STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of June 18, 1996
(the "Agreement"), between Intek Diversified Corporation, a
Delaware corporation ("Purchaser"), and Securicor Communications
Limited, a corporation formed under the laws of England and Wales
("Seller"), a wholly owned indirect subsidiary of Securicor plc
and the sole shareholder of Securicor Radiocoms Limited, a
corporation formed under the laws of England and Wales
("Radiocoms").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Seller is currently engaged, through Radiocoms
and its Subsidiaries (and previously was engaged through certain
Affiliates), in the Business (as defined below); and
WHEREAS, (i) as of the date hereof, Seller owns 100,000
ordinary shares, L1.00 par value per share (the "Existing
Shares") and (ii) as of the Closing, Seller will own an aggregate
of 100,000 deferred shares, L1.00 par value per share (the
"Deferred Shares"), and an aggregate of 150,000 ordinary shares,
$0.10 par value per share (the "Ordinary Shares" and,
collectively with the Deferred Shares, the "Shares"), and an
aggregate of 20,000 redeemable preference shares, $1,000 par
value per share (the "Preferred Shares"), of Radiocoms, which
Shares and Preferred Shares will constitute, at the time of the
Closing, all of the issued share capital of Radiocoms; and
WHEREAS, Radiocoms owns (i) an aggregate of 925,850
shares of Series I Class B Preferred Stock, $.01 par value per
share (the "EFJ Shares") of X.X. Xxxxxxx Company, a Minnesota
corporation ("EFJ"), and (ii) a warrant providing for the
purchase of up to 291,790 shares of the common stock, $.01 par
value per share, of EFJ (the "EFJ Warrant"); and
WHEREAS, Seller desires to sell to Purchaser, and
Purchaser desires to purchase from Seller, the Shares, for the
purchase price and upon the terms and conditions hereinafter set
forth; and
WHEREAS, the consummation of the transactions contem
plated hereby is a condition precedent to, and is conditioned
upon, the consummation of certain other transactions pursuant to
that certain Sale of Assets and Trademark License Agreement,
dated as of the date hereof (the "Midland Agreement"), by and
among Purchaser, Midland International Corporation, a Delaware
corporation ("Midland US") and a wholly-owned indirect subsidiary
of Xxxxxxxx Capital Limited, an Ontario corporation ("Xxxxxxxx"),
and Xxxxxxxx (collectively with each other agreement, document,
instrument or certificate contemplated by the Midland Agreement,
the "Other Transaction Documents") (the transactions contemplated
by the Midland Agreement being referred to herein collectively as
the "Other Transactions" and, together with the transactions
contemplated by this Agreement, as the "Transactions"); and
WHEREAS, simultaneously with the execution of this
Agreement, Purchaser has obtained the unconditional written
agreement (the "Voting Agreement") of Xxxxxxxx and RoameR One
Holdings, Inc., as stockholders of Purchaser, (i) to vote all of
their respective shares of the common stock of Purchaser in favor
of the approval of the issuance of the Purchaser Shares (as here
inafter defined) pursuant hereto and (ii) not to sell, transfer
or dispose of any such shares prior to the consummation of the
Transactions or the termination of this Agreement except in
accordance with the terms of the Voting Agreement; and
WHEREAS, the consummation of the Transactions will be
mutually beneficial to Purchaser and Seller; and
WHEREAS, certain terms used in this Agreement are
defined in Section 10.1.
NOW, THEREFORE, in consideration of the premises and
the mutual covenants and agreements hereinafter contained, the
parties hereby agree as follows:
ARTICLE I
SALE AND PURCHASE OF SHARES
1.1 SALE AND PURCHASE OF SHARES. Upon the terms and
subject to the conditions contained herein, on the Closing Date,
Seller shall sell, assign, transfer, convey and deliver to
Purchaser, and Purchaser shall purchase from Seller, the Shares.
ARTICLE II
PURCHASE PRICE AND PAYMENT
2.1 AMOUNT AND PAYMENT OF PURCHASE PRICE. In
consideration of the sale of the Shares to Purchaser, the
Purchaser shall deliver to Seller, on the Closing Date,
25,000,000 shares of the common stock, $.01 par value (the
"Purchaser Common Stock"), of Purchaser (the "Purchaser Shares").
ARTICLE III
CLOSING AND TERMINATION
3.1 CLOSING DATE. Subject to the satisfaction of
the conditions set forth in Sections 7.1, 7.2 and 7.3 hereof (or
the waiver thereof by the party or parties entitled to waive that
condition), the closing of the sale and purchase of the Shares
provided for in Section 1.1 hereof (the "Closing") shall take
place at 10:00 a.m., New York City time, at the offices of Weil,
Gotshal & Xxxxxx LLP, located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx (or at such other place as the parties may designate in
writing), five (5) Business Days after the conditions listed in
Article VII have been satisfied or waived or on such other date
as Seller and Purchaser may designate in writing. The date on
which the Closing shall be held is referred to in this Agreement
as the "Closing Date."
3.2 TERMINATION OF AGREEMENT. This Agreement may be
terminated prior to the Closing as follows:
(a) At the election of Seller or Purchaser after
December 31, 1996, if the Closing shall not have occurred by the
close of business on such date, provided that the terminating
party is not in default of any of its obligations hereunder;
(b) by mutual written consent of Seller and Purchaser;
(c) by Seller or Purchaser, if there shall be in
effect a final nonappealable Order of a Governmental Body of
competent jurisdiction restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated
hereby or the Other Transactions; it being agreed that the
parties hereto (or Purchaser, in the case of any Order that
relates solely to the Other Transactions) shall promptly appeal
any adverse determination which is not nonappealable (and pursue
such appeal with reasonable diligence);
(d) by Seller, if (i) there shall have been a breach
of any representation or warranty on the part of Purchaser set
forth in this Agreement, or if any representation or warranty of
Purchaser shall have become untrue, in either case such that the
condition set forth in Section 7.3(a) would be incapable of being
satisfied by December 31, 1996 (or as otherwise extended) or (ii)
there shall have been a breach by Purchaser of any of its
covenants or agreements having a Material Adverse Effect on
Purchaser and its Subsidiaries, taken as a whole, or materially
adversely affecting (or materially delaying) the consummation of
the transactions contemplated hereby or the Other Transactions,
and Purchaser has not cured such breach within ten Business Days
after notice by Seller thereof, provided that Seller has not
breached any of its obligations hereunder;
(e) by Purchaser, if (i) there shall have been a
breach of any representation or warranty on the part of Seller
set forth in this Agreement or if any representation or warranty
of Seller shall have become untrue, in either case such that the
condition set forth in Section 7.2(a) would be incapable of being
satisfied by December 31, 1996 (or as otherwise extended); or
(ii) there shall have been a breach by Seller of its covenants or
agreements hereunder having a Material Adverse Effect on the
Business or Radiocoms and its Subsidiaries, taken as a whole, or
materially adversely affecting (or materially delaying) the
consummation of the transactions contemplated hereby or the Other
Transactions, and Seller has not cured such breach within ten
Business Days after notice by Purchaser thereof, provided that
Purchaser has not breached any of its obligations hereunder;
(f) by Seller, if the Board of Directors of Purchaser
shall have withdrawn, modified or changed its approval or
recommendation of this Agreement and the transactions
contemplated hereby, or shall have failed to give such
recommendation or to call, give notice of, convene or hold the
Purchaser Stockholders' Meeting in accordance with the terms of
this Agreement, or shall have adopted any resolution to effect
any of the foregoing;
(g) by Purchaser, if the Board of Directors of
Purchaser or a Special Committee thereof, in its good faith
judgment, after consultation with independent legal counsel,
shall have withdrawn, modified or changed its approval or
recommendation of this Agreement and the transactions
contemplated hereby (having determined that it is necessary to do
so in order to comply with its fiduciary duties to stockholders
under applicable law);
(h) by Purchaser or Seller, if Purchaser shall have
duly called and convened the Purchaser Stockholders' Meeting and
shall have failed to obtain the requisite vote of its
stockholders; or
(i) by Seller, if, at any time after sixty days from
the date hereof, the closing conditions set forth in Section
7.3(j) or Section 7.3(k) shall not be satisfied.
3.3 PROCEDURE UPON TERMINATION. In the event of
termination by Purchaser or Seller pursuant to Section 3.2
hereof, written notice thereof shall forthwith be given to the
other party, and this Agreement shall terminate, and the purchase
of the Shares hereunder shall be abandoned, without further
action by Purchaser or Seller. If this Agreement is terminated,
as provided herein, each party shall redeliver all documents,
work papers and other material of any other party relating to the
transactions contemplated hereby, whether so obtained before or
after the execution hereof, to the party furnishing the same, or,
promptly following the request of the furnishing party, destroy
all such documents, work papers or other materials.
3.4 EFFECT OF TERMINATION. In the event that this
Agreement is validly terminated as provided herein, then each of
the parties shall be relieved of their duties and obligations
arising under this Agreement after the date of such termination,
and such termination shall be without liability to Purchaser,
Radiocoms or Seller; PROVIDED, HOWEVER, that the provisions of
this Section 3.4 and Sections 3.5, 10.3 and 10.6 hereof shall
survive any such termination and shall be enforceable hereunder;
and PROVIDED, FURTHER, that nothing in this Section 3.4 shall
relieve Purchaser or Seller of any liability for a breach of this
Agreement.
3.5 EXPENSE REIMBURSEMENT. If this Agreement is
terminated by Seller pursuant to Section 3.2(f) or by Purchaser
pursuant to Section 3.2(g), Purchaser shall reimburse Seller and
its Affiliates (not later than ten business days after the
submission of statements therefor) for all documented out-of-
pocket fees and expenses actually and reasonably incurred by any
of them or on their behalf in connection with the consummation of
all transactions contemplated by this Agreement (including,
without limitation, fees payable to investment bankers, counsel
to any of the foregoing, and accountants); PROVIDED, HOWEVER,
that such expense reimbursement shall be payable only if (i)(a)
after the date hereof and prior to such termination, Purchaser
(or its agents) had negotiations with a view towards a Third
Party Acquisition or furnished information to a Third Party with
a view towards a Third Party Acquisition and (b) Purchaser
consummates a Third Party Acquisition within twelve months
following any such termination, (ii)(a) after the date hereof and
prior to such termination a Third Party (other than an Third
Party referred to in clause (a)(i)) submitted a proposal for a
Third Party Acquisition to Purchaser (or its agents), or
expressed an interest in a Third Party Acquisition to Purchaser
(or its agents) and (b) Purchaser consummates a Third Party
Acquisition with such Third Party or an Affiliate thereof within
twelve months following any such termination or (iii) Purchaser
accepted a proposal for a Third Party Acquisition on or prior to
the date of termination pursuant to Section 3.2(f) or Section
3.2(g).
"Third Party Acquisition" means the occurrence of any
of the following events: (i) the acquisition of Purchaser by
merger or otherwise by any Person (which includes a "person" as
such term is defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended) or entity other than Seller or
any Affiliate thereof (a "Third Party"); (ii) the acquisition by
a Third Party of more than 50% of the total assets of Purchaser
and its subsidiaries, taken as a whole; or (iii) the acquisition
by a Third Party of 50% or more of the outstanding shares of
Purchaser Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser
that:
4.1 ORGANIZATION AND GOOD STANDING. Each of
Radiocoms and Seller is a corporation duly organized, validly
existing and in good standing under the Laws of England and
Wales. EFJ is a corporation validly existing and in good
standing under the Laws of Minnesota. Each of Radiocoms, Seller,
and, to the knowledge of Seller, EFJ, has all requisite corporate
power and authority to own, lease and operate its properties and
to carry on its business as now conducted. Radiocoms is duly
qualified or authorized to do business as a foreign corporation
and is in good standing under the Laws of each jurisdiction in
which it owns or leases real property and each other jurisdiction
in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except
where the failure to be so qualified or authorized could not
reasonably be expected to have a Material Adverse Effect on
Radiocoms and its Subsidiaries, taken as a whole. Radiocoms is
not subject to any agreement, commitment or understanding which
restricts or may restrict the conduct of the Business in any
jurisdiction or location in any material respect. Copies of the
Memorandum of Association and Articles of Association (together
with all amendments thereto) of Radiocoms and the articles of
incorporation of EFJ have heretofore been provided or made
available to Purchaser and such copies are true, correct and
complete copies of such instruments.
4.2 AUTHORIZATION OF AGREEMENT. Seller has all
requisite power, authority and legal capacity to execute and
deliver this Agreement and each other agreement, document,
instrument or certificate contemplated by this Agreement or to be
executed by Seller in connection with the consummation of the
transactions contemplated by this Agreement (together with this
Agreement, the "Seller Documents"), and to consummate the
transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and each of the Seller Documents has
been duly and validly authorized by the Board of Directors of
Seller, and no other corporate proceedings on the part of Seller
will be necessary to authorize this Agreement and the
transactions contemplated hereby or the Other Transactions.
Assuming the due authorization, execution and delivery by the
other parties hereto and thereto, this Agreement constitutes, and
each of the Seller Documents when executed and delivered will
constitute, legal, valid and binding obligations of Seller,
enforceable against Seller in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganiza
tion, moratorium and similar Laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in
equity) (the "Bankruptcy Exception").
4.3 CAPITALIZATION.
(a) As of the date hereof, the authorized capital
stock of (i) Radiocoms consists of 100,000 Existing Shares (ii)
EFJ consists of 10,000,000 common shares, $.01 par value per
share, 80,000 shares of preferred stock, $100.00 par value per
share, and 2,000,000 shares of Class B Preferred Stock, $.01 per
value per share. As of the date hereof, there are (i) 100,000
Existing Shares issued and outstanding and no shares of any class
are held by Radiocoms as treasury stock and (ii) to the knowledge
of Seller, 10,000,000 shares of common stock of EFJ, 80,000
shares of preferred stock of EFJ and 2,000,000 shares of Class B
Preferred Stock of EFJ issued and outstanding. As of the Closing
Date, there will be 100,000 Deferred Shares, 150,000 Ordinary
Shares and 20,000 shares of Radiocoms Preferred Stock issued and
outstanding, and no shares of any class will be held by Radiocoms
as treasury stock. All of the Existing Shares were duly
authorized for issuance and are validly issued, fully paid and
non-assessable. Upon issuance thereof prior to the Closing, all
of the Shares and the Preferred Shares will have been duly
authorized for issuance and validly issued, fully paid and non-
assessable. To the knowledge of Seller, the EFJ Shares and the
EFJ Warrant were duly authorized for issuance and are validly
issued, fully paid and non-assessable.
(b) Except for the EFJ Warrant or as set forth in
Section 4.3(b) of the disclosure letter delivered by Seller to
Purchaser on the date hereof (the "Radiocoms Disclosure Letter"),
there is no existing option, warrant, call, right, commitment or
other agreement of any character to which Seller or Radiocoms or,
to the knowledge of Seller, EFJ is a party requiring, and there
are no securities of Radiocoms or, to the knowledge of Seller,
EFJ, as the case may be, outstanding which upon conversion or
exchange would require, the issuance, sale or transfer of any
additional shares of capital stock or other equity securities of
Radiocoms or EFJ, as the case may be, or other securities
convertible into, exchangeable for or evidencing the right to
subscribe for or purchase shares of capital stock or other equity
securities of Radiocoms or EFJ, as the case may be. Except as
set forth in Section 4.3(b) of the Radiocoms Disclosure Letter,
neither Seller nor Radiocoms, nor, to the knowledge of Seller,
EFJ is a party to any voting trust or other voting agreement with
respect to any of the shares of Common Stock or the EFJ Shares or
to any agreement relating to the issuance, sale, redemption,
transfer or other disposition of the capital stock of Radiocoms
or EFJ, as the case may be, except for the EFJ Warrant.
4.4 SUBSIDIARIES.
(a) Set forth in Section 4.4(a) of the Radiocoms
Disclosure Letter is the name of each of the Subsidiaries of
Radiocoms and any Affiliate of Radiocoms that is conducting
(including through ownership of properties or through its
employees) (or has conducted during the periods covered by the
Radiocoms Financial Statements) the Business (a "Relevant
Affiliate") and, with respect to each such Subsidiary or Relevant
Affiliate, the jurisdiction in which it is incorporated, the
number of shares of its authorized capital stock, the number and
class of shares thereof duly issued and outstanding, the names of
all stockholders and the numbers of shares of stock owned by each
stockholder. Each such stockholder is the record and beneficial
owner of the shares set forth opposite its name in Section 4.4(a)
of the Radiocoms Disclosure Letter. The outstanding shares of
capital stock of each Subsidiary of Radiocoms have been duly
authorized, validly issued and fully paid and are non-assessable.
(b) All shares of Subsidiaries that are set forth in
Section 4.4(a) of the Radiocoms Disclosure Letter are owned by
such stockholders free and clear of all Liens. No shares of
capital stock are held by any Subsidiary of Radiocoms as treasury
stock.
(c) None of the Subsidiaries of Radiocoms has
outstanding or authorized subscriptions, options, warrants,
calls, rights, commitments or any other agreements of any
character obligating any of them to issue, sell or transfer any
shares of its capital stock or other equity interests or any
securities convertible into or evidencing the right to subscribe
for or purchase any shares of such stock or other equity
interests with any Person, and there are no agreements or
understandings with respect to the voting, sale or transfer of
shares of the capital stock of any Subsidiary of Radiocoms to
which Radiocoms or any Subsidiary thereof is a party.
(d) Each Subsidiary of Radiocoms is a corporation duly
organized, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation. Each Subsidiary of
Radiocoms has full corporate power and authority to own, lease
and operate its properties and to carry on its business as it is
now being conducted. Each Subsidiary of Radiocoms is duly
qualified and in good standing as a foreign corporation under the
Laws of each jurisdiction in which the conduct of its business or
the ownership of its assets requires such qualification, except
where the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect on Radiocoms and its
Subsidiaries, taken as a whole. No Subsidiary of Radiocoms is
subject to any agreement, commitment or understanding which
restricts or may restrict the conduct of the Business in any
jurisdiction or location in any material respect. Copies of the
Memorandum of Association and Articles of Association or
equivalent organizational documents (together with all amendments
thereto) of each Subsidiary of Radiocoms have heretofore been
provided or made available to Purchaser and such copies are true,
correct and complete copies of such instruments.
(e) Except as set forth in Section 4.4(e) of the
Radiocoms Disclosure Letter, neither Radiocoms nor any of its
Subsidiaries owns, beneficially or of record, any shares of
capital stock or any other security of any corporation or other
legal entity, or has any option or obligation to acquire any such
stock or other security, or has any investments in securities or
owns, directly or indirectly, any interest in any partnership,
joint venture or other business enterprise.
4.5 CORPORATE RECORDS. The minute books of Radiocoms
and each of its Subsidiaries previously made available to
Purchaser contain complete and accurate records, in all material
respects, of all meetings, and accurately reflect, in all
material respects, all other corporate actions of the
stockholders and board of directors (including committees
thereof) of Radiocoms and each of its Subsidiaries. The stock
certificate books and stock transfer ledgers of Radiocoms and its
Subsidiaries previously made available to the Purchaser are true,
correct and complete. All stock transfer taxes levied or payable
with respect to all transfers of shares of Radiocoms and its
Subsidiaries prior to the date hereof (if any) have been paid and
appropriate transfer tax stamps affixed.
4.6 CONFLICTS; CONSENTS OF THIRD PARTIES.
(a) None of the execution and delivery by Seller of
this Agreement and the Seller Documents, the consummation of the
transactions contemplated hereby or thereby (including, without
limitation, the transaction referred to in the second sentence of
Section 4.7), or compliance by Seller with any of the provisions
hereof or thereof do or will (i) conflict with, or result in the
breach of, any provision of the Memorandum of Association or
Articles of Association or comparable organizational documents of
Seller, Radiocoms or any of Radiocoms's Subsidiaries or Relevant
Affiliates; (ii) conflict with, violate, result in the breach or
termination of, or constitute a default under any note, bond,
mortgage, indenture, license, agreement or other instrument or
obligation to which Seller, Radiocoms or any of its Subsidiaries
or Relevant Affiliates is a party or by which Seller, Radiocoms
or any of its Subsidiaries or Relevant Affiliates or any of their
respective properties or assets is bound, including, without
limitation, the EFJ Shareholders' Agreement (as hereinafter
defined) and any other such agreement that relates in any way to
the EFJ Shares or the EFJ Warrant; (iii) violate any statute,
rule, regulation, order or decree of any Governmental Body by
which Seller, Radiocoms or any of its Subsidiaries or Relevant
Affiliates is bound; or (iv) result in the creation of any Lien
upon the properties or assets of Seller, Radiocoms or any of its
Subsidiaries or Relevant Affiliates except, in case of clauses
(ii), (iii) and (iv), for such violations, breaches or defaults
as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Radiocoms and its
Subsidiaries, taken as a whole, or materially delay the consumma
tion of the transactions contemplated hereby.
(b) No consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or notification
to, any Person or Governmental Body is required on the part of
Seller, Radiocoms or any Subsidiary or Relevant Affiliate of
Radiocoms in connection with the execution and delivery of this
Agreement or the Seller Documents, or the compliance by Seller or
any of its Relevant Affiliates with any of the provisions hereof
or thereof, except (i) for compliance with the applicable
requirements of the HSR Act, (ii) for amendments to Seller's
Schedule 13D filing with respect to Purchaser to reflect the
execution of this Agreement and the consummation of the
Transactions, and (iii) where the failure to obtain such consent,
waiver, approval, Order, Permit or authorizations, or to make
such declaration or filing, could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect on Radiocoms and its Subsidiaries, taken as a whole, or
materially delay the consummation of the transactions
contemplated hereby.
4.7 OWNERSHIP AND TRANSFER OF SHARES; OWNERSHIP OF
EFJ SHARES AND EFJ WARRANT. Seller is the sole record and
beneficial owner of the Existing Shares (and, as of the Closing,
Seller will be the sole record and beneficial owner of the
Shares), and, except as set forth in Section 4.7 of the Radiocoms
Disclosure Letter, Radiocoms is the sole record and beneficial
owner of the EFJ Shares and the EFJ Warrant, in each case free
and clear of any and all Liens, except (in the case of the EFJ
Warrant and the EFJ Warrant) for that certain Shareholders
Agreement, dated as of March 14, 1995, among certain shareholders
of X.X. Xxxxxxx Company (the "EFJ Shareholders' Agreement"), to
which the EFJ Shares, and any shares issuable pursuant to the EFJ
Warrant, are subject. The EFJ Shares and the EFJ Warrant
constitute all of the securities of EFJ owned or held by
Radiocoms or any of its Affiliates, and were transferred to
Radiocoms by Securicor Communications Inc. in exchange for a one-
year note of Radiocoms (the "EFJ Note") in an aggregate principal
amount of $10,000,000 on June 17, 1996. Seller has the corporate
power and authority to sell, transfer, assign and deliver the
Shares, and such delivery will convey to Purchaser good and
marketable title to the Shares, free and clear of any and all
Liens.
4.8 FINANCIAL STATEMENTS. Seller has delivered to
Purchaser copies of (a) the audited consolidated balance sheet of
Radiocoms and its Subsidiaries as at September 30, 1995, and the
related audited consolidated statements of income and of cash
flows of Radiocoms and its Subsidiaries (determined as of
September 30, 1995) for the year then ended and (b) the unaudited
consolidated balance sheet of Radiocoms and its Subsidiaries as
at March 31, 1996, and the related statements of income and cash
flows of Radiocoms and its Subsidiaries (determined as of March
31, 1996) for the six-month period then ended (the "Interim
Statements") (such audited and unaudited statements, including
the related notes and schedules thereto, are referred to herein
as the "Radiocoms Financial Statements"). Each of the Radiocoms
Financial Statements (i) is complete and correct in all material
respects, (ii) has been prepared in accordance with GAAP (subject
to normal year-end adjustments in the case of the Interim
Statements), in accordance with the books and records of
Radiocoms and its Subsidiaries and in conformity with the
practices consistently applied by Radiocoms without modification
of the accounting principles used in the preparation thereof,
except that such financial statements have been conformed to GAAP
and except as set forth in Section 4.8 of the Radiocoms
Disclosure Letter, (iii) except for the issuance of the Shares
and the Preferred Shares, the transfer of the EFJ Shares and EFJ
Warrant to Radiocoms, and the cancellation of intercompany
indebtedness, reflects all transactions relating to the Business
including, without limitation, operations of Radiocoms and the
Subsidiaries and any transaction with Securicor plc or its
Subsidiaries, and (iv) presents fairly the financial position,
results of operations and cash flows of Radiocoms and its
Subsidiaries as at the dates and for the periods indicated. The
Pro Forma Balance Sheet (as defined in Section 6.9(c)) will
present fairly the financial position of Radiocoms and its
Subsidiaries on a pro forma basis as at the date indicated, as
adjusted as described in Section 6.9(c), in accordance with GAAP
(subject to normal year-end adjustments).
For the purposes hereof, the audited balance sheet of
Radiocoms as at September 30, 1995 and the unaudited balance
sheet of Radiocoms as at March 31, 1996, respectively, are
referred to as the "Radiocoms Balance Sheet" and the "March
Radiocoms Balance Sheet," respectively, and September 30, 1995
and March 31, 1996, respectively, are referred to as the
"Radiocoms Balance Sheet Date" and the "March Radiocoms Balance
Sheet Date," respectively.
4.9 NO UNDISCLOSED LIABILITIES. Radiocoms and its
Subsidiaries have no indebtedness, obligations or liabilities of
any kind (whether accrued, absolute, contingent or otherwise, and
whether due or to become due) (a) that would be required by GAAP
to be reflected in, reserved against or otherwise described in
the consolidated balance sheet of Radiocoms and its Subsidiaries
(including the notes thereto) or (b) which could reasonably be
expected to have a Material Adverse Effect on Radiocoms and its
Subsidiaries, taken as a whole, except (i) as set forth on the
March Radiocoms Balance Sheet or in the notes thereto, (ii) for
liabilities and obligations incurred in the ordinary course of
business consistent with past practice since the March Radiocoms
Balance Sheet Date and (iii) as set forth in Section 4.9 of the
Radiocoms Disclosure Letter.
4.10 ABSENCE OF CERTAIN DEVELOPMENTS. Except as
expressly contemplated by this Agreement or as set forth in
Section 4.10 of the Radiocoms Disclosure Letter, since the
Radiocoms Balance Sheet Date:
(a) there has not been any Material Adverse Change nor
has there occurred any event which is reasonably likely to result
in a Material Adverse Change with respect to the Business or
Radiocoms and its Subsidiaries, taken as a whole;
(b) there has not been any damage, destruction or
loss, whether or not covered by insurance, with respect to the
property and assets of the Business having a replacement cost of
more than L10,000 for any single loss or L10,000 for all such
losses;
(c) there has not been any declaration, setting aside
or payment of any dividend or other distribution in respect of
any shares of capital stock of Radiocoms or any of its
Subsidiaries or any repurchase, redemption or other acquisition
by Seller, Radiocoms or any Subsidiary of Radiocoms of any
outstanding shares of capital stock or other securities of, or
other ownership interest in, Radiocoms or any of its
Subsidiaries, except for (i) dividends to Radiocoms by any of its
wholly owned Subsidiaries and (ii) Seller's acquisition of the
Shares and the Preferred Shares as contemplated by this
Agreement;
(d) neither Radiocoms nor any or its Subsidiaries has
issued any equity securities or any securities convertible into
or exchangeable for equity securities of Radiocoms or any of its
Subsidiaries, other than the Shares and the Preferred Shares;
(e) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has awarded or paid any bonuses to employees
of the Business or Radiocoms with respect to the fiscal year
ended September 30, 1995 and the period ended March 31, 1996,
except to the extent accrued on the Radiocoms Balance Sheet or
the March Radiocoms Balance Sheet, or entered into any
employment, deferred compensation, severance or similar agreement
(or amended any such agreement) or agreed to increase the
compensation payable or to become payable by it to any of its
directors, officers, employees, agents or representatives or
agreed to increase the coverage or benefits available under any
severance pay, termination pay, vacation pay, company awards,
salary continuation for disability, sick leave, deferred compen
sation, bonus or other incentive compensation, insurance, pension
or other employee benefit plan, payment or arrangement made to,
for or with such directors, officers, employees, agents or
representatives (other than normal increases in the ordinary
course of business consistent with past practice and that in the
aggregate have not resulted in a material increase in the
benefits or compensation expense of Radiocoms and its
Subsidiaries, taken as a whole);
(f) there has not been any change by Radiocoms or any
of its Subsidiaries or Relevant Affiliates in accounting or Tax
reporting principles, methods or policies relating to the
Business;
(g) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has entered into any transaction or Contract
or conducted its business related to the Business other than in
the ordinary course consistent with past practice, and no
Relevant Affiliate of Radiocoms has entered into any transaction
or Contract or conducted any business related to the Business
other than in the ordinary course consistent with past practice,
except for the acquisition by Radiocoms of the EFJ Shares, the
EFJ Warrant and the issued and outstanding capital stock of
Linear Modulation Technology Limited ("LMT") and Securicor
Electronics Limited ("SEL");
(h) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has failed to promptly pay and discharge
current liabilities of the Business, except where disputed in
good faith by appropriate proceedings;
(i) neither Radiocoms nor any of its Subsidiaries has
made any loans (other than as evidenced by the EFJ Note),
advances or capital contributions to, or investments in, any
Person or paid any fees or expenses to Seller or any Affiliate of
Seller;
(j) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has mortgaged, pledged or subjected to any
Lien any assets related to the Business, or acquired any assets
or sold, assigned, transferred, conveyed, leased or otherwise
disposed of any assets of Radiocoms or its Subsidiaries or
Relevant Affiliates related to the Business, except for (i)
assets acquired or sold, assigned, transferred, conveyed, leased
or otherwise disposed of in the ordinary course of business
consistent with past practice, (ii) the transfer of the ownership
of the issued and outstanding capital stock of LMT and SEL from
Seller to Radiocoms on May 14, 1996 and (iii) the acquisition by
Radiocoms of the EFJ Shares and the EFJ Warrant from Securicor
Communications Inc. on June 17, 1996;
(k) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has discharged or satisfied any Lien related
to the Business, or paid any obligation or liability (fixed or
contingent) related to the Business, except (i) in the ordinary
course of business consistent with past practice and which, in
the aggregate, would not be material to Radiocoms and its
Subsidiaries, taken as a whole, and (ii) for the refinancing of
all of the outstanding indebtedness owed by Radiocoms to Seller
and its Affiliates in connection with the issuance of the
Preferred Shares;
(l) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has canceled or compromised any debt or claim
related to the Business or amended, canceled, terminated,
relinquished, waived or released any Contract or right related to
the Business except in the ordinary course of business consistent
with past practice and which, in the aggregate, would not be
material to the Business or Radiocoms and its Subsidiaries, taken
as a whole;
(m) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has instituted or settled any material Legal
Proceeding related to the Business;
(n) neither the Business nor Radiocoms or any of its
Subsidiaries has suffered any extraordinary loss or extraordinary
losses (as defined in Opinion No. 30 of the Accounting Principles
Board of the American Institute of Certified Public Accountants
and any amendments or interpretations thereof) (individually, an
"Extraordinary Loss" and, collectively, "Extraordinary Losses");
(o) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has transferred or granted any material
rights under any concessions, leases, licenses, agreements,
patents, inventions, trademarks, trade names, service marks,
brandmarks, brand names, copyrights or the like, or with respect
to any know-how, in any case related to the Business;
(p) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has received any notice or citation for any
violation of, nor, to the knowledge of Seller, has any complaint
been filed with the Department of Trade and Industry ("DTI")
alleging a violation of any rule, regulation or policy of the DTI
related to the Business, or allowed any equipment authorization
related to the Business issued by the FCC to Radiocoms or any of
its Subsidiaries or Relevant Affiliates to lapse or be impaired
in any manner, or operated any of its businesses related to the
Business in any manner not in compliance with its FCC equipment
authorizations and all applicable DTI or FCC rules, regulations
and policies; and
(q) none of Seller or its Relevant Affiliates (on
behalf of Radiocoms or any Subsidiary thereof), Radiocoms or any
Subsidiary of Radiocoms has agreed to do anything set forth in
this Section 4.10.
4.11 TAXES.
(a) (A) All material Tax Returns required to be filed
by or on behalf of Radiocoms and each of its Subsidiaries and
Relevant Affiliates, or the Affiliated Group(s) of which any of
them is or was a member, have been duly and timely filed with the
appropriate taxing authorities in all jurisdictions in which such
Tax Returns are required to be filed (after giving effect to any
valid extensions of time in which to make such filings), and all
such Tax Returns were true, complete and correct in all material
respects; (B) all Taxes payable by or on behalf of Radiocoms, its
Subsidiaries and Relevant Affiliates, either directly, as part of
an Affiliated Group Tax Return, or otherwise, have been fully and
timely paid, except to the extent adequately reserved for in
accordance with GAAP on the March Radiocoms Balance Sheet, and
adequate reserves or accruals for Taxes related to the Business
have been provided in accordance with GAAP on the March Radiocoms
Balance Sheet with respect to any period through the date thereof
for which Tax Returns have not yet been filed or for which Taxes
are not yet due and owing; and (C) no agreement, waiver or other
document or arrangement extending or having the effect of
extending the period for assessment or collection of Taxes
related to the Business (including, but not limited to, any
applicable statute of limitation) has been executed or filed with
any taxing authority by or on behalf of Radiocoms or any of its
Subsidiaries or Relevant Affiliates, or any Affiliated Group(s)
of which any of them is or was a member.
(b) Radiocoms and each of its Subsidiaries and
Relevant Affiliates has complied in all material respects with
all applicable Laws, rules and regulations relating to the
payment and withholding of Taxes related to the Business and has
duly and timely withheld from employee salaries, wages and other
compensation related to the Business and has paid over to the
appropriate taxing authorities all amounts required to be so
withheld and paid over for all periods under all applicable Laws.
(c) Purchaser has received (A) complete copies of all
material income, franchise or corporation Tax Returns of
Radiocoms and each of its Subsidiaries and Relevant Affiliates
(or, in the case of Tax Returns filed for an Affiliated Group,
the portion of such Tax Returns relating to Radiocoms or any of
its Subsidiaries or Relevant Affiliates) relating to the taxable
periods since October 1, 1993 and (B) details of all material
issues of which Seller has knowledge raised by any taxing
authority within the last six years relating to any material
Taxes due from Radiocoms and each of its Subsidiaries and
Relevant Affiliates with respect to the income, assets or
operations of the Business.
(d) No claim has been made by a taxing authority in a
jurisdiction where Radiocoms or any of its Subsidiaries or
Relevant Affiliates does not file an income, franchise or
corporation Tax Return such that Radiocoms or such Subsidiary or
Relevant Affiliate is or may be subject to taxation related to
the Business by that jurisdiction.
(e) All deficiencies asserted or assessments made as a
result of any examinations by any taxing authority of the Tax
Returns of or covering or including Radiocoms and/or its
Subsidiaries or Relevant Affiliates have been fully paid, and
there are no other audits or investigations by any taxing
authority in progress, nor have Seller, Radiocoms or any of its
Subsidiaries or Relevant Affiliates received any written notice
from any taxing authority that it intends to conduct such an
audit or investigation with respect to the Business. No request
for a ruling, clearance or a determination letter related to the
Business is pending with any taxing authority. No issue has been
raised in writing by any taxing authority in any current or prior
examination which, by application of the same or similar
principles, could reasonably be expected to result in a proposed
deficiency against Radiocoms or any Subsidiary or Relevant
Affiliate for any subsequent taxable period that could be
material.
(f) Neither Radiocoms (except with one or more of its
Subsidiaries or Relevant Affiliates) nor any Subsidiary or
Relevant Affiliate (except with Radiocoms or another Subsidiary
or Relevant Affiliate) is a party to any Tax Sharing Agreement or
similar agreement or arrangement (whether or not written)
pursuant to which it will have any obligation to make any
payments after the Closing.
(g) There are no liens as a result of any unpaid Taxes
upon any of the assets of Radiocoms or any of its Subsidiaries or
Relevant Affiliates.
(h) Radiocoms, its Subsidiaries and its Relevant
Affiliates have not made any payment to or provided any benefit
for any of its officers, employees, former officers or former
employees and have not made or agreed to make a payment of an
income nature which would not be allowable as a deduction in
computing its profits for corporation tax purposes except in the
ordinary course of business.
(i) As of the Closing, Radiocoms and its Subsidiaries
will have received payment equal to the tax benefit obtained by
the claimant company for all amounts surrendered as group relief
in accordance with Section 402 of the Income and Corporation
Taxes Xxx 0000.
(j) Neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has acquired any of its assets by virtue of a
transfer from a group company under Section 171 of the Taxation
of Chargeable Gains Xxx 0000, except for those specified in
Section 4.11(j) of the Radiocoms Disclosure Letter.
(k) No claim has been made under Section 152 of the
Taxation of Chargeable Gains Xxx 0000, which affects the amount
of the consideration which would be allowable under Section 8 of
the Taxation of Chargeable Gains Xxx 0000 on a disposal of an
asset by Radiocoms or its Subsidiaries or Relevant Affiliates.
(l) Except for the issuances of the Shares and the
Preferred Shares contemplated by this Agreement, Radiocoms, its
Subsidiaries and its Relevant Affiliates have at no time after
April 6, 1965 repaid, redeemed or purchased or agreed to repay,
redeem or purchase, or granted an option under which it may
become liable to purchase, any shares of any class of its issued
share capital nor have they after that date capitalized or agreed
to capitalize in the form of shares or debentures any profits or
reserves of any class or description or otherwise issued or
agreed to issue any share capital other than for the receipt of a
new consideration (within the meaning of Part VI of the Income
and Corporation Taxes Act 1988) or passed or agreed to pass any
resolution to do so.
(m) No securities (within the meaning of Part VI of
the Income and Corporation Taxes Act 1988) issued by Radiocoms or
any of its Subsidiaries and its Relevant Affiliates remaining in
issue at the date of the Closing were issued in such
circumstances that any interest or any other distribution out of
assets in respect thereof falls to be treated as a distribution
under Section 209(2)(d), (da) or (e).
(n) Neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has received any capital distribution to
which the provisions of Section 189 of the Taxation of Chargeable
Gains Xxx 0000 could apply.
(o) Except as disclosed in Section 4.11(o) of the
Radiocoms Disclosure Letter, no asset of Radiocoms or its
Subsidiaries or Relevant Affiliates shall be deemed under
Sections 178 or 179 of the Taxation of Chargeable Gains Xxx 0000
to have been disposed of and reacquired by virtue of or in conse
quence of the entering into or performance of this Agreement or
any other event since the Radiocoms Balance Sheet Date.
(p) Neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has been a party to or otherwise involved in
any arrangement of which the main purpose was the avoidance of
liability to taxation or any transaction to which any of the
following provisions could apply:
(i) Sections 29-34 of the Taxation of Chargeable
Gains Xxx 0000;
(ii) Sections 116-118 of the Income and
Corporation Taxes Xxx 0000;
(iii) Section 399 of the Income and Corporation
Taxes Xxx 0000; or
(iv) Sections 729-746 or Sections 774-778 of Part
XVII of the Income and Corporation Taxes Xxx 0000.
4.12 REAL PROPERTY.
(a) Section 4.12(a) of the Radiocoms Disclosure Letter
describes (i) all real property and all interests therein owned
of record or beneficially by Radiocoms or any of its Subsidiaries
or, by any Relevant Affiliate of Radiocoms and occupied by or
used in the Business (the "Radiocoms Real Properties"), (ii) all
leases of real property directly or principally related to the
Business or to which Radiocoms or any of its Subsidiaries is a
party or by which Radiocoms or any of its Subsidiaries is bound
and (iii) the purposes for which such properties are used. True,
correct and complete copies of all documents referred to in
Section 4.12(a) of the Radiocoms Disclosure Letter have been
delivered or made available to Purchaser.
(b) (i) Radiocoms or one of its Subsidiaries or
Relevant Affiliates (which Relevant Affiliate is identified
in Section 4.12(a) of the Radiocoms Disclosure Letter) has
(A) good and marketable title to the Radiocoms Real
Properties, free and clear of all Liens except for
imperfections of title, if any, that do not materially
detract from the value of the property subject thereto, or
materially interfere with the manner in which such property
is currently being used or is proposed to be used in the
Business by Radiocoms or any of its Subsidiaries or
materially impair the operations of the Business or
Radiocoms or any of its Subsidiaries and which do not secure
obligations for borrowed money used in the Business or the
deferred portion of the purchase price of acquired property
used in the Business (collectively, the "Radiocoms Permitted
Encumbrances"), and (B) all material easements and rights,
including, but not limited to, easements for power lines,
water lines, sewers, roadways and other means of ingress and
egress, necessary to conduct the business conducted on the
Radiocoms Real Properties; and none of the Liens set forth
in Section 4.12(b) of the Radiocoms Disclosure Letter has
had or could reasonably be expected to have a Material
Adverse Effect on the Business or Radiocoms and its
Subsidiaries, taken as a whole;
(ii) Neither the whole nor any portion of any of
the Radiocoms Real Properties is subject to any pending
condemnation or similar proceeding by any Governmental Body,
and Seller does not know that any such condemnation or
taking is threatened or contemplated;
(iii) Neither Radiocoms nor any of its Subsid
iaries is, or as of the Closing Date will be, in violation
of any applicable Law or Order relating to the Radiocoms
Real Properties, except where the failure to be in compli
ance with such Law or Order could not reasonably be expected
to have a Material Adverse Effect on the Business or
Radiocoms and its Subsidiaries, taken as a whole, and no
notice from any Governmental Body has been served upon
Radiocoms or any of its Subsidiaries or Affiliates claiming
any material violation thereof or calling attention to the
need for any material work, repairs, construction,
alterations, installations on or in connection with said
owned or leased real properties used in connection with the
Business or by Radiocoms and its Subsidiaries;
(iv) Radiocoms or one of its Subsidiaries or
Relevant Affiliates has obtained all permits, licenses or
certificates of occupancy pertaining to the ownership or
operation of any of the owned or leased real properties of
the Business or Radiocoms or any of its Subsidiaries
(including, without limitation, the Radiocoms Real
Properties) that are required to be obtained from any
Governmental Body by a Relevant Affiliate (in connection
with the Business) or by Radiocoms or any of its
Subsidiaries, except where the failure to obtain such
permits, licenses or certificates of occupancy could not
reasonably be expected to have a Material Adverse Effect on
the Business or on Radiocoms and its Subsidiaries, taken as
a whole;
(v) Each of the leases of real property referred
to in Section 4.12(a) above is valid and enforceable in
accordance with its terms, subject to the Bankruptcy
Exception, and there is not under any such lease any
existing breach, default, event of default or event which,
with notice and/or lapse of time, would constitute a breach,
default or event of default (A) by Radiocoms or any of its
Subsidiaries or Relevant Affiliates or (B) to the knowledge
of Seller, by any other party to any such lease, except
where such breach, default or event of default could not
reasonably be expected to have a Material Adverse Effect on
the Business or Radiocoms and its Subsidiaries, taken as a
whole;
(vi) No previous or current party to any such
lease has given notice of or made a claim with respect to
any breach or default, the consequences of which,
individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect on the Business
or Radiocoms and its Subsidiaries, taken as a whole;
(vii) None of the rights of Radiocoms or any of
its Subsidiaries or Relevant Affiliates under any of such
leases will be subject to termination or modification as the
result of the consummation of the transactions contemplated
by this Agreement; and
(viii) No consent or approval of any third party
is required under any of such real property leases to the
consummation of the transactions contemplated hereby.
4.13 TANGIBLE PERSONAL PROPERTY.
(a) Section 4.13(a) of the Radiocoms Disclosure Letter
sets forth all leases of personal property related to the
Business, other than leases for motor vehicles, involving annual
payments in excess of L10,000 to which Radiocoms or any of its
Subsidiaries or Relevant Affiliates is a party or by which
Radiocoms or any of its Subsidiaries or Relevant Affiliates is
bound. True, correct and complete copies of all documents
referred to in Section 4.13(a) of the Radiocoms Disclosure Letter
have been delivered or made available to Purchaser.
(b) (i) Each of the leases of personal property
referred to in Section 4.13(a) is valid and enforceable in
accordance with its terms, subject to the Bankruptcy
Exception, and there is not, under any such lease, any
existing breach, default, or event of default or event
which, with notice and/or lapse of time, would constitute a
breach, default or event of default (A) by Radiocoms or any
of its Subsidiaries or Relevant Affiliates or, (B) to the
knowledge of Seller, by any other party to any such lease,
except where such breach, default, event of default could
not reasonably be expected to have a Material Adverse Effect
on the Business or Radiocoms and its Subsidiaries, taken as
a whole;
(ii) No previous or current party to any such
lease has given notice of or made a claim with respect to
any breach or default thereunder, the consequences of which,
individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect on the Business
or Radiocoms and its Subsidiaries, taken as a whole;
(iii) None of the rights of any of Radiocoms or
any of its Subsidiaries or Relevant Affiliates under any of
such leases will be subject to termination or modification
as the result of the consummation of the transactions
contemplated by this Agreement;
(iv) No consent or approval of any third party is
required under any lease referred to in Section 4.13(a) for
the consummation of the transactions contemplated hereby;
(v) Radiocoms or one of its Subsidiaries or
Relevant Affiliates (which is identified) has good title to
all material items of tangible personal property reflected
on the March Radiocoms Balance Sheet (except as sold or
disposed of subsequent to the date thereof in the ordinary
course of business consistent with past practices), free and
clear of Liens; and
(vi) All of the items of tangible personal
property not owned by Radiocoms or one of its Subsidiaries
or Relevant Affiliates, but used in the Business and which,
individually or in the aggregate, are material to the
conduct of such business, are in such condition that upon
the return of such properties to their owners in the current
condition of such properties, normal wear and tear excepted,
at the end of the relevant lease terms or as otherwise
contemplated by the applicable agreements with owners
thereof, the obligations of Radiocoms or its Subsidiaries or
Relevant Affiliates (as applicable) to such owners will be
discharged in all material respects.
4.14 INTANGIBLE PROPERTY. Section 4.14 of the
Radiocoms Disclosure Letter sets forth a list of each letters
patent, material trademark, material trade name, registered
copyright, material service xxxx, and any other similar,
registered property or trade right owned by Radiocoms or any of
its Subsidiaries, or owned by a Relevant Affiliate of Radiocoms
and used in the Business (collectively, together with all know-
how, processes, formulae, trade secrets, inventions, designs,
industrial models, computer programs and other technical data or
drawings, the "Radiocoms Intellectual Property"), and sets forth
all applications and licenses for any of the foregoing, and all
licenses or similar agreements or arrangements relating to the
operation of the Business or of Radiocoms or any of its
Subsidiaries or to which Radiocoms or any of its Subsidiaries is
a party or subject (property of the foregoing type being
hereinafter collectively referred to as the "Radiocoms IP
Licenses"), including all licenses or similar agreements or
arrangements by which Radiocoms or its Subsidiaries or Relevant
Affiliates are authorized to use intellectual property of a third
party related to the Business or have granted to a third party
rights to use intellectual property related to the Business.
Except as indicated in Section 4.14 of the Radiocoms Disclosure
Letter:
(a) Radiocoms or one of its Subsidiaries owns all
title and interest in, and, to the knowledge of Seller, right and
authority to use, in connection with the conduct of the Business
as such Business is presently conducted, all of the Radiocoms
Intellectual Property and Radiocoms IP Licenses listed in Section
4.14 of the Radiocoms Disclosure Letter, free and clear of all
Liens. The Radiocoms Intellectual Property and Radiocoms IP
Licenses (other than licenses granted to third parties), to the
knowledge of Seller, constitute all of the intellectual property
that Radiocoms needs to conduct the Business as currently con
ducted. The operation of the Business by Radiocoms and its Sub
sidiaries or Relevant Affiliates does not, to the knowledge of
Seller, infringe upon, misappropriate or violate (in each case,
in any material respect) any valid patent, trade name, trademark,
service xxxx, trade secret, brand xxxx and brand name and other
property or trade right of any other person, firm or corporation.
None of Radiocoms or any of its Subsidiaries or Affiliates has
received any notice or has knowledge pertaining to any actual or
threatened, infringement, misappropriation or violation of the
items of intellectual property listed in the preceding sentence;
(b) There are no asserted or, to the knowledge of
Seller, threatened, governmental, judicial or adversarial
proceedings, hearings, arbitrations, disputes or claims with
respect to any of the Radiocoms Intellectual Property or
Radiocoms IP Licenses listed in Section 4.14 of the Radiocoms
Disclosure Letter;
(c) To the knowledge of Seller, no third party is
infringing or engaging in an unauthorized use of the Radiocoms
Intellectual Property or Radiocoms IP Licenses; and
(d) To the knowledge of Seller, neither Seller nor any
of its Affiliates has made any disclosure to a third party that
would materially impair the value of any confidential Radiocoms
Intellectual Property or confidential Radiocoms IP Licenses, and
Seller and its Affiliates have treated such confidential
information in a manner reasonably designed to preserve its
confidentiality.
4.15 MATERIAL CONTRACTS.
(a) Section 4.15(a) of the Radiocoms Disclosure Letter
sets forth (i) each oral or written agreement, arrangement or
commitment of any nature relating to the Business or to which
Radiocoms or any of its Subsidiaries is a party or by which it is
bound involving (A) a commitment of more than L50,000 or (B) the
purchase or sale of any assets relating to the Business or of
Radiocoms or its Subsidiaries having a book value or more than
L50,000 and (ii) all (A) loan or credit agreements, indentures,
guaranties, promissory notes, pledge agreements, mortgages,
security agreements or other instruments in respect of borrowed
funds, (B) distributorship, agency, representation, dealer or
similar agreements, (C) covenants not to compete or other
agreements or understandings which would restrict the
distribution or sale of any of the products of the Business or of
Radiocoms or any of its Subsidiaries in any geographical area or
to any person or class of persons, or which in any way affects
the price or other terms at which the Business or Radiocoms or
any of its Subsidiaries or any agent or representative of the
Business or Radiocoms or any of its Subsidiaries may sell
products or services, (D) contracts or commitments for capital
expenditures, and (E) partnership or joint venture agreements.
Agreements, arrangements and commitments of the types described
in subsections (i) and (ii) above are hereinafter collectively
referred to as the "Radiocoms Material Agreements."
(b) Each Radiocoms Material Agreement is valid and
enforceable in accordance with its terms, subject to the
Bankruptcy Exception. (i) Neither Radiocoms nor any of its
Subsidiaries or Relevant Affiliates nor, to the knowledge of
Seller, any other party thereto, is in breach of or in default
under any Radiocoms Material Agreement, (ii) to the knowledge of
Seller, there has not occurred any event which, after the giving
of notice or the lapse of time or both, would constitute a
default under, or result in a breach of, any Radiocoms Material
Agreement, (iii) no previous or current party to any Radiocoms
Material Agreement has given notice of or made a claim or, to the
knowledge of the Seller, threatened to make a claim, with respect
to any breach or default thereunder, the consequences of which,
in the case of clauses (i), (ii) and (iii), individually or in
the aggregate, could reasonably be expected to have a Material
Adverse Effect on the Business or Radiocoms and its Subsidiaries,
taken as a whole, (iv) none of the rights of Radiocoms or any of
its Subsidiaries or Affiliates under any of the Radiocoms
Material Agreements will be subject to termination or
modification as a result of the consummation of the transactions
contemplated by this Agreement, (v) no consent or approval of any
third party is required under any Radiocoms Material Agreement to
the consummation of the transactions contemplated hereby and (vi)
no power of attorney that remains in effect has been granted by
Radiocoms or its Subsidiaries.
(c) Section 4.15(c) of the Radiocoms Disclosure Letter
sets forth a true and accurate list of all oral or written
agreements, arrangements or commitments of any nature between
Radiocoms or any of its Subsidiaries or Affiliates, on the one
hand, and EFJ, on the other hand.
4.16 EMPLOYEE BENEFITS.
(a) For purposes of this Agreement, the following
terms shall have the following meanings: (i) "Approved" means
approved by the Board of Inland Revenue as an exempt approved
scheme (within the meaning of Section 592 Income and Corporation
Taxes Act of 1988) and "Approval" has the corresponding meaning;
(ii) "Retirement/Death/Disability Benefit" means any pension,
lump sum, gratuity or other like benefit given or to be given on
retirement or on death, or in anticipation of retirement, or, in
connection with past service after retirement or death, or to be
given on or in anticipation of, or in connection with any change
in the nature of the service of the employee in question or given
or to be given on or in connection with the illness, injury or
disability of, or suffering of any accident by, an employee of
Radiocoms or any of its Subsidiaries or Relevant Affiliates;
(iii) "Scheme" means those of the Schemes participated in by
Radiocoms, or any of its Subsidiaries or Relevant Affiliates,
such Schemes being referred to on Section 4.16(b) of the
Radiocoms Disclosure Letter; (iv) "Scheme Documents" means the
documents constituting and governing a Scheme (including all
notices, announcements and explanatory literature of current
effect) and all documents relating to the participation by
Radiocoms or any of its Subsidiaries or Relevant Affiliates in
and obligations of those entities under such Scheme; (v)
"Trustees" means the trustees of a Scheme and includes their
predecessors as trustees; (vi) "Valuation" means the most recent
actuarial valuation of a Scheme as set forth on Section 4.16(b)
of the Radiocoms Disclosure Letter with respect to each Scheme
where such a Valuation is required by the Inland Revenue; and
(vii) "Valuation Date" and "Valuation Report" mean, respectively,
the date as at which the Valuation was carried out and the report
of the actuary preparing the Valuation.
(b) Section 4.16(b) of the Radiocoms Disclosure Letter
sets forth a list of all Schemes. All information made available
to Purchaser in connection with each Scheme is complete and
accurate in all material respects. Except pursuant to the
Schemes, neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has paid, provided or contributed toward, and
neither Radiocoms nor any of its Subsidiaries or Relevant
Affiliates is under any obligation or commitment (whether or not
legally enforceable) to pay, provide or contribute towards, any
Retirement/Death/Disability Benefit for and or in respect of any
present or past employee (or any spouse, child or dependent of
any them) of Radiocoms or any of its Subsidiaries or Relevant
Affiliates.
(c) Seller has made available to Purchaser prior to
the date hereof: (i) true, complete and correct copies of all
Scheme Documents; (ii) the names and addresses of the current
trustees and administrators of each Scheme; (iii) a complete copy
of the latest Trustees' Report to members of the audited accounts
of each Scheme (including the auditor's report); (iv) a complete
copy of the most recent Valuation Report and, if not stated
therein, the name and address of the current actuary to each
Scheme; (v) a list of each Scheme's active members, pensioners
and deferred pensioners who are employees or past employees of
Radiocoms with particulars relevant to establish their
entitlement to benefits thereunder; (vi) a statement of the rate
at which during the current and preceding Scheme year each
participating employer contributes to the Scheme and makes
payments in respect of the expenses of administration, management
and trusteeship of the Scheme and of any proposal to change such
rate; (vii) the identity of the principal employer of each Scheme
and particulars of the terms of participation of each of
Radiocoms and any of its Subsidiaries in each Scheme; (viii) all
material particulars of the assets currently held by each Scheme
by reference to the categories listed in Schedule 3 to the
Occupational Pension Schemes (Disclosure of Information)
Regulations 1986 (including full particulars of any employer-
related investment as defined in Section 112 of the Pension
Schemes Act 1993) of any investment in which more than 5% of the
total value of the net assets of the Scheme is invested and of
any requirements relating to the Schemes' investments imposed by
the Inland Revenue (other than requirements relating to Approved
Retirement Benefit Schemes generally) and all material
particulars of any common investment fund in which the Scheme
participates; (ix) all material particulars of any surplus
payment within the meaning of the Pension Scheme Surpluses
(Administration) Regulations 1987 which has been made or is
proposed to be made from such Scheme; (x) a complete copy (or, in
the case of an oral contract, full written particulars) of any
contract with any person providing services of any nature in
connection with the Scheme, including, without limitation,
investment management or advisory services, custody services,
administration and data processing services; (xi) all material
particulars of any discretionary practice of the Scheme in
relation to employees or past employees of Radiocoms or any of
its Subsidiaries or Relevant Affiliates in the preceding three
years (other than pension increases and individual enhancements
or additions); (xii) a complete copy of each contract of
insurance and of any associated agreement with the insurance
company relating to the Scheme and full particulars of the
premiums payable under them; (xiii) a complete copy of the
contracting-out certificate relating to the participation of
Radiocoms and any of its Subsidiaries or Relevant Affiliates and
of the Inland Revenue's Letter of Approval in force in relation
to such Scheme; and (xiv) the basic information about the Scheme
required to be given under Schedule 1 of the Occupational Pension
Schemes (Disclosure of Information) Regulations 1986.
(d) Each Scheme is Approved as of its commencement
and, to Seller's knowledge, there is no ground on which Approval
may be withdrawn or cease to apply.
(e) The active members of the Scheme employed by
Radiocoms or any of its Subsidiaries or Relevant Affiliates are
contracted out of the State Earnings-Related Pension Scheme by
reference to the Scheme. To Seller's knowledge, there is no
ground on which such contracted-out status may be withdrawn or
cease to apply. All state scheme premiums, within the meaning of
the Xxxxxxx Xxxxxxx Xxx 0000, due in respect of any member or
former member of the Scheme who is an employee or past employee
of Radiocoms or any of its Subsidiaries or Relevant Affiliates
have been paid in accordance with applicable statutory
requirements.
(f) Every employee of Radiocoms or any of its
Subsidiaries who is entitled to membership of the Scheme (whether
under the Scheme Documents or any applicable law) has been
invited to join the Scheme as of the date on which he became
entitled. Radiocoms and its Subsidiaries or Relevant Affiliates
have been properly admitted to participation in each Scheme in
which employees of Radiocoms and its Subsidiaries or Relevant
Affiliates participate.
(g) Since the effective date of the Valuation, no
power has been exercised under the Scheme to admit to membership
any employee of Radiocoms or any of its Subsidiaries or Relevant
Affiliates who is not automatically eligible for membership under
the Scheme Documents or to grant or augment any benefit under the
Scheme in respect of employees of Radiocoms or its Subsidiaries
or Relevant Affiliates which would not otherwise have been pro
vided in the ordinary course under the Scheme Documents.
(h) To Seller's knowledge, the books of account,
Trustees' minutes and other records of the Scheme have been
properly and accurately maintained in all material respects and,
to Seller's knowledge, all such books, minutes and records and
originals of the Scheme Documents are in the possession of the
Trustees.
(i) All contributions and expenses payable by
Radiocoms or any of its Subsidiaries or Relevant Affiliates
(including actuarial, trusteeship, consultancy, legal, audit and
administrative expenses) in respect of the Scheme have been paid
and, to Seller's knowledge, no services have been rendered or
requested in respect of the Scheme of which an account has not
been rendered and which when rendered would tend to increase
materially the rate of contribution of Radiocoms or any of its
Subsidiaries or Relevant Affiliates to each of the Schemes in
respect of the recoupment of such expenses or costs.
(j) Each contract and agreement referred to in sub-
paragraph (c)(xii) is enforceable and, to Seller's knowledge,
there is no ground on which the insurers might avoid liability
under it. All premiums payable under all such contracts have
been paid. Without limiting the foregoing, all lump sum and
pension benefits payable in the event of the death of an employee
of Radiocoms or any of its Subsidiaries or Relevant Affiliates
while in service are fully insured, and all benefits in respect
of employees of Radiocoms or any of its Subsidiaries or Relevant
Affiliates which are in payment and which are paid up (payment
not having commenced) and all contingent benefits are fully
secured, with a reputable insurance company authorized to carry
on ordinary long-term insurance business under the Insurance
Companies Xxx 0000.
(k) To Seller's knowledge, the Scheme has at all times
been operated in all material respects in accordance with, and
the Trustees and all of the employers participating in the Scheme
have observed and performed all their obligations under, the
Scheme Documents, the requirements of the Inland Revenue for
Approval, the requirements of the Occupational Pensions Board
applicable to the Scheme and all applicable laws.
(l) To Seller's knowledge, the Valuation is accurate
in all material respects on the basis of the information supplied
to the actuary who carried out the Valuation. Such information
supplied to the actuary was complete and accurate in all material
respects as of the date when it was so supplied, including the
information relating to the assets held by the Scheme and to any
augmentation of benefits, and to any benefits which would not
otherwise have been provided under the Scheme Documents, to or in
respect of employees of Radiocoms or any of its Subsidiaries or
Relevant Affiliates. Since the Valuation Date: (i) pensionable
earnings of employees of Radiocoms or any of its Subsidiaries or
Relevant Affiliates have not increased at a rate greater than the
rate of increase assumed for the purpose of the Valuation Report;
and (ii) no action has been taken by Seller or by Radiocoms or
any of its Subsidiaries or Relevant Affiliates (including,
without limitation, by way of a change relating to the assets
held by the Scheme or in investment policy or practice or in the
number, age or sex distribution of members) which might cause the
result of an actuarial valuation carried out at Closing, adopting
the same actuarial methods and assumptions as were adopted for
the purpose of the Valuation, to be materially different from the
result of the Valuation.
(m) At Closing the Scheme will hold assets which have
a value at least as great as the value of the assets as stated in
the Valuation increased since the Valuation Date at a rate not
lower than the rate of investment return assumed for the purpose
of the Valuation. On the basis of the methods and assumptions
used for the Valuation, the rate of contributions payable by
Radiocoms or any of its Subsidiaries or Relevant Affiliates
recommended in the Valuation Report will be adequate to fund the
benefits in payment and prospectively or contingently payable
under the Scheme in respect of employees of Radiocoms or any of
its Subsidiaries or Relevant Affiliates.
(n) Each transfer payment received by the Scheme after
17th May, 1990 in respect of employees or pensioners or deferred
pensioners who are past employees of Radiocoms or any of its
Subsidiaries or Relevant Affiliates and who are members of the
Scheme has been calculated in such a way that it does not treat
men and women unequally insofar as the payment relates to
employment after that date but disregards the application of any
actuarial assumption which may by law differ as between men and
women for this purpose.
(o) No Scheme is registered under Chapter III of Part
V of the Income and Corporation Taxes Act 1988 and no application
for such a registration has been made.
(p) Section 4.16(p) of the Radiocoms Disclosure Letter
sets out full details of all current dispensations and notices
granted by the Inland Revenue relating to Radiocoms, its
Subsidiaries and Relevant Affiliates under Section 166 of the
Income and Corporation Taxes Xxx 0000.
(q) No Scheme is subject to the provisions of Section
187 and Schedule 9 of the Income and Corporation Taxes Xxx 0000.
(r) No employee share ownership trust established in
respect of the employees of Radiocoms or its Subsidiaries or
Relevant Affiliates is subject to any charge to tax under Section
68 or Section 71 of the Finance Xxx 0000 and there are no
circumstances likely to lead to such a charge and Radiocoms, its
Subsidiaries and its Relevant Affiliates are not subject to any
liability whether actual or potential under Section 68(3) of the
Finance Xxx 0000 to pay tax otherwise due from the trustees of
any such trust.
(s) Each Scheme has been operated in accordance and in
compliance with the recommendations set forth in Section 5 of the
most recent Valuation Report that is set forth in the Radiocoms
Disclosure Letter.
4.17 LABOR.
(a) No employees of the Business or Radiocoms or any
of its Subsidiaries are represented by any labor organization,
and no labor organization or group of employees of the Business
or Radiocoms or any of its Subsidiaries has made a demand for
recognition, has filed a petition seeking a representation
proceeding or given Radiocoms or any of its Subsidiaries or
Relevant Affiliates written notice of any intention to be
represented by a collective bargaining representative. No
collective bargaining agreement is currently being negotiated
with respect to any employees of the Business or Radiocoms or any
of its Subsidiaries.
(b) (i) The Business and Radiocoms and each of its
Subsidiaries is in material compliance with all applicable Laws
respecting employment and employment practices, terms and
conditions of employment and wages and hours, and with each
collective bargaining agreement applicable to it, and is not
engaged in any unfair labor practice; (ii) to the knowledge of
Seller, there is no unfair labor practice charge, complaint or
similar claim relating to the Business against Radiocoms or any
of its Subsidiaries or Relevant Affiliates pending or threatened
before any Governmental Body charged with the regulation or
oversight of labor relations or similar matters; (iii) there is
no labor strike, work slowdown or stoppage or other significant
labor dispute or disturbance pending or, to the knowledge of
Seller, threatened against or affecting the Business or Radiocoms
or any of its Subsidiaries; (iv) to the knowledge of Seller,
there is no representation claim or petition pending before any
Governmental Body charged with the regulation or oversight of
labor relations or similar matters, and no question concerning
representation exists with respect to the respective employees of
the Business or Radiocoms or any of its Subsidiaries; (v) no
grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending, and no claim
therefor exists, which in any case could reasonably be expected
to have a Material Adverse Effect on the Business or Radiocoms
and its Subsidiaries, taken as a whole; and (vi) neither the
Business nor Radiocoms or any of its Subsidiaries has experienced
any work stoppage or other significant labor difficulty during
the past three years.
(c) There are no agreements or supplemental agreements
currently in effect between Radiocoms or any of its Subsidiaries
or Affiliates and any collective bargaining representative
representing a group of employees employed by the Business or
Radiocoms or any of its Subsidiaries.
(d) Section 4.17(d) of the Radiocoms Disclosure Letter
sets forth the names of all present salaried employees of the
Business or of Radiocoms and its Subsidiaries and their current
annual salaries and other compensation.
4.18 LITIGATION.
(a) Except as disclosed in Section 4.18(a) of the
Radiocoms Disclosure Letter, (i) there are no Legal Proceedings
(including, but not limited to, any proceedings which seek the
revocation, non-renewal or the adverse modification of any DTI
license) asserted or, to the knowledge of Seller, threatened, or
any governmental investigation pending or, to the knowledge of
Seller, threatened, against or affecting the Business or
Radiocoms or any of its Subsidiaries at law or in equity, before
or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency, court or other
instrumentality, or by any private person, firm, corporation or
other entity (such representation being limited, in the case of
any such matter in which the sole remedy sought or threatened to
be sought, as the case may be, is the payment of money, to
matters in which the sum sought or threatened to be sought is
unspecified or in excess of L10,000), (ii) to the knowledge of
Seller, there is no basis for any such Legal Proceeding which
could, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on the Business or Radiocoms
and its Subsidiaries, taken as a whole and (iii) there are no
existing or, to the knowledge of Seller, threatened orders,
judgments or decrees of any court or governmental agency
affecting the Business or Radiocoms or any of its Subsidiaries or
any of their respective properties or assets.
(b) Seller is not aware of any facts which would
disqualify Radiocoms or any of its Subsidiaries under the
Telecommunications Act of 1984 or the rules, regulations and
practices of the DTI from transferring ownership of the Business
and Radiocoms to Purchaser. Neither Radiocoms or any of its
Subsidiaries nor the Seller or any of its Affiliates shall take
any action which would cause such disqualification or fail to
take any action if the failure to take such action would cause
such disqualification.
(c) There are no Legal Proceedings asserted or, to the
knowledge of Seller, threatened against, or any governmental
investigation pending or, to the knowledge of Seller, threatened
against, the Business, Radiocoms or any of its Subsidiaries or
Seller or any of its Affiliates which would give any third party
the right to enjoin or rescind the transactions contemplated by
this Agreement or otherwise prevent any of the parties hereto
from complying with the terms and provisions of this Agreement.
(d) There are no applications, complaints or
proceedings pending or, to the knowledge of Seller, threatened
before the DTI, relating (i) to the Business or (ii) to Radiocoms
and its Subsidiaries or Relevant Affiliates which, if adversely
determined, could reasonably be expected to have a Material
Adverse Effect on the Business or Radiocoms and its Subsidiaries,
taken as a whole.
4.19 COMPLIANCE WITH LAWS.
(a) To the knowledge of Seller, Radiocoms and each of
its Subsidiaries and Relevant Affiliates is in compliance with
all Laws applicable to the Business or the conduct of the Busi
ness or its operations or the use of its properties (including
any leased properties) and assets, except for Environmental Laws
(which are addressed in Section 4.20) and such instances of non-
compliance as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the
Business or Radiocoms and its Subsidiaries, taken as a whole.
Neither Seller nor Radiocoms or any of its Subsidiaries has
received any written notice alleging any non-compliance with
applicable Laws.
(b) Except as set forth in Section 4.19(b) of the
Radiocoms Disclosure Letter, Radiocoms or one of its Subsidiaries
has timely obtained all required FCC consents or authorizations
or consents or authorizations of other Governmental Entities that
perform functions or regulate matters similar to those performed
or regulated by the FCC (the "Equipment Authorizations")
necessary to manufacture and commercially distribute its linear
modulation technology in the United States and the United Kingdom
and each other country in which such technology has been or is
being sold by Radiocoms, its Subsidiaries or any of the Relevant
Affiliates. The Equipment Authorizations are valid and in full
force and effect. The equipment for which Radiocoms or any of
its Subsidiaries has received the Equipment Authorizations
conforms to the terms and conditions of such Authorizations and,
to the knowledge of Seller, otherwise complies with all
applicable rules, regulations and policies (including, without
limitation, those of the FCC), except for such instances of non-
compliance as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the
Business or Radiocoms and its Subsidiaries, taken as a whole.
4.20 ENVIRONMENTAL MATTERS.
(a) For purposes of this Section 4.20, "Real Property"
means all real property presently owned or operated by Radiocoms
or any of its Subsidiaries or by Relevant Affiliates and used in
the Business and all real property (including property held as
trustee or in any other fiduciary capacity) over which Radiocoms
or any of its Subsidiaries currently exercises ownership,
dominion, management or control. "Divested Real Property" means
any real property formerly owned or operated by Radiocoms or its
Subsidiaries or Relevant Affiliates which, if it were still so
owned or operated, would constitute Real Property.
(b) Except as would not individually or in the
aggregate have a Material Adverse Effect on Radiocoms and its
Subsidiaries, taken as a whole, or the Business,
(i) the operations of the Business, Radiocoms and
each of its Subsidiaries (and, with respect to the Business,
each of its Relevant Affiliates) are and have been in com
pliance with all applicable Environmental Laws,
(ii) to the knowledge of Seller, the Real
Property does not (and any Divested Property at the time of
its disposition did not) contain any Hazardous Substance in
violation of any applicable Environmental Law,
(iii) neither Radiocoms nor any of its Subsid
iaries or Relevant Affiliates has any knowledge that, or has
received any written notices, demand letters or written
requests for information from any Governmental Body or any
third party indicating that, it may be in violation of, or
liable under, any Environmental Law,
(iv) there are no civil, criminal or
administrative actions, suits, demands, claims, hearings,
investigations or proceedings pending or, to the knowledge
of Seller, threatened against Radiocoms or any of its Sub
sidiaries or Affiliates with respect to the Business or the
Real Property (or any Divested Real Property) relating to
any violation or alleged violation, of any Environmental
Law,
(v) no reports have been filed, or are required
to be filed, by Radiocoms or any of its Subsidiaries or
Affiliates concerning the release of any Hazardous Substance
or the threatened or actual violation of any Environmental
Law on or at the Real Property (or any Divested Real
Property),
(vi) to the knowledge of Seller, there are no
underground storage tanks on, in or under any of the Real
Property, and there were no underground storage tanks on, in
or under any Divested Real Property at the time of its
disposition; and no underground storage tanks have been
closed or removed from any Real Property or Divested Real
Property while such Real Property or Divested Real Property
was owned or operated by Radiocoms or any of its
Subsidiaries, and
(vii) neither Radiocoms nor any of its
Subsidiaries (or, with respect to the Business, any of its
Relevant Affiliates) has incurred, and none of the Real
Property is presently subject to, any liabilities fixed (or,
to the knowledge of Seller, contingent) relating to any
suit, settlement, court order, administrative order, judg
ment or claim asserted or arising under any Environmental
Law.
(c) There are no permits or licenses required under
any Environmental Law in respect of the Real Property, except for
such permits or licenses the absence of which could not
reasonably be expected to have a Material Adverse Effect on
Radiocoms and its Subsidiaries, taken as a whole, or the
Business.
(d) Neither Radiocoms nor any of its Subsidiaries or
Affiliates has received written notice or otherwise has knowledge
that any part of the Real Property or any Divested Real Property
has been or is listed as a site containing Hazardous Substances
pursuant to any Environmental Law.
4.21 INSURANCE. Seller has made available to
Purchaser true, complete and correct copies of all policies of
insurance of any kind or nature covering the Business or
Radiocoms or any of its Subsidiaries or any of their respective
employees, properties or assets, including, without limitation,
policies of life, disability, fire, theft, workers compensation,
employee fidelity, product liability, and other casualty and lia
bility insurance. All such policies are in full force and effect
and have not been reduced or cancelled; no change in any such
insurance policy has been notified to Radiocoms or any of its
Subsidiaries or Affiliates; and, to the Seller's knowledge,
neither Radiocoms nor any of its Subsidiaries or any Relevant
Affiliate is in default of any provision thereof, except for such
defaults as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the
Business or Radiocoms and its Subsidiaries, taken as a whole.
4.22 RELATED PARTY TRANSACTIONS. Except as set
forth in Section 4.22 of the Radiocoms Disclosure Letter, neither
Seller nor any of its Affiliates has borrowed any moneys from or
has outstanding any indebtedness or other similar obligations to
Radiocoms or any of its Subsidiaries, and neither Radiocoms nor
any of its Subsidiaries has borrowed any moneys from or has any
indebtedness or other similar obligations to Seller or any of its
Affiliates or any holder of more than 15% of Securicor plc's
issued and outstanding shares of capital stock. Except as set
forth in Section 4.22 of the Radiocoms Disclosure Letter, none of
the Seller, Radiocoms or any of its Subsidiaries, any Affiliate
of Radiocoms or Seller or, to the knowledge of Seller, any holder
of more than 15% of Securicor plc's issued and outstanding shares
of capital stock, nor, to the knowledge of Seller, any officer or
employee of Radiocoms or its Affiliates (i) owns any direct or
indirect interest of any kind in, or controls or is a director,
officer, employee or partner of, or consultant to, or lender to
or borrower from or has the right to participate in the profits
of, any Person which is (A) a competitor, supplier, customer,
landlord, tenant, creditor or debtor of Radiocoms or any of its
Subsidiaries, (B) engaged in a business related to the business
of Radiocoms or any of its Subsidiaries, or (C) a participant in
any transaction to which Radiocoms or any of its Subsidiaries is
a party, except where any officer or employee of Radiocoms or its
Affiliates owns less than 5% of the issued and outstanding
capital stock of such Person and such Person's equity securities
are traded or quoted on a recognized stock exchange or quotation
system, or (ii) is a party to any Contract with Radiocoms or any
of its Subsidiaries.
4.23 FINANCIAL ADVISORS. Except as set forth in
Section 4.23 of the Radiocoms Disclosure Letter, no Person has
acted, directly or indirectly, as a broker, finder or financial
advisor for Seller in connection with the transactions
contemplated by this Agreement and no Person is entitled to any
fee or commission or like payment in respect thereof. Seller and
its Affiliates have entered into no agreement or arrangement
which would require Purchaser or any of its Subsidiaries to pay
any such fee or commission.
4.24 CLAIMS TO PROPERTY. Except as otherwise
disclosed in this Agreement, Seller and its Affiliates (other
than Radiocoms and its Subsidiaries) will, as of the Closing
Date, have no claim to any property, asset or right owned by
Radiocoms or any of its Subsidiaries or used in the Business by
Radiocoms or any of its Subsidiaries or Relevant Affiliates.
4.25 LICENSES; PERMITS; AUTHORIZATIONS.
(a) Except as set forth in Section 4.25 of the
Radiocoms Disclosure Letter, Radiocoms and its Subsidiaries have
all material approvals, authorizations, consents, licenses
(including DTI licenses), orders and permits (except for sales
and use tax permits, franchise tax registrations and zoning
ordinances, variances and permits) of all Governmental Bodies
required by the nature of the operations of the Business or
Radiocoms or any of its Subsidiaries to permit the operations
thereof in the manner in which they are currently conducted
(collectively, the "Radiocoms Licenses"). Radiocoms or one of
its Subsidiaries is the authorized legal holder of the Radiocoms
Licenses issued to and used by it, none of which is subject to
any restriction or condition which would limit in any material
respect the full operation of the Business or Radiocoms or any of
its Subsidiaries as now or proposed to be operated.
(b) Except as set forth in Section 4.25 of the
Radiocoms Disclosure Letter, there are no competing applications
or proceedings pending or complaints filed or, to the knowledge
of Seller, threatened, as of the date hereof, before the DTI
relating to the Business or its operations of Radiocoms other
than applications, proceedings or complaints which generally
affect the land mobile radio industry. The Radiocoms Licenses
are in good standing, are in full force and effect and are
unimpaired in any material respect by any act or omission of the
officers, directors or employees of Radiocoms or Seller or their
respective Affiliates, and the operation of the Business and
Radiocoms and its Subsidiaries are in accordance therewith in all
material respects and no registration, clearance or
prenotification is required in respect of them in connection with
the Transactions. Seller has no reason to believe that any of
such Radiocoms Licenses will not be renewed in the ordinary
course on their existing or no less favorable terms.
4.26 INVESTMENT IN PURCHASER SHARES.
(a) Seller will hold the Purchaser Shares issued to it
pursuant to this Agreement for investment and not with a view to,
or for resale in connection with, any distribution thereof within
the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). Seller does not have any present intention of
selling, offering to sell or otherwise disposing of or
distributing the Purchaser Shares issued to it pursuant to this
Agreement.
(b) Seller acknowledges that Purchaser has disclosed
that the Purchaser Shares to be issued to Seller pursuant to this
Agreement have not been registered under the Securities Act and,
therefore, cannot be resold unless they are registered under the
Securities Act or unless an exemption from registration is
available.
(c) Seller is sophisticated in financial matters and
is able to evaluate the risks and benefits of the investment in
the Purchaser Shares.
(d) Seller has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the
acquisition of the Purchaser Shares and has had full access to
such other information concerning the Purchaser as Seller has
requested.
(e) Seller is able to bear the economic risk of its
investment in the Purchaser Shares for an indefinite period of
time, recognizing that the Purchaser Shares have not been
registered under the Securities Act and, therefore, cannot be
sold unless subsequently registered under the Securities Act or
an exemption from such registration is available.
(f) Seller acknowledges that until such time as the
Purchaser Shares have been registered, or are otherwise eligible,
for resale in accordance with the Securities Act, each
certificate representing the Purchaser Shares shall be endorsed
with the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS, AND MAY
NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE FIRST BEEN
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE AND THE CORPORATION SHALL
HAVE RECEIVED, AT THE EXPENSE OF THE HOLDER, EVIDENCE
OF SUCH EXEMPTION REASONABLY SATISFACTORY TO THE
CORPORATION (WHICH MAY INCLUDE, AMONG OTHER THINGS, AN
OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION)."
4.27 INVESTMENTS IN PURCHASER. Except as set forth
in Section 4.27 of the Radiocoms Disclosure Letter or in Schedule
13D filings under the Exchange Act by Securicor plc, or as
contemplated by this Agreement, neither Securicor plc nor any of
its Affiliates has, or has had within the preceding twelve
months, any direct or indirect beneficial interest (including,
without limitation, any right to acquire any interest) in the
capital stock of Purchaser.
4.28 ACCOUNTS RECEIVABLE. Each of the accounts
receivable recorded on the books of Radiocoms and any of its
Subsidiaries or Relevant Affiliates related to the Business is a
bona fide account receivable which has arisen in the ordinary
course of business. Except as set forth in Section 4.28 of the
Radiocoms Disclosure Letter, the reserves for such accounts
receivable were calculated in a manner consistent with past
practices of Radiocoms and its Subsidiaries and Relevant
Affiliates. To the knowledge of Seller, such accounts
receivable, in the aggregate, (a) are collectible, net of
reserves with respect thereto, within the greater of 120 days and
the date when they are due in accordance with their terms or (b)
are adequately secured.
4.29 ACCOUNTS PAYABLE. Each of the accounts payable
recorded on the books of Radiocoms and each of its Subsidiaries
or Relevant Affiliates that is related to the Business is valid
and represents obligations in respect of good or services related
to the Business which have been received by Radiocoms or one of
its Subsidiaries or Relevant Affiliates, respectively and were
priced no higher than market value.
4.30 INVENTORY. All inventory of the Business
recorded in the books of Radiocoms and its Subsidiaries or
Relevant Affiliates is carried at the lower of cost or market
value, and, to the knowledge of Seller, except as set forth in
Section 4.30 of the Radiocoms Disclosure Letter, consists of a
quality and quantity usable and saleable in the ordinary course
of the Business. To the knowledge of Seller, no material part of
such inventories has been priced in excess of its ultimate net
expected realizable value and the present quantities of
inventories of the Business are reasonable and warranted in the
present circumstances of the Business. All of the inventory of
the Business is located on Radiocoms or its Subsidiaries'
properties.
4.31 PRODUCTS. Section 4.31 of the Radiocoms
Disclosure Letter sets forth all generic products and lines of
products sold or distributed by the Business or by Radiocoms
and/or its Subsidiaries, and Seller has made available to
Purchaser all material information with respect to the brand
names, technical specifications, origin, approval numbers and
prices of such products and all information usually supplied to
dealers or customers. Radiocoms and/or its Subsidiaries have all
necessary rights and authority to sell and distribute such
products as presently sold or distributed.
4.32 NO MISREPRESENTATION. No representation or
warranty of Seller contained in this Agreement or in the
Radiocoms Disclosure Letter or in any certificate or other
instrument furnished by Seller to the Purchaser pursuant to the
terms hereof contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
contained herein or therein not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller
that:
5.1 ORGANIZATION AND GOOD STANDING. Purchaser is a
corporation duly organized, validly existing and in good standing
under the Laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as now conducted.
Purchaser is duly qualified or authorized to do business as a
foreign corporation and is in good standing under the Laws of
each jurisdiction in which it owns or leases real property and
each other jurisdiction in which the conduct of its business or
the ownership of its properties requires such qualification or
authorization, except where the failure to be so qualified or
authorized could not reasonably be expected to have a Material
Adverse Effect on Purchaser and its Subsidiaries, taken as a
whole. Purchaser is not subject to any agreement, commitment or
understanding which restricts or may restrict the conduct of its
business in any jurisdiction or location in any material respect.
Copies of the Certificate of Incorporation and By-Laws (together
with all amendments thereto) of Purchaser have heretofore been
provided or have been made available to the Seller and such
copies are true, correct and complete copies of such instruments.
5.2 AUTHORIZATION OF AGREEMENTS.
(a) Purchaser has all requisite power, authority and
legal capacity to execute and deliver this Agreement, each other
agreement, document, instrument or certificate contemplated by
this Agreement or to be executed by Purchaser in connection with
the consummation of the transactions contemplated by this
Agreement (together with this Agreement, the "Purchaser
Documents") and each of the Other Transaction Documents, and to
consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement, the Midland Agreement,
each of the Purchaser Documents and each of the Other Transaction
Documents has been duly and validly ratified and/or authorized by
the Board of Directors of Purchaser, and (assuming the accuracy
of Seller's representation in Section 4.27) no other corporate
proceedings on the part of Purchaser will be necessary to
authorize this Agreement, the issuance of the Purchaser Shares,
or the other transactions contemplated hereby or the Other
Transactions, except for the stockholder approval referred to in
Section 5.2(b). Assuming the due authorization, execution and
delivery by the other parties hereto and thereto, this Agreement
and the Midland Agreement will constitute, and each of the
Purchaser Documents and the Other Transaction Documents to which
Purchaser is a party, when executed and delivered will
constitute, legal, valid and binding obligations of Purchaser,
enforceable against Purchaser in accordance with their respective
terms, subject to the Bankruptcy Exception.
(b) Assuming the accuracy of Seller's representation
in Section 4.27, the affirmative vote of the holders of a
majority of the outstanding shares of Purchaser Common Stock is
the only vote of the holders of any class or series of
Purchaser's capital stock (under applicable Law or otherwise)
necessary to approve this Agreement, the issuance of the
Purchaser Shares, the other transactions contemplated hereby or
the Other Transactions.
5.3 CAPITALIZATION.
(a) The authorized capital stock of Purchaser consists
of 20,000,000 shares of Purchaser Common Stock. As of the date
hereof, there are 11,125,278 shares of the Purchaser Common Stock
issued and outstanding and 465,582 shares of the Purchaser Common
Stock are held by Purchaser as treasury stock. All of the issued
and outstanding shares of Common Stock were duly authorized for
issuance and are validly issued, fully paid and non-assessable.
(b) Except as set forth in Section 5.3 of the
disclosure letter delivered by Purchaser to Seller on the date
hereof (the "Purchaser Disclosure Letter") and except for matters
arising after the date hereof as permitted in accordance with
Section 6.2, there is no existing option, warrant, call, right,
commitment or other agreement of any character to which the
Purchaser is a party requiring, and there are no securities of
Purchaser outstanding which upon conversion or exchange would
require, the issuance, sale or transfer of any additional shares
of capital stock or other equity securities of Purchaser or other
securities convertible into, exchangeable for or evidencing the
right to subscribe for or purchase shares of capital stock or
other equity securities of Purchaser. Purchaser is not a party
to any voting trust or other voting agreement with respect to any
of the shares of the Purchaser Common Stock or to any agreement
relating to the issuance, sale, redemption, transfer or other
disposition of the capital stock of Purchaser, except for matters
arising after the date hereof as permitted by Section 6.2.
5.4 SUBSIDIARIES.
(a) Set forth in Section 5.4 of the Purchaser
Disclosure Letter is the name of each of the Subsidiaries of
Purchaser and, with respect to each Subsidiary, the jurisdiction
in which it is incorporated, the number of shares of its
authorized capital stock, the number and class of shares thereof
duly issued and outstanding, the names of all stockholders and
the numbers of shares of stock owned by each stockholder. Each
such stockholder is the record and beneficial owner of the shares
set forth opposite its name in Section 5.4 of the Purchaser
Disclosure Letter. The outstanding shares of capital stock of
each Subsidiary of Purchaser have been duly authorized, validly
issued and fully paid and are non-assessable.
(b) Except as set forth in Section 5.4 of the
Purchaser Disclosure Letter, all such shares are owned by such
stockholders free and clear of all Liens. No shares of capital
stock are held by any Subsidiary of Purchaser as treasury stock.
(c) None of the Subsidiaries of Purchaser has
outstanding or authorized subscriptions, options, warrants,
calls, rights, commitments or any other agreements of any
character obligating any of them to issue, sell or transfer any
shares of its capital stock or other equity interests or any
securities convertible into or evidencing the right to subscribe
for or purchase any shares of such stock or other equity
interests with any Person, and there are no agreements or
understandings with respect to the voting, sale or transfer of
shares of the capital stock of any Subsidiary of Purchaser to
which Purchaser or Subsidiary thereof is a party.
(d) Each Subsidiary of Purchaser is a corporation duly
organized, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation. Each Subsidiary of
Purchaser has full corporate power and authority to own, lease
and operate its properties and to carry on its business as it is
now being conducted. Each Subsidiary of Purchaser is duly
qualified and in good standing as a foreign corporation under the
Laws of each jurisdiction in which the conduct of its business or
the ownership of its assets requires such qualification, except
where the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect on Purchaser and its
Subsidiaries, taken as a whole. No Subsidiary of Purchaser is
subject to any agreement, commitment or understanding which
restricts or may restrict the conduct of its business in any
jurisdiction or location in any material respect. Copies of the
Certificate or Articles of Incorporation and By-Laws (together
with all amendments thereto) of each Subsidiary of Purchaser have
heretofore been provided to Seller and such copies are true,
correct and complete copies of such instruments.
(e) Except as set forth in Section 5.4 of the
Purchaser Disclosure Letter or as permitted by Section 6.2,
neither Purchaser nor any of its Subsidiaries owns, beneficially
or of record, any shares of capital stock or any other security
of any corporation or other legal entity, or has any option or
obligation to acquire any such stock or other security, or has
any investments in securities or owns, directly or indirectly,
any interest in any partnership, joint venture or other business
enterprise.
5.5 CORPORATE RECORDS. The minute books of Purchaser
and each of its Subsidiaries previously made available to Seller
contain complete and accurate records, in all material respects,
of all meetings and accurately reflect, in all material respects,
all other corporate action of the stockholders and board of
directors (including committees thereof) of Purchaser and each of
its Subsidiaries.
5.6 CONFLICTS; CONSENTS OF THIRD PARTIES.
(a) Except as set forth in Section 5.6 of the
Purchaser Disclosure Letter, none of the execution and delivery
by Purchaser of this Agreement and the Purchaser Documents, the
consummation of the transactions contemplated hereby or thereby,
or compliance by Purchaser with any of the provisions hereof or
thereof will (i) conflict with, or result in the breach of, any
provision of the certificate of incorporation or by-laws or
comparable organizational documents of Purchaser or any of its
Subsidiaries; (ii) conflict with, violate, result in the breach
or termination of, or constitute a default under any note, bond,
mortgage, indenture, license, agreement or other instrument or
obligation to which Purchaser or any of its Subsidiaries is a
party or by which Purchaser or any of its Subsidiaries or any of
its properties or assets is bound; (iii) violate any statute,
rule, regulation, order or decree of any Governmental Body by
which Purchaser or any of its Subsidiaries is bound; or (iv)
result in the creation of any Lien upon the properties or assets
of Purchaser and its Subsidiaries except, in case of clauses
(ii), (iii) and (iv), for such violations, breaches or defaults
as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Purchaser and its
Subsidiaries, taken as a whole, or materially delay the
consummation of the transactions contemplated hereby.
(b) Except as set forth in Section 5.6(b) of the
Purchaser Disclosure Letter, no consent, waiver, approval, Order,
Permit or authorization of, or declaration or filing with, or
notification to, any Person or Governmental Body is required on
the part of the Purchaser or any of its Subsidiaries in
connection with the execution and delivery of this Agreement or
the Purchaser Documents, or the compliance by the Purchaser with
any of the provisions hereof or thereof, except for compliance
with the applicable requirements of the HSR Act and except where
the failure to obtain such consent, waiver, approval, Order,
Permit or authorization, or to make such declaration or filing,
could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Purchaser and its
Subsidiaries, taken as a whole, or materially delay the
consummation of the transactions contemplated hereby.
5.7 ISSUANCE OF PURCHASER SHARES.
(a) Except as provided in Section 5.2(b), the issuance
of the Purchaser Shares to Seller in accordance with the terms of
this Agreement has been duly authorized by all necessary action
on the part of Purchaser. The Purchaser Shares, upon issuance to
Seller in accordance with the terms of this Agreement, will be
duly authorized, validly issued, fully paid and non-assessable
and free of preemptive rights, and will be registered on the
stock certificate books and stock transfer ledgers of Purchaser
solely in the name of Seller. The Purchaser Shares, upon
issuance to Seller in accordance with the terms of this
Agreement, will be approved for quotation on the National
Association of Securities Dealers Automatic Quotation System
("NASDAQ") Small Cap Market (the "Small Cap Market"). Seller
will receive good and marketable title to the Purchaser Shares as
of the Closing Date, free and clear of any and all Liens.
(b) Based upon Seller's representation and warranty in
Section 4.26 hereof, the issuance of the Purchaser Shares to
Seller in accordance with the terms of this Agreement will be
exempt from (i) the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, and (ii) the
registration and/or qualification provisions of all applicable
state securities or "blue sky" Laws.
5.8 FINANCIAL STATEMENTS. Purchaser has delivered
to Seller copies of (a) the audited consolidated balance sheets
of Purchaser and its Subsidiaries as at December 31, 1995, 1994
and 1993 and the related audited consolidated statements of
operations and of cash flows of Purchaser and its Subsidiaries
for the years then ended and (b) the unaudited consolidated
balance sheet of Purchaser and its Subsidiaries as at March 31,
1996 and the related consolidated statements of operations and
cash flows of Purchaser and its Subsidiaries for the three-month
period then ended (such audited and unaudited statements,
including the related notes and schedules thereto, are referred
to herein as the "Purchaser Financial Statements"). Each of the
Purchaser Financial Statements (i) is complete and correct in all
material respects, (ii) has been prepared in accordance with GAAP
(subject to normal year-end adjustments and the absence of
footnotes in the case of the unaudited statements), in accordance
with the books and records of Purchaser and its Subsidiaries and
in conformity with the practices consistently applied by
Purchaser without modification of the accounting principles used
in the preparation thereof, (iii) reflects all transactions
relating to the business or operations of Purchaser and its
Subsidiaries, including, without limitation, any transactions
with Xxxxxxxx or its Affiliates, and (iv) presents fairly the
financial position, results of operations and cash flows of
Purchaser and its Subsidiaries as at the dates and for the
periods indicated.
For the purposes hereof, the audited balance sheet of
Purchaser and its Subsidiaries as at December 31, 1995 is
referred to as the "Purchaser Balance Sheet" and December 31,
1995 is referred to as the "Purchaser Balance Sheet Date."
5.9 NO UNDISCLOSED LIABILITIES. Purchaser and its
Subsidiaries have no indebtedness, obligations or liabilities of
any kind (whether accrued, absolute, contingent or otherwise, and
whether due or to become due) (a) that would be required by GAAP
to be reflected in, reserved against or otherwise described in
the consolidated balance sheet of Purchaser and its Subsidiaries
(including the notes thereto) or (b) which could reasonably be
expected to have a Material Adverse Effect on Purchaser and its
Subsidiaries, taken as a whole, except (i) as set forth on the
Purchaser Balance Sheet or in the notes thereto and (ii) for
liabilities and obligations incurred in the ordinary course of
business consistent with past practice since the Purchaser
Balance Sheet Date.
5.10 PERIODIC SEC FILINGS. Purchaser has filed all
required forms, reports and documents with the Securities and
Exchange Commission (the "SEC") since January 1, 1993, each of
which has complied in all material respects with all applicable
requirements of the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, each as in effect on
the dates such forms, reports and documents were filed.
Purchaser has heretofore delivered or made available to Seller
true and complete copies of all reports (including Current
Reports on Form 8-K) and proxy statements filed by Purchaser
with, and all registration statements of Purchaser declared
effective by, the SEC since January 1, 1993 (such public filings
with the SEC, as the same have been amended, are hereinafter
referred to as the "SEC Documents"). None of such forms, reports
or documents, including, without limitation, any financial
statements or schedules included or incorporated by reference
therein or any SEC Documents, contained, when filed, any untrue
statement of a material fact or omitted to state a material fact
required to be stated or incorporated by reference therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
The consolidated financial statements of Purchaser included in
the SEC Documents complied as to form in all material respects
with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto and fairly
present, in conformity with GAAP (except as may be indicated in
the notes thereto), the consolidated financial position of
Purchaser and its Subsidiaries as of the dates thereof and their
consolidated results of operations and changes in financial
position for the periods then ended (subject, in the case of the
unaudited interim financial statements, to normal year-end
adjustments). Since December 31, 1995, there has not been any
change, or any application or request for any change, by
Purchaser or any of its Subsidiaries in accounting principles,
methods or policies for financial accounting or tax purposes
(subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments).
5.11 ABSENCE OF CERTAIN DEVELOPMENTS. Except as
expressly contemplated by this Agreement or as set forth in
Section 5.11 of the Purchaser Disclosure Letter, since the
Purchaser Balance Sheet Date:
(a) there has not been any Material Adverse
Change nor has there occurred any event which is reasonably
likely to result in a Material Adverse Change with respect
to Purchaser and its Subsidiaries, taken as a whole;
(b) there has not been any damage, destruction or
loss, whether or not covered by insurance, with respect to
the property and assets of Purchaser or any of its
Subsidiaries having a replacement cost of more than $20,000
for any single loss or $20,000 for all such losses;
(c) there has not been any declaration, setting
aside or payment of any dividend or other distribution in
respect of any shares of capital stock of Purchaser or any
repurchase, redemption or other acquisition by Purchaser or
any of its Subsidiaries of any outstanding shares of capital
stock or other securities of, or other ownership interest
in, Purchaser or any of its Subsidiaries, except for
dividends to Purchaser by any of its wholly owned
Subsidiaries;
(d) neither Purchaser nor any of its Subsidiaries
has issued any equity securities or any securities
convertible into or exchangeable for equity securities of
Purchaser or any of its Subsidiaries;
(e) neither Purchaser nor any of its Subsidiaries
has awarded or paid any bonuses to employees of Purchaser or
any of its Subsidiaries with respect to the fiscal year
ended December 31, 1995, except to the extent accrued on the
Purchaser Balance Sheet, or entered into any employment,
deferred compensation, severance or similar agreement (or
amended any such agreement) or agreed to increase the
compensation payable or to become payable by it to any of
its directors, officers, employees, agents or representa
tives or agreed to increase the coverage or benefits
available under any severance pay, termination pay, vacation
pay, company awards, salary continuation for disability,
sick leave, deferred compensation, bonus or other incentive
compensation, insurance, pension or other employee benefit
plan, payment or arrangement made to, for or with such
directors, officers, employees, agents or representatives
(other than normal increases in the ordinary course of
business consistent with past practice and that in the
aggregate have not resulted in a material increase in the
benefits or compensation expense of Purchaser and its
Subsidiaries, taken as a whole);
(f) there has not been any change by Purchaser or
any of its Subsidiaries in accounting or Tax reporting
principles, methods or policies except as may be required by
a change in national accounting standards;
(g) neither Purchaser nor any of its Subsidiaries
has entered into any transaction or Contract or conducted
its business other than in the ordinary course consistent
with past practice;
(h) neither Purchaser nor any of its Subsidiaries
has failed to promptly pay and discharge current liabilities
except where disputed in good faith by appropriate
proceedings;
(i) neither Purchaser nor any of its Subsidiaries
has made any loans, advances or capital contributions to, or
investments in, any Person or paid any fees or expenses to
the Purchaser or any Affiliate or holder of 15% or more of
the issued and outstanding capital stock of Purchaser;
(j) neither Purchaser nor any of its Subsidiaries
has mortgaged, pledged or subjected to any Lien any assets,
or acquired any assets or sold, assigned, transferred,
conveyed, leased or otherwise disposed of any assets of
Purchaser or its Subsidiaries, except for assets acquired or
sold, assigned, transferred, conveyed, leased or otherwise
disposed of in the ordinary course of business consistent
with past practice;
(k) neither Purchaser nor any of its Subsidiaries
has discharged or satisfied any Lien, or paid any obligation
or liability (fixed or contingent), except in the ordinary
course of business consistent with past practice and which,
in the aggregate, would not be material to Purchaser and its
Subsidiaries, taken as a whole;
(l) neither Purchaser nor any of its Subsidiaries
has canceled or compromised any debt or claim or amended,
canceled, terminated, relinquished, waived or released any
Contract or right except in the ordinary course of business
consistent with past practice and which, in the aggregate,
would not be material to Purchaser and its Subsidiaries,
taken as a whole;
(m) neither Purchaser nor any of its Subsidiaries
has instituted or settled any material Legal Proceeding;
(n) neither Purchaser nor any of its Subsidiaries
has suffered any Extraordinary Loss or Extraordinary Losses;
(o) neither Purchaser nor any of its Subsidiaries
has transferred or granted any material rights under any
concessions, leases, licenses, agreements, patents,
inventions, trademarks, trade names, servicemarks,
brandmarks, brand names, copyrights or the like, or with
respect to any know-how;
(p) neither Purchaser nor any of its Subsidiaries
has (A) received any notice or citation for any violation
of, nor, to the best knowledge of Purchaser, has any
complaint been filed with the FCC alleging a violation of,
any rule, regulation or policy of the FCC by the Purchaser
or any of its Subsidiaries or the FCC licensee with respect
to any System (as defined in Section 5.27), or (B) allowed
any license issued by the FCC to Purchaser or any of its
Subsidiaries or any FCC licensee with respect to any System
(individually, a "Purchaser FCC License" and, collectively,
the "Purchaser FCC Licenses") to lapse or be impaired in any
manner, or operated any of its businesses in any manner not
in compliance with its FCC authorization and all applicable
FCC rules, regulations and policies; and
(q) neither Purchaser nor any of its Subsidiaries
has agreed to do anything set forth in this Section 5.11.
5.12 TAXES.
(a) Except as set forth in Section 5.12 of the
Purchaser Disclosure Letter, (A) all material Tax Returns
required to be filed by or on behalf of Purchaser and each of its
Subsidiaries, or the Affiliated Group(s) of which any of them is
or was a member have been duly and timely filed with the
appropriate taxing authorities in all jurisdictions in which such
Tax Returns are required to be filed (after giving effect to any
valid extensions of time in which to make such filings), and all
such Tax Returns were true, complete and correct in all material
respects; (B) all Taxes payable by or on behalf of Purchaser and
its Subsidiaries, either directly as part of an Affiliated Group
Tax Return or otherwise, have been fully and timely paid, except
to the extent adequately reserved therefor in accordance with
GAAP on the Purchaser Balance Sheet, and adequate reserves or
accruals for Taxes have been provided in the Purchaser Balance
Sheet with respect to any period through the date thereof for
which Tax Returns have not yet been filed or for which Taxes are
not yet due and owing; and (C) no agreement, waiver or other
document or arrangement extending or having the effect of
extending the period for assessment or collection of Taxes
(including, but not limited to, any applicable statute of
limitation) has been executed or filed with any taxing authority
by or on behalf of Purchaser or any of its Subsidiaries, or any
Affiliated Group(s) of which any of them is or was a member.
(b) Purchaser and each of its Subsidiaries has
complied in all material respects with all applicable Laws, rules
and regulations relating to the payment and withholding of Taxes
and has duly and timely withheld from employee salaries, wages
and other compensation and has paid over to the appropriate
taxing authorities all amounts required to be so withheld and
paid over for all periods under all applicable Laws.
(c) Seller has received complete copies of (A) all
material income or franchise Tax Returns of Purchaser and each of
its Subsidiaries relating to the taxable periods since January 1,
1994 and (B) any audit report issued within the last three years
relating to any material Taxes due from or with respect to
Purchaser and each of its Subsidiaries with respect to its
income, assets or operations.
(d) Except as set forth in Section 5.12 of the
Purchaser Disclosure Letter, no claim has been made by a taxing
authority in a jurisdiction where Purchaser or any of its
Subsidiaries does not file an income or franchise Tax Return such
that Purchaser or such Subsidiary is or may be subject to
taxation by that jurisdiction.
(e) Except as set forth in Section 5.12 of the
Purchaser Disclosure Letter, all deficiencies asserted or
assessments made as a result of any examinations by any taxing
authority of the Tax Returns of or covering or including
Purchaser and/or its Subsidiaries have been fully paid, and there
are no other audits or investigations by any taxing authority in
progress, nor has Purchaser received any written notice from any
taxing authority that it intends to conduct such an audit or
investigation. No requests for a ruling or a determination
letter are pending with any taxing authority. No issue has been
raised in writing by any taxing authority in any current or prior
examination which, by application of the same or similar
principles, could reasonably be expected to result in a proposed
deficiency against Purchaser or any Subsidiary for any subsequent
taxable period that could be material.
(f) Except as set forth in Section 5.12 of the
Purchaser Disclosure Letter, neither Purchaser, any Subsidiary
nor any other Person on behalf of Purchaser or any Subsidiary has
(A) filed a consent pursuant to Section 341(f) of the Code or
agreed to have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset (as such term is defined in
Section 341(f)(4) of the Code) owned by Purchaser or any
Subsidiary, (B) agreed to or is required to make any adjustments
pursuant to Section 481(a) of the Code or any similar provision
of state, local or foreign law by reason of a change in account
ing method initiated by the Purchaser or any Subsidiary or has
any knowledge that the Internal Revenue Service has proposed any
such adjustment or change in accounting method, or has any
application pending with any taxing authority requesting
permission for any changes in accounting methods that relate to
the business or operations of Purchaser or any Subsidiary, or (C)
executed or entered into a closing agreement pursuant to Section
7121 of the Code or any predecessor provision thereof or any
similar provision of state, local or foreign law with respect to
Purchaser or any of its Subsidiaries.
(g) Except as set forth in Section 5.12 of the
Purchaser Disclosure Letter, no property owned by Purchaser or
any Subsidiary is (i) property required to be treated as being
owned by another Person pursuant to the provisions of Section
168(f)(8) of the Internal Revenue Code of 1954, as amended and in
effect immediately prior to the enactment of the Tax Reform Act
of 1986, (ii) constitutes "tax-exempt use property" within the
meaning of Section 168(h)(1) of the Code or (iii) is "tax-exempt
bond financed property" within the meaning of Section 168(g) of
the Code.
(h) Neither Purchaser (except with one or more
Subsidiaries) nor any Subsidiary (except with Purchaser) is a
party to any tax sharing or similar agreement or arrangement
(whether or not written) pursuant to which it will have any
obligation to make any payments after the Closing.
(i) There is no contract, agreement, plan or
arrangement covering any person that, individually or
collectively, could give rise to the payment of any amount that
would not be deductible by the Purchaser, the Affiliates or their
respective affiliates by reason of Section 280G of the Code, or
would constitute compensation in excess of the limitation set
forth in Section 162(m) of the Code.
(j) There are no liens as a result of any unpaid Taxes
upon any of the assets of Purchaser or any Subsidiary thereof.
(k) Except as set forth in Section 5.12 of the
Purchaser Disclosure Letter, Purchaser has no elections in effect
for federal income tax purposes under Sections 108, 168, 338,
441, 463, 472, 1017, 1033 or 4977 of the Code.
(l) Except as set forth in Section 5.12 of the
Purchaser Disclosure Letter, none of the members of Purchaser's
Affiliated Group has any net operating loss carryovers.
5.13 REAL PROPERTY.
(a) Section 5.13(a) of the Purchaser Disclosure Letter
describes (i) all real property and all interests therein owned
of record or beneficially by Purchaser (other than site leases
for use with FCC Licenses) or any of its Subsidiaries (the
"Purchaser Real Properties"), (ii) all leases of real property to
which Purchaser or any of its Subsidiaries is a party or by which
Purchaser or any of its Subsidiaries is bound (other than site
leases for use with FCC Licenses) and (iii) the purposes for
which such properties are used. True, correct and complete
copies of all documents referred to in Section 5.13(a) of the
Purchaser Disclosure Letter have been delivered or made available
to Seller.
(b) Except as set forth in Section 5.13(b) of the
Purchaser Disclosure Letter:
(i) Purchaser or one of its Subsidiaries has (A)
good and valid title to the Purchaser Real Properties, free
and clear of all Liens except for imperfections of title, if
any, that do not materially detract from the value of the
property subject thereto, or materially interfere with the
manner in which such property is currently being used or is
proposed to be used by Purchaser or any of its Subsidiaries
or materially impair the operations of Purchaser or any of
its Subsidiaries and which do not secure obligations for
borrowed money or the deferred portion of the purchase price
of acquired property (collectively, "Purchaser Permitted
Encumbrances"), and (B) all material easements and rights,
including but not limited to easements for power lines,
water lines, sewers, roadways and other means of ingress and
egress, necessary to conduct the business conducted on the
Purchaser Real Properties; and none of the Liens set forth
in Section 5.13(b) of the Purchaser Disclosure Letter has
had or could reasonably be expected to have a Material
Adverse Effect on Purchaser and its Subsidiaries, taken as a
whole;
(ii) Neither the whole nor any portion of any of
the Purchaser Real Properties is subject to any pending
condemnation or similar proceeding by any governmental
authority, and Purchaser does not know that any such
condemnation or taking is threatened or contemplated;
(iii) Neither Purchaser nor any of its
Subsidiaries is, or as of the Closing Date will be, in
violation of any applicable Law or Order relating to the
Purchaser Real Properties, except (A) for Environmental Laws
(which are addressed in Section 5.21), (B) for compliance
with the rules and regulations of the FCC (which are
addressed in Section 5.27) and (C) where the failure to be
in compliance with such Law or Order could not reasonably be
expected to have a Material Adverse Effect on Purchaser and
its Subsidiaries, taken as a whole, and no notice from any
Governmental Body has been served upon Purchaser or any of
its Subsidiaries or Affiliates claiming any material
violation thereof or calling attention to the need for any
material work, repairs, construction, alterations,
installations on or in connection with said owned or leased
real properties used by Purchaser or its Subsidiaries;
(iv) Purchaser or one of its Subsidiaries has
obtained all permits, licenses or certificates of occupancy
pertaining to the ownership or operation of any of the owned
or leased real properties of Purchaser or any of its
Subsidiaries (including, without limitation, the Purchaser
Real Properties) that are required to be obtained from any
Governmental Body by Purchaser or any of its Subsidiaries,
except where the failure to obtain such permits, licenses or
certificates of occupancy could not reasonably be expected
to have a Material Adverse Effect on Purchaser and its
Subsidiaries taken as a whole;
(v) Each of the leases of real property referred
to in Section 5.13(a) above is valid and enforceable in
accordance with its terms, subject to the Bankruptcy
Exception, and there is not under any such lease any
existing breach, default, event of default or event which,
with notice and/or lapse of time, would constitute a breach,
default or event of default (A) by Purchaser or any of its
Subsidiaries or (B) to the knowledge of Purchaser, by any
other party to any such lease, except where such breach,
default or event of default could not reasonably be expected
to have a Material Adverse Effect on Purchaser and its Sub
sidiaries, taken as a whole;
(vi) No previous or current party to any such
lease has given notice of or made a claim with respect to
any breach or default, the consequences of which,
individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect on Purchaser and
its Subsidiaries, taken as a whole;
(vii) None of the rights of Purchaser or any of
its Subsidiaries under any of such leases will be subject to
termination or modification as the result of the
consummation of the transactions contemplated by this
Agreement; and
(viii) No consent or approval of any third party
is required under any lease referred to in Section 5.13(a)
to the consummation of the transactions contemplated hereby.
5.14 TANGIBLE PERSONAL PROPERTY.
(a) Section 5.14(a) of the Purchaser Disclosure Letter
sets forth all leases of personal property, other than leases for
motor vehicles, involving annual payments in excess of $20,000 to
which Purchaser or any of its Subsidiaries is a party or by which
Purchaser or any of its Subsidiaries is bound. True, correct and
complete copies of all documents referred to in Section 5.14(a)
of the Purchaser Disclosure Letter have been delivered or made
available to Seller.
(b) Except as set forth in Section 5.14(b) of the
Purchaser Disclosure Letter:
(i) Each of the leases of personal property
referred to in Section 5.14(a) is valid and enforceable in
accordance with its terms, subject to the Bankruptcy
Exception, and there is not, under any such lease, any
existing breach, default, or event of default or event
which, with notice and/or lapse of time, would constitute a
breach, default or event of default (A) by Purchaser or any
of its Subsidiaries or, (B) to the knowledge of Purchaser,
by any other party to any such lease, except where such
breach, default or event of default could not reasonably be
expected to have a Material Adverse Effect on Purchaser and
its Subsidiaries, taken as a whole;
(ii) No previous or current party to any such
lease has given notice of or made a claim with respect to
any breach or default thereunder, the consequences of which,
individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect on Purchaser and
its Subsidiaries, taken as a whole;
(iii) None of the rights of any of Purchaser or
any of its Subsidiaries under any of such leases will be
subject to termination or modification as the result of the
consummation of the transactions contemplated by this
Agreement;
(iv) No consent or approval of any third party is
required under any lease referred to in Section 5.14(a) to
the consummation of the transactions contemplated hereby;
(v) Purchaser or one of its Subsidiaries has good
title to all material items of tangible personal property
reflected on the Purchaser Balance Sheet (except as sold or
disposed of subsequent to the date thereof in the ordinary
course of business consistent with past practices), free and
clear of Liens; and
(vi) All of the items of tangible personal
property not owned by Purchaser or one of its Subsidiaries
but used in the business of Purchaser and which,
individually or in the aggregate, are material to the
conduct of such business, are in such condition that upon
the return of such properties to their owners in the current
condition of such properties, normal wear and tear excepted,
at the end of the relevant lease terms or as otherwise
contemplated by the applicable agreements with owners
thereof, the obligations of Purchaser or its Subsidiaries
(as applicable) to such owners will be discharged in all
material respects.
5.15 INTANGIBLE PROPERTY. Section 5.15 of the
Purchaser Disclosure Letter sets forth a list of each letters
patent, material trademark, material trade name, registered
copyright, material service xxxx, and any other similar,
registered property or trade right owned by Purchaser or any of
its Subsidiaries, or used by Purchaser or any of its Subsidiaries
in its business (collectively, together with all know-how,
processes, formulae, trade secrets, inventions, designs,
industrial models, computer programs and other technical data or
drawings, the "Purchaser Intellectual Property"), and sets forth
all applications and licenses for any of the foregoing, and all
licenses or similar agreements or arrangements relating to the
operation of the business of Purchaser or any of its Subsidiaries
or to which Purchaser and its Subsidiaries is a party or subject
(property of the foregoing type being hereinafter collectively
referred to as the "Purchaser IP Licenses"), including all
licenses or similar agreements or arrangements by which Purchaser
or its Subsidiaries are authorized to use intellectual property
of a third party or have granted a third party rights to use
intellectual property related to the business of Purchaser or any
of its Subsidiaries. Except as indicated in Section 5.15 of the
Purchaser Disclosure Letter:
(a) Purchaser or one of its Subsidiaries owns all
title and interest in, and, to the knowledge of Purchaser, right
and authority to use, in connection with the conduct of the
business of Purchaser and its Subsidiaries as such business is
presently conducted, all of the Purchaser Intellectual Property
and Purchaser IP Licenses listed in Section 5.15 of the Purchaser
Disclosure Letter free and clear of all Liens. The Purchaser
Intellectual Property and Purchaser IP Licenses, to the knowledge
of Purchaser, constitute all of the intellectual property that
Purchaser needs to conduct its (and its Subsidiaries) business as
currently conducted. The operation of the business of Purchaser
and its Subsidiaries does not, to the knowledge of Purchaser,
infringe upon, misappropriate or violate any patent, trade name,
trademark, service xxxx, trade secret, brand xxxx and brand name
and other property or trade right of any other person, firm or
corporation, and none of Purchaser or any of its Subsidiaries has
received any notice or has knowledge pertaining to any actual or
threatened, infringement, misappropriation or violation of the
items of intellectual property listed in the preceding sentence;
(b) There are no asserted or, to the knowledge of
Purchaser, threatened governmental, judicial or adversarial
proceedings, hearings, arbitrations, disputes or claims with
respect to any of the Purchaser Intellectual Property or
Purchaser IP Licenses listed in Section 5.15 of the Purchaser
Disclosure Letter;
(c) To the knowledge of Purchaser, no third party is
infringing or engaging in an unauthorized use of the Purchaser
Intellectual Property or Purchaser IP Licenses; and
(d) To the knowledge of Purchaser, neither Purchaser
nor any of its Subsidiaries or Affiliates has made any disclosure
to a third party that would materially impair the value of any
confidential Purchaser Intellectual Property or confidential
Purchaser IP Licenses, and Purchaser and its Affiliates have
treated such confidential information in a manner reasonably
designed to preserve its confidentiality.
5.16 MATERIAL CONTRACTS.
(a) Section 5.16 of the Purchaser Disclosure Letter
sets forth (i) each oral or written agreement, arrangement or
commitment of any nature to which Purchaser or any of its
Subsidiaries is a party or by which it is bound involving (A) a
commitment of more than $75,000, or (B) the purchase or sale of
any assets of Purchaser or its Subsidiaries having a book value
of more than $75,000 and (ii) all (A) loan or credit agreements,
indentures, guaranties, promissory notes, pledge agreements,
mortgages, security agreements or other instruments in respect of
borrowed funds, (B) distributorship, agency, representation,
dealer or similar agreements, (C) covenants not to compete or any
other agreements or understandings which would restrict the
operation of Purchaser's or any of its Subsidiaries' businesses
in any geographical area or to any person or class of persons, or
which in any way affects the price or other terms at which such
businesses or Purchaser or any of its Subsidiaries or any agent
or representative of such businesses or Purchaser or any of its
Subsidiaries may sell products or services, (D) contracts or
commitments for capital expenditures and (E) partnership or joint
venture agreements. Agreements, arrangements and commitments of
the types described in subsections (i) and (ii) above, other
than System management and option agreements, are hereinafter
collectively referred to as the "Purchaser Material Agreements."
(b) Each Purchaser Material Agreement is valid and
enforceable in accordance with its terms, subject to the
Bankruptcy Exception. Except as set forth in Section 5.16 of the
Purchaser Disclosure Letter, (i) neither Purchaser nor any of its
Subsidiaries nor, to the knowledge of Purchaser, any other party
thereto, is in breach of or in default under any Purchaser
Material Agreement, (ii) to the knowledge of Purchaser, there
has not occurred any event which, after the giving of notice or
the lapse of time or both, would constitute a default under, or
result in a breach of, any Purchaser Material Agreement, (iii) no
previous or current party to any Purchaser Material Agreement has
given notice of or made a claim, or, to the knowledge of
Purchaser, threatened to make a claim, with respect to any breach
or default thereunder, the consequences of which, in the case of
clauses (i), (ii) and (iii), individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect on
Purchaser and its Subsidiaries, taken as a whole, (iv) none of
the rights of Purchaser or any of its Subsidiaries under any of
the Purchaser Material Agreements will be subject to termination
or modification as a result of the consummation of the
transactions contemplated by this Agreement, and (v) no consent
or approval of any third party is required under any Purchaser
Material Agreement to the consummation of the transactions
contemplated hereby.
(c) Simultaneously with the execution of this
Agreement, Purchaser has delivered to Seller a true, complete and
correct copy of the Midland Agreement (including all exhibits and
schedules thereto) as in effect on the date hereof. The Midland
Agreement is valid and enforceable in accordance with its terms,
subject to the Bankruptcy Exception. Each of the representations
and warranties of Purchaser contained in the Midland Agreement,
and to Purchaser's knowledge, each of the representations and
warranties of Midland US contained therein, is true and correct
in all material respects and will be true and correct in all
material respects as of the Closing Date. (i) Neither Purchaser
nor, to the knowledge of Purchaser, Midland US, is in material
breach of or in material default under the Midland Agreement,
(ii) to the knowledge of Purchaser, there has not occurred any
event which, after the giving of notice or the lapse of time or
both, would constitute a material default under, or result in a
material breach of, the Midland Agreement, (iii) no party to the
Midland Agreement has given notice of or made a claim with
respect to any material breach or material default thereunder,
(iv) except as set forth in the Midland Agreement, none of the
rights of Purchaser under the Midland Agreement will be subject
to termination or modification as a result of the consummation of
the transactions contemplated by this Agreement, and (v) except
as set forth therein, no consent or approval of any third party
is required under the Midland Agreement to the consummation of
the transactions contemplated thereby or hereby.
5.17 EMPLOYEE BENEFITS.
(a) Section 5.17(a) of the Purchaser Disclosure Letter
sets forth a complete and correct list of (i) all "employee
benefit plans", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and
any other pension plans, employee benefit plans, programs or
arrangements, payroll practices (including, without limitation,
severance pay, vacation pay, company awards, consulting or other
compensation arrangements, salary continuation for disability,
sick leave, retirement, deferred compensation, bonus or other
incentive compensation, stock purchase, hospitalization, medical
insurance, life insurance and scholarship programs) maintained by
Purchaser or its Subsidiaries or to which Purchaser or any of its
Subsidiaries contributes or is obligated to contribute thereunder
with respect to employees of Purchaser or any of its Subsidiaries
(the "Purchaser Employee Benefit Plans") and (ii) all "employee
pension plans," as defined in Section 3(2) of ERISA, maintained
by Purchaser or its Subsidiaries or any trade or business
(whether or not incorporated) which are under control, or which
are treated as a single employer with Purchaser and any of its
Subsidiaries under Section 414(b), (c), (m) or (o) of the Code
("ERISA Affiliate") or to which Purchaser, any of its
Subsidiaries or any ERISA Affiliate contributed or is obligated
to contribute thereunder (the "Purchaser Pension Plans").
Section 5.17(a) of the Purchaser Disclosure Letter clearly
identifies, in separate categories, the Purchaser Employee
Benefit Plans or the Purchaser Pension Plans that are (i) subject
to Section 4063 and 4064 of ERISA ("Multiple Employer Plans"),
(ii) multiemployer plans (as defined in Section 4001(a)(3) of
ERISA) ("Multiemployer Plans") or (iii) "group health plans,"
within the meaning of Section 5000(b)(1) of the Code providing
continuing benefits after the termination of employment (other
than as required by Section 4980B of the Code or Part 6 of
Subtitle B of Title I of ERISA and at the former employee's or
his beneficiary's sole expense).
(b) None of Purchaser, any Subsidiary or any ERISA
Affiliate has withdrawn in a complete or partial withdrawal from
any Multiemployer Plan prior to the Closing Date, nor has any of
them incurred any liability due to the termination or
reorganization of a Multiemployer Plan; and Seller shall not have
(i) any obligation to make any contribution to any Multiemployer
Plan or (ii) any withdrawal liability from any such Multiemployer
Plan under Section 4201 of ERISA which it would not have had it
not received the Purchaser Shares from Purchaser at the Closing
in accordance with the terms of this Agreement.
(c) Each of the Purchaser Employee Benefit Plans and
Purchaser Pension Plans intended to qualify under Section 401 of
the Code ("Qualified Plans") so qualify and the trusts maintained
thereto are exempt from federal income taxation under Section 501
of the Code, and, except as disclosed in Section 5.17(b) of the
Purchaser Disclosure Letter, nothing has occurred with respect to
the operation of any such plan which could cause the loss of such
qualification or exemption or the imposition of any liability,
penalty or tax under ERISA or the Code.
(d) All contributions, including all employer
contributions and employee salary reduction contributions and
premiums required by Law or by the terms of any Purchaser
Employee Benefit Plan or Purchaser Pension Plan as of the Closing
Date, have been timely made (without regard to any waivers
granted with respect thereto) to any funds or trusts established
thereunder or in connection therewith, and no accumulated funding
deficiencies exist in any of the Purchaser Employee Benefit Plans
or Purchaser Pension Plans subject to Section 412 of the Code.
(e) The benefit liabilities, as defined in Section
4001(a)(16) of ERISA, of each of the Purchaser Employee Benefit
Plans and Purchaser Pension Plans subject to Title IV of ERISA
using the actuarial assumptions that would be used by the Pension
Benefit Guaranty Corporation (the "PBGC") in the event it
terminated each such plan do not exceed the fair market value of
the assets of each such plan. The liabilities of each Purchaser
Employee Benefit Plan or Purchaser Pension Plan that has been
terminated or otherwise wound up, have been fully discharged in
full compliance with applicable Law.
(f) There has been no "reportable event" as that term
is defined in Section 4043 of ERISA and the regulations
thereunder with respect to any of the Purchaser Employee Benefit
Plans or Purchaser Pension Plans subject to Title IV of ERISA
which would require the giving of notice or any event requiring
notice to be provided under Section 4041(c)(3)(C) or 4063(a) of
ERISA.
(g) There has been no violation of ERISA with respect
to the filing of applicable returns, reports, documents and
notices regarding any of the Purchaser Employee Benefit Plans or
Purchaser Pension Plans with the Secretary of Labor or the
Secretary of the Treasury or the furnishing of such notices or
documents to the participants or beneficiaries of the Purchaser
Employee Benefit Plans or Purchaser Pension Plans.
(h) True, correct and complete copies of the following
documents, with respect to each of the Purchaser Employee Benefit
Plans and Purchaser Pension Plans (as applicable), have been
delivered to the Seller: (i) any plans and related trust
documents, and all amendments thereto, (ii) the most recent Form
5500s for the past three years and schedules thereto, (iii) the
most recent financial statements and actuarial valuations for the
past three years, (iv) the most recent Internal Revenue Service
determination letter, (v) the most recent summary plan descrip
tions (including letters or other documents updating such
descriptions), (vi) written descriptions of all non-written
agreements relating to the Purchaser Employee Benefit Plans and
Purchaser Pension Plans and (vii) all written communications to
employees relating to the Purchaser Employee Benefit Plans or
Purchaser Pension Plans.
(i) There are no pending Legal Proceedings which have
been asserted or instituted against any of the Purchaser Employee
Benefit Plans or Purchaser Pension Plans, the assets of any such
plans of Purchaser, or the plan administrator or any fiduciary of
the Purchaser Employee Benefit Plans or Purchaser Pension Plans
with respect to the operation of such plans (other than routine,
uncontested benefit claims), and there are no facts or
circumstances which could form the basis for any such Legal
Proceeding.
(j) Each of the Purchaser Employee Benefit Plans and
Purchaser Pension Plans has been maintained, in all material
respects, in accordance with its terms and all provisions of
applicable Law. All amendments and actions required to bring
each of the Purchaser Employee Benefit Plans and Purchaser
Pension Plans into conformity in all material respects with all
of the applicable provisions of ERISA and other applicable Laws
have been made or taken except to the extent that such amendments
or actions are not required by Law to be made or taken until a
date after the Closing Date and are disclosed in Section 5.17(j)
of the Purchaser Disclosure Letter.
(k) Purchaser, any of its Subsidiaries and any ERISA
Affiliate which maintains a "group health plan" within the
meaning of Section 5000(b)(1) of the Code have complied with the
notice and continuation requirements of Section 4980B of the
Code, Part 6 of Subtitle B of Title I of ERISA and the applicable
regulations thereunder.
(l) None of the Purchaser, any of its Subsidiaries,
any ERISA Affiliate or any organization to which any is a
successor or parent corporation, has divested any business or
entity maintaining or sponsoring a defined benefit pension plan
having an "amount of unfunded benefit liabilities" (within the
meaning of Section 4001(a)(18) of ERISA) or transferred any such
plan to any person other than the Purchaser or any ERISA
Affiliate during the six-year period ending on the Closing Date.
(m) Neither Purchaser, any of its Subsidiaries nor any
"party in interest" or "disqualified person" with respect to the
Purchaser Employee Benefit Plans or Purchaser Pension Plans has
engaged in a "prohibited transaction" within the meaning of
Section 4975 of the Code or Section 406 of ERISA. No fiduciary
has any liability for breach of fiduciary duty or any other
failure to act or comply in connection with the administration or
investment of the assets of any Employee Benefit Plan and Pension
Plan.
(n) None of Purchaser, its Subsidiaries, or any ERISA
Affiliate has terminated any Purchaser Employee Benefit Plan or
Purchaser Pension Plan subject to Title IV of ERISA, or incurred
any outstanding liability under Section 4062 of ERISA to the PBGC
or to a trustee appointed under Section 4042 of ERISA. All
premiums due to the PBGC with respect to the Purchaser Employee
Benefit Plans and Purchaser Pension Plans have been paid.
(o) Except as disclosed on Schedule 5.17(o) of the
Purchaser Disclosure Letter, none of Purchaser or any of its Sub
sidiaries maintains retiree life or retiree health insurance
plans which are "welfare benefit plans" within the meaning of
Section 3(1) of ERISA.
(p) Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment becoming due to any
current, former or retired employee of Purchaser or any of its
Subsidiaries; (ii) increase any benefits otherwise payable under
any Purchaser Employee Benefit Plan or Purchaser Pension Plan; or
(iii) result in the acceleration of the time of payment or
vesting of any such benefits.
(q) No stock or other security issued by Purchaser or
any of its Subsidiaries forms or has formed a material part of
the assets of any Purchaser Employee Benefit Plan or Purchaser
Pension Plan.
5.18 LABOR.
(a) Except as set forth in Section 5.18 of the
Purchaser Disclosure Letter, no employees of Purchaser or any of
its Subsidiaries are represented by any labor organization, and
no labor organization or group of employees of Purchaser or any
of its Subsidiaries has made a demand for recognition, has filed
a petition seeking a representation proceeding or given Purchaser
or any of its Subsidiaries written notice of any intention to be
represented by a collective bargaining representative. No
collective bargaining agreement is currently being negotiated
with respect to any employees of Purchaser or any of its
Subsidiaries.
(b) Except to the extent set forth in Section 5.18 of
the Purchaser Disclosure Letter, (i) to the knowledge of each of
Purchaser and its Subsidiaries, Purchaser and each of its
Subsidiaries is in material compliance with all applicable Laws
respecting employment and employment practices, terms and
conditions of employment and wages and hours, and with each
collective bargaining agreement applicable to it, and is not
engaged in any unfair labor practice; (ii) to the knowledge of
Purchaser, there is no unfair labor practice charge, complaint or
similar claim against Purchaser or any of its Subsidiaries
pending or threatened before the National Labor Relations Board
or any similar foreign Governmental Body; (iii) there is no labor
strike, work slowdown or stoppage or other significant labor
dispute or disturbance pending or, to the knowledge of Purchaser,
threatened against or affecting Purchaser and its Subsidiaries;
(iv) to the knowledge of Purchaser, there is no representation
claim or petition pending before the National Labor Relations
Board or any similar foreign Governmental Body, and no question
concerning representation exists with respect to the respective
employees of Purchaser or any of its Subsidiaries; (v) no
grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending, and no claim
therefor exists, which in any case could reasonably be expected
to have a Material Adverse Effect on Purchaser and its
Subsidiaries, taken as a whole; and (vi) neither Purchaser nor
any of its Subsidiaries has experienced any work stoppage or
other significant labor difficulty during the past three years.
(c) Section 5.18 of the Purchaser Disclosure Letter
sets forth each agreement and supplemental agreement currently in
effect between Purchaser or any of its Subsidiaries and each
collective bargaining representative representing a group of
employees employed by Purchaser or any of its Subsidiaries, and
Seller has been furnished with a true and complete copy of each
such agreement and supplemental agreement.
(d) Section 5.18 of the Purchaser Disclosure Letter
sets forth the names of all present salaried employees of
Purchaser or its Subsidiaries and their current annual salaries
or other compensation.
5.19 LITIGATION.
(a) Except as disclosed in Section 5.19 of the
Purchaser Disclosure Letter, (i) there are no Legal Proceedings
(including, but not limited to, any proceedings which seek the
revocation, non-renewal or the adverse modification of any
license) asserted or, to the knowledge of Purchaser, threatened,
or any governmental investigation asserted or threatened, against
or affecting Purchaser or any of its Subsidiaries, at law or in
equity, before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency, court
or other instrumentality, or by any private person, firm,
corporation or other entity (such representation being limited,
in the case of any such matter in which the sole remedy sought or
threatened to be sought, as the case may be, is the payment of
money, to matters in which the sum sought or threatened to be
sought is unspecified or in excess of $15,000), (ii) to the
knowledge of Purchaser, there is no basis for any such Legal
Proceeding which could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on
Purchaser and its Subsidiaries, taken as a whole and (iii) there
are no existing or, to the knowledge of Purchaser, threatened
orders, judgments or decrees of any court or governmental agency
affecting Purchaser or any of its Subsidiaries or any of their
respective properties or assets.
(b) Except as set forth in Section 5.19 of the
Purchaser Disclosure Letter, as of the date hereof, there are no
Legal Proceedings pending or, to the knowledge of Purchaser,
threatened against, or any governmental investigation asserted
or, to the knowledge of Purchaser, threatened against, Purchaser
or any of its Subsidiaries which would give any third party the
right to enjoin or rescind the transactions contemplated by this
Agreement or otherwise prevent any of the parties hereto from
complying with the terms and provisions of this Agreement.
5.20 COMPLIANCE WITH LAWS. To the knowledge of
Purchaser, Purchaser and each of its Subsidiaries is in com
pliance with all Laws applicable to it or to the conduct of its
business or operations or the use of its properties (including
any leased properties) and assets, except for (a) Environmental
Laws (which are addressed in Section 5.21), (b) as may be
disclosed in Section 5.27 (including, to the extent set forth
therein, in the Recent SEC Documents) or in Section 5.27 of the
Purchaser Disclosure Letter, and (c) such instances of non-
compliance as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on
Purchaser and its Subsidiaries, taken as a whole. Neither
Purchaser nor any of its Subsidiaries has received any written
notice alleging any non-compliance with applicable Laws, except
as set forth in Section 5.20 of the Purchaser Disclosure Letter.
5.21 ENVIRONMENTAL MATTERS.
(a) For purposes of this Section 5.21, "Real Property"
means all real property presently owned or operated by Purchaser
or any of its Subsidiaries on which facilities are located and
all real property (including property held as trustee or in any
other fiduciary capacity) over which Purchaser or any of its
Subsidiaries currently exercises ownership, dominion, management
or control. To the extent that Real Property includes site
leases (the "Site Leases"), any representation or warranty set
forth in this Section 5.21 shall, with respect to such Site
Leases, be deemed to be given to the knowledge of Purchaser,
without any independent investigation. "Divested Real Property"
means any real property formerly owned or operated by Purchaser
or its Subsidiaries which, if it were still so owned or operated,
would constitute Real Property.
(b) Except as set forth in Section 5.21 of the
Purchaser Disclosure Letter or as would not individually or in
the aggregate have a Material Adverse Effect on Purchaser and its
Subsidiaries, taken as a whole,
(i) The operations of Purchaser and each of its
Subsidiaries are and have been in compliance with all
applicable Environmental Laws,
(ii) to the knowledge of Purchaser, the Real
Property does not (and any Divested Real Property at the
time of its disposition did not) contain any Hazardous
Substance in violation of any applicable Environmental Law,
(iii) neither Purchaser nor any of its
Subsidiaries has any knowledge that, or has received any
written notices, demand letters or written requests for
information from any Governmental Body or any third party
indicating that, it may be in violation of, or liable under,
any Environmental Law,
(iv) there are no civil, criminal or
administrative actions, suits, demands, claims, hearings,
investigations or proceedings pending or, to the knowledge
of Purchaser, threatened against Purchaser or any of its
Subsidiaries with respect to the business or operations of
Purchaser or any of its Subsidiaries or the Real Property
(or any Divested Real Property) relating to any violation or
alleged violation, of any Environmental Law,
(v) no reports have been filed, or are required
to be filed, by Purchaser or any of its Subsidiaries
concerning the release of any Hazardous Substance or the
threatened or actual violation of any Environmental Law on
or at the Real Property (or any Divested Real Property),
(vi) to the knowledge of Purchaser, there are no
underground storage tanks on, in or under any of the Real
Property, and there were no underground storage tanks on, in
or under any Divested Real Property at the time of its
disposition; and no underground storage tanks have been
closed or removed from any Real Property or Divested Real
Property while such Real Property or Divested Real Property
was owned or operated by Purchaser or any of its
Subsidiaries, and
(vii) neither Purchaser nor any of its
Subsidiaries has incurred, and none of the Real Property is
presently subject to, any liabilities fixed (or, to the
knowledge of Purchaser, contingent) relating to any suit,
settlement, court order, administrative order, judgment or
claim asserted or arising under any Environmental Law.
(c) There are no permits or licenses required under
any Environmental Law in respect of the Real Property, except for
such permits or licenses the absence of which could not
reasonably be expected to have a Material Adverse Effect on
Purchaser and its Subsidiaries, taken as a whole.
(d) Neither Purchaser nor any of its Subsidiaries has
received written notice or otherwise has knowledge that any part
of the Real Property or any Divested Real Property has been or is
listed as a site containing Hazardous Substances pursuant to any
Environmental Law.
5.22 INSURANCE. Purchaser has made available to
Seller true, complete and correct copies of all policies of
insurance of any kind or nature covering Purchaser or any of its
Subsidiaries or any of their respective employees, properties or
assets, including, without limitation, policies of life,
disability, fire, theft, workers compensation, employee fidelity,
product liability and other casualty and liability insurance.
All such policies are in full force and effect and have not been
reduced or cancelled; no change in any such insurance policy has
been notified to Purchaser; and, to the Purchaser's knowledge,
neither Purchaser nor any of its Subsidiaries is in default of
any provision thereof, except for such defaults as could not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on Purchaser and its Subsidiaries,
taken as a whole.
5.23 RELATED PARTY TRANSACTIONS. Except as set
forth in Section 5.23 of the Purchaser Disclosure Letter, no
Affiliate of Purchaser (other than its Subsidiaries) has borrowed
any moneys from or has outstanding any indebtedness or other
similar obligations to Purchaser or any of its Subsidiaries, and
neither Purchaser nor any of its Subsidiaries has borrowed any
moneys from or has any indebtedness or other similar obligations
to any Affiliates of Purchaser (other than its Subsidiaries) or
any holder of more than 15% of Purchaser's issued and outstanding
shares of capital stock. Except as set forth in Section 5.23 of
the Purchaser Disclosure Letter, no Affiliate (other than
Subsidiaries) or, to the knowledge of Purchaser, holder of more
than 15% of the issued and outstanding common stock of Purchaser
nor, to the knowledge of Purchaser, any officer or employee of
Purchaser or its Affiliates (i) owns any direct or indirect
interest of any kind in, or controls or is a director, officer,
employee or partner of, or consultant to, or lender to or
borrower from or has the right to participate in the profits of,
any Person which is (A) a competitor, supplier, customer,
landlord, tenant, creditor or debtor of Purchaser or any of its
Subsidiaries, (B) engaged in a business related to the business
of Purchaser or any of its Subsidiaries, or (C) a participant in
any transaction to which Purchaser or any of its Subsidiaries is
a party or except where any officer or employee of Purchaser or
its Affiliates owns less than 5% of the issued and outstanding
capital stock of such Person and such Person's equity securities
are traded or quoted on a recognized stock exchange or quotations
system, (ii) is a party to any Contract with Purchaser or any of
its Subsidiaries.
5.24 FINANCIAL ADVISORS. Except as set forth in
Section 5.24 of the Purchaser Disclosure Letter, no Person has
acted, directly or indirectly, as a broker, finder or financial
advisor for the Purchaser in connection with the transactions
contemplated by this Agreement and no Person is entitled to any
fee or commission or like payment in respect thereof. Purchaser
and its Affiliates have entered into no agreement or arrangement
which would require Seller or any of its Affiliates to pay any
such fee or commission.
5.25 CLAIMS TO PROPERTY. Except as otherwise
disclosed in this Agreement or the Purchaser Disclosure Letter,
no Affiliates of Purchaser (other than its Subsidiaries) have any
claim to any property, asset or right owned by Purchaser or any
of its Subsidiaries or used by Purchaser or any of its
Subsidiaries in the conduct of its business.
5.26 LICENSES; PERMITS; AUTHORIZATIONS. Purchaser
and its Subsidiaries have all material approvals, authorizations,
consents, licenses (excluding FCC licenses), orders and permits
(except for sales and use tax permits, franchise tax
registrations and zoning ordinances, variances and permits) of
all Governmental Bodies, required by the nature of the operations
of Purchaser or any of its Subsidiaries to permit the operation
thereof in the manner in which they are currently conducted
(collectively, the "Purchaser Licenses"). Purchaser or one of
its Subsidiaries is the authorized legal holder of the Purchaser
Licenses issued to and used by it, none of which is subject to
any restriction or condition which would limit in any material
respect the full operation of Purchaser or any of its
Subsidiaries as now or proposed to be operated.
5.27 FCC MATTERS.
(a) Section 5.27(a) of the Purchaser Disclosure Letter
sets forth a true and complete list of the following information
for each 220 MHz land mobile radio system under management by
Purchaser or any of its Subsidiaries or which Purchaser or any of
its Subsidiaries holds an option to acquire (individually, a
"System," and, collectively, the "Systems"):
(i) the name of the FCC licensee of the System
(and an appropriate notation if any such licensee is an
Affiliate or an "associate" (as defined under the Securities
Exchange Act of 1934, as amended) of Purchaser), the call
sign, the licensed transmitter location (by site coordinates
and city) and the transmitter location (by site coordinates
and city) on which a system has been constructed that is
different from the licensed location, the frequency or
frequencies authorized, the date of construction of the
frequencies, the number of frequencies constructed and the
license renewal date;
(ii) a list and current copies (or written
summaries, including all material terms, in the case of oral
agreements) of all contracts (excluding customer contracts),
leases and site licenses related to Purchaser's SMR business
and the Systems, including, without limitation, all
agreements between purchaser and licensee, all site
licenses, equipment leases or installment sale contracts,
partnership, joint-venture or joint-use agreements,
management agreements, dealer agreements, short-space
agreements or the like;
(iii) to Purchaser's knowledge, a list of all
agreements between the licensee and any third party relating
to the license, including, without limitation, rights of
first refusal, options and other such rights or obligations
which may affect the rights of Purchaser to manage the
license or to exercise any of Purchaser's option or right of
first refusal to acquire the license; and
(iv) a list of all installed equipment with
respect to such System for which title is held by Purchaser.
(b) Except as set forth in Section 5.27(a) of the
Purchaser Disclosure Letter, all of the contracts, leases and
site licenses relating to the Systems have been entered into by
Purchaser on arm's length terms with non-Affiliates. Neither
Purchaser nor any of its Subsidiaries nor, to the knowledge of
Purchaser, any of the other contracting parties is in default in
any material respect, or has acted or failed to act in a manner
which, with notice or the passage of time or both, will result in
a material default, under any of the contracts, leases, and site
licenses, and no penalties have been incurred nor are any
material amendments pending with respect to any of such
contracts, leases and site licenses.
(c) Except as set forth in Section 5.27(c) of the
Purchaser Disclosure Letter or in the Purchaser's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 or
Quarterly Report on Form 10-Q for the period ended March 31, 1996
(collectively, as filed prior to the date hereof, without taking
into account any amendments filed after the date hereof, the
"Recent SEC Documents"), all of the properties, equipment and
systems of the Purchaser or any of its Subsidiaries, and all of
the properties, equipment and systems of the Systems and all
properties, equipment and systems of Purchaser or any of its Sub
sidiaries and the Systems to be added in connection with any
contemplated system expansion or construction prior to Closing
are and will be in compliance with all standards or rules imposed
by any Governmental Body, including, without limitation, the FCC
and (if applicable) any public utilities commission or other
state or local governments or instrumentalities (but excluding
Environmental Laws, which are not addressed hereby) or as imposed
under any agreements with customers, and are and will be in good
repair and working order.
(d) Except as set forth in Section 5.27(d) of the
Purchaser Disclosure Letter or the Recent SEC Documents, to the
knowledge of Purchaser, all franchise, license or other fees and
charges which have become due with respect to the FCC licenses
for the Systems have been duly and timely paid, and Purchaser or
one of its Subsidiaries has made appropriate provision for any
such fees and charges which have accrued and remain unpaid.
Except as set forth in Section 5.27(d) of the Purchaser
Disclosure Letter or the Recent SEC Documents, to the knowledge
of Purchaser, all licenses, necessary permits, consents and
authorizations required to construct and operate the Systems from
the FCC and, if applicable, any public utilities commission, have
been duly obtained in compliance with all FCC Rules, regulations
and policies and are in good standing. Except as set forth in
Section 5.27(d) of the Purchaser Disclosure Letter or the Recent
SEC Documents, to the knowledge of Purchaser, the FCC licenses
for the Systems are valid and in full force and effect without
conditions except for such conditions as are stated on the FCC
license or as are generally applicable to holders of 220 MHz non-
nationwide FCC licenses in the Private Land Mobile Radio Service.
Except as set forth in Section 5.27(d) of the Purchaser
Disclosure Letter or the Recent SEC Documents, to the knowledge
of Purchaser, no event has occurred or is continuing which could
(i) result in the revocation or termination or adverse
modification of any FCC license that is managed by, or under
option to, Purchaser or any of its Subsidiaries, or (ii)
adversely affect any of the rights of the FCC licensee or
Purchaser or any of its Subsidiaries thereunder. Except as set
forth in Section 5.27(d) of the Purchaser Disclosure Letter or
the Recent SEC Documents, Purchaser has no reason to believe or
any knowledge that the FCC licenses will not be renewed in the
ordinary course or that a transfer or assignment to Purchaser of
the FCC licenses will not be granted in the ordinary course.
(e) Except as set forth in Section 5.27(e) of the
Purchaser Disclosure Letter or the Recent SEC Documents, to the
knowledge of Purchaser, Purchaser's (or its Subsidiary's) manage
ment of the Systems complies with the FCC's rules, regulations
and policies. Except as set forth in Section 5.27(e) of the
Purchaser Disclosure Letter or the Recent SEC Documents, to the
knowledge of Purchaser, there is no investigation, inquiry or
other proceeding pending, or, to Purchaser's knowledge,
threatened before the FCC or other Governmental Body which
relates to the Communications Act or the FCC's rules, regulations
or policies and concerns Purchaser or its Subsidiaries, the FCC
licensees or the Systems.
(f) Except as set forth in Section 5.27(f) of the
Purchaser Disclosure Letter, no additional FCC, state or local
public utilities commission or other authority of like
jurisdiction permits, licenses, consents and authorizations will
be required to be obtained by Purchaser or any of its
Subsidiaries as a result of the Closing of the transactions
contemplated hereunder.
(g) Section 5.27(a) of the Purchaser Disclosure Letter
contains a complete list of all Systems that have been
constructed (the "Constructed Systems"), and Section 5.27(g) of
the Purchaser Disclosure Letter contains a complete list of all
Systems whose license has been the subject of an FCC Form 600
modification application request (the "Modified Systems"). All
of the Constructed Systems were constructed and placed in
operation in accordance with their license or any Special
Temporary Authorities ("STAs") granted by the FCC prior to
January 26, 1996. Except as set forth in Section 5.27(g) of the
Purchaser Disclosure Letter or in the SEC Documents, to the
knowledge of Purchaser, all required construction notifications
to the FCC for the Constructed Systems have been properly and
timely made. From and after the date hereof, Purchaser shall
notify Seller of (i) the completion of construction of any
additional Systems (the "Additional Systems"), (ii) the
decommissioning of any System that had been constructed and (iii)
the termination, cancellation or expiration without renewal of
any agreements referred to in Section 5.27(a)(ii) with respect to
any System, in each case within five business days of such
completion, decommissioning, termination, cancellation or
expiration, as applicable, and shall provide all information with
respect to any Additional Systems as required by Section 5.27 of
this Agreement. The Additional Systems shall be subject to and
included within Purchaser's warranties and representations of
this Section 5.27.
(h) Except as set forth in Section 5.27(h) of the
Purchaser Disclosure Letter or the Recent SEC Documents, to the
knowledge of Purchaser, none of the FCC licenses under management
by, or option to, Purchaser or any of its Subsidiaries are
subject to third-party agreements that would materially restrict
Purchaser's or such Subsidiary's management of said licenses or
the exercise of Purchaser's or such Subsidiary's option to
acquire the Systems.
(i) Except as set forth in Section 5.27(i) of the
Purchaser Disclosure Letter or the Recent SEC Documents,
Purchaser is not aware of any facts which would disqualify
Purchaser or any of its Subsidiaries under the Communications
Act, or the rules, regulations and practices of the FCC, from
transferring control of Purchaser and its Subsidiaries to Seller,
as contemplated by this Agreement and neither Purchaser nor any
of its Subsidiaries shall take any action which would cause such
disqualification or fail to take any action if the failure to
take such action would cause such disqualification.
(j) There are no applications, complaints or
proceedings pending or, to the knowledge of Purchaser, threatened
before the FCC, relating to the business and operations of
Purchaser or any of its Subsidiaries which, if adversely
determined, could reasonably be expected to have a Material
Adverse Effect on Purchaser and its Subsidiaries, taken as a
whole.
(k) Except as set forth in Section 5.27(k) of the
Purchaser Disclosure Letter or the Recent SEC Documents, there
are no competing applications or proceedings pending or
complaints filed of which Purchaser and its Subsidiaries have
received notice or, to the best knowledge of Purchaser,
threatened, as of the date hereof, before the FCC relating to the
business or operations of Purchaser and its Subsidiaries other
than applications, proceedings or complaints which generally
affect the land mobile radio industry or 220 MHz licenses.
(l) Neither Purchaser nor any of its Subsidiaries is,
as of the date hereof, the record or beneficial licensee and
owner of any FCC licenses, and Purchaser or its Subsidiaries are
entitled to act and is acting, as of the date hereof, as manager,
pursuant to valid and subsisting management agreements of each of
the FCC licenses identified as Systems in Section 5.27(l) of the
Purchaser Disclosure Letter (and, to the knowledge of Purchaser,
the persons identified on Section 5.27(l) of the Purchaser
Disclosure Letter as the holders of such Systems are the sole
record and beneficial licensees and owners of such Systems).
Purchaser and its Subsidiaries are, as of the date hereof, in
compliance in all material respects with all regulations
concerning construction and spacing of the Systems or the
facilities associated therewith. None of the Systems is
currently subject to or operating under any short-space or any
other agreement encumbering any of them or any FCC waiver of
otherwise applicable rules or regulations, except as disclosed in
Section 5.27(l) of the Purchaser Disclosure Letter.
(m) Section 5.27(m) of the Purchaser Disclosure Letter
sets forth a true and complete list, by customer, of the units in
service in Purchaser's 220-222 MHz business (the "Units in
Service"). The Units in Service are, to the knowledge of
Purchaser, in the possession of the indicated customers, which
customers are billed for their use of such Units in Service at
the actual customer rates shown in Schedule 5.27(m) of the
Purchaser Disclosure Letter and which customers are required to
pay such billed amounts in full (subject to Purchaser's normal
prompt payment, volume and similar discounts, all of which have
been disclosed in writing to Seller) on or before the relevant
due date reflected in the relevant billing.
5.28 INVESTMENT IN SHARES.
(a) Purchaser will hold the Shares transferred to it
pursuant to this Agreement for investment and not with a view to,
or for resale in connection with, any distribution thereof within
the meaning of the Securities Act. Subject to the terms of
Section 6.10, Purchaser does not have any present intention of
selling, offering to sell or otherwise disposing of or
distributing the Shares transferred to it pursuant to this
Agreement.
(b) Purchaser acknowledges that Seller has disclosed
that the Shares to be transferred to Purchaser pursuant to this
Agreement have not been registered under the Securities Act, as
amended, and, therefore, cannot be resold unless they are
registered under the Securities Act or unless an exemption from
registration is available.
(c) Purchaser is sophisticated in financial matters
and is able to evaluate the risks and benefits of the investment
in the Shares.
(d) Purchaser has had an opportunity to ask questions
and receive answers concerning the terms and conditions of the
acquisition of the Shares and has had full access to such other
information concerning the Seller as Purchaser has requested.
(e) Purchaser is able to bear the economic risk of its
investment in the Shares for an indefinite period of time,
recognizing that the Shares have not been registered under the
Securities Act and, therefore, cannot be sold unless subsequently
registered under the Securities Act or an exemption from such
registration is available.
5.29 GENERAL PARTNERSHIPS.
(a) Purchaser has received inquiries from securities
regulators in Kansas, North Carolina, North Dakota and South
Dakota regarding the syndication of general partnership interests
in certain partnerships (the "Partnerships") for the purpose of
the acquisition of stations licensed by the FCC to operate in the
220-222 MHz band (the "220 MHz Band"). Purchaser has not
received inquiries from any other Governmental Bodies with
respect to the Partnerships or any similar partnerships.
(b) None of Purchaser or its Subsidiaries (including,
without limitation, Roamer One, Inc. ("Roamer One")), their
respective affiliates or predecessors-in-interest or any of their
respective officers and directors or, to the knowledge of
Purchaser, Xxxxxxxx or any of its affiliates, predecessors-in-
interest, officers or directors:
(i) has had any direct participation or role in
developing, preparing or marketing materials for the syndication
of the Partnerships or any similar partnerships;
(ii) has had any involvement in the organization,
planning, formation, or promotion of the Partnerships or any
similar partnerships, or had or has any direct or indirect
ownership Interests in any such partnerships;
(iii) authorized the use of the "Roamer One" name,
trademark or network map in any promotional material associated
with the syndication of any partnership interests (including,
without limitation, interests in the Partnerships); or
(iv) has received directly or indirectly any of the
proceeds of any syndications of such partnership interests
(including, without limitation, interests in the Partnerships)
(other than the receipt by Roamer One of payments in return for
Roamer One services as may have been made pursuant to an
Exclusive Management Agreement and Right of First Refusal entered
into between Roamer One and such partnerships or the Supply
Agreement between Roamer One and Voice Data Communications, Inc.
("VDC") entered into on May 3, 1994).
5.30 NO MISREPRESENTATION. No representation or
warranty of Purchaser contained in this Agreement or in the
Purchaser Disclosure Letter or in any certificate or other
instrument furnished by Purchaser to Seller pursuant to the terms
hereof, contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements
contained herein or therein not misleading.
ARTICLE VI
COVENANTS
6.1 ACCESS TO INFORMATION. Each of Seller and
Purchaser agrees that, prior to the Closing Date, the other party
hereto shall be entitled, through its officers, employees and
representatives (including, without limitation, its legal and
financial advisors and accountants), to make such investigation
of the properties, businesses and operations of the Business and
Radiocoms or Purchaser and their respective Subsidiaries, as
applicable, and such examination of the books, records and
financial condition of the Business and Radiocoms or Purchaser
(and their respective Subsidiaries), as applicable, as such other
party reasonably requests and to make extracts and copies of such
books and records. Any such investigation and examination shall
be conducted during regular business hours and under reasonable
circumstances, and each of Seller and Purchaser shall cooperate,
and shall cause their respective Subsidiaries to cooperate, fully
therein. No investigation by Seller or Purchaser prior to or
after the date of this Agreement shall diminish or obviate any of
the representations, warranties, covenants or agreements of the
other party thereto contained in this Agreement or any other
agreements or certificates in connection with the transactions
contemplated by this Agreement or the Midland Agreement. In
order that each of Purchaser and Seller may have full opportunity
to make such physical, business, accounting and legal review,
examination or investigation as it may reasonably request of the
affairs of the Business and Radiocoms or Purchaser (and their
respective Subsidiaries), as applicable, Seller and Purchaser
shall cause the officers, employees, consultants, agents,
accountants, attorneys and other representatives of Radiocoms or
Purchaser, as applicable, to cooperate fully with such represen
tatives in connection with such review and examination.
6.2 CONDUCT OF PURCHASER'S AND RADIOCOMS'S RESPEC
TIVE BUSINESSES PENDING THE CLOSING.
(a) Prior to the Closing Date, except as otherwise
expressly contemplated by this Agreement or with the prior
unanimous written consent of a committee (the "Committee")
composed of Xx Xxxxx, Xxxx Xxxxxxxx and Xxxxxxxx Xxxxxx, which
consent will not be unreasonably withheld, Seller shall cause
Radiocoms and its Subsidiaries (and, to the extent they are
engaged in the Business, any Relevant Affiliates) to, and
Purchaser shall, and shall cause its Subsidiaries to:
(i) conduct its business only in the ordinary
course consistent with past practice;
(ii) use its best efforts to (A) preserve its
present business operations, organization (including,
without limitation, management and the sales force) and
goodwill, (B) preserve its present relationship with Persons
having business dealings with it, and (C) take such actions
as may be reasonably necessary to maintain in good standing
all FCC licenses with respect to any Systems or DTI
licenses, permits or authorizations, as applicable;
(iii) maintain (A) all its assets and properties
in their current condition, ordinary wear and tear excepted,
and (B) insurance upon all of its properties and assets in
such amounts and of such kinds comparable to that in effect
on the date of this Agreement;
(iv) (A) maintain its books, accounts and records
in the ordinary course of business consistent with past
practices, (B) continue to collect accounts receivable and
pay accounts payable utilizing normal procedures and without
discounting or accelerating payment of such accounts (other
than in the ordinary course of business), and (C) comply
with all contractual and other obligations applicable to its
operations; and
(v) comply in all material respects with
applicable Laws.
(b) Prior to the Closing Date, except as otherwise
expressly contemplated by this Agreement or with the prior
unanimous written consent of the Committee (which consent shall
not be unreasonably withheld), Seller shall cause Radiocoms and
its Subsidiaries and, to the extent that it is engaged in the
Business, any Relevant Affiliate not to, and Purchaser shall not,
and shall cause its Subsidiaries not to:
(i) declare, set aside, make or pay any dividend
or other distribution in respect of its capital stock or
repurchase, redeem or otherwise acquire any outstanding
shares of the capital stock or other securities of, or other
ownership interests in, itself or any of its Subsidiaries,
except for the cancellation of the Existing Shares and the
issuance of the Deferred Shares in lieu thereof; PROVIDED,
HOWEVER, that any wholly owned Subsidiaries of Radiocoms or
Purchaser shall be permitted to declare and pay dividends to
Radiocoms or Purchaser, as applicable, to the extent that
funds are legally available therefor;
(ii) transfer, issue, sell or dispose of any
shares of its capital stock or other securities of itself or
its Subsidiaries or grant options, warrants, calls or other
rights to purchase or otherwise acquire shares of the
capital stock or other securities of itself or any of its
Subsidiaries; PROVIDED, HOWEVER, that (A) Purchaser may
issue and sell up to 1,000,000 shares of Purchaser Common
Stock and may, subject in each instance to the prior
unanimous written consent of the Committee, which approval
will not be unreasonably withheld, issue up to an aggregate
of 1,500,000 shares of Purchaser Common Stock to acquire
interests in additional FCC licenses to be used in the
operation or development of its business, (B) any such
Person may issue debt securities as permitted by clause
(vi), and (C) Seller may cause shares of any Relevant
Affiliate owning any part of the Business to be transferred
to Radiocoms and its Subsidiaries, may cause Radiocoms to
issue the Shares and up to a maximum of 20,000 Preferred
Shares (having a liquidation preference not in excess of
$20,000,000) to Seller;
(iii) effect any recapitalization, reclassifi
cation, stock split or like change in its capitalization
except, in the case of Seller, as may be required to
authorize the issuance of the Shares and the Preferred
Shares;
(iv) amend its certificate of incorporation, by-
laws, memorandum or articles of association or similar
organizational documents, except that Seller may cause
Radiocoms to amend its Memorandum of Association and
Articles of Association solely for the purposes of
authorizing the Shares and the Preferred Shares as
contemplated by this Agreement, or changing the name of
Radiocoms so as to delete the word "Securicor" therefrom,
and Purchaser may amend its certificate of incorporation to
increase the number of authorized shares as necessary to
permit Purchaser to consummate the transactions contemplated
hereby;
(v) (A) materially increase the annual level of
compensation of any employee, (B) increase the annual level
of compensation payable or to become payable by it or any of
its Subsidiaries to any of their respective executive
officers, (C) grant any bonus, benefit or other direct or
indirect compensation to any employee, director or
consultant, other than in the ordinary course consistent
with past practice and in such amounts as are fully reserved
against in the Radiocoms Financial Statements or the
Purchaser Financial Statements, as applicable, (D) increase
the coverage or benefits available under any (or create any
new) severance pay, termination pay, vacation pay, company
awards, salary continuation for disability, sick leave,
deferred compensation, bonus or other incentive
compensation, insurance, pension or other employee benefit
plan or arrangement made to, for, or with any of its or its
Subsidiaries' directors, officers, employees, agents or
representatives or otherwise modify or amend or terminate
any such plan or arrangement or (E) enter into any employ
ment, deferred compensation, severance, consulting, non-
competition or similar agreement (or amend any such
agreement) to which it or any of its Subsidiaries is a
party or involving a director, officer or employee of it or
any of its Subsidiaries in his or her capacity as a
director, officer or employee;
(vi) except (A) for trade payables and (B) for
pledges of assets and indebtedness for borrowed money which
do not exceed, individually or in the aggregate, $500,000
(it being understood that (1) such amount shall not include
indebtedness existing or assets pledged prior to the date of
this Agreement and (2) the transaction value of any asset
pledges shall be deemed to be equal to the fair market value
of the assets pledged in such transaction), borrow monies
for any reason or draw down on any line of credit or debt
obligation, or become the guarantor, surety, endorser or
otherwise liable for any debt, obligation or liability
(contingent or otherwise) of any other Person; PROVIDED,
HOWEVER, that, subject to the unanimous prior written
consent of the Committee, which consent will not be
unreasonably withheld, Purchaser may issue an unsecured
debenture, which shall be a general obligation of Purchaser,
in an aggregate principal amount of up to $2,500,000 on such
terms as may be reasonably determined by Purchaser;
(vii) except as may be permitted pursuant to
clause (vi) above, subject to any Lien (except for leases
that do not materially impair the use of the property
subject thereto in their respective businesses as presently
conducted), any of its properties or assets (whether
tangible or intangible);
(viii) acquire any material properties or assets
(other than, in the case of Purchaser, FCC licenses as
contemplated by clause (ii) above) or sell, assign,
transfer, convey, lease or otherwise dispose of any of its
FCC authorizations, FCC licenses, DTI licenses or material
properties or assets, or its rights to any of the foregoing
or to any FCC licenses issued to or held by other Persons
(except for fair consideration in the ordinary course of
business consistent with past practice), or in the case of
Purchaser, take any action, other than in the exercise of
its reasonable business judgment, that causes, or take any
action that could reasonably be expected to cause, the FCC
licensees with respect to any System to cancel, assign,
transfer or otherwise dispose of their FCC license in a
manner that would be adverse to Purchaser;
(ix) cancel or compromise any debt or claim or
waive or release any material right except in the ordinary
course of business consistent with past practice, except, in
the case of Radiocoms for cancellations of intercompany
indebtedness contemplated hereby;
(x) other than, in the case of Purchaser, capital
expenditures necessary for the build-out of the Systems
pursuant to Purchaser's contractual obligations, enter into
any commitment for capital expenditures in excess of $20,000
for any individual commitment and $100,000 for all
commitments in the aggregate;
(xi) enter into, modify or terminate any labor or
collective bargaining agreement or, through negotiation or
otherwise, make any commitment or incur any liability to any
labor organization;
(xii) introduce any material change with respect
to its operations, including, without limitation, any
material change in its "roll-out" plans or the types,
nature, composition or quality of its products or services,
or, other than in the ordinary course of business, make any
material change in product specifications or prices or terms
of distributions of such products;
(xiii) enter into any transaction or make or
enter into any Contract which by reason of its size or
otherwise is not in the ordinary course of business
consistent with past practice;
(xiv) enter into or agree to enter into any
merger or consolidation with, any corporation or other
entity, or engage in any new business or invest in, make a
loan, advance or capital contribution to, or otherwise
acquire the securities of any other Person except that
Seller may engage in such transactions solely to the extent
required to transfer any part of the Business to Radiocoms
and its Subsidiaries;
(xv) transfer any funds or assets to any of its
Affiliates, which funds and assets are, in the aggregate,
worth in excess of $500,000, except for the purchase of
goods and services from any such Affiliate in the ordinary
course of business at the fair market value for such goods
and services and transactions solely to the extent required
to transfer any part of the Business to Radiocoms and its
Subsidiaries; or
(xvi) agree to do anything prohibited by this
Section 6.2 or anything which would make any of the
representations and warranties of the Purchaser or the
Seller in this Agreement or the Purchaser Documents or the
Seller Documents untrue or incorrect in any material respect
as of any time through and including the Closing Date.
6.3 CONSENTS AND APPROVALS.
(a) Seller and Purchaser shall use their respective
best efforts, and shall cooperate with each other, to obtain at
the earliest practicable date all consents and approvals required
to consummate the transactions contemplated by this Agreement;
PROVIDED, HOWEVER, that neither Seller nor Purchaser shall be
obligated to pay any consideration therefor to any third party
from whom consent or approval is requested.
(b) Promptly following the date of this Agreement,
Purchaser shall prepare and file with the Securities and Exchange
Commission a proxy statement and related solicitation materials
relating to a special meeting of the holders of the Purchaser
Common Stock (the "Purchaser Stockholders' Meeting") to approve
the issuance of Purchaser Shares pursuant hereto (such proxy
statement, as amended or supplemented from time to time, being
hereinafter referred to as the "Proxy Statement"), and shall use
its best efforts to cause the Proxy Statement to be mailed to its
stockholders at such time and in such manner as permits the
Purchaser Stockholders' Meeting to be held as promptly as
practicable. Seller shall furnish all information as may be
reasonably requested by Purchaser and, in any case, as required
with respect to Purchaser by Regulation 14A under the Securities
Exchange Act of 1934, as amended, for inclusion in the Proxy
Statement. The information provided by Purchaser and Seller,
respectively, for use in the Proxy Statement shall, on the date
when the Proxy Statement is first mailed to Purchaser's
stockholders, and on the date of the Purchaser Stockholders'
Meeting, be true and correct in all material respects and shall
not omit to state any material fact required to be stated therein
or necessary in order to make the statements contained therein
not misleading, and Purchaser and Seller each agree to promptly
correct any information provided by it for use in the Proxy
Statement which shall have become false or misleading. Seller
and Purchaser shall instruct, and shall use all reasonable
efforts to cause, their respective accountants to deliver to each
other a letter dated the time the Proxy Statement is mailed to
Purchaser's stockholders, addressed to such party, containing
such matters as are required in accordance with F.A.S. No. 72 and
deliver a letter dated as of the Closing Date bringing down the
matters contained in such letter.
(c) Purchaser shall duly call, give notice of, convene
and hold the Purchaser Stockholders' Meeting, for the purpose of
approving, among other matters, the issuance of the Purchaser
Shares pursuant hereto. Purchaser, through its Board of
Directors, shall recommend to its stockholders approval of the
foregoing; PROVIDED, HOWEVER, that if Purchaser's Board of
Directors determines, in its good faith judgment after
consultation with independent legal counsel, that it is necessary
to do so in order to comply with its fiduciary duties to
stockholders under applicable law, Purchaser's Board of Directors
may withdraw or modify such recommendation. The Proxy Statement
shall comply as to form in all material respects with all
applicable requirements of the Securities Exchange Act of 1934,
as amended, and no amendment or supplement to the Proxy Statement
shall be made by Purchaser without the prior written approval of
Seller unless Purchaser determines such amendment or supplement
is required by law.
6.4 FILINGS WITH GOVERNMENTAL BODIES. As promptly
as practicable after the execution of this Agreement, each party
shall, in cooperation with the other, file or cause to be filed
any reports, notifications or other information that may be
required under the HSR Act and shall furnish or cause to be
furnished to the other all such information in its possession as
may be reasonably necessary for the completion of the reports,
notifications or submissions to be filed by the other. Each
party hereto agrees to use its reasonable best efforts to comply
and cause its Affiliates to comply in a full and timely manner
with any request from a Governmental Body for additional informa
tion. The filing fee with respect to the reports, notifications
or other information that may be required under the HSR Act with
respect to the Transactions shall be borne solely by Purchaser.
6.5 OTHER ACTIONS.
(a) Each of Seller and Purchaser shall use its best
efforts to (i) take all actions necessary or appropriate to
consummate the transactions contemplated by this Agreement and
(ii) cause the fulfillment at the earliest practicable date of
all of the conditions to their respective obligations to
consummate the transactions contemplated by this Agreement.
(b) Purchaser shall use its reasonable best efforts to
(i) take all actions necessary or appropriate to consummate the
Other Transactions and (ii) cause the fulfillment at the earliest
practicable date of all of the conditions to its obligations to
consummate the Other Transactions.
(c) Purchaser shall use its best efforts to assure
that, prior to the Closing, the Purchaser Shares have been
approved for quotation on the Small Cap Market, subject to
official notice of issuance.
6.6 PRESERVATION OF RECORDS. Subject to Section
6.9(a) hereof (relating to the preservation of Tax records),
Seller and Purchaser agree that each of them shall preserve and
keep the records held by it relating to the Business for a period
of three years from the Closing Date and shall make such records
and personnel available to the other as may be reasonably
required by such party in connection with, among other things,
any insurance claims by, legal proceedings against or
governmental investigations of Seller or Purchaser or any of
their Affiliates or in order to enable Seller or Purchaser to
comply with their respective obligations under this Agreement and
each other agreement, document or instrument contemplated hereby
or thereby. In the event Seller or Purchaser wishes to destroy
such records after that time, such party shall first give ninety
(90) days' prior written notice to the other and such other party
shall have the right at its option and expense, upon prior
written notice given to such party within that ninety (90) day
period, to take possession of the records within one hundred and
eighty (180) days after the date of such notice.
6.7 PUBLICITY. Neither Seller nor Purchaser shall
issue any press release or public announcement concerning this
Agreement or the transactions contemplated hereby without
obtaining the prior written approval of the other party hereto,
which approval will not be unreasonably withheld or delayed,
unless, in the sole judgment of Purchaser or Seller, disclosure
is otherwise required by applicable Law or by the applicable
rules of any stock exchange on which Purchaser or Seller (or any
Affiliates thereof) lists securities; PROVIDED that, to the
extent required by applicable Law, the party intending to make
such release shall use commercially reasonable efforts consistent
with such applicable Law to consult with the other party with
respect to the text thereof.
6.8 AGREEMENTS WITH RESPECT TO OTHER TRANSACTIONS.
From and after the execution and delivery of this Agreement,
Purchaser shall not amend, modify, supplement, waive any rights
or remedies under or grant any consents under either the Midland
Agreement or the Asset Purchase Agreement (including, in each
case, any schedules or exhibits thereto), or agree to do any of
the foregoing, without the prior written consent of Seller.
6.9 TAX AND ACCOUNTING MATTERS.
(a) Purchaser and Seller agree to furnish or cause to
be furnished to each other, and each at their own expense, as
promptly as practicable, such information (including access to
books and records) and assistance, including making employees
available on a mutually convenient basis to provide additional
information and explanations of any material provided, relating
to the Business and/or Radiocoms, its Subsidiaries and/or its
Relevant Affiliates as is reasonably necessary for the filing of
any Tax Return, for the preparation for any audit, and for the
prosecution or defense of any claim, suit or proceeding relating
to any adjustment or proposed adjustment with respect to Taxes.
Purchaser or Radiocoms shall retain in its possession, and shall
provide Seller reasonable access to (including the right to make
copies of), such supporting books and records and any other
materials that Seller may specify with respect to Tax matters of
Radiocoms, its Subsidiaries and/or its Relevant Affiliates for
any taxable period ending on or prior to the Closing Date until
the relevant statute of limitations has expired. After such
time, Purchaser may dispose of such material; PROVIDED that
prior to such disposition Purchaser shall give Seller ninety (90)
days' prior written notice thereof, and Seller may, at any time
during such ninety (90) day period, at its own expense, take
possession of such materials.
(b) Seller shall be liable for and shall pay (and
shall indemnify and hold harmless Purchaser against) all sales,
use, stamp, documentary, filing, recording, transfer or similar
fees or taxes or governmental charges as levied by any taxing
authority or governmental agency in connection with the transfer
of the Shares contemplated by this Agreement or any
recapitalization of Radiocoms or any transfer to Radiocoms of
assets or shares that takes place in contemplation of this
Agreement. Purchaser likewise shall be liable for and shall pay
(and shall indemnify and hold harmless Seller against) any such
fees, taxes or governmental charges as levied by any taxing
authority or governmental agency in connection with the issuance
of the Purchaser Shares contemplated by this Agreement.
(c) Within 14 days following the date hereof, Seller
will deliver to Purchaser (i) the Interim Statements, together
with an unqualified audit report thereon by Radiocoms'
independent public accountants and (ii) an unaudited pro forma
consolidated balance sheet of Radiocoms and its Subsidiaries as
at March 31, 1996 after giving effect to the transactions
contemplated by this Agreement, including without limitation the
issuance of the Shares and the Preferred Shares, the transfer of
the EFJ Shares and the EFJ Warrant and the refinancing of
intercompany indebtedness (the "Pro Forma Balance Sheet").
(d) Seller shall (i) take all actions and make any
necessary elections so that, to the maximum extent permissible
under applicable Law, Seller shall obtain the tax benefits in the
United Kingdom and other jurisdictions attributable to Radiocoms
and its Subsidiaries for the tax year ending September 30, 1996
and any tax year thereafter to the extent permitted by Law and
(ii), promptly after the relevant Tax Returns are filed with the
applicable taxing authorities, transfer funds to Radiocoms equal
to the cash value of such tax benefits to Seller.
6.10 NO SOLICITATION. Purchaser, its affiliates and
their respective officers, directors, employees, representatives
and agents shall immediately cease any existing discussions or
negotiations, if any, with any parties conducted heretofore with
respect to (except as otherwise expressly permitted by this
Agreement) any acquisition of all or any material portion of the
assets of, or (except as otherwise expressly permitted by this
Agreement) any equity interest in, Purchaser or its Subsidiaries
or any business combination with Purchaser or its Subsidiaries.
Purchaser may, directly or indirectly, furnish information and
access, in each case only in response to unsolicited requests
therefor, to any corporation, partnership, person or other entity
or group pursuant to confidentiality agreements, and may
participate in discussions and negotiate with such entity or
group concerning any merger, sale of assets, sale of shares of
capital stock or similar transaction involving Purchaser or any
Subsidiary or division of Purchaser, if such entity or group has
submitted a written proposal to Purchaser relating to any such
transaction and Purchaser's Board of Directors by a majority vote
determines in its good faith judgment, after consultation with
independent legal counsel, that it is necessary to do so to
comply with its fiduciary duties to shareholders under applicable
law. Purchaser's Board of Directors shall provide a copy of any
such written proposal and a summary of any oral proposal to
Seller immediately after receipt thereof and thereafter keep
Seller promptly advised of any material development with respect
thereto. Except as set forth above, neither Purchaser nor any of
its Affiliates shall, nor shall Purchaser authorize or permit any
of its or their respective officers, directors, employees,
representatives or agents to, directly or indirectly, encourage,
solicit, participate in or initiate discussions or negotiations
with, or provide any information to, any corporation,
partnership, person or other entity or group (other than Seller
or any affiliate or associate of Seller) concerning any merger,
sale of assets, sale of shares of capital stock or similar
transaction involving Purchaser or any Subsidiary or division of
Purchaser; PROVIDED, HOWEVER, that nothing herein shall prevent
Purchaser's Board of Directors from taking, and disclosing to
Purchaser's shareholders, a position contemplated by Rules 14d-9
and 14e-2 promulgated under the Exchange Act with regard to any
tender offer; PROVIDED, FURTHER, that nothing herein shall
prevent Purchaser's Board of Directors from making such
disclosure to Purchaser's shareholders as, in the good faith
judgment of Purchaser's Board of Directors, after consultation
with independent legal counsel, is necessary to comply with its
fiduciary duties to shareholders under applicable law.
6.11 RECAPITALIZATION; REFINANCING OF INTERCOMPANY
DEBT. Prior to the Closing Date, Seller shall take all actions
necessary so that (a) the Existing Shares shall be cancelled and
the Shares shall be issued, substantially on the terms heretofore
disclosed to Purchaser and (b) any debt owed by Radiocoms and any
of its Subsidiaries to Seller and its Affiliates at the Closing
Date (including, without limitation, the EFJ Note) is refinanced
such that, after giving effect to such refinancing and the
issuance of the Preferred Shares in connection therewith, the
aggregate liquidation preference of the Preferred Shares,
together with all debt outstanding of Radiocoms and its
Subsidiaries, in each case at the Closing Date, will not exceed
$22 million. Any Preferred Shares issued to Seller or its
Affiliates shall have the terms and conditions provided in
Exhibit A; PROVIDED, that in no event shall the aggregate
liquidation preference of the Preferred Shares so issued to
Seller in connection with such refinancing exceed the amount of
such indebtedness of Radiocoms and its Subsidiaries to Seller and
its Affiliates prior to such refinancing. For greater certainty,
as of the Closing, all debt so owed by Radiocoms and its
Subsidiaries to Seller and its Affiliates shall be satisfied and
cancelled as of the Closing.
6.12 UPDATES TO DISCLOSURE LETTERS. Each of Seller
and Purchaser shall update the Seller Disclosure Letter and
Purchaser Disclosure Letter from time to time and all
representations and warranties that speak as of the date hereof
shall be updated as of the Closing Date; PROVIDED that no such
update shall be deemed to waive any breaches of the
representation and warranties disclosed as a result of such
updates.
6.13 NON-COMPETE. Seller agrees, as a means to
assure Purchaser obtains the full value of the Shares and not in
exchange for separately bargained-for consideration, that for a
period of three (3) years following the Closing, neither
Securicor plc nor its direct or indirect Subsidiaries (other than
Purchaser and its Subsidiaries) will, anywhere in the world, (i)
sell, manufacture, distribute or otherwise transfer "land mobile
radio" products or (ii) engage in the provision of services
related to the construction or integration of land mobile radio
product systems; PROVIDED, HOWEVER, that this covenant shall
not apply (a) to the extent that any law, regulation or order of
any Governmental Body would be violated thereby, (b) to the
business or operations of Dopra Systems Integration, Ltd.
("Dopra") or Securicor Datatrak, Ltd. ("Datatrak") or Securicor
Cellular Services, Ltd. ("Cellular") or Securicor TrakBak, Ltd.
("TrakBak") as conducted or proposed to be conducted as of the
date hereof or as the reasonable expansion and growth of such
businesses and operations may require in order to retain their
competitiveness in the marketplace. It is understood and agreed
that, if Seller shall sell, transfer or otherwise dispose of
Dopra or Datatrak or Cellular or TrakBak (whether by merger, sale
of stock, sale of all or substantially all of the business and
assets or otherwise) in a transaction with a non-Affiliate, the
provisions of this Section 6.13 shall cease to apply to the
business so sold, transferred or otherwise disposed of.
Notwithstanding the foregoing, to the extent any of the terms of
this Section 6.13 is held to be unenforceable, it is the
intention of the parties that such provision shall be replaced by
any court holding such terms to be unenforceable with another,
enforceable provision that shall as closely as possible
approximate the original, unenforceable term.
6.14 FCC MATTERS.
(a) From and after the date of this Agreement, until
the earlier of the Closing Date or the termination of this
Agreement, Purchaser undertakes and agrees that it will
diligently pursue appeals of the denial by the FCC of any request
by Purchaser or its Affiliates for the modification of any FCC
licenses and will keep Seller informed with respect to any
material developments with respect to such appeals. Purchaser
will copy Seller on any documents delivered by it to the FCC in
connection with any of such appeals and will supply Seller with
copies of any documents received from the FCC with respect to any
of such appeals.
(b) Purchaser and Seller shall cooperate in the
preparation, filing and prosecution of a request to the FCC
seeking a waiver of Section 310(b)(4) of the Communications Act
of 1934, as amended, to permit Purchaser upon Closing to acquire
such FCC licenses as may be agreed by the parties and to
participate in such 220 MHz Band spectrum auctions as may be
conducted by the FCC.
6.15 INDEMNIFICATION; DIRECTORS AND OFFICERS
INSURANCE.
(a) For a period of three years after the Closing
Date, Seller shall, to the extent that it remains the majority
stockholder of Purchaser during such period, cause Purchaser to
maintain an extension of coverage of Purchaser's policy of
directors' and officers' liability insurance maintained by
Purchaser for the benefit of those persons who are covered by
such policy at the time of the Closing with respect to matters
occurring prior to the Closing Date, provided that in no event
shall Purchaser be required to expend more than $100,000 per
annum to maintain such insurance.
(b) Seller further agrees that for a period of six
years after the Closing Date, Seller shall, to the extent that
Seller remains the majority stockholder of Purchaser, (i) cause
the by-laws of Purchaser to continue to contain the provisions
with respect to indemnification which are set forth in such by-
laws as of the date hereof, and (ii) not permit such provisions
to be amended, repealed or otherwise modified in any manner that
would adversely affect the rights thereunder of individuals who
at the Closing Date were directors, officers, employees or agents
of Purchaser, unless such modification is required by applicable
law.
6.16 PENSION SCHEMES. Seller agrees that following
the Closing Date, any employee of Radiocoms as of the Closing
Date who is a participant in any pension scheme of Seller shall
be eligible to participate in the same pension scheme of Seller
that such employee participated in as of the Closing Date subject
to the same terms and conditions of participation (including,
without limitation, the terms of such pension schemes as they may
be amended and applicable laws relating to pensions in England
and Wales) that such employee was subject to on the day that
immediately preceded the Closing Date; PROVIDED, HOWEVER, that
the foregoing shall not preclude Seller from amending or
terminating any of its pension schemes in accordance with the
terms of such pension scheme and the laws of England and Wales.
6.17 TRANSFER OF THE BUSINESS TO RADIOCOMS AND ITS
SUBSIDIARIES. Prior to Closing, Seller shall (i) cause its
Relevant Affiliates, if any, to transfer any and all of their
respective right, title and interest in any parts of, or benefits
of or rights in, the Business currently not held or owned by
Radiocoms or its Subsidiaries to Radiocoms or one of its
Subsidiaries in such manner so as to ensure that Radiocoms and
its Subsidiaries after the Closing will enjoy and have all
rights, benefits, operations and assets of the Business without
any material diminution of the value or utility of any such
rights, benefits, operations and assets and/or (ii) transfer or
cause to be transferred to Radiocoms all of the issued and
outstanding capital stock of its Relevant Affiliates, if any.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
AND SELLER. The obligation of each of Purchaser and Seller to
consummate the transactions contemplated by this Agreement is
subject to the fulfillment, on or prior to the Closing Date of
each of the following conditions (any or all of which may be
waived by Purchaser and Seller in whole or in part to the extent
permitted by applicable Law):
(a) Purchaser shall have obtained all consents and
waivers referred to in Section 7.1(a) of the Purchaser Disclosure
Letter with respect to the transactions contemplated by this
Agreement and the Purchaser Documents;
(b) Seller shall have obtained all consents and
waivers referred to in Section 7.1(b) of the Radiocoms Disclosure
Letter with respect to the transactions contemplated by this
Agreement and the Seller Documents;
(c) No Legal Proceedings shall have been instituted or
threatened or claim or demand made against Seller, Radiocoms or
Purchaser seeking to restrain or prohibit or to obtain damages
with respect to the consummation of any of the Transactions and
there shall not be in effect any Order by Governmental Body of
competent jurisdiction restraining, enjoining or otherwise
prohibiting the consummation of any of the Transactions;
(d) The waiting period under the HSR Act shall have
expired or early termination shall have been granted;
(e) All approvals required to be obtained by Seller,
Purchaser or Midland US from any Governmental Body with respect
to any of the Transactions shall have been obtained;
(f) The Purchaser Stockholders' Meeting shall have
been duly convened and held, and Purchaser shall have obtained
the requisite vote so as to authorize this Agreement, the Midland
Agreement and the consummation of each of the Transactions;
(g) The Other Transactions shall have been consummated
as contemplated in the Midland Agreement, or shall be consummated
simultaneously with the transactions contemplated by this
Agreement; and
(h) Purchaser shall have received the opinion of
Xxxxxxxxxx & Co. Inc. ("Xxxxxxxxxx") on the date on which
Purchaser's Board of Directors voted to approve this Agreement
and the Midland Agreement, and the written opinion of Xxxxxxxxxx,
dated on or prior to the date of the mailing of the Proxy
Statement, that the consideration to be paid by Seller to
Purchaser under this Agreement in respect of the Purchaser Shares
(as well as the consideration to be paid by Seller to Xxxxxxxx
under the Midland Agreement) is fair to Purchaser and its
stockholders from a financial point of view, and such opinion
shall not have been withdrawn or modified in any material
respect.
7.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF
PURCHASER. The obligation of Purchaser to consummate the
transactions contemplated by this Agreement is subject to the
fulfillment, on or prior to the Closing Date, of each of the
following conditions (any or all of which may be waived by
Purchaser in whole or in part to the extent permitted by
applicable Law):
(a) Except for facts, events or changes arising or
occurring between the date hereof and the Closing Date which are
expressly permitted by this Agreement, all representations and
warranties of Seller contained herein shall be true and correct
as of the date hereof; and except for facts, events or changes
arising or occurring between the date hereof and the Closing Date
which are expressly permitted by this Agreement, all
representations and warranties of Seller contained herein
qualified as to materiality shall be true and correct, and the
representations and warranties of Seller contained herein not
qualified as to materiality shall be true and correct in all
material respects, at and as of the Closing Date with the same
effect as though those representations and warranties had been
made again at and as of that time;
(b) Seller shall have performed and complied in all
material respects with all obligations and covenants required by
this Agreement to be performed or complied with by it on or prior
to the Closing Date;
(c) Purchaser shall have been furnished with
certificates (dated the Closing Date and in form and substance
reasonably satisfactory to Purchaser) executed by Seller,
certifying as to the fulfillment of the conditions specified in
Sections 7.2(a) and 7.2(b) hereof;
(d) Certificates representing the Shares shall have
been, or shall at the Closing be, validly delivered and
transferred to the Purchaser, free and clear of any and all
Liens, together with appropriate stock powers executed by Seller;
(e) There shall not have been or occurred any Material
Adverse Change with respect to Radiocoms and its Subsidiaries,
taken as a whole;
(f) Seller shall have delivered to Purchaser a loan
agreement incorporating the terms set forth on Exhibit B hereto
(the "Loan Agreement") to make available to Purchaser $15 million
of financing;
(g) Seller shall have delivered to Purchaser an
agreement incorporating the terms set forth on Exhibit C hereto
(the "Support Services Agreement") to provide certain services to
Radiocoms and its Subsidiaries after the Closing;
(h) The EFJ Note shall have been cancelled; and
(i) Seller shall have executed and delivered to
Purchaser the Registration Rights Agreement (as hereinafter
defined).
7.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER.
The obligations of Seller to consummate the transactions
contemplated by this Agreement are subject to the fulfillment,
prior to or on the Closing Date, of each of the following
conditions (any or all of which may be waived by Seller in whole
or in part to the extent permitted by applicable Law):
(a) Except for facts, events or changes arising or
occurring between the date hereof and the Closing Date which are
expressly permitted by this Agreement, all representations and
warranties of Purchaser contained herein shall be true and
correct as of the date hereof; and except for facts, events or
changes arising or occurring between the date hereof and the
Closing Date which are expressly permitted by this Agreement, all
representations and warranties of Purchaser contained herein
qualified as to materiality shall be true and correct, and the
representations and warranties of Purchaser contained herein not
qualified as to materiality shall be true and correct in all
material respects, at and as of the Closing Date with the same
effect as though those representations and warranties had been
made again at and as of that time;
(b) Purchaser shall have performed and complied in all
material respects with all obligations and covenants required by
this Agreement to be performed or complied with by it on or prior
to the Closing Date;
(c) Seller shall have been furnished with certificates
(dated the Closing Date and in form and substance reasonably
satisfactory to Seller) executed by Purchaser, certifying as to
the fulfillment of the conditions specified in Sections 7.3(a)
and 7.3(b) hereof;
(d) Certificates representing 25,000,000 shares of
Purchaser Common Stock (the Purchaser Shares) shall have been, or
shall at the Closing be, validly delivered to and duly registered
in the name of the Seller, free and clear of any and all Liens;
(e) The Purchaser Shares shall have been approved for
quotation on the Small Cap Market, subject to official notice of
issuance;
(f) Purchaser shall have executed and delivered to
Seller that certain Registration Rights Agreement (the
"Registration Rights Agreement"), in the form of Exhibit D, and
that certain Registration Rights Agreement, dated as of September
23, 1994, among the Company, Xxxxxxxx, RoameR One Holdings, Inc.,
Anglo York Industries, Inc. and Xxxxxx Xxxxx shall have been
terminated;
(g) Purchaser shall have furnished evidence of the due
election and qualification to its Board of Directors of the
persons designated prior to Closing by Seller and the removal or
resignation of any other members of Purchaser's Board of
Directors designated prior to Closing by Seller;
(h) There shall not have been or occurred any Material
Adverse Change with respect to Purchaser or Midland US;
(i) Purchaser shall have entered into a warrant
agreement in favor of Seller substantially on the terms set forth
in Exhibit E hereto (the "Warrant Agreement");
(j) Purchaser shall have at Closing a minimum of 162
Constructed Systems (as that term is defined in Section 5.27(f))
under management pursuant to valid and subsisting management
agreements, including a minimum of 73 Constructed Systems under
Category I management and 26 Constructed Systems under Category
II management by Purchaser pursuant, respectively, to valid and
subsisting Category I and Category II Exclusive Management
Agreements and Rights of First Refusal and valid and subsisting
Option to Purchase Agreements as reflected in Section 5.27(a)(iv)
of the Purchaser Disclosure Letter, which Constructed Systems
shall have been timely and validly constructed at primary
transmitter sites licensed by the FCC pursuant to an order that
is not subject to reconsideration or appeal and for which the
time for the request for any such reconsideration or appeal has
expired;
(k) There shall be no material Legal Proceedings
pending, threatened or reasonably likely to be asserted against
Purchaser or its Subsidiaries in any federal or state court,
agency or other Governmental Body with respect to Purchaser's
performance, including its construction or failure to construct
of any System in accordance with the FCC's rules and regulations
or the terms of any FCC license, under any of its management
agreements or other agreements concerning any 220-222 MHz band
radio system;
(l) Purchaser shall have delivered a valid, binding
and fully executed Termination and Release of that certain Letter
of Understanding entered into on January 28, 1994 by and between
Roamer One, Inc., Xxxxxx Communications, Xxxxx X. Xxxxxx, Xxxxxx
0 Communications Partnership, Xxxxxxxx X. Xxxxxx and NICMAR;
(m) Purchaser shall have delivered a valid, binding
and fully executed Amendment to the Management Agreement and
Options agreement entered into by and between Roamer One, Inc.,
and NICMAR dated January 31, 1994 adding as a system subject to
the management by Roamer One, Inc. and under option to Roamer
One, Inc. the following stations: XXXX000, Xxxx, Xxxxxx and
XXXX000, Xxxxxxx, Xxxxx; and
(n) Seller shall have received from the United Kingdom
Inland Revenue advance clearance under Section 138 of the
Taxation of Chargeable Gains Act of 1992 to the effect that the
consummation of the transactions contemplated by this Agreement
do not give rise to a capital gain on the transfer of the Shares
or the receipt of the Purchaser Shares.
ARTICLE VIII
DOCUMENTS TO BE DELIVERED
8.1 DOCUMENTS TO BE DELIVERED BY SELLER. At the
Closing, Seller shall deliver, or cause to be delivered, to
Purchaser the following:
(a) stock certificates representing the Shares, duly
endorsed in blank or accompanied by a stock transfer power and
with all requisite stock transfer tax stamps attached;
(b) the certificates referred to in Section 7.2(c)
hereof;
(c) the opinion of Messrs. Xxxxxxx Xxxxx, U.K. counsel
to Seller, in form and substance reasonably satisfactory to
Purchaser;
(d) copies of all consents, waivers and approvals
referred to in Section 7.1(a) and (e) hereof, to the extent such
consents, waivers and approvals are required to be obtained by
Seller;
(e) an executed copy of the Loan Agreement;
(f) an executed copy of the Registration Rights
Agreement;
(g) an executed copy of the Support Services
Agreement; and
(h) such other documents as the Purchaser shall
reasonably request.
8.2 DOCUMENTS TO BE DELIVERED BY PURCHASER. At the
Closing, Purchaser shall deliver to the Seller the following:
(a) stock certificates representing the Purchaser
Shares, registered in the name of Seller;
(b) the certificates referred to in Section 7.3(c)
hereof;
(c) the opinion of, Xxxxxxx, Xxxxxxx & Xxxxxx PLL,
counsel to Purchaser, in form and substance reasonably
satisfactory to Seller;
(d) copies of all consents, waivers or approvals
referred to in Section 7.2(a) and (e) to the extent such
consents, waivers or approvals are required to be obtained by
Purchaser;
(e) an executed copy of the Registration Rights
Agreement;
(f) an executed copy of the Warrant Agreement; and
(g) such other documents as Seller shall reasonably
request.
ARTICLE IX
INDEMNIFICATION
9.1 INDEMNIFICATION.
(a) Seller hereby agrees to indemnify and hold
Purchaser, Radiocoms, and their respective directors, officers,
employees, Affiliates, agents, successors and assigns
(collectively, the "Purchaser Indemnified Parties") harmless from
and against:
(i) any and all losses, liabilities, obligations,
damages, costs and expenses based upon, attributable to or
resulting from the failure of any representation or warranty
of Seller hereof to be true and correct in all respects as
of the date made;
(ii) any and all losses, liabilities,
obligations, damages, costs and expenses based upon,
attributable to or resulting from the Excluded Liabilities;
(iii) any and all losses, liabilities,
obligations, damages, costs and expenses based upon,
attributable to or resulting from any breach by Seller of
any covenant of Seller;
(iv) any and all losses, liabilities,
obligations, damages, costs and expenses based upon,
attributable to or resulting from the transfer of the EFJ
Shares and the EFJ Warrant to Radiocoms (including, without
limitation, any Tax liability occurring, on redemption of
the EFJ Shares or their use to redeem the Preferred Shares,
by reason of the tax basis of the EFJ Shares and the EFJ
Warrant being considered to be less than the face amount of
the EFJ Note); and
(v) any and all notices, actions, suits, pro
ceedings, claims, demands, assessments, judgments, costs,
penalties and reasonable expenses, including reasonable
attorneys' and other professionals' fees and disbursements
(collectively, "Expenses") incident to any and all losses,
liabilities, obligations, damages, costs and expenses with
respect to which indemnification is provided hereunder
(collectively, "Losses").
(b) Purchaser hereby agrees to indemnify and hold
Seller and its respective directors, officers, employees,
Affiliates, agents, successors and assigns (collectively, the
"Seller Indemnified Parties") harmless from and against:
(i) any and all Losses based upon, attributable
to or resulting from the failure of any representation or
warranty of the Purchaser to be true and correct in all
respects as of the date made;
(ii) any and all Losses based upon, attributable
to or resulting from any breach by Purchaser of any covenant
of Purchaser;
(iii) any and all Losses based upon, attributable
to or resulting from the failure of the property located at
0000 Xxxx Xxxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000
(the "Site") to comply with any Environmental Law
(including, without limitation, any environmental clean-up
costs, whether such environmental clean-up costs are
incurred by Intek voluntarily or in response to actions by
Governmental Bodies or other Persons); PROVIDED, HOWEVER,
(A) that, if the Site is sold by Purchaser to a third party
in a bona fide transaction within one year following the
date hereof, the amount of such Losses shall be deemed to be
reduced by the amount, if any, by which the net proceeds to
Purchaser upon the sale of the Site exceed the net book
value of the Site as reflected on the Purchaser Financial
Statements, and (B) that, in all other cases, the amount of
such Losses shall be deemed to be reduced by $250,000;
(iv) any and all Losses attributable to the
Olympic Plastics Simplified Employees Pension Plan referred
to in Section 5.17(a) of the Purchaser Disclosure Letter;
and
(v) any and all Expenses incident to the
foregoing.
9.2 LIMITATIONS ON INDEMNIFICATION FOR BREACHES OF
REPRESENTATIONS AND WARRANTIES.
(a) An indemnifying party shall not have any liability
for a breach of a representation or warranty under Section
9.1(a)(i) or (b)(i) hereof unless the aggregate amount of Losses
and Expenses to the indemnified parties finally determined to
arise thereunder based upon, attributable to or resulting from
the failure of any representation or warranty to be true and
correct, exceeds $300,000 (the "Basket") and, in such event, the
indemnifying party shall be required to pay the entire amount of
such Losses and Expenses without regard to the Basket.
(b) Notwithstanding anything contained in this
Agreement to the contrary, (i) the aggregate liability of Seller
and its Affiliates under Section 9.1(a)(i), except for any
liability arising as a result of the failure of Seller's
representations and warranties set forth in Section 4.14 to be
true and correct, shall not exceed $6,000,000 (the "Seller Cap")
and (ii) the aggregate liability of Purchaser and its Affiliates
under Section 9.1(b)(i), except for any liability arising as a
result of the failure of Purchaser's representations and
warranties set forth in Section 5.27 to be true and correct,
shall not exceed $4,000,000 (the "Purchaser Cap").
9.3 INDEMNIFICATION PROCEDURES.
(a) In the event that any Legal Proceedings shall be
instituted or that any claim or demand ("Claim") shall be
asserted by any Person in respect of which payment may be sought
under Section 9.1 hereof (regardless of the Basket referred to
above), the indemnified party shall reasonably and promptly cause
written notice of the assertion of any Claim of which it has
knowledge which is covered by this indemnity to be forwarded to
the indemnifying party. The indemnifying party shall have the
right, at its sole option and expense, to be represented by
counsel of its choice, which must be reasonably satisfactory to
the indemnified party, and to defend against, negotiate, settle
or otherwise deal with any Claim which relates to any Losses
indemnified against hereunder. If the indemnifying party elects
to defend against, negotiate, settle or otherwise deal with any
Claim which relates to any Losses indemnified against hereunder,
it shall within five (5) days (or sooner, if the nature of the
Claim so requires) notify the indemnified party of its intent to
do so. If the indemnifying party elects not to defend against,
negotiate, settle or otherwise deal (as provided herein) with any
Claim which relates to any Losses indemnified against hereunder,
fails to notify the indemnified party of its election as herein
provided or contests its obligation to indemnify the indemnified
party against such Losses under this Agreement, the indemnified
party may defend against, negotiate, settle or otherwise deal
with such Claim; PROVIDED, HOWEVER, that the indemnified party
may not settle such Claim without the consent of the indemnifying
party, which consent will not be unreasonably withheld or
delayed. If the indemnified party defends any Claim, then the
indemnifying party shall reimburse the indemnified party for the
Expenses of defending such Claim upon submission of periodic
bills; PROVIDED, HOWEVER, that, if the indemnifying party
reasonably contests its obligation to indemnify the indemnified
party against such Losses under this Agreement, the indemnifying
party may defer the reimbursement of the periodic bills with
respect to such Losses until such time as it is obligated to make
payment to the indemnified party under Section 9.3(b). If the
indemnifying party shall assume the defense of any Claim, the
indemnified party may participate, at his or its own expense, in
the defense of such Claim; PROVIDED, HOWEVER, that such
indemnified party shall be entitled to participate in any such
defense with separate counsel at the expense of the indemnifying
party if, (i) so requested by the indemnifying party to
participate or (ii) in the reasonable opinion of counsel to the
indemnified party, a conflict or potential conflict exists
between the indemnified party and the indemnifying party that
would make such separate representation advisable; and PROVIDED,
FURTHER, that the indemnifying party shall not be required to pay
for more than one such counsel for all indemnified parties in
connection with any Claim. The parties hereto agree to cooperate
fully with each other in connection with the defense, negotiation
or settlement of any such Claim.
(b) After any final judgment or award shall have been
rendered by a court, arbitration board or administrative agency
of competent jurisdiction and the expiration of the time in which
to appeal therefrom, or a settlement shall have been consummated,
or the indemnified party and the indemnifying party shall have
arrived at a mutually binding agreement with respect to a Claim
hereunder, the indemnified party shall forward to the
indemnifying party notice of any sums due and owing by the
indemnifying party pursuant to this Agreement with respect to
such matter and the indemnifying party shall be required to pay
all of the sums so due and owing to the indemnified party in
accordance with Section 9.3(d).
(c) The failure of the indemnified party to give
reasonably prompt notice of any Claim shall not release, waive or
otherwise affect the indemnifying party's obligations with
respect thereto except to the extent that the indemnifying party
can demonstrate actual loss and prejudice as a result of such
failure.
(d) Except as set forth in Section 9.3(e), all
payments of Claims to an indemnified party may be made by wire
transfer of immediately available funds within 10 business days
after the date of the notice of sums due and owing provided for
in Section 9.3(b). In addition, except as set forth in Section
9.3(e), Seller or Purchaser may elect, at its option, to pay any
Claims to an indemnified party in shares of Purchaser Common
Stock, and the number of shares of Purchaser Common Stock to be
transferred in satisfaction of such liabilities, and the terms of
any such transfer, shall be determined as set forth in Sections
9.3(f). In the event that Purchaser is the indemnifying party
and Seller is the indemnified party with respect to any Claim,
the amount of such Claim shall be increased as appropriate to
reflect the percentage of Purchaser's issued and outstanding
capital stock that is owned beneficially or of record by Seller
as of the date of the notice delivered pursuant to Section 9.3(b)
with respect to such Claim. As an example, if Purchaser must
indemnify Seller for a Claim otherwise amounting to $100,000 and
Seller owns 60% of Purchaser's issued and outstanding capital
stock at such time, the amount of Seller's Claim shall be deemed
to be increased to $250,000 (the amount which, when 60% of its
value is subtracted, equals the original amount of the Claim).
(e) Notwithstanding any other provision of this
Agreement to the contrary, any liability of Seller under Section
9.1(a)(i), up to the Seller Cap, and any liability of Purchaser
under Section 9.1(b)(i), up to the Purchaser Cap, shall be
payable solely in shares of Purchaser Common Stock. The number
of shares of Purchaser Common Stock to be transferred with
respect to any such liability being paid in shares of Purchaser
Common Stock shall be determined as set forth in Section 9.3(f).
(f) In the event that Seller or Purchaser, in
accordance with Section 9.3(d), elects or is required to pay any
liabilities owing by it in shares of Purchaser Common Stock, the
number of shares to be transferred with respect to any such
liability shall be determined by dividing the amount of such
liability (as such amount may be adjusted pursuant to Section
9.3(d)) by the Applicable Average Share Value. The "Applicable
Average Share Value" shall be equal to the average of the Daily
Closing Prices for each of the ten Business Days immediately
preceding the date of the notice provided for in Section 9.3(b);
and the "Daily Closing Price" for each such day shall be average
of the last bid and ask price of Purchaser Common Stock quoted on
such day on the Small Cap Market (or such exchange or quotation
system as shall report the trading prices of Purchaser Common
Stock at the relevant time).
(g) Purchaser covenants and agrees that, in the event
it issues any shares of Purchaser Common Stock to Seller in
payment of any Claim of Seller ("Additional Shares") hereunder,
it will take such actions as may be necessary to assure that,
upon issuance, such Additional Shares (i) will be duly
authorized, validly issued, fully paid and non-assessable and
free of preemptive rights, and will be registered on the stock
certificate books and stock transfer ledgers of Purchaser solely
in the name of Seller and (ii) will be approved for quotation on
the Small Cap Market, subject to official notice of issuance.
Seller will receive good and marketable title to any Additional
Shares within 10 business days after the date of the notice
provided for in Section 9.3(b), free and clear of any and all
Liens.
(h) Seller covenants and agrees that, in the event it
transfers any shares of Purchaser Common Stock to Purchaser in
payment of any Claims hereunder ("Adjustment Shares"), it will
take such actions as may be reasonably necessary to assure that,
upon such transfer, Seller shall have delivered to Purchaser good
and marketable title to such Adjustment Shares, free and clear of
any and all Liens. Any such transfers of Adjustment Shares will
be made within 10 business days after the date of the notice
provided for in Section 9.3(b).
ARTICLE X
MISCELLANEOUS
10.1 CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms shall have the meanings specified
in this Section 10.1:
" AFFILIATE" means, with respect to any Person, any
other Person controlling, controlled by or under common control
with such Person. Roamer One Holdings Inc., Xxxxxxxx Xxxxxx and
their respective affiliates and associates shall be deemed to be
Affiliates of Purchaser for the purposes of this Agreement.
" AFFILIATED GROUP" means, with respect to any entity,
a group of entities required or permitted to file consolidated,
combined or unitary Tax Returns, including, without limitation,
Chapter IV of Part X of the Income and Corporation Xxxxx Xxx
0000.
" BASKET" shall have the meaning set forth in Section
9.2.
" BUSINESS" means any and all (a) operations, assets,
rights or liabilities of Radiocoms and its Subsidiaries
whatsoever and (b) operations, assets and rights or liabilities
of other of Seller's Affiliates, other than Dopra, Datatrak,
Cellular and TrakBak, related directly and principally to the
business of manufacturing and selling land mobile radio
equipment.
" BUSINESS DAY" means any day of the year on which
national banking institutions in New York and London are open to
the public for conducting business and are not required or
authorized to close.
" CLOSING" shall have the meaning set forth in Section
3.1.
" CLOSING DATE" shall have the meaning set forth in
Section 3.1 hereof.
" CODE" shall mean the Internal Revenue Code of 1986,
as amended.
" COMMITTEE" has the meaning set forth in Section 6.2.
" COMMUNICATIONS ACT" has the meaning set forth in
Section 5.27(h).
" CONTRACT" means any contract, agreement, indenture,
note, bond, loan, instrument, lease, commitment or other
arrangement or agreement.
" DTI" means the Department of Trade and Industry.
" Efj shares" shall have the meaning set forth in the
recitals to this Agreement.
" ENVIRONMENTAL LAW" means any applicable federal,
state or local statute, law ordinance, rule, regulation, code,
license, permit, authorization, approval, consent, order,
judgment, decrees, injunction, directive, requirement or
agreement with any Governmental Body, now existing, relating to:
(a) the protection, preservation or restoration of the
environment (including, without limitation, air water vapor,
surface water, groundwater, drinking water supply, surface land,
subsurface land, plant and animal life or any other natural
resource), or to human health or safety, or (b) the exposure to,
or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production,
release or disposal of Hazardous Substances, in each case as
amended. The term Environmental Law includes, without
limitation, (a) the following statutes, each as amended: (i) the
Federal Clean Air Act; (ii) the Federal Clean Water Act; (iii)
the Federal Resource Conservation and Recovery Act of 1976
("RCRA"); (iv) the Federal Comprehensive Environmental Response
Compensation and Liability Act of 1980 ("CERCLA"); (v) the
Federal Toxic Substances Control Act; (vi) the Federal
Occupational Safety and Health Act of 1970; (vii) the Federal
Safe Drinking Water Act; (viii) the Federal Insecticide,
Fungicide and Rodenticide Act; (ix) the California Hazardous
Waste Control Law; (x) the California Hazardous Substance Account
Act; (xi) the Xxxxxx-Cologne Water Quality Control Act; and (xii)
the California Air Pollution Control Law; and (b) any common law
or equitable doctrine (including, without limitation, injunctive
relief and tort doctrines such as negligence, nuisance, trespass
and strict liability) that may impose liability or obligations
for injuries or damages due to, or threatened as a result of, the
presence of or exposure to any Hazardous Substance.
" EXCLUDED LIABILITIES" means any and all liabilities
of Radiocoms and its Subsidiaries or Affiliates not directly
related to the Business, including, without limitation:
(a) any and all Tax liabilities of Radiocoms and its
Subsidiaries attributable to any asset, right, liability or
operation of Securicor plc or its Affiliates (other than
Radiocoms and its Subsidiaries) that are not included in the
Business (including, without limitation, liabilities arising from
any Tax Sharing Agreement (except to the extent attributable to
income, assets or liabilities of the Business) and any liability
for value-added Taxes arising from activities that are not part
of the Business);
(b) any and all liabilities and obligations related to
employees of Radiocoms or any of its Subsidiaries other than
those employees listed on Section 4.17(d) of the Radiocoms
Disclosure Letter;
(c) all liabilities of Radiocoms and its Subsidiaries
to Seller and its Affiliates except in respect of the Preferred
Shares;
(d) any and all Tax liabilities of Radiocoms and its
Subsidiaries arising as a result of the provisions of sections 94
or 582 of the Income and Corporation Taxes Xxx 0000 or sections
178 or 179 of the Taxation of Chargeable Gains Xxx 0000 by virtue
of or in consequence of the entering into or performance of this
Agreement, including, without limitation, Tax liabilities arising
from the transfer of shares of capital stock or other assets to
Radiocoms to ensure that Radiocoms owns all assets related to the
Business as of the Closing Date; and
(e) any Tax liability of Radiocoms and its Sub
sidiaries arising as a result of the denial of a deduction for
interest accrued on any intercompany indebtedness which is
refinanced in accordance with Section 6.11 of this Agreement.
" EXPENSES" shall have the meaning set forth in Section
9.1(a).
" FCC" means the Federal Communications Commission.
" GAAP" means, with respect to financial or accounting
information concerning any Person, generally accepted accounting
principles as of the date hereof in the United States.
" GOVERNMENTAL BODY" means any government or govern
mental or regulatory body thereof, or political subdivision
thereof, whether federal, state, local or foreign, or any agency,
instrumentality or authority thereof, or any court or arbitrator
(public or private).
" HAZARDOUS SUBSTANCE" means any substance, whether
liquid, solid or gas, listed, defined, designated or classified
as hazardous, toxic, radioactive or dangerous, under any
applicable Environmental Law, whether by type or by quantity.
Hazardous Substance includes, without limitation, (aa) any
"hazardous substance" as defined in CERCLA, (bb) any "hazardous
waste" as defined in RCRA, and (cc) any toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous
waste, special waste or petroleum or any derivative or by-product
thereof, radon, radioactive material, friable asbestos, asbestos
containing material releasing friable asbestos, urea formaldehyde
foam insulation, lead and polychlorinated biphenyls ("PCBs").
" HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976.
" KNOWLEDGE" means, with respect to any Person, the
actual or constructive knowledge of such Person and, in the case
of a corporation, the actual or constructive knowledge of its
executive officers and directors, after reasonable investigation
(except as set forth in Section 5.21); PROVIDED, HOWEVER, that
with respect to any representation or warranty of Seller
concerning EFJ which is qualified as to knowledge, "knowledge"
means the actual knowledge of Seller's executive officers and
directors without any independent investigation.
" LAW" means any federal, state, local or foreign law
(including common law), statute, code, ordinance, rule, regu
lation or other requirement.
" LEGAL PROCEEDING" means any judicial, administrative
or arbitral actions, suits, proceedings (public or private),
claims or governmental proceedings.
" MIDLAND AGREEMENT" shall have the meaning set forth
in the recitals to this Agreement.
" LIEN" means any lien, pledge, mortgage, deed of
trust, security interest, claim, lease, charge, option, right of
first refusal, easement, servitude, transfer restriction under
any shareholder or similar agreement, encumbrance or any other
restriction or limitation whatsoever.
" LOAN AGREEMENT" has the meaning set forth in Section
7.2(f).
" LOSSES" shall have the meaning set forth in Section
9.1(a).
" MATERIAL ADVERSE CHANGE" means, with respect to any
Person or the Business, any material adverse change in the
business, properties, results of operations, condition (financial
or otherwise) of such Person, it being presumed that any such
change which results in the decrease of the net asset value of a
Person or the Business by 10% or more constitutes a Material
Adverse Change.
" MATERIAL ADVERSE EFFECT" means any effect which has
resulted in, or could be reasonably likely to result in, a
Material Adverse Change.
" MIDLAND US" shall have the meaning set forth in the
recitals to this Agreement.
" ORDER" means any order, injunction, judgment, decree,
ruling, writ, assessment or arbitration award.
" OTHER TRANSACTIONS" shall have the meaning set forth
in the recitals to this Agreement.
" PERMITS" means any approvals, authorizations,
consents, licenses, permits or certificates.
" PERMITTED EXCEPTIONS" means (i) all defects,
exceptions, restrictions, easements, rights of way and
encumbrances disclosed in policies of title insurance which have
been made available to Purchaser or Seller, as applicable; (ii)
statutory liens for current taxes, assessments or other
governmental charges not yet delinquent or the amount or validity
of which is being contested in good faith by appropriate
proceedings, provided an appropriate reserve is established
therefor; (iii) mechanics', carriers', workers', repairers' and
similar Liens arising or incurred in the ordinary course of
business that are not material to the business, operations and
financial condition of the property so encumbered or owner
thereof; (iv) zoning, entitlement and other land use and
environmental regulations by any Governmental Body, provided that
such regulations have not been violated; and (v) such other
imperfections in title, charges, easements, restrictions and
encumbrances which do not detract more than 10% from the value of
or materially interfere with the present use of any property
subject thereto or affected thereby.
" PERSON" means any individual, corporation, part
nership, firm, joint venture, association, joint-stock company,
trust, unincorporated organization, Governmental Body or other
entity.
" PURCHASER" shall have the meaning set forth in the
recitals to this Agreement.
" PURCHASER DISCLOSURE LETTER" shall have the meaning
set forth in the Section 5.4(a).
" PURCHASER SHARES" shall have the meaning set forth in
Section 2.1.
" PURCHASER STOCKHOLDERS' MEETING" shall have the
meaning ascribed thereto in Section 6.3(b).
" RADIOCOMS" shall have the meaning set forth in the
recitals to this Agreement.
" RADIOCOMS DISCLOSURE LETTER" shall have the meaning
set forth in Section 4.4(a).
" RELEASE" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, or
leaching into the indoor or outdoor environment, or into or out
of any property.
" RELEVANT AFFILIATE" shall have the meaning set forth
in Section 4.4(a).
" REMEDIAL ACTION" means all actions to (x) clean up,
remove, treat or in any other way address any Hazardous Material;
(y) prevent the Release of any Hazardous Material so it does not
endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; or (z) perform pre-remedial
studies and investigations or post-remedial monitoring and care.
" SELLER" shall have the meaning set forth in the
recitals to this Agreement.
" SHARES" shall have the meaning set forth in the
recitals to this Agreement.
" XXXXXXXX" shall have the meaning set forth in the
recitals to this Agreement.
" SUBSIDIARY" means any other Person of which a
majority of the outstanding voting securities or other voting
equity interests are owned, directly or indirectly, by such
Person.
" TAXES" means (i) all federal, state, local or foreign
taxes, charges, fees, imposts, levies or other assessments,
including, without limitation, all net income, gross receipts,
capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license,
withholding, payroll, employment, social security, national
insurance, unemployment, excise, severance, stamp, occupation,
property, corporation and estimated taxes, customs duties, fees,
assessments and charges of any kind whatsoever; (ii) all
interest, penalties, fines, additions to tax or additional
amounts imposed by any taxing authority in connection with any
item described in clause (i); and (iii) any transferee liability
in respect of any items described in clauses (i) and/or (ii).
" TAX RETURN" means all returns, declarations, reports,
estimates, information returns and statements required to be
filed in respect of any Taxes.
" TAX SHARING AGREEMENT" means an agreement (whether or
not in writing) pursuant to which Tax losses of one entity are
made available to another entity of the "group" or Affiliates for
purposes of Taxes.
" TRANSACTIONS" shall have the meaning set forth in the
recitals to this Agreement.
10.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The parties hereto hereby agree that the representations and
warranties of Seller and of Purchaser shall survive the execution
and delivery of this Agreement, and the Closing hereunder,
regardless of any investigation made by the parties hereto, for a
period of eighteen months following the Closing. Any claims or
actions with respect to any representation or warranty that
survives the execution and delivery of this Agreement and the
Closing hereunder shall terminate unless, within eighteen months
after the Closing Date, written notice of such claims is given to
the indemnifying party or such actions are commenced.
10.3 EXPENSES. Except as otherwise provided in this
Agreement, Seller and Purchaser shall each bear its own expenses
incurred in connection with the negotiation and execution of this
Agreement and each other agreement, document and instrument
contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.
10.4 FURTHER ASSURANCES. Seller and Purchaser each
agrees to execute and deliver such other documents or agreements
and to take such other action as may be reasonably necessary or
desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.
10.5 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This
Agreement (including the exhibits hereto), the Radiocoms Disclos
ure Letter and the Purchaser Disclosure Letter represent the
entire understanding and agreement between the parties hereto
with respect to the subject matter hereof and can be amended,
supplemented or changed, and any provision hereof can be waived,
only by written instrument making specific reference to this
Agreement signed by the party against whom enforcement of any
such amendment, supplement, modification or waiver is sought. No
information disclosed in any Section of the Radiocoms Disclosure
Letter or Purchaser Disclosure Letter shall be deemed to have
been disclosed for purposes of any other Section without being
specifically cross-referenced in such Section. No action taken
pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance
with any representation, warranty, covenant or agreement
contained herein. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed
as a further or continuing waiver of such breach or as a waiver
of any other or subsequent breach. No failure on the part of any
party to exercise, and no delay in exercising, any right, power
or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by
such party preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other
remedies provided by Law.
10.6 GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the Laws of the
State of New York (without application of its principles of
conflicts of laws).
10.7 TABLE OF CONTENTS AND HEADINGS. The table of
contents and section headings of this Agreement are for reference
purposes only and are to be given no effect in the construction
or interpretation of this Agreement.
10.8 NOTICES. All notices and other communications
under this Agreement shall be in writing and shall be deemed
given when delivered personally or mailed by certified mail,
return receipt requested, to the parties (and may also be
transmitted by facsimile to the Persons receiving copies thereof)
at the following addresses (or to such other address as a party
may have specified by notice given to the other party pursuant to
this provision):
If to Seller, to:
Securicor Communications Ltd.
Xxxxxx Xxxx Xxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxx, XX0 0XX Xxxxxxx
Attn: Xx. Xx Xxxxx
Telecopier: (000 00) 000-000-0000
With a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxxx, Esq.
Telecopier: (000) 000-0000
If to Purchaser, to:
Intek Diversified Corporation
000 Xxxx 000xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telecopier: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxx PLL
One Cleveland Center, 20th Floor
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
Telecopier: (000) 000-0000
10.9 SEVERABILITY. If any provision of this
Agreement is invalid or unenforceable, the balance of this
Agreement shall remain in effect.
10.10 BINDING EFFECT; ASSIGNMENT. This Agreement
shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. Nothing in
this Agreement shall create or be deemed to create any third
party beneficiary rights in any person or entity not a party to
this Agreement except as provided below. No assignment of this
Agreement or of any rights or obligations hereunder may be made
by either Seller or Purchaser (by operation of Law or otherwise)
without the prior written consent of the other parties hereto and
any attempted assignment without the required consents shall be
void.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first written above.
INTEK DIVERSIFIED CORPORATION
By:_________________________________
Name:
Title:
SECURICOR COMMUNICATIONS LIMITED
By:_________________________________
Name:
Title:
Each of the undersigned hereby agrees that he will not
unreasonably withhold his consent to any action as to which the
consent of the Committee (as defined in the foregoing Agreement)
is required under Sections 6.2(a) or 6.2(b) of the foregoing
Agreement.
________________________________
Xx Xxxxx
________________________________
Xxxx Xxxxxxxx
________________________________
Xxxxxxxx Xxxxxx
Security Services plc, a corporation formed under the
laws of England and Wales and the owner of 100% of the issued and
outstanding capital stock of Securicor Communications Limited
("SCL") hereby guarantees the obligations of SCL under Section
9.1(a) of the foregoing Stock Purchase Agreement and agrees to
cause SCL to provide the financing contemplated under Section
7.2(f) thereof.
SECURITY SERVICES PLC
By: ________________________________
Name:
Title:
TABLE OF CONTENTS
-----------------------------
Page
------
ARTICLE I - SALE AND PURCHASE OF SHARES............................2
1.1 Sale and Purchase of Shares..........................2
ARTICLE II - PURCHASE PRICE AND PAYMENT............................2
2.1 Amount and Payment of Purchase Price.................2
ARTICLE III - CLOSING AND TERMINATION..............................3
3.1 Closing Date.........................................3
3.2 Termination of Agreement.............................3
3.3 Procedure Upon Termination...........................4
3.4 Effect of Termination................................5
3.5 Expense Reimbursement................................5
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF SELLER..............6
4.1 Organization and Good Standing.......................6
4.2 Authorization of Agreement...........................6
4.3 Capitalization.......................................7
4.4 Subsidiaries.........................................8
4.5 Corporate Records....................................9
4.6 Conflicts; Consents of Third Parties.................9
4.7 Ownership and Transfer of Shares; Ownership of EFJ
Shares and EFJ Warrant.......................10
4.8 Financial Statements.................................11
4.9 No Undisclosed Liabilities...........................12
4.10 Absence of Certain Developments.....................12
4.11 Taxes .............................................15
4.12 Real Property.......................................18
4.13 Tangible Personal Property..........................20
4.14 Intangible Property.................................22
4.15 Material Contracts..................................23
4.16 Employee Benefits...................................24
4.17 Labor .............................................29
4.18 Litigation..........................................30
4.19 Compliance with Laws................................31
4.20 Environmental Matters...............................32
4.21 Insurance...........................................33
4.22 Related Party Transactions..........................34
4.23 Financial Advisors..................................34
4.24 Claims to Property..................................34
4.25 Licenses; Permits; Authorizations...................35
4.26 Investment in Purchaser Shares......................35
4.27 Investments in Purchaser............................36
4.28 Accounts Receivable.................................37
4.29 Accounts Payable....................................37
4.30 Inventory...........................................37
4.31 Products............................................37
4.32 No Misrepresentation................................37
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF PURCHASER............38
5.1 Organization and Good Standing.......................38
5.2 Authorization of Agreements..........................38
5.3 Capitalization.......................................39
5.4 Subsidiaries.........................................40
5.5 Corporate Records....................................41
5.6 Conflicts; Consents of Third Parties.................41
5.7 Issuance of Purchaser Shares.........................42
5.8 Financial Statements.................................42
5.9 No Undisclosed Liabilities...........................43
5.10 Periodic SEC Filings................................43
5.11 Absence of Certain Developments.....................44
5.12 Taxes .............................................46
5.13 Real Property.......................................49
5.14 Tangible Personal Property..........................51
5.15 Intangible Property.................................52
5.16 Material Contracts..................................53
5.17 Employee Benefits...................................55
5.18 Labor .............................................59
5.19 Litigation..........................................60
5.20 Compliance with Laws................................60
5.21 Environmental Matters...............................61
5.22 Insurance...........................................62
5.23 Related Party Transactions..........................63
5.24 Financial Advisors..................................63
5.25 Claims to Property..................................63
5.26 Licenses; Permits; Authorizations...................64
5.27 FCC Matters.........................................64
5.28 Investment in Shares................................68
5.29 General Partnerships................................69
5.30 No Misrepresentation................................70
ARTICLE VI - COVENANTS.............................................70
6.1 Access to Information................................70
6.2 Conduct of Purchaser's and Radiocoms's Respective
Businesses Pending the Closing...............71
6.3 Consents and Approvals...............................75
6.4 Filings with Governmental Bodies.....................76
6.5 Other Actions........................................77
6.6 Preservation of Records..............................77
6.7 Publicity............................................77
6.8 Agreements with Respect to Other Transactions........78
6.9 Tax and Accounting Matters...........................78
6.10 No Solicitation.....................................79
6.11 Recapitalization; Refinancing of Intercompany Debt
............................................80
6.12 Updates to Disclosure Letters.......................80
6.13 Non-Compete.........................................81
6.14 FCC Matters.........................................81
6.15 Indemnification; Directors and Officers Insurance...82
6.16 Pension Schemes.....................................82
6.17 Transfer of the Business to Radiocoms and Its
Subsidiaries.................................82
ARTICLE VII - CONDITIONS TO CLOSING................................83
7.1 Conditions Precedent to Obligations of Purchaser and
Seller.......................................83
7.2 Conditions Precedent to Obligations of Purchaser.....84
7.3 Conditions Precedent to Obligations of Seller........85
ARTICLE VIII - DOCUMENTS TO BE DELIVERED...........................87
8.1 Documents to be Delivered by Seller..................87
8.2 Documents to be Delivered by Purchaser...............88
ARTICLE IX - INDEMNIFICATION.......................................88
9.1 Indemnification......................................88
9.2 Limitations on Indemnification for Breaches of
Representations and Warranties...............90
9.3 Indemnification Procedures...........................90
ARTICLE X -
MISCELLANEOUS.............................................93
10.1 Certain Definitions.................................93
10.2 Survival of Representations and Warranties..........100
10.3 Expenses............................................100
10.4 Further Assurances..................................100
10.5 Entire Agreement; Amendments and Waivers............100
10.6 Governing Law.......................................101
10.7 Table of Contents and Headings......................101
10.8 Notices.............................................101
10.9 Severability........................................102
10.10 Binding Effect; Assignment.........................102
EXHIBITS
A Term Sheet for Redeemable Preference Stock
B Term Sheet for Delayed Drawdown Senior Subordinated
Note
C Term Sheet for Support Services Agreement
D Form of Registration Rights Agreement
E Term Sheet for Warrants
STOCK PURCHASE AGREEMENT
BETWEEN
INTEK DIVERSIFIED CORPORATION
AND
SECURICOR COMMUNICATIONS LIMITED
Dated as of June 18, 1996
