials and
documentation of Nortel Networks and the
Nortel Contributing Entities available
in paper or on current databases used or
held for use primarily with respect to
the Nortel Networks Business, including
product documentation, marketing
materials, brochures, training materials,
records relating to the maintenance of
the Assets and the development, sale,
licensing, maintenance or servicing of the
Products, and the tangible embodiment of
the Transferred Trade Secrets, as and
to the extent reasonably and readily under
the control of any Business Employee,
but in each case, excluding all books,
records, files and documentation relating
to employees of Nortel Networks or its
Affiliates other than the Employee
Information.
"Business Plan" means the business plan attached as Exhibit C to
the
Members' Agreement.
"Business Software" means Corporate Desktop Software, Single
Use
Desktop Software and Other Business
Software and the Contracts therefor.
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"Canadian Company Entity" means Volt Delta Company, an
unlimited
liability company organized pursuant to the
laws of Nova Scotia, Canada.
"Canadian Nortel Contributing Entities" means Nortel Networks
Limited,
a corporation organized pursuant to the
laws of Canada, and Nortel Networks
Technology Corporation, a corporation
organized pursuant to the laws of Canada.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Business" means the supply of systems (hardware and
software)
that interface to switching systems,
directory listing information and enhanced
information database management services,
and maintenance services, to companies
and IT outsourcing.
"Company Contract" means (i) each of the Contracts listed on
Section
1.01(c) of the Company Disclosure Schedule
of the Company Business, and (ii) any
non-competition agreement or any other
agreement or obligation that purports to
limit in any material respect the manner in
which, or the localities in which,
all or any material portion of the Company
Business, has been, is or is proposed
to be conducted.
"Company Disclosure Schedule" means the Company Disclosure
Schedule
delivered by the Company to Nortel Networks
on the date hereof.
"Company Entities" means the Canadian Company Entity and the
Mexican
Company Entity.
"Confidential Information" means any business, marketing,
technical,
scientific or other information disclosed
by any party which, at the time of
disclosure, is designated as confidential
(or like designation), is disclosed in
circumstances of confidence, or would be
understood by a party, exercising
reasonable business judgment, to be
confidential. It is understood that
Confidential Information includes design
documentation, implementation details,
Trade Secrets, pricing and sales
information, business plans, marketing plans,
research plans, financial data, forecasts,
computer programs, code, algorithms,
inventions, know-how, recording techniques,
budgets and projections, business
processes and systems and customer,
supplier and personnel information.
"Contract" means any note, bond, mortgage, indenture, guarantee,
other
evidence of indebtedness, license, lease,
option, contract, subcontract,
undertaking, covenant, agreement or other
instrument or document.
"Control" means, as to any Person, the power to direct or cause
the
direction of the management and policies of
such Person, whether through the
ownership of voting securities, by contract
or otherwise. The term "Controlled"
shall have a correlative meaning.
"Corporate Desktop Software" means Software licensed to Nortel
Networks
as of the Closing Date which Software is
(i) installed on personal computers
forming part of the Transferred Equipment,
(ii) listed or described in Section
1.01(c) of the NNI Disclosure Schedule, and
(iii) licensed under one or more
agreements, which, by their current terms,
permit Nortel Networks to transfer to
the purchaser of such computers forming
part of the Transferred
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Equipment the license to use such Software,
while also permitting Nortel
Networks to retain the license to use such
Software on such other computers
retained by Nortel Networks.
"Dollar" and "$" mean lawful money of the United States.
"Effective Time" means 12:01 a.m. Eastern Standard Time on the
Closing
Date.
"Employee Information" means the employee data relating to the
Transferring Employees listed or scheduled
in Section 3.10(b) of the NNI
Disclosure Schedule, to the extent such
employee data may be disclosed or
transferred consistent with Applicable
Law.
"Employee Loan Agreement" means the Employee Loan Agreement to
be
executed by the parties thereto on the
Closing Date, substantially in the form
of Exhibit I.
"Employment Agreement" means a written employment agreement between
the
applicable party or one of such party's
Affiliates and the applicable employee
which comprehensively sets forth such
employee's terms and conditions of
employment in a form other than the
standard form of employment offer which such
party or Affiliate generally utilizes with
respect to its other employees.
"Environmental Law" means any Applicable Law currently in effect
and
any judicial or administrative
interpretation thereof, including any judicial or
administrative order, consent decree or
judgment, relating to pollution or
protection of the environment, health,
safety or natural resources, including to
the use, handling, transportation,
treatment, storage, disposal, release or
discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification
number, license or other authorization
required under or issued pursuant to any
Environmental Law.
"Equipment" means computer hardware (including personal and
other
computers), office furnishings and
fixtures, and telecommunications, robotic,
manufacturing, testing, design and other
equipment, excluding in all cases any
Intellectual Property Rights covering,
embodied in or connected to any of the
foregoing.
"Equipment Leases" means those Equipment leases listed or described
in
Section 1.01(e)(i) of the NNI Disclosure
Schedule.
"Excluded Assets" means:
(a) all claims, causes of action and rights of Nortel Networks or
any
of its Affiliates against any third party
with respect to any Retained
Liabilities or any other Liabilities for
which the Company is indemnified by
Nortel Networks, or for which Nortel
Networks or any Nortel Contributing Entity
is otherwise responsible, under this
Agreement (including, without limitation,
rights of set-off, rights to refunds and
rights of recoupment from or against
any such third party);
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(b) Nortel Networks' and each Nortel Contributing Entity's
minute
books, stock ledgers and Tax records and
any other books, records and documents
of Nortel Networks or any Nortel
Contributing Entity which is not Business
Information;
(c) all rights of Nortel Networks and the Nortel Contributing
Entities
under this Agreement, the Parent Agreement,
the Ancillary Agreements and the
Retained Contracts;
(d) all rights to Tax refunds, credits or similar benefits relating
to
the Assets or the Nortel Networks Business
allocable to Nortel Networks or the
Nortel Contributing Entities under Article
VII;
(e) other than as provided in Section 5.07, any rights of the
Nortel
Networks Business to receive from Nortel
Networks corporate overhead and shared
services, including without limitation,
treasury, legal, tax, human resources,
risk management, finance and group
purchasing plans;
(f) all cash, cash equivalents, bank accounts, prepaid
expenses,
accounts receivable and other current
assets of the Nortel Networks Business;
(g) all stock or equity interests in any Person;
(h) all rights and assets relating to or otherwise intended to
fund, in
whole or in part, any Liabilities or
obligations under any Nortel Networks
Benefit Plan;
(i) any and all
Intellectual Property Rights owned by or licensed to
Nortel Networks or any Nortel Contributing
Entity (and any tangible embodiments
of any such property), except for the
Transferred Intellectual Property, the
rights to the Business Software, the rights
licensed to Nortel Networks and the
Nortel Contributing Entities under Third
Party Licenses, the Tangible Software
and the rights licensed to the Company
under the License Agreements;
(j) rights in any real property, whether owned or leased, other
than
the rights described in the Real Estate
License Agreements;
(k) any and all Equipment owned by or licensed to Nortel Networks
or
any Nortel Contributing Entity, except for
the Transferred Equipment;
(l) all Software owned by or licensed to Nortel Networks or any
Nortel
Contributing Entity, except for Business
Software, rights to Software under the
Third Party Licenses, the rights to
Software licensed to the Company under the
License Agreements and the Tangible
Software, it being understood that, for the
avoidance of doubt, the Transferred
Software is not an Excluded Asset;
(m) the Network Identifiers;
(n) any books, records, files, documentation or data relating
to
employees of Nortel Networks or its
Affiliates, except for Employee Information;
and
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(o) any other assets set forth in Section 1.01(e)(ii) of the
NNI
Disclosure Schedule.
"GAAP" means United States generally accepted accounting
principles,
consistently applied.
"General Supply Agreement" means the OEM Supply Agreement No.
021896 to
be executed by the parties thereto on the
Closing Date, substantially in the
form of Exhibit F.
"Governmental Authority" means any U.S. or foreign, federal,
state,
provincial or local governmental,
regulatory or administrative authority, agency
or commission or any court, tribunal, or
judicial or arbitral body.
"Governmental Order" means any order, writ, judgment,
injunction,
decree, stipulation, determination or award
entered by or with any Governmental
Authority.
"Hazardous Materials" means any natural or artificial substance
(whether in the form of solid, gas, vapor
or liquid alone or in combination with
any other substance), including petroleum,
petroleum products, petroleum
by-products or breakdown products,
radioactive materials, asbestos in any form
that is friable or polychlorinated
biphenyls that is regulated as a pollutant,
contaminant or hazardous substance,
material or waste under any Environmental
Law.
"Intellectual Property License Agreement" means the
Intellectual
Property License Agreement to be executed
by the parties thereto on the Closing
Date, substantially in the form of Exhibit
L.
"Intellectual Property" or "Intellectual Property Rights" means
all
proprietary and intellectual property
rights, in any jurisdiction, whether owned
or held for use under license, including
such rights in and to: (i) trademarks,
service marks, brand names, distinguishing
guises, trade dress, trade names,
words, symbols, color schemes, business
names, internet domain names and other
indications of origin (collectively,
"Trademarks"); (ii) patents and pending
patent applications (including all
provisionals, divisionals, continuations,
continuations-in-part, re-examination and
reissue patents), utility models,
inventors' certificates and invention
disclosures (collectively, "Patents");
(iii) trade secrets and other confidential
or non-public business or technical
information, including ideas, formulas,
compositions, program devices,
compilations, patterns, discoveries and
improvements, know-how, show-how,
manufacturing and production methods,
processes and techniques, and research and
development information; drawings, designs,
specifications, plans, proposals and
technical and system data; analytical
models, investment and lending strategies
and records, financial and other products;
financial, marketing and business
data, pricing and cost information;
business and marketing plans and customer
and supplier lists and information; in each
case whether patentable,
copyrightable or not (collectively, "Trade
Secrets"); (iv) software computer
programs and databases, including all
object code, source code, algorithms,
subroutines, specifications, data and
documentation and all translations,
compilations, arrangements, adaptations,
and derivative works thereof, in each
case whether patentable, copyrightable or
not, and all documentation and
embodiments thereof in all forms of media
(collectively, "Software"); (v) all
copyrights, including copyright
registrations and applications to register
copyrights, including for writings and
other works of authorship,
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product documentation, marketing materials,
brochures and training materials
(collectively, "Copyrights"); (vi) mask
works or integrated circuit topographies
(collectively, "Mask Works"); (vii)
industrial designs ("Industrial Designs");
and (viii) rights to limit the access, use
or disclosure of Confidential
Information by any Person; in each case
including all registrations of, and
applications to register, any of the
foregoing with any Government Authority and
any renewals or extensions thereof; the
goodwill associated with each of the
foregoing; and any claims or causes of
action or defenses arising out of or
related to any of the foregoing.
"Inventory" means raw materials, work-in-process and finished
goods,
supplies, parts, spare parts and other
inventory (including in transit, or
consignment or in the possession of a third
Person) to the extent dedicated to,
embodied in or constituting products used
in the Nortel Networks Business and
owned by Nortel Networks or any of the
Nortel Contributing Entities.
"IRS" means the United States Internal Revenue Service.
"IWS/MWS Software License Agreement" means the IWS/MWS Software
License
Agreement to be executed by the parties
thereto on the Closing Date,
substantially in the form of Exhibit G.
"Knowledge of the Company" or "Company's knowledge" means the
actual
knowledge of any of the individuals listed
in Section 1.01(k) of the Company
Disclosure Schedule, in each case without
specific investigation or inquiry by
such person; provided that, with respect to
any such Person that is an attorney,
such knowledge shall not be deemed to
include any information that is covered by
the attorney-client privilege.
"Knowledge of Nortel Networks" or "Nortel Networks' knowledge"
means
the actual knowledge of any of the
individuals listed in Section 1.01(k) of the
NNI Disclosure Schedule, in each case
without specific investigation or inquiry
by such person; provided that, with respect
to any such Person that is an
attorney, such knowledge shall not be
deemed to include any information that is
covered by the attorney-client
privilege.
"Liabilities" means any and all debts, liabilities and
obligations,
whether accrued or fixed, absolute or
contingent, matured or unmatured or
determined or undeterminable, including
those arising under any Applicable Law,
Action or Governmental Order and those
arising under any Contract.
"License" means any license, permit, certification, qualification
or
franchise issued by any Governmental
Authority.
"License Agreements" means the Intellectual Property License
Agreement,
the MWS License Agreement and the VoIP
License Agreement.
"Licensed Intellectual Property" means the Intellectual Property
Rights
licensed to the Company under the License
Agreements.
"Licensed IPLA IP" means the Intellectual Property Rights
licensed
under the Intellectual Property License
Agreement.
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"Lien" shall mean any mortgage, deed or trust, pledge,
hypothecation,
security interest, encumbrance, claim,
lien, lease or charge of any kind.
"Material Adverse Effect" means, with respect to the Nortel
Networks
Business or any Person, as applicable, any
effect that is, or would reasonably
be expected to be, material and adverse to
the business, results of operations
or the financial condition of the Nortel
Networks Business or such Person and
its Subsidiaries taken as a whole, as
applicable, but shall not include any
effect relating to (i) changes after the
date hereof in laws, regulations or
interpretations thereof by any applicable
Governmental Authorities that affect
in general the Nortel Networks Business or
the businesses in which such Person
and its Subsidiaries are engaged, as
applicable, (ii) this Agreement, the Parent
Agreement, the Ancillary Agreements and the
transactions, or any announcement of
the transactions, contemplated hereby and
thereby, (iii) actions or omissions of
a party to this Agreement taken with the
prior express written consent of the
other parties to this Agreement, and (iv)
changes in general economic
conditions, or the occurrence of other
events or developments affecting
generally the industries in which the
Nortel Networks Business is conducted or
such Person and its Subsidiaries conduct
their businesses, as applicable,
except, in the case of the foregoing
clauses (i) and (iv), to the extent that
such changes, events or developments have
an adverse effect on the financial
condition, business or results of
operations of the Nortel Networks Business or
such Person and its Subsidiaries taken as a
whole, as applicable, that is
materially greater than the adverse effect
on comparable entities.
"Members' Agreement" means the Members' Agreement to be executed by
the
parties thereto on the Closing Date,
substantially in the form of Exhibit C,
including all Exhibits thereto.
"Membership Interests" means the limited liability company
interests,
including any ownership interests
representing the right to vote or share in the
profits or losses, of the Company.
"Mexican Company Entity" means Volt Delta Resources of Mexico, S.
de
R.L. de C.V. , a company organized pursuant
to the laws of Mexico.
"Mexican Nortel Contributing Entity" means Nortel Networks de
Mexico
S.A. de C.V., a corporation organized
pursuant to the laws of Mexico.
"MWS License Agreement" means the Multimedia Work Station
Intellectual
Property License Agreement to be executed
by the parties thereto on the Closing
Date, substantially in the form of Exhibit
M.
"Network Identifiers" means all internet protocol addresses and
networks used in the Nortel Networks
Business, including, DNS domain names,
e-mail addresses, world wide web (www) and
http addresses, network names,
network addresses and services (such as
mail or website) whether or not used or
currently in service, and including,
without limitation, all registrations
relating thereto in or with all
registration bodies or organizations.
"NNI Disclosure Schedule" means the NNI Disclosure Schedule
delivered
by Nortel Networks to the Company on the
date hereof.
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<PAGE>
"Nortel Networks Business" means the supply of systems (hardware
and
software), as well as support, maintenance
and associated professional services,
for directory-and-operator-services
applications and platform operator
workstation-executable solutions from a
database via operator positions or
automation systems. For avoidance of doubt,
the Nortel Networks Business does
not include on-switch functions of a
Traffic Operator Position System switching
system, including, but not limited to,
automatic call distribution ("ACD")
functionality, call control, queuing, agent
and automation resource management,
signaling, protocols, and third-party
billing.
"Nortel Networks Contracts" means (i) the Third Party Licenses,
Equipment Leases, rights under sales and
purchase orders, and each of the other
Contracts and offers, bids, proposals and
quotes listed on Section 1.01(n) of
the NNI Disclosure Schedule, and (ii) any
non-competition agreement or any other
agreement or obligation that purports to
limit in any respect the manner in
which, or the localities in which, all or
any portion of the Nortel Networks
Business, has been or is currently being
conducted.
"Nortel Contributing Entities" means the Canadian Nortel
Contributing
Entities, the Mexican Nortel Contributing
Entity and the Other Nortel
Contributing Entities.
"Nortel Networks Lab Software License" means the Nortel Networks
Lab
Software License Schedule in the form of
Exhibit R.
"Other Business Software" means Software licensed to Nortel
Networks as
of the Closing Date, which Software is (i)
used exclusively in the Nortel
Networks Business as of the Closing Date,
(ii) listed or described in Section
1.01(o)(i) of the NNI Disclosure Schedule
and (iii) licensed under one or more
agreements, which, by their current terms,
permit Nortel Networks to assign a
portion of such Software to the purchaser
of the Nortel Networks Business, while
also permitting Nortel Networks to retain
the license to the balance of such
Software.
"Other Marks" means the Trademarks or other terms listed in
Section
1.01(o)(ii) of the NNI Disclosure
Schedule.
"Other Nortel Contributing Entities" means Nortel Networks
(Ireland)
Limited, a corporation organized pursuant
to the laws of Ireland, and Nortel
Networks (CALA) Inc., a Florida
corporation.
"Parent Agreement" means the Parent Agreement executed by VIS
and
Nortel Networks as of the date hereof.
"Patent Assignment" means the Assignment of Patents Agreement to
be
executed by the parties thereto on the
Closing Date, substantially in the form
of Exhibit Q.
"Patent Cross Licenses" means the reciprocal patent and patent
rights
cross licenses between Nortel Networks or
any of its Affiliates, on the one hand
and third Persons on the other hand.
"Permitted Encumbrance" means any restrictions, limitations or
conditions contained in (a) the Nortel
Networks Contracts or Contracts for any
Business Software or (b)
10
<PAGE>
non-exclusive licenses granted (i) under
Patent Cross Licenses or (ii) to third
Persons (other than to those Persons listed
in Section 1.01(p)(i) of the NNI
Disclosure Schedule, but subject to the
exceptions set forth on such Schedule)
in the ordinary course of business under
Transferred Intellectual Property that
do not materially restrict Nortel Networks
or the Nortel Contributing Entities
from using the Transferred Intellectual
Property; it being understood that, in
each case, such encumbrances are not
security interests.
"Permitted Liens" means the following Liens: (a) Liens for
Taxes,
assessments or other governmental charges
or levies not yet due or that are
being contested in good faith; (b)
statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics,
materialmen and other Liens imposed by Law,
in each case, for amounts not yet due; (c)
Liens incurred or deposits made in
the ordinary course of business in
connection with worker's compensation,
unemployment insurance or other types of
social security; (d) minor defects of
title, easements, rights-of-way,
restrictions and other similar charges or
encumbrances not interfering with the
ordinary conduct of the Nortel Networks
Business or the Company Business, as
applicable; and (e) Liens incurred in the
ordinary course of business securing
Liabilities that are not, individually or
in the aggregate, material.
"Person" means any natural person, general or limited
partnership,
corporation, limited liability company,
firm, association or other legal entity.
"Product Component" means a component of a Product sold by or on
behalf
of the Company, which component (a) was
manufactured by or on behalf of the
Company after the Closing Date, (b) is
identical in all material respects to a
component used within a Product sold or
distributed by Nortel Networks or a
Nortel Contributing Entity prior to the
Closing Date, and (c) is used within the
Product sold by or on behalf of the Company
in a manner identical in all
material respects to the manner in which
such component was used within the
Product by Nortel Networks or a Nortel
Contributing Entity prior to the Closing
Date.
"Products" means the products of the Nortel Networks Business
listed in
Section 1.01(p)(ii) of the NNI Disclosure
Schedule, including all versions,
releases and modules thereof reasonably
available at a Nortel Networks facility
or installed at any of the Nortel Networks
Business' customers' facilities.
"Real Estate License Agreements" means the Real Estate License
Agreements to be executed by the parties
thereto on the Closing Date,
substantially in the form of Exhibit S-1
and Exhibit S-2.
"Relationship Agreement" means the Relationship Agreement to be
executed by the parties thereto on the
Closing Date, substantially in the form
of Exhibit H.
"Retained Contracts" means all Contracts of Nortel Networks and
the
Nortel Contributing Entities that are not
included among the Nortel Networks
Contracts.
"Retained Liabilities" means all Liabilities of Nortel Networks and
the
Nortel Contributing Entities other than the
Assumed Liabilities, including:
11
<PAGE>
(a) all Liabilities arising or which by their terms are to be
observed,
paid, discharged or performed prior to the
Effective Time with respect to the
Nortel Networks Contracts;
(b) all Liabilities of Nortel Networks and its Affiliates under
this
Agreement, the Parent Agreement, the
Ancillary Agreements or the Retained
Contracts;
(c) except as otherwise set forth in Section 6.01(a) or (b),
Exhibit D
or the Employee Loan Agreement and where
Liabilities arise from the failure of
the Company or any of its Subsidiaries to
satisfy its obligations under Section
6.01(a) or (b), Exhibit D or the Employee
Loan Agreement, all Liabilities
relating to or arising from or in
connection with (i) the Nortel Networks
Benefit Plans or any other similar plans,
programs, arrangements or policies
that are maintained, contributed to or
required to be contributed to by Nortel
Networks or any other Person that, together
with Nortel Networks, is treated as
a single employer under Section 414(b), (c)
or (m) of the Code; (ii) Nortel
Networks or any Nortel Contributing
Entity's employment (including coverage
under the Nortel Networks Benefit Plans) of
the Transferring Employees that
arise or accrue prior to such Transferring
Employees' Employment Transfer Time;
and (iii) Nortel Networks or any Nortel
Contributing Entity's employment of any
Business Employee who does not become a
Transferring Employee pursuant to this
Agreement;
(d) Liabilities for, or related to any obligation for, any Tax
that
Nortel Networks or any Nortel Contributing
Entity bears under Article VII of
this Agreement;
(e) Liabilities of Nortel Networks, the Nortel Contributing
Entities
and their Affiliates relating to
indebtedness for borrowed money, accounts
payable, accrued liabilities and guarantees
by Nortel Networks or the Nortel
Contributing Entities and their Affiliates
of indebtedness for borrowed money;
(f) all Liabilities arising or resulting from any act,
circumstance,
event or omission that occurred prior to
the Effective Time with respect to the
Nortel Networks Business, including (i)
with respect to the ownership and
operation of the Assets and any Liabilities
arising under Environmental Law with
respect to any of the facilities utilized
for the conduct of the Nortel Networks
Business (excluding any increases in any
Liabilities arising under Environmental
Law resulting from any event occurring, or
circumstance arising, after the
Closing Date, including any change in
Applicable Law or the enforcement thereof,
or from any action or omission of any
Person other than Nortel Networks or its
Subsidiaries; and (ii) in respect of any
claims of customers of the Nortel
Networks Business or other third parties
against the Company, Nortel Networks or
the Nortel Contributing Entities, including
those resulting in an Action,
whether asserted prior to or after the
Effective Time, with respect to any
Product that was installed prior to the
Effective Time, and not modified by any
Person other than Nortel Networks and its
Subsidiaries (provided that such
limitation shall not apply if a
modification was made that did not in any way
form the basis for such claim), and whether
such Product was used or operated
prior to or after the Effective Time;
provided that any Liability resulting from
the misuse of any such Product or any act
or omission of any Person other than
Nortel Networks and its Subsidiaries on or
after the Effective Time relating to
such Product shall not be a Retained
Liability);
12
<PAGE>
(g) all Liabilities arising out of the operation or conduct by
Nortel
Networks or any of its Affiliates of any
business other than the Nortel Networks
Business;
(h) Liabilities (other than with respect to Taxes which shall
be
allocated pursuant to Article VII), if and
to the extent payable, arising prior
to the Effective Time in respect of
Permitted Liens and Permitted Encumbrances
on the Assets; and
(i) Liabilities to the extent relating to, or arising out of,
any
Excluded Asset, or to the extent arising
out of the distribution to, or
ownership by, Nortel Networks or any of its
Affiliates of the Excluded Assets or
the realization of the benefits of any
Excluded Asset.
"Services Agreement" means the Services Agreement to be executed by
VIS
and the Company on the Closing Date,
substantially in the form of Exhibit J.
"Shares Purchase
Agreements" means the Shares Purchase Agreement among
the Canadian Nortel Contributing Entities
and Nortel Networks and the Shares
Purchase Agreement between the Mexican
Nortel Contributing Entity and Nortel
Networks, in each case to be executed by
the parties thereto on the Closing
Date.
"Single Use Desktop Software" means Software licensed to Nortel
Networks as of the Closing Date that is (i)
licensed under a freely
transferable, shrink-wrap or click-wrap
license agreement for use on a single
computer that is installed on personal
computers forming part of the Transferred
Equipment, and (ii) listed or described in
Section 1.01(s) of the NNI Disclosure
Schedule.
"Subcontract Agreement" means the Subcontract Agreement to be
executed
by the parties thereto on the Closing Date,
substantially in the form of Exhibit
E.
"Subsidiary" of any Person means any corporation, partnership,
joint
venture, limited liability company, trust
or estate of which (or in which) more
than 50% of (a) the issued and outstanding
capital stock having ordinary voting
power to elect a majority of the board of
directors of such entity or (b) the
interest in the capital or profits of such
entity is at the time directly or
indirectly owned or controlled by such
Person, by such Person and one or more of
its other Subsidiaries or by one or more of
such Person's other Subsidiaries.
"Tax" or "Taxes" means any and all taxes, charges, fees,
levies,
imposts, duties or other assessments of any
kind whatsoever, imposed by or
payable to any federal, state, provincial,
local, or foreign Tax authority,
including, without limitation, any gross
income, net income, franchise, profits,
gross receipts, estimated, ad valorem,
value added, sales, use service, customs,
real or personal property, capital stock,
license, payroll, withholding,
employment, social security, workers'
compensation, unemployment compensation,
utility, severance, production, excise,
stamp, occupation, premium, windfall
profits, occupancy, transfer and gains
taxes, together with any interest and any
penalties or additions to tax.
"Tax Returns" means all returns, reports (including, without
limitation, elections, declarations,
disclosures, schedules, estimates and
information returns) and other information
required to be supplied to a Tax
authority relating to Taxes.
13
<PAGE>
"Third Party Licenses" means those licenses from third parties
for
Software contained in the Products that are
listed in Section 1.01(t)(i) of the
NNI Disclosure Schedule.
"Trademark Assignment" means the Assignments of Trademark to be
executed by the parties thereto on the
Closing Date, substantially in the form
of Exhibit P.
"Trademark License Agreement" means the Trademark License Agreement
to
be executed by the parties thereto on the
Closing Date, substantially in the
form of Exhibit O.
"Transfer Taxes" mean all goods and services, sales, use, land
transfer, gross receipt, documentary,
value-added, stamp duties and all other
similar taxes, duties, registration charges
or other like charges together with
any interest, penalties, additions to tax,
or additional amounts imposed with
respect thereto.
"Transferred Copyrights" means those registered and
unregistered
copyrights, and copyright registrations
included within Intellectual Property
Rights that are (i) owned by Nortel
Networks or the Nortel Contributing Entities
as of the Closing Date and (ii) used
exclusively in the Nortel Networks Business
as of the Closing Date in (x) the
Transferred Software and (y) any Software,
databases, documents or other materials
that are listed in Section 1.01(t)(ii)
of the NNI Disclosure Schedule.
"Transferred Equipment" means the furniture, fixtures, machinery
and
other tangible personal property listed in
Section 1.01(t)(iii) of the NNI
Disclosure Schedule.
"Transferred Intellectual Property" means (i) the Transferred
Trademarks; (ii) the Transferred
Copyrights; (iii) the Transferred Trade
Secrets; (iv) the Transferred Software; and
(v) the Transferred Patents.
"Transferred Patents" means the Patents included within
Intellectual
Property Rights that are (i) owned by
Nortel Networks or the Nortel Contributing
Entities as of the Closing Date and (ii)
listed in Section 1.01(t)(iv) of the
NNI Disclosure Schedule.
"Transferred Software" means all Intellectual Property Rights in
that
certain Software that is (i) owned by
Nortel Networks or the Nortel Contributing
Entities as of the Closing Date and (ii)
used exclusively in the design,
development, manufacture, maintenance,
operation and testing of the Products as
of the Closing Date, including the Software
listed in Section 1.01(t)(v) of the
NNI Disclosure Schedule.
"Transferred Trade Secrets" means all Trade Secrets included
within
Intellectual Property Rights that are (i)
owned by Nortel Networks or the Nortel
Contributing Entities as of the Closing
Date and (ii) used exclusively in the
design, development, manufacture,
maintenance, operation and testing of the
Products as of the Closing Date, including
any such Confidential Information and
Trade Secrets embodied in the Transferred
Software.
"Transferred Trademarks" means all registered Trademarks
included
within Intellectual Property Rights that
are (i) owned by Nortel Networks or the
Nortel Contributing Entities as of the
Closing Date, (ii) used exclusively in
the Nortel Networks Business as of the
14
<PAGE>
Closing Date and (iii) listed in Section
1.01(t)(vi) of the NNI Disclosure
Schedule, solely in the jurisdictions
listed in such Section.
"Transition Services Agreement" means the Transition Services
Agreement
to be executed by Nortel Networks and the
Company on the Closing Date,
substantially in the form of Exhibit K.
"VoIP License Agreement" means the Voice Over IP Interface and
IWS
License Agreement to be executed by the
parties thereto on the Closing Date,
substantially in the form of Exhibit N.
"VIS" means Volt Information Sciences, Inc., a New York
corporation.
Section 1.02. Other Defined Terms. The following terms have the
meanings defined for such terms in the
Sections set forth below:
TERM
SECTION
----
-------
ACD
1.01
Assigned Back IP
5.20
Canadian Shares
2.03(a)
Cash Adjustment
5.17
Closing
2.04
Closing Date
2.04
Company
Preamble
Company Commonly Controlled Entity
4.12(a)
Company Benefit Plans
4.12(a)
Company Entity Shares
2.03(b)
Company Financial Statements
4.05(a)
Company Indemnified Parties
10.02
Company Leased Real Property
4.11(a)
Company Owned Real Property
4.11(b)
Company Pension Plan
4.12(a)
Contribution Interests
2.03(d)
Copyrights
1.01
Disclosing Party
5.03(a)
Employment Transfer Time
Exhibit D
ERISA
3.10(a)
Exhibit D
6.01(a)
Financial Statements
3.04(a)
Holdings
4.04(a)
Indemnified Party
10.04(a)
Indemnifying Party
10.04(a)
Industrial Designs
1.01
Leave Employee
3.10(b)
Losses
10.01(a)
Mask Works
1.01
Mexican Shares
2.03(b)
Nortel Networks
Preamble
Nortel Networks Benefit Plans
3.10(a)
Nortel Indemnified Parties
10.01(a)
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<PAGE>
Nortel Networks Critical Employee
Exhibit D
Nortel Networks Key Employee
3.10(e)
Nuco
4.04(a)
Patents
1.01
Pension Plan
3.10(a)
Purchase Price
2.03(e)
Recipient Party
5.03(a)
Representative
5.03(a)
Software
1.01
Straddle Period
7.01(d)
Tangible Software
1.01
Termination Date
9.01(b)
Trademarks
1.01
Trade Secrets
1.01
Transferred Contracts
5.11(b)
Transferring Employees
Exhibit D
Working Capital
4.17
Section 1.03. Terms Generally. (a) Words in the singular shall
include
the plural and vice versa, and words of one
gender shall include the other
genders as the context requires, (b) the
term "hereof," "herein," and "herewith"
and words of similar import shall, unless
otherwise stated, be construed to
refer to this Agreement and not to any
particular provision of this Agreement,
and Article, Section, paragraph, Exhibit
and Schedule references are to the
Articles, Sections, paragraphs, Exhibits
and Schedules to this Agreement unless
otherwise specified and (c) the word
"including" and words of similar import
when used in this Agreement shall mean
"including, without limitation," unless
otherwise specified.
Article II
CONTRIBUTION
Section 2.01. Contribution. (a) On the terms and subject to the
conditions set forth in this Agreement, at
the Closing, Nortel Networks shall
cause the Canadian Nortel Contributing
Entities to sell, convey, assign,
transfer and deliver to the Canadian
Company Entity, and the Company shall cause
the Canadian Company Entity to purchase,
acquire and accept from the Canadian
Nortel Contributing Entities, all of the
Canadian Nortel Contributing Entities'
right, title and interest in and to the
Assets, free and clear of Liens other
than Permitted Liens and Liens created by
or through the Canadian Company
Entity; provided, however, that the
Canadian Company Entity is not acquiring any
interest in, under or to, and for all
purposes hereunder the term "Assets" shall
not be deemed to include, the Excluded
Assets.
(b) On the terms and subject to the conditions set forth in
this
Agreement, at the Closing, Nortel Networks
shall cause the Mexican Nortel
Contributing Entity to sell, convey,
assign, transfer and deliver to the Mexican
Company Entity, and the Company shall cause
the Mexican Company Entity to
purchase, acquire and accept from the
Mexican Nortel Contributing Entity, all of
the Mexican Nortel Contributing Entity's
right, title and interest in and to the
Assets, free and clear of Liens other than
Permitted Liens and Liens created by
or through the
16
<PAGE>
Mexican Company Entity; provided, however,
that the Mexican Company Entity is
not acquiring any interest in, under or to,
and for all purposes hereunder the
term "Assets" shall not be deemed to
include, the Excluded Assets.
(c) On the terms and subject to the conditions set forth in
this
Agreement, at the Closing immediately
following the transfers of Assets set
forth in Sections 2.01(a) and (b) and the
transfer of the Company Entity Shares
set forth in Section 2.03(c), Nortel
Networks shall, and shall cause the Other
Nortel Contributing Entities to, sell,
convey, assign, transfer and deliver to
the Company, and the Company shall, and the
Company shall purchase, acquire and
accept from Nortel Networks and the Other
Nortel Contributing Entities, all of
Nortel Networks' and the Other Nortel
Contributing Entities' right, title and
interest in and to the Assets and the
Company Entity Shares owned by Nortel
Networks, free and clear of Liens other
than Permitted Liens and Liens created
by or through the Company; provided,
however, that the Company is not acquiring
any interest in, under or to, and for all
purposes hereunder the term "Assets"
shall not be deemed to include, the
Excluded Assets.
Section 2.02. Assumption and Exclusion of Liabilities. (a) On the
terms
and subject to the conditions set forth in
this Agreement, at the Closing, the
Company shall, and the Company shall cause
each of the Company Entities to,
assume, and shall become obligated to pay,
perform and discharge when due, all
of the Assumed Liabilities.
(b) Nortel Networks and the Nortel Contributing Entities shall
retain,
and shall be responsible for paying,
performing and discharging when due, and
the Company shall not assume or have any
responsibility for, the Retained
Liabilities.
Section 2.03. Issuance of Shares and Membership Interests. (a) At
the
Closing concurrently with the transfer of
Assets set forth in Section 2.01(a),
the Company shall cause the Canadian
Company Entity to issue to the Canadian
Nortel Contributing Entities, and the
Canadian Nortel Contributing Entities
shall receive on their own behalf, 99,999
shares of common stock, without par
value, of the Canadian Company Entity (the
"Canadian Shares") in exchange for
the contribution of the Assets.
(b) At the Closing concurrently with the transfer of Assets set
forth
in Section 2.01(b), the Company shall cause
the Mexican Company Entity to issue
to the Mexican Nortel Contributing Entity,
and the Mexican Nortel Contributing
Entity shall receive on its own behalf, 99%
of the outstanding equity of the
Mexican Company Entity (the "Mexican
Shares" and together with the Canadian
Shares, the "Company Entity Shares") in
exchange for the contribution of the
Assets.
(c) Pursuant to the terms and conditions of the Shares Purchase
Agreements, at the Closing immediately
following the issuances of Company Entity
Shares set forth in Sections 2.03(a) and
(b) the Canadian Nortel Contributing
Entities and the Mexican Contributing
Entity shall transfer the Canadian Shares
and the Mexican Shares, respectively, to
Nortel Networks in exchange for the
cash consideration set forth in the Shares
Purchase Agreements.
(d) At the Closing immediately following the transfers set forth
in
Sections 2.01(a) and (b) and Section
2.03(c), the Company shall issue to Nortel
Networks, and
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<PAGE>
Nortel Networks shall receive on its own
behalf and on behalf of the Other
Nortel Contributing Entities, a number of
Membership Interests (the
"Contribution Interests") representing
twenty four percent (24%) of all
Membership Interests, on a fully-diluted
basis, outstanding immediately
following the Closing in exchange for the
contribution of the Assets and the
Company Entity Shares.
(e) The value of the Contribution Interests plus the amount of
Assumed
Liabilities to the extent accrued for Tax
purposes as of the Closing Date (the
"Purchase Price") shall be allocated among
the Assets and the Intellectual
Property Rights licensed under the
Intellectual Property License Agreement and
the MWS License Agreement in the statutory
jurisdictions in which the Assets or
such Intellectual Property Rights, as
applicable, reside as of the Closing Date
in accordance with Section 2.03(e) of the
NNI Disclosure Schedule. The gross
fair market value of the assets of the
Company shall be allocated among such
assets as of the Closing Date in accordance
with Section 2.03(e) of the Company
Disclosure Schedule. Such allocations shall
be based upon a valuation for the
Company's assets (post-transaction) as
determined by one or more mutually agreed
upon Persons. If the parties can reach
agreement on one Person, then the payment
of the expenses incurred for such valuation
shall be shared equally by the
parties. Otherwise, the parties shall each
pay the expenses incurred for such
valuation by the Person retained by that
party. The Company and Nortel Networks
shall each use their reasonable best
efforts to cause such Person(s) to complete
such valuation by August 23, 2004, and the
Company and Nortel Networks shall use
their reasonable best efforts to agree on
such allocations promptly thereafter.
The Company and Nortel Networks shall each
(and Nortel Networks shall cause each
Nortel Contributing Entity to, and the
Company shall cause each Company Entity
to) report the federal, state, provincial
and local income and other tax
consequences of the transactions
contemplated by this Agreement in a manner
consistent with such allocation. Except as
otherwise required by law, neither
the Company nor Nortel Networks shall (and
Nortel Networks shall cause its
Affiliates not to, and the Company shall
cause its Affiliates not to) take a
position inconsistent with such allocations
on any Tax Return, before any
governmental agency charged with the
collection of any income tax or in any
proceeding relating thereto. Each of Nortel
Networks and the Company shall
cooperate with the other in preparing
relevant IRS forms and any equivalent
statements for filing consistent with such
allocations within a reasonable
period before their filing due dates.
Section 2.04. Closing. Subject to the terms and conditions of
this
Agreement, the transactions contemplated by
this Article II shall take place at
a closing (the "Closing") to be held at
10:00 a.m., New York City time, on
August 2, 2004, or if the conditions to the
obligations of the parties set forth
in Article VIII have not been satisfied by
such date, as soon as practicable
after such conditions shall have been
satisfied, at the offices of Cleary,
Gottlieb, Steen & Hamilton located at
One Liberty Plaza, New York, NY 10006, or
at such other time or on such other date or
at such other place as Nortel
Networks and the Company may mutually agree
upon in writing (the day on which
the Closing takes place being the "Closing
Date").
Section 2.05. Closing Deliveries by Nortel Networks. At the
Closing,
Nortel Networks shall deliver or cause to
be delivered to the Company:
(a) an executed counterpart of each of the Ancillary Agreements
to
which it or any Nortel Contributing Entity
is a party;
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(b) certificates representing the Company Entity Shares, duly
endorsed
in blank or with duly executed stock powers
attached in proper form for transfer
in accordance with Section 2.01(c); and
(c) any documents required pursuant to Section 5.08 or Section
5.11.
Section 2.06. Closing Deliveries by the Company. (a) At the
Closing,
the Company shall deliver or cause to be
delivered to Nortel Networks:
(i) certificates representing the Membership Interests in
accordance
with
Section 2.03(d);
(ii) an executed counterpart of each of the Ancillary Agreements
to
which it,
VIS or any Company Entity is a party;
(iii) A statement in the form described in Treasury Regulations
section
1.1445-11T(d)(2), signed under penalties of perjury by a duly
authorized
officer of VIS, certifying that fifty percent (50%) or more of
the gross
assets of the Company do not consist of U.S. real property
interests,
or that ninety percent (90%) of the value of the gross assets
of the
Company do not consist of U.S. real property interests plus cash
or
cash
equivalents; and
(iv) any documents required pursuant to Section 5.08.
(b) At the Closing, the Company shall cause to be delivered to
the
Canadian Nortel Contributing Entities and
the Mexican Nortel Contributing Entity
certificates representing the Company
Entity Shares, duly endorsed in blank or
with duly executed stock powers attached in
proper form for transfer in
accordance with Sections 2.03(a) and
(b).
Section 2.07. Accounting. To the extent that after the Closing (a)
the
Company receives any payment that is for
the account of Nortel Networks
according to the terms of this Agreement,
the Company shall promptly deliver
such amount to Nortel Networks, and (b)
Nortel Networks receives any payment
that is for the account of the Company
according to the terms of this Agreement,
Nortel Networks shall promptly deliver such
amount to the Company.
Article III
REPRESENTATIONS AND WARRANTIES OF NORTEL NETWORKS
Except as otherwise set forth in the NNI Disclosure Schedule and
except
for matters relating to Excluded Assets or
Retained Liabilities, Nortel Networks
represents and warrants to the Company as
follows:
Section 3.01. Incorporation and Authority of Nortel Networks and
the
Nortel Contributing Entities. Each of
Nortel Networks and the Nortel
Contributing Entities is a corporation duly
formed, validly existing and in good
standing under the laws of its jurisdiction
of incorporation and has all
necessary corporate power and authority to
own, lease and operate its
properties, to carry on its business as it
is now being conducted, to enter into
this Agreement,
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the Parent Agreement and the Ancillary
Agreements to which it is or will be a
signatory, to carry out its respective
obligations hereunder and thereunder and
to consummate the transactions contemplated
hereby and thereby. Nortel Networks
and each of the Nortel Contributing
Entities is duly qualified or licensed to do
business as a foreign corporation and is in
good standing under the laws of each
state or other jurisdiction in which the
nature of either the ownership or use
of the Assets or the conduct of the Nortel
Networks Business requires such
qualification. The execution, delivery and
performance by each of Nortel
Networks and the Nortel Contributing
Entities of this Agreement, the Parent
Agreement and each Ancillary Agreement to
which it is or will be a signatory
have been duly authorized by all requisite
corporate action on the part of
Nortel Networks or such Nortel Contributing
Entity, as the case may be. This
Agreement is, and upon execution the Parent
Agreement and each Ancillary
Agreement to which it is or will be a
signatory will be, duly executed and
delivered by Nortel Networks or the Nortel
Contributing Entities, and (assuming
due authorization, execution and delivery
by VIS, the Company or the Company
Entities that are signatories thereto) this
Agreement constitutes, and upon
execution the Parent Agreement and the
Ancillary Agreements to which it is a
signatory will constitute, legal, valid and
binding obligations of Nortel
Networks or the Nortel Contributing
Entities that are signatories thereto,
enforceable against Nortel Networks or such
Nortel Contributing Entities in
accordance with their terms, except as such
enforcement may be limited by
applicable anti-trust, bankruptcy,
insolvency, reorganization and similar laws
affecting generally the enforcement of the
rights of contracting parties and
subject to a court's discretionary
authority with respect to the granting of a
decree ordering specific performance or
other equitable remedies, and further
subject to the Currency Act (Canada)
precluding a court in Canada from awarding
a judgment for an amount expressed in a
currency other than Canadian dollars.
Section 3.02. No Conflict. The execution, delivery and performance
of
this Agreement by Nortel Networks and the
execution, delivery and performance of
the Parent Agreement and the Ancillary
Agreements by Nortel Networks and/or the
Nortel Contributing Entities that are a
party thereto and the consummation by
Nortel Networks and the Nortel Contributing
Entities of the transactions
contemplated hereby and thereby, do not and
will not: (a) violate or conflict
with the articles, other constituent
documents or By-laws of Nortel Networks or
any Nortel Contributing Entity; (b)
conflict with or violate any Applicable Law
or Governmental Order applicable to Nortel
Networks or any Nortel Contributing
Entity (assuming the satisfaction of the
condition in Section 8.01(b)); (c)
result in any material breach of, or
constitute a material default (or event
which with the giving of notice or lapse of
time, or both, would become a
default) under, or give to any Person any
material rights of termination,
purchase, amendment, acceleration or
cancellation of any material Contract to
which Nortel Networks or any Nortel
Contributing Entity is a party; or (d)
result in the imposition or creation of any
Lien (other than a Permitted Lien)
upon any of the Assets.
Section 3.03. Consents and Approvals. The execution and delivery
of
this Agreement by Nortel Networks and the
execution and delivery of the Parent
Agreement and the Ancillary Agreements by
Nortel Networks and/or the Nortel
Contributing Entities that are a party
thereto, do not, and the performance of
this Agreement by Nortel Networks, the
performance of the Parent Agreement and
the Ancillary Agreements by Nortel Networks
and/or the Nortel Contributing
Entities that are a party thereto and the
consummation by Nortel Networks and
the Nortel Contributing Entities of the
transactions contemplated hereby and
20
<PAGE>
thereby will not, require any consent,
approval, authorization or other action
by, or filing with or notification to, any
Governmental Authority.
Section 3.04. Financial Information; No Undisclosed Liabilities.
(a)
Section 3.04 of the NNI Disclosure Schedule
sets forth the unaudited management
statements of the Nortel Networks Business,
including a statement of assets and
liabilities as of December 31, 2003, and as
of March 31, 2004 and a statement of
operations and a statement of cash flows,
each for the year ended December 31,
2003 and for the three-month period ended
March 31, 2004 (collectively, the
"Financial Statements"). Except as shown or
provided for in the Financial
Statements or as otherwise described in
Section 3.04 of the NNI Disclosure
Schedule, such Financial Statements (i)
have been prepared in accordance with
the accounting principles and books and
records of Nortel Networks; (ii) are
prepared in accordance with U.S. GAAP
applied consistently with past practice;
and (iii) present fairly, in all material
respects, the financial position or
results of operations, as the case may be,
for the Nortel Networks Business as
of the date or for the period
indicated.
(b) The Nortel Networks Business has no material Liabilities that
have
not been expressly disclosed or otherwise
expressly described in any Section of
the NNI Disclosure Schedule.
Section 3.05. Absence of Material Adverse Effect. Since December
31,
2003 to the date of this Agreement, except
(i) for transfers of assets that
would not constitute the Assets if they had
not been transferred or (ii) to the
extent relating to actions taken pursuant
to the transactions contemplated by
this Agreement, (a) there has not been any
Material Adverse Effect on the Nortel
Networks Business; (b) the Nortel Networks
Business has been conducted in the
ordinary course and consistent with past
practice; and (c) except in the
ordinary course of business, there has not
been any sale, assignment, transfer
or other disposition of or license of any
tangible or intangible assets used
exclusively in the design, development,
manufacture, maintenance, operation and
testing of the Products.
Section 3.06. Absence of Litigation. (a) There are no Actions
pending
or, to the Knowledge of Nortel Networks,
threatened, against the Nortel Networks
Business or any of the Assets or that
challenge or may have the effect of
preventing, denying, making illegal or
otherwise interfering with the
transactions contemplated hereby. There are
no Tax Actions pending that if
successful would result in a Lien on the
Assets, other than Permitted Liens.
(b) Neither Nortel Networks nor any Nortel Contributing Entity
has
received any written notice during the two
(2) years prior to the date hereof of
material Actions seeking to restrict or
limit the work of, or disclosure of
information by, current or former employees
of Nortel Networks or the Nortel
Contributing Entities with respect to the
Transferred Intellectual Property or
Licensed IPLA IP.
Section 3.07. Compliance with Laws. Neither Nortel Networks nor
any
Nortel Contributing Entity has received any
written notice that it is, and to
the Knowledge of Nortel Networks neither
Nortel Networks nor any Nortel
Contributing Entity is, in material
violation of any Applicable Law or
Governmental Order applicable to the Nortel
Networks Business or any Asset.
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<PAGE>
Section 3.08. Governmental Licenses. Neither Nortel Networks nor
any
Nortel Contributing Entity has received any
written notice that it fails to hold
any, and to the Knowledge of Nortel
Networks, each of Nortel Networks and the
Nortel Contributing Entities holds all,
material Licenses necessary for the
operation of the Nortel Networks Business
as currently operated, and to the
Knowledge of Nortel Networks, each of
Nortel Networks and the Nortel
Contributing Entities is in compliance with
the terms of such material Licenses.
Section 3.09. The Assets. (a) Except for the Excluded Assets
and
subject to Section 5.07, the Assets
collectively include all of the assets,
properties and rights that are primarily
used by Nortel Networks and the Nortel
Contributing Entities in the conduct of the
Nortel Networks Business as it is
currently conducted.
(b) Nortel Networks and the Nortel Contributing Entities, in
the
aggregate, hold good title to or have valid
leasehold interests in all of the
Assets free and clear of any and all Liens,
except (i) Permitted Liens and (ii)
Liens created by or through the
Company.
(c) Notwithstanding anything to the contrary herein, no
representation
or warranty is made under this Section 3.09
with respect to the Transferred
Intellectual Property, the representations
and warranties with respect to which
are set forth in Section 3.14.
Section 3.10. Employee Benefit Matters. (a) Section 3.10(a) of the
NNI
Disclosure Schedule contains an accurate
and complete list of all pension plans
(including each "employee pension benefit
plan" (as defined in Section 3(2) of
the United States Employee Retirement
Income Security Act of 1974, as amended
("ERISA") (a "Pension Plan")), supplemental
pension plans, profit sharing plans,
savings plans, retirement savings plans,
bonus plans, incentive compensation
plans, deferred compensation plans, stock
purchase plans, stock option or other
equity based plans, phantom stock plans,
vacation plans, leave of absence plans,
employee assistance plans, automobile
leasing/subsidy/allowance plans,
redundancy or severance plans, relocation
plans, family support plans,
retirement plans, medical, health,
hospitalization or life insurance plans,
including retiree health and life plans,
disability plans, sick leave plans,
retention plans, compensation arrangements,
including any base salary
arrangements, overtime, on-call or call-in
policies, death benefit plans,
Employment Agreements with Mexico Employees
and Nortel Networks Key Employees,
employee benefit plans (including each
"employee welfare benefit plan (as
defined in Section 3(1) of ERISA)) and any
other similar plans, programs,
arrangements or policies that are
maintained, contributed to or required to be
contributed to by Nortel Networks or any of
Nortel Networks' Affiliates with
respect to Business Employees
(collectively, the "Nortel Networks Benefit
Plans"), which are material. Nortel
Networks has made available to Company a
true and complete copy of the plan document
or summary plan description of each
of the Nortel Networks Benefit Plans, which
are material (including, for the
avoidance of doubt, any Employment
Agreements with Mexico Employees and Nortel
Networks Key Employees), or if such plan
document or summary plan description
does not exist, an accurate, written
summary of such material Nortel Networks
Benefit Plans. As of the date hereof, there
is no plan or commitment, whether
legally binding or not, to create any
additional material Nortel Networks
Benefit Plan or materially modify, change
or terminate any existing material
Nortel Networks Benefit Plan. Other than
claims by Business Employees for
benefits received in the ordinary course
under Nortel Networks Benefit Plans,
there are no material Actions by or on
behalf of Business Employees pending
against Nortel
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<PAGE>
Networks or any Nortel Contributing Entity
with respect to the Nortel Networks
Benefit Plans and, to the Knowledge of
Nortel Networks, no such Actions have
been threatened.
(b) Section 3.10(b) of the NNI Disclosure Schedule sets forth
with
respect to each Business Employee: (i)
name, (ii) home address, (iii) continuous
service date, (iv) position, (v) annual
base salary, (vi) vacation accrual rate,
(vii) accrued unused vacation days and the
base salary equivalent for such
vacation days, (viii) work location,
including street address, city, state or
province and country, (ix) target incentive
compensation, (x) other regular
compensation or allowances, (xi) language
preference with respect to Canadian
Employees, (xii) Capital Accumulation and
Retirement Plan (CARP) participation
for Canadian Employees, (xiii)
telecommuting status and (xiv) visa status. In
addition, if any Business Employee is on
leave approved by Nortel Networks or
recognized under Applicable Law, including
parental or pregnancy leave, military
leave, or leave related to receipt of
short-term or long-term disability
benefits or workers' compensation benefits
(a "Leave Employee"), Section 3.10(b)
of the NNI Disclosure Schedule will so
indicate, along with the type of leave
and the expected date of return to work, if
available.
(c) Except for any obligations under the Nortel Networks Benefit
Plans
listed on Section 3.10(a) of the NNI
Disclosure Schedule, neither Nortel
Networks nor any of the Nortel Contributing
Entities has any obligation to
provide health, life insurance or death
benefits with respect to Business
Employees beyond their termination of
employment or service, other than as
required under Section 4980B of the Code or
other Applicable Law.
(d) Neither the execution and delivery of this Agreement nor
the
consummation of the transactions
contemplated hereby, whether alone or in
combination with another event (whether
contingent or otherwise) will (i)
entitle any Business Employee to any
payment; (ii) increase the amount of
compensation due to any Business Employee;
or (iii) accelerate the vesting or
funding of any compensation, stock
incentive or other benefit of any Business
Employee, in each case other than any
entitlements, increases or acceleration
pursuant to Applicable Law or the Nortel
Networks Benefit Plans listed on
Section 3.10(a) of the NNI Disclosure
Schedule.
(e) Except as set forth on Section 3.10(e) of the NNI
Disclosure
Schedule, neither Nortel Networks nor the
Nortel Contributing Entities have
received any written notice from any
Business Employee listed on Section 3.10(e)
of the NNI Disclosure Schedule ("Nortel
Networks Key Employee") or any Nortel
Networks Critical Employees stating such
employee's current or future intention
to resign from or terminate his or her
employment with Nortel Networks or a
Nortel Contributing Entity, as
applicable.
(f) Neither Nortel Networks nor any of the Nortel Contributing
Entities
is a party to any collective bargaining
agreement with any labor union or
representative applicable to (i) Business
Employees or (ii) employees of Nortel
Networks or the Nortel Contributing
Entities who perform services used by the
Nortel Networks Business which restrict
Nortel Networks or the Nortel
Contributing Entities from relocating or
closing the Nortel Networks Business.
There are not currently pending and, during
the past two (2) years, there have
not been any questions concerning
representation or certification proceedings or
petitions seeking a representation or
certification proceeding or determination
before any Governmental Authority or, to
the
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Knowledge of Nortel Networks, threatened to
be brought or filed before any
Governmental Authority involving the
Business Employees. To the Knowledge of
Nortel Networks, there is not any campaign
currently being conducted to solicit
cards or authorizations from Business
Employees to be represented by any labor
organization. There are not currently and,
during the past two (2) years, there
have not been any strikes, picketing,
slowdowns, lockouts or work stoppages
involving the Business Employees and, to
the Knowledge of Nortel Networks, no
such actions are threatened.
(g) There are no (i) material grievances or (ii) Actions or
Governmental Orders related to the
employment of the Business Employees pending
against Nortel Networks or any of the
Nortel Contributing Entities or, to the
Knowledge of Nortel Networks, threatened.
Nortel Networks and each of the Nortel
Contributing Entities is, to the Knowledge
of Nortel Networks, in compliance in
all material respects with Applicable Laws
and Governmental Orders with respect
to the employment of the Business
Employees; provided that, for the avoidance of
doubt, no representation or warranty is
made under this Section 3.10(g) with
respect to the Nortel Networks Benefit
Plans, the sole representations and
warranties with respect to which are made
in Section 3.10(a).
(h) Nortel Networks represents that evading liability within
the
meaning of Section 4069(a) of ERISA is not
a principal purpose for Nortel
Networks' entering into the transactions
contemplated by this Agreement.
Section 3.11. Environmental Matters. (a) Neither Nortel Networks
nor
any Nortel Contributing Entity has received
any written notice that it is not,
and to the Knowledge of Nortel Networks
each of Nortel Ne
