EXHIBIT 2.2
AMENDMENT NO. 1 TO PURCHASE AGREEMENT
This AMENDMENT NO. 1 TO PURCHASE AGREEMENT (this "AMENDMENT") is made
and entered into as of January 13, 2004, by and among Aether Systems, Inc., a
Delaware corporation ("SELLER"), TeleCommunication Systems, Inc., a Maryland
corporation ("PARENT"), TSYS Acquisition Corp., a Maryland corporation and a
wholly owned subsidiary of Parent ("TSYS"), and TeleCommunication Systems
Limited, a company organized under the laws of England and a wholly owned
subsidiary of Parent ("TCS LTD.").
RECITALS
WHEREAS, Seller, TSYS and Parent have previously entered into that
certain Purchase Agreement dated as of December 18, 2003 (the "PURCHASE
AGREEMENT");
WHEREAS, the parties hereto wish to amend the Purchase Agreement to add
TCS Ltd. as a party to the Purchase Agreement; and
WHEREAS, the parties hereto wish to amend the Purchase Agreement to
provide for the payment of a portion of the consideration in common stock of the
Parent.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
AMENDMENTS TO THE PREAMBLE AND RECITALS
OF THE PURCHASE AGREEMENT
1.1 Amendments to Preamble to the Purchase Agreement. The preamble
to the Purchase Agreement shall be amended and restated in its entirety as
follows:
'This PURCHASE AGREEMENT ("AGREEMENT"), is made and entered
into as of December 18, 2003, by and among Aether Systems, Inc., a Delaware
corporation ("AETHER" or "SELLER"), TeleCommunication Systems, Inc., a Maryland
corporation ("PARENT"), TSYS Acquisition Corp., a Maryland corporation and
wholly owned subsidiary of Parent ("TSYS"), and TeleCommunication Systems
Limited, a corporation formed under the laws of the United Kingdom and a wholly
owned subsidiary of Parent ("TCS LTD.," and together with TSYS, the "BUYER").
TSYS, TCS Ltd., Parent and Seller are referred to collectively herein as the
"PARTIES" and each is individually, a "PARTY."'
1.2 Amendments to Recitals of the Purchase Agreement. The fourth
recital to the Purchase Agreement shall be amended and restated in its entirety
as follows:
'WHEREAS, Seller desires to sell, convey, transfer, assign and deliver
to TSC Ltd., and TCS Ltd. desires to purchase, all the issued and outstanding
equity interests of Aether European Holdings; and'
ARTICLE II
AMENDMENTS TO ARTICLE I OF THE PURCHASE AGREEMENT
2.1 Amendment to Definitions.
(a) The following definitions shall be added to Article I
of the Purchase Agreement in the appropriate alphabetical order:
'"ACCREDITED INVESTOR" shall have the meaning set forth in
Regulation D promulgated under the Securities Act.
"CASH BALANCE ADJUSTMENT AMOUNT" shall have the meaning set
forth in Section 3.3.
"CASH BALANCE OBJECTION NOTICE" shall have the meaning set
forth in Section 3.3.
"CASH BALANCE RESOLUTION PERIOD" shall have the meaning set
forth in Section 3.3.
"CASH BALANCE STATEMENT" shall have the meaning set forth in
Section 3.3.
"CASH CONSIDERATION" shall have the meaning set forth in
Section 3.2(a).
"CLOSING CASH BALANCE" shall have the meaning set forth in
Section 3.3.
"COMPLETED FINANCING AGREEMENTS" shall mean those financing
agreements attached as Exhibit 10 to Parent's Form 8-K as filed with the SEC on
December 23, 2003.
"CONSIDERATION" shall have the meaning set forth in Section
3.2(a).
"EFFECTIVE TIME" shall mean 12:01 a.m. (EST) on January 1,
2004.
"EFFECTIVE TIME ACCOUNTS RECEIVABLES" shall have the meaning
set forth in Section 6.3(j).
"EFFECTIVE TIME ADJUSTMENT AMOUNT" shall have the meaning set
forth in Section 3.3A(a).
"EFFECTIVE TIME CASH" shall have the meaning set forth in
Section 3.3A(a).
"EFFECTIVE TIME PAYMENTS" shall have the meaning set forth in
Section 3.3A(a).
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"EFFECTIVE TIME STATEMENT" shall have the meaning set forth in
Section 3.3A(a).
"EFFECTIVE TIME STATEMENT OBJECTION NOTICE" shall have the
meaning set forth in Section 3.3A(b).
"EFFECTIVE TIME STATEMENT RESOLUTION PERIOD" shall have the
meaning set forth in Section 3.3A(b).
"FAIR MARKET VALUE" shall have the meaning set forth in
Section 3.2(a).
"INTERIM PERIOD" shall mean the period of time from and after
the Effective Time through the close of business of the day preceding the
Closing.
"NOTE" shall mean that certain promissory note in the original
principal amount of $1,000,000 made by Parent and payable to Seller and dated as
of the Closing Date.
"PARENT COMMON STOCK" shall have the meaning set forth in
Section 3.2(a).
"PARENT COMMON STOCK CONSIDERATION" shall have the meaning set
forth in Section 3.2(a).
"PARTIES" shall have the meaning set forth in the preamble.
"RETAINED CASH" shall mean cash that Seller will not remove
from the bank accounts of the Acquired Aether Entities prior to the Closing and
that will not be AAE Excluded Assets, which cash, in aggregate, as estimated by
Seller will total one million dollars ($1,000,000) as of the Closing Date. For
the avoidance of doubt, Retained Cash does not include any cash of Beyerholm &
Moe ApS or Xxxx Communications Scandinavia ApS.'
(b) The definition of the term "Ancillary Agreements" in
the Purchase Agreement shall be amended and restated in its entirety as follows:
'"ANCILLARY AGREEMENTS" shall mean the Note, the Transition
Services Agreement, the Trademark License Agreement, the Deal License Agreement,
the Xxxx of Sale, the Assignment and Assumption Agreement, Form 8954 and such
other documents contemplated and necessary to effectuate the transactions
contemplated herein.'
(c) The definition of the term "Assumed Liabilities" in
the Purchase Agreement shall be amended and restated in its entirety as follows:
'"ASSUMED LIABILITIES" shall mean shall mean (i) all
Liabilities of the Business set forth on the Closing Net Working Capital
Statement, (ii) Liabilities included in the line item "deferred revenue" as set
forth on the Closing Balance Sheet, (iii) all Liabilities incurred in connection
with, arising from or relating to Buyer's (or any of its Affiliates', including
the Acquired Aether Entities') ownership, operation, or use of the Business,
including all of the Purchased Assets and the AAE Purchased Assets, from and
after the Closing Date; (iv) all Liabilities incurred in connection with,
arising from or relating to Seller's (or any of its
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Affiliates', including the Acquired Aether Entities) ownership, operation, or
use of the Business, including all of the Purchased Assets and the AAE Purchased
Assets, during the Interim Period, but excluding any Liabilities resulting from,
or action or omission in breach of, the covenants of Seller included in Section
6.1 of this Agreement; (v) without limiting the scope of any other subclause of
this definition, all Liabilities arising under or resulting from the Assigned
Contracts, but only to the extent such Liabilities involve the observance,
payment, performance or discharge of (or failure to observe, pay, perform or
discharge) obligations due and owing from and after the Effective Time, pursuant
to the terms of such Assigned Contract; and (v) Liabilities arising under or
relating to statutory rights under Applicable Law (such as notice requirements,
seniority and similar rights) of Employees of the Acquired Aether Entities from
and after the Effective Time and salary, bonus and benefit payments that have
accrued but are not yet due and payable to Employees of the Acquired Aether
Entities (including all Employees of the Acquired Aether Entities).'
(d) The definition of the term "Buyer Indemnitees" in the
Purchase Agreement shall be amended and restated in its entirety as follows:
'"BUYER INDEMNITEES" shall mean TSYS, TCS Ltd., their
respective Affiliates (including Parent) and their respective Representatives.'
(e) The definition of the term "Closing Balance Sheet" in
the Purchase Agreement shall be amended and restated in its entirety as follows:
'"CLOSING BALANCE SHEET" shall mean an audited balance sheet
of the Business as of the Effective Time prepared by the Seller in accordance
with GAAP and delivered pursuant to Section 3.2(d).'
(f) The definition of the term "Closing Date Accounts
Receivables" shall be deleted in its entirety from the Purchase Agreement and
replaced in every instance where it appears with "Effective Time Accounts
Receivables."
(g) The definition of the term "Purchased Assets" in the
Purchase Agreement shall be amended and restated in its entirety as follows:
'"PURCHASED ASSETS" shall mean (i) the Leased Real Property,
(ii) the Personal Property, (iii) the Permits, (iv) the Accounts Receivable, (v)
the Intellectual Property, (vi) the Inventory, maintenance and operating
supplies used exclusively in the Business as currently operated, (vii) the Books
and Records, (viii) all Assigned Contracts, (ix) all data, records, files,
manuals, blueprints and other documentation related exclusively to the Purchased
Assets and the operation of the Business including service and warranty records,
sales promotion materials, creative materials, art work, photographs, public
relations and advertising material, studies, reports, correspondence and other
similar documents and records used exclusively in the Business, whether in
electronic form or otherwise, (x) all client, customer and supplier lists,
telephone numbers and electronic mail addresses with respect to past, present or
prospective clients, customers and suppliers, (xi) all catalogs and brochures
relating exclusively to the Business, purchasing records and records relating to
suppliers, (xii) copies of all personnel
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records of the Transferred Employees, (xiii) all goodwill incident to the
Business, (xiv) all Prepaid Expenses and security deposits relating exclusively
to the Business (other than any collateral provided by Seller or its Affiliates
(excluding the Aether Acquired Entities) in respect of Credit Support
Arrangements), (xv) all insurance policies and insurance benefits in proportion
to their relationship to the Purchased Assets, the AAE Purchased Assets, the
Purchased Shares, the Acquired Aether Entities or the Business, (xvi) all other
intangible assets (including all Claims, contract rights and warranty and
product Liability Claims against third parties) in proportion to their
relationship to the Purchased Assets, the Purchased Shares, the AAE Purchased
Assets or the Business and (xvii) the Retained Cash. The Purchased Assets shall
include the foregoing whether or not reflected on the Closing Balance Sheet,
except for those assets which have been transferred or disposed of in the
ordinary course of the Business after the date of September 30, 2003 and in
accordance with this Agreement. For purposes of this Agreement, "Purchased
Assets" shall not include the Purchased Shares or the AAE Purchased Assets,
which are treated separately under Section 2.1, or the Excluded Assets or AAE
Excluded Assets.'
(h) The definition of "Straddle Period" in the Purchase
Agreement shall be amended and restated in its entirety as follows:
'"STRADDLE PERIOD" shall mean any taxable year or period
beginning before and ending after the Effective Time.'
(i) The definition of "Tax Assets" in the Purchase
Agreement shall be amended and restated in its entirety as follows:
'"TAX ASSETS" shall mean any refund, abatement or credit of,
and all other assets comprising receivables or deferred assets or prepayments
for, Taxes arising or resulting from the conduct of the Business or ownership of
the Purchased Assets or Purchased Shares by the Seller, Acquired Aether Entities
or any of their respective Affiliates for taxable periods or portions thereof
ending on or before the Effective Time.'
(j) The definition of "Tax Liabilities" in the Purchase
Agreement shall be amended and restated in its entirety as follows:
'"TAX LIABILITIES" shall mean all Liabilities for Taxes
arising or resulting from the conduct of the Business or ownership of the
Purchased Assets by the Seller, any Acquired Aether Entity or any of their
respective Affiliates for taxable periods or portions thereof ending on or
before the Effective Time.'
ARTICLE III
AMENDMENTS TO ARTICLE II OF THE PURCHASE AGREEMENT
3.1 Amendments to Section 2.1 of the Purchase Agreement. Section
2.1 of the Purchase Agreement shall be amended and restated in its entirety as
follows:
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'Section 2.1. Purchase and Sale of Purchased Shares. Subject
to the terms and conditions of this Agreement, Seller shall sell, convey,
transfer, assign and deliver to TCS Ltd., and TCS Ltd. shall purchase from
Seller and accept from Seller, full legal and economic title to the Purchased
Shares, free and clear of all Encumbrances other than any restrictions on the
transferability following the Closing of the Purchased Shares imposed by
Applicable Laws. The parties further agree that (a) prior to or as of Closing,
as contemplated by Section 6.1(h), the Aether Acquired Entities shall cease to
own the AAE Excluded Assets (with the term "AAE PURCHASED ASSETS" meaning, for
purposes of this Agreement, all assets, properties and rights of the Acquired
Aether Entities other than the AAE Excluded Assets), and (b) Seller, pursuant to
the terms of this Agreement, shall remain responsible for, and shall indemnify
the Buyer Indemnitees (including TCS Ltd. and the Acquired Aether Entities) from
and against, the Liabilities of the Acquired Aether Entities that are not
Assumed Liabilities.'
ARTICLE IV
AMENDMENTS TO ARTICLE III OF THE PURCHASE AGREEMENT
4.1 Amendments to Section 3.1 of the Purchase Agreement. Section
3.1 of the Purchase Agreement shall be amended and restated in its entirety as
follows:
'(a) Subject to the Parties' satisfaction or waiver of the
conditions precedent set forth in Article VII, the closing and consummation of
the transactions contemplated by this Agreement (the "CLOSING") shall take place
on January 9, 2004 at 10:00 a.m., Eastern Time, at the offices of Xxxxxxxx &
Xxxxx LLP at 000 00xx Xxxxxx, XX, Xxxxx 0000, Xxxxxxxxxx, XX 00000 and at such
other places as the Parties may agree, or, if the conditions set forth in
Article VII have not been satisfied or waived as of such date, on such later
date that is mutually agreed between Seller and Buyer (such date being the
"CLOSING DATE").
(b) The Parties agree that for financial, accounting, and
economic purposes, the transactions contemplated by this Agreement shall be
given effect as if the Closing had occurred as of the Effective Time.
Accordingly, the Parties shall measure the Closing Net Working Capital as of the
Effective Time and shall, after the Closing and pursuant to Section 3.3A,
measure cash receipts and cash disbursements during the Interim Period and
adjust the Purchase Price as contemplated by such Section 3.3A, such that the
net cash receipts (or disbursements, as applicable) attributable to the Business
during the Interim Period shall be for the account of the Buyer, as if the Buyer
had owned and operated the Business during the Interim Period, despite the fact
that legal title to the Purchased Assets, the AAE Purchased Assets and the
Purchased Shares shall not have passed to Buyer until the Closing Date.'
4.2 Amendments to Section 3.2 of the Purchase Agreement.
(a) Section 3.2(a) of the Purchase Agreement shall be
amended and restated in its entirety as follows:
'(a) Subject to the terms and conditions set forth in this
Agreement, in addition to the assumption by Buyer of the Assumed Liabilities,
Buyer and Parent agree to pay at Closing
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to Seller in consideration for the Purchased Shares and the Purchased Assets an
aggregate purchase price equal to $20,000,000 (as adjusted based on the Closing
Net Working Capital Statement pursuant to Section 3.2(d), the "PURCHASE PRICE"),
which shall be comprised of (i) $18,000,000 in cash (the "CASH CONSIDERATION"),
in immediately available funds by wire transfer to an account designated by
Seller by written notice to Parent at least two Business Days prior to the
Closing Date, (ii) the Note, and (iii) a number of shares (rounded to the
nearest whole share) of Class A Common Stock of Parent, par value $0.01 per
share (the "PARENT COMMON STOCK"), with an aggregate Weighted Average Price
(calculated as the arithmetic average of the Weighted Average Price of the
Common Stock for the five trading days immediately prior to the Closing Date) of
$1,000,000. For purposes of this Agreement, "WEIGHTED AVERAGE PRICE" means, for
any security as of any date, the dollar volume-weighted average price for such
security on the NASDAQ National Market during the period beginning at 9:30:01
a.m., New York Time (or such other time as the NASDAQ National Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
Time (or such other time as the NASDAQ National Market publicly announces is the
official close of trading) as reported by Bloomberg Financial Markets through
its "Volume at Price" functions, or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at
9:30:01 a.m., New York Time (or such other time as such market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York
Time (or such other time as such market publicly announces is the official close
of trading) as reported by Bloomberg Financial Markets, or, if no dollar
volume-weighted average price is reported for such security by Bloomberg
Financial Markets for such hours, the average of the highest closing bid price
and the lowest closing ask price of any of the market makers for such security
as reported in the "pink sheets" by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Weighted Average Price cannot be calculated for
a security on a particular date on any of the foregoing bases, the Weighted
Average Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. All such determinations to be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation period. The number
of shares of Parent Common Stock issued to Seller in accordance with this
Section 3.2(a) shall be referred to herein as "PARENT COMMON STOCK
CONSIDERATION," and, together with the Cash Consideration and the Note, as the
"CONSIDERATION").'
(b) Section 3.2(b)(i) of the Purchase Agreement shall be
amended and restated in its entirety as follows:
'(b)(i) If Parent has complied with its obligations in
Section 6.3(e) and has properly delivered to Seller the Substitute Financing
Notice, Parent shall not be required thereafter to pay the cash portion of the
Purchase Price in cash, and the cash portion of the Purchase Price shall be
payable as contemplated by this Section 3.2(b) (but only to the extent Seller
agrees, in its discretion, to accept the Substitute Financing). Simultaneously
with delivery to Seller of the Substitute Financing Notice, Parent shall offer
to Seller the option to accept as the Purchase Price, in lieu of cash
consideration, the securities contemplated by the Private Financing (on the
terms set forth in Exhibit I, or on terms that were more favorable to the
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provider of the Private Financing to the extent they were set forth in any
Completed Financing Agreements), pro rated to reflect the difference between (A)
the aggregate amount of the Private Financing and (B) the Purchase Price (the
"SUBSTITUTE FINANCING"). Parent shall hold such offer open, and such offer shall
be irrevocable, for a period of thirty (30) days. Seller shall be entitled (but
not obligated) to accept such offer by notifying Parent of its acceptance at any
time within such 30-day period, with such acceptance being conditioned upon the
negotiation of definitive agreements that are acceptable in form and substance
to Seller (and not inconsistent with the terms of Exhibit I) and Seller's
completion of, and satisfaction in all respects with, its due diligence
investigation of the Buyer. Parent shall thereafter use its reasonable best
efforts to negotiate with Seller and execute, as promptly as practicable,
definitive agreements for the Substitute Financing; provided, that Parent shall,
if requested by Seller (at Seller's sole and absolute discretion), enter into
definitive agreements with Seller for the Substitute Financing having the same
substantive terms as those contained in the Completed Financing Agreements.'
(c) Section 3.2(d) of the Purchase Agreement shall be
amended and restated in its entirety as follows:
'(d) As soon as practicable (and in any event within forty
(40) days following the Closing), Seller shall prepare and deliver to Parent and
its counsel the Audited Financial Statements, the Closing Balance Sheet, a
statement (the "CLOSING NET WORKING CAPITAL STATEMENT") setting forth Net
Working Capital as of the close of business on the day immediately preceding the
Effective Time (the "CLOSING NET WORKING CAPITAL") based on the Closing Balance
Sheet, and all work papers and back-up materials relating thereto. The costs and
expenses of preparing the Closing Balance Sheet and the Audited Financial
Statements shall be borne 50% by Seller and 50% by Parent. Each of Parent and
Buyer shall assist Seller and its Representatives in the preparation of the
Closing Balance Sheet and shall provide Seller and its Representatives access at
all reasonable times to the personnel, properties, Books and Records of the
Business, including the Acquired Aether Entities, for such purpose. No changes
shall be made in any reserve or other account existing as of the date of the
Closing Balance Sheet except as (i) a result of events occurring after the date
of the Closing Balance Sheet and, in such event, only in a manner consistent
with past practices and (ii) as required by GAAP. The Closing Balance Sheet and
the Closing Net Working Capital Statement shall be conclusive and binding on the
Parties unless Parent gives written notice of any objections thereto setting
forth in reasonable detail the amounts in dispute and the basis for such
disagreement (a "PURCHASE PRICE OBJECTION NOTICE") to Seller within thirty (30)
days after its receipt of the Audited Financial Statements, Closing Balance
Sheet, Closing Net Working Capital Statement and all work papers and back-up
materials relating thereto. If Parent delivers a Purchase Price Objection Notice
as provided above, the Parties shall attempt in good faith to resolve such
dispute, and any resolution by them as to any disputed amounts shall be final,
binding and conclusive on the Parties. If the Parties are unable to resolve,
despite good faith negotiations, all disputes reflected in the Purchase Price
Objection Notice within thirty (30) days thereafter (the "PURCHASE PRICE
RESOLUTION PERIOD"), then the Parties will, within thirty (30) days after the
expiration of the Purchase Price Resolution Period, submit any such unresolved
dispute to an independent accounting firm mutually acceptable to Parent and
Seller (the "INDEPENDENT ACCOUNTING FIRM"). Parent and Seller shall provide to
the independent accounting firm all work papers and back-up materials relating
to the unresolved disputes requested by the
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Independent Accounting Firm to the extent available to Parent or its
Representatives or Seller or its Representatives. Parent and Seller shall be
afforded the opportunity to present to the Independent Accounting Firm any
material related to the unresolved disputes and to discuss the issues with the
Independent Accounting Firm. The determination by the Independent Accounting
Firm, as set forth in a notice to be delivered to Parent and Seller within
thirty (30) days after the submission of the unresolved disputes to the
Independent Accounting Firm, shall be final, binding and conclusive on the
parties. The fees and expenses of the Independent Accounting Firm shall be borne
by Parent and Seller in inverse proportion as they may prevail on matters
resolved by the Independent Accounting Firm, which proportionate allocations
shall also be determined by the Independent Accounting Firm at the time the
determination of the Independent Accounting Firm is rendered on the merits of
the matters submitted. The Closing Net Working Capital reflected in the Closing
Net Working Capital Statement, as revised to reflect the resolution of any and
all disputes by the parties and/or the Independent Accounting Firm, shall be
deemed to be the Closing Net Working Capital. The "ADJUSTMENT AMOUNT" (which may
be a positive or negative number) shall equal the amount determined by
subtracting $3,750,020 (the "INITIAL NET WORKING CAPITAL") from the Closing Net
Working Capital. Subject to the last sentence of this Section 3.2(d), if the
Adjustment Amount is positive, the Adjustment Amount shall be paid by Parent via
wire transfer of immediately available funds to the bank account designated by
Seller. If the Adjustment Amount is negative, the Adjustment Amount shall be
paid by Seller via wire transfer of immediately available funds to the bank
account designated by Parent. All payments shall be made together with interest
at the rate of 6% per annum, which interest shall begin accruing at the
Effective Time and end on the date that the payment is made. Within five
Business Days after the calculation of the Closing Net Working Capital becomes
binding and conclusive on the parties, Seller or Parent, as the case may be,
shall make the wire transfer payment provided for in this Section 3.2(d).
Notwithstanding the foregoing, neither the Seller nor the Parent, as the case
may be, shall have any liability to pay any Adjustment Amount to the other
unless the aggregate Adjustment Amount due by the Seller or the Parent, as the
case may be, exceeds $750,000 (the "ADJUSTMENT FLOOR").'
4.3 Amendments to Section 3.3 of the Purchase Agreement. Section
3.3 of the Purchase Agreement shall be amended and restated in its entirety and
shall read as follows:
'Section 3.3 Cash Balance Adjustment. As soon as practicable (and in
any event within thirty (30) days following the Closing), Parent shall prepare
and deliver to Seller and its counsel a statement (the "CASH BALANCE STATEMENT")
setting forth the balance of all cash held in all bank accounts of the Acquired
Aether Entities as of the close of business on the day immediately preceding the
Effective Time (the "CLOSING CASH BALANCE") and any supporting documentation
relevant thereto, including without limitation relevant bank statements. The
costs and expenses of preparing the Cash Balance Statement shall be borne by
Parent. The Cash Balance Statement shall be conclusive and binding on the
Parties unless Seller gives written notice of any objections thereto setting
forth in reasonable detail the amounts in dispute and the basis for such
disagreement (a "CASH BALANCE OBJECTION NOTICE") to Seller within thirty (30)
days after its receipt of the Cash Balance Statement and all supporting
documentation relating thereto. If Seller delivers a Cash Balance Objection
Notice as provided above, Parent and Seller shall attempt in good faith to
resolve such dispute, and any resolution by them as to any disputed amounts
shall be final,
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binding and conclusive. If Parent and Seller are unable to resolve, despite good
faith negotiations, all disputes reflected in the Cash Balance Objection Notice
within thirty (30) days thereafter (the "CASH BALANCE RESOLUTION PERIOD"), then
Parent and Seller will, within thirty (30) days after the expiration of the Cash
Balance Resolution Period, submit any such unresolved dispute to an Independent
Accounting Firm. Parent and Seller shall provide to the Independent Accounting
Firm all supporting documentation relating to the unresolved disputes requested
by the Independent Accounting Firm to the extent available to Parent or its
Representatives or Seller or its Representatives. Parent and Seller shall be
afforded the opportunity to present to the Independent Accounting Firm any
material related to the unresolved disputes and to discuss the issues with the
Independent Accounting Firm. The determination by the Independent Accounting
Firm, as set forth in a notice to be delivered to Parent and Seller within
thirty (30) days after the submission of the unresolved disputes to the
Independent Accounting Firm, shall be final, binding and conclusive on the
Parties. The fees and expenses of the Independent Accounting Firm shall be borne
by Parent and Seller in inverse proportion as they may prevail on matters
resolved by the Independent Accounting Firm, which proportionate allocations
shall also be determined by the Independent Accounting Firm at the time the
determination of the Independent Accounting Firm is rendered on the merits of
the matters submitted. The Closing Cash Balance reflected in the Cash Balance
Statement, as revised to reflect the resolution of any and all disputes by
Parent and Seller and/or the Independent Accounting Firm, shall be deemed to be
the Closing Cash Balance. The "CASH BALANCE ADJUSTMENT AMOUNT" (which may be a
positive or negative number) shall equal the amount determined by subtracting
$1,000,000 from the Closing Cash Balance. Within five Business Days after the
calculation of the Closing Cash Balance becomes binding and conclusive, if the
Cash Balance Adjustment Amount is positive, Parent shall pay Seller the lesser
of $150,000 and the Cash Balance Adjustment Amount via wire transfer of
immediately available funds to the bank account designated by Seller. If the
Cash Balance Adjustment Amount is negative, Seller shall surrender to Parent a
number of shares (rounded to the nearest whole share) of Parent Common Stock
equal to the Cash Balance Adjustment Amount divided by the Fair Market Value of
each share of Parent Common Stock.'
4.4 New Section 3.3A of the Purchase Agreement. A new Section 3.3A
shall be added to the Purchase Agreement immediately after Section 3.3 and
immediately prior to Section 3.4 and shall read as follows:
'Section 3.3A Effective Time Adjustment.
(a) As soon as practicable (and in any event within forty
(40) days following the Closing), Seller shall prepare and deliver to Parent and
its counsel a statement (the "EFFECTIVE TIME STATEMENT") setting forth all of
the cash received by the Business during the Interim Period (collectively, the
"EFFECTIVE TIME CASH") and all cash payments made by Seller or its Affiliates
with respect to the Business during the Interim Period, including without
limitation payments made with respect to obligations of the Buyer under Section
6.2(b) (collectively, the "EFFECTIVE TIME PAYMENTS"). The "EFFECTIVE TIME
ADJUSTMENT AMOUNT" (which may be a positive or negative number) shall equal the
amount determined by subtracting the Effective Time Payments from the Effective
Time Cash. Within five Business Days after the calculation of the Effective Time
Statement becomes binding and conclusive (pursuant to Section 3.3A(b)), if the
Effective Time Adjustment Amount is positive, Seller shall pay Parent such
positive amount via wire
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transfer of immediately available funds to the bank account designated by
Parent. If the Effective Time Adjustment Amount is negative, Buyer shall pay
Seller such amount via wire transfer of immediately available funds to the bank
account designated by Seller.
(b) The costs and expenses of preparing the Effective Time
Statement shall be borne 50% by Seller and 50% by Parent. The Effective Time
Statement shall be conclusive and binding on the Parties unless Parent gives
written notice of any objections thereto setting forth in reasonable detail the
amounts in dispute and the basis for such disagreement (an "EFFECTIVE TIME
STATEMENT OBJECTION NOTICE") to Seller within thirty (30) days after its receipt
of the Effective Time Statement and all supporting documentation relating
thereto. If Seller delivers an Effective Time Statement Objection Notice as
provided above, Parent and Seller shall attempt in good faith to resolve such
dispute, and any resolution by them as to any disputed amounts shall be final,
binding and conclusive. If Parent and Seller are unable to resolve, despite good
faith negotiations, all disputes reflected in the Effective Time Statement
Objection Notice within thirty (30) days thereafter (the "EFFECTIVE TIME
STATEMENT RESOLUTION PERIOD"), then Parent and Seller will, within thirty (30)
days after the expiration of the Effective Time Statement Resolution Period,
submit any such unresolved dispute to an Independent Accounting Firm. Parent and
Seller shall provide to the Independent Accounting Firm all supporting
documentation relating to the unresolved disputes requested by the Independent
Accounting Firm to the extent available to Parent or its Representatives or
Seller or its Representatives. Parent and Seller shall be afforded the
opportunity to present to the Independent Accounting Firm any material related
to the unresolved disputes and to discuss the issues with the Independent
Accounting Firm. The determination by the Independent Accounting Firm, as set
forth in a notice to be delivered to Parent and Seller within thirty (30) days
after the submission of the unresolved disputes to the Independent Accounting
Firm, shall be final, binding and conclusive on the Parties. The fees and
expenses of the Independent Accounting Firm shall be borne by Parent and Seller
in inverse proportion as they may prevail on matters resolved by the Independent
Accounting Firm, which proportionate allocations shall also be determined by the
Independent Accounting Firm at the time the determination of the Independent
Accounting Firm is rendered on the merits of the matters submitted. The Closing
Cash Balance reflected in the Cash Balance Statement, as revised to reflect the
resolution of any and all disputes by Parent and Seller and/or the Independent
Accounting Firm, shall be deemed to be the Closing Cash Balance.
(c) Calculations made under this Section 3.3A shall be separate
and distinct from the calculations made under Section 3.2(d) and shall exclude
payments made by Seller to Research in Motion Limited, as contemplated by that
certain letter agreement dated as of even date herewith. Adjustments made under
Section 3.2(d) and payments made pursuant to such letter agreement shall not be
taken into account when making determinations under this Section 3.3A, and
adjustments made under this Section 3.3A shall not be taken into account when
making determinations under Section 3.2(d).'
11
4.5 Amendments to Section 3.4 of the Purchase Agreement.
(a) Clause (a) of Section 3.4 of the Purchase Agreement
shall be amended and restated in its entirety as follows:
'(a) certificates representing the Parent Common Stock
Consideration (in such denominations as Seller shall reasonably request at least
one Business Day prior to the Closing Date) duly executed on behalf of the
Parent and registered in the name of Seller or its designee;'
(b) Clause (b) of Section 3.4 shall be amended and
restated in its entirety as follows:
'(b) the Cash Consideration;'
(c) Clauses (f) and (g) shall added after clause (e) of
Section 3.4 and will read as follows:
'(f) the Registration Rights Agreement in substantially
the form attached hereto as Exhibit N (the "REGISTRATION RIGHTS AGREEMENT"),
duly executed by Parent; and
(g) the Note in substantially the form attached hereto as
Exhibit O, duly executed by Parent.'
4.6 Amendments to Section 3.5 of the Purchase Agreement. Section
3.5 of the Purchase Agreement and shall be amended and restated in its entirety
as follows:
'Section 3.5 Deliveries by Seller. At the Closing, Seller shall
deliver, or cause to be delivered by its Affiliates, to Buyer the following:
(a) a duly executed notarial deed of transfer in respect
of the Purchased Shares in the form attached as Exhibit G and an extract from
Aether European Holdings' Shareholders Register, duly certified by a director of
that company, recording the transfer of the Purchased Shares from Buyer to
Seller;
(b) the certificate by officers of Seller required to be
delivered pursuant to Section 7.3(c);
(c) the Trademark License Agreement, the Transition
Services Agreement, the Deal License Agreement, the Patent Assignment, the
Trademark Assignment, the Copyright Assignment, the Domain Name Assignment, the
Sublease, the Assignment and Assumption Agreement and Xxxx of Sale and any other
Ancillary Agreements, each duly executed by Seller;
(d) such other deeds, bills of sale, endorsements,
assignments, affidavits and other instruments of sale, assignment, conveyance
and transfer, in form and substance reasonably satisfactory to Buyer and Seller,
as are required to effectively vest in Buyer all of Seller's right, title and
interest in and to all of the Purchased Assets, the Purchased Shares, in each
case free and clear of any and all Encumbrances, except for the Permitted
Encumbrances;
12
(e) Net Working Capital Certificate;
(f) True, correct and complete copies of all required
consents of Governmental Authorities set forth on Schedule 4.6, and all Required
Consents;
(g) Certificates of good standing from the Secretary of
the State of Delaware, dated as of a recent date, certifying that Seller is in
good standing in the State of Delaware;
(h) Valid and effective assignment documentation, in form
and substance reasonably acceptable to Buyer, of any rights to the Intellectual
Property that are included in the Purchased Assets and the AAE Purchased Assets;
(i) Such documents as are required under Applicable Law
to effect the resignation of Xxxx Xxxxxxx as a director of the Acquired Aether
Entities;
(j) Such other documents and instruments as may be
reasonably requested by Buyer to consummate the transactions contemplated herein
and to carry out the obligations of the parties hereunder;
(k) Consent to the assignment of the U.S. Lease; and
(l) the Registration Rights Agreement, duly executed by
Seller.'
ARTICLE V
AMENDMENTS TO ARTICLE iV OF THE PURCHASE AGREEMENT
5.1 Amendments to Section 4.18 of the Purchase Agreement. Section
4.18 of the Purchase Agreement shall be amended and restated in its entirety and
shall read as follows:
'Section 4.18 Undisclosed Liabilities. Except as described on
Schedule 4.18, there are no Liabilities of Seller or any of the Acquired Aether
Entities that constitute Assumed Liabilities other than (a) Liabilities
reflected on the September 30 Net Working Capital Statement, (b) Liabilities
that have arisen since September 30, 2003, for trade or business obligations
incurred in connection with the purchase of goods or services in the ordinary
course of the Business and consistent with past practice, (c) obligations of
continued performance under the Assigned Contracts and the Permits, (d) the line
item "deferred revenue" as set forth on the September 30 Net Working Capital
Statement and "deferred revenue" since September 30, 2003 booked in the ordinary
course of the Business, consistent with past practices, (e) as of the Effective
Time, Liabilities reflected on the Closing Net Working Capital Statement and (f)
Liabilities that have arisen during the Interim Period. As of the Closing Date,
all promissory notes issued by Aether Systems Limited have been duly and fully
repaid or released. All loans made to Acquired Aether Entities by IFX Infoforex
Deutschland GmbH have been duly and fully repaid or released.
13
5.2 Amendments to Section 4.22 of the Purchase Agreement. Section
4.22 of the Purchase Agreement shall be amended and restated in its entirety and
shall read as follows:
'Section 4.22 Filings with the SEC. None of the Public Reports, as of
its filing date (except to the extent that a subsequent filing amended
information previously filed), contained with respect to the Purchased Assets,
the AAE Purchased Assets, the Assumed Liabilities, the Purchased Shares, the
Acquired Aether Entities or the Business any untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.'
5.3 Amendments to Section 4.29 of the Purchase Agreement. Section
4.29 of the Purchase Agreement shall be amended and restated in its entirety and
shall read as follows:
'Section 4.29 Investment. Seller (a) understands that the Parent Common
Stock has not been registered under the Securities Act, or under any state
securities laws, and is being issued to Seller in reliance upon federal and
state exemptions for transactions not involving any public offering, (b) will
hold the Parent Common Stock solely for its own account for investment purposes,
and not with a view toward the distribution thereof, and (c) is an Accredited
Investor.'
ARTICLE VI
AMENDMENTS TO ARTICLE V OF THE PURCHASE AGREEMENT
6.1 Amendments to Article V of the Purchase Agreement. Article V
of the Purchase Agreement shall be amended and restated in its entirety as
follows:
'ARTICLE V
BUYER'S AND PARENT'S REPRESENTATIONS AND WARRANTIES
TSYS and TCS Ltd., jointly and severally, and Parent represent and
warrant to the Seller as follows, except as set forth on the Buyer's Disclosure
Schedule (which is arranged in sections corresponding to the Sections contained
in this Article V and as to which the disclosure in any section of the Buyer
Disclosure Schedule qualifies only the corresponding Section, unless it is
reasonably apparent that the disclosure in any section or subsection of the
Buyer Disclosure Schedule should apply to one or more other Sections):
14
Section 5.1. Organization and Good Standing. Each of TSYS, TCS Ltd. and
Parent is duly organized, validly existing and in good standing under the laws
of the state or country of its incorporation and has all requisite power and
authority to own, lease and operate its properties and to operate its business.
Each of TSYS, TCS Ltd. and Parent is duly qualified in each jurisdiction in
which the ownership of property or the conduct of its business requires such
qualification, except where the failure to do so would not, individually or in
the aggregate, have a material adverse effect on the business, operations or
financial condition of the TSYS, TCS Ltd. or Parent that adversely affects
TSYS's, TCS Ltd.'s or the Parent's ability to consummate the transactions
contemplated by this Agreement.
Section 5.2. Corporate Authorization. Each of TSYS, TCS Ltd. and Parent
has full power and authority to execute and deliver this Agreement and each
Ancillary Agreement to which it is a party, to perform its obligations under
this Agreement and each Ancillary Agreement to which it is a party and to
consummate the transactions contemplated hereby and thereby on the terms set
forth herein and therein. Each of this Agreement, the Deal License Agreement and
the Transition Services Agreement has been duly executed and delivered by TSYS,
TCS Ltd. and Parent and, assuming the due execution of such agreement by Seller,
is a valid and binding obligation of TSYS, TCS Ltd. and Parent, enforceable
against TSYS, TCS Ltd. and Parent in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, receivership and
similar laws affecting the enforcement of creditors' rights generally, and
general equitable principles.
Section 5.3. No Breach. The execution, delivery and performance by
TSYS, TCS Ltd. and Parent of this Agreement and the Ancillary Agreements to
which it is a party, and the consummation by TSYS, TCS Ltd. and Parent of the
transactions contemplated hereby and thereby, do not and will not (a) contravene
or conflict with the Charter Documents of TSYS, TCS Ltd. or Parent or (b)
violate any order, injunction, judgment, decree or award, federal, state, local
or foreign law, ordinance, statute, rule or regulation to which TSYS, TCS Ltd.
or Parent is subject or by which TSYS, TCS Ltd. or Parent or its properties may
be bound, except where such violations, conflicts, breaches or defaults would
not, individually or in the aggregate, have a material adverse effect on the
business, operations or financial condition of TSYS or TCS Ltd. that adversely
affects TSYS's, TCS Ltd.'s or Parent's ability to consummate the transactions
contemplated by this Agreement.
Section 5.4. Availability of Funds. Each of TSYS and TCS Ltd. has
sufficient cash available to enable it to consummate the transactions
contemplated by this Agreement and consistent with the provisions of this
Agreement and to satisfy the Assumed Liabilities as they become due in the
ordinary course of the Business.
Section 5.5. No Other Representations. Each of TSYS, TCS Ltd. and
Parent acknowledge that Seller makes no representation or warranty with respect
to (a) any projections, estimates or budgets delivered to or made available to
TSYS, TCS Ltd. and Parent of future revenues, future results of operations (or
any component thereof), future cash flows or future financial condition (or any
component thereof) of the Business, the Acquired Aether Entities or the
Purchased Assets or the future business and future operations thereof or (b)
except for
15
Section 4.17(a), the CIM or any other information or documents made available to
each of TSYS, TCS Ltd. and Parent or its counsel, accountants or advisors with
respect to the Business, the Acquired Aether Entities or the Purchased Assets or
the businesses or operations thereof.
Section 5.6. Broker's Fees. Neither TSYS, TCS Ltd. nor Parent has any
Liability or obligation to pay any fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this Agreement, except
for Xxxxxxxx, Xxxxxxxx & Xxxxxx, Inc., whose fees and expenses will be paid by
Buyer.
Section 5.7. Private Financing. Parent, 033 Asset Management, LLC and
The Riverview Group LLC have executed the term sheets attached to this Agreement
as Exhibit I. Seller has received true and complete copies of the Completed
Financing Agreements. The Completed Financing Agreements were duly authorized,
executed and delivered by Parent and executed and delivered by the investors
party thereto.
Section 5.8. SEC Documents. (a) Parent has filed all reports,
schedules, forms, statements and other documents required to be filed by Parent
with the SEC since January 1, 2003 (the "PARENT SEC DOCUMENTS").
(b) As of its respective date, each Parent SEC Document complied
in all material respects with the requirements of the Exchange Act or the
Securities Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Parent SEC Document, and did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except to the extent corrected or amended by subsequently filed
Parent SEC Documents prior to the date of this Agreement. The consolidated
financial statements of Buyer included in the Parent SEC Documents comply as to
form in all material respects, as of their respective dates, with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except, in the case
of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of Parent
and its consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods shown (subject, in
the case of unaudited statements, to normal year-end audit adjustments).
Section 5.9. Capitalization; Issuance of Securities. The Parent Common
Stock to be delivered to Seller at the Closing shall have been duly authorized
and, upon issuance in accordance with the terms of this Agreement, will be
validly issued, fully paid and nonassessable. As of December 18, 2003, Buyer's
authorized capital stock consists solely of 225,000,000 shares of Class A Common
Stock, $0.01 par value per share, of which 21,900,732 shares are issued and
outstanding as of the date hereof, and 75,000,000 shares of Class B Common
Stock, par value $0.01 per share, of which 9,507,988 shares are issued and
outstanding as of the date hereof. Except as set forth on Schedule 5.9, there
are no outstanding (a) securities convertible into or exchangeable for capital
stock of Parent; (b) options, warrants or other rights
16
to purchase or subscribe capital stock of Parent other than employee stock
options granted by Parent; or (c) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance of any
capital stock of Parent, any such convertible or exchangeable securities or any
such options, warrants or rights. The issuance of the Parent Common Stock to
Seller is exempt from registration under the Securities Act of 1933.
Section 5.10 Claims and Proceedings. Except as set forth on Schedule
5.10, (i) there is no outstanding order of any Governmental Authority against or
involving TSYS, TCS Ltd. or Parent any subsidiary of Parent or any of their
respective Affiliates that could defeat, defer or negatively impact the
consummation of the transactions contemplated by this Agreement, and (ii) there
is no Claim pending, or, to the knowledge of TSYS, TCS Ltd. or Parent,
threatened against TSYS, TCS Ltd. or Parent, involving this Agreement or the
transactions contemplated hereby.
Section 5.11. Securities Act. The Purchased Shares purchased by TCS
Ltd. pursuant to this Agreement are being acquired for investment only and not
with a view to any public distribution thereof, and the TCS Ltd. shall not offer
to sell or otherwise dispose of the Purchased Shares so acquired by it in
violation of Applicable Law
Section 5.12 Absence of Certain Changes; No Material Adverse Effect.
Since September 30, 2003 Parent's business has been conducted in the ordinary
course consistent with past practice and there has not been any event,
occurrence or development which has had a material adverse effect on the
business, operations or financial condition of Parent and its consolidated
subsidiaries, taken as a whole.'
ARTICLE VII
AMENDMENT TO SECTION VI OF THE PURCHASE AGREEMENT
7.1 Amendments to Section 6.1 of the Purchase Agreement.
(a) A new paragraph shall be added immediately after
clause (ix) of Section 6.1(b) and shall read as follows:
'Notwithstanding the clause (iv) of this Section 6.1(b),
Seller, Parent TSYS and TSYS Ltd. agree that management of the Acquired Aether
Entities may proceed with consideration of, and if warranted after compliance
with Applicable Law, notification of redundancy or other termination of up to
three employees of the Acquired Aether Entities as may be selected by management
of the Acquired Aether Entities in agreement with Seller, notwithstanding such
employees being listed on Schedule 4.21(a) by Seller. All statutory and
contractual severance payments to be made to such employees after the Closing in
compliance with Applicable Law shall constitute Excluded Liabilities.'
17
(b) Section 6.1(f) of the Purchase Agreement shall be
amended and restated in its entirety as follows:
'(f) Confidentiality. Seller and its Affiliates will hold,
and will use their reasonable best efforts to cause their respective
Representatives to hold, in confidence, unless compelled to disclose by judicial
or administrative process or by other requirements of Applicable Law, all
confidential documents and information concerning Buyer or any of its Affiliates
(whether or not related specifically to the Business) that are furnished to
Seller or its Affiliates, except to the extent that such information can be
shown to have been (i) previously known on a nonconfidential basis by Seller,
(ii) in the public domain through no fault of Seller or (iii) later lawfully
acquired by Seller from sources other than Buyer or any of its subsidiaries or
any other Person not under a non-disclosure or confidentiality obligation in
favor of Buyer or any of its subsidiaries; provided that Seller may disclose
such information to its Representatives who need to know such information for
purposes of participating in the evaluation, negotiation and/or execution of the
transactions contemplated by this Agreement and the Ancillary Agreements so long
as such Persons are informed by Seller of the confidential nature of such
information and are directed by Seller to treat such information confidentially.
Seller shall be responsible for any failure to treat such information
confidentially by such Persons. If this Agreement is terminated, Seller and its
Affiliates will, and will use their reasonable best efforts to cause their
respective Representatives to, destroy or deliver to Buyer, upon request, all
documents and other materials, and all copies thereof, obtained by Seller or its
Affiliates or on their behalf from Buyer or any of its subsidiaries in
connection with this Agreement that are subject to such confidence.
Notwithstanding the foregoing, effective upon, and only upon, the Closing,
Seller's obligations under this Section 6.1(f) shall terminate with respect to
the Purchased Assets, the AAE Purchased Assets, the Assumed Liabilities, the
Purchased Shares and the Business.'
(c) A new Section 6.1(l) shall be added immediately after
Section 6.1(m) of the Purchase Agreement and shall read as follows:
'(l) As soon as practicable after the Closing Date, Seller
shall deliver, or cause to be delivered by its Affiliates, to Buyer certified
copies of extracts of the trade register of the Acquired Aether Entities, where
applicable, dated as of the Closing.'
7.2 Amendments to Section 6.2 of the Purchase Agreement. Section
6.2 of the Purchase Agreement shall be amended and restated in its entirety as
follows:
'6.2 Covenant of Buyer and Parent. Each of TSYS and TCS Ltd.,
jointly and severally, and Parent covenants and agrees as follows:
(a) Confidentiality. TSYS, TCS Ltd. and Parent and their
Affiliates will hold, and will use their reasonable best efforts to cause their
respective Representatives to hold, in confidence, unless compelled to disclose
by judicial or administrative process or by other requirements of law, all
confidential documents and information concerning Seller or any of its
Affiliates (whether or not related specifically to the Business) that are
furnished to TSYS, TCS Ltd., Parent or any of their Affiliates, except to the
extent that such information can be shown to
18
have been (i) previously known on a nonconfidential basis by TSYS, TCS Ltd. or
Parent, (ii) in the public domain through no fault of TSYS, TCS Ltd. or Parent
or (iii) later lawfully acquired by TSYS, TCS Ltd. or Parent from sources other
than Seller or any of its subsidiaries or any other Person not under a
non-disclosure or confidentiality obligation in favor of Seller or any of its
subsidiaries; provided that TSYS, TCS Ltd. or Parent may disclose such
information to their Representatives who need to know such information for
purposes of participating in the evaluation, negotiation and/or execution of the
transactions contemplated by this Agreement and the Ancillary Agreements so long
as such Persons are informed by TSYS, TCS Ltd. or Parent of the confidential
nature of such information and are directed by TSYS, TCS Ltd. or Parent to treat
such information confidentially. TSYS, TCS Ltd. and Parent shall be jointly and
severally responsible for any failure to treat such information confidentially
by such Persons. If this Agreement is terminated, TSYS, TCS Ltd., Parent and
their Affiliates will, and will use their reasonable best efforts to cause their
respective Representatives to, destroy or deliver to Seller, upon request, all
documents and other materials, and all copies thereof, obtained by TSYS, TCS
Ltd., Parent or their Affiliates or on their behalf from Seller or any of its
subsidiaries in connection with this Agreement that are subject to such
confidence. Notwithstanding the foregoing, effective upon, and only upon, the
Closing, TSYS's, TCS Ltd's. or Parent's obligations under this Section 6.2(a)
shall terminate with respect to the Purchased Assets, the AAE Purchased Assets,
the Purchased Shares, the Assumed Liabilities, the Excluded Liabilities and the
Business.
(b) Employment, Employees and Employment Benefit Plans.
(i) Effective as of the Closing Date, TSYS shall
have offered employment to all Persons who are employees of the Business on the
day immediately prior to the Closing Date and who are listed on Schedule 4.21(a)
(including employees who are on an approved leave of absence, short-term
disability leave or military leave, but not including any individual on
long-term disability leave) with titles and job descriptions similar to those
applicable to such employees immediately prior to the Closing Date. Employees
who accept such offer of employment are referred to herein as "TRANSFERRED
EMPLOYEES." Except as otherwise provided herein or in the Transition Services
Agreement, effective as of the Closing Date the Transferred Employees will cease
to participate in, or accrue any benefits under, Seller's Employee Benefit Plans
with respect to the Transferred Employees. In addition, any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) maintained by TSYS or Parent
shall provide coverage for any pre-existing health condition of any Transferred
Employee (and any eligible dependents or beneficiaries thereof), but only to the
extent covered under an Employee Benefit Plan as in effect as of the date of
this Agreement. Notwithstanding the foregoing, the Employees of the Acquired
Aether Entities shall remain employees of the Acquired Aether Entities after the
Closing.
(ii) Effective as of the Closing Date, TSYS will
be responsible only for the obligations and associated Liabilities that arise
pursuant to the continuation coverage requirements of COBRA as a result of
"qualifying events," as defined in COBRA, that occur with respect to Transferred
Employees after the Closing Date.
19
(c) Credit Support.
(i) TSYS shall (x) replace all credit support
arrangements provided by Seller or any of its Affiliates (excluding the Acquired
Aether Entities), including any indemnity, guarantee, surety bond, letter of
credit, cash or other collateral or escrow account in respect of the Business,
the Purchased Assets or the Assumed Liabilities as set forth on Schedule 6.2(c)
(the "CREDIT SUPPORT AGREEMENTS"); (y) release, or cause to be released, Seller
and its Affiliates (excluding the Acquired Aether Entities) from any Liability
or obligation to provide credit support in respect of the Business following the
Closing; and (z) return, or cause to be returned, to Seller or its Affiliates
(excluding the Acquired Aether Entities), as appropriate, all collateral that
was provided by Seller or its Affiliates (excluding the Acquired Aether
Entities) pursuant to a Credit Support Arrangement, in each case on or before
the Closing.
(ii) After the Closing, neither Seller nor any of
its Affiliates (excluding the Acquired Aether Entities) shall have any
obligation to provide any credit support in respect of the Business, the
Purchased Assets or the Assumed Liabilities.'
(d) Financing. (i) Parent shall use its reasonable best
efforts to complete the Private Financing (and receive the proceeds from such
Private Financing) as promptly as practicable. Parent shall promptly notify
Seller upon the funding of the Private Financing. If Parent is unable to
complete the Private Financing by January 31, 2004, it shall promptly notify
Seller of such fact (such notice, the "SUBSTITUTE FINANCING NOTICE").
7.3 Amendments to Section 6.3 of the Purchase Agreement.
(a) The lead-in to Section 6.3 of the Purchase Agreement
shall be amended and restated in its entirety as follows:
'Section 6.3. Mutual Covenants. TSYS and TCS Ltd., jointly and
severally, Parent and Seller covenant and agree as follows:'
(b) Section 6.3(h) of the Purchase Agreement shall be
amended and restated in its entirety as follows:
'(h) Post-Closing Tax Matters.
(i) Seller will be responsible for the preparation and
filing of all Tax Returns for all periods ending on or prior to the Effective
Time as to which Tax Returns are due after the Effective Time (including the
consolidated, unitary, and combined Tax Returns for Seller which include the
operations of the Business for any period ending on or before the Effective
Time). Seller will make all payments required with respect to any such Tax
Return; provided, however, that Buyer will indemnify Seller pursuant to Article
IX for any such Taxes that are Assumed Liabilities. For the avoidance of doubt,
this Section 6.3(h)(i) shall not apply to Aether European Holdings and other
Acquired Aether Entities.
20
(ii) Buyer will be responsible for the preparation and
filing of all Tax Returns for the Business for all periods ending after the
Effective Time as to which Tax Returns are due after the Effective Time
including Tax Returns for the Straddle Period. Buyer shall permit Seller to
review and comment on each such Tax Return described in the preceding sentence
prior to filing. Buyer will make all payments required with respect to any such
Tax Return; provided, however, that Seller will indemnify the Buyer to the
extent any payment the Buyer is making is a Tax attributable to a taxable period
ending on or before the Effective Time based on the principles in Section
9.1(c), except to the extent that such Taxes are Assumed Liabilities. For the
avoidance of doubt, this Section 6.3(h)(ii) shall not apply to Aether European
Holdings and other Acquired Aether Entities:
(iii) With respect to Aether European Holdings and all
other Acquired Aether Entities:
(A) Seller will be responsible for the preparation and
filing of all Tax Returns for all periods ending on or prior to the Effective
Time as to which Tax Returns are due after the Effective Time. Seller will make
all payments required with respect to any such Tax Return.
(B) Buyer will be responsible for the preparation and
filing of all Tax Returns for all periods ending after the Effective Time as to
which Tax Returns are due after the Effective Time including Tax Returns for the
Straddle Period. Buyer shall permit Seller to review and comment on each such
Tax Return described in the preceding sentence prior to filing. Buyer will make
all payments required with respect to any such Tax Return and Seller shall not
be liable for any Taxes with respect to such Tax Returns, except as otherwise
provided in Article IX.
(C) Except to the extent required by Applicable Laws,
Buyer shall not permit Aether European Holdings and any other Acquired Aether
Entity to take any action after the Effective Time which could increase the
Seller's Liability for Taxes (including any Liability of the Seller to indemnify
the Buyer for Taxes pursuant to this Agreement).
(D) Except to the extent required by Applicable Laws,
Buyer shall not, without prior written consent of the Seller, amend any Tax
Return filed by, or with respect to, Aether European Holdings and any other
Acquired Aether Entity for any taxable period, or portion thereof, beginning
before the Effective Time.
(iv) This Section 6.3(h)(iv) shall apply to both the
Purchased Assets and to Aether European Holdings and other Acquired Aether
Entities. Each Party shall, at its own expense, control any tax audit or
examination by any Governmental Authority, and have the right to initiate any
claim for refund or amended return, and contest, resolve and defend against any
assessment, notice of deficiency or other adjustment or proposed adjustment of
Taxes ("PROCEEDINGS") for any taxable period for which that Party is charged
with payment or indemnification responsibility under Article IX. Each Party
shall promptly forward to the other Party all written notifications and other
written communications, including (if available) the original envelope showing
any postmark, from any Governmental Authority received by such Party relating to
any Liability for Taxes for any taxable period for which such other Party is
21
charged with payment or indemnification responsibility under Article IX. Each
Indemnifying Party shall promptly notify, and consult with, each Indemnified
Party as to any action it proposes to take with respect to any Liability for
Taxes for which it is required to indemnify the Indemnified Party. The
Indemnified Party shall not enter into any closing agreement or final settlement
with any Governmental Authority with respect to any such Tax Liability without
the written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld. In the case of any proceedings relating to any Straddle
Period, the Parties shall jointly control such proceedings and shall cooperate
with each other as to the conduct of such proceedings. Each Party shall, at the
expense of the requesting Party, execute or cause to be executed any powers of
attorney or other documents reasonably requested by such requesting Party to
enable it to take any and all actions such Party reasonably requests with
respect to any proceedings which the requesting Party controls. The failure by a
Party to provide timely notice under this subsection shall relieve the other
Party from its indemnification obligations with respect to the subject matter of
any notification not timely forwarded, to the extent the other Party has
suffered a loss or other economic detriment because of such failure to provide
notification in a timely fashion.'
(c) Section 6.3(j) of the Purchase Agreement shall be
amended and restated in its entirety as follows:
'(j) Post Closing Accounts Receivable. After the
Closing Date and continuing for a period of eighteen (18) months thereafter,
Buyer shall in accordance with commercially reasonable business practices that
are not materially less diligent than those used by the Parent with respect to
its own business operations, attempt to collect (and shall cause the Aether
Acquired Entities to attempt to collect) the Accounts Receivable existing at the
Effective Time ("EFFECTIVE TIME ACCOUNTS RECEIVABLES"). In determining the
collectability of Effective Time Accounts Receivable, the Parties agree that all
amounts collected after the Effective Time shall be applied to the oldest
accounts first, unless an account debtor specifies that any one or more of the
payments made by such account debtor is being made with respect to a particular
outstanding Account Receivable of such account debtor, in which case such
payment shall be applied as such account debtor so specifies. To the extent that
Buyer receives payment from Seller under Article VIII in respect of any
uncollected Effective Time Accounts Receivable (each such Account Receivable, a
"REIMBURSED RECEIVABLE"), Buyer shall transfer to Seller all remaining records
pertaining to such Reimbursed Receivable and Seller shall thereafter be entitled
to collect such Reimbursed Receivable for its own account. If after payment by
Seller, any Reimbursed Receivable is collected by or on behalf of Buyer
(including by any of the Aether Acquired Entities), Buyer shall promptly pay (or
cause to be paid) over to Seller the amount collected.'
7.4 New Section 6.4 of the Purchase Agreement. A new Section 6.4
shall be added to the Purchase Agreement immediately after Section 6.3 and shall
read as follows:
'Section 6.4 Mandatory Registration. Parent shall cause the
registration of the Parent Common Stock in accordance with the terms of the
Registration Rights Agreement.'
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ARTICLE VIII
AMENDMENTS TO ARTICLE VII OF THE PURCHASE AGREEMENT
8.1 Amendments to Section 7.2 of the Purchase Agreement. A new
clause (f) shall be added immediately after clause (e) of the Section 7.2 and
shall read as follows:
'(f) The Parent shall have executed and delivered to
Seller the Registration Rights Agreement.'
ARTICLE IX
AMENDMENTS TO ARTICLE VIII OF THE PURCHASE AGREEMENT
9.1 Amendments to Section 8.1 of the Purchase Agreement. Section
8.1 of the Purchase Agreement shall be amended and restated in its entirety to
read as follows:
'(a) the representations and warranties contained in Section
4.1, Section 4.2, Section 4.3, Section 4.4, Section 4.8, Section 4.23, Section
4.25(a) (but excluding clause (ii) thereof), Section 4.25(b), Section 4.25(c),
Section 5.1, Section 5.2, Section 5.5, Section 5.6, Section 5.9 and Section
5.11, shall survive the Closing without time limit,'
9.2 Amendments to Section 8.2 of the Purchase Agreement. Section
8.2(e) of the Purchase Agreement shall be amended and restated in its entirety
to read as follows:
'Seller's, the Acquired Aether Entities' or their respective
Affiliates' ownership, operation or use of the Purchased Assets, the Purchased
Shares, the Business, or the AAE Purchased Assets prior to the Effective Time,
other than the Assumed Liabilities, except to the extent such Losses relating
thereto relate to or result from, directly or indirectly, a breach of any
representation or warranty of Seller in this Agreement;'
9.3 Amendments to Section 8.3 of the Purchase Agreement. Sections
8.3(c) and (d) of the Purchase Agreement shall be amended and restated in their
entireties to read as follows:
'(c) the Assumed Liabilities, including Buyer's (and, during
the Interim Period, the Acquired Aether Entities') failure to satisfy any of its
obligations relating thereto, except to the extent such Losses relate to or
result from, directly or indirectly, a breach of any representation or warranty
of Seller in this Agreement; and
(d) the ownership, operation or use of the Purchased Assets,
the Acquired Aether Entities, the Purchased Shares, the AAE Purchased Assets and
the Business during the Interim Period (which do not include the Excluded
Liabilities) by Seller (and its Affiliates, including the Acquired Aether
Entities), except to the extent any action or omission breaches the covenants of
Seller included in Section 6.1 of this Agreement, and from and after the Closing
by Buyer and the Acquired Aether Entities; and'
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9.4 Amendment to Section 8.7 of the Purchase Agreement. Section
8.7 of the Purchase Agreement shall be amended and restated in its entirety to
read as follows:
'Subject to the last sentence of this Section 8.7, Seller
shall not be required to indemnify Buyer Indemnitees, and shall not have any
Liability under Section 8.2(a), until the aggregate amount of all Losses under
Section 8.2(a) exceeds $200,000 (the "MINIMUM LOSS"), and then only to the
extent such aggregate Losses exceed the Minimum Loss. Subject to the following
sentence, the aggregate amount of each of Seller's liability for Losses under
Section 8.2(a) and Buyer's and Parent's aggregate liability for Losses under
Section 8.2(b) shall be limited in each case to an amount equal to 40% of the
Purchase Price. The limitations set forth in this Section 8.7 will not apply to
any Claims for indemnification in connection with, arising out of, or which
would not have occurred but for:
(a) a breach of the representations and warranties
contained in Section 4.1, Section 4.2, Section 4.3, Section 4.5, Section 4.8,
Section 4.14, Section 4.15, Section 4.19, Section 4.23, Section 4.25(a) (but
excluding clause (ii) thereof), Section 4.25(b), Section 4.25(c), Section 4.29,
Section 5.1, Section 5.2 , Section 5.3 (but only with respect to the
representations made with respect to the Note), Section 5.4, Section 5.6 and
Section 5.9;
(b) fraud; or
(c) Section 8.2(c), (d), (e), (f) or (g) or Section
8.3(c) or (d); and
(d) covenants to be performed in whole or in part,
post-Closing.
Notwithstanding the foregoing or anything to the contrary set
forth herein, the aggregate amount of Seller's liability shall be limited to an
amount equal to the Purchase Price in respect of all Claims for indemnification
in connection with, arising out of, or which would not have occurred but for, a
breach of the representations and warranties contained in Section 4.4, Section
4.13 and Section 4.15; and (ii) the amount of Seller's liability for a breach of
the representations and warranties contained in Section 4.19 shall be limited
to, and determined by, a recalculation of the Closing Working Capital and the
Adjustment Amount as if such Losses existed on the day immediately preceding the
Effective Time (giving effect to any and all prior payments made pursuant to
Section 3.2(d) in connection with the Purchase Price adjustment and any and all
prior payments made pursuant to this clause (ii)), and no Losses shall be
recoverable until and unless the aggregate amount of such Losses (for which no
indemnification has been made and no adjustment was made in connection with the
Purchase Price adjustment pursuant to Section 3.2(d)) exceeds on a cumulative
basis the Adjustment Floor (as increased or reduced by any payment made in
connection with the Purchase Price adjustment pursuant to Section 3.2(d) and the
aggregate amount of all prior payments made pursuant to this clause (ii)), and
then Seller's indemnification liability shall only be the amount of the excess
of such Losses over the Adjustment Floor (as adjusted as described above). It is
understood and agreed that the purpose of the foregoing clause (ii) is to treat
any Losses resulting from a breach of the representations and warranties
contained in Section 4.19 as if such Losses existed on the Effective Time and
were included in the calculation of the Closing Working Capital in determining
the Adjustment Amount and any required payments under Section 3.2(d), and to
require any payments that
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would have been required to be made in connection with the Purchase Price
adjustment under Section 3.2(d) if such Losses existed on day immediately
preceding the Effective Time (and such payments hereunder shall equal, and in no
event exceed, the amount that would have been required to be paid under Section
3.2(d) in connection with the Purchase Price adjustment if such Losses existed
on the day immediately preceding the Effective Time).'
ARTICLE X
AMENDMENTS TO SECTION IX OF THE PURCHASE AGREEMENT
10.1 Amendments to Section 9.1 of the Purchase Agreement. Section
9.1 of the Purchase Agreement shall be amended and restated in its entirety to
read as follows:
'(a) Buyer shall be liable for, and shall indemnify Seller
Indemnitees against, all Taxes arising or resulting from (i) the conduct of the
Business or the ownership of the Purchased Assets for taxable periods or
portions thereof beginning after the Effective Time or (ii) any transaction
relating to the Business or the Purchased Assets that Buyer or any of its
Affiliates causes to occur on or after the Effective Time (excluding, subject to
Section 3.7, the sale of the Business and the Purchased Assets to Buyer and the
assumption of the Assumed Liabilities by Buyer pursuant to this Agreement).
(b) Seller shall be liable for and agrees to indemnify,
defend and hold Buyer Indemnitees harmless from (i) any Tax imposed on any
Acquired Aether Entity if and to the extent that such Tax arises in respect of a
taxable period ended on or before the Effective Time (a "TAX INDEMNITY PERIOD"),
(ii) any Tax that constitutes a lien or Encumbrance on the Purchased Assets if
and to the extent that such Tax arises in respect of a Tax Indemnity Period,
(iii) any Tax or other Losses resulting from the inaccuracy or breach of any
representation or warranty set forth in Section 4.14 or the breach of any
covenants set forth in Section 6.3(h), and (iv) any costs and expenses
(including, without limitation, reasonable expenses of investigation and
attorneys' fees and expenses) arising out of the imposition or assessment of any
Tax, Losses or other costs described in clause (i), (ii) or (iii) ("OTHER
COSTS"), and the filing of any Returns for a taxable period ending on or before
the Effective Time, including those incurred in the contest of good faith of any
such imposition, assessment or assertion. Any Tax imposed as a result of the
sale of the Business and the Purchased Assets to Buyer and the assumption of the
Assumed Liabilities by Buyer pursuant to this Agreement shall be deemed to arise
in respect of a Tax Indemnity Period.
(c) For purposes of subsections (a) and (b) of this
Section 9.1, whenever it is necessary to determine the Liability for Taxes for a
Straddle Period, such Taxes shall be apportioned between Seller and Buyer (A) in
the case of Taxes other than income, sales and use and withholding taxes, on a
per diem basis and (B) in the case of income, sales and use and withholding
taxes, as determined as though the Straddle Period consisted of two taxable
years or periods, one which ended on the Effective Time and the other which
began at the beginning of the day following the Effective Time.
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(d) Buyer shall pay to Seller the amounts received by
Buyer or any of its Affiliates of any refund, abatement or credit of (A) Taxes
which are attributable to the conduct of the Business or the ownership of the
Purchased Assets on or prior to the Effective Time and (B) any other Tax Assets.
In the case of any Straddle Period, Buyer shall pay to Seller the amount
received by Buyer or any of its Affiliates of any refund, abatement or credit of
Taxes that would have been made had the Taxable Period ended on the Effective
Time.
(e) Any assessment or other Claim by a Governmental
Authority seeking to enforce or collect a Tax, Losses or Other Costs described
in Section 9.1 shall be subject to the provisions of Section 8.4, 8.5, 8.6, 8.8
and 8.9 of this Agreement to the extent that Section 6.3(h)(iv) does not apply
to such assessment or Claim.
(f) For the avoidance of doubt, notwithstanding any other
contrary provisions of this Agreement, Seller shall not be liable for any Taxes
or related Losses to the extent such Taxes or related Losses have been included
as a liability in calculating the Closing Net Working Capital, or such Taxes or
Losses are included in Assumed Liabilities.'
ARTICLE XI
AMENDMENTS TO SECTION X OF THE PURCHASE AGREEMENT
11.1 Amendments to Section 10.1 of the Purchase Agreement. Section
10.1 of the Purchase Agreement shall be amended and restated in its entirety as
follows:
'Section 10.1 Records/Litigation.
(a) For a period of five (5) years after the Effective
Time, in the event and for so long as any Party or any Acquired Aether Entity or
any of their respective Affiliates is contesting or defending against any Claim
in connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Effective Time involving any Party or any Acquired Aether Entity or any
of their respective Affiliates, the other Party or Acquired Aether Entity, as
the case may be, will cooperate with the contesting or defending party and its
counsel in the contest or defense, make available its personnel, and provide
such testimony and access to its Books and Records as shall be reasonably
necessary in connection with the contest or defense, all at the sole cost and
expense of the contesting or defending party (unless the contesting or defending
party claims to be entitled to indemnification therefor under Article VIII or
Article IX).
(b) For a period of five (5) years after the Effective
Time, each Party shall provide such assistance as the other Party may from time
to time reasonably request in connection with the preparation of Tax Returns
required to be filed, any audit or other examination by any taxing authority,
any judicial or administrative proceeding relating to Liability for Taxes, or
any claim for refund in respect of such Taxes or in connection with any
litigation and proceedings related to the Business, including making available
documents,
26
witnesses, employees for interviews, litigation preparation and testimony. The
requesting party shall reimburse the assisting party for the out-of-pocket costs
incurred by the assisting party.'
11.2 Amendments to Section 10.2 of the Purchase Agreement: Section
10.2 of the Purchase Agreement shall be deleted in its entirety.
ARTICLE XII
AMENDMENTS TO SECTION XII OF THE PURCHASE AGREEMENT
12.1 Amendments to Section 12.1 of the Purchase Agreement. Section
12.1 of the Purchase Agreement shall be amended and restated in its entirety as
follows:
'Section 12.1. Further Assurances. From time to time, at
Parent's, Buyer's or Seller's request, whether before or after the Closing Date,
Parent, Buyer or Seller, as the case may be, shall, and shall cause their
respective Affiliates and Representatives to, execute and deliver such further
instruments of conveyance, transfer and assignment, cooperate and assist in
providing information for making and completing regulatory filings prior to or
after the Closing, and take such other actions as Parent, Buyer or Seller, as
the case may be, may reasonably require of the other Party to more effectively
assign, convey and transfer to such Party the Purchased Assets, the Acquired
Aether Entities and the Purchased Shares, and to assume the Assumed Liabilities
and the AAE Assumed Liabilities, as contemplated by this Agreement.'
12.2 Amendments to Section 12.5 of the Purchase Agreement. Section
12.5 of the Purchase Agreement shall be amended and restated in its entirety as
follows:
'Section 12.5. Construction. The term "Buyer" as used in this
Agreement shall be construed, as the context requires, to refer to either or
both of TSYS and TCS Ltd.'
12.3 New Sections 12.15, 12.16 and 12.17 of the Purchase Agreement.
New Sections 12.15, 12.16 and 12.17 shall be added to Article XII of the
Purchase Agreement immediately after Section 12.14 and shall read as follows:
'Section 12.15. Consent to Capital Contribution. Parent and
Buyer consent to the contribution by Aether Systems Limited of all of the issued
share capital of Aether Management Services Limited to Aether Systems (UK)
Limited prior to Closing, with such contribution resulting in Aether Management
Systems Limited becoming a wholly-owned subsidiary of Aether Systems Limited.
Section 12.16. Liquidation Acknowledgement. The Parties
acknowledge that Beyerholm & Moe ApS and Xxxx Communications Scandinavia ApS are
in liquidation in Denmark and that such liquidation is expected to be completed
after receipt by one or both of such companies of a refund from the Danish
and/or other European national tax authorities. For purposes of this Agreement,
the Parties agree that any amounts received from such tax refunds shall be first
offset against any outstanding liabilities of the liquidating company, but that
pursuant to this Agreement (including, without limitation, Articles II and IX),
any remaining
27
amounts resulting from such tax refunds shall be for the account of Seller and
paid by Parent or one of its Affiliates, net of any costs, expenses or
Liabilities incurred by Parent or any of its Affiliates in connection with the
Retained Cash, to Seller within 20 days of receipt thereof.
Section 12.17. Deemed Closing. The Parties acknowledge and
agree that the transactions contemplated hereby are intended to have financial,
economic and accounting effect as if the transactions contemplated by this
Agreement had closed at the Effective Time as described in Section 3.1(b). To
the extent that any provisions hereof are inconsistent with such intention, the
provisions hereof shall be interpreted in a manner that gives effect to the
Parties' intentions and the Parties agree to cooperate in effectuating such
intent.'
ARTICLE XIII
ADDITIONAL AGREEMENTS
13.1 Effect of Amendment.
Through its execution of this Amendment, each of the parties
hereby acknowledges and agrees that TCS Ltd. is made a party to the Purchase
Agreement, in its entirety and as amended by this Amendment. Except as expressly
provided in this Amendment, the Purchase Agreement shall continue in full force
and effect.
13.2 Schedules.
The Parties agree and consent to any amendment to the Seller's
Disclosure Schedules (including, but not limited to, Schedule 6.1(h) thereto) to
reflect the conveyance, purchase, assignment and transfer of cash held in the
bank accounts of the Aether Acquired Entities in exchange for the Parent Common
Stock Consideration, as such Parent Common Stock Consideration may be adjusted
pursuant to the provisions described in Section 4.2 of this Amendment.
13.3 References.
Each of the parties hereto agrees that all previous and future
references to the Purchase Agreement shall be deemed to refer to such agreements
as amended by the terms of this Amendment.
13.4 Counterparts.
This Amendment may be executed 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.
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13.5 Construction.
The parties have participated jointly in the negotiation and
drafting of this Amendment. In the event an ambiguity or question of intent or
interpretation arises, this Amendment shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of authorship of any provision of this
Amendment.
13.6 Governing Law.
This Amendment shall be governed by and construed under and
the rights of the parties determined in accordance with the laws of the State of
Maryland (without reference to the choice of law provisions of such state)
except with respect to matters of law concerning the internal corporate affairs
of any corporate entity which is a party to or the subject of this Amendment,
and as to those matters the law of the jurisdiction under which the respective
entity derives its powers shall govern.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
on the date first written above.
AETHER SYSTEMS, INC.
By:
-------------------------------------
Name:
Title:
TSYS ACQUISITION CORP.
By:
-------------------------------------
Name:
Title:
TELECOMMUNICATION SYSTEMS LIMITED
By:
-------------------------------------
Name:
Title:
TELECOMMUNICATIONS SYSTEMS, INC.
By:
-------------------------------------
Name:
Title:
30
