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EXHIBIT 10.17
ASSET PURCHASE AGREEMENT
BY AND AMONG
CONDOR HOLDINGS, INC.,
A DELAWARE CORPORATION ("NEWCO" OR "PURCHASER"),
BEARCOM, INC.,
A TEXAS CORPORATION ("BEARCOM"),
CONDOR COMMUNICATIONS, INC.,
A FLORIDA CORPORATION ("CONDOR" OR "SELLER"),
AND
XXXXXXX XXXXXXXXXX
("SHAREHOLDER")
2
DATED AS OF MARCH 31, 1998
TABLE OF CONTENTS
Page
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ARTICLE 1
PURCHASE AND SALE OF ASSETS AND SHAREHOLDER'S PROPERTY
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SECTION 1.1 Purchase and Sale by Seller . . . . . . . . . . . . . . 1
SECTION 1.2 Related Transactions . . . . . . . . . . . . . . . . . . 2
SECTION 1.3 Assumption of Liabilities . . . . . . . . . . . . . . . 3
SECTION 1.4 Purchase Price . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.5 Closing . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.6 Post-Closing Adjustments . . . . . . . . . . . . . . . . 3
SECTION 1.7 Further Assurances . . . . . . . . . . . . . . . . . . . 4
SECTION 1.8 Condor Business Unit Operations . . . . . . . . . . . . 4
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDER
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SECTION 2.1 Corporate Existence and Power; Ownership . . . . . . . . 4
SECTION 2.2 Authority Relative to this Agreement . . . . . . . . . . 5
SECTION 2.3 No Conflicts, Consents . . . . . . . . . . . . . . . . . 5
SECTION 2.4 Charter Documents and Corporate Records . . . . . . . . 5
SECTION 2.5 Title . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.6 Financial Information . . . . . . . . . . . . . . . . . 5
SECTION 2.7 Liabilities . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.8 Seller Receivables . . . . . . . . . . . . . . . . . . . 6
SECTION 2.9 Absence of Certain Changes . . . . . . . . . . . . . . . 6
SECTION 2.10 Shareholder's Property and Seller's Property . . . . . . 7
SECTION 2.11 Contracts . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.12 Inventories . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.13 Intangible Property . . . . . . . . . . . . . . . . . . 8
SECTION 2.14 Claims and Proceedings . . . . . . . . . . . . . . . . . 8
SECTION 2.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.16 Employee Related Matters . . . . . . . . . . . . . . . . 9
SECTION 2.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.18 Compliance with Laws . . . . . . . . . . . . . . . . . . 9
SECTION 2.19 Licenses . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.20 Environmental Matters . . . . . . . . . . . . . . . . . 10
SECTION 2.21 Finders Fees . . . . . . . . . . . . . . . . . . . . . . 10
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SECTION 2.22 Fees, Commissions and Royalties . . . . . . . . . . . . . . 10
SECTION 2.23 Related Parties . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.24 Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.25 Customers . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.26 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BEARCOM AND NEWCO
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SECTION 3.1 Authority Relative to this Agreement . . . . . . . . . . . . 11
SECTION 3.2 No Conflicts; Consents . . . . . . . . . . . . . . . . . . . 11
SECTION 3.3 Corporate Existence and Power . . . . . . . . . . . . . . . 12
SECTION 3.4 Charter Documents and Corporate Records . . . . . . . . . . 12
SECTION 3.5 Financial Information . . . . . . . . . . . . . . . . . . . 12
SECTION 3.6 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.7 Absence of Certain Changes . . . . . . . . . . . . . . . . . 13
SECTION 3.8 Claims and Proceedings . . . . . . . . . . . . . . . . . . . 13
SECTION 3.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.10 Compliance with Laws . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.11 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.12 Environmental Matters . . . . . . . . . . . . . . . . . . . 13
SECTION 3.13 Finders Fees . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.14 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 4
COVENANTS AND AGREEMENTS OF SELLER AND SHAREHOLDER
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SECTION 4.1 Confidentiality . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 5
COVENANTS AND AGREEMENTS OF PURCHASER
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SECTION 5.1 Confidentiality . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 6
DELIVERY OF CLOSING DOCUMENTS
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SECTION 6.1 Delivery of Closing Documents by Bearcom and Newco . . . . . 15
SECTION 6.2 Delivery of Closing Documents by Seller and Shareholder . . 16
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ARTICLE 7
INDEMNIFICATION
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SECTION 7.1 Survival of Representations and Warranties . . . . . . . . . 17
SECTION 7.2 Obligation of Seller to Indemnify . . . . . . . . . . . . . 18
SECTION 7.3 Obligation of BearCom and Newco to Indemnify . . . . . . . . 18
SECTION 7.4 Notice and Opportunity to Defend Third Party Claims . . . . 18
SECTION 7.5 Limits on Indemnification . . . . . . . . . . . . . . . . . 19
SECTION 7.6 Sole and Exclusive Remedy . . . . . . . . . . . . . . . . . 19
SECTION 7.7 Right of Offset . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 8
TERMINATION
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INTENTIONALLY LEFT BLANK
ARTICLE 9
MISCELLANEOUS
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SECTION 9.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 9.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 9.4 Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies . . . . . . . . . . . . . . . . . . 21
SECTION 9.5 Governing Law; Venue . . . . . . . . . . . . . . . . . . . . 21
SECTION 9.6 Binding Effect; No Assignment . . . . . . . . . . . . . . . 21
SECTION 9.7 Severability . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.9 Third Parties . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.10 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 10
DEFINITIONS
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SECTION 10.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 10.2 Interpretation . . . . . . . . . . . . . . . . . . . . . . . 26
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of March 31, 1998 (the "Agreement")
by and among CONDOR COMMUNICATIONS, INC., a Florida corporation ("Condor" or
"Seller"), XXXXXXX XXXXXXXXXX ("Shareholder"), BEARCOM, INC., a Texas
corporation ("BearCom") and CONDOR HOLDINGS, INC., a Delaware corporation and a
wholly-owned subsidiary of BearCom ("Newco" or "Purchaser"). Definitions of
capitalized terms used in Articles 1 through 9 herein which are not otherwise
defined are set forth in Article 10.
W I T N E S S E T H:
WHEREAS, Seller is a Florida corporation engaged in the business of
distributing electronic communications equipment and desires to sell all or
substantially all of its assets and to assign certain of its liabilities to
Purchaser upon the terms and conditions set forth in this Agreement; and
WHEREAS, Shareholder is an individual who desires to sell all of his
interest in the Shareholder's Property (hereinafter defined) to Purchaser upon
the terms and conditions set forth in this Agreement.
WHEREAS, Purchaser is desirous of purchasing all or substantially all
of the assets of Seller and assuming certain liabilities of Seller, as provided
herein, and purchasing the Shareholder's Property upon the terms and conditions
set forth in this Agreement; and
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements and covenants contained herein, and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS AND SHAREHOLDER'S PROPERTY
SECTION 1.1 PURCHASE AND SALE BY SELLER. On the Closing Date (as
hereinafter defined), Seller shall sell, convey, transfer, assign and deliver
to Purchaser free and clear of all Liens, and Purchaser shall purchase and
accept, for the consideration hereinafter provided, all of the assets of Seller
described herein (the "Assets"), wherever located and whether or not shown on
the books of account or other records of Seller, specifically including, but
without limitation, the following:
(a) EQUIPMENT. The equipment, machinery, furniture,
fixtures, vehicles, leasehold improvements, materials, supplies, consumable
items and other assets identified on Schedule 1.1(a) hereto;
(b) INVENTORY. The Inventory (including finished
products, supplies, materials and work-in- progress) on hand on the Closing
Date;
(c) RECEIVABLES. The Receivables on hand on the Closing
Date;
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(d) REAL ESTATE. That certain real property located at
0000 X.X. 00xx Xxxxxxx, Xxxxx, Xxxxxxx 00000 owned by Seller and more
particularly described on Schedule 1.1(d) attached hereto ("Seller's Property");
(e) MISCELLANEOUS ASSETS. Except for those assets
specifically identified on Schedule 1.1(e), which are not being sold to
Purchaser, all of the remaining tangible and intangible assets of Seller,
whether by specific or general reference, including, without limitation, all
assets of Seller not otherwise identified in paragraphs (a), (b) or (c) above,
wherever located and whether or not on the books of account or other records,
including, without limitation:
(i) all furniture, fixtures, equipment,
materials, leasehold improvements, supplies and consumable items not otherwise
identified on Schedule 1.1(a);
(ii) all patents, approvals, trademarks (either
registered or at common law), service marks (either registered or at common
law), trade names, service names, labels and copyrights, and all registrations
and applications for any of the foregoing, and all technical processes,
compilations, formulations, formulas and/or other such information related to
or connected with the Business of Seller, and all processes, manufacturing or
marketing procedures, formulae, vendor, and supplier, distributor and customer
lists, files and records of Seller (collectively hereinafter referred to as
"Intellectual Property");
(iii) all contract rights of Seller, including,
without limitation, contracts or orders from customers or distributors or
vendors for purchase, license or delivery of products or services; all other
agreements to which Seller is a party or by which Seller is bound and pursuant
to which any party other than Seller may use or otherwise exercise any rights
in the Intellectual Property; maintenance agreements and other leases for
leased equipment and real property (collectively referred to as "Contract
Rights");
(iv) copies of all books and records, wherever
located; provided, that, Seller shall be entitled to retain originals or copies
of books and records as necessary or appropriate to enable Seller to administer
its assets and liabilities which are not being transferred or assigned pursuant
to this Agreement;
(v) the exclusive use of the name "Condor
Communications" and all other tradenames used by Seller;
(vi) to the extent assignable, any and all other
assets, properties and business of Seller of any kind, character and
description, whether tangible or intangible, real, personal or mixed,
including, but not limited to: telephone numbers, fax numbers and listings,
maintenance operations, rights and claims to refunds, prepaid expenses,
cooperative advertising allowances, customer deposits, bank accounts, deposits
by Seller with any other person, policies and procedures, discounts and
adjustments of every kind, express or implied warranties, and all other
information and records (including, without limitation, personnel records to
the extent not prohibited by law) relating to the Business of Seller.
PURCHASER AND SALE BY SHAREHOLDER. Shareholder shall sell, convey,
transfer, assign and deliver to Purchaser free and clear of all Liens, and
Purchaser shall purchase and accept for the consideration hereinafter provided,
that certain real property located and owned by Shareholder and more
particularly described in Schedule 1.1 attached hereto (the "Shareholder's
Property"), including all rights appurtenant thereto and all improvements
located thereon.
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SECTION 1.2 RELATED TRANSACTIONS.
(a) The parties acknowledge and agree that concurrent with the
Closing, the Asset Purchase Agreement ("Condor Ltd. Acquisition Agreement"),
pursuant to which Purchaser or its designee will acquire from Condor
Communications, Ltd., a British Virgin Islands corporation ("Condor Ltd."), a
distributor of Seller's products, all of Condor Ltd.'s stock in Condor
Telecomunicaciones, S.A., a Venezuelan corporation and certain accounts
receivable and inventory of Condor, Ltd. ("Condor S.A."), will close.
(b) Seller and Shareholder shall use their best efforts to cause
all of the assets of Condor Prague, S.R.O., a Czech Republic corporation
("Condor Prague") to be transferred to a subsidiary of Purchaser within thirty
(30) days. Seller and Shareholder agree that the asset purchase agreement
("Condor Prague Acquisition Agreement") to be prepared with respect to such
transaction shall be to Purchaser's reasonable satisfaction and shall contain
such representations, warranties and covenants as are applicable to Condor,
Ltd. and Condor S.A. pursuant to the Condor Ltd. Acquisition Agreement. The
parties agree that in the event the transactions contemplated by the Condor
Prague Acquisition Agreement are closed, an amount of the Purchase Price equal
to the net book value of the assets of Condor Prague, as mutually agreed to by
the parties, shall be allocated to the purchase price of Condor Prague
(c) The transactions contemplated by the foregoing provisions of this
Section 1.2 may collectively be referred to as the "Related Transactions" or
individually as a "Related Transaction."
SECTION 1.3 ASSUMPTION OF LIABILITIES. Purchaser shall assume on
and as of the Closing Date all of the obligations and liabilities of Seller set
forth on Schedule 1.3 (the "Assumed Liabilities"). All of the obligations and
liabilities of Seller which are not set forth on Schedule 1.3 shall remain the
sole responsibility of Seller (hereinafter referred to as "Retained
Liabilities"). Purchaser shall have no responsibility or obligation for any
Retained Liabilities.
SECTION 1.4 PURCHASE PRICE. The purchase price (the "Purchase
Price Assets") for the Assets payable at Closing will be $6,525,000 United
States Dollars, to be paid at Closing by wire transfer, in immediately available
funds, to an account designated by Seller. The Purchase Price Assets may be
upwardly adjusted in accordance with the provisions of Section 1.6 below. The
Purchase Price Assets will be allocated and may be reallocated (by mutual
agreement of Seller, Shareholder and BearCom at or prior to Closing), by and
among the Assets. The purchase price (the "Purchase Price Shareholder
Property") for the Shareholder's Property payable at Closing will be $275,000
United States Dollars to be paid at Closing by wire transfer in immediately
available funds to an account designated by Shareholder.
SECTION 1.5 CLOSING. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place simultaneously
with the execution of this Agreement at the offices of Cohen, Berke, Xxxxxxxxx,
Xxxxxx & Kondell, P.A., 0000 Xxxxx Xxxxxxxx Xxxxx, 00xx Xxxxx, Xxxxx, Xxxxxxx
00000. The date of the Closing shall be referred to as the "Closing Date."
SECTION 1.6 POST-CLOSING ADJUSTMENTS. The Purchase Price Assets
shall be subject to the following post- Closing adjustments with respect to
EBITDA attributable to Condor Business Unit Operations for the first
twenty-four (24) complete calendar months following the Closing:
(a) With respect to the twelve (12) month period
beginning with the first complete calendar month immediately following the
Closing, Seller shall be entitled to receive from Newco a cash sum
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equal to: (i) fifty (50%) percent of the first $3,000,000 of EBITDA
attributable to Condor Business Unit Operations for such twelve (12) month
period; and (ii) twenty-five percent (25%) of EBITDA in excess of $3,000,000
attributable to Condor Business Unit Operations for such twelve month period;
if but only if EBITDA for such twelve (12) month period shall be $2,000,000 or
greater;
(b) With respect to the twelve (12) month period
immediately following the period of time as set forth in Section 1.6(a) above,
Seller shall be entitled to receive from Newco a cash sum equal to (i) fifty
(50%) percent of the first $3,000,000 of EBITDA attributable to Condor Business
Unit Operations for such twelve (12) month period; and (ii) twenty-five (25%)
percent of EBITDA in excess of $3,000,000 attributable to Condor Business Unit
Operations for such twelve month period; if, but only if, EBITDA for such
twelve month period shall be $2,000,000 or greater;
(c) Payments to Seller of cash sums due for each
of the twelve-month periods described in clauses (a) and (b) above will be made
in cash within forty-five (45) days after the end of each such period. All
past due sums payable to Seller pursuant to the terms of this Agreement or
otherwise shall accrue interest at a daily compounded rate equal to 1.0% per
month.
SECTION 1.7 FURTHER ASSURANCES. If at any time after the
Closing, BearCom, Purchaser, Seller or Shareholder shall consider or be advised
that any further documents, instruments or assurances in law or any other acts
are necessary, desirable or proper to carry out the intent and accomplish the
purposes of this Agreement, or the Related Transactions, the other agrees that
its proper officers and directors will execute and deliver all documents,
instruments and assurances in law and do all acts necessary, desirable or
proper to carry out the intent and accomplish the purposes of this Agreement,
and that its proper officers and directors are fully authorized to take any and
all such action.
SECTION 1.8 CONDOR BUSINESS UNIT OPERATIONS. Except with the
prior written consent of Shareholder, for the period commencing on the Closing
Date through the last day of the first twenty-four (24) complete calendar month
period following the Closing, BearCom and Purchaser will take no action with
the purpose of reducing the amounts payable to Seller pursuant to Section 1.6
hereof, and (i) will maintain Condor Business Unit Operations exclusively
within Newco and not merge or consolidate same with any other business units or
divisions of BearCom or any other entity (except for the consolidation of
duplicative and non-revenue generating administrative functions resulting in
increased EBITDA); (ii) will not sell, assign, transfer or otherwise convey any
portion of the Condor Business Unit Operations to any person, whether by sale
of assets other than in the ordinary course of business, issuance or sale of
stock, by merger or otherwise; (iii) will not take any action to discontinue,
scale-back, impair or otherwise hinder the Condor Business Unit Operations, in
any manner whatsoever, whether by diversion or usurpation of its business
opportunities or prospects, the allocation of excessive or non-direct general,
administrative, overhead or other expenses to Newco or the Condor Business Unit
Operations; (iv) will employ Xxxxxxx Xxxxxxxxxx, as president and chief
executive officer of Newco, with complete authority over the management of the
Condor Business Unit Operations, subject only to the direction of Newco's board
of directors; provided such direction is exercised in good faith, and is not
taken with the purpose of reducing the amounts payable to Seller pursuant to
Section 1.6 hereof; or (v) will not charge or allocate or permit to be charged
or allocated any general, administrative, overhead or other expenses to Newco
or the Condor Business Unit Operations.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDER
Seller and Shareholder, jointly and severally, represent and warrant
to BearCom and Newco as of the date of this Agreement that:
SECTION 2.1 CORPORATE EXISTENCE AND POWER; OWNERSHIP. Seller is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all requisite corporate
power and authority required to carry on its business and to own and lease the
properties it owns and leases. Seller is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not, individually or in the aggregate, have a
material adverse effect on its Assets, financial condition, prospects or the
results of operations. Shareholders are the sole record and beneficial owners
of all of the outstanding capital stock of Seller, free and clear of all Liens,
and have been the sole owners since Seller was formed. Except as identified on
Schedule 2.1, Seller does not have any direct or indirect ownership or other
equity or profit sharing interest in any other entity related to the Business
of Seller.
SECTION 2.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Seller and
Shareholder have full power, capacity and authority to execute and deliver this
Agreement and each other Transaction Document to which it is a party and to
consummate the transactions contemplated hereby and thereby (the "Contemplated
Transactions"). The execution and delivery of this Agreement and the
consummation of the Contemplated Transactions to which Seller or Shareholder is
a party have been duly and validly authorized by Seller and Shareholder and no
other proceedings on the part of Seller or Shareholder are necessary to
authorize the execution and delivery by Seller and Shareholder of this
Agreement or the consummation of the Contemplated Transactions to which Seller
or Shareholder is a party. This Agreement and the other Transaction Documents
to which Seller or Shareholder is a party have been duly and validly executed
and delivered by Seller or Shareholder, as applicable, and (assuming the valid
execution and delivery thereof by the other parties thereto) constitute the
legal, valid and binding agreements of Seller or Shareholder, as the case may
be, enforceable against such party in accordance with their respective terms.
SECTION 2.3 NO CONFLICTS, CONSENTS. Neither the execution,
delivery nor performance by Seller or Shareholder of this Agreement nor the
other Transaction Documents to which it or he is a party nor the consummation
of the Contemplated Transactions, will (i) violate any provision of the
Articles of Incorporation or By-laws (or comparable instruments) of Seller;
(ii) require Seller or Shareholder to obtain any consent, approval or action of
or waiver from, or make any filing with, or give any notice to, any
Governmental Body or any other person except as set forth on Schedule 2.3 (the
"Required Consents"); (iii) if the Required Consents are obtained prior to
Closing, violate, conflict with or result in a breach or default under (after
the giving of notice or the passage of time or both), or permit the termination
of, any Contract of a type required to be listed on Schedule 2.11 to which
Seller or Shareholder is a party, or result in the creation of any Lien upon
any of the Assets or the Shareholder's Property pursuant to the terms of any
such Contract; or (iv) if the Required Consents are obtained prior to Closing,
violate any Law or Order of any Governmental Body against, or binding upon,
Seller or upon its Assets or Shareholder's Property.
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SECTION 2.4 CHARTER DOCUMENTS AND CORPORATE RECORDS. Seller has
heretofore delivered to BearCom true and complete copies of the Articles of
Incorporation and Bylaws, or comparable instruments, of Seller as in effect on
the date hereof.
SECTION 2.5 TITLE. Except as set forth on Schedule 2.5, Seller
has good and valid record and marketable title to, and has the full right to
sell, convey, transfer, assign and deliver to Purchaser, all of the Assets free
and clear of any Liens of any kind or nature, and there are no filings in any
registry of deeds in any jurisdiction or under any Uniform Commercial Code or
any similar statute in any jurisdiction showing Seller as debtor, which create
or perfect or which purport to create or perfect any Lien on any of the Assets.
The Assets are all of the assets that are necessary for Purchaser to operate
the Business of Seller in the manner Seller has been operating it.
SECTION 2.6 FINANCIAL INFORMATION. Seller has previously
furnished to BearCom true and complete copies of (i) Seller's audited financial
statement at and for the calendar years ended December 31, 1996 (the "1996
Financial Statement") and Seller's unaudited financial statement at and for the
calendar year ended December 31, 1995 (the "1995 Financial Statement")
(collectively the "Annual Statements"), (ii) Seller's unaudited financial
statements at and for each calendar month during 1997 and through December 31,
1997 (the "Interim Statements"), and (iii) all management letters and attorney
audit response letters issued in connection with Seller's financial statements
for each of the periods comprising the Annual Statements and Interim
Statements. The Annual Statements and Interim Statements have been prepared in
accordance with GAAP consistently applied as set forth in the notes thereto
(except, with respect to the 1995 Financial Statement and the Interim
Statements, as regards footnote disclosure and normal year end adjustments) and
the 1996 Financial Statement was audited by Seller's regularly engaged
certified public accountants. Each Annual Statement and Interim Statement
presents fairly the financial position of Seller as of its date, and its
earnings, changes in stockholders' equity and cash flow for the periods then
ended. Each delivered balance sheet included within the Annual Statements and
the Interim Statements fully sets forth all Assets and Liabilities of Seller
existing as of its date which, under GAAP, should be set forth therein, and
each delivered statement of earnings included within the Annual Statements and
the Interim Statements sets forth the items of income and expense of Seller
which should appear therein under GAAP. All financial and accounting books,
ledgers, accounts and official and other records relating to Seller have been
properly and accurately kept and completed in all material respects. All
allowances and reserves shown in the Annual Statements and the Interim
Statements are appropriate, reasonable and sufficient to provide for expenses
and losses thereby contemplated including the reserve for all Taxes payable.
Seller is not liable upon or with respect to, or obligated to provide funds in
respect of or under any guarantee. Except as identified on Schedule 2.6,
Seller does not know of any basis for the assertion of any other Claims or
Liabilities of any nature or in any amount which could have a MATERIAL ADVERSE
EFFECT on Seller, the Assets or Business. There were not any material items of
revenue or expense which were unusual or of a nonrecurring nature reflected in
the Annual Statements or the Interim Statements.
SECTION 2.7 LIABILITIES. Except as and to the extent reflected
in the interim balance sheet of Seller (the "Latest Balance Sheet") at December
31, 1997 (the "Latest Balance Sheet Date") referred to in Section 2.6, or as
described in Schedule 2.7, Seller did not have, as of the Latest Balance Sheet
Date, any material Liabilities or obligations (other than obligations of
continued performance under Contracts and other commitments and arrangements
entered into in the ordinary course of business). Except as described in
Schedule 2.7, and except for current Liabilities for trade or business
obligations incurred in the ordinary course of the Business of Seller,
consistent with past practice, and Liabilities reflected on any balance sheet
included in the Interim Statements, since the Latest Balance Sheet Date (i)
there has been no material adverse change
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in the Assets, Liabilities, Business condition or prospects of Seller; (ii)
except as otherwise disclosed herein, no factor exists or is threatened which
could reasonably be expected to cause such a material adverse change in the
future; and (iii) no dividends or other distributions have been made upon any
shares of capital stock of Seller nor have any shares of capital stock of
Seller been redeemed, retired, purchased or acquired for value by Seller.
SECTION 2.8 SELLER RECEIVABLES. Schedule 2.8 sets forth a true
and complete list of Receivables as of the date hereof. Except as set forth in
Schedule 2.8, to the knowledge of Seller, all Receivables of Seller are valid
and enforceable claims, constitute bona fide Receivables resulting from the
sale of goods and services in the ordinary course of the Business of Seller,
are not subject to any defenses, offsets, returns, allowances or credits of any
kind, and are collectible, subject to reserves for bad debt, as adjusted from
time to time in the ordinary course of business. Except as set forth on
Schedule 2.8, none of the obligors of the Receivable have given notice that
they will or may refuse to pay the full amount thereof or any portion thereof.
SECTION 2.9 ABSENCE OF CERTAIN CHANGES. Since the Latest Balance
Sheet Date, except as set forth in Schedule 2.9, Seller has conducted its
Business in the ordinary course consistent with past practices and there has
not been: (i) any material adverse change in the Assets; (ii) any material
damage, destruction or other casualty loss, condemnation or other taking
affecting the Assets to the extent material to Seller; or (iii) any change in
any method of accounting or accounting practice by Seller. Except as described
on Schedule 2.9, since December 31, 1997, Seller has not (i) declared, paid or
set aside for payment any dividend or distribution to the Shareholders, (ii)
made any loan or advance to any Shareholder, officer, director or employee,
(iii) redeemed, purchased or otherwise acquired or sold or issued any of its
capital stock or any right to acquire such capital stock, (iv) increased the
compensation of or paid or accrued any bonus to any employee of Seller or its
Affiliates other than in accordance with past established practices or (v) paid
any management or consulting fee or any other amounts to any Shareholder or any
other person related to or affiliated with Seller or any Shareholder.
SECTION 2.10 SHAREHOLDER'S PROPERTY AND SELLER'S PROPERTY.
(a) Schedule 2.10A sets forth a list and description of
all real property owned by Seller (the "Seller's Property"), which Seller's
Property and Shareholder's Property constitute all of the real property owned,
used or occupied by Seller.
(b) Seller has good and marketable title to (or valid
leasehold interest in) all Assets and Seller's Property, free and clear of all
Liens except as disclosed in Schedule 2.5 or 2.10B and Shareholder has good and
marketable title to Shareholder's Property, free and clear of all liens except
as described in Schedule 2.5 or 2.10B.
(c) All of the fixed Assets owned or leased by Seller are
in good condition and repair, fit for their intended use in the ordinary course
of business, and to the knowledge of Seller and Shareholder conform in all
respects with all applicable Laws and to the knowledge of Seller and
Shareholder, there are no known latent defects therein.
(d) Parties in Possession. There are no adverse or other
parties in possession of the Seller's Property or Shareholder's Property, or of
any part thereof, except for Seller's possession of Shareholder's Property.
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(e) Governmental Requirements to Correct Property
Condition. Seller has not received written notice from any Governmental
Authority requiring Seller to correct any condition with respect to the
Seller's Property and Shareholder has not received written notice from any
Governmental Authority requiring Shareholder to correct any condition with
respect to the Shareholder's Property.
(f) Condemnation. Neither Seller nor Shareholder has
received written notice of any pending condemnation action with respect to all
or any portion of the Seller's Property or the Shareholder's Property and to
Seller's and/or Shareholder's knowledge there are no existing condemnation or
other legal proceedings affecting the existing use of the Seller's Property or
Shareholder's Property by any Governmental Authority having jurisdiction over
or affecting all or any part of Seller's Property or the Shareholder's
Property.
(g) Utility Assessments. To Seller's and/or
Shareholder's knowledge there are no unpaid assessments for sewers, water,
paving, electrical power or otherwise affecting the Seller's Property or
Shareholder's Property and, to Seller's and/or Shareholder's knowledge, no such
assessments are threatened.
(h) Material Adverse Effect on Use. To Seller's and/or
Shareholder's knowledge there are no circumstances existing that would
materially adversely affect the use or value of Seller's Property or
Shareholder's Property for its existing use which have not been disclosed in
this Agreement or the Schedules.
SECTION 2.11 CONTRACTS.
(a) Schedule 2.11 sets forth a list of (i) all Contracts
to which Seller is a party or by which it or its Assets are bound or subject,
except for Contracts relating solely to the purchase or sale of property or
services by Seller in the ordinary course of the Business of Seller which
require Seller to make or receive payments not in excess of $25,000; and (ii)
all material Contracts affecting Shareholder's Property.
(b) All Contracts listed on Schedule 2.11 are valid,
existing, in full force and effect and binding upon Seller and/or Shareholder,
as the case may be and, to the knowledge of Seller or Shareholder, the other
parties thereto in accordance with their terms. Neither Seller nor Shareholder
is in default under any such Contract in any material respect, nor, to the
knowledge of Seller, is any other party thereto in default thereunder in any
material respect, nor does any condition exist which is known to Seller that,
with the passage of time, would result in a default thereunder. Since the
Latest Balance Sheet Date, except as disclosed on Schedule 2.11, Seller has not
waived any material right under any such Contract, materially amended any such
Contract or terminated or failed to renew any such Contract, except in the
ordinary course of the Business of Seller.
SECTION 2.12 INVENTORIES. Schedule 2.12 sets forth a true and
complete list of Inventory by category as of the date hereof. All Inventory is
in good and merchantable condition and is not obsolete or defective. The
Inventory is properly recorded on the Annual Statements and the Interim
Statements at the lower of cost (first in first out) or market in accordance
with GAAP.
SECTION 2.13 INTANGIBLE PROPERTY. Schedule 2.13 sets forth a list of
all registered patents, trademarks, trade names, copyrights, intellectual
properties or service marks owned by or registered in the name of Seller or, to
the extent used in the Business of Seller, all applications for any of the
foregoing, and all permits, grants, licenses and other rights running to or
from Seller, to the extent used in the Business of Seller (the "Seller
Intellectual Property Rights"). Seller has not been notified by any third
party that the Seller Intellectual Property Rights infringe upon or conflict
with the rights or intellectual property of third parties. Except as set forth
on Schedule 2.13, there are no outstanding Liens, licenses or agreements of any
kind
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relating to the Seller Intellectual Property Rights, nor is Seller bound by or
party to any options, licenses or agreements of any kind with respect to the
patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information, proprietary rights and processes of any other person or
entity. To the knowledge of Seller, Seller has full title and ownership of all
Seller Intellectual Property Rights without any conflict with or infringement
of the rights of others. To the knowledge of Seller, Seller has not infringed
or violated in any way any valid patent, trademark, trade name, copyright
intellectual property rights or service marks owned or registered by others,
nor has Seller received any notice, claim or protest respecting any such
violation or infringement.
SECTION 2.14 CLAIMS AND PROCEEDINGS. Except as set forth on Schedule
2.14, there are no outstanding Orders of any Governmental Body against or
involving Seller, the Assets or Shareholder's Property. Except as set forth on
Schedule 2.14, there are no actions, suits, claims or counterclaims or legal,
administrative or arbitral proceedings or investigations (collectively,
"Claims"), pending or, to the knowledge of Seller or Shareholder, threatened
against Seller, any of the Assets, or Shareholder's Property. Except as set
forth on Schedule 2.14, to the knowledge of Seller or Shareholder, there is no
fact, event or circumstance that would give rise to any material Claim against
any of the Assets or Shareholder's Property.
SECTION 2.15 TAXES. Except as set forth on Schedule 2.15: (i) Seller
has timely filed all Tax Returns required to be filed by it on or before the
date hereof; (ii) Seller has paid to the appropriate Tax Authority or has
established, in accordance with GAAP and consistent with past practice,
accruals that are reflected on the Latest Balance Sheet for the payment of, all
Taxes payable by Seller for all taxable periods ending on or before the date
hereof; (iii) no extension of time has been requested or granted for Seller to
file any Tax Return that has not yet been filed or to pay any Tax that has not
yet been paid; and there are no Tax Liens on or pending against Seller.
SECTION 2.16 EMPLOYEE RELATED MATTERS.
(a) Schedule 2.16 contains a true and correct list of all
directors, employees and consultants of Seller together with positions, annual
salaries and other compensation. Schedule 2.16 also contains a list of all
existing employment agreements which are not terminable at will or upon no
greater than sixty (60) days notice, severance arrangements, material accrued
vacation benefits or retiree benefits of any current or former director,
officer, employee or consultant. Except as set forth on such Schedule, the
employment or consulting arrangement of all such persons is terminable at will
or upon not greater than sixty (60) days notice.
(b) Except as provided on Schedule 2.16, Seller has not
granted or become obligated to grant any increases in the wages or salary of,
or paid or become obligated to pay any bonus or made or become obligated to
make any similar payment to or grant any benefit to or on behalf of, any
officers, employee or agent. Seller does not have knowledge of any facts which
would indicate that any employee of Seller will not remain employed by
Purchaser on a basis no less favorable than that upon which such employee is
currently employed by Seller.
(c) Except as set forth in Schedule 2.16, (a) Seller is
not a party to any Contract with any labor organization or other representative
of its employees; (b) there is no unfair labor practice charge or complaint
pending or, to the knowledge of Seller, threatened against Seller; (c) Seller
has not experienced any labor strike, slowdown, work stoppage or similar
material labor controversy within the past three years and, to Seller's
knowledge, none are threatened; (d) no representation question has been raised
respecting Seller's employees working within the past three years, nor, to the
knowledge of Seller, are there any campaigns being conducted to solicit
authorization from Seller's employees to be represented by any labor
organization; (e) no Claim before any Governmental Body brought by or on behalf
of any employee, prospective employee, former employee, retiree, labor
organization or other representative of Seller's
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employees is pending or, to the knowledge of Seller, threatened against Seller;
(f) Seller is not a party to, or otherwise bound by, any Order relating to its
employees or employment practices; and (g) except with respect to ongoing
disputes of a routine nature involving immaterial amounts, Seller has paid in
full to all of its employees all wages, salaries, commissions, bonuses,
benefits and other compensation due and payable to such employees.
SECTION 2.17 INSURANCE. Schedule 2.17 sets forth a list of all
insurance policies (the "Insurance Policies") covering the Assets and
Shareholder's Property. There is no Claim by Seller or Shareholder pending
under any of such Insurance Policies as to which coverage has been questioned,
denied or disputed by the underwriters of such Insurance Policies or
requirement by any insurer to perform work which has not been satisfied. All
premiums due and payable under all Insurance Policies have been paid, and
Seller and Shareholder are otherwise in compliance in all material respects
with the terms and conditions of all such Insurance Policies. All Insurance
Policies are in full force and effect. No premiums are payable under Insurance
Policies in respect of insurance provided for periods prior to the date hereof.
SECTION 2.18 COMPLIANCE WITH LAWS. Neither Seller nor Shareholder is
in violation of nor has Seller or Shareholder been within the past three (3)
years in violation of any order, judgments, injunctions, awards, citations,
decrees, consent decrees or writs (collectively, "Orders") applicable to Seller
or Shareholder's Property, or any law, statute, code, ordinance, rule,
regulation or other requirement, (collectively, "Laws"), of any federal, state
or local government or political subdivision thereof, or any court or
arbitrator (collectively, "Governmental Bodies") affecting its Assets or
Shareholder's Property, which have had, or could have a materially adverse
affect on the Assets or Shareholder's Property. Seller has maintained all
employee benefits plans and other similar employee benefit arrangements, if
any, in accordance with all applicable Laws, including the Code and ERISA and
has timely filed with all applicable regulatory authorities, all applicable
reports and returns required to be filed by or with respect any of its employee
benefit plans and other employee arrangements.
SECTION 2.19 LICENSES. Seller has obtained or applied for all
material licenses, permits, certificates of occupancy, orders, authorizations
and approvals of (collectively, "Licenses") and has made all required
registrations and filings with any Governmental Bodies that are material to the
conduct of its business. Except as set forth on Schedule 2.19, no License will
terminate by reason of the Contemplated Transactions.
SECTION 2.20 ENVIRONMENTAL MATTERS.
(a) To the knowledge of Seller, except as set forth in
Schedule 2.20, there has been no material manufacture, refining, storage,
transport, disposal or treatment of Hazardous Substances by Seller, or any
Release at, on or under Seller's Property by Seller, or, to the knowledge of
Seller, by any other person, in violation of any Environmental Law or which
would require remedial action under any Environmental Law.
(b) To the knowledge of Shareholder, there has been no
material manufacture, refining, storage, transport, disposal or treatment of
hazardous substances by Shareholder or any release at, on or under the
Shareholder's Property by Seller, or, to the knowledge of Shareholder by any
other person in violation of any environmental law or would require immediate
action or any environmental law.
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(c) Seller has not received any written (i) notice of any
violation with respect to any Environmental Law, or (ii) notice of any prior,
pending or threatened Regulatory Action or other Claim involving Seller or any
present or former owner, lessee or operator of the Seller's Property or
Shareholder's Property
(d) Seller has not received any written (1) notice of
violation with respect to any environmental law or (2) notice of any prior,
pending or threatened regulatory action or other claim involving Seller,
Shareholder or any present or former owner, lessee or operator of the Seller's
Property or Shareholder's Property.
SECTION 2.21 FINDERS FEES. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of Seller or Shareholder who might be entitled to any fee or
commission from Seller or Shareholder upon consummation of the Contemplated
Transactions.
SECTION 2.22 FEES, COMMISSIONS AND ROYALTIES. Seller has no
relationships with any distributor, agent, employee or other representative
anywhere in the world which is entitled to fees, commissions, royalties or any
other payments as a result of the sale of Seller's securities, products,
services, or pursuant to its Business, except as disclosed on Schedule 2.22.
SECTION 2.23 RELATED PARTIES. Except as set forth on Schedule 2.23,
no Shareholder, director or officer of Seller, nor any person who is a spouse
or descendant of such shareholder, director or officer, has any direct or
indirect relationship with any customer or supplier of, or other contracting
party with, Seller or its Affiliates, or individually or through an entity,
directly or indirectly, has an ownership interest in a wireless communications
business.
SECTION 2.24 SUPPLIERS. Neither Seller nor Shareholder has received
notice that any supplier of Seller or any other party that does business with
Seller will cease or refuse to do business with Purchaser after the
consummation of the Contemplated Transactions consistent with past practices.
Neither Seller nor any Shareholder has received notice of any material
disruption (including delayed deliveries or allocations by suppliers or service
providers) in the availability of the products sold by Seller nor has Seller or
any Shareholder received notice of any facts which could lead them to believe
that Purchaser will be subject to any such material disruption. Neither Seller
nor Shareholder has received notice of any condition (financial or otherwise)
affecting any supplier or any other party that does business with Seller that
will or could be reasonably expected to reduce such parties ability to continue
to do business with Purchaser, consistent with past practices.
SECTION 2.25 CUSTOMERS. Neither Seller nor Shareholder has received
notice of or has received any information that any customer of Seller would
cease or refuse to do business with Purchaser after consummation of the
Contemplated Transactions, consistent with past practices.
SECTION 2.26 DISCLOSURE. Neither this Agreement, nor the Schedules
hereto, nor any audited or unaudited financial statements, documents or
certificates furnished or to be furnished to BearCom or Newco by or on behalf
of Seller or any Shareholder pursuant to this Agreement, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances in which they were made, not misleading. Notwithstanding any
right of BearCom or Newco to fully investigate the affairs of Seller nor any
knowledge of facts determined or determinable by BearCom or Newco pursuant to
such investigation, BearCom and Newco have the right to rely fully upon the
representations, warranties, covenants and agreements of Seller contained
herein or listed or disclosed on any Schedule hereto or in any instrument
delivered in connection herewith or any of the foregoing.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BEARCOM AND NEWCO
BearCom and Newco, jointly and severally, represent and warrant to
Seller and Shareholder as of the date of this Agreement that:
SECTION 3.1 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of
BearCom and Newco has full power, capacity and authority to execute and deliver
this Agreement and each other Transaction Document to which it is a party and
to consummate the Contemplated Transactions. The execution and delivery of
this Agreement and the consummation of the Contemplated Transactions to which
BearCom or Newco is a party have been duly and validly authorized by BearCom or
Newco, as appropriate, and no other proceedings on the part of BearCom or
Newco, are necessary to authorize the execution and delivery by BearCom and
Newco of this Agreement or the consummation of the Contemplated Transactions to
which BearCom and Newco are parties. This Agreement and the other Transaction
Documents to which BearCom or Newco is a party have been duly and validly
executed and delivered by BearCom or Newco, as appropriate, and (assuming the
valid execution and delivery thereof by the other parties thereto) constitute
the legal, valid and binding agreements of BearCom and Newco enforceable
against BearCom and Newco in accordance with their respective terms.
SECTION 3.2 NO CONFLICTS; CONSENTS. Neither the execution,
delivery and performance by each of BearCom and Newco of this Agreement and
each other Transaction Document to which it is a party nor the consummation of
the Contemplated Transactions to which it is a party, will (i) violate any
provision of the Articles of Incorporation or By- laws (or comparable
instruments) of BearCom or Newco; (ii) require BearCom or Newco to obtain any
consent, approval or action of or waiver from, or make any filing with, or give
any notice to, any Governmental Body or any other person (the "BearCom Required
Consents"); (iii) if the BearCom Required Consents are obtained prior to
Closing, violate, conflict with or result in a breach or default under (after
the giving of notice or the passage of time or both), or permit the termination
of, any Contract to which BearCom or Newco is a party or by which any of them
or any of their assets may be bound or subject, or result in the creation of
any Lien upon the BearCom shares or upon any of the assets of BearCom or Newco
pursuant to the terms of any such Contract; or (iv) if the BearCom Required
Consents are obtained prior to Closing, violate any Law or Order of any
Governmental Body against, or binding upon BearCom or Newco or upon the Assets
or Business of BearCom or Newco.
SECTION 3.3 CORPORATE EXISTENCE AND POWER. Each of BearCom and
Newco is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has all requisite
corporate power and authority required to carry on its business and to own and
lease the properties it owns and leases as now conducted. Each of BearCom and
Newco is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where the failure to be so qualified
would not, individually or in the aggregate, have a MATERIAL ADVERSE EFFECT on
its business, assets, financial condition, prospects or results of operations.
SECTION 3.4 CHARTER DOCUMENTS AND CORPORATE RECORDS. BearCom and
Newco have heretofore delivered to Seller true and complete copies of the
Articles of Incorporation and Bylaws, or comparable
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instruments, of each of BearCom and Newco as in effect on the date hereof.
Newco was formed under Delaware law on March 25, 1998, and has no material
assets or liabilities and has not entered into any Contracts other than the
Agreement and the Related Transactions.
SECTION 3.5 FINANCIAL INFORMATION. BearCom and Newco have
previously furnished to Seller true and complete copies of (i) BearCom's
audited financial statements at and for the fiscal years ended April 30, 1996,
1995 and 1994 (the "BearCom Annual Statements"), (ii) BearCom's unaudited
financial statements at and for each calendar month during 1997 through
December 31, 1997 (the "BearCom Interim Statements") and (iii) all management
letters and attorney audit response letters issued in connection with BearCom's
financial statements for each of the periods comprising the BearCom Annual
Statements and the BearCom Interim Statements. The BearCom Annual Statements
and the BearCom Interim Statements have been prepared in accordance with GAAP
consistently applied as set forth in the notes thereto (except, with respect to
the BearCom Interim Statements, as regards footnote disclosure and normal year
end adjustments). Each BearCom Annual Statement and BearCom Interim Statement
presents fairly the financial position of BearCom as of its date and its
earnings, changes in stockholders' equity and cash flow for the periods then
ended. Each delivered balance sheet included within the BearCom Annual
Statement and BearCom Interim Statement fully sets forth all assets and
Liabilities of BearCom, existing as of its date which, under GAAP, should be
set forth therein, and each delivered statement of earnings included within the
BearCom Annual Statement and BearCom Interim Statement sets forth the items of
income and expense of BearCom, which should appear therein under GAAP. All
financial and accounting books, ledgers, accounts and official and other
records relating to BearCom have been properly and accurately kept and
completed in all material respects.
SECTION 3.6 LIABILITIES. Except as and to the extent reflected
in the interim balance sheet of BearCom (the "Latest BearCom Balance Sheet") at
December 31, 1997 (the "Latest BearCom Balance Sheet Date") referred to in
Section 3.5, BearCom did not have, as of the Latest BearCom Balance Sheet Date,
any material Liabilities or obligations (other than obligations of continued
performance under Contracts and other commitments and arrangements entered into
in the ordinary course of business). Except for current Liabilities for trade
or business obligations incurred in the ordinary course of the business of
BearCom, consistent with past practice, and Liabilities reflected on any
balance sheet included in the BearCom Interim Statements, since the Latest
BearCom Balance Sheet Date (i) there has been no material adverse change in the
assets, Liabilities, Business, condition or prospects of BearCom or Newco,
financial or otherwise, (ii) no factor or condition exists or is contemplated
or threatened, which could reasonably be expected to cause such a material
adverse change in the future, and (iii) no dividends or other distributions
have been made upon any shares of capital stock of BearCom or Newco nor have
any shares of capital stock of either BearCom or Newco been redeemed, retired,
purchased or acquired for value by either of them.
SECTION 3.7 ABSENCE OF CERTAIN CHANGES. Since the Latest BearCom
Balance Sheet Date, each of BearCom and Newco has conducted its Business in the
ordinary course consistent with past practices and there has not been: (i) any
material adverse change in the condition of the Business of BearCom, or any
event, occurrence or circumstance that could reasonably be expected to cause
such a material adverse change; (ii) any material damage, destruction or other
casualty loss (not covered by insurance), condemnation or other taking
affecting the assets of BearCom or Newco; (iii) any change in any method of
accounting or accounting practice.
SECTION 3.8 CLAIMS AND PROCEEDINGS. There are no outstanding
Orders of any Governmental Body against or involving BearCom or Newco or the
Business of BearCom or Newco. There are no Claims (whether or not covered by
insurance), pending or, to the knowledge of BearCom or Newco, threatened on the
date hereof, against or involving BearCom or Newco, any of BearCom or Newco's
assets or the Business of BearCom or Newco. To the knowledge of BearCom and
Newco, there is no fact, event or circumstance that would give rise to any
material uninsured Claim.
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SECTION 3.9 TAXES. BearCom and Newco have timely filed all Tax
Returns required to be filed by them on or before the date hereof. BearCom and
Newco have paid to the appropriate Tax Authorities or have established, in
accordance with GAAP and consistent with past practice, accruals that are
reflected on the Latest BearCom Balance Sheets for the payment of, all Taxes
owing from BearCom or Newco for all taxable periods ending on or before the
date hereof; (iii) no extension of time has been requested or granted for
BearCom or Newco to file any Tax Return that has not yet been filed or to pay
any Tax that has not yet been paid.
SECTION 3.10 COMPLIANCE WITH LAWS. To the knowledge and belief of
BearCom and Newco, neither BearCom nor Newco is in material violation of any
one or more Orders or Laws applicable to BearCom or Newco, by or of any
Governmental Bodies, affecting either BearCom's or Newco's Assets or Business.
SECTION 3.11 LICENSES. Each of BearCom and Newco has obtained or
applied for all material Licenses and have made all required registrations and
filings with any Governmental Bodies that are material to the conduct of their
respective businesses. No proceeding is pending or, to the knowledge of
BearCom or Newco, threatened to revoke or limit any License. No License will
terminate by reason of the Contemplated Transactions.
SECTION 3.12 ENVIRONMENTAL MATTERS.
(a) To the knowledge of BearCom and Newco, there has been
no manufacture, refining, storage, transport, disposal or treatment of
Hazardous Substances by BearCom or Newco, or any Release at, on or under any
real property owned or occupied by BearCom or Newco, or to the knowledge of
BearCom or Newco, by any other person, in violation of any Environmental Law or
which would require remedial action under any Environmental Law.
(b) Neither BearCom nor Newco has received any written
(i) notice of any violation with respect to any Environmental Law, or (ii)
notice of any prior, pending or threatened Regulatory Action or other Claim
involving BearCom or Newco or any present or former owner, lessee or operator
of any real property owned or occupied by BearCom or Newco.
SECTION 3.13 FINDERS FEES. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of BearCom or Newco who might be entitled to any fee or commission
from BearCom or Newco upon consummation of the Contemplated Transactions.
SECTION 3.14 DISCLOSURE. Neither this Agreement, nor any audited or
unaudited financial statements, documents or certificates furnished or to be
furnished to Seller by or on behalf of BearCom or Newco pursuant to this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances in which they were made, not misleading,
the result of which would adversely affect Newco's and BearCom's ability to
perform their respective obligations under this Agreement or any Transaction
Document. Notwithstanding any right of Seller to fully investigate the affairs
of BearCom and Newco nor any knowledge of facts determined or determinable by
Seller pursuant to such investigation, Seller has the right to rely fully upon
the representations, warranties, covenants and agreements of BearCom and Newco
contained herein or in any instrument delivered in connection herewith or any
of the foregoing.
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ARTICLE 4
COVENANTS AND AGREEMENTS OF SELLER AND SHAREHOLDER
SECTION 4.1 CONFIDENTIALITY. Each of Seller and Shareholder
shall hold in strict confidence, and shall use its/his best efforts to cause
all its Representatives to hold in strict confidence, unless compelled to
disclose by judicial or administrative process, or by other requirements of
law, all information concerning BearCom, Newco or the BearCom shareholders
which it has obtained from BearCom, Newco, the BearCom shareholders or their
Representatives prior to, on or after the date hereof in connection with the
Contemplated Transactions, and Seller shall not use or disclose to others, or
permit the use of or disclosure of, any such information so obtained except in
furtherance of the Contemplated Transactions, and will not release or disclose
such information to any other person, except to its Representatives who need to
know such information in connection with this Agreement and who shall be
advised of the provisions of this Section 4.1. The foregoing provision shall
not apply to any such information to the extent (i) known by Seller or any
Shareholder prior to the date such information was provided to such party in
connection with the Contemplated Transactions, (ii) made known to Seller or any
Shareholder from a third party not in breach of any confidentiality
requirement, or (iii) made public through no fault of Seller or any
Shareholder, or any of their Representatives. Under no circumstances shall
Seller or any Shareholder use information of the type described in this
provision for the purpose of contacting, soliciting, or doing business with any
of BearCom's or Newco's customers.
ARTICLE 5
COVENANTS AND AGREEMENTS OF PURCHASER
SECTION 5.1 CONFIDENTIALITY. Each of BearCom and Newco shall
hold in strict confidence, and shall use its best efforts to cause all its
Representatives to hold in strict confidence, unless compelled to disclose by
judicial or administrative process, or by other requirements of law, all
information concerning Seller which it has obtained from Seller or its
Representatives prior to, on or after the date hereof in connection with the
Contemplated Transactions, and neither BearCom nor Newco shall use or disclose
to others, or permit the use of or disclosure of, any such information so
obtained except in furtherance of the Contemplated Transactions, and will not
release or disclose such information to any other person, except to its
Representatives who need to know such information in connection with this
Agreement and who shall be advised of the provisions of this Section 5.1. The
foregoing provision shall not apply to any such information to the extent (i)
known by BearCom or Newco prior to the date such information was provided to
such party in connection with the Contemplated Transactions, (ii) made known to
BearCom or Newco from a third party not in breach of any confidentiality
requirement, or (iii) made public through no fault of BearCom, Newco, any of
their Representatives, or any BearCom shareholder. Under no circumstances
shall BearCom, Newco, any BearCom shareholder, or any Affiliate of BearCom or
Newco use information of the type described in this provision for the purpose
of contacting, soliciting, or doing business with any of Seller's customers.
BearCom and Newco hereby covenant and agree that for a two (2) year period
commencing on the date hereof, neither BearCom nor Newco nor any Affiliate of
either of them will directly or indirectly in any manner whatsoever, solicit,
contact, communicate with or attempt to contact or communicate with, employ,
engage, or offer to employ or engage,
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discuss or negotiate with any person regarding the employment or engagement of,
or otherwise utilize or attempt to utilize any of the talents, skills or
services of, any current or former officer, director, employee, consultant,
agent and other person associated and/or affiliated with Seller, irrespective
of who initiates contact. The foregoing restrictions shall not prohibit
Purchaser's contact with any such person which is solely related to Purchaser's
review of the Business of Seller pursuant to the terms of this Agreement;
provided that such contact is conducted in the ordinary course of business with
the prior written approval of Seller. The provisions of this Section shall not
survive the Closing.
ARTICLE 6
DELIVERY OF CLOSING DOCUMENTS
SECTION 6.1 DELIVERY OF CLOSING DOCUMENTS BY BEARCOM AND NEWCO.
Simultaneously herewith, the following documents have been delivered to Seller:
(a) A certificate, dated the Closing Date, of the Chairman,
President or any Vice President or any Secretary or Assistant Secretary of each
of BearCom and Newco confirming that the representations and warranties of each
of BearCom and Newco contained in this Agreement and in any certificate or
other writing delivered by each of BearCom and Newco pursuant hereto is true in
all material respects at and as of the Closing Date.
(b) A certificate, dated the Closing Date, of the Secretary or
Assistant Secretary of each of BearCom and Newco certifying, among other
things, that attached or appended to such certificate (A) is a true and correct
copy of its Articles of Incorporation and all amendments if any thereto as of
the date thereof; (B) is a true and correct copy of its By-laws as of the date
hereof, (C) is a true and correct copy of all corporate actions taken by it,
including resolutions of its board of directors authorizing the execution,
delivery and performance of this Agreement, and each other document to be
delivered by such party pursuant hereto; and (D) are the names and signatures
of its duly elected or appointed officers who are authorized to execute and
deliver this Agreement and any certificate, document or other instrument in
connection herewith.
(c) Evidence of the good standing and corporate existence of
BearCom and Newco reasonably requested by Seller.
(d) A signed opinion of Purchaser's counsel, dated the Closing
Date and addressed to Seller, substantially in the form of opinion annexed as
Exhibit B hereto.
(e) Copies of all BearCom Required Consents.
SECTION 6.2 DELIVERY OF CLOSING DOCUMENTS BY SELLER AND
SHAREHOLDER. Simultaneously herewith, the following documents have been
delivered to Bearcom and Purchaser:
(a) A certificate dated the Closing Date of the President or any
Vice President or any Secretary or Assistant Secretary of Seller confirming
that the representations and warranties of Seller and Shareholder contained in
this Agreement and in any certificate or other writing delivered by Seller and
Shareholder pursuant hereto are true in all material respects at and as of the
Closing Date as if made at and as of such time.
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(b) A certificate, dated the Closing Date, of the Secretary or
Assistant Secretary of Seller certifying, among other things, that attached or
appended to such certificate (A) is a true and correct copy of its Articles of
Incorporation and all amendments if any thereto as of the date thereof; (B) is
a true and correct copy of its By-laws as of the date hereof, (C) is a true
copy of all corporate actions taken by it, including resolutions of its board
of directors authorizing the execution, delivery and performance of this
Agreement, and each other document to be delivered by such party pursuant
hereto; and (D) are the names and signatures of its duly elected or appointed
officers who are authorized to execute and deliver this Agreement and any
certificate, document or other instrument in connection herewith.
(c) Evidence of the good standing and corporate existence of
Seller reasonably requested by BearCom.
(d) A signed opinion of Seller's counsel, dated the Closing Date,
addressed to BearCom and Newco, substantially in the form of the opinion
annexed as Exhibit C hereto.
(e) An executed Xxxx of Sale in the form attached hereto as
Exhibit D.
(f) An executed General Assignment in the form attached hereto as
Exhibit E.
(g) An executed Assignment of Servicemark in the form attached
hereto as Exhibit F.
(h) BearCom, Newco and Shareholder shall have executed an
Employment Agreement in the form attached as Exhibit A hereto.
(i) Seller's accounting firm shall have delivered a letter dated
the Closing Date and addressed to Purchaser stating that to its knowledge that
there are no pending audits or investigations involving Seller and that it has
no reason to believe that the Annual Statements and the Interim Statements do
not fairly present the operating results of Seller for the periods set forth
therein.
(j) Satisfactory documentation reflecting an amendment to the
Articles of Incorporation of Seller evidencing a change of its registered name
to a name reasonably acceptable to Purchaser.
(k) A special warranty deed from Shareholder to Purchaser
conveying Shareholder's Property subject only to those liens, claims and
encumbrances approved by Purchaser.
(l) A special warranty deed from Seller to Purchaser transferring
title to Seller's Property subject only to those liens, claims, and
encumbrances approved by Purchaser.
(m) An affidavit in compliance with Section 1445 of the Internal
Revenue Code of 1986, as amended, and any regulations promulgated thereunder,
stating under penalty of perjury the Seller's United States identification
number and the Shareholder's social security numbers and providing the Seller
and Shareholder are not foreign persons as that term is define in Section 1445,
duly executed and acknowledged by Seller and Shareholder, respectively.
(n) The commitment of the title company to issue an Owner's Title
Policy to Purchaser for each of the Shareholder's Property and Seller's
Property with the cost of the full premiums of both title policies to be paid
by Purchaser.
(o) Any and all items reasonably requested by the title company as
administrative requirements for consummating the closing.
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ARTICLE 7
INDEMNIFICATION
SECTION 7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) Notwithstanding any right of BearCom or Newco fully
to investigate the affairs of Seller and notwithstanding any knowledge of facts
determined or determinable by BearCom or Newco pursuant to such investigation
or right of investigation, BearCom and Newco have the right to rely fully upon
the representations, warranties, covenants and agreements of Seller contained
in this Agreement, or listed or disclosed on any Schedule hereto, as the same
may be modified by any certificate delivered by Seller on or before Closing and
approved by BearCom or Newco, or in any instrument delivered in connection with
or pursuant to any of the foregoing. All such representations, warranties,
covenants and agreements shall survive the execution and delivery of this
Agreement and the Closing hereunder. Notwithstanding the foregoing, all
representations and warranties of Seller contained in this Agreement, on any
Schedule hereto or in any instrument delivered in connection with or pursuant
to this Agreement, and the indemnification obligations of Seller in respect of
the matters specified in clauses (i) and (ii) of Section 7.2, shall terminate
and expire at the end of the twenty-four (24) month period specified in Section
1.6 hereof; provided, however, that the liability of Seller shall not terminate
as to any specific claim or claims of the type referred to in Section 7.2
hereof, whether or not fixed as to liability or liquidated as to amount, with
respect to which Seller has been given specific notice on or prior to the date
on which such liabilities would otherwise terminate pursuant to the terms of
this Section 7.1. Notwithstanding the foregoing, Seller acknowledges that its
obligation to indemnify Purchaser with respect to any Retained Liabilities
shall survive the Closing until the expiration of any applicable statute of
limitations with respect thereto, and such obligation shall not be affected by
the expiration of any representation and warranty of Seller under this Section
7.1(a).
(b) Notwithstanding any right of Seller and Shareholder
fully to investigate the affairs of BearCom and Newco and notwithstanding any
knowledge of facts determined or determinable by Seller or Shareholder pursuant
to such investigation or right of investigation, Seller and Shareholder have
the right to rely fully upon the representations, warranties, covenants and
agreements of BearCom and Newco contained in this Agreement, or listed or
disclosed on any Schedule hereto, as the same may be modified by any
certificate delivered by BearCom, Newco, or either of them on or before Closing
and approved by Seller and Shareholder, or in any instrument delivered in
connection with or pursuant to any of the foregoing. All such representations,
warranties, covenants and agreements shall survive the execution and delivery
of this Agreement and the Closing hereunder. Notwithstanding the foregoing,
all representations and warranties of BearCom and Newco contained in this
Agreement, on any Schedule hereto or in any instrument delivered in connection
with or pursuant to this Agreement, and the indemnification obligations of
BearCom and Newco in respect of the matters specified in clauses (i) and (ii)
of Section 7.3 (other than the obligations of Purchaser to pay all or any
portion of the Asset Purchase Price and Shareholder's Purchase Price
(including, without limitation, post-Closing adjustments thereto) becoming due
at or after Closing, and the covenants and agreements of Purchaser contained in
Section 1.8 hereof), shall terminate and expire at the end of the twenty-four
month period specified in Section 1.6 hereof; provided, however, that the
liability of BearCom and Newco shall not terminate as to any specific claim or
claims of the type referred to in Section 7.3 hereof, whether or not fixed as
to liability or
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liquidated as to amount, with respect to which BearCom or Purchaser has been
given specific notice on or prior to the date on which such liabilities would
otherwise terminate pursuant to the terms of this Section 7.1. Notwithstanding
the foregoing, BearCom and Newco acknowledge that the obligation of BearCom and
Newco to indemnify Seller with respect to any Assumed Liabilities and the
breach or default by Purchaser of its obligations to pay all or any portion of
the Asset Purchase Price or the Shareholder's Purchase Price, (including,
without limitation, post-Closing adjustments thereto) becoming due at or after
Closing, and the covenants and agreements of Purchaser contained in Section 1.8
hereof, shall survive the Closing until the expiration of any applicable
statute of limitations with respect thereto, and such obligation shall not be
affected by the expiration of any representation and warranty of BearCom or
Newco under this Section 7.1(b).
SECTION 7.2 OBLIGATION OF SELLER TO INDEMNIFY. Subject to the
provisions of Section 7.5, Seller and Shareholder, jointly and severally, agree
to indemnify, defend and hold harmless BearCom and Newco (and their respective
directors, officers, employees, Affiliates, successors and assigns) from and
against any and all Claims, losses, liabilities, damages, deficiencies,
judgments, settlements, costs of investigation or other expenses (including
interest, penalties and reasonable attorneys' fees and disbursements and
expenses incurred in enforcing this indemnification) (collectively, "Losses")
suffered or incurred by Newco or any of the foregoing persons arising out of
(i) any breach of the representations and warranties of Seller or Shareholder
contained in this Agreement or in the Schedules or any Transaction Document,
(ii) any breach of the covenants and agreements of Seller contained in this
Agreement or in the Schedules or any Transaction Document, (iii) any Retained
Liabilities, (iv) any Liability of Seller for failure to file any federal,
state, local or foreign Tax Return and any Liability for any Taxes relating to
any tax period ending on or prior to the Closing Date, (v) any Liability under
ERISA for any period prior to the Closing relating to any employee of Seller
who is not hired by Purchaser after the Closing, (vi) any Environmental
Liabilities, and (vii) any other actions or omissions of Seller prior to
Closing, resulting in a Liability to Purchaser, other than the Assumed
Liabilities, or (viii) any Liability to Purchaser in connection with any Claim
by Xxxxxxx Xxxxxx arising prior to Closing.
SECTION 7.3 OBLIGATION OF BEARCOM AND NEWCO TO INDEMNIFY.
BearCom and Newco, jointly and severally, agree to indemnify, defend and hold
harmless Seller and Shareholder (and their respective directors, officers,
employees, Affiliates, successors and assigns) from and against any and all
Losses suffered or incurred by Seller, Shareholder or any of the foregoing
persons arising out of (i) any breach of the representations and warranties of
BearCom or Newco contained in this Agreement or in the Schedules or any
Transaction Document, (ii) any breach of the covenants and agreements of
BearCom or Newco contained in this Agreement or in the Schedules or any
Transaction Document, (iii) any Assumed Liabilities, and (iv) the operations of
Newco from and after the Closing Date.
SECTION 7.4 NOTICE AND OPPORTUNITY TO DEFEND THIRD PARTY CLAIMS.
(a) Promptly after receipt by any party hereto (the
"Indemnitee") of notice of any demand, claim, circumstance or Tax Audit which
would or might give rise to a claim or the commencement (or threatened
commencement) of any action, proceeding or investigation (an "Asserted
Liability") that may result in a Loss, the Indemnitee shall give prompt notice
thereof (the "Claims Notice") to the party or parties obligated to provide
indemnification pursuant to Section 7.2 or 7.3 (collectively, the "Indemnifying
Party"). The Claims Notice shall describe the Asserted Liability in reasonable
detail and shall indicate the amount (estimated, if necessary, and to the
extent feasible) of the Loss that has been or may be suffered by the
Indemnitee.
(b) Newco may elect to defend, at its own expense and
with its own counsel, any Asserted Liability against Seller or Shareholder
arising out of an Assumed Liability. If Newco elects to defend such
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Asserted Liability, it shall within thirty (30) days (or sooner, if the nature
of the Asserted Liability so requires) notify the Seller of its intent to do
so. If Newco elects not to defend such Asserted Liability or fails to notify
Seller or Shareholder, as the case may be, of its election as herein provided,
Seller or Shareholder as the case may be, may pay, compromise or defend such
Asserted Liability at the sole cost and expense of Newco. In all other
circumstances, each party shall be entitled to control any Asserted Liability
against it. Notwithstanding the foregoing, neither the Indemnifying Party nor
the Indemnitee may settle or compromise any claim over the reasonable written
objection of the other. For purposes of this paragraph (b), any such objection
made when such settlement would be in accordance with sound business practices
shall be deemed unreasonable. Provided further, that if any Indemnitee shall
fail to consent to the monetary terms of any proposed settlement or compromise
of any Asserted Liability, the Indemnifying Party shall not thereafter be
obligated to pay the Indemnitee in respect of such Asserted Liability under
this Article 7 in excess of the amount it would have been required to pay to
the Indemnitee in connection with such proposed settlement or compromise. Any
Losses of any Indemnitee for which indemnification is available hereunder shall
be paid within thirty (30) days following written demand therefor.
SECTION 7.5 LIMITS ON INDEMNIFICATION. Notwithstanding anything
contained in this Agreement to the contrary, BearCom's and Newco's remedies
with respect to Losses, and the liability of Seller and Shareholder, as the
case may be, for indemnification arising out of all Losses incurred by
Purchaser shall not exceed, and shall be limited to an amount equal to the
Purchase Price, including the purchase price for the Related Transactions, and
the sums hereafter becoming due to Seller under clauses 1.6(a) and (b) of this
Agreement.
SECTION 7.6 SOLE AND EXCLUSIVE REMEDY. The parties agree that
the indemnification provisions of Section 7 shall constitute the sole and
exclusive remedies of the parties in respect to this Agreement and all of the
Contemplated Transactions, other than fraud.
SECTION 7.7 RIGHT OF OFFSET. Purchaser may, at its option, apply
or otherwise offset any and all Losses to which it shall be entitled to be
indemnified by Seller and/or Shareholder pursuant to this Article 7 and/or
Section 9.10(b), against payments due to Seller pursuant to this Agreement or
to Shareholder or Condor, Ltd., pursuant to the Related Transactions.
ARTICLE 8
INTENTIONALLY LEFT BLANK
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 EXPENSES. Except as otherwise specifically provided
in this Agreement, BearCom and the Shareholder shall bear their own respective
legal, auditing, accounting, consulting, brokerage, regulatory and other
expenses, BearCom will bear the expenses of Newco, and Shareholder will bear
the expenses of Seller, in each case, incurred in connection with the
preparation, due diligence, negotiation, execution and performance of this
Agreement and the Contemplated Transactions. Notwithstanding the
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foregoing provisions of this Section, all expenses incurred by Seller prior to
the Closing, including but not limited to, legal, auditing, accounting,
consulting, regulatory and other expenses, incurred in the ordinary course of
business, including but not limited to the preparation of Seller's financial
statement at and for the calendar year ended December 31, 1997, shall not be
borne by Shareholder, but shall be borne by Seller, as expenses incurred in the
ordinary course of business. If any party hereto shall bring an action at law
or in equity to enforce its rights under this Agreement (including an action
based upon a misrepresentation or the breach of any warranty, covenant,
agreement or obligation contained herein), the prevailing party in such action
shall be entitled to recover from the other party its reasonable costs and
expenses incurred in connection with such action (including fees, disbursements
and expenses of attorneys and costs of investigation). Seller shall be liable
for and shall pay any transfer tax, sales tax and other similar taxes resulting
from consummation of the Contemplated Transactions. Purchaser shall pay for the
cost of title policy premiums, premiums on customary endorsements and new
surveys for each of Seller's Property and Shareholder's Property.
SECTION 9.2 NOTICES.
(a) Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally by
hand or by recognized overnight courier with evidence of receipt, telecopied or
mailed (by registered or certified mail, postage prepaid) as follows:
(i) If to BearCom or Newco, one copy to:
BearCom, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx P, Xxxxxx, Chairman
Telecopier: (000) 000-0000
with a copy to:
Gardere & Xxxxx, L.L.P.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
Telecopier: (000) 000-0000
(ii) If to Seller or Shareholder, one copy to:
Condor Communications, Inc.
0000 X.X. 00xx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx
Telecopier: (000) 000-0000
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with a copy to:
Cohen, Berke, Xxxxxxxxx,
Xxxxxx & Kondell, P.A.
0000 Xxxxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
(b) Each such notice or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in Section 9.3(a) (with confirmation of
transmission; provided, however, that if such confirmation is received later
than 5 p.m., notice shall be effective on the next following business day) or
(ii) if given by any other means, when delivered at the address specified in
Section 9.3(a). Any party by notice given in accordance with this Section 9.3
to the other party may designate another address (or telecopier number) or
person for receipt of notices hereunder. Notices by a party may be given by
counsel to such party.
SECTION 9.3 ENTIRE AGREEMENT. This Agreement (including the
Schedules and Exhibits hereto) and the collateral agreements executed in
connection with the consummation of the Contemplated Transactions contain the
entire agreement between the parties with respect to the subject matter hereof
and related transactions and supersede all prior agreements, written or oral,
with respect thereto.
SECTION 9.4 WAIVERS AND AMENDMENTS; NON-CONTRACTUAL REMEDIES;
PRESERVATION OF REMEDIES. This Agreement may be amended, superseded, canceled,
renewed or extended only by a written instrument signed by the parties hereto.
The provisions hereof may be waived in writing by Shareholder and BearCom. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part
of any party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege. Except as
otherwise provided herein, the rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity.
SECTION 9.5 GOVERNING LAW; VENUE. This Agreement shall be
governed and construed in accordance with the laws of the State of Texas
applicable to agreements made and to be performed entirely within such State,
without regard to the conflict of laws rules thereof. Sole and exclusive venue
with respect to any disputes arising in connection herewith shall be Dallas
County, Texas. Each of the parties consents to the jurisdiction of the federal
and state courts sitting in Texas (and of the appropriate appellate courts) in
any such action or proceeding.
SECTION 9.6 BINDING EFFECT; NO ASSIGNMENT. This Agreement and
all of its provisions, rights and obligations shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors,
heirs and legal representatives. This Agreement may not be assigned (including
by operation of Law) by a party except as otherwise provided herein without the
express written consent of BearCom (in the case of assignment by Seller) or
Seller (in the case of assignment by BearCom or Newco) and any purported
assignment, unless so consented to, shall be void and without effect. Nothing
herein express or implied is
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intended or shall be construed to confer upon or to give anyone other than the
parties hereto and their respective heirs, legal representatives and successors
any rights or benefits under or by reason of this Agreement and no other party
shall have any right to enforce any of the provisions of this Agreement.
SECTION 9.7 SEVERABILITY. If any provision of this Agreement for
any reason shall be held to be illegal, invalid or unenforceable, such
illegality shall not affect any other provision of this Agreement, but this
Agreement shall be construed as if such illegal, invalid or unenforceable
provision had never been included herein.
SECTION 9.8 COUNTERPARTS. The Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
SECTION 9.9 THIRD PARTIES. Except as specifically set forth or
referred to herein, nothing herein express or implied is intended or shall be
construed to confer upon or give to any person other than the parties hereto
and their permitted successors or assigns, any rights or remedies under or by
reason of this Agreement or the Contemplated Transactions.
SECTION 9.10 GUARANTY.
(a) BearCom hereby unconditionally guarantees to Seller and
Shareholder the full and timely performance of all of the obligations and
agreements of Newco pursuant to this Agreement and the Related Transactions.
The foregoing guaranty shall include the guaranty of the payment of all
damages, costs and expenses which might become recoverable as a result of the
breach or nonperformance by Newco of any provision contained herein or in any
other agreement contemplated hereby. Seller and Shareholder may proceed
against BearCom for the performance of any such obligation or agreement, or for
damages for default in the performance thereof, without first proceeding
against Newco or against any of its properties.
(b) Shareholder hereby unconditionally guarantees to Bearcom and
Newco the full and timely performance of all of the obligations and agreements
of Seller, Condor Ltd. and Condor Prague pursuant to this Agreement and the
Related Transactions. The foregoing guaranty shall include the guaranty of the
payment of all damages, costs and expenses which might become recoverable as a
result of the breach or nonperformance by Seller of any provision contained
herein or in any other agreement contemplated hereby. BearCom and Newco may
proceed against Shareholder for the performance of any such obligation or
agreement, or for damages for default in the performance thereof, without first
proceeding against Seller or against any of its properties.
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ARTICLE 10
DEFINITIONS
SECTION 10.1 DEFINITIONS. The following terms, as used in this
Agreement, have the following meanings:
"AFFILIATE" of any person means any other person directly or
indirectly through one or more intermediary persons, controlling, controlled by
or under common control with such person.
"AGREEMENT" or "THIS AGREEMENT" shall mean, and the words
"HEREIN", "HEREOF" and "HEREUNDER" and words of similar import shall refer to,
this agreement as it from time to time may be amended.
"ARTICLES OF INCORPORATION" shall mean, in the case of any
corporation, the certificate of incorporation, articles of incorporation or
charter of a corporation, however denominated under the laws of the
jurisdiction of its incorporation.
The term "AUDIT" or "AUDITED" when used in regard to financial
statements shall mean an examination of the financial statements by a firm of
independent certified public accountants in accordance with generally accepted
auditing standards for the purpose of expressing an opinion thereon.
"BUSINESS" of a person shall mean the ownership and operation
of the assets comprising the business operations of such person.
"CONDOR BUSINESS UNIT OPERATIONS" shall mean the revenues and
expenses attributable and identifiable as being derived from the operations of
Seller at the time of Closing and/or derived from customers or contracts
entered into by Condor Holdings, Inc., its successor or assigns after Closing.
"CONTRACT" shall mean any contract, agreement, indenture,
note, bond, lease, conditional sale contract, mortgage, license, franchise,
instrument, commitment or other binding arrangement, whether written or oral.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
The term "CONTROL", with respect to any person, shall mean the
power to direct the management and policies of such person, directly or
indirectly, by or through stock ownership, agency or otherwise, or pursuant to
or in connection with an agreement, arrangement or understanding (written or
oral) with one or more other persons by or through stock ownership, agency or
otherwise; and the terms "CONTROLLING" and "CONTROLLED" shall have meanings
correlative to the foregoing.
"DEBT" shall mean (i) money borrowed from any person; (ii) any
indebtedness arising under leases required to be capitalized under GAAP or
evidenced by a note, bond, debenture or similar instrument; (iii) any
indebtedness arising under purchase money obligations or representing the
deferred purchase price of property and services (other than current trade
payables incurred in the ordinary course of business) and (iv) any Liability
under any guaranty, letter of credit, performance credit or other agreement
having the effect of assuring a creditor against loss.
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"DUE DILIGENCE PERIOD" shall mean the thirty (30) day period
commencing on the date hereof pursuant to which Seller and Purchaser shall have
each respectively completed their due diligence investigations and reviews in
connection with the transactions contemplated hereby.
"EBITDA" means, with respect to Condor Business Unit
Operations during any particular period, net income resulting from Condor
Business Unit Operations during such period before interest, income taxes,
interest, penalties or any additions thereto, depreciation and amortization,
all as determined in accordance with GAAP.
THE TERM "ENVIRONMENTAL LAWS," when used in relation to any
person, shall mean any federal, state or local statute, ordinance or
promulgated rule or regulation, any judicial or administrative order or
judgment applicable to such person (whether or not by consent), any duties
imposed on such person by common law and any provision or condition of any
permit, license or other operating authorization, in each case as in effect as
of the date of this Agreement and relating to (a) the protection of (i) the
environment or (ii) the public welfare from actual or potential exposure (or
the effects of exposure) to any actual or potential release, discharge,
disposal or emission (whether past or present) of any Hazardous Substance, or
(b) the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, of any Hazardous Substance.
"ENVIRONMENTAL LIABILITIES" of a person shall mean any and all
Liabilities of such person arising out of (i) Claims by third parties made
under Environmental Laws or (ii) remedial action required by Environmental Laws
in each case, to the extent arising out of events, transactions, facts or
circumstances occurring or existing on or prior to the Closing Date.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"GAAP" shall mean generally accepted accounting principles in
effect on the date hereof as set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States.
"HAZARDOUS SUBSTANCES" shall mean any pollutants,
contaminants, hazardous or toxic substance. material, or waste which is or
becomes regulated by any local or state governmental authority, or the United
States government. The term "HAZARDOUS SUBSTANCES" includes, without
limitation, any material or substance which is (i) designated as a "hazardous
substance" pursuant to Section 311 of the Federal Water Pollution Control Act,
33 U.S.C. ' 1321, (ii) defined as a "HAZARDOUS WASTE" pursuant to Section 1004
of the Federal Resource Conservation and Recovery Act, 42 U.S.C ' 6901 et seq.
(42 U.S.C. ' 6903), (iii) defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ' 9601 et seq., (iv) petroleum products and wastes, or
(v) asbestos or asbestos-containing material.
"INVENTORY" of a person shall mean, as of any date,
collectively, all inventories of products owned by such person and held for
sale, distribution or license, together with packaging and samples thereof,
owned by such person as of such date.
"IRS" shall mean the Internal Revenue Service.
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The term "KNOWLEDGE" with respect to (a) any individual shall
mean actual knowledge or the knowledge that a reasonably prudent individual
would have and (b) any corporation shall mean the actual knowledge of the
directors and the executive officers of such corporation or the knowledge that
a reasonably prudent individual in such position would have; and "knows" has a
correlative meaning.
"LIABILITY" of a person shall mean any direct or indirect
indebtedness, liability, assessment, claim, loss, damage, deficiency,
obligation or responsibility, fixed or unfixed, xxxxxx or inchoate. liquidated
or unliquidated, secured or unsecured, accrued, absolute, actual or potential,
contingent or otherwise (including any liability under any guaranties, letters
of credit, performance credits or with respect to insurance loss accruals) of
such person.
"LIEN" shall mean, with respect to any Asset, any mortgage,
lien (including mechanics, warehousemen, laborers and landlords liens), claim,
pledge, charge, security interest, preemptive right, right of first refusal,
option, judgment, title defect, or encumbrance of any kind in respect of or
affecting such Asset.
The term "MATERIAL ADVERSE EFFECT" shall mean with respect to
any party, a MATERIAL ADVERSE EFFECT on (i) the property or assets of such
party, the business or operations or condition (financial or otherwise),
properties, liabilities, working capital, earnings, technology, prospects or
relations with customers, suppliers or distributors or employees of such party,
or (ii) the right or the ability of such party to consummate the Contemplated
Transactions.
The term "MATERIAL" means an amount equal to $25,000.
The term "PERSON" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization or
other entity, including a government or political subdivision or an agency or
instrumentality thereof.
"RECEIVABLES" shall mean as of any date any trade accounts
receivable, notes receivable, sales representative advances and other
miscellaneous receivables of such person.
"REGULATORY ACTIONS" shall mean any claim, demand, action,
suit or proceeding brought or instigated by any Governmental Body in connection
with any Environmental Law, Including, without limitation, civil, criminal
and/or administrative proceedings, whether or not seeking costs, damages,
penalties or expenses.
"RELEASE" shall mean the intentional or unintentional,
spilling, leaking, disposing, discharging or disturbance of, or emitting,
depositing, injecting, leaching, escaping, or any other release or threatened
release to or from, however defined, any Hazardous Substance in violation of
any Environmental Law.
"REPORTABLE EVENT" shall mean any of the events described in
Section 4043(b)(1), (2), (3), (5), (6), (8) or (9) of ERISA.
"TAX" (including, with correlative meaning, the terms "Taxes"
and "Taxable") shall mean (i) any net income, gross income, gross receipts,
sales, use, ad valorem, transfer, transfer gains, franchise, estimated,
payroll, profits, license, withholding, payroll, employment, excise, severance,
stamp, rent, recording, occupation, premium, real or personal property,
intangibles, environmental or windfall profits tax, alternative or add-on
minimum tax, customs duty or other tax, fee, duty, levy, impost, assessment or
charge of any kind whatsoever (including but not limited to taxes assessed to
real property and water and sewer rents relating
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31
thereto), together with any interest and any penalty, addition to tax or
additional amount imposed by any Governmental Body (domestic or foreign) (a
"Tax Authority") responsible for the imposition of any such tax; (ii) any
liability for the payment of any amount of the type described in the
immediately preceding clause (i) as a result of a party's being a member of an
affiliated or combined group with any other corporation at any time on or prior
to the Closing Date and (iii) any liability for the payment of any amounts of
the type described in the immediately preceding clause (i) as a result of a
contractual obligation to indemnify any other person.
"TAX RETURN" shall mean any return or report (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be supplied to any Tax Authority.
"TRANSACTION DOCUMENTS" shall mean, collectively, this
Agreement, and each of the other agreements and instruments (including but not
limited to the certificates described in Section 6.1(e)(i) and (ii) and
6.2(g)(i) and (ii) to be executed and delivered by all or some of the parties
hereto in connection with the consummation of the transactions contemplated
hereby.
The term "VOTING POWER" when used with reference to the
capital stock of, or units of equity interests in, any person shall mean the
power under ordinary circumstances (and not merely upon the happening of a
contingency) to vote in the election of directors of such person (if such
person is a corporation) or to participate in the management and control of
such person (if such person is not a corporation).
SECTION 10.2 INTERPRETATION. Unless the context otherwise requires,
the terms defined in Section 10.1 shall have the meanings herein specified for
all purposes of this Agreement, applicable to both the singular and plural
forms of any of the terms defined herein. All accounting terms defined in
Section 10.1, and those accounting terms used in this Agreement not defined in
Section 10.1, except as otherwise expressly provided herein or therein, shall
have the meanings customarily given thereto in accordance with GAAP. When a
reference is made in this Agreement to Sections, such reference shall be to a
Section of this Agreement unless otherwise indicated. The headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation".
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Asset Purchase
Agreement as of the date set forth above.
BEARCOM, INC., a Texas corporation
By: /s/ XXXX X. XXXXXX
--------------------------------
Xxxx X. Xxxxxx, Chairman
CONDOR HOLDINGS, INC., a Delaware
corporation
By: /s/ XXXX X. XXXXXX
--------------------------------
Xxxx X. Xxxxxx, Chairman
CONDOR COMMUNICATIONS, INC.,
a Florida corporation
By: /s/ XXXXXXX XXXXXXXXXX
---------------------------------
Xxxxxxx Xxxxxxxxxx, President
/s/ XXXXXXX XXXXXXXXXX
---------------------------------
Xxxxxxx Xxxxxxxxxx
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