STOCK PURCHASE AGREEMENT
Exhibit 10.1
EXECUTION COPY
This STOCK PURCHASE AGREEMENT, dated as of June 15, 2007 (the “Effective Date”), is
entered into by and among Sprint Nextel Corporation, a Kansas corporation (the “Buyer”),
each of the stockholders of the Company (as defined below) set forth on the signature page(s)
hereto (collectively, the “Stockholders”) and Xxxxx X. Xxxxxxx, an individual resident of
the State of Indiana, as the representative of each Stockholder hereunder (the “Stockholders
Representative”). The Buyer, the Stockholders and the Stockholders Representative may be
referred to herein collectively as the “Parties” or individually as a “Party.”
Background
A. The Stockholders are the registered and beneficial owners of all of the issued and
outstanding shares (the “Shares”) of common stock, $1.00 par value, of New York MDS, Inc.,
a Delaware corporation (the “Company”).
B. The Company is the licensee of the Federal Communications Commission (“FCC”)
license or licenses for the operation of the Broadband Radio Service channels identified on
Schedule A (each, a “License” and, if more than one, collectively, the
“Licenses”).
C. The Stockholders desire to sell to the Buyer, and the Buyer desires to purchase from the
Stockholders, all of the Shares, free and clear of any and all Liens, and otherwise on the terms
and subject to the conditions set forth in this Agreement.
Agreement
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants, conditions and agreements hereinafter set forth, the Parties agree as follows:
ARTICLE I: DEFINED TERMS
Section 1.1 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth or referenced below:
“Affiliate” means, with respect to any Person, any other Person that, directly or
indirectly, alone or through one or more intermediaries, controls, is controlled by or is under
common control with that Person. For purposes of this definition, “control” (including the
terms “controlling” and “controlled”) means the power to direct or cause the
direction of the management and policies of a Person, directly or indirectly, whether through the
ownership of securities or other ownership interests, by contract or otherwise.
“Agreement” means this Stock Purchase Agreement and all Exhibits and Schedules hereto,
as amended, supplemented or otherwise modified from time to time in accordance with the terms
hereof.
“Buyer” has the meaning set forth in the preamble.
“Buyer Indemnified Parties” has the meaning set forth in Section 7.2 below.
“Claim” means any claim or demand asserted by any Person (including any Party) against
a Party in respect of which payment may be sought from another Party under Article VII below.
New York MDS, Inc.
“Claim Notice” has the meaning set forth in Section 7.4(a) below.
“Closing” has the meaning set forth in Section 3.1 below.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company” has the meaning set forth in Recital A.
“Consents” means all consents and approvals of Governmental Authorities or other
Persons (other than a Party) necessary to authorize, approve or permit the Parties hereto to
consummate the Transactions, including the expiration or early termination of the waiting period
under the HSR Act or otherwise.
“Contracts” means all contracts, agreements (including, without limitation, employment
and non-competition agreements), leases (including for real or personal property or for any
spectrum under any License), commitments, instruments, guarantees, bids, orders and proposals and
all oral agreements.
“Damages” means any and all losses, claims, demands, liabilities, obligations,
actions, suits, orders, statutory or regulatory compliance requirements, or proceedings asserted by
any Person, and all damages, costs, expenses, assessments, judgments, recoveries and deficiencies,
including interest, penalties, investigatory expenses and reasonable attorneys’ fees and costs, of
every kind and description, contingent or otherwise.
“Effective Date” has the meaning set forth in the preamble.
“Employee Plan” means (a) all “employee benefit plans,” as defined in Section 3(3) of
ERISA, (b) all other severance pay, salary continuation, bonus, incentive, stock option,
retirement, pension, profit sharing or deferred compensation plans, contracts, programs, funds or
arrangements of any kind and (c) all other employee benefit plans, contracts, programs, funds or
arrangements (whether written or oral, qualified or nonqualified, funded or unfunded, foreign or
domestic, currently effective or terminated) and any trust, escrow or similar agreement related
thereto, whether or not funded, in respect of any present or former employees, directors, officers,
shareholders, consultants, or independent contractors of the Company (or any trade or business
(whether or not incorporated) (i) under common control within the meaning of Section 4001(b)(1) of
ERISA with the Company or (ii) which together with the Company is treated as a single employer
under Section 414(t) of the Code (the “Controlled Group”)) or with respect to which the
Company (or the Controlled Group) has made or is required to make payments, transfers, or
contributions.
“Expiration Date” has the meaning set forth in Section 7.1 below.
“FCC” has the meaning set forth in Recital B.
“FCC Consent” has the meaning set forth in the definition of “Final Order” below.
“Final Order” means that forty-five (45) days will have elapsed from the date of the
FCC’s issuance of Public Notice of consent (“FCC Consent”) without any filing of any
adverse request, petition or appeal by any third Person or by the FCC on its own motion with
respect to the application for the FCC’s Consent to the sale and transfer of the Shares to the
Buyer, or any resubmission of any application, or, if challenged, the FCC Consent will have been
reaffirmed or upheld and the applicable period for seeking further administrative or judicial
review will have expired without the filing of any action, petition or request for further review.
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“Fundamental Representations” has the meaning set forth in Section 7.1 below.
“GAAP” means United States generally accepted accounting principles consistently
applied.
“General Enforceability Exceptions” has the meaning set forth in Section 4.1(a) below.
“Governmental Authority” means a Federal, state or local court, legislature,
governmental agency (including the FCC and the United States Department of Justice), commission or
regulatory or administrative authority or instrumentality.
“Holdback Amount” means $4,000,000.
“HSR Act” has the meaning set forth in Section 3.4(a)(ii) below.
“Indebtedness” of any Person means: either (a) any liability of any Person (i) for
borrowed money (including the current portion thereof), or (ii) under any reimbursement obligation
relating to a letter of credit, bankers’ acceptance or note purchase facility, or (iii) evidenced
by a bond, note, debenture or similar instrument (including a purchase money obligation), or (iv)
for the payment of money relating to leases that are required to be classified as a capitalized
lease obligation in accordance with GAAP, or (v) for all or any part of the deferred purchase price
of property or services (other than trade payables), including any “earnout” or similar payments or
any non-compete payments, or (vi) under interest rate swap, hedging or similar agreements or (b)
any liability of others described in the preceding clause (a) that such Person has guaranteed, that
is recourse to such Person or any of its assets or that is otherwise its legal liability or that is
secured in whole or in part by the assets of such Person. For purposes of this Agreement,
Indebtedness includes (A) any and all accrued interest, success fees, prepayment premiums,
make-whole premiums or penalties and fees or expenses actually incurred (including attorneys’ fees)
associated with the prepayment of any Indebtedness, (B) cash, book or bank account overdrafts and
(C) any and all amounts owed by the Company to any of its Affiliates, including, without
limitation, any of the Stockholders.
“Indemnity Cap” has the meaning set forth in Section 7.6(b) below.
“Indemnity Deductible” has the meaning set forth in Section 7.6(a) below.
“Information” has the meaning set forth in Section 5.5 below.
“Law” means any statute, ordinance, code or other law, rule, permit, permit condition,
regulation, order, decree, technical or other standard, requirement or procedure enacted, adopted,
promulgated, applied or followed by any Governmental Authority.
“Letter of Intent” means that certain “Letter of Intent for Proposed Transactions”
dated April 2, 2007, among Nextel Spectrum Acquisition Corp., the Company, each Stockholder and
certain other parties.
“License” or “Licenses” has the meaning set forth in Recital B.
“Lien” has the meaning set forth in Section 2.1 below.
“Ordinary Course of Business” means the ordinary course of business consistent with
past custom and practice (including with respect to quantity and frequency).
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“Parties” or “Party” has the meaning set forth in the preamble.
“Permitted Encumbrances” means (a) statutory Liens for current Taxes (other than
income Taxes) not yet delinquent, (b) zoning, entitlement and other land use and environmental
regulations by any Governmental Authority and (c) the valid title of a lessor under any operating
lease.
“Person” means any general partnership, limited partnership, limited liability
company, corporation, joint venture, trust, business trust, Governmental Authority, cooperative,
association, other entity, or individual, and the heirs, executors, administrators, legal
representatives, successors, and assigns of such person (by merger or otherwise) as the context may
require.
“Post-Closing Straddle Period” has the meaning set forth in Section 5.6(a)(ii) below.
“Post-Closing Tax Period” means any Tax period beginning after the date of the
Closing.
“Pre-Closing Straddle Period” has the meaning set forth in Section 5.6(a)(ii) below.
“Pre-Closing Tax Period” means any Tax period ending on or before the date of the
Closing.
“Purchase Price” has the meaning set forth in Section 2.2 below.
“Related Transactions” means all of the transactions contemplated by, and among the
various parties to, the Letter of Intent, whether styled as a purchase and sale of shares of stock,
the purchase and sale of assets or the lease of assets.
“Representatives” has the meaning set forth in Section 5.4 below.
“Respective Portion” means a fraction, the numerator of which is the number of Shares
owned by a given Stockholder as set forth in Schedule 4.1(b), and the denominator of which
is the total number of outstanding Shares as set forth in Schedule 4.2(b).
“Returns” means all Tax returns, statements, reports, elections, schedules, claims for
refund, and forms (including estimated Tax or information returns and reports), including any
amendment or supplement thereto.
“Securities Act” means the Securities Act of 1933, as amended.
“Selling Expenses” means all (a) unpaid costs, fees and expenses of outside
professionals, brokers or other Persons (including any Stockholder or any Affiliate of the Company
or any Stockholder) incurred by the Company relating to the process of selling the Company whether
incurred in connection with this Agreement or otherwise, including, without limitation, all legal
fees, accounting, tax, investment banking fees and expenses and brokerage fees, (b) bonuses payable
to employees, agents, consultants or any other Person (including any Stockholder or any Affiliate
of the Company or any Stockholder) as a result of the transactions contemplated by this Agreement
and unpaid by the Company as of the Closing Date and (c) severance obligations owed by the Company
to employees, agents, consultants or any other Person (including any Stockholder or any Affiliate
of the Company or any Stockholder) triggered prior to or as a result of the Transactions. The
certificate referenced in Section 3.2(f) below will set forth the entire amount of the Selling
Expenses (indicating the amount and the Person to whom such Selling Expense is owed).
“Shares” has the meaning set forth in Recital A.
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“Stockholders” has the meaning set forth in the preamble.
“Stockholders Representative” has the meaning set forth in the preamble.
“Straddle Period” has the meaning set forth in Section 5.6(a)(ii) below.
“Tax” means (a) any net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits, license, withholding
on amounts paid to or by the Company, payroll, employment, excise, severance, stamp, occupation,
premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental
fee or other like assessment or charge of any kind whatsoever, together with any interest, penalty,
addition to tax or additional amount imposed by any Taxing Authority, whether disputed or not, (b)
any liability of the Company for the payment of any amounts of any of the foregoing types as a
result of being a member of an affiliated, consolidated, combined or unitary group or being a party
to any agreement or arrangement whereby liability of the Company for payment of such amounts was
determined or taken into account with reference to the liability of any other Person and (c) any
liability of the Company for the payment of any amounts as a result of being a party to any Tax
sharing agreements or arrangements (whether or not written) binding on the Company or with respect
to the payment of any amounts of any of the foregoing types as a result of any express or implied
obligation to indemnify any other Person.
“Tax Matter” has the meaning set forth in Section 5.6(e) below.
“Taxing Authority” means any Governmental Authority responsible for the administration
or the imposition of any Tax.
“Transaction Documents” means this Agreement and each agreement, document, instrument
or certificate contemplated by this Agreement or to be executed by any Party to this Agreement in
connection with the consummation of the Transactions, in each case only as applicable to the
relevant Party or Parties to such Transaction Document, as indicated by the context in which such
term is used.
“Transactions” means the transactions contemplated by this Agreement (not including
the Related Transactions).
“Transfer Taxes” has the meaning set forth in Section 5.6(c) below.
Section 1.2 Other Definitional and Interpretive Matters. Unless otherwise expressly
provided, for purposes of this Agreement, the following rules of interpretation shall apply:
(a) Any reference in this Agreement to $ shall mean U.S. dollars.
(b) The Exhibits and Schedules to this Agreement are hereby incorporated and made a
part of this Agreement and are an integral part of this Agreement. The Schedules to this
Agreement are arranged to correspond to the various Sections and subsections of this
Agreement. All matters disclosed in any Schedule shall be deemed to be disclosed in each
other Schedule to the extent that the effect of such disclosure in such other Schedules is
readily apparent. Disclosure of any item on any Schedule shall not constitute an admission
or indication that such item or matter is material. No disclosure on a Schedule relating to
a possible breach or violation of any Contract or Law shall be construed as an admission or
indication that a breach or violation exists or has actually occurred. Any capitalized
terms used in any Schedule or Exhibit but not otherwise defined therein shall be defined as
set forth in this Agreement.
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(c) The words such as “herein,” “hereinafter,” “hereof,” and
“hereunder” refer to this Agreement as a whole and not merely to a subdivision in
which such words appear unless the context otherwise requires.
ARTICLE II: PURCHASE AND SALE
Section 2.1 Purchase and Sale of the Shares. On the terms and subject to the
conditions set forth in this Agreement, at the Closing, the Buyer shall purchase from the
Stockholders, and the Stockholders shall sell, transfer, assign, convey and deliver to the Buyer,
all of the Shares, free and clear of any mortgage, pledge, hypothecation, rights of others, claim,
security interest, encumbrance, title defect, title retention agreement, voting trust agreement,
interest, option, lien, charge or similar restrictions or limitations, including any restriction on
the right to vote, sell or otherwise dispose of the Shares (collectively, “Liens”).
Section 2.2 Purchase Price. In consideration of the sale and transfer of the Shares,
at the Closing, the Buyer shall pay or cause to be paid to the Stockholders, in accordance with
their Respective Portions, an aggregate purchase price equal to Sixty-Two Million Five Hundred
Eighty-Six Thousand Two Hundred Seventy-Eight Dollars ($62,586,278), minus (a) any and all
Selling Expenses and (b) the Holdback Amount (the foregoing computation being referred to in this
Agreement as the “Purchase Price”), via wire transfer of immediately available funds to the
respective accounts designated by the Stockholders. Subject to the terms of Article VII and
Section 5.6 below, on the eighteen (18) month anniversary of the Closing, the Buyer shall pay or
cause to be paid to each Stockholder its Respective Portion of the Holdback Amount, less the amount
required to satisfy any then-unresolved Claim(s) made by the Buyer Indemnified Parties in
accordance with the terms of Article VII or Section 5.6 below, via wire transfer of immediately
available funds to the respective accounts designated by the Stockholders. After any final
judgment or award shall have been rendered by a court, arbitration board or administrative agency
of competent jurisdiction with respect to any such Claim(s) and the expiration of the time in which
to appeal therefrom, or a settlement of any such Claim(s) shall have been consummated, the Buyer
shall be entitled to retain from the remaining Holdback Amount the amount of Damages so awarded or
agreed-upon, and shall thereafter pay or cause to be paid to each Stockholder its Respective
Portion of any remaining portions of the Holdback Amount (less the amount required to satisfy any
other Claim(s) that have not then been finally determined or settled), via wire transfer of
immediately available funds to the respective accounts designated by the Stockholders. Simple
interest shall accrue on the Holdback Amount, as the same may be reduced from time to time, at the
rate of 5.50% per annum. Upon the payment of all or any portion of the Holdback Amount to any
Stockholder, the Buyer shall pay or cause to be paid to such Stockholder all accrued but unpaid
interest on the portion of the Holdback Amount received by such Stockholder. Notwithstanding the
foregoing, as a condition to receiving any payment under this Agreement, each Stockholder agrees to
complete and execute the Buyer’s standard “Payee Setup Form” (a blank form of which has been
provided to each Stockholder prior to the Effective Date) at least ten (10) business days prior to
the date for such payment.
ARTICLE III: CLOSING, CLOSING DELIVERIES AND CLOSING CONDITIONS
Section 3.1 Closing. The consummation (the “Closing”) of the Transactions
will occur on an agreed date and at an agreed place within ten (10) days after the satisfaction or
waiver of all of the conditions to the Closing set forth in Section 3.4 below. The Closing shall
be effective for all purposes as of 11:59 p.m. on the date of the Closing. The Closing may be held
without there being an actual meeting of the Parties, with closing items to be conveyed by mail or
express courier service or by fax or email. In such event, fax or email signatures shall be deemed
and accepted as original signatures. Notwithstanding the foregoing, the Stockholders shall be
required to deliver original documents pursuant to Section 3.2(b) below.
New York MDS, Inc.
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Section 3.2 Closing Deliveries of the Stockholders. At the Closing, the Stockholders
shall deliver to the Buyer:
(a) a receipt or receipts, executed by the Stockholders, evidencing receipt of the
Purchase Price payable to them in accordance with Section 2.2 above;
(b) (i) stock certificates representing all of the Shares, with duly executed stock
powers attached in proper form for transfer to the Buyer and (ii) any other documents that
are necessary to transfer to the Buyer good and valid title to the Shares, with any
necessary transfer tax stamps affixed or accompanied by evidence that all stock transfer
taxes have been paid;
(c) a long-form good standing certificate (or its equivalent) issued by the appropriate
Governmental Authority in the Company’s jurisdiction of incorporation and in each state in
which the Company is qualified to do business as a foreign corporation, each dated within
ten (10) days of the Closing;
(d) copies of the Certificate of Incorporation (or equivalent document) of the Company,
certified by the secretary of state of its jurisdiction of incorporation, and copies of the
Bylaws (or equivalent document) of the Company, certified by an officer of the Company;
(e) the original corporate record books and stock record books of the Company, and all
books and records (including data stored on discs, tapes or other media) related to the
Company’s business, including, to the extent available, all current and historical
financial, accounting and Tax records);
(f) a certificate of an officer of the Company, dated as of the date of Closing,
certifying in sufficient detail reasonably acceptable to the Buyer the aggregate amount of
Selling Expenses (if any) as of the Closing;
(g) a certificate or certificates of each Stockholder, dated as of the date of Closing,
certifying: (i) that the representations and warranties of such Stockholder set forth in
this Agreement and each other Transaction Document that are qualified by “materiality” are
true and correct in all respects, and those representations and warranties not so qualified
are true and correct in all material respects, in each case, as of the Closing as if made on
and as of the Closing (except for the representation and warranty set forth in Section
4.2(h)(ii) below, which shall have been true and correct on and as of the Effective Date);
(ii) that such Stockholder has performed and complied in all material respects with all of
its agreements and covenants set forth in this Agreement and the other Transaction Documents
to be performed or complied with by it on or before the Closing; and (iii) either (A) that
no Return of the Company for any Pre-Closing Tax Period is the subject of any audit by any
Taxing Authority as of the date of Closing, or (B) that one or more Returns of the Company
for a Pre-Closing Tax Period is the subject of such an audit (which certificate shall
include a reasonably detailed description thereof) and that the Stockholders agree to
indemnify the Buyer and its Affiliates from and against any and all Taxes imposed on the
Company as a result of such audit in accordance with Section 5.6 below;
(h) appropriate termination statements under the Uniform Commercial Code and other
instruments as may be reasonably requested by the Buyer to evidence the release of any and
all Liens (other than Permitted Encumbrances) on any of the assets or properties of the
Company;
(i) written resignations of each director and officer of the Company listed on
Schedule 4.2(i);
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(j) releases, each in the form of Exhibit A hereto, duly executed by each
Stockholder;
(k) a release, in the form of Exhibit B hereto, duly executed by the Company
and each of its officers and directors; and
(l) such other documents and instruments as the Buyer may reasonably request to
consummate the Transactions.
Section 3.3 Closing Deliveries of the Buyer. At the Closing, the Buyer shall deliver
to the Stockholders the Purchase Price in accordance with Section 2.2 above, and such other
documents and instruments as the Stockholders Representative may reasonably request to consummate
the Transactions.
Section 3.4 Closing Conditions.
(a) Conditions to the Obligations of all Parties. Each Party’s obligation to
consummate the Transactions is subject to the satisfaction or waiver, on or prior to the
Closing, of each of the following conditions, as applicable to the Party specified:
(i) The FCC shall have approved the Transactions by Final Order, without any
conditions adverse to the Buyer or any of its Affiliates (including, after the
Closing, the Company);
(ii) All other Consents required to be made or obtained prior to the Closing by
any Party or any of their respective Affiliates with any Governmental Authority in
connection with the execution and delivery of this Agreement and the consummation of
the Transactions shall have been made or obtained, including the expiration or
earlier termination of any applicable waiting period under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the “HSR Act”);
(iii) No preliminary or permanent injunction or other order, decree or ruling
issued by a Governmental Authority, nor any Law promulgated or enacted by any
Governmental Authority, shall be in effect that would impose material limitations on
the ability of any Party to consummate the Transactions; and
(iv) All conditions to the obligations of the parties to the Related
Transactions to consummate the Related Transactions (A) with respect to the sale of
all of the issued and outstanding shares of capital stock of the Stock Companies (as
such term is defined in the Letter of Intent), including the Company, and (B) with
respect to at least 75% of the aggregate estimated MHz POPs covered by such Related
Transactions, determined by reference to Schedules B and C-1 of the Letter of
Intent, shall have been satisfied or waived pursuant to definitive agreements
entered into in accordance with the Letter of Intent, and all such Related
Transactions contemplated by this Section 3.4(a)(iv) shall be consummated on a
substantially concurrent basis.
(b) Conditions to the Obligations of the Stockholders. The Stockholders’
obligation to consummate the Transactions is subject to the satisfaction (or waiver by the
Stockholders Representative), on or prior to the Closing, of the condition that the Buyer
shall have delivered to the Stockholders the Purchase Price in accordance with Section 2.2
above and any other documents required by Section 3.3 above.
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(c) Conditions to the Obligations of the Buyer. The Buyer’s obligation to
consummate the Transactions is subject to the satisfaction (or waiver by the Buyer), on or
prior to the Closing, of the condition that the Stockholders shall have delivered all of the
certificates, documents, instruments and other items required by Section 3.2 above.
ARTICLE IV: REPRESENTATIONS AND WARRANTIES
Section 4.1 Individual Representations and Warranties of the Stockholders. Each
Stockholder, severally and not jointly and only with respect to itself, hereby represents and
warrants to the Buyer as follows:
(a) Standing, Authorization and Enforceability. If such Stockholder is not an
individual, it is a corporation validly existing and in good standing under the laws of its
jurisdiction of formation, and has all requisite power and authority to enter into this
Agreement and each other Transaction Document and to perform the obligations to be performed
by it hereunder and thereunder. If the Stockholder is an individual, such individual is
legally competent to execute, deliver and perform its obligations under, this Agreement and
each Transaction Document. If the Stockholder is not an individual, its execution and
delivery of this Agreement and each other Transaction Document, and the performance by such
Stockholder of its obligations hereunder and thereunder, have been duly authorized by all
necessary actions on the part of such Stockholder. This Agreement and each other
Transaction Document have been duly executed and delivered by such Stockholder, and
constitutes a legal, valid and binding obligation of such Stockholder, enforceable against
it, in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, fraudulent conveyance and other similar Laws and
principles of equity affecting creditors’ rights and remedies generally (the “General
Enforceability Exceptions”). Such Stockholder has not entered into any other agreement
whereby its Shares will be sold, assigned or otherwise transferred to any other Person.
(b) Ownership. Such Stockholder is the beneficial and record owner of the
number of Shares set forth opposite its name on Schedule 4.1(b). Such Stockholder
has the absolute right to transfer such Shares to the Buyer, subject only to receipt of the
FCC Consent and the expiration or early termination of the waiting period under the HSR Act.
Upon the purchase of such Shares as contemplated by this Agreement, the Buyer will obtain
good and valid title to such Shares free and clear of all Liens.
(c) No Conflicts or Consents. Neither the execution, delivery and performance
by such Stockholder of this Agreement or any other Transaction Document, nor the
consummation of the Transactions by such Stockholder, will: (i) conflict with or result in
a breach or violation of any provision of its organizational documents, as applicable; (ii)
constitute, with or without the giving of notice or passage of time or both, a breach,
violation or default by such Stockholder or any of its Affiliates under, or give rise to any
right of termination, modification, cancellation, prepayment or acceleration under, any
note, bond, mortgage, indenture, lease, agreement, or other instrument to which such
Stockholder is party or by which it is bound, or create any Lien on the Shares or any assets
or properties of the Company; (iii) require any Consent, other than the FCC Consent and the
expiration or early termination of the waiting period under the HSR Act; or (iv) violate any
Law, judgment, order or decree by which such Stockholder is bound.
(d) Broker. Neither such Stockholder nor any of its Affiliates has employed
any broker or finder or incurred any liability for any brokerage or finder fees or
commissions in connection with the Transactions.
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Section 4.2 Collective Representations and Warranties of the Stockholders. Each
Stockholder, jointly and severally, represents to the Buyer as follows:
(a) Good Standing; Power. The Company (i) is a corporation validly existing
and in good standing under the laws of its jurisdiction of incorporation and (ii) is duly
authorized, qualified or licensed to do business as a foreign corporation and is in good
standing in each jurisdiction where such authorization, qualification or licensure is
required, except for the purposes of clause (ii) above, where the failure to be so
authorized, qualified or licensed could not reasonably be expected to have a material
adverse effect on the Company, its business or assets. The Company has the corporate power
and authority to (A) own or lease and to operate its properties and assets (including the
Licenses) as and where currently owned, operated and leased and (B) carry on its business as
currently conducted.
(b) Capitalization of the Company. The authorized capital stock of the Company
consists of 1,000 Shares, of which 500 Shares are issued and outstanding and all of which
have been duly authorized and validly issued and are fully paid and non-assessable. There
are no outstanding options, warrants, rights, calls, subscriptions, claims of any character,
agreements, obligations, convertible or exchangeable securities or other commitments,
contingent or otherwise, of any kind obligating the Company to issue, directly or
indirectly, any additional shares of its capital stock or other equity securities. The
Shares represent the only issued and outstanding shares of capital stock of the Company.
There are no Contracts relating to the issuance, sale, transfer or voting of any equity
securities or other securities of the Company. Schedule 4.2(b) sets forth a true
and complete statement of the capitalization of the Company. The Company has no
Subsidiaries and no investments in any other Person.
(c) FCC Licenses.
(i) A true and complete copy of each License and any and all authorizations
with respect thereto are attached to Schedule A. The Company is the lawful,
beneficial and exclusive owner of each License, free and clear of any and all Liens.
(ii) Each License is valid and in good standing with the FCC and the Company
and any associated communications facilities operated by the Company have been and
are in material compliance with all applicable Laws. To the knowledge of the
Stockholders, there is no condition imposed on any License by the FCC, except those
that are either set forth on the face of any License or are contained in applicable
Law.
(iii) The Company is in material compliance with all applicable Laws with
respect to each License. Since acquisition by the Company of each License, the
Company has complied in all material respects with all Laws applicable to each
License and with all of the terms and conditions of each License. All material
documents required to be filed at any time by the Company with the FCC with respect
to each License have been timely filed or the time period for such filing has not
lapsed. All such documents filed since the date each License was acquired by the
Company are correct in all material respects. All amounts owed to the FCC in
connection with each License since the date that it was acquired by the Company have
been timely paid.
(iv) Except for any such matter affecting the wireless industry or wireless
licensees generally, there is not pending or, to the knowledge of the Stockholders,
threatened against the Company with respect to any License any application, action,
petition, objection or other pleading, or any proceeding with the FCC or any other
New York MDS, Inc.
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Governmental Authority, that (A) questions or contests the validity of, or
seeks the revocation, termination, cancellation, forfeiture, non-renewal or
suspension of, any License, (B) seeks the imposition of any Lien, modification or
amendment with respect to any License or the spectrum operated thereunder, (C) would
adversely affect the ability of the Stockholders to consummate the Transactions in
accordance with this Agreement, or (D) seeks the payment of a fine, sanction,
penalty, damages or contribution in connection with the use of any License. Except
for any such matter affecting the wireless industry or wireless licensees generally,
to the knowledge of the Stockholders, there are no facts or circumstances existing
that would give rise to any such application, action, petition, objection or other
pleading or proceeding with the FCC or any other Governmental Authority. There is
no unsatisfied adverse FCC order or ruling outstanding against the Company with
respect to any License.
(v) Neither any License nor the spectrum licensed thereunder is subject to any
agreement in which the Company or any Stockholder has accepted to receive
interference, or are subject to or operating under (A) any agreement encumbering the
License or such spectrum, (B) any agreement providing for the present or future
lease, use, reservation, modification, restriction or dedication or any encumbrance
of the License or the spectrum associated therewith, including any spectrum lease or
capacity agreement, any right of first refusal or option to purchase, or (C) any FCC
waiver of otherwise applicable Laws, except, in the case of clauses (A), (B) and (C)
above, for any such agreements or rights solely with or in favor of the Buyer or any
of its Affiliates.
(vi) Each License was initially constructed in material compliance with FCC
requirements and remains in material compliance with rules pertaining to
construction and operation.
(vii) The representations and warranties set forth in this Section 4.2(c) are
qualified to the extent of: (A) actions taken by the Buyer or any of its Affiliates
with respect to any License or any Contract entered into by the Buyer or any of its
Affiliates with regard to any License; or (B) any violation of Law by the Buyer or
any of its Affiliates.
(d) Contracts. Schedule 4.2(d) sets forth all of the Contracts to
which the Company is a party or by which any of the assets (including the Licenses) of the
Company are bound. The Company has provided to the Buyer true and complete copies of each
such Contract, as amended to date. Each Contract set forth on Schedule 4.2(d) (or
required to be set forth on such Schedule) is a valid, binding and enforceable obligation of
the Company enforceable in accordance with its terms, subject to the General Enforceability
Exceptions. With respect to the Contracts set forth on Schedule 4.2(d) (or required
to be set forth on such Schedule): (i) neither the Company nor, to the knowledge of the
Stockholders, any other party thereto is in material default under or in violation of any
Contract; (ii) no event has occurred which, with notice or lapse of time or both, would
constitute such a default or violation by the Company and, to the knowledge of the
Stockholders, there is no such default or violation by the other party to any Contract; and
(iii) the Company has not released any of its material rights under any Contract.
(e) Assets. Schedule 4.2(e) sets forth a true and complete list, by
category, of all material equipment, machinery and other tangible and intangible personal
property (other than any License) that is owned, leased or licensed by the Company. The
Company is the lawful, beneficial and exclusive owner, lessee or licensee of such assets,
free and clear of any and all Liens (other than Permitted Encumbrances). The Company is the
only Person through which the
New York MDS, Inc.
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Company’s business is conducted. The tangible assets owned, leased or licensed by the
Company are in good condition and repair (subject to normal wear and tear consistent with
the age of the assets).
(f) Undisclosed Liabilities. The Company does not have any liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become
due, whether known or unknown, regardless of when asserted) arising out of transactions or
events entered into prior to the Closing, or any action or inaction, or any state of facts
existing, with respect to or based upon transactions or events occurring prior to the
Closing, except (i) liabilities for trade payables and Taxes incurred in the Ordinary Course
of Business since the date of the most-recently filed Return with respect thereto and (ii)
liabilities disclosed on Schedule 4.2(f), none of the foregoing of which relates to
(A) breach of Contract, (B) breach of warranty, (C) tort, (D) infringement, (E) violation of
Law or (F) any environmental liability.
(g) Litigation. There is no legal proceeding now in progress or pending or, to
the knowledge of the Stockholders, threatened against the Company. The Company is not
subject to any order, writ, injunction or decree of any court or any federal, state,
municipal or other domestic or foreign Governmental Authority. The Company is now, and has
been within the past five (5) years, in material compliance with all Laws.
(h) Taxes. Except as set forth on Schedule 4.2(h):
(i) All Returns required to be filed by or on behalf of the Company have been
filed when due (taking into account any valid extensions) in accordance with all
applicable Laws. All such Returns (A) are correct and complete in all material
respects and (B) were prepared in accordance with all applicable Laws. The Company
is not currently a beneficiary of any extension of time within which to file any
Return.
(ii) As of the Effective Date, no Return of the Company with respect to any
Pre-Closing Tax Period has ever been audited by any Taxing Authority.
(iii) The Company does not have any Tax liabilities (whether due or to become
due) with respect to the income, property and operations of the Company that relate
to any Pre-Closing Tax Period, except for Tax liabilities incurred in the Ordinary
Course of Business since the most-recently filed Return with respect thereto. The
Company does not have any liability for the Taxes of any Person as a transferee or
successor, by contract or otherwise.
(iv) The Company has not been a member of an affiliated, consolidated, combined
or unitary group or participated in any other arrangement whereby any income,
revenues, receipts, gain or loss was determined or taken into account for Tax
purposes with reference to or in conjunction with any income, revenues, receipts,
gain, loss, asset or liability of any other Person. The Company is not a party to
or bound by any Tax allocation or sharing agreement. The Company is not a party to
any Contract, arrangement or plan that has resulted or would result, separately or
in the aggregate, in the payment of any “excess parachute payments” within the
meaning of Section 280G of the Code.
(v) All Taxes due and payable by the Company (whether or not shown as due and
payable on any Return) have been timely paid or withheld and remitted to the
appropriate Taxing Authority.
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(vi) The Company has not granted any extension or waiver of the statute of
limitations period applicable to any Return or Tax, which period (after giving
effect to such extension or waiver) has not yet expired.
(vii) There is no claim or proceeding now pending or, to the knowledge of the
Stockholders, threatened against or with respect to the Company in respect of any
Tax or assessment.
(viii) There are no Liens for Taxes upon the assets or properties of the
Company, except for Taxes not yet due and payable.
(ix) Schedule 4.2(h)(ix) contains a list of all jurisdictions (whether
foreign or domestic) where the Company files Returns for income, sales, use or
similar Taxes or where any such Tax is properly payable by the Company. Neither the
Company nor any of the Stockholders has received notice of any claim by a
Governmental Authority in a jurisdiction where the Company does not file Returns
that it is or may be subject to taxation by that jurisdiction.
(x) Neither the Company nor any Person on behalf of the Company has entered
into any agreement or consent pursuant to Section 341(f) of the Code. The
Stockholders are not foreign persons within the meaning of Section 1445 of the Code.
(xi) The Company will not be required to include any item of income in, or
exclude any item of deduction from, taxable income for any taxable period (or
portion thereof) ending after the Closing Date as a result of any: (A) change in
method of accounting for a taxable period ending on or prior to the Closing, (B)
“closing agreement” as described in Section 7121 of the Code (or any corresponding
or similar provision of Law), (C) installment sale or open transaction disposition
made on or before the Closing or (D) prepaid amount received on or before the
Closing.
(xii) No closing agreement, private letter rulings, technical advice memoranda
or similar agreement or ruling has been entered into with any Taxing Authority by or
with respect to the Company with respect to any Taxes.
(xiii) The Company has not entered into, or otherwise participated (directly or
indirectly) in any “reportable transaction” with the meaning of Treasury Regulations
Section 1.6011-4(b), nor has the Company received a written opinion from a Tax
advisor that was intended to provide protection against a Tax penalty.
(xiv) The Company has not distributed the stock of another Person, or had its
stock distributed by another Person, in a transaction that was purported or intended
to be governed in whole or in part by Section 355 or Section 361 of the Code.
(i) No Business Operations. Except for (i) acting as the licensee under each
License, (ii) the matters specifically reflected in any Schedule to this Agreement, and
(iii) the additional matters specifically described in Schedule 4.2(i), the Company
has conducted no business or operations since its incorporation. Without limiting the
generality of the foregoing, except as set forth in Schedule 4.2(i), the Company:
(A) has never owned or had any interest in any real property and does not currently own or
have any interest in any material equipment, machinery or tangible or intangible personal
property; (B) does not currently have any outstanding Indebtedness; (C) is not a party to or
bound by any Contract; (D) does not currently
New York MDS, Inc.
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have, and has never had, any employees; (E) is not currently the sponsor of or bound
by, and has never been a sponsor of or bound by, any Employee Plan; (F) does not maintain
any insurance policies for itself or any of its officers or directors; (G) does not maintain
any bank accounts or safe deposit boxes with any financial institution; and (H) does not
have any customers or material suppliers. In addition to any matters described above,
Schedule 4.2(i) contains a list of the Company’s current officers and directors.
(j) Broker. The Company has not employed any broker or finder or incurred any
liability for any brokerage or finding fees or commissions in connection with the
Transactions.
Section 4.3 Buyer’s Representations and Warranties. The Buyer hereby represents and
warrants to each Stockholder as follows:
(a) Standing, Authorization and Enforceability. The Buyer is a corporation
validly existing and in good standing under the laws of its jurisdiction of formation, and
has all requisite power and authority to enter into this Agreement and each other
Transaction Document and to perform the obligations to be performed by it hereunder and
thereunder. The execution and delivery of this Agreement and each other Transaction
Document, and the performance by the Buyer of its obligations hereunder and thereunder, have
been duly authorized by all necessary actions on the part of the Buyer. This Agreement and
each other Transaction Document have been duly executed and delivered by the Buyer, and is a
legal, valid and binding obligation of the Buyer, enforceable against it, in accordance with
its terms, subject to the General Enforceability Exceptions.
(b) No Conflicts or Consents. Neither the execution, delivery and performance
by the Buyer of this Agreement or any other Transaction Document, nor the consummation of
the Transactions by the Buyer, will: (i) constitute, with or without the giving of notice
or passage of time or both, a breach, violation or default by the Buyer under any of the
organizational documents of the Buyer, or any note, bond, mortgage, indenture, lease,
agreement, or other instrument to which the Buyer is party or by which it is bound; (ii)
require any Consent, other than the FCC Consent and the expiration or early termination of
the waiting period under the HSR Act; or (iii) violate any Law, judgment, order or decree by
which the Buyer is bound.
(c) Investment Representations. The Buyer is an “accredited investor” as such
term is defined in Rule 501 of Regulation D promulgated under the Securities Act. The Buyer
is acquiring the Shares for investment for its own account, not as a nominee or agent, and
not with the view to, or for resale in connection with, any distribution thereof. The Buyer
understands that the Transactions have not been, and will not be, the subject of a
registration statement filed under the Securities Act, or qualified under applicable state
securities Laws by reason of a specific exemption from the registration provisions of the
Securities Act and the qualification provisions of such Laws. The Buyer understands that
the Shares may not be resold unless such resale is registered under the Securities Act and
qualified under applicable state securities Laws or an exemption from such registration or
qualification is available.
(d) Financial Ability. The Buyer is financially able to consummate the
Transactions and to pay all of its expenses in connection herewith, including payment of the
Purchase Price at the Closing.
(e) No Projections. The Buyer understands that the Stockholders are not making
any representations, warranties or projections about sales, profitability or other operating
results of the Company that may be achieved after the Closing.
New York MDS, Inc.
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(f) Broker. Neither the Buyer nor any of its Affiliates has employed any
broker or finder or incurred any liability for any brokerage or finding fees or commissions
in connection with the Transactions.
ARTICLE V: COVENANTS AND OTHER AGREEMENTS
Section 5.1 Conduct of the Company Pending the Closing. From the Effective Date
through the Closing, each Stockholder shall, or shall cause the Company to: (a) operate the
Company’s business and conduct its affairs only in the Ordinary Course of Business, and in
accordance with all applicable Laws; (b) provide the Buyer, its representatives and advisors,
during normal business hours, reasonable access to and the right to inspect the books, records, and
other documents related to the Company and its business; (c) take all necessary actions to maintain
the continued validity and good standing of each License and such Stockholder’s ability to
consummate the Transactions; and (d) promptly notify the Buyer if such Stockholder is in default of
this Agreement or if it obtains knowledge that any of its representations and warranties are untrue
or incorrect. In addition, from the Effective Date through the Closing, the Stockholders shall
cause the Company not to: (i) sell, transfer, assign, lease or dispose of any of the Licenses or
any interests therein or, other than in the Ordinary Course of Business, any of its other assets or
any interests therein; (ii) create, incur or suffer to exist any Lien (other than Permitted
Encumbrances) or other liability on any of its assets or any interests therein (other than in the
Ordinary Course of Business, and provided that all such Liens (other than Permitted Encumbrances)
are removed on or before the Closing); (iii) seek to modify or allow modification of any of the
parameters under any License; or (iv) incur any Selling Expenses that are not paid on or prior to
the Closing Date. Nothing in this Section 5.1 shall be deemed to prohibit the Company from paying
Selling Expenses or paying compensation, dividends or other distributions to the Stockholders prior
to the Closing. In the event that (A) on the Closing Date, the Company has any unexpended funds in
its bank account listed on Schedule 4.2(i) (net of the amount required to pay any
uncollected checks issued by the Company on or prior to the Closing Date) or (B) after the Closing
Date, the Company receives any Tax refunds or credits (including overpayments of estimated Taxes)
attributable to any Pre-Closing Tax Period, the aggregate amount of such cash, refunds and credits
shall, at the option of the Stockholders, be used to (1) increase the amount of the Indemnity
Deductible, or (2) offset any liability of the Stockholders for indemnification pursuant to Section
5.6 above.
Section 5.2 Consummation of Transactions. From and after the Effective Date through
the Closing, each Party shall use its commercially reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary and consistent with
applicable Law to perform its obligations under this Agreement and to consummate the Transactions
as soon as reasonably practicable. Each Party shall use its commercially reasonable efforts to
prevent or promptly remedy any breach of any of its representations, warranties, covenants or
agreements contained in this Agreement.
Section 5.3 Consents and Notices. The Parties shall use commercially reasonable
efforts and shall cooperate to prepare and promptly file with Governmental Authorities and other
Persons all applications, notices, petitions and other documentation necessary to obtain required
Consents; provided that, without limiting the force or effect of the foregoing, (a)
the Stockholders agree to cause the Company to complete and submit the licensee portion of the
application seeking FCC Consent and (b) the Stockholders agree to complete and return the Buyer’s
standard “Seller Information Form” (a blank form of which has been provided to the Stockholders
prior to the Effective Date) as soon as practicable, and in any event within ten (10) business
days, after the Effective Date, and the Buyer agrees to submit all requisite applications to the
FCC to seek the FCC Consent as soon as practicable, and in any event within ten (10) business days,
after the Buyer receives from the Stockholders the items referenced in clauses (a) and (b) above.
The Parties agree to cooperate to consolidate and file all applications, notices and petitions to
be filed with any Governmental Authority in as few applications as reasonably possible. Each Party
New York MDS, Inc.
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shall furnish to the other Party all information concerning such Party and its Affiliates
reasonably required for inclusion in any application to be made in connection with the Transactions
or to determine compliance with applicable Law. The Stockholders and the Buyer will supply to each
other copies of all material correspondence, filings and communications, including file memoranda
evidencing telephonic conferences, by such Party or its Affiliates with any Governmental
Authorities, with respect to the Transactions, except, if applicable, for documents filed pursuant
to Item 4(c) of the Xxxx Xxxxx Xxxxxx Notification and Report Form or communications regarding the
same. From the Effective Date through the Closing, each Stockholder shall use its commercially
reasonable efforts to obtain any Consents required for the transfer of the Shares to the Buyer.
The Buyer shall pay in a timely manner all FCC filing fees resulting from or payable in connection
with the assignment and transfer of the Shares to the Buyer pursuant to this Agreement. All filing
and other fees resulting from or required in connection with the HSR Act will be paid one-half by
the Company or the Stockholders and one-half by the Buyer. The Buyer and the Stockholders will
provide proper notice to the FCC of the occurrence of the Closing within a reasonable time
following the Closing (and in any event within the time period set forth in the applicable FCC
rules and regulations).
Section 5.4 No Shopping. From the Effective Date until this Agreement is terminated
in accordance with Article VI below, the Stockholders will not, and will cause the Company not to,
directly or indirectly, through its equity-holders, officers, directors, employees, agents or
representatives (collectively, “Representatives”) or otherwise, (a) initiate, encourage the
initiation by any third Person of, or substantively respond to solicitations from any third Person
for, discussions or negotiations relating to any sale or other disposition of any of the Shares,
any assets of the Company or any interest in any of the foregoing (regardless of the form of
transaction), or (b) enter into any agreement or commitment (whether or not binding) with respect
to any such sale or disposition. The Stockholders agree to immediately notify the Buyer if any
third Person attempts to initiate any solicitation, discussion or negotiation with respect to any
of the foregoing.
Section 5.5 Confidentiality. The terms of this Agreement and any information about
the Stockholders, the Buyer or the business of the Company (collectively, the
“Information”) will be kept strictly confidential by the Parties and their respective
Representatives from the Effective Date and continuing for a period of five (5) years from the
Closing or termination of this Agreement in accordance with Article VI below; provided
that, the Buyer’s confidentiality obligations hereunder will not survive the Closing with
respect to the Company or its business. Each Party may make disclosures (a) to the extent required
by Law or any Governmental Authority of competent jurisdiction, and (b) to their Representatives
(including counsel and accountants) as required to perform their obligations under this Agreement;
provided that the Parties will cause all their respective Representatives
(including counsel and accountants) to honor this Section 5.5. Each Party may disclose Information
to any third Persons that are subject to the terms of a confidentiality agreement prohibiting the
further dissemination of such Information beyond that which would otherwise be permitted if such
third Persons were a party to this Section 5.5. The term “Information” does not include
information that: (i) has been or becomes generally available to the public or is now, or in the
future, in the public domain without a breach of this Agreement or a breach of any similar
agreement known to exist by the receiving Party; (ii) prior to disclosure under or pursuant to this
Agreement, is property within the legitimate possession of the receiving Party which can be
verified by independent evidence; (iii) subsequent to disclosure under or pursuant to this
Agreement, is received from a third Person having rights therein without restriction of such third
Person’s or the receiving Party’s rights to disseminate the information that are known by the
receiving Party; (iv) is independently developed by the receiving Party through Persons who have
not had, either directly or indirectly, access to or knowledge of such Information which can be
verified by independent evidence; or (v) is disclosed in connection with an action or proceeding by
a Party to enforce this Agreement or any of the other Transaction Documents.
New York MDS, Inc.
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Section 5.6 Tax Matters.
(a) Tax Indemnity.
(i) The Stockholders shall jointly and severally indemnify and hold harmless
each of the Company, the Buyer and each Affiliate of the Buyer from and against:
(A) all Taxes (or the nonpayment thereof) of the Company for any Pre-Closing Tax
Period and, to the extent applicable, any Pre-Closing Straddle Period (other than
Taxes attributable to any Code Section 338 election made with respect to the
acquisition of the Company by the Buyer or any transactions outside the Ordinary
Course of Business following the Closing); (B) any and all Taxes of any Person
(other than the Company) imposed on the Company as a transferee or successor, by
contract or pursuant to any Law, which Taxes relate to an event or transaction
occurring on or before the Closing; (C) any Tax incurred or suffered by the Company,
the Buyer or any of their Affiliates arising out of a breach by the Stockholders of
any representation or warranty in Section 4.2(h) above, or any covenant or agreement
contained in this Section 5.6; and (D) all Damages arising out of or incident to the
imposition, assessment or assertion of any Tax described in clauses (A), (B) and (C)
above. Notwithstanding anything in this Agreement to the contrary, all matters
relating to Taxes shall be governed by this Section 5.6 and no provision of Article
VII will limit, modify or offset the rights or obligations of the Parties hereunder,
except that any indemnification obligations of the Stockholders under this Section
5.6 shall first be satisfied from the Holdback Amount and, thereafter, the
Stockholders will be jointly and severally liable for the indemnification
obligations set forth in this Section 5.6.
(ii) To the extent applicable to any particular type of Tax imposed on the
Company, the portion of such Tax attributable to any Tax period that begins on or
before the Closing Date and ends after the Closing Date (a “Straddle
Period”) will be apportioned between the period of the Straddle Period that
extends before the Closing through the Closing (the “Pre-Closing Straddle
Period”) and the period of the Straddle Period that extends from the day after
the Closing to the end of the Straddle Period (the “Post-Closing Straddle
Period”) in accordance with this Section 5.6(a)(ii). The portion of such Tax
attributable to the Pre-Closing Straddle Period shall (A) in the case of any Taxes
other than sales or use taxes, value-added taxes, employment taxes, withholding
taxes, and any Tax based on or measured by income, receipts or profits earned during
a Straddle Period, be deemed to be the amount of such Tax for the entire taxable
period multiplied by a fraction, the numerator of which is the number of days in the
Pre-Closing Straddle Period and denominator of which is the number of days in the
Straddle Period, and (B) in the case of any sales or use taxes, value-added taxes,
employment taxes, withholding taxes, and any Tax based on or measured by income,
receipts or profits earned during a Straddle Period, be deemed equal to the amount
which would be payable if the Straddle Period ended on and included the Closing
Date. To the extent that any Tax for a Straddle Period is based on the greater of a
Tax on net income, on the one hand, and a Tax measured by net worth or some other
basis not otherwise measured by income, on the other, the portion of such Tax
related to the Pre-Closing Straddle Period shall be deemed to be (1) if the amount
of such Tax for the Straddle Period is measured by net worth or other basis, the
amount of such Tax determined as though the taxable values for the entire Straddle
Period equal the respective values as of the end of the Closing Date and multiplying
the amount of such Tax by a fraction the numerator of which is the number of days
during the Straddle Period that are in the Pre-Closing Straddle Period and the
denominator of which is the number of days in the Straddle Period or (2) if the
New York MDS, Inc.
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amount of such Tax for the Straddle Period is measured by net income, the
amount of such Tax determined as though the applicable Tax period terminated at the
end of the day on the Closing Date. The portion of Tax attributable to a
Post-Closing Straddle Period shall be calculated in a corresponding manner.
(iii) Any amount paid pursuant to this Section 5.6(a) shall be treated as an
adjustment to the Purchase Price, unless otherwise required by Law.
(iv) After giving effect to the last sentence of Section 5.6(a)(i) above, any
indemnity payment to be made pursuant to this Section 5.6(a) shall be paid no later
than the last to occur of: (A) ten (10) days after the Buyer makes written demand
upon the Stockholders Representative therefor; (B) to the extent such Taxes are not
already delinquent, five (5) days before the due date for payment of such Taxes; and
(C) to the extent any contested Taxes are not required to be paid prior to the
resolution of any Tax Matter in accordance with Section 5.6(e) below, upon the
resolution of any such Tax Matter.
(v) The indemnification provisions in this Section 5.6(a) shall survive the
Closing until ninety (90) days after the expiration of the applicable statute of
limitations (as it may be extended under applicable Law). The Buyer shall not
extend the statute of limitations for any period for which the Stockholders could be
liable for indemnification under this Section 5.6 without the prior written consent
of the Stockholders Representative, which consent shall not be unreasonably withheld
or delayed.
(b) Returns.
(i) The Stockholders shall prepare and timely file, or cause to be prepared and
timely filed, (A) all Returns of the Company relating to Taxes based upon the income
of the Company that are due with respect to any Pre-Closing Tax Period, regardless
of the due date of such Returns, and (B) all other Returns of the Company that are
due with respect to any Pre-Closing Tax Period to the extent the due date for such
Returns is on or prior to the Closing Date. All such Returns will be prepared in a
manner that is consistent with past practices, except as otherwise required by Law.
With respect to any Return described in this Section 5.6(b)(i) with a due date after
the Closing Date, the Stockholders shall submit a copy of such Return to the Buyer
at least thirty (30) days before it is due and shall incorporate all reasonable
comments to such Return made by the Buyer. The Company shall pay or cause to be
paid all Taxes imposed on the Company shown as due and owing on such Returns subject
to payment by the Stockholders pursuant to Section 5.6(a) above for any Taxes not
paid by the Company prior to the Closing.
(ii) The Buyer shall prepare and timely file, or cause to be prepared and
timely filed, all Returns of the Company that are due with respect to any
Post-Closing Tax Period. The Buyer shall pay or cause to be paid all Taxes imposed
on the Company for any Post-Closing Tax Period.
(iii) The Buyer shall prepare and timely file, or cause to be prepared and
timely filed, (A) all Returns of the Company that are due with respect to any
Pre-Closing Tax Period, other than those Returns based upon the income of the
Company, to the extent the due date for such Returns is after the Closing Date, and
(B) all Returns of the Company that are due with respect to a Straddle Period. The
Buyer shall submit a copy
New York MDS, Inc.
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of any such Return to the Stockholders Representative at least thirty (30) days
before it is due and shall incorporate all reasonable comments to such Return made
by the Stockholders Representative. The Buyer shall pay or cause to be paid all
Taxes imposed on the Company shown as due and owing on such Returns subject to
payment by the Stockholders pursuant to Section 5.6(a) above.
(iv) The Buyer shall not, and shall not permit the Company, to amend any Return
of the Company covering any Pre-Closing Tax Period without the prior written consent
of the Stockholders, which consent shall not be unreasonably withheld or delayed.
In any event, the Buyer shall submit a copy of any such amendment to the
Stockholders Representative at least thirty (30) days before filing it and shall
incorporate all reasonable comments to such amendment made by the Stockholders
Representative.
(c) Transfer Taxes. All transfer, documentary, sales, use, stamp,
registration, value added and other such Taxes and fees (including any penalties and
interest) imposed on the Buyer or the Company in connection with this Agreement
(“Transfer Taxes”) will be borne and paid by the Stockholders when due, and the
Stockholders, at their own expense, will cause to be filed all necessary Returns and other
documentation with respect to all such Transfer Taxes.
(d) Cooperation. In connection with the preparation of Returns, audit
examinations, and any administrative or judicial proceedings relating to the Tax liabilities
imposed on the Company for all Pre-Closing Tax Periods, Straddle Periods and Post-Closing
Tax Periods, the Buyer and the Company, on the one hand, and the Stockholders, on the other
hand, shall cooperate fully with each other, including the furnishing or making available
during normal business hours (upon reasonable prior notice) of records, personnel (as
reasonably required), books of account, powers of attorney or other materials necessary or
helpful for the preparation of such Returns, the conduct of audit examinations or the
defense of claims by Taxing Authorities as to the imposition of Taxes.
(e) Controversies and Audits. The Buyer shall notify the Stockholders
Representative upon receipt by the Buyer or any Affiliate of the Buyer of any notice of any
inquiries, assessments, proceedings or similar events received from any Governmental
Authority with respect to Taxes of the Company for which the Stockholders would be required
to indemnify the Buyer, the Company or any their Affiliates pursuant to Section 5.6(a) above
(any such inquiry, assessment, proceeding or similar event, a “Tax Matter”). The
Stockholders, at their expense, shall have the right to represent the interests of the
Company before the relevant Governmental Authority with respect to any Tax Matter and shall
have the right to control the defense, compromise or other resolution of any such Tax
Matter, including responding to inquiries, filing Tax Returns and contesting, defending
against and resolving any assessment for additional Taxes or notice of Tax deficiency or
other adjustment of Taxes of, or relating to, such Tax Matter; provided
that, the Stockholders shall (i) keep the Buyer reasonably informed with respect to
the commencement, status and nature of any Tax Matter, (ii) in good faith, allow the Buyer
to consult with them regarding the conduct of or positions taken with respect to any such
Tax Matter, and (iii) not enter into any settlement of or otherwise compromise any Tax
Matter that affects or may affect the Tax liability of the Company, the Buyer or any of the
Buyer’s Affiliates for any Post-Closing Tax Period or Post-Closing Straddle Period, without
the prior written consent of the Buyer, which consent shall not be unreasonably withheld or
delayed.
(f) Miscellaneous. Except as otherwise required by Law, the Buyer shall not,
without the prior consent of the Stockholders (which consent shall not be unreasonably
withheld or delayed), make, or cause or permit to be made, any Tax election, or adopt or
change any
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method of accounting, or except as provided in Section 5.6(e) above, undertake any
other extraordinary action on or after the Closing, that would reasonably be expected to
adversely affect the Tax liability of the Company or any Stockholder for any Pre-Closing Tax
Period.
Section 5.7 Preservation of Records. The Buyer and the Stockholders agree that each
of them shall preserve and keep the records held by them relating to the Company in respect of
periods ending on or prior to Closing for a period of seven (7) years from the Closing and shall
make such records and personnel available to the other as may be reasonably required by such Party,
including by providing reasonable access during regular business hours upon reasonable advance
notice and under reasonable circumstances and subject to restrictions under applicable Law, in
connection with, among other things, regulatory filings, insurance claims, legal proceedings or tax
audits against or governmental investigations of the Company, the Buyer, the Stockholders or any of
their Affiliates or in order to enable the Buyer or the Stockholders to comply with their
respective obligations under this Agreement and each other Transaction Document. Each of the Buyer
and the Stockholders shall be entitled, at its expense, to make copies of the books and records to
which they are entitled to access pursuant to this Section 5.7. Notwithstanding the foregoing, if
the Buyer or the Stockholders wish to destroy such records at any time during such seven (7)-year
period, then such Party shall first give ninety (90) days’ prior written notice to the other and
such other Party shall have the right at its option and expense, upon prior written notice given to
such Party within such ninety (90)-day period, to take possession of the records within 180 days
after the date of such notice.
Section 5.8 Publicity. Neither the Buyer nor the Stockholders shall issue any press
release or public announcement concerning this Agreement or the Transactions without obtaining the
prior written approval of the other Parties, which approval will not be unreasonably withheld or
delayed, unless, in the sole judgment of the Buyer or the Stockholders, as applicable, disclosure
is otherwise required by applicable Law or by the applicable rules of any stock exchange on which a
Party or any Affiliate lists securities, provided that, to the extent required by
applicable Law, the Party intending to make such release shall use its reasonable efforts
consistent with such applicable Law to consult with the other Party with respect to the timing and
content thereof.
Section 5.9 Further Assurances. From and after the Closing, at the request of the
Buyer, each Stockholder shall execute and deliver or cause to be executed and delivered to the
Buyer such other agreements or instruments, in addition to those required by this Agreement, as the
Buyer may reasonably request, in order to implement the Transactions. From and after the Closing,
at the request of the Stockholders Representative, the Buyer shall execute and deliver or cause to
be executed and delivered to the Stockholders Representative for the benefit of the Stockholders,
such other agreements or instruments, in addition to those required by this Agreement, as the
Stockholders Representative may reasonably request, in order to implement the Transactions.
ARTICLE VI: TERMINATION
Section 6.1 Termination. This Agreement may be terminated and the Transactions
thereby abandoned at any time prior to the Closing: (a) by mutual written consent of the Buyer and
the Stockholders Representative; (b) by the Buyer, by written notice to the Stockholders
Representative, if the Closing has not occurred within twelve (12) months after the Effective Date
(provided that the Buyer is not then in material breach of any of its representations, warranties
or covenants contained in this Agreement); (c) by the Stockholders Representative, by written
notice to the Buyer, if the Closing has not occurred within twelve (12) months after the Effective
Date (provided that none of the Stockholders is then in material breach of any of its
representations, warranties or covenants contained in this Agreement); (d) by the Buyer, by written
notice to the Stockholders Representative, or by the Stockholders Representative, by written notice
to the Buyer, if any Governmental Authority that is
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required to Consent to the Transactions, denies such Consent in writing and, despite the
Parties’ efforts pursuant to Section 5.2 and Section 5.3, the applicable period to seek
reconsideration of such denial expires without obtaining a reversal thereof; (e) by the Buyer, by
written notice to the Stockholders Representative, if any Stockholder is in material breach of any
of its representations, warranties, covenants or agreements set forth in this Agreement, and such
breach remains uncured for thirty (30) days following written notice by the Buyer to the
Stockholders Representative, which notice reasonably describes the breach; or (f) by the
Stockholders Representative, by written notice to the Buyer, if the Buyer is in material breach of
any of its representations, warranties, covenants or agreements set forth in this Agreement, and
such breach remains uncured for thirty (30) days following written notice by the Stockholders
Representative to the Buyer, which notice reasonably describes the breach. In the case of
termination pursuant to the preceding clauses (b) or (c), the other Party, by written notice to the
terminating Party given within ten (10) days after receipt of the termination notice (and provided
that such extending Party is not then in material breach of any of its representations, warranties
or covenants contained in the Agreement), may nonetheless extend the effectiveness of this
Agreement for up to an additional four (4) months if the only closing condition(s) set forth in
Section 3.4(a) not then satisfied are those sets forth in clauses (i) and/or (iv) thereof.
Section 6.2 Effect of Termination. In the event of a valid termination of this
Agreement on or before the Closing, this Agreement shall become null and void and of no further
force and effect and no Party shall have any liability or further obligation to the other Parties
or any other Person, except that nothing herein will relieve any Party from liability for any
breach by such Party of this Agreement.
ARTICLE VII: REMEDIES
Section 7.1 Survival. The representations and warranties contained in this Agreement
shall survive the Closing until the eighteen (18) month anniversary of the Closing and shall expire
at such time (the “Expiration Date”); provided that (a) the Expiration Date
for any Claim relating to a breach of the representations and warranties set forth in Section
4.2(h) will be as set forth in Section 5.6, (b) there will be no Expiration Date for any Claim
relating to a breach of the representations and warranties set forth in Section 4.1 or Section
4.2(b), (c) the Expiration Date for any Claim relating to a breach of the representations and
warranties set forth in Section 4.2(i) will be the three (3)-year anniversary of the Closing (the
representations and warranties referred to in the foregoing clauses (a) and (b) and in this clause
(c) being referred to herein as the “Fundamental Representations”), and (d) any Claim
pending on any Expiration Date for which a notice has been given in accordance with Section 7.4 or
Section 7.5 below on or before such Expiration Date may continue to be asserted and indemnified
against until finally resolved. All of the covenants and agreements of the Stockholders and the
Buyer contained in this Agreement will survive after the date of this Agreement until performed in
accordance with their terms, unless and to the extent only that non-compliance with covenants or
agreements is waived in writing by the Party entitled to such performance. No claims for a breach
of covenant or other agreement set forth in this Agreement may be made or brought by any Party
after the expiration of the applicable statute of limitations period, unless a different expiration
date is specifically provided for herein.
Section 7.2 Stockholders’ Indemnification Obligations. The Stockholders, jointly and
severally, shall indemnify and hold harmless the Buyer, the Company, their respective Affiliates,
all of their respective Representatives, and their respective successors and assigns (collectively,
the “Buyer Indemnified Parties”) from and against any and all Damages based upon,
attributable to or resulting from: (a) a breach of any representation or warranty of the
Stockholders set forth in this Agreement or in any other Transaction Document (provided
that, with respect to the representations and warranties set forth in Section 4.1 above,
each Stockholder shall only be severally liable for indemnification with respect to its own
breaches); (b) a breach of any covenant or other agreement on the part of the Stockholders under
this Agreement or under any other Transaction Document; or (c) any Selling Expenses.
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Section 7.3 Buyer’s Indemnification Obligations. The Buyer shall indemnify and hold
harmless the Stockholders, their respective Affiliates, all of their respective Representatives,
and their respective successors and assigns from and against any and all Damages based upon,
attributable to or resulting from: (a) a breach of any representation or warranty of the Buyer set
forth in this Agreement or in any other Transaction Document; (b) a breach of any covenant or other
agreement on the part of the Buyer under this Agreement or under any other Transaction Document; or
(c) any operations of the Company relating solely to periods after the Closing.
Section 7.4 Third Party Claims.
(a) In the event of any Claim by a third Person, the indemnified Party shall reasonably
and promptly notify the indemnifying Party of such Claim (a “Claim Notice”) once the
indemnified Party has knowledge of it. The indemnifying Party shall have the right, at its
sole option and expense, to control the defense of the Claim and to be represented by
counsel of its choice, which must be reasonably satisfactory to the indemnified Party, and
to defend against, negotiate, settle or otherwise deal with any Claim which relates to any
Damages indemnified against hereunder; provided that the indemnifying Party
shall not, without the consent of the indemnified Party (which consent, as it relates to
clause (iii) below, shall not be unreasonably withheld or delayed), enter into any
settlement, compromise or discharge of a Claim that by its terms (i) includes injunctive or
other non-monetary relief that adversely affects the indemnified Party in any material
respect, (ii) does not release the indemnified Party completely in connection with such
Claim, or (iii) would otherwise adversely affect the indemnified Party in any material
respect. If the indemnifying Party elects to defend against, negotiate, settle or otherwise
deal with any Claim which relates to any Damages indemnified against hereunder, it shall
within thirty (30) days (or sooner, if the nature of the Claim so requires) after receipt of
the Claim Notice, notify the indemnified Party of its intent to do so. If the indemnifying
Party shall assume the defense of any Claim, the indemnified Party may participate, at its
own expense, in the defense of such Claim; provided that such indemnified
Party shall be entitled to participate in any such defense with separate counsel at the
reasonable expense of the indemnifying Party if (A) so requested by the indemnifying Party
to participate or (B) in the reasonable opinion of counsel to the indemnified Party, a
conflict or potential conflict exists between the indemnified Party and the indemnifying
Party that would make such separate representation advisable; and provided,
further, that the indemnifying Party shall not be required to pay for more
than the reasonable costs incurred for one such counsel for all indemnified Parties in
connection with any Claim.
(b) If the indemnifying Party elects not to defend against, negotiate, settle or
otherwise deal with any Claim which relates to any Damages indemnified against hereunder,
fails to notify the indemnified Party of its election as herein provided or disputes its
obligation to indemnify the indemnified Party for such Damages under this Agreement, the
indemnified Party may defend against, negotiate, settle or otherwise deal with such Claim;
provided that the indemnified Party shall not, without the consent of the
indemnifying Party, enter into any settlement, compromise or discharge of a Claim that by
its terms includes injunctive or other non-monetary relief that adversely affects the
indemnifying Party in any material respect. If the indemnified Party defends any Claim,
then the indemnifying Party shall reimburse the indemnified Party for the Damages, including
the reasonable expenses incurred by the indemnified Party in defending such Claim upon
submission of periodic invoices or other substantiation.
(c) The Parties agree to cooperate fully with each other in connection with the
defense, negotiation, or settlement of any Claim by a third Person.
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(d) After any final judgment or award shall have been rendered by a court, arbitration
board or administrative agency of competent jurisdiction and the expiration of the time in
which to appeal therefrom, or a settlement shall have been consummated, or the indemnified
Party and the indemnifying Party shall have arrived at a mutually binding agreement with
respect to a Claim hereunder, the indemnified Party shall forward to the indemnifying Party
notice of any sums due and owing by the indemnifying Party pursuant to this Agreement with
respect to such matter.
(e) The failure of the indemnified Party to give reasonably prompt notice of any Claim
shall not release, waive or otherwise affect the indemnifying Party’s obligations with
respect thereto (provided such notice is given prior to any applicable Expiration Date)
except to the extent that the indemnifying Party can demonstrate actual loss and prejudice
as a result of such failure.
Section 7.5 Other Claims. Any indemnifiable Claim hereunder that is not a Claim by a
third Person shall be asserted by the indemnified Party by promptly delivering written notice
thereof (including the basis of the Claim and the amount or estimated amount thereof, if known and
quantifiable) to the indemnifying Party after the indemnified Party becomes aware of such Claim.
The failure of the indemnified Party to give reasonably prompt notice of any Claim (provided such
notice is given prior to any applicable Expiration Date) shall not release, waive or otherwise
affect the indemnifying Party’s obligations with respect thereto except to the extent that the
indemnifying Party can demonstrate actual loss and prejudice as a result of such failure. If the
indemnifying Party or the Stockholders Representative, as applicable, does not respond to such
notice within thirty (30) days after its receipt, it shall have no further right to contest the
validity of such Claim.
Section 7.6 Limitations on Indemnification.
(a) Notwithstanding anything to the contrary set forth in this Article VII, the
Stockholders shall only be liable to the Buyer Indemnified Parties in respect of any Damages
pursuant to Section 7.2(a) of this Agreement only when, and only for any amounts by which,
the aggregate amount of all such Damages to which all Buyer Indemnified Parties are entitled
to indemnification hereunder exceed $100,000 (the “Indemnity Deductible”), at which
point the Stockholders shall be liable only for the amount of Damages in excess of the
Indemnity Deductible, provided that, the obligation of the Stockholders to
indemnify any Buyer Indemnified Party in respect of any Damages resulting from a breach of
any Fundamental Representation or from any Claim based on fraud shall not be subject to, or
count against, the Indemnity Deductible.
(b) Notwithstanding anything to the contrary set forth in this Article VII, the
aggregate liability of the Stockholders for indemnification Claims pursuant to Section
7.2(a) of this Agreement will be limited to $4,000,000 (the “Indemnity Cap”),
provided that, the obligation of the Stockholders to indemnify any Buyer
Indemnified Party in respect of any Damages resulting from a breach of any Fundamental
Representation or from any Claim based on fraud shall not be subject to, or count against,
the Indemnity Cap.
(c) Notwithstanding anything to the contrary set forth in this Article VII, no
Stockholder shall be liable for Damages under Section 7.2(a) in an amount greater than such
Stockholder’s Respective Portion of the Purchase Price, provided that, the
limitation set forth in this Section 7.6(c) shall not apply to any such Damages resulting
from any Claim based on the fraud of any such Stockholder.
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(d) The amount of the indemnification payable by any Stockholder hereunder to any Buyer
Indemnified Party shall be reduced by any net cash proceeds actually received by the Company
with respect to the underlying Claim under any third-party insurance policy maintained by
the Company, in effect as of the Closing and identified on Schedule 4.2(i). Each
indemnified Party agrees to make any reasonable claim under such insurance policies prior to
seeking to recover any Damages under this Agreement, provided that, (i) an
indemnified Party may provide notice to preserve its rights hereunder, and (ii) the Buyer
shall be entitled to retain a portion of the Holdback Amount in accordance with Section 2.2
above until cash proceeds are received under such insurance policies or coverage is denied.
(e) Each Indemnified Party shall take and shall cause its Affiliates to take all
commercially reasonable steps to mitigate any Damages upon becoming aware of any Claim.
(f) Notwithstanding anything to the contrary in this Agreement, for purposes of this
Article VII, no Indemnified Party will be entitled to recover for any consequential,
incidental, indirect, special or punitive damages (including loss of revenue, income or
profits, diminution of value or loss of business reputation or opportunity) arising out of
or relating to a breach or alleged breach hereof, except to the extent such Indemnified
Party is liable to any third Person in respect thereof.
(g) The Buyer acknowledges and agrees that no Stockholder shall have any liability
under any provision of this Agreement for any Damages to the extent such Damages result from
(i) actions taken by the Buyer or any of its Affiliates with respect to the License or any
Contract entered into by the Buyer or any of its Affiliates with regard to the License, or
(ii) any violation of Law by the Buyer or any of its Affiliates.
Section 7.7 Exclusive Remedy. From and after the Closing, the sole and exclusive
remedy for any breach or failure to be true and correct, or alleged breach or failure to be true
and correct, of any representation or warranty or any covenant or agreement in this Agreement,
shall be indemnification to the extent available under this Article VII. In furtherance of the
foregoing, each of the Parties hereby waives, to the fullest extent permitted by applicable Law,
any and all other rights, claims and causes of action (including rights of contribution (except as
among the Stockholders)), known or unknown, foreseen or unforeseen, which exist or may arise in the
future, that it may have against the Stockholders or the Buyer or their Affiliates, as the case may
be, arising under or based upon any Law (including any such Law arising under or based upon any
securities Law, common Law or otherwise). Notwithstanding the foregoing, this Section 7.7 shall
not operate to limit the rights of the Parties to seek equitable remedies (including specific
performance or injunctive relief).
Section 7.8 Other Indemnification Matters. Notwithstanding anything to the contrary
set forth in this Article VII, (a) any indemnification obligations of the Stockholders, or any of
them, shall first be offset against the Holdback Amount and, thereafter, the Stockholders will be
liable for all indemnification obligations to the Buyer Indemnified Parties, subject to the
limitations contained herein; (b) the Stockholders do not have any individual right to assert any
Claim under this Article VII, and any and all Claims on behalf of the Stockholders may be brought
only by the Stockholders Representative; and (c) any amounts paid pursuant to this Article VII
shall be treated as an adjustment to the Purchase Price, unless otherwise required by Law.
ARTICLE VIII: MISCELLANEOUS
Section 8.1 Entire Agreement. This Agreement and the other Transaction Documents
constitute the entire agreement among the Parties pertaining to the subject matter hereof and
supersede all
prior and contemporaneous agreements, understandings, negotiations and discussions, whether
oral or written, of the Parties with respect to the subject matter hereof, except for the Letter of
Intent to the extent specifically referenced herein.
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Section 8.2 Amendments and Waivers. Except as provided in Section 8.9, any provision
of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing
and signed (in the case of an amendment) by the Buyer and the Stockholders Representative or (in
the case of a waiver) by the Party against whom the waiver is to be effective, and then only to the
extent of such written amendment or waiver. No failure or delay by any Party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
Section 8.3 Assignment. This Agreement shall be binding upon and shall inure to the
benefit of the Parties and their respective successors and permitted assigns. This Agreement may
not be assigned by any Party without the prior written consent of the other Party(ies), which shall
not be unreasonably withheld, conditioned or delayed, except that the Buyer may assign its rights
(but not its obligations) under this Agreement to any of its Affiliates upon delivery of written
notice to the Stockholders Representative. No such assignment shall release the Buyer from its
obligations under this Agreement and the other Transaction Documents. If any corporate Stockholder
shall dissolve after the Closing, the stockholders of such corporation (and their successors and
assigns) shall be deemed to be the assignees of the rights and obligations of such corporate
Stockholder under this Agreement and the other Transaction Documents, without requiring the consent
of the other Party(ies).
Section 8.4 No Third Party Beneficiaries. Except for any third Persons entitled to
indemnification pursuant to Article VII above, nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any Person that is not a Party hereto any
rights or remedies under or by reason of this Agreement or the Transactions.
Section 8.5 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal Laws of the Commonwealth of Virginia, without reference to the choice
of law principles thereof.
Section 8.6 Access; Limited Representations. Buyer acknowledges that it and its
representatives have been permitted reasonable access to the books and records, facilities,
equipment, Returns, Contracts and other properties and assets of the Company that it and its
representatives have desired or requested to see or review, and that it and its representatives
have had a reasonable opportunity to meet with the officers and directors of the Company to discuss
the Company and its business and assets. The Buyer acknowledges that none of the Stockholders, any
of the officers or directors of the Company or any other Person has made any representation or
warranty, expressed or implied, as to the accuracy or completeness of any information regarding the
Company and its business and assets furnished or made available to the Buyer and its
representatives, except as expressly set forth in this Agreement or any other Transaction Document.
The Buyer acknowledges that, except for the representations and warranties contained in Section 4.1
and Section 4.2 of this Agreement or in any other Transaction Document, neither the Stockholders
nor any other Person has made, and the Buyer has not relied on, any other express or implied
representation or warranty by or on behalf of the Stockholders, and the Buyer will make no Claim
with respect thereto.
Section 8.7 Expenses. Except as otherwise expressly provided in this Agreement,
whether or not the Transactions are consummated, the Parties shall bear their respective expenses
(including all compensation and expenses of counsel, financial advisors, consultants and other
professionals) incurred in connection with this Agreement and the Transactions. As among the
Stockholders, unless otherwise
New York MDS, Inc.
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agreed among the Stockholders, each Stockholder shall bear its respective expenses (including
all compensation and expenses of counsel, financial advisors, consultants and other professionals)
incurred in connection with this Agreement and the Transactions.
Section 8.8 Notices. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given or made (a) upon delivery, if delivered
personally (by courier service or otherwise), as evidenced by written receipt or other written
proof of delivery (which may be a printout of the tracking information of a courier service that
made such delivery), (b) upon confirmation of dispatch if sent by facsimile transmission (which
confirmation shall be sufficient if shown by evidence produced by the facsimile machine used for
such transmission), in each case to the applicable addresses set forth below; or (c) the next
business day if sent by overnight delivery via a reliable express delivery service:
| If to the Buyer, to: | ||||
| Sprint Nextel Corporation | ||||
| 0000 Xxxxxx Xxxxxx Xxxxx | ||||
| Xxxxxx, Xxxxxxxx 00000 | ||||
| Attention: | Vice President, Spectrum Development | |||
| Phone: | (000) 000-0000 | |||
| Facsimile: | (000) 000-0000 | |||
| With a copy (that shall not constitute notice) to: | ||||
| Sprint Nextel Corporation | ||||
| Legal Department | ||||
| 0000 Xxxxxx Xxxxxx Xxxxx | ||||
| Xxxxxx, Xxxxxxxx 00000 | ||||
| Attention: Spectrum Management | ||||
| Phone: | (000) 000-0000 | |||
| Fax: | (000) 000-0000 | |||
| and to: | ||||
| Xxxxx Day | ||||
| 000 Xxxx X. XxXxxxxxx Xxxx., Xxxxx 000 | ||||
| Xxxxxxxx, Xxxx 00000-0000 | ||||
| (For U.S. Mail: X.X. Xxx 000000, Xxxxxxxx, Xxxx 00000-0000) | ||||
| Attention: | Xxxxxxx X. Xxxxx, Esq. | |||
| Phone: | (000) 000-0000 | |||
| Facsimile: | (000) 000-0000 | |||
| If to the Stockholders or the Stockholders Representative, to: | ||||
| c/o Xxxxx X. Xxxxxxx | ||||
| Chief Financial Officer | ||||
| Xxxx Industries, Inc. | ||||
| 0000 Xxxxxxxx Xxxxxxxx, Xxxxx 0000 | ||||
| Xxxxxxxxxxxx, Xxxxxxx 00000 | ||||
| Phone: | (000) 000-0000 | |||
| Facsimile: | (000) 000-0000 | |||
New York MDS, Inc.
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| With a copy (that shall not constitute notice) to: | ||||
| Manatt Xxxxxx Xxxxxxxx | ||||
| 00000 Xxxx Xxxxxxx Xxxx. | ||||
| Xxx Xxxxxxx, Xxxxxxxxxx 00000 | ||||
| Attention: | Xxxx Xxxxxx, Esq. | |||
| Phone: | (000) 000-0000 | |||
| Facsimile: | (000) 000-0000 | |||
Any Party may change its address or facsimile number for the purposes of this Section 8.8 by
giving notice as provided herein.
Section 8.9 Stockholders Representative.
(a) Each Stockholder hereby appoints the Stockholders Representative as its agent and
attorney-in-fact, with full power and authority to represent each Stockholder and such
Stockholder’s successors and assigns with respect to all matters arising under this
Agreement and each other Transaction Document; provided that, the
Stockholders Representative will not be entitled to take any action with respect to any
particular Stockholder without the consent of such Stockholder where such action would (i)
reduce the Purchase Price, (ii) reduce such Stockholder’s Respective Portion of the Purchase
Price or the Holdback Amount, (iii) increase the Holdback Amount, (iv) increase the
liability of such Stockholder under this Agreement or the other Transaction Documents or
otherwise materially and adversely affect such Stockholder disproportionately to the other
Stockholders, (v) amend the provisions of Article VII above or this Section 8.9, or (vi)
agree to the extension of any time period set forth in this Agreement; and provided,
further, that in any instance where a Stockholder is or may be severally
liable under this Agreement or the other Transaction Documents, only such Stockholder (or
its successors and assigns) shall have the power and authority to take action with respect
such matter. In addition, the Stockholders Representative shall have no authority to
execute or deliver the documents, certificates or agreements required to be executed and/or
delivered by each Stockholder pursuant to Section 3.2 hereof. Subject to the foregoing
limitations and the Contribution Agreement referred to in Section 8.14 below, the
Stockholders Representative shall have full power and authority, on behalf of each
Stockholder and such Stockholder’s successors and assigns, to interpret the terms and
provisions of this Agreement and each other Transaction Document, to dispute or fail to
dispute any Claim under this Agreement or any other Transaction Document, to negotiate and
compromise any dispute that may arise under this Agreement or any other Transaction Document
and to sign any releases or other documents with respect to any such dispute;
provided that the Stockholders Representative shall not, without the consent
of all the affected Stockholders (which consent shall not be unreasonably withheld or
delayed), enter into any settlement, compromise or discharge of a Claim that by its terms
(1) includes injunctive or other non-monetary relief that adversely affects a Stockholder in
any material respect, (2) does not release the Stockholders completely in connection with
such Claim, or (3) would otherwise adversely affect a Stockholder disproportionately to the
other affected Stockholders. Notwithstanding the foregoing, any Stockholder may
participate, at its own expense, in the defense of any Claim or dispute arising hereunder.
(b) Notwithstanding the foregoing, the Buyer shall be entitled to rely on any actions
taken by the Stockholders Representative as the actions of all of the Stockholders as if
expressly ratified and confirmed in writing by each of them, and no Stockholder shall have
any cause of action against the Buyer for any action taken by the Buyer in reliance upon the
instructions or decisions of the Stockholders Representative.
New York MDS, Inc.
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(c) If, for any reason, the Stockholders Representative named in this Agreement is
unable to serve as such, or while serving as such he or she resigns, the Stockholders
holding at least a majority of the Shares immediately prior to the Closing will select in
writing a substitute Stockholders Representative, who must be (i) one of the individuals
identified as an officer or director of the Company on Schedule 4.2(i), or (ii) an
individual who is otherwise reasonably familiar with the Transactions and the operations of
the Company. Upon selection of any substitute Stockholders Representative, the Stockholders
will provide prompt written notice thereof to the Buyer. If, for any reason, there is no
Stockholders Representative at any time, all references in this Agreement to the
Stockholders Representative will be deemed to refer to the Stockholders holding at least a
majority of the Shares immediately prior to the Closing.
(d) In performing any of his or her duties under this Agreement or upon the claimed
failure to perform his or her duties under this Agreement, the Stockholders Representative
will not be liable to the Stockholders or the Buyer or any of its Affiliates for any Damages
that the Stockholders or the Buyer or any such Affiliates may incur as a result of any act,
or failure to act, by the Stockholders Representative under this Agreement, except to the
extent that a court of competent jurisdiction finally determines that such Damages were the
result of the gross negligence or willful misconduct of the Stockholders Representative.
The limitation of liability provisions of this Section 8.9(d) shall survive the termination
of this Agreement and any resignation or other termination of the Stockholders
Representative.
Section 8.10 Invalidity. In the event that any of the provisions contained in this
Agreement or in any other Transaction Document, 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 provision of this Agreement or such other Transaction Document and such provision will be
ineffective only to the extent of such invalidity, illegality or unenforceability, unless the
consummation of the Transactions is impaired thereby.
Section 8.11 Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement must be construed as if drafted jointly by the Parties and no presumption or
burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. The word “including” shall mean including without limitation.
Any reference to the singular in this Agreement shall also include the plural and vice versa. The
phrase “knowledge of the Stockholders” or words of similar import means the knowledge of any of the
officers or directors of the Company identified in Schedule 4.2(i) or of the officers or
directors of any Stockholder, in each case, obtained or obtainable after reasonable investigation.
All references to “true and complete” copies of specified documents, means true and complete copies
of such documents, together with all material notices, waivers, amendments, modifications and
supplements thereto. The headings of the Articles and Sections herein are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement.
Section 8.12 Specific Performance. The Stockholders acknowledge that the Company and
its assets (including each License) are unique and that the Stockholders’ failure to perform this
Agreement will cause the Buyer irreparable damage and injury which cannot be reasonably or
adequately compensated for in damages in an action at law. Therefore, the Buyer will be entitled,
as a matter of right, to require of the Stockholders, specific performance of all of their
respective obligations under this Agreement, without a showing of irreparable harm beyond the
concession of the Stockholders in this Section 8.12, or proof of specific monetary or other
damages, but without waiving any right to money or other damages, and to obtain injunctive and
other equitable relief in any court of competent jurisdiction to prevent the violation or
threatened violation of any of the provisions of this Agreement. Each
Stockholder acknowledges that the provisions of this Section 8.12 constitute an essential
element of this Agreement, without which this Agreement would not have been executed by the Buyer.
New York MDS, Inc.
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Section 8.13 Signatures. This Agreement may be executed and delivered (including by
facsimile transmission) in one or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
Section 8.14 Termination. Effective at the Closing, the Stockholders agree that any
written or oral agreements between or among any two or more or all of them or the Company relating
to the Shares or the Company (except for (a) this Agreement, (b) the other Transaction Documents
and (c) that certain Contribution Agreement, dated as of the Effective Date, by and among the
Stockholders) shall be terminated and of no further force or effect.
[this space left blank intentionally — signature page immediately follows]
New York MDS, Inc.
- 29 -
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the Effective Date.
| Buyer: | ||||||||||
| SPRINT NEXTEL CORPORATION | ||||||||||
By: |
/s/ Xxxxxxxxxxx X. Xxxxxx | |||||||||
Name: |
Xxxxxxxxxxx X. Xxxxxx | |||||||||
Title: |
SVP, Corporate Development and Spectrum Group | |||||||||
| Stockholders: | ||||||||||
| PRIVATE NETWORKS, INC. | MULTIPOINT INFORMATION SYSTEMS, INC. | |||||||||
By:
|
/s/ Xxxxx X. Xxxxxxx | By: | /s/ Xxxxx Xxxxxx | |||||||
Name:
|
Xxxxx X. Xxxxxxx | Name:
|
Xxxxx Xxxxxx | |||||||
Title:
|
President | Title:
|
President | |||||||
| BROADCAST DATA CORP. | XXXX INDUSTRIES, INC. (successor-in-interest to SkyTel, Inc.). | |||||||||
By:
|
/s/ Xxxxx X. Xxxxxxxxx | By: | /s/ Xxxxx X. Xxxxxxx | |||||||
Name:
|
Xxxxx X. Xxxxxxxxx | Name:
|
Xxxxx X. Xxxxxxx | |||||||
Title:
|
President | Title:
|
EVP & Chief Financial Officer | |||||||
| Stockholders Representative: | ||||||||||
| /s/ Xxxxx X. Xxxxxxx | ||||||||||
| Xxxxx X. Xxxxxxx, in his
capacity as the Stockholders Representative under this Agreement |
||||||||||
New York MDS, Inc.
- 30 -
SCHEDULE A
License Information
| CALL SIGN | MARKET | ST | LICENSEE | GROUP | $ ALLOCATION | |||||||
WLK227
|
New York | NY | New York MDS, Inc. | BRS2 | 62,586,278 | |||||||
TOTAL
|
62,586,278 | |||||||||||
