<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): September 18, 1998
LCC INTERNATIONAL, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-21213 54-1807038
- ---------------------------- ------------ --------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification
Number)
7925 Jones Branch Drive
McLean, VA 22102 22201
- ---------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (703) 351-6666
<PAGE> 2
ITEM 5. OTHER EVENTS.
ACQUISITION OF COMSEARCH DIVISION OF ALLEN TELECOM INC. AND SALE OF PRODUCTS
DIVISION OF LCC INTERNATIONAL, INC.
On September 18, 1998, LCC International, Inc. (the "Company"),
Allen Telecom Inc., a Delaware corporation ("Allen"), Allen Telecom Investments,
Inc., a Delaware corporation ("ATII"), and LCC Europe GmbH, a German corporation
and wholly owned subsidiary of the Company ("LCC GmbH"), signed an Asset
Exchange Agreement (the "Agreement"), pursuant to which the Company and LCC GmbH
agreed to convey to Allen substantially all of the assets and certain
liabilities related to the Company's hardware business segment (which segment is
engaged in manufacturing and selling field testing and measurement products and
related software for the wireless communications industry) (the "LCC Products
Business"), in exchange for the conveyance to the Company by Allen and ATII of
substantially all of the assets and certain liabilities of Allen's business of
providing frequency planning and coordinating services as well as systems
design, field engineering and software products for the wireless communications
industry (the "Comsearch Business"). Included in the LCC Products Business is
the stock of the Company's wholly owned Norwegian subsidiary, LCC Europe AS
("LCC AS"). The Company and Allen also agreed to enter into a supply agreement
pursuant to which the Company may purchase products from Allen, including
products conveyed as part of the LCC Products Business.
Consummation of the transactions contemplated by the Agreement is
subject to the satisfaction of certain conditions, including (i) the Company's
determination, based on its due diligence investigation of the Comsearch
Business, that no event, occurrence, fact, condition or effect has occurred or
been discovered that has, or is reasonably likely to have, or shall indicate, a
significant material adverse effect on the Comsearch Business; (ii) Allen's
determination, based on its due diligence investigation of the LCC Products
Business, that no event, occurrence, fact, condition or effect has occurred or
been discovered that has, or is reasonably likely to have, or shall indicate, a
significant material adverse effect on the LCC Products Business; (iii) the
Company's obtaining of consents to the transaction from third parties under
certain of its LCC Products Business agreements, the absence of which consents
would have, or would be reasonably likely to have, a significant material
adverse effect on the results of operations, financial condition or prospects of
the LCC Products Business; (iv) Allen's obtaining of consents to the transaction
<PAGE> 3
from third parties under certain of its Comsearch Business agreements, the
absence of which consents would have, or would be reasonably likely to have, a
significant material adverse effect on the results of operations, financial
condition or prospects of the Comsearch Business; (v) the Company's
determination that the employees engaged in the microwave and satellite
communications business unit of the Comsearch Business or who currently exercise
executive management responsibility in the Comsearch Business and who have
indicated in a manner acceptable to the Company that they will accept employment
with the Company on terms and conditions acceptable to the Company are
sufficient to enable the Company to operate successfully the microwave and
satellite communication business unit of the Comsearch Business; (vi) Allen's
determination that the LCC Products Business employees who are to be transferred
to Allen include adequate senior management employees of LCC AS or European
sales managers to enable Allen to operate the LCC Products Business
substantially in the manner currently conducted, without regard to the assets
that are excluded from the transaction; (vii) compliance with all applicable
provisions of the Hart-Scott-Rodino Act Antitrust Improvements Act of 1976, as
amended, and the expiration of all applicable waiting periods thereunder; and
(viii) certain other customary conditions.
The foregoing description of the Agreement and the transactions
contemplated thereby does not purport to be complete and is qualified in its
entirety by reference to the Agreement, a copy of which is attached as Exhibit 2
hereto. A copy of the press release, dated September 21, 1998, issued by the
Company and Allen regarding the above-described transaction, is attached as
Exhibit 99 hereto.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) The following exhibits are filed with this report:
2. Asset Exchange Agreement, dated as of September 18, 1998, by and
among LCC International, Inc., LCC Europe GmbH, Allen Telecom
Inc. and Allen Telecom Investments, Inc.
99. Press Release, dated September 21, 1998, announcing the agreement
to exchange assets between LCC International, Inc. and Allen
Telecom Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 30, 1998 LCC INTERNATIONAL, INC.
By: /s/ RICHARD HOZIK
--------------------------------
Richard Hozik
Senior Vice President, Treasurer
and Chief Financial Officer
<PAGE> 6
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
2 Asset Exchange Agreement, dated as of September 18,
1998, by and among LCC International, Inc., LCC
Europe GmbH, Allen Telecom, Inc. and Allen Telecom
Investments, Inc.
99. Press Release, dated September 21, 1998, regarding
the exchange of assets between LCC International,
Inc. and Allen Telecom, Inc.
<PAGE> 1
EXHIBIT 2
ASSET EXCHANGE AGREEMENT
AMONG
ALLEN TELECOM INC.,
ALLEN TELECOM INVESTMENTS, INC.,
LCC INTERNATIONAL, INC.,
AND
LCC EUROPE GMBH
SEPTEMBER 18, 1998
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
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PAGE
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ARTICLE 1 EXCHANGE OF ASSETS.................................................................................2
1.1 Agreement to Convey Comsearch Purchased Assets.......................................................2
1.2 Comsearch Purchased Assets...........................................................................2
1.3 Comsearch Excluded Assets............................................................................5
1.4 Agreement to Convey LCC Purchased Assets.............................................................6
1.5 LCC Purchased Assets.................................................................................6
1.6 LCC Excluded Assets..................................................................................9
1.7 No Warranties.......................................................................................10
ARTICLE 2 CLOSING...........................................................................................11
ARTICLE 3 ASSUMPTION OF LIABILITIES.........................................................................11
3.1 Assumption of Comsearch Assumed Liabilities by LCC..................................................11
3.2 Comsearch Excluded Liabilities......................................................................12
3.3 Assumption of LCC Assumed Liabilities by Allen......................................................13
3.4 LCC Products Excluded Liabilities...................................................................14
ARTICLE 4 TERMS OF THE EXCHANGE.............................................................................16
4.1 Exchange of Assets..................................................................................16
4.2 Allocation of Asset Values..........................................................................16
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF ALLEN...........................................................16
5.1 Organization........................................................................................16
5.2 Corporate Authority.................................................................................17
5.3 Qualification.......................................................................................17
5.4 No Conflict.........................................................................................17
5.5 Consents............................................................................................17
5.6 Financial Statements................................................................................18
5.7 Subsidiaries........................................................................................18
5.8 Absence of Undisclosed Liabilities..................................................................19
5.9 Taxes...............................................................................................19
5.10 Absence of Changes.................................................................................20
5.11 Litigation.........................................................................................23
5.12 Compliance with Laws; Governmental Approvals and Consents; Governmental Contracts..................24
5.13 Persons Conducting Comsearch Business..............................................................25
5.14 Title to Assets....................................................................................25
5.15 Contracts..........................................................................................26
5.16 Territorial Restrictions...........................................................................27
5.17 Inventories........................................................................................27
5.18 Customers..........................................................................................28
5.19 Suppliers; Raw Materials...........................................................................28
5.20 Product Warranties.................................................................................29
5.21 Absence of Certain Business Practices..............................................................29
5.22 Intellectual Property..............................................................................29
5.23 Environmental Matters..............................................................................31
5.24 Receivables........................................................................................33
5.25 Labor Relations....................................................................................34
5.26 Pension and Benefit Plans..........................................................................34
5.27 Transactions with Related Parties..................................................................36
5.28 Employees..........................................................................................36
5.29 Disclosure.........................................................................................37
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5.30 Definition of Allen's Knowledge....................................................................37
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF LCC.............................................................38
6.1 Organization........................................................................................38
6.2 Corporate Authority.................................................................................38
6.3 Qualification.......................................................................................38
6.4 No Conflict.........................................................................................38
6.5 Consents............................................................................................39
6.6 Financial Statements................................................................................39
6.7 Subsidiaries........................................................................................40
6.8 Absence of Undisclosed Liabilities..................................................................40
6.9 Taxes...............................................................................................40
6.10 Absence of Changes.................................................................................41
6.11 Litigation.........................................................................................43
6.12 Compliance with Laws; Governmental Approvals and Consents; Governmental Contracts..................44
6.13 Persons Conducting LCC Products Business...........................................................44
6.14 Title to Assets....................................................................................44
6.15 Contracts..........................................................................................45
6.16 Territorial Restrictions...........................................................................46
6.17 Inventories........................................................................................47
6.18 Customers..........................................................................................47
6.19 Suppliers; Raw Materials...........................................................................47
6.20 Product Warranties.................................................................................48
6.21 Absence of Certain Business Practices..............................................................48
6.22 Intellectual Property..............................................................................49
6.23 Environmental Matters..............................................................................50
6.24 Receivables........................................................................................52
6.25 Labor Relations....................................................................................52
6.26 Pension and Benefit Plans..........................................................................52
6.27 Transactions with Related Parties..................................................................54
6.28 Employees..........................................................................................54
6.29 Disclosure.........................................................................................55
6.30 Definition of LCC's Knowledge......................................................................55
ARTICLE 7 COVENANTS PENDING CLOSING.........................................................................55
7.1 Conduct of Comsearch Business.......................................................................55
7.2 Conduct of LCC Products Business....................................................................55
7.3 Forbearances by Allen...............................................................................56
7.4 Forbearances by LCC.................................................................................58
ARTICLE 8 ADDITIONAL COVENANTS AND AGREEMENTS...............................................................60
8.1 Filings With Governmental Authorities...............................................................60
8.2 Access and Information..............................................................................61
8.3 Consents............................................................................................61
8.4 Cooperation.........................................................................................62
8.5 Financial Statements................................................................................62
8.6 Books and Records...................................................................................63
8.7 Transferred Employees...............................................................................64
8.8 Welfare Benefit Plans...............................................................................67
8.9 Severance Policy....................................................................................67
8.10 Litigation Assistance..............................................................................68
8.11 Health Care Administration.........................................................................68
8.12 Tax Returns........................................................................................69
8.13 Liability for Transfer Taxes and Related Matters...................................................70
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8.14 Non-Competition....................................................................................70
8.15 Bulk Sales Law.....................................................................................72
8.16 Product Supply and Representation Agreement........................................................72
8.17 Transitional Matters...............................................................................72
8.18 No Solicitation....................................................................................73
8.19 Software License...................................................................................74
8.20 Warranty Claims....................................................................................74
8.21 Deskcat License Agreement..........................................................................75
8.22 LCC Combined Contracts.............................................................................75
8.23 Certain Matters Related to LCC AS..................................................................76
8.24 Telespectro Lease Guarantee Agreements.............................................................77
Reston Facility Lease...................................................................................77
ARTICLE 9 MUTUAL CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE...............................................78
9.1 HSR Act.............................................................................................78
9.2 Absence of Litigation...............................................................................78
ARTICLE 10 CONDITIONS TO LCC'S OBLIGATION TO CLOSE..........................................................78
10.1 Representations and Warranties.....................................................................78
10.2 Performance........................................................................................79
10.3 Allen's Closing Documents..........................................................................79
10.4 Approval of Lender.................................................................................79
10.5 Due Diligence......................................................................................79
10.6 Consents...........................................................................................79
10.7 Comsearch Transferred Employees....................................................................79
ARTICLE 11 CONDITIONS TO ALLEN'S OBLIGATIONS TO CLOSE.......................................................79
11.1 Representations and Warranties.....................................................................80
11.2 Performance........................................................................................80
11.3 LCC's Closing Documents............................................................................80
11.4 Due Diligence......................................................................................80
11.5 Consents...........................................................................................80
11.6 LCC Transferred Employees..........................................................................80
ARTICLE 12 ACTION TO BE TAKEN AT CLOSING....................................................................80
12.1 Action to be Taken by Allen........................................................................80
12.2 Action to be Taken by LCC..........................................................................82
12.3 Further Assurances.................................................................................84
12.4 Effective Time.....................................................................................84
ARTICLE 13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.......................................................85
ARTICLE 14 INDEMNIFICATION AND SURVIVAL.....................................................................85
14.1 Indemnification of LCC.............................................................................85
14.2 Indemnification of Allen...........................................................................86
14.3 Joint Cooperation..................................................................................87
14.4 Limitation of Liability............................................................................87
14.5 Determination of Loss..............................................................................88
14.6 Exclusive Remedy...................................................................................88
14.7 Treatment of Indemnification Payments..............................................................89
ARTICLE 15 TERMINATION......................................................................................89
15.1 Termination........................................................................................89
15.2 Effect of Termination..............................................................................90
ARTICLE 16 MISCELLANEOUS....................................................................................90
16.1 Written Agreement to Govern........................................................................90
16.2 Severability.......................................................................................91
16.3 Notices and Other Communications...................................................................91
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16.4 Counterparts.......................................................................................92
16.5 Law to Govern......................................................................................92
16.6 Successors and Assigns.............................................................................92
16.7 Interpretation.....................................................................................92
16.8 Schedules and Exhibits.............................................................................92
16.9 Publicity..........................................................................................93
16.10 Modification......................................................................................93
16.11 Waiver of Provisions..............................................................................93
16.12 Expenses..........................................................................................93
16.13 Restrictive Trade Practices.......................................................................93
</TABLE>
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<TABLE>
<CAPTION>
EXHIBITS
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<S> <C>
Exhibit A - Form of Product Supply Agreement
Exhibit B - Form of Deskcat License Agreement
Exhibit C - Form of Opinion of Rudnick & Wolfe
Exhibit D - Form of Opinion of Hogan & Hartson L.L.P.
<CAPTION>
SCHEDULES
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<S> <C>
Schedule 1.2(a) - List of Tangible Personal Property Included in Comsearch Purchased Assets
Schedule 1.2(h) - Comsearch Patents and Trademarks
Schedule 1.2(i) - Comsearch Software
Schedule 1.2(j) - Licenses of Comsearch Software
Schedule 1.2(k) - Third Party Comsearch Software Licenses
Schedule 1.3(d) - Comsearch Excluded Contracts
Schedule 1.5(a) - List of Tangible Personal Property Included in LCC Purchased Assets
Schedule 1.5(h) - LCC Patents and Trademarks
Schedule 1.5(i) - LCC Software
Schedule 1.5(j) - Licenses of LCC Software
Schedule 1.5(k) - Third Party LCC Software Licenses
Schedule 1.6(l) - LCC Excluded Contracts
Schedule 1.6(n) - Retained LCC Products
Schedule 5.4 - Conflicts of Allen
Schedule 5.5 - Consents Required Under Comsearch Contracts
Schedule 5.6(a) - Comsearch Financial Statements
Schedule 5.6(b) - Comsearch June 30 Balance Sheet
Schedule 5.8 - Undisclosed Liabilities of Allen
Schedule 5.9 - Taxes of Allen
Schedule 5.10 - Events Since June 30, 1998 with Respect to Comsearch Business
Schedule 5.11 - Litigation Affecting Comsearch
Schedule 5.12 - Comsearch Compliance With Laws
Schedule 5.13 - Other Entities Conducting Comsearch Business
Schedule 5.14 - Exceptions To Title to Comsearch Purchased Assets
Schedule 5.15(a) - Comsearch Contracts
Schedule 5.15(c) - Breaches Under Comsearch Contracts
Schedule 5.15(d) - Comsearch Powers of Attorney
Schedule 5.16 - Territorial Restrictions
Schedule 5.17 - Comsearch Inventory
Schedule 5.18 - Comsearch Customers
Schedule 5.19 - Comsearch Suppliers
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<TABLE>
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Schedule 5.20 - Comsearch Product Warranties
Schedule 5.22(a) - Comsearch Intellectual Property Assets
Schedule 5.22(b) - Consents Required to Transfer Comsearch Intellectual Property Assets
Schedule 5.22(d) - Comsearch License Arrangements
Schedule 5.22(f) - Unregistered Comsearch Patents and Trademarks
Schedule 5.23 - Environmental Matters Involving Comsearch
Schedule 5.24 - Comsearch Receivables
Schedule 5.26(a) - Comsearch Plans and Comsearch Other Arrangements
Schedule 5.27 - Comsearch Transactions With Related Parties
Schedule 5.28(a) - Comsearch Transferred Employees
Schedule 5.28(b) - Certain Matters Related to Comsearch Transferred Employees
Schedule 6.4 - Conflicts of LCC
Schedule 6.5 - Consents Required Under LCC Contracts
Schedule 6.6(a) - LCC Products Financial Statements
Schedule 6.6(b) - LCC Products June 30 Balance Sheet
Schedule 6.7(a) - Liens on Capital Stock of LCC Subsidiaries
Schedule 6.8 - LCC Undisclosed Liabilities
Schedule 6.9 - Taxes of LCC
Schedule 6.10 - Events Since June 30, 1998 With Respect to LCC Products Business
Schedule 6.11 - Litigation Affecting LCC
Schedule 6.12 - LCC Compliance With Laws
Schedule 6.13 - Other Entities Conducting LCC Products Business
Schedule 6.14 - Exceptions to Title to LCC Purchased Assets
Schedule 6.15(a) - LCC Contracts
Schedule 6.15(b) - Unavailable LCC Contracts
Schedule 6.15(c) - Breaches Under LCC Contracts
Schedule 6.15(d) - LCC Powers of Attorney
Schedule 6.16 - Territorial Restrictions
Schedule 6.17 - LCC Inventory
Schedule 6.18 - LCC Customers
Schedule 6.19 - LCC Suppliers
Schedule 6.20 - LCC Product Warranties
Schedule 6.22(a) - LCC Intellectual Property Assets
Schedule 6.22(b) - Consents Required to Transfer LCC Intellectual Property Assets
Schedule 6.22(d) - LCC License Arrangements
Schedule 6.22(f) - Unregistered LCC Patents and Trademarks
Schedule 6.23 - Environmental Matters Involving LCC
Schedule 6.24 - LCC Receivables
Schedule 6.26(a) - LCC Plans and LCC Other Arrangements
Schedule 6.27 - LCC Transactions With Related Parties
Schedule 6.28(a) - LCC Transferred Employees
Schedule 6.28(b) - Certain Matters Related to LCC Transferred Employees
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Schedule 8.7(m) - Retained LCC AS Employees
Schedule 10.6 - Allen Minimum Consents
Schedule 11.5 - LCC Minimum Consents
</TABLE>
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INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
DEFINED TERM SECTION
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Affiliate 5.13
Agreement Preamble
Allen Preamble
Allen 401(k) Plan 5.26(b)
Allen Retirement Plans 8.7(h)
Allen Damages 14.2
Allen Indemnitees 14.2
Applicable Business 8.2
Applicable Law 5.11(b)(iii)
ATII Preamble
BSC Agreement 8.22(a)
Business Day 16.7
Capital Contributions Documents 8.22(c)
CERCLA 5.11(b)(i)
Chase Releases 8.23(b)
Claims 8.10
Closing Article 2
Closing Date Article 2
Code 5.9(a)
Comsearch Recital A
Comsearch Assumed Liabilities 3.1
Comsearch Business Recital A
Comsearch Contracts 5.15(a)
Comsearch Division Recital A
Comsearch Excluded Assets 1.3
Comsearch Excluded Liabilities 3.2
Comsearch Holdings Recital A
Comsearch Intellectual Property Assets 5.22(a)
Comsearch Interim Financial Statements 5.6
Comsearch June 30 Balance Sheet 5.6
Comsearch Know-How 1.2(l)
Comsearch Material Adverse Effect 5.3
Comsearch Other Arrangement 5.26(a)
Comsearch Other Transferred Employee 8.9(a)
Comsearch Patents and Trademarks 1.2(h)
Comsearch Plan 5.26(a)
Comsearch Purchased Assets 1.2
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<TABLE>
<CAPTION>
DEFINED TERM SECTION
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Comsearch Software 1.2(i)
Comsearch Subsequent Monthly Financial Statements 8.5
Comsearch Subsidiaries 5.7(a)
Comsearch Transferred Employees 8.7(a)
Comsearch Transferred Option Employees 8.9(a)
Comsearch UK Recital A
Comsearch Warranty Claims 8.20(b)
Comsearch Withholding Taxes 5.9(a)
Comsearch Year-End Financial Statements 5.6
Confidentiality Agreement 16.1
Contracts 1.2(n)
Control 5.13
Covered Comsearch Taxes 5.9(a)
Covered LCC Taxes 6.9(a)
Defined Benefit Plan 5.26(c)
Deskcat License Agreement 8.21
Disclosing Party 8.2
DOJ 5.5
Environmental Law 5.11(b)(i)
Environmental Liabilities and Costs 5.23(d)(ii)
Environmental Permit 5.23(a)
ERISA 5.26(a)
ESOP 5.26(c)
Exchange Act 5.26(d)
Extension Period 8.17(b)
FTC 5.5
GAAP 5.6
German Act Against Restraints on Competition 5.5
Governmental Authority 5.11(b)(ii)
Grayson Recital C
Hazardous Substances 5.11(b)(iv)
hazardous waste 5.11(b)(iv)
HSR Act 5.5
ICTA 5.26(a)
including 16.7
IQ-Analyzer 1.3(c)
Intellectual Property 5.22(a)
Know-How 1.2(l)
knowledge of Allen 5.30
knowledge of LCC 6.30
LCC Preamble
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<TABLE>
<CAPTION>
DEFINED TERM SECTION
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<S> <C>
LCC 401(k) Plan 6.26(b)
LCC AS Recital D
LCC AS Asset Purchase Agreement 8.23(a)
LCC AS Closing Cash 8.23(b)
LCC AS Escrow Agreement 14.6
LCC AS Facility 8.23(e)
LCC AS Intercompany Credit Agreement 8.24(c)
LCC AS Working Capital Facility 6.6
LCC Assumed Liabilities 3.3
LCC Combined Contracts 8.22(a)
LCC Contracts 6.15(a)
LCC Credit Agreement 8.23(b)
LCC Damages 14.1
LCC Determination Letter 8.7(n)(i)
LCC Excluded Assets 1.6
LCC GmbH Preamble
LCC Indemnitees 14.1
LCC Intellectual Property Assets 6.22(a)
LCC Interim Financial Statements 6.6
LCC Know-How 1.5(l)
LCC Material Adverse Effect 6.23
LCC Other Arrangement 6.26(a)
LCC Patents and Trademarks 1.5(h)
LCC Plan 6.26(a)
LCC Products Business Recital D
LCC Products Excluded Liabilities 3.4
LCC Products June 30 Balance Sheet 6.6
LCC Products Subsequent Monthly Financial Statements 8.5
LCC Products Warranty Claims 8.20(a)
LCC Purchased Assets 1.5
LCC Retained Combined Contracts 8.22(c)
LCC Services Business Recital D
LCC Software 1.5(i)
LCC Subsidiaries 6.7(b)
LCC Transferred Employees 8.7(b)
LCC Withholding Taxes 6.9(a)
LCC Year-End Financial Statements 6.6
License Agreement 8.17(a)
Lien 5.10
Lund Release 8.23(d)
McLean Facility Recital D
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<TABLE>
<CAPTION>
DEFINED TERM SECTION
- ------------ -------
<S> <C>
McLean Facility Right 8.17(b)(ii)
Morin Employment Agreement 1.3(o)
Multiemployer Plan 5.26(c)
Noncompetition Period 8.14(a)
Norwegian Acquisition Act 1994 5.5
Patents and Trademarks 1.2(h)
Person 5.13
Principal Party 8.2
Qualcomm License 1.3(f)
Recipient 8.2
Release 5.11(b)(v)
Remedial Action 5.23(d)(i)
Reston Facility Recital A
Reston Facility Right 8.17(b)(i)
Reston Lease 1.2(r)
Retained LCC Products 1.6(n)
Section 8.9(a)(i) Plan 8.9(a)
Section 8.9(a)(ii) Plan 8.9(a)
Securities Act 5.26(d)
License Agreement 8.17(a)
Split Contracts 8.22(b)
Supply Agreement 8.16
Survival Period Article 13
Tax 5.9(b)
Tax Returns 5.9(a)
Telespectro Recital A
Telespectro Lease Guarantee Agreements 3.1(e)
Title I Plan 5.26(b)
Transfer Taxes 8.13
Transition Period 8.17(b)
UK Restrictive Practices Act 5.5
WARN Act 8.7(h)
Welfare Plan 5.26(c)
Western Wireless Agreement 8.22(a)
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ASSET EXCHANGE AGREEMENT
THIS ASSET EXCHANGE AGREEMENT (this "Agreement") dated September 18, 1998
is by and between ALLEN TELECOM INC., a Delaware corporation ("Allen"), ALLEN
TELECOM INVESTMENTS, INC., a Delaware corporation ("ATII"), LCC INTERNATIONAL,
INC., a Delaware corporation ("LCC"), and LCC EUROPE GMBH, a German corporation
("LCC GmbH").
RECITALS
A. Allen owns and operates a division known as Comsearch (the "Comsearch
Division"), which has its headquarters at 2002 Edmund Halley Drive, Reston,
Virginia 20191 (the "Reston Facility"). The Comsearch Division also operates in
Mexico through Allen's wholly owned subsidiary, Comsearch Holdings, Inc., a
Delaware corporation ("Comsearch Holdings"), and Allen's indirect subsidiary
wholly owned by Comsearch Holdings and ATII, Telespectro de Mexico, S.A. de
C.V., a Mexican corporation ("Telespectro"), and in the United Kingdom through
Comsearch Holdings' wholly owned subsidiary, Comsearch UK Limited, a United
Kingdom corporation ("Comsearch UK"). The Comsearch Division, Comsearch
Holdings, Telespectro and Comsearch UK are referred to collectively in this
Agreement as "Comsearch".
B. Comsearch is engaged in the business of providing frequency planning
and coordinating services as well as systems design, field engineering and
software products for the wireless communications industry (such business,
excluding the IQ-Analyzer product sold by Comsearch, is referred to herein as
the "Comsearch Business").
C. Allen is also engaged through its Grayson Wireless division
("Grayson"), in the business of manufacturing and selling testing and
measurement products and related field test measurement and analysis software
for the wireless telecommunications business.
D. LCC is engaged, directly or through its wholly owned subsidiaries LCC
Europe, AS, formerly known as LCC International AS, a Norwegian limited
liability company ("LCC AS") and LCC GmbH, in the business of manufacturing and
selling field testing and measurement products and related software for the
wireless communications industry (such business is referred to herein as the
"LCC Products Business"). LCC is also engaged in the business of providing
network deployment services, network optimization design services, benchmarking,
drive testing and asset management for the communications industry,
telecommunications consulting and radio frequency engineering services and
related network propagation software (such as LCC's "Golf" product) (the "LCC
Services Business"). The principal location of the LCC Products Business and the
LCC Services Business is 7925 Jones Branch Drive, McLean, Virginia (the "McLean
Facility").
<PAGE> 14
E. The parties desire to effect a transaction whereby substantially all
the assets of the Comsearch Business are transferred to LCC and substantially
all the assets of the LCC Products Business are transferred to Allen, all on the
terms and subject to the conditions set forth in this Agreement.
AGREEMENTS
In consideration of the mutual covenants and agreements of the parties
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
ARTICLE 1
EXCHANGE OF ASSETS
1.1 AGREEMENT TO CONVEY COMSEARCH PURCHASED ASSETS. Subject to the terms
and conditions of this Agreement and in reliance upon the representations,
warranties, covenants and agreements contained herein, at the Closing (as
defined in Article 2), Allen shall sell, assign, transfer, convey and deliver to
LCC, and LCC shall accept from Allen the Comsearch Purchased Assets (as defined
in Section 1.2) and ATII shall sell, assign, transfer, convey and deliver to
LCC, and LCC shall accept from ATII, all shares of capital stock of Telespectro
held by ATII.
1.2 COMSEARCH PURCHASED ASSETS. For purposes of this Agreement,
"Comsearch Purchased Assets" shall mean all the shares of capital stock of
Telespectro owned by ATII and all right, title, benefit and interest of Allen in
and to all of the properties, business, assets, rights, benefits, privileges and
goodwill of Allen owned, leased, used, held for use or otherwise held
exclusively for or exclusively in connection with the Comsearch Business, except
for the Comsearch Excluded Assets (as defined in Section 1.3), wherever situated
and as the same exist on the Closing Date (as defined in Article 2), including:
(a) all of the furniture, fixtures, furnishings, machinery,
computers, equipment (mobile or otherwise), antenna installations,
towers, office materials and other tangible personal property of every
kind and description owned, leased, used, held for use or otherwise held
by Allen exclusively for or exclusively in connection with the Comsearch
Business, including those items set forth in Schedule 1.2(a);
(b) all inventory of raw materials, work in process and finished
goods (including materials or goods in transit) owned, leased, used, held
for use or otherwise held by Allen exclusively for or exclusively in
connection with the Comsearch Business;
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(c) all purchase orders placed by customers of Allen exclusively
for services or products of the Comsearch Business to the extent the same
remain unfulfilled on the Closing Date;
(d) all orders for materials and supplies for use in the Comsearch
Business which were placed by Allen with suppliers in the ordinary course
of the Comsearch Business and which remain unfulfilled on the Closing
Date;
(e) all accounts receivable and notes receivable from customers of
Allen with respect to products and services of the Comsearch Business;
(f) all sales representative and distribution agreements which
relate exclusively to the conduct of the Comsearch Business by Allen;
(g) all of Allen's rights under any leases of equipment used, held
for use or otherwise held exclusively for or exclusively in connection
with the Comsearch Business;
(h) all United States and foreign (i) patents (including design
patents, industrial designs and utility models) and patent applications
(including docketed patent disclosures awaiting filing, reissues,
divisions, continuations-in-part and extensions), patent disclosures
awaiting filing determinations, (ii) trademarks, service marks, trade
names, trade dress, logos, business and product names, slogans, and
registrations and applications for registration thereof, (iii) copyrights
and registrations thereof, and (iv) copies and tangible embodiments
thereof (in whatever form or medium, including electronic media)
(collectively, "Patents and Trademarks"), in each case owned, leased,
used, held for use or otherwise held by Allen exclusively for or
exclusively in connection with the Comsearch Business, including the
Patents and Trademarks set forth and described in Schedule 1.2(h) (the
"Comsearch Patents and Trademarks");
(i) all computer software (other than IQ-Analyzer) owned, leased,
used, held for use or otherwise held by Allen exclusively for or
exclusively in connection with the Comsearch Business, whether purchased,
fully developed or work in process, including the computer software set
forth in Schedule 1.2(i) (collectively, the "Comsearch Software"),
including all data bases, software codes (both source and object),
functional and design documentation (including any and all microwave
databases used in the Comsearch Business), maintenance documentation,
programmers' notes, automated test software code, training manuals and
all other information relating to the Comsearch Software;
(j) all licenses of Comsearch Software by Allen as licensor,
including the licenses set forth in Schedule 1.2(j);
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(k) all licenses of computer software by Allen as licensee which
are used exclusively by the Comsearch Division, including those set forth
in Schedule 1.2(k);
(l) all know-how, formulas, technical information, engineering and
technical data, trade secrets, working knowledge, unpatented inventions,
research and development data, designs, techniques, technologies and
procedures (collectively, "Know-How") owned, leased, used, held for use
or otherwise held by Allen exclusively for or exclusively in connection
with the Comsearch Business (the "Comsearch Know-How");
(m) all Allen's rights under agreements with any present or past
employees of the Comsearch Division with respect to (i) the
non-disclosure of any of the Comsearch Know-How, (ii) the assignment to
Allen of such employee's rights to any inventions relating to the
Comsearch Business, or (iii) non-competition or nonsolicitation by such
employee with respect to the Comsearch Business;
(n) subject to Section 8.3, all agreements, contracts, commitments
and other instruments or arrangements (whether written or oral)
(collectively, "Contracts"), related exclusively to the Comsearch
Business;
(o) all of (i) Allen's books of account, records, files, invoices,
customer data and other similar books, records and information relating
exclusively to the Comsearch Business, and (ii) Allen's engineering and
other technical books, papers, logs, files and records pertaining to the
Comsearch Business;
(p) all of the outstanding shares of capital stock of Comsearch
Holdings, Comsearch UK and Telespectro;
(q) all rights and claims of Allen, whether known or unknown,
absolute or contingent, matured or unmatured, or otherwise, against third
parties which relate exclusively to the Comsearch Purchased Assets or the
Comsearch Business, whether in tort, contract or otherwise, including
causes of action, unliquidated rights and claims under or pursuant to all
warranties, representations and guarantees made by manufacturers,
suppliers or vendors;
(r) all of Allen's rights under that certain Lease dated as of
March 16, 1994, as amended (the "Reston Lease"), between Allen, as
tenant, and Allstate Insurance Company, as landlord, relating to the
Reston Facility and all leasehold improvements located therein;
(s) all petty cash held for use exclusively in the Comsearch
Business;
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(t) the goodwill and going concern value associated with the
Comsearch Business, including such rights as Allen has to use the name
"Comsearch," and all client and supplier lists relating to the Comsearch
Business; and
(u) prepayments and deposits made by Allen exclusively with respect
to the Comsearch Business.
1.3 COMSEARCH EXCLUDED ASSETS. Notwithstanding anything to the contrary
contained in this Agreement, the following assets ("Comsearch Excluded Assets")
shall be excluded from the Comsearch Purchased Assets and shall be retained by
Allen to the extent in existence on the Closing Date:
(a) all cash on hand and cash equivalents, other than petty cash held
for use exclusively in the Comsearch Business;
(b) all bank accounts;
(c) all computer software of Allen which is marketed under the name
IQ-Analyzer ("IQ-Analyzer"), including all data bases, software codes
(both source and object), functional and design documentation,
maintenance documentation, programmers' notes, automated test software
code, training manuals and other information relating thereto, and all
know-how, formulas, technical information, engineering and technical
data, trade secrets, working knowledge, unpatented inventions, research
and development data, designs, trademark applications and designs,
techniques, technologies and procedures which relate exclusively thereto;
(d) all of Comsearch Division's rights under (i) the Exclusive
Distribution Agreement dated as of January 17, 1997 between Actix, Ltd.
and Comsearch Division and any software developed pursuant thereto, (ii)
the Mutual Nondisclosure Agreement effective as of March 19, 1997 between
Actix, Ltd. and Comsearch Division, and (iii) the other agreements set
forth in Schedule 1.3(d);
(e) any rights under that certain License Agreement dated March 31,
1996 between Grayson and Qualcomm pertaining to certain CDMA technology
(the "Qualcomm License");
(f) all securities other than the shares of Comsearch Holdings,
Comsearch UK and Telespectro;
(g) all insurance policies and any unearned premiums thereunder or
other rights to refunds thereunder;
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(h) all claims for refunds of Taxes (as defined in Section 5.9),
including claims for refunds of Taxes paid on behalf of any Comsearch
Transferred Employee (as defined in Section 8.7(a)), for all periods
ending on or prior to the Closing Date;
(i) all intercompany receivables;
(j) all books of account, records, files and other data of the
Comsearch Business maintained by Allen at its corporate headquarters in
Beachwood, Ohio for the preparation of its consolidated financial
statements or Tax Returns (as defined in Section 5.9(a));
(k) all Contracts related to indebtedness for borrowed money,
including guarantees of indebtedness for borrowed money, other than
capitalized leases for equipment included in the Comsearch Purchased
Assets;
(l) all right, title and interest of Allen in and to the name "Allen
Telecom Inc.", "The Allen Group Inc." and any trademark, tradename or
corporate, trade or fictitious name containing the word "Allen";
(m) subject to Section 8.3, all Contracts set forth in Schedule 5.5
as to which any consent, waiver or approval required in order to transfer
or assign such Contract to LCC is not obtained by the Closing;
(n) the permits, approvals, orders, authorizations, consents,
licenses and franchises which have been issued or granted to or are owned
by Allen for or in connection with the Comsearch Business; and
(o) the Employment Agreement dated August 11, 1998 between Allen and
Michael K. Morin (the "Morin Employment Agreement").
1.4 AGREEMENT TO CONVEY LCC PURCHASED ASSETS. Subject to the terms and
conditions of this Agreement and in reliance upon the representations,
warranties, covenants and agreements contained herein, at the Closing, LCC and
LCC GmbH shall sell, assign, transfer, convey and deliver to Allen, and Allen
shall accept from LCC and LCC GmbH, the LCC Purchased Assets (as defined in
Section 1.5).
1.5 LCC PURCHASED ASSETS. For purposes of this Agreement, "LCC Purchased
Assets" shall mean all right, title, benefit and interest of LCC and LCC GmbH in
and to all of the properties, business, assets, rights, benefits, privileges and
goodwill of LCC and LCC GmbH owned, leased, used, held for use or otherwise held
exclusively for or exclusively in connection with the LCC Products Business,
except for the LCC Excluded Assets (as defined in Section 1.6), wherever
situated and as the same exist on the Closing Date, including:
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(a) all of the furniture, fixtures, furnishings, machinery,
computers, equipment (mobile or otherwise), office materials and other
tangible personal property of every kind and description owned, leased,
used, held for use or otherwise held by LCC or LCC GmbH exclusively for
or exclusively in connection with the LCC Products Business, including
those items set forth in Schedule 1.5(a);
(b) all inventory of raw materials, work in process and finished
goods (including materials or goods in transit) owned, leased, used, held
for use or otherwise held by LCC or LCC GmbH exclusively for or
exclusively in connection with the LCC Products Business;
(c) all purchase orders placed by customers of LCC or LCC GmbH
exclusively for services or products of the LCC Products Business to the
extent the same remain unfulfilled on the Closing Date;
(d) all orders for materials and supplies for use in the LCC Products
Business which were placed by LCC or LCC GmbH with suppliers in the
ordinary course of the LCC Products Business and which remain unfulfilled
on the Closing Date;
(e) all accounts receivable and notes receivable from customers of
LCC or LCC GmbH with respect to products and services of the LCC Products
Business;
(f) all sales representative and distribution agreements which relate
exclusively to the conduct of the LCC Products Business by LCC or LCC
GmbH;
(g) all of LCC's and LCC GmbH's rights under any leases of equipment
used, held for use or otherwise held exclusively for or exclusively in
connection with the LCC Products Business;
(h) all Patents and Trademarks owned, leased, used, held for use or
otherwise held by LCC or LCC GmbH exclusively for or exclusively in
connection with the LCC Products Business, including the Patents and
Trademarks set forth and described in Schedule 1.5(h) (the "LCC Patents
and Trademarks");
(i) all computer software owned, leased, used, held for use or
otherwise held by LCC or LCC GmbH exclusively for or exclusively in
connection with the LCC Products Business, whether purchased, fully
developed or work in process, including the computer software set forth
in Schedule 1.5(i) (collectively, the "LCC Software"), including all data
bases, software codes (both source and object), functional and design
documentation, maintenance documentation, programmers' notes, automated
test software code, training manuals and all other information relating
to the LCC Software;
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(j) all licenses of LCC Software by LCC or LCC GmbH as licensor,
including the licenses set forth in Schedule 1.5(j);
(k) all licenses of computer software by LCC or LCC GmbH as licensee
which are used exclusively in the LCC Products Business, including those
set forth in Schedule 1.5(k);
(l) all Know-How owned, leased, used, held for use or otherwise held
exclusively for or exclusively in connection with the LCC Products
Business (the "LCC Know-How");
(m) all LCC's and LCC GmbH's rights under agreements with any present
or past employees of the LCC Products Business with respect to (i) the
non-disclosure of any of the LCC Know-How, (ii) the assignment to LCC or
LCC GmbH of such employee's rights to any inventions relating to the LCC
Products Business, or (iii) non-competition or non-solicitation by such
employee with respect to the LCC Products Business;
(n) all Contracts (including, without limitation, carnets specified
on Schedule 6.15(a) issued to LCC by the International Council and bond
amounts posted for equipment in foreign countries subject to such carnets
to which possession is obtained by Allen) related exclusively to the LCC
Products Business and that portion of Split Contracts (as defined in
Section 8.22(b)) which pertain to products of the LCC Products Business;
(o) the real property lease agreement, dated December 30, 1997, as
amended, between LCC GmbH and Hannover
Ruchversicherungs-Aktiengesellschaft;
(p) all of (i) LCC's and LCC GmbH's books of account, records, files,
invoices, customer data and other similar books, records and information
relating exclusively to the LCC Products Business, and (ii) LCC's and LCC
GmbH's engineering and other technical books, papers, logs, files and
records pertaining to the LCC Products Business;
(q) all of the outstanding shares of capital stock of LCC AS;
(r) all rights and claims of LCC or LCC GmbH, whether known or
unknown, absolute or contingent, matured or unmatured, or otherwise,
against third parties which relate exclusively to the LCC Purchased
Assets or the LCC Products Business, whether in tort, contract or
otherwise, including causes of action, unliquidated rights and claims
under or pursuant to all warranties, representations and guarantees made
by manufacturers, suppliers or vendors;
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(s) all permits, approvals, orders, authorizations, consents,
licenses and franchises which have been issued or granted to or are owned
by LCC or LCC GmbH exclusively for or exclusively in connection with the
LCC Products Business and all pending applications therefor;
(t) all petty cash held for use exclusively in the LCC Products
Business;
(u) the goodwill and going concern value associated with the LCC
Products Business, and all client and supplier lists relating to the LCC
Products Business; and
(v) prepayments and deposits made by LCC and LCC GmbH exclusively
with respect to the LCC Products Business.
1.6 LCC EXCLUDED ASSETS. Notwithstanding anything to the contrary
contained in this Agreement, the following assets ("LCC Excluded Assets") shall
be excluded from the LCC Purchased Assets and shall be retained by LCC and LCC
GmbH to the extent in existence on the Closing Date;
(a) all cash on hand and cash equivalents, other than petty cash held
for use exclusively in the LCC Products Business;
(b) all bank accounts;
(c) all of LCC's rights under those certain Agreements dated May 17,
1996 between LCC, L.L.C., as tenant, and West*Park Associates Limited
Partnership, as landlord, relating to the McLean Facility and all
leasehold improvements located therein;
(d) all securities other than the shares of LCC AS;
(e) the Western Wireless Agreement (as defined in Section 8.22(b)) to
the extent provided in Section 8.22;
(f) all insurance policies and any unearned premiums thereunder or
other rights to refunds thereunder;
(g) all claims for refunds of Taxes, including claims for refunds of
Taxes paid on behalf of any LCC Transferred Employee (as defined in
Section 8.7(b)), for all periods ending on or prior to the Closing Date;
(h) all intercompany receivables;
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(i) all books of account, records, files and other data of the LCC
Products Business maintained by LCC for the preparation of its
consolidated financial statements or Tax Returns;
(j) all Contracts related to indebtedness for borrowed money,
including guarantees of indebtedness for borrowed money, other than
capitalized leases for equipment included in the LCC Purchased Assets;
(k) all right, title and interest of LCC and LCC GmbH in and to the
name "LCC" and any trademark, tradename or corporate, trade or fictitious
name containing the acronym "LCC";
(l) (i) all Contracts set forth in Schedule 1.6(l) and (ii) subject
to Section 8.3, all Contracts set forth in Schedule 6.5 as to which any
consent, waiver or approval required in order to transfer or assign such
Contract to Allen is not obtained by the Closing;
(m) the permits, approvals, orders, authorizations, consents,
licenses and franchises which have been issued or granted to or are owned
by LCC or LCC GmbH for or in connection with the LCC Products Business as
to which any consent, waiver or approval required in order to transfer or
assign such permits, approvals, orders, authorizations, consents,
licenses and franchises to Allen is not obtained by the Closing;
(n) the products and equipment listed in Schedule 1.6(n) and all
Contracts related thereto (the "Retained LCC Products"); and
(o) all claims of LCC or LCC GmbH against GBR Berlinhaus relating to
or in connection with the matter described in Schedule 6.11.
1.7 NO WARRANTIES. Each party understands, agrees and acknowledges that
except for the representations and warranties expressly set forth in this
Agreement, the Comsearch Purchased Assets and the LCC Purchased Assets are being
purchased and sold on an "AS IS, WHERE IS" basis. ALL IMPLIED WARRANTIES
EXISTING UNDER ANY APPLICABLE LAW WITH RESPECT TO THE COMSEARCH PURCHASED ASSETS
OR THE LCC PURCHASED ASSETS OR TO THE SALE THEREOF ARE HEREBY EXPRESSLY
DISCLAIMED AND NEGATED. PARTICULARLY, BUT WITHOUT LIMITING THE FOREGOING, EACH
PARTY HEREBY NEGATES AND DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY, ANY
IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE AND ANY IMPLIED WARRANTY OF
CONFORMITY TO MODELS OR SAMPLES OF MODELS. THE PARTIES AGREE THAT, TO THE EXTENT
REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF IMPLIED
WARRANTIES CONTAINED IN THIS SECTION ARE "CONSPICUOUS" DISCLAIMERS FOR THE
PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER.
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ARTICLE 2
CLOSING
The consummation of the transactions contemplated hereby (the "Closing")
shall take place at the offices of Hogan & Hartson L.L.P., 555 Thirteenth
Street, N.W., Washington, D.C. 20004, at 10:00 a.m. on the later of October 15,
1998 and three Business Days (as defined in Section 16.7) following the
satisfaction of the conditions set forth in Articles 9, 10 and 11 (the "Closing
Date") or at such other place, time and date as the parties may hereafter agree
in writing but in no event later than the close of business on November 30,
1998.
ARTICLE 3
ASSUMPTION OF LIABILITIES
3.1 ASSUMPTION OF COMSEARCH ASSUMED LIABILITIES BY LCC. Subject to the
terms and conditions set forth herein, at the Closing, LCC shall assume and
agree to pay, perform and discharge when due or when required to be performed
all of the following liabilities which exist at or arise on or after the Closing
Date (collectively, the "Comsearch Assumed Liabilities"):
(a) all liabilities, obligations and commitments of Allen reflected
on the Comsearch June 30 Balance Sheet (as defined in Section 5.6) or
which were incurred by Allen in connection with the Comsearch Business
after June 30, 1998 in the ordinary course of business, consistent with
past practices and in accordance with this Agreement;
(b) all liabilities, obligations and commitments arising out of the
Contracts included as part of the Comsearch Purchased Assets, but not
including any liability for any breach thereof occurring on or prior to
the Closing Date;
(c) all liabilities for unpaid accrued vacation pay under Allen's
vacation policies for the Comsearch Transferred Employees, and all other
liabilities for Comsearch Transferred Employees to the extent
specifically assumed by LCC pursuant to Section 8.7;
(d) all warranty obligations to customers of the Comsearch Division
with respect to products or services of the Comsearch Business sold or
furnished on or prior to the Closing Date, but only to the extent of the
reserve therefor in the last Comsearch Subsequent Monthly Financial
Statement (as defined in Section 8.5) delivered to LCC prior to the
Closing Date, not to exceed the product of (i) the amount of the revenues
of the Comsearch Business for the one year period ending on the date of
such Comsearch
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Subsequent Monthly Financial Statement, multiplied by (ii) a fraction,
the numerator of which is equal to the reserve for such warranty
obligations in the Comsearch June 30 Balance Sheet, and the denominator
of which is equal to the revenues of the Comsearch Business for the one
year period ending on June 30, 1998;
(e) all liabilities, obligations and commitments of Allen
guaranteeing Telespectro's obligations under the Lease Agreement dated
May 15, 1998 between Telespectro and Equitas Consultores, S.C. pursuant
to the letter dated May 26, 1998 from Allen to Equitas Consultores, S.C.
and the General Agreement of Indemnity provided by Allen and Telespectro
to Fianzas Mexico Bital, S.A. with respect to the bond provided by it as
surety under such Lease Agreement (collectively, the "Telespectro Lease
Guarantee Agreements"), but not including any liability for any event or
occurrence on or prior to the Closing Date; and
(f) all liabilities, obligations and commitments of Allen for
prepayments and deposits from customers of Allen with respect to products
and services of the Comsearch Business.
3.2 COMSEARCH EXCLUDED LIABILITIES. Notwithstanding the provisions of
Section 3.1 or any other provision hereof or any schedule or exhibit hereto and
regardless of any disclosure to LCC, LCC shall not assume any liabilities,
obligations or commitments relating to or arising out of the operation of the
Comsearch Business or the ownership of the Comsearch Purchased Assets other than
the Comsearch Assumed Liabilities (the "Comsearch Excluded Liabilities").
Without limiting the generality of the foregoing, Comsearch Excluded Liabilities
shall include:
(a) any indebtedness for borrowed money, including guarantees of
indebtedness for borrowed money, other than capitalized leases for
equipment included in the Comsearch Purchased Assets;
(b) any liabilities for Taxes relating to or arising out of the
conduct of the Comsearch Business accruing, or with respect to any time
period, on or prior to the Closing Date;
(c) any product liability or strict liability claims with respect to
the products or services sold or provided by the Comsearch Business on or
prior to the Closing Date;
(d) warranty claims with respect to products sold or services
rendered by the Comsearch Business on or prior to the Closing Date to the
extent not assumed pursuant to Section 3.1(d);
(e) workers compensation claims by Comsearch Transferred Employees
arising solely from occurrences on or prior to the Closing Date;
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(f) employee discrimination, wrongful discharge and unfair labor
practice claims arising solely out of the conduct of the Comsearch
Business on or prior to the Closing Date;
(g) liabilities with respect to employees or employee benefit plans
except to the extent otherwise provided in Section 8.7;
(h) all Environmental Liabilities and Costs (as defined in Section
5.23) arising out of the operation of the Comsearch Business on or prior
to the Closing Date or relating to the Comsearch Excluded Assets or
arising from a Release (as defined in Section 5.11(b)) which occurred on
or prior to the Closing Date on any real property used in connection with
the Comsearch Business on or prior to the Closing Date;
(i) intercompany accounts payable;
(j) all liabilities, obligations and commitments to make any payment
to any Comsearch Transferred Employee with respect to the consummation of
the transactions contemplated hereby, including any payment required
pursuant to that certain letter, dated March 5, 1998, from Allen to
Michael K. Morin;
(k) subject to Section 8.3, all liabilities, obligations and
commitments arising out of the Contracts set forth in Schedule 5.5 as to
which any consent, waiver or approval required in order to transfer or
assign such Contract to LCC is not obtained by the Closing;
(l) all actions, claims, demands, suits, proceedings, arbitrations,
grievances, citations, summons, subpoenas, inquiries or investigations of
any nature arising out of the conduct of the Comsearch Business or the
ownership of the Comsearch Purchased Assets on or prior to the Closing
Date, including without limitation the matters described in Schedule
5.11; and
(m) all liabilities, obligations and commitments of Allen arising out
of the Morin Employment Agreement.
3.3 ASSUMPTION OF LCC ASSUMED LIABILITIES BY ALLEN. Subject to the terms
and conditions set forth herein, at the Closing, Allen shall assume and agree to
pay, perform and discharge when due or when required to be performed all of the
following liabilities which exist at or arise on or after the Closing Date
(collectively, the "LCC Assumed Liabilities"):
(a) all liabilities, obligations and commitments of LCC and LCC GmbH
reflected on the LCC Products June 30 Balance Sheet (as defined in
Section 6.6) or which were incurred by LCC or LCC GmbH in connection with
the LCC Products Business
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after June 30, 1998 in the ordinary course of business, consistent with
past practices and in accordance with this Agreement;
(b) all liabilities, obligations and commitments arising out of the
Contracts included as part of the LCC Purchased Assets, but not including
any liability for any breach thereof occurring on or prior to the Closing
Date;
(c) all liabilities for unpaid accrued vacation pay under LCC's
vacation policies for the LCC Transferred Employees, and all other
liabilities for LCC Transferred Employees to the extent specifically
assumed by Allen pursuant to Section 8.7;
(d) all warranty obligations to customers of LCC with respect to the
products and services of the LCC Products Business sold or furnished on
or prior to the Closing Date, but only to the extent of the reserve
therefor in the last LCC Products Subsequent Monthly Financial Statement
(as defined in Section 8.5) delivered to Allen prior to the Closing Date,
not to exceed the product of (i) the amount of the revenues of the LCC
Products Business for the one year period ending on the date of such LCC
Products Subsequent Monthly Financial Statement, multiplied by (ii) a
fraction, the numerator of which is equal to the reserve for such
warranty obligations in the LCC Products June 30 Balance Sheet, and the
denominator of which is equal to the revenues of the LCC Products
Business for the one year period ending on June 30, 1998; and
(e) all liabilities, obligations and commitments of LCC and LCC GmbH
for prepayments and deposits from customers of LCC and LCC GmbH with
respect to products and services of the LCC Products Business.
3.4 LCC PRODUCTS EXCLUDED LIABILITIES. Notwithstanding the provisions of
Section 3.3 or any other provision hereof or any schedule or exhibit hereto and
regardless of any disclosure to Allen, Allen shall not assume any liabilities,
obligations or commitments relating to or arising out of the operation of the
LCC Products Business or the ownership of the LCC Purchased Assets other than
the LCC Products Assumed Liabilities (the "LCC Products Excluded Liabilities").
Without limiting the generality of the foregoing, LCC Products Excluded
Liabilities shall include:
(a) any indebtedness for borrowed money, including guarantees of
indebtedness for borrowed money, other than capitalized leases for
equipment included in the LCC Purchased Assets;
(b) any liabilities for Taxes relating to or arising out of the
conduct of the LCC Products Business accruing, or with respect to any
time period, on or prior to the Closing Date;
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(c) any product liability and strict liability claim with respect to
the products or services sold or provided by the LCC Products Business on
or prior to the Closing Date;
(d) warranty claims with respect to products sold or services
rendered by the LCC Products Business on or prior to the Closing Date to
the extent not assumed pursuant to Section 3.3(d);
(e) workers compensation claims by LCC Transferred Employees arising
solely from occurrences on or before the Closing Date;
(f) employee discrimination, wrongful discharge and unfair labor
practice claims arising solely out of the conduct of the LCC Products
Business on or prior to the Closing Date;
(g) liabilities with respect to employees or employee benefit plans
except to the extent otherwise provided in Section 8.7;
(h) all Environmental Liabilities and Costs arising out of the
operation of the LCC Products Business on or prior to the Closing Date or
relating to the LCC Excluded Assets or arising from a Release which
occurred on or prior to the Closing Date on any real property used in
connection with the LCC Products Business on or prior to the Closing
Date;
(i) intercompany accounts payable;
(j) all liabilities arising from claims by GBR Berlinhaus relating to
or in connection with the matters described in Schedule 6.11; and
(k) all actions, claims, demands, suits, proceedings, arbitrations,
grievances, citations, summons, subpoenas, inquiries or investigations of
any nature arising out of the conduct of the LCC Products Business or the
ownership of the LCC Purchased Assets on or prior to the Closing Date,
including without limitation the matters described on Schedule 6.11.
ARTICLE 4
TERMS OF THE EXCHANGE
4.1 EXCHANGE OF ASSETS. Subject to the terms and conditions of this
Agreement, at the Closing, (a) Allen and ATII shall convey the Comsearch
Purchased Assets to LCC in exchange for (i) the conveyance of the LCC Purchased
Assets to Allen and (ii) LCC's
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assumption of the Comsearch Assumed Liabilities, and (b) LCC and LCC GmbH shall
convey the LCC Purchased Assets to Allen in exchange for (i) the conveyance of
the Comsearch Purchased Assets to LCC and (ii) Allen's assumption of the LCC
Assumed Liabilities.
4.2 ALLOCATION OF ASSET VALUES. Allen and LCC represent, warrant,
covenant and agree with each other that the value of the Comsearch Purchased
Assets, the Comsearch Assumed Liabilities, the LCC Purchased Assets and the LCC
Assumed Liabilities shall be allocated for tax purposes based on their
respective fair market values as of the Closing Date. Allen and LCC shall use
their best efforts to agree on such allocation as soon as practicable. The
parties shall give effect to the allocation established pursuant to this Section
4.2 for income tax reporting, financial statement and all other purposes,
including, without limitation, completion of Form 8594 (Asset Acquisition
Statement) as required by Section 1060 of the Code (as defined in Section
5.9(a)).
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ALLEN
Allen hereby represents and warrants to, and covenants and agrees with,
LCC as follows, it being understood that, for purposes of this Article 5,
regardless of whether or not consent to assignment is obtained, the Contracts
referred to in Section 1.3(n) are included in the Comsearch Purchased Assets
and, to the extent provided in Section 3.1(b), in the Comsearch Assumed
Liabilities:
5.1 ORGANIZATION. Allen is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Each of the
Comsearch Subsidiaries (as defined in Section 5.7(a)) and ATII is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of Allen, ATII and the Comsearch
Subsidiaries has all requisite corporate power and authority to own, lease and
operate its properties and the Comsearch Business as presently conducted by it
and each of Allen and ATII has all requisite power and authority to enter into
this Agreement and perform its obligations hereunder.
5.2 CORPORATE AUTHORITY. (a) The execution, delivery and performance of
this Agreement by Allen and ATII, and the consummation by Allen and ATII of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of each of Allen and ATII, and (b) this Agreement
has been duly executed and delivered by each of Allen and ATII and constitutes
the legal, valid and binding obligation of each of Allen and ATII, enforceable
against Allen and ATII in accordance with its terms, except to the extent that
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enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and subject to
general principles of equity.
5.3 QUALIFICATION. Allen is qualified to do business as a foreign
corporation in, and is in good standing under the laws of, the Commonwealth of
Virginia. Allen, ATII and each Comsearch Subsidiary are each qualified to do
business as a foreign corporation in, and are in good standing under the laws
of, each other jurisdiction in which the conduct of the Comsearch Business or
the ownership of the assets of the Comsearch Business requires such
qualification, except where the failure to qualify would not have a material
adverse effect on the results of operations, financial condition or prospects of
the Comsearch Business (a "Comsearch Material Adverse Effect"). For purposes of
the definition of Comsearch Material Adverse Effect, an event, occurrence, fact,
condition or effect shall not be deemed to be materially adverse unless it
involves $250,000 or more.
5.4 NO CONFLICT. Except as set forth in Schedule 5.4, neither the
execution and delivery of this Agreement by Allen or ATII nor the consummation
of the transactions contemplated hereby will conflict with or result in a breach
of any of the provisions of, or constitute a default under, the certificate of
incorporation or by-laws of Allen, Comsearch Holdings, or ATII, as amended to
date, or the charter, by-laws or other organizational document of Telespectro or
Comsearch UK, as amended to date, or any Contract to which Allen, ATII or any
Comsearch Subsidiary is a party or by which Allen, ATII or any Comsearch
Subsidiary, or any of their respective property, is bound, or result in the
violation of any law, rule, regulation, order, judgment or decree to which
Allen, ATII or any Comsearch Subsidiary, or any of their respective property, is
subject.
5.5 CONSENTS. No consent, approval or authorization of, or declaration or
filing with, any Governmental Authority (as defined in Section 5.11(b)(ii)) is
required on the part of Allen, ATII or any Comsearch Subsidiary in connection
with the execution, delivery or performance of this Agreement, except for
filings with (a) the Federal Trade Commission (the "FTC") and the Antitrust
Division of the Department of Justice ("DOJ") pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (b) the
Norwegian Ministry of Industry and Trade pursuant to the Norwegian Act of 23
December 1994 No 79 Relating to the Acquisition of Business Undertakings (the
"Norwegian Acquisition Act 1994"), (c) the German Federal Cartel Office pursuant
to Section 23, paragraph 1, 1st sentence GWB (Act Against Restraints on
Competition) (the "German Act Against Restraints on Competition"), and (d) the
United Kingdom Office of Fair Trading pursuant to Section 24 of the United
Kingdom Restrictive Trade Practices Act 1976 (the "UK Restrictive Practices
Act"). Except as disclosed in Schedule 5.4 or 5.5, no consent of any Person is
required under any Comsearch Contract (as defined in Section 5.15(a)) as a
result of or in connection with, and the enforceability of each Comsearch
Contract will not be affected in any manner by, the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby.
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5.6 FINANCIAL STATEMENTS. The unaudited financial statements of the
Comsearch Business (including the balance sheet and statement of income) for the
fiscal year ended December 31, 1997 ("Comsearch Year-End Financial Statements")
and the interim financial statements of the Comsearch Business (including the
balance sheet and statement of income) as of June 30, 1998 (the "Comsearch
Interim Financial Statements"), copies of which are attached hereto as Schedule
5.6(a), have been prepared from the books and records of the Comsearch Business
(including the balance sheet and statement of income) in accordance with
generally accepted accounting principles ("GAAP") applied consistently subject,
in the case of the Comsearch Interim Financial Statements, to normal year end
adjustments, and present fairly the assets, liabilities and results of
operations of the Comsearch Business as of the dates and for the periods
indicated. The balance sheet of the Comsearch Business as of June 30, 1998,
attached hereto as Schedule 5.6(b) (the "Comsearch June 30 Balance Sheet"),
shows as assets only assets which would have been Comsearch Purchased Assets had
the Closing occurred on June 30, 1998 and as liabilities all liabilities which
would have been Comsearch Assumed Liabilities had the Closing occurred on June
30, 1998, determined in accordance with GAAP applied on a basis consistent with
prior periods.
5.7 SUBSIDIARIES.
(a) The entire authorized capital stock of Comsearch Holdings
consists of 1,000 shares of common stock, $1.00 par value per share, of which
100 are presently issued and outstanding, all of which are owned by Allen free
and clear of all Liens (as defined in Section 5.10). The entire authorized
capital stock of Comsearch UK consists of 100 ordinary shares, Pound
Sterling1.00 nominal value per share, of which one (1) share is presently issued
and outstanding and owned by Comsearch Holdings free and clear of all Liens. The
authorized capital stock of Telespectro is variable and consists of shares of
Class 1 Series B Common Stock, one peso nominal value per share, of which 50,000
are presently issued and outstanding, 49,000 of which are owned by Comsearch
Holdings and 1,000 of which are owned by ATII, in each case free and clear of
all Liens. Comsearch Holdings, Comsearch UK and Telespectro are referred to in
this Agreement individually as a "Comsearch Subsidiary" and collectively as the
"Comsearch Subsidiaries." There are no options, warrants, rights, conversion
rights or other Contracts to which any of Allen, ATII or any Comsearch
Subsidiary is a party or by which any of them is bound providing for the
issuance, disposition or acquisition of any of the capital stock of or other
interest in any Comsearch Subsidiary.
(b) Except for ATII and the Comsearch Subsidiaries, Allen does not
own, directly or indirectly, any shares of or equity interest in any
corporation, partnership, limited liability company, joint venture, association
(excluding memberships in trade associations) or other entity which is engaged
in the Comsearch Business.
(c) Allen has previously furnished to LCC a true and correct copy of
the charter and by-laws or other organizational document of each Comsearch
Subsidiary. Allen will have made available to LCC the complete minute book of
each Comsearch Subsidiary prior to
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the Closing. All corporate actions taken by the shareholders and the Board of
Directors of each Comsearch Subsidiary are fairly and accurately summarized in
all material respects in the minute book of such Comsearch Subsidiary.
5.8 ABSENCE OF UNDISCLOSED LIABILITIES. Neither Allen nor any Comsearch
Subsidiary has any liabilities or obligations of any nature, whether known or
unknown, absolute or contingent, matured or unmatured or otherwise and whether
due or to become due, arising out of or relating to the Comsearch Business other
than Comsearch Excluded Liabilities, except (i) the Comsearch Contracts, (ii) as
set forth in Schedule 5.8, (iii) as and to the extent reflected in or reserved
against in the Comsearch June 30 Balance Sheet, and (iv) for liabilities and
obligations that (A) were incurred after June 30, 1998 in the ordinary course of
business consistent with past practice and (B) individually and in the aggregate
are not material to the Comsearch Business and have not had or resulted, and
will not have or result in, a Comsearch Material Adverse Effect.
5.9 TAXES.
(a) Each of Allen and the Comsearch Subsidiaries has (or by the
Closing will have) duly and timely filed all returns, reports, declarations,
forms, information returns and statements with respect to Taxes (as hereinafter
defined) (collectively, the "Tax Returns") required to be filed with respect to
Taxes relating to the Comsearch Business due on or before the Closing Date
("Covered Comsearch Taxes"). Except for the Covered Comsearch Taxes set forth on
Schedule 5.9(a) which are being contested in good faith and by appropriate
proceedings, the following Covered Comsearch Taxes have (or by the Closing Date
will have) been duly and timely paid or accrued: (i) all Covered Comsearch Taxes
shown to be due on the Tax Returns filed with respect thereto, and (ii) all
deficiencies and assessments of Covered Comsearch Taxes of which notice has (or
by the Closing Date will have) been received by Allen or any Comsearch
Subsidiary that are or may become payable by LCC or chargeable as a Lien or
charge upon the Comsearch Business or any Comsearch Purchased Asset. All Taxes
required to be withheld by or on behalf of Allen or any Comsearch Subsidiary in
connection with amounts paid or owing to any employee, independent contractor,
creditor or other party with respect to the Comsearch Business ("Comsearch
Withholding Taxes") have been withheld, and such Comsearch Withholding Taxes
have either been duly and timely paid to the proper Governmental Authorities (as
defined in Section 5.11(b)) or set aside in accounts for such purpose. As used
in this Agreement, "Tax" means any federal, state, provincial, local, foreign,
or any other income, alternative, minimum, accumulated earnings, personal
holding company, franchise, capital stock, net worth, capital, profits, windfall
profits, gross receipts, value added, sales, use, goods and services, excise,
customs duties, transfer, conveyance, mortgage, registration, stamp,
documentary, recording, premium, severance, environmental, including taxes under
Section 59A of the Internal Revenue Code of 1986, as amended (the "Code"), real
property, personal property, ad valorem, intangibles, rent, occupancy, license,
occupational, employment, unemployment insurance, social security, disability,
workers' compensation, payroll, health care, withholding, estimated or other
similar tax, duty or other governmental charge or assessment or
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deficiencies thereof (including all interest and penalties thereon and additions
thereto whether disputed or not).
(b) Except as set forth on Schedule 5.9(b), no agreement or other
document extending, or having the effect of extending, the period of assessment
or collection of any Covered Comsearch Taxes or Comsearch Withholding Taxes, and
no power of attorney with respect to any such Taxes, has been filed with the
Internal Revenue Service or any other Governmental Authority.
(c) LCC will not be required to deduct and withhold any amount
pursuant to Section 1445(a) of the Code upon the transfer of the Comsearch
Business to LCC.
(d) Except as set forth on Schedule 5.9(d), there is no litigation or
administrative proceeding pending or, to the knowledge of Allen, threatened,
against or relating to Allen or any Comsearch Subsidiary in connection with
Covered Comsearch Taxes.
(e) There is not, and there are no circumstances which could give
rise to, any dispute between Allen, Comsearch Holdings or Comsearch UK and any
other Person as to the entitlement to capital allowances in respect of the
Comsearch Purchased Assets under Sections 51 to 59 of the United Kingdom Capital
Allowances Act 1990 (fixtures).
(f) All Contracts and other documents to which any Comsearch UK is a
party and which are necessary to establish its title to any Comsearch Purchased
Asset or in the enforcement of which it may be otherwise interested have been
duly stamped and Comsearch UK has not executed any such Contract or other
document outside the United Kingdom which, if brought into the United Kingdom,
would be subject to stamp duty.
5.10 ABSENCE OF CHANGES. Except as set forth in Schedule 5.10, since June
30, 1998, Allen, ATII and the Comsearch Subsidiaries have conducted the
Comsearch Business only in the ordinary course consistent with prior practice
and have not, on behalf of, in connection with or relating to the Comsearch
Business or the Comsearch Purchased Assets:
(a) suffered any Comsearch Material Adverse Effect;
(b) incurred any obligation, commitment or liability, known or
unknown, absolute or contingent, matured or unmatured, or otherwise,
whether due or to become due, except current liabilities for trade or
business obligations incurred in connection with the purchase or sale of
goods or services in the ordinary course of business consistent with
prior practice, none of which liabilities, in any case or in the
aggregate, could have a Comsearch Material Adverse Effect;
(c) discharged or satisfied any Lien other than those then required
to be discharged or satisfied, or paid any obligation, commitment or
liability, known or
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unknown, absolute or contingent, matured or unmatured, or otherwise,
whether due or to become due, other than current liabilities shown on the
Comsearch June 30 Balance Sheet and current liabilities incurred since
the date thereof in the ordinary course of business consistent with prior
practice;
(d) mortgaged, pledged or subjected to Lien, any property, business
or assets, tangible or intangible, held in connection with the Comsearch
Business;
(e) sold, transferred, leased to others or otherwise disposed of any
of the Comsearch Purchased Assets or any asset or property of any
Comsearch Subsidiary, except for inventory sold in the ordinary course of
business and licenses of Comsearch Software or software licenses of any
Comsearch Subsidiary granted in the ordinary course of business, or
canceled or compromised any debt or claim, or waived or released any
right of substantial value;
(f) received any notice of termination of any Contract relating to
the Comsearch Business or suffered any damage, destruction or loss
(whether or not covered by insurance) which, in any case or in the
aggregate, has had a Comsearch Material Adverse Effect;
(g) transferred or granted any rights under, or entered into any
settlement regarding the breach or infringement of, any Comsearch Patents
and Trademarks or Comsearch Know-How or any Patents and Trademarks or
Know-How of any Comsearch Subsidiary other than licenses of Comsearch
Software or software licenses of any Comsearch Subsidiary granted in the
ordinary course of business, or modified any existing rights with respect
thereto;
(h) made any change in the rate of compensation, commission, bonus or
other direct or indirect remuneration payable, or paid or agreed or
orally promised to pay, conditionally or otherwise, any bonus, incentive,
retention or other compensation, retirement, welfare, fringe or severance
benefit or vacation pay, to or in respect of any Comsearch Transferred
Employees, except in the ordinary course of business;
(i) encountered any labor union organizing activity, had any actual
or, to the knowledge of Allen, threatened, employee strikes, work
stoppages, slowdowns or lockouts, or had any material change in its
relations with the employees, agents, customers or suppliers;
(j) failed to replenish inventories and supplies in a normal and
customary manner consistent with prior practice and prudent business
practices prevailing in the industry, or made any purchase commitment in
excess of the normal, ordinary and usual requirements of the Comsearch
Business or at any price in excess of the then current market price or
upon terms and conditions more onerous than those usual and customary
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in the industry, or made any change in the selling, pricing, advertising
or personnel practices inconsistent with prior practice and prudent
business practices prevailing in the industry;
(k) made any capital expenditures or capital additions or
improvements in excess of $25,000 individually or $150,000 in the
aggregate;
(l) instituted, settled or agreed to settle any litigation, action or
proceeding before any Governmental Authority other than in the ordinary
course of business consistent with past practice but not in any case
involving amounts in excess of $25,000;
(m) made any material change in any accounting procedures or
practices applied in keeping the books and records of the Comsearch
Business;
(n) issued any securities of any Comsearch Subsidiary, or options or
other rights to acquire any such securities;
(o) entered into any transaction or Contract other than in the
ordinary course of business, or incurred any severance pay obligations by
reason of this Agreement or the transactions contemplated hereby, except
for the Morin Employment Agreement; or
(p) taken any action or omitted to take any action that would result
in the occurrence of any of the foregoing.
As used in this Agreement, "Lien" means any mortgage, pledge,
hypothecation, claim, security interest, lien, encumbrance, voting trust
agreement, option, right of first refusal or any other encumbrance.
5.11 LITIGATION.
(a) Except as set forth on Schedule 5.11, there is no action, claim,
demand, suit, proceeding, arbitration, grievance, citation, summons,
subpoena, inquiry or investigation of any nature, civil, criminal,
regulatory or otherwise, in law or in equity, pending or, to the
knowledge of Allen, threatened against or relating to Allen (in
connection with the Comsearch Purchased Assets or the Comsearch
Business), or any Comsearch Subsidiary or against or relating to the
transactions contemplated by this Agreement, and Allen does not know or
have reason to be aware of any basis for the same. Except as set forth in
Schedule 5.11, no citations, fines or penalties have been asserted
against Allen (with respect to the Comsearch Business) or any Comsearch
Subsidiary or their predecessors since January 1, 1993 under any
Environmental Law (as hereinafter defined).
(b) As used in this Agreement:
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(i) "Environmental Law" means all Applicable Laws (as hereinafter
defined) relating to the protection of the environment, to human health
and safety, or to any emission, discharge, generation, processing,
storage, holding, abatement, existence, Release, threatened Release or
transportation of any Hazardous Substances (as hereinafter defined),
including, without limitation, (i) the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), the Resource
Conservation and Recovery Act, the Occupational Safety and Health Act,
and any similar foreign laws, (ii) all other requirements pertaining to
reporting, licensing, permitting, investigation or remediation of
emissions, discharges, releases or threatened releases of Hazardous
Substances into the air, surface water, groundwater or land, or relating
to the manufacture, processing, distribution, use, sale, treatment,
receipt, storage, disposal, transport or handling of Hazardous
Substances, and (iii) all other requirements pertaining to the protection
of the health and safety of employees or the public.
(ii) "Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government, including, without limitation, any
government authority, agency, department, board, commission or
instrumentality of the United States, any state of the United States or
any political subdivision thereof, and any tribunal or arbitrator(s) of
competent jurisdiction, and any self-regulatory organization.
(iii) "Applicable Law" means all applicable provisions of all (A)
constitutions, treaties, statues, laws (including the common law), rules,
regulations, ordinances, codes or orders of any Governmental Authority,
(B) any consent of, with or to any governmental Authority and (C) orders,
decisions, injunctions, judgments, awards and decrees of or agreements
with any Governmental Authority.
(iv) "Hazardous Substances" mean any substance that: (A) is or
contains asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum or petroleum-derived substances or wastes, radon gas
or related materials, (B) requires investigation, removal or remediation
under any Environmental Law, or is defined, listed or identified as a
"hazardous waste" or "hazardous substance" thereunder, or (C) is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic, or otherwise hazardous and is regulated by any Governmental
Authority or Environmental Law.
(v) "Release" means any releasing, disposing, discharging, injecting,
spilling, leaking, leaching, pumping, dumping, emitting, escaping,
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emptying, seeping, dispersal, migration, transporting, placing and the
like, including without limitation, the moving of any materials through,
into, or upon, any land, soil, surface water, ground water or air, or
otherwise entering into the environment.
5.12 COMPLIANCE WITH LAWS; GOVERNMENTAL APPROVALS AND CONSENTS;
GOVERNMENTAL CONTRACTS.
(a) Except as otherwise disclosed in Schedule 5.12(a), since January 1,
1993 Allen and each Comsearch Subsidiary have complied in all respects with all
Applicable Laws applicable to the Comsearch Business or the Comsearch Purchased
Assets, except where the failure so to comply would not, individually or in the
aggregate, have a Comsearch Material Adverse Effect, and neither Allen nor any
Comsearch Subsidiary nor any of their respective predecessors has received any
notice alleging any conflict with, violation of, breach of or default with
respect to the Comsearch Business or the Comsearch Purchased Assets under any
such Applicable Law which has not been previously cured.
(b) Schedule 5.12(b) sets forth all permits, consents or approvals of any
Governmental Authority necessary for, or otherwise material to, the conduct of
the Comsearch Business. Except as set forth in Schedule 5.12(b), all such
permits, approvals and consents have been duly obtained and are in full force
and effect, and Allen and each Comsearch Subsidiary is in compliance with the
same, except where the failure so to comply would not, individually or in the
aggregate, have a Comsearch Material Adverse Effect.
(c) Schedule 5.12(c) sets forth all Contracts with any Governmental
Authority related to the Comsearch Business.
5.13 PERSONS CONDUCTING COMSEARCH BUSINESS. Except as set forth in
Schedule 5.13, Allen has conducted the Comsearch Business only through the
Comsearch Division and the Comsearch Subsidiaries and not through any other
division or direct or indirect subsidiary or Affiliate (as hereinafter defined)
of Allen and each Comsearch Subsidiary has conducted the Comsearch Business only
through itself. As used in this Agreement, "Affiliate" of a Person (as
hereinafter defined) means a Person that directly or indirectly through one or
more intermediaries, is controlled by the first Person. "Control" (including the
term "controlled by") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management policies of a Person, whether
through the ownership of voting securities, by Contract, as trustee or executor,
or otherwise. As used in this Agreement, "Person" means any natural person,
firm, partnership, association, corporation, company, trust, business trust,
Governmental Authority or other entity.
5.14 TITLE TO ASSETS. Except as disclosed in Schedule 5.14, Allen and the
Comsearch Subsidiaries, as applicable, have good title to all the Comsearch
Purchased Assets and all the assets of the Comsearch Subsidiaries, free and
clear of any and all Liens. On the Closing Date,
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LCC will acquire good title to or a valid leasehold interest in, as applicable,
and all right, title and interest in, the Comsearch Purchased Assets, free and
clear of all Liens. The Comsearch Purchased Assets and all the assets of the
Comsearch Subsidiaries comprise all assets required for the continued conduct of
the Comsearch Business by LCC as now being conducted by Allen and the Comsearch
Subsidiaries, except for the Comsearch Excluded Assets. The Comsearch Purchased
Assets and the assets of the Comsearch Subsidiaries, taken as a whole,
constitute all the properties and assets relating to or used or held for use in
connection with the Comsearch Business during the past twelve months (except
inventory sold, cash disposed of, accounts receivable collected, prepaid
expenses realized, Contracts fully performed, properties or assets replaced by
equivalent or superior properties or assets, in each case in the ordinary course
of business, employees not hired by LCC, and the Comsearch Excluded Assets).
Except for Comsearch Excluded Assets, there are no assets or properties used in
the operation of the Comsearch Business and owned by any Person other than Allen
or any Comsearch Subsidiary that will not be leased or licensed to LCC or the
Comsearch Subsidiaries at the Closing under valid, current leases or license
arrangements. The rights and Contracts identified in Section 1.3(d) and Section
1.3(e) relate exclusively to IQ-Analyzer. There is no real property owned by
Allen or any Comsearch Subsidiary which is used in connection with the Comsearch
Business. The Comsearch Purchased Assets and all the assets of the Comsearch
Subsidiaries are in all material respects adequate for the purposes for which
such assets are currently used or are held for use, and are in reasonably good
repair and operating condition (subject to normal wear and tear) and, to the
knowledge of Allen, there are no facts or conditions affecting the Comsearch
Purchased Assets or the assets of the Comsearch Subsidiaries which could,
individually or in the aggregate, interfere in any material respect with the
use, occupancy or operation thereof as currently used, occupied or operated.
5.15 CONTRACTS.
(a) Schedule 5.15(a) contains a complete and correct list of all
Contracts of the types described below (x) by which any of the Comsearch
Purchased Assets or any assets of any Comsearch Subsidiary are bound or affected
or (y) to which Allen or a Comsearch Subsidiary is a party or by which it is
bound in connection with the Comsearch Business or the Comsearch Purchased
Assets (other than Contracts which are Comsearch Excluded Assets or Comsearch
Excluded Liabilities) (the "Comsearch Contracts"):
(i) leases concerning or relating to any real property used in
connection with the Comsearch Business, other than the Reston Facility;
(ii) employment, collective bargaining or other similar Contracts
relating to or for the benefit of the Comsearch Transferred Employees, or
with sales representatives, distributors, dealers, agents, independent
contractors or consultants;
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(iii) licenses, licensing arrangements and other Contracts
providing in whole or in part for the use of, or limiting the use of, any
Comsearch Patents and Trademarks or any Comsearch Software;
(iv) joint venture, partnership and similar Contracts involving a
sharing of profits;
(v) asset purchase agreements and other acquisition or divestiture
Contracts involving indemnity or other obligations which are continuing
through the date hereof or the Closing Date;
(vi) orders and other Contracts for the purchase or sale of
materials, supplies, products or services, each of which involves
aggregate payments in excess of $50,000;
(vii) any Contract as to which the aggregate amount that could
reasonably be expected to be paid or received thereunder in the future
exceeds $50,000 per annum;
(viii) sales agency, manufacturer's representative, marketing or
distributorship Contracts;
(ix) Contracts with respect to the representation of the Comsearch
Business in foreign countries;
(x) any lease Contract providing for the leasing of both (A)
personal property primarily used in, or held for use primarily in
connection with, the Comsearch Business and (B) other personal property;
(xi) Contracts with any employee, director, officer or Affiliate
of Allen or any Comsearch Subsidiary;
(xii) loan agreements, indentures, letters of credit, mortgages,
security agreements, pledge agreements, deeds of trust, bonds, notes,
guarantees and other Contracts relating to the borrowing of money or
extension of credit; and
(xiii) any other Contracts that are material to the Comsearch
Business.
(b) Except as set forth in Schedule 5.15(a), Allen has delivered or
made available to LCC complete and correct copies of all written Comsearch
Contracts, together with all amendments thereto, and accurate descriptions of
all material terms of all oral Comsearch Contracts, set forth or required to be
set forth in Schedule 5.15(a).
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(c) All Comsearch Contracts are in full force and effect and
constitute a valid and binding obligation of each party thereto, enforceable in
accordance with their terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and subject to general principles of
equity. There does not exist under any Comsearch Contract any violation, breach
or event of default or event or condition that, after notice or lapse of time or
both, would constitute a violation, breach or event of default thereunder on the
part of Allen or any Comsearch Subsidiary or, to the knowledge of Allen, any
other party thereto, except as set forth in Schedule 5.15(c).
(d) Except as set forth in Schedule 5.15(d), there is not outstanding
any power of attorney relating to the Comsearch Business.
5.16 TERRITORIAL RESTRICTIONS. Except as set forth in Schedule 5.16,
neither Allen nor any Comsearch Subsidiary is restricted by any written Contract
with any other Person from carrying on the Comsearch Business anywhere in the
world. LCC, solely as a result of its purchase of the Comsearch Business from
Allen pursuant hereto, the acquisition, directly or indirectly, of the shares of
any Comsearch Subsidiary, and the assumption of the Comsearch Assumed
Liabilities, will not thereby become restricted from carrying on any business
anywhere in the world except as expressly provided in this Agreement or in any
Contract executed and delivered pursuant to the terms hereof.
5.17 INVENTORIES. All inventories of the Comsearch Business are of good,
usable and merchantable quality in all material respects and do not include
obsolete or discontinued items except to the extent of the reserves therefor
included in the Comsearch June 30 Balance Sheet or as set forth on Schedule
5.17. Except as set forth on Schedule 5.17, (a) all such inventories are of such
quality as to meet the quality control standards of Allen and any applicable
quality control standards of any Governmental Authority, (b) all such
inventories that are finished goods are salable as current inventories at the
current prices thereof in the ordinary course of business, (c) all such
inventories are recorded on the books of the Comsearch Business at the lower of
cost or market value determined in accordance with GAAP, and (d) no write down
in inventory related to net realizable value or product line obsolescence should
have been made pursuant to GAAP during the past two years. Schedule 5.17 lists
the locations of all such inventories.
5.18 CUSTOMERS. Schedule 5.18 sets forth (a) the names and
addresses of all customers of Allen and each Comsearch Subsidiary that were
invoiced $50,000 or more during the twelve-month period ended December 31, 1997
or $25,000 or more during the period from January 1, 1998 through September 8,
1998 for goods and services with respect to the Comsearch Business, and (b) the
amount for which each such customer was invoiced during such periods. Neither
Allen nor any Comsearch Subsidiary has received any notice that any customer
that was invoiced more than $50,000 during the twelve-month period ended
December 31, 1997 or $25,000 or more during the period from January 1, 1998
through September 8, 1998 for goods and services with respect to the Comsearch
Business, (i) has ceased, or will cease, to use the products, goods
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or services of Comsearch, (ii) has substantially reduced or will substantially
reduce, the use of products, goods or services of Comsearch, including in each
case after the consummation of the transactions contemplated hereby, other than
in connection with ordinary fluctuations or customer ordering cycles in the
Comsearch Business. To the knowledge of Allen, no customer described in the
preceding sentence has otherwise threatened to take any action described in the
preceding sentence as a result of the consummation of the transactions
contemplated by this Agreement.
5.19 SUPPLIERS; RAW MATERIALS. Schedule 5.19 sets forth (a) the names
and addresses of all suppliers (including without limitation Allen and any
Affiliates thereof) from which Allen or any Comsearch Subsidiary ordered raw
materials, supplies, merchandise and other goods and services in connection with
the Comsearch Business with an aggregate purchase price for each such supplier
of $50,000 or more during the twelve-month period ended December 31, 1997 or
$25,000 or more during the period from January 1, 1998 through August 31, 1998,
and (b) the amount for which such supplier invoiced Allen and the Comsearch
Subsidiary for such goods and services during such periods. Neither Allen nor
any Comsearch Subsidiary has received any notice that there has been any
material adverse change in the price of such raw materials, supplies,
merchandise or other goods or services, or that any supplier from which Allen or
any Comsearch Subsidiary ordered raw materials, supplies, merchandise and other
goods and services in connection with the Comsearch Business with an aggregate
purchase price for each such supplier of $50,000 or more during the twelve-
month period ended December 31, 1997 or $25,000 or more during the period from
January 1, 1998 through the date of this Agreement will not sell raw materials,
supplies, merchandise and other goods to LCC at any time after the Closing Date
on terms and conditions similar to those used in its current sales to Allen and
the Comsearch Subsidiaries, subject to general and customary price increases. To
the knowledge of Allen, no supplier described in the preceding sentence has
otherwise threatened to take any action described in the preceding sentence as a
result of the consummation of the transactions contemplated by this Agreement.
5.20 PRODUCT WARRANTIES. Except as set forth in Schedule 5.20 and for
warranties under Applicable Law, (a) there are no warranties express or implied,
written or oral, with respect to the products or services of the Comsearch
Business, and (b) there are no pending or, to the knowledge of Allen, threatened
claims with respect to any such warranty as of the date hereof, and neither
Allen nor any Comsearch Subsidiary has any liability with respect to any such
warranty, whether known or unknown, absolute or contingent, matured or
unmatured, or otherwise, whether due or to become due, except to the extent of
the reserve therefor included in the Comsearch June 30 Balance Sheet.
5.21 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither Allen nor any
Comsearch Subsidiary, nor any officer, employee or agent of Allen or any
Comsearch Subsidiary, or any other Person acting on their behalf, has, directly
or indirectly, within the past five years given or agreed to give any gift or
payment to or for the benefit of any official or employee of any Governmental
Authority of any country or subdivision thereof, or any person acting in an
official
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capacity on behalf of such Governmental Authority, or any political party or
official thereof, or any candidate for political office, (i) for the purposes of
influencing any act or decision of such person or party in his or its
officialcapacity, or inducing such person or party to use his or its influence
to affect or influence any act or decision of such Governmental Authority, in
order to assist the Comsearch Business in obtaining or retaining business for or
with, or directing business to, any Person, (ii) which subjected or might have
subjected Allen or any Comsearch Subsidiary to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, (iii) which if not
continued in the future, might subject Allen or any Comsearch Subsidiary to suit
or penalty in any private or governmental litigation or proceeding, or (iv) for
the purpose of establishing or maintaining any concealed fund or concealed bank
account. The Comsearch Business is not in any manner dependent upon the making
or receipt of any such gifts or payments.
5.22 INTELLECTUAL PROPERTY.
(a) TITLE. Schedule 5.22(a) contains a complete and correct list of
all Intellectual Property (as hereinafter defined) owned by Allen or any
Comsearch Subsidiary and related to, used in, held for use in connection with,
or necessary for the conduct of, or otherwise material to the Comsearch
Business. Except as set forth in Schedule 5.22(a), Allen or a Comsearch
Subsidiary owns or has the right to use pursuant to license, sublicense,
agreement or permission all such Intellectual Property (such Intellectual
Property, other than the Comsearch Excluded Assets, collectively, the "Comsearch
Intellectual Property Assets"), free from any Liens and free from any
requirements of any past, present or future royalty payments, license fees,
charges or other payments, or conditions or restrictions whatsoever. Except as
set forth in Schedule 5.22(a), Allen and the Comsearch Subsidiaries have the
right to use the name "Comsearch" in the United States and, to the knowledge of
Allen, the United Kingdom and Mexico, in each case free from any Liens and free
from any requirements of any past, present or future royalty payments, license
fees, charges or other payments, or conditions or restrictions whatsoever. The
Comsearch Intellectual Property Assets comprise all of the Intellectual
Property, other than the Comsearch Excluded Assets, necessary for LCC to conduct
and operate the Comsearch Business as now being conducted by Allen and the
Comsearch Subsidiaries.
As used in this Agreement, "Intellectual Property" means any and all
United States and foreign: (i) patents (including design patents, industrial
designs and utility models) and patent applications (including docketed patent
disclosure awaiting filing, reissues, divisions, continuations-in-part and
extensions), patent disclosures awaiting filing determinations, inventions and
improvements thereto; (ii) trademarks, service marks, trade names, trade dress,
logos, business and product names, slogans, and registrations and applications
for registration thereof; (iii) copyrights (including software) and
registrations thereof; (iv) inventions, processes, registered and unregistered
designs and design rights, formulae, computer software, trade secrets, know-how,
industrial models, confidential and technical information, manufacturing,
engineering and technical drawings, product specifications and confidential
business information; (v) mask
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work and other semiconductor chip rights and registrations thereof; and (vi)
intellectual property rights similar to any of the foregoing.
(b) TRANSFER. Immediately after the Closing, LCC will own all of the
Comsearch Intellectual Property Assets owned by Allen and the Comsearch
Subsidiaries and will have the right to use all other Comsearch Intellectual
Property Assets, free from any Liens and on the same terms and conditions as in
effect prior to the Closing. Except as set forth in Schedule 5.22(b), no consent
on the part of any other Person is required to transfer the Comsearch
Intellectual Property Assets to LCC.
(c) NO INFRINGEMENT. The conduct of the Comsearch Business does not
infringe or otherwise conflict with any rights of any Person in respect of any
Intellectual Property. To the knowledge of Allen, none of the Comsearch
Intellectual Property Assets is being infringed by any other Person.
(d) LICENSING ARRANGEMENTS. Schedule 5.22(d) sets forth all Contracts
which are in force and effect (i) pursuant to which Allen or any Comsearch
Subsidiary has licensed Comsearch Intellectual Property Assets to, or the use of
Comsearch Intellectual Property Assets is otherwise permitted (through
non-assertion, settlement or similar Contracts or otherwise) by, any other
Person, or (ii) pursuant to which Allen or any Comsearch Subsidiary has had
Comsearch Intellectual Property Assets licensed to it or has otherwise been
permitted to use Comsearch Intellectual Property Assets (through non-assertion,
settlement or similar Contracts or otherwise). All of the Contracts set forth in
Schedule 5.22(d) are in full force and effect and constitute a valid and binding
obligation of each party thereto, enforceable in accordance with their terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and subject to general principles of equity, are free and clear
of all Liens, and, except as set forth in Schedule 5.22(d), do not contain any
change of control or other terms or conditions that will become applicable or
inapplicable as a result of the consummation of the transactions contemplated
hereby. There does not exist under any such Contract any violation, breach or
event of default or event or condition that, after notice or lapse of time or
both, would constitute a violation, breach or event of default thereunder on the
part of Allen or any Comsearch Subsidiary, or to the best knowledge of Allen,
any other party thereto. Except as set forth in Schedule 5.22(d), no consent of
any Person is required under any such Contract as a result of or in connection
with, and the enforceability of each such Contract will not be affected in any
manner by, the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby. Allen has delivered to LCC
true and complete copies of all Contracts (including amendments) set forth on
Schedule 5.22(d). All royalties, license fees, charges and other amounts payable
by, on behalf of, to, or for the account of, Allen or any Comsearch Subsidiary
in respect of any Comsearch Intellectual Property Assets are disclosed in the
Comsearch June 30 Financial Statements.
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(e) NO INTELLECTUAL PROPERTY LITIGATION. No claim or demand of any
Person has been made nor is there any proceeding that is pending, or to the
knowledge of Allen, threatened, nor is there a reasonable basis therefor which
(i) challenges the rights of Allen or any Comsearch Subsidiary in respect of any
Comsearch Intellectual Property Asset, (ii) asserts that Allen or any Comsearch
Subsidiary is infringing or otherwise in conflict with, or is, except as set
forth in Schedule 5.22(d), required to pay any royalty, license fees, charge or
other amount with regard to, any Comsearch Intellectual Property Asset, or (iii)
claims that any default exists under any Contract listed on Schedule 5.22(d).
None of the Comsearch Intellectual Property Assets is subject to any outstanding
order, ruling, decree, judgment or stipulation by or with any Governmental
Authority, or has been the subject of any litigation within the last five years,
whether or not resolved in favor of Allen or any Comsearch Subsidiary.
(f) DUE REGISTRATION, ETC.. Except as set forth in Schedule 5.22(f),
the patents, trademarks, service marks, trade names and copyrights included in
the Comsearch Patents and Trademarks have been duly registered with, filed in or
issued by, as the case may be, the United States Patent and Trademark Office or
the United States Copyright Office and Allen has taken such other actions to
ensure full protection thereof under any Applicable Laws of the United States,
and such registrations, filings and issuances remain in full force and effect,
except where the failure so to register, file, be issued, take such other action
or be in full force and effect would not have, individually or in the aggregate,
a Comsearch Material Adverse Effect.
5.23 ENVIRONMENTAL MATTERS.
(a) PERMITS. Schedule 5.23(a) sets forth all federal, state and local
permits, licenses, registrations, consents, orders, administrative consent
orders, certificates, approvals or other authorizations required under any
Environmental Law ("Environmental Permits") necessary for the conduct of the
Comsearch Business as currently or previously conducted. Allen and the Comsearch
Subsidiaries currently hold, and at all times have held, all such Environmental
Permits necessary to the Comsearch Business, and, to the extent assignable, all
such Environmental Permits shall be validly transferred to LCC on the Closing
Date. Neither Allen nor any Comsearch Subsidiary has been notified by any
relevant Governmental Authority that any such Environmental Permit will be
modified, suspended, canceled or revoked, or cannot be renewed in the ordinary
course of business.
(b) NO VIOLATION. Each of Allen and the Comsearch Subsidiaries has
complied and is in compliance in all material respects with all Environmental
Permits and all applicable Environmental Laws pertaining to the real property
used in connection with the Comsearch Business. No Person has alleged any
violation by Allen or any Comsearch Subsidiary of any Environmental Permit or
any applicable Environmental Law relating to the conduct of the Comsearch
Business or the use, ownership or transferability of any real property used in
connection with the Comsearch Business.
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(c) NO ACTIONS. Except as set forth in Schedule 5.23(c), neither
Allen nor any Comsearch Subsidiary has caused or taken any action that has
resulted or may result in, or has been or is subject to, any liability or
obligation relating to (i) the environmental conditions on, under or about any
real property used in connection with the Comsearch Business, or (ii) the past
or present use, management, handling, transport, treatment, generation, storage
or release of any Hazardous Substances in connection with the conduct of the
Comsearch Business, except for any such liabilities and obligations that,
individually and in the aggregate, are not material to the Comsearch Business
and have not had or resulted in, and will not have or result in, a Comsearch
Material Adverse Effect.
(d) OTHER. Except as set forth in Schedule 5.23(d):
(i) None of the current or past operations, or any by-product
thereof, and none of the currently or formerly owned, leased or used properties
or assets of Allen or any Comsearch Subsidiary used in the Comsearch Business,
including without limitation the Comsearch Purchased Assets, is related to or
subject to any investigation or evaluation by any Governmental Authority as to
whether any Remedial Action (as hereinafter defined) is needed to respond to a
Release or threatened Release of any Hazardous Substances. As used in this
Agreement, "Remedial Action" means all actions required to (A) clean up, remove,
treat, or in any other way remediate any Hazardous Substances; (B) prevent the
release of Hazardous Substances so that they do not migrate or endanger or
threaten public health or welfare or the environment; or (C) perform studies,
investigations and care related to any such Hazardous Substances.
(ii) Neither Allen nor any Comsearch Subsidiary is subject to any
outstanding order, judgment, injunction, decree or writ from, or contractual or
other obligation to or with, any Governmental Authority or other Person in
respect of which LCC may be required to incur any Environmental Liabilities and
Costs (as hereinafter defined). As used herein, "Environmental Liabilities and
Costs" mean all costs, expenses, losses, damages, fines or liabilities,
including all reasonable fees, disbursements and expenses of counsel, experts,
personnel and consultants based on, arising out of or otherwise in respect of:
(i) the ownership or operation of the Comsearch Business or the LCC Products
Business, as the case may be, or any real properties, assets, equipment or
facilities, by Allen, any Comsearch Subsidiary or any of their respective
predecessors or Affiliates, or by LCC, either LCC Subsidiary or any of their
respective predecessors or Affiliates, as the case may be; (ii) the
environmental conditions existing on the Closing Date on, under, above, or about
any real properties, assets, equipment or facilities currently or previously
owned, leased or operated by Allen, any Comsearch Subsidiary or any of their
predecessors or Affiliates, or by LCC, either LCC Subsidiary or any of their
respective predecessors or Affiliates, as the case may be; and (iii)
expenditures necessary to cause any real property used in the Comsearch Business
or the LCC Products Business, as the case may be, or any aspect of the Comsearch
Business or the LCC Products Business, as the case may be, to be in compliance
with any and all requirements of Environmental Laws as of the Closing Date,
including, without limitation, all Environmental Permits issued under or
pursuant
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to such Environmental Laws, and reasonably necessary to make full economic use
of any real property used in the Comsearch Business or the LCC Products Business
as the case may be.
(iii) Neither Allen nor any Comsearch Subsidiary has transported
or arranged for transportation (directly or indirectly) of any Hazardous
Substances relating to the Comsearch Purchased Assets or any real property used
in connection with the Comsearch Business to any location that is listed or
proposed for listing under CERCLA, or on any similar state list, or the subject
of federal, state or local enforcement actions or investigations or action.
(iv) No work, repair, construction or capital expenditure is
required or planned in respect of the Comsearch Purchased Assets pursuant to or
to comply with any Environmental Law, nor has Allen or any of the Comsearch
Subsidiaries received any notice of any such requirement, except for such work,
repair, construction or capital expenditure as is not material to the Comsearch
Business and is in the ordinary course of business.
(e) FULL DISCLOSURE. Allen has disclosed and made available to LCC
all information, including without limitation all studies, analyses and test
results, in the possession, custody or control of Allen and the Comsearch
Subsidiaries relating to (i) the environmental conditions on, under or about any
real property used in connection with the Comsearch Business, and (ii) Hazardous
Substances used, managed, handled, transported, treated, generated, stored or
Released by Allen, any Comsearch Subsidiary or any other Person at any time on
any real property used in connection with the Comsearch Business, or otherwise
in connection with the use or operation of the properties or assets used in or
held for use in connection with the Comsearch Business.
5.24 RECEIVABLES. All receivables of Allen and the Comsearch Subsidiaries
(including accounts receivable, loans receivable and advances) which have arisen
in connection with the Comsearch Business and which are reflected in the
Comsearch June 30 Balance Sheet, and all such receivables which have arisen
since June 30, 1998, have arisen only from bona fide transactions in the
ordinary course of business. Allen has no knowledge of any facts or
circumstances generally (other than general economic conditions) which would
result in any material increase in the uncollectibility of such receivables as a
class in excess of the reserve therefor set forth on the Comsearch June 30
Balance Sheet. Schedule 5.24 hereto accurately lists as of June 30, 1998, all
receivables arising out of or relating to the Comsearch Business in excess of
$50,000, the amount owing and the aging of such receivable, the name of the
party from whom such receivable is owing, and any security therein in favor of
Allen or any Comsearch Subsidiary. All accounts receivable included in the
Comsearch Purchased Assets will be fully collectible, subject to the reserve for
bad debts set forth in the Comsearch June 30 Balance Sheet.
5.25 LABOR RELATIONS. Neither Allen nor any Comsearch Subsidiary is a
party to any collective bargaining or similar agreement with respect to any of
the Comsearch Transferred Employees. There is no strike, labor, dispute,
slowdown, stoppage or other material interference with or impairment by labor of
the Comsearch Business actually pending or, to the knowledge of
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Allen, threatened, against Allen or any Comsearch Subsidiary with respect to the
Comsearch Business.
5.26 PENSION AND BENEFIT PLANS.
(a) Except as set forth in Schedule 5.26(a), Allen and the Comsearch
Subsidiaries (i) do not maintain and have never maintained any Comsearch Plan
(as hereinafter defined) or Comsearch Other Arrangement (as hereinafter
defined), (ii) are not and have never been a party to any Comsearch Plan or
Comsearch Other Arrangement and (iii) have no obligations under any Comsearch
Plan or Comsearch Other Arrangement. For purposes of this Agreement, (i)
"Comsearch Plan" means any plan, program or arrangement, whether or not written,
that is or was an "employee benefit plan" as such term is defined in Section
3(3) of ERISA (as hereinafter defined) or a scheme for the provision of
"relevant benefits" (as defined in Section 612(1) of the United Kingdom Income
and Corporation Taxes Act 1988 ("ICTA"), omitting the exception contained in
such definition) and (A) which was or is established or maintained by Allen or
any Comsearch Subsidiary in respect of any employee of the Comsearch Business;
(B) to which Allen or any Comsearch Subsidiary contributed or was obligated to
contribute or to fund or provide benefits in respect of any employee of the
Comsearch Business; or (C) which provides or promises benefits to any person who
performs or who has performed services for Allen or any Comsearch Subsidiary in
respect of the Comsearch Business and because of those services is or has been a
participant therein or entitled to benefits thereunder, (ii) "Comsearch Other
Arrangement" means a benefit program or practice providing for bonuses,
incentive compensation, vacation pay, severance pay, insurance, restricted
stock, stock options, employee discounts, company cars, tuition reimbursement,
Tax equalization benefits, domestic or overseas assignment benefits or any other
perquisite or benefit (including, without limitation, any fringe benefit under
Section 132 of the Code) to employees, officers or independent contractors of
Allen or any Comsearch Subsidiary in respect of the Comsearch Business that is
not a Comsearch Plan, and (iii) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and all Applicable Laws promulgated pursuant
thereto or in connection therewith.
(b) Allen has, or will have prior to the Closing, furnished to LCC
true and complete copies of each of the following documents: (i) the documents
setting forth the terms of each Comsearch Plan; (ii) all related trust
agreements or annuity agreements (and any other funding document) for each
Comsearch Plan; (iii) for the three most recent plan years, all annual reports
(Form 5500 series) on the Allen Telecom Inc. Employee Before-Tax Savings Plan
(the "Allen 401(k) Plan") that have been filed with any Governmental Authority;
and (iv) the current summary plan description and subsequent summaries of
material modifications for each Comsearch Plan that is a Title I Plan (as
hereinafter defined). For each Comsearch Other Arrangement, Allen has, or will
have prior to the Closing, furnished to LCC true and complete copies of each
policy, agreement or other document setting forth or explaining the terms of
such Comsearch Other Arrangement, or accurate and complete summaries of all
material terms of such Comsearch Other Arrangement. For purposes of this
Agreement, "Title I Plan" means a
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Comsearch Plan or a LCC Plan (as defined in Section 6.26(a)), as the case may
be, that is subject to Title I of ERISA.
(c) No Comsearch Plan is a Multiemployer Plan (as hereinafter
defined), an ESOP (as hereinafter defined), a Defined Benefit Plan (as
hereinafter defined) or a funded Welfare Plan (as hereinafter defined) funded
through a "welfare benefit fund" as such term is defined in Section 419(e) of
the Code. For the purposes of this Agreement, (i) "Multiemployer Plan" means a
"multiemployer plan" as such term is defined in Section 3(37) of ERISA, (ii)
"ESOP" means any "employee stock ownership plan" as such term is defined in
Section 407(d)(6) of ERISA or Section 4975(e)(7) of the Code, (iii) "Defined
Benefit Plan" means a Comsearch Plan or a LCC Plan, as the case may be, that is
or was a "defined benefit plan" as such term is defined in Section 3(35) of
ERISA, and (iv) "Welfare Plan" means an "employee welfare benefit plan" as such
term is defined in Section 3(1) of ERISA.
(d) Allen and each Comsearch Subsidiary have complied in all respects
with all applicable provisions of the Code, ERISA, the National Labor Relations
Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Fair Labor Standards Act, the Securities Act of 1933, as
amended, and all Applicable Laws promulgated pursuant thereto or in connection
therewith (the "Securities Act"), the Securities Exchange Act of 1934, as
amended, and all Applicable Laws promulgated pursuant thereto or in connection
therewith (the "Exchange Act"), and all other Applicable Laws pertaining to the
Comsearch Plans, Comsearch Other Arrangements and other employee or employment
related benefits, except where the failure so to comply would not have a
Comsearch Material Adverse Effect. Neither Allen nor any Comsearch Subsidiary
has any pending unfair labor practice charges, contract grievances under any
collective bargaining agreement, other administrative charges, claims,
grievances or lawsuits before any Governmental Authority arising under any
Applicable Law governing any Comsearch Plan, except for any such charge, claim,
grievance or lawsuit that, if decided adversely to Allen and the Comsearch
Subsidiaries, would not have a Comsearch Material Adverse Effect, and, to the
knowledge of Allen, there exist no facts that could give rise to such a claim.
(e) No Comsearch Plan or Comsearch Other Arrangement, individually or
collectively, provides for any payment by Allen or any Comsearch Subsidiary to
any employee or independent contractor that is not deductible under Section
162(a)(1) or 404 of the Code or that is an "excess parachute payment" pursuant
to Section 280G of the Code.
(f) No Comsearch Plan promises or provides post-retirement medical,
life insurance or other benefits due now or in the future to current, former or
retired employees of the Comsearch Business, other than as required by Section
601 of ERISA.
(g) None of the Comsearch Transferred Employees participates in any
scheme approved under Schedule 9 ICTA (approved share option and profit sharing
schemes) or is a beneficiary or potential beneficiary of a qualifying employee
share ownership trust as defined in
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Schedule 5 of the United Kingdom Finance Act 1989 (employee share ownership
trusts). All sums payable and benefits provided under the existing arrangements
for all such Comsearch Transferred Employees are deductible for the purpose of
Section 74 or 75 ICTA (deductions).
(h) Allen has received a determination letter issued by the Internal
Revenue Service with respect to the Allen 401(k) Plan and Allen has furnished to
LCC a true and complete copy of such determination letter.
5.27 TRANSACTIONS WITH RELATED PARTIES Except as set forth in Schedule
5.27, neither any present or former officer, director, stockholder or Affiliate
of Allen or any Comsearch Subsidiary, nor any Affiliate thereof, is currently a
party to any transaction or Contract with Allen (in respect of the Comsearch
Business) or any Comsearch Subsidiary, including, without limitation, any
Contract providing for the employment of, furnishing of services by, rental of
the Comsearch Purchased Assets from or to, or otherwise requiring payments to,
any such officer, director, stockholder or Affiliate.
5.28 EMPLOYEES. Neither Allen (in respect of the Comsearch Business) nor
any Comsearch Subsidiary has any written employment Contract with any Comsearch
Transferred Employee except such employment Contracts as are set forth in
Schedule 5.28(a). Schedule 5.28(a) lists the name of each Comsearch Transferred
Employee and, with respect to each such Comsearch Transferred Employee, such
Comsearch Transferred Employee's position with Allen or the Comsearch
Subsidiaries, initial employment date, a brief description of such Comsearch
Transferred Employee's responsibilities and such Comsearch Transferred
Employee's 1997 and current salary or hourly wage, bonus or incentive
compensation, total taxable compensation for 1997 and the period from January 1,
1998 through August 31, 1998, and accrued vacation for 1997 and the period from
January 1, 1998 through August 31, 1998. No changes in the basis for
remuneration of the Comsearch Transferred Employees have been made, promised or
authorized by Allen or any Comsearch Subsidiary from and including January 1,
1998 except in the ordinary course or business consistent with past practice or
as disclosed on Schedule 5.28(b). Except as disclosed in Schedule 5.28(b), other
than general understandings which may exist for employment at will, no oral
understandings currently exist between any executive officer or other
representative of Allen or any Comsearch Subsidiary authorized to enter into
such understandings on behalf of Allen or any Comsearch Subsidiary and any
Comsearch Transferred Employee regarding changes in compensation, promotion or
any other change in status. Except as specified in Schedule 5.28(b), as of the
date of this Agreement, no Comsearch Transferred Employee has advised any
executive officer, manager or supervisor of Allen or any Comsearch Subsidiary,
orally or in writing, that he or she intends to terminate such employment or to
refuse employment by LCC after the Closing, if LCC offers such employment.
Comsearch Holdings does not have and has never had any employees.
5.29 DISCLOSURE. No representation or warranty by Allen contained in this
Agreement nor any statement or certificate furnished or to be furnished by or on
behalf of Allen to LCC or its representatives in connection therewith or
pursuant hereto contains or will contain any untrue
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statement of a material fact, or omits or will omit to state any material fact
required to make the statements contained herein or therein not misleading.
There is no fact (other than matters of an economic or political nature
affecting the telecommunications industry generally which do not affect the
Comsearch Business uniquely) known to Allen that has not been disclosed by Allen
to LCC that might reasonably be expected to have or result in a Comsearch
Material Adverse Effect.
5.30 DEFINITION OF ALLEN'S KNOWLEDGE. As used in this Agreement, the
phrase "to the knowledge of Allen" or words of similar import means the current
actual knowledge of Robert G. Paul, Robert A. Youdelman, James L. LePorte, III,
McDara P. Folan, III, Michael K. Morin (as of the date of the termination of his
employment with Allen), Timothy P. Eckersley, Lorna C. Donatone, Margaret Navin,
Douglas Hall and Jeffrey Rosenblatt.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF LCC
LCC hereby represents and warrants to, and covenants and agrees with,
Allen as follows, it being understood that, for purposes of this Article 6,
regardless of whether or not consent to assignment is obtained, the Contracts
referred to in clause (ii) of Section 1.6(l) are included in the LCC Purchased
Assets and, to the extent provided in Section 3.3(b), in the LCC Assumed
Liabilities:
6.1 ORGANIZATION. LCC is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Each of LCC GmbH
and LCC AS is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each of LCC, LCC
GmbH and LCC AS has all requisite power and authority to own, lease and operate
its properties and the LCC Products Business as presently conducted by it and
each of LCC and LCC GmbH has all requisite power and authority to enter into
this Agreement and perform its obligations hereunder.
6.2 CORPORATE AUTHORITY. (a) The execution, delivery and performance of
this Agreement by LCC and LCC GmbH and the consummation by LCC and LCC GmbH of
the transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of LCC and LCC GmbH, and (b) this Agreement has
been duly executed and delivered by LCC and LCC GmbH and constitutes the legal,
valid and binding obligation of LCC and LCC GmbH, enforceable against LCC and
LCC GmbH in accordance with its terms, except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and subject to general principles
of equity.
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6.3 QUALIFICATION. LCC is qualified to do business as a foreign
corporation in, and is in good standing under the laws of, the Commonwealth of
Virginia. LCC, LCC GmbH and LCC AS are each qualified to do business as a
foreign corporation in, and are in good standing under the laws of, each other
jurisdiction in which the conduct of the LCC Products Business or the ownership
of the assets of the LCC Products Business requires such qualification, except
where the failure to qualify would not have a material adverse effect on the
results of operations, financial condition or prospects of the LCC Products
Business (a "LCC Material Adverse Effect"). For purposes of the definition of
LCC Material Adverse Effect, an event, occurrence, fact, condition or effect
shall not be deemed to be materially adverse unless it involves $250,000 or
more.
6.4 NO CONFLICT. Except as set forth in Schedule 6.4, neither the
execution and delivery of this Agreement by LCC nor the consummation of the
transactions contemplated hereby will conflict with or result in a breach of any
of the provisions of, or constitute a default under, the certificate of
incorporation or by-laws of LCC, or the charter, by-laws or other organizational
document of LCC GmbH or LCC AS, in each case, as amended to date, or any
Contract to which LCC, LCC GmbH or LCC AS is a party or by which LCC, LCC GmbH
or LCC AS or any of their respective property is bound, or result in the
violation of any law, rule, regulation, order, judgment or decree to which LCC,
LCC GmbH or LCC AS or any of their respective property is subject.
6.5 CONSENTS. No consent, approval or authorization of, or declaration or
filing with, any Governmental Authority is required on the part of LCC, LCC GmbH
or LCC AS in connection with the execution, delivery or performance of this
Agreement, except for filings with (a) the FTC and DOJ pursuant to the HSR Act,
(b) the German Federal Cartel Office pursuant to the German Act Against
Restraints on Competition, (c) the United Kingdom Office of Fair Trading
pursuant to Section 24 of the UK Restrictive Practices Act, and (d) the Mexican
Foreign Investment National Registry pursuant to Article 33 of the Mexican
Foreign Investment Law. Except as disclosed in Schedule 6.4 or 6.5, no consent
of any Person is required under any LCC Contract (as defined in Section 6.15(a))
as a result of or in connection with, and the enforceability of each LCC
Contract will not be affected in any manner by, the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby.
6.6 FINANCIAL STATEMENTS. The unaudited financial statements of the LCC
Products Business (including the balance sheet and statement of income) for the
fiscal year ended December 31, 1997 and the interim financial statements of the
LCC Products Business (including the balance sheet and statement of income) as
of June 30, 1998, copies of which are attached hereto as Schedule 6.6(a)(i),
have been prepared from the books and records of the LCC Products Business in
accordance with GAAP applied consistently subject, in the case of such interim
financial statements, to normal year end adjustments, and present fairly the
assets, liabilities and results of operations of the LCC Products Business as of
the dates and for the periods indicated, subject in all cases to adjustments to
the fixed assets and accumulated
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depreciation reflected on such financial statements to be incorporated in
revised unaudited financial statements of the LCC Products Business (including
the balance sheet and statement of income) for the fiscal year ended December
31, 1997 (the "LCC Year-End Financial Statements") and the interim financial
statements of the LCC Products Business as of June 30, 1998 (the "LCC Interim
Financial Statements") in order to more accurately reflect fixed assets and
accumulated depreciation, copies of which will be furnished by LCC to Allen and
attached hereto as Schedule 6.6(a)(ii) within three Business Days after the date
hereof. The balance sheet of the LCC Products Business as of June 30, 1998,
attached hereto as Schedule 6.6(b)(i), shows as assets only assets which would
have been LCC Purchased Assets had the Closing occurred on June 30, 1998 and as
liabilities all liabilities which would have been LCC Assumed Liabilities had
the Closing occurred on June 30, 1998, determined in accordance with GAAP
applied on a basis consistent with prior practice, subject to adjustments to the
fixed assets and accumulated depreciation reflected thereon to be incorporated
in a revised balance sheet of the LCC Products Business as of June 30, 1998 in
order to more accurately reflect fixed assets and accumulated depreciation, to
be furnished by LCC to Allen and attached hereto as Schedule 6.6(b)(ii) within
three Business Days after the date hereof (the "LCC Products June 30 Balance
Sheet"). As of August 31, 1998, the outstanding balance under the Swingline
Loans (as such term is defined in the LCC Credit Agreement (as defined in
Section 8.23(b)) to LCC AS pursuant to the LCC Credit Agreement (the "LCC AS
Working Capital Facility") was approximately $1,300,000 and the amount of
unrestricted cash and cash equivalents held by LCC AS was approximately
$890,000.
6.7 SUBSIDIARIES.
(a) The entire membership interest in LCC AS is owned by LCC free and
clear of all Liens, except as set forth in Schedule 6.7(a). There are no
options, warrants, rights, conversion rights or other Contracts to which LCC or
LCC AS is a party or by which either of them is bound providing for the
issuance, disposition or acquisition of any of the capital stock of or other
interest in LCC AS.
(b) Except for LCC GmbH and LCC AS (the "LCC Subsidiaries") or as set
forth in Schedule 6.13, neither LCC nor LCC AS owns, directly or indirectly, any
shares of or equity interest in any corporation, partnership, limited liability
company, joint venture, association (excluding memberships in trade
associations) or other entity which is engaged in the LCC Products Business.
(c) LCC has previously furnished to Allen a true and correct copy of
the charter and by-laws or other organizational document of LCC AS. LCC will
have made available to Allen the complete minute book or equivalent information
of LCC AS prior to the Closing.
6.8 ABSENCE OF UNDISCLOSED LIABILITIES. Neither LCC nor any LCC
Subsidiary has any liabilities or obligations of any nature, whether known or
unknown, absolute or contingent,
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matured or unmatured or otherwise and whether due or to become due, arising out
of or relating to the LCC Products Business other than LCC Products Excluded
Liabilities, except (i) the LCC Contracts; (ii) as set forth in Schedule 6.8,
(iii) as and to the extent reflected in or reserved against in the LCC Products
June 30 Balance Sheet, and (iv) for liabilities and obligations that (A) were
incurred after June 30, 1998 in the ordinary course of business consistent with
past practice and (B) individually and in the aggregate are not material to the
LCC Products Business and have not had or resulted, and will not have or result
in, a LCC Material Adverse Effect.
6.9 TAXES.
(a) Each of LCC and the LCC Subsidiaries has (or by the Closing will
have) duly and timely filed all Tax Returns with respect to Taxes relating to
the LCC Products Business due on or before the Closing Date (the "Covered LCC
Taxes"). Except for Covered LCC Taxes set forth on Schedule 6.9(a), which are
being contested in good faith and by appropriate proceedings, the following
Covered LCC Taxes have (or by the Closing Date will have) been duly and timely
paid or accrued: (i) all Covered LCC Taxes shown to be due on the Tax Returns
filed with respect thereto, and (ii) all deficiencies and assessments of Covered
LCC Taxes of which notice has (or by the Closing Date will have) been received
by LCC or any LCC Subsidiary that are or may become payable by Allen or
chargeable as a Lien or charge upon the LCC Products Business or any LCC
Purchased Asset. All Taxes required to be withheld by or on behalf of LCC or any
LCC Subsidiary in connection with amounts paid or owing to any employee,
independent contractor, creditor or other party with respect to the LCC Products
Business ("LCC Withholding Taxes") have been withheld, and such LCC Withholding
Taxes have either been duly and timely paid to the proper Governmental
Authorities or set aside in accounts for such purpose.
(b) Except as set forth on Schedule 6.9(b), no agreement or other
document extending, or having the effect of extending, the period of assessment
or collection of any Covered LCC Taxes or LCC Withholding Taxes, and no power of
attorney with respect to any such Taxes, has been filed with the Internal
Revenue Service or any other Governmental Authority.
(c) Allen will not be required to deduct and withhold any amount
pursuant to Section 1445(a) of the Code upon the transfer of the LCC Products
Business to Allen.
(d) Except as set forth on Schedule 6.9(d), there is no litigation or
administrative proceeding pending or, to the knowledge of LCC, threatened,
against or relating to LCC or any LCC Subsidiary in connection with Covered LCC
Taxes.
6.10 ABSENCE OF CHANGES. Except as set forth in Schedule 6.10, since June
30, 1998, LCC and the LCC Subsidiaries have conducted the LCC Products Business
only in the ordinary course consistent with prior practice and have not, on
behalf of, in connection with or relating to the LCC Products Business or the
LCC Purchased Assets:
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(a) suffered any LCC Material Adverse Effect;
(b) incurred any obligation, commitment or liability, known or
unknown, absolute or contingent, matured or unmatured, or otherwise, whether due
or to become due, except current liabilities for trade or business obligations
incurred in connection with the purchase or sale of goods or services in the
ordinary course of business consistent with prior practice, none of which
liabilities, in any case or in the aggregate, could have a LCC Material Adverse
Effect;
(c) discharged or satisfied any Lien other than those then required
to be discharged or satisfied, or paid any obligation, commitment or liability,
known or unknown, absolute or contingent, matured or unmatured, or otherwise,
whether due or to become due, other than current liabilities shown on the LCC
June 30 Balance Sheet and current liabilities incurred since the date thereof in
the ordinary course of business consistent with prior practice, or paid or
prepaid any obligation of LCC AS to LCC pursuant to the LCC AS Intercompany
Credit Agreement (as defined in Section 8.23(c)), or any obligation of LCC AS
under the LCC AS Asset Purchase Agreement (as defined in Section 8.23(a));
(d) mortgaged, pledged or subjected to Lien, any property, business
or assets, tangible or intangible, held in connection with the LCC Products
Business;
(e) sold, transferred, leased to others or otherwise disposed of any
of the LCC Purchased Assets or any assets or property of LCC AS, except for
inventory sold in the ordinary course of business and licenses of LCC Software
or software licenses of LCC AS granted in the ordinary course of business, or
canceled or compromised any debt or claim, or waived or released any right of
substantial value;
(f) received any notice of termination of any Contract relating to
the LCC Products Business or suffered any damage, destruction or loss (whether
or not covered by insurance) which, in any case or in the aggregate, has had a
LCC Material Adverse Effect;
(g) transferred or granted any rights under, or entered into any
settlement regarding the breach or infringement of, any LCC Patents and
Trademarks or LCC Know-How or any Patents and Trademarks or KnowHow of LCC AS
other than licenses of LCC Software or software licenses of LCC AS granted in
the ordinary course of business, or modified any existing rights with respect
thereto;
(h) made any change in the rate of compensation, commission, bonus or
other direct or indirect remuneration payable, or paid or agreed or orally
promised to pay, conditionally or otherwise, any bonus, incentive, retention or
other compensation,
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retirement, welfare, fringe or severance benefit or vacation pay, to or in
respect of any LCC Transferred Employees, except in the ordinary course of
business;
(i) encountered any labor union organizing activity, had any actual
or, to the knowledge of LCC, threatened, employee strikes, work stoppages,
slowdowns or lockouts, or had any material change in its relations with the
employees, agents, customers or suppliers;
(j) failed to replenish inventories and supplies in a normal and
customary manner consistent with prior practice and prudent business practices
prevailing in the industry, or made any purchase commitment in excess of the
normal, ordinary and usual requirements of the LCC Products Business or at any
price in excess of the then current market price or upon terms and conditions
more onerous than those usual and customary in the industry, or made any change
in the selling, pricing, advertising or personnel practices inconsistent with
prior practice and prudent business practices prevailing in the industry;
(k) made any capital expenditures or capital additions or
improvements in excess of $25,000 individually or $150,000 in the aggregate;
(l) instituted, settled or agreed to settle any litigation, action or
proceeding before any Governmental Authority other than in the ordinary course
of business consistent with past practice but not in any case involving amounts
in excess of $25,000;
(m) made any material change in any accounting procedures or
practices applied in keeping the books and records of the LCC Products Business;
(n) issued any securities of LCC AS or options or other rights to
acquire any such securities, or declared, set aside or paid any dividend on, or
made any other distribution in respect of, outstanding shares of capital stock
or other securities, except as permitted pursuant to Section 8.23(b);
(o) entered into any transaction or Contract other than in the
ordinary course of business, or incurred any severance pay obligations by reason
of this Agreement or the transactions contemplated hereby; or
(p) taken any action or omitted to take any action that would result
in the occurrence of any of the foregoing.
6.11 LITIGATION. Except as set forth on Schedule 6.11, there is no
action, claim, demand, suit, proceeding, arbitration, grievance, citation,
summons, subpoena, inquiry or investigation of any nature, civil, criminal,
regulatory or otherwise, in law or in equity, pending or, to the knowledge of
LCC, threatened against or relating to LCC (in connection with the LCC
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Purchased Assets or the LCC Products Business) or any LCC Subsidiary or against
or relating to the transactions contemplated by this Agreement, and LCC does not
know or have reason to be aware of any basis for the same. Except as set forth
in Schedule 6.11, no citations, fines or penalties have been asserted against
LCC (with respect to the LCC Products Business) or any LCC Subsidiary or their
predecessors since January 1, 1993 under any Environmental Law.
6.12 COMPLIANCE WITH LAWS; GOVERNMENTAL APPROVALS AND CONSENTS;
GOVERNMENTAL CONTRACTS.
(a) Except as otherwise disclosed in Schedule 6.12(a), since January
1, 1993 LCC and each LCC Subsidiary have complied in all respects with all
Applicable Laws applicable to the LCC Products Business or the LCC Purchased
Assets, except where the failure so to comply would not, individually or in the
aggregate, have a LCC Material Adverse Effect, and neither LCC nor any LCC
Subsidiary nor any of their respective predecessors has received any notice
alleging any conflict with, violation of, breach of or default with respect to
the LCC Products Business or the LCC Purchased Assets under any such Applicable
Law, which has not been previously cured.
(b) Schedule 6.12(b) sets forth all permits, consents or approvals of
any Governmental Authority necessary for, or otherwise material to, the conduct
of the LCC Products Business. Except as set forth in Schedule 6.12(b), all such
permits, approvals and consents have been duly obtained and are in full force
and effect, and LCC and each LCC Subsidiary is in compliance with the same,
except where the failure so to comply would not, individually or in the
aggregate, have a LCC Material Adverse Effect.
(c) Schedule 6.12(c) sets forth all Contracts with any Governmental
Authority related to the LCC Products Business.
6.13 PERSONS CONDUCTING LCC PRODUCTS BUSINESS. Except as set forth in
Schedule 6.13, LCC has conducted the LCC Products Business only through itself
and the LCC Subsidiaries and not through any other direct or indirect subsidiary
or Affiliate of LCC and LCC AS has conducted the LCC Products Business only
through itself.
6.14 TITLE TO ASSETS. Except as disclosed in Schedule 6.14, LCC and the
LCC Subsidiaries, as applicable, have good title to all the LCC Purchased Assets
and all the assets of LCC AS, free and clear of any and all Liens. On the
Closing Date, Allen will acquire good title to or a valid leasehold interest in,
as applicable, and all right, title and interest in, the LCC Purchased Assets,
free and clear of all Liens other than those Liens described in item 2 of
Schedule 6.14. The LCC Purchased Assets and all the assets of LCC AS comprise
all assets required for the continued conduct of the LCC Products Business by
Allen after the Closing as now being conducted by LCC and the LCC Subsidiaries
except for the LCC Excluded Assets. The LCC Purchased Assets and the assets of
LCC AS, taken as a whole, constitute all the properties and assets relating to
or used or held for use in connection with the LCC Products
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Business during the past twelve months (except inventory sold, cash disposed of,
accounts receivable collected, prepaid expenses realized, Contracts fully
performed, properties or assets replaced by equivalent or superior properties or
assets, in each case in the ordinary course of business, employees not hired by
Allen, and the LCC Excluded Assets). Except for LCC Excluded Assets, there are
no assets or properties used in the operation of the LCC Products Business and
owned by any Person other than LCC or any LCC Subsidiary that will not be leased
or licensed to Allen or LCC AS at the Closing under valid, current leases or
license arrangements. There is no real property owned by LCC or any LCC
Subsidiary which is used in connection with the LCC Products Business. The LCC
Purchased Assets and all the assets of LCC AS are in all material respects
adequate for the purposes for which such assets are currently used or are held
for use, and are in reasonably good repair and operating condition (subject to
normal wear and tear) and, to the knowledge of LCC, there are no facts or
conditions affecting the LCC Purchased Assets or the assets of LCC AS which
could, individually or in the aggregate, interfere in any material respect with
the use, occupancy or operation thereof as currently used, occupied or operated.
6.15 CONTRACTS.
(a) Schedule 6.15(a) contains a complete and correct list of all
Contracts of the types described below (x) by which any of the LCC Purchased
Assets or any assets of LCC AS are bound or affected or (y) to which LCC or a
LCC Subsidiary is a party or by which it is bound in connection with the LCC
Products Business or the LCC Purchased Assets (other than Contracts which are
LCC Products Excluded Liabilities) (the "LCC Contracts"):
(i) leases concerning or relating to any real property used in
connection with the LCC Products Business other than the McLean Facility;
(ii) employment, collective bargaining or other similar Contracts
relating to or for the benefit of the LCC Transferred Employees, or with sales
representatives, distributors, dealers, agents, independent contractors or
consultants;
(iii) licenses, licensing arrangements and other Contracts
providing in whole or in part for the use of, or limiting the use of, any LCC
Patents and Trademarks or any LCC Software;
(iv) joint venture, partnership and similar Contracts involving a
sharing of profits;
(v) asset purchase agreements and other acquisition or divestiture
Contracts involving indemnity or other obligations;
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(vi) orders and other Contracts for the purchase or sale of
materials, supplies, products or services, each of which involves aggregate
payments in excess of $50,000;
(vii) any Contract as to which the aggregate amount that could
reasonably be expected to be paid or received thereunder in the future exceeds
$50,000 per annum;
(viii) sales agency, manufacturer's representative, marketing or
distributorship Contracts;
(ix) Contracts with respect to the representation of the LCC
Products Business in foreign countries;
(x) any lease Contract providing for the leasing of both (A)
personal property primarily used in, or held for use primarily in connection
with, the LCC Products Business and (B) other personal property;
(xi) Contracts with any employee, director, officer or Affiliate
of LCC or any LCC Subsidiary;
(xii) loan agreements, indentures, letters of credit, mortgages,
security agreements, pledge agreements, deeds of trust, bonds, notes, guarantees
and other Contracts relating to the borrowing of money or extension of credit;
and
(xiii) any other Contracts that are material to the LCC Products
Business.
(b) Except as set forth in Schedule 6.15(b), LCC has delivered or
made available to Allen complete and correct copies of all written LCC
Contracts, together with all amendments thereto, and accurate descriptions of
all material terms of all oral LCC Contracts, set forth or required to be set
forth in Schedule 6.15(a).
(c) All LCC Contracts are in full force and effect and constitute a
valid and binding obligation of each party thereto, enforceable in accordance
with their terms, except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and subject to general principles of equity. There
does not exist under any LCC Contract any violation, breach or event of default
or event or condition that, after notice or lapse of time or both, would
constitute a violation, breach or event of default thereunder on the part of LCC
or either LCC Subsidiary or, to the knowledge of LCC, any other party thereto,
except as set forth in Schedule 6.15(c).
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(d) Except as set forth in Schedule 6.15(d), there is not outstanding
any power of attorney relating to the LCC Products Business.
6.16 TERRITORIAL RESTRICTIONS. Except as set forth in Schedule 6.16,
neither LCC nor any LCC Subsidiary is restricted by any Contract with any other
Person from carrying on the LCC Products Business anywhere in the world. Allen,
solely as a result of its purchase of the LCC Products Business pursuant hereto,
the acquisition of the shares of LCC AS and the assumption of the LCC Assumed
Liabilities, will not thereby become restricted in carrying on any business
anywhere in the world except as expressly provided in this Agreement or in any
Contract executed and delivered pursuant to the terms hereof.
6.17 INVENTORIES. All inventories of the LCC Products Business are of
good, usable and merchantable quality in all material respects and do not
include obsolete or discontinued items except to the extent of the reserves
therefor included in the LCC Products June 30 Balance Sheet or as set forth on
Schedule 6.17. Except as set forth on Schedule 6.17, (a) all such inventories
are of such quality as to meet the quality control standards of LCC and any
applicable quality control standards of any Governmental Authority, (b) all such
inventories that are finished goods are salable as current inventories at the
current prices thereof in the ordinary course of business, (c) all such
inventories are recorded on the books of the LCC Products Business at the lower
of cost or market value determined in accordance with GAAP, and (d) no write
down in inventory related to net realizable value or product line obsolescence
should have been made pursuant to GAAP during the past two years. Schedule 6.17
lists the locations of all such inventories.
6.18 CUSTOMERS. Schedule 6.18 sets forth (a) the names and addresses of
all customers of LCC and each LCC Subsidiary that were invoiced $50,000 or more
during the twelve-month period ended December 31, 1997, or $25,000 or more
during the period from January 1, 1998 through August 31, 1998 for goods and
services with respect to the LCC Products Business, and (b) the amount for which
each such customer was invoiced during such periods. Neither LCC nor any LCC
Subsidiary has received any notice that any customer of LCC or any LCC
Subsidiary that was invoiced more than $50,000 during the twelve-month period
ended December 31, 1997, or $25,000 or more during the period from January 1,
1998 through August 31, 1998 for goods and services with respect to the LCC
Products Business (i) has ceased, or will cease, to use the products, goods or
services of the LCC Products Business, or (ii) has substantially reduced or will
substantially reduce, the use of products, goods or services of the LCC Products
Business, including in each case after the consummation of the transactions
contemplated hereby, other than in connection with ordinary fluctuations or
customer ordering cycles in the LCC Products Business. To the knowledge of LCC,
no customer described in the preceding sentence has otherwise threatened to take
any action described in the preceding sentence as a result of the consummation
of the transactions contemplated by this Agreement.
6.19 SUPPLIERS; RAW MATERIALS. Schedule 6.19 sets forth (a) the names and
addresses of all suppliers (including without limitation LCC and any Affiliates
thereof) from which LCC or
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either of the LCC Subsidiaries ordered raw materials, supplies, merchandise and
other goods and services in connection with the LCC Products Business with an
aggregate purchase price for each such supplier of $50,000 or more during the
twelve-month period ended December 31, 1997 or $25,000 or more during the period
from January 1, 1998 through August 31, 1998, and (b) the amount for which such
supplier invoiced LCC and the LCC Subsidiaries for such goods and services
during such periods. Except as set forth in Schedule 6.19, neither LCC nor any
LCC Subsidiary has received any notice that there has been any material adverse
change in the price of such raw materials, supplies, merchandise or other goods
or services, or that any supplier from which LCC or either of the LCC
Subsidiaries ordered raw materials, supplies, merchandise and other goods and
services in connection with the LCC Products Business with an aggregate purchase
price for each such supplier of $50,000 or more during the twelve-month period
ended December 31, 1997 or $25,000 or more during the period from January 1,
1998 through August 31, 1998 will not sell raw materials, supplies, merchandise
and other goods to Allen at any time after the Closing Date on terms and
conditions similar to those used in its current sales to LCC and the LCC
Subsidiaries, subject to general and customary price increases. To the knowledge
of LCC, no supplier described in the preceding sentence has otherwise threatened
to take any action described in the preceding sentence as a result of the
consummation of the transactions contemplated by this Agreement.
6.20 PRODUCT WARRANTIES. Except as set forth in Schedule 6.20 and for
warranties under Applicable Law, (a) there are no warranties express or implied,
written or oral, with respect to the products or services of the LCC Products
Business and (b) there are no pending or, to the knowledge of LCC, threatened
claims with respect to any such warranty as of the date hereof, and neither LCC
nor any LCC Subsidiary has any liability with respect to any such warranty,
whether known or unknown, absolute or contingent, matured or unmatured, or
otherwise, whether due or to become due, except to the extent of the reserve
therefor included in the LCC Products June 30 Balance Sheet.
6.21 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither LCC nor any LCC
Subsidiary, nor any officer, employee or agent of LCC or any LCC Subsidiary, or
any other Person acting on their behalf, has, directly or indirectly, within the
past five years given or agreed to give any gift or payment to or for the
benefit of any official or employee of any Governmental Authority of any country
or subdivision thereof, or any person acting in an official capacity on behalf
of such Governmental Authority, or any political party or official thereof, or
any candidate for political office, (i) for the purposes of influencing any act
or decision of such person or party in his or its official capacity, or inducing
such person or party to use his or its influence to affect or influence any act
or decision of such Governmental Authority, in order to assist the LCC Products
Business in obtaining or retaining business for or with, or directing business
to, any Person, (ii) which subjected or might have subjected LCC or any LCC
Subsidiary to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (iii) which if not continued in the future, might
subject LCC or any LCC Subsidiary to suit or penalty in any private or
governmental litigation or proceeding, or (iv) for the purpose of establishing
or
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maintaining any concealed fund or concealed bank account. The LCC Products
Business is not in any manner dependent upon the making or receipt of any such
gifts or payments.
6.22 INTELLECTUAL PROPERTY.
(a) TITLE. Schedule 6.22(a) contains a complete and correct list of
all Intellectual Property owned by LCC or any LCC Subsidiary and related to,
used in, held for use in connection with, or necessary for the conduct of, or
otherwise material to the LCC Products Business. LCC or a LCC Subsidiary owns or
has the right to use pursuant to license, sublicense, agreement or permission
all such Intellectual Property (such Intellectual Property, other than the LCC
Excluded Assets, collectively, the "LCC Intellectual Property Assets"), free
from any Liens and free from any requirements of any past, present or future
royalty payments, license fees, charges or other payments, or conditions or
restrictions whatsoever. The LCC Intellectual Property Assets comprise all of
the Intellectual Property, other than the LCC Excluded Assets, necessary for
Allen to conduct and operate the LCC Products Business as now being conducted by
LCC and the LCC Subsidiaries.
(b) TRANSFER. Immediately after the Closing, Allen will own all of
the LCC Intellectual Property Assets owned by LCC and the LCC Subsidiaries and
will have the right to use all other LCC Intellectual Property Assets, free from
any Liens and on the same terms and conditions as in effect prior to the
Closing. Except as set forth in Schedule 6.22(b), no consent on the part of any
other Person is required to transfer the LCC Intellectual Property Assets to
Allen.
(c) NO INFRINGEMENT. The conduct of the LCC Products Business does
not infringe or otherwise conflict with any rights of any Person in respect of
any Intellectual Property. To the knowledge of LCC, none of the LCC Intellectual
Property Assets is being infringed by any other Person.
(d) LICENSING ARRANGEMENTS. Schedule 6.22(d) sets forth all Contracts
which are in force and effect (i) pursuant to which LCC or any LCC Subsidiary
has licensed LCC Intellectual Property Assets to, or the use of LCC Intellectual
Property Assets is otherwise permitted (through non-assertion, settlement or
similar Contracts or otherwise) by, any other Person, or (ii) pursuant to which
LCC or any LCC Subsidiary has had LCC Intellectual Property Assets licensed to
it or has otherwise been permitted to use LCC Intellectual Property Assets
(through non-assertion, settlement or similar Contracts or otherwise). All of
the Contracts set forth in Schedule 6.22(d) are in full force and effect and
constitute a valid and binding obligation of each party thereto, enforceable in
accordance with their terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and subject to general principles of
equity, are free and clear of all Liens, and, except as set forth in Schedule
6.22(d), do not contain any change of control or other terms or conditions that
will become applicable or inapplicable as a result of the consummation of the
transactions contemplated hereby. There does not exist under any such
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Contract any violation, breach or event of default or event or condition that,
after notice or lapse of time or both, would constitute a violation, breach or
event of default thereunder on the part of LCC or either LCC Subsidiary, or to
the best knowledge of LCC, any other party thereto. Except as set forth in
Schedule 6.22(d), no consent of any Person is required under any such Contract
as a result of or in connection with, and the enforceability of each such
Contract will not be affected in any manner by, the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby. LCC has delivered to Allen true and complete copies of all
licenses and arrangements (including amendments) set forth on Schedule 6.22(d).
All royalties, license fees, charges and other amounts payable by, on behalf of,
to, or for the account of, LCC or either LCC Subsidiary in respect of any LCC
Intellectual Property Assets are disclosed in the LCC Products June 30 Financial
Statements.
(e) NO INTELLECTUAL PROPERTY LITIGATION. No claim or demand of any
Person has been made nor is there any proceeding that is pending, or to the
knowledge of LCC, threatened, nor is there a reasonable basis therefor which (i)
challenges the rights of LCC or any LCC Subsidiary in respect of any LCC
Intellectual Property Asset, (ii) asserts that LCC or any LCC Subsidiary is
infringing or otherwise in conflict with, or is, except as set forth in Schedule
6.22(d), required to pay any royalty, license fees, charge or other amount with
regard to, any LCC Intellectual Property Asset, or (iii) claims that any default
exists under any Contract listed on Schedule 6.22(d). None of the LCC
Intellectual Property Assets is subject to any outstanding order, ruling,
decree, judgment or stipulation by or with any Governmental Authority, or has
been the subject of any litigation within the last five years, whether or not
resolved in favor of LCC or any LCC Subsidiary.
(f) DUE REGISTRATION, ETC.. Except as set forth in Schedule 6.22(f),
the patents, trademarks, service marks, trade names and copyrights included in
the LCC Patents and Trademarks have been duly registered with, filed in or
issued by, as the case may be, the United States Patent and Trademark Office or
the United States Copyright Office and LCC has taken such other actions to
ensure full protection thereof under any Applicable Laws of the United States,
and such registrations, filings and issuances remain in full force and effect,
except where the failure so to register, file, be issued, take such other action
or be in full force and effect would not have, individually or in the aggregate,
a LCC Material Adverse Effect.
6.23 ENVIRONMENTAL MATTERS.
(a) PERMITS. Schedule 6.23(a) sets forth all Environmental Permits
necessary for the conduct of the LCC Products Business as currently or
previously conducted. LCC and the LCC Subsidiaries currently hold, and at all
times have held, all such Environmental Permits necessary to the LCC Products
Business, and, to the extent assignable, all such Environmental Permits shall be
validly transferred to Allen on the Closing Date. Neither LCC nor either LCC
Subsidiary has been notified by any relevant Governmental Authority that any
such
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Environmental Permit will be modified, suspended, canceled or revoked, or cannot
be renewed in the ordinary course of business.
(b) NO VIOLATION. Each of LCC and the LCC Subsidiaries has complied
and is in compliance in all material respects with all Environmental Permits and
all applicable Environmental Laws pertaining to the real property used in
connection with the LCC Products Business. No Person has alleged any violation
by LCC or any LCC Subsidiary of any Environmental Permit or any applicable
Environmental Law relating to the conduct of the LCC Products Business or the
use, ownership or transferability of any real property used in connection with
the LCC Products Business.
(c) NO ACTIONS. Except as set forth in Schedule 6.23(c), neither LCC
nor any LCC Subsidiary has caused or taken any action that has resulted or may
result in, or has been or is subject to, any liability or obligation relating to
(i) the environmental conditions on, under or about any real property used in
connection with the LCC Products Business, or (ii) the past or present use,
management, handling, transport, treatment, generation, storage or release of
any Hazardous Substances in connection with the conduct of the LCC Products
Business, except for any such liabilities and obligations that, individually and
in the aggregate, are not material to the LCC Products Business and have not had
or resulted in, and will not have or result in, a LCC Material Adverse Effect.
(d) OTHER. Except as set forth in Schedule 6.23(d):
(i) None of the current or past operations, or any by-product
thereof, and none of the currently or formerly owned, leased or used properties
or assets of LCC or either LCC Subsidiary used in the LCC Products Business,
including without limitation the LCC Purchased Assets, is related to or subject
to any investigation or evaluation by any Governmental Authority as to whether
any Remedial Action is needed to respond to a Release or threatened Release of
any Hazardous Substances.
(ii) Neither LCC nor any LCC Subsidiary is subject to any
outstanding order, judgment, injunction, decree or writ from, or contractual or
other obligation to or with, any Governmental Authority or other Person in
respect of which Allen may be required to incur any Environmental Liabilities
and Costs arising from the Release or threatened Release of a Hazardous
Substance.
(iii) Neither LCC nor any LCC Subsidiary has transported or
arranged for transportation (directly or indirectly) of any Hazardous Substances
relating to the LCC Purchased Assets or any real property used in connection
with the LCC Products Business to any location that is listed or proposed for
listing under CERCLA, or on any similar state list, or the subject of federal,
state or local enforcement actions or investigations or action.
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(iv) No work, repair, construction or capital expenditure is
required or planned in respect of the LCC Purchased Assets pursuant to or to
comply with any Environmental Law, nor has LCC or either of the LCC Subsidiaries
received any notice of any such requirement, except for such work, repair,
construction or capital expenditure as is not material to the LCC Products
Business and is in the ordinary course of business.
(e) FULL DISCLOSURE. LCC has disclosed and made available to Allen
all information, including without limitation all studies, analyses and test
results, in the possession, custody or control of LCC and the LCC Subsidiaries
relating to (i) the environmental conditions on, under or about any real
property used in connection with the LCC Products Business, and (ii) Hazardous
Substances used, managed, handled, transported, treated, generated, stored or
Released by LCC, either LCC Subsidiary or any other Person at any time on any
real property used in connection with the LCC Products Business, or otherwise in
connection with the use or operation of the properties or assets used in or held
for use in connection with the LCC Products Business.
6.24 RECEIVABLES. All receivables of LCC and the LCC Subsidiaries
(including accounts receivable, loans receivable and advances) which have arisen
in connection with the LCC Products Business and which are reflected in the LCC
Products June 30 Balance Sheet, and all such receivables which have arisen since
June 30, 1998, have arisen only from bona fide transactions in the ordinary
course of business. LCC has no knowledge of any facts or circumstances generally
(other than general economic conditions) which would result in any material
increase in the uncollectibility of such receivables as a class in excess of the
reserve therefor set forth on the LCC Products June 30 Balance Sheet. Schedule
6.24 hereto accurately lists as of June 30, 1998, all receivables arising out of
or relating to the LCC Products Business in excess of $50,000, the amount owing
and the aging of such receivable, the name of the party from whom such
receivable is owing, and any security therein in favor of LCC or any LCC
Subsidiary. All accounts receivable included in the LCC Purchased Assets will be
fully collectible, subject to the reserve for bad debts set forth in the LCC
Products June 30 Balance Sheet.
6.25 LABOR RELATIONS. Neither LCC nor any LCC Subsidiary is a party to
any collective bargaining or similar agreement with respect to any of the LCC
Transferred Employees. There is no strike, labor, dispute, slowdown, stoppage or
other material interference with or impairment by labor of the LCC Products
Business actually pending or, to the knowledge of LCC, threatened, against LCC
or any LCC Subsidiary with respect to the LCC Products Business.
6.26 PENSION AND BENEFIT PLANS.
(a) Except as set forth in Schedule 6.26(a), LCC and the LCC Subsidiaries
(i) do not maintain and have never maintained any LCC Plan (as hereinafter
defined) or LCC Other Arrangement (as hereinafter defined), (ii) are not and
have never been a party to any LCC
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Plan or LCC Other Arrangement and (iii) have no obligations under any LCC Plan
or LCC Other Arrangement. For purposes of this Agreement, (i) "LCC Plan" means
any plan, program or arrangement, whether or not written, that is or was an
"employee benefit plan" as such term is defined in Section 3(3) of ERISA and (A)
which was or is established or maintained by LCC or any LCC Subsidiary in
respect of any employee of the LCC Products Business; (B) to which LCC or any
LCC Subsidiary contributed or was obligated to contribute or to fund or provide
benefits in respect of any employee of the LCC Products Business; or (C) which
provides or promises benefits to any person who performs or who has performed
services for LCC or any LCC Subsidiary in respect of the LCC Products Business
and because of those services is or has been a participant therein or entitled
to benefits thereunder, and (ii) "LCC Other Arrangement" means a benefit program
or practice providing for bonuses, incentive compensation, vacation pay,
severance pay, insurance, restricted stock, stock options, employee discounts,
company cars, tuition reimbursement, Tax equalization benefits, domestic or
overseas assignment benefits or any other perquisite or benefit (including,
without limitation, any fringe benefit under Section 132 of the Code) to
employees, officers or independent contractors of LCC or any LCC Subsidiary in
respect of the LCC Products Business that is not a LCC Plan.
(b) LCC has, or will have prior to the Closing, furnished to Allen
true and complete copies of each of the following documents: (i) the documents
setting forth the terms of each LCC Plan; (ii) all related trust agreements or
annuity agreements (and any other funding document) for each LCC Plan; (iii) for
the three most recent plan years, all annual reports (Form 5500 Series) on the
LCC International, Inc. 401(k) and Profit Sharing Plan (the "LCC 401(k) Plan");
and (iv) the current summary plan description and subsequent summaries of
material modifications for each LCC Plan that is a Title I Plan. For each LCC
Other Arrangement, LCC has, or will have prior to the Closing, furnished to
Allen true and complete copies of each policy, agreement or other document
setting forth or explaining the terms of the LCC Other Arrangement.
(c) No LCC Plan is a Multiemployer Plan, an ESOP, a Defined Benefit
Plan or a funded Welfare Plan.
(d) LCC and each LCC Subsidiary have complied in all respects with
all applicable provisions of the Code, ERISA, the National Labor Relations Act,
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act, the Fair Labor Standards Act, the Securities Act, the Exchange Act, and all
other Applicable Laws pertaining to the LCC Plans, LCC Other Arrangements and
other employee or employment related benefits, except where the failure so to
comply would not have a LCC Material Adverse Effect. Neither LCC nor any LCC
Subsidiary has any pending unfair labor practice charges, contract grievances
under any collective bargaining agreement, other administrative charges, claims,
grievances or lawsuits before any Governmental Authority arising under any
Applicable Law governing any LCC Plan, except for any such charge, claim,
grievance or lawsuit that, if decided adversely to LCC and the LCC Subsidiaries,
would not have a LCC Material Adverse Effect, and, to the knowledge of LCC,
there exist no facts that could give rise to such a claim.
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(e) No LCC Plan or LCC Other Arrangement, individually or
collectively, provides for any payment by LCC or any LCC Subsidiary to any
employee or independent contractor that is not deductible under Section
162(a)(1) or 404 of the Code or that is an "excess parachute payment" pursuant
to Section 280G of the Code.
(f) No LCC Plan promises or provides post-retirement medical, life
insurance or other benefits due now or in the future to current, former or
retired employees of the LCC Products Business, other than as required by
Section 601 of ERISA.
(g) No severance obligations shall be triggered as a result of the
Closing in respect of any LCC Transferred Employee of LCC GmbH who becomes an
employee of Allen as of the Closing.
(h) All payments with respect to the LCC AS private pension plan have
been paid when due and there is no unfunded liability thereunder for which LCC
AS is responsible.
6.27 TRANSACTIONS WITH RELATED PARTIES. Except as set forth in Schedule
6.27, neither any present or former officer, director, stockholder or Affiliate
of LCC or any LCC Subsidiary, nor any Affiliate thereof, is currently a party
to any transaction or Contract with LCC (in respect of the LCC Products
Business) or any LCC Subsidiary, including, without limitation, any Contract
providing for the employment of, furnishing of services by, rental of the LCC
Purchased Assets from or to, or otherwise requiring payments to, any such
officer, director, stockholder or Affiliate.
6.28 EMPLOYEES. Neither LCC (in respect of the LCC Products Business)
nor any LCC Subsidiary has any written employment Contract with any LCC
Transferred Employee except such employment Contracts as are set forth in
Schedule 6.28(a). Schedule 6.28(a) lists the name of each LCC Transferred
Employee and, with respect to each such LCC Transferred Employee, such LCC
Transferred Employee's position with LCC or the LCC Subsidiaries, initial
employment date, a brief description of such LCC Transferred Employee's
responsibilities and such LCC Transferred Employee's 1997 and current salary or
hourly wage, bonus or incentive compensation, total taxable compensation for
1997 and the period from January 1, 1998 through August 31, 1998, and accrued
vacation for 1997 and the period from January 1, 1998 through August 31, 1998.
No changes in the basis for remuneration of the LCC Transferred Employees have
been made, promised or authorized by LCC or any LCC Subsidiary from and
including January 1, 1998 except in the ordinary course of business consistent
with past practice or as disclosed on Schedule 6.28(b). Except as disclosed in
Schedule 6.28(b), other than general understandings which may exist for
employment at will, no oral understandings currently exist between any
executive officer or other representative of LCC or any LCC Subsidiary
authorized to enter into such understandings on behalf of LCC or any LCC
Subsidiary and any LCC Transferred Employee regarding changes in compensation,
promotion or any other change in status. Except as specified in Schedule
6.28(b), no LCC Transferred Employee has advised any
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executive officer, manager or supervisor of LCC or any
LCC Subsidiary, orally or in writing, that he or she intends to terminate such
employment or to refuse employment by Allen after the Closing, if Allen offers
such employment.
6.29 DISCLOSURE. No representation or warranty by LCC contained in this
Agreement nor any statement or certificate furnished or to be furnished by or on
behalf of LCC to Allen or its representatives in connection therewith or
pursuant hereto contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact required to make the
statements contained herein or therein not misleading. There is no fact (other
than matters of an economic or political nature affecting the telecommunications
industry generally which do not affect the LCC Products Business uniquely) known
to LCC that has not been disclosed by LCC to Allen that might reasonably be
expected to have or result in a LCC Material Adverse Effect.
6.30 DEFINITION OF LCC'S KNOWLEDGE. As used in this Agreement, the phrase
"to the knowledge of LCC" or words of similar import means the current actual
knowledge of Geoffrey S. Carroll, Richard Hozik, Peter A. Deliso, J. Michael
Bonin, Stuart P. Lawson, John Morris (as of the date of his termination of
employment with LCC), Eric Reed, Donald R. Rose, and Eirik Lund.
ARTICLE 7
COVENANTS PENDING CLOSING
7.1 CONDUCT OF COMSEARCH BUSINESS. Except as otherwise contemplated by
this Agreement, during the period from the date hereof through the Closing Date,
Allen will, and will cause each Comsearch Subsidiary to, use its reasonable
efforts to conduct the operations of the Comsearch Business in the ordinary and
usual course, consistent with past and current practices, to preserve the
Comsearch Business and maintain its existing franchises and licenses, and to
preserve the goodwill of the employees, representatives, suppliers and customers
of the Comsearch Business. Allen shall, and shall cause each Comsearch
Subsidiary to, maintain in full force and effect all of its existing casualty,
liability and other insurance, if any, covering the Comsearch Business and the
Comsearch Purchased Assets through the day following the Closing Date in amounts
not less than those in effect on the date hereof, except for changes in such
insurance that are made in the ordinary course of business consistent with past
practice.
7.2 CONDUCT OF LCC PRODUCTS BUSINESS. Except as otherwise contemplated by
this Agreement, during the period from the date hereof through the Closing Date,
LCC will, and will cause each LCC Subsidiary to, use its reasonable efforts to
conduct the operations of the LCC Products Business in the ordinary and usual
course, consistent with past and current practices, to preserve the LCC Products
Business and maintain its existing franchises and licenses, and to preserve the
goodwill of the employees, representatives, suppliers and customers of the LCC
Products Business. LCC shall, and shall cause each LCC Subsidiary to, maintain
in full force
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and effect all of its existing casualty, liability and other insurance covering
the LCC Products Business and the LCC Purchased Assets through the day following
the Closing Date in amounts not less than those in effect on the date hereof,
except for changes in such insurance that are made in the ordinary course of
business consistent with past practice.
7.3 FORBEARANCES BY ALLEN. Except as contemplated by this Agreement, or
consented to by LCC in writing, during the period from the date hereof through
the Closing Date, Allen and ATII shall not, and shall cause each Comsearch
Subsidiary not to:
(a) mortgage, pledge or otherwise place or allow to be placed a
Lien on any of the Comsearch Purchased Assets or any property or assets
of any Comsearch Subsidiary;
(b) sell, lease, transfer or otherwise dispose of any of the
Comsearch Purchased Assets or any property or assets of any Comsearch
Subsidiary except in the ordinary course of business;
(c) waive or release any rights of the Comsearch Business of
material value, or cancel, compromise, release or assign any indebtedness
owed to the Comsearch Business or any claims held by the Comsearch
Business, except in the ordinary and usual course of business;
(d) purchase any property or assets on behalf of the Comsearch
Business, except in the ordinary course of business;
(e) fail to pay accounts payable or other obligations of the
Comsearch Business when they become due and payable, except those being
contested in good faith;
(f) fail to replenish inventory of the Comsearch Business in the
ordinary course of business, consistent with past practices;
(g) fail to perform in all respects its obligations under all
material Contracts relating to the Comsearch Business or affecting the
Comsearch Purchased Assets or any assets of the Comsearch Subsidiaries,
or fail to comply in all respects with all material Applicable Laws
pertaining to the Comsearch Purchased Assets or the Comsearch Business,
except where the failure so to perform or so to comply would not,
individually or in the aggregate, have a Comsearch Material Adverse
Effect;
(h) enter into or terminate any material Contract with respect to
the Comsearch Business, or make any change in any of its material
Contracts with respect to the Comsearch Business, other than accepting
purchase orders from customers and issuing supply orders to suppliers in
the ordinary course of business and except where any such action would
not, individually or in the aggregate, have a Comsearch Material Adverse
Effect;
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(i) increase the compensation or fringe benefits of any Comsearch
Transferred Employees or any officer or employee of any Comsearch
Subsidiary (other than compensation increases in accordance with the
customary compensation practices of the Comsearch Business and related
changes in fringe benefits) or pay or agree to pay any pension or
retirement benefit to any such officer or employee not required by any
existing employment agreement or employee benefit plan other than
retention bonuses that are and after the Closing will be solely the
liability of Allen;
(j) amend the charter or by-laws or other organizational document
of any Comsearch Subsidiary;
(k) authorize or permit any of the Comsearch Subsidiaries to (i)
issue additional shares of its capital stock except to Allen (in the case
of Comsearch Holdings) or Comsearch Holdings (in the case of Telespectro
and Comsearch UK), (ii) directly or indirectly redeem, purchase or
otherwise acquire any of its capital stock, or (iii) declare, set aside
or pay any dividend on, or make any other distribution in respect of,
outstanding shares of capital stock or other securities, except for any
dividend or other distribution of any cash on hand or cash equivalents,
other than petty cash held for use exclusively in the Comsearch Business;
(l) enter into any Contract that may reasonably be expected to
have a Comsearch Material Adverse Effect;
(m) borrow or agree to borrow any funds on behalf of the Comsearch
Business, other than trade payables, or directly or indirectly guarantee
or agree to guarantee the obligations of any other Person on behalf of
the Comsearch Business;
(n) make any loan or advance to any Person on behalf of the
Comsearch Business;
(o) take any action that may reasonably be expected to violate any
Applicable Law, except where any such action would not, individually or
in the aggregate, result in a Comsearch Material Adverse Effect;
(p) accept any new work under the Contracts identified in Items 1,
2 and 4 of Schedule 5.16;
(q) commit any act or omit to do any act, or engage in any
activity or transaction or incur any obligation (by conduct or
otherwise), that (individually or in the aggregate) reasonably could be
expected to have a Comsearch Material Adverse Effect; or
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(r) take any action or fail to take any action that reasonably
could be expected to cause any of the representations, warranties or
covenants contained herein to be materially untrue or incorrect or
incapable of being performed or satisfied on the Closing Date.
7.4 FORBEARANCES BY LCC. Except as contemplated by this Agreement, or
consented to by Allen in writing, during the period from the date hereof through
the Closing Date, LCC and LCC GmbH shall not, and shall cause LCC AS not to:
(a) mortgage, pledge or otherwise place or allow to be placed a
Lien on any of the LCC Purchased Assets or any property or assets of LCC
AS;
(b) sell, lease, transfer or otherwise dispose of any of the LCC
Purchased Assets or any property or assets of LCC AS except in the
ordinary course of business;
(c) waive or release any rights of the LCC Products Business of
material value, or cancel, compromise, release or assign any indebtedness
owed to the LCC Products Business or any claims held by the LCC Products
Business, except in the ordinary and usual course of business;
(d) purchase any property or assets on behalf of the LCC Products
Business, except in the ordinary course of business;
(e) fail to pay accounts payable or other obligations of the LCC
Products Business when they become due and payable, except those being
contested in good faith;
(f) fail to replenish inventory of the LCC Products Business in
the ordinary course of business, consistent with past practices;
(g) fail to perform in all respects its obligations under all
material Contracts relating to the LCC Products Business or affecting the
LCC Purchased Assets or any assets of LCC AS nor fail to comply in all
respects with all material Applicable Laws pertaining to the LCC
Purchased Assets or the LCC Products Business, except where the failure
so to perform or so to comply, individually or in the aggregate, would
not have a LCC Material Adverse Effect;
(h) enter into or terminate any material Contract with respect to
the LCC Products Business, or make any change in any of its material
Contracts with respect to the LCC Products Business, other than accepting
purchase orders from customers and issuing supply orders to suppliers in
the ordinary course of business and except where any such action would
not, individually or in the aggregate, have a LCC Material Adverse
Effect;
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(i) increase the compensation or fringe benefits of any LCC
Transferred Employees or any officer or employee of LCC AS (other than
compensation increases in accordance with the customary compensation
practices of the LCC Products Business and related changes in fringe
benefits) or pay or agree to pay any pension or retirement benefit to any
such officer or employee not required by any existing employment
agreement or employee benefit plan;
(j) amend the charter or by-laws or other organizational document
of LCC AS;
(k) authorize or permit either of the LCC Subsidiaries to (i)
issue additional shares of its capital stock or additional equity
interests except to LCC, (ii) directly or indirectly redeem, purchase or
otherwise acquire any of its capital stock, or (iii) declare, set aside
or pay any dividend on, or make any other distribution in respect of,
outstanding shares of capital stock or other securities, except for any
dividend or other distribution of any cash on hand or cash equivalents by
LCC GmbH or, to the extent permitted by Section 8.23(b), LCC AS, other
than petty cash held for use exclusively in the LCC Products Business;
(l) enter into any Contract that may reasonably be expected to
have a LCC Material Adverse Effect;
(m) borrow or agree to borrow any funds on behalf of the LCC
Products Business, other than trade payables, or directly or indirectly
guarantee or agree to guarantee the obligations of any other Person on
behalf of the LCC Products Business, except for borrowings under the LCC
AS Working Capital Facility in the ordinary course of business consistent
with past practice the proceeds of which shall be applied solely to the
working capital needs of LCC AS;
(n) make any loan or advance to any Person on behalf of the LCC
Products Business;
(o) take any action that may reasonably be expected to violate any
Applicable Law, except where any such action would not, individually or
in the aggregate, result in a LCC Material Adverse Effect;
(p) make any payments owed from LCC AS to LCC pursuant to the LCC
AS Intercompany Credit Facility or any payments pursuant to the LCC AS
Asset Purchase Agreement;
(q) commit any act or omit to do any act, or engage in any
activity or transaction or incur any obligation (by conduct or
otherwise), that (individually or in the aggregate) reasonably could be
expected to have a LCC Material Adverse Effect; or
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(r) take any action or fail to take any action that reasonably
could be expected to cause any of the representations, warranties or
covenants contained herein to be materially untrue or incorrect or
incapable of being performed or satisfied on the Closing Date.
ARTICLE 8
ADDITIONAL COVENANTS AND AGREEMENTS
8.1 FILINGS WITH GOVERNMENTAL AUTHORITIES. As promptly as possible after
the execution and delivery of this Agreement:
(a) Allen and LCC shall file Notification and Report Forms under the
HSR Act with the FTC and the DOJ. The filing fee for filing such Notification
and Report Forms shall be borne equally by Allen and LCC;
(b) Allen shall file a notification pursuant to the Norwegian
Acquisition Act 1994 with the Norwegian Ministry of Industry and Trade
containing all items listed in Article 8 of the Norwegian Acquisition Act 1994;
(c) Allen and LCC GmbH shall file a joint Notification of a Planned
Merger pursuant to the German Act Against Restraints on Competition with the
German Federal Cartel Office. The filing fee for filing such Notification of a
Planned Merger shall be borne equally by Allen and LCC;
(d) LCC shall file a notification pursuant to the UK Restrictive
Practices Act with the United Kingdom Office of Fair Trading. The filing fee for
filing such notification shall be borne equally by Allen and LCC; and
(e) LCC shall file a notification pursuant to the Mexican Foreign
Investment Law with the Mexican Foreign Investment National Registry. The filing
fee for filing such notification shall be borne equally by Allen and LCC.
Each party shall cooperate with the other parties with respect to such filings
and the filing of any additional information required or requested in connection
with any such filings.
8.2 ACCESS AND INFORMATION. Each of Allen and LCC (each, a "Principal
Party") shall, and shall cause such Principal Party's direct and indirect
subsidiaries to, afford to the other Principal Party and its representatives
reasonable access during normal business hours throughout the period prior to
the Closing Date to the books, records, Contracts, and officers, and, subject to
such Principal Party's consent with respect to timing and other relevant
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procedural matters (which consent shall not be unreasonably withheld), to the
offices, employees, consultants and contractors of or relating to the Comsearch
Business, in the case of Allen, and the LCC Products Business, in the case of
LCC (the "Applicable Business"), and to such other information relating to the
Applicable Business as such other Principal Party shall reasonably request;
provided, however, that each Principal Party shall be entitled to be present
when the other Principal Party and its representatives are given access to any
employees other than officers. All information furnished or to be furnished by
any party or its agents (the "Disclosing Party") to any other party or its
agents (the "Recipient") pursuant hereto shall not be used in any way that may
be detrimental to the Disclosing Party and shall be kept confidential until the
Closing. If the Closing shall not occur, the Recipient shall return to the
Disclosing Party all written material containing or reflecting any such
information, and the Recipient shall not retain any copies, extracts or other
reproductions in whole or in part of such written material and shall destroy all
documents, memoranda, notes and other writings (or portions of any such
writings, if applicable) whatsoever prepared by the Recipient or any of its
advisors based on such information. The obligation to keep such information
confidential shall continue if this Agreement is terminated but shall not apply
to (a) disclosure required by Applicable Law (subject to giving the Disclosing
Party notice as promptly as possible of the intention to make such disclosure
and providing the Disclosing Party the opportunity to seek a protective order),
(b) any information which (i) the Recipient can establish was already in its
possession prior to the disclosure thereof by the Disclosing Party or its
agents, (ii) was then generally known to the public, (iii) became known to the
public through no fault of the Recipient, or (iv) was disclosed to the Recipient
by a third party not known by the Recipient to be bound by an obligation of
confidentiality.
8.3 CONSENTS. Prior to the Closing, each party at its sole expense shall
use reasonable efforts to obtain, prior to the Closing, all material consents,
waivers and other approvals which shall be required of such party from any
Governmental Authority or any other Person (including any lender, licensor or
lessor) in order to effectuate the transactions contemplated hereby. Except as
otherwise expressly provided in this Agreement, the consummation of the
transactions contemplated hereby is not conditioned upon obtaining any such
consent. In the event any party is unable to obtain as of the Closing any
consent, waiver or approval that is required in order to transfer or assign any
Comsearch Purchased Asset or LCC Purchased Asset, as the case may be, including
any Contract included in the Comsearch Purchased Assets or the LCC Purchased
Assets, as the case may be, (a) the parties shall enter into such arrangement as
is necessary to provide LCC with the benefits of all Comsearch Purchased Assets
as to which such consent, waiver or approval has not been obtained by the
Closing and, with respect to any Contracts included in such Comsearch Purchased
Assets, LCC shall pay and perform all obligations of Allen accruing thereunder
after the Closing Date, and (b) the parties shall enter into such arrangement as
is necessary to provide Allen with the benefit of all LCC Purchased Assets as to
which such consent, waiver or approval has not been obtained by the Closing and,
with respect to any Contract included in such LCC Purchased Assets, Allen shall
pay and perform all obligations of LCC or LCC GmbH, as the case may be, accruing
thereunder after the Closing Date.
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8.4 COOPERATION. Each party shall (a) cooperate with the other parties
and take all actions reasonably required to obtain on a timely basis any
consents, waivers and approvals required to consummate the transactions
contemplated by this Agreement, and (b) use all reasonable efforts to satisfy
promptly the conditions to the Closing specified in this Agreement. In
connection with the foregoing, Allen agrees to offer such financial inducements
to those employees referred to in Section 15.1(f)(i) as it shall determine in
its sole discretion to be appropriate to facilitate satisfaction of the
condition set forth in Section 15.1(f)(i). Each party shall furnish to the other
parties and to the other parties' counsel all such information as may be
reasonably required in order to effectuate the foregoing actions.
Notwithstanding the foregoing and Section 8.3, each party acknowledges that the
approval of the transactions contemplated by this Agreement by the lenders to
the other parties is within the discretion of such lenders and not within the
control of such other parties.
8.5 FINANCIAL STATEMENTS.
(a) Until the Closing, on or before the 21st day of each month, (i)
Allen shall deliver to LCC unaudited consolidated financial statements,
including a balance sheet and statement of income, of the Comsearch Business for
the immediately preceding month (the "Comsearch Subsequent Monthly Financial
Statements"), and (ii) LCC shall deliver to Allen unaudited consolidated
financial statements, including a balance sheet and statement of income, of the
LCC Products Business for the immediately preceding month (the "LCC Products
Subsequent Monthly Financial Statements"). Allen shall deliver to LCC the
Comsearch Subsequent Monthly Financial Statements, and LCC shall deliver to
Allen the LCC Products Subsequent Monthly Financial Statements, for the months
ended July 31, 1998 and August 31, 1998 no later than five Business Days after
the date hereof. At the time that the Comsearch Subsequent Monthly Financial
Statements are delivered pursuant hereto, Allen shall by such delivery be deemed
to have made the same representations and warranties with respect to such
Comsearch Subsequent Monthly Financial Statements as those made with respect to
the Comsearch Interim Financial Statements in Section 5.6, and at the time that
the LCC Products Subsequent Monthly Financial Statements are delivered pursuant
hereto, LCC shall by such delivery be deemed to have made the same
representations and warranties with respect to such LCC Products Subsequent
Monthly Financial Statements as those made with respect to the LCC Products
Interim Financial Statements in Section 6.6.
(b) Prior to the Closing Date, Allen shall prepare such audited and
unaudited financial statements relating to the Comsearch Business as LCC may
request to meet the requirements of Item 7 of Form 8-K under the Exchange Act.
To the extent that audited financial statements are so required, Allen shall
cause an internationally recognized independent public accounting firm to audit
such financial statements in accordance with generally accepted auditing
standards, to consult regularly with LCC during such audit, to comply with the
reasonable requests of LCC in connection with such audit, and to issue a report
on such financial statements. The cost of such internationally recognized
independent public accounting firm in connection with such audit shall be borne
by LCC. Allen shall deliver such audited and unaudited financial
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statements and related reports to LCC as promptly as practicable, but in no
event later than the Closing Date, for inclusion in a Form 8-K to be filed by
LCC in connection with the transactions contemplated hereby. At the time that
such financial statements are delivered pursuant hereto, Allen shall by such
delivery be deemed to have made the same representations and warranties with
respect to such financial statements as those made with respect to the Comsearch
Interim Financial Statements in Section 5.6
8.6 BOOKS AND RECORDS. Possession of the books, records and files
included in the Comsearch Purchased Assets, including, without limitation, all
of the value added tax records of Comsearch UK which are required by the United
Kingdom Value Added Tax Act 1994 Section 49 (1)(b) to be preserved by LCC, shall
be delivered to LCC at the Closing. Allen shall not make any request to H M
Customs and Excise for the value added tax records referred to in the preceding
sentence to be taken out of the custody of Comsearch UK. Possession of the
books, records and files included in the LCC Purchased Assets shall be delivered
to Allen at the Closing. Each Principal Party will store and retain all business
records purchased by such Principal Party hereunder for a period of seven (7)
years after the Closing Date, and after such period of time (a) shall give
written notice to the other Principal Party that it is using such records and
wishes to retain them or (b) shall make such records available to the other
Principal Party at the location of such records at the time for removal by the
other Principal Party, at the other Principal Party's sole expense, at any time
during normal business hours within ninety (90) days after the seventh
anniversary of the Closing Date. If either Principal Party elects to retain the
business records purchased by such Principal Party hereunder after the seventh
anniversary of the Closing Date following written notice to the other Principal
Party that it desires to retain such records, and if it wishes to destroy or
otherwise dispose of such records at any time thereafter, it shall give written
notice to the other Principal Party at least ninety (90) days prior to such
destruction or disposal and upon request of the other Principal Party, it shall
make such records available to the other Principal Party for a period of ninety
(90) days for removal by such other Principal Party, at such other Principal
Party's sole expense. During any period before or after such seven (7) year
period or additional period, as the case may be, that a Principal Party retains
such records, such Principal Party shall give the other Principal Party and its
authorized representatives reasonable access to such records during normal
business hours upon reasonable notice at all times and shall permit the other
Principal Party and its authorized representatives to duplicate any computer
programs required to be maintained by the other Principal Party or any of its
Affiliates pursuant to any agreement with the Internal Revenue Service, the
right to copy any such records, and the right to temporarily remove any such
records in connection with any judicial or administrative proceedings before any
Governmental Authority, all at such other Principal Party's sole expense.
8.7 TRANSFERRED EMPLOYEES.
(a) As used in this Agreement, "Comsearch Transferred Employees"
means the employees of the Comsearch Business set forth in Schedule 5.28(a), if
employed by Allen or a Comsearch Subsidiary on the Closing Date.
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(b) As used in this Agreement, "LCC Transferred Employees" means the
employees of the LCC Products Business set forth in Schedule 6.28(a), if
employed by LCC or a LCC Subsidiary on the Closing Date.
(c) Allen shall offer employment to all the LCC Transferred Employees
(except for the LCC Transferred Employees of LCC AS, whose employment shall not
be affected by the transactions contemplated hereby) effective as of the day
following the Closing Date at the same salary or hourly wage set forth in
Schedule 6.28(a), subject to Allen's right to terminate any such LCC Transferred
Employee, in accordance with Applicable Laws, at any time with or without cause.
Except as otherwise required by Applicable Law or provided in this Article 8,
Allen shall employ the LCC Transferred Employees who accept such employment
offer in accordance with, and subject to, Allen's usual terms, conditions and
policies of employment, including all of Allen's policies regarding modification
of the terms and conditions of employment. Notwithstanding anything contained
herein to the contrary, this Section 8.7 shall not create any obligation on the
part of Allen or any of its Affiliates to continue the employment of any LCC
Transferred Employee. LCC shall terminate the employment of any LCC Transferred
Employee who does not accept employment with Allen, effective as of the day
following the Closing Date. LCC shall have no obligation to pay any severance or
other liability, obligation or commitment resulting from any such termination.
(d) LCC shall offer employment to all the Comsearch Transferred
Employees (except for the Comsearch Transferred Employees of the Comsearch
Subsidiaries, whose employment shall not be affected by the transactions
contemplated hereby) effective as of the day following the Closing Date at the
same salary or hourly wage set forth in Schedule 5.28(a), subject to LCC's right
to terminate any such Comsearch Transferred Employee, in accordance with
Applicable Laws, at any time with or without cause. Except as otherwise required
by Applicable Law or provided in this Article 8, LCC shall employ the Comsearch
Transferred Employees who accept such employment offer in accordance with, and
subject to, LCC's usual terms, conditions and policies of employment, including
all of LCC's policies regarding modification of the terms and conditions of
employment. Notwithstanding anything contained herein to the contrary, this
Section 8.7 shall not create any obligation on the part of LCC or any of its
Affiliates to continue the employment of any Comsearch Transferred Employee.
Allen shall terminate the employment of any Comsearch Transferred Employee who
does not accept employment with LCC, effective as of the day following the
Closing Date. Allen shall have no obligation to pay any severance or other
liability, obligation or commitment resulting from any such termination.
(e) LCC shall have no obligation to provide or cause to be provided
retiree medical, health and life benefits to any retired or former employee of
the Comsearch Business who is entitled to such benefits as of the Closing Date
and Allen shall have no obligation to provide or cause to be provided retiree
medical, health and life benefits to any retired or former employee of the LCC
Products Business who is entitled to such benefits as of the Closing Date.
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(f) Except as provided in Section 8.7(n), neither Principal Party
assumes any liability with respect to any benefit plan of the other Principal
Party or any benefits or other amounts payable or provided thereunder,
including, without limitation, any Tax equalization policies and benefits or
domestic or overseas assignment policies and benefits.
(g) From the Closing Date until the second anniversary of the Closing
Date, Allen will not, and will cause its Affiliates not to, solicit, seek to
hire or hire any Comsearch Transferred Employee (other than Comsearch
Transferred Employees who are terminated during such period by LCC and its
Affiliates) and LCC will not, and will cause its Affiliates not to, solicit,
seek to hire or hire any LCC Transferred Employee other than LCC Transferred
Employees who are terminated during such period by Allen and its Affiliates.
(h) Each party shall provide any notifications to its employees
required under the Workers Adjustment and Retraining Notification Act (the "WARN
Act") and shall bear any liabilities arising under the WARN Act with respect to
employees who are not included in the Comsearch Transferred Employees (in the
case of Allen) or the LCC Transferred Employees (in the case of LCC).
(i) As soon as practicable following the Closing Date, the Comsearch
Transferred Employees shall be eligible to participate in LCC's retirement plans
("LCC Retirement Plans") on the same terms and conditions as similarly situated
employees of LCC are eligible to participate therein, subject to the terms and
conditions of such plans. LCC shall cause the LCC Retirement Plans to recognize
prior service of the Comsearch Transferred Employees under corresponding Allen
retirement plans on and prior to the Closing Date as service with LCC and its
Affiliates for purposes of eligibility (including eligibility for early
retirement benefits) and vesting (but not benefit accrual) thereunder. The
benefit coverage which will be provided under the LCC Retirement Plans shall
commence on the day immediately following the Closing Date.
(j) As soon as practicable following the Closing Date, the LCC
Transferred Employees shall be eligible to participate in Allen's retirement
plans ("Allen Retirement Plans") on the same terms and conditions as similarly
situated employees of Allen are eligible to participate therein, subject to the
terms and conditions of such plans. Allen shall cause the Allen Retirement Plans
to recognize prior service of the LCC Transferred Employees under corresponding
LCC retirement plans on and prior to the Closing Date as service with Allen and
its Affiliates for purposes of eligibility (including eligibility for early
retirement benefits) and vesting (but not benefit accrual) thereunder. The
benefit coverage which will be provided under the Allen Benefit Plans shall
commence on the day immediately following the Closing Date.
(k) Each Principal Party shall not, and shall cause its Affiliates
not to, issue or approve any written release or announcement to any employee
concerning the transactions
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contemplated by this Agreement without the prior approval of the other Principal
Party (which approval shall not be unreasonably withheld).
(l) No provision of this Article 8 shall create any third party
beneficiary rights in any employee or former employee (including any beneficiary
or dependent of such employee or former employee) of Allen or LCC with respect
to continued or resumed employment or other matters, or create any rights in any
such persons in respect of any benefit plan or arrangement.
(m) Allen and LCC acknowledge and agree that LCC or any of its
Affiliates shall be entitled to offer employment to and employ the employees of
LCC AS set forth in Schedule 8.7(m), and no party shall have any claim against
any other party with respect thereto.
(n) (i) LCC agrees to seek promptly a determination letter with
respect to the Tax qualification of the LCC 401(k) Plan (the "LCC Determination
Letter") and shall furnish a copy thereof to Allen promptly after LCC's receipt
thereof. As soon as practicable following the receipt by Allen of a copy of the
LCC Determination Letter, Allen will cause the account balances (including loan
balances) of all Comsearch Transferred Employees in the Allen 401(k) Plan,
including all amounts required to fund the unvested portion of all
profit-sharing contributions to such Comsearch Transferred Employees, to be
transferred to the LCC 401(k) Plan and LCC will cause the LCC 401(k) Plan to
accept such transfer. To the extent permitted under Applicable Law, the account
balances transferred from the Allen 401(k) Plan shall continue to be subject to
the same vesting schedule in the LCC 401(k) Plan as was applicable prior to such
transfer, provided, however, that if any Comsearch Transferred Employee is
terminated involuntarily by LCC or its Affiliates prior to full vesting, such
Comsearch Transferred Employee shall be fully vested in his or her transferred
account balance, provided further that if such additional vesting cannot be
provided under the terms of the LCC 401(k) Plan, LCC or its Affiliates shall
make a payment to the involuntarily terminated Comsearch Transferred Employee
equal to the amount of such employee's transferred account balance which has
been forfeited. LCC shall have no obligation to make any profit-sharing
contribution described in the Allen 401(k) Plan to any Comsearch Transferred
Employee.
(ii) As soon as practicable following the receipt by LCC of the
LCC Determination Letter, LCC will cause the account balances (including loan
balances) of all LCC Transferred Employees in the LCC 401(k) Plan to be
transferred to the Allen 401(k) Plan and Allen will cause the Allen 401(k) Plan
to accept such transfer.
8.8 WELFARE BENEFIT PLANS.
(a) As of the Closing Date or as soon thereafter as practicable, each
Comsearch Transferred Employee shall cease to participate in Allen's employee
welfare benefit plans. Allen's employee welfare benefit plans shall be liable
for the payment of the benefit claims incurred by any such Comsearch Transferred
Employee and/or any such employee's eligible dependents on or prior to the
Closing Date in accordance with the terms of the applicable
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plan. LCC's employee welfare benefit plans shall cover the Comsearch Transferred
Employees who participated in Allen's employee welfare benefit plans. The group
health plan made available by LCC to provide medical coverage for Comsearch
Transferred Employees and their dependents pursuant to this Section 8.8 shall
waive any applicable waiting periods for coverage of Comsearch Transferred
Employees and their dependents and shall not contain any exclusion or limitation
with respect to any pre-existing condition of a Comsearch Transferred Employee
or any dependents of a Comsearch Transferred Employee. LCC will provide under
its comprehensive medical and dental plans for integration of current year
co-payments, co-insurance and payments made under a deductible in Allen's
corresponding plans.
(b) As of the Closing Date or as soon thereafter as practicable, each
LCC Transferred Employee shall cease to participate in LCC's employee welfare
benefit plans. LCC's employee welfare benefit plans shall be liable for the
payment of the benefit claims incurred by any such LCC Transferred Employee
and/or any such employee's eligible dependents on or prior to the Closing Date
in accordance with the terms of the applicable plan. Allen's employee welfare
benefit plans shall cover the LCC Transferred Employees who participated in
LCC's employee welfare benefit plans. The group health plan made available by
Allen to provide medical coverage for LCC Transferred Employees and their
dependents pursuant to this Section 8.8(b) shall waive any applicable waiting
periods for coverage of LCC Transferred Employees and their dependents and shall
not contain any exclusion or limitation with respect to any pre-existing
condition of a LCC Transferred Employee or any dependents of a LCC Transferred
Employee. Allen will provide under its comprehensive medical and dental plans
for integration of current year co-payments, co-insurance and payments made
under a deductible in LCC's corresponding plans.
8.9 SEVERANCE POLICY.
(a) As of the Closing Date, LCC shall have in force (i) a severance
and employee termination policy (the "Section 8.9(a)(i) Plan") covering the
Comsearch Transferred Employees who were covered by Allen's Key Employee
Severance Policy on the Closing Date, which provides benefits which are not less
favorable to such Comsearch Transferred Employees than Allen's Key Employee
Severance Policy (the "Comsearch Transferred Option Employees"), and (ii) a
severance policy (the "Section 8.9(a)(ii) Plan") covering the other Comsearch
Transferred Employees ("Comsearch Other Transferred Employees") which provides
for severance benefits equal to four weeks' salary plus one week's salary for
each full year of service, including service with predecessors. LCC shall
maintain such severance and employee termination policies in effect for a
minimum of one year after the Closing Date. In the administration of such
policies or any severance policy applicable after such minimum one year period,
LCC shall recognize service with Allen as service with LCC.
(b) As of the Closing Date, Allen shall have in force a severance
policy covering the LCC Transferred Employees which provides for severance
benefits equal to four weeks' salary plus one week's salary for each full year
of service. Allen shall maintain such
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severance and employee termination policy in effect for a minimum of one year
after the Closing Date. In the administration of such policy or any severance
policy applicable after such minimum one year period, Allen shall recognize
service with LCC as service with Allen.
(c) (i) Allen shall reimburse LCC for the excess of any amounts paid
by LCC to Comsearch Transferred Option Employees under the Section 8.9(a)(i)
Plan as a result of the termination of their employment by LCC on or prior to
the date 150 days following the Closing Date for up to thirteen (13) of the
Comsearch Transferred Option Employees (as selected by LCC), but only to the
extent the amount so paid by LCC exceeds the amount which would have been
payable by LCC had such Comsearch Transferred Option Employees been covered by
the Section 8.9(a)(ii) Plan instead of the Section 8.9(a)(i) Plan.
(ii) If within 150 days after the Closing Date LCC elects to
terminate the employment of more than 40 Comsearch Other Transferred Employees,
Allen shall reimburse LCC for the total amount of the severance benefits paid by
LCC under the Section 8.9(a)(ii) Plan to such Comsearch Other Transferred
Employees in excess of 40 (as selected by LCC); provided, however, that the
aggregate liability of Allen pursuant to this Section 8.9(c)(ii) shall not
exceed $200,000.
(iii) Allen shall reimburse LCC for any amounts due to LCC
pursuant to this Section 8.9(c) within ten (10) days after receipt of a written
statement therefor from LCC, setting forth the manner in which such obligation
was computed.
8.10 LITIGATION ASSISTANCE. In order to assist each Principal Party in
its resolution of all actions, claims, demands, suits, proceedings,
arbitrations, grievances, citations, summons, subpoenas, inquiries, or
investigations of any nature, whether made or initiated before or after the
Closing Date, with respect to any fact, circumstance, situation, condition,
occurrence or event on or prior to the Closing Date in connection with such
Principal Party's Applicable Business (the "Claims"), each Principal Party shall
cooperate and provide such reasonable assistance as is necessary to resolve the
Claims related to the other Principal Party's Applicable Business on an
efficient and economic basis. Such cooperation shall include, but not be limited
to, making employees of such Applicable Business reasonably available in order
to investigate, defend and resolve the Claims, dealing with the Persons making
such Claims and working with the applicable insurance carrier.
8.11 HEALTH CARE ADMINISTRATION. Each party shall retain its liability to
those former employees whose employment was terminated on or prior to the
Closing Date and who are eligible to receive COBRA benefits under Section 4980B
of the Code.
8.12 TAX RETURNS.
(a) Each Principal Party shall prepare or cause to be prepared and
timely file all Tax Returns with respect to Taxes for such Principal Party's
Applicable Business, and shall timely pay all Taxes constituting Comsearch
Excluded Liabilities (in the case of Allen) or LCC
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Products Excluded Liabilities (in the case of LCC) for all taxable periods
ending on or prior to the Closing Date, even though such Tax Returns or Taxes
are not due until after the Closing Date. Such Tax Returns shall be prepared and
filed in a manner consistent with prior Tax Returns.
(b) (i) LCC shall prepare or cause to be prepared all Tax Returns
with respect to Taxes for the Comsearch Subsidiaries for all Tax periods that
begin on or prior to the Closing Date and end after the Closing Date; provided,
however, that LCC shall provide Allen with the opportunity to review and comment
on such Tax Returns prior to the filing thereof. LCC shall timely file all such
Tax Returns. With respect to the Taxes, if any, shown as due on such Tax
Returns, LCC shall timely pay the portion of such Taxes relating to the period
after the Closing Date, and Allen shall timely pay to LCC the portion of such
Taxes constituting Comsearch Excluded Liabilities.
(ii) Allen shall prepare or cause to be prepared all Tax Returns
with respect to Taxes for LCC AS for all Tax periods that begin on or prior to
the Closing Date and end after the Closing Date; provided, however, that Allen
shall provide LCC with the opportunity to review and comment on such Tax Returns
prior to the filing thereof. Allen shall timely file all such Tax Returns. With
respect to the Taxes, if any, shown as due on such Tax Returns, Allen shall
timely pay the portion of such Taxes relating to the period after the Closing
Date, and LCC shall timely pay to Allen the portion of such Taxes constituting
LCC Products Excluded Liabilities.
(iii) For Tax periods that begin on or prior to the Closing Date
and end after the Closing Date, the Taxes related to such Tax periods shall be
allocated and apportioned to the parties on the basis of an interim closing of
the books as of the end of the Closing Date. Any Tax adjustments occurring
during such periods shall be allocated to the pre-Closing period and the
post-Closing period based on a simulated Tax Return for each such period.
(c) After the Closing Date, each Principal Party shall, as may be
reasonably requested by the other Principal Party:
(i) assist such other Principal Party in preparing any Tax
Returns or reports which such other Principal Party is
responsible for preparing and filing with respect to such
other Principal Party's Applicable Business;
(ii) cooperate fully in preparing for any audits of, or any
disputes with taxing authorities regarding, any Tax Returns
of or including the Applicable Business of such other
Principal Party; and
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(iii) retain and make available to such other Principal Party and
to any taxing authority all information, records and
documents reasonably requested relating to Taxes of the
Applicable Business of such other Principal Party.
8.13 LIABILITY FOR TRANSFER TAXES AND RELATED MATTERS. Each Principal
Party shall be responsible for the timely payment of, and shall indemnify and
hold harmless the other Principal Party and its Affiliates against, all sales
(including, without limitation, bulk sales), use, value added, documentary,
stamp, gross receipts, registration, transfer, conveyance, excise, recording,
firearm, ammunition, license and other similar Taxes and fees ("Transfer
Taxes"), arising out of or in connection with or attributable to the transfer of
any assets of such Principal Party or any of its Affiliates pursuant to this
Agreement. Each Principal Party shall prepare and timely file all Tax Returns
required to be filed in respect of such Transfer Taxes, provided that the other
Principal Party shall be permitted to prepare any such Tax Returns that are the
primary responsibility of such other Principal Party or any of its Affiliates
under Applicable Law. Each Principal Party's preparation of any such Tax Returns
shall be subject to the other Principal Party's approval, which approval shall
not be withheld unreasonably.
8.14 NON-COMPETITION.
(a) For a period of three (3) years from the date of this Agreement
(the "Noncompetition Period"), (i) LCC agrees that it shall not, and shall cause
its Affiliates not to, directly or indirectly, manufacture, assemble, produce,
distribute or promote field test measurement equipment and related field test
measurement analysis software regardless of whether handsets are connected
directly or indirectly to a computer that competes with equipment and related
field test measurement analysis software currently manufactured, assembled or
produced by the LCC Products Business or Grayson, and any subsequent versions of
such equipment or software, and (ii) Allen agrees that it shall not, and shall
cause its Affiliates not to, directly or indirectly, engage in any business that
competes, directly or indirectly, with the Comsearch Business, the LCC Services
Business or any business currently conducted by any of LCC's Affiliates,
including, without limitation, the provision of network deployment services,
network optimization design services, benchmarking services, drive testing and
asset management for the communications industry, telecommunications consulting
and radio frequency engineering services and related network propagation
software (such as LCC's "Golf" product); provided that the foregoing shall not
(i) prevent Allen from providing (A) solely in conjunction with the sale of
systems products, any ancillary services currently provided by its systems
businesses or (B) emergency 911 geolocation services or (C) drive testing
services in the United Kingdom and France, or (ii) prevent LCC and its
Affiliates from (A) performing their obligations under the Supply Agreement (as
defined in Section 8.16) or (B) purchasing, acquiring, sourcing, using or
recommending any product that competes, directly or indirectly, with a product
of the LCC Products Business or Grayson as long as (1) the purchase,
acquisition, sourcing or use of such product is requested by a customer of the
LCC Services Business, without instigation by LCC or its Affiliates, or (2) the
same product, or a similar product with the
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same or better functionality, features, performance and quality, is not
available for purchase from Grayson on substantially the same or better price,
delivery and other terms, taken as a whole, in the reasonable judgment of LCC.
During the Noncompetition Period, LCC agrees to provide Allen with five (5) days
prior written notice of its intention to purchase for its internal use any
product that competes, directly or indirectly, with a product of the LCC
Products Business or Grayson.
(b) Each Principal Party acknowledges and agrees that the time,
scope, geographic area and other provisions of this Section 8.14 have been
specifically negotiated and carefully tailored with a view to preventing the
serious and irreparable injury the other Principal Party will suffer in the
event of competition by such Principal Party with the other Principal Party
during the Noncompetition Period. Each Principal Party is providing the benefits
set forth in this Agreement in reliance on the other Principal Party's
representation that the restrictions on it set forth in this Section 8.14 will
not impose an undue hardship on such other Principal Party. Each Principal Party
further acknowledges that its or any of its Affiliates' breach of this Section
8.14 will cause irreparable injury to the other Principal Party, the exact
amount of which will be difficult to ascertain, and that the remedies at law for
such breach would be inadequate. Accordingly, if a Principal Party or any of its
Affiliates breaches this Section 8.14, then the other Principal Party shall be
entitled to injunctive relief without posting bond or other security, but upon
due notice. If a Principal Party or any of its Affiliates violates this Section
8.14 and the other Principal Party brings legal action for injunctive or other
relief, such other Principal Party shall not, as a result of the time involved
in obtaining such relief, be deprived of the benefit of the full period of
noncompetition set forth in this Section 8.14. Accordingly, the covenant set
forth in this Section 8.14 shall be deemed to be extended by the time between
the date of the first violation of Section 8.14 by such Principal Party or any
of its Affiliates and the date such relief is granted.
(c) In the event that, despite the express agreement of the parties,
any provision of this Section 8.14 shall be determined by any Governmental
Authority of competent jurisdiction to be unenforceable for any reason
whatsoever, the parties agree that the restrictions of time, scope, or
geographic area reasonable under the circumstances, as determined by such
Governmental Authority, shall be substituted for any such restrictions held
unenforceable.
8.15 BULK SALES LAW. Each party hereby waives compliance by the other
parties with any bulk sales laws or similar laws relating to notice to creditors
which may be applicable to the transactions contemplated hereby.
8.16 PRODUCT SUPPLY AGREEMENT. At the Closing, Allen and LCC shall enter
into a Product Supply Agreement in the form attached hereto as Exhibit A (the
"Supply Agreement").
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8.17 TRANSITIONAL MATTERS.
(a) For the Transition Period (as defined in Section 8.17(b)), (i)
each Principal Party shall use commercially reasonable efforts to assist the
other Principal Party in collecting the accounts receivable purchased by such
other Principal Party or any of its Affiliates hereunder and shall promptly pay
over to such other Principal Party any amounts paid to it in respect of any such
purchased accounts receivable and (ii) each Principal Party shall use
commercially reasonable efforts to assist the other Principal Party in preparing
an opening balance sheet for the Applicable Business acquired by it hereunder.
(b) The parties acknowledge that a transition period from the Closing
Date until the date 90 days immediately following the Closing Date (the
"Transition Period") is required in order to relocate the LCC Transferred
Employees to Allen's facilities and to transition the management, accounting and
information systems of each Principal Party's Applicable Business to the other
Principal Party. LCC hereby grants to Allen the right (the "McLean Facility
Right"), subject to and in accordance with all the terms, covenants and
conditions of the lease Contract applicable to the McLean Facility, to (A)
occupy and use the space, telephones, facsimile machines and computers at the
McLean Facility currently occupied or used by the LCC Transferred Employees for
their intended and usual purpose in connection with the operation of the LCC
Products Business, and (B) store the tangible personal property included in the
LCC Purchased Assets at the current location of such LCC Purchased Assets in the
McLean Facility. The McLean Facility Right shall commence on the Closing Date
and shall terminate on the earlier of (A) the last day of the Transition Period
and (B) the date 15 days after delivery of a termination notice from Allen to
LCC with respect to the McLean Facility; provided, however, that Allen may
extend the McLean Facility Right by 30 days upon written notice to LCC no later
than 15 days prior to the last day of the Transition Period, in which case the
McLean Facility Right shall end on the date 30 days after the last day of the
Transition Period, unless the parties mutually agree that a longer period of
time ("Extension Period") is reasonably required in order to accommodate (i) the
fact that LCC is occupying the third floor of the Reston Facility which Allen
will sublease, and (ii) an appropriate period for Allen to build out the third
floor of the Reston Facility and move the LCC Transferred Employees and the
Purchased Assets to such third floor, in which case the McLean Facility Right
shall end at the expiration of the Extension Period. Allen shall reimburse LCC
for (A) a pro rata share of the rent payable by LCC with respect to the McLean
Facility, based on the proportion of the total square footage at the McLean
Facility occupied by LCC Transferred Employees or LCC Purchased Assets, for the
period from the Closing Date until the later of (1) the date the McLean Facility
Right terminates pursuant to this Section 8.17(b)(ii) and (2) the first date on
which no LCC Transferred Employees or LCC Purchased Assets remain in the McLean
Facility, and (B) out-of-pocket costs and expenses incurred by LCC in connection
with other transition services provided, including long distance telephone
charges, facsimile charges, copying charges and similar costs. Such
reimbursements shall be made by Allen monthly in arrears within ten (10) days
after receipt of an invoice therefor from LCC. Upon termination of the McLean
Facility Right pursuant to this Section 8.17(b)(ii), Allen shall deliver the
space in the McLean
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Facility used by it in "broom clean" condition and otherwise in the same
condition as at the Closing, except for normal wear and tear.
(c) Each Principal Party shall provide such management, accounting
and information systems support requested by the other Principal Party and
agreed to by it during the Transition Period (such agreement not to be
unreasonably withheld). Without limiting the generality of the foregoing, (i)
LCC shall make J. Michael Bonin and Eirik Lund available to provide management
support services to the LCC Products Business during the Transition Period, as
requested by Allen and agreed to by LCC, it being understood that the Principal
Parties will act reasonably and in good faith to accommodate their respective
requirements regarding such persons, and (ii) LCC shall make Shibley Shibley
available full time to provide management support services to the LCC Products
Business during the Transition Period, in each case to the extent such person is
employed by LCC or its Affiliates during the Transition Period. Each Principal
Party shall reimburse the other Principal Party and its Affiliates for all costs
and expenses incurred by the other Principal Party and its Affiliates in
providing such management, accounting and information systems support, including
(i) the pro rata share of the salary and benefits of the employees providing
such support based on the percent of such employees' time (assuming a 40 hour
work week) spent providing such support during the Transition Period, and (ii)
out-of-pocket costs and expenses incurred by the other Principal Party in
connection with such support. Such reimbursements shall be made by each
Principal Party monthly in arrears within ten (10) days after receipt of an
invoice therefor from the other Principal Party.
(d) Each Principal Party shall use its reasonable efforts to agree to
a revised Schedule 10.6 and a revised Schedule 11.5 within five Business Days
after the date hereof, which revised Schedules shall be attached hereto and
shall list only such consents, waivers and other approvals the absence of which
would constitute a Comsearch Material Adverse Effect or a LCC Material Adverse
Effect, as the case may be.
8.18 NO SOLICITATION. During the term of this Agreement, each party shall
not, and shall cause its Affiliates and any Person acting on behalf of such
party or its Affiliates not to, (a) solicit or encourage inquiries or proposals
for, or enter into any discussions with respect to, the acquisition of the
Comsearch Purchased Assets (in the case of Allen and its Affiliates) or the LCC
Purchased Assets (in the case of LCC and its Affiliates) or any properties or
assets held for use in connection with, necessary for the conduct of, or
otherwise material to, the Comsearch Business (in the case of Allen and its
Affiliates) or the LCC Products Business (in the case of LCC and its
Affiliates), or (b) furnish or cause to be furnished any non-public information
concerning the Comsearch Purchased Assets, the Comsearch Subsidiaries, or the
Comsearch Business (in the case of Allen and its Affiliates), or the LCC
Purchased Assets, LCC AS, or the LCC Products Business (in the case of LCC and
its Affiliates), in each case other than in the ordinary course of business or
pursuant to Applicable Law and after prior written notice to LCC (in the case of
Allen and its Affiliates) or Allen (in the case of LCC and its Affiliates).
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8.19 SOFTWARE LICENSE. From and after the Closing, Allen grants LCC and
its Affiliates a non-exclusive, worldwide and royalty free license to use all
software contained in the Retained LCC Products solely in conjunction with the
LCC Retained Products for the duration of the useful life of such LCC Retained
Products. Such license is solely for LCC's use of such software and is not a
license to distribute, copy, modify, or create derivative works therefrom. LCC
will not, without the prior written consent of Allen, do any of the following:
(i) alter, modify, translate, or adapt any such software or create any
definitive works based thereon; (ii) copy such software (except that LCC may
make one copy for archival purposes); (iii) assign, sublicense or otherwise
transfer such software in whole or in part; (iv) use such software except as
specifically contemplated in this Agreement; (v) decompile, reverse, assemble,
translate or otherwise reduce such software or any portion thereof to
human-perceivable form; (vi) combine or merge any portion of such software with
any other software; (vii) disclose such software to any third party; or (viii)
use any such software to upgrade any product not manufactured and/or sold by
Allen. Except to the extent of any license granted herein, the entire right,
title and interest in such software will remain with Allen.
8.20 WARRANTY CLAIMS.
(a) Allen shall honor warranty claims made with respect to products
sold or services performed on or prior to the Closing by the LCC Products
Business (the "LCC Products Warranty Claims") only in strict accordance with the
terms of such warranty, and shall notify LCC on a monthly basis of the costs
incurred in fulfilling valid LCC Products Warranty Claims. LCC shall have the
right to review and audit the books and records of Allen regarding Allen's
fulfillment of LCC Products Warranty Claims and the costs incurred in connection
therewith. If the costs incurred by Allen to fulfill LCC Products Warranty
Claims exceeds the reserve therefor set forth in the last LCC Products
Subsequent Monthly Financial Statement delivered to Allen prior to the Closing
Date (not to exceed the product of (i) the amount of the revenues of the LCC
Products Business for the one year period ending on the date of such LCC
Products Subsequent Monthly Financial Statement, multiplied by (ii) a fraction,
the numerator of which is equal to the reserve for such warranty obligations in
the LCC Products June 30 Balance Sheet, and the denominator of which is equal to
the revenues of the LCC Products Business for the one year period ending on June
30, 1998), Allen shall invoice LCC on a monthly basis for all such costs in
excess of such reserves, and LCC shall pay the amount of such costs to Allen
within ten (10) days after LCC's receipt of such invoice.
(b) LCC shall honor warranty claims made with respect to products
sold or services performed on or prior to the Closing by the Comsearch Business
(the "Comsearch Warranty Claims") only in strict accordance with the terms of
such warranty, and shall notify Allen on a monthly basis of the costs incurred
in fulfilling valid Comsearch Warranty Claims. Allen shall have the right to
review and audit the books and records of LCC regarding LCC's fulfillment of
Comsearch Warranty Claims and the costs incurred in connection therewith. If the
costs incurred by LCC to fulfill Comsearch Warranty Claims exceeds the reserve
therefor set forth in the last Comsearch Subsequent Monthly Financial Statement
delivered to LCC prior to
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the Closing Date (not to exceed the product of (i) the amount of the revenues of
the Comsearch Business for the one year period ending on the date of such
Comsearch Subsequent Monthly Financial Statement, multiplied by (ii) a fraction,
the numerator of which is equal to the reserve for such warranty obligations in
the Comsearch June 30 Balance Sheet, and the denominator of which is equal to
the revenues of the Comsearch Business for the one year period ending on June
30, 1998), LCC shall invoice Allen on a monthly basis for all such costs in
excess of such reserves, and Allen shall pay the amount of such costs to LCC
within ten (10) days after Allen's receipt of such invoice.
8.21 DESKCAT LICENSE AGREEMENT. At the Closing, Allen and LCC shall enter
into a License Agreement in the form attached hereto as Exhibit B (the "Deskcat
License Agreement").
8.22 LCC COMBINED CONTRACTS.
(a) As used in this Agreement, "LCC Combined Contracts" means (i) the
Software License and Service Agreement, dated as of July 1, 1995, by and between
Western Wireless Corporation and LCC, L.L.C. (the "Western Wireless Agreement")
and (ii) the Software License and Service Agreement, dated as of June 30, 1995,
by and between LCC, L.L.C. and Bell South China, Inc. (the "BSC Agreement").
(b) LCC shall use its reasonable efforts to obtain the consent of the
other party to the Western Wireless Agreement to (i) terminate the provisions of
Section 6.1 of such Agreement or (ii) assign to Allen the obligations under
Sections 6.1.1, 6.1.3, 6.1.4, 6.1.5, 7.1.3 and 8 of such Agreement, subject to
the limitations and requirements set forth in Sections 7.2, 7.3, 8.5, 9 and 10
thereof.
(c) LCC shall retain as a LCC Excluded Asset the BSC Agreement. In
the event Western Wireless Corporation does not consent to the assignment
described in Section 8.22(b), LCC shall purchase from Allen, and Allen shall
sell to LCC, all existing products of the LCC Products Business ordered under
the Western Wireless Agreement at a price equal to the purchase price therefor
under the Western Wireless Agreement and Allen shall perform the obligations of
LCC thereunder with respect to any products sold to Western Wireless Corporation
under the Western Wireless Agreement after the Closing, provided that Allen
shall have no obligations under Section 6.1.2 thereof.
8.23 CERTAIN MATTERS RELATED TO LCC AS.
(a) LCC shall pay all amounts due and payable to European Technology
Partner AS pursuant to Section 2.2(c) of that certain Asset Purchase Agreement,
dated as of December 30, 1996, between European Technology Partner AS and LCC
International AS (the "LCC AS Asset Purchase Agreement") when due, without
regard to any acceleration of such amounts as a result of the termination of any
employee of LCC AS or otherwise pursuant to the LCC AS Asset Purchase Agreement.
Subject to LCC's compliance with the foregoing, Allen
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agrees to take all necessary or desirable actions to assist LCC in terminating
and releasing the bank guarantee referred to in Section 2.2(d) of the LCC AS
Asset Purchase Agreement after January 5, 2000, at LCC's cost and expense.
(b) LCC will cause LCC AS to use its cash on hand and cash
equivalents on the Closing Date other than restricted cash (the "LCC AS Closing
Cash") to pay down the LCC AS Working Capital Facility at the Closing. To the
extent that the LCC AS Closing Cash is insufficient to pay down all amounts
outstanding under the LCC AS Working Capital Facility at the Closing, Allen
agrees to pay down at the Closing up to $2,000,000 of the amounts outstanding
under the LCC AS Working Capital Facility after application of the LCC AS
Closing Cash, and LCC shall pay down the remainder of the amounts outstanding
thereunder. To the extent that the LCC AS Closing Cash exceeds the amounts
outstanding under the LCC AS Working Capital Facility at the Closing, LCC AS
shall be permitted to transfer such cash to LCC on or prior to the Closing in an
amount equal to such excess. Subject to the foregoing, LCC agrees to terminate
the LCC AS Working Capital Facility, to cause the Lien on the shares of capital
stock and assets of LCC AS in favor of the lenders under the LCC AS Working
Capital Facility to be released, and to cause LCC AS and its assets to be
released from any obligation with respect to the Second Amended and Restated
Credit Agreement, dated December 15, 1997, among LCC, LCC AS, LCC Design
Services, LLC, LCC Development Company, LLC, Microcell Management, Inc., the
lenders signatory thereto and The Chase Manhattan Bank (the "LCC Credit
Agreement"), in each case effective on the Closing Date, pursuant to
documentation reasonably satisfactory in form and substance to Allen
(collectively, the "Chase Releases").
(c) On or prior to the Closing Date, LCC shall terminate its
intercompany revolving credit agreement with LCC AS (the "LCC AS Intercompany
Credit Agreement") and convert all amounts outstanding thereunder at the time of
such termination into share capital of LCC AS, pursuant to documentation
reasonably satisfactory to Allen (the "Capital Contribution Documents").
(d) LCC shall use its best efforts to cause LCC AS to terminate the
employment agreement, dated December 30, 1996, between LCC AS and Eirik Lund on
or prior to the Closing Date, with any cost to LCC AS in connection with such
termination to be borne by LCC. In the event of such termination, LCC shall
obtain from Mr. Lund (i) his agreement that such termination does not accelerate
any amount payable under the LCC AS Asset Purchase Agreement and (ii) his full
and unconditional release of LCC AS from any obligation other than the payment
of the deferred purchase price under the LCC AS Asset Purchase Agreement
(collectively, the "Lund Release"). The Lund Release shall be in form and
substance reasonably satisfactory to Allen. In the event LCC AS does not so
terminate Mr. Lund's employment, then LCC shall pay any accelerated payments
owed to Mr. Lund pursuant to the LCC AS Asset Purchase Agreement when due and
shall pay any severance costs and other costs incurred by LCC AS under Mr.
Lund's existing employment agreement or at law as a result of any termination of
his employment within 150 days after the Closing Date.
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(e) Allen hereby grants, and shall cause LCC AS to grant, to LCC the
right, subject to and in accordance with all the terms, covenants and conditions
of the real property lease agreement, dated July 10, 1997, between TH Elendon AS
and LCC AS with respect to the facility located in Skarer, Norway (the "LCC AS
Facility"), to occupy and use, rent-free, the space, telephones, facsimile
machines and computers at the LCC AS Facility currently occupied or used by the
employees of LCC AS set forth in Schedule 8.7(m) for their intended and usual
purpose. Such right shall commence on the Closing Date and shall terminate on
the earlier of (A) December 31, 1999 and (B) the date 30 days after delivery of
a termination notice from LCC to Allen. LCC shall reimburse Allen for
out-of-pocket costs and expenses incurred by Allen for other services provided
in connection with such right, including long distance telephone charges,
facsimile charges, copying charges and similar costs. Such reimbursements shall
be made by LCC monthly in arrears within ten (10) days after receipt of an
invoice therefor from Allen. Upon termination of such right pursuant to this
Section 8.23(e), LCC shall deliver the space in the LCC AS Facility used by it
in "broom clean" condition and otherwise in the same condition as at the
Closing, except for normal wear and tear.
8.24 TELESPECTRO LEASE GUARANTEE AGREEMENTS. LCC shall use its best
efforts to cause Allen to be released from its obligations under the Telespectro
Lease Guarantee Agreements on or prior to the Closing, and to that effect, LCC
shall agree to enter into comparable guarantee agreements with the other parties
to the Telespectro Lease Guarantee Agreements, and to post a comparable bond in
connection therewith, as of the Closing.
8.25 RESTON FACILITY LEASE. (a) LCC hereby grants to Allen the right (the
"Reston Facility Right"), subject to and in accordance with all the terms,
covenants and conditions of the Reston Lease, to occupy and use the third floor
space at the Reston Facility for their intended and usual purpose in connection
with the operation of the LCC Products Business at a rent equal to the rental
rate in effect from time to time under the Reston Lease as in effect on the date
hereof and subject to the other benefits and burdens imposed upon the "Tenant"
under the Reston Lease as in effect on the date hereof. The Reston Facility
Right shall commence on the date LCC vacates the third floor of the Reston
Facility and shall terminate upon expiration of the Reston Lease (without giving
effect to an earlier termination thereof by LCC), provided, however, in the
event that the Reston Lease is terminated as a result of LCC's election not to
exercise a renewal or similar option, upon request of Allen, LCC will use
commercially reasonable efforts to assist Allen in obtaining a continuing lease
for the space in the Reston Facility then occupied by Allen. The parties shall
negotiate in good faith and enter into a sublease agreement on the Closing Date,
which agreement shall include the foregoing terms and such other terms that are
mutually agreeable to them.
(b) Allen hereby agrees that it shall remain liable under the Reston
Lease following the Closing Date in accordance with the applicable provisions of
Section 6.4 thereof, subject to Section 14.2(h) hereof..
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ARTICLE 9
MUTUAL CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE
Unless waived by both Allen and LCC, the obligations of the parties
hereto to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions:
9.1 HSR ACT. All filings required under the HSR Act, if any, shall have
been made, and all waiting periods, including any extensions thereof, applicable
to the transactions contemplated by this Agreement under the HSR Act shall have
expired or been waived or otherwise terminated.
9.2 ABSENCE OF LITIGATION. No order, injunction, judgment or decree by
any Governmental Authority shall be in effect which enjoins, restrains or
prohibits the consummation of the transactions contemplated by this Agreement.
ARTICLE 10
CONDITIONS TO LCC'S OBLIGATION TO CLOSE
The obligations of LCC and LCC GmbH to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, on or before the
Closing Date, of each of the following conditions, unless otherwise waived by
LCC:
10.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Allen contained herein or in any document delivered pursuant hereto shall be
true and correct in all material respects (in the case of any representations
and warranties not containing any materiality qualifications) or in all respects
(in the case of any representations or warranties containing any materiality
qualification) as of the date made and on and as of the Closing Date.
10.2 PERFORMANCE. Allen and ATII shall have duly performed or complied
with all of the covenants, acts and obligations to be performed or complied with
by them hereunder at or prior to the Closing.
10.3 ALLEN'S CLOSING DOCUMENTS. Each of Allen and ATII shall have
delivered all Contracts and other documents required to be delivered by it at
the Closing, including, without limitation, those described in Section 12.1.
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10.4 APPROVAL OF LENDER. LCC shall have obtained
the consent of The Chase Manhattan Bank, as Administrative Agent, to the
transactions contemplated hereby.
10.5 DUE DILIGENCE. LCC shall not have given notice to Allen on or prior
to October 9, 1998 of its desire to terminate this Agreement pursuant to Section
15.1(b).
10.6 CONSENTS. Allen shall have obtained, and shall have delivered
evidence thereof to LCC, such consents, waivers and other approvals set forth on
revised Schedule 10.6, to be agreed between the Principal Parties pursuant to
Section 8.17(d), the absence of which would have, or be reasonably likely to
have, a material adverse effect on the results of operations, financial
condition or prospects of the Comsearch Business involving, individually or in
the aggregate, $500,000, each of which shall be in form and substance reasonably
satisfactory to LCC.
10.7 COMSEARCH TRANSFERRED EMPLOYEES. LCC shall not have given notice to
Allen on or prior to October 9, 1998 of its desire to terminate this Agreement
pursuant to Section 15.1(f)
ARTICLE 11
CONDITIONS TO ALLEN'S OBLIGATIONS TO CLOSE
The obligations of Allen and ATII to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, on or before the
Closing Date, of each of the following conditions, unless otherwise waived by
Allen:
11.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of LCC contained herein or in any document delivered pursuant hereto shall be
true and correct in all material respects (in the case of any representations
and warranties not containing any materiality qualifications) or in all respects
(in the case of representations and warranties containing any materiality
qualification) as of the date made and on and as of the Closing Date.
11.2 PERFORMANCE. LCC and LCC GmbH shall have performed or complied with
all covenants, acts and obligations to be performed or complied with by them
hereunder at or prior to the Closing.
11.3 LCC'S CLOSING DOCUMENTS. Each of LCC and LCC GmbH shall have
delivered all Contracts and other documents required to be delivered by it at
the Closing, including, without limitation, those described in Section 12.2.
11.4 DUE DILIGENCE. Allen shall not have given notice to LCC on or prior
to October 9, 1998 of its desire to terminate this Agreement pursuant to Section
15.1(b).
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11.5 CONSENTS. LCC shall have obtained, and shall have delivered evidence
thereof to Allen, all consents, waivers and other approvals set forth on revised
Schedule 11.5, to be agreed between the Principal Parties pursuant to Section
8.17(d), the absence of which would have, or be reasonably likely to have, a
material adverse effect on the results of operations, financial condition or
prospects of the Comsearch Business involving, individually or in the aggregate,
$500,000, each of which shall be in form and substance reasonably satisfactory
to Allen.
11.6 LCC TRANSFERRED EMPLOYEES. Allen shall not have given notice to LCC
on or prior to October 9, 1998 of its desire to terminate this Agreement
pursuant to Section 15.1(f).
ARTICLE 12
ACTION TO BE TAKEN AT CLOSING
12.1 ACTION TO BE TAKEN BY ALLEN. At the Closing, Allen shall deliver to
LCC the following:
(a) executed assignments, dated the Closing Date, in appropriate
form for filing with applicable Governmental Authorities, of the
Comsearch Patents and Trademarks;
(b) an executed document of assignment, dated the Closing Date,
transferring all Contracts constituting Comsearch Purchased Assets to LCC
and assigning to LCC all right, title and interest of Allen therein and
thereto;
(c) an executed Bill of Sale, dated the Closing Date, conveying
all Comsearch Purchased Assets not otherwise transferred or conveyed by
the documents delivered pursuant to clauses (a) and (b) hereof;
(d) the certificates evidencing all of the outstanding shares of
capital stock of (i) Comsearch Holdings, accompanied by a stock power
executed by Allen assigning such shares to LCC, (ii) Comsearch UK, and
(iii) Telespectro, accompanied by a stock power executed by ATII
assigning the share of capital stock of Telespectro owned by ATII to LCC;
(e) an executed document of assumption, assuming the LCC Assumed
Liabilities;
(f) all such other general instruments of transfer, assignment and
conveyance, assignments, evidences of consent, waiver or other approval,
and other instruments or documents in form and substance satisfactory to
LCC, as shall be necessary to evidence
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or perfect the sale, assignment, transfer and conveyance of the
Comsearch Purchased Assets to LCC and effectively vest in LCC all right,
title and interest in the Comsearch urchased Assets free and clear of
any and all Liens, together with possession (or constructive possession,
in the case of intangibles) thereof, all in accordance with the terms
and conditions of this Agreement;
(g) certificates of title to all motor vehicles included in the
Comsearch Purchased Assets to be transferred to LCC hereunder, duly
endorsed for transfer to LCC as of the Closing Date;
(h) the Supply Agreement, executed by Allen;
(i) the Deskcat License Agreement, executed by Allen;
(j) the Chase Releases;
(k) the Lund Release;
(l) the Capital Contribution Documents;
(m) the minute book and stock ledger book of each Comsearch
Subsidiary;
(n) the resignations of the directors and officers of each
Comsearch Subsidiary;
(o) a certificate executed by an authorized executive officer of
Allen, dated the Closing Date, certifying that (i) the representations
and warranties of Allen contained herein or in any certificate or other
writing delivered pursuant hereto or in connection herewith are true and
correct on and as of the Closing Date as if made again on and as of such
date and (ii) all covenants, acts and obligations to be performed or
complied with by Allen hereunder at or prior to the Closing have been
duly performed and complied with by Allen;
(p) a certificate executed by an authorized executive officer of
ATII, dated the Closing Date, certifying that all covenants, acts and
obligations to be performed or complied with by ATII hereunder at or
prior to the Closing have been duly performed and complied with by ATII;
(q) certified copies of the resolutions adopted by the Boards of
Directors of Allen and ATII authorizing or ratifying this Agreement and
authorizing the consummation by Allen and ATII of the transactions
contemplated hereby;
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(r) the opinion of Rudnick & Wolfe, counsel to Allen and ATII,
dated the Closing Date and addressed to LCC, in the form attached hereto
as Exhibit C; and
(s) such other certificates, instruments, opinions or documents as
LCC may reasonably request in order to effect and document the
transactions contemplated hereby.
12.2 ACTION TO BE TAKEN BY LCC. At the Closing, LCC shall deliver to
Allen the following:
(a) executed assignments, dated the Closing Date, in appropriate
form for filing with applicable Governmental Authorities, of the LCC
Patents and Trademarks;
(b) an executed document of assignment, dated the Closing Date,
transferring all Contracts constituting LCC Purchased Assets to Allen and
assigning to Allen all right, title and interest of LCC or LCC GmbH, as
the case may be, therein and thereto;
(c) an executed Bill of Sale, dated the Closing Date, conveying
all LCC Purchased Assets not otherwise transferred or conveyed by the
documents delivered pursuant to clauses (a) and (b) hereof;
(d) the certificate evidencing all of the outstanding shares of
capital stock of LCC AS, accompanied by a stock power executed by LCC
assigning such shares to Allen;
(e) an executed document of assumption, assuming the Comsearch
Assumed Liabilities;
(f) all such other general instruments of transfer, assignment and
conveyance, assignments, evidences of consent, waiver or other approval,
and other instruments or documents in form and substance satisfactory to
Allen, as shall be necessary to evidence or perfect the sale, assignment,
transfer and conveyance of the LCC Purchased Assets to Allen and
effectively vest in Allen all right, title and interest in the LCC
Purchased Assets free and clear of any and all Liens, together with
possession (or constructive possession, in the case of intangibles)
thereof, all in accordance with the terms and conditions of this
Agreement;
(g) certificates of title to all motor vehicles included in the
LCC Purchased Assets to be transferred to Allen hereunder, duly endorsed
for transfer to Allen as of the Closing Date;
(h) the Supply Agreement, executed by LCC;
(i) the Deskcat License Agreement, executed by LCC;
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(j) the minute book or other equivalent information of LCC AS;
(k) the resignations of the directors of LCC AS;
(l) certified copies of the resolutions adopted by the Board of
Directors of LCC and the shareholders of LCC GmbH authorizing the
consummation by LCC and LCC GmbH of the transactions contemplated hereby;
(m) a certificate executed by an authorized executive officer of
LCC, dated the Closing Date, certifying that (i) the representations and
warranties of LCC contained herein or in any certificate or other writing
delivered pursuant hereto or in connection herewith are true and correct
on and as of the Closing Date as if made again on and as of such date and
(ii) all covenants, acts and obligations to be performed or complied with
by LCC hereunder at or prior to the Closing have been duly performed and
complied with by LCC;
(n) a certificate executed by an authorized executive officer of
LCC GmbH, dated the Closing Date, certifying that all covenants, acts and
obligations to be performed or complied with by LCC GmbH hereunder at or
prior to the Closing have been duly performed and complied with by LCC
GmbH;
(o) the opinion of Hogan & Hartson L.L.P., counsel to LCC, dated
the Closing Date and addressed to Allen, in the form attached hereto as
Exhibit D;
(p) the opinion of Wikborg, Rein & Co., counsel to LCC AS, dated
the Closing Date and addressed to Allen, substantially to the effect
that:
(i) LCC AS was incorporated and is validly existing
under the laws of Norway;
(ii) LCC AS has the corporate power and corporate
authority under its organizational documents to own,
lease and operate its current properties and to
transact the business in which it is currently
engaged; and
(iii) the authorized, issued and outstanding shares of
capital stock of LCC AS are as specified in such
opinion, all of the issued and outstanding shares of
capital stock of LCC AS are owned of record by LCC
and, assuming the receipt of consideration as
provided in resolutions of the Board of Directors of
LCC AS authorizing the issuance thereof, all of such
issued and outstanding shares of
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capital stock of LCC AS are validly issued, fully
paid and nonassessable under the Norwegian
corporation law.
In rendering the foregoing opinion, it is understood that such
counsel may rely, to the extent such counsel believes to be
appropriate, as to matters of fact, upon certificates of officers of
LCC AS and of public officials; and
(q) such other certificates, instruments, opinions or documents as
Allen may reasonably request in order to effect and document the
transactions contemplated hereby.
12.3 FURTHER ASSURANCES. At any time on or after the Closing, the parties
hereto shall each perform such acts, execute and deliver such instruments,
assignments, endorsements and other documents and do all such other things
consistent with the terms of this Agreement as may be reasonably necessary to
accomplish the transactions contemplated in this Agreement or otherwise to carry
out the purpose of this Agreement.
12.4 EFFECTIVE TIME. The effective time of the Closing shall be the close
of business on the Closing Date.
ARTICLE 13
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Agreement and in any
other document delivered pursuant hereto shall survive for a period of thirty
(30) months after the Closing Date and shall not survive thereafter; provided,
however, that the representations and warranties contained in the first sentence
of each of Section 5.14 and 6.14 shall survive without limitation and the
representations and warranties set forth in Sections 5.9, 5.22, 5.23, 6.9, 6.22
and 6.23 shall survive until the date ninety (90) days immediately following the
expiration of the statute of limitations applicable to any indemnified liability
with respect thereto and any extensions or waivers thereof. The applicable
period of survival of each representation and warranty contained in this
Agreement is referred to herein as the "Survival Period". Any claim or cause of
action based upon or arising out of a breach of a representation or warranty
made hereunder or in any other document delivered pursuant hereto must be made
within the Survival Period applicable thereto or the party against which such
claim is made shall have no liability with respect thereto.
Nothing contained in this Article, however, shall affect the obligations
of any party to perform the agreements and covenants to be performed on its part
hereunder or in connection herewith either before or after the Closing Date.
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ARTICLE 14
INDEMNIFICATION AND SURVIVAL
14.1 INDEMNIFICATION OF LCC. From and after the Closing, Allen shall
indemnify, defend and hold LCC and its Affiliates and their respective
officers, directors, employees, agents, advisors and representatives
(collectively, the "LCC Indemnitees") harmless from and against any and all
costs, expenses, losses, damages, fines or liabilities (including reasonable
attorneys' fees) ("LCC Damages") incurred by any LCC Indemnitee with respect to
or in connection with:
(a) the existence of any fact, circumstance, situation or
condition constituting a breach or violation of any of the
representations or warranties of Allen contained in this Agreement or in
any document delivered pursuant hereto;
(b) the existence of any fact, circumstance, situation or
condition constituting a breach or violation of any of the covenants or
agreements of Allen of ATII contained in this Agreement or in any
document delivered pursuant hereto;
(c) any Comsearch Excluded Liabilities or Comsearch Excluded
Assets, and any liability, obligation or commitment of any Comsearch
Subsidiary that would have been a Comsearch Excluded Liability or a
Comsearch Excluded Asset if it had been a liability, obligation or
commitment of Allen at the Closing;
(d) the LCC Assumed Liabilities which, for purposes hereof, shall
include all liabilities arising after the Closing Date with respect to
Contracts to which the benefits described in Section 8.3 apply to Allen;
(e) any and all Taxes of Allen or any Comsearch Subsidiary not
relating to or arising out of the Comsearch Business;
(f) any liabilities relating to any employees of Allen or any
Comsearch Subsidiary other than those expressly assumed by LCC herein;
and
(g) all Environmental Liabilities and Costs arising out of the
Comsearch Business on or prior to the Closing Date or relating to the
Comsearch Excluded Assets or arising from a Release which occurred on or
prior to the Closing Date on any real property used on or prior to the
Closing Date by the Comsearch Business.
14.2 INDEMNIFICATION OF ALLEN. From and after the Closing, LCC shall
indemnify, defend and hold Allen and its Affiliates and their respective
officers, directors, employees, agents, advisors and representatives
(collectively the "Allen Indemnitees") harmless from and against any and all
costs, expenses, losses, damages or liabilities (including reasonable attorneys'
fees) ("Allen Damages") incurred by any Allen Indemnitee with respect to or in
connection with:
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(a) the existence of any fact, circumstance, situation or
condition constituting a material breach or violation of any of the
representations or warranties of LCC contained in this Agreement or in
any document delivered pursuant hereto;
(b) the existence of any fact, circumstance, situation or
condition constituting a breach or violation of any of the covenants or
agreements of LCC or LCC GmbH contained in this Agreement or in any
document delivered pursuant hereto;
(c) any LCC Products Excluded Liabilities or LCC Excluded Assets,
and any liability, obligation or commitment of any LCC Subsidiary that
would have been a LCC Products Excluded Liability or a LCC Excluded Asset
if it had been a liability, obligation or commitment of LCC at the
Closing;
(d) the Comsearch Assumed Liabilities which, for purposes hereof,
shall include all liabilities arising after the Closing Date with respect
to Contracts to which the benefits described in Section 8.3 apply to LCC;
(e) any and all Taxes of LCC or any LCC Subsidiary not relating to
or arising out of the LCC Products Business;
(f) any liabilities relating to any employees of LCC or any LCC
Subsidiary other than those expressly assumed by Allen herein;
(g) all Environmental Liabilities and Costs arising out of the LCC
Products Business on or prior to the Closing Date or relating to the LCC
Excluded Assets or arising from a Release which occurred on or prior to
the Closing Date on any real property used on or prior to the Closing
Date by the LCC Products Business; and
(h) any obligations incurred by Allen after the Closing Date as a
result of its status as original lessee or as guarantor of the Reston
Lease.
14.3 JOINT COOPERATION. Upon obtaining knowledge of the institution of
any action, proceeding, or other event which could give rise to a claim of
indemnity hereunder, the party seeking indemnification shall promptly notify the
indemnifying party thereof. If such claim or demand relates to a claim or demand
asserted by a third party, the indemnifying party shall have the right, at its
expense, to employ counsel of its choice to defend such claim or demand. Failure
by the indemnifying party to notify the indemnified party of its election to
defend any such claim or demand of a third party within ten (10) days after
notice thereof shall have been given to the indemnifying party shall be deemed a
waiver by the indemnifying party of its right to defend such claim or demand. If
the indemnifying party fails to assume the defense of such claim, the
indemnified party against which claim has been asserted will have the right to
undertake, at the indemnifying party's cost and expense, the defense, compromise
or settlement of such claim,
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provided that the indemnified party shall not enter into any such compromise or
settlement without the consent of the indemnifying party, which consent shall
not be unreasonably withheld. If the indemnifying party elects to defend such
claim or demand, it shall not be responsible for any attorneys' fees incurred by
the indemnified party; provided that the indemnified party may participate in
such defense at its own cost and expense. So long as the indemnifying party is
defending such claim or demand in good faith, the indemnified party will not
settle or compromise such claim or demand without the indemnifying party's
consent, which consent shall not be unreasonably withheld. The indemnified party
shall make available to the indemnifying party all records and other materials
and employees reasonably required by it in contesting a claim or demand asserted
by a third party against the indemnified party and shall cooperate in the
defense thereof.
14.4 LIMITATION OF LIABILITY.
(a) No liability for indemnification shall arise on the part of LCC under
this Article 14 with respect to any claim for indemnification based upon clause
(a) of Section 14.2 until the aggregate amount of Allen Damages exceeds
$250,000, whereupon the Allen Indemnitees shall be entitled to seek
indemnification for the total amount of such Allen Damages; provided, however,
that such limitation shall not apply to any liability for indemnification with
respect to any claim for indemnification based upon (i) fraud or (ii) any
misrepresentation or breach of a warranty which was actually known to be untrue
by LCC when made. The aggregate indemnification payable by LCC under this
Article 14 shall be limited to $20,000,000; provided, however, that such
limitation on the maximum indemnification payable by LCC under this Article 14
shall not apply to any claim for indemnification based upon (i) fraud, (ii) any
misrepresentation or breach of a warranty which was actually known to be untrue
by LCC when made, or (iii) clauses (b), (c), (d), (e), (f) or (g) of Section
14.2, and any indemnification paid hereunder based upon any of the foregoing
shall not be counted towards such maximum indemnification amount.
(b) No liability for indemnification shall arise on the part of Allen
under this Article 14 with respect to any claim for indemnification based upon
clause (a) of Section 14.1 until the aggregate amount of LCC Damages exceeds
$250,000, whereupon the LCC Indemnitees shall be entitled to seek
indemnification for the total amount of such LCC Damages; provided, however,
that such limitation shall not apply to any liability for indemnification with
respect to any claim for indemnification based upon (i) fraud or (ii) any
misrepresentation or breach of a warranty which was actually known to be untrue
by Allen when made. The aggregate indemnification payable by Allen under this
Article 14 shall be limited to $20,000,000; provided, however, that such
limitation on the maximum indemnification payable by Allen under this Article 14
shall not apply to any claim for indemnification based upon (i) fraud, (ii) any
misrepresentation or breach of a warranty which was actually known to be untrue
by Allen when made, or (iii) clauses (b), (c), (d), (e), (f) or (g) of Section
14.1, and any indemnification paid hereunder based upon any of the foregoing
shall not be counted towards such maximum indemnification amount.
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14.5 DETERMINATION OF LOSS. The parties shall make appropriate
adjustments for income tax benefits (net of any associated income tax costs)
and insurance proceeds which are reasonably certain of receipt in determining
the amount of LCC Damages and Allen Damages for purposes of this Article 14. If
any Allen Indemnitee shall be entitled to indemnification pursuant to Section
14.2 for any Taxes of LCC AS arising out of the transactions contemplated by
Section 8.23(c), the amount of Allen Damages with respect to such Taxes shall
be computed after allowing the full amount of the net operating losses of LCC
AS existing on the Closing Date to reduce any income or adjustment which may
arise as a result of such transactions.
14.6 EXCLUSIVE REMEDY. The parties acknowledge that, except in the case
of fraud, their sole remedy after the Closing for any breach of any
representation or warranty contained in this Agreement shall be the
indemnification provisions set forth in this Article 14. Notwithstanding the
foregoing, (a) nothing herein shall be construed or interpreted as limiting or
impairing the rights or remedies that any party hereto may have at equity,
including, but not limited to, specific performance and injunctive relief,
where available, and (b) to the extent any Allen Damages may be indemnified, or
Allen may otherwise be entitled to recover such Allen Damages, pursuant to the
terms of the escrow agreement, dated December 30, 1996, between European
Technology Partner AS, LCC International AS, Haavind & Haga, Wikborg, Rein &
Co. and Industriinvestor AS (the "LCC AS Escrow Agreement"), Allen shall not
make a claim for indemnification under this Article 14 until it has first used
its best efforts to recover such Allen Damages pursuant to the LCC AS Escrow
Agreement.
14.7 TREATMENT OF INDEMNIFICATION PAYMENTS. All indemnification payments
made pursuant to this Article 14 shall be treated as an adjustment to the
purchase price paid.
ARTICLE 15
TERMINATION
15.1 TERMINATION. This Agreement may be terminated:
(a) by mutual consent of Allen and LCC at any time prior to the
Closing Date;
(b) (i) by LCC, upon written notice to Allen at any time on or
prior to October 9, 1998, upon LCC's determination, based on its due
diligence investigation of the Comsearch Business and the Comsearch
Purchased Assets, that any event, occurrence, fact, condition or effect
has occurred or been discovered that has, or is reasonably likely to
have, or that indicates, a material adverse effect on the results of
operations, financial condition or prospects of the Comsearch Business
involving, individually or in the aggregate, more than $1,000,000;
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(ii) by Allen, upon written notice to LCC at any time on or
prior to October 9, 1998, upon Allen's determination, based on its due
diligence investigation of the LCC Products Business and the LCC
Purchased Assets, that any event, occurrence, fact, condition or effect
has occurred or been discovered that has, or is reasonably likely to
have, or that indicates, a material adverse effect on the results of
operations, financial condition or prospects of the LCC Products Business
involving, individually or in the aggregate, more than $1,000,000;
(c) by LCC, upon written notice to Allen if there has been a
breach by Allen or ATII of any of their respective representations,
warranties, covenants or agreements contained herein, or any such
representation or warranty shall have become untrue, in any such case
such that any of the conditions set forth in Article 10 will not be
satisfied and such breach or condition has not been cured within ten days
following receipt by Allen of written notice of such breach;
(d) by Allen, upon written notice to LCC if there has been a
breach by LCC or LCC GmbH of any of their respective representations,
warranties, covenants or agreements contained herein, or any such
representation or warranty shall have become untrue, in any such case
such that any of the conditions set forth in Article 11 will not be
satisfied and such breach or condition has not been cured within ten days
following receipt by LCC of written notice of such breach;
(e) by either Allen or LCC, at any time after November 30, 1998 if
the Closing has not occurred on or before November 30, 1998 through no
fault of the terminating party or any of the terminating party's
Affiliates;
(f) (i) by LCC, upon written notice to Allen at any time on or
prior to October 9, 1998, upon LCC's determination, in its sole
discretion, that the Comsearch Transferred Employees engaged in the
microwave and satellite communications business unit of the Comsearch
Business or who currently exercise executive management responsibility in
the Comsearch Business and who have indicated in a manner acceptable to
LCC that they will accept employment with LCC on terms and conditions
acceptable to LCC are not sufficient to enable LCC to operate
successfully the microwave and satellite communication business unit of
the Comsearch Business; or
(ii) by Allen, upon written notice to LCC at any time on or
prior to October 9, 1998, upon Allen's determination, in its sole
discretion, that the LCC Transferred Employees do not include adequate
senior management employees of LCC AS or European sales managers to
enable Allen to operate the LCC Products Business substantially in the
manner currently conducted, without regard to the LCC Excluded Assets.
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15.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement, as provided above, this Agreement shall forthwith become void and
there shall be no liability hereunder on the part of any party, except for any
party's liability resulting from such party's breach of any representation,
warranty, covenant or agreement in this Agreement and except that the
agreements with respect to confidentiality contained in Section 8.2 and the
agreements respecting expenses contained in Sections 8.1 and 16.12 shall
survive the termination hereof.
ARTICLE 16
MISCELLANEOUS
16.1 WRITTEN AGREEMENT TO GOVERN. This Agreement (together with the
Schedules and Exhibits hereto and the other Contracts and documents delivered
pursuant hereto) sets forth the entire understanding and supersedes all prior
oral and written agreements among the parties relating to the subject matter
contained herein, and merges all prior discussions among them other than the
Confidentiality Agreement dated March 2, 1998, as amended by letter dated May
26, 1998 previously executed by the parties (the "Confidentiality Agreement"),
which shall remain in full force and effect.
16.2 SEVERABILITY. The parties expressly agree that it is not the
intention of any party to violate any public policy, statutory or common laws,
rules, regulations, treaties or decisions of any Governmental Authority. If any
provision of this Agreement is judicially or administratively interpreted or
construed as being so in violation, such provision shall be inoperative and the
remainder of this Agreement shall remain binding upon the parties hereto.
16.3 NOTICES AND OTHER COMMUNICATIONS. Any notice or other communication
required, contemplated or permitted by this Agreement by any party, shall be in
writing and shall be deemed served (a) when personally delivered, (b) when
transmitted via facsimile machine to the party for whom it is intended at the
number shown below, (c) on the next Business Day after delivery to a reputable
overnight courier for next business day delivery, or (d) five Business Days
after deposit in the United States mail, registered or certified mail, return
receipt requested, postage prepaid, addressed, in the case of deliveries made
pursuant to clause (c) or (d), as follows:
<TABLE>
<S> <C>
If to LCC or LCC GmbH: LCC International, Inc.
7925 Jones Branch Drive
McLean, Virginia 22102
Attn: Peter A. Deliso, Vice President,
General Counsel and Secretary
Fax No.: (703) 873-2900
With a copy to: Hogan & Hartson L.L.P.
</TABLE>
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<TABLE>
<S> <C>
555 Thirteenth Street N.W.
Washington, D.C. 20004
Attn: Lorraine Sostowski, Esq.
Fax No.: (202) 637-5910
If to Allen or ATII: Allen Telecom Inc.
25101 Chagrin Boulevard
Beachwood, Ohio 44122-5619
Attn: McDara P. Folan III, Esq.,
Vice President, General Counsel and
Secretary
Fax No.: (216) 765-0410
With a copy to: Rudnick & Wolfe
Suite 1800
203 North LaSalle Street
Chicago, Illinois 60601
Attn: Mary K. Krigbaum, Esq.
Fax No.: (312) 236-7516
</TABLE>
or to such other address or addresses as any addressee may designate for itself
by written notice served in accordance herewith.
16.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each counterpart shall constitute an original instrument, but
all such separate counterparts shall constitute one and the same agreement.
16.5 LAW TO GOVERN. The validity, construction and enforceability of this
Agreement shall be governed in all respects by the laws of the Commonwealth of
Virginia, without regard to its conflict of laws rules.
16.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that no party may assign its rights and
obligations hereunder without the prior written consent of the Principal
Parties, which consent may unreasonably be withheld.
16.7 INTERPRETATION. The masculine, feminine or neuter pronouns used
herein shall be interpreted without regard to gender, and the use of the
singular or plural shall be deemed to include the other whenever the context so
requires. The headings in this Agreement are inserted for convenience of
reference only and shall not be a part of or control or affect the meaning of
this Agreement. Unless otherwise expressly stated herein, all references herein
to Articles, Sections and paragraphs are to Articles, Sections and paragraphs in
this Agreement and all references herein to Schedules and Exhibits are to
Schedules and Exhibits to this Agreement.
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The phrase "including" shall mean "including, without limiting the generality of
the foregoing". The parties have all been represented by counsel in connection
with the negotiation of this Agreement. The fact that any provision hereof may
have been drafted by counsel for a given party shall not be taken into
consideration in interpreting such provision. "Business Day" means any day other
than a Saturday or Sunday or other day on which national banks in Cleveland,
Ohio or Washington, D.C. are required or permitted to be closed.
16.8 SCHEDULES AND EXHIBITS. The Schedules and Exhibits referred to
herein and attached or to be attached to this Agreement are incorporated herein
by such reference as if fully set forth in the text hereof.
16.9 PUBLICITY. No party shall announce or disclose publicly the terms or
provisions hereof or the transactions contemplated hereby without the prior
written approval of the Principal Parties, except as such disclosure may be
required by Applicable Law (subject to giving the Principal Parties notice as
promptly as possible of the intention to make such disclosure and providing the
Principal Parties an opportunity to review the wording of such disclosure) and
except that this provision shall not prohibit any party from disclosing such
terms or provisions to its attorneys, accountants, lenders, bankers, financial
advisors or any other advisor or consultant provided any such person to whom
such terms or provisions are disclosed agrees to be bound by the terms and
conditions of the Confidentiality Agreement.
16.10 MODIFICATION. The parties to this Agreement may, by mutual written
consent, executed by the authorized officers of each party, modify or supplement
this Agreement in such manner as may be mutually agreed upon by them in writing.
16.11 WAIVER OF PROVISIONS. The terms, covenants, representations,
warranties and conditions of this Agreement may be waived only by a written
instrument executed by the party waiving compliance. The failure of any party at
any time to require performance of any provisions hereof shall, in no manner,
affect the right at a later date to enforce the same. No waiver by any party of
any condition, or breach of any provision, term, covenant, representation or
warranty contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or of the breach of any other provision,
term, covenant, representation or warranty of this Agreement.
16.12 EXPENSES. Except as otherwise provided in this Agreement, each
party shall bear its own expenses incident to this Agreement and the
transactions contemplated hereby, including without limitation, all fees of
counsel, accountants and consultants.
16.13 RESTRICTIVE TRADE PRACTICES. Notwithstanding any other provision of
this Agreement, if by virtue of any restriction contained in this Agreement or
any other Contract delivered pursuant hereto, this Agreement is subject to
registration under the UK Restrictive Practices Act, no such restriction shall
take effect until the day after the particulars of this
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Agreement have been furnished to the United Kingdom Office of Fair Trading
pursuant to the UK Restrictive Practices Act.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf by its officer thereunto duly authorized, all on or
as of the day and year first above written.
ALLEN TELECOM INC.
By: /s/ McDara P. Folan III
-----------------------------------
Its: Vice President
------------------------------
ALLEN TELECOM INVESTMENTS, INC.
By: /s/ McDara P. Folan III
-----------------------------------
Its: Vice President
------------------------------
LCC INTERNATIONAL, INC.
By: /s/ Geoffrey S. Carroll
-----------------------------------
Its:
------------------------------
LCC EUROPE GMBH
By: /s/ Peter A. Deliso
-----------------------------------
Its:
------------------------------
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<PAGE> 1
EXHIBIT 99
FOR IMMEDIATE RELEASE
LCC Contact: Tricia Drennan Allen Telecom Contact:
Director of Corporate Communications & Dianne McCormick
Investor Relations Director of Investor Relations
(703) 873-2390 (phone) (216) 765-5855 (phone)
(703) 873-2300 (fax) (216) 765-0375 (fax)
[email protected] [email protected]
LCC INTERNATIONAL, INC. AND ALLEN TELECOM INC.
ANNOUNCE BUSINESS EXCHANGE
Transaction adds Microwave and Satellite expertise to LCC's market leading RF
engineering business and positions Allen Telecom as a leading provider of test
and measurement equipment
McLEAN, VA and BEACHWOOD, OH, September 21, 1998 -- LCC International, Inc.
(NASDAQ: LCCI), and Allen Telecom Inc. (NYSE: ALN), today reported that they
have reached an agreement in which LCC will exchange its test and measurement
equipment and related software analysis tools business for the engineering,
software and consulting business of Allen Telecom's Comsearch division.
The transaction will enhance LCC's position as a global leader in the RF
engineering services and related software businesses as Comsearch possesses a
large number of industry critical RF engineering talent. Furthermore, Comsearch
has leading positions in the microwave and mobile satellite engineering services
businesses in which LCC has had very little historical exposure. Likewise, Allen
Telecom enhances its position as a global provider of test and measurement
equipment and complements its wide range of wireless equipment products.
(more)
<PAGE> 2
LCC and Allen Telecom Announce Business Exchange -- 2/2/2
The transaction will significantly reinforce both companies' strategic
objectives and core businesses. LCC will have an enhanced core business which
will provide a unique and complete spectrum of value added services including RF
engineering, microwave engineering, program management, tower ownership and
management and network maintenance and operations activities geared toward the
global wireless industry. Allen Telecom will be focused on supplying a
comprehensive base of product design, development and manufacturing equipment to
the wireless infrastructure market.
The transaction is subject to FTC review under the Hart-Scott-Rodino Act,
completion of due diligence by both companies and other closing conditions. Both
companies expect the transaction to be accretive to earnings in 1999, and both
expect the combination to result in operating margin improvement based on the
synergies with existing operations.
Dr. Geoffrey S. Carroll, president and chief executive officer of LCC indicated,
"For many months we have been working to transition LCC to a primarily services
and software based company. This transaction strongly supports this goal as well
as enables us to enter the microwave and satellite service businesses in a
leading position. We are enthusiastic about the opportunity of adding
Comsearch's primarily domestic business into our global installed base. In
addition, we have repositioned the hardware business in such a way that we will
have access to an improved tool set which is necessary to perform our
engineering services. We are very pleased with the outcome and associated
partnership going forward with Allen Telecom."
Robert G. Paul, president and chief executive officer of Allen Telecom, Inc.
said, "This transaction supports our strategic objectives and allows us to focus
our efforts on the company's core competencies in the manufacture of
sophisticated telecommunications infrastructure equipment. Combining these
operations positions Allen Telecom as one of the leading worldwide suppliers of
test and measurement equipment and related software analysis tools for the
wireless communications industry."
(more)
<PAGE> 3
LCC and Allen Telecom Announce Business Exchange -- 3/3/3
Statements included in this news release which are not historical in nature are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.
LCC International, Inc.'s and Allen Telecom's Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q contain certain detailed factors that could cause
the Companies actual results to materially differ from forward-looking
statements made by the Companies, including, without limitation, statements
regarding future growth, the acquisition of new management talent, financial
performance, strategic business partnerships, plans to expand and/or finance
businesses, planned investments, costs and timetable for new product
development, the health and economic stability of the world and national
markets, the uncertain level of purchases by current and prospective customers
of each company's products and services, the impact of competitive products and
pricing, and other transactions.
LCC International, Inc. (http://www.lcc.com) is the world's largest RF
engineering and wireless telecommunications consulting firm. LCC provides radio
frequency (RF) engineering and network implementation services and products to
the international wireless industry.
Headquartered just outside Washington, D.C. in McLean, Virginia with regional
headquarters and support centers in Brazil, Germany, Norway, and Singapore, the
company is engaged in three areas of business: Services, Systems and Products,
and Asset Management.
Allen Telecom Inc. (http://www.allentele.com) is a leading supplier of wireless
equipment to the global telecommunications infrastructure market. The Worldwide
Site Products Division supplies sophisticated filters, duplexers, combiners and
amplifiers to any array of OEM customers. The Worldwide Systems Division focuses
on providing repeaters, amplifiers and other products that enhance both the
coverage and the capacity of a wireless system. The Antenna Specialist and
Decibel Products divisions manufacture mobile and land based antennas in
frequency bands that cover all digital and cellular networks.
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