EXHIBIT 10.6
ASSET PURCHASE AGREEMENT
between
SATELLINK PAGING INC.
"Purchaser"
and
C.R., INC.
"Seller"
and
XXXXX XXXXXX
XXXXX XXXXXXX
and
XXX XXX XXXXXXX, AS TRUSTEE OF
THE SAFETON TRUST,
Dated October 1, 1992
"Shareholders"
DATED AS OF MAY 31, 1996
PAGE
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TABLE OF CONTENTS
ARTICLE 1 PURCHASE, SALE OF ASSETS............................................ 1
1.1 Purchase and Sale of Acquired Assets................................ 1
1.2 Excluded assets of Seller........................................... 4
1.3 collection of accounts receivable................................... 5
1.4 Non-compete agreements of Shareholders.............................. 8
1.5 Call One Agreement.................................................. 8
1.6 Interest in Pagers.................................................. 8
1.7 License of Software................................................. 9
ARTICLE 2 ASSUMPTION OF LIABILITIES........................................... 9
2.1 Assumption of Liabilities of Seller................................. 9
2.2 Excluded Liabilities of Seller...................................... 9
ARTICLE 3 CALCULATION AND PAYMENT OF PURCHASE PRICE........................... 10
3.1 Purchase Price...................................................... 10
3.2 Payment of Purchase Price........................................... 10
3.3 Transfer Expenses................................................... 10
3.4 Allocation of Purchase Price........................................ 10
ARTICLE 4 PROCEDURE FOR CLOSINGS.............................................. 10
4.1 Time and Place of Closing........................................... 10
4.2 Condition to Closing................................................ 11
4.3 Transactions at the Closing......................................... 11
4.4 Certain Consents.................................................... 13
4.5 Further Assurances.................................................. 14
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS........... 14
5.1 Organization and Qualification...................................... 14
5.2 Authority........................................................... 14
5.3 Financial Statements................................................ 15
5.4 Inventories......................................................... 15
5.5 Personal Property................................................... 15
5.6 Real Property....................................................... 16
5.7 Contracts........................................................... 17
5.8 Intellectual Property............................................... 18
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5.9 Insurance........................................................... 19
5.10 Environmental Matters............................................... 19
5.11 Litigation.......................................................... 20
5.12 Absence of Changes.................................................. 20
5.13 Brokers and Finders................................................. 22
5.14 Labor Matters....................................................... 22
5.15 Governmental Approval and Consents.................................. 23
5.16 Taxes............................................................... 23
5.17 Employee Benefit Plans.............................................. 24
5.18 Compliance with Laws................................................ 26
5.19 Governmental Approval and Consents.................................. 26
5.20 Adequacy of Acquired Assets......................................... 26
5.21 Title to Assets..................................................... 26
5.22 Correctness of Representations...................................... 26
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF PURCHASER......................... 27
6.1 Organization and Qualification...................................... 27
6.2 Authority........................................................... 27
6.3 Litigation.......................................................... 27
6.4 Correctness of Representations...................................... 27
6.5 Brokers and Finders................................................. 27
6.6 Governmental Approval and Consents.................................. 28
ARTICLE 7 COVENANTS........................................................... 28
7.1 Mutual Covenants.................................................... 28
7.2 Conduct of Business Prior to Closing................................ 28
7.3 Access and Information.............................................. 29
7.4 Notification of Changes............................................. 29
7.5 Certain Acts Prohibited............................................. 29
7.6 Consents............................................................ 29
7.7 Supplemental Disclosure............................................. 30
7.8 Conditions Precedent................................................ 30
7.9 Discharge of Liens and Encumbrances................................. 30
7.10 Prorations.......................................................... 30
7.11 Covenant to Pay Debts............................................... 31
ARTICLE 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.................... 32
8.1 Certificate Regarding Schedules and Representations and Warranties.. 32
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8.2 Compliance by Seller and the Shareholders............................ 32
8.3 No Injunction, Etc................................................... 32
8.4 Operation in the Ordinary Course..................................... 33
8.5 Consents, Authorizations, Approval of Legal Matters.................. 33
8.6 Incumbency........................................................... 33
8.7 Certified Resolutions................................................ 33
8.8 Release of Liens..................................................... 33
8.9 Accuracy of Schedules................................................ 33
8.10 No Adverse Change.................................................... 34
8.11 Instruments of Transfer.............................................. 34
8.12 Opinion of Seller's Counsel.......................................... 34
8.13 Proceedings.......................................................... 34
8.14 Condition of Acquired Assets......................................... 34
8.15 Non-Complete Agreements.............................................. 34
8.16 Voice-Mail Services Agreement........................................ 35
ARTICLE A CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER........................ 35
9.1 Certificate Regarding Representations and Warranties................. 35
9.2 Compliance by Purchaser.............................................. 35
9.3 Certified Resolutions................................................ 35
9.4 No Injunction; Etc................................................... 35
9.5 Incumbency........................................................... 35
9.6 Certificates......................................................... 36
9.7 Opinion of Purchaser's Counsel....................................... 36
9.8 Proceedings.......................................................... 36
ARTICLE 10 POST CLOSING MATTERS................................................. 36
10.1 Employment of Employees.............................................. 36
10.2 Seller's Benefit Plans............................................... 36
10.3 Maintenance of Books and Records..................................... 36
10.4 Payments Received.................................................... 37
10.5 Covenant Not to Compete.............................................. 37
ARTICLE 11 INDEMNIFICATION...................................................... 38
11.1 Definitions.......................................................... 38
11.2 Agreement of Indemnitors to Indemnify................................ 39
11.3 Agreement of Purchaser to Indemnify.................................. 39
11.4 Procedures for Indemnification....................................... 40
11.5 Third Party Claims................................................... 40
11.6 Other Rights and Remedies Not Affected............................... 41
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11.7 Survival............................................................. 41
11.8 Time Limitations..................................................... 41
11.9 Subrogation.......................................................... 42
11.10 Purchaser's Right of Set-Off......................................... 42
ARTICLE 12 GENERAL PROVISIONS................................................... 43
12.1 Fees and Expenses.................................................... 43
12.2 Notices.............................................................. 43
12.3 Assignment; Binding Effect........................................... 44
12.4 No Benefit to Others................................................. 44
12.5 Headings, Gender, Person and Affiliate............................... 44
12.6 Counterparts......................................................... 45
12.7 Integration of Agreement............................................. 45
12.8 Time of Essence...................................................... 45
12.9 Governing Law........................................................ 45
12.10 Partial Invalidity................................................... 45
12.11 Investigation........................................................ 45
12.12 Public Announcements................................................. 45
12.13 Arbitration.......................................................... 46
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TABLE OF EXHIBITS
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Exhibit A Form of Non-Compete Agreement
Exhibit B Form of Voice Mail Services Agreement
Exhibit C Form of Xxxx of Sale
Exhibit D Form of Seller and Shareholders Opinion
Exhibit E Form of Purchaser Opinion
Exhibit F Map Defining Territory
Exhibit G Form of Consulting Agreement
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SCHEDULES
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Schedule 1.1(C) Contracts
Schedule 1.2.1 Excluded assets
Schedule 1.2.2 Excluded assets
Schedule 3.4 Allocation of Purchase Price
Schedule 5.3 Financial Statements
Schedule 5.4 Consignment Inventory
Schedule 5.5.1 Pagers
Schedule 5.5.2 Furniture and Fixtures
Schedule 5.5.3 Leases for Furniture, Fixtures and Equipment
Schedule 5.6.1 Office Leases
Schedule 5.7.1 Contracts
Schedule 5.7.2 List of Customers and Form of Customer Agreements
Schedule 5.7.3 Commitment for Capital Expenditures
Schedule 5.7.4 List of Terminations or Cancellations of Contracts
Schedule 5.8 Intellectual Property
Schedule 5.9 Insurance Matters
Schedule 5.11 Litigation Matters
Schedule 5.12 Absence of Changes
Schedule 5.15 Permits
Schedule 5.16.1 Taxes and Assessments Contests
Schedule 5.16.2 Federal and State Tax Disputes
Schedule 5.17.1 Employee Benefit Plans
Schedule 5.17.2 Employee Benefit Plans Compliance with Laws
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CROSS REFERENCES TO DEFINED TERMS
---------------------------------
TERM SECTION IN WHICH DEFINED
Accounts Receivable Section 1.2(f)
Acquired Asset(s) Section 1.1
Acquisition Documents Section 5.2
Agreement Preamble
Assumed Liabilities Section 2.1
Beneficiary Section 7.10(d)
Books and Records Section 1.1(f)
Business Preamble
Call One Section 1.2(h)
Call One Receivables Section 1.2(h)
CERCLA Section 5.10(c)
Code Section 5.17(g)
Collection Period Section 1.3(a)
Competing Business Section 8.5
Compiled Financials Section 3.3
Contract(s) Section 1.1(c)
CUE Section 1.1(l)
CUE Regional Affiliate Agreement Section 1.1(l)
Employee Benefit Plan Section 5.18(g)
Equipment Section 1.1(b)
Equipment Charges Section 7.10(b)(iii)
ERISA Section 5.17(g)
ERISA Affiliate Section 5.17(g)
ERISA Plan Section 5.17(g)
Excluded Assets Section 1.2
Excluded Liabilities Section 2.2
FCC Section 1.2
Financial Statements Section 5.3
Closing Section 4.1
Closing Date Section 4.1
Current Obligations Section 7.12
Effective Time Section 4.1
Furniture and Fixtures Section 1.1(h)
Future Services Receivables Section 1.1(m)
GAAP Section 3.3
Goods Contracts Section 5.7(a)(iii)
Governmental Authority Section 5.17(g)
Hazardous Materials Section 5.10(d)
Indebtedness Section 7.11
Indemnification Claim Section 9.1(a)
Indemnitee Section 11.1(h)
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Indemnitor Section 11.1(i)
Intellectual Property Section 1.1(e)
Inventory Section 1.1(d)
Labor Claims Section 5.14
Lease Agreement Section 1.4
Lease Payments Section 7.10(b)(vi)
Losses Section 9.1(d)
Nationslink Receivables Section 1.1(k)
Non-Compete Agreement Section 1.4
Obsolete Inventory Section 1.2(g)
Office Leases Section 1.1(a)
Ongoing Obligations Section 7.11
Payor Section 7.10(d)
Payee Section 7.10(d)
Permits Section 1.1(g)
Personal Property Taxes Section 7.10(b)(v)
Proration Items Section 7.10(a)
Purchaser Preamble
Purchase Price Section 3.1
Purchaser Indemnitee Section 11.1(c)
Purchaser Indemnitor Section 11.1(e)
Purchaser Indemnitor Section 11.1(e)
Purchaser Opinion Section 4.3(b)(vii)
RCRA Section 5.10(c)
Real Property Leases Section 5.6(b)
Real Property Taxes Section 7.10(b)(iv)
Receivables Proceeds Section 1.3(a)
Recipient Section 7.10(d)
Rental Charges Section 7.10(b)(ii)
Seller Preamble
Seller Indemnitees Section 11.1(b)
Seller Indemnitors Section 11.1(d)
Seller Opinion Section 4.3(a) (viii)
Services Contract Section 5.7(a) (iii)
Shareholder(s) Preamble
Territory Section 8.5
Third Party Claim Section 9.1(e)
Transfer Expenses Section 3.3
Utility Charges Section 7.10(b)(i)
Voice Mail Services Agreement Section 1.5
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT IS SUBJECT TO ARBITRATION
AS SET FORTH IN SECTION 12.13 HEREOF
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of this day of May, 1996, between SATELLINK PAGING INC., a Georgia
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corporation ("Purchaser"), C.R., INC., a Texas corporation ("Seller"), and XXXXX
XXXXXX, XXXXX XXXXXXX and XXX XXX XXXXXXX, AS TRUSTEE OF THE SAFETON TRUST,
dated October 1, 1992 (individually a "Shareholder" and collectively the
"Shareholders").
A. Seller is engaged in the business of distributing paging messages by
radio in the area set forth on EXHIBIT F, selling or leasing paging devices and
selling or leasing air time for the transmission of paging messages (the
"Business").
B. The Shareholders own all of the issued and outstanding capital stock of
Seller.
C. Purchaser desires to purchase from Seller certain of Seller's assets on
and subject to the terms and conditions contained in this Agreement.
D. Seller desires to sell to Purchaser certain of the Seller's assets on
and subject to the terms and conditions contained in this Agreement.
E. The Shareholders will directly benefit from Purchaser's purchase of
such Assets.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants, and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale of Acquired Assets. At the Closing (as hereinafter
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defined), on and subject to the terms and conditions of this Agreement, Seller
shall sell, assign, transfer, convey, and deliver to Purchaser, and Purchaser
shall purchase, acquire, and accept from Seller, all of the right, title, and
interest of Seller in and to (i) the Business (other than the Excluded Assets
(as hereinafter defined)), (ii) the name "C.R., Inc." and any other name or
names under which Seller has conducted the Business and all goodwill associated
therewith, and (iii) all of Seller's right, title and interest in and to the
following assets, properties, and rights of Seller, free and clear of all liens,
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claims, charges, security interests, and encumbrances of any kind or nature on
Seller's interest in such assets, properties and rights, other than Permitted
Encumbrances (as hereinafter defined), as the same shall exist at the Closing
Date (as hereinafter defined):
(a) Except as set forth in Section 1.3, all of Seller's rights in, to,
and under (i) Seller's office leases, together with all of Seller's right,
title, and interest in and to the fixtures and improvements, including
construction-in-progress, and appurtenances thereto, located on the real
property subject to such leases, and any and all assignable warranties of third
parties with respect thereto (the "Office Leases");
(b) All radio paging systems (including network connections to
affiliated systems), machinery, equipment, tools, computers, terminals, computer
equipment, office equipment, business machines, telephones and telephone
systems, parts, accessories, and the like, wherever located, reflected on the
books and records of Seller (even if carried at no value), and any and all
assignable warranties of third parties with respect thereto (the "Equipment");
(c) All of the contracts, airtime purchase agreements, leases,
warranties, commitments, agreements, arrangements and purchase and sales orders,
whether oral or written, pursuant to which Seller enjoys any right or benefit in
connection with the Business, whether or not reflected upon the books and
records of the Seller, together with the right of Seller to receive income in
respect of such contracts, leases, warranties, commitments, agreements,
arrangements, and purchase and sales orders on and after the Closing Date but
excluding any agreements with the Xxx Xxxxxx Company or Xxxxxx Xxxx, the
employment agreement with Xxxxx Xxxxxxx and the agreements listed and described
on SCHEDULE 1.1(C) hereto and excluding any leases for automobiles in which the
Seller is the named lessee (individually, a "Contract" and collectively, the
"Contracts");
(d) All stock of pagers and spare or replacement parts therefore,
wherever located, reflected on the books and records of Seller (the "Inventory")
excluding the Obsolete Inventory (as hereinafter defined), together with all
rights of Seller against suppliers of the Inventory including, without
limitation, Seller's rights under express or implied warranties with respect to
such Inventory and Inventory previously sold by Seller and Seller's rights to
receive refunds or rebates in connection with its purchase of Inventory;
(e) All patents, designs, art work, designs-in progress, formulations,
know-how, prototypes, inventions, trademarks, trade names, trade styles, service
marks, and copyrights owned or held by Seller and related to the Business; all
registrations thereof and applications therefor, both registered and
unregistered, foreign and domestic; all trade secrets or processes owned by or
belonging to Seller and related to the Business; all computer software
(including documentation and related object and, if applicable, source codes)
owned by or belonging to Seller and related to the Business; and all
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confidential or proprietary information that are either (i) owned by Seller and
related to the Business, whether or not reflected on the books and records of
Seller, or (ii) as to which Seller has rights as licensee, constituting all of
the intellectual property of Seller used exclusively in the Business (the
"Intellectual Property");
(f) All existing data, data bases, books, records, correspondence,
business plans and projections, records of sales, customer and vendor lists,
files, and papers in the possession of Seller and related to the Business;
including without limitation, all manuals and printed instructions of Seller
relating to the Acquired Assets (as hereinafter defined) and to the operation of
the Business (the "Books and Records");
(g) All licenses, permits, certificates, and governmental
authorizations held by Seller and related to the Business (the "Permits");
(h) All furniture, fixtures, and leasehold improvements, wherever
located, reflected on the books and records of the Seller (even if carried at no
value), and any and all assignable warranties covering such furniture, fixtures,
and leasehold improvements ("Furniture and Fixtures");
(i) All prepaid expenses (other than prepaid insurance premiums) of
Seller reflected on the books and records of Seller; all claims, demands, and
causes of action or recoveries from any third party arising from or out of any
Acquired Asset being purchased hereunder, including without limitation, rights
to returned or repossessed goods and rights as an unpaid vendor; and all other
assets used in connection with the Business (other than Excluded Assets of
Seller) wherever located, tangible or intangible, provided, however, that the
Acquired Assets shall not include, and Purchaser shall not acquire, any right,
title, or interest of Seller in or to the Excluded Assets of Seller (as defined
in Section 1.2 hereof);
(j) All accounts receivable, notes receivable and other monies due to
Seller from NationsLink, Ltd. ("NationsLink") for sales and deliveries of goods,
performance of services and other business transacted or for monies loaned (the
"NationsLink Receivables");
(k) All of Seller's rights and benefits pursuant to that certain
Regional Affiliate Agreement, dated August 20, 1990 between Seller and CUE
Paging Corporation ("CUE") including all amendments and modifications thereto
(the "CUE Regional Affiliate Agreement");
(l) All accounts receivable, notes and other receivables of Seller
arising out of the sale and delivery of goods, performance of services and other
business transacted where such sale, delivery or performance is to occur on or
after the Closing Date (the "Future Services Receivables");
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(m) All cash and cash equivalents, whether received before, on, or
after the Closing Date, in payment of the NationsLink Receivables or the Future
Services Receivables.
All of the items described in this Section 1.1 to be purchased by Purchaser
and which are not Excluded Assets as defined in Section 1.2 are hereinafter
collectively referred to as the "Acquired Assets."
As used herein, "Permitted Encumbrances" means (i) any lien, claim, charge
or encumbrance arising out of or securing any Assumed Liability and (ii) minor
imperfections in title that do not either individually or in the aggregate
materially and adversely interfere with the possession, use, or ownership of any
Acquired Asset.
1.2 Excluded Assets of Seller. Seller shall not sell and Purchaser shall
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not purchase or acquire and the Acquired Assets shall not include:
(a) Any cash and cash equivalents whether received before, on or after
the Closing Date, other than cash or cash equivalents received, whether before,
on or after the Closing Date, in payment of the NationsLink Receivables or the
Future Services Receivables;
(b) The assets of any employee benefit plan maintained by or covering
any employees of Seller or to which Seller has made any contribution;
(c) Seller's corporate franchise, stock record books, corporate record
books containing minutes of meetings of directors and stockholders, tax returns
and records, books of account and ledgers, and such other records having to do
with Seller's organization or stock capitalization;
(d) Any rights which accrue or will accrue to Seller under this
Agreement;
(e) Any rights to any of Seller's claims for any federal, state,
local, or foreign tax refund relating to any period ending prior to the Closing
Date;
(f) All accounts, notes or other receivables of Seller arising out of
the sale and delivery of goods, performance of services or other business
transacted where such sale, delivery or performance occurred prior to the
Closing Date, other than the NationsLink Receivables (the "Accounts
Receivable");
(g) All Inventory of Seller which is not in good working order and
saleable at prevailing market prices (the "Obsolete Inventory");
(h) All interests of Seller in Call One, Inc. ("Call One"), including
all notes receivable owed to Seller by Call One (the "Call One Receivables");
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(i) All interests of Seller in the pager being developed by
NationsLink;
(j) All interests of Seller in pagers leased by Seller to Mobilemedia,
as specifically listed and described on SCHEDULE 1.2.1;
(k) All interest in and rights of Seller in: any agreements with the
Xxx Xxxxxx Company or Xxxxxx Xxxx, the employment agreement with Xxxxx Xxxxxxx,
the agreements listed on Schedule 1.1(c), and all leases of automobiles in which
the Seller is the named lessee;
(l) All interest of Seller in, to or under any policies of insurance
insuring the business, properties and assets of Seller prior to the Closing
Date, and all interest of Seller in and to any unearned or returned premium in
respect of such policies; and
(m) The assets, properties, and rights specifically listed and
described on SCHEDULE 1.2.2.
All of the assets described in this Section 1.2 are hereinafter
collectively referred to as the "Excluded Assets."
1.3 Collection of Accounts Receivable. Purchaser and Seller acknowledge
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and agree that the Acquired Assets do not include the Accounts Receivable. In
order to facilitate the transaction provided for herein, Purchaser has agreed to
undertake the collection of the Accounts Receivable for the benefit and account
of Seller on the following terms and conditions:
(a) During the period beginning on the Closing Date and ending one
hundred eighty (180) days after the Closing Date (the "Collection Period"),
Purchaser shall, as agent for Seller, collect the Accounts Receivable (other
than the Account Receivable from Mobilemedia and any other Accounts Receivable
that are more than ninety (90) days past due on the Closing Date) and except as
provided in Section 11.10, set aside and hold in trust for the benefit of Seller
all customer payments received by Purchaser in respect of the Accounts
Receivable (the "Receivables Proceeds"). Purchaser shall not have any
obligation to collect any Accounts Receivables after the expiration of the
Collection Period and shall at such time return to Seller all records relating
to any Accounts Receivable that remain uncollected. Seller alone shall pursue
collection thereof following the expiration of the Collection Period. Except as
otherwise set forth herein, each party shall be responsible for any and all of
its collection expenses, including attorneys' fees and the fees and commissions
of collection agencies.
(b) Purchaser shall use reasonable efforts during the Collection
Period to collect the Accounts Receivable in a manner consistent with the
policies and practices used by Purchaser in the collection of its own accounts
receivable and in compliance with all applicable laws, rules and regulations;
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provided, however, Purchaser shall have no obligation to institute any legal
proceedings or engage any attorney, collection agency or other person or entity
to collect any Account Receivable.
(c) If a customer does not specifically identify an invoice, or goods
or services that Purchaser can clearly trace to an invoice, when making a
payment, taking a credit or disputing an Account Receivable, then Purchaser
shall deem all collections from, credits to and disputes by such Customer to be
applicable to invoices in order of maturity (e.g., the first collection shall be
deemed to be payments of the oldest invoices).
(d) If a customer disputes an obligation to pay any Account Receivable
and Purchaser determines, in good faith, that Purchaser, as agent for Seller
should (i) accept the return of any goods represented by such Account
Receivable, (ii) extend the time of payment of, or compromise or settle for
cash, credit or otherwise upon any terms, such Account Receivable, and (iii) in
connection with any of the acts set forth in clauses (i) or (ii) above, release
the customer from any obligation with respect to such Account Receivable, or if
a customer directs that payment be applied to outstanding invoices for Accounts
Receivable other than in order of maturity or to invoices of Purchaser in
preference to outstanding invoices for Accounts Receivable, then Purchaser shall
give Seller written notice of such determination. If Purchaser receives from
Seller a written objection to the proposed action within ten (10) days of the
date of such notice, then Purchaser shall not take such action and, in the case
of a payment directed by the customer, shall not apply the payment as so
directed but shall apply such payment first to outstanding invoices for the
Accounts Receivable in regular order of maturity prior to applying such payment
to any other invoices. If Purchaser does not receive from Seller a written
objection to the proposed action within such ten (10) day period, then Purchaser
may (but shall not be obligated to) take such action or apply such payment as
directed. If the proposed action contemplates that Purchaser accept the return
of any goods represented by any Account Receivable, then, at the option of
Purchaser, Purchaser may either (i) retain such goods, in which case title to
such goods shall be deemed to have passed to Purchaser and Purchaser shall pay
to Seller an amount equal to the value of the Account Receivable represented by
such goods, or (ii) return such goods to Seller at Seller's risk and expense.
(e) If a customer disputes its obligation to pay any Account
Receivable and Purchaser determines, in good faith, that Purchaser should
institute legal proceedings against such customer to collect such Account
Receivable, then Purchaser shall give Seller written notice of such
determination. If Purchaser receives the written authorization of Seller to
institute such proceedings within ten (10) days after the date of such notice,
then Purchaser may (but shall not be obligated to) institute such proceedings.
If Purchaser does not receive such authorization within such ten (10) day
period, then Purchaser shall not institute such proceedings.
(f) Seller hereby constitutes and appoints Purchaser as the attorney-
in-fact of Seller to exercise at any time any and all of the following powers:
to receive, open and dispose of all mail addressed to Seller and reasonably
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believed by Purchaser to relate to the Accounts Receivables, and notify the
postal authorities to change the address for delivery of all mail addressed to
Seller and reasonably believed by Purchaser to relate to the Accounts
Receivables to such address as Purchaser may designate (provided that items not
relating to the Accounts Receivables shall be returned to Seller); to endorse
the name of Seller on any checks, money orders, or other evidences of
indebtedness that Purchaser receives in payment of the Accounts Receivables; to
sign the name of Seller on any invoices, documents, drafts against and notices
to account debtors or obligators of Seller, assignments and requests for
verification of accounts in each case relating to the Accounts Receivables; to
execute proofs of claim and loss relating to the Accounts Receivables under
insurance policies or otherwise, to execute releases relating to the Accounts
Receivables; and to do all other acts and things that Purchaser believes in good
faith to be necessary or advisable to collect the Accounts Receivables in
accordance with this agreement. The appointment of Purchaser as the attorney-
in-fact of Seller is coupled with an interest and shall be irrevocable during
the collection period. All acts of Purchaser as the attorney-in-fact of Seller
are hereby ratified and approved, and Purchaser shall not have any liability for
any acts of commission or omission, for any error of judgment or from any
mistake of fact or law; provided, however, the foregoing shall not eliminate or
limit the liability of Purchaser for acts or omissions that constitute gross
negligence, willful and intentional misconduct or a violation of law.
(g) Ninety (90) days after the commencement of the Collection Period
and within ten (10) days after the end of the Collection Period, Purchaser shall
pay to Seller an amount equal to the Receivables Proceeds collected by Purchaser
together with interest paid on such amount of the Receivables Proceeds by virtue
of the deposit of such amount in an interest bearing account as hereinafter
provided, less any amounts set-off against the Receivables Proceeds as permitted
in Section 11.10 below, and less amounts paid by Purchaser for the account of
Seller as provided in Section 1.3(i) below. Purchaser shall not be obligated to
deliver to Seller any original checks, drafts or other evidences of indebtedness
received by Purchaser. Purchaser shall deposit all Receivables Proceeds in a
segregated interest bearing account (the "Escrow Account") until paid to or for
the account of Seller or until set-off against as herein provided. All funds in
the Escrow Account shall be held for the benefit of Seller, subject to the set-
off rights of Purchaser set forth in Section 11.10. If any of the Accounts
Receivables includes a specific charge for any tax payable to any governmental
tax authority, Purchaser may pay the amount of such charge to the proper taxing
authority for the account of Seller.
(h) Purchaser shall not have any liability for delay of any kind
occurring in the settlement, collection or payment of any Account Receivables or
any instrument received in payment thereof or any damage resulting therefrom,
and Seller shall have no right, whether by defense, set-off or otherwise,
against Purchaser for the failure to collect any Account Receivable. Except as
specifically set forth elsewhere in this Agreement, Purchaser does not assume
any of Seller's obligations under any contract or agreement relating to any
account receivable and shall not be responsible or liable in any way for the
performance by Seller of any of the terms and conditions thereof.
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(i) At the request of Seller, but subject to the prior right of
Purchaser to set-off against the Receivables Proceeds as provided in Section
11.10, Purchaser shall pay out of the Receivables Proceeds and for the account
of Seller all trade accounts payable first billed to Seller after the Closing
Date and all Proration Items (as hereinafter defined) that are the
responsibility of Seller. Seller shall notify Purchaser in writing of any
payments to be made by Purchaser pursuant to this Section 1.3(i). Purchaser
shall make such payment, to the extent funds are available from the Receivables
Proceeds, as soon as commercially practical following its receipt of such
written notice. In making such payment, Purchaser shall act solely as Seller's
agent and Purchaser does not and is not deemed to become liable for the
obligation to be paid.
(j) On the tenth (10th) day of each month during the Collection Period
and on the tenth (10th) day after the end of the Collection Period, Purchaser
shall provide to Seller a report setting forth the Accounts Receivable collected
in the preceding month, the Accounts Receivable remaining outstanding, all
amounts of the Receivables Proceeds against which Purchaser asserted or claimed
a right of set-off during such preceding month as herein permitted, and all
amounts paid during such month for the account of Seller as provided in Section
1.3(i) above. Notwithstanding anything to the contrary expressed or implied
herein, Seller alone shall collect the Account Receivable existing as of the
Closing Date from Mobilemedia and any Account Receivable that is more than
ninety (90) days past due as of the Closing Date.
1.4 Non-Compete Agreements of Shareholders. At the Closing each
---------------------------------------
Shareholder shall enter into, execute and deliver a Non-Compete Agreement in the
form attached as EXHIBIT A hereto (the "Non-Compete Agreements").
1.5 Call One Agreement. At the Closing, Seller shall cause Call One, Inc.
-------------------
to enter into, execute and deliver the Voice Mail Services Agreement attached
hereto as EXHIBIT B (the "Voice Mail Services Agreement").
1.6 Interest in Pagers. Purchaser and Sellers are each shareholders in
-------------------
NationsLink, which owns the rights to the design of a paging receiver. In order
that Seller may return its interest in such pager while transferring to
Purchaser, as part of the Acquired Assets, Seller's other interests in
NationsLink, Purchaser and Seller agree to use their best efforts to cause to be
formed not later than sixty (60) days following the Closing Date a new entity
and to cause NationsLink to transfer to such new entity all of NationsLink's
right, title and interest in and to such pager and all designs relating thereto.
Such new entity shall be formed in a manner substantially identical to
NationsLink, shall have articles of incorporation, bylaws, agreements among its
shareholders and other documents related to its organization and governance
substantially identical to the comparable documents of NationsLink and all
equity interests in such new entity shall be owned and held by the same owners
and in the same percentages as the equity interests in NationsLink are owned and
held.
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1.7 License of Software. From and after the Closing Date Seller shall
--------------------
have a paid up, royalty free, non-exclusive license to use solely for its own
account the billing and inventory software known as "CRISYS" which is among the
Intellectual Property included in the Acquired Assets. Purchaser shall have no
obligation to update, enhance, modify or otherwise improve such software in the
hands of Seller. Seller may make copies of such software only for the purpose
of preserving the software and making back-up copies thereof or in connection
with enhancements or modifications thereto undertaken by Seller. Seller shall
be under no obligation to make available to Purchaser any enhancements or
modifications to such software undertaken by Seller. Seller may use the
software only for its own account, may not use the software for the purpose of
processing the billing or inventory data of others, and may not transfer or
assign, in whole or in part, the software or any of Seller's rights as licensee
thereof under this Agreement to any person or entity other than a person or
entity that acquires substantially all of the business and assets of Seller or
all of Seller's outstanding capital stock.
ARTICLE 2
ASSUMPTION OF LIABILITIES
2.1 Assumption of Liabilities of Seller. Subject to Section 2.2 hereof,
------------------------------------
as of the Closing Date, Purchaser shall assume responsibility for the
performance and satisfaction of the executory obligations and liabilities of
Seller arising from and after the Effective Time pursuant to (a) the Office
Leases, (b) the Permits, (c) the CUE Regional Affiliate Agreement, (d) the
Service Contracts and (e) the Contracts, but excluding any obligations or
liabilities arising from or relating to any breach or violation of the Office
Leases, the Permits, the CUE Regional Affiliate Agreement, or the Contracts by
Seller or default thereunder by Seller which occur prior to the Closing Date.
The executory obligations and liabilities of Seller specifically assume pursuant
to this Section 2.1 are hereinafter referred to as the "Assumed Liabilities."
The parties acknowledge that they have agreed that Seller may keep and retain
monies paid prior to the Closing Date as deposits under Service Contracts, which
deposits are in the amount of or measured by reference to the last month's
rental under such Service Contracts. Purchaser agrees that, in fulfilling the
executory obligations under such Service Contracts, Purchaser will afford to
each customer thereunder who has paid such a deposit a credit in the amount of
the deposit so paid and will not require payment by such customer of service or
other fees to replace such deposit.
2.2 Excluded Liabilities of Seller. Purchaser shall not assume or become
-------------------------------
liable for any obligations, commitments, or liabilities of Seller, whether known
or unknown, absolute, contingent, or otherwise, and whether or not related to
the Acquired Assets, except for the liabilities specifically described in
Section 2.1 above (the obligations and liabilities of Seller not assumed by
Purchaser are hereinafter referred to as the "Excluded Liabilities"). Without
limiting the generality of the foregoing, Excluded Liabilities shall include any
liabilities related to or arising out of Excluded Assets.
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ARTICLE 3
CALCULATION AND PAYMENT OF PURCHASE PRICE
3.1 Purchase Price. The aggregate consideration to be paid to Seller for
---------------
the sale, transfer, and conveyance of the Acquired Assets, and the covenant not
to compete set forth in Section 10.5 hereof (the "Purchase Price") shall be FIVE
MILLION SEVEN HUNDRED THOUSAND DOLLARS ($5,700,000).
3.2 Payment of Purchase Price. Subject to the fulfillment of the
--------------------------
conditions set forth herein, on the Closing Date Purchaser shall pay the
Purchase Price to Seller as follows:
(a) For the account of Seller, Purchaser shall pay in full all Current
Obligations (as hereinafter defined) of Seller to third parties as set forth in
Section 7.12 hereof by check or wire transfer to such third party account(s)
designated in writing by Seller; and
(b) Purchaser shall pay the balance of the Purchase Price by wire
transfer in immediately available funds to an account designated in writing by
Seller.
3.3 Transfer Expenses. Seller shall pay any sales and use, transfer or
------------------
recording, documentary, or other taxes or charges levied on the transfer and
assignment of the Acquired Assets (the "Transfer Expenses"). All Inventory
included in the Acquired Assets shall be claimed as exempt from sales or use tax
by Purchaser and Purchaser shall furnish Seller at the Closing with sales tax
exemption certificates.
3.4 Allocation of Purchase Price. The Purchase Price shall be allocated
-----------------------------
among the covenant not to compete set forth in Section 10.5 and the Acquired
Assets as set forth on SCHEDULE 3.4 in accordance with the provisions contained
in Treasury Regulation Section 1.1060-1T(d), provided, however, that for a
period of sixty (60) days after the Closing Date Purchaser shall have the right
to modify the allocation set forth on SCHEDULE 3.4 to reflect the results of an
audit to be conducted by Purchaser and/or Purchaser's independent auditor. Any
such modification shall be submitted in writing to Seller within sixty (60) days
of the Closing Date. The parties agree to be bound by such allocation and to
report the transaction contemplated herein for federal income tax purposes in
accordance with such allocation. In furtherance of the foregoing, the parties
hereto agree to execute and deliver Internal Revenue Service Form 8594
reflecting such allocation.
ARTICLE 4
PROCEDURE FOR CLOSING
4.1 Time and Place of Closing. The closing for the purchase and sale
--------------------------
contemplated by this Agreement (the "Closing") shall be held at the offices of
Xxxxxxxx Xxxxxxx, NationsBank Plaza, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx
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30308 on June 3, 1996 commencing at 9:00 a.m., Atlanta time, or at such other
time and place as the parties hereto may agree in writing (the date on which the
Closing actually occurs is hereinafter referred to as the "Closing Date").
Subject to the consummation of the Closing on the Closing Date, the sale,
assignment, transfer, and conveyance to Purchaser of the Acquired Assets will be
effective as of 12:01 a.m. Eastern Daylight Time on May 31, 1996 (the "Effective
Time").
4.2 Condition to Closing. Purchaser's obligations hereunder shall be
--------------------
conditioned on Purchaser's receipt prior to the Closing of Uniform Commercial
Code searches of filings made pursuant to Article 9 thereof in all jurisdictions
where any of the Acquired Assets are located, in form, scope, and substance
reasonably satisfactory to Purchaser and its counsel, which searches shall
reflect the release or termination of liens, claims, security interests, or
encumbrances against any of the Acquired Assets disclosed thereby, and to the
extent any such release or termination is not reflected of record, Purchaser
shall have received evidence satisfactory to it, that all such liens and
encumbrances against the Acquired Assets have been released or terminated prior
to or at the Closing or that the underlying obligations have been paid in full
pursuant to Section 8.6.
4.3 Transactions at the Closing. At the Closing, each of the following
----------------------------
items shall be delivered:
(a) Seller shall deliver (or cause to be delivered) to Purchaser the
following:
(i) a xxxx of sale in the form attached hereto as EXHIBIT C
executed by Seller;
(ii) the Non-Compete Agreements in the form attached as EXHIBIT
A hereto executed by each of the Shareholders;
(iii) the Voice Mail Services Agreement in the form attached as
EXHIBIT B hereto executed by Call One, Inc.;
(iv) a certificate of incumbency of the Seller executed by a
Secretary or Assistant Secretary thereof listing the officers authorized to
execute this Agreement and certifying the authority of each such officer to
execute the agreements, documents, and instruments on behalf of Seller in
connection with the consummation of the transactions contemplated herein;
(v) a certificate of the Secretary of Seller containing a true
and correct copy of the resolutions duly adopted by the board of directors
and shareholders of Seller approving and authorizing each Acquisition
Document (as hereinafter defined) and the transactions contemplated hereby
and thereby certifying that such resolutions have not been rescinded,
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revoked, modified, or otherwise affected and remain in full force and
effect;
(vi) the opinion of counsel to Seller and the Shareholders in
substantially the form of EXHIBIT D hereto (the "Seller Opinion");
(vii) all consents and waivers that are required for the
assignment of the Contracts, Permits, Intellectual Property, Office Leases,
and other agreements and assets or otherwise required for the execution,
delivery, and performance of this Agreement by Seller;
(viii) certificates of existence or certificates of good
standing of Seller, as of a date within twenty (20) days prior to the
Closing Date, from the States of Texas and Louisiana;
(ix) such other evidence of the performance by Seller of all
covenants and the satisfaction by Seller of all conditions required by this
Agreement to be performed or satisfied by Seller at or prior to the Closing
Date as Purchaser or its counsel may reasonably require.
The documents and certificates to be delivered hereunder by or on behalf of
Seller on the Closing Date shall be in form and substance reasonably
satisfactory to Purchaser and its counsel.
(b) Subject to the receipt and sufficiency of the items set forth in
Section 4.2(a) above, Purchaser shall deliver to or for the account of Seller
the following:
(i) the Purchase Price as set forth in Section 3.2;
(ii) a certificate executed by the Secretary of Purchaser
containing a true and correct copy of resolutions duly adopted by
Purchaser's Board of Directors approving and authorizing this Agreement and
each of the other Acquisition Documents (as hereinafter defined) to which
Purchaser is a party and each of the transactions contemplated hereby and
thereby certifying that such resolutions have not been rescinded, revoked,
modified, or otherwise affected and remain in full force and effect;
(iii) a certificate of incumbency of Purchaser executed by the
President and attested by the Secretary or Assistant Secretary of Purchaser
listing the officers of Purchaser authorized to execute this Agreement and
the other Acquisition Documents to which Purchaser is a party and the
instruments of assumption on behalf of Purchaser and certifying the
authority of each such officer to execute the agreements, documents, and
instruments on behalf of Purchaser in connection with the consummation of
the transactions contemplated herein;
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(iv) the opinion of counsel to Purchaser in substantially the
form of EXHIBIT E hereto (the "Purchaser Opinion");
(v) certificates of existence or certificates of good standing
of Purchaser, as of a date within twenty (20) days prior to the Closing
Date, from the State of Georgia; and
(vi) the Non-Compete Agreements executed by Purchaser;
(vii) the Voice Mail Services Agreement executed by Purchaser;
and
(viii) such other evidence of the performance by Purchaser of
all covenants and satisfaction by Purchaser of all of the conditions
required by this Agreement to be performed or satisfied by Purchaser at or
before the Closing Date, as Seller or its counsel may reasonably require.
The documents and certificates to be delivered to Seller hereunder by or on
behalf of the Purchaser on the Closing Date shall be in form and substance
reasonably satisfactory to Seller and its counsel.
4.4 Certain Consents.
----------------
Except for the consent of CUE to the assignment to Purchaser of the
CUE Regional Affiliate Agreement, the receipt of which is a condition precedent
to the obligations of Purchaser hereunder, to the extent that the rights of
Seller under any agreement, Contract, commitment, Permit, or other Acquired
Asset to be assigned to Purchaser by Seller hereunder may not be assigned
without the consent of another person which has not been obtained prior to the
Closing Date, and which is materially important to the ownership, use or
disposition by Purchaser of an Acquired Asset, this Agreement shall not
constitute an agreement to assign the same if an attempted assignment would
constitute a breach thereof or be unlawful, and Seller, at its expense, shall
use its best efforts to obtain any such required consent(s) as promptly as
possible. If any such consent shall not be obtained or if any attempted
assignment would be ineffective or would materially impair Purchaser's rights
under the Acquired Asset in question so that Purchaser would not in effect
acquire the benefit of all such rights, Seller, to the maximum extent permitted
by law and the specific Acquired Asset and at Seller's expense, shall, at its
expense, act after the Closing as Purchaser's agent in order to obtain for
Purchaser the benefits thereunder, and Seller shall cooperate, to the maximum
extent permitted by law and the specific Acquired Assets, with Purchaser in any
other reasonable arrangement designed to provide such benefits to Purchaser,
including any sublease, subcontract or similar arrangement. Notwithstanding
anything to the contrary stated herein, in using its best efforts to obtain any
such consent or in acting as Purchaser's agent after the Closing, Seller shall
not be required to pay other than nominal amounts to third parties.
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4.5 Further Assurances. Seller and the Shareholders from time to time
-------------------
after the Closing Date, at Purchaser's request, shall execute, acknowledge, and
deliver to Purchaser such other instruments of conveyance and transfer and will
take such other actions and execute and deliver such other documents,
certifications, and further assurances as Purchaser may reasonably require in
order to vest more effectively in Purchaser, or to put Purchaser more fully in
possession of, any of the Acquired Assets or to better enable Purchaser to
complete, perform, or discharge any of the Assumed Liabilities. Each of the
parties hereto will cooperate with the other and execute and deliver to the
other parties hereto such other instruments and documents and take such other
actions as may be reasonably requested from time to time by any other party
hereto as necessary to carry out, evidence, and confirm the intended purposes of
this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller represents and warrants to Purchaser that:
5.1 Organization and Qualification. Seller is a corporation duly
-------------------------------
organized, validly existing, and in good standing under the laws of the State of
Texas.
5.2 Authority. Seller and each Shareholder has full power and authority
----------
to enter into this Agreement and the agreements contemplated hereby, or
respectively executed by it in connection herewith (collectively, this Agreement
and such other agreements shall be referred to hereinafter as the "Acquisition
Documents"), and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance by Seller and each Shareholder of each
of the Acquisition Documents to which it is a party has been duly and validly
authorized and approved by all necessary action on the part of Seller and each
Shareholder. Each of the Acquisition Documents to which Seller is a party is
the legal, valid, and binding obligation of Seller, enforceable against Seller
in accordance with its terms, except as enforceability may be limited by
applicable equitable principles (whether applied in a proceeding at law or in
equity) or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws affecting creditors' rights generally, to the exercise of judicial
discretion in accordance with general equitable principles, and to equitable
defenses that may be applied to the remedy of specific performance. Neither the
execution and delivery by Seller and each Shareholder of any of the Acquisition
Documents to which it is a party nor the consummation by Seller and each
Shareholder of the transactions contemplated thereby will (i) violate the
Articles of Incorporation or Bylaws of Seller or the trust instrument of the
Safeton Trust, (ii) violate any provisions of law or any order of any court or
any governmental entity to which Seller and each Shareholder is subject, or by
which the Acquired Assets may be bound if such violation would have a material
adverse effect on the operations of Seller, (iii) conflict with, result in a
breach of, or constitute a default under any indenture, mortgage, lease,
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contract, warranty, agreement, arrangement, purchase or sale order or other
instrument to which Seller is a party or by which it or any of the Acquired
Assets may be bound other than as disclosed to Purchaser, or (iv) result in the
creation of any lien, charge, or encumbrance upon any of the Acquired Assets or
increase or adversely affect the obligations of Seller under any of the Assumed
Liabilities.
5.3 Financial Statements. Attached as SCHEDULE 5.3 are true, correct, and
---------------------
complete copies of the unaudited balance sheet and the related statements of
income and cash flows for Seller as at and for the fiscal years ended December
31, 1992, 1993, 1994 and 1995 (collectively, the "Financial Statements").
Except as specifically disclosed on SCHEDULE 5.3, the Financial Statements have
been prepared from the books and records of Seller, and present fairly in all
material respects the financial position and results of operation of Seller on a
combined basis as at and for the periods indicated. Except as set forth on
SCHEDULE 5.3, Seller has not received any advice or notification from its
independent certified public accountants that Seller has used any improper
accounting practice that would have the effect of not reflecting or incorrectly
reflecting in the Financial Statements or the books and records, any properties,
assets, liabilities, revenues, or expenses. Except as specifically disclosed on
SCHEDULE 5.3, the Financial Statements do not contain any items of special or
nonrecurring income, or other income not earned in the ordinary course of
business, individually in excess of $1,000 and in the aggregate in excess of
$10,000. Other than as identified on Schedule 5.3, the books, records, and
accounts of Seller accurately and fairly reflect, in reasonable detail in all
material respects, the transactions and the assets and liabilities of Seller.
Seller has not engaged in any transaction, maintained any bank account, or
used any of the funds of Seller, except for transactions, bank accounts, and
funds which have been and are reflected in the normally maintained books and
records of Seller.
5.4 Inventories. All Inventory reflected on the Financial Statements, or
------------
acquired since the date thereof at the time such Inventory was delivered to
Seller's customers: (a) was acquired and has been maintained in the ordinary
course of the Business; (b) is of good and merchantable quality, consists of a
quality, quantity and condition usable, leasable or salable in the ordinary
course of the Business; (c) is valued at the lesser of cost or net realizable
value; and (d) is not subject to any write-down or write-off. Seller is not
under any liability or obligation with respect to the return of Inventory in the
possession of wholesalers, retailers or other customers. Except as shown on
SCHEDULE 5.4, none of the Inventory is held by Seller on consignment from
others.
5.5 Personal Property.
-----------------
(a) SCHEDULE 5.5.1 contains a true and correct list of all pagers
owned by Seller, and SCHEDULE 5.5.2 contains a true and correct list of all
Furniture and Fixtures and all other items of personal property (excluding items
of Furniture and Fixtures and other personal property having a value of less
than $1,000 individually, or $10,000 in the aggregate), which are owned by
Seller.
-15-
(b) SCHEDULE 5.5.3 contains a list of all leases for Equipment,
Furniture and Fixtures, or other items of personal property (except
miscellaneous leases having an aggregate value, if capitalized, of less than
$10,000) leased by Seller and included in the Acquired Assets, excluding leases
for pagers where the Seller is the lessor. True and correct copies of each
lease listed on SCHEDULE 5.5.3 and any amendments, extensions, and renewals
thereof are attached thereto. Each of the leases described on SCHEDULE 5.5.3 is
in full force and effect and there are no existing defaults or events of
default, real or claimed, or events which with notice or lapse of time or both
would constitute defaults. No rights of Seller under such leases have been
assigned or otherwise transferred as security for any obligation of Seller.
Except as described on SCHEDULE 5.5.3, all such leases are fully assignable
without the consent of any third party.
(c) All of the Equipment, Furniture and Fixtures and other personal
property owned or leased by Seller is in good operating condition, except that
Seller makes no representation as to the condition of pagers in the hands of
lessees.
5.6 Real Property.
--------------
(a) Seller does not own any real property.
(b) A true and correct copy of the Office Leases and any amendments,
extensions, and renewals thereof have been delivered to the Purchaser and are
attached as SCHEDULE 5.6.1. The Office Leases are in full force and effect and
there is no existing default or event of default of a material nature, real or
claimed, or event which with notice or lapse of time or both would constitute a
default thereunder by Seller or any other party to the Office Leases. The
assignment of the Office Leases to Purchaser shall not cause a breach, default,
or event of default thereunder.
(c) Seller has received no written notice from governmental
authorities alleging that the improvements on any property that is subject to
the Office Leases are in violation of any applicable use and occupancy laws, use
restrictions, building ordinances, zoning ordinances and health and safety
ordinances.
(d) Seller has not received any written notice of any pending or
threatened condemnations, planned public improvements, annexation, special
assessments, zoning or subdivision changes, or other adverse claims affecting
any property that is subject to the Office Leases.
(e) To Seller's knowledge there is no unrecorded private restrictive
covenant on all or any portion of the property that is subject to the Office
Leases which prohibits the current use of the such property.
(f) All Permits required for Seller's occupancy and operation of any
property that is subject to the Office Leases have been obtained if the failure
to obtain such Permit would have a material adverse effect, and are in full
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force and effect, and Seller has received no notices of violations in connection
with such items.
(g) Seller does not have in its possession any studies or reports
which indicate any defects in the design or construction of any of the
improvements on the property that is subject to the Office Leases and to
Seller's knowledge, no such defects exist.
5.7 Contracts.
---------
(a) SCHEDULE 5.7.1 contains a true and correct list of all Contracts
other than Service Contracts otherwise listed on SCHEDULE 5.5.1 and Contracts
otherwise listed on SCHEDULES 5.5.3 AND 5.8, together with a true and correct
copy (and, if oral, a description) of each such Contract that (i) has a duration
of twelve (12) months or more, (ii) requires or could require any party thereto
to pay $1,000 or more, or (iii) is between Seller and any officer, stockholder,
director, employee, or affiliate of Seller, and all modifications, amendments,
renewals, or extensions thereof (excluding any management agreement with The Xxx
Xxxxxx Company or Xxxxxx Xxxx or employment agreement with Xxxxx Xxxxxxx which
contracts are not transferred to or assumed by Purchaser hereunder). A true and
correct list of all Service Contracts is set forth in SCHEDULE 5.5.1. True and
complete copies of all such Service Contracts have heretofore been made
available to Purchaser. Each of the Contracts listed or described in SCHEDULES
5.7.1 or 5.5.1 was entered into prior to the Closing Date in the ordinary course
of business on terms substantially consistent with such Seller's practice prior
thereto. Except as listed on SCHEDULES 5.5.1, 5.5.3, 5.6.1, 5.7.1, AND 5.8,
Seller is not a party to any written or legally binding Contract of the
following type:
(i) agreement, contract, or commitment with any present or former
employee or consultant or for the employment of any person;
(ii) agreement, contract, or commitment for the future purchase of, or
payment for, supplies or products, or for the performance of services by a third
party which supplies, products or services are used in the conduct of its
business involving in any one case $1,000 or more;
(iii) agreement, contract or commitment to provide paging services or
to sell, lease or otherwise provide paging devices, or to sell, lease or
otherwise provide air time (each a "Services Contract");
(iv) distribution, dealer, representative, or sales agency agreement,
contract, or commitment relating to the Business;
(v) lease under which Seller is lessor relating to the Acquired
Assets or any property at which the Acquired Assets are located;
-17-
(vi) note, debenture, bond, equipment trust agreement, letter of
credit agreement, loan agreement, or other contract or commitment for the
borrowing or lending of money relating to the Business or agreement or
arrangement for a line of credit or guarantee, pledge, or undertaking of the
indebtedness of any other person relating to its business;
(vii) agreement, contract, or commitment for any charitable or
political contribution;
(viii) agreement, contract, or commitment limiting or restraining
Seller from engaging or competing in any manner or in any business, nor, to the
knowledge of Seller is any employee of Seller subject to any such agreement,
contract, or commitment; or
(ix) material agreement, contract, or commitment relating to its
business not made in the ordinary course of business.
(b) SCHEDULE 5.7.3 contains a true and correct list of all commitments
for capital expenditures related to the Business that have been approved or made
prior to the date of this Agreement in excess of $1,000 by Seller and that
remain outstanding as of the date hereof.
(c) Except as set forth on SCHEDULES 5.7.1 and 5.7.2 and except for
default by certain customers under Service Contracts, each of the Contracts is
in full force and effect and there exists no breach or violation of or default
under any of such Contracts by Seller or, to the knowledge of Seller any other
party to such Contracts, or any event which, with notice or the lapse of time,
or both, will create a breach or violation thereof or default thereunder by
Seller or, to the knowledge of Seller, any other party to such Contracts.
Except as set forth on SCHEDULES 5.7.1 and 5.7.2, each Contract listed therein
is fully assignable without the consent of any third party.
(d) Except as indicated on SCHEDULE 5.7.4, there exists no actual or,
to the knowledge of Seller, any threatened termination, cancellation, or
limitation of, or any amendment, modification, or change to any Contract or
group of Contracts (including in each case Service Contracts), which would have
a material adverse effect on the business or condition, financial or otherwise,
of the Business.
(e) Seller has not granted any power of attorney affecting or with
respect to the Business or the Acquired Assets that remains outstanding.
5.8 Intellectual Property. SCHEDULE 5.8 contains a true and correct list
----------------------
of all Intellectual Property used by Seller or any affiliate of Seller in the
conduct of the Business, containing a brief description of each item of
Intellectual Property and the nature of Seller's interest therein. The Acquired
Assets include and, upon the purchase of those assets, Purchaser will own or
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have the uncontested right to use all patents, designs, art work, designs-in-
progress, formulations, know-how, inventions, trademarks, trade names, trade
styles, service marks, copyrights, manufacturing processes, and confidential or
proprietary information necessary for the conduct of the Business as presently
conducted. No claim is pending or, to the knowledge of Seller threatened, and
Seller has not received notice that the conduct of the Business (including
without limitation, Seller's use of any Intellectual Property) infringes upon or
conflicts with any rights claimed therein by any third party, nor is Seller
aware of any unasserted claim the assertion of which is probable. No use by
Seller of any Intellectual Property licensed to it violates the terms of any
agreement pursuant to which it is licensed. No claim is pending, or to the
knowledge of Seller threatened, which alleges that any Intellectual Property
owned or licensed by Seller for use in the Business or which Seller otherwise
has the right to use is invalid or unenforceable by Seller, nor is Seller aware
of any such claim that is unasserted, but the assertion of which is probable.
With respect to the Business, Seller does not manufacture products which are the
subject of patents, patent applications, copyrights, copyright applications,
trademarks, trademark applications, trade styles, service marks, or trade
secrets owned by or licensed from third parties. Except as shown on SCHEDULE
5.8, no royalties or fees are payable by Seller to anyone for use of the
Intellectual Property. True, correct, and complete copies of all agreements
pursuant to which Seller has any license or right to use any Intellectual
Property are attached to SCHEDULE 5.8. All such agreements are in full force
and effect and there are no existing defaults or events of default, real or
claimed, or events which with or without notice or lapse of time or both would
constitute defaults under such agreements that would give the non-defaulting
party a right to terminate such agreement or a right to receive any payment
pursuant to such agreement. With respect to the Business, Seller has not
received any notice that any operation or machinery employed by Seller, violates
or infringes upon any claims of any United States or foreign patent or patent
application owned or held by any third party, nor is Seller aware of any
unasserted claim the assertion of which is probable. All Intellectual Property
and registrations, applications, and agreements related thereto are fully
assignable to Purchaser without the consent of any third party except as shown
on SCHEDULE 5.8.
5.9 Insurance. The tangible Acquired Assets are insured under various
----------
policies of general liability and other forms of insurance, which policies are
in adequate amounts. Seller has not been refused any insurance with respect to
the Business by any insurance carrier to which it has applied for insurance or
with which it has carried insurance during the past three (3) years. Except as
set forth in SCHEDULE 5.9, there are no outstanding requirements or
recommendations by any current insurer or underwriter with respect to the
Business or the Acquired Assets which require or recommend changes in the
conduct of Business, or require any repairs or other work to be done with
respect to any of the Acquired Assets.
5.10 Environmental Matters.
----------------------
(a) There are no above-ground and underground storage tanks located on
any of the property leased by Seller.
-19-
(b) Except as may arise by automatic operation of law, no lien has
arisen on any of the property leased by Seller or any facilities or properties
used by the Seller for or in connection with its business under or as a result
of any federal, state, or local law, rule, or regulation relating to
environmental protection.
(c) The Seller has not been, and currently is not, a "generator" of
"hazardous waste", as those terms are defined by the Resource Conservation and
Recovery Act as amended, 42 U.S.C. (S)6901 et seq. and the regulations
------
promulgated thereunder ("RCRA"), for the purposes of obtaining an EPA
identification number under 40 C.F.R. (S)262.12(a) or complying with the
manifest system under Subpart 8 of 40 C.F.R. Part 262, and the Seller has not
(A) been notified that it is potentially liable under or (B) received any
requests for information or other correspondence concerning any site or facility
under, nor has Seller any reason to believe that the Company is considered
potentially liable under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C. (S)9601 et seq. and the
------
regulations promulgated thereunder ("CERCLA") or any similar state or local law.
(d) To the best of Seller's knowledge, there has been no disposal,
release, burial, or placement of Hazardous Materials on, in, at, or about any of
the property leased by Seller or any facilities or properties used by the Seller
for or in connection with its business that could subject Purchaser to damages,
costs, penalties or expenses, or recovery or remediation requirements under any
federal, state or local law, rule or regulation. As used in this Agreement, the
term "Hazardous Materials" shall mean any hazardous or toxic substance or waste,
asbestos, PCBs, agricultural chemicals, oil, petroleum, and petroleum products
and constituents thereof, or any other substances, wastes, or chemicals defined
as "hazardous" or "toxic" under RCRA, CERCLA, the Hazardous Materials
Transportation Act, 49 U.S.C. (S) 1802, or any applicable state or local law.
5.11 Litigation. Except as listed and described on SCHEDULE 5.11, there
-----------
are no material arbitrations, grievances, actions, suits, or other proceedings
pending or to the knowledge of Seller threatened in writing against, or
adversely affecting the Business or any of the Acquired Assets purported to be
owned or used by Seller, at law or in equity or admiralty, nor to the Seller's
knowledge is there any investigation pending or threatened, before or by any
federal, state, municipal, or other governmental department, commission, board,
bureau, agency, or instrumentality, domestic or foreign, related to the
Business. To Seller's knowledge, Seller is not in default under or in violation
of any order, writ, injunction, or decree of any federal, state, municipal
court, or other governmental department, commission, board, bureau, agency, or
instrumentality, domestic or foreign, affecting the Business or the Acquired
Assets purported to be owned or used by Seller.
5.12 Absence of Changes. Except as set forth on SCHEDULE 5.12, since
-------------------
March 30, 1996 there has not been any transaction or occurrence in which Seller
has:
-20-
(a) suffered any material adverse change in the business, operations,
condition (financial or otherwise), liabilities, assets, or earnings of the
Business nor has there been any event which has had or may reasonably be
expected to have a material adverse effect on any of the foregoing, other than
the write-off of receivables from Mobilemedia;
(b) incurred any obligations or liabilities of any nature other than
items incurred in the regular and ordinary course of the Business, consistent
with past practice, or increased (or experienced any change in the assumptions
underlying or the methods of calculating) any material bad debt, contingency, or
other reserve, other than in the ordinary course of the Business consistent with
past practice and other than in connection with the write-off of receivables
from Mobilemedia; and
(c) paid, discharged, or satisfied any claim, lien, encumbrance,
obligation, or liability (whether absolute, accrued, contingent, and whether due
or to become due), other than the payment, discharge, or satisfaction in the
ordinary course of the Business consistent with past practice of claims, liens,
encumbrances, obligations, or liabilities of the type reflected or reserved
against in the Financial Statements or which were incurred since March 30, 1996
in the ordinary course of the Business;
(d) permitted, allowed, or suffered any of its properties or assets
(real, personal or mixed, tangible, or intangible) to be subjected to any
mortgage, pledge, lien, encumbrance, restriction, or charge of any kind except
Permitted Encumbrances incurred in the ordinary course of business;
(e) written down or written up the value of any Inventory (including
write-downs by reason of shrinkage or markdowns), except for write-downs, write-
ups, and write-offs in the ordinary course of the Business consistent with past
practice, none of which is material in amount;
(f) canceled any debts or waived any claims or rights in excess of
$1,000.00 individually or $15,000.00 in the aggregate;
(g) disposed of or permitted to lapse any right to the use of any
patent, trademark, assumed name, service xxxx, trade name, copyright, license,
or application therefor or disposed of or disclosed to any person not authorized
to have such information any trade secret, proprietary information, formula,
process, or know-how not previously a matter of public knowledge or existing in
the public domain;
(h) except for the capital expenditure commitments described on
SCHEDULE 5.7.3, made any significant capital expenditure or commitment for
additions to property, plant, equipment, intangible, or capital assets or for
any other purpose, other than for emergency repairs or replacement;
(i) incurred any long term indebtedness;
-21-
(j) paid, loaned, distributed, sold, transferred or leased to any
stockholder, officer, employee, or director of Seller, or any person
controlling, controlled by, or under common control with Seller any properties
or assets that, but for such payment, loan, distribution, sale, transfer or
lease, would have been an Acquired Asset;
(k) entered into any collective bargaining or labor agreement (oral
and legally binding or written), or experienced any organized slowdown, work
interruption, strike, or work stoppage;
(l) sold, transferred, or otherwise disposed of any of the Acquired
Assets except in the ordinary course of business;
(m) granted or incurred any obligation for any increase in the
compensation of any officer or employee of Seller (including, without
limitation, any increase pursuant to any bonus, pension, profit-sharing,
retirement, or other plan or commitment) except for raises to employees in the
ordinary course of business;
(n) made any material change in any method of accounting or accounting
principle, practice, or policy;
(o) suffered any casualty loss or damage in excess of $1,000 in the
aggregate (whether or not insured against);
(p) made or agreed to make any charitable contributions or incurred or
agreed to incur any non-business expenses in excess of $1,000 in the aggregate;
(q) taken any other action neither in the ordinary course of the
Business and consistent with past practice nor provided for in this Agreement;
or
(r) agreed, so as to legally bind Seller whether in writing or
otherwise, to take any of the actions set forth in this Section 5.12 and not
otherwise permitted by this Agreement.
5.13 Brokers and Finders. Neither Seller nor any Shareholder nor any
--------------------
affiliate of either of them, has incurred any obligation or liability to any
party for any brokerage fees, agent's commissions, or finder's fees in
connection with the transactions contemplated by this Agreement.
5.14 Labor Matters. Seller has not, within the last three (3) years,
-------------
experienced or been threatened with any organized slowdown, work interruption,
strike, or work stoppage by its employees. Seller is not a party to any
collective bargaining agreements. Neither Seller nor any of its officers,
directors, or employees has been charged or threatened with the charge of any
unfair labor practice within the last two (2) years. Seller is in material
-22-
compliance with all applicable federal, state, local and foreign laws and
regulations concerning the employer-employee relationship and with all
agreements relating to the employment of Seller's employees, including
applicable wage and hour laws, fair employment laws, safety laws, worker
compensation statutes, unemployment laws, and social security laws. With
respect to Seller, there are no pending or, to Seller's knowledge, threatened
claims, investigations, charges, citations, hearings, consent decrees, or
litigation concerning wages, compensation, bonuses, commissions, awards, or
payroll deductions; equal employment or human rights violations regarding race,
color, religion, sex, national origin, age, handicap, veteran's status, marital
status, disability, or any other recognized class, status, or attribute under
any federal, state, local or foreign equal employment law prohibiting
discrimination; representation petitions of unfair labor practices; grievances
or arbitrations pursuant to current or expired collective bargaining agreements;
occupational safety and health; workers' compensation; wrongful termination,
negligent hiring, invasion of privacy or defamation; immigration or any other
claim based on the employment relationship or termination of the employment
relationship (collectively, "Labor Claims"). Seller is not liable for any
unpaid wages, bonuses, or commissions (other than those not yet due) or any tax,
penalty, assessment, or forfeiture for failure to comply with any of the
foregoing.
5.15 Governmental Approval and Consents. Except as described on SCHEDULE
-----------------------------------
5.15, Seller has obtained all Permits required for the lawful operation of the
Business as presently conducted if the failure to hold such permit would have a
material adverse effect. SCHEDULE 5.15 contains a true and correct copy of each
such Permit.
5.16 Taxes.
-----
(a) Seller has timely filed all federal and foreign income tax
returns, and all state, county, and local income, franchise, property, sales,
use, unemployment, and other tax returns in each state and jurisdiction where
such returns are required to be filed on or prior to the Closing Date, taking
into account any extensions of the filing deadlines which have been validly
granted to Seller, and such returns are and will be true and correct in all
material respects. Seller has paid all federal, state, county, and local
income, franchise, property, sales, use, and all other taxes and assessments
(including penalties and interest in respect thereof, if any) that have become
or are due with respect to any period ended on or prior to the Closing Date
whether shown as due on such returns or not, or is contesting in good faith such
taxes and assessments, in which event Seller has disclosed the details of such
contests on SCHEDULE 5.16.1.
(b) SCHEDULE 5.16.2 provides a brief description of all pending
federal and state tax disputes in which Seller is alleged to be liable or in
which Seller is claiming a refund, including the nature and amount of the
controversy, the respective positions of the parties as to any amounts claimed
to be due thereunder, and the current status thereof.
(c) All taxes required to be withheld on or prior to the Closing Date
from employees of Seller for income taxes and social security taxes have been
-23-
properly withheld and, if required on or prior to the Closing Date, have been
deposited with the appropriate governmental agency.
(d) No claim or investigation is pending or, to Seller's knowledge,
threatened by any state, local, or other jurisdiction alleging that Seller has a
duty to file tax returns and pay taxes or is otherwise subject to the taxing
authority of any jurisdiction not included in SCHEDULES 5.16.1 or 5.16.2 with
respect to any taxes covered by Section 10.2(a) nor has Seller received any
notice or questionnaire from any such jurisdiction which suggests or asserts
that Seller may have a duty to file such returns and pay such taxes, or
otherwise is subject to the taxing authority of such jurisdiction.
5.17 Employee Benefit Plans.
----------------------
(a) SCHEDULE 5.17.1 hereto lists every Employee Benefit Plan (as
hereinafter defined) of the Seller. True and complete copies of the Employee
Benefit Plans listed on SCHEDULE 5.17.1 hereto have heretofore been furnished to
Purchaser.
(b) Except as disclosed in SCHEDULE 5.17.2 hereto, all of the Employee
Benefit Plans and any related trusts (to the extent applicable) comply with and
have been administered in compliance with (i) the provisions of ERISA (as
hereinafter defined), (ii) all provisions of the Code (as hereinafter defined)
relating to qualification and tax exemption under Code Sections 401(a) and
501(a) or otherwise applicable to secure intended tax consequences, (iii) the
written terms of the Employee Benefit Plan, and (iv) all other applicable laws,
rules, regulations or ordinances, and the Seller has not received any notice
from any Governmental Authority (as hereinafter defined) questioning or
challenging such compliance.
(c) Seller has neither maintained in the past nor currently maintains
an Employee Benefit Plan providing welfare benefits (as defined in ERISA Section
3(1)) to employees after retirement or other separation of service except to the
extent required under Part 6 of Title I of ERISA or Code Section 4980B or their
successors.
(d) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions provided for herein will (i) entitle any
current or former employee or director of the Seller to severance pay,
unemployment compensation or any payment contingent upon a change in control or
ownership of the Seller, (ii) increase or enhance any benefits payable under any
Employee Benefit Plan, or (iii) accelerate the time of payment or vesting, or
increase the amount, of any compensation due to any such employee or former
employee.
(e) Neither the Seller nor its ERISA Affiliates have at any time
sponsored, contributed to, or been obligated under Title I or Title IV of ERISA
to contribute to a "defined benefit plan" (as defined in ERISA Section 3(35)).
On or after September 26, 1980, neither the Seller nor its ERISA Affiliates have
-24-
had an "obligation to contribute" (as defined in ERISA Section 4212) to a
"multiemployer plan" (as defined in ERISA Sections 4001(a)(3) and 3(37)(A)).
(f) All liabilities arising out of or related to Employee Benefit
Plans of the Seller are reflected on the Financial Statements in accordance with
GAAP.
(g) When used in this Section 5.17, the words and phrases set forth
below shall have the following meanings:
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Employee Benefit Plan" means collectively, each pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus or other incentive plan, any other written or
unwritten employee program, arrangement, agreement or understanding, whether
arrived at through collective bargaining or otherwise, any medical, vision,
dental or other health plan, any life insurance plan, or any other employee
benefit plan or fringe benefit plan, including, without limitation, any
"employee benefit plan," as that term is defined in Section 3(3) of ERISA
currently or previously adopted, maintained by, sponsored in whole or in part
by, or contributed to by the Seller for the benefit of employees, retirees,
dependents, spouses, directors, independent contractors or other beneficiaries
and under which employees, retirees, dependents, spouses, directors, independent
contractors or other beneficiaries are eligible to participate. Employee
Benefit Plans include (but are not limited to) "employee benefit plans" as
defined in section 3(3) of ERISA and any other plan, fund, policy, program,
practice, custom, understanding or arrangement providing compensation or other
benefits to any current or former officer or employee of the Seller, or any
dependent or beneficiary thereof, maintained by the Seller or under which the
Seller has any obligation or liability, whether or not they are or are intended
to be (i) covered or qualified under the Code, ERISA or any other applicable
law, (ii) written or oral, (iii) funding or unfunded, (iv) actual or contingent,
or (v) generally available to any or all employees (or former employees) of the
Seller (or their beneficiaries or dependents), including, without limitation,
all incentive, bonus, deferred compensation, flexible spending accounts,
cafeteria plans, vacation, holiday, medical, disability, share purchase or other
similar plans, policies, programs, practices or arrangements.
"ERISA" means Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" of any entity means any other entity which, together
with such entity, would be treated as a single employer under Code Section 414.
"ERISA Plan" means any Employee Benefit Plan which is an "employee
pension benefit plan," as that term is defined in Section 3(2) of ERISA, or an
"employee welfare benefit plan" as that term is defined in Section 3(1) of
ERISA.
-25-
"Governmental Authority" means any federal, state, county, local,
foreign or other governmental or public agency, instrumentality, commission,
authority, board or body.
5.18 Compliance with Laws. Seller has complied in all material respects
---------------------
with all laws, statutes, ordinances, or regulations applicable to the Business
or the Acquired Assets. Neither Seller nor any of the Acquired Assets is
subject to any judgment, order, writ, injunction, or decree issued by any court
or any governmental or administrative body or agency. Seller has not at any
time during the last five (5) years (i) made any unlawful contribution to any
political candidate, or failed to disclose fully any contribution in violation
of law, or (ii) made any payment to any federal, state or local governmental,
regulatory or administrative officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or permitted
by the laws of the United States or any jurisdiction thereof.
5.19 Governmental Approval and Consents. Except for consents contemplated
-----------------------------------
by this Agreement, no consent, approval, or authorization of or declaration,
filing, or registration with any governmental or regulatory authority is
required in connection with the execution, delivery, and performance of this
Agreement by Seller and each Shareholder or the consummation by Seller and each
Shareholder of the transactions contemplated hereby.
5.20 Adequacy of Acquired Assets. The Acquired Assets include all rights,
----------------------------
properties, interests in properties, and assets which Seller held and should
permit Purchaser to carry on the Business as presently conducted by Seller.
5.21 Title to Assets. Seller has good title to Seller's interest in the
----------------
Acquired Assets being conveyed by it to Purchaser hereunder, free and clear of
all liens, claims, charges, encumbrances and security interests on Seller's
interest other than the Permitted Encumbrances of any kind or nature. All
security interests and encumbrances of record against the Acquired Assets shall
be released, terminated or discharged at the Closing by delivery to the
Purchaser upon payment of the Purchase Price at the Closing of executed
discharges, UCC termination or partial release statements signed by the secured
party.
5.22 Correctness of Representations. The representations and warranties
-------------------------------
of Seller and each Shareholder in this Agreement and in any Exhibit,
certificate, or Schedule attached hereto or furnished pursuant hereto are on the
date hereof and will be on the Closing Date true, correct and complete. True
copies of all leases, agreements, plans, Contracts, and other instruments listed
on the Schedules delivered or furnished to Purchaser pursuant to this Agreement
have been delivered to Purchaser.
-26-
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
6.1 Organization and Qualification. Purchaser is a corporation duly
-------------------------------
organized, validly existing, and in good standing under the laws of the State of
Georgia and has all corporate power and authority to conduct its business, to
own, lease, or operate its properties in the places where such business is
conducted and such properties are owned, leased, or operated.
6.2 Authority. Purchaser has full power and authority to enter into this
----------
Agreement and each of the other Acquisition Documents to which it is a party and
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by Purchaser of this Agreement and each of the other
Acquisition Documents to which Purchaser is a party have been duly and validly
authorized and approved by all necessary action on the part of Purchaser. This
Agreement and each of the other Acquisition Documents to which Purchaser is a
party are the legal, valid, and binding obligations of Purchaser enforceable
against Purchaser in accordance with their terms, except as enforceability may
be limited by applicable equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally, and by the exercise of judicial discretion in accordance with
equitable principles. Neither the execution and delivery by Purchaser of this
Agreement or any of the other Acquisition Documents to which Purchaser is a
party nor the consummation by Purchaser of the transactions contemplated hereby
or thereby will (i) violate Purchaser's Articles of Incorporation or Bylaws,
(ii) violate any provisions of law or any order of any court or any governmental
unit to which Purchaser is subject, or by which its assets are bound, or (iii)
conflict with, result in a breach of, or constitute a default under any
indenture, mortgage, lease, agreement, or other instrument to which Purchaser is
a party or by which its assets or properties are bound.
6.3 Litigation. There is no suit, action, proceeding, claim or
-----------
investigation pending, or, to Purchaser's knowledge, threatened, against
Purchaser which would affect the consummation of the transactions contemplated
hereby.
6.4 Correctness of Representations. No representation or warranty of
-------------------------------
Purchaser in this Agreement or in any Exhibit, certificate, or Schedule attached
hereto or furnished pursuant hereto contains any untrue statement of material
fact or omits to state any fact necessary in order to make the statements
contained therein not misleading in any material respect, and all such
statements, representations, Exhibits, and certificates are true and complete.
6.5 Brokers and Finders. Except for a fee payable to The Breckenridge
--------------------
Group, Inc., Resurgens Plaza, Suite 2100, 000 X. Xxxxx Xxxxx Xxxx, Xxxxxxx,
Xxxxxxx 00000, with respect to the transactions provided for herein, which fee
-27-
shall be paid by Purchaser, neither Purchaser nor any affiliate of Purchaser has
incurred any obligation or liability to any party for any brokerage fees,
agent's commissions, or finder's fees in connection with the transactions
contemplated by the Acquisition Documents.
6.6 Governmental Approval and Consents. No consent, approval, or
-----------------------------------
authorization of or declaration, filing, or registration with any governmental
or regulatory authority is required in connection with the execution, delivery,
and performance by Purchaser of this Agreement or the consummation of the
transactions contemplated hereby.
ARTICLE 7
COVENANTS
7.1 Mutual Covenants.
-----------------
Purchaser, on the one hand, and Seller and each Shareholder, on the
other hand, shall each take all actions contemplated by this Agreement, and do
all things reasonably necessary to effect the consummation of the transactions
contemplated by this Agreement. Except as otherwise provided in this Agreement,
Purchaser and Seller and each Shareholder shall each refrain from knowingly
taking or failing to take any action which would render any of the
representations or warranties contained in Articles 5 or 6 of this Agreement in
any material respect inaccurate as of the Closing Date. Each party shall
promptly notify the other party of any action, suit, or proceeding that shall be
instituted or threatened against such party to restrain, prohibit, or otherwise
challenge the legality of any transaction contemplated by this Agreement.
7.2 Conduct of Business Prior to Closing. Seller covenants and agrees
-------------------------------------
that, from the date hereof to the Closing Date, and except to the extent that
Purchaser shall otherwise consent in writing, Seller shall, with respect to the
Business:
(a) operate the Business substantially as previously operated and only
in the regular and ordinary course;
(b) other than in the ordinary course of business, not purchase or
acquire any assets or properties, whether real or personal, tangible or
intangible, that if acquired would be an Acquired Asset hereunder, and except in
the ordinary course of business not sell or otherwise dispose of any real or
personal property or asset that would have been an Acquired Asset hereunder;
(c) maintain the Acquired Assets in their present order and condition,
reasonable wear and use excepted, and deliver the Acquired Assets to Purchaser
on the Closing Date in such condition, and maintain through the Closing Date all
policies of insurance covering such Acquired Assets in amounts and on terms
substantially equivalent to those in effect on the date hereof;
-28-
(d) take all steps reasonably necessary to maintain the Intellectual
Property and other intangible assets of the Business;
(e) pay all accounts payable of the Business in accordance with past
practice and collect all accounts receivable in accordance with past practice;
(f) comply with all laws applicable to the conduct of the Business;
and
(g) maintain the books and records of the Business in the usual,
regular, and ordinary manner, on a basis consistent with past practices and
prepare and file all foreign, federal, state, and local tax returns and
amendments thereto required to be filed by Seller after taking into account any
extensions of time granted by such taxing authorities.
7.3 Access and Information. From the date hereof to the Closing Date and
-----------------------
during normal business hours, Seller shall afford to Purchaser, its lenders,
counsel, accountants, and other representatives, reasonable access to the
offices, properties, books, contracts, commitments, records, vendors, and
customers of Seller, and shall furnish such persons with all information
(including financial and operating data) concerning the Business and the
Acquired Assets as they reasonably may request. Seller shall use its best
efforts to assist Purchaser, its lenders, counsel, accountants, and other
representatives in their examination. Purchaser shall, and shall use its best
efforts to cause its lenders, counsel, accountants, and representatives to, hold
in strict confidence all information so obtained from Seller.
7.4 Notification of Changes. Between the date hereof and the Closing
------------------------
Date, Seller shall promptly notify Purchaser in writing of any adverse change in
the financial condition of the Business, any damage to or loss of any of the
Acquired Assets or the institution of the threat of institution of legal,
administrative, or other proceedings against Seller or the occurrence or
existence of any unasserted proceedings known to Seller.
7.5 Certain Acts Prohibited. Except as may be necessary to discharge or
------------------------
deal with the Excluded Liabilities, from the date hereof to the Closing Date,
Seller shall not, without the prior written consent of Purchaser, take any of
the actions described in Section 5.12 hereof.
7.6 Consents. Seller shall use its best efforts to obtain, at its sole
---------
cost and expense, prior to the Closing all consents and estoppels which, in the
reasonable judgment of Purchaser, are necessary or appropriate for the transfer
or assignment of the Acquired Assets to Purchaser and the consummation of the
transactions contemplated hereby. All such consents and estoppels shall be in
writing and in form and substance reasonably satisfactory to Purchaser, and
executed counterparts thereof will be delivered to Purchaser promptly after
receipt thereof but in no event later than the Closing.
-29-
7.7 Supplemental Disclosure. Seller shall have the continuing obligation
------------------------
up to and including the Closing Date to supplement promptly or amend the
Schedules with respect to any matter hereafter arising or discovered which, if
existing or known at the date of this Agreement, would have been required to be
set forth or listed in the Schedules.
7.8 Conditions Precedent. Seller shall use its best efforts to satisfy
---------------------
the conditions enumerated in Article 8 hereof.
7.9 Discharge of Liens and Encumbrances. All liens, claims, charges,
------------------------------------
security interests, pledges, assignments, or encumbrances relating to the
Acquired Assets shall be satisfied, terminated, and discharged by Seller on or
prior to the Closing Date and evidence reasonably satisfactory to Purchaser and
its counsel of such satisfaction, termination, and discharge shall be delivered
to Purchaser at or prior to the Closing.
7.10 Prorations.
-----------
(a) To the extent not included in the Assumed Liabilities, Utility
Charges, Rental Charges, Equipment Charges, Real Property Taxes, Personal
Property Taxes, and Customer Deposits (all as individually defined below and
collectively called the "Proration Items"), shall be prorated directly between
Seller and Purchaser as provided in this Section 7.10.
(b) For purposes of this Section 7.10, the capitalized terms set forth
below shall have the following meanings:
(i) "Utility Charges" means water, sewer, electricity, gas and other
utility charges, if any, payable pursuant to the Office Leases;
(ii) "Rental Charges" means security deposits, common area
maintenance charges, merchant association dues, insurance reimbursement and
rental charges payable or receivable and other payments or receipts (other than
Real Property Taxes) pursuant to the Office Leases;
(iii) "Equipment Charges" means rental charges payable or receivable
and other payments or receipts applicable to the equipment of the Business;
(iv) "Real Property Taxes" means ad valorem taxes, general
assessments, and special assessments payable pursuant to or with respect to the
Office Leases;
(v) "Personal Property Taxes" means ad valorem taxes imposed upon
the Acquired Assets; and
(vi) "Lease Payments" means payments of rent or additional rent under
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the Office Leases and any other lease of real or personal property to be
assigned to Purchaser hereunder.
(c) As soon as practicable after the Closing Date, all Utility
Charges, Rental Charges, Lease Payments, Equipment Charges, Real Property Taxes,
and Personal Property Taxes (including amounts owed pursuant to transferable
state licenses applicable to the Acquired Assets and transferred to Purchaser
hereunder) shall be apportioned to the Closing Date, and representatives of
Seller and Purchaser will examine all relevant books and records as of the
Closing Date in order to make the determination of the apportionments, which
determinations shall be calculated in accordance with past practices. Payments
in respect thereof shall be made to the appropriate party by check within thirty
(30) days after such determination, except that payments for Real Property Taxes
and Personal Property Taxes shall initially be determined based on the previous
year's taxes and shall later be adjusted to reflect the current year's taxes
when the tax bills are finally rendered. The parties shall fully cooperate to
avoid, to the extent legally possible, the payment of duplicate Personal
Property Taxes, and each party shall furnish, at the request of the other, proof
of payment of any Personal Property Taxes or other documentation which is a
prerequisite to avoiding payment of a duplicate tax.
(d) In the event that either party (the "Payor") pays a Proration Item
(other than if and to the extent included in the Assumed Liabilities) for which
the other party (the "Payee") is obligated in whole or in part under this
Section 7.11, the Payor shall present to the Payee evidence of payment and a
statement setting forth the Payee's proportionate share of such Proration Item,
and the Payee shall promptly pay such share to the Payor. In the event either
party (the "Recipient") receives payments of a Proration Item to which the other
party (the "Beneficiary") is entitled in whole or in part under this Agreement,
the Recipient shall promptly pay such share to the Beneficiary.
(e) In the event there exists as of the Closing Date any pending
appeals of ad valorem tax assessments with regard to any Acquired Assets, the
continued prosecution and/or settlement of such appeals shall be subject to the
direction and control of Purchaser with respect to assessments for the year
within which the Closing occurs.
7.11 Covenant to Pay Debts. Seller shall furnish to Purchaser at the
----------------------
Closing a true, correct and complete listing of all indebtedness of Seller that
is not an Assumed Liability and that is owed to third parties as of the Closing
Date or that will become due and payable within thirty (30) days after the
Closing Date (including, without limitation, trade and non-trade payables,
accrued taxes, amounts due to employees, bank indebtedness and all other
indebtedness, whether secured or unsecured), which listing shall set forth as to
each creditor listed thereon the full amount owed by Seller to such creditor on
or as of the Closing Date or that will become due and payable within such thirty
(30) day period (the "Current Obligations"). Such listing shall further set
forth all indebtedness of Seller to third parties that will become due and
payable more than thirty (30) days after the Closing Date and that is not an
Assumed Liability (the "Ongoing Obligations" and, together with the Current
Obligations, the "Indebtedness"). To the extent any of the Acquired Assets are
security for any Indebtedness, Seller shall, at its sole cost and expense,
obtain the release of all liens, claims, charges, encumbrances or security
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interests in such Acquired Assets and deliver to Purchaser at the Closing
evidence (which shall be in form reasonably satisfactory to Purchaser and its
counsel) of such release. Seller covenants and agrees that, to the extent any
Current Obligation is not paid in full at the Closing as provided in Section
3.2(a), Seller will promptly after the Closing pay such Current Obligation in
full. Seller covenants and agrees to pay promptly all Ongoing Obligations as
they come due, with such payment to be made from the proceeds of the Purchase
Price.
ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing
Date, of each of the following conditions all or any of which may be waived in
writing, in whole or in part, by Purchaser:
8.1 Certificate Regarding Schedules and Representations and Warranties.
-------------------------------------------------------------------
All information required to be furnished or delivered by Seller and the
Shareholders pursuant to this Agreement shall have been furnished or delivered
as of the date hereof and as of the Closing Date, as required hereunder; the
representations and warranties made by Seller and the Shareholders in Article 5
shall be true and correct in all material respects on and as of the Closing Date
with the same force and effect as though such representations and warranties had
been made on and as of the Closing Date (except that such representations and
warranties may be untrue or incorrect as a result of actions or transactions
expressly permitted by this Agreement or actions or transactions of Seller made
with the prior written consent of Purchaser); and Purchaser shall have received
a certificate dated as of the Closing Date executed by an authorized officer of
Seller and the Shareholders to such effect.
8.2 Compliance by Seller and the Shareholders. Seller and the
------------------------------------------
Shareholders shall have each duly performed in all material respects all of the
covenants, agreements, and conditions contained in this Agreement respectively
to be performed by it on or prior to the Closing Date, and Purchaser shall have
received a certificate, dated as of the Closing Date, executed by an authorized
officer of Seller and each Shareholder to such effect.
8.3 No Injunction; Etc. No action, proceeding, investigation, regulation,
-------------------
or legislation shall be pending or threatened which seeks to enjoin, restrain,
or prohibit Purchaser, or to obtain substantial damages from Purchaser, in
respect of the consummation of the transactions contemplated hereby, or which
seeks to enjoin the operation of all or a material portion of the Acquired
Assets, which, in the reasonable judgment of Purchaser, would make it
inadvisable to consummate the transactions contemplated by this Agreement.
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8.4 Operation in the Ordinary Course. Since the date of this Agreement,
---------------------------------
Seller shall have operated the Business in the ordinary course (except as
otherwise permitted by this Agreement or as agreed to by Purchaser as evidenced
by Purchaser's prior written consent).
8.5 Consents; Authorizations; Approval of Legal Matters. Purchaser shall
----------------------------------------------------
have received a true and correct copy of each consent and waiver that is
required for the assignment of the Contracts, Permits, Intellectual Property,
and other agreements and assets or otherwise required for the execution,
delivery, and performance of this Agreement by Seller, including, specifically
but without limitation the consent of CUE to the assignment and transfer to
Purchaser of the CUE Regional Affiliate Agreement. All authorizations, orders,
or approvals of any governmental commission, board, or other regulatory body,
shall have been obtained. Purchaser shall be satisfied with the terms,
conditions, and restrictions of and obligations under each such authorization,
order, or approval.
8.6 Incumbency. Purchaser shall have received a certificate of incumbency
----------
of Seller executed by a Secretary or Assistant Secretary thereof listing the
officers authorized to execute this Agreement and certifying the authority of
each such officer to execute the agreements, documents, and instruments on
behalf of Seller in connection with the consummation of the transactions
contemplated herein.
8.7 Certified Resolutions. Purchaser shall have received a certificate of
---------------------
the Secretary or Assistant Secretary of Seller containing a true and correct
copy of the resolutions duly adopted by the board of directors of Seller
approving and authorizing each Acquisition Document and the transactions
contemplated hereby and thereby and certifying that such resolutions have not
been rescinded, revoked, modified, or otherwise affected and remain in full
force and effect.
8.8 Release of Liens. Purchaser shall have received Uniform Commercial
-----------------
Code searches (which searches shall be made or caused to be made by and at the
expense of Purchaser) of filings made pursuant to Article 9 thereof in all
jurisdictions where any of the Acquired Assets are located, in form, scope, and
substance reasonably satisfactory to Purchaser and its counsel, which searches
shall reflect the release or termination of liens, claims, security interests,
or encumbrances against any of the Acquired Assets disclosed thereby that are
not Permitted Encumbrances, and to the extent any such release or termination is
not reflected of record, Purchaser shall have received evidence satisfactory to
it, that all such liens and encumbrances against the Acquired Assets other than
Permitted Encumbrances have been released or terminated prior to or at the
Closing.
8.9 Accuracy of Schedules. Examination by Purchaser shall not have
----------------------
disclosed any material inaccuracy in the representations and warranties of
Seller set forth in this Agreement or in the Schedules delivered to Purchaser
pursuant hereto.
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8.10 No Adverse Change. There shall not have been any material adverse
------------------
change in the Acquired Assets or the Business since the date of this Agreement,
and Purchaser shall have received a certificate dated as of the Closing Date,
executed by an authorized officer of Seller to such effect.
8.11 Instruments of Transfer. Seller shall have delivered to Purchaser
------------------------
such warranty deeds, bills of sale, motor vehicle titles, endorsements,
assignments, licenses, and other good and sufficient instruments of conveyance
and transfer and any other instruments reasonably deemed appropriate by counsel
to Purchaser, all in form and substance reasonably satisfactory to counsel to
Purchaser, to vest in Purchaser all of Seller's rights, title, and interest with
respect to the Acquired Assets, free and clear of all liens, charges,
encumbrances, pledges, or claims of any nature except for Permitted
Encumbrances.
8.12 Opinion of Counsel for Seller. Purchaser shall have received the
------------------------------
written legal opinion of Xxxxxx X. Xxxxxxxx, Esq., counsel to Seller,
substantially in the form of EXHIBIT D hereto.
8.13 Proceedings. The form and substance of all opinions, certificates,
-----------
assignments, orders, and other documents and instruments, hereunder shall be
satisfactory in all reasonable respects to Purchaser and its counsel.
8.14 Condition of Acquired Assets. On the Closing Date, all of the
-----------------------------
Acquired Assets, other than pagers held by lessees, shall be in substantially
the same condition as at the close of business on the date hereof, except for
ordinary use and wear thereof and changes occurring in the ordinary course of
business or expressly permitted by this Agreement between the date hereof and
the Closing Date, and Purchaser shall have received a certificate dated as of
the Closing Date, executed by an authorized officer of Seller to such effect;
provided, however, if on or prior to the Closing Date any of the Acquired Assets
shall have suffered loss or damage on account of fire, flood, accident, act of
war, civil commotion, or any other cause or event beyond the reasonable power
and control of Seller (whether or not similar to the foregoing) to an extent
which, in the reasonable opinion of Purchaser, materially affects the value of
the Acquired Assets, taken as a whole, Purchaser shall have the right either (a)
to terminate this Agreement and all of Purchaser's obligations hereunder without
incurring any liability to Seller as a result of such termination, or (b) to
consummate the transactions provided for herein and be paid the full amount of
all insurance proceeds, if any, paid or payable to Seller, in respect of such
loss plus an amount equal to any deductible or co-insurance reserve applicable
to such loss. If under the circumstances described in the foregoing sentence,
Purchaser shall elect to consummate the transactions provided for herein, Seller
shall, on demand, pay to Purchaser the full amount of any insurance proceeds
received by Seller in respect of any such loss, together with any deductible or
co-insurance reserve applicable to such loss.
8.15 Non-Compete Agreements. Each shareholder shall have executed and
-------------------------
delivered to Purchaser a Non-Compete Agreement.
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8.16 Voice Mail Services Agreement. Call One shall have executed and
--------------------------------
delivered to Purchaser the Voice Mail Services Agreement.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligation of Seller to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing
Date hereunder, of each of the following conditions, all or any of which may be
waived, in whole or in part, by Seller.
9.1 Certificate Regarding Representations and Warranties. All information
-----------------------------------------------------
required to be furnished or delivered by Purchaser pursuant to this Agreement
shall have been furnished or delivered as of the date hereof and the Closing
Date as required hereunder; the representations and warranties made by Purchaser
in Article 6 hereof shall be true and correct in all material respects on and as
of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date; and
Seller shall have received a certificate dated the Closing Date, executed by an
authorized officer of Purchaser to such effect.
9.2 Compliance by Purchaser. Purchaser shall have duly performed in all
------------------------
material respects all of the covenants, agreements, and conditions contained in
this Agreement to be performed by Purchaser on or before the Closing Date, and
Seller shall have received a certificate dated the Closing Date, executed by an
authorized officer of Purchaser, to such effect.
9.3 Certified Resolutions. Seller shall have received from Purchaser a
----------------------
certificate executed by the Secretary of Purchaser containing a true and correct
copy of resolutions duly adopted by Purchaser's Board of Directors approving and
authorizing this Agreement and each of the other Acquisition Documents to which
Purchaser is a party and each of the transactions contemplated thereby. The
Secretary or Assistant Secretary of Purchaser shall also certify that such
resolutions have not been rescinded, revoked, modified, or otherwise affected
and remain in full force and effect.
9.4 No Injunction; Etc. No action, proceeding, investigation, regulation,
-------------------
or legislation shall be pending or overtly threatened which seeks to enjoin,
restrain, or prohibit Seller, or to obtain substantial damages from Seller, in
respect of the consummation of the transactions contemplated hereby, which, in
the reasonable judgment of Seller, would make it inadvisable to consummate such
transactions.
9.5 Incumbency. Seller shall have received a certificate of incumbency of
-----------
Purchaser executed by the President and attested by the Secretary or Assistant
Secretary of Purchaser listing the officers of Purchaser authorized to execute
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this Agreement and the other Acquisition Documents to which Purchaser is a party
and the instruments of assumption on behalf of Purchaser and certifying the
authority of each such officer to execute the agreements, documents, and
instruments on behalf of Purchaser in connection with the consummation of the
transactions contemplated herein.
9.6 Certificates. Seller shall have received from Purchaser all such
-------------
certificates, dated as of the Closing Date, as Seller shall reasonably request
to evidence the fulfillment by Purchaser, or such other satisfaction as the
Closing Date, of the terms and conditions of this Agreement.
9.7 Opinion of Purchaser's Counsel. Seller shall have received the
-------------------------------
written legal opinion of Xxxxxx & Bird, counsel for Purchaser, substantially in
the form of EXHIBIT E hereto, which opinion may be based upon and incorporate
the 1992 edition of the Interpretive Standards applicable to Legal Opinions to
Third Parties in Corporate Transactions adopted by the Legal Opinion Committee
of the Corporate and Banking Law Section of the State Bar of Georgia, which
Interpretive Standards shall be attached to the Opinion.
9.8 Proceedings. The form and substance of all opinions, certificates,
------------
assignments, orders and other documents and instruments hereunder shall be
satisfactory in all reasonable respects to Seller and its counsel.
ARTICLE 10
POST CLOSING MATTERS
10.1 Employment of Employees. Purchaser shall have no obligation to
------------------------
employ or to offer employment to any of the employees of Seller. Seller shall
be responsible for the payment of all wages, commissions, severance pay, accrued
but unpaid wages, vacation pay, sick pay, and holiday pay to the employees of
Seller, up to and including the date Seller terminates the employment of such
employees. Seller shall be responsible for the payment of any amounts due to
its employees pursuant to any benefit plans of Seller as a result of the
employment of its employees.
10.2 Seller's Benefit Plans. Purchaser shall assume no responsibility
-----------------------
with regard to any benefit plans of Seller.
10.3 Maintenance of Books and Records.
---------------------------------
(a) Seller and Purchaser shall preserve until the fifth anniversary of
the Closing Date all Books and Records possessed or to be possessed by such
party relating to any of the assets, liabilities or business of Seller prior to
the Closing Date. Seller shall give Purchaser written notice of any Books and
Records discovered by Seller that were not transferred to Purchaser. After the
Closing Date, where there is a legitimate purpose, such party shall provide the
other parties with access, upon prior reasonable written request specifying the
need therefor, during regular business hours, to (i) the officers and employees
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of such party and (ii) the books of account and records of such party, but, in
each case, only to the extent relating to the Business prior to the Closing
Date, and the other parties and their representatives shall have the right to
make copies of such books and records; provided, however, the foregoing right of
access shall not be exercisable in such a manner as to interfere unreasonably
with the normal operations and business of such party; and further, provided, as
to so much of such information as constitutes trade secrets or confidential
business information of such party, the requesting party, its affiliates,
officers, directors and representatives will use due care to not disclose such
information except (i) as required by law, (ii) with the prior written consent
of such party, which consent shall not be unreasonably withheld, or (iii) where
such information becomes available to the public generally, or becomes generally
known to competitors of such party, through sources other than the requesting
party, its affiliates or its officers, directors or representatives. Such
records may nevertheless be destroyed by a party if such party sends to the
other parties written notice of its intent to destroy records, specifying with
particularity the contents of the records to be destroyed. Such records may
then be destroyed after the 30th day after such notice is given unless another
party objects to the destruction in which case the party seeking to destroy the
records shall deliver such records to the objecting party.
(b) Purchaser shall fully cooperate with Seller in the preparation and
filing of all tax filings relating to the period ending prior to the Closing
Date. Purchaser also shall make available to Seller such information as may be
reasonably required by Seller in connection with audits or otherwise for the
proper payment of taxes for which Seller is responsible. Purchaser shall
provide within a reasonable time after the receipt of a written request all
information contained in its files necessary for the preparation by Seller of a
Form W-2 for the calendar year in which the Closing occurs for each Hired
Employee.
10.4 Payments Received. Seller and Purchaser agree that after the
------------------
Effective Time they will hold and will promptly transfer and deliver to the
proper recipient thereof, from time to time as and when received by them, any
cash, checks with appropriate endorsements (using their best efforts not to
convert such checks into cash), or other property that they may receive on or
after the Effective Time which properly belongs to the other party, including
without limitation, any insurance proceeds, and will account to the other for
all such receipts. From and after the Effective Time, Purchaser shall have the
right and authority to endorse without recourse the name of Seller on any check
or any other evidences of indebtedness received by Purchaser on account of the
Business and the Acquired Assets transferred to Purchaser hereunder.
10.5 Covenant Not to Compete. Seller covenants and agrees that for a
------------------------
period of five (5) years commencing on the Closing Date, Seller will not, within
the Territory (as hereinafter defined), either (a) directly or indirectly, own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, any business, whether in corporate, proprietorship or
partnership form or otherwise, which is engaged at any place in the Territory in
-37-
a business substantially the same as the Business (a "Competing Business"), or
(b) solicit or attempt to solicit to or for the benefit of any Competing
Business the business or patronage of a customer of Purchaser that has been at
any time during the five (5) year period prior to the Closing Date a customer of
Seller. As used herein, the term "Territory" means the territory marked on the
map attached as EXHIBIT F hereto, such territory being the area in which Seller
conducted the Business prior to the Closing Date. The parties hereto
specifically acknowledge and agree that the remedy at law for any breach of the
foregoing will be inadequate and that the Purchaser, in addition to any other
relief available to it, shall be entitled to temporary and permanent injunctive
relief without the necessity of proving actual damage. In the event that the
provisions of this Section 10.5 should ever be deemed to exceed the limitation
provided by applicable law, then the parties hereto agree that such provisions
shall be reformed to set forth the maximum limitations permitted.
ARTICLE 11
INDEMNIFICATION
11.1 Definitions
-----------
For the purposes of this Article:
(a) "Indemnification Claim" shall mean a claim for indemnification
hereunder.
(b) "Purchaser Indemnitees" shall mean the Purchaser and its agents,
representatives, employees, officers, directors, shareholders and controlling
persons.
(c) "Seller Indemnitees" shall mean the Seller and its agents,
representatives, employees, officers, directors, shareholders, controlling
persons and affiliates.
(d) "Seller Indemnitors" shall mean Seller and each Shareholder,
jointly and severally.
(e) "Purchaser Indemnitor" shall mean Purchaser.
(f) "Losses" shall mean any and all demands, claims, actions or causes
of action, assessments, losses, diminution in value, damages (including special
and consequential damages), liabilities, costs, and expenses, including without
limitation, interest, penalties, cost of investigation and defense, and
reasonable attorneys' and other professional fees and expenses.
(g) "Third Party Claim" shall mean any claim, suit or proceeding
(including, without limitation, a binding arbitration or an audit by any taxing
authority) that is instituted against an Indemnitee by a person or entity other
-38-
than an Indemnitor and which, if prosecuted successfully, would result in a Loss
for which such Indemnitee is entitled to indemnification hereunder.
(h) "Indemnitee" means a Seller Indemnitee or a Purchaser Indemnitee
as the context may require.
(i) "Indemnitor" means a Seller Indemnitor or the Purchaser
Indemnitor as the context may require.
11.2 Agreement of Seller and Shareholders to Indemnify
-------------------------------------------------
Subject to the terms and conditions of this Article, the Seller
Indemnitors, jointly and severally, agree to indemnify, defend, and hold
harmless the Purchaser Indemnitees, and each of them, from, against, for, and in
respect of any and all Losses asserted against, or paid, suffered or incurred
by, such Purchaser Indemnitees resulting from, based upon, or arising out of:
(a) a breach of any material representation or warranty of an Seller
Indemnitor contained in or made pursuant to this Agreement or in any
certificate, Schedule, or Exhibit furnished by Indemnitor in connection
herewith;
(b) a breach of or failure to perform any covenant or agreement of an
Seller Indemnitor made in this Agreement;
(c) the failure to comply with the Bulk Sales Act or any comparable
law to the extent such act or law is or may be deemed to be applicable to the
transactions provided for herein; and
(d) any Excluded Liability.
11.3 Agreement of Purchaser to Indemnify. Subject to the terms and
-----------------------------------
conditions of this Article, Purchaser Indemnitor agrees to indemnify, defend and
hold harmless the Seller Indemnitees, and each of them, from, against, for and
in respect of any and all Losses asserted against, or paid, suffered or incurred
by a Seller Indemnitee and resulting from:
(a) a breach of any material representation or warranty of Purchaser
made or given in this Agreement;
(b) a breach or failure to perform any material covenant or agreement
of Purchaser made in this Agreement; or
(c) any Assumed Liability.
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11.4 Procedures for Indemnification.
-------------------------------
(a) An Indemnification Claim shall be made by an Indemnitee by
delivery of a written notice to Indemnitor requesting indemnification and
specifying the basis on which indemnification is sought and the amount of
asserted Losses and, in the case of a Third Party Claim, containing (by
attachment or otherwise) such other information as such Indemnitee shall have
concerning such Third Party Claim.
(b) If the Indemnification Claim involves a Third Party Claim the
procedures set forth in Section 11.5 hereof shall be observed by Indemnitee and
Indemnitor.
(c) If the Indemnification Claim involves a matter other than a Third
Party Claim, Indemnitor shall have thirty (30) days to object to such
Indemnification Claim by delivery of a written notice of such objection to such
Indemnitee specifying in reasonable detail the basis for such objection.
Failure to timely so object shall constitute a final and binding acceptance of
the Indemnification Claim by Indemnitor, and the Indemnification Claim shall be
paid in accordance with subsection (d) hereof. If an objection is timely
interposed by Indemnitor and the dispute is not resolved by Indemnitee and
Indemnitor within fifteen (15) days from the date Indemnitee receives such
objection, such dispute shall be resolved by arbitration as provided in Section
12.13 of this Agreement.
(d) No Indemnification Claim shall be made against Seller Indemnitors
until the total amount of all outstanding Indemnification Claims against the
Seller Indemnitors, as any of them, under Section 11.2 hereof equals Fifty
Thousand Dollars ($50,000.00), at which time and thereafter all outstanding
Indemnification Claims may be made, including those Indemnification Claims
subject to the aforementioned limitation. Notwithstanding anything to the
contrary herein contained, the maximum aggregate liability of any Seller
Indemnitor hereunder shall be an amount equal to such Seller Indemnitor's pro
rata portion of the sum of the Purchase Price and Receivables Proceeds (such pro
rata portion is to be based on the assumption that at the Closing Date, Seller
distributes the proceeds of the Purchase Price to the Shareholders based on
their pro rata share ownership).
11.5 Third Party Claims. The obligations and liabilities of the parties
------------------
hereunder with respect to a Third Party Claim shall be subject to the following
terms and conditions:
(a) Indemnitee shall give Indemnitor written notice of a Third Party
Claim promptly after receipt by Indemnitee of notice thereof, and Indemnitor may
undertake the defense, compromise and settlement thereof by representatives of
its own choosing reasonably acceptable to Indemnitee. The failure of Indemnitee
to notify Indemnitor of such claim shall not relieve Indemnitors of any
liability that it may have with respect to such claim except to the extent
Indemnitor demonstrates that the defense of such claim is prejudiced by such
failure. The assumption of the defense, compromise and settlement of any such
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Third Party Claim by Indemnitor shall be an acknowledgment of the obligation of
Indemnitor to indemnify Indemnitee with respect to such claim hereunder. If
Indemnitee desires to participate in, but not control, any such defense,
compromise and settlement, it may do so at its sole cost and expense. If,
however, Indemnitor fails or refuses to undertake the defense of such Third
Party Claim within twenty (20) days after written notice of such claim has been
given to Indemnitor by Indemnitee, Indemnitee shall have the right to undertake
the defense, compromise and settlement of such claim with counsel of its own
choosing. In the circumstances described in the preceding sentence, Indemnitee
shall, promptly upon its assumption of the defense of such claim, make an
Indemnification Claim as specified in Section 9.3 which shall be deemed an
Indemnification Claim that is not a Third Party Claim for the purposes of the
procedures set forth herein.
(b) In connection with the defense, compromise or settlement of any
Third Party Claim, the parties to this Agreement shall execute such powers of
attorney as may reasonably be necessary or appropriate to permit participation
of counsel selected by any party hereto and, as may reasonably be related to any
such claim or action, shall provide access to the counsel, accountants and other
representatives of each party during normal business hours to all properties,
personnel, books, tax records, contracts, commitments and all other business
records of such other party and will furnish to such other party copies of all
such documents as may reasonably be requested (certified, if requested).
11.6 Other Rights and Remedies Not Affected. The rights of an Indemnitee
--------------------------------------
under this Article 11 are independent of and in addition to such rights and
remedies as Indemnitee may have at law or in equity or otherwise for any
misrepresentation, breach of warranty or the failure to fulfill any agreement or
covenant hereunder on the part of Indemnitor, including without limitation the
right to seek specific performance, recession or restitution, none of which
rights or remedies shall be affected or diminished hereby.
11.7 Survival. All representations, warranties and agreements contained
--------
in this Agreement or in any certificate delivered pursuant to this Agreement
shall survive the Closings notwithstanding any investigation conducted with
respect thereto or any knowledge acquired as to the accuracy or inaccuracy of
any such representation or warranty.
11.8 Time Limitations. The Seller Indemnitors shall have no liability
----------------
under clause (a) of Section 11.2 with respect to: (a) the breach of any
representation or warranty, other than those set forth in Sections 5.10, 5.16,
5.17, and 5.21 hereof, unless on or before one (1) year after the Closing Date
Seller is given notice asserting an Indemnification Claim with respect thereto,
and (b) the breach of the representations and warranties contained in Sections
5.10, 5.16 and 5.17 hereof, unless notice asserting an Indemnification Claim
based thereon is given to Seller prior to the expiration of the applicable
statute of limitations for the assertion of liability against the Purchaser
based upon the matters that are the subject of the representations and
warranties contained in such Sections. An Indemnification Claim based upon a
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breach of the representations and warranties set forth in Section 5.21 or based
upon the failure of Seller and the Shareholders to perform the covenants and
agreements to be performed by them hereunder or based upon clause (c) of Section
11.2 hereof may not be made unless Seller is given notice asserting an
Indemnification Claim with respect thereto prior to the expiration of twenty
(20) years after the Closing Date. Purchaser shall have no liability under
Section 11.3 unless on or before two (2) years after the Closing Date Purchaser
is given notice asserting an Indemnification Claim.
11.9 Subrogation. Upon payment in full of any Indemnification Claim,
-----------
whether such payment is effected by set-off or otherwise, or the payment of any
judgment or settlement with respect to a Third Party Claim, Indemnitor shall be
subrogated to the extent of such payment to the rights of Indemnitee against any
person or entity with respect to the subject matter of such Indemnification
Claim or Third Party Claim.
11.10 Purchaser's Right of Set-Off. Notwithstanding anything to the
-----------------------------
contrary herein contained, Purchaser shall have the right to set-off against and
deduct from the Receivables Proceeds and any other amounts in the hands of
Purchaser that may belong to or be payable to Seller (a) any amount which any
Seller Indemnitor becomes obligated (whether by agreement between one or more of
the Seller Indemnitors and the Purchaser or by arbitration award) to pay to
Purchaser hereunder, (b) the amount of any Proration Item owed by Seller to
Purchaser as herein provided, and (c) any other amounts which may be payable by
Seller to Purchaser under this Agreement or by virtue of the transactions
provided for herein. Purchaser's right of set-off shall be superior to any
right of Seller to request or direct payment of any part or all of the
Receivables Proceeds to or for the account of Seller. Prior to exercising the
aforementioned right of set-off, Purchaser shall give Seller five (5) days
written notice of its intent to exercise such right. If within five (5) days of
receiving such notice, Seller objects in writing to Purchaser's exercise of its
right of set-off, then Purchaser shall set aside and hold the disputed amount
free of any obligation to pay over the disputed amount to or at the direction of
Seller, and Purchaser's asserted right of set-off will be submitted to
arbitration pursuant to Section 12.13 hereof. Notwithstanding anything to the
contrary in this Agreement, all amounts set aside and held pending the
resolution of arbitration shall remain set aside and held until the final
resolution of such arbitration pursuant to Section 12.13 hereof. If at the time
for payment of the Receivables Proceeds as provided in Section 1.3(g), or at the
time of any request by Seller for payment of Seller's indebtedness under Section
1.3(i), an Indemnification Claim has been asserted by Purchaser but the
Indemnitors obligation with respect thereto has not been finally determined or
agreed upon, Purchaser may withhold payment of such portion of the Receivables
Proceeds as shall be sufficient to pay and reimburse Purchaser for all losses
upon which the Indemnification Claim is based and shall not be required to pay
such withheld amount over to Seller until five (5) days following the final
determination or agreement that the Indemnitors are not obligated to the
Indemnitees with respect to such Indemnification Claim or if obligated the
Indemnitors have paid and satisfied such Indemnification Claim in full.
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ARTICLE 12
GENERAL PROVISIONS
12.1 Fees and Expenses. Except as otherwise specifically provided in
------------------
this Agreement, Seller and each Shareholder, on the one hand, and Purchaser, on
the other hand, shall pay their respective fees and expenses in connection with
the transactions contemplated by this Agreement.
12.2 Notices. All notices, request, demands, and other communications
--------
hereunder shall be in writing and shall be delivered (a) in person or by
courier, (b) mailed by first class registered or certified mail, or (c)
delivered by facsimile transmission, as follows:
(a) If to Seller:
C.R., Inc.
c/o The Xxx Xxxxxx Company
0000 XxXxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx X. Xxxxxxxx, Esq.
0000 XxXxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) If to Purchaser:
Satellink Paging Inc.
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
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with a copy (which shall not constitute notice) to:
Xxxxxx & Bird
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: X.X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or to such other address as the parties hereto may designate in writing to the
other in accordance with this Section 12.2. Any party may change the address to
which notices are to be sent by giving written notice of such change of address
to the other parties in the manner above provided for giving notice. If
delivered personally or by courier, the date on which the notice, request,
instruction or document is delivered shall be the date on which such delivery is
made and if delivered by facsimile transmission or mail as aforesaid, the date
on which such notice, request, instruction or document is received shall be the
date of delivery.
12.3 Assignment; Binding Effect. Except as provided in this Section
---------------------------
12.3, this Agreement shall not be assignable by any of the parties hereto
without the written consent of the other; provided, however, that Purchaser may
assign all of its rights hereunder to any subsidiary of Purchaser, but such
assignment shall not relieve Purchaser of its obligations hereunder in the event
such assignee shall fail timely to perform any of such obligations From and
after any such assignment, the word "Purchaser" shall include assignee.
12.4 No Benefit to Others. The representations, warranties, covenants,
--------------------
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and, in the case of Article 9 hereof, Indemnitee and its heirs,
executors, administrators, legal representatives, successors and assigns, and
they shall not be construed as conferring any rights on any other persons.
12.5 Headings, Gender, "Person" and "Affiliate". All section headings
------------------------------------------
contained in this Agreement are for convenience of reference only, do not form a
part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement. Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine, or
neuter, as the context requires. Any reference to a "person" herein shall
include an individual, firm, corporation, partnership, trust, governmental
authority or body, association, unincorporated organization or any other entity,
and any reference to an "affiliate," whether or not such term is capitalized,
with respect to a person shall mean a person or entity that is controlled by,
under common control with or controls such person.
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12.6 Counterparts. This Agreement may be executed in two (2) or more
-------------
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one counterpart has been signed by each party and
delivered to the other party hereto.
12.7 Integration of Agreement. This Agreement supersedes all prior
-------------------------
agreements, oral and written, between the parties hereto with respect to the
subject matter hereof. Neither this Agreement, nor any provision hereof, may be
changed, waived, discharged, supplemented, or terminated orally, but only by an
agreement in writing signed by the party against which the enforcement of such
change, waiver, discharge, or termination is sought.
12.8 Time of Essence. Time is of the essence in this Agreement.
----------------
12.9 Governing Law. This Agreement shall be governed by and construed
--------------
under the substantive laws of the State of Texas.
12.10 Partial Invalidity. Whenever possible, each provision hereof shall
-------------------
be interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other
provisions of this Agreement, and this Agreement shall be construed as if such
invalid, illegal, or unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or provisions would
result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable.
12.11 Investigation. No inspection, preparation, or compilation of
-------------
information or Schedules, or audit of the inventories, properties, financial
condition, or other matters relating to Seller conducted by or on behalf of
Purchaser pursuant to this Agreement shall in any way limit, affect, or impair
the ability of Purchaser to rely upon the representations, warranties,
covenants, and agreements of Seller and each Shareholder set forth herein. Any
disclosure made on one Schedule shall not be deemed made on any other Schedule,
unless appropriate cross-referencing is made. The covenants and representations
and warranties of Seller and Purchaser shall survive the Closing and the
execution and delivery of all instruments of conveyance for the periods set
forth in Section 11.7.
12.12 Public Announcements. Seller and each Shareholder and Purchaser
---------------------
will consult with each other before issuing any press releases or otherwise
making any public statements or filings with governmental entities with respect
to this Agreement or the transactions contemplated hereby and shall not issue
any press releases or make any public statements or filings with governmental
entities prior to such consultation and shall modify any portion thereof if the
other party reasonably objects thereto, unless the same may be required by
applicable law.
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12.13 Arbitration. The parties agree that any dispute between or among
-----------
them arising out of or based upon this agreement, the remaining acquisition
documents or the consummation of the transactions provided for herein shall be
submitted to and resolved by arbitration in Dallas, Texas in accordance with the
rules and procedures of the American Arbitration Association, and the decision
of the arbiter(s) in such dispute shall be final and binding on the parties to
such arbitration proceeding. Except as the arbiter(s) may otherwise award or
assess the expenses of any such proceeding, each party shall bear its own costs
and expenses, including the expense of its counsel, in any such arbitration
proceeding.
SIGNATURES ON FOLLOWING PAGE
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IN WITNESS WHEREOF, each party hereto has executed or caused this Agreement
to be executed on its behalf by its duly authorized officer or trustee, all as
of the day and year first above written.
PURCHASER:
SATELLINK PAGING INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Title: President
-----------------------------
SELLER:
C.R., INC.
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Title: President
----------------------------
SHAREHOLDERS:
/s/ Xxxxx Xxxxxx
----------------------------------
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxxx
----------------------------------
Xxxxx Xxxxxxx
XXX XXX XXXXXXX, AS TRUSTEE OF
THE SAFETON TRUST,
dated October 1, 1992
By: /s/ Xxx Xxx Xxxxxxx
-------------------------------
Xxx Xxx Xxxxxxx, Trustee
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