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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO.1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 28, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF
1934
FOR THE TRANSITION PERIOD FROM _________ TO _________
COMMISSION FILE NUMBER 0-19903
METRICOM, INC.
(A DELAWARE CORPORATION)
I.R.S. EMPLOYER IDENTIFICATION #77-0294597
980 UNIVERSITY AVENUE
LOS GATOS, CA 95030-2375
(408) 399-8200
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO ___
THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF AUGUST 2, 1996 WAS
13,461,824.
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TABLE OF CONTENTS
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................................ 3
Signature Page.......................................................................... 4
Exhibit Index........................................................................... 5
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PART II. OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
10.27* Option Agreement and Agreement and Plan of Reorganization, dated as
of February 7, 1996, among the Company, Overall Wireless
Communications Corporation and the sole stockholder of Overall
Wireless.
10.28* Loan and Security Agreement, dated as of February 7, 1996, among the
Company, Overall Wireless Communications Corporation and the sole
stockholder of Overall Wireless.
27.00 Financial Data Schedule.
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* Confidential treatment has been requested for certain portions of this
exhibit. The confidential portions have been marked with an asterisk and
have been filed separately with the Commission.
b. Reports on Form 8-K
1. Form 8-K filed on June 6, 1996, regarding a proposed private
placement of up to $75 million principal amount of convertible
subordinated notes.
2. Form 8-K filed on June 20, 1996, regarding the Company's plans to
discontinue a proposed private placement of up to $75 million
principal amount of convertible subordinated notes.
3
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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 thereunto duly authorized.
METRICOM, INC.
(Registrant)
/s/ WILLIAM D. SWAIN
--------------------------------------
By: William D. Swain
Chief Financial Officer, Secretary
and Duly Authorized Officer
Date: December 5, 1996
4
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EXHIBIT INDEX
10.27* Option Agreement and Agreement and Plan of Reorganization, dated as of
February 7, 1996, among the Company, Overall Wireless Communications
Corporation and the Sole Stockholder of Overall Wireless.
10.28* Loan and Security Agreement, dated as of February 7, 1996, among the
Company, Overall Wireless Communications Corporation and the sole
stockholder of Overall Wireless.
27.00 Financial Data Schedule.
* Confidential treatment has been requested for certain portions of this
exhibit. The confidential portions have been marked with an asterisk and
have been filed separately with the Commission.
5
<PAGE> 1
EXHIBIT 10.27
OPTION AGREEMENT
AND
AGREEMENT AND PLAN OF REORGANIZATION
THIS OPTION AGREEMENT AND AGREEMENT AND PLAN OF REORGANIZATION (this
"Agreement") is made as of February 7, 1996 among METRICOM, INC., a Delaware
corporation ("Metricom"), OVERALL WIRELESS COMMUNICATIONS CORPORATION, an
Oklahoma corporation ("Overall Wireless"), and Jean Warren, the sole stockholder
of Overall Wireless ("Stockholder").
RECITALS
A. Overall Wireless is the holder of a Nationwide Commercial
license issued by the Federal Communications Commission (the "FCC"), assigned
the call sign WPCU 518, covering five 5-KHz channel pairs in the 220-222 MHz
frequency band for a total of 50 KHz of spectrum (the "FCC License").
B. Metricom desires to purchase an option to acquire Overall
Wireless, and Overall Wireless and Stockholder wish to sell such option to
Metricom, on the terms and subject to the conditions contained in this
Agreement.
C. The parties intend to effect such acquisition upon exercise of
such option through a merger (the "Merger") of Overall Wireless into a
wholly-owned subsidiary of Metricom ("Sub") in accordance with this Agreement,
the rules and regulations of the FCC and the laws of the State of Delaware and
the State of Oklahoma, or such state law as will be applicable to Overall
Wireless or its successor upon the date of the Merger (collectively, the
"Applicable Laws"). Upon consummation of the Merger, Overall Wireless will merge
into Sub, and Sub will remain a wholly-owned subsidiary of Metricom.
D. It is intended that the Merger qualify as a tax-free
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code").
AGREEMENT
The parties to this Agreement agree as follows:
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
<PAGE> 2
1. PURCHASE AND SALE OF OPTION.
1.1 OPTION.
(a) Metricom is hereby granted the option (the "Option") to
acquire 100% ownership of all outstanding equity securities of Overall Wireless
through the Merger, exercisable at any time after Forty Percent Completion (as
defined in Section 5.1(b)(2)) is achieved but not later than January 1, 1997 (or
such later date as may be determined pursuant to Section 1.4).
(b) Metricom will exercise the Option by giving Overall Wireless
and Stockholder written notice of its intent to exercise (the "Notice"). Within
ten days after delivery of the Notice, Overall Wireless will deliver a revised
Disclosure Schedule (as defined in Section 3) to Metricom. In the event such
Disclosure Schedule contains exceptions to the representations and warranties
contained in Section 3 of this Agreement that, in Metricom's reasonable
judgment, represent material adverse differences from the state of Overall
Wireless' business, financial condition, assets, liabilities, operations or
prospects (or in any aspect or portion thereof) from Metricom's knowledge
thereof upon Metricom's exercise of the Option, Metricom may rescind the Notice
by delivering written notice to Overall Wireless and the Stockholder within ten
days after delivery of the Disclosure Schedule. If the Option is exercised and
such exercise is not rescinded, the parties will consummate the Merger within
[*] after all of the conditions contained in Sections 6 and 7, including,
without limitation, FCC approval of the Merger, have been fulfilled or waived,
provided that this Agreement has not been terminated in accordance with the
provisions of Section 8 hereof.
1.2 OPTION PURCHASE PRICE. As consideration for the Option,
Metricom will deliver $700,000 in cash to Stockholder upon the execution of this
Agreement.
1.3 FURTHER ASSURANCES. Except as otherwise provided for herein,
(a) Stockholder will vote, if Metricom exercises and does not rescind its
exercise of the Option, all of her voting securities of Overall Wireless in
favor of the Merger, and against any proposal made in opposition to the
Agreement or the transactions contemplated thereby; (b) Stockholder will not
transfer, sell, exchange, pledge (other than pursuant to the Stock Pledge
Agreement (as defined in Section 5.1(b)(3)), offer or otherwise dispose of or
encumber any of her Overall Wireless securities, or make any offer or agreement
relating thereto, except through the Merger; and (c) Overall Wireless will not
permit any transfer or issuance of Overall Wireless securities. Promptly after
the achievement of Forty Percent Completion and the adoption of the Proposed FCC
Rule Changes (as defined below), the parties will complete and file with the FCC
an application for assignment or transfer of control of the FCC License by or
from Overall Wireless to Metricom.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
2.
<PAGE> 3
1.4 OPTION EXTENSION/TERMINATION.
(a) If on January 1, 1997 [*], Metricom may extend the
Option exercise deadline to July 1, 1997 by delivering a written notice of
extension and $500,000 in cash to Stockholder in exchange for such extension.
Notwithstanding the foregoing, if Overall Wireless or Stockholder has committed
any material Breach, the Option exercise deadline will automatically extend to
the later of (1) July 1, 1997; and (2) such time as the Breach has been cured,
without any payment or further action by Metricom. For the purposes of this
Agreement, "Breach" means any inaccuracy in or breach of, or any failure to
comply with or perform, a representation, warrant, covenant, obligation or other
provision of this Agreement.
(b) If on January 1, 1997 [*], then Metricom may either:
(1) extend the Option term as set forth in
Section 1.4(a); or
(2) terminate the Option by delivering notice
thereof to Overall Wireless and Stockholder, in which case Stockholder will
immediately refund $350,000 of the Option purchase price to Metricom.
(c) If the Option expires, other than through Metricom's
exercise of its rights under Section 1.4(b)(2), this Agreement will terminate,
subject to the provisions of Section 8.3.
2. MERGER.
2.1 MERGER OF OVERALL WIRELESS INTO SUB. On the terms and subject
to the conditions contained in this Agreement, at the Effective Time (as defined
in Section 2.3), Overall Wireless will be merged into Sub and the separate
existence of Overall Wireless will cease. Sub will be the surviving corporation
in the Merger (the "Surviving Corporation").
2.2 EFFECT OF THE MERGER. The Merger will have the effects set
forth in this Agreement and in the Applicable Laws.
2.3 CLOSING; EFFECTIVE TIME. The consummation of the Merger (the
"Closing") will take place at the offices of Cooley Godward Castro Huddleson &
Tatum, One Maritime Plaza, 20th Floor, San Francisco, California on the fifth
calendar day following the date as of which each of the conditions set forth in
Sections 6 and 7 has been fulfilled or waived or on such other date as may be
jointly designated by Metricom and Overall Wireless (the "Closing Date"). As
soon as practicable after the Closing, a properly executed certificate of merger
in substantially the form attached hereto as EXHIBIT A-1 and conforming to the
requirements of the Applicable Laws (the "Certificate of Merger") will be filed
in accordance with the Applicable Laws, at which time the Merger will become
effective (the "Effective Time").
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
3.
<PAGE> 4
2.4 CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS AND
OFFICERS. Unless otherwise determined by Metricom prior to the Effective Time,
(a) the Certificate of Incorporation of the Surviving Corporation will be
amended and restated as of the Effective Time to conform to the Certificate of
Incorporation of Sub; (b) the Bylaws of the Surviving Corporation will be the
Bylaws of Sub as in effect immediately prior to the Effective Time; (c) the
directors of the Surviving Corporation immediately after the Effective Time will
be Robert P. Dilworth, William D. Swain and Gary M. Green; and (d) the officers
of the Surviving Corporation will be Robert P. Dilworth (President and Chief
Executive Officer), William D. Swain (Chief Financial Officer and Secretary) and
Gary M. Green (Executive Vice President and Chief Operating Officer).
2.5 CONVERSION OF SHARES.
(a) At the Effective Time, by virtue of the Merger and
without any action on the part of any party to this Agreement, each
outstanding share of Common Stock, $1.00 par value, of Overall Wireless
("Overall Wireless Common Stock") outstanding immediately prior to the
Effective Time will be converted into the right to receive, subject to any
decreases called for by Section 2.5(b), (1) cash in an amount equal to [*]
divided by the number of shares of Overall Wireless Common Stock outstanding
immediately prior to the Effective Time; and (2) that number of shares of
Common Stock, $0.001 par value, of Metricom ("Metricom Common Stock") equal to
the Conversion Number (as defined below). The "Conversion Number" will be
determined by dividing [*] by the product of Metricom Average Price (as defined
below) and the number of shares of Overall Wireless Common Stock outstanding
immediately prior to the Effective Time, and then rounding the resulting
quotient to three decimal places. The "Metricom Average Price" means [*].
(b) To the extent liabilities of Overall Wireless at the
Effective Time exceed those incurred in constructing, maintaining and
operating the system of base stations and associated mobile stations
contemplated by Section 5.1 to the extent required to keep the FCC License
valid and in good standing, then the cash amount set forth in clause (1) of
Section 2.5(a) will be reduced by the amount of such liabilities. If the
aggregate amount of such liabilities exceeds such cash amount, the [*] amount
set forth in clause (2) of Section 2.5(a) will be reduced by the remaining
amount of such liabilities.
(c) The fraction of a share of Metricom Common Stock into
which each outstanding share of Company Common Stock is to be converted pursuant
to clause (2) of Section 2.5(a) (as such fraction may be adjusted in accordance
with this Section 2.5(c)) is referred to as the "Exchange Ratio." If at any time
prior to the Closing Date, the outstanding shares of Metricom Common Stock are
changed into a different number or class of shares by reason of any stock
dividend, subdivision, reclassification, recapitalization, split-up, combination
or similar transaction, (1) the dollar amounts in the last clause of Section
2.5(a) will be
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
4.
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appropriately adjusted, and (2) to the extent any such change occurs during the
15 consecutive days ending with the day immediately preceding the Closing Date,
the Exchange Ratio will be appropriately adjusted.
2.6 CLOSING OF OVERALL WIRELESS' TRANSFER BOOKS. At the Effective
Time, Stockholder and any other holders of certificates representing shares of
Overall Wireless Common Stock will cease to have any rights as stockholders of
Overall Wireless, and the stock transfer books of Overall Wireless will be
closed with respect to all shares of Overall Wireless Common Stock outstanding
immediately prior to the Effective Time. No further transfer of any such shares
of Overall Wireless Common Stock will thereafter be made on such stock transfer
books. If, after the Effective Time, a valid certificate previously representing
any of such shares of Overall Wireless Common Stock (an "Overall Wireless Common
Stock Certificate") is presented to Metricom, such Overall Wireless Common Stock
Certificate will be canceled and exchanged as provided in Section 2.7.
2.7 EXCHANGE OF CERTIFICATES.
(a) As soon as practicable after the Effective Time,
Metricom will deliver to the holders of Overall Wireless Common Stock
Certificates (1) a letter of transmittal in customary form and containing such
provisions as Metricom may reasonably specify and (2) instructions for use in
effecting the surrender of Overall Wireless Common Stock Certificates in
exchange for certificates representing Metricom Common Stock. Upon surrender of
a Overall Wireless Common Stock Certificate to Metricom for exchange, together
with a duly executed letter of transmittal and such other documents as may be
reasonably required by Metricom, the holder of such Overall Wireless Common
Stock Certificate will be entitled to receive in exchange therefor cash and a
certificate representing the number of whole shares of Metricom Common Stock
that such holder has the right to receive pursuant to the provisions of this
Section 2, and the Overall Wireless Common Stock Certificate so surrendered will
be canceled. Until surrendered as contemplated by this Section 2.7, each Overall
Wireless Common Stock Certificate will be deemed, from and after the Effective
Time, to represent only the right to receive upon such surrender cash and a
certificate representing shares of Metricom Common Stock (and cash in lieu of
any fractional share of Metricom Common Stock) as contemplated by this Section
2.
(b) No dividends or other distributions declared or made
with respect to Metricom Common Stock with a record date after the Effective
Time will be paid to the holder of any unsurrendered Overall Wireless Common
Stock Certificate with respect to the shares of Metricom Common Stock
represented thereby, and no cash payment in lieu of any fractional share will be
paid to any such holder, until such holder surrenders such Overall Wireless
Common Stock Certificate in accordance with this Section 2.7 (at which time such
holder will
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
5.
<PAGE> 6
be entitled to receive all such dividends and distributions and such cash
payment) without interest.
(c) No certificates or scrip for fractional shares of
Metricom Common Stock will be issued, but in lieu thereof each holder of shares
of Overall Wireless Common Stock who would otherwise be entitled to receive a
certificate or scrip for a fraction of a share of Metricom Common Stock will
receive from Metricom a cash amount equal to the product of the Metricom Average
Price and the fraction of a share of Metricom Common Stock to which such holder
would otherwise be entitled.
2.8 ADDITIONAL PAYMENT.
(a) If the FCC License or the stock or
other equity interest of its holder while under Metricom's control is sold for
consideration attributable to the FCC License greater than the Acquisition
Consideration (as defined below) in total consideration (valued as set forth in
Section 2.8(b), "Appraised Value") at any time prior to December 31, 1999,
Metricom will, upon the determination of the Appraised Value, pay to each person
or entity who held Overall Wireless Common Stock immediately prior to the
Effective Time cash (the "Additional Payment") in an amount equal to the product
of:
[*]
As used in this Section 2.8, "Acquisition Consideration"
means the sum of (A) [*], (B) any amount paid to extend the term of the Option
pursuant to Section 1.4, (C) the difference between the amount paid to the
holders of Overall Wireless Common Stock pursuant to Clause (1) of Section
2.5(a) and [*], and (D) interest at the annual rate of [*] on the sum of (A),
(B) and (C) above from the Closing Date until the date of sale.
(b) Metricom will give Stockholder notice of the
disposition of the FCC License (the "Appraisal Notice") within 20 days after
the closing of the transaction. The Appraisal Notice will describe the
transaction in reasonable detail and set forth Metricom's estimate of the
Appraised Value. The Appraised Value may be established by written agreement
signed by Metricom and persons who held greater than 50% of the Overall
Wireless Common Stock outstanding immediately prior to the Effective Time. If
such agreement is not reached, then three independent third-party appraisers
will be selected for the purpose of determining the Appraised Value. The first
appraiser will be appointed by Metricom within 30 days after delivery of the
Appraisal Notice. The second appraiser will be appointed by persons who held
greater than 50% of the Overall Wireless Common Stock outstanding immediately
prior to the Effective Time within 30 days after delivery of the Appraisal
Notice. The third appraiser will be appointed by the first two appraisers
within ten days after the first two appraisers have been appointed. If either
side fails to appoint an independent third-party appraiser within the required
period, then the Appraised Value will be determined solely by the independent
third-party appraiser appointed by the other side. Within 30 days of their
selection, the appraisers will each determine the fair market value of the
consideration received by Metricom for the FCC License only. The Appraised
Value will be the average of the two appraisals closest in dollar amount. All
fees and expenses of the appraisers will be shared equally by Metricom and the
former holders of Overall Wireless Common Stock entitled to a payment under
Section 2.8(a).
(c) If the tax basis of the FCC License, the stock of
Sub or any other asset of Metricom or its subsidiaries increased as a result of
the Additional Payment, the Applicable Percentage will be [*]. If not, the
Applicable Percentage will be [*].
(d) This Section 2.8 will be of no force and effect if
the FCC License is sold as part of a "business" (whether or not in subsidiary
form) meeting the conditions for a "significant subsidiary" of Metricom within
the meaning of Rule 1-02 of Regulation S-X under the Securities Act.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
6.
<PAGE> 7
2.9 FEDERAL INCOME TAX CONSEQUENCES. For federal income
tax purposes, the Merger is intended to constitute a tax-free reorganization
within the meaning of Section 368(a) of the Code. Neither Overall Wireless nor
Metricom will take a position inconsistent with this Section 2.9 on any tax
return.
2.10 ACCOUNTING CONSEQUENCES. For accounting purposes, the
Merger is intended to be treated as a "purchase."
2.11 FURTHER ACTION. If at any time after the Effective
Time any further action is determined by Metricom to be necessary to carry out
the purposes of this Agreement or to vest the Surviving Corporation with the
full right, title and possession of and to all assets, property, rights,
privileges, immunities, powers and franchises of Sub and Overall Wireless, the
officers and directors of the Surviving Corporation will be fully authorized (in
the name of Sub, in the name of Overall Wireless and otherwise) to take such
action.
2.12 STRUCTURE OF MERGER. In the event Overall Wireless
ceases to be a validly existing S Corporation (as defined in Section 3.1) prior
to the Effective Time, Metricom may, at its option, restructure the acquisition
into a merger of Sub into Overall Wireless. In such event, at the Effective
Time, (a) Sub will be merged into Overall Wireless and the separate existence of
Sub will cease; (b) Overall Wireless will be the Surviving Corporation; and (c)
the Certificate of Merger will be in substantially the form attached hereto as
EXHIBIT A-2. If the acquisition is restructured as set forth in this Section
2.12, the parties understand that the Merger will not be a tax-free
reorganization within the meaning of Section 368(a) of the Code.
3. REPRESENTATIONS AND WARRANTIES OF OVERALL WIRELESS AND STOCKHOLDER.
Except as set forth on the Schedule of Exceptions attached hereto as
EXHIBIT B, Overall Wireless and Stockholder, jointly and severally, hereby
represent and warrant to Metricom as follows:
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
7.
<PAGE> 8
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Overall
Wireless is a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation. Overall Wireless has all requisite
corporate power and authority to own and operate its properties and assets, to
execute and deliver this Agreement and the Certificate of Merger and to carry
out the provisions of this Agreement and the Certificate of Merger and to carry
on its business as presently conducted and as presently proposed to be
conducted. Overall Wireless is duly qualified and is authorized to do business
and is in good standing as a foreign corporation in all jurisdictions in which
the nature of its activities and of its properties (both owned and leased) makes
such qualification necessary, except for those jurisdictions in which failure to
do so would not have a Material Adverse Effect (as defined below) on Overall
Wireless. Overall Wireless owns no equity securities of any other corporation,
limited partnership or similar entity. Overall Wireless is not a participant in
any joint venture, partnership or similar arrangement. Overall Wireless is and
has been since inception a validly existing "subchapter S" corporation for
federal income tax purposes and under analogous provisions, to the extent they
exist, of the laws of each state in which Overall Wireless has qualified to do
business or is required to qualify to do business (an "S Corporation"). As used
in this Agreement, the term "Material Adverse Effect" means a material adverse
effect on the affected party's business, financial condition, assets,
liabilities or operations.
3.2 CAPITALIZATION; VOTING RIGHTS. The authorized capital stock of
Overall Wireless consists of 50,000 shares of Common Stock, 100 shares of which
are issued and outstanding. All issued and outstanding shares of Overall
Wireless' Common Stock (a) have been duly authorized and validly issued to, and
are currently owned beneficially and of record, subject to no mortgage, pledge,
lien, encumbrance or charge, by Stockholder; (b) are fully paid and
nonassessable; and (c) were issued in compliance with all applicable state and
federal laws concerning the issuance of securities. Except as set forth in this
Agreement, there are no outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal), proxy or
stockholder agreements, or agreements of any kind for the purchase or
acquisition from Overall Wireless or Stockholder of any of Overall Wireless'
securities.
3.3 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on
the part of Overall Wireless, its officers, directors and stockholders necessary
for the authorization of this Agreement and the Certificate of Merger, the
performance of all obligations of Overall Wireless thereunder and the
authorization of the Merger has been taken. This Agreement is a valid and
binding obligation of Overall Wireless and Stockholder, enforceable in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights; (b) as limited by general principles
of equity that restrict the availability of equitable remedies; and (c) as the
indemnification provisions of Sections 5.9 and 9 of this Agreement may be
limited by applicable law.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
8.
<PAGE> 9
3.4 FCC COMPLIANCE; LICENSE OWNERSHIP. The FCC License was
originally issued to Stockholder on July 29, 1993, and was validly assigned to
Overall Wireless on July 13, 1994. The Application (as defined in Section
5.1(a)) and all amendments thereto, and the application to assign the FCC
License to Overall Wireless and all amendments thereto, complied in all respects
with all applicable FCC rules and regulations. All applicable periods relating
to FCC reconsideration of the issuance of the FCC License and assignment of the
FCC License to Overall Wireless have expired. Overall Wireless currently holds
the FCC License, subject to no mortgage, pledge, lien, encumbrance or charge.
The FCC License has not been impaired by any act or omission of Stockholder or
Overall Wireless or any of their employees, representatives or agents. The FCC
has not imposed any conditions on Stockholder or Overall Wireless on the use of
the FCC License that is not contained on the face thereof or in the FCC rules
and regulations. There has been no actual or, to the best of Overall Wireless'
and Stockholder's knowledge, threatened action by or before the FCC to revoke,
cancel, rescind or modify the FCC License in any manner. Neither Stockholder nor
Overall Wireless has received any notice of liability, forfeiture or complaint
against the FCC License with respect to any actions taken by either of them
under authority of, or in connection with, the FCC License. Stockholder and
Overall Wireless have complied and are in compliance with all FCC rules and
regulations governing the FCC License and ownership and operation of the
facilities described in the FCC License. Stockholder and Overall Wireless have
filed with the FCC all statements, reports and information required by
applicable FCC rules and regulations. Stockholder and Overall Wireless know of
no facts that could cause the FCC to deny its consent to the assignment of the
FCC License to Metricom as contemplated in this Agreement.
3.5 FINANCIAL STATEMENTS. Overall Wireless has delivered to
Metricom its unaudited balance sheet as at December 31, 1995 (the "Statement
Date") and unaudited statement of income for the year then ended (collectively,
the "Financial Statements"). The Financial Statements are complete and correct
in all material respects, have been prepared in accordance with accounting
principles applied on a consistent basis throughout the periods indicated and
present fairly the financial condition and position and results of operations of
Overall Wireless as of the Statement Date and for the year then ended.
3.6 LIABILITIES. Overall Wireless has no material liabilities and,
to the best of Overall Wireless' and Stockholder's knowledge, no material
contingent liabilities, not disclosed in the Financial Statements, except
liabilities incurred in the ordinary course of business subsequent to the
Statement Date that have not been, either in any case or in the aggregate,
material.
3.7 AGREEMENTS; ACTION. Except for obligations relating to
construction and operation of facilities for the FCC License or otherwise
expressly contemplated by this Agreement:
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
9.
<PAGE> 10
(a) There are no agreements, understandings,
instruments, contracts, proposed transactions, judgments, orders, writs or
decrees to which Overall Wireless is a party or by which it is bound that may
involve (1) obligations (contingent or otherwise) of, or payments to, Overall
Wireless in excess of [*], (2) the license of any patent, copyright, trade
secret or other proprietary right to or from Overall Wireless (other than
licenses arising from the purchase of "off the shelf" or other standard
products), (3) provisions restricting or affecting the activities described in
Section 5.1(a), or (4) indemnification by Overall Wireless with respect to
infringements of proprietary rights (other than indemnification obligations
arising from purchase or sale agreements entered into in the ordinary course of
business);
(b) Overall Wireless has not (1) incurred any
indebtedness for money borrowed or any other liabilities individually in excess
of [*] or, in the case of indebtedness and/or liabilities individually less
than [*], in excess of [*] in the aggregate, (2) made any loans or advances to
any person, other than ordinary advances for travel expenses, or (3) sold,
exchanged or otherwise disposed of any of its assets or rights; and
(c) For the purposes of subsections (a) and (b) above,
all indebtedness, liabilities, agreements, understandings, instruments,
contracts and proposed transactions involving the same person or entity
(including persons or entities Overall Wireless has reason to believe are
affiliated therewith) will be aggregated for the purpose of meeting the
individual minimum dollar amounts of such subsections.
3.8 CHANGES. Since the Statement Date, other than obligations
relating to construction and operation of facilities for the FCC License or
otherwise expressly contemplated by this Agreement, there has not been:
(a) Any change in the assets, liabilities, financial
condition or operations of Overall Wireless from that reflected in the Financial
Statements that individually or in the aggregate has had or is expected to have
a Material Adverse Effect;
(b) Any material change in the contingent obligations of
Overall Wireless by way of guaranty, endorsement, indemnity, warranty or
otherwise;
(c) Any damage, destruction or loss, whether or not
covered by insurance, that has had or is expected to have a Material Adverse
Effect;
(d) Any waiver by Overall Wireless of a valuable right or
of a material debt owed to it;
(e) Any change in any agreement to which Overall Wireless
is a party or by which it is bound that has had or is expected to have a
Material Adverse Effect; or
______________________
* Confidential treatment has been requested for portions of this
document marked with an asterisk pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934, as amended. These
portions have been filed separately with the commission.
10.
<PAGE> 11
(f) Any other event or condition of any character that
individually or in the aggregate has had or is expected to have a Material
Adverse Effect.
3.9 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. Overall Wireless
has good and marketable title to its properties and assets, including the
properties and assets reflected in the balance sheet included in the Financial
Statements, in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than (a) those resulting from taxes that have not
yet become delinquent, (b) purchase money liens and other minor liens and
encumbrances that do not materially detract from the value of the property
subject thereto or materially impair the operations of Overall Wireless and (c)
those to which Metricom has consented in writing. All facilities, machinery,
equipment, fixtures, vehicles and other properties owned, leased or used by
Overall Wireless are in good operating condition and repair and are reasonably
fit and usable for the purposes for which they are being used.
3.10 PATENTS AND TRADEMARKS. Overall Wireless does not own or
possess any legal rights to any patents, trademarks, service marks, trade names,
copyrights, trade secrets, information and other proprietary rights and
processes, and none of such rights are necessary for the conduct of its business
without any known infringement of the rights of others. There are no outstanding
options, licenses or agreements of any kind relating to the foregoing, nor is
Overall Wireless bound by or a party to any options, licenses or agreements of
any kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary rights
and processes of any other person or entity other than such licenses or
agreements arising from the purchase of "off the shelf" or standard products.
Overall Wireless has not received any communications alleging that Overall
Wireless has violated, or by conducting its business would violate, any of the
patents, trademarks, service marks, trade names, copyrights or trade secrets or
other proprietary rights of any other person or entity.
3.11 COMPLIANCE WITH OTHER INSTRUMENTS. Overall Wireless is not in
violation or default of any term of its certificate of incorporation or bylaws,
or of any provision of any mortgage, indenture, contract, agreement, instrument
or contract to which it is party or by which it is bound or of any judgment,
decree, order, writ or, to the best of Overall Wireless' or Stockholder's
knowledge, any statute, rule or regulation applicable to Overall Wireless that
would have a Material Adverse Effect. The execution, delivery, and performance
of and compliance with this Agreement and the Certificate of Merger, and
completion of the Merger, will not, with or without the passage of time or
giving of notice, result in any such material violation, or be in conflict with
or constitute a default under any such term, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of Overall Wireless or the suspension, revocation, impairment, forfeiture
or nonrenewal of any permit, license, authorization or approval applicable to
Overall Wireless, its business or operations or any of its assets or properties.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
11.
<PAGE> 12
3.12 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the best of Overall Wireless' or Stockholder's
knowledge, currently threatened against Overall Wireless or Stockholder (a) that
questions the validity of this Agreement or the Certificate of Merger, the right
of Overall Wireless or Stockholder to enter into this Agreement or to consummate
the transactions contemplated hereby, or (b) that might result, either
individually or in the aggregate, in a Material Adverse Effect, or any change in
the current equity ownership of Overall Wireless, nor is Overall Wireless or
Stockholder aware that there is any basis for the foregoing. Overall Wireless is
not a party or subject to the provisions of any adverse order, writ, injunction,
judgment or decree of any court or government agency or instrumentality. There
is no action, suit, proceeding or investigation by Overall Wireless currently
pending or that Overall Wireless intends to initiate.
3.13 TAX RETURNS AND PAYMENTS. Overall Wireless has timely filed
all tax returns (federal, state and local) required to be filed by it. All taxes
shown to be due and payable on such returns, any assessments imposed, and, to
the best of Overall Wireless' and Stockholder's knowledge, all other taxes due
and payable by Overall Wireless on or before the Closing have been paid or will
be paid prior to the time they become delinquent. Neither Overall Wireless nor
Stockholder has been advised (a) that any of Overall Wireless' returns, federal,
state or other, have been or are being audited as of the date hereof, or (b) of
any deficiency in assessment or proposed judgment to Overall Wireless' federal,
state or other taxes. Neither Overall Wireless nor Stockholder has knowledge of
any liability of any tax to be imposed upon Overall Wireless' properties or
assets as of the date of this Agreement that is not adequately provided for.
3.14 [*]
3.15 COMPLIANCE WITH LAWS; PERMITS. To the best of Overall
Wireless' and Stockholder's knowledge, Overall Wireless is not in violation of
any applicable statute, rule, regulation, order or restriction of any domestic
or foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties which violation would
have a Material Adverse Effect. No governmental orders, permissions, consents,
approvals or authorizations are required to be obtained and no registrations or
declarations are required to be filed in connection with the execution and
delivery of this Agreement and the Certificate of Merger and the completion of
the Merger, except such as has been duly and validly obtained or filed, or with
respect to any filings that must be made after the execution of this Agreement,
as will be filed in a timely manner. Overall Wireless has all franchises,
permits, licenses and any similar authority necessary for the conduct of its
business as now being conducted by it, the lack of which could have a Material
Adverse Effect and Overall Wireless and Stockholder believe that Overall
Wireless can obtain, without undue burden or expense, any similar authority for
the conduct of its business as planned to be conducted.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
12.
<PAGE> 13
3.16 ENVIRONMENTAL AND SAFETY LAWS. To the best of Overall
Wireless' and Stockholder's knowledge, Overall Wireless is not in violation of
any applicable statute, law or regulation relating to the environment or
occupational health and safety, and no material expenditures are or will be
required in order to comply with any such existing statute, law or regulation.
3.17 INSURANCE. Overall Wireless has fire and casualty insurance
policies with coverage customary for companies similarly situated to Overall
Wireless.
3.18 OFFERING VALID. Assuming the accuracy of the representations
and warranties of Metricom contained in Section 4, the offer, sale and issuance
of the Option will be exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act") and will have been
registered or qualified (or exempt from registration and qualification) under
the registration, permit or qualification requirements of all applicable state
securities laws.
3.19 INVESTMENT REPRESENTATIONS.
(a) Stockholder understands that she must bear the
economic risk of this investment indefinitely unless the shares of Metricom
Common Stock issued in the Merger (the "Metricom Shares") are registered
pursuant to the Securities Act, or an exemption from registration is available.
Stockholder also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow Stockholder to transfer all or any
portion of the Metricom Shares under the circumstances or at the times
Stockholder might propose.
(b) Stockholder is acquiring the Metricom Shares for her
own account for investment only, and not with a view towards their distribution.
(c) By reason of her business or financial experience,
Stockholder has the capacity to protect her own interests in connection with the
transactions contemplated in this Agreement.
(d) Stockholder is an accredited investor within the
meaning of Regulation D under the Securities Act.
(e) Stockholder has received and read Metricom's Annual
Report on Form 10- K for the year ended December 31, 1994 and Quarterly Reports
on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and September
30, 1995, each as filed with the Securities and Exchange Commission (the "SEC").
In addition, Stockholder has had an opportunity to review Metricom's press
release dated January 30, 1996 with respect to its unaudited financial
statements as of and for the year ended December 31, 1995 and discuss Metricom's
business,
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
13.
<PAGE> 14
management and financial affairs with directors, officers and management of
Metricom. Stockholder has also had the opportunity to ask questions of and
receive answers from, Metricom and its management regarding the terms and
conditions of this investment.
(f) The Metricom Shares must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available. Stockholder has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of securities purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about Metricom, the resale
occurring not less than two years after a party has purchased and paid for the
security to be sold, the sale being through an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) and the number of shares being sold during any three-month period not
exceeding specified limitations.
3.20 FULL DISCLOSURE. This Agreement and the Exhibits hereto and
all other documents delivered by Stockholder or Overall Wireless to Metricom or
its representatives or agents in connection therewith or with the transactions
contemplated hereby do not contain any untrue statement of a material fact nor
omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading. To the best of Overall Wireless' and
Stockholder's knowledge, there are no facts that have had or are expected to
have, individually or in the aggregate, a Material Adverse Effect that have not
been set forth in this Agreement or the Exhibits hereto.
4. REPRESENTATIONS AND WARRANTIES OF METRICOM.
Metricom hereby represents and warrants to Overall Wireless and
Stockholder as follows (such representations and warranties do not lessen or
obviate the representations and warranties of Overall Wireless and Stockholder
set forth in this Agreement):
4.1 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on
the part of Metricom and its officers, directors and stockholders necessary for
the authorization of this Agreement, the performance of all obligations of
Metricom hereunder and the completion of the Merger has been taken. All
corporate action on the part of Sub and its officers, directors and stockholders
necessary for the completion of the Merger will have been taken at or prior to
the Effective Time. This Agreement is a valid and binding obligation of
Metricom, enforceable in accordance with its terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights; (b) as limited
by general principles of equity that restrict the availability of equitable
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
14.
<PAGE> 15
remedies; and (c) as the indemnification provisions of Sections 5.9 and 9 of
this Agreement may be limited by applicable law.
4.2 INVESTMENT REPRESENTATIONS.
(a) Metricom has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar
to Overall Wireless so that it is capable of evaluating the merits and risks of
its investment in Overall Wireless and has the capacity to protect its own
interests. Metricom must bear the economic risk of this investment indefinitely
unless the Option or the shares of Overall Wireless Common Stock acquired in the
Merger (the "Overall Wireless Shares") registered pursuant to the Securities
Act, or an exemption from registration is available. Metricom understands that
Overall Wireless has no present intention of registering the Option or the
Overall Wireless Shares. Metricom also understands that there is no assurance
that any exemption from registration under the Securities Act will be available
and that, even if available, such exemption may not allow Metricom to transfer
all or any portion of the Option or the Overall Wireless Shares under the
circumstances or at the times Metricom might propose.
(b) Metricom is acquiring the Option and will acquire the
Overall Wireless Shares, if the Merger is consummated, for Metricom's own
account for investment only, and not with a view towards their distribution.
(c) By reason of its, or of its management's, business or
financial experience, Metricom has the capacity to protect its own interests in
connection with the transactions contemplated in this Agreement.
(d) Metricom is an accredited investor within the meaning
of Regulation D under the Securities Act.
(e) Metricom has received and read the Financial
Statements and has had an opportunity to discuss Overall Wireless' business,
management and financial affairs with directors, officers and management of
Overall Wireless. Metricom has also had the opportunity to ask questions of and
receive answers from, Overall Wireless and its management regarding the terms
and conditions of this investment.
(f) The Option and the Overall Wireless Shares must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Metricom has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act, which permits limited resale of securities purchased in a
private placement subject to the satisfaction of certain conditions, including,
among other things: the availability of certain current public information about
Overall Wireless, the resale occurring
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
15.
<PAGE> 16
not less than two years after a party has purchased and paid for the security to
be sold, the sale being through an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under the
Exchange Act) and the number of shares being sold during any three-month period
not exceeding specified limitations.
4.3 FULL DISCLOSURE. This Agreement and the Exhibits hereto and
all other documents delivered by Metricom to Overall Wireless or Stockholder or
their representatives and agents in connection therewith or the transactions
contemplated hereby do not contain any untrue statement of a material fact nor
omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading. To the best of Metricom's knowledge,
there are no facts that have had or are expected to have, individually or in the
aggregate, a material adverse effect on the business, financial condition,
assets, liabilities, operations or prospects of Metricom that has not been set
forth in this Agreement, the Exhibits hereto, or the documents delivered to
Overall Wireless and Stockholder described in Section 3.19(e).
5. CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE TIME; ADDITIONAL
AGREEMENTS.
5.1 SYSTEM CONSTRUCTION.
(a) As quickly as practicable following the execution of
this Agreement, Overall Wireless will construct base stations having a minimum
of five assigned nationwide channel pairs and place these base stations, along
with associated mobile stations, in operation in seven of the geographic areas
specified by Stockholder in her application for the FCC License (the
"Application") in accordance with the requirements of 47 C.F.R. Section 90.725,
as modified by FCC order ("Ten Percent Completion").
(b) After Ten Percent Completion, Overall Wireless will
construct [*] (together with Ten Percent Completion, "Forty Percent
Completion"). In connection therewith, the parties will do the following:
(1) Within five months following the date of
this Agreement, Metricom will submit to Overall Wireless [*] (the "Forty
Percent Completion Date").
(2) No later than 30 days following delivery of
the Metricom Proposal, Overall Wireless will notify Metricom that the Metricom
Proposal is acceptable or, alternatively, that the Metricom Proposal is not
acceptable and the reason(s) therefor.
(3) If the Metricom Proposal is not acceptable
to Overall Wireless, the parties will negotiate in good faith changes to the
Metricom Proposal so that it is acceptable to Overall Wireless. [*]
(4) [*] Overall Wirelsss will be responsible for
all expenses incurred pursuant to the budget set forth in the Plan [*]. All
equipment and other materials will be purchased by and be the property of
Overall Wireless. All site leases will be negotiated on behalf of and held in
the name of Overall Wireless. [*]
(5) [*]
(c) In addition to the foregoing, Metricom will provide
reasonable assistance to Overall Wireless, as requested by Overall Wireless from
time to time, in achieving Ten Percent Completion and Forty Percent Completion.
(d) Overall Wireless will at all times retain control
over all construction, finances, personnel, equipment, policies, FCC compliance
and day-to-day operations of Overall Wireless, the Overall Wireless system and
the FCC License until such time, if any, as the FCC approves the Merger and
Metricom acquires Overall Wireless pursuant thereto.
5.2 NEGOTIATION WITH OTHERS. During the period from the
date of this Agreement through the earlier of the termination of the Option
without exercise and the Effective Time (the "Pre-Closing Period"), Overall
Wireless and Stockholder will not, directly or indirectly, without the prior
written consent of Metricom, (a) solicit or encourage the initiation of any
inquiry, proposal or offer from any person or entity (other than Metricom)
relating to a possible Acquisition Transaction; (b) participate in any
discussions or negotiations or enter into any agreement with, or provide any
non-public information to, any person or entity (other than
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
16.
<PAGE> 17
Metricom) relating to or in connection with a possible Acquisition Transaction;
or (c) consider, entertain or accept any proposal or offer from any person or
entity (other than Metricom) relating to a possible Acquisition Transaction. For
the purposes of this Agreement, "Acquisition Transaction" means any transaction
involving (a) the sale or other disposition of all or substantially all of
Overall Wireless' business or assets, including the FCC License; (b) the
issuance, sale or other disposition of (1) any capital stock of Overall
Wireless, (2) any option, call, warrant or right (whether or not immediately
exercisable) to acquire any capital stock of Overall Wireless, or (3) any
security, instrument or obligation that is or may become convertible into or
exchangeable for any capital stock of Overall Wireless; or (c) any merger,
consolidation, business combination, share exchange, reorganization or similar
transaction involving Overall Wireless.
5.3 CONFIDENTIALITY. Each party to this Agreement will ensure that
(a) such party and its or her representatives and agents will keep strictly
confidential the existence and terms of this Agreement and the Exhibits hereto;
and (b) unless the prior written consent of the other party is first received,
neither such party nor any of its or her representatives or agents will issue or
disseminate any press release or other publicity or otherwise make any
disclosure of any nature regarding such existence or terms, except to the extent
that a party is required by law to make any such disclosure. Notwithstanding the
foregoing, Metricom will be permitted to issue a press release (in substance
reasonably acceptable to Overall Wireless) regarding this Agreement and the
transactions contemplated hereby.
5.4 INFORMATION AND ACCESS. During the Pre-Closing period, Overall
Wireless will, and will cause its representatives to provide Metricom and
Metricom's representatives and agents, with (a) reasonable access to Overall
Wireless' representatives and agents, personnel and assets and to all existing
books, records, tax returns, work papers and other documents and information
relating to Overall Wireless; and (b) such copies of the existing books,
records, tax returns work papers and other documents and information relating to
Overall Wireless and they may reasonably request.
5.5 CONDUCT OF BUSINESS OF OVERALL WIRELESS.
(a) Except as provided in Section 5.5(b), during the
Pre-Closing Period, (1) Overall Wireless will conduct its business in the
ordinary and usual course consistent with past practice and (2) Overall Wireless
will use all commercially reasonable efforts to maintain and preserve intact its
business organization, to keep available the services of its officers and
employees and to maintain satisfactory relations with lessors, suppliers,
contractors, distributors, customers and others having business relationships
with Overall Wireless.
(b) During the Pre-Closing Period, Overall Wireless will
not do any of the following without Metricom's prior written consent:
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
17.
<PAGE> 18
(1) declare, set aside or pay any dividend or
make any other distribution in respect of any capital stock;
(2) split, combine or reclassify any capital
stock of Overall Wireless or repurchase, redeem or otherwise acquire any capital
stock of Overall Wireless;
(3) issue, deliver, pledge, encumber, sell or
transfer, or authorize or propose the issuance, delivery, pledge, encumbrance,
sale or transfer of, any shares of capital stock of Overall Wireless or any
securities convertible into, or rights, warrants or options to acquire, any such
shares of capital stock or other convertible securities, or make any change in
its equity capitalization or to the terms of any equity security of Overall
Wireless that is currently outstanding;
(4) amend the certificate of incorporation,
bylaws or other organizational or charter documents of Overall Wireless;
(5) acquire (by merging or consolidating with,
by purchasing any material portion of the capital stock or assets of or by any
other means) any business or any corporation, partnership, association or other
business organization or division thereof;
(6) sell, lease, pledge or otherwise dispose of
or encumber any of its assets except in the ordinary course of business;
(7) issue or sell any debt securities or
guarantee, endorse or otherwise become responsible for any obligation of any
other person except in the ordinary course of business;
(8) except in the ordinary course of business,
make any loan or advance to any other person, other than travel and similar
advances to employees in the ordinary course of business consistent with past
practice;
(9) prepay any material claim, liability or
obligation, or pay, discharge or satisfy any material unliquidated or contingent
liability except in the ordinary course of business;
(10) change in any material respect the
accounting methods or practices followed by Overall Wireless (including any
material change in any assumption underlying, or any method of calculating, any
bad debt, contingency or other reserve), except as may be required by changes in
generally accepted accounting principles except in the ordinary course of
business; or
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
18.
<PAGE> 19
(11) authorize or propose any of the foregoing,
or enter into any contract, agreement, commitment or arrangement contemplating
any of the foregoing.
5.6 SECURITIES LAW COMPLIANCE. Prior to the Effective Time,
Metricom will make all required filings with state regulatory authorities and
will use all commercially reasonable efforts to obtain all regulatory approvals
needed to ensure that the Metricom Common Stock to be issued in the Merger will
be qualified or exempt from qualification under the securities or "blue sky" law
of every jurisdiction of the United States in which any registered stockholder
of Overall Wireless has an address of record on the record date for determining
the stockholders entitled to notice of and to vote on the Merger.
5.7 ADDITIONAL AGREEMENTS. Metricom and Overall Wireless will use
all commercially reasonable efforts to take, or cause to be taken, all actions
necessary to consummate the Merger and make effective the other transactions
contemplated by this Agreement. Without limiting the generality of the
foregoing, Metricom and Overall Wireless will use all commercially reasonable
efforts to (a) achieve Forty Percent Completion, (b) effect the transactions
contemplated by Section 5.12, (c) obtain the consent and approval of each
governmental authority (including the FCC), lessor or other person whose consent
or approval is required (by virtue of any contractual provision or legal
requirement or otherwise) in order to permit the consummation of the Merger or
in order to enable Metricom or the Surviving Corporation to conduct its business
in the manner in which such business is currently being conducted or is proposed
to be conducted, and (d) effect all registrations and filings necessary to
consummate the Merger.
5.8 RESIGNATION OF OFFICERS AND DIRECTORS. Overall Wireless will
obtain and deliver to Metricom prior to the Closing the resignation of each
officer and director of Overall Wireless.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
19.
<PAGE> 20
5.9 REGISTRATION RIGHTS.
(a) [*], Metricom will file with the SEC a registration
statement on Form S-1 or other appropriate form of registration statement for
the general registration of securities under the Securities Act, including,
without limitation, Form S-3 (or any successor form to Form S-3) for a public
distribution of shares of Metricom Common Stock issued to Stockholder in the
Merger pursuant to Section 2 hereof and will use all commercially reasonable
efforts to cause such securities to be registered for the public distribution
thereof [*].
(b) In the event Metricom at any time or from time to
time decides to register any Metricom Common Stock, whether or not for its own
account, on a form that would be suitable for a registration involving the
Metricom Common Stock held by Stockholder [*], Metricom will: (1) promptly give
Stockholder written notice thereof (which will include a list of the
jurisdictions in which the Company intends to attempt to qualify such securities
under the applicable blue sky or other state securities laws) and (2) include in
such registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, [*] the Metricom Common
Stock specified in a written request delivered to Metricom by Stockholder within
20 days after delivery of such written notice from Metricom
(1) If the registration of which Metricom gives
notice is for a registered public offering involving an underwriting, the
Company will so advise Stockholder as a part of the written notice given
pursuant to this Section 5.9(b). [*] Metricom and Stockholder will (together
with the other holders distributing their securities through such underwriting)
enter into an underwriting agreement containing terms not inconsistent with this
Agreement with the representative of the underwriters selected by Metricom for
such offering (the "Underwriter's Representative"). Stockholders will have no
right to participate in the selection of the underwriters for an offering
pursuant to this Section 5.9(b).
(2) In the event the Underwriter's
Representative advises Metricom that market factors (including, without
limitation, the aggregate number of shares of Metricom Common Stock requested to
be registered, the general condition of the market, and the status of the
persons proposing to sell securities pursuant to the registration) require a
limitation of the number of shares to be underwritten, the Underwriter's
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
20.
<PAGE> 21
Representative may exclude some or all of Stockholder's Metricom Common Stock
from such registration and underwriting. [*]
(3) [*]
(c) Metricom will keep Stockholder advised of the
initiation and completion of such registration. [*], Metricom will:
(1) Prepare and file with the SEC registration
statement as described in Section 5.9(a) or 5.9(b) above and thereafter use all
commercially reasonably efforts to cause such registration statements to become
effective;
(2) Prepare and file with the SEC such
amendments, including pre-effective and post-effective amendments, and
supplements to such registration statements and the prospectuses used in
connection with such registration statements as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act and applicable securities laws of such states as Stockholder may
reasonably request with respect to the disposition of all securities covered by
such registration statement;
(3) Furnish to Stockholder, without charge, such
numbers of the registration statement and all amendments thereto, copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as she may
reasonably request in order to facilitate the disposition of the securities
covered by such registration statement;
(4) Use all commercially reasonable efforts to
register and qualify the securities covered by such registration statements
under such other securities or blue sky laws of such jurisdictions as shall be
reasonably requested by Stockholder, provided that Metricom will not be required
in connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions;
(5) Notify Stockholder at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus included in
such registration statements, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing and promptly file all amendments necessary to
eliminate such misstatement or omission;
(6) Cause all such shares of Metricom Common
Stock to be listed on each securities exchange or market system on which similar
securities issued by Metricom are then listed;
(7) Provide a transfer agent and registrar for
all such shares of Metricom Common Stock not later than the effective date of
such registration statement; and
(8) Provide Stockholder with copies of any
opinions of Metricom's counsel and "comfort" letters of Metricom's independent
accountants delivered to the underwriters of the shares subject to such
registration statement.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
21.
<PAGE> 22
(d) (1) Metricom will indemnify, to the extent
permitted by law, Stockholder against all Damages (as defined below) caused by
any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished in writing to Metricom by Stockholder for use therein or
by Stockholder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after Metricom has furnished
such holder with a sufficient number of copies of the same. "Damages" means any
loss, damage, injury, decline in value, lost opportunity, liability, claim,
demand, settlement, judgment, award, fine, penalty, tax, fee (including any
legal fee, expert fee, accounting fee or advisory fee), charge, cost (including
any cost of investigation) or expense of any nature.
(2) Stockholder will furnish to Metricom in
writing such information as Metricom reasonably requests for use in connection
with the registration statement or prospectus contemplated by this Section 5.9
and, to the extent permitted by law, will indemnify Metricom, its directors and
officers and each person or entity who controls Metricom (within the meaning of
the Securities Act) against all Damages resulting from any untrue statement of
material fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is contained in any information or affidavit so
furnished in writing solely by Stockholder.
(e) For a period not to exceed [*] days, Metricom will
not be obligated to prepare and file, or be prevented from delaying or
abandoning, or by written notice to the Stockholder, may suspend the use of (and
Stockholder hereby agrees not to use a registration statement during such
period) a registration statement pursuant to this Agreement at any time when
Metricom, in its good faith judgment, reasonably believes:
(1) that the filing thereof at the time
requested, or the offering of Metricom Common Stock pursuant thereto, would
materially and adversely affect (A) a pending or scheduled public offering or
private placement of Metricom's securities, (B) an acquisition, merger,
consolidation or similar transaction by or of Metricom, (C) pre-existing and
continuing negotiations, discussions or pending proposals with respect to any of
the foregoing transactions, or (D) the financial condition of Metricom in view
of the disclosure of any pending or threatened litigation, claim, assessment or
governmental investigation that may be required thereby; and
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
22.
<PAGE> 23
(2) that the failure to disclose an material
information with respect to the foregoing would cause a violation of the
Securities Act or the Exchange Act.
(f) Until [*], Stockholder will not sell more than [*] of
the aggregate number of shares of Metricom Common Stock acquired by Stockholder
in the Merger during any three-month period following the Closing. In addition,
in connection with an underwritten public offering in which Stockholder's shares
are included, Stockholder will enter into any standard "lock-up" agreement
required by Underwriter's Representative.
(g) Stockholder, at Stockholder's request and expense,
will have access, at reasonable times and on reasonable advance notice, to
appropriate corporate information of Metricom for purposes of Stockholder's "due
diligence" investigation in connection with any public offering hereunder.
Stockholder will hold in confidence any nonpublic information Stockholder may
obtain as a result of such investigation.
5.10 EXISTENCE OF SURVIVING CORPORATION. Metricom will preserve the
corporate existence of the Surviving Corporation for at least two years after
the Closing.
5.11 COVENANT NOT TO COMPETE OR SOLICIT. Until the earlier of (a)
the termination of the Option without exercise, and (b) the later of (1) two
years following the Closing, and (2) such date as Stockholder no longer owns any
Metricom Common Stock issued in the Merger, Stockholder will not:
(a) participate in the establishment or operation of any
other subscriber-based wireless communications network substantially competing
with Metricom;
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
23.
<PAGE> 24
(b) approach, contact or solicit existing or future
customers of Metricom, any of its subsidiaries or Overall Wireless as to
business competitive with such companies' business as of the date hereof or at
any time prior to the date this covenant terminates; or
(c) encourage or solicit any employee of Metricom, any of
its subsidiaries or Overall Wireless to leave the employ of such company for any
reason or to devote less than all of any such employee's efforts to the affairs
of such company.
The foregoing covenants will be construed as a series of separate covenants, one
for each nation, each state of the United States, and each county of each such
state. Except for geographic coverage, each such separate covenant will be
identical in terms to the covenants set forth above. If, in any judicial
proceeding, a court refuses to enforce any of such separate covenants (or any
part thereof), then such unenforceable covenant (or such part) will be
eliminated from this Agreement to the extent necessary to permit the remaining
separate covenants (or portions thereof) to be enforced. In the event that any
of the provisions of this Section 5.11 are deemed to exceed the time, geographic
or scope limitations permitted by applicable law, then such provisions will be
reformed to the maximum time, geographic or scope limitations, as the case may
be, permitted by applicable laws.
5.12 FCC MATTERS. Overall Wireless and Stockholder will act in
compliance with the applicable rules and regulations of the FCC, and will take
whatever actions are necessary in order to ensure that the FCC License remains
in full force and effect and in good standing through the Effective Time. In the
event of any FCC action, or the filing or issuance by the FCC of any order,
notice or complaint against Overall Wireless or Stockholder or any of their
employees or affiliates, or if Stockholder, Overall Wireless or any of Overall
Wireless' officers and directors learn of any threat of such an action, order,
notice or complaint, Overall Wireless will promptly notify Metricom thereof in
writing and take all reasonable measures to contest in good faith or seek
removal, resolution or rescission of such action, order, notice of complaint.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF METRICOM.
The obligations of Metricom to effect the Merger (after exercise of the
Option) and otherwise consummate the transactions contemplated by this Agreement
are subject to the fulfillment, at or prior to the Closing, of each of the
following conditions:
6.1 REPRESENTATIONS AND WARRANTIES ACCURATE.
(a) The representations and warranties of Overall
Wireless and Stockholder contained in this Agreement will have been accurate in
all material respects as of the date of this Agreement.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
24.
<PAGE> 25
(b) The representations and warranties of Overall
Wireless and Stockholder contained in this Agreement will have been accurate in
all material respects as of the date the Option is exercised (giving effect only
to an updated Disclosure Schedule delivered to Metricom in accordance with
Section 1.1(b)).
(c) The representations and warranties of Overall
Wireless and Stockholder contained in this Agreement will be accurate in all
respects as of the Closing Date as if made on and as of the Closing Date, except
that any inaccuracies in such representations and warranties will be disregarded
if the circumstances giving rise to all such inaccuracies (considered
collectively) do not constitute, and would not reasonably be expected to result
in, a Material Adverse Effect (it being understood that, for purposes of
determining the accuracy of such representations and warranties, any update of
or modification to the Disclosure Schedule made or purported to have been made
after the date the Option is exercised will be disregarded).
6.2 COMPLIANCE WITH COVENANTS. Overall Wireless and Stockholder
will have complied with and performed in all material respects each covenant
contained in this Agreement and any other agreement between either of them and
Metricom that is required to be performed by Overall Wireless or Stockholder on
or prior to the Closing Date.
6.3 NO MATERIAL ADVERSE EFFECT. Since the date of this Agreement,
Overall Wireless will not have suffered any Material Adverse Effect and there
will not have occurred any change or development, or any combination of changes
or developments, that would reasonably be expected to have a Material Adverse
Effect on Overall Wireless.
6.4 ABSENCE OF RESTRAINT. No order to restrain, enjoin or
otherwise prevent the consummation of the Merger or any of the other
transactions contemplated by this Agreement will have been entered by any court
or governmental authority, including the FCC.
6.5 NO GOVERNMENTAL LITIGATION. There will not be pending or
threatened any Proceeding in which a governmental authority is or is threatened
to become a party: (a) challenging or seeking to restrain or prohibit the
consummation of the Merger; (b) relating to the Merger and seeking to obtain
from Metricom or any of its subsidiaries any damages that may be material to
Metricom; (c) seeking to prohibit or limit in any material respect Metricom's
ability to vote, receive dividends with respect to or otherwise exercise
ownership rights with respect to the stock of the Surviving Corporation; or (d)
that would materially and adversely affect the right of Metricom, the Surviving
Corporation or any subsidiary of Metricom to own the assets or operate the
business of Overall Wireless.
6.6 NO OTHER LITIGATION. There will not be pending any proceeding
in which there is a reasonable possibility of an outcome that would have a
Material Adverse Effect on Metricom or (a) challenging or seeking to restrain or
prohibit the consummation of the Merger or any of
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
25.
<PAGE> 26
the other transactions contemplated hereby; (b) relating to the Merger and
seeking to obtain from Metricom or any of its subsidiaries any damages that may
be material to Metricom; (c) seeking to prohibit or limit in any material
respect Metricom's ability to vote, receive dividends with respect to or
otherwise exercise ownership rights with respect to the stock of the Surviving
Corporation; or (d) that would affect adversely the right of Metricom, the
Surviving Corporation or any subsidiary of Metricom to own the assets or operate
the business of Overall Wireless.
6.7 REQUIRED CONSENTS AND APPROVALS. Metricom and Overall Wireless
will have received all approvals, licenses, consents, assignments and
authorizations of governmental authorities, including the FCC, and other persons
as may be required (a) to permit the performance by Metricom, Overall Wireless
and Stockholder of their respective obligations under this Agreement and the
consummation of the Merger and (b) to permit Metricom and the Surviving
Corporation to conduct their business and operations in the manner currently
conducted.
6.8 [*]
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF OVERALL WIRELESS AND
STOCKHOLDER.
The obligations of Overall Wireless and Stockholder to effect the
Merger are subject to the fulfillment, at or prior to the Closing, of each of
the following conditions:
7.1 REPRESENTATIONS AND WARRANTIES ACCURATE. The representations
and warranties of Metricom contained in this Agreement will have been accurate
in all material respects as of the date of this Agreement and as of the Closing
Date.
7.2 COMPLIANCE WITH COVENANTS. Metricom will have complied with
and performed in all material respects each covenant contained in this Agreement
and any other agreement between Metricom and Overall Wireless that is required
to be performed by Metricom on or prior to the Closing Date.
7.3 EXERCISE OF OPTION. The Option will have been exercised, and
such exercise will not have been rescinded, by Metricom.
8. TERMINATION OF AGREEMENT.
8.1 TERMINATION. This Agreement may be terminated prior to the
Effective Time:
(a) by mutual written consent of the respective Boards of
Directors of Metricom and Overall Wireless;
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
26.
<PAGE> 27
(b) by either Metricom or Overall Wireless if (1) a court
of competent jurisdiction or Governmental Authority issues a final and
nonappealable order, decree or ruling, or takes any other action, having the
effect of permanently restraining, enjoining or otherwise prohibiting the Merger
or (2) the terminating party has not committed a material Breach and all of the
conditions to Closing have not been satisfied or waived by [*];
(c) by Metricom if there has been a material Breach by
Overall Wireless or Stockholder of any representation, warranty or covenant in
this Agreement, which Breach has not been cured within [*] of the date on which
written notice of such Breach was first delivered to Overall Wireless or
Stockholder, as the case may be, or which Breach is not capable of being cured
within [*];
(d) by Overall Wireless if (1) there has been a material
Breach by Metricom of any representation, warranty or covenant in this
Agreement, which Breach has not been cured within [*] of the date on which
written notice of such Breach was first delivered to Metricom, or which Breach
is not capable of being cured within [*] or (2) [*];
(e) by Metricom if Metricom reasonably determines that
the satisfaction of any condition set forth in Section 6 has become impossible
(other than as a result of any failure on the part of Metricom to comply with or
perform any covenant or obligation of Metricom set forth in this Agreement or
undertaken pursuant to the Plan);
(f) by Overall Wireless if Overall Wireless reasonably
determines that the satisfaction of any condition set forth in Section 7 has
become impossible (other than as a result of any failure on the part of Overall
Wireless to comply with or perform any covenant or obligation of Overall
Wireless set forth in this Agreement);
(g) By Metricom if (1) Metricom has not committed a
material Breach of this Agreement or any other written agreement between
Metricom and Overall Wireless or any obligation undertaken pursuant to the Plan,
and (2) Metricom reasonably determines that there is substantial risk that
Overall Wireless will lose the FCC License due to a failure to achieve Ten
Percent Completion by [*] or Forty Percent Completion by the Forty Percent
Completion Date [*] ; or
(h) By Metricom in accordance with the terms of Section
1.4.
8.2 TERMINATION PROCEDURES. If Metricom wishes to terminate
this Agreement pursuant to Section 8.1(c), Section 8.1(e), Section 8.1(f) or
Section 8.1(g), Metricom will deliver to Overall Wireless and Stockholder a
written notice stating that Metricom is terminating this Agreement and setting
forth a brief description of the basis on which Metricom is terminating this
Agreement. If Overall Wireless wishes to terminate this Agreement pursuant
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
27.
<PAGE> 28
to Section 8.1(d), Overall Wireless will deliver to Metricom a written notice
stating that Overall Wireless is terminating this Agreement and setting forth a
brief description of the basis on which Overall Wireless is terminating this
Agreement.
8.3 EFFECT OF TERMINATION. In the event of the termination of this
Agreement as provided in Section 1.4 or 8.1, this Agreement will be of no
further force or effect; provided, however, that (1) this Section 8.3 and
Sections 5.3, 9 (excluding Section 9.1), 10.9 and 10.10 will survive the
termination of this Agreement and will remain in full force and effect; and (2)
the termination of this Agreement will not relieve any party from any liability
for any Breach.
9. INDEMNIFICATION.
9.1 [*]
(a) The representations, warranties, covenants and
obligations of each party will [*]
(b) The representations, warranties, covenants and
obligations of each party, and the rights and remedies that may be exercised by
the persons and entities entitled to be indemnified, will not be limited or
otherwise affected by or as a result of any information (other than (1) with
respect to Overall Wireless and Stockholder, the original Disclosure Schedule
and the updated Disclosure Schedule, if any, delivered pursuant to Section
1.1(b), and (2) with respect to Metricom, publicly-available documents filed by
Metricom with the Securities and Exchange Commission) furnished to, or any
investigation made by or knowledge of, any of such persons or entities or any of
their representatives or agents.
9.2 INDEMNIFICATION.
(a) From and after the date of this Agreement, regardless
of whether the Option is exercised, Stockholder will hold harmless and indemnify
Metricom and each of its current and future affiliates (including Overall
Wireless and Sub) and their respective representatives, agents, successors and
assigns (the "Metricom Indemnitees") from and against, and will compensate and
reimburse each of the Metricom Indemnitees for, any Damages that are directly or
indirectly suffered or incurred by any of the Metricom Indemnitees or to which
any of the Metricom Indemnitees may otherwise become subject at any time
(regardless of whether or not such Damages relate to any third-party claim) and
that arise directly or indirectly from or as a direct or indirect result of, or
are directly or indirectly connected with (1) any Breach of any representation
or warranty made by Overall Wireless or Stockholder in this Agreement (without
giving effect to any update to the Disclosure Schedule other than one delivered
pursuant to Section 1.1(b)); (2) any Breach of any representation, warranty,
statement, information or provision contained in the Disclosure Schedule or in
any other document delivered or otherwise
___________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
28.
<PAGE> 29
made available to Metricom or any of its representatives or agents by or on
behalf of Overall Wireless, Stockholder or any of their representatives and
agents; (3) any Breach of any covenant or obligation of Overall Wireless or
Stockholder; (4) U.S. Mobilcomm, Inc., et al. v. Jean Warren, et al., Case No.
CIV-94-1582-M (United States District Court for the Western District of
Oklahoma) and any related litigation; (5) any system operations prior to the
Closing Date not contemplated by this Agreement or the Plan or previously agreed
to in writing by Metricom; (6) the failure of Overall Wireless, as of or at any
time prior to the Effective Time, to be a validly existing "subchapter S"
corporation for federal income tax purposes and under analogous provisions, to
the extent they exist, of the laws of each state in which Overall Wireless would
be required to pay income tax on taxable income; or (7) any proceeding relating
directly or indirectly to any Breach, alleged Breach, liability or matter of the
type referred to in clause (1), (2), (3), (4), (5) or (6) above (including any
proceeding commenced by any Metricom Indemnitee for the purpose of enforcing any
of its rights under this Section 9). If there is any Breach of any
representation, warranty or other provision relating to Overall Wireless or
Overall Wireless' business, condition, assets, liabilities, operations or
prospects (or any aspect or portion thereof) or if Overall Wireless suffers any
Damages as a result of the litigation described above, then Metricom itself will
be deemed, by virtue of its ownership of Overall Wireless, to have incurred
Damages as a result of such Breach.
(b) From and after the date of this Agreement, regardless
of whether the Option is exercised, Metricom will hold harmless and indemnify
Stockholder and each of her current and future affiliates and their respective
representatives, agents, successors and assigns (the "Stockholder Indemnitees")
from and against, and will compensate and reimburse each of the Stockholder
Indemnitees for, any Damages that are directly or indirectly suffered or
incurred by any of the Stockholder Indemnitees or to which any of the
Stockholder Indemnitees may otherwise become subject at any time (regardless of
whether or not such Damages relate to any third-party claim) and that arise
directly or indirectly from or as a direct or indirect result of, or are
directly or indirectly connected with (1) any Breach of any representation or
warranty made by Metricom in this Agreement; (2) any Breach of any
representation, warranty, statement, information or provision contained in any
other document delivered or otherwise made available to Stockholder or any of
her representatives or agents by or on behalf of Metricom or any of its
representatives and agents; (3) any Breach of any covenant or obligation of
Metricom; (4) any system operations after the Closing Date; or (5) any
proceeding relating directly or indirectly to any Breach, alleged Breach,
liability or matter of the type referred to in clause (1), (2), (3) or (4) above
(including any proceeding commenced by any Stockholder Indemnitee for the
purpose of enforcing any of its rights under this Section 9).
9.3 THRESHOLD.
(a) Subject to Section 9.3(b), neither Stockholder nor
Metricom will be required to make any indemnification payment pursuant to
Section 9.2 for any Breach of any of its representations and warranties until
such time as the total amount of all Damages (including the Damages arising
from such Breach and all other Damages arising from any other Breaches of any
representations or warranties) that have been directly or indirectly suffered
or incurred by any one or more of the Metricom Indemnitees or the Stockholder
Indemnitees, respectively, or to which any one or more of the Metricom
Indemnitees or the Stockholder Indemnitees, respectively, has or have otherwise
become subject, exceeds [*].
(b) The limitation on Stockholders' indemnification
obligations that is set forth in Section 9.3(a) will not apply to (1) any Breach
arising directly or indirectly from any circumstance of which Overall Wireless
or Stockholder had knowledge on or prior to the Closing Date, [*]. The
limitation on Metricom's indemnification obligations that is set forth in
Section 9.3(a) will not apply to (1) any Breach arising directly or indirectly
from any circumstance of which Metricom had knowledge on or prior to the Closing
Date, [*].
9.4 RIGHT TO REQUIRE CURE OF BREACH. Without limiting the
generality of anything contained in Section 9.2, if there is any Breach of any
representation or warranty made by
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
29.
<PAGE> 30
Overall Wireless or Stockholder, the one hand, or Metricom, on the other hand,
then Stockholder or Metricom, respectively, will be obligated to pay such
amounts to Metricom or Stockholder, respectively, and take such other actions as
Metricom or Stockholder, respectively, may in good faith request for the purpose
of causing such Breach to be corrected, cured and eliminated in all respects (at
no cost to Metricom or Stockholder, respectively).
9.5 NO CONTRIBUTION. Stockholder and Metricom each waives, and
acknowledges and agrees that such party will not have and will not exercise or
assert or attempt to exercise or assert, any right of contribution or right of
indemnity or any other right or remedy against Overall Wireless in connection
with any indemnification obligation or any other liability to which such party
may become subject under this Agreement or otherwise in connection with any of
the transactions contemplated hereby.
9.6 INTEREST. If a party is required to indemnify any other
person or entity pursuant to this Section 9 with respect to any Damages
representing out-of-pocket payments or losses, such party will also be required
to pay such other person or entity interest on the amount of such Damages (for
the period commencing as of the date on which such other person or entity first
incurred or otherwise became subject to such Damages and ending on the date on
which the applicable indemnification payment is made by Stockholder) at a
floating rate one percentage point above the rate of interest publicly announced
by Bank of America, N.T. & S.A. from time to time as its prime, base or
reference rate, except to the extent the time value of money is already
reflected in the amount of such Damages.
9.7 NONEXCLUSIVITY OF INDEMNIFICATION REMEDIES. The
indemnification remedies and other remedies provided in this Section 9 will not
be deemed to be exclusive. Accordingly, the exercise by any person or entity of
any of its rights under this Section 9 will not be deemed to be an election of
remedies and will not be deemed to prejudice, or to constitute or operate as a
waiver of, any other right or remedy that such person or entity may be entitled
to exercise.
9.8 EXERCISE OF REMEDIES BY METRICOM INDEMNITEES OTHER THAN
METRICOM. No Metricom Indemnitee (other than Metricom or any successor thereto
or assign thereof) will be permitted to assert any indemnification claim or
exercise any other remedy under this Agreement unless Metricom (or any successor
thereto or assign thereof) has consented to the assertion of such
indemnification claim or the exercise of such other remedy.
10. MISCELLANEOUS.
10.1 GOVERNING LAW. This Agreement will be governed in all respects
by the laws of the State of California as such laws are applied to agreements
between California residents entered into and performed entirely in California.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
30.
<PAGE> 31
10.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof will inure to the benefit of, and be binding upon,
the successors, assigns, heirs, executors and administrators of the parties
hereto.
10.3 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto
constitute the full and entire understanding and agreement among the parties
with regard to the subjects hereof and no party will be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein, therein or in any other written
agreement entered into among the parties hereto.
10.4 SEVERABILITY. In case any provision of the Agreement is
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions will not in any way be affected or impaired thereby.
10.5 AMENDMENT. This Agreement may be amended only by a writing
executed by Metricom, Overall Wireless and Stockholder.
10.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under the Agreements will impair any
such right, power or remedy, nor will it be construed to be a waiver of any such
breach, default or noncompliance, or any acquiescence therein, or of any similar
breach, default or noncompliance thereafter occurring. It is further agreed that
any waiver, permit, consent or approval of any kind or character on any party's
part of any breach, default or noncompliance under this Agreement or any waiver
on such party's part of any provisions or conditions of this Agreements must be
in writing and will be effective only to the extent specifically set forth in
such writing. All remedies under the Agreements or otherwise afforded to any
party, will be cumulative and not alternative.
10.7 NOTICES. Any notice or other communication required or
permitted to be delivered to any party under this Agreement will be in writing
and will be deemed properly delivered, given and received when delivered (by
hand, by certified mail with return receipt requested, by courier or express
delivery service or by telecopier) to the address or telecopier number set forth
beneath the name of such party below (or to such other address or telecopier
number as such party shall have specified in a written notice given to the other
parties hereto):
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
31.
<PAGE> 32
if to Metricom:
Metricom, Inc.
980 University Avenue
Los Gatos, CA 95030
Attention: William D. Swain
Telecopier: (408) 399-8274
with a copy to:
Cooley Godward Castro Huddleson & Tatum
One Maritime Plaza, 20th Floor
San Francisco, CA 94111-3580
Attention: Kenneth L. Guernsey
Telecopier: (415) 951-3699
if to Overall Wireless or Stockholder:
Jean Warren
[*]
with a copy to:
McAfee & Taft
Tenth Floor, Two Leadership Square
211 N. Robinson
Oklahoma City, OK 73102
Attention: Gary F. Fuller
Facsimile: (405) 235-0439
and
Lukas, McGowan, Nace and Gutierrez, Chartered
1111 Nineteenth Street, NW
Suite 1200
Washington, DC 20036
Attention: Gerald S. McGowan and George L. Lyon, Jr.
Facsimile: (202) 842-4485
10.8 EXPENSES. Except as provided in Section 10.9, Metricom will
pay all costs and expenses that it or Sub incurs, and Stockholder will pay all
costs and expenses that it or Overall Wireless incurs (either directly or
through a capital contribution to Overall Wireless in an
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
32.
<PAGE> 33
amount equal to any costs and expenses paid by Overall Wireless), with respect
to the negotiation, execution, delivery and performance of this Agreement and
the Exhibits hereto.
10.9 ATTORNEYS' FEES. In the event that any dispute among the
parties to this Agreement should result in litigation, the prevailing party in
such dispute will be entitled to recover from the losing party or parties all
fees, costs and expenses of enforcing any right of such prevailing party under
or with respect to this Agreement, including without limitation, such reasonable
fees and expenses of attorneys and accountants, which will include, without
limitation, all fees, costs and expenses of appeals.
10.10 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights and
remedies of the parties hereto will be cumulative (and not alternative). In the
event of any Breach or threatened Breach by any party of any covenant,
obligation or other provision set forth in this Agreement, the other parties
will be entitled (in addition to any other remedy that may be available to it)
to (a) a decree or order of specific performance or mandamus to enforce the
observance and performance of such covenant, obligation or other provision, and
(b) an injunction restraining such Breach or threatened Breach. None of the
parties, the Metricom Indemnitees or the Stockholder Indemnitees will be
required to provide any bond or other security in connection with any such
decree, order or injunction or in connection with any related action or
proceeding.
10.11 TITLES AND SUBTITLES. The titles of the sections and
subsections of the Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
10.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be an original, but all of which together will
constitute one instrument.
IN WITNESS WHEREOF, the parties hereby have executed this Agreement as
of the date first above written.
METRICOM, INC. OVERALL WIRELESS COMMUNICATIONS
CORPORATION
By: /s/ Gary M. Green By: /s/ Jean Warren
-------------------------------------- ---------------------------
Name: Gary M. Green Name: Jean Warren
Title: Chief Operating Officer Title: President
/s/ Jean Warren
- ------------------------------------------
Jean Warren
_______________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
33.
<PAGE> 1
EXHIBIT 10.28
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Loan Agreement") is made as of
February 7, 1996 among METRICOM, INC. ("Lender"), OVERALL WIRELESS
COMMUNICATIONS CORPORATION ("Borrower") and Jean Warren (with respect to Section
11.9 only).
RECITALS
Borrower wishes to obtain credit from Lender, and Lender
desires to extend credit to Borrower. This Agreement sets forth the terms on
which Lender will advance credit to Borrower, and Borrower will repay the
amounts owing to Lender.
AGREEMENT
The parties to this Agreement agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. Unless otherwise defined herein, capitalized
terms have the meanings given them in the Option Agreement (as defined below).
As used in this Agreement, the following terms will have the following
definitions:
(a) "ACCOUNTS" means all presently existing and hereafter
arising accounts, contract rights, and all other forms of obligations owing to
Borrower arising out of the sale or lease of goods (including, without
limitation, the licensing of software and other technology) or the rendering of
services by Borrower, whether or not earned by performance, and any and all
credit insurance, guaranties, and other security therefor, as well as all
merchandise returned to or reclaimed by Borrower and Borrower's Books relating
to any of the foregoing.
(b) "BORROWER'S BOOKS" means all of Borrower's books and
records including ledgers; records concerning Borrower's assets or liabilities,
the Collateral, business operations or financial condition; and all computer
programs, or tape files, and the equipment containing such information.
(c) "CODE" means the California Uniform Commercial Code.
(d) "COLLATERAL" means the property described on EXHIBIT
A attached hereto.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
<PAGE> 2
(e) "EQUIPMENT" means all present and future machinery,
equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and
attachments in which Borrower has any interest.
(f) "GAAP" means generally accepted accounting principles
as in effect from time to time.
(g) "INSOLVENCY PROCEEDING" means any proceeding
commenced by or against any person or entity under any provision of the United
States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency
law, including assignments for the benefit of creditors, formal or informal
moratoria, compositions, extension generally with its creditors, or proceedings
seeking reorganization, arrangement, or other relief.
(h) "INVENTORY" means all present and future inventory in
which Borrower has any interest, including merchandise, raw materials, parts,
supplies, packing and shipping materials, work in process and finished products
intended for sale or lease or to be furnished under a contract of service, of
every kind and description now or at any time hereafter owned by or in the
custody or possession, actual or constructive, of Borrower, including such
inventory as is temporarily out of its custody or possession or in transit and
including any returns upon any accounts or other proceeds, including insurance
proceeds, resulting from the sale or disposition of any of the foregoing and any
documents of title representing any of the above, and Borrower's Books relating
to any of the foregoing.
(i) "IRC" means the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.
(j) "LIEN" means any mortgage, lien, deed of trust,
charge, pledge, security interest or other encumbrance.
(k) "LOAN DOCUMENTS" means, collectively, this Agreement,
the Note, the Pledge Agreement and any other agreement entered into between
Borrower and Lender in connection with this Agreement, all as amended or
extended from time to time.
(l) "MATERIAL ADVERSE EFFECT" means a material adverse
effect on (1) the business operations or condition (financial or otherwise) of
Borrower or (2) the ability of Borrower to repay the Obligations or otherwise
perform its obligations under the Loan Documents.
(m) "MATURITY DATE" means [*].
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
2.
<PAGE> 3
(n) "NEGOTIABLE COLLATERAL" means all of Borrower's
present and future letters of credit of which it is a beneficiary, notes,
drafts, instruments, securities, documents of title, and chattel paper, and
Borrower's Books relating to any of the foregoing.
(o) "OBLIGATIONS" means all debt, principal, interest,
Lender's costs and 1expenses in the enforcement of this Agreement, and other
amounts owed to Lender by Borrower pursuant to this Agreement or any other Loan
Document, whether absolute or contingent, due or to become due, now existing or
hereafter arising, including any interest that accrues after the commencement of
an Insolvency Proceeding.
(p) "OPTION AGREEMENT" that certain Option Agreement and
Agreement and Plan of Reorganization among Lender, Borrower and Jean Warren
dated as of the date hereof.
(q) "PERSON" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or governmental agency.
(r) "PLEDGE AGREEMENT" means that certain Stock Pledge
Agreement dated as of the date hereof between Jean Warren and Lender.
(s) "RESPONSIBLE OFFICER" means each of the Chief
Executive Officer, the Chief Financial Officer and the Controller of Borrower.
1.2 ACCOUNTING TERMS. All accounting terms not specifically
defined herein will be construed in accordance with GAAP and all calculations
made hereunder will be made in accordance with GAAP. When used herein, the term
"financial statements" includes the notes and schedules thereto.
2. LOAN AND TERMS OF PAYMENT.
2.1 ADVANCES.
(a) At any time from the date hereof through [*],
Borrower may from time to time request advances (each a "Level One Advance" and
collectively, the "Level One Advances") from Lender [*]. To evidence each Level
One Advance, Borrower will deliver to Lender, at the time of each Level One
Advance request, an invoice for the equipment to be purchased or other costs
relating to construction, deployment and operation. The Level One Advances will
be used only to purchase equipment for and pay construction, operation and other
costs associated with achieving and maintaining Ten Percent Completion.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
3.
<PAGE> 4
(b) At any time following Ten Percent Completion through
the termination of the Option Agreement, Borrower may from time to time request
advances (each a "Level Two Advance" and collectively, the "Level Two Advances")
from Lender [*]. To evidence each Level Two Advance, Borrower will deliver to
Lender, at the time of each Level Two Advance request, an invoice for the
equipment to be purchased or other costs relating to construction, deployment
and operation to be paid. The Level Two Advances will be used only to purchase
equipment for and pay construction, operation and other costs associated with
achieving and maintaining Forty Percent Completion.
(c) All Advances will be payable in full in one
installment of principal, plus all accrued interest, on the Maturity Date.
(d) When Borrower desires to obtain an Advance, Borrower
will notify Lender by facsimile transmission to be received no later than [*]
before the day on which the Advance is to be made. Such notice will be
substantially in the form of EXHIBIT B. The notice will be signed by a
Responsible Officer and include a copy of the invoices described in this
Section 2.1. If all applicable conditions set forth in Section 3 have been met,
Lender will loan to Borrower, by check or wire transfer as Borrower may
specify, cash in the amount requested by the Advance within ten days of
receipt of such notice.
(e) [*].
2.2 INTEREST RATE, PAYMENT, AND CALCULATION.
Except as set forth in this Section 2.2, any Advances will
bear interest, on the outstanding principal balance, at a rate equal to [*] per
annum. All Obligations will bear interest, from and after the occurrence of an
Event of Default, at a rate [*]. Interest hereunder will be due and payable
together with the principal on the Maturity Date. All interest chargeable under
the Loan Documents will be computed on the basis of a 360-day year for the
actual number of days elapsed.
3. CONDITIONS OF LOANS.
3.1 CONDITIONS PRECEDENT TO INITIAL LEVEL ONE ADVANCE. The
obligation of Lender to make the initial Level One Advance is subject to the
condition precedent that Lender will have received, in form and substance
reasonably satisfactory to Lender, the following:
(a) this Agreement and the Note;
(b) the Pledge Agreement;
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
4.
<PAGE> 5
(c) a governmental certificate as to the corporate
standing of Borrower in its jurisdiction of incorporation;
(d) a certificate of Borrower's Secretary with respect to
Borrower's Certificate of Incorporation and Bylaws, and authorizing resolutions
of Borrower's board of directors, and containing incumbency information and
specimen signatures of Responsible Officers;
(e) financing statements (Forms UCC-1);
(f) insurance certificate; and
(g) such other documents, and completion of such other
matters, as Lender may reasonably deem necessary or appropriate.
3.2 CONDITIONS PRECEDENT TO INITIAL LEVEL TWO ADVANCE.
The obligation of Lender to make the initial Level Two Advance is subject to the
condition precedent that Borrower will have complied with the conditions
precedent to all Level One Advances.
3.3 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation
of Lender to make each Advance, including the initial Advance, is further
subject to the following conditions:
(a) timely receipt by Lender of the
Payment/Advance Request Form as provided in Section 2.1; and
(b) the representations and warranties of
Borrower contained in Section 5 will be true and correct in all material
respects on and as of the date of such Payment/Advance Request Form and on the
effective date of each Advance as though made at and as of each such date, and
no Event of Default will have occurred and be continuing, or would result from
such Advance. The making of each Advance will be deemed to be a representation
and warranty by Borrower on the date of such Advance as to the accuracy of the
facts referred to in this Section 3.3(b).
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants to Lender a
continuing security interest in all presently existing and hereafter acquired or
arising Collateral in order to secure prompt repayment of any and all
Obligations and in order to secure prompt performance by Borrower of each of its
covenants and duties under the Loan Documents. Such security interest
constitutes a valid, first priority security interest in the presently existing
Collateral, and will constitute a valid, first priority security interest in
Collateral acquired after the date hereof.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
5.
<PAGE> 6
4.2 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. Borrower will
from time to time execute and deliver to Lender, at the request of Lender, all
Negotiable Collateral, all financing statements and other documents that Lender
may reasonably request, in form satisfactory to Lender, to perfect and continue
perfected Lender's security interests in the Collateral and in order to fully
consummate all of the transactions contemplated under the Loan Documents.
4.3 RIGHT TO INSPECT. Lender (through any of its officers,
employees, or agents) will have the right, upon reasonable prior notice, from
time to time during Borrower's usual business hours, to inspect Borrower's Books
and to make copies thereof and to check, test, and appraise the Collateral in
order to verify Borrower's financial condition or the amount, condition of, or
any other matter relating to, the Collateral.
5. REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Lender as follows:
5.1 INCORPORATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Borrower contained in Section 3 of the Option
Agreement are hereby incorporated herein by reference.
5.2 FULL DISCLOSURE. No representation, warranty or other
statement made by Borrower in any certificate or written statement furnished to
Lender contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained in such
certificates or statements not misleading.
5.3 AUTHORIZATION; BINDING OBLIGATION. Borrower has all requisite
corporate power and authority to execute and deliver this Agreement and to carry
out the provisions of this Agreement. All corporate action on the part of
Borrower, its officers, directors and stockholders necessary for the
authorization of this Agreement and the performance of all obligations of
Borrower hereunder. This Agreement is a valid and binding obligation of
Borrower, enforceable in accordance with its terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights; (b) general
principles of equity that restrict the availability of equitable remedies; and
(c) as the indemnification provisions of Section 9 of this Agreement may be
limited by applicable law.
5.4 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery,
and performance of and compliance with this Agreement will not, with or without
the passage of time or giving of notice, result in any such material violation,
or be in conflict with or constitute a default under any term of its certificate
of incorporation or bylaws, or of any mortgage, indenture,
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
6.
<PAGE> 7
contract, agreement or instrument to which it is a party or by which it is bound
or of any judgment, decree, order, writ or, to the best of Borrower's knowledge,
any statute, rule or regulation applicable to Borrower, or result in the
creation of any mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of Borrower or the suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to Borrower, its business or operations or any of its assets or
properties.
5.5 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the best of Borrower's knowledge, currently
threatened against Borrower or Stockholder that questions the validity of this
Agreement, the right of Borrower to enter into this Agreement or to consummate
the transactions contemplated hereby.
5.6 COMPLIANCE WITH LAWS; PERMITS. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery by Borrower of this Agreement except such as has been
duly and validly obtained or filed, or with respect to any filings that must be
made after the execution of this Agreement, as will be filed in a timely manner.
Lender represents and warrants to Borrower as follows:
5.7 INCORPORATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Lender contained in Section 4 of the Option
Agreement are hereby incorporated herein by reference.
5.8 FULL DISCLOSURE. No representation, warranty or other
statement made by Lender in any certificate or written statement furnished to
Borrower contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained in such
certificates or statements not misleading.
5.9 AUTHORIZATION; BINDING OBLIGATION. Lender has all requisite
corporate power and authority to execute and deliver this Agreement and to carry
out the provisions of this Agreement. All corporate action on the part of
Lender, its officers, directors and stockholders necessary for the authorization
of this Agreement and the performance of all obligations of Lender hereunder.
This Agreement is a valid and binding obligation of Lender, enforceable in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights; (b) general principles of equity
that restrict the availability of equitable remedies; and (c) as the
indemnification provisions of Section 9 of this Agreement may be limited by
applicable law.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
7.
<PAGE> 8
5.10 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery,
and performance of and compliance with this Agreement will not, with or without
the passage of time or giving of notice, result in any such material violation,
or be in conflict with or constitute a default under any term of its certificate
of incorporation or bylaws, or of any mortgage, indenture, contract, agreement
or instrument to which it is a party or by which it is bound or of any judgment,
decree, order, writ or, to the best of Lender's knowledge, any statute, rule or
regulation applicable to Lender, or result in the creation of any mortgage,
pledge, lien, encumbrance or charge upon any of the properties or assets of
Lender or the suspension, revocation, impairment, forfeiture or nonrenewal of
any permit, license, authorization or approval applicable to Lender, its
business or operations or any of its assets or properties.
5.11 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the best of Lender's knowledge, currently
threatened against Lender that questions the validity of this Agreement, the
right of Lender to enter into this Agreement or to consummate the transactions
contemplated hereby.
5.12 COMPLIANCE WITH LAWS; PERMITS. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery by Lender of this Agreement except such as has been
duly and validly obtained or filed, or with respect to any filings that must be
made after the execution of this Agreement, as will be filed in a timely manner.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, until payment in full of all
outstanding Obligations, and for so long as Lender may have any commitment to
make an Advance hereunder, Borrower will do all of the following:
6.1 GOOD STANDING. Borrower will maintain its corporate existence
and good standing in its jurisdiction of incorporation and maintain
qualification in each jurisdiction in which the failure to so qualify could have
a Material Adverse Effect. Borrower will maintain, to the extent consistent with
prudent management of Borrower's business, in force all licenses, approvals and
agreements, the loss of which could have a Material Adverse Effect.
6.2 GOVERNMENT COMPLIANCE. Borrower will comply with all statutes,
laws, ordinances and government rules and regulations to which it is subject,
noncompliance with which could have a Material Adverse Effect or a material
adverse effect on the Collateral or the priority of Lender's Lien on the
Collateral.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
8.
<PAGE> 9
6.3 TAXES. Borrower will make due and timely payment or deposit of
all material federal, state, and local taxes, assessments, or contributions
required of it by law, and will execute and deliver to Lender, on demand,
appropriate certificates attesting to the payment or deposit thereof; and
Borrower will make timely payment or deposit of all material tax payments and
withholding taxes required of it by applicable laws, including, but not limited
to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal income taxes, and will, upon request, furnish Lender with
proof satisfactory to Lender indicating that Borrower has made such payments or
deposits; provided that Borrower need not make any payment if the amount or
validity of such payment is contested in good faith by appropriate proceedings
and is reserved against (to the extent required by GAAP) by Borrower.
6.4 INSURANCE.
(a) Borrower, at its expense, will maintain liability
insurance and will keep the Collateral insured against loss or damage by fire,
theft, explosion, sprinklers, and all other hazards and risks, and in such
amounts, as described in the original Disclosure Schedule.
(b) All such policies of insurance will be in such form,
with such companies, and in such amounts as reasonably satisfactory to Lender.
All such policies of property insurance will contain a lender's loss payable
endorsement, in a form satisfactory to Lender, showing Lender as an additional
loss payee thereof and all liability insurance policies will show the Lender as
an additional insured, and will specify that the insurer must give at least 20
days' notice to Lender before canceling its policy for any reason. Borrower will
deliver to Lender certified copies of such policies of insurance and evidence of
the payments of all premiums therefor. All proceeds payable under any such
policy will, at the option of Lender, be payable to Lender to be applied on
account of the Obligations.
6.5 FURTHER ASSURANCES. At any time and from time to time Borrower
will execute and deliver such further instruments and take such further action
as may reasonably be requested by Lender to effect the purposes of this
Agreement.
7. EVENTS OF DEFAULT.
Any one or more of the following events will constitute an Event of
Default by Borrower under this Agreement:
7.1 PAYMENT DEFAULT. If Borrower fails to pay, when due, any of
the Obligations.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
9.
<PAGE> 10
7.2 COVENANT DEFAULT.
(a) If Borrower or Jean Warren commits a material Breach
under the Option Agreement and as to any Breach that can be cured, has failed
to cure such default within [*] after Borrower receives notice thereof or any
officer of Borrower becomes aware thereof (provided that no Advances will be
required to be made during such cure period), or
(b) If Borrower or Jean Warren fails or neglects to
perform, keep, or observe any other material term, provision, condition,
covenant, or agreement contained in this Agreement, in any of the Loan
Documents, or in any other present or future agreement between Borrower and
Lender and as to any default under such other term, provision, condition,
covenant or agreement that can be cured, has failed to cure such default within
[*] after Borrower receives notice thereof or any officer of Borrower becomes
aware thereof (provided that no Advances will be required to be made during
such cure period);
7.3 ATTACHMENT. If any material portion of Borrower's assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within [*], or if Borrower is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs, or if a judgment or other
claim becomes a lien or encumbrance upon any material portion of Borrower's
assets, or if a notice of lien, levy, or assessment is filed of record with
respect to any of Borrower's assets by the United States Government, or any
department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within [*] after
Borrower receives notice thereof, provided that none of the foregoing will
constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower (provided
that no Advances will be required to be made during such cure period);
7.4 INSOLVENCY. If an Insolvency Proceeding is commenced by
Borrower, or if an Insolvency Proceeding is commenced against Borrower and is
not dismissed or stayed within [*] (provided that no Advances will be made prior
to the dismissal of such Insolvency Proceeding); and
7.5 MISREPRESENTATIONS. If any material misrepresentation or
material misstatement exists now or hereafter in any warranty or representation
set forth herein or in any certificate delivered to Lender by any Responsible
Officer pursuant to this Agreement or to induce Lender to enter into this
Agreement or any other Loan Document, and as to a misrepresentation or
misstatement that can be cured, Borrower fails to correct such misrepresentation
or misstatement to Lender's satisfaction within [*] after Borrower receives
notice thereof or any officer of
_______________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
10.
<PAGE> 11
Borrower becomes aware thereof (provided that no Advances will be required to be
made during such cure period).
8. LENDER'S RIGHTS AND REMEDIES.
8.1 RIGHTS AND REMEDIES. Upon the occurrence and during the
continuance of an Event of Default, Lender may, at its election, without notice
of its election and without demand (but subject to FCC approval, if required),
do any one or more of the following, all of which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable (provided that upon the occurrence of an Event of Default described in
Section 7.4 all Obligations will become immediately due and payable without any
action by Lender);
(b) Cease advancing money or extending credit to or for
the benefit of Borrower under this Agreement or under any other agreement
between Borrower and Lender;
(c) Settle or adjust disputes and claims directly with
account debtors for amounts, upon terms and in whatever order that Lender
reasonably considers advisable;
(d) Without notice to or demand upon Borrower, make such
payments and do such acts as Lender considers necessary or reasonable to protect
its security interest in the Collateral. Borrower agrees to assemble the
Collateral if Lender so requires, and to make the Collateral available to Lender
as Lender may designate. Borrower authorizes Lender to enter the premises where
the Collateral is located, to take and maintain possession of the Collateral, or
any part of it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or lien which in Lender's determination appears to be prior or superior
to its security interest and to pay all expenses incurred in connection
therewith. With respect to any of Borrower's owned premises, Borrower hereby
grants Lender a license to enter into possession of such premises and to occupy
the same, without charge, for up to 120 days in order to exercise any of
Lender's rights or remedies provided herein, at law, in equity, or otherwise;
(e) Without notice to Borrower set off and apply to the
Obligations any and all indebtedness at any time owing to or for the credit or
the account of Borrower held by Lender;
(f) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner provided
for herein) the Collateral. Lender is hereby granted a license or other right,
solely pursuant to the provisions of this Section 8.1, to use, without charge,
Borrower's labels, patents, copyrights, rights of use of any name, trade
secrets,
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
11.
<PAGE> 12
trade names, trademarks, service marks, and advertising matter, or any property
of a similar nature, as it pertains to the Collateral, in completing production
of, advertising for sale, and selling any Collateral and, in connection with
Lender's exercise of its rights under this Section 8.1, Borrower's rights under
all licenses and all franchise agreements will inure to Lender's benefit;
(g) Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or transactions, for cash or on
terms, in such manner and at such places (including Borrower's premises) as
Lender determines is commercially reasonable;
(h) Lender may credit bid and purchase at any public
sale; and
(i) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower.
8.2 POWER OF ATTORNEY. Effective only upon the occurrence and
during the continuance of an Event of Default, Borrower hereby irrevocably
appoints Lender (and any of Lender's designated officers, or employees) as
Borrower's true and lawful attorney to: (a) send requests for verification of
Accounts or notify account debtors of Lender's security interest in the
Accounts; (b) endorse Borrower's name on any checks or other forms of payment or
security that may come into Lender's possession; (c) sign Borrower's name on any
invoice or bill of lading relating to any Account, drafts against account
debtors, schedules and assignments of Accounts, verifications of Accounts, and
notices to account debtors; (d) make, settle, and adjust all claims under and
decisions with respect to Borrower's policies of insurance; and (e) settle and
adjust disputes and claims respecting the accounts directly with account
debtors, for amounts and upon terms which Lender determines to be reasonable;
provided Lender may exercise such power of attorney to sign the name of Borrower
on any of the documents described in Section 4.2 regardless of whether an Event
of Default has occurred. The appointment of Lender as Borrower's attorney in
fact, and each and every one of Lender's rights and powers, being coupled with
an interest, is irrevocable until all of the Obligations have been fully repaid
and performed and Lender's obligation to provide advances hereunder is
terminated.
8.3 ACCOUNTS COLLECTION. Effective only upon the occurrence and
during the continuance of an Event of Default, Lender may notify any Person
owing funds to Borrower of Lender's security interest in such funds and verify
the amount of such Account. Borrower will collect all amounts owing to Borrower
for Lender, receive in trust all payments as Lender's trustee, and immediately
deliver such payments to Lender in their original form as received from the
account debtor, with proper endorsements for deposit.
8.4 LENDER'S LIABILITY FOR COLLATERAL. So long as Lender complies
with reasonable business practices, Lender will not in any way or manner be
liable or responsible for: (a) the
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
12.
<PAGE> 13
safekeeping of the Collateral; (b) any loss or damage thereto occurring or
arising in any manner or fashion from any cause; (c) any diminution in the value
thereof; or (d) any act or default of any carrier, warehouseman, bailee,
forwarding agency, or other person whomsoever. All risk of loss, damage or
destruction of the Collateral will be borne by Borrower.
8.5 REMEDIES CUMULATIVE. Lender's rights and remedies under this
Agreement, the Loan Documents, and all other agreements will be cumulative.
Lender will have all other rights and remedies not inconsistent herewith as
provided under the Code, by law, or in equity. No exercise by Lender of one
right or remedy will be deemed an election, and no waiver by Lender of any Event
of Default on Borrower's part will be deemed a continuing waiver. No delay by
Lender will constitute a waiver, election, or acquiescence by it. No waiver by
Lender will be effective unless made in a written document signed on behalf of
Lender and then will be effective only in the specific instance and for the
specific purpose for which it was given.
8.6 DEMAND; PROTEST. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment, notice
of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Lender on which Borrower may in any way be
liable.
9. INDEMNIFICATION.
Borrower will defend, indemnify and hold harmless Lender and its
officers, employees, and agents against: (a) all obligations, demands, claims,
and liabilities claimed or asserted by any other party in connection with the
transactions contemplated by this Agreement; and (b) all losses or costs and
expenses in any way suffered, incurred, or paid by Lender as a result of or in
any way arising out of, following, or consequential to transactions between
Lender and Borrower whether under this Agreement, or otherwise (including
without limitation reasonable attorneys fees and expenses), except for losses
caused by Lender's gross negligence or willful misconduct.
10. ADDITIONAL AGREEMENTS.
10.1 BREACH BY LENDER. In the event Lender fails to make any
advance when due pursuant to this Agreement, and Lender fails to cure such
breach within [*] business days after Borrower gives Lender notice thereof,
Borrower will be entitled to [*]. The foregoing [*] will be suspended during
any period during which there exists a good faith dispute concerning the
compliance with the requirements of this Agreement of Borrower's request for
the Advance in question.
10.2 TERMINATION OF OPTION AGREEMENT.
(a) In the event Lender terminates the Option in
accordance with Section 1.4(b)(2) of the Option Agreement, Borrower terminates
the Option Agreement in accordance with Section 8.1(d) of the Option Agreement
or the Option expires unexercised and in any such case there is no material
Breach by Borrower or Jean Warren, Lender will promptly pay Borrower a
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
13.
<PAGE> 14
termination fee equal to the greater of (1) $1,000,000 plus all Level One
Advances then outstanding (including all accrued but unpaid interest with
respect thereto) and (2) the amount of all principal and accrued but unpaid
interest under this Agreement.
(b) In the event either party terminates the Option
Agreement pursuant to Section 8.1(b) of the Option Agreement, Lender will
promptly pay Borrower a termination fee equal to (1) fifty percent (50%) of the
aggregate amount of principal and accrued but unpaid interest then outstanding
minus (2) $350,000.
(c) Any such termination fee may be paid, at the
discretion of Lender, in cash or through cancellation of any amount owed by
Borrower or Jean Warren to Lender or through a combination thereof.
10.3 ADDITIONAL PAYMENT. In the event lender is required
to make an Additional Payment, and any portion of the proceeds hereunder are
used to fund operations, then, notwithstanding anything to the contrary
contained in the Option Agreement, "Acquisition Consideration," for purposes of
the Option Agreement, will mean the sum of (a) [*], and (e) interest at the
annual rate of [*] on the sum of (a), (b), (c) and (d) above from the Closing
Date until the date of sale.
11. MISCELLANEOUS.
11.1 GOVERNING LAW. This Agreement will be governed in all respects
by the laws of the State of California as such laws are applied to agreements
between California residents entered into and performed entirely in California.
11.2 SURVIVAL. The representations, warranties, covenants and
agreements made herein will survive any investigation made by Borrower and the
transactions contemplated hereby. All statements as to factual matters contained
in any certificate or other instrument delivered by or on behalf of Borrower
pursuant hereto in connection with the transactions contemplated hereby will be
deemed to be representations and warranties by Borrower hereunder solely as of
the date of such certificate or instrument.
11.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof will inure to the benefit of, and be binding upon,
the successors, assigns, heirs, executors and administrators of the parties
hereto.
11.4 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party will be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
11.5 SEVERABILITY. In case any provision of the Agreement is
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions will not in any way be affected or impaired thereby.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
14.
<PAGE> 15
11.6 AMENDMENT. This Agreement may be amended only by a writing
executed by Borrower and Lender.
11.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement will impair any
such right, power or remedy, nor will it be construed to be a waiver of any such
breach, default or noncompliance, or any acquiescence therein, or of any similar
breach, default or noncompliance thereafter occurring. It is further agreed that
any waiver, permit, consent or approval of any kind or character on any party's
part of any breach, default or noncompliance under this Agreement or any waiver
on such party's part of any provisions or conditions of this Agreement must be
in writing and will be effective only to the extent specifically set forth in
such writing. All remedies under this Agreement or otherwise afforded to any
party, will be cumulative and not alternative.
11.8 NOTICES. Any notice or other communication required or
permitted to be delivered to any party under this Agreement will be in writing
and will be deemed properly delivered, given and received when delivered (by
hand, by certified mail with return receipt requested, by courier or express
delivery service or by telecopier) to the address or telecopier number set forth
beneath the name of such party below (or to such other address or telecopier
number as such party shall have specified in a written notice given to the other
parties hereto):
if to Lender:
Metricom, Inc.
980 University Avenue
Los Gatos, CA 95030
Attention: William D. Swain
Telecopier: (408) 399-8274
with a copy to:
Cooley Godward Castro Huddleson & Tatum
One Maritime Plaza, 20th Floor
San Francisco, CA 94111-3580
Attention: Kenneth L. Guernsey
Telecopier: (415) 951-3699
if to Borrower:
Jean Warren
[*]
________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
15.
<PAGE> 16
with a copy to:
McAfee & Taft
Tenth Floor, Two Leadership Square
211 N. Robinson
Oklahoma City, OK 73102
Attention: Gary F. Fuller
Facsimile: (405) 235-0439
and
Lukas, McGowan, Nace & Gutierrez,
Chartered
1111 Nineteenth Street, NW
Suite 1200
Washington, DC 20036
Attention: Gerald S. McGowan and
George L. Lyon, Jr.
Facsimile: (202) 842-4485
11.9 EXPENSES. Except as provided in Section 11.10, Lender will pay
all costs and expenses that it incurs, and Jean Warren will pay all costs and
expenses that Borrower incurs (either directly or through a capital contribution
to Borrower in an amount equal to any costs and expenses paid by Borrower), with
respect to the negotiation, execution, delivery and performance of this
Agreement and the Exhibits hereto.
11.10 ATTORNEYS' FEES. In the event that any dispute among the
parties to this Agreement should result in litigation, the prevailing party in
such dispute will be entitled to recover from the losing party or parties all
fees, costs and expenses of enforcing any right of such prevailing party under
or with respect to this Agreement, including without limitation, such reasonable
fees and expenses of attorneys and accountants, which will include, without
limitation, all fees, costs and expenses of appeals.
11.11 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights and
remedies of the parties hereto will be cumulative (and not alternative). In the
event of any breach or threatened breach by any party of any covenant,
obligation or other provision set forth in this Agreement, the other party will
be entitled (in addition to any other remedy that may be available to it) to (a)
a decree or order of specific performance or mand amus to enforce the observance
and performance of such covenant, obligation or other provision, and (b) an
injunction restraining such breach or threatened breach. Neither party will be
required to provide any bond or other security in connection with any such
decree, order or injunction or in connection with any related action or
proceeding.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
16.
<PAGE> 17
11.12 TITLES AND SUBTITLES. The titles of the sections and
subsections of the Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
11.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be an original, but all of which together will
constitute one instrument.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
17.
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
METRICOM, INC. OVERALL WIRELESS COMMUNICATIONS
CORPORATION
By: /s/ Gary M. Green By: /s/ Jean Warren
--------------------------------- ----------------------------
Name: Gary M. Green Name: Jean Warren
Title: Chief Operating Officer Title: President
/s/ Jean Warren
- -------------------------------------
Jean Warren
____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
<PAGE> 19
EXHIBIT A
COLLATERAL
The Collateral will consist of all right, title and interest of
Borrower in and to the following:
(a) All goods and equipment now owned or hereafter acquired,
including, without limitation, all machinery, fixtures, vehicles (including
motor vehicles and trailers), base stations and any interest in any of the
foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing, wherever
located;
(b) All inventory, now owned or hereafter acquired, including,
without limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above, and
Borrower's Books relating to any of the foregoing;
(c) All contract rights and general intangibles now owned or
hereafter acquired, including, without limitation, goodwill, trademarks,
servicemarks, trade styles, trade names, patents, patent applications, leases,
license agreements (including specifically, but without limitation, all FCC
broadcast or other licenses, subject only to FCC approval of transfer),
franchise agreements, blueprints, drawings, purchase orders, customer lists,
route lists, infringements, claims, computer programs, computer discs, computer
tapes, literature, reports, catalogs, design rights, income tax refunds,
payments of insurance and rights to payment of any kind;
(d) All now existing and hereafter arising accounts, contract
rights, royalties, license rights and all other forms of obligations owing to
Borrower arising out of the sale or lease of goods, the licensing of technology
or the rendering of services by Borrower, whether or not earned by performance,
and any and all credit insurance, guaranties, and other security therefor, as
well as all merchandise returned to or reclaimed by Borrower and Borrower's
Books relating to any of the foregoing;
(e) All documents, cash, deposit accounts, securities, letters of
credit, certificates of deposit, instruments and chattel paper now owned or
hereafter acquired and Borrower's Books relating to the foregoing;
(f) All copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work thereof, whether published or unpublished, now owned or hereafter acquired;
all trades secret rights, including all rights to unpatented inventions,
know-how, operating manuals, license rights and agreements and confidential
information, now owned or hereafter acquired; all claims for damages by way of
any past, present and future infringement of any of the forgoing; and
(g) Any and all claims, rights and interests in any of the above
and all substitutions for, additions and accessions to and proceeds thereof.
_____________________
* Confidential treatment has been requested for portions of this document
marked with an asterisk pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. These portions have been filed
separately with the Commission.
A-1.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AND STATEMENT OF OPERATIONS CONTAINED IN
THE COMPANY'S FORM 10-Q FOR THE QUARTER ENDED JUNE 28, 1996, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-28-1996
<CASH> 6,080
<SECURITIES> 29,011
<RECEIVABLES> 2,454
<ALLOWANCES> 0
<INVENTORY> 3,811
<CURRENT-ASSETS> 42,856
<PP&E> 21,854
<DEPRECIATION> 4,210
<TOTAL-ASSETS> 73,744
<CURRENT-LIABILITIES> 6,205
<BONDS> 0
0
0
<COMMON> 13
<OTHER-SE> 65,833
<TOTAL-LIABILITY-AND-EQUITY> 73,744
<SALES> 3,718
<TOTAL-REVENUES> 4,257
<CGS> 1,946
<TOTAL-COSTS> 8,853
<OTHER-EXPENSES> 12,467
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (15,577)
<INCOME-TAX> 0
<INCOME-CONTINUING> (15,577)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,577)
<EPS-PRIMARY> (1.17)
<EPS-DILUTED> (1.17)
</TABLE>
