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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: June 28, 1996
Date of earliest event reported: June 14, 1996
CHADMOORE WIRELESS GROUP, INC.
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(Exact name of registrant as specified in its charter)
Colorado 33-14841-D 84-1058165
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4720 Polaris Street, Las Vegas, Nevada 89103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 891-5255
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(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 14, 1996, Registrant executed a Stock Purchase Agreement (the
"Agreement") (see, Exhibit 10.11 included herein) with Libero Limited
("Libero"). Pursuant to the Agreement, Registrant acquired from Libero all the
issued and outstanding common stock of CMRS Systems, Inc. ("CMRS") and 800 SMR
Network, Inc. ("800") (jointly the "Management Companies"). The Management
Companies are in the business of constructing and managing multi-channel
trunked 800 MHz trunked Specialized Mobile Radio ("SMR") stations ("Stations").
The Management Companies have entered into management agreements ("Management
Agreements") with certain companies (the "Companies"), pursuant to which CMRS
or 800, as the case may be, has agreed, in accordance with applicable Federal
Communications Commission ("FCC") rules, regulations and policies, to construct
and manage all of the Stations for which the Companies have received licenses
from the FCC. The respective shareholders of the Companies (the "Licensees")
have granted to CMRS or 800, as the case may be, options to acquire all of the
stock of the Licensees ("Options"), at such time as CMRS and 800 are qualified
to hold the Licenses in full compliance with Section 310 of the Communications
Act of 1934, as amended.
No material relationship exists between Libero, the Management
Companies, or the Licensees and Registrant or any of its affiliates, any
director or officer of Registrant or any associate of any such director or
officer.
Registrant consummated such acquisition for a net present value price
of $34,712,499. The purchase price was paid with (1) an aggregate cash
consideration of $3,547,000; (2) 508,000 shares of Registrant's restricted
common stock valued at $2,032,000; and (3) a grant of option to purchase
8,323,857 shares of Registrant's common stock for a period of ten years
pursuant to an Offshore Securities Purchase Agreement and Stock Option
Agreement of even date, valued at $29,133,499. The Registrant had sufficient
cash on hand for the cash consideration paid.
The acquisition is significant to the Registrant in that such
acquisition substantially increases the number of Stations under management and
expands the service footprint of the Registrant to over two hundred markets
located in forty-six States and the U.S. Territories of Puerto Rico and the
Virgin Islands. Registrant intends to construct, manage and operate the
Stations in accordance with the terms and conditions of the Management
Agreements. Once the Stations are constructed, Registrant intends to manage
and operate Stations to provide wireless communications services to the
population resident in the service footprint of the Stations. Further, once
the Registrant is qualified to hold the Licenses under the applicable rules,
regulations and policies of the Federal Communications Commission, Registrant
intends to seek a transfer of control for the Stations from the Licensees to
Registrant.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
None.
(b) Exhibits
<TABLE>
<CAPTION>
Exhibit Number and Brief Description
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<S> <C>
2.1 Agreement and Plan of Reorganization dated February 2, 1995, by and between Registrant (f/k/a CapVest
Internationale, Ltd.) and Chadmoore Communications, Inc.(1)
2.2 Addendum to the Agreement and Plan of Reorganization, dated February 21, 1995, by and between Registrant (f/k/a
CapVest Internationale, Ltd.) and Chadmoore Communications, Inc.(1)
2.3 Addendum No. 2 to the Agreement and Plan of Reorganization, dated March 31, 1995, by and between Registrant
(f/k/a CapVest Internationale, Ltd.) and Chadmoore Communications, Inc.(1)
4.1 Form of Warrant Certificate, together with the Terms of Warrants(2)
4.2 Registration Rights Agreement(3)
4.3 Certificate of Designation of Rights and Preferences of Series A Convertible Preferred Stock of Registrant(4)
10.11 Stock Purchase Agreement dated June 14, 1996, by and between Chadmoore Wireless Group, Inc. and Libero
Limited(5)
17.1 Resignation of David J. Chadwick dated April 30, 1996(6)
</TABLE>
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(1) Incorporated by reference to Exhibit 1 in Registrant's Form 8-K, under
Item 2, date of earliest event reported - February 21, 1995
(2) Incorporated by reference to Exhibit 4.1 to Registrant's Form 10-KSB
for the year ended December 31, 1995
(3) Incorporated by reference to Exhibit 4.2 to Registrant's Form 10-KSB
for the year ended December 31, 1995
(4) Incorporated by reference to Exhibit 3.4 to Registrant's Form 10-KSB
for the year ended December 31, 1995
(5) Filed herewith
(6) Incorporated by reference to Exhibit 17.1 in Registrant's Form 8-K,
under Item 6, date of earliest event reported - April 30, 1996
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHADMOORE WIRELESS GROUP, INC.
By: /s/ Robert W. Moore
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Robert W. Moore, President
Date: June 28, 1996
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EXHIBIT INDEX
<TABLE>
<S> <C>
2.1 Agreement and Plan of Reorganization dated February 2, 1995, by and between registrant (f/k/a CapVest
Internationale, Ltd.) and Chadmoore Communications, Inc.(1)
2.2 Addendum to the Agreement and Plan of Reorganization, dated February 21, 1995, by and between registrant (f/k/a
CapVest Internationale, Ltd.) and Chadmoore Communications, Inc.(1)
2.3 Addendum No. 2 to the Agreement and Plan of Reorganization, dated March 31, 1995, by and between registrant
(f/k/a CapVest Internationale, Ltd.) and Chadmoore Communications, Inc.(1)
4.1 Form of Warrant Certificate, together with the Terms of Warrants(2)
4.2 Registration Rights Agreement(3)
4.3 Certificate of Designation of Rights and Preferences of Series A Convertible Preferred Stock of registrant(4)
10.11 Stock Purchase Agreement dated June 14, 1996, by and between Chadmoore Wireless Group, Inc. and Libero
Limited(5)
17.1 Resignation of David J. Chadwick dated April 30, 1996(6)
</TABLE>
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(1) Incorporated by reference to Exhibit 1 in registrant's Form 8-K, under
Item 2, date of earliest event reported - February 21, 1995
(2) Incorporated by reference to Exhibit 4.1 to registrant's Form 10-KSB for
the year ended December 31, 1995
(3) Incorporated by reference to Exhibit 4.2 to registrant's Form 10-KSB for
the year ended December 31, 1995
(4) Incorporated by reference to Exhibit 3.4 to registrant's Form 10-KSB for
the year ended December 31, 1995
(5) Filed herewith
(6) Incorporated by reference to Exhibit 17.1 in registrant's Form 8-K,
under Item 6, date of earliest event reported - April 30, 1996
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STOCK PURCHASE AGREEMENT
THIS OPTION AND STOCK PURCHASE AGREEMENT ("Agreement") is made as of the
14th day of June, 1996, by and among CHADMOORE WIRELESS GROUP, INC.
("Purchaser") and LIBERO LIMITED ("Seller").
RECITALS
A. Seller owns all of the issued and outstanding stock of CMRS
Systems, Inc. ("CMRS") and 800 SMR Network, Inc. ("800"). CMRS and 800 are
jointly referred to herein individually as a "Management Company" or jointly as
the "Management Companies."
B. The Management Companies are in the business of constructing and
managing multi-channel trunked 800 MHz trunked Specialized Mobile Radio ("SMR")
stations ("Stations").
C. The Management Companies have entered into management agreements
("Management Agreement") with the companies listed on Exhibit A-1 and A-2,
respectively, pursuant to which CMRS or 800, as the case may be, has agreed, in
accordance with applicable FCC rules, regulations and policies (all of which
are herein referred to as "FCC Rules"), to construct and manage all of the
Stations for which the companies have received licenses from the Federal
Communications Commission (the "FCC").
D. The respective shareholders of the companies listed on Exhibit A-1
and A-2 (each of which companies is herein referred to as a "Licensee"), have
offered to grant to CMRS or 800, as the case may be, options to acquire all of
the stock of
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the Licensees, at such time as CMRS and 800 are qualified to hold the licenses
in full compliance with section 310 of the Communications Act of 1934, as
amended (the "Act").
E. Seller owns all of the shares of each Management Company. The
shares of CMRS are herein referred to as the "CMRS Shares" and the shares of
800 are herein referred to as "800 Shares." The CMRS Shares and the 800 Shares
are jointly referred to as the "Shares."
F. Seller desires to sell the Shares to Purchaser and the Purchaser
desires to purchase the Shares from the Seller, for the price and upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties, intending to be legally bound, hereby
agree as follows:
1. Sale and Purchase of Shares. On the Closing Date (as defined in
this Agreement) the Seller agrees to sell to the Purchaser, and the Purchaser
agrees to purchase from the Seller the Shares pursuant to the terms and
conditions hereof.
2. Purchase Price for Shares and Terms of Payment.
A. The purchase price to be paid to the Seller by the Purchaser
for the Shares shall be thirty four million seven hundred twelve thousand four
hundred ninety-nine dollars ($34,712,499.00) (the "Purchase Price").
B. The Purchase Price shall be paid as follows:
(1) At Closing, the Purchaser shall pay three million
five hundred forty seven thousand dollars ($3,547,000.00) to the Seller in
immediately
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available funds.
(2) At Closing, the Purchaser and Seller shall execute
the Stock Option Agreement and the Offshore Securities Subscription Agreement,
both in the form attached hereto as Exhibit B (jointly referred to as the
"Stock Option Agreement" pursuant to which Purchaser shall grant to Seller the
option to acquire eight million three hundred twenty three thousand eight
hundred fifty seven (8,323,857) shares of its common stock. The parties agree
that the value of the foregoing option is twenty nine million one hundred
thirty three thousand four hundred ninety nine dollars ($29,133,499.00). The
executed Stock Option Agreement shall be deposited with an escrow agent to be
designated by the Seller ("Escrow Agent"), to be held in escrow pending
completion of the condition precedent set forth in paragraph 9C hereof. The
parties anticipate that such condition shall be satisfied on or before the
business day immediately following Closing.
(3) At Closing, the Purchaser shall issue five hundred
eight thousand (508,000) shares of its common stock, which shares have a value
of two million thirty two thousand dollars ($2,032,000.00), to such person(s)
as Seller shall direct; provided that the certificates representing all such
shares shall contain the following restrictive legend:
The shares represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") and
are restricted securities as that term is defined in Rule 144
under the Act. The shares may not be offered for sale, sold,
or otherwise transferred except pursuant to an
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effective Registration Statement under the Act or pursuant to
an exemption from registration under the Act, the availability
of which is to be established to the satisfaction of Chadmoore
Wireless Group, Inc.
(4) Prior to the date of this Agreement, Licensees have
expended substantial effort and financial resources and thereby caused the
preparation of an Extended Implementation Authority Showing on behalf of the
Licensees (the "Showing"). Licensees submitted the Showing to the FCC on June
4, 1996, and supplemented the Showing subsequent to this date. After Closing,
Licensees, will continue their efforts to support the Showing and seek an
extended period of time within which to construct the Stations. The grant of
the extended period of time within which to construct the Stations will
immediately inure significant additional value to the Stations, to the rights
of the Management Companies under the Management Agreements, and to the value
of stock of the Licensees and the Management Companies. Based on the
foregoing, the parties have agreed that the Purchaser shall provide additional,
but contingent, consideration to Seller as part of the Purchase Price.
If, pursuant to the Showing, the FCC grants to
Licensees an extended period of time within which to construct the Stations
beyond the existing construction deadline of December 17, 1996, the option
granted to Seller in the Stock Option Agreement shall be automatically
increased to permit Seller to acquire an additional one million nine hundred
eighty three thousand five hundred seventy one (1,983,571) shares of
Purchaser's common stock (the "Additional
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Underlying Shares"). The grant of an extended period of time within which to
construct the Stations shall be evidenced by the FCC document that so states;
and, the delivery of a true and correct copy of such FCC document to the Escrow
Agent under the Stock Option Agreement shall automatically vest the Additional
Underlying Shares in the option of Seller. The six month period to construct
the Stations afforded by a denial of the Showing by the FCC shall not
constitute a grant of extended period under this provision ("Six Month
Period"); the grant by the FCC of an extended period must provide additional
time to construct beyond the Six Month Period. The parties agree that the
value of the Additional Underlying Shares in the option is six million nine
hundred forty two thousand five hundred dollars ($6,942,500). If, however, the
FCC denies the Licensees an extended period of time within which to construct
the Stations, then the Additional Underlying Shares shall not vest in the
option and Seller shall not be entitled to any additional consideration under
this provision.
3. Closing Date. Closing on the sale and purchase of the Shares
shall be held at a mutually convenient date, but not later than June 14, 1996,
at the offices of Keck, Mahin & Cate, 1201 New York Avenue, N.W., Washington,
D.C., at a time to be mutually agreed upon; the date and time of the closing
are referred to in this Agreement as the "Closing Date."
4. Access to Corporate Records. Prior to or simultaneously with the
execution hereof, and again prior to or simultaneously with the Closing
hereunder, the Seller shall make available to Purchaser the following
documents, all of which
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the Seller represents and warrants to be true and accurate in all material
respects on the date hereof and shall represent and warrant to be true and
accurate in all material respects on the Closing Date:
A. The Articles of Incorporation of each Management Company as
well as any and all amendments thereto; the Bylaws of each Management Company,
as well as any and all amendments thereto; the up to date minute book, stock
records and stock transfer books of each Management Company; and up to date
copies of any employee profit-sharing, pension, retirement, bonus and other
benefit or welfare plans of each Management Company, if any; and copies of all
other corporate records of each Management Company;
B. Any books of account, payroll, social security and
withholding records of each Management Company;
C. Copies of any financial records of each Management Company;
D. A schedule of all of the liabilities of each Management
Company, if any, as of the month ending immediately prior to the execution
hereof and again as of the month immediately preceding the Closing Date;
provided, however, that in connection with any loans to each Management
Company, each Management Company also shall furnish a schedule which shall
include the name and address of each creditor, the amount due each creditor as
of the Closing Date and the nature of each liability and terms of repayment;
E. Copies of any of each Management Company's insurance
policies, and evidence showing that all such policies are current and in full
force
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and effect;
F. A Certificate of Good Standing (dated no later than thirty
days prior to the execution hereof or the Closing Date, as the case may be)
issued by the Delaware Secretary of State and each state in which either
Management Company is qualified to do business, with respect to the status of
such Management Company;
G. Copies of any outstanding promissory notes, mortgages,
deeds of trust, if any, and/or any other evidence of any secured or unsecured
debts, liabilities or obligations of each Management Company;
H. Copies of any other material contracts or agreements (other
than the Management Agreements) to which the Management Companies are parties;
I. Copies of any business licenses maintained by each
Management Company with respect to its business.
5. Representations and Warranties of Seller.
Seller represents and warrants to the Purchaser as of the date
hereof and as of the Closing Date as follows:
A. The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the Isle of Man.
B. The execution and delivery of this Agreement by the Seller
and the consummation of the transactions contemplated by this Agreement will
not violate any provisions of any agreement or the Articles of Association or
other
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documents governing the internal affairs of the Seller or result in the breach
of, or constitute default under, any lease or indenture, mortgage, note,
agreement or other agreement to which the Seller is a party or to which the
property of the Seller is subject.
C. All corporate actions required of the Seller for the
consummation of the transaction contemplated hereby have been taken. All
corporate reports and returns required to be filed by the Seller with the
jurisdiction in which it is incorporated have been filed, or are in the process
of being prepared for filing in a timely manner, and all of its minute books,
stock record books and related corporate records are substantially current and
complete.
D. Each Management Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
E. The authorized capital stock of CMRS consists of one
thousand (1,000) shares of common stock (with no par value) of which one
thousand (1,000) shares have been validly issued and are outstanding prior to
the execution hereof. There are no other classes of stock outstanding. All
outstanding shares of common stock of CMRS were, at the time of issuance
thereof, validly issued and are now fully-paid and non-assessable. There are
no outstanding options, warrants, contracts, commitments or agreements of any
kind relating to the capital stock of CMRS which might require the issuance by
CMRS of additional shares of its capital stock.
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F. The authorized capital stock of 800 consists of one
thousand (1,000) shares of common stock (with no par value) of which one
thousand (1,000) shares have been validly issued and are outstanding prior to
the execution hereof. There are no other classes of stock outstanding. All
outstanding shares of common stock of 800 were, at the time of issuance
thereof, validly issued and are now fully-paid and non-assessable. There are
no outstanding options, warrants, contracts, commitments or agreements of any
kind relating to the capital stock of 800 which might require the issuance by
800 of additional shares of its capital stock.
G. Seller owns of record and beneficially the number of shares
of common stock of each Management Company set forth in paragraphs E and F
hereof, all of which are owned by it free and clear of all liens, encumbrances,
options or adverse claims. The Seller has full power, capacity and authority
validly to sell, transfer and deliver the Shares to the Purchaser and to vest
in the Purchaser good and marketable title to the Shares, free and clear of all
liens, encumbrances, options or adverse claims and all corporate action
necessary to perform all obligations hereunder has been taken.
H. Each Management Company holds all licenses, certificates,
permits, franchises and rights from all appropriate federal, state or local
authorities, necessary or appropriate for the conduct of its business and each
Management Agreement is in full force and effect and there are no defaults by
either party thereunder.
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I. The financial records of each Management Company delivered
to the Company pursuant to paragraph 4 hereof (i) are in accordance with the
books and records of such Management Company, and (ii) have been prepared in
accordance with such Management Company's usual and customary accounting
practices.
J. Each Management Company is not, directly or indirectly,
liable upon or with respect to (by discount, repurchase agreement or
otherwise), or obligated in any way to provide funds in respect of, or to
guarantee or assume, any debt, obligation or dividend of any individual
corporation, association, partnership, joint venture or other entity, other
than a debt or obligation contracted by each Management Company. As of the
Closing Date, each Management Company has no liabilities of any nature, other
than as may be contained in the Management Agreements.
K. Neither Management Company owns any real property nor has
any bank accounts.
L. Each Management Company is not in default in the payment of
the rent due under any leases in which it is the lessee, and is not in default
in the performance or observance of any of the other material terms, covenants
or conditions to be kept, observed or performed by it under any of such leases.
M. Neither Management Company is a party to any written
express or implied (1) contract for the employment of any officer or individual
employee; (2) pension, profit-sharing, bonus, deferred compensation,
retirement, stock option,
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stock purchase or other benefit plan in effect with respect to employees or
others; or (3) other material contract not made in the ordinary and usual
course of business.
N. There are no investigations, actions, suits, proceedings or
claims pending or threatened against or affecting the Seller, either Management
Company, their respective properties or businesses or any of the licenses, at
law or in equity or before or by any federal, state, municipal or other
governmental department, commission, board, agency or instrumentality, domestic
or foreign. Neither Management Company is operating under or subject to, or in
default with respect to, any order, writ, injunction or decree of any court or
federal, state, municipal or other governmental agency or department,
commission, board agency or instrumentality, domestic or foreign.
O. Each Management Company has complied, in all material
respects, with all laws, ordinances, regulations and orders, including, without
limitation, all FCC Rules, applicable to its business and properties.
P. The Seller and each Management Company has filed, or is in
the process of preparing for filing, all federal, state and local income and
other tax returns, and all workmen's compensation and similar returns, required
to be filed, and has paid or made due provision for the payment of all taxes or
other amounts which may be required or due under any such return. Neither
Management Company is under audit for any open years by any federal, state or
local authority for any income tax or workmen's compensation liability with
respect to its
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business.
Q. Since the date of the latest financial statements of the
Management Companies furnished to the Purchaser there has been (1) no material
adverse change in the financial condition or in the operations of the business
of the Management Companies; (2) no material damage, destruction or loss not
reasonably expected to be covered by insurance affecting the business of each
Management Company; and (3) no material adverse changes in the business
organization or personnel of each Management Company.
R. The execution and delivery of this Agreement by the Seller
and the consummation of the transactions contemplated by this Agreement will
not violate any provisions of any shareholders' agreement or the Articles of
Incorporation or Bylaws of either Management Company or result in the breach
of, or constitute default under, any lease or indenture, mortgage, note,
agreement or other financing agreement to which either Management Company is a
party or to which the property of each Management Company is subject.
S. All corporate actions required of the each Management
Company for the consummation of the transaction contemplated hereby have been
taken. All corporate reports and returns required to be filed by each
Management Company with the jurisdiction in which it is incorporated have been
filed, or are in the process of being prepared for filing, and all of its
minute books, stock record books and related corporate records are
substantially current and complete.
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T. Neither Seller nor either Management Company has been
convicted of a felony and is not otherwise subject to a denial of federal
benefits, including FCC benefits, pursuant to Section 5301 of the Anti-Drug
Abuse Act of 1988, 21 U.S.C. 853a.
U. No filing with or approval or authorization of any
governmental authority or other third party is required for Seller to enter
into and to perform its obligations under this Agreement.
V. No representation or warranty made by Seller in this
Agreement contains any untrue statement of a material fact, or omits to state a
material fact necessary in order to make the statements contained therein not
misleading or necessary in order to provide a prospective purchaser of the
common stock of each Management Company with proper information regarding the
business and affairs of each Management Company.
6. Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to the Seller as of the date
hereof and as of the Closing Date as follows:
A. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado.
B. The execution and delivery of this Agreement by the
Purchaser and the consummation of the transactions contemplated by this
Agreement will not violate any provisions of any shareholders' agreement or the
Articles of Incorporation or Bylaws of the Purchaser or result in the breach
of, or constitute
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default under, any lease or indenture, mortgage, note, agreement or other
financing agreement to which the Purchaser is a party or to which the property
of the Purchaser is subject.
C. All corporate actions required of the Purchaser for the
consummation of the transaction contemplated hereby have been taken. All
corporate reports and returns required to be filed by the Purchaser with the
jurisdiction in which it is incorporated have been filed, or are in the process
of being prepared for filing, and all of its minute books, stock record books
and related corporate records are substantially current and complete.
D. No filing with or approval or authorization of any
governmental authority or other third party is required for the Purchaser to
enter into and to perform its obligations under this Agreement.
E. Purchaser has not been convicted of a felony and is not
otherwise subject to a denial of federal benefits, including FCC benefits,
pursuant to Section 5301 of the Anti-Drug Abuse Act of 1988, 21 U.S.C. 853a.
F. No representation or warranty made by the Purchaser in this
Agreement contains any untrue statement of a material fact, or omits to state a
material fact necessary in order to make the statements contained therein not
misleading or necessary in order to provide Seller, as a prospective purchaser
of common stock of Purchaser, with proper information regarding the business
and affairs of Purchaser.
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7. Compliance with FCC Rules. This Agreement may be subject to the
Act and the FCC Rules. The consummation of the transactions contemplated by
this Agreement shall be made, in all cases, in accordance with the Act and
the FCC Rules. If the consummation of the transactions contemplated by this
Agreement shall be held by the FCC or a court of competent jurisdiction to be
violative of the Act, the parties shall use their best efforts in good faith to
arrange for the consummation of those transactions (without any practical
alteration of the consideration to be received by either party) in a manner
consistent with the requirements of the Act.
8. Additional Undertakings of Seller With Respect To
Each Management Company.
Seller covenants to Purchaser that as sole shareholder of each
Management Company, it will elect directors of each Management Company who
shall take such action as may be necessary to assure that from the date of
this Agreement to the Closing Date, each Management Company shall: (1) conduct
no business except consistent with the terms and conditions of the Management
Agreements to which it is a party; (2) at its expense, maintain all of its
property in customary repair, order and condition, reasonable wear and tear and
damage by fire or other unavoidable casualty excepted; (3) maintain its books
of account and records in the ordinary and usual manner; (4) not amend its
Articles of Incorporation or Bylaws or merge or consolidate with or into any
other person or entity, change in any manner the rights of its common stock, or
change in any
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manner the character or its business; (5) not issue or grant any warrants or
stock options of any nature or issue any additional shares of its stock, or
declare any stock dividends on its shares of stock; and (6) not become a party
to any contract, agreement or other instrument without the prior written
consent of Purchaser.
9. Conditions Precedent to the Acquisition and
Sale Of the Shares.
A. The acquisition of the Shares by the Purchaser under this
Agreement is subject to the satisfaction, as of the Closing, of each of the
following conditions precedent, any of which may be waived, in whole or in
part, in writing by Purchaser at or prior to Closing:
(1) All of the representations and warranties made by the
Seller in this Agreement being true and correct with the same force and effect
as though such representations and warranties had been made on and as of such
date.
(2) The Seller and each Management Company performing all
covenants and obligations and complying with all conditions required by this
Agreement to be performed or complied with by any of them on or before the
Closing Date.
(3) The Seller and/or each Management Company delivering
to the Escrow Agent an Option and Stock Purchase Agreement in the form attached
hereto as Exhibit C, in each case, executed solely by the shareholder of each
Licensee, pursuant to which the shareholder of each Licensee grants to one of
the Management Companies the option to acquire the all of the stock of such
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Licensee pursuant to the terms and conditions contained therein.
B. The sale of the Shares by the Seller under this Agreement
is subject to the satisfaction, as of the Closing, of each of the following
conditions precedent, any of which may be waived, in whole or in part, in
writing by Seller at or prior to Closing:
(1) All of the representations and warranties made by the
Purchaser in this Agreement being true and correct with the same force and
effect as though such representations and warranties had been made on and as of
such date.
(2) The Purchaser performing all covenants and
obligations and complying with all conditions required by this Agreement to be
performed or complied with by it on or before the Closing Date.
(3) The Purchaser tendering the Purchase Price in the
form and manner described herein.
10. Documents to be Delivered at Closing. At or prior to Closing:
A. The Seller shall deliver the following:
(1) All of the documents required to be delivered to the
Purchaser pursuant to paragraph 4 hereof, to the Purchaser.
(2) One or more stock certificate representing the
Shares, of each Management Company, together with assignment documents
executed in blank for each certificate, to the Escrow Agent.
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(3) The Option and Stock Purchase Agreement in the form
attached hereto as Exhibit C, in each case, executed solely by the shareholder
of each Licensee, to the Escrow Agent.
(4) Releases, in the form attached hereto as Exhibit D,
from the Seller in favor of each Management Company.
B. The Purchaser shall deliver the following:
(1) That part of the Purchase Price set forth in paragraph
2.B.(1) to Seller.
(2) The Stock Option Agreement described in Exhibit B to
the Escrow Agent.
(3) That part of the Purchase Price set forth in paragraph
2.B.(3) to Seller.
11. Deliveries by Escrow Agent. At such time as the Shares are
transferred of record to Purchaser, Seller and Purchaser shall deliver proof
thereof to the Escrow Agent (or jointly advise Escrow Agent that such transfers
have occurred). Immediately upon receipt of such proof, Escrow Agent shall
release the Option and Stock Purchase Agreements to Purchaser and shall release
the Stock Option Agreement to Seller.
12. Duties of Escrow Agent.
A. The parties hereto agree that Escrow Agent's duties are
limited to the safekeeping of the Option and Stock Purchase Agreements and the
Stock Option Agreement. Escrow Agent shall not be liable for any act or
omission done
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in good faith or for any claim, demand, loss or damage made or suffered by a
party hereto, except as may arise from Escrow Agent's willful misconduct or
gross negligence.
B. The Seller and the Purchaser each shall indemnify, hold
harmless and defend Escrow Agent from and against any and all claims, losses,
liabilities, damages and expenses, including reasonable attorneys' fees, court
costs and litigation expenses arising out of Escrow Agent's duties hereunder,
except as may arise from Escrow Agent's willful misconduct or gross negligence.
The Seller and the Purchaser each shall also indemnify, hold harmless and
defend Escrow Agent from and against any and all claims, losses, liabilities,
damages and expense in the event this Agreement is held unenforceable or held
to be in violation of any law or reporting requirement or in violation of any
securities law.
C. If Escrow Agent receives any conflicting instructions or
demands from the parties, he is authorized to interplead the parties in a court
having competent jurisdiction and deposit the documents described in paragraph
A hereof, with that court. Upon such court's acceptance of jurisdiction, the
duties of the Escrow Agent under the Agreement shall terminate. Escrow Agent
shall not be deemed a party to this Agreement except to the extent Escrow Agent
is required to act under the terms of the escrow herein. Any reasonable fees
or expenses of Escrow Agent which relate to his responsibilities hereunder
shall be paid by one half by the Purchaser and one half by the Seller at such
time as the Escrow Agent shall demand.
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13. Indemnification.
A. Seller shall indemnify and hold harmless, absolutely,
unconditionally and forever, the Purchaser, its representatives, successors and
assigns forever from and against any and all damages resulting from any breach
of any warranty or representation contained herein and against any and all
demands, claims, actions or causes of action, assessments, losses or damages
("Claims") arising out of or resulting from or by reason of any claims,
obligations, debts, demands or liabilities existing against each Management
Company prior to and including the Closing Date and not disclosed in accordance
with this Agreement, including any schedule attached hereto, or thereafter
coming into being by reason of any state of facts existing prior to and
including the Closing Date and not disclosed to Purchaser in accordance with
this Agreement. The period of such indemnification shall be four (4) years
from the Closing Date. The indemnities contained in this paragraph shall
include reasonable expenses and attorneys' fees incurred by the Purchaser or
either Management Company in the handling or resolving of any matter set forth
in this paragraph. In the event of any matter for which relief under this
paragraph is sought, the Purchaser shall forthwith notify Seller in writing of
such matter and grant Seller a reasonable time within which to cure any such
matter at its own cost or expense. In addition, if the Purchaser receives or
has notice of any matter for which relief under this paragraph is sought the
Purchaser shall, within fifteen (15) days after obtaining knowledge thereof,
notify Seller of any such matter. A failure to give such notice shall not
negate a
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right to indemnification hereunder; provided, however, that the Purchaser shall
bear any amount of loss resulting directly from a failure to give a timely
notice. If such matter relates to a claim, assessment or demand asserted by a
third party (including without limitation any governmental agency or body)
against the Purchaser or either Management Company and if Seller acknowledges
its obligations to indemnify and hold harmless under this paragraph, Seller
shall have the right to employ such counsel as it desires to defend any such
claim, assessment or demand asserted against the Purchaser or either Management
Company. Purchaser shall have the right to participate in the defense of any
said claim, assessment or demand at its own cost and expense. So long as the
Seller is defending in good faith any such claim, assessment or demand, (i) the
Purchaser shall not settle such claim, assessment or demand and (ii) the Seller
shall notify Purchaser of any settlement offer, and (iii) any settlement of
such claim, assessment or demand made without the consent of the Seller, shall
not be subject to the indemnity under this paragraph.
B. The Purchaser shall indemnify and hold harmless,
absolutely, unconditionally and forever, the Seller, its representatives,
successors and assigns forever from and against any and all damages resulting
from any breach of any warranty or representation contained herein. The period
of such indemnification shall be four (4) years from the Closing Date. The
indemnities contained in this paragraph shall include reasonable expenses and
attorneys' fees incurred by the Seller in the handling or resolving of any
matter set forth in this paragraph. In the
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event of any matter for which relief under this paragraph is sought, the Seller
shall forthwith notify the Purchaser in writing of such matter and grant the
Purchaser a reasonable time within which to cure any such matter at its own
cost or expense. In addition, if the Seller receives or has notice of any
matter for which relief under this paragraph is sought, the Seller shall,
within fifteen (15) days after obtaining knowledge thereof, notify the
Purchaser of any such matter. A failure to give such notice shall not negate a
right to indemnification hereunder; provided, however, that the Purchaser shall
bear any amount of loss resulting directly from a failure to give a timely
notice. If such matter relates to a claim, assessment or demand asserted by a
third party (including without limitation any governmental agency or body)
against the Seller and if the Purchaser acknowledges its obligations to
indemnify and hold harmless under this paragraph, the Purchaser shall have the
right to employ such counsel as it desires to defend any such claim, assessment
or demand asserted against the Seller. The Seller shall have the right to
participate in the defense of any said claim, assessment or demand at his own
cost and expense. So long as the Purchaser is defending in good faith any such
claim, assessment or demand, (i) the Seller shall not settle such claim,
assessment or demand and (ii) the Purchaser shall notify the Seller of any
settlement offer, and (iii) any settlement of such claim, assessment or demand
made without the consent of the Purchaser, shall not be subject to the
indemnity under this paragraph.
C. The foregoing rights of indemnity are in addition to, and
not in limitation of, any rights which either party may have against the other
pursuant to the Stock Option
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Agreement attached hereto as Exhibit B.
14. Specific Performance. Seller, agrees that, in the event that
Seller fails to execute its obligations under this Agreement in good faith, due
to the unique nature of the subject matter of this Agreement, Purchaser would
be irreparably damaged, which damage could not be adequately compensated except
by specific performance of this Agreement. Purchaser shall therefore have the
right and remedy to have the provisions of this Agreement specifically enforced
by any court having jurisdiction. Purchaser's right to specific performance
does not preclude the exercise of any other rights and remedies available to
Purchaser.
15. Assignment. Neither Seller nor Purchaser shall have the right to
assign any or all of its respective rights hereunder.
16. Entire Agreement. This Agreement and the documents referred to
herein represent the entire agreement of the parties relating to the purchase
and sale of the Shares. All prior negotiations between the parties are merged
in this Agreement and there are no understandings or agreements other than
those incorporated herein. This Agreement may not be modified except by an
instrument in writing duly executed by the parties.
17. Survival of Representations and Warranties.
A. The representations, warranties and indemnities set forth
in this Agreement shall remain operative and shall survive the closing under
this Agreement.
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B. All terms of this Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective legal
representatives, successors and assigns.
18. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, sent by registered by certified mail, return receipt
requested, or by overnight carrier, properly addressed and postage prepaid or
by facsimile with a hard copy sent by overnight mail to the following
addresses, or to such other addresses as each party may designate from time to
time in writing to the party:
(i) if to the Seller, to:
c/o K. Steven Roberts, Attorney at Law
641 Fifth Avenue, 29th Floor
New York, N.Y. 10022
(ii) if to Purchaser to:
Chadmoore Wireless Group, Inc.
4720 Polaris Street
Las Vegas, Nevada 89104
Attention: Robert W. Moore, President
(iii) with a copy (which shall not constitute notice) to:
Marjorie Conner, Esquire
Keck, Mahin & Cate
1201 New York Avenue, N.W., PH
Washington, D.C. 20005
19. Expenses. All expenses incurred by or on behalf of any party
hereto in connection with the authorization, preparation, execution and
consummation of
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this Agreement and the sale and purchase of the Shares contemplated hereby,
including, without limitation of the generality of the foregoing, all fees and
expenses of representatives, counsel and accountants employed by any such
party, shall be borne solely and entirely by the party who or which has
incurred the same.
20. Responsibility for Brokers. Neither party will bear the cost of
or be responsible for the fees of any broker, consultant or advisor engaged by
the other party in connection with this transaction.
21. Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement and the performance of the
obligations imposed by this Agreement shall be governed by the internal laws of
the State of New York.
22. Jurisdiction; Appointment of Agent for Service of Process: Seller
hereby consents to the jurisdiction of the United States District Court for the
Southern District of New York for all matters arising hereunder and hereby
appoints K. Steven Roberts, Attorney at Law, 641 Fifth Avenue, 29th Floor, New
York, NY 10022 to receive service of process on its behalf, provided that a
copy of any complaint or other document filed in such court shall be sent to
Seller in the manner set forth in paragraph 18 at the time such document is
serviced on K. Steven Roberts. Seller hereby agrees to waive, to the extent
lawfully possible, any defense based on forum non conveniens or lack of
personal jurisdiction.
23. Confidentiality. The parties recognize the importance of
maintaining the confidentiality of this transaction. Accordingly, the parties
shall
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agree in writing on the form of any disclosure of the details of this
transaction to any third party. The parties agree that the foregoing shall not
apply to disclosures required by any law, rule, regulation or court order, or
any information which may have been disclosed to the public or third parties
prior to the date hereof.
24. Interpretation. Both parties have been actively represented by
counsel in connection with the preparation and negotiation of this Agreement.
This Agreement has been prepared and the negotiations in relation with this
Agreement have been carried on by the joint efforts of the parties hereto and
their respective counsel. This Agreement is to be construed fairly and simply
and not strictly for or against either of the parties hereto.
24. Counterparts. This Agreement is being executed simultaneously in
one or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
LIBERO LIMITED
By: /s/ K. Steven Roberts
-----------------------------------------
K. Steven Roberts
Its: Attorney in fact
ATTEST: CHADMOORE WIRELESS GROUP, INC.
/s/ William C. Bossung By: /s/ Robert W. Moore
- -------------------------------- -----------------------------------------
William C. Bossung Robert W. Moore
Secretary President
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