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EXHIBIT 10.54
PURCHASE AGREEMENT BY AND AMONG
WESTERN WIRELESS CORPORATION
AND
TRIAD CELLULAR CORPORATION
DATED: APRIL 24, 1997
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PURCHASE AGREEMENT
PCS
AGREEMENT, dated April 24, 1997 (the "Agreement"), by and between
WESTERN WIRELESS CORPORATION, a Washington corporation ("Buyer") and TRIAD
CELLULAR CORPORATION, a Delaware corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Seller was the successful bidder in the recently conducted
FCC auctions for the "D" and "E" Block FCC licenses for the PCS systems in the
geographic areas listed on Exhibit 5.01(f) annexed hereto; and
WHEREAS, subject to the terms and conditions hereinafter provided,
Buyer desires to purchase from Seller, and Seller desires to sell and transfer
to Buyer, Seller's right, title and interest in and to the Authorizations (as
hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, conditions and promises hereinafter set forth, the parties hereby
agree as follows:
ARTICLE 1
PURCHASE OF ASSETS
1.01 Purchase of Assets. Subject to the terms and conditions hereof
and in reliance upon the representations, warranties, covenants and agreements
herein contained, on the Closing Date (as defined in Article 2 hereof), Seller
agrees to sell, transfer, convey, assign and deliver to Buyer, and Buyer agrees
to purchase, acquire and accept from Seller, all of Seller's right, title and
interest in and to the Authorizations and all deposits with the Federal
Communications Commission ("FCC") relating thereto (collectively the "Purchased
Assets"). Seller agrees that the Purchased Assets shall include all rights
that Seller may have, whether now existing or hereafter arising, to a refund or
return of any amounts heretofore or hereafter deposited by Seller with the FCC
in connection with Seller's purchase of the Authorizations.
1.02 Buyer's Designee. Buyer shall have the right to assign to any
Person (as hereinafter defined), whether or not an Affiliate of Buyer, any and
all rights and obligations of Buyer under this Agreement; provided, however,
that no such assignment shall delay the Closing beyond October 31, 1997 or
relieve Buyer of its obligations hereunder, and Buyer and its assignee shall be
jointly and severally liable for Buyer's obligations hereunder, except that
with respect to properties purchased by a non-Affiliate of Buyer upon payment
to Seller of the Purchase Price therefor, Buyer shall be relieved of any and
all further obligations with respect to such assigned properties. "Affiliate"
shall mean, with respect to any party hereto, any corporation or other business
entity which directly or indirectly through stock ownership or through any
other arrangement either controls, is controlled by or is under common control
with, such party. The term "control" shall
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mean the power to direct the affairs of such person by reason of ownership of
voting stock or other equity interests, by contract or otherwise.
ARTICLE 2
CLOSING AND CLOSING DATE
The consummation of the transactions provided for herein (the
"Closing") shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Constant &
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ or at such other
mutually agreeable location, at 11:00 A.M. local time, on the latest to occur
of (a) the last Business Day (as hereinafter defined) of the month in which all
FCC and state regulatory approvals (if any) necessary in order to consummate
lawfully the transactions contemplated hereby have been received and shall have
become Final Orders (as hereinafter defined), (b) the last Business Day of the
month in which all applicable waiting periods under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), shall have
expired or been terminated without objection by the Federal Trade Commission
(the events described in clauses (a) and (b) above being hereinafter referred
to as the "Regulatory Approvals" and the later of the dates described in
clauses (a) and (b) above being referred to as the "Regulatory Approval Date"),
and (c) October 31, 1997, or at such other time or date to which the parties
hereto mutually agree. The day on which the Closing occurs is herein referred
to as the "Closing Date." As used herein the term "Business Day" shall mean
any day other than a Saturday, Sunday or a legal holiday in New York, New York
or in Seattle, Washington or any other day on which commercial banks are
authorized by law or governmental decree to close.
ARTICLE 3
PURCHASE PRICE AND LIABILITIES
3.01 Calculation of Purchase Price. In consideration of the sale,
transfer, conveyance, assignment and delivery of the Purchased Assets at the
Closing, Buyer shall pay or deliver to Seller the following on account of each
Authorization (the "Purchase Price"):
(a) If the Authorization has not been issued by the FCC
to Seller, the amount deposited by Seller with the FCC in connection with
Seller's successful bid for such Authorization, in immediately available funds;
or
(b) If the Authorization has been issued by the FCC to
Seller, the total amount paid by Seller to the FCC in connection with Seller's
successful bid for such Authorization, in immediately available funds.
3.02 Delivery of Instruments of Transfer. At the Closing, Seller
shall deliver to Buyer such deeds, bills of sale, assignments and other good
and sufficient instruments of conveyance, transfer and assignment as shall be
necessary to vest in Buyer title in and to the Purchased Assets of the quality
described in Section 5.01(g) hereof.
3.03 Payment of Purchase Price.
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(a) (i) At the Closing Buyer shall pay to Seller the Purchase
Price set forth in Section 3.01 hereof in immediately available funds.
(ii) Seller shall provide to Buyer on the Closing Date
evidence reasonably satisfactory to Buyer of Seller's payment of any
liabilities relating to, and of the release or termination of all Liens on, any
of the Purchased Assets of Seller.
(b) Seller shall pay at the Closing or, if due thereafter,
promptly when due, all gross receipts taxes, transfer taxes, sales taxes, stamp
taxes and any other taxes (collectively, "Transfer Taxes") payable in
connection with the transfer of the Purchased Assets from Seller to Buyer
hereunder. Seller shall prepare and file any tax return with respect to such
Transfer Taxes; provided, however, that Buyer shall have the right of
reasonable review and comment prior to such filing (such right to be exercised
by Buyer within five (5) Business Days after delivery of such returns to Buyer,
and if such right is not so exercised within such five (5) day period, Buyer
shall be deemed to have waived such right).
3.04 Assumed Liabilities. Subject to the terms and conditions hereof
and in reliance upon the representations, warranties, covenants and agreements
herein contained, at the Closing Buyer agrees to assume and perform, according
to their respective terms, as the same shall exist at the Closing Date, any and
all obligations as the successful bidder with respect to the Authorizations to
pay the FCC the successful bid amounts, less the amount of any deposits or
other amounts theretofore paid by or on behalf of Seller.
3.05 Excluded Liabilities. Notwithstanding anything to the contrary
herein contained, Buyer shall not assume any liabilities of Seller other than
as expressly set forth in Section 3.04 hereof. Any liabilities or obligations
of Seller not specifically assumed by Buyer hereunder shall continue to be the
liabilities and obligations of Seller and Seller shall indemnify and hold
harmless Buyer from and against all such liabilities and obligations. The
liabilities and obligations of Seller not assumed by Buyer hereunder include
the following:
(a) Liabilities or obligations of Seller arising out of
the indemnification agreements contained in Article 7 hereof;
(b) Any claim, liability or obligation, known or unknown,
whether absolute, contingent or otherwise, the existence of which is a breach
of any representation, warranty or covenant of Seller set forth in this
Agreement;
(c) Liabilities or obligations of Seller arising prior
to, on or after the Closing;
(d) Liabilities or obligations of Seller arising out of
this Agreement or the transactions contemplated hereby or incurred in respect
of any transaction occurring after the Closing;
(e) Liabilities for all Taxes whatsoever, whether income,
gross receipts, property, sales, use, franchise or any other taxes whatsoever,
including taxes, if any, attributable to
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the sale of the Purchased Assets hereunder, any liquidation and dissolution of
Seller or the distribution of its assets to its equity holders;
(f) Liabilities for breach of representations or
warranties to any person and liabilities arising out of product liability,
negligence or willful misconduct claims; and
(g) Liabilities, claims, obligations, judgments, orders,
duties or responsibilities of any kind or nature whatsoever, whether arising
before, on or after the Closing Date, relating to amounts payable to current or
former employees or independent contractors or agents of Seller as salary,
bonus or other compensation or benefits and with respect to any employee plans
which are now or ever have been maintained, contributed to or required to be
contributed to for the benefit of any employee.
Seller covenants and agrees to pay all liabilities and to
fulfill all obligations of Seller not assumed by Buyer hereunder as and when
the same become due, except those being contested in good faith by appropriate
proceedings and for which adequate reserves have been established.
ARTICLE 4
COVENANTS AND AGREEMENTS
4.01 Covenants of Seller. Seller covenants and agrees from and
after the execution and delivery of this Agreement to and including the Closing
Date as follows:
(a) Consummate Transactions. Seller shall use its best
efforts to cause the transactions contemplated by this Agreement to be
consummated in accordance with the terms hereof, and, without limiting the
generality of the foregoing, use its best efforts to obtain all necessary
approvals, consents, permits, licenses and other authorizations required in
connection with this Agreement and the transactions contemplated hereby of
third parties including all governmental authorities and agencies such as the
FCC, and any state public utilities or public service commission, and to make
all filings with and to give all notices to third parties which may be
necessary or reasonably required of Seller, in order to consummate the
transactions contemplated hereby, including the transfer and delivery from
Seller to Buyer of the Purchased Assets.
(b) No Binding with Respect to Purchased Assets. Seller
shall not take or consent to any action or enter into any agreements which will
bind Seller with respect to the Purchased Assets or which, upon consummation of
the transactions contemplated hereby, will bind the Buyer.
(c) Full Access. Seller shall give to Buyer and its
agents and representatives (including its independent auditors and attorneys)
reasonable access (such access not to interfere unreasonably with Seller's
business) during normal business hours and upon reasonable notice as described
below to all of Seller's personnel, premises, properties, assets, financial
statements and records, books, Contracts, documents and commitments of or
relating to the Purchased Assets, and shall furnish Buyer and its agents and
representatives with all such information concerning the
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affairs of Seller as Buyer may reasonably request. Buyer shall contact either
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or any other person(s) designated by Seller,
on behalf of Seller, to arrange for Buyer's personnel, agents and
representatives visiting any of Seller's premises or personnel, agents or
representatives, such visits to be arranged for by Seller not later than three
(3) Business Days of Buyer's request therefor.
(d) Ordinary Course. Seller hereby agrees to take all
actions necessary or required to maintain and preserve all of its rights in and
to the "D" and "E" Block FCC Licenses with respect to which Seller was the
successful bidder in the FCC auctions and which are included in the Purchased
Assets, including making all filings required to be made with the FCC (or any
other person) in a timely manner, paying all amounts required to be paid to the
FCC in a timely manner and taking all such other actions as shall be necessary
or required to obtain the Authorizations. Seller shall not, (i) without the
prior written consent of Buyer, such consent not to be unreasonably withheld,
take any actions which would be binding upon or materially adversely affect the
Purchased Assets (ii) incur any material liability, absolute or contingent,
relating to the Purchased Assets; (iii) sell, transfer, convey, mortgage,
pledge, hypothecate or subject to any lien, claim, security interest, charge,
encumbrance, restriction, title retention agreement or any liability or claim
of any nature (all of the foregoing, collectively "Liens") any of the Purchased
Assets; or (iv) enter into or extend or renew any Contract (as hereinafter
defined) relating to the Purchased Assets with any Person. As used herein the
term "Person" means any general or limited partnership, corporation, joint
venture, trust, business trust, governmental agency, cooperative, association,
individual or other entity, and heirs, executors, administrators, legal
representatives, successors and assigns of such person.
(e) Preserve Goodwill. Seller shall use its diligent
efforts to preserve the Purchased Assets.
(f) Compliance with Law. Seller shall comply in all
material respects with all applicable laws, rules, ordinances, regulations,
codes, orders, decrees, licenses and permits of all applicable jurisdictions
and governmental authorities or agencies relating to it, to its properties
(including the Purchased Assets) or to the conduct of its business.
(g) Approvals, Consents. Seller shall obtain and
maintain in full force and effect all approvals, consents, permits, licenses
and other authorizations, from all appropriate Federal, state and local
governmental agencies or authorities necessary or required for the operation of
Seller's business as it is intended to be conducted, as and when such
approvals, consents, permits, licenses or other authorizations are necessary or
required except, in the case of non-material approvals, consents, permits,
licenses or other authorizations of state and local governmental agencies and
authorities, where such failure would not have a material adverse effect on
Seller, its financial condition, prospects, the Purchased Assets or the
consummation of the transactions contemplated hereby. The parties shall
consult with one another as to the general approach to be taken with any
governmental authority or agency with respect to obtaining any necessary
consent of such governmental agency or authority to the transactions
contemplated hereby, and each of the parties shall keep each other party
reasonably informed as to the status of any such communications with any
governmental authority or agency. Seller shall not, with respect
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to the Purchased Assets, make any material commitments (other than those
typical in the wireless telephone industry) relating to any approval, consent,
permit or license to any governmental authority or agency without the prior
written consent of Buyer.
(h) No Transfer. Seller shall not (i) sell, transfer,
assign or dispose of, or offer to, or enter into an agreement to, sell,
transfer, assign or dispose of any of the Purchased Assets or (ii) create,
incur or suffer to exist any Lien of any nature whatsoever or enter into any
restriction on transfer or grant any right of first refusal relating to the
Purchased Assets.
(i) No Amendments or Issuance of Additional Shares.
Seller shall not amend its charter, by-laws or other constituent documents of
Seller, which amendment would have a material adverse effect on the Purchased
Assets or the transactions contemplated by this Agreement or which would
require any additional consents or approvals of the transactions contemplated
by this Agreement. Seller shall not issue or sell any shares of its capital
stock, or other securities, or issue options, warrants or rights of any kind to
acquire, or any securities convertible into, exchangeable for or representing a
right to purchase or receive, or enter into any contract, plan, understanding
or arrangement with respect to the issuance of, any stock-based or
stock-related awards or other equity-based awards, shares of its capital stock
or other equity or other securities, or enter into any arrangement or contract
with respect to the purchase or voting of shares of its capital stock or other
equity, or adjust, split, combine or reclassify any of its securities, or make
any other changes in its capital structure, if any such issuance, sale,
contract, plan, understanding, arrangement, adjustment, split, combination,
reclassification or changes would require any additional approvals of the
transactions contemplated by this Agreement or would otherwise adversely affect
the transactions contemplated by this Agreement.
(j) Books and Records. Seller shall maintain its books,
accounts and records in the usual manner, on a basis consistent with prior
years and in accordance with generally accepted accounting principles.
(k) Notice of Claims. Seller shall give written notice
to Buyer promptly upon the commencement of any action, investigation,
arbitration or proceeding (including any proceeding before any governmental
agency), or promptly upon obtaining knowledge of any facts giving rise to a
threat of any such action, investigation, arbitration or proceeding which
would, if adversely determined, materially and adversely affect (i) Seller's
ability to consummate the transactions contemplated hereby or (ii) the
Purchased Assets.
(l) Certain Actions. Seller shall not take any action or
refrain from taking any action which would materially interfere with or
preclude the consummation of the transactions contemplated by this Agreement,
result in any of the representations and warranties of Seller contained herein
being incorrect or incomplete in any material respect, or result in any of the
conditions to Buyer's obligation to consummate the transactions contemplated by
this Agreement as set forth in Section 6.01 hereof being unsatisfied in
accordance with the terms hereof.
(m) Notice of Breaches. Seller shall promptly after
obtaining knowledge of the occurrence of, or the impending or threatened
occurrence of, any event which would cause or constitute a breach of any
warranties, representations, covenants or agreements of Seller contained
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in this Agreement, give notice in writing of such event or occurrence or
impending or threatened event or occurrence, to Buyer and use its diligent
efforts to prevent or promptly to remedy such breach.
(n) Material Contracts. Seller shall not default in any
material respect under, or breach any term or provision of, or suffer or permit
to exist any condition or event which, after notice or lapse of time, or both,
would constitute a material default by Seller under, any contract, agreement or
other document which is binding upon or could effect the Purchased Assets or
the transactions contemplated thereby.
(o) Capital Expenditures. Following the date hereof and
prior to the Closing Date, Seller shall not make or commit or agree to make,
any capital expenditures relating to the Purchased Assets (other than the
making of any required payment to the FCC with respect to the Authorizations)
and such other capital expenditures to which Buyer shall consent in writing and
agree in writing to reimburse to Seller in full in cash on the Closing Date.
(p) Notification of Change. Seller shall advise Buyer
promptly in writing of (i) any event, condition or state of facts, including
any action, suit or proceeding, which has had or would have a material adverse
effect on the business or financial condition of Seller, on the Purchased
Assets or on the transactions contemplated by this Agreement or (ii) the
commencement of any action, suit or proceeding which seeks to enjoin the
consummation of the transactions contemplated hereby.
(r) Retention of Records. On the Closing Date, Seller
shall deliver to Buyer all books, Contracts and records of Seller relating to
the Purchased Assets; provided, however, Seller shall be entitled to retain a
copy of all books, accounting and other records following the Closing for
purposes of winding up its affairs and other proper purposes incidental to the
transactions contemplated hereby. Buyer agrees that after the Closing Date all
books, Contracts and records relating to the Purchased Assets prior to the
Closing Date, shall for a period of five (5) years following the Closing Date
or, if later, up to the termination of the statute of limitations for any
matter with respect to which Seller is indemnifying Buyer and its Affiliates
hereunder, be available at the written request of and at the expense of Seller
during regular business hours to Seller and its authorized representatives,
accountants and attorneys for any reasonable business purpose. All information
so made available to Seller or retained by Seller after the Closing Date shall
be held in confidence by Seller in accordance with Section 8.11 hereof. In
addition, for a period of five (5) years after the Closing Date, at the written
request and expense of Buyer, Seller shall make available to Buyer copies of
any documents not theretofore delivered to Buyer relating to any potential or
actual tax liabilities of Seller for any periods ending on or prior to the
Closing Date.
(s) No Termination or Settlement. Without the prior
written consent of Buyer, which consent shall not be unreasonably withheld,
Seller shall not terminate any agent or settle any dispute with any agent if
such termination or settlement would cause Buyer to have any continuing
obligation after the Closing with respect thereto.
4.02 Covenants of Buyer. Buyer covenants and agrees that from and
after the execution and delivery of this Agreement to and including the Closing
Date:
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(a) Consummate Transaction. Buyer shall use its best
efforts to cause the transactions contemplated by this Agreement to be
consummated in accordance with the terms hereof, and, without limiting the
generality of the foregoing, (i) to obtain all necessary consents and
authorizations of third parties, including the approval of this Agreement and
the transactions contemplated hereby by all governmental authorities and
agencies, including the FCC and any state public utilities or public service
commission, (ii) to make all filings with and to give all notices to third
parties which may be necessary or reasonably required of Buyer in order to
consummate the transactions contemplated hereby and (iii) if necessary in order
to obtain any required FCC consent, assign its rights hereunder with respect to
one or more of the Authorizations to one or more third parties (subject to the
provisions of Section 1.02 hereof).
(b) Buyer Not to Control. Notwithstanding any provision
of this Agreement that may be construed to the contrary, pending the Closing,
Seller shall maintain actual (de facto) and legal (de jure) control over its
business, including the Authorizations and the commencement of any operations
thereunder. Specifically, the responsibility for the operation of Seller's
business shall, pending the Closing, reside with its board of directors,
including responsibility for the following matters: (i) access to and the use
of the facilities of and equipment owned by Seller; (ii) control of the daily
operation of Seller; (iii) creation and implementation of policy decisions;
(iv) employment and supervision of employees; (v) payment of financing
obligations and expenses incurred in the operation of Seller; (vi) receipt and
distribution of monies and profits derived from the operation of Seller; and
(vii) execution and approval of all Contracts and applications prepared and
filed before regulatory agencies.
(c) Buyer covenants at Seller's request to enter into
roaming agreements with Seller or persons which on the date hereof are
Affiliates of Seller pursuant to which Seller's or such other person's PCS
customers are permitted to roam during the five year period following the
Closing Date on Buyer's wireless communications systems on terms substantially
equivalent in all material respects to those provided for in the roaming
agreements existing at the date hereof between Buyer and AT&T Wireless
Services.
4.03 Governmental Filings. Seller and Buyer covenant and agree from
and after the execution and delivery of this Agreement to and including the
Closing Date as follows:
(a) It is understood that the Closing of this transaction
is subject to prior approval of the FCC and may be subject to the prior
approval of one or more state regulatory commissions. The parties shall use
their best efforts to file with the FCC and any relevant state agency or
agencies, as soon as practicable following the date hereof and in no event
later than ten (10) Business Days from the date hereof, a joint application
requesting the approval of the assignment or transfer of the Authorizations and
Purchased Assets to Buyer, or its designee. Each of the parties hereto shall
diligently take or cooperate in the taking of all steps which are necessary or
appropriate to expedite the prosecution and favorable consideration of such
applications. The parties covenant and agree to undertake all actions
reasonably requested by the FCC or other regulatory authority and to file such
material as shall be necessary or required to obtain any necessary waivers or
other authority from the FCC or such state agency or agencies in connection
with the foregoing applications.
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(b) Within fifteen (15) Business Days of the date of
execution hereof, Buyer and Seller shall file, or cause to be filed, with the
Federal Trade Commission and the Antitrust Division of the Department of
Justice any and all reports or notifications which are required to be filed
under the HSR Act or other Federal law or administrative regulations.
4.04 Cooperation. Seller and Buyer agree to cooperate with and to
take all actions reasonably requested by the other so as to minimize, to the
extent possible, any disruption to any of Seller's operations upon the Closing
and, in connection therewith, Seller shall provide, subject to the last
sentence of Section 4.01(c) hereof, Buyer with reasonable access to its
employees and facilities prior to the Closing Date, and shall cause Seller's
employees, agents, advisors, subcontractors and representatives to work with
Buyer and its employees, agents, advisors, subcontractors and representatives
for purposes of planning for and implementing the transfer of control of the
Purchased Assets to Buyer on the Closing Date.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.01 Seller's Representations and Warranties. Seller represents and
warrants to Buyer, which representations and warranties shall survive the
execution and delivery of this Agreement and the consummation of the
transactions herein contemplated, as follows:
(a) Due Organization. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Seller has all requisite corporate power and authority to own,
operate and lease its property and to carry on its business as now conducted.
Seller is duly qualified to do business and is in good standing in all states
where the conduct of its business or the ownership of its properties makes such
qualification necessary, except where the failure to so qualify would not have
a material adverse effect on Seller, its financial condition or business, or
the transactions contemplated hereby. The certificate of incorporation and
by-laws of Seller to be delivered to Buyer pursuant to this Agreement will be
true, correct and complete as of the date of delivery thereof.
(b) Power and Authority; No Violation. Seller has full
power and authority to execute, deliver and perform its obligations under this
Agreement, and to consummate the transactions contemplated hereby. This
Agreement and all transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of Seller and this Agreement
constitutes a legal, valid and binding obligation of Seller enforceable in
accordance with its terms except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally. Neither the execution, delivery
or performance of this Agreement by Seller nor the consummation of the
transactions contemplated hereby will, with or without the giving of notice or
the passage of time, or both (i) conflict with, result in a default or loss of
rights (or give rise to any right of termination, cancellation or acceleration)
under, or result in the creation of any Lien, pursuant to (A) any provision of
the certificate of incorporation, by-laws, shareholders agreement or other
constituent documents of Seller; (B) any material note, bond, indenture,
mortgage, deed of trust, contract, agreement, lease or other instrument or
obligation to which Seller is a party or by which Seller or its
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properties may be bound or affected; or (C) any law, order, judgment,
ordinance, rule, regulation or decree to which Seller is a party or by which
its properties are bound or affected; or (ii) give rise to any right of first
refusal or similar right with respect to any interest, or any properties or
assets, of Seller. Except as described on Exhibit 5.01(b) annexed hereto, no
permit, consent, filing or approval of any third party is required to be
obtained or made by Seller in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby in
order to (A) render this Agreement and the transactions contemplated hereby
valid and effective and (B) enable Seller to sell the Purchased Assets to Buyer
and to consummate the transactions contemplated hereby. Seller has not granted
any powers of attorney granting to any Person the right to bind Seller other
than those to be released on or prior to the Closing Date or those which do not
relate to the Purchased Assets or the transactions contemplated hereby.
(c) Legal Matters. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, writ, injunction, decree or
judgment (collectively, the "Legal Matters"), in progress or pending, or to the
knowledge of Seller, threatened, against or relating to Seller or its business
or assets including the Purchased Assets, nor does Seller know or have reason
to be aware of any basis for the same, which would individually or in the
aggregate have a material adverse effect on (i) Seller or Seller's ownership of
the Purchased Assets or Seller's ability to sell the Purchased Assets as herein
contemplated, (ii) the business or financial condition of Seller, or (iii) the
transactions contemplated by this Agreement.
(d) Accounts Receivable. Seller has no accounts
receivable relating to the Purchased Assets.
(e) Compliance with Laws. Seller is in compliance with
all applicable laws, regulations and administrative orders of the United States
and the states in which Seller transacts business (including all applicable
rules and regulations of the FCC, any state public utilities or public service
commission, or any other Federal or state governmental agency or
instrumentality exercising jurisdiction over Seller or its properties or
business), and of each municipality, county or subdivision of any thereof, to
which any of its business or any of its properties may be subject, the
non-compliance with which would have a material adverse effect upon (i)
Seller's ownership of the Purchased Assets or ability to sell the Purchased
Assets as herein contemplated, or (ii) Seller, its financial condition or
business, or the transactions contemplated hereby.
(f) Authorizations.
(i) Seller (A) was the successful bidder for the
"D" and "E" Block FCC licenses for the PCS systems in the geographic areas
listed on Exhibit 5.01(f) annexed hereto and has filed applications for all
requisite franchises, licenses, authorizations, consents, permits and approvals
of the FCC related to the PCS Systems covered by such "D" and "E" Block FCC
licenses and (B) has filed applications for all other material franchises,
licenses, authorizations, consents, permits and approvals of governmental
agencies exercising jurisdiction over Seller or its business or assets (all
such franchises, licenses, authorizations, consents, permits and approvals, as
amended to the date hereof, including all rights of Seller as the successful
bidder for the "D" and "E" block
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FCC licenses for the PCS systems in the geographic areas listed on Exhibit
5.01(f) annexed hereto, are collectively referred to as the "Authorizations"),
required to carry on the business of Seller as now conducted with respect to
the PCS systems in the geographic areas listed on Exhibit 501.(f) annexed
hereto.
(ii) Except as set forth on Exhibit 5.01(f)
annexed hereto, there is not pending as of the date hereof any application,
petition, objection or other pleading with the FCC or any public service
commission or similar body having jurisdiction or authority over the
communications operations of Seller which questions the validity of or contests
any Authorization or associated application, or which presents a substantial
risk that, if accepted or granted, would result in the revocation,
cancellation, suspension or any materially adverse modification of any
Authorization, or would result in the failure of the FCC to grant any of the
Authorizations to Seller.
(iii) Except as set forth on Exhibit 5.01(f)
annexed hereto, no permit, consent, approval, authorization, qualification or
registration of, or declaration to or filing with, any governmental or
regulatory authority or agency is required to be obtained or made by Seller in
connection with the execution and delivery of this Agreement or with the
consummation of the transactions contemplated hereby in order to (A) render
this Agreement and the transactions contemplated hereby valid and effective and
(B) enable Seller to sell the Purchased Assets to Buyer as herein contemplated.
(iv) At the Closing no action shall have been
taken or will be taken to set aside the rights granted by the FCC with respect
to the "D" and "E" Block licenses with respect to the PCS systems in the
geographic areas listed on Exhibit 5.01(f) annexed hereto.
(g) Title of Seller to Purchased Assets. Seller has all
right, title and interest in and to the Purchased Assets, free and clear of all
Liens; provided, however, that the FCC has not yet awarded the Authorizations
and Seller has not yet made final payment for the Authorizations, but has made
a deposit therefor.
(h) Tax Matters. Seller has timely filed all Federal,
state and local Tax (as hereinafter defined) returns and all information
returns and reports required to be filed by or with respect to it under the
laws of the United States or any state or other jurisdiction on or prior to the
date hereof and will timely file all such returns and reports required to be
filed from the date hereof through the Closing Date. True and complete copies
of such reports and returns filed on or before the date hereof have been or
will be furnished or made available to Buyer within thirty (30) days after the
date hereof and true and complete copies of all such returns and reports filed
after the date hereof and on or before the Closing Date will be furnished to
Buyer within five (5) days after they are filed. All such reports and returns
were or will be accurately prepared in accordance with all applicable statutes,
rules and regulations and are or will be correct as filed. Seller has paid
all Taxes (including Taxes for which Seller is a collection agent, e.g.,
withholding, excise, sales, use, Social Security and similar Taxes) which have
become due and payable (and will pay prior to the Closing Date all Taxes which
shall have become due and payable on or prior to the Closing Date) with respect
to Seller for all taxable periods ending on or prior to the Closing Date or
will have set aside and reflected on the Closing Date Balance Sheets adequate
reserves therefor. Seller has never
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been included in a consolidated Federal income tax return or combined or
unitary state tax return. Seller is not a party to nor has Seller been
notified that it is the subject of any pending, proposed or threatened action,
investigation, proceeding, audit, claim or assessment by or before the Internal
Revenue Service or any other governmental authority and no claim for
assessment, deficiency or collection of Taxes, or proposed assessment,
deficiency or collection, for which Seller may be liable, has been asserted or
threatened against it. Seller has not received any notice of deficiency,
assessment or collection or proposed deficiency, assessment or collection from
the Internal Revenue Service or any other governmental authority which has not
been satisfied, nor, except as set forth on Exhibit 5.01(h)annexed hereto, does
Seller have any reason to believe that any such notice will be received in the
future. The Internal Revenue Service has never audited any Federal income tax
return of Seller. The charges, accruals and reserves shown in the Operating
Financial Statements of Seller in respect of Taxes for all fiscal periods to
date are adequate. There are no material unpaid assessments or proposals for
additional Taxes for which Seller does not have adequate reserves, nor does
Seller know of any basis therefor for any such period. There are no Tax
rulings, requests for rulings or closing agreements relating to Seller which
could affect its liability for Taxes for any period after the Closing Date.
Except as set forth on Exhibit 5.01(h) annexed hereto (i) no power of attorney
has been granted by Seller or any of its Affiliates with respect to any matter
relating to Taxes of Seller which is currently in force, (ii) Seller has not
filed any agreement with the Internal Revenue Service described in Section
1.1503-2A(c)(3) of the Treasury Regulations, (iii) Seller has not filed a
consent or made any agreement with the Internal Revenue Service under Section
341(f) of the Internal Revenue Code of 1986, as amended (the "Code"), or any
comparable provision of state revenue statutes, and (iv) Seller is not a
"foreign person" within the meaning of Section 1445(f)(3) of the Code. Seller
has not executed or filed with the Internal Revenue Service or any other
governmental authority any agreement which is still in effect waiving or
extending the period for assessment or collection of any Taxes. Seller, and
not Buyer, shall be liable for any Taxes, payable by Buyer or Seller by reason
of the ownership of the Purchased Assets on or prior to the Closing Date, the
conduct of Seller's business with respect to all periods ending prior to, on or
after the Closing Date or payable by Seller by reason of the sale of the
Purchased Assets. "Taxes" shall mean all taxes of any kind, including those
on, or measured by or referred to as income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property or windfall profits taxes,
customs duties or similar fees, assessments or charges of any kind whatsoever,
together with any interest and any penalties, additions to tax or additional
amounts imposed by any taxing authority, domestic or foreign.
(i) Contracts. Seller has not entered into any Contracts
(as hereinafter defined) relating to the Purchased Assets. As used herein,
"Contracts" means all leases, rental agreements, insurance policies, collective
bargaining agreements, union contracts, licenses, agreements, permits, purchase
orders, sales orders, agreements with suppliers, reseller agreements,
agreements with agents, agreements with customers, commitments and any and all
other contracts, consents or binding arrangements or understandings (including
capital commitments and arrangements with respect to construction in progress),
whether written or oral, express or implied, to which Seller is a party and
which in any way relate to the Purchased Assets or which will be binding upon
Buyer, its operations or properties (including Purchased Assets) after the
Closing Date.
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(j) No Sale. Except for this Agreement, Seller has not
entered into any Contract to sell, mortgage or encumber any of the Purchased
Assets, nor is there any Lien on any of the Purchased Assets.
(k) Investment Company Act. Seller is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(l) Truth and Correctness. No representation or warranty
by Seller herein, nor any written statement or certificate or other instrument
furnished to Buyer by Seller pursuant hereto or in connection with the
transactions contemplated hereby, including the Exhibits annexed hereto,
contains any untrue statement of a material fact or omits or will omit to state
a material fact necessary to make the statements contained herein or therein,
in light of the circumstances under which such statements are made, not
misleading.
5.02 Buyer's Representations and Warranties. Buyer represents and
warrants to Seller as follows:
(a) Due Incorporation. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Washington and has all requisite corporate power and authority to enter into
this Agreement and to perform its obligations hereunder.
(b) Authority. This Agreement and all transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of Buyer and this Agreement constitutes a legal,
valid and binding obligation of Buyer enforceable in accordance with its terms
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally. Neither the execution, delivery or performance of
this Agreement nor the consummation of the transactions contemplated hereby by
Buyer will, with or without the giving of notice or the passage of time, or
both, conflict with, result in a default or loss of rights (or give rise to any
right of termination, cancellation or acceleration) under, or result in the
creation of any Lien, pursuant to (i) any provision of the certificate of
incorporation or by-laws of Buyer; (ii) any material note, bond, indenture,
mortgage, deed of trust, contract, agreement, lease or other instrument or
obligation to which Buyer is a party or by which it or its property is bound or
affected; or (iii) any law, order, judgment, ordinance, rule, regulation or
decree to which Buyer is a party or by which it or its property is bound or
affected. Except as described on Exhibit 5.02(b) annexed hereto, no permit,
consent, approval, authorization, qualification or registration of, or
declaration to or filing with any governmental or regulatory authority or
agency or third party is required to be obtained or made by Buyer in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby in order to (A) render this Agreement or the
transactions contemplated hereby valid and effective and (B) enable Buyer to
purchase the Purchased Assets as herein contemplated.
(c) Legal Matters. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of Buyer threatened, against or
relating to Buyer's right to perform its obligations under this Agreement, nor
does Buyer know
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or have reason to be aware of any basis for the same. There is outstanding no
order, writ, injunction, judgment or decree of any court, governmental agency
or arbitration tribunal which would individually or in the aggregate have a
material adverse effect on Buyer's obligations hereunder or the transactions
contemplated by this Agreement other than orders or decrees involving the
wireless telephone industry in general.
(d) Truth and Correctness. No representation or warranty
by Buyer, or any written statement or certificate or other instrument furnished
to Seller by Buyer pursuant hereto or in connection with 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 necessary to make
the statements contained herein or therein, in light of the circumstances under
which such statements are made, not misleading.
5.03 No Brokers. Buyer represents and warrants to Seller that no
agent, broker, investment banker, Person or firm is or will be entitled to any
broker's or finder's fee or any other commission or similar fee directly or
indirectly in connection with the transactions contemplated by this Agreement
based in any way on any arrangements, agreements or understandings made by or
on behalf of Buyer, and Buyer hereby agrees to indemnify Seller and agrees to
hold harmless Seller against and in respect of any claims for brokerage and
other commissions relating to such transactions based in any way on any
arrangements, agreements or understandings made by or on behalf of Buyer.
Seller represents and warrants to Buyer that, except for Columbia Capital
Corporation, no agent, broker, investment banker, Person or firm is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
directly or indirectly in connection with the transactions contemplated by this
Agreement based in any way on any arrangements, agreements or understandings
made by or on behalf of Seller and Seller hereby agrees to indemnify Buyer and
agrees to hold harmless Buyer against and in respect of any claims for
brokerage and other commissions relating to such transactions based in any way
on any arrangements, agreements or understandings made by or on behalf of
Seller, including those with Columbia Capital Corporation.
ARTICLE 6
CONDITIONS TO OBLIGATIONS
6.01 Conditions to Buyer's Obligation. The obligation of Buyer to
perform, fulfill or carry out its agreements, undertakings and obligations
herein made or expressed to be performed, fulfilled or carried out on the
Closing Date is and shall be subject to fulfillment of or compliance with, on
or prior to the Closing Date, the following conditions precedent, any of which
may be waived by Buyer, in its sole discretion, in whole or in part:
(a) Each of the representations and warranties of Seller
contained in this Agreement shall be deemed to have been made again at and as
of the time of the Closing and shall then be true in all material respects
except for changes contemplated by this Agreement. Seller shall have performed
and complied in all material respects, with all agreements, covenants and
conditions required by this Agreement to be performed or complied with by each
of them prior to or at the Closing. Buyer shall have been furnished with a
certificate of Seller signed by its
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Chairman, President or Vice Chairman dated the Closing Date, certifying to the
fulfillment of the foregoing conditions by Seller and to the truth and
correctness in all material respects, except for changes contemplated by this
Agreement, as of the Closing Date, of the representations and warranties of
Seller contained herein.
(b) There shall not then be pending by any third party
any suit or proceeding to restrain or invalidate, in whole or in part, this
Agreement or the transactions herein contemplated.
(c) Buyer shall have been furnished with an opinion of
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for Seller, dated the Closing Date, substantially in
the form of Exhibit 6.01(c) annexed hereto.
(d) Buyer shall have been furnished with an opinion of
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, FCC counsel for Seller, dated the
Closing Date, substantially in the form of Exhibit 6.01(d) annexed hereto.
(e) The waiting periods, if applicable, of the HSR Act
shall have expired or been terminated.
(f) All consents, approvals and actions of third parties
including all approvals from Federal, state and local authorities (including
the FCC and all public service commissions and public utility commissions or
comparable bodies exercising jurisdiction over Seller) as may be required for
the valid assignment and transfer to Buyer, as of the Closing Date, of all
right, title and interest in and to the Purchased Assets, shall have been
obtained or made pursuant to a Final Order, which consents and approvals shall
not contain any conditions or restrictions which, in the case of FCC approvals,
are not customary in transactions of this nature, and which in the case of
third party consents and approvals, materially adversely affect Seller or its
business or financial condition, or the value of the Purchased Assets, or the
consummation of the transactions contemplated hereby. "Final Order" means an
action or decision as to which: (i) no request for a stay is pending, no stay
is in effect, and any deadline for filing such request that may be designated
by statute or regulation has passed; (ii) no petition for rehearing or
reconsideration or application for review is pending and the time for filing
any such petition or application has passed; (iii) the FCC or public utility
commission, public service commission (or comparable bodies exercising
jurisdiction over any of Seller or its business) does not have the action or
decision under reconsideration on its own motion and the time for initiating
such reconsideration has passed; and (iv) no appeal is pending or in effect and
any deadline for filing any such appeal that may be designated by statute or
rule has passed. Notwithstanding anything to the contrary herein contained, it
shall not be a condition to Buyer's obligations under this Agreement for Seller
to obtain each individual required consent (other than any consents of the FCC,
any public utility or public service commission (or comparable bodies
exercising jurisdiction over Seller or its business)) so long as the failure to
obtain any such individual consent would not individually or together with all
such other failures to obtain consents have a material adverse effect on the
Purchased Assets or their ownership or operation by Buyer or the consummation
of the transactions contemplated hereby.
(g) Seller shall have delivered to Buyer such deeds,
bills of sale and other good and sufficient instruments of conveyance, transfer
and assignment, all in form and substance
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reasonably satisfactory to Buyer's counsel, as shall be effective to vest in
Buyer good and marketable title in and to the Purchased Assets, free and clear
of any Liens, restrictions on transfer and rights of first refusal.
(h) Seller shall deliver to Buyer (i) copies of its
certificate of incorporation certified by the Secretary of State of the
jurisdiction of its incorporation, (ii) copies of its by-laws certified by its
secretary, and (iii) certificates of good standing of recent date from the
jurisdiction of its incorporation and all jurisdictions in which it is
qualified to do business; and (iv) a lien and judgment search in the offices of
the Secretaries of State of the states of Colorado, Kansas, Minnesota, New
Mexico, Oklahoma, Texas and Utah and in the office of the county clerk of the
appropriate counties therein, dated not earlier than fifteen (15) Business Days
prior to the Closing Date, the results of which are consistent with the
representations of Seller contained herein.
(i) Seller, for itself and its Affiliates, officers,
directors and shareholders shall have delivered to Buyer documentation
(including a general release) in form reasonably satisfactory to Buyer
evidencing the release and discharge of any and all claims which it or its
Affiliates, partners, officers, directors and shareholders may have against the
Purchased Assets.
(j) Seller shall have delivered to Buyer a certified copy
of the resolution or resolutions duly adopted by its board of directors (and
shareholders if required) authorizing the execution, delivery and performance
of this Agreement.
(k) No statute, rule or regulation shall have been
enacted by any state or Federal government or governmental agency in the United
States which would render the consummation of this Agreement unlawful.
(l) Seller shall have delivered to Buyer an affidavit
certifying as to Seller's non-foreign status in accordance with Section
1445(b)(2) of the Code.
(m) The transactions contemplated by each of (i) the
Purchase Agreement, of even date herewith, among Buyer, Seller, Triad Texas,
L.P., Triad Utah, L.P., Triad Oklahoma, L.P. and Triad Cellular, L.P. and (ii)
the Agreement and Plan of Merger, of even date herewith, among Buyer, Seller,
Minnesota Cellular Corporation, Triad Investment Minnesota, Inc., ▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Triad Cellular L.P. and Triad
Minnesota, L.P. (the Agreements referred to in clauses (i) and (ii)
collectively referred to as the "Purchase Agreements") shall have been
consummated, or shall be consummated concurrently herewith, in accordance with
the terms of such Purchase Agreements; provided, however, if such Agreement and
Plan of Merger shall have been terminated by reason of a Stockholder's Failure
(as defined in such Agreement and Plan of Merger), the consummation of the
Agreement and Plan of Merger shall not be a condition to the consummation of
the transactions contemplated hereby.
6.02 Conditions to Seller's Obligation. The obligation of Seller to
perform, fulfill or carry out its agreements, undertakings and obligations
herein made or expressed to be performed, fulfilled or carried out on the
Closing Date is and shall be subject to fulfillment of or compliance with, on
or prior to the Closing Date, the following conditions precedent, any of which
may be waived by Seller, in its sole discretion, in whole or in part:
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(a) Each of Buyer's representations and warranties
contained in this Agreement shall be deemed to have been made again at and as
of the time of the Closing and shall then be true in all material respects,
except for changes contemplated by this Agreement. Buyer shall have performed
and complied in all material respects with all agreements, covenants and
conditions required by this Agreement to be performed or complied with by Buyer
prior to or at the Closing. Seller shall have been furnished with a
certificate of Buyer's Chief Executive Officer, Vice Chairman or Senior Vice
President, dated the Closing Date, certifying to the fulfillment of the
foregoing conditions by Buyer and to the truth and correctness in all material
respects, except for changes contemplated by this Agreement, as of the Closing
Date, of the representations and warranties of Buyer contained herein.
(b) There shall not then be pending by any third party
any suit or proceeding to restrain or invalidate this Agreement or the
transactions contemplated hereby; provided, however, if Buyer desires to close
notwithstanding any such suit or proceeding and agrees to indemnify and hold
harmless Seller from any damages, losses, liabilities and expenses (including
reasonable attorneys' fees and expenses) incurred by Seller as a result of such
suit or proceeding, then Seller shall nevertheless be obligated to consummate
the transactions contemplated hereby.
(c) Buyer shall have delivered to Seller on the Closing
Date the Purchase Price as provided in Section 3.01 hereof.
(d) All consents, approvals and actions of third parties,
including all approvals from Federal, state and local authorities (including
the FCC and all public service commission and public utilities commission or
comparable bodies exercising jurisdiction over Seller) as may be required for
the valid assignment and transfer by Seller to Buyer of the Purchased Assets
shall have been obtained; provided, however, that such consents, approvals and
actions need not be Final Orders.
(e) Seller shall have been furnished with an opinion of
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Constant & ▇▇▇▇▇▇▇▇, counsel for Buyer, dated the Closing
Date, substantially in the form of Exhibit 6.02(e) annexed hereto.
(f) Seller shall have been furnished with a certified
copy of the resolution or resolutions duly adopted by the board of directors of
Buyer authorizing the execution, delivery and performance of this Agreement.
(g) No statute, rule or regulation shall have been
enacted by any state or Federal government or governmental agency in the United
States which would render the consummation of this Agreement unlawful.
(h) The waiting periods, if applicable, of the HSR Act
shall have expired or been terminated.
(i) The transactions contemplated by each of the Purchase
Agreements shall have been consummated in accordance with the terms of such
Purchase Agreements; provided, however, if such Agreement and Plan of Merger
shall have been terminated by reason of a
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Stockholder's Failure (as defined in such Agreement and Plan of Merger), the
consummation of the Agreement and Plan of Merger shall not be a condition to
the consummation of the transactions contemplated hereby.
ARTICLE 7
SURVIVAL; INDEMNITY
7.01 Survival of Representations and Warranties. Notwithstanding any
investigation or review made at any time by or on behalf of any party hereto,
all representations and warranties contained in this Agreement or in the
Exhibits annexed hereto or in any of the agreements, certificates or
instruments delivered in connection herewith (other than the representations
and warranties contained in Section 5.01(g) (the "Title Representations"),
Section 5.01(f) and the first two sentences of Section 5.01(b) and the first
sentence of Section 5.02(b) (the "Authorization Representations") and Section
5.01(h) (the "Tax Representations"), shall survive the Closing for a period of
one year and one hundred and eighty days after the Closing Date (the
"Indemnification Period") and shall thereupon expire together with any right to
indemnification (except with respect to any claim for breach of any such
representation or warranty for which written notice shall have been given prior
to the termination of the Indemnification Period to the party which made such
representation or warranty). The Title Representations, the Authorization
Representations and the Tax Representations and the liabilities and obligations
of Seller under Section 3.05 hereof shall survive the Closing until the
expiration of any applicable statutes of limitation, such statutes of
limitations period being the Indemnification Period with respect to the Title
Representations, the Authorizations Representations and the Tax Representations
and the liabilities and obligations of Seller under Sections 3.05 hereof.
7.02 Seller's Indemnity.
(a) During the Indemnification Period (or thereafter
solely with respect to any claim for indemnification for which notice has been
given prior to the expiration of the Indemnification Period), in addition to
any other indemnification provided for under this Agreement, Seller shall
indemnify and hold harmless Buyer and its Affiliates from and against any and
all demands, claims, losses, liabilities, actions or causes of action,
assessments, actual damages (but excluding consequential damages), fines, Taxes
(including excise and penalty taxes), penalties, costs and expenses (including
interest, expenses of investigation, reasonable fees and disbursements of
counsel, accountants and other experts (whether such reasonable fees and
disbursements of counsel, accountants and other experts relate to claims,
actions or causes of action asserted by Buyer against Seller or asserted by
third parties)) (collectively "Losses") incurred or suffered by Buyer and its
Affiliates and their respective officers, directors, employees, shareholders,
agents and representatives arising out of, resulting from, or relating to:
(i) any breach of any of the representations or
warranties made by Seller in this Agreement or in any agreement, certificate,
Exhibit or other instrument delivered by Seller pursuant to this Agreement;
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(ii) any failure by Seller to perform any of its
covenants or agreements contained in this Agreement or in any agreement,
certificate, Exhibit or other instrument delivered by Seller pursuant to this
Agreement;
(iii) any and all liabilities of Seller other than
those expressly assumed by Buyer pursuant to Section 3.04 hereof;
(iv) any liabilities arising out of, resulting
from or relating to the liabilities of Seller, or any other member of any
affiliated group or "controlled group," within the meaning of Section 414(b),
(c), (m) and (o) of the Code, of which Seller was a member on or prior to the
Closing Date which liability exists by reason of Seller having been a member of
such affiliated or controlled group, including liabilities relating to (A) the
funding, operation, maintenance, administration, amendment or termination of,
or the withdrawal or partial withdrawal from, any employee plan relating to any
period on or prior to the Closing and including losses arising under Title IV
of ERISA, Section 302 of ERISA, Section 412 or 4971 of the Code, (B) compliance
with COBRA under Section 4980B of the Code, and (C) environmental matters with
respect to any operations of, or properties owned, occupied or operated or
formerly owned, leased or operated by, Seller or any other member of an
affiliated group or "controlled group" of which Seller was a member prior to
the Closing Date; or
(v) any and all of liabilities of Seller for
Taxes.
(b) Notwithstanding anything to the contrary contained in
Section 7.02(a), Seller shall not be required to pay or reimburse Buyer or its
Affiliates for Losses pursuant to Seller's indemnification obligation pursuant
to Section 7.02 which (when aggregated with any Losses paid to Buyer, or
Buyer's Affiliates, by Seller or Seller's Affiliates pursuant to Article 7 of
(i) the Purchase Agreements, or (ii) the Agreement, of even date herewith,
between Buyer and TCLP with respect to the acquisition by Buyer of the Texas 1
RSA; the Agreements referred to in clauses (i) and (ii) above being referred to
as the "Concurrent Agreements") are in excess of One Hundred Million
($100,000,000) Dollars.
(c) Notwithstanding anything to the contrary contained in
this Section 7.02, neither Buyer nor its Affiliates shall be entitled to seek
indemnification under Section 7.02(a) for any Losses unless the aggregate
amount of Buyer's or its Affiliates' Losses in respect of all such matters,
when aggregated with the aggregate amount of Buyer's or its Affiliates Losses
(as such terms are defined in the Concurrent Agreements) arising under the
Concurrent Agreements (as more particularly set forth in Article 7 of the
Concurrent Agreements), exceeds $375,000, in which event Buyer and its
Affiliates shall be entitled to seek indemnification under this Section 7.02
for the amount of such Losses in excess of $375,000; provided, however, that
the foregoing limitation with respect to Buyer's or its Affiliates' right to
indemnification shall not be applicable to Losses arising from or relating to
(and Buyer and its Affiliates shall be entitled to indemnification for all such
Losses commencing with the first dollar of such Losses) any breach of the Title
Representations, the Authorization Representations and the Tax Representations
and the liabilities and obligations of Seller under Section 3.05 hereof.
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(d) As collateral security for Seller's indemnification
obligations under this Agreement and Seller's or its Affiliates'
indemnification obligations under the Concurrent Agreements, Seller, or its
Affiliates shall deliver, or cause to be delivered to a national bank to be
mutually agreed to (the "Escrow Agent") to be held in escrow pursuant to the
terms of an Escrow Agreement, in substantially the form of Exhibit 7.02(d)
annexed hereto (the "Escrow Agreement"); to be entered into on the Closing
Date, at Seller's option either Six Million ($6,000,000) Dollars in cash or
Four Hundred Eighty Thousand (480,000) shares of Buyer's Class A Common Stock,
no par value ("Shares"), issued in accordance with the Merger Agreement (such
cash or shares being referred to herein as the "Escrow Fund"). The Escrow Fund
shall be held by the Escrow Agent pursuant to the Escrow Agreement for a period
of one (1) year and one hundred eighty (180) days after the Closing Date;
provided, however, that on the first anniversary of the Closing Date the Escrow
Fund shall be reduced to an amount equal to the lesser of the balance of the
Escrow Fund on such first anniversary or 75% (if the Escrow Fund is originally
funded with Shares, as measured by Shares) of the original Escrow Fund except
to the extent any claims in excess of such reduced amount have been asserted
prior to such first anniversary. The Escrow Agreement shall set forth the
procedures for Buyer to make any claims against the Escrow Fund, the
circumstances under which such Escrow Fund shall be distributed either to Buyer
or to Seller and procedures for the Seller to substitute cash in lieu of stock.
Nothing contained in this Section 7.02(d) or in the Escrow Agreement shall
limit in any way Seller's indemnification obligations under this Agreement or
the indemnification obligations of Seller or its Affiliates, as applicable,
under the Concurrent Agreements; it being understood that if the Escrow Fund is
not sufficient to satisfy such indemnification obligations, Seller and its
Affiliates, as applicable, shall (subject to Section 7.02(b) hereof), remain
liable for such indemnification obligations as set forth in this Agreement or
in the Concurrent Agreements.
7.03 Buyer's Indemnity.
(a) During the Indemnification Period (or thereafter
solely with respect to any claim for indemnification for which notice has been
given prior to expiration of the Indemnification Period), in addition to any
other indemnification provided for under this Agreement, from and after the
Closing, Buyer shall indemnify and hold harmless Seller and its respective
Affiliates from and against any and all Losses (as defined in Section 7.02,
except that reasonable fees and disbursements of counsel, accountants and other
experts shall be included whether they relate to claims, actions or causes of
action asserted by Seller against Buyer or asserted by third parties) incurred
or suffered by Seller and its Affiliates and their respective officers,
directors, partners, employees, agents and representatives arising out of,
resulting from, or relating to:
(i) any breach of any of the representations or
warranties made by Buyer in this Agreement or in any agreement, certificate or
other instrument delivered by Buyer pursuant to this Agreement; and
(ii) any failure by Buyer to perform any of its
covenants or agreements contained in this Agreement or in any agreement,
certificate or other instrument delivered by Buyer pursuant to this Agreement.
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(b) Notwithstanding anything to the contrary contained in
this Section 7.03, neither Seller nor its Affiliates shall be entitled to seek
indemnification under this Section 7.03 for any Losses unless the aggregate
amount of Seller's and its Affiliates' Losses in respect of all such matters,
when aggregated with the aggregate amount of Seller's or its Affiliates' Losses
(as such terms are defined in the Concurrent Agreements) arising under the
Concurrent Agreements (as more particularly set forth in Article 7 of the
Concurrent Agreements), exceeds $375,000 in which event Seller and its
Affiliates shall be entitled to seek indemnification under this Section 7.03
for the amount of such Losses in excess of $375,000; provided, however, that
the foregoing limitation with respect to Seller's right to indemnification
shall not be applicable to Losses arising from or relating to (and Seller shall
be entitled to indemnification for all such Losses commencing with the first
dollar of such Losses) any breach of the representation and warranty set forth
in the first sentence of Section 5.02(b) hereof.
7.04 Procedure.
(a) In the event that any party hereto shall sustain or
incur any Losses in respect of which indemnification may be sought by such
party pursuant to this Article 7, the party seeking such indemnification (the
"Indemnitee") shall assert a claim for indemnification by giving prompt (in the
event of claims arising by reason of the commencement of litigation against an
Indemnitee by third parties, in no event later than ten (10) days after service
of process, which process expressly indicates a claim for which Indemnitor (as
hereinafter defined) may be liable) written notice thereof (the "Notice"),
which shall describe in reasonable detail the facts and circumstances upon
which the asserted claim for indemnification is based, to the party providing
indemnification (the "Indemnitor") and shall thereafter keep the Indemnitor
reasonably informed with respect thereto; provided that failure of the
Indemnitee to give the Indemnitor prompt notice as provided herein shall not
relieve the Indemnitor of any of its obligations hereunder, except to the
extent that the Indemnitor is materially prejudiced by such failure. In case
any third party claim, action or proceeding (a "Claim") is brought against any
Indemnitee, the Indemnitor shall have the right to assume, conduct and control
the defense, compromise or settlement thereof, by written notice to the
Indemnitee of its intention to do so within thirty (30) days after receipt of
the Notice, with counsel reasonably satisfactory to the Indemnitee, at the
Indemnitor's own expense, and thereupon to prosecute in the name and on behalf
of the Indemnitee any available cross-claims, counter-claims or third-party
claims arising with respect to the Claim. If the Indemnitor shall assume the
defense of such Claim, it shall not settle such Claim unless such settlement
includes as an unconditional term thereof the giving by the claimant or the
plaintiff of a release of the Indemnitee, reasonably satisfactory to the
Indemnitee, from all liability with respect to such Claim. As long as the
Indemnitor is contesting any such Claim in good faith and on a timely basis,
the Indemnitee shall not pay or settle any such Claim. Notwithstanding the
assumption by the Indemnitor of the defense of any Claim as provided in this
Section 7.04 and without limiting the Indemnitor's right to assume, conduct and
control the defense, compromise or settlement thereof, the Indemnitee shall be
permitted to join in the defense of such Claim and to employ counsel at its own
expense.
(b) If the Indemnitor shall fail to notify the Indemnitee
of its desire to assume the defense of any such Claim within the prescribed
30-day period set forth in Section 7.04(a), or shall notify the Indemnitee that
it will not assume the defense of any such Claim, then the
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Indemnitee may assume the defense of any such Claim, in which event it may do
so in such manner as it may deem appropriate, and the Indemnitor shall be bound
by any determinations made in any litigation with respect to such Claim or any
settlement thereof effected by the Indemnitee, provided that any such
determinations or settlement shall not affect the right of the Indemnitor to
dispute the Indemnitee's claim for indemnification. The failure of the
Indemnitor to assume the defense of any Claim shall not be deemed a concession
by Indemnitor that it is required to indemnify the Indemnitee for the subject
matter of such Claim.
(c) Amounts payable by the Indemnitor to the Indemnitee
in respect of any Losses for which any party is entitled to indemnification
hereunder shall be payable by the Indemnitor as incurred by the Indemnitee.
Any payments by any Indemnitor in indemnification hereunder shall be treated as
adjustments to the Purchase Price.
7.05 Indemnification Payments in Cash. All payments by Seller to
Buyer or its Affiliates in respect of any indemnification obligation to Buyer
or its Affiliates shall be made by Seller in cash or at Seller's option, if the
Escrow Fund contains shares of Class A Common Stock, by the delivery to Buyer
or its Affiliates of shares of its Class A Common Stock from the Escrow Fund
(valuing such shares so delivered at the average closing price on NASDAQ of
such shares for the six (6) Business Days immediately preceding the date of the
delivery of such shares).
7.06 Investigations; Waivers. The survival periods and rights to
indemnification provided for in this Article 7 shall remain in effect
notwithstanding any investigation at any time by or on behalf of any party
hereto or any waiver by any party hereto of any condition to such party's
obligations to consummate the transactions contemplated hereby.
7.07 Indemnity Sole Remedy. In the absence of fraud or of a suit
seeking specific performance as contemplated by this Agreement, the remedies
provided to Seller and to Buyer by the foregoing provisions of this Article 7
shall after the Closing Date be in lieu of any other remedies to which the
respective party is entitled at law or in equity for any breach or
noncompliance by a party with the provisions of this Agreement.
ARTICLE 8
MISCELLANEOUS
8.01 Expenses. Each party shall bear its own expenses incident to
the negotiation, preparation, authorization and consummation of this Agreement
and the transactions contemplated hereby, including all fees and expenses of
its counsel and accountants, whether or not such transactions are consummated.
8.02 Equitable Remedies. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with the specific terms of the provisions or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in
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equity. Each party agrees that it will not assert, as a defense against a
claim for specific performance, that the party seeking specific performance has
an adequate remedy at law.
8.03 Notices. All notices, claims and other communications hereunder
shall be in writing and shall be made by hand delivery, registered or certified
mail (postage prepaid, return receipt requested), facsimile, or overnight air
courier guaranteeing next day delivery (a) if to Buyer, to it at Western
Wireless Corporation, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. (Fax No. ▇▇▇-▇▇▇-▇▇▇▇), with a copy (which
shall not constitute notice) to ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Constant & ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(Fax No. ▇▇▇-▇▇▇-▇▇▇▇) or (b) if to Seller , to it at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇ (Fax No. ▇▇▇-▇▇▇-▇▇▇▇),
with a copy (which shall not constitute notice) to ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Esq. (Fax No. ▇▇▇-▇▇▇-▇▇▇▇), or at such other address as any party may from
time to time furnish to the other parties by a notice given in accordance with
the provisions of this Section 8.03. All such notices and communications shall
be deemed to have been duly given at the time delivered by hand, if personally
delivered; five (5) Business Days after being deposited in the mail, first
class postage prepaid, return receipt requested, if mailed; when receipt
confirmed, if sent by facsimile; and the next Business Day after timely
delivery to the courier, if sent by an overnight air courier service
guaranteeing next day delivery.
8.04 Entire Agreement. This Agreement, together with the Exhibits
annexed hereto, contains the entire understanding among the parties hereto
concerning the subject matter hereof and may not be changed, modified, altered
or terminated except by an agreement in writing executed by the parties hereto.
Any waiver by any party of any of its rights under this Agreement or of any
breach of this Agreement shall not constitute a waiver of any other rights or
of any other or future breach.
8.05 Remedies Cumulative. Except as otherwise provided herein, each
and all of the rights and remedies in this Agreement provided, and each and all
of the rights and remedies allowed at law and in equity in like case, shall be
cumulative, and the exercise of one right or remedy shall not be exclusive of
the right to exercise or resort to any and all other rights or remedies
provided in this Agreement or at law or in equity.
8.06 Governing Law. This Agreement shall be construed in accordance
with and subject to the laws and decisions of the State of Washington
applicable to Contracts made and to be performed entirely therein.
8.07 Counterparts. This Agreement may be executed in several
counterparts hereof, and by the different parties hereto on separate
counterparts hereof, each of which shall be an original; but such counterparts
shall together constitute one and the same instrument.
8.08 Waivers. No provision in this Agreement shall be deemed waived
by course of conduct, including the act of Closing, unless such waiver is in
writing signed by the parties and stating specifically that it was intended to
modify this Agreement.
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8.09 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and to their respective
successors and assigns. Seller shall not have the right to assign this
Agreement or any of its rights or obligations hereunder to any Person;
provided, however, that Buyer shall have the right to assign this Agreement and
its rights and obligations hereunder in accordance with Section 1.02 hereof.
8.10 Further Assurances. Buyer shall, at the request of Seller, and
Seller shall, at the request of Buyer, from time to time, execute and deliver
such other assignments, transfers, conveyances and other instruments and
documents and do and perform such other acts and things as may be reasonably
necessary or desirable for effecting complete consummation of this Agreement
and the transactions herein contemplated.
8.11 Disclosures.
(a) Each of Buyer and Seller acknowledges and confirms in
connection with the negotiation of this Agreement and the execution hereof,
during the period from the date hereof through the Closing Date, the parties
hereto will have furnished to one another certain materials, information, data
and other documentation ("Disclosures") concerning their business, financial
condition and operations which are proprietary and confidential. Each party
acknowledges the party disclosing such Disclosures considers them secret and
confidential and asserts a proprietary interest therein. Accordingly, each of
Buyer and Seller covenants and agrees that it shall maintain all Disclosures
made by another party in strict confidence and shall not use such Disclosures
for its own benefit or disclose them to third parties, except to its agents,
representatives, bankers, investment bankers, counsel and employees involved in
evaluating the transactions contemplated by this Agreement, or as otherwise
required by law (including the requirement of Buyer to disclose such terms
under any federal or state securities laws); provided, however, that in no
event shall Seller be permitted to disclose the Purchase Price or any
information concerning the calculation of the Purchase Price to any other
Person (including its employees) unless and until such time as such information
otherwise becomes public.
(b) No public announcement by any party hereto with
regard to the transactions contemplated hereby or the material terms hereof
(including the Purchase Price) shall be issued by any party without the mutual
prior consent of the other parties, except in the event the parties are unable
to agree on a press release and legal counsel for one party is of the opinion
that such press release is required by law and such party furnishes the other
parties a written opinion of outside legal counsel, or other counsel reasonably
acceptable to the party being furnished such opinion, to that effect, then such
party may issue the legally required press release.
(c) This Agreement shall not restrict any party hereto
from using information already known to it, to which it is entitled under
existing agreements, or information generally in the public domain or any
information coming into its possession after it becomes public knowledge unless
it became public knowledge through a breach of this Agreement.
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8.12. Termination.
(a) This Agreement may be terminated and the transactions
contemplated hereby may be abandoned, without further obligation of either
Seller or Buyer, at any time prior to the Closing Date as follows:
(i) by mutual written consent duly authorized by
the boards of directors of each of Seller and Buyer; or
(ii) by Seller or by Buyer if the Closing shall
not have occurred on or before the first anniversary of the date hereof, or
such later date, if any, as Seller and Buyer shall agree in writing; provided,
that the party exercising such right is not in default of its obligations under
this Agreement in a manner which results in the failure to satisfy the
conditions to Closing of the other parties; or
(iii) by Seller or by Buyer if the consummation of
the transactions contemplated hereby shall be prohibited by a final,
non-appealable order, decree or injunction of a court of competent jurisdiction
or of the FCC.
(b) In the event of a termination of this Agreement, no
party hereto shall have any liability or further obligation to any other party
to this Agreement except that nothing herein will relieve any party from
liability for any breach of this Agreement.
8.13 Definitions; Etc.
Unless the context otherwise requires, the terms defined in any
Section of this Agreement shall have the meanings therein specified for all
purposes of this Agreement, applicable to both the singular and plural forms of
any of the terms defined herein. When a reference is made in this Agreement to
a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words "include", "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation". The use of a gender herein shall be deemed to include the
neuter, masculine and feminine genders wherever necessary or appropriate.
Whenever the word "herein" or "hereof" is used in this Agreement, it shall be
deemed to refer to the Agreement and not to a particular Section of the
Agreement unless expressly stated otherwise.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
WESTERN WIRELESS CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Chief Executive Officer
TRIAD CELLULAR CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: President