EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made as of this
30th day of September, 1997 (the "EFFECTIVE DATE"), by and among Cellular
Communications Corp., an Illinois corporation ("CCC"), Areawide Cellular Inc.,
an Illinois corporation ("AREAWIDE"), and Area Plus Paging, Inc., an Illinois
corporation ("AREA PLUS") (CCC, Areawide and Area Plus, individually, a
"SELLER," and collectively, the "SELLERS"), each of Xxxxx Xxxxxx ("XXXXXX") and
Xxxxx X. Xxxxx ("XXXXX") (Xxxxxx and Xxxxx individually, a "SHAREHOLDER" and
collectively, "SHAREHOLDERS"), and Source One Wireless, L.L.C., a limited
liability company formed under the laws of Delaware (the "BUYER"), and Source
One Wireless, Inc., an Illinois corporation (the "PARENT").
RECITALS
A. Areawide is an authorized agent, and Cellular Communications is an
authorized agent or subagent, of Cellular One engaged in the business of
marketing, distributing, selling and servicing cellular communications parts,
equipment and services; and Area Plus is engaged in the business of marketing,
distributing, selling and servicing paging communications parts, equipment and
services (collectively, the "BUSINESS").
B. The Shareholders collectively own 100% of the capital stock of each
of the Sellers and will derive substantial benefit from the consummation of the
transactions contemplated hereby.
C. The Parent owns 100% of the Buyer and will derive substantial
benefit from the consummation of the transactions contemplated hereby.
D. The Buyer desires to acquire from Sellers, and Sellers desire to
sell to the Buyer, pursuant to the terms and subject to the conditions of this
Agreement, substantially all of their properties, assets and rights comprising
the Business, all as more specifically set forth herein.
NOW THEREFORE, in consideration of the foregoing recitals, which are
hereby incorporated herein, and the mutual promises herein contained, the
parties hereby agree as follows:
ARTICLE
1
PURCHASE OF ASSETS
1.1 Purchased Assets. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date (as hereinafter defined), the Buyer
shall purchase from the Sellers, and the Sellers shall sell, transfer, assign
and deliver to the Buyer, free and clear of all liens, security interests,
mortgages and other encumbrances and restrictions whatsoever ("SECURITY
INTERESTS"), all of the tangible and intangible properties, assets and rights of
the Business as a going concern, excepting only the Excluded Assets (as defined
in Section 1.2). The assets, properties and rights to be so conveyed hereunder
(collectively, the "PURCHASED ASSETS") shall include, without limitation, all of
the following assets of the Sellers, wherever located:
(a) a truck (VIN IFDKE37H4SH16841), machinery, fixtures, trade
fixtures and other equipment, together with all parts, tools and
accessories and the like relating thereto ("EQUIPMENT"), including,
without limitation, the Equipment set forth on Schedule 1.1(a) attached
hereto;
(b) all leasehold interests in all retail store locations set
forth on Schedule 1.1(b) attached hereto (which schedule shall indicate
which retail stores are owned ("OWNED RETAIL STORES") and leased
("LEASED RETAIL STORES") and by which Seller), including all retail
stores currently under construction and identified on the Stores in
Process portion of Schedule 1.1(b) attached hereto (collectively, the
"RETAIL STORES");
(c) all office furniture, fixtures and office and computer
equipment and all parts relating thereto ("OFFICE EQUIPMENT");
(d) all materials, inventory and supplies, including, without
limitation, finished goods, packaging or supplies in stock, in transit
and/or on order, labels and components, and other items ("INVENTORY"),
other than the Inventory determined to be obsolete in accordance with
Section 2.2(a) ("EXCLUDED INVENTORY");
(e) all leasehold improvements to (a) - (c) above, as
applicable;
(f) all goodwill incident to or associated with the Business
as a going concern, all telephone numbers, telephone and advertising
listings relating to the Business, customer lists and all other
information and data relating to the customers or suppliers of the
Business, and all product development, packaging development, design
and product patents, patents, patent applications, trademarks, trade
names, service marks, copyrights, computer programs and other software,
trade secrets, processes, know how, engineering, drawings, plans and
product specifications, promotional displays and materials, all other
intellectual property, and any licenses, license agreements and
applications related to any of the foregoing ("INTANGIBLE ASSETS"),
other than the Excluded Intangible Assets;
(g) all rights under each of the contracts and agreements
listed on Schedule 1.1(g) attached hereto, including all security
service agreements and the agreement with Cellular One, except those
contracts and agreements, including any rights, liabilities and
obligations under the Plans, if any, which are also identified on the
Excluded Contracts portion of Schedule 1.1(g) attached hereto
(collectively, the "ASSIGNED CONTRACTS");
(h) all regulatory, business and operating permits, to the
extent assignable;
(i) all operating data, books, files and records, whether in
print, electronic or other media, including, without limitation,
correspondence, financial, sales, market and credit information,
drawings, patterns, slogans, processes, market research and other
research materials and contract documents ("BUSINESS RECORDS");
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(j) all refunds, prepaid rentals, taxes and insurance, and
catalog, packaging, promotional, trade show, advertising and royalty
expenses and unbilled charges and credits; and
(k) all claims, warranties, choices of action, causes in
action, rights of recovery and rights of set-off of any kind relating
to the Purchased Assets, the Assumed Liabilities (as hereinafter
defined) and/or the Business and the right to receive and retain mail
and other communications relating to the Purchased Assets, the Assumed
Liabilities and/or the Business.
1.2 Excluded Assets. Notwithstanding anything in Section l.l to the
contrary, the Purchased Assets shall not include any of the following ("EXCLUDED
ASSETS"):
(a) all cash on hand and in bank accounts and all other cash
or cash equivalents and all marketable and other securities;
(b) all prepaid expenses as set forth on Schedule 1.2(b)
attached hereto;
(c) all passive investments unrelated to the Business made by
the Sellers, all as set forth on Schedule 1.2(c) attached hereto;
(d) all Excluded Inventory, including all obsolete Inventory,
as determined pursuant to Section 2.2(a) of this Agreement;
(e) all accounts and notes receivable ("ACCOUNTS RECEIVABLE"),
and all rights to xxxx customers for products shipped or services
rendered on or prior to Closing or pursuant to the Excluded Inventory;
(f) all of the owned personal property, including furniture,
office equipment and personal items located in the designated office of
Xxxxxx located at 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, and the
corporate offices located at 000 X. Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx;
(g) corporate franchise documentation of Sellers, and all
books and records of Sellers; provided, however, that Buyer shall be
provided with true and correct copies of same;
(h) any rights or liabilities arising under, or with respect
to, the life insurance policies on the Shareholders;
(i) all rights and obligations under the contracts and
agreements identified on the Excluded Contracts portion of Schedule
1.1(g) attached hereto;
(j) all leased and owned automobiles other than the truck
described in Section 1.1(a);
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(k) the Sellers' rights to claims, refunds and causes of
action directly related to the Excluded Assets and the Excluded
Liabilities (as defined below);
(l) the Excluded Intangible Property set forth on Schedule
1.2(l);
(m) the consideration to be received by and the rights of the
Sellers under this Agreement; and
(n) Sellers' cooperative advertising balance.
1.3 Assumed Liabilities. The Buyer shall not assume or in any way
become liable for any liabilities of the Sellers other than the Assumed
Liabilities. For purposes of this Agreement, the term "ASSUMED LIABILITIES"
shall mean the Sellers' obligations with respect to the Assumed Contracts.
Excluded liabilities shall include, but not be limited to any of the following:
(a) Any and all obligations under the sub-agency agreements
with (i) VIVA Communications, (ii) CAROB Communications, (iii) JMS
Cellular, and (iv) HBT Communications, each of which shall be canceled
by Sellers at or prior to Closing;
(b) any and all obligations under the employment agreements
with Xxxx Xxxxxxxx and Xxxxxxx Xxxxxxxxxx;
(c) any unpaid payroll taxes and employee benefits, including
any pension plans;
(d) any rights, liabilities, or obligations arising under, or
with respect to, any of Seller's Plans, as defined in Section 3.16(a)
below, including, but not limited to any rights, liabilities, or
obligations arising under, or with respect to, the health care
continuation requirements under Code Section 4980B and Part 6 of
Subtitle B of Title I of ERISA ("COBRA"), or under applicable state
law; and
(e) trade and accounts payable set forth on the Closing Date
Balance Sheet ("TRADE AND ACCOUNTS PAYABLE") in excess of the value of
Sellers' Inventory less Excluded Inventory, as set forth in Section
2.2.
1.4 Xxxxxxx Money Escrow. Concurrently with the execution of this
Agreement, the Buyer will deposit into an interest bearing escrow account with
First American Title and Trust ("ESCROW AGENT"), the sum of One Hundred Thousand
Dollars ($100,000.00) as xxxxxxx money. If the Closing has not occurred by
October 13, 1997 (due solely to the Buyer's inability to close), the Buyer may
elect to deposit with the Escrow Agent an additional Four Hundred Thousand
Dollars ($400,000.00) as xxxxxxx money, which will have the effect of extending
the Closing Date to no later than October 31, 1997. In the event this Agreement
is terminated prior to Closing for any reason other than Buyer's breach of this
Agreement or the surviving provisions contained in that letter of intent between
the parties hereto dated July 18, 1997, as amended (a "BUYER BREACH"), the
amount so held will immediately be refunded to the Buyer by the Escrow Agent,
together with all interest accrued thereon. In the event of a Buyer Breach, then
the
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Escrow Agent shall pay to Sellers, upon Buyer's order to Escrow Agent (which
will not be unreasonably withheld), all amounts held in escrow will be released
in accordance with Section 5.7. Unless otherwise distributed pursuant to this
Section 1.4, all amounts held in such escrow shall be applied to the Purchase
Price.
ARTICLE
2
CONSIDERATION
2.1 Consideration.
(a) In consideration for the Purchased Assets at Closing,
Buyer shall pay to Sellers the sum of Eleven Million Four Hundred Fifty
Thousand Dollars ($11,450,000) (the "PURCHASE PRICE"), subject to the
Purchase Price Adjustment as set forth in Section 2.2.
(b) The amounts payable under the Consulting Agreements and
the Non-Competition Agreements (as defined herein) and the other
covenants and agreements of the Buyer hereunder and thereunder
constitute additional consideration for the Purchased Assets and the
covenants and agreements of the respective Sellers hereunder and
thereunder.
2.2 Purchase Price Adjustment.
(a) Immediately prior to Closing, Buyer shall conduct (in
Sellers' presence), at Buyer's expense, an examination of the Inventory
to determine what, if any, Inventory may be reasonably considered
obsolete (the "EXCLUDED INVENTORY").
(b) Immediately prior to Closing, Sellers' accountants
("SELLERS' ACCOUNTANTS"), shall conduct, at Sellers' expense, an
examination of the Business sufficient to permit the preparation of a
balance sheet as of the Closing Date (the "CLOSING DATE BALANCE SHEET")
to be delivered to Buyer's accountants at the Closing. The Closing Date
Balance Sheet shall be prepared in accordance with generally accepted
accounting principles consistently applied, except as set forth on
Schedule 2.2(b).
(c) On the Closing Date, the Purchase Price adjustment shall
be calculated and based upon the difference between (i) the Trade and
Accounts Payables reflected on the Closing Date Balance Sheet and (ii)
the book value of the Inventory reflected on the Closing Date Balance
Sheet less the book value of Excluded Inventory, if any (the "Purchase
Price Adjustment"). If the Purchase Price Adjustment so determined is a
positive number, such amount shall be subtracted from the Purchase
Price. If the Purchase Price Adjustment so determined is a negative
number, such amount shall be added to the Purchase Price.
2.3 Payment of Consideration. The consideration specified in Section
2.1 shall be paid as follows:
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(a) On the Closing Date, Buyer shall cause to be transferred
to Sellers the Purchase Price less (i) the Holdback Amount and (ii) the
Xxxxxxx Money held by the escrow agent (which shall be disbursed to
Sellers by the escrow agent at the Closing), by either certified check
or federal wire to a bank account or accounts designated by Sellers in
immediately available funds at the election of the Seller.
(b) On the Closing Date, Buyer shall cause to be transferred
to the Escrow Agent the amount of $300,000 (the "Holdback Amount"),
which shall be kept with the Escrow Agent for the longer of six months
following the Closing Date or until any claim for indemnification made
by Buyer or Parent during said six months has been settled. Thereafter,
the amount remaining in escrow shall be promptly paid to Sellers.
2.4 Prorations. The following prorations relating to the Purchased
Assets will be made as of the Closing Date, with Sellers liable to the extent
such items relate to any time period up to and including the Closing Date and
Buyer liable to the extent such items relate to periods subsequent to the
Closing Date. Except as otherwise specifically provided herein, the net amount
of all such prorations will be settled and paid within 90 days of the Closing
Date:
(a) Personal property taxes, real estate taxes and
assessments, and other taxes, if any, on or with respect to the
Purchased Assets; provided that special assessments for work actually
commenced or levied prior to the date of this Agreement shall be paid
by the Seller.
(b) Rents, additional rents, security deposits, taxes and
other items payable by Sellers under any lease, license, permit,
contract or other agreement or arrangement to be assigned to or assumed
by Buyer.
(c) The amount of rents, taxes and charges for sewer, water,
fuel, telephone, electricity and other utilities; provided that if
practicable, meter readings shall be taken at the Closing Date and the
respective obligations of the parties determined in accordance with
such readings.
(d) All other items normally adjusted in connection with
similar transactions.
2.5 Allocation of Purchase Price. The Sellers and the Buyer agree that,
for tax purposes with respect to the sale of the Purchased Assets, each of them
shall report the Purchase Price as being allocated as set forth on Schedule 2.5
attached hereto. Each party agrees to promptly notify the other if the Internal
Revenue Service questions or challenges the allocations and cooperate with on
another to sustain the allocations.
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ARTICLE
3
REPRESENTATIONS AND WARRANTIES
OF EACH OF THE SELLERS AND THE SHAREHOLDERS
As a material inducement to the Buyer to enter into this Agreement and
consummate the transactions contemplated hereby, each of the Sellers and the
Shareholders, jointly and severally, hereby represent and warrant to the Buyer
that all of the statements contained in this Article 3 are correct and complete
as of the date of this Agreement and will be correct as of the Closing Date.
3.1 Status. Each of the Sellers is a corporation duly organized,
validly existing and in good standing under the laws of the State of Illinois.
The Sellers have all requisite power to own, lease and license the Purchased
Assets and to carry on the Business in the manner and in the places where such
Purchased Assets are owned, leased, licensed or operated and such Business is
conducted. None of the Sellers has a subsidiary.
3.2 Authority for Agreement. Each Seller and Shareholder has all
requisite right, power and authority to enter into this Agreement and the Other
Agreements, as applicable, and to perform their obligations hereunder and
thereunder. The entry into and performance of this Agreement and the Other
Agreements have been duly authorized by all necessary corporate action on the
part of Sellers in accordance with their respective Articles of Incorporation,
By-laws or other organizational or governing documents (collectively, "CHARTER
DOCUMENTS") and applicable law, and this Agreement and the Other Agreements
constitute valid and binding agreements of each Seller and Shareholder, as
applicable, enforceable against each in accordance with their terms, except as
(a) right to indemnity and contribution may be limited by applicable laws and
consideration of public policy; (b) enforceability may be limited by the effect
of applicable bankruptcy, insolvency, moratorium, fraudulent conveyance and
other similar laws affecting creditors rights; (c) enforceability may be limited
by the effect of general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing; and (d)
specific performance or injunctive relief may be unavailable, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
3.3 Sellers' and Shareholders' Consents. Except as set forth in
Schedule 3.3 attached hereto, no consent, approval or authorization of any
governmental authority or any other person or entity is required for the
execution and delivery of this Agreement and the Other Agreements and the
consummation by the Sellers and Shareholders of the transactions contemplated
hereby and thereby.
3.4 No Conflict. Except as set forth in Schedule 3.4 attached hereto,
the execution and delivery of this Agreement and the Other Agreements by the
Sellers and Shareholders, and the consummation of the transactions herein and
therein provided will not: (a) result in a breach of, constitute a default
under, or in any manner release any party thereto from any obligation under any
agreement, document or instrument to which any of the Sellers or Shareholders is
a party, or by which any of the Sellers, Shareholders or any of the Purchased
Assets may be bound or affected; (b) violate any order, writ, injunction or
decree of any court, administrative agency
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or governmental body or require the approval, consent or permission of any
governmental or regulatory body or authority; or (c) violate any provision of
the Charter Documents of any Seller.
3.5 Contracts. Schedule 3.5 attached hereto sets forth each contract,
agreement, instrument or commitment, including open purchase orders, which are
to be assumed by the Buyer or by which the Purchased Assets are bound or
affected. All such contracts are and remain in full force and effect in
accordance with their terms. None of the Sellers or Shareholders nor, to the
Sellers' or Shareholders' knowledge, any other party to any such contract, is in
default, or alleged to be in default, thereunder and there exists no condition
or event which, after notice or lapse of time or both, would constitute such a
default by the Sellers or Shareholders or, to the Sellers' or Shareholders'
knowledge, by any other party to any such contract. No consent from any party to
any such contract is required in order for such contract to be assigned to the
Buyer hereunder and to remain in full force and effect in accordance with its
terms following the Closing.
3.6 Trade and Accounts Payable. All trade and accounts payable of the
Sellers are reflected properly on their respective books and records (including,
on the Closing Date, the Closing Date Balance Sheet), and such payables are
valid payables. Since the Latest Balance Sheet Date, there has not been a
material change in the aggregate amount of the payables of the Sellers.
3.7 Litigation and Governmental Action. Except as set forth on Schedule
3.7 attached hereto, there are no suits, actions or claims, governmental
investigations or inquiries, legal, administrative or arbitration proceedings
pending or, to the knowledge of the Sellers or Shareholders, threatened against
any Seller, or to which any of the Sellers is a party (whether or not covered by
insurance) which in any manner relate to or affect the Purchased Assets or the
Business. There is not outstanding any notice, order, writ, injunction or decree
of any court, governmental agency or arbitration tribunal relating to or
affecting the Purchased Assets or the Business. Sellers and Shareholders shall
remain responsible for claims, disputes and actions set forth on Schedule 3.7.
3.8 Financial Statements; Books and Records. Each of the Sellers has
provided the Buyer with the following financial statements of such Seller
(collectively, the "FINANCIAL STATEMENTS"): (i) balance sheets and related
statements of income, changes in shareholders' equity and cash flows as of and
for the fiscal years ended December 31, 1995 and December 31, 1996; and (ii) the
balance sheet (the "LATEST BALANCE SHEET") and related statements of income and
cash flows for each Seller as of and for the six months ended June 30, 1997 (the
"LATEST BALANCE SHEET DATE"); (iii) the financial statements and information set
forth on Schedule 3.8; and (iv) as of the Closing Date, the Closing Date Balance
Sheet. The Financial Statements are correct and complete, have been prepared in
accordance with generally accepted accounting principles, consistently applied
and fairly present the consolidated financial condition and results of
operations of each Seller as of the times and for the periods referred to
therein; PROVIDED, HOWEVER, that the Latest Balance Sheet and the Closing Date
Balance Sheet and related statements of income and cash flows are subject to
normal year-end adjustments (none of which will be material) and lack footnotes,
but nonetheless reflect all adjustments necessary to a fair presentation of the
results for the interim period presented thereby.
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3.9 Recent Events. Except as set forth on Schedule 3.9, since the
Latest Balance Sheet Date, Sellers have conducted the Business (including the
payment of payables, collection of receivables and purchase and production of
inventory) only in the ordinary course of business in accordance with past
customs and practices. Without limiting the generality of the foregoing, since
the Latest Balance Sheet Date, no Seller has:
(a) suffered any material loss or damage to, or sold, leased,
transferred or assigned, any of the Purchased Assets, tangible or
intangible, other than sales of Inventory in the ordinary course of
business;
(b) changed the relationships with any customer or supplier
which might reasonably be expected to materially and adversely affect
any of the Purchased Assets, the Business or the prospects of the Buyer
with respect to any of the foregoing;
(c) entered into any transaction, arrangement or contract
with, or distributed or transferred any cash, property or other assets
to (whether as a dividend, redemption payment, debt payment or
otherwise), any officer, director, shareholder, employee, agent or
other insider or Affiliate of any Seller (other than the payment of
wages, salaries and employee benefits in the ordinary course of
business);
(d) made or committed to make any capital expenditures or
entered into any other material transaction outside the ordinary course
of business; or
(e) entered into any employment agreement or collective
bargaining agreement or granted any increase in excess of $3,000.00 on
an annual basis in the salary of any officer or employee or paid any
bonus to any such officer or employee.
3.10 Tax Matters. Each Seller which is an owner of the Purchased Assets
has filed all tax returns that it was required to file for periods on or prior
to the date hereof. All such tax returns were correct and complete in all
material respects and accurately reflect all liability for taxes for the periods
covered thereby for all periods ending on or prior to the date hereof. All taxes
owed and due by such Sellers through the Closing Date (whether or not shown on
any tax return) have been or will be paid or have been adequately reflected on
the Latest Balance Sheet. None of the Sellers has received notice of any claim
made by any authority in any jurisdiction where the Sellers do not file tax
returns that such Sellers is or may be subject to taxation by that jurisdiction
as a result of the conduct of the Business. There are no Security Interests on
any of the Purchased Assets that arose in connection with any failure (or
alleged failure) to pay any tax when due. The Sellers have withheld and paid
when due all taxes required to have been withheld and paid in connection with
the operation of the Business, including, without limitation, in connection with
amounts paid or owing to any employee, creditor, independent contractor, or
other third party. The Sellers have duly collected and remitted all sales and
use taxes resulting from the operation of the Business in accordance with the
applicable legislation.
3.11 Title and Condition of Properties.
(a) Leased Real Property. The leases described for Leased
Retail Stores and the warehouse lease on Schedule 3.11(a) attached
hereto (the "PROPERTY LEASES") cover all of
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the real estate leased by the Sellers or Shareholders in connection
with the Business. Each of the Property Leases is in full force and
effect and the applicable Sellers hold valid and existing leasehold
interests under each of such Property Leases. The Sellers have
delivered to Buyer complete and accurate copies of each of the Property
Leases, and none of such Property Leases has been modified in any
respect, except to the extent that such modifications are disclosed by
the copies delivered to Buyer. No Seller is in material default, and no
circumstances exist which would result in such default (including upon
the giving of notice or the passage of time, or both), under any of
such Property Leases, and no other party thereto has the right to
terminate, accelerate performance under or otherwise modify any of such
leases. To the knowledge of the Sellers and Shareholders, no lessor
under any such lease is in default under any of such leases in its
duties to the lessee. Neither the Sellers nor the Shareholders have
assigned, transferred, conveyed, subjected to a Security Interest, or
otherwise encumbered any interest in any of the Property Leases.
(b) Title; Condition and Sufficiency of Assets. Sellers own
good and marketable title, free and clear of all Security Interests, to
all of the Purchased Assets and the Owned Retail Stores. The Purchased
Assets and the Retail Stores are in good condition and repair, except
for ordinary wear and tear not caused by neglect, and are useable in
the ordinary course of business. The Purchased Assets and the Retail
Stores collectively include all assets necessary to the conduct of the
Business as presently conducted and all assets which were used to
conduct the Business since the Latest Balance Sheet Date, other than
assets sold or otherwise disposed of in the ordinary course of business
to non-affiliated third parties. No Seller other than the recipients of
the Final Purchase Price or portion thereof own any assets, real or
personal, which are used in the Business.
3.12 Intellectual Property. Other than the names "Areawide Cellular,"
"Area Plus Paging" and "Cellular One," Sellers do not own or license any
patents, trademarks, copyrights, material trade secrets or other proprietary
rights, or any licenses or applications relating to the foregoing ("INTELLECTUAL
PROPERTY"), which are used in or necessary for the conduct of the Business as is
currently conducted. The Seller owns or has the right to use all the
Intellectual Property necessary to market, sell and license the products and
services currently marketed, produced, sold and licensed by the Business, and to
conduct the Business as presently conducted and currently contemplated to be
conducted, all such rights are being sold or assigned to the Buyer pursuant
hereto, and the consummation of the transactions contemplated hereby will not
alter or impair any such rights, including any right of the Business to use or
sublicense any Intellectual Property owned by others. No Intangible Assets owned
by any Seller in connection with the Business, and no product or service of the
Business, practiced, offered, licensed, sold or under development by the
Business, infringes any trademark, trade name, copyright, trade secret, patent,
right of publicity, right of privacy or other proprietary right of any Person or
would give rise to an obligation to render an accounting to any Person as a
result of co-authorship, co-invention or an express or implied contract for any
use or transfer. To the knowledge of the Sellers and Shareholders, no Intangible
Assets used by any Seller in connection with the Business, including the name
"Cellular One," infringes any trademark, trade name, copyright, trade secret,
patent, right of publicity, right of privacy or other proprietary right of any
Person.
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3.13 Inventory. All Inventory consists of items of a quantity and
quality useable and/or salable in the ordinary course of business, except for
items of obsolete material and materials below standard quality, all of which
have been written down on the Latest Balance Sheet to estimated realizable
market value. With the exception of items of below standard quality which have
been written down to their estimated realizable market value, the Inventory is
free from defects in materials and/or workmanship. The product mix of the
Inventory is not materially out of balance in relation to prior years and is
consistent with each Seller's expectations of the demands of its respective
customers. All Inventory (other than Inventory in transit) is located at the
Retail Stores or the warehouse listed on Schedules 3.5 and 3.11(a) attached
hereto.
3.14 Customers. To the knowledge of the Sellers and the Shareholders,
no customer or group of affiliated customers whose purchases individually or in
the aggregate constituted more than ten percent (10%) of the sales of the
Business has given any notice of intent to materially curtail, cancel or
terminate its business relationship with Sellers.
3.15 Compensation and Status of Employees.
(a) No key employee or group of employees has informed the
Sellers or the Shareholders of any plans to terminate their employment
with the Sellers generally or as a result of the transactions
contemplated hereby or otherwise. None of the Sellers is a party to or
bound by any collective bargaining agreement, and the Sellers have not
experienced any strikes, grievances, other collective bargaining
disputes or, to the knowledge of the Sellers or the Shareholders,
claims of unfair labor practices. The Sellers and the Shareholders have
no knowledge of any organizational effort presently being made or
threatened by or on behalf of any labor union with respect to employees
of the Sellers.
(b) Schedule 3.15 attached hereto contains a true, correct and
complete list setting forth the names and current salaries or rates of
compensation of all employees of the Sellers and independent
contractors who render services to the Sellers on more than a single
occasion. Except as disclosed on Schedule 3.15, the Sellers have no
unsatisfied liability to any previously terminated employee or
independent contractor. The Sellers have disclosed all written employee
handbooks, policies, programs and arrangements to the Buyer.
(c) Except for the two employees named in Section 1.3(b), all
persons employed by the Sellers are employees at will or otherwise
employed such that the Sellers may lawfully terminate their employment
at any time, with or without cause, without creating any material cause
of action against the Sellers or otherwise giving rise to any material
liability of the Sellers for wrongful discharge, breach of contract or
tort.
(d) Except as disclosed on Schedule 3.15 attached hereto, the
Sellers have complied in all material respects with all applicable laws
relating to labor, including, without limitation, any provisions
thereof relating to wages, termination pay, vacation pay, fringe
benefits, collective bargaining and the payment and/or accrual of the
same and all insurance and all other costs and expenses applicable
thereto, and the Sellers are
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not liable for any arrearage, or any costs or penalties for failure to
comply with any of the foregoing. Without limiting the generality of
the foregoing, the Sellers have not incurred a violation of COBRA or
other applicable state insurance continuation law. No material COBRA or
other state insurance continuation law violation exists or will exist
with respect to any employees of the Sellers prior to and including the
Effective Date, nor will any such violation occur as a result of the
transactions contemplated hereby.
(e) Each person whom the Sellers have retained as an
independent contractor during the past five years qualifies as an
independent contractor and not as an employee of the Sellers under the
Code and all applicable state laws. Neither the execution of this
Agreement nor the consummation of the transactions contemplated hereby
shall cause the Sellers to be in breach of any agreement with any
employee, contractor or consultant or cause the Sellers to be liable to
pay any severance or other amount to any employee, contractor or
consultant of the Sellers.
3.16 Employee Benefit Plans.
(a) For purposes of this Agreement, the term "Plans" means (i)
all employee benefit plans as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"); (ii) all
other severance pay, deferred compensation, excess benefit, vacation,
stock, stock option, fringe benefit and incentive plans, contracts,
schemes, programs, funds, commitments, or arrangements of any kind; and
(iii) all other plans, contracts, schemes, programs, funds,
commitments, or arrangements providing money, services, property, or
other benefits, whether written or oral, formal or informal, qualified
or nonqualified, funded or unfunded, and including any that have been
frozen or terminated, which pertain to any employee, former employee,
director, officer, shareholder, consultant, or independent contractor
of Sellers or any ERISA Affiliate of Sellers and (i) to which Sellers
or any ERISA Affiliate of Sellers are or have been a party or by which
any of them is or has been bound or (ii) with respect to which Sellers
or any ERISA Affiliate of Sellers have made any payments or
contributions since December 31, 1986 or (iii) to which Sellers or any
ERISA Affiliate of Sellers may otherwise have any liability (including
any such plan or arrangement formerly maintained by Sellers or any
ERISA Affiliate of Sellers). All Plans are listed and briefly described
in Schedule 3.1, attached hereto. For purposes of this Agreement,
"ERISA Affiliate" shall mean any corporation or other business entity
that is included in a controlled group of corporations within which the
Sellers are also included, as provided in Section 414(b) of the Code;
or which is a trade or business under common control with the Sellers,
as provided in Section 414(c) of the Code; or which constitutes a
member of an affiliated service group within which the Sellers are also
included, as provided in Section 414(m) of the Code; or which is
required to be aggregated with the Sellers pursuant to regulations
issued under Section 414(o) of the Code. All ERISA Affiliates are
listed in Schedule 3.16.
(b) Each Plan is in compliance with its terms and with ERISA
and other applicable laws (including, without limitation, compliance
with the health care continuation requirements of COBRA and any
proposed or final regulations promulgated thereunder), and with any
applicable collective bargaining agreement and all other
12
agreements and instruments applicable to any Plan. Schedule 3.16
attached hereto sets forth each former employee of the Company or its
ERISA Affiliates entitled to COBRA benefits and the remaining period of
such benefits. Except as set forth in Schedule 3.16, Sellers and each
applicable ERISA Affiliate of Sellers have received favorable
determination letters as to the qualification under the Code of each
pension plan, as defined in Section 3(2) of ERISA ("Pension Plan"), and
there have been no amendments or other developments since the date of
such determination letters which would cause the loss of such qualified
status. No violation of ERISA has at any time occurred in connection
with the administration of any of the Plans, and there are no actions,
suits, or claims (other than routine, non-contested claims for
benefits) pending or threatened against the Plans, or any administrator
or fiduciary thereof, which could result in any liability. Each Plan
can be terminated within thirty days, without payment of any additional
contribution or amount and, except as otherwise mandated by ERISA,
without the vesting or acceleration of any benefits promised by such
Plan.
(c) Sellers and ERISA Affiliates of Sellers have heretofore
delivered to Buyer accurate copies of all past and present Plan texts
and insurance contracts including any amendments thereto (including
descriptions of vacation, severance pay, sickness, and separation
policies). With respect to such past and present Plans, Schedule 3.16,
attached hereto, contains a true and complete list of (and Sellers and
all ERISA Affiliates of Sellers have heretofore delivered to Buyer true
and complete copies of):
(i) the Plan documents (and any applicable trust
agreement, investment management agreement, administrative
service contract or insurance contract);
(ii) the most recent Internal Revenue Service
determination letter relating to each of the Pension Plans and
welfare plans, as defined in Section 3(1) of ERISA ("Welfare
Plans"), referred to in Paragraph (d) below;
(iii) the three (3) most recent Annual Reports (Form
5500 Series) and accompanying schedules for each of the Plans
as filed pursuant to applicable law;
(iv) the summary plan description (as currently in
effect) and any summary of material modification for each of
the Plans;
(v) the most recent summary annual report furnished
for each of the Plans;
(vi) the most recent actuarial valuations, if
applicable, and latest financial statements for each of the
Plans; and
(vii) all documents filed with the Internal Revenue
Service, Department of Labor or Pension Benefit Guaranty
Corporation since January 1, 1991.
13
Except as set forth in Schedule 3.16(c), there is and has been
no violation of ERISA known to Sellers or any ERISA Affiliate of
Sellers with respect to the filing of applicable reports, documents,
and notices regarding such past or present Plans with the Secretary of
Labor or the Secretary of the Treasury or the furnishing of such
documents to the participants or beneficiaries of such Plans and no
material adverse change has occurred with respect to the matters
covered by such reports, documents, and notices.
(d) Each funded Plan that is a Welfare Plan, the benefits
under which are not provided exclusively from the assets of the Sellers
or any ERISA Affiliate of Sellers or through insurance contracts, is
qualified under Section 501(c)(9) or Section 501(c)(17) of the Code;
all Plan assets that are not held by a regulated insurance company are
invested in a separate trust, or in a trust with one or more other
similar plans under which the assets of each plan are separately
accounted for and available only to provide benefits to employees and
beneficiaries covered under the Plan and to pay allocable
administrative expenses. Each insurance contract through which benefits
under a Plan are provided provides benefits only for employees and
dependents covered under the Plan. Each Plan is maintained by Sellers
or any ERISA Affiliate of Sellers under a plan document which does not
provide for other participating employers except for Sellers or any
ERISA Affiliate of Sellers; and, except as disclosed in Schedule 3.16
attached hereto, no Plan provides or has provided credit with respect
to service other than with Sellers or any ERISA Affiliate of Sellers.
(e) Neither Sellers nor any ERISA Affiliate of Sellers nor any
of their employees, shareholders, or directors have engaged in any
transaction in connection with which any of them would be subject
either to a civil penalty assessed pursuant to Section 502 of ERISA or
a tax imposed by Section 4975 of the Code. The execution and
performance of this Agreement will not involve any prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975
of the Code.
(f) Except as set forth in Schedule 3.16 attached hereto, none
of the assets of any of the Plans is or has been invested in any
property constituting employer real property or any employer security
within the meaning of Section 407(d) of ERISA. The foregoing
representation is to the best knowledge of Sellers and any ERISA
Affiliate of Sellers with respect to assets which are or were invested
in collective or commingled trust funds established and maintained by
entities unrelated to Sellers.
(g) The Sellers maintain no defined benefit plans as that term
is defined in Section 3(35) of ERISA.
(h) Full payment as of the Effective Date has been fully made
or adequately provided for on the books and consolidated financial
statements of the Sellers with respect to: (i) all amounts and premiums
which Sellers and any ERISA Affiliate of Sellers are required, under
the terms of all Plans, to have paid as contributions to such Plans as
of the last day of the most recent fiscal year prior to the Effective
Date and (ii) all pro rata amounts which Sellers and any ERISA
Affiliate of Sellers are required to pay as contributions to each such
Plan for the fiscal year that includes the Effective Date.
14
(i) The execution and performance of this Agreement will not
constitute a stated triggering event under any Plan or employment
agreement that will (i) result in any payment (whether of severance pay
or otherwise) becoming due to any employee of Sellers or any ERISA
Affiliate of Sellers, (ii) accelerate the time of payment or vesting or
increase the amount of compensation due under any Plan or employment
agreement, (iii) cause any individual to accrue or receive additional
benefits, service or accelerated rights to payment of benefits under
any Plan or employment agreement, or (iv) directly or indirectly cause
the Sellers or any ERISA Affiliate of the Sellers to transfer or set
aside any assets to fund or otherwise provide for benefits for any
individual.
(j) Neither Sellers nor any ERISA Affiliate of Sellers
provides, nor have they at any time provided, coverage under any
Welfare Plan (including, but not limited to, life insurance,
disability, medical, dental, prescription drugs, or accidental death or
dismemberment) to any of their retirees, other than any continuation or
conversion coverage which any such retiree may have purchased at his
own expense.
(k) The financial statements of each Pension Plan as of the
end of the most recent plan year, and the list of the investments of
such Pension Plan as of December 31, 1996, as set forth in Schedule
3.16 attached hereto accurately reflect the financial conditions of the
Pension Plans, and there have been no material changes in such
investments between such date and the Closing Date.
(l) There have been no statements, either written or oral, or
communications made or materials provided to any employee or former
employee of the Sellers or any ERISA Affiliate of the Sellers by any
person that provide for or could be construed as a contract or promise
by the Sellers or any ERISA Affiliate to provide for any pension,
welfare, or other insurance-type benefits to any such employee or
former employee, whether before or after retirement, other than
benefits under the Plans.
(m) The Sellers do not participate in, or contribute to, any
multiemployer plans, as that term is defined in Section 3(37) of ERISA.
3.17 Permits; Compliance with Laws. Schedule 3.17 attached hereto lists
all governmental and regulatory licenses, authorizations, franchises,
certificates, permits and approvals, and all quality, safety and other industry
group certifications and approvals ("PERMITS") necessary to the conduct the
Business and the use and operation of the Purchased Assets as currently
conducted. All such Permits are in full force and effect, and all of such
Permits are adequate for the operation of the Business as it is presently being
conducted. There are no violations by the Sellers of, or any claims or
proceedings pending or, to the knowledge of the Sellers and Shareholders,
threatened, challenging the validity of or seeking to discontinue, any such
Permits. Sellers are now in compliance in all material respects with and have
not materially violated any applicable law, rule, regulation or order of all
applicable federal, state and local governmental authorities including without
limitation, laws relating to pricing practices and competition, and no notice,
claim, charge, complaint, action, suit, proceeding, investigation or hearing has
been received by Sellers or filed, commenced or, to the knowledge of the Sellers
and Shareholders, threatened, against Sellers alleging any such violation
related to the Business.
15
Without limiting the generality of the foregoing, Sellers have complied and
continue to comply in all material respects with all Environmental, Health, and
Safety Laws (as defined in Section 9.1), and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed, commenced or is pending or, to the knowledge of the Sellers and
Shareholders, threatened against the Sellers alleging any failure so to comply,
in each case as related to the Business. All Hazardous Substances (as defined in
Section 9.1) have at all times been and continue to be used, handled stored and
disposed of by the Business in compliance with all Environmental, Health and
Safety Laws. Sellers have not handled or disposed of any substance, arranged for
the disposal of any substance, exposed any employee or other individual to any
substance or condition, or owned or operated any property or facility in any
manner or any other fact or circumstances that could form the basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against the Business, the Purchased Assets or any
Retail Store giving rise to any liability for damage to any site, location, or
body of water (surface or subsurface), for any illness of or personal injury to
any employee or other individual, or for any reason under any Environmental,
Health, and Safety Law.
3.18 Insurance. Schedule 3.18 attached hereto sets forth an accurate
summary description of each insurance policy to which any of the Sellers is or
within the past two (2) years has been a party, a named insured, or otherwise
the beneficiary of coverage at any time relating in whole or in part to the
Business. With respect to each such insurance policy: (i) the policy is legal,
valid, binding, enforceable, and in full force and effect; (ii) neither the
Sellers nor, to the knowledge of the Sellers and Shareholders, any other party
to the policy, is in breach or default under the policy; and (iii) no party to
the policy has repudiated any provision thereof. Sellers have supplied the Buyer
with accurate and complete loss run reports for the past two years under all
such policies.
3.19 Product Warranty. Each product sold, leased, or delivered by the
Business has been in material conformity with all applicable contractual
commitments and all express and implied warranties, and Sellers have no
liability for replacement or repair thereof or other damages in connection
therewith, subject only to the reserve for product warranty claims set forth on
the face of the Latest Balance Sheet. No product sold, leased, licensed or
delivered by the Business is subject to any guaranty, warranty, or other
indemnity beyond the applicable standard terms and conditions of license and
sale and such other indemnities and warranties disclosed on the Warranty
Schedule attached hereto.
3.20 Product Liability. Sellers have no absolute or contingent
liability and there is no present, and the Sellers and Shareholders have no
knowledge of any future basis for any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against Sellers giving rise to
any absolute or contingent liability arising out of any loss or injury to
individuals or property, as a result of the ownership, possession, or use of any
product sold, leased, licensed or delivered by Sellers.
3.21 Disclosure. No statement of fact by the Sellers or Shareholders
contained in this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary in order
to make the statements herein or therein contained, in
16
the light of the circumstances under which they were made, not misleading as of
the date to which it speaks.
ARTICLE
4
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE PARENT
As a material inducement to the Sellers to enter into and perform their
respective obligations under this Agreement, the Buyer and the Parent, jointly
and severally, make to Sellers and Shareholders the representations and
warranties set forth below.
4.1 Status. The Buyer is a limited liability company duly formed,
validly existing, and in good standing under the laws of the State of Delaware,
is qualified to do business in the State of Illinois, and is an affiliate of the
Parent. The Parent is a corporation duly organized, validly existing and in good
standing under the laws of the State of Illinois.
4.2 Authority for Agreement. Each of the Buyer and the Parent has full
right, power and authority to enter into this Agreement and to perform its
obligations hereunder. The entry into and performance hereof have been duly
authorized by all necessary action on the part of each of the Buyer and the
Parent in accordance with its respective articles of organization and operating
agreement or charter and by-laws, as the case may be, and applicable law, and
this Agreement constitutes a valid agreement, binding upon and enforceable
against the Buyer and the Parent in accordance with its terms.
4.3 No Conflict. The execution and delivery of this Agreement and any
Other Agreements by the Buyer and the Parent, and the consummation of the
transactions herein and therein provided will not: (a) result in a breach of,
constitute a default under, or in any manner release any party thereto from any
obligation under any agreement, document or instrument to which the Buyer or the
Parent is a party, may be bound or affected; (b) violate any order, writ,
injunction or decree of any court, administrative agency or governmental body or
require the approval, consent or permission of any governmental or regulatory
body or authority; or (c) violate any provision of the articles of organization
or operating agreement of the Buyer or the charter or by-laws of the Parent.
ARTICLE
5
CLOSING
5.1 Time and Place of Closing. The consummation of this purchase and
sale of the Purchased Assets and the related transactions and deliveries herein
provided for ("CLOSING") shall take place at 10:00 a.m., Chicago time, on
October 13, 1997 ("CLOSING DATE") (unless extended at the option of Buyer
pursuant to Section 1.4 of this Agreement to no later than October 31, 1997) at
the offices of Buyer's attorneys, Xxxxxxxx & Xxxxxx, Ltd., located at 00 Xxxxx
Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other time or
place as the parties may mutually agree.
17
5.2 Conditions to Obligations of Each Party. The respective obligations
of each party to consummate the transactions contemplated hereby shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) There shall have been no law, statute, rule or regulation,
domestic or foreign, enacted or promulgated which would make
consummation of the transactions contemplated hereby illegal and all
required regulatory approvals shall have been obtained; and
(b) No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction wherein an
unfavorable judgment, order, decree, stipulation, injunction, or charge
would (i) prevent consummation of the transactions contemplated hereby;
(ii) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation of the transactions contemplated
hereby; or (iii) impose any absolute or contingent liability upon any
party as a result of the consummation of the transactions contemplated
hereby (and no such judgment, order, decree, stipulation, injunction,
or charge shall be in effect).
Any party may waive any condition, in whole or in part, specified in this
Section 5.2 if such party executes a writing so stating at or prior to the
Closing Date.
5.3 Conditions to Obligation of the Buyer and Parent. The obligations
of the Buyer and Parent to consummate the transactions contemplated hereby are
also subject to satisfaction at or prior to the Closing Date of the following
further conditions:
(a) The representations and warranties of the Sellers and
Shareholders set forth in this Agreement shall be true and correct in
all material respects at and as of the Closing Date, and the Buyer
shall have received a certificate to such effect from each of the
Sellers and the Shareholders;
(b) Each of the Sellers and Shareholders shall have performed
and complied with all of their respective covenants hereunder through
the Closing Date;
(c) The Sellers shall have procured all of the third-party
consents and approvals necessary to consummate the transactions
contemplated hereby, including but not limited to any required consents
with regard to the transfer of the Property Leases, without payment by
or liability to the Buyer; provided, however, if consents cannot be
obtained from any of the three lessors set forth on Schedule 5.3(c),
the Buyer hereby agrees to waive said condition with respect to such
lessors; provided, further, that the Purchase Price shall be adjusted
as set forth in Schedule 5.3(c).
(d) The Inventory levels at the Closing shall be at customary
levels based on historic practices, subject to reductions approved in
advance in writing by Buyer;
(e) The execution by one of the Sellers of a new agreement
with Cellular One, which shall be substantially in the form and
substance to the form of Exhibit A attached hereto; provided, however,
that the Agreement must exclude paging from "Authorized
18
Services" as defined therein, the term must be for five years, and
consent to assign the contract to Buyer or its affiliate by Cellular
One;
(f) There shall not have been, since the Latest Balance Sheet
Date, any change in or effect on the Purchased Assets, the Business or
its customer or employee relations or prospects which results or may
reasonably be expected to result, in a material adverse effect on the
Business;
(g) The Sellers will have afforded the Buyer and its counsel,
accountants, consultants and representatives with an opportunity to
conduct a full and complete review and investigation as set forth in
Section 6.1 below; and
(h) The parties hereto (other than the Buyer and the Parent)
shall have executed the Other Documents, as applicable.
The Buyer may waive any condition, in whole or in part, specified in this
Section 5.3 if it executes a writing so stating at or prior to the Closing Date.
5.4 Conditions to Obligations of the Sellers and Shareholders. The
obligations of the Sellers and Shareholders to consummate the transactions
contemplated hereby are subject to satisfaction at or prior to the Closing Date
of the following conditions:
(a) The representations and warranties of the Buyer set forth
in this Agreement shall be true and correct in all material respects at
and as of the Closing Date and the Sellers shall have received a
certificate from the president of the Buyer and Parent to such effect;
and
(b) The Buyer shall have performed and complied with all of
its covenants hereunder through the Closing Date.
Each of the Sellers may waive, in whole or in part, any condition specified in
this Section 5.4 if it executes a writing so stating at or prior to the Closing
Date.
5.5 Documents to be Delivered and Actions to be Taken by the Sellers
and Shareholders. At the Closing, the following instruments, documents and
showings shall be delivered or provided to Buyer by or on behalf of the Sellers:
(a) Such executed bills of sale and other instruments of
assignment, conveyance and transfer as shall be necessary to vest in
Buyer all of Sellers' right, title and interest in and to the Purchased
Assets, free and clear of all Security Interests; and the Sellers shall
take all other actions necessary to place Buyer in immediate possession
of the Purchased Assets on the Closing Date;
(b) Executed counterparts to a consulting agreement
substantially in the form of Exhibit B hereto (the "CONSULTING
AGREEMENT") by each of the Shareholders;
19
(c) Executed counterparts to a non-competition agreement
substantially in the form of Exhibit C hereto (the "NON-COMPETITION
AGREEMENT") by each of the Shareholders;
(d) Certified copies of resolutions of each of the Sellers'
Board of Directors and shareholders authorizing the execution of this
Agreement and the consummation of the transactions herein provided for;
(e) (i) a copy of the Articles of Incorporation, as amended,
of each Seller, certified by the Secretary of State of Illinois and a
good standing certificate issued by the Secretary of State of Illinois
in respect of each Seller no more than twenty days prior to the
Closing; and (ii) a copy of the By-laws of each Seller, certified by
the Secretary or Assistant Secretary of each such Seller;
(f) Such documents as may be necessary to assign to Buyer all
of the Assigned Contracts and Permits and the consents of all third
parties and governmental authorities necessary to approve the
assignment of the Assigned Contracts and Permits to Buyer;
(g) From the holders of all of the Security Interests
affecting the Purchased Assets, irrevocable releases of such Security
Interests effective upon the Closing Date;
(h) Copies of all of the Sellers' books, records, documents
and other written materials related to the Business and all keys and
combinations, as appropriate, to all locks used on or in connection
with any of the Purchased Assets or otherwise in connection with the
Business; and
(i) A written opinion of Fox, Swiebel & Xxxxx, Sellers' and
Shareholders' counsel, dated as of the Closing Date, addressed to Buyer
and Parent, in a form mutually agreeable to the parties hereto.
5.6 Documents to be Delivered by the Buyer. At the Closing, the Buyer
shall pay the Purchase Price to Sellers in accordance with Section 2.2 of this
Agreement and deliver or provide the following instruments, documents and
showings to the Sellers:
(a) Executed counterparts to the Consulting Agreements and the
Non-Competition Agreements;
(b) Certified copies of resolutions of its Managers
authorizing the execution of this Agreement and the Other Agreements
and the consummation of the transactions provided for herein and
therein; and
(c) A written opinion of Xxxxxxxx & Xxxxxx, Ltd., Buyer's and
Parent's counsel, dated as of the Closing Date, addressed to Sellers
and Shareholders, in a form mutually agreeable to the parties hereto.
20
5.7 Default and Remedies.
(a) Default by Buyer or Parent. If Buyer or Parent should fail
to consummate the transaction contemplated herein for any reason other
than the failure of a condition precedent set forth in Section 5.3
hereof or a default by Sellers or Shareholders under the terms hereof,
the Sellers and Shareholders may elect either of the following
remedies:
(1) payment of the Xxxxxxx Money plus any interest thereon
shall be delivered to Sellers and Shareholders not as a
penalty but as liquidated damages in full satisfaction of
Buyer's and Parent's obligations hereunder, as Sellers' and
Shareholders' sole and exclusive remedy; provided, however,
that if only $100,000 of Xxxxxxx Money has been deposited with
the Escrow Agent, an additional $150,000 shall be promptly
paid by Buyer to Sellers; thereafter, this Agreement shall be
deemed null and void and of no further force and effect and no
other damages, rights, or remedies shall in any case be
collectible, enforceable or available to Sellers or
Shareholders; or
(2) (i) to enforce specific performance of this Agreement and
have the right to recover damages suffered by Sellers and
Shareholders by reason of any failure to acquire the Purchased
Assets; (ii) to bring a suit for damages for breach of this
Agreement; (iii) to terminate this Agreement whereupon Buyer
and Parent, jointly and severally, will reimburse Sellers and
Shareholders for Sellers' and Shareholders' out-of-pocket
expenses incurred with respect to this transaction, including,
without limitation, reasonable attorneys' and accountant's
fees and any other costs; and (iv) pursue any and all remedies
at law or equity.
No delay or omission in the exercise of any right or remedy accruing to
Seller or Shareholders upon a breach by Buyer or Parent under this
Agreement shall impair such right or remedy or be construed as a waiver
of any such breach theretofore or thereafter occurring. The waiver by
Sellers or Shareholders of any condition or the breach of any term,
covenant or condition herein contained shall not be deemed to be a
waiver of any other term, covenant, condition or subsequent breach of
the same or any other term, covenant or condition contained herein.
(b) Default by Sellers or Shareholders. If Sellers or
Shareholders should fail to consummate the transaction contemplated
herein for any reason other than the failure of a condition precedent
set forth in Section 5.4 hereof (that is not waived by Buyer) or
default by Buyer or Parent under the terms hereof, Buyer and Parent may
elect any one or more of the following remedies: (i) to enforce
specific performance of this Agreement and have the right to recover,
damages suffered by Buyer and Parent by reason of any delay in the
acquisition of the Purchased Assets including, without limitation,
damages incurred by Buyer and Parent by reason of any exceptions or
defects intentionally imposed by Sellers or Shareholders upon the
Purchased Assets for the purpose of avoiding its obligations hereunder;
(ii) to bring a suit for damages for breach of this Agreement; (iii) to
terminate this Agreement whereupon Sellers and Shareholders, jointly
21
and severally, will reimburse Buyer and Parent for Buyer's and Parent's
out-of-pocket expenses incurred with respect to this transaction,
including, without limitation, reasonable attorneys' and accountant's
fees and any other costs; and (iv) pursue any and all remedies at law
or equity. In any event, the Xxxxxxx Money plus the interest thereon
shall be promptly returned to Buyer. No delay or omission in the
exercise of any right or remedy accruing to Buyer or Parent upon a
breach by Sellers or Shareholders under this Agreement shall impair
such right or remedy or be construed as a waiver of any such breach
theretofore or thereafter occurring. The waiver by Buyer or Parent of
any condition or the breach of any term, covenant or condition herein
contained shall not be deemed to be a waiver of any other term,
covenant, condition or subsequent breach of the same or any other term,
covenant or condition contained herein.
ARTICLE
6
ADDITIONAL AGREEMENTS
6.1 Business Review. During the period from the date hereof to the
Closing, Buyer will continue to be permitted to conduct a full and complete
review and investigation, including legal and financial audits, of the business
and affairs of the Sellers and to obtain such information as may be necessary or
desirable to permit Buyer to investigate the Business and each Seller's
relationships with its respective suppliers, customers, distributors,
independent contractors and employees, including without limitation
documentation of its product licenses, sales agreements, office leases, patents,
copyrights, trade secrets, technology licenses and agreements with vendors and
customers. The Sellers and Shareholders agree to give Buyer and its counsel,
accountants, consultants and representatives full access during normal business
hours to all of the Seller's premises and all of its files, records, contracts
and other documents and properties, and personnel, as Buyer or its counsel,
accountants, consultants or representatives may reasonably request. Buyer shall
conduct such business review in such a manner as to minimize any disruption of
the day to day operations of the Sellers.
6.2 Conduct of Business. From the date hereof until the Closing, except
as set forth in Section 6.3, the Sellers will carry on the Business and
operations in the usual, regular and ordinary manner and, absent the prior
written consent of Buyer, no Seller will, nor will either Shareholder permit any
Seller to:
(i) change, alter or make any employment contracts or
arrangements with any of its management personnel or make, adopt,
alter, revise or amend any pension and/or profit sharing, bonus, stock
option or other employee benefit plan;
(ii) issue, sell or become contractually committed to issue or
sell any shares or other securities of such Seller;
(iii) split, combine, reclassify or redeem any capital stock
of such Seller;
(iv) sell or dispose of any of the Purchased Assets, other
than sales of Inventory in the ordinary course of business;
22
(v) compromise any debt or claim except for adjustments made
with respect to contracts for the purchase of supplies and materials or
for the sale of products or services in the ordinary course of
business, which in the aggregate are not material;
(vi) other than in the ordinary course of business, consistent
with past custom and practice, enter into any transaction, incur any
obligation, or incur or make any payment in respect of any liabilities;
(vii) except for normal increases in the rate of compensation
to non-executive personnel, increase the rate of compensation to any
officers or employees of such Seller;
(viii) alter or amend in any manner the Certificate of
Incorporation or By-laws of such Seller;
(ix) alter, amend or enter into any licensing or contractual
arrangements with respect to any Intellectual Property of such Seller,
other than in the ordinary course of business; or
(x) take any other action of the type referred to in Section
3.9.
6.3 Permitted Transactions. Notwithstanding any provisions of this
Agreement to the contrary, the Sellers shall have distributed and shall be
permitted to continue to distribute to Shareholders all cash in excess of
amounts necessary to meet normal working capital needs.
6.4 Exclusivity. Recognizing that the investigations contemplated by
this Agreement will require Buyer to expend significant time and expense, the
Sellers and Shareholders agree that between the date of this Agreement and the
Closing Date, neither the Sellers nor the Shareholders, nor any of the Sellers'
directors, officers, representatives or other agents will encourage any offers
from, solicit, encourage or initiate any discussions with, engage in
negotiations with, or provide any information to any Person or group or Persons,
other than Buyer and its officers, employees and agents, concerning, or enter
into any agreement, or commitment or understanding with respect to, any merger,
sale of substantial assets or similar transaction involving the Sellers or any
sale of any capital stock of any Seller. This period shall terminate upon the
earlier of (i) the consummation of the transactions contemplated by this
Agreement; or (ii) the termination of this Agreement by reason of Buyer's
default hereunder.
6.5 Publicity. Through the Closing, all press releases and other public
announcements relating to this transaction and all public announcements
concerning the execution of agreements contemplated hereunder and the Closing,
will be prepared jointly by Sellers and Buyer.
6.6 Representatives. In order to administer efficiently the rights and
obligations of the Sellers hereunder, for all purposes hereunder, Sellers and
Buyer acknowledge and agree that Sellers designate either of the Shareholders as
their representative to take all actions and relay all information and
determinations required hereunder to Buyer. In order to administer efficiently
the rights and obligations of the Buyer hereunder, for all purposes hereunder,
Sellers and Buyer
23
acknowledge and agree that Buyer designates Xxxxx Trop as its representative to
take all actions and rely all information and determinations required hereunder
to Sellers.
ARTICLE
7
POST-CLOSING OBLIGATIONS OF THE PARTIES
7.1 Further Obligations of the Parties. On and after the Closing Date:
(a) The Buyer shall use its reasonable efforts to ship and
deliver the Excluded Inventory at such times as requested by the
applicable customers. The Buyer shall notify the applicable Seller of
such shipment and cooperate with such Seller in collecting any amounts
owing in respect thereof, but shall have no responsibility to invoice
or collect any amounts from such customers in respect of such Excluded
Inventory.
(b) The Buyer shall be responsible for the collection of (and
entitled to retain) the receivables related to the Business accruing
after the Closing Date ("BUYER RECEIVABLES"), and the Sellers shall be
responsible for the collection of (and entitled to retain) the
receivables related to the Business accruing before and on the Closing
Date (the "EXCLUDED RECEIVABLES"). In the event that the Buyer collects
any Excluded Receivables subsequent to the Closing, the Buyer shall
promptly remit to the applicable Seller all amounts so collected. In
the event that the Sellers collect any Buyer Receivables subsequent to
the Closing, the Sellers shall promptly remit to the Buyer all amounts
so collected. Each of the Buyer and the Sellers shall permit the other
party or parties to inspect their respective books and records relating
to the collection of Buyer Receivables and Excluded Receivables during
normal business hours upon reasonable prior notice.
(c) Each party shall execute all certificates, instruments and
other documents and take all actions reasonably requested by the other
party to effectuate the purposes of this Agreement and to consummate
and evidence the consummation of the transactions herein provided for
and to more effectively convey title and possession of the Purchased
Assets to the Buyer.
(d) From and after the Closing, none of the Sellers shall in
any manner take or cause to be taken any action which is designed or
intended, or might be reasonably anticipated to have the effect of
discouraging customers, suppliers, referral sources, governmental
agencies, insurance companies, lessors, consultants, advisors and other
business associates from maintaining the same business relationships
with the Buyer or the Business after the date of this Agreement as were
maintained with the Business prior to the date of this Agreement. Each
Seller, as applicable, shall promptly endorse (where necessary) and
turn over to the Buyer all cash, checks and other property received
after the Closing Date with respect to the Business or the Purchased
Assets (but not the Excluded Assets).
(e) Each Seller other than CCC shall, as applicable, and each
Shareholder shall cause the Sellers to, take all necessary corporate
action to change its corporate name
24
following the Closing to a name dissimilar to their present corporate
names, and, at the Closing, the Sellers will deliver to the Buyer, in a
form reasonably satisfactory to the Buyer and suitable for filing with
the appropriate governmental agencies, an executed amendment to each
Seller's Articles of Incorporation effecting such change.
(f) Each Seller shall pay when due all applicable sales,
transfer and other similar taxes, if any, resulting from the sale and
transfer of any Purchased Assets hereunder.
7.2 Confidentiality and Non-Competition. In consideration of the
transactions contemplated by this Agreement and in order to preserve and protect
the goodwill and value of the Business conveyed hereunder, each of the Sellers
agrees as follows:
(a) Each of the Sellers hereby agrees that, during the period
beginning on the Closing Date and ending on the fourth anniversary of
the Closing (the "NON-COMPETITION PERIOD"), each such Seller will not,
and will not cause or permit any of its directors, officers, employees,
agents or Affiliates, either directly or indirectly, to allow its name
to be used by or Participate in any Restricted Business in the
Restricted Territory. For purposes of this Agreement, (i) the term
"PARTICIPATE" means to have any direct or indirect interest, whether as
an officer, director, employee, partner, sole proprietor, agent,
representative, independent contractor, consultant, franchiser,
franchisee, creditor, owner or otherwise; PROVIDED, HOWEVER, that the
term "Participate" shall not include ownership of less than five
percent (5%) of a class of stock of a publicly-held corporation which
is traded on a national securities exchange or in the over-the-counter
market, so long as such Seller does not have any active participation
in the business or management of such entity; (ii) the term "RESTRICTED
BUSINESS" means any enterprise, business or venture engaged in or which
proposes to engage in the merchandising, distribution, service, or sale
of any products or goods of the same or substantially similar type or
nature as, or are otherwise competitive with, those which are
merchandised, distributed, serviced or sold by the Business as of the
Closing; and "RESTRICTED TERRITORY" shall mean the geographical area of
twenty-five (25) miles from the Chicago metropolitan area counties
covered by the Cellular One license that is part of the Purchased
Assets.
(b) During the Non-Competition Period none of the Sellers
will, or will cause or permit any of their directors, officers,
employees, agents or Affiliates to, either acting jointly or
individually (i) induce or attempt to induce any employee of the
Business to leave its employ or in any way interfere with the
relationship between the Buyer, its Affiliates or successors (the
"BUYER GROUP") and any of its employees or (ii) induce or attempt to
induce any supplier, licensee, licensor, franchisee, customer or other
business relation of the Business ("BUSINESS RELATION") to cease doing
business with any member of the Buyer Group or in any way interfere
with the relationship between any member of the Buyer Group and any
such Business Relation.
(c) Each of the Sellers hereby agrees that during the
Non-Competition Period, it will not, and will not cause or permit any
of its directors, officers, employees, agents or
25
Affiliates to, either directly or indirectly, in any capacity
whatsoever, to divulge, disclose or communicate to any person not in
the employment of the Buyer, any confidential information of the
Business, including without limitation, any business, financial,
customer, supplier, technical, product, process or other information
which pertains to the affairs or interests of the Business, in whatever
form or media; provided, however, that such confidential information
shall not include (i) any information that already had become or later
becomes publicly available through no fault of the Sellers or their
representatives or (ii) the furnishing or use of such information as
required by or necessary or appropriate in connection with legal
proceedings (subject to notice to Buyer and an opportunity to object).
(d) The Sellers and Shareholders agree that the Business and
the Buyer would suffer irreparable harm from a breach by any the
Sellers or the Shareholders of any of the covenants or agreements
contained in this Section 7.2. In the event of an alleged or threatened
breach by any Seller of any of the provisions of this Section 7.2, the
Buyer or its successors or assigns may, in addition to all other rights
and remedies existing in its favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief
in order to enforce or prevent any violations of the provisions hereof.
The Non-Competition Period described above will be tolled with respect
to such Seller or Shareholder until such alleged breach or violation is
resolved; provided that (i) any Seller or Shareholder competes during
the dispute; and (ii) Buyer prevails in the dispute. The Sellers agree
that the restrictions in this Section 7.2 are reasonable protections
under the circumstances of the sale of the Business to the Buyer. If,
at the time of enforcement of any of the provisions of this Section
7.2, a court holds that the restrictions stated herein are unreasonable
under the circumstances then existing, the Sellers agree that the
maximum period, scope or geographical area reasonable under such
circumstances will be substituted for the stated period, scope or area.
7.3 Employees of the Business. The Buyer will interview the employees
of the Business and may elect to extend offers of employment to any one or more,
or none, of each Sellers' employees, in Buyer's sole discretion. Each Seller
will terminate all of its respective employees effective as of immediately prior
to the Closing. The Sellers shall remain solely responsible for any and all
salary, benefits, severance pay and all other claims by the Sellers' employees
(collectively, "EMPLOYEE CLAIMS") (a) for all periods on or before the Closing
Date, other than with respect to amounts accruing after the Closing Date in
respect of any of the Sellers' employees who are employed by the Buyer, and (b)
for all periods before, on and after the Closing Date, with respect to any of
the Sellers' employees who are not employed by Buyer.
7.4 Stores in Process. In the event that any of the stores currently
being developed and as set for on Schedule 1.1(b) attached hereto, are not open
as of the Closing, Sellers, at Sellers' sole cost and expense, shall be
responsible for completing said stores, including but not limited to any and all
buildout and to deliver said stores to Buyer, ready for operation, as
expeditiously following the Closing as possible.
26
ARTICLE
8
SURVIVAL OF WARRANTIES AND INDEMNIFICATION
8.1 Survival and Extent of Representations, Warranties,
Indemnifications, and Covenants. All representations, warranties,
indemnifications and covenants contained in this Agreement shall survive the
Closing hereunder and shall continue in full force and effect thereafter for a
period of two (2) years from the date of Closing except (i) with respect to
claims as to which notice has been given within such period, in which case the
indemnification period shall be extended until final resolution of such claim;
and (ii) with respect to any cost, liability, obligation or duty of Sellers or
Shareholders not expressly assumed by Buyer (including, but not limited to, any
employee benefit related cost, liability, obligation or duty of Sellers or
Shareholders), which shall be without limitation.
8.2 Indemnification by the Sellers and/or Shareholders. The Sellers and
the Shareholders acting in their personal capacities shall, jointly and
severally, indemnify, and hold harmless the Buyer from and against and, to the
extent the same constitute out-of-pocket expenditures by the Buyer, to promptly
reimburse the Buyer for, all losses, liabilities, indebtedness, damages,
actions, judgments, penalties, fines, costs, obligations, taxes, expenses and
fees, including all reasonable attorneys' fees and court costs ("LOSSES"),
incurred by or asserted against the Buyer resulting from, arising out of,
relating to, in the nature of or caused by (i) the breach of any representation,
warranty or covenant of any Seller set forth in this Agreement; (ii) any
obligations, liabilities or indebtedness of any Seller, whether due or to become
due, absolute or contingent, direct or indirect, asserted or unasserted, known
or unknown, excepting only the Assumed Liabilities; (iii) the operation of the
Business prior to the Closing Date; (iv) the cost and expense of defending any
action, demand, or claim by any third party against or affecting the Buyer, the
Business or the Purchased Assets, which, if true or successful, would give rise
to a breach of any of the representations, warranties or covenants of the
Sellers or would cause the Buyer or the Purchased Assets to be subject to any
obligation, liability or indebtedness referred to in clauses (i), (ii) or (iii)
even if such action, demand or claim ultimately proves to be untrue or
unfounded; and (v) any proceeding, investigation, administrative order,
administrative order by consent, consent order and agreement, litigation or
settlement.
8.3 Indemnification by the Buyer and the Parent. The Buyer and the
Parent, jointly and severally, hereby agree to indemnify, save, defend and hold
harmless the Sellers and Shareholders from and against and, to the extent the
same constitute out-of-pocket expenditures by Sellers, to promptly reimburse the
Sellers for, all Losses incurred by or asserted against Sellers resulting from,
arising out of, relating to, in the nature of or caused by (i) the breach of any
representation, warranty or covenant of Buyer set forth in this Agreement; (iii)
the operation of the Business from and after the Closing Date; or (iii) Buyer's
failure to perform and satisfy the Assumed Liabilities.
8.4 Right of Set Off. Without limitation any other rights or remedies
of the Buyer and Parent hereunder or under the Other Agreements, the Buyer and
Parent shall be entitled to set off the full amount of any unresolved claims for
indemnifiable Losses against any Seller or
27
Shareholder under this Agreement or the Other Agreements (collectively, "PENDING
CLAIMS"), and the full amount of all such claims for indemnifiable Losses which
have theretofore been finally resolved against the Sellers but have not been
paid ("UNPAID CLAIMS"), against any amount owing to any Seller under this
Agreement (including the Holdback Amount) or the Other Agreements. The Buyer
shall be entitled to irrevocably set off the full amount of all Unpaid Claims
and shall be entitled to set of the full amount of any Pending Claims pending
final resolution thereof. Upon final resolutions of all Pending Claims, any
excess set off shall be paid to the Sellers.
8.5 De Minimis Exclusion; Maximum Liability. No party may make any
claim against any other party hereto pursuant to Section 8.2 or 8.3, as the case
may be, until the aggregate of all claims pursuant to Section 8.2 or 8.3, as the
case may be, exceeds $75,000; and the maximum liability for indemnification by
either party hereto to the other shall not exceed $2,500,000. Notwithstanding
the foregoing, each party agrees to provide all other parties hereto with notice
of each matter that would constitute a claim notwithstanding the de minimis
exclusion set forth in the preceding sentence.
8.6 Guarantee of Obligations. Subject to the terms and limitations of
this Agreement, Parent shall irrevocably and unconditionally guarantee the
actions of and performance by Buyer; and, subject to the terms and limitations
of this Agreement, Shareholders shall irrevocably and unconditionally be
responsible for the actions of and performance by Sellers.
ARTICLE
9
MISCELLANEOUS PROVISIONS
9.1 Certain Definitions. For purposes of this Agreement, the following
terms have the following meanings:
(a) "AFFILIATE" means, with respect to any particular
individual or entity, any other individual or entity person
controlling, controlled by or under common control with such individual
or entity, whether by ownership or control of voting securities, by
contract or otherwise.
(b) "ENVIRONMENTAL, HEALTH AND SAFETY LAWS" means the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Resource Conservation and Recovery Act of 1976, the Hazardous
Materials Transportation Act, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including
rules, regulations, ordinances, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof) concerning
Hazardous Substances, as defined below, pollution or protection of the
environment, public health and safety, or employee health and safety,
including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or wastes into ambient air,
surface water, ground water, or lands or otherwise relating to the
processing, distribution, generation, use, treatment, storage,
disposal, transport, or
28
handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials, substances or wastes.
(c) "HAZARDOUS SUBSTANCE" means any substance, whether solid,
liquid or gaseous in nature which is or becomes defined as a "hazardous
waste", "hazardous material", "hazardous substance", "pollutant",
"contaminant" or any other special material under any Environmental,
Health and Safety Laws, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 USC ss. 9601
et seq.), the Resource Conservation and Recovery Act (42 USC ss. 6901
et seq.); the Hazardous Materials Transportation Act, including,
without limitation, asbestos, asbestos containing materials, urea
formaldehyde insulation, polychlorinated biphenyls (PCBs) and petroleum
products, and the constituents and fractions thereof, including
gasoline, diesel fuel, fuel oil, crude oil and motor oil; PCBs,
methylene chloride, trichloroethylene, 1,2-trans-dichloroethylene,
dioxins, dibenzofurans.
(d) "OTHER DOCUMENTS" means THE LEASE, the Consulting
Agreement, the Non-Competition Agreement and any other document
contemplated by or executed in connection with this Agreement
9.2 "PERSON" means any individual, trust, corporation, partnership,
limited liability company or other business association or entity, court,
governmental body or governmental agency.
9.3 Notices. All notices, requests, demands or other communications
hereunder (including notices of all asserted claims or liabilities) shall be in
writing and shall be either delivered personally, by messenger service, by
prepaid guaranteed overnight delivery service or mailed by U.S. mail, certified
or registered, with appropriate postage prepaid to the addressees and addresses
herein designated or such other address as may be designated in writing by
notice given in the manner provided herein and shall be effective upon personal
delivery thereof, if delivered personally or by messenger service, one (1)
business day after delivery to the overnight delivery service for next business
day delivery, if delivered by overnight delivery service, or three (3) days
following deposit in the U.S. mail, if sent by mail, whether or not delivery is
accepted:
If to the Sellers: Xxxxx X. Xxxxx
Xxxxx Xxxxxx
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
With a copy to: Xxxxxxx X. Xxx, Esq.
Fox Swiebel & Xxxxx
000 X. Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
If to Buyer or Parent: Xxxxx Trop
Source One Wireless, L.L.C.
29
0000 Xxxxx Xxxxxxxxx Xxx.
Xxxxxxxx, Xxxxxxxx 00000
With a copy to: Xxxxxxx X. Xxxxx, Esq.
Xxxxxxxx & Xxxxxx, Ltd.
Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
9.4 Assignability; Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns; provided that none of the Sellers may assign any of their
rights or obligations under this Agreement without Buyer's prior written
consent.
9.5 Governing Law; Jurisdiction. This Agreement shall be construed and
governed in accordance with the internal laws of the State of Illinois, without
regard to its choice of law principles. The parties hereby consent to service of
process and to the exclusive jurisdiction of any appropriate court located in
Xxxx County, Illinois in any action to enforce the provisions of this Agreement.
9.6 Counterparts. 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 Agreement.
9.7 Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all prior communications, writings and other documents, with regard
thereto. No modification, amendment or waiver of any provision hereof shall be
binding upon any party hereto unless it is in writing and executed by all of the
parties hereto or, in the case of a waiver, by the party waiving compliance.
9.8 Severability. It is the intent and desire of the parties that the
provisions of this Agreement be enforced to the fullest extent permissible under
the laws and public policies as applied in each jurisdiction in which
enforcement of the provisions of this Agreement are sought. If any particular
provision of this Agreement shall be adjudicated by a court of competent
jurisdiction to be invalid or unenforceable, such provision shall be amended,
without any action on the part of either party hereto, to delete therefrom the
portion so adjudicated to be invalid or unenforceable, such deletion to apply
only with respect to the operation of such provision in the particular
jurisdiction in which such adjudication is made. If any provision of this
Agreement is adjudicated by a court of competent jurisdiction to be invalid or
unenforceable in its entirety, this Agreement shall be amended to delete such
provision therefrom and the remainder of this Agreement shall remain in full
force and effect.
9.9 Waiver. The waiver by any party hereto of any breach, default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall not be deemed to extend to any prior or subsequent
breach, default, misrepresentation or breach of warranty or covenant hereunder
and shall not affect in any way any rights arising by virtue of any such prior
or subsequent occurrence.
30
9.10 No Strict Construction. Each of the parties has been represented
by separate counsel with respect to this Agreement and the language herein
represents the language chosen by the parties after consultation with such
counsel. Thus, no rule of strict construction shall be applied against either
party in interpreting this Agreement and this Agreement and the Other Agreements
shall be construed equally against all parties.
9.11 Allocation of Fees and Expenses. Except as otherwise expressly
provided in this Agreement, each of the parties hereto shall be responsible for
their own fees, expenses and other charges incurred in connection with the
transactions contemplated hereby, including all such fees, expenses and other
charges incurred by their respective legal counsel, accountants, brokers or
other representatives or consultants). No fees, expenses or charges payable by
the Sellers in connection with the transactions contemplated hereby shall be
accrued for on the Latest Balance Sheet and the Sellers have not since the
Latest Balance Sheet Date used any assets of the Business to pay any such
expenses.
* * * * *
31
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
THE SELLERS:
CELLULAR COMMUNICATIONS CORP.
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title President
AREAWIDE CELLULAR INC.
By: /s/ Xxxxx Xxxxxx
----------------
Name: Xxxxx Xxxxxx
Title President
AREA PLUS PAGING INC.
By: /s/ Xxxxx Xxxxxx
----------------
Name: Xxxxx Xxxxxx
Title President
THE SHAREHOLDERS:
/s/ Xxx Xxxxxx
----------
Xxx Xxxxxx
/s/ Xxxxx Xxxxx
-----------
Xxxxx Xxxxx
THE BUYER:
SOURCE ONE WIRELESS, L.L.C.
By: /s/ Dov Trop
------------
Name: Dov Trop
Title President
THE PARENT:
SOURCE ONE WIRELESS, INC.
By: /s/ Dov Trop
------------
Name: Dov Trop
Title President
32
