1
EXHIBIT 10.14
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated June 6, 1997, between BearCom, Inc., a
Texas corporation ("Buyer"), and Motorola, Inc., a Delaware corporation
("Seller").
WHEREAS, Seller is, among other things, engaged through Motorola Radio
Rental, part of the Radio Products Group of Land Mobile Products Sector
("MRR"), in the business of renting to third parties Motorola conventional and
trunked two-way radio analog and digital equipment (the "Business"); and
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, certain assets, properties, rights and claims of MRR, all on the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, it is hereby agreed between Seller and Buyer as follows:
ARTICLE I
PURCHASE AND SALE
1.1 PURCHASED ASSETS. Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, Seller shall sell, transfer, assign, convey and
deliver to Buyer, and Buyer shall purchase from Seller, only the assets,
properties and rights of MRR listed below (collectively, the "Purchased
Assets"):
(a) cash advances and other customer deposits of those customers
listed on the Customer List (as defined below) for services to be performed
following the Closing, as listed on Schedule 1.1(a) (the "Customer
Deposits");
(b) inventories, supplies, service inventories and field service
expendable parts and other materials listed on Schedule 1.1(b) located at
Seller's facilities, in transit to or from Seller's facilities, or held by
Seller's customers (the "Inventory");
(c) fixed assets, including computer equipment, software and
distribution center equipment listed on Schedule 1.1(c);
(d) rights and claims under sales contracts, customer purchase orders
and other agreements listed in Schedule 1.1(d) to which the customers
listed on the Customer List are a party (the "Customer Contracts");
(e) rights and claims under extended service and warranty agreements
described in Schedule 1.1(e) (the "Service Agreements");
(f) the customer list set forth in Schedule 1.1(f) the ("Customer
List");
(g) Seller's interest in and to the 0-000-000-0000 telephone number
and the 0-000-000-0000 telephone facsimile number.
1.2. EXCLUDED ASSETS. Notwithstanding the provisions of Section 1.1, the
Purchased Assets shall not include the following (collectively, the
"Excluded Assets"):
(a) all cash (except Customer Deposits), bank deposits and cash
equivalents;
Page 1
2
(b) all notes and accounts receivable;
(c) the name "Motorola" or any related or similar trade names,
trademarks, service marks or logos to the extent the same incorporate
the name "Motorola" or any variation thereof;
(d) the software listed or described on Schedule 1.2(d);
(e) the real property located at Xxxx Xxxxx, Xxxxxxxx (the "Plum
Grove Facility");
(f) all contracts, agreements and other arrangements not included in
the Purchased Assets, including without limitation, the agreement between
Seller and Nextel relating to Seller's use of Nextel's 800 mz. systems and
the other agreements, listed or described on Schedule 1.2(f);
(g) all other assets, rights and claims of Seller, MRR or the
Business not listed or described in Section 1.1 above;
(h) Seller's employee benefit agreements, plans or arrangements
maintained by Seller on behalf of persons employed by MRR;
(i) all vehicles and rights under vehicle leases;
(j) any rights to the use of any facilities;
(k) inventory of MRR listed on Schedule 1.2(k).
1.3 ASSUMED LIABILITIES. On the Closing Date, Buyer shall deliver to
Seller the assumption agreement pursuant to which Buyer shall assume and agree
to discharge the following obligations and liabilities of Seller in accordance
with their respective terms and subject to the respective conditions thereof:
(a) all liabilities and obligations arising in connection with
Customer Deposits;
(b) all liabilities and obligations of Seller to be paid or performed
after the Closing Date under (i) the Customer Contracts and (ii) the
Service Agreements;
(c) all liabilities and obligations arising in connection with the
Purchased Assets after the Closing.
All of the foregoing liabilities and obligations to be assumed by Buyer
hereunder (excluding any Excluded Liabilities) are referred to herein as the
"Assumed Liabilities."
1.4 EXCLUDED LIABILITIES. Buyer shall not assume or be obligated to pay,
perform or otherwise discharge any liability or obligation of Seller, not
expressly assumed by Buyer pursuant to the assumption agreement (all such
liabilities and obligations not being assumed herein are referred to herein as
the "Excluded Liabilities"). Notwithstanding anything to the contrary herein,
none of the following shall be Assumed Liabilities for purposes of this
Agreement:
(a) any accounts payable;
(b) any intracompany payables and other liabilities or obligations
of MRR to Seller;
(c) any liabilities or obligations in respect of any Excluded Assets.
Page 2
3
ARTICLE II
PURCHASE PRICE
--------------
2.1 PURCHASE PRICE. The purchase price for the Purchased Assets (the
"Purchase Price") shall be [Confidential Treatment Requested with SEC] payable
in cash at Closing (as defined herein). At the Closing, as additional
consideration, Buyer shall assume and agree to pay and discharge the Assumed
Liabilities in accordance with their respective terms.
2.2 ALLOCATION OF PURCHASE PRICE. The parties shall allocate the Purchase
Price and the Assumed Liabilities for tax reporting purposes as set forth on
Schedule 2.2.
ARTICLE III
CLOSING
-------
3.1 CLOSING DATE. The transfer of the Purchased Assets and the assumption
of the Assumed Liabilities contemplated by this Agreement, and all
transactions related thereto (the "Closing") shall occur at 10:00 A.M., local
time, on June 6, 1997, or such later date as may be agreed upon by Buyer and
Seller, at the offices of Seller, or at such other place or at such other time
as shall be agreed upon by Buyer and Seller. The time and date on which the
Closing is actually held are sometimes referred to herein as the "Closing
Date." Upon consummation, the Closing shall be deemed to take place as of the
opening of business on the Closing Date.
3.2 BUYER'S DELIVERIES. At Closing, Buyer shall deliver to Seller the
following:
(a) the Purchase Price (as adjusted) by wire transfer of immediately
available funds to Seller's account specified by Seller in writing to
Buyer at least two business days prior to the Closing;
(b) the amount equal to Buyer's prorata share of certain prepaid
expenses (as described in Section 6.3) by wire transfer of immediately
available funds to Seller's account specified by Seller in writing to
Buyer at least two business days prior to the Closing;
(c) copy of Buyer's Certificate of Incorporation certified as of a
recent date by the Secretary of State of the State of Texas;
(d) certificate of good standing of Buyer issued as of a recent date
by the Secretary of State of the State of Texas;
(e) certificate of the secretary or an assistant secretary of Buyer,
dating the closing Date, in form and substance reasonably satisfactory to
Seller, as to (i) no amendments to the Certificate of Incorporation of
Buyer since a specified date; (ii) the by-laws of Buyer; (iii) the
resolutions of the Board of Directors of Buyer authorizing the execution
and performance of this Agreement and the transactions contemplated hereby;
and (iv) incumbency and signatures of the officers of Buyer executing this
Agreement and any other agreement, instrument and document being or to be
executed and delivered by Buyer under this Agreement or in connection
herewith (the "Buyer Ancillary Agreements");
(f) the Assumption Agreement in the form attached as Attachment A
duly executed by Buyer; and
(g) the Transition Services Agreement in the form attached as
Attachment B (the
Page 3
4
"Transition Services Agreement") duly executed by Buyer.
3.3. SELLER'S DELIVERIES. At Closing, Seller shall deliver to Buyer the
following:
(a) copy of the Certificate of Incorporation of Seller certified as
of a recent date by the Secretary of State of the State of Delaware;
(b) certificate of good standing of Seller issued as of a recent date
by the Secretary of State of the State of Delaware;
(c) certificate of the secretary or an assistant secretary of Seller,
dated the Closing Date, in form and substance reasonably satisfactory to
Buyer, as to (i) no amendments to the Certificate of Incorporation of
Seller since a specified date; (ii) the by-laws of Seller; (iii) the
resolutions of the Board of Directors of Seller authorizing the execution
and performance of this Agreement and the transactions contemplated
hereby; and (iv) incumbency and signatures of the officers of Seller
executing this Agreement and any other agreement, instrument and document
being or to be executed and delivered by Seller under this Agreement or in
connection herewith (the "Seller Ancillary Agreements");
(d) the Xxxx of Sale and Assignment Agreement in the form attached as
Attachment C duly executed by Seller;
(e) All consents, waivers or approvals obtained by Seller with
respect to the Purchased Assets;
(f) The Transition Services Agreement duly executed by Seller; and
(g) Such other assignments and other instruments of transfer or
conveyance as Buyer may reasonably request or as may be otherwise
necessary to evidence and effect the sale, assignment, transfer,
conveyance and delivery of the Purchased Assets to Buyer.
In addition to the above deliveries, at Closing, Seller, at Buyer's cost
and expense, shall take all steps and actions as Buyer may reasonably request
or as may otherwise be necessary to put Buyer in actual possession or control
of the Purchased Assets.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
4.1. ORGANIZATION OF SELLER. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has full corporate power and authority to own or lease and to operate and
use its properties and assets and to carry on its business as now conducted.
4.2. AUTHORITY OF SELLER. Seller has full power and authority to execute,
deliver and perform this Agreement and the Seller Ancillary Agreements. All
corporate actions required to be taken by Seller to authorize the execution,
delivery and performance of this Agreement and the Seller Ancillary Agreements
have been duly and properly taken. The Agreement and the Seller Ancillary
Agreements have been duly authorized, executed and delivered by Seller and are
the legal, valid and binding obligation of Seller enforceable in accordance
with its terms.
Neither the execution and delivery of this Agreement or the Seller
Ancillary Agreements or the consummation of any of the transactions
contemplated hereby or thereby nor compliance with or fulfillment of the terms,
conditions and provisions hereof or thereof will (a)
Page 4
5
conflict with, result in a breach of the terms, conditions or provisions of, or
constitute a default, an event of default or an event creating rights of
acceleration, termination or cancellation or a loss of rights under, or result
in the creation or imposition of any lien, claim or other encumbrance upon any
of the Purchased Assets, under (i) the Certificate of Incorporation or By-laws
of Seller, (ii) any material note, instrument, agreement, mortgage, lease,
license, franchise, permit or other authorization, right, restriction or
obligation to which Seller is a party or any of the Purchased Assets is subject
or by which Seller is bound, (iii) any order, writ, injunction, decree or
judgment of any court or governmental agency to which Seller is a party or any
of the Purchased Assets is subject or by which Seller is bound, or (iv) any
laws or regulation affecting Seller or the Purchased Assets; or (b) require the
approval, consent, authorization or act of, or the making by Seller of any
declaration, filing or registration with, any person.
4.3. TITLE TO ASSETS. Seller is the sole and exclusive legal owner of all
title in and has good and marketable title to all of the Purchased Assets. None
of the Purchased Assets are subject to any security interest, mortgage, pledge,
lien, charge or encumbrance (collectively, "Liens"). Upon delivery of the
Purchased Assets or the documents of title thereto as required by this
Agreement, good and marketable title thereto will vest in Buyer, free and clear
of Liens, except for required consents, approvals or waivers listed on Schedule
4.3. Schedule 4.3 lists all consents, approvals or waivers required in
connection with the transfer or assignment to Buyer of Seller's rights under the
Service Agreements and Customer Contracts.
4.4. CUSTOMER CONTRACTS. To Seller's knowledge, the Customer Contracts are
valid and binding in accordance with their terms, are in full force and effect
and Seller is not in breach of any material provision of, in violation in any
material respect of, or in default in any material respect under the terms
thereof, and has performed in all material respects thereunder. True and
complete copies of the Customer Contracts and all amendments and modifications
thereof have been delivered or made available to Buyer.
4.5. LITIGATION. Seller is not engaged in or a party to, and, to the
knowledge of Seller, there is not threatened, any suit, action, proceeding,
investigation or legal, administrative, arbitration or other method of settling
disputes or disagreements or governmental investigation affecting the Purchased
Assets.
4.6. NO FINDER. Neither Seller nor any person acting on its behalf has
paid or become obligated to pay any fee or commission to any broker, finder or
intermediary for or on account of the transactions contemplated by this
Agreement.
4.7. DISCLAIMER. The representations and warranties set forth in this
Article IV (as modified or qualified by the schedule attached hereto) are the
only representations and warranties made by Seller with respect to the
Purchased Assets. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, SELLER IS SELLING
THE PURCHASED ASSETS TO BUYER "AS IS", "WHERE IS" AND WITH ALL FAULTS. EXCEPT
AS SPECIFICALLY SET FORTH HEREIN, ALL WARRANTIES, EXPRESS OR IMPLIED, ARE
HEREBY DISCLAIMED AND EXCLUDED, INCLUDING WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL SELLER BE LIABLE FOR
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES. Seller makes no representation or
warranty as to the accuracy or reliability of any forecasts of revenues, sales,
expenses or profits of the Business.
The exceptions, modifications, descriptions and disclosures set forth
herein or in any Schedule attached hereto are made for all purposes of this
Agreements, are exceptions to all representation and warranties set forth in
this Agreement, and are not limited to the specific section of this Agreement
to which they are referenced. Where a written report or other document has been
delivered to or is in the possession of Buyer or its counsel which discloses
the existence of any fact or circumstance which should have been disclosed in
this Agreement or in a Schedule, such fact or circumstance is deemed disclosed
for all purposes of this Agreement and is an exception to the representations
and warranties set forth herein. Buyer shall have no right to
Page 5
6
compel compliance or to bring an action for indemnification arising out of
matters set forth as exceptions herein or in any Schedule, except as otherwise
expressly set forth herein or therein.
Any reference to "Seller's knowledge" refers only to the actual
knowledge of Xxx Halt (National Rental Manager, Radio Products Americas Group),
Xxx Xxxxxxxx (Group Controller, Radio Products Group) and Xxxx Xxxxxxxx
(Corporate Vice President and General Manager, U.S./Canada Division, Radio
Products Americas Group).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller and agrees as follows:
5.1. ORGANIZATION OF BUYER. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas and has full
corporate power and authority to own or lease and to operate and use its
properties and assets and to carry on its business as now conducted.
5.2. AUTHORITY OF BUYER. Buyer has full power and authority to execute,
deliver and perform this Agreement and the Buyer Ancillary Agreements. All
corporate actions required to be taken by Buyer to authorize the execution,
delivery and performance of this Agreement and the Buyer Ancillary Agreements
have been duly and properly taken. This Agreement and the Buyer Ancillary
Agreements have been duly authorized, executed and delivered by Buyer and are
the legal, valid and binding agreement of Buyer enforceable in accordance with
its terms.
Neither the execution and delivery of this Agreement or the Buyer
Ancillary Agreements or the consummation of any of the transactions
contemplated hereby or thereby nor compliance with or fulfillment of the terms,
conditions and provisions hereof or thereof will (a) conflict with, result in
a breach of the terms, conditions or provisions of, or constitute a default, an
event of default or an event creating rights of acceleration, termination or
cancellation or a loss of rights under (i) the Certificate of Incorporation or
By-laws of Buyer, (ii) any material note, instrument, agreement, mortgage,
lease, license, franchise, permit or other authorization, right, restriction or
obligation to which Buyer is a party or any of its properties is subject or by
which Buyer is bound, (iii) any order, writ, injunction, decree or judgment of
any court or governmental agency to which Buyer is a party or by which it is
bound or (iv) any law or regulation affecting Buyer; or (b) require the
approval, consent, authorization or act of, or the making by Buyer of any
declaration, filing or registration with, any person.
5.3 NO FINDER. Neither Buyer nor any person acting on its behalf has paid
or become obligated to pay any fee or commission to any broker, finder or
intermediary for or on account of the transactions contemplated by this
Agreement.
5.4. KNOWLEDGE OF THE BUSINESS. Buyer, through persons under its
control, is fully familiar with the Purchased Assets and the Assumed
Liabilities. Buyer has no knowledge of any information which makes, or if known
to Seller would make, any representation, warranty or covenant of Seller
contained herein untrue. Buyer has no knowledge of any facts or circumstances
which would constitute a breach of any representation, warranty or covenant of
Seller contained herein, or which would, with the passage of time or adequate
notice or both, constitute such a breach, or which would entitle Buyer to make
a claim for indemnification under this Agreement.
5.5. BUYER'S BUSINESS INVESTIGATION. Buyer has conducted such
investigation of the Purchased Assets as it has deemed necessary in order to
make an informed decision concerning the transactions contemplated hereby.
Buyer has reviewed all of the Inventory, equipment, documents, records, reports
and other materials identified in the Schedules hereto, and is familiar with
the content thereof. Buyer acknowledges that it has been given access to the
Purchased
Page 6
7
Assets and is familiar with the condition thereof. For the purpose of
conducting these investigations, Buyer has employed the services of its own
agents, representatives, experts and consultants. In all matters affecting the
condition of the Purchased Assets or the contents of the documents, records,
reports or other materials in connection with the transactions contemplated
hereby, Buyer is relying primarily upon the advice and opinion offered by its
own agents, representations, experts, consultants, employees and officers. With
respect to information furnished by Seller, the Buyer has relied only upon
information set forth herein or in a Schedule attached hereto and has not
relied upon any other information or statement, oral or written, not described
herein or in a Schedule attached hereto.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1. CONTINUED ASSISTANCE. For a period of 12 months from the Closing
Date, Seller shall refer to Buyer as promptly as practicable any rental orders
and rental inquiries from the customers listed on the Customer List. From time
to time following the Closing, Seller shall execute and deliver, or cause to be
executed and delivered, to Buyer such other instruments of conveyance and
transfer as Buyer may reasonably request or as may be otherwise necessary to
more effectively convey and transfer to, and vest in, Buyer and put Buyer in
possession of, any part of the Purchased Assets.
6.2. RECEIVABLES. Buyer shall transfer and deliver to Seller promptly
upon receipt any and all amounts it may receive from Seller's customers as
payment in respect of the accounts receivable described in Section 1.2(b).
Seller may upon reasonable notice and during normal business hours, review
Buyer's books and records to determine whether Buyer has satisfied its
obligations under this Section.
6.3. REIMBURSEMENT OF PREPAID EXPENSES. At the Closing, Buyer agrees to
reimburse Seller for Buyer's share of all expenses listed on Schedule 6.3,
prepaid by Seller. The expenses relating to the period prior to the Closing
shall be for the account of Seller and the expenses relating to the period
after the Closing shall be for the account of Buyer.
6.4. MOTOROLA AUTHORIZED DEALER RENTAL INQUIRY REFERRAL. For a period of
12 months from the Closing Date, the rental business of Seller's Americas
Service Division ("ASD") will use reasonable efforts to refer to Buyer
inquiries for rental of the two-way radio products listed below that ASD
receives from a U.S.-based Motorola Authorized Two-Way Radio dealer or Radius
Communication Products dealer:
000 xxx XXXXXXX XXX XXXXXXX
XXX0000 HT1000
VISAR JT1000
MTX900 VISAR
HT600
000 xxx XXXXXXX XX0000
XXX0000
MTX810CONV UHF XXXXXXX
XXX000 XXX000
VISAR JT1000
MTX800 MT2000
VISAR
HT600
MT1000
GP350
Page 7
8
Buyer acknowledges that Seller's rental inquiry referral covenant set
forth above will in no way limit Seller's ability to enter into any transaction
with any dealer or equipment maintenance customer of Seller for the two-way
radios identified above for any ASD radio loaner program that relates to ASD's
equipment maintenance business.
6.5. SOURCING AUTHORIZATION. Seller agrees that, (a) for a period of 24
months from the Closing Date and (b) only so long as at least 50% of Buyer's
rental revenues are generated from the rental of Motorola equipment, Buyer
shall be entitled to tell its customers that Buyer is an official source for
Motorola rental radios in the United States; provided, however, that Buyer is
in no way authorized to use, and Buyer agrees not to use, the "Motorola"
stylized name, stylized logo or type fond. Seller may upon reasonable notice
and during normal business hours review Buyer's books and records to determine
whether Buyer satisfied the condition set forth in Section 6.8(b) above.
6.6. ADVERTISING. For a period of 12 months from the Closing Date, Seller
agrees that MRR (or any successor thereto) will not initiate any new
advertising regarding its rental radio business in either the telephone
directory "yellow pages" or its invoices to customers.
6.7. INVENTORY. Buyer acknowledges that on the Closing Date a portion of
the Inventory will be held by Seller's customers. Seller agrees that it shall
forward such Inventory to Buyer, at Buyer's direction and at Buyer's cost, as
soon as practicable after such Inventory is returned to Seller.
ARTICLE VII
INDEMNIFICATION
7.1. SURVIVAL. The obligations of the parties pursuant to this Agreement
will survive the Closing in accordance with their terms. The obligations of the
parties with respect to the other agreements contemplated by this Agreement
will expire in accordance with their respective terms. All representations and
warranties contained in this Agreement shall not survive the Closing.
7.2. INDEMNIFICATION BY SELLER. Seller agrees to indemnify and hold
harmless Buyer from and against any and all losses, liability or damage
(including reasonable attorney's fees) (collectively, "Losses") incurred by
Buyer in connection with or arising from (a) any breach by Seller of any of its
covenants in this Agreement or in the Seller Ancillary Agreements; (b) any
failure of Seller to perform any of its obligations in this Agreement or in the
Seller Ancillary Agreements; (c) any breach of any warranty or the inaccuracy
of any representation of Seller contained in this Agreement; or (d) the failure
of Seller to perform any Excluded Liability.
7.3. INDEMNIFICATION BY BUYER. Buyer agrees to indemnify and hold harmless
Seller from and against any and all Losses incurred by Seller in connection
with or arising from (a) any breach by Buyer of any of its covenants or
agreements in this Agreement or in the Buyer Ancilliary Agreements; (b) any
failure by Buyer to perform any of its obligations in this Agreement or in the
Buyer Ancillary Agreements; (c) any breach of any warranty or the inaccuracy of
any representation of Buyer contained in this Agreement; or (d) the failure of
Buyer to perform any Assumed Liability.
7.4 NOTICE OF CLAIMS.
(a) A party (the "Indemnified Party") seeking indemnification
hereunder shall give to the party obligated to provide indemnification to
such Indemnified Party (the "Indemnitor") a notice (a "Claim Notice")
describing in reasonable detail the facts giving rise to any claim for
indemnification hereunder and shall include in such Claim Notice (if then
known) the amount or the method of computation of the amount of such
claim, and a reference to the provision of this Agreement or any other
agreement, document or
Page 8
9
instrument executed hereunder or in connection herewith upon which such claim
is based; provided, that a Claim Notice in respect of any action at law or suit
in equity by or against a third person as to which indemnification will be
sought shall be given promptly after the action or suit is commenced; provided
further, that failure to give such notice shall not relieve the Indemnitor of
its obligations hereunder except to the extent it shall have been prejudiced by
such failure.
(b) In calculating any Loss there shall be deducted (i) any insurance
recovery in respect thereof (and no right of subrogation shall accrue hereunder
to any insurer) and (ii) the amount of any tax benefit to the Indemnified Party
with respect to such Loss or Expense (after giving effect to the tax effect of
receipt of the indemnification payments).
(c) After the giving of any Claim Notice pursuant hereto, the amount of
indemnification to which an Indemnified Party shall be entitled under this
Article VII shall be determined: (i) by the written agreement between the
Indemnified Party and the Indemnitor; (ii) by a final judgment or decree of any
court of competent jurisdiction, or (iii) by any other means to which the
Indemnified Party and the Indemnitor shall agree. The judgment or decree of a
court shall be deemed final when the time for appeal, if any, shall have
expired and no appeal shall have been taken or when all appeals taken shall
have been finally determined. The Indemnified Party shall have the burden of
proof in establishing the amount of Loss suffered by it.
7.5. THIRD PERSON CLAIMS.
(a) Subject to Section 7.5(b), the Indemnified Party shall have the right
to conduct and control, through counsel of its choosing, the defense,
compromise or settlement of any third person claim, action or suit against such
Indemnified Party as to which indemnification will be sought by any Indemnified
Party from any Indemnitor hereunder, and in any such case the Indemnitor shall
cooperate in connection therewith and shall furnish such records, information
and testimony and attend such conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably requested by the Indemnified Party in
connection therewith; provided, that the Indemnitor may participate, through
counsel chosen by it and at its own expense, in the defense of any such claim,
action or suit as to which the Indemnified Party has so elected to conduct and
control the defense thereof; and provided, further, that the Indemnified Party
shall not, without the written consent of the Indemnitor (which written consent
shall not be unreasonably withheld), pay, compromise or settle any such claim,
action or suit, except that no such consent shall be required if, following a
written request from the Indemnified Party, the Indemnitor shall fail, within
14 days after the making of such request, to acknowledge and agree in writing
that, if such claim, action or suit shall be adversely determined, such
Indemnitor has an obligation to provide indemnification hereunder to such
Indemnified Party. Notwithstanding the foregoing, the Indemnified Party shall
have the right to pay, settle or compromise any such claim, action or suit
without such consent, provided that in such event the Indemnified Party shall
waive any right to indemnity hereunder unless such consent is unreasonably
withheld.
(b) If any third person claim, action or suit against any Indemnified
Party is solely for money damages or, where Seller is the Indemnitor, will have
no continuing effect in any material respect on the Purchased Assets, then the
Indemnitor shall have the right to conduct and control, through counsel of its
choosing, the defense, compromise or settlement of any such third person claim,
action or suit against such Indemnified Party from any Indemnitor hereunder if
the Indemnitor has acknowledged and agreed in writing that, if the same is
adversely determined, the Indemnitor has an obligation to provide
indemnification to the Indemnified Party in respect thereof, and in any such
case the Indemnified Party shall cooperate in connection therewith and shall
furnish such records, information and testimony and attend such conferences,
discovery proceedings, hearings, trials and appeals
Page 9
10
as may be reasonably requested by the Indemnitor in connection therewith;
provided, that the Indemnified Party may participate, through counsel,
chosen by it and at its own expense, in the defense of any such claim,
action or suit as to which the Indemnitor has so elected to conduct and
control the defense thereof. Notwithstanding the foregoing, the
indemnified party shall have the right to pay, settle or compromise any
such claim, action or suit, provided that in such event the Indemnified
party shall waive any right to indemnity therefor hereunder unless the
Indemnified Party shall have sought the consent of the Indemnitor to such
payment, settlement or compromise and such consent was unreasonably
withheld, in which event no claim for indemnity therefor hereunder shall
be waived.
7.6. THRESHOLD AND EXCLUSIVITY.
(a) Seller shall not be liable and Buyer agrees not to enforce any
claim for indemnification under this Agreement until the aggregate of all
such claims exceeds $50,000 (the "Threshold Amount"), and then the Buyer
shall be entitled to recover only the amount of such claims in excess of
the Threshold Amount. Buyer shall provide Seller with a notice of all
claims included in the Threshold Amount. the maximum liability of Seller
for all claims and damages of every kind and character arising under or
in connection with this Agreement and the transactions contemplated
hereby, including indemnification, shall be an amount equal to the
Purchase Price. Claims for indemnification in excess of the Threshold
Amount shall be made only in increments of $2,500 or more, and claims
relating to similar products or constituting like claims may be aggregated
in determining the $2,500 amount.
(b) Indemnification pursuant to this Article VII shall be the sole
and exclusive remedy for any claim for monetary damages resulting from a
breach of any representation or warranty under this Agreement, the
Schedules hereto and any certificate delivered pursuant hereto.
ARTICLE VIII
GENERAL PROVISIONS
8.1. CONFIDENTIAL NATURE OF INFORMATION. Each party agrees that it will
treat in confidence all documents, materials and other information which it
shall have obtained regarding the other party during the course of the
negotiations leading to the consummation of the transactions contemplated
hereby (whether obtained before or after the date of this Agreement), the
investigation provided for herein and the preparation of this Agreement and
other related documents, and, in the event the transactions contemplated hereby
shall not be consummated, each party will return to the other party all copies
of nonpublic documents and materials which have been furnished in connection
therewith. Such documents, materials and information shall not be communicated
to any third Person (other than, in the case of Buyer, to its counsel,
accountants, financial advisors or lenders, and in the case of Seller, to its
counsel, accountants or financial advisors). No other party shall use any
confidential information in any manner whatsoever except solely for the purpose
of evaluating the proposed purchase and sale of the Purchased Assets; provided,
however, that after the Closing Buyer may use or disclose any confidential
information included in the Purchased Assets. The obligation of each party to
treat such documents, materials and other information in confidence shall not
apply to any information which (i) is or becomes available to such party from a
source other than such party, (ii) is or becomes available to the public other
than as a result of disclosure by such party or its agents, (iii) is required
to be disclosed under applicable law or judicial process, but only to the
extent it must be disclosed, or (iv) such party reasonably deems necessary to
disclose to obtain any of the consents or approvals contemplated hereby.
8.2. NO PUBLIC ANNOUNCEMENT. Neither Buyer nor Seller shall, without the
approval of the other, make any press release or other public announcement
concerning the transactions
Page 10
11
contemplated by this Agreement, except as and to the extent that any such party
shall be so obligated by law or the rules of any stock exchange, in which case
the other party shall be advised and the parties shall use their best efforts
to cause a mutually agreeable release or announcement to be issued; provided
that the foregoing shall not preclude communications or disclosures necessary
to implement the provisions of this Agreement or to comply with the accounting
and Securities and Exchange Commission disclosure obligations.
8.3. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given or delivered when
delivered personally or when sent via facsimile (with answerback confirmed) or
when sent by registered or certified mail or by private courier addressed as
follows:
If to Buyer, to:
BearCom, Inc.
00000 Xxxxxxxx Xx.
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Facsimile No.: 214/349-8950
with a copy to:
Gardere & Xxxxx, L.L.P.
3000 Thanksgiving Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
Facsimile No.: (000) 000-0000
If to Seller, to:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxxx
Land Mobile Products Sector
Facsimile No.: (000) 000-0000
with a copy to:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
or to such other address as such party may indicate by a notice delivered to
the other party hereto.
8.4. SUCCESSORS AND ASSIGNS. Buyer shall be entitled to assign its rights
and duties under this Agreement only with the prior written consent of Seller.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their successors and permitted assigns.
8.5. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the Attachments and
Schedules referred to herein, the documents delivered pursuant hereto and the
Non-Disclosure Agreement between Seller and Bear Communications Llp dated
December 11, 1996 contain the entire understanding of the parties hereto with
regard to the subject matter contained herein or therein, and supersede all
prior agreements, understandings or letters of intent between or among
Page 11
12
any of the parties hereto. This Agreement shall not be amended, modified or
supplemented except by a written instrument signed by an authorized
representative of each of the parties hereto.
8.6. INTERPRETATION. Article titles and headings to sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement. The Schedules and
Attachments referred to herein shall be construed with and as an integral part
of this Agreement to the same extent as if they were set forth verbatim herein.
8.7. WAIVERS. Any term or provision of this Agreement may be waived, or
the time for its performance may be extended, by the party or parties entitled
to the benefit thereof. Any such waiver shall be validly and sufficiently
authorized for the purposes of this Agreement if, as to any party, it is
authorized in writing by an authorized representative of such party. The
failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right of
any party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
8.8. EXPENSES. Each party hereto will pay all costs and expenses incident
to its negotiation and preparation of this Agreement and to its performance and
compliance with all agreements and conditions contained herein on its part to
be performed or complied with, including the fees, expenses and disbursements
of its counsel and accountants.
8.9. PARTIAL INVALIDITY. Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder
of such invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.
8.10. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be considered an original instrument,
but all of which shall be considered one and the same agreement, and shall
become binding when one or more counterparts have been signed by each of the
parties hereto and delivered to each of Seller and Buyer.
8.11. GOVERNING LAW AND DISPUTE RESOLUTION. This Agreement shall be
governed by and construed in accordance with the internal laws (as opposed to
the conflicts of law provisions) of the State of Illinois. Seller and Buyer
will attempt to settle any claim or controversy arising out of this Agreement
through consultation and negotiation in good faith and a spirit of mutual
cooperation. If those attempts fail, then the dispute will be mediated by a
mutually-acceptable mediator to be chosen by Seller and Buyer within 45 days
after written notice by one of the parties demanding mediation. Neither party
may unreasonably withhold consent to the selection of a mediator, and Seller
and Buyer will share the costs of the mediation equally. By mutual agreement,
however, Seller and Buyer may postpone mediation until each has completed some
specified but limited discovery about the dispute. The parties may also agree
to replace mediation with some other form of alternative dispute resolution
(ADR), such as neutral fact-finding or a minitrial.
Any dispute which cannot resolve by the parties through negotiation,
mediation or other form of ADR within six months of the date of the initial
demand for it by one of the parties hereto may then be submitted to the courts
within the State of Illinois for resolution (as provided in Section 8.12
below). The use of any ADR procedures will not be construed under the doctrines
of laches, waiver or estoppel to affect adversely the rights of either party.
Nothing in this section will prevent either party from resorting to judicial
proceedings if (a) good faith efforts to resolve the dispute under these
procedures have been unsuccessful or (b) interim relief from a court is
necessary to prevent serious and irreparable injury to one party or to others.
Page 12
13
8.12. SUBMISSION TO JURISDICTION. Seller and Buyer hereby irrevocable
submit in any suit, action or proceeding arising out of or relate to this
Agreement or any of the transactions contemplated hereby or thereby to the
jurisdiction of the United States District Court for the Northern District of
Illinois and the jurisdiction of any court of the State of Illinois located in
Chicago and waive any and all objections to jurisdiction that they may have
under the laws of the State of Illinois or the United States.
8.13. BULK TRANSFER. Buyer hereby waives compliance by Seller with all
applicable bulk transfer, bulk sales and similar laws and requirements of all
jurisdictions in connection with the transactions contemplated hereby. Seller
shall indemnify and hold harmless Buyer against any and all expense, loss or
damage which Buyer may suffer as a result of claims asserted by third parties
against Buyer due to any noncompliance by Seller with applicable bulk transfer
laws.
* * * *
Page 13
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
BEARCOM, INC.
By: /s/ XXXX X. XXXXXX
-------------------------
Title: Chairman
---------------------------
MOTOROLA, INC.
By: /s/ XXXX XXXXXXXXX
------------------------------
Xxxx Xxxxxxxxx
Corporate Vice President and General Manager
Radio Products Americas Group
Radio Products Group
Page 14