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EXHIBIT CC
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AMENDED AND RESTATED
SALE OF ASSETS
AND
TRADEMARK AGREEMENT
by and among
INTEK DIVERSIFIED CORPORATION,
XXXXXXXX CAPITAL LIMITED
and
MIDLAND INTERNATIONAL CORPORATION
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TABLE OF CONTENTS
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Page
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1. DEFINITIONS.......................................................... 2
1.1 "Acquired Assets"........................................... 2
1.2 "Additional Purchase Shares"................................ 2
1.3 "Affiliate"................................................. 2
1.4 "Assumed Liabilities"....................................... 2
1.5 "Bankruptcy Exception"...................................... 2
1.6 "Beneficiary"............................................... 2
1.7 "Business Day".............................................. 2
1.8 "Claimant".................................................. 2
1.9 "Closing"................................................... 2
1.10 "Code"...................................................... 2
1.11 "Collateral"................................................ 2
1.12 "Common Stock".............................................. 3
1.13 "Computer Services Agreement"............................... 3
1.14 "Contracts"................................................. 3
1.15 "Damages"................................................... 3
1.16 "Direct Claim".............................................. 3
1.17 "Direct Claim Notice"....................................... 3
1.18 "Dollar".................................................... 3
1.19 "Effective Date"............................................ 3
1.20 "ERISA"..................................................... 3
1.21 "Escrow Agent".............................................. 3
1.22 "Escrow Agreement".......................................... 3
1.23 "Exchange Act".............................................. 3
1.24 "FCC"....................................................... 3
1.25 "Governmental Entity"....................................... 3
1.26 "Xxxx-Xxxxx-Xxxxxx Act"..................................... 3
1.27 "Indemnitor"................................................ 3
1.28 "Intek Assignment and Assumption Agreement"................. 4
1.29 "Intek Disclosure Schedules"................................ 4
1.30 "Intek Documents"........................................... 4
1.31 "Intek Representative"...................................... 4
1.32 "Intek Officer's Certificate"............................... 4
1.33 "Intek Stockholders' Meeting"............................... 4
1.34 "Intek Subsidiaries"........................................ 4
1.35 "IRS"....................................................... 4
1.36 "Legal Proceeding".......................................... 4
1.37 "LMR Products".............................................. 4
1.38 "Material Adverse Change" or "Material Adverse Effect"...... 4
1.39 "MIC Disclosure Schedules".................................. 5
1.40 "MIC Documents"............................................. 5
1.41 "MIC Materials"............................................. 5
1.42 "MIC Representative"........................................ 5
1.43 "MIC/Xxxxxxxx Officers' Certificates"....................... 5
1.44 "Midland Consumer Products"................................. 5
1.45 "MUSA"...................................................... 5
1.46 "Net Operating Losses"...................................... 5
1.47 "Obligations"............................................... 6
1.48 "Option".................................................... 6
1.49 "Option Exercise Date"...................................... 6
1.50 "Original Agreement"........................................ 6
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1.51 "Performance Guarantees".................................... 6
1.52 "Person".................................................... 6
1.53 "Prepaid Expenses".......................................... 6
1.54 "Product Purchasing Services Agreement"..................... 6
1.55 "Proxy Statement"........................................... 6
1.56 "Registration Rights Agreement"............................. 7
1.57 "Responsible Party"......................................... 7
1.58 "Securicor Agreement"....................................... 7
1.59 "Securicor Loan Agreement".................................. 7
1.60 "Securicor Transaction Termination Date".................... 7
1.61 "Securicor Transaction"..................................... 7
1.62 "Securities Act"............................................ 7
1.63 "SMR"....................................................... 7
1.64 "Subsidiary"................................................ 7
1.65 "Taxes"..................................................... 7
1.66 "Third Party Claim"......................................... 8
1.67 "Third Party Claim Notice".................................. 8
1.68 "To the Knowledge of the Executive Officers of Intek"....... 8
1.69 "To the Knowledge of the Executive Officers of MIC"......... 8
1.70 "Transferred Employees"..................................... 8
1.71 "U.S."...................................................... 8
1.72 "U.S. LMR Distribution Business"............................ 8
1.73 "U.S. Trademarks"........................................... 8
1.74 "U.S. Trademarks License"................................... 8
1.75 "U.S. Trademarks License Agreement"......................... 8
2. SALE OF ASSETS....................................................... 8
2.1 Sale of Assets and U.S. Trademarks.......................... 8
2.2 Assignability and Consents.................................. 11
2.3 Assumed Liabilities......................................... 12
3. CONSIDERATION........................................................ 15
3.1 Purchase Price.............................................. 15
3.2 Transfer Taxes.............................................. 17
3.3 Reimbursement of Operating Expenses Paid After the
Effective Date.............................................. 17
3.4 Collections of Accounts Receivable.......................... 18
3.5 Hitachi Credit Allocation................................... 20
4. CLOSING.............................................................. 21
4.1 Closing..................................................... 21
4.2 Deliveries at Closing by Xxxxxxxx and MIC................... 21
4.3 Deliveries at Closing by Intek.............................. 22
5. CONDITIONS PRECEDENT................................................. 23
5.1 Conditions Precedent to Intek's Obligations................. 23
(a) MIC/Xxxxxxxx Officers' Certificates............ 23
(b) No Material Adverse Change..................... 23
(c) Board Ratification............................. 23
(d) Deliveries..................................... 24
(e) Consents, Permits and Governmental Approvals... 24
5.2 Conditions Precedent to MIC's Obligations................... 24
(a) Securicor Loan Agreement....................... 24
(b) Intek Officer's Certificate.................... 24
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(c) No Material Adverse Change..................... 25
(d) Capitalization................................. 25
(e) Deliveries..................................... 25
(f) Consents, Permits and Governmental Approvals... 25
(g) Instruments of Assumption...................... 26
6. REPRESENTATIONS AND WARRANTIES....................................... 26
6.1 Representations and Warranties of MIC and Xxxxxxxx.......... 26
(a) Organization, Standing, Power and Authority.... 26
(b) Business in Ordinary Course.................... 27
(c) Contracts...................................... 28
(d) Consents and Approvals; No Violation........... 29
(e) Acquired Assets................................ 29
(f) Intangible Property............................ 30
(g) Brokers, Finders and Agents.................... 30
(h) Employee Benefit Plans......................... 30
(i) Litigation, Product Liability.................. 31
(j) Suppliers and Customers........................ 32
(k) Information in Disclosure Documents............ 33
(l) Financial Statements........................... 33
(m) Real Property.................................. 33
(n) Tangible Personal Property..................... 34
(o) Compliance with Laws........................... 35
(p) FCC Licenses................................... 35
(q) Disclaimers of MIC............................. 36
6.2 Representations and Warranties of Intek..................... 36
(a) Organization, Standing, Power and Authority.... 36
(b) Capitalization................................. 37
(c) Shares Issued to MIC........................... 38
(d) Subsidiaries................................... 38
(e) Business in Ordinary Course.................... 39
(f) Consents and Approvals; No Violation........... 39
(g) Brokers, Finders and Agents.................... 40
(h) Employee Relations............................. 40
(i) Employee Plans................................. 41
(j) Material Contracts............................. 42
(k) Intek Corporate Action......................... 42
(l) Information in Disclosure Documents............ 43
(m) Financial Statements........................... 43
(n) Environmental Matters.......................... 44
(o) Labor Relations................................ 47
(p) Real Estate.................................... 47
(q) Litigation..................................... 47
(r) Licenses....................................... 48
(s) Units in Service............................... 49
(t) Contracts, Leases and Site Licenses............ 49
(u) Related Party Transactions..................... 50
(v) Compliance with Laws........................... 50
7. COVENANTS OF MIC..................................................... 51
7.1 MIC's Representation Letter................................. 51
7.2 Satisfaction of MIC Obligations Post-Closing................ 52
(a) Return of Acquired Assets...................... 52
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(b) Return of MUSA Property..................... 53
8. COVENANTS OF INTEK................................................ 53
8.1 Confidentiality of Information........................... 53
8.2 Replacement of Performance Bonds......................... 55
8.3 Rights of Inspection..................................... 55
8.4 Employee Matters......................................... 55
8.5 Ownership and Proprietary Rights......................... 56
8.6 Agreements with Respect to Other Transactions............ 56
9. MUTUAL ADDITIONAL COVENANTS....................................... 57
9.1 Expenses................................................. 57
9.2 Public Announcement...................................... 57
9.3 Cooperation.............................................. 57
9.4 Interim Operations....................................... 57
9.5 Certain Filings, Consents and Arrangements............... 58
9.6 Proxy Statement.......................................... 58
9.7 Hitachi Supply Agreement................................. 59
9.8 Removal of Retained Assets............................... 60
10. OPTION TO ACQUIRE CAPITAL STOCK OF MUSA........................... 60
10.1 Grant of Option.......................................... 60
10.2 Option Exercise Requirements............................. 60
10.3 Release of Rights and Obligations........................ 61
10.4 Delivery of MUSA Capital Stock........................... 61
10.5 Representations Regarding MUSA Capital Stock............. 61
10.6 Option Period............................................ 61
11. INDEMNIFICATION................................................... 62
11.1 MIC's and Xxxxxxxx' Indemnification Obligations.......... 62
11.2 Intek's Indemnification Obligations...................... 62
11.3 Notice and Opportunity to Defend......................... 62
11.4 Payment of Damages....................................... 65
11.5 Exclusive Remedy......................................... 66
11.6 Subordination to Securicor............................... 66
12. ASSIGNMENT AND SUBLICENSE......................................... 66
13. NON-COMPETE....................................................... 67
13.1 MIC/Xxxxxxxx Non-Compete................................. 67
13.2 Intek Non-Compete........................................ 67
14. MISCELLANEOUS..................................................... 67
14.1 Amendments............................................... 67
14.2 Entire Agreement......................................... 67
14.3 Governing Law............................................ 67
14.4 Notices.................................................. 68
14.5 Counterparts............................................. 68
14.6 Bulk Sales............................................... 69
14.7 Waivers.................................................. 69
14.8 Third Parties............................................ 69
14.9 Schedules and Exhibits................................... 69
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14.10 Headings............................................... 69
14.11 Independent Contractor................................. 69
14.12 Specific Performance................................... 69
14.13 Arbitration............................................ 69
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Schedules and Exhibits
EXHIBITS
Exhibit A Computer Services Agreement
Exhibit B Escrow Agreement
Exhibit C Intek Assignment and Assumption Agreement
Exhibit D Product Purchase Services Agreements
Exhibit E Registration Rights Agreement
Exhibit F U.S. Trademarks License Agreement
Exhibit G Assignment of United States Trademark Rights
Exhibit H Form of Opinion of MIC's Counsel
Exhibit I Form of Opinion of Intek's Counsel
SCHEDULES
Schedule 1.68 Executive Officers of Intek
Schedule 1.69 Executive Officers of MIC
Schedule 1.73 U.S. Trademarks
Schedule 2.1(c) Contracts
Schedule 2.1(e) Other Assets and Inventory
Schedule 2.1(g) Real Property Leases
Schedule 2.1(j) Prepaid Expenses
Schedule 2.3(a)(3) Accrued Employee Liabilities as of the Effective
Date
Schedule 2.3(a)(8) Intek Purchase Orders
Schedule 2.3(a)(10) LMR Dealer Co-op Totals
Schedule 3.3 Reimbursement Schedule
Schedule 8.2 Performance Bonds / Letters of Credit /
Guaranties
Schedule 8.4 Transferred Employees
Schedule 13.4 MIC Retained Agreements
MIC DISCLOSURE SCHEDULES
Schedule 6.1(a) MIC - Organization and Standing; Power and
Authority
Schedule 6.1(b) MIC - Exceptions to Business in Ordinary Course
Schedule 6.1(c) MIC - Compliance with Contracts
Schedule 6.1(d) MIC - Consents and Approvals; No Violation
Schedule 6.1(e) MIC - Exceptions to Title
Schedule 6.1(f) MIC - Intellectual Property Matters
Schedule 6.1(h)(3) MIC - Compliance with Employee Benefits Plans
Schedule 6.1(i) MIC - Legal Proceedings
Schedule 6.1(j) MIC - Suppliers and Customers
Schedule 6.1(n) MIC - Personal Property Leases
Schedule 6.1(p) MIC - FCC Licenses
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INTEK DISCLOSURE SCHEDULES
Schedule 6.2(a) Intek - Organization and Standing; Power and
Authority
Schedule 6.2(b) Intek - Options, Warrants
Schedule 6.2(d) Intek - Subsidiaries
Schedule 6.2(e) Intek - Exceptions to Business in Ordinary Course
Schedule 6.2(f) Intek - Consents, Approvals; No Violations
Schedule 6.2(h) Intek - Employee Relations
Schedule 6.2(i) Intek - Employee Plans
Schedule 6.2(j) Intek - Material Contracts
Schedule 6.2(n) Intek - Environmental Matters
Schedule 6.2(o) Intek - Labor Relations
Schedule 6.2(p) Intek - Real Property Matters
Schedule 6.2(q) Intek - Legal Proceedings
Schedule 6.2(r) Intek - FCC Licenses
Schedule 6.2(s) Intek - Units In Service
Schedule 6.2(t) Intek - Contracts, Leases and Site Licenses
Schedule 6.2(u) Intek - Related Party Transactions
Schedule 6.2(v) Intek - Compliance with Laws
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AMENDED AND RESTATED
SALE OF ASSETS AND TRADEMARK AGREEMENT
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THIS AMENDED AND RESTATED SALE OF ASSETS AND TRADEMARK AGREEMENT dated as
of September 19, 1996 (this "Agreement") and effective as of June 18, 1996 is
made and entered into by and among Intek Diversified Corporation, a Delaware
corporation ("Intek"), Xxxxxxxx Capital Limited, an Ontario corporation
("Xxxxxxxx"), and Midland International Corporation, a Delaware corporation and
indirect wholly owned subsidiary of Xxxxxxxx ("MIC"), and amends and restates in
full that certain Sale of Assets and Trademark License Agreement (the "Original
Agreement") dated as of June 18, 1996 among Intek, MIC and Xxxxxxxx.
RECITALS
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A. MIC is in the business of developing, distributing and reselling LMR
Products (as defined in Section of this Agreement) under the U.S. Trademarks (as
defined in Section of this Agreement) and is the owner of the U.S. Trademarks.
B. Intek, through its subsidiaries, is in the business of developing,
constructing and managing specialized mobile radio ("SMR") networks in the
United States utilizing licenses granted by the Federal Communications
Commission ("FCC") for the 220 to 222 megahertz narrow band spectrum.
C. Pursuant to the terms of the Original Agreement, MIC agreed to grant to
Intek a license to sell LMR Products under the U.S. Trademarks in the U.S. and
to sell certain other assets of MIC to Intek, and Intek agreed to acquire such
license and assets.
D. Intek and Securicor Communications Limited., an England and Wales
corporation ("Securicor"), entered into a Stock Purchase Agreement (the
"Securicor Agreement") dated June 18, 1996, as amended September 20, 1996,
pursuant to which Securicor agreed to sell all of the outstanding securities
(other than certain preferred shares) of Securicor's wholly-owned subsidiary,
Securicor Radiocoms Limited, to Intek in consideration for 25,000,000 shares of
common stock, par value $0.01 per share of Intek (the "Securicor Transaction").
E. The transactions contemplated in the Securicor Agreement and the
Original Agreement were originally scheduled to close simultaneously.
F. Intek, MIC and Xxxxxxxx desire to amend the Original Agreement to
provide for, among other things, (i) the closing of the transactions
contemplated in the Original Agreement, as herein amended, simultaneously with
the execution and delivery of this Agreement or as soon thereafter as is
practicable, (ii) an outright assignment by MIC of the U.S. Trademarks to MUSA,
as Intek's assignee, with a license back of the U.S. Trademarks to
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MIC for certain uses, (iii) the sale of certain additional inventory and fixed
assets to Intek and the assumption by Intek of certain liabilities of MIC, and
(iv) a revision to the purchase price in the event that the Securicor
Transaction is not consummated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the Recitals and the mutual
covenants hereinafter set forth, and for other good and valuable consideration,
the parties agree as follows:
1. DEFINITIONS
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1.1 "Acquired Assets" shall have the meaning set forth in
Section 2.1.
1.2 "Additional Purchase Shares" shall mean the shares of Common
Stock to be issued to MIC pursuant to the terms of Section
3.1(b)(2)(A) of this Agreement upon consummation of the
Securicor Transaction.
1.3 "Affiliate" means, with respect to any Person, any other
Person that controls such Person, or is controlled by or under
common control with such Person. With respect to Intek, the
term "Affiliate" shall not include Securicor Group plc,
Securicor, MIC, Xxxxxxxx nor their respective subsidiaries.
1.4 "Assumed Liabilities" shall have the meaning set forth
in Section 2.3(a).
1.5 "Bankruptcy Exception" shall have the meaning set forth
in Section 6.1(a).
1.6 "Beneficiary" shall have the meaning set forth in
Section 11.3(a).
1.7 "Business Day" shall mean any day of the year on which
national banking institutions in New York are open to the
public for conducting business and are not required or
authorized to close.
1.8 "Claimant" shall have the meaning set forth in Section
11.3(f).
1.9 "Closing" shall have the meaning set forth in Section
4.1.
1.10 "Code" shall mean the Internal Revenue Code of 1986, as
amended, in effect as of the date of this Agreement.
1.11 "Collateral" shall have the meaning set forth in the
Securicor Loan Agreement.
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1.12 "Common Stock" shall mean the common stock, par value
$0.01 per share, of Intek.
1.13 "Computer Services Agreement" shall mean the agreement
providing for MUSA to acquire certain computer services from
Xxxxxxxx pursuant to the Computer Services Agreement hereto as
Exhibit A.
1.14 "Contracts" shall have the meaning set forth in Section
2.1(c).
1.15 "Damages" shall have the meaning set forth in Section
11.1.
1.16 "Direct Claim" shall have the meaning set forth in
Section 11.3(f).
1.17 "Direct Claim Notice" shall have the meaning set forth
in Section 11.3(f).
1.18 "Dollar" shall mean United States Dollar.
1.19 "Effective Date" shall mean August 1, 1996.
1.20 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.21 "Escrow Agent" shall mean American Stock Transfer & Trust
Company, a New York corporation, and its successors as escrow
agent pursuant to the terms of the Escrow Agreement.
1.22 "Escrow Agreement" shall mean the Escrow Agreement entered
into among MIC, Intek and Escrow Agent, in substantially the
form attached hereto as EXHIBIT B.
1.23 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
1.24 "FCC" shall have the meaning set forth in Recital B.
1.25 "Governmental Entity" shall have the meaning set forth
in Section 6.1(d).
1.26 "Xxxx-Xxxxx-Xxxxxx Act" shall mean the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as amended.
1.27 "Indemnitor" shall have the meaning set forth in
Section 11.3(a).
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1.28 "Intek Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement entered into between Intek
and MUSA as of the Closing and in the form attached hereto as
EXHIBIT C.
1.29 "Intek Disclosure Schedules" shall mean the disclosure
schedules prepared by Intek and delivered to MIC and Xxxxxxxx
simultaneously with the execution and delivery of this
Agreement.
1.30 "Intek Documents" shall have the meaning set forth in
Section 6.2(a).
1.31 "Intek Representative" shall mean the Chairman of Intek or
such officer of Intek as the Chairman shall designate in
writing.
1.32 "Intek Officer's Certificate" shall have the meaning
set forth in Section 5.2(b).
1.33 "Intek Stockholders' Meeting" shall have the meaning
set forth in Section 9.6.
1.34 "Intek Subsidiaries" shall have the meaning set forth
in Section 6.2(d).
1.35 "IRS" shall mean the Internal Revenue Service.
1.36 "Legal Proceeding" shall have the meaning set forth in
Section 6.1(i).
1.37 "LMR Products" means any existing and future land
mobile radio products for use in the professional
and/or commercial markets, including, without
limitation, antennas which are usable with both Midland
Consumer Products and LMR Products; PROVIDED, HOWEVER,
that notwithstanding Section 13 of this Agreement or
any other provision contained herein to the contrary,
such antennas may be manufactured, promoted, sold
and/or distributed in the U.S. by both MIC and Intek,
and their respective Affiliates. The term "LMR
Products" is not intended to include and shall not
include (a) Midland Consumer Products, or (b) the
Midland 70-1336, 70-1526, 70-9020 and 70-9405 products,
or (c) and any subsequent upgrades, enhancements,
modifications or improvements of the products described
in Sections 1.37(a) and 1.37(b) above.
1.38 "Material Adverse Change" or "Material Adverse Effect" means
an event or circumstance which materially adversely affects
the business, properties, financial condition or operations
(taken as a whole) of the U.S. LMR Distribution Business, in
the case of MIC, or of
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Intek and its subsidiaries (taken as a whole), in the case of
Intek.
1.39 "MIC Disclosure Schedules" shall mean the disclosure schedules
prepared by MIC and delivered to Intek simultaneously with the
execution and delivery of this Agreement.
1.40 "MIC Documents" shall have the meaning set forth in
Section 6.1(a).
1.41 "MIC Materials" shall have the meaning set forth in
Section 8.1(a).
1.42 "MIC Representative" shall mean the Chief Executive Officer of
MIC or such officer of MIC as the Chief Executive Officer
shall designate in writing.
1.43 "MIC/Xxxxxxxx Officers' Certificates" shall have the
meaning set forth in Section 5.1(a).
1.44 "Midland Consumer Products" means consumer wireless
products and consumer electronic products consisting of
consumer communications equipment, consumer automotive
equipment, consumer marine equipment, consumer amateur
radio products and consumer audio products and/or video
home entertainment equipment, which are being sold at
any time in department stores and/or in electronic
specialty stores, including, but not limited to,
citizen band radios, GMRS radios, marine radios,
scanners, intercoms, radio recorders, car radios,
itinerant radios, consumer GPS marine products,
satellite receivers, video cassette recorders, video
cameras, stereophonic and high fidelity components
and/or systems, compact disc players, laser disc
players, cordless telephones, consumer paging products,
telephones with video, and other telephones and
antennas and other accessories for the foregoing.
"Midland Consumer Products" specifically does not
include cellular telephones, personal communications
systems (PCS) telephones, commercial and two-way paging
products, commercial wireless satellite antennas, LMR
antenna products, all other electronic or
communications equipment for use in the professional
and commercial market, and antennas and other
accessories for the foregoing.
1.45 "MUSA" shall mean Midland USA, Inc., a Delaware corporation
and wholly owned subsidiary of Intek.
1.46 "Net Operating Losses" shall mean the loss, if any,
incurred by MUSA in the operation of the U.S. LMR
Distribution Business between August 1, 1996 and the
date of the closing of the Securicor Transaction,
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calculated by subtracting the following amounts from
the aggregate net revenue of the U.S. LMR Distribution
Business during such period:
(a) costs of all goods and services sold in the U.S.
LMR Distribution Business in generating such net
revenue;
(b) employment costs, lease and operation expenses of
facilities, sales and marketing expenses, general
and administrative expenses, service agreements,
depreciation and amortization (but expressly
excluding any amortization of the purchase price,
the Trademarks or the goodwill of MIC acquired
pursuant to this Agreement) incurred in the
operations of the U.S. LMR Distribution Business;
and
(c) interest expense and Taxes incurred by MUSA
directly related to the conduct of the U.S. LMR
Distribution Business.
1.47 "Obligations" shall have the meaning set forth in the
Securicor Loan Agreement.
1.48 "Option" shall have the meaning set forth in Section
10.1.
1.49 "Option Exercise Date" shall mean the date thirty (30)
days following the Securicor Transaction Termination
Date.
1.50 "Original Agreement" shall have the meaning set forth
in the preface to this Agreement.
1.51 "Performance Guarantees" shall have the meaning set
forth in Section 8.2.
1.52 "Person" means an individual, partnership (general or
limited), corporation, association or other form of business
organization (whether or not regarded as a legal entity under
applicable law), trust, estate or any other entity.
1.53 "Prepaid Expenses" shall have the meaning set forth in
Section 2.1(j) of this Agreement.
1.54 "Product Purchasing Services Agreement" shall mean the Product
Purchasing Agreement to be entered into between MIC and Intek
in the form attached hereto as EXHIBIT D.
1.55 "Proxy Statement" shall have the meaning set forth in
Section 9.6.
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1.56 "Registration Rights Agreement" means the registration
rights agreement to be entered into as of the closing
of the Securicor Transaction by and among Intek, Roamer
One, Inc., Securicor Communications Limited, Securicor
International Limited, Xxxxxxxx, MIC, Anglo York
Industries, Inc., Xxxx & Xxxx, XX Limited, Octagon
Investments Limited, Xxxxxx Xxxxxxxx and certain other
holders of the Common Stock of Intek, and in the form
attached hereto as EXHIBIT E.
1.57 "Responsible Party" shall have the meaning set forth in
Section 11.3(d).
1.58 "Securicor Agreement" shall have the meaning set forth
in Recital D.
1.59 "Securicor Loan Agreement" means the $15,000,000 Loan
Agreement dated as of September 19, 1996 between MUSA, as
Borrower, and Securicor Communications Limited, as
Lender.
1.60 "Securicor Transaction Termination Date" shall mean the
effective date of any termination of the Securicor Agreement
by Intek or Securicor pursuant to the terms of the Securicor
Agreement as in effect on the date hereof.
1.61 "Securicor Transaction" shall have the meaning set
forth in Recital D.
1.62 "Securities Act" shall mean the Securities Act of 1933,
as amended.
1.63 "SMR" shall have the meaning set forth in Recital B.
1.64 "Subsidiary" means any Person fifty percent (50%) or more of
whose issued and outstanding voting securities is owned or
controlled, directly or indirectly, by the specified Person.
1.65 "Taxes" means all federal, state, local or foreign
taxes, imposts, levies, or other assessments,
including, without limitation, gross receipts,
franchise, income, profits, license, payroll,
employment, excise, severance, stamp, occupation,
premium, windfall profit, environmental, customs
duties, capital, withholding, payroll, social security,
unemployment, disability, real property, personal
property, inventory, sales, use, transfer,
registration, gains, value added, alternative or add-on
minimum, estimated, or other tax of any kind or nature
whatsoever, including any interest, penalty or addition
thereto and any transferee or successor liability
therefor (by contract or otherwise), whether imposed
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singly or on a consolidated, combined or unitary basis,
and whether disputed or not.
1.66 "Third Party Claim" shall have the meaning set forth in
Section 11.3(a).
1.67 "Third Party Claim Notice" shall have the meaning set
forth in Section 11.3(a).
1.68 "To the Knowledge of the Executive Officers of Intek" means
what the corporate officers of Intek and the Intek
Subsidiaries, all as listed on Schedule of the Intek
Disclosure Schedules, actually know or would know after
reasonable investigation, in light of their positions and
responsibilities with Intek.
1.69 "To the Knowledge of the Executive Officers of MIC" means to
what the corporate officers of MIC listed on Schedule of the
MIC Disclosure Schedules, actually know or would know after
reasonable investigation, in light of their positions and
responsibilities with MIC.
1.70 "Transferred Employees" means those employees of MIC listed on
Schedule 8.4(a) that accept Intek's offer of employment
pursuant to Section 8.4(a).
1.71 "U.S." means the United States and its territories and
possessions.
1.72 "U.S. LMR Distribution Business" means the sale and
distribution of LMR Products bearing the U.S.
Trademarks within the U.S., as presently conducted by
MIC.
1.73 "U.S. Trademarks" shall mean the trademarks described on
Schedule 1.73 of the MIC Disclosure Schedules and the trade
name "Midland" in the U.S. and similar variations thereof,
and all registrations, applications and renewals thereof, and
all logos, whether or not registered, used in connection
therewith.
1.74 "U.S. Trademarks License" shall mean the license to use
the U.S. Trademarks granted by MUSA to MIC pursuant to
the terms of the U.S. Trademarks License Agreement.
1.75 "U.S. Trademarks License Agreement" shall mean the U.S.
Trademarks License Agreement attached hereto as EXHIBIT F.
2. SALE OF ASSETS AND U.S. TRADEMARKS
2.1 SALE OF ASSETS AND U.S. TRADEMARKS. Simultaneously
with the execution and delivery of this Agreement by
the parties hereto and on the terms and subject to the
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conditions of this Agreement, but effective as of the
Effective Date, MIC hereby grants, sells and assigns to Intek,
the following rights, assets and interests of MIC related to
the conduct of the U.S. LMR Distribution Business
(collectively the "Acquired Assets") and conveys to MUSA the
Acquired Assets as Intek shall direct, subject to MUSA and
Intek's entering into the Intek Assignment and Assumption
Agreement:
(a) The U.S. Trademarks and the goodwill of the
business associated with U.S. Trademarks;
(b) All accounts receivable arising on or after the
Effective Date in the conduct of the U.S. LMR
Distribution Business; provided, however, that any
such accounts receivable which have been collected
by MIC prior to the date of the Closing shall not
be Acquired Assets hereunder but shall be set off
against Intek's obligation to reimburse MIC for
certain costs, all as set forth in Section 3.3(a)
of this Agreement.
(c) Subject to Sections 2.2 and 2.3, an assignment of
all of MIC's right, title and interest in or to
all of MIC's:
(1) written or oral supply agreements under
which MIC is the purchaser;
(2) quotations;
(3) dealer and distributor relationships;
(4) customer supply and support obligations;
(5) backlog orders; and
(6) other contracts, agreements, commitments or
undertakings, including, without limitation,
the purchase orders set forth on Schedule
2.3(a)(8) to this Agreement but excluding
the Performance Guarantees;
which are listed on Schedule 2.1(c) (collectively,
the "Contracts") which Contracts constitute all of
the material contracts of any nature (other than the
Performance Guarantees or contracts relating to the
use and acquisition of tooling) entered into by MIC
which relate principally to the U.S. LMR
Distribution Business or which are assets necessary
for the conduct of the U.S. LMR Distribution
Business. To the extent that MIC can provide Intek
with the benefits of nonassignable
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items pursuant to the third sentence of Section 2.2
of this Agreement, such benefits shall also
constitute "Acquired Assets."
(d) To the extent such information relates to the U.S.
LMR Distribution Business, all customer lists, the
sales history, warranty claims records, manuals,
non-proprietary books and records, and credit
information with respect to customers of the U.S. LMR
Distribution Business (collectively, the "Records").
(e) Certain other inventory, fixed assets, rights and
property related to the U.S. LMR Distribution
Business as listed on Schedule 2.1(e).
(f) All of MIC's right, title and interest in and to the
invention described in U.S. Patent #4,718,586 (Swivel
Fastening Device) which patent has expired for
nonpayment of maintenance fees.
(g) All of MIC's leasehold and other interests in the
real property leases listed on Schedule 2.1(g),
including, without limitation, any easements and
rights-of-way and any prepaid rent, security
deposits and options to renew or purchase under any
such leases.
(h) All U.S. telephone numbers used by MIC for the
U.S. LMR Distribution Business and keys for all
Acquired Assets where such exist.
(i) All of MIC's rights under or pursuant to all
warranties, representations, indemnities and
guarantees made by suppliers, manufacturers and
contractors in connection with the Acquired Assets
listed in Sections 2.1(c) and 2.1(e).
(j) All deferred and prepaid charges, sums, and fees of
MIC which relate solely to the Acquired Assets and/or
the operation of the U.S. LMR Distribution Business
as set forth on Schedule 2.1(j) ("Prepaid Expenses").
(k) All permits or authorizations issued by
Governmental Entities held or used by MIC solely
in connection with the operation of the U.S. LMR
Distribution Business (to the extent transfer
thereof is permitted by applicable law), including
without limitation all FCC Title III radio
licenses (the "FCC Licenses") and grantee codes,
type acceptances, certifications or other
equipment authorizations (the "Equipment
Authorizations") used by MIC exclusively in
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connection with the U.S. LMR Distribution
Business.
(l) As of October 16, 1996, all of MIC's right, title
and interest in and to the P. O. Boxes and the
Distribution Account (as such terms are defined in
Section 3.4(e) of this Agreement).
2.2 ASSIGNABILITY AND CONSENTS. Notwithstanding anything
in this Agreement to the contrary, this Agreement shall
not constitute an agreement to assign any order,
contract, agreement, lease, commitment, license,
franchise, authorization or concession, to the extent
that an attempted assignment thereof, without the
consent of another party thereto or of a Governmental
Entity would constitute a breach of any such order,
contract, agreement, lease, commitment, license,
franchise, authorization or concession. MIC shall use
its reasonable efforts, and Intek shall cooperate in
all reasonable respects with MIC, to obtain consent to
any such assignment or a novation of such contract
substituting Intek or MUSA for MIC. For any item for
which such consent or novation is not obtained, MIC
shall, for a period commencing on the Effective Date
and ending upon expiration of the current term of such
nonassignable item (without giving effect to any
extension thereof, whether automatic or otherwise) or,
if no expiration date is stated therein, thirteen
months after the Effective Date, provide to Intek the
benefit of any such nonassignable item, and MIC shall
pay to Intek all monies or other property received by
MIC under any such nonassignable item within five (5)
business days of MIC's receipt thereof, provided that
Intek makes all payments required to be made by MIC
pursuant to the terms of such nonassignable items and
that Intek performs or obtains performance of all
obligations required of MIC under such nonassignable
items, in advance of or at such time as such payment or
performance is required. At the end of period
described in the immediately preceding sentence, MIC
shall have no further duties or obligations hereunder
with respect to such nonassignable items and the
failure to obtain any necessary consent or waiver with
respect thereto shall not be a breach of any provision
of this Agreement. In the event that Intek or MUSA
performs its obligations under a nonassignable item,
Intek's may bring such action on behalf of MIC and in
MIC's name as shall be reasonably necessary to enforce
MIC's or Intek's rights under such nonassignable item;
PROVIDED, HOWEVER, that Intek shall bear all costs and
expenses of any kind whatsoever incurred by MIC in
connection with any such actions and PROVIDED FURTHER
that, notwithstanding anything to the contrary
contained herein, Intek shall indemnify and hold MIC
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harmless from and against any and all Damages incurred by MIC
directly or indirectly in connection with such actions.
2.3 ASSUMED LIABILITIES. Simultaneously with the execution
and delivery of this Agreement by the parties hereto,
and on the terms and subject to the conditions of this
Agreement, Intek hereby assumes, and agrees to pay,
perform and discharge, and promptly reimburse MIC for
any payments made by MIC with respect to, the Assumed
Liabilities.
(a) The "Assumed Liabilities" shall include only the
following liabilities and obligations of MIC, whether
primary or secondary, direct or indirect, absolute or
contingent:
(1) except as set forth under Section 2.3(a)(3)
below, all liabilities or obligations arising
on or after the Effective Date under or with
respect to any of the Acquired Assets or in
connection with the operation of the U.S. LMR
Distribution Business, including, without
limitation, all of MIC's liabilities arising
after the Effective Date under the Contracts,
but excluding (A) any liabilities or
obligations with respect to antennas sold by
MIC in connection with products other than
LMR Products and (B) any liabilities and
obligations of MIC for Taxes for taxable
periods ended on or before the Effective
Date, and (but only to the extent
attributable to the period ending at the
close of business on the Effective Date) for
taxable periods including the Effective
Date;
(2) all liabilities or obligations arising or
existing under any unfilled customer orders
included in the Acquired Assets;
(3) all liabilities and obligations with respect
to the Transferred Employees incurred or
accrued after the Effective Date and the
liabilities and obligations with respect to
vacation pay and sick leave for Transferred
Employees accrued as of the Effective Date
with respect to periods prior to the
Effective Date (as set forth on Schedule
2.3(a)(3). Except as set forth in the
immediately preceding sentence, Intek shall
not assume any obligations or liabilities of
MIC or Xxxxxxxx with respect to any
Transferred Employee or any other employee or
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former employee of MIC or employee benefit
plan maintained by MIC, including, but not
limited to, any liabilities or obligations
with respect to (A) any employee benefit
plan under ERISA or the Code (other than
with respect to claims incurred after the
Effective Date with respect to the health
and life insurance plans assumed by Intek
under the provisions of Section 7.3(a)), (B)
continuation requirements of Section 4980B
of the Code and Part 6 of Title I of ERISA
in respect of any MIC employee who does not
become a Transferred Employee; (C) any
severance plan, program, agreement or
arrangement or any other obligations
relating to the termination of employment
with MIC of any Transferred Employee or
other employee of MIC (whether or not
arising by reason of the transaction
contemplated by this Agreement); (D) any
deferred compensation plan, program,
agreement, arrangement or the like operated
by Xxxxxxxx, MIC or any subsidiary of parent
thereof in respect to any Transferred
Employee attributable to such employee's
employment with MIC on or prior to the
Effective Date and with respect to any other
employee or former employee of MIC whether
attributable to such employment before or
after the Effective Date; (E) any obligation
or liability with respect to workers'
compensation in respect of any Transferred
Employee attributable to such employee's
employment with MIC on or prior to the
Effective Date and with respect to any other
employee or former employee of MIC whether
attributable to such employment before or
after the Effective Date; and (F) any
obligation or liability with respect to an
inactive employee listed on Schedule 7.3(a)
prior to the date such employee accepts
employment with Intek in accordance with the
provisions of Section 7.3(a);
(4) all liabilities and obligations (including
fines and penalties) for death, personal
injury, other injury to persons, property
damage or losses or deprivation of rights
(A) resulting from, directly or indirectly,
use or exposure to any LMR Products sold
in the U.S. or (B) resulting from directly
or indirectly, any tort, breach of
contract or warranty, violation of any
statute, ordinance, regulation or other
governmental
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requirement in connection with the Acquired
Assets or the conduct of the U.S. LMR
Distribution Business (but excluding any
such liabilities or obligations with respect
to which, before the date of the Closing,
(x) MIC has received a written notice of a
claim, or (y) to the Knowledge of the
Executive Officers of MIC, a claim has been
asserted);
(5) all liabilities and obligations for breach of
product warranties for LMR Products
distributed by MIC in the conduct of the U.S.
LMR Distribution Business;
(6) all liabilities and obligations of MIC or any
Affiliate of MIC arising after the date of
the Closing under the U.S. Trademarks
licenses and sublicenses listed on Schedule
of this Agreement;
(7) all accounts payable arising on or after the
Effective Date in connection with the
operation of the U.S. LMR Distribution
Business;
(8) all of MIC's liabilities and obligations
existing as of August 1, 1996 or arising
thereafter with respect to any inventory
ordered by MIC in connection with the U.S.
LMR Distribution Business, including, without
limitation, MIC's obligation to repay Intek
the sum of $1,291,051 advanced by Intek
against Intek's purchase of the equipment
listed on the purchase orders set forth on
Schedule 2.3(a)(8);
(9) all obligations arising after the Effective
Date in connection with the U.S. LMR
Distribution Business, including payroll,
utilities, and Taxes, but excluding income,
franchise or gains taxes incurred by MIC or
Xxxxxxxx in connection with the transactions
contemplated hereby; and
(10) all of MIC's liabilities and obligations
existing as of August 1, 1996 or arising
thereafter in connection with MIC's dealer
advertising allowance program as set forth
on Schedule 2.3(a)(10).
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3. CONSIDERATION
-------------
3.1 PURCHASE PRICE.
(a) PAYMENT. In consideration of MIC's sale of the
Acquired Assets to Intek, at the Closing Intek
shall
(1) issue to MIC certificate(s) evidencing
150,000 fully paid, nonassessable shares of
Common Stock free and clear of all liens and
encumbrances; and
(2) issue and deliver to the Escrow Agent, as
escrow agent, certificate(s) evidencing
2,350,000 shares of Common Stock, pursuant
to the terms of the Escrow Agreement; and
(3) assume the Assumed Liabilities as provided in
Section 2.3 of this Agreement; and
(4) pay cash to MIC in the amount of $2,301,280
and forgive MIC's obligation to provide Intek
with inventory under certain purchase orders
prepaid by Intek in the amount of $492,471 in
full consideration for the fixed assets and
inventory listed on Schedule 2.1(e) to this
Agreement and the Prepaid Expenses; and
(5) pay cash to MIC in the amount of $323,495
which amount is the estimated amount of
post-Effective Date operating expenses of
the U.S. LMR Distribution Business from
August 1, 1996 through the date of the
Closing, to be reimbursed to MIC as provided
in Section 3.3;
(6) pay cash to MIC in the amount of $300,000
(which amount is to reimburse MIC for
$200,000 advanced by MIC after August 1, 1996
against purchase orders being acquired by
Intek pursuant to the terms of this
Agreement, and $100,000, which amount
represents the parties best estimate as of
closing of the portion of the Hitachi Credit
allocable to MIC pursuant to Section 3.5).
(b) Adjustments to the Purchase Price.
(1) Adjustments for Customer Deposits at Closing.
At the Closing, the Purchase Price shall be
reduced by the amount of any customer
deposits for services and equipment not
performed prior to the Effective Date by MIC
to the extent that Intek, or its assigns,
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assume the obligations directly related to
such customer deposits. This Purchase Price
adjustment shall be effected by MIC's
delivery, or release from consignment, to
Intek of inventory appropriate for
application to such customer obligations and
having an aggregate value (as determined
pursuant to the Consignment Agreement) equal
to the aggregate amount of all such customer
deposits.
(2) POST CLOSING ADJUSTMENT TO PURCHASE
PRICE/CONSUMMATION OF SECURICOR TRANSACTION.
If the transactions contemplated in the
Securicor Agreement are consummated, or, if
the Securicor Agreement is terminated by
either party in accordance with its terms and
within six months after such termination (the
"Standstill Period"), Securicor and Intek, or
their respective Affiliates, engage in, or
enter into agreements to engage in, one or
more transactions which collectively would
effectively transfer a controlling interest
in Intek to Securicor or any Affiliate of
Securicor, then the Purchase Price shall be
adjusted as follows:
(A) The Purchase Price shall be
increased by 2,350,000 shares of
Common Stock, payable to MIC
immediately upon closing of such
transactions out of the shares of
Common Stock deposited by Intek into
escrow pursuant to Section of this
Agreement; and
(B) The Purchase Price shall be reduced by
the Net Operating Losses, if any, of the
U.S. LMR Distribution Business as
conducted by Intek or its assignee for
the period commencing on August 1, 1996
and ending on the date on which the
transactions contemplated in the
Securicor Agreement are consummated;
PROVIDED HOWEVER, that such adjustment
shall not exceed $833,125 and PROVIDED
FURTHER that such adjustment shall be
effectuated solely by MIC's return to
Intek of such number of shares of Common
Stock as shall be equal to the lesser of
(X) the quotient of Net Operating Losses
divided by $5.375 and (Y) 155,000 Common
Shares.
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(C) In addition to the foregoing, upon
consummation of the Securicor
Transaction, Intek shall cause to be
executed and delivered to MIC and
Xxxxxxxx the Registration Rights
Agreement, duly executed and delivered
by each party thereto other than MIC and
Xxxxxxxx.
3.2 TRANSFER TAXES. Intek shall pay the cost of all Taxes and
expenses, if any, and all other charges of any Governmental
Entity applicable to the transactions contemplated by this
Agreement, other than income, franchise or gains taxes
incurred by MIC or Xxxxxxxx in connection with the
transactions contemplated hereby.
3.3 REIMBURSEMENT OF OPERATING EXPENSES PAID AFTER THE EFFECTIVE
DATE. Intek shall reimburse MIC for all expenses and costs
paid by MIC in the conduct of the U.S. LMR Distribution
Business during the period commencing on the Effective Date
and continuing through the Closing as follows:
(a) At the Closing Intek shall pay cash to MIC in an
amount equal to $323,495 which amount the parties
agree represents is their best estimate of the
amounts actually paid by MIC in the conduct of the
U.S. LMR Distribution Business during the period
commencing on the Effective Date and ending on the
date of the Closing, as more fully described on
Schedule 3.3 to this Agreement (the "Reimbursement
Schedule") after deducting all cash collected by
MIC prior to the date of the Closing with respect
to accounts receivable generated on or after
August 1, 1996 out of the operations of the U.S.
LMR Distribution Business.
(b) Within thirty (30) days after the Closing MIC
shall deliver to Intek a revised Reimbursement
Schedule setting forth such amounts as shall have
actually been paid by MIC in the conduct of the
U.S. LMR Distribution Business for the period
commencing on August 1, 1996 and ending on the
date of the Closing together with such supporting
documentation as Intek shall reasonably request
and, if the amount set forth on the revised
Reimbursement Schedule is less than $323,495, cash
in an amount equal to the difference. The revised
Reimbursement Schedule shall be deemed to be true
and correct for the purpose of determining the
amount payable to MIC by Intek under this Section
3.3(b) to the extent that Intek does not provide
specific written objections within ten (10)
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business days after Intek's receipt of the revised
Reimbursement Schedule.
(c) Within ten (10) business days after Intek's
receipt of the revised Reimbursement Schedule,
Intek shall pay cash to MIC equal to the amount of
expenses set forth on the revised Reimbursement
Schedule to the extent such expenses exceed
$323,495, to the extent that Intek has not
provided specific written objections as set forth
above.
(d) The MIC Representative and Intek Representative
shall meet within five business days of either
party's request therefore and use their reasonable
best efforts to amicably resolve any disputes
raised by Intek or MIC with respect to amounts to
be reimbursed under the revised Reimbursement
Schedule. Intek, or MIC, as the case may be,
shall immediately pay any amount determined to be
owing to the other as mutually agreed upon by the
MIC Representative and the Intek Representative.
In the event that the MIC Representative and the
Intek Representative are unable to reach an
agreement with respect to any such dispute, then
the matter shall be submitted to binding
arbitration in accordance with the provisions of
Section 14.13 of this Agreement.
3.4 COLLECTIONS OF ACCOUNTS RECEIVABLE.
(a) If all or part of any payment received by Intek or
any Affiliate of Intek relates exclusively to an
account receivable arising prior to the Effective
Date, such payment shall be held in trust for MIC
and shall not be commingled with any other assets
of Intek or such Affiliate. Intek shall
immediately deliver to MIC, or cause its Affiliate
to immediately deliver to MIC, such payment in the
form received together with such endorsements as
shall be necessary for MIC to deposit and collect
such payment.
(b) If all or part of any payment received by MIC,
Xxxxxxxx or any Affiliate thereof relates
exclusively to an account receivable arising after
the Effective Date, such payment shall be held in
trust for Intek and shall not be commingled with
any other assets of MIC, Xxxxxxxx or such
Affiliate. MIC and Xxxxxxxx shall immediately
deliver to Intek, or cause its Affiliate to
immediately deliver to Intek, such payment in the
form received together with such endorsements as
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shall be necessary for Intek to deposit and
collect such payment.
(c) If a payment is received which relates to accounts
receivables arising both before and after the
Effective Date, the recipient thereof shall
immediately pay to the other party cash in an amount
equal to that portion of the payment which is
specifically identified to a receivable or
receivables owned by such other party.
(d) If a customer's payment does not specifically
identify an invoice, or MUSA is unable to identify
the invoice to which such receivable should be
applied with reasonable certainty, MUSA shall
contact the customer directly and request that the
customer identify the invoice to which such
receivable should be applied. The recipient shall
promptly thereafter pay to the other party cash in
an amount equal to that portion of the payment
which was so identified to a receivable or
receivables owned by such other party.
(e) To facilitate the collection of receivables
pursuant to this Section 3.4, MIC and Intek shall
not, and Intek shall not permit MUSA to, change
the payment instructions to customers of the U.S.
LMR Distribution Business during the 90 day period
commencing on the date of the Closing. On October
16, 1996, MIC shall convey to MUSA all of MUSA's
right, title and interest into post office boxes
X.X. Xxx 000, Xxxx. 000, Xxxxxx Xxxx XX 00000-
0505, X.X. Xxx 000, Xxxx. 000, Xxxxxx Xxxx XX
00000-0000 (the "P.O. Boxes") and bank account
number 010161070176 titled to MIC at Boatmen's
First National Bank of Kansas City (the
"Distribution Account"). On each Business Day
during the period beginning on the date hereof and
continuing until March 31, 1997, each party's
representative (designated and granted appropriate
powers of attorney as provided in Section 3.5(f)
of this Agreement) will review the collections
received in the P.O. Boxes or otherwise deposited
into the Distribution Account and will allocate
such payments in accordance with Sections 3.4(a)
through 3.4(d) of this Agreement.
(f) Intek hereby appoints Xxxxxx Xxxxxxxxx to act as its
designated representative under Section 3.4(e) of
this Agreement. MIC hereby appoints Xxxxxx Xxxxxxxx
to act as its designated representative under
Section 3.4(e) of this Agreement. Each party will
grant its designated representative with the limited
power of attorney as shall be
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necessary to perform the obligations set forth in
this Section 3.4 (including, without limitation, the
power to endorse and deposit customer checks made
payable to such party). A party may replace its
designated representative by a writing to the other
party appointing a new designated representative. In
addition to the representatives designated by MIC and
Intek, Xxxxxxxx shall have the right to have Xxxxxx
Xxxxxx, or such other person as Xxxxxxxx shall
designate in writing, observe the review process on
behalf of Xxxxxxxx, and Securicor shall have the
right to have Xxxx Xxxxxxxx, or such other person as
Securicor shall designate in writing, observe the
review process.
(g) Each party shall have thirty (30) days to provide
the other with written objections to the
allocation of any payments received under this
Section 3.4, such thirty (30) day period to
commence upon such parties receipt of notice of
the allocation and reasonable documentation
evidencing such allocation. The MIC
Representative and the Intek Representative shall
meet within five business days of either party's
request therefore and use their reasonable best
efforts to amicably resolve any disputes raised by
Intek with respect to the revised Reimbursement
Schedule. Intek shall pay any amount thus
determined to be owing to MIC, and MIC shall pay
any amount thus determined to be owing to Intek,
as mutually agreed upon by the MIC Representative
and the Intek Representative. In the event that
the MIC Representative and the Intek
Representative are unable to reach an agreement
with respect to any such dispute, then the matter
shall be submitted to binding arbitration in
accordance with the provisions of Section of
this Agreement.
3.5 HITACHI CREDIT ALLOCATION. The parties acknowledge
that as of the Effective Date, Hitachi Denshi, Ltd. has
provided certain credits (price deductions) of
approximately $200,000 (the "Hitachi Credits")
allocable among purchase orders and inventory which are
Acquired Assets (the "Intek Credits") and purchase
orders and inventory which are retained by MIC (the
"MIC Credits"). The parties have estimated that
approximately $100,000 of the Hitachi Credits are MIC
Credits and accordingly have provided for Intek to make
an initial payment of $100,000 to MIC at the Closing
(as provided in Section 3.1(a)(6)). MIC and Intek
shall use their best efforts to accurately allocate the
Hitachi Credits between the MIC Credits and Intek
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Credits. If MIC and Intek are unable to reach agreement on
this matter within thirty (30) days after the Closing, than
the MIC Representative and the Intek Representative shall meet
within five days after the request of either of MIC or Intek
to resolve the matter. If it is determined that the amount of
the MIC Credits exceed $100,000, then within five (5) days of
such determination Intek shall pay cash to MIC in the amount
of such excess. If it is determined that the amount of the
Intek Credits exceed $100,000, then within five (5) days of
such determination MIC shall pay cash to Intek in the amount
of such excess.
4. CLOSING.
--------
4.1 CLOSING. On the terms and subject to the conditions
set forth in this Agreement, the closing of the
transaction contemplated hereby (the "Closing") shall
take place simultaneously with the execution and
delivery of this Agreement at 10:00 a.m., eastern
standard time, at the offices of Xxxxx, Day, Xxxxxx &
Xxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, X.X. 00000,
effective as of the Effective Date when all of the
deliveries contemplated in Sections 4.2 and 4.3 have
been made or otherwise waived by the parties in
writing.
4.2 DELIVERIES AT CLOSING BY XXXXXXXX AND MIC. Simultaneously with
the execution and delivery of this Agreement, Xxxxxxxx and MIC
shall execute and deliver or cause to be executed and
delivered by a duly authorized representative of Xxxxxxxx or
MIC, as the case may be, to Intek, each of the following
documents:
(a) this Agreement;
(b) the Escrow Agreement;
(c) a duly executed Assignment of United States
Trademark Rights, assigning the U.S. Trademarks to
Intek or its assignee pursuant to the terms
hereof, in the form attached hereto as EXHIBIT G;
(d) the U.S. Trademarks License;
(e) such bills of sale, assignments, quit claim deeds and
other good and sufficient instruments of transfer
conveying to Intek or its assigns MIC's entire right,
title and interest in and to the Acquired Assets
except as otherwise provided under Section 2.2 of
this Agreement;
(f) the Computer Services Agreement;
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(g) the Product Purchasing Services Agreement;
(h) the opinion of Xxxxx, Day, Xxxxxx & Xxxxx, counsel
to MIC, dated the date of the Closing and in the
form attached hereto as EXHIBIT H; and
(i) MIC/Xxxxxxxx Officers' Certificates.
4.3 DELIVERIES AT CLOSING BY INTEK. Simultaneously with the
execution and delivery of this Agreement, Intek shall execute
and deliver, or cause to be executed and delivered to Xxxxxxxx
and/or MIC, as the case may be, each of the following
documents:
(a) this Agreement;
(b) certificates evidencing 150,000 shares of Common
Stock in payment of the Purchase Price pursuant to
Section 3.1(a)(1) of this Agreement;
(c) the Escrow Agreement;
(d) Certificates evidencing 2,350,000 shares of Common
Stock, delivered to the Escrow Agent pursuant to
the terms of the Escrow Agreement;
(e) the U.S. Trademarks License Agreement duly
executed and delivered by Intek or Intek's
assignee of the U.S. Trademarks;
(f) such instruments of assumption of the Assumed
Liabilities, duly executed by Intek and or its
assignee of the Acquired Assets, as the case may
be, all as MIC may reasonably request;
(g) the Computer Services Agreement duly executed and
delivered by Intek;
(h) the Product Purchase Services Agreement duly
executed and delivered by Intek;
(i) the opinion of Xxxxxxx, Xxxxxxx & Xxxxxx L.P.A.,
counsel to Intek and MUSA, dated the date of the
Closing and in the form attached hereto as
EXHIBIT I;
(j) the Intek Officer's Certificate; and
(k) a copy of the fairness opinion, or opinions,
delivered in writing by Xxxxxxxxxx & Co. Inc. that
the consideration to be paid under this Agreement
and under the Securicor Agreement is fair to the
stockholders of Intek.
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5. CONDITIONS PRECEDENT
5.1 CONDITIONS PRECEDENT TO INTEK'S OBLIGATIONS. The obligations
of Intek to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, prior to or at the
Closing, of each of the following conditions (any one or more
of which may be waived in whole or in part by Intek):
(a) MIC/XXXXXXXX OFFICERS' CERTIFICATES. (i) Each of
the representations and warranties of MIC and
Xxxxxxxx contained in this Agreement shall be
true, complete and correct in all material
respects on and as of the Closing, and (ii) MIC
shall have performed or complied with, in all
material respects, all covenants and agreements
contemplated by this Agreement to be performed or
complied with by MIC at or prior to the Closing
and (iii) MIC and Xxxxxxxx shall have delivered to
Intek certificates of MIC's and Xxxxxxxx
respective Chief Financial Officer or Secretary
(collectively the "MIC/Xxxxxxxx Officers'
Certificates") certifying to the accuracy of items
(i) and (ii) above, or if MIC's Chief Financial
Officer shall be unable to certify the accuracy of
(i) and (ii) above, then he shall set forth in the
MIC/Xxxxxxxx Officers' Certificates (x) the manner
in which any of the representations and warranties
of MIC and Xxxxxxxx contained herein shall not be
true, complete and correct in all material
respects, and (y) each failure by MIC and/or
Xxxxxxxx to perform or comply with, in all
material respects, any covenant or agreement
contemplated by this Agreement to be performed or
complied with by MIC and/or Xxxxxxxx at or prior
to the Closing. If Intek elects to consummate the
transactions contemplated under this Agreement
after delivery of such MIC/Xxxxxxxx Officers'
Certificates, the items set forth in the
MIC/Xxxxxxxx Officers' Certificates shall not
constitute a breach of this Agreement and Intek
shall not be entitled to any indemnity therefor.
(b) NO MATERIAL ADVERSE CHANGE. Since the date
hereof, there shall not have been any Material
Adverse Change in the U.S. LMR Distribution
Business.
(c) BOARD RATIFICATION. On or prior to the Closing,
Intek's Board of Directors shall have ratified and
reaffirmed the actions and determinations of the
Special Committee of the Board of Directors of
Intek referenced in this Agreement, including,
without limitation, (i) the determination that the
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transaction contemplated by this Agreement and the
Securicor Agreement is advisable and in the best
interests of Intek and its stockholders, (iii) the
approval of this Agreement and the Securicor
Agreement and, subject to the fulfillment or waiver
at or prior to the Closing Date of the conditions set
forth in Section 5.1, the transactions contemplated
hereby and by the Securicor Agreement and (iii) all
other action required to be taken to authorize the
issuance of the additional shares of Common Stock and
to submit for consideration by the stockholders of
Intek an amendment of the certificate of
incorporation of Intek to authorize additional shares
of Common Stock.
(d) DELIVERIES. Each of the Deliveries to be made by
MIC or Xxxxxxxx to Intek pursuant to Section 4.2
of this Agreement shall have been made.
(e) CONSENTS, PERMITS AND GOVERNMENTAL APPROVALS. All
consents, waivers, permits, authorizations and
approvals (other than approvals to the assignment
of Contracts with Governmental Entities) required
to be obtained by MIC from any third party or any
Governmental Entity prior to the Closing
(excluding such consents, waivers, permits,
authorizations and approvals the failure to obtain
which, individually or in the aggregate, will not
have a Material Adverse Effect on the U.S. LMR
Distribution Business or on MIC's ability to
consummate the transactions and receive the
benefits contemplated hereby) shall have been
received.
5.2 CONDITIONS PRECEDENT TO MIC'S OBLIGATIONS. The obligations of
MIC to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, prior to or at the
Closing, of each of the following conditions (any one or more
of which may be waived in whole or in part by MIC):
(a) SECURICOR LOAN AGREEMENT. Securicor and MUSA
shall have entered into the Securicor Loan
Agreement.
(b) INTEK OFFICER'S CERTIFICATE. (i) Each of the
representations and warranties of Intek contained
in this Agreement shall be true, complete and
correct in all material respects on and as of the
Closing; (ii) Intek shall have performed or
complied with, in all material respects, all
covenants and agreements contemplated by this
Agreement to be performed or complied with by
Intek at or prior to the Closing; and (iii) Intek
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shall have delivered to MIC a certificate of Intek's
Chief Financial Officer (the "Intek Officer's
Certificate") certifying as to the accuracy of items
(i) and (ii) above, or if Intek's Chief Financial
Officer shall be unable to certify the accuracy of
(i) and (ii) above, then he shall set forth in the
Intek Officer's Certificate (x) the manner in which
any of the representations and warranties of Intek
contained herein shall not be true, complete and
correct in all material respects, and (y) each
failure by Intek to perform or comply with, in all
material respects, any covenant or agreement
contemplated by this Agreement to be performed or
complied with by Intek at or prior to the Closing. If
MIC elects to consummate the transaction contemplated
under this Agreement after delivery of such Intek
Officer's Certificate, the items set forth in the
Intek Officer's Certificate shall not constitute a
breach of this Agreement and MIC shall not be
entitled to any indemnity therefor.
(c) NO MATERIAL ADVERSE CHANGE. Since the date
hereof, there shall not have been any Material
Adverse Change in the financial condition, results
of operation or business of Intek.
(d) CAPITALIZATION. Since the date hereof, Intek
shall not have issued any interest in its equity
securities, except with the consent of Xx Xxxxx,
Xxxx Xxxxxxxx and Xxxxxxxx Xxxxxx, except for
Intek's issuance of a $2.5 million convertible
debentures or any shares of Common Stock relating
thereto, the 30,000 shares of Common Stock issued
in connection with the extension of the term of
the $2.5 million convertible debentures, or up to
1,000,000 shares of Common Stock in an equity
offering.
(e) DELIVERIES. Each of the Deliveries to be made by
Intek to MIC or Xxxxxxxx pursuant to Section 4.3
of this Agreement shall have been made.
(f) CONSENTS, PERMITS AND GOVERNMENTAL APPROVALS. All
consents, waivers, permits, authorization and
approvals required to be obtained by Intek from
any third party or Governmental Entity prior to
the Closing (excluding such consents, waivers,
permits, authorizations and approvals the failure
to obtain which, individually or in the aggregate,
will not have a Material Adverse Effect on Intek's
ability to consummate the transactions and receive
the benefits contemplated hereby) shall have been
received.
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(g) INSTRUMENTS OF ASSUMPTION. Intek shall have
delivered to MIC such instruments of assumption of
the Assumed Liabilities as MIC may reasonably
request.
6. REPRESENTATIONS AND WARRANTIES
------------------------------
6.1 REPRESENTATIONS AND WARRANTIES OF MIC AND XXXXXXXX.
MIC and Xxxxxxxx jointly and severally represent and
warrant to Intek that:
(a) ORGANIZATION, STANDING, POWER AND AUTHORITY. MIC
is a corporation duly organized, validly existing
and in good standing under the laws of the State
of Delaware. MIC has all requisite corporate
power and authority to operate the U.S. LMR
Distribution Business as it is now conducted, and
to enter and perform its obligations under this
Agreement and each other agreement, document,
instrument or certificate contemplated by this
Agreement or to be executed by MIC in connection
with the consummation of the transactions
contemplated by this Agreement (together with this
Agreement, the "MIC Documents"). MIC is duly
qualified or authorized to do business as a
foreign corporation and is in good standing under
the laws of each jurisdiction in which it owns or
leases real property and each other jurisdiction
in which the conduct of the U.S. LMR Distribution
Business or the ownership of its properties
requires such qualification (all of which
jurisdictions are listed on Schedule 6.1(a) of the
MIC Disclosure Schedules), except where the
failure to be so qualified or authorized could not
reasonably be expected to have a Material Adverse
Effect on the U.S. LMR Distribution Business or
the Acquired Assets. Except as set forth on
Schedule 6.1(a) of the MIC Disclosure Schedules,
neither MIC nor any of its Affiliates is subject
to any agreement, commitment or understanding
which restricts or may restrict the conduct of the
U.S. LMR Distribution Business in the U.S. in any
material respect. The execution and delivery of
this Agreement, the consummation of the
transactions contemplated hereby have been, and
prior to the Closing the execution of the other
MIC Documents and the consummation of the
transactions contemplated therein will be, duly
approved by the Board of Directors of MIC and no
other corporate proceedings on the part of MIC are
necessary to authorize this Agreement or to
consummate the transactions so contemplated. This
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Agreement has been, and prior to the Closing each of
the other MIC Documents will be, duly executed and
delivered by, and constitutes, or will constitute, a
valid and binding obligation of MIC, enforceable
against MIC in accordance with its terms, except as
enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the enforcement of
creditors' rights generally and except that the
availability of the equitable remedy of specific
performance or injunctive relief is subject to the
discretion of the court before which any proceedings
may be brought (the "Bankruptcy Exception").
(b) BUSINESS IN ORDINARY COURSE. Except as set forth
in Schedule 6.1(b) of the MIC Disclosure
Schedules, since March 7, 1996 MIC has conducted
the U.S. LMR Distribution Business only in the
ordinary course of business consistent with past
practice. Since March 7, 1996, there has been no
Material Adverse Change in the U.S. LMR
Distribution Business, nor has any event occurred,
nor has any condition or state of facts arisen,
which has not been disclosed to Intek and could,
to the Knowledge of the Executive Officers of MIC,
reasonably be expected to be have a Material
Adverse Effect on the U.S. LMR Distribution
Business. Except as set forth on Schedule 6.1(b)
of the MIC Disclosure Schedules, since March 7,
1996:
(1) MIC has not materially amended, canceled,
terminated, relinquished, waived or released
any Contract, right, debt, claim or
obligation that otherwise would have been
included as part of the Acquired Assets
except in the ordinary course of business
consistent with past practice of MIC;
(2) MIC has not received any notice or citation
for any violation of, nor, to the Knowledge
of the Executive Officers of MIC, has any
complaint been filed with the FCC alleging a
violation of, any rule, regulation or policy
of the FCC, and MIC has not allowed any
equipment authorization issued by the FCC to
MIC to lapse or be impaired in any manner or,
to the Knowledge of the Executive Officers of
MIC, operated the U.S. LMR Distribution
Business in any manner not in compliance with
its FCC equipment authorizations and all
applicable FCC rules, regulations and
policies; and
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(3) MIC has not agreed to do any of the
foregoing.
(c) CONTRACTS. MIC and its Affiliates have made
available or delivered to Intek true, correct and
complete copies of all written Contracts listed on
Schedule 2.1(c) of the MIC Disclosure Schedules.
The Contracts constitute all of the material
contracts of any nature whatsoever entered into by
MIC that relate principally to the U.S. LMR
Distribution Business. To the Knowledge of the
Executive Officers of MIC, each Contract is valid
and enforceable in accordance with its terms,
subject to the Bankruptcy Exception. MIC has not
amended or modified, other than in the ordinary
course of business, in any material respect or
consented to the termination of any Contract other
than as contemplated under this Agreement. Except
as set forth on Schedule 6.1(c) of the MIC
Disclosure Schedules, to the Knowledge of the
Executive Officers of MIC, MIC has performed in
all material respects all obligations required to
be performed by it to date under the Contracts,
and neither MIC nor, to the Knowledge of the
Executive Officers of MIC, any other party to any
Contract has breached or improperly terminated any
Contract, or is in material default under any
Contract, and, to the Knowledge of the Executive
Officers of MIC, there exists no condition or
event which after notice or lapse of time or both,
would constitute any such breach, termination or
default. To the Knowledge of the Executive
Officers of MIC, no previous or current party to
any material Contract has given notice of or made
a claim with respect to any breach or default
thereunder, the consequences of which individually
or in the aggregate, could reasonably be expected
to have a Material Adverse Effect on the U.S. LMR
Distribution Business or the Acquired Assets.
Except as set forth in Schedule 6.1(d) of the MIC
Disclosure Schedules and subject to Section 2.2
hereof, no Contract requires the consent from, or
delivery of notice to, any person in connection
with the transactions contemplated hereby and the
rights of MIC under the Contracts are assignable
to Intek (without being subject to any rights of
termination or modification as a result of the
transactions contemplated by this Agreement) and
upon assignment as provided herein Intek shall be
entitled to the full right, title and benefit
under each Contract.
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(d) CONSENTS AND APPROVALS; NO VIOLATION. Neither the
execution and delivery of this Agreement or the
other MIC Documents nor the performance by MIC of
the transactions contemplated hereby or thereby
conflicts with or results in any breach of any
provision of MIC's certificate of incorporation or
by-laws, except as set forth on Schedule 6.1(d)
of the MIC Disclosure Schedules, violates,
conflicts with, constitutes a material breach or
default (or an event which, with notice or lapse
of time or both, would constitute a material
breach or default) under, or results in or gives
rise to a right of termination of, or accelerates
the performance required by, or results in the
creation of any lien or other encumbrance upon any
of the Acquired Assets or the properties of the
U.S. LMR Distribution Business under any of the
terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license,
lease, contract, agreement, or other obligation or
instrument to which MIC is a party or by which the
Acquired Assets or the U.S. LMR Distribution
Business is bound, which, individually or in the
aggregate, would have a Material Adverse Effect on
the Acquired Assets or the U.S. LMR Distribution
Business, require any consent, approval,
authorization or permit of or from, or filing with
or notification to, any court, governmental
authority or other regulatory or administrative
agency or commission, domestic or foreign
("Governmental Entity"), or other third party
except (A) filings required under the Xxxx-Xxxxx-
Xxxxxx Act (B) consents, approvals,
authorizations, permits, filings or notifications
which, if not obtained or made would not,
individually or in the aggregate, have a Material
Adverse Effect on the Acquired Assets or the U.S.
LMR Distribution Business or would materially
delay or impair the ability of MIC to consummate
the transactions contemplated hereby, or (C) third
party consents, approvals, authorizations,
permits, filings or notifications which if not
obtained or made would not, individually or in the
aggregate, have a Material Adverse Effect on the
Acquired Assets or the U.S. LMR Distribution
Business, or violates any statute, rule,
regulation, order or decree of any Governmental
Entity by which MIC or any of its assets is bound.
(e) ACQUIRED ASSETS. Except as set forth in
Schedule 6.1(e) of the MIC Disclosure Schedules,
MIC has good and marketable title to and owns the
Acquired Assets, free and clear of all liens and
claims of any kind or nature whatsoever. Except
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as disclosed on Schedule 6.1(e) of the MIC Disclosure
Schedules, none of such Acquired Assets are subject
to, or held under, any lease, mortgage, security
agreement, conditional sales contract or other title
retention agreement, or are other than in the sole
possession and under the sole control of MIC. Except
as set forth on Schedule 6.1(e) of the MIC Disclosure
Schedules, the delivery by MIC, at the Closing, to
MUSA as instructed by Intek pursuant to the terms of
the Intek Assignment and Assumption Agreement of the
Xxxx of Sale to be included among the MIC Documents
and the other instruments of transfer will vest MUSA,
as Intek's assignee, as of the date hereof, with good
and marketable title to all of the Acquired Assets,
free and clear of all liens and claims whatsoever,
except those liens created, imposed or granted by
Intek, MUSA or any Affiliate of Intek or MUSA.
(f) INTANGIBLE PROPERTY. Except as set forth on
Schedule 6.1(f) of the MIC Disclosure Schedules,
MIC has good and lawful title, free and clear of
any liens or other encumbrances, to the U.S.
Trademarks and any and all patent, copyrights, and
know-how transferred under this Agreement
(collectively, "Intangible Property"); to the
knowledge of the Executive Officers of MIC, the
Intangible Property is valid and subsisting and is
enforceable in whole or in part in the U.S.; to
the Knowledge of the Executive Officers of MIC
there are no actual or threatened claims by third
parties regarding the Intangible Property; to the
Knowledge of the Executive Officers of MIC the
Intangible Property does not infringe or otherwise
violate any rights of any third party; no third
party has been given the right or license to use
the Intangible Property in connection with the
sale or distribution of LMR Products in the U.S.;
and to the Knowledge of the Executive Officers of
MIC, no rights, licenses, or permissions of any
Person are used or needed to conduct the U.S. LMR
Distribution Business.
(g) BROKERS, FINDERS AND AGENTS. No Person has acted,
directly or indirectly, as a broker, finder or
financial advisor for MIC or its Affiliates in
connection with the transactions contemplated by this
Agreement, and no Person is entitled to any fee or
commission or like payment in respect thereof.
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(h) EMPLOYEE BENEFIT PLANS.
(1) Except for the Midland International
Corporation Employees' Profit Sharing Thrift
Plan, no "employee pension plan", as defined
in Section 3(2) of ERISA (a "Pension Plan"),
is maintained by MIC, Xxxxxxxx or any
subsidiary or parent thereof or any trade or
business (whether or not incorporated) which
are under control, or which are treated as a
single employer with MIC, Xxxxxxxx or any
subsidiary or parent thereof under Section
414(b), (c), (m) or (o) of the Code ("ERISA
Affiliate"), or to which MIC, Xxxxxxxx, or
any subsidiary or parent thereof or any ERISA
Affiliate contributed or are obligated to
contribute. None of the Pension Plans is a
"defined benefit plan" as defined in Section
3(35) of ERISA, is a "multiemployer plan" or
is or has been subject to Sections 4063 or
4064 of ERISA; and, since January 1, 1990,
none of MIC, Xxxxxxxx or any subsidiary or
any parent thereof or any ERISA Affiliate has
contributed, or been obligated to contribute,
to a multiemployer plan.
(2) With respect to the Transferred Employees,
MIC has complied with the notice and
continuation requirements of Section 4980B
of the Code and Part 6 of Title I of ERISA
and the applicable regulations thereunder.
(3) Each "employee benefit plan," as defined in
Section 3(3) of ERISA (an "Employee Benefit
Plan") maintained by MIC is in material
compliance with all applicable laws including
ERISA and the Code. Except as set forth on
Schedule 6.1(h)(3), No condition exists that
is reasonably expected to subject MIC to a
material civil penalty under Section 502(i)
of ERISA or material liability under Section
4069 of ERISA or Section 4795 of the Code or
other material liability with respect to any
Employee Benefit Plan. There is no material
violation of ERISA with respect to the
furnishing of applicable reports, documents
and notices regarding the Employee Benefit
Plans to the Transferred Employees. Each
Employee Benefit Plan that is required to
file a Form 5500 with the Internal Revenue
Service has timely done so with respect to
each of the last three completed plan years.
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(i) LITIGATION, PRODUCT LIABILITY. As of the date
hereof, there is no litigation, suit, proceeding,
action, claim or investigation ("Legal
Proceeding") pending, or to the Knowledge of the
Executive Officers of MIC, threatened, that
questions the validity of this Agreement, the MIC
Documents or any action taken or to be taken by
MIC in connection with the consummation of the
transactions contemplated hereby or thereby.
Except as set forth on Schedule 6.1(i) of the MIC
Disclosure Schedules, there is no Legal Proceeding
pending or, to the Knowledge of the Executive
Officers of MIC, threatened against MIC with
respect to the U.S. LMR Distribution Business or
the Acquired Assets (including, without
limitation, any claims in respect of any
warranties of MIC). MIC is not subject to any
outstanding judgment, decree or order entered in
any Legal Proceeding affecting or naming MIC or
affecting the U.S. LMR Distribution Business or
the Acquired Assets, and to the Knowledge of the
Executive Officers of MIC, no such judgment, order
or decree has been threatened. To the Knowledge
of the Executive Officers of MIC, there is no
basis for any Legal Proceeding against MIC with
respect to the U.S. LMR Distribution Business or
the Acquired Assets.
(j) SUPPLIERS AND CUSTOMERS. Schedule 6.1(j) of the
MIC Disclosure Schedules lists the three largest
suppliers and ten largest customers of the U.S.
LMR Distribution Business in the U.S. during the
period commencing on May 1, 1995 and ending on
June 30, 1996. Except as set forth on Schedule
6.1(j) of the MIC Disclosure Schedules, no supplier
which is material to the U.S. LMR Distribution
Business or customer which is material to the U.S.
LMR Distribution Business has canceled or otherwise
terminated, or, to the Knowledge of the Executive
Officers of MIC, threatened to cancel or otherwise
terminate, its relationship with MIC or has during
the last 12 months decreased materially, or, to the
Knowledge of the Executive Officers of MIC,
threatened to decrease or limit its services,
supplies or materials to MIC or its usage or
purchase of services or products of MIC. To the
Knowledge of the Executive Officers of MIC, no such
supplier or customer intends to cancel or otherwise
modify its relationship with MIC or to decrease
materially or limit its services, supplies or
materials to MIC or its usage or purchase of
services or products of the U.S. LMR Distribution
Business, and the contemplated transactions
will not materially
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adversely affect the relationship of the U.S. LMR
Distribution Business with any such supplier or
customer.
(k) INFORMATION IN DISCLOSURE DOCUMENTS. To the
Knowledge of the Executive Officers of MIC, the
information with respect to MIC and its Affiliates
provided by MIC for inclusion in the Proxy
Statement will not, at the time of the mailing of
the Proxy Statement and any amendments or
supplements thereto, and at the time of the Intek
Stockholders' Meeting, contain any untrue
statement of a material fact or omit to state any
material fact required to be stated therein or
necessary in order to make the statements therein,
in light of the circumstances under which they are
made, not misleading.
(l) FINANCIAL STATEMENTS. MIC has delivered to Intek
true, correct and complete copies of the (A)
audited consolidated balance sheet of MIC as at
December 31, 1995 and the related audited
statements of income and of changes in financial
position or of cash flows, whichever is
applicable, of MIC for the period ended December
31, 1995 (including the related notes and
schedules thereto and all auditors' reports
thereon and (B) unaudited consolidated balance
sheet of MIC as at June 30, 1996 (the "Balance
Sheet Date") and the related unaudited statements
of income and of changes in financial position or
of cash flows, whichever is applicable, of MIC for
the period then ended (including the related notes
and schedules thereto and all auditors' reports
thereon) (collectively, the "Financial
Statements"). Each of the Financial Statements is
complete and correct in all material respects,
and, except as set forth in the footnotes thereto,
has been prepared in accordance with generally
accepted accounting principles ("GAAP") and
presents fairly the financial position, results of
operations and changes in financial position or
cash flows, whichever is applicable, of MIC and
its subsidiaries as at the date and for the period
indicated.
(m) REAL PROPERTY. There does not exist any actual
or, to the Knowledge of the Executive Officers of
MIC, threatened or contemplated condemnation or
eminent domain proceedings that affect any real
estate subject to real property leases set forth
on Schedule 2.1(g) (each a "Real Property Lease")
or any part thereof, and MIC has not received any
notice, oral or written, of the intention of any
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Governmental Entity or other Person to take or use
all or any part thereof. The real property covered by
the Real Property Leases constitutes all of the real
property located in the U.S. that is necessary for
the conduct of the U.S. LMR Distribution Business as
presently conducted. MIC has actual and exclusive
possession of the leasehold estates in each Real
Property Lease, free and clear of any liens. Each of
the Real Property Leases is valid and enforceable in
accordance with its terms, subject to the Bankruptcy
Exception, and there is not under any such Real
Property Lease any existing breach, default, event of
default or event which, with notice and/or lapse of
time, would constitute a breach, default or event of
default (A) by MIC, or (B) to the knowledge of the
Executive Officers of MIC, by any other party to any
such lease, except where such breach, default or
event of default could not reasonably be expected to
have a Material Adverse Effect on the U.S. LMR
Distribution Business. Upon consummation of the
transactions contemplated hereby, each Real Estate
Lease will entitle Intek to the exclusive use,
occupancy and possession of the real estate specified
therein for the purposes for which MIC now uses such
real estate in the conduct of the U.S. LMR
Distribution Business. True, correct and complete
copies of all Real Property Leases have been
delivered or made available to Intek. No previous or
current party to any such Real Property Lease has
given notice of or made a claim with respect to any
breach or default thereunder.
(n) TANGIBLE PERSONAL PROPERTY.
(1) Schedule of the MIC Disclosure
Schedules sets forth all leases of personal
property relating to personal property used
in or necessary to the operation of the U.S.
LMR Distribution Business requiring lease
payments equal to or exceeding $20,000 per
annum ("Personal Property Leases"). MIC has
delivered to Intek true, correct and complete
copies of the Personal Property Leases,
including all amendments, modifications,
supplements, side letters or consents
affecting the obligations of any party
thereunder.
(2) Except as set forth on Schedule 6.1(n) of the
MIC Disclosure Schedules:
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(A) Each of the Personal Property Leases is
in full force and effect and is valid
and enforceable in accordance with its
terms, subject to the Bankruptcy
Exception, and there is no default under
any Personal Property Lease either by
MIC or, to the Knowledge of the
Executive Officers of MIC, by any other
party thereto, and no event has occurred
that with the lapse of time or the
giving of notice or both would
constitute a default thereunder. Each
of the Personal Property Leases is
freely transferable by MIC to Intek and
no third party consents are required for
such transfer; and
(B) No previous or current party to any
such Personal Property Lease has
given notice of or made a claim with
respect to any breach or default
thereunder.
(3) With respect to those Personal Property
Leases that were assigned or subleased to MIC
by a third party, all necessary consents to
such assignments or subleases have been
obtained. On the date hereof, Intek will
succeed to all of the right, title and
interest of MIC under every Personal Property
Lease.
(o) COMPLIANCE WITH LAWS. To the Knowledge of the
Executive Officers of MIC, MIC has complied with
all laws applicable to the conduct of the U.S. LMR
Distribution Business and the use of the Acquired
Assets, except for such instances of non-
compliance as could not, individually or in the
aggregate, reasonably be expected to have a
Material Adverse Effect on the Acquired Assets or
the U.S. LMR Distribution Business.
(p) FCC LICENSES. Except as set forth in
Schedule 6.1(p) of the MIC Disclosure Schedules:
(1) each of the FCC Licenses is valid and in good
standing;
(2) MIC has operated any systems constructed
pursuant to the FCC Licenses in accordance
with the terms of such FCC Licenses and in
compliance with all applicable FCC rules,
regulations or policies;
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(3) there is no investigation pending, or to the
Knowledge of the Executive Officers of MIC
threatened, concerning any FCC Licenses or
Equipment Authorizations; and
(4) MIC has no reason to believe that the FCC
will not assign to Intek the FCC Licenses or
that Intek will be unable to obtain any
comparable equipment authorizations to
replace the Equipment Authorizations.
(q) DISCLAIMERS OF MIC. Except as otherwise expressly
provided herein in this Article 6.1, the Acquired
Assets that consist of tangible personal property,
and each item thereof, are furnished AS IS, WHERE
IS AND WITH ALL FAULTS AND WITHOUT WARRANTIES OF
ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR ANY PARTICULAR PURPOSE.
6.2 REPRESENTATIONS AND WARRANTIES OF INTEK. Intek hereby
represents and warrants to MIC that:
(a) ORGANIZATION, STANDING, POWER AND AUTHORITY. Each
of Intek and MUSA is a corporation duly organized,
validly existing and in good standing under the
laws of the State of Delaware. Each of Intek and
MUSA has all requisite corporate power and
authority to make and perform its obligations
under this Agreement and each other agreement,
document, instrument or certificate contemplated
by this Agreement or to be executed by Intek or
its assignee of any of the Acquired Assets, as the
case may be, in connection with the consummation
of the transactions contemplated by this Agreement
and by the Intek Assignment Agreement
(collectively with this Agreement, the "Intek
Documents"). Except as set forth on
Schedule 6.2(a), each of Intek and MUSA is duly
qualified and authorized to do business as a
foreign corporation and is in good standing under
the laws of each jurisdiction in which it owns or
leases real property and each other jurisdiction
in which the conduct of its business or the
ownership of its properties requires such
qualification (all of which jurisdictions are
listed on Schedule 6.2(a) of the Intek Disclosure
Schedules), except where the failure to be so
qualified or authorized could not reasonably be
expected to have a Material Adverse Effect on
Intek or MUSA, as the case may be. The execution
and delivery of this Agreement and the
consummation of the transactions contemplated
hereby have been, and prior to the Closing the
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execution of each of the other Intek Documents, and
the consummation of the transaction contemplated
thereby will be, duly approved by unanimous vote of
the Special Committee of the Board of Directors of
Intek and by the unanimous vote of the Board of
Directors of MUSA, and no other corporate proceedings
on the part of Intek or MUSA are necessary to
authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has
been, and prior to the Closing each of the other
Intek Documents will be, duly executed and delivered
by, and constitutes, or will constitute, a valid and
binding obligation of, Intek and MUSA, to the extent
that either is a party to such Intek Document,
enforceable against Intek and MUSA in accordance with
its terms, subject to the Bankruptcy Exception.
(b) CAPITALIZATION. As of the date hereof, the
authorized capital stock of Intek consists of
20,000,000 shares of Common Stock. As of the date
hereof, 11,203,904 shares of Common Stock, were
issued and outstanding; 465,582 shares of Common
Stock were held in treasury; 500,000 shares of
Common Stock were reserved for issuance under
Intek's 1988 Key Employee Stock Option Plan (the
"1988 Option Plan"), and no options representing
the right to purchase shares of Common Stock are
outstanding under the 1988 Option Plan; 600,000
shares of Common Stock were reserved for issuance
under Intek's 1994 Stock Option Plan (the "1994
Option Plan"), and options representing the right
to purchase 250,000 shares of Common Stock are
outstanding under the 1994 Option Plan; and
300,000 shares of Common Stock were reserved for
issuance under Intek's 1994 Directors' Stock
Option Plan (the "Directors' Option Plan"), and
options representing the right to purchase 65,000
shares of Common Stock are outstanding under the
Directors' Option Plan. All shares of Common
Stock outstanding or held in treasury are duly
authorized, validly issued, fully paid and
nonassessable and are not subject to preemptive
rights. Except as set forth in this Section 6.2(b)
or in Schedule 6.2(b) of the Intek Disclosure
Schedules or as may be issued pursuant to the
Securicor Agreement or for issuance of securities
permitted by Section 5.2(d), as of the date hereof,
there are no shares of capital stock of Intek
authorized, issued or outstanding and there are no
outstanding subscriptions, options, warrants,
rights, convertible securities or any other
agreements or commitments of any character relating
to the issued or unissued capital stock
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or other securities of Intek obligating Intek to
issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock
of Intek or obligating Intek to grant, extend or
enter into any subscription, option, warrant, right,
convertible security or other similar agreement or
commitment. There are no voting trusts or other
agreements or understandings to which Intek or its
subsidiaries is a party with respect to the voting of
the capital stock of Intek.
(c) SHARES ISSUED TO MIC. All of the shares of Common
Stock issuable to MIC, or to the Escrow Agent
pursuant to the Escrow Agreement, in accordance
with this Agreement shall be, when so issued, duly
authorized, validly issued, fully paid and
nonassessable, not be subject to any preemptive
rights, and be free and clear of any liens,
encumbrances or restrictions. The shares issued
by Intek to MIC hereunder shall equal
approximately 6% of the outstanding shares of
Common Stock of Intek on a fully diluted basis as
of the date of the Closing, assuming issuance of
all shares of Common Stock Intek has a commitment
to issue, the additional shares of Common Stock
Intek to be delivered to MIC out of escrow
pursuant to this Agreement upon consummation of
the Securicor Transaction and the issuance by
Intek of 25,000,000 shares of Common Stock to
Securicor pursuant to the Securicor Agreement upon
consummation of the Securicor Transaction, and
the shares of Common Stock Intek is permitted to
issue pursuant to Section 6.2(b)(ii)(A) of the
Securicor Agreement. As of the date hereof, all
11,203,904 shares of Common Stock which are issued
and outstanding are listed and traded on the
National Association of Securities Dealers
Automatic Quotation System Small Cap Market (the
"NASDAQ Small Cap Market") under the symbol
"IDCC", and Intek is in full compliance with its
listing agreement. The shares issued to MIC
pursuant to this Agreement shall be listed on the
NASDAQ Small Cap Market.
(d) SUBSIDIARIES. Schedule 6.2(d) of the Intek
Disclosure Schedules sets forth the name and state
of incorporation of each subsidiary (as defined
herein) of Intek (collectively, the "Intek
Subsidiaries") existing as of the date hereof.
Except as set forth on Schedule 6.2(d) of the
Intek Disclosure Schedules, each of the Intek
Subsidiaries is a corporation duly organized,
validly existing and in good standing under the
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laws of its respective jurisdiction of incorporation
and is duly qualified to do business as a foreign
corporation in each jurisdiction in which its
ownership or lease of property or the nature of the
business conducted by it makes such qualification
necessary, except for such jurisdictions in which the
failure to be so qualified would not have a Material
Adverse Effect on Intek. Each of the Intek
Subsidiaries has the requisite corporate power and
authority to own, lease and operate its properties
and assets and to carry on its businesses as they are
now being conducted. Except as set forth on Schedule
6.2(d) of the Intek Disclosure Schedules, all
outstanding shares of capital stock of each Intek
Subsidiary are owned by Intek or another Intek
Subsidiary and are validly issued, fully paid and
nonassessable, are not subject to preemptive rights
and are owned free and clear of all liens, claims
and encumbrances. Except as set forth on Schedule
6.2(d) of the Intek Disclosure Schedules, there are
no outstanding subscriptions, options, warrants,
rights, convertible securities or any other
agreements or commitments of any character relating
to the issued or unissued capital stock or other
securities of any Intek Subsidiary obligating any
Intek Subsidiary to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares
of its capital stock or obligating any Intek
Subsidiary to grant, extend or enter into any
subscription, option, warrant, right, convertible
security or other similar agreement or commitment.
As of the date of this Agreement, MUSA has no
subsidiaries.
(e) BUSINESS IN ORDINARY COURSE. Except as set forth
on Schedule 6.2(e) of the Intek Disclosure
Schedules, since December 31, 1995, Intek and each
Intek Subsidiary have conducted their respective
businesses only in the ordinary course of business
consistent with past practice and there has been
no Material Adverse Change with respect to Intek,
nor has any event occurred, nor has any condition
or state of facts arisen, which has not been
disclosed to MIC and could, to the Knowledge of
the Executive Officers of Intek, reasonably be
expected to have a Material Adverse Effect on
Intek.
(f) CONSENTS AND APPROVALS; NO VIOLATION. Neither the
execution and delivery of this Agreement or the
other Intek Documents by Intek or MUSA, as the
case may be, nor the consummation by Intek or MUSA
of the transactions contemplated hereby or thereby
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conflicts with or results in any breach of any
provision of Intek's or MUSA's respective
certificates of incorporation or by-laws, except as
set forth on Schedule 6.2(f) of the Intek Disclosure
Schedules, violates, conflicts with, constitutes a
material breach or default (or an event which, with
notice or lapse of time or both, would constitute a
material breach or default) under, or results in or
gives rise to a right of termination of, or
accelerates the performance required by, or results
in the creation of any lien or other encumbrance upon
any of the properties or assets of Intek, MUSA or any
of the Intek Affiliates under, any of the terms,
conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement
or other instrument or obligation to which Intek is a
party or to which they or any of their respective
properties or assets are subject, except for such
violations, conflicts, breaches, defaults,
terminations, accelerations or creations of liens or
other encumbrances, which, individually or in the
aggregate, would not have a Material Adverse Effect
on Intek or any Intek Affiliate, requires any
consent, approval, authorization or permit of or
from, or filing with or notification to, any
Governmental Entity, or other third party except (A)
filings under the Xxxx-Xxxxx-Xxxxxx Act in connection
with the issuance of the Additional Shares to MIC
pursuant to Section 3.1(b)(2)(A) of this Agreement,
(B) pursuant to the Exchange Act, (C) filings with,
and approvals by, the FCC or any successor thereto,
or (D) third party consents, approvals,
authorizations, permits, filings or notifications
which if not obtained or made would not,
individually or in the aggregate, have a Material
Adverse Effect on Intek or MUSA, or violates any
statute, rule, regulation, order or decree of any
Governmental Entity by which Intek, MUSA, the Intek
Subsidiaries, or any of their respective
assets, is bound.
(g) BROKERS, FINDERS AND AGENTS. Except for
Xxxxxxxxxx & Co. Inc., no Person has acted,
directly or indirectly, as a broker, finder or
financial advisor for Intek or its Affiliates in
connection with the transactions contemplated by
this Agreement, and no Person is entitled to any
fee or commission or like payment in respect
thereof. Intek shall be solely responsible for,
and shall hold MIC and Xxxxxxxx harmless from and
against, all expenses and fees payable to
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Xxxxxxxxxx & Co. Inc. in connection with the
transactions contemplated hereunder.
(h) EMPLOYEE RELATIONS. Except as set forth in Schedule
6.2(h) of the Intek Disclosure Schedules, there are
no material controversies pending, or, to the
Knowledge of the Executive Officers of Intek and
MUSA, threatened that involve any employees employed
by Intek, MUSA or of any Intek Subsidiary.
(i) EMPLOYEE PLANS. Except as set forth on
Schedule 6.2(i) of the Intek Disclosure Schedules,
all employee benefit, welfare, bonus, deferred
compensation, pension, profit sharing, stock
option, employee stock ownership, consulting,
severance, or fringe benefit plans, formal or
informal, written or oral, and all trust
agreements related thereto, relating to any
present or former directors, officers or employees
of Intek or any Intek Subsidiary (collectively,
"Intek Employee Plans") have been maintained,
operated, and administered in substantial
compliance with their terms and currently comply,
and have at all relevant times complied, in all
material respects with ERISA and the Code, to the
extent applicable, and any other applicable laws.
With respect to each Intek Employee Plan which is
a pension plan (as defined in Section 3(2) of
ERISA), except as set forth in Schedule 6.2(i) of
the Intek Disclosure Schedules: each pension
plan as amended (and any trust relating thereto)
intended to be a qualified plan under Section
401(a) of the Code either has been determined by
the Internal Revenue Service ("IRS") to be so
qualified or is the subject of a pending
application for such determination that was timely
filed, there is no accumulated funding deficiency
(as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, and no
waiver of the minimum funding standards of such
sections has been requested from the IRS, no
reportable event described in Section 4043 of
ERISA has occurred, no defined benefit plan has
been terminated, nor has the Pension Benefit
Guaranty Corporation instituted proceedings to
terminate a defined benefit plan or to appoint a
trustee or administrator of a defined benefit
plan, and no circumstances exist that constitute
grounds under Section 4042 of ERISA entitling the
Pension Benefit Guaranty Corporation to institute
any such proceedings, no pension plan is a
"multiemployer plan" and as of the last day of
the most recent plan year which ended prior to the
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date hereof and for which an actuarial valuation has
been issued by the plan's actuary, with respect to
each defined benefit plan which is a "single-employer
plan" (within the meaning of Section 4001(a)(15) of
ERISA) the actuarially determined present value of
all "benefit liabilities" (within the meaning of
Section 4001(a)(16) of ERISA), as determined on the
basis of the actuarial assumptions contained in the
plan's most recent actuarial valuation, did not
exceed the then current value of the assets of the
plan and there has been no material change in the
financial condition of the plan since the last day of
the most recent plan year. No liability under
subtitle C or D of Title IV of ERISA has been
incurred by Intek or any Intek Subsidiary with
respect to any "single-employer plan", formerly
maintained by any of them or by any entity which is
considered one employer with Intek under Section 4001
of ERISA or Section 414 of the Code.
(j) MATERIAL CONTRACTS. Except as set forth in
Schedule 6.2(j) of the Intek Disclosure Schedules,
the Securicor Agreement, this Agreement and the
Securicor Loan Agreement, neither Intek, MUSA nor
any other Intek Subsidiary is a party to, or is
bound by any agreement, indenture or other
instrument relating to the borrowing of money by
Intek, MUSA or any such Intek Subsidiary or the
guarantee by Intek, MUSA or any such Intek
Subsidiary of any such obligation (other than
trade payables and instruments relating to
transactions entered into in the ordinary course
of business), any contract or agreement or
amendment thereto that would be required to be
filed as an exhibit to a Report on Form 10-K filed
by Intek with the Commission, any contract
relating to the disposition of any assets or any
business interests of Intek, other than in the
ordinary course of business, under which the buyer
has any continuing obligations or indemnity
arrangements, any warranty or other agreement
relating to any products manufactured or
distributed by Intek or any Intek Subsidiary, any
other contract or agreement or amendment thereto
that places any restrictions on the ability of
Intek, MUSA or any other Intek Subsidiary to
engage in any business activity which restrictions
would have a Material Adverse Effect on Intek or
MUSA (collectively, the "Intek Contracts").
Neither Intek, MUSA nor any Intek Subsidiary is in
default under any Intek Contract, which default is
reasonably likely to have, either individually or
in the aggregate, a Material Adverse Effect on
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Intek, and there has not occurred any event that with
the lapse of time or the giving of notice or both
would constitute such a default.
(k) INTEK CORPORATE ACTION. The Special Committee of
the Board of Directors of Intek has, by unanimous
vote, determined that the transaction contemplated
by this Agreement and the Securicor Agreement is
advisable and in the best interests of Intek and
its stockholders, and approved this Agreement and
the Securicor Agreement and the transactions
contemplated hereby and by the Securicor
Agreement.
(l) INFORMATION IN DISCLOSURE DOCUMENTS. The
information with respect to Intek or any
subsidiary of Intek provided by Intek for
inclusion in the Intek Proxy Statement to be
mailed to Intek's shareholders in connection with
the transactions contemplated by this Agreement,
will not, at the time of the mailing of the Intek
Proxy Statement and any amendments or supplements
thereto, and at the time of the Intek
Stockholders' Meeting, contain any untrue
statement of a material fact or omit to state any
material fact required to be stated therein or
necessary in order to make the statements therein,
in light of the circumstances under which they are
made, not misleading; provided that Intek makes no
representation or warranty with respect to
information provided by MIC for inclusion in the
Intek Proxy Statement. The Intek Proxy Statement
shall comply as to form in all material respects
with the provisions of the Exchange Act, and the
respective rules and regulations promulgated
thereunder.
(m) FINANCIAL STATEMENTS. Intek has delivered to MIC
true, correct and complete copies of the
(A) audited consolidated balance sheet of Intek as
at December 31, 1995 and the related audited
statements of income and of changes in financial
position or of cash flows, whichever is
applicable, of Intek for the period then ended
(including the related notes and schedules thereto
and all auditors' reports thereon) , and (B)
unaudited consolidated balance sheet of Intek as
at June 30, 1996 (the "Intek Balance Sheet Date")
and the related unaudited statements of income and
of changes in financial position or of cash flows,
whichever is applicable, of Intek for the period
then ended (including the related notes and
schedules thereto and all auditors' reports
thereon) (collectively, the "Intek Financial
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Statements"). Each of the Intek Financial Statements
is complete and correct in all material respects,
and, except as set forth in the footnotes thereto,
has been prepared in accordance with GAAP and
presents fairly the financial position, results of
operations and changes in financial position or cash
flows, whichever is applicable, of Intek and its
subsidiaries as at the date and for the period
indicated.
(n) ENVIRONMENTAL MATTERS. For purposes of this
Section 6.2(n), the following terms shall have the
indicated meaning:
(1) "Real Property" means all real property
presently or formerly owned or operated by
Intek or any Intek Subsidiary on which
facilities are or were located and all real
property (including property held as trustee
or in any other fiduciary capacity) over
which Intek or any Intek Subsidiary
currently or formerly has exercised
dominion, management or control. To the
extent that Real Property includes site
leases, the representations contained in
the Section 6.2(n) shall be limited to the
Knowledge of the Executive Officers of
Intek.
(2) "Environmental Law" means any applicable
federal, state or local statute, law
ordinance, rule, regulation, code, license,
permit, authorization, approval, consent,
order, judgment, decree, injunction,
directive, requirement or agreement with any
Governmental Entity, now existing, relating
to: (aa) the protection, preservation or
restoration of the environment (including,
without limitation, air water vapor, surface
water, groundwater, drinking water supply,
surface land, subsurface land, plant and
animal life or any other natural resource),
or to human health or safety, or (bb) the
exposure to, or the use, storage, recycling,
treatment, generation, transportation,
processing, handling, labeling, production,
release or disposal of Hazardous Substances,
in each case as amended. The term
Environmental Law includes, without
limitation,
(A) the following statutes, each as amended:
(i) the Federal Clean Air Act;
(ii) the Federal Clean Water Act;
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(iii) the Federal Resource Conservation
and Recovery Act of 1976
("RCRA");
(iv) the Federal Comprehensive
Environmental Response Compensation
and Liability Act of 1980
("CERCLA");
(v) the Federal Toxic Substances
Control Act;
(vi) the Federal Occupational Safety and
Health Act of 1970;
(vii) the Federal Safe Drinking Water
Act;
(viii) the Federal Insecticide,
Fungicide and Rodenticide Act;
(ix) the California Hazardous Waste
Control Law;
(x) the California Hazardous Substance
Account Act;
(xi) the Xxxxxx-Cologne Water Quality
Control Act; and
(xii) the California Air Pollution
Control Law; and
(B) any common law or equitable doctrine (including,
without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and
strict liability) that may impose liability or
obligations for injuries or damages due to, or
threatened as a result of, the presence of or exposure
to any Hazardous Substance.
(3) "Hazardous Substance" means any substance, whether liquid,
solid or gas, listed, defined, designated or classified as
hazardous, toxic, radioactive or dangerous, under any
applicable Environmental Law, whether by type or by
quantity. Hazardous Substance includes, without limitation,
(aa) any "hazardous substance" as defined in CERCLA, (bb)
any "hazardous waste" as defined in RCRA, and (cc) any toxic
waste, pollutant, contaminant, hazardous substance, toxic
substance, hazardous waste, special waste or petroleum or
any derivative or by-product thereof, radon, radioactive
material, friable asbestos, asbestos containing material
releasing friable asbestos, urea formaldehyde foam
insulation, lead and polychlorinated biphenyls ("PCBs").
(4) Except as set forth on Schedule 6.2(n) of the Intek
Disclosure Schedules or as would not
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individually or in the aggregate have a
Material Adverse Effect on Intek,
(A) Intek and each Intek Subsidiary is and
has been in compliance with all
applicable Environmental Laws,
(B) the Real Property does not contain any
Hazardous Substance in violation of any
applicable Environmental Law,
(C) neither Intek nor any Intek Subsidiary
has received any written notices, demand
letters or written requests for
information from any Governmental Entity
or any third party indicating that Intek
or such Intek Subsidiary may be in
violation of, or liable under, any
Environmental Law,
(D) to the Knowledge of the Executive
Officers of Intek, there are no civil,
criminal or administrative actions,
suits, demands, claims, hearings,
investigations or proceedings pending or
to the Knowledge of the Executive
Officers of Intek threatened against
Intek or any Intek Subsidiary with
respect to Intek or any Intek Subsidiary
or the Real Property relating to any
violation, or alleged violation, of any
Environmental Law,
(E) no reports have been filed, or, to the
Knowledge of the Executive Officers of
Intek, are required to be filed, by
Intek or any Intek Subsidiary concerning
the release of any Hazardous Substance
or the threatened or actual violation of
any Environmental Law on or at the Real
Property,
(F) to the Knowledge of the Executive
Officers of Intek, there are no
underground storage tanks on, in or
under any of the Real Property and no
underground storage tanks have been
closed or removed from any Real Property
while such Real Property was owned or
operated by Intek or any Intek
Subsidiary, and
(G) to the Knowledge of the Executive
Officers of Intek, neither Intek nor any
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Intek Subsidiary has incurred, and none of the Real Property
is presently subject to, any liabilities fixed (or, to the
knowledge of Intek, contingent) relating to any suit,
settlement, court order, administrative order, judgment or
claim asserted or arising under any Environmental Law.
(5) To the Knowledge of the Executive Officers of Intek, there are no
permits or licenses required under any Environmental Law in
respect of the Real Property presently operated by Intek or any
Intek Subsidiary.
(6) Neither Intek nor any Intek Subsidiary has received written
notice that any part of the Real Property has been or is listed
as a site containing Hazardous Substances pursuant to any
Environmental Law.
(o) LABOR RELATIONS. Except as set forth in Schedule 6.2(o) of the Intek
Disclosure Schedules, neither Intek nor any Intek Subsidiary is a
party to or bound by any collective bargaining agreement respecting
its employees, nor is there pending, or to the Knowledge of the
Executive Officers of Intek threatened, any strike, walkout or other
work stoppage or labor organizational effort, and neither Intek nor
any Intek Subsidiary has received any union grievances, complaints, or
claims, the liability for which would have a Material Adverse Effect
on Intek.
(p) REAL ESTATE. Except as set forth on Schedule 6.2(p) of the Intek
Disclosure Schedules, no real property is owned by Intek or any Intek
Subsidiary. Schedule 6.2(p) sets forth the description of all real
property leases to which Intek is a party. There does not exist any
actual or, to the Knowledge of the Executive Officers of Intek,
threatened or contemplated condemnation or eminent domain proceedings
that affect any real estate subject to real property leases set forth
on Schedule 6.2(p), or otherwise operated or utilized by Intek, or
any part thereof, and Intek has not received any notice, oral or
written, of the intention of any Governmental Entity or other Person
to take or use all or any part thereof.
(q) LITIGATION. As of the date hereof, there is no Legal Proceeding
pending, or to the Knowledge of the Executive Officers of Intek,
threatened, that questions the validity of this Agreement, the
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56
Intek Documents or any action taken or to be taken by
Intek in connection with the consummation of the
transactions contemplated hereby or thereby. Except
as set forth on Schedule 6.2(q) of the Intek
Disclosure Schedules, there is no Legal Proceeding
pending or, to the Knowledge of the Executive
Officers of Intek, threatened against Intek or any
Intek Subsidiary (including, without limitation, any
claims in respect of any warranties of Intek) which,
insofar as the Executive Officers of Intek can
reasonably foresee, would have a Material Adverse
Effect on Intek. Neither Intek nor any Intek
Subsidiary is subject to any outstanding judgment,
decree or order entered in any Legal Proceeding
affecting or naming Intek or any Intek Subsidiary or
having a Material Adverse Effect on Intek, and to
the Knowledge of the Executive Officers of Intek, no
such judgment, order or decree has been threatened.
To the Knowledge of the Executive Officers of Intek,
there is no basis for any Legal Proceeding against
Intek or any Intek Subsidiary which could reasonably
be expected to have a Material Adverse Effect on
Intek.
(r) LICENSES. Schedule 6.2(r) of the Intek Disclosure
Schedules sets forth a complete list of all FCC
licenses in which Intek has an interest or under
which Intek operates any part of its business.
Intek is not, as of the date hereof, the record
and beneficial licensee and owner of any FCC
licenses. Intek is entitled to act and is acting
as of the date hereof as manager, pursuant to
valid and subsisting management agreements, of
each of the FCC licenses identified as managed FCC
Licenses on Schedule 6.2(r) of the Intek
Disclosure Schedules (the "Licenses") and, to the
knowledge of the Executive Officers of Intek, the
persons identified on Schedule 6.2(r) of the Intek
Disclosure Schedules as the holders of the
Licenses are the sole record and beneficial
licensees and owners of such Licenses). Except as
set forth on Schedule 6.2(r) of the Intek
Disclosure Schedules, neither Intek nor any of its
Affiliates currently owns, of record or
beneficially, or manages any other FCC licenses.
Except as set forth on Schedule 6.2(r) of the
Intek Disclosure Schedules, to the knowledge of
the Executive Officers of Intek, there is no
pending or threatened action by the FCC or any
other Governmental Entity or third party to
suspend, revoke, terminate or challenge any of the
Licenses or otherwise investigate the operation of
Intek's SMR business or the accuracy of the
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loading of the system or systems of Intek's SMR
business. Except as set forth in Schedule 6.2(r) of
the Intek Disclosure Schedules, Intek is as of the
date hereof in compliance in all material respects
with all regulations concerning construction and
spacing of the Licenses or the facilities associated
therewith, and all other federal statutes, and
rules, regulations and policies of the FCC
applicable to Intek, the Licenses, or Intek's SMR
business. To the Knowledge of the Executive Officers
of Intek, none of the Licenses is currently subject
to or operating under any short-space agreement or
any FCC waiver of otherwise applicable rules and
regulations, except as disclosed in Schedule 6.2(r)
of the Intek Disclosure Schedules. Except as
disclosed in Schedule 6.2(r), there are no payments
due and payable by Intek, nor any dispute regarding
any payments due from Intek between Intek and the
licensee of any of the Licenses and, to the
knowledge of the Executive Officers of Intek, there
are no payments due and payable by any third party
(including any predecessor in interest with respect
to the Licenses), nor any dispute regarding any
payments by any third party between such third party
or Intek and the licensees of any License relating
to the Licenses, including without limitation any
payments to the licensees of the Licenses.
(s) UNITS IN SERVICE. Schedule 6.2(s) of the Intek
Disclosure Schedules sets forth a true and
complete list, by customer, of the units in
service in connection with the Licenses (the
"Units in Service"). The Units in Service are, to
the knowledge of the Executive of Officers of
Intek, in the possession of the indicated
customers, which customers are billed for their
use of such Units in Service at the actual
customer rates shown in Schedule 6.2(s) of the
Intek Disclosure Schedules and which customers are
required to pay such billed amounts in full
(subject to Intek's normal prompt payment, volume
and similar discounts, all of which have been
disclosed in writing to MIC) on or before the
relevant due date reflected in the relevant
billing.
(t) CONTRACTS, LEASES AND SITE LICENSES.
Schedule 6.2(t) of the Intek Disclosure Schedules
sets forth a true and complete index and current
copies (or written summaries, including all
material terms, in the case of oral agreements) of
all material contracts (excluding customer
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contracts), leases and site licenses related to the
assets, Intek's business and the Licenses, including
without limitation, site licenses, equipment leases
or installment sale contracts, partnership,
joint-venture or joint-use agreements, management
agreements, dealer agreements, short-space agreements
or the like. Except as set forth on Schedule 2.1(c)
of the Intek Disclosure Schedules, all of the
contracts, leases and site licenses relating to the
Licenses have been entered into by Intek on arm's
length terms with non-Affiliates are in full force
and effect and are valid and enforceable in
accordance with their terms. Intek has received no
notice from any Person of termination of any such
contract, lease, or site license, and the
consummation of the transaction herein contemplated
shall not affect a termination of or give any Person
the right to terminate or modify any such contract,
lease or site lease. Except as set forth on Schedule
2.1(c) of the Intek Disclosure Schedules, to the
Knowledge of the Executive Officers of Intek, none
of the contracting parties is in default in any
material respect or has acted or failed to act in a
manner which, with notice or the passage of time or
both, will result in a material default under any of
the contracts, leases, and site licenses and no
penalties have been incurred nor are any material
amendments pending with respect to any of the
contracts, leases and site licenses.
(u) RELATED PARTY TRANSACTIONS. Except as set forth
in Schedule 6.2(u) of the Intek Disclosure
Schedules, no current shareholder, director, or
officer of Intek or any of its Subsidiaries is
presently a party to, or since January 1, 1996,
has entered into, directly or indirectly through
his, her or its Affiliates, any arrangement or
transaction with Intek or any of its Subsidiaries
providing for the furnishing of services (except
as director or officer) by or to, or the rental of
real or personal property from or to, or otherwise
requiring cash payments to or by any such person
(except as a director or officer), other than
those that do not involve payments, or the
furnishing of goods or services having a fair
market value by, from or to Intek or any of its
Subsidiaries of more than $25,000 in any calendar
year.
(v) COMPLIANCE WITH LAWS. Except as set forth on
Schedule 6.2(v) of the Intek Disclosure Schedules,
to the Knowledge of the Executive Officers of
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Intek, each of Intek, its subsidiaries and its
Affiliates has complied with all laws applicable to
the conduct of its business, except for such
instances of non-compliance as could not,
individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Intek.
7. COVENANTS OF MIC.
-----------------
7.1 MIC'S REPRESENTATION LETTER. MIC and Intek shall
execute and deliver a written representation letter (a
"Shareholder Representation Letter") with respect to
the Common Stock to be delivered to MIC pursuant to
this Agreement providing that:
(a) MIC agrees that it shall not sell, transfer,
assign, pledge or otherwise dispose of the Common
Stock unless such sale, transfer, assignment,
pledge or other disposition has been registered or
is exempt under the Securities Act and has been
registered or qualified or is exempt from
registration or qualification under applicable
securities laws and MIC provides to Intek an
opinion of counsel satisfactory to Intek that a
sale, transfer, assignment, pledge or other
disposition of such Common Stock may be made
without registration.
(b) MIC represents as follows:
(1) The Common Stock to be acquired by MIC will
be acquired for MIC's own account and not
with a view to, or present intention of,
distribution thereof in violation of the
Securities Act, or any applicable state
securities laws and will not be disposed of
in contravention of the Securities Act or any
applicable state securities laws;
(2) MIC is sophisticated in financial matters and
is able to evaluate the risks and benefits of
the investment in the Common Stock;
(3) The Executive Officers of MIC had an
opportunity to ask questions and receive
answers concerning Intek and the terms and
conditions of the acquisition of the Common
Stock and have had full access to such other
information concerning Intek as MIC has
requested; and
(4) MIC acknowledges that the Common Stock has
not been registered under the Securities Act
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and, therefore, cannot be sold unless
subsequently registered under the Securities
Act or an exemption from such registration
is available, and MIC is able to bear the
economic risk of any investment in the
Common Stock for an indefinite period of
time.
(c) MIC acknowledges that until such time as the Common
Stock has been registered for resale pursuant to the
Securities Act, each certificate representing the
Common Stock shall be endorsed with the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS, AND
MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE FIRST BEEN
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE AND THE CORPORATION SHALL
HAVE RECEIVED, AT THE EXPENSE OF THE HOLDER, EVIDENCE
OF SUCH EXEMPTION REASONABLY SATISFACTORY TO THE
CORPORATION (WHICH MAY INCLUDE, AMONG OTHER THINGS,
AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION).
(d) MIC acknowledges that Intek may place stop transfer
orders against the registration or transfer of any
Common Stock until such time as the requirements of
the foregoing legend are satisfied.
(e) Intek acknowledges that the legend described in
Section 7.1(c) hereof and any stop transfer
instructions issued pursuant to
Section 7.1(d) hereof shall be removed promptly
and Intek shall issue promptly a new certificate
to MIC of such Common Stock if the sale of such
Common Stock has been registered under the
Securities Act and a prospectus meeting the
requirements of Section 10 of the Securities Act
is available or if MIC provides to Intek an
opinion of counsel reasonably satisfactory to
Intek that a public sale, transfer or assignment
of such Common Stock may be made without
registration.
7.2 SATISFACTION OF MIC OBLIGATIONS POST-CLOSING.
(a) RETURN OF ACQUIRED ASSETS. If Intek, MUSA
Securicor Communications is compelled to return
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any Acquired Assets to MIC to be applied against the
satisfaction of any obligation of MIC which arises
within one year after the Closing, then Xxxxxxxx
shall, promptly upon receipt of a written request
therefor, accompanied by an assignment to Xxxxxxxx of
all of the requesting entity's right, title and
interest in any claim against MIC with respect to
such Acquired Asset, pay cash to such entity in an
amount equal to the value of such Acquired Asset as
of the date of this Agreement. Each of MIC and
Xxxxxxxx hereby agrees that Securicor Communications
Limited shall be an intended third-party beneficiary
of the provisions of this Section 7.2.
(b) RETURN OF MUSA PROPERTY. If a customer of the
U.S. LMR Distribution Business returns merchandise
to MIC which merchandise was supplied by MUSA
pursuant to MUSA's obligations to such customer
under the Contracts (whether or not such Contract
was assignable), or if MIC receives from a
customer any other cash or other proceeds arising
from MUSA's performance of its obligations to a
customer, then MIC shall, at MUSA expense, deliver
such inventory, cash or proceeds to MUSA in the
form received. Xxxxxxxx shall promptly pay to
MUSA the amount of such proceeds or the cost of
such inventory upon MUSA's written request
therefor if MIC fails to comply with its
obligations under this Section 7.2(b).
8. COVENANTS OF INTEK
------------------
8.1 CONFIDENTIALITY OF INFORMATION.
(a) The materials made available to Intek, MUSA or
Securicor by MIC or MIC's Affiliates, whether in
verbal, written or any other form (collectively,
the "MIC Materials"), are deemed to be
confidential and proprietary information of MIC to
the extent such MIC Materials are not purchased as
part of the Acquired Assets. No such MIC
Materials shall be copied, photographed, or in any
way duplicated without the express prior written
consent of MIC except to the extent such MIC
Materials have previously been made available to
the general public other than by Intek, MUSA,
Securicor or their respective Affiliates. MIC
will provide copies of the MIC Materials, or any
part of them, to Intek, MUSA or Securicor upon
their respective requests therefore. At the
election of MIC, Securicor may be required to
execute a confidentiality agreement containing
provisions no less burdensome than those set forth
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in this Section 8.1 with respect to Intek prior to
having the MIC Materials made available to it
hereunder.
(b) Intek shall notify, and shall cause any Affiliate
of Intek, including MUSA, to notify all employees,
agents or representatives of Intek or any
Affiliate of Intek receiving or otherwise learning
of the MIC Materials, that the contents thereof
must be kept confidential pursuant to this
Agreement, and that any disclosure to a third
party or use of MIC Materials not purchased as
part of the Acquired Assets without MIC's written
permission will constitute a breach of this
Agreement.
(c) Intek agrees, and agrees to obtain for the benefit
of MIC from any third party provided the MIC
Materials in accordance with the provisions
hereof, that upon any repudiation of this
Agreement or if there is no Closing for any reason
whatsoever, neither Intek nor any such third party
will implement, use or disclose the MIC Materials
not purchased as part of the Acquired Assets for a
period of three (3) years beginning on the date of
any repudiation regardless of whether MIC
surrenders, assigns or otherwise disposes of its
rights and duties under the Agreement unless the
MIC Materials are or become known to the general
public, except if such public knowledge is the
result of Intek's or such third party's own
actions and/or breach of this Agreement; or such
disclosure is required under applicable law or an
order of a Governmental Entity. In the event that
any repudiation shall occur, Intek shall return,
and cause all other Persons who received such MIC
Materials through Intek to return, to MIC all
tangible MIC Materials, notes, records and
recordings, except to the extent that such MIC
Materials have been purchased as Acquired Assets
hereunder.
(d) Unless purchased by Intek pursuant to the terms of
this Agreement, the MIC Materials shall, without
limitation, remain the property of MIC, and upon
the termination of this Agreement shall be
returned promptly to MIC at its request, together
with all copies, notes, extracts, summaries and
---
analyses thereof, whether or not such copies have
been provided by MIC.
(e) Intek acknowledges that any violation of this Section
8.1 will cause immediate and irreparable harm to
MIC and that the damages which MIC will
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suffer may be difficult or impossible to measure.
Therefore, upon any actual or impending violation of
this Section 8.1, MIC will be entitled to the
issuance of a restraining order and/or a preliminary
and permanent injunction, without bond, restraining
and/or enjoining such violation by Intek or any
entity or Person acting in concert with Intek. This
remedy will be in addition to any other remedy which
may otherwise be available to MIC.
8.2 REPLACEMENT OF PERFORMANCE BONDS. On or before September 30,
1996, Intek or its assigns shall provide all letters of
credit, guaranties and performance bonds as shall be necessary
for Intek to obtain the release of MIC and its Affiliates from
the guaranties, letters of credit, or performance bonds set
forth on Schedule 8.2 (collectively, the "Performance
Guarantees").
8.3 RIGHTS OF INSPECTION. From and after the Closing,
Intek shall, whenever reasonably requested by MIC,
permit MIC to have access to all business records
turned over to Intek and/or MUSA pursuant to this
Agreement. Intek shall preserve and maintain, or shall
cause MUSA to preserve and maintain, the records
relating to the U.S. LMR Distribution Business which
are part of the Acquired Assets for at least six years
after the Closing.
8.4 EMPLOYEE MATTERS.
(a) On or prior to the date of the Closing, Intek or
its Affiliates will offer employment on an "at-
will basis" to the employees of MIC listed on
Schedule 8.4(a); provided that (i) the acceptance
by an employee of an offer of employment made
pursuant to this Section 8.4 shall become
effective as of the Effective Date subject to the
condition subsequent that the transactions
contemplated by this Agreement closes, and (ii) an
employee who is absent from active service on the
Effective Date shall not be offered employment by
Intek unless and until such inactive employee is
capable of returning to active service in the same
capacity and position that such employee occupied
immediately prior to his absence, provided such
return to active service occurs prior to the
second anniversary of the Effective Date. Nothing
herein shall obligate MIC to continue the
employment of any employee. Employees receiving
and accepting Intek's offer of employment pursuant
to the terms hereof shall hereinafter be referred
to as "Transferred Employees." Intek's offer of
employment to such Transferred Employees shall
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provide for the same base salary payable to such
Transferred Employee by MIC immediately prior to such
offer of employment by Intek, but on such other terms
and conditions of employment, if any, as Intek may
offer to the Transferred Employee's in its sole
discretion; PROVIDED, HOWEVER, that Transferred
Employees will be offered a health and life insurance
program which shall not exclude coverage for
conditions existing prior to Closing (except to the
extent excluded prior to the Closing) and which,
taken as a whole, will be comparable to the health
and life insurance program now offered to such
Transferred Employees by MIC, provided that the
insurance company which currently provides MIC with
health and life insurance coverage is willing to
provide such coverage to Intek on and after the date
of the Closing at a cost comparable to that paid by
MIC immediately before the Closing. Intek shall grant
all Transferred Employees credit for purposes of
eligibility and vesting under Intek's employee
benefit plans, programs, agreements or arrangements
for such Transferred Employees' years of service as
employees of MIC to the same extent a similarly
situated Intek employee's service with Intek is taken
into account for purposes of eligibility and vesting
under such employee benefit plans, programs,
agreements or arrangements.
(b) No provision of this Section shall create any
right in any Transferred Employee or in his or her
beneficiaries.
(c) On and after the date of Closing, MIC shall not be
liable for any expense or liability that may arise
from employment with or termination of any
Transferred Employee by Intek, provided that nothing
in this Section 8.4(c) shall limit MIC's
indemnification obligations under Section 11.1.
8.5 OWNERSHIP AND PROPRIETARY RIGHTS. Intek agrees that it
will maintain all patent, copyright, trade secret and
other similar notices of the proprietary rights of MIC
or third parties in and on all copies of the MIC
Materials not purchased as Acquired Assets under this
Agreement. Ownership of all MIC Materials and of all
intellectual property rights of MIC not purchased by
Intek as Acquired Assets under this Agreement is and
shall remain in MIC. All intellectual property rights
purchased by Intek as Acquired Assets under this
Agreement shall vest with Intek subject to MIC's rights
under the U.S. Trademarks License Agreement.
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8.6 AGREEMENTS WITH RESPECT TO OTHER TRANSACTIONS. From
and after the execution and delivery of this Agreement,
Intek will not amend, modify, supplement, waive any
rights or remedies under or grant any consent under the
Securicor Agreement (including any schedule and exhibit
thereto), or agree to do any of the foregoing, without
the prior written consent of Xxxxxxxx (which consent
shall not be unreasonably withheld).
9. MUTUAL ADDITIONAL COVENANTS
---------------------------
9.1 EXPENSES. Except as otherwise provided in this Agreement, each
party shall bear its own legal, accounting and other expenses
incurred by it in connection with this Agreement, and the
other agreements and transactions contemplated by this
Agreement.
9.2 PUBLIC ANNOUNCEMENT. The parties agree that no party
shall issue or cause publication of any press release
or other announcement, disclosure or public
communication with respect to this Agreement or the
transactions contemplated by this Agreement without the
consent of the others. Nothing in this Agreement shall
prohibit any party, after reasonable efforts to consult
with the others, from issuing or causing publication of
any press release, announcement or other public
communication to the extent that such party reasonably
believes that the action is required by law in
connection with obtaining necessary approvals and
consents and complying with applicable law (e.g. any
requirement that a party hereto make any filings with
the Securities and Exchange Commission relating to this
Agreement and the transactions contemplated in this
Agreement).
9.3 COOPERATION. Neither MIC nor Intek shall voluntarily
undertake any course of action inconsistent with
satisfaction of the requirements applicable to it under
this Agreement. Intek, MIC and Xxxxxxxx shall each
promptly take all actions as may be appropriate to
enable them to perform their obligations under this
Agreement.
9.4 INTERIM OPERATIONS. During the period from the date of
this Agreement through the Option Exercise Date, except
as expressly provided in this Agreement, as required by
law, or as otherwise unanimously approved in advance by
a committee composed of Xx Xxxxx, Xxxxxxxx Xxxxxx and
Xxxx Xxxxxxxx (which approval shall not be unreasonably
withheld):
(a) Intek shall operate, or cause MUSA to operate, the
U.S. LMR Distribution Business.
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(b) Intek shall not permit or cause MUSA to declare, set
aside, pay or make any dividend or other distribution
or payment (whether in cash, stock or property) with
respect to, or purchase or redeem, any shares of its
capital stock.
(c) Intek shall cause MUSA to maintain or cause to be
maintained, or Intek, if it owns the U.S.
Trademarks, shall maintain or cause to be
maintained, the U.S. Trademarks in full force and
effect.
(d) Neither Intek nor MUSA shall amend or otherwise agree
to or take any action effectively amending or
terminating the Securicor Loan Agreement or the
Securicor Agreement.
(e) Neither Intek nor MUSA shall use the advances under
or other proceeds of the Securicor Loan Agreement
other than for the benefit of MUSA.
9.5 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS. Intek and MIC
shall, so long as all related fees are reasonable or such
actions are expressly approved by a committee composed of Xx
Xxxxx, Xxxxxxxx Xxxxxx and Xxxx Xxxxxxxx (which approval shall
not be unreasonably withheld):
(a) prepare and file all necessary forms and responses as
shall be required to obtain governmental approval
under Xxxx-Xxxxx-Xxxxxx for all of the transactions
contemplated herein and in the Securicor Agreement as
promptly as possible after the Closing, with filing
fees for such filings under Xxxx-Xxxxx-Xxxxxx to be
paid by INTEK;
(b) cooperate with one another in promptly
determining whether any other filings are required
to be made or consents, waivers, approvals,
permits or authorizations are required to be
obtained under any other applicable federal, state
or foreign law or regulation or any Contracts and
in promptly making any such filings, furnishing
information required in connection therewith and
seeking in a timely fashion to obtain any such
consents, waivers, approvals, permits or
authorizations; and
(c) deliver to the other parties of this Agreement copies
of all such reports and filings promptly after they
are filed. Intek shall be responsible for all fees
required to be paid in connection with any such
consents, approvals, permits or authorizations.
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9.6 PROXY STATEMENT. As soon as practicable after the
Closing, Intek shall prepare and file with the
Securities and Exchange Commission a proxy statement
and related solicitation materials relating to a
special meeting of the holders of the Intek's common
stock, $.01 par value (the "Intek Stockholders'
Meeting") concerning the Securicor Agreement and the
transactions contemplated thereby (such proxy
statement, as amended or supplemented from time to
time, being herein referred to as the "Proxy
Statement"), and shall use its best efforts to cause
the Proxy Statement to be mailed to its stockholders at
such time and in such manner as permits the Intek
Stockholders' Meeting to be held as promptly as
practicable. MIC and Xxxxxxxx shall each use its best
efforts to furnish all information as may be reasonably
requested by Intek and, in any case, as required with
respect to Intek by Regulation 14A under the Exchange
Act for inclusion in the Proxy Statement. The
information provided by Intek and MIC, respectively,
for use in the Proxy Statement shall, on the date when
the Proxy Statement is first mailed to Intek's
stockholders, and on the date of the Intek
Stockholders' Meeting, be true and correct in all
material respects and shall not omit to state any
material fact required to be stated therein or
necessary in order to make the statements contained
therein not misleading, and Intek, MIC and Xxxxxxxx
each agree promptly to correct any information provided
by it for use in the Proxy Statement which shall have
become false or misleading. Intek shall duly call,
give notice of, convene and hold the Intek
Stockholders' Meeting, for the purpose of approving,
among other matters, the transactions contemplated
under the Securicor Agreement. Intek, through its
Board of Directors, shall recommend to its stockholders
approval of the foregoing. The Proxy Statement will
comply as to form in all material respects with all
applicable requirements of the Exchange Act, and no
amendment or supplement to the Proxy Statement shall be
made by Intek without the prior written approval of MIC
(which approval shall not be unreasonably withheld),
except as otherwise required by applicable laws.
9.7 HITACHI SUPPLY AGREEMENT.
(a) After the Closing, neither MIC nor Xxxxxxxx will
take any action that would result in the
termination or terminability of the Hitachi Supply
Agreement prior to its scheduled termination date,
or take any action that would result in MUSA's
failure to be included within the definition of
"Midland Affiliate" as set forth in the Hitachi
Supply Agreement; PROVIDED, HOWEVER, that nothing
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herein shall obligate MIC to satisfy any minimum
purchase requirements under the Hitachi Supply
Agreement.
(b) After the Closing, Intek will not take, nor will
it permit MUSA to take, any action that would
result in the termination or terminability of the
Hitachi Supply Agreement prior to its scheduled
termination date, and Intek will not take, nor
will it permit MUSA to take, any action that would
result in MUSA's failure to be included within the
definition of "Midland Affiliate" as set forth in
the Hitachi Supply Agreement; PROVIDED, HOWEVER,
that MIC and Xxxxxxxx acknowledge that Intek
intends to continue to purchase 220 MHZ products
from Securicor and that Intek shall have no
obligation to satisfy any minimum purchase
requirements under the Hitachi Supply Agreement.
Intek shall, however, use its best efforts in a
commercially reasonable manner to market and sell
MIC and Hitachi products at a volume comparable to
historical levels achieved by MIC in its conduct
of the U.S. LMR Distribution Business.
9.8 REMOVAL OF RETAINED ASSETS. Within ten (10) Business
days after the Closing, MIC shall remove from the
leased facility located at 0000 Xxxxxxx Xxxxxx, Xxxxxx
Xxxx, Xxxxxxxx 00000 (the "Facility") all inventory
and other assets which are not Acquired Assets. Intek
shall cause MUSA to provide MIC such access to the
Facility as MIC shall reasonably require to remove such
assets as promptly as practicable.
10. OPTION TO ACQUIRE CAPITAL STOCK OF MUSA.
----------------------------------------
10.1 GRANT OF OPTION. Intek hereby grants to MIC an option
(the "Option") to acquire all of the outstanding and
issued capital stock of MUSA upon satisfaction of the
requirements and payment of the amounts set forth in
Section 10.2 of this Agreement on or before the Option
Exercise Date and provided, in any event, that all of
the Obligations under the Securicor Loan Agreement
shall have been repaid in full on or before MIC's
exercise of the Option. Notwithstanding anything to
the contrary in this Agreement, MIC may assign the
option to an Affiliate of MIC. Upon the satisfaction
of the requirements set forth in Section 10.2 Intek
shall, on the Option Exercise Date, deliver to MIC, or
to such Person as MIC shall assign the Option, as the
case may be, all of the outstanding and issued capital
stock of MUSA, free and clear of all liens and
encumbrances.
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10.2 OPTION EXERCISE REQUIREMENTS. For MIC to exercise the
Option, MIC or an Affiliate of MIC, must satisfy the
following on or before the Option Exercise Date:
(a) All of the Obligations then existing under the
Securicor Loan Agreement shall have been paid in full
as of the Option Exercise Date.
(b) MIC or an MIC Affiliate shall assume all of the
outstanding liabilities of MUSA incurred in
connection with its conduct of the U.S. LMR
Distribution Business; and
(c) MIC shall pay to Intek such number of shares of the
Common Stock of Intek as shall be equal to the
Purchase Price of this Agreement and shall deliver to
Intek all certificates evidencing such shares of
Common Stock, with stock powers duly executed in
blank for transfer.
10.3 RELEASE OF RIGHTS AND OBLIGATIONS. Except with respect
to any claim MIC may have against Intek for a breach of
Intek's obligations under Section 9.4(e) of this
Agreement (Intek's obligation not to, and not to permit
MUSA to, use any proceeds of the Securicor Loan
Agreement other than for the benefit of MUSA), all
representations, warranties and covenants under this
Agreement shall cease and terminate immediately upon
the transfer of the MUSA shares to MIC in connection
with MIC's exercise of the Option.
10.4 DELIVERY OF MUSA CAPITAL STOCK. Upon MIC's or an MIC
Affiliate payment of the Exercise Price and the payment
in full to Securicor Communications Limited by MIC or
Intek, as the case may be, of all of the Obligations
then outstanding under the Securicor Loan Agreement as
provided in Section 10.2, Intek shall deliver to MIC or
such MIC Affiliate one or more certificates evidencing
all of the outstanding capital stock of MUSA, free and
clear of all liens and encumbrances.
10.5 REPRESENTATIONS REGARDING MUSA CAPITAL STOCK. Intek
hereby represents and warrants to MIC that all of the
shares of capital stock of MUSA to be delivered to MIC
or its Affiliate upon exercise of the Option will be
duly authorized, validly issued, fully paid and
nonassessable and not subject to any preemptive rights,
and shall be free and clear of any liens, encumbrances
or restrictions as of the exercise of the Option.
10.6 OPTION PERIOD. The Option shall be exercisable by MIC
or its assigns during the period commencing upon
Intek's written notice to MIC and Xxxxxxxx that the
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Securicor Agreement has been terminated and continuing through
the Option Exercise Date.
11. INDEMNIFICATION
---------------
11.1 MIC'S AND XXXXXXXX' INDEMNIFICATION OBLIGATIONS. From
and after the Closing, but subject to the conditions
and limitations of this Agreement or any other MIC
Document, MIC and Xxxxxxxx shall defend, indemnify and
save Intek and its directors, officers, employees,
Affiliates, agents, successors and assigns harmless
from and against any and all loss, cost, damage or
expense (including attorneys' fees), net of any tax
benefits (collectively "Damages") whatsoever resulting
from or arising out of (a) any breach or inaccuracy of
any covenant, representation or warranty or obligation
of MIC contained in this Agreement, (b) any liability
or obligation of MIC other than the Assumed
Liabilities, whether arising prior to, on or after the
Effective Date, (c) any claims by any employee or
former employee of MIC (whether or not a Transferred
Employee) arising out of the employment or termination
of employment of the employee on or prior to the
Closing Date or as a result of transactions
contemplated by this Agreement, including any claim
pursuant to the Worker Adjustment and Retraining
Notification Act, and (d) any liability for brokerage
or finder's fee or commission claimed by any person
based upon the actions or alleged actions of MIC for or
on account of this Agreement or the transactions
contemplated hereby.
11.2 INTEK'S INDEMNIFICATION OBLIGATIONS. From and after
the Closing, but subject to the conditions and
limitations this Agreement, Intek shall defend,
indemnify and save MIC, Xxxxxxxx and their respective
directors, officers, employees, Affiliates, agents,
successors and assigns harmless from and against any
and all Damages whatsoever resulting from or arising
out of (a) any breach or inaccuracy of any covenant,
representation or warranty of Intek contained in this
Agreement or any other Intek Document, (b) the conduct
of the U.S. LMR Distribution Business after the
Closing, (c) the Assumed Liabilities, and (d) any
liability for brokerage or finder's fee or commission
claimed by any person based upon the actions or alleged
actions of Intek for or on account of this Agreement or
the transactions contemplated hereby.
11.3 NOTICE AND OPPORTUNITY TO DEFEND.
(a) In the event that any action, suit, proceeding,
investigation, claim or demand is asserted against
or sought to be collected from an indemnified
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party (a "Third Party Claim") for which such
indemnified party (each a "Beneficiary") intends to
assert a right of indemnity under Section 11.1 or
11.2, the Beneficiary shall notify the other party
(the "Indemnitor") with reasonable promptness of
such Third Party Claim, specifying, to the extent
known, the nature, circumstances and amount of the
Third Party Claim (a "Third Party Claim Notice").
The Indemnitor shall have 14 days from its receipt
of a Third Party Claim Notice to notify the
Beneficiary whether the Indemnitor disputes the
Beneficiary's right of indemnity with respect to
such Third Party Claim and if the Indemnitor does
not dispute such right, whether or not the
Indemnitor desires to defend the Beneficiary against
such Third Party Claim.
(b) If the Indemnitor notifies the Beneficiary within
the 14-day period that the Indemnitor does not
dispute the Beneficiary's right of indemnity and
the Indemnitor desires to defend against such
Third Party Claim, then the Indemnitor shall have
the right to assume and control, at its sole cost
and expense, the defense of such Third Party Claim
by appropriate proceedings with counsel reasonably
acceptable to the Beneficiary. Beneficiary may
participate in, but not control, any such defense
or settlement, at its sole cost and expense.
(c) If the Indemnitor disputes the Beneficiary's
right of indemnity with respect to a Third Party
Claim, or does not dispute such right of
indemnity but fails to promptly assume and
prosecute the defense of such Third Party Claim,
then the Beneficiary shall be entitled to assume
and control the defense of such Third Party Claim,
and the Beneficiary shall be entitled to
indemnification for the cost of such defense.
(d) The party responsible for the defense of any Third
Party Claim (the "Responsible Party") shall, to
the extent reasonably requested by the other
party, keep such other party informed as to the
status of any Third Party Claim for which such
party is not the Responsible Party, including,
without limitation, all settlement negotiations
and offers.
(e) Neither MIC or Xxxxxxxx, on the one hand, nor Intek,
on the other hand, shall enter into any settlement of
any Third Party Claim without the prior written
consent of the other party. The Responsible Party
shall promptly notify the other party of each
settlement offer (including whether
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or not the Responsible Party is willing to accept the
proposed settlement with respect a Third Party
Claim). Such other party agrees to notify the
Responsible Party with reasonable promptness whether
or not such party is willing to accept the proposed
settlement offer. If the party other than the
Responsible Party fails to consent to any settlement
offer of a Third Party Claim that only involves the
payment of a sum of money and has no other
consequence, such other party may continue to contest
or defend such Third Party Claim and, in such event,
the maximum total indemnity with respect to such
Third Party Claim (including the reasonable costs and
expenses of contesting or defending such Third Party
Claim incurred after the party other than the
Responsible Party fails to consent to such settlement
offer) shall not exceed the amount of such settlement
offer.
(f) In the event that a Beneficiary has a claim for
indemnity that does not involve a Third Party
Claim (a "Direct Claim"), Intek, MIC or Xxxxxxxx,
as the case may be, (a "Claimant") shall notify
the Indemnitor of such Direct Claim with
reasonable promptness, specifying, to the extent
known, the nature, circumstances and amount of
such Direct Claim (a "Direct Claim Notice"). If
the Indemnitor notifies the Claimant that it
disputes the claim for indemnity with respect to a
Direct Claim set forth in a Direct Claim Notice,
the resolution of such Direct Claim shall be
determined in accordance with Section 14.13.
(g) All claims for indemnification under this Article 10
must be asserted by Intek or MIC or Xxxxxxxx, as the
case may be, prior to twelve (12) months after the
Closing or with respect to any covenant, twelve (12)
months after the later of the Closing or the breach
of such covenant.
(h) For purposes of this Agreement, the amount of
damages of Intek or MIC or Xxxxxxxx with respect
to Third Party Claims and Direct Claims shall be
reduced to the extent of any applicable insurance
proceeds or other third party recovery received by
it. Intek or MIC or Xxxxxxxx, as applicable,
shall timely file claims for insurance proceeds
and/or defense and pursue all other third party
reimbursement rights with respect to any Damages
sustained by them.
(i) Notwithstanding Sections 11.1 and 11.2 of this
Agreement, neither Intek nor MIC shall be entitled
to indemnification under this Article 11 with
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respect to any breach of any representation or
warranty contained in this Agreement or any other MIC
Document or Intek Document unless and until its
aggregate claims exceeds Fifty Thousand Dollars
($50,000) calculated on a cumulative basis and not on
a per claim basis. Once indemnifiable claims for
breaches of representations and warranties by MIC or
Intek exceed $50,000 in the aggregate, such party
shall be entitled to payment for all amounts
indemnifiable under this Section 11 for such claims
to the extent they exceed $50,000.
(j) Notwithstanding anything to the contrary contained
in this Agreement:
(1) If the Securicor Transaction does not Close
and MIC does not receive the upward price
adjustment set forth in Section 3.1(b)(2)(A)
of this Agreement, then (A) the aggregate
liability of MIC and Xxxxxxxx under Section
11.1(a) shall not exceed $30,000, and (B) the
aggregate liability of Intek under Section
11.2(a), other than for Damages incurred by
MIC or Xxxxxxxx as a direct result of (x)
Intek's breach of its covenants set forth in
Sections 3.2, 8.1, or 10 of this Agreement
(y) or any breach or inaccuracy of Intek's
representations and warranties contained in
Section 6.2(c), shall not exceed $30,000.
(2) If the Securicor Transaction does Close and
MIC does receive the upward price adjustment
set forth in Section 3.1(b)(2)(A) of this
Agreement, then (A) the aggregate liability
of MIC and Xxxxxxxx under Section 11.1(a),
other than for Damages incurred by Intek as a
direct result of MIC's breach of its
representations and warranties set forth in
Section 6.1 of this Agreement and/or its
covenants set forth in Sections 2.2 and 13 of
this Agreement, shall not exceed $600,000 and
(B) the aggregate liability of Intek under
Section 11.2(a), other than for Damages
incurred by MIC or Xxxxxxxx as a direct
result of Intek's breach of its covenants set
forth in Sections 3.2 and 8.1 of this
Agreement, shall not exceed $600,000.
11.4 PAYMENT OF DAMAGES. Claims to an indemnified party under this
Section 11 shall be paid in shares of Intek's Common Stock,
an the number of shares of Intek's Common Stock to be
transferred in satisfaction of such Claims and the terms of
such transfer shall be
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determined by dividing the amount of such Claims by the
Applicable Average Share Value. For purposes hereof, the
"Applicable Average Share Value" shall be equal to the average
of the Daily Closing Prices for each of the ten Business Days
immediately preceding the date on which the amount of such
Claims are determined.
11.5 EXCLUSIVE REMEDY. From and after the Closing, the
indemnification rights set forth in this Section 11 and
the right to specific performance under Section 14.12
of this Agreement shall be the sole and exclusive
remedy for claims or Damages resulting from any
misrepresentation, breach or inaccuracy of any
representation, warranty, covenant or agreement of
Intek or MIC contained in this Agreement, and none of
MIC or Intek shall assert any such claim except as
provided in this Section 11; PROVIDED, HOWEVER, that
the foregoing shall not apply to any claims or Damages
based on fraud or a breach by any party hereto of its
obligations under Section 13 of this Agreement.
11.6 SUBORDINATION TO SECURICOR. MIC's rights to indemnification
hereunder shall be subordinate to Securicor's rights under the
Securicor Loan Agreement. MIC shall take no action to
interfere with Securicor's ability to exercise its rights
under the Securicor Loan Agreement with respect to the
Collateral.
12. ASSIGNMENT AND SUBLICENSE. Neither party hereto may
transfer its rights or obligations hereunder, except that
MIC may assign in part or in whole its rights and
obligations hereunder to SCL, Inc., a Delaware corporation
and the sole shareholder of MIC ("SCL, Inc.") or to
Xxxxxxxx, and SCL, Inc. or Xxxxxxxx in turn, may assign in
part or in whole its rights and obligations hereunder to any
Affiliate of SCL, Inc. or Xxxxxxxx, MIC, SCL, Inc.,
Xxxxxxxx or any Affiliate of MIC or SCL, Inc. or Xxxxxxxx
may appoint distributors and sublicensees in accordance with
the U.S. Trademarks License Agreement, and Intek may assign
its rights and obligations hereunder to MUSA pursuant to the
terms and the Intek Assignment and Assumption Agreement;
PROVIDED, HOWEVER, that no such assignment by Intek, MIC,
SCL, Inc. or Xxxxxxxx shall relieve the assignor thereof of
any of its obligations under this Agreement without the
prior written consent of MIC and Xxxxxxxx. Subject to the
foregoing, this Agreement shall be binding upon and shall
inure to the benefit of the legal representatives,
successors and assigns of the parties hereto. No assignment
of this Agreement, nor any sale, assignment or transfer
pursuant to this Section 12, shall release the assignor from
any of its duties, obligations or liabilities under this
Agreement unless the other party shall consent to such
release in writing. Each of MIC and Xxxxxxxx acknowledges
the Assignment and Assumption Agreement and consent to such
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assignment pursuant to the terms and conditions of the letter agreement
among MIC, Xxxxxxxx, Intek and MUSA dated September 20, 1996.
13. NON-COMPETE.
-----------
13.1 MIC/XXXXXXXX NON-COMPETE. Each of Xxxxxxxx and MIC
agrees that, for a period of three (3) years following
the Closing, neither MIC, Xxxxxxxx, nor their
respective subsidiaries will sell, distribute or
otherwise transfer LMR Products in the U.S., integrate
LMR products from any source into LMR systems within
the U.S., or solicit or encourage any dealer of LMR
Products to modify or terminate its arrangements with
Intek regarding the distribution of any LMR Products;
PROVIDED, HOWEVER, that this covenant shall not apply
(a) with respect to the performance by MIC or Xxxxxxxx
or their respective subsidiaries of their obligations
under any agreement which is not included in the
Acquired Assets and which is in existence on the date
hereof, as set forth on Schedule 13.1 to this
Agreement, and (b) to the extent that any law,
regulation or order of a Governmental Authority would
be violated thereby.
13.2 INTEK NON-COMPETE. Intek agrees that Intek will not, and Intek
will not permit MUSA or any other subsidiary of Affiliate of
Intek to, directly or indirectly sell, distribute or otherwise
transfer, or to use the MIC name to sell, distribute or
transfer:
(a) any products bearing the U.S. Trademarks to end-
users outside of the U.S.; or
(b) Midland Consumer Products bearing the U.S.
Trademarks in the U.S.
14. MISCELLANEOUS
-------------
14.1 AMENDMENTS. This Agreement may be amended only by a
writing executed by the parties.
14.2 ENTIRE AGREEMENT. This Agreement amends, supersedes
and replaces in its entirety the Other Agreement.
This Agreement and the other agreements expressly
provided for in this Agreement set forth the entire
understanding of the parties to this Agreement and
supersede all prior contracts, agreements,
arrangements, communications, discussions,
representations and warranties, whether oral or
written, between the parties.
14.3 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of
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New York without giving effect to its principles of conflict
of laws.
14.4 NOTICES. Any notice, request or other communication
required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given
when received if personally delivered or after being
sent by telecopy, with confirmed answer back, or within
1 business day of being sent by established overnight
courier, to the parties at their respective addresses
set forth below:
To Xxxxxxxx: c/x Xxxxxxxx Capital Limited
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx
Xxxxxx, X0X 0X0
Attn: Xx. Xxxxx X'Xxxx
With a copy to: Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxx Xxxx Xxxxxx, Esq.
Fax: (000) 000-0000
To MIC: Midland International Corporation
c/x Xxxxxxxx Capital Limited
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx
Xxxxxx, X0X 0X0
Attn: Xx. Xxxxx X'Xxxx
With a copy to: Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxx Xxxx Xxxxxx, Esq.
Fax: (000) 000-0000
To Intek: Intek Diversified Corporation
000 Xxxx 000xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Mr. Xxxxxxxx Xxxxxx
With a copy to: Manatt, Xxxxxx & Xxxxxxxx PLL
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Any party by written notice to the other may change the
address or the persons to whom notices or copies shall be
directed.
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14.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
and all of which together will constitute one and the same
instrument.
14.6 BULK SALES Intek waives compliance by MIC with the provisions of
the so-called "bulk sales" laws of any state.
14.7 WAIVERS. Any waiver by any party of any violation of, breach of
or default under any provision of this Agreement or any other
agreements provided for in this Agreement, by the other party
shall not be construed as, or constitute, a continuing waiver of
such provision, or waiver of any other violation of, breach of or
default under any other provision of this Agreement or any other
agreements provided for in this Agreement.
14.8 THIRD PARTIES. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any
person or entity other than Intek, MIC, Xxxxxxxx and their
Affiliates any rights or remedies under or by reason of this
Agreement.
14.9 SCHEDULES AND EXHIBITS. The Intek Disclosure Schedules, the MIC
Disclosure Schedules and the other Schedules and Exhibits
attached to this Agreement are incorporated in this Agreement and
shall be part of this Agreement for all purposes as modified by
the Intek Officer's Certificate or the MIC/Xxxxxxxx Officers'
Certificates, as the case may be.
14.10 HEADINGS. The headings in this Agreement are solely for
convenience of reference and shall not be given any effect in the
construction or interpretation of this Agreement.
14.11 INDEPENDENT CONTRACTOR. Each party is and shall remain an
independent contractor. Nothing in this Agreement shall be deemed
to establish a partnership, joint venture, or agency relationship
between the parties. Neither party may obligate or bind the other
party in any manner to a third party.
14.12 SPECIFIC PERFORMANCE. Intek and MIC acknowledge and agree that
any breach by the other party of the foregoing provisions,
including, without limitation, any covenant of each party, may
cause the injured party irreparable injury for which there is no
adequate remedy of law. Therefore, Intek and MIC expressly agree
that MIC or Intek shall be entitled, as the case may be, in
addition to any remedy available, injunctive or other equitable
relief to require specific performance or prevent a breach of the
foregoing provisions.
14.13 ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall
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be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrator(s)
may be entered in any court having
jurisdiction thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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{Signature Page for Amended and Restated Sale of Assets and Trademark
Agreement dated as of September 19, 1996}
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the date first above written.
INTEK DIVERSIFIED CORPORATION
By:__________________________
Name:
Title:
XXXXXXXX CAPITAL LIMITED
By:__________________________
Name:
Title:
MIDLAND INTERNATIONAL CORPORATION
By:__________________________
Name:
Title:
80
EXHIBIT A
---------
COMPUTER SERVICES AGREEMENT
THIS AGREEMENT made the 19th day of September, 1996,
BETWEEN:
XXXXXXXX CAPITAL LIMITED, a corporation incorporated under the
laws of the Province of Ontario (hereinafter referred to as
"SCL"),
OF THE FIRST PART,
- and -
MIDLAND U.S.A., INC., a corporation incorporated under the
laws of the State of Delaware (hereinafter referred to as
"MUSA"),
OF THE SECOND PART.
WHEREAS pursuant to an Amended and Restated Sale of Assets and
Trademark Agreement (the "Asset Agreement") dated as of September 19, 1996, made
between SCL, Intek Diversified Corporation ("Intek") and Midland International
Corporation ("MIC"), a wholly-owned subsidiary of SCL, MIC has conveyed to MUSA,
inter alia, certain U.S. Trademarks (as defined in the Asset Agreement) thereby
permitting MUSA to distribute certain Midland land mobile radio products in the
United States;
AND WHEREAS to assist MUSA in carrying on its business, MUSA requires
access to the IBM AS400 computer system, including hardware and software,
currently owned by SCL and located at SCL's premises at 000 Xxxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxx (the "Computer") and SCL has agreed to provide such access on
the terms and conditions provided for herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
respective covenants, agreements, representations, warranties and indemnities
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
covenant and agree as follows:
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ARTICLE I - INTERPRETATION
1.1 Currency
Unless otherwise indicated, all dollar amounts referred to in this
Agreement are expressed in Canadian funds.
1.2 Number, Gender and Persons
In this Agreement, words importing the singular number only shall
include the plural and vice versa, words importing gender shall include all
genders and words importing persons shall include individuals, corporations,
partnerships, associations, trusts, unincorporated organizations, governmental
bodies and other legal or business entities.
1.3 Entire Agreement
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether written or oral. There are
no conditions, covenants, agreements, representations, warranties or other
provisions, express or implied, collateral, statutory or otherwise, relating to
the subject matter hereof except as herein provided.
1.4 Time of Essence
Time shall be of the essence of this Agreement.
1.5 Applicable Law
This Agreement shall be construed, interpreted and enforced in
accordance with, and the respective rights and obligations of the parties shall
be governed by, the laws of the Province of Ontario and the federal laws of
Canada applicable therein, and each party hereby irrevocably and unconditionally
submits to the non-exclusive jurisdiction of the courts of such province and all
courts competent to hear appeals therefrom.
1.6 Severability
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct.
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1.7 Successors and Assigns
This Agreement shall enure to the benefit of and shall be binding on
and enforceable by the parties and their successors and permitted assigns.
1.8 Amendment and Waivers
No amendment or waiver of any provision of this Agreement shall be
binding on any party unless consented to in writing by such party. No waiver of
any provision of this Agreement shall constitute a waiver of any other
provision, nor shall any waiver constitute a continuing waiver unless otherwise
expressly provided.
ARTICLE II - COMPUTER SERVICES
2.1 Computer Services
During the term of this Agreement, SCL agrees to allow MUSA to have
remote access via telephone line to the Computer for data processing purposes
solely in connection with the land mobile radio business of MUSA using the U.S.
Trademarks (as defined in the Asset Agreement). SCL shall also provide the
services of one MIS support person on a full-time basis and one MIS support
person on a half-time basis to provide operating support to MUSA and will
provide such other administrative support personnel as requested from time to
time by MUSA.
2.2 Obligations of XXXX
XXXX shall have the following obligations in respect of the use of the
Computer and the additional support services provided by SCL pursuant to section
2.1 above:
(a) MUSA shall pay all fees provided for hereunder on a timely basis
in accordance with the payment schedule set forth in section 2.4
hereof;
(b) MUSA shall pay in advance for any software or programming
modifications required in connection with the use of the Computer
by MUSA;
(c) MUSA shall be responsible for acquiring and maintaining, at its
expense and at its premises, all computer terminals, equipment
and telephone line connections necessary for MUSA to have remote
access via telephone line to the Computer. MUSA shall ensure that
all such terminals, equipment and telephone connections are
compatible with the Computer;
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(d) MUSA shall only enter into the Computer data which is compatible
with the Computer; and
(e) MUSA shall be responsible for maintaining, under its care,
adequate backup materials that will enable the regeneration of
tape files, disk files, printer output and other data in the
event of loss, damage or destruction thereof.
2.3 Obligations of SCL
SCL shall use all reasonable efforts to maintain the Computer in
working order and any personnel provided by SCL for support to MUSA pursuant to
this Agreement shall be acceptable to MUSA, acting reasonably. Notwithstanding
the foregoing, SCL shall have no responsibility for the accuracy of any
information resulting from the use of the Computer by MUSA or any interruption
in access to or use of the Computer by MUSA as a result of interruption in
telephone line connections or any other reasons beyond the control of SCL,
including, without limitation, malfunction or breakdown. MUSA is solely
responsible for verifying the accuracy and completeness of any output generated
by the use of the Computer. MUSA acknowledges that SCL does not warrant the
accuracy of any data generated by the use of the Computer by MUSA and has no
liability for loss to MUSA as a result of any accuracies in such output. Except
as specifically provided in this Agreement, there are no warranties or
conditions, express or implied, including, but not limited to, any implied
warranties or conditions of merchantable quality or fitness for a particular
purpose, made by SCL with respect to the use of the Computer by MUSA or any
other items provided hereunder or any transaction contemplated hereby.
2.4 Charges for use of Computer
MUSA shall pay to SCL monthly, in advance, the sum of $20,500 for
access to the Computer, which charges shall include insurance and routine
maintenance. In addition, MUSA shall pay to SCL, as incurred, 65% of any
extraordinary hardware or software maintenance charges incurred in connection
with the Computer. Charges for any software or programming modifications
requested by MUSA will be estimated and paid in advance by MUSA and shall be the
sole responsibility of MUSA. MUSA shall also pay to SCL monthly, in advance, the
sum of $6,000 in respect of the persons providing MIS support pursuant to
section 2.1 hereof and shall pay for the services of any other administrative
support personnel requested by MUSA and provided by SCL at their loaded hourly
rate as established from time to time by SCL forthwith upon receipt of a xxxx
from SCL in respect of such services, plus all reasonable out-of-pocket expenses
incurred by SCL in respect of providing the services of such personnel.
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ARTICLE III - INDEMNIFICATION
3.1 Indemnification
MUSA shall indemnify and save harmless SCL and its directors, officers,
employees and agents from any claims, demands, proceedings, losses, damages,
liabilities, deficiencies, costs and expenses (including, without limitation,
all legal and other professional fees and disbursements, interests, penalties
and amounts paid in settlements) arising directly or indirectly as a consequence
of SCL providing the services contemplated hereby, except to the extent that
such losses may be a consequence of the gross negligence or wilful misconduct of
such person.
ARTICLE IV - CONFIDENTIALITY
4.1 Confidentiality by SCL
All data input by MUSA into the Computer, the output of the Computer
arising from its use by MUSA and any documentation related thereto, together
with any information relating to MUSA's business, shall be kept confidential by
SCL. SCL shall not disclose, divulge or use the contents of same to any third
party without the prior written consent of MUSA, unless compelled to so do by
process of law. However, if such data is publicly available or is rightfully
obtained by third parties, SCL shall bear no responsibility for its disclosure,
inadvertent or otherwise.
4.2 Confidentiality by XXXX
XXXX shall keep confidential all information relating to the Computer
and all data stored thereon relating to SCL or any other person (other than MUSA
and its affiliates) and shall not disclose or divulge same to any third party
without the prior written consent of SCL, unless compelled to do so by process
of law, and further agrees not to make copies of any software forming part
thereof or any data relating to SCL or any other person without the prior
written approval of SCL.
ARTICLE V - TERM
5.1 Term
This Agreement shall have an initial term of one year from the date of
execution and shall automatically be renewed for subsequent one year terms
unless terminated by either party on written notice to the other given not less
than thirty days prior to any anniversary date of the execution hereof.
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5.2 Early Termination
Notwithstanding section 5.1, this Agreement may be terminated by either
party:
(a) if the other party is in default of any of its obligations
hereunder and the default continues for a period of ten days
or such further time as may be reasonable, given the nature of
the default, after notice of the default has been provided to
the defaulting party, provided that if such default is
incapable of being remedied, termination may be immediate;
(b) if the other party becomes insolvent, or makes an assignment
for the general benefit of creditors; or any proceedings are
commenced by or against the other party under any bankruptcy
or insolvency laws or proceedings for the appointment of a
custodian, receiver or receiver-manager or any other official
with similar powers for the other party are commenced and are
not dismissed or withdrawn within sixty days; or if the other
party ceases to carry on business.
ARTICLE VI - MISCELLANEOUS
6.1 Arbitration
Any controversy or claim arising out of or in relation to this
Agreement, or the breach thereof, shall be referred to the arbitration of a
single arbitrator, if the parties agree upon one, otherwise to three
arbitrators, one to be appointed by each party and a third to be chosen by the
first two named before they enter upon the business of arbitration. Such
arbitration shall be conducted under the Arbitrations Act (Ontario). The award
and determination of the arbitrator or arbitrators or any two of the three
arbitrators shall be binding upon the parties and their respective successors
and assigns.
6.2 Additional Charges
The charges provided for in Article II hereof are exclusive of federal,
provincial or local municipal taxes, including, but not limited to, retail
sales, use, excise, goods and services or similar taxes or any duties. MUSA
shall pay or reimburse to SCL all amounts, if any, paid or payable on account of
any taxes, excluding taxes based on the net income of SCL, which are levied on
the charges to be paid by MUSA pursuant to this Agreement.
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6.3 Notices
Any notice, designation, communication, request, demand or other
document, required or permitted to be given or sent or delivered hereunder to
any party hereto shall be in writing and shall be sufficiently given or sent or
delivered if it is:
(a) delivered personally to such party or to an officer or
director of such party;
(b) mailed to the party entitled to receive it by registered mail,
postage prepaid; or
(c) sent by facsimile.
Notices shall be sent to the following addresses or facsimile numbers:
(i) in the case of MIC:
Suite 1050
0000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx X'Xxxx
Facsimile: (000) 000-0000
(ii) in the case of MUSA:
0000 X. Xxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
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with copies to:
Intek Diversified Corporation
000 Xxxx 000xx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Xxxxxxx Xxxxxxx & Xxxxxx P.L.L.
Xxx Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or facsimile number as the party entitled to or
receiving such notice, designation, communication, request, demand or other
document shall, by a notice given in accordance with this section, have
communicated to the party giving or sending or delivering such notice,
designation, communication, request, demand or other document.
Any notice, designation, communication, request, demand or other
document given or sent or delivered as aforesaid shall:
(a) if delivered personally as aforesaid, be deemed to have been
given, sent, delivered and received on the date of delivery;
(b) if mailed by registered mail, postage prepaid, as aforesaid, be
deemed to have been given, sent, delivered and received on the
fourth Business Day following the date of mailing, unless at any
time between the date of mailing and the fourth Business Day
thereafter there is a discontinuance or interruption of regular
postal service, whether due to strike or lockout or work
slowdown, affecting postal service at the point of dispatch or
delivery or any intermediate point, in which case the same shall
be deemed to have been given, sent, delivered and received in the
ordinary course of the mails, allowing for such discontinuance or
interruption of regular postal service; and
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(c) if sent by facsimile machine, be deemed to have been given,
sent, delivered and received on the date the sender receives
the facsimile answer back confirming receipt by the recipient.
6.4 Assignment
Except for the assignment by SCL of its rights, benefits and
obligations hereunder to one of its affiliates, which may be done without the
consent of MUSA, neither party may assign its rights, benefits or obligations
under this Agreement without the prior written consent of the other.
6.5 Counterparts
This Agreement may be executed in counterparts, each of which shall
constitute an original and all of which taken together shall constitute as one
and the same instrument.
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IN WITNESS WHEREOF this Agreement has been executed by the parties.
XXXXXXXX CAPITAL LIMITED
By: /s/ Xxxxx X'Xxxx
---------------------------------
Xxxxx X'Xxxx
Executive Vice-President
MIDLAND U.S.A., INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: President
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EXHIBIT B
---------
ESCROW AGREEMENT
This ESCROW AGREEMENT, dated as of September 19, 1996 (the "Closing
Date"), among INTEK DIVERSIFIED CORPORATION, a Delaware corporation ("Intek"),
MIDLAND INTERNATIONAL CORPORATION, a Delaware corporation ("Midland"), and
AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York corporation, as escrow agent
("Escrow Agent"). The Escrow Agent is the transfer agent for issuance of Common
Stock. This Escrow Agreement shall also constitute written instruction by Intek
to Escrow Agent as Intek's transfer agent.
This is the Escrow Agreement referred to in Section 3.1(a)(2) of the
Amended and Restated Sale of Assets and Trademark Agreement dated as of the date
hereof (the "Amended Assets and Trademark Agreement") among Intek, Midland and
Xxxxxxxx Capital Limited, an Ontario corporation which indirectly owns all of
the capital stock of Midland.
Pursuant to the terms of a certain Stock Purchase Agreement dated as of
June 18, 1996, as amended by the Amendment No. 1 to Stock Purchase Agreement
dated as of the date hereof, between Intek and Securicor Communications Limited,
a corporation formed under the laws of England and Wales ("Securicor"), Intek
agreed to acquire all of the outstanding capital stock, other than certain
shares of preferred stock, of Securicor Radiocoms Limited, a corporation formed
under the laws of England and Wales and a wholly owned subsidiary of Securicor,
in exchange for 25,000,000 shares of Common Stock (the "Securicor Transaction").
It is currently contemplated that the Securicor Transaction will close in the
fourth quarter of 1996. Intek, Xxxxxxxx and Midland acknowledge that if the
Securicor Transaction closes, Intek will be able to obtain additional
efficiencies and synergies in the operations of the combined businesses being
acquired by Intek, and further that the early consummation of the transaction
among Intek, Midland and Xxxxxxxx will be a material benefit to Intek, and that,
therefore, if the Securicor Transaction does close the purchase price of the
U.S. LMR Distribution Business (the "Purchase Price") should be increased by an
amount of up to 2,350,000 shares of Common Stock, subject to certain downward
adjustment to reflect Net Operating Losses (as defined in the Amended Assets and
Trademark Agreement) incurred by Midland USA, a Delaware corporation and wholly
owned subsidiary of Intek ("MUSA"), in its conduct of the U.S. LMR Distribution
Business.
Pursuant to the terms of the Amended Assets and Trademark Agreement,
Midland agreed to sell to Intek, or to otherwise provide Intek the benefit of,
certain Acquired Assets (as defined in the Amended Assets and Trademark
Agreement) including that certain Agreement (the "Hitachi Supply Agreement")
dated May 12, 1994, between Midland and Hitachi Denshi, Ltd., a Japanese
corporation ("Hitachi"), whereby Hitachi agreed to manufacture and sell to
Midland certain mobile radios ("Hitachi
91
Products") and granted Midland an exclusive right to sell Hitachi Products in a
certain territory, as such Hitachi Supply Agreement related to the sale of
Hitachi Products in the United States and its territories and possessions. The
terms of the Hitachi Supply Agreement provide, among other things, that Hitachi
may terminate the Hitachi Supply Agreement if Midland transfers "an important
part of [Midland's] . . . stock, assets or business to a third party . . . ."
Pursuant to the terms of the Amended Assets and Trademark Agreement, if the
Securicor Transaction is consummated but the Hitachi Supply Agreement is
terminated under certain circumstances prior to May 31, 1997, the Purchase Price
shall be subject to a reduction of up to 500,000 shares of Common Stock.
The parties, intending to be legally bound, hereby agree as follows:
1. DEFINED TERMS.
(a) Defined terms used in the Amended Assets and Trademark
Agreement and not expressly defined herein shall have the meanings set forth in
the Amended Assets and Trademark Agreement.
(b) "Certified Court Order" shall mean a final non-appealable
order of a court of competent jurisdiction accompanied by a legal opinion of
counsel for the presenting party, satisfactory to the Escrow Agent, to the
effect that such court order is final and non-appealable. Escrow Agent shall
upon receipt and without further investigation, act upon and comply with the
terms of any Certified Court Order.
2. ESTABLISHMENT OF ESCROW.
(a) Intek hereby irrevocably instructs the Escrow Agent as
Intek's transfer agent to issue to and deposit with Escrow Agent stock
certificate(s) representing 2,350,000 shares of the common stock, par value $.01
per share, of Intek (the "Initial Common Stock") pursuant to Section 3.1(a)(2)
of the Amended Assets and Trademark Agreement (as increased from time to time by
any and all stock splits, dividends and other distributions paid in respect of
the Escrow Fund (as defined herein), including future stock dividends, and as
reduced from time to time by any disbursements, or losses on investments, the
"Common Stock") (the "Escrow Fund"). Such stock certificates are issued in the
name of Escrow Agent and are accompanied by duly executed assignments, with
signature(s) guaranteed, as shall be necessary to enable the Escrow Agent to
deliver the Escrow Fund in whole or in part to Midland as provided in this
Escrow Agreement. Escrow Agent acknowledges receipt thereof.
(b) Midland hereby agrees to deposit with Escrow Agent such
other duly executed documents, as shall be necessary to enable Escrow Agent to
return the Escrow Fund in whole or in part to Intek as provided in this Escrow
Agreement.
(c) Escrow Agent hereby agrees to act as escrow agent and to
hold, safeguard, invest and disburse the Escrow Fund pursuant to the terms and
conditions hereof.
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3. TITLE TO ESCROW FUND.
(a) Until the earlier of the date of the occurrence of a Price
Adjustment Event (as defined in Section ) or the disbursement to Midland of all
or part of the Escrow Fund as provided herein, Intek shall hold title thereto
and shall retain beneficial ownership and voting control of the Escrow Fund and
neither Midland nor its assignees shall have the right to:
(i) sell, transfer, assign, mortgage, pledge, subject to
any lien, charge or encumbrance, hypothecate or
otherwise transfer any right, title or interest, or
(ii) exercise any voting or other consensual rights with
respect to the Escrow Fund.
Prior to the occurrence of a Price Adjustment Event, Escrow Agent shall not vote
the shares of Common Stock contained in the Escrow Fund except as expressly
instructed by Intek; PROVIDED, HOWEVER, that with respect to the vote of Intek's
Stockholders necessary to amend Intek's Certificate of Incorporation and approve
the Stock Purchase Agreement and the transactions contemplated thereby as
necessary to consummate the Securicor Transaction (the "Proposed Transactions"),
Escrow Agent shall vote the shares of Common Stock contained in the Escrow Fund,
and Intek shall conduct the count of the vote of stockholders in a two-tier
voting process, as follows:
(x) Intek shall first count the vote of the Common Stock
held and actually voted at the Stockholders' Meeting by
the stockholders of Intek who are not parties to the
Voting Agreement (the "Independent Stockholders"); and
(y) Intek will then notify the Escrow Agent of the results
of such votes by the Independent Stockholders for, or
against, such Proposed Transactions. The Escrow Agent
will cast the votes of the Common Stock in the Escrow
Fund for and against the Proposed Transactions in
proportion to the votes of such Independent
Stockholders. For illustration purposes only: Should
the Independent Stockholders vote 55% in favor of and
45% against the Proposed Transactions, the Escrow Agent
will cast 55% of the votes of the Escrow Fund in favor
of and 45% of the votes of the Escrow Fund against the
Proposed Transactions. Absent such notification, Escrow
Agent will not vote the Escrow Fund.
(b) Upon the occurrence of a Price Adjustment Event, Intek
shall assign and transfer to Midland, and Midland shall be vested with, title
in, and voting control of, the Escrow Fund, free and clear of all liens and
encumbrances, other than those that arise through Midland, and Midland will
thereafter have:
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(i) the right to receive and retain any and all dividends
and other nonstock distributions paid in respect of the
Escrow Fund in the name of and for the benefit of
Midland or its assigns, and
(ii) the exclusive right to exercise any voting or other
consensual rights with respect to shares of Common
Stock remaining in the Escrow Fund from time to time.
Escrow Agent, upon such assignment, will execute and deliver such stock powers
and assignments as shall be necessary to convey title to the Escrow Fund to MIC
and Intek will duly endorse and deliver to the Escrow Agent stock certificates
in the name of MIC and evidencing all of the Common Stock in the Escrow Fund.
4. INVESTMENT OF ESCROW FUND. The Escrow Agent shall not sell,
encumber or otherwise dispose of the Common Stock held as a part of the Escrow
Fund, other than a distribution of the Escrow Fund as provided herein, except
that the Escrow Agent shall,
(a) upon the joint written direction of Midland and Intek,
if a Price Adjustment Event has not occurred; or
(b) upon the written direction of Midland if a Price
Adjustment Event has occurred,
effect a sale or other disposition of Common Stock in a transaction involving
(i) the receipt by the shareholders of Intek of cash in any merger or
reorganization in exchange or partly in exchange for shares of common stock of
Intek; (ii) the sale of all or substantially all of the assets of Intek for cash
and the distribution to shareholders of Intek of the proceeds of such sale as a
liquidating distribution; or (iii) a cash tender offer for all or a part of the
shares of common stock of Intek. In the event of any receipt of cash by the
Escrow Agent as a result of any of such transactions, such cash shall be
invested by the Escrow Agent, from time to time, to the extent possible, in
United States Treasury bills having a remaining maturity of 90 days or less and
resale obligations secured by such United States Treasury Bills or in money
market mutual funds invested solely in such United States Treasury Bills, with
any remainder being deposited and maintained in a money market deposit account
with Escrow Agent, until disbursement of the Escrow Fund pursuant to the terms
and conditions set forth herein. Escrow Agent is authorized to liquidate in
accordance with its customary procedures any portion of the Escrow Fund
consisting of investments to provide for payments required to be made under this
Agreement.
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5. PURPOSE OF ESCROW. The purpose of the Escrow Fund is:
(a) to set aside 2,350,000 shares of Common Stock of the
Purchase Price to provide a mechanism for an upward adjustment to the Purchase
Price (as defined in the Amended Assets and Trademark Agreement) of up to
2,350,000 shares of Common Stock if one of the following events occur (each a
"Price Adjustment Event"):
(i) the closing of the Securicor Transaction; or
(ii) Securicor and Intek, or their respective
affiliates, enter into one or more
transactions within six months of the
termination of the Securicor Agreement which
transaction(s) collectively convey(s)
majority control of Intek to Securicor
and/or Securicor's Affiliates (collectively)
upon the closing of such transaction(s);
and
(b) if a Price Adjustment Event occurs, to set aside 500,000
shares of the Escrow Fund (the "Hitachi Portion of the Escrow Fund"), after
conveyance to Midland of title to the Escrow Fund, to provide a mechanism for
indemnifying Intek against any actual out-of-pocket loss, cost, liability or
expense incurred by Intek ("Losses") resulting from the termination by Hitachi
of the Hitachi Supply Agreement without the consent of Intek prior to May 12,
1997 (an "Hitachi Related Indemnity Event"); provided, however, that for
purposes of this Agreement an Hitachi Related Indemnity Event shall not be
deemed to have occurred and Intek shall not be entitled to any portion of the
Hitachi Escrow Fund, if (i) Intek takes an action which results in termination
of the Hitachi Supply Agreement (excluding the transactions contemplated by the
Amended Assets and Trademark Agreement); provided, however, that, for the
purposes of the foregoing, Intek shall not be deemed to have taken any such
action if Intek fails to satisfy any minimum purchase requirements under the
Hitachi Supply Agreement or continues to purchase 220 MHz products from
Securicor or (ii) Hitachi's action to terminate the Hitachi Supply Agreement
notwithstanding, Hitachi continues to be willing to sell Hitachi Products to
Intek after May 12, 1997, upon substantially the terms set forth in the Hitachi
Supply Agreement or on such other terms as are agreed to by Intek or (iii) Intek
has not ordered any Hitachi Products pursuant to the Hitachi Supply Agreement
during the sixty (60) days immediately preceding Hitachi's termination of the
Hitachi Supply Agreement.
6. INITIAL RELEASE OF ESCROW FUNDS. Upon Escrow Agent's receipt of
either joint written directions by Midland and Intek certifying as to the
occurrence of a Price Adjustment Event, or a Certified Court Order determining
that a Price Adjustment Event has occurred and directing the Escrow Agent to
disburse all or a portion of the Escrow Fund accordingly, accompanied by a legal
opinion of counsel for the presenting party, satisfactory to the Escrow Agent,
to the effect that such court order is final and
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95
non-appealable, the Escrow Agent will release, or allocate, without further
investigation, all of the Escrow Fund, as follows:
(a) Such number of shares of Common Stock as shall be equal to
the purchase price adjustment for Net Operating Losses, as determined pursuant
to Section 3.1(b)(2)(B) of the Amended Asset and Trademark Agreement, but in any
event not more than 155,000 shares of Common Stock (the "Net Operating Loss
Shares"), shall be returned by the Escrow Agent to Intek and the Escrow Agent
shall promptly thereafter deliver to Intek a certificate or certificates
evidencing all such shares of Common Stock; and
(b) the Hitachi Portion of the Escrow Fund shall be set aside
by the Escrow Agent to indemnify Intek pursuant to paragraph of this Agreement,
although title to and voting rights arising from such shares of Common Stock
shall immediately vest with Midland; PROVIDED, HOWEVER, that neither Midland nor
its assignees shall have the right to sell, transfer, assign, mortgage, pledge,
subject to any lien, charge or encumbrance, hypothecate or otherwise transfer
any right, title or interest in the Hitachi Portion of the Escrow Fund; and
(c) the balance of Escrow Fund, other than the Hitachi Portion
of the Escrow Fund and the Net Operating Loss Shares, will be conveyed to
Midland and the Escrow Agent shall promptly thereafter deliver to Midland (i) a
certificate or certificates evidencing all such shares of Common Stock and (ii)
all other assets that are part of the Escrow Fund.
7. PAYMENT OF CLAIMS AGAINST THE HITACHI PORTION OF THE ESCROW FUND.
(a) INDEMNITY CLAIM. Within thirty (30) days after the
occurrence of an Hitachi Related Indemnity Event, but in any event prior to the
Hitachi Escrow Termination Date (as hereinafter defined), Intek shall give
notice (the "Indemnity Notice") to Midland and Escrow Agent specifying in
reasonable detail the occurrence of such Hitachi Related Indemnity Event and the
nature and dollar amount of Losses incurred by Intek resulting from the
occurrence of such Hitachi Related Indemnity Event (a "Claim"); provided,
HOWEVER, that Intek shall not be entitled to reimbursement or indemnity for
Claims hereunder except to the extent that such Claims, in the aggregate:
(i) exceed $50,000; and
(ii) are less than or equal to the Hitachi
Portion of the Escrow Fund (after deducting
all amounts expended or disbursed by Escrow
Agent pursuant to the terms of this Escrow
Agreement with respect to the Hitachi
Portion of the Escrow Fund).
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Escrow Agent shall not independently inquire into or consider the merits of any
Claim but shall be entitled to rely upon and shall perform its duties hereunder
in strict accordance with the provisions of this Escrow Agreement.
(b) SATISFACTION OF DISPUTED INDEMNITY CLAIM. If Midland gives
notice (a "Counter Notice") to Intek and Escrow Agent disputing a Claim which
Counter Notice shall specify in reasonable detail the reason for the dispute and
the dollar amount in dispute (each a "Disputed Claim") within thirty (30) days
following receipt by Escrow Agent of the Indemnity Notice asserting such Claim
(the "Counter Notice Period"), Escrow Agent shall not make any payment to Intek
with respect to any such Disputed Claim except upon Escrow Agent's receipt of,
and then only in accordance with the terms of, (i) a joint written instruction
of Intek and Midland instructing Escrow Agent to disburse or retain all or a
portion of the Escrow Fund in resolution of such Disputed Claims, or (ii) a
Certified Court Order directing the Escrow Agent to disburse or retain a portion
of the Escrow Fund in satisfaction of such Disputed Claims and accompanied by a
legal opinion of counsel for the presenting party, satisfactory to the Escrow
Agent, to the effect that such court order is final and non-appealable. Escrow
Agent shall upon receipt and without further investigation, act upon and comply
with the terms of any such joint written instruction or Certified Court Order.
(c) SATISFACTION OF AN UNDISPUTED CLAIM. If the Escrow Agent
does not receive a Counter Notice with respect to a Claim before expiration of
the Counter Notice Period (an "Undisputed Claim"), the amount of such Undisputed
Claim shall be deemed to be the amount set forth in the Indemnity Notice
asserting such Undisputed Claim and its shall be satisfied in the manner set
forth in Section of this Escrow Agreement.
(d) PAYMENT OF CLAIMS. The Escrow Agent shall make any payment
to Intek required pursuant to Section or Section of this Agreement by
withdrawing from the Hitachi Portion of the Escrow Fund and transferring to
Intek, first, a number of shares from the Hitachi Portion of the Escrow Fund
determined by dividing the amount of the Claim by the average of then applicable
Average Share Price. For purposes of this Agreement, "Average Share Price" shall
mean the average of the last reported sale price of Common Stock on the NASDAQ
System for the ten (10) trading days immediately preceding, as applicable, (i)
the end of the Counter Notice Period (counting the last day of such Counter
Notice Period) with respect to any Undisputed Claim, or (ii) the date upon which
Escrow Agent receives written joint written instructions from Midland and Intek
or a Certified Court Order, with respect to any Disputed Claim. If such transfer
of shares from the Hitachi Portion of the Escrow Fund is insufficient to satisfy
such Claim, then, to the extent that there are cash or other proceeds remaining
in the Escrow Account which are derived from or identified to the Hitachi
Portion of the Escrow Fund, Escrow Agent shall liquidate such balance and apply
it to satisfy the unpaid amount of such Claim remaining after application of
Hitachi Portion of the Escrow Fund thereto.
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8. TERMINATION OF ESCROW. This Escrow Agreement shall terminate as
to all or a portion of the Escrow Fund as follows:
(a) TERMINATION OF ESCROW WITHOUT PRICE ADJUSTMENT EVENT. If a
Price Adjustment Event has not occurred within Six (6) months and one (1) day
following the termination of the Securicor Agreement in accordance within its
terms, this Escrow Agreement shall terminate with respect to all of the Escrow
Fund (a "Full Termination"). Upon Escrow Agent's receipt of either joint
certification by Midland and Intek certifying as to the Full Termination of this
Escrow Agreement; or a Certified Court Order certifying as to the Full
Termination of this Escrow Agreement and directing the Escrow Agent to disburse
the Escrow Fund accordingly, accompanied by a legal opinion of counsel for the
presenting party, satisfactory to the Escrow Agent, to the effect that such
court order is final and non-appealable, the Escrow Agent will release all of
the Escrow Fund to Intek and the Escrow Agent shall promptly thereafter deliver
to Intek a certificate or certificates evidencing all such shares of Common
Stock.
(b) PARTIAL TERMINATION UPON DISBURSEMENT FOR PRICE ADJUSTMENT
EVENT. This Escrow Agreement shall terminate with respect to the Escrow Fund,
other than the Hitachi Portion of the Escrow Fund, upon the disbursement by the
Escrow Agent of all of the Escrow Fund other than the Hitachi Portion of the
Escrow Fund pursuant to Section of this Escrow Agreement.
(c) TERMINATION WITH RESPECT TO HITACHI PORTION OF THE ESCROW
FUND. This Escrow Agreement shall terminate with respect to the Hitachi Portion
of the Escrow Fund on the earlier of (the "Hitachi Escrow Termination Date"):
(i) Any transaction after the occurrence of a Price
Adjustment Event resulting in Securicor holding less
51% of the voting securities of Intek;
(ii) Disbursement by the Escrow Agent of the Hitachi Portion
of the Escrow Fund pursuant to the Section of this
Escrow Agreement; and
(iii) May 31, 1997;
except that this Escrow Agreement shall thereafter continue in effect with
respect to the Hitachi Portion of the Escrow Fund with respect, and then only to
the extent of, any amounts reserved against Claims pending as of the Hitachi
Escrow Termination Date. Intek shall notify Escrow Agent in writing of the
occurrence of the events described in sections or above within five business
days after consummation of such events. On the Hitachi Escrow Termination Date,
Escrow Agent shall pay and distribute the then remaining balance of the Hitachi
Portion of the Escrow Fund to Midland; except that Escrow Agent shall retain an
amount equal to the aggregate dollar amount of any Claims asserted by Intek in a
Claim Notice which are then pending until such Claims have been resolved
pursuant to Section of this Agreement, and will immediately
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98
after the resolution of such Claims distribute to Midland the balance of such
reserves which are not applied to satisfy such Claims.
9. DUTIES OF ESCROW AGENT.
(a) Escrow Agent shall not be under any duty to give the
Escrow Fund held by it hereunder any greater degree of care than it gives its
own similar property and shall not be required to invest any funds held
hereunder except as directed in this Agreement. Uninvested funds held hereunder
shall not earn or accrue interest.
(b) Escrow Agent shall not be liable, except for its own gross
negligence or willful misconduct and, except with respect to claims based upon
such gross negligence or willful misconduct that are successfully asserted
against Escrow Agent, the other parties hereto shall jointly and severally
indemnify and hold harmless Escrow Agent (and any successor Escrow Agent) from
and against any and all losses, liabilities, claims, actions, damages and
expenses, including reasonable attorneys' fees and disbursements, arising out of
and in connection with this Agreement. Without limiting the foregoing, Escrow
Agent shall in no event be liable in connection with its investment or
reinvestment of any cash held by it hereunder in good faith, in accordance with
the terms hereof, including, without limitation, any liability for any delays
(not resulting from its gross negligence or willful misconduct) in the
investment or reinvestment of the Escrow Fund, or any loss of interest incident
to any such delays.
(c) Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other writing delivered
to it hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that the person purporting
to give receipt or advice or make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so. Escrow
Agent may conclusively presume that the undersigned representative of any party
hereto which is an entity other than a natural person has full power and
authority to instruct Escrow Agent on behalf of that party unless written notice
to the contrary is delivered to Escrow Agent.
(d) Escrow Agent may act pursuant to the advice of counsel
with respect to any matter relating to this Agreement and shall not be liable
for any action taken or omitted by it in good faith in accordance with such
advice.
(e) Escrow Agent does not have any interest in the Escrow Fund
deposited hereunder but is serving as escrow holder only and having only
possession thereof. Any payments of income from this Escrow Fund shall be
subject to withholding regulations then in force with respect to United States
taxes. The parties hereto will provide Escrow Agent with appropriate Internal
Revenue Service Forms W-9 for tax identification number certification, or
non-resident alien certifications. This Section 9(e)
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and Section 9(b) shall survive notwithstanding any termination of this
Agreement or the resignation of Escrow Agent.
(f) Escrow Agent makes no representation as to the validity,
value, genuineness or the collectability of any security or other document or
instrument held by or delivered to it.
(g) Escrow Agent shall not be called upon to advise any party
as to the wisdom in selling or retaining or taking or refraining from any action
with respect to any securities or other property deposited hereunder.
(h) Escrow Agent (and any successor Escrow Agent) may at any
time resign as such by delivering the Escrow Fund to any successor Escrow Agent
jointly designated by the other parties hereto in writing, or to any court of
competent jurisdiction, whereupon Escrow Agent shall be discharged of and from
any and all further obligations arising in connection with this Agreement. The
resignation of Escrow Agent will take effect on the earlier of (i) the
appointment of a successor (including a court of competent jurisdiction) or (ii)
the day which is 30 days after the date of delivery of its written notice of
resignation to the other parties hereto. If at that time Escrow Agent has not
received a designation of a successor Escrow Agent, Escrow Agent's sole
responsibility after that time shall be to retain and safeguard the Escrow Fund
until receipt of a designation of successor Escrow Agent or a joint written
disposition instruction by the other parties hereto or a final non-appealable
order of a court of competent jurisdiction.
(i) Intek shall pay Escrow Agent compensation (as payment in
full) for the services to be rendered by Escrow Agent hereunder in the amount of
$500.00 at the time of execution of this Agreement and agrees to reimburse
Escrow Agent for all reasonable expenses, disbursements and advances incurred or
made by Escrow Agent in performance of its duties hereunder (including
reasonable fees, expenses and disbursements of its counsel).
(j) No printed or other matter in any language (including,
without limitation, prospectuses, notices, reports and promotional material)
that mentions Escrow Agent's name or the rights, powers, or duties of Escrow
Agent shall be issued by the other parties hereto or on such parties' behalf
unless Escrow Agent shall first have given its specific written consent thereto.
(k) The other parties hereto authorize Escrow Agent, for any
securities held hereunder, to use the services of any United States central
securities depository it reasonably deems appropriate, including, without
limitation, the Depositary Trust Company and the Federal Reserve Book Entry
System.
10. LIMITED RESPONSIBILITY. This Agreement expressly sets forth all
the duties of Escrow Agent with respect to any and all matters pertinent hereto.
No implied duties or obligations shall be read into this agreement against
Escrow Agent. Escrow Agent shall
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not be bound by the provisions of any agreement among the other parties hereto
except this Agreement.
11. OWNERSHIP FOR TAX PURPOSES. For purposes of federal and other taxes
based on income, the owner of the Escrow Fund, and the party to report all
income, if any, that is earned on, or derived from, the Escrow Fund as its
income, in the taxable year or years in which such income is properly includible
and pay any taxes attributable thereto will be the party holding title to the
Escrow Fund during such period during the term of this Agreement.
12. NOTICES. All notices, consents, waivers and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt) provided that a copy
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Midland: c/x Xxxxxxxx Capital Limited
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx, Xxxxxx, X0X 0X0
Attention: Xxxxx X'Xxxx
Facsimile No.: 416-221-3800
with a copy to: Xxxxx, Day Xxxxxx & Xxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxx Xxxxxx, Esq.
Facsimile No.: 216-579-0212
Intek: 000 Xxxx 000xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Facsimile No.: 310-366-7712
with copies to: Securicor Communications Limited
Xxxxxx Park House
00 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxx, XX0 0XX Xxxxxxx
Attention: Xx. Xx Xxxxx
Facsimile No.: 011-44-181-661-0205
Weil, Gotshal & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
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Attention: Xxxxxx Xxxxxxxxxx, Esq.
Facsimile No.: 000-000-0000
Xxxxxxx Xxxxxxx & Xxxxxx P.L.L.
Xxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile No.: 000-000-0000
Escrow Agent: American Stock Transfer & Trust Company
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Executive Vice President
Facsimile No. 000-000-0000
with a copy to: Xxxxxxx Xxxxxx, Esq.
American Stock Transfer & Trust Company
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile No.: 000-000-0000
13. JURISDICTION; SERVICE OF PROCESS. Any action or proceeding seeking
to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Delaware, or, if it has or can acquire jurisdiction, in the United States
District Court for the District of Delaware, and each of the parties consents to
the jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original and all of which,
when taken together, will be deemed to constitute one and the same.
15. SECTION HEADINGS. The headings of sections in this Agreement are
provided for convenience only and will not affect its construction or
interpretation.
16. WAIVER. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim
12
102
or right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
17. EXCLUSIVE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior agreements among the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by Intek, Midland and the Escrow Agent.
18. EXCLUSIVE REMEDY. Notwithstanding anything to the contrary
contained herein, in the Amended Assets and Trademark Agreement or otherwise:
(a) Intek's rights to receive the shares of Common Stock
identified to the Hitachi Escrow Fund hereunder shall constitute Intek's sole
and exclusive remedy for any Losses or other injury incurred by Intek resulting
if Midland is unable to assign the Hitachi Supply Agreement to Intek or to
otherwise provide Intek with the benefit of the Hitachi Supply Agreement as
required pursuant to the Amended Assets and Trademark Agreement; and
(b) Intek right to receive the shares of Common Stock
identified to the Price Adjustment Escrow Fund hereunder shall constitute
Intek's sole and exclusive remedy for payment in the event of an adjustment to
the Purchase Price pursuant to the terms of the Amended Assets and Trademark
Agreement.
19. ASSIGNMENT. This Escrow Agreement shall inure to the benefit of
and be binding upon each of the parties hereto and their respective successors
and assigns.
20. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of New York, without regard to the conflicts of law principles
thereof.
[Signatures commence on next page.]
13
103
[Signature Page for Escrow Agreement]
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
INTEK DIVERSIFIED CORPORATION MIDLAND INTERNATIONAL
CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxxx X'Xxxx
-------------------------------- ------------------------------------
Name: Xxxxxx X. Xxxxxxxxx Name: Xxxxx X'Xxxx
Title: Secretary Title: Secretary
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
104
EXHIBIT C
---------
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement ("Assignment") is
entered into and effective as of September 1, 1996 by and between INTEK
Diversified Corporation ("INTEK") and Midland USA, Inc. ("MUSA"). Capitalized
terms not otherwise defined herein shall have the meanings ascribed to them in
the Amended and Restated Sale of Assets and Trademark Agreement (the
"Agreement") dated as of September 19, 1996 among INTEK, Xxxxxxxx Capital
Limited and Midland International Corporation. For good and valuable
consideration, receipt and sufficiency of which are hereby acknowledged, INTEK
and MUSA hereby agree as follows:
1. ASSIGNMENT. INTEK hereby assigns and transfers to MUSA all
of its right, title and interest in and to the Acquired Assets, all of its
rights and obligations under the Agreement and all deposits, payments or advance
payments (collectively, the "Deposits") for product purchase orders identified
on Schedule A hereto, but with respect to the Deposits, such assignment shall be
effective only at such time as MUSA shall pay to INTEK the Second Payment (as
defined below).
2. ASSUMPTION. MUSA hereby accepts such assignment, expressly
assumes the Assumed Liabilities and shall be bound by all of the terms,
covenants and conditions thereof and shall perform all obligations thereunder.
3. PAYMENTS. On the date hereof, MUSA shall pay to INTEK, by
wire transfer, the sum of $1,350,000 (the "First Payment") as partial
consideration for certain deposits for product purchases made by INTEK and as
described in more detail on Schedule 2.3(b)(8) to the Agreement, which deposits
constitute part of the Acquired Assets. INTEK acknowledges receipt of the First
Payment. MUSA shall pay to INTEK the sum of Four Hundred Fifty Thousand Dollars
($450,000), by wire transfer, on October 20, 1996 for the Deposits and upon
receipt thereof, such Deposits shall be deemed assigned to MUSA.
4. INDEMNIFICATION. From and after the Closing, but subject to
the conditions and limitations set forth in this Assignment, MUSA shall defend,
indemnify and save INTEK and its directors, officers, employees, affiliates,
agents, successors and assigns harmless from and against any and all loss, cost,
damage or expense (including attorneys' fees) whatsoever (the "Damages")
resulting from or arising out of the Assumed Liabilities, whether arising prior
to, on or after the Effective Date.
5. SUBORDINATION. The payment of any Damages by or on behalf
of MUSA will be subordinated in right of payment to the prior payment in full of
all Obligations under the Loan Agreement (the "Loan Agreement") dated September
19, 1996 between MUSA and Securicor Communications Limited ("Securicor
Communications"), as the same may be amended from time to time. MUSA shall not
make any payment for the Damages until such time as the Obligations (as defined
in the Loan Agreement) have been paid to Securicor Communications. Upon any
distribution to creditors of MUSA in any insolvency or liquidation proceeding
relating
105
to MUSA or its respective properties, an assignment for the benefit of creditors
or any marshaling of MUSA's assets and liabilities, Securicor Communications
will be entitled to receive payment in full of all Obligations before payment is
made on account of the Damages by or on behalf of MUSA, and until all
Obligations are paid in full, any distribution to which INTEK would be entitled
shall be made to Securicor Communications.
6. NOTICES. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telex, telecopy, or cable
communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered
by hand, if
to INTEK at:
INTEK Diversified Corporation
000 Xxxx 000xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Manatt, Xxxxxx & Xxxxxxxx, LLP
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
to MUSA at:
Midland USA, Inc.
000 Xxxx 000xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxx, Xxxxxxx & Xxxxxx, P.L.L.
One Cleveland Center
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
2
106
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Section. All such notices and other communications shall, when mailed,
telegraphed, telexed, telecopied, cabled or delivered, be effective seven days
after being deposited in the mail in the United States, or when delivered to the
telegraph company, confirmed by telex answerback, telecopied with confirmation
or receipt, delivered to the cable company, or delivered by hand to the
addressee or its agent, respectively.
7. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement shall in any event be effective unless the same shall be in
writing, approved and signed by the parties hereto and then any such waiver or
consent shall only be effective in the specific instance and for the specific
purpose for which given.
8. NO WAIVER; REMEDIES.
(a) No failure on the part of either party to
exercise, and no delay in exercising any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative, may be exercised singly or
concurrently, and are not exclusive of any remedies provided by law.
(b) Failure by any party at any time or times
hereafter to require strict performance by any other person of any of the
provisions, warranties, terms or conditions contained herein shall not waive,
affect or diminish any right of any party at any time or times hereafter to
demand strict performance thereof, and such right shall not be deemed to have
been modified or waived by any course of conduct or knowledge of any party, or
any agent, officer or employee of such party.
9. SUCCESSORS AND ASSIGNS. This Agreement and all obligations
of the parties hereunder shall be binding upon the successors and assigns of
such parties.
10. GOVERNING LAW. This Agreement shall be governed by, and be
construed and interpreted in accordance with, the law of the State of
California. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity and without invalidating the remaining provisions of
this Agreement.
3
107
11. SECTION TITLES. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of this Agreement.
IN WITNESS WHEREOF, the parties have entered into this
Assignment as of the date first written above.
INTEK DIVERSIFIED CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------
Its: Sec'y
------------------------
MIDLAND USA, INC.
By: /s/Xxxxx Xxxxxxx
----------------------------
Its: President
------------------------
ACKNOWLEDGED BY:
MIDLAND INTERNATIONAL
CORPORATION
By: /s/ Xxxxx X'Xxxx
-----------------------
Its: Secretary
--------------------
4
108
Schedule A
(To Assignment and Assumption Agreement)
Purchase Orders
---------------
3058
3081
3082
3084
3085
3087
3074
3102
3105
3108
3107
3071
3078
3079
3088
3090
3092
3022
3023
3024
3028
3029
3031
3032
3033
3037
3038
3039
3041
3042
3043
3046
3047
3048
3050
3052
3054
3056
109
EXHIBIT D
---------
PRODUCT PURCHASING SERVICES AGREEMENT
THIS AGREEMENT made the 19th day of September, 1996,
BETWEEN:
MIDLAND INTERNATIONAL CORPORATION, a corporation incorporated
under the laws of the State of Delaware (hereinafter referred
to as "MIC"),
OF THE FIRST PART,
- and -
MIDLAND U.S.A., INC., a corporation incorporated under the
laws of the State of Delaware (hereinafter referred to as
"MUSA"),
OF THE SECOND PART.
WHEREAS pursuant to an Amended and Restated Sale of Assets and
Trademark Agreement (the "Asset Agreement") dated as of September 19, 1996, made
between SCL, Intek Diversified Corporation ("Intek") and MIC, a wholly-owned
subsidiary of SCL, MIC has conveyed to MUSA, inter alia, certain U.S. Trademarks
(as defined in the Asset Agreement) thereby permitting MUSA to distribute
certain Midland land mobile radio products in the United States;
AND WHEREAS to assist MUSA in carrying on its business, MIC has agreed
to permit MUSA to make use of the services of the supplier liaison office
maintained by MIC in Japan and MIC's purchasing representative in Korea on the
terms and conditions provided for herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
respective covenants, agreements, representations, warranties and indemnities
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
covenant and agree as follows:
110
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ARTICLE I - INTERPRETATION
1.1 Currency
Unless otherwise indicated, all dollar amounts referred to in this
Agreement are expressed in United States funds.
1.2 Number, Gender and Persons
In this Agreement, words importing the singular number only shall
include the plural and vice versa, words importing gender shall include all
genders and words importing persons shall include individuals, corporations,
partnerships, associations, trusts, unincorporated organizations, governmental
bodies and other legal or business entities.
1.3 Entire Agreement
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether written or oral. There are
no conditions, covenants, agreements, representations, warranties or other
provisions, express or implied, collateral, statutory or otherwise, relating to
the subject matter hereof except as herein provided.
1.4 Time of Essence
Time shall be of the essence of this Agreement.
1.5 Applicable Law
This Agreement shall be construed, interpreted and enforced in
accordance with, and the respective rights and obligations of the parties shall
be governed by, the laws of the State of New York, and each party hereby
irrevocably and unconditionally submits to the non-exclusive jurisdiction of the
courts of such State and all courts competent to hear appeals therefrom.
1.6 Severability
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct.
111
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1.7 Successors and Assigns
This Agreement shall enure to the benefit of and shall be binding on
and enforceable by the parties and their successors and permitted assigns.
1.8 Amendment and Waivers
No amendment or waiver of any provision of this Agreement shall be
binding on any party unless consented to in writing by such party. No waiver of
any provision of this Agreement shall constitute a waiver of any other
provision, nor shall any waiver constitute a continuing waiver unless otherwise
expressly provided.
ARTICLE II - PRODUCT PURCHASING SERVICES
2.1 Product Purchasing Services
During the term of this Agreement, MIC agrees to provide MUSA with the
services of the supplier liaison office maintained by MIC in Japan and MIC's
purchasing representative in Korea.
2.2 Charges for Product Purchasing Services
MUSA shall pay to MIC in respect of the services provided to MUSA by
MIC pursuant to section 2.1 hereof an amount equal to the amount obtained by
multiplying the costs actually incurred by MIC in maintaining its supplier
liaison office in Japan and retaining the services of a purchasing
representative in Korea by a fraction, the numerator of which is the dollar
volume of products manufactured in Japan and Korea and purchased by MUSA and the
denominator of which is the dollar volume of products manufactured in Japan and
Korea and purchased by MUSA, MIC and SCL. Such charges shall be estimated
annually in advance by MIC and paid by MUSA to MIC monthly in advance in equal
monthly instalments. The charges payable by MUSA to MIC in respect of the first
year of this Agreement are estimated to be $10,900 per month in respect of the
supplier liaison office in Japan and $3,000 per month in respect of the
purchasing representative in Korea. Within ninety days following each
anniversary of this Agreement, the charges to MUSA for the services provided
hereunder for the preceding year shall be adjusted based on actual volumes
purchased and the appropriate adjusting payment shall be made by MUSA to MIC or
vice versa, as the case may be, forthwith upon the actual charges being
determined. Notwithstanding the foregoing, MUSA shall not be required to pay in
excess of 75% of the actual costs incurred by MIC in respect of maintaining its
supplier liaison office in Japan and retaining the services of a purchasing
representative in Korea.
112
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2.3 Customs Bonds
MIC agrees to keep in place for ninety days following the closing of
the transactions contemplated by the Asset Agreement all customs bonds in
existence as at the date of this Agreement.
2.4 Charges for Customs Bonds
MUSA shall pay to MIC in respect of the customs bonds referred to in
section 2.3 hereof an amount equal to the amount obtained by multiplying the
actual costs incurred by MIC in obtaining and maintaining the customs bonds
referred to in section 2.3 by a fraction, the numerator of which is the dollar
volume of products imported by MUSA under such customs bonds and the denominator
of which is the dollar volume of all products imported under such customs bonds
by MUSA, MIC and SCL. Such charges shall be paid within thirty days of receipt
by MUSA of an invoice from MIC setting forth such charges together with
supporting documentation therefor.
ARTICLE III - INDEMNIFICATION
3.1 Indemnification
MUSA agrees to indemnify and save harmless MIC and its directors,
officers, employees and agents from any claims, demands, proceedings, losses,
damages, liabilities, deficiencies, costs and expenses (including, without
limitation, all reasonable legal and other professional fees and disbursements,
interests, penalties and amounts paid in settlements) arising directly or
indirectly as a consequence of providing the services contemplated hereby except
to the extent that such losses may be a consequence of the gross negligence or
wilful misconduct of such person.
ARTICLE IV - CONFIDENTIALITY
4.1 Confidentiality
Each of the parties hereto agrees to keep confidential any information
provided to it by the other party in connection with the provision by services
by it hereunder and not to disclose or divulge same to any third party without
the prior written consent of the other, unless compelled to do so by process of
law. However, if such information is publicly available or is rightfully
obtained by third parties, no party hereto shall bear responsibility for its
disclosure, inadvertent or otherwise.
113
- 5 -
ARTICLE V - TERM
5.1 Term
This Agreement shall have an initial term of one year from the date of
execution and shall automatically be renewed for subsequent one year terms
unless terminated by either party on written notice to the other given not less
than thirty days prior to any anniversary date of the execution hereof.
5.2 Early Termination
Notwithstanding section 6.1, this Agreement may be terminated by either
party:
(a) if the other party is in default of any of its obligations
hereunder and the default continues for a period of ten days
or such further time as may be reasonable, given the nature of
the default, after notice of the default has been provided to
the defaulting party, provided that if such default is
incapable of being remedied, termination may be immediate;
(b) if the other party becomes insolvent, or makes an assignment
for the general benefit of creditors; or any proceedings are
commenced by or against the other party under any bankruptcy
or insolvency laws or proceedings for the appointment of a
custodian, receiver or receiver-manager or any other official
with similar powers for the other party are commenced and are
not dismissed or withdrawn within sixty days; or if the other
party ceases to carry on business.
ARTICLE VI - MISCELLANEOUS
6.1 Arbitration
Any controversy or claim arising out of or related to this Agreement or
the breach thereof, shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction.
6.2 Additional Charges
The charges provided for in Article II hereof are exclusive of federal,
provincial, state or local municipal taxes, including, but not limited to,
retail sales, use, excise, goods and services or similar taxes or any duties.
MUSA shall pay or reimburse to MIC all amounts, if
114
- 6 -
any, paid or payable on account of any taxes, excluding taxes based on the net
income of MIC, which are levied on the charges to be paid by MUSA pursuant to
this Agreement.
6.3 Notices
Any notice, designation, communication, request, demand or other
document, required or permitted to be given or sent or delivered hereunder to
any party hereto shall be in writing and shall be sufficiently given or sent or
delivered if it is:
(a) delivered personally to such party or to an officer or director
of such party;
(b) mailed to the party entitled to receive it by registered mail,
postage prepaid; or
(c) sent by facsimile.
Notices shall be sent to the following addresses or facsimile numbers:
(i) in the case of MIC:
Suite 1050
0000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx X'Xxxx
Facsimile: (000) 000-0000
(ii) in the case of MUSA:
0000 X. Xxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
115
- 7 -
with copies to:
Intek Diversified Corporation
000 Xxxx 000xx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Xxxxxxx Xxxxxxx & Xxxxxx P.L.L.
Xxx Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or facsimile number as the party entitled to or
receiving such notice, designation, communication, request, demand or other
document shall, by a notice given in accordance with this section, have
communicated to the party giving or sending or delivering such notice,
designation, communication, request, demand or other document.
Any notice, designation, communication, request, demand or other
document given or sent or delivered as aforesaid shall:
(a) if delivered personally as aforesaid, be deemed to have been
given, sent, delivered and received on the date of delivery;
(b) if mailed by registered mail, postage prepaid, as aforesaid, be
deemed to have been given, sent, delivered and received on the
fourth Business Day following the date of mailing, unless at any
time between the date of mailing and the fourth Business Day
thereafter there is a discontinuance or interruption of regular
postal service, whether due to strike or lockout or work
slowdown, affecting postal service at the point of dispatch or
delivery or any intermediate point, in which case the same shall
be deemed to have been given, sent, delivered and received in the
ordinary course of the mails, allowing for such discontinuance or
interruption of regular postal service; and
116
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(c) if sent by facsimile machine, be deemed to have been given,
sent, delivered and received on the date the sender receives
the facsimile answer back confirming receipt by the recipient.
6.4 Assignment
Except for the assignment by MIC of its rights, benefits and
obligations hereunder to one of its affiliates, which may be done without the
consent of MUSA, neither party may assign its rights, benefits or obligations
under this Agreement without the prior written consent of the other.
6.5 Counterparts
This Agreement may be executed in counterparts, each of which shall
constitute an original and all of which taken together shall constitute as one
and the same instrument.
117
IN WITNESS WHEREOF this Agreement has been executed by the parties.
MIDLAND INTERNATIONAL CORPORATION
By: /s/ Xxxxx X'Xxxx
----------------------------------------
Xxxxx X'Xxxx
Secretary
MIDLAND U.S.A., INC.
By: /s/ Xxxxx Xxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
118
EXHIBIT E
---------
REGISTRATION RIGHTS AGREEMENT
among
INTEK DIVERSIFIED CORPORATION
and
ROAMER ONE HOLDINGS, INC.,
SECURICOR COMMUNICATIONS LIMITED,
SECURICOR INTERNATIONAL LIMITED
XXXXXXXX CAPITAL LIMITED,
MIDLAND INTERNATIONAL CORPORATION,
ANGLO YORK INDUSTRIES, INC.,
XXXX & XXXX, XX LIMITED,
OCTAGON INVESTMENTS LIMITED,
and
XXXXXX XXXXXXXX
Dated as of __________ __, 199__
119
TABLE OF CONTENTS
-----------------
Page
----
1. Definitions............................................. 4
2. Demand Registration..................................... 6
a. Demand for Registration........................ 6
b. Number of Demand Registrations................. 6
c. Expenses....................................... 7
d. Effective Registration Statement............... 8
e. Priority in Requested Registrations............ 8
f. Selection of Underwriters...................... 9
3. Incidental Registration................................. 9
a. Participation in Incidental Registrations...... 9
b. Priority in Incidental Registrations........... 10
4. Limitations............................................. 11
5. Registration Procedures................................. 12
6. Expenses................................................ 14
7. Indemnification......................................... 14
a. By the Company................................. 14
b. By Holders of Registrable Securities........... 15
c. Notice......................................... 15
d. Contribution................................... 16
8. Holder to Provide Information........................... 17
9. Rule 144 Reporting...................................... 17
10. Granting of Registration Rights............................. 18
11. Remedies.................................................... 18
12. MISCELLANEOUS............................................... 18
a. Waivers and Amendments......................... 18
b. Entire Agreement............................... 19
c. Governing Law.................................. 19
d. Notices........................................ 19
e. Counterparts................................... 19
f. Successors and Assigns......................... 19
g. Third Parties.................................. 20
h. Termination of Prior Agreement................. 20
120
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
as of _________ __, 199__, by and among INTEK DIVERSIFIED CORPORATION, a
California corporation (the "Company"), ROAMER ONE HOLDINGS, INC. ("Roamer"), a
Delaware corporation, SECURICOR COMMUNICATIONS LIMITED ("Securicor
Communications"), a corporation organized under the laws of England and Wales,
SECURICOR INTERNATIONAL LIMITED ("Securicor International" and, together with
Securicor Communications, "Securicor"), a corporation organized under the laws
of England and Wales, XXXXXXXX CAPITAL LIMITED ("Xxxxxxxx"), a corporation
organized under the laws of Ontario, Canada, MIDLAND INTERNATIONAL CORPORATION
("Midland"), a Delaware corporation, ANGLO YORK INDUSTRIES, INC. ("Anglo York"),
a Delaware corporation, XXXX & XXXX, XX LIMITED ("Xxxx & Xxxx"), a limited
liability company organized under the laws of Hong Kong, OCTAGON INVESTMENTS
LIMITED ("Octagon"), a corporation organized under the laws of Guernsey, XXXXXX
XXXXXXXX ("Xxxxxxxx") and such other holders of Registrable Securities (as
defined herein) as may execute and deliver a counterpart of this Agreement to
the Company.
Recitals
--------
A. On September 23, 1994, the Company entered into a Registration Rights
Agreement (the "1994 Registration Rights Agreement") granting certain
registration rights to Simmonds, Roamer, Anglo York and Xxxxxx Xxxxx.
B. On June 18, 1996, the Company entered into a Stock Purchase Agreement
with Securicor Communications (the "SECURICOR AGREEMENT"), pursuant to
which the Company has agreed to acquire all of the stock (other than
certain preferred stock) of Securicor Radiocoms Limited, a wholly-owned
subsidiary of Securicor.
C. On September 19, 1996, the Company entered into an Amended and Restated
Sale of Assets and Trademark Agreement (the "XXXXXXXX AGREEMENT;" and
collectively with the SECURICOR AGREEMENT, the "INVESTOR AGREEMENTS")
with Xxxxxxxx and Midland, pursuant to which XXXXXXXX AGREEMENT the
Company acquired certain assets of Midland.
D. Pursuant to the terms of the SECURICOR AGREEMENT, upon consummation of
the transactions contemplated in the SECURICOR AGREEMENT Securicor
Communications is to acquire 25,000,000 shares of the common stock, par
value $0.01 per share, of the Company (the "Common Stock"), increasing
Securicor's holdings of Common Stock to _____________ shares (____% of
the currently outstanding shares of Common Stock).
E. Pursuant to the terms of the XXXXXXXX AGREEMENT, Midland
acquired 150,000 shares of Common Stock as of September 19,
1996, and upon consummation of the transactions contemplated
1
121
in the SECURICOR AGREEMENT, Midland is to acquire up to an additional
2,350,000 shares of the Common Stock, thereby increasing Midland and
Xxxxxxxx'x collective holdings (net of put and call options not
exercised as of the date of this Agreement) of Common Stock to
______________ shares (_____% of the currently outstanding shares of
Common Stock).
F. The termination of the 1994 Registration Rights Agreement, the grant of
the registration rights and other shareholder rights contained herein
and the execution and delivery of this Agreement by the parties hereto
is a condition precedent to Securicor Communications' and Xxxxxxxx' and
Midland's obligations under the INVESTOR AGREEMENTS.
Agreements
----------
NOW THEREFORE, the parties to this Agreement hereby agree as
follows:
1. DEFINITIONS.
For purposes of this Agreement, unless the context otherwise requires,
the following terms have the meanings set forth below:
"COMMISSION" means the Securities and Exchange Commission or
any other United States federal agency at the time administering the Securities
Act.
"COMMON STOCK" has the meaning provided in the
recitals.
"DEMAND REGISTRATION" means a registration of Registrable
Securities by the Company pursuant to a Demand Registration Request of a then
Eligible Demand Holder pursuant to Section 2 of this Agreement
"DEMAND REGISTRATION REQUEST" means a written request by a
then Eligible Demand Holder for the registration of Registrable Securities.
"ELIGIBLE DEMAND HOLDER" means (a) each of Securicor,
Xxxxxxxx, Midland and Roamer, and (b) Anglo York to the extent that Anglo York
holds, and only with respect to, Registrable Securities which are eligible to be
registered by the Company under the Securities Act on a Form S-3 Registration
Statement (as determined by agreement between the Company and the Holder of such
Registrable Securities).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission enacted from time to
time in connection therewith, as the same shall be in effect from time to time.
"HOLDER" means, so long as such Person owns a beneficial
interest in Common Stock, Roamer, Securicor, Xxxxxxxx, Anglo York, Xxxx & Xxxx,
Octagon, Xxxxxxxx and such other holders
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of Registrable Securities who are parties hereto, and their respective
successors and permitted assigns.
"PERSON" means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization, or
governmental entity (including any department or agency thereof).
"REGISTRATION EXPENSES" means, except as otherwise set forth
in this Agreement, all expenses incident to the Company's performance of or
compliance with its obligations to register Registrable Securities under this
Agreement, including, without limitation, (a) all registration, filing and NASD
fees, (b) all fees and expenses of complying with applicable United States
federal and state securities laws, (c) all word processing, duplicating and
printing expenses, (d) messenger and delivery expenses, (e) the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, (f) if
shares of Midland, Securicor or Roamer are being registered pursuant to a Demand
Registration under this Agreement, the reasonable fees and disbursements of
counsel retained by the Eligible Demand Holder initiating such registration, up
to an aggregate maximum amount of $25,000 for such registration (it being
understood that, if more than one of Midland, Securicor and Roamer is
participating in any such registration, they shall all be entitled to use such
counsel as shall have been selected by the Eligible Demand Holder initiating
such registration and that such counsel shall be reasonably acceptable to the
other Eligible Demand Holders desiring to have one counsel represent the
Eligible Demand Holders), (g) premiums and other costs of policies of insurance
against liabilities arising out of the public offering of Registrable Securities
(if the Company elects to obtain any such insurance), and (h) any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding fees, discounts and commissions of underwriters,
selling brokers or dealers and transfer taxes, if any, related to the sale of a
Holder's Registrable Securities pursuant to such registration.
"REGISTRABLE SECURITIES" means (a) any share of Common Stock
now or hereafter held by a Holder, (b) any option or other right to acquire
Common Stock, and (c) any securities issued or issuable with respect to
Registrable Securities, whether by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise. Registrable Securities shall cease to be
such when (i) such Registrable Securities have been disposed of in accordance
with a registration statement which shall have become effective under the
Securities Act, or (ii) such Registrable Securities shall have been sold in a
manner complying with the resale provisions of Rule 144 under the Securities Act
(or any successor provision thereto), or (iii) such Registrable Securities shall
have been transferred, new certificates evidencing such Registrable Securities
without
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legends restricting further transfer shall have been delivered by the Company,
and subsequent public distributions of such Registrable Securities shall neither
require registration under the Securities Act nor qualification (or any similar
filing) under any state securities or "blue sky" law then in effect, or (iv)
such Registrable Securities shall have ceased to be issued and outstanding.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission enacted from time to time in
connection therewith, as the same shall be in effect from time to time.
2. DEMAND REGISTRATION.
a. DEMAND FOR REGISTRATION. Upon the receipt from a then Eligible
Demand Holder of a Demand Registration Request for the registration of some or
all of the Registrable Securities owned by such Eligible Demand Holder at the
time of such Demand Registration Request, the Company shall, as soon as
reasonably practicable, but in any event within 30 calendar days after receipt
of a Demand Registration Request: (i) file a registration statement the form of
which is, under the rules and regulations of the Commission, suitable for
effecting a public offering in which the Eligible Demand Holders shall be
entitled to offer for sale and to sell, pursuant to such registration statement
and in the manner requested by such Eligible Demand Holder in the Demand
Registration Request, the amount of Registrable Securities as specified in such
Demand Registration Request; and (ii) use its best efforts to cause such
registration statement to become effective within 90 days after the filing of
the registration statement. The Company shall use its best efforts to cause such
registration statement to remain effective for the lesser of 150 days after the
date such registration statement is declared effective or the period required to
effect such sale of Registrable Securities; PROVIDED, HOWEVER, that if all
shares registered pursuant to such registration statement are to be sold in a
firm commitment underwriting and the underwriter or underwriters determine, in
its or their sole discretion, that a period greater than 150 days is necessary
in order to consummate such offering, the Company shall use commercially
reasonable efforts to cause such registration statement to remain in effect for
the period requested by the underwriter or underwriters.
b. NUMBER OF DEMAND REGISTRATIONS. Each of the Eligible Demand Holders
shall be entitled to the number of demand registrations under this Section 2(a)
as set forth below opposite their names, PROVIDED, that (i) the minimum number
of Registrable Securities offered for registration pursuant to a Demand
Registration shall be as set forth below opposite the name of the Holder
demanding such registration, and (ii) the reasonably anticipated aggregate
offering price of such Registrable Securities offered pursuant to such Demand
Registration exceeds Three Million Dollars ($3,000,000):
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NO. OF DEMAND MINIMUM SHARES
ELIGIBLE DEMAND HOLDER REGISTRATIONS To be Registered
---------------------- ------------- ----------------
Securicor 5 2,500,000
Xxxxxxxx and Midland, 3 1,250,000
collectively
Roamer 2 1,250,000
Anglo York 1 NO MINIMUM
; PROVIDED, HOWEVER, that the minimum number of shares to be registered by each
Eligible Demand Holder shall be adjusted as appropriate to reflect any stock
dividends, stock splits, combinations, exchanges, reorganizations,
recapitalizations or reclassifications of the Registrable Securities or in
connection with any merger, consolidation or other similar business combination
transaction involving the Company. In the event that an Eligible Demand Holder
delivering a Demand Registration Request determines for any reason (other than
at the request or recommendation of the Company or the managing underwriters)
not to proceed with a registration of Registrable Securities requested pursuant
to this Section 2 at any time before the registration statement has been
declared effective by the Commission and such registration statement, if
theretofore filed with the Commission, is withdrawn with respect to the
Registrable Securities covered thereby, and such Eligible Demand Holder
reimburses the Company for the Registration Expenses incurred by it in
connection therewith, then the Eligible Demand Holder shall not be deemed to
have exercised one of its Demand Registration rights. If the Eligible Demand
Holder determines not to proceed with such a Demand Registration upon the
request or recommendation of the Company or the managing underwriters, the
Eligible Demand Holder shall not be required to reimburse the Company for its
Registration Expenses and the Eligible Demand Holder shall not be deemed to have
exercised one of its Demand Registration rights.
The Company shall not, without the prior written consent of Securicor,
Midland, Xxxxxxxx and Roamer, effect any registration of its securities (other
than on Form S-4 or Form S-8) from the date the Company receives a Demand
Registration Request until the earlier of (a) 90 days after the date on which
all securities covered by such Demand Registration Request have been sold or (b)
150 days after the effective date of the registration statement covering such
Registrable Securities. If the Company does not effect a registration statement
requested pursuant to a Demand Registration Request under this Section 2 for the
reasons set forth in the immediately preceding sentence, the Eligible Demand
Holders shall not be deemed to have exercised one of their Demand Registration
rights.
c. EXPENSES. Except as otherwise provided herein, the Company shall
bear all Registration Expenses associated with any Demand Registration
undertaken pursuant to a Demand Registration
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Request initiated by Securicor, Midland or Roamer. The Company shall, in the
aggregate on a one-time basis, bear only $25,000 in Registration Expenses
incurred by Anglo York for registrations undertaken pursuant to this Section 2
which were initiated by a Demand Registration Request of Anglo York, with the
balance as reasonably estimated by the Company, or adequate security therefor as
determined in the sole discretion of the Company, to be provided or paid to the
Company by Anglo York at the time the Company agrees to undertake a Demand
Registration at its request. Each Holder participating in any such registration
shall be responsible for, and shall pay, any transfer taxes and any fees,
discounts or commissions of underwriters, selling brokers and dealers relating
to the sale or distribution of the Registrable Securities being sold by such
Holder pursuant to such registration and, except as set forth in the definition
of Registration Expenses, all fees and disbursements of counsel and accountants
for such Holder.
d. EFFECTIVE REGISTRATION STATEMENT. A registration requested pursuant
to this Section 2 shall not be deemed to be effected (i) if a registration
statement with respect thereto shall not have become effective, (ii) if, after
it has become effective, such registration is interfered with for any reason by
any stop order, injunction or other order or requirement of the Commission or
any Person, and the result of such interference is to prevent the Eligible
Demand Holder(s) of Registrable Securities to be sold thereunder from disposing
thereof in accordance with the intended methods of disposition, or (iii) if the
conditions to closing (other than those to be performed by the Eligible Demand
Holder(s)) specified in the purchase agreement or underwriting agreement entered
into in connection with any underwritten registration shall not be satisfied or
waived with the consent of the Eligible Demand Holder(s) of Registrable
Securities that were to have been sold thereunder.
e. PRIORITY IN REQUESTED REGISTRATIONS. If a Demand Registration
pursuant to this Section 2 involves an underwritten offering, and the managing
underwriter shall advise the Company in writing (with a copy to each Person
requesting registration of Registrable Securities) that, in its opinion, the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering within a price range acceptable to the
Eligible Demand Holder(s) demanding such Demand Registration, the Company will
include in such registration to the extent of the number which the Company is so
advised can be sold in such offering (i) first, Registrable Securities requested
to be included in such registration for each Eligible Demand Holder exercising
its right to demand registration pursuant to this Section 2 in an amount
determined pursuant to the following formula: (x) the number of Registrable
Securities which such Eligible Demand Holder's Demand Registration Request
demands be included in such registration, divided by, (y) the aggregate number
of Registrable Securities for which Demand Registration Requests are made with
respect to the subject registration; and (ii) second, securities of the Company
proposed by the Company to be sold for its own account.
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If two or more Eligible Demand Holders made demand and pursuant to the foregoing
managing underwriters opinion the aggregate number of Registrable Securities
stated in such Eligible Demand Holders' Demand Requests exceeds the number of
securities which can be sold in such offering within a price range acceptable to
the Eligible Demand Holder(s) demanding such Demand Registration, then any such
Eligible Demand Holders may withdraw its entire Demand Request without being
deemed to have exercised a Demand and without being liable to the Company for
any Registration Expenses. If this Section 2 is applicable in connection with
any such registration, (i) no securities other than Registrable Securities or
securities of the Company proposed by the Company to be sold for its own account
shall be covered by such registration, (ii) the Company will not grant any
registration rights inconsistent with the provisions of this Section 2, and
(iii) each Eligible Demand Holder selling Registrable Securities pursuant to
such registration shall be deemed to have exercised a Demand Right.
f. ELECTION OF UNDERWRITERS. In the case of any public
offering pursuant to the exercise of a right for Demand Registration by an
Eligible Demand Holder, the underwriter or underwriters for such offering shall
be selected by the Company.
3. INCIDENTAL REGISTRATION.
a. PARTICIPATION IN INCIDENTAL REGISTRATIONS. Each time the
Company shall determine to proceed with the preparation and filing of a
registration statement under the Securities Act in connection with the proposed
offer and sale for money of any of its equity securities, whether by the Company
or any of its security holders (other than on Forms S-4 or S-8, or any successor
or similar form), the Company shall give written notice of its determination to
the Holders as soon as practical, but in no event, less than 30 days prior to
the filing of such registration statement with the Commission. Upon the written
request of a Holder given to the Company within 15 days after the mailing of any
such notice by the Company, the Company shall, subject to Section 5 hereof,
cause all Registrable Securities which such Holder has requested to be
registered to be included in such registration statement; PROVIDED, HOWEVER,
that if, at any time after giving written notice of its intention to register
any equity securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason either not to register or to delay registration of such
equity securities, the Company may, at its election, give written notice of such
determination to the Holders and, upon the giving of such notice, (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
shall pay all Registration Expenses incurred by Holders of Registrable
Securities in connection therewith), and (ii) in the case of a determination to
delay registering, shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such other equity
securities. No
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registration effected under this Section 3 shall relieve the Company of its
obligation to effect any registration under Section 2, except as contemplated by
Section 4. A Holder's participation in any such incidental registration shall
not require that it pay any portion of the Registration Expenses incurred by the
Company, except transfer taxes, and any fees, discounts and commissions of
underwriters, selling brokers or dealers applicable to shares sold by such
Holder.
b. PRIORITY IN INCIDENTAL REGISTRATIONS. If (i) a registration pursuant
to this Section 3 involves an underwritten offering of the securities so being
registered to be distributed (on a firm commitment basis) by or through one or
more underwriters of recognized standing under underwriting terms appropriate
for such a transaction, and (ii) the managing underwriter of such underwritten
offering shall inform the Company and the Holders (if any Registrable Securities
held by the Holders have been requested to be included in such underwritten
offering) by letter of its belief that the distribution of all or a specified
number of the Registrable Securities requested to be included concurrently with
the securities being distributed by such underwriters would interfere with the
successful marketing of the securities being distributed by such underwriters
(such writing to state the appropriate number of the Registrable Securities
requested to be included which may be distributed without such effect), then the
Company may, upon written notice to all the Holders, reduce (if and to the
extent stated by such managing underwriter to be necessary to eliminate such
effect) the number of the Registrable Securities requested to be included so
that the resultant aggregate number of the Registrable Securities requested to
be included that will be included in such registration shall be equal to the
maximum number of shares stated by such managing underwriter letter as would not
so interfere; PROVIDED, HOWEVER, that the priority in such registration shall be
as follows, (i) first, securities offered for the account of the Company or, if
such registration is for a security holder exercising a Demand Registration,
then securities offered for the account of such security holder, and (ii)
second, the Registrable Securities of each Holder pro rata in proportion to
their share of the then outstanding Registrable Securities; PROVIDED, that
Registrable Securities of Securicor or any of its Affiliates shall not be
included in the first such registration by the Company after the date of this
Agreement unless, and only to the extent that, the aggregate number of
Registrable Securities being offered for the account of the Company, Xxxxxxxx,
Midland and Roamer, collectively, do not equal the maximum number of shares
stated by such managing underwriter letter; and PROVIDED, FURTHER, that during
the two-year period following the date hereof Securicor and its Affiliates shall
not, collectively or individually, be entitled, in any particular registration,
to offer for registration pursuant to the foregoing clause (ii) more than 25% of
the number of shares stated in such managing underwriter's letter.
Notwithstanding anything in this Section 3.b. to the contrary, Holders shall not
have any right to include their Registrable Securities in any distribution or
registration of
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securities by the Company, which is a result of a (1) merger, (2) consolidation,
(3) acquisition, (4) exchange offer, (5) recapitalization, (6) other
reorganization, (7) dividend reinvestment plan, (8) stock option plan or other
employee benefit plan, or (9) any similar transaction having the same effect.
4. LIMITATIONS. Notwithstanding the provisions of Sections 2,
and 3 hereof:
a. the Company shall have the right to delay or suspend the preparation
and filing of a registration statement for up to 90 days if in the reasonable
and good faith judgment of a majority of the Directors on the Board of Directors
of the Company such preparation or filing would impede, delay or interfere in
any material fashion with any bona fide material financing or bona fide material
business transaction by the Company at time of receipt of the request for such
registration or with the ability of the Company to conduct its affairs or would
have a material adverse effect on the business, properties or financial
condition of the Company; PROVIDED, HOWEVER, that the Company shall use its best
efforts to cause any such registration statement to become effective within 150
days of receipt of the request therefor and shall only be entitled to utilize
this clause once in any 12 month period;
b. if, prior to receiving a request for registration, the Company is
working on an underwritten public offering of Common Stock (a "Company Initiated
Public Offering") and is advised by the managing underwriter(s) in writing that
such offering would in its or their opinion be adversely affected by such
filing, then the Company shall have the right, upon notice to the Holder
requesting registration within 14 days after receipt of such request, to delay
or suspend the filing of the registration statement requested by such Holder;
PROVIDED that the Company shall use its best efforts to cause any such
registration statement requested by the Holders to become effective within 180
days (or, if required by the underwriters for the Company Initiated Public
Offering, within 270 days) after the date on which all securities covered by the
Company Initiated Public Offering have been sold, and that the Company shall use
its best efforts to include any Registrable Securities that are the subject of a
notice delivered by Holders under Section 3 in the registration statement for
such Company Initiated Public Offering; and
c. the Company shall not be required to prepare or file a registration
statement with respect to any Demand Request under Section 2 if the reasonably
anticipated aggregate offering price of such Registrable Securities does not
exceed Three Million Dollars ($3,000,000) or if the Holders making the Demand
Registration Requests would be able to sell all the Registrable Securities they
have requested to sell pursuant to Rule 144 under the Securities Act.
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5. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of Sections 2 or 3 to effect the registration of any Registrable
Securities under the Securities Act, the Company will:
a. prepare and file with the Commission a registration
statement with respect to such Registrable Securities, and use its best efforts
to cause such registration statement to become effective as provided herein;
b. prepare and file with the Commission such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective until the earlier
of (i) the date on which all Registrable Securities covered by such registration
statement have been sold and (ii) 150 days after the effective date of such
registration statement;
c. use its best efforts to register or qualify the Registrable
Securities for sale under such other securities or blue sky laws of such
jurisdictions as the Holders may reasonably request (such reasonableness being
determined on the basis of factors such as the cost to the Company) and do any
and all other acts and things which may be reasonably necessary or desirable to
enable the Holders to consummate the disposition of the Registrable Securities
in such jurisdictions; PROVIDED, HOWEVER, that the Company shall not be required
to qualify generally to do business as a foreign corporation, subject itself to
taxation, or consent to general service of process, in any jurisdiction wherein
it would not, but for the requirements of this Section 5, be obligated to be so
qualified;
d. furnish to the Holders and to the underwriters of the securities
being registered a reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus, and such other documents as the
Holders or underwriters may reasonably request in order to facilitate the public
offering of such securities;
e. prepare and file with the Commission, promptly upon the request of
the Holders, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for the Holders (and concurred in by
counsel for the Company), is required under the Securities Act or the rules and
regulations thereunder in connection with the distribution of the Registrable
Securities by the Holders;
f. prepare and promptly file with the Commission, and promptly notify
the Holders of the filing of, any amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event shall have occurred
as the result of which any such prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact or omit to state any
material fact necessary to
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make the statement therein, in the light of the circumstances in
which they were made, not misleading;
g. notify each seller of any Registrable Securities covered by such
registration statement and the managing underwriter (as such term is defined in
Rule 12b-2 under the Exchange Act), if any, promptly and, if requested by any
such person, confirm such notification in writing, (i) when a prospectus or any
prospectus supplement has been filed with the Commission, and, with respect to a
registration statement or any post-effective amendment thereto, when the same
has been declared effective by the Commission, (ii) of any request by the
Commission for amendments or supplements to a registration statement or related
prospectus, or for additional information, (iii) of the issuance by the
Commission of any stop order or the initiation of any proceedings for such or a
similar purpose (and the Company shall make every commercially reasonable effort
to obtain the withdrawal of any such order at the earliest possible moment),
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose (and the Company shall make every commercially reasonable effort to
obtain the withdrawal of any such suspension at the earliest possible moment),
(v) of the occurrence of any event which requires the making of any changes to a
registration statement or related prospectus so that such documents will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (and
the Company shall promptly prepare and furnish to such seller and managing
underwriter a reasonable number of copies of a supplemented or amended
prospectus such that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading), and (vi) of the Company's determination
that the filing of a post-effective amendment to the Registration Statement
shall be necessary or appropriate. Each Holder shall be deemed to have agreed by
acquisition of Registrable Securities that upon the receipt of any notice from
the Company of the occurrence of any event of the kind described in clause (v)
of this Section 5(g), such Holder shall forthwith discontinue such Holder's
offer and disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder shall have
received copies of a supplemented or amended prospectus which is no longer
defective as contemplated by clause (v) of this Section 5(g), and, if so
directed by the Company, shall deliver to the Company, at the Company's expense,
all copies (other than permanent file copies) of the defective prospectus
covering such Registrable Securities which are then in such Holder's possession.
In the event the Company shall provide any notice of the type referred to in the
preceding sentence, the 150-day period mentioned in
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Section 5.b(ii) shall be extended by the number of days from and including the
date such notice is provided, to and including the date when each seller of any
Registrable Securities covered by such registration statement shall have
received copies of the corrected prospectus contemplated by clause (v) of this
Section 5(g), plus an additional seven days;
h. at least three days prior to the filing of any amendment or
supplement to such registration statement or prospectus, furnish copies thereof
to the Holders and refrain from filing any such amendment or supplement to which
the Holders shall have reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the requirements of the
Securities Act or the rules and regulations thereunder, unless in the opinion of
counsel for the Company the filing of such amendment or supplement is reasonably
necessary to protect the Company from any liabilities under any applicable
federal or state law and such filing will not violate applicable law; and
i. at the request of the Holders, obtain an opinion from counsel to the
Company, and a "cold comfort" letter from an independent certified public
accounting firm of national recognition and standing who have certified the
Company's financial statements included in the registration statement or any
amendment thereto, in each case in form and substance satisfactory to the
majority in interest of the Holders participating in the registration ("Majority
Holders"), and covering such matters of the type customarily covered by such
opinions and "cold comfort" letters as the Majority Holders shall reasonably
request.
6. EXPENSES. Except as otherwise provided herein, the Company shall bear all
reasonable Registration Expenses. Each Holder participating in any such
registration shall be responsible for, and shall pay, any transfer taxes and any
fees, discounts or commissions of underwriters, selling brokers and dealers
relating to the sale or distribution of the Registrable Securities being sold by
such Holder pursuant to such registration, as well as any fees of counsel to
such Holder that are not specifically designated as Registration Expenses in
Section 1 hereof and any fees and disbursements of any accountants retained by
such Holder.
7. INDEMNIFICATION.
a. BY THE COMPANY. The Company shall indemnify and hold harmless each
Holder, its officers, directors and employees, and any underwriter (as defined
in the Securities Act) for such Holder and each person, if any, who controls
such Holder or such underwriter within the meaning of the Securities Act, from
and against any and all loss, damage, liability or claims, to which such Holder,
or any officer, director or employee of such Holder, or any such underwriter or
controlling person becomes subject under the Securities Act or otherwise, and
subject to the provisions of Section 7(c) hereof to reimburse them, from time to
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time upon request, for any legal or other costs or expenses reasonably incurred
by them in connection with investigating any claims or defending any actions (as
provided herein), insofar as such losses, damages, liabilities, claims, costs or
expenses are caused by any untrue statement or alleged untrue statement of any
material fact contained in such registration statement, any prospectus contained
therein or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent that any such
loss, damage, liability, claim, cost or expense arises out of or is based upon
(i) an untrue statement or alleged untrue statement or omission or alleged
omission (other than a statement or omission about the Company) made in
conformity with information furnished by the Holder seeking indemnification in
writing specifically for use in the preparation of a registration statement or
(ii) a Holder's failure to deliver a copy of the registration statement,
prospectus or any amendments or supplements thereto.
b. BY HOLDERS OF REGISTRABLE SECURITIES. Each Holder of Registrable
Securities included in a registration pursuant to this Agreement shall indemnify
and hold harmless the Company, its officers, directors and agents, each other
Holder, any underwriter and each person, if any, who controls the Company, such
other Holder or such underwriter, from and against any and all loss, damage,
liability or claim, to which the Company or its officers, directors or agents,
or such other Holder or any controlling person and/or any underwriter becomes
subject under the Securities Act or otherwise and to reimburse them, from time
to time upon request, for any legal or other costs or expenses reasonably
incurred by them in connection with investigating any claims or defending any
actions, insofar as such losses, damages, liabilities, costs, or expenses are
caused by any untrue or alleged untrue statement of any material fact contained
in such registration statement, any prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
strict conformity with written information furnished by such indemnifying Holder
specifically for use in the preparation of such registration statement, PROVIDED
THAT the obligations of the Holder hereunder shall be limited to an amount equal
to the net proceeds to the Holder from the sale of such Holder's Registrable
Securities as contemplated hereunder.
c. NOTICE. Promptly after receipt by an indemnified party of notice
of the commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will promptly notify the
indemnifying party in writing of
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the commencement thereof; but the omission to so notify the indemnifying party
will not relieve such indemnifying party from any liability which it may have to
any indemnified party otherwise than hereunder. In case such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall have the right to participate
in, and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party shall have the right to employ its own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such suit, action, claim or proceeding, (ii) the indemnifying party shall not
have employed counsel (reasonably satisfactory to the indemnified party) to take
charge of the defense of such action, suit, claim or proceeding within a
reasonable time after notice of commencement of the action, suit, claim or
proceeding, or (iii) such indemnified party shall have reasonably concluded that
there may be defenses available to it which are different from or additional to
those available to the indemnifying party which, if the indemnifying party and
the indemnified party were to be represented by the same counsel, could result
in a conflict of interest for such counsel or materially prejudice the
prosecution of the defenses available to such indemnified party. If any of the
events specified in clauses (ii) or (iii) of the preceding sentence shall have
occurred or shall otherwise be applicable, then the fees and expenses of one
counsel or firm of counsel selected by a majority in interest of the indemnified
parties shall be borne by the indemnifying party. If, in any case, the
indemnified party employs separate counsel, the indemnifying party shall not
have the right to direct the defense of such action, suit, claim or proceeding
on behalf of the indemnified party. Anything in this paragraph to the contrary
notwithstanding, an indemnifying party shall not be liable for the settlement of
any action, suit, claim or proceeding effected without its prior written consent
(which consent in the case of an action, suit, claim or proceeding exclusively
seeking monetary relief shall not be unreasonably withheld). Such
indemnification shall remain in full force and effect irrespective of any
investigation made by or on behalf of an indemnified party.
d. CONTRIBUTION. If the indemnification from the indemnifying
party as provided in this Section 7 is unavailable or is otherwise insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses. The relative fault of such
indemnifying party shall be determined by reference to,
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among other things, whether any action in question, including any untrue (or
alleged untrue) statement of a material fact or omission (or alleged omission)
to state a material fact, has been made, or relates to information supplied by
such indemnifying party or such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 7(c) hereof, any legal
or other fees or expenses reasonably incurred by such party in connection with
any such investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation other than as described above.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
If, however, indemnification is available under this Section
7, the indemnifying parties shall indemnify each indemnified party to the
fullest extent provided in this Section 7 without regard to the relative fault
of said indemnifying party or indemnified party or any other equitable
consideration.
8. HOLDER TO PROVIDE INFORMATION. In the event a Holder requests a registration
of Registrable Securities, such Holder shall provide all such information and
materials and shall take all such actions as may be reasonably and customarily
required in order to permit the Company to comply with all applicable
requirements of the Commission and to obtain any desired acceleration of the
effective date of such registration statement. Specifically, the Company may
require a Holder to furnish the Company with such information regarding such
Holder and the distribution of its securities as is customarily required in such
registrations as the Company may from time to time reasonably request in writing
and as shall be required by law or the Commission.
9. RULE 144 REPORTING. With a view to making available the benefits of certain
rules and regulations of the Commission which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees
to:
a. Make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities
Act;
b. Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and
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c. So long as a Holder owns any Registrable Securities, furnish to a
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed as a Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing a Holder to sell any such securities without registration.
10. GRANTING OF REGISTRATION RIGHTS. The Company shall not, without the prior
written consent of Holders holding at least 65% of the Registrable Securities
then held by all the Holders, grant to any Person registration rights of any
kind or nature with respect to Registrable Securities or other capital shares or
the Company if such rights would have priority over the rights granted to the
Holders pursuant to this Agreement, whether in terms of the number of shares
which holders may include in any registration, the timing of any registration of
shares, the rights of holders to demand registration of shares held by them at
the time requested by them, or in any other material respect.
11. REMEDIES. The Company recognizes and agrees that if the Company fails to
comply with its obligations under this Agreement, the Holders may not have an
adequate remedy at law. Such failure will cause the Holders irreparable harm for
which there may be no adequate remedy at law, and the Company hereby consents to
the issuance of an injunction in favor of the Holders by any court of competent
jurisdiction. The right of such Holders to obtain an injunction hereunder shall
not be considered a waiver of any right on the part of the Holders to recover
damages and to assert any other claims for remedies which the Holders may have
at law or in equity. The Company agrees to bear any expenses incurred by the
Holders, including reasonable attorneys fees, in enforcing their rights under
this Agreement except in cases in which it is determined that the Company was
not in breach of its obligation to provide such rights.
12. MISCELLANEOUS.
a. WAIVERS AND AMENDMENTS. This Agreement may be amended or modified in
whole or in part only by a writing which makes reference to this Agreement
executed by the Company and Holders holding at least 65% of the Registrable
Securities then held by all the Holders. The obligations of any party hereunder
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the party
claimed to have given the waiver; PROVIDED, HOWEVER, that any waiver by any
party of any violation of, breach of, or default under any provision of this
Agreement or any other agreement provided for herein shall not be construed as,
or constitute, a continuing waiver of such provision, or waiver of any other
violation of, breach of or default under any other provision of this Agreement
or any other agreement provided for herein.
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b. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of
the parties hereto and supersedes all prior contracts, agreements, arrangements,
communications, discussions, representations, and warranties, whether oral or
written, among the parties with respect to the subject matter hereof.
c. GOVERNING LAW. This Agreement shall in all respects be governed by and
construed in accordance with the internal substantive laws of the State of New
York without giving effect to the principles of conflicts of law thereof.
d. NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and be deemed to have been duly given if
personally delivered or five business days after being sent by registered or
certified mail, return receipt requested, postage prepaid, to the parties at
their respective addresses set forth below.
If to the Company: INTEK DIVERSIFIED CORPORATION
000 Xxxx 000xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: President
with a copy to: Xxxxxxx, Xxxxxxx & Xxxxxx P.L.L.
Xxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
If to a Holder: To the Person and Address
specified on the signature page for such
Holder.
Any party by written notice to the others may change the address of the persons
to whom notices or copies thereof shall be directed.
e. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together will constitute one and the same instrument.
f. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, except that the Company may not assign or transfer its rights
hereunder without the prior written consent of the Holders. A Holder that
transfers not less than 100% of the Registrable Securities it then holds to an
entity in a transaction that is not registered under the Securities Act shall be
entitled to assign its rights to demand registration hereunder to such entity,
which entity shall become a "Holder" for purposes of this Agreement PROVIDED
THAT the assignee thereof assumes and agrees to perform all the obligations of a
Holder under this Agreement. A permitted assignee who acquires from a Holder
such number of Registrable Securities as shall be equal to or greater than 10%
of such Holder's holdings of Registrable Securities as of the date of
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137
this Agreement shall be entitled to exercise incidental registration rights
pursuant to the terms and provisions of Section 3 of this Agreement, PROVIDED
THAT such permitted assignee assumes and agrees to perform all of the
obligations of a Holder under this Agreement.
g. THIRD PARTIES. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any person or entity
other than the parties hereto any rights or remedies under or by reason of this
Agreement.
h. TERMINATION OF PRIOR AGREEMENT. This Registration Rights Agreement
supersedes and replaces that certain Registration Rights Agreement entered into
between the Company, Roamer, Simmonds, Anglo York and Xxxxxx Xxxxx as of
September 23, 1994.
[Remainder of Page Intentionally Left Blank.]
[Signatures commence on next page.]
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IN WITNESS WHEREOF, the undersigned have executed, or have
caused their duly authorized representatives to execute, this Registration
Rights Agreement as of the date first written above.
INTEK DIVERSIFIED CORPORATION
By:
--------------------------------
Name:
Title:
SECURICOR COMMUNICATIONS LIMITED SECURICOR INTERNATIONAL LIMITED
By: By:
-------------------------------- --------------------------------------
Name: Name:
Title: Title:
Address:__________________________ Address:_________________________
__________________________ _________________________
__________________________ _________________________
Tel: __________________________ Tel: _________________________
Fax: __________________________ Fax: _________________________
With copies to: With copies to:
__________________________ _________________________
__________________________ _________________________
__________________________ _________________________
Tel: __________________________ Tel: _________________________
Fax: __________________________ Fax: _________________________
XXXXXXXX CAPITAL LIMITED MIDLAND INTERNATIONAL CORPORATION
By: By:
-------------------------------- --------------------------------------
Name: Name:
Title: Title:
Address:__________________________ Address:_________________________
__________________________ _________________________
__________________________ _________________________
Tel: __________________________ Tel: _________________________
Fax: __________________________ Fax: _________________________
With copies to: With copies to:
__________________________ _________________________
__________________________ _________________________
__________________________ _________________________
Tel: __________________________ Tel: _________________________
Fax: __________________________ Fax: _________________________
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139
XXXX & XXXX, XX LIMITED OCTAGON INVESTMENTS LIMITED
By: By:
-------------------------------- --------------------------------------
Name: Name:
Title: Title:
Address:__________________________ Address:_________________________
__________________________ _________________________
__________________________ _________________________
Tel: __________________________ Tel: _________________________
Fax: __________________________ Fax: _________________________
With copies to: With copies to:
__________________________ _________________________
__________________________ _________________________
__________________________ _________________________
Tel: __________________________ Tel: _________________________
Fax: __________________________ Fax: _________________________
ROAMER ONE HOLDINGS, INC. ANGLO YORK INDUSTRIES, INC.
By: By:
-------------------------------- --------------------------------------
Name: Name:
Title: Title:
Address:__________________________ Address:_________________________
__________________________ _________________________
__________________________ _________________________
Tel: __________________________ Tel: _________________________
Fax: __________________________ Fax: _________________________
With copies to: With copies to:
__________________________ _________________________
__________________________ _________________________
__________________________ _________________________
Tel: __________________________ Tel: _________________________
Fax: __________________________ Fax: _________________________
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140
XXXXXX XXXXXXXX
Address:__________________________
__________________________
__________________________
Tel: __________________________
Fax: __________________________
With copies to:
__________________________
__________________________
__________________________
Tel: __________________________
Fax: __________________________
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REGISTRATION RIGHTS AGREEMENT
SHAREHOLDER SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned have executed, or have
caused their duly authorized representatives to execute, this Registration
Rights Agreement as of the date first written above.
(If a corporation) _________________________________
By:________________________________
Name:
Title:
(If an Individual) ___________________________________
Name:
Address: __________________________
__________________________
__________________________
Telephone:__________________________
Facsimile:__________________________
With copies to:__________________________
__________________________
__________________________
__________________________
Telephone:__________________________
Facsimile:__________________________
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EXHIBIT F
---------
LICENSE AGREEMENT
-----------------
This License Agreement (this "Agreement") is entered into as
of September 19, 1996 by and between Midland USA, Inc. a Delaware corporation
("Midland USA") and wholly owned subsidiary of INTEK Diversified Corporation, a
Delaware corporation ("Intek"), and Midland International Corporation, a
Delaware corporation ("Midland") and wholly owned indirect subsidiary of
Xxxxxxxx Capital Limited, an Ontario corporation ("Xxxxxxxx").
RECITALS
--------
In connection with related transactions, Midland is assigning
ownership of the Trademark (as defined in Section 1.(h) of this Agreement) to
Midland USA and Midland USA is granting back to Midland a long term exclusive
license to use the Trademark on Licensed Products (as defined in Section 1.(d),
subject to other preexisting license rights licensed to Midland Consumer
International, Ltd., a British Virgin Islands corporation (See Attachment A),
to American Digital Communication (See Attachment), and to LETT Electronic's
Inc. (See Attachment C) (collectively, the "Grandfathered Licensees").
A G R E E M E N T
-----------------
NOW, THEREFORE, in consideration of the mutual covenants and
the provisions hereinafter set forth, and for other good and valuable
consideration, the parties agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings specified below:
(a) "Affiliate" shall mean, with respect to any Person, any
other Person or entity that controls such Person, or any Person controlled by it
or under common control with it.
(b) "Asset and Trademark Agreement" shall mean the Amended and
Restated Sale of Assets and Trademark Agreement entered into as of the date
hereof by and among Intek, Midland
and Xxxxxxxx.
(c) "Consumer Products" shall mean all consumer wireless
products and consumer electronic products consisting of consumer communications
equipment, consumer automotive equipment, consumer marine equipment, consumer
amateur radio products and consumer audio products and/or video home
entertainment equipment, which are being sold at any time in department stores
and/or electronic specialty stores, including, but not limited to, citizen band
radios, GMRS radios, marine radios, scanners, intercoms, radio recorders, car
radios, itinerant radios, consumer GPS marine products, satellite receivers,
video cassette recorders, video cameras, stereophonic and high fidelity
components and/or systems, compact disc players, laser disc players, cordless
telephones, consumer paging products, telephones with video, and other
telephones and antennas and other accessories for the foregoing. "Consumer
Products"
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2
specifically does not include cellular telephones, personal communications
systems (PCS) telephones, commercial and two-way paging products, commercial
wireless satellite antennas, LMR antenna products, all other electronic or
communications equipment for use in the professional and commercial market and
antennas and other accessories for the foregoing.
(d) "Licensed Products" shall mean (i) Consumer Products, (ii) Midland
model products No. 70-1336, 70-1526, 70-9020 and 70-9405, (iii) any subsequent
upgrades, enhancements, modifications or improvements of the products described
in subsections (i) and (ii) above, and (iv) any other products that are not LMR
Products.
(e) "LMR Products" shall mean any existing and future land mobile
radio products for use in the professional and commercial markets.
(f) "Person" shall mean an individual, partnership (general or
limited), corporation, association or other form of business organization
(whether or not regarded as a legal entity under applicable law), trust, estate
or any other entity.
(g) "Territory" shall mean the United States of America, including all
of its territories and possessions.
(h) "Trademark" shall mean the United States trademarks set forth in
the trademark registrations listed in EXHIBIT A and the trade name "Midland" in
the Territory and similar variations thereof, all United States registrations,
applications and renewals thereof now existing or hereinafter obtained by
Midland USA, all federal, state and common law rights therein within the
Territory and all logos used in connection therewith, whether or not registered.
(i) "Trademark Product" shall mean any Licensed Product bearing a
Trademark licensed under this agreement.
2. GRANT OF LICENSE. Subject to and in consideration of the terms and
condition of this Agreement and the trademark assignment, Midland USA grants to
Midland (i) a paid-up perpetual exclusive license to use the Trademark in the
Territory and to sublicense its use to others, in connection with the promotion,
manufacture, sale, servicing and/or distribution of Licensed Products.
Midland agrees that, without the prior written consent of Midland USA, (i)
neither Midland nor any of Midland's Affiliates or sublicensees will store,
sell, manufacture, distribute or otherwise transfer or permit to store, sell,
manufacture, distribute or transfer LMR Products using the Trademark to
end-users in the Territory (and will take reasonable precautions to prevent its
distributees or agents from selling, distributing or transferring LMR Products
bearing the Trademarks
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3
to end users in the Territory). The parties acknowledge that certain limited
marketing and promotional activities may be conducted by Midland or its
sublicensees from outside the Territory which crosses-over into the Territory
and, also, that certain limited marketing and promotional activities may occur
by Midland USA or its sublicensees from within the Territory which crosses-over
into areas outside the Territory. The parties shall not target the cross border
market, shall minimize such marketing and promotional activities that occur
across the Territory's border, and agree that such minimal activity shall not
give rise to a breach of contract, trademark infringement, or other claim.
3. PROTECTION OF TRADEMARK. Midland shall provide reasonable
cooperation with Midland USA to protect the Trademark and shall refrain from any
and all acts of commission or omission that may in any way endanger Midland
USA's property rights or affect the validity of or impair Midland USA's rights
with respect to the Trademark. In furtherance of such purposes, Midland shall:
(a) Use the Trademark only in the manner reasonably
approved by Midland USA and follow Midland USA's reasonable
instructions in connection therewith;
(b) Exercise such rights, if any, as Midland may have,
including any rights of inspection, under the agreements between Midland and the
Grandfathered Licensees to regulate and approve all uses of the Trademark by
such Grandfathered Licensees on the Licensed Products or in any promotional
materials. Midland's exercise of such rights of approval shall be subject to
Midland USA's rights under this Agreement (including this Section 3, Section 5
and Section 7) to regulate and approve Midland's use of the Trademark and shall
otherwise be governed by the standards of usage of the Trademark set forth in
this Agreement.
(c) Affix appropriate notations, when legally required, as to
the ownership and registration of the Trademark on Licensed Products and/or the
promotional and advertising materials;
(d) With the exception of trademarks or trade names listed on
EXHIBIT B which are currently owned or used by Midland and which use is hereby
approved, refrain from using any name, xxxx, device, symbol, insignia,
designation, labeling or packaging linked with the Trademark or to form a
composite xxxx with the Trademark without the prior written approval of Midland
USA, which approval shall not be unreasonably withheld. In the event Midland
adopts a xxxx which is approved by Midland USA and is used in a manner that is
linked with the Trademark (but does not form a composite xxxx), Midland may,
with Midland USA's prior written consent, which consent shall not be
unreasonably withheld, apply to register any such linked trademark (exclusive of
the Trademark), in Midland's name and use such linked trademark subject to the
terms and conditions of this Agreement;
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4
and, further, provided that Midland pays the full costs for any applications,
registrations and maintenance in connection therewith. In the event Midland
adopts a xxxx which is approved by Midland USA and is used in a manner that
forms a composite xxxx with the Trademark, all rights, title and interest in
such composite xxxx shall be owned by Midland USA and shall accrue to the sole
benefit of Midland USA; and
(e) Comply with all applicable laws and regulations,
including, but not limited to, customs laws and regulations, in connection with
the manufacture, promotion, sale, servicing, distribution and importation of
Trademark Products.
4. APPROVAL OR CONSENT. Unless otherwise expressly set forth herein,
all requests for approval or consent required to be given hereunder shall be
responded to within thirty (30) days of the receipt of such request. Any request
not responded to within such period of time shall be deemed automatically
approved or consented to, as the case may be.
5. PROMOTIONAL AND ADVERTISING MATERIALS. In recognition of the value
of the Trademark to Midland USA and the loss and damage that Midland USA would
incur from any improper or inappropriate use of the Trademark, Midland shall:
(a) Submit to Midland USA within one month after publication
one copy of any promotional and advertising materials that use the Trademark or
that refer to Midland USA or its Affiliates, except that Midland need not submit
to Midland USA promotional and advertising materials that use the Trademark or
which refer to Midland USA or its Affiliates in a manner substantially similar
to promotional and advertising materials previously used by Midland or
previously submitted and approved by Midland USA;
(b) Utilize its best efforts so that the Trademark is not
used in any manner that is reasonably likely to be considered offensive or to
tarnish the Trademark;
(c) Affix appropriate notations, when legally required, on any
promotional or advertising materials that in any way relate or refer to the
Trademark Products so as to confirm Midland USA's ownership and registration of
the Trademark; and
(d) Take such other and additional reasonable actions, as
Midland USA may from time to time reasonably request in order to protect the
Trademark and the value to the Trademark to Midland USA.
For purposes of this Section 5, "promotional and advertising materials" shall
include, without limitation, catalogues, labeling and packaging materials, sales
literature and similar items.
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5
6. CONDITIONS TO APPEARANCE OF TRADEMARK. Prior to any new application
to Licensed Products of the Trademark, Midland shall provide Midland USA with an
identification or sample of such product for review and approval. Midland will
display the Trademark only in such form and manner as shall be specifically
approved by Midland USA, which approval shall not be unreasonably withheld.
7. NOTICE OF INFRINGEMENT. Midland shall, promptly after Midland gains
actual knowledge thereof, notify Midland USA of any infringement, suspected or
threatened, of Midland USA's (or Midland's license) rights in respect of the
Trademark, or of any third party allegation or claim that the Trademark is
liable to cause deception or confusion to the public or is liable to dilute or
infringe any right.
8. PROTECTION OF TRADEMARK RIGHTS. Midland U.S.A. shall promptly
determine the most appropriate course of action in the Territory against any
third party to protect the Trademark, to prevent infringement, suspected or
threatened, of Midland USA's rights, Midland's license rights or Midland's
sublicensee's rights in respect of the Trademark, and to defend any claim that
the Trademark is liable to cause deception or confusion to the public or is
liable to dilute or infringe any right. Midland U.S.A. shall commence such
course of action within thirty (30) days of discovery of the infringement or the
claim and prosecute it diligently. Midland U.S.A. shall act in its own name
and/or, unless Midland decides to join with Midland's course of action, in
Midland's name, as may be appropriate. Midland shall have the option of joining
with Midland U.S.A. in the conduct of any legal action commenced, prosecuted or
defended by Midland U.S.A. at any time and, if Midland U.S.A. fails to commence,
prosecute and defend any such legal action within sixty (60) days of discovery
of the infringement, to commence, prosecute or defend any action in its own name
or, with Midland U.S.A.'s approval, which shall not be unreasonably withheld, in
the name of Midland U.S.A. Except as set forth in paragraph 10, nothing
contained herein shall, however, be deemed to require Midland USA or any of its
Affiliates to commence and pursue any such cause of action against any person,
nor to prevent Midland USA or any of its Affiliates from commencing and pursuing
such course of action. If Midland decides to join with Midland U.S.A. in the
conduct of any such legal action, Midland USA and Midland shall each assume
their own expenses in connection with any such course of action and any
recoveries shall be divided between Midland USA and Midland in proportion to
their respective reasonable expenses in connection therewith.
9. OTHER ACTIONS. Midland shall cooperate with Midland USA in any
reasonable manner requested by Midland USA in order to protect the Trademark and
shall, among other things, execute such documents and take such actions as may
be reasonably required by Midland USA in connection with the protection of the
Trademark and the registrations thereof, including, without limitation,
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6
cooperating with Midland USA in executing and filing necessary or desirable
agreements for registration as a user of the Trademark and in applying to
register and renew registrations of the Trademark in the U.S. Midland USA shall
keep all registrations for the Trademark that are licensed hereunder valid and
shall not allow such registrations to lapse in a manner that would materially
impair Midland's rights under this license.
10. QUALITY CONTROL STANDARDS AND INSPECTIONS.
(a) The quality of the Trademark Products promoted, sold or
distributed by Midland shall be at any time at least of a standard similar to
that of Licensed Products sold or distributed by Midland prior to the date
hereof. Midland shall utilize and abide by standards and specifications
commensurate with such quality when servicing or repairing any Trademark
Product. Midland USA shall have the right, through its employees or other
designated representatives, to enter Midland's premises or any place where the
Trademark Products are manufactured or stored, at any reasonable time, during
normal business hours and upon thirty (30) days prior written notice, to
inspect, examine and test any Trademark Product and review the applicable
quality standards and specifications, manufacturing procedures and product
complaints and remove, for examination and testing, a reasonable quantity of
samples of such Trademark Products selected by Midland USA or its designee from
Midland's line or inventory. Midland USA's right of inspection shall be
exercised no more frequently than once per year, except at such times that
Midland is on notice pursuant to section 9(b) and has not yet cured the
deficiency, in which case the right of inspection shall not be limited in number
for as long as the deficiency remains uncured, shall be limited to matters
related to the deficiency, and may be conducted on twenty-four hours notice. All
inspections shall be conducted so as to minimize any disruption to the business.
Midland USA will maintain in confidence any proprietary or confidential
information to which it is given access in the course of such inspections and
shall use such information only for purposes of the quality control provisions
of this agreement.
(b) In the event that any Trademark Products are reasonably
found by Midland USA or its designee not to satisfy the standards set forth in
this Xxxxxxx 00, Xxxxxxx XXX shall so notify Midland in writing and shall
specify the deficiencies in quality. Upon such notification, Midland shall
promptly institute reasonable actions necessary to remedy the deficiencies and
give written notice of such actions to Midland USA so that the standards set
forth in this Section 10 are promptly met to the reasonable satisfaction
of Midland USA.
11. INDEMNIFICATION OF MIDLAND USA.
(a) Notwithstanding any provision in this Agreement to the
contrary, Midland shall indemnify, defend and hold Midland USA harmless from and
against any and all liabilities, damages,
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7
losses, claims, reasonable costs and expenses (including reasonable attorneys'
fees and investigation costs), actually incurred by Midland USA and net of any
tax benefits to the indemnified party, arising out of or resulting from: (i) any
use of the Trademark by Midland or any of its Affiliates or sublicensees other
than as expressly permitted hereunder or licenses granted to the Grandfathered
Licensees, or (ii) notwithstanding (i) above, the manufacture, promotion,
distribution, sale, servicing, resale or use of, and any warranty issued or
contractual obligation undertaken in connection with, any Trademark Products
after the date hereof by either Midland, the Grandfathered Licensees, or any
Person who manufactures, promotes, sells or distributes Trademark Products in
the U.S. as a sublicensee of Midland. If Midland USA desires to make a claim
against Midland under this Section 11.(a) which involves a claim by a person
other than the parties, Midland USA shall make such claim in the manner and
subject to the terms and conditions set forth in Section 11.3(a) through and
including Section 11.3(f) of the Sale of Assets Agreement.
(b) Notwithstanding any provision in this Agreement to the
contrary, Midland USA shall indemnify, defend and hold Midland harmless from and
against any and all liabilities, damages, losses, claims, reasonable costs and
expenses (including reasonable attorneys' fees and investigation costs),
actually incurred by Midland and net of any tax benefits to the indemnified
party, arising out of or resulting from: (i) any use of the Trademark by Midland
USA or a Midland USA licensee other than Midland or its subsidiaries (including
the Grandfathered Licensees) outside the Territory; or (ii) any use of the
Trademark by Midland USA or a Midland USA licensee on Licensed Products. If
Midland desires to make a claim against Midland USA under this Section which
involves a claim by a person other than the parties, Midland shall make such
claim in the manner and subject to the terms and conditions set forth in Section
11.3(a) through and including Section 11.3(f) of the Sale of Assets Agreement.
12. ACTIONS OF GRANDFATHERED LICENSEES. The parties hereto acknowledge
that pursuant to the terms and conditions of the agreements granting, directly
or indirectly, the Grandfathered Licensees a right to use the Trademarks in
whole or in part in the Territory, the Grandfathered Licensees have obligations
as licensees which may differ from those required of Midland and its other
sublicensees hereunder. Midland and Midland U.S.A. hereby agree that such
Grandfathered Licenses shall be considered sublicensees of Midland and that,
notwithstanding anything to the contrary contained herein, the actions of
commission or omission of a Grandfathered Licensee shall not be a breach of this
Agreement by Midland unless such act of commission or omission would constitute
a breach of the agreement between Midland and such Grandfathered Licensee.
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13. BREACH OR DEFAULT. Midland USA will have the right to terminate
this Agreement if:
(a) Midland breaches any material term or condition of this
Agreement and (i) fails to take reasonable action to remedy such breach within
sixty (60) calendar days after receipt from Midland USA of notice of such
breach, or (ii) has already received three notices of breach from Midland USA
for breaches of any material term or condition in the 365 day period immediately
preceding such breach; or
(b) the Trademark is not used by Midland, its assigns, or its
sublicensees for a period of eighteen (18) consecutive months.
Midland USA's knowledge of a breach shall not prevent Midland USA from
exercising any right under this Section 13 at any time. Upon termination, no
payment shall be due by Midland USA, Midland shall immediately cease to promote,
sell and distribute the Trademark Products in the Territory or to use the
Trademark or any confusingly similar trademark or name in the Territory,
provided, however, that Midland shall have a period of three (3) months from the
date of such termination to use up its supplies of promotional and advertising
materials and Trademark Products on which the Trademark had been applied prior
to the date of such termination, unless Midland USA decides at its sole option,
to purchase all of Midland's Trademark Products at a value equal to Midland's
out-of-pocket costs incurred for such Trademark Products, and provided, further,
that such use of the Trademark Products shall otherwise be in accordance with
the terms and conditions of this Agreement.
14. BANKRUPTCY. Subject to Midland's rights to assigns this License to
SCL, Inc. or an Affiliate of Xxxxxxxx Capital Limited, if a petition in
bankruptcy is filed by or against the then holder of this License (a "License
Holder"), whether as a permitted assignee of Midland or otherwise, or if such
License Holder becomes insolvent, or makes an assignment for the benefit of its
creditors or an arrangement pursuant to any bankruptcy law, or if such License
Holder discontinues its business or if a receiver is appointed for it or its
business, to the fullest extent permitted by law at the time of such occurrence,
the license hereby granted shall, at Midland USA's option, terminate forthwith.
In the event this License is so terminated, such License Holder, its receivers,
representatives, trustees, agents, administrators, successors, and/or assigns
shall have no right to sell, exploit, or in any way deal with or in any Licensed
Product.
15. ASSIGNMENT AND SUBLICENSE.
(a) This Agreement may not be assigned or transferred
by Midland (by reason of a corporate merger, insolvency
proceedings or otherwise) without the prior written consent of
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Midland USA, except that this Agreement shall be freely assignable by Midland or
its assigns to SCL, Inc. or Xxxxxxxx Capital Limited without the consent of
Midland USA, provided, and so long as SCL, Inc. of Xxxxxxxx Capital Limited, as
the case may be, agrees to be bound by all terms and provisions of this
Agreement. Midland shall promptly notify Midland USA of such transfer.
(b) Midland shall have the power to appoint one or several
distributor(s) or sublicensee(s) to promote, manufacture, sell, service or
distribute the Trademark Products solely in the Territory, provided that such
distributor(s) or sublicensee(s) agrees to abide and be bound by all terms and
provisions of this Agreement and provided, further, that any breach or failure
to remedy a breach of any such distributor or sublicensee shall be deemed a
breach or failure to remedy a breach by Midland. Any attempted sublicense or
assignment not permitted hereunder shall be null and void.
(c) Midland USA may assign and license or otherwise transfer
the Trademark to any Person without the consent of Midland, provided that such
Person agrees to abide and be bound by all terms and provisions of this
Agreement. Midland USA shall promptly notify Midland of any such transfer.
(d) Subject to the terms of this Section 15, this Agreement
shall be binding upon and shall inure to the benefit of the legal
representatives, successors and assigns of the parties hereto. No assignment of
this Agreement, nor any sale, assignment or transfer pursuant to this Section
15, shall release the assignor from any of its duties, obligations or
liabilities under this Agreement unless the other party shall consent to such
release in writing.
(e) RESERVATION OF RIGHTS. No rights or licenses, express or
implied, other than those granted in Section 2 and Section 15, are granted by
this Agreement to Midland under any intellectual property owned or controlled by
Midland USA.
16. OWNERSHIP OF TRADEMARK.
(a) Because Midland USA is the owner of the Trademark, any and
all rights, title or interest in, to or under the Trademark or any composite
xxxx formed with the Trademark which may accrue to the benefit of, or be
acquired by, Midland in the Territory as a result of its exercise of the rights
and license granted pursuant hereto will be assigned to and inure to the sole
benefit of Midland USA.
(b) Midland will not assert any claim of ownership of, or any
claim to the Trademark or any goodwill associated with the Trademark or any
future trademark or composite xxxx formed with the Trademark or good will
developed by Midland USA by reason of Midland's licensed use thereof or
otherwise. Midland further
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agrees not to register in the Territory any name or trademark confusingly
similar to the Trademark. Midland shall at all times during and after the term
of this Agreement recognize the validity of the Trademark and the ownership
thereof by Midland USA, and shall not at any time challenge, either directly or
indirectly, the validity of the Trademark, whether in or outside the Territory
and in or without connection with LMR Products.
17. SPECIFIC PERFORMANCE. Midland and Midland USA acknowledge and agree
that any breach by the other party of the foregoing provisions may cause the
injured party irreparable injury for which there is no adequate remedy of law.
Therefore, Midland and Midland USA expressly agree that Midland USA or Midland
shall be entitled, as the case may be, in addition to any remedy available at
law, to injunctive or other equitable relief to require specific performance or
prevent a breach of the foregoing provisions.
18. SEVERABILITY. If any term, covenant, condition or provision of this
Agreement, or the application thereof to any Person or circumstances shall, to
any extent, be invalid or unenforceable, the remainder of this Agreement or
application of such term or provision to a Person or circumstances other than
those to which it is held invalid or unenforceable, shall not be affected
thereby and each term, covenant, condition or provision of this Agreement shall
be valid and be enforced to the fullest extent permitted by law.
19. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties hereto and supersedes all prior contracts,
agreements, arrangements, communications, discussions, representations, and
warranties, whether oral or written, among the parties with respect to the
subject matter hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
[Signatures commence on next page.]
152
{Signature page for License Agreement entered into as of September 19, 1996}
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized representatives.
MIDLAND USA, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: President
MIDLAND INTERNATIONAL CORPORATION
By: /s/ Xxxxx X'Xxxx
---------------------------------
Name: Xxxxx X'Xxxx
Title: Secretary
000
XXXXXXX X
---------
XXXXXXXXXX XX XXXXXX XXXXXX TRADEMARK RIGHTS
--------------------------------------------
WHEREAS, Midland International Corporation, a corporation duly
organized and existing under the laws of the State of Delaware ("Assignor"), is
the sole and exclusive owner of the United States trademarks identified in the
registrations listed on Exhibit A attached hereto; and
WHEREAS, Midland USA, a corporation duly organized and
existing under the laws of the State of Delaware ("Assignee"), wishes to acquire
all of Assignor's right, title, and interest to the United States trademarks
identified in the registrations listed on Exhibit A and the marks covered
thereby;
NOW THEREFORE, for good and valuable consideration, receipt of
which is hereby acknowledged, Assignor does hereby sell, convey, assign,
transfer and deliver as sole legal and beneficial owner to Assignee, for its use
and the use of its successors, assigns and legal representatives, all of
Assignor's right, title and interest in and to the United States trademarks and
registrations listed in Exhibit A attached hereto and made a part hereof,
together with any and all additions, divisions and/or extensions thereof, and
including all common law rights and the goodwill of the business associated
therewith, for the full term or terms of all such rights, together with the
right to xxx and recover all claims for damages for the past infringement
thereof, for its own use and for the use of its successors, assigns and legal
representatives.
IN WITNESS WHEREOF, each of the parties hereto have caused
this ASSIGNMENT OF UNITED STATES TRADEMARK RIGHTS to be executed on its behalf
as of the 20th day of September, 1996.
MIDLAND INTERNATIONAL CORPORATION
(Assignor)
/s/ Xxxxx X'Xxxx
------------------------------------
NAME: Xxxxx X'Xxxx
TITLE: Secretary
MIDLAND USA, INC.
(Assignee)
/s/ Xxxxx Xxxxxxx
------------------------------------
NAME: Xxxxx Xxxxxxx
TITLE: President
154
EXHIBIT A
---------
UNITED STATES TRADEMARKS
------------------------
TRADEMARK REGISTRATION NO. REGISTERED
--------- ---------------- ----------
Midland 927193 January 18, 1972,
renewed January 18, 1992
Midland 895483 July 28, 1970,
renewed November 8, 1990
