EXHIBIT 2.1
Date: January 2005
Dear _____________:
This letter confirms your and our mutual intentions with respect to the
potential transaction described herein between RADVISION Ltd. or one of its
subsidiaries or affiliates ("Buyer") and First Virtual Communications Inc. on
behalf of itself and its subsidiaries and affiliates ("Seller").
1. PRICES AND TERMS. The principal terms of the transaction ("Transaction")
would be as follows, except as agreed by the parties:
(a) BUSINESS TO BE ACQUIRED; LIABILITIES TO BE ASSUMED. We would acquire
substantially all of the assets, tangible and intangible, owned by Seller that
are used in, or necessary for the conduct of, its integrated rich media
communication solutions to the enterprise, service provider and public sector
markets, including, without limitation: (i) all hardware and software, subject
to any obligations contained in disclosed license agreements and all related
intellectual property (including but not limited to patents, trademarks,
copyrights, trade secrets, etc.); (ii) the fixed assets of Seller; (iii) any and
all customer lists; and (iv) the goodwill associated therewith, all free and
clear of any claims, security interests, liens, mortgages or other encumbrances.
Excluded assets are to be identified by Buyer on or before Bankruptcy Court
approval of the Procedure Order (defined below).
(b) CONSIDERATION. The aggregate consideration for the assets and business to be
purchased would be a sum in cash of $5 million; provided, however, that the
final sum would be finally negotiated on or before Bankruptcy Court approval of
the Procedure Order; provided further, however, that the aggregate purchase
price will be no less than $5 million in cash, subject to adjustments for any
liabilities or contingent liabilities and contracts to be assumed by Buyer (such
as prepaid maintenance contracts, etc.) ("Designated Contracts"). Assumed
liabilities and contracts are to be identified by Buyer on or before Bankruptcy
Court approval of the Procedure Order. Within five days from the execution of
this letter of intent, Buyer will deposit in escrow, with an escrow agent
mutually acceptable to Seller and Buyer, the sum of $1 million (the "Deposit")
to be held in trust pursuant to the terms of this letter of intent. The Deposit
will be (i) returned to Buyer if this letter of intent is terminated on or
before the Termination Date (as defined below); (ii) returned to the Buyer if
the Purchase Agreement is not executed on or before the Termination Date; or
(iii) otherwise held pursuant to the terms of the Purchase Agreement pending
closing. If for whatever reason, other than Buyer's material breach of the terms
of the Purchase Agreement, the transaction does not close, the Deposit shall be
returned to the Buyer.
(c) ACCESS TO INFORMATION AND DUE DILIGENCE REVIEW. Promptly following the
execution of this letter of intent, you will allow us to complete our
examination of your financial, accounting and business records and the contracts
and other legal documents, contact creditors, employees, distributors, suppliers
and customers. Any information obtained by us as a result thereof will be
maintained by us in confidence subject to the terms of the Mutual
Confidentiality Agreement executed by the parties and dated October 15, 2004
(the "Confidentiality Agreement"). The parties will cooperate to provide access
to information expeditiously and complete due diligence. In addition, for a
period of three months from the date hereof, Buyer shall not, and Buyer shall
cause each of its subsidiaries and affiliates not to, directly or indirectly,
actively solicit for employment any individual while employed by Seller;
provided, however, general advertisements and other forms of general
solicitations for employment shall not be
deemed a violation of this provision, provided that if Seller elects not to
proceed with the transaction, this sentence shall not apply.
(d) CONDUCT IN ORDINARY COURSE. In addition to the conditions discussed herein
and any others to be contained in a definitive written asset purchase agreement
(the "Purchase Agreement"), and subject to the fiduciary duties of you and your
management and the requirements of the Bankruptcy Code, consummation of the
acquisition would be subject to having conducted your business during the period
between the date hereof and the date of closing in the ordinary course, other
than as shown or reflected in the information made available to us on or before
the date hereof, including, but not limited to, any current business and
operational plans prepared by management, and taking into account the
commencement of chapter 11 cases and the consequences that would normally result
therefrom (excluding the appointment by the Bankruptcy Court of a trustee or an
examiner with expanded powers).
(e) DEFINITIVE PURCHASE AGREEMENT. All of the terms and conditions of the
proposed transaction would be stated in the Purchase Agreement, to be
negotiated, agreed and executed by you and us in good faith. If the parties have
not executed the Purchase Agreement within eighteen calendar days of the date
hereof ("Termination Date"), either party may terminate this letter of intent.
(f) TIMING.
(1) We and you will use all reasonable efforts to complete and execute the
Purchase Agreement promptly after the successful completion of due diligence
(but drafting shall start as soon as possible), subject to the right to
terminate in accordance with subsection (e) above. Due diligence will be deemed
to be satisfactorily completed if and only if (x) Buyer delivers written notice
of same to Seller or (y) upon the expiration of fourteen days following the
expiration of this letter of intent. Seller and Buyers recognize that this
transaction is subject to the approval of both Boards of Directors for the
Purchase Agreement. Whenever Board approval is required both parties shall work
expeditiously to obtain Board approval. Both parties recognize that either
party's Board can decide not to proceed with the transaction without having to
provide justification.
(3) Buyer must close the Transaction within 5 days after entry of the Approval
Order (defined below), subject to the terms of this letter of intent and the
Purchase Agreement.
(g) FORM OF TRANSACTION. You and we have discussed that the parties wish to
conduct the sale contemplated hereby in the most expeditious manner, while
protecting Buyer from possible claims of Seller and creditors. Therefore Seller
and Buyer agree if it is determined to further the aforementioned interests, the
sale contemplated hereby will be conducted pursuant to Xxxxxxx 000 xx xxx Xxxxxx
Xxxxxx Bankruptcy Code.
(h) CONDITIONS TO CLOSING. The obligations of Buyer to close the Transaction
would be subject to the satisfactory completion of due diligence by Buyer prior
to execution of the Purchase Agreement, each company's Board's approval as
stated aforesaid, the negotiation and execution of the Agreement, Bankruptcy
Court approval of the Transaction and the satisfaction of these additional
following conditions precedent to be contained in the Purchase Agreement:
(1) Commencement of the bankruptcy case (the "Case") by Seller no later than the
week of January 17, 2005.
(2) Entry of an order of the Bankruptcy Court approving solicitation and bidding
procedures for the sale of the Assets (the "Procedure Order") within three weeks
after the date of the commencement of the Case, including bidding protections
and a breakup fee payable to Buyer, all subject to the requirements of the
Bankruptcy Court. You will make good-faith efforts to cause the Procedure Order
to include, but not be limited to: (i) a minimum bid of Buyer purchase price
plus $500,000 (an "Overbid"); (ii) a break-up fee of 3% payable to Buyer if a
bidder other than Buyer is the successful bidder; (iii) a requirement that any
bidder other than Purchaser execute an asset purchase agreement similar to the
Agreement; (iv) submission of a minimum deposit of 20% and evidence of the
ability, financial and otherwise, of the bidder to close a transaction for the
purchase of the Assets without delay, no later than five calendar days before
the hearing on the motion to approve the sale of the Assets; and (v) minimum
incremental bids above the Overbid of at least $100,000 (the "Requested Bidding
Procedures"). Buyer must timely provide to Seller, or to the Bankruptcy Court
upon Seller's request, any information necessary or prudent to obtain Bankruptcy
Court approval of the Procedure Order, so long as that information is otherwise
unavailable to Seller for submission to the Bankruptcy Court. The modification
of any of the Requested Bidding Procedures to satisfy the requirements of the
Bankruptcy Court shall not constitute a failure of this condition if Seller has
acted in good faith to obtain Bankruptcy Court approval, but any material change
shall allow the Buyer to withdraw without liability from this Transaction,
unless the material change was caused by an act or omission of Buyer or by
Buyer's failure to timely provide information as required by this paragraph.
(3) The filing of an appropriate motion no later than one business day after the
Termination Date, seeking a hearing no later than 21 days after the filing of
the motion, and entry of an order of the Bankruptcy Court (the "Approval Order")
approving the Transaction, the sale of the Assets, and the assumption and
assignment of the Designated Contracts to Buyer upon the terms and conditions
set forth in the Agreement and otherwise in form and content satisfactory to
Buyer. The Approval Order would, among other things, provide Buyer with all
rights and protections of a good-faith purchaser pursuant to Section 363(m) of
the Bankruptcy Code and would otherwise be in all aspects in form and substance
satisfactory to Buyer. Buyer must timely provide to Seller, or to the Bankruptcy
Court upon Seller's request, any information necessary or required to obtain
Bankruptcy Court entry of the Approval Order, so long as that information
remains subject to the Confidentiality Agreement between the parties.
Notwithstanding the foregoing sentence, Buyer agrees that Buyer shall reasonably
cooperate with Seller to present such information as is necessary in connection
with the Bankruptcy Court's consideration or approval of the Approval Order, and
Seller agrees that Seller shall reasonably cooperate with Buyer to avoid the
unnecessary disclosure of any of Buyer's confidential proprietary information.
(4) Seller would at all times continue to operate the Business as a debtor in
possession in the Case and no trustee would be appointed for Seller in the Case.
2. EXPENSES. You and we will pay our respective expenses incident to this letter
of intent, the Purchase Agreement and the transactions contemplated hereby and
thereby.
3. PUBLIC ANNOUNCEMENTS. Neither you nor we will make any announcement of the
proposed transaction contemplated by this letter of intent prior to the
execution of the Purchase Agreement without the prior written approval of the
other, which approval will not be unreasonably withheld or delayed. The
foregoing shall not restrict in any respect your or our ability to communicate
information concerning this letter of intent and the transactions contemplated
hereby to your and our, and your and our respective affiliates, officers,
directors, employees, and professional advisers, and, to the extent relevant, to
third parties whose consent is
required in connection with the transaction contemplated by this letter of
intent. Notwithstanding anything to the contrary in this paragraph, Seller and
Buyer shall be permitted to take whatever actions are required to comply with
its respective obligations (the "Disclosure Obligations") under applicable
securities laws and applicable stock exchange rules. If either party is required
to make an announcement to comply with its Disclosure Obligations, the
disclosing party will make good-faith efforts to give the other party an
opportunity to review and comment on any such announcement.
4. BROKER'S FEES. You and we have represented to each other that no brokers or
finders have been employed who would be entitled to a fee by reason of the
transaction contemplated by this letter of intent.
5. EXCLUSIVE NEGOTIATING RIGHTS. In order to induce us to commit the resources,
forego other potential opportunities, and incur the legal, accounting and
incidental expenses necessary properly to acquire the assets and business
described above, and to negotiate the terms of the Purchase Agreement and to
consummate the transaction, you agree that from the date hereof through the
earliest of the Termination Date and the signing of the Purchase Agreement (the
"Exclusivity Period"), you, your affiliates and your and their respective
officers, directors, employees and agents shall not directly or indirectly, (a)
initiate or solicit the submissions, proposals or other offers relating to, (b)
respond to any submissions, proposals or other offers relating to, or (c) engage
in any negotiations or discussions with any persons in relation to any
acquisition, recapitalization, liquidation, dissolution, disposition or similar
transaction involving all or any portion of Seller, or any business, securities
or assets that collectively comprise Seller, without first obtaining the written
approval of Buyer. Furthermore Seller shall not (other than in the ordinary
course of business as heretofore conducted) provide any confidential information
regarding Seller's assets or business to any person other than us and our
representatives. Seller shall immediately provide written notification to Buyer
of any submissions, proposals, offers or inquiries made during the Exclusivity
Period. In the event of Seller's breach or that of its representatives, of the
terms of this provision, Seller shall be liable to the undersigned for its
actual and consequential damages (but excluding punitive and special damages)
and all out of pocket expenses (including outside attorneys' fees) incurred in
connection with the evaluation of the transaction herein. Seller acknowledges
and agrees that the breach of this provision would cause irreparable damage to
the Buyer and that the Buyer may not have an adequate remedy at law. Therefore
the obligations of the Seller pursuant to this provision shall be enforceable by
a decree of specific performance and appropriate injunctive relief may be
applied for and granted with Seller hereby waiving any defense that damages are
sufficient and any right to require that the Buyer post a bond prior to granting
of the injunction. Such remedies shall be cumulative and not exclusive and shall
be in addition to any other remedies that the Buyer may have under this letter
of intent. All obligations under this paragraph are subject to the Procedure
Order and the Bankruptcy Code, the duty under this letter of intent to seek the
Procedure Order, and any fiduciary duties arising under the Bankruptcy Code,
including, but not limited to, responding to information requests and otherwise
complying with any of the obligations set forth in the Procedure Order with
respect to any sale or auction process.
6. IMPACT OF DELAWARE LAW OR STATUS AS DEBTOR IN POSSESSION. Notwithstanding any
other provision of this letter of intent, this letter does not require that you
act in a manner inconsistent with your fiduciary duties under (a) applicable
law, arising from your status as a corporation organized under Delaware law, or
(b) the Bankruptcy Code, arising from your status as a debtor in possession.
Your performance of your obligations under this letter of intent is subject to
those fiduciary duties, and no act necessary to discharge those duties
constitutes a
breach of your obligations under this letter of intent. Notwithstanding the
foregoing, your status as a Delaware corporation or debtor in possession does
not otherwise affect the continuing validity or enforceability of this letter of
intent.
7. MISCELLANEOUS.
(a) This letter of intent shall be governed by the substantive laws of the State
of New York without regard to conflict of law principles.
(b) This letter constitutes the entire understanding and agreement between the
parties hereto and their affiliates with respect to its subject matter and
supersedes all prior or contemporaneous agreements, representations, warranties
and understandings of such parties (whether oral or written). No promise,
inducement, representation or agreement, other than as expressly set forth
herein, has been made to or by the parties hereto. This letter may be amended
only by written agreement, signed by the parties to be bound by the amendment.
Evidence shall be inadmissible to show agreement by and between such parties to
any term or condition contrary to or in addition to the terms and conditions
contained in this letter. This letter shall be construed according to its fair
meaning and not strictly for or against either party.
(c) Seller acknowledges that Buyer will be performing its examination of the
Seller and its assets. Seller acknowledges that Buyer is engaged in a broad
range of businesses that may be similar to, or identical with Seller's business
and that Buyer has considered, and will consider, the acquisition of, or joint
ventures with, other persons or entities that are engaged in businesses similar
to, or identical with, Seller's business. Accordingly, Seller agrees that
neither this Agreement, nor Buyer's consideration of the proposed transaction,
will impact or restrict Buyer's operation of such businesses or their
consideration of, or participation in, such transactions. In addition, Seller
acknowledges that Buyer has informed Seller that Buyer has, and will continue
to, work on the development of a wide variety of products and techniques,
including products and techniques that may be similar to or competitive with
Seller's products and techniques, and that neither this Agreement, nor Buyer's
consideration of the proposed transaction shall restrict Buyer's use of the
results of such development. Any discussions or communications between the
parties hereto will not serve to impair the right of Buyer by itself or through
any third party to develop, make, use, procure and/or market products or
services now or in the future which may be competitive with those offered by the
other.
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First Virtual Communications, Inc. RADVISION Ltd.
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxxxx X. Xxxxxx Name: Xxxxxx Xxxxxxx, Esq., Adv.
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Title: President & CEO Title: V.P. & General Counsel
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Date: 1/19/2005 Date: January 20, 2005
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