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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
-------------
(Amendment No. 2)
Intek Diversified Corporation
- --------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $0.01 par value 458134 10 3
- ----------------------------------- -----------------------------------
(Title of class of securities) (CUSIP number)
Howard Chatzinoff, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8000
- --------------------------------------------------------------------------
(Name, address and telephone number of person authorized to receive
notices and communications)
June 18, 1996
- --------------------------------------------------------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [_].
Check the following box if a fee is being paid with the statement [_].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent
of the class of securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership of five
percent or less of such class.) (See Rule 13d-7.)
Note: When filing this statement in paper format, six copies of this
statement, including exhibits, should be filed with the Commission. See
Rule 13d-1(a) for other parties to whom copies are to be sent.
(Continued on following page(s))
(Page 1 of 18 Pages)
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CUSIP No. 458134 10 3 13D Page 2 of 18
1 NAME OF REPORTING PERSON: Securicor International Limited
S.S. OR I.R.S. IDENTIFICATION NO. N/A
OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS: OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [_]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United Kingdom
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 937,042
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 937,042
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE 0
POWER:
11 AGGREGATE AMOUNT BENEFICIALLY 937,042
OWNED BY REPORTING PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_]
EXCLUDES CERTAIN SHARES:
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 8.4%
14 TYPE OF REPORTING PERSON: CO
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CUSIP No. 458134 10 3 13D Page 3 of 18
1 NAME OF REPORTING PERSON: Security Services plc
S.S. OR I.R.S. IDENTIFICATION NO. N/A
OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS: N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [_]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United Kingdom
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 937,042
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 937,042
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE 0
POWER:
11 AGGREGATE AMOUNT BENEFICIALLY 937,042
OWNED BY REPORTING PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_]
EXCLUDES CERTAIN SHARES:
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 8.4%
14 TYPE OF REPORTING PERSON: CO
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CUSIP No. 458134 10 3 13D Page 4 of 18
1 NAME OF REPORTING PERSON: Securicor Group plc
S.S. OR I.R.S. IDENTIFICATION NO. N/A
OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS: N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [_]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United Kingdom
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 937,042
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 937,042
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE 0
POWER:
11 AGGREGATE AMOUNT BENEFICIALLY 937,042
OWNED BY REPORTING PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_]
EXCLUDES CERTAIN SHARES:
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 8.4%
14 TYPE OF REPORTING PERSON: CO
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CUSIP No. 458134 10 3 13D Page 5 of 18
1 NAME OF REPORTING PERSON: Securicor plc
S.S. OR I.R.S. IDENTIFICATION NO. N/A
OF ABOVE PERSON:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS: N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [_]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e):
6 CITIZENSHIP OR PLACE OF United Kingdom
ORGANIZATION:
NUMBER OF 7 SOLE VOTING POWER: 937,042
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 937,042
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE 0
POWER:
11 AGGREGATE AMOUNT BENEFICIALLY 937,042
OWNED BY REPORTING PERSON:
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [_]
EXCLUDES CERTAIN SHARES:
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 8.4%
14 TYPE OF REPORTING PERSON: CO
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This amends and supplements the Statement on Schedule 13D filed with
the Securities and Exchange Commission (the "Commission") by Securicor
International Limited ("Securicor International") with respect to its
ownership of common stock, par value $.01 per share (the "Common
Stock"), of Intek Diversified Corporation (the "Issuer"). Unless
otherwise indicated, all capitalized terms used herein shall have the
meanings ascribed to them in the Schedule 13D.
Item 2. Identity and Background
-----------------------
Item 2 is hereby amended and supplemented by the addition of the
following information:
(a) - (c) Securicor International, Security Services plc
("Security Services"), Securicor Group plc ("Securicor Group"), and
Securicor plc ("Securicor") (collectively, the "Corporations") are
each corporations formed under the laws of England and Wales. The
address of the principal place of business of each of the Corporations
is Sutton Park House, 15 Carshalton Road, Sutton, Surrey SM1 4LD,
United Kingdom. The principal businesses of Security Services,
Securicor Group and Securicor are as holding companies which, through
their subsidiaries, are engaged in the transportation and care of cash
and valuables; cash processing; security guards and patrols;
monitoring and response services; custodial services; container
transport, contract distribution and warehouse management, express
parcels, freight haulage, document delivery and mail services; vehicle
fleet management; contract hire and fuel services; computer services;
the manufacture, sale, installation and maintenance of communications
products; mobile communications; the provision of communications
systems networks; hotels; recruitment services; and insurance.
The name, business address and principal occupation or employment
of each of the directors and executive officers of Securicor,
Securicor Group, Securicor Services and Securicor International are as
follows:
6
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TABLE A
-------
Securicor, Securicor Group, Security Services
and Securicor International
Principal
Position with Occupation or
Name and Business Address Securicor Employment
------------------------- --------- ----------
Nigel Edward Griffiths LLB Group Legal Group Legal
Sutton Park House Director and Director and
15 Carshalton Road Company Company
Sutton, Surrey SM1 4LD, U.K. Secretary Secretary of
Securicor
Roger Sydney William Hale Group Chief Group Chief
Wiggs Executive Executive of
Sutton Park House Securicor
15 Carshalton Road
Sutton, Surrey SM1 4LD, U.K.
Dr. Edmund Alan Hough Chief Chief Executive,
Sutton Park House Executive, Communications
15 Carshalton Road Communications Division of
Sutton, Surrey SM1 4LD, U.K. Division Securicor
Patrick David Howes Chief Chief Executive,
Sutton Park House Executive, Distribution
15 Carshalton Road Distribution Division of
Sutton, Surrey SM1 4LD, U.K. Division Securicor
Sir David Neil MacFarlane Non-executive Non-executive
54 Marsham Court Chairman Chairman of
London, SW1P 4JZ Securicor
Henry William McKay Chief Chief Executive,
Sutton Park House Executive, Security
15 Carshalton Road Security Services
Sutton, Surrey SM1 4LD, U.K. Services Division of
Division Securicor
Christopher Charles Group Financial Group Financial
Shirtcliffe Director Director of
Sutton Park House Securicor
15 Carshalton Road
Sutton, Surrey SM1 4LD, U.K.
7
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James Drake Birrell Non-executive Retired
Kinnesswood Greenroyd Avenue Director (1)
Skircoat Green
Halifax, West Yorkshire HX3
0JN, U.K.
Richard Alexander Graves Non-executive Retired
80 Eccleston Square Director (1)
London SW1V 1PP, U.K.
Anthony Victor Alexander Non-executive Retired
1 St. Germans Place Director (1)
London SE3 0NH, U.K.
Sir Peter Michael Imbert Non-executive Retired
36 Washington Court Director (1)
Overton Road
Sutton, Surrey SM2 6RB, U.K.
(1) Does not hold any position with Securicor International.
The following persons are directors and executive officers of
Securicor International only (and not of Securicor, Securicor Group or
Security Services) in addition to those listed above in Table A:
TABLE B
-------
Securicor International
Name and Business Position with Principal
Address Securicor Occupation or
Employment
Ann Irene Perkins Development Development
Sutton Park House Director, Security Director, Security
15 Carshalton Road Services Division Services Division
Sutton, Surrey SM1 4LD, of Securicor
U.K.
Richard George Hawkins Finance Director, Finance Director,
Sutton Park House Security Services Security Services
15 Carshalton Road Division Division of
Sutton, Surrey SM1 4LD, Securicor
U.K.
8
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Andrew Gillon Nicol Director, Director,
Jardine Securicor Securicor Securicor
Limited International International
B8 Solemar Villas,
Silver Cape Road
Clearwater Bay,
Kowloon, Hong Kong
Irene Lavinia Elizabeth Personnel Director, Personnel Director
Cowden Securicor Cash of Securicor,
Sutton Park House Services Securicor Cash
15 Carshalton Road Services
Sutton, Surrey SM1 4LD,
U.K.
Charles Edward James Managing Director, Managing Director,
Wenham Securicor Europe Securicor Europe
Sutton Park House
15 Carshalton Road
Sutton, Surrey SM1 4LD,
U.K.
(d) - (e) During the last five years, none of the Corporations and, to
their knowledge, none of the other persons identified pursuant to
Paragraphs (a) through (c) of this Item 2, have been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which
such person was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to federal or state securities laws or finding any violation
with respect to such laws.
(f) To the knowledge of the Corporations, each of the individuals
identified pursuant to Paragraphs (a) through (c) is a citizen of the
United Kingdom.
Item 4. Purpose of the Transaction.
--------------------------
Item 4 is hereby amended and supplemented by the addition of
the following information:
Securicor Communications Limited ("Securicor
Communications"), an affiliate of the Corporations and a direct or
indirect subsidiary of each of Security Services, Securicor Group and
Securicor, has entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated as of June 18, 1996, with
9
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the Issuer. If the transactions contemplated by the Stock Purchase
Agreement are consummated, Securicor Communications will receive
25,000,000 shares of Common Stock in exchange for all of the issued
and outstanding securities (other than certain preferred shares) of
Securicor Radiocoms Limited ("Securicor Radiocoms"), as subsidiary of
Securicor Communications. The Stock Purchase Agreement supersedes the
Letter of Intent previously filed with Amendment No. 1 to the Schedule
13D.
Separately, the Issuer has entered into a Sale of Assets and
Trademark License Agreement (the "Asset Sale Agreement"), dated as of
June 18, 1996, with Simmonds Capital Limited ("Simmonds Capital") and
Midland International Corporation ("Midland"), an indirect, wholly-
owned subsidiary of Simmonds Capital. If the transactions
contemplated by the Asset Sale Agreement are consummated, the Issuer
will acquire a certain license from Midland and will also acquire
certain intangible assets, in exchange for the issuance of 2,500,000
shares of Common Stock to Simmonds Capital.
The respective closings under each of the Stock Purchase
Agreement and the Asset Sale Agreement are conditioned on each other,
and the closing of both such agreements will result in the combination
of (i) the narrowband wireless technology and manufacturing operations
of Securicor Radiocoms, (ii) the air time services business of Roamer
One, Inc., a subsidiary of the Issuer, and (iii) the U.S. Land Mobile
Radio business of Midland (transactions (i), (ii) and (iii) being
referred to, collectively, as the "Business Combinations").
The consummation of the transactions contemplated by the
Stock Purchase Agreement (and as a result the consummation of all of
the Business Combinations) is subject to numerous contingencies and
conditions that are not within the control of the Corporations,
including, among other things, (a) the approval of the Issuer's
shareholders, (b) the Issuer having a specified minimum number of
constructed Land Mobile Radio systems under management, (c) Securicor
Communications having received certain United Kingdom tax clearances,
(d) satisfaction or waiver of other conditions, including the absence
of a material adverse change in the parties' respective businesses and
the expiration or early termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act and (e)
consummation of the transactions contemplated by the Asset Purchase
Agreement. Reference is hereby made to Article VII of the Stock
Purchase Agreement, attached as Exhibit (2) to this Schedule 13D, with
respect to the conditions to closing under the Stock Purchase
Agreement.
10
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Upon the consummation of the transactions contemplated by
the Stock Purchase Agreement, the Reporting Persons will beneficially
own an aggregate of 25,937,042 shares of Common Stock, or
approximately 67.2% of the 38,625,278 issued and outstanding shares of
Common Stock on a pro forma basis.
Except as set forth herein, the Corporations have no present
plans or proposals which relate to or would result in any of the
events required to be disclosed under this Item 4.
Item 5. Interest in Securities of the Issuer.
------------------------------------
Item 5 is hereby amended and supplemented by the addition of
the following information:
(a) As of June 18, 1996, the Controlling Entities
beneficially owned the following shares of Common Stock:
(i) Securicor International is the direct owner of
937,042 shares of Common Stock. The 937,042 shares represent
approximately 8.4% of the 11,125,278 outstanding shares of Common
Stock.
(ii) By virtue of its ownership of all of the
outstanding shares of Securicor International, Security Services is
for purposes of this Schedule 13D a beneficial owner of all the shares
of Common Stock beneficially owned by Securicor International.
(iii) By virtue of its ownership of all of the
outstanding shares of Security Services, Securicor Group is for
purposes of this Schedule 13D a beneficial owner of all the shares of
Common Stock beneficially owned by Security Services.
(iv) By virtue of its ownership of all of the
outstanding shares of Securicor Group, Securicor is for purposes of
this Schedule 13D a beneficial owner of all the shares of Common Stock
beneficially owned by Securicor Group.
(b) Security Services, Securicor Group and Securicor, as
the direct and indirect sole stockholders of Securicor International,
can control Securicor International's voting and dispositive powers
with respect to the 937,042 shares of Common Stock beneficially owned
by Securicor International. As a result, Security Services, Securicor
Group and Securicor have taken the position that they each have sole
voting and dispositive power with respect to all of such shares.
11
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(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
--------------------------------------------------------
with Respect to Securities of the Issuer.
----------------------------------------
Item 6 is hereby amended and supplemented by the addition of
the following information:
There are no contracts, arrangements, understandings or
relationships with respect to any securities of the Issuer (i) among
any of the persons identified pursuant to Item 2 above, and (ii)
between (a) any of the persons identified pursuant to Item 2 and (b)
any other person, other than the following agreements:
On June 18, 1996, the Issuer and Securicor Communications
entered into the Stock Purchase Agreement, pursuant to which Securicor
Communications will acquire 25,000,000 shares of Common Stock in
exchange for all of the shares of Securicor Radiocoms (except certain
preferred shares). Among other things, the Stock Purchase Agreement
provides, as a condition to closing, for the election to the Issuer's
board of directors of nominees designated by Securicor Communications
and the removal or resignation from such board of directors of such
persons as may be designated by Securicor Communications. See Item 4.
On June 18, 1996, the Issuer, Securicor Communications,
Simmonds Capital, Roamer One Holdings, Inc. and Securicor
International entered into a Voting Agreement pursuant to which each
party agreed to vote, at any meeting of the holders of the Common
Stock until the earlier of the closing under the Stock Purchase
Agreement or the termination of the Stock Purchase Agreement in
accordance with its terms, in support of the transactions contemplated
by the Stock Purchase Agreement and against any action or agreement
that would result in any breach of any covenant, representation or
warranty or any other obligation of the Issuer under the Stock
Purchase Agreement. In addition, the parties to the Voting Agreement
agreed, during the two-year period following the consummation of the
transactions contemplated by the Stock Purchase Agreement, to vote
their respective shares in favor of one nominee to the Issuer's board
of directors to be designated by Roamer One Holdings, Inc.
12
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The Stock Purchase Agreement and the Voting Agreement are
filed herewith as Exhibits (2) and (4), respectively.
Item 7. Material to be Filed as Exhibits.
--------------------------------
The following are filed herewith as exhibits to this
Schedule 13D:
(1) Press Release, dated June 18, 1996, of the Issuer,
Simmonds Capital and Securicor
(2) Stock Purchase Agreement, dated June 18, 1996, between
the Issuer and Securicor Communications
(3) Joint Acquisition Agreement, dated June 28, 1996, by
and among Securicor Communications, Securicor International, Security
Services, Securicor Group and Securicor
(4) Voting Agreement, dated June 18, 1996, between
Securicor Communications and Securicor International
13
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
SECURICOR INTERNATIONAL LIMITED
Date: June 28, 1996 /s/ Nigel Griffiths
-----------------------
Signature
Nigel Griffiths/Director
------------------------
Name/Title
14
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
SECURITY SERVICES PLC
Date: June 28, 1996 /s/ Nigel Griffiths
----------------------
Signature
Nigel Griffiths/Director
------------------------
Name/Title
15
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
SECURICOR GROUP PLC
Date: June 28, 1996 /s/ Nigel Griffiths
----------------------
Signature
Nigel Griffiths/Director
------------------------
Name/Title
16
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
SECURICOR PLC
Date: June 28, 1996 /s/ Nigel Griffiths
------------------------
Signature
Nigel Griffiths/Director
------------------------
Name/Title
17
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EXHIBIT INDEX
Exhibit No. Exhibit
----------- -------
(1) Press Release, dated June 18, 1996, of the Issuer,
Simmonds Capital and Securicor
(2) Stock Purchase Agreement, dated June 18, 1996, between
the Issuer and Securicor Communications
(3) Joint Acquisition Agreement, dated June 28, 1996, by
and among Securicor Communications, Securicor
International, Security Services, Securicor Group and
Securicor
(4) Voting Agreement, dated June 18, 1996, between
Securicor Communications and Securicor International
18
NYFS01...:\73\73273\0003\5288\SCH6216L.28A
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EXHIBIT 1
NEWS RELEASE
INTEK, SIMMONDS CAPITAL AND SECURICOR
SIGN DEFINITIVE AGREEMENTS FOR 3-WAY WIRELESS MERGER
U.S.A, Canada and England - June 18, 1996 -- In a joint statement,
Intek Diversified Corporation ("Intek") of Los Angeles, California,
Simmonds Capital Limited ("SCL") of Toronto, Canada, and Securicor plc
of Surrey, England, today announced that definitive agreements have
been signed to combine Intek's Roamer One air time services business
with the US Land mobile radio business of Midland International
Corporation ("Midland"), a wholly owned subsidiary of SCL, and the
narrowband wireless technology and manufacturing operations of
Securicor Radiocoms Limited ("SRL"), a wholly owned subsidiary of
Securicor Communications Limited.
The agreements provide for Intek to purchase from Securicor
Communications all of the shares of SRL (other than certain preferred
shares), in exchange for 25 million common shares of Intek, and from
Midland certain contractual rights and a license for the use of the
Midland trademark in the United States for the Land Mobile Radio
market, in exchange for 2.5 million common shares of Intek. Securicor
Communications will agree to provide a subordinated loan to Intek in
the amount of $15 million and Securicor Communications will receive
warrants, exercisable commencing five years following the closing, to
acquire 1% of Intek's common stock at $13 per share. Intek will also
have the option to purchase from Midland certain assets which are used
in the business, subject to terms to be agreed upon. The SRL business
includes the Linear Modulated Radio technology, a manufacturing
facility in Bath, England, a network of wireless dealers and resellers
in the United Kingdom, a Specialized Mobile Radio network in England,
and a wireless system integration business. SRL also holds redeemable
preferred shares in E.F. Johnson Company, a manufacturer of wireless
communications equipment in Waseca, Minnesota.
The completion of the proposed transactions is subject, among other
things, to the approval of Intek's shareholders and, in the case of
the Intek-Securicor transaction, Intek having a specified minimum
number of constructed Land Mobile Radio systems under management and
Securicor having received certain UK tax clearances, as well as other
customary conditions, including the absence of a material adverse
change in the parties' respective businesses and the expiration or
early termination of the applicable waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act. The transactions are
conditioned on one another, and the parties expect the transactions to
close during the third quarter of 1996. Upon completion of the
proposed transactions, there will be approximately 40 million common
shares of Intek outstanding, approximately 26 million of which will be
held by Securicor.
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Securicor plc is a major UK international organization, with core
businesses in security services, parcels and freight distribution, and
fixed and mobile telecommunications. The telecommunications interests
include a 40% stake in Cellnet, the major UK cellular operator which
currently has in excess of 2 million subscribers. Securicor's shares
are traded on the London Stock Exchange (Symbol: Securicor.)
Simmonds Capital Limited, Toronto, Ontario, is involved in the
wireless communications business as a systems integrator and in the
electronics business as a manufacturer and distributor of electronic
components and related products. SCL is listed on the Toronto Stock
Exchange (Symbol: SMM).
Intek Diversified Corporation is a publicly traded company on the
NASDAQ small cap exchange. (symbol: IDCC). Through its wholly owned
subsidiary, Roamer One, Intek is developing a 220 MHz Specialized
Mobile Radio network in the United States.
The subject of this press release includes forward looking statements
concerning a contemplated transaction. The forward looking statements
are made pursuant to the safe harbor provision of the Private
Securities Litigation Reform Act of 1995. There are many factors that
could cause the events in such forward looking statements to not
occur, including the inability of the parties to obtain regulatory or
shareholder approvals.
For further information contact:
David Neibert Brian Faughnan Dr. Ed Hough
Intek Diversified Simmonds Capital Limited Securicor plc
Corporation
310-366-7703 416-221-1900 ext. 230 441-81-770-7000
NYFS09...:\73\73273\0003\1748\REL6276L.070
<PAGE>
EXHIBIT 2
STOCK PURCHASE AGREEMENT
BETWEEN
INTEK DIVERSIFIED CORPORATION
AND
SECURICOR COMMUNICATIONS LIMITED
Dated as of June 18, 1996
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TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I - SALE AND PURCHASE OF SHARES . . . . . . . . . . . . . 2
1.1 Sale and Purchase of Shares . . . . . . . . . . . . . . 2
ARTICLE II - PURCHASE PRICE AND PAYMENT . . . . . . . . . . . . . 3
2.1 Amount and Payment of Purchase Price . . . . . . . . . 3
ARTICLE III - CLOSING AND TERMINATION . . . . . . . . . . . . . . 3
3.1 Closing Date . . . . . . . . . . . . . . . . . . . . . 3
3.2 Termination of Agreement . . . . . . . . . . . . . . . 3
3.3 Procedure Upon Termination . . . . . . . . . . . . . . 5
3.4 Effect of Termination . . . . . . . . . . . . . . . . . 5
3.5 Expense Reimbursement . . . . . . . . . . . . . . . . . 5
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . 6
4.1 Organization and Good Standing . . . . . . . . . . . . 6
4.2 Authorization of Agreement . . . . . . . . . . . . . . 7
4.3 Capitalization . . . . . . . . . . . . . . . . . . . . 8
4.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . 9
4.5 Corporate Records . . . . . . . . . . . . . . . . . . . 10
4.6 Conflicts; Consents of Third Parties . . . . . . . . . 10
4.7 Ownership and Transfer of Shares; Ownership of EFJ
Shares and EFJ Warrant . . . . . . . . . . . . . . . 12
4.8 Financial Statements . . . . . . . . . . . . . . . . . 12
4.9 No Undisclosed Liabilities . . . . . . . . . . . . . . 13
4.10 Absence of Certain Developments . . . . . . . . . . . 13
4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 17
4.12 Real Property . . . . . . . . . . . . . . . . . . . . 20
4.13 Tangible Personal Property . . . . . . . . . . . . . . 23
4.14 Intangible Property . . . . . . . . . . . . . . . . . 24
4.15 Material Contracts . . . . . . . . . . . . . . . . . . 26
4.16 Employee Benefits . . . . . . . . . . . . . . . . . . 27
4.17 Labor . . . . . . . . . . . . . . . . . . . . . . . . 32
4.18 Litigation . . . . . . . . . . . . . . . . . . . . . . 33
4.19 Compliance with Laws . . . . . . . . . . . . . . . . . 35
4.20 Environmental Matters . . . . . . . . . . . . . . . . 35
4.21 Insurance . . . . . . . . . . . . . . . . . . . . . . 37
4.22 Related Party Transactions . . . . . . . . . . . . . . 38
4.23 Financial Advisors . . . . . . . . . . . . . . . . . . 38
4.24 Claims to Property . . . . . . . . . . . . . . . . . . 38
4.25 Licenses; Permits; Authorizations . . . . . . . . . . 39
4.26 Investment in Purchaser Shares . . . . . . . . . . . . 39
4.27 Investments in Purchaser . . . . . . . . . . . . . . . 41
4.28 Accounts Receivable . . . . . . . . . . . . . . . . . 41
4.29 Accounts Payable . . . . . . . . . . . . . . . . . . . 41
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Page
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4.30 Inventory 41
4.31 Products . . . . . . . . . . . . . . . . . . . . . . . 41
4.32 No Misrepresentation . . . . . . . . . . . . . . . . . 42
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . 42
5.1 Organization and Good Standing . . . . . . . . . . . . 42
5.2 Authorization of Agreements . . . . . . . . . . . . . . 43
5.3 Capitalization . . . . . . . . . . . . . . . . . . . . 43
5.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . 44
5.5 Corporate Records . . . . . . . . . . . . . . . . . . . 45
5.6 Conflicts; Consents of Third Parties . . . . . . . . . 46
5.7 Issuance of Purchaser Shares . . . . . . . . . . . . . 46
5.8 Financial Statements . . . . . . . . . . . . . . . . . 47
5.9 No Undisclosed Liabilities . . . . . . . . . . . . . . 48
5.10 Periodic SEC Filings . . . . . . . . . . . . . . . . . 48
5.11 Absence of Certain Developments . . . . . . . . . . . 49
5.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 52
5.13 Real Property . . . . . . . . . . . . . . . . . . . . 55
5.14 Tangible Personal Property . . . . . . . . . . . . . . 57
5.15 Intangible Property . . . . . . . . . . . . . . . . . 58
5.16 Material Contracts . . . . . . . . . . . . . . . . . . 60
5.17 Employee Benefits . . . . . . . . . . . . . . . . . . 62
5.18 Labor . . . . . . . . . . . . . . . . . . . . . . . . 66
5.19 Litigation . . . . . . . . . . . . . . . . . . . . . . 67
5.20 Compliance with Laws . . . . . . . . . . . . . . . . . 68
5.21 Environmental Matters . . . . . . . . . . . . . . . . 68
5.22 Insurance . . . . . . . . . . . . . . . . . . . . . . 70
5.23 Related Party Transactions . . . . . . . . . . . . . . 70
5.24 Financial Advisors . . . . . . . . . . . . . . . . . . 71
5.25 Claims to Property . . . . . . . . . . . . . . . . . . 71
5.26 Licenses; Permits; Authorizations . . . . . . . . . . 71
5.27 FCC Matters . . . . . . . . . . . . . . . . . . . . . 72
5.28 Investment in Shares . . . . . . . . . . . . . . . . . 77
5.29 General Partnerships . . . . . . . . . . . . . . . . . 77
5.30 No Misrepresentation . . . . . . . . . . . . . . . . . 78
ARTICLE VI - COVENANTS . . . . . . . . . . . . . . . . . . . . . 78
6.1 Access to Information . . . . . . . . . . . . . . . . . 78
6.2 Conduct of Purchaser's and Radiocoms's Respective
Businesses Pending the Closing . . . . . . . . . . . 79
6.3 Consents and Approvals . . . . . . . . . . . . . . . . 84
6.4 Filings with Governmental Bodies . . . . . . . . . . . 85
6.5 Other Actions . . . . . . . . . . . . . . . . . . . . . 86
6.6 Preservation of Records . . . . . . . . . . . . . . . . 86
6.7 Publicity . . . . . . . . . . . . . . . . . . . . . . . 87
6.8 Agreements with Respect to Other Transactions . . . . . 87
6.9 Tax and Accounting Matters . . . . . . . . . . . . . . 87
6.10 No Solicitation . . . . . . . . . . . . . . . . . . . 89
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Page
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6.11 Recapitalization; Refinancing of Intercompany Debt . . . . 90
6.12 Updates to Disclosure Letters . . . . . . . . . . . . 90
6.13 Non-Compete . . . . . . . . . . . . . . . . . . . . . 90
6.14 FCC Matters . . . . . . . . . . . . . . . . . . . . . 91
6.15 Indemnification; Directors and Officers Insurance . . 91
6.16 Pension Schemes . . . . . . . . . . . . . . . . . . . 92
6.17 Transfer of the Business to Radiocoms and Its
Subsidiaries . . . . . . . . . . . . . . . . . . . . 92
ARTICLE VII - CONDITIONS TO CLOSING . . . . . . . . . . . . . . . 93
7.1 Conditions Precedent to Obligations of Purchaser and
Seller . . . . . . . . . . . . . . . . . . . . . . . 93
7.2 Conditions Precedent to Obligations of Purchaser . . . 94
7.3 Conditions Precedent to Obligations of Seller . . . . . 95
ARTICLE VIII - DOCUMENTS TO BE DELIVERED . . . . . . . . . . . . 98
8.1 Documents to be Delivered by Seller . . . . . . . . . . 98
8.2 Documents to be Delivered by Purchaser . . . . . . . . 98
ARTICLE IX - INDEMNIFICATION . . . . . . . . . . . . . . . . . . 99
9.1 Indemnification . . . . . . . . . . . . . . . . . . . . 99
9.2 Limitations on Indemnification for Breaches of
Representations and Warranties . . . . . . . . . . . 101
9.3 Indemnification Procedures . . . . . . . . . . . . . . 101
ARTICLE X - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 105
10.1 Certain Definitions . . . . . . . . . . . . . . . . . 105
10.2 Survival of Representations and Warranties . . . . . . 111
10.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . 112
10.4 Further Assurances . . . . . . . . . . . . . . . . . . 112
10.5 Entire Agreement; Amendments and Waivers . . . . . . . 112
10.6 Governing Law . . . . . . . . . . . . . . . . . . . . 112
10.7 Table of Contents and Headings . . . . . . . . . . . . 113
10.8 Notices . . . . . . . . . . . . . . . . . . . . . . . 113
10.9 Severability . . . . . . . . . . . . . . . . . . . . . 114
10.10 Binding Effect; Assignment . . . . . . . . . . . . . 114
EXHIBITS
A Term Sheet for Redeemable Preference Stock
B Term Sheet for Delayed Drawdown Senior Subordinated Note
C Term Sheet for Support Services Agreement
D Form of Registration Rights Agreement
E Term Sheet for Warrants
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of June 18, 1996 (the
"Agreement"), between Intek Diversified Corporation, a Delaware
corporation ("Purchaser"), and Securicor Communications Limited, a
corporation formed under the laws of England and Wales ("Seller"), a
wholly owned indirect subsidiary of Securicor plc and the sole
shareholder of Securicor Radiocoms Limited, a corporation formed under
the laws of England and Wales ("Radiocoms").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Seller is currently engaged, through Radiocoms and
its Subsidiaries (and previously was engaged through certain
Affiliates), in the Business (as defined below); and
WHEREAS, (i) as of the date hereof, Seller owns 100,000
ordinary shares, pound 1.00 par value per share (the "Existing Shares") and
(ii) as of the Closing, Seller will own an aggregate of 100,000
deferred shares, pound 1.00 par value per share (the "Deferred Shares"),
and an aggregate of 150,000 ordinary shares, $0.10 par value per share
(the "Ordinary Shares" and, collectively with the Deferred Shares, the
"Shares"), and an aggregate of 20,000 redeemable preference shares,
$1,000 par value per share (the "Preferred Shares"), of Radiocoms,
which Shares and Preferred Shares will constitute, at the time of the
Closing, all of the issued share capital of Radiocoms; and
WHEREAS, Radiocoms owns (i) an aggregate of 925,850 shares
of Series I Class B Preferred Stock, $.01 par value per share (the
"EFJ Shares") of E.F. Johnson Company, a Minnesota corporation
("EFJ"), and (ii) a warrant providing for the purchase of up to
291,790 shares of the common stock, $.01 par value per share, of EFJ
(the "EFJ Warrant"); and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser
desires to purchase from Seller, the Shares, for the purchase price
and upon the terms and conditions hereinafter set forth; and
WHEREAS, the consummation of the transactions contemplated
hereby is a condition precedent to, and is conditioned upon, the
consummation of certain other transactions pursuant to that certain
Sale of Assets and Trademark License Agreement, dated as of the date
hereof (the "Midland Agreement"), by and among Purchaser, Midland
International Corporation, a Delaware
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<PAGE>
corporation ("Midland US") and a wholly-owned indirect subsidiary of
Simmonds Capital Limited, an Ontario corporation ("Simmonds"), and
Simmonds (collectively with each other agreement, document, instrument
or certificate contemplated by the Midland Agreement, the "Other
Transaction Documents") (the transactions contemplated by the Midland
Agreement being referred to herein collectively as the "Other
Transactions" and, together with the transactions contemplated by this
Agreement, as the "Transactions"); and
WHEREAS, simultaneously with the execution of this
Agreement, Purchaser has obtained the unconditional written agreement
(the "Voting Agreement") of Simmonds and RoameR One Holdings, Inc., as
stockholders of Purchaser, (i) to vote all of their respective shares
of the common stock of Purchaser in favor of the approval of the
issuance of the Purchaser Shares (as hereinafter defined) pursuant
hereto and (ii) not to sell, transfer or dispose of any such shares
prior to the consummation of the Transactions or the termination of
this Agreement except in accordance with the terms of the Voting
Agreement; and
WHEREAS, the consummation of the Transactions will be
mutually beneficial to Purchaser and Seller; and
WHEREAS, certain terms used in this Agreement are defined in
Section 10.1.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter contained, the parties
hereby agree as follows:
ARTICLE I
SALE AND PURCHASE OF SHARES
1.1 Sale and Purchase of Shares. Upon the terms and
---------------------------
subject to the conditions contained herein, on the Closing Date,
Seller shall sell, assign, transfer, convey and deliver to Purchaser,
and Purchaser shall purchase from Seller, the Shares.
ARTICLE II
PURCHASE PRICE AND PAYMENT
2.1 Amount and Payment of Purchase Price. In consideration
------------------------------------
of the sale of the Shares to Purchaser, the Purchaser shall deliver to
Seller, on the Closing Date,
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<PAGE>
25,000,000 shares of the common stock, $.01 par value (the "Purchaser
Common Stock"), of Purchaser (the "Purchaser Shares").
ARTICLE III
CLOSING AND TERMINATION
3.1 Closing Date. Subject to the satisfaction of the
------------
conditions set forth in Sections 7.1, 7.2 and 7.3 hereof (or the
waiver thereof by the party or parties entitled to waive that
condition), the closing of the sale and purchase of the Shares
provided for in Section 1.1 hereof (the "Closing") shall take place at
10:00 a.m., New York City time, at the offices of Weil, Gotshal &
Manges LLP, located at 767 Fifth Avenue, New York, New York (or at
such other place as the parties may designate in writing), five (5)
Business Days after the conditions listed in Article VII have been
satisfied or waived or on such other date as Seller and Purchaser may
designate in writing. The date on which the Closing shall be held is
referred to in this Agreement as the "Closing Date."
3.2 Termination of Agreement. This Agreement may be
------------------------
terminated prior to the Closing as follows:
(a) At the election of Seller or Purchaser after December
31, 1996, if the Closing shall not have occurred by the close of
business on such date, provided that the terminating party is not in
default of any of its obligations hereunder;
(b) by mutual written consent of Seller and Purchaser;
(c) by Seller or Purchaser, if there shall be in effect a
final nonappealable Order of a Governmental Body of competent
jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby or the Other
Transactions; it being agreed that the parties hereto (or Purchaser,
in the case of any Order that relates solely to the Other
Transactions) shall promptly appeal any adverse determination which is
not nonappealable (and pursue such appeal with reasonable diligence);
(d) by Seller, if (i) there shall have been a breach of any
representation or warranty on the part of Purchaser set forth in this
Agreement, or if any representation or warranty of Purchaser shall
have become untrue, in either case such that the condition set forth
in Section 7.3(a) would be incapable of being satisfied by December
31, 1996 (or as otherwise extended) or (ii) there shall have been a
breach by Purchaser of any of its
<PAGE>
<PAGE>
covenants or agreements having a Material Adverse Effect on Purchaser
and its Subsidiaries, taken as a whole, or materially adversely
affecting (or materially delaying) the consummation of the
transactions contemplated hereby or the Other Transactions, and
Purchaser has not cured such breach within ten Business Days after
notice by Seller thereof, provided that Seller has not breached any of
its obligations hereunder;
(e) by Purchaser, if (i) there shall have been a breach of
any representation or warranty on the part of Seller set forth in this
Agreement or if any representation or warranty of Seller shall have
become untrue, in either case such that the condition set forth in
Section 7.2(a) would be incapable of being satisfied by December 31,
1996 (or as otherwise extended); or (ii) there shall have been a
breach by Seller of its covenants or agreements hereunder having a
Material Adverse Effect on the Business or Radiocoms and its
Subsidiaries, taken as a whole, or materially adversely affecting (or
materially delaying) the consummation of the transactions contemplated
hereby or the Other Transactions, and Seller has not cured such breach
within ten Business Days after notice by Purchaser thereof, provided
that Purchaser has not breached any of its obligations hereunder;
(f) by Seller, if the Board of Directors of Purchaser shall
have withdrawn, modified or changed its approval or recommendation of
this Agreement and the transactions contemplated hereby, or shall have
failed to give such recommendation or to call, give notice of, convene
or hold the Purchaser Stockholders' Meeting in accordance with the
terms of this Agreement, or shall have adopted any resolution to
effect any of the foregoing;
(g) by Purchaser, if the Board of Directors of Purchaser or
a Special Committee thereof, in its good faith judgment, after
consultation with independent legal counsel, shall have withdrawn,
modified or changed its approval or recommendation of this Agreement
and the transactions contemplated hereby (having determined that it is
necessary to do so in order to comply with its fiduciary duties to
stockholders under applicable law);
(h) by Purchaser or Seller, if Purchaser shall have duly
called and convened the Purchaser Stockholders' Meeting and shall have
failed to obtain the requisite vote of its stockholders; or
(i) by Seller, if, at any time after sixty days from the
date hereof, the closing conditions set forth in Section 7.3(j) or
Section 7.3(k) shall not be satisfied.
<PAGE>
<PAGE>
3.3 Procedure Upon Termination. In the event of
--------------------------
termination by Purchaser or Seller pursuant to Section 3.2 hereof,
written notice thereof shall forthwith be given to the other party,
and this Agreement shall terminate, and the purchase of the Shares
hereunder shall be abandoned, without further action by Purchaser or
Seller. If this Agreement is terminated, as provided herein, each
party shall redeliver all documents, work papers and other material of
any other party relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof, to the party
furnishing the same, or, promptly following the request of the
furnishing party, destroy all such documents, work papers or other
materials.
3.4 Effect of Termination. In the event that this
---------------------
Agreement is validly terminated as provided herein, then each of the
parties shall be relieved of their duties and obligations arising
under this Agreement after the date of such termination, and such
termination shall be without liability to Purchaser, Radiocoms or
Seller; provided, however, that the provisions of this Section 3.4 and
-------- -------
Sections 3.5, 10.3 and 10.6 hereof shall survive any such termination
and shall be enforceable hereunder; and provided, further, that
-------- -------
nothing in this Section 3.4 shall relieve Purchaser or Seller of any
liability for a breach of this Agreement.
3.5 Expense Reimbursement. If this Agreement is terminated
---------------------
by Seller pursuant to Section 3.2(f) or by Purchaser pursuant to
Section 3.2(g), Purchaser shall reimburse Seller and its Affiliates
(not later than ten business days after the submission of statements
therefor) for all documented out-of-pocket fees and expenses actually
and reasonably incurred by any of them or on their behalf in
connection with the consummation of all transactions contemplated by
this Agreement (including, without limitation, fees payable to
investment bankers, counsel to any of the foregoing, and accountants);
provided, however, that such expense reimbursement shall be payable
-------- -------
only if (i)(a) after the date hereof and prior to such termination,
Purchaser (or its agents) had negotiations with a view towards a Third
Party Acquisition or furnished information to a Third Party with a
view towards a Third Party Acquisition and (b) Purchaser consummates a
Third Party Acquisition within twelve months following any such
termination, (ii)(a) after the date hereof and prior to such
termination a Third Party (other than an Third Party referred to in
clause (a)(i)) submitted a proposal for a Third Party Acquisition to
Purchaser (or its agents), or expressed an interest in a Third Party
Acquisition to Purchaser (or its agents) and (b) Purchaser consummates
a Third Party Acquisition with such Third Party or an Affiliate
thereof within twelve months following any such termination or
(iii) Purchaser
<PAGE>
<PAGE>
accepted a proposal for a Third Party Acquisition on or prior to the
date of termination pursuant to Section 3.2(f) or Section 3.2(g).
"Third Party Acquisition" means the occurrence of any of the
following events: (i) the acquisition of Purchaser by merger or
otherwise by any Person (which includes a "person" as such term is
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) or entity other than Seller or any Affiliate thereof (a
"Third Party"); (ii) the acquisition by a Third Party of more than 50%
of the total assets of Purchaser and its subsidiaries, taken as a
whole; or (iii) the acquisition by a Third Party of 50% or more of the
outstanding shares of Purchaser Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser that:
4.1 Organization and Good Standing. Each of Radiocoms and
------------------------------
Seller is a corporation duly organized, validly existing and in good
standing under the Laws of England and Wales. EFJ is a corporation
validly existing and in good standing under the Laws of Minnesota.
Each of Radiocoms, Seller, and, to the knowledge of Seller, EFJ, has
all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now conducted.
Radiocoms is duly qualified or authorized to do business as a foreign
corporation and is in good standing under the Laws of each juris-
diction in which it owns or leases real property and each other
jurisdiction in which the conduct of its business or the ownership of
its properties requires such qualification or authorization, except
where the failure to be so qualified or authorized could not
reasonably be expected to have a Material Adverse Effect on Radiocoms
and its Subsidiaries, taken as a whole. Radiocoms is not subject to
any agreement, commitment or understanding which restricts or may
restrict the conduct of the Business in any jurisdiction or location
in any material respect. Copies of the Memorandum of Association and
Articles of Association (together with all amendments thereto) of
Radiocoms and the articles of incorporation of EFJ have heretofore
been provided or made available to Purchaser and such copies are true,
correct and complete copies of such instruments.
<PAGE>
<PAGE>
4.2 Authorization of Agreement. Seller has all requisite
--------------------------
power, authority and legal capacity to execute and deliver this
Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by Seller
in connection with the consummation of the transactions contemplated
by this Agreement (together with this Agreement, the "Seller
Documents"), and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and each of
the Seller Documents has been duly and validly authorized by the Board
of Directors of Seller, and no other corporate proceedings on the part
of Seller will be necessary to authorize this Agreement and the
transactions contemplated hereby or the Other Transactions. Assuming
the due authorization, execution and delivery by the other parties
hereto and thereto, this Agreement constitutes, and each of the Seller
Documents when executed and delivered will constitute, legal, valid
and binding obligations of Seller, enforceable against Seller
in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar Laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity)
(the "Bankruptcy Exception").
4.3 Capitalization.
--------------
(a) As of the date hereof, the authorized capital stock of
(i) Radiocoms consists of 100,000 Existing Shares (ii) EFJ consists of
10,000,000 common shares, $.01 par value per share, 80,000 shares of
preferred stock, $100.00 par value per share, and 2,000,000 shares of
Class B Preferred Stock, $.01 per value per share. As of the date
hereof, there are (i) 100,000 Existing Shares issued and outstanding
and no shares of any class are held by Radiocoms as treasury stock and
(ii) to the knowledge of Seller, 10,000,000 shares of common stock of
EFJ, 80,000 shares of preferred stock of EFJ and 2,000,000 shares of
Class B Preferred Stock of EFJ issued and outstanding. As of the
Closing Date, there will be 100,000 Deferred Shares, 150,000 Ordinary
Shares and 20,000 shares of Radiocoms Preferred Stock issued and
outstanding, and no shares of any class will be held by Radiocoms as
treasury stock. All of the Existing Shares were duly authorized for
issuance and are validly issued, fully paid and non-assessable. Upon
issuance thereof prior to the Closing, all of the Shares and the
Preferred Shares will have been duly authorized for issuance and
validly issued, fully paid and non-assessable. To the knowledge of
Seller, the EFJ Shares and the
<PAGE>
<PAGE>
EFJ Warrant were duly authorized for issuance and are validly issued,
fully paid and non-assessable.
(b) Except for the EFJ Warrant or as set forth in Section
4.3(b) of the disclosure letter delivered by Seller to Purchaser on
the date hereof (the "Radiocoms Disclosure Letter"), there is no
existing option, warrant, call, right, commitment or other agreement
of any character to which Seller or Radiocoms or, to the knowledge of
Seller, EFJ is a party requiring, and there are no securities of
Radiocoms or, to the knowledge of Seller, EFJ, as the case may be,
outstanding which upon conversion or exchange would require, the
issuance, sale or transfer of any additional shares of capital stock
or other equity securities of Radiocoms or EFJ, as the case may be, or
other securities convertible into, exchangeable for or evidencing the
right to subscribe for or purchase shares of capital stock or other
equity securities of Radiocoms or EFJ, as the case may be. Except as
set forth in Section 4.3(b) of the Radiocoms Disclosure Letter,
neither Seller nor Radiocoms, nor, to the knowledge of Seller, EFJ is
a party to any voting trust or other voting agreement with respect to
any of the shares of Common Stock or the EFJ Shares or to any
agreement relating to the issuance, sale, redemption, transfer or
other disposition of the capital stock of Radiocoms or EFJ, as the
case may be, except for the EFJ Warrant.
4.4 Subsidiaries.
------------
(a) Set forth in Section 4.4(a) of the Radiocoms Disclosure
Letter is the name of each of the Subsidiaries of Radiocoms and any
Affiliate of Radiocoms that is conducting (including through ownership
of properties or through its employees) (or has conducted during the
periods covered by the Radiocoms Financial Statements) the Business (a
"Relevant Affiliate") and, with respect to each such Subsidiary or
Relevant Affiliate, the jurisdiction in which it is incorporated, the
number of shares of its authorized capital stock, the number and class
of shares thereof duly issued and outstanding, the names of all
stockholders and the numbers of shares of stock owned by each
stockholder. Each such stockholder is the record and beneficial owner
of the shares set forth opposite its name in Section 4.4(a) of the
Radiocoms Disclosure Letter. The outstanding shares of capital stock
of each Subsidiary of Radiocoms have been duly authorized, validly
issued and fully paid and are non-assessable.
(b) All shares of Subsidiaries that are set forth in
Section 4.4(a) of the Radiocoms Disclosure Letter are owned by such
stockholders free and clear of all Liens. No shares of capital stock
are held by any Subsidiary of Radiocoms as treasury stock.
<PAGE>
<PAGE>
(c) None of the Subsidiaries of Radiocoms has outstanding
or authorized subscriptions, options, warrants, calls, rights,
commitments or any other agreements of any character obligating any of
them to issue, sell or transfer any shares of its capital stock or
other equity interests or any securities convertible into or
evidencing the right to subscribe for or purchase any shares of such
stock or other equity interests with any Person, and there are no
agreements or understandings with respect to the voting, sale or
transfer of shares of the capital stock of any Subsidiary of Radiocoms
to which Radiocoms or any Subsidiary thereof is a party.
(d) Each Subsidiary of Radiocoms is a corporation duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation. Each Subsidiary of Radiocoms has
full corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted.
Each Subsidiary of Radiocoms is duly qualified and in good standing as
a foreign corporation under the Laws of each jurisdiction in which the
conduct of its business or the ownership of its assets requires such
qualification, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect on Radiocoms
and its Subsidiaries, taken as a whole. No Subsidiary of Radiocoms is
subject to any agreement, commitment or understanding which restricts
or may restrict the conduct of the Business in any jurisdiction or
location in any material respect. Copies of the Memorandum of
Association and Articles of Association or equivalent organizational
documents (together with all amendments thereto) of each Subsidiary of
Radiocoms have heretofore been provided or made available to Purchaser
and such copies are true, correct and complete copies of such
instruments.
(e) Except as set forth in Section 4.4(e) of the Radiocoms
Disclosure Letter, neither Radiocoms nor any of its Subsidiaries owns,
beneficially or of record, any shares of capital stock or any other
security of any corporation or other legal entity, or has any option
or obligation to acquire any such stock or other security, or has any
investments in securities or owns, directly or indirectly, any
interest in any partnership, joint venture or other business
enterprise.
4.5 Corporate Records. The minute books of Radiocoms and
-----------------
each of its Subsidiaries previously made available to Purchaser
contain complete and accurate records, in all material respects, of
all meetings, and accurately reflect, in all material respects, all
other corporate actions of the stockholders and board of directors
(including committees thereof) of Radiocoms and each of its
Subsidiaries. The stock
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certificate books and stock transfer ledgers of Radiocoms and its
Subsidiaries previously made available to the Purchaser are true,
correct and complete. All stock transfer taxes levied or payable with
respect to all transfers of shares of Radiocoms and its Subsidiaries
prior to the date hereof (if any) have been paid and appropriate
transfer tax stamps affixed.
4.6 Conflicts; Consents of Third Parties.
------------------------------------
(a) None of the execution and delivery by Seller of this
Agreement and the Seller Documents, the consummation of the transac-
tions contemplated hereby or thereby (including, without limitation,
the transaction referred to in the second sentence of Section 4.7), or
compliance by Seller with any of the provisions hereof or thereof do
or will (i) conflict with, or result in the breach of, any provision
of the Memorandum of Association or Articles of Association or
comparable organizational documents of Seller, Radiocoms or any of
Radiocoms's Subsidiaries or Relevant Affiliates; (ii) conflict with,
violate, result in the breach or termination of, or constitute a
default under any note, bond, mortgage, indenture, license, agreement
or other instrument or obligation to which Seller, Radiocoms or any of
its Subsidiaries or Relevant Affiliates is a party or by which Seller,
Radiocoms or any of its Subsidiaries or Relevant Affiliates or any of
their respective properties or assets is bound, including, without
limitation, the EFJ Shareholders' Agreement (as hereinafter defined)
and any other such agreement that relates in any way to the EFJ Shares
or the EFJ Warrant; (iii) violate any statute, rule, regulation, order
or decree of any Governmental Body by which Seller, Radiocoms or any
of its Subsidiaries or Relevant Affiliates is bound; or (iv) result in
the creation of any Lien upon the properties or assets of Seller,
Radiocoms or any of its Subsidiaries or Relevant Affiliates except, in
case of clauses (ii), (iii) and (iv), for such violations, breaches or
defaults as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Radiocoms and its
Subsidiaries, taken as a whole, or materially delay the consummation
of the transactions contemplated hereby.
(b) No consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or notification to,
any Person or Governmental Body is required on the part of Seller,
Radiocoms or any Subsidiary or Relevant Affiliate of Radiocoms in
connection with the execution and delivery of this Agreement or the
Seller Documents, or the compliance by Seller or any of its Relevant
Affiliates with any of the provisions hereof or thereof, except
(i) for compliance with the applicable requirements of the HSR Act,
(ii) for amendments to Seller's Schedule 13D filing with respect to
Purchaser to reflect the
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execution of this Agreement and the consummation of the Transactions,
and (iii) where the failure to obtain such consent, waiver, approval,
Order, Permit or authorizations, or to make such declaration or
filing, could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Radiocoms and its
Subsidiaries, taken as a whole, or materially delay the consummation
of the transactions contemplated hereby.
4.7 Ownership and Transfer of Shares; Ownership of EFJ
--------------------------------------------------
Shares and EFJ Warrant. Seller is the sole record and beneficial
----------------------
owner of the Existing Shares (and, as of the Closing, Seller will be
the sole record and beneficial owner of the Shares), and, except as
set forth in Section 4.7 of the Radiocoms Disclosure Letter, Radiocoms
is the sole record and beneficial owner of the EFJ Shares and the EFJ
Warrant, in each case free and clear of any and all Liens, except (in
the case of the EFJ Warrant and the EFJ Warrant) for that certain
Shareholders Agreement, dated as of March 14, 1995, among certain
shareholders of E.F. Johnson Company (the "EFJ Shareholders' Agree-
ment"), to which the EFJ Shares, and any shares issuable pursuant to
the EFJ Warrant, are subject. The EFJ Shares and the EFJ Warrant
constitute all of the securities of EFJ owned or held by Radiocoms or
any of its Affiliates, and were transferred to Radiocoms by Securicor
Communications Inc. in exchange for a one-year note of Radiocoms (the
"EFJ Note") in an aggregate principal amount of $10,000,000 on June
17, 1996. Seller has the corporate power and authority to sell,
transfer, assign and deliver the Shares, and such delivery will convey
to Purchaser good and marketable title to the Shares, free and clear
of any and all Liens.
4.8 Financial Statements. Seller has delivered to
--------------------
Purchaser copies of (a) the audited consolidated balance sheet of
Radiocoms and its Subsidiaries as at September 30, 1995, and the
related audited consolidated statements of income and of cash flows of
Radiocoms and its Subsidiaries (determined as of September 30, 1995)
for the year then ended and (b) the unaudited consolidated balance
sheet of Radiocoms and its Subsidiaries as at March 31, 1996, and the
related statements of income and cash flows of Radiocoms and its
Subsidiaries (determined as of March 31, 1996) for the six-month
period then ended (the "Interim Statements") (such audited and
unaudited statements, including the related notes and schedules
thereto, are referred to herein as the "Radiocoms Financial
Statements"). Each of the Radiocoms Financial Statements (i) is
complete and correct in all material respects, (ii) has been prepared
in accordance with GAAP (subject to normal year-end adjustments in the
case of the Interim Statements), in accordance with the books and
records of Radiocoms and its Subsidiaries and in conformity with the
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practices consistently applied by Radiocoms without modification of
the accounting principles used in the preparation thereof, except that
such financial statements have been conformed to GAAP and except as
set forth in Section 4.8 of the Radiocoms Disclosure Letter,
(iii) except for the issuance of the Shares and the Preferred Shares,
the transfer of the EFJ Shares and EFJ Warrant to Radiocoms, and the
cancellation of intercompany indebtedness, reflects all transactions
relating to the Business including, without limitation, operations of
Radiocoms and the Subsidiaries and any transaction with Securicor plc
or its Subsidiaries, and (iv) presents fairly the financial position,
results of operations and cash flows of Radiocoms and its Subsidiaries
as at the dates and for the periods indicated. The Pro Forma Balance
Sheet (as defined in Section 6.9(c)) will present fairly the financial
position of Radiocoms and its Subsidiaries on a pro forma basis as at
the date indicated, as adjusted as described in Section 6.9(c), in
accordance with GAAP (subject to normal year-end adjustments).
For the purposes hereof, the audited balance sheet of
Radiocoms as at September 30, 1995 and the unaudited balance sheet of
Radiocoms as at March 31, 1996, respectively, are referred to as the
"Radiocoms Balance Sheet" and the "March Radiocoms Balance Sheet,"
respectively, and September 30, 1995 and March 31, 1996, respectively,
are referred to as the "Radiocoms Balance Sheet Date" and the "March
Radiocoms Balance Sheet Date," respectively.
4.9 No Undisclosed Liabilities. Radiocoms and its
--------------------------
Subsidiaries have no indebtedness, obligations or liabilities of any
kind (whether accrued, absolute, contingent or otherwise, and whether
due or to become due) (a) that would be required by GAAP to be
reflected in, reserved against or otherwise described in the
consolidated balance sheet of Radiocoms and its Subsidiaries
(including the notes thereto) or (b) which could reasonably be
expected to have a Material Adverse Effect on Radiocoms and its
Subsidiaries, taken as a whole, except (i) as set forth on the March
Radiocoms Balance Sheet or in the notes thereto, (ii) for liabilities
and obligations incurred in the ordinary course of business consistent
with past practice since the March Radiocoms Balance Sheet Date and
(iii) as set forth in Section 4.9 of the Radiocoms Disclosure Letter.
4.10 Absence of Certain Developments. Except as expressly
-------------------------------
contemplated by this Agreement or as set forth in Section 4.10 of the
Radiocoms Disclosure Letter, since the Radiocoms Balance Sheet Date:
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(a) there has not been any Material Adverse Change nor has
there occurred any event which is reasonably likely to result in a
Material Adverse Change with respect to the Business or Radiocoms and
its Subsidiaries, taken as a whole;
(b) there has not been any damage, destruction or loss,
whether or not covered by insurance, with respect to the property and
assets of the Business having a replacement cost of more than pound 10,000
for any single loss or pound 10,000 for all such losses;
(c) there has not been any declaration, setting aside or
payment of any dividend or other distribution in respect of any shares
of capital stock of Radiocoms or any of its Subsidiaries or any
repurchase, redemption or other acquisition by Seller, Radiocoms or
any Subsidiary of Radiocoms of any outstanding shares of capital stock
or other securities of, or other ownership interest in, Radiocoms or
any of its Subsidiaries, except for (i) dividends to Radiocoms by any
of its wholly owned Subsidiaries and (ii) Seller's acquisition of the
Shares and the Preferred Shares as contemplated by this Agreement;
(d) neither Radiocoms nor any or its Subsidiaries has
issued any equity securities or any securities convertible into or
exchangeable for equity securities of Radiocoms or any of its
Subsidiaries, other than the Shares and the Preferred Shares;
(e) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has awarded or paid any bonuses to employees of
the Business or Radiocoms with respect to the fiscal year ended
September 30, 1995 and the period ended March 31, 1996, except to the
extent accrued on the Radiocoms Balance Sheet or the March Radiocoms
Balance Sheet, or entered into any employment, deferred compensation,
severance or similar agreement (or amended any such agreement) or
agreed to increase the compensation payable or to become payable by it
to any of its directors, officers, employees, agents or
representatives or agreed to increase the coverage or benefits
available under any severance pay, termination pay, vacation pay,
company awards, salary continuation for disability, sick leave,
deferred compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan, payment or arrange-
ment made to, for or with such directors, officers, employees, agents
or representatives (other than normal increases in the ordinary course
of business consistent with past practice and that in the aggregate
have not resulted in a material increase in the benefits or compens-
ation expense of Radiocoms and its Subsidiaries, taken as a whole);
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(f) there has not been any change by Radiocoms or any of
its Subsidiaries or Relevant Affiliates in accounting or Tax reporting
principles, methods or policies relating to the Business;
(g) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has entered into any transaction or Contract or
conducted its business related to the Business other than in the ordi-
nary course consistent with past practice, and no Relevant Affiliate
of Radiocoms has entered into any transaction or Contract or conducted
any business related to the Business other than in the ordinary course
consistent with past practice, except for the acquisition by Radiocoms
of the EFJ Shares, the EFJ Warrant and the issued and outstanding
capital stock of Linear Modulation Technology Limited ("LMT") and
Securicor Electronics Limited ("SEL");
(h) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has failed to promptly pay and discharge current
liabilities of the Business, except where disputed in good faith by
appropriate proceedings;
(i) neither Radiocoms nor any of its Subsidiaries has made
any loans (other than as evidenced by the EFJ Note), advances or
capital contributions to, or investments in, any Person or paid any
fees or expenses to Seller or any Affiliate of Seller;
(j) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has mortgaged, pledged or subjected to any Lien
any assets related to the Business, or acquired any assets or sold,
assigned, transferred, conveyed, leased or otherwise disposed of any
assets of Radiocoms or its Subsidiaries or Relevant Affiliates related
to the Business, except for (i) assets acquired or sold, assigned,
transferred, conveyed, leased or otherwise disposed of in the ordinary
course of business consistent with past practice, (ii) the transfer of
the ownership of the issued and outstanding capital stock of LMT and
SEL from Seller to Radiocoms on May 14, 1996 and (iii) the acquisition
by Radiocoms of the EFJ Shares and the EFJ Warrant from Securicor
Communications Inc. on June 17, 1996;
(k) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has discharged or satisfied any Lien related to
the Business, or paid any obligation or liability (fixed or
contingent) related to the Business, except (i) in the ordinary course
of business consistent with past practice and which, in the aggregate,
would not be material to Radiocoms and its Subsidiaries, taken as a
whole, and (ii) for the refinancing of
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all of the outstanding indebtedness owed by Radiocoms to Seller and
its Affiliates in connection with the issuance of the Preferred
Shares;
(l) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has canceled or compromised any debt or claim
related to the Business or amended, canceled, terminated,
relinquished, waived or released any Contract or right related to the
Business except in the ordinary course of business consistent with
past practice and which, in the aggregate, would not be material to
the Business or Radiocoms and its Subsidiaries, taken as a whole;
(m) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has instituted or settled any material Legal Pro-
ceeding related to the Business;
(n) neither the Business nor Radiocoms or any of its
Subsidiaries has suffered any extraordinary loss or extraordinary
losses (as defined in Opinion No. 30 of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
any amendments or interpretations thereof) (individually, an
"Extraordinary Loss" and, collectively, "Extraordinary Losses");
(o) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has transferred or granted any material rights
under any concessions, leases, licenses, agreements, patents,
inventions, trademarks, trade names, service marks, brandmarks, brand
names, copyrights or the like, or with respect to any know-how, in any
case related to the Business;
(p) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has received any notice or citation for any
violation of, nor, to the knowledge of Seller, has any complaint been
filed with the Department of Trade and Industry ("DTI") alleging a
violation of any rule, regulation or policy of the DTI related to the
Business, or allowed any equipment authorization related to the
Business issued by the FCC to Radiocoms or any of its Subsidiaries or
Relevant Affiliates to lapse or be impaired in any manner, or operated
any of its businesses related to the Business in any manner not in
compliance with its FCC equipment authorizations and all applicable
DTI or FCC rules, regulations and policies; and
(q) none of Seller or its Relevant Affiliates (on behalf of
Radiocoms or any Subsidiary thereof), Radiocoms or any Subsidiary of
Radiocoms has agreed to do anything set forth in this Section 4.10.
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4.11 Taxes.
-----
(a) (A) All material Tax Returns required to be filed by or
on behalf of Radiocoms and each of its Subsidiaries and Relevant
Affiliates, or the Affiliated Group(s) of which any of them is or was
a member, have been duly and timely filed with the appropriate taxing
authorities in all jurisdictions in which such Tax Returns are
required to be filed (after giving effect to any valid extensions of
time in which to make such filings), and all such Tax Returns were
true, complete and correct in all material respects; (B) all Taxes
payable by or on behalf of Radiocoms, its Subsidiaries and Relevant
Affiliates, either directly, as part of an Affiliated Group Tax
Return, or otherwise, have been fully and timely paid, except to the
extent adequately reserved for in accordance with GAAP on the March
Radiocoms Balance Sheet, and adequate reserves or accruals for Taxes
related to the Business have been provided in accordance with GAAP on
the March Radiocoms Balance Sheet with respect to any period through
the date thereof for which Tax Returns have not yet been filed or for
which Taxes are not yet due and owing; and (C) no agreement, waiver or
other document or arrangement extending or having the effect of
extending the period for assessment or collection of Taxes related to
the Business (including, but not limited to, any applicable statute of
limitation) has been executed or filed with any taxing authority by or
on behalf of Radiocoms or any of its Subsidiaries or Relevant
Affiliates, or any Affiliated Group(s) of which any of them is or was
a member.
(b) Radiocoms and each of its Subsidiaries and Relevant
Affiliates has complied in all material respects with all applicable
Laws, rules and regulations relating to the payment and withholding of
Taxes related to the Business and has duly and timely withheld from
employee salaries, wages and other compensation related to the
Business and has paid over to the appropriate taxing authorities all
amounts required to be so withheld and paid over for all periods under
all applicable Laws.
(c) Purchaser has received (A) complete copies of all
material income, franchise or corporation Tax Returns of Radiocoms and
each of its Subsidiaries and Relevant Affiliates (or, in the case of
Tax Returns filed for an Affiliated Group, the portion of such Tax
Returns relating to Radiocoms or any of its Subsidiaries or Relevant
Affiliates) relating to the taxable periods since October 1, 1993 and
(B) details of all material issues of which Seller has knowledge
raised by any taxing authority within the last six years relating to
any material Taxes due from Radiocoms and each of its Subsidiaries and
Relevant Affiliates with respect to the income, assets or operations
of the Business.
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(d) No claim has been made by a taxing authority in a
jurisdiction where Radiocoms or any of its Subsidiaries or Relevant
Affiliates does not file an income, franchise or corporation Tax
Return such that Radiocoms or such Subsidiary or Relevant Affiliate is
or may be subject to taxation related to the Business by that
jurisdiction.
(e) All deficiencies asserted or assessments made as a
result of any examinations by any taxing authority of the Tax Returns
of or covering or including Radiocoms and/or its Subsidiaries or
Relevant Affiliates have been fully paid, and there are no other
audits or investigations by any taxing authority in progress, nor have
Seller, Radiocoms or any of its Subsidiaries or Relevant Affiliates
received any written notice from any taxing authority that it intends
to conduct such an audit or investigation with respect to the
Business. No request for a ruling, clearance or a determination
letter related to the Business is pending with any taxing authority.
No issue has been raised in writing by any taxing authority in any
current or prior examination which, by application of the same or
similar principles, could reasonably be expected to result in a
proposed deficiency against Radiocoms or any Subsidiary or Relevant
Affiliate for any subsequent taxable period that could be material.
(f) Neither Radiocoms (except with one or more of its
Subsidiaries or Relevant Affiliates) nor any Subsidiary or Relevant
Affiliate (except with Radiocoms or another Subsidiary or Relevant
Affiliate) is a party to any Tax Sharing Agreement or similar
agreement or arrangement (whether or not written) pursuant to which it
will have any obligation to make any payments after the Closing.
(g) There are no liens as a result of any unpaid Taxes upon
any of the assets of Radiocoms or any of its Subsidiaries or Relevant
Affiliates.
(h) Radiocoms, its Subsidiaries and its Relevant Affiliates
have not made any payment to or provided any benefit for any of its
officers, employees, former officers or former employees and have not
made or agreed to make a payment of an income nature which would not
be allowable as a deduction in computing its profits for corporation
tax purposes except in the ordinary course of business.
(i) As of the Closing, Radiocoms and its Subsidiaries will
have received payment equal to the tax benefit obtained by the
claimant company for all amounts surrendered as group relief
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in accordance with Section 402 of the Income and Corporation Taxes Act
1988.
(j) Neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has acquired any of its assets by virtue of a
transfer from a group company under Section 171 of the Taxation of
Chargeable Gains Act 1992, except for those specified in Section
4.11(j) of the Radiocoms Disclosure Letter.
(k) No claim has been made under Section 152 of the
Taxation of Chargeable Gains Act 1992, which affects the amount of the
consideration which would be allowable under Section 8 of the Taxation
of Chargeable Gains Act 1992 on a disposal of an asset by Radiocoms or
its Subsidiaries or Relevant Affiliates.
(l) Except for the issuances of the Shares and the
Preferred Shares contemplated by this Agreement, Radiocoms, its
Subsidiaries and its Relevant Affiliates have at no time after April
6, 1965 repaid, redeemed or purchased or agreed to repay, redeem or
purchase, or granted an option under which it may become liable to
purchase, any shares of any class of its issued share capital nor have
they after that date capitalized or agreed to capitalize in the form
of shares or debentures any profits or reserves of any class or
description or otherwise issued or agreed to issue any share capital
other than for the receipt of a new consideration (within the meaning
of Part VI of the Income and Corporation Taxes Act 1988) or passed or
agreed to pass any resolution to do so.
(m) No securities (within the meaning of Part VI of the
Income and Corporation Taxes Act 1988) issued by Radiocoms or any of
its Subsidiaries and its Relevant Affiliates remaining in issue at the
date of the Closing were issued in such circumstances that any
interest or any other distribution out of assets in respect thereof
falls to be treated as a distribution under Section 209(2)(d), (da) or
(e).
(n) Neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has received any capital distribution to which the
provisions of Section 189 of the Taxation of Chargeable Gains Act 1992
could apply.
(o) Except as disclosed in Section 4.11(o) of the Radiocoms
Disclosure Letter, no asset of Radiocoms or its Subsidiaries or
Relevant Affiliates shall be deemed under Sections 178 or 179 of the
Taxation of Chargeable Gains Act 1992 to have been disposed of and
reacquired by virtue of or in consequence of the entering into or
performance of this Agreement or any other event since the Radiocoms
Balance Sheet Date.
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(p) Neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has been a party to or otherwise involved in any
arrangement of which the main purpose was the avoidance of liability
to taxation or any transaction to which any of the following
provisions could apply:
(i) Sections 29-34 of the Taxation of Chargeable Gains
Act 1992;
(ii) Sections 116-118 of the Income and Corporation
Taxes Act 1988;
(iii) Section 399 of the Income and Corporation Taxes
Act 1988; or
(iv) Sections 729-746 or Sections 774-778 of Part XVII
of the Income and Corporation Taxes Act 1988.
4.12 Real Property.
-------------
(a) Section 4.12(a) of the Radiocoms Disclosure Letter
describes (i) all real property and all interests therein owned of
record or beneficially by Radiocoms or any of its Subsidiaries or, by
any Relevant Affiliate of Radiocoms and occupied by or used in the
Business (the "Radiocoms Real Properties"), (ii) all leases of real
property directly or principally related to the Business or to which
Radiocoms or any of its Subsidiaries is a party or by which Radiocoms
or any of its Subsidiaries is bound and (iii) the purposes for which
such properties are used. True, correct and complete copies of all
documents referred to in Section 4.12(a) of the Radiocoms Disclosure
Letter have been delivered or made available to Purchaser.
(b) (i) Radiocoms or one of its Subsidiaries or Relevant
Affiliates (which Relevant Affiliate is identified in Section
4.12(a) of the Radiocoms Disclosure Letter) has (A) good and
marketable title to the Radiocoms Real Properties, free and clear
of all Liens except for imperfections of title, if any, that do
not materially detract from the value of the property subject
thereto, or materially interfere with the manner in which such
property is currently being used or is proposed to be used in the
Business by Radiocoms or any of its Subsidiaries or materially
impair the operations of the Business or Radiocoms or any of its
Subsidiaries and which do not secure obligations for borrowed
money used in the Business or the deferred portion of the
purchase price of acquired property used in the Business
(collectively, the "Radiocoms Permitted Encumbrances"), and
(B) all material easements and rights,
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including, but not limited to, easements for power lines, water
lines, sewers, roadways and other means of ingress and egress,
necessary to conduct the business conducted on the Radiocoms Real
Properties; and none of the Liens set forth in Section 4.12(b) of
the Radiocoms Disclosure Letter has had or could reasonably be
expected to have a Material Adverse Effect on the Business or
Radiocoms and its Subsidiaries, taken as a whole;
(ii) Neither the whole nor any portion of any of the
Radiocoms Real Properties is subject to any pending condemnation
or similar proceeding by any Governmental Body, and Seller does
not know that any such condemnation or taking is threatened or
contemplated;
(iii) Neither Radiocoms nor any of its Subsidiaries is,
or as of the Closing Date will be, in violation of any applicable
Law or Order relating to the Radiocoms Real Properties, except
where the failure to be in compliance with such Law or Order
could not reasonably be expected to have a Material Adverse
Effect on the Business or Radiocoms and its Subsidiaries, taken
as a whole, and no notice from any Governmental Body has been
served upon Radiocoms or any of its Subsidiaries or Affiliates
claiming any material violation thereof or calling attention to
the need for any material work, repairs, construction,
alterations, installations on or in connection with said owned or
leased real properties used in connection with the Business or by
Radiocoms and its Subsidiaries;
(iv) Radiocoms or one of its Subsidiaries or Relevant
Affiliates has obtained all permits, licenses or certificates of
occupancy pertaining to the ownership or operation of any of the
owned or leased real properties of the Business or Radiocoms or
any of its Subsidiaries (including, without limitation, the
Radiocoms Real Properties) that are required to be obtained from
any Governmental Body by a Relevant Affiliate (in connection with
the Business) or by Radiocoms or any of its Subsidiaries, except
where the failure to obtain such permits, licenses or
certificates of occupancy could not reasonably be expected to
have a Material Adverse Effect on the Business or on Radiocoms
and its Subsidiaries, taken as a whole;
(v) Each of the leases of real property referred to in
Section 4.12(a) above is valid and enforceable in accordance with
its terms, subject to the Bankruptcy Exception, and there is not
under any such lease any
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existing breach, default, event of default or event which, with
notice and/or lapse of time, would constitute a breach, default
or event of default (A) by Radiocoms or any of its Subsidiaries
or Relevant Affiliates or (B) to the knowledge of Seller, by any
other party to any such lease, except where such breach, default
or event of default could not reasonably be expected to have a
Material Adverse Effect on the Business or Radiocoms and its
Subsidiaries, taken as a whole;
(vi) No previous or current party to any such lease has
given notice of or made a claim with respect to any breach or
default, the consequences of which, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect on the Business or Radiocoms and its Subsidiaries,
taken as a whole;
(vii) None of the rights of Radiocoms or any of its
Subsidiaries or Relevant Affiliates under any of such leases will
be subject to termination or modification as the result of the
consummation of the transactions contemplated by this Agreement;
and
(viii) No consent or approval of any third party is
required under any of such real property leases to the
consummation of the transactions contemplated hereby.
4.13 Tangible Personal Property.
--------------------------
(a) Section 4.13(a) of the Radiocoms Disclosure Letter sets
forth all leases of personal property related to the Business, other
than leases for motor vehicles, involving annual payments in excess of
pound 10,000 to which Radiocoms or any of its Subsidiaries or Relevant
Affiliates is a party or by which Radiocoms or any of its Subsidiaries
or Relevant Affiliates is bound. True, correct and complete copies of
all documents referred to in Section 4.13(a) of the Radiocoms
Disclosure Letter have been delivered or made available to Purchaser.
(b) (i) Each of the leases of personal property referred
to in Section 4.13(a) is valid and enforceable in accordance with
its terms, subject to the Bankruptcy Exception, and there is not,
under any such lease, any existing breach, default, or event of
default or event which, with notice and/or lapse of time, would
constitute a breach, default or event of default (A) by Radiocoms
or any of its Subsidiaries or Relevant Affiliates or, (B) to the
knowledge of Seller, by any other party to any such lease, except
where such breach, default, event of default could
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not reasonably be expected to have a Material Adverse Effect on
the Business or Radiocoms and its Subsidiaries, taken as a whole;
(ii) No previous or current party to any such lease has
given notice of or made a claim with respect to any breach or
default thereunder, the consequences of which, individually or in
the aggregate, could reasonably be expected to have a Material
Adverse Effect on the Business or Radiocoms and its Subsidiaries,
taken as a whole;
(iii) None of the rights of any of Radiocoms or any of
its Subsidiaries or Relevant Affiliates under any of such leases
will be subject to termination or modification as the result of
the consummation of the transactions contemplated by this
Agreement;
(iv) No consent or approval of any third party is
required under any lease referred to in Section 4.13(a) for the
consummation of the transactions contemplated hereby;
(v) Radiocoms or one of its Subsidiaries or Relevant
Affiliates (which is identified) has good title to all material
items of tangible personal property reflected on the March
Radiocoms Balance Sheet (except as sold or disposed of subsequent
to the date thereof in the ordinary course of business consistent
with past practices), free and clear of Liens; and
(vi) All of the items of tangible personal property not
owned by Radiocoms or one of its Subsidiaries or Relevant
Affiliates, but used in the Business and which, individually or
in the aggregate, are material to the conduct of such business,
are in such condition that upon the return of such properties to
their owners in the current condition of such properties, normal
wear and tear excepted, at the end of the relevant lease terms or
as otherwise contemplated by the applicable agreements with
owners thereof, the obligations of Radiocoms or its Subsidiaries
or Relevant Affiliates (as applicable) to such owners will be
discharged in all material respects.
4.14 Intangible Property. Section 4.14 of the Radiocoms
-------------------
Disclosure Letter sets forth a list of each letters patent, material
trademark, material trade name, registered copyright, material service
mark, and any other similar, registered property or trade right owned
by Radiocoms or any of its Subsidiaries, or owned by a Relevant
Affiliate of Radiocoms and used in the Business (collectively,
together with all know-
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how, processes, formulae, trade secrets, inventions, designs,
industrial models, computer programs and other technical data or
drawings, the "Radiocoms Intellectual Property"), and sets forth all
applications and licenses for any of the foregoing, and all licenses
or similar agreements or arrangements relating to the operation of the
Business or of Radiocoms or any of its Subsidiaries or to which
Radiocoms or any of its Subsidiaries is a party or subject (property
of the foregoing type being hereinafter collectively referred to
as the "Radiocoms IP Licenses"), including all licenses or similar
agreements or arrangements by which Radiocoms or its Subsidiaries or
Relevant Affiliates are authorized to use intellectual property of a
third party related to the Business or have granted to a third party
rights to use intellectual property related to the Business. Except
as indicated in Section 4.14 of the Radiocoms Disclosure Letter:
(a) Radiocoms or one of its Subsidiaries owns all title and
interest in, and, to the knowledge of Seller, right and authority to
use, in connection with the conduct of the Business as such Business
is presently conducted, all of the Radiocoms Intellectual Property and
Radiocoms IP Licenses listed in Section 4.14 of the Radiocoms
Disclosure Letter, free and clear of all Liens. The Radiocoms
Intellectual Property and Radiocoms IP Licenses (other than licenses
granted to third parties), to the knowledge of Seller, constitute all
of the intellectual property that Radiocoms needs to conduct the
Business as currently conducted. The operation of the Business by
Radiocoms and its Subsidiaries or Relevant Affiliates does not, to the
knowledge of Seller, infringe upon, misappropriate or violate (in each
case, in any material respect) any valid patent, trade name,
trademark, service mark, trade secret, brand mark and brand name and
other property or trade right of any other person, firm or
corporation. None of Radiocoms or any of its Subsidiaries or
Affiliates has received any notice or has knowledge pertaining to any
actual or threatened, infringement, misappropriation or violation of
the items of intellectual property listed in the preceding sentence;
(b) There are no asserted or, to the knowledge of Seller,
threatened, governmental, judicial or adversarial proceedings,
hearings, arbitrations, disputes or claims with respect to any of the
Radiocoms Intellectual Property or Radiocoms IP Licenses listed in
Section 4.14 of the Radiocoms Disclosure Letter;
(c) To the knowledge of Seller, no third party is
infringing or engaging in an unauthorized use of the Radiocoms
Intellectual Property or Radiocoms IP Licenses; and
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(d) To the knowledge of Seller, neither Seller nor any of
its Affiliates has made any disclosure to a third party that would
materially impair the value of any confidential Radiocoms Intellectual
Property or confidential Radiocoms IP Licenses, and Seller and its
Affiliates have treated such confidential information in a manner
reasonably designed to preserve its confidentiality.
4.15 Material Contracts.
------------------
(a) Section 4.15(a) of the Radiocoms Disclosure Letter sets
forth (i) each oral or written agreement, arrangement or commitment of
any nature relating to the Business or to which Radiocoms or any of
its Subsidiaries is a party or by which it is bound involving (A) a
commitment of more than pound 50,000 or (B) the purchase or sale of any
assets relating to the Business or of Radiocoms or its Subsidiaries
having a book value or more than pound 50,000 and (ii) all (A) loan or
credit agreements, indentures, guaranties, promissory notes, pledge
agreements, mortgages, security agreements or other instruments in
respect of borrowed funds, (B) distributorship, agency,
representation, dealer or similar agreements, (C) covenants not to
compete or other agreements or understandings which would restrict the
distribution or sale of any of the products of the Business or of
Radiocoms or any of its Subsidiaries in any geographical area or to
any person or class of persons, or which in any way affects the price
or other terms at which the Business or Radiocoms or any of its
Subsidiaries or any agent or representative of the Business or
Radiocoms or any of its Subsidiaries may sell products or services,
(D) contracts or commitments for capital expenditures, and
(E) partnership or joint venture agreements. Agreements, arrangements
and commitments of the types described in subsections (i) and (ii)
above are hereinafter collectively referred to as the "Radiocoms
Material Agreements."
(b) Each Radiocoms Material Agreement is valid and
enforceable in accordance with its terms, subject to the Bankruptcy
Exception. (i) Neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates nor, to the knowledge of Seller, any other party
thereto, is in breach of or in default under any Radiocoms Material
Agreement, (ii) to the knowledge of Seller, there has not occurred any
event which, after the giving of notice or the lapse of time or both,
would constitute a default under, or result in a breach of, any
Radiocoms Material Agreement, (iii) no previous or current party to
any Radiocoms Material Agreement has given notice of or made a claim
or, to the knowledge of the Seller, threatened to make a claim, with
respect to any breach or default thereunder, the consequences of
which, in the case of clauses (i), (ii) and (iii), individually or in
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the aggregate, could reasonably be expected to have a Material Adverse
Effect on the Business or Radiocoms and its Subsidiaries, taken as a
whole, (iv) none of the rights of Radiocoms or any of its Subsidiaries
or Affiliates under any of the Radiocoms Material Agreements will be
subject to termination or modification as a result of the consummation
of the transactions contemplated by this Agreement, (v) no consent or
approval of any third party is required under any Radiocoms Material
Agreement to the consummation of the transactions contemplated hereby
and (vi) no power of attorney that remains in effect has been granted
by Radiocoms or its Subsidiaries.
(c) Section 4.15(c) of the Radiocoms Disclosure Letter sets
forth a true and accurate list of all oral or written agreements,
arrangements or commitments of any nature between Radiocoms or any of
its Subsidiaries or Affiliates, on the one hand, and EFJ, on the other
hand.
4.16 Employee Benefits.
-----------------
(a) For purposes of this Agreement, the following terms
shall have the following meanings: (i) "Approved" means approved by
the Board of Inland Revenue as an exempt approved scheme (within the
meaning of Section 592 Income and Corporation Taxes Act of 1988) and
"Approval" has the corresponding meaning; (ii) "Retirement/Death/
Disability Benefit" means any pension, lump sum, gratuity or other
like benefit given or to be given on retirement or on death, or in
anticipation of retirement, or, in connection with past service after
retirement or death, or to be given on or in anticipation of, or in
connection with any change in the nature of the service of the
employee in question or given or to be given on or in connection with
the illness, injury or disability of, or suffering of any accident by,
an employee of Radiocoms or any of its Subsidiaries or Relevant
Affiliates; (iii) "Scheme" means those of the Schemes participated in
by Radiocoms, or any of its Subsidiaries or Relevant Affiliates, such
Schemes being referred to on Section 4.16(b) of the Radiocoms
Disclosure Letter; (iv) "Scheme Documents" means the documents
constituting and governing a Scheme (including all notices,
announcements and explanatory literature of current effect) and all
documents relating to the participation by Radiocoms or any of its
Subsidiaries or Relevant Affiliates in and obligations of those
entities under such Scheme; (v) "Trustees" means the trustees of a
Scheme and includes their predecessors as trustees; (vi) "Valuation"
means the most recent actuarial valuation of a Scheme as set forth on
Section 4.16(b) of the Radiocoms Disclosure Letter with respect to
each Scheme where such a Valuation is required by the Inland Revenue;
and (vii) "Valuation Date" and "Valuation Report" mean, respectively,
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the date as at which the Valuation was carried out and the report of
the actuary preparing the Valuation.
(b) Section 4.16(b) of the Radiocoms Disclosure Letter sets
forth a list of all Schemes. All information made available to
Purchaser in connection with each Scheme is complete and accurate in
all material respects. Except pursuant to the Schemes, neither
Radiocoms nor any of its Subsidiaries or Relevant Affiliates has paid,
provided or contributed toward, and neither Radiocoms nor any of its
Subsidiaries or Relevant Affiliates is under any obligation or
commitment (whether or not legally enforceable) to pay, provide or
contribute towards, any Retirement/Death/Disability Benefit for and or
in respect of any present or past employee (or any spouse, child or
dependent of any them) of Radiocoms or any of its Subsidiaries or
Relevant Affiliates.
(c) Seller has made available to Purchaser prior to the
date hereof: (i) true, complete and correct copies of all Scheme
Documents; (ii) the names and addresses of the current trustees and
administrators of each Scheme; (iii) a complete copy of the latest
Trustees' Report to members of the audited accounts of each Scheme
(including the auditor's report); (iv) a complete copy of the most
recent Valuation Report and, if not stated therein, the name and
address of the current actuary to each Scheme; (v) a list of each
Scheme's active members, pensioners and deferred pensioners who are
employees or past employees of Radiocoms with particulars relevant to
establish their entitlement to benefits thereunder; (vi) a statement
of the rate at which during the current and preceding Scheme year each
participating employer contributes to the Scheme and makes payments in
respect of the expenses of administration, management and trusteeship
of the Scheme and of any proposal to change such rate; (vii) the
identity of the principal employer of each Scheme and particulars of
the terms of participation of each of Radiocoms and any of its
Subsidiaries in each Scheme; (viii) all material particulars of the
assets currently held by each Scheme by reference to the categories
listed in Schedule 3 to the Occupational Pension Schemes (Disclosure
of Information) Regulations 1986 (including full particulars of any
employer-related investment as defined in Section 112 of the Pension
Schemes Act 1993) of any investment in which more than 5% of the total
value of the net assets of the Scheme is invested and of any
requirements relating to the Schemes' investments imposed by the
Inland Revenue (other than requirements relating to Approved
Retirement Benefit Schemes generally) and all material particulars of
any common investment fund in which the Scheme participates; (ix) all
material particulars of any surplus payment within the meaning of the
Pension Scheme Surpluses
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(Administration) Regulations 1987 which has been made or is proposed
to be made from such Scheme; (x) a complete copy (or, in the case of
an oral contract, full written particulars) of any contract with any
person providing services of any nature in connection with the Scheme,
including, without limitation, investment management or advisory
services, custody services, administration and data processing
services; (xi) all material particulars of any discretionary practice
of the Scheme in relation to employees or past employees of Radiocoms
or any of its Subsidiaries or Relevant Affiliates in the preceding
three years (other than pension increases and individual enhancements
or additions); (xii) a complete copy of each contract of insurance and
of any associated agreement with the insurance company relating to the
Scheme and full particulars of the premiums payable under them;
(xiii) a complete copy of the contracting-out certificate relating to
the participation of Radiocoms and any of its Subsidiaries or Relevant
Affiliates and of the Inland Revenue's Letter of Approval in force in
relation to such Scheme; and (xiv) the basic information about the
Scheme required to be given under Schedule 1 of the Occupational
Pension Schemes (Disclosure of Information) Regulations 1986.
(d) Each Scheme is Approved as of its commencement and, to
Seller's knowledge, there is no ground on which Approval may be
withdrawn or cease to apply.
(e) The active members of the Scheme employed by Radiocoms
or any of its Subsidiaries or Relevant Affiliates are contracted out
of the State Earnings-Related Pension Scheme by reference to the
Scheme. To Seller's knowledge, there is no ground on which such
contracted-out status may be withdrawn or cease to apply. All state
scheme premiums, within the meaning of the Pension Schemes Act 1993,
due in respect of any member or former member of the Scheme who is an
employee or past employee of Radiocoms or any of its Subsidiaries or
Relevant Affiliates have been paid in accordance with applicable
statutory requirements.
(f) Every employee of Radiocoms or any of its Subsidiaries
who is entitled to membership of the Scheme (whether under the Scheme
Documents or any applicable law) has been invited to join the Scheme
as of the date on which he became entitled. Radiocoms and its
Subsidiaries or Relevant Affiliates have been properly admitted to
participation in each Scheme in which employees of Radiocoms and its
Subsidiaries or Relevant Affiliates participate.
(g) Since the effective date of the Valuation, no power has
been exercised under the Scheme to admit to membership
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any employee of Radiocoms or any of its Subsidiaries or Relevant
Affiliates who is not automatically eligible for membership under the
Scheme Documents or to grant or augment any benefit under the Scheme
in respect of employees of Radiocoms or its Subsidiaries or Relevant
Affiliates which would not otherwise have been provided in the
ordinary course under the Scheme Documents.
(h) To Seller's knowledge, the books of account, Trustees'
minutes and other records of the Scheme have been properly and
accurately maintained in all material respects and, to Seller's
knowledge, all such books, minutes and records and originals of the
Scheme Documents are in the possession of the Trustees.
(i) All contributions and expenses payable by Radiocoms or
any of its Subsidiaries or Relevant Affiliates (including actuarial,
trusteeship, consultancy, legal, audit and administrative expenses) in
respect of the Scheme have been paid and, to Seller's knowledge, no
services have been rendered or requested in respect of the Scheme of
which an account has not been rendered and which when rendered would
tend to increase materially the rate of contribution of Radiocoms or
any of its Subsidiaries or Relevant Affiliates to each of the Schemes
in respect of the recoupment of such expenses or costs.
(j) Each contract and agreement referred to in sub-
paragraph (c)(xii) is enforceable and, to Seller's knowledge, there is
no ground on which the insurers might avoid liability under it. All
premiums payable under all such contracts have been paid. Without
limiting the foregoing, all lump sum and pension benefits payable in
the event of the death of an employee of Radiocoms or any of its
Subsidiaries or Relevant Affiliates while in service are fully
insured, and all benefits in respect of employees of Radiocoms or any
of its Subsidiaries or Relevant Affiliates which are in payment and
which are paid up (payment not having commenced) and all contingent
benefits are fully secured, with a reputable insurance company
authorized to carry on ordinary long-term insurance business under the
Insurance Companies Act 1982.
(k) To Seller's knowledge, the Scheme has at all times been
operated in all material respects in accordance with, and the Trustees
and all of the employers participating in the Scheme have observed and
performed all their obligations under, the Scheme Documents, the
requirements of the Inland Revenue for Approval, the requirements of
the Occupational Pensions Board applicable to the Scheme and all
applicable laws.
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(l) To Seller's knowledge, the Valuation is accurate in all
material respects on the basis of the information supplied to the
actuary who carried out the Valuation. Such information supplied to
the actuary was complete and accurate in all material respects as of
the date when it was so supplied, including the information relating
to the assets held by the Scheme and to any augmentation of benefits,
and to any benefits which would not otherwise have been provided under
the Scheme Documents, to or in respect of employees of Radiocoms or
any of its Subsidiaries or Relevant Affiliates. Since the Valuation
Date: (i) pensionable earnings of employees of Radiocoms or any of
its Subsidiaries or Relevant Affiliates have not increased at a rate
greater than the rate of increase assumed for the purpose of the
Valuation Report; and (ii) no action has been taken by Seller or by
Radiocoms or any of its Subsidiaries or Relevant Affiliates
(including, without limitation, by way of a change relating to the
assets held by the Scheme or in investment policy or practice or in
the number, age or sex distribution of members) which might cause the
result of an actuarial valuation carried out at Closing, adopting the
same actuarial methods and assumptions as were adopted for the purpose
of the Valuation, to be materially different from the result of the
Valuation.
(m) At Closing the Scheme will hold assets which have a
value at least as great as the value of the assets as stated in the
Valuation increased since the Valuation Date at a rate not lower than
the rate of investment return assumed for the purpose of the
Valuation. On the basis of the methods and assumptions used for the
Valuation, the rate of contributions payable by Radiocoms or any of
its Subsidiaries or Relevant Affiliates recommended in the Valuation
Report will be adequate to fund the benefits in payment and
prospectively or contingently payable under the Scheme in respect of
employees of Radiocoms or any of its Subsidiaries or Relevant
Affiliates.
(n) Each transfer payment received by the Scheme after 17th
May, 1990 in respect of employees or pensioners or deferred pensioners
who are past employees of Radiocoms or any of its Subsidiaries or
Relevant Affiliates and who are members of the Scheme has been
calculated in such a way that it does not treat men and women
unequally insofar as the payment relates to employment after that date
but disregards the application of any actuarial assumption which may
by law differ as between men and women for this purpose.
(o) No Scheme is registered under Chapter III of Part V of
the Income and Corporation Taxes Act 1988 and no application for such
a registration has been made.
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(p) Section 4.16(p) of the Radiocoms Disclosure Letter sets
out full details of all current dispensations and notices granted by
the Inland Revenue relating to Radiocoms, its Subsidiaries and
Relevant Affiliates under Section 166 of the Income and Corporation
Taxes Act 1988.
(q) No Scheme is subject to the provisions of Section 187
and Schedule 9 of the Income and Corporation Taxes Act 1988.
(r) No employee share ownership trust established in
respect of the employees of Radiocoms or its Subsidiaries or Relevant
Affiliates is subject to any charge to tax under Section 68 or Section
71 of the Finance Act 1989 and there are no circumstances likely to
lead to such a charge and Radiocoms, its Subsidiaries and its Relevant
Affiliates are not subject to any liability whether actual or
potential under Section 68(3) of the Finance Act 1989 to pay tax
otherwise due from the trustees of any such trust.
(s) Each Scheme has been operated in accordance and in
compliance with the recommendations set forth in Section 5 of the most
recent Valuation Report that is set forth in the Radiocoms Disclosure
Letter.
4.17 Labor.
-----
(a) No employees of the Business or Radiocoms or any of its
Subsidiaries are represented by any labor organization, and no labor
organization or group of employees of the Business or Radiocoms or any
of its Subsidiaries has made a demand for recognition, has filed a
petition seeking a representation proceeding or given Radiocoms or any
of its Subsidiaries or Relevant Affiliates written notice of any
intention to be represented by a collective bargaining representative.
No collective bargaining agreement is currently being negotiated with
respect to any employees of the Business or Radiocoms or any of its
Subsidiaries.
(b) (i) The Business and Radiocoms and each of its
Subsidiaries is in material compliance with all applicable Laws
respecting employment and employment practices, terms and conditions
of employment and wages and hours, and with each collective bargaining
agreement applicable to it, and is not engaged in any unfair labor
practice; (ii) to the knowledge of Seller, there is no unfair labor
practice charge, complaint or similar claim relating to the Business
against Radiocoms or any of its Subsidiaries or Relevant Affiliates
pending or threatened before any Governmental Body charged with the
regulation or oversight of labor relations or similar matters;
(iii) there is
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no labor strike, work slowdown or stoppage or other significant labor
dispute or disturbance pending or, to the knowledge of Seller,
threatened against or affecting the Business or Radiocoms or any of
its Subsidiaries; (iv) to the knowledge of Seller, there is no
representation claim or petition pending before any Governmental Body
charged with the regulation or oversight of labor relations or similar
matters, and no question concerning representation exists with respect
to the respective employees of the Business or Radiocoms or any of its
Subsidiaries; (v) no grievance or arbitration proceeding arising out
of or under collective bargaining agreements is pending, and no claim
therefor exists, which in any case could reasonably be expected to
have a Material Adverse Effect on the Business or Radiocoms and its
Subsidiaries, taken as a whole; and (vi) neither the Business nor
Radiocoms or any of its Subsidiaries has experienced any work stoppage
or other significant labor difficulty during the past three years.
(c) There are no agreements or supplemental agreements
currently in effect between Radiocoms or any of its Subsidiaries or
Affiliates and any collective bargaining representative representing a
group of employees employed by the Business or Radiocoms or any of its
Subsidiaries.
(d) Section 4.17(d) of the Radiocoms Disclosure Letter sets
forth the names of all present salaried employees of the Business or
of Radiocoms and its Subsidiaries and their current annual salaries
and other compensation.
4.18 Litigation.
----------
(a) Except as disclosed in Section 4.18(a) of the Radiocoms
Disclosure Letter, (i) there are no Legal Proceedings (including, but
not limited to, any proceedings which seek the revocation, non-renewal
or the adverse modification of any DTI license) asserted or, to the
knowledge of Seller, threatened, or any governmental investigation
pending or, to the knowledge of Seller, threatened, against or
affecting the Business or Radiocoms or any of its Subsidiaries at law
or in equity, before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency, court or
other instrumentality, or by any private person, firm, corporation or
other entity (such representation being limited, in the case of any
such matter in which the sole remedy sought or threatened to be
sought, as the case may be, is the payment of money, to matters in
which the sum sought or threatened to be sought is unspecified or in
excess of pound 10,000), (ii) to the knowledge of Seller, there is no basis
for any such Legal Proceeding which could, individually or in the
aggregate, reasonably be expected
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to have a Material Adverse Effect on the Business or Radiocoms and its
Subsidiaries, taken as a whole and (iii) there are no existing or, to
the knowledge of Seller, threatened orders, judgments or decrees of
any court or governmental agency affecting the Business or Radiocoms
or any of its Subsidiaries or any of their respective properties or
assets.
(b) Seller is not aware of any facts which would disqualify
Radiocoms or any of its Subsidiaries under the Telecommunications Act
of 1984 or the rules, regulations and practices of the DTI from
transferring ownership of the Business and Radiocoms to Purchaser.
Neither Radiocoms or any of its Subsidiaries nor the Seller or any of
its Affiliates shall take any action which would cause such
disqualification or fail to take any action if the failure to take
such action would cause such disqualification.
(c) There are no Legal Proceedings asserted or, to the
knowledge of Seller, threatened against, or any governmental
investigation pending or, to the knowledge of Seller, threatened
against, the Business, Radiocoms or any of its Subsidiaries or Seller
or any of its Affiliates which would give any third party the right to
enjoin or rescind the transactions contemplated by this Agreement or
otherwise prevent any of the parties hereto from complying with the
terms and provisions of this Agreement.
(d) There are no applications, complaints or proceedings
pending or, to the knowledge of Seller, threatened before the DTI,
relating (i) to the Business or (ii) to Radiocoms and its Subsidiaries
or Relevant Affiliates which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect on the
Business or Radiocoms and its Subsidiaries, taken as a whole.
4.19 Compliance with Laws.
--------------------
(a) To the knowledge of Seller, Radiocoms and each of its
Subsidiaries and Relevant Affiliates is in compliance with all Laws
applicable to the Business or the conduct of the Business or its
operations or the use of its properties (including any leased
properties) and assets, except for Environmental Laws (which are
addressed in Section 4.20) and such instances of non-compliance as
could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Business or Radiocoms and its
Subsidiaries, taken as a whole. Neither Seller nor Radiocoms or any
of its Subsidiaries has received any written notice alleging any non-
compliance with applicable Laws.
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(b) Except as set forth in Section 4.19(b) of the Radiocoms
Disclosure Letter, Radiocoms or one of its Subsidiaries has timely
obtained all required FCC consents or authorizations or consents or
authorizations of other Governmental Entities that perform functions
or regulate matters similar to those performed or regulated by the FCC
(the "Equipment Authorizations") necessary to manufacture and
commercially distribute its linear modulation technology in the United
States and the United Kingdom and each other country in which such
technology has been or is being sold by Radiocoms, its Subsidiaries or
any of the Relevant Affiliates. The Equipment Authorizations are
valid and in full force and effect. The equipment for which Radiocoms
or any of its Subsidiaries has received the Equipment Authorizations
conforms to the terms and conditions of such Authorizations and, to
the knowledge of Seller, otherwise complies with all applicable rules,
regulations and policies (including, without limitation, those of the
FCC), except for such instances of non-compliance as could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Business or Radiocoms and its
Subsidiaries, taken as a whole.
4.20 Environmental Matters.
---------------------
(a) For purposes of this Section 4.20, "Real Property"
means all real property presently owned or operated by Radiocoms or
any of its Subsidiaries or by Relevant Affiliates and used in the
Business and all real property (including property held as trustee or
in any other fiduciary capacity) over which Radiocoms or any of its
Subsidiaries currently exercises ownership, dominion, management or
control. "Divested Real Property" means any real property formerly
owned or operated by Radiocoms or its Subsidiaries or Relevant
Affiliates which, if it were still so owned or operated, would
constitute Real Property.
(b) Except as would not individually or in the aggregate
have a Material Adverse Effect on Radiocoms and its Subsidiaries,
taken as a whole, or the Business,
(i) the operations of the Business, Radiocoms and each
of its Subsidiaries (and, with respect to the Business, each of
its Relevant Affiliates) are and have been in compliance with all
applicable Environmental Laws,
(ii) to the knowledge of Seller, the Real Property does
not (and any Divested Property at the time of its disposition did
not) contain any Hazardous Substance in violation of any
applicable Environmental Law,
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<PAGE>
(iii) neither Radiocoms nor any of its Subsidiaries or
Relevant Affiliates has any knowledge that, or has received any
written notices, demand letters or written requests for
information from any Governmental Body or any third party
indicating that, it may be in violation of, or liable under, any
Environmental Law,
(iv) there are no civil, criminal or administrative
actions, suits, demands, claims, hearings, investigations or
proceedings pending or, to the knowledge of Seller, threatened
against Radiocoms or any of its Subsidiaries or Affiliates with
respect to the Business or the Real Property (or any Divested
Real Property) relating to any violation or alleged violation, of
any Environmental Law,
(v) no reports have been filed, or are required to be
filed, by Radiocoms or any of its Subsidiaries or Affiliates
concerning the release of any Hazardous Substance or the
threatened or actual violation of any Environmental Law on or at
the Real Property (or any Divested Real Property),
(vi) to the knowledge of Seller, there are no
underground storage tanks on, in or under any of the Real
Property, and there were no underground storage tanks on, in or
under any Divested Real Property at the time of its disposition;
and no underground storage tanks have been closed or removed from
any Real Property or Divested Real Property while such Real
Property or Divested Real Property was owned or operated by
Radiocoms or any of its Subsidiaries, and
(vii) neither Radiocoms nor any of its Subsidiaries (or,
with respect to the Business, any of its Relevant Affiliates) has
incurred, and none of the Real Property is presently subject to,
any liabilities fixed (or, to the knowledge of Seller,
contingent) relating to any suit, settlement, court order,
administrative order, judgment or claim asserted or arising under
any Environmental Law.
(c) There are no permits or licenses required under any
Environmental Law in respect of the Real Property, except for such
permits or licenses the absence of which could not reasonably be
expected to have a Material Adverse Effect on Radiocoms and its
Subsidiaries, taken as a whole, or the Business.
<PAGE>
<PAGE>
(d) Neither Radiocoms nor any of its Subsidiaries or
Affiliates has received written notice or otherwise has knowledge that
any part of the Real Property or any Divested Real Property has been
or is listed as a site containing Hazardous Substances pursuant to any
Environmental Law.
4.21 Insurance. Seller has made available to Purchaser
---------
true, complete and correct copies of all policies of insurance of any
kind or nature covering the Business or Radiocoms or any of its
Subsidiaries or any of their respective employees, properties or
assets, including, without limitation, policies of life, disability,
fire, theft, workers compensation, employee fidelity, product
liability, and other casualty and liability insurance. All such
policies are in full force and effect and have not been reduced or
cancelled; no change in any such insurance policy has been notified to
Radiocoms or any of its Subsidiaries or Affiliates; and, to the
Seller's knowledge, neither Radiocoms nor any of its Subsidiaries or
any Relevant Affiliate is in default of any provision thereof, except
for such defaults as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the
Business or Radiocoms and its Subsidiaries, taken as a whole.
4.22 Related Party Transactions. Except as set forth in
--------------------------
Section 4.22 of the Radiocoms Disclosure Letter, neither Seller nor
any of its Affiliates has borrowed any moneys from or has outstanding
any indebtedness or other similar obligations to Radiocoms or any of
its Subsidiaries, and neither Radiocoms nor any of its Subsidiaries
has borrowed any moneys from or has any indebtedness or other similar
obligations to Seller or any of its Affiliates or any holder of more
than 15% of Securicor plc's issued and outstanding shares of capital
stock. Except as set forth in Section 4.22 of the Radiocoms
Disclosure Letter, none of the Seller, Radiocoms or any of its
Subsidiaries, any Affiliate of Radiocoms or Seller or, to the
knowledge of Seller, any holder of more than 15% of Securicor plc's
issued and outstanding shares of capital stock, nor, to the knowledge
of Seller, any officer or employee of Radiocoms or its Affiliates
(i) owns any direct or indirect interest of any kind in, or controls
or is a director, officer, employee or partner of, or consultant to,
or lender to or borrower from or has the right to participate in the
profits of, any Person which is (A) a competitor, supplier, customer,
landlord, tenant, creditor or debtor of Radiocoms or any of its
Subsidiaries, (B) engaged in a business related to the business of
Radiocoms or any of its Subsidiaries, or (C) a participant in any
transaction to which Radiocoms or any of its Subsidiaries is a party,
except where any officer or employee of Radiocoms or its Affiliates
owns less than 5% of the issued and outstanding capital stock of such
Person and such Person's equity securities
<PAGE>
<PAGE>
are traded or quoted on a recognized stock exchange or quotation
system, or (ii) is a party to any Contract with Radiocoms or any of
its Subsidiaries.
4.23 Financial Advisors. Except as set forth in Section
------------------
4.23 of the Radiocoms Disclosure Letter, no Person has acted, directly
or indirectly, as a broker, finder or financial advisor for Seller in
connection with the transactions contemplated by this Agreement and no
Person is entitled to any fee or commission or like payment in respect
thereof. Seller and its Affiliates have entered into no agreement or
arrangement which would require Purchaser or any of its Subsidiaries
to pay any such fee or commission.
4.24 Claims to Property. Except as otherwise disclosed in
------------------
this Agreement, Seller and its Affiliates (other than Radiocoms and
its Subsidiaries) will, as of the Closing Date, have no claim to any
property, asset or right owned by Radiocoms or any of its Subsidiaries
or used in the Business by Radiocoms or any of its Subsidiaries or
Relevant Affiliates.
4.25 Licenses; Permits; Authorizations.
---------------------------------
(a) Except as set forth in Section 4.25 of the Radiocoms
Disclosure Letter, Radiocoms and its Subsidiaries have all material
approvals, authorizations, consents, licenses (including DTI
licenses), orders and permits (except for sales and use tax permits,
franchise tax registrations and zoning ordinances, variances and
permits) of all Governmental Bodies required by the nature of the
operations of the Business or Radiocoms or any of its Subsidiaries to
permit the operations thereof in the manner in which they are
currently conducted (collectively, the "Radiocoms Licenses").
Radiocoms or one of its Subsidiaries is the authorized legal holder of
the Radiocoms Licenses issued to and used by it, none of which is
subject to any restriction or condition which would limit in any
material respect the full operation of the Business or Radiocoms or
any of its Subsidiaries as now or proposed to be operated.
(b) Except as set forth in Section 4.25 of the Radiocoms
Disclosure Letter, there are no competing applications or proceedings
pending or complaints filed or, to the knowledge of Seller,
threatened, as of the date hereof, before the DTI relating to the
Business or its operations of Radiocoms other than applications,
proceedings or complaints which generally affect the land mobile radio
industry. The Radiocoms Licenses are in good standing, are in full
force and effect and are unimpaired in any material respect by any act
or omission of the officers, directors or employees of Radiocoms or
Seller or their
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<PAGE>
respective Affiliates, and the operation of the Business and Radiocoms
and its Subsidiaries are in accordance therewith in all material
respects and no registration, clearance or prenotification is required
in respect of them in connection with the Transactions. Seller has no
reason to believe that any of such Radiocoms Licenses will not be
renewed in the ordinary course on their existing or no less favorable
terms.
4.26 Investment in Purchaser Shares.
------------------------------
(a) Seller will hold the Purchaser Shares issued to it
pursuant to this Agreement for investment and not with a view to, or
for resale in connection with, any distribution thereof within the
meaning of the Securities Act of 1933, as amended (the "Securities
Act"). Seller does not have any present intention of selling,
offering to sell or otherwise disposing of or distributing the
Purchaser Shares issued to it pursuant to this Agreement.
(b) Seller acknowledges that Purchaser has disclosed that
the Purchaser Shares to be issued to Seller pursuant to this Agreement
have not been registered under the Securities Act and, therefore,
cannot be resold unless they are registered under the Securities Act
or unless an exemption from registration is available.
(c) Seller is sophisticated in financial matters and is
able to evaluate the risks and benefits of the investment in the
Purchaser Shares.
(d) Seller has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the acquisition
of the Purchaser Shares and has had full access to such other
information concerning the Purchaser as Seller has requested.
(e) Seller is able to bear the economic risk of its
investment in the Purchaser Shares for an indefinite period of time,
recognizing that the Purchaser Shares have not been registered under
the Securities Act and, therefore, cannot be sold unless subsequently
registered under the Securities Act or an exemption from such
registration is available.
(f) Seller acknowledges that until such time as the
Purchaser Shares have been registered, or are otherwise eligible, for
resale in accordance with the Securities Act, each certificate
representing the Purchaser Shares shall be endorsed with the following
legend:
<PAGE>
<PAGE>
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED
OF UNLESS THEY HAVE FIRST BEEN REGISTERED UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE AND THE CORPORATION SHALL
HAVE RECEIVED, AT THE EXPENSE OF THE HOLDER, EVIDENCE OF
SUCH EXEMPTION REASONABLY SATISFACTORY TO THE CORPORATION
(WHICH MAY INCLUDE, AMONG OTHER THINGS, AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION)."
4.27 Investments in Purchaser. Except as set forth in
------------------------
Section 4.27 of the Radiocoms Disclosure Letter or in Schedule 13D
filings under the Exchange Act by Securicor plc, or as contemplated by
this Agreement, neither Securicor plc nor any of its Affiliates has,
or has had within the preceding twelve months, any direct or indirect
beneficial interest (including, without limitation, any right to
acquire any interest) in the capital stock of Purchaser.
4.28 Accounts Receivable. Each of the accounts receivable
-------------------
recorded on the books of Radiocoms and any of its Subsidiaries or
Relevant Affiliates related to the Business is a bona fide account
receivable which has arisen in the ordinary course of business.
Except as set forth in Section 4.28 of the Radiocoms Disclosure
Letter, the reserves for such accounts receivable were calculated in a
manner consistent with past practices of Radiocoms and its
Subsidiaries and Relevant Affiliates. To the knowledge of Seller,
such accounts receivable, in the aggregate, (a) are collectible, net
of reserves with respect thereto, within the greater of 120 days and
the date when they are due in accordance with their terms or (b) are
adequately secured.
4.29 Accounts Payable. Each of the accounts payable
----------------
recorded on the books of Radiocoms and each of its Subsidiaries or
Relevant Affiliates that is related to the Business is valid and
represents obligations in respect of good or services related to the
Business which have been received by Radiocoms or one of its
Subsidiaries or Relevant Affiliates, respectively and were priced no
higher than market value.
4.30 Inventory. All inventory of the Business recorded in
---------
the books of Radiocoms and its Subsidiaries or Relevant Affiliates is
carried at the lower of cost or market value, and, to the knowledge of
Seller, except as set forth in Section 4.30 of the Radiocoms
Disclosure Letter, consists of a
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<PAGE>
quality and quantity usable and saleable in the ordinary course of the
Business. To the knowledge of Seller, no material part of such
inventories has been priced in excess of its ultimate net expected
realizable value and the present quantities of inventories of the
Business are reasonable and warranted in the present circumstances of
the Business. All of the inventory of the Business is located on
Radiocoms or its Subsidiaries' properties.
4.31 Products. Section 4.31 of the Radiocoms Disclosure
--------
Letter sets forth all generic products and lines of products sold or
distributed by the Business or by Radiocoms and/or its Subsidiaries,
and Seller has made available to Purchaser all material information
with respect to the brand names, technical specifications, origin,
approval numbers and prices of such products and all information
usually supplied to dealers or customers. Radiocoms and/or its
Subsidiaries have all necessary rights and authority to sell and
distribute such products as presently sold or distributed.
4.32 No Misrepresentation. No representation or warranty
--------------------
of Seller contained in this Agreement or in the Radiocoms Disclosure
Letter or in any certificate or other instrument furnished by Seller
to the Purchaser pursuant to the terms hereof contains any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements contained herein or therein not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller that:
5.1 Organization and Good Standing. Purchaser is a
------------------------------
corporation duly organized, validly existing and in good standing
under the Laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties
and to carry on its business as now conducted. Purchaser is duly
qualified or authorized to do business as a foreign corporation and is
in good standing under the Laws of each jurisdiction in which it owns
or leases real property and each other jurisdiction in which the
conduct of its business or the ownership of its properties requires
such qualification or authorization, except where the failure to be so
qualified or authorized could not reasonably be expected to have a
Material Adverse Effect on Purchaser and its Subsidiaries, taken as a
<PAGE>
<PAGE>
whole. Purchaser is not subject to any agreement, commitment or
understanding which restricts or may restrict the conduct of its
business in any jurisdiction or location in any material respect.
Copies of the Certificate of Incorporation and By-Laws (together with
all amendments thereto) of Purchaser have heretofore been provided or
have been made available to the Seller and such copies are true,
correct and complete copies of such instruments.
5.2 Authorization of Agreements.
---------------------------
(a) Purchaser has all requisite power, authority and legal
capacity to execute and deliver this Agreement, each other agreement,
document, instrument or certificate contemplated by this Agreement or
to be executed by Purchaser in connection with the consummation of the
transactions contemplated by this Agreement (together with this
Agreement, the "Purchaser Documents") and each of the Other
Transaction Documents, and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement, the
Midland Agreement, each of the Purchaser Documents and each of the
Other Transaction Documents has been duly and validly ratified and/or
authorized by the Board of Directors of Purchaser, and (assuming the
accuracy of Seller's representation in Section 4.27) no other
corporate proceedings on the part of Purchaser will be necessary to
authorize this Agreement, the issuance of the Purchaser Shares, or the
other transactions contemplated hereby or the Other Transactions,
except for the stockholder approval referred to in Section 5.2(b).
Assuming the due authorization, execution and delivery by the other
parties hereto and thereto, this Agreement and the Midland Agreement
will constitute, and each of the Purchaser Documents and the Other
Transaction Documents to which Purchaser is a party, when executed and
delivered will constitute, legal, valid and binding obligations of
Purchaser, enforceable against Purchaser in accordance with their
respective terms, subject to the Bankruptcy Exception.
(b) Assuming the accuracy of Seller's representation in
Section 4.27, the affirmative vote of the holders of a majority of the
outstanding shares of Purchaser Common Stock is the only vote of the
holders of any class or series of Purchaser's capital stock (under
applicable Law or otherwise) necessary to approve this Agreement, the
issuance of the Purchaser Shares, the other transactions contemplated
hereby or the Other Transactions.
5.3 Capitalization.
--------------
(a) The authorized capital stock of Purchaser consists of
20,000,000 shares of Purchaser Common Stock. As of the date
<PAGE>
<PAGE>
hereof, there are 11,125,278 shares of the Purchaser Common Stock
issued and outstanding and 465,582 shares of the Purchaser Common
Stock are held by Purchaser as treasury stock. All of the issued and
outstanding shares of Common Stock were duly authorized for issuance
and are validly issued, fully paid and non-assessable.
(b) Except as set forth in Section 5.3 of the disclosure
letter delivered by Purchaser to Seller on the date hereof (the
"Purchaser Disclosure Letter") and except for matters arising after
the date hereof as permitted in accordance with Section 6.2, there is
no existing option, warrant, call, right, commitment or other
agreement of any character to which the Purchaser is a party
requiring, and there are no securities of Purchaser outstanding which
upon conversion or exchange would require, the issuance, sale or
transfer of any additional shares of capital stock or other equity
securities of Purchaser or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase
shares of capital stock or other equity securities of Purchaser.
Purchaser is not a party to any voting trust or other voting agreement
with respect to any of the shares of the Purchaser Common Stock or to
any agreement relating to the issuance, sale, redemption, transfer or
other disposition of the capital stock of Purchaser, except for
matters arising after the date hereof as permitted by Section 6.2.
5.4 Subsidiaries.
------------
(a) Set forth in Section 5.4 of the Purchaser Disclosure
Letter is the name of each of the Subsidiaries of Purchaser and, with
respect to each Subsidiary, the jurisdiction in which it is
incorporated, the number of shares of its authorized capital stock,
the number and class of shares thereof duly issued and outstanding,
the names of all stockholders and the numbers of shares of stock owned
by each stockholder. Each such stockholder is the record and
beneficial owner of the shares set forth opposite its name in Section
5.4 of the Purchaser Disclosure Letter. The outstanding shares of
capital stock of each Subsidiary of Purchaser have been duly
authorized, validly issued and fully paid and are non-assessable.
(b) Except as set forth in Section 5.4 of the Purchaser
Disclosure Letter, all such shares are owned by such stockholders free
and clear of all Liens. No shares of capital stock are held by any
Subsidiary of Purchaser as treasury stock.
(c) None of the Subsidiaries of Purchaser has outstanding
or authorized subscriptions, options, warrants, calls, rights,
commitments or any other agreements of any character obligating any of
them to issue, sell or transfer any
<PAGE>
<PAGE>
shares of its capital stock or other equity interests or any
securities convertible into or evidencing the right to subscribe for
or purchase any shares of such stock or other equity interests with
any Person, and there are no agreements or understandings with respect
to the voting, sale or transfer of shares of the capital stock of any
Subsidiary of Purchaser to which Purchaser or Subsidiary thereof is a
party.
(d) Each Subsidiary of Purchaser is a corporation duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation. Each Subsidiary of Purchaser has
full corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted.
Each Subsidiary of Purchaser is duly qualified and in good standing as
a foreign corporation under the Laws of each jurisdiction in which the
conduct of its business or the ownership of its assets requires such
qualification, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect on Purchaser
and its Subsidiaries, taken as a whole. No Subsidiary of Purchaser is
subject to any agreement, commitment or understanding which restricts
or may restrict the conduct of its business in any jurisdiction or
location in any material respect. Copies of the Certificate or
Articles of Incorporation and By-Laws (together with all amendments
thereto) of each Subsidiary of Purchaser have heretofore been provided
to Seller and such copies are true, correct and complete copies of
such instruments.
(e) Except as set forth in Section 5.4 of the Purchaser
Disclosure Letter or as permitted by Section 6.2, neither Purchaser
nor any of its Subsidiaries owns, beneficially or of record, any
shares of capital stock or any other security of any corporation or
other legal entity, or has any option or obligation to acquire any
such stock or other security, or has any investments in securities or
owns, directly or indirectly, any interest in any partnership, joint
venture or other business enterprise.
5.5 Corporate Records. The minute books of Purchaser and
-----------------
each of its Subsidiaries previously made available to Seller contain
complete and accurate records, in all material respects, of all meet-
ings and accurately reflect, in all material respects, all other
corporate action of the stockholders and board of directors (including
committees thereof) of Purchaser and each of its Subsidiaries.
<PAGE>
<PAGE>
5.6 Conflicts; Consents of Third Parties.
------------------------------------
(a) Except as set forth in Section 5.6 of the Purchaser
Disclosure Letter, none of the execution and delivery by Purchaser of
this Agreement and the Purchaser Documents, the consummation of the
transactions contemplated hereby or thereby, or compliance by
Purchaser with any of the provisions hereof or thereof will
(i) conflict with, or result in the breach of, any provision of the
certificate of incorporation or by-laws or comparable organizational
documents of Purchaser or any of its Subsidiaries; (ii) conflict with,
violate, result in the breach or termination of, or constitute a
default under any note, bond, mortgage, indenture, license, agreement
or other instrument or obligation to which Purchaser or any of its
Subsidiaries is a party or by which Purchaser or any of its
Subsidiaries or any of its properties or assets is bound;
(iii) violate any statute, rule, regulation, order or decree of any
Governmental Body by which Purchaser or any of its Subsidiaries is
bound; or (iv) result in the creation of any Lien upon the properties
or assets of Purchaser and its Subsidiaries except, in case of clauses
(ii), (iii) and (iv), for such violations, breaches or defaults as
could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Purchaser and its Subsidiaries,
taken as a whole, or materially delay the consummation of the
transactions contemplated hereby.
(b) Except as set forth in Section 5.6(b) of the Purchaser
Disclosure Letter, no consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or notification to,
any Person or Governmental Body is required on the part of the
Purchaser or any of its Subsidiaries in connection with the execution
and delivery of this Agreement or the Purchaser Documents, or the
compliance by the Purchaser with any of the provisions hereof or
thereof, except for compliance with the applicable requirements of the
HSR Act and except where the failure to obtain such consent, waiver,
approval, Order, Permit or authorization, or to make such declaration
or filing, could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Purchaser and its
Subsidiaries, taken as a whole, or materially delay the consummation
of the transactions contemplated hereby.
5.7 Issuance of Purchaser Shares.
----------------------------
(a) Except as provided in Section 5.2(b), the issuance of
the Purchaser Shares to Seller in accordance with the terms of this
Agreement has been duly authorized by all necessary action on the part
of Purchaser. The Purchaser Shares, upon issuance to Seller in
accordance with the terms of this Agreement, will be
<PAGE>
<PAGE>
duly authorized, validly issued, fully paid and non-assessable and
free of preemptive rights, and will be registered on the stock
certificate books and stock transfer ledgers of Purchaser solely in
the name of Seller. The Purchaser Shares, upon issuance to Seller in
accordance with the terms of this Agreement, will be approved for
quotation on the National Association of Securities Dealers Automatic
Quotation System ("NASDAQ") Small Cap Market (the "Small Cap Market").
Seller will receive good and marketable title to the Purchaser Shares
as of the Closing Date, free and clear of any and all Liens.
(b) Based upon Seller's representation and warranty in
Section 4.26 hereof, the issuance of the Purchaser Shares to Seller in
accordance with the terms of this Agreement will be exempt from
(i) the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, and (ii) the registration and/or qualification
provisions of all applicable state securities or "blue sky" Laws.
5.8 Financial Statements. Purchaser has delivered to
--------------------
Seller copies of (a) the audited consolidated balance sheets of
Purchaser and its Subsidiaries as at December 31, 1995, 1994 and 1993
and the related audited consolidated statements of operations and of
cash flows of Purchaser and its Subsidiaries for the years then ended
and (b) the unaudited consolidated balance sheet of Purchaser and its
Subsidiaries as at March 31, 1996 and the related consolidated
statements of operations and cash flows of Purchaser and its
Subsidiaries for the three-month period then ended (such audited and
unaudited statements, including the related notes and schedules
thereto, are referred to herein as the "Purchaser Financial
Statements"). Each of the Purchaser Financial Statements (i) is
complete and correct in all material respects, (ii) has been prepared
in accordance with GAAP (subject to normal year-end adjustments and
the absence of footnotes in the case of the unaudited statements), in
accordance with the books and records of Purchaser and its
Subsidiaries and in conformity with the practices consistently applied
by Purchaser without modification of the accounting principles used in
the preparation thereof, (iii) reflects all transactions relating to
the business or operations of Purchaser and its Subsidiaries,
including, without limitation, any transactions with Simmonds or its
Affiliates, and (iv) presents fairly the financial position, results
of operations and cash flows of Purchaser and its Subsidiaries as at
the dates and for the periods indicated.
For the purposes hereof, the audited balance sheet of
Purchaser and its Subsidiaries as at December 31, 1995 is
<PAGE>
<PAGE>
referred to as the "Purchaser Balance Sheet" and December 31, 1995 is
referred to as the "Purchaser Balance Sheet Date."
5.9 No Undisclosed Liabilities. Purchaser and its
--------------------------
Subsidiaries have no indebtedness, obligations or liabilities of any
kind (whether accrued, absolute, contingent or otherwise, and whether
due or to become due) (a) that would be required by GAAP to be
reflected in, reserved against or otherwise described in the
consolidated balance sheet of Purchaser and its Subsidiaries
(including the notes thereto) or (b) which could reasonably be
expected to have a Material Adverse Effect on Purchaser and its
Subsidiaries, taken as a whole, except (i) as set forth on the
Purchaser Balance Sheet or in the notes thereto and (ii) for
liabilities and obligations incurred in the ordinary course of busi-
ness consistent with past practice since the Purchaser Balance Sheet
Date.
5.10 Periodic SEC Filings. Purchaser has filed all
--------------------
required forms, reports and documents with the Securities and Exchange
Commission (the "SEC") since January 1, 1993, each of which has
complied in all material respects with all applicable requirements of
the Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended, each as in effect on the dates such forms,
reports and documents were filed. Purchaser has heretofore delivered
or made available to Seller true and complete copies of all reports
(including Current Reports on Form 8-K) and proxy statements filed by
Purchaser with, and all registration statements of Purchaser declared
effective by, the SEC since January 1, 1993 (such public filings with
the SEC, as the same have been amended, are hereinafter referred to as
the "SEC Documents"). None of such forms, reports or documents,
including, without limitation, any financial statements or schedules
included or incorporated by reference therein or any SEC Documents,
contained, when filed, any untrue statement of a material fact or
omitted to state a material fact required to be stated or incorporated
by reference therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of Purchaser
included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto and fairly
present, in conformity with GAAP (except as may be indicated in the
notes thereto), the consolidated financial position of Purchaser and
its Subsidiaries as of the dates thereof and their consolidated
results of operations and changes in financial position for the
periods then ended (subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments). Since
December 31, 1995, there has not been any
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change, or any application or request for any change, by Purchaser or
any of its Subsidiaries in accounting principles, methods or policies
for financial accounting or tax purposes (subject, in the case of the
unaudited interim financial statements, to normal year-end
adjustments).
5.11 Absence of Certain Developments. Except as expressly
-------------------------------
contemplated by this Agreement or as set forth in Section 5.11 of the
Purchaser Disclosure Letter, since the Purchaser Balance Sheet Date:
(a) there has not been any Material Adverse Change nor
has there occurred any event which is reasonably likely to result
in a Material Adverse Change with respect to Purchaser and its
Subsidiaries, taken as a whole;
(b) there has not been any damage, destruction or
loss, whether or not covered by insurance, with respect to the
property and assets of Purchaser or any of its Subsidiaries
having a replacement cost of more than $20,000 for any single
loss or $20,000 for all such losses;
(c) there has not been any declaration, setting aside
or payment of any dividend or other distribution in respect of
any shares of capital stock of Purchaser or any repurchase,
redemption or other acquisition by Purchaser or any of its
Subsidiaries of any outstanding shares of capital stock or other
securities of, or other ownership interest in, Purchaser or any
of its Subsidiaries, except for dividends to Purchaser by any of
its wholly owned Subsidiaries;
(d) neither Purchaser nor any of its Subsidiaries has
issued any equity securities or any securities convertible into
or exchangeable for equity securities of Purchaser or any of its
Subsidiaries;
(e) neither Purchaser nor any of its Subsidiaries has
awarded or paid any bonuses to employees of Purchaser or any of
its Subsidiaries with respect to the fiscal year ended December
31, 1995, except to the extent accrued on the Purchaser Balance
Sheet, or entered into any employment, deferred compensation,
severance or similar agreement (or amended any such agreement) or
agreed to increase the compensation payable or to become payable
by it to any of its directors, officers, employees, agents or
representatives or agreed to increase the coverage or benefits
available under any severance pay, termination pay, vacation pay,
company awards, salary continuation for disability,
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sick leave, deferred compensation, bonus or other incentive
compensation, insurance, pension or other employee benefit plan,
payment or arrangement made to, for or with such directors, offi-
cers, employees, agents or representatives (other than normal
increases in the ordinary course of business consistent with past
practice and that in the aggregate have not resulted in a
material increase in the benefits or compensation expense of
Purchaser and its Subsidiaries, taken as a whole);
(f) there has not been any change by Purchaser or any
of its Subsidiaries in accounting or Tax reporting principles,
methods or policies except as may be required by a change in
national accounting standards;
(g) neither Purchaser nor any of its Subsidiaries has
entered into any transaction or Contract or conducted its busi-
ness other than in the ordinary course consistent with past
practice;
(h) neither Purchaser nor any of its Subsidiaries has
failed to promptly pay and discharge current liabilities except
where disputed in good faith by appropriate proceedings;
(i) neither Purchaser nor any of its Subsidiaries has
made any loans, advances or capital contributions to, or
investments in, any Person or paid any fees or expenses to the
Purchaser or any Affiliate or holder of 15% or more of the issued
and outstanding capital stock of Purchaser;
(j) neither Purchaser nor any of its Subsidiaries has
mortgaged, pledged or subjected to any Lien any assets, or
acquired any assets or sold, assigned, transferred, conveyed,
leased or otherwise disposed of any assets of Purchaser or its
Subsidiaries, except for assets acquired or sold, assigned,
transferred, conveyed, leased or otherwise disposed of in the
ordinary course of business consistent with past practice;
(k) neither Purchaser nor any of its Subsidiaries has
discharged or satisfied any Lien, or paid any obligation or
liability (fixed or contingent), except in the ordinary course of
business consistent with past practice and which, in the
aggregate, would not be material to Purchaser and its
Subsidiaries, taken as a whole;
(l) neither Purchaser nor any of its Subsidiaries has
canceled or compromised any debt or claim or amended,
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canceled, terminated, relinquished, waived or released any
Contract or right except in the ordinary course of business
consistent with past practice and which, in the aggregate, would
not be material to Purchaser and its Subsidiaries, taken as a
whole;
(m) neither Purchaser nor any of its Subsidiaries has
instituted or settled any material Legal Proceeding;
(n) neither Purchaser nor any of its Subsidiaries has
suffered any Extraordinary Loss or Extraordinary Losses;
(o) neither Purchaser nor any of its Subsidiaries has
transferred or granted any material rights under any concessions,
leases, licenses, agreements, patents, inventions, trademarks,
trade names, servicemarks, brandmarks, brand names, copyrights or
the like, or with respect to any know-how;
(p) neither Purchaser nor any of its Subsidiaries has
(A) received any notice or citation for any violation of, nor, to
the best knowledge of Purchaser, has any complaint been filed
with the FCC alleging a violation of, any rule, regulation or
policy of the FCC by the Purchaser or any of its Subsidiaries or
the FCC licensee with respect to any System (as defined in
Section 5.27), or (B) allowed any license issued by the FCC to
Purchaser or any of its Subsidiaries or any FCC licensee with
respect to any System (individually, a "Purchaser FCC License"
and, collectively, the "Purchaser FCC Licenses") to lapse or be
impaired in any manner, or operated any of its businesses in any
manner not in compliance with its FCC authorization and all
applicable FCC rules, regulations and policies; and
(q) neither Purchaser nor any of its Subsidiaries has
agreed to do anything set forth in this Section 5.11.
5.12 Taxes.
-----
(a) Except as set forth in Section 5.12 of the Purchaser
Disclosure Letter, (A) all material Tax Returns required to be filed
by or on behalf of Purchaser and each of its Subsidiaries, or the
Affiliated Group(s) of which any of them is or was a member have been
duly and timely filed with the appropriate taxing authorities in all
jurisdictions in which such Tax Returns are required to be filed
(after giving effect to any valid extensions of time in which to make
such filings), and all such Tax Returns were true, complete and
correct in all material respects; (B) all Taxes payable by or on
behalf of Purchaser and
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its Subsidiaries, either directly as part of an Affiliated Group Tax
Return or otherwise, have been fully and timely paid, except to the
extent adequately reserved therefor in accordance with GAAP on the
Purchaser Balance Sheet, and adequate reserves or accruals for Taxes
have been provided in the Purchaser Balance Sheet with respect to any
period through the date thereof for which Tax Returns have not yet
been filed or for which Taxes are not yet due and owing; and (C) no
agreement, waiver or other document or arrangement extending or having
the effect of extending the period for assessment or collection of
Taxes (including, but not limited to, any applicable statute of
limitation) has been executed or filed with any taxing authority by or
on behalf of Purchaser or any of its Subsidiaries, or any Affiliated
Group(s) of which any of them is or was a member.
(b) Purchaser and each of its Subsidiaries has complied in
all material respects with all applicable Laws, rules and regulations
relating to the payment and withholding of Taxes and has duly and
timely withheld from employee salaries, wages and other compensation
and has paid over to the appropriate taxing authorities all amounts
required to be so withheld and paid over for all periods under all
applicable Laws.
(c) Seller has received complete copies of (A) all material
income or franchise Tax Returns of Purchaser and each of its
Subsidiaries relating to the taxable periods since January 1, 1994 and
(B) any audit report issued within the last three years relating to
any material Taxes due from or with respect to Purchaser and each of
its Subsidiaries with respect to its income, assets or operations.
(d) Except as set forth in Section 5.12 of the Purchaser
Disclosure Letter, no claim has been made by a taxing authority in a
jurisdiction where Purchaser or any of its Subsidiaries does not file
an income or franchise Tax Return such that Purchaser or such
Subsidiary is or may be subject to taxation by that jurisdiction.
(e) Except as set forth in Section 5.12 of the Purchaser
Disclosure Letter, all deficiencies asserted or assessments made as a
result of any examinations by any taxing authority of the Tax Returns
of or covering or including Purchaser and/or its Subsidiaries have
been fully paid, and there are no other audits or investigations by
any taxing authority in progress, nor has Purchaser received any
written notice from any taxing authority that it intends to conduct
such an audit or investigation. No requests for a ruling or a
determination letter are pending with any taxing authority. No issue
has been raised in writing by any taxing authority in any current or
prior
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examination which, by application of the same or similar principles,
could reasonably be expected to result in a proposed deficiency
against Purchaser or any Subsidiary for any subsequent taxable period
that could be material.
(f) Except as set forth in Section 5.12 of the Purchaser
Disclosure Letter, neither Purchaser, any Subsidiary nor any other
Person on behalf of Purchaser or any Subsidiary has (A) filed a
consent pursuant to Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection
(f) asset (as such term is defined in Section 341(f)(4) of the Code)
owned by Purchaser or any Subsidiary, (B) agreed to or is required to
make any adjustments pursuant to Section 481(a) of the Code or any
similar provision of state, local or foreign law by reason of a change
in accounting method initiated by the Purchaser or any Subsidiary or
has any knowledge that the Internal Revenue Service has proposed any
such adjustment or change in accounting method, or has any application
pending with any taxing authority requesting permission for any
changes in accounting methods that relate to the business or
operations of Purchaser or any Subsidiary, or (C) executed or entered
into a closing agreement pursuant to Section 7121 of the Code or any
predecessor provision thereof or any similar provision of state, local
or foreign law with respect to Purchaser or any of its Subsidiaries.
(g) Except as set forth in Section 5.12 of the Purchaser
Disclosure Letter, no property owned by Purchaser or any Subsidiary is
(i) property required to be treated as being owned by another Person
pursuant to the provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect immediately prior to
the enactment of the Tax Reform Act of 1986, (ii) constitutes "tax-
exempt use property" within the meaning of Section 168(h)(1) of the
Code or (iii) is "tax-exempt bond financed property" within the
meaning of Section 168(g) of the Code.
(h) Neither Purchaser (except with one or more
Subsidiaries) nor any Subsidiary (except with Purchaser) is a party to
any tax sharing or similar agreement or arrangement (whether or not
written) pursuant to which it will have any obligation to make any
payments after the Closing.
(i) There is no contract, agreement, plan or arrangement
covering any person that, individually or collectively, could give
rise to the payment of any amount that would not be deductible by the
Purchaser, the Affiliates or their respective affiliates by reason of
Section 280G of the Code, or
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would constitute compensation in excess of the limitation set forth in
Section 162(m) of the Code.
(j) There are no liens as a result of any unpaid Taxes upon
any of the assets of Purchaser or any Subsidiary thereof.
(k) Except as set forth in Section 5.12 of the Purchaser
Disclosure Letter, Purchaser has no elections in effect for federal
income tax purposes under Sections 108, 168, 338, 441, 463, 472, 1017,
1033 or 4977 of the Code.
(l) Except as set forth in Section 5.12 of the Purchaser
Disclosure Letter, none of the members of Purchaser's Affiliated Group
has any net operating loss carryovers.
5.13 Real Property.
-------------
(a) Section 5.13(a) of the Purchaser Disclosure Letter
describes (i) all real property and all interests therein owned of
record or beneficially by Purchaser (other than site leases for use
with FCC Licenses) or any of its Subsidiaries (the "Purchaser Real
Properties"), (ii) all leases of real property to which Purchaser or
any of its Subsidiaries is a party or by which Purchaser or any of its
Subsidiaries is bound (other than site leases for use with FCC
Licenses) and (iii) the purposes for which such properties are used.
True, correct and complete copies of all documents referred to in
Section 5.13(a) of the Purchaser Disclosure Letter have been delivered
or made available to Seller.
(b) Except as set forth in Section 5.13(b) of the Purchaser
Disclosure Letter:
(i) Purchaser or one of its Subsidiaries has (A) good
and valid title to the Purchaser Real Properties, free and clear
of all Liens except for imperfections of title, if any, that do
not materially detract from the value of the property subject
thereto, or materially interfere with the manner in which such
property is currently being used or is proposed to be used by
Purchaser or any of its Subsidiaries or materially impair the
operations of Purchaser or any of its Subsidiaries and which do
not secure obligations for borrowed money or the deferred portion
of the purchase price of acquired property (collectively,
"Purchaser Permitted Encumbrances"), and (B) all material
easements and rights, including but not limited to easements for
power lines, water lines, sewers, roadways and other means of
ingress and egress, necessary to conduct the business conducted
on the Purchaser Real
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Properties; and none of the Liens set forth in Section 5.13(b) of
the Purchaser Disclosure Letter has had or could reasonably be
expected to have a Material Adverse Effect on Purchaser and its
Subsidiaries, taken as a whole;
(ii) Neither the whole nor any portion of any of the
Purchaser Real Properties is subject to any pending condemnation
or similar proceeding by any governmental authority, and
Purchaser does not know that any such condemnation or taking is
threatened or contemplated;
(iii) Neither Purchaser nor any of its Subsidiaries is,
or as of the Closing Date will be, in violation of any applicable
Law or Order relating to the Purchaser Real Properties, except
(A) for Environmental Laws (which are addressed in Section 5.21),
(B) for compliance with the rules and regulations of the FCC
(which are addressed in Section 5.27) and (C) where the failure
to be in compliance with such Law or Order could not reasonably
be expected to have a Material Adverse Effect on Purchaser and
its Subsidiaries, taken as a whole, and no notice from any
Governmental Body has been served upon Purchaser or any of its
Subsidiaries or Affiliates claiming any material violation
thereof or calling attention to the need for any material work,
repairs, construction, alterations, installations on or in
connection with said owned or leased real properties used by
Purchaser or its Subsidiaries;
(iv) Purchaser or one of its Subsidiaries has obtained
all permits, licenses or certificates of occupancy pertaining to
the ownership or operation of any of the owned or leased real
properties of Purchaser or any of its Subsidiaries (including,
without limitation, the Purchaser Real Properties) that are
required to be obtained from any Governmental Body by Purchaser
or any of its Subsidiaries, except where the failure to obtain
such permits, licenses or certificates of occupancy could not
reasonably be expected to have a Material Adverse Effect on
Purchaser and its Subsidiaries taken as a whole;
(v) Each of the leases of real property referred to in
Section 5.13(a) above is valid and enforceable in accordance with
its terms, subject to the Bankruptcy Exception, and there is not
under any such lease any existing breach, default, event of
default or event which, with notice and/or lapse of time, would
constitute a breach, default or event of default (A) by Purchaser
or any of its Subsidiaries or (B) to the knowledge of Purchaser,
by any other party to any such lease, except where such breach,
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default or event of default could not reasonably be expected to
have a Material Adverse Effect on Purchaser and its Subsidiaries,
taken as a whole;
(vi) No previous or current party to any such lease has
given notice of or made a claim with respect to any breach or
default, the consequences of which, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect on Purchaser and its Subsidiaries, taken as a
whole;
(vii) None of the rights of Purchaser or any of its
Subsidiaries under any of such leases will be subject to
termination or modification as the result of the consummation of
the transactions contemplated by this Agreement; and
(viii) No consent or approval of any third party is
required under any lease referred to in Section 5.13(a) to the
consummation of the transactions contemplated hereby.
5.14 Tangible Personal Property.
--------------------------
(a) Section 5.14(a) of the Purchaser Disclosure Letter sets
forth all leases of personal property, other than leases for motor
vehicles, involving annual payments in excess of $20,000 to which
Purchaser or any of its Subsidiaries is a party or by which Purchaser
or any of its Subsidiaries is bound. True, correct and complete
copies of all documents referred to in Section 5.14(a) of the
Purchaser Disclosure Letter have been delivered or made available to
Seller.
(b) Except as set forth in Section 5.14(b) of the Purchaser
Disclosure Letter:
(i) Each of the leases of personal property referred
to in Section 5.14(a) is valid and enforceable in accordance with
its terms, subject to the Bankruptcy Exception, and there is not,
under any such lease, any existing breach, default, or event of
default or event which, with notice and/or lapse of time, would
constitute a breach, default or event of default (A) by Purchaser
or any of its Subsidiaries or, (B) to the knowledge of Purchaser,
by any other party to any such lease, except where such breach,
default or event of default could not reasonably be expected to
have a Material Adverse Effect on Purchaser and its Subsidiaries,
taken as a whole;
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(ii) No previous or current party to any such lease has
given notice of or made a claim with respect to any breach or
default thereunder, the consequences of which, individually or in
the aggregate, could reasonably be expected to have a Material
Adverse Effect on Purchaser and its Subsidiaries, taken as a
whole;
(iii) None of the rights of any of Purchaser or any of
its Subsidiaries under any of such leases will be subject to
termination or modification as the result of the consummation of
the transactions contemplated by this Agreement;
(iv) No consent or approval of any third party is
required under any lease referred to in Section 5.14(a) to the
consummation of the transactions contemplated hereby;
(v) Purchaser or one of its Subsidiaries has good
title to all material items of tangible personal property
reflected on the Purchaser Balance Sheet (except as sold or
disposed of subsequent to the date thereof in the ordinary course
of business consistent with past practices), free and clear of
Liens; and
(vi) All of the items of tangible personal property not
owned by Purchaser or one of its Subsidiaries but used in the
business of Purchaser and which, individually or in the
aggregate, are material to the conduct of such business, are in
such condition that upon the return of such properties to their
owners in the current condition of such properties, normal wear
and tear excepted, at the end of the relevant lease terms or as
otherwise contemplated by the applicable agreements with owners
thereof, the obligations of Purchaser or its Subsidiaries (as
applicable) to such owners will be discharged in all material
respects.
5.15 Intangible Property. Section 5.15 of the Purchaser
-------------------
Disclosure Letter sets forth a list of each letters patent, material
trademark, material trade name, registered copyright, material service
mark, and any other similar, registered property or trade right owned
by Purchaser or any of its Subsidiaries, or used by Purchaser or any
of its Subsidiaries in its business (collectively, together with all
know-how, processes, formulae, trade secrets, inventions, designs,
industrial models, computer programs and other technical data or
drawings, the "Purchaser Intellectual Property"), and sets forth all
applications and licenses for any of the foregoing, and all licenses
or similar agreements or arrangements relating to the
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operation of the business of Purchaser or any of its Subsidiaries or
to which Purchaser and its Subsidiaries is a party or subject (prop-
erty of the foregoing type being hereinafter collectively referred to
as the "Purchaser IP Licenses"), including all licenses or similar
agreements or arrangements by which Purchaser or its Subsidiaries are
authorized to use intellectual property of a third party or have
granted a third party rights to use intellectual property related to
the business of Purchaser or any of its Subsidiaries. Except as
indicated in Section 5.15 of the Purchaser Disclosure Letter:
(a) Purchaser or one of its Subsidiaries owns all title and
interest in, and, to the knowledge of Purchaser, right and authority
to use, in connection with the conduct of the business of Purchaser
and its Subsidiaries as such business is presently conducted, all of
the Purchaser Intellectual Property and Purchaser IP Licenses listed
in Section 5.15 of the Purchaser Disclosure Letter free and clear of
all Liens. The Purchaser Intellectual Property and Purchaser IP
Licenses, to the knowledge of Purchaser, constitute all of the
intellectual property that Purchaser needs to conduct its (and its
Subsidiaries) business as currently conducted. The operation of the
business of Purchaser and its Subsidiaries does not, to the knowledge
of Purchaser, infringe upon, misappropriate or violate any patent,
trade name, trademark, service mark, trade secret, brand mark and
brand name and other property or trade right of any other person, firm
or corporation, and none of Purchaser or any of its Subsidiaries has
received any notice or has knowledge pertaining to any actual or
threatened, infringement, misappropriation or violation of the items
of intellectual property listed in the preceding sentence;
(b) There are no asserted or, to the knowledge of
Purchaser, threatened governmental, judicial or adversarial
proceedings, hearings, arbitrations, disputes or claims with respect
to any of the Purchaser Intellectual Property or Purchaser IP Licenses
listed in Section 5.15 of the Purchaser Disclosure Letter;
(c) To the knowledge of Purchaser, no third party is
infringing or engaging in an unauthorized use of the Purchaser
Intellectual Property or Purchaser IP Licenses; and
(d) To the knowledge of Purchaser, neither Purchaser nor
any of its Subsidiaries or Affiliates has made any disclosure to a
third party that would materially impair the value of any confidential
Purchaser Intellectual Property or confidential Purchaser IP Licenses,
and Purchaser and its Affiliates have treated such confidential
information in a manner reasonably designed to preserve its
confidentiality.
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5.16 Material Contracts.
------------------
(a) Section 5.16 of the Purchaser Disclosure Letter sets
forth (i) each oral or written agreement, arrangement or commitment of
any nature to which Purchaser or any of its Subsidiaries is a party or
by which it is bound involving (A) a commitment of more than $75,000,
or (B) the purchase or sale of any assets of Purchaser or its
Subsidiaries having a book value of more than $75,000 and (ii) all
(A) loan or credit agreements, indentures, guaranties, promissory
notes, pledge agreements, mortgages, security agreements or other
instruments in respect of borrowed funds, (B) distributorship, agency,
representation, dealer or similar agreements, (C) covenants not to
compete or any other agreements or understandings which would restrict
the operation of Purchaser's or any of its Subsidiaries' businesses in
any geographical area or to any person or class of persons, or which
in any way affects the price or other terms at which such businesses
or Purchaser or any of its Subsidiaries or any agent or representative
of such businesses or Purchaser or any of its Subsidiaries may sell
products or services, (D) contracts or commitments for capital
expenditures and (E) partnership or joint venture agreements.
Agreements, arrangements and commitments of the types described in
subsections (i) and (ii) above, other than System management and
option agreements, are hereinafter collectively referred to as the
"Purchaser Material Agreements."
(b) Each Purchaser Material Agreement is valid and
enforceable in accordance with its terms, subject to the Bankruptcy
Exception. Except as set forth in Section 5.16 of the Purchaser
Disclosure Letter, (i) neither Purchaser nor any of its Subsidiaries
nor, to the knowledge of Purchaser, any other party thereto, is in
breach of or in default under any Purchaser Material Agreement,
(ii) to the knowledge of Purchaser, there has not occurred any event
which, after the giving of notice or the lapse of time or both, would
constitute a default under, or result in a breach of, any Purchaser
Material Agreement, (iii) no previous or current party to any
Purchaser Material Agreement has given notice of or made a claim, or,
to the knowledge of Purchaser, threatened to make a claim, with
respect to any breach or default thereunder, the consequences of
which, in the case of clauses (i), (ii) and (iii), individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect on Purchaser and its Subsidiaries, taken as a whole, (iv) none
of the rights of Purchaser or any of its Subsidiaries under any of the
Purchaser Material Agreements will be subject to termination or
modification as a result of the consummation of the transactions
contemplated by this Agreement, and (v) no consent or approval of any
third party is required under any Purchaser
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Material Agreement to the consummation of the transactions
contemplated hereby.
(c) Simultaneously with the execution of this Agreement,
Purchaser has delivered to Seller a true, complete and correct copy of
the Midland Agreement (including all exhibits and schedules thereto)
as in effect on the date hereof. The Midland Agreement is valid and
enforceable in accordance with its terms, subject to the Bankruptcy
Exception. Each of the representations and warranties of Purchaser
contained in the Midland Agreement, and to Purchaser's knowledge, each
of the representations and warranties of Midland US contained therein,
is true and correct in all material respects and will be true and
correct in all material respects as of the Closing Date. (i) Neither
Purchaser nor, to the knowledge of Purchaser, Midland US, is in
material breach of or in material default under the Midland Agreement,
(ii) to the knowledge of Purchaser, there has not occurred any event
which, after the giving of notice or the lapse of time or both, would
constitute a material default under, or result in a material breach
of, the Midland Agreement, (iii) no party to the Midland Agreement has
given notice of or made a claim with respect to any material breach or
material default thereunder, (iv) except as set forth in the Midland
Agreement, none of the rights of Purchaser under the Midland Agreement
will be subject to termination or modification as a result of the
consummation of the transactions contemplated by this Agreement, and
(v) except as set forth therein, no consent or approval of any third
party is required under the Midland Agreement to the consummation of
the transactions contemplated thereby or hereby.
5.17 Employee Benefits.
-----------------
(a) Section 5.17(a) of the Purchaser Disclosure Letter sets
forth a complete and correct list of (i) all "employee benefit plans",
as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and any other pension plans,
employee benefit plans, programs or arrangements, payroll practices
(including, without limitation, severance pay, vacation pay, company
awards, consulting or other compensation arrangements, salary
continuation for disability, sick leave, retirement, deferred compen-
sation, bonus or other incentive compensation, stock purchase,
hospitalization, medical insurance, life insurance and scholarship
programs) maintained by Purchaser or its Subsidiaries or to which
Purchaser or any of its Subsidiaries contributes or is obligated to
contribute thereunder with respect to employees of Purchaser or any of
its Subsidiaries (the "Purchaser Employee Benefit Plans") and (ii) all
"employee pension plans," as defined in Section 3(2) of ERISA,
maintained by Purchaser or its Subsidiaries or any trade or business
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(whether or not incorporated) which are under control, or which are
treated as a single employer with Purchaser and any of its
Subsidiaries under Section 414(b), (c), (m) or (o) of the Code ("ERISA
Affiliate") or to which Purchaser, any of its Subsidiaries or any
ERISA Affiliate contributed or is obligated to contribute thereunder
(the "Purchaser Pension Plans"). Section 5.17(a) of the Purchaser
Disclosure Letter clearly identifies, in separate categories, the
Purchaser Employee Benefit Plans or the Purchaser Pension Plans that
are (i) subject to Section 4063 and 4064 of ERISA ("Multiple Employer
Plans"), (ii) multiemployer plans (as defined in Section 4001(a)(3) of
ERISA) ("Multiemployer Plans") or (iii) "group health plans," within
the meaning of Section 5000(b)(1) of the Code providing continuing
benefits after the termination of employment (other than as required
by Section 4980B of the Code or Part 6 of Subtitle B of Title I of
ERISA and at the former employee's or his beneficiary's sole expense).
(b) None of Purchaser, any Subsidiary or any ERISA
Affiliate has withdrawn in a complete or partial withdrawal from any
Multiemployer Plan prior to the Closing Date, nor has any of them
incurred any liability due to the termination or reorganization of a
Multiemployer Plan; and Seller shall not have (i) any obligation to
make any contribution to any Multiemployer Plan or (ii) any withdrawal
liability from any such Multiemployer Plan under Section 4201 of ERISA
which it would not have had it not received the Purchaser Shares from
Purchaser at the Closing in accordance with the terms of this
Agreement.
(c) Each of the Purchaser Employee Benefit Plans and
Purchaser Pension Plans intended to qualify under Section 401 of the
Code ("Qualified Plans") so qualify and the trusts maintained thereto
are exempt from federal income taxation under Section 501 of the Code,
and, except as disclosed in Section 5.17(b) of the Purchaser
Disclosure Letter, nothing has occurred with respect to the operation
of any such plan which could cause the loss of such qualification or
exemption or the imposition of any liability, penalty or tax under
ERISA or the Code.
(d) All contributions, including all employer contributions
and employee salary reduction contributions and premiums required by
Law or by the terms of any Purchaser Employee Benefit Plan or
Purchaser Pension Plan as of the Closing Date, have been timely made
(without regard to any waivers granted with respect thereto) to any
funds or trusts established thereunder or in connection therewith, and
no accumulated funding deficiencies exist in any of the Purchaser
Employee Benefit Plans or Purchaser Pension Plans subject to Section
412 of the Code.
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(e) The benefit liabilities, as defined in Section
4001(a)(16) of ERISA, of each of the Purchaser Employee Benefit Plans
and Purchaser Pension Plans subject to Title IV of ERISA using the
actuarial assumptions that would be used by the Pension Benefit
Guaranty Corporation (the "PBGC") in the event it terminated each such
plan do not exceed the fair market value of the assets of each such
plan. The liabilities of each Purchaser Employee Benefit Plan or
Purchaser Pension Plan that has been terminated or otherwise wound up,
have been fully discharged in full compliance with applicable Law.
(f) There has been no "reportable event" as that term is
defined in Section 4043 of ERISA and the regulations thereunder with
respect to any of the Purchaser Employee Benefit Plans or Purchaser
Pension Plans subject to Title IV of ERISA which would require the
giving of notice or any event requiring notice to be provided under
Section 4041(c)(3)(C) or 4063(a) of ERISA.
(g) There has been no violation of ERISA with respect to
the filing of applicable returns, reports, documents and notices
regarding any of the Purchaser Employee Benefit Plans or Purchaser
Pension Plans with the Secretary of Labor or the Secretary of the
Treasury or the furnishing of such notices or documents to the
participants or beneficiaries of the Purchaser Employee Benefit Plans
or Purchaser Pension Plans.
(h) True, correct and complete copies of the following
documents, with respect to each of the Purchaser Employee Benefit
Plans and Purchaser Pension Plans (as applicable), have been delivered
to the Seller: (i) any plans and related trust documents, and all
amendments thereto, (ii) the most recent Form 5500s for the past three
years and schedules thereto, (iii) the most recent financial
statements and actuarial valuations for the past three years, (iv) the
most recent Internal Revenue Service determination letter, (v) the
most recent summary plan descriptions (including letters or other
documents updating such descriptions), (vi) written descriptions of
all non-written agreements relating to the Purchaser Employee Benefit
Plans and Purchaser Pension Plans and (vii) all written communications
to employees relating to the Purchaser Employee Benefit Plans or
Purchaser Pension Plans.
(i) There are no pending Legal Proceedings which have been
asserted or instituted against any of the Purchaser Employee Benefit
Plans or Purchaser Pension Plans, the assets of any such plans of
Purchaser, or the plan administrator or any fiduciary of the Purchaser
Employee Benefit Plans or Purchaser Pension Plans with respect to the
operation of such plans (other than routine,
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uncontested benefit claims), and there are no facts or circumstances
which could form the basis for any such Legal Proceeding.
(j) Each of the Purchaser Employee Benefit Plans and
Purchaser Pension Plans has been maintained, in all material respects,
in accordance with its terms and all provisions of applicable Law.
All amendments and actions required to bring each of the Purchaser
Employee Benefit Plans and Purchaser Pension Plans into conformity in
all material respects with all of the applicable provisions of ERISA
and other applicable Laws have been made or taken except to the extent
that such amendments or actions are not required by Law to be made or
taken until a date after the Closing Date and are disclosed in Section
5.17(j) of the Purchaser Disclosure Letter.
(k) Purchaser, any of its Subsidiaries and any ERISA
Affiliate which maintains a "group health plan" within the meaning of
Section 5000(b)(1) of the Code have complied with the notice and
continuation requirements of Section 4980B of the Code, Part 6 of
Subtitle B of Title I of ERISA and the applicable regulations
thereunder.
(l) None of the Purchaser, any of its Subsidiaries, any
ERISA Affiliate or any organization to which any is a successor or
parent corporation, has divested any business or entity maintaining or
sponsoring a defined benefit pension plan having an "amount of
unfunded benefit liabilities" (within the meaning of Section
4001(a)(18) of ERISA) or transferred any such plan to any person other
than the Purchaser or any ERISA Affiliate during the six-year period
ending on the Closing Date.
(m) Neither Purchaser, any of its Subsidiaries nor any
"party in interest" or "disqualified person" with respect to the
Purchaser Employee Benefit Plans or Purchaser Pension Plans has
engaged in a "prohibited transaction" within the meaning of Section
4975 of the Code or Section 406 of ERISA. No fiduciary has any
liability for breach of fiduciary duty or any other failure to act or
comply in connection with the administration or investment of the
assets of any Employee Benefit Plan and Pension Plan.
(n) None of Purchaser, its Subsidiaries, or any ERISA
Affiliate has terminated any Purchaser Employee Benefit Plan or
Purchaser Pension Plan subject to Title IV of ERISA, or incurred any
outstanding liability under Section 4062 of ERISA to the PBGC or to a
trustee appointed under Section 4042 of ERISA. All premiums due to
the PBGC with respect to the Purchaser Employee Benefit Plans and
Purchaser Pension Plans have been paid.
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(o) Except as disclosed on Schedule 5.17(o) of the
Purchaser Disclosure Letter, none of Purchaser or any of its Sub-
sidiaries maintains retiree life or retiree health insurance plans
which are "welfare benefit plans" within the meaning of Section 3(1)
of ERISA.
(p) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will
(i) result in any payment becoming due to any current, former or
retired employee of Purchaser or any of its Subsidiaries;
(ii) increase any benefits otherwise payable under any Purchaser
Employee Benefit Plan or Purchaser Pension Plan; or (iii) result in
the acceleration of the time of payment or vesting of any such
benefits.
(q) No stock or other security issued by Purchaser or any
of its Subsidiaries forms or has formed a material part of the assets
of any Purchaser Employee Benefit Plan or Purchaser Pension Plan.
5.18 Labor.
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(a) Except as set forth in Section 5.18 of the Purchaser
Disclosure Letter, no employees of Purchaser or any of its
Subsidiaries are represented by any labor organization, and no labor
organization or group of employees of Purchaser or any of its
Subsidiaries has made a demand for recognition, has filed a petition
seeking a representation proceeding or given Purchaser or any of its
Subsidiaries written notice of any intention to be represented by a
collective bargaining representative. No collective bargaining
agreement is currently being negotiated with respect to any employees
of Purchaser or any of its Subsidiaries.
(b) Except to the extent set forth in Section 5.18 of the
Purchaser Disclosure Letter, (i) to the knowledge of each of Purchaser
and its Subsidiaries, Purchaser and each of its Subsidiaries is in
material compliance with all applicable Laws respecting employment and
employment practices, terms and conditions of employment and wages and
hours, and with each collective bargaining agreement applicable to it,
and is not engaged in any unfair labor practice; (ii) to the knowledge
of Purchaser, there is no unfair labor practice charge, complaint or
similar claim against Purchaser or any of its Subsidiaries pending or
threatened before the National Labor Relations Board or any similar
foreign Governmental Body; (iii) there is no labor strike, work
slowdown or stoppage or other significant labor dispute or disturbance
pending or, to the knowledge of Purchaser, threatened against or
affecting Purchaser and its Subsidiaries;
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(iv) to the knowledge of Purchaser, there is no representation claim
or petition pending before the National Labor Relations Board or any
similar foreign Governmental Body, and no question concerning
representation exists with respect to the respective employees of
Purchaser or any of its Subsidiaries; (v) no grievance or arbitration
proceeding arising out of or under collective bargaining agreements is
pending, and no claim therefor exists, which in any case could
reasonably be expected to have a Material Adverse Effect on Purchaser
and its Subsidiaries, taken as a whole; and (vi) neither Purchaser nor
any of its Subsidiaries has experienced any work stoppage or other
significant labor difficulty during the past three years.
(c) Section 5.18 of the Purchaser Disclosure Letter sets
forth each agreement and supplemental agreement currently in effect
between Purchaser or any of its Subsidiaries and each collective
bargaining representative representing a group of employees employed
by Purchaser or any of its Subsidiaries, and Seller has been furnished
with a true and complete copy of each such agreement and supplemental
agreement.
(d) Section 5.18 of the Purchaser Disclosure Letter sets
forth the names of all present salaried employees of Purchaser or its
Subsidiaries and their current annual salaries or other compensation.
5.19 Litigation.
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(a) Except as disclosed in Section 5.19 of the Purchaser
Disclosure Letter, (i) there are no Legal Proceedings (including, but
not limited to, any proceedings which seek the revocation, non-renewal
or the adverse modification of any license) asserted or, to the
knowledge of Purchaser, threatened, or any governmental investigation
asserted or threatened, against or affecting Purchaser or any of its
Subsidiaries, at law or in equity, before or by any federal, state,
municipal or other governmental department, commission, board, bureau,
agency, court or other instrumentality, or by any private person,
firm, corporation or other entity (such representation being limited,
in the case of any such matter in which the sole remedy sought or
threatened to be sought, as the case may be, is the payment of money,
to matters in which the sum sought or threatened to be sought is
unspecified or in excess of $15,000), (ii) to the knowledge of
Purchaser, there is no basis for any such Legal Proceeding which could
not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on Purchaser and its Subsidiaries, taken as
a whole and (iii) there are no existing or, to the knowledge of
Purchaser, threatened orders, judgments or decrees of any court or
governmental agency
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affecting Purchaser or any of its Subsidiaries or any of their
respective properties or assets.
(b) Except as set forth in Section 5.19 of the Purchaser
Disclosure Letter, as of the date hereof, there are no Legal
Proceedings pending or, to the knowledge of Purchaser, threatened
against, or any governmental investigation asserted or, to the
knowledge of Purchaser, threatened against, Purchaser or any of its
Subsidiaries which would give any third party the right to enjoin or
rescind the transactions contemplated by this Agreement or otherwise
prevent any of the parties hereto from complying with the terms and
provisions of this Agreement.
5.20 Compliance with Laws. To the knowledge of Purchaser,
--------------------
Purchaser and each of its Subsidiaries is in compliance with all Laws
applicable to it or to the conduct of its business or operations or
the use of its properties (including any leased properties) and
assets, except for (a) Environmental Laws (which are addressed in
Section 5.21), (b) as may be disclosed in Section 5.27 (including, to
the extent set forth therein, in the Recent SEC Documents) or in
Section 5.27 of the Purchaser Disclosure Letter, and (c) such
instances of non-compliance as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
Purchaser and its Subsidiaries, taken as a whole. Neither Purchaser
nor any of its Subsidiaries has received any written notice alleging
any non-compliance with applicable Laws, except as set forth in
Section 5.20 of the Purchaser Disclosure Letter.
5.21 Environmental Matters.
---------------------
(a) For purposes of this Section 5.21, "Real Property"
means all real property presently owned or operated by Purchaser or
any of its Subsidiaries on which facilities are located and all real
property (including property held as trustee or in any other fiduciary
capacity) over which Purchaser or any of its Subsidiaries currently
exercises ownership, dominion, management or control. To the extent
that Real Property includes site leases (the "Site Leases"), any
representation or warranty set forth in this Section 5.21 shall, with
respect to such Site Leases, be deemed to be given to the knowledge of
Purchaser, without any independent investigation. "Divested Real
Property" means any real property formerly owned or operated by
Purchaser or its Subsidiaries which, if it were still so owned or
operated, would constitute Real Property.
(b) Except as set forth in Section 5.21 of the Purchaser
Disclosure Letter or as would not individually or in
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the aggregate have a Material Adverse Effect on Purchaser and its
Subsidiaries, taken as a whole,
(i) The operations of Purchaser and each of its
Subsidiaries are and have been in compliance with all applicable
Environmental Laws,
(ii) to the knowledge of Purchaser, the Real Property
does not (and any Divested Real Property at the time of its
disposition did not) contain any Hazardous Substance in violation
of any applicable Environmental Law,
(iii) neither Purchaser nor any of its Subsidiaries has
any knowledge that, or has received any written notices, demand
letters or written requests for information from any Governmental
Body or any third party indicating that, it may be in violation
of, or liable under, any Environmental Law,
(iv) there are no civil, criminal or administrative
actions, suits, demands, claims, hearings, investigations or
proceedings pending or, to the knowledge of Purchaser, threatened
against Purchaser or any of its Subsidiaries with respect to the
business or operations of Purchaser or any of its Subsidiaries or
the Real Property (or any Divested Real Property) relating to any
violation or alleged violation, of any Environmental Law,
(v) no reports have been filed, or are required to be
filed, by Purchaser or any of its Subsidiaries concerning the
release of any Hazardous Substance or the threatened or actual
violation of any Environmental Law on or at the Real Property (or
any Divested Real Property),
(vi) to the knowledge of Purchaser, there are no
underground storage tanks on, in or under any of the Real
Property, and there were no underground storage tanks on, in or
under any Divested Real Property at the time of its disposition;
and no underground storage tanks have been closed or removed from
any Real Property or Divested Real Property while such Real
Property or Divested Real Property was owned or operated by
Purchaser or any of its Subsidiaries, and
(vii) neither Purchaser nor any of its Subsidiaries has
incurred, and none of the Real Property is presently subject to,
any liabilities fixed (or, to the knowledge of Purchaser,
contingent) relating to any suit, settlement, court order,
administrative order, judgment or claim asserted or arising under
any Environmental Law.
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(c) There are no permits or licenses required under any
Environmental Law in respect of the Real Property, except for such
permits or licenses the absence of which could not reasonably be
expected to have a Material Adverse Effect on Purchaser and its
Subsidiaries, taken as a whole.
(d) Neither Purchaser nor any of its Subsidiaries has
received written notice or otherwise has knowledge that any part of
the Real Property or any Divested Real Property has been or is listed
as a site containing Hazardous Substances pursuant to any
Environmental Law.
5.22 Insurance. Purchaser has made available to Seller
---------
true, complete and correct copies of all policies of insurance of any
kind or nature covering Purchaser or any of its Subsidiaries or any of
their respective employees, properties or assets, including, without
limitation, policies of life, disability, fire, theft, workers
compensation, employee fidelity, product liability and other casualty
and liability insurance. All such policies are in full force and
effect and have not been reduced or cancelled; no change in any such
insurance policy has been notified to Purchaser; and, to the
Purchaser's knowledge, neither Purchaser nor any of its Subsidiaries
is in default of any provision thereof, except for such defaults as
could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Purchaser and its Subsidiaries,
taken as a whole.
5.23 Related Party Transactions. Except as set forth in
--------------------------
Section 5.23 of the Purchaser Disclosure Letter, no Affiliate of
Purchaser (other than its Subsidiaries) has borrowed any moneys from
or has outstanding any indebtedness or other similar obligations to
Purchaser or any of its Subsidiaries, and neither Purchaser nor any of
its Subsidiaries has borrowed any moneys from or has any indebtedness
or other similar obligations to any Affiliates of Purchaser (other
than its Subsidiaries) or any holder of more than 15% of Purchaser's
issued and outstanding shares of capital stock. Except as set forth
in Section 5.23 of the Purchaser Disclosure Letter, no Affiliate
(other than Subsidiaries) or, to the knowledge of Purchaser, holder of
more than 15% of the issued and outstanding common stock of Purchaser
nor, to the knowledge of Purchaser, any officer or employee of
Purchaser or its Affiliates (i) owns any direct or indirect interest
of any kind in, or controls or is a director, officer, employee or
partner of, or consultant to, or lender to or borrower from or has the
right to participate in the profits of, any Person which is (A) a com-
petitor, supplier, customer, landlord, tenant, creditor or debtor of
Purchaser or any of its Subsidiaries, (B) engaged in a business
related to the business
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of Purchaser or any of its Subsidiaries, or (C) a participant in any
transaction to which Purchaser or any of its Subsidiaries is a party
or except where any officer or employee of Purchaser or its Affiliates
owns less than 5% of the issued and outstanding capital stock of such
Person and such Person's equity securities are traded or quoted on a
recognized stock exchange or quotations system, (ii) is a party to any
Contract with Purchaser or any of its Subsidiaries.
5.24 Financial Advisors. Except as set forth in Section
------------------
5.24 of the Purchaser Disclosure Letter, no Person has acted, directly
or indirectly, as a broker, finder or financial advisor for the
Purchaser in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like
payment in respect thereof. Purchaser and its Affiliates have entered
into no agreement or arrangement which would require Seller or any of
its Affiliates to pay any such fee or commission.
5.25 Claims to Property. Except as otherwise disclosed in
------------------
this Agreement or the Purchaser Disclosure Letter, no Affiliates of
Purchaser (other than its Subsidiaries) have any claim to any
property, asset or right owned by Purchaser or any of its Subsidiaries
or used by Purchaser or any of its Subsidiaries in the conduct of its
business.
5.26 Licenses; Permits; Authorizations. Purchaser and its
---------------------------------
Subsidiaries have all material approvals, authorizations, consents,
licenses (excluding FCC licenses), orders and permits (except for
sales and use tax permits, franchise tax registrations and zoning
ordinances, variances and permits) of all Governmental Bodies,
required by the nature of the operations of Purchaser or any of its
Subsidiaries to permit the operation thereof in the manner in which
they are currently conducted (collectively, the "Purchaser Licenses").
Purchaser or one of its Subsidiaries is the authorized legal holder of
the Purchaser Licenses issued to and used by it, none of which is
subject to any restriction or condition which would limit in any
material respect the full operation of Purchaser or any of its
Subsidiaries as now or proposed to be operated.
5.27 FCC Matters.
-----------
(a) Section 5.27(a) of the Purchaser Disclosure Letter sets
forth a true and complete list of the following information for each
220 MHz land mobile radio system under management by Purchaser or any
of its Subsidiaries or which Purchaser or any of its Subsidiaries
holds an option to acquire (individually, a "System," and,
collectively, the "Systems"):
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(i) the name of the FCC licensee of the System (and an
appropriate notation if any such licensee is an Affiliate or an
"associate" (as defined under the Securities Exchange Act of
1934, as amended) of Purchaser), the call sign, the licensed
transmitter location (by site coordinates and city) and the
transmitter location (by site coordinates and city) on which a
system has been constructed that is different from the licensed
location, the frequency or frequencies authorized, the date of
construction of the frequencies, the number of frequencies
constructed and the license renewal date;
(ii) a list and current copies (or written summaries,
including all material terms, in the case of oral agreements) of
all contracts (excluding customer contracts), leases and site
licenses related to Purchaser's SMR business and the Systems,
including, without limitation, all agreements between purchaser
and licensee, all site licenses, equipment leases or installment
sale contracts, partnership, joint-venture or joint-use
agreements, management agreements, dealer agreements, short-space
agreements or the like;
(iii) to Purchaser's knowledge, a list of all agreements
between the licensee and any third party relating to the license,
including, without limitation, rights of first refusal, options
and other such rights or obligations which may affect the rights
of Purchaser to manage the license or to exercise any of
Purchaser's option or right of first refusal to acquire the
license; and
(iv) a list of all installed equipment with respect to
such System for which title is held by Purchaser.
(b) Except as set forth in Section 5.27(a) of the Purchaser
Disclosure Letter, all of the contracts, leases and site licenses
relating to the Systems have been entered into by Purchaser on arm's
length terms with non-Affiliates. Neither Purchaser nor any of its
Subsidiaries nor, to the knowledge of Purchaser, any of the other
contracting parties is in default in any material respect, or has
acted or failed to act in a manner which, with notice or the passage
of time or both, will result in a material default, under any of the
contracts, leases, and site licenses, and no penalties have been
incurred nor are any material amendments pending with respect to any
of such contracts, leases and site licenses.
(c) Except as set forth in Section 5.27(c) of the Purchaser
Disclosure Letter or in the Purchaser's Annual Report
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on Form 10-K for the fiscal year ended December 31, 1995 or Quarterly
Report on Form 10-Q for the period ended March 31, 1996 (collectively,
as filed prior to the date hereof, without taking into account any
amendments filed after the date hereof, the "Recent SEC Documents"),
all of the properties, equipment and systems of the Purchaser or any
of its Subsidiaries, and all of the properties, equipment and systems
of the Systems and all properties, equipment and systems of Purchaser
or any of its Subsidiaries and the Systems to be added in connection
with any contemplated system expansion or construction prior to
Closing are and will be in compliance with all standards or rules
imposed by any Governmental Body, including, without limitation, the
FCC and (if applicable) any public utilities commission or other state
or local governments or instrumentalities (but excluding Environmental
Laws, which are not addressed hereby) or as imposed under any
agreements with customers, and are and will be in good repair and
working order.
(d) Except as set forth in Section 5.27(d) of the Purchaser
Disclosure Letter or the Recent SEC Documents, to the knowledge of
Purchaser, all franchise, license or other fees and charges which have
become due with respect to the FCC licenses for the Systems have been
duly and timely paid, and Purchaser or one of its Subsidiaries has
made appropriate provision for any such fees and charges which have
accrued and remain unpaid. Except as set forth in Section 5.27(d) of
the Purchaser Disclosure Letter or the Recent SEC Documents, to the
knowledge of Purchaser, all licenses, necessary permits, consents and
authorizations required to construct and operate the Systems from the
FCC and, if applicable, any public utilities commission, have been
duly obtained in compliance with all FCC Rules, regulations and
policies and are in good standing. Except as set forth in Section
5.27(d) of the Purchaser Disclosure Letter or the Recent SEC
Documents, to the knowledge of Purchaser, the FCC licenses for the
Systems are valid and in full force and effect without conditions
except for such conditions as are stated on the FCC license or as are
generally applicable to holders of 220 MHz non-nationwide FCC licenses
in the Private Land Mobile Radio Service. Except as set forth in
Section 5.27(d) of the Purchaser Disclosure Letter or the Recent SEC
Documents, to the knowledge of Purchaser, no event has occurred or is
continuing which could (i) result in the revocation or termination or
adverse modification of any FCC license that is managed by, or under
option to, Purchaser or any of its Subsidiaries, or (ii) adversely
affect any of the rights of the FCC licensee or Purchaser or any of
its Subsidiaries thereunder. Except as set forth in Section 5.27(d)
of the Purchaser Disclosure Letter or the Recent SEC Documents,
Purchaser has no reason to believe or any knowledge that the FCC
licenses will not be renewed in the
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ordinary course or that a transfer or assignment to Purchaser of the
FCC licenses will not be granted in the ordinary course.
(e) Except as set forth in Section 5.27(e) of the Purchaser
Disclosure Letter or the Recent SEC Documents, to the knowledge of
Purchaser, Purchaser's (or its Subsidiary's) management of the Systems
complies with the FCC's rules, regulations and policies. Except as
set forth in Section 5.27(e) of the Purchaser Disclosure Letter or the
Recent SEC Documents, to the knowledge of Purchaser, there is no
investigation, inquiry or other proceeding pending, or, to Purchaser's
knowledge, threatened before the FCC or other Governmental Body which
relates to the Communications Act or the FCC's rules, regulations or
policies and concerns Purchaser or its Subsidiaries, the FCC licensees
or the Systems.
(f) Except as set forth in Section 5.27(f) of the Purchaser
Disclosure Letter, no additional FCC, state or local public utilities
commission or other authority of like jurisdiction permits, licenses,
consents and authorizations will be required to be obtained by
Purchaser or any of its Subsidiaries as a result of the Closing of the
transactions contemplated hereunder.
(g) Section 5.27(a) of the Purchaser Disclosure Letter
contains a complete list of all Systems that have been constructed
(the "Constructed Systems"), and Section 5.27(g) of the Purchaser
Disclosure Letter contains a complete list of all Systems whose
license has been the subject of an FCC Form 600 modification
application request (the "Modified Systems"). All of the Constructed
Systems were constructed and placed in operation in accordance with
their license or any Special Temporary Authorities ("STAs") granted by
the FCC prior to January 26, 1996. Except as set forth in Section
5.27(g) of the Purchaser Disclosure Letter or in the SEC Documents, to
the knowledge of Purchaser, all required construction notifications to
the FCC for the Constructed Systems have been properly and timely
made. From and after the date hereof, Purchaser shall notify Seller
of (i) the completion of construction of any additional Systems (the
"Additional Systems"), (ii) the decommissioning of any System that had
been constructed and (iii) the termination, cancellation or expiration
without renewal of any agreements referred to in Section 5.27(a)(ii)
with respect to any System, in each case within five business days of
such completion, decommissioning, termination, cancellation or
expiration, as applicable, and shall provide all information with
respect to any Additional Systems as required by Section 5.27 of this
Agreement. The Additional Systems shall be subject to and
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included within Purchaser's warranties and representations of this
Section 5.27.
(h) Except as set forth in Section 5.27(h) of the Purchaser
Disclosure Letter or the Recent SEC Documents, to the knowledge of
Purchaser, none of the FCC licenses under management by, or option to,
Purchaser or any of its Subsidiaries are subject to third-party
agreements that would materially restrict Purchaser's or such
Subsidiary's management of said licenses or the exercise of
Purchaser's or such Subsidiary's option to acquire the Systems.
(i) Except as set forth in Section 5.27(i) of the Purchaser
Disclosure Letter or the Recent SEC Documents, Purchaser is not aware
of any facts which would disqualify Purchaser or any of its
Subsidiaries under the Communications Act, or the rules, regulations
and practices of the FCC, from transferring control of Purchaser and
its Subsidiaries to Seller, as contemplated by this Agreement and
neither Purchaser nor any of its Subsidiaries shall take any action
which would cause such disqualification or fail to take any action if
the failure to take such action would cause such disqualification.
(j) There are no applications, complaints or proceedings
pending or, to the knowledge of Purchaser, threatened before the FCC,
relating to the business and operations of Purchaser or any of its
Subsidiaries which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect on Purchaser and its
Subsidiaries, taken as a whole.
(k) Except as set forth in Section 5.27(k) of the Purchaser
Disclosure Letter or the Recent SEC Documents, there are no competing
applications or proceedings pending or complaints filed of which
Purchaser and its Subsidiaries have received notice or, to the best
knowledge of Purchaser, threatened, as of the date hereof, before the
FCC relating to the business or operations of Purchaser and its Sub-
sidiaries other than applications, proceedings or complaints which
generally affect the land mobile radio industry or 220 MHz licenses.
(l) Neither Purchaser nor any of its Subsidiaries is, as of
the date hereof, the record or beneficial licensee and owner of any
FCC licenses, and Purchaser or its Subsidiaries are entitled to act
and is acting, as of the date hereof, as manager, pursuant to valid
and subsisting management agreements of each of the FCC licenses
identified as Systems in Section 5.27(l) of the Purchaser Disclosure
Letter (and, to the knowledge of Purchaser, the persons identified on
Section 5.27(l) of the Purchaser
<PAGE>
<PAGE>
Disclosure Letter as the holders of such Systems are the sole record
and beneficial licensees and owners of such Systems). Purchaser and
its Subsidiaries are, as of the date hereof, in compliance in all
material respects with all regulations concerning construction and
spacing of the Systems or the facilities associated therewith. None
of the Systems is currently subject to or operating under any short-
space or any other agreement encumbering any of them or any FCC waiver
of otherwise applicable rules or regulations, except as disclosed in
Section 5.27(l) of the Purchaser Disclosure Letter.
(m) Section 5.27(m) of the Purchaser Disclosure Letter sets
forth a true and complete list, by customer, of the units in service
in Purchaser's 220-222 MHz business (the "Units in Service"). The
Units in Service are, to the knowledge of Purchaser, in the possession
of the indicated customers, which customers are billed for their use
of such Units in Service at the actual customer rates shown in
Schedule 5.27(m) of the Purchaser Disclosure Letter and which
customers are required to pay such billed amounts in full (subject to
Purchaser's normal prompt payment, volume and similar discounts, all
of which have been disclosed in writing to Seller) on or before the
relevant due date reflected in the relevant billing.
5.28 Investment in Shares.
--------------------
(a) Purchaser will hold the Shares transferred to it
pursuant to this Agreement for investment and not with a view to, or
for resale in connection with, any distribution thereof within the
meaning of the Securities Act. Subject to the terms of Section 6.10,
Purchaser does not have any present intention of selling, offering to
sell or otherwise disposing of or distributing the Shares transferred
to it pursuant to this Agreement.
(b) Purchaser acknowledges that Seller has disclosed that
the Shares to be transferred to Purchaser pursuant to this Agreement
have not been registered under the Securities Act, as amended, and,
therefore, cannot be resold unless they are registered under the
Securities Act or unless an exemption from registration is available.
(c) Purchaser is sophisticated in financial matters and is
able to evaluate the risks and benefits of the investment in the
Shares.
(d) Purchaser has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the
<PAGE>
<PAGE>
acquisition of the Shares and has had full access to such other
information concerning the Seller as Purchaser has requested.
(e) Purchaser is able to bear the economic risk of its
investment in the Shares for an indefinite period of time, recognizing
that the Shares have not been registered under the Securities Act and,
therefore, cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is available.
5.29 General Partnerships.
--------------------
(a) Purchaser has received inquiries from securities
regulators in Kansas, North Carolina, North Dakota and South Dakota
regarding the syndication of general partnership interests in certain
partnerships (the "Partnerships") for the purpose of the acquisition
of stations licensed by the FCC to operate in the 220-222 MHz band
(the "220 MHz Band"). Purchaser has not received inquiries from any
other Governmental Bodies with respect to the Partnerships or any
similar partnerships.
(b) None of Purchaser or its Subsidiaries (including,
without limitation, Roamer One, Inc. ("Roamer One")), their respective
affiliates or predecessors-in-interest or any of their respective
officers and directors or, to the knowledge of Purchaser, Simmonds or
any of its affiliates, predecessors-in-interest, officers or
directors:
(i) has had any direct participation or role in developing,
preparing or marketing materials for the syndication of the
Partnerships or any similar partnerships;
(ii) has had any involvement in the organization, planning,
formation, or promotion of the Partnerships or any similar
partnerships, or had or has any direct or indirect ownership Interests
in any such partnerships;
(iii) authorized the use of the "Roamer One" name, trademark
or network map in any promotional material associated with the
syndication of any partnership interests (including, without
limitation, interests in the Partnerships); or
(iv) has received directly or indirectly any of the proceeds
of any syndications of such partnership interests (including, without
limitation, interests in the Partnerships) (other than the receipt by
Roamer One of payments in return for Roamer One services as may have
been made pursuant to an Exclusive Management Agreement and Right of
First Refusal entered into between Roamer One and such partnerships or
the Supply
<PAGE>
<PAGE>
Agreement between Roamer One and Voice Data Communications, Inc.
("VDC") entered into on May 3, 1994).
5.30 No Misrepresentation. No representation or warranty
--------------------
of Purchaser contained in this Agreement or in the Purchaser
Disclosure Letter or in any certificate or other instrument furnished
by Purchaser to Seller pursuant to the terms hereof, contains any
untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained herein or therein not
misleading.
ARTICLE VI
COVENANTS
6.1 Access to Information. Each of Seller and Purchaser
---------------------
agrees that, prior to the Closing Date, the other party hereto shall
be entitled, through its officers, employees and representatives
(including, without limitation, its legal and financial advisors and
accountants), to make such investigation of the properties, businesses
and operations of the Business and Radiocoms or Purchaser and their
respective Subsidiaries, as applicable, and such examination of the
books, records and financial condition of the Business and Radiocoms
or Purchaser (and their respective Subsidiaries), as applicable, as
such other party reasonably requests and to make extracts and copies
of such books and records. Any such investigation and examination
shall be conducted during regular business hours and under reasonable
circumstances, and each of Seller and Purchaser shall cooperate, and
shall cause their respective Subsidiaries to cooperate, fully therein.
No investigation by Seller or Purchaser prior to or after the date of
this Agreement shall diminish or obviate any of the representations,
warranties, covenants or agreements of the other party thereto
contained in this Agreement or any other agreements or certificates in
connection with the transactions contemplated by this Agreement or the
Midland Agreement. In order that each of Purchaser and Seller may
have full opportunity to make such physical, business, accounting and
legal review, examination or investigation as it may reasonably
request of the affairs of the Business and Radiocoms or Purchaser (and
their respective Subsidiaries), as applicable, Seller and Purchaser
shall cause the officers, employees, consultants, agents, accountants,
attorneys and other representatives of Radiocoms or Purchaser, as
applicable, to cooperate fully with such representatives in connection
with such review and examination.
<PAGE>
<PAGE>
6.2 Conduct of Purchaser's and Radiocoms's Respective
-------------------------------------------------
Businesses Pending the Closing.
------------------------------
(a) Prior to the Closing Date, except as otherwise
expressly contemplated by this Agreement or with the prior unanimous
written consent of a committee (the "Committee") composed of Ed Hough,
John Simmonds and Nicholas Wilson, which consent will not be
unreasonably withheld, Seller shall cause Radiocoms and its
Subsidiaries (and, to the extent they are engaged in the Business,
any Relevant Affiliates) to, and Purchaser shall, and shall cause its
Subsidiaries to:
(i) conduct its business only in the ordinary course
consistent with past practice;
(ii) use its best efforts to (A) preserve its present
business operations, organization (including, without limitation,
management and the sales force) and goodwill, (B) preserve its
present relationship with Persons having business dealings with
it, and (C) take such actions as may be reasonably necessary to
maintain in good standing all FCC licenses with respect to any
Systems or DTI licenses, permits or authorizations, as
applicable;
(iii) maintain (A) all its assets and properties in
their current condition, ordinary wear and tear excepted, and
(B) insurance upon all of its properties and assets in such
amounts and of such kinds comparable to that in effect on the
date of this Agreement;
(iv) (A) maintain its books, accounts and records in
the ordinary course of business consistent with past practices,
(B) continue to collect accounts receivable and pay accounts
payable utilizing normal procedures and without discounting or
accelerating payment of such accounts (other than in the ordinary
course of business), and (C) comply with all contractual and
other obligations applicable to its operations; and
(v) comply in all material respects with applicable
Laws.
(b) Prior to the Closing Date, except as otherwise
expressly contemplated by this Agreement or with the prior unanimous
written consent of the Committee (which consent shall not be
unreasonably withheld), Seller shall cause Radiocoms and its
Subsidiaries and, to the extent that it is engaged in the Business,
any Relevant Affiliate not to, and Purchaser shall not, and shall
cause its Subsidiaries not to:
<PAGE>
<PAGE>
(i) declare, set aside, make or pay any dividend or
other distribution in respect of its capital stock or repurchase,
redeem or otherwise acquire any outstanding shares of the capital
stock or other securities of, or other ownership interests in,
itself or any of its Subsidiaries, except for the cancellation of
the Existing Shares and the issuance of the Deferred Shares in
lieu thereof; provided, however, that any wholly owned
-------- -------
Subsidiaries of Radiocoms or Purchaser shall be permitted to
declare and pay dividends to Radiocoms or Purchaser, as
applicable, to the extent that funds are legally available
therefor;
(ii) transfer, issue, sell or dispose of any shares of
its capital stock or other securities of itself or its
Subsidiaries or grant options, warrants, calls or other rights to
purchase or otherwise acquire shares of the capital stock or
other securities of itself or any of its Subsidiaries; provided,
--------
however, that (A) Purchaser may issue and sell up to 1,000,000
-------
shares of Purchaser Common Stock and may, subject in each
instance to the prior unanimous written consent of the Committee,
which approval will not be unreasonably withheld, issue up to an
aggregate of 1,500,000 shares of Purchaser Common Stock to
acquire interests in additional FCC licenses to be used in the
operation or development of its business, (B) any such Person may
issue debt securities as permitted by clause (vi), and (C) Seller
may cause shares of any Relevant Affiliate owning any part of the
Business to be transferred to Radiocoms and its Subsidiaries, may
cause Radiocoms to issue the Shares and up to a maximum of 20,000
Preferred Shares (having a liquidation preference not in excess
of $20,000,000) to Seller;
(iii) effect any recapitalization, reclassification,
stock split or like change in its capitalization except, in the
case of Seller, as may be required to authorize the issuance of
the Shares and the Preferred Shares;
(iv) amend its certificate of incorporation, by-laws,
memorandum or articles of association or similar organizational
documents, except that Seller may cause Radiocoms to amend its
Memorandum of Association and Articles of Association solely for
the purposes of authorizing the Shares and the Preferred Shares
as contemplated by this Agreement, or changing the name of
Radiocoms so as to delete the word "Securicor" therefrom, and
Purchaser may amend its certificate of incorporation to increase
the number of authorized shares as necessary to
<PAGE>
<PAGE>
permit Purchaser to consummate the transactions contemplated
hereby;
(v) (A) materially increase the annual level of
compensation of any employee, (B) increase the annual level of
compensation payable or to become payable by it or any of its
Subsidiaries to any of their respective executive officers,
(C) grant any bonus, benefit or other direct or indirect
compensation to any employee, director or consultant, other than
in the ordinary course consistent with past practice and in such
amounts as are fully reserved against in the Radiocoms Financial
Statements or the Purchaser Financial Statements, as applicable,
(D) increase the coverage or benefits available under any (or
create any new) severance pay, termination pay, vacation pay,
company awards, salary continuation for disability, sick leave,
deferred compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan or arrangement
made to, for, or with any of its or its Subsidiaries' directors,
officers, employees, agents or representatives or otherwise
modify or amend or terminate any such plan or arrangement or
(E) enter into any employment, deferred compensation, severance,
consulting, non-competition or similar agreement (or amend any
such agreement) to which it or any of its Subsidiaries is a
party or involving a director, officer or employee of it or any
of its Subsidiaries in his or her capacity as a director, officer
or employee;
(vi) except (A) for trade payables and (B) for pledges
of assets and indebtedness for borrowed money which do not
exceed, individually or in the aggregate, $500,000 (it being
understood that (1) such amount shall not include indebtedness
existing or assets pledged prior to the date of this Agreement
and (2) the transaction value of any asset pledges shall be
deemed to be equal to the fair market value of the assets pledged
in such transaction), borrow monies for any reason or draw down
on any line of credit or debt obligation, or become the
guarantor, surety, endorser or otherwise liable for any debt,
obligation or liability (contingent or otherwise) of any other
Person; provided, however, that, subject to the unanimous prior
-------- -------
written consent of the Committee, which consent will not be
unreasonably withheld, Purchaser may issue an unsecured
debenture, which shall be a general obligation of Purchaser, in
an aggregate principal amount of up to $2,500,000 on such terms
as may be reasonably determined by Purchaser;
<PAGE>
<PAGE>
(vii) except as may be permitted pursuant to clause (vi)
above, subject to any Lien (except for leases that do not
materially impair the use of the property subject thereto in
their respective businesses as presently conducted), any of its
properties or assets (whether tangible or intangible);
(viii) acquire any material properties or assets (other
than, in the case of Purchaser, FCC licenses as contemplated by
clause (ii) above) or sell, assign, transfer, convey, lease or
otherwise dispose of any of its FCC authorizations, FCC licenses,
DTI licenses or material properties or assets, or its rights to
any of the foregoing or to any FCC licenses issued to or held by
other Persons (except for fair consideration in the ordinary
course of business consistent with past practice), or in the case
of Purchaser, take any action, other than in the exercise of its
reasonable business judgment, that causes, or take any action
that could reasonably be expected to cause, the FCC licensees
with respect to any System to cancel, assign, transfer or
otherwise dispose of their FCC license in a manner that would be
adverse to Purchaser;
(ix) cancel or compromise any debt or claim or waive or
release any material right except in the ordinary course of
business consistent with past practice, except, in the case of
Radiocoms for cancellations of intercompany indebtedness
contemplated hereby;
(x) other than, in the case of Purchaser, capital
expenditures necessary for the build-out of the Systems pursuant
to Purchaser's contractual obligations, enter into any commitment
for capital expenditures in excess of $20,000 for any individual
commitment and $100,000 for all commitments in the aggregate;
(xi) enter into, modify or terminate any labor or
collective bargaining agreement or, through negotiation or
otherwise, make any commitment or incur any liability to any
labor organization;
(xii) introduce any material change with respect to its
operations, including, without limitation, any material change in
its "roll-out" plans or the types, nature, composition or quality
of its products or services, or, other than in the ordinary
course of business, make any material change in product
specifications or prices or terms of distributions of such
products;
<PAGE>
<PAGE>
(xiii) enter into any transaction or make or enter into
any Contract which by reason of its size or otherwise is not in
the ordinary course of business consistent with past practice;
(xiv) enter into or agree to enter into any merger or
consolidation with, any corporation or other entity, or engage in
any new business or invest in, make a loan, advance or capital
contribution to, or otherwise acquire the securities of any other
Person except that Seller may engage in such transactions solely
to the extent required to transfer any part of the Business to
Radiocoms and its Subsidiaries;
(xv) transfer any funds or assets to any of its
Affiliates, which funds and assets are, in the aggregate, worth
in excess of $500,000, except for the purchase of goods and
services from any such Affiliate in the ordinary course of
business at the fair market value for such goods and services and
transactions solely to the extent required to transfer any part
of the Business to Radiocoms and its Subsidiaries; or
(xvi) agree to do anything prohibited by this Section
6.2 or anything which would make any of the representations and
warranties of the Purchaser or the Seller in this Agreement or
the Purchaser Documents or the Seller Documents untrue or
incorrect in any material respect as of any time through and
including the Closing Date.
6.3 Consents and Approvals.
----------------------
(a) Seller and Purchaser shall use their respective best
efforts, and shall cooperate with each other, to obtain at the
earliest practicable date all consents and approvals required to
consummate the transactions contemplated by this Agreement; provided,
--------
however, that neither Seller nor Purchaser shall be obligated to pay
-------
any consideration therefor to any third party from whom consent or
approval is requested.
(b) Promptly following the date of this Agreement,
Purchaser shall prepare and file with the Securities and Exchange
Commission a proxy statement and related solicitation materials
relating to a special meeting of the holders of the Purchaser Common
Stock (the "Purchaser Stockholders' Meeting") to approve the issuance
of Purchaser Shares pursuant hereto (such proxy statement, as amended
or supplemented from time to time, being hereinafter referred to as
the "Proxy Statement"), and shall use its best efforts to cause the
Proxy Statement to be mailed to its
<PAGE>
<PAGE>
stockholders at such time and in such manner as permits the Purchaser
Stockholders' Meeting to be held as promptly as practicable. Seller
shall furnish all information as may be reasonably requested by
Purchaser and, in any case, as required with respect to Purchaser by
Regulation 14A under the Securities Exchange Act of 1934, as amended,
for inclusion in the Proxy Statement. The information provided by
Purchaser and Seller, respectively, for use in the Proxy Statement
shall, on the date when the Proxy Statement is first mailed to
Purchaser's stockholders, and on the date of the Purchaser
Stockholders' Meeting, be true and correct in all material respects
and shall not omit to state any material fact required to be stated
therein or necessary in order to make the statements contained therein
not misleading, and Purchaser and Seller each agree to promptly
correct any information provided by it for use in the Proxy Statement
which shall have become false or misleading. Seller and Purchaser
shall instruct, and shall use all reasonable efforts to cause, their
respective accountants to deliver to each other a letter dated the
time the Proxy Statement is mailed to Purchaser's stockholders,
addressed to such party, containing such matters as are required in
accordance with F.A.S. No. 72 and deliver a letter dated as of the
Closing Date bringing down the matters contained in such letter.
(c) Purchaser shall duly call, give notice of, convene and
hold the Purchaser Stockholders' Meeting, for the purpose of
approving, among other matters, the issuance of the Purchaser Shares
pursuant hereto. Purchaser, through its Board of Directors, shall
recommend to its stockholders approval of the foregoing; provided,
--------
however, that if Purchaser's Board of Directors determines, in its
-------
good faith judgment after consultation with independent legal counsel,
that it is necessary to do so in order to comply with its fiduciary
duties to stockholders under applicable law, Purchaser's Board of
Directors may withdraw or modify such recommendation. The Proxy
Statement shall comply as to form in all material respects with all
applicable requirements of the Securities Exchange Act of 1934, as
amended, and no amendment or supplement to the Proxy Statement shall
be made by Purchaser without the prior written approval of Seller
unless Purchaser determines such amendment or supplement is required
by law.
6.4 Filings with Governmental Bodies. As promptly as
--------------------------------
practicable after the execution of this Agreement, each party shall,
in cooperation with the other, file or cause to be filed any reports,
notifications or other information that may be required under the HSR
Act and shall furnish or cause to be furnished to the other all such
information in its possession as may be reasonably necessary for the
completion of the reports,
<PAGE>
<PAGE>
notifications or submissions to be filed by the other. Each party
hereto agrees to use its reasonable best efforts to comply and cause
its Affiliates to comply in a full and timely manner with any request
from a Governmental Body for additional information. The filing fee
with respect to the reports, notifications or other information that
may be required under the HSR Act with respect to the Transactions
shall be borne solely by Purchaser.
6.5 Other Actions.
-------------
(a) Each of Seller and Purchaser shall use its best efforts
to (i) take all actions necessary or appropriate to consummate the
transactions contemplated by this Agreement and (ii) cause the
fulfillment at the earliest practicable date of all of the conditions
to their respective obligations to consummate the transactions
contemplated by this Agreement.
(b) Purchaser shall use its reasonable best efforts to
(i) take all actions necessary or appropriate to consummate the Other
Transactions and (ii) cause the fulfillment at the earliest
practicable date of all of the conditions to its obligations to
consummate the Other Transactions.
(c) Purchaser shall use its best efforts to assure that,
prior to the Closing, the Purchaser Shares have been approved for
quotation on the Small Cap Market, subject to official notice of
issuance.
6.6 Preservation of Records. Subject to Section 6.9(a)
-----------------------
hereof (relating to the preservation of Tax records), Seller and
Purchaser agree that each of them shall preserve and keep the records
held by it relating to the Business for a period of three years from
the Closing Date and shall make such records and personnel available
to the other as may be reasonably required by such party in connection
with, among other things, any insurance claims by, legal proceedings
against or governmental investigations of Seller or Purchaser or any
of their Affiliates or in order to enable Seller or Purchaser to
comply with their respective obligations under this Agreement and each
other agreement, document or instrument contemplated hereby or
thereby. In the event Seller or Purchaser wishes to destroy such
records after that time, such party shall first give ninety (90) days'
prior written notice to the other and such other party shall have the
right at its option and expense, upon prior written notice given to
such party within that ninety (90) day period, to take possession of
the records within one hundred and eighty (180) days after the date of
such notice.
<PAGE>
<PAGE>
6.7 Publicity. Neither Seller nor Purchaser shall issue
---------
any press release or public announcement concerning this Agreement or
the transactions contemplated hereby without obtaining the prior
written approval of the other party hereto, which approval will not be
unreasonably withheld or delayed, unless, in the sole judgment of
Purchaser or Seller, disclosure is otherwise required by applicable
Law or by the applicable rules of any stock exchange on which
Purchaser or Seller (or any Affiliates thereof) lists securities;
provided that, to the extent required by applicable Law, the party
--------
intending to make such release shall use commercially reasonable
efforts consistent with such applicable Law to consult with the other
party with respect to the text thereof.
6.8 Agreements with Respect to Other Transactions. From
---------------------------------------------
and after the execution and delivery of this Agreement, Purchaser
shall not amend, modify, supplement, waive any rights or remedies
under or grant any consents under either the Midland Agreement or the
Asset Purchase Agreement (including, in each case, any schedules or
exhibits thereto), or agree to do any of the foregoing, without the
prior written consent of Seller.
6.9 Tax and Accounting Matters.
--------------------------
(a) Purchaser and Seller agree to furnish or cause to be
furnished to each other, and each at their own expense, as promptly as
practicable, such information (including access to books and records)
and assistance, including making employees available on a mutually
convenient basis to provide additional information and explanations of
any material provided, relating to the Business and/or Radiocoms, its
Subsidiaries and/or its Relevant Affiliates as is reasonably necessary
for the filing of any Tax Return, for the preparation for any audit,
and for the prosecution or defense of any claim, suit or proceeding
relating to any adjustment or proposed adjustment with respect to
Taxes. Purchaser or Radiocoms shall retain in its possession, and
shall provide Seller reasonable access to (including the right to make
copies of), such supporting books and records and any other materials
that Seller may specify with respect to Tax matters of Radiocoms, its
Subsidiaries and/or its Relevant Affiliates for any taxable period
ending on or prior to the Closing Date until the relevant statute of
limitations has expired. After such time, Purchaser may dispose of
such material; provided that prior to such disposition Purchaser shall
--------
give Seller ninety (90) days' prior written notice thereof, and Seller
may, at any time during such ninety (90) day period, at its own
expense, take possession of such materials.
<PAGE>
<PAGE>
(b) Seller shall be liable for and shall pay (and shall
indemnify and hold harmless Purchaser against) all sales, use, stamp,
documentary, filing, recording, transfer or similar fees or taxes or
governmental charges as levied by any taxing authority or governmental
agency in connection with the transfer of the Shares contemplated by
this Agreement or any recapitalization of Radiocoms or any transfer to
Radiocoms of assets or shares that takes place in contemplation of
this Agreement. Purchaser likewise shall be liable for and shall pay
(and shall indemnify and hold harmless Seller against) any such fees,
taxes or governmental charges as levied by any taxing authority or
governmental agency in connection with the issuance of the Purchaser
Shares contemplated by this Agreement.
(c) Within 14 days following the date hereof, Seller will
deliver to Purchaser (i) the Interim Statements, together with an
unqualified audit report thereon by Radiocoms' independent public
accountants and (ii) an unaudited pro forma consolidated balance sheet
of Radiocoms and its Subsidiaries as at March 31, 1996 after giving
effect to the transactions contemplated by this Agreement, including
without limitation the issuance of the Shares and the Preferred
Shares, the transfer of the EFJ Shares and the EFJ Warrant and the
refinancing of intercompany indebtedness (the "Pro Forma Balance
Sheet").
(d) Seller shall (i) take all actions and make any
necessary elections so that, to the maximum extent permissible under
applicable Law, Seller shall obtain the tax benefits in the United
Kingdom and other jurisdictions attributable to Radiocoms and its
Subsidiaries for the tax year ending September 30, 1996 and any tax
year thereafter to the extent permitted by Law and (ii), promptly
after the relevant Tax Returns are filed with the applicable taxing
authorities, transfer funds to Radiocoms equal to the cash value of
such tax benefits to Seller.
6.10 No Solicitation. Purchaser, its affiliates and their
---------------
respective officers, directors, employees, representatives and agents
shall immediately cease any existing discussions or negotiations, if
any, with any parties conducted heretofore with respect to (except as
otherwise expressly permitted by this Agreement) any acquisition of
all or any material portion of the assets of, or (except as otherwise
expressly permitted by this Agreement) any equity interest in,
Purchaser or its Subsidiaries or any business combination with
Purchaser or its Subsidiaries. Purchaser may, directly or indirectly,
furnish information and access, in each case only in response to
unsolicited requests therefor, to any corporation, partnership, person
or other entity or group pursuant to confidentiality agreements, and
may participate in discussions and negotiate with such entity or
<PAGE>
<PAGE>
group concerning any merger, sale of assets, sale of shares of capital
stock or similar transaction involving Purchaser or any Subsidiary or
division of Purchaser, if such entity or group has submitted a written
proposal to Purchaser relating to any such transaction and Purchaser's
Board of Directors by a majority vote determines in its good faith
judgment, after consultation with independent legal counsel, that it
is necessary to do so to comply with its fiduciary duties to
shareholders under applicable law. Purchaser's Board of Directors
shall provide a copy of any such written proposal and a summary of any
oral proposal to Seller immediately after receipt thereof and
thereafter keep Seller promptly advised of any material development
with respect thereto. Except as set forth above, neither Purchaser
nor any of its Affiliates shall, nor shall Purchaser authorize or
permit any of its or their respective officers, directors, employees,
representatives or agents to, directly or indirectly, encourage,
solicit, participate in or initiate discussions or negotiations with,
or provide any information to, any corporation, partnership, person or
other entity or group (other than Seller or any affiliate or associate
of Seller) concerning any merger, sale of assets, sale of shares of
capital stock or similar transaction involving Purchaser or any
Subsidiary or division of Purchaser; provided, however, that nothing
-------- -------
herein shall prevent Purchaser's Board of Directors from taking, and
disclosing to Purchaser's shareholders, a position contemplated by
Rules 14d-9 and 14e-2 promulgated under the Exchange Act with regard
to any tender offer; provided, further, that nothing herein shall
-------- -------
prevent Purchaser's Board of Directors from making such disclosure to
Purchaser's shareholders as, in the good faith judgment of Purchaser's
Board of Directors, after consultation with independent legal counsel,
is necessary to comply with its fiduciary duties to shareholders under
applicable law.
6.11 Recapitalization; Refinancing of Intercompany Debt.
--------------------------------------------------
Prior to the Closing Date, Seller shall take all actions necessary so
that (a) the Existing Shares shall be cancelled and the Shares shall
be issued, substantially on the terms heretofore disclosed to
Purchaser and (b) any debt owed by Radiocoms and any of its
Subsidiaries to Seller and its Affiliates at the Closing Date
(including, without limitation, the EFJ Note) is refinanced such that,
after giving effect to such refinancing and the issuance of the
Preferred Shares in connection therewith, the aggregate liquidation
preference of the Preferred Shares, together with all debt outstanding
of Radiocoms and its Subsidiaries, in each case at the Closing Date,
will not exceed $22 million. Any Preferred Shares issued to Seller or
its Affiliates shall have the terms and conditions provided in Exhibit
A; provided, that in no event shall the aggregate liquidation
--------
preference of the Preferred Shares so issued to
<PAGE>
<PAGE>
Seller in connection with such refinancing exceed the amount of such
indebtedness of Radiocoms and its Subsidiaries to Seller and its
Affiliates prior to such refinancing. For greater certainty, as of
the Closing, all debt so owed by Radiocoms and its Subsidiaries to
Seller and its Affiliates shall be satisfied and cancelled as of the
Closing.
6.12 Updates to Disclosure Letters. Each of Seller and
-----------------------------
Purchaser shall update the Seller Disclosure Letter and Purchaser
Disclosure Letter from time to time and all representations and
warranties that speak as of the date hereof shall be updated as of the
Closing Date; provided that no such update shall be deemed to waive
--------
any breaches of the representation and warranties disclosed as a
result of such updates.
6.13 Non-Compete. Seller agrees, as a means to assure
-----------
Purchaser obtains the full value of the Shares and not in exchange for
separately bargained-for consideration, that for a period of three (3)
years following the Closing, neither Securicor plc nor its direct or
indirect Subsidiaries (other than Purchaser and its Subsidiaries)
will, anywhere in the world, (i) sell, manufacture, distribute or
otherwise transfer "land mobile radio" products or (ii) engage in the
provision of services related to the construction or integration of
land mobile radio product systems; provided, however, that this
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covenant shall not apply (a) to the extent that any law, regulation or
order of any Governmental Body would be violated thereby, (b) to the
business or operations of Dopra Systems Integration, Ltd. ("Dopra") or
Securicor Datatrak, Ltd. ("Datatrak") or Securicor Cellular Services,
Ltd. ("Cellular") or Securicor TrakBak, Ltd. ("TrakBak") as conducted
or proposed to be conducted as of the date hereof or as the reasonable
expansion and growth of such businesses and operations may require in
order to retain their competitiveness in the marketplace. It is
understood and agreed that, if Seller shall sell, transfer or
otherwise dispose of Dopra or Datatrak or Cellular or TrakBak (whether
by merger, sale of stock, sale of all or substantially all of the
business and assets or otherwise) in a transaction with a non-
Affiliate, the provisions of this Section 6.13 shall cease to apply to
the business so sold, transferred or otherwise disposed of.
Notwithstanding the foregoing, to the extent any of the terms of this
Section 6.13 is held to be unenforceable, it is the intention of the
parties that such provision shall be replaced by any court holding
such terms to be unenforceable with another, enforceable provision
that shall as closely as possible approximate the original,
unenforceable term.
<PAGE>
<PAGE>
6.14 FCC Matters.
-----------
(a) From and after the date of this Agreement, until the
earlier of the Closing Date or the termination of this Agreement,
Purchaser undertakes and agrees that it will diligently pursue appeals
of the denial by the FCC of any request by Purchaser or its Affiliates
for the modification of any FCC licenses and will keep Seller informed
with respect to any material developments with respect to such
appeals. Purchaser will copy Seller on any documents delivered by it
to the FCC in connection with any of such appeals and will supply
Seller with copies of any documents received from the FCC with respect
to any of such appeals.
(b) Purchaser and Seller shall cooperate in the
preparation, filing and prosecution of a request to the FCC seeking a
waiver of Section 310(b)(4) of the Communications Act of 1934, as
amended, to permit Purchaser upon Closing to acquire such FCC licenses
as may be agreed by the parties and to participate in such 220 MHz
Band spectrum auctions as may be conducted by the FCC.
6.15 Indemnification; Directors and Officers Insurance.
-------------------------------------------------
(a) For a period of three years after the Closing Date,
Seller shall, to the extent that it remains the majority stockholder
of Purchaser during such period, cause Purchaser to maintain an
extension of coverage of Purchaser's policy of directors' and
officers' liability insurance maintained by Purchaser for the benefit
of those persons who are covered by such policy at the time of the
Closing with respect to matters occurring prior to the Closing Date,
provided that in no event shall Purchaser be required to expend more
than $100,000 per annum to maintain such insurance.
(b) Seller further agrees that for a period of six years
after the Closing Date, Seller shall, to the extent that Seller
remains the majority stockholder of Purchaser, (i) cause the by-laws
of Purchaser to continue to contain the provisions with respect to
indemnification which are set forth in such by-laws as of the date
hereof, and (ii) not permit such provisions to be amended, repealed or
otherwise modified in any manner that would adversely affect the
rights thereunder of individuals who at the Closing Date were
directors, officers, employees or agents of Purchaser, unless such
modification is required by applicable law.
<PAGE>
<PAGE>
6.16 Pension Schemes. Seller agrees that following the
---------------
Closing Date, any employee of Radiocoms as of the Closing Date who is
a participant in any pension scheme of Seller shall be eligible to
participate in the same pension scheme of Seller that such employee
participated in as of the Closing Date subject to the same terms and
conditions of participation (including, without limitation, the terms
of such pension schemes as they may be amended and applicable laws
relating to pensions in England and Wales) that such employee was
subject to on the day that immediately preceded the Closing Date;
provided, however, that the foregoing shall not preclude Seller from
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amending or terminating any of its pension schemes in accordance with
the terms of such pension scheme and the laws of England and Wales.
6.17 Transfer of the Business to Radiocoms and Its
---------------------------------------------
Subsidiaries. Prior to Closing, Seller shall (i) cause its Relevant
------------
Affiliates, if any, to transfer any and all of their respective right,
title and interest in any parts of, or benefits of or rights in, the
Business currently not held or owned by Radiocoms or its Subsidiaries
to Radiocoms or one of its Subsidiaries in such manner so as to ensure
that Radiocoms and its Subsidiaries after the Closing will enjoy and
have all rights, benefits, operations and assets of the Business
without any material diminution of the value or utility of any such
rights, benefits, operations and assets and/or (ii) transfer or cause
to be transferred to Radiocoms all of the issued and outstanding
capital stock of its Relevant Affiliates, if any.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions Precedent to Obligations of Purchaser and
----------------------------------------------------
Seller. The obligation of each of Purchaser and Seller to consummate
------
the transactions contemplated by this Agreement is subject to the
fulfillment, on or prior to the Closing Date of each of the following
conditions (any or all of which may be waived by Purchaser and Seller
in whole or in part to the extent permitted by applicable Law):
(a) Purchaser shall have obtained all consents and waivers
referred to in Section 7.1(a) of the Purchaser Disclosure Letter with
respect to the transactions contemplated by this Agreement and the
Purchaser Documents;
(b) Seller shall have obtained all consents and waivers
referred to in Section 7.1(b) of the Radiocoms Disclosure Letter with
respect to the transactions contemplated by this Agreement and the
Seller Documents;
<PAGE>
<PAGE>
(c) No Legal Proceedings shall have been instituted or
threatened or claim or demand made against Seller, Radiocoms or
Purchaser seeking to restrain or prohibit or to obtain damages with
respect to the consummation of any of the Transactions and there shall
not be in effect any Order by Governmental Body of competent juris-
diction restraining, enjoining or otherwise prohibiting the
consummation of any of the Transactions;
(d) The waiting period under the HSR Act shall have expired
or early termination shall have been granted;
(e) All approvals required to be obtained by Seller,
Purchaser or Midland US from any Governmental Body with respect to any
of the Transactions shall have been obtained;
(f) The Purchaser Stockholders' Meeting shall have been
duly convened and held, and Purchaser shall have obtained the
requisite vote so as to authorize this Agreement, the Midland
Agreement and the consummation of each of the Transactions;
(g) The Other Transactions shall have been consummated as
contemplated in the Midland Agreement, or shall be consummated
simultaneously with the transactions contemplated by this Agreement;
and
(h) Purchaser shall have received the opinion of Fahnestock
& Co. Inc. ("Fahnestock") on the date on which Purchaser's Board of
Directors voted to approve this Agreement and the Midland Agreement,
and the written opinion of Fahnestock, dated on or prior to the date
of the mailing of the Proxy Statement, that the consideration to be
paid by Seller to Purchaser under this Agreement in respect of the
Purchaser Shares (as well as the consideration to be paid by Seller to
Simmonds under the Midland Agreement) is fair to Purchaser and its
stockholders from a financial point of view, and such opinion shall
not have been withdrawn or modified in any material respect.
7.2 Conditions Precedent to Obligations of Purchaser. The
------------------------------------------------
obligation of Purchaser to consummate the transactions contemplated
by this Agreement is subject to the fulfillment, on or prior to the
Closing Date, of each of the following conditions (any or all of which
may be waived by Purchaser in whole or in part to the extent permitted
by applicable Law):
(a) Except for facts, events or changes arising or
occurring between the date hereof and the Closing Date which are
expressly permitted by this Agreement, all representations and
warranties of Seller contained herein shall be true and correct
<PAGE>
<PAGE>
as of the date hereof; and except for facts, events or changes arising
or occurring between the date hereof and the Closing Date which are
expressly permitted by this Agreement, all representations and
warranties of Seller contained herein qualified as to materiality
shall be true and correct, and the representations and warranties of
Seller contained herein not qualified as to materiality shall be true
and correct in all material respects, at and as of the Closing Date
with the same effect as though those representations and warranties
had been made again at and as of that time;
(b) Seller shall have performed and complied in all
material respects with all obligations and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Closing Date;
(c) Purchaser shall have been furnished with certificates
(dated the Closing Date and in form and substance reasonably
satisfactory to Purchaser) executed by Seller, certifying as to the
fulfillment of the conditions specified in Sections 7.2(a) and 7.2(b)
hereof;
(d) Certificates representing the Shares shall have been,
or shall at the Closing be, validly delivered and transferred to the
Purchaser, free and clear of any and all Liens, together with
appropriate stock powers executed by Seller;
(e) There shall not have been or occurred any Material
Adverse Change with respect to Radiocoms and its Subsidiaries, taken
as a whole;
(f) Seller shall have delivered to Purchaser a loan
agreement incorporating the terms set forth on Exhibit B hereto (the
"Loan Agreement") to make available to Purchaser $15 million of
financing;
(g) Seller shall have delivered to Purchaser an agreement
incorporating the terms set forth on Exhibit C hereto (the "Support
Services Agreement") to provide certain services to Radiocoms and its
Subsidiaries after the Closing;
(h) The EFJ Note shall have been cancelled; and
(i) Seller shall have executed and delivered to Purchaser
the Registration Rights Agreement (as hereinafter defined).
7.3 Conditions Precedent to Obligations of Seller. The
---------------------------------------------
obligations of Seller to consummate the transactions
<PAGE>
<PAGE>
contemplated by this Agreement are subject to the fulfillment, prior
to or on the Closing Date, of each of the following conditions (any or
all of which may be waived by Seller in whole or in part to the extent
permitted by applicable Law):
(a) Except for facts, events or changes arising or
occurring between the date hereof and the Closing Date which are
expressly permitted by this Agreement, all representations and
warranties of Purchaser contained herein shall be true and correct as
of the date hereof; and except for facts, events or changes arising or
occurring between the date hereof and the Closing Date which are
expressly permitted by this Agreement, all representations and
warranties of Purchaser contained herein qualified as to materiality
shall be true and correct, and the representations and warranties of
Purchaser contained herein not qualified as to materiality shall be
true and correct in all material respects, at and as of the Closing
Date with the same effect as though those representations and
warranties had been made again at and as of that time;
(b) Purchaser shall have performed and complied in all
material respects with all obligations and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Closing Date;
(c) Seller shall have been furnished with certificates
(dated the Closing Date and in form and substance reasonably
satisfactory to Seller) executed by Purchaser, certifying as to the
fulfillment of the conditions specified in Sections 7.3(a) and 7.3(b)
hereof;
(d) Certificates representing 25,000,000 shares of
Purchaser Common Stock (the Purchaser Shares) shall have been, or
shall at the Closing be, validly delivered to and duly registered in
the name of the Seller, free and clear of any and all Liens;
(e) The Purchaser Shares shall have been approved for
quotation on the Small Cap Market, subject to official notice of
issuance;
(f) Purchaser shall have executed and delivered to Seller
that certain Registration Rights Agreement (the "Registration Rights
Agreement"), in the form of Exhibit D, and that certain Registration
Rights Agreement, dated as of September 23, 1994, among the Company,
Simmonds, RoameR One Holdings, Inc., Anglo York Industries, Inc. and
Howard Davis shall have been terminated;
<PAGE>
<PAGE>
(g) Purchaser shall have furnished evidence of the due
election and qualification to its Board of Directors of the persons
designated prior to Closing by Seller and the removal or resignation
of any other members of Purchaser's Board of Directors designated
prior to Closing by Seller;
(h) There shall not have been or occurred any Material
Adverse Change with respect to Purchaser or Midland US;
(i) Purchaser shall have entered into a warrant agreement
in favor of Seller substantially on the terms set forth in Exhibit E
hereto (the "Warrant Agreement");
(j) Purchaser shall have at Closing a minimum of 162
Constructed Systems (as that term is defined in Section 5.27(f)) under
management pursuant to valid and subsisting management agreements,
including a minimum of 73 Constructed Systems under Category I
management and 26 Constructed Systems under Category II management by
Purchaser pursuant, respectively, to valid and subsisting Category I
and Category II Exclusive Management Agreements and Rights of First
Refusal and valid and subsisting Option to Purchase Agreements as
reflected in Section 5.27(a)(iv) of the Purchaser Disclosure Letter,
which Constructed Systems shall have been timely and validly
constructed at primary transmitter sites licensed by the FCC pursuant
to an order that is not subject to reconsideration or appeal and for
which the time for the request for any such reconsideration or appeal
has expired;
(k) There shall be no material Legal Proceedings pending,
threatened or reasonably likely to be asserted against Purchaser or
its Subsidiaries in any federal or state court, agency or other
Governmental Body with respect to Purchaser's performance, including
its construction or failure to construct of any System in accordance
with the FCC's rules and regulations or the terms of any FCC license,
under any of its management agreements or other agreements concerning
any 220-222 MHz band radio system;
(l) Purchaser shall have delivered a valid, binding and
fully executed Termination and Release of that certain Letter of
Understanding entered into on January 28, 1994 by and between Roamer
One, Inc., Angell Communications, Nancy M. Wilson, Square 1
Communications Partnership, Nicholas R. Wilson and NICMAR;
(m) Purchaser shall have delivered a valid, binding and
fully executed Amendment to the Management Agreement and Options
agreement entered into by and between Roamer One, Inc., and NICMAR
dated January 31, 1994 adding as a system subject to
<PAGE>
<PAGE>
the management by Roamer One, Inc. and under option to Roamer One,
Inc. the following stations: WPCW452, Reno, Nevada and WPFP940,
Denison, Texas; and
(n) Seller shall have received from the United Kingdom
Inland Revenue advance clearance under Section 138 of the Taxation of
Chargeable Gains Act of 1992 to the effect that the consummation of
the transactions contemplated by this Agreement do not give rise to a
capital gain on the transfer of the Shares or the receipt of the
Purchaser Shares.
ARTICLE VIII
DOCUMENTS TO BE DELIVERED
8.1 Documents to be Delivered by Seller. At the Closing,
-----------------------------------
Seller shall deliver, or cause to be delivered, to Purchaser the fol-
lowing:
(a) stock certificates representing the Shares, duly
endorsed in blank or accompanied by a stock transfer power and with
all requisite stock transfer tax stamps attached;
(b) the certificates referred to in Section 7.2(c) hereof;
(c) the opinion of Messrs. Herbert Smith, U.K. counsel to
Seller, in form and substance reasonably satisfactory to Purchaser;
(d) copies of all consents, waivers and approvals referred
to in Section 7.1(a) and (e) hereof, to the extent such consents,
waivers and approvals are required to be obtained by Seller;
(e) an executed copy of the Loan Agreement;
(f) an executed copy of the Registration Rights Agreement;
(g) an executed copy of the Support Services Agreement; and
(h) such other documents as the Purchaser shall reasonably
request.
8.2 Documents to be Delivered by Purchaser. At the
--------------------------------------
Closing, Purchaser shall deliver to the Seller the following:
<PAGE>
<PAGE>
(a) stock certificates representing the Purchaser Shares,
registered in the name of Seller;
(b) the certificates referred to in Section 7.3(c) hereof;
(c) the opinion of, Kohrman, Jackson & Krantz PLL, counsel
to Purchaser, in form and substance reasonably satisfactory to Seller;
(d) copies of all consents, waivers or approvals referred
to in Section 7.2(a) and (e) to the extent such consents, waivers or
approvals are required to be obtained by Purchaser;
(e) an executed copy of the Registration Rights Agreement;
(f) an executed copy of the Warrant Agreement; and
(g) such other documents as Seller shall reasonably
request.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification.
---------------
(a) Seller hereby agrees to indemnify and hold Purchaser,
Radiocoms, and their respective directors, officers, employees,
Affiliates, agents, successors and assigns (collectively, the
"Purchaser Indemnified Parties") harmless from and against:
(i) any and all losses, liabilities, obligations,
damages, costs and expenses based upon, attributable to or
resulting from the failure of any representation or warranty of
Seller hereof to be true and correct in all respects as of the
date made;
(ii) any and all losses, liabilities, obligations,
damages, costs and expenses based upon, attributable to or
resulting from the Excluded Liabilities;
(iii) any and all losses, liabilities, obligations,
damages, costs and expenses based upon, attributable to or
resulting from any breach by Seller of any covenant of Seller;
<PAGE>
<PAGE>
(iv) any and all losses, liabilities, obligations,
damages, costs and expenses based upon, attributable to or
resulting from the transfer of the EFJ Shares and the EFJ Warrant
to Radiocoms (including, without limitation, any Tax liability
occurring, on redemption of the EFJ Shares or their use to redeem
the Preferred Shares, by reason of the tax basis of the EFJ
Shares and the EFJ Warrant being considered to be less than the
face amount of the EFJ Note); and
(v) any and all notices, actions, suits, proceedings,
claims, demands, assessments, judgments, costs, penalties and
reasonable expenses, including reasonable attorneys' and other
professionals' fees and disbursements (collectively, "Expenses")
incident to any and all losses, liabilities, obligations,
damages, costs and expenses with respect to which indemnification
is provided hereunder (collectively, "Losses").
(b) Purchaser hereby agrees to indemnify and hold Seller
and its respective directors, officers, employees, Affiliates, agents,
successors and assigns (collectively, the "Seller Indemnified
Parties") harmless from and against:
(i) any and all Losses based upon, attributable to or
resulting from the failure of any representation or warranty of
the Purchaser to be true and correct in all respects as of the
date made;
(ii) any and all Losses based upon, attributable to or
resulting from any breach by Purchaser of any covenant of
Purchaser;
(iii) any and all Losses based upon, attributable to or
resulting from the failure of the property located at 5800 West
Jefferson Boulevard, Los Angeles, California 90016 (the "Site")
to comply with any Environmental Law (including, without
limitation, any environmental clean-up costs, whether such
environmental clean-up costs are incurred by Intek voluntarily or
in response to actions by Governmental Bodies or other Persons);
provided, however, (A) that, if the Site is sold by Purchaser to
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a third party in a bona fide transaction within one year
following the date hereof, the amount of such Losses shall be
deemed to be reduced by the amount, if any, by which the net
proceeds to Purchaser upon the sale of the Site exceed the net
book value of the Site as reflected on the Purchaser Financial
Statements, and (B) that, in all other cases, the amount of such
Losses shall be deemed to be reduced by $250,000;
<PAGE>
<PAGE>
(iv) any and all Losses attributable to the Olympic
Plastics Simplified Employees Pension Plan referred to in Section
5.17(a) of the Purchaser Disclosure Letter; and
(v) any and all Expenses incident to the foregoing.
9.2 Limitations on Indemnification for Breaches of
----------------------------------------------
Representations and Warranties.
------------------------------
(a) An indemnifying party shall not have any liability for
a breach of a representation or warranty under Section 9.1(a)(i) or
(b)(i) hereof unless the aggregate amount of Losses and Expenses to
the indemnified parties finally determined to arise thereunder based
upon, attributable to or resulting from the failure of any
representation or warranty to be true and correct, exceeds $300,000
(the "Basket") and, in such event, the indemnifying party shall be
required to pay the entire amount of such Losses and Expenses without
regard to the Basket.
(b) Notwithstanding anything contained in this Agreement to
the contrary, (i) the aggregate liability of Seller and its Affiliates
under Section 9.1(a)(i), except for any liability arising as a result
of the failure of Seller's representations and warranties set forth in
Section 4.14 to be true and correct, shall not exceed $6,000,000 (the
"Seller Cap") and (ii) the aggregate liability of Purchaser and its
Affiliates under Section 9.1(b)(i), except for any liability arising
as a result of the failure of Purchaser's representations and
warranties set forth in Section 5.27 to be true and correct, shall not
exceed $4,000,000 (the "Purchaser Cap").
9.3 Indemnification Procedures.
--------------------------
(a) In the event that any Legal Proceedings shall be
instituted or that any claim or demand ("Claim") shall be asserted by
any Person in respect of which payment may be sought under Section 9.1
hereof (regardless of the Basket referred to above), the indemnified
party shall reasonably and promptly cause written notice of the
assertion of any Claim of which it has knowledge which is covered by
this indemnity to be forwarded to the indemnifying party. The
indemnifying party shall have the right, at its sole option and
expense, to be represented by counsel of its choice, which must be
reasonably satisfactory to the indemnified party, and to defend
against, negotiate, settle or otherwise deal with any Claim which
relates to any Losses indemnified against hereunder. If the indemni-
fying party elects to defend against, negotiate, settle or otherwise
deal with any
<PAGE>
<PAGE>
Claim which relates to any Losses indemnified against hereunder, it
shall within five (5) days (or sooner, if the nature of the Claim so
requires) notify the indemnified party of its intent to do so. If the
indemnifying party elects not to defend against, negotiate, settle or
otherwise deal (as provided herein) with any Claim which relates to
any Losses indemnified against hereunder, fails to notify the
indemnified party of its election as herein provided or contests its
obligation to indemnify the indemnified party against such Losses
under this Agreement, the indemnified party may defend against,
negotiate, settle or otherwise deal with such Claim; provided,
--------
however, that the indemnified party may not settle such Claim without
-------
the consent of the indemnifying party, which consent will not be
unreasonably withheld or delayed. If the indemnified party defends
any Claim, then the indemnifying party shall reimburse the indemnified
party for the Expenses of defending such Claim upon submission of
periodic bills; provided, however, that, if the indemnifying party
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reasonably contests its obligation to indemnify the indemnified party
against such Losses under this Agreement, the indemnifying party may
defer the reimbursement of the periodic bills with respect to such
Losses until such time as it is obligated to make payment to the
indemnified party under Section 9.3(b). If the indemnifying party
shall assume the defense of any Claim, the indemnified party may
participate, at his or its own expense, in the defense of such Claim;
provided, however, that such indemnified party shall be entitled to
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participate in any such defense with separate counsel at the expense
of the indemnifying party if, (i) so requested by the indemnifying
party to participate or (ii) in the reasonable opinion of counsel to
the indemnified party, a conflict or potential conflict exists between
the indemnified party and the indemnifying party that would make such
separate representation advisable; and provided, further, that the
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indemnifying party shall not be required to pay for more than one such
counsel for all indemnified parties in connection with any Claim. The
parties hereto agree to cooperate fully with each other in connection
with the defense, negotiation or settlement of any such Claim.
(b) After any final judgment or award shall have been
rendered by a court, arbitration board or administrative agency of
competent jurisdiction and the expiration of the time in which to
appeal therefrom, or a settlement shall have been consummated, or the
indemnified party and the indemnifying party shall have arrived at a
mutually binding agreement with respect to a Claim hereunder, the
indemnified party shall forward to the indemnifying party notice of
any sums due and owing by the indemnifying party pursuant to this
Agreement with respect to such matter and the indemnifying party shall
be required to pay
<PAGE>
<PAGE>
all of the sums so due and owing to the indemnified party in
accordance with Section 9.3(d).
(c) The failure of the indemnified party to give reasonably
prompt notice of any Claim shall not release, waive or otherwise
affect the indemnifying party's obligations with respect thereto
except to the extent that the indemnifying party can demonstrate
actual loss and prejudice as a result of such failure.
(d) Except as set forth in Section 9.3(e), all payments of
Claims to an indemnified party may be made by wire transfer of
immediately available funds within 10 business days after the date of
the notice of sums due and owing provided for in Section 9.3(b). In
addition, except as set forth in Section 9.3(e), Seller or Purchaser
may elect, at its option, to pay any Claims to an indemnified party in
shares of Purchaser Common Stock, and the number of shares of
Purchaser Common Stock to be transferred in satisfaction of such
liabilities, and the terms of any such transfer, shall be determined
as set forth in Sections 9.3(f). In the event that Purchaser is the
indemnifying party and Seller is the indemnified party with respect to
any Claim, the amount of such Claim shall be increased as appropriate
to reflect the percentage of Purchaser's issued and outstanding
capital stock that is owned beneficially or of record by Seller as of
the date of the notice delivered pursuant to Section 9.3(b) with
respect to such Claim. As an example, if Purchaser must indemnify
Seller for a Claim otherwise amounting to $100,000 and Seller owns 60%
of Purchaser's issued and outstanding capital stock at such time, the
amount of Seller's Claim shall be deemed to be increased to $250,000
(the amount which, when 60% of its value is subtracted, equals the
original amount of the Claim).
(e) Notwithstanding any other provision of this Agreement
to the contrary, any liability of Seller under Section 9.1(a)(i), up
to the Seller Cap, and any liability of Purchaser under Section
9.1(b)(i), up to the Purchaser Cap, shall be payable solely in shares
of Purchaser Common Stock. The number of shares of Purchaser Common
Stock to be transferred with respect to any such liability being paid
in shares of Purchaser Common Stock shall be determined as set forth
in Section 9.3(f).
(f) In the event that Seller or Purchaser, in accordance
with Section 9.3(d), elects or is required to pay any liabilities
owing by it in shares of Purchaser Common Stock, the number of shares
to be transferred with respect to any such liability shall be
determined by dividing the amount of such liability (as such amount
may be adjusted pursuant to Section 9.3(d)) by the Applicable Average
Share Value. The "Applicable
<PAGE>
<PAGE>
Average Share Value" shall be equal to the average of the Daily
Closing Prices for each of the ten Business Days immediately preceding
the date of the notice provided for in Section 9.3(b); and the "Daily
Closing Price" for each such day shall be average of the last bid and
ask price of Purchaser Common Stock quoted on such day on the Small
Cap Market (or such exchange or quotation system as shall report the
trading prices of Purchaser Common Stock at the relevant time).
(g) Purchaser covenants and agrees that, in the event it
issues any shares of Purchaser Common Stock to Seller in payment of
any Claim of Seller ("Additional Shares") hereunder, it will take such
actions as may be necessary to assure that, upon issuance, such
Additional Shares (i) will be duly authorized, validly issued, fully
paid and non-assessable and free of preemptive rights, and will be
registered on the stock certificate books and stock transfer ledgers
of Purchaser solely in the name of Seller and (ii) will be approved
for quotation on the Small Cap Market, subject to official notice of
issuance. Seller will receive good and marketable title to any
Additional Shares within 10 business days after the date of the notice
provided for in Section 9.3(b), free and clear of any and all Liens.
(h) Seller covenants and agrees that, in the event it
transfers any shares of Purchaser Common Stock to Purchaser in payment
of any Claims hereunder ("Adjustment Shares"), it will take such
actions as may be reasonably necessary to assure that, upon such
transfer, Seller shall have delivered to Purchaser good and marketable
title to such Adjustment Shares, free and clear of any and all Liens.
Any such transfers of Adjustment Shares will be made within 10
business days after the date of the notice provided for in Section
9.3(b).
ARTICLE X
MISCELLANEOUS
10.1 Certain Definitions. For purposes of this Agreement,
-------------------
the following terms shall have the meanings specified in this Section
10.1:
"Affiliate" means, with respect to any Person, any other
---------
Person controlling, controlled by or under common control with such
Person. Roamer One Holdings Inc., Nicholas Wilson and their
respective affiliates and associates shall be deemed to be Affiliates
of Purchaser for the purposes of this Agreement.
<PAGE>
<PAGE>
"Affiliated Group" means, with respect to any entity, a
----------------
group of entities required or permitted to file consolidated, combined
or unitary Tax Returns, including, without limitation, Chapter IV of
Part X of the Income and Corporation Taxes Act 1988.
"Basket" shall have the meaning set forth in Section 9.2.
------
"Business" means any and all (a) operations, assets, rights
--------
or liabilities of Radiocoms and its Subsidiaries whatsoever and
(b) operations, assets and rights or liabilities of other of Seller's
Affiliates, other than Dopra, Datatrak, Cellular and TrakBak, related
directly and principally to the business of manufacturing and selling
land mobile radio equipment.
"Business Day" means any day of the year on which national
------------
banking institutions in New York and London are open to the public for
conducting business and are not required or authorized to close.
"Closing" shall have the meaning set forth in Section 3.1.
-------
"Closing Date" shall have the meaning set forth in Section
------------
3.1 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
----
amended.
"Committee" has the meaning set forth in Section 6.2.
---------
"Communications Act" has the meaning set forth in Section
------------------
5.27(h).
"Contract" means any contract, agreement, indenture, note,
--------
bond, loan, instrument, lease, commitment or other arrangement or
agreement.
"DTI" means the Department of Trade and Industry.
---
"EFJ Shares" shall have the meaning set forth in the
----------
recitals to this Agreement.
"Environmental Law" means any applicable federal, state or
-----------------
local statute, law ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decrees,
injunction, directive, requirement or agreement with any
<PAGE>
<PAGE>
Governmental Body, now existing, relating to: (a) the protection,
preservation or restoration of the environment (including, without
limitation, air water vapor, surface water, groundwater, drinking
water supply, surface land, subsurface land, plant and animal life or
any other natural resource), or to human health or safety, or (b) the
exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of Hazardous Substances, in each case as amended. The term
Environmental Law includes, without limitation, (a) the following
statutes, each as amended: (i) the Federal Clean Air Act; (ii) the
Federal Clean Water Act; (iii) the Federal Resource Conservation and
Recovery Act of 1976 ("RCRA"); (iv) the Federal Comprehensive
Environmental Response Compensation and Liability Act of 1980
("CERCLA"); (v) the Federal Toxic Substances Control Act; (vi) the
Federal Occupational Safety and Health Act of 1970; (vii) the Federal
Safe Drinking Water Act; (viii) the Federal Insecticide, Fungicide and
Rodenticide Act; (ix) the California Hazardous Waste Control Law;
(x) the California Hazardous Substance Account Act; (xi) the Porter-
Cologne Water Quality Control Act; and (xii) the California Air
Pollution Control Law; and (b) any common law or equitable doctrine
(including, without limitation, injunctive relief and tort doctrines
such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to, or
threatened as a result of, the presence of or exposure to any
Hazardous Substance.
"Excluded Liabilities" means any and all liabilities of
--------------------
Radiocoms and its Subsidiaries or Affiliates not directly related to
the Business, including, without limitation:
(a) any and all Tax liabilities of Radiocoms and its
Subsidiaries attributable to any asset, right, liability or operation
of Securicor plc or its Affiliates (other than Radiocoms and its
Subsidiaries) that are not included in the Business (including,
without limitation, liabilities arising from any Tax Sharing Agreement
(except to the extent attributable to income, assets or liabilities of
the Business) and any liability for value-added Taxes arising from
activities that are not part of the Business);
(b) any and all liabilities and obligations related to
employees of Radiocoms or any of its Subsidiaries other than those
employees listed on Section 4.17(d) of the Radiocoms Disclosure
Letter;
<PAGE>
<PAGE>
(c) all liabilities of Radiocoms and its Subsidiaries to
Seller and its Affiliates except in respect of the Preferred Shares;
(d) any and all Tax liabilities of Radiocoms and its
Subsidiaries arising as a result of the provisions of sections 94 or
582 of the Income and Corporation Taxes Act 1988 or sections 178 or
179 of the Taxation of Chargeable Gains Act 1992 by virtue of or in
consequence of the entering into or performance of this Agreement,
including, without limitation, Tax liabilities arising from the
transfer of shares of capital stock or other assets to Radiocoms to
ensure that Radiocoms owns all assets related to the Business as of
the Closing Date; and
(e) any Tax liability of Radiocoms and its Subsidiaries
arising as a result of the denial of a deduction for interest accrued
on any intercompany indebtedness which is refinanced in accordance
with Section 6.11 of this Agreement.
"Expenses" shall have the meaning set forth in Section
--------
9.1(a).
"FCC" means the Federal Communications Commission.
---
"GAAP" means, with respect to financial or accounting
----
information concerning any Person, generally accepted accounting
principles as of the date hereof in the United States.
"Governmental Body" means any government or governmental or
-----------------
regulatory body thereof, or political subdivision thereof, whether
federal, state, local or foreign, or any agency, instrumentality or
authority thereof, or any court or arbitrator (public or private).
"Hazardous Substance" means any substance, whether liquid,
-------------------
solid or gas, listed, defined, designated or classified as hazardous,
toxic, radioactive or dangerous, under any applicable Environmental
Law, whether by type or by quantity. Hazardous Substance includes,
without limitation, (aa) any "hazardous substance" as defined in
CERCLA, (bb) any "hazardous waste" as defined in RCRA, and (cc) any
toxic waste, pollutant, contaminant, hazardous substance, toxic
substance, hazardous waste, special waste or petroleum or any
derivative or by-product thereof, radon, radioactive material, friable
asbestos, asbestos containing material releasing friable asbestos,
urea formaldehyde foam insulation, lead and polychlorinated biphenyls
("PCBs").
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust
-------
Improvements Act of 1976.
<PAGE>
<PAGE>
"knowledge" means, with respect to any Person, the actual or
---------
constructive knowledge of such Person and, in the case of a
corporation, the actual or constructive knowledge of its executive
officers and directors, after reasonable investigation (except as set
forth in Section 5.21); provided, however, that with respect to any
-------- -------
representation or warranty of Seller concerning EFJ which is qualified
as to knowledge, "knowledge" means the actual knowledge of Seller's
executive officers and directors without any independent
investigation.
"Law" means any federal, state, local or foreign law
---
(including common law), statute, code, ordinance, rule, regulation or
other requirement.
"Legal Proceeding" means any judicial, administrative or
----------------
arbitral actions, suits, proceedings (public or private), claims or
governmental proceedings.
"Midland Agreement" shall have the meaning set forth in the
-----------------
recitals to this Agreement.
"Lien" means any lien, pledge, mortgage, deed of trust,
----
security interest, claim, lease, charge, option, right of first
refusal, easement, servitude, transfer restriction under any
shareholder or similar agreement, encumbrance or any other restriction
or limitation whatsoever.
"Loan Agreement" has the meaning set forth in Section
--------------
7.2(f).
"Losses" shall have the meaning set forth in Section 9.1(a).
------
"Material Adverse Change" means, with respect to any Person
-----------------------
or the Business, any material adverse change in the business,
properties, results of operations, condition (financial or otherwise)
of such Person, it being presumed that any such change which results
in the decrease of the net asset value of a Person or the Business by
10% or more constitutes a Material Adverse Change.
"Material Adverse Effect" means any effect which has
-----------------------
resulted in, or could be reasonably likely to result in, a Material
Adverse Change.
"Midland US" shall have the meaning set forth in the
----------
recitals to this Agreement.
<PAGE>
<PAGE>
"Order" means any order, injunction, judgment, decree,
-----
ruling, writ, assessment or arbitration award.
"Other Transactions" shall have the meaning set forth in the
------------------
recitals to this Agreement.
"Permits" means any approvals, authorizations, consents,
-------
licenses, permits or certificates.
"Permitted Exceptions" means (i) all defects, exceptions,
--------------------
restrictions, easements, rights of way and encumbrances disclosed in
policies of title insurance which have been made available to
Purchaser or Seller, as applicable; (ii) statutory liens for current
taxes, assessments or other governmental charges not yet delinquent or
the amount or validity of which is being contested in good faith by
appropriate proceedings, provided an appropriate reserve is
established therefor; (iii) mechanics', carriers', workers',
repairers' and similar Liens arising or incurred in the ordinary
course of business that are not material to the business, operations
and financial condition of the property so encumbered or owner
thereof; (iv) zoning, entitlement and other land use and environmental
regulations by any Governmental Body, provided that such regulations
have not been violated; and (v) such other imperfections in title,
charges, easements, restrictions and encumbrances which do not detract
more than 10% from the value of or materially interfere with the
present use of any property subject thereto or affected thereby.
"Person" means any individual, corporation, partnership,
------
firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
"Purchaser" shall have the meaning set forth in the recitals
---------
to this Agreement.
"Purchaser Disclosure Letter" shall have the meaning set
---------------------------
forth in the Section 5.4(a).
"Purchaser Shares" shall have the meaning set forth in
----------------
Section 2.1.
"Purchaser Stockholders' Meeting" shall have the meaning
-------------------------------
ascribed thereto in Section 6.3(b).
"Radiocoms" shall have the meaning set forth in the recitals
---------
to this Agreement.
<PAGE>
<PAGE>
"Radiocoms Disclosure Letter" shall have the meaning set
---------------------------
forth in Section 4.4(a).
"Release" means any release, spill, emission, leaking,
-------
pumping, injection, deposit, disposal, discharge, dispersal, or
leaching into the indoor or outdoor environment, or into or out of any
property.
"Relevant Affiliate" shall have the meaning set forth in
------------------
Section 4.4(a).
"Remedial Action" means all actions to (x) clean up, remove,
---------------
treat or in any other way address any Hazardous Material; (y) prevent
the Release of any Hazardous Material so it does not endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; or (z) perform pre-remedial studies and investigations or
post-remedial monitoring and care.
"Seller" shall have the meaning set forth in the recitals to
------
this Agreement.
"Shares" shall have the meaning set forth in the recitals to
------
this Agreement.
"Simmonds" shall have the meaning set forth in the recitals
--------
to this Agreement.
"Subsidiary" means any other Person of which a majority of
----------
the outstanding voting securities or other voting equity interests are
owned, directly or indirectly, by such Person.
"Taxes" means (i) all federal, state, local or foreign
-----
taxes, charges, fees, imposts, levies or other assessments, including,
without limitation, all net income, gross receipts, capital, sales,
use, ad valorem, value added, transfer, franchise, profits, inventory,
capital stock, license, withholding, payroll, employment, social
security, national insurance, unemployment, excise, severance, stamp,
occupation, property, corporation and estimated taxes, customs duties,
fees, assessments and charges of any kind whatsoever; (ii) all
interest, penalties, fines, additions to tax or additional amounts
imposed by any taxing authority in connection with any item described
in clause (i); and (iii) any transferee liability in respect of any
items described in clauses (i) and/or (ii).
"Tax Return" means all returns, declarations, reports,
----------
estimates, information returns and statements required to be filed in
respect of any Taxes.
<PAGE>
<PAGE>
"Tax Sharing Agreement" means an agreement (whether or not
---------------------
in writing) pursuant to which Tax losses of one entity are made
available to another entity of the "group" or Affiliates for purposes
of Taxes.
"Transactions" shall have the meaning set forth in the
------------
recitals to this Agreement.
10.2 Survival of Representations and Warranties. The
------------------------------------------
parties hereto hereby agree that the representations and warranties of
Seller and of Purchaser shall survive the execution and delivery of
this Agreement, and the Closing hereunder, regardless of any
investigation made by the parties hereto, for a period of eighteen
months following the Closing. Any claims or actions with respect to
any representation or warranty that survives the execution and
delivery of this Agreement and the Closing hereunder shall terminate
unless, within eighteen months after the Closing Date, written notice
of such claims is given to the indemnifying party or such actions are
commenced.
10.3 Expenses. Except as otherwise provided in this
--------
Agreement, Seller and Purchaser shall each bear its own expenses
incurred in connection with the negotiation and execution of this
Agreement and each other agreement, document and instrument
contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.
10.4 Further Assurances. Seller and Purchaser each agrees
------------------
to execute and deliver such other documents or agreements and to take
such other action as may be reasonably necessary or desirable for the
implementation of this Agreement and the consummation of the
transactions contemplated hereby.
10.5 Entire Agreement; Amendments and Waivers. This
----------------------------------------
Agreement (including the exhibits hereto), the Radiocoms Disclosure
Letter and the Purchaser Disclosure Letter represent the entire
understanding and agreement between the parties hereto with respect to
the subject matter hereof and can be amended, supplemented or changed,
and any provision hereof can be waived, only by written instrument
making specific reference to this Agreement signed by the party
against whom enforcement of any such amendment, supplement,
modification or waiver is sought. No information disclosed in any
Section of the Radiocoms Disclosure Letter or Purchaser Disclosure
Letter shall be deemed to have been disclosed for purposes of any
other Section without being specifically cross-referenced in such
Section. No action taken pursuant to this Agreement, including
without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action
of compliance
<PAGE>
<PAGE>
with any representation, warranty, covenant or agreement contained
herein. The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or
subsequent breach. No failure on the part of any party to exercise,
and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
of such right, power or remedy by such party preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder are cumulative and are not exclusive
of any other remedies provided by Law.
10.6 Governing Law. This Agreement shall be governed by
-------------
and construed in accordance with the Laws of the State of New York
(without application of its principles of conflicts of laws).
10.7 Table of Contents and Headings. The table of contents
------------------------------
and section headings of this Agreement are for reference purposes only
and are to be given no effect in the construction or interpretation of
this Agreement.
10.8 Notices. All notices and other communications under
-------
this Agreement shall be in writing and shall be deemed given when
delivered personally or mailed by certified mail, return receipt
requested, to the parties (and may also be transmitted by facsimile to
the Persons receiving copies thereof) at the following addresses (or
to such other address as a party may have specified by notice given to
the other party pursuant to this provision):
If to Seller, to:
Securicor Communications Ltd.
Sutton Park House
15 Carshalton Road
Sutton, Surrey, SM1 4LD England
Attn: Dr. Ed Hough
Telecopier: (011 44) 181-661-0205
With a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Howard Chatzinoff, Esq.
Telecopier: (212) 310-8007
<PAGE>
<PAGE>
If to Purchaser, to:
Intek Diversified Corporation
970 West 190th Street, Suite 720
Torrance, California 90502
Attn: David Neibert
Telecopier: (310) 366-7712
With a copy to:
Kohrman Jackson & Krantz PLL
One Cleveland Center, 20th Floor
1375 East Ninth Street
Cleveland, Ohio 44114
Attn: Steven L. Wasserman, Esq.
Telecopier: (216) 621-6536
10.9 Severability. If any provision of this Agreement is
------------
invalid or unenforceable, the balance of this Agreement shall remain
in effect.
10.10 Binding Effect; Assignment. This Agreement shall be
--------------------------
binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party
beneficiary rights in any person or entity not a party to this
Agreement except as provided below. No assignment of this Agreement
or of any rights or obligations hereunder may be made by either Seller
or Purchaser (by operation of Law or otherwise) without the prior
written consent of the other parties hereto and any attempted
assignment without the required consents shall be void.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first written above.
INTEK DIVERSIFIED CORPORATION
By: /s/ Nicholas R. Wilson
------------------------------------------
Name: Nicholas R. Wilson
Title: Chairman
SECURICOR COMMUNICATIONS LIMITED
By: /s/ Edmund Hough
------------------------------------------
Name: Edmund Hough
Title: Director
<PAGE>
<PAGE>
Each of the undersigned hereby agrees that he will not
unreasonably withhold his consent to any action as to which the
consent of the Committee (as defined in the foregoing Agreement) is
required under Sections 6.2(a) or 6.2(b) of the foregoing Agreement.
/s/ Ed Hough
----------------------------------------
Ed Hough
/s/ John Simmonds
----------------------------------------
John Simmonds
/s/ Nicholas Wilson
----------------------------------------
Nicholas Wilson
<PAGE>
<PAGE>
Security Services plc, a corporation formed under the laws
of England and Wales and the owner of 100% of the issued and
outstanding capital stock of Securicor Communications Limited ("SCL")
hereby guarantees the obligations of SCL under Section 9.1(a) of the
foregoing Stock Purchase Agreement and agrees to cause SCL to provide
the financing contemplated under Section 7.2(f) thereof.
SECURITY SERVICES PLC
By: /s/ Edmund Hough
------------------------------------------
Name: Edmund Hough
Title: Director
NYFS09...:\73\73273\0003\1748\AGR6276L.300
<PAGE>
EXHIBIT 3
JOINT ACQUISITION AGREEMENT
This will confirm the agreement by and among all the
undersigned that the Schedule 13D filed on or about this date with
respect to the beneficial ownership of the undersigned of common stock
of Intek Diversified Corporation is being filed on behalf of each of
the entities named below. This agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
Dated: June 28, 1996
SECURICOR PLC SECURITY SERVICES PLC
By:/s/ Nigel Griffiths By:/s/ Nigel Griffiths
------------------- -------------------
Name: Nigel Griffiths Name: Nigel Griffiths
Title: Director Title: Director
SECURICOR INTERNATIONAL LIMITED SECURICOR GROUP PLC
By:/s/ Nigel Griffiths By:/s/ Nigel Griffiths
------------------- -------------------
Name: Nigel Griffiths Name: Nigel Griffiths
Title: Director Title: Director
NYFS09...:\73\73273\0003\1748\AGR6246U.430
<PAGE>
EXHIBIT 4
VOTING AGREEMENT
AGREEMENT, dated June 18, 1996 (this "Agreement"), by and
among SECURICOR COMMUNICATIONS LIMITED, a company organized under the
laws of England and Wales ("Securicor"), SECURICOR INTERNATIONAL
LIMITED, a company organized under the laws of England and Wales
("Securicor International") and each of the other parties signatory
hereto (each, including Securicor and Securicor International, a
"Stockholder" and, collectively, the "Stockholders").
W I T N E S S E T H:
-------------------
WHEREAS, concurrently herewith, INTEK DIVERSIFIED
CORPORATION, a Delaware corporation (the "Company"), and Securicor are
entering into a Stock Purchase Agreement (as such agreement may
hereafter be amended from time to time, the "Stock Purchase
Agreement;" capitalized terms used and not defined herein have the
respective meanings ascribed to them in the Stock Purchase Agreement)
pursuant to which the Company will acquire from Securicor all of the
issued and outstanding capital stock (other than any preference
shares) of Securicor Radiocoms Limited ("Radiocoms"), a company
organized under the laws of England and Wales and a wholly-owned
subsidiary of Securicor;
WHEREAS, each of the Stockholders owns the number of shares,
par value $.01 per share, of common stock of the Company (the "Shares"
or "Company Common Stock") set forth opposite such Stockholder's name
on Schedule I hereto and, upon consummation of the transactions
contemplated by the Stock Purchase Agreement, Securicor will own
25,000,000 shares;
WHEREAS, as an inducement and a condition to entering into
the Stock Purchase Agreement, the parties hereto have required the
other Stockholders to agree, and the Stockholders have agreed, to
enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual premises, representations, warranties, covenants and agreements
contained herein, the parties hereto hereby agree as follows:
1. Provisions Concerning Company Common Stock. Each
------------------------------------------
Stockholder hereby agrees that during the period commencing on the
date hereof and continuing until the first to occur of (a) the Closing
and (b) the termination of the Stock Purchase Agreement in accordance
with its terms, at any meeting of the holders of Company Common Stock,
however called, or in connection with any written consent of the
holders of Company
<PAGE>
<PAGE>
Common Stock, such Stockholder shall vote (or cause to be voted) the
Shares held of record or Beneficially Owned (as defined below) by such
Stockholder on the date of such vote, whether heretofore owned or
hereafter acquired, (i) in favor of approval of the transactions
contemplated by the Stock Purchase Agreement and any actions required
in furtherance thereof and hereof, including, without limitation, the
issuance of the Purchaser Shares to Securicor on the terms and
conditions set forth in the Stock Purchase Agreement; (ii) against any
action or agreement that would result in a breach in any respect of
any covenant, representation or warranty or any other obligation or
agreement of the Company under the Stock Purchase Agreement (after
giving effect to any materiality or similar qualifications contained
therein); and (iii) except as otherwise agreed to in writing in
advance by Securicor, against any actions that are prohibited pursuant
to Section 6.2 of the Stock Purchase Agreement or that are intended,
or could reasonably be expected, to impede, interfere with, delay,
postpone, or materially, adversely affect the transactions
contemplated by this Agreement and the Stock Purchase Agreement. Such
Stockholder shall not enter into any agreement or understanding with
any Person (as defined below) the effect of which would be
inconsistent or violative of the provisions and agreements contained
in Section 1 or 2 hereof. For purposes of this Agreement,
"Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities
(as determined pursuant to Rule 13d-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), including pursuant to
any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the
same holder, securities Beneficially Owned by a Person shall include
securities Beneficially Owned by all other Persons with whom such
Person would constitute a "group" as within the meanings of Section
13(d)(3) of the Exchange Act. For purposes of this Agreement,
"Person" shall mean an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other
entity. Notwithstanding anything to the contrary, each Stockholder
shall not be required to take any action which would violate any
provisions of applicable law or its obligations under agreements
existing on the date hereof as disclosed in this Agreement.
2. Other Covenants, Representations and Warranties. Each
-----------------------------------------------
Stockholder hereby represents and warrants to the other Stockholders
as follows:
(a) Ownership of Shares. Such Stockholder is the record
-------------------
and Beneficial Owner of the number of Shares set forth opposite such
Stockholder's name on Schedule I hereto. On the date hereof, the
Shares set forth opposite such Stockholder's name on Schedule I hereto
constitute all of the Shares owned of record or Beneficially Owned by
such Stockholder. Except as set forth on Schedule 2(a) hereto, such
Stockholder has sole voting power and sole power to issue instructions
with respect to the matters set forth in Section 1
<PAGE>
<PAGE>
hereof, sole power of disposition, sole power to demand appraisal
rights and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of the Shares set forth
opposite such Stockholder's name on Schedule I hereto, with no
limitations, qualifications or restrictions on such rights.
(b) Power; Binding Agreement. Such Stockholder has the
------------------------
legal capacity, power and authority to enter into and perform all of
such Stockholder's obligations under this Agreement. The execution,
delivery and performance of this Agreement by such Stockholder will
not violate the articles of incorporation, by-laws or similar
organizational documents of such Stockholder or any other agreement to
which such Stockholder is a party including, without limitation, any
voting agreement, stockholder agreement or voting trust. This
Agreement has been duly and validly authorized, executed and delivered
by such Stockholder and constitutes a valid and binding agreement of
such Stockholder, enforceable against such Stockholder in accordance
with its terms, subject to the Bankruptcy Exception. There is no
beneficiary or holder of a voting trust certificate or other interest
of any trust of which such Stockholder is trustee whose consent is
required for the execution and delivery of this Agreement or the
consummation by such Stockholder of the transactions contemplated
hereby.
(c) No Conflicts. (A) No filing with, and no permit,
------------
authorization, consent or approval of, any state or federal public
body or authority is necessary for the execution of this Agreement by
such Stockholder and the consummation by such Stockholder of the
transactions contemplated hereby and (B) none of the execution and
delivery of this Agreement by such Stockholder, the consummation by
such Stockholder of the transactions contemplated hereby or compliance
by such Stockholder with any of the provisions hereof shall (1) result
in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party
right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or
obligation of any kind to which such Stockholder is a party or by
which such Stockholder or any of such Stockholder's properties or
assets may be bound, or (2) violate any order, writ, injunction,
decree, judgment, order, statute, rule or regulation applicable to
such Stockholder or any of such Stockholder's properties or assets.
(d) No Finder's Fees. Except as set forth in Section 4.23
----------------
of the Radiocoms Disclosure Letter or Section 5.24 of the Purchaser
Disclosure Letter, as the case may be, no Person has acted, directly
or indirectly, as a broker, Finder or financial adviser for such
Stockholder, or to such Stockholder's knowledge, the Company, in
connection with the transactions contemplated by the Stock Purchase
Agreement, and no Person, to such
<PAGE>
<PAGE>
Stockholder's knowledge, is entitled to any fee or commission or like
payment in respect thereof.
(e) Other Potential Acquirors. From and after the date
-------------------------
hereof until termination of the Stock Purchase Agreement in accordance
with its terms, such Stockholder shall immediately cease any existing
discussions or negotiations, if any, with any parties conducted
heretofore with respect to any merger, sale of a material portion of
the assets (other than in the ordinary course of business), sale of
shares of capital stock or similar transaction involving the Company
or Radiocoms, or any subsidiary of either of them, and such
Stockholder shall not directly or indirectly, initiate, solicit or
knowingly encourage (including by way of furnishing non-public
information or assistance), or take any other action to facilitate
knowingly, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any merger,
sale of a material portion of the assets (other than in the ordinary
course of business), sale of shares of capital stock or similar
transaction involving the Company or Radiocoms, or any subsidiary of
either of them, or agree to or endorse any merger, sale of assets,
sale of shares, or similar transaction involving the Company or
Radiocoms, or any subsidiary of either of them, or authorize or permit
any of such Stockholder's agents to do any of the foregoing, and such
Stockholder shall promptly notify the other Stockholders of any
proposal and shall provide a copy of any such written proposal and a
summary of any oral proposal to the other Stockholders immediately
after receipt thereof and thereafter keep the other Stockholders
promptly advised of any development with respect thereto.
(f) Restriction on Transfer, Proxies and Non-Interference.
-----------------------------------------------------
Except pursuant to agreements set forth on Schedule 2(f) hereto, such
Stockholder shall not, directly or indirectly: (i) offer for sale,
sell, transfer, tender, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or
understanding with respect to or consent to the offer for sale, sale,
transfer, tender, pledge, encumbrance, assignment or other disposition
of, any or all of such Stockholder's Shares or any interest therein,
unless any Person acquiring such Shares or any interest therein agrees
in writing to assume such Stockholder's obligations under clauses (i),
(ii) and (iii) of Section 1 with respect to such shares, and to be
bound by, this Agreement (other than Section 3 hereof); (ii) grant any
proxies or powers of attorney, deposit any Shares into a voting trust
or enter into a voting agreement with respect to any Shares; or
(iii) take any action that would make any representation or warranty
of such Stockholder contained herein untrue or incorrect or have the
effect of preventing or disabling such Stockholder from performing
such Stockholder's obligations under this Agreement.
<PAGE>
<PAGE>
(g) Reliance by Securicor. Such Stockholder (other than
---------------------
Securicor and Securicor International) understands and acknowledges
that Securicor is entering into the Stock Purchase Agreement in
reliance upon such Stockholder's execution and delivery of this
Agreement.
3. Board Representation. During the two-year period
--------------------
following the consummation of the transactions contemplated by the
Stock Purchase Agreement, each of the parties hereto agrees that
Roamer One Holdings, Inc. ("Roamer One"), shall be entitled to
designate one member of the Board of Directors of the Company,
provided that such designee shall be reasonably acceptable to each of
--------
the Company and Securicor. Each of the parties hereto agrees to vote
the shares of Company Common Stock held by it from time to time in
favor of any such acceptable designee of Roamer One.
4. Stop Transfer; Restrictive Legend. (a) Each
---------------------------------
Stockholder agrees with, and covenants to, Securicor that such
Stockholder shall not request that the Company register the transfer
(book-entry or otherwise) of any certificate or uncertificated
interest representing any of such Stockholder's Shares, unless such
transfer is made in compliance with this Agreement (including, without
limitation, the transfers permitted pursuant to Section 2(f) hereof).
In the event of a stock dividend or distribution, or any change in the
Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the
term "Shares" shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into
which or for which any or all of the Shares may be changed or
exchanged.
(b) All certificates representing any of such
Stockholder's Shares (other than those that are actually transferred
to persons who are not parties hereto pursuant to agreements set forth
on Schedule 2(f)) shall contain the following legend:
"The securities represented by this
certificate, including certain voting
and transfer rights with respect
thereto, are subject to the terms of a
Voting Agreement, dated June 18, 1996,
among Securicor Communications Limited,
Securicor International Limited and the
parties listed on the signature pages
thereto, a copy of which is on file in
the principal office of the Issuer."
<PAGE>
<PAGE>
Upon the earlier of the occurrence of the events specified in clauses
(a) and (b) of Section 1, such legend shall be removed from such
certificate including, without limitation, by issuance of new
certificates in replacement of the legended certificates.
5. Termination. Except as otherwise provided herein, the
-----------
covenants and agreements contained herein with respect to the Shares
shall terminate upon the earlier of (a) termination of the Stock
Purchase Agreement in accordance with its terms and (b) the Closing
thereunder.
6. Stockholder Capacity. Each Stockholder signs solely in
--------------------
its capacity as the record and beneficial owner of such Stockholder's
Shares.
7. Miscellaneous.
-------------
(a) Entire Agreement. This Agreement and the Stock
----------------
Purchase Agreement constitute the entire agreement between the parties
with respect to the subject matter hereof and supersede all other
prior agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof.
(b) Certain Events. Except for transfers of shares made in
--------------
accordance with the terms of agreements set forth on Schedule 2(f),
each Stockholder agrees that this Agreement and the obligations
hereunder (other than the obligations under Section 3) shall attach to
such Stockholder's Shares and shall be binding upon any person or
entity to which legal or beneficial ownership of such Shares shall
pass, whether by operation of law or otherwise, including, without
limitation, such Stockholder's corporate successors. Notwithstanding
any transfer of Shares, the transferor shall remain liable for the
performance of all obligations under this Agreement of the transferor,
except where the Shares were transferred pursuant to an agreement
listed on Schedule 2(f).
(c) Assignment. This Agreement shall not be assigned by
----------
operation of law or otherwise without the prior written consent of
Securicor (in the case of any Stockholder) or each Stockholder (in the
case of Securicor), as applicable.
(d) Amendments, Waivers, Etc. This Agreement may not be
------------------------
amended, changed, supplemented, waived or otherwise modified or
terminated, with respect to any one or more Stockholders, except upon
the execution and delivery of a written agreement executed by the
relevant parties hereto.
<PAGE>
<PAGE>
(e) Notices. All notices, requests, claims, demands and
-------
other communications hereunder shall be in writing and shall be given
(and shall be deemed to have been duly received if so given) by hand
delivery, telegram, telex or telecopy, or by mail (registered or
certified mail, postage prepaid, return receipt requested) or by any
courier service, such as Federal Express, providing proof of delivery.
All communications hereunder shall be delivered to the respective
parties at the following addresses:
If to any Stockholder: At the respective addresses set forth
on Schedule I hereto
with a copy to: Kohrman Jackson & Krantz PLL
One Cleveland Center, 20th Floor
Cleveland, Ohio 44114
Attention: Steven L. Wasserman, Esq.
Telephone: (216) 696-8700
Facsimile: (216) 621-6536
If to Securicor: Securicor Group PLC
Sutton Park House
15 Carshalton Road
Sutton
Surrey SM1 4LD England
Attention: Angus Gribbon, Esq.
Telephone: 0181-770-7000
Facsimile: 0181-643-1059
with a copy to: Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Howard Chatzinoff, Esq.
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
or to such other address as the person to whom notice is given may
have previously furnished to the others in writing in the manner set
forth above.
(f) Severability. Whenever possible, each provision or
------------
portion of any provision of this Agreement will be interpreted in such
manner as to be effective and valid
<PAGE>
<PAGE>
under applicable law but if any provision or portion of any provision
of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other
provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision or
portion of any provision had never been contained herein.
(g) Specific Performance. Each of the parties hereto
--------------------
recognizes and acknowledges that a breach by it of any covenants or
agreements contained in this Agreement will cause the other party to
sustain damages for which it would not have an adequate remedy at law
for money damages, and therefore each of the parties hereto agrees
that in the event of any such breach the aggrieved party shall be
entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to
any other remedy to which it may be entitled, at law or in equity.
(h) Remedies Cumulative. All rights, powers and remedies
-------------------
provided under this Agreement or otherwise available in respect hereof
at law or in equity shall be cumulative and not alternative, and the
exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such right, power or
remedy by such party.
(i) No Waiver. The failure of any party hereto to exercise
---------
any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations hereunder,
and any custom or practice of the parties at variance with the terms
hereof, shall not constitute a waiver by such party of its right to
exercise any such or other right, power or remedy or to demand such
compliance.
(j) No Third Party Beneficiaries. This Agreement is not
----------------------------
intended to be for the benefit of, and shall not be enforceable by,
any person or entity who or which is not a party hereto.
(k) Governing Law. This Agreement shall be governed and
-------------
construed in accordance with the laws of the State of New York,
without giving effect to the principles of conflicts of law thereof.
(l) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
--------------------
ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY SUCH ACTION, SUIT
OR PROCEEDING.
<PAGE>
<PAGE>
(m) Descriptive Headings. The descriptive headings used
--------------------
herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of
this Agreement.
(n) Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed to be an original, but all
of which, taken together, shall constitute one and the same Agreement.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Securicor and each Stockholder have
caused this Agreement to be duly executed as of the day and year first
above written.
SIMMONDS CAPITAL LIMITED SECURICOR COMMUNICATIONS
LIMITED
By: /s/ David C. O'Kell By: /s/ Edmund Hough
--------------------------- ------------------------
Name: David C. O'Kell Name: Edmund Hough
Title: Executive Vice Title: Director
President
ROAMER ONE HOLDINGS, INC. SECURICOR INTERNATIONAL
LIMITED
By: /s/Nicholas R. Wilson By: /s/ Edmund Hough
--------------------------- ------------------------
Name: Nicholas R. Wilson Name: Edmund Hough
Title: President and Chief Title: Director
Executive Officer
AGREED TO AND ACKNOWLEDGED
(with respect to Section 4):
INTEK DIVERSIFIED CORPORATION
By: /s/ Nicholas R. Wilson
---------------------------
Name: Nicholas R. Wilson
Title: Chairman
<PAGE>
<PAGE>
Schedule I to
Voting Agreement
----------------
Name and Address Number of Shares Owned
---------------- ----------------------
SIMMONDS CAPITAL LIMITED 3,010,000 (1)
5255 Yonge Street, Suite 1050
Toronto, Ontario M2N 6P4
CANADA
ROAMER ONE HOLDINGS, INC. 3,000,000 (2)
19401 South Vermont, Suite A205
Torrance, California 90502
SECURICOR INTERNATIONAL LIMITED 937,042
Sutton Park House
15 Carshalton Road
Sutton, Surrey SM1 4LD
ENGLAND
SECURICOR COMMUNICATIONS LIMITED 0 (3)
Sutton Park House
15 Carshalton Road
Sutton, Surrey SM1 4LD
ENGLAND
[FN]
(1) 1,200,000 of these Shares are only beneficially owned by
Simmonds Capital Limited, which has an option to purchase such
Shares from Roamer One Holdings, Inc.
(2) See footnote 1.
(3) Securicor Communications Limited will acquire 25,000,000
Shares pursuant to the Stock Purchase Agreement.
<PAGE>
<PAGE>
Schedule 2(a) to
Voting Agreement
----------------
Agreements restricting the voting or dispositive power of
Simmonds Capital Limited on the Intek shares and number of shares
subject to such agreements:
1. All of the shares of Intek held from time to time by
Simmonds Capital Limited (save for the 1,000,000 shares
which are subject to the Quest agreement referred to in 2
below) are subject to a security interest in favor of Mees
Pierson ICS Limited pursuant to a Debenture dated April 11,
1996.
2. 1,000,000 shares of Intek are subject to a security interest
in favor of Quest Capital Corporation pursuant to a Share
Pledge Agreement dated March 28, 1996. Pursuant to a
Security Agreement dated March 28, 1996, Quest also holds a
security interest in all personal property of SCL including
all other shares of Intek, subordinate only to Mees
Pierson's security interest.
3. See footnote 1 of Schedule I.
4. See Schedule 2(f).
<PAGE>
<PAGE>
Schedule 2(f) to
Voting Agreement
----------------
Agreements pursuant to which Simmonds Capital Limited has
agreed to sell or transfer shares of Intek and number of shares
subject to such agreements:
1. 600,000 shares of Intek are subject to an option granted by
Simmonds Capital Limited in favor of Choi & Choi HK Ltd
pursuant to a Memorandum of Understanding dated September
30, 1995.
2. Up to 546,000 shares of Intek may be used at SCL's option to
prepay a loan from Octagon Limited pursuant to a Debenture
dated September 15, 1995.
3. On April 7, 1995, Simmonds Capital Limited granted the
following individuals call options on the number of shares
of Intek set forth opposite their names below:
(i) John Simmonds: 16,150 shares;
(ii) Harry Dunstan: 5,000 shares;
(iii) Peter Heinke:10,000 shares;
(iv) David O'Kell: 8,850 shares;
(v) Michael StEve: 5,000 shares.
4. All of the shares of Intek held from time to time by
Simmonds Capital Limited (save for the 1,000,000 shares
which are subject to the Quest agreement referred to in 5
below) are subject to a security interest in favor of Mees
Pierson ICS Limited pursuant to a Debenture dated April 11,
1996.
5. 1,000,000 shares of Intek are subject to a security interest
in favor of Quest Capital Corporation pursuant to a Share
Pledge Agreement dated March 28, 1996. Pursuant to a
Security Agreement dated March 28, 1996, Quest also holds a
security interest in all personal property of SCL including
all other shares of Intek, subordinate only to Mees
Pierson's security interest.
NYFS09...:\73\73273\0003\1748\AGR6276L.460
