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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
MARCH 10, 2000
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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CELLNET DATA SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE COMMISSION FILE NUMBER: 94-2951096
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 000-21409 Identification Number)
125 SHOREWAY ROAD
SAN CARLOS, CALIFORNIA 94070
(Address of principal executive offices, including zip code)
(650) 508-6000
(Registrant's Telephone Number, Including Area Code)
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
As previously reported, on February 4, 2000, CellNet Data Systems, Inc.
("CellNet"), together with its subsidiaries (collectively, the "Debtors"), filed
voluntary petitions for relief under Chapter 11 of Title 11 of the United States
Code, 11 U.S.C. Sections 101 et seq. (the "Bankruptcy Code") in the United
States Bankruptcy Court for the District of Delaware -- IN RE CELLNET DATA
SYSTEMS, INC., ET AL., DEBTORS, Chapter 11, Case No. 00-00844 (PJW). The
directors and officers of the Debtors are expected to remain in possession
during the proceedings, subject to the supervision and orders of the Court.
Debtors filed their petitions pursuant to a proposal letter (the
"Proposal Letter") and an attached summary of terms of an agreement (the
"Summary of Terms") with Schlumberger Limited ("Schlumberger") pursuant to which
Schlumberger, or an entity designated by it, would acquire all or substantially
all of the assets and business operations of the Debtors and certain specified
liabilities related thereto. On March 3, 2000, Schlumberger Resource Management
Services, Inc. (as "Purchaser") and Schlumberger Technology Corporation (its
parent company), each affiliates of Schlumberger, entered into an Asset Purchase
Agreement (the "Asset Purchase Agreement") dated as of March 1, 2000 with
certain of the Debtors including CellNet (as "Sellers"). The Asset Purchase
Agreement contains the definitive terms under which the Purchaser would acquire
from the Sellers all or substantially all of the assets and business operations
of the Debtors and certain specified liabilities related thereto. The Asset
Purchase Agreement is intended to carry out the provisions contained in the
Proposal Letter and Summary of Terms, copies of which have been previously filed
with CellNet's Report on Form 8-K dated February 7, 2000 under Item 7 (c). A
copy of the Asset Purchase Agreement has been filed with the United States
Bankruptcy Court for the District of Delaware. A copy of the Asset Purchase
Agreement, without schedules and exhibits, is attached as an exhibit to this
Report on Form 8-K under Item 7 (c).
On March 9, 2000, the parties to the Asset Purchase Agreement entered
into a First Amendment to Asset Purchase Agreement (the "First Amendment") to
effect certain minor changes therein. A copy of the First Amendment is
attached as an exhibit to this Report on Form 8-K under Item 7(c).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
99.1 Asset Purchase Agreement dated as of March 1, 2000.
99.2 First Amendment to Asset Purchase Agreement dated as of March 9,
2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CellNet Data Systems, Inc.
(Registrant)
Date: March 10, 2000
David L. Perry
Vice President and Secretary
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EXHIBIT 99.1
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT, dated as of March 1, 2000,
among the SELLERS SIGNATORY HERETO (the "SELLERS"), including CELLNET DATA
SYSTEMS, INC., a Delaware corporation (the "SELLER REPRESENTATIVE"),
SCHLUMBERGER RESOURCE MANAGEMENT SERVICES, INC., a Delaware corporation (the
"PURCHASER"), and, for purposes of the guaranty set forth in Section 5.12,
SCHLUMBERGER TECHNOLOGY CORPORATION, a Delaware corporation (the "PARENT").
W I T N E S S E T H:
WHEREAS, the Sellers, directly or indirectly, own all of the
properties, assets and goodwill used in connection with the business of
providing data and information management services in the automated meter
reading and other industries (the "BUSINESS");
WHEREAS, the Sellers, through ownership of the Assets (as such
term is hereinafter defined), own and operate the Business;
WHEREAS, each of the Sellers commenced a case (the "CHAPTER 11
CASE") in the United States Bankruptcy Court for the District of Delaware under
chapter 11 of title 11, United States Code (as amended from time to time, the
"BANKRUPTCY CODE") on February 4, 2000 (the "FILING DATE");
WHEREAS, the Sellers advised the Purchaser that they wish to
sell to the Purchaser the Assets, other than the Excluded Assets, upon the terms
and subject to the conditions set forth herein and in accordance with Sections
363 and 365 of the Bankruptcy Code; and
WHEREAS, the Purchaser advised the Sellers that it wishes to
purchase the Assets, other than the Excluded Assets, pursuant to an order of the
Bankruptcy Court (as such term is hereinafter defined) approving, among other
things, such sale under Section 363 of the Bankruptcy Code and the assumption
and assignment of certain Executory Contracts (as such term is defined) to the
Purchaser thereunder under Section 365 of the Bankruptcy Code;
NOW, THEREFORE, the parties hereto hereby agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this
Agreement, the following terms shall have the following meanings:
"ACQUISITION" means either (a) a merger, consolidation, share
exchange or other business combination pursuant to which the Business
is acquired by another Person, (b) the sale by the Sellers to any
Person of (i) the Business, (ii) all or substantially all of the Assets
or (iii) Control of the Sellers or (c) a recapitalization or plan of
reorganization that precludes consummation of the transactions
contemplated by this Agreement.
"ACTION" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.
"AFFILIATE" means, with respect to any specified Person, any
other Person who or which, directly or indirectly through one or more
intermediaries, Controls, is Controlled by or is under common Control
with such specified Person.
"AGREEMENT" means this Agreement, including the Disclosure
Schedule, all exhibits and schedules hereto, all documents,
certificates and instruments delivered pursuant hereto and all
amendments hereto made in accordance with Section 11.10.
"ALTERNATIVE OFFER" means any proposal or offer to the Sellers
from any Person other than the Purchaser or its Affiliates for an
Acquisition.
"ANCILLARY AGREEMENTS" means the Assumption Agreement, the
Bill of Sale, the Confidentiality Agreement, the Intellectual Property
Assignment and the Transition Services Agreement.
"ASSETS" means all of the assets, properties and rights of
every type and description, real, personal and mixed, tangible and
intangible (other than the Excluded Assets), that are owned, leased or
licensed by the Sellers or their Affiliates and used in, held for use
in, or related to the Business on the date hereof, including, without
limitation, the following:
(i) all stock or other ownership interests held by
the Sellers in the companies, partnerships and other
businesses listed in Section 1.01(a)(i) of the Disclosure
Schedule;
(ii) all cash, marketable securities and bank
accounts;
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(iii) the goodwill relating to the Business;
(iv) the Assumed Leases;
(v) all furniture and tools, fixtures, equipment,
machinery, leasehold improvements and other tangible personal
property used in the Business, whether owned or leased,
together with such additions thereto and deletions therefrom
as shall have occurred in the ordinary course of business
prior to the Closing Date;
(vi) all books of account, general, financial, tax
and personnel records, invoices, supplier lists,
correspondence and other documents, records and files and all
Software and copies of the relevant portions of any such
documents, records and files that are commingled with
documents, records and files of other business of the Sellers;
(vii) all Intellectual Property used in the Business;
(viii) all inventories;
(ix) all sales and promotional literature, customer
lists, customer files and other sales-related materials;
(x) all Assumed Contracts;
(xi) to the extent transferable, all municipal, state
and federal franchises, permits, licenses, agreements, waivers
and authorizations;
(xii) all Receivables;
(xiii) all prepaid and other current assets;
(xiv) all insurance proceeds with respect to any
Assets, other than Excluded Assets, which have been damaged or
destroyed prior to the date hereof to the extent an adjustment
therefor has been made;
(xv) all of the Sellers' right, title and interest in
and to all other assets (other than Excluded Assets), rights
and claims of every kind and nature used in the operation of
the Business; and
(xvi) all assets of each Plan (as defined in Section
3.12(a)).
"ASSUMED CONTRACTS" means rights under all contracts,
licenses, sublicenses, Seller Licenses, agreements, commitments, and
sales and purchase orders, and under all
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commitments, bids and offers, other than those specifically excluded
in Section 1.01(b) of the Disclosure Schedule.
"ASSUMED LEASES" means all Leasehold Interests and other
leases included in the Assets, other than those specifically excluded
in Section 1.01(c) of the Disclosure Schedule.
"ASSUMED LIABILITIES" means (a) all liabilities in respect of
the Post-Petition Financing Agreement, including any liabilities
created under the Orders approving the same; (b) all Indebtedness under
the Loan Agreements, dated as of November 23, 1998, as amended or
otherwise modified, by CellNet Data Services (KC), Inc. and CellNet
Data Services (SL), Inc., respectively, with Toronto Dominion (Texas),
Inc., as Administrative Agent, TD Securities (USA), Inc., as Lead
Arranger and Syndication Agent, and the financial institutions whose
names appear as lenders on the signature pages thereof (all of the
foregoing, the "TD LENDERS"); (c) all Indebtedness and other
liabilities accruing prior to the Closing Date under the Multi-Draw
Term Loan Agreement dated as of March 31, 1998, as amended or otherwise
modified between Puget Sound Energy, Inc. ("PUGET"; together with the
TD Lenders, the "PROJECT FINANCE LENDERS") and CellNet Data Services
(SE), Inc.; PROVIDED that Purchaser's liabilities in respect of
attorneys' fees to counsel for the Project Finance Lenders shall be
limited to $200,000; and PROVIDED FURTHER that the Purchaser shall
assume only such liabilities as relate to the claims of the Project
Finance Lenders as secured lenders; (d) all Chapter 11 Expenses
incurred and unpaid as of the Closing Date; (e) all liabilities in
respect of Assumed Contracts and Assumed Leases; (f) ad valorem and
similar property Taxes imposed on the Assets acquired by the Purchaser,
whether or not past due; (g) the liabilities specified in Article VI
hereof; (h) all liabilities in respect of prepaid assets, customer
deposits and other similar items included in the Assets; (i) any
liabilities under any municipal, state or federal permits, licences or
similar governmental authorizations necessary for the use of the Assets
in connection with the Business; (j) all liabilities permitted to be
incurred pursuant to Section 5.01 of this Agreement; and (k) the
Liabilities set forth in Section 1.01(d) of the Disclosure Schedule
PROVIDED, HOWEVER, that the Purchaser shall have the right to amend
Section 1.01(d) of the Disclosure Schedule (i) to add additional
liabilities at any time; and (ii) to delete any listed liability, if
the Seller Representative informs the Purchaser that the creditor to
which such liability is payable is not dealing with the Sellers in the
ordinary course of business in a manner consistent with its past
practices with the Sellers; and no others.
"ASSUMPTION AGREEMENT" means the Assumption Agreement to be
executed by the Purchaser and the Sellers on the Closing Date
substantially in the form of Exhibit 1.01(a).
"BANKRUPTCY COURT" means the United States Bankruptcy Court
for the District of Delaware or such other court having jurisdiction
over the Chapter 11 Case.
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"BANKRUPTCY RULES" means the Federal Rules of Bankruptcy
Procedure, as amended from time to time.
"BASE PRICE" means $55 million in cash.
"BIDDING PROCEDURES ORDER" means an order entered by the
Bankruptcy Court, substantially in the form of Exhibit 1.01(b).
"BILL OF SALE" means the Bill of Sale and Assignment to be
executed by the Sellers on the Closing Date substantially in the form
of Exhibit 1.01(c).
"BRIDGE FINANCING" means the Ten Million Dollars ($10,000,000)
aggregate principal amount of 15% Senior Secured Notes made as of
November 9, 1999, due January 31, 2000 (as amended), the Ten Million
Dollars ($10,000,000) aggregate principal amount of 15% Senior Notes
made as of December 2, 1999, due January 31, 2000 (as amended), the Two
Million Two Hundred Thousand Dollars ($2,200,000) aggregate principal
amount of 15% Senior Secured Notes made as of January 4, 2000, due
January 31, 2000 (as amended), issued by the Seller Representative to
the holders thereof and any applicable fees, other than broker's or
success fees, payable pursuant to such notes.
"BRIDGE FINANCING REPAYMENT AMOUNT" means an amount, not in
excess of $26 million, equal to the sum of (i) the principal amount of
$22.2 million outstanding, (ii) interest accrued under the Bridge
Financing at 15% from the respective dates of issuance of the 15%
Senior Secured Notes until the date of repayment and (iii) any
applicable fees, other than broker's or success fees, payable pursuant
to such Bridge Financing; such amount to be used by the Seller
Representative solely to repay such Bridge Financing.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday
or other day on which banks are required or authorized by Law to be
closed in the City of New York.
"BUSINESS EMPLOYEE" means any employee of the Sellers or their
Affiliates who is employed in the Business.
"CHAPTER 11 EXPENSES" means the costs incurred and expenses
paid or payable by the Sellers in connection with the administration of
the Chapter 11 Case, including, without limitation: (a) fees and
expenses related to the DIP Agreement or in the order approving the
same; (b) obligations to pay professionals' fees and expenses in
connection with the Chapter 11 Case (including, without limitation,
fees of attorneys, accountants, investment bankers, financial advisors,
and consultants retained by the Sellers or any Committee and any
compensation for making a substantial contribution in the Chapter 11
Case) and reimbursement of any expenses incurred by the Sellers prior
to the Closing
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Date in connection therewith (including, without limitation, any
obligations to pay any holdback of such fees and expenses); PROVIDED,
HOWEVER, that, with respect to the monthly fees and expenses payable by
the Sellers to The Blackstone Group, L.P. or any of its Affiliates,
Chapter 11 Expenses shall only mean such monthly expenses for the
period from February 1, 2000 to March 31, 2000; (c) fees and expenses
payable to the United States Trustee under Section 1930 of Title 28,
United States Code or the Bankruptcy Court; (d) expenses of members of
any Committee; and (e) the operating expenses of the Business,
including purchase orders issued in the ordinary course of business and
Taxes relating to the Business incurred in the ordinary course of
business, consistent with past practice. Notwithstanding the foregoing,
the parties agree that Chapter 11 expenses shall not include any
success fee payable to Dubel & Associates, nor shall it include any
success fee payable to The Blackstone Group, L.P. or any of their
respective Affiliates.
"CODE" means the Internal Revenue Code of 1986, as amended,
together with the rules and regulations promulgated thereunder.
"CONFIDENTIALITY AGREEMENT" means the Confidentiality
Agreement between the Seller Representative and the Purchaser, dated as
of December 1, 1999.
"CONTROL" means, as to any Person, the power to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, as trustee (other
than Chapter 11 trustee) or executor, by contract or otherwise. The
term "Controlled" shall have a correlative meaning.
"COMMITTEE" means any official committee of unsecured
creditors appointed by the United States trustee in the Chapter 11
Case.
"DIP AGREEMENT" means either (a) the Post-Petition Credit
Agreement dated as of February 4, 2000, between the Seller
Representative and Schlumberger Technology Corporation, a Texas
corporation and the parent company of the Purchaser, as amended,
supplemented or modified from time to time or (b) any other agreement
pursuant to which the Seller Representative or any other Seller may
obtain financing under Section 364(b), (c) or (d) of the Bankruptcy
Code.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached
hereto.
"ENVIRONMENTAL LAW" means any applicable Law relating to
pollution or protection of the environment.
"ENVIRONMENTAL LIABILITY" means any claim, demand, order,
suit, obligation, liability, cost (including, without limitation, the
cost of any investigation, testing, compliance or remedial action),
consequential damages, loss or expense (including
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attorney's and consultant's fees and expenses) arising out of, relating
to or resulting from any environmental, health or safety matter or
condition, including natural resources, and related in any way to the
Leasehold Interests or to this Agreement or its subject matter, in each
case whether arising or incurred before the Closing Date.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license and other authorization required under
any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"EXCLUDED ASSETS" means:
(i) all claims, causes of action or rights of
recovery for reimbursement, contribution, indemnity or other
similar payment recoverable by the Sellers from or against any
third party with respect to any Retained Liabilities or any
other Liabilities for which the Purchaser is indemnified by
the Sellers under this Agreement (including rights of set-off,
rights to refunds and rights of recoupment from or against any
such third party);
(ii) the Sellers' minute books and stock ledgers;
(iii) all rights of the Sellers under any Excluded
Asset, this Agreement and the Ancillary Agreements;
(iv) all insurance policies currently held by the
Sellers and all rights to the proceeds thereunder, to the
extent they pertain to Excluded Assets or Retained
Liabilities;
(v) all stock or other ownership interests held by
the Sellers in any company, partnership or other business not
listed in Section 1.01(a)(i) of the Disclosure Schedule;
(vi) all proceeds from any Excluded Asset;
(vii) all rights of the Sellers to Tax refunds
relating to Tax Returns filed prior to the Closing and any
future Tax Returns relating to the Excluded Assets.
(viii) any avoidance action arising under chapter 5
of the Bankruptcy Code;
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(ix) any item referred to in Section 1.01(b) or
1.01(c) of the Disclosure Schedule;
(x) any other items set forth in Section 1.01(e) of
the Disclosure Schedule; and
(xi) claims of any Seller against any other Seller.
"FCC APPROVALS" means approval by the Federal Communications
Commission of the Sellers' transfer to the Purchaser of the control of
every license included among the Assets for which such approval is
required.
"FINAL ORDER" means an order of the Bankruptcy Court (a) as to
which the time to appeal shall have expired and as to which no appeal
shall then be pending, or (b) if an appeal shall have been filed or
sought, either (i) no stay of the order shall be in effect or (ii) if
such a stay shall have been granted by a court of competent
jurisdiction, then the stay shall have been dissolved.
"GAAP" means United States generally accepted accounting
principles, as in effect on the date hereof.
"GOVERNMENTAL AUTHORITY" means United States; state;
commonwealth; district; territory; municipality; foreign state;
department, agency or instrumentality of the United States, a state, a
commonwealth, a district, a territory, a municipality, or a foreign
state; or other foreign or domestic government.
"GOVERNMENTAL ORDER" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or
with any Governmental Authority.
"HAZARDOUS MATERIALS" means (a) petroleum, petroleum products,
by-products or breakdown products, radioactive materials, asbestos in
any form that is or could become friable, polychlorinated biphenyls,
and (b) any chemical, material or substance defined or regulated as
toxic or as a pollutant, contaminant or waste under any Environmental
Law.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder.
"INDEBTEDNESS" means, at any time and with respect to any
Person, (a) all indebtedness of such Person for borrowed money, (b) all
indebtedness of such Person for the deferred purchase price of property
or services (other than property, including inventory, and services
purchased, and trade payables, other expense accruals and deferred
compensation items arising, in the ordinary course of business,
consistent with
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past practice), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments (other than performance,
surety and appeal bonds arising in the ordinary course of business in
respect of which such Person's liability remains contingent), (d) all
indebtedness of such Person created or arising under any conditional
sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all obligations
of such Person under leases which have been or should be, in accordance
with GAAP, recorded as capital leases, to the extent required to be so
recorded, (f) all reimbursement, payment or similar obligations of such
Person, contingent or otherwise, under acceptance, letter of credit or
similar facilities, (g) all Indebtedness of others referred to in
clauses (a) through (f) above guaranteed directly or indirectly by such
Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such
Indebtedness, (ii) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness, (iii) to
supply funds to or in any other manner invest in the debtor (including
any agreement to pay for property or services irrespective of whether
such property is received or such services are rendered) or
(iv) otherwise to assure a creditor against loss in respect of such
Indebtedness, and (h) all Indebtedness referred to in clauses
(a) through (g) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien upon or in property (including, without
limitation, accounts and contract rights) owned by such Person,
even though such Person has not assumed or become liable for the
payment of such Indebtedness.
"INTELLECTUAL PROPERTY" means: (a) United States,
international and foreign patents, patent applications, inventions and
invention disclosures, and statutory invention registrations, including
reissues, divisions, continuations, continuations in part, extensions
and reexaminations thereof, all rights therein provided by
international treaties or conventions, and all improvements thereto;
(b) trademarks, service marks, trade dress, logos, trade names,
corporate names, domain names and other source identifiers (and the
goodwill associated with the foregoing), whether or not registered,
including all common law rights, and registrations and applications for
registration thereof, all rights therein provided by international
treaties or conventions, and all renewals of any of the foregoing; (c)
copyrightable works, copyrights, whether or not registered, and
registrations and applications for registration thereof, mask works,
and all rights therein provided by international treaties or
conventions; (d) confidential and proprietary information, including
trade secrets and know-how; (e) Software; (f) all rights to register
and file applications for registration thereof with applicable
authorities and registries throughout the world; and (g) all rights to
sue and recover damages and royalties and to seek injunctive relief for
past, present and future infringement, misappropriation, dilution or
violation thereof.
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"INTELLECTUAL PROPERTY ASSIGNMENT" shall mean the Intellectual
Property Assignment to be executed by the Seller on the Closing Date in
a form reasonably satisfactory to the parties hereto.
"IRS" means the United States Internal Revenue Service.
"LAW" means any foreign or domestic federal, state,
provincial, local or other statute, law, ordinance, regulation, rule,
code, order, other requirement or rule of law.
"LEASEHOLD INTERESTS" means all leasehold interests in all
parcels of land, buildings, facilities and other structures and
improvements, including, without limitation, the leasehold interests
listed in Section 1.01(h) of the Disclosure Schedule.
"LIABILITIES" means any and all debts, liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured
or unmatured or determined or determinable, including, without
limitation, those arising under any Law, Action or Governmental Order
and those arising under any contract, agreement, arrangement,
commitment, Plan or undertaking or otherwise in respect of the Assets
or the Business.
"LIEN" shall mean any mortgage, deed or trust, pledge,
hypothecation, security interest, encumbrance, claim, lien, lease
(including any capitalized lease) or charge of any kind, whether
voluntarily incurred or arising by operations of law or otherwise,
affecting any Assets, including any agreement to give or grant any of
the foregoing, any conditional sale or other title retention agreement
and the filing of or agreement to give any financing statement with
respect to any assets or property under the Uniform Commercial Code of
any state or comparable law of any U.S. jurisdiction.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
the results of operations or the financial condition of the Business,
or on the Assets or the prospects of the Business subsequent to January
27, 2000, other than any Material Adverse Effect resulting from (i) the
filing of the Chapter 11 Case, (ii) any actions taken at the request
of, or with the written consent of, the Purchaser, or with the oral
consent of Brad Kitterman, Remi St. Martin or Jurren Schoonbeek, or
(iii) any employee resignation.
"PERMITTED LIENS" means the following Liens: (a) Liens for
Taxes, assessments or other governmental charges or levies not yet due;
(b) all building codes and zoning ordinances and other Laws of any
Governmental Authority; (c) all utility easements granted to utility
companies or Governmental Authorities; (d) Liens on Excluded Assets;
and (e) such other Liens as are set forth in Section 3.09(b) of the
Disclosure Schedule.
"PERSON" shall mean any natural person, general or limited
partnership, corporation, limited liability company, firm, association,
unincorporated organization,
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trust, joint venture, other entity or group (as defined in
Section 13(d)(3) of the Exchange Act).
"POST-PETITION PROFESSIONAL FEES" means an amount, not in
excess of $200,000, equal to the reasonable and documented
post-petition fees of PricewaterhouseCoopers LLP and Hale & Dorr,
advisors and counsel to the providers of the Bridge Financing, related
to or arising from the secured status of the Bridge Financing.
"PURCHASE PRICE" means the sum of (i) the Base Price plus (ii)
the Bridge Financing Repayment Amount plus (iii) the Post-Petition
Professional Fees.
"RECEIVABLES" means any and all accounts receivable, notes and
other amounts receivable from third parties, including, without
limitation, customers and employees, arising from the conduct of the
Business before the Closing Date, whether or not in the ordinary
course, together with any unpaid financing charges accrued thereon.
"RETAINED LIABILITIES" means all Liabilities except the
Assumed Liabilities.
"SALE ORDER" means an order of the Bankruptcy Court, in
substantially the form attached hereto as Exhibit 1.01(d) and otherwise
in form and substance satisfactory to the Purchaser, approving the sale
of the Assets and assumption or assignment of the Assumed Contracts
under this Agreement.
"SELLER LICENSED INTELLECTUAL PROPERTY" means all Intellectual
Property that a third party licenses to any Seller for use in the
Business.
"SELLER LICENSES" mean all (i) licenses of Intellectual
Property by any Seller to third parties, (ii) licenses of Seller
Licensed Intellectual Property by third parties to any Seller, and
(iii) agreements governing the rights between any Seller and third
parties relating to the development or use of Intellectual Property,
the development or transmission of data, or the use, modification,
framing, linking, advertisement, or other practices with respect to the
Sellers' Internet web sites.
"SELLER OWNED INTELLECTUAL PROPERTY" means all Intellectual
Property owned by the Sellers and used in the Business.
"SELLER SOFTWARE" means all Software developed, manufactured,
distributed, sold, licensed or marketed by the Sellers, and material to
the operation of the Business, including all such Software operated by
the Sellers on their web sites or used by the Sellers in connection
with processing customer orders, storing customer information, or
storing or archiving data.
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"SELLERS" means the sellers who are signatories to this
Agreement; PROVIDED, HOWEVER, that CellNet Funding, LLC shall be a
Seller only for purposes of Sections 3.01, 3.02, 3.03, 3.04, 5.08 and
5.14 and Articles X and XI.
"SOFTWARE" means all material computer software, programs,
databases, source code, and related documentation in any form used in
the Business.
"TAX" or "TAXES" means any and all taxes, fees, levies,
duties, tariffs, imposts, and other charges of any kind (together with
any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any government or
taxing authority, including, without limitation: taxes or other charges
on or with respect to income, franchises, windfall or other profits,
gross receipts, property, intangibles, sales, use, capital stock,
payroll, employment, social security, workers' compensation,
unemployment compensation or net worth; taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, property or other
transfer, value added or gains taxes; license, registration and
documentation fees; and customs duties, tariffs and similar charges.
"TAX RETURNS" means all returns and reports (including
elections, declarations, disclosures, schedules, estimates and
information returns) required to be supplied to a Tax authority
relating to Taxes.
"THIRD PARTY SOFTWARE" means all computer software contained
in the Software developed by a third party that was not developed by or
on behalf of the Sellers.
SECTION 1.02. OTHER DEFINED TERMS. The following terms have
the meanings defined for such terms in the Sections set forth below:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Allocation Statement 2.04(b)
Bankruptcy Code Recitals
Business Recitals
CellNet Funding 3.04(a)
Chapter 11 Case Recitals
Closing 2.05
Closing Date 2.05
Cure Amounts 2.03
ERISA Affiliate 3.12(a)
Exchange Act 3.03
Filing Date Recitals
Financial Statements 3.04(b)
Indemnity Escrow Agent 5.09
Indemnity Escrow Agreement 5.09
</TABLE>
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<TABLE>
<S> <C>
Indemnity Escrow Fund 5.09
Interim Financial Statements 3.04(b)
Losses 10.01(a)
Material Contracts 3.15(a)
Parent Preamble
Plan 3.12(a)
Predecessor Entity 3.04(a)
Property Taxes 7.01(c)
Property Tax Returns 7.01(a)
Purchased Subsidiary 3.13(b)
Purchaser Preamble
Purchaser Indemnified Parties 10.01(a)
Purchaser Returns 7.01(b)
Sale Motion 5.03(a)
SEC 3.04(a)
SEC Documents 3.04(a)
Securities Act 3.04(a)
Seller Representative Preamble
Seller Return 7.01(a)
Seller Systems 3.11(g)
Straddle Period 7.01(c)
Year 2000 Compliant 3.11(g)
</TABLE>
SECTION 1.03. TERMS GENERALLY. (a) Words in the singular shall
include the plural and vice versa, and words of one gender shall include the
other genders as the context requires, (b) the term "hereof," "herein," and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement and not to any particular provision of this
Agreement, and Article, Section, paragraph, Exhibit and Schedule references are
to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement
unless otherwise specified, (c) the word "including" and words of similar import
when used in this Agreement shall mean "including, without limitation," unless
otherwise specified, (d) the word "or" shall not be exclusive, and (e)
provisions shall apply, when appropriate, to successive events and transactions.
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. PURCHASE AND SALE. (a) On the terms and subject
to the conditions set forth in this Agreement, at the Closing, the Sellers shall
sell, convey, assign, transfer and deliver to the Purchaser, and the Purchaser
shall purchase, acquire and accept from
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the Sellers, all of the Sellers' right, title and interest in and to the
Assets, other than the Excluded Assets.
(b) Notwithstanding anything herein to the contrary, the
Purchaser shall not purchase or acquire, and shall have no rights or liabilities
with respect to, any Excluded Asset.
SECTION 2.02. ASSUMPTION AND EXCLUSION OF LIABILITIES. (a) On
the terms and subject to the conditions set forth in this Agreement, at the
Closing, the Purchaser shall assume and shall pay, perform and discharge when
due the Assumed Liabilities, and the Sellers shall not assume, or have any
responsibility for, the Assumed Liabilities.
(b) The Sellers shall retain, and shall be responsible for
paying, performing and discharging when due, and the Purchaser shall not assume
or have any responsibility for, the Retained Liabilities.
SECTION 2.03. CURE AMOUNTS; CHAPTER 11 EXPENSES. The Purchaser
shall, on or prior to 30 days after the Closing Date, (a) pay or make provision
for payment of all monetary defaults and breaches under the Assumed Contracts so
that the Assumed Contracts may be assumed by and assigned to the Purchaser in
accordance with the provisions of Section 365 of the Bankruptcy Code and this
Agreement ("CURE AMOUNTS"), and (b) pay or make provision for payment of the
Chapter 11 Expenses; PROVIDED, HOWEVER, the Sellers shall perform the
obligations of the Purchaser under this Section 2.03 on or prior to the Closing
Date if the funds to cover such obligations are provided to the Sellers by the
Purchaser pursuant to the DIP Agreement or otherwise.
SECTION 2.04. PURCHASE PRICE; CURE OBLIGATIONS; ALLOCATION OF
PURCHASE PRICE. (a) At the Closing, the Purchaser shall pay to the Seller
Representative the Purchase Price.
(b) Prior to the Closing Date and upon the terms set forth
in Section 5.05, the Sellers and the Purchaser shall cooperate and provide
each other with such information as reasonably necessary to allocate the
Purchase Price among the Assets and the Assumed Liabilities in a manner
consistent with the Treasury Regulations under Section 1060 of the Code. On
or prior to March 20, 2000, the Purchaser shall deliver to the Seller's
Representative its good faith estimate of such allocation. As of the Closing
Date, the allocation mutually agreed by the Sellers and the Purchaser shall
become a binding part of this Agreement and shall be documented on a separate
statement (the "ALLOCATION STATEMENT") delivered on the Closing Date by the
Sellers and the Purchaser in accordance with Section 2.06(g) and 2.07(c),
respectively. The Purchaser and each Seller shall each report the federal,
state and local income and other tax consequences of the transactions
contemplated by this Agreement in a manner consistent with such allocations.
The Purchaser and each Seller further covenant and agree not to take an
inconsistent position with respect to such allocations on any Tax Return or
otherwise. The Sellers and the Purchaser agree to prepare and file IRS Form
8594 in a timely fashion in
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accordance with the rules under Section 1060 of the Code and in a manner
consistent with the Allocation Statement.
SECTION 2.05. CLOSING. Subject to the terms and conditions of
this Agreement, the sale and purchase of the Assets contemplated hereby shall
take place at a closing (the "CLOSING") to be held (i) at 10:00 a.m., New York
City time, on the fifth Business Day following the satisfaction or waiver of the
conditions set forth in Article VIII at the offices of Shearman & Sterling, 599
Lexington Avenue, New York, New York, or (ii) at such other time or place as the
Seller Representative and the Purchaser may mutually agree upon in writing (the
day on which the Closing takes place being the "CLOSING DATE"); PROVIDED that
such Closing Date shall not be earlier than ten days following entry of the Sale
Order.
SECTION 2.06. CLOSING DELIVERIES BY THE SELLERS. At the
Closing, the Sellers shall deliver or cause to be delivered to the Purchaser:
(a) executed counterparts of the Ancillary Agreements;
(b) a receipt for the Purchase Price;
(c) an affidavit of each Seller pursuant to Section 1445(b)(2)
of the Code stating that such Seller is not a foreign person within the
meaning of such Section;
(d) such duly executed instruments as are necessary to
effectuate the transfer of the Sellers' respective rights and, where
applicable, titles to the Assets, other than the Excluded Assets,
including an assignment of all Assumed Contracts, dated the Closing
Date, assigning to the Purchaser all of the Sellers' right, title and
interest therein and thereto, together with any required consents to
such assignments (taking into account the applicable provisions of the
Bankruptcy Code) in the appropriate form for filing in each relevant
jurisdiction where the Assets are located, including necessary
legalizations, notarizations and signatures, and an assignment of
lease, dated the Closing Date, with respect to each Assumed Lease, in
form reasonably acceptable to the Purchaser, together with any
necessary transfer declarations or other filings;
(e) a certified copy of the Sale Order;
(f) an opinion of Simpson Thacher & Bartlett to the effect
that no appeal of the Sale Order has been taken as of the Closing;
(g) an executed counterpart of the Allocation Statement; and
(h) such other documents, instruments or certificates required
to be delivered pursuant to Sections 7.02 and 8.02.
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SECTION 2.07. CLOSING DELIVERIES BY THE PURCHASER. At the
Closing, the Purchaser shall deliver to the Seller Representative:
(a) the Purchase Price by wire transfer in immediately
available funds, to an account or accounts designated by the Seller
Representative at least two Business Days prior to the Closing Date by
written notice to the Purchaser;
(b) executed counterparts of the Ancillary Agreements;
(c) an executed counterpart of the Allocation Statement; and
(d) the certificates and other documents required to be
delivered pursuant to Section 8.01.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers, jointly and severally, represent and warrant to
the Purchaser as follows:
SECTION 3.01. INCORPORATION AND CORPORATE AUTHORITY OF THE
SELLERS. Each Seller is a corporation or limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware and, subject to the entry of the Bidding Procedures Order with respect
to Article IX and subject to the entry of the Sale Order with respect to the
remaining terms of this Agreement, has all necessary corporate power and
authority to pursue its Chapter 11 Case, to enter into this Agreement and the
Ancillary Agreements, to carry out its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and the Ancillary Agreements by each Seller, the
performance by such Seller of its obligations hereunder and thereunder and the
consummation by such Seller of the transactions contemplated hereby and thereby
have been duly authorized by all requisite corporate action on the part of such
Seller. This Agreement has been, and upon execution the Ancillary Agreements
will be, duly executed and delivered by each Seller, and (assuming due
authorization, execution and delivery by the Purchaser and subject to the entry
and effectiveness of the Bidding Procedures Order and the Sale Order) this
Agreement constitutes, and upon execution the Ancillary Agreements will
constitute, legal, valid and binding obligations of each Seller, enforceable
against such Seller in accordance with its terms, subject to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance and similar laws affecting creditors' rights generally and subject,
as to enforceability, to the effect of general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
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SECTION 3.02. NO CONFLICT. Assuming all consents, approvals,
authorizations and other actions described in Section 3.03 have been obtained
and all filings and notifications listed in Section 3.03 of the Disclosure
Schedule have been made, and except as may result from any facts or
circumstances relating solely to the Purchaser or as described in Section 3.02
of the Disclosure Schedule, the execution, delivery and performance of this
Agreement and the Ancillary Agreements by the Sellers do not and will not (a)
violate or conflict with the Certificate of Incorporation, other constituent
documents or By-laws of any Seller, (b) conflict with or violate any Law or
Governmental Order applicable to any Seller or (c) result in the creation of a
Lien on any of the Assets (other than an Excluded Asset), except, in the case of
(c) above, where such Lien would not have a Material Adverse Effect.
SECTION 3.03. CONSENTS AND APPROVALS. The execution and
delivery of this Agreement and each Ancillary Agreement by the Sellers do not,
and the performance of this Agreement and each Ancillary Agreement by the
Sellers will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except (a)
the entry by the Bankruptcy Court of the Bidding Procedures Order and the Sale
Order, (b) as described in Section 3.03 of the Disclosure Schedule, (c) the
notification requirements of the HSR Act and applicable filings under other
foreign antitrust and competition laws, (d) the FCC Approvals, (e) compliance
with and filings under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), (f) as may be necessary as a result of any facts or
circumstances relating solely to the Purchaser or its Affiliates and (g) such
consents, approvals or authorizations the failure of which to be obtained would
not have a Material Adverse Effect.
SECTION 3.04. SEC DOCUMENTS; FINANCIAL INFORMATION. (a) Each
of the Seller Representative and CellNet Funding LLC ("CELLNET FUNDING") (and
any entity to which the Seller Representative or CellNet Funding is a successor
issuer for purposes of Section 12g-3 under the Exchange Act, each such entity
being a "PREDECESSOR ENTITY") has filed all required reports, schedules, forms,
statements and other documents with the Securities and Exchange Commission (the
"SEC") between December 31, 1996 and the date of this Agreement (the "SEC
DOCUMENTS"). The Purchaser has had access to (i) the annual report on Form 10-K
of the Seller Representative for the fiscal years ended December 31, 1996, 1997
and 1998, and the annual report on Form 10-K of CellNet Funding for the fiscal
year ended December 31, 1998, (ii) quarterly reports on Form 10-Q for the fiscal
quarters ended March 31, June 30 and September 30, 1999 for both the Seller
Representative and CellNet Funding, and (iii) all of the other SEC Documents
filed since December 31, 1998, by the Seller Representative or CellNet Funding.
As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT"), or the Exchange Act, as the case may be, applicable to such
SEC Documents, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the Sellers,
other than the Seller
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Representative and CellNet Funding, are subject to the reporting requirements
of the Exchange Act pursuant to Section 12(b), 12(g) or 15(d) thereof.
(b) The Seller Representative has delivered to the Purchaser
true and complete copies of the unaudited balance sheet of the Seller
Representative as of September 30, 1999, and the related unaudited statements of
income, retained earnings, stockholders' equity and changes in financial
position of the Seller Representative (collectively referred to herein as the
"INTERIM FINANCIAL STATEMENTS"). All of the consolidated financial statements
(including, in each case, any notes thereto) contained in the SEC Documents
(collectively referred to herein as the "FINANCIAL STATEMENTS") and the Interim
Financial records of the Sellers, (i) were prepared in accordance with the books
of account and other financial records of the Sellers, (ii) present fairly the
financial condition and results of operations of the Seller Representative as of
the dates thereof or for the periods covered thereby and (iii) include all
adjustments (consisting only of normal recurring accruals) that are necessary
for a fair presentation of the financial condition and results of the operations
of the Seller Representative as of the dates thereof or for the periods covered
thereby. The Financial Statements have been prepared in accordance with (A) GAAP
applied on a basis consistent with the past practices of the Sellers and (B) all
applicable accounting requirements and the published rules and regulations of
the SEC.
(c) The books of account and other financial records of the
Sellers (i) reflect all items of income and expense and all assets and
Liabilities required to be reflected therein in accordance with GAAP applied on
a basis consistent with the past practices of the Sellers, respectively, (ii)
are complete and correct, and do not contain or reflect any material
inaccuracies or discrepancies and (iii) have been maintained in accordance with
good business and accounting practices.
SECTION 3.05. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since
January 27, 2000, except as disclosed in the Financial Statements, the Interim
Financial Statements or in Section 3.05 of the Disclosure Schedule, the Business
has been conducted in all material respects in the ordinary course and in a
manner consistent with past practice, including, without limitation, refraining
from taking any action described in Section 5.01 hereto, and there has not been
any (a) Material Adverse Effect, (b) change by the Business in accounting
methods, principles or practice, except in accordance with GAAP applied on a
basis consistent with the past practices of the Sellers, or (c) entry by any
Seller into any commitment or transaction, or series of commitments or
transactions, in respect of Indebtedness of such Seller, except in the ordinary
course of business consistent with past practice.
SECTION 3.06. ABSENCE OF LITIGATION. Except for the Chapter 11
Case and as set forth in Section 3.06 of the Disclosure Schedule, there are no
Actions pending or, to the knowledge of the Sellers, threatened against any
Seller, or to which any of the Assets are subject that, individually or in the
aggregate, would reasonably be expected (i) to prevent the Sellers' ability to
consummate the sale of the Assets to the Purchaser as contemplated hereby or
(ii) to have a Material Adverse Effect.
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SECTION 3.07. COMPLIANCE WITH LAWS. To the Sellers' knowledge,
no Seller is in violation of any Laws or Governmental Orders applicable to the
Business or any Asset, or by which it is bound, except (i) as set forth in
Section 3.07 of the Disclosure Schedule or (ii) violations the existence of
which would not, individually or in the aggregate, have a Material Adverse
Effect.
SECTION 3.08. GOVERNMENTAL LICENSES AND PERMITS. The Sellers
hold all licenses and permits necessary to the operation of the Business as
currently operated and is in compliance with the terms of such licenses, except
(a) as set forth in Section 3.08 of the Disclosure Schedule or (b) for
violations, the existence of which would not, individually or in the aggregate,
have a Material Adverse Effect.
SECTION 3.09. THE ASSETS. (a) The Assets constituted all of
the assets necessary for the operation of the Business as conducted on January
27, 2000. Except as disclosed in Section 3.09(a) of the Disclosure Schedule, and
except when any failure would not have a Material Adverse Effect, the Assets,
whether owned or leased, are in normal operating condition and repair.
(b) The Sellers hold rights and, where applicable, good title
to or have valid leasehold interests in all of the Assets free and clear of any
and all Liens, except (i) as set forth in Section 3.09(b) of the Disclosure
Schedule, (ii) other Permitted Liens, (iii) Liens created by or through the
Purchaser or any of its Affiliates, (iv) existing Liens pursuant to the DIP
Agreement and (v) such Liens as would not in the aggregate have a Material
Adverse Effect.
SECTION 3.10. REAL PROPERTY. The Sellers have a valid
leasehold interest in the Leasehold Interests, in each case free and clear of
all Liens, except (i) as disclosed in Section 3.10 of the Disclosure Schedule,
(ii) other Permitted Liens, (iii) Liens created by or through the Purchaser or
any of its Affiliates, (iv) existing Liens pursuant to the DIP Agreement and (v)
such Liens as would not in the aggregate have a Material Adverse Effect.
SECTION 3.11. INTELLECTUAL PROPERTY. (a) Section 3.11(a) of
the Disclosure Schedule sets forth a true and complete list of all (i) patents
and patent applications, registered trademarks and trademark applications,
registered copyrights and copyright applications and domain names included in
the Seller Owned Intellectual Property, (ii) in summary form, Seller Software,
(iii) material Seller Licenses, other than licenses of commercial off-the-shelf,
shrink-wrap or click-wrap software, and (iv) in summary form, other material
Intellectual Property included in the Seller Owned Intellectual Property. Except
as set forth in Section 3.11 of the Disclosure Schedule, no Seller has granted
any license or other right to any third party with respect to the material
Seller Owned Intellectual Property or the material Seller Licensed Intellectual
Property, other than licenses of Seller Software to its customers and authorized
resellers for use in the ordinary course of their businesses.
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(b) Except as disclosed in Schedule 3.11(b), the Sellers are
the exclusive owners of the entire and unencumbered right, title, and interest
in and to each material item of the Seller Owned Intellectual Property, subject
only to the terms of the Seller Licenses. The Sellers are entitled to use the
Seller Owned Intellectual Property and the Seller Licensed Intellectual Property
in the operation of the Business as currently conducted in a manner consistent
with past practices. The material Seller Owned Intellectual Property and, to the
knowledge of the Sellers, the material Seller Licensed Intellectual Property
have not been adjudged invalid or unenforceable in whole or part. The
consummation of the transactions contemplated by this Agreement will not result
in the termination or impairment of any material Seller Owned Intellectual
Property or material Seller Licensed Intellectual Property.
(c) Except as disclosed in Schedule 3.11(c) or as would not
result in a Material Adverse Effect, (i) the operation of the Business as
currently conducted and the use of the Seller Owned Intellectual Property and
the Seller Licensed Intellectual Property in connection therewith does not
conflict with, infringe, misappropriate or otherwise violate the Intellectual
Property of any third party; (ii) no Actions have been asserted, are pending or,
to the knowledge of the Sellers, are threatened against any Seller (a) alleging
any of the foregoing, (b) based upon or challenging or seeking to deny or
restrict the use by the Sellers of any of the Seller Owned Intellectual Property
or the Seller Licensed Intellectual Property, or (c) alleging that the Seller
Licenses are in conflict with the terms of any license or other agreement; and
(iii) to the knowledge of the Sellers, no third party is engaging in any
activity that infringes, misappropriates or otherwise violates the Seller Owned
Intellectual Property or the Seller Licensed Intellectual Property.
(d) Except as disclosed in Schedule 3.11(d), the Sellers have
delivered or made available to the Purchaser correct and complete copies of all
the material agreements included in the Seller Licenses, other than licenses of
commercial off-the-shelf, shrink-wrap or click-wrap software. With respect to
each such agreement, and except as would not, individually or in the aggregate,
have a Material Adverse Effect:
(i) such agreement is valid and binding and in full force and
effect and represents the entire agreement between the respective
parties with respect to the subject matter of such agreement;
(ii) such agreement will not cease to be valid and binding and
in full force and effect on terms identical to those currently in
effect as a result of the consummation of the transactions contemplated
by this Agreement, nor will the consummation of the transactions
contemplated by this Agreement constitute a breach or default under
such agreement or otherwise give the other party to such agreement a
right to terminate, materially modify or accelerate such agreement;
(iii) no Seller has (A) received any notice of termination or
cancellation under such agreement, (B) received any notice of breach or
default under such agreement,
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which breach has not been cured, or (C) granted to any other third
party any rights, adverse or otherwise, under such agreement that would
constitute a breach of such agreement; and
(iv) no Seller and, to the knowledge of Sellers, no other
party to such agreement is in breach or default thereof in any material
respect, and no event has occurred that, with notice or lapse of time,
would constitute such a breach or default or permit termination,
modification or acceleration under such agreement.
(e) Except as would not have a Material Adverse Effect, (i) to
the knowledge of the Sellers, the material Seller Software is free of all
viruses, worms, trojan horses and other material known contaminants, and does
not contain any bugs, errors, or problems of a material nature that would
materially disrupt its operation or have an adverse impact on the operation of
other software programs or operating systems; (ii) the Sellers have obtained all
approvals necessary for exporting the Seller Software outside the United States
and importing the Seller Software into any country in which Seller Software is
now sold or licensed for use, and all such export and import approvals in the
United States and throughout the world are valid, current, outstanding and in
full force and effect; and (iii) the Sellers have the right to use all software
development tools, library functions, compilers and other Third Party Software
that are material to the Business, or that are required to operate or modify the
Seller Software.
(f) Except as would not have a Material Adverse Effect, (i)
the Sellers have taken steps in accordance with normal industry practice to
maintain the confidentiality of their trade secrets and other confidential
Intellectual Property; and (ii) to the knowledge of the Sellers, (a) there has
been no misappropriation of any trade secrets or other confidential Intellectual
Property of any Seller by any person, (b) no employee, independent contractor or
agent of any Seller has misappropriated any trade secrets of any other person in
the course of such performance as an employee, independent contractor or agent,
and (c) no employee, independent contractor or agent of any Seller is in default
or breach of any term of any employment agreement, non-disclosure agreement,
assignment of invention agreement or similar agreement or contract relating in
any way to the protection, ownership, development, use or transfer of
Intellectual Property.
(g) Except as would not, individually or in the aggregate,
have a Material Adverse Effect, all Seller Systems are Year 2000 Compliant.
For purposes hereof, "SELLER SYSTEMS" shall mean all computer, hardware,
Software, systems, and equipment (including embedded microcontrollers in
non-computer equipment) that are embedded within or required to operate the
equipment and current products of the Sellers, or are material or necessary
to carry on the Business as currently conducted. For purposes hereof, "YEAR
2000 COMPLIANT" means that the Seller Systems provide uninterrupted
millennium functionality in that the Seller Systems will record, store,
process and present calendar dates falling in year 2000 (including, without
limitation, February 29, 2000), in the same manner and with the same accuracy
and functionality as the Seller Systems record, store, process, and present
calendar dates falling on or before
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December 31, 1999, so long as the Seller Systems receive correct and properly
formatted date inputs from all Third Party Software and hardware that
exchange data with or provide data to the Seller Systems.
SECTION 3.12. EMPLOYEE BENEFIT PLANS; LABOR MATTERS. (a)
Section 3.12(a) of the Disclosure Schedule contains a true and complete list of
each material deferred compensation, incentive compensation and equity
compensation plan, each "welfare" plan, fund or program (within the meaning of
Section 3(1) of ERISA), each "pension" plan, fund or program (within the meaning
of Section 3(2) of ERISA), each employment, termination or severance agreement
and each other employee benefit plan, fund, program, agreement, policy or
arrangement, in each case, that is sponsored, maintained or contributed to or
required to be contributed to by any Seller or by any person that is a member of
the same controlled group as any Seller or under common control with any Seller
within the meaning of Section 414(b), (c), (m) or (o) of the Code (each, an
"ERISA AFFILIATE") for the benefit of any employee, consultant, director or
former employee, consultant or director of any Seller or any subsidiary of a
Seller (each, a "PLAN").
(b) With respect to each Plan, the Sellers have made available
to the Purchaser a true and correct copy of (i) the most recent annual report
(Form 5500) filed with the IRS, (ii) a complete copy of such Plan, including any
amendments thereto or any written interpretations thereof, (iii) each trust
agreement relating to each Plan for which a trust agreement is required, (iv)
the most recent summary plan description for each Plan for which a summary plan
description is required, (v) the most recent actuarial report or valuation
relating to a Plan subject to Title IV of ERISA, (vi) the most recent
determination letter, if any, issued by the IRS with respect to any Plan
intended to be qualified under Section 401(a) of the Code and (vii) the most
recent prospectus prepared in connection with each Plan requiring a prospectus.
(c) Except as set forth on Section 3.12(c) of the Disclosure
Schedule: (i) no Seller has any plan or commitment to establish any new Plan or
to materially modify any Plan (except to the extent required by law or to
conform any such Plan to the requirements of any applicable law, in each case as
previously disclosed to the Purchaser in writing); (ii) no Plan is a
"multiemployer plan" (as such term is defined in Section 3(37) of ERISA); and
(iii) neither any Seller nor any of their ERISA Affiliates has, in the last five
years, maintained, established, sponsored, participated in or contributed to any
employee benefit plan which is subject to Part 3 of Subtitle B of Title I of
ERISA, Title IV of ERISA or Section 412 of the Code.
(d) Each of the Plans has been operated and administered in
all material respects in accordance with applicable laws and administrative or
governmental rules and regulations, including, but not limited to, ERISA and the
Code. Each of the Plans intended to be "qualified" within the meaning of Section
401(a) of the Code has received a favorable determination letter as to such
qualification from the IRS, and, to the knowledge of the Sellers, no event has
occurred, either by reason of any action or failure to act, which would be
reasonably expected to cause the loss of any such qualification.
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(e) The Sellers have made available to the Purchaser prior to
the date of this Agreement copies of all Plans, agreements and other
arrangements of the Sellers with or relating to its employees which contain
change of control provisions.
(f) No Plan provides benefits, including, without limitation,
death or medical benefits (whether or not insured), with respect to current or
former employees of the Sellers or any ERISA Affiliate beyond their retirement
or other termination of service, other than (i) coverage mandated by applicable
law, (ii) death benefits or retirement benefits under any "employee pension
benefit plan" (as such term is defined in Section 3(2) of ERISA), (iii) deferred
compensation benefits accrued as liabilities on the books of the Sellers or any
ERISA Affiliate or (iv) benefits the full cost of which are borne by the current
or former employees (or their beneficiaries). No Seller has ever represented to
or contracted with (whether in oral or written form) any employee (either
individually or as a group) that such employee would be provided with life
insurance, medical or other employee welfare benefits upon retirement or
termination of employment, except to the extent required by statute.
(g) Except as set forth on Section 3.12(g) of the Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby, either alone or together
with another event, will (i) result in any material payment (including, without
limitation, severance, unemployment compensation, golden parachute, forgiveness
of indebtedness or otherwise) becoming due under any Plan or any other
arrangement described in Section 3.12(e) or (ii) result in the acceleration of
the time of payment, vesting or funding of any material benefits.
(h) Except as set forth on Section 3.12(h) of the Disclosure
Schedule, there are no material pending, or to the knowledge of the Sellers,
threatened or anticipated, claims by or on behalf of any Plan, by any employee
or beneficiary covered under any Plan, or otherwise involving any Plan (other
than routine claims for benefits). Each Plan may be amended, terminated or
otherwise discontinued after the Closing in accordance with its terms, without
material liability to the Sellers or any subsidiary of a Seller (other than
ordinary administration expenses typically incurred in a termination event).
(i) Except as set forth on Section 3.12(i) of the
Disclosure Schedule: (i) neither any Seller nor any subsidiary of a Seller is
a party to any collective bargaining or other labor union contract applicable
to persons employed by such Seller or such subsidiary and no collective
bargaining agreement is being negotiated by any Seller or any subsidiary of a
Seller; (ii) there is no labor dispute, strike or work stoppage against any
Seller or any subsidiary of a Seller pending or threatened in writing which
would reasonably be expected to interfere materially with the respective
business activities of such Seller or such subsidiary; and (iii) to the
knowledge of the Sellers, no Seller, no subsidiary of a Seller and no
representative or employee of a Seller, has committed any unfair labor
practices in connection with the operation of the respective businesses of
the Sellers and their subsidiaries, and there is no charge or complaint
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relating to any Seller or any ERISA Affiliate by the National Labor Relations
Board, the Equal Employment Opportunity Commission or any comparable state
agency pending or threatened in writing that would reasonably be expected to
cause a Material Adverse Effect.
(j) Except as would not reasonably be expected, in the
aggregate, to cause a Material Adverse Effect, the Sellers (i) are in compliance
in all material respects with all applicable foreign, federal, state and local
laws, rules and regulations respecting employment, employment practices, terms
and conditions of employment and wages and hours, in each case, with respect to
employees, (ii) have withheld all amounts required by law or by agreement to be
withheld from the wages, salaries and other payments to employees, (iii) are not
liable for any arrears of wages or any taxes or any penalty for failure to
comply with any of the foregoing and (iv) are not liable for any payment to any
trust or other fund or to any governmental or administrative authority, with
respect to unemployment compensation benefits, social security or other benefits
or obligations for employees (other than routine payments to be made in the
normal course of business and consistent with past practice).
(k) No Plan is subject to the laws of any jurisdiction outside
the United States.
(l) As a general policy, each employee, consultant and
independent contractor of the Sellers is required to execute and deliver to the
Sellers a confidential information and invention assignment agreement, a form of
which has been previously delivered to the Purchaser.
SECTION 3.13. TAXES. Except as otherwise disclosed in Section
3.13 of the Disclosure Schedule: (a) each of the Sellers has filed all material
Tax Returns with respect to the Business that it was required to file, and has
paid all material Taxes shown thereon as owing and all other material Taxes
otherwise due. All material Tax Returns required to be filed by Sellers with
respect to the Business or Assets are complete and correct. Except as would not
reasonably be expected, in the aggregate, to have a Material Adverse Effect, all
monies required to be withheld by each of the Sellers (including from employees
of the Business for income Taxes and social security and other payroll Taxes)
with respect to the Business or Assets have been collected or withheld, and
either paid to the respective taxing authorities, set aside in accounts for such
purpose, or accrued, reserved against and entered upon the books of the
Business. No Seller has waived or been requested to waive any statute of
limitations in respect of material Taxes associated with the Business or Assets
which waiver is currently in effect. There are no material liens with respect to
Taxes upon the purchased Assets, except for statutory liens for Taxes not yet
due. Except as would not reasonably be expected, in the aggregate, to have a
Material Adverse Effect, each of the Sellers has collected, and has timely
remitted, or will remit on a timely basis, all sales and use Taxes required to
be collected and remitted to the appropriate Tax authority, or has been
furnished properly completed exemption certificates and has maintained all such
records and supporting documents in the manner required by all applicable sales
and use Tax statutes and regulations. None of the purchased Assets is (i) an
asset or property that is or will be required to be treated as described in
Section 168(f)(8) of the Internal Revenue Code of 1986, as amended and in effect
immediately before the enactment of the Tax
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Reform Act of 1986, or (ii) tax-exempt use property within the meaning of
Section 168(h)(1) of the Code, except where such status would not reasonably
be expected to have a Material Adverse Effect. No Seller or any of its
Affiliates has made with respect to such Seller or any purchased Assets, any
consents under Section 341 of the Code.
(b) There have been filed by or with respect to each
corporate Affiliate of the Sellers which is listed in Section 1.01(a)(i) of
the Disclosure Schedule (any such corporate Affiliate hereinafter, a
"PURCHASED SUBSIDIARY") all material Tax Returns required to be filed on or
prior to the date of this Agreement, and all material Taxes shown as due on
such Tax Returns and all other material Taxes otherwise due have been or will
be paid in a timely fashion. All such material Tax Returns filed by or on
behalf of such Purchased Subsidiary are complete and correct. Except as would
not reasonably be expected, in the aggregate, to have a Material Adverse
Effect, all monies required to be withheld by each of the Purchased
Subsidiaries (including from employees thereof for income Taxes and social
security and other payroll Taxes) have been collected or withheld, and either
paid to the respective Tax authorities, set aside in accounts for such
purpose, or accrued, reserved against and entered upon the books of account
of the Purchased Subsidiaries. No Purchased Subsidiary has waived or been
requested to waive any statute of limitations in respect of material Taxes
which waiver is currently in effect. Except as would not reasonably be
expected, in the aggregate, to have a Material Adverse Effect, each of the
Purchased Subsidiaries has collected, and timely remitted, or will remit on a
timely basis, all sales and use Taxes required to be collected and remitted
to the appropriate Tax authority, or has been furnished properly completed
exemption certificates and has maintained all such records and supporting
documents in the manner required by all applicable sales and use Tax statutes
and regulations. There are no material liens with respect to Taxes upon any
property or assets of any Purchased Subsidiary, except for statutory liens
for taxes not yet due. No audit or other proceeding by any court,
governmental or regulatory authority, or similar person is pending with
respect to any material Taxes due with respect to any Purchased Subsidiary.
No written assessment of material Tax is proposed against any Purchased
Subsidiary. Other than the CellNet Data Systems Tax Allocation Agreement
dated January 1, 1995, and the Amended and Restated Limited Liability Company
Agreement of BCN Data Systems, L. L. C. effective as of January 1, 1997, no
Purchased Subsidiary is a party to or bound by (nor will it become a party to
or be bound by prior to the Closing) any Tax indemnity, Tax sharing, or Tax
allocation agreement. No Purchased Subsidiary has any liability or will have
any liability after the date hereof under any Tax indemnity, Tax sharing or
Tax allocation agreement to which it is a party or is otherwise bound prior
to the Closing. No Purchased Subsidiary is or has been a member of an
affiliated group within the meaning of Section 1504(a)(1) of the Code (or any
unitary, combined or other similar group under foreign, state or local laws)
other than the affiliated group of which the Seller Representative is the
common parent (and in the case of any unitary, combined or similar group
under foreign, state or local laws, other than the group of which it is
presently a member). As a result of a change in accounting method for a Tax
period beginning on or before the Closing Date, no Tax Return that has been
filed by a Purchased Subsidiary reflects any change in method of accounting
under Section 481 of the Code (or any corresponding provision of state or
local Tax law) which would result in the inclusion of any
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material adjustment in taxable income for any Tax period beginning on or
after the Closing Date. To the best of the Seller Representative's knowledge,
no written claim has been made by a Tax authority in a jurisdiction where a
Purchased Subsidiary has never paid Taxes or filed Tax Returns asserting that
such Purchased Subsidiary is or may be subject to material Taxes assessed by
such jurisdiction. No Purchased Subsidiary will have income reportable for a
Tax period ending after the Closing Date but attributable to an installment
sale for a material amount or cancellation of a material debt occurring (i)
in a period ending on or prior to the Closing Date or (ii) in the portion of
a Straddle Period (as defined in Section 7.01) which portion ends on and
includes the Closing Date.
SECTION 3.14. ENVIRONMENTAL MATTERS. Except as disclosed in
Section 3.14 of the Disclosure Schedule, and except as would not in the
aggregate have a Material Adverse Effect, (a) the Sellers currently hold or
have applied for all Environmental Permits required to operate the Business
as currently conducted, (b) each Seller is in compliance with all applicable
Environmental Laws, (c) there are and, to the best of the Sellers' knowledge,
there have been, no underground or aboveground storage tanks or any surface
impoundments, septic tanks, pits, sumps or lagoons in which Hazardous
Materials are being or have been treated, stored or disposed on any of the
Leasehold Interests, (d) Hazardous Materials have not been released at, on,
to or from any of the Leasehold Interests, (e) no Seller is conducting, and
no Seller has undertaken or completed, any remedial or other response action
relating to any release or threatened release of Hazardous Materials at the
Leasehold Interests or at any other site, location or operation as related to
the Business or the Assets, either voluntarily or pursuant to the order of
any governmental authority or the requirements of any Environmental Law or
Environmental Permit, (f) to the best of the Seller's knowledge, there is no
asbestos or asbestos-containing material on or at any of the Leasehold
Interests, (g) to the Sellers' knowledge, none of the Leasehold Interest is
listed or proposed for listing, or adjoins any other property that is listed
or proposed for listing, on the National Priorities List or the Comprehensive
Environmental Response, Compensation and Liability Information System under
the federal Comprehensive Environmental Response, Compensation, and Liability
Act or any analogous federal, state or local list, (h) there are no claims
pursuant to Environmental Law pending or, to the Sellers' knowledge,
threatened against the Business, the Leasehold Interests or any Seller as
related to the Business and, to the Sellers' knowledge, there are no
circumstances that can reasonably be expected to form the basis of any such
claim pursuant to Environmental Law, including, without limitation, with
respect to any off-site disposal location presently or formerly used by the
Business or with respect to any previously owned or operated facilities of
the Business, (i) there are no wetlands or any areas subject to any legal
requirement or restriction in any way related to wetlands (including, without
limitation, requirements or restrictions related to buffer or transition
areas or open waters) at or affecting the Leasehold Interests, (j) the
Sellers have provided the Purchaser with copies of any environmental
assessment or audit reports or other similar studies or analyses relating to
the Business or the Leasehold Interests, and all insurance policies issued at
any time that may provide coverage to the Business or the Leasehold Interests
for environmental matters, and (k) neither the execution of this Agreement
nor the consummation of the transactions contemplated herein will require any
remedial or other response action related to
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Hazardous Materials, or any notice to or consent of governmental authorities
or third parties, pursuant to any applicable Environmental Law or
Environmental Permit.
SECTION 3.15. MATERIAL CONTRACTS. (a) Section 3.15(a) of the
Disclosure Schedule lists and briefly describes the parties to and the date and
subject matter of each of the following material contracts and agreements of the
Sellers (such contracts being "MATERIAL CONTRACTS"):
(i) each contract and agreement for the purchase of materials
or personal property (except for such purchase orders for the purchase
of materials or personal property as are included on a list of such
purchase orders, which the Sellers shall provide to the Purchaser prior
to the Closing) with any supplier or for the furnishing of services to
the Business under the terms of which the Business: (A) is likely to
pay or otherwise give consideration of more than $250,000 in the
aggregate during the calendar year ending December 31, 2000, (B) is
likely to pay or otherwise give consideration of more than $250,000 in
the aggregate over the remaining term of such contract, (C) is not
entitled to cancel without penalty or further payment and without more
than 30 days' notice and (D) in the event of a cancellation of such
contract, is likely to be impacted or delayed in its ability to fulfill
its other contractual obligations, except for contracts the loss of
which would not have a Material Adverse Effect;
(ii) each contract and agreement for the sale of personal
property or for the furnishing of services by the Business which: (A)
involves the Business providing data services, directly or indirectly
through a sub-contract, to any water, gas or utility distribution
company, (B) is likely to involve consideration of more than $250,000
in the aggregate during the calendar year ending December 31, 2000, (C)
is likely to involve consideration of more than $250,000 in the
aggregate over the remaining term of the contract and (D) cannot be
canceled by the applicable Business without penalty or further payment
and without more than 30 days' notice, except for contracts the loss of
which would not have a Material Adverse Effect;
(iii) all broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing consulting and advertising contracts and agreements requiring
payments in excess of $50,000, to which any Seller (insofar as it
relates to the Business) is a party, except for contracts the loss of
which would not have a Material Adverse Effect;
(iv) all management contracts and contracts with independent
contractors or consultants (or similar arrangements) to which any
Seller (insofar as it relates to the Business) is a party requiring
payments in excess of $50,000, and which are not cancelable without
penalty or further payment and with notice of 30 days or less, except
for contracts the loss of which would not have a Material Adverse
Effect;
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(v) all post-petition contracts and agreements relating to
Indebtedness of the Business that is in excess of $50,000;
(vi) all material Seller Licenses, other than shrink-wrap,
click-wrap or off-the-shelf Software;
(vii) all contracts and agreements with any Governmental
Authority to which any Seller (insofar as it relates to the Business)
is a party;
(viii) all contracts and agreements between any Seller
(insofar as it relates to the Business) and any Affiliate;
(ix) all contracts and agreements with any company known by
the Sellers to be a direct competitor of the Purchaser; and
(x) all other contracts and agreements whether or not made in
the ordinary course of business, which are material to the conduct of
the Business taken as a whole, or the absence of which would have a
Material Adverse Effect.
(b) Except as disclosed in Section 3.15(b) of the Disclosure
Schedule: (i) each Material Contract that is an Assumed Contract is valid and
binding on the parties thereto, other than the Sellers, (ii) upon consummation
of the transactions contemplated by this Agreement, subject to assumption and
assignment under Section 365 of the Bankruptcy Code and the entry and
effectiveness of the Sale Order, and except to the extent that any consents set
forth in Section 3.03 of the Disclosure Schedule are not obtained, each Material
Contract that is an Assumed Contract shall continue in full force and effect
without penalty or other adverse consequence and (iii) no Seller is in material
breach of, or default under, any Material Contract that is an Assumed Contract,
except for any default or defaults of the type described in Section 365(b)(2) of
the Bankruptcy Code.
(c) Except as set forth in Section 3.15(c) of the Disclosure
Schedule, if the Sale Order is entered and effective, no consent of any third
party will be required under any Material Contract that is an Assumed Contract
as a result of or in connection with, and the enforceability of each Material
Contract that is an Assumed Contract will not be adversely affected in any
manner by, the execution, delivery and performance of the Agreement and the
consummation of the transactions contemplated thereby.
(d) Except as disclosed in Section 3.15(d) of the Disclosure
Schedule, there is no contract, agreement or other arrangement granting any
Person any preferential right to purchase, other than in the ordinary course of
business consistent with past practice, any of the Assets.
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(e) Except as disclosed in Section 3.15(e) of the Disclosure
Schedule, to the best of the Sellers' knowledge, no other party to any Material
Contract is in material breach thereof or material default thereunder. No Seller
has received any notice, nor does any Seller otherwise have knowledge, that any
party to any Material Contract intends to cancel, terminate or refuse to renew
such Material Contract or to exercise or decline to exercise any option or right
thereunder.
SECTION 3.16. BROKERS. Except for The Blackstone Group, L.P.,
no broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement and the Ancillary Agreements based upon arrangements made by or on
behalf of any Seller. Notwithstanding the above, in no event shall the Purchaser
pay any fee, commission or expense of any broker, finder or investment banker
representing any Seller.
SECTION 3.17. INSURANCE. All Assets and risks associated with
the Business are covered by valid and currently effective insurance policies or
binders of insurance in such types and amounts as are consistent with customary
practices and standards for companies engaged in the operation of similar assets
or in a similar business to those of the Sellers. Section 3.17 of the Disclosure
Schedule contains a complete list of all liability, property, accident,
casualty, fire, flood, workers' compensation, key man life or health or other
insurance policies and arrangements affecting or relating to the ownership, use
or operations of the Assets or the Business.
SECTION 3.18. AFFILIATED TRANSACTIONS. No relationship, direct
or indirect, exists between or among any of the Sellers or any Affiliate of a
Seller, on the one hand, and any director, officer, stockholder, customer or
supplier of any of them, on the other hand, which is required by the Exchange
Act or regulations thereunder to be described in annual reports on Form 10-K and
which is not so described or is not described as required in an SEC Document or
in Section 3.18 of the Disclosure Schedule.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Sellers as
follows:
SECTION 4.01. INCORPORATION AND CORPORATE AUTHORITY OF THE
PURCHASER. The Purchaser is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware and has all necessary corporate
power and authority to enter into this Agreement and the Ancillary Agreements,
to carry out its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Ancillary Agreements by the Purchaser, the performance by
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the Purchaser of its obligations hereunder and thereunder and the
consummation by the Purchaser of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate action on the
part of the Purchaser. This Agreement has been, and upon their execution the
Ancillary Agreements will be, duly executed and delivered by the Purchaser,
and (assuming due authorization, execution and delivery by the Sellers and
subject to the entry and effectiveness of the Bidding Procedures Order)
constitutes, and upon their execution the Ancillary Agreements will
constitute, legal, valid and binding obligations of the Purchaser enforceable
against the Purchaser in accordance with their terms.
SECTION 4.02. NO CONFLICT. Except as may result from any facts
or circumstances relating solely to the Sellers, the execution, delivery and
performance of this Agreement and the Ancillary Agreements by the Purchaser do
not and will not (a) violate or conflict with the Certificate of Incorporation,
other constituent documents or the By-laws (or other similar applicable
documents) of the Purchaser, (b) conflict with or violate any Law or
Governmental Order applicable to the Purchaser or (c) result in any breach of,
or constitute a default (or event which with the giving of notice or lapse of
time, or both, would become a default) under, or give to any Person any rights
of termination, amendment, acceleration or cancellation of, or result in the
creation of any Lien on any of the material assets or properties of the
Purchaser pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument relating to such assets or
properties to which the Purchaser or any of its Subsidiaries is a party or by
which any of such assets or properties is bound or affected, except as would
not, individually or in the aggregate, materially impair the ability of the
Purchaser to consummate the transactions contemplated by this Agreement or by
the Ancillary Agreements.
SECTION 4.03. CONSENTS AND APPROVALS. The execution and
delivery of this Agreement and each Ancillary Agreement by the Purchaser do not,
and the performance of this Agreement and each Ancillary Agreement by the
Purchaser will not, require any consent, approval, authorization or other action
by, or filing with or notification to, any Governmental Authority, except (a)
the entry by the Bankruptcy Court of the Bidding Procedures Order and the Sale
Order, (b) the notification requirements of the HSR Act and other applicable
filings under foreign antitrust and competition laws, (c) the FCC Approvals, (d)
where failure to obtain such consent, approval, authorization or action, or to
make such filing or notification, would not prevent the Purchaser from
performing any of its material obligations under this Agreement and the
Ancillary Agreements and (e) as may be necessary as a result of any facts or
circumstances relating solely to the Sellers or its Affiliates.
SECTION 4.04. ABSENCE OF LITIGATION. No Action is pending or,
to the knowledge of the Purchaser, threatened, before any Governmental Authority
which seeks to delay or prevent the consummation of the transactions
contemplated hereby.
SECTION 4.05. BROKERS. Except for Peter J. Solomon Company, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in
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connection with the transactions contemplated by this Agreement and the
Ancillary Agreements based upon arrangements made by or on behalf of the
Purchaser. Notwithstanding the above, in no event shall any Seller pay any
fee, commission or expense of any broker, finder or investment banker
representing the Purchaser.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. CONDUCT OF BUSINESS PRIOR TO THE CLOSING. (a)
Unless the Purchaser otherwise agrees in writing or through the oral consent of
Brad Kitterman, Remi St.-Martin or Jurren Schoonbeek and except pursuant to any
order by the Bankruptcy Court or as otherwise set forth herein or in Section
5.01(a) or any other Section of the Disclosure Schedule, between the date hereof
and the Closing Date, the Sellers shall (i) conduct the Business only in the
ordinary course consistent with past practice; (ii) use their best efforts to
keep available to the Business the services of the key employees of the Business
(except for retirements in the ordinary course); (iii) allow the Purchaser to
communicate directly with all vendors, licensors, customers, lenders and other
contractors of the Sellers except for communications relating to current
negotiations with customers, vendors and licensors as to which the Purchaser
shall give the Seller Representative (A) advance notice of the first such
communication and (B) the opportunity to participate in the discussions; (iv)
conduct their businesses in compliance in all material respects with all
Applicable Laws and regulations; (v) assist the Purchaser's coordination team,
to be located at the Sellers' facilities, in familiarizing itself with all
aspects of the Sellers' business, operations and technology; and (vi) meet or
communicate with representatives of the Purchaser frequently, and in any event
not less than once a week, to discuss the progress of the Chapter 11 Case, the
accomplishment of the transactions contemplated by this Agreement and any
difficulties encountered by the Purchaser's coordination team.
(b) By way of amplification and not limitation, except as
disclosed in Section 5.01(a) (or any other Section) of the Disclosure Schedule
and as contemplated by this Agreement or as required by Applicable Law, between
the date hereof and Closing Date, the Sellers shall not permit the Business to
do any of the following without the prior written consent of the Purchaser or
the oral consent of Brad Kitterman, Remi St.-Martin or Jurren Schoonbeek, which
consent shall not be unreasonably withheld:
(i) file with the Bankruptcy Court any material motions,
stipulations or other documents, without prior notice to the Purchaser
as to the form and substance of such documents, or without providing
Purchaser with copies and drafts thereof prior to filing, if the
Purchaser so requests;
(ii) assign, or reject any Assumed Contract that is a Material
Contract;
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(iii) consent, directly or indirectly, to a motion filed by a
third party pursuant to Section 362(d) of the Bankruptcy Code seeking
relief from the automatic stay with respect to the Assets;
(iv) grant any Lien on any Asset, other than Permitted Liens;
(v) establish or increase any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock
option (including the granting of stock options, stock appreciation
rights, performance awards or restricted stock awards), stock purchase
or other employee benefit plan, or otherwise increase the compensation
payable to or to become payable to any officers or key Business
Employees by any Seller, except, in the case of salary, in the ordinary
course of business or in any other case described above as may be
required by Applicable Law or applicable employment agreement or
collective bargaining agreement or as has previously been set forth in
the Motion to Approve Debtors' Severance and Retention Bonus Plan;
(vi) hire or terminate, or enter into any employment or
severance agreement with, any key Business Employee except (A) in the
case of hiring or employment, any Business Employee who receives a
salary not in excess of $100,000; (B) in the case of termination or
severance, any Business Employee who receives a severance payment not
in excess of $50,000; and (C) in any case, if required by Applicable
Law;
(vii) sell, assign, transfer, lease or otherwise dispose of
any of the Assets of the Business (except in the ordinary course of
business and in a manner consistent with past practice);
(viii) (A) acquire (by merger, consolidation, acquisition of
stock or assets or otherwise) any corporation, partnership or other
business organization or division thereof; (B) incur any Indebtedness
for borrowed money or issue any debt securities or assume, grant,
guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any Person (provided that the
Seller Representative shall be permitted to borrow money under the DIP
Agreement or any facility replacing the DIP Agreement), or make any
loans, advances or distributions of cash, in each case outside of the
ordinary course of business or in excess of $50,000; (C) enter into any
Material Contract; (D) enter into or amend any contract, agreement,
commitment or arrangement with respect to any of the matters set forth
in this Section 5.01(b)(viii) (other than with respect to the DIP
Agreement and all related documents or any replacement facility of the
DIP Agreement); (E) amend, modify or waive any provision of any
Material Contract; or (F) make or agree to make any capital
expenditures or capital additions other than in the ordinary course of
business for the installation, development, deployment or maintenance
of any of the Assets or the Business;
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(ix) take any action, other than reasonable actions in the
ordinary course of business and consistent with past practice or as may
be required by a change in law, with respect to accounting policies or
procedures;
(x) pay, discharge, release, settle or satisfy any claim,
liability or obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business and consistent with
past practice, of liabilities reflected or reserved against in the
balance sheet included in the Interim Financial Statements or
subsequently incurred in the ordinary course of business and consistent
with past practice or the Chapter 11 Expenses;
(xi) prepare or file any Tax Return inconsistent with past
practice or, on any such Tax Return, take any position, make any
material election, or adopt any method that is inconsistent with
positions taken, elections made or methods used in preparing or filing
similar Tax Returns in prior periods;
(xii) pay, discharge, release, settle or satisfy any Assumed
Liabilities, other than (A) as set forth in Section 5.01(b)(xii) of the
Disclosure Schedule, (B) with respect to claims subject to compromise,
and (C) the payment, discharge or satisfaction in the ordinary course
of business of liabilities reflected or reserved against in the
Financial Statements of the Seller Representative or incurred in the
ordinary course of business in a manner consistent with past practice
(including, without limitation, payments due and payable under the DIP
Agreement or any replacement facility) or the Chapter 11 Expenses;
(xiii) fail to take any action or make any payment necessary
to prevent the loss or abandonment of any material Seller Owned
Intellectual Property or Seller Licenses, and shall not authorize any
activities or consent to any matters that limit or modify rights in the
same; or
(xiv) authorize, or commit or agree to take, any of the
foregoing actions.
SECTION 5.02. APPROVAL OF THIS AGREEMENT. The Sellers shall
use their best efforts to have the Bankruptcy Court enter the Bidding Procedures
Order within 5 days of the date of this Agreement, or as soon as practicable
thereafter. The Sellers agree that their obligations pursuant to this Section
5.02 shall not be affected by the receipt, on or prior to any hearing before the
Bankruptcy Court on the Bidding Procedures Order, of an Alternative Offer.
SECTION 5.03. BANKRUPTCY ACTIONS. (a) On or about the date
hereof, the Sellers shall file a motion, supporting papers, notices and a form
Sale Order (collectively, the "SALE MOTION"), seeking the Bankruptcy Court's
approval of this Agreement, the Sellers' performance under this Agreement, the
waiver of sales, transfer, stamp and similar taxes on the sale of the Assets
pursuant to this Agreement in accordance with Section 1146(c) of the
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Bankruptcy Code, the assumption and assignment of the Assumed Contracts and
identification of the Cure Amounts. The Sellers shall use their best efforts
to schedule a hearing on the Sale Motion on or before April 20, 2000 and
shall use its best efforts to have the Bankruptcy Court enter the Sale Order.
(b) The Purchaser shall promptly take such actions as are
reasonably requested by a Seller, on behalf of such Seller, to assist in causing
the Bankruptcy Court to enter the Bidding Procedures Order and the Sale Order,
including, without limitation, demonstrating that (i) the Purchaser is a "good
faith" purchaser under Section 363(m) of the Bankruptcy Code, (ii) the Purchaser
has provided adequate assurance of future performance under the Assumed
Contracts and (iii) Sections 363(f) and 1146(c) of the Bankruptcy Code shall
apply to the sale of the Assets. In the event that the Bankruptcy Court's
approval of the Bidding Procedure Order or the Sale Order is appealed, the
Sellers shall use their best efforts to defend such appeal.
(c) The Sellers shall provide the Purchaser with copies of all
motions, applications and supporting papers prepared by the Sellers (including
forms of orders and notices to interested parties) relating to the Purchaser,
this Agreement or the transactions contemplated hereby prior to the filing
thereof in the Chapter 11 Case and shall not file any such document unless it is
in form and substance satisfactory to the Purchaser.
(d) The Sellers shall give appropriate notice, and provide
appropriate opportunity for hearing, to all parties entitled thereto, of all
motions, orders, hearings or other proceedings relating to this Agreement or the
transactions contemplated hereby.
SECTION 5.04. NO SOLICITATION OF TRANSACTIONS. Prior to entry
of the Bidding Procedures Order, no Seller shall, directly or indirectly,
through any officer, director, employee, advisor or otherwise, solicit any
Alternative Offer or participate in any negotiations with respect to any
Alternative Offer; PROVIDED HOWEVER, that if, at any time, such Seller
determines in good faith, based upon the written opinion of outside counsel,
that it is necessary to do so in order to comply with its fiduciary duties, such
Seller may, in response to an Alternative Offer, participate in negotiations
regarding such Alternative Offer after giving the Purchaser three Business Days'
notice of its intention to do so; PROVIDED that such Seller shall not furnish
any non-public information with respect to such Seller or the Business to any
third party that expresses an unsolicited bona fide interest in making a
potential Alternative Offer unless (i) such non-public information is provided
pursuant to a customary confidentiality agreement (with terms regarding the
protection of confidential information at least as restrictive as such terms in
the Confidentiality Agreement) and (ii) such non-public information has been
delivered or previously made available to the Purchaser. No Seller shall release
any Person from, or waive any provisions of, any such confidentiality agreement
with respect to the Purchaser to which such Seller is a party.
SECTION 5.05. ACCESS TO INFORMATION. From the date hereof
until the Closing (upon reasonable notice) during normal business hours, each
Seller shall, and shall cause the
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officers, directors, employees, auditors and agents of the Business to (i)
afford the officers, employees and authorized agents and representatives of
the Purchaser reasonable access, during normal business hours, to the
offices, properties, books and records of each Business and (ii) furnish to
the officers, employees and authorized agents and representatives of the
Purchaser such additional financial and operating data and other information
regarding the Business and the Assets as the Purchaser may from time to time
reasonably request.
SECTION 5.06. REGULATORY AND OTHER AUTHORIZATIONS; CONSENTS.
(a) Each party hereto shall use its best efforts to obtain all authorizations,
consents, orders and approvals of all Governmental Authorities and federal,
state and local regulatory bodies and officials that may be or become necessary
for its execution and delivery of, and the performance of its obligations
pursuant to, this Agreement and the Ancillary Agreements and will cooperate
fully with the other party in promptly seeking to obtain all such
authorizations, consents, orders and approvals.
(b) Each party hereto agrees to make, at its own cost and
expense, an appropriate filing of a Notification and Report Form pursuant to the
HSR Act with respect to the transactions contemplated hereby within five (5)
Business Days after the date hereof and to supply promptly any additional
information and documentary material that may be requested pursuant to the HSR
Act. The parties hereto agree to take any and all commercially reasonable steps
necessary to avoid or eliminate each and every impediment under any antitrust
law that may be asserted by any governmental antitrust authority or any other
party so as to enable the parties to close the transactions contemplated hereby
within 15 Business Days from the date of entry of the Sale Order.
(c) The Sellers agree to use their commercially reasonable
efforts to obtain and the Purchaser shall cooperate with the Sellers in
obtaining any other consents and approvals which may be required in connection
with the transactions contemplated by this Agreement and the Ancillary
Agreements.
SECTION 5.07. USE OF NAME. After the Closing, no Seller shall
use the name "CellNet" or any confusingly similar name or variation thereof, and
shall file such documents and take such other actions as are necessary to
effectuate the transfer of such name to the Purchaser, except to the extent
necessary in connection with (a) legal and other proceedings or other compliance
with applicable Law, (b) the disposition of or realization upon property of any
Seller's estate, (c) administering the liquidation of the Sellers and (d) the
resolution of Retained Liabilities.
SECTION 5.08. INDEMNITY ESCROW. If any funds presently held
in escrow for holders of CellNet Funding LLC's preferred securities are
released to the Sellers as a result of an order of the Bankruptcy Court, then
the Purchaser and the Seller Representative shall promptly enter into an
indemnity escrow agreement (the "INDEMNITY ESCROW AGREEMENT"), substantially
in the form of Exhibit 5.08, with a financial institution reasonably
acceptable to the Purchaser and the Seller Representative (the "INDEMNITY
ESCROW AGENT"). Fifty percent of the proceeds, if any,
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from this claim, net of any related fees and expenses associated with the
prosecution of such claim (including attorney's fees), shall be paid into an
indemnity escrow fund (the "INDEMNITY ESCROW FUND") established by the
Indemnity Escrow Agreement and shall be held pursuant thereto by the
Indemnity Escrow Agent to satisfy the claims, if any, made by the Purchaser
pursuant to Article X hereof prior to expiration of the representations and
warranties under this Agreement as provided in Section 11.01 hereof. The
Sellers have no obligation to pursue any such claims.
SECTION 5.09. FURTHER ACTION. From and after the Closing Date,
each of the parties hereto shall execute and deliver such documents and other
papers and take such further actions as may be reasonably required to carry out
the provisions of this Agreement and the Ancillary Agreements and give effect to
the transactions contemplated hereby and thereby. Without limiting the
foregoing, from and after the Closing, the Sellers shall do all things
necessary, proper or advisable under Applicable Laws as requested by the
Purchaser to put the Purchaser in effective possession, ownership and control of
the Assets, other than the Excluded Assets.
SECTION 5.10 DISCHARGE. None of the obligations of the Sellers
pursuant to this Agreement and any Ancillary Agreement shall be discharged in
the Chapter 11 Case or any other voluntary or involuntary case seeking relief
under the Bankruptcy Code.
SECTION 5.11 SELLER REPRESENTATIVE. Each of the Sellers hereby
appoints the Seller Representative as its agent and attorney-in-fact, with full
power to sign all documents and take all actions on each Seller's behalf that
this Agreement entitles or requires the Seller Representative to sign or to
take.
SECTION 5.12 GUARANTY. Parent absolutely, unconditionally and
irrevocably guarantees to the Sellers the prompt performance and satisfaction of
all obligations of the Purchaser under Section 2.04(a). Parent absolutely,
unconditionally and irrevocably guarantees the performance and satisfaction of
all of the Purchaser's other obligations hereunder; PROVIDED that the Sellers
shall not be entitled to seek satisfaction of such obligations from the Parent
until 15 days shall have elapsed from the date on which the Purchaser's
obligation became due and was not met by the Purchaser.
SECTION 5.13 TRANSITION SERVICES AGREEMENT. The parties shall
enter into a Transition Services Agreement at the Closing that is reasonably
satisfactory to them in form and substance and embodies the following
principles:
(a) without charge to the Sellers, the Seller Representative
shall have reasonable access to the books and records transferred to
the Purchaser and reasonable access to and assistance of the personnel
of the Sellers who become employed by Purchaser to enable Seller
Representative to administer the remainder of the Sellers' bankruptcy
cases and comply with applicable law, including without limitation
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preparation of court, tax, SEC and regulatory filings, insurance
matters, disbursement of monies, transmission of notices and
information, resolution of claims, identification of any Excluded
Assets and other matters;
(b) without charge to the Sellers, the Purchaser shall,
through December 31, 2000, provide a reasonable amount of space (taking
into account the scope of the activities contemplated by the Transition
Services Agreement) to the Seller Representative in the Sellers'
current headquarters and permit a reasonable use of facilities and
equipment such as parking, computers, software, databases, telephones,
photocopying machines, office supplies, etc.;
(c) the parties shall cooperate in any litigation support and
analysis needed to resolve liabilities, whether they are Assumed
Liabilities or Retained Liabilities and prosecute claims, whether they
are Assets or Excluded Assets;
(d) the parties shall cooperate with respect to the
preparation of the Tax Returns contemplated by Sections 7.01(a) and
(b); and
(e) the Seller Representative's rights under the Transition
Services Agreement may be assigned to a liquidating trustee.
SECTION 5.14. INTERCOMPANY OBLIGATIONS. The parties hereto
hereby agree that all intercompany liabilities of the Sellers or any of their
subsidiaries payable to or by any Purchased Subsidiary shall be canceled as of
the Closing Date.
SECTION 5.15. OPTION TO AMEND SCHEDULES. (a) At any time prior
to March 25, 2000, the Purchaser shall be entitled unilaterally to amend this
Agreement, including without limitation Schedules 1.01(a)(i) (Stock Acquired),
1.01(b) (Excluded Contracts) and 1.01(e) (Excluded Assets) attached hereto,
solely for the purpose of excluding any or all of the stock, assets, liabilities
and agreements of the Sellers pertaining to the Sellers' joint venture with
Bechtel Enterprises, Inc. or its affiliates, (collectively, the "BCN ASSETS AND
LIABILITIES") from the stock, assets, liabilities and agreements being acquired
or assumed by the Purchaser hereunder.
(b) At any time prior to March 25, 2000, the Purchaser
shall be entitled unilaterally to amend this Agreement, including without
limitation Schedules 1.01(b) (Excluded Contracts) and 1.01(e) (Excluded
Assets) attached hereto, solely for the purpose of (i) excluding any or all
of the assets, liabilities and agreements of the Sellers pertaining to any
agreement with Northern States Power Company ("NSP") (collectively, the "NSP
ASSETS AND LIABILITIES") from the assets, liabilities and agreements being
acquired or assumed by the Purchaser hereunder or (ii) including any or all
of the assets, liabilities and agreements of the Sellers pertaining to any
agreement with Seren Innovations, Inc. ("SEREN") (collectively, the "SEREN
ASSETS AND LIABILITIES") among the assets, liabilities and agreements being
acquired or assumed by the
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Purchaser hereunder; PROVIDED that if Purchaser, as of March 25, 2000, shall
(A) have exercised its option to exclude the NSP Assets and Liabilities under
clause (i) above or (B) have failed to exercise its option to include the
Seren Assets and Liabilities under clause (ii) above and (in the case of this
sub-clause (B)) there shall not have been, in the judgment of the Sellers, a
satisfactory resolution regarding amounts, if any, owed by CellNet Data
Services (MSP), Inc. ("CN DATA MSP") to Seren, then CN Data MSP shall not be
obligated to transfer to Purchaser, and Purchaser shall not be obligated to
assume or acquire, any of the NSP Assets and Liabilities or any of the Seren
Assets and Liabilities.
ARTICLE VI
EMPLOYEE MATTERS
SECTION 6.01. EMPLOYEES. (a) Following execution of this
Agreement, the Sellers shall provide the Purchaser with a true and complete list
showing the names and current annual salary rates of all of the Business
Employees as of the date hereof.
(b) Subject to Section 6.01(c), the Purchaser is under no
obligation to employ any Business Employees. The Purchaser shall assume
responsibility for all payroll obligations (including, without limitation, the
satisfaction of all payroll withholding tax obligations) for the Business.
(c) Within 10 days following the Closing Date (the "Payment
Date"), the Purchaser shall pay amounts owing under the Sellers' 1999
performance bonus plan and any amounts owing under its severance and retention
bonus plan approved by the Bankruptcy Court as follows: (i) to any Business
Employee who is entitled to receive such payments and who is hired by the
Purchaser in connection with the transactions contemplated by this Agreement,
100% of the aggregate amount of the 1999 bonus payment and the retention payment
earned by such Business Employee; and (ii) to any Business Employee who is
employed by any Seller at the Closing Date and not offered employment by the
Purchaser at a base salary and for a position, in each case substantially
similar to that provided by such Seller, or any Business Employee employed by
any Seller at the Filing Date but terminated by such Seller other than for cause
prior to the Closing Date, 100% of the aggregate amount of the 1999 bonus
payment earned by such employee, any severance payment earned by such employee
(including accrued wages and vacation pay and withholding taxes) pursuant to
such Seller's severance policy in effect on the date hereof and the retention
payment earned by such employee. No 1999 bonus, retention or severance payment
shall be made by the Purchaser to any Business Employee who resigns prior to the
Payment Date or to any employee of the Sellers not employed in the Business.
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(d) After the Closing, the Purchaser shall assume all accrued
but unused vacation and sick leave time of each Business Employee who is hired
by the Purchaser in connection with the transactions contemplated by this
Agreement.
SECTION 6.02. NO THIRD-PARTY BENEFICIARIES. Nothing in this
Article VI or elsewhere in this Agreement shall be deemed to make any past,
present or future Business Employees third-party beneficiaries of this
Agreement. Nothing in this Section 6.02 shall be deemed to preclude the claim of
any Business Employee based upon representations or acts of the Purchaser
outside of this Agreement.
ARTICLE VII
TAX MATTERS
SECTION 7.01. LIABILITY FOR TAXES AND PREPARATION OF RETURNS.
(a) Sellers shall prepare and timely file, or cause to be prepared and timely
filed: (i) all Tax Returns relating to Taxes in the nature of income or
franchise Taxes imposed on or with respect to any Seller or any of its
Affiliates (other than the Purchased Subsidiaries); (ii) all Tax Returns of
federal, state or local or foreign consolidated combined or unitary groups for
all Tax periods in which a Purchased Subsidiary and a Seller or Affiliate
thereof (other than a Purchased Subsidiary) is includible; (iii) all Tax Returns
relating to the Excluded Assets; (iv) all Tax Returns relating to the Business
or Assets which Tax Returns are due on or before the Closing Date; and (v) all
Tax Returns with respect to the Purchased Subsidiaries which Tax Returns are due
on or before the Closing Date. Notwithstanding the foregoing, Sellers shall not
be responsible for preparing and filing Tax Returns relating to the property
Taxes specifically identified as Assumed Liabilities under paragraph (f) of the
definition of "Assumed Liabilities" contained in this Agreement (the "PROPERTY
TAX RETURNS"). No Seller shall prepare or file or cause to be prepared or filed
any Tax Return required to be filed or caused to be filed by Sellers pursuant to
this paragraph (a) (a "SELLER RETURN") inconsistent with past practice or, on
any Seller Return, take any position, make any material election, or adopt any
method that is inconsistent with positions taken, election made or methods used
in preparing or filing similar Tax Returns in prior periods. Sellers shall be
liable for all costs incurred in connection with the preparation and filing of
Seller Returns. The Seller Representative shall deliver to the Purchaser a
complete copy of each Tax Return filed by (or caused to be filed by) Sellers
pursuant to this Section 7.01(a) and any amendment to such Tax Return on or
before the date that is 10 days after the date such Tax Return, or amendment
thereof, is filed with the appropriate Tax authority.
(b) Purchaser shall prepare and timely file (or cause to be
prepared and timely filed) all Property Tax Returns and shall prepare (or
cause to be prepared) all other Tax Returns relating to the Business and
Assets acquired pursuant to the express terms of this Agreement that are not
Seller Returns (such Tax Returns to be prepared by Purchaser or caused to be
prepared by
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Purchaser to the extent relating to Taxes with respect to which Sellers are
liable under Section 7.01(c) or Section 7.01(d) hereof, the "PURCHASER
RETURNS"). Purchaser shall deliver to the Seller Representative a copy of
each Purchaser Return not later than 20 days prior to the due date for filing
a Purchaser Return (or, if such due date is within 20 days following the
Closing Date, as promptly as practicable following the Closing Date). Sellers
shall timely file (or cause to be filed) all Purchaser Returns that are
required to be signed by Seller or an Affiliate thereof (other than a
Purchased Subsidiary), and Purchaser shall timely file (or cause to be filed)
all other Purchaser Returns. Seller Representative shall have the right to
review and approve, which approval may not be unreasonably withheld, all
Purchaser Returns delivered to Seller Representative pursuant to this Section
7.01(b) which are not required by this Section 7.01(b) to be filed by
Sellers. Purchaser shall deliver to the Seller Representative a complete copy
of each Purchaser Return filed by (or caused to be filed by) Purchaser
pursuant to this Section 7.01(b), and any amendment to such Purchaser Return,
on or before the date that is 10 days after the date such Purchaser Return or
amendment thereof is filed with the appropriate Tax authority. Sellers shall
deliver to Purchaser a complete copy of each Purchaser Return filed (or
caused to be filed) by any Seller pursuant to this Section 7.01(b), and any
amendment to such Purchaser Return, on or before the date that is 10 days
after the date such Purchaser Return or amendment thereof is filed with the
appropriate Tax authority. Sellers shall be liable for all reasonable costs
incurred in connection with the preparation and filing of Purchaser Returns
relating to Tax periods that end on or before the Closing Date and Purchaser
shall be liable for all costs incurred in connection with the preparation and
filing of all other Purchaser Returns.
(c) Except with respect to Taxes specifically identified as
Assumed Liabilities in paragraph (f) of the definition of "Assumed Liabilities"
contained herein (the "PROPERTY TAXES"), the Sellers shall be liable for and
shall pay to the appropriate Tax authority all Taxes relating to the Assets
(other than Purchased Subsidiaries), the Business or the Assumed Liabilities for
any Tax period ending on or prior to the Closing Date. Except with respect to
the Property Taxes, in the case of Taxes relating to the Assets (other than
Purchased Subsidiaries), the Business or the Assumed Liabilities that are
payable with respect to a Tax year or period that begins before the Closing Date
and ends after the Closing Date (a "STRADDLE PERIOD"), the Sellers shall be
liable for and shall pay to the appropriate Tax authority any such Taxes
allocable to the portion of such Straddle Period ending on and including the
Closing Date which shall be (i) in the case of Taxes that are either (x) based
upon or related to income or receipts, or (y) imposed in connection with any
sale or other transfer or assignment of property (real or personal, tangible or
intangible) (other than conveyances pursuant to this Agreement) deemed equal to
the amount which would be payable if the Tax year or period ended with the
Closing Date (except that, solely for the purposes of determining the marginal
tax rate applicable to income or receipts during such year or period in a
jurisdiction in which such tax rate depends upon the level of income or
receipts, annualized income or receipts may be taken into account if appropriate
for an equitable sharing of such Taxes) and (ii) in the case of Taxes not
described in the preceding subparagraph (i) that are imposed on a periodic basis
and measured by the level of any item, deemed to be the amount of such Taxes for
the entire period (or, in the case of such Taxes determined on an arrears basis,
the amount of such Taxes for the immediate preceding period)
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multiplied by a fraction the numerator of which is the number of calendar
days in the period ending on the Closing Date and the denominator of which is
the number of calendar days in the entire period. Purchaser shall be liable
for and shall pay or cause to be paid to the appropriate Tax Authority the
Property Taxes.
(d) Except with respect to the Property Taxes, the Sellers
shall be liable for and shall pay or caused to be paid to the appropriate Tax
authority all Taxes imposed on any Purchased Subsidiary, or for which such
Purchased Subsidiary may otherwise be liable, for any Tax year or period ending
on or prior to the Closing Date and, with respect to any Straddle Period, the
portion of such Straddle Period ending on and including the Closing Date. Taxes
allocable to the portion of the Straddle Period ending on and including the
Closing Date shall be determined using the methodology set forth in paragraph
(c) of this Section 7.01.
(e) Notwithstanding anything to the contrary in the preceding
paragraphs of this Section 7.01, except to the extent that Sellers are required
to perform the obligations of the Purchaser under Section 2.03, Sellers shall
not be liable for Taxes that constitute Chapter 11 Expenses pursuant to
paragraph (e) of the definition of the term Chapter 11 Expenses contained
herein.
SECTION 7.02. COOPERATION AND EXCHANGE OF INFORMATION. The
Sellers and the Purchaser shall provide each other with such cooperation and
information as any of them reasonably may request of another in filing any Tax
Return, amended return or claim for refund, determining a liability for Taxes or
a right to a refund of Taxes or participating in or conducting any audit or
other proceeding in respect of Taxes. Such cooperation and information shall
include providing copies of relevant Tax Returns or portions thereof, together
with accompanying schedules and related work papers and documents relating to
rulings or other determinations by Tax authorities. The Sellers and their
Affiliates shall provide all such information at the same time and in the same
manner that they deliver the Assets to the Purchaser. Each such party shall make
its employees available on a mutually convenient basis to provide explanations
of any documents or information provided hereunder. Any information obtained
under this Section 7.02 shall be kept confidential, except as may be otherwise
necessary in connection with the filing of Tax Returns or claims for refund or
in conducting an audit or other proceeding.
SECTION 7.03. CONVEYANCE TAXES. The Sellers agree to assume
liability for and to pay all sales, transfer, stamp, recording or documentary,
real property transfer and other transfer or gains and similar Taxes incurred as
a result of the sale of Assets contemplated hereby. In addition, the Sellers
agree to indemnify the Purchaser and its Affiliates for any and all Taxes,
liabilities, losses, damages, claims, costs, expenses, interest, awards,
judgments and penalties (including, without limitation, attorneys' and
consultants' fees and expenses) incurred by the Purchaser and its Affiliates
arising out of the Sellers' failure to make timely or full payments of such
Taxes. Any amounts due pursuant to this Section 7.03 shall be paid out of the
Indemnity Escrow Fund. Nothing herein shall be construed to deprive Sellers of
the benefit of Section 1146(c) of the Bankruptcy Code.
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SECTION 7.04. CERTAIN TAX FILINGS. At the request of Purchaser
and at no cost (including any increased liability to Sellers for Taxes) to the
Sellers, the Sellers shall file or caused to be filed in all jurisdictions any
statements, certificates or forms provided for under federal, state, local or
other Tax laws to protect the Purchaser from liability as a transferee for Taxes
of the Sellers or their Affiliates.
SECTION 7.05. TAX ELECTION. At the request of the Purchaser,
the Sellers agree to furnish or cause to be furnished such information and
assistance and to take such actions necessary or appropriate (including, but not
limited to, filing such additional forms, returns, elections, schedules and
other documents as may be required) to enable the Purchaser (jointly with the
Sellers) to make an election under Section 338(h)(10) of the Code (and any
comparable provisions of state or local law) with respect to the stock of any
domestic Affiliate acquired pursuant to this Agreement.
ARTICLE VIII
CONDITIONS TO CLOSING
SECTION 8.01. CONDITIONS TO OBLIGATIONS OF THE SELLERS. The
obligations of the Sellers to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment or waiver, at or prior to the
Closing, of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES; COVENANTS. (i) The
representations and warranties of the Purchaser contained in Article IV
shall be true and correct in all respects as of the Closing (other than
representations and warranties made as of another date, which
representations and warranties shall have been true and correct in all
respects as of such date), except to the extent that any such
representation and warranty is qualified by a materiality requirement,
in which case such representation and warranty shall be true and
correct in all material respects as of the applicable date; (ii) the
covenants contained in this Agreement to be complied with by the
Purchaser on or before the Closing shall have been complied with in all
material respects except that the Purchaser shall have complied in all
respects with its obligations under Article II hereof; and (iii) the
Seller Representative shall have received a certificate of the
Purchaser to such effect signed by a duly authorized officer thereof;
(b) BANKRUPTCY COURT ORDERS. The Sale Order shall have been
entered by the Bankruptcy Court and such order shall not have been
stayed, modified, reversed or amended;
(c) HSR ACT. Any waiting periods (and any extension thereof)
under the HSR Act applicable to the purchase of the Assets contemplated
hereby shall have expired or shall have been terminated;
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(d) FCC APPROVAL. The Sellers shall have received the FCC
Approvals;
(e) NO GOVERNMENTAL ORDER. There shall be no Governmental
Order in existence that prohibits the transactions contemplated by this
Agreement or renders it unlawful to consummate such transactions; and
(f) ANCILLARY AGREEMENTS. The Purchaser shall have executed
and delivered to the Sellers each of the Ancillary Agreements to which
it is a party.
SECTION 8.02. CONDITIONS TO OBLIGATIONS OF THE PURCHASER. The
obligations of the Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment or waiver, at or prior to the
Closing, of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES; COVENANTS. (i) The
representations and warranties of the Sellers contained in Article III
shall be true and correct as of the Closing (other than representations
and warranties made as of another date, which representations and
warranties shall have been true and correct as of such date), except to
the extent that any such representation and warranty is qualified by
materiality, in which case such representation and warranty shall be
true and correct in all material respects as of the applicable date;
(ii) the covenants contained in this Agreement to be complied with by
the Sellers on or before the Closing shall have been complied with in
all material respects; and (iii) the Purchaser shall have received a
certificate of each Seller to such effect signed by a duly authorized
officer thereof; PROVIDED, HOWEVER, in no event shall the Sellers'
inability to transfer the BCN Assets and Liabilities as a result of any
order of the Bankruptcy Court give rise to any right of the Purchaser
not to consummate any of the other transactions contemplated hereby.
(b) BANKRUPTCY COURT ORDERS. The Sale Order, in form and
substance satisfactory to the Seller Representative, shall have been
entered by the Bankruptcy Court and such order shall not have been
stayed, modified, reversed or amended;
(c) HSR ACT. Any waiting periods (and any extension thereof)
under the HSR Act applicable to the purchase of the Assets contemplated
hereby shall have expired or shall have been terminated;
(d) FCC APPROVAL. The Sellers shall have received the FCC
Approvals;
(e) NO GOVERNMENTAL ORDER. There shall be no Governmental
Order (including, without limitation, any order entered in the Chapter
11 Case) in existence that prohibits the transactions contemplated by
this Agreement or renders it unlawful to consummate such transactions;
(f) ANCILLARY AGREEMENTS. Each Seller shall have executed and
delivered to the Purchaser each of the Ancillary Agreements to which it
is a party;
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(g) LEGAL OPINION. The Purchaser shall have received from the
Sellers' counsel a legal opinion, addressed to the Purchaser and dated
the Closing Date, as required by Section 2.06(f);
(h) CONSENTS. On or prior to the Closing Date, the Sellers
shall have received the consents and approvals set forth in Section
3.03 of the Disclosure Schedule (taking into account any applicable
provision of the Bankruptcy Code); and
(i) MATERIAL ADVERSE CHANGE. Since the date hereof, there
shall have not been any change or event that could have a Material
Adverse Effect.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. TERMINATION. Subject to Section 9.03 below, this
Agreement may be terminated at any time prior to the Closing:
(a) by the mutual written consent of the Seller Representative
and the Purchaser;
(b) by the Purchaser or the Sellers, if any Seller executes
and delivers a definitive agreement with respect to an Alternative
Offer;
(c) by the Purchaser or the Sellers if any Seller seeks or
supports Bankruptcy Court approval of an Alternative Offer, an
Acquisition or the sale of any Asset (other than to or by the
Purchaser);
(d) by the Purchaser or the Sellers if the Bankruptcy Court
enters an order approving any Acquisition other than the sale of the
Assets to the Purchaser;
(e) by the Purchaser (PROVIDED that it is not in material
breach of any representation, warranty or covenant or other agreement
contained herein), if:
(i) the Bidding Procedures Order shall not have been
entered by the Bankruptcy Court on or prior to March 6, 2000;
or
(ii) the Sale Order shall not have been entered
within ninety (90) days of the Filing Date;
(f) by the Purchaser upon the conversion of the Chapter 11
Case to a case under chapter 7 of the Bankruptcy Code;
46
<PAGE>
(g) by the Purchaser if the Chapter 11 Case is dismissed by
the Bankruptcy Court;
(h) by the Purchaser upon the filing of any plan of
reorganization that provides for an Acquisition other than pursuant to
this Agreement;
(i) by the Purchaser upon the material breach of any provision
under Section 5.01 or any other representation or covenant provided
herein after any applicable grace period by any Seller if all such
breaches in the aggregate have a Material Adverse Effect;
(j) by the Purchaser, if between the date hereof and the time
scheduled for the Closing an event or condition occurs that has
resulted in, or that can reasonably be expected to result in, a
Material Adverse Effect;
(k) by either party, if the Sale Order shall have been entered
but the Closing shall not have occurred within fifteen (15) Business
Days after entry of the Sale Order due to the failure of the other
party to fulfill any obligation under this Agreement;
(l) by either party, if the FCC Approvals are not obtained; or
(m) by either party in the event of the issuance of a final,
nonappealable Governmental Order restraining or prohibiting the
transactions contemplated herein.
SECTION 9.02. EFFECT OF TERMINATION. In the event of the
termination of this Agreement as provided in Section 9.01, this Agreement shall
forthwith become void and there shall be no liability on the part of any party
hereto, except (a) as set forth in Section 9.03, in the case of a termination
pursuant to Section 9.01, and Section 11.02 and (b) nothing herein shall relieve
either party from liability for any breach hereof or failure to perform
hereunder.
SECTION 9.03. TERMINATION PAYMENTS; EXPENSES. In the event
that this Agreement is terminated by the Seller Representative or the Purchaser
pursuant to Section 9.01(b), 9.01(c) or 9.01(d), or by the Purchaser pursuant to
9.01(h) then the Sellers, subject to the approval of the Bankruptcy Court, shall
pay to the Purchaser a fee in the amount of $5.0 million plus the reimbursement
of reasonable actual and documented expenses of the Purchaser, including
professional fees and expenses. Such payment shall be made by wire transfer of
immediately available funds to an account designated by the Purchaser no later
than the consummation of the Acquisition giving rise to the termination. The
claims of Purchaser under this Section 9.03 shall constitute an administrative
expense under Section 507(a)(1) of the Bankruptcy Code.
SECTION 9.04. WAIVER. At any time prior to the Closing, any
party may (a) extend the time for the performance of any of the obligations or
other acts of any other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto or (c) waive compliance with any of the agreements or conditions
contained herein. Any such extension or waiver shall be valid only if set forth
in an instrument in writing signed by the party to be bound thereby.
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ARTICLE X
INDEMNIFICATION
SECTION 10.01. INDEMNIFICATION BY THE SELLERS. (a) Subject to
Section 11.01, the Sellers, jointly and severally, shall indemnify and hold the
Purchaser, its respective Affiliates and their respective employees, officers
and directors (collectively, the "PURCHASER INDEMNIFIED PARTIES") harmless from
and against, and agree to promptly defend any Purchaser Indemnified Party from
and reimburse any Purchaser Indemnified Party for, any and all losses, damages,
costs, expenses, liabilities, obligations and claims of any kind (including,
without limitation, any Action brought by any Governmental Authority or Person
and including reasonable attorneys' fees and other legal costs and expenses
reasonably incurred) (collectively, "LOSSES"), which such Purchaser Indemnified
Party may at any time suffer or incur, or become subject to, as a result of or
in connection with:
(i) the inaccuracy as of the date of this Agreement or the
Closing Date of any representations and warranties made by any Seller
in or pursuant to this Agreement, without giving effect to any
materiality qualifier or exception related to Material Adverse Effect,
or the Ancillary Agreements, or in any instrument, certificate or
affidavit delivered by any Seller at the Closing in accordance
herewith; or
(ii) any failure by any Seller to carry out, perform, satisfy
and discharge any of its covenants, agreements, undertakings,
liabilities or obligations under this Agreement or the Ancillary
Agreements or under any of the documents or other instruments delivered
by any Seller pursuant to this Agreement or the Ancillary Agreements;
or
(iii) the Retained Liabilities.
(b) The amounts for which the Sellers shall be liable under
Section 10.01(a) shall be net of any insurance payable to the Purchaser
Indemnified Parties from their own insurance policies in connection with the
facts giving rise to the right of indemnification.
(c) Notwithstanding anything to the contrary continued or
implied herein, the aggregate liability of the Sellers pursuant to this Section
10.01 shall be limited to the amount contained in the Indemnity Escrow Fund, if
any. Debtors shall have no obligations to pursue any recoveries to establish the
Indemnity Escrow Fund, and may dispose of or consent to the release of monies
that would form the Indemnity Escrow Fund. Any indemnification pursuant to this
Section 10.01 shall be effected by wire transfer of immediately available funds
from the account in which the Indemnity Escrow Fund is held pursuant to the
terms of the Indemnity Escrow Agreement.
SECTION 10.02. NOTIFICATION OF CLAIMS. (a) The Purchaser
Indemnified Party shall promptly notify the Seller Representative in writing
of any claim or demand which the Purchaser Indemnified Party has determined
has given or could give rise to a right of indemnification under this
Agreement. Subject to the Sellers' right to defend in good faith third
48
<PAGE>
party claims as hereinafter provided, the Sellers shall satisfy their
obligations under this Article X within 30 days after the receipt of written
notice thereof from the Purchaser Indemnified Party pursuant to the terms of
the Indemnity Escrow Agreement.
(b) If the Purchaser Indemnified Party shall notify the Seller
Representative of any claim or demand pursuant to Section 10.02(a), and if such
claim or demand relates to a claim or demand asserted by a third party against
the Purchaser Indemnified Party that the Seller Representative acknowledges is a
claim or demand for which it must indemnify or hold harmless the Purchaser
Indemnified Party under Section 10.01, the Seller Representative shall have the
right to employ counsel reasonably acceptable to the Purchaser Indemnified Party
to defend any such claim or demand asserted against the Purchaser Indemnified
Party. The Purchaser Indemnified Party shall have the right to participate in
the defense of any such claim or demand at its own expense. The Seller
Representative shall notify the Purchaser Indemnified Party in writing, as
promptly as possible (but in any case before the due date for the answer or
response to a claim) after the date of the notice of claim given by the
Purchaser Indemnified Party to the Seller Representative under Section 10.02(a),
of its election to defend in good faith any such third party claim or demand. So
long as the Seller Representative is defending in good faith any such claim or
demand asserted by a third party against the Purchaser Indemnified Party, the
Purchaser Indemnified Party shall not settle or compromise such claim or demand.
The Purchaser Indemnified Party shall make available to the Seller
Representative or its agents all records and other material in the Purchaser
Indemnified Party's possession reasonably required by it for its use in
contesting any third party claim or demand. Whether or not the Seller
Representative elects to defend any such claim or demand, the Purchaser
Indemnified Party shall have no obligation to do so. The Purchaser Indemnified
Party shall not settle or compromise any such claim or demand unless the Sellers
are given a full and completed release of any and all liability by all relevant
parties relating thereto.
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.01. SURVIVAL. The representations, warranties,
covenants and agreements of the Sellers and the Purchaser contained in or made
pursuant to this Agreement and the Ancillary Agreements or in any certificate
furnished pursuant hereto shall survive until the date that is six months from
the Closing Date; PROVIDED that, if written notice of a claim under Article X
hereof, setting forth in reasonable detail the basis of such claim, has been
given by the Purchaser Indemnified Party to the Seller Representative prior to
the expiration of such six-month period, then the representations and warranties
relevant to such claim shall survive as to such claim until such claim has been
finally resolved.
SECTION 11.02. EXPENSES. Except as may be otherwise specified
herein, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions
49
<PAGE>
contemplated hereby shall be paid by the party incurring such costs and
expenses, whether or not the Closing shall have occurred.
SECTION 11.03. NOTICES. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by overnight courier service, by cable, by facsimile or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
11.03):
(a) if to any Seller:
CellNet Data Systems, Inc. or successor name
125 Shoreway Road
San Carlos, CA 94070
Attention: Ben Lyon and John Dubel
Telecopier: (650) 508-6886
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Mark Thompson
Telecopier: (212) 455-2582
(b) if to the Purchaser:
Schlumberger Resource Management Services, Inc.
5430 Metric Place
Norcross, GA 30092-2550
Attention: Brad Kitterman
Telecopier: (770) 417-3737
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Attention: Douglas P. Bartner
Telecopier: (212) 848-7179
SECTION 11.04. PUBLIC ANNOUNCEMENTS. Except as may be required
by Applicable Law, stock exchange rules or in filings by the Sellers with the
Bankruptcy Court or the office of the United States trustee, no party to this
Agreement shall make any public
50
<PAGE>
announcements in respect of this Agreement or the transactions contemplated
hereby or otherwise communicate with any news media without prior
notification to the other party, which consent shall not be unreasonably
withheld, and the parties shall cooperate as to the timing and contents of
any such announcement.
SECTION 11.05. HEADINGS. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 11.06. SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any
Applicable Law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent possible.
SECTION 11.07. ENTIRE AGREEMENT. This Agreement constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and undertakings, both written and
oral, other than the Ancillary Agreements, between the Sellers and the Purchaser
with respect to the subject matter hereof and except as otherwise expressly
provided herein.
SECTION 11.08. ASSIGNMENT. This Agreement shall not be
assigned by Sellers, except after the Closing pursuant to an order of the
Bankruptcy Court upon notice to Purchaser complying with the Federal Rules of
Bankruptcy Procedure and, except that the Purchaser may assign all or any of its
rights and obligations hereunder to any wholly owned Subsidiary or any Affiliate
of the Purchaser upon the execution of a written instrument whereby such
assignee agrees to assume all of the assignor's obligations hereunder and be
bound by all the terms and conditions of this Agreement; PROVIDED, HOWEVER, that
no such assignment shall relieve the assigning party of its obligations
hereunder if such assignee does not perform such obligations.
SECTION 11.09. NO THIRD-PARTY BENEFICIARIES. This Agreement is
for the sole benefit of the parties hereto and their permitted assigns and
nothing herein, express or implied, is intended to or shall confer upon any
other Person or entity any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
SECTION 11.10. AMENDMENT. Except as specifically provided in
Section 5.15 or elsewhere herein, this Agreement may not be amended or modified
except by an instrument in writing signed by the Seller Representative and the
Purchaser and approved by the Bankruptcy Court if requested by either party.
51
<PAGE>
SECTION 11.11. GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the Laws of the State of New York and, to
the extent applicable, the Bankruptcy Code. The parties hereto agree that the
Bankruptcy Court shall be the exclusive forum for enforcement of this Agreement
or the transactions contemplated hereby and (only for the limited purpose of
such enforcement) submit to the jurisdiction thereof; PROVIDED that if the
Bankruptcy Court determines that it does not have subject matter jurisdiction
over any action or proceeding arising out of or relating to this Agreement, then
each party hereto agrees that all such actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in a New York state or
federal court sitting in the County of New York, and the parties hereto hereby
irrevocably submit to the jurisdiction of such courts in any such action or
proceeding and irrevocably waive the defense of an inconvenient forum to the
maintenance of any such action or proceeding.
SECTION 11.12. CONSENT TO JURISDICTION. All actions and
proceedings arising out of or relating to this Agreement, or any of the
Ancillary Agreements, shall be heard and determined in the Bankruptcy Court;
PROVIDED that if the Bankruptcy Court determines that it does not have subject
matter jurisdiction over any action or procedure arising out of or relating to
this Agreement, then each party hereto agrees that all such actions or
proceedings shall be heard and determined in a New York state or federal court
sitting in the County of New York, and each of the parties hereto (i) waives any
objection which such party may now or hereafter have to the venue for any such
action or proceeding, and (ii) irrevocably and unconditionally accepts, with
regard to any such action or proceeding, the personal jurisdiction of such
courts and waives any defense or objection that it might otherwise have to such
courts' exercise of personal jurisdiction with respect to it. A final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Any and all service of process and any other notice in any such suit,
action, claim, proceeding or investigation shall be effective against any party
if given by registered or certified mail, return receipt requested, or by any
other means of mail which requires a signed receipt, postage prepaid, mailed to
such party as herein provided. If for any reason such service of process by mail
is ineffective, then (A) the Purchaser shall be deemed to have appointed
National Registered Agents Inc., 440 9th Avenue, 5th Floor, New York, New York
10001, as authorized agent of Purchaser to accept and acknowledge, on behalf of
the Purchaser, service of any and all process which may be serviced in any such
action or proceeding; and (B) the Sellers shall be deemed to have appointed
Simpson Thacher & Bartlett, as authorized agent of the Sellers to accept and
acknowledge, on behalf of the Sellers, service of any and all process which may
be serviced in any such action or proceeding. Nothing herein contained shall be
deemed to affect the right of any party to serve process in any manner permitted
by law or, if any action or proceeding cannot be instituted in any state or
federal court in the County of New York, to commence any such legal proceedings
or otherwise proceed against any other party in any other jurisdiction.
SECTION 11.13. COUNTERPARTS. This Agreement may be executed
in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this
52
<PAGE>
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 11.14. NO PRESUMPTION. This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.
53
<PAGE>
IN WITNESS WHEREOF, the Sellers and the Purchaser have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
CELLNET DATA SYSTEMS, INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Chief Operating Officer
CELLNET DATA RETROFIT SERVICES, INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CELLNET DATA SERVICES, INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CELLNET DATA SERVICES (AZ), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
54
<PAGE>
CELLNET DATA SERVICES (CA), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CELLNET DATA SERVICES (IS), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CELLNET DATA SERVICES (KC), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CELLNET DATA SERVICES (ME), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CELLNET DATA SERVICES (MSP), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
55
<PAGE>
CELLNET DATA SERVICES (NH), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CELLNET DATA SERVICES (PA), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CELLNET DATA SERVICES (SE), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CELLNET DATA SERVICES (SF), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CELLNET DATA SERVICES (SL), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
56
<PAGE>
CELLNET DATA SERVICES (TX), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CN HOLDINGS (TX), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CN PARTNERS (TX), L.P.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CN FREQUENCY (ME), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
57
<PAGE>
CN FREQUENCY (NH), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CN FREQUENCY (PA), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
CN FREQUENCY (SF), INC.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
The undersigned has caused this
Agreement to be executed as of
the date first written above for
purposes of Section 3.01, 3.02,
3.03, 3.04, 5.08 and 5.14 and
Articles X and XI of this Agreement:
CELLNET FUNDING, L.L.C.
By /s/ John S. Dubel
------------------------------------
Name: John S. Dubel
Title: Attorney-in-Fact
58
<PAGE>
SCHLUMBERGER RESOURCE
MANAGEMENT SERVICES, INC.
By /s/ Colin Flannery
------------------------------
Name: Colin Flannery
Title: Secretary
The undersigned has caused this
Agreement to be executed as of
the date first written above
only for purposes of the guaranty
set forth in Section 5.12 of this
Agreement:
SCHLUMBERGER TECHNOLOGY
CORPORATION
By /s/ Jack Liu
------------------------------------
Name: Jack Liu
Title: Attorney-in-Fact
59
<PAGE>
EXHIBIT 99.2
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
This FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this "AMENDMENT"),
dated as of March 9, 2000, among the SELLERS SIGNATORY HERETO (the
"SELLERS"), including CELLNET DATA SYSTEMS, INC., a Delaware corporation (the
"SELLER REPRESENTATIVE"), SCHLUMBERGER RESOURCE MANAGEMENT SERVICES, INC., a
Delaware corporation (the "PURCHASER"), and SCHLUMBERGER TECHNOLOGY
CORPORATION, a Delaware corporation (the "PARENT").
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to an Asset Purchase
Agreement dated March 1, 2000 (the "ASSET PURCHASE AGREEMENT"); and
WHEREAS, the parties hereto desire to make certain modifications to
the Asset Purchase Agreement and to amend the Asset Purchase Agreement as set
forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein, all
capitalized terms shall have the meanings set forth in the Asset Purchase
Agreement.
SECTION 2. AMENDMENT. The Asset Purchase Agreement shall be, and
hereby is, amended as follows:
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<PAGE>
(a) The first sentence of Section 5.06(b) shall be deleted
and the following inserted in lieu thereof:
"Each party hereto agrees to make, at its own cost and
expense, an appropriate filing of a Notification and Report
Form pursuant to the HSR Act with respect to the transactions
contemplated hereby no later than the close of business on
March 10, 2000 and to supply promptly any additional
information and documentary material that may be requested
pursuant to the HSR Act."
(b) The text of Section 9.01(e)(i) shall be deleted and the
following inserted in lieu thereof:
"the Bidding Procedures Order shall not have been entered by
the Bankruptcy Court on or prior to March 7, 2000; or"
SECTION 3. EFFECT OF AMENDMENTS. Except as and to the extent
expressly modified by this Amendment, the Asset Purchase Agreement shall
remain in full force and effect in all respects.
SECTION 4. MISCELLANEOUS. The provisions of Section 11.03
through and including Section 11.14 of the Asset Purchase Agreement, as amended
hereby, are hereby incorporated herein by reference and shall be deemed to be
operative provisions of this Amendment as if set forth at length herein.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed as of the date first written above by their respective officers
thereunto duly authorized.
CELLNET DATA SYSTEMS, INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CELLNET DATA RETROFIT SERVICES, INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
2
<PAGE>
CELLNET DATA SERVICES, INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CELLNET DATA SERVICES (AZ), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CELLNET DATA SERVICES (CA), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CELLNET DATA SERVICES (IS), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CELLNET DATA SERVICES (KC), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
3
<PAGE>
CELLNET DATA SERVICES (ME), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CELLNET DATA SERVICES (MSP), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CELLNET DATA SERVICES (NH), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CELLNET DATA SERVICES (PA), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CELLNET DATA SERVICES (SE), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
4
<PAGE>
CELLNET DATA SERVICES (SF), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CELLNET DATA SERVICES (SL), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CELLNET DATA SERVICES (TX), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CN HOLDINGS (TX), INC.
By /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CN PARTNERS (TX), L.P.
By: /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President, CellNet Data Services
(TX), Inc., Managing Partner
5
<PAGE>
CN FREQUENCY (ME), INC.
By: /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CN FREQUENCY (NH), INC.
By: /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CN FREQUENCY (PA), INC.
By: /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CN FREQUENCY (SF), INC.
By: /s/ David L. Perry
----------------------------------
Name: David L. Perry
Title: Vice President
CELLNET FUNDING, L.L.C.
By: /s/ David L. Perry
-------------------------------
Name: David L. Perry
Title: Vice President,
CellNet Data Systems, Inc., Manager
6
<PAGE>
SCHLUMBERGER RESOURCE
MANAGEMENT SERVICES, INC.
By /s/ Jurren Schoonbeek
---------------------------------
Name: Jurren Schoonbeek
Title: Attorney-in-Fact
SCHLUMBERGER TECHNOLOGY
CORPORATION
By /s/ Jurren Schoonbeek
-----------------------------
Name: Jurren Schoonbeek
Title: Attorney-in-Fact
7
