Exhibit 99.1
EXECUTION COPY
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "AGREEMENT") is dated as of March
28, 2003 and is entered into by and between Numerex Corp., a Pennsylvania
corporation having offices at 1600 Parkwood Circle, Atlanta, GA 30339
("NUMEREX") and BellSouth Personal Communications, LLC, a Georgia limited
liability company (the successor in interest to BellSouth Wireless, Inc.), a
wholly owned subsidiary of Cingular Wireless LLC, having offices at 5565
Glenridge Connector, Suite 2000, Atlanta, GA 30342 ("CINGULAR").
I. W I T N E S S E T H:
WHEREAS, Cingular is currently the beneficial and record owner of
625,000 shares of common stock of Numerex ("NUMEREX SHARES");
WHEREAS, Numerex and Cingular are parties to the Operating Agreement of
Cellemetry LLC, a Delaware limited liability company ("CELLEMETRY"), dated as of
May 15, 1998 (as amended by the First Amendment to Operating Agreement dated as
of November 1, 1999, the "OPERATING AGREEMENT"), pursuant to which Numerex and
Cingular own, respectively, sixty percent (60%) and forty percent (40%) of the
Percentage Interests of Cellemetry; and
WHEREAS, Cingular desires to sell to Numerex, and Numerex desires to
buy from Cingular, all of the Numerex Shares and all of Cingular's equity
interest in Cellemetry on the terms and conditions stated herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows.
1. DEFINITIONS. All capitalized terms used but not defined herein
shall have the meanings ascribed thereto in the Operating Agreement, with the
exception that any and all references to "BellSouth" in the Operating Agreement
shall mean and refer to "Cingular".
2. PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, Cingular hereby sells, assigns and transfers to Numerex, and Numerex
hereby purchases and acquires from Cingular (a) all of the Numerex Shares, and
(b) all of Cingular's Class II Shares in Cellemetry, representing 40% of the
Percentage Interests of Cellemetry (together, the "PURCHASED SHARES").
3. PURCHASE PRICE: AMOUNT AND PAYMENT.
A. AMOUNT. In consideration for the sale, assignment and
transfer of the Purchased Shares by Cingular to Numerex, Numerex shall pay to
Cingular a purchase price in the amount of Five Million Dollars (US$5,000,000)
plus interest (the "PURCHASE PRICE"). The Purchase Price shall be paid on the
Closing Date (as defined below) by the issuance, execution and delivery by
Numerex to Cingular of a secured promissory note in the form and substance of
Exhibit A hereto (the "NOTE") together with a security agreement in the form and
substance of Exhibit B hereto (the "SECURITY AGREEMENT"), all in accordance with
SECTION 5 below.
B. THE NOTE. On the Closing Date, Numerex shall issue to
Cingular the original copy of the Note. The Note shall be issued in the original
principal amount equal to the Purchase Price, and shall accrue interest from the
date thereof through and until December 15 2004 (the "MATURITY DATE") at the
rate of eight percent (8.00%) per annum. The Note shall rank senior in right of
payment to all other secured and unsecured obligations of Numerex.
C. THE SECURITY AGREEMENT. Numerex' obligations under
the Note shall be secured by a first priority lien on all of the assets and the
stock or membership interests of Numerex and its subsidiaries pursuant to the
terms of the Security Agreement; except, that Numerex shall not be required to
grant any security interest with respect to the stock or assets of its
subsidiary, Digilog, Inc., a Pennsylvania corporation.
4. CLOSING. Consummation of the purchase and sale of the
Purchased Shares contemplated in this Agreement (the "CLOSING") shall take place
immediately after the execution of this Agreement at the office of Cingular, at
10:00 a.m. Atlanta, Georgia time, on March 27, 2003 (the "CLOSING DATE"). All
deliveries, payments and other documents relating to the transactions
contemplated hereby shall be interdependent and none shall be effective unless
and until all are effective (except to the extent that the party entitled to the
benefit thereof has waived satisfaction or performance thereof as a condition
precedent to the Closing)
A. DELIVERIES AT THE CLOSING. At the Closing:
i. Cingular shall surrender all of the
Purchased Shares by delivery of original stock certificates
representing the Purchased Shares, duly endorsed for transfer to
Numerex or attaching stock powers or other instruments of transfer
relating thereto, executed in blank;
ii. In consideration for such surrender and in
satisfaction of the Purchase Price, Numerex shall deliver to Cingular
the fully executed Note and the fully executed Security Agreement;
iii. All representatives of Cingular who serve
on Cellemetry's Board, on any committees thereof or as Class II
Managers or officers of Cellemetry, shall submit their resignations,
with immediate effect;
iv. Numerex shall deliver to Cingular a
certificate of the Secretary or an Assistant Secretary of Numerex,
certifying that attached thereto is a
true and complete copy of resolutions adopted by the board of directors
of Numerex, authorizing the execution, delivery and performance of the
Transaction Documents; and
v. The parties shall deliver to each other such
other documents, instruments and agreements as could be reasonably
requested by the parties.
B. AGREEMENTS RELATING TO THE CLOSING; CARRIER
AGREEMENT. The parties covenant and agree to undertake all action that may be
necessary or desirable to effectuate the transfer of all Cellemetry interests
and assets into the name of Cellemetry or Numerex, as applicable. In addition,
Numerex hereby acknowledges and agrees that if Numerex is in default under the
terms of the Note, then in addition to any and all remedies Cingular may have
under the Note, the Security Agreement or otherwise, Cingular shall have the
right, exercisable at its sole discretion upon written notice to Numerex, to
terminate that certain Carrier Agreement, dated February 9, 1998.
C. TERMINATION OF THE OPERATING AGREEMENT. At the
Closing, the Operating Agreement shall terminate in its entirety and shall have
no further force and effect, and the parties' respective rights and obligations
with respect to Cellemetry shall be as specified in this SECTION 4.C. At the
Closing, each of Cingular, Numerex and Cellemetry shall be relieved of any
obligations of any nature (including but not limited to indemnification
obligations) that it had to any other party, arising under the Operating
Agreement or otherwise, that accrued or were outstanding prior to the Closing
Date or otherwise explicitly survive termination of the Operating Agreement;
except that the limited licenses specified in Section 6 below shall survive the
execution and delivery of this Agreement and the Closing and shall be maintained
indefinitely, as set forth in SECTION 6 below.
. D. DELIVERY OF THE PURCHASED SHARES. On the Closing
Date, Cingular shall surrender the Purchased Shares to Numerex, free and clear
of all Liens (as defined in SECTION 5.B.VII below), by delivering to Numerex all
of the certificates representing the Purchased Shares, each of which shall be
properly endorsed for transfer or accompanied by appropriate stock powers or
other instruments of transfer executed in blank. Appropriate notation reflecting
Cingular's sale of the Purchased Shares will be made in the stock transfer
ledger of Numerex and the membership ledger of Cellemetry.
5. REPRESENTATIONS AND WARRANTIES.
A. REPRESENTATIONS AND WARRANTIES OF NUMEREX. Numerex
hereby represents and warrants to Cingular that the following statements are
true and correct:
i. CORPORATE EXISTENCE. Numerex is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Pennsylvania and has all requisite corporate power and authority and is entitled
to conduct its business and to own or lease its properties. Numerex has all
requisite corporate power and authority to execute, deliver and to perform all
of its obligations under this Agreement, the Note and the Security Agreement
(collectively, the "TRANSACTION DOCUMENTS").
ii. AUTHORIZATION; NO CONFLICT. The execution, delivery
and performance by Numerex of the Transaction Documents are within its corporate
powers, have been duly authorized by all necessary and appropriate corporate
action, and have been duly and validly executed and delivered by Numerex.
iii. BINDING OBLIGATIONS. Each of the Transaction
Documents constitutes a legal, valid and binding obligation of Numerex,
enforceable against it in accordance with the terms thereof, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
iv. NO VIOLATION. The execution, delivery and performance
by Numerex of each Transaction Document do not and will not violate any
provision of any applicable law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect ("LAWS"), or
result in a breach of or constitute a default under any indenture or loan or
credit agreement or any other material agreement, lease or instrument to which
Numerex is a party or by which its properties may be bound or affected
("MATERIAL AGREEMENT"); and Numerex is not in default under any Laws or Material
Agreement (where such default has a material adverse effect on Numerex).
v. APPROVALS. No consent of any person or entity and no
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required in connection with the
execution, delivery or performance of any Transaction Document that has not been
obtained.
vi. LITIGATION. No action, suit or proceeding is pending or,
threatened against Numerex before any court or governmental authority which
relates to any Transaction Document or any action to be taken pursuant thereto.
vii. COMPLIANCE WITH LAWS. Numerex is in compliance in all material
respects with all laws, rules, regulations and requirements of any governmental
authority applicable to its business and properties.
B. REPRESENTATIONS AND WARRANTIES OF CINGULAR. Cingular
hereby represents and warrants to Numerex that the following statements are true
and correct as of the date hereof:
i. CORPORATE EXISTENCE. Cingular is a limited liability
company duly organized and validly existing and in good standing under the laws
of the State of Delaware and has all requisite power and authority and is
entitled to conduct its business and to own its properties. Cingular has all
requisite power and authority to execute, deliver and perform all of its
obligations under the Transaction Documents.
ii. AUTHORIZATION; NO CONFLICT. The execution, delivery
and performance by Cingular of the Transaction Documents are within its powers,
have been duly authorized by all necessary action and have been duly and validly
executed and delivered by Cingular.
iii. BINDING OBLIGATIONS. The Transaction
Documents constitute a legal, valid and binding obligation of Cingular,
enforceable against it in accordance with the terms thereof, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or
at law).
iv. APPROVALS. No consent of any person or
entity and no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
is required in connection with the execution, delivery or performance
of the Transaction Documents that has not been obtained.
v. LITIGATION. No action, suit or proceeding is pending
or, threatened against Cingular before any court or governmental authority which
relates to the Transaction Documents or any action to be taken pursuant thereto.
vi. COMPLIANCE WITH LAWS. Cingular is in
compliance in all material respects with all laws, rules, regulations
and requirements of any governmental authority applicable to its
business and properties.
vii. LIENS ON PURCHASED SHARES. Cingular owns,
beneficially and of record, all of the Purchased Shares, free and clear
of any restrictions on transfer (other than restrictions arising under
this Agreement or under the federal or state securities laws), claims,
taxes, pledges, liens, hypothecations, encumbrances, options, warrants,
rights, contracts, calls, puts, shareholder agreements, subscription
agreements, voting trust agreements, proxies, securities convertible or
exchangeable into or for the Purchased Shares or other commitments or
agreements of any kind created by or through Cingular (collectively,
the "LIENS"), involving the voting, issuance, redemption, sale,
exchange, transfer, conversion or any other rights or restrictions
affecting the Purchased Shares.
6. SURVIVAL OF CERTAIN LIMITED LICENSES . Notwithstanding
anything in SECTION 4.C hereof to the contrary, Numerex and Cingular hereby
confirm that:
A. CINGULAR LICENSE. With respect to the patents and
patent applications set forth in Schedule 4.6(b)(i) to the Operating Agreement
that were transferred to Cellemetry by Cingular, including any continuations,
continuations-in-part or divisional applications or patents thereof, and any
additional international patents or applications corresponding thereto, Cingular
holds and shall continue to hold a limited, world-wide royalty-free license to
(i) make, use, offer for sale or sell products or services where the
manufacture, use or sale thereof is only incidentally covered by the claims of
such patents and patent applications and (ii) use Cellemetry Technology for its
and its affiliates' internal use provided that Cingular's use of the Cellemetry
Technology cannot be commercially applied nor revenue generative for Cingular;
and
B. NUMEREX LICENSE. With respect to the patents and
patent applications set forth in Schedule 5.6 to the Operating Agreement that
were licensed to Cellemetry by Cingular, including any continuations,
continuations-in-part or divisional applications or patents thereof, and any
additional international patents or applications corresponding thereto,
Cellemetry shall hold and continue to hold a limited, world-wide royalty-free
license to make, use, have made, sell or offer for sale, products, systems or
services under such patents and patent application, provided, however, that such
license shall only apply to the extent such patents are required to make, use or
sell Cellemetry Technology.
7. MISCELLANEOUS.
A. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopier)
and shall be effective (a) if given by mail, when deposited in the mails or (b)
if given by telecopier, when so telecopied. Notices hereunder shall be mailed or
telecopied as follows:
If to Numerex Corp.: Numerex Corp.
1600 Parkwood Circle
Atlanta, GA 30339
Attention: President
Telecopy No.: (770) 693-5951
with a copy to : Andrew Ryan, Esq.
Salisbury & Ryan
1325 Avenue of the Americas
New York, NY 10019
Telecopy No.: (212) 977-4668
If to Cingular: BellSouth Personal Communications LLC
a/k/a Cingular Wireless
5565 Glenridge Connector
Suite 2000
Atlanta, GA 30342
Attn: William Kreisher
Telecopy No.: (404) 235-6324
with a copy to: Cingular Wireless LLC
5565 Glenridge Connector
Suite 1700
Atlanta, GA 30342
Attn: Mila A. Ostin, Esq.
Telecopy No.: (404) 236-5574
B. NO WAIVER. No delay or failure on the part of any
party hereto to exercise any right, power or privilege granted under this
Agreement or any other Transaction Document
or available at law or in equity, shall impair any such right, power or
privilege or be construed as a waiver of any default or any acquiescence
therein. No single or partial exercise of any such right, power or privilege
shall preclude the further exercise of such right, power or privilege. No waiver
shall be valid against any party unless made in writing and signed thereby, and
then only to the extent expressly specified therein.
C. EXPENSES. Each of the parties shall all of its own
costs and expenses (including without limitation attorneys' fees and expenses)
incurred in connection with the negotiation, execution, delivery and enforcement
of this Agreement and the other Transaction Documents.
D. AMENDMENTS. Any provision or right under this
Agreement or the other Transaction Documents may be amended or waived by any
party thereto only if such amendment or waiver is in writing and is signed by
both parties.
E. SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided, that neither party may
assign or otherwise transfer any of its rights or obligations under this
Agreement or any other Transaction Document to any person or entity without the
prior written consent of the other party.
F. FURTHER ASSURANCES. Each party hereto shall, at its
own expense, promptly execute and deliver all such other and further documents,
agreements and instruments in compliance with or accomplishment of the covenants
and agreements of such party contained herein, all as may be reasonably
necessary or appropriate in connection herewith.
G. SEVERABILITY. If any part of any provision contained
in this Agreement shall be invalid or unenforceable under applicable law, said
part shall be ineffective to the extent of such invalidity only, without in any
way affecting the remaining parts of said provision or the remaining provisions.
H. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which, taken together, shall constitute one and the same instrument.
I. NEUTRAL CONSTRUCTION. The parties have negotiated
this Agreement and all of the terms and conditions contained herein in good
faith and at arms' length, and each party has been represented by counsel during
such negotiations. No term, condition or provision contained in this Agreement
shall be construed against any party or in favor of any party (x) because such
party or such party's counsel drafted, revised, commented upon or did not
comment upon, such term, condition or provision; or (y) because of any
presumption as to any inequality of bargaining power between or among the
parties. Furthermore, all terms, conditions and provisions contained in this
Agreement shall be construed and interpreted in a manner which is consistent
with all other terms, conditions and provisions contained in this Agreement.
J. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
GEORGIA (WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS).
K. JURISDICTION AND VENUE. EACH OF THE PARTIES HERETO
AGREES, WITHOUT POWER OF REVOCATION, THAT ANY CIVIL SUIT OR ACTION BROUGHT
AGAINST IT AS A RESULT OF ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR UNDER
ANY OTHER TRANSACTION DOCUMENT TO WHICH IT IS A PARTY MAY BE BROUGHT AGAINST IT
EITHER IN THE SUPREME COURT OF GEORGIA SITTING IN ATLANTA, OR IN THE UNITED
STATES DISTRICT COURT LOCATED IN ATLANTA, GEORGIA. EACH OF THE PARTIES HERETO
IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTIONS THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF SUCH CIVIL SUIT OR ACTION AND ANY
CLAIM THAT SUCH CIVIL SUIT OR ACTION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH OF THE PARTIES HERETO AGREES THAT FINAL JUDGMENT IN ANY SUCH CIVIL SUIT OR
ACTION SHALL BE CONCLUSIVE AND BINDING UPON IT AND SHALL BE ENFORCEABLE AGAINST
IT BY SUIT UPON SUCH JUDGMENT IN ANY COURT OF COMPETENT JURISDICTION.
L. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE THE RIGHT EITHER OF
THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION, WHETHER IN
CONTRACT OR TORT, AT LAW OR EQUITY, BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT AND ANY OTHER DOCUMENT OR INSTRUMENT CONTEMPLATED
TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO THIS
AGREEMENT. FURTHER, EACH PARTY HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT
OF THE OTHER PARTY, NOR THEIR COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH PARTY WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS
WAIVER OF RIGHT TO JURY TRIAL PROVISION.
M. ENTIRE AGREEMENT This Agreement, the Note and the
Security Agreement together with any exhibits and schedules attached hereto and
thereto, constitute the entire understanding of the parties with respect to the
subject matter hereof and thereof, and any other prior or contemporaneous
agreements, whether written or oral, with respect hereto or thereto are
expressly superseded hereby.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their authorized officers all as of the day and year first above
written.
NUMEREX CORP.
By: /s/ Stratton J. Nicolaides
----------------------------------------
Name: Stratton J. Nicolaides
Title: Chief Executive Officer
BELLSOUTH PERSONAL COMMUNICATIONS, LLC
By CINGULAR WIRELESS LLC
Its sole member
By: /s/ Stephen L. McGaw
-----------------------------------------
Name: Stephen L. McGaw
Title: Senior Vice President - Corporate
Development