EXHIBIT 10.25
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") is entered into as of
November 3, 2004, by and between eLinear, Inc., a Delaware corporation
("BUYER"), and RadioShack Corporation, a Delaware corporation (the "SELLER"),
the sole shareholder of TanSeco Systems, Inc. a Delaware corporation ("TARGET").
R E C I T A L S
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A. Seller owns all of the issued and outstanding shares of capital stock of
Target (collectively, the "TARGET STOCK"), consisting in the aggregate of
1,000 shares of common stock, $1.00 par value, of Target; and
B. Seller desires to sell the Target Stock to the Buyer, and Buyer desires to
purchase the Target Stock, for the consideration and upon the terms and
subject to the conditions set forth herein (the "Acquisition").
A G R E E M E N T
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Based on the recitals set forth above and the promises contained herein,
the parties agree as follows:
ARTICLE 1
DEFINITIONS
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Terms defined in this Article and used in this Agreement shall have the
respective meanings hereinafter specified.
"1933 ACT" means the Securities Act of 1933, as amended.
"1934 ACT" means the Securities Exchange Act of 1934, as amended.
"AFFILIATE" means, with respect to a specified Person, a Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Person specified.
"LIEN" means any mortgage, deed of trust, lien, pledge, adverse claim,
charge, security interest or encumbrance of any nature whatsoever upon or
relating to either real or personal property, but shall exclude ordinary utility
and other similar easements of record that do not materially interfere with the
use of real property.
"PERSON" means any individual, partnership, joint venture, limited
liability company, corporation, trust, judicial body, unincorporated
organization, entity or governmental authority, or any department, agency, or
political subdivision thereof.
"TAXES" mean any and all federal, state, local, provincial, foreign and
other taxes, levies, fees, imposts, duties and charges of whatever kind
(including any interest, penalties or additions to the tax imposed in connection
therewith or with respect thereto), whether or not imposed on Target, including,
without limitation, taxes imposed on, or measured by, income, franchise, profits
or gross receipts, and
also ad valorem, value added, sales, use, service, real or personal property,
capital stock, license, payroll, withholding, employment, social security,
unemployment compensation, information reporting and excise taxes.
"TAX RETURN" means any returns, reports, information statements and other
documentation (including any additional or supporting material) filed or
maintained, or required to be filed or maintained, in connection with the
calculation, determination, assessment or collection of any Tax and shall
include any amended returns required as a result of examination adjustments made
by the Internal Revenue Service or other tax authority.
ARTICLE 2
PURCHASE AND SALE OF THE TARGET STOCK
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2.1 Purchase and Sale of the Target Stock. Upon the terms and subject
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to the conditions contained herein, and on the basis of the representations,
warranties and agreements set forth herein, Seller shall sell, convey, transfer,
assign and deliver to Buyer the Target Stock for a purchase price of $750,000
(the "PURCHASE PRICE"). At the Closing, as consideration for the purchase and
sale of the Target Stock, Buyer shall pay the Purchase Price to the Seller in
immediately available funds.
ARTICLE 3
CLOSING
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3.1 Closing. The consummation of the transactions provided for herein
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(the "CLOSING") shall take place at the offices of Seller located at 000
Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxxx, Xxxxx 00000 concurrently with the
execution of this Agreement. The time and date of the Closing are referred to
herein as the "CLOSING DATE."
3.2 Seller's Deliveries at Closing. At the Closing, Seller shall
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deliver, or cause to be delivered, to Buyer the following items:
(a) Stock Certificate. Seller shall deliver the certificate(s)
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representing the Target Stock, duly endorsed in blank or accompanied by stock
powers duly executed in blank, and with any required transfer stamps, acquired
at Seller's expense, affixed.
(b) Good Standing Certificate. A Certificate, dated within ten
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(10) business days prior to the Closing Date, from the appropriate Person in the
State of Delaware evidencing that Target is existing as a corporation and in
good standing under the laws of the State of Delaware.
(c) Related Agreements. Duly executed copies of (i) a Transition
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Agreement between Seller and Target providing for the temporary provision of
certain transition services by Seller to Target (the "TRANSITION AGREEMENT"), in
the form attached hereto as Exhibit A; and (ii) the Service Agreement providing
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for Target to provide certain services to the Seller (the "SERVICE AGREEMENT"),
in the form attached hereto as Exhibit B. The Transition Agreement and the
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Service Agreement are referred to collectively herein as the "RELATED
AGREEMENTS."
(d) Transfer Agreements. Duly executed copies of (i) a xxxx of
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sale providing the transfer of assets, including certain telephone numbers
utilized by Target (the "TELEPHONE NUMBERS"), from Seller to Target ("XXXX OF
SALE") in the form attached hereto as Exhibit C; and (ii) an Assignment and
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Assumption Agreement providing for the assignment by Seller to Target of certain
of its contracts in the name of Tandy Security Systems with respect to Target's
operations ("ASSIGNMENT AND ASSUMPTION AGREEMENT") in the form attached hereto
as Exhibit D.
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(e) Resignations. Duly executed resignations, dated as of the
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Closing Date, of the directors and officers of Target (if required by Buyer).
(f) Termination Agreement. A duly executed copy of a Termination
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Agreement, between Seller and Target, effective immediately prior to Closing,
terminating that certain Administrative and Operational Services Agreement
between Seller and the Company.
(g) Other. Such other instruments, documents or information that
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Buyer reasonably requests in connection herewith and the transactions
contemplated hereby, in customary form and substance.
3.3 Buyer's Deliveries and Obligations at Closing. At the Closing,
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Buyer shall deliver the following items to Seller:
(a) Purchase Price. Payment of the Purchase Price by wire or
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electronic transfer in immediately available funds to such account as shall be
specified by the Seller.
(b) Agreements. Duly executed copy of the Service Agreement and
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the Assignment and Assumption Agreement.
(c) Other. Such other instruments, documents or information that
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Seller reasonably requests in connection herewith and the transactions
contemplated hereby, in customary form and substance.
3.4 Employees. Seller shall terminate, effective as of the date of
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this Agreement, the employment of each of the employees set forth on Schedule
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3.4 of this Agreement (the "TRANSFERRED EMPLOYEES"). Buyer shall offer to
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employ (or cause Target to offer to employ) each of the Transferred Employees at
a base salary or hourly rate not less than the base salary or hourly rate then
applicable to such Transferred Employee. Seller shall pay each Transferred
Employee his or her accrued but unpaid vacation as of the termination date.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
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To induce Seller to enter into this Agreement and the Related Agreements
and to consummate the transactions contemplated hereby and thereby, Buyer, as of
the date hereof, makes to Seller the representations and warranties set forth in
this Article.
4.1 Organization and Good Standing. Buyer (i) is a corporation
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organized, validly existing and in good standing under the laws of the State of
Delaware, (ii) has all requisite power and authority now to own and operate its
properties and to carry on its business as now conducted, and (iii) is
authorized to do business and is in good standing as a foreign corporation in
each jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary and the failure to so qualify
would not have a material adverse effect on Buyer, as applicable.
4.2 Power and Authority; Validity and Authorization. Buyer has full
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requisite power and authority to execute, deliver and perform this Agreement and
the Related Agreements and the other instruments called for by this Agreement to
which Buyer is a party. This Agreement and the Related Agreements have been
duly executed and delivered by Buyer and constitute the legal, valid and binding
obligations of Buyer, enforceable against Buyer in accordance with their terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting enforcement of
creditors' rights generally and by general principles of equity (whether applied
in a proceeding at law or in equity).
4.3 No Conflict. The execution, delivery and performance of this
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Agreement and the Related Agreements and the consummation of the transactions
contemplated hereby and thereby will not result in (i) any violation of the
terms of and will not contravene or conflict with the Certificate of
Incorporation or Bylaws of Buyer, (ii) any violation of any statute, regulation,
rule, judgment, order, decree, stipulation, injunction, charge, or other
restriction of any government, governmental agency or court to which Buyer is
subject, or (iii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
contract lease sublease, license, sublicense, franchise, permit, indenture,
agreement or mortgage for borrowed money, instrument of indebtedness, security
interest, or other arrangement to which the Buyer is a party or by which it is
bound or to which any of its assets is subject.
4.4 No Brokers Fees; No Commissions. All negotiations relative hereto
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and the transactions contemplated hereby have been carried on by Buyer directly
with Seller without any act by Buyer that would give rise to any claim against
Seller or its Affiliates for a brokerage commission, finder's fee or other
similar payment.
4.5 Compliance with Laws; Permits. Buyer is not, and has at all times
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since January 1, 2004 not been, in violation of any applicable statute, rule,
regulation, order, judgment, writ, decree or restriction in respect of the
conduct of its business or the ownership of its properties which violation could
materially and adversely affect the current business, assets, liabilities,
financial condition or operations of Buyer. Other than those of a routine or
minor nature, the absence of which would not have a material adverse effect on
Buyer, Buyer has all franchises, permits, licenses and any similar authority
necessary for the conduct of its business as now being conducted by it.
4.6 Purchase of Target Stock Entirely for Investment. Buyer is
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acquiring the Target Stock for investment purposes, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof in
violation of the 1933 Act Buyer has no present intention of selling, granting
any participation in, or otherwise distributing the shares of the Target Stock
otherwise than pursuant to an effective registration statement under the 1933
Act or in a transaction exempt from the registration requirements under the 1933
Act and applicable state securities laws. Buyer does not have any contract,
undertaking, agreement or arrangement with any Person to sell, transfer or grant
participations to such Person or to any third Person, with respect to any of the
shares of the Target Stock. Buyer is an "accredited investor," as such term is
defined in Rule 501(a) promulgated under the 0000 Xxx.
4.7 Buyer Receipt of Information. Buyer has received all the
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information it has requested from Target, Seller and other Persons and has
received all the information that it considers necessary or appropriate for
deciding whether to consummate the transactions described herein and to accept
the shares of Target Stock. Buyer has had an opportunity to ask questions of
and to receive answers from Target, Seller and other Persons regarding the terms
and conditions of the sale of the Target Stock and the business properties,
prospects and financial condition of Target and to obtain additional information
(to the extent Target, Seller and other Persons possessed such information or
could acquire it without
unreasonable effort or expense) necessary to verify the accuracy of any
information furnished to Buyer or to which Buyer had access.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
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To induce Buyer to enter into this Agreement and the Related Agreements and
to consummate the transactions contemplated hereby and thereby, Seller, as of
the date hereof, makes to Buyer the representations and warranties set forth in
this Article (each such representation and warranty being qualified in its
entirety by the disclosures, if any, set forth on the appropriately identified
Schedule to this Agreement).
5.1 Organization and Good Standing. Seller (a) is a corporation
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organized, validly existing and in good standing under the laws of the State of
Delaware, (b) has all requisite power and authority to own and operate its
properties and to carry on its business as now conducted, and (c) is authorized
to do business and is in good standing as a foreign corporation in each
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary and the failure to so qualify
would not have a material adverse effect on Target.
5.2 Power and Authority; Validity and Authorization. Seller has full
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requisite power and authority to execute, deliver and perform this Agreement,
the Related Agreements and the other instruments called for by this Agreement to
which Seller is a party. This Agreement and the Related Agreements have been
duly executed and delivered by Seller and constitute the legal, valid and
binding obligations of Seller, enforceable against Seller in accordance with
their terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other similar laws affecting
enforcement of creditors' rights generally and by general principles of equity
(whether applied in a proceeding at law or in equity).
5.3 No Conflict. The execution, delivery and performance of this
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Agreement and the Related Agreements and the consummation of the transactions
contemplated hereby and thereby will not result in (i) any violation of the
terms of and will not contravene or conflict with the Certificate of
Incorporation or Bylaws of Seller, (ii) violate any statute, regulation, rule,
judgment, order, decree, stipulation, injunction, charge, or other restriction
of any government, governmental agency or court to which Seller is subject, or
(iii) conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any contract lease sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, security interest, or other
arrangement to which the Seller is a party or by which it is bound or to which
any of its assets is subject.
5.4 No Brokers Fees; No Commissions. All negotiations relative hereto
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and the transactions contemplated hereby have been carried on by Seller directly
with Buyer without any act by Seller that would give rise to any claim against
Buyer or its Affiliates for a brokerage commission, finder's fee or other
similar payment.
5.5 Compliance with Laws; Permits. Seller is not, and has at all
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times since January 1, 2004 not been, in violation of any applicable statute,
rule, regulation, order, judgment, writ, decree or restriction in respect of the
conduct of its business or the ownership of its properties which violation could
materially and adversely affect the sale of Target to Buyer as contemplated by
this Agreement.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER CONCERNING TARGET
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To induce Buyer to enter into this Agreement and the Related Agreements and
to consummate the transactions contemplated hereby and thereby, Seller, as of
the date hereof, makes to Buyer the representations and warranties set forth in
this Article (each such representation and warranty being qualified in its
entirety by the disclosures, if any, set forth on the appropriately identified
Schedule to this Agreement).
6.1 Organization and Good Standing. Target (a) is a corporation
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organized, validly existing and in good standing under the laws of the State of
Delaware, (b) does not have any subsidiaries, (c) has all requisite power and
authority to own and operate its properties and to carry on its business as now
conducted, and (d) is authorized to do business and is in good standing as a
foreign corporation in each jurisdiction where the character of its properties
or the nature of its activities makes such qualification necessary and the
failure to so qualify would not have a material adverse effect on Target.
Seller has furnished Buyer with complete copies of Target's Certificate of
Incorporation and Bylaws, as currently in effect. The minute books containing
the records of meetings of the stockholders, the board of directors, and any
committees of the board of directors, the stock certificate books, and the stock
record books of the Target are correct and complete. The Target is not in
default under or in violation of any provision of its Certificate of
Incorporation and Bylaws.
6.2 No Conflict. Except as otherwise provided on Schedule 6.2, the
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execution, delivery and performance of this Agreement and the Related
Agreements, and the consummation of the transactions contemplated hereby and
thereby will not result in (i) any violation of the terms of and will not
contravene or conflict with the Certificate of Incorporation or Bylaws of
Target, (ii) violate any statute, regulation, rule, judgment, order, decree,
stipulation, injunction, charge, or other restriction of any government,
governmental agency or court to which Target is subject, or (iii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any contract lease sublease, license, sublicense,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, security interest, or other arrangement to which the
Target is a party or by which it is bound or to which any of its assets is
subject. Target does not need to provide any notice, to make any filing with,
or obtain any authorization, consent, or approval of any government or
governmental agency in order of the Buyer and Seller to consummate the
transactions contemplated by this Agreement.
6.3 Capitalization. As of the date of execution of this Agreement, the
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authorized capital stock of Target consists of 1,000 shares of common stock,
$1.00 par value, and no shares of preferred stock. As of the date hereof, there
are issued and outstanding 1,000 shares of Target's common stock. No other
shares of capital stock of Target are authorized, issued and outstanding. On
the date hereof, Seller owns all of the issued and outstanding shares of capital
stock of Target free and clear of any Lien and is the record and beneficial
owner of such shares. All of the issued and outstanding shares of capital stock
of Target have been validly issued and are fully paid and non-assessable. There
are no outstanding securities, rights, options, warrants, calls, commitments,
plans, conversion rights, contracts, pledges or other agreements of any
character for the purchase, acquisition, disposition, issuance or transfer from
Target or Seller of any shares of Target's capital stock, nor are there any
outstanding securities granted or issued by Target that are convertible into or
exchangeable for any shares of the capital stock of Target, and none are
authorized. Neither Target nor Seller is a party or subject to any agreement or
understanding, and there is no agreement or understanding between any Persons or
entities, which affects or relates to the acquisition, voting or giving of
written consents with respect to any securities of Target or by a director of
Target. All presently exercisable voting rights in Target are vested
exclusively in its
outstanding shares of common stock, each share of which is entitled to one vote
on every matter to come before Target's sole shareholder.
6.4 Agreements.
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(a) Seller has furnished or otherwise made available to Buyer all
of Target's written agreements for the installation, service, repair,
monitoring, and/or inspection of security, closed circuit television, and fire
systems by Seller (the "Security and Installation Agreements").
(b) Except the Security and Installation Agreements, Schedule 6.4
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to this Agreement lists the following contracts, agreements, and other written
arrangements to which the Target is a party:
(i) (1) any employment, consulting, director or advisory board
member agreement, contract or commitment with any officer, advisory board
member or director or higher level employee or member of Target's Board of
Directors, other than those that are terminable by Target or any of its
subsidiaries on no more than thirty (30) days' notice without liability or
financial obligation to Target, (2) any such agreement, contract or
commitment with any employee, consultant, director, advisory board member,
or other person that will result in any obligation of Target to make any
payments as a result of the transactions contemplated hereby, (3) any
agreement with any employee, consultant, director, or advisory board member
of Target pursuant to which Target has loaned or is obligated to loan any
money thereto or (4) any agreement or arrangement providing for severance
or termination pay;
(ii) any agreement of indemnification of officers, directors or
employees of Target, except as provided for in Target's Certificate of
Incorporation or Bylaws, or any guaranty of third party indebtedness or of
obligations of officers, directors, employees or agents of Target;
(iii) any agreement, contract or commitment containing any
covenant limiting in any respect the right of Target to engage in any line
of business in any geographic area or to compete with any person or
granting to any person any interest in Target's distribution rights;
(iv) any agreement, contract or commitment currently in force
relating to the disposition or acquisition by Target after the date of this
Agreement of a material amount of assets not in the ordinary course of
business or pursuant to which Target has any material ownership interest in
any corporation, partnership, joint venture or other business enterprise;
(v) any agreement, contract or commitment containing exclusivity
provisions pursuant to which Company has agreed not to purchase the goods
or services of, or enter into a commercial relationship with, another
person;
(vi) any mortgages, indentures, guarantees, loans or credit
agreements, security agreements or other agreements or instruments relating
to the borrowing of money or extension of credit;
(vii) any settlement agreement relating to any claim or suit;
(viii) any real property lease covering more than 5,000 square
feet; or
(ix) any other agreement, lease, contract or commitment that
involves remaining obligations of Target of $10,000 or more individually.
Seller has delivered to Buyer a correct and complete copy of each agreement
listed on Schedule 6.4 of this Agreement. Except as otherwise disclosed on
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Schedule 6.4 of this Agreement, there exists no material breach or default by
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Target or, to the knowledge of Seller, any of the other parties thereto, or any
event which, with notice or lapse of time or both, would constitute a material
breach or default by Target or, to the knowledge of Seller, any of the other
parties thereto. Seller has not received any notice that any material customer
of Target intends to cease dealing with or to otherwise materially reduce its
business with Target.
(c) Since January 1, 2004, Target has not (i) declared or paid any
dividends, or authorized or made any distribution upon or with respect to any
class or series of its capital stock; (ii) incurred any indebtedness for money
borrowed (other than with respect to indebtedness and other obligations incurred
in intra-company transactions, in the ordinary course of business or as
otherwise disclosed by Seller to Buyer); (iii) made any loans or advances to any
Person, other than ordinary advances for travel expenses; or (iv) sold,
exchanged or otherwise disposed of any of its assets or rights, other than the
sale of its services, inventory, equipment or similar property in the ordinary
course of business.
6.5 Financial Statements. Seller has delivered to Buyer the balance
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sheets and related statements of income of Target for year ended December 31,
2003. Such financial statements complied as to form in all material respects
with applicable accounting requirements as of their respective dates, and were
prepared in accordance with U.S. generally accepted accounting principles
("GAAP") applied on a basis consistent throughout the periods indicated and
consistent with one another. Such financial statements fairly present the
financial condition and the results of operations of Target as at the respective
dates of and for the periods referred to in such financial statements (subject
to normal, recurring year-end adjustments not material in amount). There has
been no change in the accounting policies of Target since January 1, 2004,
except as required by GAAP. No financial statements of any Person other than
Target are required by GAAP to be included in such financial statements.
6.6 Undisclosed Liabilities. Except as described in Schedule 6.6 to
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this Agreement, Target has no liabilities or obligations of any nature other
than liabilities or obligations reflected or reserved against in the balance
sheets of Target and current liabilities incurred in the ordinary course of
Target's business since the respective date of such balance sheet.
6.7 Changes. Since January 1, 2004, Target has conducted business in
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the ordinary course consistent with past practice, and further excepted as
contemplated herein, there has not been:
(a) Any change in the assets, liabilities, financial condition or
operations of Target from that reflected in its financial statements, other than
changes in the ordinary course of business, none of which individually or in the
aggregate has had or is expected to have a material adverse effect on such
assets, liabilities, financial condition or operations of Target.
(b) Other than pursuant to this Agreement or the transactions
contemplated hereby, any resignation or termination of any key officers of
Target, and, to Target's or Seller's actual knowledge, any impending resignation
or termination of employment of any such officer.
(c) Any material adverse change, except in the ordinary course of
business, in the contingent obligations of Target by way of guaranty,
endorsement, indemnity, warranty or otherwise or any development that has had or
may lead to any such material adverse change.
(d) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, business or
financial condition of Target.
(e) Any material change in any compensation arrangement or
agreement with any employee, officer or director, except in the ordinary course
of business consistent with past practice.
(f) Any labor organization activity.
(g) Any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets.
6.8 Title to Properties and Assets; Liens, etc. Target has good and
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marketable title to its properties and assets including the properties and
assets reflected in its financial statements and the assets transferred pursuant
to the Xxxx of Sale, and good title to its leasehold estates, in each case
subject to no Lien, other than (a) those resulting from taxes which have not yet
become delinquent, (b) minor Liens and encumbrances which do not materially
detract from the value of the property subject thereto or materially impair the
operations of Target, and (c) those that have otherwise arisen in the ordinary
course of business.
6.9 Patents and Trademarks; Ownership of Software Rights.
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(a) Schedule 6.9 to this Agreement sets forth all patents,
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trademarks, service marks, trade names, copyrights, trade secrets, information
and other proprietary rights and processes owned by Target or to which Target
has the legal rights to use, necessary for its business as now conducted without
any infringement of the rights of others.
(b) There are no outstanding options, licenses or agreements of
any kind relating to the foregoing, nor is Target bound by or a party to any
options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information and proprietary rights and processes of any other Person other than:
(i) such licenses or agreements arising from the purchase of "off the shelf" or
standard products; (ii) license agreement(s) with Seller and (iii) agreements
with customers.
(c) Neither Target nor Seller has received any communications
alleging that Target has violated any of the patents, trademarks, service marks,
trade names, copyrights or trade secrets or other proprietary rights of any
other Person.
(d) Notwithstanding anything in this Agreement to the contrary,
Buyer acknowledges that, from and after the date hereof, it shall have no rights
in or to use the tradenames "RadioShack", "Tandy Security Systems" or any other
trademarks or service marks owned by Seller or its Affiliates.
6.10 Litigation; Claims. Except as described in Schedule 6.10 to this
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Agreement, there is no action, suit, proceeding or investigation pending or, to
the actual knowledge of Target or Seller, currently threatened against Target
that seeks to enjoin the execution and delivery of this Agreement or any of the
Related Agreements or the right of Target or Seller to consummate the
transaction contemplated hereby or thereby, or which might result, either
individually or in the aggregate, in any material adverse change in the
financial condition of Target.
6.11 Compliance with Laws; Permits. Target is not, and has not been,
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in violation of any applicable statute, rule, regulation, order, judgment, writ,
decree or restriction in respect of the conduct of its business or the ownership
of its properties which violation could materially and adversely affect the
current business, assets, liabilities, financial condition or operations of
Target. Other than those of a routine or minor nature, the absence of which
would not have a material adverse effect on Target, Target
has all franchises, permits, licenses and any similar authority necessary for
the conduct of its business as now being conducted by it.
6.12 Tax Matters.
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(a) Target has filed all necessary or appropriate federal, state,
local, and foreign tax returns and reports and all taxes, fees, assessments, and
governmental charges of a material nature which are due and payable have been
paid, except those being contested in good faith or for which an adequate
reserve has been set aside, and there is no material tax deficiency which as
been, or to the current actual knowledge of Target, might be asserted against
Target which would materially affect the business or operations of Target.
Target has made all required deposits for the taxes applicable to the current
tax year.
(b) Seller is the common parent of an affiliated group of
corporations (within the meaning of Section 1504(a) of the Internal Revenue Code
of 1986, as amended (the "CODE")) eligible to file consolidated federal income
tax returns, of which Target is a member. With respect to the taxable year
ending on the Closing Date, the Seller will include Target in its consolidated
federal income tax return as members of the affiliated group of which Seller is
the common parent.
6.13 Environmental Matters. Target is in material compliance with all
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applicable environmental laws and has not received any written communication
from any Person that alleges that it is not in compliance with any applicable
environmental laws. There are no environmental claims pending or, to the
current actual knowledge of Target or Seller, overtly threatened, against Target
or any real property that is now or has been previously leased or owned by
Target. Target does not currently own any real property.
6.14 Inventories. The inventories of the Target consist of supplies
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all of which are merchantable and fit for the purpose for which it was procured
or manufactured, and none of which is damaged, or defective.
6.15 Insurance. Schedule 6.15 of this Agreement sets forth a
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complete and accurate list and description of all insurance policies in force
naming Target or any of its employees as an insured or beneficiary or as a loss
payable payee or for which Target has paid or is obligate to pay all or part of
the premiums. Target has not received notice of any pending or threatened
termination or retroactive premium increase with respect thereto, and Target is
in compliance in all material respects with all conditions contained therein.
There are no pending material claims against such insurance by Target as to
which insurers have denied liability, no defenses provided by insurers under
reservation of rights, and no material claim under such insurance that has not
been properly filed by Target.
6.16 Labor Matters. There are no controversies pending or, to the
--------------
knowledge of Target or Seller, threatened, between Target and its employees. As
of the date of this Agreement, Target is not a party to any collective
bargaining agreement or other labor union contract applicable to persons
employed by Target, nor does Target or Seller know of any activities or
proceedings of any labor union to organize any such employees. As of the date
of this Agreement, neither Seller nor Target has any knowledge of any strikes,
slowdowns, work stoppages or lockouts, or threats thereof, by or with respect to
any employees of Target.
6.17 Employee Benefit Plans.
------------------------
(a) Target does not contribute to, any pension, profit-sharing,
option, other incentive plan, or other Employee Benefit Plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974), or has any
obligation to or customary arrangement with employees for bonuses,
incentive compensation, vacations, severance pay, insurance, or other benefits,
other than any rights of employees that may exist under the Consolidated Omnibus
Budget Reconciliation Act of 1986, as amended ("COBRA").
(b) Target is in compliance in all material respects with all
applicable material foreign, federal, state and local laws, rules and
regulations respecting employment, employment practices, terms and conditions of
employment and wages and hours.
(c) Other than any rights of employees that may exist under COBRA,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including
severance, unemployment compensation, golden parachute, bonus or otherwise)
becoming due to any director or Target employee under any agreement or
otherwise, (ii) increase any benefits otherwise payable under any agreement, or
(iii) result in the acceleration of the time of payment or vesting of any such
benefits.
ARTICLE 7
INDEMNIFICATION; LIMITED SURVIVAL AND LIMITATION OF REMEDIES
------------------------------------------------------------
7.1 Seller Indemnification. Seller agrees to defend, indemnify and
-----------------------
hold harmless Buyer against, and to reimburse Buyer for, all claims, losses,
damages and liabilities, including legal and other expenses reasonably incurred
in investigating or defending against the same (collectively, "LOSSES"), arising
out of any breach of any representation and warranty or agreement made by Seller
herein. Further, Seller agrees to defend, indemnify and hold harmless Buyer
against, and to reimburse Buyer for, all Losses arising out of any negligence of
Target, Seller or Seller's Affiliates, their respective employees, agents, or
subcontractors which occurred prior to the Closing Date, in the performance of
the services provided for in the Installation and Services Agreements, and any
such Losses relating to such negligence shall not apply to any indemnity payment
under Section 7.5(c) and shall not be applied toward the $75,000 limitation
contained in Section 7.5(c).
7.2 Buyer Indemnification. Buyer agrees to defend, indemnify and hold
----------------------
harmless Seller against, and to reimburse Seller for, all Losses, arising out of
any breach of any representation and warranty or agreement made by Buyer herein.
7.3 Indemnification Procedure. In case any proceeding (including any
--------------------------
governmental investigation) shall be instituted involving any Person in respect
of which indemnity may be sought pursuant to this Article 7, such Person (the
"INDEMNIFIED PARTY") shall promptly notify the Person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing. In case any such
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party and shall
pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing,
the indemnifying party shall pay as incurred the fees and expenses of the
counsel retained by the indemnified party in the event (a) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (b) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent but if settled with such consent or if there be a final
judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
7.4 Third Party Claims. In the event indemnification arises hereunder
--------------------
as a result of a third party claim against the indemnified party, no
indemnification shall be required pursuant to this Article 7 until such time as
the indemnifying party shall have been finally adjudicated or otherwise bound,
including on account of a settlement to which it is a party, to be liable
hereunder to such third party.
7.5 Limited Survival of Representations and Warranties and Certain
-------------------------------------------------------------------
Covenants; Limitation of Liability; Limitation of Remedies.
----------------------------------------------------------
(a) Except as otherwise specifically provided in Section 8.2(a) or
Section 9.14, notwithstanding any term or provision of this Agreement to the
contrary, and notwithstanding any applicable statute of limitations, the
enforceability of any claim (other than any claim regarding the purchase price
payment owing from Buyer to Seller for the transfer of the Target Stock from
Seller to Buyer) relating to the alleged breach of the covenants,
representations and warranties made as of the Closing Date and the
enforceability of any claim relating to their alleged breach shall terminate on
the first (1st ) anniversary of the date hereof. No action can be brought with
respect to any breach of any covenants, representations or warranties on the
part of Buyer or the Seller under this Agreement unless a written notice
specifying the breach of the representation, warranty or covenant forming the
basis of such claim has been delivered to the party alleged to have breached
such representation, warranty or covenant prior to the termination date of the
enforceability of any claim relating to the alleged breach of such
representation, warranty or covenant and any claim relating to their breach as
described above.
(b) Except with respect to a breach of the covenants contained in
Section 9.14, Buyer shall not be liable for Losses or other amounts under
Article 7 unless and until the aggregate amount of Losses and other amounts for
which Buyer would, but for the provision of this Section 7.5(b), be liable under
Article 7 exceeds on a cumulative basis $5,000, in which case Buyer shall only
be liable for Losses that exceed $5,000, and then for the amount of the Losses
or other amounts up to a maximum of $75,000.
(c) Except with respect to a breach of the covenants contained in
Section 9.14, Seller shall not be liable for Losses or other amounts under
Article 7 unless and until the aggregate amount of Losses and other amounts for
which Seller would, but for the provision of this Section 7.5(c), be liable
under Article 7 exceeds on a cumulative basis $5,000, in which case Seller shall
only be liable (i) for Losses that exceed $5,000, and then for the full amount
of the Losses or other amounts up to a maximum of $75,000.
(d) Each of Buyer and Seller hereby agrees that subsections (a)
and (b) above shall not apply in any manner to limit or reduce the obligation of
Buyer to make any purchase price payment to Seller.
(e) Except with respect to claims based upon fraud, the sole
remedies for damages for breach of any representation, warranty or covenant
contained in this Agreement shall be indemnification pursuant to this Article 7,
Section 8.2(a) and Section 9.14.
7.6 Limitations on Claims. Notwithstanding anything contained
------------------------
elsewhere in Article 7, to the extent Buyer or Target suffers Losses for which
there are any insurance proceeds available (in the reasonable judgment of Buyer)
to Buyer or Target, and Buyer has the right to indemnification hereunder as a
result of such Losses, then Buyer may seek indemnification from Seller for such
Losses only to the extent such damages exceed the insurance proceeds available
in connection with such Losses.
ARTICLE 8
TAX MATTERS
-----------
8.1. Section 338(h)(10) Election.
-----------------------------
(a) With respect to the sale of the Target Stock, the Seller and
the Buyer shall jointly make a Section 338(h)(10) Election (as defined below) in
accordance with applicable laws and under any comparable provision of state,
local or foreign law for which a separate election is permissible and as set
forth herein. The Buyer and the Seller shall cooperate in good faith with each
other in the preparation and timely filing of any Tax Returns required to be
filed in connection with the making of such an election, including the exchange
of information and the joint preparation and filing of IRS Form 8023 and related
schedules. The Buyer and the Seller shall report the sale of the Target Stock
consistent with such elections and shall take no position contrary thereto
unless required to do so by applicable tax law pursuant to a determination as
defined in Section 1313(a) of the Code.
(b) The Seller shall be responsible for the preparation and filing
of all Section 338 Forms (as defined below) in accordance with applicable tax
laws and the terms of this Agreement and shall deliver such Section 338 Forms to
the Buyer within 30 business days following the Seller's receipt of the
Valuation (as defined below), if any. The Buyer shall provide the Seller with
any information within the possession of the Buyer that is needed to complete
the Section 338 Forms.
(c) Seller shall provide Buyer with a draft in substantially final
form of the portion of Seller's consolidated federal income tax return that
relates to Target for the taxable period that includes the Closing Date no later
than the later of (i) sixty (60) calendar days after Seller's receipt of the
Valuation (as defined below) or (ii) sixty (60) calendar days after Buyer's
receipt of the final balance sheet for Target for the month ending on or
immediately prior to the Closing Date. The Purchase Price, liabilities of
Target and other relevant items shall be allocated in accordance with Section
338(b)(5) of the Code and the Treasury Regulations thereunder. The Buyer shall,
at its option, determine the fair market value of the assets of Target (the
"VALUATION"). The Buyer shall be under no obligation to have the Valuation
prepared by an independent appraiser. The Valuation will be provided to the
Seller within 120 days after the Closing Date. The Seller shall have ten (10)
business days after receipt of the Valuation to object to any fair market value
set forth therein. Thereafter, the parties shall negotiate in good faith to
agree on a final valuation. All values contained in the Valuation shall be used
by each party in preparing the forms referred to in Section 8.1(b) above and all
other relevant Tax Returns.
(d) Notwithstanding any other provision of this Agreement to the
contrary, Seller agrees that any income and gain or loss recognized as a result
of, and in accordance with, the making of the Section 338(h)(10) Election will
be included in the consolidated federal income tax return of Seller's
consolidated group and any resulting tax liability will be paid by Seller, as
the common parent of Seller's consolidated group.
(e) "SECTION 338 FORMS" means all returns, documents, statements,
and other forms that are required to be submitted to any federal, state, county
or other local tax authority in connection with an election under Section 338(g)
and Section 338(h)(10) of the Code. Section 338 Forms shall include, without
limitation, any "statement of Section 338 election" and IRS Form 8023 (together
with any schedules or attachments thereto) that are required pursuant to Treas.
Regs. Section 1.338-1 or Treas. Regs. Section 1.338(h)(10)-1 or any successor
provisions.
(f) "SECTION 338(H)(10) ELECTION" means an election described in
Section 338(h)(10) of the Code with respect to the Buyer's acquisition of Target
pursuant to this Agreement. Section 338(h)(10) Election shall include any
corresponding election under state or local law pursuant to
which a separate election is permissible with respect to the sale of Target
Stock pursuant to this Agreement.
8.2. Tax Indemnity, Tax Refunds and Tax Return Filings.
--------------------------------------------------------
(a) Tax Indemnity. Seller shall indemnify the Buyer and Target,
--------------
and hold Buyer and Target harmless from, any Losses attributable to Pre-Closing
Taxes. For purposes of this Agreement, "PRE-CLOSING TAXES" shall mean, except
to the extent accrued as of the final balance sheet, (i) all liability for Taxes
of Target for Pre-Closing Tax Periods; (ii) all liability resulting by reason of
the several liability of Target pursuant to Treas. Regs. Section 1.1502-6 or any
analogous state, local or foreign law or regulation or by reason of Target
having been a member of any consolidated, combined or unitary group on or prior
to the Closing Date; (iii) all liability for Taxes resulting by reason of Target
ceasing to be a member of the affiliated group that includes Seller; and (iv)
all liability for Taxes attributable to any failure to comply with any of the
covenants or agreements of Seller or Target under this Agreement. The indemnity
limitations contained in Section 7.5(c) shall not apply to any indemnity payment
under this Article 8, and any amounts due under this Article 8 shall not be
applied toward the $75,000 limitation contained in Section 7.5(c).
Notwithstanding any term or provision of this Agreement to the contrary, the
enforceability of any claim for indemnification under this Article 8 with
respect to any Pre-Closing Tax shall terminate ninety (90) days after the
expiration of the applicable statute of limitations for such Pre-Closing Tax.
For purposes of this Agreement, "PRE-CLOSING TAX PERIOD" shall mean any taxable
period ending on or before the Closing Date and the portion ending on and
including the Closing Date of any Straddle Period (as defined below).
(b) Tax Refunds. If Buyer and/or Target receives a refund of, or
------------
a reduction in, Pre-Closing Taxes that results from a Change in a Pre-Closing
Tax Period Tax Return, Buyer shall pay, or shall cause Target to pay, to Seller
the amount of such refund or reduction in tax liability (together with interest,
if any, received) within ten (10) days following the date the refund is received
or the benefit of such reduction is realized. "CHANGE" shall mean any audit,
amendment, determination or other change in a Tax Return which changes the
amount of Taxes paid or payable by Target from the amount shown thereon to be
due, or which changes the amount of taxable income or loss or the amount of tax
credits (including, for example, increasing a net operating loss) included in
such Tax Return.
(c) Procedures Relating to Tax Claims. If a claim is made by any
----------------------------------
tax authority which, if successful, is likely to result in an indemnity payment
to Buyer or any of its affiliates pursuant to this Section 8.2, Buyer shall
notify Seller of such claim (a "TAX CLAIM"), stating the nature and basis of
such claim and the amount thereof, to the extent known. Failure to give such
notice shall not relieve Seller from any liability which it may have on account
of this indemnification or otherwise, except to the extent that Seller is
materially prejudiced thereby. Seller will have the right, at its option, upon
timely notice to Buyer, to assume control of any defense of any Tax Claim (other
than a Tax Claim relating solely to Taxes of Target for a Straddle Period) with
its own counsel. Seller's right to control a Tax Claim will be limited to
amounts in dispute which would be paid by Seller or for which Seller would be
liable pursuant to this Article 8. Costs of such Tax Claims are to be borne by
Seller unless the Tax Claim relates to taxable periods ending after the Closing
Date, in which event such costs will be fairly apportioned. Buyer and Target
shall cooperate with Seller in contesting any Tax Claim, which cooperation shall
include the retention and, upon Seller's request, the provision of records and
information which are reasonably relevant to such Tax Claim and making employees
available on a mutually convenient basis to provide additional information or
explanation of any material provided hereunder. Notwithstanding the foregoing,
Seller shall neither consent nor agree (nor cause Target to consent or agree) to
the settlement of any Tax Claim with respect to any liability for Taxes that may
affect the liability for any Taxes of Target or any affiliated group (as defined
in Section 1504(a) of the Code) of which Target is a member for any taxable
period ending subsequent to the Closing Date without the prior written consent
of Buyer. Buyer and Seller shall jointly control all proceedings taken in
connection with
any claims for Taxes relating solely to a Straddle Period of Target. In the
event a taxing authority requests Target or Buyer to agree to an extension of
the statute of limitations with respect to any Pre-Closing Tax Period, Buyer
shall notify Seller within three (3) business days of such request. Whether
such a request is made or not, neither Target nor Buyer will agree to an
extension of the statute of limitations with respect to any Pre-Closing Tax
Period without prior written consent of Seller.
(d) Filing of Tax Return. (i) Seller shall prepare and file all
----------------------
Tax Returns with the appropriate federal, state, local and foreign governmental
agencies relating to Target for periods ending on or prior to the Closing Date
and shall pay all Taxes due with respect to such Tax Returns. Buyer shall
furnish to Seller all information and records reasonably requested by Seller for
use in the preparation of any Tax Returns for periods ending on or prior to the
Closing Date. Buyer shall prepare and file, or cause to be prepared and filed,
all Straddle Tax Returns required to be filed by Target and shall cause Target
to pay the Taxes shown to be due thereon, provided, however, that Seller shall
promptly reimburse Buyer for the portion of such Tax that relates to a
Pre-Closing Tax Period, except to the extent accrued on the final balance sheet.
Seller will furnish to Buyer all information and records reasonably requested by
Buyer for use in preparation of any Straddle Tax Returns. Buyer shall allow
Seller to review, comment upon and reasonably approve without undue delay any
Straddle Tax Return at any time during the forty-five (45) day period
immediately preceding the filing of such Tax Return. Buyer and Seller agree to
cause Target to file all Tax Returns for any Straddle Period on the basis that
the relevant taxable period ended as of the close of business on the Closing
Date, unless the relevant tax authority will not accept a Tax Return filed on
that basis. For purposes of this Agreement, "STRADDLE TAX RETURN" shall mean
any Tax Return covering a taxable period commencing prior to the Closing Date
and ending after the Closing Date.
(ii) In the case of any Straddle Period, (a) real, personal
and intangible property Taxes ("PROPERTY TAXES") of Target for the Pre-Closing
Tax Period shall be equal to the amount of such Property Taxes for the entire
Straddle Period multiplied by a fraction, the numerator of which is the number
of days during the Straddle Period that are in the Pre-Closing Tax Period and
the denominator of which is the number of days in the Straddle Period; and (b)
the Taxes of Target (other than Property Taxes) for the portion of the Straddle
Period that constitutes a Pre-Closing Tax Period shall be computed as if such
taxable period ended as of the close of business on the Closing Date. For
purposes of this Agreement, "STRADDLE PERIOD" shall mean any taxable period that
includes (but does not end on) the Closing Date.
(iii) Seller will cause any tax sharing agreement or similar
arrangement with respect to Taxes involving Target to be terminated effective as
of the Closing Date to the extent any such agreement or arrangement relates to
Target, and after the Closing Date Target shall not have any obligation under
any such agreement or arrangement for any past, present or future period.
8.3. Retention of Books, Records, Tax Software and Reference Materials.
-----------------------------------------------------------------
Seller shall retain all existing files relating to Taxes and all Tax Returns for
Tax Periods which end on or before the Closing Date or which include the Closing
Date. Buyer shall be entitled to a copy of all existing files relating to Taxes
and all Tax Returns that are retained by Seller and which relate to the
operations of Target or are necessary to file its Tax Returns after the Closing
Date. If Buyer takes possession of any files from Seller, Buyer shall be
responsible for the retention of such files. Computer software, library
materials, casebooks, reference materials, or similar items related to Taxes
and/or the preparation of Tax Return shall remain the property of Seller;
however, Buyer may request that software and reference materials be duplicated
for its use and at its expense (including payment of applicable royalty and
license fees to third parties).
ARTICLE 9
MISCELLANEOUS
-------------
9.1 Waivers and Amendments. This Agreement or any provision hereof may
----------------------
be amended, waived, discharged or terminated only by a statement in writing
signed by the party against which enforcement of the amendment, waiver,
discharge or termination is sought.
9.2 Governing Law. This Agreement shall be governed in all respects by
-------------
the laws of the State of Delaware without regard to conflicts of laws
principles.
9.3 Entire Agreement. This Agreement and the other documents delivered
----------------
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof and they
supersede, merge and render void every other prior written and/or oral
understanding or agreement among or between the parties hereto.
9.4 Notices, etc. All notices and other communications required or
-------------
permitted hereunder shall be in writing and shall be mailed by certified or
registered mail, postage prepaid with return receipt requested, telecopy, or
delivered by hand, messenger or overnight courier service, and shall be deemed
given when received at the addresses of the parties set forth below, or at such
other address furnished in writing to the other parties hereto.
If to Buyer: eLinear, Inc.
0000 Xxxx Xxx Xxxxxxx Xxxxxxx Xxxxx
Xxxxx X-000
Xxxxxxx, Xxxxx 00000
Attention: President
Fax: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxxxxx PC
0 Xxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
If to the Seller: RadioShack Corporation
000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Vice President -
Loss Prevention and Security
Fax: (000) 000-0000
With a copy to: RadioShack Corporation
000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Vice President - Law
Fax: (000) 000-0000
The persons and addresses set forth above may be changed from time to time
by a notice sent as aforesaid. If notice is given by delivery in accordance
with the provisions of this Section, said notice shall be conclusively deemed
given at the time of such delivery. If notice is given by mail in accordance
with the provisions of this Section, such notice shall be conclusively deemed
given upon the second business day following deposit thereof in the United
States mail. If notice is given by telecopy in
accordance with the provisions of this Section, such notice shall be
conclusively deemed given upon receipt by the sender of an affirmative
transmission confirmation.
9.5 Severability. In case any provision of this Agreement shall be
------------
found by a court of law to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.
9.6 Expenses. Seller and Buyer shall each bear their own expenses and
--------
legal fees in connection with the consummation of this transaction.
9.7 Titles and Subtitles. The titles of the sections and subsections
----------------------
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
9.8 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
9.9 Public Announcements and Confidentiality. Except as otherwise may
-----------------------------------------
be required by law, each party agrees that the terms and conditions of this
Agreement shall be treated as confidential, and that there will be no
disclosure, public announcement, or similar publicity with respect to the
existence or terms of this Agreement or the transactions contemplated thereby
without the prior consent of both parties. In accordance with the foregoing, the
parties acknowledge that Seller and Buyer may disclose this Agreement and any of
its terms in connection with their respective obligations under the 1933 Act or
the 1934 Act, and the rules and regulations promulgated thereunder.
9.10 Assignment. This Agreement shall be binding upon and shall inure
----------
to the benefit of the parties hereto and their respective successors and
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any party hereto without the prior
written consent of the other party. Any such attempted assignment shall be null
and void ab initio. Nothing in this Agreement, express or implied, is intended
to confer to any party, other than the parties hereto and the respective
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement and no person who is not a party to this Agreement may
rely on the terms hereof.
9.11 Further Assurances. Each party hereto will, from time to time
-------------------
after the Closing Date, execute and deliver, and use commercially reasonable
efforts to cause other persons to execute and deliver, any such further
documents and instruments, and will do or use commercially reasonable efforts to
cause to be done such other acts, as the other party may reasonably request more
completely to consummate and make effective the transactions contemplated by
this Agreement.
9.12 No Other Representation. Notwithstanding anything to the contrary
-----------------------
contained in this Agreement, the parties acknowledge and agree that except for
the representations and warranties made by Buyer in Article 4 and by Seller in
Article 5 and Article 6 hereof, that the parties have not made any other
representations or warranties of any kind, including any representation or
warranty with respect to any level of business, projections, forecasts or
forward looking statements relating to Buyer or Seller, as the case may be, or
any other information that may have been provided to Buyer or Seller in
connection with the transactions contemplated hereby and neither party has
relied upon any projections, forecasts or other information provided by the
other party.
9.13 Removal of Seller from Contract Guarantees. The parties shall use
------------------------------------------
reasonable commercial efforts to seek the removal of Seller after Closing from
the contractual guarantees by Seller of any obligation of Target listed on
Schedule 9.13 of this Agreement.
--------------
9.14 WARN Act. Seller shall be responsible for any liability pursuant
---------
to the Worker Adjustment and Retraining Notification Act of 1988 (the "WARN
Act") for any actions of Seller or Target prior to Closing. Buyer shall be
responsible for any liability pursuant to the WARN Act for any actions of Buyer
or Target after the Closing. The obligations of Seller and Buyer under this
Section 9.14 shall be without limitation as to time or amount and is in addition
to and not subject to the limitations of Sections 7.5(a) and 7.5(b).
9.15 Covenant Not to Compete. For a period of three (3) years from
---------------------------
and after the Closing Date, the Seller will not engage directly or indirectly in
the installation, repair and servicing of commercial security alarm systems;
provided, however, that nothing herein shall prohibit the sale of security
merchandise by Seller pursuant to its business operations.
9.16 Projects in Process. Notwithstanding anything herein to the
---------------------
contrary, the parties acknowledge and agree that the projects of Target and
Tandy Security Services set forth on Schedule 9.16 shall be retained by Seller
-------------
(including all revenue and expenses associated with such projects), and Buyer
shall provide the labor to finish such projects, and receive payment for such
labor, in accordance with the terms of the Service Agreement.
* * * * *
EXECUTED as of the date first above written.
ELINEAR, INC.
By:_______________________________________
Name: Xxxxxxx Xxxxx
Title: President
RADIOSHACK CORPORATION
By:_______________________________________
Name: Xxxx X. Xxxx
Title: Senior Vice President - Chief
Administrative Officer, General
Counsel and Secretary
