EXHIBIT 10.14
MERGER AGREEMENT
by and among
DAKOTA TELECOMMUNICATIONS GROUP, INC.,
DAKOTA WIRELESS SYSTEMS, INC.,
VANTEK COMMUNICATIONS, INC.
and
VAN/ALERT, INC.
and joined in by
XXXXX XXX XXXXXXX
and
XXXXX XXX XXXXXXX
December 5, 1997
MERGER AGREEMENT
THIS MERGER AGREEMENT (the "Agreement") is made as of December 5,
1997, by and among Dakota Telecommunications Group, Inc., a Delaware
corporation ("DTG"), Dakota Wireless Systems, Inc., a South Dakota
corporation and wholly owned subsidiary of DTG ("Wireless"), Vantek
Communications, Inc., a South Dakota corporation ("Vantek"), and Van/Alert,
Inc., a South Dakota corporation ("Van/Alert"). This Agreement is joined
in by XxXxx Xxx Xxxxxxx and Xxxxx Xxx Xxxxxxx, the sole shareholders of
Vantek and Van/Alert (each a "Seller" and collectively the "Sellers").
Vantek and Van/Alert are sometimes referred to in this Agreement each as a
"Company" and collectively as the "Companies." Capitalized terms used in
this Agreement and not otherwise defined are defined in Article 8 of this
Agreement.
Sellers and the boards of directors of DTG, Wireless, Vantek and
Van/Alert each deem it desirable and in the best interests of their
respective corporations for Vantek and Van/Alert to become affiliated with
DTG through the merger of each of Vantek and Van/Alert with and into
Wireless (the "Mergers") in accordance with the provisions of the South
Dakota Business Corporation Act (the "Act") and the terms and conditions of
this Agreement. The boards of directors and shareholders of Wireless,
Vantek and Van/Alert have unanimously approved this Agreement and the
transactions contemplated hereby (including the Mergers).
ACCORDINGLY, in consideration of the representations, warranties
and covenants contained in this Agreement, the Parties agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.1. MERGERS OF VANTEK AND VAN/ALERT WITH AND INTO
WIRELESS. Subject to the other conditions set forth in this Agreement, (i)
Vantek and Wireless will be, at the Effective Time, merged into a single
surviving corporation, which will be Wireless and (ii) Van/Alert and
Wireless will be, at the Effective Time, merged into a single surviving
corporation, which will be Wireless. Wireless is sometimes referred to in
this Agreement as the "Surviving Corporation." The Surviving Corporation
will continue its corporate existence under the name "Dakota Wireless
Systems, Inc." and will remain a South Dakota corporation governed by and
subject to the laws of that state.
SECTION 1.2. SHAREHOLDER APPROVAL. This Agreement and the
Mergers have been approved by the shareholders of Vantek, Van/Alert and
Wireless in accordance with the applicable laws of the State of South
Dakota.
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SECTION 1.3. CLOSING. The closing of the transactions
contemplated by this Agreement (the "Closing") will, to the extent
practicable, take place at the offices of Iway, Inc., Sioux Falls, South
Dakota, at 10:00 a.m. local time, on January 2, 1998, or at such other
place or later time as the Parties may agree. At the Closing, the Parties
will cause the Articles of Merger to be filed in accordance with the Act
and shall take all other lawful actions and do all other lawful things
called for by this Agreement or necessary to cause the Mergers to become
effective and to consummate the transactions contemplated by this
Agreement. In addition, at the Closing the Parties will execute such
additional agreements, instruments or certificates as DTG may reasonably
require.
SECTION 1.4. EFFECTIVE TIME. The Mergers will become effective
at the date and time set forth in the Articles of Merger and related Plans
of Merger attached as EXHIBITS A and B to this Agreement following the
issuance of Certificates of Merger by the Secretary of the State of South
Dakota. The time and date on which the Mergers shall become effective is
referred to in this Agreement as the "Effective Time."
SECTION 1.5. EFFECTS OF THE MERGERS. The effect of the Mergers
on Vantek, Van/Alert and Wireless will be as provided in Sections 47-6-9
through 47-6-12, inclusive, of the Act with respect to the merger of two
domestic corporations where the surviving corporation will be governed by
the laws of the State of South Dakota.
SECTION 1.6. SURVIVING CORPORATION. Immediately after the
Effective Time, the Surviving Corporation will have the following
attributes until they are subsequently changed in the manner provided by
law: (i) the name of the Surviving Corporation will be "Dakota Wireless
Systems, Inc.;" (ii) the articles of incorporation and bylaws of Wireless
will be the articles of incorporation and bylaws of the Surviving
Corporation; and (iii) the persons who, immediately before the Effective
Time, constitute the board of directors and officers of Wireless will be
the directors and officers, respectively, of the Surviving Corporation and
will hold office until their respective successors are duly elected and
qualified.
SECTION 1.7. CONVERSION OF SHARES. As a result of the Mergers,
the Vantek Shares and the Van/Alert Shares will be converted into cash,
notes and shares of DTG Common Stock as follows:
(a) CONVERSION OF VANTEK SHARES. At the Effective Time,
all of the Vantek Shares outstanding immediately before the
Effective Time will automatically become and be converted into
the right to receive (i) 24,000 validly issued, fully paid and
nonassessable shares of DTG Common Stock and (ii) one or more
notes in the form attached as EXHIBIT C to this Agreement having
an aggregate principal amount of $250,000, all to be divided
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among Vantek's shareholders pro rata based upon their
proportionate ownership of the outstanding Vantek Shares as of
the Effective Time.
(b) CONVERSION OF VAN/ALERT SHARES. At the Effective Time,
all of the Van/Alert Shares outstanding immediately before the
Effective Time will automatically become and be converted into
the right to receive cash in the aggregate amount of $250,000, to
be divided among Van/Alert's shareholders pro rata based upon
their proportionate ownership of the outstanding Van/Alert Shares
as of the Effective Time.
(c) CONVERSION OF WIRELESS COMMON STOCK. At the Effective
Time, each share of Wireless' common stock, par value $1.00 per
share, outstanding immediately before the Effective Time will
continue to be outstanding without change and will constitute all
of the outstanding capital stock of the Surviving Corporation as
of such date.
(d) EXCHANGE OF VANTEK AND VAN/ALERT CERTIFICATES. At the
Effective Time, Sellers will surrender their outstanding
certificates representing the Vantek Shares and the Van/Alert
Shares to DTG and receive in exchange therefor certificates
representing the number of shares of DTG Common Stock, cash and
notes into which the Vantek Shares and the Van/Alert Shares
represented by the certificates so surrendered will have been
converted as described above. The holders of Vantek Shares and
Van/Alert Shares outstanding immediately before the Effective
Time will have no rights as Vantek and Van/Alert shareholders as
of the Effective Time and each certificate representing the
Vantek Shares and the Van/Alert Shares will represent only the
right to receive shares of DTG Common Stock, cash and notes as
provided in this Agreement. On and after the Effective Time,
there will be no transfer of Vantek Shares and Van/Alert Shares
on the stock books of Vantek and Van/Alert and ownership of
Vantek Shares and Van/Alert Shares may be transferred only on the
stock books of Wireless.
SECTION 1.8. CONVEYANCES TO SURVIVING CORPORATION. Each Company
hereby agrees that from time to time after the Effective Time, as and when
requested by the Surviving Corporation, or by the Surviving Corporation's
successors and assigns, it will execute and deliver, or cause to be
executed and delivered, all such deeds, conveyances, assignments,
assurances and other instruments, and will take or cause to be taken such
further or other action as the Surviving Corporation, or the Surviving
Corporation's successors or assigns, may deem necessary or desirable to
vest or perfect in or confirm to the Surviving Corporation, or the
Surviving Corporation's successors and assigns, title to and possession of
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all the property, rights, privileges, powers, immunities, franchises,
interests and assets acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Mergers and to
otherwise carry out the intent and purposes of this Agreement. Each
Company hereby grants to the Surviving Corporation an irrevocable power of
attorney to execute and deliver all such deeds, conveyances, assignments
and assurances and to do all acts necessary, proper or convenient to
accomplish this purpose. The directors and officers of the Surviving
Corporation will be fully authorized in the name of Vantek and Van/Alert to
take any and all such action contemplated by this Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF SELLERS, VANTEK AND VAN/ALERT
Sellers, Vantek and Van/Alert, jointly and severally, represent
and warrant to DTG and Wireless as follows:
SECTION 2.1. DISCLOSURE SCHEDULE. Sellers will deliver to DTG and
Wireless within 15 days following the date of this Agreement the Disclosure
Schedule, which will include the numbered schedules specifically referred
to in this ARTICLE 2. The information contained in the Disclosure Schedule
is complete and accurate in all respects, and all documents that are
attached to or form a part of the Disclosure Schedule are true and complete
copies of the genuine original documents they purport to represent.
SECTION 2.2. ORGANIZATION AND GOOD STANDING. Each Company is a
corporation duly organized, validly existing and in good standing under the
laws of the state of South Dakota, with full corporate power and authority
to conduct its business as it is now being conducted, to own or use the
properties and assets that it purports to own or use, and to perform its
obligations under Applicable Contracts. Each Company is duly qualified to
do business as a foreign corporation and is in good standing in each state
or other jurisdiction in which either the ownership or use of the
properties owned or used by it or the nature of the activities conducted by
it requires such qualification. Copies of each Company's Organizational
Documents are attached to SCHEDULE 1 of the Disclosure Schedule. Neither
Company has any subsidiaries and, except as disclosed on SCHEDULE 1,
neither Company owns nor has any right to acquire any equity interest in
any other Person.
SECTION 2.3. CAPITALIZATION OF THE COMPANIES; OWNERSHIP. The
authorized capital stock of Vantek consists of 100,000 shares of common
stock, $1 par value each, of which _____ shares (i.e., the Vantek Shares)
are issued and outstanding. The authorized capital stock of Van/Alert
consists of 25,000 shares of common stock, $1 par value each, of which
______ shares (i.e., the Van/Alert Shares) are issued and outstanding.
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There are no other authorized classes or series of capital stock or other
equity securities of either Company. All of the Vantek Shares and the
Van/Alert Shares were validly issued, are fully paid and nonassessable, and
were not issued in violation of any preemptive or similar rights of any
shareholder. There are no outstanding Contracts that require Sellers to
sell any Vantek Shares or Van/Alert Shares or that require either Company
to issue or sell any shares of capital stock of the Company or securities
convertible into shares of capital stock of the Company. Sellers own,
beneficially and of record, all of the Vantek Shares and Van/Alert Shares
free and clear of all Encumbrances.
SECTION 2.4. FINANCIAL STATEMENTS. Copies of the audited financial
statements for each Company at and for the fiscal year ended December 31,
1996, and the reviewed financial statements for each Company at and for the
fiscal years ended December 31, 1995 and 1994 are attached to SCHEDULE 2 of
the Disclosure Schedule (the "Financial Statements"). Also attached to
SCHEDULE 2 are copies of the interim balance sheets and interim statements
of income of each Company at and for each month-end during the current
fiscal year, each prepared internally by the applicable Company (the
"Interim Financial Statements"). The Interim Financial Statements include
the balance sheet of each Company at September 30, 1997 (the "Balance
Sheet"). The Financial Statements and Interim Financial Statements present
fairly the financial condition of the applicable Company at the dates
indicated and its results of operations for the periods then ended, all in
accordance with GAAP applied on a basis consistent throughout such periods
and consistent with prior periods (subject, in the case of the Interim
Financial Statements, to normal recurring year-end adjustments, the effect
of which will not individually or in the aggregate be materially adverse,
and the absence of notes which if presented would not differ materially
from those included in the Balance Sheet)
SECTION 2.5. BOOKS AND RECORDS. The books of account, minute books,
stock record books and other records of each Company, all of which have
been made available to DTG and Wireless, are complete and correct and have
been maintained in accordance with sound business practices. The minute
book of each Company contains accurate and complete records of all meetings
held, and all corporate action taken, by the shareholders or board of
directors of the Company (or any committee of the board of directors). As
of the Closing Date, all of these books and records will be in the
possession of the applicable Company.
SECTION 2.6. NO UNDISCLOSED LIABILITIES. Neither Company has any
liabilities or obligations of any nature (whether known or unknown and
whether absolute, accrued, contingent or otherwise) except for liabilities
or obligations reflected or reserved against in the applicable Balance
Sheet and current liabilities incurred in the Ordinary Course of Business
since September 30, 1997, which will not, individually or in the aggregate,
materially adversely affect the Company or its business.
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SECTION 2.7. TAXES. Each Company has timely (a) filed all Tax
Returns pursuant to applicable Legal Requirements; (b) paid or made proper
provision for payment of all Taxes due and payable by it; and (c) withheld
or collected all Taxes required by applicable Legal Requirements and, to
the extent required, paid such Taxes to the proper Governmental Body or
other Person. The charges, accruals and reserves with respect to the Taxes
on the books of each Company are adequate (determined in accordance with
GAAP) and are at least equal to the applicable Company's liability for
Taxes. Neither Company has signed an extension with any Governmental Body
concerning any liability for Taxes and no open matters exist for any prior
periods. There is no proposed tax assessment against either Company and no
deficiency has been asserted against either Company as a result of any
examination by the IRS or other Governmental Body that has not been paid or
finally settled, and no grounds exist for the assertion of any deficiency
for any periods that have not been audited by the IRS or other applicable
Governmental Body. Copies of each Company's federal, state and local
income Tax Returns with supporting schedules filed for the fiscal years
ended December 31, 1996, 1995 and 1994 are attached to SCHEDULE 3 of the
Disclosure Schedule.
SECTION 2.8. NO MATERIAL ADVERSE CHANGE; ABSENCE OF RESTRICTED
EVENTS. Since December 31, 1996: each Company has conducted its
operations and affairs only in the Ordinary Course of Business; there has
not been any material adverse change in the business, operations,
properties, prospects, assets or condition of either Company; and no event
has occurred or circumstance exists that may result in such a material
adverse change. Except as disclosed on SCHEDULE 4 of the Disclosure
Schedule, since December 31, 1996, no Restricted Event has occurred with
respect to either Company.
SECTION 2.9. EMPLOYEES; LABOR RELATIONS.
(a) SCHEDULE 5 of the Disclosure Schedule contains the
following information for each employee of each Company
(including each employee on leave of absence or layoff status):
name; job title; current compensation paid or payable; vacation
accrued; and service credited for purposes of vesting and
eligibility to participate under any of the applicable Company's
Employee Benefit Plans. To Sellers' Knowledge, no key employee
of either Company intends to terminate his or her employment with
the Company. Each of the employees of each Company is employed
on an "at will" basis.
(b) Neither Company is now and neither Company has ever
been a party to any collective bargaining or other labor
Contract. Since January 1, 1992, there has not been, there is
not presently pending or existing and, to Sellers' Knowledge,
there is not Threatened, any strike, slowdown, picketing, work
stoppage, labor arbitration or proceeding concerning the
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grievance of any employee, application or complaint filed by an
employee or union with the National Labor Relations Board or any
comparable Governmental Body, organizational activity or other
labor dispute against or affecting either Company or its
premises, and no application for certification of a collective
bargaining agent is pending or to Sellers' Knowledge Threatened.
No event has occurred or circumstance exists that could provide
the basis for any work stoppage or other labor dispute. There is
no lockout of any employees by either Company and no such action
is contemplated by either Company. Each Company has complied
with all Legal Requirements relating to employment, equal
employment opportunity, nondiscrimination, immigration, wages,
hours, benefits, collective bargaining, the payment of social
security and similar taxes, occupational safety and health and
plant closing. Neither Company is liable for the payment of any
taxes, fines, penalties or other amounts, however designated, for
failure to comply with any of the foregoing Legal Requirements.
SECTION 2.10. EMPLOYEE BENEFIT PLANS.
(a) SCHEDULE 6 of the Disclosure Schedule sets forth each
Employee Benefit Plan maintained by either Company or covering
current or former (including retired) employees of either
Company. Copies of all written Employee Benefit Plans and all
agreements adopted or other material used in connection with or
relating to such Employee Benefit Plans (including descriptions
of vacation, separation and other personnel policies) are also
attached to SCHEDULE 6.
(b) Each Company has timely performed all of its
obligations (including, to the extent applicable, reporting,
disclosure, prohibited transaction, IRS qualification and funding
obligations) under its Employee Benefit Plans. Each Employee
Benefit Plan, and the administration of each Employee Benefit
Plan, complies and has complied with all applicable Legal
Requirements.
(c) Neither Company nor any predecessor or affiliate of
either Company has ever established, maintained or contributed to
or otherwise participated in, or had an obligation to establish,
maintain, contribute to or otherwise participate in, any Multi-Employer
Retirement Plan.
SECTION 2.11. TITLE TO PROPERTIES; ENCUMBRANCES. SCHEDULE 7 of the
Disclosure Schedule contains a list of all real property, leaseholds or
other real property interests of each Company. Except as disclosed on
SCHEDULE 7, each Company owns all the properties and assets (whether real,
personal or mixed and whether tangible or intangible) located in or at the
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facilities owned or operated by the applicable Company or reflected as
owned in the books and records of the applicable Company, including all of
the properties and assets reflected in the Balance Sheet and the Interim
Financial Statements (except for personal property sold since the date of
the Balance Sheet or the Interim Financial Statements, as the case may be,
in the Ordinary Course of Business). All properties and assets reflected
in the Balance Sheet and the Interim Financial Statements are free and
clear of all Encumbrances. All personal property owned by each Company
will be in the possession of the applicable Company on the Closing Date or
at such other location as is specified on SCHEDULE 7. All buildings,
plants and structures owned or leased by each Company lie wholly within the
boundaries of the real property owned or leased by the applicable Company
and do not encroach upon the property of, or otherwise conflict with the
property rights of, any other Person.
SECTION 2.12. CONDITION AND SUFFICIENCY OF ASSETS. The buildings,
plants, structures and equipment owned or used by each Company (a) are
structurally sound, are in good operating condition and repair and are
adequate for the uses to which they are being put; (b) do not need
maintenance or repairs except for ordinary, routine maintenance and repairs
that are not material in nature or cost; and (c) are sufficient for the
continued conduct of the applicable Company's business after the Closing in
substantially the same manner as conducted before the Closing.
SECTION 2.13. ACCOUNTS RECEIVABLE. All accounts receivable of each
Company that are reflected on the Balance Sheet or the Interim Financial
Statements or on the accounting records of the applicable Company as of the
Closing Date (collectively, the "Accounts Receivable") represent or will
represent valid obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business. Unless paid before
the Closing Date, the Accounts Receivable are, or will be as of the Closing
Date, current and collectible, and each of the Accounts Receivable either
has been or will be collected in full, without any set-off, within ninety
days after the day on which it first becomes due and payable.
SECTION 2.14. INVENTORY. All inventory of each Company, whether or
not reflected in the Balance Sheet or the Interim Financial Statements,
consists of a quality and quantity usable and salable in the Ordinary
Course of Business, except for obsolete items and items below standard
quality, all of which have been written off or written down to net
realizable value in the Balance Sheet or the Interim Financial Statements.
All inventories not written off have been priced at the lower of cost or
market on a first in, first out basis. The quantities of each item of
inventory (whether raw materials, work-in-process or finished goods) are
not excessive, but are reasonable in the present circumstances of the
applicable Company.
SECTION 2.15. LITIGATION. Except as set forth on SCHEDULE 8 of the
Disclosure Schedule, there is no Proceeding or Order pending against either
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Company or that otherwise relates to or may affect the business of, or any
of the property or assets owned or used by, either Company or that may
interfere with the transactions contemplated by this Agreement. To
Sellers' Knowledge, no such Proceeding or Order has been Threatened and no
event has occurred or circumstance exists that may give rise to or serve as
a basis for any such Proceeding or Order.
SECTION 2.16. AUTHORIZATION AND ENFORCEABILITY; NO CONFLICT WITH
OTHER INSTRUMENTS OR PROCEEDINGS.
(a) Sellers, Vantek and Van/Alert have full capacity, power
and authority to enter into and perform this Agreement and to
carry out the transactions contemplated by this Agreement. This
Agreement is binding upon Sellers, Vantek and Van/Alert and is
enforceable against Sellers, Vantek and Van/Alert in accordance
with its terms. The execution, performance and delivery of this
Agreement has been duly authorized, approved and adopted by all
requisite action of each Company's board of directors and
shareholders.
(b) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
by this Agreement will not (i) contravene the Organizational
Documents or result in a breach of any provision of, or
constitute a default under, any Applicable Contract; (ii) violate
any Legal Requirement or Order or give any Governmental Body the
right to revoke, withdraw, suspend, cancel, terminate or modify
any Governmental Authorization applicable to either Company;
(iii) result in the imposition of any Tax on DTG, Wireless or
either Company or accelerate any indebtedness of either Company
or increase the rate of interest payable by either Company with
respect to any indebtedness; or (iv) result in any Encumbrance
being created or imposed upon or with respect to any of the
property or assets owned or used by either Company. All
consents, approvals or authorizations of or declarations, filings
or registrations with any Person required in connection with the
execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated by this Agreement
(except for the filing of the Articles of Merger and related
Plans of Merger, which will be filed as contemplated in Article
1) are set forth on SCHEDULE 9 of the Disclosure Schedule and
will be obtained or made, as applicable, by Sellers, Vantek and
Van/Alert before the Closing.
SECTION 2.17. CONTRACTS. SCHEDULE 10 of the Disclosure Schedule sets
forth (and includes a copy of) each Material Contract to which either
Company is a party or by which either Company is bound or affected. Each
Material Contract is in full force and effect and is valid and enforceable
in accordance with its terms. Each Company and each other Person that is a
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party to a Material Contract has complied and is fully complying with the
terms of the applicable Material Contract, and no event has occurred or
circumstance exists that (with or without notice or lapse of time) may
contravene, conflict with or result in a violation or breach of, or give
either Company or any other Person the right to declare a default under,
any Material Contract.
SECTION 2.18. INTELLECTUAL PROPERTY. SCHEDULE 11 of the Disclosure
Schedule sets forth all Intellectual Property Assets presently owned or
used by either Company. Unless otherwise indicated on SCHEDULE 11, each
Company will own the entire right, title and interest in and to such
Intellectual Property Assets on the Closing Date free and clear of all
Encumbrances, and following the Closing each Company will have the right to
use each Intellectual Property Asset without payment to any other Person.
There is no infringement of or unlawful use by any Person of any of either
Company's Intellectual Property Assets, and neither Company has infringed
or unlawfully used any Intellectual Property Assets of any other Person.
SCHEDULE 11 also sets forth a list of all Contracts relating to
Intellectual Property Assets to which each Company is a party or by which
each Company is bound or affected. None of either Company's Intellectual
Property Assets is subject to any pending or to Sellers' Knowledge
Threatened claim or challenge, and there is no valid basis for asserting
any claim or challenge. The Intellectual Property Assets are all those
necessary for the operation of each Company's business as presently
conducted and are sufficient in form and quality so that following the
Closing Buyer can design, produce, manufacture, assemble and sell the
products and provide the services sold or provided by each Company before
the Closing in a manner that meets applicable specifications and conforms
to commercially acceptable quality standards.
SECTION 2.19. INSURANCE. SCHEDULE 12 of the Disclosure Schedule
contains a list of all policies of liability, crime, fidelity, life, fire,
product liability, workers' compensation, health, director and officer
liability and other forms of insurance owned or maintained by each Company,
including for each policy: the name of the insurer; the amount of coverage;
the type of insurance; the policy number; the renewal or expiration date;
and all pending claims under the policy. All of the insurance policies
listed on SCHEDULE 12 are outstanding and in full force, all premiums with
respect to the policies are currently paid and all duties of the insureds
under the policies have been fully discharged.
SECTION 2.20. NO ILLEGAL PAYMENTS. Neither Company nor any other
Person associated with or acting on behalf of either Company has used any
Company funds for unlawful contributions, gifts, entertainment or other
expenses or made any direct or indirect unlawful payments from Company
funds or established or maintained any unlawful or unrecorded funds.
SECTION 2.21. CUSTOMERS AND SUPPLIERS. Listed on SCHEDULE 13 of the
Disclosure Schedule are the ten largest customers and suppliers of each
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Company (by dollar volume) in terms of sales or purchases for the twelve
months ended December 31, 1996 and 1995, and for the eleven months ending
October 31, 1997, showing for each period the approximate total sales to
each customer and purchasers from each supplier. There has not been any
adverse change in the business relationship of either Company with any
customer or supplier listed on SCHEDULE 13 nor could an adverse change
reasonably be anticipated as a result of the consummation of the
transactions contemplated by this Agreement.
SECTION 2.22. PRODUCT WARRANTIES AND LIABILITIES. Set forth on
SCHEDULE 14 of the Disclosure Schedule are all warranties applicable to
products sold or services provided by each Company. Except as disclosed on
SCHEDULE 14, there are no claims against either Company to return products
in excess of an aggregate of $5,000 by any one purchaser, or $10,000 for
all purchasers considered collectively, by reason of alleged overshipments,
defective merchandise or otherwise, and there is no Proceeding pending or
to Sellers' Knowledge Threatened against either Company under any warranty
nor is there any basis upon which any claim could validly be made.
SCHEDULE 14 also summarizes all product liability claims that have been
asserted against each Company during the five years preceding the date of
this Agreement.
SECTION 2.23. CERTAIN RELATIONSHIPS. Except as disclosed on
SCHEDULE 15 of the Disclosure Schedule, neither Sellers nor any Related
Person is an owner, shareholder, creditor, director, agent, consultant or
employee of, or lender to, any Person engaged in a business that acts as a
supplier of any goods or services to either Company or any part of which is
in actual or potential competition with either Company. Neither Company
has any outstanding indebtedness to Sellers or any Related Person, and
neither Sellers nor any Related Person has any outstanding indebtedness to
either Company.
SECTION 2.24. PERMITS AND LICENSES; COMPLIANCE WITH LEGAL
REQUIREMENTS. All Governmental Authorizations necessary for each Company
to carry on its business as presently conducted are identified on SCHEDULE
16 of the Disclosure Schedule and have been timely obtained, are in full
force and effect and have been complied with. All fees and charges
incident to those Governmental Authorizations have been fully paid and are
current and no suspension or cancellation of any Governmental Authorization
has been Threatened or could result by reason of the transactions
contemplated by this Agreement. Neither Company is subject to, nor has it
been Threatened with, any Adverse Consequence as the result of a failure to
comply with any Legal Requirement applicable to it or the conduct or
operation of its business or the ownership or use of any of its properties
or assets, and no event has occurred or circumstance exists (with or
without notice or lapse of time) that may give rise to any such Adverse
Consequence. Each Company is presently, and during all applicable
limitations periods has been, in full compliance with all applicable Legal
Requirements.
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SECTION 2.25. INVESTMENT INTENT. Sellers are acquiring the DTG
Common Stock for their own accounts and not with a view to their
distribution within the meaning of the Securities Act of 1933, as amended
("Securities Act"). Sellers have no plan or intention to sell or otherwise
dispose of the shares of DTG Common Stock to be received by them in the
Mergers.
SECTION 2.26. NO BROKER'S FEES. Neither Sellers, Vantek or Van/Alert
nor anyone acting on any of their behalf, has incurred any liability or
obligation to pay fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement for which DTG or
Wireless or either Company could be liable.
SECTION 2.27. ACCURACY OF STATEMENTS. No representation or warranty
made by Sellers, Vantek or Van/Alert in this Agreement, the Disclosure
Schedule or any statement, certificate or schedule furnished, or to be
furnished, to DTG and Wireless pursuant to this Agreement or in connection
with the transactions contemplated by this Agreement contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements contained therein not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF DTG AND WIRELESS
DTG and Wireless, jointly and severally, represent and warrant to
Sellers, Vantek and Van/Alert as follows:
SECTION 3.1. ORGANIZATION AND GOOD STANDING. DTG is a Delaware
corporation and Wireless is a South Dakota corporation each duly organized,
validly existing and in good standing under the laws of the applicable
state, with full corporate power and authority to conduct their business as
they are now being conducted, to own or use the properties and assets that
they purport to own or use and to perform their obligations under
Applicable Contracts.
SECTION 3.2. CAPITALIZATION OF DTG AND WIRELESS; OWNERSHIP.
The authorized capital stock of Wireless consists of 50,000 shares of Class
A common stock, par value $1.00 per share, of which 1,700 shares are issued
and outstanding and 50,000 shares of Class B preferred stock, $1.00 par
value per share, of which no shares are issued and outstanding. All of the
issued and outstanding capital stock of Wireless is owned by DTG. The
authorized capital stock of DTG consists of 5,000,000 shares of common
stock, without par value, of which approximately 1,060,000 shares were
issued and outstanding as of September 30, 1997 and 250,000 shares of
preferred stock, without par value, none of which is outstanding. All DTG
Common Stock to be issued in the Mergers will, when issued, be duly
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authorized, validly issued, fully paid and nonassessable and will not be
subject to any preemptive rights. Except as provided in DTG's
Organizational Documents or as described in the Prospectus and Ballot/Proxy
Statement, and except for shares of DTG Common Stock that may be issued in
connection with pending acquisitions, the implementation of an Employee
Stock Ownership Plan and stock options or grants awarded to directors,
officers or employees of DTG, there are no outstanding Contracts that
require DTG or Wireless to sell any of their common or preferred shares or
that require DTG or Wireless to issue or sell any shares of capital stock
or securities convertible into shares of capital stock of DTG or Wireless.
SECTION 3.3. NO MATERIAL ADVERSE CHANGE; ABSENCE OF RESTRICTED
EVENTS. Except as described in any document filed by DTG with the SEC,
including the Prospectus and Ballot/Proxy Statement: since January 1,
1997, DTG has conducted its operations and affairs only in the Ordinary
Course of Business; there has not been any material adverse change in the
business, operations, properties, prospects, assets, financial condition,
income or expenses of DTG; and no event has occurred or circumstance
exists that may result in such a material adverse change.
SECTION 3.4. LITIGATION. Except for docketed Proceedings before
the South Dakota Public Utilities Commission (which will not, individually
or in the aggregate, materially adversely affect DTG or its business) or as
described in any document filed by DTG with the SEC, there is no Proceeding
or Order pending against DTG or that otherwise relates to or may affect the
business of, or any of the property or assets owned or used by, DTG that
could reasonably be expected to have a material adverse effect on DTG or
that may interfere with the transactions contemplated by this Agreement.
No such Proceeding or Order has been, to the Knowledge of DTG, Threatened
and no event has occurred or circumstance exists that may give rise to or
serve as a basis for any such Proceeding or Order.
SECTION 3.5. AUTHORIZATION AND ENFORCEABILITY; NO CONFLICT WITH
OTHER INSTRUMENTS OR PROCEEDINGS.
(a) DTG and Wireless have full capacity, power and
authority to enter into, deliver and perform this Agreement and
to carry out the transactions contemplated by this Agreement.
This Agreement is binding upon DTG and Wireless and is
enforceable against DTG and Wireless in accordance with its
terms.
(b) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
by this Agreement have been authorized by all necessary corporate
actions and will not (i) contravene the Organizational Documents
or result in a Breach of any provision of, or constitute a
default under, any Applicable Contract (subject to obtaining
required consents of the Rural Telephone Finance Cooperative
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("RTFC") ; (ii) violate any Legal Requirement or Order or give
any Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate or modify any Governmental Authorization
applicable to DTG or the Surviving Corporation; (iii) result in
the imposition of any Tax on the Surviving Corporation or
accelerate any indebtedness of DTG or the Surviving Corporation
or increase the rate of interest payable by DTG or the Surviving
Corporation with respect to any indebtedness; or (iv) result in
any Encumbrance being created or imposed upon or with respect to
any of the property or assets owned or used by DTG or Wireless,
except those in favor of the RTFC with respect to DTG's secured
financings through the RTFC.
SECTION 3.6. NO BROKER'S FEES. Neither DTG, Wireless, nor
anyone acting on their behalf, has incurred any liability or obligation to
pay fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which Sellers, Vantek or
Van/Alert could become liable.
SECTION 3.7. ACCURACY OF STATEMENTS. No representation or
warranty made by DTG or Wireless in this Agreement or any statement,
certificate or schedule furnished to Sellers, Vantek or Van/Alert pursuant
to this Agreement or in connection with the transactions contemplated by
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained therein
not misleading.
ARTICLE 4
COVENANTS AND AGREEMENTS
The Parties (as applicable) covenant and agree as follows:
SECTION 4.1. CONDUCT PENDING THE CLOSING. From the date of this
Agreement to the Closing Date, each Company will, and Sellers will cause
each Company to, conduct its operations and affairs only in the Ordinary
Course of Business. Each Company and Sellers will exercise their
reasonable best efforts to preserve intact the present business
organization and personnel of each Company and the goodwill of each Company
with all persons having business dealings with it, and will or will cause
each Company to comply with all Legal Requirements. From the date of this
Agreement to the Closing Date, neither Sellers nor either Company will,
without the prior written consent of DTG and Wireless: (a) enter into any
negotiations, discussions or agreements contemplating or respecting the
acquisition of either Company by any Person other than DTG or Wireless,
whether through a sale of stock, a merger or consolidation, the sale of all
or substantially all of the properties or assets of either Company, any
type of recapitalization or otherwise; (b) take any action that would
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interfere with or prevent the timely consummation or performance of this
Agreement; or (c) take any action that would constitute a Restricted Event
or which would be inconsistent in any respect with any of the
representations, warranties, covenants or obligations set forth in this
Agreement, as if such representations, warranties, covenants or obligations
were made at a time subsequent to such action.
SECTION 4.2. ACCESS AND INVESTIGATION BY DTG AND WIRELESS. From the
date of this Agreement to the Closing Date, Sellers and each Company will
give DTG and Wireless and their Representatives full and free access to
each Company's advisors, personnel, properties, contracts, books and
records, and other documents and data for the purpose of completing DTG's
and Wireless' investigation of each Company's business, properties and
assets; PROVIDED, HOWEVER, that (a) DTG and Wireless will conduct their
investigation in a manner that does not unreasonably interfere with the
normal operations and employee relationships of each Company and (b) DTG
and Wireless will hold any information obtained from Sellers or either
Company as part of their investigation in strict confidence and will return
all such written information upon request. Before the Closing, Sellers or
an officer of each Company designated by Sellers will introduce a
Representative designated by DTG and Wireless to those material customers
or suppliers of each Company as DTG and Wireless may identify. During
DTG's and Wireless' investigation, DTG and Wireless will have the right to
make copies of such materials as they deem appropriate.
SECTION 4.3. REASONABLE BEST EFFORTS; NOTICE OF BREACH OR FAILURE OF
CONDITION; FURTHER ASSURANCES. Each Party will use its or his reasonable
best efforts to fulfill the conditions required to be fulfilled by it or
him to bring about the timely consummation of the transactions contemplated
by this Agreement. Each Party will give prompt notice to the other of the
occurrence of any event or the failure of any event to occur that might
preclude or interfere with the satisfaction of any condition precedent to
the obligations of either Party under this Agreement or the timely
consummation of the transactions contemplated by this Agreement. After the
Closing, each Party will take all such further actions, execute and deliver
all such further documents and do all other acts and things as the other
Party may reasonably request for the purpose of carrying out the intent of
this Agreement and the other documents referred to in this Agreement.
SECTION 4.4. NON-COMPETE. In consideration of the consummation of
the transactions contemplated by this Agreement and no further
consideration, Sellers each covenant and agree that they will not, for a
period of five years from the Closing Date, compete, directly or
indirectly, or participate, directly or indirectly, in the ownership,
management, financing or control of, or act as a consultant or agent for,
any Person which competes or plans to compete, directly or indirectly, with
either Company. The geographic scope of the foregoing covenant is the
entire United States. Sellers each further covenant and agree that, for
the period specified, they will not induce any employee of either Company
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to leave the Company's employment or directly or indirectly assist any
other Person in requesting or inducing any employee of either Company to
leave the Company's employment. Finally, Sellers each covenant and agree
that they will not, from the date of this Agreement and forever afterward,
use or disclose to any Person any proprietary, secret or confidential
information of either Company, including customer names, sales and
manufacturing information and business and trade secrets. If any court of
competent jurisdiction finds that the time period of the foregoing
covenants is too lengthy or the scope of the covenants too broad, the
restrictive time period shall be deemed to be the longest period
permissible by law and the scope shall be deemed to comprise the largest
scope permissible by law under the circumstances. It is the Parties'
intent to protect and preserve the business and goodwill of each Company to
be acquired by DTG and Wireless and thus the Parties agree and direct that
the time period and scope of the covenants set forth in this SECTION 4.4 be
the maximum permissible duration and size. The foregoing covenant
not-to-compete shall terminate upon any liquidation of DTG pursuant to Chapter 7
of the Federal Bankruptcy Code.
ARTICLE 5
CONDITIONS TO OBLIGATION TO CLOSE
SECTION 5.1. CONDITIONS TO OBLIGATION OF DTG AND WIRELESS. DTG's and
Wireless' obligation to consummate the Mergers and to take the other
actions required to be taken by DTG and Wireless at the Closing is subject
to the satisfaction, at or before the Closing, of each of the following
conditions (any of which may be waived by DTG and Wireless, in whole or in
part):
(a) The representations and warranties set forth in
ARTICLE 2 of this Agreement, individually and collectively, must
have been accurate as of the date of this Agreement and must be
accurate as of the Closing Date as if made on the Closing Date;
(b) Sellers and each Company must have performed and
complied with all of their covenants and obligations under this
Agreement;
(c) Sellers and each Company must have delivered to DTG and
Wireless in form reasonably acceptable: (i) a written opinion of
Sellers' and each Company's legal counsel; (ii) a certificate
stating that the conditions specified in SECTIONS 5.1(A) and (B)
have been satisfied; (iii) a letter of resignation and release of
claims from each director and officer of each Company; and
(iv) such other certificates, instruments or documents as DTG and
Wireless may reasonably request;
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(d) There must not be any Proceeding or Order pending or
Threatened or any Legal Requirement in effect which would prevent
the consummation of any of the transactions contemplated by this
Agreement or which could result in any Adverse Consequence
against DTG, Wireless or either Company if the transactions
contemplated by this Agreement were consummated;
(e) Except as contemplated by this Agreement, there must
not have been any material adverse change in either Company's
condition, business, or operations, financial or otherwise, from
the date of this Agreement to the Closing Date.
(f) All authorizations, consents, and approvals by any
third parties, including any Governmental Authorization from any
Governmental Body including the RTFC, that are necessary for the
consummation of the transactions contemplated by this Agreement
shall have been received and shall be in full force and effect.
All necessary filings, declarations, and notices of DTG,
Wireless, each Company and Sellers with or to third parties shall
also have been made or given;
(g) Each Company must have entered into the following
agreements on terms reasonably acceptable to DTG and Wireless:
(i) new leases for the premises currently occupied by the
Companies and for the Companies' tower site; and (ii) an
employment agreement with XxXxx Xxx Xxxxxxx; and
(h) DTG and Wireless must be satisfied with the results of
their investigation of each Company's business, properties and
assets, including their review of the Disclosure Schedule
delivered pursuant to SECTION 2.1, and this Agreement and the
transactions contemplated by this Agreement must have been
approved and authorized by DTG's and Wireless' boards of
directors.
SECTION 5.2. CONDITIONS TO OBLIGATION OF SELLERS AND EACH COMPANY.
Sellers' and each Company's obligation to consummate the Mergers and to take
the other actions required to be taken by Sellers and each Company at the
Closing is subject to the satisfaction, at or before the Closing, of each
of the following conditions (any of which may be waived by Sellers and each
Company, in whole or in part):
(a) The representations and warranties set forth in
ARTICLE 3 of this Agreement, individually and collectively, must
have been accurate as of the date of this Agreement and must be
accurate as of the Closing Date as if made on the Closing Date;
(b) DTG and Wireless must have performed and complied with
all of their covenants and obligations under this Agreement;
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(c) DTG and Wireless must have delivered to Sellers and
each Company in form reasonably acceptable: (i) a written
opinion of DTG's and Wireless' legal counsel; (ii) a certificate
stating that each of the conditions specified in SECTIONS 5.2(A)
and (B) have been satisfied; and (iii) such other certificates,
instruments or documents as Sellers and each Company may
reasonably request;
(d) There must not be any Proceeding or Order pending or
Threatened or any Legal Requirement enacted since the date of
this Agreement which would prevent the consummation of any of the
transactions contemplated by this Agreement;
(e) All authorizations, consents, and approvals by any
third parties, including any Governmental Authorization from any
Governmental Body, that are necessary for the consummation of the
transactions contemplated by this Agreement shall have been
received and shall be in full force and effect. All necessary
filings, declarations, and notices of DTG, Wireless, each Company
and Sellers with or to third parties shall also have been made or
given; and
(f) Each Company must have entered into the following
agreements on terms reasonably acceptable to Sellers and each
Company: (i) and new leases for the premises currently occupied
by the Companies and the Companies' tower site; and (ii) an
employment agreement with XxXxx Xxx Xxxxxxx.
ARTICLE 6
TERMINATION
SECTION 6.1. TERMINATION EVENTS. This Agreement may be terminated by
mutual consent of the Parties or by notice given before or at the Closing:
(a) By either Party if a material Breach of any provision
of this Agreement has been committed by the other Party and the
Breach has not been waived;
(b) By DTG and Wireless if any of the conditions in SECTION
5.1 have not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other
than through the failure of DTG and Wireless to comply with their
obligations under this Agreement) and DTG and Wireless have not
waived the condition on or before the Closing Date;
(c) By Sellers and each Company if any of the conditions in
SECTION 5.2 have not been satisfied as of the Closing Date or if
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satisfaction of such a condition is or becomes impossible (other
than through the failure of Sellers and each Company to comply
with its or his obligations under this Agreement) and Sellers and
each Company have not waived the condition on or before the
Closing Date; or
(d) By either Party if the Closing has not occurred (other
than through the failure of the Party seeking to terminate this
Agreement to comply fully with its or his obligations under this
Agreement) on or before January 15, 1998, or such later date as
the Parties may agree upon.
SECTION 6.2. EFFECT OF TERMINATION. Each Party's right of
termination under SECTION 6.1 is in addition to any other rights it or he
may have under this Agreement or otherwise, and the exercise of a right of
termination will not be an election of remedies. If this Agreement is
terminated pursuant to SECTION 6.1, all further obligations of the Parties
under this Agreement will terminate. If this Agreement is terminated by a
Party because of a Breach of the Agreement by the other Party or because
one or more of the conditions to the terminating Party's obligations under
this Agreement is not satisfied as a result of the other Party's failure to
comply with its or his obligations under this Agreement, the terminating
Party's right to pursue all legal remedies will survive such termination
unimpaired.
ARTICLE 7
INDEMNIFICATION
SECTION 7.1. INDEMNIFICATION AND REIMBURSEMENT BY SELLERS. Sellers,
jointly and severally, will indemnify and hold harmless DTG and Wireless,
each Company and their respective Representatives and affiliates, and will
reimburse DTG and Wireless, each Company and their respective
Representatives and affiliates, for all Adverse Consequences arising from
or related to (a) any Breach by Sellers or either Company of any
representation, warranty, covenant or obligation of Sellers or either
Company in this Agreement or any other certificate or instrument delivered
by Sellers or either Company to DTG and Wireless pursuant to this
Agreement; and (b) the enforcement of indemnification rights under this
ARTICLE 7.
SECTION 7.2. INDEMNIFICATION AND REIMBURSEMENT BY BUYER. DTG and
Wireless will indemnify and hold harmless Sellers, and will reimburse
Sellers, for all Adverse Consequences arising from or related to (a) any
Breach by DTG and Wireless of any representation, warranty, covenant or
obligation of DTG and Wireless in this Agreement or any other certificate
or instrument delivered by DTG and Wireless to Sellers pursuant to this
Agreement, and (b) the enforcement of indemnification rights under this
-19-
ARTICLE 7.
SECTION 7.3. INDEMNIFICATION PROCEDURES.
(a) THIRD-PARTY CLAIMS.
(i) Promptly after receipt by a Person entitled to be
indemnified under this ARTICLE 7 (an "Indemnified Party") of
notice of the commencement of any Proceeding against it, such
Indemnified Party will, if a claim for indemnification is to be
made against a Party (an "Indemnifying Party") under this
ARTICLE 7, give notice to the Indemnifying Party of the
commencement of such Proceeding. The failure to promptly notify
the Indemnifying Party will not relieve the Indemnifying Party of
any liability that it may have to an Indemnified Party except to
the extent that the defense of such action was irreparably and
materially prejudiced by the Indemnifying Party's failure to
provide prompt notice.
(ii) If any Proceeding is brought against an
Indemnified Party and it gives notice to the Indemnifying Party
of the commencement of such Proceeding, the Indemnifying Party
will, unless the claim involves Taxes, be entitled to participate
in such Proceeding and, to the extent that it wishes (unless
(A) the Indemnifying Party is also a party to such Proceeding and
the Indemnified Party determines in good faith that joint
representation would be inappropriate or (B) the Indemnifying
Party fails to provide reasonable assurances to the Indemnified
Party of its financial capacity to defend such Proceeding and
provide indemnification with respect to such Proceeding), to
assume the defense of such Proceeding with counsel satisfactory
to the Indemnified Party. Following a proper assumption of
defense by an Indemnifying Party, as long as the Indemnifying
Party diligently conducts such defense it will not be liable for
any subsequent fees of legal counsel or other expenses incurred
by the Indemnified Party in connection with the defense of such
Proceeding, other than reasonable costs of investigation. If the
Indemnifying Party assumes the defense of a Proceeding, (A) it
will be conclusively established for purposes of this Agreement
that the claims made in that Proceeding are within the scope of
and subject to indemnification; (B) no compromise or settlement
of such claims may be effected by the Indemnifying Party without
the Indemnified Party's consent unless (x) there is no finding or
admission of any violation of Legal Requirements or any violation
of the rights of any Person and no effect on any other claims
that may be made by or against the Indemnified Party, and (y) the
sole relief provided is monetary damages that are paid in full by
the Indemnifying Party concurrently with the compromise or
settlement; and (C) the Indemnifying Party will have no liability
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with respect to any compromise or settlement of such claims
effected without its consent. If notice is given to an
Indemnifying Party of the commencement of any Proceeding and the
Indemnifying Party does not within ten days give notice to the
Indemnified Party of its election to assume the defense of such
Proceeding, the Indemnifying Party will be bound by any
determination made in such Proceeding or any compromise or
settlement effected by the Indemnified Party.
(iii) Notwithstanding the foregoing, if an
Indemnified Party determines in good faith that there is a
reasonable probability that a Proceeding may adversely affect it
or its affiliates other than as a result of monetary damages for
which it would be entitled to indemnification under this
Agreement, the Indemnified Party may, by notice to the
Indemnifying Party, assume the exclusive right to defend,
compromise or settle such Proceeding, but the Indemnifying Party
will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its
consent (which may not be unreasonably withheld).
(iv) The Parties will make available to each other and
each other's legal counsel and other professional advisors all of
its or his books and records relating to a third-party claim and
each Party will render to the other assistance as may be
reasonably required in order to insure the proper and adequate
defense of a third-party claim.
(v) Each Party hereby consents to the non-exclusive
jurisdiction of any court in which a Proceeding is brought
against any Indemnified Party for purposes of any claim that an
Indemnified Party may have under this Agreement with respect to
such Proceeding or the matters alleged therein.
(b) OTHER CLAIMS. A claim for indemnification for any
matter not involving a third-party claim may be asserted by
notice to the Party from whom indemnification is sought.
SECTION 7.4. SET-OFF. Each Indemnified Party may, as one of its
remedies to effect indemnification under this ARTICLE 7, withhold or cause
to be withheld and set-off amounts payable following the Closing to the
Indemnifying Party. The exercise of a right of set-off in good faith,
whether or not ultimately deemed to be justified, will not constitute a
default of any obligation against which such set-off is made.
SECTION 7.5. BASKET. Neither Party will have any liability under
this ARTICLE 7 with respect to claims of Breach of the representations and
warranties set forth in this Agreement until the aggregate amount of all
Adverse Consequences relating to Breaches of such representations and
-21-
warranties exceeds $12,000, and then only for the amount by which such
Adverse Consequences exceed $12,000 (the "Basket"); provided that no
Basket shall be applicable, and there shall be first dollar indemnity, for
claims under SECTIONS 2.3, 2.13, 2.26 or 3.4 of this Agreement or in the
event of fraud or an intentional Breach.
ARTICLE 8
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings specified or referred to in this ARTICLE 8:
"ADVERSE CONSEQUENCE" means any loss, cost, liability (including any
Environmental Liability), penalty, Tax, claim, damage, expense (including
cost of investigation, defense, settlement and reasonable attorneys' and
other professional fees), responsibility, disability, remedial action or
diminution of value.
"ACCOUNTS RECEIVABLE" has the meaning set forth in SECTION 2.13 of
this Agreement.
"APPLICABLE CONTRACT" means any Contract (a) under which either
Company has or may acquire any rights; (b) under which the Company is or
may become subject to any obligation or liability; or (c) by which the
Company or any of the property or assets owned or used by the Company is or
may become bound.
"BALANCE SHEET" has the meaning set forth in SECTION 2.4 of this
Agreement.
"BASKET" has the meaning set forth in SECTION 7.5 of this Agreement.
"BREACH" means, as to any representation, warranty, covenant,
obligation or other provision of this Agreement or any instrument or
document delivered pursuant to this Agreement, (a) any inaccuracy in, or
any failure to perform or comply with, such representation, warranty,
covenant, obligation or other provision or (b) any claim by any Person or
other occurrence or circumstance that is or was inconsistent with such
representation, warranty, covenant, obligation or other provision, in
either case regardless of whether deliberate, reckless, negligent, innocent
or unintentional.
"BUYER" has the meaning set forth in the first paragraph of this
Agreement.
"CLOSING" has the meaning set forth in SECTION 1.3 of this Agreement.
-22-
"CLOSING DATE" means the date and time as of which the Closing
actually takes place.
"COMPANY" has the meaning set forth in the preamble to this Agreement.
"CONTRACT" means any agreement, contract, obligation, promise or
undertaking (whether written or oral and whether express or implied) that
is legally binding.
"DTG" has the meaning set forth in the first paragraph of this
Agreement.
"DTG COMMON STOCK" means the common stock, no par value, of DTG.
"DISCLOSURE SCHEDULE" has the meaning set forth in SECTION 2.1 of the
Agreement.
"EMPLOYEE BENEFIT PLAN" means any "employee pension benefit plan" or
"employee welfare benefit plan" as defined under ERISA, any incentive
compensation plan, benefit plan for retired employees, plan or Contract
providing for bonuses, pensions, profit-sharing, stock options, stock
purchase rights, deferred compensation, insurance or retirement benefits of
any nature, in each case whether written or oral.
"ENCUMBRANCE" means any charge, claim, community property interest,
condition, equitable interest, mortgage, lien, option, pledge, security
interest, right of first refusal or restriction of any kind, including any
restriction on use, voting (in the case of any security), transfer, receipt
of income or exercise of any other attribute of ownership.
"ENVIRONMENT" means soil, land surface or subsurface strata, surface
waters (including navigable waters and ocean waters), groundwaters,
drinking water supply, stream sediments, ambient air (including indoor
air), plant and animal life and any other environmental medium or natural
resource.
"ENVIRONMENTAL LAW" means any Legal Requirement designed: (a) to
advise appropriate authorities, employees and the public of intended,
threatened or actual releases of pollutants or hazardous substances or
materials, violations or discharge limits, or other prohibitions and of the
commencements of activities, such as resource extraction or construction,
that could have significant impact on the Environment; (b) to prevent or
acceptably minimize the release or emission of pollutants or hazardous
substances or materials into the Environment; (c) to reduce the quantities,
prevent the release and minimize the hazardous characteristics of wastes
that are generated; (d) to regulate the generation, treatment, storage,
handling or disposal of hazardous substances; (e) to assure that products
are designed, formulated, packaged or used so that they do not present
unreasonable risks to human health or the Environment when used or disposed
-23-
of; (f) to protect resources, species or ecological amenities; (g) to
acceptably minimize the risks inherent in transportation of hazardous
substances, pollutants, oil or other potentially harmful substances; (h) to
clean up pollutants that have been released, prevent the threat of release
or pay the costs of such clean up or prevention; (i) to make responsible
parties pay private parties, or groups of them, for damages done to their
health or Environment, or to permit self-appointed representatives of the
public interest to recover for injuries done to public assets; or (j) to
regulate in any manner the potential impact of an activity on the
Environment.
"ENVIRONMENTAL LIABILITY" means any Adverse Consequence arising from
or relating to Environmental Law or Occupational Safety and Health Law with
respect to acts or omissions by the Company or any predecessor or affiliate
or conditions in existence or events or circumstances having occurred, in
each case on or before the Closing Date, including (a) any environmental,
health or safety matters or conditions (including on-site or off-site
contamination, occupational safety and health and regulation of chemical
substances or products); and (b) any responsibility for response costs,
corrective action or actions to achieve compliance, including any cleanup,
removal, containment or other remediation or response action ("Cleanup")
required by applicable Environmental Law or Occupational Safety and Health
Law (whether or not such Cleanup has been required or requested by any
Governmental Body or any other Person) and for any natural resource
damages. The terms "removal," "remedial," and "response action" include the
types of activities covered by the United States Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
9601 et seq., as amended, or any similar state law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"FINANCIAL STATEMENTS" has the meaning set forth in SECTION 2.4 of
this Agreement.
"GAAP" means generally accepted United States accounting principles.
"GOVERNMENTAL AUTHORIZATION" means any approval, consent, license,
permit, waiver or other authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.
"GOVERNMENTAL BODY" means any: (a) nation, state, county, city, town,
village, district or other jurisdiction of any nature; (b) federal, state,
local, municipal, foreign or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official or entity and any court or other tribunal);
(d) multi-national organization or body; or (e) body exercising, or
entitled or purporting to exercise, any administrative, executive,
-24-
judicial, legislative, police, regulatory or taxing authority or power of
any nature.
"INDEMNIFIED PARTY" has the meaning set forth in SECTION 7.3 of this
Agreement.
"INDEMNIFYING PARTY" has the meaning set forth in SECTION 7.3 of this
Agreement.
"INTELLECTUAL PROPERTY ASSETS" include all (a) legal names of Persons,
fictional business names, trading names, registered and unregistered
trademarks, service marks and applications; (b) patents and patent
applications; (c) copyrights both in published works and unpublished works;
(d) rights in mask works; and (e) know-how, trade secrets, confidential
information, software, technical information, process technology, plans,
drawings, specifications, bills of material, blue prints and other similar
data.
"INTERIM FINANCIAL STATEMENTS" has the meaning set forth in SECTION
2.4 of this Agreement.
"IRS" means the Internal Revenue Service.
"KNOWLEDGE" means actual awareness of a particular fact or other
matter or awareness that a prudent individual could be expected to obtain
in the course of conducting a reasonably comprehensive investigation
concerning the existence of such fact or other matter.
"LEGAL REQUIREMENT" means any federal, state, local, municipal,
foreign, international, multinational or other constitution, law (including
any Environmental Law or Occupational Safety and Health Law), ordinance,
principle of common law, statute, code, regulation, rule or treaty.
"MATERIAL CONTRACT" means any Applicable Contract: (a) that involves
performance of services or delivery of goods or materials by or to the
Company of an amount in excess of $5,000; (b) that involves expenditures or
receipts by or of the Company in excess of $5,000; (c) that relates to the
ownership, sale or use of real or personal property, except those relating
to personal property having a value per item or aggregate payments of less
than $5,000 and with a term of less than one year; (d) that relates to
Intellectual Property Assets; (e) that involves the sharing of profits,
losses, costs or liabilities by the Company with any other Person or by any
other Person with the Company; (f) that provides for payments to or by any
Persons based on sales, purchases or profits, other than direct payments
for goods; (g) that grants a power of attorney; (h) that was entered into
other than in the Ordinary Course of Business and contains or provides for
an undertaking by the Company to be responsible for consequential damages;
(i) that relates to capital expenditures in excess of $5,000; (j) that
limits the freedom of the Company to compete in any line of business or
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geographic area; (k) that contains a guaranty by the Company of performance
or payment by another Person; (l) that relates to indebtedness for borrowed
money or that creates an Encumbrance in any of the Company's properties or
assets; (m) that relates to the length, duration or condition of employment
or the termination thereof and which cannot be terminated by the Company on
notice without liability; and (n) that amends, supplements or modifies any
of the foregoing.
"MERGERS" has the meaning set forth in the first paragraph to this
Agreement.
"MULTI-EMPLOYER RETIREMENT PLAN" has the meaning set forth in
Section 3(37)(A) of ERISA.
"OCCUPATIONAL SAFETY AND HEALTH LAW" means any Legal Requirement
designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards, and any program, whether
governmental or private, designed to provide safe and healthful working
conditions.
"ORDER" means any award, decision, injunction, judgment, order,
ruling, subpoena or verdict entered, issued, made or rendered by any court,
administrative agency or other Governmental Body or by any arbitrator.
"ORDINARY COURSE OF BUSINESS" means in accordance with the usages of
trade prevailing in the industry in which the Company operates and in
accordance with the Company's historical and customary day-to-day practices
with respect to the activity in question.
"ORGANIZATIONAL DOCUMENTS" means the complete charter and the bylaws
of the Company, including all amendments.
"PARTY" or "PARTIES" has the meaning set forth in the first paragraph
of this Agreement.
"PERSON" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization or other entity or
Governmental Body.
"PROCEEDING" means any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"PROSPECTUS AND BALLOT/PROXY STATEMENT" means the document filed by
DTG with the SEC on Form S-4 regarding the conversion of DTG's predecessor
from a cooperative corporation into a South Dakota business corporation and
the subsequent merger of that entity with and into DTG.
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"PURCHASE PRICE" has the meaning set forth in SECTION 1.2 of this
Agreement.
"RELATED PERSON" means with respect to a particular individual:
(a) each other member of such individual's Family; (b) any Person that is
directly or indirectly controlled by any one or more members of such
individual's Family; (c) any Person in which members of such individual's
Family hold (individually or in the aggregate) a Material Interest; and
(d) any Person with respect to which one or more members of such
individual's Family serves as a director, officer, partner, executor or
trustee (or in a similar capacity). For purposes of this definition,
(a) the "Family" of an individual includes (i) the individual; (ii) the
individual's spouse; (iii) any other natural person who is related to the
individual or the individual's spouse within the second degree; and
(iv) any other natural person who resides with such individual; and
(b) "Material Interest" means direct or indirect beneficial ownership (as
defined in Rule 13D-3 under the Securities Exchange Act of 1934) of voting
securities or other voting interests representing at least 20% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 20% of the outstanding equity securities or
equity interests in a Person.
"REPRESENTATIVE" means with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor or other
representative of such Person, including legal counsel, accountants and
financial advisors.
"RESTRICTED EVENT" means (a) any declaration or payment of any
dividend or other distribution or payment in respect of shares of capital
stock; (b) any amendment of the Organizational Documents; (c) any payment
or increase of any bonuses, salaries or other compensation to any
shareholder, director, officer or (except in the Ordinary Course of
Business) employee or entry into any employment, severance or similar
Contract with any director, officer or employee; (d) the adoption of, or
increase in the payments to or benefits under, any Employee Benefit Plan
for or with any employees of the Company; (e) any damage to or destruction
or loss of any property or assets of the Company, whether or not covered by
insurance, materially and adversely affecting the properties, assets,
business, financial condition or prospects of the Company; (f) the entry
into, termination of or receipt of notice of termination of any license,
distributorship, dealer, sales representative, joint venture, credit or
similar Contract or transaction involving a total remaining commitment by
the Company of more than $10,000; (g) any sale (other than sales of
inventory in the Ordinary Course of Business), lease or other disposition
of any property or asset of the Company or the imposition of any
Encumbrance on any material property or asset of the Company, including the
sale, lease or disposition of any Intellectual Property Asset; (h) the
cancellation or waiver of any claims or rights with a value to the Company
in the aggregate in excess of $10,000; (i) any material change in the
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accounting methods used by the Company; or (j) any agreement or commitment,
whether written or oral, to do any of the foregoing.
"RTFC" has the meaning set forth in SECTION 3.5 (B) of this Agreement.
"SEC" means the Securities and Exchange Commission.
"SELLERS" has the meaning set forth in the first paragraph of this
Agreement.
"SHARES" has the meaning set forth in SECTION 1.1 of this Agreement.
"SURVIVING CORPORATION" has the meaning set forth in SECTION 1.1 of
this Agreement.
"TAX" means any tax (including, without limitation, any income tax,
capital gains tax, value-added tax, sales tax, property tax, gift tax or
estate tax), levy, assessment, tariff, duty (including any customs duty),
deficiency or other fee, and any related charge or amount (including any
fine, penalty or interest), imposed, assessed or collected by or under the
authority of any Governmental Body or payable pursuant to any tax-sharing
agreement or any other Contract relating to the sharing of payment of any
such tax, levy, assessment, tariff, duty, deficiency or fee.
"TAX RETURN" means any return (including, without limitation, any
information return), report, statement, schedule, notice, form or other
document or information filed with or submitted to, or reported to be filed
with or submitted to, any Governmental Body in connection with the
determination, assessment, collection or payment of any Tax or in
connection with the administration, implementation or enforcement of or
compliance with any Legal Requirement relating to any Tax.
"THREATENED" means, as to any claim, Proceeding, dispute, action or
other matter, that a demand or statement has been made (orally or in
writing), a notice has been given (orally or in writing) or an event has
occurred or some other circumstance exists that would lead a prudent Person
to conclude that such a claim, Proceeding, dispute, action or other matter
is reasonably likely to be asserted, commenced, taken or otherwise pursued
in the future.
"VAN/ALERT" has the meaning set forth in the first paragraph of this
Agreement.
"VAN/ALERT SHARES" means the outstanding shares of common stock of
Van/Alert, $1.00 par value each.
"VANTEK" has the meaning set forth in the first paragraph of this
Agreement.
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"VANTEK SHARES" means the outstanding shares of common stock of
Vantek, $1.00 par value each.
ARTICLE 9
GENERAL
SECTION 9.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS. All representations, warranties, covenants and agreements made
by any Party to this Agreement will survive the Closing and any
investigation at any time made by or on behalf of the other Party before or
after the Closing. No investigation by or Knowledge of DTG or Wireless or
its Representatives will affect in any manner the representations,
warranties, covenants or agreements of Sellers and each Company set forth
in this Agreement (or in any document to be delivered in connection with
the consummation of the transactions contemplated by this Agreement) or
DTG's and Wireless' rights to rely thereon, and such representations,
warranties, covenants and agreements will survive any such investigation.
SECTION 9.2. BINDING EFFECT; BENEFITS; ASSIGNMENT. All of the terms
of this Agreement will be binding upon, inure to the benefit of and be
enforceable by and against the heirs and legal representatives of Sellers
and the successors and authorized assigns of DTG, Wireless and each
Company. Except as otherwise expressly provided in this Agreement, nothing
in this Agreement, express or implied, is intended to confer upon any other
Person any rights or remedies under or by reason of this Agreement, this
Agreement being for the exclusive benefit of the Parties and their
respective heirs, legal representatives, successors and assigns. Neither
Party will assign any of its or his respective rights or obligations under
this Agreement to any other Person without the prior written consent of the
other Party, except that DTG and Wireless may assign their rights to a
direct or indirect subsidiary of DTG or Wireless.
SECTION 9.3. ENTIRE AGREEMENT. This Agreement, and the exhibits and
schedules to this Agreement (including the Disclosure Schedule), and the
agreements referred to in this Agreement set forth the entire agreement and
understanding of the Parties in respect of the transactions contemplated by
this Agreement and supersede all prior agreements, arrangements and
understandings relating to the subject matter hereof. No representation,
promise, inducement or statement of intention has been made by either Party
that is not embodied in this Agreement or in the documents referred to in
this Agreement, and neither Party will be bound by or liable for any
alleged representation, promise, inducement or statement of intention not
so set forth.
SECTION 9.4. AMENDMENT AND WAIVER. This Agreement may be amended,
modified, superseded or canceled and any of the terms, covenants,
representations, warranties or conditions hereof may be waived only by a
written instrument executed by the Parties or, in the case of a waiver, by
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or on behalf of the Party waiving compliance. The failure of any Party at
any time to require performance of any provision of this Agreement will in
no manner affect the right of that Party at a later time to enforce such
provision. No waiver by any Party of any condition or of any Breach of any
term, covenant, representation or warranty contained in this Agreement, in
any one or more instances, will be deemed to be or construed as a further
or continuing waiver of any such condition or of any Breach of the term,
covenant, representation or warranty or any other term, covenant,
representation or warranty set forth in this Agreement.
SECTION 9.5. GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of the state of South Dakota as
applicable to contracts made and to be performed in the state of South
Dakota without regard to conflicts of laws principles.
SECTION 9.6. PUBLIC DISCLOSURE. Except as may be required by
applicable law or the rules of any national securities exchange or
automated quotation service, neither Party will make any public disclosure
of the existence or terms of this Agreement or the transactions
contemplated by this Agreement without the prior written consent of the
other Party, which consent will not be unreasonably withheld.
SECTION 9.7. NOTICES. All notices, requests, demands and other
communications to be given pursuant to the terms of this Agreement will be
in writing and will be deemed to have been duly given if delivered by hand,
sent by facsimile with confirmation, sent by a nationally recognized
overnight mail service, or mailed first class, postage prepaid:
(a) If to Buyer: with a copy to:
Dakota Telecommunications Xxxxxx Xxxxxxxx & Xxxx LLP
Group, Inc. 000 Xxx Xxxx Xxxxxxxx
X.X. Xxx 00 111 Lyon St., N.W.
Highway 46 Grand Rapids, Michigan 49503-2487
Xxxxx, Xxxxx Xxxxxx 00000
Telephone: 605/000-0000 Telephone: 616/000-0000
Facsimile: 605/263-3844 Facsimile: 616/752-2510
Attention: Xxxxx X. Xxxxxxxx Attention: Xxxxx X. Xxxxxx
(b) If to Sellers: with a copy to:
Xx. XxXxx Xxx Xxxxxxx and Samp Law Firm
Xx. Xxxxx Xxx Xxxxxxx Box 495
607 Maple Sioux Falls, South Dakota 57101
Xxxxxxxxxx, Xxxxx Xxxxxx 00000 Telephone: 605/000-0000
Telephone: ______________ Facsimile: 605-334-6630
Facsimile: ______________ Attention: Xxxxxx X. Xxxx
Either Party may change its address, telephone number of facsimile number
by prior written notice to the other Party.
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SECTION 9.8. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when so executed will be deemed to be an
original and such counterparts will together constitute one and the same
agreement.
SECTION 9.9. EXPENSES. Each Party will pay its or his own respective
expenses, costs and fees (including attorneys' and accountants' fees)
incurred in connection with the negotiation, preparation, execution and
delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement, provided that none of such expenses, costs
or fees will be paid by either Company.
SECTION 9.10. SEVERABILITY. Any provision, or clause of any
provisions, of this Agreement that may be found to be contrary to South
Dakota law or otherwise unenforceable will not affect the remaining terms
of this Agreement, which will be construed as if the unenforceable
provision or clause were absent from this Agreement.
SECTION 9.11. HEADINGS; CONSTRUCTION; TIME OF ESSENCE. The headings
of the sections and paragraphs in this Agreement have been inserted for
convenience of reference only and will not restrict or otherwise modify any
of the terms or provisions of this Agreement. Unless otherwise expressly
provided, the word "including" whenever used in this Agreement does not
limit the preceding words or terms. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of the essence.
Masculine terms are deemed to include the feminine equivalent.
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The parties have executed this Agreement as of the date stated in
the first paragraph of this Agreement.
DAKOTA TELECOMMUNICATIONS
GROUP, INC.
By _____________________________________
Its _________________________________
"DTG"
DAKOTA WIRELESS SYSTEMS, INC.
By _____________________________________
Its _________________________________
"Wireless"
VANTEK COMMUNICATIONS, INC.
By _____________________________________
Its _________________________________
"Vantek"
VAN/ALERT, INC.
By _____________________________________
Its _________________________________
"Van/Alert"
________________________________________
XxXxx Xxx Xxxxxxx
________________________________________
Xxxxx Xxx Xxxxxxx
"Sellers"
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TABLE OF CONTENTS
PAGE
ARTICLE 1 - THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Mergers of Vantek and Van/Alert with and into
Wireless . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Shareholder Approval . . . . . . . . . . . . . . . . 1
Section 1.3. Closing . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4. Effective Time . . . . . . . . . . . . . . . . . . . 2
Section 1.5. Effects of the Mergers . . . . . . . . . . . . . . . 2
Section 1.6. Surviving Corporation . . . . . . . . . . . . . . . . 2
Section 1.7. Conversion of Shares . . . . . . . . . . . . . . . . 2
Section 1.8. Conveyances to Surviving Corporation . . . . . . . . 3
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF SELLERS, VANTEK AND
VAN/ALERT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.1. Disclosure Schedule . . . . . . . . . . . . . . . . . 4
Section 2.2. Organization and Good Standing. . . . . . . . . . . . 4
Section 2.3. Capitalization of the Companies; Ownership. . . . . . 4
Section 2.4. Financial Statements. . . . . . . . . . . . . . . . . 5
Section 2.5. Books and Records . . . . . . . . . . . . . . . . . . 5
Section 2.6. No Undisclosed Liabilities. . . . . . . . . . . . . . 5
Section 2.7. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.8. No Material Adverse Change; Absence of Restricted
Events . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.9. Employees; Labor Relations. . . . . . . . . . . . . . 6
Section 2.10. Employee Benefit Plans . . . . . . . . . . . . . . . 7
Section 2.11. Title to Properties; Encumbrances . . . . . . . . . . 7
Section 2.12. Condition and Sufficiency of Assets . . . . . . . . . 7
Section 2.13. Accounts Receivable . . . . . . . . . . . . . . . . . 8
Section 2.14. Inventory . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.15. Litigation . . . . . . . . . . . . . . . . . . . . . 8
Section 2.16. Authorization and Enforceability; No Conflict with
Other Instruments or Proceedings . . . . . . . . . . 8
Section 2.17. Contracts . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.18. Intellectual Property . . . . . . . . . . . . . . . . 9
Section 2.19. Insurance . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.20. No Illegal Payments . . . . . . . . . . . . . . . . . 10
Section 2.21. Customers and Suppliers . . . . . . . . . . . . . . . 10
Section 2.22. Product Warranties and Liabilities . . . . . . . . . 10
Section 2.23. Certain Relationships . . . . . . . . . . . . . . . . 10
Section 2.24. Permits and Licenses; Compliance with Legal
Requirements . . . . . . . . . . . . . . . . . . . . 10
Section 2.25. Investment Intent . . . . . . . . . . . . . . . . . 11
Section 2.26. No Broker's Fees . . . . . . . . . . . . . . . . . . 11
Section 2.27. Accuracy of Statements . . . . . . . . . . . . . . . 11
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ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF DTG AND
WIRELESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.1. Organization and Good Standing. . . . . . . . . . . 11
Section 3.2. Capitalization of DTG and Wireless; Ownership . . . 12
Section 3.3. No Material Adverse Change; Absence of Restricted
Events . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.4. Litigation . . . . . . . . . . . . . . . . . . . . 12
Section 3.5. Authorization and Enforceability; No Conflict with
Other Instruments or Proceedings. . . . . . . . . . 12
Section 3.6. No Broker's Fees. . . . . . . . . . . . . . . . . . 13
Section 3.7. Accuracy of Statements. . . . . . . . . . . . . . . 13
ARTICLE 4 - COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . 13
Section 4.1. Conduct Pending the Closing . . . . . . . . . . . . 13
Section 4.2. Access and Investigation by DTG and Wireless. . . . . 14
Section 4.3. Reasonable Best Efforts; Notice of Breach or
Failure of Condition; Further Assurances . . . . . . 14
Section 4.4. Non-Compete . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 5 - CONDITIONS TO OBLIGATION TO CLOSE. . . . . . . . . . . . . . 15
Section 5.1. Conditions to Obligation of DTG and Wireless. . . . . 15
Section 5.2. Conditions to Obligation of Sellers and Each
Company . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 6 - TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.1. Termination Events. . . . . . . . . . . . . . . . . . 17
Section 6.2. Effect of Termination . . . . . . . . . . . . . . . . 18
ARTICLE 7 - INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.1. Indemnification and Reimbursement by Sellers. . . . . 18
Section 7.2. Indemnification and Reimbursement by Buyer. . . . . . 19
Section 7.3. Indemnification Procedures. . . . . . . . . . . . . . 19
Section 7.4. Set-Off . . . . . . . . . . . . . . . . . . . . . . . 20
Section 7.5. Basket . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 8 - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 9 - GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 9.1. Survival of Representations, Warranties, Covenants
and Agreements . . . . . . . . . . . . . . . . . . . 27
Section 9.2. Binding Effect; Benefits; Assignment. . . . . . . . . 27
Section 9.3. Entire Agreement. . . . . . . . . . . . . . . . . . . 27
Section 9.4. Amendment and Waiver. . . . . . . . . . . . . . . . . 28
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Section 9.5. Governing Law . . . . . . . . . . . . . . . . . . . . 28
Section 9.6. Public Disclosure . . . . . . . . . . . . . . . . . . 28
Section 9.7. Notices . . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.8. Counterparts. . . . . . . . . . . . . . . . . . . . . 29
Section 9.9. Expenses. . . . . . . . . . . . . . . . . . . . . . . 29
Section 9.10. Severability . . . . . . . . . . . . . . . . . . . . 29
Section 9.11. Headings; Construction; Time of Essence . . . . . . . 29
EXHIBITS
Exhibit A--Vantek Articles of Merger and Plan of Merger
Exhibit B--Van/Alert Articles of Merger and Plan of Merger
Exhibit C--Form of Promissory Notes
DISCLOSURE SCHEDULE
Schedule 1--Organization and Good Standing
Schedule 2--Financial Statements
Schedule 3--Taxes
Schedule 4--Certain Changes or Events
Schedule 5--Employee Relations
Schedule 6--Employee Benefit Plans
Schedule 7--Real Property, Leaseholds or other interests
Schedule 8--Litigation
Schedule 9--Authorization and Enforceability; No Conflict
Schedule 10--Contracts
Schedule 11--Intellectual Property
Schedule 12--Insurance
Schedule 13--Customers and Suppliers
Schedule 14--Product Warranties and Liabilities
Schedule 15--Certain Relationships
Schedule 16--Permits and Licenses; Compliance with Law
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