________________________________________________________________
AMENDED AND RESTATED
SALE OF ASSETS
AND
TRADEMARK AGREEMENT
by and among
INTEK DIVERSIFIED CORPORATION,
XXXXXXXX CAPITAL LIMITED
and
MIDLAND INTERNATIONAL CORPORATION
______________________________________________________________
AMENDED AND RESTATED
SALE OF ASSETS AND TRADEMARK AGREEMENT
THIS AMENDED AND RESTATED SALE OF ASSETS AND TRADEMARK
AGREEMENT dated as of September 19, 1996 (this "Agreement")
and effective as of June 18, 1996 is made and entered into by
and among Intek Diversified Corporation, a Delaware
corporation ("Intek"), Xxxxxxxx Capital Limited, an Ontario
corporation ("Xxxxxxxx"), and Midland International
Corporation, a Delaware corporation and indirect wholly owned
subsidiary of Xxxxxxxx ("MIC"), and amends and restates in
full that certain Sale of Assets and Trademark License
Agreement (the "Original Agreement") dated as of June 18, 1996
among Intek, MIC and Xxxxxxxx.
RECITALS
A. MIC is in the business of developing, distributing
and reselling LMR Products (as defined in Section 1.37 of this
Agreement) under the U.S. Trademarks (as defined in Section
1.73 of this Agreement) and is the owner of the U.S.
Trademarks.
B. Intek, through its subsidiaries, is in the business
of developing, constructing and managing specialized mobile
radio ("SMR") networks in the United States utilizing licenses
granted by the Federal Communications Commission ("FCC") for
the 220 to 222 megahertz narrow band spectrum.
C. Pursuant to the terms of the Original Agreement, MIC
agreed to grant to Intek a license to sell LMR Products under
the U.S. Trademarks in the U.S. and to sell certain other
assets of MIC to Intek, and Intek agreed to acquire such
license and assets.
D. Intek and Securicor Communications Limited., an
England and Wales corporation ("Securicor"), entered into a
Stock Purchase Agreement (the "Securicor Agreement") dated
June 18, 1996, as amended September 20, 1996, pursuant to
which Securicor agreed to sell all of the outstanding
securities (other than certain preferred shares) of
Securicor's wholly-owned subsidiary, Securicor Radiocoms
Limited, to Intek in consideration for 25,000,000 shares of
common stock, par value $0.01 per share of Intek (the
"Securicor Transaction").
E. The transactions contemplated in the Securicor
Agreement and the Original Agreement were originally scheduled
to close simultaneously.
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F. Intek, MIC and Xxxxxxxx desire to amend the Original
Agreement to provide for, among other things, (i) the closing
of the transactions contemplated in the Original Agreement, as
herein amended, simultaneously with the execution and delivery
of this Agreement or as soon thereafter as is practicable,
(ii) an outright assignment by MIC of the U.S. Trademarks to
MUSA, as Intek's assignee, with a license back of the U.S.
Trademarks to MIC for certain uses, (iii) the sale of certain
additional inventory and fixed assets to Intek and the
assumption by Intek of certain liabilities of MIC, and (iv) a
revision to the purchase price in the event that the Securicor
Transaction is not consummated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the Recitals and the
mutual covenants hereinafter set forth, and for other good and
valuable consideration, the parties agree as follows:
1. DEFINITIONS
1.1 "Acquired Assets" shall have the meaning set forth
in Section 2.1.
1.2 "Additional Purchase Shares" shall mean the shares
of Common Stock to be issued to MIC pursuant to the
terms of Section 3.1(b)(2)(A) of this Agreement upon
consummation of the Securicor Transaction.
1.3 "Affiliate" means, with respect to any Person, any
other Person that controls such Person, or is
controlled by or under common control with such
Person. With respect to Intek, the term "Affiliate"
shall not include Securicor Group plc, Securicor,
MIC, Xxxxxxxx nor their respective subsidiaries.
1.4 "Assumed Liabilities" shall have the meaning set
forth in Section 2.3(a).
1.5 "Bankruptcy Exception" shall have the meaning set
forth in Section 6.1(a).
1.6 "Beneficiary" shall have the meaning set forth in
Section 11.3(a).
1.7 "Business Day" shall mean any day of the year on
which national banking institutions in New York are
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open to the public for conducting business and are
not required or authorized to close.
1.8 "Claimant" shall have the meaning set forth in
Section 11.3(f).
1.9 "Closing" shall have the meaning set forth in
Section 4.1.
1.10 "Code" shall mean the Internal Revenue Code of 1986,
as amended, in effect as of the date of this
Agreement.
1.11 "Collateral" shall have the meaning set forth in the
Securicor Loan Agreement.
1.12 "Common Stock" shall mean the common stock, par
value $0.01 per share, of Intek.
1.13 "Computer Services Agreement" shall mean the
agreement providing for MUSA to acquire certain
computer services from Xxxxxxxx pursuant to the
Computer Services Agreement hereto as EXHIBIT A.
1.14 "Contracts" shall have the meaning set forth in
Section 2.1(c).
1.15 "Damages" shall have the meaning set forth in
Section 11.1.
1.16 "Direct Claim" shall have the meaning set forth in
Section 11.3(f).
1.17 "Direct Claim Notice" shall have the meaning set
forth in Section 11.3(f).
1.18 "Dollar" shall mean United States Dollar.
1.19 "Effective Date" shall mean August 1, 1996.
1.20 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.21 "Escrow Agent" shall mean American Stock Transfer &
Trust Company, a New York corporation, and its
successors as escrow agent pursuant to the terms of
the Escrow Agreement.
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1.22 "Escrow Agreement" shall mean the Escrow Agreement
entered into among MIC, Intek and Escrow Agent, in
substantially the form attached hereto as EXHIBIT B.
1.23 "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
1.24 "FCC" shall have the meaning set forth in Recital B.
1.25 "Governmental Entity" shall have the meaning set
forth in Section 6.1(d).
1.26 "Xxxx-Xxxxx-Xxxxxx Act" shall mean the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as
amended.
1.27 "Indemnitor" shall have the meaning set forth in
Section 11.3(a).
1.28 "Intek Assignment and Assumption Agreement" shall
mean the Assignment and Assumption Agreement entered
into between Intek and MUSA as of the Closing and in
the form attached hereto as EXHIBIT C.
1.29 "Intek Disclosure Schedules" shall mean the
disclosure schedules prepared by Intek and delivered
to MIC and Xxxxxxxx simultaneously with the
execution and delivery of this Agreement.
1.30 "Intek Documents" shall have the meaning set forth
in Section 6.2(a).
1.31 "Intek Representative" shall mean the Chairman of
Intek or such officer of Intek as the Chairman shall
designate in writing.
1.32 "Intek Officer's Certificate" shall have the meaning
set forth in Section 5.2(b).
1.33 "Intek Stockholders' Meeting" shall have the meaning
set forth in Section 9.6.
1.34 "Intek Subsidiaries" shall have the meaning set
forth in Section 6.2(d).
1.35 "IRS" shall mean the Internal Revenue Service.
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1.36 "Legal Proceeding" shall have the meaning set forth
in Section 6.1(i).
1.37 "LMR Products" means any existing and future land
mobile radio products for use in the professional
and/or commercial markets, including, without
limitation, antennas which are usable with both
Midland Consumer Products and LMR Products;
PROVIDED, HOWEVER, that notwithstanding Section 13
of this Agreement or any other provision contained
herein to the contrary, such antennas may be
manufactured, promoted, sold and/or distributed in
the U.S. by both MIC and Intek, and their respective
Affiliates. The term "LMR Products" is not intended
to include and shall not include (a) Midland
Consumer Products, or (b) the Midland 70-1336, 70-
1526, 70-9020 and 70-9405 products, or (c) and any
subsequent upgrades, enhancements, modifications or
improvements of the products described in Sections
1.37 (a) and 1.37 (b) above.
1.38 "Material Adverse Change" or "Material Adverse
Effect" means an event or circumstance which
materially adversely affects the business,
properties, financial condition or operations (taken
as a whole) of the U.S. LMR Distribution Business,
in the case of MIC, or of Intek and its subsidiaries
(taken as a whole), in the case of Intek.
1.39 "MIC Disclosure Schedules" shall mean the disclosure
schedules prepared by MIC and delivered to Intek
simultaneously with the execution and delivery of
this Agreement.
1.40 "MIC Documents" shall have the meaning set forth in
Section 6.1(a).
1.41 "MIC Materials" shall have the meaning set forth in
Section 8.1(a).
1.42 "MIC Representative" shall mean the Chief Executive
Officer of MIC or such officer of MIC as the Chief
Executive Officer shall designate in writing.
1.43 "MIC/Xxxxxxxx Officers' Certificates" shall have the
meaning set forth in Section 5.1(a).
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1.44 "Midland Consumer Products" means consumer wireless
products and consumer electronic products consisting
of consumer communications equipment, consumer
automotive equipment, consumer marine equipment,
consumer amateur radio products and consumer audio
products and/or video home entertainment equipment,
which are being sold at any time in department
stores and/or in electronic specialty stores,
including, but not limited to, citizen band radios,
GMRS radios, marine radios, scanners, intercoms,
radio recorders, car radios, itinerant radios,
consumer GPS marine products, satellite receivers,
video cassette recorders, video cameras,
stereophonic and high fidelity components and/or
systems, compact disc players, laser disc players,
cordless telephones, consumer paging products,
telephones with video, and other telephones and
antennas and other accessories for the foregoing.
"Midland Consumer Products" specifically does not
include cellular telephones, personal communications
systems (PCS) telephones, commercial and two-way
paging products, commercial wireless satellite
antennas, LMR antenna products, all other electronic
or communications equipment for use in the
professional and commercial market, and antennas and
other accessories for the foregoing.
1.45 "MUSA" shall mean Midland USA , Inc., a Delaware
corporation and wholly owned subsidiary of Intek.
1.46 "Net Operating Losses" shall mean the loss, if any,
incurred by MUSA in the operation of the U.S. LMR
Distribution Business between August 1, 1996 and the
date of the closing of the Securicor Transaction,
calculated by subtracting the following amounts from
the aggregate net revenue of the U.S. LMR
Distribution Business during such period:
(a) costs of all goods and services sold in the
U.S. LMR Distribution Business in generating
such net revenue;
(b) employment costs, lease and operation expenses
of facilities, sales and marketing expenses,
general and administrative expenses, service
agreements, depreciation and amortization (but
expressly excluding any amortization of the
purchase price, the Trademarks or the goodwill
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of MIC acquired pursuant to this Agreement)
incurred in the operations of the U.S. LMR
Distribution Business; and
(c) interest expense and Taxes incurred by MUSA
directly related to the conduct of the U.S. LMR
Distribution Business.
1.47 "Obligations" shall have the meaning set forth in
the Securicor Loan Agreement.
1.48 "Option" shall have the meaning set forth in Section
10.1.
1.49 "Option Exercise Date" shall mean the date thirty
(30) days following the Securicor Transaction
Termination Date.
1.50 "Original Agreement" shall have the meaning set
forth in the preface to this Agreement.
1.51 "Performance Guarantees" shall have the meaning set
forth in Section 8.2.
1.52 "Person" means an individual, partnership (general
or limited), corporation, association or other form
of business organization (whether or not regarded as
a legal entity under applicable law), trust, estate
or any other entity.
1.53 "Prepaid Expenses" shall have the meaning set forth
in Section 2.1(j) of this Agreement.
1.54 "Product Purchasing Services Agreement" shall mean
the Product Purchasing Agreement to be entered into
between MIC and Intek in the form attached hereto as
EXHIBIT D
1.55 "Proxy Statement" shall have the meaning set forth
in Section 9.6.
1.56 "Registration Rights Agreement" means the
registration rights agreement to be entered into as
of the closing of the Securicor Transaction by and
among Intek, Roamer One, Inc., Securicor
Communications Limited, Securicor International
Limited, Xxxxxxxx, MIC, Anglo York Industries, Inc.,
Xxxx & Xxxx, XX Limited, Octagon Investments
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Limited, Xxxxxx Xxxxxxxx and certain other holders
of the Common Stock of Intek, and in the form
attached hereto as EXHIBIT E.
1.57 "Responsible Party" shall have the meaning set forth
in Section 11.3(d).
1.58 "Securicor Agreement" shall have the meaning set
forth in Recital D.
1.59 "Securicor Loan Agreement" means the $15,000,000
Loan Agreement dated as of September 19, 1996
between MUSA, as Borrower, and Securicor
Communications Limited, as Lender.
1.60 "Securicor Transaction Termination Date" shall mean
the effective date of any termination of the
Securicor Agreement by Intek or Securicor pursuant
to the terms of the Securicor Agreement as in effect
on the date hereof.
1.61 "Securicor Transaction" shall have the meaning set
forth in Recital D.
1.62 "Securities Act" shall mean the Securities Act of
1933, as amended.
1.63 "SMR" shall have the meaning set forth in Recital B.
1.64 "Subsidiary" means any Person fifty percent (50%) or
more of whose issued and outstanding voting
securities is owned or controlled, directly or
indirectly, by the specified Person.
1.65 "Taxes" means all federal, state, local or foreign
taxes, imposts, levies, or other assessments,
including, without limitation, gross receipts,
franchise, income, profits, license, payroll,
employment, excise, severance, stamp, occupation,
premium, windfall profit, environmental, customs
duties, capital, withholding, payroll, social
security, unemployment, disability, real property,
personal property, inventory, sales, use, transfer,
registration, gains, value added, alternative or
add-on minimum, estimated, or other tax of any kind
or nature whatsoever, including any interest,
penalty or addition thereto and any transferee or
successor liability therefor (by contract or
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otherwise), whether imposed singly or on a
consolidated, combined or unitary basis, and whether
disputed or not.
1.66 "Third Party Claim" shall have the meaning set forth
in Section 11.3(a).
1.67 "Third Party Claim Notice" shall have the meaning
set forth in Section 11.3(a).
1.68 "To the Knowledge of the Executive Officers of
Intek" means what the corporate officers of Intek
and the Intek Subsidiaries, all as listed on
Schedule 1.68 of the Intek Disclosure Schedules,
actually know or would know after reasonable
investigation, in light of their positions and
responsibilities with Intek.
1.69 "To the Knowledge of the Executive Officers of MIC"
means to what the corporate officers of MIC listed
on Schedule 1.69 of the MIC Disclosure Schedules,
actually know or would know after reasonable
investigation, in light of their positions and
responsibilities with MIC.
1.70 "Transferred Employees" means those employees of MIC
listed on Schedule 8.4(a) that accept Intek's offer
of employment pursuant to Section 8.4(a).
1.71 "U.S." means the United States and its territories
and possessions
1.72 "U.S. LMR Distribution Business" means the sale and
distribution of LMR Products bearing the U.S.
Trademarks within the U.S., as presently conducted
by MIC.
1.73 "U.S. Trademarks" shall mean the trademarks
described on Schedule 1.73 of the MIC Disclosure
Schedules and the trade name "Midland" in the U.S.
and similar variations thereof, and all
registrations, applications and renewals thereof,
and all logos, whether or not registered, used in
connection therewith.
1.74 "U.S. Trademarks License" shall mean the license to
use the U.S. Trademarks granted by MUSA to MIC
9
pursuant to the terms of the U.S. Trademarks License
Agreement.
1.75 "U.S. Trademarks License Agreement" shall mean the
U.S. Trademarks License Agreement attached hereto as
EXHIBIT F.
2. SALE OF ASSETS AND U.S. TRADEMARKS
2.1 SALE OF ASSETS AND U.S. TRADEMARKS. Simultaneously
with the execution and delivery of this Agreement by
the parties hereto and on the terms and subject to
the conditions of this Agreement, but effective as
of the Effective Date, MIC hereby grants, sells and
assigns to Intek, the following rights, assets and
interests of MIC related to the conduct of the U.S.
LMR Distribution Business (collectively the
"Acquired Assets") and conveys to MUSA the Acquired
Assets as Intek shall direct, subject to MUSA and
Intek's entering into the Intek Assignment and
Assumption Agreement:
(a) The U.S. Trademarks and the goodwill of the
business associated with U.S. Trademarks;
(b) All accounts receivable arising on or after the
Effective Date in the conduct of the U.S. LMR
Distribution Business; provided, however, that
any such accounts receivable which have been
collected by MIC prior to the date of the
Closing shall not be Acquired Assets hereunder
but shall be set off against Intek's obligation
to reimburse MIC for certain costs, all as set
forth in Section 3.3(a) of this Agreement.
(c) Subject to Sections 2.2 and 2.3, an assignment
of all of MIC's right, title and interest in or
to all of MIC's:
(1) written or oral supply agreements under
which MIC is the purchaser;
(2) quotations;
(3) dealer and distributor relationships;
(4) customer supply and support obligations;
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(5) backlog orders; and
(6) other contracts, agreements, commitments
or undertakings, including, without
limitation, the purchase orders set forth
on Schedule 2.3(a)(8) to this Agreement
but excluding the Performance Guarantees;
which are listed on Schedule 2.1(c)
(collectively, the "Contracts") which Contracts
constitute all of the material contracts of any
nature (other than the Performance Guarantees
or contracts relating to the use and
acquisition of tooling) entered into by MIC
which relate principally to the U.S. LMR
Distribution Business or which are assets
necessary for the conduct of the U.S. LMR
Distribution Business. To the extent that MIC
can provide Intek with the benefits of
nonassignable items pursuant to the third
sentence of Section 2.2 of this Agreement, such
benefits shall also constitute "Acquired
Assets."
(d) To the extent such information relates to the
U.S. LMR Distribution Business, all customer
lists, the sales history, warranty claims
records, manuals, non-proprietary books and
records, and credit information with respect to
customers of the U.S. LMR Distribution Business
(collectively, the "Records").
(e) Certain other inventory, fixed assets, rights
and property related to the U.S. LMR
Distribution Business as listed on Schedule
2.1(e).
(f) All of MIC's right, title and interest in and
to the invention described in U.S. Patent
#4,718,586 (Swivel Fastening Device) which
patent has expired for nonpayment of
maintenance fees.
(g) All of MIC's leasehold and other interests in
the real property leases listed on Schedule
2.1(g), including, without limitation, any
easements and rights-of-way and any prepaid
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rent, security deposits and options to renew or
purchase under any such leases.
(h) All U.S. telephone numbers used by MIC for the
U.S. LMR Distribution Business and keys for all
Acquired Assets where such exist.
(i) All of MIC's rights under or pursuant to all
warranties, representations, indemnities and
guarantees made by suppliers, manufacturers and
contractors in connection with the Acquired
Assets listed in Sections 2.1(c) and 2.1(e).
(j) All deferred and prepaid charges, sums, and
fees of MIC which relate solely to the Acquired
Assets and/or the operation of the U.S. LMR
Distribution Business as set forth on Schedule
2.1(j) ("Prepaid Expenses").
(k) All permits or authorizations issued by
Governmental Entities held or used by MIC
solely in connection with the operation of the
U.S. LMR Distribution Business (to the extent
transfer thereof is permitted by applicable
law), including without limitation all FCC
Title III radio licenses (the "FCC Licenses")
and grantee codes, type acceptances,
certifications or other equipment
authorizations (the "Equipment Authorizations")
used by MIC exclusively in connection with the
U.S. LMR Distribution Business.
(l) As of October 16, 1996, all of MIC's right,
title and interest in and to the P. O. Boxes
and the Distribution Account (as such terms are
defined in Section 3.4(e) of this Agreement).
2.2 ASSIGNABILITY AND CONSENTS. Notwithstanding
anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to
assign any order, contract, agreement, lease,
commitment, license, franchise, authorization or
concession, to the extent that an attempted
assignment thereof, without the consent of another
party thereto or of a Governmental Entity would
constitute a breach of any such order, contract,
agreement, lease, commitment, license, franchise,
authorization or concession. MIC shall use its
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reasonable efforts, and Intek shall cooperate in all
reasonable respects with MIC, to obtain consent to
any such assignment or a novation of such contract
substituting Intek or MUSA for MIC. For any item
for which such consent or novation is not obtained,
MIC shall, for a period commencing on the Effective
Date and ending upon expiration of the current term
of such nonassignable item (without giving effect to
any extension thereof, whether automatic or
otherwise) or, if no expiration date is stated
therein, thirteen months after the Effective Date,
provide to Intek the benefit of any such
nonassignable item, and MIC shall pay to Intek all
monies or other property received by MIC under any
such nonassignable item within five (5) business
days of MIC's receipt thereof, provided that Intek
makes all payments required to be made by MIC
pursuant to the terms of such nonassignable items
and that Intek performs or obtains performance of
all obligations required of MIC under such
nonassignable items, in advance of or at such time
as such payment or performance is required. At the
end of period described in the immediately preceding
sentence, MIC shall have no further duties or
obligations hereunder with respect to such
nonassignable items and the failure to obtain any
necessary consent or waiver with respect thereto
shall not be a breach of any provision of this
Agreement. In the event that Intek or MUSA performs
its obligations under a nonassignable item, Intek's
may bring such action on behalf of MIC and in MIC's
name as shall be reasonably necessary to enforce
MIC's or Intek's rights under such nonassignable
item; PROVIDED, HOWEVER, that Intek shall bear all
costs and expenses of any kind whatsoever incurred
by MIC in connection with any such actions and
PROVIDED FURTHER that, notwithstanding anything to
the contrary contained herein, Intek shall indemnify
and hold MIC harmless from and against any and all
Damages incurred by MIC directly or indirectly in
connection with such actions.
2.3 ASSUMED LIABILITIES. Simultaneously with the
execution and delivery of this Agreement by the
parties hereto, and on the terms and subject to the
conditions of this Agreement, Intek hereby assumes,
and agrees to pay, perform and discharge, and
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promptly reimburse MIC for any payments made by MIC
with respect to, the Assumed Liabilities.
(a) The "Assumed Liabilities" shall include only
the following liabilities and obligations of
MIC, whether primary or secondary, direct or
indirect, absolute or contingent:
(1) except as set forth under Section
2.3(a)(3) below, all liabilities or
obligations arising on or after the
Effective Date under or with respect to
any of the Acquired Assets or in
connection with the operation of the U.S.
LMR Distribution Business, including,
without limitation, all of MIC's
liabilities arising after the Effective
Date under the Contracts, but excluding
(A) any liabilities or obligations with
respect to antennas sold by MIC in
connection with products other than LMR
Products and (B) any liabilities and
obligations of MIC for Taxes for taxable
periods ended on or before the Effective
Date, and (but only to the extent
attributable to the period ending at the
close of business on the Effective Date)
for taxable periods including the
Effective Date;
(2) all liabilities or obligations arising or
existing under any unfilled customer
orders included in the Acquired Assets;
(3) all liabilities and obligations with
respect to the Transferred Employees
incurred or accrued after the Effective
Date and the liabilities and obligations
with respect to vacation pay and sick
leave for Transferred Employees accrued as
of the Effective Date with respect to
periods prior to the Effective Date (as
set forth on Schedule 2.3(a)(3). Except
as set forth in the immediately preceding
sentence, Intek shall not assume any
obligations or liabilities of MIC or
Xxxxxxxx with respect to any Transferred
Employee or any other employee or former
employee of MIC or employee benefit plan
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maintained by MIC, including, but not
limited to, any liabilities or obligations
with respect to (A) any employee benefit
plan under ERISA or the Code (other than
with respect to claims incurred after the
Effective Date with respect to the health
and life insurance plans assumed by Intek
under the provisions of Section 7.3(a)),
(B) continuation requirements of Section
4980B of the Code and Part 6 of Title I of
ERISA in respect of any MIC employee who
does not become a Transferred Employee;
(C) any severance plan, program, agreement
or arrangement or any other obligations
relating to the termination of employment
with MIC of any Transferred Employee or
other employee of MIC (whether or not
arising by reason of the transaction
contemplated by this Agreement); (D) any
deferred compensation plan, program,
agreement, arrangement or the like
operated by Xxxxxxxx, MIC or any
subsidiary of parent thereof in respect to
any Transferred Employee attributable to
such employee's employment with MIC on or
prior to the Effective Date and with
respect to any other employee or former
employee of MIC whether attributable to
such employment before or after the
Effective Date; (E) any obligation or
liability with respect to workers'
compensation in respect of any Transferred
Employee attributable to such employee's
employment with MIC on or prior to the
Effective Date and with respect to any
other employee or former employee of MIC
whether attributable to such employment
before or after the Effective Date; and
(F) any obligation or liability with
respect to an inactive employee listed on
Schedule 7.3(a) prior to the date such
employee accepts employment with Intek in
accordance with the provisions of Section
7.3(a);
(4) all liabilities and obligations (including
fines and penalties) for death, personal
injury, other injury to persons, property
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damage or losses or deprivation of rights
(A) resulting from, directly or
indirectly, use or exposure to any LMR
Products sold in the U.S. or (B) resulting
from directly or indirectly, any tort,
breach of contract or warranty, violation
of any statute, ordinance, regulation or
other governmental requirement in
connection with the Acquired Assets or the
conduct of the U.S. LMR Distribution
Business (but excluding any such
liabilities or obligations with respect to
which, before the date of the Closing, (x)
MIC has received a written notice of a
claim, or (y) to the Knowledge of the
Executive Officers of MIC, a claim has
been asserted);
(5) all liabilities and obligations for breach
of product warranties for LMR Products
distributed by MIC in the conduct of the
U.S. LMR Distribution Business;
(6) all liabilities and obligations of MIC or
any Affiliate of MIC arising after the
date of the Closing under the U.S.
Trademarks licenses and sublicenses listed
on Schedule 1.73 of this Agreement;
(7) all accounts payable arising on or after
the Effective Date in connection with the
operation of the U.S. LMR Distribution
Business;
(8) all of MIC's liabilities and obligations
existing as of August 1, 1996 or arising
thereafter with respect to any inventory
ordered by MIC in connection with the U.S.
LMR Distribution Business, including,
without limitation, MIC's obligation to
repay Intek the sum of $1,291,051 advanced
by Intek against Intek's purchase of the
equipment listed on the purchase orders
set forth on Schedule 2.3(a)(8);
(9) all obligations arising after the
Effective Date in connection with the U.S.
LMR Distribution Business, including
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payroll, utilities, and Taxes, but
excluding income, franchise or gains taxes
incurred by MIC or Xxxxxxxx in connection
with the transactions contemplated hereby;
and
(10) all of MIC's liabilities and obligations
existing as of August 1, 1996 or arising
thereafter in connection with MIC's dealer
advertising allowance program as set forth
on Schedule 2.3(a)(10).
3. CONSIDERATION
3.1 PURCHASE PRICE.
(a) PAYMENT. In consideration of MIC's sale of the
Acquired Assets to Intek, at the Closing Intek
shall
(1) issue to MIC certificate(s) evidencing
150,000 fully paid, nonassessable shares
of Common Stock free and clear of all
liens and encumbrances; and
(2) issue and deliver to the Escrow Agent, as
escrow agent, certificate(s) evidencing
2,350,000 shares of Common Stock, pursuant
to the terms of the Escrow Agreement; and
(3) assume the Assumed Liabilities as provided
in Section 2.3 of this Agreement; and
(4) pay cash to MIC in the amount of
$2,301,280 and forgive MIC's obligation to
provide Intek with inventory under certain
purchase orders prepaid by Intek in the
amount of $492,471 in full consideration
for the fixed assets and inventory listed
on Schedule 2.1(e) to this Agreement and
the Prepaid Expenses; and
(5) pay cash to MIC in the amount of $323,495
which amount is the estimated amount of
post-Effective Date operating expenses of
the U.S. LMR Distribution Business from
August 1, 1996 through the date of the
17
Closing, to be reimbursed to MIC as
provided in Section 3.3;
(6) pay cash to MIC in the amount of $300,000
(which amount is to reimburse MIC for
$200,000 advanced by MIC after August 1,
1996 against purchase orders being
acquired by Intek pursuant to the terms of
this Agreement, and $100,000, which amount
represents the parties best estimate as of
closing of the portion of the Hitachi
Credit allocable to MIC pursuant to
Section 3.5).
(b) ADJUSTMENTS TO THE PURCHASE PRICE.
(1) ADJUSTMENTS FOR CUSTOMER DEPOSITS AT
CLOSING. At the Closing, the Purchase
Price shall be reduced by the amount of
any customer deposits for services and
equipment not performed prior to the
Effective Date by MIC to the extent that
Intek, or its assigns, assume the
obligations directly related to such
customer deposits. This Purchase Price
adjustment shall be effected by MIC's
delivery, or release from consignment, to
Intek of inventory appropriate for
application to such customer obligations
and having an aggregate value (as
determined pursuant to the Consignment
Agreement) equal to the aggregate amount
of all such customer deposits.
(2) POST CLOSING ADJUSTMENT TO PURCHASE
PRICE/CONSUMMATION OF SECURICOR
TRANSACTION. If the transactions
contemplated in the Securicor Agreement
are consummated, or, if the Securicor
Agreement is terminated by either party in
accordance with its terms and within six
months after such termination (the
"Standstill Period"), Securicor and Intek,
or their respective Affiliates, engage in,
or enter into agreements to engage in, one
or more transactions which collectively
would effectively transfer a controlling
interest in Intek to Securicor or any
18
Affiliate of Securicor, then the Purchase
Price shall be adjusted as follows:
(A) The Purchase Price shall be increased
by 2,350,000 shares of Common Stock,
payable to MIC immediately upon
closing of such transactions out of
the shares of Common Stock deposited
by Intek into escrow pursuant to
Section 3.1(a)(2) of this Agreement;
and
(B) The Purchase Price shall be reduced
by the Net Operating Losses, if any,
of the U.S. LMR Distribution Business
as conducted by Intek or its assignee
for the period commencing on August
1, 1996 and ending on the date on
which the transactions contemplated
in the Securicor Agreement are
consummated; PROVIDED HOWEVER, that
such adjustment shall not exceed
$833,125 and PROVIDED FURTHER that
such adjustment shall be effectuated
solely by MIC's return to Intek of
such number of shares of Common Stock
as shall be equal to the lesser of
(X) the quotient of Net Operating
Losses divided by $5.375 and (Y)
155,000 Common Shares.
(C) In addition to the foregoing, upon
consummation of the Securicor
Transaction, Intek shall cause to be
executed and delivered to MIC and
Xxxxxxxx the Registration Rights
Agreement, duly executed and
delivered by each party thereto other
than MIC and Xxxxxxxx.
3.2 TRANSFER TAXES. Intek shall pay the cost of all
Taxes and expenses, if any, and all other charges of
any Governmental Entity applicable to the
transactions contemplated by this Agreement, other
than income, franchise or gains taxes incurred by
MIC or Xxxxxxxx in connection with the transactions
contemplated hereby.
19
3.3 REIMBURSEMENT OF OPERATING EXPENSES PAID AFTER THE
EFFECTIVE DATE. Intek shall reimburse MIC for all
expenses and costs paid by MIC in the conduct of the
U.S. LMR Distribution Business during the period
commencing on the Effective Date and continuing
through the Closing as follows:
(a) At the Closing Intek shall pay cash to MIC in
an amount equal to $323,495 which amount the
parties agree represents is their best estimate
of the amounts actually paid by MIC in the
conduct of the U.S. LMR Distribution Business
during the period commencing on the Effective
Date and ending on the date of the Closing, as
more fully described on Schedule 3.3 to this
Agreement (the "Reimbursement Schedule") after
deducting all cash collected by MIC prior to
the date of the Closing with respect to
accounts receivable generated on or after
August 1, 1996 out of the operations of the
U.S. LMR Distribution Business.
(b) Within thirty (30) days after the Closing MIC
shall deliver to Intek a revised Reimbursement
Schedule setting forth such amounts as shall
have actually been paid by MIC in the conduct
of the U.S. LMR Distribution Business for the
period commencing on August 1, 1996 and ending
on the date of the Closing together with such
supporting documentation as Intek shall
reasonably request and, if the amount set forth
on the revised Reimbursement Schedule is less
than $323,495, cash in an amount equal to the
difference. The revised Reimbursement Schedule
shall be deemed to be true and correct for the
purpose of determining the amount payable to
MIC by Intek under this Section 3.3(b) to the
extent that Intek does not provide specific
written objections within ten (10) business
days after Intek's receipt of the revised
Reimbursement Schedule.
(c) Within ten (10) business days after Intek's
receipt of the revised Reimbursement Schedule,
Intek shall pay cash to MIC equal to the amount
of expenses set forth on the revised
Reimbursement Schedule to the extent such
expenses exceed $323,495, to the extent that
20
Intek has not provided specific written
objections as set forth above.
(d) The MIC Representative and Intek Representative
shall meet within five business days of either
party's request therefore and use their
reasonable best efforts to amicably resolve any
disputes raised by Intek or MIC with respect to
amounts to be reimbursed under the revised
Reimbursement Schedule. Intek, or MIC, as the
case may be, shall immediately pay any amount
determined to be owing to the other as mutually
agreed upon by the MIC Representative and the
Intek Representative. In the event that the
MIC Representative and the Intek Representative
are unable to reach an agreement with respect
to any such dispute, then the matter shall be
submitted to binding arbitration in accordance
with the provisions of Section 14.13 of this
Agreement.
3.4 COLLECTIONS OF ACCOUNTS RECEIVABLE.
(a) If all or part of any payment received by Intek
or any Affiliate of Intek relates exclusively
to an account receivable arising prior to the
Effective Date, such payment shall be held in
trust for MIC and shall not be commingled with
any other assets of Intek or such Affiliate.
Intek shall immediately deliver to MIC, or
cause its Affiliate to immediately deliver to
MIC, such payment in the form received together
with such endorsements as shall be necessary
for MIC to deposit and collect such payment.
(b) If all or part of any payment received by MIC,
Xxxxxxxx or any Affiliate thereof relates
exclusively to an account receivable arising
after the Effective Date, such payment shall be
held in trust for Intek and shall not be
commingled with any other assets of MIC,
Xxxxxxxx or such Affiliate. MIC and Xxxxxxxx
shall immediately deliver to Intek, or cause
its Affiliate to immediately deliver to Intek,
such payment in the form received together with
such endorsements as shall be necessary for
Intek to deposit and collect such payment.
21
(c) If a payment is received which relates to
accounts receivables arising both before and
after the Effective Date, the recipient thereof
shall immediately pay to the other party cash
in an amount equal to that portion of the
payment which is specifically identified to a
receivable or receivables owned by such other
party.
(d) If a customer's payment does not specifically
identify an invoice, or MUSA is unable to
identify the invoice to which such receivable
should be applied with reasonable certainty,
MUSA shall contact the customer directly and
request that the customer identify the invoice
to which such receivable should be applied.
The recipient shall promptly thereafter pay to
the other party cash in an amount equal to that
portion of the payment which was so identified
to a receivable or receivables owned by such
other party.
(e) To facilitate the collection of receivables
pursuant to this Section 3.4, MIC and Intek
shall not, and Intek shall not permit MUSA to,
change the payment instructions to customers of
the U.S. LMR Distribution Business during the
90 day period commencing on the date of the
Closing. On October 16, 1996, MIC shall convey
to MUSA all of MUSA's right, title and interest
into post office boxes X.X. Xxx 000, Xxxx. 000,
Xxxxxx Xxxx XX 00000-0000, X.X. Xxx 000, Xxxx.
000, Xxxxxx Xxxx XX 00000-0000 (the "P.O.
Boxes") and bank account number 010161070176
titled to MIC at Boatmen's First National Bank
of Kansas City (the "Distribution Account").
On each Business Day during the period
beginning on the date hereof and continuing
until March 31, 1997, each party's
representative (designated and granted
appropriate powers of attorney as provided in
Section 3.5(f) of this Agreement) will review
the collections received in the P.O. Boxes or
otherwise deposited into the Distribution
Account and will allocate such payments in
accordance with Sections 3.4(a) through 3.4(d)
of this Agreement.
22
(f) Intek hereby appoints Xxxxxx Xxxxxxxxx to act
as its designated representative under Section
3.4(e) of this Agreement. MIC hereby appoints
Xxxxxx Xxxxxxxx to act as its designated
representative under Section 3.4(e) of this
Agreement. Each party will grant its
designated representative with the limited
power of attorney as shall be necessary to
perform the obligations set forth in this
Section 3.4 (including, without limitation, the
power to endorse and deposit customer checks
made payable to such party). A party may
replace its designated representative by a
writing to the other party appointing a new
designated representative. In addition to the
representatives designated by MIC and Intek,
Xxxxxxxx shall have the right to have Xxxxxx
Xxxxxx, or such other person as Xxxxxxxx shall
designate in writing, observe the review
process on behalf of Xxxxxxxx, and Securicor
shall have the right to have Xxxx Xxxxxxxx, or
such other person as Securicor shall designate
in writing, observe the review process.
(g) Each party shall have thirty (30) days to
provide the other with written objections to
the allocation of any payments received under
this Section 3.4, such thirty (30) day period
to commence upon such parties receipt of notice
of the allocation and reasonable documentation
evidencing such allocation. The MIC
Representative and the Intek Representative
shall meet within five business days of either
party's request therefore and use their
reasonable best efforts to amicably resolve any
disputes raised by Intek with respect to the
revised Reimbursement Schedule. Intek shall
pay any amount thus determined to be owing to
MIC, and MIC shall pay any amount thus
determined to be owing to Intek, as mutually
agreed upon by the MIC Representative and the
Intek Representative. In the event that the
MIC Representative and the Intek Representative
are unable to reach an agreement with respect
to any such dispute, then the matter shall be
submitted to binding arbitration in accordance
with the provisions of Section 14.13 of this
Agreement.
23
3.5 HITACHI CREDIT ALLOCATION. The parties acknowledge
that as of the Effective Date, Hitachi Denshi, Ltd.
has provided certain credits (price deductions) of
approximately $200,000 (the "Hitachi Credits")
allocable among purchase orders and inventory which
are Acquired Assets (the "Intek Credits") and
purchase orders and inventory which are retained by
MIC (the "MIC Credits"). The parties have estimated
that approximately $100,000 of the Hitachi Credits
are MIC Credits and accordingly have provided for
Intek to make an initial payment of $100,000 to MIC
at the Closing (as provided in Section 3.1(a)(6)).
MIC and Intek shall use their best efforts to
accurately allocate the Hitachi Credits between the
MIC Credits and Intek Credits. If MIC and Intek are
unable to reach agreement on this matter within
thirty (30) days after the Closing, than the MIC
Representative and the Intek Representative shall
meet within five days after the request of either of
MIC or Intek to resolve the matter. If it is
determined that the amount of the MIC Credits exceed
$100,000, then within five (5) days of such
determination Intek shall pay cash to MIC in the
amount of such excess. If it is determined that the
amount of the Intek Credits exceed $100,000, then
within five (5) days of such determination MIC shall
pay cash to Intek in the amount of such excess.
4. CLOSING.
4.1 CLOSING. On the terms and subject to the conditions
set forth in this Agreement, the closing of the
transaction contemplated hereby (the "Closing")
shall take place simultaneously with the execution
and delivery of this Agreement at 10:00 a.m.,
eastern standard time, at the offices of Xxxxx, Day,
Xxxxxx & Xxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, X.X.
00000, effective as of the Effective Date when all
of the deliveries contemplated in Sections 4.2 and
4.3 have been made or otherwise waived by the
parties in writing.
4.2 DELIVERIES AT CLOSING BY XXXXXXXX AND MIC.
Simultaneously with the execution and delivery of
this Agreement, Xxxxxxxx and MIC shall execute and
deliver or cause to be executed and delivered by a
duly authorized representative of Xxxxxxxx or MIC,
24
as the case may be, to Intek, each of the following
documents:
(a) this Agreement;
(b) the Escrow Agreement;
(c) a duly executed Assignment of United States
Trademark Rights, assigning the U.S. Trademarks
to Intek or its assignee pursuant to the terms
hereof, in the form attached hereto as EXHIBIT
G;
(d) the U.S. Trademarks License;
(e) such bills of sale, assignments, quit claim
deeds and other good and sufficient instruments
of transfer conveying to Intek or its assigns
MIC's entire right, title and interest in and
to the Acquired Assets except as otherwise
provided under Section 2.2 of this Agreement;
(f) the Computer Services Agreement;
(g) the Product Purchasing Services Agreement;
(h) the opinion of Xxxxx, Day, Xxxxxx & Xxxxx,
counsel to MIC, dated the date of the Closing
and in the form attached hereto as EXHIBIT H;
and
(i) MIC/Xxxxxxxx Officers' Certificates.
4.3 DELIVERIES AT CLOSING BY INTEK. Simultaneously with
the execution and delivery of this Agreement, Intek
shall execute and deliver, or cause to be executed
and delivered to Xxxxxxxx and/or MIC, as the case
may be, each of the following documents:
(a) this Agreement;
(b) certificates evidencing 150,000 shares of
Common Stock in payment of the Purchase Price
pursuant to Section 3.1(a)(1) of this
Agreement;
(c) the Escrow Agreement;
25
(d) Certificates evidencing 2,350,000 shares of
Common Stock, delivered to the Escrow Agent
pursuant to the terms of the Escrow Agreement;
(e) the U.S. Trademarks License Agreement duly
executed and delivered by Intek or Intek's
assignee of the U.S. Trademarks;
(f) such instruments of assumption of the Assumed
Liabilities, duly executed by Intek and or its
assignee of the Acquired Assets, as the case
may be, all as MIC may reasonably request;
(g) the Computer Services Agreement duly executed
and delivered by Intek;
(h) the Product Purchase Services Agreement duly
executed and delivered by Intek;
(i) the opinion of Xxxxxxx, Xxxxxxx & Xxxxxx
L.P.A., counsel to Intek and MUSA, dated the
date of the Closing and in the form attached
hereto as EXHIBIT I;
(j) the Intek Officer's Certificate; and
(k) a copy of the fairness opinion, or opinions,
delivered in writing by Xxxxxxxxxx & Co. Inc.
that the consideration to be paid under this
Agreement and under the Securicor Agreement is
fair to the stockholders of Intek.
5. CONDITIONS PRECEDENT
5.1 CONDITIONS PRECEDENT TO INTEK'S OBLIGATIONS. The
obligations of Intek to consummate the transactions
contemplated by this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of
the following conditions (any one or more of which
may be waived in whole or in part by Intek):
(a) MIC/XXXXXXXX OFFICERS' CERTIFICATES. (i) Each
of the representations and warranties of MIC
and Xxxxxxxx contained in this Agreement shall
be true, complete and correct in all material
respects on and as of the Closing, and (ii) MIC
shall have performed or complied with, in all
material respects, all covenants and agreements
26
contemplated by this Agreement to be performed
or complied with by MIC at or prior to the
Closing and (iii) MIC and Xxxxxxxx shall have
delivered to Intek certificates of MIC's and
Xxxxxxxx respective Chief Financial Officer or
Secretary (collectively the "MIC/Xxxxxxxx
Officers' Certificates") certifying to the
accuracy of items (i) and (ii) above, or if
MIC's Chief Financial Officer shall be unable
to certify the accuracy of (i) and (ii) above,
then he shall set forth in the MIC/Xxxxxxxx
Officers' Certificates (x) the manner in which
any of the representations and warranties of
MIC and Xxxxxxxx contained herein shall not be
true, complete and correct in all material
respects, and (y) each failure by MIC and/or
Xxxxxxxx to perform or comply with, in all
material respects, any covenant or agreement
contemplated by this Agreement to be performed
or complied with by MIC and/or Xxxxxxxx at or
prior to the Closing. If Intek elects to
consummate the transactions contemplated under
this Agreement after delivery of such
MIC/Xxxxxxxx Officers' Certificates, the items
set forth in the MIC/Xxxxxxxx Officers'
Certificates shall not constitute a breach of
this Agreement and Intek shall not be entitled
to any indemnity therefor.
(b) NO MATERIAL ADVERSE CHANGE. Since the date
hereof, there shall not have been any Material
Adverse Change in the U.S. LMR Distribution
Business.
(c) BOARD RATIFICATION. On or prior to the
Closing, Intek's Board of Directors shall have
ratified and reaffirmed the actions and
determinations of the Special Committee of the
Board of Directors of Intek referenced in this
Agreement, including, without limitation, (i)
the determination that the transaction
contemplated by this Agreement and the
Securicor Agreement is advisable and in the
best interests of Intek and its stockholders,
(iii) the approval of this Agreement and the
Securicor Agreement and, subject to the
fulfillment or waiver at or prior to the
Closing Date of the conditions set forth in
27
Section 5.1, the transactions contemplated
hereby and by the Securicor Agreement and (iii)
all other action required to be taken to
authorize the issuance of the additional shares
of Common Stock and to submit for consideration
by the stockholders of Intek an amendment of
the certificate of incorporation of Intek to
authorize additional shares of Common Stock.
(d) DELIVERIES. Each of the Deliveries to be made
by MIC or Xxxxxxxx to Intek pursuant to Section
4.2 of this Agreement shall have been made.
(e) CONSENTS, PERMITS AND GOVERNMENTAL APPROVALS.
All consents, waivers, permits, authorizations
and approvals (other than approvals to the
assignment of Contracts with Governmental
Entities) required to be obtained by MIC from
any third party or any Governmental Entity
prior to the Closing (excluding such consents,
waivers, permits, authorizations and approvals
the failure to obtain which, individually or in
the aggregate, will not have a Material Adverse
Effect on the U.S. LMR Distribution Business or
on MIC's ability to consummate the transactions
and receive the benefits contemplated hereby)
shall have been received.
5.2 CONDITIONS PRECEDENT TO MIC'S OBLIGATIONS. The
obligations of MIC to consummate the transactions
contemplated by this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of
the following conditions (any one or more of which
may be waived in whole or in part by MIC):
(a) SECURICOR LOAN AGREEMENT. Securicor and MUSA
shall have entered into the Securicor Loan
Agreement.
(b) INTEK OFFICER'S CERTIFICATE. (i) Each of the
representations and warranties of Intek
contained in this Agreement shall be true,
complete and correct in all material respects
on and as of the Closing; (ii) Intek shall have
performed or complied with, in all material
respects, all covenants and agreements
contemplated by this Agreement to be performed
or complied with by Intek at or prior to the
28
Closing; and (iii) Intek shall have delivered
to MIC a certificate of Intek's Chief Financial
Officer (the "Intek Officer's Certificate")
certifying as to the accuracy of items (i) and
(ii) above, or if Intek's Chief Financial
Officer shall be unable to certify the accuracy
of (i) and (ii) above, then he shall set forth
in the Intek Officer's Certificate (x) the
manner in which any of the representations and
warranties of Intek contained herein shall not
be true, complete and correct in all material
respects, and (y) each failure by Intek to
perform or comply with, in all material
respects, any covenant or agreement
contemplated by this Agreement to be performed
or complied with by Intek at or prior to the
Closing. If MIC elects to consummate the
transaction contemplated under this Agreement
after delivery of such Intek Officer's
Certificate, the items set forth in the Intek
Officer's Certificate shall not constitute a
breach of this Agreement and MIC shall not be
entitled to any indemnity therefor.
(c) NO MATERIAL ADVERSE CHANGE. Since the date
hereof, there shall not have been any Material
Adverse Change in the financial condition,
results of operation or business of Intek.
(d) CAPITALIZATION. Since the date hereof, Intek
shall not have issued any interest in its
equity securities, except with the consent of
Xx Xxxxx, Xxxx Xxxxxxxx and Xxxxxxxx Xxxxxx,
except for Intek's issuance of a $2.5 million
convertible debentures or any shares of Common
Stock relating thereto, the 30,000 shares of
Common Stock issued in connection with the
extension of the term of the $2.5 million
convertible debentures, or up to 1,000,000
shares of Common Stock in an equity offering.
(e) DELIVERIES. Each of the Deliveries to be made
by Intek to MIC or Xxxxxxxx pursuant to Section
4.3 of this Agreement shall have been made.
(f) CONSENTS, PERMITS AND GOVERNMENTAL APPROVALS.
All consents, waivers, permits, authorization
and approvals required to be obtained by Intek
29
from any third party or Governmental Entity
prior to the Closing (excluding such consents,
waivers, permits, authorizations and approvals
the failure to obtain which, individually or in
the aggregate, will not have a Material Adverse
Effect on Intek's ability to consummate the
transactions and receive the benefits
contemplated hereby) shall have been received.
(g) INSTRUMENTS OF ASSUMPTION. Intek shall have
delivered to MIC such instruments of assumption
of the Assumed Liabilities as MIC may
reasonably request.
6. REPRESENTATIONS AND WARRANTIES
6.1 REPRESENTATIONS AND WARRANTIES OF MIC AND XXXXXXXX.
MIC and Xxxxxxxx jointly and severally represent and
warrant to Intek that:
(a) ORGANIZATION, STANDING, POWER AND AUTHORITY.
MIC is a corporation duly organized, validly
existing and in good standing under the laws of
the State of Delaware. MIC has all requisite
corporate power and authority to operate the
U.S. LMR Distribution Business as it is now
conducted, and to enter and perform its
obligations under this Agreement and each other
agreement, document, instrument or certificate
contemplated by this Agreement or to be
executed by MIC in connection with the
consummation of the transactions contemplated
by this Agreement (together with this
Agreement, the "MIC Documents"). MIC is duly
qualified or authorized to do business as a
foreign corporation and is in good standing
under the laws of each jurisdiction in which it
owns or leases real property and each other
jurisdiction in which the conduct of the U.S.
LMR Distribution Business or the ownership of
its properties requires such qualification (all
of which jurisdictions are listed on Schedule
6.1(a) of the MIC Disclosure Schedules), except
where the failure to be so qualified or
authorized could not reasonably be expected to
have a Material Adverse Effect on the U.S. LMR
Distribution Business or the Acquired Assets.
30
Except as set forth on Schedule 6.1(a) of the
MIC Disclosure Schedules, neither MIC nor any
of its Affiliates is subject to any agreement,
commitment or understanding which restricts or
may restrict the conduct of the U.S. LMR
Distribution Business in the U.S. in any
material respect. The execution and delivery
of this Agreement, the consummation of the
transactions contemplated hereby have been, and
prior to the Closing the execution of the other
MIC Documents and the consummation of the
transactions contemplated therein will be, duly
approved by the Board of Directors of MIC and
no other corporate proceedings on the part of
MIC are necessary to authorize this Agreement
or to consummate the transactions so
contemplated. This Agreement has been, and
prior to the Closing each of the other MIC
Documents will be, duly executed and delivered
by, and constitutes, or will constitute, a
valid and binding obligation of MIC,
enforceable against MIC in accordance with its
terms, except as enforceability hereof may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar
laws affecting the enforcement of creditors'
rights generally and except that the
availability of the equitable remedy of
specific performance or injunctive relief is
subject to the discretion of the court before
which any proceedings may be brought (the
"Bankruptcy Exception").
(b) BUSINESS IN ORDINARY COURSE. Except as set
forth in Schedule 6.1(b) of the MIC Disclosure
Schedules, since March 7, 1996 MIC has
conducted the U.S. LMR Distribution Business
only in the ordinary course of business
consistent with past practice. Since March 7,
1996, there has been no Material Adverse Change
in the U.S. LMR Distribution Business, nor has
any event occurred, nor has any condition or
state of facts arisen, which has not been
disclosed to Intek and could, to the Knowledge
of the Executive Officers of MIC, reasonably be
expected to be have a Material Adverse Effect
on the U.S. LMR Distribution Business. Except
31
as set forth on Schedule 6.1(b) of the MIC
Disclosure Schedules, since March 7, 1996:
(1) MIC has not materially amended, canceled,
terminated, relinquished, waived or
released any Contract, right, debt, claim
or obligation that otherwise would have
been included as part of the Acquired
Assets except in the ordinary course of
business consistent with past practice of
MIC;
(2) MIC has not received any notice or
citation for any violation of, nor, to the
Knowledge of the Executive Officers of
MIC, has any complaint been filed with the
FCC alleging a violation of, any rule,
regulation or policy of the FCC, and MIC
has not allowed any equipment
authorization issued by the FCC to MIC to
lapse or be impaired in any manner or, to
the Knowledge of the Executive Officers of
MIC, operated the U.S. LMR Distribution
Business in any manner not in compliance
with its FCC equipment authorizations and
all applicable FCC rules, regulations and
policies; and
(3) MIC has not agreed to do any of the
foregoing.
(c) CONTRACTS. MIC and its Affiliates have made
available or delivered to Intek true, correct
and complete copies of all written Contracts
listed on Schedule 2.1(c) of the MIC Disclosure
Schedules. The Contracts constitute all of the
material contracts of any nature whatsoever
entered into by MIC that relate principally to
the U.S. LMR Distribution Business. To the
Knowledge of the Executive Officers of MIC,
each Contract is valid and enforceable in
accordance with its terms, subject to the
Bankruptcy Exception. MIC has not amended or
modified, other than in the ordinary course of
business, in any material respect or consented
to the termination of any Contract other than
as contemplated under this Agreement. Except
as set forth on Schedule 6.1(c) of the MIC
32
Disclosure Schedules, to the Knowledge of the
Executive Officers of MIC, MIC has performed in
all material respects all obligations required
to be performed by it to date under the
Contracts, and neither MIC nor, to the
Knowledge of the Executive Officers of MIC, any
other party to any Contract has breached or
improperly terminated any Contract, or is in
material default under any Contract, and, to
the Knowledge of the Executive Officers of MIC,
there exists no condition or event which after
notice or lapse of time or both, would
constitute any such breach, termination or
default. To the Knowledge of the Executive
Officers of MIC, no previous or current party
to any material Contract has given notice of or
made a claim with respect to any breach or
default thereunder, the consequences of which
individually or in the aggregate, could
reasonably be expected to have a Material
Adverse Effect on the U.S. LMR Distribution
Business or the Acquired Assets. Except as set
forth in Schedule 6.1(d) of the MIC Disclosure
Schedules and subject to Section 2.2 hereof, no
Contract requires the consent from, or delivery
of notice to, any person in connection with the
transactions contemplated hereby and the rights
of MIC under the Contracts are assignable to
Intek (without being subject to any rights of
termination or modification as a result of the
transactions contemplated by this Agreement)
and upon assignment as provided herein Intek
shall be entitled to the full right, title and
benefit under each Contract.
(d) CONSENTS AND APPROVALS; NO VIOLATION. Neither
the execution and delivery of this Agreement or
the other MIC Documents nor the performance by
MIC of the transactions contemplated hereby or
thereby conflicts with or results in any breach
of any provision of MIC's certificate of
incorporation or by-laws, except as set forth
on Schedule 6.1(d) of the MIC Disclosure
Schedules, violates, conflicts with,
constitutes a material breach or default (or an
event which, with notice or lapse of time or
both, would constitute a material breach or
default) under, or results in or gives rise to
33
a right of termination of, or accelerates the
performance required by, or results in the
creation of any lien or other encumbrance upon
any of the Acquired Assets or the properties of
the U.S. LMR Distribution Business under any of
the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust,
license, lease, contract, agreement, or other
obligation or instrument to which MIC is a
party or by which the Acquired Assets or the
U.S. LMR Distribution Business is bound, which,
individually or in the aggregate, would have a
Material Adverse Effect on the Acquired Assets
or the U.S. LMR Distribution Business, require
any consent, approval, authorization or permit
of or from, or filing with or notification to,
any court, governmental authority or other
regulatory or administrative agency or
commission, domestic or foreign ("Governmental
Entity"), or other third party except (A)
filings required under the Xxxx-Xxxxx-Xxxxxx
Act (B) consents, approvals, authorizations,
permits, filings or notifications which, if not
obtained or made would not, individually or in
the aggregate, have a Material Adverse Effect
on the Acquired Assets or the U.S. LMR
Distribution Business or would materially delay
or impair the ability of MIC to consummate the
transactions contemplated hereby, or (C) third
party consents, approvals, authorizations,
permits, filings or notifications which if not
obtained or made would not, individually or in
the aggregate, have a Material Adverse Effect
on the Acquired Assets or the U.S. LMR
Distribution Business, or violates any
statute, rule, regulation, order or decree of
any Governmental Entity by which MIC or any of
its assets is bound.
(e) ACQUIRED ASSETS. Except as set forth in
Schedule 6.1(e) of the MIC Disclosure
Schedules, MIC has good and marketable title to
and owns the Acquired Assets, free and clear of
all liens and claims of any kind or nature
whatsoever. Except as disclosed on Schedule
6.1(e) of the MIC Disclosure Schedules, none of
such Acquired Assets are subject to, or held
under, any lease, mortgage, security agreement,
34
conditional sales contract or other title
retention agreement, or are other than in the
sole possession and under the sole control of
MIC. Except as set forth on Schedule 6.1(e) of
the MIC Disclosure Schedules, the delivery by
MIC, at the Closing, to MUSA as instructed by
Intek pursuant to the terms of the Intek
Assignment and Assumption Agreement of the Xxxx
of Sale to be included among the MIC Documents
and the other instruments of transfer will vest
MUSA, as Intek's assignee, as of the date
hereof, with good and marketable title to all
of the Acquired Assets, free and clear of all
liens and claims whatsoever, except those liens
created, imposed or granted by Intek, MUSA or
any Affiliate of Intek or MUSA.
(f) INTANGIBLE PROPERTY. Except as set forth on
Schedule 6.1(f) of the MIC Disclosure
Schedules, MIC has good and lawful title, free
and clear of any liens or other encumbrances,
to the U.S. Trademarks and any and all patent,
copyrights, and know-how transferred under this
Agreement (collectively, "Intangible
Property"); to the knowledge of the Executive
Officers of MIC, the Intangible Property is
valid and subsisting and is enforceable in
whole or in part in the U.S.; to the Knowledge
of the Executive Officers of MIC there are no
actual or threatened claims by third parties
regarding the Intangible Property; to the
Knowledge of the Executive Officers of MIC the
Intangible Property does not infringe or
otherwise violate any rights of any third
party; no third party has been given the right
or license to use the Intangible Property in
connection with the sale or distribution of LMR
Products in the U.S.; and to the Knowledge of
the Executive Officers of MIC, no rights,
licenses, or permissions of any Person are used
or needed to conduct the U.S. LMR Distribution
Business.
(g) BROKERS, FINDERS AND AGENTS. No Person has
acted, directly or indirectly, as a broker,
finder or financial advisor for MIC or its
Affiliates in connection with the transactions
contemplated by this Agreement, and no Person
35
is entitled to any fee or commission or like
payment in respect thereof.
(h) EMPLOYEE BENEFIT PLANS.
(1) Except for the Midland International
Corporation Employees' Profit Sharing
Thrift Plan, no "employee pension plan",
as defined in Section 3(2) of ERISA (a
"Pension Plan"), is maintained by MIC,
Xxxxxxxx or any subsidiary or parent
thereof or any trade or business (whether
or not incorporated) which are under
control, or which are treated as a single
employer with MIC, Xxxxxxxx or any
subsidiary or parent thereof under Section
414(b), (c), (m) or (o) of the Code
("ERISA Affiliate"), or to which MIC,
Xxxxxxxx, or any subsidiary or parent
thereof or any ERISA Affiliate contributed
or are obligated to contribute. None of
the Pension Plans is a "defined benefit
plan" as defined in Section 3(35) of
ERISA, is a "multiemployer plan" or is or
has been subject to Sections 4063 or 4064
of ERISA; and, since January 1, 1990, none
of MIC, Xxxxxxxx or any subsidiary or any
parent thereof or any ERISA Affiliate has
contributed, or been obligated to
contribute, to a multiemployer plan.
(2) With respect to the Transferred Employees,
MIC has complied with the notice and
continuation requirements of Section 4980B
of the Code and Part 6 of Title I of ERISA
and the applicable regulations thereunder.
(3) Each "employee benefit plan," as defined
in Section 3(3) of ERISA (an "Employee
Benefit Plan") maintained by MIC is in
material compliance with all applicable
laws including ERISA and the Code. Except
as set forth on Schedule 6.1(h)(3), No
condition exists that is reasonably
expected to subject MIC to a material
civil penalty under Section 502(i) of
ERISA or material liability under Section
36
4069 of ERISA or Section 4795 of the Code
or other material liability with respect
to any Employee Benefit Plan. There is no
material violation of ERISA with respect
to the furnishing of applicable reports,
documents and notices regarding the
Employee Benefit Plans to the Transferred
Employees. Each Employee Benefit Plan
that is required to file a Form 5500 with
the Internal Revenue Service has timely
done so with respect to each of the last
three completed plan years.
(i) LITIGATION, PRODUCT LIABILITY. As of the date
hereof, there is no litigation, suit,
proceeding, action, claim or investigation
("Legal Proceeding") pending, or to the
Knowledge of the Executive Officers of MIC,
threatened, that questions the validity of this
Agreement, the MIC Documents or any action
taken or to be taken by MIC in connection with
the consummation of the transactions
contemplated hereby or thereby. Except as set
forth on Schedule 6.1(i) of the MIC Disclosure
Schedules, there is no Legal Proceeding pending
or, to the Knowledge of the Executive Officers
of MIC, threatened against MIC with respect to
the U.S. LMR Distribution Business or the
Acquired Assets (including, without limitation,
any claims in respect of any warranties of
MIC). MIC is not subject to any outstanding
judgment, decree or order entered in any Legal
Proceeding affecting or naming MIC or affecting
the U.S. LMR Distribution Business or the
Acquired Assets, and to the Knowledge of the
Executive Officers of MIC, no such judgment,
order or decree has been threatened. To the
Knowledge of the Executive Officers of MIC,
there is no basis for any Legal Proceeding
against MIC with respect to the U.S. LMR
Distribution Business or the Acquired Assets.
(j) SUPPLIERS AND CUSTOMERS. Schedule 6.1(j) of
the MIC Disclosure Schedules lists the three
largest suppliers and ten largest customers of
the U.S. LMR Distribution Business in the U.S.
during the period commencing on May 1, 1995 and
ending on June 30, 1996. Except as set forth
37
on Schedule 6.1(j) of the MIC Disclosure
Schedules, no supplier which is material to the
U.S. LMR Distribution Business or customer
which is material to the U.S. LMR Distribution
Business has canceled or otherwise terminated,
or, to the Knowledge of the Executive Officers
of MIC, threatened to cancel or otherwise
terminate, its relationship with MIC or has
during the last 12 months decreased materially,
or, to the Knowledge of the Executive Officers
of MIC, threatened to decrease or limit its
services, supplies or materials to MIC or its
usage or purchase of services or products of
MIC. To the Knowledge of the Executive
Officers of MIC, no such supplier or customer
intends to cancel or otherwise modify its
relationship with MIC or to decrease materially
or limit its services, supplies or materials to
MIC or its usage or purchase of services or
products of the U.S. LMR Distribution Business,
and the contemplated transactions will not
materially adversely affect the relationship of
the U.S. LMR Distribution Business with any
such supplier or customer.
(k) INFORMATION IN DISCLOSURE DOCUMENTS. To the
Knowledge of the Executive Officers of MIC, the
information with respect to MIC and its
Affiliates provided by MIC for inclusion in the
Proxy Statement will not, at the time of the
mailing of the Proxy Statement and any
amendments or supplements thereto, and at the
time of the Intek Stockholders' Meeting,
contain any untrue statement of a material fact
or omit to state any material fact required to
be stated therein or necessary in order to make
the statements therein, in light of the
circumstances under which they are made, not
misleading.
(l) FINANCIAL STATEMENTS. MIC has delivered to
Intek true, correct and complete copies of the
(A) audited consolidated balance sheet of MIC
as at December 31, 1995 and the related audited
statements of income and of changes in
financial position or of cash flows, whichever
is applicable, of MIC for the period ended
December 31, 1995 (including the related notes
38
and schedules thereto and all auditors' reports
thereon and (B) unaudited consolidated balance
sheet of MIC as at June 30, 1996 (the "Balance
Sheet Date") and the related unaudited
statements of income and of changes in
financial position or of cash flows, whichever
is applicable, of MIC for the period then ended
(including the related notes and schedules
thereto and all auditors' reports thereon)
(collectively, the "Financial Statements").
Each of the Financial Statements is complete
and correct in all material respects, and,
except as set forth in the footnotes thereto,
has been prepared in accordance with generally
accepted accounting principles ("GAAP") and
presents fairly the financial position, results
of operations and changes in financial position
or cash flows, whichever is applicable, of MIC
and its subsidiaries as at the date and for the
period indicated.
(m) REAL PROPERTY. There does not exist any actual
or, to the Knowledge of the Executive Officers
of MIC, threatened or contemplated condemnation
or eminent domain proceedings that affect any
real estate subject to real property leases set
forth on Schedule 2.1(g) (each a "Real Property
Lease") or any part thereof, and MIC has not
received any notice, oral or written, of the
intention of any Governmental Entity or other
Person to take or use all or any part thereof.
The real property covered by the Real Property
Leases constitutes all of the real property
located in the U.S. that is necessary for the
conduct of the U.S. LMR Distribution Business
as presently conducted. MIC has actual and
exclusive possession of the leasehold estates
in each Real Property Lease, free and clear of
any liens. Each of the Real Property Leases is
valid and enforceable in accordance with its
terms, subject to the Bankruptcy Exception, and
there is not under any such Real Property Lease
any existing breach, default, event of default
or event which, with notice and/or lapse of
time, would constitute a breach, default or
event of default (A) by MIC, or (B) to the
knowledge of the Executive Officers of MIC, by
any other party to any such lease, except where
39
such breach, default or event of default could
not reasonably be expected to have a Material
Adverse Effect on the U.S. LMR Distribution
Business. Upon consummation of the
transactions contemplated hereby, each Real
Estate Lease will entitle Intek to the
exclusive use, occupancy and possession of the
real estate specified therein for the purposes
for which MIC now uses such real estate in the
conduct of the U.S. LMR Distribution Business.
True, correct and complete copies of all Real
Property Leases have been delivered or made
available to Intek. No previous or current
party to any such Real Property Lease has given
notice of or made a claim with respect to any
breach or default thereunder.
(n) TANGIBLE PERSONAL PROPERTY.
(1) Schedule 6.1(n) of the MIC Disclosure
Schedules sets forth all leases of
personal property relating to personal
property used in or necessary to the
operation of the U.S. LMR Distribution
Business requiring lease payments equal to
or exceeding $20,000 per annum ("Personal
Property Leases"). MIC has delivered to
Intek true, correct and complete copies of
the Personal Property Leases, including
all amendments, modifications,
supplements, side letters or consents
affecting the obligations of any party
thereunder.
(2) Except as set forth on Schedule 6.1(n) of
the MIC Disclosure Schedules:
(A) Each of the Personal Property Leases
is in full force and effect and is
valid and enforceable in accordance
with its terms, subject to the
Bankruptcy Exception, and there is no
default under any Personal Property
Lease either by MIC or, to the
Knowledge of the Executive Officers
of MIC, by any other party thereto,
and no event has occurred that with
the lapse of time or the giving of
40
notice or both would constitute a
default thereunder. Each of the
Personal Property Leases is freely
transferable by MIC to Intek and no
third party consents are required for
such transfer; and
(B) No previous or current party to any
such Personal Property Lease has
given notice of or made a claim with
respect to any breach or default
thereunder.
(3) With respect to those Personal Property
Leases that were assigned or subleased to
MIC by a third party, all necessary
consents to such assignments or subleases
have been obtained. On the date hereof,
Intek will succeed to all of the right,
title and interest of MIC under every
Personal Property Lease.
(o) COMPLIANCE WITH LAWS. To the Knowledge of the
Executive Officers of MIC, MIC has complied
with all laws applicable to the conduct of the
U.S. LMR Distribution Business and the use of
the Acquired Assets, except for such instances
of non-compliance as could not, individually or
in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Acquired
Assets or the U.S. LMR Distribution Business.
(p) FCC LICENSES. Except as set forth in Schedule
6.1(p) of the MIC Disclosure Schedules:
(1) each of the FCC Licenses is valid and in
good standing;
(2) MIC has operated any systems constructed
pursuant to the FCC Licenses in accordance
with the terms of such FCC Licenses and in
compliance with all applicable FCC rules,
regulations or policies;
(3) there is no investigation pending, or to
the Knowledge of the Executive Officers of
MIC threatened, concerning any FCC
Licenses or Equipment Authorizations; and
41
(4) MIC has no reason to believe that the FCC
will not assign to Intek the FCC Licenses
or that Intek will be unable to obtain any
comparable equipment authorizations to
replace the Equipment Authorizations.
(q) DISCLAIMERS OF MIC. Except as otherwise
expressly provided herein in this Article 6.1,
the Acquired Assets that consist of tangible
personal property, and each item thereof, are
furnished AS IS, WHERE IS AND WITH ALL FAULTS
AND WITHOUT WARRANTIES OF ANY KIND, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE.
6.2 REPRESENTATIONS AND WARRANTIES OF INTEK. Intek
hereby represents and warrants to MIC that:
(a) ORGANIZATION, STANDING, POWER AND AUTHORITY.
Each of Intek and MUSA is a corporation duly
organized, validly existing and in good
standing under the laws of the State of
Delaware. Each of Intek and MUSA has all
requisite corporate power and authority to make
and perform its obligations under this
Agreement and each other agreement, document,
instrument or certificate contemplated by this
Agreement or to be executed by Intek or its
assignee of any of the Acquired Assets, as the
case may be, in connection with the
consummation of the transactions contemplated
by this Agreement and by the Intek Assignment
Agreement (collectively with this Agreement,
the "Intek Documents"). Except as set forth on
Schedule 6.2(a), each of Intek and MUSA is duly
qualified and authorized to do business as a
foreign corporation and is in good standing
under the laws of each jurisdiction in which it
owns or leases real property and each other
jurisdiction in which the conduct of its
business or the ownership of its properties
requires such qualification (all of which
jurisdictions are listed on Schedule 6.2(a) of
the Intek Disclosure Schedules), except where
the failure to be so qualified or authorized
could not reasonably be expected to have a
42
Material Adverse Effect on Intek or MUSA, as
the case may be. The execution and delivery of
this Agreement and the consummation of the
transactions contemplated hereby have been, and
prior to the Closing the execution of each of
the other Intek Documents, and the consummation
of the transaction contemplated thereby will
be, duly approved by unanimous vote of the
Special Committee of the Board of Directors of
Intek and by the unanimous vote of the Board of
Directors of MUSA, and no other corporate
proceedings on the part of Intek or MUSA are
necessary to authorize this Agreement or to
consummate the transactions so contemplated.
This Agreement has been, and prior to the
Closing each of the other Intek Documents will
be, duly executed and delivered by, and
constitutes, or will constitute, a valid and
binding obligation of, Intek and MUSA, to the
extent that either is a party to such Intek
Document, enforceable against Intek and MUSA in
accordance with its terms, subject to the
Bankruptcy Exception.
(b) CAPITALIZATION. As of the date hereof, the
authorized capital stock of Intek consists of
20,000,000 shares of Common Stock. As of the
date hereof, 11,203,904 shares of Common Stock,
were issued and outstanding; 465,582 shares of
Common Stock were held in treasury; 500,000
shares of Common Stock were reserved for
issuance under Intek's 1988 Key Employee Stock
Option Plan (the "1988 Option Plan"), and no
options representing the right to purchase
shares of Common Stock are outstanding under
the 1988 Option Plan; 600,000 shares of Common
Stock were reserved for issuance under Intek's
1994 Stock Option Plan (the "1994 Option
Plan"), and options representing the right to
purchase 250,000 shares of Common Stock are
outstanding under the 1994 Option Plan; and
300,000 shares of Common Stock were reserved
for issuance under Intek's 1994 Directors'
Stock Option Plan (the "Directors' Option
Plan"), and options representing the right to
purchase 65,000 shares of Common Stock are
outstanding under the Directors' Option Plan.
All shares of Common Stock outstanding or held
43
in treasury are duly authorized, validly
issued, fully paid and nonassessable and are
not subject to preemptive rights. Except as
set forth in this Section 6.2(b) or in Schedule
6.2(b) of the Intek Disclosure Schedules or as
may be issued pursuant to the Securicor
Agreement or for issuance of securities
permitted by Section 5.2(d), as of the date
hereof, there are no shares of capital stock of
Intek authorized, issued or outstanding and
there are no outstanding subscriptions,
options, warrants, rights, convertible
securities or any other agreements or
commitments of any character relating to the
issued or unissued capital stock or other
securities of Intek obligating Intek to issue,
deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital
stock of Intek or obligating Intek to grant,
extend or enter into any subscription, option,
warrant, right, convertible security or other
similar agreement or commitment. There are no
voting trusts or other agreements or
understandings to which Intek or its
subsidiaries is a party with respect to the
voting of the capital stock of Intek.
(c) SHARES ISSUED TO MIC. All of the shares of
Common Stock issuable to MIC, or to the Escrow
Agent pursuant to the Escrow Agreement, in
accordance with this Agreement shall be, when
so issued, duly authorized, validly issued,
fully paid and nonassessable, not be subject to
any preemptive rights, and be free and clear of
any liens, encumbrances or restrictions. The
shares issued by Intek to MIC hereunder shall
equal approximately 6% of the outstanding
shares of Common Stock of Intek on a fully
diluted basis as of the date of the Closing,
assuming issuance of all shares of Common
Stock Intek has a commitment to issue, the
additional shares of Common Stock Intek to be
delivered to MIC out of escrow pursuant to this
Agreement upon consummation of the Securicor
Transaction and the issuance by Intek of
25,000,000 shares of Common Stock to Securicor
pursuant to the Securicor Agreement upon
consummation of the Securicor Transaction, and
44
the shares of Common Stock Intek is permitted
to issue pursuant to Section 6.2(b)(ii)(A) of
the Securicor Agreement. As of the date
hereof, all 11,203,904 shares of Common Stock
which are issued and outstanding are listed and
traded on the National Association of
Securities Dealers Automatic Quotation System
Small Cap Market (the "NASDAQ Small Cap
Market") under the symbol "IDCC", and Intek is
in full compliance with its listing agreement.
The shares issued to MIC pursuant to this
Agreement shall be listed on the NASDAQ Small
Cap Market.
(d) SUBSIDIARIES. Schedule 6.2(d) of the Intek
Disclosure Schedules sets forth the name and
state of incorporation of each subsidiary (as
defined herein) of Intek (collectively, the
"Intek Subsidiaries") existing as of the date
hereof. Except as set forth on Schedule 6.2(d)
of the Intek Disclosure Schedules, each of the
Intek Subsidiaries is a corporation duly
organized, validly existing and in good
standing under the laws of its respective
jurisdiction of incorporation and is duly
qualified to do business as a foreign
corporation in each jurisdiction in which its
ownership or lease of property or the nature of
the business conducted by it makes such
qualification necessary, except for such
jurisdictions in which the failure to be so
qualified would not have a Material Adverse
Effect on Intek. Each of the Intek
Subsidiaries has the requisite corporate power
and authority to own, lease and operate its
properties and assets and to carry on its
businesses as they are now being conducted.
Except as set forth on Schedule 6.2(d) of the
Intek Disclosure Schedules, all outstanding
shares of capital stock of each Intek
Subsidiary are owned by Intek or another Intek
Subsidiary and are validly issued, fully paid
and nonassessable, are not subject to
preemptive rights and are owned free and clear
of all liens, claims and encumbrances. Except
as set forth on Schedule 6.2(d) of the Intek
Disclosure Schedules, there are no outstanding
subscriptions, options, warrants, rights,
45
convertible securities or any other agreements
or commitments of any character relating to the
issued or unissued capital stock or other
securities of any Intek Subsidiary obligating
any Intek Subsidiary to issue, deliver or sell,
or cause to be issued, delivered or sold,
additional shares of its capital stock or
obligating any Intek Subsidiary to grant,
extend or enter into any subscription, option,
warrant, right, convertible security or other
similar agreement or commitment. As of the
date of this Agreement, MUSA has no
subsidiaries.
(e) BUSINESS IN ORDINARY COURSE. Except as set
forth on Schedule 6.2(e) of the Intek
Disclosure Schedules, since December 31, 1995,
Intek and each Intek Subsidiary have conducted
their respective businesses only in the
ordinary course of business consistent with
past practice and there has been no Material
Adverse Change with respect to Intek, nor has
any event occurred, nor has any condition or
state of facts arisen, which has not been
disclosed to MIC and could, to the Knowledge of
the Executive Officers of Intek, reasonably be
expected to have a Material Adverse Effect on
Intek.
(f) CONSENTS AND APPROVALS; NO VIOLATION. Neither
the execution and delivery of this Agreement or
the other Intek Documents by Intek or MUSA, as
the case may be, nor the consummation by Intek
or MUSA of the transactions contemplated hereby
or thereby conflicts with or results in any
breach of any provision of Intek's or MUSA's
respective certificates of incorporation or by-
laws, except as set forth on Schedule 6.2(f) of
the Intek Disclosure Schedules, violates,
conflicts with, constitutes a material breach
or default (or an event which, with notice or
lapse of time or both, would constitute a
material breach or default) under, or results
in or gives rise to a right of termination of,
or accelerates the performance required by, or
results in the creation of any lien or other
encumbrance upon any of the properties or
assets of Intek, MUSA or any of the Intek
46
Affiliates under, any of the terms, conditions
or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease,
agreement or other instrument or obligation to
which Intek is a party or to which they or any
of their respective properties or assets are
subject, except for such violations, conflicts,
breaches, defaults, terminations, accelerations
or creations of liens or other encumbrances,
which, individually or in the aggregate, would
not have a Material Adverse Effect on Intek or
any Intek Affiliate, requires any consent,
approval, authorization or permit of or from,
or filing with or notification to, any
Governmental Entity, or other third party
except (A) filings under the Xxxx-Xxxxx-Xxxxxx
Act in connection with the issuance of the
Additional Shares to MIC pursuant to Section
3.1(b)(2)(A) of this Agreement, (B) pursuant to
the Exchange Act, (C) filings with, and
approvals by, the FCC or any successor thereto,
or (D) third party consents, approvals,
authorizations, permits, filings or
notifications which if not obtained or made
would not, individually or in the aggregate,
have a Material Adverse Effect on Intek or
MUSA, or violates any statute, rule,
regulation, order or decree of any Governmental
Entity by which Intek, MUSA, the Intek
Subsidiaries, or any of their respective
assets, is bound.
(g) BROKERS, FINDERS AND AGENTS. Except for
Xxxxxxxxxx & Co. Inc., no Person has acted,
directly or indirectly, as a broker, finder or
financial advisor for Intek or its Affiliates
in connection with the transactions
contemplated by this Agreement, and no Person
is entitled to any fee or commission or like
payment in respect thereof. Intek shall be
solely responsible for, and shall hold MIC and
Xxxxxxxx harmless from and against, all
expenses and fees payable to Xxxxxxxxxx & Co.
Inc. in connection with the transactions
contemplated hereunder.
(h) EMPLOYEE RELATIONS. Except as set forth in
Schedule 6.2(h) of the Intek Disclosure
47
Schedules, there are no material controversies
pending, or, to the Knowledge of the Executive
Officers of Intek and MUSA, threatened that
involve any employees employed by Intek, MUSA
or of any Intek Subsidiary.
(i) EMPLOYEE PLANS. Except as set forth on
Schedule 6.2(i) of the Intek Disclosure
Schedules, all employee benefit, welfare,
bonus, deferred compensation, pension, profit
sharing, stock option, employee stock
ownership, consulting, severance, or fringe
benefit plans, formal or informal, written or
oral, and all trust agreements related thereto,
relating to any present or former directors,
officers or employees of Intek or any Intek
Subsidiary (collectively, "Intek Employee
Plans") have been maintained, operated, and
administered in substantial compliance with
their terms and currently comply, and have at
all relevant times complied, in all material
respects with ERISA and the Code, to the extent
applicable, and any other applicable laws.
With respect to each Intek Employee Plan which
is a pension plan (as defined in Section 3(2)
of ERISA), except as set forth in Schedule
6.2(i) of the Intek Disclosure Schedules:
each pension plan as amended (and any trust
relating thereto) intended to be a qualified
plan under Section 401(a) of the Code either
has been determined by the Internal Revenue
Service ("IRS") to be so qualified or is the
subject of a pending application for such
determination that was timely filed, there is
no accumulated funding deficiency (as defined
in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, and no waiver of
the minimum funding standards of such sections
has been requested from the IRS, no reportable
event described in Section 4043 of ERISA has
occurred, no defined benefit plan has been
terminated, nor has the Pension Benefit
Guaranty Corporation instituted proceedings to
terminate a defined benefit plan or to appoint
a trustee or administrator of a defined benefit
plan, and no circumstances exist that
constitute grounds under Section 4042 of ERISA
entitling the Pension Benefit Guaranty
48
Corporation to institute any such proceedings,
no pension plan is a "multiemployer plan" and
as of the last day of the most recent plan year
which ended prior to the date hereof and for
which an actuarial valuation has been issued by
the plan's actuary, with respect to each
defined benefit plan which is a "single-
employer plan" (within the meaning of Section
4001(a)(15) of ERISA) the actuarially
determined present value of all "benefit
liabilities" (within the meaning of Section
4001(a)(16) of ERISA), as determined on the
basis of the actuarial assumptions contained in
the plan's most recent actuarial valuation, did
not exceed the then current value of the assets
of the plan and there has been no material
change in the financial condition of the plan
since the last day of the most recent plan
year. No liability under subtitle C or D of
Title IV of ERISA has been incurred by Intek or
any Intek Subsidiary with respect to any
"single-employer plan", formerly maintained by
any of them or by any entity which is
considered one employer with Intek under
Section 4001 of ERISA or Section 414 of the
Code.
(j) MATERIAL CONTRACTS. Except as set forth in
Schedule 6.2(j) of the Intek Disclosure
Schedules, the Securicor Agreement, this
Agreement and the Securicor Loan Agreement,
neither Intek, MUSA nor any other Intek
Subsidiary is a party to, or is bound by any
agreement, indenture or other instrument
relating to the borrowing of money by Intek,
MUSA or any such Intek Subsidiary or the
guarantee by Intek, MUSA or any such Intek
Subsidiary of any such obligation (other than
trade payables and instruments relating to
transactions entered into in the ordinary
course of business), any contract or agreement
or amendment thereto that would be required to
be filed as an exhibit to a Report on Form 10-K
filed by Intek with the Commission, any
contract relating to the disposition of any
assets or any business interests of Intek,
other than in the ordinary course of business,
under which the buyer has any continuing
49
obligations or indemnity arrangements, any
warranty or other agreement relating to any
products manufactured or distributed by Intek
or any Intek Subsidiary, any other contract or
agreement or amendment thereto that places any
restrictions on the ability of Intek, MUSA or
any other Intek Subsidiary to engage in any
business activity which restrictions would have
a Material Adverse Effect on Intek or MUSA
(collectively, the "Intek Contracts"). Neither
Intek, MUSA nor any Intek Subsidiary is in
default under any Intek Contract, which default
is reasonably likely to have, either
individually or in the aggregate, a Material
Adverse Effect on Intek, and there has not
occurred any event that with the lapse of time
or the giving of notice or both would
constitute such a default.
(k) INTEK CORPORATE ACTION. The Special Committee
of the Board of Directors of Intek has, by
unanimous vote, determined that the transaction
contemplated by this Agreement and the
Securicor Agreement is advisable and in the
best interests of Intek and its stockholders,
and approved this Agreement and the Securicor
Agreement and the transactions contemplated
hereby and by the Securicor Agreement.
(l) INFORMATION IN DISCLOSURE DOCUMENTS. The
information with respect to Intek or any
subsidiary of Intek provided by Intek for
inclusion in the Intek Proxy Statement to be
mailed to Intek's shareholders in connection
with the transactions contemplated by this
Agreement, will not, at the time of the mailing
of the Intek Proxy Statement and any amendments
or supplements thereto, and at the time of the
Intek Stockholders' Meeting, contain any untrue
statement of a material fact or omit to state
any material fact required to be stated therein
or necessary in order to make the statements
therein, in light of the circumstances under
which they are made, not misleading; provided
that Intek makes no representation or warranty
with respect to information provided by MIC for
inclusion in the Intek Proxy Statement. The
Intek Proxy Statement shall comply as to form
50
in all material respects with the provisions of
the Exchange Act, and the respective rules and
regulations promulgated thereunder.
(m) FINANCIAL STATEMENTS. Intek has delivered to
MIC true, correct and complete copies of the
(A) audited consolidated balance sheet of Intek
as at December 31, 1995 and the related audited
statements of income and of changes in
financial position or of cash flows, whichever
is applicable, of Intek for the period then
ended (including the related notes and
schedules thereto and all auditors' reports
thereon) , and (B) unaudited consolidated
balance sheet of Intek as at June 30, 1996 (the
"Intek Balance Sheet Date") and the related
unaudited statements of income and of changes
in financial position or of cash flows,
whichever is applicable, of Intek for the
period then ended (including the related notes
and schedules thereto and all auditors' reports
thereon) (collectively, the "Intek Financial
Statements"). Each of the Intek Financial
Statements is complete and correct in all
material respects, and, except as set forth in
the footnotes thereto, has been prepared in
accordance with GAAP and presents fairly the
financial position, results of operations and
changes in financial position or cash flows,
whichever is applicable, of Intek and its
subsidiaries as at the date and for the period
indicated.
(n) ENVIRONMENTAL MATTERS. For purposes of this
Section 6.2(n), the following terms shall have
the indicated meaning:
(1) "Real Property" means all real property
presently or formerly owned or operated by
Intek or any Intek Subsidiary on which
facilities are or were located and all
real property (including property held as
trustee or in any other fiduciary
capacity) over which Intek or any Intek
Subsidiary currently or formerly has
exercised dominion, management or control.
To the extent that Real Property includes
site leases, the representations contained
51
in the Section 6.2(n) shall be limited to
the Knowledge of the Executive Officers of
Intek.
(2) "Environmental Law" means any applicable
federal, state or local statute, law
ordinance, rule, regulation, code,
license, permit, authorization, approval,
consent, order, judgment, decree,
injunction, directive, requirement or
agreement with any Governmental Entity,
now existing, relating to: (aa) the
protection, preservation or restoration of
the environment (including, without
limitation, air water vapor, surface
water, groundwater, drinking water supply,
surface land, subsurface land, plant and
animal life or any other natural
resource), or to human health or safety,
or (bb) the exposure to, or the use,
storage, recycling, treatment, generation,
transportation, processing, handling,
labeling, production, release or disposal
of Hazardous Substances, in each case as
amended. The term Environmental Law
includes, without limitation,
(A) the following statutes, each as
amended:
(i) the Federal Clean Air Act;
(ii) the Federal Clean Water Act;
(iii) the Federal Resource
Conservation and Recovery Act
of 1976 ("RCRA");
(iv) the Federal Comprehensive
Environmental Response
Compensation and Liability Act
of 1980 ("CERCLA");
(v) the Federal Toxic Substances
Control Act;
(vi) the Federal Occupational
Safety and Health Act of 1970;
(vii) the Federal Safe Drinking
Water Act;
(viii)the Federal Insecticide,
Fungicide and Rodenticide
Act;
(ix) the California Hazardous Waste
Control Law;
52
(x) the California Hazardous
Substance Account Act;
(xi) the Xxxxxx-Cologne Water
Quality Control Act; and
(xii) the California Air Pollution
Control Law; and
(B) any common law or equitable doctrine
(including, without limitation,
injunctive relief and tort doctrines
such as negligence, nuisance,
trespass and strict liability) that
may impose liability or obligations
for injuries or damages due to, or
threatened as a result of, the
presence of or exposure to any
Hazardous Substance.
(3) "Hazardous Substance" means any substance,
whether liquid, solid or gas, listed,
defined, designated or classified as
hazardous, toxic, radioactive or
dangerous, under any applicable
Environmental Law, whether by type or by
quantity. Hazardous Substance includes,
without limitation, (aa) any "hazardous
substance" as defined in CERCLA, (bb) any
"hazardous waste" as defined in RCRA, and
(cc) any toxic waste, pollutant,
contaminant, hazardous substance, toxic
substance, hazardous waste, special waste
or petroleum or any derivative or by-
product thereof, radon, radioactive
material, friable asbestos, asbestos
containing material releasing friable
asbestos, urea formaldehyde foam
insulation, lead and polychlorinated
biphenyls ("PCBs").
(4) Except as set forth on Schedule 6.2(n) of
the Intek Disclosure Schedules or as would
not individually or in the aggregate have
a Material Adverse Effect on Intek,
(A) Intek and each Intek Subsidiary is
and has been in compliance with all
applicable Environmental Laws,
53
(B) the Real Property does not contain
any Hazardous Substance in violation
of any applicable Environmental Law,
(C) neither Intek nor any Intek
Subsidiary has received any written
notices, demand letters or written
requests for information from any
Governmental Entity or any third
party indicating that Intek or such
Intek Subsidiary may be in violation
of, or liable under, any
Environmental Law,
(D) to the Knowledge of the Executive
Officers of Intek, there are no
civil, criminal or administrative
actions, suits, demands, claims,
hearings, investigations or
proceedings pending or to the
Knowledge of the Executive Officers
of Intek threatened against Intek or
any Intek Subsidiary with respect to
Intek or any Intek Subsidiary or the
Real Property relating to any
violation, or alleged violation, of
any Environmental Law,
(E) no reports have been filed, or, to
the Knowledge of the Executive
Officers of Intek, are required to
be filed, by Intek or any Intek
Subsidiary concerning the release of
any Hazardous Substance or the
threatened or actual violation of
any Environmental Law on or at the
Real Property,
(F) to the Knowledge of the Executive
Officers of Intek, there are no
underground storage tanks on, in or
under any of the Real Property and
no underground storage tanks have
been closed or removed from any Real
Property while such Real Property
was owned or operated by Intek or
any Intek Subsidiary, and
54
(G) to the Knowledge of the Executive
Officers of Intek, neither Intek nor
any Intek Subsidiary has incurred,
and none of the Real Property is
presently subject to, any
liabilities fixed (or, to the
knowledge of Intek, contingent)
relating to any suit, settlement,
court order, administrative order,
judgment or claim asserted or
arising under any Environmental Law.
(5) To the Knowledge of the Executive Officers
of Intek, there are no permits or licenses
required under any Environmental Law in
respect of the Real Property presently
operated by Intek or any Intek Subsidiary.
(6) Neither Intek nor any Intek Subsidiary has
received written notice that any part of
the Real Property has been or is listed as
a site containing Hazardous Substances
pursuant to any Environmental Law.
(o) LABOR RELATIONS. Except as set forth in
Schedule 6.2(o) of the Intek Disclosure
Schedules, neither Intek nor any Intek
Subsidiary is a party to or bound by any
collective bargaining agreement respecting its
employees, nor is there pending, or to the
Knowledge of the Executive Officers of Intek
threatened, any strike, walkout or other work
stoppage or labor organizational effort, and
neither Intek nor any Intek Subsidiary has
received any union grievances, complaints, or
claims, the liability for which would have a
Material Adverse Effect on Intek.
(p) REAL ESTATE. Except as set forth on Schedule
6.2(p) of the Intek Disclosure Schedules, no
real property is owned by Intek or any Intek
Subsidiary. Schedule 6.2(p) sets forth the
description of all real property leases to
which Intek is a party. There does not exist
any actual or, to the Knowledge of the
Executive Officers of Intek, threatened or
contemplated condemnation or eminent domain
proceedings that affect any real estate subject
55
to real property leases set forth on Schedule
6.2(p), or otherwise operated or utilized by
Intek, or any part thereof, and Intek has not
received any notice, oral or written, of the
intention of any Governmental Entity or other
Person to take or use all or any part thereof.
(q) LITIGATION. As of the date hereof, there is no
Legal Proceeding pending, or to the Knowledge
of the Executive Officers of Intek, threatened,
that questions the validity of this Agreement,
the Intek Documents or any action taken or to
be taken by Intek in connection with the
consummation of the transactions contemplated
hereby or thereby. Except as set forth on
Schedule 6.2(q) of the Intek Disclosure
Schedules, there is no Legal Proceeding pending
or, to the Knowledge of the Executive Officers
of Intek, threatened against Intek or any Intek
Subsidiary (including, without limitation, any
claims in respect of any warranties of Intek)
which, insofar as the Executive Officers of
Intek can reasonably foresee, would have a
Material Adverse Effect on Intek. Neither
Intek nor any Intek Subsidiary is subject to
any outstanding judgment, decree or order
entered in any Legal Proceeding affecting or
naming Intek or any Intek Subsidiary or having
a Material Adverse Effect on Intek, and to the
Knowledge of the Executive Officers of Intek,
no such judgment, order or decree has been
threatened. To the Knowledge of the Executive
Officers of Intek, there is no basis for any
Legal Proceeding against Intek or any Intek
Subsidiary which could reasonably be expected
to have a Material Adverse Effect on Intek.
(r) LICENSES. Schedule 6.2(r) of the Intek
Disclosure Schedules sets forth a complete list
of all FCC licenses in which Intek has an
interest or under which Intek operates any part
of its business. Intek is not, as of the date
hereof, the record and beneficial licensee and
owner of any FCC licenses. Intek is entitled
to act and is acting as of the date hereof as
manager, pursuant to valid and subsisting
management agreements, of each of the FCC
licenses identified as managed FCC Licenses on
56
Schedule 6.2(r) of the Intek Disclosure
Schedules (the "Licenses") and, to the
knowledge of the Executive Officers of Intek,
the persons identified on Schedule 6.2(r) of
the Intek Disclosure Schedules as the holders
of the Licenses are the sole record and
beneficial licensees and owners of such
Licenses). Except as set forth on Schedule
6.2(r) of the Intek Disclosure Schedules,
neither Intek nor any of its Affiliates
currently owns, of record or beneficially, or
manages any other FCC licenses. Except as set
forth on Schedule 6.2(r) of the Intek
Disclosure Schedules, to the knowledge of the
Executive Officers of Intek, there is no
pending or threatened action by the FCC or any
other Governmental Entity or third party to
suspend, revoke, terminate or challenge any of
the Licenses or otherwise investigate the
operation of Intek's SMR business or the
accuracy of the loading of the system or
systems of Intek's SMR business. Except as set
forth in Schedule 6.2(r) of the Intek
Disclosure Schedules, Intek is as of the date
hereof in compliance in all material respects
with all regulations concerning construction
and spacing of the Licenses or the facilities
associated therewith, and all other federal
statutes, and rules, regulations and policies
of the FCC applicable to Intek, the Licenses,
or Intek's SMR business. To the Knowledge of
the Executive Officers of Intek, none of the
Licenses is currently subject to or operating
under any short-space agreement or any FCC
waiver of otherwise applicable rules and
regulations, except as disclosed in Schedule
6.2(r) of the Intek Disclosure Schedules.
Except as disclosed in Schedule 6.2(r), there
are no payments due and payable by Intek, nor
any dispute regarding any payments due from
Intek between Intek and the licensee of any of
the Licenses and, to the knowledge of the
Executive Officers of Intek, there are no
payments due and payable by any third party
(including any predecessor in interest with
respect to the Licenses), nor any dispute
regarding any payments by any third party
between such third party or Intek and the
57
licensees of any License relating to the
Licenses, including without limitation any
payments to the licensees of the Licenses.
(s) UNITS IN SERVICE. Schedule 6.2(s) of the Intek
Disclosure Schedules sets forth a true and
complete list, by customer, of the units in
service in connection with the Licenses (the
"Units in Service"). The Units in Service are,
to the knowledge of the Executive of Officers
of Intek, in the possession of the indicated
customers, which customers are billed for their
use of such Units in Service at the actual
customer rates shown in Schedule 6.2(s) of the
Intek Disclosure Schedules and which customers
are required to pay such billed amounts in full
(subject to Intek's normal prompt payment,
volume and similar discounts, all of which have
been disclosed in writing to MIC) on or before
the relevant due date reflected in the relevant
billing.
(t) CONTRACTS, LEASES AND SITE LICENSES. Schedule
6.2(t) of the Intek Disclosure Schedules sets
forth a true and complete index and current
copies (or written summaries, including all
material terms, in the case of oral agreements)
of all material contracts (excluding customer
contracts), leases and site licenses related to
the assets, Intek's business and the Licenses,
including without limitation, site licenses,
equipment leases or installment sale contracts,
partnership, joint-venture or joint-use
agreements, management agreements, dealer
agreements, short-space agreements or the like.
Except as set forth on Schedule 2.1(c) of the
Intek Disclosure Schedules, all of the
contracts, leases and site licenses relating to
the Licenses have been entered into by Intek on
arm's length terms with non-Affiliates are in
full force and effect and are valid and
enforceable in accordance with their terms.
Intek has received no notice from any Person of
termination of any such contract, lease, or
site license, and the consummation of the
transaction herein contemplated shall not
affect a termination of or give any Person the
right to terminate or modify any such contract,
58
lease or site lease. Except as set forth on
Schedule 2.1(c) of the Intek Disclosure
Schedules, to the Knowledge of the Executive
Officers of Intek, none of the contracting
parties is in default in any material respect
or has acted or failed to act in a manner
which, with notice or the passage of time or
both, will result in a material default under
any of the contracts, leases, and site licenses
and no penalties have been incurred nor are any
material amendments pending with respect to any
of the contracts, leases and site licenses.
(u) RELATED PARTY TRANSACTIONS. Except as set
forth in Schedule 6.2(u) of the Intek
Disclosure Schedules, no current shareholder,
director, or officer of Intek or any of its
Subsidiaries is presently a party to, or since
January 1, 1996, has entered into, directly or
indirectly through his, her or its Affiliates,
any arrangement or transaction with Intek or
any of its Subsidiaries providing for the
furnishing of services (except as director or
officer) by or to, or the rental of real or
personal property from or to, or otherwise
requiring cash payments to or by any such
person (except as a director or officer), other
than those that do not involve payments, or the
furnishing of goods or services having a fair
market value by, from or to Intek or any of its
Subsidiaries of more than $25,000 in any
calendar year.
(v) COMPLIANCE WITH LAWS. Except as set forth on
Schedule 6.2(v) of the Intek Disclosure
Schedules, to the Knowledge of the Executive
Officers of Intek, each of Intek, its
subsidiaries and its Affiliates has complied
with all laws applicable to the conduct of its
business, except for such instances of non-
compliance as could not, individually or in the
aggregate, reasonably be expected to have a
Material Adverse Effect on Intek.
7. COVENANTS OF MIC.
7.1 MIC'S REPRESENTATION LETTER. MIC and Intek shall
execute and deliver a written representation letter
59
(a "Shareholder Representation Letter") with respect
to the Common Stock to be delivered to MIC pursuant
to this Agreement providing that:
(a) MIC agrees that it shall not sell, transfer,
assign, pledge or otherwise dispose of the
Common Stock unless such sale, transfer,
assignment, pledge or other disposition has
been registered or is exempt under the
Securities Act and has been registered or
qualified or is exempt from registration or
qualification under applicable securities laws
and MIC provides to Intek an opinion of counsel
satisfactory to Intek that a sale, transfer,
assignment, pledge or other disposition of such
Common Stock may be made without registration.
(b) MIC represents as follows:
(1) The Common Stock to be acquired by MIC
will be acquired for MIC's own account and
not with a view to, or present intention
of, distribution thereof in violation of
the Securities Act, or any applicable
state securities laws and will not be
disposed of in contravention of the
Securities Act or any applicable state
securities laws;
(2) MIC is sophisticated in financial matters
and is able to evaluate the risks and
benefits of the investment in the Common
Stock;
(3) The Executive Officers of MIC had an
opportunity to ask questions and receive
answers concerning Intek and the terms and
conditions of the acquisition of the
Common Stock and have had full access to
such other information concerning Intek as
MIC has requested; and
(4) MIC acknowledges that the Common Stock has
not been registered under the Securities
Act and, therefore, cannot be sold unless
subsequently registered under the
Securities Act or an exemption from such
registration is available, and MIC is able
60
to bear the economic risk of any
investment in the Common Stock for an
indefinite period of time.
(c) MIC acknowledges that until such time as the
Common Stock has been registered for resale
pursuant to the Securities Act, each
certificate representing the Common Stock shall
be endorsed with the following legend:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER ANY STATE SECURITIES LAWS, AND MAY
NOT BE SOLD, ASSIGNED, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF UNLESS
THEY HAVE FIRST BEEN REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS
OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE AND THE
CORPORATION SHALL HAVE RECEIVED, AT THE
EXPENSE OF THE HOLDER, EVIDENCE OF SUCH
EXEMPTION REASONABLY SATISFACTORY TO THE
CORPORATION (WHICH MAY INCLUDE, AMONG
OTHER THINGS, AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION).
(d) MIC acknowledges that Intek may place stop
transfer orders against the registration or
transfer of any Common Stock until such time as
the requirements of the foregoing legend are
satisfied.
(e) Intek acknowledges that the legend described in
Section 7.1(c) hereof and any stop transfer
instructions issued pursuant to Section 7.1(d)
hereof shall be removed promptly and Intek
shall issue promptly a new certificate to MIC
of such Common Stock if the sale of such Common
Stock has been registered under the Securities
Act and a prospectus meeting the requirements
of Section 10 of the Securities Act is
available or if MIC provides to Intek an
opinion of counsel reasonably satisfactory to
Intek that a public sale, transfer or
assignment of such Common Stock may be made
without registration.
61
7.2 SATISFACTION OF MIC OBLIGATIONS POST-CLOSING.
(a) RETURN OF ACQUIRED ASSETS. If Intek, MUSA
Securicor Communications is compelled to return
any Acquired Assets to MIC to be applied
against the satisfaction of any obligation of
MIC which arises within one year after the
Closing, then Xxxxxxxx shall, promptly upon
receipt of a written request therefor,
accompanied by an assignment to Xxxxxxxx of all
of the requesting entity's right, title and
interest in any claim against MIC with respect
to such Acquired Asset, pay cash to such entity
in an amount equal to the value of such
Acquired Asset as of the date of this
Agreement. Each of MIC and Xxxxxxxx hereby
agrees that Securicor Communications Limited
shall be an intended third-party beneficiary of
the provisions of this Section 7.2.
(b) RETURN OF MUSA PROPERTY. If a customer of the
U.S. LMR Distribution Business returns
merchandise to MIC which merchandise was
supplied by MUSA pursuant to MUSA's obligations
to such customer under the Contracts (whether
or not such Contract was assignable), or if MIC
receives from a customer any other cash or
other proceeds arising from MUSA's performance
of its obligations to a customer, then MIC
shall, at MUSA expense, deliver such inventory,
cash or proceeds to MUSA in the form received.
Xxxxxxxx shall promptly pay to MUSA the amount
of such proceeds or the cost of such inventory
upon MUSA's written request therefor if MIC
fails to comply with its obligations under this
Section 7.2(b).
8. COVENANTS OF INTEK
8.1 CONFIDENTIALITY OF INFORMATION.
(a) The materials made available to Intek, MUSA or
Securicor by MIC or MIC's Affiliates, whether
in verbal, written or any other form
(collectively, the "MIC Materials"), are deemed
to be confidential and proprietary information
of MIC to the extent such MIC Materials are not
purchased as part of the Acquired Assets. No
62
such MIC Materials shall be copied,
photographed, or in any way duplicated without
the express prior written consent of MIC except
to the extent such MIC Materials have
previously been made available to the general
public other than by Intek, MUSA, Securicor or
their respective Affiliates. MIC will provide
copies of the MIC Materials, or any part of
them, to Intek, MUSA or Securicor upon their
respective requests therefore. At the election
of MIC, Securicor may be required to execute a
confidentiality agreement containing provisions
no less burdensome than those set forth in this
Section 8.1 with respect to Intek prior to
having the MIC Materials made available to it
hereunder.
(b) Intek shall notify, and shall cause any
Affiliate of Intek, including MUSA, to notify
all employees, agents or representatives of
Intek or any Affiliate of Intek receiving or
otherwise learning of the MIC Materials, that
the contents thereof must be kept confidential
pursuant to this Agreement, and that any
disclosure to a third party or use of MIC
Materials not purchased as part of the Acquired
Assets without MIC's written permission will
constitute a breach of this Agreement.
(c) Intek agrees, and agrees to obtain for the
benefit of MIC from any third party provided
the MIC Materials in accordance with the
provisions hereof, that upon any repudiation of
this Agreement or if there is no Closing for
any reason whatsoever, neither Intek nor any
such third party will implement, use or
disclose the MIC Materials not purchased as
part of the Acquired Assets for a period of
three (3) years beginning on the date of any
repudiation regardless of whether MIC
surrenders, assigns or otherwise disposes of
its rights and duties under the Agreement
unless the MIC Materials are or become known
to the general public, except if such public
knowledge is the result of Intek's or such
third party's own actions and/or breach of this
Agreement; or such disclosure is required under
applicable law or an order of a Governmental
63
Entity. In the event that any repudiation
shall occur, Intek shall return, and cause all
other Persons who received such MIC Materials
through Intek to return, to MIC all tangible
MIC Materials, notes, records and recordings,
except to the extent that such MIC Materials
have been purchased as Acquired Assets
hereunder.
(d) Unless purchased by Intek pursuant to the terms
of this Agreement, the MIC Materials shall,
without limitation, remain the property of MIC,
and upon the termination of this Agreement
shall be returned promptly to MIC at its
request, together with ALL copies, notes,
extracts, summaries and analyses thereof,
whether or not such copies have been provided
by MIC.
(e) Intek acknowledges that any violation of this
Section 8.1 will cause immediate and
irreparable harm to MIC and that the damages
which MIC will suffer may be difficult or
impossible to measure. Therefore, upon any
actual or impending violation of this Section
8.1, MIC will be entitled to the issuance of a
restraining order and/or a preliminary and
permanent injunction, without bond, restraining
and/or enjoining such violation by Intek or any
entity or Person acting in concert with Intek.
This remedy will be in addition to any other
remedy which may otherwise be available to MIC.
8.2 REPLACEMENT OF PERFORMANCE BONDS. On or before
September 30, 1996, Intek or its assigns shall
provide all letters of credit, guaranties and
performance bonds as shall be necessary for Intek to
obtain the release of MIC and its Affiliates from
the guaranties, letters of credit, or performance
bonds set forth on Schedule 8.2 (collectively, the
"Performance Guarantees").
8.3 RIGHTS OF INSPECTION. From and after the Closing,
Intek shall, whenever reasonably requested by MIC,
permit MIC to have access to all business records
turned over to Intek and/or MUSA pursuant to this
Agreement. Intek shall preserve and maintain, or
shall cause MUSA to preserve and maintain, the
64
records relating to the U.S. LMR Distribution
Business which are part of the Acquired Assets for
at least six years after the Closing.
8.4 EMPLOYEE MATTERS.
(a) On or prior to the date of the Closing, Intek
or its Affiliates will offer employment on an
"at-will basis" to the employees of MIC listed
on Schedule 8.4(a); provided that (i) the
acceptance by an employee of an offer of
employment made pursuant to this Section 8.4
shall become effective as of the Effective Date
subject to the condition subsequent that the
transactions contemplated by this Agreement
closes, and (ii) an employee who is absent from
active service on the Effective Date shall not
be offered employment by Intek unless and until
such inactive employee is capable of returning
to active service in the same capacity and
position that such employee occupied
immediately prior to his absence, provided such
return to active service occurs prior to the
second anniversary of the Effective Date.
Nothing herein shall obligate MIC to continue
the employment of any employee. Employees
receiving and accepting Intek's offer of
employment pursuant to the terms hereof shall
hereinafter be referred to as "Transferred
Employees." Intek's offer of employment to
such Transferred Employees shall provide for
the same base salary payable to such
Transferred Employee by MIC immediately prior
to such offer of employment by Intek, but on
such other terms and conditions of employment,
if any, as Intek may offer to the Transferred
Employee's in its sole discretion; PROVIDED,
HOWEVER, that Transferred Employees will be
offered a health and life insurance program
which shall not exclude coverage for conditions
existing prior to Closing (except to the extent
excluded prior to the Closing) and which, taken
as a whole, will be comparable to the health
and life insurance program now offered to such
Transferred Employees by MIC, provided that the
insurance company which currently provides MIC
with health and life insurance coverage is
willing to provide such coverage to Intek on
65
and after the date of the Closing at a cost
comparable to that paid by MIC immediately
before the Closing. Intek shall grant all
Transferred Employees credit for purposes of
eligibility and vesting under Intek's employee
benefit plans, programs, agreements or
arrangements for such Transferred Employees'
years of service as employees of MIC to the
same extent a similarly situated Intek
employee's service with Intek is taken into
account for purposes of eligibility and vesting
under such employee benefit plans, programs,
agreements or arrangements.
(b) No provision of this Section 8.4 shall create
any right in any Transferred Employee or in his
or her beneficiaries.
(c) On and after the date of Closing, MIC shall not
be liable for any expense or liability that may
arise from employment with or termination of
any Transferred Employee by Intek, provided
that nothing in this Section 8.4(c) shall limit
MIC's indemnification obligations under Section
11.1.
8.5 OWNERSHIP AND PROPRIETARY RIGHTS. Intek agrees that
it will maintain all patent, copyright, trade secret
and other similar notices of the proprietary rights
of MIC or third parties in and on all copies of the
MIC Materials not purchased as Acquired Assets under
this Agreement. Ownership of all MIC Materials and
of all intellectual property rights of MIC not
purchased by Intek as Acquired Assets under this
Agreement is and shall remain in MIC. All
intellectual property rights purchased by Intek as
Acquired Assets under this Agreement shall vest with
Intek subject to MIC's rights under the U.S.
Trademarks License Agreement.
8.6 AGREEMENTS WITH RESPECT TO OTHER TRANSACTIONS. From
and after the execution and delivery of this
Agreement, Intek will not amend, modify, supplement,
waive any rights or remedies under or grant any
consent under the Securicor Agreement (including any
schedule and exhibit thereto), or agree to do any of
the foregoing, without the prior written consent of
66
Xxxxxxxx (which consent shall not be unreasonably
withheld).
9. MUTUAL ADDITIONAL COVENANTS
9.1 EXPENSES. Except as otherwise provided in this
Agreement, each party shall bear its own legal,
accounting and other expenses incurred by it in
connection with this Agreement, and the other
agreements and transactions contemplated by this
Agreement.
9.2 PUBLIC ANNOUNCEMENT. The parties agree that no
party shall issue or cause publication of any press
release or other announcement, disclosure or public
communication with respect to this Agreement or the
transactions contemplated by this Agreement without
the consent of the others. Nothing in this
Agreement shall prohibit any party, after reasonable
efforts to consult with the others, from issuing or
causing publication of any press release,
announcement or other public communication to the
extent that such party reasonably believes that the
action is required by law in connection with
obtaining necessary approvals and consents and
complying with applicable law (e.g. any requirement
that a party hereto make any filings with the
Securities and Exchange Commission relating to this
Agreement and the transactions contemplated in this
Agreement).
9.3 COOPERATION. Neither MIC nor Intek shall
voluntarily undertake any course of action
inconsistent with satisfaction of the requirements
applicable to it under this Agreement. Intek, MIC
and Xxxxxxxx shall each promptly take all actions as
may be appropriate to enable them to perform their
obligations under this Agreement.
9.4 INTERIM OPERATIONS. During the period from the date
of this Agreement through the Option Exercise Date,
except as expressly provided in this Agreement, as
required by law, or as otherwise unanimously
approved in advance by a committee composed of Xx
Xxxxx, Xxxxxxxx Xxxxxx and Xxxx Xxxxxxxx (which
approval shall not be unreasonably withheld):
67
(a) Intek shall operate, or cause MUSA to operate,
the U.S. LMR Distribution Business.
(b) Intek shall not permit or cause MUSA to
declare, set aside, pay or make any dividend or
other distribution or payment (whether in cash,
stock or property) with respect to, or purchase
or redeem, any shares of its capital stock.
(c) Intek shall cause MUSA to maintain or cause to
be maintained, or Intek, if it owns the U.S.
Trademarks, shall maintain or cause to be
maintained, the U.S. Trademarks in full force
and effect.
(d) Neither Intek nor MUSA shall amend or otherwise
agree to or take any action effectively
amending or terminating the Securicor Loan
Agreement or the Securicor Agreement.
(e) Neither Intek nor MUSA shall use the advances
under or other proceeds of the Securicor Loan
Agreement other than for the benefit of MUSA.
9.5 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS. Intek
and MIC shall, so long as all related fees are
reasonable or such actions are expressly approved by
a committee composed of Xx Xxxxx, Xxxxxxxx Xxxxxx
and Xxxx Xxxxxxxx (which approval shall not be
unreasonably withheld):
(a) prepare and file all necessary forms and
responses as shall be required to obtain
governmental approval under Xxxx-Xxxxx-Xxxxxx
for all of the transactions contemplated herein
and in the Securicor Agreement as promptly as
possible after the Closing, with filing fees
for such filings under Xxxx-Xxxxx-Xxxxxx to be
paid by INTEK;
(b) cooperate with one another in promptly
determining whether any other filings are
required to be made or consents, waivers,
approvals, permits or authorizations are
required to be obtained under any other
applicable federal, state or foreign law or
regulation or any Contracts and in promptly
making any such filings, furnishing information
68
required in connection therewith and seeking in
a timely fashion to obtain any such consents,
waivers, approvals, permits or authorizations;
and
(c) deliver to the other parties of this Agreement
copies of all such reports and filings promptly
after they are filed. Intek shall be
responsible for all fees required to be paid in
connection with any such consents, approvals,
permits or authorizations.
9.6 PROXY STATEMENT. As soon as practicable after the
Closing, Intek shall prepare and file with the
Securities and Exchange Commission a proxy statement
and related solicitation materials relating to a
special meeting of the holders of the Intek's common
stock, $.01 par value (the "Intek Stockholders'
Meeting") concerning the Securicor Agreement and the
transactions contemplated thereby (such proxy
statement, as amended or supplemented from time to
time, being herein referred to as the "Proxy
Statement"), and shall use its best efforts to cause
the Proxy Statement to be mailed to its stockholders
at such time and in such manner as permits the Intek
Stockholders' Meeting to be held as promptly as
practicable. MIC and Xxxxxxxx shall each use its
best efforts to furnish all information as may be
reasonably requested by Intek and, in any case, as
required with respect to Intek by Regulation 14A
under the Exchange Act for inclusion in the Proxy
Statement. The information provided by Intek and
MIC, respectively, for use in the Proxy Statement
shall, on the date when the Proxy Statement is first
mailed to Intek's stockholders, and on the date of
the Intek Stockholders' Meeting, be true and correct
in all material respects and shall not omit to state
any material fact required to be stated therein or
necessary in order to make the statements contained
therein not misleading, and Intek, MIC and Xxxxxxxx
each agree promptly to correct any information
provided by it for use in the Proxy Statement which
shall have become false or misleading. Intek shall
duly call, give notice of, convene and hold the
Intek Stockholders' Meeting, for the purpose of
approving, among other matters, the transactions
contemplated under the Securicor Agreement. Intek,
through its Board of Directors, shall recommend to
69
its stockholders approval of the foregoing. The
Proxy Statement will comply as to form in all
material respects with all applicable requirements
of the Exchange Act, and no amendment or supplement
to the Proxy Statement shall be made by Intek
without the prior written approval of MIC (which
approval shall not be unreasonably withheld), except
as otherwise required by applicable laws.
9.7 HITACHI SUPPLY AGREEMENT.
(a) After the Closing, neither MIC nor Xxxxxxxx
will take any action that would result in the
termination or terminability of the Hitachi
Supply Agreement prior to its scheduled
termination date, or take any action that would
result in MUSA's failure to be included within
the definition of "Midland Affiliate" as set
forth in the Hitachi Supply Agreement;
PROVIDED, HOWEVER, that nothing herein shall
obligate MIC to satisfy any minimum purchase
requirements under the Hitachi Supply
Agreement.
(b) After the Closing, Intek will not take, nor
will it permit MUSA to take, any action that
would result in the termination or
terminability of the Hitachi Supply Agreement
prior to its scheduled termination date, and
Intek will not take, nor will it permit MUSA to
take, any action that would result in MUSA's
failure to be included within the definition of
"Midland Affiliate" as set forth in the Hitachi
Supply Agreement; PROVIDED, HOWEVER, that MIC
and Xxxxxxxx acknowledge that Intek intends to
continue to purchase 220 MHZ products from
Securicor and that Intek shall have no
obligation to satisfy any minimum purchase
requirements under the Hitachi Supply
Agreement. Intek shall, however, use its best
efforts in a commercially reasonable manner to
market and sell MIC and Hitachi products at a
volume comparable to historical levels achieved
by MIC in its conduct of the U.S. LMR
Distribution Business.
9.8 REMOVAL OF RETAINED ASSETS. Within ten (10)
Business days after the Closing, MIC shall remove
70
from the leased facility located at 0000 Xxxxxxx
Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 (the
"Facility") all inventory and other assets which are
not Acquired Assets. Intek shall cause MUSA to
provide MIC such access to the Facility as MIC shall
reasonably require to remove such assets as promptly
as practicable.
10. OPTION TO ACQUIRE CAPITAL STOCK OF MUSA.
10.1 GRANT OF OPTION. Intek hereby grants to MIC an
option (the "Option") to acquire all of the
outstanding and issued capital stock of MUSA upon
satisfaction of the requirements and payment of the
amounts set forth in Section 10.2 of this Agreement
on or before the Option Exercise Date and provided,
in any event, that all of the Obligations under the
Securicor Loan Agreement shall have been repaid in
full on or before MIC's exercise of the Option.
Notwithstanding anything to the contrary in this
Agreement, MIC may assign the option to an Affiliate
of MIC. Upon the satisfaction of the requirements
set forth in Section 10.2 Intek shall, on the Option
Exercise Date, deliver to MIC, or to such Person as
MIC shall assign the Option, as the case may be, all
of the outstanding and issued capital stock of MUSA,
free and clear of all liens and encumbrances.
10.2 OPTION EXERCISE REQUIREMENTS. For MIC to exercise
the Option, MIC or an Affiliate of MIC, must satisfy
the following on or before the Option Exercise Date:
(a) All of the Obligations then existing under the
Securicor Loan Agreement shall have been paid
in full as of the Option Exercise Date.
(b) MIC or an MIC Affiliate shall assume all of the
outstanding liabilities of MUSA incurred in
connection with its conduct of the U.S. LMR
Distribution Business; and
(c) MIC shall pay to Intek such number of shares of
the Common Stock of Intek as shall be equal to
the Purchase Price of this Agreement and shall
deliver to Intek all certificates evidencing
such shares of Common Stock, with stock powers
duly executed in blank for transfer.
71
10.3 RELEASE OF RIGHTS AND OBLIGATIONS. Except with
respect to any claim MIC may have against Intek for
a breach of Intek's obligations under Section 9.4(e)
of this Agreement (Intek's obligation not to, and
not to permit MUSA to, use any proceeds of the
Securicor Loan Agreement other than for the benefit
of MUSA), all representations, warranties and
covenants under this Agreement shall cease and
terminate immediately upon the transfer of the MUSA
shares to MIC in connection with MIC's exercise of
the Option.
10.4 DELIVERY OF MUSA CAPITAL STOCK. Upon MIC's or an
MIC Affiliate payment of the Exercise Price and the
payment in full to Securicor Communications Limited
by MIC or Intek, as the case may be, of all of the
Obligations then outstanding under the Securicor
Loan Agreement as provided in Section 10.2, Intek
shall deliver to MIC or such MIC Affiliate one or
more certificates evidencing all of the outstanding
capital stock of MUSA, free and clear of all liens
and encumbrances.
10.5 REPRESENTATIONS REGARDING MUSA CAPITAL STOCK. Intek
hereby represents and warrants to MIC that all of
the shares of capital stock of MUSA to be delivered
to MIC or its Affiliate upon exercise of the Option
will be duly authorized, validly issued, fully paid
and nonassessable and not subject to any preemptive
rights, and shall be free and clear of any liens,
encumbrances or restrictions as of the exercise of
the Option.
10.6 OPTION PERIOD. The Option shall be exercisable by
MIC or its assigns during the period commencing upon
Intek's written notice to MIC and Xxxxxxxx that the
Securicor Agreement has been terminated and
continuing through the Option Exercise Date.
11. INDEMNIFICATION
11.1 MIC'S AND XXXXXXXX' INDEMNIFICATION OBLIGATIONS.
From and after the Closing, but subject to the
conditions and limitations of this Agreement or any
other MIC Document, MIC and Xxxxxxxx shall defend,
indemnify and save Intek and its directors,
officers, employees, Affiliates, agents, successors
and assigns harmless from and against any and all
72
loss, cost, damage or expense (including attorneys'
fees), net of any tax benefits (collectively
"Damages") whatsoever resulting from or arising out
of (a) any breach or inaccuracy of any covenant,
representation or warranty or obligation of MIC
contained in this Agreement, (b) any liability or
obligation of MIC other than the Assumed
Liabilities, whether arising prior to, on or after
the Effective Date, (c) any claims by any employee
or former employee of MIC (whether or not a
Transferred Employee) arising out of the employment
or termination of employment of the employee on or
prior to the Closing Date or as a result of
transactions contemplated by this Agreement,
including any claim pursuant to the Worker
Adjustment and Retraining Notification Act, and (d)
any liability for brokerage or finder's fee or
commission claimed by any person based upon the
actions or alleged actions of MIC for or on account
of this Agreement or the transactions contemplated
hereby.
11.2 INTEK'S INDEMNIFICATION OBLIGATIONS. From and after
the Closing, but subject to the conditions and
limitations this Agreement, Intek shall defend,
indemnify and save MIC, Xxxxxxxx and their
respective directors, officers, employees,
Affiliates, agents, successors and assigns harmless
from and against any and all Damages whatsoever
resulting from or arising out of (a) any breach or
inaccuracy of any covenant, representation or
warranty of Intek contained in this Agreement or any
other Intek Document, (b) the conduct of the U.S.
LMR Distribution Business after the Closing, (c) the
Assumed Liabilities, and (d) any liability for
brokerage or finder's fee or commission claimed by
any person based upon the actions or alleged actions
of Intek for or on account of this Agreement or the
transactions contemplated hereby.
11.3 NOTICE AND OPPORTUNITY TO DEFEND.
(a) In the event that any action, suit, proceeding,
investigation, claim or demand is asserted
against or sought to be collected from an
indemnified party (a "Third Party Claim") for
which such indemnified party (each a
"Beneficiary") intends to assert a right of
73
indemnity under Section 11.1 or 11.2, the
Beneficiary shall notify the other party (the
"Indemnitor") with reasonable promptness of
such Third Party Claim, specifying, to the
extent known, the nature, circumstances and
amount of the Third Party Claim (a "Third Party
Claim Notice"). The Indemnitor shall have 14
days from its receipt of a Third Party Claim
Notice to notify the Beneficiary whether the
Indemnitor disputes the Beneficiary's right of
indemnity with respect to such Third Party
Claim and if the Indemnitor does not dispute
such right, whether or not the Indemnitor
desires to defend the Beneficiary against such
Third Party Claim.
(b) If the Indemnitor notifies the Beneficiary
within the 14-day period that the Indemnitor
does not dispute the Beneficiary's right of
indemnity and the Indemnitor desires to defend
against such Third Party Claim, then the
Indemnitor shall have the right to assume and
control, at its sole cost and expense, the
defense of such Third Party Claim by
appropriate proceedings with counsel reasonably
acceptable to the Beneficiary. Beneficiary may
participate in, but not control, any such
defense or settlement, at its sole cost and
expense.
(c) If the Indemnitor disputes the Beneficiary's
right of indemnity with respect to a Third
Party Claim, or does not dispute such right of
indemnity but fails to promptly assume and
prosecute the defense of such Third Party
Claim, then the Beneficiary shall be entitled
to assume and control the defense of such Third
Party Claim, and the Beneficiary shall be
entitled to indemnification for the cost of
such defense.
(d) The party responsible for the defense of any
Third Party Claim (the "Responsible Party")
shall, to the extent reasonably requested by
the other party, keep such other party informed
as to the status of any Third Party Claim for
which such party is not the Responsible Party,
74
including, without limitation, all settlement
negotiations and offers.
(e) Neither MIC or Xxxxxxxx, on the one hand, nor
Intek, on the other hand, shall enter into any
settlement of any Third Party Claim without the
prior written consent of the other party. The
Responsible Party shall promptly notify the
other party of each settlement offer (including
whether or not the Responsible Party is willing
to accept the proposed settlement with respect
a Third Party Claim). Such other party agrees
to notify the Responsible Party with reasonable
promptness whether or not such party is willing
to accept the proposed settlement offer. If
the party other than the Responsible Party
fails to consent to any settlement offer of a
Third Party Claim that only involves the
payment of a sum of money and has no other
consequence, such other party may continue to
contest or defend such Third Party Claim and,
in such event, the maximum total indemnity with
respect to such Third Party Claim (including
the reasonable costs and expenses of contesting
or defending such Third Party Claim incurred
after the party other than the Responsible
Party fails to consent to such settlement
offer) shall not exceed the amount of such
settlement offer.
(f) In the event that a Beneficiary has a claim for
indemnity that does not involve a Third Party
Claim (a "Direct Claim"), Intek, MIC or
Xxxxxxxx, as the case may be, (a "Claimant")
shall notify the Indemnitor of such Direct
Claim with reasonable promptness, specifying,
to the extent known, the nature, circumstances
and amount of such Direct Claim (a "Direct
Claim Notice"). If the Indemnitor notifies the
Claimant that it disputes the claim for
indemnity with respect to a Direct Claim set
forth in a Direct Claim Notice, the resolution
of such Direct Claim shall be determined in
accordance with Section 14.13.
(g) All claims for indemnification under this
Article 10 must be asserted by Intek or MIC or
Xxxxxxxx, as the case may be, prior to twelve
75
(12) months after the Closing or with respect
to any covenant, twelve (12) months after the
later of the Closing or the breach of such
covenant.
(h) For purposes of this Agreement, the amount of
damages of Intek or MIC or Xxxxxxxx with
respect to Third Party Claims and Direct Claims
shall be reduced to the extent of any
applicable insurance proceeds or other third
party recovery received by it. Intek or MIC or
Xxxxxxxx, as applicable, shall timely file
claims for insurance proceeds and/or defense
and pursue all other third party reimbursement
rights with respect to any Damages sustained by
them.
(i) Notwithstanding Sections 11.1 and 11.2 of this
Agreement, neither Intek nor MIC shall be
entitled to indemnification under this Article
11 with respect to any breach of any
representation or warranty contained in this
Agreement or any other MIC Document or Intek
Document unless and until its aggregate claims
exceeds Fifty Thousand Dollars ($50,000)
calculated on a cumulative basis and not on a
per claim basis. Once indemnifiable claims for
breaches of representations and warranties by
MIC or Intek exceed $50,000 in the aggregate,
such party shall be entitled to payment for all
amounts indemnifiable under this Section 11 for
such claims to the extent they exceed $50,000.
(j) Notwithstanding anything to the contrary
contained in this Agreement:
(1) If the Securicor Transaction does not
Close and MIC does not receive the upward
price adjustment set forth in Section
3.1(b)(2)(A) of this Agreement, then (A)
the aggregate liability of MIC and
Xxxxxxxx under Section 11.1(a) shall not
exceed $30,000, and (B) the aggregate
liability of Intek under Section 11.2(a),
other than for Damages incurred by MIC or
Xxxxxxxx as a direct result of (x) Intek's
breach of its covenants set forth in
Sections 3.2, 8.1 or 10 of this Agreement
76
(y) or any breach or inaccuracy of Intek's
representations and warranties contained
in Section 6.2(c), shall not exceed
$30,000.
(2) If the Securicor Transaction does Close
and MIC does receive the upward price
adjustment set forth in Section
3.1(b)(2)(A) of this Agreement, then (A)
the aggregate liability of MIC and
Xxxxxxxx under Section 11.1(a), other than
for Damages incurred by Intek as a direct
result of MIC's breach of its
representations and warranties set forth
in Section 6.1(f) of this Agreement and/or
its covenants set forth in Sections 2.2
and 13 of this Agreement, shall not exceed
$600,000 and (B) the aggregate liability
of Intek under Section 11.2(a), other than
for Damages incurred by MIC or Xxxxxxxx as
a direct result of Intek's breach of its
covenants set forth in Sections 3.2 and
8.1 of this Agreement, shall not exceed
$600,000.
11.4 PAYMENT OF DAMAGES. Claims to an indemnified party
under this Section 11 shall be paid in shares of
Intek's Common Stock, and the number of shares of
Intek's Common Stock to be transferred in
satisfaction of such Claims and the terms of such
transfer shall be determined by dividing the amount
of such Claims by the Applicable Average Share
Value. For purposes hereof, the "Applicable Average
Share Value" shall be equal to the average of the
Daily Closing Prices for each of the ten Business
Days immediately preceding the date on which the
amount of such Claims are determined.
11.5 EXCLUSIVE REMEDY. From and after the Closing, the
indemnification rights set forth in this Section 11
and the right to specific performance under Section
14.12 of this Agreement shall be the sole and
exclusive remedy for claims or Damages resulting
from any misrepresentation, breach or inaccuracy of
any representation, warranty, covenant or agreement
of Intek or MIC contained in this Agreement, and
none of MIC or Intek shall assert any such claim
except as provided in this Section 11; PROVIDED,
77
HOWEVER, that the foregoing shall not apply to any
claims or Damages based on fraud or a breach by any
party hereto of its obligations under Section 13 of
this Agreement.
11.6 SUBORDINATION TO SECURICOR. MIC's rights to
indemnification hereunder shall be subordinate to
Securicor's rights under the Securicor Loan
Agreement. MIC shall take no action to interfere
with Securicor's ability to exercise its rights
under the Securicor Loan Agreement with respect to
the Collateral.
12. ASSIGNMENT AND SUBLICENSE. Neither party hereto may
transfer its rights or obligations hereunder, except that
MIC may assign in part or in whole its rights and
obligations hereunder to SCL, Inc., a Delaware
corporation and the sole shareholder of MIC ("SCL, Inc.")
or to Xxxxxxxx, and SCL, Inc. or Xxxxxxxx in turn, may
assign in part or in whole its rights and obligations
hereunder to any Affiliate of SCL, Inc. or Xxxxxxxx,
MIC, SCL, Inc., Xxxxxxxx or any Affiliate of MIC or SCL,
Inc. or Xxxxxxxx may appoint distributors and
sublicensees in accordance with the U.S. Trademarks
License Agreement, and Intek may assign its rights and
obligations hereunder to MUSA pursuant to the terms and
the Intek Assignment and Assumption Agreement; PROVIDED,
HOWEVER, that no such assignment by Intek, MIC, SCL, Inc.
or Xxxxxxxx shall relieve the assignor thereof of any of
its obligations under this Agreement without the prior
written consent of MIC and Xxxxxxxx. Subject to the
foregoing, this Agreement shall be binding upon and shall
inure to the benefit of the legal representatives,
successors and assigns of the parties hereto. No
assignment of this Agreement, nor any sale, assignment or
transfer pursuant to this Section 12, shall release the
assignor from any of its duties, obligations or
liabilities under this Agreement unless the other party
shall consent to such release in writing. Each of MIC
and Xxxxxxxx acknowledges the Assignment and Assumption
Agreement and consent to such assignment pursuant to the
terms and conditions of the letter agreement among MIC,
Xxxxxxxx, Intek and MUSA dated September 20, 1996.
78
13. NON-COMPETE.
13.1 MIC/XXXXXXXX NON-COMPETE. Each of Xxxxxxxx and MIC
agrees that, for a period of three (3) years
following the Closing, neither MIC, Xxxxxxxx, nor
their respective subsidiaries will sell, distribute
or otherwise transfer LMR Products in the U.S.,
integrate LMR products from any source into LMR
systems within the U.S., or solicit or encourage any
dealer of LMR Products to modify or terminate its
arrangements with Intek regarding the distribution
of any LMR Products; PROVIDED, HOWEVER, that this
covenant shall not apply (a) with respect to the
performance by MIC or Xxxxxxxx or their respective
subsidiaries of their obligations under any
agreement which is not included in the Acquired
Assets and which is in existence on the date hereof,
as set forth on Schedule 13.1 to this Agreement, and
(b) to the extent that any law, regulation or order
of a Governmental Authority would be violated
thereby.
13.2 INTEK NON-COMPETE. Intek agrees that Intek will
not, and Intek will not permit MUSA or any other
subsidiary of Affiliate of Intek to, directly or
indirectly sell, distribute or otherwise transfer,
or to use the MIC name to sell, distribute or
transfer:
(a) any products bearing the U.S. Trademarks to
end-users outside of the U.S.; or
(b) Midland Consumer Products bearing the U.S.
Trademarks in the U.S.
14. MISCELLANEOUS
14.1 AMENDMENTS. This Agreement may be amended only by a
writing executed by the parties.
14.2 ENTIRE AGREEMENT. This Agreement amends, supersedes
and replaces in its entirety the Other Agreement.
This Agreement and the other agreements expressly
provided for in this Agreement set forth the entire
understanding of the parties to this Agreement and
supersede all prior contracts, agreements,
arrangements, communications, discussions,
79
representations and warranties, whether oral or
written, between the parties.
14.3 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the
State of New York without giving effect to its
principles of conflict of laws.
14.4 NOTICES. Any notice, request or other communication
required or permitted under this Agreement shall be
in writing and shall be deemed to have been duly
given when received if personally delivered or
after being sent by telecopy, with confirmed answer
back, or within 1 business day of being sent by
established overnight courier, to the parties at
their respective addresses set forth below:
To Xxxxxxxx: c/x Xxxxxxxx Capital Limited
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx
Xxxxxx, X0X 0X0
Attn: Xx. Xxxxx X'Xxxx
With a copy to: Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxx Xxxx Xxxxxx, Esq.
Fax: (000) 000-0000
To MIC: Midland International Corporation
c/x Xxxxxxxx Capital Limited
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx
Xxxxxx, X0X 0X0
Attn: Xx. Xxxxx X'Xxxx
With a copy to: Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxx Xxxx Xxxxxx, Esq.
Fax: (000) 000-0000
To Intek: Intek Diversified Corporation
000 Xxxx 000xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Mr. Xxxxxxxx Xxxxxx
80
With a copy to: Manatt, Xxxxxx & Xxxxxxxx PLL
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Any party by written notice to the other may change
the address or the persons to whom notices or
copies shall be directed.
14.5 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be
deemed to be an original, and all of which together
will constitute one and the same instrument.
14.6 BULK SALES Intek waives compliance by MIC with the
provisions of the so-called "bulk sales" laws of any
state.
14.7 WAIVERS. Any waiver by any party of any violation
of, breach of or default under any provision of this
Agreement or any other agreements provided for in
this Agreement, by the other party shall not be
construed as, or constitute, a continuing waiver of
such provision, or waiver of any other violation of,
breach of or default under any other provision of
this Agreement or any other agreements provided for
in this Agreement.
14.8 THIRD PARTIES. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to
confer upon or give any person or entity other than
Intek, MIC, Xxxxxxxx and their Affiliates any rights
or remedies under or by reason of this Agreement.
14.9 SCHEDULES AND EXHIBITS. The Intek Disclosure
Schedules, the MIC Disclosure Schedules and the
other Schedules and Exhibits attached to this
Agreement are incorporated in this Agreement and
shall be part of this Agreement for all purposes as
modified by the Intek Officer's Certificate or the
MIC/Xxxxxxxx Officers' Certificates, as the case may
be.
14.10 HEADINGS. The headings in this Agreement are
solely for convenience of reference and shall not
be given any effect in the construction or
interpretation of this Agreement.
81
14.11 INDEPENDENT CONTRACTOR. Each party is and shall
remain an independent contractor. Nothing in this
Agreement shall be deemed to establish a
partnership, joint venture, or agency relationship
between the parties. Neither party may obligate
or bind the other party in any manner to a third
party.
14.12 SPECIFIC PERFORMANCE. Intek and MIC acknowledge
and agree that any breach by the other party of
the foregoing provisions, including, without
limitation, any covenant of each party, may cause
the injured party irreparable injury for which
there is no adequate remedy of law. Therefore,
Intek and MIC expressly agree that MIC or Intek
shall be entitled, as the case may be, in addition
to any remedy available, injunctive or other
equitable relief to require specific performance
or prevent a breach of the foregoing provisions.
14.13 ARBITRATION. Any controversy or claim arising out
of or relating to this Agreement, or the breach
thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules
of the American Arbitration Association, and
judgment upon the award rendered by the
arbitrator(s) may be entered in any court having
jurisdiction thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
82
{Signature Page for Amended and Restated Sale of Assets and
Trademark Agreement dated as of September 19, 1996}
IN WITNESS WHEREOF, the parties have caused their duly
authorized representatives to execute this Agreement as of the
date first above written.
INTEK DIVERSIFIED CORPORATION
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
XXXXXXXX CAPITAL LIMITED
By: /s/ Xxxxx X'Xxxx
Name: Xxxxx X'Xxxx
Title: Executive Vice President
MIDLAND INTERNATIONAL CORPORATION
By: /s/ Xxxxx X'Xxxx
Name: Xxxxx X'Xxxx
Title: Executive Vice President
83
TABLE OF CONTENTS
PAGE
1. DEFINITIONS.........................................................2
1.1 "Acquired Assets"....................................2
1.2 "Additional Purchase Shares".........................2
1.3 "Affiliate"..........................................2
1.4 "Assumed Liabilities"................................2
1.5 "Bankruptcy Exception"...............................2
1.6 "Beneficiary"........................................2
1.7 "Business Day".......................................2
1.8 "Claimant"...........................................3
1.9 "Closing"............................................3
1.10 "Code"...............................................3
1.11 "Collateral".........................................3
1.12 "Common Stock".......................................3
1.13 "Computer Services Agreement"........................3
1.14 "Contracts"..........................................3
1.15 "Damages"............................................3
1.16 "Direct Claim".......................................3
1.17 "Direct Claim Notice"................................3
1.18 "Dollar".............................................3
1.19 "Effective Date".....................................3
1.20 "ERISA"..............................................3
1.21 "Escrow Agent".......................................3
1.22 "Escrow Agreement"...................................4
1.23 "Exchange Act".......................................4
1.24 "FCC"................................................4
1.25 "Governmental Entity"................................4
1.26 "Xxxx-Xxxxx-Xxxxxx Act"..............................4
1.27 "Indemnitor".........................................4
1.28 "Intek Assignment and Assumption Agreement"..........4
1.29 "Intek Disclosure Schedules".........................4
1.30 "Intek Documents"....................................4
1.31 "Intek Representative"...............................4
1.32 "Intek Officer's Certificate"........................4
1.33 "Intek Stockholders' Meeting"........................4
1.34 "Intek Subsidiaries".................................4
1.35 "IRS"................................................4
1.36 "Legal Proceeding"...................................5
1.37 "LMR Products".......................................5
1.38 "Material Adverse Change" or "Material Adverse
Effect"..............................................5
1.39 "MIC Disclosure Schedules"...........................5
1.40 "MIC Documents"......................................5
1.41 "MIC Materials"......................................5
1.42 "MIC Representative".................................5
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1.43 "MIC/Xxxxxxxx Officers' Certificates"................5
1.44 "Midland Consumer Products"..........................6
1.45 "MUSA"...............................................6
1.46 "Net Operating Losses"...............................6
1.47 "Obligations"........................................7
1.48 "Option".............................................7
1.49 "Option Exercise Date"...............................7
1.50 "Original Agreement".................................7
1.51 "Performance Guarantees".............................7
1.52 "Person".............................................7
1.53 "Prepaid Expenses"...................................7
1.54 "Product Purchasing Services Agreement"..............7
1.55 "Proxy Statement"....................................7
1.56 "Registration Rights Agreement"......................7
1.57 "Responsible Party"..................................8
1.58 "Securicor Agreement"................................8
1.59 "Securicor Loan Agreement"...........................8
1.60 "Securicor Transaction Termination Date".............8
1.61 "Securicor Transaction"..............................8
1.62 "Securities Act".....................................8
1.63 "SMR"................................................8
1.64 "Subsidiary".........................................8
1.65 "Taxes"..............................................8
1.66 "Third Party Claim"..................................9
1.67 "Third Party Claim Notice"...........................9
1.68 "To the Knowledge of the Executive Officers of
Intek"...............................................9
1.69 "To the Knowledge of the Executive Officers of
MIC".................................................9
1.70 "Transferred Employees"..............................9
1.71 "U.S."...............................................9
1.72 "U.S. LMR Distribution Business".....................9
1.73 "U.S. Trademarks"....................................9
1.74 "U.S. Trademarks License"............................9
1.75 "U.S. Trademarks License Agreement"..................10
2. SALE OF ASSETS......................................................10
2.1 SALE OF ASSETS AND U.S. TRADEMARKS...................10
2.2 ASSIGNABILITY AND CONSENTS...........................12
2.3 ASSUMED LIABILITIES..................................13
3. CONSIDERATION.......................................................17
3.1 PURCHASE PRICE.......................................17
3.2 TRANSFER TAXES.......................................19
3.3 REIMBURSEMENT OF OPERATING EXPENSES PAID AFTER THE
EFFECTIVE DATE.......................................20
3.4 COLLECTIONS OF ACCOUNTS RECEIVABLE...................21
3.5 HITACHI CREDIT ALLOCATION............................24
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4. CLOSING.............................................................24
4.1 CLOSING..............................................24
4.2 DELIVERIES AT CLOSING BY XXXXXXXX AND MIC............24
4.3 DELIVERIES AT CLOSING BY INTEK.......................25
5. CONDITIONS PRECEDENT................................................26
5.1 CONDITIONS PRECEDENT TO INTEK'S OBLIGATIONS..........26
(a) MIC/XXXXXXXX OFFICERS' CERTIFICATES...........26
(b) NO MATERIAL ADVERSE CHANGE....................27
(c) BOARD RATIFICATION............................27
(d) DELIVERIES....................................28
(e) CONSENTS, PERMITS AND GOVERNMENTAL
APPROVALS.....................................28
5.2 CONDITIONS PRECEDENT TO MIC'S OBLIGATIONS............28
(a) SECURICOR LOAN AGREEMENT......................28
(b) INTEK OFFICER'S CERTIFICATE...................28
(c) NO MATERIAL ADVERSE CHANGE....................29
(d) CAPITALIZATION................................29
(e) DELIVERIES....................................29
(f) CONSENTS, PERMITS AND GOVERNMENTAL
APPROVALS.....................................29
(g) INSTRUMENTS OF ASSUMPTION.....................30
6. REPRESENTATIONS AND WARRANTIES......................................30
6.1 REPRESENTATIONS AND WARRANTIES OF MIC AND
XXXXXXXX.............................................30
(a) ORGANIZATION, STANDING, POWER AND
AUTHORITY.....................................30
(b) BUSINESS IN ORDINARY COURSE...................31
(c) CONTRACTS.....................................32
(d) CONSENTS AND APPROVALS; NO VIOLATION..........33
(e) ACQUIRED ASSETS...............................34
(f) INTANGIBLE PROPERTY...........................35
(g) BROKERS, FINDERS AND AGENTS...................35
(h) EMPLOYEE BENEFIT PLANS........................36
(i) LITIGATION, PRODUCT LIABILITY.................37
(j) SUPPLIERS AND CUSTOMERS.......................37
(k) INFORMATION IN DISCLOSURE DOCUMENTS...........38
(l) FINANCIAL STATEMENTS..........................38
(m) REAL PROPERTY.................................39
(n) TANGIBLE PERSONAL PROPERTY....................40
(o) COMPLIANCE WITH LAWS..........................41
(p) FCC LICENSES..................................41
(q) DISCLAIMERS OF MIC............................42
6.2 REPRESENTATIONS AND WARRANTIES OF INTEK..............42
(a) ORGANIZATION, STANDING, POWER AND
AUTHORITY.....................................42
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(b) CAPITALIZATION................................43
(c) SHARES ISSUED TO MIC..........................44
(d) SUBSIDIARIES..................................45
(e) BUSINESS IN ORDINARY COURSE...................46
(f) CONSENTS AND APPROVALS; NO VIOLATION..........46
(g) BROKERS, FINDERS AND AGENTS...................47
(h) EMPLOYEE RELATIONS............................47
(i) EMPLOYEE PLANS................................48
(j) MATERIAL CONTRACTS............................49
(k) INTEK CORPORATE ACTION........................50
(l) INFORMATION IN DISCLOSURE DOCUMENTS...........50
(m) FINANCIAL STATEMENTS..........................51
(n) ENVIRONMENTAL MATTERS.........................51
(o) LABOR RELATIONS...............................55
(p) REAL ESTATE...................................55
(q) LITIGATION....................................56
(r) LICENSES......................................56
(s) UNITS IN SERVICE..............................58
(t) CONTRACTS, LEASES AND SITE LICENSES...........58
(u) RELATED PARTY TRANSACTIONS....................59
(v) COMPLIANCE WITH LAWS..........................59
7. COVENANTS OF MIC....................................................59
7.1 MIC'S REPRESENTATION LETTER..........................59
7.2 SATISFACTION OF MIC OBLIGATIONS POST-CLOSING.........62
(a) RETURN OF ACQUIRED ASSETS.....................62
(b) RETURN OF MUSA PROPERTY.......................62
8. COVENANTS OF INTEK..................................................62
8.1 CONFIDENTIALITY OF INFORMATION.......................62
8.2 REPLACEMENT OF PERFORMANCE BONDS.....................64
8.3 RIGHTS OF INSPECTION.................................64
8.4 EMPLOYEE MATTERS.....................................65
8.5 OWNERSHIP AND PROPRIETARY RIGHTS.....................66
8.6 AGREEMENTS WITH RESPECT TO OTHER TRANSACTIONS........66
9. MUTUAL ADDITIONAL COVENANTS.........................................67
9.1 EXPENSES.............................................67
9.2 PUBLIC ANNOUNCEMENT..................................67
9.3 COOPERATION..........................................67
9.4 INTERIM OPERATIONS...................................67
9.5 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS...........68
9.6 PROXY STATEMENT......................................69
9.7 HITACHI SUPPLY AGREEMENT.............................70
9.8 REMOVAL OF RETAINED ASSETS...........................70
10. OPTION TO ACQUIRE CAPITAL STOCK OF MUSA.........................71
10.1 GRANT OF OPTION......................................71
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10.2 OPTION EXERCISE REQUIREMENTS.........................71
10.3 RELEASE OF RIGHTS AND OBLIGATIONS....................72
10.4 DELIVERY OF MUSA CAPITAL STOCK.......................72
10.5 REPRESENTATIONS REGARDING MUSA CAPITAL STOCK.........72
10.6 OPTION PERIOD........................................72
11. INDEMNIFICATION.................................................72
11.1 MIC'S AND XXXXXXXX' INDEMNIFICATION
OBLIGATIONS..........................................72
11.2 INTEK'S INDEMNIFICATION OBLIGATIONS..................73
11.3 NOTICE AND OPPORTUNITY TO DEFEND.....................73
11.4 PAYMENT OF DAMAGES...................................77
11.5 EXCLUSIVE REMEDY.....................................77
11.6 SUBORDINATION TO SECURICOR...........................78
12. ASSIGNMENT AND SUBLICENSE.......................................78
13. NON-COMPETE.....................................................79
13.1 MIC/XXXXXXXX NON-COMPETE.............................79
13.2 INTEK NON-COMPETE....................................79
14. MISCELLANEOUS...................................................79
14.1 AMENDMENTS...........................................79
14.2 ENTIRE AGREEMENT.....................................79
14.3 GOVERNING LAW........................................80
14.4 NOTICES..............................................80
14.5 COUNTERPARTS.........................................81
14.6 BULK SALES...........................................81
14.7 WAIVERS..............................................81
14.8 THIRD PARTIES........................................81
14.9 SCHEDULES AND EXHIBITS...............................81
14.10 HEADINGS.............................................81
14.11 INDEPENDENT CONTRACTOR...............................82
14.12 SPECIFIC PERFORMANCE.................................82
14.13 ARBITRATION..........................................82
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SCHEDULES AND EXHIBITS
EXHIBITS
Exhibit A Computer Services Agreement
Exhibit B Escrow Agreement
Exhibit C Intek Assignment and Assumption Agreement
Exhibit D Product Purchase Services Agreements
Exhibit E Registration Rights Agreement
Exhibit F U.S. Trademarks License Agreement
Exhibit G Assignment of United States Trademark
Rights
Exhibit H Form of Opinion of MIC's Counsel
Exhibit I Form of Opinion of Intek's Counsel
SCHEDULES
Schedule 1.68 Executive Officers of Intek
Schedule 1.69 Executive Officers of MIC
Schedule 1.73 U.S. Trademarks
Schedule 2.1(c) Contracts
Schedule 2.1(e) Other Assets and Inventory
Schedule 2.1(g) Real Property Leases
Schedule 2.1(j) Prepaid Expenses
Schedule 2.3(a)(3) Accrued Employee Liabilities as of the
Effective Date
Schedule 2.3(a)(8) Intek Purchase Orders
Schedule 2.3(a)(10) LMR Dealer Co-op Totals
Schedule 3.3 Reimbursement Schedule
Schedule 8.2 Performance Bonds / Letters of Credit /
Guaranties
Schedule 8.4(a) Transferred Employees
Schedule 13.1 MIC Retained Agreements
MIC DISCLOSURE SCHEDULES
Schedule 6.1(a) MIC - Organization and Standing; Power
and Authority
Schedule 6.1(b) MIC - Exceptions to Business in Ordinary
Course
Schedule 6.1(c) MIC - Compliance with Contracts
Schedule 6.1(d) MIC - Consents and Approvals; No Violation
Schedule 6.1(e) MIC - Exceptions to Title
Schedule 6.1(f) MIC - Intellectual Property Matters
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Schedule 6.1(h)(3) MIC - Compliance with Employee Benefits
Plans
Schedule 6.1(i) MIC - Legal Proceedings
Schedule 6.1(j) MIC - Suppliers and Customers
Schedule 6.1(n) MIC - Personal Property Leases
Schedule 6.1(p) MIC - FCC Licenses
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INTEK DISCLOSURE SCHEDULES
Schedule 6.2(a) Intek - Organization and Standing; Power
and Authority
Schedule 6.2(b) Intek - Options, Warrants
Schedule 6.2(d) Intek - Subsidiaries
Schedule 6.2(e) Intek - Exceptions to Business in
Ordinary Course
Schedule 6.2(f) Intek - Consents, Approvals; No
Violations
Schedule 6.2(h) Intek - Employee Relations
Schedule 6.2(i) Intek - Employee Plans
Schedule 6.2(j) Intek - Material Contracts
Schedule 6.2(n) Intek - Environmental Matters
Schedule 6.2(o) Intek - Labor Relations
Schedule 6.2(p) Intek - Real Property Matters
Schedule 6.2(q) Intek - Legal Proceedings
Schedule 6.2(r) Intek - FCC Licenses
Schedule 6.2(s) Intek - Units In Service
Schedule 6.2(t) Intek - Contracts, Leases and Site
Licenses
Schedule 6.2(u) Intek - Related Party Transactions
Schedule 6.2(v) Intek - Compliance with Laws
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