SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission File Number 0-9160
INTEK DIVERSIFIED CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-2450145
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
970 West 190th Street, Suite 720
Torrance, California 90502
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (310) 366-7735
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
The number of shares outstanding of each of the issuer's classes
of Common Stock, $0.01 par value, as of April 30, 1995, is
8,916,449 shares.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTEK DIVERSIFIED CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1995 AND FOR THE
PERIOD FROM INCEPTION (FEBRUARY 4, 1994)
THROUGH MARCH 31,1994 (UNAUDITED)
<TABLE>
<CAPTION>
UNAUDITED
March 31
--------------------------
1995 1994
------------ ------------
<S> <C> <C>
Net Sales $ 307,048 -
Cost of goods sold 277,839 -
------------ ------------
Gross Profit 29,209 -
Selling, general and administrative
expense 775,164 53,301
------------ ------------
Operating loss (745,955) (53,301)
Other income (expense):
Interest (73,457) -
Other 5,750 -
------------ ------------
Loss from continuing operations (813,662) (53,301)
Gain from sale of discontinued
operations 1,339,860
------------ ------------
Net profit (loss) $ 526,198 $ (53,301)
============ ============
Per Share Data:
Continuing Operations $ (.09) (.02)
Discontinued Operations $ .15 $ -
------------ ------------
Net Profit (loss) per share $ .06 $ (.02)
============ ============
Weighted average shares outstanding 8,916,449 2,816,449
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
statements.
PAGE
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INTEK DIVERSIFIED CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 1995 (Unaudited) and December 31, 1994
<TABLE>
<CAPTION>
ASSETS
UNAUDITED
March 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 3,052,253 $ 1,557,363
Accounts receivable, net of
allowance for doubtful accounts
of $35,287 in 1994 799,294 921,539
Note receivable, current portion 219,370 67,500
Inventories 1,158,506 1,127,127
Prepaid expenses and other
current assets 116,853 483,387
Assets held for sale 2,792,615 4,334,183
------------ ------------
Total current assets 8,138,891 8,491,099
------------ ------------
EQUIPMENT, AT COST 1,626,896 794,217
Less--Accumulated Depreciation 55,240 22,641
------------ ------------
1,571,656 771,576
------------ ------------
$ 9,710,547 $ 9,262,675
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
statements.
PAGE
<PAGE>
INTEK DIVERSIFIED CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 1995 (Unaudited) and December 31, 1994
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
UNAUDITED
March 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 360,193 $ 355,354
Accrued liabilities 1,651,900 1,733,932
Related party payable 1,290,946 1,292,079
Note payable 2,500,000 2,500,000
------------ ------------
Total current liabilities 5,803,039 5,881,365
DEFERRED INCOME TAXES 116,300 116,300
------------ ------------
SHAREHOLDERS EQUITY:
Common stock, $.01 par value
Authorized - 9,000,000 shares
Issued - 9,382,531 shares
in 1994 and 1995 93,825 93,825
Capital in excess of par value 4,880,316 4,880,316
Treasury stock, at cost - 466,082
shares in 1994 and 1995 (770,391)
(770,391)
Retained (deficit) (412,542)
(938,740)
------------ ------------
TOTAL STOCKHOLDER EQUITY 3,791,208 3,265,010
------------ ------------
$ 9,710,547 $ 9,262,675
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
statements.
PAGE
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INTEK DIVERSIFIED CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 (UNAUDITED)
AND FOR THE PERIOD FROM INCEPTION (FEBRUARY 4, 1994)
THROUGH MARCH 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED
1995 1994
----------- -----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net profit (loss) $ 526,198 $(53,301)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 32,599 345
Gain from sale of assets
held for sale (1,339,860) -
Changes in assets and liabilities:
Decrease (increase) in:
Accounts receivable 122,245 -
Inventory (31,379) -
Prepaid expenses and
other current assets 366,534 -
Increase (decrease) in:
Accounts payable 4,839 33,342
Accrued liabilities (82,032) -
--------- ----------
Total Adjustments (927,054) 33,687
------------ ----------
Net cash used in operating
activities (400,856) (19,614)
Cash flows from investing activities:
Capital expenditures (832,679) (81,568)
Net change in assets held for sale 195,116 -
Proceeds from sale of discontinued
operations 2,686,312 -
Proceeds from notes receivable 15,000 -
Notes receivable from sale of
discontinued operations (166,870) -
------------- ----------
Net cash provided by (used in)
investing activities 1,896,879 (81,568)
Cash flows from financing activities:
Issuance of common stock - 500,000
Related party payable (1,133) -
------------ ----------
Net cash provided by
financing activities (1,133) 500,000
------------ -----------
Net increase in cash and
cash equivalents 1,494,890 398,818
Cash and cash equivalents at
beginning of period 1,557,363 -
------------ ----------
Cash and cash equivalents at
end of period $ 3,052,253 $398,818
============= ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
statements.
PAGE
<PAGE>
INTEK DIVERSIFIED CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND FOR THE
PERIOD FROM INCEPTION (FEBRUARY 4, 1994)
THROUGH MARCH 31, 1994
(1) PRESENTATION
The condensed consolidated financial statements included herein
have been prepared by the Company, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, and the Company believes
that the disclosures are adequate to make the information
presented not misleading. These condensed consolidated financial
statements should be read in conjunction with the financial
statements and the notes thereto included in the Company's latest
annual report on Form 10-K.
The information furnished herein reflects all adjustments which
are, in the opinion of management, necessary to a fair
presentation of the condensed consolidated financial statements
for the interim periods presented taken as a whole. These
adjustments are of a normal and recurring nature. The results of
the interim periods are not necessarily indicative of results to
be expected for the entire year.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. PRINCIPLES OF CONSOLIDATION
INTEK Diversified Corporation (INTEK or the Company) was
incorporated in 1969 and had been primarily engaged in the
business of molding, fabricating and selling plastic products
through its wholly owned subsidiary, Olympic Plastics Corporation
(Olympic).
On September 23, 1994, a newly formed, wholly-owned, subsidiary
of INTEK, Romnet, Inc., a Delaware corporation, acquired all of
the issued and outstanding stock of Simrom, Inc. (Simrom), an
Ohio corporation in exchange for 6,000,000 shares of INTEK common
stock. Effective September 23, 1994, Simrom merged with and into
Romnet, Inc. (the Merger). After the merger of Simrom into
Romnet, Inc., the surviving corporation changed its name to
Roamer One, Inc. (Roamer One) and redirected the focus of the
Company and its resources to the development of the Roamer One
business and the telecommunications industry and to discontinue
and divest the operations of Olympic Plastics. Since the former
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shareholders of Roamer One retain more than a 50 percent
controlling interest in the surviving company (INTEK), the
business combination is being treated as a reverse merger for
accounting purposes, with Roamer One considered the acquiring
company, although INTEK is the surviving company under corporate
law.
The consolidated financial statements for the three months ended
March 31, 1995 include the accounts of INTEK, and its wholly-owned subsidiaries:
Olympic Plastics, Roamer One, IDC
International Corporation (IDC), and IMCX Corporation (IMCX).
Olympic s assets are reported as Assets Held for Sale. The
Consolidated Statement of Operations and the Condensed
Consolidated Statement of Cash Flow for the period from inception
(February 4, 1994) through March 31, 1994 include only the
accounts of Roamer One, consistent with the reverse merger
accounting treatment. All significant intercompany accounts and
transactions have been eliminated in consolidation.
b. DESCRIPTION OF BUSINESS
The Company's principal subsidiary, Roamer One, is engaged in
developing and operating Specialized Mobile Radio (SMR) systems
within the United States on the recently licensed 220 to 222 MHz
(220 MHz) narrowband spectrum.
c. CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments purchased
with an original maturity of three months or less to be cash
equivalents.
d. INVENTORIES
Inventories are stated at the lower of cost or market
e. EQUIPMENT, AT COST
Depreciation is provided on the straight-line method over the
estimated useful lives of the assets which are five to ten years.
Normal maintenance and repairs are charged to expense as
incurred. Expenditures which increase the useful lives of the
assets are capitalized.
f. INCOME TAXES
There was no provision for income taxes for the quarter ended
March 31, 1995. The Company is expecting an "ordinary" loss for
the current fiscal year and this, combined with net operating
loss carryforwards from the previous years, are expected to
offset any current tax liability. Deferred income taxes remain
unchanged from December 31, 1994.
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The Company and its subsidiaries file consolidated Federal and
combined state income tax returns. Effective January 1, 1991, the
Company adopted Statement of Financial Accounting Standard No.
109 "Accounting for Income Taxes" (SFAS 109). SFAS 109 requires,
among other things, a change to the liability method of computing
deferred income taxes.
The Company provides for deferred income taxes relating to timing
differences in the recognition of income and expense items
(primarily relating to depreciation, amortization and certain
leases) for financial and tax reporting purposes. Such amounts
are measured using current tax laws and regulations in accordance
with the provisions of SFAS 109.
g. NET PROFIT (LOSS) PER SHARE
The net profit (loss) per share for all periods shown is based
upon the weighted average number of shares outstanding for the
periods. No common stock equivalents are included in the
calculation since they would have an anti-dilutive effect.
h. RECLASSIFICATIONS
Certain amounts in the December 31, 1994 Consolidated Financial
Statements have been reclassified to conform with the current
period presentation.
(3) INVENTORIES
Inventories at March 31, 1995 and December 31, 1994, consist of
work in process.
(4) RELATED PARTY TRANSACTIONS
Pursuant to an agreement, INTEK pays an annual management fee of
$200,000 to Peter Paul Corporation, Inc., an affiliate of Anglo
York, a shareholder of the Company. Peter Paul Corporation, Inc.,
makes the services of Mr. Vincent Paul, Vice Chairman of the
Board of Directors, available to the Company without dditional
compensation. The agreement expires on December 31, 1999. For the
three months ended March 31, 1995, INTEK paid Peter Paul
Corporation, Inc. $50,000.
For the three months ended March 31, 1995, INTEK incurred and
paid $30,000 to Roamer One Holdings, Inc., a shareholder of INTEK
and a company controlled by Nicholas R. Wilson, Chairman of the
Board. In addition, the Company paid $30,000 to Roamer One
Holdings, Inc. that had been accrued as of December 31, 1994.
For the three months ended March 31, 1995, INTEK incurred and
paid $30,000 to Simmonds Communications Limited (Simmonds), a
shareholder of the Company, for management services. In addition,
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the Company paid $30,000 to Simmonds that had been accrued as of
December 31, 1994.
On March 9, 1995, INTEK announced that it had entered into a
letter of intent to acquire the wireless communications business
of Simmonds. Under the terms of the proposed transaction,
Simmonds will sell to INTEK all of its wireless communications
business including Midland International Corporation (Midland) of
Kansas City, Missouri, the operating assets of Midland
International Limited, and SCL Systems. Midland is a distributor
and value added reseller of wireless communication products for
the professional land mobile radio market and the consumer
citizen band and marine radio markets. Midland International
Limited is a Canadian corporation which distributes Midland
wireless communication products in Canada and internationally.
SCL Systems is a systems integrator for large, wide area wireless
communications networks. The transaction is subject to the
approval of the Boards of Directors of Simmonds and INTEK, due
diligence, regulatory approval, and shareholder approval, and
final negotiation of a definitive agreement by June 30, 1995.
The law firm of Kohrman Jackson & Krantz, of which Steven L.
Wasserman is a Principal, renders legal services to INTEK and its
subsidiaries for which it received fees of $10,000 during the
three months ended March 31, 1995 from INTEK.
For the three months ended March 31, 1995, Roamer One was
invoiced $1,028,584 for radio equipment and installation services
from Simmonds. Previous accounts payable for equipment totaled
$1,212,300. During the three months ended March 31, 1995, Roamer
One made payments to Simmonds totaling $994,716 leaving an ending
accounts payable balance of $1,246,168. This amount is included
in related party payable.
(5) NOTE PAYABLE
In November 1994, INTEK borrowed $2,500,000 against a short-term
promissory note from Noramco Mining Corporation (now known as
Quest Capital Corporation). The 12 percent note was due and
payable in installments of $1,000,000 on December 30, 1994 and
$1,500,000 on March 31, 1995. The maturity of the note has been
extended such that the full $2,500,000 is due and payable on or
before June 30, 1995. In consideration of the loan extension the
Company has agreed to issue 182,000 shares of common stock
subject to certain restrictions. Quest Capital Corporation will
return up to 82,000 shares in the event that certain early
payment terms are met. The loan is secured by a first mortgage on
the real property owned by Olympic Plastics and a guarantee from
Simmonds. In return for its guarantee, INTEK has agreed to
provide Simmonds with a pledge of Olympic Plastic s common shares
and a second mortgage on the real property.
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(6) COMMITMENTS
As of March 31, 1995, Roamer One has entered into 56 site leases
to permit installation, operation, and maintenance of
transmission/reception equipment facilities in connection with
the SMR systems. These leases generally have a five year term,
with three consecutive five-year extension periods upon the
mutual agreement of the parties.
As of March 31, 1995, future minimum lease payments are as
follows:
<TABLE>
<S> <C>
1995 $ 405,070
1996 398,714
1997 370,611
1998 296,386
1999 275,359
----------
$1,746,140
==========
</TABLE>
In November 1994, INTEK entered into a management services
agreement with Quest Capital Corporation to provide services in
corporate finance and managing corporate restructuring. In
consideration for these services, INTEK paid $1,000 and issued
100,000 shares of common stock, which are subject to certain
restrictions. In connection with the issuance of the 100,000
shares of common stock, INTEK entered into a registration rights
agreement pursuant to which Quest Capital Corporation is entitled
to certain registration rights.
(7) MAJOR CUSTOMERS
Roamer One has commenced construction and management of 220 MHz
Specialized Mobile Radio systems pursuant to Management
Agreements. Of these agreements, 161 obligate the licensee to
provide the funds for system construction and operating costs.
During the three months ended March 31, 1995, billing to 5
licensees for site equipment, construction and installation
accounted for 100% of consolidated net sales. The Company expects
to deliver at least 50 systems to its major customer, Voice Data
Communication, (VDC) prior to the FCC deadline of December 31,
1995. As of March 31, 1995, a total of 10 systems had been
delivered and invoiced to VDC at a gross profit of $65,743.
(8) DISCONTINUED OPERATIONS
Subsequent to the September 23, 1994 merger with Roamer One, the
Company decided to redirect its business from fabricating and
<PAGE>
selling plastic products, primarily by injection and compression
molding of various plastic resins, to customers in the
electronics aerospace and commercial aircraft markets to the
business of developing and managing a Specialized Mobile Radio
Network in the United States utilizing the recently licensed 220
MHz narrowband spectrum. Consequently, during the first half of
1995, the Company has entered into agreements to sell its
machinery, equipment and inventory to four separate buyers.
Pursuant to the agreements, the buyers will pay to INTEK
$3,274,000 for equipment plus the book value of inventory.
As of March 31, 1995, the Company had completed two sales
totaling $2,853,182 for equipment and inventory. The Company
received cash of $2,686,312 and accepted a non-interest bearing
note in the amount of $166,870 with monthly payments and a
maturity date of September, 1995. Of the proceeds, $263,000 were
applied against a note payable secured by Olympic Plastics
assets.
(9) SUBSEQUENT EVENTS
INTEK and Roamer One have entered into a Financing Agreement and
related agreements with Linear Modulation Technology Limited
("LMT"), a division of Securicor located in Bath, England, and
SCL providing for the financing and delivery of 200 base station
repeaters and 3,600 mobile radios to be manufactured by
Securicor. Under the terms of the agreement, Securicor (or LMT)
will deliver approximately $2,900,000 worth of base station
equipment and $1,100,000 worth of mobile radios in exchange for
an equal value of the Company s stock; the number of shares of
which will be determined by the lower of market value at the time
of completed delivery or the date of the agreement. The balance
of the order will be financed over a period of 12 months and
supported by 4 separate letters of credit issued by the Company
in the amount of $750,000 each. The total value of the
transaction is approximately $7,000,000. The conversion of
$4,000,000 in debt to equity by Securicor is contingent upon the
signing of a definitive merger agreement between Simmonds and
INTEK for the wireless business of Simmonds as outlined above.
In the event a merger agreement is not signed, Roamer One will be
required to pay all outstanding invoices related to the Securicor
equipment by August 15, 1995. If Roamer One defaults on this
payment, then Simmonds will be obligated to pay Securicor for the
equipment it has delivered to Roamer One. As security for the
equipment it receives from Simmonds without remittance, Roamer
One has granted Simmonds a collateral interest in the equipment,
and the rights afforded by the Management Agreements, related to
the sites where the equipment is installed. Roamer One has made
an initial deposit of $1,000,000 to Simmonds against this
extension credit.
Between April 1, 1995 and May 15, 1995, the Company repaid
<PAGE>
$891,450 of its short-term obligation to Quest Capital
Corporation, leaving a principal balance due of $1,608,550. As
part of the early payment, INTEK will receive back approximately
38,000 shares of common stock pursuant to the early payment
provisions of the loan extension agreement described in Footnote
5-"Note Payable".
Between April 1, 1995 and May 15, 1995, the Company completed two
additional sales of Olympic Plastics assets totaling $1,014,302
for equipment and inventory. The Company received cash payments
of $735,000 and two notes for the balance of the purchase price
on one sale. One note is in the principal amount of $175,000
bearing interest at the rate of 10% per annum with monthly
principal and interest payments and a maturity date of July,
1998. The second note is in the principal amount of $104,302
bearing interest at the rate of 10% per annum with three payments
of interest and principal due in July, August, and September of
1995.
On April 18, 1995, Roamer One and Midland entered into a
Memorandum of Understanding providing Midland with exclusive
sales and distribution rights for all Roamer One private branded
220 MHz radio product in the United States. In connection with
the agreement between Linear Modulation Technology (LMT) and
Roamer One, LMT will supply Securicor radios bearing the Roamer
One logo. An initial order of 3,600 units is to be shipped
directly to Midland for distribution throughout their network of
220 MHz dealers. The radios will be purchased by Roamer One and
Roamer One will pay a sales commission to Midland.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS FOR THE THREE MONTH
PERIOD ENDED MARCH 31, 1995 AND FOR THE PERIOD
FROM INCEPTION (FEBRUARY 4, 1994) THROUGH MARCH 31, 1994
The following discussion and analysis sets forth certain factors
which produced changes in the Company's results of operations
during the three month ended March 31, 1995 and as compared with
the same period in 1994 as indicated in the Company's
consolidated financial statements in accordance with reverse
merger accounting treatment.
RESULTS OF THREE MONTHS ENDED MARCH 31, 1995 COMPARED TO THE
PERIOD FROM INCEPTION (FEBRUARY 4, 1994) THROUGH MARCH 31, 1994:
On September 23, 1994, a newly formed, wholly owned, subsidiary
of the Company, Romnet, Inc., a Delaware corporation, merged with
Simrom, an Ohio corporation (the Merger), whose principal assets
were certain rights relating to licenses granted by the FCC for
the 220 MHz to 222 MHz narrow band spectrum. After the Merger,
the surviving corporation changed its name to Roamer One, Inc.
The Company has now refocused its business from the Plastics
Business to a development stage enterprise of developing,
constructing and managing a SMR network in the United States
utilizing 220 MHz narrowband spectrum. The Company is in the
process of disposing of the assets relating to the Plastics
Business. See Financial Footnote 8--"Discontinued Operations".
Roamer One currently holds management agreements, containing an
option to purchase the license together with the system, covering
261 sites. The systems require a capital investment of
approximately $75,000 per site to construct. The option to
purchase the system from the licensee can be exercised at any
time after construction is complete for the nominal sum of thirty
five dollars. Prior to exercise of the option, Roamer One retains
all proceeds from operation of the system until such time as its
capital costs are recovered. In addition to sites for which it
holds options to purchase, Roamer One has also entered into
management agreements with licensees who provide for the
construction and operating expenses on their own behalf. These
licensees account for an additional 187 systems to be built
without need of Roamer One funding. The equipment is to be
purchased from Roamer One and incremental profits will be
realized by the company.
Roamer One plans to provide services related to its systems as
well as to outside licensees under management contract that would
include:
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1.) System design and construction
2.) Market demographics
3.) Advertising
4.) Subscriber acquisition and loading
5.) Dealer network establishment
6.) Subscriber billing and tracking
7.) Budget administration
8.) System management, maintenance, and repair
The management fees charged to licensees range from 20% to 40% of
gross revenues derived from system operations. The company will
withhold its fees prior to disbursement of revenues to the
licensee.
While Roamer One has a long term focus on the revenues derived
from air time billing, management realizes the need to insure
that a sufficient distribution channel to market exists to
provide subscriber equipment to the end user. Midland
International Corporation ("Midland") has entered into a sales
and distribution agreement with Roamer One. Midland is a wholly
owned subsidiary of Simmonds Communications Ltd, one of INTEK's
major shareholders. Midland is rated as the fourth largest
distributor of land mobile radio products in the United States.
Through agreements with major vendors, Securicor in particular,
Roamer One is to be supplied with subscriber product bearing the
Roamer One name and logo. Midland will warehouse, distribute, and
service the product throughout the growing 220 MHz dealer
network. This "private labeling" of radio equipment will help
establish Roamer One name recognition in the marketplace and
create a value added incentive for dealers to offer activation on
the Roamer One North American Wireless Network of systems. Roamer
One will augment sales by telemarketing, direct mail, and
personal calls to larger accounts in the transportation, public
utilities, and service industries. The initial radios will be of
traditional voice dispatch variety and will require a subscriber
population of approximately 100 units per system in order for the
company to realize a positive cash flow from operations. All
additional subscribers, including eventual data users, will add
revenues to the company without further contribution of capital
for equipment or increase in cost of goods sold.
As of March 31, 1995, the Company completed construction of 22
systems pursuant to its Management Agreements. Of its Management
Agreements, 161 obligate the licensee to provide the funds for
system construction and operating costs. During the three months
ended March 31, 1995, billings to licensees for site equipment,
construction and installation resulted in equipment sales of
$307,048.
Cost of goods sold as a percentage of net equipment sales was
90%.
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Selling, general and administrative expense increased by $721,863
over the same period last year since the 1994 expenses include
only Roamer One expenses.
Net Interest Expense of $73,457 related primarily to the short-term promissory
note from Quest Capital Corporation. See Financial Footnote 5--"Note Payable"
The loss from continuing operations was $760,361 greater than
last year since the 1994 expenses include only Roamer One.
LIQUIDITY AND CAPITAL RESOURCES.
At March 31, 1995, working capital was $2,335,852. Approximately
$1.6 million remains outstanding on bridge financing from Quest
Capital Corporation in the original principal amount of $2.5
million. See Financial Footnote 9 -- "Subsequent Events." Such
outstanding amount is due June 30, 1995 unless an extension is
obtained.
The Company is pursuing the sale of the remaining non-performing
assets of Olympic Plastics which consist of land and a building.
The Company anticipates that such a sale will yield gross
proceeds in the aggregate of approximately $2 million. The
Company has not received any offers on such assets. If the
Company is successful in selling such assets (which assets are
encumbered by a lien in favor of Quest Capital Corporation), the
loan to Quest Capital Corporation will be repaid with the
proceeds of such sale. Any remaining proceeds will be used for
working capital.
On April 24, 1995, INTEK entered into a $7 million financing
agreement with LMT. The financing consists of a $3 million loan
and a $4 million equity investment in common shares of INTEK. The
proceeds will be used for the purchase of Securicor base station
repeater equipment and subscriber radio equipment for the Roamer
One Specialized Mobile Radio network. See Financial Footnote 9--"Subsequent
Events."
The Company is pursuing raising additional capital through a
private placement of its securities. No assurance can be made
that the Company will successfully complete such an offering or
that adequate funds will be raised to fund its working capital
needs.
The ratio of current assets to current liabilities as of March
31, 1995 was 1.4 to 1, compared to 1.4 to 1 as of December 31,
1994. Cash increased by $1,494,890 while Assets Held for Sale
decreased by $1,541,568 due to the completed sales of Olympic
Plastics assets. See Financial Footnote 8--"Discontinued
Operations".
PAGE
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PART II. OTHER INFORMATION.
ITEM 1. LEGAL PROCEEDINGS. None
ITEM 2. CHANGES IN SECURITIES. None
ITEM 3. DEFAULTS UPON SECURITIES. None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION. None
PAGE
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits
10.11 Equipment Sale Agreement dated April 20, 1995
among Linear Modulation Technology Limited,
Simmonds Communications Limited and Roamer One,
Inc.
10.12 Purchase Agreement dated April 20, 1995 between
SCL, Inc. and Roamer One, Inc.
10.13 Financing Agreement dated April 20, 1995 among
Linear Modulation Technology Limited, Roamer
One, Inc., INTEK Diversified Corporation,
Simmonds Communications Limited and Roamer One
Holdings, Inc.
10.14 Guaranty dated April 20, 1995 by INTEK
Diversified Corporation.
10.15 Assignment Agreement dated April 20, 1995 among
Simmonds Communications Limited, Roamer One,
Inc., INTEK Diversified Corporation and Linear
Modulation Technology Limited.
10.16 Security Agreement dated April 20, 1995 among
Simmonds Communications Limited and Roamer One,
Inc.
10.17 Secured Promissory Note dated April 20, 1995 by
Roamer One, Inc. payable to the order of
Simmonds Communications Limited.
10.18 Letter Agreement dated April 17, 1995 between
Olympic Plastics Co, Inc. and Industrial
Assets, Inc.
10.19 Memorandum of Understanding by and betwen
Roamer One, Inc. and Midland International
Corporation
b. Reports on Form 8-K
The Registrant filed one report on Form 8-K during the
first quarter of 1995. The report, filed on March 13, 1995,
related to the announcement of the execution by the Registrant of
a letter of intent to purchase the wireless communications
business of Simmonds Communications, Ltd. The report was filed
pursuant to Item 5 of Form 8-K.
PAGE
<PAGE>
INTEK DIVERSIFIED CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
March 31, 1995
SIGNATURE
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.
DATED: May 15, 1995
INTEK DIVERSIFIED CORPORATION
By: /s/ Peter A. Heinke
---------------------------------------
Peter A. Heinke
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial and Chief
Accounting Officer)
EXHIBIT 10.11
EQUIPMENT SALE AGREEMENT
THIS AGREEMENT is made the 20th day of April, 1995
BETWEEN
1. LINEAR MODULATION TECHNOLOGY LIMITED, an English
limited company having its registered office at Sutton Park
House, 15 Carshalton Road, Sutton, Surrey SM1 4LD, England
('LMT'),
2. SIMMONDS COMMUNICATIONS LIMITED, an Ontario
corporation having its principal place of business at 5255 Yonge
Street, Suite 1050, Willowdale, Ontario, Canada ('SCL').
AND
3. ROAMER ONE, INC., a United States, State of
Delaware corporation having its principal place of business at
19401 South Vermont Avenue, Suite A-205, Torrance, California
90502 ('Roamer') for the purposes of Section 6 hereof.
WHEREAS
A. SCL is engaged in the business of developing,
manufacturing, marketing and distributing two way land mobile
radio communication equipment and related products and owns 27%
of the outstanding and issued common stock of Intek Diversified
Corporation, a Delaware corporation, with a wholly-owned
subsidiary Roamer One Inc. ('Roamer'), a Delaware corporation
engaged in the implementation, operation and networking of 220
MHz Specialized Mobile Radio ('SMR') facilities in the United
States.
B. LMT is a supplier of 220 MHz 5 channel trunked radio
systems and mobile radios ('Equipment') and wishes to sell such
equipment to SCL for use in SMR facilities owned and/or operated
by Roamer. LMT is a wholly-owned subsidiary of Securicor
Communications Limited, an English company which is in turn a
member of Securicor Group plc.
NOW IT IS HEREBY AGREED as follows: -
1. LMT will supply and SCL will purchase Equipment in
accordance with the terms of SCL's purchase order dated 10
November 1994 (no. 94-0177) as may be amended in writing by
agreement of the parties from time to time; a copy of such order
is set out in Schedule 1 to this Agreement. At the date of this
Agreement the quantity of Equipment to be supplied by LMT and
purchased by SCL is
<PAGE>
200 systems at US$ 34,190 each, and
2,000 mobiles at US$ 550 each
1,600 mobiles at US$ 350 each
2. The terms and conditions of contract set out in
Schedule 2 to this Agreement will apply.
3. Payment for the Equipment referred to in clause 1
will be made in accordance with the Financing Agreement between
and among LMT, SCL, Roamer, INTEK Diversified Corporation and
Roamer One Holdings, Inc. dated April 20, 1995 ('the Financing
Agreement').
4. SCL may on-sell such Equipment to Roamer, subject
to the signature of the Financing Agreement between Roamer and
LMT.
5. SCL will use all reasonable endeavours to procure
that the price for the Equipment will be paid to LMT by Roamer in
accordance with the terms of the Financing Agreement. Until such
time as the Financing Agreement is signed and assigned to LMT,
SCL will be liable to pay for Equipment within 60 days of
presentation of LMT's invoice supported by proof of shipment.
6. SCL and Roamer will purchase from LMT all of their
requirements for 220 MHz base stations for a period of five years
from the date of this Agreement, provided that the LMT base
station produce life cycle costs are reasonably competitive in
the market for 220 MHZ base stations in the U.S., and that the
performance capabilities of the LMT base stations, and the
maintenance and technical support provided therefor, are
reasonably customary for such 220 MHZ base stations in the U.S.
and that the LMT base stations are available on reasonably
customary commercial delivery schedules. LMT agrees that this
provision will not apply to Roamer's requirements relating to the
US West Coast regional SEA system and will not apply to any
previously-constructed systems employing SEA equipment which
Roamer may undertake initially to manage and/or acquire an option
to purchase after the date of this Agreement (which exception
does not apply to any system which Roamer will initially
construct or to which Roamer has entered into a Management
Agreement, Option Agreement, or both as of the date of this
Agreement; provided, however, that this clause shall apply to any
reconstruction of any such systems formerly equipped with SEA
base stations within five years of the date hereof.
7. This Agreement may be executed and delivered in
any number of counterparts, each of which when so executed and
delivered shall constitute an original, and all of which together
shall constitute one instrument.
<PAGE>
Signed by
/s/ M. Wilkinson
for and on behalf of
LINEAR MODULATION TECHNOLOGY LIMITED
Signed by
/s/ H. Dunstan
for and on behalf of
SIMMONDS COMMUNICATIONS LIMITED
Signed by
/s/ David Neibert
for and on behalf of
ROAMER ONE, INC.
for the purposes of Paragraph 6 only
Dated: April 20, 1995
<PAGE>
EXHIBIT 10.12
PURCHASE AGREEMENT
This Purchase and Sale Agreement ("Agreement") is made
as of the 20TH day of April, 1995 by and between SCL, Inc., a
Delaware corporation ("Seller"), which division has its principal
place of business at 1690 N. Topping Ave., Kansas City, Missouri
64120 (telecopier number: 816-920-1113), and Roamer One, Inc., a
Delaware corporation ("Buyer"), having its principal place of
business at 19401 South Vermont Avenue, Suite A-205, Torrance,
California 90502, U.S.A. (telecopier number: 310-366-7712).
WHEREAS, Buyer desires to purchase from Seller and
Seller desires to sell to Buyer certain 220 MHz 5 channel trunked
radio systems and mobile radios ("Systems") on the terms and
conditions set forth herein;
Now, therefore the parties agree as follows:
1. PURCHASE ORDERS. Buyer shall place purchase
orders ("Purchase Orders") for all of its Systems requirements
for infrastructure equipment with Seller. The Purchase Orders
shall contain the equipment specifications relating to the
Systems and shall be subject to the terms and conditions of sale
attached as SCHEDULE A to this Agreement (the "Terms and
Conditions of Sale") which are hereby incorporated into this
Agreement by reference.
2. SUPPLEMENTARY ORDER INFORMATION. The Systems
covered by the Purchase Order shall include, but not be limited
to, the Systems listed on SCHEDULE B to this Agreement. Buyer
shall provide all supplementary information requested by Seller
regarding shipping and delivery to the various installation
locations listed on SCHEDULE B. In particular, Buyer agrees to
provide to Seller a list of sites for the installation of the
Systems in a timely manner at Seller's request, and sufficiently
in advance of projected delivery dates to allow for the orderly
shipment of Systems to the site locations. In addition, Buyer
shall provide Seller with a detailed roll-out schedule projecting
the order of Systems installations and the projected dates for
such installations, which shall be jointly agreed upon by the
parties. If requested by Seller, Buyer agrees to furnish Seller
with proof of signed and valid leases for each of the site
locations on which Systems will be installed.
3. PRICING. (a) The Systems and all related
equipment and services shall be provided at prices competitive
with prices offered by other systems integrators for comparable
equipment and services. Services and equipment relating to
Systems shall be priced as follows:
(i) For materials related to the infrastructure
trunked mobile radio system and associated
multicoupling equipment, cost to Seller from
OEM vendor, plus 15% gross margin, with the
exception of importation duty and shipping
<PAGE>
(with importation duty and shipping costs to
be charged to Buyer at cost);
(ii) For subcontracted labor in connection with
tower installation, cost to Seller, plus 15%
gross margin;
(iii) For labor in connection with project
management, $75 Canadian per hour; provided,
however, that the total amount shall not
exceed an amount equal to two percent (2%) of
the total of value of all Systems or be less
than $120,000 U.S. in the aggregate;
(iv) For labor in connection with Systems
assembly, $80 Canadian per hour; and
(v) For labor in connection with field support,
$85 Canadian per hour.
(b) All Canadian dollar amounts will be converted at
the U.S. dollar exchange rate in effect as of the invoice date
for invoiced equipment and services.
4. SHIPMENT OF ASSEMBLED SYSTEMS. Shipment of
assembled Systems shall be in the order agreed between Buyer and
Seller. Shipment shall be made upon completion of assembly
within a reasonable time following SCL's receipt of all parts and
components of such Systems.
5. INVOICING OF EQUIPMENT AND INSTALLATION CHARGES.
All charges for equipment and labor in connection with Systems
assembly shall be separately invoiced to Buyer upon shipment of
equipment to site locations identified by Buyer. All other
charges relating to site installation of Systems shall be
invoiced to Buyer on a monthly basis and shall be broken down by
site location where applicable. All charges for project
management and field technical service shall be invoiced monthly
and supported by time sheets.
6. AUDIT RIGHTS. Upon 30 days notice to Seller,
Buyer shall have the right, during business hours of Seller, to
inspect, examine and review books, records and other data,
including any electronic data of Seller, relating to Systems
costs invoiced to Buyer. In the event any dispute should arise
relating to such invoiced costs, the parties shall use reasonable
efforts to resolve the dispute and agree upon adjustments within
a thirty (30) day period.
7. TERMINATION. (a) In addition to any other
agreements which may be entered into to secure Seller's right to
payment, if Buyer defaults on any payment when due hereunder or
under the terms and conditions of any related financing
arrangement entered into by Buyer and Seller, or if any
foreclosure or execution is made on Buyer's property or assets,
<PAGE>
or if Buyer enters into any reorganization proceeding or makes
any arrangement or composition with its creditors, or if Buyer
permits any act of similar effect to take place, then Seller may
upon notice:
(i) Suspend or terminate the contract or any part
of it,
(ii) Stop any Systems in transit, and
(iii) Recover any Systems from the Buyer's premises
for which payment has not been made in full.
(b) If (i) Seller fails to correct an invoicing error
after 45 days notice from Buyer, (ii) Seller defaults on its
obligations to deliver the Systems hereunder, (iii) Seller cannot
perform in a timely manner the installation of the Systems
purchased from Seller hereunder in accordance with any written
schedule executed by Buyer and Seller, and is unable to perform
such installation within thirty (30) days after receipt of
written notice from Buyer to Seller, (iv) any foreclosure or
execution is made on Seller's property or assets, (v) Seller
enters into any reorganization proceeding or makes any
arrangement or composition with its creditors, or (vi) Seller
permits any act of similar effect to take place, then Buyer may,
upon notice suspend or terminate this Agreement in whole or in
part.
8. BREACH BY BUYER. In the event Buyer should
purchase any of its Systems requirements for infrastructure
equipment directly from an OEM supplier other than Seller, then
Buyer shall pay to Seller, within thirty (30) days of receipt of
such equipment, an amount equal to 1.1765 times the cost of such
equipment as listed on the invoice, less freight, duties, taxes
and other ancillary charges, as payment for Seller's technical
assistance in such purchase and as compensation for project
management.
9. INSURANCE. (a) Seller shall indemnify and hold
Buyer harmless from and against any claims arising from injury or
suit resulting from or submitted by any employee or subcontractor
working on Seller's behalf, in the performance of their duties in
connection with the terms of this Agreement.
(b) Buyer shall indemnify and hold Seller harmless
from and against any claims arising from or injury or suit
resulting from or submitted by any employee or subcontractor
working on Buyer's behalf, in the performance of their duties in
connection with the terms of this Agreement.
(c) Each party shall use its best efforts to require
any subcontractors or related or unrelated third parties to
produce sufficient proof of insurance covering potential
liabilities in connection with the contracted work.
<PAGE>
10. ASSIGNMENT. This Agreement may not be assigned by
either party without the prior written consent of the other
party; provided, however, upon thirty (30) days prior written
notice to Buyer, Seller may assign its rights and obligations
under this Agreement to any affiliate, division, subsidiary,
successor corporation or parent of the Seller which will become a
part of Intek in accordance with the Letter of Intent between
Simmonds Communications and Intek dated March 20, 1995.
11. NOTICES. All notices and other communications
provided for hereunder shall be in writing and shall be mailed,
telecopied or personally delivered, in each event to the address
or telecopier number of the addressee set forth above, or at such
other address or telecopier number as shall be designated by any
party in a written notice to the other party. All such notices
and communications shall: (i) if mailed, be effective five (5)
days after deposit into the U.S. mail with postage prepaid;
(ii) if telecopied, be effective upon facsimile transmission with
confirmation thereof; and (iii) if personally delivered, be
effective upon delivery thereof.
12. AMENDMENT; INTERPRETATION. No amendment of this
Agreement shall be effective unless the same shall be in writing
and signed by both of the parties hereto. Whenever possible,
each provision of this Agreement shall be interpreted so as to be
effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement;
provided, however, that if the rendering of any such provision is
ineffective shall alter the commercial basis of this Agreement,
the parties shall renegotiate this Agreement.
13. GOVERNING LAW. This Agreement shall be governed
by the internal laws of the State of Delaware, excluding any
choice of law rules which may direct the application of the laws
of another jurisdiction.
14. ENTIRE AGREEMENT. Except for the Supply Agreement
and the related financing agreements among Buyer, Simmonds
Communications Limited, an Ontario corporation, and Linear
Modulation Technology Limited, an English limited company, this
Agreement, together with all schedules hereto, constitutes the
entire agreement of the parties and supersedes all prior
agreements and understandings between them, regarding the subject
matter hereof.
15. COUNTERPARTS. This Agreement may be executed and
delivered in any number of counterparts, each of which when so
executed and delivered shall constitute an original, and all of
which together shall constitute one instrument.
PAGE
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
SELLER
SCL, INC.
By:/s/ H. Dunstan
Its: Director
BUYER
ROAMER ONE, INC.
By: /s/ David Neibert
Its: President
PAGE
<PAGE>
Schedule A
TERMS AND CONDITIONS OF SALE
1. PRICE. Except as otherwise provided, all prices
are quoted in U.S. dollars. Quoted prices do not include the
costs of freight, applicable sales, excise, customs or import
duties use or similar taxes, insurance, installation costs or
special packaging. Buyer shall either pay or reimburse Seller
for all such costs.
2. TERMS OF PAYMENT. All invoices shall be dated as
of the date of shipment to the site, or in the event Buyer causes
a delay, then the invoice date shall be the date Seller would
otherwise have made shipment to the site. Any demand for payment
of non-shipped merchandise shall be accompanied by a Certificate
of Seller that such inventory is being held for shipment to Buyer
free and clear of all liens. Unless otherwise agreed, all
payments are due 30 days from date of invoice up to a credit
limit of $1,000,000 U.S. However, if shipment is delayed by
Buyer, payment shall nevertheless become due on the date Seller
would have made shipment but for the delay. If Seller at any
time determines in its sole judgment that the financial condition
of Buyer does not justify the extension or continuance of credit,
Seller may insist on the immediate payment of all outstanding
invoices, withhold further production or shipment until payment
in full has been received, require advance payments, and/or ship
orders C.O.D. Except as otherwise specifically agreed between
Seller and Buyer, interest shall be charged on all payments not
made when due at a rate of one percent per month, but not in
excess of applicable legal maximums. All payments are to be made
in United States funds, unless otherwise stipulated.
3. SHIPMENT. Unless otherwise indicated, all goods
shall be shipped CIF installation location in continental United
States notified by Buyer in writing. Except as provided with
respect to deferred deliveries, the risk of loss of such goods
shall pass to Buyer upon delivery to the shipper. Buyer shall
pay or reimburse Seller for extra freight charges and incidental
costs incurred for goods shipped at Buyer's request by means
other than Seller's customary shipping methods.
4. DELAYS. All delivery dates shall be regarded as
approximate. Seller shall be excused from the obligation to make
timely deliveries where delay in delivery is caused directly or
indirectly by any act of God, accident, labor dispute, act of
government, act of Buyer, delay or default by subcontractor or
supplier or any other cause beyond Seller's reasonable control.
Seller shall not be liable to Buyer for any such delay in
delivery and, notwithstanding any such delay, Buyer shall not be
excused from its obligation to take and pay for goods ordered
unless Buyer reasonably notifies Seller of Buyer's cancellation
and reimburse Seller as provided in Paragraph 6.
<PAGE>
5. DEFERRED DELIVERIES. Upon written request by
Buyer given not later than 30 days prior to the scheduled
shipping date, Seller will alter, redirect or defer for up to
60 days the delivery of goods sold; provided that Buyer pays for
such goods as required by Paragraph 2 and pays all additional
costs (including reasonable storage and insurance) incurred by
Seller as a result of such deference, alteration or reduction.
6. CANCELLATION. Orders may not be cancelled or
modified, either in whole or in part, without the Seller's
written consent; nor may Buyer's blanket purchase orders be
modified or cancelled by Buyer's release orders except upon
days written notice in advance of scheduled delivery. In the
event of any such cancellation, Buyer shall reimburse Seller for
all applicable costs incurred by it (including the cost of
purchased materials which are not standard stock) and pay Seller
an allowance for its profit equal to ten (10) percent of the
total amount of the order cancelled.
7. PATENTS. Buyer shall indemnify and hold Seller
harmless from any liability or cost arising out of any suit,
action or claim for the infringement of any patent or patent
rights which are or may be asserted against Seller because of the
design, nature, structure or use of any goods ordered or
contracted for which is manufactured or fabricated, in whole or
part, according to designs or specifications furnished by Buyer
and shall indemnify and hold Seller harmless from all claims for
loss or damage, and from all court costs, attorneys' fees and
other expenses paid or incurred by or imposed upon Seller in
connection with the defense of any action brought against Seller
by reason of Seller's performance of any order for Buyer. Upon
request by the Seller, Buyer will undertake, at its own cost and
expense, the defense of any such action which may be brought
against the Seller.
8. LIMITED EXPRESS WARRANTY AND DISCLAIMER OF IMPLIED
WARRANTIES. Seller agrees to make available to Buyer the
benefits of warranties provided by Seller's suppliers subject to
the applicable limitations thereof and to the terms and
conditions thereof being fulfilled by Buyer. Seller's goods are
sold AS IS, and no employee, agent, or other person is authorized
to give any warranties on behalf of Seller in addition to or
different from those herein given or to assume for seller any
other liability in connection with any of its goods. Upon
receipt of written notice from Buyer within one year of the
installation of any of the Systems of any deficiency in the
services rendered by Seller in connection therewith which is
resulting in a malfunction in such System, Seller shall provide
such additional services of the same type as the services
originally provided by Seller in connection with the installation
of such System to repair or otherwise correct the deficiency.
<PAGE>
THIS WARRANTY IS MADE ONLY TO BUYER AND IS IN LIEU OF
ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR PURPOSE OR OTHER
WARRANTIES, EXPRESS OR IMPLIED OR BASED ON USAGE OR TRADE.
CORRECTION OF NON CONFORMITIES, IN THE MANNER AND SUBJECT TO THE
NOTIFICATION PERIODS PROVIDED ABOVE, SHALL CONSTITUTE FULFILLMENT
OF ALL LIABILITIES OF SELLER WHETHER BASED ON CONTRACT, STATUTE,
COMMON LAW, COMITY, COMMERCIAL USAGE OR OTHERWISE. SELLER SHALL
NOT BE LIABLE FOR SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
THE REMEDIES SET FORTH HEREIN ARE EXCLUSIVE AND SHALL NOT UNDER
ANY CIRCUMSTANCES EXCEED THE PRICE OF THE GOODS ON WHICH SUCH
LIABILITY IS BASED PLUS TRANSPORTATION CHARGES.
9. TECHNICAL ADVICE. Notwithstanding any past or
future practice, dealings or custom of trade, Seller in no way
warrants or otherwise guarantees any technical advice,
recommendations or opinions furnished to Buyer. Buyer shall
evaluate all such advice, recommendations or opinions and may
follow such advice, recommendations or opinions only at its sole
risk.
10. INDEMNIFICATION. Buyer agrees to indemnify Seller
and hold Seller harmless from any damages or losses to any party
or property whatsoever arising out of the use or operation of
goods furnished or sold to Buyer. Said indemnity shall include,
but is not limited to, any claims for commercial loss, personal
injury and property damage.
11. MERGER AND MODIFICATION. These Terms and
Conditions of Sale contain the entire understanding and agreement
between Buyer and Seller and supersede any prior written or oral
understandings or agreements respecting the subject of these
terms and conditions. It is expressly agreed that these Terms
and Conditions of Sale shall supersede any prior written forms of
Buyer. These terms and conditions may not be altered, modified
or waived except by a writing signed by both Buyer and Seller.
12. REPLACEMENT PARTS. Seller shall have no duty to
stock or continue the assembly and distribution of any goods and
may modify or discontinue any goods at any time.
EXHIBIT 10.13
FINANCING AGREEMENT
THIS FINANCING AGREEMENT ("Agreement") is made this 20th day
of April, 1995, by and among LINEAR MODULATION TECHNOLOGY
LIMITED, an English limited company ("Lender") having its
registered office at Sutton Park House, 15 Carshalton Road,
Sutton, Surrey SM1 4LD, England (telecopier number: 44-81-770-1145), ROAMER ONE,
INC., a Delaware corporation ("Borrower") having its principal place of
business at 19401 South Vermont Avenue, Suite A-205, Torrance, California
90502, U.S.A. (telecopier number: 310-366-7712), INTEK DIVERSIFIED CORPORATION,
a Delaware corporation and the corporate parent of Borrower
("Intek") having its principal place of business at 5800 West
Jefferson Boulevard, Los Angeles, California 90016, U.S.A.
(telecopier number: 310-837-0845), SIMMONDS COMMUNICATIONS
LIMITED, an Ontario corporation ("SCL") having its principal
place of business at 5255 Yonge Street, Suite 1050, Willowdale,
Ontario M2N 6P4, Canada (telecopier number: 416-221-3800), and,
solely with respect to Section 10(e)(i) hereof, ROAMER ONE
HOLDINGS, INC., a Delaware corporation ("ROH") having its
principal place of business at 1431 West 117th Street, Cleveland,
Ohio 44107, U.S.A. (telecopier number: 310-821-1680).
WHEREAS, Lender has agreed to supply SCL with Securicor LM
220 MHz 5 Channel trunked radio systems ("Base Stations") and
Securicor LM 3115 220 MHz mobile radios ("Mobile Radios")
pursuant to an Equipment Sale Agreement between Lender and SCL of
even date herewith (the "Securicor Supply Agreement");
WHEREAS, SCL has agreed to supply Borrower with two hundred
(200) Base Stations and three thousand six hundred (3,600) Mobile
Radios (collectively, "Systems") pursuant to an Equipment Sale
Agreement between SCL and Borrower (the "Roamer Supply
Agreement");
WHEREAS, SCL has assigned to Borrower, and Borrower has
assumed from SCL, all of SCL's rights and obligations under the
Securicor Supply Agreement pursuant to that certain Assignment
Agreement among SCL, Borrower and Intek of even date herewith
(the "Assignment"); and
WHEREAS, Lender desires to finance a portion of Borrower's
purchase of the Systems on the terms and conditions set forth
below;
NOW, THEREFORE, in consideration of the premises described
above and of other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
1. EXTENSION OF CREDIT. Lender shall, on the terms and
subject to the conditions hereinafter set forth, finance the
purchase by Borrower of Systems having an aggregate purchase
price of U.S. $6,838,000 (the "Financed Amount") under the
Securicor Supply Agreement. Thereafter, Borrower shall pay the
U.S. $1,660,000, or such lesser amount as may be agreed to by
Borrower and Lender, purchase price of the remaining Base
Stations and/or Mobile Radios on Lender's normal trade terms,
which are net sixty (60) days.
2. PURPOSE OF FINANCING. Borrower has entered into
certain management and option agreements with the holders of
licenses (the "Licenses") issued by the U.S. Federal
<PAGE>
Communications Commission ("FCC") to install and operate Systems.
The purpose of this Agreement is to finance the purchase by
Borrower of some of the Systems to be installed and operated in
certain of the market areas designated in the Licenses.
3. REPAYMENT TERMS. The terms of Lender's extension of
credit to Borrower hereunder are as follows:
(a) AGREEMENT TO REPAY. Borrower agrees to repay, and
pay interest on, the Financed Amount on the terms and subject to
the conditions set forth below and to pay all other amounts due
relative to the collection and enforcement of the Financing
Documents (as hereafter defined).
(b) REPAYMENT. Payments of the Financed Amount and
interest thereon shall be due and payable as follows:
(i) Upon the issuance to Lender (or its designee)
of the Shares (as hereinafter defined) described in
Section 10(c)(i) hereof, a portion of the Financed
Amount equal to the aggregate market value (as
determined in accordance with Section 10(b) hereof) of
such Shares shall be fully discharged and satisfied.
(ii) Upon the issuance to Lender (or its designee)
of the balance of the Shares pursuant to Section
10(c)(ii) hereof, an additional portion of the Financed
Amount equal to the aggregate market value (as
determined in accordance with Section 10(b) hereof) of
such Shares shall be fully discharged and
satisfied.
(iii) Borrower shall pay to Lender the U.S.
$2,838,000 principal balance of the Financed Amount,
plus U.S. $162,000 in interest (the "Interest"), in
four (4) installments due on the four (4) draw dates
specified in the Letters of Credit (as hereinafter
defined). Each of the installments shall be in the
amount of one quarter (1/4) of the outstanding
principal balance of the Financed Amount plus one
quarter (1/4) of the Interest.
(c) NO INTEREST. Except as otherwise provided in
Sections 3(b)(ii) and 3(e)(ii) hereof, Borrower shall not be
required to pay interest to Lender on the Financed Amount.
(d) PREPAYMENT. The Financed Amount and any interest
thereon may be prepaid, in whole, or in part, at any time and
from time to time, without penalty.
(e) SECURITY.
(i) Intek shall guarantee the performance of all
obligations of Borrower under this Agreement by
executing and delivering to Lender a guaranty in
substantially the form of EXHIBIT B attached hereto
(the "Guaranty").
(ii) Payment of that portion of the Financed
Amount, and interest thereon, to be repaid under
Section 3(b)(iii) hereof shall be secured by four (4)
irrevocable commercial letters of credit (each in the
amount of U.S. $750,000) in the aggregate amount
<PAGE>
of U.S. $3,000,000 naming Lender as the beneficiary
thereof (together, the "Letters of Credit") and
reflecting all of the terms and conditions set forth in
the draft application forms attached hereto as
EXHIBIT C (unless otherwise agreed between Borrower and
Lender). The Letters of Credit shall be issued by a
reputable financial institution (the "Bank") mutually
agreed to by Borrower and Lender, acting reasonably,
and shall be in a form reasonably satisfactory to
Lender, which form shall adhere to the Uniform Customs
and Practice for Documentary Credits, 1993 Revision,
International Chamber of Commerce ("ICC") Publication
No. 500, or such subsequent revision thereof adopted by
the ICC as in effect on the date the Letters of Credit
are delivered to Lender. Borrower shall deliver the
Letters of Credit to Lender by the later to occur of
(A) the delivery by Lender to Borrower (or its
designee) of Base Stations having an aggregate purchase
price of U.S. $2,906,150 under the Securicor Supply
Agreement and two thousand (2,000) Mobile Radios having
an aggregate purchase price of U.S. $1,100,000 under
the Securicor Supply Agreement in accordance with the
delivery schedule attached as EXHIBIT A hereto, or (B)
June 30, 1995. Each of the Letters of Credit shall
be payable over a separate three (3) month period and
shall provide that Lender shall have the right to draw
against such Letter of Credit, in accordance with the
terms of and conditions of such Letter of Credit, no
sooner than ninety (90) days after the submission by
Lender to the Bank of documentary evidence of shipment
by Lender to Borrower (or its designee) of Base
Stations and/or Mobile Radios having an aggregate
purchase price of U.S. $709,500 under the Securicor
Supply Agreement (excluding the initial U.S. $4,000,000
of Base Stations and Mobile Radios delivered to
Borrower in payment for the Shares pursuant to
Section 10 hereof and, with respect to the second,
third and fourth Letters of Credit, excluding the Base
Stations and/or Mobile Radios whose shipment was
documented in support of payment of any preceding
Letter of Credit). Borrower shall bear all expenses
associated with the Letters of Credit, including all
charges and fees of the Bank.
(f) ACCEPTANCE OF CERTAIN DELIVERIES. As of the date
of this Agreement, Borrower (or its designee) has accepted
delivery of twenty-seven (27) Base Stations and sixty-two (62)
Mobile Radios. Borrower (or its designee) shall use its best
efforts to complete all actions necessary to accept delivery of
forty (40) additional Base Stations within ten (10) days after
the date of this Agreement.
4. TERM OF AGREEMENT; SURVIVAL. This Agreement shall be
effective until all of the Liabilities (as defined below) shall
have been fully paid and satisfied and all financing arrangements
between Borrower and Lender shall have been terminated. Until
such time, the representations and warranties of Borrower set
forth in Section 6 hereof and all of Lender's rights and remedies
under this Agreement shall survive. Notwithstanding the
foregoing, the representations and warranties of Intek set forth
in Section 10(f) hereof shall survive until the sooner to occur
of (i) the date Lender (or its designee) ceases to own any of the
Shares, or (ii) the second anniversary of the date of this
Agreement.
5. CONDITIONS PRECEDENT TO FINANCING. The obligation of
Lender to extend credit to Borrower hereunder is subject to the
condition precedent that Lender shall have received, concurrently
with the execution hereof, (i) the Guaranty, executed by a duly
authorized officer of Intek, and (ii) an officer's certificate,
in substantially the form of EXHIBIT D attached hereto, executed
by a duly authorized officer of Borrower.
PAGE
<PAGE>
6. LEGAL OPINION. Intek's counsel shall deliver to Lender
a legal opinion in form and substance reasonably satisfactory to
Lender's counsel by no later than April 21, 1995.
7. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower
represents and warrants to Lender as follows, which
representations and warranties shall continue to be true so long
as any of Borrower's liabilities, obligations and indebtedness to
Lender (collectively, "Liabilities") arising from this Agreement,
the Roamer Supply Agreement, the Assignment, the Letters of
Credit or any documents executed pursuant thereto or in
connection therewith (collectively, the "Financing Documents")
shall remain unpaid:
(a) Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, and has full corporate power and authority to conduct
its business as now conducted, and to own, lease and operate its
properties. Borrower has full corporate power and authority to
enter into and perform the Financing Documents to which Borrower
is a party. The officers of Borrower executing and delivering
the Financing Documents to which Borrower is a party have full
corporate power and authority to do so and to carry out the
transactions contemplated thereby. Borrower is qualified to do
business and is in good standing in each jurisdiction in which
the nature of its business or the properties owned or leased by
it requires such qualification, except where the failure to be so
qualified and in good standing would not have a material adverse
effect on Borrower's property or business.
(b) The execution, delivery and performance of this
Agreement and of the other Financing Documents to which Borrower
is a party have been duly authorized by all necessary corporate
action of Borrower, and this Agreement and the other Financing
Documents to which Borrower is a party constitute the valid and
legally binding obligations of Borrower, enforceable against it
in accordance with their respective terms.
(c) The copies of the Certificate of Incorporation and
Bylaws of Borrower, each as amended to date and as presently in
effect, that have been delivered to Lender are true, correct and
complete as of the date of this Agreement.
(d) The execution, delivery and performance by
Borrower of the Financing Documents to which it is a party will
not: (i) violate or conflict with the Certificate of
Incorporation or Bylaws of Borrower; or (ii) conflict with,
result in the breach or termination or acceleration of, or
constitute a default under, any lease, mortgage, trust,
indenture, deed, note, agreement, commitment or other instrument
to which Borrower is a party, or by which Borrower or any of its
properties are bound.
(e) No authorization, approval, consent or other
action by, and no notice to or filing with, any governmental
authority, regulatory body or any other person is required for
the execution, delivery and performance by Borrower of this
Agreement and the other Financing Documents to which it is a
party.
(f) Borrower is not in violation of any federal, state
or local law, statute, ordinance, regulation or any writ,
judgment, injunction, decree, decision or order of any court or
governmental agency, the noncompliance with which would have a
materially adverse effect on
<PAGE>
Borrower, and Borrower has not received any notice of claimed
noncompliance and has no knowledge of any claimed noncompliance.
(g) There is no litigation, proceeding or governmental
investigation pending or, to Borrower's knowledge, threatened
(including, without limitation, any matters before any court,
governmental agency or arbitrator), or any order, decree or
injunction outstanding, that may have a materially adverse effect
on Borrower.
8. AFFIRMATIVE COVENANTS OF BORROWER. So long as any of
the Liabilities shall remain unpaid, Borrower shall:
(a) Maintain the corporate existence of Borrower and
its qualification and good standing in all states in which such
qualification and good standing are necessary in order for the
Borrower to conduct business and own property as conducted and
owned in such states.
(b) Comply in all material respects with all
applicable governmental laws, rules, regulations and orders; such
compliance to include, without limitation, paying before the same
become delinquent all taxes, assessments and governmental charges
imposed upon it or upon its property except to the extent
contested in good faith.
(c) Furnish to Lender:
(i) as soon as available and in any event within
sixty (60) days after the end of each fiscal quarter,
or in the case of the end of Borrower's fiscal year one
hundred twenty (120) days, financial statements of
Borrower as of the end of such fiscal quarter;
(ii) as soon as possible, and in any event within
five (5) Business Days (any day other than a Saturday,
Sunday or public holiday being referred to herein as a
"Business Day") after the occurrence of any Event of
Default, a specific description of the nature and
period of existence thereof and the action Borrower has
taken and proposes to take with respect thereto; and
(iii) such other information respecting the
condition or operations, financial or otherwise, of
Borrower as Lender may from time to time reasonably
request.
(d) Permit Lender or any person designated by Lender
in writing to call, from time to time, without hindrance or
delay, at Borrower's place of business during usual business
hours to inspect, audit, check and make copies of the extracts
from its books, records, journals, orders, receipts and any
correspondence and other data relating to their financial
dealings, business or to any transactions between the parties
hereto with respect to the Systems, subject to the provisions of
that certain confidentiality agreement between Intek and Lender
dated March 24, 1995. In exercising its rights hereunder, Lender
shall not unreasonably disrupt or interfere with Borrower's
conduct of business.
<PAGE>
9. NEGATIVE COVENANTS OF BORROWER. So long as any of the
Liabilities shall remain unpaid, Borrower shall not, without the
prior written consent of Lender:
(a) Sell, assign, lease or otherwise dispose of all or
substantially all of any of Borrower's assets; or enter into any
transaction of merger, reorganization or consolidation, or wind
up, liquidate or dissolve or enter into any other transactions
(except for a pro forma transaction in which the ultimate owners
of Borrower remain unchanged) which would require approval of the
FCC (all such transactions being referred to hereinafter
individually and collectively as a "Change of Control
Transaction"), or agree to a Change of Control Transaction, other
than the proposed merger transaction between Intek and the
wireless communications business of Midland International Corp.,
a Delaware corporation, and the SCL Systems Division of SCL (the
"Proposed Merger").
(b) Enter into any agreement, contract or arrangement
that would materially and adversely alter its right or ability to
carry on its business with respect to the Licenses.
(c) Enter into any agreement, contract or arrangement
that would materially and adversely effect its ability to perform
its obligations to Lender under the Financing Documents to which
it is a party.
10. PURCHASE AND SALE OF INTEK COMMON STOCK.
(a) In connection with the execution of this
Agreement, Lender (or such other affiliate of Securicor Group
plc, an English limited company, as may be designated by Lender)
has executed and delivered to Intek a subscription agreement in
substantially the form of EXHIBIT E attached hereto (the
"Subscription Agreement"), pursuant to which it has agreed to
subscribe for, and invest by means of the forgiveness and
conversion of a portion of the Financed Amount equal to U.S.
$4,000,000 in shares of the common stock, par value $0.01 per
share, of Intek ("Common Stock"), at the price determined in
accordance with Section 10(b) hereof, and as of the dates
determined in accordance with Section 10(c) hereof (the shares of
Common Stock to be purchased hereunder being hereinafter
collectively referred to as the "Shares").
(b) The market value of the Shares shall be determined
by the average of the closing bid and asked prices for the Common
Stock from the National Association of Securities Dealers
Automated Quotation System small-capitalization market for the
last ten (10) days on which any trading in the Common Stock
occurred immediately prior to either (i) March 22, 1995, or
(ii) the date of execution and delivery of this Agreement by all
parties hereto, whichever results in the lower market value.
(c) On the date: (i) of execution of a definitive
acquisition agreement relating to the Proposed Merger on terms
substantially as set forth in that certain letter of intent,
dated March 20, 1995, between SCL and Intek (the "Merger
Agreement") by all parties thereto, Intek shall issue Shares to
Lender (or its designee) having an aggregate market value (as
determined pursuant to Section 10(b) hereof) equal to the
aggregate purchase price of the Systems delivered to Borrower (or
its designee) as of the date of execution of the Merger
Agreement; and (ii) that Lender completes delivery to Borrower
(or its designee) of Base Stations having an aggregate purchase
price of U.S. $2,906,150 under the Securicor Supply Agreement and
two thousand (2,000) Mobile Radios having
PAGE
<PAGE>
an aggregate purchase price of U.S. $1,100,000 under the
Securicor Supply Agreement in accordance with the delivery
schedule attached as EXHIBIT A hereto, Intek shall issue the
balance, if any, of the Shares purchased hereunder to Lender (or
its designee). Intek shall use its best efforts to cause its
transfer agent to deliver the Shares to Lender (or its designee)
within five (5) Business Days after the dates that the Shares are
to be issued under this Section 10(c); provided, however, that
Intek shall cause the Shares to be delivered to Lender (or its
designee) no later than ten (10) Business Days after such dates.
In addition, Intek shall deliver a valid and binding Registration
Rights Amendment (as defined in the Subscription Agreement) to
Lender (or its designee) within ten (10) Business Days after the
date of issuance of the Shares referred to in Section 10(c)(i)
hereof.
(d) Unless the Merger Agreement has been fully
executed and the Shares have been delivered to Lender (or its
designee) pursuant to Section 10(c) hereof by August 15, 1995,
then Borrower shall on that date pay U.S. $4,000,000 (or such
lesser amount as shall then be owing by Borrower to Lender as
determined by the value of the Base Stations and Mobile Radios
then delivered to Borrower (or its designee) pursuant to EXHIBIT
A hereto) to Lender in immediately available funds wired to an
account designated at least five (5) days in advance by Lender.
In the event that Borrower fails to make all or any portion of
that payment by August 31, 1995, then SCL shall on that date pay
U.S. $4,000,000 (or such lesser amount as shall then be owing by
Borrower to Lender) to Lender in immediately available funds
wired to an account designated at least five (5) days in advance
by Lender. Borrower agrees to repay the amount, if any, paid by
SCL to Lender under this Section 10(d) upon demand by SCL and to
secure its repayment obligation by granting a security interest
to SCL in the Base Stations and the management agreements related
thereto. In the event that Borrower or SCL makes the payment in
full called for by this Section 10(d): (i) a portion of the
Financed Amount equal to U.S. $4,000,000 shall be fully
discharged and satisfied; (ii) SCL shall have no further
obligations to Lender under this Agreement; and (iii) the
Subscription Agreement shall be terminated and neither Intek nor
Lender shall have any further obligations thereunder.
(e) In the event that the Shares are issued by Intek
to Lender pursuant to this Section 10 but the Proposed Merger is
not consummated by September 30, 1995, then:
(i) Intek, SCL and ROH shall elect or appoint, or
cause the election or appointment, of a person
designated by Lender ("Lender's Designee") to the Board
of Directors of Intek (the "Board") and to the
Executive Committee of the Board. Intek shall
take all necessary action to ensure that Lender's
Designee shall be elected or appointed to, and remains
on, the Board and the Executive Committee. Intek shall
pay all expenses reasonably incurred by Lender's
Designee in carrying out his or her duties as a
director of Intek and shall maintain directors'
insurance with respect to Lender's Designee in an
amount satisfactory to Lender.
(ii) Intek shall allow Lender access to the books
and records of Intek at Intek's place of business
during usual business hours, subject to the provisions
of that certain confidentiality agreement between Intek
and Lender dated March 24, 1995. In exercising its
rights hereunder, Lender shall not unreasonably disrupt
or interfere with Intek's conduct of business.
(iii) Intek shall not, without the advance
written consent of Lender, purchase, redeem, retire or
otherwise acquire any outstanding shares of any class
of
<PAGE>
its capital stock other than (A) on a pro-rata basis
among all of the holders of such class of capital
stock, or (B) as required by any of Intek's stock
option plans.
(iv) Intek shall not, without the advance written
consent of Lender, enter into any transaction or
arrangement with any person or entity that controls, is
controlled by or is under common control with Intek (an
"Affiliate") except in the ordinary course of and
pursuant to the reasonable requirements of the business
of Intek and upon fair and reasonable terms no less
favorable to Intek than it would obtain in a comparable
arm's length transaction with a person or entity other
than an Affiliate.
All rights conferred on Lender under this Section 10(e) shall
terminate upon the later to occur of (A) such date as the
Financed Amount and Interest have been paid in full, and (B) such
date as Lender (or its designee) ceases to own the Shares;
provided, however, that such rights shall sooner terminate in the
event that the Proposed Merger is consummated in accordance with
the Merger Agreement. In the event of the such termination,
Lender shall cause Lender's Designee to immediately resign from
the Board and the Executive Committee.
(f) Intek hereby represents and warrants to Lender as
follows as of the date of this Agreement:
(i) The Shares have been duly authorized. Upon
payment for, and the issuance of, the Shares from time
to time in accordance with the terms and conditions of
this Agreement, the Shares will be validly issued,
fully paid, nonassessable by Intek and free and clear
of all liens, charges, claims and encumbrances other
than as contemplated by this Agreement.
(ii) Intek is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Delaware, and has full corporate power and
authority to conduct its business as now conducted, and
to own, lease and operate its properties. Intek has
full corporate power and authority to enter into and
perform this Agreement, the Guaranty, the Subscription
Agreement and the Registration Rights Amendment (as
defined in the Subscription Agreement), and any
documents executed by it pursuant thereto or in
connection therewith (collectively, the "Intek
Documents"). The officers of Intek executing and
delivering the Intek Documents have full corporate
power and authority to do so and to carry out the
transactions contemplated thereby. Intek is qualified
to do business and is in good standing in each
jurisdiction in which the nature of its business or the
properties owned or leased by it requires such
qualification, except where the failure to be so
qualified and in good standing would not have a
material adverse effect on Intek's property or
business.
(iii) The execution, delivery and performance
of this Agreement and of the other Intek Documents have
been duly authorized by all necessary corporate action
of Intek, and this Agreement and the other Intek
Documents constitute the valid and legally binding
obligations of Intek, enforceable against it in
accordance with their respective terms.
<PAGE>
(iv) The copies of the Certificate of
Incorporation and Bylaws of Intek, each as amended to
date and as presently in effect, that have been
delivered to Lender are true, correct and complete.
(v) The execution, delivery and performance by
Intek of the Intek Documents will not: (A) violate or
conflict with the Certificate of Incorporation or
Bylaws of Intek; or (B) conflict with, result in the
breach or termination or acceleration of, or constitute
a default under, any lease, mortgage, trust, indenture,
deed, note, agreement, commitment or other instrument
to which Intek is a party, or by which Intek or any of
its properties are bound.
(vi) No authorization, approval, consent or other
action by, and no notice to or filing with, any
governmental authority, regulatory body or any other
person is required for the execution, delivery and
performance by Intek of this Agreement and the other
Intek Documents.
(vii) Intek is not in violation of any
federal, state or local law, statute, ordinance,
regulation or any writ, judgment, injunction, decree,
decision or order of any court or governmental agency,
the noncompliance with which would have a materially
adverse effect on Intek, and Intek has not received any
notice of claimed noncompliance and has no knowledge of
any claimed noncompliance.
(viii) There is no litigation, proceeding or
governmental investigation pending or, to Intek's
knowledge, threatened (including, without limitation,
any matters before any court, governmental agency or
arbitrator), or any order, decree or injunction
outstanding, that may have a materially adverse effect
on Intek.
(ix) Since September 23, 1994, Intek has filed all
reports and other documents as required under the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"). After the date hereof, Intek will use
its best efforts to timely file all reports and other
documents required to be filed by it under applicable
federal and state securities laws and regulations,
including the Exchange Act. Such reports and
documents, as of their respective dates, will not
contain any untrue statement of material fact or omit
to state any material fact required to be stated
therein necessary in order to make the statements
therein, in light of the circumstances under which they
were made, not misleading.
(x) The authorized capital stock of Intek
consists of 20,000,000 shares of Common Stock. As of
March 31, 1995, the only shares of capital stock of
Intek issued and outstanding, reserved for issuance or
committed to be issued (other than shares reserved for
issuance under any employee or director benefit plan)
were 9,382,831 shares of Common Stock. There are no
statutory or contractual preemptive rights of first
refusal with respect to (A) the issuance of the Shares
hereunder, or (B) the issuance of any other shares of
capital stock or securities of Intek.
<PAGE>
(xi) Except as permitted or contemplated by this
Agreement, except for the disposition of substantially
all the assets of Olympic Plastics Company, Inc., a
California corporation that is a wholly-owned
subsidiary of Intek, and except for the extension of
credit to Intek by Quest Capital Corp., a British
Columbia corporation f.k.a. Noramco Mining Corporation,
there has not, since September 30, 1994, been any
(A) material adverse change in Intek's assets,
liabilities, business, financial condition, operations
or results of operations, or (B) occurrence, event,
incident, action, failure to act or transaction outside
the ordinary course of business involving Intek which
would have a material adverse effect on Intek.
(xii) Intek will not take any action that
would materially and adversely affect its ability to
perform its obligations to Lender under the Intek
Documents.
11. EVENTS OF DEFAULT AND REMEDIES.
(a) EVENTS OF DEFAULT. If any of the following events
(each, an "Event of Default") shall occur and be continuing:
(i) Borrower shall fail to make any payment of
principal or interest when due and payable hereunder;
(ii) Any representation or warranty made by
Borrower herein or in any Financing Document, or by
Intek herein or in any Intek Document, shall prove to
have been incorrect or untrue in any material respect;
(iii) Borrower: (A) generally fails to pay or
admits in writing its inability to pay, its debts as
they mature; (B) applies for or consents to or
acquiesces in the appointment of a trustee, receiver or
other custodian for Borrower for a substantial part of
the property of Borrower; or (C) makes a general
assignment for the benefit of creditors;
(iv) Any of the following events for sixty (60)
days unless dismissed, bonded or discharged: (A) a
trustee, receiver or other custodian is appointed for
Borrower, or for a substantial part of the property of
Borrower; or (B) any bankruptcy, reorganization, debt
arrangement or other proceeding under any bankruptcy or
insolvency law, or any dissolution or liquidation
proceeding, is instituted by or against Borrower or any
warrant of attachment or similar legal process is
issued against any substantial part of the property of
Borrower;
(v) Borrower shall fail to perform or observe any
term, covenant, condition or agreement contained in
this Agreement or any other Financing Document, which
failure shall continue for thirty (30) days after
receipt of written notice by Borrower from Lender;
(vi) Intek shall fail to perform or observe any
term, covenant, condition or agreement to be performed
by it under this Agreement, the
<PAGE>
Guaranty, the Subscription Agreement or the
egistration Rights Agreement, which failure shall
continue for thirty (30) days after receipt of written
notice by Intek from Lender;
(vii) SCL or ROH shall fail to perform or
observe any term, covenant, condition or agreement to
be performed by it under this Agreement, which failure
shall continue for thirty (30) days after receipt of
written notice by SCL or ROH, as the case may be, from
Lender; or
(viii) Borrower shall consummate any contract,
agreement or understanding, whether oral or written,
for a Change of Control Transaction (other than the
Proposed Merger) without Lender's prior written consent
thereto;
then in any such Event of Default (and following written notice
of default if required by the applicable Event of Default) which
is not cured within any grace period specified herein, Lender may
declare the entire amount of principal and interest due hereunder
immediately due and payable and may exercise any rights and
remedies available to it under any of the Financing Documents or
applicable law. Notwithstanding any other provisions herein, to
the extent that the rules, regulations and policies of the FCC
apply to any transactions contemplated under this Agreement,
Lender and Borrower shall comply with such rules, regulations and
policies.
(b) REMEDIES CUMULATIVE. If an Event of Default shall
have occurred, Lender, in addition to each right, power and
remedy of Lender provided in the Financing Documents, may under-
take appropriate judicial proceedings or may proceed with any
other right or remedy existing at law or in equity or by statute
or otherwise. Each right, power and remedy of Lender provided
for in the Financing Documents or now or hereafter existing at
law or in equity or by statute or otherwise, shall be cumulative
and concurrent and shall be in addition to every other right,
power or remedy provided for herein, or now or hereafter existing
at law or in equity or by statute or otherwise, and the exercise
or beginning of the exercise or partial exercise by Lender of any
one or more of such rights, powers or remedies shall not preclude
the simultaneous or later exercise by Lender of any or all such
other rights, powers or remedies.
12. SPECIFIC PERFORMANCE. Each party hereto agrees and
acknowledges that, in the event of a material breach of this
Agreement, the non-defaulting parties would be irreparably
damaged thereby, which damage could not be adequately compensated
except by specific performance by the defaulting party. In the
event that such a material breach occurs or is threatened, it is
agreed that any non-defaulting party shall be entitled to
temporary and permanent injunctive relief, including, without
limitation, specific performance of this Agreement, without any
showing of actual damage or inadequacy of legal remedy in any
proceeding which may be brought to enforce this Agreement.
13. NO PUBLICITY. No notices to third parties or other
publicity, including press releases, concerning any of the
transactions provided for herein shall be made by any party
hereto unless planned and coordinated jointly among the parties
hereto, except to the extent otherwise required by law.
<PAGE>
14. EXPENSES. Each party shall each pay its own expenses,
including, without limitation, the expenses of its counsel,
investment bankers and accountants, incurred in connection with
the preparation, execution and delivery of this Agreement and the
other agreements and documents referred to herein and the
consummation of the transactions contemplated hereby and thereby.
15. NOTICES. All notices and other communications provided
for hereunder shall be in writing and shall be mailed, telecopied
or personally delivered, in each event to the address or
telecopier number of the addressee set forth above, or at such
other address or telecopier number as shall be designated by any
party in a written notice to the other party. All such notices
and communications shall: (i) if mailed, be effective seven (7)
days after deposit into the U.S. or English mail with
international air mail postage prepaid; (ii) if telecopied, be
effective upon facsimile transmission with confirmation thereof;
or (iii) if personally delivered, be effective upon delivery
thereof.
16. INTERPRETATION. Whenever possible each provision of
this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement;
provided, however, that if the rendering of any such provision as
ineffective shall alter the commercial basis of this Agreement,
the parties shall renegotiate this Agreement.
17. ASSIGNMENT. Lender may assign its rights and
obligations under this Agreement to an affiliate of Lender. Any
such assignee of Lender shall have all of the rights, powers,
privileges and remedies of Lender hereunder.
18. AMENDMENT. No amendment of this Agreement of shall be
effective unless the same shall be in writing and signed by all
parties hereto.
19. GOVERNING LAW. This Agreement shall be governed by the
laws of the State of Delaware, excluding any choice of law rules
which may direct the application of the laws of another
jurisdiction.
20. HEADINGS. The headings of the Sections of this
Agreement are inserted for convenience of reference only and
shall not constitute a part hereof.
21. ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement of the parties hereto, and supersedes all prior
agreements and understandings between them, regarding the subject
matter hereof.
22. COUNTERPARTS. This Agreement may be executed and
delivered in any number of counterparts, each of which when so
executed and delivered shall constitute an original, and all of
which together shall constitute one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
LINEAR MODULATION TECHNOLOGY
LIMITED
By:/s/ M. Wilkinson
Its: Director
ROAMER ONE, INC.
By:/s/ David Neibert
Its: President
INTEK DIVERSIFIED CORPORATION
By:/s/ Nicholas R. Wilson
Its: Chairman
SIMMONDS COMMUNICATIONS LIMITED
By:/s/ John G. Simmonds
Its: Chief Executive Officer
WITH RESPECT TO SECTION 10(e)(i)
ONLY:
ROAMER ONE HOLDINGS, INC.
By:/s/ Nicholas R. Wilson
Its: President
EXHIBIT 10.14
GUARANTY
THIS GUARANTY ("Guaranty") is executed and delivered this
20th day of April, 1995, by INTEK DIVERSIFIED CORPORATION, a
Delaware corporation ("Guarantor"), for the benefit of LINEAR
MODULATION TECHNOLOGY LIMITED, an English limited company
("LMT"), its successors and assigns and, to the extent provided
in Section 1 hereof, SIMMONDS COMMUNICATIONS LIMITED, an Ontario
corporation ("SCL").
WHEREAS, LMT has agreed to supply SCL with Securicor LM 220
MHz 5 Channel trunked radio systems ("Base Stations") and
Securicor LM 3115 220 MHz mobile radios ("Mobile Radios")
pursuant to an Equipment Sale Agreement between Lender and SCL of
even date herewith (the "Securicor Supply Agreement");
WHEREAS, SCL has agreed to supply Roamer One, Inc., a
Delaware corporation and a wholly-owned subsidiary of Guarantor
("Roamer"), with two hundred (200) Base Stations and three
thousand six hundred (3,600) Mobile Radios (collectively, the
"Systems") pursuant to an Equipment Sale Agreement between SCL
and Roamer (the "Roamer Supply Agreement");
WHEREAS, SCL has assigned to Roamer, and Roamer has assumed
from SCL, all of SCL's obligations to purchase the Systems from
LMT pursuant to that certain Assignment Agreement between SCL and
Roamer of even date herewith (the "Assignment"); and
WHEREAS, pursuant to a Financing Agreement among Roamer,
LMT, Guarantor, SCL and Roamer One Holdings, Inc. of even date
herewith (the "Financing Agreement"), LMT has agreed to finance
the purchase of the Systems on the terms and conditions set forth
therein;
NOW, THEREFORE, as an inducement to, and in consideration
of, the execution by LMT of the Securicor Supply Agreement and
the Financing Agreement, and for other valuable consideration,
the receipt and sufficiency of which is hereby acknowledged,
Guarantor hereby agrees as follows:
1. GUARANTY. Guarantor hereby absolutely and
unconditionally guarantees to LMT, its successors and assigns
(and to SCL to the extent that SCL makes any payment to LMT under
Section 10(d) of the Financing Agreement): (i) the full and
prompt payment of all payments to be made by Roamer to LMT of all
amounts payable under the Financing Agreement; (ii) the full and
prompt performance of all other obligations of Roamer under the
Financing Agreement; and (iii) the full and prompt performance of
all obligations of Roamer under the Financing Agreement. It
shall not be necessary for LMT to resort to or exhaust its
remedies against Roamer.
2. DURATION. All obligations of Guarantor under this
Guaranty shall remain in full force and effect from the date
hereof until all amounts due to LMT under the Financing Agreement
and the Letters of Credit (as defined in the Financing Agreement)
shall have been paid in full (such period being hereinafter
referred to as the "Term").
3. WAIVERS. Guarantor expressly waives notice, in writing
or otherwise, of the acceptance hereof, waives demand of payment
and protest relative to the Financing Agreement, waives all
notices to which Guarantor may be entitled by applicable law, and
waives all defenses,
<PAGE>
legal or equitable, otherwise available to Guarantor; provided,
however, that Guarantor does not waive any defenses that would
otherwise be available to it in the event of any breach by LMT of
the Securicor Supply Agreement.
4. ASSIGNMENT. LMT may assign its rights under this
Guaranty. Any assignee of LMT shall have all of the rights,
powers, privileges and remedies of LMT hereunder.
5. APPLICABLE LAW. This Guaranty shall be governed by the
laws of the State of Delaware, excluding any choice of law rules
which may direct the application of the laws of another
jurisdiction.
IN WITNESS WHEREOF, Guarantor has executed and delivered
this Guaranty as of the date first hereinabove written.
"GUARANTOR"
INTEK DIVERSIFIED CORPORATION
By: /s/ Nicholas R. Wilson
Its: Chairman
<PAGE>
EXHIBIT 10.15
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT ("Agreement") is made this 20th day
of April, 1995, by and among SIMMONDS COMMUNICATIONS LIMITED, an
Ontario corporation ("SCL"), ROAMER ONE, INC., a Delaware
corporation ("Roamer"), INTEK DIVERSIFIED CORPORATION, a Delaware
corporation ("Intek"), and LINEAR MODULATION TECHNOLOGY LIMITED, an
English limited company ("LMT").
WHEREAS, LMT has agreed to supply SCL with Securicor LM 220
MHz 5 Channel trunked radio systems ("Base Stations") and Securicor
LM 3115 220 MHz mobile radios ("Mobile Radios") pursuant to an
Equipment Sale Agreement between LMT and SCL of even date herewith
(the "Securicor Supply Agreement");
WHEREAS, SCL has agreed to supply Roamer with two hundred
(200) Base Stations and three thousand six hundred (3,600) Mobile
Radios (collectively, the "Systems") pursuant to an Equipment Sale
Agreement between SCL and Roamer (the "Roamer Supply Agreement");
WHEREAS, pursuant to a Financing Agreement among LMT, Roamer,
Intek, SCL and Roamer One Holdings, Inc. of even date herewith (the
"Financing Agreement"), LMT has agreed to finance the purchase of
the Systems by Roamer on the terms and conditions set forth
therein;
WHEREAS, pursuant to and in order to induce SCL to enter into
the Securicor Supply Agreement, Roamer and Intek have agreed to
assume all of SCL's rights, duties and obligations under, and all
of SCL's interest in, the Securicor Supply Agreement; and
WHEREAS, SCL may not assign its rights, duties and obligations
under the Securicor Supply Agreement without the advance written
consent of LMT;
NOW, THEREFORE, in consideration of the premises described
above and of other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. ASSIGNMENT. SCL hereby assigns to Roamer and Intek, and
Roamer and Intek hereby assume, all of SCL's rights, duties and
obligations under, and all of SCL's interest in, the Securicor
Supply Agreement and any other documents executed and delivered by
SCL pursuant thereto or in connection therewith (collectively, the
"Supply Documents").
2. LIABILITY OF SCL. Roamer and Intek accept the foregoing
assignment of SCL's rights, duties and obligations under the Supply
Documents in full satisfaction of SCL's obligations to Roamer under
the Roamer Supply Agreement. SCL shall not be liable to Roamer or
Intek for any act done or step taken or omitted by SCL, or anything
SCL may do or refrain from doing, in connection with the Supply
Documents, and Roamer and Intek shall hold SCL and its directors,
officers, employees and agents harmless from and against any and
all damage, loss, liability, claim or deficiency incurred by SCL in
connection therewith.
3. NON-RECOURSE OBLIGATION. In any action or proceeding
relating to the Supply Documents and the transactions contemplated
thereby, Roamer and Intek shall be entitled to look for payment
<PAGE>
solely from LMT. Roamer and Intek hereby waive any right to seek
or obtain a deficiency judgment against SCL or any of SCL's
affiliates (other than Roamer and Intek), officers, directors,
employees, agents or representatives with respect to any default
under any of the Supply Documents. NOTHING IN THIS SECTION 3 SHALL
BE DEEMED TO BE A RELEASE OR IMPAIRMENT OF THE INDEBTEDNESS OF
ROAMER OR INTEK TO LMT.
4. DELIVERY. Concurrently with the execution of this
Agreement, SCL shall deliver to Roamer and Intek an executed
original copy of the Securicor Supply Agreement.
5. CONSENT OF LMT. LMT hereby consents to the assignment
and assumption described herein; provided that nothing in this
Agreement shall be deemed to be a release or impairment of the
obligation of SCL to LMT under the Securicor Supply Agreement until
either (i) Intek issues the Shares (as defined in the Financing
Agreement) to LMT or its designee in accordance with Section 10(c)
of the Financing Agreement, or (ii) the amount of U.S. $4,000,000
is paid to LMT in accordance with Section 10(d) of the Financing
Agreement.
6. OTHER ACTIONS. Upon the reasonable request of Roamer or
Intek, SCL covenants and agrees, for itself and its successors and
assigns, that it shall, at any time and from time to time, from and
after the date hereof, at its expense, do, execute and deliver, or
cause to be done, executed and delivered, all such further
reasonable acts and documents as may be required to make, file,
record or evidence the assignment contemplated herein.
7. GOVERNING LAW. This Agreement shall be governed by the
laws of the State of Delaware, excluding any choice of law rules
which may direct the application of the laws of another
jurisdiction.
8. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties, and supersedes all prior agreements and
understandings between them, regarding the subject matter hereof.
9. COUNTERPARTS. This Agreement may be executed and
delivered in any number of counterparts, each of which when so
executed and delivered shall constitute an original, and all of
which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed on the date first set forth above.
SIMMONDS COMMUNICATIONS LIMITED
By: /s/ John G. Simmonds
Its: CEO
<PAGE>
ROAMER ONE, INC.
By: /s/ David Neibert
Its: President
INTEK DIVERSIFIED CORPORATION
By: /s/ Nicholas Wilson
Its: Chairman
LINEAR MODULATION TECHNOLOGY
LIMITED
By: /s/ M. Wilkinson
Its: Director
EXHIBIT 10.16
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Security Agreement") is made this
20th day of April, 1995, by and between SIMMONDS COMMUNICATIONS
LIMITED, an Ontario corporation ("Secured Party") having its
principal place of business at 5255 Yonge Street, Suite 1050,
Willowdale, Ontario M2N 6P4, Canada, as the secured party, and
ROAMER ONE, INC., a Delaware corporation ("Debtor") having its
principal place of business at 19401 South Vermont Avenue, Suite
A-205, Torrance, California 90502, U.S.A., as the debtor.
WHEREAS, Linear Modulation Technology Limited, an English
limited company ("LMT"), has agreed to supply Secured Party with
Securicor LM 220 MHz 5 channel trunked radio systems ("Base
Stations") and Securicor LM 3115 220 MHz mobile radios pursuant
to an Equipment Sale Agreement between Secured Party and LMT of
even date herewith (the "Securicor Supply Agreement");
WHEREAS, Debtor, Secured Party, INTEK Diversified
Corporation ("Intek"), Roamer One Holdings, Inc. and LMT have
entered into a Financing Agreement of even date herewith (the
"Financing Agreement"), whereby LMT has agreed to finance the
purchase by Debtor from LMT of two hundred (200) Base Stations
having an aggregate purchase price of U.S. $4,000,000 under the
Securicor Supply Agreement, which Base Stations will be operated
in locations determined from time to time by Debtor;
WHEREAS, LMT is obligated to purchase certain shares of the
common stock of Intek upon the execution of a Merger Agreement
(as defined in the Financing Agreement) with respect to the
Proposed Merger (as defined in the Financing Agreement);
WHEREAS, to induce LMT to enter into the Financing
Agreement, Secured Party has agreed in Section 10(d) of the
Financing Agreement to pay LMT up to U.S. $4,000,000 on behalf of
Debtor in the event that the parties to the Proposed Merger do
not execute a Merger Agreement by June 30, 1995 and that Debtor
is unable to pay such amount to LMT; and
WHEREAS, Secured Party will not enter into the Financing
Agreement unless Debtor agrees to repay the amount, if any, to be
paid by Secured Party to LMT under Section 10(d) of the Financing
Agreement and to provide Secured Party with security for such
repayment obligation on the terms and conditions set forth below;
NOW, THEREFORE, as an inducement to and in consideration of
Secured Party's agreement to become a party to the Financing
Agreement and to pay up to U.S. $4,000,000 to LMT under Section
10(d) thereof, the sufficiency of which is hereby acknowledged,
and for the purpose of securing the obligation of Debtor to repay
the amount, if any, to be paid by Secured Party to LMT under
Section 10(d) of the Financing Agreement, Debtor and Secured
Party agree as follows, and, it is hereby covenanted that this
Security Agreement is given, and the Collateral (as hereinafter
defined) is to be held, in the manner and to the extent, and
applied subject to the further terms, herein set forth:
<PAGE>
1. PAYMENT OBLIGATIONS. Debtor hereby agrees to pay the
following amounts to Secured Party:
(a) One Million U.S. Dollars (U.S. $1,000,000) within three
(3) business days after the date of Agreement; plus
(b) an amount equal to (i) such amount as Secured Party may
pay to LMT under Section 10(d) of the Financing
Agreement, less (ii) the amount paid by Debtor to
Secured Party under clause (a) above, within three (3)
business days after receipt of written demand therefor
by Secured Party;
in accordance with the terms of a Secured Promissory Note in
favor of Secured Party in substantially the form of EXHIBIT A
attached hereto (the "Note"). Debtor shall pay the foregoing
amounts to Secured Party in accordance with the terms and
conditions set forth in the Note.
2. COLLATERAL. As security for the obligations of Debtor
under the Note, Debtor does hereby grant, convey, transfer and
assign unto Secured Party, and Secured Party's successors and
permitted assigns, all of Debtor's right, title and interest in
and unto the following property (collectively, the "Collateral"):
(a) all of the Base Stations acquired by Debtor, as
the assignee of Secured Party, under the Securicor Supply
Agreement (collectively, the "Secured Systems"), whether
currently complete, under construction or not yet constructed,
including all equipment relating thereto;
(b) all management agreements, including any related
option agreements, now existing or hereinafter entered into by
Debtor related to the Secured Systems, including, all extensions,
renewals, amendments and modifications of such agreements and
including, without limitation, all revenues received or to be
received by Debtor in connection with the operation of Secured
Systems under management; and
(c) all proceeds, accessions of or to any and all of
the foregoing and all substitutions and replacements therefor
and, to the extent not otherwise included, all payments under
insurance (whether or not Secured Party is the loss payee
thereof) or as a result of any seizure or condemnation, or under
any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS. Debtor
hereby represents, warrants and covenants to Secured Party that:
(a) Debtor has (or will have upon acquisition by
Debtor) good and sufficient title to all fixtures in the
Collateral free and clear of any and all liens or encumbrances
and has full right and authority to grant a lien on and security
interest in the Collateral; and will warrant and defend to
Secured Party such title to the Collateral and the lien and
security interest of Secured Party therein and thereon against
all claims and demands whatsoever, and will, except as otherwise
herein
<PAGE>
expressly provided, maintain the security interest granted by
this Security Agreement upon the Collateral.
(b) The lien and security interest granted by this
Security Agreement is a good and valid lien on and security
interest in all the Collateral.
(c) No financing statement or security agreement pur-
porting to cover any of the Collateral has heretofore been signed
by Debtor or names Debtor as "debtor" and no such financing
statement or security agreement is now on file in any public
office.
(d) All of the Collateral, and all records concerning
the Collateral, shall remain in Debtor's possession or control.
4. SECURITY AGREEMENT AND FINANCING STATEMENT. This
Security Agreement constitutes a security agreement as to all or
any part of the Collateral which is of a nature that a security
interest therein can be perfected under the Uniform Commercial
Code as in effect in the State of Delaware. This Security
Agreement also constitutes a financing statement with respect to
any and all property included in the Collateral which is or may
become a fixture.
5. PERFECTION OF SECURITY INTEREST. Debtor shall execute
and deliver to Secured Party, from time to time upon Secured
Party's request and at Secured Party's expense, all financing
statements, amendments, continuation financing statements,
assignments, affidavits, reports, notices, letters of authority
and all other documents that Secured Party may reasonably request
to perfect and maintain perfected Secured Party's secured
interest in the Collateral. Secured Party shall be responsible
for preparation and filing of all such financing statements,
amendments, continuation financing statements, assignments,
affidavits, reports, notices, letters of authority and other
documents. Debtor shall make appropriate entries on its books
and records disclosing Secured Party's security interest in the
Collateral.
6. PRIORITY OF SECURITY INTEREST. The security interest
of Secured Party in the Collateral is a first priority security
position subject to no superior or prior liens, encumbrances or
interests, except as otherwise provided in Section 7 hereof.
7. DISPOSITION OF THE COLLATERAL; LIENS AND ENCUMBRANCES.
Debtor shall not directly or indirectly sell, convey, assign,
transfer, relocate, move or otherwise dispose of the Collateral
or any part or interest therein without the prior written consent
of Secured Party. In addition, Debtor shall not directly or
indirectly create or permit to remain, and will promptly
discharge, any mortgage, lien, encumbrance or charge on, pledge
of, security interest in or conditional sale or other title
retention agreement with respect to the Collateral or any part
thereof (including, without limitation, any lien, encumbrance or
charge arising by operation of law) other than: (i) the liens
and security interests of or granted by this Security Agreement;
(ii) liens for taxes, assessments, and other governmental charges
which are not at the time required to be paid; (iii) liens of
mechanics, materialmen, suppliers or vendors or rights thereto to
the extent permitted herein; and (iv) encumbrances otherwise
permitted by Secured Party in writing.
<PAGE>
8. SUBSTITUTIONS AND REMOVALS. In any instance where
Debtor, in its reasonable discretion, determines that any item of
personal property or fixtures constituting part of the Collateral
shall have become inadequate, obsolete, worn-out, broken,
inoperable, unsuitable, undesirable or unnecessary or should be
replaced, Debtor may remove, abandon, sell or otherwise dispose
of such property provided that Debtor complies with Section 7
hereof. In such event, Debtor shall either: (i) in the case of
broken or inoperable equipment, substitute and install other
equipment as part of the Collateral, which substituted equipment
shall be free from all liens and encumbrances and shall become
part of the Collateral, subject to this Security Agreement; (ii)
in the case of all other property, substitute and install other
property as part of the Collateral having equal or greater value,
but not necessarily the same functions in the operation of the
Collateral, which substituted property shall be free from all
liens and encumbrances and shall become part of the Collateral,
subject to this Security Agreement; or (iii) obtain a written
waiver of this provision in advance from Secured Party. In any
event, Debtor shall provide to Secured Party written evidence
satisfactory to Secured Party of the book value of portions of
the Collateral removed and of the substituted property.
9. MAINTENANCE AND USE OF COLLATERAL. Subject to Debtor's
rights pursuant to Section 8 hereof, Debtor shall, at its
expense, keep the Collateral, or cause the Collateral to be kept,
in good order and condition, ordinary wear and tear excepted, and
shall make all necessary or appropriate repairs, replacements and
renewals thereof. Debtor shall not do, or permit to be done, any
act or thing which might materially impair the value or
usefulness of the Collateral or any part thereof, shall not
commit or permit any waste of the Collateral or any part thereof,
and shall not permit any unlawful occupation, business or trade
involving the Collateral to be conducted.
10. MECHANICS' AND OTHER LIENS. Debtor shall not suffer or
permit any mechanics' or other liens to be filed or to exist
against the Collateral, by reason of work, labor, services or
materials supplied or claimed to have been supplied to, for or in
connection with the Collateral or Debtor or anyone holding the
Collateral or any part thereof through or under Debtor. If any
such lien shall at any time be filed, Debtor shall within sixty
(60) days after notice of the filing thereof (but subject to the
right to contest hereinafter set forth), cause the same to be
discharged of record by payment, deposit, bond, order of a court
of competent jurisdiction or otherwise. Notwithstanding the
foregoing, Debtor shall have the right, at Debtor's own expense
and after written notice to Secured Party, by appropriate
proceeding timely instituted and diligently prosecuted, to
contest in good faith the validity or the amount of any such
lien. Should Debtor fail to cause such lien to be discharged or
to contest the validity or amount thereof within the period
aforesaid, then Secured Party may, but shall be under no
obligation to, discharge the same either by paying the claim or
by procuring the discharge of such lien by making a deposit or
obtaining a bond, which advances, if any, shall be paid by Debtor
to Secured Party on demand and shall be subject to and secured by
this Security Agreement as additional indebtedness.
11. DAMAGE TO OR DESTRUCTION OF COLLATERAL. Subject to
Debtor's rights pursuant to Section 8 hereof, in case of any
damage to or destruction of the Collateral or any part thereof,
Debtor shall promptly give written notice thereof to Secured
Party generally describing the nature and extent of such damage
or destruction. Debtor shall, whether or not the proceeds of
insurance, if any, received on account of such damage or
destruction shall be sufficient for such
<PAGE>
purpose, promptly commence and complete, or cause to be commenced
and completed, the repair or restoration of the Collateral as
nearly as practicable to the value, condition and character
thereof existing immediately prior to such damage or destruction,
with such changes or alterations, however, as Debtor may deem
necessary for proper operation of the Collateral subject to the
federal telecommunications laws and to the rules, regulations and
policies of the Federal Communications Commission ("FCC").
12. INSURANCE; TAXES; ETC. Debtor shall, at its expense:
(i) pay promptly when due and before penalty and interest accrue
thereon, all taxes, levies, assessments (whether general or
special), judgments and charges of any kind upon or relating to
the Collateral; (ii) keep and maintain all of the Collateral
insured for full replacement value against loss or damage by
fire, theft, explosion and other risk in such amounts, with such
reputable companies, under such policies and in such form as
Debtor shall determine in its reasonable discretion; and
(iii) maintain public liability and property damage insurance in
such amounts, with such reputable companies, under such policies
and in such form as Debtor shall determine in its reasonable
discretion and shall furnish Secured Party with such policies and
evidence of payment of premiums thereon. If Debtor at any time
hereafter should fail to pay any such tax, levy, assessment,
judgment or charge, or should fail to obtain or maintain any of
the policies required above or fail to pay any premium in whole
or in part relating thereto, then Secured Party, without waiving
or releasing any obligation or default of Debtor hereunder, may
at any time hereafter (but shall be under no obligation to do so)
make such payments or obtain such discharge or obtain and
maintain such policies of insurance and pay such premiums, and
take such action with respect thereto as Secured Party deems
advisable. All sums so incurred by Secured Party, including
reasonable attorneys' fees, court costs, expenses, and other
charges relating thereto, shall be added to the obligations of
Debtor secured hereby and shall be payable on demand.
13. INSPECTION AND INFORMATION. Debtor shall permit
Secured Party or its agents, upon reasonable request, to have
access to and to inspect all the Collateral and may from time to
time verify accounts, inspect, check, make copies of or extracts
from the books, records and files of Debtor with regard to the
Collateral, and Debtor will make same available at any reasonable
time during business hours for such purposes. In addition,
Debtor shall promptly supply Secured Party with financial and
such other information concerning its affairs and assets as
Secured Party may reasonably request from time to time.
14. DEFAULT.
(a) The occurrence of any of the following events
shall constitute an event of default (each an "Event of
Default"):
(i) Any failure by Debtor to pay the Note in
accordance with its terms;
(ii) Any representation or warranty made by Debtor
herein shall prove to have been incorrect in
any material respect when made;
<PAGE>
(iii)Debtor: (A) generally fails to pay or
admits in writing its inability to pay, its
debts as they mature; (B) applies for or
consents to or acquiesces in the appointment
of a trustee, receiver or other custodian for
Debtor for a substantial part of the property
of Debtor; or (C) makes a general assignment
for the benefit of creditors;
(iv) Any of the following events shall occur and
remain uncured for sixty (60) days unless
dismissed, bonded or discharged: (A) a
trustee, receiver or other custodian is
appointed for Debtor, or for a substantial
part of the property of Debtor; (B) any
bankruptcy, reorganization, debt arrangement
or other proceeding under any bankruptcy or
insolvency law, or any dissolution or
liquidation proceeding, is instituted by or
against Debtor or any warrant of attachment
or similar legal process is issued against
any substantial part of the property of
Debtor; (C) entry of any judgment against
Debtor for the payment of money in excess of
U.S. $150,000 or order of attachment,
execution, sequestration or other order
in the nature of a writ is levied on the
Collateral; (D) the occurrence of an uncured
default by Debtor with respect to any of its
obligations to any other creditor which could
result in the creditor exercising any rights
against the Collateral; or (E) the Collateral
shall be placed under control or custody of
any court; or
(v) Debtor shall fail to perform or observe any
term, covenant, condition or agreement
contained in this Security Agreement on its
part to be performed or observed which
failure shall continue for thirty (30) days
after receipt of written notice by Debtor
from Secured Party.
(b) Whenever an Event of Default hereunder shall
exist, following written notice of default if required by the
applicable Event of Default, which is not cured within any grace
period specified herein, Secured Party may exercise from time to
time any rights and remedies, including the right to immediate
possession of the Collateral, available to it hereunder and under
applicable law. Debtor agrees to pay all costs of Secured Party
for enforcement of its rights hereunder, including the payment of
reasonable attorneys' fees and court costs, and including
participation in any bankruptcy proceedings, and the expense of
locating the Collateral and expenses of any repairs to any realty
or other property to which any of the Collateral may be affixed
or be a part. Secured Party shall not have any liability for or
by reason of any such taking of possession, entry, removal or
holding. If any notification of intended disposition of any of
the Collateral is required by law, such notification, if mailed,
shall be deemed reasonably and properly given if sent at least
ten (10) days before such disposition, postage prepaid, addressed
to Debtor at the address indicated above or such other address as
Debtor shall have directed to Secured Party in writing.
(c) Notwithstanding any other provisions herein, to the
extent that the rules, regulations and policies of the FCC apply
to any transactions contemplated under this Security Agreement,
Secured Party and Debtor shall comply with such rules,
regulations and policies.
<PAGE>
15. REMEDIES CUMULATIVE. If an Event of Default shall have
occurred, Secured Party may undertake appropriate judicial
proceedings or may proceed with any other right or remedy
provided for in the Uniform Commercial Code as in effect in the
State of Delaware, independent of or in aid of the rights, powers
and remedies conferred in this Security Agreement. Each right,
power and remedy of Secured Party now or hereafter provided for
in the Uniform Commercial Code as in effect in the State of
Delaware shall be cumulative and concurrent and shall be in
addition to every other right, power or remedy provided for in,
or now or hereafter provided for in the Uniform Commercial Code
as in effect in the State of Delaware, and the exercise or
beginning of the exercise or partial exercise by Secured Party of
any one or more of such rights, powers or remedies shall not
preclude the simultaneous or later exercise by Secured Party of
any or all such other rights, powers or remedies.
16. TERMINATION OF AGREEMENT. This Security Agreement
shall terminate upon the later to occur of (i) the payment in
full by Debtor to Secured Party of the amount called for by
Section 1 hereof, and (ii) the sale and issuance of the Shares
(as defined in the Financing Agreement) in accordance with
Section 1 of that certain Subscription Agreement between Intek
and Securicor Technologies, Inc. of even date herewith.
17. WAIVER. Any delay on the part of Secured Party in
exercising any power, privilege or right hereunder, or under any
other instrument executed by Debtor to Secured Party in
connection herewith shall not operate as a waiver thereof, and no
single or partial exercise thereof, or the exercise of any other
power, privilege, or right. The waiver by Secured Party of any
default by Debtor shall not constitute a waiver of any subsequent
defaults, but shall be restricted to the default so waived.
18. NOTICES. All notices and other communications provided
for hereunder shall be in writing and shall be mailed, telecopied
or personally delivered, in each event to the address or
telecopier number of the addressee set forth above, or at such
other address or telecopier number as shall be designated by any
party in a written notice to the other party. All such notices
and communications shall: (i) if mailed, be effective three (3)
days after deposit into the U.S. mail with postage prepaid; (ii)
if telecopied, be effective upon facsimile transmission with
confirmation thereof; or (iii) if personally delivered, be
effective upon delivery thereof.
19. ASSIGNMENT; BINDING EFFECT. Secured Party may assign
this Security Agreement and the security interest created hereby
to an affiliate of Secured Party. This Security Agreement shall
not be assignable by Debtor without the advance written consent
of Secured Party. The rights and privileges of Secured Party
hereunder shall inure to the benefit of the successors and
permitted assigns of Secured Party and this Security Agreement
shall be binding upon and shall inure to the benefit of Debtor
and its successors and permitted assigns.
20. AMENDMENT; INTERPRETATION. No amendment of this
Security Agreement of shall be effective unless the same shall be
in writing and signed by both of the parties hereto. Whenever
possible, each provision of this Security Agreement shall be
interpreted in such manner as to be effective and valid under
such law, but if any provision of this Security Agreement shall
be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such
<PAGE>
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Security
Agreement; provided, however, that if the rendering of any such
provision in effect shall alter the commercial basis of this
Security Agreement, the parties shall renegotiate this Security
Agreement.
21. GOVERNING LAW. This Security Agreement shall be
governed by the internal laws of the State of Delaware, and with
respect to the perfection of the security interests granted
hereby, by the applicable Uniform Commercial Code and fixture
filing laws in each jurisdiction where the Collateral is located.
22. ENTIRE AGREEMENT. This Security Agreement and the Note
constitute the entire agreement of the parties, and supersede all
prior agreements and understandings between them, regarding the
subject matter hereof.
23. COUNTERPARTS. This Security Agreement may be executed
and delivered in any number of counterparts, each of which when
so executed and delivered shall constitute an original, and all
of which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Security Agreement on date first above written.
Witnesses: SIMMONDS COMMUNICATIONS LIMITED
By: /s/ John G. Simmonds
Its: Chief Executive Officer
Witnesses: ROAMER ONE, INC.
By: /s/ David Neibert
Its: President
<PAGE>
<PAGE>
EXHIBIT 10.17
EXHIBIT A
Form of Secured Promissory Note
SECURED PROMISSORY NOTE
April 20, 1995 Torrance, California, U.S.A.
FOR VALUE RECEIVED, the undersigned ROAMER ONE, INC., a
Delaware corporation ("Borrower"), promises to pay to the order
of SIMMONDS COMMUNICATIONS LIMITED, an Ontario corporation
("Lender"), an amount equal to:
(a) One Million U.S. Dollars (U.S. $1,000,000) within three
(3) business days after the date of this Secured
Promissory Note ("Note"); plus
(b) an amount equal to (i) such amount as Lender may pay to
Linear Modulation Technology Limited, an English
limited company ("LMT"), under Section 10(d) of that
certain Financing Agreement, of even date herewith,
among Borrower, Lender, LMT, INTEK Diversified
Corporation, a Delaware corporation ("Intek"), and
Roamer One Holdings, Inc. (the "Financing Agreement"),
less (ii) the amount paid by Borrower to Lender under
clause (a) above, within three (3) business days after
receipt of written demand therefor by Lender.
Payment of the amounts due under this Note shall be made in
lawful money of the United States of America at the principal
office of the Lender, or at such other place as the Lender may
designate to Borrower in writing.
Payment of the amount due on this Note is secured by a lien
and security interest granted by Borrower to Lender in certain
collateral as provided in that certain Security Agreement between
Borrower and Lender of even date herewith and by that certain
Guaranty made by Intek in favor of LMT and Lender of even date
herewith.
If Borrower fails to pay all or any part of this Note in
accordance with its terms, then the entire sum payable hereunder
shall become due and payable at once, without demand or notice,
and the accelerated amount shall bear interest, from the date of
default until such accelerated amount is paid in full, at the
rate of twelve percent (12%) per annum; provided, however, that
in no event shall the interest rate payable hereunder exceed the
maximum permitted by law.
<PAGE>
This Note shall be governed by the internal laws of the
State of Delaware, excluding any choice of law rules which may
direct the application of the laws of another jurisdiction.
ROAMER ONE, INC.
By: /s/ David Neibert
Its: President
EXHIBIT 10.18
April 17, 1995
Mr. Steven L. Wasserman
Secretary of Olympic Plastics Co., Inc.
an Intek Diversified Company
5800 West Jefferson Blvd.
Los Angeles, CA 90016
Dear Mr. Wasserman:
Industrial Assets, Inc. ("Industrial Assets") is pleased to
present the following contract to Olympic Plastics Co., Inc.
("Olympic Plastics") covering the machinery equipment, rolling
stock, office furniture and related items, including all the
items on attached Exhibit A, available for sale at its facility
in Los Angeles, California, as inspected on Tuesday, April 11,
1995, by the undersigned.
CONTRACT
OUTRIGHT PURCHASE
Industrial Assets will purchase all the machinery, equipment,
rolling stock, office furniture and related items including all
the items on attached Exhibit A, as inspected, for Seven Hundred
Ten Thousand Dollars ($710,000.00).
Industrial Assets will hold a public action sale on site. The
time required to do this would be approximately 45 days from the
date of notification that we could begin work through checkout of
the items sold.
Industrial Assets will host the public auction sale and will be
responsible for all aspects of the auction process from start to
finish. We will handle the advertising, i.e., media and
periodicals, production and mailing of an illustrated brochure,
the production of a buyer's catalog for the day of the sale,
lotting, cleaning, actual selling, computerized clerking,
bookkeeping, collection of monies and checkout of sold items.
Initials: I.A.I.___________ Seller: /s/
<PAGE>
<PAGE>
Olympic Plastics may add molds and tooling to other sale which
Industrial Assets will sell at its auction, charging a commission
of 15% on all sale proceeds for these additions. Where
available, Olympic Plastics will provide Industrial Assets sample
products from these molds.
TERMS AND CONDITIONS
Seventy-Five Thousand Dollars ($75,000.00) will be deposited to
Seller's attorney's escrow account upon the receipt of an executed
contract and applied to the purchase price of Seven Hundred Ten
Thousand Dollars ($710,000.00). This deposit will be fully
refundable upon demand in the event Seller is unable to provide
free and clear title. The balance will be paid to Seller upon
completion of our UCC check to verify that Seller is the owner of
the listed assets free anc clear of al liens and encumbrances and
bulk transfer notice but in no event no later than May 5, 1995.
The lien on the "Husky" held by GECC shall be satisfied out of
the purchase price for the assets. Industrial Assets is not
purchasing, selling or assuming any hazardous waste liability.
Industrial Assets reserves the right of abandonment subject to
its responsibility for removal of all remaining assets as
provided below.
Industrial Assets will have expense free use of the real property
and utilities to conduct public and private sales for a mutually
agreeable period of time.
Industrial Assets will collect and promptly pay all applicable
sales tax.
Industrial Assets will name Olympic Plastics as an additional
insured under its $3,000,000.00 liability insurance policy.
Industrial Assets shall assume full responsibility for
disassembly and removal of all assets within 60 days after
execution of this agreement.
Olympic Plastics will convey free and clear documents of title
and buy\sell agreement. Industrial Assets is purchasing "as is"
"where is" with the exception of warranty of title.
Initials: I.A.I. ___________ Seller: /s/
<PAGE>
<PAGE>
This contract is subject to the attached Exhibit A list of
machinery equipment and other assets.
The above sets forth the entire agreement of the parities hereto.
Agreed to & Accepted By: Agreed to & Accepted By:
Industrial Assets, Inc. Olympic Plastics, Co., Inc.
By: ____________________ By: /s/ Steven L. Wasserman
Steven R. Mattes Steven L. Wasserman
President Asst. Secretary
Date: __________________ Date: _______________________
Initials: I.A.I.___________ Seller: /s/
PAGE
<PAGE>
BILL OF SALE
INDUSTRIAL ASSETS, INC., a _______________ corporation
("Buyer"), and OLYMPIC PLASTICS COMPANY, INC., a California
corporation ("Seller"), have entered into a letter agreement
dated April 17,1995 and accepted April 21, 1995 (which, together
with Exhibit A thereto, is hereinafter referred to as the
"Purchase Agreement") which contemplates and provides for the
sale, transfer and conveyance by Seller to Buyer of the assets
set forth in Exhibit A thereto.
In consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller hereby sells, transfers, conveys,
assigns and delivers to Buyer, and Buyer hereby purchases and
accepts, all right, title and interest of Seller in and to all of
the properties, assets and rights of any kind, whether tangible
or intangible, real or personal, of Seller that are described on
Exhibit A attached hereto (all of the assets sold, transferred,
conveyed, assigned and delivered to Buyer hereunder are referred
to collectively herein as the "Purchase Assets").
TO HAVE AND TO HOLD unto Buyer, its successors and
assigns forever all of the Purchased Assets.
Seller has good and valid title to the Purchased
Assets, and has the full right to sell, transfer, convey, assign
and deliver the Purchased Assets to Buyer free and clear of all
lines (except for tax liens for taxes not yet due and payable),
encumbrances, charges, equities and claims of every kind arising
by, through or under Seller.
Seller covenants and agrees, for itself and its
successors and assigns, that it will, at any time and from time
to time, from and after the date hereof, at its expense, upon the
reasonable request of Buyer, do, execute and deliver, or will
cause to be done, executed and delivered, all such further
reasonable acts and documents as may be required to sell, convey,
transfer, assign and deliver the Purchased Assets to Buyer or its
successor and assigns.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Seller has caused this instrument
to be signed in its name by its duly authorized corporate officer
as of this 5th day of May, 1995.
OLYMPIC PLASTICS COMPANY, INC.
By: ______________________________
Name Printed: ____________________
Title: ___________________________
Accepted:
INDUSTRIAL ASSETS
By: ______________________________
Name Printed: ____________________
Title: ___________________________
EXHIBIT 10.19
MEMORANDUM OF UNDERSTANDING
by and between
Roamer One, Inc. and Midland International Corporation
THIS MEMORANDUM OF UNDERSTANDING IS ENTERED INTO THIS 18TH DAY OF
APRIL, 1995 by and between Midland International Corporation
("MIC") of Kansas City, Missouri and Roamer One, Inc. ("Roamer")
of Torrance, California for the purposes of establishing a joint
marketing effort for 220 MHZ mobile radio product.
THE FOLLOWING PARAGRAPHS SET FORTH OUR MUTUAL INTENTIONS AND
AGREEMENTS:
1. Roamer shall purchase and supply to MIC at their facility in
Kansas City, Mo., 3,600 mobile radios bearing the Roamer One
trademark logo.
2. The price for the radio will be determined by a weighted
average unit cost of $461.11 plus applicable freight and
duties.
3. MIC shall use its best efforts to solicit for, identify, and
contract with potential dealers and resellers of the Roamer
radio.
4. MIC shall offer the Roamer radio at prices and terms
consistent with those mutually agreed upon by MIC and Roamer
as established or amended from time to time.
5. Roamer agrees that in establishing its price points, the
price shall be such that MIC shall earn no less than a 17%
gross profit margin on the most favorable terms offered to
dealers.
6. Roamer agrees to pay a sales commission to MIC equal to 2%
of the agreed upon weighted average price for each Roamer
radio sold by the MIC sales staff.
7. MIC shall promptly, or in any event no later than 60 days
after a sale, pay to Roamer the agreed upon price for each
radio sold less than 2% commission then due and payable by
Roamer to MIC.
8. MIC agrees to support and administer the warranty program as
published by the manufacturer of the radio.
9. MIC agrees to limit the sale of the Roamer radio to those
dealers, firms, individuals, end users, or others who have
either (i) signed the Roamer One Dealer Agreement, or
(ii) those who have been otherwise previously authorized by
Roamer.
<PAGE>
10. MIC agrees that it shall not offer for sale any other radio
product for use on the 220 MHZ spectrum within the United
States.
11. Roamer agrees that MIC shall be the exclusive provider of
220 MHZ radios to the Roamer authorized dealers, with the
exception of the products manufactured by firms other than
Securicor.
12. Roamer agrees to fund a co-operative advertising program for
Roamer dealers recruited by MIC. The amount will be equal
to an initial $200 allocation and a 3% of purchase fund
available for draw down.
CONDITIONS PRECEDENT
1. Roamer will have signed and executed that certain
financing agreement as negotiated between INTEK
Diversified Corporation, Roamer One, Inc., Simmonds
Communications, Ltd., Securicor, and Linear Modulation
Technology Limited.
2. The understandings and agreements contained herein
shall be subject to the approval of the respective
Boards of Directors of Simmonds Communications, Ltd.,
Midland International Corporation, and INTEK
Diversified Corporation.
LIMITATIONS
1. This understanding shall only apply to the first 3,600
mobile radios delivered by Securicor and bearing the
Roamer One logo.
2. This understanding shall terminate on the sale of all
inventory as described in (1.) above.
3. This understanding shall not be affected by a change of
control of either company and shall inure to the
benefit of their successors or assignees.
CONTINUING RELATIONSHIP
- Both parties agree to continue the joint marketing of
220 MHZ radio products so long as it is in their best
interests to do so; and furthermore, to continue
negotiations to establish a more permanent
relationship. The parties agree to define and enter
into a definitive agreement for the distribution of 220
MHZ product no later than September 1, 1995, and until
such time warrant that no similar agreement shall be
entered into with any other third party.
<PAGE>
PRESS RELEASES
- No press releases on the content of the subject matter
contained herein shall be issued by any of the parties
to this Memorandum of Understanding or their affiliates
or parent companies, without the prior review and
consent of each party.
Agreed and accepted on this 18th day of April, 1995
on behalf of Midland International Corporation
/s/ Scott Henderson
Scott Henderson
Senior Vice President, Sales
Agreed and accepted on this 18th day of April, 1995
on behalf of Roamer One, Inc.
/s/ David Neibert
David Neibert
President
