Exhibit 1
EXECUTION COPY
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STOCK PURCHASE AND EXCHANGE AGREEMENT
By and Among
@TRACK COMMUNICATIONS, INC.,
MINORPLANET SYSTEMS PLC,
and
MACKAY XXXXXXX LLC
Dated as of
February 14, 2001
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Table of Contents
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.................................................................................3
ARTICLE II
THE TRANSACTIONS; CLOSING
SECTION 2.01. Purchase and Sale of Purchase Shares; Consideration........................................10
SECTION 2.02. Purchase and Sale of Buyer Sub 1 Shares; Consideration.....................................10
SECTION 2.03. Exchange of Notes..........................................................................10
SECTION 2.04. Waiver of Interest Payment.................................................................11
SECTION 2.05. Closing....................................................................................11
SECTION 2.06. Closing Delivery Matters...................................................................11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization...............................................................................12
SECTION 3.02. Authorization; Enforceability..............................................................12
SECTION 3.03. Non-Contravention..........................................................................13
SECTION 3.04. Consents and Approvals.....................................................................13
SECTION 3.05. Capitalization.............................................................................13
SECTION 3.06. Subsidiaries. .............................................................................14
SECTION 3.07. Financial Statements; No Material Adverse Change...........................................15
SECTION 3.08. SEC Reports................................................................................16
SECTION 3.09. Other Corporate Action.....................................................................16
SECTION 3.10. Proxy Statement............................................................................17
SECTION 3.11. Issuance, Sale and Delivery of the Shares..................................................17
SECTION 3.12. Compliance with Laws; Permits..............................................................17
SECTION 3.13. Litigation.................................................................................17
SECTION 3.14. Material Agreements........................................................................18
SECTION 3.15. Taxes......................................................................................18
SECTION 3.16. Insurance..................................................................................19
SECTION 3.17. Intellectual Property......................................................................19
SECTION 3.18. Employee Matters; Benefit Plans; and Labor Relations.......................................21
SECTION 3.19. Environmental Compliance...................................................................24
SECTION 3.20. Full Disclosure............................................................................25
SECTION 3.21. Interests in Clients, Suppliers, Etc.......................................................25
SECTION 3.22. Transactions with Related Parties..........................................................25
SECTION 3.23. Territorial Restrictions...................................................................25
SECTION 3.24. Absence of Certain Business Practices......................................................26
SECTION 3.25. HSR........................................................................................26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 4.01. Organization...............................................................................26
SECTION 4.02. Memorandum and Articles of Association. ...................................................26
SECTION 4.03. Authorization; Enforceability..............................................................27
SECTION 4.04. Non-Contravention..........................................................................27
SECTION 4.05. Consents and Approvals.....................................................................27
SECTION 4.06. Compliance with Law; Litigation............................................................28
SECTION 4.07. Acquisition for Investment.................................................................28
SECTION 4.08. Purchase Shares and Technology Shares Not Registered.......................................28
SECTION 4.09. Risk of Investment.........................................................................29
SECTION 4.10. Title......................................................................................29
SECTION 4.11. Capitalization.............................................................................29
SECTION 4.12. Books and Records..........................................................................30
SECTION 4.13. Taxation. .................................................................................30
SECTION 4.14. Intellectual Property......................................................................30
SECTION 4.15. Employees..................................................................................31
SECTION 4.16. Pensions. .................................................................................31
SECTION 4.17. Environmental Matters......................................................................32
SECTION 4.18. HSR........................................................................................32
SECTION 4.19. Buyer Representations......................................................................32
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MAJORITY HOLDERS AND MACKAY
SECTION 5.01. Organization...............................................................................32
SECTION 5.02. Authorization..............................................................................33
SECTION 5.03. Non-Contravention..........................................................................33
SECTION 5.04. Consents and Approvals.....................................................................33
SECTION 5.05. Compliance with Law; Litigation............................................................34
SECTION 5.06. Ownership of Notes.........................................................................34
SECTION 5.07. Acquisition for Investment.................................................................34
SECTION 5.08. Majority Holder Shares Not Registered......................................................34
SECTION 5.09. Risk of Investment.........................................................................35
SECTION 5.10. No Government Review.......................................................................35
ARTICLE VI
CORPORATE GOVERNANCE MATTERS
SECTION 6.01. Appointment of Directors...................................................................35
SECTION 6.02. Committees.................................................................................37
SECTION 6.03. Voting Matters.............................................................................37
SECTION 6.04. Certificate of Incorporation; Bylaws.......................................................39
SECTION 6.05. Majority Holder Transferees................................................................39
ARTICLE VII
COVENANTS AND AGREEMENTS
SECTION 7.01. Conduct of the Business....................................................................39
SECTION 7.02. Officers and Employees.....................................................................42
SECTION 7.03. Meeting of Stockholders....................................................................42
SECTION 7.04. Proxy Materials............................................................................42
SECTION 7.05. HSR Act and Other Filings..................................................................43
SECTION 7.06. No Transfers. .............................................................................43
SECTION 7.07. Transfer Restriction.......................................................................43
SECTION 7.08. Notification...............................................................................44
SECTION 7.09. Additional Issuances.......................................................................44
SECTION 7.10. No Inconsistent Action.....................................................................45
SECTION 7.11. Conditions.................................................................................45
SECTION 7.12. Confidential Information...................................................................46
SECTION 7.13. Cooperation................................................................................46
SECTION 7.14. Consent of Certain Investors...............................................................46
SECTION 7.15. Certain Actions............................................................................47
SECTION 7.16. Financial Statements and Other Reports.....................................................48
SECTION 7.17. Exchange of Stock Certificates.............................................................48
SECTION 7.18. Lost, Stolen, Destroyed or Mutilated Stock Certificates....................................48
SECTION 7.19. Books and Records..........................................................................49
SECTION 7.20. Insurance..................................................................................49
SECTION 7.21. Maintenance of Nasdaq SmallCap Market System Quotation Approval............................49
SECTION 7.22. Current Information........................................................................49
SECTION 7.23. Access to Information......................................................................49
SECTION 7.24. Exchange Offer.............................................................................50
SECTION 7.25. Tax Election for Buyer Sub 1 and Buyer Sub 2...............................................50
SECTION 7.26. Actions....................................................................................50
SECTION 7.27. Nasdaq Matters.............................................................................50
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
SECTION 8.01. Conditions to Each Party's Obligations.....................................................50
SECTION 8.02. Additional Conditions to Obligations of the Company........................................52
SECTION 8.03. Additional Conditions to Obligations of Buyer..............................................53
SECTION 8.04. Additional Conditions to Obligations of Majority Holder....................................57
ARTICLE IX
INDEMNIFICATION
SECTION 9.01. The Company's Indemnities to Buyer and Majority Holder.....................................59
SECTION 9.02. Buyer's and Majority Holder's Indemnities to the Company...................................59
SECTION 9.03. Buyer Indemnity Regarding Buyer Sub 1 and Buyer Sub 2......................................60
SECTION 9.04. Third Party Claims; Notice and Opportunity to Defend.......................................60
SECTION 9.05. Survival of Representations, Warranties and Covenants......................................61
ARTICLE X
TERMINATION
SECTION 10.01. Termination................................................................................62
SECTION 10.02. Notice.....................................................................................63
SECTION 10.03. Effect of Termination......................................................................63
SECTION 10.04. Termination Fee............................................................................63
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.01. Expenses of the Parties....................................................................63
SECTION 11.02. Further Assurances.........................................................................64
SECTION 11.03. Binding Agreement; Assignment..............................................................64
SECTION 11.04. Entire Agreement; No Third-Party Beneficiaries.............................................64
SECTION 11.05. Amendment; Modification....................................................................64
SECTION 11.06. Extensions; Waivers; Remedies Cumulative...................................................64
SECTION 11.07. Section Headings; Interpretation...........................................................65
SECTION 11.08. Governing Law..............................................................................65
SECTION 11.09. Notices....................................................................................65
SECTION 11.10. No Brokers.................................................................................67
SECTION 11.11. Public Announcements.......................................................................68
SECTION 11.12. Exhibits and Schedules.....................................................................68
SECTION 11.13. Enforcement; Consent to Jurisdiction.......................................................68
SECTION 11.14. Severability...............................................................................68
SECTION 11.15. Calculation of Capital Stock...............................................................69
SECTION 11.16. Majority Holder Signatures.................................................................69
SECTION 11.17. Other Matters..............................................................................69
SECTION 11.18. Counterparts...............................................................................69
EXHIBITS
Exhibit A MPL License Agreement
Exhibit B Form of Employment Agreement
Exhibit C Registration Rights Agreement
Exhibit D Amended and Restated Certificate of Incorporation
SCHEDULES
Schedule 3.01 Organization
Schedule 3.05 Capitalization
Schedule 3.06 Subsidiaries
Schedule 3.07 Financial Statements; No Material Adverse Change
Schedule 3.13 Litigation
Schedule 3.14 Material Agreements
Schedule 3.15 Taxes
Schedule 3.17 Intellectual Property
Schedule 3.18 Employee Matters; Benefit Plans; and Labor Relations
Schedule 3.21 Interests in Clients, Suppliers, Etc.
Schedule 3.23 Territorial Restrictions
Schedule 8.02 Opinion of Buyer's Counsel
Schedule 8.03 Opinion of Company's Counsel
STOCK PURCHASE AND EXCHANGE AGREEMENT
THIS STOCK PURCHASE AND EXCHANGE AGREEMENT (the "Agreement") is
dated as of February 14, 2001 and is by and among @TRACK COMMUNICATIONS, INC.,
a Delaware corporation (the "Company"), MINORPLANET SYSTEMS PLC, a United
Kingdom public limited company ("Buyer"), and MACKAY XXXXXXX LLC, a Delaware
limited liability company ("Mackay"): (a) for and on behalf of certain
accounts identified in Schedule 1 as "Majority Holders" (Mackay solely on
behalf of such accounts and not on its own behalf, and with such accounts
being hereinafter collectively referred to as the "Majority Holder"); (b) on
its own behalf in respect of (i) causing the accounts listed in Schedule 1 and
not so identified (such accounts being hereinafter collectively referred to as
the "Other Mackay Holders") to take the actions specified in Section 2.06,
(ii) using its commercially reasonable efforts as specified in Section 11.16,
and (iii) the representations and warranties specified in the paragraph
preceding Section 5.01; and (c) in respect of the agreements, covenants,
conditions, rights and obligations contained herein that apply to Majority
Holders, on behalf of the Other Mackay Holders that shall be deemed Majority
Holders for purposes of such agreements, covenants, conditions, rights and
obligations only to the extent Mackay has actual authority and control over
such actions at the time such actions are to be taken (it being the
understanding of all of the parties hereto that Mackay does not represent that
it has or will have any authority or control over the actions of the Other
Mackay Holders except as set forth in Section 1.01 under the defined term
"Mackay").
RECITALS
WHEREAS, the Company desires to sell to Buyer, and Buyer desires to
purchase from the Company, 10,000,000 shares (the "Purchase Shares") of the
common stock, par value $0.01 per share of the Company (the "Common Stock"),
all upon the terms and subject to the conditions set forth herein;
WHEREAS, Buyer is the direct owner of 100% of the share capital of
Minorplanet Limited (Co. Reg. No. 3213219) ("Buyer Sub 1"), a private limited
company organized under the laws of the United Kingdom;
WHEREAS, Buyer Sub 1 is the direct owner of 100% of the share
capital of Mislex (302) Limited (Co. Reg. No. 4131647) ("Buyer Sub 2"), a
private limited company organized under the laws of the United Kingdom;
WHEREAS, prior to the consummation of the transactions contemplated
by this Agreement, Buyer Sub 1 intends to license to Buyer Sub 2 an exclusive
right and royalty-free license (the "MPL License"), attached hereto as Exhibit
A, to market, resell, distribute and operate in North America certain vehicle
management information tracking technology;
WHEREAS, prior to the consummation of the transactions contemplated
by this Agreement, Buyer Sub 1 intends to transfer (the "Transfer") all of its
assets and liabilities, other than the share capital of Buyer Sub 2, to Mislex
(292) Limited (Co. Reg. No. 4072786) ("Newco"), a private limited company
organized under the laws of the United Kingdom, pursuant to a Hive-Across
Agreement between such parties;
WHEREAS, immediately prior to the consummation of the transactions
contemplated by this Agreement, the assets of Buyer Sub 2 will consist of
assets required for the Company to further penetrate the North American
marketplace, namely, the MPL License;
WHEREAS, as a result of the Transfer, the reversionary interest in
the MPL License will reside in Newco;
WHEREAS, in order to obtain the benefits of the MPL License
currently held by Buyer Sub 2 as licensee, the Company desires to purchase and
acquire from Buyer 100% of the share capital of Buyer Sub 1, and Buyer desires
to sell 100% of the share capital of Buyer Sub 1 to the Company in
consideration for Buyer receiving therefor 140,000,000 shares (the "Technology
Shares") of Common Stock, all upon the terms and subject to the conditions set
forth herein;
WHEREAS, the Company currently has outstanding $94,355,000 in
principal amount of 13 3/4% Senior Notes due 2005, Series A, and 13 3/4%
Senior Notes due 2005, Series B (collectively, the "Notes");
WHEREAS, Majority Holder is the beneficial holder of Notes having
the principal face amount of $65,337,000 (the "Majority Holder Notes");
WHEREAS, the Company desires in accordance with the Exchange Ratio
(as herein defined) to exchange with the Majority Holder the Majority Holder
Notes for 51,934,421 shares (the "Majority Holder Shares") of Common Stock,
all upon terms and subject to the conditions set forth in this Agreement;
WHEREAS, the Other Mackay Holders are, in the aggregate, the
beneficial holders of Notes having the principal face amount of $5,425,000
(the "Other Mackay Holders Notes");
WHEREAS, the Company desires in accordance with the Exchange Ratio
to exchange with the Other Mackay Holders, the Other Mackay Holders Notes for
4,312,170 shares (the "Other Mackay Holders Shares") of Common Stock, all
under the terms and subject to the conditions set forth in this Agreement;
WHEREAS, at a time to be mutually agreed to by the Company and Buyer
after the execution and delivery of this Agreement, the Company intends to
commence an exchange offer (the "Exchange Offer") with the holders of the
Notes (other than Majority Holder except if Majority Holder so chooses to
participate in such offer as a means of delivering the Majority Holder Notes
to the Company) offering to exchange Notes held by such parties for shares of
Common Stock based on the Exchange Ratio, which transaction to be upon the
terms and subject to the conditions of the Exchange Offer;
WHEREAS, immediately prior to the consummation of the transactions
contemplated hereby, the Company intends to effect the Reverse Stock Split (as
hereinafter defined);
WHEREAS, contemporaneously with the execution of this Agreement, the
Company is delivering to Buyer and Majority Holder, and Buyer and Majority
Holder are severally and not jointly delivering to the Company, disclosure
statements (collectively, the "Disclosure Statement") which is comprised of
certain Schedules related to the provisions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms when used in this
Agreement shall have the meanings ascribed thereto:
"$" shall mean U.S. dollars, and unless otherwise specifically provided
for herein, all references to currency contained in this Agreement shall mean
U.S. dollars.
"(Pound Sterling)" shall mean Pounds Sterling being the official currency
of the United Kingdom.
"Acquisition Proposal" shall have the meaning given thereto in Section
7.15.
"Additional Securities" shall have the meaning given thereto in Section
7.09.
"Affiliate" of any Person shall mean any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under direct or indirect common control with, such first Person. For
purposes of this definition, the term "control" (including the correlative
meanings of the terms "controls," "controlled by," and "under direct or
indirect control with") as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of such Person, whether through the
ownership of voting securities, by contract, or otherwise.
"Agreement" shall have the meaning given thereto in the Preamble hereto.
"Anti-Takeover Provision" means (i) any provision of the Certificate of
Incorporation or Bylaws of the Company or any contract, agreement or plan to
which the Company is a party or by which it is bound or any statutory
provision enacted after the date hereof which is applicable to the Company
which the Company may opt out of if the effect of such provision would be to
materially delay, hinder or prevent a change in control of the Company, or
(ii) a stockholder rights plan or "poison pill," including the provisions of
any preferred stock or common stock purchase rights issued pursuant thereto;
provided, however, that such term shall not include any customary change of
control provisions contained in employment agreements between the Company and
any of its directors, officers or other employees or in any plans or
agreements relating to stock options or other awards of equity securities made
by the Company to any such persons.
"Asserted Liability" shall have the meaning given thereto in Section
9.04.
"Board" shall mean the board of directors of the Company.
"Business Day" shall mean any day other than a Saturday, Sunday, U.S.
national legal holiday, or a legal holiday under the laws of the State of
Texas or the United Kingdom.
"Buyer" shall have the meaning given thereto in the Preamble hereto.
"Buyer Confidentiality Agreement" shall have the meaning given thereto in
Section 7.12(a).
"Buyer Sub 1" shall have the meaning given thereto in the Recitals.
"Buyer Sub 1 Intellectual Property Rights" shall mean the Intellectual
Property Rights in and to the vehicle management information technology
systems and services owned and developed by Buyer Sub 1.
"Buyer Sub 1 Shares" shall mean all of the issued and outstanding shares
of Buyer Sub 1.
"Buyer Sub 2" shall have the meaning given thereto in the Recitals.
"Cingular Warrants" shall mean those warrants to purchase shares of the
Company's Common Stock issued to the predecessor entity of Cingular Wireless
pursuant to that certain Warrant Agreement, dated September 27, 1996, by and
between the Company and Cingular Wireless.
"Cingular Wireless" shall mean Cingular Wireless LLC.
"Class B Common Stock" shall mean the Class B Common Stock of the
Company, par value $0.01 per share.
"Closing" shall mean the consummation of the transactions contemplated by
this Agreement in accordance with the provisions of Section 2.05.
"Closing Date" shall mean the date selected in accordance with the
provisions of Section 2.05 and on which Closing occurs.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Common Stock" shall have the meaning given thereto in the Recitals.
"Company" shall have the meaning given thereto in the Preamble hereto.
"Company Losses" shall have the meaning given thereto in Section 9.02.
"Company Option Plan" shall have the meaning given thereto in Section
3.05.
"Company Permits" shall have the meaning given thereto in Section 3.12.
"Delaware Business Combination Statute" shall mean Section 203 of the
DGCL.
"DGCL" shall mean the Delaware General Corporation Law, as amended from
time to time.
"Disclosure Statement" shall have the meaning given thereto in the
Recitals.
"Employment Agreement" shall mean, as applicable, the individual
employment agreements, dated as of the Closing Date, to be entered into by
each of Xxxx X. Xxxx, Xxxx X. Xxxxxx, Xxxxxx X. Parent, W. Xxxxxxx Xxxxx, C.
Xxxxxxxx Xxxx, Xxxxxx XxXxxx and J. Xxxxxxx Xxxxxx and the Company, each
substantially in the form of Exhibit B, and "Employment Agreements" shall
mean, collectively, all such agreements.
"Environment" shall have the meaning given thereto in Section 4.17.
"Environmental Laws" shall have the meaning given thereto in Section
3.19.
"ERISA" shall have the meaning given thereto in Section 3.18(a).
"ERISA Affiliate" shall have the meaning given thereto in Section
3.18(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder.
"Exchange Offer" shall have the meaning given thereto in the Recitals.
The terms of the Exchange Offer shall include (without limitation) with
respect to each exchanging Holder of Notes: (i) the waiver of interest
contemplated by Section 2.04 (read to be applicable to all Holders of Notes so
participating), and (ii) the rights and benefits provided under the
Registration Rights Agreement.
"Exchange Ratio" shall have the meaning given thereto in Section 2.03.
"Existing Line of Business" shall mean a facilities based, enhanced
service provider that offers fleet management and/or status or information
about vehicles and/or location capabilities through mobile communications
service.
"Financial Statements" shall have the meaning given thereto in Section
3.07.
"GAAP" shall mean generally accepted accounting principles in effect in
the United States of America from time to time, applied on a consistent basis
during the periods involved.
"Governmental Authority" shall mean any nation or government, whether
federal, state, foreign or local, or any other political subdivision thereof,
or any agency or instrumentality of any such governmental or political
subdivision, or any other Person, exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government. For
purposes of this Agreement, the term "Governmental Authority" shall include
the NASD and Nasdaq and any stock exchange or listing authority of the United
Kingdom.
"Xxxxxxxx Warrant" shall mean those warrants issued pursuant to that
certain Investor Relations Services Agreement, dated as of March 31, 2000, by
and between the Company and N.D. Xxxxxxxx Associates, Inc.
"Hazardous Materials" shall have the meaning given thereto in Section
3.19.
"Holders" shall mean all Persons holding any of the Notes, including the
Majority Holder.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended from time to time, and the rules and regulations promulgated
thereunder.
"Indemnifying Party" shall have the meaning given thereto in Section
9.04.
"Indemnitee" shall have the meaning given thereto in Section 9.04.
"Indenture" shall mean that certain Indenture, dated as of September 23,
1997, by and among HighwayMaster Communications, Inc., HighwayMaster
Corporation (each such party being a predecessor in interest to the Company),
and The Chase Manhattan Bank National Association, (such party being a
predecessor in interest to Texas Commerce Bank National Association), as
trustee, relating to the Notes, as such Indenture has been amended.
"Institutional Warrants" shall mean those warrants issued pursuant to
that certain Warrant Agreement, dated September 23, 1997, by and among the
Company, Bear, Xxxxxxx & Co., and Xxxxx Xxxxxx Inc. that were issued in
conjunction with the issuance of the Notes.
"Intellectual Property Rights" shall have the meaning given thereto in
Section 3.17.
"Inland Revenue" shall mean Her Majesty's Inland Revenue Service.
"Investor Directors" shall have the meaning given thereto in Section
6.01(a).
"knowledge" shall mean the terms "knowledge" or "aware" and any
derivations thereof and, when applied to any party to this Agreement, shall
refer to the knowledge and awareness, as the case may be, which such party or,
if applicable, any director or officer thereof (or consultant performing
similar functions) has or reasonably could have had, given such party's
official position and after commercially reasonable inquiry of the other
directors, officers, and employees of such party who would have reason to know
of such facts and information.
"licenses" shall mean, when applied to any party to this Agreement, all
consents, approvals, orders, rights, licenses, permits and other
authorizations, if any, issued by any Governmental Authority in connection
with the conduct of the business or operation of such Person, together with
any additions thereto (including renewals or modifications of licenses and
applications therefor) as may be made by such Person in the ordinary course
between the date hereof and the Closing Date.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
charges, encumbrance, claim, easement, transfer restriction, lien (statutory
or otherwise) or security agreement of any kind or nature whatsoever.
"Mackay" shall have the meaning given thereto in the Preamble. Mackay is
investment advisor to each Majority Holder and each of the Other Mackay
Holders. Mackay is authorized by each Majority Holder to execute and deliver
agreements and other documents in its name and on its behalf in connection
with investments directed by Mackay and, accordingly, Mackay is executing and
delivering this Agreement solely in the name and on behalf of each Majority
Holder (and not on its own behalf) except to the limited extent set forth in
subsection (b) of the Preamble hereto. Mackay is not authorized to execute and
deliver agreements and other documents in the name or on behalf of any Other
Mackay Holders and, accordingly, Mackay is executing and delivering this
Agreement in respect of Other Mackay Holders only to the limited extent set
forth in subsection (c) of the Preamble hereto. This Agreement shall be read
and construed consistent with the foregoing.
"Majority Holder" shall have the meaning given thereto in the Preamble
hereto.
"Majority Holder Notes" shall have the meaning given thereto in the
Recitals.
"Majority Holder Shares" shall have the meaning given thereto in the
Recitals.
"Material Adverse Effect" shall mean a material adverse effect on the
condition (financial or otherwise), liabilities, business, assets, or results
of operations of the party with respect to which such term is used, other than
any effects arising out of or resulting from changes affecting the economy or
financial conditions generally or from the transactions contemplated hereby.
"Material Agreements" shall have the meaning given thereto in Section
3.14(a).
"MPL License" shall have the meaning given thereto in the Recitals.
"NASD" and "Nasdaq" shall mean the National Association of Securities
Dealers, Inc. and the Nasdaq SmallCap Market, respectively.
"Newco" shall have the meaning given thereto in the Recitals.
"Notes" shall have the meaning given thereto in the Recitals.
"Order" shall have the meaning given thereto in Section 8.01(b).
"Other Mackay Holders" shall have the meaning given thereto in the
Preamble hereto.
"Other Mackay Holders Notes" shall have the meaning given thereto in the
Recitals.
"Other Mackay Holders Shares" shall have the meaning given thereto in the
Recitals.
"Permitted Liens" shall mean (i) mechanics', carriers', repairmen's,
landlord's, or other like Liens arising or incurred in the ordinary course of
business, (ii) Liens arising under original purchase price conditioned sales
contracts and equipment leases with third parties entered into in the ordinary
course of business consistent with past practice, (iii) statutory Liens for
Taxes not yet due and payable, and (iv) other encumbrances or restrictions or
imperfections of title which do not materially impair the continued use and
operation of the assets to which they relate.
"Person" shall mean an individual, corporation, partnership, joint
venture, joint stock company, association, trust, business trust,
unincorporated organization, Government Authority, or any other entity of
whatever nature.
"PBGC" shall have the meaning given thereto in Section 3.18(b)
"Plan" or "Plans" shall have the meaning given thereto in Section
3.18(a).
"Pollution of the Environment" shall have the meaning given thereto in
Section 4.17.
"Preferred Stock" shall have the meaning given thereto in Section 3.05.
"Proxy Statement" shall have the meaning given thereto in Section 3.10.
"Purchase Shares" shall have the meaning given thereto in the Recitals.
"Registration Rights Agreement" shall mean that certain Registration
Rights Agreement, to be dated as of the Closing Date, by and between the
Company, Buyer, and Majority Holder substantially in the form of Exhibit C.
"Related Party" shall have the meaning given thereto in Section 3.22.
"Reverse Stock Split" shall have the meaning given thereto in Section
8.03(u).
"SEC" shall mean the U.S. Securities and Exchange Commission or its
successor.
"SEC Reports" shall have the meaning given thereto in Section 3.08.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time, and the rules and regulations promulgated thereunder.
"Shares" shall mean, collectively, the Purchase Shares, the Technology
Shares and the Majority Holder Shares and Other Mackay Holders Shares.
"Signing Percentage" shall have the meaning given thereto in Section
11.16.
"1996 Stockholders Agreement" shall mean that certain Amended and
Restated Stockholders Agreement, dated as of September 27, 1996, by and among
the Company, Southwestern Xxxx Wireless Holdings, Inc., Carlyle-HighwayMaster
Investors, L.P., Xxxx Xxxxx International Investment Corporation and the other
persons named therein.
"Stockholders Meeting" shall have the meaning given thereto in Section
7.03.
"Xxxxxx Option" shall mean the Option Agreement, dated June 22, 1998, by
and between the Company and Xxxx X. Xxxxxx.
"Subscription Notice" shall have the meaning given thereto in Section
7.09.
"Subsidiary" or "Subsidiaries" shall mean as to any Person, any other
Person of which at least 50% or more of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such first
Person.
"Superior Proposal" shall have the meaning as given thereto in Section
7.15(b).
"Tax Returns" shall have the meaning given thereto in Section 3.15(a).
"Taxes" shall mean all taxes, charges, fees, premiums, customs, duties,
levies, whether accrued or otherwise, including, but not limited to, income,
alternative or add-on minimum tax, gross receipts, excise, property, ad
valorem, value added, sales, transfer, license, payroll, employment severance,
profits, use, occupancy, stamp, capital stock, environmental, franchise taxes
and any similar taxes, fees or charges and any taxes required by any law to be
withheld, which taxes are imposed by the United States or any state, local or
foreign government (including without limitation the United Kingdom) or
subdivision or agency thereof; and such term shall include any interest,
penalties, or additions to tax whether assessed or not.
"Technology Shares" shall have the meaning given thereto in the Recitals.
"Transfer" shall have the meaning given thereto in the Recitals.
"Voting Power Ownership Percentage" means the percentage ownership
calculated by dividing (i) the aggregate number of votes in the election of
directors to which all shares of Common Stock or other voting securities of
the Company owned by the applicable Person or Persons are entitled, howsoever
and whenever acquired, by (ii) the aggregate number of votes in the election
of directors to which all issued and outstanding voting securities of the
Company are entitled, provided that voting securities issuable upon exercise
or conversion of options, warrants or other securities or rights shall not be
included for this purpose; and provided further that restricted stock of the
Company which is not treated by the Company as outstanding shall not be
included for this purpose.
ARTICLE II
THE TRANSACTIONS; CLOSING
SECTION 2.01. Purchase and Sale of Purchase Shares; Consideration. The
Company and Buyer agree that, at the Closing, and subject to the terms and
conditions contained in this Agreement, the Company shall issue and sell to
Buyer, and Buyer shall purchase and acquire from the Company, the Purchase
Shares. As consideration for the Purchase Shares, Buyer shall, at the Closing,
pay to the Company the sum of ten million U.S. dollars ($10,000,000) in
immediately available funds, which funds shall be paid by wire transfer to an
account on behalf of the Company, the details about which account the Company
shall provide to Buyer not less than two Business Days prior to the Closing
Date. The Company and Buyer hereby acknowledge and agree that the Purchase
Shares shall be issued in a transaction exempt from registration under the
Securities Act by virtue of Section 4(2) thereof, and under applicable state
securities laws, and accordingly will be regarded as restricted securities as
such term is defined in the Securities Act.
SECTION 2.02. Purchase and Sale of Buyer Sub 1 Shares; Consideration. The
Company and Buyer agree that, at the Closing, and subject to the terms and
conditions contained in this Agreement, Buyer shall sell, transfer, and
deliver to the Company, and the Company shall purchase and acquire from Buyer,
the Buyer Sub 1 Shares. As consideration for the sale of the Buyer Sub 1
Shares, the Company shall, at the Closing, issue, transfer, and deliver to
Buyer the Technology Shares. The Company and Buyer hereby acknowledge and
agree that the Technology Shares shall be issued in a transaction exempt from
registration under the Securities Act by virtue of Section 4(2) thereof, and
under applicable state securities laws, and accordingly will be regarded as
restricted securities as such term is defined in the Securities Act.
SECTION 2.03. Exchange of Notes. The Company and Majority Holder agree
that, at the Closing, and subject to the terms and conditions contained in
this Agreement, in exchange for Majority Holder (i) delivering and
surrendering to the Company certificates or instruments representing the
Majority Holder Notes, and (ii) waiving any interest that has accrued on the
Majority Holder Notes after December 15, 2000, the Company shall (x) issue and
deliver to Majority Holder 794.87 shares of Common Stock (rounded down to the
nearest whole number) for each increment of $1,000 in principal amount (the
"Exchange Ratio") evidenced by the Majority Holder Notes, and (y) pay Majority
Holder cash in an amount equal to the accrued and unpaid interest on each
outstanding Majority Holder Note up to and including December 15, 2000, which
payment shall be made in immediately available funds and be wired to an
account of Majority Holder, the details about which account Majority Holder
shall provide to the Company not less than two Business Days prior to the
Closing Date. Upon delivery to Majority Holder of the stock certificate or
certificates representing the Majority Holder Shares, the Company shall cause
the certificates representing the Majority Holder Notes to be canceled whether
or not such certificates were delivered to the Company by Majority Holder, and
such canceled Majority Holder Notes and the certificate representing such
canceled Majority Holder Notes shall be deemed to be extinguished, null and
void and canceled without any further action being required by the Company or
any other party. The Company and Majority Holder hereby agree that the
Majority Holder Shares shall be issued in a transaction exempt from
registration under the Securities Act by virtue of Section 3(a)(9) thereof,
and under applicable state securities laws. In addition, the Majority Holder
Shares shall be issued in a transaction exempt from registration under the
Securities Act by virtue of Section 4(2) thereof, and under applicable state
securities laws, and accordingly, to the extent the Section 3(a)(9) exemption
is not available, will be regarded as restricted securities as such term is
defined in the Securities Act.
SECTION 2.04. Waiver of Interest Payment. Majority Holder agrees that,
only as to Majority Holder, the Company's failure to pay to Majority Holder
the interest payment otherwise required to be paid to Majority Holder under
the terms of the Indenture on or prior to March 15, 2001 shall not constitute
and shall not be deemed to constitute a default or event of default under the
Indenture or give rise to any rights or remedies of Majority Holder against
the Company under the terms of the Indenture. The Company and Majority Holder
agree that if for any reason the transactions contemplated hereby between the
Company and Majority Holder are not consummated, or this Agreement is
terminated in accordance with its terms, the portion of the interest payment
under the Indenture that is otherwise due and payable to Majority Holder on
March 15, 2001 shall become due and payable to Majority Holder on the later of
(x) March 15, 2001, or (y) thirty (30) days after the date the Agreement is
terminated. Majority Holder further agrees that, in the event that this
Agreement is terminated after March 15, 2001 and the Company is required to
make the interest payment contemplated by this Section 2.04 after March 15,
2001, such failure to pay such interest in accordance with the terms of the
Indenture shall not constitute and shall not be deemed to constitute a
default, event of default, or breach of any kind under the Indenture or give
rise to any rights or remedies against the Company, and Majority Holder hereby
waives, and agrees that it shall not make, any such claim or seek any
additional interest on or with respect to the March 15, 2001 interest payment.
The Company and Majority Holder further agree that if the transactions
contemplated hereby are consummated at any time after April 30, 2001, the
Company shall be obligated to pay to Majority Holder the portion of the
interest payment under the Indenture accruing on a daily basis as to the
Majority Holder Notes after April 30, 2001, which payment shall become due and
payable by the Company to Majority Holder thirty (30) days after the date the
Agreement is consummated.
SECTION 2.05. Closing. The Closing shall take place at the offices of
Xxxxx & Xxxx LLP, One World Trade Center, New York, New York at 10:00 a.m.
(Eastern Standard Time), and shall take place on a date agreed upon and
designated by Buyer and Majority Holder upon at least three (3) Business Days
prior written notice to the Company after the last of the conditions specified
in Article VIII shall have been satisfied, and not later than ten (10)
Business Days after such conditions have been satisfied, or on such other date
and at such other place as may be mutually agreed upon in writing by the
Company, Buyer and Majority Holder; provided, however, that such date shall
not be later than June 30, 2001. In the event that the Closing does not occur
on the scheduled date therefor by reason of the failure of any condition in
Article VIII, any rescheduling of the Closing agreed to by the parties hereto
shall occur in accordance with this Section 2.05, but in no event on a date
later than June 30, 2001.
SECTION 2.06. Closing Delivery Matters. The parties agree that, solely
for purposes of delivering to the Company the Majority Holder Notes and the
Notes held by the Other Mackay Holders in an orderly and administratively
efficient manner, Mackay, Majority Holder, and the Other Mackay Holders shall
be permitted to deliver such securities to the Company by way of, and in
accordance with, the delivery requirements to be set forth in the Exchange
Offer contemplated by Section 7.24. The parties further agree that, in the
event that the Exchange Offer is terminated or not completed in accordance
with its terms, Mackay and Majority Holder shall be required and obligated to
deliver the Majority Holder Notes and Mackay shall cause the Other Mackay
Holders to deliver the Other Mackay Holders Notes to the Company as part of
the Closing in accordance with the terms of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each of Buyer and
Majority Holder as follows:
SECTION 3.01. Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Company has all requisite corporate power and authority to own, operate,
and lease its properties and to conduct its business substantially as now
being conducted. The Company is duly qualified as a foreign corporation and is
in good standing in the jurisdictions listed on Schedule 3.01, which are the
only jurisdictions in which the character or location of the assets or
properties owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where failure to be
so qualified or to be in good standing has not had or would not have a
Material Adverse Effect on the Company or on the ability of the Company to
consummate the transactions contemplated hereby. The Company has all requisite
power and authority, corporate or otherwise, to enter into this Agreement and,
subject to the approval by the stockholders of the Company and Cingular
Wireless of the transactions contemplated hereby, and the receipt of all
requisite regulatory approvals, approval of Governmental Authorities, and the
expiration of any applicable waiting periods, and the obtaining of other
consents and waivers specified herein, to consummate the transactions
contemplated hereby.
SECTION 3.02. Authorization; Enforceability. The execution, delivery and
performance of this Agreement and all other agreements contemplated hereby and
the consummation of the transactions contemplated hereby and thereby, have
been duly approved and authorized by the Board, and all necessary corporate
action on the part of the Company has been taken subject to the approval of
the transactions contemplated hereby by the stockholders of the Company, and
such authorization has not been withdrawn or amended in any manner. No other
corporate action other than the obtaining of the consents and waivers
specified herein is necessary for the authorization, execution, delivery and
performance by the Company of this Agreement or any other agreement or
document executed or to be executed by the Company in connection herewith, or
the consummation by the Company of the transactions contemplated hereby and
thereby. When duly authorized, executed and delivered by Buyer and Mackay on
behalf of Majority Holder, this Agreement and all such other documents or
instruments shall constitute the valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as limited by bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights in general and subject to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
SECTION 3.03. Non-Contravention. The execution, delivery and performance
of this Agreement by the Company and each of the other documents and
instruments required to be entered into pursuant to this Agreement by the
Company: (a) will not violate or conflict with any provisions of the
Certificate of Incorporation or Bylaws of the Company, other than any such
violations or conflicts that may result as a result of the entering into of
this Agreement on the date hereof, prior to the Certificate of Incorporation
being amended as contemplated by this Agreement, and which violations or
conflicts will be cured as of the Closing, (b) will not conflict with or
constitute a violation by the Company of any applicable law, judgment, order,
injunction, decree, rule, regulation or ruling of any Governmental Authority
applicable to the Company or by which the Company's assets are bound, the
enforcement of which would have a Material Adverse Effect on the Company's
assets or its ability to perform its obligations under this Agreement or
ability to consummate the transactions contemplated hereby, (c) will not,
either alone or with the giving of notice or the passage of time, or both,
modify, violate, conflict with, constitute grounds for termination of, or
accelerate the performance required by, or result in a material breach or
default of the terms, conditions or provisions of, any contract, agreement,
note, bond, mortgage, indenture, (other than the transactions as to which any
such violation or conflict will be cured prior to Closing) deed of trust,
license, franchise, permit, commitment, waiver, exemption, order, obligation,
lease, sublease, undertaking, agreement, offer, or other instrument, which
violation, conflict, termination, acceleration, breach or default would have a
Material Adverse Effect on the Company's assets or the Company's ability to
perform its obligations hereunder or to consummate the transactions
contemplated hereby, and (d) will not result in the creation of or imposition
of (or the obligation to create or impose) any Lien on any of the Company's
assets.
SECTION 3.04. Consents and Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Authority is required by or with respect to the Company in
connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby except for: (i) the
filing by the Company of the Proxy Statement with the SEC for use in
connection with the Stockholders Meeting to approve the transactions
contemplated hereby, (ii) the filing of the Amended and Restated Certificate
of Incorporation with the Delaware Secretary of State and the acceptance
thereof, (iii) any required filings, approvals, or no-action letters with or
from state securities authorities, (iv) any filings required under the HSR
Act, (v) any filings required by the U.K. Listing Rules and/or the U.K.
Companies Xxx 0000, and comments, waivers or approvals obtained with respect
to all of the foregoing.
SECTION 3.05. Capitalization. The authorized capital stock of the Company
consists of (i) 50,000,000 shares of Common Stock, (ii) 1,000 shares of Class
B Common Stock and (iii) 20,000 shares of preferred stock, par value $0.01 per
share (the "Preferred Stock"). As of February 14, 2001, there were 25,326,829
shares of Common Stock issued and outstanding, 1,000 shares of Class B Common
Stock issued and outstanding, all of which are held by Cingular Wireless, and
no shares of Preferred Stock issued and outstanding. All such issued and
outstanding shares of Common Stock and Class B Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable. The
Company has reserved for issuance (w) 5,000,000 shares of Common Stock
issuable upon exercise of the Cingular Warrants, (x) 1,600,000 shares of
Common Stock issuable upon conversion of the Class B Common Stock beneficially
owned by Cingular Wireless for Common Stock, (y) 820,750 shares of Common
Stock issuable upon exercise of the Institutional Warrants, and (z) 196,695
shares of Common Stock issuable upon exercise of options granted under its
1994 Amended and Restated Stock Option Plan (the "Company Option Plan"). The
Company has not reserved for issuance the 8,000 shares of Common Stock
issuable upon exercise of the Xxxxxxxx Warrant, and the Company has not
reserved for issuance the 3,798 shares of Common Stock issuable upon exercise
of the Xxxxxx Option. The Company has 311,997 shares of Common Stock in
treasury. Except as set forth above, no shares of capital stock are reserved
for issuance. Except as set forth in Schedule 3.05, there are no outstanding
or existing options, warrants, rights (including preemptive rights), calls,
subscriptions, commitments, conversion rights, rights of exchange, plans or
other agreements of any character providing for the purchase, issuance or sale
of any shares of the capital stock of the Company. Except as disclosed on
Schedule 3.05, and with the exception of the Registration Rights Agreement,
the Company has not granted or agreed to grant any rights relating to the
registration of its securities under applicable federal and state securities
laws, including piggyback rights, and the consummation of the transactions
contemplated by this Agreement will not trigger any anti-dilution provisions
or other price adjustment mechanisms of any outstanding subscriptions,
options, warrants, calls, contracts, preemptive rights, demands, commitments,
conversion rights or other agreements or arrangements of any character or
nature whatsoever under which the Company is or may be obligated to issue or
acquire its capital stock. Assuming issuance of the Shares on February 14,
2001, Buyer would own as of such date 57.8% of the fully diluted common equity
of the Company and 64.3% of the common equity of the Company assuming
conversion of the Class B Common Stock, but not the exercise of any warrants
or options of the Company, and the Majority Holder and the Other Mackay
Holders would own in the aggregate as of such date 21.7% of the fully diluted
common equity of the Company and 24.1% of the common equity of the Company
assuming conversion of the Class B Common Stock, but not the exercise of any
warrants or options of the Company.
SECTION 3.06. Subsidiaries. Set forth on Schedule 3.06 is the name of the
Company's Subsidiary, which is the sole subsidiary of the Company. Such
Subsidiary is a limited liability company duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation (as
set forth in such schedule), and has all requisite power and authority to own
its property and to conduct its business substantially as now being conducted.
Set forth on Schedule 3.06 is a list of jurisdictions in which such Subsidiary
is qualified as a foreign limited liability company and such Subsidiary is in
good standing in each jurisdiction where it is so qualified. Such
jurisdictions are the only jurisdictions in which the character or location of
the properties owned or leased by such Subsidiary, or the nature of the
business conducted by such Subsidiary, make such qualification necessary. All
of the issued and outstanding membership interests of such Subsidiary are (i)
duly and validly authorized and issued, (ii) fully paid and nonassessable,
(iii) owned, of record and beneficially, by the Company, and (iv) free and
clear of all Liens, encumbrances, equities, options or claims whatsoever,
including preemptive rights. No membership interests of such Subsidiary are
reserved for issuance and there are no outstanding options, warrants, rights,
subscriptions, claims of any character, agreements, obligations, convertible
or exchangeable securities, or other commitments, contingent or otherwise,
relating to the membership interests of such Subsidiary, or pursuant to which
such Subsidiary is or may become obligated to issue or exchange any membership
interests of such Subsidiary. Except for the Subsidiary listed on Schedule
3.06 neither the Company nor such Subsidiary owns, directly or indirectly, any
capital stock or other economic, equity or ownership or proprietary interest
in any other Person. Except as listed on Schedule 3.06, and except as
contemplated hereby, the Company is not party to any partnership agreement,
stockholders agreement, voting agreement or joint venture agreement with any
other Person.
SECTION 3.07. Financial Statements; No Material Adverse Change. (a) The
financial statements of the Company included in its Annual Report on Form 10-K
of the SEC for the fiscal years ended December 31 for each of 1999, 1998, and
1997, and its Quarterly Reports on Form 10-Q of the SEC for the fiscal
quarters ended March 31, June 30, and September 30, 2000 (collectively, the
"Financial Statements") comply as to form in all material respects with the
applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with GAAP during the periods covered thereby (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as permitted by
Form 10-Q of the SEC, or for normal year-end adjustments), and fairly present
in all material respects the financial position of the Company as at the dates
thereof and the results of its operations and cash flows for the periods then
ended, and are derived from the books and records of the Company, which are
complete and accurate in all material respects and have been maintained in all
material respects in accordance with applicable laws and regulations. Except
as disclosed in Schedule 3.07, since December 31, 1999, there has not been any
declaration, setting aside or payment of a dividend or other distribution with
respect to shares of capital stock of the Company, except for dividends
distributed to stockholders in the ordinary course of business, nor has there
been any material change in accounting methods or practices by the Company.
(b) Since December 31, 1999, except as set forth on Schedule 3.07 and as
disclosed in the SEC Reports filed prior to the date hereof, and except for
the execution, delivery and performance of this Agreement and any other
agreements to be entered into or contemplated hereby and the transactions
contemplated hereby and thereby, (A) the Company has not incurred any
obligations, contingent or non-contingent liabilities, liabilities for Taxes,
levies, Liens, claims or other charges, long-term leases or unusual forward or
long-term commitments (whether absolute, accrued, contingent or otherwise,
known or unknown, whether due or to become due, or whether or not required by
GAAP to be reflected in a balance sheet of the Company or disclosed in the
notes thereto), except liabilities and obligations that (x) are adequately
accrued or reserved against in the Financial Statements or disclosed in the
notes thereto, (y) were incurred after December 31, 1999 in the ordinary
course of business and consistent with past practice, or (z) have been
discharged or paid in full, (B) no contract, lease or other agreement or
instrument has been entered into or terminated by the Company or has become
binding upon the Company or its assets which, individually or in the
aggregate, has had or could reasonably be expected to have a Material Adverse
Effect on the Company taken as a whole, or the ability of the Company to
consummate the transactions contemplated hereby, (C) the Company is not in
default, and to the Company's knowledge no third party is in default, under
any Material Agreement which, individually or in the aggregate, has had or
could reasonably be expected to have a Material Adverse Effect on the Company
taken as a whole or on the ability of the Company to consummate the
transactions contemplated hereby, (D) the business of the Company has been
operated in the usual and ordinary course consistent with past practice, (E)
except as set forth in Schedule 3.07, no event has occurred, which alone or
together with other events, could reasonably be expected to have a Material
Adverse Effect on the Company taken as a whole or on the ability of the
Company to consummate the transactions contemplated hereby, except to the
extent resulting from any changes in general economic conditions in the United
States, (F) there has not been (i) any damage, destruction or casualty loss,
whether covered by insurance or not, that, after application of insurance
proceeds received or to be received, if any, has had a Material Adverse Effect
on the Company, or (ii) other than increases granted and approved by the
Compensation Committee of the Board for the officers of the Company in 2000
and on February 6, 2001, as to which such increase Buyer has been informed,
any increase in the rate or terms of compensation payable or to become payable
by the Company to the officers of the Company, or modification to the welfare
or employee benefit plans.
SECTION 3.08. SEC Reports. The Company has timely filed all forms,
schedules, registration statements, proxy statements, reports and documents
required to be filed by it with the SEC since January 1, 1996 (collectively,
the "SEC Reports"). As of their respective dates, the SEC Reports, after
giving effects to any amendments or supplements thereto filed prior to the
date hereof, complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as the case may be, applicable to such
SEC Reports. None of the SEC Reports when filed, after giving effect to any
amendments and supplements thereto filed prior to the date hereof, contained
(or, if filed after the date hereof, will contain) any untrue statement of a
material fact or omitted (or, if filed after the date hereof, will omit) to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
SECTION 3.09. Other Corporate Action. The Board, at a meeting duly called
(or for which notice was duly waived by all directors of the Company) and held
on February 10, 2001, has by resolution (i) approved the entering into of the
transactions contemplated by this Agreement and the consummation thereof, and
(ii) specifically exempted Buyer and Majority Holder and their respective
current and future Affiliates, associates, and transferees from any
Anti-Takeover Provision and from having Section 203 et. seq. of the DGCL
applied to such parties with regard to a "business combination" (as such term
is defined in Section 203(c) of the DGCL) involving the Company. Such
resolution referred to in clause (ii) hereof constitutes approval of such
transactions by the Board for purposes of any Anti-Takeover Provision and of
the provisions of Section 203 of the DGCL, and constitutes all actions
necessary to ensure that all Anti-Takeover Provisions and the restrictions
contained in Section 203 of the DGCL, to the fullest extent permitted by
Section 203, will not apply to such aforementioned parties in connection with
or after the consummation of the transactions contemplated hereby, and under
all Anti-Takeover Provisions and to the fullest extent permitted by Section
203, there shall be no restriction on the ability of such aforementioned
parties to vote the Shares being acquired hereunder for any purpose or be
restricted by Section 203 et. seq. from entering into a "business
combination." To the Company's knowledge, no other state takeover statute is
applicable to the transactions contemplated by this Agreement and/or the
consummation of the transactions contemplated hereby.
SECTION 3.10. Proxy Statement. The proxy statement described in Section
7.04, including any amendments or supplements thereto (the "Proxy Statement"),
shall not, at the time filed with the SEC, at the time mailed to the Company's
stockholders or at the time of the Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to any information provided by Buyer, Mackay, Majority Holder or
the Other Mackay Holders or their respective Affiliates, officers, directors,
employees and agents specifically for use in the Proxy Statement. The Proxy
Statement will comply as to form in all material respects with the provisions
of the Exchange Act and the rules and regulations thereunder.
SECTION 3.11. Issuance, Sale and Delivery of the Shares. When issued and
paid for in compliance with the provisions of this Agreement, the Shares will
be validly issued, fully paid and nonassessable, and will be free of any
Liens, other than restrictions on transfer under state and/or federal
securities laws. The sale and/or exchange of the Shares is not subject to any
preemptive rights or rights of first refusal that have not been properly
waived or complied with.
SECTION 3.12. Compliance with Laws; Permits. The business of the Company
and its Subsidiary has been and is being conducted in compliance in all
respects with all laws, ordinances and regulations of Governmental
Authorities, including, without limitation, federal and state securities laws,
laws and regulations relating to financial statements and reports,
occupational safety, fair employment practices, fair labor standards and laws
and regulations relating to employees and employee benefits, and any statutes
or ordinances relating to the properties occupied or used by the Company and
its Subsidiary, except as any such non-compliance would not have a Material
Adverse Effect on the Company and its Subsidiary taken as a whole. Each of the
Company and its Subsidiary is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exemptions, consents,
certificates, approvals and orders necessary for it to own, lease and operate
its properties or to carry on its business as it is now being conducted (the
"Company Permits") and no suspension, revocation or cancellation of any of the
Company Permits is pending or, to the knowledge of the Company or its
Subsidiary, threatened, except to the extent that failure to possess the same
would not have a Material Adverse Effect on the Company and its Subsidiary
taken as a whole or on the ability of the Company to consummate the
transaction contemplated hereby.
SECTION 3.13. Litigation. Except as disclosed on Schedule 3.13, there is
no action, suit, claim, investigation, review, or proceedings, legal,
quasi-legal, administrative or otherwise, pending or, to the knowledge of the
Company or its Subsidiary, threatened against the Company or its Subsidiary or
any property or assets of the Company or its Subsidiary in any court or before
any arbitrator of any kind or before or by any Governmental Authority. Neither
the Company nor its Subsidiary is subject to any judgment, order, writ,
injunction or decree of any arbitrator, court or Governmental Authority, and
there are no unsatisfied judgments against the Company or its Subsidiary.
SECTION 3.14. Material Agreements. (a) Schedule 3.14 contains a true and
complete list of each contract, agreement, lease, or deed that is material to
the business or operation of the Company or its Subsidiary (the "Material
Agreements"). Complete copies of each Material Agreement including all
amendments thereto have been furnished to or made available to Buyer.
(b) Each Material Agreement listed on Schedule 3.14 is in full force and
effect and is a valid and binding obligation of the Company or its Subsidiary,
as applicable, enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights in general and subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). Except as set forth on Schedule 3.14, each of the Company
and its Subsidiary has complied in all material respects with all such
Material Agreements and there has been and will continue to be no material
violation, material breach or default by the Company or its Subsidiary under
such agreements (or an event which, with notice or lapse of time or both,
would constitute a default). Neither the Company nor its Subsidiary knows (or
has any reason to know) of any material violation, material breach or default
by any other party to any of the Material Agreements. Except as set forth on
Schedule 3.14, neither the Company nor its Subsidiary is bound by (i) any
agreement, contract or material commitment relating to the employment of any
person by the Company or its Subsidiary, or any bonus, deferred compensation,
pension, profit sharing, stock option, stockholder, employee stock purchase,
retirement or other employee benefit plan, (ii) any agreement, indenture or
other instrument which contains restrictions with respect to payment of
dividends or any other distribution in respect of its capital stock, (iii) any
agreement, contract or commitment relating to capital expenditures other than
those entered into the ordinary course and involving less than $100,000, (iv)
any loan or advance to, or investment in, any other Person or any agreement,
contract or commitment relating to the making of any such loan, advance or
investment other than advances made in the ordinary course for a bona fide
business purpose, (v) any guarantee or other contingent liability in respect
of any indebtedness or obligation of any other Person, other than guarantees
made in the ordinary course for a bona fide business purpose (vi) any
management service, consulting or any other similar type contract, other than
technical service consulting agreements and other agreements otherwise
terminable on 90 days notice or involving payment in excess of $50,000 per
annum, (vii) any agreement, contract or commitment limiting the freedom of the
Company or its Subsidiary to engage in any line of business or to compete with
any other Person, (viii) any agreement, contract or commitment not entered
into in the ordinary course of business and which is not cancelable without
penalty within 30 days, or (ix) any agreement, contract or commitment which
would reasonably be expected to have a Material Adverse Effect on the business
or operations of the Company and its Subsidiary taken as a whole or on the
ability of the Company to consummate the transactions contemplated hereby.
SECTION 3.15. Taxes. (a) Except as set forth on Schedule 3.15: (i) all
Tax Returns required to be filed by or on behalf of the Company or its
Subsidiary have been or will be timely filed, (ii) all such Tax Returns that
have been filed are complete and correct in all material respects, and all
Taxes due with respect to taxable periods covered by such Tax Returns have
been paid, (iii) no written claim (other than a claim that has been finally
settled) has been made by a taxing authority that either the Company or its
Subsidiary is subject to an obligation to file Tax Returns or to pay or
collect Taxes imposed by any jurisdiction in which the Company or its
Subsidiary do not file Tax Returns or pay or collect Taxes, other than any
such claim that would not have a Material Adverse Effect on the Company and
its Subsidiary taken as a whole or for which adequate reserves have been
provided on the Financial Statements, (iv) there is no deficiency with respect
to any Taxes, other than any such deficiency for which adequate reserves have
been provided on the Financial Statements, and (v) all material assessments
for Taxes due with respect to completed and settled examinations or concluded
litigation have been paid which, individually or in the aggregate, exceed
$25,000. As used in this Agreement, "Tax Returns" shall mean all federal,
state, local and foreign tax returns, declarations, statements, reports,
schedules, forms and information returns relating to Taxes.
(b) Except as set forth on Schedule 3.15, each of the Company and its
Subsidiary has duly and timely withheld all Taxes required to be withheld in
connection with its business and assets, and such withheld Taxes have been
either duly and timely paid to the proper Governmental Authorities or properly
set aside in accounts for such purpose.
(c) Except as set forth on Schedule 3.15, (i) neither the Company nor its
Subsidiary is a party to or bound by or subject to any obligation under any
Tax allocation, sharing, indemnification or similar agreement or arrangement
with any Person, which might result in a Material Adverse Effect on the
Company, and (ii) neither the Company nor its Subsidiary is or has been at any
time a member of any group of companies filing a consolidated, combined or
unitary income tax return other than any such group the common parent of which
is the Company.
(d) Except as set forth on Schedule 3.15, (i) all taxable periods of the
Company and its Subsidiary ending before December 31, 1996 are closed or no
longer subject to audit, (ii) neither the Company nor its Subsidiary is
currently under any audit by any taxing authority as to which such taxing
authority has asserted in writing any claim which, if adversely determined,
could have a Material Adverse Effect on the Company and its Subsidiary taken
as a whole, and (iii) no waiver of the statute of limitations is in effect
with respect to any taxable year of the Company or its Subsidiary.
SECTION 3.16. Insurance. Except as would not reasonably be expected to
have a Material Adverse Effect on the Company and its Subsidiary taken as a
whole, each of the Company and its Subsidiary has in effect insurance
coverage, including directors and officers' liability insurance, with
financially sound and reputable insurers which, in respect of amounts,
premiums, types and risks insured, constitutes reasonably adequate coverage
against all risks customarily insured against by companies and their
subsidiaries comparable in size and operations to the Company or its
Subsidiary, as applicable.
SECTION 3.17. Intellectual Property. (a) Schedule 3.17 contains a list of
all material copyrights, trademarks, service marks, trade names, licenses,
patents, permits, jingles, privileges, internet domain names, trade dress,
trade secrets, mask works, designs, computer programs, know-how, and other
similar intangible property rights and interests (collectively, "Intellectual
Property Rights") applied for by, issued to, registered in the name of, or
owned by, the Company or its Subsidiary, or under which the Company and its
Subsidiary are licensed or franchised, and used in the conduct of the business
and operation of the Company and its Subsidiary. To the knowledge of the
Company, the operation of the business of the Company and its Subsidiary does
not, and except as identified on Schedule 3.17 the Company and its Subsidiary
have not received any notice from any Person claiming that the business of the
Company or its Subsidiary does infringe or misappropriate the Intellectual
Property Rights of any Person, violate any export control law or regulation,
violate the rights of any Person (including rights to privacy or publicity),
or constitute unfair competition or trade practices under any applicable laws.
(b) No judicial or administrative finding, whether preliminary, interim,
or final, has been made or issued, that any of the patents owned by the
Company or its Subsidiary is invalid, in whole or in part, or that the Company
or its Subsidiary has infringed any patent or patent rights of any third
party. None of the Company's or its Subsidiary's owned Intellectual Property,
and to the knowledge of the Company none of the other Intellectual Property
used by the Company, is subject to any outstanding decree, order, judgment or
stipulation restricting in any manner its exploitation or use by the Company
or its Subsidiary.
(c) Except as set forth on Schedule 3.17, to the knowledge of the
Company, no Person is infringing or misappropriating any Intellectual Property
Rights owned or licensed by the Company or its Subsidiary or engaging in other
conduct that may diminish or undermine such Intellectual Property Rights,
including, without limitation, the disclosure of confidential information of
the Company or its Subsidiary, except for any such infringements or
misappropriations that, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect on the Company and its
Subsidiary taken as a whole.
(d) Except as set forth on Schedule 3.17, the Intellectual Property
Rights owned by the Company and its Subsidiary material to the Company and its
Subsidiary taken as a whole have been duly registered with, filed in or issued
by, as the case may be, the appropriate filing offices, domestic or foreign,
to the extent necessary or reasonably desirable to ensure usual and customary
protection for the Intellectual Property Rights in the relevant jurisdiction
under any applicable law, and the same remain in full force and effect. Each
of the Company and its Subsidiary has taken all necessary actions to ensure
usual and customary protection for the Intellectual Property Rights in the
relevant jurisdiction of the Intellectual Property Rights (including
maintaining the secrecy of all confidential intellectual property) under any
applicable law.
(e) Except as set forth in Schedule 3.17, all Intellectual Property
Rights used by each of the Company and its Subsidiary in connection with its
business are the sole property of the Company and its Subsidiary, as
applicable, and, to the knowledge of the Company, no third party has any right
to, ownership of, or other encumbrance upon any such Intellectual Property
Rights except as otherwise or in the Schedules hereto. The existence or
exercise of any such third party rights does not and could not reasonably be
expected to have a Material Adverse Effect on the Company and its Subsidiary
taken as a whole. To the Company's knowledge, except as set forth on Schedule
3.17, no Intellectual Property Rights owned by a third party are necessary for
the Company or its Subsidiary to practice or commercially exploit its
Intellectual Property Rights, including without limitation the design,
manufacture, sale, offering for sale, use, or distribution of the goods,
products, and services of the Company or its Subsidiary.
(f) All Intellectual Property Rights purported to be owned by each of the
Company and its Subsidiary which were developed, worked on or otherwise held
by any employee, officer, consultant, or other person are owned free and clear
by the Company or its Subsidiary, as applicable, by operation of law or have
been validly assigned to the Company or its Subsidiary, as applicable. All
services provided to the Company or its Subsidiary by non-employees with
respect to the creation, modification or improvement of any Intellectual
Property Rights purported to be owned by the Company or its Subsidiary
(including, without limitation, software, hardware, patentable inventions, and
copyrightable works) have been performed pursuant to agreements with the
Company and/or its Subsidiary that assign to the Company and/or its Subsidiary
ownership of such Intellectual Property Rights, each of which is valid,
binding, and enforceable according to its terms, except as limited by laws
affecting enforcement of creditors' rights in general or equitable principles
generally (regardless of whether in a proceeding in equity or at law).
(g) All material contracts, licenses and agreements relating to the
Intellectual Property owned or used by the Company and its Subsidiary are in
full force and effect. The execution, delivery or performance of this
Agreement, or consummation of the transactions contemplated by this Agreement,
will neither violate nor result in the breach, modification, cancellation,
termination, or suspension of such contracts, licenses, and agreements. The
Company and its Subsidiary are in material compliance with, and has not
materially breached any term of any such contracts, licenses and agreements
and, to the knowledge of the Company, all other parties to such contracts,
licenses and agreements are in material compliance with, and have not
materially breached any term of, such contracts, licenses and agreements.
SECTION 3.18. Employee Matters; Benefit Plans; and Labor Relations. (a)
Schedule 3.18 lists all employee plans, programs, practices and arrangements,
including all employee benefit plans (within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
employment agreements, and health, medical, dental, welfare, accident,
disability, life insurance, stock purchase, bonus, equity and equity-type
compensation, severance pay and other employee benefit or fringe benefit plans
maintained or contributed to by the Company or any ERISA Affiliate or with
respect to which the Company or any ERISA Affiliate has any fixed or
contingent, direct or indirect, liability (each a "Plan" and, collectively,
the "Plans"). For purposes of this Agreement, "ERISA Affiliate" means any
Affiliate or Subsidiary and any other person or entity that would be treated
as under common control or a single employer with the Company under Section
4001 of ERISA or Section 414 (b), (c), (m) or (o) of the Code. The Company has
delivered or made available to Buyer copies of each Plan and all amendments
thereto and, if applicable, the summary plan description and any summaries of
material modifications, any other material employee communications, the most
recent determination letters and any other rulings, the three most recent
annual reports on Internal Revenue Service Form 5500, and the three most
recent actuarial reports and/or statements of trust assets with respect to
each such Plan.
(b) Except as set forth on Schedule 3.18, (i) there is no accumulated
funding deficiency, whether or not waived, within the meaning of Section 302
of ERISA and Section 412 of the Code with respect to any Plan that is subject
to such sections, (ii) no "reportable event" (other than those for which the
30-day notice to the Pension Benefit Guaranty Corporation ("PBGC") has been
waived) or "prohibited transaction" (other than those for which there is an
available exemption) (as such terms are defined in ERISA and the Code, as
applicable) has occurred with respect to any Plan during the five years
preceding the Closing Date, (iii) each Plan is and has been operated in
compliance in all material respects with the presently applicable provisions
of ERISA, the Code and other applicable law, (iv) with respect to any
insurance contract providing funding under any Plan, there is no material
liability for any retroactive rate adjustment arising from events occurring
prior to the Closing Date, (v) neither the Company nor any ERISA Affiliate has
incurred any liability under Title IV of ERISA to the PBGC in connection with
any Plan which is subject to Title IV of ERISA which has not been fully paid
prior to the date hereof, other than liability for premiums due the PBGC,
which premiums have been paid when due, and no such Plan has been terminated
or is reasonably expected to be terminated or to be subject to proceedings by
the PBGC under Title IV of ERISA on or before the Closing Date, (vi) the
Company expects that the Internal Revenue Service will issue, with respect to
each Plan intended to be tax qualified under Sections 401(a) and 501(a) of the
Code, a letter determining that such Plan is qualified and its related trust
is exempt from United States federal income tax under Sections 401(a) and
501(a) of the Code, respectively, and there has been no occurrence affecting
the form or operation of any Plan which is likely to adversely affect such
qualification, (vii) no amendment to any Plan has been adopted that would
require the provision of security to such Plan under Section 401(a)(29) of the
Code, (viii) no Plan is a "welfare benefit fund" (within the meaning of
Section 419(e) of the Code), a "multiple employer plan" (within the meaning of
Section 413(c) of the Code) or a "multiemployer plan" (as defined in Section
3(37) of ERISA), and no withdrawal liability has been incurred by or asserted
against the Company or any ERISA Affiliate with respect to any employee
pension benefit plan which is a multiple employer plan or a multiemployer
plan, and (ix) the Company has not received any notice and does not have any
knowledge or reasonable expectation that any Plan is insolvent or in
reorganization within the meaning of Title IV of ERISA or that increased
contributions to any Plan may be required to avoid a reduction in plan
benefits or the imposition of any excise tax.
(c) Each Plan that is a "group health plan" (as defined in Section 4980B
of the Code) has been operated in compliance with Section 4980B of the Code
and the secondary payor requirements of Section 1862(b)(1) of the Social
Security Act. Except as set forth on Schedule 3.18, no medical claim in excess
of $50,000 has been incurred but is unpaid under any Plan that will result in
a liability to the Company. Except as provided in Schedule 3.18 and except as
required by Section 4980B of the Code, neither the Company nor any ERISA
Affiliate has any obligation or liability to provide medical, life insurance
or supplemental pension benefits in respect of any current or former employees
or independent contractors of the Company or any ERISA Affiliate beyond their
retirement. Except as set forth on Schedule 3.18, no Plan provides for
severance pay, unemployment compensation or any similar payment with respect
to any current or former employee or independent contractor of the Company or
any ERISA Affiliate. Except as provided in Schedule 3.18, the consummation of
the transactions contemplated by this Agreement will not (i) entitle any such
person or entity to severance pay, unemployment compensation or any other
similar payment, (ii) accelerate the time of payment or vesting of any amount,
(iii) increase the amount of compensation due to any such person or entity,
(iv) constitute a "prohibited transaction" (as defined in Section 406 of ERISA
or Section 4975 of the Code), or (v) entitle any such person or entity to an
"excess parachute payment" within the meaning of Section 280G of the Code. The
Company and each ERISA Affiliate, as applicable, have reserved all rights
necessary to amend each Plan and to terminate its participation in each Plan.
(d) Except as set forth on Schedule 3.18, there are no actions or claims
existing or pending (other than routine claims for benefits) or, to the
Company's knowledge, threatened with respect to any Plan, and neither the
Company nor any ERISA Affiliate has been notified of any audit or
investigation of a Plan by any governmental entity.
(e) All contributions required to be made by the Company or any ERISA
Affiliate under applicable laws or the terms of any Plan or collective
bargaining agreement to each Plan have been made within the time prescribed by
such laws, Plan or collective bargaining agreement. Except as set forth on
Schedule 3.18, the present value of all "benefit liabilities" (whether or not
vested) (as defined in Section 4001(a)(16) of ERISA) under each Plan which is
subject to Title IV of ERISA did not exceed as of the most recent plan
actuarial valuation date, and will not exceed as of the Closing Date, the then
current value of the assets of such Plan as determined pursuant to Section 412
of the Code. For purposes of determining the present value of benefit under
any such Plan, the actuarial assumptions and methods used under such Plan for
the most recent plan actuarial valuation shall be used and all benefits
provided under the Plan shall be deemed to be fully vested.
(f) The Company and each ERISA Affiliate (except as a result of any
actions taken by Buyer) (i) are in compliance in all material respects with
all applicable laws respecting employment, employment practices, terms and
conditions of employment and wages and hours (including, but not limited to,
the Worker Adjustment Retraining Notification Act, the Age Discrimination in
Employment Act, the Civil Rights Act of 1964, the Equal Pay Act, the
Occupational Safety and Health Act, the Fair Labor Standards Act, the
Americans with Disability Act of 1990, the Family and Medical Leave Act of
1993, and any other federal, state or local law regulating employment or
protecting employee rights), in each case, with respect to current and former
employees and independent contractors of the Company and such ERISA Affiliate,
(ii) has withheld all amounts required by applicable Laws or by agreement to
be withheld from the wages, salaries and other payments to such current and
former employees and independent contractors, (iii) is not liable for any
arrears of wages or any taxes or any penalty for failure to comply with any of
the foregoing, and (iv) is not liable for any payment to any trust or other
fund or to any governmental entity, with respect to unemployment compensation
benefits, social security or other benefits for such current or former
employees and independent contractors.
(g) Except as set forth on Schedule 3.18, (i) no employees of the Company
are represented by any labor organization and there is no union organizational
activity currently underway, or to the Company's knowledge, threatened, with
respect to any employees of the Company, (ii) the Company is not engaged in,
and has not received any written notice during the current or preceding year
of, any unfair labor practice, and no such complaint is pending before the
National Labor Relations Board or any other agency having jurisdiction
thereof, (iii) the Company is not engaged in, and has not received any notice
of, any grievances arising under any collective bargaining agreements, or any
pending arbitration proceedings under any collective bargaining agreements,
(iv) during the immediately preceding 24 calendar months there has not been
any, and there is no, threatened, labor strike, work stoppage or slowdown
pending against any portion of the business of the Company, and there is no
pending lockout by the Company. The Company has satisfied and performed fully
its obligations under each collective bargaining agreement, and under any
order, conciliation contract or settlement contract by which any of them is
bound or to which any of them is subject concerning employment related
matters. Except as set forth on Schedule 3.18, the Company is not engaged in,
and has not received notice of, any local, state and/or federal charge,
complaint, lawsuit or other action, pertaining to the violation of any
employment law, statute, ordinance or regulation and no such charge,
complaint, lawsuit or other action is pending before any agency or
administrative body responsible for administering such employment law,
statute, ordinance or regulation.
SECTION 3.19. Environmental Compliance. (a) To the knowledge of the
Company, each of the Company and its Subsidiary has been and is, and at all
times through the Closing Date shall remain in compliance with, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, the Superfund Amendments
and Reauthorization Act of 1986, the Federal Water Pollution Control Act and
all other federal, state and local laws relating to pollution or protection of
the environment, including laws and regulations relating to emissions,
discharges, releases or threatened releases, transportation or disposal of
industrial contaminants, petroleum products or chemicals (collectively,
"Hazardous Materials") into the environment (including the ambient air,
surface water, groundwater, land surface or subsurface strata), or otherwise
relating to the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of Hazardous Materials
(the "Environmental Laws"), except to the extent any such noncompliance does
not create and has not created a Material Adverse Effect on the Company and
its Subsidiary taken as a whole, as applicable.
(b) Without limiting the foregoing, and unless otherwise specifically
provided the Company represents and warrants that:
(i) to the Company's knowledge, there is not constructed, placed,
deposited, stored, disposed of, nor located on the Company's or its
Subsidiary premises, any asbestos in any form that has released or
threatens to release airborne asbestos fibers in excess of applicable
local, state and federal standards;
(ii) to the Company's knowledge, there have been no spills,
discharges, emissions, releases or threats of releases of any Hazardous
Materials, pollutants or contaminants resulting from or associated with
the business and operation of the Company or its Subsidiary, other than
releases of de minimis quantities of such substances;
(iii) neither the Company nor its Subsidiary has received notice of,
or has knowledge of, any violations of or claims under or pursuant to any
Environmental Law or any occurrence, condition or circumstance which with
notice, or passage of time, or both, would give rise to a violation of or
claim under or pursuant to any Environmental Law, with respect to the
business and operations of Company and its Subsidiary; and
(iv) to the Company's knowledge, there are no past or present
events, conditions or circumstances caused by the Company or its
Subsidiary or as a result of any act of the Company or its Subsidiary
that may interfere with or prevent compliance or continued compliance in
all material respects by the Company and its Subsidiary in accordance
with the Environmental Laws or with any order, decree, judgment,
injunction, notice or demand issued, entered, promulgated or approved
under the Environmental Laws, or which may give rise to any material
common law or other legal liability, including liability under any
Environmental Laws or otherwise which form the basis of any claim,
action, demand, suit, proceeding, hearing, notice of violation, study or
investigation, based on or related to the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling, or the emission, discharge, release or threatened release into
the environment, of Hazardous Materials.
SECTION 3.20. Full Disclosure. Nothing in this Agreement, the Financial
Statements referred to in Section 3.07 (including the footnotes thereto), or
any Schedule, Exhibit or certificate delivered in accordance with the terms
hereof or any document or statement in writing which has been supplied by any
of the Company's directors or officers, in connection with the transactions
contemplated hereby, contains any untrue statement of a material fact, or
omits any statement of a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. There is no fact known to the
Company which would have a Material Adverse Effect on the Company and its
Subsidiary taken as a whole or on their properties or assets, which has not
been set forth in this Agreement or in the Schedules, Exhibits or certificates
or statements in writing furnished in connection with the transactions
contemplated by this Agreement.
SECTION 3.21. Interests in Clients, Suppliers, Etc. Except as set forth
in Schedule 3.21, to the knowledge of the Company, and except for ownership of
less than 5% in a publicly-traded corporation, no officer or director of the
Company or its Subsidiary possesses, directly or indirectly, any financial
interest in, or is a director, officer or employee of, any corporation, firm,
association, or business organization or other Person that is a client,
supplier, customer, lessor, lessee, or competitor of the Company or its
Subsidiary.
SECTION 3.22. Transactions with Related Parties. There has not been any
payment or charge by the Company or its Subsidiary to any Related Party; any
payment or charge by any Related Party to the Company; or any other
transaction between the Company and its Subsidiary on the one hand and any
Related Party on the other hand. For purposes of this Section 3.22, the term
"Related Party" shall mean any member of the immediate family (including a
spouse, brother, sister, descendant, ancestor or in-law) of any person who is,
or during the past two years was, an officer or director of the Company or its
Subsidiary or any corporation, partnership, trust or other entity in which any
Related Party or any family member of such person has a substantial interest
or is a director, officer, partner or trustee.
SECTION 3.23. Territorial Restrictions. Except as set forth in Schedule
3.23, neither the Company nor its Subsidiary is restricted by any oral or
written agreement or understanding with any other Person from carrying on the
business and operations conducted by the Company and its Subsidiary anywhere
in the world.
SECTION 3.24. Absence of Certain Business Practices. To the Company's
knowledge, none of the Company , its Subsidiary or any officer, employee or
agent thereof, nor any other Person acting on behalf of the Company or its
Subsidiary, has, directly or indirectly, within the past five years given or
agreed to give any gift or similar benefit to any customer, supplier,
governmental employee or other Person or entity who is or may be in a position
to help or hinder the Company or its Subsidiary (or assist the Company in
connection with any actual or proposed transaction) which (i) subjects any
party to any damage or penalty in any civil, criminal or governmental
litigation or proceeding which would have a Material Adverse Effect on the
Company and its Subsidiary taken as a whole, (ii) if not given in the past,
could have had a Material Adverse Effect on the Company and its Subsidiary
taken as a whole or (iii) if not continued in the future, could have a
Material Adverse Effect on the Company and its Subsidiary taken as a whole.
SECTION 3.25. HSR. The Company (together with its Subsidiary) does not
have Net Sales or Total Assets (as each such term is defined in the HSR Act)
of $100,000,000 or more.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Company as follows:
SECTION 4.01. Organization. Buyer is a public limited company duly
organized, validly existing and in good standing under the laws of the United
Kingdom. Each of Buyer Sub 1 and Buyer Sub 2 is a private limited company duly
organized, validly existing and in good standing under the laws of the United
Kingdom. Buyer Sub 2 is a wholly-owned subsidiary of Buyer Sub 1 and does not
have any subsidiaries or subsidiary undertakings. Buyer has the requisite
corporate power and authority to execute and deliver this Agreement and any
other agreement or document executed or to be executed by Buyer in connection
herewith and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by Buyer hereunder or thereunder.
Each of Buyer, Buyer Sub 1 and Buyer Sub 2 has the full corporate power and
authority to own, lease, and operate its property and to carry on its business
as now conducted and is in good standing in each jurisdiction in which its
right, title, and interest in or to any asset owned or held by it, or the
conduct of its business requires such authorization, qualification, or
licensing, except where such party's failure to be so authorized, qualified or
licensed would not have a Material Adverse Effect on such party or on such
party's ability to consummate the transactions contemplated by this Agreement
or for Buyer to perform its obligations hereunder.
SECTION 4.02. Memorandum and Articles of Association. The copies of the
Memorandum and Articles of Association of Buyer Sub 1 and Buyer Sub 2,
respectively, which have been supplied to the Company's United Kingdom counsel
by Buyer's counsel are true and complete in all respects and have embodied in
them or annexed to them a copy of every such resolution and agreement as is
referred to in Section 380(4) of the Companies Act of 1985, and Buyer Sub 1
and Buyer Sub 2 have at all times carried on their respective business and
affairs in all respects in accordance with their respective Memorandum and
Articles of Association and all such resolutions and agreements.
SECTION 4.03. Authorization; Enforceability. The execution, delivery, and
performance by Buyer of this Agreement and all other agreements contemplated
hereby, and the consummation of the transactions contemplated hereby and
thereby, have been duly approved and authorized by the Board of Directors of
Buyer, and all necessary corporate action on the part of Buyer, Buyer Sub 1
and Buyer Sub 2 has been taken and such authorization has not been withdrawn
or amended in any manner. No other corporate action is necessary on the part
of Buyer (including without limitation, stockholder approval), Buyer Sub 1 or
Buyer Sub 2 for the authorization, execution, delivery, and performance by
Buyer of this Agreement or any other agreement or document executed or to be
executed by Buyer, Buyer Sub 1 or Buyer Sub 2 in connection herewith, or for
the consummation by Buyer of the transactions contemplated hereby or thereby.
When duly authorized, executed and delivered by the Company, this Agreement
and all such other documents or instruments shall constitute the valid and
binding obligations of Buyer, enforceable against Buyer in accordance with
their respective terms, except as limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights in general and
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 4.04. Non-Contravention. The execution, delivery and performance
of this Agreement by Buyer and each of the other documents and instruments
required to be entered into pursuant to this Agreement by Buyer, Buyer Sub 1
or Buyer Sub 2: (a) will not violate or conflict with any provision of the
Memorandum of Association or Articles of Association of Buyer, Buyer Sub 1 or
Buyer Sub 2, (b) will not conflict with or constitute a violation by Buyer,
Buyer Sub 1 or Buyer Sub 2 of any applicable law, judgment, order, injunction,
decree, rule, regulation or ruling of any Governmental Authority applicable to
Buyer, Buyer Sub 1, or Buyer Sub 2 the enforcement of which would have a
Material Adverse Effect on Buyer, Buyer Sub 1 or Buyer Sub 2 or on Buyer's
ability to perform its obligations hereunder or the ability of Buyer, Buyer
Sub 1 or Buyer Sub 2 to consummate the transactions contemplated hereby, and
(c) will not, either alone or with the giving of notice or the passage of
time, or both, modify, violate, conflict with, constitute grounds for
termination of, or accelerate the performance required by, or result in a
breach or default of the terms, conditions or provisions of, or constitute a
default under any contract, agreement, note, bond, mortgage, indenture, deed
of trust, license, franchise, permit, commitment, waiver, exemption, order,
obligation, lease, sublease, undertaking, agreement, offer or other
instrument, which violation, conflict, termination, acceleration, breach or
default would have a Material Adverse Effect on Buyer, Buyer Sub 1, or Buyer
Sub 2 or on the ability of Buyer to perform its obligations hereunder or the
ability of Buyer, Buyer Sub 1 or Buyer Sub 2 to consummate the transactions
contemplated hereby. To Buyer's knowledge, each of Buyer Sub 1 and Buyer Sub 2
has complied with the provisions of the UK Companies Acts 1985-1989 and all
filings and documents required to be filed with or delivered to the UK
Registrar of Companies or to any other authority whatsoever by Buyer Sub 1 and
Buyer Sub 2 have been correctly and properly prepared and so filed or
delivered.
SECTION 4.05. Consents and Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Authority is required by or with respect to Buyer or Buyer Sub 1
or Buyer Sub 2 in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby except for: (i)
the filing by the Company of the Proxy Statement with the SEC for use in
connection with the Stockholders Meeting to approve the transactions
contemplated hereby, (ii) the filing by the Buyer after the Closing under
Section 13(d) of the Exchange Act, (iii) the filing of the Amended and
Restated Certificate of Incorporation with the Delaware Secretary of State and
the acceptance thereof, (iv) any required filings, approvals, or no-action
letters with or from state securities authorities, and (v) any filings
required under the HSR Act.
SECTION 4.06. Compliance with Law; Litigation. (a) None of Buyer, Buyer
Sub 1 or Buyer Sub 2 is in violation of any material law, regulation, or
ordinance, or any other material requirement of any Governmental Authority,
nor is it subject to any judgment, award, order, writ, injunction,
arbitration, decision, or decree that would have a Material Adverse Effect on
Buyer, Buyer Sub 1, or Buyer Sub 2 or on Buyer's ability to enter into this
Agreement or the ability of Buyer, Buyer Sub 1 or Buyer Sub 2 to consummate
the transactions contemplated hereby and perform its obligations hereunder.
There is no claim, litigation, action, investigation, review or
administrative, arbitral, or other proceeding or petition or complaint, or to
the knowledge of Buyer, investigation before any court or Governmental
Authority pending or, to the knowledge of Buyer, threatened against Buyer,
Buyer Sub 1 or Buyer Sub 2, which seeks to enjoin or prohibit, or that
otherwise would have a Material Adverse Effect on Buyer, Buyer Sub 1 or Buyer
Sub 2 or any of their respective properties or assets or which impairs or
seeks to enjoin or prohibit Buyer's ability to perform its obligations under
this Agreement or the ability of Buyer, Buyer Sub 1 or Buyer Sub 2 to
consummate the transactions contemplated hereby.
(b) To Buyer's knowledge, Buyer Sub 1 and Buyer Sub 2 have complied with
the provisions of the UK Companies Acts and all returns, particulars,
resolutions and documents required to be filed with or delivered to the UK
Registrar of Companies or to any other authority whatsoever by Buyer Sub 1 and
Buyer Sub 2 have been correctly and properly prepared and so filed or
delivered.
(c) To Buyer's knowledge, Buyer Sub 1 does not have any actual or
contingent liabilities whatsoever and howsoever arising which Buyer would not
have the means to satisfy if required to do so by reference to the indemnity
given in Section 9.03.
SECTION 4.07. Acquisition for Investment. Buyer represents, covenants,
and agrees that, upon the Closing, it will acquire the Purchase Shares and the
Technology Shares for its own account for the purpose of investment and not
with a view toward resale or public distribution thereof, except in compliance
with all applicable securities laws and regulations, whether foreign or
domestic, and as otherwise contemplated by the Registration Rights Agreement;
provided, however, that the disposition of Buyer's property shall at all times
be and remain within its control. Buyer is an "accredited investor," as that
term is defined by Rule 501 of Regulation D, promulgated under the Securities
Act.
SECTION 4.08. Purchase Shares and Technology Shares Not Registered. Buyer
represents, covenants and agrees that the Purchase Shares and the Technology
Shares are being issued pursuant to a Section 4(2) exemption from the
registration requirements of the Securities Act, and that the Purchase Shares
and the Technology Shares have not been registered under the Securities Act or
applicable state securities laws, and that they must be held indefinitely
unless the offer and sale thereof are subsequently registered under the
Securities Act and other applicable securities laws, or an exemption from such
registration is available, provided that the disposition of Buyer's property
shall at all times remain within its control. The Purchase Shares and
Technology Shares shall bear substantially the following legend until such
shares are registered under the Securities Act:
THE OFFER AND SALE OF THE SECURITIES OF THIS COMPANY REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY FOREIGN OR STATE SECURITIES LAWS, AND
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS THE OFFER AND SALE THEREOF ARE REGISTERED UNDER SUCH LAWS
OR EXEMPTIONS FROM REGISTRATION ARE AVAILABLE AND THE COMPANY HAS
BEEN FURNISHED WITH AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY AND KNOWLEDGEABLE AS TO SECURITIES MATTERS STATING THAT
EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE AND
THAT THE PROPOSED SALE DOES NOT, AND WILL NOT, PLACE THE COMPANY OR
ANY AFFILIATE THEREOF IN VIOLATION OF ANY APPLICABLE FEDERAL, STATE
OR FOREIGN SECURITIES LAW, OR ANY RULE OR REGULATION PROMULGATED
THEREUNDER.
SECTION 4.09. Risk of Investment. Buyer recognizes, acknowledges and
warrants that it has such knowledge and experience as to be capable of
evaluating the merits and risks of the investment in the Company and it is
aware of the speculative nature of and risks of loss associated with such
investment.
SECTION 4.10. Title. Buyer is the sole legal and beneficial owner of the
whole of the issued share capital of Buyer Sub 1 that is being conveyed to the
Company, and has good title to such securities, free and clear of any liens,
other than any that may be created by this Agreement. Upon consummation of the
transactions contemplated hereby, and delivery of the Buyer Sub 1 Shares, and
payment of the consideration therefor as contemplated hereby, the Company will
receive good title to the Buyer Sub 1 Shares, free and clear of all Liens.
Buyer Sub 1 is the sole legal and beneficial owner of the whole of the issued
share capital of Buyer Sub 2, and has good title to such securities, free and
clear of all Liens.
SECTION 4.11. Capitalization. The issued share capital of Buyer Sub 1
consists of (i) 112,358 ordinary shares of (Pound Sterling)0.01 each and the
issued share capital of Buyer Sub 2 consists of one ordinary share of (Pound
Sterling)1. All of the issued share capital of Buyer Sub 1 is owned by Buyer.
All of the issued share capital of Buyer Sub 2 is owned by Buyer Sub 1. All
such issued shares of Buyer Sub 1 and Buyer Sub 2 have been duly authorized
and validly issued and are fully paid. Except as set forth herein and as
contemplated by this Agreement, there are no outstanding or existing options,
warrants, rights (including preemptive rights), calls, subscriptions,
commitments, conversion rights, rights of exchange, plans or other agreements
of any character providing for the purchase, issuance or sale of any shares of
the capital of Buyer Sub 1 or Buyer Sub 2. No shares of Buyer Sub 1 or Buyer
Sub 2 capital are reserved for issuance. Neither Buyer Sub 1 nor Buyer Sub 2
has granted or agreed to grant any rights relating to the registration of its
securities under applicable federal and state securities laws, including
piggyback rights, and the consummation of the transactions contemplated by
this Agreement will not trigger any anti-dilution provisions or other price
adjustment mechanisms of any outstanding subscriptions, options, warrants,
calls, contracts, preemptive rights, demands, commitments, conversion rights
or other agreements or arrangements of any character or nature whatsoever
under which the Company is or may be obligated to issue or acquire its capital
stock. Except as indicated in the Recitals hereto, neither Buyer Sub 1 nor
Buyer Sub 2 has any Subsidiary nor are there any Liens on any of the capital
stock of Buyer Sub 1 or Buyer Sub 2.
SECTION 4.12. Books and Records. All accounts, books, ledgers, financial
and other necessary records of whatsoever kind of Buyer Sub 1 and Buyer Sub 2
(including statutory books and all invoices and other records required for
value added tax purposes) have been properly maintained, are in the possession
of Buyer Sub 1 and Buyer Sub 2, respectively, and contain true and accurate
records of all matters including those required to be entered in them by the
UK Companies Acts 1985-1989 and no notice or allegation that any of the same
is incorrect or should be rectified has been received.
SECTION 4.13. Taxation. Buyer Sub 1 and Buyer Sub 2 have duly made all
Tax Returns and given or delivered all notices, accounts and information which
ought to have been made to, and are not involved in any dispute with, the
Inland Revenue or other authority concerning any matter likely to affect in
any manner the liability (whether accrued, contingent or future) of them to
taxation of any nature whatsoever or other sums imposed, charged, assessed,
levied or payable under the provisions of the taxation statutes and Buyer is
not aware of any matter which may lead to such dispute. Buyer Sub 1 or Buyer
Sub 2 have duly paid or fully provided for all taxation for which they are
liable and there are no circumstances in which interest or penalties in
respect of Taxes not duly paid could be charged against them in respect of any
period prior to Closing. No liability of Buyer Sub 1 and Buyer Sub 2 to Taxes
has arisen or will arise up to Closing save for corporation tax payable in
respect of normal trading profits earned by them or income tax deducted under
PAYE regulations or national insurance contributions or Value Added Tax or
sickness pay for which it is accountable to the Inland Revenue, Customs and
Excise or other relevant authority and which has where appropriate been
deducted or charged and where due paid to the Inland Revenue or such other
relevant authority. Buyer Sub 1 and Buyer Sub 2 have not entered into or been
a party to any schemes or arrangements designed partly or wholly for the
purpose of them or (so far as Buyer is aware) any other person avoiding
taxation in a manner contrary to applicable law.
SECTION 4.14. Intellectual Property.
(a) To the knowledge of Buyer, the operation of the business of Buyer Sub
1 does not, and each of Buyer and Buyer Sub 1 have not received any notice
from any Person claiming that the business of Buyer Sub 1 infringes or
misappropriates the intellectual property rights of any Person, violate any
export control law or regulation, violate the rights of any Person (including
rights to privacy or publicity), or constitute unfair competition or trade
practices under any applicable laws.
(b) To the knowledge of Buyer, no Person is infringing or
misappropriating any Buyer Sub 1 Intellectual Property Rights or engaging in
other conduct that may diminish or undermine such Buyer Sub 1 Intellectual
Property Rights, including, without limitation, the disclosure of confidential
information of Buyer Sub 1, except for any such infringements or
misappropriations that, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect on Buyer Sub 1.
(c) All Buyer Sub 1 Intellectual Property Rights used by Buyer Sub 1 in
connection with its business are the sole property of Buyer Sub 1 and upon the
Transfer, Newco, and, to the knowledge of Buyer, no third party has any right
to, ownership of, or other encumbrance upon any such Buyer Sub 1 Intellectual
Property Rights which conflict with any of the rights to be granted to Buyer
Sub 2 in accordance with the MPL License except as otherwise provided herein.
(d) Buyer Sub 1 Intellectual Property Rights purported to be owned by
Buyer Sub 1 which were developed, worked on or otherwise held by any employee,
officer, consultant, or other person are owned free and clear by Buyer Sub 1
and upon the Transfer, Newco, by operation of law or have been validly
assigned to Buyer Sub 1 and upon the Transfer, Newco. All services provided to
Buyer Sub 1 by non-employees with respect to the creation, modification or
improvement of any Buyer Sub 1 Intellectual Property Rights purported to be
owned by Buyer Sub 1 (including, without limitation, software, hardware,
patentable inventions, and copyrightable works) have been performed pursuant
to agreements with Buyer Sub 1 that assign to Buyer Sub 1 and upon the
Transfer, Newco, ownership of such intellectual property rights, each of which
agreement is valid, binding, and enforceable according to its terms, except as
limited by laws affecting creditors' rights or equitable principles generally.
(e) Buyer Sub 2, upon execution and delivery of the MPL License, will be
the legal and beneficial owner of the exclusive right and royalty-free license
to market, resell, distribute and operate the Intellectual Property Rights of
Buyer Sub 1 in North America. The MPL license is free from any mortgage,
charge, lien, security interest or other encumbrance.
(f) Buyer represents to the Company that Buyer Sub 2 is a newly formed
entity formed solely for the purpose of the transactions contemplated hereby
and that Buyer Sub 2 has no prior operation's listing.
SECTION 4.15. Employees. Following consummation of the transactions
contemplated hereby, Buyer Sub 1 and Buyer Sub 2 will not have any employees
and will not have any liabilities (whether actual or contingent, material or
nonmaterial, contractually or in tort) to any former employees or their
families or other dependents.
SECTION 4.16. Pensions. Contingent upon the consummation of the
transactions contemplated hereby, Buyer Sub 1 and Buyer Sub 2 will not have
any liabilities to any former employees or the families or other dependents of
such former employees in respect of any employment agreements, employee plans,
programs, practices, and arrangements, including all employee benefit plans
and health, medical, dental, welfare, accident, disability, life insurance,
stock purchase, bonus, equity and equity-type compensation, severance pay and
other employee benefit or fringe benefit plans maintained or contributed to by
Buyer Sub 1 or Buyer Sub 2.
SECTION 4.17. Environmental Matters. (a) No Pollution of the Environment
in violation of any law relating to protection of the Environment or at levels
in excess of that permitted under any such law has occurred at, under or from
any of the properties of the Buyer Sub 1 and Buyer Sub 2.
(b) Buyer Sub 1 and Buyer Sub 2 have complied and continue to comply with
all laws relating to protection of the Environment and have filed all
notifications required to enable them lawfully and properly to operate their
business at and from any of the properties of Buyer Sub 1 and Buyer Sub 2.
(c) In this Section 4.17, "Pollution of the Environment" and
"Environment" shall have the meanings given thereto in the UK Environmental
Protection Xxx 0000.
SECTION 4.18. HSR. Buyer (together with its Subsidiaries) does not have
Net Sales or Total Assets (as each such term is defined in the HSR Act) of
$100,000,000 or more.
SECTION 4.19. Buyer Representations. Notwithstanding any other provision
contained in this Agreement, the parties agree that the representations and
warranties of Buyer as to Buyer Sub 1 and Buyer Sub 2 shall be true and
correct as of the Closing but shall not be required to be true and correct as
of the execution of this Agreement, and Buyer shall have no liability
whatsoever to the Company or any other party with regard to any inaccuracy of
any representation or warranty contained herein pertaining to Buyer Sub 1 and
Buyer Sub 2 as of the date hereof provided that such representations and
warranties are true and correct as of the Closing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MAJORITY HOLDERS AND MACKAY
Each Majority Holder hereby represents and warrants (as to itself
only) and Mackay hereby represents and warrants (as to itself and/or the Other
Mackay Holders, as appropriate), to the Company as follows. The
representations and warranties set forth below in (A) Sections 5.01 and 5.06
are being made by: (i) Mackay as to itself, Mackay in respect of each Majority
Holder and Mackay in respect of the Other Mackay Holders, and (ii) each
Majority Holder (as to itself only), and (B) the remaining Sections of this
Article V are being made by: (i) each Majority Holder (as to itself only), and
(ii) Mackay in respect of the Other Mackay Holders, and not Mackay
individually in any other respect.
SECTION 5.01. Organization. Such party is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has the requisite corporate power and authority to execute
and deliver this Agreement (in the case of Mackay) on behalf of the Majority
Holder and with respect to the Other Mackay Holders and any other agreement or
document executed or to be executed by such party (in the case of Mackay) on
behalf of the Majority Holder and/or with respect to the Other Mackay Holders
in connection herewith and to perform and comply with (or cause to be
performed and complied with) all of the terms, covenants, and conditions to be
respectively performed and complied with by the Majority Holder and/or with
respect to the Other Mackay Holders hereunder or thereunder. Each Majority
Holder has the full corporate power and authority to own, lease, and operate
its property and to carry on its business as now conducted.
SECTION 5.02. Authorization. The execution, delivery, and performance by
such party of this Agreement and all other agreements contemplated hereby and
the consummation by such party of the transactions contemplated hereby and
thereby to be consummated by such party, have been duly approved or authorized
by all necessary corporate action on its part (if any). No other corporate
action is necessary for the authorization, execution, delivery, and
performance by such party of this Agreement or any other agreement or document
executed or to be executed by such party, or for the consummation by such
party of the transactions contemplated hereby or thereby to be consummated by
such party. When duly authorized, executed and delivered by the other parties
hereto, this Agreement and all such other documents or instruments shall
constitute the valid and binding obligations of such party, enforceable
against such party in accordance with their respective terms, except as
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general and subject to general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
SECTION 5.03. Non-Contravention. The execution of this Agreement by such
party, and the delivery and performance of this Agreement by such party and
each of the other documents and instruments required to be entered into
pursuant to this Agreement by such party: (a) will not violate or conflict
with any provision of the organizational documents of such party, (b) will not
conflict with or constitute a violation by such party of any applicable law,
judgment, order, injunction, decree, rule, regulation or ruling of any
Governmental Authority applicable to such party, the enforcement of which
would have a material adverse effect on such party's ability to perform its
obligations hereunder or consummate the transactions contemplated hereby, and
(c) will not, either alone or with the giving of notice or the passage of
time, or both, modify, violate, conflict with, constitute grounds for
termination of, or accelerate the performance required by, or result in a
breach or default of the terms, conditions or provisions of, or constitute a
default under any contract, agreement, note, bond, mortgage, indenture, deed
of trust, license, franchise, permit, commitment, waiver, exemption, order,
obligation, lease, sublease, undertaking, agreement, offer or other
instrument, which violation, conflict, termination, acceleration, breach or
default would have a material adverse effect on the ability of such party to
perform its obligations hereunder or consummate the transactions contemplated
hereby.
SECTION 5.04. Consents and Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Authority is required by or with respect to such party for the
valid execution and delivery of this Agreement or the valid consummation by
such party of the transactions contemplated hereby except for: (i) the filing
by the Company of the Proxy Statement with the SEC for use in connection with
the Stockholders Meeting to approve the transactions contemplated hereby; (ii)
filings by such Majority Holder or Mackay required under Section 13(d) of the
Exchange Act; (iii) any filings required under the HSR Act, and comments,
waivers or approvals obtained with respect to all the foregoing.
SECTION 5.05. Compliance with Law; Litigation. Such Party is not in
violation of any material law, regulation, or ordinance, or any other material
requirement of any Governmental Authority, nor is it subject to any judgment,
award, order, writ, injunction, arbitration, decision, or decree that would,
in each case, have a material adverse effect on its ability to enter into this
Agreement or consummate the transactions contemplated hereby and perform its
obligations hereunder. There is no claim, litigation, administrative,
arbitral, or other proceeding or petition or complaint, or to the knowledge of
such party, investigation before any court or Governmental Authority pending
or, to the knowledge of such party, threatened against such party, which seeks
to enjoin or prohibit, or that otherwise would have a material adverse effect
on, such party's ability to perform its obligations under this Agreement and
consummate the transactions contemplated hereby.
SECTION 5.06. Ownership of Notes. Mackay represents that the Majority
Holders are the beneficial holders in the aggregate of not less than
$65,337,000 in principal amount of Notes, and that the Other Mackay Holders
are the beneficial holders in the aggregate of not less than $5,425,000 in
principal amount of Notes. Such Notes will be delivered at Closing in the
manner set forth herein free and clear of any and all Liens of any kind,
nature or description.
SECTION 5.07. Acquisition for Investment. Each Majority Holder
represents, covenants, and agrees that, upon the Closing, it will acquire the
Majority Holder Shares, and Mackay represents, covenants, and agrees that upon
the Closing the Other Mackay Holders will acquire the Other Mackay Holders
Shares, for its own account for the purpose of investment and not with a view
toward resale or public distribution thereof, except in compliance will all
applicable securities laws and regulations, whether foreign or domestic, and
as otherwise contemplated by the Registration Rights Agreement; provided,
however, that the disposition of each of Majority Holder's and Other Mackay
Holders' property shall at all times be and remain within its control. Each of
Majority Holder and Other Mackay Holders is an "accredited investor," as that
term is defined by Rule 501 of regulation D, promulgated under the Securities
Act.
SECTION 5.08. Majority Holder Shares Not Registered. Such party
acknowledges that at the Closing, the Majority Holder Shares and the Other
Mackay Holders Shares are being issued pursuant to a Section 3(a)(9) exemption
from the registration requirements of the Securities Act, and that the Shares
have not been registered under the Securities Act or applicable state
securities laws. The Majority Holder Shares and the Other Mackay Holders
Shares shall also be issued at the Closing in a transaction exempt from
registration under the Security Act by virtue of Section 4(2) thereof, and
under applicable state securities laws. The Majority Holder Shares and the
Other Mackay Holders Shares shall bear substantially the following legend
until the earlier of (i) the delivery by Majority Holder and the Other Mackay
Holders of an opinion of counsel that, due to the availability of the Section
3(a)(9) exemption (or another exemption) the Majority Holder Shares and the
Other Mackay Holders Shares are not deemed "restricted" or (ii) such Majority
Holder Shares and the Other Mackay Holders Shares being registered under the
Securities Act:
THE OFFER AND SALE OF THE SECURITIES OF THIS COMPANY REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY FOREIGN OR STATE SECURITIES LAWS, AND
THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS THE OFFER AND SALE THEREOF ARE REGISTERED UNDER SUCH LAWS
OR EXEMPTIONS FROM REGISTRATION ARE AVAILABLE AND THE COMPANY HAS
BEEN FURNISHED WITH AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY AND KNOWLEDGEABLE AS TO SECURITIES MATTERS STATING THAT
EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE AND
THAT THE PROPOSED SALE DOES NOT, AND WILL NOT PLACE THE COMPANY NOR
ANY AFFILIATE THEREOF, IN VIOLATION OF ANY APPLICABLE FEDERAL, STATE
OR FOREIGN SECURITIES LAW, OR ANY RULE OR REGULATION PROMULGATED
THEREUNDER.
SECTION 5.09. Risk of Investment. Such Party recognizes, acknowledges and
warrants that it has such knowledge and experience as to be capable of
evaluating the merits and risks of the investment in the Company and it is
aware of the speculative nature of and risks of loss associated with such
investment.
SECTION 5.10. No Government Review. Such party acknowledges and agrees
that the Exchange Offer being effected hereby and the documents to effect such
exchange have not been reviewed or approved by any Governmental Authority, nor
has any such Governmental Authority made any finding or determination as to
the fairness of the terms of such exchange.
ARTICLE VI
CORPORATE GOVERNANCE MATTERS
SECTION 6.01. Appointment of Directors. (a) The Company hereby agrees
that, at and after the Closing, the Board shall consist of seven directors.
The Company further agrees that Buyer shall be entitled to designate, and
concurrent with the Closing, shall have elected to the Board, two (2) members
of the Board (any and all directors designated by Buyer pursuant to the terms
of this Section 6.01 shall be referred to herein as the "Investor Directors");
provided, however, that in the event that the size of the Board shall be
increased, Buyer shall have the right to at least proportionate representation
on the Board following such increase based on the composition of the Board as
between Investor Directors and non-Investor Directors immediately prior to
such increase; and provided, further, that in no event shall the Board consist
of more than eleven directors. Buyer agrees to designate any Investor
Directors to be appointed to the Board pursuant to the terms of this Section
6.01 by way of written notification to the Company. Each of such Investor
Directors shall serve until his or her successor is elected or appointed or
qualified or, if earlier, until his or her death, resignation, or removal. The
parties further agree that Buyer shall be entitled at all times upon five (5)
days prior written notice to the Company to designate additional members of
the Board such that the number of Investor Directors taken as a percentage is
at least equal to Buyer's Voting Power Ownership Percentage (rounded up to the
nearest whole number); provided, however, that under no circumstance shall
Buyer be precluded from designating at least two members of the Board
regardless of Buyer's Voting Power Ownership Percentage (rounded up to the
nearest whole number). Notwithstanding the foregoing, if at any time the
Buyer's Voting Power Ownership Percentage is less than 5% Section 6.03 hereof
shall terminate.
(b) In accordance with the foregoing, the Company hereby agrees that,
from and after the Closing Date the Company shall cause (i) each person
designated by Buyer as an Investor Director in accordance with the provisions
of Section 6.01(a) to be included (consistent with applicable law and the
Amended and Restated Certificate of Incorporation) in the group of nominees
who are recommended for election as directors by the management of the Company
following the date on which such person is so designated by Buyer as an
Investor Director, and at each succeeding meeting of stockholders of the
Company when directors in such designee's class are to be elected, (ii) at a
special meeting of the Board held as soon as practicable after the creation of
any vacancy as a result of the death, resignation or removal of an Investor
Director, the appointment of such person as is designated by Buyer to fill any
such vacancy if a special meeting is required to effect such appointment, and
(iii) at such time as Buyer wishes to designate additional Investor Directors
in accordance with the provisions of Section 6.01(a), to be taken at a special
meeting of the Board held as soon as practicable after Buyer notifies the
Company of its desire to designate such directors (and prior to taking any
other actions) and any and all action necessary to enlarge the Board in order
to enable election of the additional Investor Directors so designated by Buyer
to fill any such vacancies created thereby and to fill such vacancies with
such Directors. The Company shall not be in violation of this Section 6.01 to
the extent that Buyer fails to designate Investor Directors or such designees
elect not to serve as Investor Directors. For purposes of this Agreement, the
Company shall be in compliance with this Section 6.01 if it uses all
reasonable efforts to cause the Investor Directors to be elected to the Board
in accordance with this Section 6.01.
(c) As of the Closing and for as long as Buyer owns any shares of Common
Stock, the Bylaws of the Company shall provide that all actions taken by any
committee of the Board shall be recommendations that shall be submitted to the
full Board for approval unless, prior to such action being taken, the Board
has adopted a resolution expressly delegating to the committee the power to
take the action in question.
(d) The Company shall not, and shall not permit its Affiliates to,
solicit proxies (as such terms are used in the proxy rules of the SEC) of the
stockholders of the Company to vote against any Investor Director or for the
approval of any stockholder or other proposals that are inconsistent with the
rights afforded Buyer pursuant to this Agreement.
(e) In addition to any compensation to which the members of the Board may
be entitled, the Company shall reimburse each Investor Director for the
reasonable out-of-pocket expenses incurred by such director. In addition, the
Company shall obtain and maintain at all times during which this Agreement
remains in effect, at the cost and expense of the Company, director liability
insurance policies covering each member of the Board.
SECTION 6.02. Committees. Subject to any law or stock exchange rule
prohibiting committee membership by Affiliates of the Company, Buyer shall be
entitled to at least proportionate representation (and in any event not less
than one) by Investor Directors on any committee of the Board based on the
composition of the Board as between Investor Directors and non-Investor
Directors.
SECTION 6.03. Voting Matters. In addition to any vote or consent of the
Board or its stockholders required by law or the Certificate of Incorporation,
so long as Buyer has the right to designate Investor Directors in accordance
with the terms of Section 6.01, neither the Company nor the Board shall cause
or permit to occur any of the following events without the affirmative vote of
all of the Investor Directors:
(i) any capital expenditure by the Company or any Subsidiary of the
Company which is not contemplated in any current annual budget and which,
individually or in the aggregate, exceeds $200,000;
(ii) the hiring or termination by the Company or any Subsidiary of
the Company of any officer or senior executive reporting to the chief
executive officer with an annual salary of $130,000 or more or the
entering into of any new or amendment of any existing employment or
severance agreement or any change of control agreement with any such
officer or senior executive reporting directly to the chief executive
officer;
(iii) the direct or indirect redemption, purchase or making of any
payments with respect to any stock appreciation rights, phantom stock
plans or similar rights or plans;
(iv) (A) the sale, lease, transfer or other conveyance, or
permitting of any Subsidiary to sell, lease, transfer or otherwise
convey, any assets representing five percent (5%) or more of the
consolidated assets of the Company or its Subsidiaries, (B) the
consolidation or merger with, or permitting any Subsidiary to consolidate
or merge with, any Person, (C) the recapitalization, reclassification or
other change, or permitting any Subsidiary to recapitalize, reclassify or
otherwise change, any capital stock of the Company or any Subsidiary,
including the splitting, combination or subdivision of any shares of
capital stock, or (D) except as would not violate the duties of the
directors or as otherwise required by law, the taking or instituting of
any proceedings relating to bankruptcy, or the dissolution, liquidation
or winding-up of the Company or permitting any Subsidiary to take or
institute any proceedings relating to bankruptcy, or dissolving,
liquidating or winding-up such Subsidiary.
`except as expressly contemplated by this Agreement, the authorization,
issuance or entering into of any agreement providing for the issuance, or
permitting of any Subsidiary to authorize, issue or enter into any agreement
providing for the issuance, purchase, acquisition, or redemption (contingent
or otherwise) of (A) any notes or debt securities containing equity features
(including, without limitation, any note or debt securities convertible into
or exchangeable for capital stock or other equity securities, issued in
connection with the issuance of capital stock or other equity securities, or
containing profit participation features) or (B) any capital stock or other
equity securities, or any securities convertible into or exchangeable for any
capital stock or other equity securities, other than issuances pursuant to the
Company Option Plan;
(v) the acquisition, or permitting of any Subsidiary to acquire, in
one transaction or a series of related transactions, and by means of
merger, consolidation, or otherwise, any capital stock, other equity
interest or assets of, or any direct or indirect ownership of, any
Person;
(vi) the entering into, or permitting of any Subsidiary to enter
into, any agreement, contract, lease or commitment on the part of the
Company or such Subsidiary the fair market value of which exceeds
$200,000;
(vii) except as expressly contemplated by this Agreement, the
amendment of the Certificate of Incorporation, or the Company's Bylaws or
the filing of any resolution of the board of directors with the Secretary
of State of the State of Delaware containing any provisions which would
adversely affect or otherwise impair the rights of the holders of the
Common Stock or would be inconsistent with the provisions of this
Agreement or the rights of Buyer hereunder;
(viii) the entering into, or permitting any Subsidiary to enter
into, any agreement to do or effect any of the foregoing or the creation
of any subsidiary in which the Company has an economic interest;
(ix) directly or indirectly incur any indebtedness or liability for
borrowed money or guarantee such indebtedness or enter into any agreement
to become contingently liable, by guaranty or otherwise, for the
obligations or indebtedness of any Person or make or commit to make any
loans, advances or capital contributions to, or investments in, any
Person or to any other Person, or refinance or restructure any existing
loan; provided, however; that this clause (x) shall exclude (i) the
incurrence of trade indebtedness or contingent liabilities in the
ordinary course of business; (ii) the making of guarantees in the
ordinary course of business for a bona fide business purpose; (iii) the
making of advances in the ordinary course of the business for a bona fide
business purpose; and (iv) the making of bank deposits and other
investments in marketable securities and cash equivalents made in the
ordinary course of business and consistent with past practice.
(x) the placing, permitting, allowing or offering to exist of any
Lien on any of its assets or properties other than Permitted Liens and
Liens entered into in the ordinary course;
(xi) the Company's entering into any lines of business which is not
its Existing Line of Business or contemplated by the MPL License or any
joint ventures, partnerships or similar arrangements;
(xii) the Company's exiting its Existing Line of Business;
(xiii) the adoption, implementation or acceptance (including the
failure to opt out) of any Anti-Takeover Provision not in effect as of
the date hereof or the provisions of Section 203 et seq. of the DGCL or
any other state anti-takeover statute that would be applicable to, and,
in the reasonable determination of Buyer, adversely affect, Buyer and its
Affiliates, or any transferees of Buyer's Purchase Shares or Technology
Shares; or
(xiv) the entering into, or permitting of any Subsidiary to enter
into, any agreement to do or effect any of the foregoing.
SECTION 6.04. Certificate of Incorporation; Bylaws. After the date
hereof, the Company and Buyer shall take or cause to be taken all lawful
action necessary to ensure at all times as of and following the Closing Date
that the Amended and Restated Certificate of Incorporation and Bylaws of the
Company are not inconsistent with the provisions of this Agreement or the
transactions contemplated hereby, including the provisions of this Article VI,
and that none of the provisions of this Agreement or the Amended and Restated
Certificate of Incorporation in the Bylaws of the Company may be amended by
the Board absent the affirmative vote of the Investor Directors.
SECTION 6.05. Majority Holder Transferees. Neither the Company nor the
Board shall cause or permit to occur, without the prior written consent of
Majority Holder, the adoption, implementation or acceptance (including the
failure to opt out) of any Anti-Takeover Provision not in effect as of the
date hereof or the provisions of Section 203 et. seq. of the DGCL or any other
state takeover statute that would be applicable to, and, in the reasonable
determination of Majority Holder, adversely affect, Majority Holder and its
Affiliates, or any transferees of any of the Majority Holder Shares.
ARTICLE VII
COVENANTS AND AGREEMENTS
SECTION 7.01. Conduct of the Business. During the period from the date of
this Agreement until the Closing, the Company will not take and will cause its
Subsidiary not to take any action that materially and adversely affects its
ability to, and the Company covenants and agrees that it will (i) pursue its
business in the ordinary course and in the same manner as presently conducted,
(ii) seek to preserve intact its current business organization, and (iii) use
its commercially reasonable efforts to preserve its relationships with
customers, suppliers and others having business dealings with it. During such
period, except as contemplated by this Agreement the Company shall not permit
to occur without Buyer's prior written consent, any of the items enumerated in
Section 6.03, as well as the following additional matters:
(a) except with respect to options currently outstanding under the
Company Option Plan, the issuance, delivery, sale, disposition, pledge or
other encumbrance, or authorize or propose the issuance, delivery, sale,
disposition, pledge or other encumbrance of (i) any shares of any class of its
capital stock, or any securities or rights convertible into, exchangeable for
or evidencing the right to subscribe for any shares of its capital stock, or
any rights, warrants, options, calls, commitments or any other agreements of
any character to purchase or acquire any shares of its capital stock or any
securities or rights convertible into, exchangeable for or evidencing the
right to subscribe for any shares of its capital stock, or (ii) any other
securities in respect of, in lieu of, or in substitution for, any shares of
its capital stock outstanding on the date hereof; provided, however, that the
Company may issue at any time prior to Closing up to $1,000.00 of non-voting
preferred stock, which preferred stock will not have any liquidation or any
other rights disproportionate with the amounts of preferred stock issued.
(b) (i) grant any increases in the compensation of any of its directors,
officers or employees, (ii) pay or agree to pay any pension or retirement
allowance or other employee benefit not required or contemplated by any Plan
as in effect on the date hereof to any such director, officer or employee,
whether past or present, (iii) enter into any new or amend any existing
employment or severance agreement or any change of control agreement with any
such director, officer or employee, (iv) except for bonuses granted and
approved by the Compensation Committee of the Board for the officers of the
Company in 2000 and on February 6, 2001, pay or agree to pay any bonus to any
director or officer (whether in the form of cash, capital stock or otherwise),
(v) enter into, or negotiate, any collective bargaining agreement with respect
to employees of the Company except as required by law, (vi) except as may be
required to comply with applicable law, amend any existing, or become
obligated under any new Plan, or (vii) except in the ordinary course, hire any
salaried employees;
(c) the incurrence of any indebtedness or liability for borrowed money or
guarantee of such indebtedness or agreement to become contingently liable, by
guaranty or otherwise, other than guarantees made in the ordinary course of
business for a bona fide business purpose, for the obligations or indebtedness
of any Person or making or committing to make any loans, advances other than
advances made in the ordinary course for a bona fide business purpose or
capital contributions to, or investments in, any Person or to any other
Person, except for bank deposits and other investments in marketable
securities and cash equivalents made in the ordinary course of its business
consistent with past practice, or refinance or restructure any existing loan;
(d) the entering into of any agreement providing for acceleration of
payment or performance or other consequence as a result of a change of control
of the Company;
(e) the entering into of any contract, arrangement or understanding
requiring the purchase or delivery of equipment, materials, supplies or
services over a period greater than 12 months which is not cancelable without
penalty on 30 or fewer days' notice and that involves an expenditure or
liability in the aggregate in excess of $10,000;
(f) forgive any indebtedness owed to the Company except for forgiveness
of $25,000 or less associated with settlement of accounts receivable of
customers in the ordinary course of business or converting or contribution by
way of capital contribution of any such indebtedness owed, or settlement or
canceling of any claims that it may possess or waiver of any rights of
material value or surrendering or abandonment of any property, tangible or
intangible, or rights of any material value;
(g) the entering into of, modification or extension of, any agreement,
contract or commitment involving an expenditure in excess of $100,000 for any
one such agreement, contract or commitment except for inventory purchase
commitments for less than $500,000 and for a purchase commitment term of less
than four months;
(h) the placing, permitting, allowing or offering to exist of any Lien on
any of its assets or properties other than Permitted Liens;
(i) except for obsolete equipment and inventory, the sale or other
disposition of any real property or any material amount of tangible or
intangible personal property other than properties acquired in foreclosure or
otherwise in the ordinary collection of indebtedness;
(j) the foreclosure upon or other taking of title to or possession or
control of any real property without first obtaining a phase one environmental
report thereon;
(k) the entering into of any new, or modification, amendment or extension
of, the terms of any existing contracts relating to the purchase or sale of
financial or other futures, or any put or call option relating to cash,
securities or commodities or any interest rate swap agreements or other
agreements relating to the hedging of interest rate risk, except in the
ordinary course of business consistent with past practices and prudent
business practices;
(l) except with respect to currently outstanding options under the
Company Option Plan, the entering into of any securities transaction for its
own account or purchase or otherwise acquire any investment security for its
own account other than securities backed by the full faith and credit of the
United States or an agency thereof;
(m) the making of any material changes in its pricing policies related to
its products;
(n) the authorization or entering into of any agreement providing for
management or advisory services to be provided by or to such party;
(o) the mortgage, pledge, encumbrance, sale, lease, license, or other
transfer or disposition of any of its assets, including real or personal
property, provided that the sale of inventory in the ordinary course is not
precluded by this clause;
(p) the implementation or adoption of any changes in its accounting
principles, practices or methods, other than as may be required by GAAP;
(q) knowingly taking any action that would materially impede or delay the
consummation of the transactions contemplated by this Agreement or the ability
of the parties hereto to obtain any approval of any regulatory authority
required for the transactions contemplated by this Agreement or the
performance of its covenants and agreements under this Agreement;
(r) performing any act or omitting to take any action that would make any
of the representations or warranties contained in this Agreement inaccurate or
materially misleading as of the Closing or that would cause a breach of any of
the covenants or agreements of this Agreement.
(s) the settling of any material tax audit, make or change any tax
election, or the amendment of any Tax Return;
(t) the institution, termination or settlement of any litigation, except
to the extent that failure to do so would prejudice the Company's or any of
its Subsidiaries' rights;
(u) the authorization or announcement of an intention to do any of the
foregoing, or the entering into of any contract, agreement, commitment or
arrangement to do any of the foregoing.
SECTION 7.02. Officers and Employees. The Company agrees that, prior to
the Closing, it will use its commercially reasonable efforts to encourage its
officers and employees to the extent they are in good standing to maintain
their employment with the Company after the Closing.
SECTION 7.03. Meeting of Stockholders. The Company hereby covenants and
agrees that it shall, as promptly as practicable, take all action necessary in
accordance with applicable law and its Certificate of Incorporation and Bylaws
to convene a meeting of its stockholders (the "Stockholders Meeting") and
shall use all commercially reasonable efforts to hold such meeting as promptly
as practicable after the date hereof. The purpose of such meeting shall be,
among other things, to consider and vote upon the approval of the transactions
contemplated by the Agreement. Subject to the fiduciary duties of the Board
under applicable law as advised by counsel, the Board shall recommend and
declare advisable such approval and the Company shall take all lawful action
to solicit such approval, including, without limitation, the inclusion of the
recommendation of the Board in the Proxy Statement that the stockholders of
the Company vote in favor of the approval of all the transactions contemplated
hereby.
SECTION 7.04. Proxy Materials. (a) As soon as practicable after the date
hereof, the Company shall prepare, and Buyer and Majority Holder shall
cooperate in the preparation of, and the Company shall file with the SEC, the
Proxy Statement and a form of proxy, in connection with the vote of the
Company's stockholders with respect to the transactions contemplated by the
Agreement. The Company will use all reasonable efforts to cause the Proxy
Statement to be mailed to stockholders of the Company at the earliest
practicable date as permitted by the SEC and applicable laws.
(b) If at any time prior to the Closing Date, any event relating to or
affecting the Company, Buyer, or Majority Holder shall occur as a result of
which it is necessary, in the opinion of counsel for the Company, Buyer or
Majority Holder to supplement or amend the Proxy Statement in order to make
such document not misleading in light of the circumstances existing at the
time approval of the stockholders of the Company is sought, the Company, Buyer
or Majority Holder will notify the other parties hereto thereof and, in the
case of Buyer or Majority Holder, it will cooperate with the Company in
preparing, and, in the case of the Company, it will prepare and file, an
amendment or supplement with the SEC and, if required by law or the rules and
regulations under the Exchange Act, applicable state securities authorities
and each national securities exchange upon which the Common Stock is then
listed for trading and/or quotation system on which such stock is quoted such
that such document, as so supplemented or amended, will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances existing
at such time, not misleading, and the Company will, as required by law,
disseminate to its stockholders such amendment or supplement.
SECTION 7.05. HSR Act and Other Filings. The Company, Buyer, and Majority
Holder shall, as soon as practicable after the date hereof, and at their own
respective expense, file in connection with the transactions contemplated by
this Agreement any reports or notifications that may be required to be filed
by them (if any) under the HSR Act with each of the Department of Justice and
the Federal Trade Commission and shall cooperate with each other with respect
to such filing. The Company, Buyer, and Majority Holder further agree that
they each shall, at their own expense, utilize commercially reasonable efforts
to respond to any and all requests for additional information, or other formal
or informal requests for information, witnesses or documents that may be made
by the Department of Justice or the Federal Trade Commission and shall
cooperate in attempting to secure early termination of any applicable waiting
period. The Company, Buyer, and Majority Holder shall make or cause to be made
all such other filings and submissions with any Governmental Authority under
laws and regulations applicable to the Company, Buyer, and Majority Holder, if
any, as may be required of the Company, Buyer, and Majority Holder for the
consummation of the transactions contemplated by this Agreement. The Company,
Buyer, and Majority Holder shall coordinate and cooperate with one another and
shall each furnish to the other all such information in their possession and
provide such reasonable assistance as may be required for the completion of
the reports or notifications to be filed by such other parties under this
Section 7.05 or under any other provision of this Agreement. Each of the
parties further agrees to keep the other party fully apprised of its actions
with respect to any and all filings referred to in this Section 7.05 or in any
other provision of this Agreement.
SECTION 7.06. No Transfers. Notwithstanding any other provision in this
Agreement, (i) Majority Holder agrees that (x) from and after the execution
hereof and through the earlier of the Closing or the termination of this
Agreement, it shall not sell, transfer, dispose of, or otherwise convey to any
Person any Majority Holder Notes, and (y) subject to the conditions and the
terms set forth in this Agreement, on the Closing, Majority Holder will
exchange 100% of the Majority Holder Notes for the Majority Holder Shares, and
(ii) Buyer agrees that from and after the execution hereof, it shall not sell,
transfer, dispose of, or otherwise convey to any Person any capital stock of
Buyer Sub 1 or Buyer Sub 2 and that, on the Closing, Buyer shall transfer 100%
of the share capital of Buyer 1 Sub to the Company.
SECTION 7.07. Transfer Restriction. The Company and Majority Holder agree
that (i) during the 180 day period following the Closing, the Majority Holder
will not directly or indirectly, sell, offer to sell, grant any option for the
sale of, enter into any agreement to sell, or otherwise dispose of any shares
of Common Stock held by it, (ii) during the 90 day period thereafter, Majority
Holder shall have the right to, directly or indirectly, sell, offer to sell,
grant any option for the sale of, enter into any agreement to sell, or
otherwise dispose of up to twenty-five percent (25%) in the aggregate of the
shares of Common Stock held by it immediately following the Closing (which
number shall be adjusted in accordance with all splits, pro rata stock
dividends or reclassifications of the Common Stock), and (iii) during the 90
day period thereafter, Majority Holder shall have the right to, directly or
indirectly, sell, offer to sell, grant any option for the sale of, enter into
any agreement to sell, or otherwise dispose of up to an aggregate of fifty
percent (50%) in the aggregate of the shares of Common Stock held by it
immediately following the Closing (which number shall be adjusted in
accordance with all splits, pro rata stock dividends or reclassifications of
the Common Stock). Following the one-year anniversary of the Closing, the
shares of Common Stock held by Majority Holder shall be free of all
contractual resale restrictions. At any time Majority Holder desires to
dispose of shares in accordance with the terms of this Section 7.07 (other
than in an underwritten offering), Majority Holder shall agree to dispose of
such shares through a broker reasonably acceptable to Majority Holder and the
Company, or in market transactions whereby Majority Holder disposes on any
given day such number of shares not to exceed 80% of the average trading
volume of the Company's Common Stock over the previous 20 trading day period.
Subject to the other terms and conditions of this Agreement, the Company and
Buyer agree to cooperate reasonably with Majority Holder so that Majority
Holder may achieve liquidity with respect to the Majority Holder Shares as
soon as practicable, and at the best available price, including without
limitation, by exempting or approving any purchaser of Common Stock under any
Anti-Takeover Provisions, and under Section 203 et. seq. of the DGCL and any
other state takeover statute applicable to a transaction contemplated by
Majority Holder and a purchaser.
SECTION 7.08. Notification. Between the date hereof and the Closing Date,
each of the Company, Buyer (as to itself and Buyer Sub 1 and Buyer Sub 2), and
Majority Holder shall notify the other parties of any material litigation,
arbitration or administrative proceeding (including any Government Authority
complaint or proceeding) pending or, to each of such party's knowledge,
threatened against such party that challenges or materially affects such
party's ability to perform its obligations hereunder or the transactions
contemplated hereby or that could reasonably be expected to cause any
Government Authority to deny its consent to the transactions contemplated by
this Agreement or that reasonably could be expected to have a Material Adverse
Effect on the Company or of any failure on the part of such party to comply
with or satisfy any covenant or agreement to be complied with or satisfied by
it hereunder; provided, however, that the delivery of such notice pursuant to
this Section 7.08 shall not limit or otherwise effect any remedies available
to the party receiving such notice. Each party shall promptly disclose to the
other party in writing any information set forth in the Disclosure Statement
hereto that no longer is correct and any information of a nature of that set
forth in the Disclosure Statement that arises after the date hereof and which
would have been required to be included in the Disclosure Statement if such
information had been available prior to the date hereof. No disclosure by any
party pursuant to the immediately preceding sentence shall be deemed to amend
or supplement the disclosures set forth on the Disclosure Statement or prevent
or cure any misrepresentations, breach of warranty or breach of covenant.
SECTION 7.09. Additional Issuances. (a) At any time after the date
hereof, if the Company shall issue or propose to issue any additional shares
of Common Stock, warrants, options or other rights or instruments of any kind
convertible into or exercisable or exchangeable for shares of Common Stock
(the "Additional Securities"), (i) each of Buyer and Majority Holder shall
have the right to subscribe for and to purchase at the same price per share
that number of Additional Securities necessary to maintain such party's
fully-diluted percentage beneficial equity interest as of the Closing. Any
offer of Additional Securities made to Buyer or Majority Holder under this
Section 7.09 shall be made by notice in writing (the "Subscription Notice") at
least 10 Business Days prior to the date on which a meeting of the Board is
held to authorize the issuance of such Additional Securities. The Subscription
Notice shall set forth (i) the number of Additional Securities proposed to be
issued to Persons other than Buyer and Majority Holder and the terms of such
Additional Securities, (ii) the consideration (or manner of determining the
consideration), if any, for which such Additional Securities are proposed to
be issued and the terms of payment, (iii) the number of Additional Securities
offered to Buyer and Majority Holder in compliance with the provisions of this
Section 7.09 and (iv) the proposed date of issuance of such Additional
Securities. Not later than 20 Business Days after its receipt of a
Subscription Notice, Buyer and Majority Holder shall each separately notify
the Company in writing whether it elects to purchase all or any portion of the
Additional Securities offered to such party, pursuant to the Subscription
Notice. If Buyer or Majority Holder elects to purchase any such Additional
Securities, the Additional Securities that it shall have elected to purchase
shall be issued and sold to such party by the Company at the same time and on
the same terms and conditions as the Additional Securities are issued and sold
to third parties. If, for any reason, the issuance of Additional Securities to
third parties is not consummated, Buyer's right or Majority Holder's right to
its share of such issuance shall lapse, subject to Buyer's ongoing
subscription right with respect to issuances of Additional Securities at later
dates or times.
(b) At any time after the date hereof, but prior to the Closing Date, if
the Company shall issue Additional Securities, the Company agrees that it
shall take all such action as is necessary to adjust the Exchange Ratio to the
extent necessary to ensure that Holders own an aggregate of 30% (assuming all
Holders were to exchange their Notes for Common Stock, and to the extent not
all Holders have effected such exchange, such proportionate lesser percentage)
of all of the issued and outstanding shares of Common Stock of the Company on
a fully diluted basis, after giving effect to the transactions contemplated by
this Agreement.
(c) The Company represents and covenants to Buyer and/or Majority Holder
that (i) upon issuance, all the shares of Additional Securities sold to Buyer
and/or Majority Holder pursuant to this Section 7.09 shall be duly authorized,
validly issued, fully paid and nonassessable and will be approved (if
outstanding securities of the Company of the same type are at the time already
approved) for listing on the Nasdaq Stock Market or for quotation or listing
on the principal trading market for the securities of the Company at the time
of issuance, (ii) upon delivery of such shares, they shall be free and clear
of all Liens of any nature and shall not be subject to any preemptive right of
any stockholder of the Company, and (iii) in connection with any such
issuance, the Company shall take such actions as are specified in Section 3.09
with respect to such shares.
SECTION 7.10. No Inconsistent Action. Each of the Company, Buyer, and
Majority Holder agrees that it shall not take any action that is materially
inconsistent with any of its respective obligations under this Agreement.
SECTION 7.11. Conditions. The Company, Buyer, and Majority Holder
covenant and agree that, subject to the provisions of Article VIII hereof, if
any event should occur, either within or without the control of any party
hereto, that would prevent fulfillment of the conditions upon the obligations
of any party hereto to consummate the transactions contemplated by this
Agreement, then the party as to which such event relates shall use all
commercially reasonable efforts to cure the event as expeditiously as
possible; provided, however, that in such event, none of the parties shall
have any obligation to take any action not specifically required by the terms
of this Agreement to cure such event that is unduly burdensome or that would
have a Material Adverse Effect on it or on the Company.
SECTION 7.12. Confidential Information. (a) The Company, Buyer, and
Majority Holder for themselves, their respective directors, officers,
employees, Affiliates, agents and representatives covenant with each other
that they each will use all information relating to the other parties acquired
by them pursuant to the provisions of this Agreement or in the course of
negotiations with, or examinations of, the other parties only in connection
with the transactions contemplated hereby and not in any way detrimental to
the other parties and shall cause all information obtained by them pursuant to
this Agreement and such negotiations and examinations that are not publicly
available to be treated as confidential and in accordance with the terms of
(i) that certain Confidentiality Agreement, dated July 21, 2000, by and
between Buyer and the Company (the "Buyer Confidentiality Agreement"), and
(ii) that certain Confidentiality Agreement by and between Mackay and the
Company except as may otherwise be required by law or as may be necessary or
appropriate in connection with the enforcement of this Agreement or any
instrument or document referred to herein or contemplated hereby. Buyer
expressly agrees that the Buyer Confidentiality Agreement shall apply to Buyer
Sub 1 and Buyer Sub 2.
(b) Notwithstanding the provisions of this Section 7.12, in the event of
termination of this Agreement, each of the parties will cause to be delivered
to the other all documents, work papers and other material obtained by it from
the other, whether so obtained before or after the execution of this
Agreement, and each such party agrees that it shall not use or disclose,
directly or indirectly, any information so obtained, or otherwise obtained
from the other hereunder or in connection therewith, provided that (i) any
such party may use and disclose any such information that has been disclosed
publicly (other than by such party or any Affiliate thereof in breach of its
obligations under this Section 7.12), and (ii) to the extent that any such
party or any Affiliate thereof may become legally compelled to disclose any
such information, such party shall use all commercially reasonable efforts,
and shall afford the other parties the opportunity, to obtain an appropriate
protective order, or other satisfactory assurance of confidential treatment,
for the information required to be disclosed.
SECTION 7.13. Cooperation. The Company, Buyer, and Majority Holder
covenant and agree to cooperate fully with each other in taking any actions,
including actions to obtain the required consent of any Governmental Authority
or any third party necessary to effect the transactions contemplated by this
Agreement; provided, however, that no party shall be required by this Section
7.13 to take any action not specifically required by the terms of this
Agreement that would have a Material Adverse Effect upon it or the Company or
would be unlawful.
SECTION 7.14. Consent of Certain Investors. The Company covenants and
agrees that it will exercise commercially reasonable efforts to (a) obtain the
approval of the transactions contemplated by this Agreement from Cingular
Wireless as the holder of all of the outstanding shares of Class B Common
Stock, as required by the Certificate of Incorporation of the Company, and (b)
to encourage Xxxx Xxxxx International Investment Corporation and Carlyle
HighwayMaster Investors to vote in favor of the transactions contemplated by
this Agreement.
SECTION 7.15. Certain Actions. (a) The Company agrees that it shall not,
and that it shall use its best efforts to cause its employees, agents and
representatives (including any investment banker, attorney or accountant
retained by it) not to, directly or indirectly, (i) initiate, solicit,
encourage or knowingly facilitate any inquiries or the making of any proposal
or offer with respect to, or a transaction to effect, a merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
the Company, or any purchase or sale of the assets of the Company, or any
purchase or sale of, or tender exchange offer for, the equity securities of
the Company that, if consummated, would result in any Person (or the
stockholders of such Person) beneficially owning securities representing 10%
or more of the total voting power of the Company (any such proposal, offer or
transaction being hereinafter referred to as an "Acquisition Proposal"), (ii)
have any discussion with or provide any confidential information or data to
any Person relating to an Acquisition Proposal, or engage in any negotiations
concerning an Acquisition Proposal, or knowingly facilitate any effort or
attempt to make or implement an Acquisition Proposal, (iii) approve or
recommend, or propose publicly to approve or recommend, any Acquisition
Proposal, or (iv) approve or recommend, or propose to approve or recommend, or
execute or enter into, any letter of intent, agreement in principle, merger
agreement, acquisition agreement, option agreement or other similar agreement
or propose publicly or agree to do any of the foregoing related to any
Acquisition Proposal. The Company shall immediately instruct and otherwise use
its reasonable best efforts to cause its directors, officers, employees,
agents, the Company (including, without limitation, any investment banker,
attorney, or accountant retained by it), consultants and other representatives
to comply with such prohibitions. The Company shall immediately cease and
cause to be terminated any existing activities, discussions, or negotiations
with any parties conducted heretofore with respect to such activities. The
Company shall promptly notify Buyer orally and in writing in the event it
receives any such inquiry or proposal and shall provide reasonable detail of
all relevant facts relating to such inquiries.
(b) Notwithstanding the foregoing, the Board shall be permitted to engage
in any discussions or negotiations with or provide any information to, any
Person in response to an unsolicited bona fide written Acquisition Proposal by
any such Person, if the Board, in its good faith judgment and after receipt of
the written advice of counsel, determines that the failure to provide such
information or engage in such action would result in the members of the Board
breaching their fiduciary duties under applicable law, and clauses (iii) and
(iv) of Section 7.15(a) shall not be applicable with regard to an Acquisition
Proposal, if and only to the extent that, the Board concludes in good faith
that such Acquisition Proposal constitutes a Superior Proposal. For purposes
of this Section 7.15, the term "Superior Proposal" means, with respect to the
Company, a bona fide written Acquisition Proposal for the Company made by a
Person (other than Buyer or any affiliates thereof) and which is on terms that
the Board in good faith concludes (following receipt of the advice of its
financial advisors and outside counsel), taking into account, among other
things, all legal, financial, regulatory and other aspects of the proposal
would, if consummated, result in a transaction that is more favorable to its
stockholders, from a financial point of view, than the transactions
contemplated hereby and is reasonably capable of being completed.
SECTION 7.16. Financial Statements and Other Reports. (a) the Company
will, as soon as practicable and in any event within 45 days after the end of
each quarterly period (other than the last quarter period) in each fiscal
year, furnish to Buyer statements of consolidated net income and cash flows
and a statement of changes in consolidated stockholders' equity of the Company
and any Subsidiaries for the period from the beginning of the then current
fiscal year to the end of such quarterly period, and a consolidated balance
sheet of the Company and any Subsidiaries as of the end of such quarterly
period, setting forth in each case in comparative form figures for the
corresponding period or date in the preceding fiscal year, all in reasonable
detail and certified by an authorized financial officer of the Company,
subject to changes resulting from year-end adjustments; provided, however,
that delivery of a copy of the Quarterly Report on Form 10-Q (without exhibits
unless requested by Buyer) of the Company for such quarterly period filed with
the SEC shall be deemed to satisfy the requirements of this Section 7.16(a);
(b) the Company will, as soon as practicable and in any event within 90
days after the end of each fiscal year, furnish to Buyer statements of
consolidated net income and cash flows and a statement of changes in
consolidated stockholders' equity of the Company and any Subsidiaries for such
year, and a consolidated balance sheet of the Company and any Subsidiaries as
of the end of such year, setting forth in each case in comparative form the
corresponding figures from the preceding fiscal year, all in reasonable detail
and examined and reported on by independent public accountants of recognized
standing selected by the Company; provided, however, that delivery of a copy
of the Annual Report on Form 10-K (without exhibits unless requested by Buyer)
of the Company for such fiscal year filed with the Commission shall be deemed
to satisfy the requirements of this Section 7.16(b);
(c) prior to the Closing Date, the Company will furnish to Buyer such
other financial data of the Company and any Subsidiaries as Buyer may
reasonably request.
SECTION 7.17. Exchange of Stock Certificates. Promptly upon surrender of
any certificates representing Shares at the office of the Company, the Company
will, at its expense, execute and deliver to Buyer and Majority Holder a new
certificate or certificates in denominations specified by Buyer or Majority
Holder for an aggregate number of Shares equal to the number of Shares
represented by the certificates surrendered; provided such exchange is in
compliance with applicable federal and state securities laws, including but
not limited to the Securities Act.
SECTION 7.18. Lost, Stolen, Destroyed or Mutilated Stock Certificates.
Upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of any certificate for Shares and, in the
case of loss, theft or destruction, upon delivery of an affidavit and
indemnity reasonably satisfactory to the Company or, in the case of
mutilation, upon surrender and cancellation thereof, the Company will issue a
new certificate of like tenor for a number of Shares equal to the number of
Shares represented by the certificate lost, stolen, destroyed or mutilated.
SECTION 7.19. Books and Records. The Company will keep, and will cause
each of its Subsidiaries to keep, proper accounting records in accordance with
generally accepted accounting principles. Buyer shall, upon prior request,
subject to reasonable notice and during regular business hours, have the right
to visit the headquarters of the Company. All expenses incurred by Buyer in
connection with the foregoing shall be solely for the account of Buyer.
SECTION 7.20. Insurance. The Company will carry and maintain in full
force and effect, and will cause its Subsidiaries to carry and maintain in
full force and effect, at all times with financially sound and reputable
institutions, insurance in such forms and amounts and against such risks as
may be reasonable and prudent in the circumstances for a group of companies of
established reputation engaged in the same or a similar business and owning
and operating properties similar as those of the Company and its Subsidiaries
and in any event as may be required by applicable laws, statutes, regulations,
rules or orders.
SECTION 7.21. Maintenance of Nasdaq SmallCap Market System Quotation
Approval. The Company covenants and agrees that from and after the execution
hereof, and so long as any Shares are outstanding, the Company will use its
reasonable best efforts to ensure that its Common Stock (including the Shares)
continues to be approved for quotation on the Nasdaq SmallCap Market System or
listed on a national securities exchange.
SECTION 7.22. Current Information. During the period from the date of
this Agreement to the Closing, the Company shall promptly furnish Buyer with
copies of all monthly and other interim financial statements produced in the
ordinary course of business as the same become available and shall cause one
or more of its designated representatives to confer on a regular and frequent
basis with representatives of Buyer.
SECTION 7.23. Access to Information. (a) Between the date hereof and the
Closing, subject to the applicable laws, the Company shall afford the
officers, employees, auditors and other agents of Buyer reasonable access
during normal business hours and upon reasonable notice to its officers,
employees, properties, offices, plants and other facilities, and contracts,
commitments, books and records relating thereto, and shall furnish such
Persons all such documents and such financial, operating and other data and
information regarding such businesses and Persons that are in the possession
of such Person as Buyer through its officers, employees or agents may from
time to time reasonable request. All such information will be provided subject
to the terms of the Buyer Confidentiality Agreement.
(b) Subject to the applicable laws, Buyer shall afford the officers,
employees, auditors and other agents of the Company reasonable access during
normal business hours and upon reasonable notice to the officers, employees,
properties, offices, plants and other facilities, and contracts, commitments,
books and records relating thereto, of Buyer Sub 1 and Buyer Sub 2,
respectively, and shall furnish such Persons all such documents and such
financial, operating and other data and information regarding such businesses
and Persons that are in the possession of such Person as the Company through
its officers, employees or agents may from time to time reasonable request.
All such information will be provided subject to the terms of the Buyer
Confidentiality Agreement.
SECTION 7.24. Exchange Offer. The Company and Buyer agree that, promptly
after the execution of this Agreement, the Company will commence the Exchange
Offer to holders of the Notes, offering to exchange such Notes for shares of
Common Stock at the Exchange Ratio, and substantially on the terms and
conditions set forth herein with respect to the Majority Holder Notes and
Other Mackay Holders Notes and such other customary terms and conditions as
the parties hereto may agree. Buyer and Majority Holder shall each use
commercially reasonable efforts to cooperate with and assist the Company in
securing the acceptance of all the holders of the Notes of the Exchange Offer.
The Company agrees that it will not terminate the Exchange Offer except as
otherwise permitted by its terms.
SECTION 7.25. Tax Election for Buyer Sub 1 and Buyer Sub 2. At the
request of the Company, Buyer shall cause either or both of Buyer Sub 1 and
Buyer Sub 2 to file an effective election on Internal Revenue Service Form
8832 (Entity Classification Election) to be disregarded as an entity separate
from its owner, within the meaning of Treasury Regulation Section
301.7701-3(a). With respect to Buyer Sub 1 such election shall be made in such
a manner that it is effective immediately prior to Closing. With respect to
Buyer Sub 2, if requested by the Company such election shall be made at such
time that it shall be effective as of the date of formation of Buyer Sub 2.
SECTION 7.26. Actions. Majority Holder covenants and agrees that it will
not at any time directly or indirectly commence or participate in any claim,
litigation, actions or challenges as to the issuance of the Majority Holders
Shares which claim, litigation, action or challenge is based on an alleged
violation of Section 5 of the Securities Act due solely to the issuance of
Majority Holders Shares in a transaction within Section 3(a)(9) of the
Securities Act during the pendency of the transaction with Buyer within
Section 4(2) of the Securities Act.
SECTION 7.27. Nasdaq Matters. The Company and Buyer agree that, from and
after the Closing, they will, and will cause their respective counsel to,
cooperate and consult with each other as often as is necessary in connection
with discussions that may occur from time to time between the Company and
Nasdaq with respect to the continued listing or quotation of the Company's
securities on Nasdaq so that Buyer is fully aware of all developments related
to any such discussions with Nasdaq, and the Company and its representatives
shall include Buyer and its representatives in such discussions (if it so
chooses) prior to such discussions occurring. The Company further agrees to
use its best efforts to comply with any directives or recommendations received
from Nasdaq so as to maintain its inclusion in the Nasdaq SmallCap Market.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
SECTION 8.01. Conditions to Each Party's Obligations. The performance of
the obligations of each of the Company, Buyer, and Majority Holder to
consummate the transactions contemplated by this Agreement are subject to the
fulfillment at or prior to the Closing of each of the following conditions,
which conditions may, to the extent permitted by law, be waived only with the
written consent of each of the Company, Buyer and Majority Holder.
(a) Company Shareholder Approval. This Agreement and the transactions
contemplated hereby shall have been duly approved by the requisite holders of
Company Common Stock in accordance with applicable provisions of the DGCL and
the Company's Certificate of Incorporation and Bylaws at the Stockholders
Meeting.
(b) No Injunctions or Proceedings. There shall not be in effect any
judgment, writ, injunction, order (including any temporary restraining order)
or decree issued by a court or Governmental Authority of competent
jurisdiction in an action or proceeding (collectively, an "Order")
restraining, enjoining, or otherwise preventing the consummation of the
transactions contemplated by this Agreement or permitting such consummation
only subject to any condition or restriction unacceptable to the Company,
Buyer or Majority Holder, each in its reasonable judgment, nor shall there be
pending or threatened by any Governmental Authority any suit, action, or
proceeding seeking to restrain or restrict the consummation of the
transactions contemplated hereby or seeking damages in connection therewith,
which in the reasonable judgment of the Company, Buyer or Majority Holder
could have a Material Adverse Effect on the Company after the Closing Date or
the ability of Buyer or Majority Holder to perform their respective
obligations hereunder, nor shall there be pending any cause of action or other
proceeding commenced by a Governmental Authority of competent jurisdiction
seeking the imposition of an Order.
(c) Approval of Cingular Wireless. As required by the Certificate of
Incorporation of the Company, the Company shall have obtained from Cingular
Wireless, as the holder of all the issued and outstanding shares of Class B
Common Stock, the written consent and approval of Cingular Wireless with
respect to the transactions contemplated by this Agreement.
(d) Certificate of Incorporation; Bylaws. At the Stockholders Meeting,
the requisite holders of the Company Common Stock shall have duly approved an
amendment to the Company's Certificate of Incorporation pursuant to the
Amended and Restated Certificate of Incorporation in the form attached hereto
as Exhibit D, to provide for, among other things, a single class of Common
Stock, the Reverse Stock Split, and an increase in the number of shares of
Common Stock, and such amendment shall have been filed with and accepted by
the Delaware Secretary of State and shall be in full force and effect, and the
Company shall have amended the Company's Bylaws such that they conform with,
or do not conflict with, Article VI.
(e) Indenture;. The Indenture shall have been duly and validly amended in
accordance with the terms thereof such that the transactions contemplated
hereby shall not constitute or be deemed to constitute (x) a "change of
control" as defined in Section 1.1 of the Indenture, and (y) the type of
transactions as specified under the Indenture that would require or obligate
the Company to repurchase any Notes under Section 4.14 of the Indenture.
(f) Third-Party Consents. All required authorizations, consents and
approvals of any third party (other than a Governmental Authority), the
failure of which (either individually or in the aggregate) to obtain would
have a Material Adverse Effect on the Company, Buyer, or Majority Holder, or
the ability of such party to consummate the transactions contemplated hereby,
shall have been authorized or obtained, as appropriate.
SECTION 8.02. Additional Conditions to Obligations of the Company. The
performance of the obligations of the Company hereunder is subject to the
fulfillment at or prior to the Closing, of each of the following conditions
(all or any of which may be waived in whole or in part by the Company):
(a) Representations and Warranties. Each of the representations and
warranties of Buyer and Mackay and Majority Holder made in this Agreement
which are not, by their terms, qualified by a materiality standard, shall have
been true and correct in all material respects as of the date hereof and shall
be true and correct in all material respects on and as of the Closing Date as
though made on and as of the Closing Date (and the representations and
warranties of Buyer and Majority Holder contained in this Agreement which are,
by their terms, qualified by a materiality standard, shall have been true and
correct on the date hereof and shall be true and correct on and as of the
Closing Date as though made on and as of the Closing Date), except for
representations and warranties specifically relating to a time or times other
than the date hereof or thereof, which shall be true and correct in all
material respects (to the extent they are not, by their terms, qualified by a
materiality standard, and shall be true and correct to the extent they are so
qualified) at such specified time or times, and except for changes thereto
permitted or contemplated by this Agreement.
(b) Compliance with Covenants and Agreements. Buyer and Mackay and
Majority Holder shall have performed and complied in all material respects
with all terms, covenants, agreements, undertakings, acts, conditions and
obligations required by this Agreement to be performed or complied with by
such party prior to or at the Closing.
(c) Officer's Certificates. The Company shall have received a certificate
from Buyer, dated as of the Closing Date, executed by a Director of Buyer
certifying that: (i) such party's Board of Directors (or corporate body) has
duly adopted resolutions, copies of which shall be attached to such
certificate, (x) approving the terms of this Agreement and any agreement to be
delivered in accordance with this Agreement and authorizing the consummation
of the transactions contemplated hereby and thereby, and (y) authorizing an
officer thereof to execute and deliver this Agreement and all necessary
ancillary documents, (ii) all of such resolutions are in full force and
effect, (iii) none of such resolutions has been amended or modified, and (iv)
the consent or approval of its stockholders is not required by applicable
laws. The Company shall also have received a certificate from Buyer and
Majority Holder certifying that the representations and warranties of such
party contained in this Agreement that are not, by their terms, qualified by a
materiality standard, were true and correct in all material respects when made
and are true and correct in all material respects on and as of the Closing
Date as though made on and as of the Closing Date (and that the
representations and warranties of such party contained in this Agreement that
are, by their terms, qualified by a materiality standard, were true and
correct when made and are true and correct on and as of the Closing Date as
though made on and as of the Closing Date), except to the extent they relate
to a particular date and except for changes permitted or contemplated by this
Agreement, and that such party has complied with or performed in all material
respects all terms, covenants, agreements, undertakings, acts, conditions and
obligations to be complied with or performed by it on or prior to the Closing
Date.
(d) Incumbency Certificate. The Company shall have received a certificate
from Buyer signed by its Secretary or Assistant Secretary and dated as of the
Closing Date, certifying as to each person executing this Agreement on behalf
of such party that (a) such person is an officer thereof holding the office or
offices specified therein, and (b) the signature of each such person set forth
on such certificate is his or her genuine signature.
(e) Consents Obtained. Any consents required to be obtained by Buyer
shall have been obtained.
(f) Payment of Purchase Price; Transfer of Stock and Majority Holder
Notes. On the Closing Date, (i) Buyer shall have (x) paid to the Company the
cash payment specified in Section 2.01 of this Agreement, and (y) transferred
all the capital stock of Buyer Sub 1 to the Company as specified in Section
2.02 of this Agreement, and (ii) Majority Holder shall have exchanged the
Majority Holder Notes for the Majority Holder Shares.
(g) Documents/Instruments to be Delivered by Buyer. Buyer and Majority
Holder shall have delivered to the Company any documents or instruments, in
form and substance reasonably satisfactory to the Company and its counsel,
required in connection with the sale, transfer, disposition and issuance of
the Purchase Shares, the exchange of the of Buyer Sub 1 Shares for the
Technology Shares and the exchange of the Majority Holder Notes for the
Majority Holder Shares.
(h) Material Adverse Effect. No event, change or development shall exist
or have occurred since September 30, 2000, with respect to Buyer, Buyer Sub 1,
or Buyer Sub 2, including the filing of an action, claim suit, cause of
action, or litigation commenced by any third party against Buyer, Buyer Sub 1
and/or Buyer Sub 2, that has had or reasonably would be expected to have a
Material Adverse Effect on Buyer, Buyer Sub 1 and/or Buyer Sub 2 or on the
ability of Buyer, Buyer Sub 1 and/or Buyer Sub 2 to consummate the
transactions contemplated hereby.
(i) Opinion. The Company shall have received the legal opinion of counsel
to Buyer, dated the Closing Date, in a form reasonably satisfactory to the
Company and its counsel, with respect to the matters referred to in Schedule
8.02.
(j) Transfer. The Transfer shall have occurred such that Buyer Sub 1
shall have no assets except for 100% of the capital stock of Buyer Sub 2 and
no liabilities.
(k) Note Matters. The beneficial holders of Notes holding not less than
90% in principal amount of the Notes (including in such calculation the
Majority Holder Notes and the Other Mackay Holders Notes) shall have offered
to exchange such Notes for shares of Common Stock of the Company pursuant to
the terms of the Exchange Offer referenced in Section 7.24 hereof.
SECTION 8.03. Additional Conditions to Obligations of Buyer. The
performance of the obligations of Buyer hereunder is subject to the
fulfillment at or prior to the Closing, of each of the following additional
conditions (all or any of which conditions may be waived in whole or in part
by Buyer):
(a) Representations and Warranties. Each of the representations and
warranties of the Company made in this Agreement that are not, by their terms,
qualified by a materiality standard, shall have been true and correct in all
material respects as of the date hereof (except for those of Buyer Sub 1 and
Buyer Sub 2 as specified in Section 4.14(f)) and shall be true and correct in
all material respects on and as of the Closing Date as though made on and as
of the Closing Date (and the representations and warranties of the Company and
contained in this Agreement that are, by their terms, qualified by a
materiality standard, shall have been true and correct on the date hereof and
shall be true and correct on and as of the Closing Date as though made on and
as of the Closing Date), except for representations and warranties
specifically relating to a time or times other than the date hereof or
thereof, which shall be true and correct in all material respects (to the
extent they are not, by their terms, qualified by a materiality standard, and
shall be true and correct to the extent they are so qualified) at such
specified time or times, and except for changes thereto permitted or
contemplated by this Agreement.
(b) Compliance with Covenants and Agreements. The Company shall have
performed and complied in all material respects with all terms, covenants,
agreements, undertakings, acts, conditions and obligations required by this
Agreement to be performed or complied with by the Company prior to or at the
Closing.
(c) Officer's Certificate. Buyer shall have received a certificate from
the Company, dated as of the Closing Date, certifying that the Board has duly
adopted resolutions, copies of which shall be attached to such certificate,
and which resolutions shall be in form and substance satisfactory to Buyer,
pursuant to which the Company has opted-out of the Delaware Business
Combination Statute and that all such action to effect such resolutions shall
have been taken. Buyer shall have also received a certificate from the Company
dated as of the Closing Date executed by the President or Vice President of
the Company certifying that (i) the Board has duly adopted resolutions, copies
of which shall be attached to such certificate (x) approving the terms of this
Agreement and any agreement to be delivered in accordance with this Agreement
and authorizing the consummation of the transactions contemplated hereby and
thereby, and (y) authorizing an officer thereof to execute and deliver this
Agreement and all necessary ancillary documents, (ii) all of such
representations are in full force and effect and none of such resolutions has
been amended or modified, (iii) the representations and warranties of the
Company contained in this Agreement that are not, by their terms, qualified by
a materiality standard, were true and correct in all material respects when
made and are true and correct in all material respects on and as of the
Closing Date as though made on and as of the Closing Date (and that the
representations and warranties of the Company contained in this Agreement that
are, by their terms, qualified by a materiality standard, were true and
correct when made and are true and correct on and as of the Closing Date as
though made on and as of the Closing Date), except to the extent they relate
to a particular date and except for changes permitted or contemplated by this
Agreement, and (iv) the Company has complied with or performed in all material
respects all terms, covenants, agreements, undertakings, acts, conditions and
obligations to be complied with or performed by it on or prior to the Closing
Date.
(d) Consents Obtained. Any consents required to be obtained by the
Company shall have been obtained, including but not limited to, the consents
from landlords under all leases in which the Company is a tenant as are
identified in Schedule 3.04.
(e) Incumbency Certificate. Buyer shall have received a certificate from
the Company signed by the Secretary or Assistant Secretary thereof and dated
as of the Closing Date, certifying as to each person executing this Agreement
or any agreement or instrument contemplated hereby on behalf of the Company
that (a) such person is an officer thereof holding the office or offices
specified therein, and (b) the signature of each such person set forth on such
certificate is his or her genuine signature.
(f) Stock Certificates. The Company shall have delivered to Buyer a stock
certificate or certificates representing the Purchase Shares and the
Technology Shares registered in the name of Buyer.
(g) Documents/Instruments to be delivered by the Company. The Company
shall have delivered to Buyer any documents or instruments, in form and
substance reasonably satisfactory to Buyer and its counsel, required in
connection with the sale, transfer, disposition and issuance of the Purchase
Shares and the exchange of the Buyer Sub 1 Shares for the Technology Shares.
(h) Financing. Buyer shall have obtained financing sufficient to complete
the transactions contemplated by this Agreement and pay the expenses
associated therewith.
(i) Inland Revenue Ruling. Buyer shall have received clearance from Her
Majesty's Inland Revenue Service, in form and substance satisfactory to Buyer
and its counsel, granting clearances in respect of the sale of the Buyer Sub 1
Shares under Section 135 of the Taxation of Chargeable Gains Xxx 0000.
(j) Material Adverse Effect. No event, change or development shall exist
or have occurred since September 30, 2000 with respect to the Company,
including the filing of an action, claim, suit, cause of action, or litigation
commenced by any third party against the Company, that has had or reasonably
could be expected to have a Material Adverse Effect on the Company or on the
ability of the Company to consummate the transactions contemplated hereby.
(k) Opinion. Buyer shall have received the legal opinion of counsel to
the Company, dated the Closing Date, in a form reasonably satisfactory to
Buyer and its counsel, with respect to the matters referred to in Schedule
8.03 and as to other matters as Buyer may reasonably request.
(l) Fairness Opinion. The Company shall have received the written opinion
of Houlihan, Lokey, Xxxxxx & Xxxxx Financial Advisors, Inc. that the
transactions contemplated by this Agreement are fair to the public
stockholders from a financial point of view.
(m) Appointment of Directors. The Investor Directors shall have been
elected to the Board as contemplated by Section 6.01 and the Company shall
have taken such actions necessary (if any) to ensure that the Investor
Directors are covered by the Company's director and officer liability
insurance policy upon such election.
(n) Maintenance of Nasdaq Approval. The Common Stock of the Company shall
continue to be approved for quotation on the Nasdaq SmallCap Market System or
listed on a national securities exchange and the Company shall not have been
de-listed.
(o) Waivers. The Company shall have obtained from each executive or
employee of the Company who, concurrently with the Closing, is entering into
an Employment Agreement, a written agreement, in a form reasonably acceptable
to Buyer, that the execution of the Agreement, and the performance hereof by
the Company and the other parties hereto (including but not limited to the
election to the Board of the Investor Directors pursuant to Section 6.01
hereof) in accordance with its terms shall not be and shall not be deemed to
be under any circumstances or for any purposes a "change of control" for
purposes of any employment agreements or transition employment agreements or
any replacement or substitution thereof and such party shall not have any such
rights thereunder as a result thereof.
(p) Stock Option Plan. The Compensation Committee of the Board (or such
other appropriate body) shall have adopted a resolution to the effect that
neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby (including but not limited to the election to
the Board of the Investor Directors pursuant to Section 6.01 hereof) shall
constitute a "Change of Control Event" or comparable event as defined in
Company Option Plan or any other benefit plan of the Company.
(q) Conversion of Class B Shares. Cingular Wireless shall have converted
all of the Class B Common Stock owned by Cingular Wireless into Common Stock
for 1,600,000 shares of Common Stock and otherwise in accordance with the
terms of the Class B Common Stock.
(r) Employment Agreements. The Company and each of Xxxx X. Xxxx, Xxxx X.
Xxxxxx, Xxxxxx X. Parent, W. Xxxxxxx Xxxxx, C. Xxxxxxxx Xxxx, Xxxxxx XxXxxx
and J. Xxxxxxx Xxxxxx shall have executed and delivered to the Company an
Employment Agreement.
(s) Registration Rights Agreement. The Company, Buyer and Mackay, on
behalf of Majority Holder shall have executed and delivered the Registration
Rights Agreement.
(t) Governmental Filings and Consents. All governmental filings required
to be made prior to the Closing Date by the Company, Buyer and Majority Holder
with, and all governmental consents required to be obtained prior to the
Closing Date by the Company, Buyer and Majority Holder from, any Governmental
Authority in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby shall have been made
or obtained, except where the failure to make such filing or obtain such
consent would not reasonably be expected to have a Material Adverse Effect on
the Company, Buyer, or Majority Holder or the ability of such parties to
consummate the transactions contemplated hereby, and any waiting periods or
extensions thereof under the HSR Act shall have expired or been terminated.
(u) Reverse Stock Split. The Board and the shareholders of the Company
shall have approved, and the Company shall have effected, a 1 for 5 reverse
stock split in accordance with the DGCL and the rules and regulations of
Nasdaq (the "Reverse Stock Split").
(v) Stockholder Agreements. The 1996 Stockholders Agreement shall have
been terminated by the parties thereto pursuant to a written agreement and the
1996 Stockholders Agreement shall cease to be in effect without any liability
being incurred by the Company.
SECTION 8.04. Additional Conditions to Obligations of Majority Holder.
The performance of the obligations of Majority Holder hereunder is subject to
the fulfillment at or prior to the Closing of each of the following conditions
(all or any of which conditions may be waived in whole or in part by Majority
Holder):
(a) Representations and Warranties. Each of the representations and
warranties of the Company made in this Agreement which are not, by their
terms, qualified by a materially standard, shall have been true and correct in
all material respects as of the date hereof and shall be true and correct in
all material respects on and as of the Closing Date as though made on and as
of the Closing Date (and the representations and warranties of the Company
contained in this Agreement which are, by their terms, qualified by a
materially standard, shall have been true and correct on the date hereof and
shall be true and correct on and as of the Closing Date as though made on and
as of the Closing Date), except for representations and warranties
specifically relating to a time or times other than the date hereof or
thereof, which shall be true and correct in all material respects (to the
extent they are not, be their terms, qualified by a materiality standard, and
shall be true and correct to the extent they are so qualified) at such
specified time or times, and except for changes thereto permitted or
contemplated by this Agreement.
(b) Compliance with Covenants and Agreements. The Company shall have
performed and complied in all material respects with all terms, covenants,
agreements, undertakings, acts, conditions and obligations required by this
Agreement to be performed or complied with by the Company prior to or at the
Closing.
(c) Officer's Certificate. Majority Holder shall have received a
certificate from the Company, dated as of the Closing Date, certifying that
the Board has duly adopted resolutions, copies of which shall be attached to
such certificate, and which resolutions shall be in form and substance
satisfactory to Buyer, pursuant to which the Company has opted out of the
Delaware Business Combination Statute and that all such action to effect such
resolutions shall have been taken. Majority Holder shall have also received a
certificate from the Company dated as of the Closing Date executed by the
President or Vice President of the Company certifying that (i) the Board has
duly adopted resolutions, copies of which shall be attached to such
certificate (x) approving the terms of this Agreement and any agreement to be
delivered in accordance with this Agreement and authorizing the consummation
of the transactions contemplated hereby and thereby, and (y) authorizing an
officer thereof to execute and deliver this Agreement and all necessary
ancillary documents, (ii) all of such representations are in full force and
effect and none of such resolutions has been amended or modified, (iii) the
representations and warranties of the Company contained in this Agreement that
are not, by their terms, qualified by a materiality standard, were true and
correct in all material respects when made and true and correct in all
material respects on and as of the Closing Date as though made on and as of
the Closing Date (and that the representations and warranties of the Company
contained in this Agreement that are, by their terms, qualified by a
materially standard, were true and correct when made and are true and correct
on and as of the Closing Date as though made on and as of the Closing Date),
except to the extent they relate to a particular date and except for changes
permitted or contemplated by this Agreement, and (iv) the Company has complied
with or performed in all material respects all terms, covenants, agreements,
undertakings, acts, conditions and obligations to be complied with or
performed by it on or prior to the Closing Date.
(d) Incumbency Certificate. The Majority Holder shall have received a
certificate from the Company signed by its Secretary or Assistant Secretary
and dated as of the Closing Date, certifying as to each person executing this
Agreement on behalf of such entity that (a) such person is an officer thereof
holding the office or offices specified therein, and (b) the signature of each
such person set forth on such certificate is his or her genuine signature.
(e) Stock Certificates. The Company shall have delivered to Majority
Holder a stock certificate or certificates representing the Majority Holder
Shares registered in the name of Majority Holder (or the respective nominees
thereof).
(f) Documents/Instruments to be delivered by the Company. The Company
shall have delivered to Majority Holder any documents or instruments in form
and substance reasonably acceptable to Majority Holder and its counsel,
required in connection with the exchange and issuance of the Majority Holder
Shares for the Majority Holders Notes.
(g) Material Adverse Effect. No event, change or development shall exist
or have occurred since September 30, 2000 with respect to the Company,
including the filing of an action, claim, suit, cause of action, or litigation
commenced by any third party against the Company, that has had or reasonably
could be expected to have a Material Adverse Effect on the Company or on the
ability of Majority Holder to consummate the transactions contemplated hereby.
(h) Registration Rights Agreement. The Company, Buyer and Mackay, on
behalf of Majority Holder shall have executed and delivered the Registration
Rights Agreement.
(i) Governmental Filings and Consents. All governmental filings required
to be made prior to the Closing Date by the Company, Buyer and Majority Holder
with, and all governmental consents required to be obtained prior to the
Closing Date by the Company, Buyer and Majority Holder from, any Governmental
Authority in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby shall have been made
or obtained, except where the failure to make such filing or obtain such
consent would not reasonably be expected to have a Material Adverse Effect on
the Company, Buyer, or Majority Holder or the ability of such parties to
consummate the transactions contemplated hereby, and any waiting periods or
extensions thereof under the HSR Act shall have expired or been terminated.
(j) Stockholder Agreements. The 1996 Stockholders Agreement shall have
been terminated by the parties thereto pursuant to a written agreement and the
1996 Stockholders Agreement shall cease to be in effect without any liability
being incurred by the Company.
(k) Simultaneous Closings. The Company and Buyer shall have consummated
the transactions contemplated by this Agreement immediately prior to, or shall
consummate the transactions contemplated by this Agreement concurrently with,
Majority Holder's and the Other Mackay Holders' consummation of the
transactions contemplated by this Agreement.
ARTICLE IX
INDEMNIFICATION
SECTION 9.01. The Company's Indemnities to Buyer and Majority Holder.
Subject to Section 9.04 hereof, from and after the Closing Date, the Company
shall indemnify, defend and hold harmless each of Buyer and Majority Holder,
and their respective officers, directors, Affiliates, successors and permitted
assigns from and against any and all demands, claims, actions, losses,
damages, liabilities, and expenses, including reasonable attorneys' fees and
disbursements related thereto, based upon, arising out of or otherwise
resulting from:
(a) any inaccuracy in any representation or any breach of any warranty by
the Company in this Agreement or in any agreement delivered in connection
herewith; and
(b) any nonfulfillment of any material covenant or agreement of the
Company contained in this Agreement or in any agreement delivered in
connection herewith by the Company; provided, however, that, in order to
qualify to receive indemnification under this Agreement, any claim for
indemnification under this Section 9.01 shall be made no later than the date
that is three years after the Closing Date, except that any claim for
indemnification under Section 3.15 shall be made no later than three (3)
months after the expiration date of the longest statute of limitations
applicable to any such Taxes. For purposes of this Article IX, all
representations and warranties of the Company shall be deemed to have been
made at the dates on which they are required to be true and correct.
SECTION 9.02. Buyer's and Majority Holder's Indemnities to the Company.
Subject to Section 9.04 hereof, from and after the Closing Date, each of
Buyer, Mackay and Majority Holder shall severally, but not jointly, indemnify,
defend and hold harmless the Company and its Subsidiaries, their respective
officers, directors, Affiliates, successors and permitted assigns from and
against any and all demands, claims, actions, losses, damages, liabilities,
and expenses, including reasonable attorneys' fees and disbursements related
thereto (collectively, "Company Losses"), based upon, arising out of or
otherwise resulting from:
(a) any inaccuracy in any representation or any breach of any warranty by
Buyer, Mackay or Majority Holder, as the case may be, made by such party to
the Company in this Agreement or in any agreement delivered in connection
herewith;
(b) any nonfulfillment of any material covenant or agreement of Buyer,
Mackay or Majority Holder, as the case may be, to the performed by such party
and contained in this Agreement or in any agreement delivered in connection
herewith by such party; provided, however, that, in order to qualify to
receive indemnification under this Agreement, any claim for indemnification
under this Section 9.02 shall be made no later than the date that is three
years after the Closing Date, except that any claim for indemnification under
Section 4.13 shall be made no later than three (3) months after the expiration
date of the longest statute of limitations applicable to any such Taxes. For
the purposes of this Section 9.02, all representations and warranties of Buyer
shall be deemed to have been made at the dates on which they are required to
be true and correct; and
SECTION 9.03. Buyer Indemnity Regarding Buyer Sub 1 and Buyer Sub 2.
Subject to Section 9.04 hereof, from and after the Closing Date, and in
addition to the indemnification Buyer is providing to the Company pursuant to
Section 9.02 hereof, Buyer shall indemnify, defend, and hold harmless the
Company and its Subsidiaries, their respective officers, directors,
Affiliates, successors and permitted assigns from and against any and all
Company Losses with respect to any and all obligations or liabilities of
whatever nature or character suffered, incurred by, or arising with regard to,
Buyer Sub 1 and/or Buyer Sub 2 prior to the Closing that are not provided for,
satisfied or assessed prior to the Closing, including with regard to Taxes all
Company Losses related to any event, act, omission or transaction occurring on
or before Closing. Claims for indemnification under this Section 9.03 may be
made anytime after Closing and shall survive Closing.
SECTION 9.04. Third Party Claims; Notice and Opportunity to Defend.
Promptly after receipt by either the Company on the one hand or by Buyer or
Majority Holder on the other hand (in any case, the "Indemnitee") of the
commencement of, or notice of any demand, claim or circumstance that, with the
lapse of time, would give rise to a claim or the commencement (or threatened
commencement) of, any action, proceeding, litigation, or investigation against
it by a third party (an "Asserted Liability") that may give rise to any
indemnification obligation under Section 9.01, 9.02 or 9.03, the Indemnitee
shall promptly give written notice thereof to the party from which
indemnification is to be sought (the "Indemnifying Party"), describing the
Asserted Liability in reasonable detail and indicating the amount (estimated,
if necessary) for which the Indemnitee may be liable. Failure to give timely
notice under this Section 9.04 shall not preclude the Indemnitee from
receiving indemnification from the Indemnifying Party unless the Indemnitee's
failure has materially prejudiced the Indemnifying Party's ability to defend
against the Asserted Liability.
(a) Opportunity to Defend. The Indemnifying Party shall have fifteen (15)
days (or earlier if required to avoid a default judgment) after receipt of the
aforementioned notice to undertake to settle or defend, at its own expense and
by counsel of its own choosing, which counsel shall be reasonably satisfactory
to the Indemnitee, such Asserted Liability. If the Indemnifying Party so
elects to settle or defend such Asserted Liability, it shall promptly notify
the Indemnitee in writing of its intent to do so. So long as the Indemnifying
Party is reasonably contesting such Asserted Liability in good faith, the
Indemnitee may not settle or pay such Asserted Liability. After notice from
the Indemnifying Party to the Indemnitee of its election to assume the defense
of such claim or action, the Indemnifying Party will not be liable to the
Indemnitee for any legal or other expenses incurred by the Indemnitee in
connection with the defense thereof; provided, however, that the Indemnitee
may participate, at its sole expense, in the settlement of, or defense
against, such Asserted Liability, provided that the Indemnifying Party in all
such instances shall be responsible for directing and controlling the
settlement of, or defense against, such action. If the Indemnifying Party
elects not to undertake to settle or defend against the Asserted Liability,
fails to notify the Indemnitee of its election as herein provided, or does not
accept its obligation to indemnify under this Agreement, the Indemnitee may
settle, compromise or defend such Asserted Liability in the exercise of its
exclusive discretion at the expense of the Indemnifying Party and the
Indemnifying Party shall promptly reimburse the Indemnitee for the amount of
all costs and expenses incurred by the Indemnitee in connection with the
settlement of or defense against the Asserted Liability to the extent provided
in Section 9.01, 9.02 or 9.03, as the case may be. If no settlement of the
Asserted Liability is entered into, the Indemnifying Party shall promptly
reimburse the Indemnitee for the amount of any judgment rendered with respect
to such Asserted Liability and all related and bona fide expenses incurred by
the Indemnitee in defense against such action to the extent recoverable under
Section 9.01, 9.02 or 9.03, as the case may be.
(b) Other Matters. Neither the Indemnifying Party nor the Indemnitee
shall, in the defense of any Asserted Liability, consent to entry of any
judgment or enter into any settlement agreement, except with the written
consent of the other party (not to be unreasonably withheld or delayed), which
does not include as an unconditional term thereof the giving by the claimant
or the plaintiff involved to both the Indemnitee and the Indemnifying Party of
a release from all liability in respect of such Asserted Liability. The
Indemnifying Party and the Indemnitee shall each use all commercially
reasonable efforts to cooperate with each other in connection with the
settlement of, or the defense against, any Asserted Liability and make
available to the other all books, records and other documents within its
control that are reasonably necessary or appropriate for such defense.
Notwithstanding anything contained in this Agreement, the Indemnitee shall
have the right to pay or settle at any time any Asserted Liability, provided
that (except where the Indemnifying Party elects not to undertake to settle or
defend against the Asserted Liability, fails to notify the Indemnitee of its
election, or does not accept its obligation to indemnify under this
Agreement), the Indemnitee shall also be deemed to have waived any right to
indemnification therefor by the Indemnifying Party.
(c) Tax Matters of Buyer Sub 1 and Buyer Sub 2. The parties agree that
all tax matters related to Buyer Sub 1 and Buyer Sub 2 with regard to all
periods prior to and including the Closing shall be the sole and exclusive
responsibility of Buyer and Buyer shall have full authority for dealing with
all tax authorities with regard to such matters.
SECTION 9.05. Survival of Representations, Warranties and Covenants. The
representations and warranties contained in this Agreement shall not survive
the Closing. Notwithstanding the foregoing, any claim with respect to an
inaccuracy or breach of any representation or warranty or a breach of any
covenant or agreement made as of the execution and delivery of this Agreement
and the Closing may be made at any time prior to the dates as specified in
Sections 9.01 and 9.02, as the case may be, and no party to this Agreement
shall have the right to assert any right of indemnification hereunder after
such dates, except that if, on or before such date, the party from whom
indemnification is sought has received written notice with respect to a
specific claim of indemnification pursuant to this Agreement or notice of a
claim from a third party, and the Indemnitee thereafter shall have the right
after such date to assert or to continue to assert such claim and to be
indemnified with respect thereto notwithstanding that all damages therefor may
not be quantifiable as of such time. Notwithstanding the foregoing, all
covenants to be performed after the Closing, including but not limited to
those contained in Article VI, Sections 7.07, 7.09, 7.10, 7.16, 7.17, 7.18,
7.19, 7.24, 7.25, and 7.26 and Article IX, shall survive the Closing in
accordance with their terms.
ARTICLE X
TERMINATION
SECTION 10.01. Termination. This Agreement may be terminated and the
transactions contemplated in this Agreement may be abandoned at any time prior
to the Closing:
(a) by mutual written consent of each of the Company, Buyer and Majority
Holder;
(b) by the Company, Buyer or Majority Holder if, on the Closing Date, any
condition precedent to the obligations of the terminating party set forth in
Article VIII shall not have been satisfied (or waived by the party entitled to
the benefit thereof); provided, however, that no party shall have the right to
terminate this Agreement pursuant to this Section 10.01(b) if such party is
then in breach of any material representation or warranty contained herein or
is in default in any material respect in the observance or in the timely
performance of any of its covenants or agreements contained herein;
(c) by the Company, Buyer or Majority Holder if there shall be in effect
any judgment, permanent injunction, or action by any court of competent
jurisdiction or other Governmental Authority preventing or making unlawful the
consummation of the transactions contemplated hereby that shall have become
final and nonappealable;
(d) by the Company, Buyer or Majority Holder if the Closing shall not
have occurred on or before June 30, 2001 (time is of the essence with respect
to such date); provided, however, that no party shall have the right to
terminate this Agreement pursuant to this Section 10.01(d) if such party is
then in breach of any material representation or warranty contained herein or
is in default in any material respect in the observance or in the timely
performance of any of its covenants or agreements contained herein; or
(e) by Buyer or Majority Holder if this Agreement and the transactions
contemplated hereby shall have been voted on at the Stockholders Meeting and
fail to receive the requisite vote for approval and adoption by the
stockholders of the Company as provided under the DGCL and the Company's
Certificate of Incorporation;
(f) by Buyer if (i) the Board shall not recommend the approval of this
Agreement and the transactions contemplated hereby, or shall withdraw, modify
or change its approval or recommendation of this Agreement and the
transactions contemplated hereby in a manner adverse to Buyer or shall have
resolved to do any of the foregoing, (ii) the Board shall have approved and/or
recommended to the stockholders of the Company any Acquisition Proposal or
taken any other action in the exercise of its fiduciary duties or otherwise to
facilitate a transaction with a third party, or (iii) the Company breaches
Section 7.15 or expresses or announces its intention to take such action that
would constitute a breach of such section.
SECTION 10.02. Notice. If a party elects to terminate this Agreement
pursuant to an applicable provision of Section 10.01, such party shall give
written notice of its election to the other parties at least two (2) Business
Days prior to the date such termination shall become effective.
SECTION 10.03. Effect of Termination. Upon termination of this Agreement
pursuant to the terms of Section 10.01, if (a) no party hereto is in breach of
any material provision of this Agreement, this Agreement shall become void and
no longer be of any force or effect and there shall be no liability on the
part of any party or its respective directors, officers or stockholders to the
other party, and (b) the Company, Buyer, Mackay, or Majority Holder is in
breach of any provision of this Agreement applicable to it, which breach has
caused the terminating party to terminate this Agreement, or to the extent
that such termination results from the willful and material breach by a party
of any of its representations, warranties, covenants or agreements set forth
in this Agreement, the non-breaching party will have such rights and remedies
as are available to such party at law or in equity except as otherwise
provided for herein.
SECTION 10.04. Termination Fee. In the event Buyer terminates this
Agreement pursuant to Section 10.01(f)(i)-(iii), then the Company agrees that
it shall pay to Buyer a fee of $2.5 million, plus an amount, not to exceed
$750,000, equal to Buyer's fees and expenses incurred in connection with (or
reasonably related to) the transactions contemplated by this Agreement. Such
fees and expenses shall be payable in immediately available funds on the
second Business Day following the termination of this Agreement.
Notwithstanding any other provision of this Agreement, (i) such fees and
expenses shall not be paid pursuant to this Section 10.04 if Buyer shall have
breached in any material respect any of its material representations,
warranties, covenants, or agreements contained in this Agreement, and (ii) the
payment by the Company of the amounts required to be paid pursuant to this
Section 10.04 shall, except in the case of willful breach of this Agreement by
the Company, constitute the exclusive remedy for, and full settlement of, any
and all liabilities and obligations of the Company for damages under this
Agreement.
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.01. Expenses of the Parties. Except as otherwise provided in
this Agreement, whether or not the transactions contemplated by this Agreement
are consummated, all expenses involved in the preparation, negotiation,
authorization, entering into and performance of this Agreement, including all
fees and expenses of agents, representatives, counsel, financial advisors,
investment bankers and accountants in connection therewith, shall be borne
solely by the party that shall have incurred the same, and no other party
hereto shall have any liability with respect thereto; provided however, that
whether or not the consummation of the transactions contemplated hereby
occurs, the Company shall reimburse Mackay for actual, bona fide expenses
incurred by Mackay in connection with transactions contemplated hereby up to a
maximum of $100,000 upon Majority Holder providing reasonable evidence of the
incurrence of such expenses; and provided, further, that if Mackay or Majority
Holder has any obligation to make any filing under the HSR Act as a result of
entering into or consummating the transactions contemplated hereby, the
Company shall provide to Mackay or reimburse Mackay the full amount of the
filing fee associated with such filing. In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party, subject to Section 10.03 and Section 10.04.
SECTION 11.02. Further Assurances. Each of the parties hereto agrees
that, at any time and from time to time after the date hereof, it shall, upon
written request from the other party or parties hereto, and without further
consideration, perform such other and further acts, and execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such further
instruments, documents and assurances as such other party or parties
reasonably may request for the purpose of carrying out this Agreement.
SECTION 11.03. Binding Agreement; Assignment. This Agreement is binding
upon, will inure to the benefit of, and be enforceable by, the parties hereto
and their respective heirs, successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations under this Agreement
shall be assigned, in whole or in part, by operation of law or otherwise by
any of the parties hereto, without the prior written consent of the other
parties hereto; provided, however that Buyer may assign the Agreement and its
rights, interests, and obligations hereunder to any Affiliate thereof, but
such assignment shall not relieve Buyer of its obligations hereunder in the
event such assignee does not perform such obligations.
SECTION 11.04. Entire Agreement; No Third-Party Beneficiaries. This
Agreement, including the Schedules contained in the Disclosure Statement and
any other written agreements by the parties hereto that are expressly
contemplated hereby to be entered into, constitutes the entire agreement and
understanding of the parties hereto with respect to the subject matters hereof
and thereof and supersedes any and all prior negotiations, agreements,
arrangements and understandings between the parties, written or oral, relating
to the matters provided for herein or therein. Except as expressly provided in
this Agreement, nothing contained in this Agreement, express or implied, is
intended to or shall confer on any Person other than the parties hereto and
their heirs, successors and permitted assigns, any rights, benefits, remedies
or claims under or by reason of this Agreement.
SECTION 11.05. Amendment; Modification. This Agreement may not be amended
or modified except by an instrument in writing signed by a duly authorized
officer of each of the Company, Buyer and Majority Holder.
SECTION 11.06. Extensions; Waivers; Remedies Cumulative. (a) The
conditions to each of the parties' obligations to consummate this Agreement
are for the sole benefit of such party and may be waived by such party in
whole or in part to the extent permitted by applicable law. With regard to
this Agreement, any party may (i) extend the time for the performance of any
of the obligations or other acts of any other party with such first party,
(ii) waive any inaccuracies in the representations and warranties of any party
made to or with such first party contained herein or in any document,
certificate, or writing delivered pursuant hereto, or (iii) waive compliance
with any of the agreements of any party with such first party or with any
conditions to its own obligations. Any agreement on the part of a party hereto
to any such extension or waiver of any provision of this Agreement shall be
valid and effective only if set forth in an instrument in writing signed on
behalf of such party against whom enforcement of any waiver or consent is
sought by such first party or a duly authorized officer thereof, if
applicable.
(b) No failure or delay on the part of any party in exercising any right,
privilege, power, or remedy under this Agreement, and no course of dealing
among the parties, shall operate as a waiver of such right, privilege, power,
or remedy, nor shall any single or partial exercise of any right, privilege,
power, or remedy under this Agreement preclude any other or further exercise
of such right, privilege, power, or remedy, or the exercise of any other
right, privilege, power, or remedy. Unless otherwise expressly provided for
herein, the rights, privileges, powers, and remedies available to the parties
hereunder are cumulative and not exclusive of any other rights, privileges,
powers, or remedies provided by statute, at law, in equity, or otherwise. No
notice to or demand on any party in any case shall entitle such party to any
other or further notice or demand in any similar or other circumstances or
constitute a waiver of the right of the party giving such notice or making
such demand to take any other or further action in any circumstances without
notice or demand.
SECTION 11.07. Section Headings; Interpretation. Reference in this
Agreement to a Section, Article or Schedule, unless otherwise indicated, shall
constitute references to a Section or an Article of this Agreement or a
Schedule to the Disclosure Statement. The table of contents, section headings,
and article titles contained in this Agreement are for convenience of
reference only and do not form a part thereof and shall not affect in any way
the meaning or interpretation of this Agreement. Wherever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation." The words "herein,"
"hereinafter," and "hereunder," and words of similar import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The parties hereto agree that this Agreement is
the product of negotiations among sophisticated parties, all of whom were
represented by counsel, and each of whom had an opportunity to participate in,
and did participate in the drafting of each provision hereto. Accordingly,
ambiguities in this Agreement, if any, shall not be construed strictly against
any party hereto but rather shall be given a fair and reasonable construction
without regard to the rule of contra proferentem.
SECTION 11.08. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
agreements made and to be performed entirely within the State of Delaware
without giving effect to the laws that might otherwise govern under applicable
principles of conflict of laws thereof. Notwithstanding the foregoing, the
parties agree that any instrument or agreement to which Buyer Sub 1 or Buyer
Sub 2 is a party and as to which the laws of the United Kingdom apply shall be
governed by, and construed in accordance with, the laws of the United Kingdom.
SECTION 11.09. Notices. Any notice, demand, claim, request, waiver or
consent or other communication required or permitted to be given under the
provisions of this Agreement shall be in writing and shall be deemed to have
been duly delivered if delivered by any of the following means of delivery,
and shall be deemed to have been duly delivered and received on the date (or
the next Business Day if delivery is not made on a Business Day) of personal
delivery or facsimile transmission or on the date (or the next Business Day if
delivery is not made on a Business Day) of receipt, if mailed by registered or
certified mail, postage prepaid and return receipt requested, or on the date
(or the next Business Day if delivery is not made on a Business Day) of a
stamped receipt, if sent by an overnight delivery service, and sent to the
following addresses (or to such other address as any party may request, in the
case of the Company, by notifying Buyer and Majority Holder, in the case of
Buyer, by notifying the Company and Majority Holder, and in the case of
Majority Holder by notifying the Company and Buyer, in each case in accordance
with this Section):
(a) If to the Company:
@Track Communications, Inc.
0000 Xxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: J. Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Liddell & Xxxx LLP
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to Buyer:
Minorplanet Systems PLC
Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx XX0 0XX
Xxxxxx Xxxxxxx
Attn: Xxxxxx Xxxxx
Telephone: 000 00 000 000 0000
Facsimile: 011 44 113 251 1672
with a copy to:
Mishcon de Reya, Solicitors
00 Xxxxxxxxxxx Xxx
Xxxxxx
XX0X0XX
Xxxxxx Xxxxxxx
Attn: Xxxxx Xxxxxx
Telephone: 000 00 00 0000 0000
Fax: 000 00 00 0000 0000
with a copy to:
Xxxxx & Wood LLP
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(c) If to Mackay, Majority Holder, or the Other Mackay Holders:
Mackay Xxxxxxx LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 11.10. No Brokers. Each of the Company, Buyer, Mackay and
Majority Holder represents and warrants to the other parties hereto that no
broker, finder, agent or similar intermediary has acted directly or indirectly
on its behalf in connection with this Agreement or the transactions
contemplated hereby, and that there are no brokerage commissions, finders'
fees or similar fees or commissions payable in connection therewith based on
any agreement, arrangement or understanding with it or any action taken by it.
Each of the Company, Buyer, Mackay and Majority Holder agrees to indemnify and
hold the other parties harmless from any and all claims, losses, liabilities,
expenses (including reasonable attorney fees), demands or commissions or other
compensation by any broker, finder, agent or similar intermediary claiming to
have been employed by or on behalf of such parties.
SECTION 11.11. Public Announcements. Each of the Company, Buyer, Mackay
and Majority Holder agree that, prior to the making of any public announcement
or any disclosure to any third party with respect to the transactions
contemplated by this Agreement, it will consult with the other parties hereto
and shall either agree upon the text of a joint announcement or obtain the
others' prior, written approval of an announcement to be made solely on behalf
of such party. Any of the parties may make such disclosures or statements as
it determines may be required by law, regulation, or rule of any bona fide
Governmental Authority (provided that before making any such disclosure or
statement, the party making the disclosure shall discuss the nature and manner
of such disclosure with the other parties). The Company acknowledges that
Buyer and Mackay intend to make disclosures relating to the Company and the
transactions contemplated by this Agreement in order to, in the case of Buyer,
secure the financing of the transactions contemplated hereby, and, in the case
of Mackay and Majority Holder, to communicate with other holders of the Notes,
provided that each Buyer and Mackay and Majority Holder confirms that all
third parties to whom such disclosure is made will be made aware (where
applicable) prior to any such disclosure (a) that they in receipt of material
non-public information, (b) that such information is confidential and such
parties shall agree to maintain such information as confidential, and (c) that
they may be prohibited from trading securities of the Company prior to public
announcement of the transactions contemplated hereby.
SECTION 11.12. Exhibits and Schedules. The Exhibits and the Schedules
contained in the Disclosure Statement are being separately delivered by the
Company to Buyer and by Buyer to the Company concurrently with the execution
of this Agreement and such receipt is being acknowledged by each of the
parties to this Agreement. All Exhibits and Schedules referred to in this
Agreement are an integral part of and are hereby incorporated into this
Agreement by reference.
SECTION 11.13. Enforcement; Consent to Jurisdiction. The parties agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement in any
court of competent jurisdiction, this being in addition to any other remedy to
which the parties are entitled at law or in equity. Each of the parties agrees
to submit itself to the jurisdiction of any state or federal court sitting in
the State of Delaware. In addition, each of the parties hereto agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, and that it will not bring any
action relating to this Agreement or any of the transactions contemplated by
this Agreement in any court other than such court.
SECTION 11.14. Severability. The parties agree that (i) the provisions of
this Agreement shall be severable in the event that any of the provisions
hereof are held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, (ii) they shall negotiate in good faith to replace
any provisions that are finally determined to be invalid, void or otherwise
unenforceable with other provisions that are as similar as possible in terms
to such invalid, void or otherwise unenforceable provisions but are valid and
enforceable, and (iii) the balance of this Agreement shall not be affected and
shall remain enforceable to the fullest extent permitted by law. Whenever
possible, each provision of this Agreement shall be interpreted in such a
manner as to be valid and shall be enforced to the fullest extent permitted by
law.
SECTION 11.15. Calculation of Capital Stock. Notwithstanding any other
provision in this Agreement, all references contained in this Agreement to the
amount of capital stock of the Company authorized, issued, to be issued, or
held by any party shall be interpreted to mean the capital stock of the
Company prior to the occurrence of the Reverse Stock Split.
SECTION 11.16. Majority Holder Signatures. The parties hereto acknowledge
and agree that Mackay is, on the date of this Agreement, delivering to the
other parties to this Agreement executed signature pages representing accounts
under its control holding not less than 92% of the Majority Holder Notes and
the Other Mackay Holders Notes in the aggregate (the "Signing Percentage")
referenced in the Recitals. Mackay covenants and agrees that it shall use its
commercially reasonable efforts to obtain and deliver to the Company and Buyer
within five (5) Business Days of the date of this Agreement, executed
signature pages representing the Other Mackay Holders.
SECTION 11.17. Other Matters. The parties agree that, to the extent that
any Other Mackay Holders execute this Agreement after the date hereof, the
term Majority Holder will further be deemed to include such party and the term
Other Mackay Holders shall no longer be deemed to include such party. Wherever
in this Agreement, the term "Majority Holder" shall be interpreted to include
the term "Other Mackay Holders" in accordance with the Preamble of this
Agreement, then to the extent that the terms "Majority Holder Shares" or
"Majority Holder Notes" are used in conjunction with the term Majority Holder
in the provision being reviewed, the terms "Other Mackay Holders Shares" or
"Other Mackay Holders Notes" shall also be included in such provision as
applicable and as the context may require, in order to give full meaning to
the intent of the parties as to the applicability of the provision.
SECTION 11.18. Counterparts. This Agreement may be executed in two or
more counterparts, each of which when executed and delivered shall be deemed
an original, and all of which when taken together shall be considered one and
the same instrument, and this Agreement shall become effective when such
counterparts have been signed by each of the parties hereto and delivered to
the other parties. The parties hereto agree that signatures of the parties and
their duly authorized officers may be exchanged by facsimile transmission, and
that such signatures shall be binding to the same extent, and have the same
force and effect, as the exchange of original written signatures. The
originals of such signatures shall be sent to the other parties hereto by
overnight courier.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first written above.
@TRACK COMMUNICATIONS, INC.
By: _____________________________
Name: _______________________
Title: _______________________
MINORPLANET SYSTEMS PLC
By:______________________________
Name: _______________________
Title: _______________________
MACKAY XXXXXXX LLC
(for and on behalf of the Majority
Holders and as otherwise provided
in the definition of "Mackay" in
Section 1.01 hereof)
By: _____________________________
Name: ______________________
Title:_______________________
DISCLOSURE STATEMENT
TO
STOCK PURCHASE AND EXCHANGE AGREEMENT
BY AND AMONG
@TRACK COMMUNICATIONS, INC.,
MINORPLANET SYSTEMS PLC,
AND
MACKAY XXXXXXX LLC
This Disclosure Statement is delivered as of February 14, 2001,
pursuant to that certain Stock Purchase and Exchange Agreement of even date
(the "Agreement"), by among the Company, Buyer, and Majority Holder (as such
parties are defined in the Preamble of the Agreement). By their execution
hereof, the Company, Buyer and Majority Holder each agree and acknowledge that
the disclosures of the other parties hereto contained in the Schedules that
are attached hereto have been made to them by such other party. By its
execution hereof, each of the Company, Buyer and Majority Holder each agrees
and acknowledges that the disclosures required to be made by it have been made
to the other parties hereto. This Disclosure Statement may be executed in one
or more counterparts, and by any party on separate counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
[Signature Page Follows]
AGREED AND ACKNOWLEDGED:
@TRACK COMMUNICATIONS, INC.
By: __________________________
Name: ___________________
Title: ___________________
MINORPLANET SYSTEMS PLC
By: __________________________
Name: ___________________
Title:____________________
MACKAY XXXXXXX LLC
(for and on behalf of the Majority Holders
and as otherwise provided in the definition
of "Mackay" in Section 1.01 hereof)
By: __________________________
Name: ___________________
Title: ___________________
