Exhibit 10.1
MIAMI ASSET PURCHASE AGREEMENT
by and among
TELETRAC, INC.
TELETRAC LICENSE, INC.
and
ITURAN U.S.A., INC.
ITURAN LOCATION AND CONTROL LTD.
Dated as of January 1, 2000
TABLE OF CONTENTS
I. SALE AND TRANSFER OF MIAMI ASSETS.....................................5
SECTION 1.01. Sale of Assets............................................5
SECTION 1.02. Nonassignable Contracts...................................6
SECTION 1.03. Certain FCC Licenses......................................6
SECTION 1.04. Instruments of Conveyance and Transfer....................6
SECTION 1.05 Rights of Sellers to Conduct Business.....................7
II. LIABILITIES...........................................................7
SECTION 2.01. Liabilities...............................................7
III. BANKRUPTCY COURT ORDER FOR ASSUMPTION OF THIS AGREEMENT...............8
SECTION 3.01. Order.....................................................8
SECTION 3.02. Conditions to Closing.....................................8
IV. CLOSING, PURCHASE PRICE, LIABILITIES, ETC.............................9
SECTION 4.01. Closing...................................................9
SECTION 4.02. Purchase Consideration....................................9
V. REPRESENTATIONS AND WARRANTIES........................................9
SECTION 5.01. Representations and Warranties of the Sellers............10
SECTION 5.02. Organization, Power; Capacity............................10
SECTION 5.03. Authorization of Agreements..............................10
SECTION 5.04. Title to Properties, Absence of Liens and Encumbrances...10
SECTION 5.05. Effect of Agreements.....................................11
SECTION 5.06. Licenses.................................................11
SECTION 5.07. Condition and Operation of Assets........................11
SECTION 5.08. Contracts................................................12
SECTION 5.09. Compliance with Laws; Required Consents..................12
SECTION 5.10. Insurance................................................12
SECTION 5.11. Radio Waves..............................................12
SECTION 5.12. Broker's or Finder's Fees................................12
SECTION 5.13. Customer Contracts.......................................13
SECTION 5.15. Miami Business...........................................13
SECTION 5.16. No Additional Warranties.................................13
SECTION 5.17. Representations and Warranties of the Buyer..............13
SECTION 5.18. Organization, Corporate Power, Etc.......................13
SECTION 5.19. Authorization of Agreements..............................14
SECTION 5.20. Effect of Agreements.....................................14
SECTION 5.21. Broker's or Finder's Fees................................14
VI. CONDUCT PRIOR TO THE CLOSING.........................................15
SECTION 6.01. Investigation by Buyer...................................15
SECTION 6.02. Ongoing Operations.......................................15
SECTION 6.03. Conduct of Business......................................15
SECTION 6.04. Other Transactions.......................................15
SECTION 6.05. Consents.................................................16
SECTION 6.06. Public Announcements.....................................16
SECTION 6.07. Notification.............................................16
VII. COVENANTS............................................................16
SECTION 7.01. Covenant of Sellers; Noncompetition......................16
VIII. CONSENTS, ETC........................................................17
SECTION 8.01. FCC Assignment Consent...................................17
SECTION 8.02. Notice of Proceedings....................................18
SECTION 8.03. Consummation of Agreement................................18
SECTION 8.04. Updating of Information..................................18
IX. OTHER CONDITIONS PRECEDENT...........................................18
SECTION 9.01. Conditions Precedent to Obligations of the Buyer.........18
SECTION 9.02. Conditions Precedent to Obligations of the Sellers.......20
X. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.........................20
SECTION 10.01. Survival of Representations..............................20
SECTION 10.02 General Indemnity........................................20
SECTION 10.03. Conditions of Indemnification............................21
XI. TERMINATION AND ABANDONMENT..........................................22
SECTION 11.01 Termination..............................................22
SECTION 11.02 Procedure and Effect of Termination......................22
XII. MISCELLANEOUS........................................................23
SECTION 12.01. Service of Process......................................23
SECTION 12.02. Bulk Transfer Laws......................................23
SECTION 12.03. Expenses, Etc...........................................23
SECTION 12.04. Execution in Counterparts...............................23
SECTION 12.05. Notices.................................................23
SECTION 12.06. Waivers.................................................24
SECTION 12.07. Amendments, Supplements, Etc............................24
SECTION 12.08. Entire Agreement........................................25
SECTION 12.09. Governing Law; Jurisdiction and Forum...................25
SECTION 12.10. Binding Effect; Benefits................................25
SECTION 12.11. Assignability...........................................25
SECTION 12.12. Further Assurances......................................26
SECTION 12.13 Certain Definitions.....................................26
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INDEX TO EXHIBITS AND SCHEDULES
EXHIBIT DESCRIPTION
A License Agreement
B Form of Xxxx of Sale, Assignment and Assumption Agreement
C Form of FCC Opinion
SCHEDULE DESCRIPTION
1.01(a)(i) Tangible Property, etc.
1.01(a)(ii) Contracts; Licenses; Leases; etc.
1.01(a)(iii) Customer Contracts
6.01 Liens
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MIAMI ASSET PURCHASE AGREEMENT
MIAMI ASSET PURCHASE AGREEMENT, dated as of January 1, 2000, by and
among TELETRAC, INC., a Delaware corporation ("TI"), TELETRAC LICENSING, INC., a
Delaware corporation and a wholly owned subsidiary of TI ("TLI"), (TI and TLI
are sometimes hereinafter referred to together as the "Sellers" or individually
as a "Seller") and ITURAN U.S.A., INC., a Delaware corporation (the "Buyer"),
and ITURAN LOCATION AND CONTROL LTD., a corporation existing under the laws of
Israel, as guarantor ("guarantor").
WHEREAS, the parties to this Agreement are parties to an Asset
Purchase and Option Agreement dated June 9, 1999 (the "Asset Purchase
Agreement") pursuant to which Buyer agreed to acquire certain of the assets and
to assume certain of the liabilities of Teletrac with respect to TI's vehicle
location services business in the New York metropolitan area and the Washington,
D.C. metropolitan area and obtained an option to acquire TI's vehicle location
services business in the Miami metropolitan area (the "Miami Option") (the
business conducted in the New York and Washington D.C. metropolitan areas
hereinafter referred to as the "Business" and the business conducted in the
Miami metropolitan area hereinafter referred to as the "Miami Business");
WHEREAS, the Buyer has delivered the Miami Option Exercise Notice
pursuant to Section 5.1 of the Asset Purchase Agreement and the Buyer and the
Sellers desire to enter into this Agreement;
WHEREAS, the Sellers filed a petition pursuant to the United States
Bankruptcy Code, 11 U.S.C. ss.ss.101 et seq. (the "Bankruptcy Code") commencing
a case before a United States Bankruptcy Court (the "Bankruptcy Court") pursuant
to Chapter 11 of the Bankruptcy Code (the "Chapter 11 Case") and thereafter
filed an application (the "Application") with the Bankruptcy Court pursuant to
Sections 363 and 365 of the Bankruptcy Code for an order which, among other
things, approved execution, delivery and performance by Seller of this Agreement
(the "Bankruptcy Court Order") which Order was entered on _______________, 1999;
and
WHEREAS, TLI holds the Federal Communications Commission ("FCC")
licenses utilized in the Miami Business (the "Miami FCC Licenses"); and
WHEREAS, the Sellers desire to sell to the Buyer, and the Buyer
desires to purchase from the Seller, certain Miami Assets and properties of the
Sellers used exclusively in the Miami Business, subject to the assumption by the
Buyer of specified liabilities of the Sellers, on the terms and subject to the
conditions set forth herein; and
WHEREAS, TLI desires to transfer to the Buyer, and the Buyer desires
to obtain from TLI, the Miami FCC Licenses on the terms and subject to the
conditions set forth herein; and
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
I. SALE AND TRANSFER OF MIAMI ASSETS
SECTION 1.01 SALE OF MIAMI ASSETS. (a) Subject to and in reliance on
the representations, warranties and agreements set forth herein and further
subject to Sections 1.02, 1.03 and 3.03, and on the other terms and conditions
set forth herein, on the Miami Closing Date (as hereinafter defined), the
Sellers shall sell, convey, transfer, assign and deliver to the Buyer and the
Buyer shall purchase from the Sellers, for the purchase price set forth in
Articles II and IV hereof, the following assets and properties of the Miami
Business, except those assets excluded pursuant to paragraph (b) below (said
assets and properties so to be sold, conveyed, transferred, assigned and
delivered being hereinafter collectively called the "Miami Assets"):
(i) all tangible personal property, inventories, machinery,
equipment, supplies, tools and fixtures, including Base Stations, set
forth on Schedule 1.01(a)(i) hereto;
(ii) the rights of the Sellers under all contracts,
agreements, licenses, Miami FCC Licenses, leases, sales orders,
purchase orders and other commitments relating to the Miami Assets or
the Miami Business set forth in Schedule 1.01(a)(ii) hereto (the
"Assumed Contracts");
(iii) all customer lists, customer invoices, drafts and
other documents and materials relating to customer transactions under
contracts relating to RLS services provided to consumer customers of
the Miami Business (other than contracts for commercial fleet
maintenance services) with respect to the Miami Business; and
(iv) all rights, title and interests of the Sellers under
contracts relating to RLS services provided to consumer customers of
the Miami Business listed on Schedule 1.01(a)(iii) hereto (the
"Customer Contracts").
(b) Anything herein contained to the contrary notwithstanding, the
Buyer and Sellers expressly agree and acknowledge that any Miami Assets not
enumerated on Schedules 1.01(a)(i), (ii) and (iii) are specifically excluded
from the Miami Assets and shall be retained by the Sellers, including, without
limitation the following:
(i) all cash and accounts receivable held by the Sellers as
of the Miami Closing Date;
(ii) the minute books, stock records and related corporate
records of the Sellers (provided, however, that Sellers shall make
available to Buyer all books and records relating to the Miami Assets
or copies thereof);
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(iii) all rights, title and interest to any and all intellectual
property of the Sellers (including without limitation to the name
"Teletrac") (it being understood that the grant of rights in and to
the intellectual property of the Sellers to the Buyer should be
governed exclusively by the License Agreement dated July 13, 1999, as
amended from time to time,by and among the parties hereto); and
(iv) all right, title and interests in Sellers pursuant to
contracts for commercial fleet maintenance services.
SECTION 1.02. NONASSIGNABLE CONTRACTS. Nothing in this Agreement
shall be construed as an attempt or agreement to assign (i) any contract,
agreement, license, lease, sales order, purchase order or other commitment that
shall be nonassignable without the consent of the other party or parties thereto
unless such consent shall have been given, (ii) any contract or claim as to
which all the remedies for the enforcement thereof enjoyed by the Sellers would
not pass to the Buyer as an incident of the assignments provided for by this
Agreement, unless such consent of such other party or parties shall be obtained
or the Sellers shall obtain an order of the Bankruptcy Court (the "Bankruptcy
Court Assignment Approval Order") for the assignment of such contracts to Buyer
pursuant to Section 365 of the Bankruptcy Code and such Bankruptcy Court
Assignment Approval Order shall become final and no longer subject to appeal or
(ii) any Asset subject to a Lien. In order, however, that the full value of
every contract and claim of the character and Asset described in clauses (i),
(ii) and (iii) above and all claims and demands on such contracts may be
realized, Sellers will use commercially reasonable efforts to obtain (a)
approval for the assignments, (b) the execution of novation agreements, (c) TI's
subcontracting of all of its rights and obligations under any such contract,
agreement or other commitment to the Buyer or one of its Affiliates, as the case
may be, or (d) removal of any such Lien on any of the Assets (except for the
Raycal Lien as hereinafter defined) or to obtain a Bankruptcy Court Assignment
Approval Order assigning such contracts final and no longer subject to appeal.
In the event that Sellers shall be unable to obtain the consents or releases
referred to herein or a Bankruptcy Court Assignment Approval Order referred to
herein, Buyer and Sellers expressly agree that Sellers shall extend to Buyer all
of the benefits of their rights under all such contracts provided that Buyer
agrees to indemnify Sellers for all of Sellers' contractual obligations under
such contracts to the extent provided in Article II of this Agreement.
SECTION 1.03. CERTAIN MIAMI FCC LICENSES. TLI and Buyer hereby
expressly agree and acknowledge that the Miami FCC Licenses relating to the
Miami Business set forth on Schedule 1.01(a)(i) hereto are not transferable
without prior approval of the FCC. TLI covenants and agrees that it will use
commercially reasonable efforts to promptly transfer such Miami FCC Licenses to
Buyer at Sellers' sole cost and expense.
SECTION 1.04. INSTRUMENTS OF CONVEYANCE AND TRANSFER. Subject to
Section 1.02, on the Miami Closing Date, Sellers shall execute and deliver to
the Buyer (i) a xxxx of sale in the form included in the form of the Xxxx of
Sale, Assignment and Assumption Agreement annexed hereto as Exhibit B (the "Xxxx
of Sale"), and (ii) such other documents of transfer that Buyer may reasonably
request, transferring to the Buyer the properties and Miami Assets to be
acquired by the Buyer under the terms of this Agreement.
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SECTION 1.05. RIGHTS OF SELLERS TO CONDUCT MIAMI BUSINESS.
Notwithstanding anything contained in this Agreement to the contrary, and except
as provided in Section 7.01 of this Agreement, Buyer and Sellers hereby agree
and acknowledge that neither this Agreement nor any of the transactions
contemplated hereby, shall impair, hinder or prevent Sellers from operating,
owning or conducting any business that would compete directly or indirectly with
the Miami Business or the Miami Assets.
II. LIABILITIES
SECTION 2.01. LIABILITIES. (a) As additional consideration hereunder,
on the Miami Closing Date, and subject to the conditions provided in Articles
III and IX hereof, the Buyer will assume and agree to pay, perform and discharge
when due, all obligations of TI under the contracts set forth in Schedules
1.01(a)(ii) and 1.01(a)(iii) hereto, in each case solely to the extent to be
performed after the Miami Closing Date.
(b) Notwithstanding anything else to the contrary contained
herein, Buyer is not assuming and shall not be liable for any liabilities of
Sellers which shall not have been assigned to or assumed by Buyer pursuant to
this Agreement, including liabilities (i) for indebtedness for borrowed money;
(ii) by reason of or arising out of any default or breach by Sellers of any
contract relating to any period prior to the Miami Closing Date, for any penalty
against either Seller under any contract relating to any period prior to the
Miami Closing Date, or relating to or arising out of any event occurring prior
to the Miami Closing Date which with the passage of time or after giving of
notice, or both, would constitute or give rise to such a breach, default or
penalty, whether or not such contract is being assigned to and assumed by Buyer
pursuant to this Agreement; (iii) the existence of which would conflict with or
constitute a breach of any representation, warranty or agreement of Sellers
contained herein; (iv) for fees and expenses referred to in Section 12.03
hereof; (v) relating to the execution, delivery and consummation of this
Agreement or the Ancillary Agreements (as defined below) and the transactions
contemplated hereby and thereby, including, without limitation, any and all
Taxes incurred as a result of the sale contemplated by this Agreement; (vi) for
any Taxes accrued or incurred prior to the Miami Closing Date or relating to any
period (or portion of a period) prior thereto; (vii) relating to or arising out
of any violation of any Environmental Law or any other Law relating to health
and safety of the public or the employees of Sellers prior to the Miami Closing
Date; (viii) relating to, or arising out of, services rendered by Sellers, or
the conduct or operation of the Miami Business prior to the Miami Closing Date
(except to the extent Buyer has agreed to reimburse Sellers for such expenses);
and (ix) of Sellers arising under or pursuant to this Agreement or the Ancillary
Agreements; and provided further, that Buyer shall have the right not to assume
any contract if any party to such contract is in breach thereof or default
thereunder as of the Miami Closing Date or there has occurred any event which
with the passage of time or after giving of notice, or both, would become such a
breach or default. Buyer shall not assume or be bound by any liabilities of
Sellers, except as expressly assumed by it pursuant to this Agreement. Sellers
hereby agree to indemnify and hold Buyer harmless from and against any and all
liabilities of Sellers not agreed to be assumed by Buyer pursuant to this
Agreement. Nothing contained in this Section 2.01 shall relieve or release
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Sellers or Buyer from any obligations under covenants, warranties or agreements
contained in this Agreement.
III. BANKRUPTCY COURT ORDER FOR
ASSUMPTION OF THIS AGREEMENT
SECTION 3.01. ORDER. In the event that Sellers continue to be subject
to the jurisdiction of the Bankruptcy Court with respect to a petition filed by
or against one or more Sellers at the time of the Miami Option Exercise Notice
("Bankruptcy Court Jurisdiction"), Sellers shall file within seven (7) days of
the date of the Miami Option Exercise Notice an application with the Bankruptcy
Court, for an order of the Bankruptcy Court, pursuant to Sections 363 and 365 of
the Bankruptcy Code, approving this Agreement and authorizing Sellers to assume
their obligations hereunder in accordance with Section 3.02 hereunder
(hereafter, the "Bankruptcy Approval Order"). Prior to filing such Application,
Sellers shall consult with the Buyer about the scope, manner and form of the
notice of hearing on the motion and the motion itself. In addition, Sellers
shall provide proper notice of such Application to creditors and other parties
to the extent required by applicable law.
SECTION 3.02. CONDITIONS TO CLOSING. Subject to Article IX hereof,
if the Sellers are subject to Bankruptcy Court Jurisdiction at the time of the
Miami Option Exercise Notice, the closing is subject to the following
conditions: Sellers shall have obtained a Bankruptcy Approval Order and a
Bankruptcy Court Assignment Approval Order on or before the Miami Closing Date,
which, shall include findings and conclusions of the Bankruptcy Court in form
and substance reasonably acceptable to Buyer which shall provide or find that
(a) the transfers of the Miami Assets by Sellers to Buyer, are (i) legal, valid
and effective transfers of the Miami Assets, and (ii) will vest Buyer with good
title to such Miami Assets free and clear of all liens, claims, encumbrances and
security interests; (b) the notice provided of the motion for the Bankruptcy
Approval Order and the Bankruptcy Court Assignment Approval Order to creditors
and other parties in interest shall be in compliance with the applicable
provisions of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure
and all Local Bankruptcy Rules governing assumption and assignment of executory
contracts and sale of Miami Assets free and clear of liens, claims and
encumbrances outside the ordinary course of a debtor's business; (c) the
transactions contemplated by this Agreement and the Ancillary Agreements are
undertaken by Buyer in good faith, as that term is used in Section 363(m) of the
Bankruptcy Code; (d) Buyer and Sellers did not engage in any conduct that would
allow the transactions contemplated by this Agreement and the Ancillary
Agreements to be set aside pursuant to Section 363(n) of the Bankruptcy Code;
(e) shall provide that the Buyer shall have no liability as a successor or
otherwise with respect to the Miami Assets or Miami Business, other than those
liabilities being expressly assumed by the Buyer pursuant to this Agreement; (f)
the provisions of this Agreement are nonseverable and mutually dependent; and
(g) any other provisions of the Bankruptcy Code necessary to effect the sale of
Miami Assets free and clear of liens and claims outside the ordinary course of
the debtor's business or the assumption and assignment of executory contracts or
leases, including, without limitation, the assignment to Buyer of the rights of
the Sellers in the Miami Assets have been satisfied. In addition and without
limiting the foregoing, the Bankruptcy Approval Order shall provide that (i) the
Sellers shall assume each of the agreements previously entered into between TI
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and the Buyer or its Affiliates, each of which is referenced on Schedule 3.02
hereof (the "Prior Agreements") and that such Prior Agreement and this Agreement
and Ancillary Agreements shall not be subject to rejection by the Sellers, and
(ii) the rights of the Buyer under this Agreement, the Ancillary Agreements, the
Prior Agreements, the Bankruptcy Approval Order or the Bankruptcy Court
Assignment Approval Order shall not be modified by a plan of reorganization or
otherwise without the Buyer's prior written consent.
IV. CLOSING, PURCHASE PRICE, LIABILITIES, ETC.
SECTION 4.01. CLOSING. The closing (the "Miami Closing") of the
transactions contemplated by this Agreement shall take place at the offices of
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, not later than three business days following (A) in the event
Sellers are subject to Bankruptcy Court Jurisdiction, the later to occur of (i)
the Bankruptcy Approval Order and the Bankruptcy Court Assignment Approval Order
(x) shall be entered by the Bankruptcy Court and (y) shall become final and no
longer subject to a pending appeal or, if an appeal shall have been filed or the
time for an appeal has not expired, there shall not be pending any injunction
staying or enjoining such Bankruptcy Approval Order and the Bankruptcy Court
Assignment Approval Order pending such appeal or (ii) receipt of the FCC
Assignment Consent (as hereinafter defined) which, at the option of the Buyer,
shall become a Final Order (as defined below) or (B) in the event Sellers are
not subject to Bankruptcy Court Jurisdiction, receipt of the FCC Assignment
Consent which, at the option of the Buyer, shall have become a Final Order, or
such other date as the parties may mutually agree (such date and time of closing
being herein called the "Miami Closing Date").
SECTION 4.02. PURCHASE CONSIDERATION. In full consideration for the
sale, conveyance, transfer, assignment and delivery of the Miami Assets as
described herein, the Buyer on the Miami Closing Date will pay to the Sellers,
by certified or bank cashier's check or by means of wire transfer, an amount
(the "Miami Purchase Price") equal to the sum of (i) $1,600,000 plus (ii) $275
multiplied by the number of VLUs being provided as of the Miami Closing Date
pursuant to Customer Contracts that, as of the Miami Closing Date, are in full
force and effect and with respect to which the customer is not in default and as
to which Customer Contract the customer has not given notice of intention to
terminate.
V. REPRESENTATIONS AND WARRANTIES
SECTION 5.01. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. The
Sellers, jointly and severally, represent and warrant to the Buyer as follows
(it being understood and agreed that all representations and warranties given as
of the Miami Closing Date in the event the Sellers are subject to Bankruptcy
Court Jurisdiction as of the Miami Closing Date are subject to the Bankruptcy
Court Approval Order and the Bankruptcy Court Assignment Approval Order):
SECTION 5.02. ORGANIZATION, POWER; CAPACITY. As of the Miami Closing
Date, each Seller is a corporation duly organized, validly existing and in good
standing under the laws of Delaware and is duly licensed or qualified to do a
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foreign corporation in each jurisdiction in which it is required to be so
qualified with respect to the operations of the Miami Business, except where the
failure to be so licensed or qualified would not have a material adverse effect
on the properties, operations or condition of the Miami Business (a "Material
Adverse Effect"). As of the Miami Closing Date, each Seller has all requisite
corporate power and authority to own, operate and lease its properties and Miami
Assets, to carry on its Miami Business as it is now being conducted and to
execute and deliver this Agreement and each Miami Ancillary Agreement to which
it is a party and to perform its obligations hereunder and thereunder.
SECTION 5.03. AUTHORIZATION OF AGREEMENTS. As of the date of the
Miami Closing Date, the execution and delivery by each Seller of this Agreement
and each of the Xxxx of Sale and the other agreements and instruments
contemplated hereby (collectively, the "Ancillary Agreements") to which either
Seller is a party, and the consummation by each Seller of the transactions
contemplated hereby and thereby, have been duly authorized by all requisite
corporate action, and no action by the shareholder or shareholders of either
Seller is required in connection herewith or therewith. As of the Miami Closing
Date, this Agreement has been duly and validly executed by each Seller and,
subject to due execution by any other parties thereto, constitutes the legal,
valid and binding obligation of each Seller, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws of general application affecting the enforcement
of creditors' rights generally. As of the Miami Closing Date, each Ancillary
Agreement to which either Seller is a party, when duly executed and delivered in
accordance with this Agreement, subject to due execution by any other parties
thereto, will constitute a legal, valid and binding obligation of such Seller,
enforceable in accordance with its respective terms, subject to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws of
general application affecting the enforcement of creditors' rights generally.
SECTION 5.04. TITLE TO PROPERTIES, ABSENCE OF LIENS AND ENCUMBRANCES.
As of the Miami Closing Date, the Seller will have good and valid title to all
of the Miami Assets, in each case free and clear of all liens, charges, security
interests or other encumbrances of any nature whatsoever. As of the Miami
Closing Date, all leases and contracts to be assigned to Buyer shall be in full
force and effect and enforceable in accordance with their terms.
SECTION 5.05. EFFECT OF AGREEMENTS. As of the Miami Closing Date,
the execution and delivery by each Seller of this Agreement and each Ancillary
Agreement to which such Seller is a party, and the performance by each Seller of
its respective obligations hereunder and thereunder, will not violate any
provision of law, rule or regulation, any order, judgment or decree of any court
or other governmental agency or any arbitrator applicable to such Seller or the
Miami Assets, the articles of incorporation or by-laws of either Seller, or any
indenture, agreement, or other instrument to which either Seller is a party, or
by which either Seller or any of the Miami Assets, is bound or affected, or
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under, any such indenture, agreement or other
instrument, or result in the creation or imposition of any lien, charge,
security interest or encumbrance of any nature whatsoever upon any of the Miami
Assets, except for such violations, conflicts, breaches or defaults that would
not, either individually or in the aggregate, have a Material Adverse Effect.
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SECTION 5.06. LICENSES. As of the date of the Miami Closing Date,
TLI is the holder of the Miami FCC Licenses listed on Schedule 1.01(a)(ii)
hereto with respect to the Miami Business, true and correct copies of which have
been delivered to Buyer. As of the Miami Closing Date, such licenses constitute
all of the Miami FCC Licenses, permits and authorizations necessary for the
operation of the Miami Business as now operated. As of the date of this
Agreement and the Miami Closing Date, TLI legally and validly holds all of the
Miami FCC Licenses, all of which are valid and in full force and effect. As of
the date of this Agreement and the Miami Closing Date, there is not pending, or
to the knowledge of either Seller threatened, any action by or before any
governmental authority brought by FCC to revoke, cancel, rescind or modify any
of such Miami FCC Licenses (other than proceedings to amend FCC rules of general
applicability), and there is not issued or outstanding, or, to the knowledge of
either Seller, pending or threatened by or before the FCC, any order to show
cause, notice of violation, notice of apparent liability, or notice of
forfeiture or complaint by the FCC against either Seller with respect to the
Miami Assets, other than regularly scheduled license renewal proceedings. As of
the Miami Closing Date, the Miami Business is operating in compliance in all
material respects with such Miami FCC Licenses, the Communications Act of 1934,
as amended (the "Communications Act"), and the current rules, regulations, and
policies of the FCC. As of the Miami Closing Date, certain of the Miami FCC
Licenses expire on the date set forth in Schedule 1.01(a)(ii) hereto and neither
Seller has received notice that any third party or the FCC intends to oppose any
renewals of any Miami FCC License.
SECTION 5.07. CONDITION AND OPERATION OF MIAMI ASSETS. As of the
Miami Closing Date, all tangible Miami Assets (including without limitation all
buildings, towers, antennae, fixtures and improvements owned or leased by either
Seller with respect to the Miami Business and any heating or air-conditioning
equipment, plumbing, electrical and other mechanical facilities and the roof,
walls and other structural components of the property owned or leased by either
Seller with respect to the Miami Business) are in good repair and operating
condition, ordinary wear and tear excepted and are functioning in the manner and
for the purpose for which they were intended. As of the Miami Closing Date, all
real property owned or leased by either Seller and all tangible Miami Assets,
and either Sellers' use of the same, comply in all material respects with all
applicable ordinances and regulations and building or other laws. As of the
Miami Closing Date, each Seller has access to all leased or owned real property
included in the Miami Assets pursuant to valid leases, easements or public
rights of way. As of the Miami Closing Date, no condemnation proceedings are
pending or, to either Seller's knowledge, threatened with respect to any real
estate owned or leased by either Seller with respect to the Miami Assets, nor
has any such property been condemned. As of the Miami Closing Date, all real
property owned or leased by either Seller and all tangible Miami Assets comply
in all material respect with the requirements, standards, rules and regulations
of the FCC and of the FCC Authorizations. As of the Miami Closing Date, the
transmitting systems included in the Miami Assets are operating in all material
respects in accordance with and within the parameters established by the FCC.
SECTION 5.08. CONTRACTS. Schedule 1.01(a)(ii) contains a true and
complete list of all Assumed Contracts as of the Miami Closing Date, and Sellers
have delivered or made available to the Buyer or its representatives complete
and correct copies of all such Assumed Contracts, as the same have been amended
or modified from time to time. As of the date of this Agreement and the Miami
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Closing Date, all such Assumed Contracts listed on such Schedules are valid, in
full force and effect, binding and enforceable upon the applicable Seller, and,
to the knowledge of either Seller, upon the other parties thereto, in accordance
with their respective terms.
SECTION 5.09. COMPLIANCE WITH LAWS; REQUIRED CONSENTS. As of the date
of this Agreement and the Miami Closing Date, Sellers are in compliance in all
material respects with all laws, rules and regulations of any governmental
department, commission, board, agency or instrumentality having jurisdiction
over either Seller with respect to the operation of the Miami Business. Except
for the approval of the FCC and the Bankruptcy Court referred to herein, as of
the Miami Closing Date, no approval, consent, authorization or other order of,
and no designation, registration or qualification with, any governmental
authority is required for the consummation by either Seller of the transactions
contemplated hereby.
SECTION 5.10. INSURANCE. Sellers shall keep the tangible Miami Assets
which are of an insurable character insured by financially sound and reputable
insurers against such hazards, risks and liabilities to persons and property to
the extent and in the manner customary for entities in the business of owning
and operating the Miami Assets. Sellers have delivered to the Buyer a summary of
all insurance policies with respect to the Miami Assets and all of said policies
are in full force and effect, and neither Seller is in default of any provisions
thereof.
SECTION 5.11. RADIO WAVES. As of the date of this Agreement and the
Miami Closing Date, neither Seller has received notice of any claim by the FCC
relating to either Seller's transmission of radio waves in connection with the
operation of the Base Stations.
SECTION 5.12. BROKER'S OR FINDER'S FEES. All negotiations relative to
this Agreement and the transactions contemplated hereby have been carried out by
the Sellers directly with Buyer, without the intervention of any persons on
behalf of the Sellers in such a manner to give rise to any claim by any person
against Buyer for a finder's fee, brokerage commission or similar payment.
SECTION 5.13. CUSTOMER CONTRACTS. Except for the Customer Contracts
listed on Schedule 1.02 (a)(iii), TI is not a party to, or subject to or bound
by, any other Customer Contract with a customer of the Miami Business. Except as
set forth on Schedule 5.13 hereto, each of the Customer Contracts is a valid and
subsisting contract of all of the parties thereto in full force and effect
without modification; Seller has performed all obligations required to be
performed by it and is not in default under any Customer Contract and no event
has occurred thereunder which, with or without the lapse of time or the giving
of notice, or both, would constitute a default by it thereunder; no other party
is in default under any such Customer Contract; no Customer Contract is subject
to unilateral changes in terms by any other party or parties thereto; no
customer of Seller under any Customer Contract has given notice of termination
thereunder and Seller does not have any knowledge of any plans of termination.
SECTION 5.14. MIAMI BUSINESS. As of the Miami Closing Date, the
Assets, the rights of the Sellers under the contracts described on Schedule
1.01(a)(ii), the rights of the Sellers being licensed pursuant to the License
Agreement, the rights being transferred to the Buyer pursuant hereto, the rights
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of the Sellers with respect to the FCC License and the services described in the
Sharing and Reimbursement Agreement together constitute all the necessary rights
for the Sellers to operate the Miami Business consistent with past practices of
the Sellers.
SECTION 5.15. NO ADDITIONAL WARRANTIES. OTHER THAN AS SPECIFICALLY SET
FORTH IN SECTION 5.01. NEITHER SELLER NOR ANY PERSON MAKES ANY EXPRESS OR
IMPLIED REPRESENTATION OR WARRANTY ON BEHALF OF SELLER. ALL WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, ARE EXCLUDED FROM THE SALE AND TRANSFER OF THE ACQUIRED MIAMI ASSETS
AND THE ASSUMED LIABILITIES.
SECTION 5.16. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer
represents and warrants to the Sellers as follows:
SECTION 5.17. ORGANIZATION, CORPORATE POWER, ETC. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Buyer has all requisite corporate power and
authority to acquire, own, lease and operate its properties and to execute and
deliver this Agreement and each Ancillary Agreement to which it is a party and
to perform its obligations hereunder and thereunder.
SECTION 5.18. AUTHORIZATION OF AGREEMENTS. The execution, delivery
and performance by the Buyer of this Agreement and each Ancillary Agreement to
which the Buyer is a party, and the consummation by the Buyer of the
transactions contemplated hereby and thereby, have been duly authorized by all
requisite corporate action. This Agreement has been duly and validly executed by
the Buyer and, subject to due execution by any other parties hereto, constitutes
the legal, valid and binding obligation of the Buyer, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws of general application affecting the enforcement
of creditors' rights generally. Each Ancillary Agreement to which the Buyer is a
party, when duly executed and delivered in accordance with this Agreement,
subject to due execution by any other parties hereto, will constitute the legal,
valid and binding obligation of the Buyer, enforceable in accordance with its
respective terms, subject to applicable bankruptcy, insolvency, reorganization
and moratorium laws and other laws of general application affecting the
enforcement of creditors' rights generally.
SECTION 5.19. EFFECT OF AGREEMENTS. The execution and delivery by
the Buyer of this Agreement and each Ancillary Agreement to which the Buyer is a
party, and the performance by the Buyer of its obligations hereunder and
thereunder, will not violate any provision of law, any order of any court or
other agency of government, the Certificate of Incorporation or By-laws of the
Buyer or any judgment, award or decree or any indenture, agreement or other
instrument to which the Buyer is a party or by which the Buyer or its properties
or assets are bound or affected, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under, any such
indenture, agreement or other instrument, or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or Miami Assets of the Buyer.
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SECTION 5.20. BROKER'S OR FINDER'S FEES. All negotiations relative
to this Agreement and the transactions contemplated hereby have been carried out
by the Buyer directly with the Sellers without the intervention of any persons
on behalf of the Buyer in such a manner to give rise to any claim by any person
against the Sellers for a finder's fee, brokerage commission or similar payment.
VI. CONDUCT PRIOR TO THE CLOSING
SECTION 6.01. INVESTIGATION BY BUYER. Buyer may, prior to the Miami
Closing Date, through its own representatives (including its counsel,
accountants and consultants) make such investigations of the properties and
operations of Sellers as it deems necessary or advisable in connection with the
transactions contemplated hereby, including, without limitation, any
investigation enabling it to familiarize itself with the Miami Assets or the
Miami Business. Such investigation shall not, however, affect Sellers'
representations, warranties and agreements hereunder. Sellers shall permit Buyer
and its authorized representatives to have, after the date hereof, full access
to the premises and to all books and records of Sellers relating to the Miami
Assets or the Miami Business; and Buyer shall have the right to make copies
thereof and excerpts therefrom. Sellers shall furnish Buyer with such financial
and operating data and other information with respect to the Miami Assets as
Buyer may from time to time reasonably request. Sellers agree to permit Buyer
and its authorized representatives to visit suppliers, customers and others
having business relations with Sellers relating to the Miami Assets or the Miami
Business. Sellers acknowledge that the rights set forth in this paragraph 6.01
are essential to Buyer as a means of evaluating the Miami Assets and Sellers
agree that in no event will they seek to recover costs or damages of any kind
incurred as a result of the exercise by Buyer of such rights and hereby waives
any and all rights they might have to recover any such costs or damages.
SECTION 6.02. ONGOING OPERATIONS. From the date of the Miami Option
Exercise Notice to the Closing, Sellers shall use reasonable commercial efforts
to preserve their respective business organization engaged in the operation of
the Miami Business intact, keep available to Buyer the services of present
employees of Sellers relating to the Miami Business and preserve for Buyer the
present relationship between Sellers on the one hand and its suppliers,
customers and others having business relations with it on the other relating to
the Miami Business.
SECTION 6.03. CONDUCT OF MIAMI BUSINESS. Sellers agree that from the
date of the Miami Option Exercise Notice until the Closing, Sellers shall not,
without the prior written consent of Buyer, purchase, sell, lease, encumber or
otherwise dispose of any of the Miami Assets involved in the Miami Business
except inventories in the ordinary course of business and consistent with past
practice or make any change in its business, operations or the manner of
conducting their respective business.
SECTION 6.04. OTHER TRANSACTIONS. Prior to Closing, Sellers will not,
and will cause their directors, officers, employees, agents and Affiliates not
to, directly or indirectly, solicit or initiate the submission of proposals
from, or solicit, encourage, entertain or enter into any arrangement, agreement
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or understanding with, or engage in any discussions with, or furnish any
information to, any Person, other than Buyer or a representative thereof, with
respect to the acquisition of all or any part of the Miami Assets relating to
the Miami Business. Should Sellers or any of their Affiliates or
representatives, during such period, receive any offer or inquiry relating to
such acquisition, or obtain information that such an offer is likely to be made,
they will provide Buyer with immediate notice thereof, which notice will include
the identity of the prospective offer and the price and terms of any offer.
SECTION 6.05. CONSENTS. Sellers shall use reasonable commercial
efforts to obtain in writing, prior to the Closing, all consents, approvals,
waivers, authorizations and orders (collectively, "Consents") necessary or
reasonably required in order to permit it to effectuate this Agreement and to
consummate the transactions contemplated hereby. All such Consents will be in
writing and copies thereof will be delivered to Buyer promptly after Sellers'
receipt thereof but no later than immediately prior to Closing.
SECTION 6.06. PUBLIC ANNOUNCEMENTS. Sellers and Buyer agree that they
will consult with each other before issuing any press releases or otherwise
making any public statements with respect to this Agreement or the transactions
contemplated hereby and shall not issue any press release or make any public
statement prior to such consultation, except as may be required by law and
except in connection with any proceedings commenced by either of the Sellers
pursuant to the Bankruptcy Code.
SECTION 6.07. NOTIFICATION. Sellers shall give Buyer prompt written
notice of (i) the existence of any fact or the occurrence of any event existing
at Closing which constitutes, or with the giving of notice or the passage of
time or both would constitute, a breach of any representation or warranty of
Sellers made herein or pursuant hereto and (ii) the taking of any action by
Sellers that would breach or violate, or constitute a default under, any
agreement or covenant of Sellers made herein or pursuant hereto. The giving of
any such notice shall not affect, modify or limit in any way any representation,
warranty, agreement or covenant of Sellers made herein or pursuant hereto or
Buyer's right to rely thereon.
VII. COVENANTS
SECTION 7.01. COVENANT OF SELLERS; NONCOMPETITION. Each of the
Sellers agree that until the fifth anniversary of the date of this Agreement,
neither it nor any of its Affiliates shall, without the consent of Buyer, (i)
engage in providing consumer vehicle location services in the Territory (the
"Services") other than Sellers' providing commercial customers with vehicle
location services incident to Sellers' fleet management services or (ii) render
Services to or have any interest, as a shareholder, owner, agent, consultant,
lender or guarantor or any other interest, in any other Person (other than
Sellers) engaged in the rendering of Services other than Sellers' providing
commercial customers with vehicle location services incident to Sellers' fleet
management services.
(a) For purposes of this Section 7.01, ownership of 1% or less
of any class of outstanding securities of a company the securities of which are
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listed on a national securities exchange or which has 1,000 or more
shareholders, shall not be deemed to constitute ownership or participation in
the ownership of the business of such company.
(b) Sellers acknowledge and agree that any breach of this Section
7.01 is likely to result in irreparable injury to Buyer, that monetary damages
will be an inadequate remedy of such breach and that, accordingly, in addition
to any other remedy that Buyer may have, Buyer shall be entitled to enforce the
specific performance of this Section 7.01 and to seek both permanent and
temporary relief in the event of any breach hereof.
(c) The parties acknowledge that the time, scope, geographic
area and other provisions of this Section 7.01 have been specifically negotiated
by sophisticated commercial parties and agree that all such provisions are
reasonable under the circumstances of the transactions contemplated by this
Agreement. If any portion of this Section 7.01 shall be determined to be invalid
and unenforceable as written, each such portion shall be enforced to the extent
reasonable under the circumstances and such determination shall not affect the
validity or enforceability of the balance hereof, and such balance shall remain
in full force and effect. It is understood that Sellers are entering into this
non-competition agreement in order to induce Buyer to enter into this Agreement.
(d) The parties acknowledge that the Miami Business is
currently conducted throughout the Territory. In view of the statements made in
this Section 7.01, the parties agree that the Territory is reasonable in scope.
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VIII. CONSENTS, ETC.
SECTION 8.01. FCC ASSIGNMENT CONSENT. The assignment of the Miami
FCC Licenses contemplated by this Agreement is subject to the prior consent of
the FCC. As promptly as practicable after the date of this Agreement and in no
event later than seven (7) days after the date of this Agreement, Sellers shall
complete and file applications (after receiving the Buyer's portion of such
applications with the FCC for all consents and approvals of the FCC necessary
for the transfer of the Miami FCC Licenses (the "FCC Assignment Consent").
Sellers shall diligently take, or cooperate in the taking of, all steps that are
necessary, proper or desirable to expedite the preparation of such applications
and their prosecution to a favorable conclusion. Sellers shall promptly provide
the Buyer with a copy of any pleading, order, or other documents served on
either Seller, relating to such applications. Sellers will cooperate with the
Buyer and use reasonable, diligent and good faith efforts to obtain the Final
Order. Sellers will make good faith efforts to answer FCC inquiries and
third-party objections, if any, with respect to the application for FCC
Assignment Consent, and to avoid designation for hearing. Sellers will bear
their own legal and other fees and expenses involved in the preparation and
prosecution of the application for FCC Assignment Consent. "Final Order" means
an FCC Order granting the Assignment Application as to which the time for review
on its own motion by the FCC and for the filing of a request for administrative
or judicial reconsideration or review has expired without any such review or
filing having been made, or in the event of such review or filing, the FCC Order
approving the FCC Assignment application has been reaffirmed or upheld and the
time for seeking further administrative or judicial review with respect thereto
has expired without any request for such further review being filed. Sellers
agree that, between the date hereof and the Miami Closing Date, they will not
take or fail to take any action which would result in their noncompliance with
the requirements of the Communications Act or the rules and regulations of the
FCC material to the transactions contemplated by this Agreement.
SECTION 8.02. NOTICE OF PROCEEDINGS. Sellers shall promptly notify
the Buyer in writing upon (i) becoming aware of any order or decree or any
complaint seeking an order or decree restraining or enjoining the consummation
of this Agreement or the transactions contemplated hereby, or (ii) receiving any
notice from any governmental department, court, agency or commission of its
intention (A) to institute an investigation into, or institute a suit or
proceeding to restrain or enjoin, the consummation of this Agreement or the
transactions contemplated hereby, or (B) to nullify or render ineffective this
Agreement or the transactions contemplated hereby if consummated.
SECTION 8.03. CONSUMMATION OF AGREEMENT. Subject to the provisions
of Article IX of this Agreement: (i) Sellers shall use reasonable best efforts
to (A) fulfill and perform all conditions and obligations on its part to be
fulfilled and performed under this Agreement, (B) cause the transactions
contemplated by this Agreement to be fully carried out, and (C) prevent, to the
extent within Sellers' control, any representation and warranty made by either
Seller in this Agreement from becoming untrue or incorrect; and (ii) Sellers
shall not take any action or omit to take any action that would make
consummation of the transactions contemplated by this Agreement contrary to any
statute, rule or regulation, including, without limitation, the Communications
Act or the rules, regulations, or policies of the FCC.
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SECTION 8.04. UPDATING OF INFORMATION. On the Miami Closing Date
Sellers will deliver to the Buyer (a) updated Schedules hereto to reflect
changes therein from the date of this Agreement to the Miami Closing Date and
(b) updated copies of documents relating to or included as a part of such
updated Schedules, in order that all such Schedules shall be complete and
accurate in all material respects as of such date. To the extent that any such
changes included in such updated Schedules are referenced in any representation
or warranty of either Seller contained in this Agreement, which changes are
permitted by this Agreement, such representation or warranty shall be deemed, as
of the Closing, to be amended by such updated Schedule.
IX. OTHER CONDITIONS PRECEDENT
SECTION 9.01. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER. In
addition to the conditions set forth in Section 3.02, the obligations of the
Buyer under this Agreement are subject, at the option of the Buyer, to the
satisfaction at or prior to the Miami Closing Date of each of the following
conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in Article V of this Agreement, the
Ancillary Documents, or in any certificate or document delivered to the Buyer
pursuant hereto shall be true and correct in all material respects on and as of
the Miami Closing Date as though made at and as of that date, and the Sellers
shall have delivered to the Buyer a certificate to that effect.
(b) COMPLIANCE WITH COVENANTS. The Sellers shall have
performed and complied in all material respects with all terms, agreements,
covenants and conditions of this Agreement to be performed or complied with by
them at or prior to the Miami Closing Date, and the Sellers shall have delivered
to the Buyer a certificate to that effect.
(c) ANCILLARY AGREEMENTS. Each Ancillary Agreement to be
executed and delivered at Closing shall have been executed and delivered by each
party thereto and each such Ancillary Agreement shall be in full force and
effect as of the Miami Closing Date.
(d) DELIVERIES. Sellers shall have furnished the Buyer with:
(i) Certified resolutions of the Board of Directors of
each Seller approving the execution and delivery of this Agreement and
the consummation of the transaction contemplated hereby;
(ii) Governmental certificates evidencing that each
Seller is a corporation partnership in good standing under the laws of
the State of Delaware;
(iii) A certificate of the Secretary of each Seller
attesting as to the incumbency of each officer who shall execute this
Agreement or any of the Ancillary Agreements on behalf of either
Seller;
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(iv) A transferor's certificate of non-foreign status as
provided in the Treasury Regulations under Section 1445 of the
Internal Revenue Code of 1986, as amended (the "Code"); and
(v) Such other certificates as the Buyer may reasonably
request.
(e) FCC OPINION OF COUNSEL. The Buyer shall have received an
opinion of Sellers' FCC counsel, dated the Miami Closing Date, substantially in
the form of Exhibit C hereto.
(f) FREE AND CLEAR. Each of the Assets shall be free and clear
of all liens, claims, encumbrances and security interests (other than equipment
in which Raycal Datacom, Inc. ('Raycal") holds a security interest and with
respect to which payments to Raycal do not exceed $5,000 per month (the "Raycal
Lien") and the transfer to the Buyer will vest Buyer with good title to such
Assets; each of the Consumer Contracts shall be a valid and subsisting contract
of all of the parties thereto in full force and effect without modification and
no event has occurred thereunder which, with or without the lapse of time or the
giving of notice, or both, would constitute a default by it thereunder and all
necessary consents to the assignment to the Buyer of the Assumed Contracts shall
have been obtained.
(g) CONSENTS. The Buyer shall have received all necessary
Consents, the FCC Assignment Consent or, at the option of the Buyer, the Final
Notice.
(h) NO MATERIAL ADVERSE EFFECT. No facts or conditions exist
which may result in or have a Material Adverse Effect on the Miami Business.
SECTION 9.02. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS. In
addition to the conditions set forth in Section 3.02, the obligations of the
Sellers under this Agreement are subject, at the option of the Sellers, to the
satisfaction at or prior to the Miami Closing Date of each of the following
conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Buyer contained in this Agreement or in
any certificate or document delivered to the Sellers pursuant hereto shall be
true and correct in all material respects on and as of the Miami Closing Date as
though made at and as of that date, and the Buyer shall have delivered to the
Sellers a certificate to such effect.
(b) COMPLIANCE WITH COVENANTS. The Buyer shall have performed
and complied in all material respects with all terms, agreements, covenants and
conditions of this Agreement to be performed or complied with by it at or prior
to the Miami Closing Date, and the Buyer shall have delivered to the Sellers a
certificate to that effect.
(c) LEGAL ACTIONS OR PROCEEDINGS. No legal action or proceeding
shall have been instituted or threatened seeking to restrain, prohibit,
invalidate or otherwise affect the consummation of the transactions contemplated
hereby.
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(d) ANCILLARY AGREEMENTS. Each Ancillary Agreement to be
executed and delivered at Closing shall have been executed and delivered by each
party thereto other than the Sellers, and each such Agreements shall be in full
force and effect as of the Miami Closing Date.
X. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
SECTION 10.01. SURVIVAL OF REPRESENTATIONS. Except as otherwise
provided herein, the representations, warranties and covenants of the Buyer and
the Sellers in this Agreement shall survive the Miami Closing Date for a period
of three years.
SECTION 10.02. GENERAL INDEMNITY.
(a) Subject to the terms and conditions of this Article X, the
Sellers hereby agree to indemnify, defend and hold the Buyer and its Affiliates
harmless from and against all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs and expenses, including,
without limitation, interest, penalties and reasonable attorneys' fees and
expenses (collectively, "Damages"), asserted against, resulting to, imposed upon
or incurred by the Buyer and its Affiliates by reason of or resulting from:
(i) a breach of any representation, warranty or covenant
by Sellers contained in or made pursuant to this Agreement or made
pursuant to any of the Ancillary Agreements by Sellers, or any other
covenant or undertaking made pursuant to this Agreement or made
pursuant to any of the Ancillary Agreements by Sellers; and
(ii) any liabilities or obligations of, or claims against
or imposed on the Buyer or its Affiliates (whether absolute, accrued,
contingent or otherwise and whether a contractual, or any other type
of liability, obligation or claim) not assumed by the Buyer pursuant
to this Agreement.
(b) The Buyer hereby agrees to indemnify, defend and hold the
Sellers and their Affiliates harmless from and against all Damages, asserted
against, resulting to, imposed upon or incurred by the Sellers and its
Affiliates by reason of or resulting from:
(i) a breach of any representation, warranty or covenant by
the Buyer contained in or made pursuant to this Agreement, or made
pursuant to any of the Ancillary Agreements by the Buyer, or any other
covenant or undertaking made pursuant to this Agreement or made
pursuant to any of the Ancillary Agreements by the Buyer; and
(ii) any liabilities or obligations of, or claims against
or imposed on the Sellers that were assumed by Buyer pursuant to this
Agreement; and
(iii) the failure of Buyer to pay, perform and discharge
when due the Assumed Liabilities.
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SECTION 10.03. CONDITIONS OF INDEMNIFICATION. The respective
obligations and liabilities of Sellers and Buyer (herein sometimes called the
"indemnifying party") to the other (herein sometimes called the "party to be
indemnified") under Section 10.02 hereof with respect to third party claims
shall be subject to the following terms and conditions:
(a) within 20 days after receipt of notice of commencement of
any action or the assertion in writing, formal or informal, of any claim, audit
or inquiry by a third party, the party to be indemnified shall give the
indemnifying party written notice thereof together with a copy of such claim,
process or other legal pleading, and the indemnifying party shall have the right
to respond to such action, claim, audit or inquiry and to undertake the defense
thereof by representatives of its own choosing and to enter into a settlement or
compromise thereof or consent to a judgment with respect thereto; provided,
however, the indemnifying party shall not, without the prior written consent of
the party to be indemnified, settle or compromise any claim or consent to the
entry of any judgment (i) that does not include as an unconditional term thereof
the giving by the claimant or the plaintiff to the party to be indemnified a
release from all liability in respect of such claim, or (ii) that contemplates
any payment or performance by the party to be indemnified.
(b) in the event that the indemnifying party, by the 15th day
after receipt of notice of any such claim, audit or inquiry (or, if earlier, by
the tenth day preceding the day on which an answer or other pleading must be
served in order to prevent judgment by default in favor of the person asserting
such claim), does not elect to defend against such claim, the party to be
indemnified will (upon further notice to the indemnifying party) have the right
to respond to such action, claim, audit or inquiry and to undertake the defense,
compromise or settlement of such claim on behalf of and for the account and risk
of the indemnifying party, subject to the right of the indemnifying party to
assume the defense of such claim at any time prior to settlement, compromise or
final determination thereof, provided that the indemnifying party shall be given
at least 10 days' prior written notice to the effectiveness of any such proposed
settlement or compromise; and
(c) In connection with any such indemnification, the indemnified
party shall cooperate in all reasonable requests of the indemnifying party.
(d) Notwithstanding the foregoing, nothing in this Section 10.03
shall be deemed to delay or prevent the right of any party to be indemnified
from commencing any action to compel the indemnifying party to pay any Damages
or obligations described herein.
XI. TERMINATION AND ABANDONMENT
SECTION 11.01. TERMINATION. Subject to Section 3.02, this Agreement
may be terminated at any time prior to the closing on the Miami Closing Date:
(a) by the mutual consent of the Sellers and the Buyer; or
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(b) by the Buyer or the Sellers, if the Closing shall not
have occurred on or before six (6) months from receipt of the Miami Option
Notice of Exercise, subject to the Buyer's option to extend such date to nine
(9) months from receipt of the Miami Option Notice of Exercise, or such later
date as may be agreed upon in writing by the parties hereto; provided, however,
that the right to terminate this Agreement under this clause (b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in the failure of the closing to
occur on or before such date.
SECTION 11.02. PROCEDURE AND EFFECT OF TERMINATION. In the event of
termination of this Agreement and abandonment of the transactions contemplated
hereby by any or all of the parties pursuant to Section 11.01 above, written
notice thereof shall forthwith be given to the other parties to this Agreement
and this Agreement shall terminate and the transactions contemplated hereby
shall be abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided in this Agreement:
(a) the parties hereto will promptly redeliver all documents,
work papers 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 party shall have any liability or further obligation to
any other party to this Agreement pursuant to this Agreement except as provided
in Article XI above.
XII. MISCELLANEOUS
SECTION 12.01. SERVICE OF PROCESS. Each party to this Agreement
hereby irrevocably agrees that service of process in any legal action or
proceeding with respect to this Agreement or any Ancillary Agreement may be
effected by mailing a copy thereof by registered or certified mail, postage
prepaid, to the address of such party set forth in Section 12.05 hereof.
SECTION 12.02. BULK TRANSFER LAWS. The Buyer hereby waives compliance
by TI with any applicable bulk transfer laws, including, without limitation, the
bulk transfer provisions of the Uniform Commercial Code of any state, or any
similar statute, with respect to the transactions contemplated hereby. The
Sellers hereby agree to indemnify the Buyer and hold it harmless from and
against any loss or damage which it may incur by reason of such non-compliance.
SECTION 12.03. EXPENSES, ETC. Whether or not the transactions
contemplated by this Agreement are consummated, none of the parties hereto shall
have any obligation to pay any of the fees and expenses of any other party
incident to the negotiation, preparation and execution of this Agreement,
including the fees and expenses of counsel, accountants, investment bankers and
other experts.
SECTION 12.04. EXECUTION IN COUNTERPARTS. For the convenience of the
parties, this Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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SECTION 12.05. NOTICES. All notices which are required or may be
given pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if (i) delivered personally, (ii) mailed by
registered or certified mail, return receipt requested and postage prepaid,
(iii) sent via a nationally recognized overnight courier service or (iv) sent
via facsimile confirmed in writing to the recipient, in each case as follows:
If to the Sellers, to them at the following address:
Teletrac, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: General Counsel
with a copy to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx, Esq.
If to the Buyer or guarantor, at:
Ituran U.S.A. Inc.
x/x Xxxxxx
X.X. Xxx 00000
Xxxxx, Xxxxxx
Facsimile No.: 011 972 3 751-2061
Attention: Eyal Sheratzky
with a copy to:
Xxxxx X. Xxxxx, Esq.
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: 000-000-0000
or such other address or addresses as any party shall have designated by notice
in writing to the other parties.
SECTION 12.06. WAIVERS. Either the Sellers or the Buyer may, by
written notice to the other, (i) extend the time for the performance of any of
the obligations or other actions of the other under this Agreement, (ii) waive
any inaccuracies in the representations or warranties of the other contained in
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this Agreement or in any document delivered pursuant to this Agreement, (iii)
waive compliance with any of the conditions or covenants of the other contained
in this Agreement, or (iv) waive performance of any of the obligations of the
other under this Agreement. Except as provided in the preceding sentence, no
action taken pursuant to this Agreement, including without limitation any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach.
SECTION 12.07. AMENDMENTS, SUPPLEMENTS, ETC. At any time this
Agreement may be amended or supplemented by such additional agreements, articles
or certificates, as may be determined by the parties hereto to be necessary,
desirable or expedient to further the purposes of this Agreement, or to clarify
the intention of the parties hereto, or to add to or modify the covenants, terms
or conditions hereof or to effect or facilitate any governmental approval or
acceptance of this Agreement or to effect or facilitate the filing or recording
of this Agreement or the consummation of any of the transactions contemplated
hereby. Any such instrument must be in writing and signed by all parties hereto.
SECTION 12.08. ENTIRE AGREEMENT. This Agreement, its Exhibits and
Schedules and the Ancillary Agreements, the other documents executed on the
Miami Closing Date and the Xxxx of Sale in connection herewith, constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings, oral and written,
between the parties hereto with respect to the subject matter hereof.
Notwithstanding the foregoing, nothing contained herein shall derogate from the
rights of the Buyer of its Affiliates pursuant to the Prior Agreements.
SECTION 12.09. GOVERNING LAW; JURISDICTION AND FORUM. (a) This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without reference to the choice of law principles thereof.
(b) Buyer and Sellers hereto agree that the appropriate and
exclusive forum for any disputes arising out of this Agreement or the
transactions contemplated hereby shall be any state or federal court in the
State of New York, and Buyer and Sellers each consent to the jurisdiction of
such courts for the adjudication of any such case or controversy. Buyer and
Sellers further agree that they will not bring suit with respect to any suit
arising out of this Agreement or the transactions contemplated hereby, except as
expressly set forth below for the execution or enforcement of judgments, in any
court or jurisdiction other than the above specified court. The foregoing shall
not limit the rights of any party to obtain execution of judgment in any other
jurisdiction. The parties further agree, to the extent permitted by law, that a
final and unappealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the face
amount of such judgment.
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SECTION 12.10. BINDING EFFECT; BENEFITS. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
SECTION 12.11. ASSIGNABILITY. Neither this Agreement nor any of the
parties' rights hereunder shall be assignable by any party hereto without the
prior written consent of the other parties hereto. Notwithstanding the
foregoing, Buyer may assign one or more of its rights under this Agreement to
one or more Affiliates of Buyer from time to time without such consent of
Sellers, but no such assignment shall relieve Buyer of any of its obligations
hereunder and Buyer shall guarantee all obligations of such Affiliates.
SECTION 12.12. FURTHER ASSURANCES. Sellers agree at any time and
from time to time after the Miami Closing Date, upon the request of Buyer, to
do, execute, acknowledge and deliver, or to cause to be done, executed,
acknowledged and delivered, at Sellers' cost and expense all such further acts,
assignments, transfers, powers of attorney and assurances as may be required for
the better assigning, transferring, conveying, and confirming to Buyer, or to
its successors and assigns, of any or all of the Miami Assets and to carry out
the terms and conditions of this Agreement and the Ancillary Agreements.
SECTION 12.13. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms shall have the respective meanings set forth below:
"Action" means any claim, action, suit, proceeding or
investigation, whether at law, in equity or in admiralty or before any court,
arbitrator, arbitration panel or Governmental Authority.
"Affiliate" of a party means any Person which, directly or
indirectly, controls, is controlled by or is under common control with such
party.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contracts" mean all contracts, agreements, indentures,
licenses, leases, commitments, plans, arrangements, sales orders and purchase
orders of every kind, whether written or oral.
"Damages" mean losses, liabilities, costs, damages, claims
and expenses (including reasonable attorneys fees and disbursements).
"Environmental Laws" mean all federal, state, local and
foreign environmental, health and safety laws, code and ordinances and all rules
and regulations promulgated thereunder, including, without limitation laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
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substances or wastes into the environment (including, without limitation, air,
surface water, ground water, land surface or subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals, or
industrial, solid, toxic or hazardous substances or wastes. As used in this
Agreement, the term "hazardous substances or wastes" includes, without
limitation, (i) all substances which are designated pursuant to Section
311(b)(2)(A) of the Federal Water Pollution Control Act ("FWPCA"), 33 U.S.C. ss.
1251 et seq.; (ii) any element, compound, mixture, solution, or substance which
is designated pursuant to Section 102 of the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. ss. 9601 et seq.;
(iii) any hazardous waste having the characteristics which are identified under
or listed pursuant to Section 3001 of the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. ss. 6901 et seq.; (iv) any toxic pollutant listed under
Section 307(a) of the FWPCA; (v) any hazardous air pollutant which is listed
under Section 112 of the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; (vi) any
imminently hazardous chemical substance or mixture with respect to which action
has been taken pursuant to Section 7 of the Toxic Substances Control Act, 15
U.S.C. ss. 2601 et seq.; and (vii) petroleum, petroleum products, petroleum
by-products, petroleum decomposition by-products, and waste oil.
"Governmental Authority" means any agency,
instrumentality, department, commission, court, tribunal or board of any
government, whether foreign or domestic and whether national, federal, state,
provincial or local.
"LMS" means location and monitoring services.
"Laws" mean laws, rules, regulations, codes, orders,
ordinances, judgments, injunctions, decrees and policies.
"Liabilities" mean debts, liabilities, obligations, duties
and responsibilities of any kind and description, whether absolute or
contingent, monetary or non-monetary, direct or indirect, known or unknown or
matured or unmatured, or of any other nature.
"Lien" means any security interest, lien, mortgage, claim,
charge, pledge, restriction, equitable interest or encumbrance of any nature.
"Person" means any natural person, corporation, business trust,
joint venture, association, company, firm, partnership, or other entity or
government or Governmental Authority.
"Proprietary Right" means any trade name, trademark, service
xxxx, patent or copyright and any application for any of the foregoing.
"Real Property" means all real property, land, buildings,
improvements and structures owned or used by Seller.
"Securities Act" means the Securities Act of 1933, as amended.
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"Security Interest" means all mortgages, liens, security
interests, defects in title and encumbrances.
"Taxes" means all taxes, charges, fees, levies or other
assessments, including, without limitation, income, gross receipts, excise, real
and personal property, sales, transfer, license, payroll and franchise taxes,
imposed by any Governmental Authority and shall include any interest, penalties
or additions to tax attributable to any of the foregoing.
"Territory" means the Miami metropolitan area.
"VLU" means an individual vehicle location unit in which a
transmitter - receiver is installed in a subscriber's vehicle for the purpose of
receiving LMS services throughout the Miami metropolitan area.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the parties hereto as of the date first above written.
TELETRAC, INC.
By /s/ Xxxxxx Xxxxxxx
----------------------------
Name:
Title:
TELETRAC LICENSE, INC.
By /s/ Xxxxxx Xxxxxxx
----------------------------
Name:
Title:
ITURAN U.S.A. INC.
By /s/ Easi Sheratsky
----------------------------
Name:
Title:
In consideration of the mutual promises contained herein, Ituran Location and
Control Ltd. hereby guarantees performance of the obligations of Buyer under
this Agreement
AGREED:
ITURAN LOCATION AND CONTROL, LTD.
By /s/ Easi Sheratsky
----------------------------
Name:
Position:
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