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CONFIDENTIAL TREATMENT REQUESTED BY BEARCOM GROUP, INC.
OMITTED PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SEC.
EXHIBIT 10.15
September 25, 1997
Xxxxxx Xxxxxx
Tedco, Inc.
Xxxxx X. Xxxxxx
Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxx Cepelewicz
Xxxx Xxxxxx Xxxxxxx
0000 Xxxxxxxx Xx. #0000
Xxx Xxxxx, XX 00000
Gentlemen:
The purpose of this letter agreement (this "Agreement") is to set
forth the terms and conditions agreed to by and among Bear Communications,
Inc., a California corporation ("Purchaser"), Xxxxxx Xxxxxx ("Xxxxxx"), Tedco,
Inc. ("Tedco")(Xxxxxx and Tedco are sometimes collectively referred to herein
as the "Shareholders"), Xxxxx X. Xxxxxx, Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx Xxxxxx
Cepelewicz and Xxxx Xxxxxx Xxxxxxx (Xxxxx X. Xxxxxx, Xxxxx Xxxxxx Xxxxxxxxx,
Xxxxx Xxxxxx Cepelewicz and Xxxx Xxxxxx Xxxxxxx, being the owners of all of the
capital stock of Tedco, are sometimes collectively referred to herein as the
"Tedco Shareholders") for Purchaser's purchase of all of the capital stock (the
"Shares") of Cellular City, Inc. (fka Convention Communications, Inc.), a
Nevada corporation (the "Company"). For good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Sale of Shares. At the Closing (hereinafter defined),
Purchaser will purchase and the Shareholders will sell, convey and assign the
Shares, free and clear of all liens, claims and encumbrances.
2. Price for the Assets. The purchase price for the Shares (the
"Purchase Price") shall be [Confidential Treatment Requested with SEC] and shall
be payable by Purchaser to the Shareholders by wire transfers at the Closing.
The Purchase Price will be divided between the Shareholders based on their share
ownership as set forth in Section 3(b) hereof.
3. Representations and Warranties of the Shareholders. The
Shareholders jointly and severally represent and warrant to Purchaser that the
following are true and correct as of the date hereof and that the following
will be true and correct as of the Closing Date:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada
with all requisite power and authority to carry on the business in
which it is now engaged and to own and lease the properties it now
owns and leases. The Company is qualified to do business as a foreign
corporation in Illinois. The Company is not
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required to be qualified to conduct business in any jurisdiction other
than the States of Nevada and Illinois. Tedco is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Nevada, with all requisite power and authority to execute and
deliver this Agreement and perform its obligations hereunder.
(b) The authorized capital stock of the Company consists
of 2,500 shares of Common Stock, of which 700 shares are issued and
outstanding and no shares are held in treasury. The outstanding
Common Stock is held of record and beneficially as follows: Xxxxxx
(336 shares) and Tedco (364 shares). All of the outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable, and none have been issued or
disposed of in violation of the preemptive rights of any current or
former shareholder. There are no outstanding securities convertible
into or exchangeable for capital stock of the Company. There are no
outstanding options, warrants or other rights to acquire, or any
plans, contracts or commitments providing for the issuance of or the
right to acquire (i) any capital stock of the Company or (ii) any
securities convertible into or exchangeable for the capital stock of
the Company.
(c) The Shareholders are the sole record and beneficial
owners of all of the outstanding capital stock of the Company, free
and clear of all liens, claims, encumbrances and proxies. At the
Closing, Purchaser will acquire good and indefeasible title to the
Shares, free and clear of all liens, claims, encumbrances and proxies
other than those created by Purchaser, if any.
(d) Each Shareholder has the capacity, power and
authority to transfer the Shares owned by him or it without the
consent of any other person. Each Shareholder has the sole right to
vote or direct the voting of the shares of capital stock of the
Company owned by him or it, at his or its discretion, on any matter
submitted to a vote of shareholders of the Company.
(e) The copies of the Articles of Incorporation and
Bylaws, and all amendments thereto, of the Company that have been
delivered to Purchaser are true, correct and complete copies thereof.
The minute books of the Company, copies of which have been provided to
Purchaser, contain complete and accurate minutes of all meetings of
and accurate consents to all actions taken without meetings by the
Board of Directors (and any committee thereof) and the shareholders of
the Company since the formation of the Company. There are no
outstanding applications or filings that would alter in any way the
charter documents or corporate status of the Company; no bylaws have
been passed, enacted, consented to or adopted by the directors or
shareholders of the Company except those contained in the minute books
of the Company.
(f) The Company owns all of the assets reflected in the
October 31, 1996 balance sheet of the Company previously delivered by
the Shareholders to Purchaser, along with property acquired by the
Company since October 31, 1996 . The inventory amounts on the October
31, 1996 balance sheet reflect the cost of such inventory. Set forth
on Schedule 3(f) is a true and correct list of all fixed assets and
rental cellular phones owned by Company. The Company holds good and
indefeasible title to all of its assets, free and clear of all liens,
claims and encumbrances. The assets owned and leased by the Company
constitute all of the assets, property and goodwill of every kind and
character used in the business of the Company.
(g) The Shareholders have furnished to Purchaser the
audited balance sheet and related statements of operations, and cash
flows of the Company including the notes thereto at and for the
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period ending October 31, 1996 (the "Audited Financial Statements")
and the unaudited balance sheet and related statements of operations,
and cash flows of the Company at and for the period ending July 31,
1997 (the "Unaudited Financial Statements," and collectively, with the
Audited Financial Statements, the "Financial Statements"). The
Financial Statements fairly present the financial condition and
results of operations of the Company as of the dates and for the
periods indicated and have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
with prior practices. There were not any significant items of income
or expense which were unusual or of a nonrecurring nature reflected in
the Financial Statements.
(h) Except for those liabilities and obligations incurred
in the ordinary course of business consistent with prior practices
since the date of the Financial Statements, none of which are
material, the Financial Statements reflect all liabilities and
obligations of the Company, accrued, contingent or otherwise (known or
unknown and asserted or unasserted), arising out of transactions
effected or events occurring on or prior to the Closing Date. All
allowances and reserves shown in the Financial Statements are
appropriate, reasonable and sufficient to provide for expenses and
losses thereby contemplated. The Company is not liable upon or with
respect to, or obligated in any other way to provide funds in respect
of or to guarantee or assume in any manner, any debt, obligation or
dividend of any person, corporation, association, partnership, joint
venture, trust or other entity. The Company and each of the
Shareholders know of no basis for the assertion of any other claims or
liabilities of any nature or in any amount.
(i) This Agreement has been duly authorized, executed and
delivered by the Shareholders and is a valid and binding agreement of
the Shareholders, enforceable against each such party in accordance
with its terms.
(j) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated herein violates
any law, agreement, mortgage or other instrument or provision of law
to which or under which the Company or the Shareholders are a party or
bound.
(k) Except for the consents set forth on Schedule 3(k)
hereto, no consents or approvals are required for execution of this
Agreement by the Shareholders or their consummation of the
transactions contemplated herein.
(l) There is no judicial, administrative or arbitral
action, suit, proceeding (public or private), claim or demand pending
or threatened against the Company or its business.
(m) The Company and its business are, and have been, in
compliance with all applicable laws, rules, regulations, ordinances,
licenses, permits and orders. The Company does not have any employee
benefit plans other than a group health insurance plan. The Company
has paid all amounts due pursuant to the health insurance plan. The
Company has maintained all employee benefit plans and arrangements in
accordance with all applicable laws, rules and regulations including
the Internal Revenue Code of 1986, as amended, and the Employee
Retirement Income Security Act of 1974, as amended, and have timely
filed with all applicable regulatory authorities all applicable
reports and returns required to be filed by them with respect to its
employee benefit plans and arrangements.
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(n) Except as explicitly disclosed in the July 31, 1997
balance sheet delivered by the Shareholders to the Purchaser, the
Company has no liabilities for federal, state or local taxes,
including but not limited to income, estimated, sales, use, ad
valorem, personal property, franchise, payroll, employment, social
security, unemployment, and disability taxes. The Company has duly
and timely filed all tax returns required to be filed by or on behalf
of it pursuant to any applicable federal, state or local law for all
years and periods for which such tax returns have become due. All
such tax returns were correct and complete. All taxes owed by the
Company or required to be withheld or collected by the Company and
paid to a taxing authority have been paid to the appropriate taxing
authority, or if they are not yet required to be paid to the
appropriate taxing authority, have been set aside in accounts for such
purpose or have been reserved on the books of account of the Company.
The Company has never filed an election to be treated as an S
corporation in accordance with the provisions of Section 1362(a) of
the Internal Revenue Code.
(o) The Company has not suffered any adverse change in
its business, operations, financial condition or prospects from that
heretofore represented to Purchaser or its affiliates, officers or
representatives. Since the date of the Audited Financial Statements,
the Company has conducted its business in the ordinary and normal
course consistent with past practices including the payment of
payables in a timely manner.
(p) Schedule 3(p) hereto sets forth all contracts to
which the Company is a party (the "Contracts"). The Company has
provided Purchaser with true, correct, and current copies of the
Contracts other than the Nevada lease, which the Company can not find.
All of the Contracts are in full force and effect. Neither party to
any Contract is in default under any of such Contract, and no event
has occurred that would, with the passage of time, cause a default
under any of such Contracts. The Company has paid the other party to
each such Contract all amounts it owes them. The lease to which the
Company is a party in Nevada is a month to month lease. The Company
does not have a lease in Illinois.
(q) Set forth in Schedule 3(q) hereto is a complete and
accurate list of all employees of the Company, together with their
dates of hire, positions and their annual salaries and other
compensation. The Company has not granted or become obligated to
grant any increases in the wages or salary of, or paid or become
obligated to pay any bonus or made or become obligated to make any
similar payment to or grant any benefit to or on behalf of, any
officer, employee or agent. The Company has no direct or indirect,
express or implied, obligation to pay severance or termination pay to
any officer or employee of the Company or to pay any amounts to any
consultant, agent or similar person or entity. The Company and the
Shareholders have no knowledge of any facts which would indicate that
any employee of the Company will not remain employed by the Company or
Purchaser on a basis no less favorable than that upon which such
employee is currently employed by the Company. The Company is not a
party to any collective bargaining agreement or the subject of any
union organization effort, and there are not any pending or threatened
strikes, labor disputes, slow downs or stoppages pending or threatened
against the Company.
(r) All of the fixed assets (including but not limited to
all equipment), owned or leased by the Company are in good condition
and repair (reasonable wear and tear excepted), fit for their intended
use in the ordinary course of business, and conform in all respects
with all applicable ordinances, regulations and other laws and there
are no known latent defects therein. To the best of the Company's
knowledge all regular maintenance or service requirements, and product
recalls,
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have been followed, installed, or otherwise implemented on and with
respect to the fixed assets. All inventory of the Company is in good,
current, standard, and merchantable condition and is not defective.
The inventory of the Company is properly recorded on the Financial
Statements at the lower of cost (last in-first out) or market in
accordance with GAAP.
(s) All patents, trademarks, trade names, service marks,
copyrights and other proprietary rights ("Proprietary Rights") which
the Company owns or uses are listed in Schedule 3(s) hereto. The
Company has a valid right to use all of such Proprietary Rights
without conflict with the rights of others. No person has made or
threatened to make any claim that the operations of the Company are in
violation of or infringe upon any Proprietary Right of any other
person.
(t) The books of account of the Company have been kept
accurately in the ordinary course of its business, the transactions
entered therein represent bona fide transactions and the revenues,
expenses, assets and liabilities of the Company have been properly
recorded in such books. The records are in good order, are complete,
and have been maintained in accordance with sound business practices.
(u) Set forth in Schedule 3(u) hereto is a complete and
accurate list and description of all accounts receivable of the
Company's business from sales made as of July 31, 1997, and the
payments and rights to receive payments related thereto. All of the
accounts receivable are free and clear of any security interests,
liens, encumbrances, or other charges; none of such accounts
receivable are subject to any offsets or claims of offsets; and none
of the obligors of the accounts receivable have given notice that they
will or may refuse to pay the full amount thereof or any portion
thereof. All accounts receivable will be collected in the usual and
ordinary course of business within 90 days after the Closing assuming
Purchaser undertakes reasonable efforts to collect such receivables.
(v) Since October 31, 1996, the Company has not (i)
declared, paid or set aside for payment any dividend or distribution
to its shareholder or shareholders, (ii) made any loan or advance to
any shareholder, officer, director or employee, (iii) redeemed,
purchased or otherwise acquired or sold or issued any of its capital
stock or any right to acquire such capital stock, (iv) increased the
compensation of or paid or accrued any bonus to any employee other
than in accordance with past established practices, or (v) except as
described on Schedule 3(v) hereto, paid any management or consulting
fee or any other amounts to any Shareholder, Worldwide Communications,
Inc. or any other person related to or affiliated with the Company,
any Shareholder or any employee of the Company, and none of such
actions will be taken after the date hereof until the consummation of
the transactions contemplated hereby.
(w) No shareholder, director, or officer of the Company,
nor any person who is a spouse or descendant of such shareholder,
director or officer, has any direct or indirect relationship with any
customer or supplier of, or other contracting party with, the Company.
(x) Neither the Company nor any Shareholder knows or has
any reason to believe, or has received notice or information, that any
supplier of the Company or any other party that does business with the
Company will cease or refuse to do business with the Company or
Purchaser after the consummation of the transactions contemplated
hereby in the same manner, and same amount, as previously conducted
with the Company. Neither the Company nor any Shareholder has
received
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any notice of any disruption (including delayed deliveries or
allocations by suppliers or service providers) in the availability of
the products used by the Company, nor are the Company or any
Shareholder aware of any facts which could lead the Company to believe
that the Company or Purchaser will be subject to any such material
disruption. Neither the Company nor any Shareholder is aware of any
condition (financial or otherwise) affecting any supplier or any other
party that does business with the Company that will, or could be
reasonably expected to, now or in the future, reduce each such party's
ability to do business with Purchaser in substantially the same manner
and amount that each such party has done business with the Company
during the period preceding this Agreement. Set forth in Schedule
3(x) is a complete and accurate list and description of all volume
discounts and other discounts provided by any supplier of the Company
or other party.
(y) No Shareholder knows or has any reason to believe, or
has received notice or information, that any customer of the Company
will cease or refuse to do business with the Company or Purchaser
after the consummation of the transactions contemplated hereby in the
same manner, and same amount, as previously conducted with the
Company. The Company does not have any customers that constituted 5%
or more of the Company's revenues for the twelve-month period ended
July 31, 1997.
(z) All information furnished to Purchaser by the Company
or the Shareholders, whether or not herein or in any Exhibit or
Schedule hereto, is true, correct, and complete. Such information
states all material facts required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which such statements are made, true, correct and complete in all
material respects. The Shareholders have made due inquiry and
investigation concerning the matters to which representations and
warranties of the Shareholders under this Agreement pertain and the
Company and the Shareholders, and each of them, are unaware of any
facts, events or circumstances which have not been disclosed to
Purchaser which are material to the financial condition, results of
operations, business or prospects of the Company.
The representations, warranties and covenants of the Shareholders set forth in
this Agreement shall survive execution and delivery of this Agreement and the
Closing.
4. Representations and Warranties of the Tedco Shareholders. The
Tedco Shareholders jointly and severally represent and warrant to Purchaser
that the following are true and correct as of the date hereof and that the
following will be true and correct as of the Closing Date:
(a) The authorized capital stock of the Company consists
of 2,500 shares of Common Stock, of which 700 shares are issued and
outstanding and no shares are held in treasury. The outstanding
Common Stock is held of record and beneficially as follows: Xxxxxx
(336 shares) and Tedco (364 shares). All of the outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable, and none have been issued or
disposed of in violation of the preemptive rights of any current or
former shareholder. There are no outstanding securities convertible
into or exchangeable for capital stock of the Company. There are no
outstanding options, warrants or other rights to acquire, or any
plans, contracts or commitments providing for the issuance of or the
right to acquire (i) any capital stock of the Company or (ii) any
securities convertible into or exchangeable for the capital stock of
the Company.
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(b) The Shareholders are the sole record and beneficial
owners of all of the outstanding capital stock of the Company, free
and clear of all liens, claims, encumbrances and proxies. At the
Closing, Purchaser will acquire good and indefeasible title to the
Shares, free and clear of all liens, claims, encumbrances and proxies.
The Tedco Shareholders are the sole record and beneficial owners (and
have been for at least one year prior to the date hereof) of all of
the capital stock of Tedco, securities convertible into or
exchangeable for capital stock of Tedco, and all options, warrants or
other rights to acquire the foregoing.
(c) Tedco has, and to the best knowledge of Tedco and the
Tedco Shareholders Xxxxxx has, the capacity, power and authority to
transfer the Shares owned by him or it without the consent of any
other person. Tedco has, and to the best knowledge of Tedco and the
Tedco Shareholders Xxxxxx has, the sole right to vote or direct the
voting of the shares of capital stock of the Company owned by him or
it, at his or its discretion, on any matter submitted to a vote of
shareholders of the Company.
(d) The Shareholders have furnished to Purchaser the
audited balance sheet and related statements of operations, and cash
flows of the Company including the notes thereto at and for the period
ending October 31, 1996 (the "Audited Financial Statements") and the
unaudited balance sheet and related statements of operations, and cash
flows of the Company at and for the period ending July 31, 1997 (the
"Unaudited Financial Statements," and collectively, with the Audited
Financial Statements, the "Financial Statements"). The Financial
Statements fairly present the financial condition and results of
operations of the Company as of the dates and for the periods
indicated and have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis with
prior practices. There were not any significant items of income or
expense which were unusual or of a nonrecurring nature reflected in
the Financial Statements.
(e) Except for those liabilities and obligations incurred
in the ordinary course of business consistent with prior practices
since the date of the Financial Statements, none of which are
material, the Financial Statements reflect all liabilities and
obligations of the Company, accrued, contingent or otherwise (known or
unknown and asserted or unasserted), arising out of transactions
effected or events occurring on or prior to the Closing Date. All
allowances and reserves shown in the Financial Statements are
appropriate, reasonable and sufficient to provide for expenses and
losses thereby contemplated. The Company is not liable upon or with
respect to, or obligated in any other way to provide funds in respect
of or to guarantee or assume in any manner, any debt, obligation or
dividend of any person, corporation, association, partnership, joint
venture, trust or other entity. The Company and each of the Tedco
Shareholders know of no basis for the assertion of any other claims or
liabilities of any nature or in any amount.
(f) Except as explicitly disclosed in the July 31, 1997
balance sheet delivered by the Shareholders to the Purchaser, the
Company has no liabilities for federal, state or local taxes,
including but not limited to income, estimated, sales, use, ad
valorem, personal property, franchise, payroll, employment, social
security, unemployment, and disability taxes. The Company has duly
and timely filed all tax returns required to be filed by or on behalf
of it pursuant to any applicable federal, state or local law for all
years and periods for which such tax returns have become due. All
such tax returns were correct and complete. All taxes owed by the
Company or required to be withheld or collected by the Company and
paid to a taxing authority have been paid to the
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appropriate taxing authority, or if they are not yet required to be
paid to the appropriate taxing authority, have been set aside in
accounts for such purpose or have been reserved on the books of
account of the Company. The Company has never filed an election to be
treated as an S corporation in accordance with the provisions of
Section 1362(a) of the Internal Revenue Code.
The representations, warranties and covenants of the Tedco Shareholders set
forth in this Agreement shall survive execution and delivery of this Agreement
and the Closing.
5. Closing. The closing of the transactions contemplated hereby
(the "Closing") will take place concurrently with the execution of this
Agreement at the offices of the Company (or such other place as may be mutually
agreed upon by the parties hereto). The day on which the Closing occurs is
herein referred to as the "Closing Date." The effective date of the
consummation of the transactions contemplated hereby shall be July 25, 1997.
6. Deliveries at Closing. At the Closing,
(a) Each Shareholder shall deliver to Purchaser stock
certificates evidencing the Shares owned by him or it, in each case
duly endorsed or accompanied by duly executed stock powers in form
satisfactory to Purchaser with signatures guaranteed by a national
bank;
(b) Purchaser shall deliver the Purchase Price by wire
transfers to the Shareholders, to be divided between the Shareholders
based on their share ownership as set forth in Section 3(b) hereto;
(c) counsel to the Company and the Shareholders shall
deliver to Purchaser a legal opinion dated the Closing Date in form
reasonably acceptable to Purchaser opining to the matters set forth in
Exhibit A hereto;
(d) the Company's accounting firm shall deliver a letter
dated the Closing Date and addressed to Purchaser stating that to its
knowledge that there are no pending audits or investigations involving
the Company and that it has no reason to believe that the Financial
Statements do not fairly present the financial condition of the
Company at and for the periods set forth therein;
(e) the Shareholders shall deliver evidence of receipt of
all required approvals, consents, licenses and permits to the
transactions contemplated herein in a form acceptable to the Purchaser
in its sole discretion;
(f) the Shareholders shall deliver evidence that it has
paid or otherwise satisfied all of the payroll and commissions payable
by the Company through the Closing Date;
(g) Tedco shall deliver documents and certificates in
form acceptable to Purchaser evidencing the authority of its officers
to execute and deliver this Agreement and consummate the transactions
contemplated hereby;
(h) counsel to Purchaser shall deliver to the Company a
legal opinion dated the Closing Date in form reasonably acceptable to
the Company opining as to the due authorization, execution and
delivery by Purchaser of this Agreement; and
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(i) the Company and the Shareholders shall execute and
deliver such other documents as are reasonably requested by Purchaser
to effectuate the purposes and intent of this Agreement.
7. [Intentionally Deleted]
8. Confidentiality. The Shareholders agree to hold in confidence
the terms of this Agreement and, except as required by law, will not make the
same available or known to any third party other than their counsel,
accountants and other agents or representatives acting on their behalf, and
then only to the extent necessary, provided each such person is advised of the
confidential nature of the terms hereof and agrees to hold the same in
confidence.
9. Noncompetition and Non-solicitation.
(a) With respect to Tedco and the Tedco Shareholders for
a period of three years after the Closing, and with respect to Xxxxxx
for a period until the later of three years after the Closing or one
year after he ceases to be employed by Purchaser, the Company or any
of their affiliates (the "Noncompetition Period"), and except for
services performed on behalf of Purchaser or the Company, the
Shareholders and the Tedco Shareholders (collectively, the "Restricted
Persons") agree that neither they nor any of their affiliates will
directly or indirectly either as an individual, a partner or a joint
venturer, or in any other capacity, (i) invest (other than investments
in publicly-owned companies which constitute not more than 1% of the
voting securities of any such company), or engage in, within the State
of Nevada or within 100 miles of Chicago, Illinois (x) the business of
selling, renting, or servicing any wireless communication products or
(y) any other business that is competitive with that of Purchaser, the
Company or their affiliates (the items listed under clauses (x) and
(y) hereto are collectively referred to herein as "Competitive
Businesses"), or (ii) accept employment with or render services to
Competitive Businesses that engages in such Competitive Business
within the State of Nevada or within 100 miles of Chicago, Illinois as
a director, officer, agent, employee, consultant, or any other
capacity. For purposes of this Agreement, a "business that is
competitive with that of Purchaser, the Company or their affiliates"
specifically includes persons, firms, sole proprietorships,
partnerships, companies, corporations or other entities that market
products and/or perform services within the State of Nevada or within
100 miles of Chicago, Illinois in direct or indirect competition with
those marketed and/or performed by Purchaser or its affiliates
including the Company (with regard to the Restricted Persons other
than Xxxxxx, a business shall only be considered to be competitive
with that of Purchaser, the Company or their affiliates if it markets
products and/or performs services that are in direct or indirect
competition with those marketed and/or performed as of the Closing
Date by Purchaser, the Company or their affiliates). Purchaser
acknowledges and understands that affiliates of certain of the
Restricted Persons are in the business of re-selling long distance
phone services and 800 telephone numbers, and Purchaser agrees that
such business shall not be considered to be a business that is
competitive with that of Purchaser, the Company or their affiliates.
The parties agree that, if such non-competition agreement is
determined by a court of competent jurisdiction to be unenforceable,
such agreement should be reformed by the court to the extent necessary
to be enforceable and to give effect to the intent of this Section 9.
(b) During the Noncompetition Period, the Restricted
Persons will not, directly or indirectly, (i) except on behalf of the
Company or Purchaser, solicit for any purpose, any customer or former
customer of the Company or Purchaser, (ii) solicit for employment by
himself, itself, or
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anyone else, any employee of the Company, Purchaser or their
affiliates or any person who was an employee of the Company, Purchaser
or their affiliates within the four-month period immediately preceding
such solicitation or employment, other than such person whose
employment was terminated by Purchaser or its affiliates; or (iii)
induce or attempt to induce, any such employee of the Company,
Purchaser or their affiliates to terminate such employee's employment.
(c) The parties hereto acknowledge that the provisions of
this Section 9 are supported by good and valuable consideration and
Purchaser's agreement to consummate the transactions contemplated
hereby are conditioned upon its receipt of the protection provided in
this Section 9. The parties hereto further acknowledge that the scope
and duration of the covenants set forth in this Section 9 are in all
respects reasonable.
(d) The Restricted Persons acknowledge and agree that the
breach by any of them of the provisions of this Section 9 could not be
adequately compensated with monetary damages and would irreparably
injure Purchaser and the Company, and, accordingly, that injunctive
relief and specific performance shall be appropriate remedies to
enforce the provisions of this Section against the Restricted Persons,
and the Restricted Persons waive any claim or defense that there is an
adequate remedy at law for such breach; provided, however, that
nothing contained herein shall limit the remedies, legal or equitable,
otherwise available to Purchaser, and all remedies of Purchaser herein
are in addition to any remedies available to Purchaser at law or
otherwise.
(e) The Restricted Persons acknowledge and recognize that
the enforcement of any of the noncompetition provisions in this
Agreement by Purchaser will not interfere with the Restricted Persons'
ability to pursue a proper livelihood. The Restricted Persons further
represent that they are capable of pursuing a career that would not
violate the noncompetition provisions hereof to earn a proper
livelihood. The Restricted Persons agree that due to the nature of
such business, the noncompetition restrictions set forth in this
Agreement are reasonable as to time and geographic area. At any time
during the non-compete period, Purchaser may require the Restricted
Persons to supply such information as Purchaser deems necessary to
ascertain whether or not the Restricted Persons have complied with, or
have violated, the covenants set forth in this Section 9. Any such
request for information will be sent to the Restricted Persons by
certified mail, return receipt requested, addressed to such person's
last known address. The Restricted Persons shall furnish the
requested information to Purchaser within 10 days following the
receipt of such request.
10. Expenses; Transfer Tax. Purchaser, on the one hand, and the
Shareholders, on the other hand, will bear their own costs and expenses of the
transactions contemplated hereby. The Company will not bear any costs and
expenses of the transactions contemplated hereby. The Shareholders shall be
liable for and shall pay any transfer tax, sales tax and other similar taxes
resulting from consummation of the transactions contemplated hereby.
11. Further Assurances. At the Closing and after the Closing,
each party hereto shall take all actions and duly execute and deliver or cause
to be executed and delivered all instruments of sale, conveyance, transfer,
assignment or assumption, and all notices, releases, acquittances and other
documents that may be necessary or advisable to consummate the transactions
contemplated in this Agreement, or more fully to sell, convey, transfer,
assign, and deliver to and vest in Purchaser the Shares sold, conveyed,
transferred, assigned, and delivered by the Company pursuant hereto or intended
so to be. Purchaser acknowledges that the Shareholders are not guaranteeing
the future profits of the Company.
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12. Indemnification. The Shareholders and the Tedco Shareholders
shall, jointly and severally, indemnify and hold Purchaser and its affiliates
and the officers, directors, partners, stockholders, employees and agents of
Purchaser and its affiliates harmless from and against any loss, damage, claim,
demand, cause of action, liability, costs or expense (including without
limitation interest, penalties, and attorneys' fees and disbursements) of any
kind or nature whatsoever asserted against or incurred by Purchaser or the
Company by reason of, resulting from, or based upon: (a) any misrepresentation,
breach of warranty or breach or nonfulfillment of any covenant or other
agreement made by them herein or in any other agreement executed and delivered
by them pursuant to this Agreement, (b) any liability of the Company for
failure to file any federal, state or local income tax return, and any
liability or obligation to pay any federal, state or local taxes, relating to
any tax period ending on or prior to the Closing Date and any liability to pay
interest or penalties upon or with respect to any of the foregoing, (c) any
obligation or liability relating to any period prior to the Closing Date
relating to any employee benefit plan of the Company or relating to any
employee of the Company who is not retained by Purchaser or the Company after
the Closing, and (d) any obligation or liability for any finders', brokers' or
agents' fee in connection with the transactions contemplated hereby; provided,
however, the liability of each Shareholder pursuant to the provisions of this
Section 12 shall not exceed the Purchase Price received by him or it. No claim
shall be made against the Shareholders pursuant to this Section 12 unless and
until the aggregate amount of such claims exceed the sum of $12,500, whereupon
the indemnified party shall be entitled to recover the full amount of all
claims, including the initial $12,500.
NO INVESTIGATION BY OR ON BEHALF OF, AND NO NEGLIGENCE OF, PURCHASER OR ITS
AFFILIATES, NOR ANY INFORMATION THAT THEY MAY HAVE OR OBTAIN WILL AFFECT THE
INDEMNIFICATION OBLIGATIONS OF THE SHAREHOLDERS OR THE TEDCO SHAREHOLDERS
HEREUNDER.
13. Entire Agreement: Counterparts. This Agreement constitutes
the entire agreement among the parties pertaining to the subject matter hereof
and supersedes all other prior or contemporaneous agreements and
understandings, both oral and written, of the parties in connection therewith.
This Agreement may be executed in counterparts.
14. Severability. The parties hereto intend all provisions of
this Agreement including the provisions set forth in Section 9 hereof to be
enforced to the fullest extent permitted by law. Accordingly, should a court
of competent jurisdiction determine that the scope of any provision herein is
too broad to be enforced as written, the parties intend that the court reform
the provision to such narrower scope as it determines to be reasonable and
enforceable. In addition, however, the Restricted Persons agree that the
noncompetition agreements and nonemployment agreements set forth above each
constitute separate agreements independently supported by good and adequate
consideration and shall be severable from the other provisions of, and shall
survive, this Agreement. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part of this Agreement; and the remaining
provisions of this Agreement shall remain in full force and effect and shall
not be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement, a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
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15. Amendments. This Agreement may be amended or modified only by
a written instrument signed by all the parties hereto.
16. Governing Law; Venue. This Agreement shall be governed and
construed in accordance with the laws of the State of Texas, without regard to
the conflicts of laws principles thereof. Venue for any disputes regarding
this Agreement, the transactions contemplated hereby or the liabilities or
obligations imposed hereunder shall be in federal or state court in Dallas
County, Texas.
17. Notices. Any notices, consents, demands, requests, approvals
and other communications to be given under this Agreement by any party to
another shall be deemed to have been duly given if given in writing and
personally delivered or sent by mail, registered or certified, postage prepaid
with return receipt requested, as follows:
If to the Purchaser: Bear Communications, Inc.
0000 Xxxxxxxx Xxxxxx #X0
Xxxxx Xxxx, XX 00000
Attention: President
If to any Shareholder: the applicable address as set forth on page one
Notices delivered personally shall be deemed communicated as of actual receipt;
mailed notices shall be deemed communicated as of three days after mailing.
Any party may change its, his or her address by written notice given to the
other parties in the manner set forth herein.
18. Gender. Whenever the context requires, references in this
Agreement to words denoting gender include the masculine, feminine and neuter.
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If you agree to the terms of this Agreement, please so indicate by
signing this letter or a counterpart in the spaces provided below and returning
it to the undersigned as soon as practicable.
Very truly yours,
BEAR COMMUNICATIONS, INC.
By: /s/ XXXXX XXXXXX
-----------------
Xxxxx Xxxxxx,
President
Duly Executed, Agreed and Accepted:
CELLULAR CITY, INC.
By: /s/ XXXXXX XXXXXX
-------------------
Xxxxxx Xxxxxx,
President
/s/ XXXXXX XXXXXX
-----------------
Xxxxxx Xxxxxx
TEDCO, INC.
By: /s/ XXXXXXX X. XXXXXXX
------------------------
Xxxxxxx X. Xxxxxxx,
President
/s/ XXXXX X. XXXXXX
-------------------
Xxxxx X. Xxxxxx
/s/ XXXXX XXXXXX XXXXXXXXX
--------------------------
Xxxxx Xxxxxx Xxxxxxxxx
/s/ XXXXX XXXXXX CEPELEWICZ
---------------------------
Xxxxx Xxxxxx Cepelewicz
/s/ XXXX XXXXXX XXXXXXX
------------------------
Xxxx Xxxxxx Xxxxxxx
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