ASSET PURCHASE AGREEMENT
BY AND BETWEEN
ACC-ARIZONA CELLULAR COMMUNICATIONS, INC.
("SELLER")
AND
▇▇▇▇▇▇ CELLULAR OF IMPERIAL, INC.
("PURCHASER")
DATED AS OF SEPTEMBER 8, 1999
TABLE OF CONTENTS
ARTICLE I - PURCHASE AND SALE. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II - DESCRIPTION OF ASSETS; EXCLUDED ASSETS. . . . . . . . . . . . . . . . .2
SECTION 2.01. ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 2.02. EXCLUDED ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE III - ASSUMPTION OF LIABILITIES. . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE IV - INSTRUMENTS OF TRANSFER AND ASSUMPTION. . . . . . . . . . . . . . . . .4
SECTION 4.01. TRANSFER DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 4.02. ASSUMPTION DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE V - PURCHASE PRICE; ALLOCATION . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 5.01. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 5.02. DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 5.03. PAYMENT OF PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . . .5
SECTION 5.04. ALLOCATION OF PURCHASE PRICE . . . . . . . . . . . . . . . . . . . .5
SECTION 5.05. PURCHASE PRICE ADJUSTMENT. . . . . . . . . . . . . . . . . . . . . .6
ARTICLE VI - CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 6.01. PRIMARY CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 6.02. FINAL CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
ARTICLE VII - SELLER'S REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . .9
SECTION 7.01. ORGANIZATION; QUALIFICATION; SUBSIDIARIES. . . . . . . . . . . . . .9
SECTION 7.02. CONSENTS, AUTHORIZATION, EXECUTION AND DELIVERY OF AGREEMENT . . . .9
SECTION 7.03. TITLE TO ASSETS; CONDITION OF ASSETS . . . . . . . . . . . . . . . .9
SECTION 7.04. REAL PROPERTY - OWNED . . . . . . . . . . . . . . . . . . . . . . .10
SECTION 7.05. REAL AND PERSONAL PROPERTY - LEASED . . . . . . . . . . . . . . . .10
SECTION 7.06. EXISTING CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . .10
SECTION 7.07. GOVERNMENTAL LICENSES . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 7.08. COMPLIANCE WITH LAWS. . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 7.09. NO VIOLATION OF EXISTING AGREEMENTS . . . . . . . . . . . . . . . .12
SECTION 7.10. LITIGATION AND LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . .12
SECTION 7.11. ENVIRONMENTAL COMPLIANCE. . . . . . . . . . . . . . . . . . . . . .12
SECTION 7.12. LABOR MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 7.13. EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 7.14. TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 7.15. FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 7.16. SUBSCRIBERS/AGENTS. . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 7.17. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 7.18. BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 7.19. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 7.20. UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . . . . . . . . .16
SECTION 7.21. ACCOUNTS RECEIVABLE AND BAD DEBTS . . . . . . . . . . . . . . . . .17
SECTION 7.22. YEAR 2000 COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 7.23. DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE VIII - PURCHASER'S REPRESENTATIONS. . . . . . . . . . . . . . . . . . . . .17
SECTION 8.01. ORGANIZATION; QUALIFICATION . . . . . . . . . . . . . . . . . . . .17
SECTION 8.02. CONSENTS; AUTHORIZATION; EXECUTION AND DELIVERY OF AGREEMENT. . . .17
SECTION 8.03. LITIGATION AND LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . .17
SECTION 8.04. BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
ARTICLE IX - SELLER'S AND PURCHASER'S AFFIRMATIVE COVENANTS . . . . . . . . . . . .18
SECTION 9.01. FINANCIAL STATEMENTS AND CELLULAR SYSTEM INFORMATION. . . . . . . .18
SECTION 9.02. ACCESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 9.03. CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 9.04. GOVERNMENTAL APPROVALS. . . . . . . . . . . . . . . . . . . . . . .21
SECTION 9.05. THIRD PARTY CONSENTS; CLOSING CONDITIONS. . . . . . . . . . . . . .21
SECTION 9.06. INTENTIONALLY OMITTED . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 9.07. NO SHOPPING . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 9.08. SUPPLEMENTAL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . .22
SECTION 9.09. LITIGATION MATTERS. . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 9.10 EMPLOYEE MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 9.11. RETURN OF ASSETS ON TERMINATION AFTER PRIMARY CLOSING . . . . . . .23
ARTICLE X - CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO PRIMARY CLOSING . . .23
SECTION 10.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF THIS
AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 10.02. DIRECTORS RESOLUTIONS . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 10.03. INCUMBENCY CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . .23
SECTION 10.04. THIRD PARTY CONSENT; FCC GRANT. . . . . . . . . . . . . . . . . . .24
SECTION 10.05. NO MATERIAL ADVERSE CHANGE. . . . . . . . . . . . . . . . . . . . .24
SECTION 10.06. OPINION OF COUNSEL TO SELLER. . . . . . . . . . . . . . . . . . . .24
SECTION 10.07. OPINIONS OF FCC COUNSEL TO SELLER. . . . . . . . . . . . . . . . .24
SECTION 10.08. SAB EXTENSIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 10.09. RELATED AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . .25
ARTICLE XI - CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO PRIMARY CLOSING . . . .24
SECTION 11.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF THIS
AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 11.02. DIRECTORS' RESOLUTIONS. . . . . . . . . . . . . . . . . . . . . . .25
SECTION 11.03. INCUMBENCY CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . .25
SECTION 11.04. ▇▇▇▇-▇▇▇▇▇ ACT. . . . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 11.05. OPINION OF COUNSEL TO PURCHASER . . . . . . . . . . . . . . . . . .25
ARTICLE XII - CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION AT FINAL CLOSING . . .25
SECTION 12.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF THIS
AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 12.02. OPINION OF FCC COUNSEL TO SELLER. . . . . . . . . . . . . . . . . .25
ARTICLE XIII - CASUALTY LOSSES. . . . . . . . . . . . . . . . . . . . . . . . . . .26
ARTICLE XIV - INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 14.01. INDEMNIFICATION BY SELLER . . . . . . . . . . . . . . . . . . . . .26
SECTION 14.02. INDEMNIFICATION BY PURCHASER. . . . . . . . . . . . . . . . . . . .27
SECTION 14.03. NOTICE OF CLAIMS; DEFENSE OF THIRD PARTY. . . . . . . . . . . . . .27
SECTION 14.04. PURCHASE ESCROW AGREEMENT . . . . . . . . . . . . . . . . . . . . .28
SECTION 14.05. LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
ARTICLE XV - CONFIDENTIALITY AND PRESS RELEASES . . . . . . . . . . . . . . . . . .29
SECTION 15.01. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 15.02. PRESS RELEASES. . . . . . . . . . . . . . . . . . . . . . . . . . .29
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SECTION 15.03. DISCLOSURES REQUIRED BY LAW . . . . . . . . . . . . . . . . . . . .29
ARTICLE XVI - TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 16.01. TERMINATION PRIOR TO FINAL CLOSING. . . . . . . . . . . . . . . . .30
ARTICLE XVII - BROKERS' FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . .31
ARTICLE XVIII - WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . .31
ARTICLE XIX - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 19.01. ADDITIONAL INSTRUMENTS OF TRANSFER. . . . . . . . . . . . . . . . .31
SECTION 19.02. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 19.03. EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 19.04. TRANSFER TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 19.05. COLLECTION PROCEDURES . . . . . . . . . . . . . . . . . . . . . . .33
SECTION 19.06. SPECIFIC PERFORMANCE. . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 19.07. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 19.08. ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 19.09. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . . . .34
SECTION 19.10. AMENDMENTS; WAIVERS . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 19.12. ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 19.13. THIRD PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 19.14. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Section 19.15. Section Headings. . . . . . . . . . . . . . . . . . . . . . . . . .35
Section 19.16. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . .35
Section 19.17. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . .35
Section 19.18. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . .35
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DEFINED TERMS
TERM SECTION CITE
---- ------------
Algreg Proceeding Article III
Asserting Party 14.03
Assets 2.01
Assumed Liabilities Article III
Assumption Agreement 4.02
Authorizations 7.07
Base Price 5.01
▇▇▇▇ of Sale and Assignment 4.01
Business Recitals
Cellular System Recitals
CERCLA 7.11(b)
Claims Article XIII
Code 7.13
Controlled Group Member 7.13
Defending Party 14.03
Defined Benefit Pension Plan 7.13
Deposit 5.02
Deposit Escrow Agreement 5.02
Employee Benefit Plans 7.13
Employee Pension Plans 7.13
Environmental Laws 7.11(c)
ERISA 7.13
ERISA Affiliate 7.13
Escrow Agent 5.02
Escrowed Amount 5.03
Excluded Assets 2.02(a)
Excluded Contracts 7.06
Existing Contracts 7.06
FCC Recitals
FCC Authorization Recitals
Final Closing 6.01
Final Closing Date 6.02
Final Order 6.02
Hazardous Substance 7.11(b)
Indemnified Purchaser Parties 14.01(a)
Indemnity Escrow Amount 5.03
Independent Accountants 5.05(c)
Interest or Interests 9.05
Liens Article I
Liquidated Damages Amount 5.02
Material Adverse Effect 7.06
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Multiemployer Plan 7.13
Non-Assumed Liabilities Article III
PBGC 7.13
Permitted Liens Article I
Primary Closing 6.01
Primary Closing Date 6.01
Purchase Escrow Account 5.03
Purchase Escrow Agreement 5.03
Purchase Price 5.01
Purchaser Introduction
RCLA 7.11(b)
RCRA 7.11(b)
RSA RECITALS
Retained Employees 9.10
Seller Introduction
Seller's Estimate 5.05(c)
Size of Person Test 7.19
Third Party Claim 14.03
Working Capital Adjustment 5.05(b)
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SCHEDULES
---------
A MAP OF CELLULAR SYSTEM
1 PERMITTED LIENS
2.01(a) CONTRACTS AND LICENSES
2.01(c) TANGIBLE PERSONAL PROPERTY
2.01(d) REAL PROPERTY LEASEHOLDS
2.01(f) INTANGIBLE PERSONAL PROPERTY
2.02 EXCLUDED ASSETS
7.03 LIENS
7.07 GOVERNMENTAL LICENSES
7.08 COMPLIANCE WITH LAWS
7.10 LITIGATION
7.12 EMPLOYEES
7.13 EMPLOYEE BENEFITS
7.14 TAX MATTERS
7.15(a)(i) HISTORICAL FINANCIAL STATEMENTS
7.15(a)(ii) CURRENT FINANCIAL STATEMENTS
7.15(c) SUBSEQUENT EVENTS
7.16 SUBSCRIBERS/AGENTS
7.17 INSURANCE
7.21 ACCOUNTS RECEIVABLE AGING
9.05(a) FORM OF LANDLORD CONSENT
9.05(b) FORM OF LANDLORD CONSENT AND ESTOPPEL CERTIFICATE
9.10 RETAINED EMPLOYEES
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EXHIBITS
--------
A. ▇▇▇▇ OF SALE AND ASSIGNMENT
B. ASSUMPTION AGREEMENT
C. DEPOSIT ESCROW AGREEMENT
D. PURCHASE ESCROW AGREEMENT
E. OPINION OF COUNSEL FOR SELLER
F. OPINION OF FCC COUNSEL FOR SELLER TO BE DELIVERED AT PRIMARY CLOSING
G. OPINION OF FCC COUNSEL FOR SELLER TO BE DELIVERED AT FINAL CLOSING
H. OPINION OF COUNSEL FOR PURCHASER
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of the 8th day of
September, 1999, by and between ACC-ARIZONA CELLULAR COMMUNICATIONS, INC., a
Nevada corporation doing business as Cellular One/Mohave ("Seller"), and ▇▇▇▇▇▇
CELLULAR OF IMPERIAL, INC., an Oklahoma corporation ("Purchaser").
R E C I T A L S
WHEREAS, Seller is the owner of that certain license issued under call
sign KNKN268 (the "FCC Authorization") granted by the Federal Communications
Commission (the "FCC") to provide a block A cellular telecommunications service
in portions of RSA #1 (such portions, the "RSA") in Mojave County, Arizona, as
more particularly depicted on the map attached hereto as Schedule A; and
WHEREAS, Seller owns all rights to develop, construct, own and operate a
cellular system (the "Cellular System") in the RSA (the "Business").
WHEREAS, Purchaser desires to purchase from Seller, and Seller desires to
sell to Purchaser, substantially all of the assets of Seller relating to the
Business, including assets acquired by Seller after the date hereof until the
Primary Closing Date, all subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein set forth and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I
PURCHASE AND SALE
Except as otherwise provided and subject to the terms and conditions set
forth in this Agreement, Seller agrees to sell, convey, assign, transfer and
deliver to Purchaser, and Purchaser agrees to purchase from Seller at the
Primary Closing, all of Seller's right, title and interest in and to the Assets
(as defined in Section 2.01 hereof), free and clear of all security interests,
liens, pledges, charges, rights of third parties and encumbrances of every kind
(collectively, "Liens") other than Permitted Liens. As used herein, the term
"Permitted Liens" means (i) any Lien for taxes and assessments not yet past due
or otherwise being contested in good faith and for which appropriate reserves
have been established and will be taken into account in the Working Capital
Adjustment, (ii) any Liens represented by easements, rights of way,
restrictions, installations or public utilities, title imperfections and
restrictions, reservations in land patents, zoning ordinances or other similar
Liens which do not and will not individually or in the aggregate, materially
interfere with the use by Seller or Purchaser of the property subject thereto or
affected thereby, (iii) as to leaseholds, interests of the lessors thereof and
Liens affecting the interests of such lessors and (iv) any Lien set forth on
SCHEDULE 1 attached hereto.
ARTICLE II
DESCRIPTION OF ASSETS; EXCLUDED ASSETS
SECTION 2.01. ASSETS. The assets to be conveyed to Purchaser shall
include all real and personal tangible and intangible assets, properties and
business owned or used by Seller of whatever description, which relate in any
way to the ownership, use or operation of the Business, including all property
and rights acquired or obtained by Seller from the date hereof through the date
of the Primary Closing, other than the assets excluded pursuant to Section 2.02
hereof (collectively, the "Assets"). Such Assets shall be free and clear of all
Liens other than Permitted Liens. Such Assets shall include, without
limitation:
(a) All licenses (including the FCC Authorization), leases,
agreements, permits, authorizations, consents and other contracts, revenue
sharing and like agreements, agreements for the reception or transmission of
signals by microwave, easements, appurtenances, rights-of-way and construction
permits; all right, title and interest, if any, in and to all streets, roads and
public places, open or proposed; all agreements between Seller and suppliers,
cellular telephone service companies and subscribers (including subscriber
deposits), and all other similar rights and agreements (including so-called
roaming agreements), which in any way may relate to or concern the operation by
Seller of the Business, all as more particularly described on SCHEDULE 2.01(a)
attached hereto.
(b) All files of correspondence, lists, records and reports
concerning (i) subscribers and prospective subscribers of the Business and (ii)
all dealings with Federal, state and local regulatory agencies with respect to
the Business, including, but not limited to, all reports filed by or on behalf
of Seller with the FCC.
(c) All towers, tower equipment, antennas, switching and cell site
equipment and buildings, construction in progress, microwave equipment, testing
equipment, motor vehicles, office equipment, furniture and fixtures, supplies,
inventory and other physical assets, if any, used in or relating to the
Business, and all modifications, additions, restorations or replacements of the
whole or any part thereof, substantially all of which tangible assets as of the
date hereof are described on SCHEDULE 2.01(c) attached hereto.
(d) All real property leaseholds and other interests in real
property (including leases and licenses of towers and tower space) of Seller
used in or relating to the Business, as described on SCHEDULE 2.01(d) attached
hereto.
(e) All right, title and interest to engineering records, files,
data, drawings, blueprints, schematics, maps, reports, lists and plans and
processes intended for use in connection with the Business.
(f) All right, title and interest to intangible personal property
used in or relating to the Business, including all rights, patents and
copyrights used by Seller, and all of the rights of Seller associated therewith
(including any and all applications, registrations, extensions
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and renewals thereof), and such rights, patents and copyrights as are
described on SCHEDULE 2.01(f) attached hereto.
(g) All prepayments and prepaid expenses.
(h) All claims, causes of action, choses in action, rights of
recovery and rights of set-off of any kind, except to the extent described in
Section 2.02(b) or on Schedule 2.02.
(i) The right to receive and retain mail, accounts receivable
payments and other communications.
(j) The right to ▇▇▇▇ and receive payment for products shipped or
delivered and/or services performed but unbilled or unpaid as of the Primary
Closing.
(k) All advertising, marketing and promotional materials and all
other related printing or written materials.
(l) All subscriber notes receivable (if any) and accounts
receivable (including subscriber receivables and roaming revenue receivables).
(m) All rebates from vendors.
(n) All goodwill as a going concern.
(o) Any assets of the type described above which are acquired
after the date hereof but prior to the Primary Closing.
SECTION 2.02. EXCLUDED ASSETS. (a) The properties and assets described
in SCHEDULE 2.02 attached hereto and in Section 2.02(b) of this Agreement shall
be retained by Seller and shall not be sold, assigned or transferred to
Purchaser (the "Excluded Assets").
(b) Anything in this Agreement to the contrary notwithstanding,
the Assets sold to Purchaser pursuant to the terms of this Agreement shall not
include Seller's corporate records, books of account, cash, bank deposits or
cash equivalents of Seller at the time of the Primary Closing.
ARTICLE III
ASSUMPTION OF LIABILITIES
As of the Primary Closing, Purchaser shall assume and agree to perform and
discharge the following as they become due for all periods from and after the
date of the Primary Closing, to the extent not previously performed or
discharged: (i) all obligations of Seller which accrue and are to be performed
from and after the Primary Closing under those permits, authorizations,
licenses, leases, rights of way, easements and other agreements related to the
Business listed on SCHEDULES 2.01(a), 2.01(c) and 2.01(d); and (ii) all other
obligations of Seller entered into during
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the period from the date hereof to the Primary Closing by Seller and
identified to and consented by Purchaser and specifically assumed by
Purchaser at the Primary Closing (all of such permits, authorizations,
licenses, leases, rights of way, easements and other agreements referred to
in items (i) and (ii) being referred to hereinafter as the "Assumed
Liabilities"). Purchaser shall not be liable for any liabilities, debts,
contracts, agreements, including without limitation any contracts or
agreements set forth on Schedule 2.02, or other obligations of Seller of any
nature whatsoever other than the Assumed Liabilities and it is expressly
understood that Purchaser shall not assume, and shall not be liable for any
of Seller's expenses or obligations relating to or accruing by reason of the
proceedings relating to the FCC Authorization in FCC CC Docket 91-142 (the
"Algreg Proceeding"), including any obligations relating to any settlement
thereof (such other liabilities, debts, contracts, agreements or other
obligations of Seller other than the Assumed Liabilities being referred to as
the "Non-Assumed Liabilities").
ARTICLE IV
INSTRUMENTS OF TRANSFER AND ASSUMPTION
SECTION 4.01. TRANSFER DOCUMENTS. At the Primary Closing, Seller will
deliver to Purchaser (a) a ▇▇▇▇ of Sale and Assignment in substantially the form
attached hereto as EXHIBIT A (the "▇▇▇▇ of Sale and Assignment"), (b) all such
other good and sufficient instruments of sale, transfer and conveyance, in such
form and including such matters as Purchaser shall reasonably request, as shall
be effective to vest in Purchaser all of Seller's right and title to, and
interest in, the Assets; and (c) all contracts and commitments, instruments,
books and records (except as otherwise provided in Section 2.02 hereof) and
other data relating to the Assets, business and operations of Seller.
SECTION 4.02. ASSUMPTION DOCUMENTS. At the Primary Closing, Purchaser
and Seller will execute and deliver an Assumption Agreement in substantially the
form attached hereto as EXHIBIT B (the "Assumption Agreement") in order to
effect the assumption of the Assumed Liabilities by Purchaser.
ARTICLE V
PURCHASE PRICE; ALLOCATION
SECTION 5.01. PURCHASE PRICE. The total purchase price for the Assets
shall be Twenty-Four Million Dollars ($24,000,000). (The "BASE PRICE"), as
adjusted in accordance with the provisions of Section 5.05 hereof (as adjusted,
the "PURCHASE PRICE").
SECTION 5.02. DEPOSIT. Purchaser has deposited into escrow with Chase
Manhattan Trust Company, National Association (the "Escrow Agent") One Million
Dollars ($1,000,000) (the "Deposit"). The Deposit is being held and invested
and will be disbursed pursuant to the terms of the Deposit Escrow Agreement, a
copy of which is attached hereto as EXHIBIT C (the "Deposit Escrow Agreement").
If the Primary Closing occurs (i) the earnings on the Deposit shall be paid to
Purchaser in accordance with the Deposit Escrow Agreement, and (ii) the Deposit
shall be retained in the escrow account, such amount to be administered in
accordance with the Purchase Escrow Agreement (as defined below). If Seller
terminates this Agreement in accordance with
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the provisions of Section 16.01(e) prior to the Primary Closing, and at the
time of such termination Seller is not in breach of any of its
representations, warranties, covenants or agreements set forth in this
Agreement and the conditions set forth in Section 10.04 have been satisfied,
then Seller shall be entitled to the Deposit as liquidated damages (the
"Liquidated Damages Amount"), which Liquidated Damages Amount the parties
agree is a fair and reasonable measure of the damages that Seller would
sustain as a result of such termination. Notwithstanding anything else set
forth in this Section 5.02, Seller's sole and exclusive recourse in the event
Seller terminates this Agreement in accordance with the provisions of Section
16.01(e) prior to the Primary Closing, including as a result of Purchaser's
breach of its representations or obligations under this Agreement prior to
the Primary Closing, shall be to receive the Deposit. If for any other
reason the Primary Closing does not occur, then the Deposit and all earnings
thereon shall be paid to Purchaser. All payments by the Escrow Agent shall
be made in accordance with the procedures and other provisions set forth in
the Deposit Escrow Agreement.
SECTION 5.03. PAYMENT OF PURCHASE PRICE. On the Primary Closing Date and
subject to the terms and conditions set forth in this Agreement, in reliance on
the representations, warranties, covenants and agreements of the parties
contained herein and in consideration of the sale of the Assets, Purchaser will
pay the Purchase Price LESS the amount of $250,000 (the "Early Release Amount")
and the Deposit into an account (the "Purchase Escrow Account") maintained by
the Escrow Agent, and such amount, along with the Deposit, will be held,
invested and disbursed pursuant to the terms of the Purchase Escrow Agreement
substantially in the form of EXHIBIT D attached hereto (the "Purchase Escrow
Agreement"), whereupon the Deposit Escrow Agreement shall terminate. The Early
Release Amount shall be paid to Seller on the Primary Closing Date by wire
transfer of immediately available funds. Seller shall be paid the earnings on
amounts held pursuant to the Purchase Escrow Agreement on a quarterly basis. In
the event this Agreement is terminated after the Primary Closing for any reason
under Article XVI of this Agreement, (i) the funds held pursuant to the Purchase
Escrow Agreement (the "Escrowed Amount") shall be released to Purchaser in
accordance with the terms of the Purchase Escrow Agreement and (ii) Seller shall
pay Purchaser the difference, if any, between the Purchase Price and the
Escrowed Amount, including without limitation the Early Release Amount. At
Final Closing, an amount equal to the Escrowed Amount less the sum of (x)
amounts held in respect of pending but unpaid claims by Purchaser for Purchase
Price adjustments pursuant to Section 5.05(d) or for indemnification pursuant to
Section 14.01 and (y) $1,000,000 (such sum being referred to collectively as the
"Indemnity Escrow Amount") will be paid to Seller from the Purchase Escrow
Account at the Final Closing and the Indemnity Escrow Amount shall be held and
released in accordance with the terms of the Purchase Escrow Agreement; provided
that the amount in clause (y) shall not be retained in escrow if such amount has
already been released by the Escrow Agent pursuant to a request made by Seller
pursuant to Section 4(e) of the Purchase Escrow Agreement after the one (1) year
anniversary of the Primary Closing.
SECTION 5.04. ALLOCATION OF PURCHASE PRICE. No later than five (5) days
before the Primary Closing, Purchaser and Seller in good faith shall determine
an allocation of the Purchase Price in accordance with the respective fair
market values of the Assets being purchased. Purchaser and Seller each further
agree to file their income tax returns and their other tax returns
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reflecting the allocation as determined in this Section 5.04. If no
agreement on an allocation of the Purchase Price is reached within thirty
(30) days after the Primary Closing, such allocation shall be determined by a
nationally recognized appraisal firm mutually agreeable to Seller and
Purchaser and the costs of such appraisal shall be borne equally by Seller
and Purchaser.
SECTION 5.05. PURCHASE PRICE ADJUSTMENT.
(a) As used in this Section 5.05, the following terms shall have the
meaning set forth below:
"CURRENT ASSETS" means the Cellular System's (i) accounts receivable that
are less than 91 days past due net of a reserve for bad debts, which reserve
shall equal the sum of the following amounts: zero percent (0%) of such
accounts receivable that are not past due or that are thirty (30) or fewer days
past due, ten percent (10%) of such accounts receivable that are more than
thirty (30) but less than sixty-one (61) days past due and fifty percent (50%)
of such accounts receivable that are more than sixty (60) but less than
ninety-one (91) days past due; (ii) inventory which is reasonably expected,
based on past practice, to be consumed in the normal course of business
within six months after the Primary Closing, reflected at net book value, and
(iii) prepaid items to the extent Purchaser will receive the benefit thereof
after the Primary Closing, all determined as of the Primary Closing Date in
accordance with generally accepted accounting principles ("GAAP"). For
purposes of this definition, an account receivable is "past due" if it has
not been paid in full within 30 days of the date of billing.
"CURRENT LIABILITIES" means the Cellular System's (i) trade payables and
accrued expenses which were incurred in the normal course of business, (ii)
subscriber deposits received and (iii) deferred revenue, all determined as of
the Primary Closing Date in accordance with GAAP.
"GAAP" means generally accepted accounting principles consistently
applied.
(b) The Base Price shall be increased (or decreased) by the amount by
which Current Assets exceeds (or is less than) Current Liabilities as of the
Closing Date (the "WORKING CAPITAL ADJUSTMENT").
(c) Seller shall prepare and submit to Purchaser, not later than four
(4) business days prior to the Primary Closing Date, a written good faith
estimate of the amount of the Working Capital Adjustment and resulting Purchase
Price (the "SELLER'S ESTIMATE") along with all supporting documents and
information. The Seller's Estimate shall be based upon the books and records of
the Cellular System. The Seller's Estimate shall be accompanied by a
certificate signed by the President of Seller certifying that Seller's Estimate
was calculated in good faith and in accordance with the provisions of this
Section 5.05. After delivery of Seller's Estimate and prior to the Primary
Closing, Purchaser and Seller shall attempt to resolve any disputes between
Seller and Purchaser with respect to Seller's Estimate. In connection
therewith, Purchaser shall have full access to all of Seller's records related
to the preparation of Seller's Estimate. Not later than two (2) business days
prior to the Primary Closing Date, Purchaser shall advise Seller in writing as
to any dispute Purchaser has with Seller's Estimate and provide Seller with
Purchaser's
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calculation of the Working Capital Adjustment and the resulting Purchase
Price, accompanied by a certificate signed by the President or Chief
Financial Officer of Purchaser certifying that Purchaser's calculation was
made in good faith and shall be accompanied by supporting documents and
information, to the extent the same is available to Purchaser ("PURCHASER'S
ESTIMATE"). In the event Purchaser's Estimate of the Purchase Price is
greater than Seller's Estimate, the Primary Closing shall proceed with the
Purchase Price based on Purchaser's Estimate. In the event Purchaser's
Estimate is equal to or less than Seller's Estimate, and the difference
between Purchaser's Estimate and Seller's Estimate is less than $50,000, the
Closing shall proceed with the Purchase Price based upon Seller's Estimate.
In the event the difference between Purchaser's Estimate and Seller's
Estimate is greater than $50,000, then the mid-point between Seller's
Estimate and Purchaser's Estimate shall be used as the Purchase Price for
purposes of Closing.
(d) Within 90 days after the Primary Closing Date, Purchaser shall
deliver to Seller a certificate (the "CLOSING CERTIFICATE") signed by the
President or Chief Financial Officer of Purchaser providing its calculation of
the Working Capital Adjustment to be made to the Base Price pursuant to this
Section 5.05, including any changes in the Working Capital Adjustment used to
determine the Purchase Price at Primary Closing, together with a copy of any
supporting documents, work papers, and other data relating to such Closing
Certificate and such other supporting evidence as Seller may reasonably request
either prior to or after delivery thereof. If Seller shall conclude that the
Closing Certificate does not accurately reflect the Working Capital Adjustment
to be made to the Base Price in accordance with this Section 5.05, Seller shall,
within 30 days after its receipt of the Closing Certificate (such 30 day period
being referred to as the "RESPONSE PERIOD"), deliver to Purchaser a written
statement of any discrepancies believed to exist. If Seller fails to so notify
Purchaser of any discrepancies, then the calculation of the Purchase Price set
forth in the Closing Certificate shall be controlling for all purposes hereof
and Purchaser or Seller, as the case may be, shall on or before the fifth
business day following the expiration of the Response Period, pay to the other
the amount which it is obligated to pay in accordance with the Closing
Certificate. On or before the fifth business day following the earlier to occur
of the expiration of the Response Period and the date Purchaser receives
Seller's statement of discrepancies, Purchaser or Seller, as the case may be,
shall pay the other the amount, if any, as to which there is no discrepancy.
Purchaser and Seller shall use good faith efforts to jointly resolve their
discrepancies within 15 days of Purchaser's receipt of Seller's written
statement of discrepancies, which resolution, if achieved, shall be binding upon
the parties and not subject to further dispute or review. In the event
Purchaser and Seller are unable to resolve their differences within such fifteen
(15) day period, and the differences arise from the interpretation of accounting
principles, then either party may request that the matter be resolved by
PricewaterhouseCoopers, LLP (the "INDEPENDENT ACCOUNTANTS") or some mutually
acceptable independent big 5 accounting firm. In submitting a dispute to the
Independent Accountants, each of the parties shall furnish, at its own expense,
the Independent Accountants and the other party with such documents and
information as the Independent Accountants may reasonably request. Each party
may also furnish to the Independent Accountants such other information and
documents as it deems relevant with the appropriate copies and notification
being given to the other party. The Independent Accountants may conduct a
conference concerning the disagreements between Seller and Purchaser at which
conference each party shall have the right
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to present additional documents, material and other evidence and to have
present its advisors, accountants and counsel. The Independent Accountants
shall promptly render a decision on the issues presented, and such decision
shall be final and binding on the parties. The fees and expenses of the
Independent Accountants shall be divided equally between Purchaser and
Seller. Within five (5) business days of receipt of the Independent
Accountants' decision with respect to such dispute, if Purchaser is
determined to owe an amount to Seller, Purchaser shall pay such amount
thereof to Seller, and if Seller is determined to owe an amount to Purchaser,
Seller shall pay such amount thereof to Purchaser. All amounts owed by
Purchaser or Seller to the other in accordance with this Section 5.05(d)
shall be paid by wire transfer of immediately available funds and shall not
bear any interest. Any amount due Purchaser from Seller under this Section
5.05(d) and not paid when due may also be paid from the funds held pursuant
to the Purchase Escrow Agreement, provided that Purchaser has requested such
amount from Seller pursuant to the terms and conditions of this Agreement and
the terms and conditions of the Purchase Escrow Agreement and such amount
remains unpaid for thirty (30) days from the date of such notice.
ARTICLE VI
CLOSING
SECTION 6.01. PRIMARY CLOSING. Subject to the terms and conditions
hereof, the Primary Closing (the "Primary Closing") shall take place at the
offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ a date designated by Purchaser that is within ten (10) business days after
the date on which the FCC's order granting its consent to the assignment of the
FCC Authorization from Seller to Purchaser has become a Final Order and the
other conditions precedent to the Primary Closing have been satisfied (the
"Primary Closing Date"). For the purposes of this Agreement, the term "Final
Order" shall mean action by the FCC as to which (i) no request for stay by the
FCC of the action is pending, no such stay is in effect, and, if any deadline
for filing any such request is designated by statute or regulation, such
deadline has passed; (ii) no petition for rehearing or reconsideration of the
action is pending before the FCC, and the time for filing any such petition has
passed; (iii) the FCC, does not have the action under reconsideration on its own
motion and the time for such reconsideration has passed; and (iv) no appeal to a
court, or request for stay by a court, of the FCC's action is pending or in
effect, and, if any deadline for filing any such appeal or request is designated
by statute or rule, it has passed.
SECTION 6.02. FINAL CLOSING. Subject to the terms and conditions hereof,
the Final Closing (the "Final Closing") shall take place at the offices of
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ on a
date designated by Purchaser that is the LATER to occur of the following: (a)
the Primary Closing Date; and (b) the date that is within five (5) business days
after satisfaction of the conditions to Final Closing contained in Article XII
(the "Final Closing Date").
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ARTICLE VII
SELLER'S REPRESENTATIONS
Seller hereby represents, warrants, covenants and agrees that:
SECTION 7.01. ORGANIZATION; QUALIFICATION; SUBSIDIARIES. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada. Seller has all corporate power and authority to own and
operate its properties and to carry on its business as now being conducted or
proposed to be conducted by Seller and to execute and deliver and, subject to
obtaining the FCC's approval to assign the FCC Authorization to Purchaser,
perform its obligations under this Agreement and to undertake the transactions
contemplated hereby. Seller is qualified to do business as a foreign corporation
and is in good standing in Arizona and in all other jurisdictions where failure
to be so qualified or in good standing is reasonably likely, individually or in
the aggregate, to have a material adverse effect on the Assets or the Business.
Seller has no subsidiaries, and does not own or control any shares or other
securities of, or have any other proprietary interest in, any corporation,
partnership, limited liability company, joint venture, business association or
other person.
SECTION 7.02. CONSENTS, AUTHORIZATION, EXECUTION AND DELIVERY OF
AGREEMENT. All necessary consents and approvals have been obtained by Seller
for the execution and delivery of this Agreement. The execution, delivery and
performance of this Agreement by Seller and the transfer of the Assets to
Purchaser have been duly and validly authorized and approved by all necessary
board of directors and shareholder action. This Agreement is a valid and
binding obligation of Seller, enforceable against it in accordance with its
terms.
SECTION 7.03. TITLE TO ASSETS; CONDITION OF ASSETS. Except as set forth
on SCHEDULE 7.03 attached hereto, Seller has full power, right and authority to
sell and convey the Assets to Purchaser. Seller has, and at the Primary Closing
will transfer and convey to Purchaser, good and marketable title to the Assets,
free and clear of all Liens other than Permitted Liens. All Liens on the Assets
in effect on the date hereof are listed on SCHEDULE 7.03 hereto and all such
Liens, other than Permitted Liens, will be discharged at the Primary Closing.
The tangible property included among the Assets as of the date hereof are in
good working order and repair, reasonable wear and tear excepted. The Assets
constitute all of the assets used or useful by Seller in connection with the
operation of the Business. No officer, director, stockholder or employee of
Seller, or any other individual, partnership, corporation, person or entity (a
"Person") (other than Seller) controlling, controlled by or affiliated with or
family member of any such officer, director, stockholder or employee, owns,
leases or has any rights in any property, license or other assets related to the
Business other than the Excluded Assets. Except for factors typically affecting
propagation and reception in the cellular telephone industry generally, the
tangible property included in the Assets are technically sufficient and capable
of providing cellular telephone service in the Cellular System in accordance
with applicable FCC regulations. All of the buildings, towers, antenna,
fixtures and improvements owned by Seller, and all heating and air conditioning
equipment, plumbing, electrical and other mechanical facilities and the roof,
walls and other structural components of the real property which are part of, or
located in such buildings, towers, antenna or improvements and are owned by
Seller (or in
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the case of such buildings, towers, antenna, fixtures, improvements,
equipment, facilities and structural components which are leased by Seller,
to Seller's knowledge) comply with applicable zoning laws and the building,
health, fire and environmental protection codes of all applicable
governmental jurisdictions, have no structural defects and do not require any
repair other than maintenance as is customary in the cellular telephone
industry generally and the repair of ordinary wear and tear.
SECTION 7.04. REAL PROPERTY - OWNED. Seller does not own any real
property or interests in real property in fee simple.
SECTION 7.05. REAL AND PERSONAL PROPERTY - LEASED. Set forth on SCHEDULE
2.01(d) (in the case of real property) and SCHEDULE 2.01(c) (in the case of
personal property), are true and accurate descriptions of all real and personal
property leased by Seller and used or useful in the ownership or operation of
the Assets and the Business setting forth (i) the name of the lessor and (ii) a
description of the property leased. All of the leases set forth on SCHEDULE
2.01(c) AND 2.01(d) are in full force and effect and are valid, binding and
enforceable in accordance with their respective terms, (ii) all accrued and
currently payable rents and other payments required by such leases have been
paid, (iii) Seller and, to Seller's knowledge, each other party thereto have
complied with all respective covenants and provisions of such leases, (iv)
neither Seller nor, to Seller's knowledge, any other party is in default in any
respect under any such leases, (v) no party has asserted any defense, set off,
or counter claim thereunder, (vi) no waiver, indulgence or postponement of any
obligations thereunder has been granted by any party, and (vii) the validity
after the Primary Closing or enforceability of any such lease will be in no way
affected by the sale of the Assets to Purchaser provided all required consents
have been obtained from the other parties to such lease. Except as set forth in
Schedule 2.01(d), each of the real property leases to which Seller is a party
may be terminated by Purchaser after the Primary Closing on no greater than 30
days' prior written notice, without incurring any premium, penalty or other
additional obligation under such lease.
SECTION 7.06. EXISTING CONTRACTS. SCHEDULE 2.01(a) sets forth all
contracts, commitments and agreements in effect on the date hereof with Seller's
subscribers (other than standard subscriber agreements for cellular service and
standard roaming agreements with other carriers), and all other contracts,
commitments and agreements (other than agreements with annual payments of less
than $2,000 and which agreements, in the aggregate, have annual payments of less
than $25,000 or which are terminable without penalty on one month or less
notice) to which Seller is a party which relate to the ownership of the Assets
or the operation of the Business (the "Existing Contracts"), except for the
contracts, leases, commitments and agreements included among the Non-Assumed
Liabilities (the "Excluded Contracts"). No officer, director or employee of
Seller or any Person (other than Seller) controlling, controlled by or
affiliated with or family member of any such officer, director or employer has
any contractual relationship relating to the ownership or operation of the
Business. Seller has heretofore delivered to Purchaser true and correct copies
of the Existing Contracts. Seller has no knowledge of any breach or anticipated
breach by the other parties to any Existing Contracts that would have a material
adverse effect on the Business, the Assets or Seller's ability to perform its
obligations under this Agreement (a "Material Adverse Effect"). The Existing
Contracts are in full force and
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effect and Seller is in compliance with the terms of such Existing Contracts
except for matters that would not have a Material Adverse Effect. Except for
the Existing Contracts, Seller has not entered into any other agreements
relating to the ownership of the Assets or the operation of the Business,
including, but not limited to, rights-of-way, rights of entry, licenses,
easements, leases (real property or equipment), or guaranty agreements.
Seller is not aware of any claims by third parties that Seller is required to
enter into other agreements to enable it to continue owning the Assets and
operating the Business as it is presently being operated.
SECTION 7.07. GOVERNMENTAL LICENSES. Seller holds all necessary licenses
including without limitation the FCC Authorization, consents, permits, approvals
and authorizations of public or governmental bodies including, without
limitation, the FCC and the state, counties and municipalities served by the
Business, which are required in connection with the ownership of the Assets and
which are required for the provision of cellular services within, and the
operation of, the Cellular System in connection with applicable FCC regulations
(collectively referred to as the "Authorizations"). All Authorizations are in
full force and effect. Seller has complied in all material respects with the
terms of the Authorizations. Except for matters affecting the cellular industry
generally, there are no pending modifications, amendments or revocations of the
Authorizations which would materially and adversely affect the ownership of the
Assets or the operation of the Business. All fees of Seller due and payable to
governmental authorities pursuant to the Authorizations have been paid and
subject to the outcome of the Algreg Proceeding, no event has occurred which,
with or without the giving of notice or lapse of time or both, would constitute
grounds for revocation or modification of the Authorizations. All reports
required of Seller to be filed in connection with the Authorizations have been
timely filed and are accurate and complete in all material respects. Seller has
not engaged in any course of conduct that could reasonably be expected to impair
the ability of Seller to be the holder of the Authorizations and is not aware of
any reason why the Authorizations might not be renewed in the ordinary course,
why any of the Authorizations might be revoked, or why any pending applications
or notifications might not be approved. True and correct copies of the
Authorizations, and all amendments thereto to the date hereof, have been
delivered by Seller to Purchaser and are identified on SCHEDULE 7.07 attached
hereto. To Seller's knowledge, the ownership of the Assets and the operation of
the Business by Seller is not subject to regulation or supervision by any
applicable state public utilities commission or other similar state governmental
instrumentality. Neither Seller nor any of its affiliates have filed for or
obtained from the Arizona Corporation Commission or any other state public
utilities commission any license, permit or other authority to conduct the
Business.
SECTION 7.08. COMPLIANCE WITH LAWS. Except as set forth on SCHEDULE 7.08
attached hereto, Seller is in compliance with, and is not in default in any
material respect under or in violation of, and neither the Business nor any of
the Assets nor the operation or maintenance thereof, contravenes in any material
respect any statute, law (including environmental or employment laws),
ordinance, decree, order, rule or regulation of any governmental body applicable
to the Assets or the Business, including, without limitation, rules and
regulations of the FCC.
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SECTION 7.09. NO VIOLATION OF EXISTING AGREEMENTS. The execution,
delivery and performance of this Agreement by Seller will not violate any
provisions of law and will not, with or without the giving of notice or the
passage of time, or both, conflict with or result in any breach of any of the
terms or conditions of, or constitute a default under any Existing Contracts, or
result in the creation of any Lien upon the Assets or the Business.
SECTION 7.10. LITIGATION AND LEGAL PROCEEDINGS. Except as set forth on
SCHEDULE 7.10 attached hereto, there is no outstanding judgment against Seller
or any director, officer or stockholder of Seller affecting the Business or the
Assets or which questions the validity of any action taken or to be taken
pursuant to or in connection with the provisions of this Agreement. Except as
set forth on SCHEDULE 7.10, there are no proceedings pending or, to Seller's
knowledge, threatened against Seller or any director, officer or stockholder of
Seller affecting the Business or the Assets or which questions the validity of
any action taken or to be taken pursuant to or in connection with the provisions
of this Agreement, nor any demands by any governmental agency, utility or other
party, to terminate modify or adversely change the terms and conditions of
Seller's rights with respect to the Authorizations or Existing Contracts. The
pendency of the Algreg Proceeding (including any related appeals or other
further proceedings) will not constitute a breach of any representation or
warranty contained in this Agreement, whether or not such representation or
warranty is expressly qualified by reference to the Algreg Proceeding.
SECTION 7.11. ENVIRONMENTAL COMPLIANCE. (a)(i) Seller has not
generated, used, transported, treated, stored, released or disposed of, or has
suffered or permitted anyone else to generate, use, transport, treat, store,
release or dispose of any Hazardous Substance (as hereinafter defined) with
respect to the Assets or the Business in violation of any Environmental Laws (as
hereinafter defined); (ii) there has not been any generation, use,
transportation, treatment, storage, release or disposal of any Hazardous
Substance in connection with the ownership of the Assets, the conduct of the
Business or the use of any property or facility which relates to the ownership
of the Assets, the Business, or any adjacent properties or facilities, which has
created or might reasonably be expected to create any liability under any
Environmental Laws or which would require reporting to or notification of any
governmental entity; (iii) no friable asbestos or polychlorinated biphenyl, and
no underground storage tank, is contained in or located at any facility of
Seller relating to the Business in violation of any Environmental Laws; and (iv)
any Hazardous Substance handled or dealt with in any way by Seller during
Seller's ownership of the Assets or the Business has been and is being handled
or dealt with in compliance with Environmental Laws.
(b) For purposes of this Agreement, the term "Hazardous Substance"
shall mean any substance which, as of the date of this Agreement, is listed as
hazardous or toxic in the regulations implementing the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended
("CERCLA"), the Response Compensation and Liability Act ("RCLA"), the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA"), or listed as a
hazardous substance under any applicable state environmental laws, or any
substance which has been determined at any time by regulation, ruling or
otherwise by any agency or court to be a hazardous or toxic substance regulated
under federal or state law.
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(c) For purposes of this Agreement, the term "Environmental Laws"
shall mean CERCLA, RCRA, RCLA and any applicable statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals, plans, authorizations,
concessions, franchises and similar items of all governmental authorities,
including the FCC, and all applicable judicial, administrative and regulatory
decrees, judgments and orders, any of which relate to the protection of human
health or the environment from the effects of Hazardous Substances, including
but not limited to those pertaining to reporting, licensing, permitting,
investigating and remediating emissions, discharges, releases or threatened
releases of Hazardous Substances into the air, surface water, groundwater or
land, or relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Substances.
SECTION 7.12. LABOR MATTERS. SCHEDULE 7.12 sets forth a true and
complete list of the names and current salaries of all employees of the Seller
involved in the operation of the Business. Such employees are employees at
will. Seller has withheld all amounts required by law or agreement to be
withheld by it from the wages, salaries and other payments to its employees and
is not liable for any arrears of wages or any taxes for failure to comply with
any of the foregoing. There are no collective bargaining agreements covering
any of the employees of Seller. The Seller has not breached or otherwise failed
to comply with any provision of any collective bargaining agreement or other
labor union contract applicable to any of its employees. No consent of any
union (or similar group or organization) is required in connection with the
consummation of the transactions contemplated hereby. There are no pending, or,
to Seller's knowledge threatened, and there is no factual basis for any (a)
employment discrimination (including age, sex, racial or handicap
discrimination) charges or complaints against or involving Seller, before any
federal, state, or local board, department, commission or agency or (b) unfair
labor practice charges or complaints, disputes or grievances affecting Seller.
There are no pending, or, to Seller's knowledge threatened (a) union
representation petitions respecting the employees of Seller, (b) efforts being
made to organize any of the employees of Seller, or (c) strikes, slow downs,
work stoppages, or lockouts or threats affecting Seller.
SECTION 7.13. EMPLOYEE BENEFITS. Except as set forth on SCHEDULE 7.13
attached hereto, Seller has no pension plan, profit sharing plan, deferred
compensation plan, stock option or stock bonus plan, saving plan, or other
benefit plan, policy, practice, or procedure or contract concerning employee
benefits or fringe benefits of any kind (collectively, "Employee Benefit
Plans"), whether or not governed by the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). Seller is not a party to any employment
contract. No officer, director or employee of Seller participates or is
eligible to participate in a "defined benefit pension plan" as defined in
Section 3(35) of ERISA, maintained or made available by Seller. Neither Seller
nor any Controlled Group Member maintains or contributes to, or ever maintained
or contributed to, a plan under which any employee of Seller participates or is
eligible to participate subject to Section 412 of the Internal Revenue Code of
1986, as amended (the "Code"). The term "Controlled Group Member" means any
trade or business (whether or not incorporated) which is, or was at any relevant
time, aggregated with the Seller pursuant to Section 414(b), (c), (m) or (o) of
the Code. Neither Seller nor any ERISA Affiliate has participated in or made
contributions to any "multiemployer plan" as defined in Section 4001(a)(3) of
ERISA. The term "ERISA
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Affiliate" means each trade or business (whether or not incorporated) which
is, or was at any relevant time, treated as a single employer with Seller
pursuant to Section 4001(b)(1) of ERISA.
Each of the Employee Benefit Plans is in compliance in all material
respects with all applicable requirements of ERISA, the Code, and other
applicable law. Each of the Employee Benefit Plans has been administered in all
material respects in accordance with its terms and with applicable legal
requirements. All "employee pension plans" (within the meaning of Section 3(2)
of ERISA) have been determined by the Internal Revenue Service ("IRS") to be
qualified under Section 401(a) of the Code, and no action or proceeding has been
instituted or threatened which would affect the qualification of any pension
plan of Seller. No unfunded liabilities, based upon the Pension Benefit
Guarantee Corporation (the "PBGC") rates currently in effect for plan
terminations, exist with respect to any Employee Benefit Plan which is a
"defined benefit plan" (within the meaning of Section 3(35) of ERISA). There
has not been any reportable event with respect to any pension plan of Seller.
Seller has not engaged in a "prohibited transaction" or breach of fiduciary
responsibility with respect to any Employee Benefit Plan which could subject
Purchaser or any affiliate of Purchaser to a penalty tax or other liability
under ERISA or the Code. Neither Seller nor any Affiliate of Seller has ever
incurred any liability under Title IV of ERISA to the PBGC or to a
multi-employer pension plan.
SECTION 7.14. TAX MATTERS. Except as set forth on SCHEDULE 7.14 attached
hereto, (a) Seller has timely filed all Tax (as defined below) returns and
statements which it is required to file; (b) all such returns are complete and
accurate in all material respects and disclose all Taxes required to be paid for
the periods covered thereby; (c) Seller has not waived any statute of
limitations in respect of Taxes or agreed to an extension of time with respect
to a Tax assessment or deficiency; (d) no assessment of any additional Taxes for
periods for which returns have been filed has been asserted and no basis exists
therefor; (e) to Seller's knowledge, there are no unresolved questions or claims
raised by any Taxing authority concerning the Tax liability of Seller, (f) all
Taxes which Seller is required by law to withhold or to collect for payment have
been duly withheld and collected, and have been paid and (g) Seller has paid all
Taxes due prior to the date hereof and will pay when due (or contest in good
faith by appropriate proceedings) all Taxes which may become due on or before
the Closing Date. Seller has made a timely and valid election to be treated as
an S Corporation (as defined in Section 1361(a) of the Internal Revenue Code),
effective beginning January 1, 1996. For purposes of this Section 7.15, the
term "Tax" or "Taxes" means all taxes, charges, fees, levies, imposts and other
assessments including all income, sales, use, goods and services, value added,
capital, capital gains, alternative net worth, transfer, profits, withholding,
payroll, employer health, excise, real property and personal property taxes, and
any other taxes, customs duties, stamp duties, fees, assessments or similar
charges in the nature of a tax, together with any interest, fines and penalties
imposed by any governmental authority (including federal, state, provincial,
municipal and foreign governmental authorities), and whether disputed or not.
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SECTION 7.15. FINANCIAL STATEMENTS.
(a) Purchaser has heretofore been furnished with the following:
(i) true and complete copies of the unaudited balance sheet
of Seller as of December 31, 1997 and December 31, 1998 (the
"BALANCE SHEET DATE") and the related unaudited statements of income
and retained earnings and cash flows for the years then ended, each
of such balance sheet and income statement being attached hereto as
SCHEDULE 7.15(a)(i) (collectively, the "HISTORICAL FINANCIAL
STATEMENTS"); and
(ii) true and complete copies of the unaudited balance sheet
(the "JUNE BALANCE SHEET") of Seller at June 30, 1999 and the
related unaudited statement of income for the three months then
ended (the "FIVE-MONTH INCOME STATEMENT" and together with the June
Balance Sheet, the "CURRENT FINANCIAL STATEMENTS"), such balance
sheet and income statement being attached hereto as
SCHEDULE 7.15(a)(ii).
(b) Each of the Historical and Current Financial Statements delivered
under Section 7.15(a)(i) and (ii) hereof were prepared in accordance with GAAP,
except for the omission of certain footnotes and other presentation items
required by GAAP with respect to audited financial statements and except that
all accounting has been done on a cash basis rather than an accrual basis,
applied on a basis consistent with prior periods and past practices and, with
respect to the Current Financial Statements, subject to usual and customary
year-end adjustments; each of the balance sheets included in such Historical and
Current Financial Statements fairly presents in all material respects the
financial condition of Seller, as at the close of business on the date thereof;
and each of the statements of income included in such Historical and Current
Financial Statements fairly presents in all material respects the results of
operations of Seller, for the fiscal period then ended.
(c) Except as set forth on SCHEDULE 7.15(c) attached hereto, since the
Balance Sheet Date, Seller has not:
(i) sold, assigned or transferred any of its Assets (except
for the Excluded Assets and except pursuant to existing contracts or
commitments disclosed on any Schedule to this Agreement or inventory
in the ordinary course of business consistent with past practice or
for assets sold or disposed of and replaced by other assets of
comparable use and value) or canceled any material debts or material
claims;
(ii) waived any material rights, whether or not in the
ordinary course of business;
(iii) entered into any other transaction, except in the
ordinary course of business, or entered into any transaction with
any officer, director, partner or shareholder of Seller, or any
affiliate or family member of any such Person;
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(iv) suffered any material damage, destruction or casualty
loss with respect to the Assets, whether or not covered by
insurance;
(v) made any distribution of any of the Assets to any
officer, director, partner or shareholder of Seller or any affiliate
or family member of such officer, director or shareholder;
(vi) obligated itself or the Business to give free or reduced
price service to subscribers with respect to the Business; or
(vii) entered into any agreement or understanding to do any of
the foregoing.
SECTION 7.16. SUBSCRIBERS/AGENTS. The number of subscribers receiving
service from the Cellular System as of May 25, 1999 was at least 804; a list of
Seller's current subscribers is set forth at SCHEDULE 7.16. SCHEDULE 7.16
attached hereto also sets forth a list of all agents who sell cellular telephone
equipment and/or service on behalf of Seller as of the date hereof, together
with such agent's address and the number of gross activations produced by each
agent from January 1, 1999 to July 26, 1999. SCHEDULE 7.16 also summarizes the
current rate plans offered to Seller's subscribers.
SECTION 7.17. INSURANCE. Attached hereto as SCHEDULE 7.17 is an accurate
and complete list in all material respects of all insurance policies, bonds and
letters of credit which relate in any way to the ownership, use or operation of
the Assets and the Business.
SECTION 7.18. BROKERS. Except Columbia Capital, Seller has not engaged
any agent, broker or other person acting pursuant to the express or implied
authority of Seller which may be entitled to a commission or broker or finder's
fee in connection with the transactions contemplated by this Agreement or
otherwise with respect to the sale of the Assets or the Business.
SECTION 7.19. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. Seller does not meet the "size of
person test" for an acquired person under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act, since Seller's ultimate parent entity and all entities that
its ultimate parent entity controls do not meet the financial thresholds set
forth in 16 C.F.R. Part 801.
SECTION 7.20. UNDISCLOSED LIABILITIES. Seller has no liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise,
which are not reflected or reserved against in the May Balance Sheet except for
liabilities and obligations that have arisen in the ordinary and usual course of
business and consistent with past practice (none of which results from, arises
out of, relates to, is in the nature of, or caused by any breach of contract,
breach of warranty, tort, infringement or violation of law) and except for
liabilities and obligations directly related to the transactions contemplated
hereby.
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SECTION 7.21. ACCOUNTS RECEIVABLE AND BAD DEBTS. All notes and accounts
receivable of Seller shown on the June Balance Sheet or thereafter acquired were
or (to the extent not heretofore collected) are valid and genuine, were acquired
in the ordinary course of business and are subject to no asserted counterclaims,
defenses or setoffs (subject to reserves therefor as will be taken into account
in the determination of Current Assets at Primary Closing in accordance with
Section 5.05). SCHEDULE 7.21 attached hereto sets forth a true, complete and
accurate list, as of the end of the most recent normal billing cycle of Seller,
listing the total amounts of subscriber accounts receivable and the aging of
such subscriber receivables.
SECTION 7.22. YEAR 2000 COMPLIANCE. Seller has advised Purchaser that
Seller's switch is not year 2000 compliant, and can not be made year 2000
compliant. Seller is not representing that any of its Assets are Year 2000
compliant.
SECTION 7.23. DISCLOSURE. No provision of this Agreement relating to
Seller, the Business or the Assets or any other document, Schedule, Exhibit or
other information furnished by Seller to Purchaser in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact required to be
stated in order to make the statement, in light of the circumstances in which it
is made, not misleading.
ARTICLE VIII
PURCHASER'S REPRESENTATIONS
Purchaser hereby represents, warrants, covenants and agrees that:
SECTION 8.01. ORGANIZATION; QUALIFICATION. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Oklahoma. Purchaser has all power and authority to (i) own and operate
its properties, (ii) carry on its business as it is now being conducted, and
(iii) carry out the transactions contemplated by this Agreement and to own and
operate the Assets and the Business, subject to obtaining all necessary consents
required for the transfer by Seller of the Assets.
SECTION 8.02. CONSENTS; AUTHORIZATION; EXECUTION AND DELIVERY OF
AGREEMENT. All necessary consents and approvals have been obtained by Purchaser
for the execution and delivery of this Agreement. The execution and delivery of
this Agreement by Purchaser has been duly and validly authorized and approved by
all necessary corporate action. Purchaser has full power and authority to
execute and deliver and perform its obligations under this Agreement. This
Agreement is a valid and binding obligation of Purchaser, enforceable against it
in accordance with its terms.
SECTION 8.03. LITIGATION AND LEGAL PROCEEDINGS. Except as set forth on
SCHEDULE 8.03, there is no outstanding judgment against Purchaser and there is
no litigation, proceeding or investigation pending, or, to Purchaser's
knowledge, threatened, against Purchaser or its assets which individually or in
the aggregate would, if adversely determined, result in a material adverse
change in the business condition (financial or otherwise), properties, prospects
or assets
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of Purchaser or which questions the validity of any action taken or to be
taken pursuant to or in connection with the provisions of this Agreement or
the consummation of the transactions contemplated hereby by Purchaser.
SECTION 8.04. BROKERS. Except for ▇▇▇▇▇▇▇ & Associates, Purchaser has
not engaged any agent, broker or other person acting pursuant to the express or
implied authority of Purchaser which is or may be entitled to a commission or
broker or finder's fee in connection with the transactions contemplated by this
Agreement or otherwise with respect to the sale of the Assets or the Business.
ARTICLE IX
SELLER'S AND PURCHASER'S AFFIRMATIVE COVENANTS
SECTION 9.01. FINANCIAL STATEMENTS AND CELLULAR SYSTEM INFORMATION.
Seller covenants and agrees that during the period after the execution of this
Agreement and prior to the Primary Closing, Seller shall provide Purchaser,
within 45 days of the end of each calendar quarter, Seller's unaudited balance
sheet and income statement for such quarter ("Interim Financial Statements").
The Interim Financial Statements will be true and correct in all material
respects, will be prepared using the same accounting methods and procedures as
used in the preparation of the Current Financial Statements except for the
absence of footnotes, subject to usual and customary adjustments, and will
present fairly in all material respects the financial position of Seller at the
date indicated and the results of Seller's operations for such period. Seller
also shall provide Purchaser within 10 business days of the end of each monthly
billing cycle the number of subscribers receiving service from the Cellular
System at the beginning and end of such billing cycle. Seller further covenants
and agrees to provide Purchaser with copies of any other reports reasonably
requested by Purchaser provided that such reports are normally generated by or
for Seller on a monthly basis.
SECTION 9.02. ACCESS. (a) Purchaser shall have the right, itself or
through its representatives, during normal business hours, after reasonable
notice (which may be oral) to an officer of Seller and without undue disruption
to Seller's normal business activities, to inspect the Assets and properties of
Seller and to inspect and make abstracts and reproductions of all books and
records of Seller including, without limitation, applications and reports to the
FCC, all financial information relevant to the Business, employee records, and
engineering and environmental reports and Seller shall furnish Purchaser with
such information respecting the Assets and Business and financial records as
Purchaser may, from time to time, reasonably request.
(b) Seller acknowledges and agrees, subject to any restrictions placed
thereon by an owner or lessor of any real property involved, that Purchaser may
commission, at Purchaser's cost and expense, a so-called "Phase I" environmental
site assessment of the Assets (the "Phase I Assessment"). If the Phase I
Assessment indicates that a so-called "Phase II" assessment (the "Phase II
Assessment") or other additional testing or analysis of the Assets is advisable,
the Purchaser may elect to cause its agents to conduct such testing and
analysis. Seller will use its commercially reasonable efforts to comply with
any reasonable request for information made by
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Purchaser or its agents in connection with any such investigation. Seller
covenants that any response to any such request for information will be
complete and correct in all material respects. Seller will afford Purchaser
and its agents access to all operations of the Seller at all reasonable times
and in a reasonable manner in connection with any such investigation subject
to any required approval of Seller's landlords, which approval Seller will
use its commercially reasonable efforts to obtain. Should Purchaser
commission such an investigation, such investigation will have no effect upon
the representations and warranties made by Seller to Purchaser under this
Agreement except that if any Phase I Assessment or Phase II Assessment
uncovers an environmental condition which then comprises a breach of Seller's
representations or warranties herein, Seller shall not have breached such
representation or warranty if Seller cures such breach in accordance with the
provisions of this Agreement.
(c) All information collected and generated as a result of the
environmental due diligence authorized by Section 9.02(b) will be subject to the
terms and conditions of Section 15.01 of this Agreement. Purchaser shall
provide to Seller copies of all draft and final reports, assessments and other
information composed or compiled by Purchaser's environmental consultants within
five (5) business days of Purchaser's receipt of copies thereof.
(d) Seller shall allow Purchaser the opportunity to conduct an
engineering review of the Assets to confirm that the Assets comply with the FCC
Authorizations and the regulations of the FCC and are otherwise in good
condition and repair, reasonable wear and tear excepted. Purchaser shall
provide to Seller copies of all draft and final reports, assessments and other
information composed or compiled by Purchaser's engineers or engineering
consultants within five (5) business days of Purchaser's receipt of copies
thereof.
SECTION 9.03. CONDUCT OF BUSINESS. From the date hereof until the
Primary Closing Seller shall:
(a) operate the Cellular System in accordance with the
Authorizations, including without limitation FCC Authorization, and comply in
all material respects with all laws, rules and regulations applicable to Seller,
including without limitation the regulations of the FCC;
(b) except for inventory (other than Excluded Assets) sold in the
ordinary course of business, refrain from making any sale, lease, transfer or
other disposition of any of the Assets other than in connection with
replacements with assets of like use and value, or with the prior written
approval of Purchaser;
(c) refrain from modifying, amending or altering in any material
respect, or terminating any of the Existing Contracts, and from waiving or
canceling any default or breach (other than the waiver of late fees) or
modifying, altering or terminating any right or asset relating to or included in
the Assets without Purchaser's prior written approval, which approval will not
be unreasonably withheld;
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(d) maintain insurance on the Assets comparable to that maintained
prior to the date hereof, and subject to Article XIII, use the proceeds of any
claims for loss under such policies, together with such other funds as may be
required, to repair, replace, or restore to their former condition any Assets
which may be damaged by fire or other casualty, all as soon as reasonably
possible;
(e) maintain its books and records in accordance with prior
practice; maintain all of its property and assets in their present condition,
ordinary wear and tear excepted; maintain supplies of inventory and spare parts
consistent with past practice; and otherwise operate the Business in the
ordinary course in accordance with past practices;
(f) refrain from hiring any employees without Purchaser's prior
written consent and notify Purchaser of any material change in job function of
an employee, and the termination of any employee;
(g) continue to advertise, promote and market the Cellular System
and its services in a manner consistent with past practice;
(h) refrain from subjecting any of the Assets to any new Lien
other than Permitted Liens;
(i) refrain from doing or omitting to do any act which will cause
a material breach of, or material default under, or termination of (except in
accordance with its terms), any Existing Contract;
(j) provide to the Purchaser, concurrently with filing thereof,
copies of all reports to and other filings with the FCC and any other
governmental agency;
(k) not permit the FCC Authorization to expire or to be
surrendered or voluntarily modified in a manner materially adverse to the
Business, or take any action which would reasonably be expected to cause the FCC
Authorization or any other governmental authority to institute proceedings for
the suspension, revocation or limitation of rights under the FCC Authorization,
or fail to prosecute with due diligence any pending applications to any
governmental authority;
(l) notify Purchaser in writing promptly after learning of the
institution or threat of any material action against Seller in any court, or any
action against Seller before the FCC or any other governmental agency, and
notify Purchaser in writing promptly upon receipt of any administrative or court
order relating to the Assets or the Business;
(m) refrain from taking any action not in Seller's usual course of
business regarding the Cellular System or the Assets without Purchaser's prior
approval; and
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(n) pay or cause to be paid or provide for all Taxes of or
relating to Seller, the Assets and the employees required to be paid to city,
county, state, Federal and other governmental units up to the Primary Closing
Date.
SECTION 9.04. GOVERNMENTAL APPROVALS. Purchaser will fully cooperate
with Seller and do all things that are commercially reasonable to assist Seller
to obtain all consents and approvals necessary for the transfer or assignment to
Purchaser of the Authorizations (including without limitation, the FCC
Authorization), including the furnishing of financial and other information
specifically with respect to Purchaser reasonably required by the Person whose
consent or approval is being sought. Seller shall provide adequate prior
written notice to Purchaser of any meeting with governmental authorities the
purpose of which is to seek a consent or approval to the transactions
contemplated hereby, and Purchaser shall use all reasonable efforts to furnish a
representative to attend meetings with appropriate government authorities for
the purpose of obtaining such consents or approvals. Both parties have filed
Form 603 with the FCC seeking its approval of the assignment of the FCC
Authorization to Purchaser, and the FCC has granted its approval. Both parties
hereby agree to diligently pursue the grant of the assignment of the FCC
Authorization to Purchaser becoming a Final Order, and to file for any other
necessary regulatory approvals for the consummation of the transactions
contemplated by this Agreement within five (5) business days of the date of
execution of this Agreement to the extent any such filings have not been made
prior to the date of execution of this Agreement.
SECTION 9.05. THIRD PARTY CONSENTS; CLOSING CONDITIONS. (a) Seller
covenants and agrees to use its commercially reasonable efforts to obtain all
consents and approvals necessary for the transfer or assignment to Purchaser of
the Assets. In addition, with respect to each real property lease identified on
SCHEDULE 2.01(d), Seller agrees that the instrument whereby Seller requests the
consent of the lessor thereunder to the assignment of such lease to such
Purchaser shall be substantially in the form of the letter attached hereto as
SCHEDULE 9.05(a) and that Seller shall use its commercially reasonable efforts
to obtain each such lessor's consent to such assignment by having each such
lessor countersign such letter in the space provided. In addition, Seller shall
use its commercially reasonable best efforts to obtain from lessors under real
property leases with remaining terms in excess of one (1) year the form of
Landlord Consent and Estoppel Certificate attached as Schedule 9.05(b). Each of
Purchaser and Seller covenants and agrees that each of them will reasonably
cooperate with each other, and Purchaser will do all things reasonably necessary
to assist Seller to obtain all consents and approvals necessary for the transfer
or assignment to Purchaser of the Assets, including the furnishing of financial
and other information specifically with respect to Purchaser or Seller, as the
case may be, reasonably required by the person whose consent or approval is
being sought. Notwithstanding the foregoing, to the extent that any of the
Assets to be sold, assigned, transferred or conveyed to Purchaser, or any claim,
right or benefit arising thereunder or resulting therefrom (individually, an
"Interest" and collectively, the "INTERESTS"), is not capable of being sold,
assigned, transferred or conveyed without the approval, consent or waiver of the
issuer thereof or the other party thereto, or any third person (including a
government or governmental unit), and such approval, consent or waiver has not
been obtained, or if such sale, assignment, transfer or conveyance or attempted
assignment, transfer or conveyance would constitute a breach thereof, and such
approval, consent or waiver has not been obtained, this Agreement shall not
constitute a sale,
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assignment, transfer or conveyance thereof, or an attempted assignment,
transfer or conveyance thereof; provided Seller shall use its best efforts to
provide Purchaser the benefits of any such Interest as provided in Section
19.01(b). Each of Purchaser and Seller shall use all reasonable efforts to
consummate the transactions contemplated hereby.
(b) Purchaser and Seller hereby covenant and agree to use
all reasonable efforts to satisfy, or assist the other party in
satisfying, the closing conditions applicable to Purchaser in
Article XI hereof and Seller in Article X hereof prior to the
Primary Closing Date.
SECTION 9.06. INTENTIONALLY OMITTED.
SECTION 9.07. NO SHOPPING. Neither Seller nor any of their respective
affiliates, advisors or representatives shall directly or indirectly, solicit,
encourage or initiate any contact with, negotiate with, or provide any
information to, endorse or enter into any agreement with respect to, or take any
other action to facilitate any person or group, other than Purchaser and its
representatives, concerning any inquiries or the making of any proposals
concerning any merger, sale of all or substantially all of the assets,
acquisition of Seller's capital stock, or any similar transaction involving
Seller.
SECTION 9.08. SUPPLEMENTAL DISCLOSURE. Seller shall promptly from time
to time prior to the Primary Closing Date and Final Closing Date supplement in
writing the Schedules hereto with respect to any matter hereafter arising that,
if existing or known as of the date of this Agreement, would have been required
to be set forth or described in the Schedules hereto; PROVIDED, HOWEVER, that no
such supplemental disclosure shall be deemed to cure any breach of any
representation or warranty of Seller made in this Agreement unless Purchaser
waives any such breach in writing to Seller.
SECTION 9.09. LITIGATION MATTERS. Seller and Purchaser agree that any
and all costs of litigation and other proceedings pertaining to the FCC
Authorization, including but not limited to the Algreg Proceeding, shall be the
responsibility of Seller, and that Seller shall control the defense of the
Algreg Proceeding, subject to Purchaser's right to assist in the defense.
Seller agrees to its best efforts to defend the FCC Authorization in the Algreg
Proceeding, and Seller and Purchaser agree to cooperate in good faith in such
defense, but Seller shall have the right to settle the Algreg Proceeding without
the prior written consent of Purchaser, provided Seller bears the entire
economic consequence of any such settlement.
SECTION 9.10. EMPLOYEE MATTERS. As of the Primary Closing, Purchaser
shall have extended offers of employment to those employees of Seller that are
listed on SCHEDULE 9.10, which Schedule shall be delivered to Seller five (5)
business days before the Primary Closing Date (such employees are hereinafter
referred to as "Retained Employees"); PROVIDED, HOWEVER, that any such offer of
employment shall not be construed to limit the ability of Purchaser to terminate
any Retained Employee following the Primary Closing Date for any reason. Seller
shall have terminated the employment of all Retained Employees immediately prior
to the Primary Closing and any cost, expense or liability related to the
employment of the Retained
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Employees up to the Primary Closing (including accrued salaries, bonuses,
benefits, vacation or sick pay expense and other remuneration for services
rendered prior to the Primary Closing) and any cost, expense or liability
resulting from, or incurred in connection with, such terminations shall be
the sole responsibility of Seller.
SECTION 9.11. RETURN OF ASSETS ON TERMINATION AFTER PRIMARY CLOSING.
Seller acknowledges and agrees that Purchaser shall be under no obligation to
retain or maintain any of the Assets (other than the FCC Authorization) after
the Primary Closing. In the event this Agreement is terminated after the
Primary Closing, Purchaser will transfer to Seller all of its right, title and
interest in the Assets as they exist at the time of termination (the "Returned
Assets") in exchange for no additional consideration other than Seller's
agreement to assume all of the liabilities arising under the Returned Assets
that accrue and are to be performed from and after the date of transfer,
including any obligations that arise as a result of the transfer of the Returned
Assets. Seller acknowledges and agrees that Purchaser will make no
representation or warranty as to the condition of any of the Returned Assets
(other than the FCC Authorization) in connection with their transfer to Seller.
ARTICLE X
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO
PRIMARY CLOSING
The obligation of Purchaser under this Agreement with respect to the
purchase and sale of the Assets shall be subject to the fulfillment on or prior
to the Primary Closing of each of the following conditions:
SECTION 10.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
THIS AGREEMENT. All of the representations and warranties by Seller contained
in this Agreement shall be true and correct at and as of the Primary Closing in
all material respects (except those representations and warranties qualified by
materiality, which shall be true and correct in all respects). Seller shall
have complied with and performed in all material respects all of the agreements
and covenants required by this Agreement to be performed or complied with by it
on or prior to the Primary Closing. Purchaser shall have been furnished with a
certificate or certificates of a duly authorized representative of Seller, dated
as of the Primary Closing, certifying to the fulfillment of the foregoing
conditions.
SECTION 10.02. DIRECTORS RESOLUTIONS. Seller shall deliver to Purchaser
copies of the resolutions of the board of directors and stockholders of Seller
authorizing the execution, delivery and performance of this Agreement and all
instruments and documents to be delivered in connection herewith and the
transactions contemplated hereby, duly certified by an officer of Seller.
SECTION 10.03. INCUMBENCY CERTIFICATE. Purchaser shall have received a
certificate or certificates of an officer of Seller, certifying as to the
genuineness of the signatures of officers of Seller authorized to take certain
actions or execute any certificate, document, instrument or
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agreement to be delivered pursuant to this Agreement, which incumbency
certificate shall include the true signatures of such officers.
SECTION 10.04. THIRD PARTY CONSENT; FCC GRANT. Seller shall have
delivered to Purchaser such instruments, consents and approvals of third parties
(the form and substance of which shall be reasonably satisfactory to Purchaser)
as are necessary to transfer to Purchaser without modification thereof, as of
the Primary Closing, the Assets and the Authorizations. Prior to the Primary
Closing, the FCC shall have granted its consent to the transfer and assignment
of the FCC Authorization to Purchaser without any conditions (other than
conditions generally imposed by the FCC in cellular assignment grants) which
Purchaser determines, in its sole discretion, to be materially adverse, and the
order granting such consent shall have become a Final Order.
SECTION 10.05. NO MATERIAL ADVERSE CHANGE. Other than changes affecting
the cellular telephone industry generally, there shall not have been any
material adverse change in the financial condition, assets, business, properties
or prospects of the Cellular System from the date hereof to the Primary Closing.
SECTION 10.06. OPINION OF COUNSEL TO SELLER. Purchaser shall have been
furnished with an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Nevada counsel to Seller, dated as
of the Primary Closing and addressed to Purchaser and to any financial
institution designated by Purchaser in substantially the form of EXHIBIT E
hereto.
SECTION 10.07. OPINION OF FCC COUNSEL TO SELLER. Purchaser shall have
been furnished with an opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for Seller,
dated as of the Primary Closing and addressed to Purchaser and to any financial
institution designated by Purchaser in substantially the form of EXHIBIT F
attached hereto.
SECTION 10.08. RELATED AGREEMENTS. Seller shall have executed and
delivered to Purchaser the ▇▇▇▇ of Sale and Assignment, Assumption Agreement and
Purchase Escrow Agreement in the forms set forth as Exhibits A, B and D,
respectively.
ARTICLE XI
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO
PRIMARY CLOSING
The obligations of Seller under this Agreement with respect to the
purchase and sale of the Assets shall be subject to the fulfillment on or prior
to the Primary Closing of each of the following conditions:
SECTION 11.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
THIS AGREEMENT. All of the representations and warranties by Purchaser
contained in this Agreement shall be true and correct in all material respects
at and as of the Primary Closing. Purchaser shall have complied with and
performed in all material respects all of the agreements and covenants required
by this Agreement to be performed and complied with by it on or prior to the
Primary
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Closing. Seller shall have been furnished with a certificate of an officer
of Purchaser, dated as of the Primary Closing, certifying to the fulfillment
of the foregoing conditions.
SECTION 11.02. DIRECTORS' RESOLUTIONS. Purchaser shall deliver to Seller
copies of the resolutions of its Board of Directors authorizing the execution,
delivery and performance of this Agreement and all instruments and documents to
be delivered in connection herewith and the transactions contemplated hereby,
duly certified by an authorized officer of Purchaser.
SECTION 11.03. INCUMBENCY CERTIFICATE. Seller shall have received a
certificate of the secretary or an assistant secretary of Purchaser, certifying
as to the genuineness of the signatures of representatives of Purchaser
authorized to take certain actions or execute any certificate, document,
instrument or agreement to be delivered pursuant to this Agreement, which
incumbency certificate shall include the true signatures of such
representatives.
SECTION 11.04. FCC CONSENT. The FCC shall have granted its consent to
the assignment of the FCC Authorization from Seller to Purchaser.
SECTION 11.05. OPINION OF COUNSEL TO PURCHASER. Seller shall have been
furnished with an opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel to Purchaser, dated
as of the Primary Closing and addressed to Seller in substantially the form of
EXHIBIT H hereto.
ARTICLE XII
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION AT FINAL CLOSING
The obligations of Purchaser under this Agreement with respect to the
purchase and sale of the Assets shall be subject to the fulfillment on or prior
to the Final Closing of each of the following conditions:
SECTION 12.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
THIS AGREEMENT. All of the representations and warranties by Seller contained
in this Agreement shall be true and correct in all material respects at and as
of the Final Closing, except as they have been affected by Purchaser's actions.
Seller shall have complied with and performed in all material respects all of
the agreements and covenants required by this Agreement to be performed and
complied with by it on or prior to the Final Closing. Purchaser shall have been
furnished with a certificate of a duly authorized representative of Seller,
dated as of the Final Closing, certifying to the fulfillment of the foregoing
conditions.
SECTION 12.02. OPINION OF FCC COUNSEL TO SELLER. Purchaser shall have
been furnished an opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, FCC counsel for Seller,
dated as of the Final Closing and addressed to Purchaser and any financial
institution designated by Purchaser in substantially the form of EXHIBIT G
attached hereto.
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ARTICLE XIII
CASUALTY LOSSES
In the event that there shall have been suffered between the date hereof
and the Primary Closing any casualty loss relating to the Assets that becomes
known to Seller, Seller will promptly notify Purchaser of such event. Seller
shall, to the extent practicable, repair, rebuild or replace the portion of the
Assets damaged, destroyed or lost prior to the Primary Closing Date. To the
extent the repair, rebuild or replacement of the portion of the Assets damaged,
destroyed or lost prior to the Primary Closing Date is not practicable, then the
Purchase Price shall be reduced by the amount, mutually acceptable to Purchaser
and Seller, which is estimated by the parties to equal the out-of-pocket costs
and expenses that Purchaser is reasonably likely to incur to repair, rebuild or
replace, in accordance with cellular telephone industry practices, such damaged,
destroyed or lost Assets after the Primary Closing Date, and Seller shall retain
all insurance proceeds payable as a result of the occurrence of the event
resulting in such loss or damage.
ARTICLE XIV
INDEMNIFICATION
SECTION 14.01. INDEMNIFICATION BY SELLER. (a) Notwithstanding the
Primary Closing or Final Closing, and regardless of any investigation made at
any time by or on behalf of Purchaser or any information Purchaser may have, but
subject to the terms of this Article XIV, Seller agrees to indemnify and to hold
Purchaser, its shareholders, officers, directors, and employees (the
"Indemnified Purchaser Parties") harmless from and against and in respect of any
losses (including lost revenues), damages, costs, expenses (including costs of
investigations and reasonable attorney fees), suits, demands, judgments and
diminutions in value suffered or incurred (each a "Loss" and collectively
"Losses") by Purchaser arising from or related to:
(i) Any and all Non-Assumed Liabilities, whether or not
known or asserted at or prior to the Primary Closing;
(ii) Any liability, debt, obligation, tax, claim or demand
relating to the FCC Authorization or any application therefor,
including without limitation, any fines or forfeitures imposed or
threatened to be imposed by the FCC, but only to the extent they
arise out of Seller's ownership, operation, control or sale of the
Assets or the Business or any other state of facts which existed at
or prior to the Primary Closing;
(iii) Any misrepresentation, breach of warranty, or
nonfulfillment of any agreement or covenant on the part of Seller
under this Agreement, the Schedules or Exhibits hereto, the ▇▇▇▇ of
Sale and Assignment, the Assumption Agreement, the Deposit Escrow
Agreement, the Purchase Escrow Agreement or in any closing
certificate delivered by Seller to Purchaser pursuant to Article XI
hereof; and
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(iv) All costs and expenses (including reasonable attorneys'
fees) incurred by any Indemnified Purchaser Party in connection with
any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters such Indemnified Purchaser Party is
indemnified against by Seller in this Agreement.
(b) In addition and subject to the terms of this Article XIV, Seller
shall indemnify the Indemnified Purchaser Parties against and hold them harmless
from any and all Losses which they may incur by reason of the failure (if any)
of Seller to comply with the Bulk Transfers Article of the Uniform Commercial
Code of any state.
SECTION 14.02. INDEMNIFICATION BY PURCHASER. Notwithstanding the Primary
Closing or Final Closing, and regardless of any investigation made at any time
by or on behalf of Seller or any information Seller may have, but subject to the
terms of this Article XIV, Purchaser agrees to indemnify and to hold Seller, its
shareholders, officers, directors and employees harmless from and against and in
respect of any Losses incurred by Seller arising from or related to:
(i) Any and all Assumed Liabilities;
(ii) Any liability, debt, obligation, tax, claim or demand
relating to the FCC Authorization, including without limitation, any
fines or forfeitures imposed or threatened to be imposed by the FCC,
but only to the extent they arise out of Purchaser's ownership,
operation or control of the Assets or the Business after the Primary
Closing;
(iii) Any misrepresentation, breach of warranty, or
nonfulfillment of any agreement or covenant on the part of Purchaser
under this Agreement, the Schedules or Exhibits hereto, the
Assumption Agreement, the Deposit Escrow Agreement, the Purchase
Escrow Agreement or in any closing certificate delivered by
Purchaser to Seller pursuant to Article XII hereof; and
(iv) All reasonable costs and expenses (including reasonable
attorneys' fees) incurred by Seller in connection with any action,
suit, proceeding, demand, assessment or judgment incident to any of
the matters Seller is indemnified against by Purchaser in this
Agreement.
SECTION 14.03. NOTICE OF CLAIMS; DEFENSE OF THIRD PARTY. A party
claiming indemnification under this Article XIV (the "Asserting Party") must
promptly notify (in writing and in reasonable detail) the party from which
indemnification is sought (the "Defending Party") of the nature and basis of
such claim for indemnification within the applicable Survival Period. If such
claim relates to a claim, suit, litigation or other action by a third party
against the Asserting Party or any fixed or contingent liability to a third
party (a "Third Party Claim"), the Defending Party may elect to assume and
control the defense of the Third Party Claim at its own expense with counsel
selected by the Defending Party. Notwithstanding the foregoing, the Defending
Party may not assume or control the defense if the named parties to the Third
Party Claim (including any impleaded parties) include both the Defending Party
and the Asserting
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Party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them, in
which case the Asserting Party shall have the right to defend the Third Party
Claim and to employ counsel reasonably approved by the Defending Party, and
to the extent the matter is determined to be subject to indemnification
hereunder, the Defending Party shall reimburse the Asserting Party for the
reasonable costs of its counsel. If the Defending Party assumes the defense
and control of the Third Party Claim pursuant to this Section 14.03, the
Defending Party shall not be liable for any fees and expenses of counsel for
the Asserting Party incurred thereafter in connection with the Third Party
Claim (except in the case of actual or potential differing interests, as
provided in the preceding sentence), but shall not agree to any settlement of
such Third Party Claim which does not include an unconditional release of the
Asserting Party by the third party claimant on account thereof, PROVIDED that
such requirement shall be deemed waived to the extent that the Asserting
Party does not undertake to provide and promptly execute and, concurrently
with the delivery of any such release, deliver a corresponding release of the
third party claimant with respect to such Third Party Claim. If the
Defending Party does not assume the defense of the Third Party Claim pursuant
to this Section 14.03, the Asserting Party shall have the right (i) to
control the defense thereof and (ii), if the Asserting Party shall have
notified the Defending Party of the Asserting Party's intention to negotiate
a settlement of the Third Party Claim (at the Defending Party's expense to
the extent the matter is determined to be subject to indemnification
hereunder), which notice shall include the material terms of any proposed
settlement in reasonable detail, to settle the Third Party Claim (at the
Defending Party's expense to the extent the matter is determined to be
subject to indemnification hereunder) on terms not materially inconsistent
with those set forth in such notice, unless the Defending Party shall have
notified the Asserting Party in writing of the Defending Party's election to
assume liability for and the defense of the Third Party Claim pursuant to
this Section 14.03 within ten days after receipt of such notice, and the
Defending Party promptly thereafter shall have taken appropriate action to
implement such defense. The Asserting Party shall not be entitled to settle
any such Third Party Claim pursuant to the preceding sentence unless such
settlement includes an unconditional release of the Defending Party by the
third party claimant on account thereof, PROVIDED that such requirement shall
be deemed waived to the extent that the Defending Party does not undertake to
provide and promptly execute and, concurrently with delivery of any such
release, deliver a corresponding release of the third party claimant with
respect to such Third Party Claim. The Asserting Party and the Defending
Party shall use all reasonable efforts to cooperate fully with respect to the
defense and settlement of any Third Party Claim covered by this Article XIV.
SECTION 14.04. PURCHASE ESCROW AGREEMENT. The obligation of Seller to
indemnify Indemnified Purchaser Parties for Losses pursuant to this Article XIV
shall be secured by the funds held pursuant to the Purchase Escrow Agreement.
SECTION 14.05. LIMITATIONS. The Defending Party's obligations to
indemnify the Asserting Party pursuant to this Article XIV shall be subject to
the following limitations:
(a) No indemnification shall be required to be made by the
Defending Party until the aggregate amount of the Asserting Party's Losses
exceeds $50,000 (the "Deductible"), and then indemnification shall only be
required to be made by the Defending Party to the extent
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of such Losses that exceed the Deductible; PROVIDED, HOWEVER, the Deductible
shall not be applicable to (i) Seller's obligation to indemnify the
Indemnified Purchaser Parties for Non-Assumed Liabilities, (ii) Purchaser's
obligation to indemnify Seller for Assumed Liabilities, (iii) Seller's
obligation to indemnify the Indemnified Purchaser Parties pursuant to Section
14.01(b), (iv) a breach by Seller of its representations set forth in Section
7.02, the first and second sentences of Section 7.03 and Section 7.14 or (v)
Losses resulting from fraud.
(b) All representations and warranties contained in this Agreement
shall survive the Primary Closing until the second anniversary thereof;
PROVIDED, HOWEVER, that notwithstanding the foregoing, (x) the representations
and warranties contained in Section 7.02, the first and second sentences of
Section 7.03 and Section 8.02 shall survive the Primary Closing for an unlimited
duration, (y) the representations and warranties contained in Sections 7.08 (as
it may relate to Environmental Laws), 7.11 and 7.14 shall survive the Primary
Closing until the expiration of the applicable statute of limitations, and (z)
the representations and warranties contained in Section 7.07 shall in any event
survive until the Final Closing (the applicable period of survival being
referred to as the "Survival Period"). To the extent a claim is made in respect
of a representation or warranty within the applicable Survival Period, such
representation or warranty shall survive after the Survival Period for purposes
of such claim until such claim is finally determined or settled. Each party
shall be precluded from asserting claims against the other party after the
applicable Survival Period.
ARTICLE XV
CONFIDENTIALITY AND PRESS RELEASES
SECTION 15.01. CONFIDENTIALITY. Each party shall hold in strict
confidence all documents and information concerning the other and its business
and properties and, if the transaction contemplated hereby should not be
consummated, such confidence shall be maintained, and all such documents and
information (in written form) shall immediately thereafter be returned to the
party originally furnishing the same.
SECTION 15.02. PRESS RELEASES. No press release or public disclosure,
either written or oral, of the existence or terms of this Agreement shall be
made by either Purchaser or Seller without the consent of the other subject to
the provisions of Section 15.03, and Purchaser and Seller shall each furnish to
the other advance copies of any release which it proposes to make public
concerning this Agreement or the transactions contemplated hereby and the date
upon which Purchaser or Seller, as the case may be, proposes to make such press
release.
SECTION 15.03. DISCLOSURES REQUIRED BY LAW. This Article XV shall not,
however, be construed to prohibit any party from making any disclosures to any
governmental authority that it is required to make by law or from filing this
Agreement with, or disclosing the terms of this Agreement to, any institutional
lender to such party, or prohibit Seller, Purchaser or any of their affiliates
from disclosing to its investors, partners, accountants, auditors, attorneys,
financing sources, investment bankers, parent company and broker/dealers such
terms of this transaction and such of Seller's business and financial
information as are reasonably necessary to be
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disclosed to them in connection with the Company's financing activities and
other proper business purposes.
ARTICLE XVI
TERMINATION
SECTION 16.01. TERMINATION PRIOR TO FINAL CLOSING. This Agreement may be
terminated and the transactions contemplated herein may be abandoned, by written
notice promptly given to the other party hereto, at any time prior to the Final
Closing (excepted as noted):
(a) by mutual written consent of Seller and Purchaser;
(b) by either Purchaser or Seller, if any court of competent
jurisdiction in the United States or other United States
governmental body shall have issued an order, decree or ruling or
taken any other action permanently restraining, enjoining or
otherwise permanently prohibiting the sale of the Assets to
Purchaser (which Seller and Purchaser shall have used all reasonable
efforts to have lifted or reversed) and such order, decree, ruling
or other action shall have become final and nonappealable;
(c) by Purchaser, but only prior to Primary Closing, if
Seller shall have materially breached any of its representations,
warranties, covenants or agreements set forth in this Agreement and
said breach is not cured within 10 business days after written
notice of the breach is received by Seller;
(d) by Purchaser, in the event that the FCC's order granting
its consent to the assignment of the FCC Authorization to Purchaser
is reversed, on reconsideration by the FCC or after judicial review,
or in the event that Seller's rights in the FCC Authorization are
revoked, denied or conditioned on such grounds that the value of the
FCC Authorization is materially impaired, on reconsideration by the
FCC or after judicial review, and in either event, Purchaser's right
to operate the Cellular System pursuant to the FCC Authorization
without materially adverse conditions is terminated;
(e) by Seller, but only prior to Primary Closing, if
Purchaser shall have materially breached any of its representations,
warranties, covenants or agreements set forth in this Agreement and
said breach is not cured within 10 business days after written
notice of the breach is received by Purchaser; or
(f) by either Purchaser or Seller, effective on January 1,
2001, and on the first day of any calendar quarter thereafter, if
(i) such party has provided ninety (90) days' written notice to the
other party of such termination, (ii) the Primary Closing has not
taken place at the time of termination, and (iii) the party seeking
to terminate this Agreement is not then in material breach of any of
its representations, warranties, covenants or agreements set forth
in this Agreement
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and the delay in the Primary Closing is not directly attributable to
allegations filed with the FCC against that party.
ARTICLE XVII
BROKERS' FEES
Each party represents and warrants to the other that it shall be solely
responsible for the payment of any fee or commission due to any broker or finder
it has engaged with respect to this transaction and the other party hereto shall
be indemnified for any liability with respect thereto pursuant to Article XIV
hereof.
ARTICLE XVIII
WAIVER OF JURY TRIAL
PURCHASER AND SELLER WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH
RESPECT TO THIS AGREEMENT.
ARTICLE XIX
MISCELLANEOUS
SECTION 19.01. ADDITIONAL INSTRUMENTS OF TRANSFER. (a) From time to time
after the Primary Closing, each party shall, if requested by another party,
make, execute and deliver such additional assignments, bills of sale, deeds and
other instruments, as may be reasonably necessary or proper to carry out the
specific provisions of this Agreement, including transfer to Purchaser all of
Seller's right, title and interest in and to the Assets. Such efforts and
assistance shall be without cost to any party.
(b) Anything in this Agreement to the contrary notwithstanding, Seller
is not obligated to sell, assign, transfer or convey to Purchaser any of their
rights and obligations in and to any Interest without first obtaining all
necessary approvals, consents or waivers. To the extent any of the approvals,
consents or waivers described in Section 10.04 have not been obtained by Seller
as of the Primary Closing and Purchaser elects to proceed with the Primary
Closing, Seller shall, for a period equal to the longer of six months after the
Primary Closing, the Final Closing Date, or the remaining term of such Interest,
use all reasonable efforts to (i) obtain the consent of any such third party;
(ii) cooperate with Purchaser in any reasonable and lawful arrangements designed
to provide the benefits (including, without limitation, the payment to Purchaser
of any monies received by Seller in connection therewith) of such Interest to
Purchaser so long as Purchaser performs all obligations with respect to the
Interest (and the payment of all expenses in connection therewith); and (iii)
enforce, at the request of Purchaser and at the expense and for the account of
Purchaser, any rights of Seller arising from such Interest against such issuer
thereof or the other party or parties thereto (including the right to elect to
terminate any such Interest in accordance with the terms thereof upon the
request of Purchaser); PROVIDED, HOWEVER, that neither Purchaser nor Seller
shall be obligated to pay any consideration or other sums therefor (except for
filing fees and other ordinary administrative charges and except as set forth
above) to the third party from whom such approval, consent or waiver is
requested.
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SECTION 19.02. NOTICES. All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered, sent by telecopier, recognized overnight delivery
service or mailed, registered or certified mail, return receipt requested,
postage prepaid, to the following addresses:
(i) If to Purchaser:
▇▇▇▇▇▇ Cellular of Imperial, Inc.
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Extension
Suite 200
Oklahoma City, Oklahoma 73114
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to Seller:
ACC-Arizona Cellular Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: M. ▇▇▇▇▇ ▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Chartered
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Notices delivered personally shall be effective upon delivery. Notices
transmitted by telecopy shall be effective when received, provided that the
burden of proving notice when notice is transmitted by telecopy shall be the
responsibility of the party giving such notice. Notices delivered by overnight
mail shall be effective when received. Notices delivered by registered or
certified mail shall be effective on the date set forth on the receipt of
registered or certified mail, or four (4) business days after mailing, whichever
is earlier.
SECTION 19.03. EXPENSES. Except as otherwise provided herein, each party
shall bear its own expenses and costs, including the fees of any corporate or
FCC attorney retained by it, incurred in connection with the preparation of this
Agreement and the consummation of the transactions contemplated hereby.
SECTION 19.04. TRANSFER TAXES. Seller shall pay any use, sales or
transfer taxes imposed in connection with the sale and delivery of the Assets
and rights acquired by Purchaser under this Agreement.
SECTION 19.05. COLLECTION PROCEDURES. From and after the Primary
Closing, Purchaser shall have the right and authority, at its expense, to
collect for its account all items to which it is entitled as provided in this
Agreement and to endorse with the name of Seller any checks or drafts received
on account of any such items.
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SECTION 19.06. SPECIFIC PERFORMANCE. The parties recognize and
acknowledge that in the event Seller shall fail to perform its obligations under
the terms of this Agreement, money damages alone will not be adequate to
compensate Purchaser. The parties, therefore, agree and acknowledge that in the
event Seller fails to perform its obligations under this Agreement, Purchaser
shall be entitled, in addition to any action for monetary damages, in addition
to any other rights and remedies on account of such failure, to specific
performance of the terms of this Agreement and of the covenants and obligations
hereunder.
SECTION 19.07. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada (without
application of principles of conflicts of law).
SECTION 19.08. ASSIGNMENT. Except as provided below, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (by merger or other operation of law or
otherwise) without the prior written consent of the other party, which consent
will not be unreasonably withheld, except that (a) Purchaser shall have the
right (i) at any time to assign its rights and obligations under this Agreement
to another entity controlled by the parent company of Purchaser, and (ii) after
the Primary Closing, to assign its rights and obligations under this Agreement
to any third party. A party shall provide prompt written notice to the other
party of any such assignment.
SECTION 19.09. SUCCESSORS AND ASSIGNS. All agreements made and entered
into in connection with this transaction shall be binding upon and inure to the
benefit of the parties hereto, their successors and assigns.
SECTION 19.10. AMENDMENTS; WAIVERS. No alteration, modification or
change of this Agreement shall be valid except by an agreement in writing
executed by the parties hereto. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder (and no course of dealing
between or among any of the parties) shall operate as a waiver of any such
right, power or privilege. No waiver of any default on any one occasion shall
constitute a waiver of any subsequent or other default. No single or partial
exercise of any such right, power or privilege shall preclude the further or
full exercise thereof.
SECTION 19.12. ENTIRE AGREEMENT. This Agreement merges all previous
negotiations and agreements between the parties hereto, either verbal or
written, including that certain letter agreement dated May 12, 1999, and
constitutes the entire agreement and understanding between the parties with
respect to the subject matter of this Agreement.
SECTION 19.13. THIRD PARTIES. Except as set forth in Article XIV hereof,
nothing herein, expressed or implied, is intended to or shall confer on any
person other than the parties hereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
SECTION 19.14. SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of
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this Agreement and the application of such provision to other persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law, but only as long as the continued validity,
legality and enforceability of such provision or application does not
materially (a) alter the terms of this Agreement, (b) diminish the benefits of
this Agreement or (c) increase the burdens of this Agreement, for any person.
SECTION 19.15. SECTION HEADINGS. The section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement.
SECTION 19.16. INTERPRETATION. As both parties have participated in the
drafting of this Agreement, any ambiguity shall not be construed against either
party as the drafter.
SECTION 19.17. FURTHER ASSURANCES. Seller agrees to provide to Purchaser
from time to time any information that Seller possesses with respect to the
operation of the Business and Assets prior to the Primary Closing which
Purchaser requests in the future in connection with Purchaser's financing
efforts now or in the future or in connection with any FCC or other regulatory
filing.
SECTION 19.18. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which when so executed shall be an original, but all
of which together shall constitute one agreement.
[The rest of this page is left blank intentionally.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its duly authorized representative as of the day and year
first above written.
SELLER:
ACC-ARIZONA CELLULAR COMMUNICATIONS, INC.
By: /s/ M. ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: M. ▇▇▇▇▇ ▇▇▇▇
Title: President
PURCHASER:
▇▇▇▇▇▇ CELLULAR OF IMPERIAL, INC.
By: /s/ G. ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: G. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
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