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CONFIDENTIAL TREATMENT REQUESTED BY BEARCOM GROUP, INC.
OMITTED PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SEC.
EXHIBIT 10.16
October 15, 1997
Xx. Xxxxxx X. Xxxxx
Xx. Xxxxxx X. Xxxxx
Tomba Communications, L.L.C.
000 Xxxxxxxxx Xxxx.
X.X. Xxx 00
Xxxxxxx, XX 00000
Re: Tomba Communications, L.L.C.
Gentlemen:
The purpose of this letter agreement (this "Agreement") is to set
forth the terms and conditions agreed to by and among BearCom Operating, L.P.,
a Texas limited partnership ("Purchaser"), Tomba Communications, L.L.C., a
Louisiana limited liability company (the "Company"), Xxxxxx X. Xxxxx and Xxxxxx
X. Xxxxx (Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxx are sometimes collectively
referred to herein as the "Sellers") for Purchaser's purchase of certain assets
of the Company. For good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Sale of Assets; Purchase Price.
(a) Subject to the terms and conditions hereinafter set
forth, at the Closing (hereinafter defined), Purchaser will purchase
and the Company will sell, convey and assign, free and clear of all
liens, claims and encumbrances, all of the assets owned by the Company
as of the Closing Date (hereinafter defined) other than cash,
including, but not limited to, all of the real property, fixed assets,
inventory, rental two-way radios, accounts receivable, accrued coop
receivables, intangible assets, customer data and related information,
permits, computers, the contracts set forth on Exhibit A hereto (the
"Assumed Contracts"), records, leasehold improvements, fixtures, and
the phone and fax numbers of the Company (collectively, the "Assets").
(b) The purchase price for the Assets (the "Purchase
Price") shall be [Confidential Treatment Requested with SEC] and
shall be payable by delivery at the Closing of Purchaser checks or
wire transfers of the Purchase Price.
(c) Taxes for the current year relating to any of the
Assets (including the Real Property (hereinafter defined)) shall be
prorated through the Closing Date. An estimated adjustment shall be
made at the Closing. Once actual amounts are known (including when
the taxes are actually assessed on the Real Property), the Company and
the Sellers, on the one hand, and/or the Purchaser shall pay the other
any amounts due to correctly reflect the intent of parties reflected
in the proration provisions set forth herein.
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2. Liabilities Not Assumed.
(a) Purchaser will not assume or be liable for any
liabilities or obligations of the Company other than the liabilities
described on Exhibit B hereto (the "Assumed Liabilities"), and the
Company and the Sellers will, jointly and severally, indemnify
Purchaser against and hold it harmless from all such liabilities and
obligations other than the Assumed Liabilities.
(b) The liabilities and obligations of the Company that
Purchaser will not assume include, but are not limited to, all
liabilities or obligations that relate to the period, or conditions
existing, before the Closing, including any liabilities of the Company
to either Seller or any other person or entity controlled by,
controlling or under common control with any of them, trade payables
and other accounts payable not set forth on Exhibit B hereto incurred
in the ordinary course of business not to exceed $140,000, bank debt
or other debts for borrowed money, pension, and other employee benefit
plan liabilities (including any accruals relating thereto), breaches
or violations of agreements to which the Company or the Assets are
subject, violations of law or applicable statutory regulations,
property damage, personal injury, negligence, sexual abuse or
harassment or employee claims based on events occurring prior to the
Closing Date, any obligations of the Company to pay employees for
accrued but not taken vacations, liabilities or obligations to
remediate or cleanup any contamination or pollution of the air, soil
or other environmental conditions occurring or existing prior to the
Closing Date, or any contingent liabilities (whether or not known).
3. Representations and Warranties. The Company and the Sellers
jointly and severally represent and warrant to Purchaser that the following are
true and correct as of the date hereof in all material respects except as set
forth in the Schedules hereto and that the following will be true and correct
as of the Closing Date:
(a) The Company is a limited liability company duly
organized, validly existing and in good standing under the laws of the
State of Louisiana with all requisite power and authority to carry on
the business in which it is now engaged, to own and lease the
properties it now owns and leases, and to execute and deliver this
Agreement and perform its obligations hereunder. The Company is
qualified to do business as a foreign limited liability company in the
State of Texas. The Company is not required to be qualified to
conduct business in any jurisdiction other than the States of
Louisiana and Texas. The Company does not have any subsidiaries or
any equity or other ownership interest in any corporation, partnership
or other entity.
(b) The Sellers are the sole record and beneficial owners
of all of the outstanding interests of the Company.
(c) Set forth on Schedule 3(c) is a true and correct list
of assets used by the Company including fixed assets, inventory and
rental two-way radios. The Company holds good and indefeasible title
to all of such assets, free and clear of all liens, claims and
encumbrances other than the liens described on Schedule 3(c). The
Assets purchased by Purchaser at the Closing will include all of the
assets listed on Schedule 3(c) (other than inventory sold in the
ordinary course of business since the date of that Schedule on a basis
consistent with prior practices) plus inventory purchased
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since the date of that Schedule (which will have a value of at least
as much as the inventory sold by the Company between the date of that
Schedule and Closing). At the Closing, Purchaser will acquire all of
the assets, property and goodwill of every kind and character used by
the Company, free and clear of all liens, claims and encumbrances.
The Assets are all of the assets which are necessary for Purchaser to
operate the business of the Company in the manner the Company has been
operating it.
(d) The Company has the power and authority to transfer
the Assets without the consent of any other person. The Sellers have
the sole right to vote or direct the voting of the interests in the
Company, at their discretion, on any matter submitted to a vote of
members of the Company.
(e) The Company owns all of the assets reflected in the
August 31, 1997 balance sheet of the Company previously delivered by
the Company to Purchaser, along with property acquired by the Company
since August 31, 1997. The inventory amounts on the August 31, 1997
balance sheets reflect the cost of such inventory. The assets owned
and leased by the Company constitute all of the assets, property and
goodwill of every kind and character used in the business of the
Company. The Company has an owners' title insurance policy with
respect to each tract of real property owned by it ("Real Property")
and has provided true and correct copies thereof to Purchaser.
(f) The Sellers have furnished to Purchaser the compiled
balance sheet and related statements of income and cash flows of the
Company at and for the year ending December 31, 1996 and the
internally-generated balance sheet and related statements of income of
the Company at and for the period ending August 31, 1997
(collectively, "Financial Statements"). To the best knowledge of the
Company and the Sellers, the Financial Statements fairly present the
financial condition and results of operations of the Company as of the
dates and for the periods indicated and, to the best knowledge of the
Company and the Sellers, have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis with prior practices. To the best knowledge of the
Company and the Sellers, there were not any significant items of
revenue or expense which were unusual or of a nonrecurring nature
reflected in the Financial Statements. To the best knowledge of the
Company and the Sellers, except for those liabilities and obligations
incurred in the ordinary course of business consistent with prior
practices since the date of the Financial Statements, none of which
are material, the Financial Statements reflect all liabilities and
obligations of the Company, accrued, contingent or otherwise (known or
unknown and asserted or unasserted), arising out of transactions
effected or events occurring on or prior to the Closing Date. To the
best knowledge of the Company and the Sellers, all allowances and
reserves shown in the Financial Statements are appropriate, reasonable
and sufficient to provide for expenses and losses thereby contemplated
including the reserve for all taxes payable.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and each Seller and is a valid and binding
agreement of each of them, enforceable against each of them in
accordance with its terms.
(h) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated herein violates,
breaches, conflicts with or constitutes a default under, or permits
the termination or the acceleration of maturity of, or results in the
imposition of any lien, claim or encumbrance upon any property or
asset of the Company pursuant to, the organizational
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documents of the Company or any law, agreement, mortgage or other
instrument or provision of law to which or under which any of the
Company or either Seller is a party or bound.
(i) Except for the consents set forth on Schedule 3(i)
hereto, no consents or approvals are required for execution of this
Agreement by the Company or either Seller or their consummation of the
transactions contemplated herein.
(j) The Company and its business are, and have been, in
compliance with all applicable laws, rules, regulations, ordinances,
licenses, permits and orders. The only plans of the Company subject
to the Employee Retirement Income Security Act of 1974, as amended,
are its 401(k) Plan and its health insurance plan.
The Company purchased the Real Property on December
28, 1995. The Company has provided Purchaser with a true and correct
copy of an environmental audit report relating to the Real Property.
To the best knowledge of the Company and the Sellers, the location,
construction, occupancy, operation and use of all of the Real
Property, including the buildings, improvements, fixtures and
equipment forming a part thereof, do not violate, and the Company has
complied with, any applicable federal, state and local law, rule,
ordinance, regulation, judgment, order determination of any
governmental authority or any board of fire underwriters (or other
body exercising similar functions), or any restrictive covenant or
deed restriction (recorded or otherwise) affecting the Real Property,
including without limitation all applicable zoning ordinances and
building codes and laws, common laws, ordinances, regulations or
policies, as well as orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder relating to the
environment, health and safety and the use, handling, transportation,
production, disposal, discharge or storage of "hazardous substances"
(including, without limitation, any pollutant, toxic substance,
hazardous waste, compound, element or chemical that is defined as
hazardous, toxic, noxious or dangerous pursuant to such Applicable
Environmental Laws (as defined herein) or regulated in any manner
pursuant thereto) or to industrial hygiene or the environmental
conditions on, under or about the Real Property, including, without
limitation, soil, groundwater, and indoor and ambient air conditions
(collectively, "Applicable Environmental Laws").
Without limiting the generality of the foregoing
subsection, to the best knowledge of the Company and the Sellers no
claim has been asserted, and there are no unasserted claims (whether
or not the potential claimant may be aware of the claim) that might be
asserted against the Company or Purchaser, and there is no basis for
any claims, arising out of the handling, treatment, storage,
transportation, disposal (or the arranging therefor) or the discharge
into the environment of any hazardous or toxic substance, or hazardous
or solid waste, including any constituent thereof or other pollutant
or contaminant or the exposure of workers in the workplace to any
hazardous or toxic substance or contaminant, including, without
limitation, claims for penalties, natural resource damage, personal
injury, property damage or response or remedial costs, whether at
common law or under any law relating to such substance, including,
without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act and the Superfund Amendments and
Reauthorization Act, the Resource Conservation and Recovery Act, the
Federal Water Pollution Control Act, the Toxic Substance Control Act,
the Occupational Safety and Health Act ("OSHA") and applicable state
and local laws. To the best knowledge of the Company and the Sellers,
none of Sellers nor the Company have obtained or are required to
obtain, and none of Sellers nor the Company knows of any reason
Purchaser will be required to obtain, any permits, licenses or similar
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authorizations to construct, occupy, operate or use any buildings,
improvements, fixtures or equipment forming a part of the Real
Property by reason of any Applicable Environmental Laws.
To the best knowledge of the Company and the Sellers,
no underground storage tanks for petroleum or any other substance, or
underground piping or conduits associated with such tanks, are or have
previously been located on the Real Property. To the best knowledge
of the Company and the Sellers, no asbestos-containing materials or
PCB-containing materials were installed or are present on the Real
Property. To the best knowledge of the Company and the Sellers, none
of Sellers nor the Company has ever been refused insurance coverage,
nor has insurance coverage ever been cancelled, as a result of the
presence of pollutants or contaminants, including, but not limited to,
hazardous waste, solid waste or hazardous substances, on the Real
Property. To the best knowledge of the Company and the Sellers, there
are no activities on the Real Property, including but not limited to
the disposal of industrial waste, that would currently require deed
recordation by the Company now or at any future date. To the best
knowledge of the Company and the Sellers, there are no active or
inactive solid waste management units or hazardous waste management
units on the Real Property. To the best knowledge of the Company and
the Sellers, there has been no past or present spill, discharge or
other release of hydrocarbons or hazardous or toxic substances onto or
from the Real Property. To the best knowledge of the Company and the
Sellers, Sellers and the Company have taken all steps necessary to
determine and have determined that no hazardous or toxic substances,
hazardous or solid wastes are present or have at any time been
disposed of or otherwise released on or to the Real Property. To the
best knowledge of the Company and the Sellers, no building materials
used to construct improvements upon the Real Property contain any
toxic or hazardous substances, or hazardous or solid wastes,
including, but not limited to, asbestos, PCBs, formaldehyde, chlordane
or heptachlor. To the best knowledge of the Company and the Sellers,
there are no company plans or documents, whether or not government
approved, including, but not limited to, contingency plans, closure
and post-closure plans which impose environmental obligations on
Sellers or the Company or against the Real Property. To the best
knowledge of the Company and the Sellers, there are no requirements,
whether by regulation, agreement or otherwise, imposing financial
obligations with respect to environmental conditions or activities.
To the best knowledge of the Company and the Sellers, there are no
environmental liens or security interests against the Real Property
nor are there any environmental liens or actions pending which would
result in the creation of any lien relating to environmental
conditions of the Real Property.
To the best knowledge of the Company and the Sellers,
Sellers and the Company have provided Purchaser with all environmental
studies and reports in their possession or control conducted by
independent contractors, environmental records of Sellers or the
Company, and correspondence with any governmental entities concerning
environmental conditions of the Real Property, or which identify
underground tanks, or otherwise relate to contamination of the soil or
groundwater.
(k) The Company has provided Purchaser with access to,
and will at Closing provide originals of, true, correct, and current
copies of the Assumed Contracts. To the best knowledge of the Company
and the Sellers, all of the Assumed Contracts are in full force and
effect. To the best knowledge of the Company and the Sellers, neither
party to any Assumed Contract is in default under any of such Assumed
Contract, and no event has occurred that would, with the passage of
time, cause a default under any of such Assumed Contracts. To the
best knowledge of the Company
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and the Sellers, the Company has paid the other party to each such
Assumed Contract all amounts it owes them. The Company is not subject
to any non-competition or other agreement that would restrict its
ability to engage in any business.
(l) The Company has provided to Purchaser access to, and
will at Closing provide originals of, true and correct copies of all
of the personnel records of the Company. To the best knowledge of the
Company and Sellers, the Company has not granted or become obligated
to grant any increases in the wages or salary of, or paid or become
obligated to pay any bonus or made or become obligated to make any
similar payment to or grant any benefit to or on behalf of, any
officer, employee or agent. To the best knowledge of the Company and
Sellers, the Company does not have any direct or indirect, express or
implied, obligation to pay severance or termination pay to any officer
or employee of the Company or to pay any amounts to any consultant,
agent or similar person or entity. None of the Company or either
Seller has any knowledge of any facts which would indicate that any
employee of the Company would not accept an offer of employment from
Purchaser if such offer is tendered on a basis no less favorable than
that upon which such employee is currently employed by the Company.
The Company is not a party to any collective bargaining agreement or
the subject of any union organization effort, and there are not any
pending or threatened strikes, labor disputes, slow downs or stoppages
pending or threatened against the Company.
(m) To the best knowledge of the Company and the Sellers,
(i) all of the fixed assets (including but not limited to all
equipment), owned or leased by the Company are in condition to
sufficiently operate the business, and are fit for their intended use
in the ordinary course of business, and conform in all respects with
all applicable ordinances, regulations and other laws and there are no
known latent defects therein, (ii) all regular maintenance or service
requirements, and product recalls, have been followed, installed, or
otherwise implemented on and with respect to the Assets, (iii) all
inventory of the Company is in good, standard, and merchantable
condition and is not defective, and (iv) the inventory of the Company
is properly recorded on the Financial Statements at cost (last
in-first out) in accordance with GAAP.
(n) To the best knowledge of the Company and Sellers, set
forth in Schedule 3(n) hereto is a complete and accurate list and
descriptions of all accounts receivable of the Company's business from
sales made as of September 30, 1997, and the payments and rights to
receive payments related thereto. The Company has good and
indefeasible title to the accounts receivable it is selling to
Purchaser, free and clear of any security interests, liens,
encumbrances, or other charges; to the best knowledge of the Company
and the Sellers, none of such accounts receivable are subject to any
offsets or claims of offsets; and to the best knowledge of the Company
and the Sellers, none of the obligors of the accounts receivable have
given notice that they will or may refuse to pay the full amount
thereof or any portion thereof.
(o) None of the Company or either Seller knows or has any
reason to believe, or has received notice or information, that any
major supplier or major customer of the Company or any other party
that does business with the Company will cease or refuse to do
business with Purchaser after the consummation of the transactions
contemplated hereby in the same manner, and same amount, as previously
conducted with the Company. None of the Company or either Seller has
received any notice of any disruption (including delayed deliveries or
allocations by suppliers or service providers) in the availability of
the products used by the Company, nor are any of Company
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or either Seller aware of any facts which could lead the Company to
believe that Purchaser will be subject to any such material
disruption. None of the Company or either Seller is aware of any
condition (financial or otherwise) affecting any major supplier or any
other party that does business with the Company that will, or could be
reasonably expected to, now or in the future, reduce each such party's
ability to do business with Purchaser in substantially the same manner
and amount that each such party has done business with the Company
during the period preceding this Agreement. Set forth in Schedule
3(o) are complete and accurate lists of the customers that constituted
5% or more of the revenues of the Company for the twelve-month period
ended August 31, 1997.
(p) To the best knowledge of the Company and Sellers, all
information furnished to Purchaser by any of Company or either Seller,
whether or not herein or in any Exhibit or Schedule hereto, is true,
correct, and complete. To the best knowledge of the Company and
Sellers, such information states all material facts required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which such statements are made, true,
correct and complete in all material respects. The Company and the
Sellers have made due inquiry and investigation concerning the matters
to which representations and warranties made by them under this
Agreement pertain and the Company and the Sellers are unaware of any
facts, events or circumstances which have not been disclosed to
Purchaser which are material to the financial condition, results of
operations, business or prospects of Company.
The representations, warranties and covenants of the Company and the Sellers
set forth in this Agreement shall survive execution and delivery of this
Agreement and the Closing.
4. Closing. The closing of the transactions contemplated hereby
(the "Closing") will take place at 10:00 a.m., local time, on October 15, 1997
at the offices of the Company (or such other date, time and/or place as may be
mutually agreed upon by the parties hereto). The day on which the Closing
occurs is herein referred to as the "Closing Date."
At the Closing, (a) the Company shall deliver to Purchaser a General
Warranty Deed and Xxxx of Sale in forms satisfactory to Purchaser and such
other documents and instruments as Purchaser shall reasonably request
sufficient to vest title to such Assets in Purchaser, free and clear of all
liens, claims and encumbrances, (b) the Company and Purchaser will execute and
deliver an Assignment and Assumption Agreement pursuant to which the Company
would assign all of its right, title and interest in the Assumed Contracts to
Purchaser, and Purchaser would assume the Assumed Liabilities and all
liabilities under the Assumed Contracts that arise after the Closing Date (and
the Purchaser would agree to indemnify the Company and hold it harmless from
such Assumed Liabilities and such liabilities under the Assumed Contracts), and
(c) the Company shall provide Purchaser with an owner's title insurance policy
with respect to the Real Property (the cost of which shall be split between the
Company and Purchaser) and such other items reasonably requested by Purchaser
relating to the transfer of the Real Property.
5. Covenants.
(a) The Company and the Sellers, jointly and severally,
covenant and agree that from the date hereof until the Closing, except
as otherwise permitted or contemplated by this Agreement or with the
written consent of Purchaser, the Company shall not take any other
action that would cause or permit the representations and warranties
of the Company and the Sellers made in this Agreement to be inaccurate
at the time or Closing or preclude any of the Company and the Sellers
from making such representations and warranties at and as of the time
of the Closing.
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(b) At or promptly after the Closing, the Company shall
notify (in form satisfactory to Purchaser) all of the obligors of
accounts receivable that are payable to the Company that such obligors
should pay such receivables to Purchaser at the address specified by
Purchaser. If, nonetheless, the Company receives payments for any
such receivables, it will promptly endorse the checks to the order of
Purchaser and promptly deliver such checks to Purchaser. If, however,
the Company so receives payment for a receivable at a time in which
the Purchaser is delinquent in paying a payable that it has assumed
from the Company and is required to pay (and does not have a valid
defense or other valid reason not to pay), the Company, upon 14 days'
written notice to Purchaser, shall have the right to cash such check
and pay such payable (and to the extent there is money remaining after
payment of such payable, the Company shall deliver such funds to
Purchaser).
(c) The Purchaser shall cooperate with the Company's
efforts in seeking to have the Company and Sellers released from
liability on the Assumed Liabilities, and the Purchaser agrees to
provide such information to the payees of such payables as such payees
shall reasonably request in connection with releasing the Company and
Sellers from such liability.
6. Conditions Precedent to Obligations of Purchaser. The
obligations of Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction on or before the Closing Date of
each of the following conditions:
(a) The Company and the Sellers shall have executed and
delivered to Purchaser each document and instrument (including the
title insurance policy) required to be executed and delivered by any
of them pursuant to this Agreement, and shall have, or shall have
caused to be, satisfied or complied with and performed in all respects
all terms, covenants and conditions of this Agreement to be complied
with or performed by any of them on or before the Closing Date.
(b) All of the representations and warranties made by the
Company and the Sellers in this Agreement shall be true and correct in
all respects as of the date thereof and at the Closing Date with the
same force and effect as if such representations and warranties had
been made at and as of, the Closing Date.
(c) Purchaser shall have completed its due diligence
investigation of the Company, its businesses and operations, and be
satisfied, in its sole discretion, with the results thereof.
(d) Counsel to the Company and the Sellers shall have
delivered to Purchaser a legal opinion dated the Closing Date in form
reasonably acceptable to Purchaser opining to the matters set forth in
Exhibit C hereto.
(e) The Company's accounting firm shall have delivered a
letter dated the Closing Date and addressed to Purchaser stating that
to its knowledge that there are no pending audits or investigations
involving the Company and that it has no reason to believe that the
Financial Statements at and for the year ending December 31, 1996 do
not fairly present the financial condition and operating results of
the Company at and for the periods set forth therein.
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(f) The Company and the Sellers shall have delivered
evidence of receipt of all required approvals, consents, licenses and
permits to the transactions contemplated herein in a form acceptable
to the Purchaser in its sole discretion.
(g) The Company and the Sellers shall have delivered
estoppel letters from such persons as Purchaser shall request in a
form acceptable to Purchaser in its sole discretion.
(h) All amounts due pursuant to the loan agreement
described on Schedule 6(h) hereto shall be paid in full, all liens
securing such amounts shall be released, and evidence satisfactory to
Purchaser of the same shall be delivered to Purchaser.
(i) The Company and the Sellers shall have executed and
delivered such other documents as are reasonably requested by
Purchaser to effectuate the purposes and intent of this Agreement.
If Purchaser's conditions are not satisfied by October 31, 1997,
Purchaser shall have the right to terminate this Agreement and any obligations
it has hereunder. If Purchaser's conditions are not satisfied by October 31,
1997 through no fault of the Company, the Company shall have the right to
terminate this Agreement and any obligations it has hereunder.
7. Purchase Price Allocation. The parties hereto hereby agree
that, for all accounting and foreign, federal, state and local tax reporting
purposes, the Purchase Price shall be allocated in accordance with the relative
fair market values of the Assets and the covenants set forth in Section 9
hereof, as determined by Purchaser, as soon as practicable after the Closing
Date. Purchaser shall provide to the Company and the Sellers a schedule
setting forth such allocation as soon as practicable after the Closing Date,
and shall thereafter notify the Company and the Sellers of any changes thereto.
Each of the parties hereto hereby covenants and agrees that it will not take a
position on any tax return, before any governmental agency charged with the
collection of any tax, or in any judicial proceeding that is in any way
inconsistent with the terms of this Section 7.
8. Confidentiality. The Company and the Sellers agree to hold in
confidence the terms of this Agreement and, except as required by law, will not
make the same available or known to any third party other than their counsel,
accountants and other agents or representatives acting on their behalf, and
then only to the extent necessary, provided each such person is advised of the
confidential nature of the terms hereof and agrees to hold the same in
confidence.
9. Noncompetition and Non-solicitation.
(a) Until three years after the Closing (the
"Noncompetition Period"), the Company and the Sellers agree that none
of them nor any of their affiliates will directly or indirectly either
as an individual, a partner or a joint venturer, or in any other
capacity, (i) invest (other than investments in publicly-owned
companies which constitute not more than 1% of the voting securities
of any such company), or engage in, within any place in the State of
Texas that is within 100 miles of Houston, Texas (the "Noncompetition
Area") (x) the business of selling, renting, or servicing any wireless
communication products or (y) any other business that is competitive
with that of Purchaser or its affiliates (the items listed under
clauses (x) and (y) hereto are collectively referred to herein as
"Competitive Businesses"), or (ii) accept employment with or render
services to Competitive
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Businesses that engage in such Competitive Business within the
Noncompetition Area as a director, officer, agent, employee,
consultant, or any other capacity. For purposes of this Agreement, a
"business that is competitive with that of Purchaser or its
affiliates" specifically includes persons, firms, sole
proprietorships, partnerships, companies, corporations or other
entities that market products and/or perform services in direct or
indirect competition with those marketed and/or performed by Purchaser
or its affiliates within the Noncompetition Area. The parties agree
that, if such non-competition agreement is determined by a court of
competent jurisdiction to be unenforceable, such agreement should be
reformed by the court to the extent necessary to be enforceable and to
give effect to the intent of this Section 9.
(b) Sellers have advised Purchaser that it has certain
customers through its Louisiana affiliate that, since on or prior to
January 1, 1996, have purchased two-way radios for offices of such
customers that may be in the Noncompetition Area . Schedule 9(b)
hereto sets forth such customers (sales to such customers are not
included in the Financial Statements of the Company). Purchaser
agrees that if Sellers sell two-way radios to its customers in
Louisiana that are set forth on Schedule 9(b) hereto, and such
customers provide such two-way radios to their offices located in the
Noncompetition Area, such sales shall not be considered to violate the
provisions set forth in this Section 9.
(c) During the Noncompetition Period, none of the Company
or either Seller will, directly or indirectly, (i) solicit for any
purpose, any customer or former customer of the Company, (ii) solicit
for employment by himself, itself, or anyone else, any employee of the
Company that Purchaser desires to hire after the Closing, Purchaser or
their affiliates or any person who was an employee of Purchaser or
their affiliates within the six-month period immediately preceding
such solicitation or employment, other than such person whose
employment was terminated by Purchaser or its affiliates and other
than Xxxx Xxxxxxxx if Xxxx Xxxxxxxx approaches the Sellers about a
position in Louisiana; or (iii) induce or attempt to induce, any such
employee of Purchaser or their affiliates to terminate such employee's
employment.
(d) The parties hereto acknowledge that the provisions of
this Section 9 are supported by good and valuable consideration and
Purchaser's agreement to consummate the transactions contemplated
hereby are conditioned upon its receipt of the protection provided in
this Section 9. The parties hereto further acknowledge that the scope
and duration of the covenants set forth in this Section 9 are in all
respects reasonable.
(e) The Company and the Sellers acknowledge and recognize
that the enforcement of any of the noncompetition provisions in this
Agreement by Purchaser will not interfere with the ability of any of
them to pursue a proper livelihood. Each of the Sellers further
represents that he is capable of pursuing a career that would not
violate the noncompetition provisions hereof to earn a proper
livelihood. The Company and the Sellers agree that due to the nature
of such business, the noncompetition restrictions set forth in this
Agreement are reasonable as to time and geographic area. At any time
during the non-compete period, if the Company reasonably suspects that
the Company or a Seller has violated one or more provisions of this
Section 9, Purchaser may require the Company and/or the Sellers to
supply such information as Purchaser may reasonably request to
ascertain whether or not the Company and/or the Sellers has complied
with, or have violated, the covenants set forth in this Section 9.
Any such request for information will be sent to the Company and/or
the Sellers by certified mail, return receipt requested, addressed to
such person's last known
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address. The Company and/or the Sellers shall furnish the requested
information to Purchaser within 10 days following the receipt of such
request.
10. Expenses. Purchaser, on the one hand, and the Company and the
Sellers, on the other hand, will bear their own costs and expenses of the
transactions contemplated hereby.
11. Further Assurances. At the Closing and after the Closing,
each party hereto shall take all actions and duly execute and deliver or cause
to be executed and delivered all instruments of sale, conveyance, transfer,
assignment or assumption, and all notices, releases, acquittances and other
documents that may be necessary or advisable to consummate the transactions
contemplated in this Agreement, or more fully to sell, convey, transfer,
assign, and deliver to and vest in Purchaser the Assets sold, conveyed,
transferred, assigned, and delivered pursuant hereto or intended so to be.
12. Indemnification. Each of the Company and the Sellers shall,
jointly and severally, indemnify and hold Purchaser and its affiliates and the
officers, directors, partners, stockholders, employees and agents of Purchaser
and its affiliates harmless from and against any loss, damage, claim, demand,
cause of action, liability, costs or expense (including without limitation
interest, penalties, and attorneys' fees and disbursements) of any kind or
nature whatsoever asserted against or incurred by Purchaser by reason of,
resulting from, or based upon: (a) any misrepresentation, breach of warranty or
breach or nonfulfillment of any covenant or other agreement made by any of them
herein or in any other agreement executed and delivered by any of them pursuant
to this Agreement, (b) any liability of the Company for failure to file any
federal, state or local income tax return, and any liability or obligation to
pay any federal, state or local taxes, relating to any tax period ending on or
prior to the Closing Date and any liability to pay interest or penalties upon
or with respect to any of the foregoing, (c) any obligation or liability
relating to any period prior to the Closing Date (i) relating to any employee
benefit plan of the Company or (ii) relating to any employee of the Company who
is not retained by the Company or hired by Purchaser after the Closing, (d) any
product liability or breach of warranty claims relating to products sold by the
Company, and all tort or general liability claims arising or relating to
occurrences from any nature relating to the business of the Company, before the
Closing, whether any or such claims or asserted before or after the Closing,
(e) operations of the Company prior to the Closing or conditions in existence
prior to the Closing that give rise to liability (other than Assumed
Liabilities) including, but not limited to, liabilities under any Applicable
Environmental Laws, and (f) any obligation or liability for any finders',
brokers' or agents' fee in connection with the transactions contemplated
hereby. Any claim for indemnification pursuant to any of clauses (a), (b),
(c), (d) or (f) of this Section 12 must be asserted against the Company or the
Sellers pursuant to a lawsuit filed on or before the date that is two years
after the Closing (such filing shall be sufficient to preserve Purchaser's
indemnification rights even if the amount of damages is not known until after
such date).
13. Use of Tomba Name. Purchaser shall be permitted to use the
Tomba and Tomba Communications names in connection with the Assets purchased by
Purchaser for a period of 120 days after the Closing.
14. Entire Agreement; Counterparts. This Agreement constitutes
the entire agreement among the parties pertaining to the subject matter hereof
and supersedes all other prior or contemporaneous agreements and
understandings, both oral and written, of the parties in connection therewith.
This Agreement may be executed in counterparts.
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15. Severability. The parties hereto intend all provisions of
this Agreement including the provisions set forth in Section 9 hereof to be
enforced to the fullest extent permitted by law. Accordingly, should a court
of competent jurisdiction determine that the scope of any provision herein is
too broad to be enforced as written, the parties intend that the court reform
the provision to such narrower scope as it determines to be reasonable and
enforceable. In addition, however, the Company and the Sellers agree that the
noncompetition agreements, nonemployment agreements and nonsolicitation
agreements set forth above each constitute separate agreements independently
supported by good and adequate consideration and shall be severable from the
other provisions of, and shall survive, this Agreement. If any provision of
this Agreement is held to be illegal, invalid or unenforceable under present or
future laws effective during the term hereof, such provision shall be fully
severable and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision never comprised a part of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
16. Amendments. This Agreement may be amended or modified only by
a written instrument signed by all the parties hereto.
17. Governing Law; Venue. This Agreement shall be governed and
construed in accordance with the laws of the State of Texas, without regard to
the conflicts of laws principles thereof. Venue for any disputes regarding
this Agreement, the transactions contemplated hereby or the liabilities or
obligations imposed hereunder shall be in federal or state court in Xxxxxx
County, Texas.
18. Notices. Any notices, consents, demands, requests, approvals
and other communications to be given under this Agreement by any party to
another shall be deemed to have been duly given if given in writing and
personally delivered or sent by mail, registered or certified, postage prepaid
with return receipt requested, as follows:
If to the Purchaser: BearCom Operating, L.P.
00000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attn: Chairman
If to the Company
or Sellers: the applicable address as
set forth on page one
Notices delivered personally shall be deemed communicated as of actual receipt;
mailed notices shall be deemed communicated as of three days after mailing.
Any party may change its, his or her address by written notice given to the
other parties in the manner set forth herein.
19. Employees. Based on the information relating to the employees
of the Company provided to Purchaser by the Company and the Sellers, to the
best of Purchaser's knowledge, Purchaser intends to seek to hire all of the
employees of the Company.
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If you agree to the terms of this Agreement, please so indicate by
signing this letter or a counterpart in the spaces provided below and returning
it to the undersigned as soon as practicable.
Very truly yours,
BEARCOM OPERATING, L.P.
By: Page-Com GP, Inc.
By: /s/ XXXX X. XXXXXX
---------------------------------
Xxxx X. Xxxxxx, President
Duly Executed, Agreed and Accepted:
/s/ XXXXXX X. XXXXX
-----------------------------------
Xxxxxx X. Xxxxx
/s/ XXXXXX X. XXXXX
-----------------------------------
Xxxxxx X. Xxxxx
TOMBA COMMUNICATIONS, L.L.C.
By: /s/ XXXXXX X. XXXXX
-----------------------------------
Xxxxxx X. Xxxxx, Manager
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