1
Exhibit 10.24
ASSET PURCHASE AGREEMENT
BY AND AMONG
LET'S TALK CELLULAR & WIRELESS, INC.
AND
CELLULAR UNLIMITED CORP.
AND
XXXXX X. XXXXXXXX
RELATING TO THE
ACQUISITION OF
CELLULAR UNLIMITED CORP.
DATED AS OF OCTOBER 31, 1997
2
TABLE OF CONTENTS
PAGE
PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES.......................................................................1
1.1 Purchase of Assets...................................................................................1
1.2 Excluded Assets......................................................................................1
1.3 Assumption of Liabilities............................................................................1
1.4 Excluded Liabilities.................................................................................1
CLOSING MATTERS.....................................................................................................1
2.1 Purchase Price.......................................................................................1
2.2 Closing..............................................................................................2
2.3 Purchase Price Adjustments...........................................................................3
2.5 Dispute Resolution...................................................................................4
REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES...................................................................4
3.1 Due Organization.....................................................................................4
3.2 Due Authorization....................................................................................4
3.3 No Violation.........................................................................................5
3.4 Carrier Agreements...................................................................................5
3.5 Pager Agreements.....................................................................................5
3.6 Carrier Commission Reports and Paging Reports........................................................6
3.7 Financial and Operating Information..................................................................6
3.8 Financial Statements.................................................................................7
3.9 Assumed Liabilities; Absence of Undisclosed Liabilities..............................................8
3.10 Title to Purchased Assets............................................................................8
3.11 Absence of Certain Changes or Events.................................................................8
3.12 Condition of Purchased Assets........................................................................8
3.13 Patents, Trademarks, Etc.............................................................................9
3.14 Litigation...........................................................................................9
3.15 Compliance with Law..................................................................................9
3.16 Brokerage............................................................................................9
3.17 Leases...............................................................................................9
3.18 Disclosure..........................................................................................10
3.19 Cellular Activations................................................................................10
3.20 Pagers..............................................................................................10
REPRESENTATIONS AND WARRANTIES OF LTC..............................................................................10
4.1 Due Organization....................................................................................10
4.2 Due Authorization...................................................................................10
4.3 No Violation........................................................................................11
4.4 Brokerage...........................................................................................11
4.5 Litigation..........................................................................................11
i
3
COVENANTS OF THE SELLING PARTIES...................................................................................11
5.1 Regular Course of Business..........................................................................11
5.2 Full Access and Disclosure..........................................................................12
5.3 Breach of Agreement.................................................................................12
5.4 Fulfillment of Conditions Precedent.................................................................12
5.5 Pre Closing Actions.................................................................................12
5.6 Bulk Sales..........................................................................................14
OTHER AGREEMENTS...................................................................................................15
6.1 LTC to Make Records Available.......................................................................15
6.2 Tax Allocation......................................................................................15
6.3 Employment Matters..................................................................................15
6.4 Non-Competition.....................................................................................15
6.5 Confidential Documents..............................................................................17
6.6 Claims of Shareholder...............................................................................17
6.7 Agreement to Defend.................................................................................17
6.8 Further Assurances..................................................................................17
6.9 No Solicitation or Negotiation......................................................................17
6.10 No Termination of Seller's Obligations by Subsequent Incapacity, Dissolution, Etc...................18
6.11 Deliveries After Closing............................................................................18
6.12 Schedules...........................................................................................18
CONDITIONS TO THE OBLIGATIONS OF LTC...............................................................................18
7.1 Representations and Warranties; Performance.........................................................18
7.2 No Material Adverse Change..........................................................................19
7.3 No Proceeding or Litigation.........................................................................19
7.4 Condition of Assets.................................................................................19
7.5 Physical Inventory..................................................................................19
7.6 Assignments.........................................................................................19
7.7 Xxxx of Sale........................................................................................20
7.8 Payoff Letters......................................................................................20
7.9 Employee Records....................................................................................20
7.10 Secretary's Certificate.............................................................................20
7.11 License Agreement...................................................................................20
7.12 Customer Activation Agreements......................................................................20
7.13 Customer Pager Agreements...........................................................................20
7.14 Employment Agreements...............................................................................20
7.15 Consents............................................................................................20
7.16 Estoppel Letters....................................................................................21
7.17 Indebtedness and other Obligations..................................................................21
7.18 Sublease............................................................................................21
7.19 Rentals, Taxes, Etc.................................................................................21
ii
4
CONDITIONS TO THE OBLIGATIONS OF THE SELLING PARTIES...............................................................21
8.1 Representations and Warranties; Performance.........................................................21
8.2 No Proceeding or Litigation.........................................................................22
8.3 Performance.........................................................................................22
8.4 Due Authorization...................................................................................22
8.5 Rentals, Taxes, Etc.................................................................................22
8.6 Execution of Documents..............................................................................22
8.7 Sublease............................................................................................22
TERMINATION AND ABANDONMENT........................................................................................22
9.1 Methods of Termination..............................................................................22
9.2 Procedure Upon Termination..........................................................................23
INDEMNIFICATION....................................................................................................23
10.1 Indemnification by the Shareholder..................................................................23
10.2 Indemnification by LTC..............................................................................24
10.3 Set Off.............................................................................................25
MISCELLANEOUS......................................................................................................25
11.1 Binding Effect and Assignment.......................................................................25
11.2 Survival............................................................................................25
11.3 Severability........................................................................................25
11.4 Entire Agreement....................................................................................25
11.5 Modification........................................................................................26
11.6 Waiver..............................................................................................26
11.7 Governing Law.......................................................................................26
11.8 Headings............................................................................................26
11.9 Counterparts........................................................................................26
11.10 Remedies............................................................................................26
11.11 Attorneys' Fees.....................................................................................26
11.12 Further Documents...................................................................................26
11.13 Notices.............................................................................................26
11.14 Expenses............................................................................................27
iii
5
SCHEDULES
Schedule 1.1 Purchased Assets
Schedule 1.2 Excluded Assets
Schedule 1.3 Assumed Liabilities
Schedule 1.4 Excluded Liabilities
Schedule 2.3 Calculation of Purchase Price Adjustment
Schedule 3.3(f) Approvals
Schedule 3.9 Liabilities
Schedule 3.10 Title Matters
Schedule 3.13 Patents, Trademarks, Etc.
Schedule 3.14 Litigation
Schedule 6.2 Allocation of Purchase Price
EXHIBITS
Exhibit 2.2(b)(ii) Form of Escrow Agreement
Exhibit 2.4 Form of Contingent Note
Exhibit 7.6(a) Form of Assignment of Carrier Agreement
Exhibit 7.6(b) Form of Assignment of Pager Agreement
Exhibit 7.6(c) Form of Assignment of Lease
Exhibit 7.6(d) Form of Assignment of Customer Activation Agreements
Exhibit 7.6(e) Form of Assignment of Customer Pager Agreements
Exhibit 7.6(f) Form of Assignment for other Agreements
Exhibit 7.7 Form of Xxxx of Sale
Exhibit 7.8 Form of Pay-Off Letter
Exhibit 7.11 Form of License Agreement
Exhibit 7.14 Form of Employment Agreement
Exhibit 7.16 Form of Estoppel Letter
iv
6
ASSET PURCHASE AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of October 31, 1997, is
entered into by and among Let's Talk Cellular & Wireless, Inc., a Florida
corporation having its principal offices at 000 Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxx, Xxxxxxx 00000 ("LTC"), Cellular Unlimited Corp., a New York corporation
having its principal offices at 000 Xxxxxx Xxxxx Xxxxx, Xxxxx 0X, Xxxxxxxxx, Xxx
Xxxx 00000 (the "SELLER"), and Xxxxx X. Xxxxxxxx (the "SHAREHOLDER"; and the
Shareholder and the Seller are collectively, the "SELLING PARTIES," and each
individually, a "SELLING PARTY").
ARTICLE 1
PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES
1.1 PURCHASE OF ASSETS. Subject to the terms and conditions set forth
in this Agreement, the Seller agrees to sell, assign and transfer to LTC, and
LTC agrees to purchase and acquire from the Seller, on the Closing Date, all of
the assets of the Seller, except for the Excluded Assets (collectively, the
"Purchased Assets"), including, without limitation, the assets of the Seller set
forth on Schedule 1.1 hereto.
1.2 EXCLUDED ASSETS. The assets of the Seller set forth on SCHEDULE
1.2 hereto shall not be transferred to LTC and are excluded from this Agreement,
including the assets of the Seller's wholly-owned subsidiary, Cellular Unlimited
USA, Inc., a Delaware corporation (the "SUBSIDIARY"), and two stores operated by
the Seller in Massachusetts (collectively, the "EXCLUDED ASSETS").
1.3 ASSUMPTION OF LIABILITIES. LTC agrees to assume and discharge
only the liabilities and obligations of the Seller set forth on SCHEDULE 1.3
hereto (collectively, the "ASSUMED LIABILITIES").
1.4 EXCLUDED LIABILITIES. All other liabilities of the Seller,
including, without limitation, the liabilities set forth on SCHEDULE 1.4 hereto
(the "EXCLUDED LIABILITIES"), shall not be assumed by LTC and shall be paid by
the Seller.
ARTICLE 2
CLOSING MATTERS
2.1 PURCHASE PRICE. In consideration for the conveyance of the
Purchased Assets and in reliance on the representations and warranties,
covenants and agreement of the Selling Parties contained herein, the schedules
hereto and the documents contemplated hereby, LTC shall pay to the Seller the
purchase price (the "Purchase Price") which shall consist of the following: (i)
$2,055,000 paid in cash at Closing, subject to the adjustments set forth in
Section 2.3, and (ii) a contingent promissory note delivered to the Seller at
Closing providing for up to $225,000 paid
7
on each of July 31, 1998, January 31, 1999 and July 31, 1999, in contingent
payments paid in accordance with Section 2.4 hereof.
2.2 CLOSING. Unless this Agreement shall have been terminated or
abandoned pursuant to the provisions of Article 9 hereof, a closing of the
transactions contemplated by this Agreement (the "CLOSING") shall be held on
November 15, 1997, or on such other date (the "CLOSING DATE") designated by LTC
upon five days notice to the Seller at such location as is mutually agreed upon
by the parties hereto, provided that the Closing shall not occur and this
Agreement shall automatically terminate, in any event after December 31, 1997
unless otherwise agreed to in writing by the Parties hereto. At the Closing, and
on the basis of the representations, warranties, covenants and agreements made
herein and in the schedules hereto and in the certificates and other instruments
delivered pursuant hereto, and subject to the terms and conditions hereof:
(a) TRANSFER OF PURCHASED ASSETS. On the Closing Date, the
Seller shall transfer, convey, sell, assign and deliver to LTC all of the
Seller's right, title and interest in the Purchased Assets by delivering to LTC
bills of sale, assignments, and documents of conveyance, each duly executed and
acknowledged by the Seller, and such other good and sufficient instruments of
transfer and conveyance as shall be effective to vest in LTC all of the Seller's
right, title and interest in the Purchased Assets.
(b) INITIAL CASH CONSIDERATION. On the Closing Date, LTC
shall make payment of the initial cash consideration of the Purchase Price as
follows:
(i) To the Seller, by wire transfer of immediately
available funds, the sum of (A) $1,855,000 PLUS OR MINUS (B)
the Purchase Price adjustments set forth in Section 2.3(a).
PLUS (C) the Interest Payment as set forth in Section 2.2(d).
(ii) To Key Bank, N.A. as escrow agent (the
"ESCROW AGENT"), pursuant to the terms of the Escrow
Agreement, in the form attached hereto as EXHIBIT 2.2(b)(ii)
(the "ESCROW AGREEMENT"), the sum of $200,000 (the "ESCROW
FUNDS"). As provided in the Escrow Agreement, the Escrow Funds
shall be utilized to fund (A) those Purchase Price adjustments
described in Section 2.3(b)(i) hereof and (B) any other
amounts owed by any Selling Party to LTC hereunder or under
any other agreement contemplated hereby, including, without
limitation, pursuant to Article 10 hereof. In the event that
the Escrow Funds are insufficient to fund the amounts set
forth in clauses (A) and (B) above, then the Seller shall
within 10 days of delivery of notice of such deficiency pay to
LTC the amount of such deficiency in immediately available
funds. Provided there is not pending any claim by LTC for
payment out of the Escrow Funds, (i) after the expiration of
90 days after the Closing Date, the parties shall execute
disbursement instructions to the Escrow Agent directing it to
distribute to the Seller an amount equal to $100,000 less the
aggregate amount of Escrow Funds disbursed to LTC during such
period, and (ii) upon the termination of the Escrow
2
8
Agreement, the parties shall execute disbursement
instructions to the Escrow Agent directing it to distribute to
the Seller the remaining Escrow Funds in accordance with the
Escrow Agreement.
(c) CONTINGENT NOTE. On the Closing Date, LTC shall deliver
to the Seller a contingent promissory note substantially in the form attached
hereto as EXHIBIT 2.4 (the "CONTINGENT NOTE") in the aggregate amount of up to
$675,000, paid in three installments on each of July 31, 1998, January 31, 1999
and July 31, 1999 in accordance with the provisions thereof.
(d) INTEREST PAYMENT. On the Closing Date, LTC shall pay to
the Seller pursuant to Section 2.2(b)(i) an amount equal to the interest
calculated at a rate of 10% per annum on the sum of $2,055,000, based on a three
hundred sixty-five (365) day year for the actual number of days elapsed from and
including November 1, 1997 through the Closing Date.
2.3 PURCHASE PRICE ADJUSTMENTS.
(a) PRE-CLOSING ADJUSTMENT. At least five days prior to the
Closing Date, the Seller shall prepare and deliver to LTC an estimated
calculation of the Company's Working Capital as set forth on Schedule 2.3 as of
October 31, 1997 (the "TARGET DATE"). If the estimated calculation of Working
Capital shows a Working Capital Shortfall as set forth on Schedule 2.3, then the
Purchase Price paid at Closing shall be reduced by the aggregate amount of such
Working Capital Shortfall.
(b) POST-CLOSING ADJUSTMENTS. As soon as practicable after
the Closing Date, LTC shall cause its accountants to prepare and deliver to the
Seller a calculation of the Working Capital as of the Target Date. The Seller
and LTC shall have the right to dispute the Working Capital calculation and make
any proposed adjustments thereto as provided in Section 2.4 hereto.
(i) If the calculation of Working Capital shows a
Working Capital Shortfall in excess of the estimated Working
Capital Shortfall, then the parties shall execute disbursement
instructions to the Escrow Agent directing it to distribute to
LTC from the Escrow Funds the amount of the excess Working
Capital Shortfall.
(ii) If the calculation of Working Capital shows a
Working Capital Shortfall less than the estimated Working
Capital Shortfall, then LTC shall within 10 days of delivery
of such notice pay to the Seller the difference in immediately
available funds.
(iii) If the calculation of Working Capital shows
a Working Capital Surplus as set forth on SCHEDULE 2.3, then
LTC shall within 10 days of delivery of such notice pay to the
Seller the amount of the Working Capital Surplus plus the
amount of any Working Capital Shortfall deducted from the
Purchase Price pursuant to Section 2.3(a).
3
9
All payments of rent, utilities, real estate taxes and other similar obligations
for the account of the Seller shall be prorated as of the Target Date, and the
Purchase Price shall be adjusted accordingly.
2.4 DISPUTE RESOLUTION. If the Selling Parties dispute the Working
Capital calculation or the contingent payment calculations, then LTC and the
Selling Parties shall use reasonable efforts to resolve their dispute, but if a
final resolution thereof is not obtained within ten (10) days after the Selling
Parties deliver to LTC a written notice of dispute, either LTC or the Selling
Parties may promptly retain a nationally recognized "big six" independent
accounting firm acceptable to both the Selling Parties and LTC (the "INDEPENDENT
Accountant") to resolve any remaining disputes. If the Independent Accountant is
retained, then the Independent Accountant shall, within thirty (30) days after
receiving the positions of both the Selling Parties and LTC and all
supplementary supporting documentation requested by the Independent Accountant,
render its decision, which decision shall be final and binding on, and
nonappealable by, the Selling Parties and LTC. The fees and expenses of the
Independent Accountant shall be paid by the party whose estimate of the Working
Capital and/or contingent payment is furthest from the Independent Accountant's
calculation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES
Each Selling Party hereby jointly and severally represents and warrants
to LTC as follows as of the date hereof and the Closing Date:
3.1 DUE ORGANIZATION. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York
with full corporate power and authority to carry on its business as it is now
being conducted, and to own, operate and lease its properties and assets. The
Seller is duly qualified or licensed to transact business in good standing in
every jurisdiction in which the conduct of its business or the ownership or
lease of its properties requires it to be so qualified or licensed. The
Subsidiary is the Seller's only subsidiary. All of the issued and outstanding
capital stock of the Subsidiary is owned beneficially and of record by the
Seller. The parties agree and acknowledge that the Seller is not selling, and
LTC is not buying, Seller's shares of capital stock in the Subsidiary, which are
an Excluded Asset set forth on Schedule 1.2. Xxxxx X. Xxxxxxxx is the holder of
all of the capital stock of the Seller.
3.2 DUE AUTHORIZATION. Each Selling Party has full power and
authority to enter into this Agreement and the agreements contemplated hereby
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement and all other agreements
and transactions contemplated hereby have been duly authorized by the Board of
Directors and shareholders of the Seller. This Agreement and all other
agreements contemplated hereby to be entered into by any Selling Party each
constitutes a legal, valid and binding obligation of such Selling Party,
enforceable in accordance with its terms.
4
10
3.3 NO VIOLATION. The execution, delivery and performance by the
Selling Parties of this Agreement, and all other agreements contemplated hereby,
and the fulfillment of and compliance with the respective terms hereof and
thereof by such Selling Parties, do not and will not (a) conflict with or result
in a breach of the terms, conditions or provisions of, (b) constitute a default
or event of default under, (c) result in the creation of any lien, security
interest, encumbrance or charge upon the Seller's assets (including, without
limitation, the Purchased Assets) pursuant to, (d) give any third party the
right to accelerate any obligations under, (e) result in a violation of, or (f)
other than as set forth on Schedule 3.3(f), require any authorization, consent,
approval, exemption or other action by, notice to, or filing with any third
party or court or governmental instrumentality pursuant to, the charter or
bylaws of the Seller, or, to the knowledge of the Selling Parties, any
applicable law, regulation, order, writ, statute, rule, injunction or decree of
any court or governmental instrumentality or any agreement or instrument to
which any of the Selling Parties or any of their properties are subject. Each
Selling Party has complied with all applicable laws, regulations and orders in
connection with the execution, delivery and performance of this Agreement and
all other agreements and transactions contemplated hereby.
3.4 CARRIER AGREEMENTS. Those certain (i) Authorized Agency Agreement
dated September 28, 1994 by and between Southwestern Xxxx Mobile Systems, Inc.
and the Seller, and (ii) Authorized Dealer Agreement dated as of September 18,
1995 by and between Cellular One/Dicomm Cellular Telephone Seller ("CELLULAR
ONE" and together with Southwestern Xxxx Mobile Systems, Inc., the "CARRIERS"
and each individually, a "CARRIER") and the Seller, true and complete copies of
which have been delivered to LTC and will be attached to the Secretary's
certificate delivered at Closing pursuant to Section 7.10 (together, the
"CARRIER AGREEMENTS" and each individually, a "CARRIER AGREEMENT"), are valid
and enforceable and are in full force and effect, and there are no defaults by
the Seller or any subsidiary thereunder or, to the knowledge of any Selling
Party, by any other party thereto; provided, that the parites acknowledge that
the term of the Cellular One Carrier Agreement has expired. The execution,
delivery and performance by the Selling Parties of this Agreement and the
agreements contemplated hereby and the consummation of the transactions
contemplated hereby and thereby will not result in the termination of, or in any
increase of any amounts payable by LTC to either Carrier under, either Carrier
Agreement. Following the Closing, and upon obtaining the Carrier Assignment, LTC
will be entitled to all of the benefits of the Seller under the Carrier
Agreements. No Selling Party is a party to or bound by any other carrier or
similar agreement with either Carrier, oral or written, relating to either
Carrier Agreement or the subject matter thereof, other than the carrier
agreements pursuant to which the Subsidiary operates, copies of which have been
provided to LTC. Each Carrier Agreement contains the entire agreement of the
parties thereto with respect to the subject matter thereof.
3.5 PAGER AGREEMENTS. Those certain (i) Sales and Distribution
Agreement dated January 31, 1995 by and between Paging Network of Upstate New
York, Inc. and the Seller, (ii) Reseller Agreement dated as of October 19, 1994
by and between Arch Communications Group New York Corporation DAB, Page New York
and the Seller, (iii) Reseller Agreement dated June 3, 1997 between Airtouch
Paging and the Seller, and (iv) Reseller Agreement dated May 5, 1997
5
11
between PageMart, Inc. (together with Airtouch, Paging Network of Upstate New
York, Inc. and Arch Communications Group New York Corporation DAB and Page New
York, the "PAGER WHOLESALERS" and each individually, a "PAGER WHOLESALER") and
the Seller, true and complete copies of which have been delivered to LTC and
will be attached to the Secretary's Certificate delivered at Closing pursuant to
Section 7.10 (collectively, the "PAGER AGREEMENTS") and each individually, a
"PAGER AGREEMENT"), are valid and enforceable and are in full force and effect,
and there are no defaults by the Seller or any subsidiary thereunder or, to the
knowledge of any Selling Party, by any other party thereto. The execution,
delivery and performance by the Selling Parties of this Agreement and the
agreements contemplated hereby and the consummation of the transactions
contemplated hereby and thereby will not result in the termination of, or in any
increase of any amounts payable by LTC to any Paging Wholesaler under, any Pager
Agreement. Following the Closing, and upon obtaining the Pager Assignment, LTC
will be entitled to all of the benefits of the Seller under the Pager
Agreements. No Selling Party is a party to or bound by any other paging
wholesaler or similar agreement with any Paging Wholesaler, oral or written,
relating to any Pager Agreement or the subject matter thereof, other than the
pager agreements pursuant to which the Subsidiary operates, copies of which have
been provided to LTC. Each Pager Agreement contains the entire agreement of the
parties thereto with respect to the subject matter thereof.
3.6 CARRIER COMMISSION REPORTS AND PAGING REPORTS.
(a) CARRIER COMMISSION REPORTS. True and complete copies of
the commission reports prepared by the Carrier for the 12 most recent monthly
periods have been made available to LTC and will be attached to the Secretary's
Certificate delivered at Closing pursuant to Section 7.10 (the "CARRIER
COMMISSION REPORTS"). To the Shareholder's knowledge, the Carrier Commission
Reports set forth (i) the number of activations of cellular telephone service
that the Seller has sold on behalf of the Carrier pursuant to the Carrier
Agreement and (ii) the amount of commission paid to the Seller for each such
activation.
(b) PAGING REPORTS. True and complete copies of the paging
reports prepared by the Seller for the 12 most recent monthly periods have been
made available to LTC and will be attached to the Secretary's Certificate
delivered at Closing pursuant to Section 7.10 (the "PAGING REPORTS"). To the
Shareholder's knowledge, the Paging Reports set forth (i) the number of the
Seller's paging customers at the time of preparation of each such report, (ii)
the amount of fees paid to the Seller for each such pager during such period and
(iii) the amount of fees paid to the Carrier for the airtime for such pagers
during such period.
3.7 FINANCIAL AND OPERATING INFORMATION. The Seller has provided
LTC with true and complete copies of each of the following documents:
(a) Leases. Each of the lease agreements listed under item
(a) in Schedule 1.1 (each individually, a "Lease" and collectively, the
"Leases"). The premises leased by the Seller pursuant to the Leases constitute
all of the locations at which the Seller conducts its business in the States of
New York and Connecticut. Notwithstanding anything in this Agreement to the
6
12
contrary, the parties hereto acknowledge and agree that the Seller is not
selling or assigning to LTC, and LTC is not purchasing or assuming, the
following leases:
(i) the leases of those premises in the States of
Massachusetts and Rhode Island at which the Subsidiary conducts its
business;
(ii) that lease of the premises at the Holyoke Mall in
Holyoke, Massachusetts to which the Seller is a party; and
(iii) that lease of the premises at the Berkshire Mall in
Lanesborough, Massachusetts to which the Seller is a party.
(b) CUSTOMER ACTIVATION AGREEMENTS. The Seller has made
available for inspection by the Buyer all of the customer activation agreements
(collectively, the "CUSTOMER ACTIVATION AGREEMENTS") between the Seller and each
cellular customer of the Seller in the possession of Seller as of the date of
this Agreement. Seller has no knowledge of any Customer Activation Agreement
between Seller and a cellular customer of the Seller which has not been made
available for inspection by the Buyer. Seller has no knowledge of any Customer
Activation Agreement between Seller and a cellular customer of the Seller which
does not provide for charge-backs to be paid to the Seller by each customer.
(c) CUSTOMER PAGING AGREEMENTS. The Seller has made
available for inspection by the Buyer all of the customer pager agreements
(collectively, the "CUSTOMER PAGER AGREEMENTS") between the Seller and each
paging customer of the Seller in the possession of Seller as of the date hereof.
Seller has no knowledge of any Customer Paging Agreement between Seller and a
paging customer of the Seller which has not been made available for inspection
by the Buyer. As of the date hereof, the Seller has not less than 3,500 Customer
Paging Agreements, each representing a current paying customer.
3.8 FINANCIAL STATEMENTS. The Seller has delivered to LTC the
financial statements of the Seller for the fiscal years ended December 31, 1995
and December 31, 1996. As soon as they become available, the Seller will deliver
to LTC the financial statements of the Seller for the twelve months ended July
31, 1997 and for the ten months ended October 31, 1997 (together with the three
previous fiscal years, collectively, the "FINANCIAL STATEMENTS"). Copies of the
Financial Statements will be attached to the Secretary's Certificate delivered
at Closing pursuant to Section 7.10. The individual balance sheet of the Seller
dated as of October 31, 1997, included in the Financial Statements is referred
to herein as the "CURRENT BALANCE SHEET." The Financial Statements fairly
present the financial position of the Seller at each of the balance sheet dates
and the results of operations for the periods covered thereby, and have been
prepared in accordance with generally accepted accounting principles, as in
existence at the date hereof ("GAAP") consistently applied throughout the
periods indicated, except, in the case of the Financial Statements for the
ten-month period ended October 31, 1997, for normal year-end adjustments and the
absence of footnotes. The books and records of the Seller fully and fairly
reflect all of its transactions, properties, assets and liabilities. Except as
specified otherwise in such Financial Statements or in the notes thereto, (i)
there are no special or non-recurring items
7
13
of income or expense during the periods covered by the Financial Statements,
(ii) the balance sheets included in the Financial Statements do not reflect any
write-up or revaluation increasing the book value of any assets, and (iii) the
Financial Statements reflect all adjustments necessary for a fair presentation
of the financial information contained therein
3.9 ASSUMED LIABILITIES; ABSENCE OF UNDISCLOSED LIABILITIES. Except
for the Assumed Liabilities, LTC shall not be subject to and shall not have
assumed any obligations or liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise) of the Seller. Except as set forth on SCHEDULE 3.9
hereto, the Seller does not have any material obligation or liability (whether
accrued, absolute, contingent, unliquidated or otherwise, known or unknown to
the Seller, whether due or to become due) arising out of transactions entered
into at or prior to the Closing Date, or any action or inaction at or prior to
the Closing Date, or any state of facts existing at or prior to the Closing
Date.
3.10 TITLE TO PURCHASED ASSETS. Except as set forth on Schedule
3.10, the Seller has good, valid and marketable title to all Purchased Assets,
and none of such property is held by the Seller under any lease or conditional
sales contract, or, as of the Closing Date, will be subject to any security
agreement, lien, encumbrance, charge, equity or claim. Except as set forth on
Schedule 3.10, upon delivery to LTC of the bills of sale, assignments and
documents of conveyance referred to in Section 2.2(a), LTC shall receive good,
valid and marketable title to all of the Purchased Assets free and clear of all
liens, encumbrances, charges, equities and claims.
3.11 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the
Current Balance Sheet, (a) there has not been (i) any material adverse
change in the business, operations, properties, assets, condition (financial or
otherwise) or liabilities of the Seller, in its employee, customer, supplier,
distributor or franchise relations or relations with the Carrier or the Paging
Wholesaler or in the prospects of the Seller's business, or (ii) any damage,
destruction or loss (whether or not covered by insurance) materially and
adversely affecting the business, operations, properties, assets or condition
(financial or otherwise) of the Seller, its employee, customer, supplier,
distributor or franchise relations or relations with the Carrier or the Paging
Wholesaler or the prospects of the Seller's business; and (b) the Seller has
not (i) sold, transferred, leased, pledged or mortgaged or, other than as
provided herein, agreed to sell, transfer, lease, pledge, or mortgage any of its
material assets, property or rights or canceled, waived or compromised or agreed
to cancel, waive or compromise, any material debts, claims or rights, (ii)
made or permitted any material amendment or early termination of any material
contract, lease, agreement or license relating to the operation of its business,
(iii) made any significant change in any method of accounting, or (iv)
granted any material increase in the compensation of officers or employees other
than in the ordinary course of business (including, without limitation, any such
increase pursuant to any bonus, pension, profit-sharing or other plan or
commitment).
3.12 CONDITION OF PURCHASED ASSETS. The tangible Purchased Assets
set forth under item (b) of SCHEDULE 1.1 are suitable for the purposes for which
intended and in good operating condition and repair consistent with normal
industry standards, except for ordinary wear and tear,
8
14
and except for such assets which shall have been taken out of service on a
temporary basis for repairs or replacement consistent with the Seller's prior
practices and normal industry standards.
3.13 PATENTS, TRADEMARKS, ETC. SCHEDULE 3.13 hereto contains a list
of all of the material patents, trademarks, trade names, service marks and
copyrights, and applications therefor, which are owned by or licensed to the
Seller, or in which the Seller has any interest or which are presently being
used in connection with the business, products or processes of the Seller's
business, and any pending or current registration of any of the foregoing is set
forth in SCHEDULE 3.13 hereto. To the knowledge of the Selling Parties, except
as set forth on SCHEDULE 3.13 hereto, the Seller owns and has the sole and
exclusive right to use all items set forth on SCHEDULE 3.13 hereto, and such
items are not subject to any licenses, liens, mortgages, pledges, encumbrances,
claims, restrictions, or charges of any kind, including, without limitation, any
rights retained by the Seller.
3.14 LITIGATION. Other than as set forth on Schedule 3.14, there are
no actions, suits or proceedings which are pending or which the Selling Parties
have received written notice are threatened by or against any Selling Party, at
law or in equity or before or by any governmental authority or instrumentality
or before any arbitrator of any kind, (a) with respect to this Agreement or any
of the other agreements or transactions contemplated hereby, or (b) with respect
to the Purchased Assets, Assumed Liabilities or the Seller's business.
3.15 COMPLIANCE WITH LAW. The Seller is in material compliance with
all applicable statutes, rules, regulations, ordinances, codes, orders,
licenses, franchises, permits, authorizations and concessions, as such apply to
the Seller's business, including, without limitation, any applicable building,
zoning, antipollution, hazardous chemical, waste disposal, occupational safety,
health or other law, ordinance or regulation in respect of any of the, offices,
structures or operations of the Seller's business, and no Selling Party has
received any notification alleging any violation of any of the foregoing.
3.16 BROKERAGE. There are no claims for brokerage commissions,
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement binding
upon any Selling Party.
3.17 LEASES. All amounts due and payable as of the date hereof under
each of the Leases by the Seller, including, without limitation, all rental,
maintenance and marketing payments, have been paid, and all such amounts due and
payable as of the Closing Date will have been paid as of the Closing Date. To
the best knowledge of each Selling Party, each of the Leases is valid and
enforceable and is in full force and effect, and there are no defaults, or
events which constitute or would constitute (with notice or lapse of time or
both) defaults, by the Seller or any subsidiary under any of such Leases or, to
the knowledge of any Selling Party, by any other party thereto. To the best
knowledge of each Selling Party, the execution, delivery and performance by the
Selling Parties of this Agreement and the agreements contemplated hereby and the
consummation of the transactions contemplated hereby and thereby will not result
in the termination of, or in any increase of any amounts payable under, any
Lease. No Selling Party
9
15
has received any notice that the landlord with respect to any Lease would refuse
to renew such Lease upon expiration of the period thereof upon substantially the
same terms. No Selling Party is party to or bound by any other material
agreement, oral or written, relating to the Leases or the subject matter
thereof. All Lessors under each of the Leases have consented (where such consent
is necessary) or prior to the Closing will have consented (where such consent is
necessary) to the consummation of the transactions contemplated by this
Agreement without requiring material modification in the rights thereunder.
3.18 DISCLOSURE. Neither this Agreement nor any of the exhibits,
attachments, written statements, documents, certificates or other items prepared
for or supplied to LTC by or on behalf of any Selling Party with respect to the
transactions contemplated hereby contains any untrue statement of a material
fact or omits a material fact necessary to make each statement contained herein
or therein not misleading. There is no fact which any Selling Party has not
disclosed to LTC in writing and of which any Selling Party has knowledge and
which could reasonably be anticipated to have a material adverse effect upon the
execution, delivery or performance of this Agreement or the agreements
contemplated hereby or on the consummation of the transactions contemplated
hereby and thereby.
3.19 CELLULAR ACTIVATIONS. All activations of radiotelephone service
pursuant to the Customer Activation Agreements and all other activations of
radiotelephone service reported by the Seller to the Carrier for payment
pursuant to the Carrier Agreement are good, collectible and legally binding. All
such activations are valid, genuine and subsisting, and arise out of bona fide
sales of radiotelephone service.
3.20 PAGERS. All pager fees and other amounts pursuant to the
Customer Pager Agreements are good, collectible and legally binding. All such
pager fees other amounts are valid, genuine and subsisting, and arise out of
bona fide sales of pager service.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF LTC
LTC hereby represents and warrants to the Selling Parties as follows as
of the date hereof and the Closing Date:
4.1 DUE ORGANIZATION. LTC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida with full
corporate power and authority to carry on its business as it is now being
conducted, and to own, operate and lease its properties and assets. LTC is duly
qualified or licensed to transact business in good standing in every
jurisdiction in which the conduct of its business or the ownership or lease of
its properties requires it to be so qualified or licensed.
4.2 DUE AUTHORIZATION. LTC has full corporate power and authority to
enter into this Agreement and the agreements contemplated hereby and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement
10
16
and all other agreements and transactions contemplated hereby have been duly
authorized by the Board of Directors of LTC and no other corporate proceedings
on its part are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement and all other agreements contemplated hereby
to be entered into by LTC each constitutes a legal, valid and binding obligation
of , enforceable against LTC in accordance with its terms.
4.3 NO VIOLATION. The execution, delivery and performance by LTC of
this Agreement, and all other agreements contemplated hereby, and the
fulfillment of and compliance with the respective terms hereof and thereof by
LTC, do not and will not (a) conflict with or result in a breach of the terms,
conditions or provisions of, (b) constitute a default or event of default under,
(c) result in the creation of any lien, security interest, encumbrance or charge
upon LTC's capital stock or assets pursuant to, (d) give any third party the
right to accelerate any obligations under, (e) result in a violation of, or (f)
require any authorization, consent, approval, exemption or other action by,
notice to, or filing with any third party or court or governmental
instrumentality pursuant to, the charter or bylaws of LTC, or, to the best
knowledge of LTC, any applicable law, regulation, order, writ, statute, rule,
injunction or decree of any court or governmental instrumentality or any
agreement or instrument to which LTC or any of its properties are subject. LTC
has complied, in all material respects, with all applicable laws, regulations
and orders in connection with the execution, delivery and performance of this
Agreement and all other agreements and transactions contemplated hereby.
4.4 BROKERAGE. There are no brokerage commissions, finder's fees or
similar compensation arrangements in connection with the transactions
contemplated by this Agreement such as to give rise to any valid claim against
LTC.
4.5 LITIGATION. There are no actions, suits or proceedings pending by
or against Seller, at law or in equity or before any governmental authority or
instrumentality or before any arbitrator of any kind (a) with respect to this
Agreement or any of the other agreements or transactions contemplated hereby, or
(b) which, if adversely determined, would adversely affect the ability of LTC to
consummate the transactions contemplated hereby.
ARTICLE 5
COVENANTS OF THE SELLING PARTIES
Until the Closing Date, except as otherwise consented to or approved by
LTC in writing, each of the Shareholder and the Seller agrees that he or it
shall act, or refrain from acting where required hereinafter, to comply (and the
Shareholder shall cause the Seller to comply) with the following:
5.1 REGULAR COURSE OF BUSINESS. The Seller shall operate its business
in good faith and in the ordinary course, consistent with past management
practices; shall maintain all of its material properties in customary repair,
order and condition, reasonable wear and tear excepted; shall maintain (except
for expiration due to lapse of time) all leases and contracts in effect without
change except as expressly provided herein; shall comply in all material
respects with
11
17
the provisions of all governmental regulations and orders applicable to it and
the conduct of its business; shall not cancel, release, waive or compromise any
debt, claim or right in its favor having a value in excess of $5,000 other than
in connection with returns for credit or replacement in the ordinary course of
business; shall not alter the rate or basis of compensation of any of its
officers, directors or employees other than in the ordinary course of business;
and shall maintain insurance coverage up to the Closing Date with the coverage
and in the amounts consistent with past management practices.
5.2 FULL ACCESS AND DISCLOSURE. The Seller shall afford to LTC and
its counsel, accountants, agents and other authorized representatives and to
financial institutions specified by LTC reasonable access during business hours
to each of the Seller's stores and offices, properties, books and records in
order that LTC may have full opportunity to make such reasonable investigations
as it shall desire to make of the affairs of the Seller; and Seller shall cause
its officers, employees and auditors to furnish such additional financial and
operating data and other information as LTC shall from time to time reasonably
request.
5.3 BREACH OF AGREEMENT. The Selling Parties shall not knowingly take
any action which would constitute a breach of this Agreement.
5.4 FULFILLMENT OF CONDITIONS PRECEDENT. Each Selling Party shall use
its or his best efforts to obtain at its or his expense all such waivers,
permits, consents, approvals or other authorizations from third parties and
governmental authorities as may be required to consummate the transactions
contemplated hereby, and to do all things as may be necessary or desirable in
connection with transactions contemplated by this Agreement, including, without
limitation, satisfy each of the conditions precedent to LTC's obligation set
forth in Article 7.
5.5 PRE CLOSING ACTIONS.
(a) The Seller shall pay all rent and other amounts due and
payable with respect to each of its Leases which are due and payable on or prior
to the Closing Date.
(b) The Seller shall not prior to the Closing Date, effect
any sale, lease, or any other disposition or distribution of any of its assets
or properties, now or hereafter owned by it, except transactions in the ordinary
and regular course of business or as otherwise consented to by LTC.
(c) The Seller shall pay all accounts payable, other current
liabilities and capitalized lease obligations that are due and payable on or
prior to the Closing Date.
(d) Prior to the Target Date, the Seller shall repay all its
Indebtedness, including but not limited to, accrued but unpaid interest and
promissory notes owed to the Shareholder by the Seller; provided, however, that
(i) all lease obligations under the operating leases set forth under Item (l) of
Schedule 1.1 shall not be repaid but shall be assumed by LTC, (ii) a portion of
the Seller's Indebtedness to Key Bank, N.A. (the "Bank") may be assigned to the
Subsidiary at or prior to Closing and such portion shall be excluded from the
Seller's current liabilities pursuant to the Working Capital calculation in
Schedule 2.3, and (iii) the portion of the Seller's Indebtedness to the Bank not
so assigned and any other Indebtedness not so repaid may be excluded from the
Seller's current
12
18
liabilities pursuant to the Working Capital calculation in Schedule 2.3
provided that it is repaid from the proceeds of the Purchase Price paid to the
Seller pursuant to Section 2.2(b)(i). In addition, prior to the Target Date, the
Seller shall pay all accrued but unpaid dividends, all annual or other bonuses,
all legal or other professional fees which are not current, all incurred but
unpaid income taxes and all trade payables which are not current; provided that
certain trade payables which are not current, which are in dispute and as to
which the Seller has advised LTC may remain unpaid. As used herein, the term
"Indebtedness" with respect to any person means any obligation of such person
for borrowed money, but in any event shall include (a) any obligation or
liabilities incurred for all or any part of the purchase price of property or
other assets or for the cost of property or other assets constructed or of
improvements thereto, other than accounts payable included in current
liabilities and incurred in respect of property purchased in the ordinary course
of business, (whether or not such person has assumed or become liable for the
payment of such obligation) (whether accrued, absolute, contingent, unliquidated
or otherwise, known or unknown, whether due or to become due), (b) the face
amount of all letters of credit issued for the account of such person and all
drafts drawn thereunder, (c) obligations incurred for all or any part of the
purchase price of property or other assets or for the cost of property or other
assets constructed or of improvements thereto, other than accounts payable
included in current liabilities and incurred in respect of property purchase in
the ordinary course of business (whether or not such person has assumed or
become liable for the payment of such obligation) secured by Liens, (d)
capitalized lease obligations, and (e) any guarantees of such person, other than
any personal guarantee of the Shareholder under the Leases or the operating
leases set forth under Item (l) of Schedule 1.1.
(e) The Seller shall not amend or otherwise change its
Articles of Incorporation, Bylaws or equivalent organizational documents.
(f) The Seller shall not issue, sell, pledge, dispose of,
encumber, or, authorize the issuance, sale, pledge, disposition, grant or
encumbrance of any shares of its capital stock of any class, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest.
(g) The Seller shall not declare, set aside, make or pay any
dividend or other distribution, payable in cash, shares, property or otherwise,
to any Stockholder or any other person with respect to any of its capital stock.
(h) The Seller shall not reclassify, combine, split,
subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any
of its capital stock.
(i) The Seller shall not (i) acquire (including, without
limitation, for cash or shares of stock, by merger, consolidation or acquisition
of stock or assets) any interest in any corporation, partnership or other
business organization or division thereof or any assets, or make any investment
either by purchase of shares or securities, contributions of capital or property
13
19
transfer, or, except in the ordinary course of business, consistent with past
practice, purchase any property or assets of any other person, (ii) incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse or otherwise as an accommodation become responsible for,
the obligations of any person, or make any loans or advances, or (iii) modify,
terminate, or enter into any Contract other than as provided herein or in the
ordinary course of business, consistent with past practice.
(j) The Seller shall not take any action with respect to
accounting policies or procedures other than in the ordinary course of business
and in a manner consistent with past practices.
(k) Except as provided herein, the Seller shall not pay,
discharge or satisfy any existing claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice of due and payable liabilities reflected or
reserved against in its financial statements, as appropriate, or liabilities
incurred after the date thereof in the ordinary course of business and
consistent with past practice.
(l) The Seller shall not acquire or agree to acquire any
capital assets, excluding inventory.
(m) Except as provided herein, the Seller shall not enter into
any transaction with any Shareholder or affiliate thereof.
(n) The Seller shall not agree, in writing or otherwise, to
take or authorize any of the foregoing actions or any action which would make
any representation or warranty in Article 3 untrue or incorrect in any respect.
5.6 BULK SALES. LTC and the Selling Parties each hereby acknowledge
that the Selling Parties do not intend to comply with the New York Bulk Sales
Act in connection with the execution, delivery and performance of this Agreement
and the agreements contemplated hereby and the consummation of the transactions
contemplated hereby and thereby. The Shareholder shall indemnify (in accordance
with the provisions of Section 10) and hold LTC harmless from any loss,
liability or expense resulting from the Selling Parties' failure to comply
therewith.
14
20
ARTICLE 6
OTHER AGREEMENTS
6.1 LTC TO MAKE RECORDS AVAILABLE. After the Closing, LTC shall make
available to the Seller as reasonably requested by the Seller or any taxing
authority all information, records or documents relating to the Purchased Assets
for all periods prior to Closing and shall preserve all such information,
records and documents until two years after the Closing. Prior to destroying any
records related to the Seller's business after the Closing Date, LTC shall
notify the Seller of its intent to destroy such records, and LTC shall permit
the Seller to retain any such records.
6.2 TAX ALLOCATION. The allocation of the Purchase Price to the
Purchased Assets shall be as set forth in SCHEDULE 6.2 hereto so as to comply
with Section 1060 of the Internal Revenue Code of 1986, as amended.
6.3 EMPLOYMENT MATTERS. LTC shall have the right, but not the duty,
to offer employment to any or all of the employees currently or formerly
employed by the Seller in the conduct of the Seller's business. LTC shall have
no obligation in respect of, and assume no responsibility for, accrued
employment benefits of any kind claimed to belong or belonging to such employees
(should there be any), including but not limited to pension or retirement
benefits, stock, profit sharing, bonus or other incentive compensation plans,
vacation pay, severance pay and benefits, payroll withholding, medical or dental
plans or insurance plans.
6.4 NON-COMPETITION
(a) GENERAL. The Shareholder agrees that for the period
commencing on the Closing Date and ending on the second anniversary of the
Closing Date, he will not serve as or be a consultant to or employee, officer,
agent, director or owner of more than three percent (3%) of another corporation,
partnership or other entity which competes with LTC within the States of New
York or Connecticut in the LTC's Business. The term "LTC's Business" shall mean
the business of selling cellular or wireless communications services or
products, including without limitation, paging, PCS, ESMR and any other form of
personal communications services. Notwithstanding the foregoing, the parties
acknowledge and agree that the following activities of the Shareholder, whether
on behalf of the Seller or on his own account, shall NOT constitute a violation
of this Section 6.4(a): Activities of the Shareholder relating to the ownership
and/or operation of the Subsidiary's retail stores not located in the States of
New York or Connecticut, out of which cellular or wireless communications
services or products, including paging, PCS and ESMR, are sold, including but
not limited to advertising and marketing such stores in advertising markets
which may include portions of the States of New York and Connecticut and the
selling of such services or products out of such stores to New York State or
Connecticut residents, citizens and/or entities. Shareholder further agrees that
for the period commencing on the Closing Date and ending on the second
anniversary of the Closing Date, he (i) will not (x) solicit for employment, (y)
endeavor in any way to entice away from employment with LTC or its affiliates or
(z) employ or contract with any employee of LTC or any of its affiliates who is
an officer, a manager of any department, salesperson or knowingly take any such
action with
15
21
respect to any sub-agent, sub-contractor or other independent contractor of LTC
or any of its affiliates, including, without limitation, any resellers of
cellular or wireless communications services and (ii) will not solicit any
person, corporation, partnership or other entity that is a customer of the
Seller immediately prior to the Closing for the purpose of selling cellular or
wireless communications services or products. The Shareholder acknowledges and
agrees that the covenants provided for in this Section 6.4(a) are reasonable and
necessary in terms of time, area and line of business to protect LTC's
legitimate business interests as a buyer of the Purchased Assets in protecting
its trade secrets. The Shareholder further acknowledges and agrees that such
covenants are reasonable and necessary in terms of time, area and line of
business to protect LTC's other legitimate business interests, which include its
interests in protecting its (x) valuable confidential business information, (y)
substantial relationships with specific customers throughout the States of New
York and Connecticut and (z) customer goodwill associated with its ongoing
business by way of its marketing throughout the States of New York and
Connecticut using the trademark, "Let's Talk Cellular & Wireless." The
Shareholder hereby expressly authorizes the enforcement of the covenants
provided for in this Section 6.4(a) by (x) LTC, (y) any affiliate of LTC and (z)
any successors to the business of LTC. To the extent that the covenant provided
for in this Section 6.4(a) may later be deemed by a court to be too broad to be
enforced with respect to its duration or with respect to any particular activity
or geographic area, the court making such determination shall have the power to
reduce the duration or scope of the provision, and to add or delete specific
words or phrases to or from the provision. The provision as modified shall then
be enforced.
(b) NON-DISCLOSURE. Each Selling Party hereby agrees that it
shall, and shall use its best efforts to cause its affiliates and their
respective agents, accountants, legal counsel and other representatives and
advisers (and shall use its best efforts to cause its employees), to hold in
strict confidence all, and not divulge or disclose to any other third party any
information of any kind concerning the transactions contemplated by this
Agreement, LTC or its businesses; provided, however, that the foregoing
obligation of confidence shall not apply to (i) information that is or becomes
generally available to the public other than as a result of a disclosure by any
of the Selling Parties or any of their respective affiliates, employees, agents,
accountants, legal counsel or other representatives or advisors (collectively,
"Related Persons"), (ii) information that is or becomes available to the Selling
Parties or any of their Related Persons after the Closing on a non-confidential
basis prior to its disclosure by any of the Selling Parties and (iii)
information that is required to be disclosed by any of the Selling Parties or
any of their Related Persons as a result of any applicable law, rule or
regulation of any federal, state or local governmental authority; provided, that
the Selling Parties may disclose information that they deem reasonably necessary
to disclose to their advisors, agents, attorneys and/or accountants in order to
effectuate the transactions contemplated hereby; and provided, further, that the
Selling Parties shall promptly notify LTC of any disclosure pursuant to clause
(iii) above.
(c) INJUNCTION. The parties hereto hereby acknowledge that a
breach or violation by any of the Selling Parties of any or all of the covenants
and agreements contained in this Section 6.4 may cause irreparable harm and
damage to LTC in a monetary amount which may be virtually impossible to
ascertain. As a result, each of the Selling Parties acknowledges
16
22
and agrees that LTC shall be entitled to an injunction from any court of
competent jurisdiction without having to post a bond and restraining any breach
or violation of any or all of the covenants and agreements contained in this
Section 6.4 by the Selling Parties, either directly or indirectly, and that such
right to injunction shall be cumulative and in addition to whatever other rights
or remedies that LTC may possess hereunder, at law or in equity. Nothing
contained in this Section 6.4 shall be construed to prevent LTC from seeking and
recovering from the Selling Parties damages sustained by it as a result of any
breach or violation by any of them of any of the covenants or agreements
contained in this Section 6.4.
6.5 CONFIDENTIAL DOCUMENTS. No Selling Party shall retain any
originals or copies of any of the following, whether written, printed or another
form of hard copy, or in electronic or magnetic form or contained on a computer
diskette or other similar media: (i) any of the Seller's customer lists; and
(ii) any product pricing materials relating to the Seller's business.
6.6 CLAIMS OF SHAREHOLDER. Each Shareholder hereby releases, waives
and discharges any and all claims, rights and actions that he has against the
Purchased Assets, other than claims, rights and actions relating to the
Shareholder's personal guarantee granted under certain Leases (it being
understood that nothing in this Section 6.6 shall limit in any way any right of
any Selling Party under Section 10.2).
6.7 AGREEMENT TO DEFEND. In the event any action, suit, proceeding or
investigation of the nature specified in SECTION 7.3 hereof is commenced,
whether before or after the Closing Date, all the parties hereto agree to
cooperate and use commercially reasonable efforts to defend against and respond
thereto.
6.8 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, the parties hereto shall use their reasonable commercial efforts to
take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective as promptly as possible the transactions
contemplated by this Agreement, and to cooperate with each other in connection
with the foregoing, including without limitation using all reasonable commercial
efforts (a) to obtain all necessary waivers, consents, and approvals from other
parties to loan agreements, leases, mortgages and other contracts, (b) to obtain
all necessary permits, consents, approvals and authorizations as are required to
be obtained under any federal, state or foreign governmental regulation, (c) to
lift or rescind any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions contemplated
hereby, and (d) to effect all necessary registrations and filings and
submissions of information requested by governmental authorities. The parties
hereto further covenant and agree that they shall use their respective
reasonable commercial efforts to prevent, with respect to a threatened or
pending preliminary or permanent injunction or other regulation or order the
entry, enactment or promulgation thereof, as the case may be.
6.9 NO SOLICITATION OR NEGOTIATION. Until the earlier of the Closing
or the termination this Agreement, the Seller shall not, and the Shareholder
shall use his best efforts to cause the
17
23
Seller's directors, officers, employees, representatives, agents, advisors,
accountants and attorneys not to, initiate or solicit, directly or indirectly,
any inquiries or the making of any proposal with respect to, or engage in
negotiations concerning, or provide any confidential information or data to any
person with respect to, or have any discussions with any person relating to, any
acquisition, business combination or purchase of all or any significant asset
of, or any equity interest in, directly or indirectly, the Seller, or otherwise
facilitate any effort or attempt to do or seek any of the foregoing, and shall
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing.
6.10 NO TERMINATION OF SELLER'S OBLIGATIONS BY SUBSEQUENT
INCAPACITY, DISSOLUTION, ETC. Each Selling Party specifically agrees that its or
his obligations hereunder, including, without limitation, obligations pursuant
to Article 10 and Section 6.4 shall not be terminated by operation of law or by
the death or incapacity of either Shareholder.
6.11 DELIVERIES AFTER CLOSING. At LTC's request and without further
consideration from LTC, the Seller shall execute and deliver such other
instruments of conveyance and transfer and take such other action as the LTC
reasonably may require to convey, transfer to and vest in LTC and to put LTC in
possession of the Purchased Assets.
6.12 SCHEDULES. The parties hereto acknowledge and agree that
Schedules 3.3(f), 3.9, 3.13, 3.14 and 6.2 are incomplete or have not been
attached to this Agreement as of the date hereof and consequently the Selling
Parties' representations and warranties shall be deemed to include such
schedules when and as delivered. The Selling Parties shall deliver to LTC such
missing schedules or additions to incomplete schedules to this Agreement not
later than November 10, 1997. The required delivery date of the schedules is
hereinafter referred to as the "SCHEDULE DELIVERY DATE." The Selling Parties
shall each execute a certificate as of the Schedule Delivery Date affirming that
the representations and warranties as modified by the schedules are true and
correct as of such date. LTC shall have seven days to accept or reject such
schedules in writing, which acceptance shall not be unreasonably withheld. If
LTC rejects any of these schedules, the Agreement shall be terminated in
accordance with Section 9.1 without any further liability to the Selling
Parties.
ARTICLE 7
CONDITIONS TO THE OBLIGATIONS OF LTC
Each and every obligation of LTC under this Agreement shall be subject
to the satisfaction, on or before the Closing Date, of each of the following
conditions unless waived in writing by LTC:
7.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The representations
and warranties of each of the Selling Parties contained in this Agreement and
all information contained in any exhibit or schedule hereto delivered by, or on
behalf of, each of the Selling Parties, to LTC, that are qualified as to their
materiality shall be true and correct when made and on the Closing Date
18
24
as though then made, and any such representations, warranties and information
that are not so qualified shall be true and correct in all material respects
when made and on the Closing Date as though then made, except as expressly
provided herein. Each of the Selling Parties shall have performed and complied
with all agreements, covenants and conditions required by this Agreement to be
performed and complied with by them prior to the Closing Date.
7.2 NO MATERIAL ADVERSE CHANGE. There shall have been no development
or change which might reasonably be expected to have a material adverse effect
in respect of the Seller's business, operations, properties, assets, condition
(financial or otherwise), results, plan, strategies or prospects.
7.3 NO PROCEEDING OR LITIGATION. No preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by any governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority shall be in effect, which would prevent
the consummation of the transactions contemplated hereby.
7.4 CONDITION OF ASSETS. None of the Purchased Assets shall have been
damaged or destroyed prior to the Closing Date by fire or other casualty,
whether or not fully covered by insurance, in an aggregate amount exceeding
$5,000.
7.5 PHYSICAL INVENTORY. LTC shall have conducted a physical inventory
of the Seller's inventory and the results of such physical inventory shall show
no material adverse changes in the inventory from the Current Balance Sheet
(taking into account sales of inventory to the Seller's customers). LTC shall
have completed its due diligence investigation, and the results thereof shall be
satisfactory to LTC, in its sole discretion, and such investigation shall not
have revealed that any of the representations of the Selling Parties set forth
herein are untrue or incorrect in any respect or otherwise unsatisfactory to
LTC.
7.6 ASSIGNMENTS. The Seller shall have executed and delivered to LTC:
(a) An assignment of the Carrier Agreement, substantially in
the form attached hereto as Exhibit 7.6(a) (the "Carrier Assignment").
(b) An assignment of the Pager Agreement, substantially in the
form attached hereto as Exhibit 7.6(b) (the "Pager Assignment").
(c) An assignment of each Lease, substantially in the form
attached hereto as Exhibit 7.6(c).
(d) An assignment covering all Customer Activation Agreements
substantially in the form attached hereto as Exhibit 7.6(d).
(e) An assignment covering all Customer Pager Agreements
substantially in the form attached hereto as Exhibit 7.6(e).
19
25
(f) [An assignment of other agreements substantially in the
form attached hereto as Exhibit 7.6(f).]
7.7 XXXX OF SALE. The Seller shall have executed and delivered to LTC
a xxxx of sale in the form attached hereto as EXHIBIT 7.7 (the "XXXX OF SALE").
7.8 PAYOFF LETTERS. The Seller shall have delivered to LTC "pay-off"
letters evidencing the termination, at or prior to Closing, of any and all liens
that encumber any of the Purchased Assets or other properties of the Seller
(other than those set forth on Schedule 3.10), substantially in the form
attached hereto as EXHIBIT 7.8 (each individually, a "PAY-OFF LETTER" and
collectively, the "PAY-OFF LETTERS").
7.9 EMPLOYEE RECORDS. Except as prohibited by law, the Seller shall
have delivered to LTC all corporate records and personnel records, including,
but not limited to, names, Social Security numbers, dates of hire by the Seller,
dates of birth, number of hours worked each calendar year, and salary histories,
for all of the Seller's employees who LTC has notified the Seller will be
employed by LTC on the Closing Date.
7.10 SECRETARY'S CERTIFICATE. The Seller shall have executed and
delivered to LTC a Secretary's Certificate certifying copies of (i) the Seller's
Articles of Incorporation, (ii) the Seller's Bylaws, (iii) the resolutions of
the Seller's shareholders and Board of Directors, (iv) the jurisdictions in
which the Seller is qualified and licensed to do business, (v) the Carrier
Agreements, (vi) the Pager Agreements, (viii) the Carrier Commission Reports,
(viii) the Paging Reports, (ix) the Leases, (x) the Financial Statements and
(xi) the incumbency of the persons executing this Agreement and the
certificates, agreements and other documents delivered in connection herewith.
7.11 LICENSE AGREEMENT. The Seller shall have executed and delivered
to LTC a License Agreement pursuant to which the Selling Parties grant to LTC an
exclusive license to use the tradename and service xxxx "Cellular Unlimited" in
the States of New York and Connecticut in connection with LTC's Business (as
defined in Section 6.4(a)) for the period of time commencing on the Closing Date
and terminating on the fifth anniversary thereof, substantially in the form
attached hereto as EXHIBIT 7.11 (the "LICENSE AGREEMENT").
7.12 CUSTOMER ACTIVATION AGREEMENTS. The Seller shall have delivered to
LTC all copies and originals of the Customer Activation Agreements.
7.13 CUSTOMER PAGER AGREEMENTS. The Seller shall have delivered to LTC
all copies and originals of the Customer Pager Agreements.
7.14 EMPLOYMENT AGREEMENTS. Xx. Xxxxx X. Xxxxxxxx shall have executed
and delivered an employment agreement in the form attached hereto as EXHIBIT
7.14.
7.15 CONSENTS. The Seller shall have executed and delivered to LTC:
20
26
(i) The consent of the Carrier to the execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereby including the Carrier Assignment, in form and substance
acceptable to LTC (the "Carrier Consent").
(ii) The consent of the Paging Wholesaler to the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby including the Pager Assignment, in form and
substance acceptable to LTC (the "PAGING WHOLESALER CONSENT").
7.16 ESTOPPEL LETTERS. The Seller shall have executed and delivered
to LTC an estoppel letter from each Lessor of real property pursuant to each of
the Leases, substantially in the form attached hereto as EXHIBIT 7.16 (each
individually, an "ESTOPPEL LETTER" and collectively, the "ESTOPPEL LETTERS").
7.17 INDEBTEDNESS AND OTHER OBLIGATIONS. Prior to the Target Date,
the Seller shall have repaid all of its Indebtedness, other liabilities, taxes
and other amounts required to be repaid prior to the Target Date pursuant to
Section 5.5(d), and at or prior to Closing, any portion of the Seller's
Indebtedness to the Bank which is not assigned to the Subsidiary, shall have
been repaid from the proceeds of the Purchase Price paid to the Seller pursuant
to Section 2.2(b)(i).
7.18 SUBLEASE. The parties hereto shall have executed and delivered
a sublease agreement pursuant to which the Seller, Subsidiary and/or Shareholder
shall sublease from LTC after Closing a portion of the premises subject to the
Lease of the Seller's administrative offices located at 000 Xxxxxx Xxxxx Xxxxx,
Xxxxx 0X, Xxxxxxxxx, Xxx Xxxx.
7.19 RENTALS, TAXES, ETC. Except as otherwise expressly provided
herein, all rental payments, taxes, assessments, utilities, insurance and water
charges relating to the Leases shall have been prorated between LTC and Seller
to the Target Date.
ARTICLE 8
CONDITIONS TO THE OBLIGATIONS OF THE SELLING PARTIES
Each and every obligation of the Selling Parties under this Agreement
shall be subject to the satisfaction, on or before the Closing Date, of each of
the following conditions unless waived in writing by the Seller:
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The representations
and warranties of LTC contained in this Agreement and all information contained
in any exhibit or schedule hereto delivered by, or on behalf of, LTC, to the
Selling Parties that are qualified as to their materiality, shall be true and
correct when made and on the Closing Date as though then made, and any such
representations, warranties and information that are not so qualified shall be
true and correct in all material respects when made, and on the Closing Date as
though then made,
21
27
except as expressly provided herein. LTC shall have performed and complied with
all agreements, covenants and conditions required by this Agreement to be
performed and complied with by them prior to the Closing Date.
8.2 NO PROCEEDING OR LITIGATION. No preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by any governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority shall be in effect, which would prevent
the consummation of the transactions contemplated hereby.
8.3 PERFORMANCE. LTC shall have made payment of the initial cash
portion of the Purchase Price, by wire transfer in immediately available funds,
as set forth in Section 2.2(b).
8.4 DUE AUTHORIZATION. LTC's execution and delivery of this
Agreement, its compliance with the provisions hereof and the consummation of all
of the transactions contemplated hereby shall have been duly and validly
authorized by all necessary corporate action on the part of LTC, and Seller
shall have received a duly certified copy of all actions taken by LTC's Board of
Directors effecting the same.
8.5 RENTALS, TAXES, ETC. Except as otherwise expressly provided
herein, all rental payments, taxes, assessments, utilities, insurance and water
charges relating to the Leases shall have been prorated between LTC and Seller
to the Target Date.
8.6 EXECUTION OF DOCUMENTS. LTC shall have executed and delivered to
seller the following documents contemplated herein: the Escrow Agreement; the
Assignment of Carrier Agreement; the Assignment of Pager Agreement; an
Assignment of Lease for each Lease to be assigned to LTC hereby; the Assignment
of Customer Activation Agreements; the Assignment of Customer Pager Agreements;
the Contingent Note; the Contingent Note; and the Employment Agreement with
Xxxxx X. Xxxxxxxx.
8.7 SUBLEASE. The parties hereto shall have executed and delivered a
sublease agreement pursuant to which the Seller, Subsidiary and/or Shareholder
shall sublease from LTC after Closing a portion of the premises subject to the
Lease of the Seller's administrative offices located at 000 Xxxxxx Xxxxx Xxxxx,
Xxxxx 0X, Xxxxxxxxx, Xxx Xxxx.
ARTICLE 9
TERMINATION AND ABANDONMENT
9.1 METHODS OF TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time:
(a) by mutual consent of LTC and the Seller;
22
28
(b) by LTC or the Seller if this Agreement is not
consummated on or before December 31, 1997; provided that if any party has
breached or defaulted with respect to its respective obligations under this
Agreement on or before such date, such party may not terminate this Agreement
pursuant to this Section 9.1(b), and each other party to this Agreement shall at
its option enforce its rights against such breaching or defaulting party and
seek any remedies against such party, in either case as provided hereunder and
by applicable law;
(c) by LTC if as of the Closing Date any of the conditions
specified in Article 7 hereof have not been satisfied in any material respect or
if any Selling Party is otherwise in default in any material respect under this
Agreement; or
(d) upon the reasonable rejection by LTC of any schedules
delivered by the Selling Parties pursuant to Section 6.12.
9.2 PROCEDURE UPON TERMINATION. In the event of termination and
abandonment pursuant to Section 9.1 hereof, and subject to the proviso contained
in Section 9.1(b) this Agreement shall terminate and shall be abandoned, without
further action by any of the parties hereto. If this Agreement is terminated as
provided herein:
(a) each party shall redeliver all documents and other
material of any other party relating to the transactions contemplated hereby,
whether obtained before or after the execution hereof, to the party furnishing
the same; and
(b) No non-breaching party hereto shall have any liability or
further obligation to any other party to this Agreement.
ARTICLE 10
INDEMNIFICATION
10.1 INDEMNIFICATION BY THE SHAREHOLDER. During the period commencing
on the Closing Date and ending on the second anniversary thereof, the
Shareholder agrees to indemnify and hold harmless LTC and its affiliates at all
times against and in respect of all losses, liabilities, costs and expenses
(including reasonable attorneys' fees) which arise out of or are based on (a)
any taxes (federal, state or local) payable by the Seller, (b) any breach of the
representations, warranties, covenants or agreements of the Selling Parties set
forth in this Agreement and (c) any Excluded Liabilities; provided, that if on
such second anniversary there is pending any claim by LTC for indemnification
hereunder, then such two-year period shall be extended with respect to such
claim until such matter is resolved and payment, if any, is made to LTC. LTC
shall promptly notify the Shareholder in writing of all matters which may give
rise to the right to indemnification hereunder, it being understood that if the
Shareholder does not receive notice of any matter known to LTC and as to which
LTC is entitled to indemnification hereunder in time to contest the
determination of any such liability which is susceptible to being successfully
contested, the Shareholder shall not be obligated to indemnify LTC with respect
thereto. The Shareholder shall not, without the prior written consent of LTC,
which shall not be unreasonably
23
29
withheld, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not LTC is
an actual or potential party to such claim, action, suit or proceeding) unless
such settlement, compromise or consent involves only the payment of money
damages and does not impose an injunction or other equitable relief upon LTC.
The Shareholder shall have the right to defend (without the consent of LTC)
through counsel of its own choosing, at its own expense, any action which may be
brought by a third party in connection therewith; provided, however, that LTC
shall have the right to have its counsel participate fully in such defense at
their own expense. LTC and the Shareholder shall keep each other informed of all
settlement negotiations with third parties and of the progress of any litigation
with third parties. LTC and the Shareholder shall permit each other reasonable
access to books and records and otherwise cooperate with all reasonable requests
of each other in connection with any matter or claim for indemnification by a
third party. With respect to the breaches of the representations and warranties
set forth in Sections 3.12, 3.15, 3.19 and 3.20 and the covenants in Article 5,
the Shareholder shall not be required to indemnify LTC until the indemnifiable
damages, in the aggregate, exceed $5,000 (the "Hurdle Rate"), at which point the
Shareholder shall be responsible for all indemnifiable damages that may arise,
irrespective of the Hurdle Rate; provided, that indemnifiable damages shall
accumulate until such time as they exceed the Hurdle Rate, whereupon LTC shall
be entitled to seek indemnification for the full amount of such damages.
10.2 INDEMNIFICATION BY LTC. During the period commencing on the
Closing Date and ending on the second anniversary thereof, LTC agrees to
indemnify and hold harmless the Selling Parties at all times against and in
respect of (i) all losses, liabilities, costs and expenses (including reasonable
attorneys' fees) which are caused by any breach of the representations,
warranties, covenants or agreements of LTC set forth in this Agreement, (ii) any
liabilities that accrue after the Closing Date in connection with the operation
of the Purchased Assets and (iii) those liabilities arising after the Closing
Date related to the Assumed Liabilities set forth in Schedule 1.3, including,
but not limited to liabilities under the Leases assigned to LTC; provided, that
such two-year limitation shall not apply to liabilities under the Leases
assigned to LTC; and provided further, that if on such second anniversary there
is pending any claim by the Selling Parties for indemnification hereunder, then
such two-year period shall be extended with respect to such claim until such
matter is resolved and payment, if any, is made to the Selling Parties. The
Selling Parties shall promptly notify LTC in writing of all matters which may
give rise to the right to indemnification hereunder, it being understood that if
LTC does not receive notice of any matter known to the Selling Parties and as to
which the Selling Parties are entitled to indemnification hereunder in time to
contest the determination of any such liability which is susceptible to being
successfully contested, LTC shall not be obligated to indemnify the Selling
Parties with respect thereto. LTC shall not, without the prior written consent
of the Selling Parties, which consent shall not be unreasonably withheld, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not either or both of the
Selling Parties are an actual or potential party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent involves only the
payment of money damages
24
30
and does not impose an injunction or other equitable relief upon the Selling
Parties. LTC shall have the right to defend (without the consent of the Selling
Parties) through counsel of its own choosing, at its own expense, any action
which may be brought by a third party in connection therewith; provided,
however, that the Selling Parties shall have the right to have their counsel
participate fully in such defense at their own expense. LTC and the Selling
Parties shall keep each other informed of all settlement negotiations with third
parties and of the progress of any litigation with third parties. LTC and the
Selling Parties shall permit each other reasonable access to books and records
and otherwise cooperate with all reasonable requests of each other in connection
with any matter or claim for indemnification by a third party.
10.3 SET OFF. The parties hereto hereby agree that LTC is hereby
authorized to set off all amounts at any time owed by any Selling Party to LTC
against the obligations of LTC to any Selling Party under this Agreement or
under any other agreement contemplated hereby, including, without limitation,
against any Purchase Price adjustment under Section 2.3 owed by LTC to the
Seller and contingent payments under the Contingent Note owed by LTC to the
Seller, but excluding payments to the Executive under the Employment Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, provided, that neither this Agreement nor any
of the rights, benefits or obligations hereunder shall be assigned or
transferred, by operation of law or otherwise, by any party hereto without the
prior written consent of the other parties, except that (i) the Seller may
assign any or all of its rights, benefits or obligations hereunder to the
Shareholder and (ii) LTC may assign any or all of its rights, benefits or
obligations to an affiliate (it being understood that in either of the cases
described in clause (i) or (ii) above, the assignor nonetheless shall remain
responsible for the performance of all of its obligations hereunder).
11.2 SURVIVAL. Any provision of this Agreement which contemplates the
performance or existence of obligations after the Closing Date, and any and all
representations and warranties set forth in this Agreement, shall not be deemed
to be merged into or waived by the execution and delivery of the instruments
executed at the Closing, but shall expressly survive Closing and shall be
binding upon the party or parties obligated thereby in accordance with the terms
of this Agreement, subject to any limitations expressly set forth in this
Agreement.
11.3 SEVERABILITY. Each of the provisions contained in this Agreement
shall be severable, and the unenforceability of one shall not affect the
enforceability of any others or of the remainder of this Agreement.
11.4 ENTIRE AGREEMENT. This Agreement contains the entire agreement
of the parties hereto with respect to the transactions covered hereby,
superseding all negotiations, prior
25
31
discussions and preliminary agreements made prior to the date hereof and is not
intended to confer upon any other person any rights or remedies hereunder.
11.5 MODIFICATION. This Agreement may not be amended, supplemented or
otherwise modified except by an instrument in writing signed by all of the
parties hereto.
11.6 WAIVER. The failure of any party to enforce any condition or part
of this Agreement at any time shall not be construed as a waiver of that
condition or part, nor shall such party forfeit any rights to future enforcement
thereof.
11.7 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the internal laws of the State of New York.
11.8 HEADINGS. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.
11.9 COUNTERPARTS. More than one counterpart of this Agreement may be
executed by the parties hereto, and each fully executed counterpart shall be
deemed an original.
11.10 REMEDIES. The rights and remedies provided by this Agreement
are cumulative, and the use of any one right or remedy by any party hereto shall
not preclude or constitute a waiver of its right to use any or all other
remedies. Such rights and remedies are given in addition to any other rights and
remedies a party may have by law, statute or otherwise.
11.11 ATTORNEYS' FEES. In the event any suit or other legal
proceeding is brought for the enforcement of any of the provisions of this
Agreement, the parties hereto agree that the prevailing party or parties shall
be entitled to recover from the other party or parties upon final judgment on
the merits reasonable attorneys' fees, including attorneys' fees for any appeal,
and the costs incurred in bringing such suit or proceeding.
11.12 FURTHER DOCUMENTS. Each party hereto shall, at the request of
any other party, execute and deliver to such other party all such further
instruments, assignments, assurances and other documents as such other party may
reasonably request in connection with the carrying out of this Agreement.
11.13 NOTICES. All communications, notices and consents provided for
herein shall be in writing and be given in person or by means of telex, telecopy
or other wire transmission (with confirmation of receipt in a manner typical
with respect to communications of that type) or by mail, and shall become
effective (i) on delivery if given in person, (ii) on the date of transmission
and confirmation of receipt if sent by telex, telecopy or other wire
transmission, or (iii) four business days after being deposited in the mails,
with proper postage for first-class registered or certified air mail, prepaid.
Notices shall be addressed as follows:
26
32
If to LTC, to: Let's Talk Cellular & Wireless, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xx. Xxxx Xxxxxx and Xx. Xxxxx Xxxxxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxxxxxx Traurig Xxxxxxx Xxxxxx Xxxxx &
Quentel, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
with a copy to: H.I.G. Capital Management, Inc.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
If to any Selling Party, to: Cellular Unlimited, Inc.
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 0X
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Fax:(000) 000-0000
with a copy to: Xxxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
provided, however, that if either party shall have designated a different
address by notice to the other as provided herein, then to the last address so
designated.
11.14 EXPENSES. The Seller shall bear its own and the Selling
Parties, expenses, including without limitation, legal fees and expenses, with
respect to this Agreement and the transactions contemplated hereby. LTC shall
bear its own expenses, including without limitation, legal fees and expenses,
with respect to this Agreement and the transactions contemplated hereby.
* * *
27
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
LET'S TALK CELLULAR & WIRELESS, INC.
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxxx
----------------------------
Title: President
---------------------------
CELLULAR UNLIMITED CORP.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
------------------------------
Title: President
-----------------------------
SHAREHOLDER
/s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxx
28
34
SCHEDULE 1.1
PURCHASED ASSETS
"PURCHASED ASSETS" shall be transferred to LTC and include, without
limitation, the following:
(a) LEASES. All of the Seller's right, title and interest in and to the
following Leases:
(i) Lease Agreement dated May 30, 1996 by and between Boulevard
Mall Co. And Cellular Unlimited Corp. For premises located
at the Boulevard Mall, Amherst, New York.
(ii) Standard Shopping Center Lease dated March 12, 1996 by and
between Pyramid Crossgates Company and Cellular Unlimited,
Inc. for premises located at the Crossgates Mall, Route 87 &
Route 20, Albany, New York.
(iii) Standard Lease Agreement dated September 19, 1996 by and
between Great Eastern Mall, L.P. and Cellular Unlimited
Corp. For premises located at the Eastview Mall, Victor,
New York.
(iv) Standard Lease Agreement dated January 17, 1996 by and
between Greece Towne Mall, L.P. and Cellular Unlimited, Inc.
for premises located at The Mall at Greece Ridge Center,
Rochester, New York.
(v) Standard Lease Agreement dated May 14, 1996 by and between
The Marketplace and Cellular Unlimited Corp. for premises
located at Xxx Xxxxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx.
(vi) Lease executed June 12, 1997 by and between Midtown Holdings
Corp. And Cellular Unlimited Corp. for premises located at
Midtown Plaza, Rochester, New York.
(vii) Lease dated September 22, 1997 by and between Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxxx and Xxxxx X. Xxxxxxx as
Trustees under a Trust Agreement dated October 14, 1995
known as the Benderson 85-1 Trust and Cellular Unlimited
Corp. for premises located at Five Xxxxxxx Xxxxxxxx Xxxxxx,
Xxxxxxx Xxxx Xxxx, Xxxxxxx Xxxx, Xxx Xxxx.
(viii) Standard Shopping Center Lease executed August 17, 1995 by
and between Pyramid Company of Onondaga and Cellular
Unlimited, Inc. for premises located at Carousel Center, 000
Xxxxxxxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx.
35
(ix) Standard Shopping Center Lease executed August 17, 1995 by
and between Pyramid Company of Ithaca and Cellular
Unlimited, Inc. for premises located at the Pyramid Mall,
Ithaca, New York.
(x) Standard Lease Agreement dated October 11, 1996 by and
between Rotterdam Square, L.P. and Cellular Unlimited Corp.
for premises located at Rotterdam Square, Schenectady, New
York.
(xi) Standard Shopping Center Lease dated March 12, 1996 by and
between the Senpike Mall Company and Cellular Unlimited,
Inc. for premises located at Xxxxxxxxxx Xxxxxx, Xxxxx 0, Xxx
Xxxxxxxx, Xxx Xxxx.
(xii) Standard Lease Agreement dated May 21, 1996 by and between
Shoppingtown Mall, L.P. and Cellular Unlimited Corp. for
premises located at the Shoppingtown Mall, Dewitt,
New York.
(xiii) Standard Lease Agreement dated October 11, 1996 by and
between Sarwil Associates, L.P. and Cellular Unlimited Corp.
for premises located at Wilton Mall at Saratoga, Saratoga,
New York.
(xiv) That lease and sublease to premises located at the Galleria
Mall in Cheektowaga, New York.
(xv) Lease Agreement executed February 26, 1995 by and between
Xxxxxxx Development Corporation and Cellular Unlimited for
premises located at 000 Xxxxxx Xxxxx Xxxxx, Xxxxxxxxx, Xxx
Xxxx.
(b) EQUIPMENT. All supplies, equipment, machinery, fixtures, furniture,
leasehold improvements and other tangible property currently owned or used by
the Seller in connection with the operation of its business, including, without
limitation, and all of the foregoing property located at the Seller's principal
office at 000 Xxxxxx Xxxxx Xxxxx, Xxxxx 0X, Xxxxxxxxx, Xxx Xxxx 00000 and at the
Seller's stores subject to the Leases set forth in (a) above.
(c) CARRIER AGREEMENTS. All of the Seller's right, title and interest
in and to the Carrier Agreements, including the right to receive residual
payments.
(d) PAGER AGREEMENTS. All of Seller's right, title and interest in and
to the Pager Agreements.
(e) BUSINESS AS A GOING CONCERN. The business of the Seller as a going
concern, including, without limitation, its franchises, permits, licenses,
telemarketing and other telephone numbers (including without limitation, the
following numbers: (000) 000-0000, (000) 000-0000), signage, customer deposits,
customer lists (including, without limitation, lists of cellular customers and
pager customers), vendor lists, referral lists and contracts, advertising
materials
2
36
and data, restrictive covenants, causes of action and similar obligations
relating to the business of the Seller owing to the Seller, its officers,
employees, agents and others, together with all books, computer software, files,
papers, records and other data of the Seller relating to the Purchased Assets
and related operations of the Seller's business.
(f) TRADE INFORMATION. All proprietary knowledge, trade secrets,
technical information, quality control data, processes (whether secret or not),
methods, and other similar know-how or rights used in the conduct of the
Seller's business, including, but not limited to, the areas of retailing, sales,
marketing, advertising and personnel training and recruitment, together with all
rights to use any and all information, trade secrets, patents, copyrights,
trademarks, tradenames and other intangible properties that are necessary or
customarily used by the Seller for the ownership, management or operation of its
business (other than the right, title and interest of the Seller in the
tradename and service xxxx "Cellular Unlimited").
(g) DEPOSITS. All utility, security, lease and other deposits and
prepaid expenses attributable to the operation of the Seller's business,
including, without limitation, the deposits under the Leases set forth in item
(a) of this Schedule 1.1, but excluding the deposits and prepaid expenses under
any lease not assigned to LTC pursuant to the terms of this Agreement.
(h) CUSTOMER ACTIVATION AGREEMENTS. All of the Seller's right, title
and interest in and to the Customer Activation Agreements.
(i) CUSTOMER PAGER AGREEMENTS. All of the Seller's right, title and
interest in and to the Customer Pager Agreements
(j) INVOICES. All of the Seller's right title and interest in and to
the invoices for fixtures, fixed assets and construction on the premises leased
by the Seller pursuant to the Leases.
(k) OTHER. All other property and rights of every kind or nature used
by the Seller in the operation of its business (other than the Excluded Assets).
(l) OPERATING LEASES. The operating leases between the Seller and the
following:
(i) Lucent Technologies
(ii) Advanta Business Services Corp.
(iii) AT&T Capital Leasing
(iv) Pitney Xxxxx
(v) IBM
(m) PAGING CUSTOMER BASE. All of the Seller's paging customer base.
3
37
(n) INVENTORY. All inventories of the Seller relating to the operation
of its business.
(o) ACCOUNTS RECEIVABLE. All of Seller's accounts receivable.
(p) CASH BALANCE. All of Seller's cash balances.
(q) TELEMARKETING ASSETS. All of Seller's telemarketing assets.
(r) AUTOMOBILE. That certain GMC Suburban used by Xxxxx Xxxxxxxx.
(s) COOPERATIVE CREDITS. All cooperative credits for the account of the
Seller under the Carrier Agreements and Pager Agreements.
4
38
SCHEDULE 1.2
EXCLUDED ASSETS
"EXCLUDED ASSETS" shall not be transferred to LTC and are as follows:
(a) All corporate minute books of the Seller and any copies thereof.
(b) All assets of the Seller located outside of New York State and
Connecticut.
(c) Capital stock of the Subsidiary owned by the Seller.
(d) All assets of the Subsidiary or the Shareholder, including, without
limitation the following:
(i) Three computers and three workstations used by the
following personnel: (A) Xxxxxx Xxxxxxxx, (B) Xxxxxxx Joidoin and (C)
Xxxxxx Arbole.
(ii) Two computers and two desks used by the following
personnel: (A) Xxxx Xxxxx and (B) Xxxxxxx Xxxxxxx.
(iii) One laptop computer used by Xxxx Xxxxx.
(iv) One Novell Server
(v) One polling PC with software
(vi) One Platinum accounting software
(vii) One Hewlett Packard printer
(e) All of Seller's right, title and interest in and to the following
leases:
(i) Lease of premises at the Berkshire Mall in Holyoke,
Massachusetts;
(ii) Lease of premises at the Berkshire Mall in Lanesborough,
Massachusetts.
(f) All utility, security, lease and other deposits and prepaid
expenses attributable in any way to those leases described in Item (e) above and
attributable to the activities conducted out of those premises described in Item
(e) above.
39
(g) The Seller's right, title and interest in and to the tradename and
service xxxx "Cellular Unlimited."
(h) Any and all rights to those amounts owed to Seller by Xxxxxx Xxxxx
d/b/a Soldi Communications d/b/a Pager Communications (the "SOLDI RECEIVABLES").
2
40
SCHEDULE 1.3
ASSUMED LIABILITIES
"ASSUMED LIABILITIES" shall be transferred to LTC and are as follows:
(a) The liabilities of Seller under the Carrier Agreement and the Pager
Agreement that accrue after the Closing Date, including all chargebacks.
(b) The liabilities of the Seller under the Leases that accrue after
the Closing Date.
(c) Current liabilities on the Seller's balance sheet as of the Closing
Date, other than incurred but unpaid taxes, the current portion of long term
debt, accrued but unpaid interest, notes owed to any Shareholder, unpaid
dividends, annual and other bonuses and legal and other professional fees.
(d) Seller's liabilities under the operating leases set forth under
Item (l) of Schedule 1.1.
(e) The liabilities of the Seller under the Customer Activation
Agreements and the Customer Paging Agreements.
(f) The liabilities relating to the Purchased Assets that accrue after
the Closing Date.
(g) All trade payables of the Seller.
41
SCHEDULE 1.4
EXCLUDED LIABILITIES
"EXCLUDED LIABILITIES" shall not be transferred to LTC and include,
without limitation, the following:
(a) With regard to the Carrier Agreement, the following:
(i) Any and all expenses, obligations or liabilities in
connection with fraudulent activations reported to Carrier by the Seller.
(b) All incurred but unpaid taxes.
(c) Seller's pro rata share of the portions of the rental payments
under the Leases which are based upon a percentage of the Seller's annual 1997
sales ("percentage rent"). For each Lease, such pro rata share shall be equal to
the product of (i) the sum of such percentage rent and (ii) the result of
dividing the number of days elapsed in 1997 prior to the Target Date by 365.
(d) All matters set forth on Schedule 3.9.
(e) All of the Seller's long term liabilities not set forth on Schedule
1.3, including, without limitation, all liabilities in connection with Seller's
Indebtedness to the Bank.
(f) All of the Seller's capitalized lease obligations, other than those
set forth in Item (d) of Schedule 1.3.
(g) All liabilities of the Seller to the Shareholder.
(h) All accrued but unpaid interest
(i) All notes owed by the Seller to any Shareholder.
(j) All unpaid dividends, annual bonuses and legal and other
professional fees incurred by the Seller.
(k) All other liabilities and contingencies of the Seller not set forth
on Schedule 1.3.
42
SCHEDULE 2.3
CALCULATION OF PURCHASE PRICE ADJUSTMENT
1. Definition of Working Capital
The term "Working Capital" shall mean the (i) Company's
current assets LESS (ii) the Company's current liabilities, all
determined in accordance with GAAP. In the event that any Indebtedness,
other liabilities, taxes or other amounts required to be repaid prior
to the Target Date pursuant to Section 5.5(d) and 7.17 shall not have
been so repaid by the Target Date, then, for purposes of calculating
Working Capital as of the Target Date, the Company's current
liabilities shall be increased by all such unpaid amounts. In addition,
the Company's current assets shall not include for purposes of this
calculation the Soldi Receivables set forth under Item (h) of Schedule
1.2. All depreciation and amortization shall accrue at historical
rates. Reserves shall continue to accrue at historic rates.
2. Definitions of Working Capital Shortfall and Working Capital Surplus
The term "Working Capital Shortfall" shall mean the amount by
which the estimated calculation of Working Capital pursuant to SECTION
2.3(A) is less than the Target Working Capital.
The term "Working Capital Surplus" shall mean the amount by
which the estimated calculation of Working Capital pursuant to SECTION
2.3(A) exceeds than the Target Working Capital.
3. Target Working Capital Calculation Procedures
The term "Target Working Capital" means the average monthly Working
Capital of the Company for the 12 months ended July 31, 1997, calculated as of
the last day of each such month, which is $650,000.
43
SCHEDULE 3(F)
APPROVALS
1. To be delivered by the Selling Parties to LTC pursuant to Section 6.12.
44
SCHEDULE 3.9
LIABILITIES
1. To be delivered by the Selling Parties to LTC pursuant to Section 6.12.
45
SECTION 3.10
TITLE MATTERS
SECURED PARTY JURISDICTION DATE FILED FILE NUMBER
CellStar, Ltd. Monroe County, New York September 10, 1997 1997-5765
-----------------------------------------------------------------------------------------
Advanta Business Services State of New York October 30, 1995 217962
Corp.
-----------------------------------------------------------------------------------------
Advanta Business Services Monroe County November 3, 1995 95-7951
Corp.
-----------------------------------------------------------------------------------------
AT&T Capital Leasing State of New York November 6, 1995 223197
-----------------------------------------------------------------------------------------
AT&T Capital Leasing Monroe County November 13, 0000 0000000
-----------------------------------------------------------------------------------------
Pyramid Company of Ithaca State of New York November 15, 1995 230472
-----------------------------------------------------------------------------------------
Pyramid Company of Ithaca Onondaga County January 18, 1996 96-00610
-----------------------------------------------------------------------------------------
Lucent Technologies State of New York August 13, 1996 161587
-----------------------------------------------------------------------------------------
Lucent Technologies Monroe County August 19, 1996 96-6202
-----------------------------------------------------------------------------------------
46
SCHEDULE 3.13
PATENTS, TRADEMARKS, ETC.
1. To be delivered by the Selling Parties to LTC pursuant to Section 6.12.
47
SCHEDULE 3.14
LITIGATION
1. To be delivered by the Selling Parties to LTC pursuant to Section 6.12.
48
SCHEDULE 6.2
ALLOCATION OF PURCHASE PRICE
1. To be delivered by the Selling Parties to LTC pursuant to Section 6.12.
49
EXHIBIT 2.2(B)(II)
FORM OF ESCROW AGREEMENT
50
ESCROW AGREEMENT
This Escrow Agreement, dated as of November __, 1997, is made and
entered into by and between Let's Talk Cellular & Wireless, Inc., a Florida
corporation ("LTC"), Cellular Unlimited Corp., a New York corporation (the
"SELLER"), and Xxxxx X. Xxxxxxxx (Xx. Xxxxxxxx and the Seller, the "SELLING
PARTIES" and each individually, a "SELLING PARTY") and
__________________________ (the "ESCROW AGENT").
RECITALS
LTC and the Selling Parties have entered into that certain Asset
Purchase Agreement (the "PURCHASE AGREEMENT"), dated as of October 31, 1997,
which relates to the acquisition of substantially all of the assets of the
Seller. Capitalized terms used herein without definition shall have the meanings
as set forth in the Purchase Agreement.
The Purchase Agreement requires that certain funds be held in escrow
and the parties desire that _________________________ serve as the Escrow Agent
to hold such funds upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the consummation of the
transactions contemplated by the Purchase Agreement and the mutual covenants and
agreements contained herein, the parties hereto agree as follows:
1. Establishment of Escrow Fund. At the Closing of the Purchase
Agreement, LTC shall deposit with the Escrow Agent by certified check, payable
to the Escrow Agent, or by wire transfer of immediately available funds the sum
of $200,000 (the "Escrow Amount" or the "Escrow Funds"), which the Escrow Agent
shall deposit in an account entitled ________________________________ (the
"Escrow Account").
2. PURPOSE OF THE ESCROW FUNDS. The Escrow Account has been
established to hold the Escrow Amount, which amount represents a portion of the
Purchase Price delivered in connection with the Purchase Agreement, to the
extent necessary, to serve as security for and satisfy adjustments made to the
Purchase Price in favor of LTC pursuant to ARTICLE 2 of the Purchase Agreement,
and as security for and to fund any other amounts owed by any Selling Party to
LTC or under any other agreement contemplated thereby, including, without
limitation, pursuant to ARTICLE 10 of the Purchase Agreement. Notwithstanding
anything contained herein or in the Purchase Agreement, if the Escrow Funds are
insufficient to satisfy the aforementioned obligations, the Selling Parties
shall not be relieved of their liabilities under the Purchase Agreement.
3. INVESTMENT OF ESCROW FUNDS. The cash portion of the Escrow Amount
shall, at the direction of the Seller, only be invested and reinvested in (a)
obligations issued or guaranteed by the United States government (or agencies
thereof) maturing in 30 days or less and (b) certificates of deposit or
repurchase agreements maturing in 30 days or less of domestic United States
banks having capital and surplus of $250,000,000 or more and having a rating of
A or
51
better from Xxxxx'x Investors Service, Inc. and A or better from Standard &
Poor's Corporation. Income from all investments and reinvestments of Escrow
Funds shall be paid upon termination of this Agreement to the parties receiving
the distribution of the Escrow Funds in proportion to the amount of
distributions thereof including any distributions which were made prior to such
termination. For federal income tax purposes, income from all investments and
reinvestments of Escrow Funds shall be recognized by the parties in proportion
to the amount of the distribution of such income.
4. DISBURSEMENTS. Whenever LTC or the Seller shall be entitled to
receive payment pursuant to the Purchase Agreement, including, without
limitation, ARTICLE 2 and ARTICLE 10 thereof, LTC and the Seller shall deliver
Disbursement Instructions (as hereinafter defined) to the Escrow Agent within
five (5) business days of LTC's and the Selling Parties' agreement as to the
amount of such payment. The "DISBURSEMENT INSTRUCTIONS" shall (i) be in writing
and signed by LTC and the Seller, (ii) state the principal amount owed to LTC or
the Seller as determined in accordance with the Purchase Agreement, and (iii)
shall provide wire transfer instructions to the Escrow Agent as to where and to
whom such amount is to be sent. Upon receipt of the Disbursement Instructions,
the Escrow Agent shall within five (5) business days transfer funds from the
Escrow Funds as directed in the Disbursement Instructions.
5. APPOINTMENT OF ESCROW AGENT. LTC and the Selling Parties hereby
appoint _________. as the escrow agent (the "Escrow Agent") under this
Agreement. The Escrow Agent is hereby authorized to take any and all actions
indicated in this Agreement to be taken by the Escrow Agent and all such further
actions consistent herewith as it shall deem necessary or desirable to implement
the provisions hereof. The Escrow Agent represents and warrants to LTC and the
Selling Parties that it has all legal power and authority to act in the manner
contemplated by this Agreement. The Selling Parties and LTC agree that the
authorization and designation of the Escrow Agent under this Section 5 shall be
irrevocable and shall be binding upon their successors and assigns.
6. RESPONSIBILITIES OF ESCROW AGENT. The acceptance by the Escrow
Agent of its duties under this Agreement is subject to the following terms and
conditions, which the parties to this Agreement hereby agree shall govern and
control with respect to the rights, duties, liabilities and immunities of the
Escrow Agent:
(a) The responsibilities of the Escrow Agent hereunder shall
be to act as agent and bailee for LTC and the Selling Parties, to hold the
Escrow Funds in safekeeping, to invest the funds pursuant to the instructions of
the Seller within the guidelines noted herein and to make disposition of the
Escrow Funds as provided herein;
(b) The Escrow Agent acts herein as agent and bailee for LTC
and the Selling Parties only, and does not undertake to construe the meaning of
any contract, agreement or other instrument, or to determine any of the matters
covered by the same. It is expressly understood and agreed that the Escrow Agent
does not assume any of the obligations or duties which LTC or
2
52
the Selling Parties may have under the Purchase Agreement, this Escrow Agreement
or any other agreement, except to hold and dispose of the Escrow Funds as
provided for herein;
(c) The Escrow Agent shall be protected in acting upon any
written notice, request, waiver, consent, receipt or other paper or document
furnished to it, not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and accuracy of any
information contained therein, which it in good faith believes to be genuine and
which is signed or presented to it by a proper person, or upon evidence deemed
by it in good faith to be sufficient; and
(d) So long as LTC or the Selling Parties have any interest
in the Escrow Funds, (i) the Escrow Agent agrees that it will not assert any
right which it may have to setoff, recoupment, reduction or other right with
respect to the Escrow Funds now or hereafter acquired, arising from any
relationship, debt, obligations, liability, credit accommodation or otherwise
that may be owed the Escrow Agent by any of the parties hereto or any party
having an interest in the Escrow Funds, (ii) the Escrow Agent shall provide the
parties hereto with such receipts, account statements, affidavits as they may
from time to time request, and (iii) the Escrow Agent shall not move the Escrow
Funds from the Escrow Account without the written consent of all the parties
hereto in accordance with the terms of this Agreement.
7. INDEMNIFICATION OF ESCROW AGENT. Unless the Escrow Agent
discharges any of its duties under this Escrow Agreement in violation of
specific terms of this Agreement, in a negligent manner or is guilty of willful
misconduct with regard to its duties under this Escrow Agreement, the Escrow
Agent shall not be liable to any person for any action taken or loss suffered by
such person, nor for any mistake of fact, error of judgment, or for any actions
or omissions of any kind. Except with respect to the foregoing liability
exceptions, LTC and the Selling Parties, jointly and severally, shall indemnify
the Escrow Agent and hold it harmless from any and all claims, liabilities,
losses, actions, suits or proceedings, or other expenses, fees, or charges of
any character or nature, public or private, which it may incur or with which it
may be threatened by reason of its acting as Escrow Agent under this Escrow
Agreement, and shall indemnify the Escrow Agent against any and all expenses,
including reasonable attorneys' fees and the cost of defending any action, suit
or proceeding or resisting any claim in such capacity, both at the trial and
appellate levels. The provisions of this paragraph shall survive the termination
of this Escrow Agreement.
8. DISCRETION OF ESCROW AGENT TO FILE AN INTERPLEADER ACTION. In the
event of a dispute as to the proper disposition of Escrow Funds, the Escrow
Agent may hold Escrow Funds until receipt of evidence satisfactory to it that
the dispute has been resolved, and until receipt of notice directing the proper
disposition of the Escrow Funds in accordance with the terms of this Agreement.
If the parties, including the Escrow Agent, are in disagreement about the
interpretation of this Escrow Agreement, or about the rights and obligations or
the propriety of any action contemplated by the Escrow Agent under this Escrow
Agreement, the Escrow Agent may, but shall not be required to, file an action in
interpleader to resolve any disagreement in a court of competent jurisdiction in
New York State. The Escrow Agent shall be indemnified by
3
53
LTC and the Selling Parties, jointly and severally, for all costs and reasonable
attorneys' fees (both trial and appellate) incurred in its capacity as Escrow
Agent in connection with any such interpleader action and shall be fully
protected in suspending all or part of its activities under this Escrow
Agreement until a judgment in the interpleader action is entered and becomes
final.
9. CONSULTATION WITH COUNSEL. The Escrow Agent may consult with
counsel of its own choice and shall have full and complete authorization and
protection to act in accordance with the opinion of such counsel as to any
matters in connection with this Escrow Agreement to the extent that any act or
failure to act undertaken on the advice of counsel is undertaken in good faith
and is not contrary to the specific provisions of this Escrow Agreement. The
Escrow Agent shall be indemnified by the parties hereto for all costs and
reasonable attorneys' fees incurred in connection with such consultation. The
Escrow Agent shall not be liable for any action taken in reliance upon the
advice of counsel and in good faith.
10. RESIGNATION. The Escrow Agent may resign as escrow agent by
giving LTC and the Seller sixty (60) days prior written notice of the effective
date of such resignation. In the case of the Escrow Agent's resignation, its
only duty shall be to hold and dispose of the remaining portion of the Escrow
Amount in accordance with the original provisions of this Escrow Agreement until
a successor escrow agent shall be appointed by LTC and the Seller and a written
notice of the name and address of such successor escrow agent shall be given to
the Escrow Agent by LTC and the Seller, whereupon the Escrow Agent's only duty
shall be to turn over, in accordance with the written instructions of LTC and
the Seller, to the successor escrow agent the remaining portion of the Escrow
Amount. In the event that a successor escrow agent shall not have been appointed
and the Escrow Agent shall not have turned over to the successor escrow agent
the remaining portion of the Escrow Amount within a reasonable time after the
Escrow Agent's delivery of written notice of resignation pursuant to this
SECTION 10, the Escrow Agent may deposit the remaining portion of the Escrow
Amount with the Clerk of the United States District Court for the Western
District of New York or with the clerk or registry of any other court of
competent jurisdiction, at which time the Escrow Agent's duties hereunder shall
terminate.
11. ESCROW AGENT FEES. The Escrow Agent shall be entitled to the
fees set forth in SCHEDULE A hereto. Such fees and all other costs as may be
incurred by the Escrow Agent in connection with the administration of the
provisions of the this Agreement shall be paid one-half by LTC and one-half by
the Selling Parties.
12. AMENDMENT. This Agreement may be amended at any time only by and
upon written agreement of the Escrow Agent, the Seller and LTC.
13. TERMINATION AND DISBURSEMENT OF ESCROW FUNDS. This Agreement may
be terminated at any time by and upon receipt by the Escrow Agent of written
notice of termination signed by both LTC and the Seller. Unless so terminated,
this Agreement shall terminate at 5:00 p.m. after the later of (i) all expenses
required to be paid to the Escrow Agent out of the Escrow Funds, if any, have
been paid, and (ii) the earlier of (A) the date of issuance of LTC's audited
4
54
financial statements for the fiscal year ended July 31, 1998 and (B) October 31,
1998; PROVIDED, that such termination date shall be extended if on such
termination date there is pending any claim by LTC for payment out of the Escrow
Funds until such matter is resolved and payment, if any, is made to LTC from the
Escrow Funds. Upon the termination of this Agreement, LTC and the Selling
Parties agree to execute Disbursement Instructions to the Escrow Agent directing
it to distribute to the Seller the remaining Escrow Funds.
14. MISCELLANEOUS.
(a) NOTICES. All notices, objections and other communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered (return receipt requested) or mailed by certified mail (return receipt
requested) or by Federal Express or another nationally recognized courier
service as follows:
If to LTC, to: Let's Talk Cellular & Wireless, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xx. Xxxx Xxxxxx and Xx. Xxxxx
Xxxxxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxxxxxx Traurig Xxxxxxx
Xxxxxx Xxxxx & Xxxxxxx, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
with a copy to: H.I.G. Capital Management, Inc.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
If to any Selling Party, to: Cellular Unlimited, Inc.
000 Xxxxxx Xxxxx Xxxxx
Xxxxx 0X
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Fax:(000) 000-0000
5
55
with a copy to: Xxxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Attn: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
or at such other place as any party hereto shall furnish to each other party
hereto in writing.
(b) BINDING EFFECT ASSIGNMENT; THIRD PARTY BENEFICIARIES.
Neither party may assign, its rights and obligations hereunder without the
consent of the other parties. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, successors and assigns. This Agreement is not
intended, and shall not create, any third party beneficiaries or rights in any
third parties.
(c) GOVERNING LAW. This Escrow Agreement shall be construed
in accordance with and governed by the laws of the State of New York without
application to the principles of conflicts of laws and shall be binding upon the
parties hereto and their respective successors and assigns.
(d) EFFECT ON PURCHASE AGREEMENT. The provisions of this
Agreement are not intended to alter, modify, negate or replace any provisions of
the Purchase Agreement that may be in conflict with the provisions hereof. In
the event of any conflict or inconsistency between the terms hereof and the
Purchase Agreement, the Purchase Agreement shall control.
(e) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. It shall not be necessary
for every party to sign each counterpart but only that each party shall sign at
least one such counterpart.
* * *
6
56
IN WITNESS WHEREOF, the parties hereto have made and entered into this
Escrow Agreement the day and year first above written.
[ESCROW AGENT]
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
LET'S TALK CELLULAR & WIRELESS, INC.
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
CELLULAR UNLIMITED CORP.
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
--------------------------------------
Xxxxx X. Xxxxxxxx
7
57
SCHEDULE A
ESCROW AGENCY FEE SCHEDULE
Initial Acceptance Fee...................................................................... $_____
For review of the documents and set up of the Escrow Account,
payable upon execution of the Agreement.
Annual Administration Fee................................................................... $_____
For administration of the Escrow Account, payable in advance upon
execution of the Agreement and on each anniversary date thereafter as
long as the Agreement remains in effect.
ACTIVITY FEES
(To the Extent Applicable)
For each wire transfer made................................................................. $_____
For processing checks returned as uncollectible............................................. $_____
For each investment transaction (purchase/sale/collection).................................. $_____
Incidental or Extraordinary Services:
Charges for services of this nature will be based on an analysis of the work to be
provided.
Out-of-Pocket Expense:
The above fees do not include out-of-pocket expenses that include, but
are not limited to, postage, stationery, fees and expenses of counsel,
telephone, messenger, overtime, insurance, etc.
8
58
EXHIBIT 2.4
CONTINGENT NOTE
59
CONTINGENT NOTE
$675,000 November __, 1997
FOR VALUE RECEIVED, Let's Talk Cellular & Wireless, Inc., a Florida
corporation ("Maker" or "LTC"), promises to pay to Cellular Unlimited Corp., a
New York corporation ("Payee"), the principal sum of up to SIX HUNDRED
SEVENTY-FIVE THOUSAND DOLLARS ($675,000), together with interest thereon at the
rates hereinafter provided.
Section 1. INTEREST. Interest shall accrue on the principal amount of
this Note from time to time outstanding at the rate of five percent (5%) per
annum. Interest shall be payable in arrears on each of July 31, 1998, January
31, 1999 and July 31, 1999, based on a three hundred sixty-five (365) day year
for actual number of days elapsed.
Section 2. PAYMENT. The principal amount of this Note shall be due
and payable as follows: $225,000 shall be payable on each of July 31, 1998,
January 31, 1999 and July 31, 1999 if, for the six-month period preceding such
date, the Gross Profit of the Acquired Stores exceeds the Target Gross Profit
for such period, as set forth on Schedule A hereto; provided, that if the Gross
Profit of the Acquired Stores for any such six-month period exceeds 75% of the
Target Gross Profit for such period but does not exceed the Target Gross Profit,
then the principal amount payable for such period shall be equal to the
corresponding percentage of $225,000; and provided further, that the amount of
principal payable on any such date shall be reduced by the aggregate amount of
interest payable on such date.
Section 3. METHOD OF PAYMENT. Payments of principal, interest and
other amounts due hereunder shall be made in lawful money of the United States
of America by (a) in the case of payments of principal, wire transfer of
immediately available funds to the account of Payee in the United States
designated in the records maintained by Maker, and (b) in the case of interest
and any and all other payments, company check to Payee at the address set forth
in Maker's records unless and until Payee provides written notice to Maker to
the contrary.
Section 4. DEFAULT INTEREST. If any installment of interest, or the
principal amount hereof, is not paid within twenty (20) days after the due date
thereof, interest shall accrue on such unpaid amount at a default rate equal to
the lesser of (a) ten percent (10%) per annum or (b) the highest rate permitted
under applicable law, until such amount is paid in full, (the "Default Rate").
Section 5. PREPAYMENT. This Note may be prepaid in whole or in part at
any time without prepayment premium or penalty.
Section 6. DEFAULTS AND REMEDIES.
6.1 EVENTS OF DEFAULT. Any one or more of the following
shall constitute an Event of Default hereunder: (a) default shall be made in the
payment of the principal of this Note when and as the same shall become due and
payable, whether at stated maturity, by
1
60
acceleration, or otherwise after ten (10) days notice of such failure from
Payee; (b) Maker shall fail to pay within fifteen (15) days following the due
date any installment of interest of the principal amount hereof; (c) Maker shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or be generally
unable to pay its debts as such debts become due; (d) an involuntary case or
other proceeding shall be commenced against Maker seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property or an order for
relief shall be entered against Maker under the federal bankruptcy laws or the
laws of the jurisdiction of organization of Maker as now or hereafter in effect,
and such involuntary case or other proceeding or order shall remain undismissed
or unstayed for a period of sixty (60) days, and if stayed, such involuntary
case or other proceeding or order shall not be dismissed upon termination of
such stay; (e) default shall be made in the performance or observance of any
other covenant, agreement or condition contained herein and such default shall
have continued for a period of thirty (30) days after such default shall first
have become known to Maker; or (f) any representation or warranty made by Maker
in this Note or pursuant hereto or in connection with any provision hereof shall
be false or incorrect in any material respect on the date as of which made and
shall not have been cured within thirty (30) days of notice thereof.
6.2 ACCELERATION. If (a) an Event of Default shall occur
pursuant to Sections 6.1(c) or (d), the principal of, and accrued interest on,
and all other amounts due under this Note shall become immediately due and
payable, and (b) any other Event of Default shall occur, the principal of, and
accrued interest on, and all other amounts due under, this Note shall become due
and payable upon notice by Payee to Maker.
6.3 WAIVER OF PRESENTMENT, ETC. Maker hereby waives
presentment, demand, protest or notice of any kind in connection with this Note.
Section 7. DEFINITIONS. The following terms, as used herein, have the
following respective meanings:
"ACQUIRED STORES" means the stores acquired by LTC pursuant to
the Asset Purchase Agreement.
"ASSET PURCHASE AGREEMENT" means that certain
Asset Purchase Agreement dated October 31, 1997 among Maker, Payee and Xxxxx X.
Xxxxxxxx.
"CARRIERS" has the meaning set forth in the Asset Purchase
Agreement.
"CARRIER AGREEMENTS" has the meaning set forth in the Asset
Purchase Agreement.
2
61
INDEBTEDNESS means (a) any obligation for borrowed money, (b)
any obligation owed for all or any part of the purchase price of property or
other assets or for the cost of property or other assets constructed or of
improvements thereto, other than accounts payable included in current
liabilities and incurred in respect of property purchased in the ordinary course
of business, (c) any obligations secured by any lien in respect of property even
though the person owning the property has not assumed or become liable for the
payment of such obligation, (d) any lease obligation capitalized on Maker's
books, (e) any guarantee with respect to Indebtedness (of the kind otherwise
described in this definition) of another person and (f) obligations in respect
of letters of credit, but Indebtedness shall not include the debt represented by
this Note.
Section 8. SET OFF. Maker shall be entitled to set off all amounts
owed by any Selling Party to Maker pursuant to Section 10.3 of the Asset
Purchase Agreement against any payments hereunder owed by Maker to Payee.
Section 9. MISCELLANEOUS.
9.1 NO WAIVER. It is expressly agreed that any waiver by
Payee of any item or provision hereof or of any right, remedy or option under
this Note shall not be controlling, nor shall it prevent or estop Payee from
thereafter enforcing such term, provision, right, remedy or option in any other
instance, and neither the failure or refusal of Payee to insist in any one or
more instances upon the strict performance of this Note, nor the acceptance by
Payee of any payment less than the amount then due hereunder, shall be construed
as a waiver or relinquishment for the future of any such term or provision or
the amount remaining due, but the same shall continue in full force and effect,
it being understood and agreed that Payee's rights, remedies and options under
this Note are and shall be cumulative and are in addition to all of the rights,
remedies and options of Payee in law or in equity, or under any other agreement.
9.2 SAVINGS CLAUSE. If at any time the Interest Rate or
Default Rate, together with all fees and charges, if any, contracted for,
charged, received, taken or reserved by Payee in connection with this Note that
may be treated as interest under applicable law (collectively, the "Charges"),
computed over the full term of this Note, exceeds the maximum lawful rate (the
"Maximum Rate") which may be contracted for, charged, taken, received or
reserved by Payee in accordance with the laws of the State of New York from time
to time in effect, except to the extent federal law permits Payee to contract
for, charge or receive a greater amount of interest, due credit being given for
all charges made in connection with this Note that may be treated as interest
under applicable law, the rate of interest payable hereunder, together with all
Charges, shall be limited to the Maximum Rate; provided, however, that upon any
subsequent increase in the Maximum Rate from time to time, the interest charged
on the unpaid principal amount of this Note shall remain equal to the Maximum
Rate, and any subsequent reduction in the Interest Rate shall not reduce the
rate borne by this Note, until the total amount of interest earned hereunder,
together with all Charges, equals the total amount of interest which would have
accrued at the Interest Rate if the Interest Rate had at all times been in
effect; and provided, further, that if at maturity or final payment of this Note
the total amount of interest paid or accrued under the foregoing provisions is
less than the total amount of interest which would have accrued if the
3
62
Interest Rate had at all times been in effect, Maker agrees to pay Payee, to the
extent allowed by the then applicable law, an amount equal to the difference
between (a) the lesser of (i) the amount of interest which would have been
accrued on this Note if the Maximum Rate had at all times been in effect, and
(ii) the amount of interest which would have accrued if the Interest Rate had at
all times been in effect, and (b) the amount of interest actually accrued in
accordance with the provisions of this Note.
9.3 AMENDMENTS; BINDING EFFECT. This Note may not be changed
or terminated orally. This Note shall be binding upon the successors, permitted
assigns and legal representatives of Maker.
9.4 ASSIGNMENT. Neither Maker nor Payee may assign its
rights under this Note or any interest therein without the prior written consent
of the other party and, until all the Senior Debt (as defined below) shall have
been paid in full and all commitments to extend Senior Debt shall have been
terminated, the Agent (as defined below).
9.5 NOTICES. All notices hereunder shall be in writing
(including prepaid overnight courier, facsimile transmission or similar writing)
and shall be delivered to Payee and Maker at their addresses set forth below (or
at such other addresses as shall be specified by like notice to Payee and
Maker):
Let's Talk Cellular & Wireless, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx,
General Counsel
Tel: (000)000-0000
Fax: (000) 000-0000
Cellular Unlimited Corp.
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 0X
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
All notices shall be deemed given as of the date when such notice is first
delivered by hand or sent by telecopier (receipt confirmed, with a copy
simultaneously mailed registered mail), one day after depositing for delivery,
fee prepaid, with a Federal Express or similar overnight deliver service and
five days after mailing, postage prepaid and properly addressed in the U.S.
mails.
9.6 GOVERNING LAW. This Note shall be governed by, and the
terms and provisions hereof and the rights and duties created hereby shall be
interpreted, construed and enforced in accordance with, the laws of the State of
New York, without giving effect to conflicts of law provisions.
4
63
9.7 WAIVER OF JURY TRIAL. THE MAKER AND PAYEE HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
5
64
IN WITNESS WHEREOF, Maker has caused this Note to be executed and
delivered by its duly authorized officer, as of the day and year and at the
place first above written.
LET'S TALK CELLULAR & WIRELESS, INC.
By:_________________________________
Name:
Title:
6
65
SCHEDULE A
The term "Gross Profit" means a store's total revenues, LESS cost of goods sold.
TARGET GROSS PROFIT
------------------------
SIX-MONTH PERIOD
ENDING
JULY 31, 1998
-------------------------
$375,000
SIX-MONTH PERIOD
ENDING
JANUARY 31, 1999
-------------------------
$825,000
SIX-MONTH PERIOD
ENDING
JULY 31, 1999
-------------------------
$450,000
-------------------------
1. The Target Gross Profit for each of the foregoing periods shall be
proportionately reduced for each Acquired Store that is closed during
the Term.
2. The Acquired Stores shall not include any new stores opened by LTC
after the date hereof for purposes of calculating the principal
payments provided for herein; provided, however, that the Acquired
Stores' total revenues shall include all residual income received by
LTC from Southwestern Xxxx Mobile Systems, Inc. ("SBS") pursuant to
that certain Authorized Agency Agreement dated September 28, 1994 by
and between SBS and Cellular Unlimited Corp. which has been assigned to
LTC on the date hereof.
7
66
EXHIBIT 7.6(A)
FORM OF ASSIGNMENT OF CARRIER AGREEMENT
67
ASSIGNMENT OF CARRIER AGREEMENT
THIS ASSIGNMENT (this "Assignment"), is made as of November __, 1997 by
and between Cellular Unlimited Corp., a New York corporation (the "Seller"),
having its principal offices at 000 Xxxxxx Xxxxx Xxxxx, Xxxxx 0X, Xxxxxxxxx, Xxx
Xxxx 00000 and Let's Talk Cellular & Wireless, Inc., a Florida corporation (the
"Buyer"), having its principal offices at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxx 00000.
WHEREAS, the Seller and the Buyer, have entered into an Asset Purchase
Agreement dated as of October 31, 1997 (the "Acquisition Agreement"; capitalized
terms used herein without further definition are used with the meanings
specified therefore in the Acquisition Agreement);
WHEREAS, pursuant to the Acquisition Agreement, the Seller has agreed
to assign to the Buyer the Carrier Agreement; and
WHEREAS, the Seller and the Buyer desire to execute this Assignment to
further evidence the transfer of the Carrier Agreement by the Seller to the
Buyer;
NOW THEREFORE, for valuable consideration, the receipt of which is
hereby acknowledged, the Seller and the Buyer agree as follows:
The Seller does hereby convey, assign and set over to the Buyer, its
respective successors and assigns, all of the Seller's right, title and interest
in and to the Carrier Agreement by and between the Seller and the Carrier
providing for the provision of radio-telephone service (the "Carrier
Agreement").
The Seller hereby warrants that:
(1) The Seller has not heretofore assigned any of its right, title and
interest in and to the Carrier Agreement;
(2) The Carrier Agreement is in full force and effect.
(3) The Seller is not in default in the performance of any of its
covenants under the Carrier Agreement and no event has
occurred and no condition exists that, with the giving of
notice or the passage of time, or both, would constitute a
default in any material respect, and to its best knowledge, no
event has occurred and no condition exists that, with the
giving of notice or the passage of time, or both, would
constitute a default, under the terms of the Carrier
Agreement.
(4) The Carrier Agreement has not been modified, altered or amended in
any respect, except pursuant to the Carrier Consent.
1
68
(5) Attached hereto is a true and complete copy of the Carrier
Agreement.
By its execution hereof, the Buyer accepts this Assignment, including
all of the terms, conditions and obligations hereof imposed upon the Buyer.
Except as otherwise expressly provided in the Acquisition Agreement or in any of
the other documents executed in connection therewith; the Buyer assumes and
agrees to perform and observe all of the terms, conditions, covenants and
agreements required to be performed or observed by the Seller under the Carrier
Agreement accruing on or after the date hereof.
This Assignment shall be governed by and construed in accordance with
the laws of the State of New York.
2
69
IN WITNESS WHEREOF, the Seller and the Buyer have caused this
Assignment to be duly executed and delivered as of this ____ day of November,
1997.
SELLER:
-------
CELLULAR UNLIMITED CORP.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
BUYER:
------
LET'S TALK CELLULAR & WIRELESS,
INC.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
3
70
EXHIBIT 7.6(b)
FORM OF ASSIGNMENT OF PAGER AGREEMENT
71
ASSIGNMENT OF PAGER AGREEMENT
THIS ASSIGNMENT (this "Assignment"), is made as of November __, 1997 by
and between Cellular Unlimited Corp., a New York corporation (the "Seller"),
having its principal offices at 000 Xxxxxx Xxxxx Xxxxx, Xxxxx 0X, Xxxxxxxxx, Xxx
Xxxx 00000 and Let's Talk Cellular & Wireless, Inc., a Florida corporation (the
"Buyer"), having its principal offices at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxx 00000.
WHEREAS, the Seller and the Buyer, have entered into an Asset Purchase
Agreement dated as of October 31, 1997 (the "Acquisition Agreement"; capitalized
terms used herein without further definition are used with the meanings
specified therefore in the Acquisition Agreement);
WHEREAS, pursuant to the Acquisition Agreement, the Seller has agreed
to assign to the Buyer the Pager Agreement; and
WHEREAS, the Seller and the Buyer desire to execute this Assignment to
further evidence the transfer of the Pager Agreement by the Seller to the Buyer;
NOW THEREFORE, for valuable consideration, the receipt of which is
hereby acknowledged, the Seller and the Buyer agree as follows:
The Seller does hereby convey, assign and set over to the Buyer, its
respective successors and assigns, all of the Seller's right, title and
interest in and to the Pager Agreement by and between the Seller and the Pager
Wholesaler providing for the purchase of pager accounts and/or airtime (the
"Pager Agreement").
The Seller hereby warrants that:
(1) The Seller has not heretofore assigned any of its right, title
and interest in and to the Pager Agreement;
(2) The Pager Agreement is in full force and effect.
(3) The Seller is not in default in the performance of any of its
covenants under the Pager Agreement and no event has occurred
and no condition exists that, with the giving of notice or the
passage of time, or both, would constitute a default in any
material respect, and to its best knowledge, no event has
occurred and no condition exists that, with the giving of
notice or the passage of time, or both, would constitute a
default, under the terms of the Pager Agreement.
(4) The Pager Agreement has not been modified, altered or amended
in any respect.
1
72
(5) Attached hereto is a true and complete copy of the Pager
Agreement.
By its execution hereof, the Buyer accepts this Assignment, including
all of the terms, conditions and obligations hereof imposed upon the Buyer.
Except as otherwise expressly provided in the Acquisition Agreement or in any of
the other documents executed in connection therewith; the Buyer assumes and
agrees to perform and observe all of the terms, conditions, covenants and
agreements required to be performed or observed by the Seller under the Pager
Agreement accruing on or after the date hereof.
This Assignment shall be governed by and construed in accordance with
the laws of the State of New York.
2
73
IN WITNESS WHEREOF, the Seller and the Buyer have caused this
Assignment to be duly executed and delivered as of this ____ day of October,
1997.
SELLER:
-------
CELLULAR UNLIMITED CORP.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
\
BUYER:
------
LET'S TALK CELLULAR & WIRELESS, INC.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
3
74
EXHIBIT 7.6(c)
FORM OF ASSIGNMENT OF LEASE
75
ASSIGNMENT OF LEASE
THIS ASSIGNMENT (this "Assignment"), is made as of November __, 1997 by
and between Cellular Unlimited Corp., a New York corporation (the "Seller"),
having its principal offices at 000 Xxxxxx Xxxxx Xxxxx, Xxxxx 0X, Xxxxxxxxx, Xxx
Xxxx 00000 and Let's Talk Cellular & Wireless, Inc., a Florida corporation (the
"Buyer"), having its principal offices at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxx 00000.
WHEREAS, the Seller and the Buyer, have entered into an Asset Purchase
Agreement dated as of October 31, 1997 (the "Acquisition Agreement"; capitalized
terms used herein without further definition are used with the meanings
specified therefore in the Acquisition Agreement);
WHEREAS, pursuant to the Acquisition Agreement, the Seller has agreed
to assign to the Buyer the Lease; and
WHEREAS, the Seller and the Buyer desire to execute this Assignment to
further evidence the transfer of the Lease by the Seller to the Buyer;
NOW THEREFORE, for valuable consideration, the receipt of which is
hereby acknowledged, the Seller and the Buyer agree as follows:
The Seller does hereby convey, assign and set over to the Buyer, its
respective successors and assigns, all of the Seller's right, title and interest
in and to the Lease Agreement dated as of ______________ by and between
_______________ and ________________ (the "Lease").
The Seller hereby warrants that:
(1) The Seller has good title to the Lease;
(2) The Seller has not heretofore assigned any of its right, title
and interest in and to the Lease;
(3) The Lease is in full force and effect.
(4) To the Seller's Knowledge, the Seller is not in default in the
performance of any of its covenants under the Lease and no
event has occurred and no condition exists that, with the
giving of notice or the passage of time, or both, would
constitute a default in any material respect, and to its best
knowledge, no event has occurred and no condition exists that,
with the giving of notice or the passage of time, or both,
would constitute a default, under the terms of the Lease.
(5) The Lease has not been modified, altered or amended in any
respect.
1
76
(6) To the Seller's Knowledge, the Lessor has no right to
terminate the Lease (other than by reason of default by the
Seller) and, as of the date hereof, no event has occurred that
would give rise to the Lessor's right to terminate the Lease.
(7) The rent presently payable under the terms of the Sublease is
$_________ and has been paid through _______, 1997. No other
rent (except for that due to operating expenses) is payable
under the Lease.
(8) The current term of the Lease expires on _______________.
(9) Funds totaling $_________ have been deposited by the Seller
under the Lease and are assigned to the Buyer hereunder.
By its execution hereof, the Buyer accepts this Assignment, including
all of the terms, conditions and obligations hereof imposed upon the Buyer.
Except as otherwise expressly provided in the Acquisition Agreement or in any of
the other documents executed in connection therewith; the Buyer assumes and
agrees to perform and observe all of the terms, conditions, covenants and
agreements required to be performed or observed by the Seller under the Lease
accruing on or after the date hereof.
This Assignment shall be governed by and construed in accordance with
the laws of the State of New York.
2
77
IN WITNESS WHEREOF, the Seller and the Buyer have caused this
Assignment to be duly executed and delivered as of this ____ day of November,
1997.
SELLER:
-------
CELLULAR UNLIMITED CORP.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
\
BUYER:
------
LET'S TALK CELLULAR & WIRELESS, INC.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
3
78
EXHIBIT 7.6(D)
FORM OF ASSIGNMENT OF CUSTOMER ACTIVATION AGREEMENTS
79
ASSIGNMENT OF CUSTOMER ACTIVATION AGREEMENTS
THIS ASSIGNMENT (this "Assignment"), is made as of November __, 1997 by
and between Cellular Unlimited Corp., a New York corporation (the "Seller"),
having its principal offices at 000 Xxxxxx Xxxxx Xxxxx, Xxxxx 0X, Xxxxxxxxx, Xxx
Xxxx 00000 and Let's Talk Cellular & Wireless, Inc., a Florida corporation (the
"Buyer"), having its principal offices at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxx 00000.
WHEREAS, the Seller and the Buyer, have entered into an Asset Purchase
Agreement dated as of October 31, 1997 (the "Acquisition Agreement"; capitalized
terms used herein without further definition are used with the meanings
specified therefore in the Acquisition Agreement);
WHEREAS, pursuant to the Acquisition Agreement, the Seller has agreed
to assign to the Buyer each Customer Activation Agreement; and
WHEREAS, the Seller and the Buyer desire to execute this Assignment to
further evidence the transfer of each Customer Activation Agreement by the
Seller to the Buyer;
NOW THEREFORE, for valuable consideration, the receipt of which is
hereby acknowledged, the Seller and the Buyer agree as follows:
The Seller does hereby convey, assign and set over to the Buyer, its
respective successors and assigns, all of the Seller's right, title and interest
in and to each Customer Activation Agreement in existence and effect as of the
Closing Date by and between the Seller and each customer providing for the
activation of radio-telephone service in connection with the Carrier Agreement
(each, a "Customer Activation Agreement" and collectively, the "Customer
Activation Agreements").
The Seller hereby warrants that:
(1) The Seller has not heretofore assigned any of its right, title
and interest in and to any Customer Activation Agreement;
(2) Each Customer Activation Agreement is in full force and
effect.
(3) The Seller is not in default in the performance of any of its
covenants under any Customer Activation Agreement and no event
has occurred and no condition exists that, with the giving of
notice or the passage of time, or both, would constitute a
default in any material respect, and to its best knowledge, no
event has occurred and no condition exists that, with the
giving of notice or the passage of time, or both, would
constitute a default, under the terms of any Customer
Activation Agreement.
1
80
(4) No Customer Activation Agreement has been modified, altered or
amended in any respect.
By its execution hereof, the Buyer accepts this Assignment, including
all of the terms, conditions and obligations hereof imposed upon the Buyer.
Except as otherwise expressly provided in the Acquisition Agreement or in any of
the other documents executed in connection therewith; the Buyer assumes and
agrees to perform and observe all of the terms, conditions, covenants and
agreements required to be performed or observed by the Seller under the Customer
Activation Agreements accruing on or after the date hereof.
This Assignment shall be governed by and construed in accordance with
the laws of the State of New York.
2
81
IN WITNESS WHEREOF, the Seller and the Buyer have caused this
Assignment to be duly executed and delivered as of this ____ day of November,
1997.
SELLER:
-------
CELLULAR UNLIMITED CORP.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
BUYER:
------
LET'S TALK CELLULAR & WIRELESS, INC.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
3
82
EXHIBIT 7.6(e)
FORM OF ASSIGNMENT OF CUSTOMER PAGER AGREEMENTS
83
ASSIGNMENT OF CUSTOMER PAGER AGREEMENTS
THIS ASSIGNMENT (this "Assignment"), made as of November __, 1997 by
and between Cellular Unlimited Corp., a New York corporation (the "Seller"),
having its principal offices at 000 Xxxxxx Xxxxx Xxxxx, Xxxxx 0X, Xxxxxxxxx, Xxx
Xxxx 00000 and Let's Talk Cellular & Wireless, Inc., a Florida corporation (the
"Buyer"), having its principal offices at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxx 00000.
WHEREAS, the Seller and the Buyer, have entered into an Asset Purchase
Agreement dated as of October 31, 1997 (the "Acquisition Agreement"; capitalized
terms used herein without further definition are used with the meanings
specified therefore in the Acquisition Agreement);
WHEREAS, pursuant to the Acquisition Agreement, the Seller has agreed
to assign to the Buyer each Customer Pager Agreement; and
WHEREAS, the Seller and the Buyer desire to execute this Assignment to
further evidence the transfer of each Customer Pager Agreement by the Seller to
the Buyer;
NOW THEREFORE, for valuable consideration, the receipt of which is
hereby acknowledged, the Seller and the Buyer agree as follows:
The Seller does hereby convey, assign and set over to the Buyer, its
respective successors and assigns, all of the Seller's right, title and interest
in and to each Customer Pager Agreement in existence and effect as of the
Closing Date by and between the Seller and each customer providing for the
provision of pager service in connection with the Pager Agreement (each, a
"Customer Pager Agreement" and collectively, the "Customer Pager Agreements").
The Seller hereby warrants that:
(1) The Seller has not heretofore assigned any of its right, title
and interest in and to any Customer Pager Agreement;
(2) Each Customer Pager Agreement is in full force and effect.
(3) The Seller is not in default in the performance of any of its
covenants under any Customer Pager Agreement and no event has
occurred and no condition exists that, with the giving of
notice or the passage of time, or both, would constitute a
default in any material respect, and to its best knowledge, no
event has occurred and no condition exists that, with the
giving of notice or the passage of time, or both, would
constitute a default, under the terms of any Customer Pager
Agreement.
1
84
(4) No Customer Pager Agreement has been modified, altered or
amended in any respect, except pursuant to the Pager Wholesale
Consent.
By its execution hereof, the Buyer accepts this Assignment, including
all of the terms, conditions and obligations hereof imposed upon the Buyer.
Except as otherwise expressly provided in the Acquisition Agreement or in any of
the other documents executed in connection therewith; the Buyer assumes and
agrees to perform and observe all of the terms, conditions, covenants and
agreements required to be performed or observed by the Seller under the Customer
Pager Agreements accruing on or after the date hereof.
This Assignment shall be governed by and construed in accordance with
the laws of the State of New York.
2
85
IN WITNESS WHEREOF, the Seller and the Buyer have caused this
Assignment to be duly executed and delivered as of this ____ day of November,
1997.
SELLER:
-------
CELLULAR UNLIMITED CORP.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
\
BUYER:
------
LET'S TALK CELLULAR & WIRELESS, INC.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
3
86
EXHIBIT 7.6(F)
FORM OF ASSIGNMENT FOR OTHER AGREEMENTS
1. To be agreed by the parties for any other agreements that are required to
be assigned at closing.
87
EXHIBIT 7.7
FORM OF XXXX OF SALE
88
XXXX OF SALE
THIS XXXX OF SALE effective as of __________ __, 1997, from CELLULAR
UNLIMITED CORP., a New York corporation ("SELLER"), to LET'S TALK CEULLULAR &
WIRELESS, INC., a Florida corporation ("BUYER").
KNOW ALL MEN BY THESE PRESENTS, that pursuant to that certain Asset
Purchase Agreement dated October 31, 1997, among BUYER, SELLER, and Xxxxx X.
Xxxxxxxx (the "Asset Purchase Agreement") and in consideration of the payment of
the Purchase Price (as defined in the Asset Purchase Agreement), the assumption
by BUYER of certain of the liabilities, obligations and commitments of SELLER,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, SELLER hereby grants, conveys, assigns, transfers
and delivers to BUYER, its successors and assigns, all of SELLER's right, title,
interest and benefit in and to the Purchased Assets (as defined in the Asset
Purchase Agreement), free and clear of any and all liabilities, liens,
encumbrances, mortgages, security interests, pledges, restrictions and claims of
any kind or nature, contingent or otherwise, except as expressly provided in
that certain Asset Purchase Agreement of even date herewith.
This Xxxx of Sale is subject to the terms and conditions of the Asset
Purchase Agreement and the transactions contemplated thereby.
All of the terms and provisions of this Xxxx of Sale shall be binding
upon SELLER and its successors and assigns and shall inure to the benefit of
BUYER and its successors and assigns.
IN WITNESS WHEREOF, SELLER has caused this Xxxx of Sale to be signed in
its name by its officer thereunto duly authorized as of the date first above
written.
CELLULAR UNLIMITED CORP.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
1
89
EXHIBIT 7.8
FORM OF PAY-OFF LETTER
90
[Letterhead of Creditor]
______ ___, 1997
Let's Talk Cellular & Wireless, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
PAY-OFF LETTER
Ladies and Gentlemen:
The undersigned, ___________________________ ("Lender"), in connection
with that certain Credit Agreement dated as of _____________, as amended from
time to time (the "Credit Agreement"), by and between Lender and Cellular
Unlimited Corp. (the "Company"), and related agreements, including, without
limitation, [list any other related agreements, including security agreements or
mortgages, if any], has been advised by the Company that Let's Talk Cellular &
Wireless, Inc. ("LTC") will acquire substantially all of the assets of the
Company (the "Acquisition"). It is the understanding of Lender that a portion of
the proceeds of said Acquisition will be used to repay the total indebtedness of
the Company to Lender.
Lender agrees to provide to the Company, by facsimile, prior to 5:00
p.m. (Eastern Time) on the business day immediately preceding the date of the
closing of the Acquisition, the total amount due to Lender under the Credit
Agreement, including, without limitation, principal, accrued interest, fees and
expenses.
In consideration of the payment in full of the Company's indebtedness
to Lender under the Credit Agreement, Lender hereby (i) acknowledges and agrees
that payment of the above amount will constitute satisfaction in full of the
Company's indebtedness and obligations to Lender under the Credit Agreement and
the related agreements referred to above and a full release of all liens and
security interests with respect thereto, (ii) represents that it has no other
credit arrangements with, loans outstanding to, guarantee by, or interests or
liens against the Company or any of the Company's property arising, (iii)
concurrently with such payment and delivery, authorizes the filing and/or
recordation of the UCC-3 termination statements and releases attached hereto,
and (iv) agrees that it will deliver to LTC all promissory notes evidencing the
Company's indebtedness to Lender and all other UCC-3 termination statements,
releases, or such other agreements as LTC may reasonably request in connection
with the Lender's above described release of the security interests and liens.
Very truly yours,
By:
--------------------------------------
Name:
---------------------------------
Title:
---------------------------------
1
91
NOTICE OF REPAMENT OF EXISTING DEBT
AND RELEASD OF SECURITY INTEREST
1. _________________________ ("______") hereby acknowledges the receipt
of a wire transfer in immediately available funds in the amount of
$_____________ from _____________________________, a _________ corporation (the
"Company"), representing payment in full of all outstanding principal of,
premium, if any and accrued interest on, and all other obligations, now due and
owing, of the Company under the Credit Agreement dated ________________ between
the Company and ____, as amended (the "_______ Credit Agreement").
2. ______ hereby terminates and releases the liens on and security
interests in any and all collateral, consisting of certain of its assets,
granted by the Company to secure its obligations under the ______ Credit
Agreement, including all liens and security interests granted by the Company
pursuant to [list security agreements or mortgages, if any], and ______ hereby
acknowledges that it neither has, nor shall, as amended assert, any further
security interest or other interest in, or lien on, any assets of the Company
pursuant to the ______ Credit Agreement or the documents related thereto.
Dated: _______ __, 1997
-----------------------------------
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
2
92
EXHIBIT 7.11
FORM OF LICENSE AGREEMENT
1. To be agreed by the parties prior to closing.
93
EXHIBIT 17.14
FORM OF EMPLOYMENT AGREEMENT
94
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the __ day of November,
1997, by and between Let's Talk Cellular & Wireless, Inc., a Florida corporation
(the "CORPORATION"), and Xx. Xxxxx X. Xxxxxxxx, an individual residing at 0000
Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "EXECUTIVE").
WITNESSETH THAT:
WHEREAS, the Corporation desires to employ the Executive in the
capacity hereinafter stated, and the Executive desires to enter into the employ
of the Corporation in such capacity for the period and on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, it is hereby covenanted and agreed by the Corporation and the
Executive as follows:
1. EMPLOYMENT PERIOD. The Corporation hereby agrees to employ the
Executive as its Regional Manager for Cellular Unlimited stores (the "CELLULAR
UNLIMITED REGIONAL MANAGER"), and the Executive, in such capacity, agrees to
provide services to the Corporation for the period beginning on the date first
above written (the "COMMENCEMENT DATE") and ending on the date 18 months after
the Commencement Date (the "EMPLOYMENT PERIOD").
2. PERFORMANCE OF DUTIES. The Executive agrees that during the
Employment Period, while he is employed by the Corporation, he shall devote
approximately 75% of his normal working week exclusively to serving in the
capacity of Cellular Unlimited Regional Manager in the best interests of the
Corporation, and to perform the duties assigned to him by the Board of Directors
faithfully, efficiently and in a professional manner.
3. COMPENSATION. Subject to the terms and conditions of this Agreement,
during the Employment Period, the Executive shall be compensated by the
Corporation for his services as follows:
(a) He shall receive, for each one-month period beginning on the
Commencement Date and each anniversary thereof, a rate of
salary which is not less than $7,000 per month, payable in
monthly or more frequent installments. During the Employment
Period the Executive's salary rate shall be reviewed by the
Board on or before each annual anniversary of the Commencement
Date to determine whether an increase in his rate of
compensation is appropriate.
1
95
(b) He shall be eligible to receive incentive compensation
payments which, in the aggregate, are not less than the
highest such payments provided to any other regional manager
of the Corporation with comparable responsibilities.
(c) He shall be a participant in the benefit plans maintained by
the Corporation on the same terms and conditions as other
district/regional managers of the Corporation with comparable
responsibilities.
(d) He shall be entitled to receive the following perquisites:
(i) The use of that certain GMC Suburban owned by the
Company.
(e) He shall be reimbursed by the Company for all reasonable
business, promotional, travel and entertainment expenses
incurred or paid by him during the Employment Period in the
performance of his services under this Agreement provided that
the Executive furnishes to the Company appropriate
documentation in a timely fashion required by the Internal
Revenue Code in connection with such expenses and shall
furnish such other documentation and accounting as the Company
may from time to time reasonably request.
4. COMPENSATION DUE UPON TERMINATION. Except as otherwise provided
under the executive benefit plans maintained by the Corporation in which the
Executive participates in accordance with subparagraph 3(c), the Executive's
right to compensation for periods after the date his employment with the
Corporation terminates shall be determined in accordance with the following:
(a) DISCHARGE WITHOUT CAUSE. The Corporation may terminate the
Executive's employment under this Agreement at any time after
the first anniversary of the Commencement Date without cause
for any reason whatsoever. Upon such termination, the
Executive shall receive from the Corporation:
(i) all payment of his salary (without regard to any
increases in such amount) in accordance with the
provisions of subparagraph 3(a) for the remainder of
the Employment Period; and
(ii) payment of any incentive compensation payments that
otherwise would have been payable to the Executive
under subparagraph 3(b) through the date his
employment with the Corporation terminates.
(b) VOLUNTARY RESIGNATION. The Corporation shall have no
obligation to make payments to the Executive in accordance
with the provisions of paragraph 3 for periods after the date
on which the Executive's employment with the Corporation
terminates due to the Executive's voluntary resignation.
2
96
For purposes of this paragraph 4, the Executive's termination
of employment with the Corporation shall not be on account of
his voluntary resignation if he resigns following the
occurrence of one of the following events:
(i) a significant change in the nature or scope of his
authority or duties from those described in paragraph
2 above, a breach of any of the provisions of
paragraph 3, or the breach by the Corporation of any
other provisions of this Agreement; or
(ii) the relocation of the Executive's office to a
location which is more than 50 miles from the
location of his office immediately prior to the first
day of the Employment Period.
(c) DISCHARGE FOR CAUSE. The Corporation shall have no obligation
to make payments to the Executive in accordance with the
provisions of paragraph 3 for periods after the Executive's
employment with the Corporation is terminated on account of
the Executive's discharge for cause. For purposes of this
subparagraph 4(c), the Executive shall be considered
discharged for "cause" if he is discharged by the Corporation
on account of the occurrence of one or more of the following
events:
(i) the Executive becomes habitually addicted to drugs or
alcohol;
(ii) the Executive discloses confidential information in
violation of paragraph 6;
(iii) the Executive engages in competition in violation of
paragraph 7.
(iv) the Corporation is directed by regulatory or
governmental authorities to terminate the employment
of the Executive or the Executive engages in
activities that cause actions to be taken by
regulatory or governmental authorities that have a
material adverse effect on the Corporation;
(v) the Executive is convicted of a felony (other than a
felony resulting from a traffic violation);
(vi) the Executive flagrantly disregards his duties under
this Agreement after (A) notice has been given to the
Executive by the Board of Directors of the
Corporation that it views the Executive to be
flagrantly disregarding his duties under this
Agreement and (B) the Executive has been given a
period of 10 days after such notice to cure such
misconduct (provided that no such notice or cure
period shall be required if Executive's disregard of
his duties has materially and adversely affected the
Corporation);
3
97
(vii) any event of egregious misconduct involving serious
moral turpitude to the extent that, in the reasonable
judgment of the Board of Directors, the Executive's
credibility and reputation no longer conform to the
standard of the Corporation's executives; or
(viii) the Executive commits an act of fraud against the
Corporation or violates a duty of loyalty to the
Corporation.
(d) DISABILITY. The Corporation shall have no obligation to make
payments to the Executive in accordance with the provisions of
paragraph 3 for periods after the date the Executive's
employment with the Corporation terminates on account of
disability. For purposes of this subparagraph 4(d),
determination of whether the Executive is disabled shall be
determined in accordance with the Corporation's long term
disability plan.
(e) DEATH. The Corporation shall have no obligation to make
payments to the Executive in accordance with the provisions of
paragraph 3 for periods after the date of the Executive's
death.
5. TAX LIMITATIONS. If any payments under this Agreement, after taking
into account all other payments to which the Executive is entitled from the
Corporation, or any affiliate thereof, are more likely than not to result in a
loss of a deduction to the Corporation by reason of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), or any successor provision to
that section, such payments shall be reduced by the least amount required to
avoid such loss of deduction. If the Executive and the Corporation shall
disagree as to whether a payment under this Agreement is more likely than not to
result in the loss of a deduction, the matter shall be resolved by a written
opinion of tax counsel chosen by the Corporation's independent auditors. The
Corporation shall pay the fees and expenses of such counsel, and shall make
available such information as may be reasonably requested by such counsel to
prepare the opinion. If, by reason of the limitations of this paragraph 5, the
maximum amount payable to the Executive under subparagraph 4(a) above cannot be
determined prior to the due date of payment, the Corporation shall pay on such
due date the minimum amount which it in good faith determines to be payable and
shall pay the difference, with interest calculated at the rate prescribed by
section 1274(b)(2)(B) of the Code, as soon as such difference is determined in
accordance with this paragraph 5; provided, however, that the Corporation shall
used its best efforts to determine the amount of the difference within six
months after the due date for such payment.
6. CONFIDENTIAL INFORMATION. Except as may be required by the lawful
order of a court or agency of competent jurisdiction, the Executive agrees to
keep secret and confidential indefinitely all non-public information concerning
the Corporation and its affiliates which was acquired by or disclosed to the
Executive during the course of his employment by the Corporation, any of its
affiliates, including information relating to customers (including, without
limitation, credit history, repayment history, financial information and
financial statements),
4
98
costs, and operations, financial data and plans, whether past, current or
planned and not to disclose the same, either directly or indirectly, to any
other person, firm or business entity, or to use it in any way; provided,
however, that the provisions of this paragraph 6 shall not apply to information
which is in the public domain or that was disclosed to the Executive by
independent third parties who were not bound by an obligation of
confidentiality; and provided further, that the Corporation recognizes that the
Executive shall, during the course of his employment with the Corporation,
acquire certain general information regarding the financial condition, and
borrowing trends of the Corporation's customers and agrees that the provisions
of this paragraph 6 shall not apply to the use of such general information
provided the use thereof does not violate applicable Federal or state laws or
the provisions of paragraph 7 hereof. The Executive further agrees that he will
not make any statement or disclosure which would be prohibited by applicable
Federal or state laws and, during the Employment Period while he is employed by
the Corporation, he will not make any statement or disclosure which is intended
or reasonably likely to be detrimental to the Corporation or any of its
subsidiaries or affiliates.
7. NON-COMPETITION. The Executive agrees that for the period (the
"NON-COMPETITION PERIOD") commencing on the Commencement Date and ending on the
second anniversary of the date on which the Executive's employment with the
Corporation is terminated, he will not serve as or be a consultant to or
employee, officer, agent, director or owner of more than three percent (3%) of
another corporation, partnership or other entity which competes with the
Corporation within the States of New York or Connecticut in the Corporation's
Business. The term "Corporation's Business" shall mean the business of selling
cellular or wireless communications services or products, including without
limitation, paging, PCS, ESMR and any other form of personal communications
services. Notwithstanding the foregoing, the parties acknowledge and agree that
the following activities of the Executive shall NOT constitute a violation of
this Section 7: Activities of the Executive, whether on behalf of Cellular
Unlimited USA, Inc. (the "Subsidiary") or his own account, relating to the
ownership and/or operation of the Subsidiary's retail stores not located in the
States of New York or Connecticut, out of which cellular or wireless
communications services or products, including paging, PCS and ESMR, are sold,
including but not limited to advertising and marketing such stores in
advertising markets which may include portions of the States of New York and
Connecticut and the selling of such services or products out of such stores to
New York State or Connecticut residents, citizens and/or entities. The Executive
further agrees that for the period commencing on the Commencement Date and
ending on the second anniversary of the date on which the Executive's employment
with the Corporation under this Agreement is terminated (the "NONSOLICITATION
PERIOD"), he (i) will not (x) solicit for employment, (y) endeavor in any way to
entice away from employment with the Corporation or any of its affiliates or (z)
employ or contract with any employee of the Corporation or any of its affiliates
who is an officer, a manager of any department, salesperson or knowingly take
any such action with respect to any sub-agent, sub-contractor or other
independent contractor of the Corporation or any of its affiliates, including,
without limitation, any resellers of cellular or wireless communications
services and (ii) will not solicit any person, corporation, partnership or other
entity that was a customer of the Cellular Unlimited, Inc. immediately prior to
the closing of its sale to the Corporation for the purpose of selling cellular
or wireless communications services or products. The parties hereto acknowledge
5
99
and agree that the covenants provided for in this Section 7 are reasonable and
necessary in terms of time, area and line of business to protect the
Corporation's legitimate business interests in protecting its trade secrets. The
Executive further acknowledges and agrees that such covenants are reasonable and
necessary in terms of time, area and line of business to protect the
Corporation's other legitimate business interests, which include its interests
in protecting its (x) valuable confidential business information, (y)
substantial relationships with specific customers throughout the States of New
York and Connecticut and (z) customer goodwill associated with its ongoing
business by way of its marketing throughout the States of New York and
Connecticut using the trademark, "Let's Talk Cellular & Wireless." The Executive
hereby expressly authorizes the enforcement of the covenants provided for in
this Section 7 by (x) the Corporation, (y) any affiliate of the Corporation and
(z) any successors to the business of the Corporation or any of its affiliates.
To the extent that the covenant provided for in this Section 7 may later be
deemed by a court to be too broad to be enforced with respect to its duration or
with respect to any particular activity or geographic area, the court making
such determination shall have the power to reduce the duration or scope of the
provision, and to add or delete specific words or phrases to or from the
provision. The provision as modified shall then be enforced.
8. SUCCESSORS. This Agreement shall be binding on, and inure to the
benefit of, the Corporation and its successors and assigns and any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Corporation's assets and business.
9. NONALIENATION. The interests of the Executive under this Agreement
are not subject to the claims of his creditors, other than the Corporation, and
may not otherwise be voluntarily or involuntarily assigned, alienated or
encumbered except to the Executive's estate upon his death.
10. REMEDIES. The Executive acknowledges that the Corporation would be
irreparably injured by a violation of paragraphs 6 or 7, and agrees that the
Corporation shall be entitled to an injunction restraining the Executive from
any actual or threatened breach of paragraph 6 or 7, or to any other appropriate
equitable remedy without bond or other security being required. The Executive
understands and acknowledges that his failure to provide services to the
Corporation in accordance with the terms of this Agreement will result in
financial injury to the Corporation, and the Corporation will be entitled to
damages for any such failure arising from reasons entirely or partly within the
Executive's control.
11. WAIVER OF BREACH. The waiver by either the Corporation or the
Executive of a breach of any provision of this Agreement shall not operate as or
be deemed a waiver of any subsequent breach by either the Corporation or the
Executive.
12. NOTICE. Any notice to be given hereunder by a party hereto shall be
in writing and shall be deemed to have been given when received or, when
deposited in the U.S. mail, certified or registered mail, postage prepaid:
6
100
If to the Corporation, to: Let's Talk Cellular & Wireless, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xx. Xxxx Xxxxxx and Xx. Xxxxx
Xxxxxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxxxxxx Traurig Xxxxxxx Xxxxxx Xxxxx &
Quentel, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
with a copy to: H.I.G. Capital Management, Inc.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
If to the Executive, to: Cellular Unlimited Corp.
000 Xxxxxx Xxxxx Xxxxx
Xxxxx 0X
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Fax:(000) 000-0000
with a copy to: Xxxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Attn: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
provided, however, that if either party shall have designated a different
address by notice to the other as provided herein, then to the last address so
designated.
13. AMENDMENT. This Agreement may be amended or cancelled by mutual
agreement of the parties in writing without the consent of any other person and
no person, other than the parties thereto (and the Executive's estate upon his
death), shall have any rights under or interest in this Agreement or the subject
matter hereof.
14. APPLICABLE LAW. The provisions of this Agreement shall be construed
in accordance with the internal laws of the State of New York.
7
101
15. TERMINATION. All of the provisions of this Agreement shall
terminate after the expiration of the Employment Period, except that paragraph 6
shall only terminate upon the expiration of the Confidentiality Period and
paragraph 7 shall terminate upon the expiration of the Non-competition Period.
* * *
8
102
IN WITNESS WHEREOF, the Executive and the Corporation have executed
this Employment Agreement as of the day and year first above written.
LET'S TALK CELLULAR & WIRELESS, INC.
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
--------------------------------------
Xxxxx X. Xxxxxxxx
9
103
EXHIBIT 7.16
FORM OF ESTOPPEL LETTER
104
ESTOPPEL LETTER
This Estoppel Letter (this "AGREEMENT") dated as of November ___, 1997,
by and between ___________________________, whose address is
_____________________________ ("LANDLORD"), Cellular Unlimited Corp., a New York
corporation ("TENANT").
WHEREAS, the Tenant has by a written lease dated ____________________,
19__ (as amended from time to time hereinafter called the "LEASE") leased from
the Landlord all or part of certain real estate and improvements thereon located
on the property more particularly described in EXHIBIT A hereto (the
"PREMISES");
WHEREAS, Let's Talk Cellular & Wireless, Inc., a Florida corporation
("LTC") intends to acquire all of the assets of the Tenant (the "ACQUISITION")
and desires to have the Lease assigned to it prior to the consummation of the
Acquisition;
WHEREAS, LTC and the Tenant desire to obtain the consent of the
Landlord to facilitate the consummation of the Acquisition.
NOW, THEREFORE, in consideration of the premises hereof and mutual
promises and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. CONSENT TO ACQUISITION. The Landlord hereby acknowledges and agrees
that (a) LTC may acquire the assets of the Tenant and such Acquisition does not
constitute a breach of, or default under, or modify the terms of, the Lease and,
to the extent the Lease contains any provision to the contrary, such provisions
are hereby waived with respect to the Acquisition, and (b) the Tenant may assign
the Lease to the Purchaser.
2. ACKNOWLEDGMENT OF SECURITY INTEREST. The Landlord acknowledges that
LTC and/or Tenant has or will execute and deliver a security agreement (the
"SECURITY AGREEMENT") in favor of their lenders on the Lease and (a) all
property, including, without limitation, trade fixtures, equipment and inventory
located on or used in connection with the Premises by the Tenant, and (b)
operating licenses and permits now or at any time hereafter relating to the use
of the Premises (all such property being collectively referred to as the
"Collateral") and the Landlord agrees that the execution, delivery and
performance of the Security Agreement by LTC and its lenders do not constitute a
breach of, or default under, or modify the terms of, the Lease.
3. NO DEFAULTS. The Landlord acknowledges and agrees that there are no
existing defaults under the Lease on the part of the Landlord and the Tenant,
and the Tenant has performed all covenants required of the Tenant under the
terms of the Lease prior to the date hereof.
1
105
4. RENT. The Landlord acknowledges and agrees that the Tenant has paid
all rent through the last day of the whole calendar month ending prior to the
date hereof.
5. NOTICES. Any notice(s) required or desired to be given hereunder (a)
to the Landlord shall be in writing directed to_______________________________,
Attention:_____________________, and (b) to LTC shall be directed to Let's Talk
Cellular & Wireless, Inc., 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000,
Attention: Xxxxxxx Xxxxxxxxx, General Counsel. All notices hereunder shall be
sent by prepaid certified or registered mail, return receipt requested, or
delivered to a regularly scheduled overnight delivery carrier with delivery fees
either prepaid or an arrangement, satisfactory with such carrier, made for the
payment of such fees.
6. AMENDMENTS; NOTICE OF ASSIGNMENT OF INTERESTS. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors or assigns. The Lenders shall promptly notify the Landlord, in the
event that the Lenders shall assign their right, title and interest in or under
the Security Agreement to any third person. The Landlord shall promptly notify
the Lenders in the event that the Landlord shall assign or encumber its interest
in the Premises or under the Lease.
7. TENANT'S OBLIGATIONS. THIS AGREEMENT SHALL NOT IMPAIR OR OTHERWISE
AFFECT TENANT'S OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS PAYABLE BY TENANT OR
TO OTHERWISE PERFORM ITS OBLIGATIONS TO THE LANDLORD PURSUANT TO THE TERMS OF
THE LEASE.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
[LANDLORD]
By:
------------------------------
Title:
---------------------------
CELLULAR UNLIMITED CORP.
By:
------------------------------
Title:
---------------------------
2
106
STATE OF _________________ )
) SS
COUNTY OF ________________ )
On this ____ day of __________________, 199_, before me, the
undersigned, a Notary Public in and for the __________________________,
personally appeared _________________ _________________________, to me
personally known, who, being by me duly sworn, did say that he is the
_____________________________ of said corporation executing the within and
foregoing instrument; that (no seal has been procured by the said) (the seal
affixed thereto is the seal of said) corporation; that said instrument was
signed (and sealed) on behalf of said corporation by authority of its Board of
Directors; and that the said ________________ _______________________________ as
such officer acknowledged the execution of said instrument to be the voluntary
act and deed of said corporation, by it and by him voluntarily executed.
------------------------------------
Notary Public in and for the
------------------------------------
3
