EXHIBIT 6.1
* * * * *
STOCK EXCHANGE AGREEMENT
BY AND AMONG
MICROWAVE TRANSMISSION SYSTEMS, INC.,
THE SOLE SHAREHOLDER OF MICROWAVE TRANSMISSION SYSTEMS, INC.,
RBS ACQUISITION CORP.
AND
HALTER FINANCIAL GROUP, INC.
* * * * *
AUGUST 6, 1999
TABLE OF CONTENTS
ARTICLE/SECTION PAGE
ARTICLE 1 - THE EXCHANGE ................................................1
1.1 The Exchange ........................................................1
1.2 Closing .............................................................1
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF MTS .......................2
2.1 Organization ........................................................2
2.2 Capitalization ......................................................2
2.3 Certain Corporate Matters ...........................................2
2.4 Authority Relative to this Agreement ................................2
2.5 Consents and Approvals; No Violations ...............................2
2.6 Disclosure ..........................................................3
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER ...........3
3.1 Ownership of the MTS Shares .........................................3
3.2 Authority Relative to this Agreement ................................3
3.3 Consents and Approvals; No Violations ...............................3
3.4 Disclosure of Information ...........................................4
3.5 Investment Experience ...............................................4
3.6 Restricted Securities ...............................................4
3.7 Legend ..............................................................4
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF THE AND HFG ...............5
4.1 Organization ........................................................5
4.2 Capitalization ......................................................5
4.3 Certain Corporate Matters ...........................................5
4.4 Authority Relative to this Agreement ................................6
4.5 Consents and Approvals; No Violations ...............................6
4.6 Subsidiaries ........................................................6
4.7 Financial Statements ................................................6
4.8 Events Subsequent to Financial Statements ...........................7
4.9 Undisclosed Liabilities .............................................7
4.10 Tax Matters ........................................................8
4.11 Real Property ......................................................8
4.12 Books and Records ..................................................8
4.13 Questionable Payments ..............................................8
4.14 Environmental Matters ..............................................9
4.15 Intellectual Property .............................................11
4.16 Insurance .........................................................11
4.17 Contracts .........................................................11
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4.18 Litigation ........................................................12
4.19 Employees .........................................................12
4.20 Employee Benefit Plans ............................................12
4.21 Legal Compliance ..................................................12
4.22 Broker's Fees .....................................................12
4.23 Disclosure ........................................................12
4.24 Powers of Attorney ................................................13
4.25 Guaranties ........................................................13
ARTICLE 5 - CONDUCT OF BUSINESS PENDING THE CLOSING ....................13
5.1 Conduct of Business by the Company Pending the Closing ............13
5.2 Other Actions .....................................................14
ARTICLE 6 - ADDITIONAL AGREEMENTS ......................................14
6.1 Access and Information ............................................14
6.2 Litigation Support ................................................14
6.3 Proxy Statement ...................................................15
6.4 Meeting of Shareholders ...........................................15
6.5 Certain Information ...............................................15
6.6 Press Releases ....................................................15
ARTICLE 7 - CONDITIONS TO CLOSING ......................................15
7.1 Conditions to Obligations of Each Party to Effect the Closing ......15
7.2 Additional Conditions to MTS's Obligations .........................16
7.3 Additional Conditions to the Obligations of the Company and HFG ....17
ARTICLE 8 - TERMINATION ................................................18
8.1 Termination by Mutual Consent ......................................18
8.2 Automatic Termination ..............................................18
8.3 Termination by Any Party ...........................................18
8.4 Material Breach ....................................................19
8.5 Effect of Termination ..............................................19
ARTICLE 9 - SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATION ............19
9.1 Survival ...........................................................19
9.2 Indemnification by HFG .............................................19
9.3 Indemnification by MTS and the Post-Closing Company ................19
9.4 Conditions of Indemnification ......................................19
9.5 Remedies Not Exclusive .............................................20
ARTICLE 10 - GENERAL PROVISIONS ........................................21
10.1 Notices ...........................................................21
10.2 Interpretation ....................................................21
10.3 Severability ......................................................21
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10.4 Miscellaneous .....................................................21
10.5 Separate Counsel ..................................................21
10.6 Governing Law .....................................................21
10.7 Counterparts ......................................................21
10.8 Amendment .........................................................22
10.9 Parties In Interest: No Third Party Beneficiaries .................22
10.10 Waiver ...........................................................22
10.11 Expenses .........................................................22
10.12 Construction .....................................................22
10.13 Arbitration of Disputes ..........................................22
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STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT, dated as of August 6, 1999 (this
"Agreement"), is made and entered into by and among Microwave Transmission
Systems, Inc., a Texas corporation ("MTS"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the sole
shareholder of MTS (the "Shareholder"), RBS Acquisition Corp., a Texas
corporation (the "Company") and Halter Financial Group, Inc., a Texas
corporation ("HFG").
WHEREAS, the respective Boards of Directors of MTS, the Company and HFG
have adopted resolutions approving and adopting the proposed stock exchange (the
"Exchange") upon the terms and conditions hereinafter set forth in this
Agreement, as contemplated by that Consulting Agreement dated July 29, 1999 by
and between HFG, MTS and the Company (the "Consulting Agreement");
WHEREAS, the Shareholder holds all of the issued and outstanding
shares of common stock of MTS in the amount set forth on Exhibit "A" hereto
(the "MTS Shares"), and the Shareholder desires to participate in the
Exchange;
WHEREAS, MTS will enter into this Agreement for the purpose of
evidencing its consent to the consummation of the Exchange and for the purpose
of making certain representations, warranties, covenants and agreements; and
WHEREAS, HFG, which is affiliated with the Company, will enter into
this Agreement for the purpose of evidencing its consent to the consummation of
the Exchange and for the purpose of making certain representations, warranties,
covenants and agreements.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE 1
THE EXCHANGE
1.1 The Exchange. Upon the terms and subject to the conditions hereof,
at the Closing (as hereinafter defined) the Shareholder will sell, convey,
assign, transfer and deliver to the Company stock certificates representing the
number of MTS Shares set forth opposite his name on Exhibit "A" hereto, and the
Company will issue to the Shareholders in exchange for the MTS Shares, stock
certificate(s) representing an aggregate of 5,750,000 shares of its common stock
(the "Company Shares") as set forth on Exhibit "A" hereto.
1.2 Closing. The closing of the Exchange (the "Closing") shall take
place on or before 10:00 a.m., local time, at the offices of the Company located
at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ on September 23, 1999,
or as soon as the conditions set forth in Article 7 have been satisfied or
waived or as soon as practicable thereafter. Such date is herein referred to as
the "Closing Date." Subject to the provisions of Article 7 and Article 8, the
failure to consummate the Exchange on the date and time determined pursuant to
this Section 1.2 will not result in the termination of this Agreement and will
not relieve any party of any obligation hereunder.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF MTS
MTS hereby represents and warrants to the Company and HFG as follows:
2.1 Organization. MTS has been duly incorporated, is validly existing
as a corporation and is in good standing under the laws of its state of
incorporation, and has the requisite corporate power to carry on its business as
now conducted.
2.2 Capitalization. The authorized capital stock of MTS consists of
1,000,000 shares of common stock, $1.00 par value, of which 1,000 shares are
issued and outstanding. All of the issued and outstanding shares of common stock
are duly authorized, validly issued, fully paid, non-assessable and free of
preemptive rights. Except as set forth on Schedule 2.2, there are no outstanding
or authorized options, rights, warrants, calls, convertible securities, rights
to subscribe, conversion rights or other agreements or commitments to which MTS
is a party or which are binding upon MTS providing for the issuance or transfer
by MTS of additional shares of its capital stock, and MTS has not reserved any
shares of its capital stock for issuance, nor are there any outstanding stock
option rights, phantom equity, profit participation or similar rights,
contracts, arrangements or commitments. There are no voting trusts or any other
agreements or understandings with respect to the voting of MTS's capital stock.
2.3 Certain Corporate Matters. MTS is duly qualified to do business as
a foreign corporation and is in good standing in each jurisdiction in which the
ownership of its properties, the employment of its personnel or the conduct of
its business requires it to be so qualified, except where such failure would not
have a material adverse effect on MTS's financial condition, results of
operations or business. MTS has full corporate power and authority and all
authorizations, licenses and permits necessary to carry on the business in which
it is engaged and to own and use the properties owned and used by it.
2.4 Authority Relative to this Agreement. MTS has the requisite
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by MTS and the consummation by MTS of the transactions contemplated hereby have
been duly authorized by the Board of Directors of MTS and no other actions on
the part of MTS are necessary to authorize this Agreement or the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by MTS and constitutes a valid and binding agreement of MTS,
enforceable against MTS in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity.
2.5 Consents and Approvals; No Violations. Except for applicable
requirements of federal securities laws and state securities or blue sky laws
and except as set forth on Schedule 2.5, no filing with, and no permit,
authorization, consent or approval of, any third party, public body or authority
is necessary for the consummation by MTS of the transactions contemplated by
this Agreement. Neither the execution and delivery of this Agreement by MTS nor
the consummation by MTS of the transactions contemplated hereby, nor compliance
by MTS with any of the provisions
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hereof, will (a) conflict with or result in any breach of any provisions of the
Articles of Incorporation or Bylaws of MTS, (b) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation to
which MTS or any of its subsidiaries is a party or by which any of them or their
properties or assets may be bound or (c) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to MTS, any of its subsidiaries
or any of their properties or assets, except in the case of clauses (b) and (c)
for violations, breaches or defaults which are not in the aggregate material to
MTS and its subsidiaries taken as a whole.
2.6 Disclosure. The representations and warranties and statements of
fact made by MTS in this Agreement are, as applicable, accurate, correct and
complete and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained herein not false or misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER
The Shareholder severally represents and warrants, as to itself and its
respective ownership in the MTS Shares, as follows:
3.1 Ownership of the MTS Shares. The Shareholder owns, beneficially and
of record, good and marketable title to the MTS Shares set forth opposite his
name on Exhibit "A" hereto, free and clear of all security interests, liens,
adverse claims, encumbrances, equities, proxies, options or Shareholders'
agreements. At the Closing, the Shareholder will convey to the Company good and
marketable title to the MTS Shares set forth opposite his name on Exhibit "A"
hereto, free and clear of any security interests, liens, adverse claims,
encumbrances, equities, proxies, options, shareholders' agreements or
restrictions.
3.2 Authority Relative to this Agreement. The execution, delivery and
performance of this Agreement by the Shareholder and the consummation by the
Shareholder of the transactions contemplated hereby have been duly authorized by
the Shareholder, and no other actions on the part of the Shareholder are
necessary to authorize this Agreement or the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by the
Shareholder and constitutes a valid and binding agreement of the Shareholder,
enforceable against the Shareholder in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity.
3.3 Consents and Approvals; No Violations. Except for applicable
requirements of the federal securities laws and the state securities or blue sky
laws, no filing with, and no permit, authorization, consent or approval of, any
public body or authority is necessary for the consummation by the Shareholder of
the transactions contemplated by this Agreement. Neither the execution and
delivery of this Agreement by the Shareholder nor the consummation by the
Shareholder of the transactions contemplated hereby, nor compliance by the
Shareholder with any
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of the provisions hereof, will (a) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, agreement or other instrument or obligation to which the
Shareholder is a party or by which the Shareholder or its properties may be
bound or (b) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Shareholder, except in the case of clauses (a) and
(b) for violations, breaches or defaults which are not in the aggregate material
to the Shareholder.
3.4 Disclosure of Information. The Shareholder acknowledges that he has
been furnished such information regarding the management, financial condition,
results of operations and business of the Company necessary to make an informed
decision regarding the Exchange. The Shareholder has had an opportunity to ask
questions of and receive answers regarding the Company and its financial
condition, results of operations or business and the terms and conditions of the
Exchange.
3.5 Investment Experience. The Shareholder acknowledges that he is able
to fend for himself, can bear the economic risk of its investment in the Company
Shares, and has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of an investment in the
Company Shares. The Shareholder is acquiring the Company Shares for his own
account, for investment purposes only and not with a view to further
distribution thereof.
3.6 Restricted Securities. The Shareholder acknowledges that the
Company Shares will not be registered pursuant to the Securities Act of 1933, as
amended (the "Securities Act") or any applicable state securities laws, that the
Company Shares will be characterized as "restricted securities" under federal
securities laws, and that under such laws and applicable regulations the Company
Shares cannot be sold or otherwise disposed of without registration under the
Securities Act or an exemption therefrom. In this regard, the Shareholder is
familiar with Rule 144 promulgated under Securities Act, as currently in effect,
and understands the resale limitations imposed thereby and by the Securities
Act. Stop transfer instructions may be issued to the transfer agent (or a
notation may be made in the appropriate records of the Company) in connection
with the Company Shares.
3.7 Legend. The Shareholder acknowledges that the certificates
representing the Company Shares shall each conspicuously set forth on the face
or back thereof a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND HFG
The Company and HFG hereby jointly and severally represent and warrant
to MTS and the Shareholder as follows:
4.1 Organization. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
and has the requisite corporate power to carry on its business as now conducted.
4.2 Capitalization. The Company's authorized capital stock consists of
40,000,000 shares of common stock, par value $.001 per share (the "Company
Common Stock"), of which 500,084 shares are issued and outstanding and
10,000,000 shares of preferred stock, par value $.001 per share, of which none
are presently issued and outstanding. All issued and outstanding shares of
Company Common Stock are duly authorized, validly issued, fully paid,
non-assessable and free of preemptive rights and are held of record by the
Company's shareholders as set forth in Schedule.
4.2 When issued, the Company Shares will be duly authorized, validly
issued, fully paid, non-assessable and free of preemptive rights, there are no
outstanding or authorized options, rights, warrants, calls, convertible
securities, rights to subscribe, conversion rights or other agreements or
commitments to which the Company or HFG are parties or which are binding upon
the Company or HFG providing for the issuance by the Company or transfer by the
Company or HFG of additional shares of the Company's capital stock and the
Company has not reserved any shares of its capital stock for issuance, nor are
there any outstanding stock option rights, phantom equity, profit participation
or similar rights, contracts, arrangements or commitments. There are no voting
trusts or any other agreements or understandings with respect to the voting of
the Company's capital stock.
4.3 Certain Corporate Matters. The Company is duly licensed or
qualified to do business and is in good standing as a foreign corporation in
every jurisdiction in which the character of the Company's properties or nature
of the Company's business requires it to be so licensed or qualified other than
such jurisdictions in which the failure to be so licensed or qualified does not,
or insofar as can reasonably be foreseen, in the future will not, have a
material adverse effect on its financial condition, results of operations or
business. The Company has full corporate power and authority and all
authorizations, licenses and permits necessary to carry on the business in which
it is engaged or in which it proposes presently to engage and to own and use the
properties owned and used by it. The Company has delivered to MTS true, accurate
and complete copies of its Articles of Incorporation and Bylaws, which reflect
all restatements of and amendments made thereto at any time prior to the date of
this Agreement. The records of meetings of the shareholders and Board of
Directors of the Company are complete and correct in all material respects. The
stock records of the Company and the shareholder lists of the Company that the
Company has previously furnished to MTS are complete and correct in all material
respects and accurately reflect the record ownership and the beneficial
ownership of all the outstanding shares of the Company's capital stock and any
other outstanding securities issued by the Company, except as may be provided in
the Plan. The Company is not in default under or in violation of any provision
of its Articles of Incorporation, Bylaws or the Plan (as hereinafter defined) in
any material respect. The Company is not in any
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material default or in violation of any restriction, lien, encumbrance,
indenture, contract, lease, sublease, loan agreement, note or other obligation
or liability by which it is bound or to which any of its assets is subject.
4.4 Authority Relative to this Agreement. Subject to approval by the
Company's Shareholders, each of the Company and HFG has the requisite corporate
power and authority to enter into this Agreement and carry out its obligations
hereunder. The execution, delivery and performance of this Agreement by the
Company and HFG and the consummation of the transactions contemplated hereby
have been duly authorized by the Boards of Directors of the Company and HFG and
except for the approval by the Company's Shareholders, no other actions on the
part of the Company or HFG are necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company and HFG and constitutes a valid and
binding obligation of the Company and HFG, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights generally or
by general principles of equity.
4.5 Consents and Approvals; No Violations. Except for approval by the
CompanyAEs shareholders and applicable requirements of federal securities laws
and state securities or blue sky laws, no filing with, and no permit,
authorization, consent or approval of, any third party, public body or authority
is necessary for the consummation by the Company and HFG of the transactions
contemplated by this Agreement. Neither the execution and delivery of this
Agreement by the Company and HFG nor the consummation by the Company or HFG of
the transactions contemplated hereby, nor compliance by the Company or HFG with
any of the provisions hereof, will (a) conflict with or result in any breach of
any provisions of the Articles of Incorporation, Bylaws, or the Plan of the
Company or HFG, (b) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which either the
Company or HFG is a party or by which either of them or any of their properties
or assets may be bound or (c) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Company or HFG, or any of their
properties or assets, except in the case of clauses (b) and (c) for violations,
breaches or defaults which are not in the aggregate material to the Company or
HFG taken as a whole.
4.6 Subsidiaries. The Company does not own, directly or indirectly, any
of the capital stock of any other corporation or any equity, profit sharing,
participation or other interest in any corporation, partnership, joint venture
or other entity.
4.7 Financial Statements. The Company has delivered to MTS audited
financial statements for the period from February 28, 1997 through June 30, 1998
and for the fiscal year ended June 30, 1999, respectively (collectively, the
"Financial Statements"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods covered thereby and present fairly the financial
condition of the Company as of such dates and the results of its operations and
changes in cash flows for such periods.
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4.8 Events Subsequent to Financial Statements. Since June 30, 1999,
there has not been any material adverse change in the business, financial
condition, operations, results of operations or future prospects. Without
limiting the generality of the foregoing, since that date there has not been:
(a) Any sale, lease, transfer, license, sublicense or
assignment of any assets, tangible or intangible, of the Company;
(b) Any damage, destruction or property loss, whether or not
covered by insurance, affecting adversely the properties or business of
the Company;
(c) Any declaration or setting aside or payment of any
dividend or distribution with respect to the shares of capital stock of
the Company or any redemption, purchase or other acquisition of any
such shares;
(d) Any subjection to any lien or security interest on any of
the assets, tangible or intangible, of the Company;
(e) Any capital expenditures or capital investment, issuance
of any note, bond or other incurrence of indebtedness, guarantee or
liability or assumption of obligations by the Company;
(f) Any cancellation, compromise, waiver or release by the
Company of any right of any material value;
(g) Any compensation or benefits paid to officers or directors
of the Company;
(h) Any change made or authorized in the Articles of
Incorporation or Bylaws of the Company;
(i) Any loan to or other transaction with any officer,
director or shareholder of the Company giving rise to any claim or
right of the Company against any such person or of such person against
the Company;
(j) Any employment contract or collective bargaining
agreement, written or oral, or modification in the terms of any
existing contract or agreement;
(k) Any promise or pledge to make any charitable or other
capital contribution; or
(l) Any commitment to any of the foregoing.
4.9 Undisclosed Liabilities. Except as otherwise disclosed under this
Agreement and as reflected on the Financial Statements, the Company has no
material liability or obligation whatsoever, either direct or indirect, matured
or unmatured, accrued, absolute, contingent or otherwise.
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4.10 Tax Matters.
(a) The Company has (and as of the Closing Date will have)
duly filed all material federal, state, local and foreign tax returns
required to be filed by or with respect to it with the Internal Revenue
Service or other applicable taxing authority, and no extensions with
respect to such tax returns have (or as of the Closing Date will have)
been requested or granted;
(b) The Company has (and as of the Closing Date will have)
paid, or adequately reserved against in the Financial Statements, all
material taxes due, or claimed by any taxing authority to be due, from
or with respect to it;
(c) To the best knowledge of the Company and HFG, there has
been no material issue raised or material adjustment proposed (and none
is pending) by the Internal Revenue Service or any other taxing
authority in connection with any of the tax returns and no claim has
been made (and none is pending) by an authority in a jurisdiction where
the Company does not file tax returns that it is or may be subject to
taxation by that jurisdiction;
(d) No waiver or extension of any statute of limitations as to
any material federal, state, local or foreign tax matter has been given
by or requested from the Company; and
(e) The Company has not filed a consent under Section 341 (f)
of the Internal Revenue Code of 1986, as amended. The Company has not
made any payment and is not obligated to make any payments that would
not be deductible under Section 280G. The Company has not been a United
States real property holding corporation within the meaning of Section
897(c)(2) during the applicable period specified in Section
897(c)(1)(A)(ii).
For the purposes of this Section 4.10, a tax is due (and must therefore
either be paid or adequately reserved against in the Financial Statements) only
on the last date payment of such tax can be made without interest or penalties,
whether such payment is due in respect of estimated taxes, withholding taxes,
required tax credits or any other tax.
4.11 Real Property. The Company does not own or lease any
real property.
4.12 Books and Records. The books and records of the Company
fairly reflect the transactions to which the Company is a party or by which
its properties are bound.
4.13 Questionable Payments. Neither the Company nor HFG nor any
employee, agent or representative of either of them has, directly or
indirectly, made any bribes, kickbacks, illegal payments or illegal political
contributions using Company funds or made any payments from the Company's
funds to governmental officials for improper purposes or made any illegal
payments from the Company's funds to obtain or retain business.
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4.14 Environmental Matters.
(a) Definitions. For the purpose of this Agreement, the
following terms shall have the meaning herein specified:
(i) "Governmental Authority" shall mean the
United States, each state, each county,
each city and each other political
subdivision in which the Company's
business is located, and any court,
political subdivision, agency or
instrumentality with jurisdiction over
the Company's business.
(ii) "Environmental Laws" shall mean (A) the
Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C.A.
9601 et seq. ("CERCLA"), (B) the Resource
Conservation and Recovery Act, as amended by
the Hazardous and Solid Waste Amendment of
1984, 42 U.S.C.A. 6901 et seq. ("RCRA"), (C)
the Clean Air Act, 42 U.S.C.A. 7401 et seq.,
(D) the Federal Water Pollution Control Act,
as amended, 33 U.S.C.A. 1251 et seq., (E)
the Toxic Substances Control Act, 15
U.S.C.A. 2601 et seq., (F) all applicable
state laws, and (G) all other laws and
ordinances relating to municipal waste,
solid waste, air pollution, water pollution
and/or the handling, discharge, disposal or
recovery of on-site or off-site hazardous
substances or materials, as each of the
foregoing has been or may hereafter be
amended from time to time.
(iii) "Hazardous Materials" shall mean, among
others, (A) any "hazardous waste" as defined
by RCRA, and regulations promulgated
thereunder; (B) any "hazardous substance" as
defined by CERCLA, and regulations
promulgated thereunder; (C) any "toxic
pollutant" as defined in the Federal Water
Pollution Prevention and Control Act, as
amended, 33 U.S.C. 1251 et seq., (commonly
known as "CWA" for "Clean Water Act"), and
any regulations thereunder; (D) any
"hazardous air pollutant" as defined in the
Air Pollution Prevention and Control Act, as
amended, 42 U.S.C. 7401 et seq. (commonly
known as "CAA" for "Clean Air Act") and any
regulations thereunder; (E) asbestos; (F)
polychlorinated biphenyls; (G) any substance
the presence of which on the Business
Location (as hereinafter defined) is
prohibited by any Environmental Laws; and
(H) any other substance which is regulated
by any Environmental Laws.
(iv) "Hazardous Materials Contamination" shall
mean the presence of Hazardous Materials in
the soil, groundwater, air or any other
media regulated by the Environmental Laws
on, under or around the Company's facilities
at levels or concentration which trigger any
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requirement under the Environmental Laws to
remove, remediate, mitigate, ▇▇▇▇▇ or
otherwise reduce the level or concentration
of the Hazardous Materials. The term
"Hazardous Materials Contamination" does not
include the presence of Hazardous Materials
in process tanks, lines, storage or reactor
vessels, delivery trucks or any other
equipment or containers, which Hazardous
Materials are used in the manufacture,
processing, distribution, use, storage,
sale, handling, transportation, recycling,
reuse or disposal of the products that were
manufactured and/or distributed by the
Company.
(b) Representations and Warranties. Based on the foregoing,
the Company and HFG jointly and severally represent and warrant that:
(i) To the best knowledge of the Company and
HFG, there has been no material failure by
the Company to comply with all applicable
requirements of Environmental Laws relating
to the Company and the Company's operations,
and neither the Company nor HFG is aware of
any facts or circumstances which could
materially impair such compliance with all
applicable Environmental Laws.
(ii) Neither the Company nor HFG has, through the
Closing Date, received notice from any
Governmental Authority or any other person
of any actual or alleged violation of any
Environmental Laws, nor is any such notice
anticipated.
(iii) Prior to the Closing Date, neither the
Company nor HFG will do or permit anything
that will cause the Company to be in
material violation of any requirements of
Environmental Laws, or do or permit a
violation of Environmental Laws that would
materially and adversely affect the
financial condition of the Company or
subject the Company to any enforcement
actions under any Environmental Laws.
(iv) To the best knowledge of the Company,
Environmental Laws do not require that any
permits, licenses or similar authorizations
to construct, occupy or operate any
equipment or facilities used in the conduct
of the Company's business.
(v) Neither the Company nor HFG has received any
notices, whether from a Governmental
Authority or some other third party, that
Hazardous Material Contamination exists at
the Business Location or at any other
location, property or facility owned or
operated by the Company in the conduct of
its business nor is the Company nor HFG
aware of any circumstances that would give
rise to an allegation of such contamination.
-10-
(vi) To the best knowledge of the Company and
HFG, no investigation, administrative order,
consent order or agreement, litigation or
settlement with respect to Hazardous
Materials or Hazardous Materials
Contamination is proposed, threatened,
anticipated, pending or otherwise in
existence with respect to any site
controlled or utilized by the Company in the
operation of its business (collectively, a
"Business Location"). To the best knowledge
of the Company and HFG, the Business
Location is not currently on, and has never
been on, any federal or state "Superfund" or
"Superlien" list.
(vii) To the best knowledge of the Company and
HFG, the Company has no liability and has
not handled or disposed of any substance,
arranged for the disposal of any substance,
exposed any employee or other individual to
any substance or condition, or owned or
operated any property or facility in any
manner that could form the basis for any
present or future action, suit, proceeding,
hearing, investigation, charge, complaint,
claim or demand against the Company for
damage to any site, location, or body of
water (surface or subsurface), for any
illness of or personal injury to any
employee or other individual, or for any
reason under any Environmental Law or
Hazardous Materials Law.
(viii) To the best knowledge of the Company and
HFG, all properties and equipment used in
the business of the Company were free of
asbestos, PCB's, methylene chloride,
trichloroethylene, 1,2-transdichlorothylene,
dioxins, and dibenzofurans.
4.15 Intellectual Property. The Company does not own or use or
have the right to use pursuant to license, sublicense, agreement or
permission any trademarks, trade names, service marks, patents, copyrights or
any applications with respect thereto. The Company and HFG have no knowledge
of any claim that, or inquiry as to whether, any product, activity or
operation of the Company, interferes with, infringes upon, misappropriates or
otherwise conflicts with any trademarks, trade-names, service marks, patents,
copyrights or other proprietary rights of any other person, corporation or
other entity; and no proceedings have been instituted, are pending or are
threatened.
4.16 Insurance. The Company has no insurance policies in
effect.
4.17 Contracts. Except as set forth on Schedule 4.17, the
Company has no material contracts, leases, arrangements and commitments
(whether oral or written). The Company is not a party to or bound by or
affected by any contract, lease, arrangement or commitment (whether oral or
written) relating to: (a) the employment of any person; (b) collective
bargaining with, or any representation of any employees by, any labor union
or association; (c) the acquisition of services, supplies, equipment or other
personal property; (d) the purchase or sale of real property; (e)
distribution, agency or construction; (f) lease of real or personal property
as lessor or lessee or
-11-
sublessor or sublessee; (g) lending or advancing of funds; (h) borrowing of
funds or receipt of credit; (i) incurring any obligation or liability; or (j)
the purchase or sale of personal property.
4.18 Litigation. Except as it relates to the Plan, the Company
is not subject to any judgment or order of any court or quasijudicial or
administrative agency of any jurisdiction, domestic or foreign, nor is there
any charge, complaint, lawsuit or governmental investigation pending against
the Company. The Company is not a plaintiff or defendant in any action,
domestic or foreign, judicial or administrative. There are no existing
actions, suits, proceedings or investigations of the Company, and neither the
Company nor HFG know of any basis for such actions, suits, proceedings or
investigations. There are no unsatisfied judgments, orders, injunctions,
decrees or stipulations affecting the Company or to which the Company is a
party.
4.19 Employees. Except for ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the Company's sole
officer and director, the Company does not have any employees. The Company
does not owe any compensation of any kind, deferred or otherwise, to any
current or previous employees. The Company has no written or oral employment
agreements with any officer or director of the Company. The Company is not a
party to or bound by any collective bargaining agreement. There are no loans
or other obligations payable or owing by the Company to any shareholder,
officer, director or employee of the Company, nor are there any loans or
debts payable or owing by any of such persons to the Company or any
guarantees by the Company of any loan or obligation of any nature to which
any such person is a party.
4.20 Employee Benefit Plans. The Company has no (a)
non-qualified deferred or incentive compensation or retirement plans or
arrangements, (b) qualified retirement plans or arrangements, (c) other
employee compensation, severance or termination pay or welfare benefit plans,
programs or arrangements or (d) any related trusts, insurance contracts or
other funding arrangements maintained, established or contributed to by the
Company.
4.21 Legal Compliance. To the best knowledge of the Company and
HFG, no claim has been filed against the Company alleging a violation of any
applicable laws (including rules regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings and charges thereunder) and regulations
of foreign, federal, state and local governments and all agencies thereof.
The Company holds all of the material permits, licenses, certificates or
other authorizations of foreign, federal, state or local governmental
agencies required for the conduct of its business as presently conducted.
4.22 Broker's Fees. Neither the Company, HFG nor anyone on their
behalf has any liability to any broker, finder, investment banker or agent,
or has agreed to pay any brokerage fees, finderAEs fees or commissions, or to
reimburse any expenses of any broker, finder, investment banker or agent in
connection with this Agreement.
4.23 Disclosure. The representations and warranties and
statements of fact made by the Company and HFG in this Agreement are, as
applicable, accurate, correct and complete and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements and information contained herein not false or
misleading.
-12-
4.24 Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of the Company.
4.25 Guaranties. The Company is not a guarantor or otherwise
liable for any liability or obligation (including indebtedness) of any other
person or entity.
ARTICLE 5
CONDUCT OF BUSINESS PENDING THE CLOSING
5.1 Conduct of Business by the Company Pending the Closing. The
Company and HFG jointly and severally covenant and agree that prior to the
Closing Date:
(a) The Company shall conduct its business and operations only
in the usual and ordinary course of business;
(b) Except as contemplated by this Agreement and as necessary
to effect the proposals contained in the Proxy Statement, the Company
shall not directly or indirectly do any of the following: (i) sell,
pledge, dispose of or encumber any of its assets; (ii) amend or propose
to amend its Articles of Incorporation or Bylaws; (iii) split, combine
or reclassify any outstanding shares of its capital stock, or declare,
set aside or pay any dividend or other distribution payable in cash,
stock, property or otherwise with respect to shares of its capital
stock; (iv) redeem, purchase or acquire or offer to acquire any shares
of its capital stock or other securities; (v) create any subsidiaries;
(vi) enter into or modify any contract, agreement, commitment or
arrangement with respect to any of the foregoing;
(c) Except as contemplated by this Agreement, the Company
shall not (i) issue, sell, pledge or dispose of, or agree to issue,
sell, pledge or dispose of, any additional shares of, or any options,
warrants, conversion privileges or rights of any kind to acquire any
shares of, its capital stock; (ii) acquire (by merger, consolidation,
acquisition of stock or assets or otherwise) any corporation,
partnership or other business organization or division or the material
assets thereof; (iii) incur any indebtedness for borrowed money, issue
any debt securities or guarantee any indebtedness to others; or (iv)
enter into or modify any contract, agreement, commitment or arrangement
with respect to any of the foregoing;
(d) The Company shall not enter into any employment, severance
or similar agreements or arrangements with, or grant any bonus, salary
increase, severance or termination pay to, any officers or directors;
(e) The Company shall not adopt any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation,
employment or other employee benefit plan, agreement, trust, fund or
arrangement for the benefit or welfare of any employee;
(f) Except as otherwise required by its Articles of
Incorporation or Bylaws, by this Agreement or by applicable law, the
Company shall not call any meeting of shareholders;
-13-
(g) The Company and HFG shall notify MTS of any emergency or
other change in the normal course of its business or in the operation
of its properties and of any tax audits, tax claims, environmental,
governmental or third party complaints, investigations or hearings (or
communications indicating that the same may be contemplated) if such
emergency, change, audit, claim, complaint, investigation or hearing
would be material, individually or in the aggregate, to the financial
condition, results of operations or business of the Company, or to the
ability of any of the parties hereto to consummate the transactions
contemplated by this Agreement;
(h) The Company shall notify MTS promptly of any material
adverse event or circumstance affecting the Company, whether threatened
or existing (including the filing of any material litigation against
the Company or the existence of any dispute with any person or entity
which involves a reasonable likelihood of such litigation being
commenced); and
(i) The Company shall comply in all material respects with all
legal requirements and contractual obligations applicable to its
operations and business and pay all applicable taxes.
5.2 Other Actions. Unless approved in writing by MTS, the Company
and HFG shall not to take any action or permit any action to occur that might
reasonably be expected to result in any of the representations and warranties
of the Company and HFG contained in this Agreement becoming untrue, false or
misleading after the date hereof or any of the conditions to the Closing set
forth in Article 7 of this Agreement not being satisfied.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Access and Information. Except for information relating to any
claims any party may have against the other, MTS and the Company shall each
afford to the other and to the other's financial advisors, legal counsel,
accountants, consultants and other representatives necessary access, at all
reasonable times, and in a manner so as not to interfere with the normal
business operations, throughout the period prior to the Closing to all of its
books, records (including tax records), properties and personnel and, during
such period in order to allow each party to complete its due diligence
review, each shall furnish promptly to the other all information as such
other party may reasonably request.
6.2 Litigation Support. In the event and for so long as any party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand in connection with
(i) any transaction contemplated under this Agreement, or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or
prior to the Closing Date involving the Company, the other party will
cooperate with the party and its counsel in the contest or defense, make
available its personnel, and provide such testimony and access to its books
and records as shall be necessary in connection with the contest or defense,
all at the sole cost and expense of the contesting or defending party,
subject to the indemnification provision set forth in Article 9.
-14-
6.3 Proxy Statement. The Company, HFG and their representatives
shall, with the assistance of MTS and its representatives, prepare a proxy
statement (together with the related notice to shareholders and any annexes
and exhibits thereto, the "Proxy Statement") that will submit certain matters
to the Company's shareholders for approval in accordance with applicable law
and the Company's Plan of Reorganization (the "Plan") dated October 14, 1997,
as confirmed by order of the United States Bankruptcy Court for the Central
District of California on March 20, 1998, including: (a) this Agreement, and
(b) an amendment to the Company's Articles of Incorporation changing the
Company's name to Microwave Transmission Systems, Inc. The Proxy Statement
may also contain additional proposals regarding such other matters
appropriate for shareholder approval as may be mutually agreed upon by the
parties.
MTS shall be responsible for providing the information to HFG
required in the Proxy Statement that relates to MTS and its management,
business and financial condition. HFG and the Company shall be responsible
for providing the information required in the Proxy Statement that relates to
HFG and the management, business and financial condition of the Company.
6.4 Meeting of Shareholders. The Company shall call a special
meeting of its shareholders to be held in accordance with the laws of the
State of Texas to consider and vote upon the proposals contained in the Proxy
Statement.
6.5 Certain Information. The Company, HFG, MTS and each of their
respective representatives shall prepare and assemble certain information
regarding the Exchange, the Company and MTS necessary for the shareholders of
MTS to make an informed investment decision regarding the Exchange.
6.6 Press Releases. The Company and MTS shall consult with each
other as to the form and substance of any press release or other public
disclosure of matters related to this Agreement or any of the transactions
contemplated hereby; provided, however, that nothing herein shall be deemed
to prohibit any party hereto from making any disclosure that is required to
fulfill such party's disclosure obligations imposed by law, including,
without limitation, federal securities laws.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Each Party to Effect the Closing.
The respective obligations of each party hereto to effect the Closing shall
be subject to the fulfillment on or prior to the Closing Date of the
following conditions:
(a) The Exchange and the other proposals contained in the
Proxy Statement shall have been approved by the shareholders of the
Company in accordance with the Plan and applicable law; and
(b) No order shall have been entered and remained in effect in
any action or proceeding before any foreign, federal or state court or
governmental agency or other
-15-
foreign, federal or state regulatory or administrative agency or
commission that would prevent or make illegal the consummation of the
transactions contemplated hereby.
7.2 Additional Conditions to MTS's Obligations. The obligations of
MTS to effect the Closing are subject to the satisfaction of the following
additional conditions on or before the Closing Date:
(a) The representations and warranties set forth in Article 4
of this Agreement will be true and correct in all material respects as
of the date hereof and at and as of the Closing Date as though then
made;
(b) The Company and HFG shall have performed, in all material
respects, each obligation and agreement and complied with each covenant
to be performed and complied with by them under Articles 5 and 6 of
this Agreement prior to the Closing Date;
(c) All consents by governmental or regulatory agencies or
otherwise that are required to be obtained by the Company for the
consummation of the transactions contemplated hereby will have been
obtained;
(d) No action or proceeding before any court or governmental
body will be pending or threatened wherein a judgment, decree or order
would prevent any of the transactions contemplated hereby or cause such
transactions to be declared unlawful or rescinded;
(e) MTS and its financial and legal representatives shall have
completed a due diligence review of the available business, operations
and financial statements of the Company provided by HFG, the results of
which shall be satisfactory to MTS in its sole discretion;
(f) MTS will have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ L.L.P., counsel
to the Company, an opinion addressed to MTS, dated the Closing Date in
a form mutually satisfactory to the parties; and
(g) At the Closing, the Company shall have delivered or caused
to be delivered to MTS the following:
(i) a certificate executed on behalf of the
Company and HFG stating that the conditions
set forth in Sections 7.2(a) through (d) of
this Agreement have been satisfied;
(ii) resolutions duly adopted by the respective
Boards of Directors of the
Company and HFG authorizing and approving
the proposals
contained in the Proxy Statement, including
the Exchange and the
execution, delivery and performance of this
Agreement;
(iii) resolutions duly adopted by the shareholders
of the Company approving the proposals
contained in the Proxy Statement, including
-16-
the Exchange and the execution, delivery and
performance of this Agreement;
(iv) a certificate of good standing for the
Company from the Secretary of State of the
State of Texas, dated not earlier than five
days prior to the
Closing Date;
(v) a copy of the Articles of Incorporation of
the Company certified as of a recent date by
the Secretary of State of the State of
Texas;
(vi) an incumbency certificate of the officers
of the Company and HFG;
(vii) the written resignation of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
from his positions of officer and director
of the Company;
(viii) certificates representing the Company Shares
to be delivered pursuant to this Agreement
bearing the name of the Shareholder in the
amount set forth on Exhibit "A" hereto; and
(ix) such other documents as MTS may reasonably
request in connection with the transactions
contemplated hereby.
7.3 Additional Conditions to the Obligations of the Company and HFG.
The respective obligations of the Company and HFG to effect the Closing are
subject to the satisfaction of the following conditions on or before the
Closing Date:
(a) The representations and warranties set forth in Articles 2
and 3 of this Agreement will be true and correct in all material
respects as of the date hereof and at and as of the Closing Date as
though then made;
(b) MTS shall have performed, in all material respects, each
obligation and agreement and complied with each covenant required to be
performed and complied with by it under Article 6 of this Agreement
prior to the Closing Date;
(c) All consents by governmental or regulatory agencies or
otherwise that are required to be obtained by MTS for the consummation
of the transactions contemplated hereby will have been obtained;
(d) No action or proceeding before any court or governmental
body will be pending or threatened wherein a judgment, decree or order
would prevent any of the transactions contemplated hereby or cause such
transactions to be declared unlawful or rescinded;
(e) The Company shall have received from counsel to MTS
satisfactory to the Company, an opinion addressed to the Company and
HFG, dated the Closing Date in a form mutually satisfactory to the
parties; and
-17-
(f) On the Closing Date, MTS shall have delivered to the
Company the following:
(i) a certificate executed on behalf of MTS
stating that the conditions set forth in
Sections 7.3(a) through (d) of this
Agreement have been satisfied;
(ii) resolutions duly adopted by the Board of
Directors of MTS authorizing and approving
the Exchange and the execution, delivery and
performance of this Agreement;
(iii) a certificate of good standing for MTS from
the Secretary of State of the State of
Texas, dated not earlier than five days
prior to the Closing Date;
(iv) a copy of the Articles of Incorporation of
MTS certified as of a recent date by the
Secretary of State of the State of Texas;
(v) an incumbency certificate of the officers
of MTS;
(vi) certificate(s) representing the MTS Shares
to be delivered pursuant to this Agreement
duly endorsed or accompanied by duly
executed stock powers; and
(vii) such other documents as the Company may
reasonably request in connection with the
transactions contemplated hereby.
ARTICLE 8
TERMINATION
8.1 Termination by Mutual Consent. This Agreement may be terminated
at any time prior to the Closing by the mutual written consent of the parties
hereto.
8.2 Automatic Termination. This Agreement shall automatically
terminate if the Closing does not occur on or before 5:00 p.m., Central
Standard Time, on September 24, 1999.
8.3 Termination by Any Party. This Agreement may be terminated by
any party hereto if a United States federal or state court of competent
jurisdiction or United States federal or state governmental, regulatory or
administrative agency or commission shall have issued an order, decree or
ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement and
such order, decree, ruling or other action shall have become final and
non-appealable; provided, however, that the party seeking to terminate this
Agreement pursuant to this clause shall have used all reasonable efforts to
remove such injunction, order or decree.
-18-
8.4 Material Breach. This Agreement may be terminated by any party
if a material breach of this Agreement has been committed and such breach has
not been waived or cured by the alleged breaching party within 30 days of
receipt of written notice from a non-breaching party detailing such breach.
8.5 Effect of Termination. In the event of termination of this
Agreement pursuant to this Article 8, the rights and obligations of the
parties hereto to consummate the Exchange shall terminate. Each party's right
of termination under this Article 8 is in addition to any other rights it may
have under this Agreement or otherwise, and the exercise of such right of
termination will not be an election of remedies.
ARTICLE 9
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION
9.1 Survival. The representations and warranties of the parties
hereto contained in this Agreement or in any written statement, certificate
or other document to be delivered in connection herewith shall survive the
Closing for a period of five years, regardless of any investigation made by
or on behalf of any party.
9.2 Indemnification by HFG. Subject to the terms and conditions of
this Article 9, HFG agrees to indemnify, defend and hold the Company
subsequent to the Exchange (the "Post-Closing Company"), MTS and their
respective directors, officers, agents, attorneys and affiliates harmless
from and against all losses, claims, actions, causes of action, fines,
obligations, demands, assessments, penalties, liabilities, costs, damages,
attorneys' fees and expenses (collectively, "Damages"), asserted against or
incurred by any such persons or entities by reason of or resulting from a
breach of any representation, warranty, non-fulfillment of any agreement or
covenant of the Company or HFG contained in this Agreement or in any written
statement, certificate or other document to be delivered in connection
herewith.
9.3 Indemnification by MTS and the Post-Closing Company. Subject to
the terms and conditions of this Article 9, MTS and the Post-Closing Company
agree to indemnify, defend and hold HFG and its directors, officers, agents,
attorneys and affiliates harmless from and against all Damages asserted
against or incurred by any such persons or entities by reason of or resulting
from a breach of any representation, warranty, non-fulfillment of any
agreement or covenant of MTS contained in this Agreement or in any written
statement, certificate or other document to be delivered in connection
herewith.
9.4 Conditions of Indemnification. The obligations and liabilities
of HFG, MTS and the Post-Closing Company (the "indemnifying party") to the
others (the "party to be indemnified") under this Article 9 with respect to
claims resulting from the assertion of liability by third parties shall be
subject to the following terms and conditions:
(a) Within 20 days (or such earlier time as might be required
to avoid prejudicing the indemnifying party's position) after receipt
of notice of commencement of any action
-19-
evidenced by service of process or other legal pleading, the party to
be indemnified shall give the indemnifying party written notice thereof
together with a copy of such claim, process or other legal pleading,
and the indemnifying party shall have the right to undertake the
defense thereof by representatives of its own choosing and at its own
expense; provided that the party to be indemnified may participate in
the defense with counsel of its own choice, the fees and expenses of
which counsel shall be paid by the party to be indemnified unless (i)
the indemnifying party has agreed to pay such fees and expenses, (ii)
the indemnifying party has failed to assume the defense of such action
or (iii) the named parties to any such action (including any impleaded
parties) include both the indemnifying party and the party to be
indemnified and the party to be indemnified has been advised by counsel
that there may be one or more legal defenses available to it that are
different from or additional to those available to the indemnifying
party (in which case, if the party to be indemnified informs the
indemnifying party in writing that it elects to employ separate counsel
at the expense of the indemnifying party, the indemnifying party shall
not have the right to assume the defense of such action on behalf of
the party to be indemnified, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more
than one separate firm of attorneys at any time for the party to be
indemnified, which firm shall be designated in writing by the party to
be indemnified).
(b) In the event that the indemnifying party, by the 30th day
after receipt of notice of any such claim (or, if earlier, by the 10th
day preceding the day on which an answer or other pleading must be
served in order to prevent judgment by default in favor of the person
asserting such claim), does not elect to defend against such claim, the
party to be indemnified will (upon further notice to the indemnifying
party) have the right to undertake the defense, compromise or
settlement of such claim on behalf of and for the account and risk of
the indemnifying party and at the indemnifying party's expense, subject
to the right of the indemnifying party to assume the defense of such
claims at any time prior to settlement, compromise or final
determination thereof.
(c) Notwithstanding the foregoing, the indemnifying party
shall not settle any claim without the consent of the party to be
indemnified unless such settlement involves only the payment of money
and the claimant provides to the party to be indemnified a release from
all liability in respect of such claim. If the settlement of the claim
involves more than the payment of money, the indemnifying party shall
not settle the claim without the prior consent of the party to be
indemnified.
(d) The party to be indemnified and the indemnifying party
will each cooperate with all reasonable requests of the other.
9.5 Remedies Not Exclusive. The remedies provided in this Article 9
shall not be exclusive of any other rights or remedies available to one party
against the other, either at law or in equity.
-20-
ARTICLE 10
GENERAL PROVISIONS
10.1 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered
personally, sent by overnight courier or mailed by registered or certified
mail (postage prepaid and return receipt requested) to the party to whom the
same is so delivered, sent or mailed at the following addresses (or at such
other address for a party as shall be specified by like notice):
To HFG or the Company prior to the Exchange:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Halter Financial Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
To MTS or the Company after the Exchange:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
10.2 Interpretation. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer
to sections and articles of this Agreement unless otherwise stated.
10.3 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated and the parties shall
negotiate in good faith to modify this Agreement to preserve each party's
anticipated benefits under this Agreement.
10.4 Miscellaneous. This Agreement (together with all other
documents and instruments referred to herein): (a) constitutes the entire
agreement and supersedes all other prior agreements and undertakings, both
written and oral, among the parties with respect to the subject matter
hereof; (b) except as expressly set forth herein, is not intended to confer
upon any other person any rights or remedies hereunder and (c) shall not be
assigned by operation of law or otherwise, except as may be mutually agreed
upon by the parties hereto.
10.5 Separate Counsel. Each party hereby expressly acknowledges that
it has been advised and urged to seek its own separate legal counsel for
advice with respect to this Agreement.
10.6 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Texas.
10.7 Counterparts. This Agreement may be executed in two or more
counterparts, which together shall constitute a single agreement.
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10.8 Amendment. This Agreement may be amended, modified or
supplemented only by an instrument in writing executed by all parties hereto.
10.9 Parties In Interest: No Third Party Beneficiaries. Except as
otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto. This Agreement
shall not be deemed to confer upon any person not a party hereto any rights
or remedies hereunder.
10.10 Waiver. No waiver by any party of any default or breach by
another party of any representation, warranty, covenant or condition
contained in this Agreement shall be deemed to be a waiver of any subsequent
default or breach by such party of the same or any other representation,
warranty, covenant or condition. No act, delay, omission or course of dealing
on the part of any party in exercising any right, power or remedy under this
Agreement or at law or in equity shall operate as a waiver thereof or
otherwise prejudice any of such party's rights, powers and remedies. All
remedies, whether at law or in equity, shall be cumulative and the election
of any one or more shall not constitute a waiver of the right to pursue other
available remedies.
10.11 Expenses. Except as may be otherwise provided in the
Consulting Agreement the parties hereto shall pay all of their own expenses
relating to the transactions contemplated by this Agreement, including,
without limitation, the fees and expenses of their respective counsel and
financial advisers.
10.12 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
10.13 Arbitration of Disputes. In the event that a dispute arises
between the parties, said dispute arising out of, in connection with or as a
result of the Agreement entered into between the parties, the parties agree
that said dispute shall be resolved through binding arbitration rather than
litigation. Both parties hereby agree to submit the dispute for resolution,
under the rules then obtaining, to either the American Arbitration
Association, or the National Association of Securities Dealers, Inc., within
five (5) days after receiving a written request to do so from either party.
The determination of the arbitrators shall be final and binding upon both
parties and may be enforced in any court of competent jurisdiction.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
RBS ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
HALTER FINANCIAL GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
MICROWAVE TRANSMISSION SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Executive
Officer
THE SHAREHOLDER:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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EXHIBIT "A"
Number of MTS Number of Company
SHAREHOLDER SHARES OWNED SHARES TO BE ISSUED
-------------------------------- ----------------------------------- -----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1,000 5,750,000
----- ---------
TOTAL 1,000 5,750,000
===== =========
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SCHEDULE 4.17
Agreement dated April 12, 1999,
between RBS Acquisition Corp. and
Securities Transfer Corporation
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