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EXHIBIT 10.90
ASSET PURCHASE AGREEMENT
Arkansas-11 Rural Service Area
This Asset Purchase Agreement (this "Agreement") is entered into on August
25, 1999 by and among NetWireless, LLC, an Arkansas limited liability company
("Seller"), GCC Licenses LLC., a Delaware limited liability company
("Purchaser"), and Western Wireless Corporation, a Delaware corporation, as
"Guarantor." Purchaser and Seller are sometimes referred to herein collectively
as the "Parties" and each as a "Party."
RECITALS
WHEREAS, Seller is the holder of the non-wireline cellular radio telephone
license granted by the Federal Communications Commission (the "FCC") and certain
assets necessary for the operation of the non-wireline cellular radio telephone
system in the Arkansas-11 Rural Service Area (the "System");
WHEREAS, Purchaser desires to purchase the cellular radio telephone
system, including the licenses necessary to operate such system, in the
Arkansas-11 Rural Service Area;
WHEREAS, the Parties desire that Purchaser acquire from Seller all of the
assets of the System including, among other things, all of the authorizations
issued by the FCC for the operation of the System, all in accordance with the
terms and conditions set forth in this Agreement; and
WHEREAS, the Parties have determined that it would further the development
of competitive cellular radio telephone systems in the United States to
consummate the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
As used herein, the terms below shall have the following meanings:
"Action" shall have the meaning set forth in Section 5.11.
"Affiliate" of a Person shall mean any Person which directly or
indirectly, through one or more intermediaries, owns, controls, or is controlled
by, or is under common control with, such Person. The term "control" (including,
with correlative meaning, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any Person, shall
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mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Applicable Laws" shall mean all federal, state and local statutes,
ordinances, rules, and regulations of any Governmental Authority that govern,
regulate or otherwise apply to the Assets, the Business or operation of the
System.
"Assets" shall mean all assets, properties and rights, both tangible and
intangible, that are owned by, leased or licensed to, Seller for use in the
System, and are otherwise necessary for the operation of the Business in a
manner consistent with the present operations and with past practices of the
System, including, without limitation, the Real Property, Equipment,
Authorizations, Contracts, Subscriber Agreements, Intellectual Property and
Books and Records; provided, however, that the Assets shall not include the
Excluded Assets.
"Assignment Applications" shall mean that joint application filed with the
FCC relating to the assignment of the FCC Authorizations to Purchaser in the
manner contemplated by this Agreement.
"Assumed Liabilities" shall have the meaning set forth in Section 3.2
hereof.
"Auditor" shall have the meaning set forth in Section 2.3.4 hereof.
"Authorizations" shall mean the approvals, consents, authorizations,
permits and licenses issued to Seller by any Governmental Authority relating to
the System.
"Books and Records" shall mean all the books and records related to the
Assets, the Business and the System, including without limitation, (a) books and
records relating to the purchase of materials and supplies, invoices, Subscriber
lists, supplier lists, personnel records, and Subscriber information, and (b)
computer software (to the extent such software is included in the Assets) and
data in computer readable and/or human readable form used to maintain such books
and records together with the media on which such software and data are stored
and all documentation relating thereto, but shall not include books and records
relating to the Excluded Assets or Seller's limited liability company books and
records or stock ledgers.
"Business" shall mean all of the business and operations relating to the
System as currently conducted by Seller.
"CERCLA" shall have the meaning set forth in the Section defining
Environmental Laws.
"Closing Date" shall mean the next business day that is ten or more days
after the date on which the FCC Consent becomes a Final Order; provided that if
such date is within five days of the end of a calendar month, the Closing Date
shall be the last business day of that calendar month.
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"Closing Place" shall mean such location agreed upon by the Parties or, in
the absence of such an agreement, the offices of Xxxxxx Xxxxxxxx, P.S., 000
Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000-0000.
"Closing" shall mean the consummation of the assignment, transfer,
conveyance and delivery of the Assets and the Purchase Price as contemplated
hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Consents" shall mean any and all consents, approvals, authorizations or
waivers of any Governmental Authority, including, without limitation, the FCC
Consent, and any and all consents, approvals or waivers from parties to
Contracts that are (i) required for the consummation of the transactions
contemplated by this Agreement or (ii) necessary in order that Purchaser (or its
designee) can conduct the Business after the Closing Date substantially in the
same manner as before the Closing Date.
"Contracts" shall mean all leases, contracts, commitments, and other
binding agreements relating to the System to which Seller is a party and which
are set forth on SCHEDULE 5.7, whether written or oral.
"DOJ" shall mean the United States Department of Justice.
"Employees" shall mean all persons employed on a full or part-time basis
together with all persons retained as "independent contractors" who are the
functional equivalent of employees.
"Environmental Laws" shall mean Applicable Laws relating to pollution,
the environment or the Handling of Regulated Substances, including without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA").
"Equipment" shall mean all of the furniture, fixtures, furnishings,
machinery, computer hardware, antennas, transmitters, and other personal
property used in connection with the Business and the System.
"ERISA" shall have the meaning set forth in Section 5.9 hereof.
"Escrow Agreement" shall have the meaning set forth in Section 11.2.2
hereof.
"Escrow Amount" shall have the meaning set forth in Section 2.2 hereof.
"Excluded Assets" shall mean those assets set forth on SCHEDULE 1 hereto.
"FCC" shall mean the Federal Communications Commission.
"FCC Authorization" shall mean the Authorizations from the FCC relating to
the operation of the System.
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"FCC Consent" shall mean the action of the FCC granting its consent to the
assignment of the FCC Authorization from Seller to Purchaser.
"FTC" shall mean the Federal Trade Commission.
"Final Order" shall mean a Preliminary Order which is not reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no timely request for stay, motion or petition for reconsideration or rehearing,
application or request for review, or notice of appeal or other judicial
petition for review is pending, and as to which the time for filing any such
request, motion, petition, application, appeal, or notice, and for the entry of
an order staying, reconsidering, or reviewing on the FCC's or other regulatory
authorities' own motion, has expired. If a Preliminary Order is subject to
conditions which may have a material adverse effect on a party, such party must
either timely file a petition for reconsideration with respect to such
conditions or accept such conditions. If such party timely files a petition for
reconsideration with respect to such conditions, the Preliminary Order shall not
become or be deemed a Final Order unless and until such conditions are removed
from the Preliminary Order or the party affected thereby has notified the other
Party in writing of its willingness to accept such conditions.
"Final Settlement" shall have the meaning set forth in Section 2.3.3
hereof.
"Financial Statements" shall have the meaning set forth in Section 5.10
hereof.
"Governmental Authority" shall mean any court or any federal, state,
county, or local governmental, legislative or regulatory body, agency,
department, authority, instrumentality or other subdivision thereof, including,
without limitation, the FCC and the PUC.
"Handling" shall mean the production, use, generation, storage, treatment,
recycling, disposal, discharge, release, or other handling or disposition at any
time on or prior to the Closing Date of any Regulated Substance either in, on,
or under any Operating Site.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Intellectual Property" shall mean all patents, trademarks, service marks,
trade names, copyrights, licenses, formulas, computer software, advertising
slogans, know-how, data and other intellectual property rights or intangible
property rights of Seller which are used or intended for use in connection with
the System.
"Inventory" shall mean all usable and non-obsolete merchandise owned and
intended for resale in connection with the Business, whether or not located on
the premises, on consignment to a third party, or in transit or storage.
"Liabilities" shall mean liabilities, obligations or commitments of any
nature, absolute, accrued, contingent or otherwise, known or unknown, whether
matured or unmatured.
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"Lien" shall mean any contract for sale (except for the sale of cellular
telephone service and rentals of cellular telephone equipment to Subscribers),
claim, lien, pledge, option, charge, covenant, restriction, encroachment,
easement, security interest, mortgage, deed of trust, right-of-way, encumbrance
or adverse interest of any kind or character of any other Person.
"Losses" shall have the meaning set forth in Section 11.2.1 hereof.
"Operating Data Statements" shall have the meaning set forth in Section
5.10 hereof.
"Operating Site" shall mean any real property or facility owned, leased or
used at any time by Seller in connection with the System.
"Person" shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, any unincorporated organization, or
a government or a political subdivision thereof.
"Preliminary Order" shall mean an action by the FCC and any other
applicable state regulatory authority consenting to or authorizing the
assignment of the FCC Authorization to Purchaser (or its designee), which action
has not yet become a Final Order.
"PUC" shall mean the Arkansas Public Utilities Commission.
"Purchase Price" shall have the meaning set forth in Section 2.2 hereof.
"Purchaser's Closing Certificate" shall have the meaning set forth in
Section 7.1 hereof.
"Real Property" shall mean all real property owned or leased by or used,
or intended by Seller for use, in connection with the System, together with all
buildings, improvements, fixtures, easements, licenses, options, insurance
proceeds and condemnation awards and all other rights of Seller in or
appurtenant thereto, but does not include the property listed on SCHEDULE 1.
"Regulated Substance" shall mean (i) any "hazardous substance" as defined
in CERCLA, (ii) any petroleum or petroleum substance, and (iii) any other
pollutant, waste, contaminant, or other substance regulated under Environmental
Laws.
"Representative" shall mean any officer, director, principal, attorney,
agent, employee or other representative of any Person.
"Seller's Closing Certificate" shall have the meaning set forth in Section
8.1 hereof.
"Service" shall mean the provision of the System's cellular telephone
service to Subscribers.
"Subscribers" shall mean customers of Seller that subscribe to the
Service.
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"Subscriber Agreements" shall mean Contracts whereby Seller has agreed to
provide Service.
"Survival Period" shall have the meaning set forth in Section 11.1
hereof.
"Taxes" shall mean all taxes, charges, fees, levies or other assessments
or charges of any kind whatsoever, including without limitation, income, excise,
use, transfer, payroll, occupancy, property, sales, franchise, unemployment and
withholding taxes, imposed by any Governmental Authority, and any assessments
against Real Property together with any interest, penalties or additional taxes
attributable to such taxes and other assessments.
"Texas-7 APA" means that Asset Purchase Agreement entered into between
Purchaser and KO Communications, Inc., as Seller, under which Purchaser has
agreed to purchase, and KO Communications, Inc., has agreed to sell, certain of
the assets of the non-wireline cellular telephone system owned by KO
Communications, Inc., and operating in the Texas-7 rural service area.
"To the knowledge" or "knowledge" of a Party (or similar phrases) shall
mean (i) with respect to Seller, to the extent of matters which are actually
known by any of the officers, directors or employees of Seller or which, based
on facts of which such parties are aware, would be known to a reasonable Person
in similar circumstances and (ii) with respect to Purchaser, to the extent of
matters which are actually known by any of the officers, directors or employees
of Purchaser, or which, based on facts of which such parties are aware, would be
known to a reasonable Person in similar circumstances.
ARTICLE 2.
PURCHASE OF ASSETS
2.1. Transfer of Assets. Subject to the terms and upon satisfaction of
the conditions contained in this Agreement, at the Closing, Seller shall sell,
convey, transfer, assign and deliver to Purchaser (or its designee), and
Purchaser (or its designee) will accept and acquire, the Assets.
2.2. Purchase Price. The purchase price for the Assets shall be Twenty
Million Dollars ($20,000,000), subject to adjustment pursuant to this Article
(the "Purchase Price"), which shall be paid by Purchaser to Seller (or its
designee) on the Closing Date as follows: (a) One Million Dollars ($1,000,000)
of such Purchase Price (the "Escrow Amount") shall be delivered to the Escrow
Agent as defined in Section 11.2.2 and held pursuant to the terms of Section
11.2.2; and (b) the balance of such Purchase Price shall be paid by Purchaser to
Seller by wire transfer of immediately available funds.
2.3. Other Adjustments and Prorations.
2.3.1. The Purchase Price shall be adjusted in accordance with
the following:
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(a) The Purchase Price shall be increased by an amount equal
to any cash, adjusted accounts receivable, Inventory (valued at book value),
prepaid expenses and any other current assets transferred to Purchaser. For the
purposes of this Section the "adjusted accounts receivable" shall equal the sum
of the following:
(i) 90% of the accounts receivable from carriers (not
including any clearinghouse receivables) and resellers, and of receivables from
Subscribers which remain unpaid by Subscribers for less than thirty-one (31)
days from the date such receivable first comes due ("Outstanding"); plus
(ii) 70% of the amount of all Subscriber accounts receivable
that are Outstanding for more than thirty (30) days but less than sixty-one (61)
days; plus
(iii) 50% of the amount of all Subscriber accounts receivable
that are Outstanding for more than sixty (60) days, but less than ninety-one
(91) days; and
(iv) There shall be no adjustment (i.e. 0%) for the amount
of any Subscriber accounts receivable that are Outstanding more than ninety (90)
days.
(b) The Purchase Price shall be decreased by an amount equal
to (x) amounts collected by Seller from Subscribers on or prior to the Closing
Date (net of liabilities associated with deferred access revenue included in
such amounts), which relate to Services to be provided after the Closing Date
(hereinafter referred to as "Advance Receipts"), and (y) liabilities associated
with deferred access revenue assumed by Purchaser.
2.3.2. Except as otherwise specifically provided for herein, all
revenues and all expenses arising from the Business and ownership of the Assets,
including resale charges and other expenses payable in respect to Service,
utility charges, Taxes levied against the Assets, property and equipment
rentals, sales and service charges, Taxes (except for Taxes arising from the
transfer of the Assets ), and similar prepaid and deferred items, shall be
prorated between Seller and Purchaser in accordance with the principle that
Seller shall receive the benefit of all revenues, and be responsible for all
expenses, costs, obligations and Liabilities allocable to the Business and the
ownership of the Assets for the period on and prior to the Closing Date, and
Purchaser shall receive the benefit of all revenues, and be responsible for all
expenses, costs, obligations and Liabilities allocable to the Business and the
ownership of the Assets after the Closing Date.
2.3.3. A final settlement (the "Final Settlement") of all
adjustments or prorations made under this Section, with payment being made by
the appropriate Party in cash (but without any interest thereon), shall occur no
later than one hundred twenty (120) days after the Closing Date.
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2.3.4. In the event that the Parties cannot agree on the amount
of the Final Settlement, the determination shall be made by a mutually agreed
upon national accounting firm selected jointly by Purchaser and Seller that has
not, during the prior three (3) years, been employed by any of the Parties (the
"Auditor"). The Auditor shall make its determination of the Final Settlement
based on the express provisions of this Agreement; provided, however, that if
the Auditor finds that the express terms of this Agreement are not sufficient to
resolve any issue or issues, the Auditor shall rely upon generally accepted
accounting principles then in effect. Any Party may invoke the use of the
Auditor by notifying the other Party in writing, provided that a Party may not
invoke the use of the Auditor to determine the Final Settlement earlier than one
hundred eighty (180) days after the Closing Date. The Auditor shall be required
to render a decision within twenty-one (21) days after the Auditor is requested
to render a determination under this Section. The decision of the Auditor shall
be binding on the Parties and not subject to any judicial challenge by the
Parties. Within five (5) business days after the Auditor provides the
determination to the Parties, the payment of the Final Settlement shall be made
in accordance with that determination. The expenses of the Auditor shall be paid
by Seller and Purchaser in reverse proportion to the Auditor's determination
with respect to the allocation to Seller and Purchaser of the amount in
disagreement. For example, if the amount in disagreement is One Hundred Thousand
Dollars ($100,000) and the Auditor determines that the Seller should receive
Seventy Thousand Dollars ($70,000) and the Purchaser should receive Thirty
Thousand Dollars ($30,000), then Seller shall pay thirty percent (30%) of the
Auditor's expenses, and Purchaser shall pay seventy percent (70%).
ARTICLE 3.
ASSUMED OBLIGATIONS
3.1. No Assumption of Liabilities by Purchaser, Exceptions. Except as
set forth in Section 3.2 below, Purchaser expressly does not, and shall not,
assume or be deemed to have assumed under this Agreement or by reason of any
transactions contemplated hereunder, any Liabilities of any nature whatsoever
relating to the System or of Seller, or any of Seller's stockholders or
partners, as the case may be.
3.2. Assumed Liabilities. At the Closing, Purchaser shall assume and
shall timely pay, perform, fulfill and discharge all of Seller's liabilities and
obligations due after the Closing Date on those Contracts and Liabilities set
forth on SCHEDULE 3.2 (the "Assumed Liabilities").
ARTICLE 4.
COVENANTS AND AGREEMENTS
4.1. Covenants of Seller. Seller covenants and agrees that from the
time of the execution and delivery of this Agreement until (and including) the
Closing Date:
4.1.1. Consummate Transactions. Seller shall use its best efforts
to cause the transactions contemplated by this Agreement to be consummated in
accordance with the terms
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hereof, and, without limiting the generality of the foregoing, use best efforts
to obtain all necessary approvals, consents, permits, licenses and other
authorizations required in connection with this Agreement and the transactions
contemplated hereby from Governmental Authorities, 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.
4.1.2. Full Access and Purchaser Due Diligence. Seller shall
allow Purchaser and its agents and representatives (including, without
limitation, its independent auditors and attorneys) reasonable access during
normal business hours to all of Seller's personnel, premises, properties,
assets, financial statements and records, books, contracts, documents and
commitments of or relating to the Business, and shall furnish Purchaser and its
agents and representatives with all such information concerning the affairs of
the System as Purchaser may reasonably request.
4.1.3. Ordinary Course. Seller shall cause the Business and
affairs of the System to be conducted only in the ordinary course and consistent
with past practices. Without limiting the foregoing, Seller shall continue to
pay its bills and other obligations, all in the ordinary course of business
consistent with past practices, but shall not, without the prior written consent
of Purchaser, perform or do any of the following if the same would have a
material adverse effect on the Business, the System or the Assets: (a) incur any
material Liability other than obligations to Seller's brokers, attorneys and
accountants, all of which shall be paid by Seller; (b) assume, guarantee, change
any existing guarantee, endorse, act as an accommodation party, or otherwise
become responsible for, the obligations of any other Person; (c) make any loans
or advances to any Person; (d) sell, transfer, convey, mortgage, pledge,
hypothecate or place any Liens on any of the Assets; (e) waive or compromise any
right or claim for any amount; (f) cancel any note, loan or other material
obligation owing to Seller; (g) enter into any Contract with any Person,
including, without limitation, the stockholders of Seller or any of its
Affiliates, consultants, agents or assigns; (h) except as otherwise provided in
this Agreement, increase or modify compensation of any type currently paid to
any of its employees, officers, directors, agents or consultants; (i) make any
new arrangement for any profit-sharing plan, retirement plan, bonus plan,
severance arrangement, employee benefit plan, or any similar plan except for
modifications of existing plans that are required by law, or contemplated to be
implemented at the time of the execution of this Agreement; (j) except as
required by law, enter into any collective bargaining agreement, or make any
commitment whatsoever to any union or other representative or party which
intends to represent any of Seller's employees subsequent to the Closing; (k)
except as permitted under Section 5.9 hereof, hire any employees; (l) except as
required by law, enter into any additional reseller agreements; or (m) enter
into any Contract involving payments, assets, or liabilities with a value
greater than $25,000 individually or $100,000 in the aggregate, excluding
noncapital expenditures incurred in the ordinary course of business consistent
with past practices. Notwithstanding the foregoing, nothing in this Section
shall prevent Seller from taking appropriate action as may be necessary to
maintain its ability to control and manage the System and to comply with the
rules, regulations or directives of any Governmental Authority.
4.1.4. Retention of Records. On the Closing Date, Seller shall
deliver to Purchaser all of the Books and Records relating to the System and the
Business. In addition, for a period of three (3) years after the Closing Date,
Seller shall retain and make available to Purchaser
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copies of any documents not theretofore delivered to Purchaser relating to
System, the Business or the Assets.
4.1.5. No Amendments or Issuance of Additional Shares. Seller
shall not amend its charter, by-laws, or comparable governing instrument, which
amendment would have a material adverse effect on the Assets, the Business 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, 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 have a material adverse effect on the
transactions contemplated by this Agreement.
4.1.6. No Termination or Settlement. Without the prior written
consent of Purchaser, 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 Purchaser to have any continuing
obligation after the Closing with respect thereto.
4.1.7. Preserve Business and Goodwill. Seller shall use its
diligent efforts to keep the System intact, to preserve and maintain the Assets,
to preserve the Business and to preserve the goodwill of suppliers, Subscribers
and others dealing with Seller.
4.1.8. Compliance with Law. Seller shall comply in all material
respects with Applicable Laws relating to the System, the Business and the
Assets.
4.1.9. Approvals; Consents. Seller shall obtain and maintain in
full force and effect, and shall not take any action which might have a material
adverse effect on, any Authorizations that are required for the operation of the
Business as presently conducted, except where such Authorizations are
administrative in nature, and the failure to obtain or maintain such
Authorizations would not adversely impact the continued operation of any part of
the System or any component thereof, as currently operated. The Parties shall
consult with one another as to the approach to be taken with any Governmental
Authority with respect to obtaining any Authorization 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. Seller shall not make any material commitments with
respect to any Authorizations that would have a material adverse effect on the
Business, the System or the Assets without Purchaser's prior written consent.
4.1.10. Insurance. From the date hereof through the Closing Date,
Seller shall maintain in full force and effect (including necessary renewals
thereof), all of the insurance
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policies that Seller currently maintains relating to System, or other
functionally equivalent policies. The policies currently maintained by Seller
are set forth on SCHEDULE 4.1.10. From and after the Closing Date, Seller shall
take all actions that may be necessary to cause the coverage under such policies
to continue in full force and effect after the Closing Date with respect to
liability occurrences prior to the Closing Date and shall take all actions
necessary to preserve or protect rights under any such policies with respect to
any claim against Seller arising out of the Assets or Business of Seller prior
to the Closing Date. Seller will provide Purchaser with information and records
regarding all claims pending with respect to the Assets or Business of Seller
and agrees to provide to Purchaser any additional information and records
Purchaser may reasonably require regarding such claims.
4.1.11. Books and Records. Seller shall continue to maintain the
Books and Records in the manner and on a basis consistent with prior years.
4.1.12. Notice of Claims. Seller shall give written notice to
Purchaser promptly upon the commencement of any action, investigation,
arbitration or proceeding (including any proceeding before any Governmental
Authority), or promptly upon obtaining knowledge of any facts giving rise to a
threat of any such action, investigation, arbitration or proceeding which, if
adversely determined, would have a material adverse effect on (a) Seller's
ability to consummate the transactions contemplated hereby; (b) the Business; or
(c) the Assets.
4.1.13. 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 the Seller contained in this
Agreement, give notice in writing of such event or occurrence or impending or
threatened event or occurrence, to Purchaser and use its diligent efforts to
prevent or to promptly remedy such breach.
4.1.14. Notice of Change. Except for events occurring in the
communications industry generally, Seller shall use reasonable efforts to notify
Purchaser promptly in writing of any event, condition or state of facts, which
has had or would reasonably be expected to have a material adverse effect on the
System, the Business, the Assets, or on the transaction contemplated by this
Agreement.
4.1.15. Training / Transition Assistance.
(a) Before the Closing, and at the request of Purchaser,
Seller hereby agrees to use commercially reasonable efforts to instruct
Purchaser's employees and agents in the use of Seller's billing system. Such
instruction will be provided at Seller's premises at mutually convenient times
so as not to disrupt the operation of Seller's businesses and shall be provided
at no cost to Purchaser.
(b) The Parties agree to use diligent efforts and to direct
their respective employees, agents, and subcontractors to cooperate in the
conversion and transfer of the Subscribers to Purchaser's billing system so that
upon the Closing Date, or as soon thereafter as is reasonably practicable, all
of the System's customer billing information shall have been transferred
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and converted to Purchaser's billing system. The costs associated with
converting and transferring the information to Purchaser's billing system shall
be the sole responsibility of Purchaser. In the event Purchaser desires to
retain Seller's assistance in such matters after the Closing, the parties agree
to enter into an agreement having terms substantially the same as those
contained in the document attached as SCHEDULE 4.1.15(b).
4.1.16. Interim Financial Statements and Statistical Summaries.
Between the date of this Agreement and the Closing Date, Seller shall deliver to
Purchaser (i) as soon as practicable, but no later than forty-five (45) days
after the end of each calendar month, unaudited financial statements ("Interim
Financial Statements") for the most recent month and the interim period then
ended, and (ii) as soon as practicable, but no later than forty-five (45) days
after the end of each calendar month, interim operating data summaries (the
"Interim Operating Data Statements") for the most recent month and interim
period then ended, which summaries will be in scope and format substantially
identical to the Operating Data Statements.
4.1.17. Material Contracts. Seller shall not (a) 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 under, any material Contract, or (b) cause
or permit the termination, modification or amendment of any material Contract of
Seller.
4.1.18. Condition of Assets. Seller shall use diligent efforts to
preserve the Assets intact and, from time to time, make all necessary repairs
thereto, so that the Business may be conducted in the ordinary course consistent
with past practices.
4.2. Covenants of Purchaser. Purchaser covenants and agrees that from
the time of the execution and delivery of this Agreement until (and including)
the Closing Date:
4.2.1. Consummate Transaction. Purchaser 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, to assist Seller in obtaining all necessary
Consents of third parties, including, without limitation, the approval of this
Agreement and the transactions contemplated hereby as required by any
Governmental Authority, and to make all filings with and to give all notices to
third parties which may be necessary or reasonably required of Purchaser in
order to consummate the transactions contemplated hereby.
4.2.2. Purchaser Not to Control. Notwithstanding any provision of
this Agreement that may be construed to the contrary, pending the consummation
of the Closing, Seller shall maintain actual (de facto) and legal (de jure)
control over the System. Specifically, and without limitation, the
responsibility for the operation of the Business and the System shall, pending
the Closing Date, reside with the Board of Directors and management of Seller,
including, but not limited to, responsibility for the following matters: (a)
access to and the use of the facilities of and equipment owned by Seller; (b)
control of the daily operation of the System; (c) creation and implementation of
policy decisions; (d) employment and supervision of employees; (e) payment of
financing obligations and expenses incurred in the operation of the System; (f)
receipt and distribution of monies and profits derived from the operation of the
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System; and (g) execution and approval of all contracts and applications
prepared and filed before Governmental Authorities.
4.2.3. Notice of Breaches. Purchaser 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 the Purchaser contained
in this Agreement, give notice in writing of such event or occurrence or
impending or threatened event or occurrence, to Seller and use its diligent
efforts to prevent or to promptly remedy such breach.
4.2.4. Qualification to Hold Authorizations. Purchaser shall
remain an entity qualified to hold the Authorizations under the rules and
regulations of the FCC.
4.3. Mutual Covenants of Seller and Purchaser. Seller and Purchaser
have filed with the FCC, and, if necessary, will file with the PUC or any other
Governmental Authority, as soon as practicable following the date hereof, joint
applications requesting the approval of the assignment of the Authorizations to
Purchaser, and, if applicable, will file all necessary applications with the DOJ
and/or the FTC pursuant to the HSR Act. Seller and Purchaser agree to use their
best efforts to make all such filings as have not yet been made within ten (10)
business days of the execution of this Agreement. Seller and Purchaser 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. Purchaser shall the pay filing fees associated with the filings
required by this SECTION. Seller and Purchaser covenant and agree to undertake
all actions and file such material as shall be necessary or required in order to
obtain any necessary waivers or other authority in connection with the foregoing
applications.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby makes the following representations and warranties to
Purchaser, all of which have been relied upon by Purchaser in entering into this
Agreement and the truth and accuracy of which shall constitute a condition
precedent to the obligations of Purchaser hereunder:
5.1. Organization and Standing. Seller (a) is a limited liability
company duly organized, validly existing and in good standing under the laws of
the state of Arkansas, (b) has full power and authority to enter into and
perform this Agreement, to own and lease the Assets, and operate the System and
to carry on the Business as now being conducted and proposed to be conducted by
it, and (c) is duly qualified to do business and is in good standing as a
foreign entity in every jurisdiction in which the nature of the business
conducted by it requires such qualification, except where the failure to so
qualify would not have a material adverse effect on the System, the Business, or
the Assets.
5.2. Authorization and Binding Obligations. The execution, delivery
and performance of this Agreement by Seller has been duly and validly authorized
by all necessary action, including
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approval of the entire transaction by vote of its members. This Agreement has
been duly executed and delivered by Seller and constitutes a valid and binding
obligation of Seller enforceable against it in accordance with its terms, except
as its enforceability may be limited by bankruptcy, insolvency, moratorium or
other laws relating to or affecting creditors' rights generally and the exercise
of judicial discretion in accordance with general equitable principles.
5.3. No Contravention. Except as otherwise contemplated hereunder, the
execution, delivery and performance of this Agreement, the consummation of the
transactions contemplated hereby and the compliance with the provisions hereof
by Seller will not (a) violate any provisions of the organizational documents of
Seller (b) result in the breach of, or constitute a default under, or result in
the creation of any Lien upon any of the Assets, under the provisions of any
agreement or other instrument to which Seller is a party or by which any Asset
is bound or affected or (c) with respect to Seller, violate any Applicable Laws.
5.4. Title to Assets.
5.4.1. SCHEDULE 5.4.1 is a list of all tangible personal property
included in the Assets. Seller has good and marketable title to all the tangible
personal property to be transferred by it hereunder, free and clear of all
Liens, charges or any other encumbrances, except for and subject only to liens
for Taxes not yet due or payable ("Permitted Liens").
5.4.2. SCHEDULE 5.4.2 is a list of all the Real Property. Seller
has good and marketable title to all of the Real Property to be transferred by
it hereunder, free and clear of all Liens, and without reservation or exclusion
of any mineral, timber or other rights or interests, except for and subject only
to (a) Permitted Liens, (b) those matters set forth in SCHEDULE 5.4.2 including
the leases listed thereon (whether as lessor or lessee), none of which is
violated by existing structures or impairs Seller's use and none of which
materially impairs or pursuant to its terms would materially impair the present
operations of the System or the present use of such property, and (c) those
Liens set forth in SCHEDULE 5.4.2. The Liens set forth on SCHEDULE 5.4.2 will be
removed on or prior to the Closing Date.
5.4.3. The Assets include all assets (except the Excluded Assets)
which are used to conduct the Business and operations of the System as presently
conducted.
5.5. Condition of the Assets. All tangible Assets are in reasonable
operating condition and repair, ordinary wear and tear excepted, are reasonably
suitable for the uses and purposes for which they are being used, and are in
compliance with all Applicable Laws, except where failure of such compliance
would not have a material adverse effect on the Assets, the System, or the
Business, and Seller has no knowledge and has received no notice that it or the
present use of the Assets is in violation in any material respect of any
Applicable Laws.
5.6. Authorizations. The Authorizations listed on SCHEDULE 5.6 are all
of the Authorizations necessary to operate the System, the Business and the
Assets as they are now operated. The Authorizations are validly issued in the
name of Seller and are in full force and effect. Except as set forth on SCHEDULE
5.6, all material Authorizations are unimpaired by any acts or omissions of
Seller (or any of its Representatives) and the Authorizations are free and
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clear of any restrictions which might limit the full operation of the System.
All material ownership reports, employment reports, and other documents required
to be filed by Seller with the FCC with respect to the System have been filed or
the time period for such filing has not lapsed. All such reports and documents
since the date that Seller acquired the System are correct in all material
respects. The FCC actions granting the current FCC Authorization to operate the
System together with all underlying construction permits have not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and no timely request for
stay, motion or petition for reconsideration or rehearing, application or
request for review, or notice of appeal or other judicial petition for review is
pending. The time for filing any such request, motion, petition, application,
appeal, or notice, and for the entry of an order staying, reconsidering, or
reviewing on the FCC's or other regulatory authorities' own motion, has expired.
5.7. Contracts. SCHEDULE 5.7 is a list of all Contracts, other than
Subscriber Agreements and Contracts with Seller's Affiliates which will not
survive the Closing. Each such Contract is in full force and effect, paid
currently, and has not been materially impaired by any acts or omissions of
Seller or any of its Representatives. Except as set forth on SCHEDULE 5.7, no
Contract requires the consent of any other party to the transactions
contemplated by this Agreement. Seller is not (and, to the best of its
knowledge, no other party is) in material breach or violation of, or default
under any of the Contracts. Seller is not aware of any intent by any party to
any Contract to terminate or amend the terms thereof or to refuse to renew any
Contract upon expiration of its term.
5.8. Intellectual Property. SCHEDULE 5.8 is a list of all Intellectual
Property. Except as indicated on SCHEDULE 5.8, Seller has properly licensed and
has the right to use all of the Intellectual Property. No person has a right to
receive a royalty or similar payment in respect of any Intellectual Property
other than as indicated on SCHEDULE 5.8. Seller has no licenses granted by or to
it, or any other agreements to which it is a party, relating in whole or in part
to any of the Intellectual Property other than as indicated on SCHEDULE 5.8. To
Seller's knowledge, except as disclosed on SCHEDULE 5.8, Seller's use of the
Intellectual Property is not infringing upon or otherwise violating the rights
of any third party, and no proceedings have been instituted against or notices
received by Seller alleging that such use of its Intellectual Property infringes
upon or otherwise violates any rights of a third party.
5.9. Employees; Employment Obligations. Seller and/or the System
currently employs those persons in those positions and at those salaries
(including benefits) as are listed on SCHEDULE 5.9 Seller shall hire no further
employees without the prior written consent of Purchaser, provided that Seller
may, as the need arises, hire employees to replace existing employees without
the consent of Purchaser. Except as otherwise set forth on such SCHEDULE 5.9,
Seller and the System are not bound, and at no time have been bound, by any oral
or written collective bargaining agreement, severance, pension, retirement,
profit-sharing, 401(k), "employee benefit plan" (within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), or other employment agreement (other than any agreements terminable
on thirty (30) days' or less notice without penalty or severance obligation)
with any officer, employee or consultant, nor does Seller or the System have any
liability under any such agreement which was terminated previously. Seller has
complied in all material respects with all applicable laws, rules and
regulations which relate to prices, wages, hours, discrimination in
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employment and collective bargaining and is not liable for any arrears of wages
or any taxes or penalties for failure to comply with any of the foregoing. With
respect to each "employee benefit plan," if any, within the meaning of Section
3(3) of ERISA, which is now, or ever has been, maintained, contributed to, or
required to be contributed to by Seller, such employee benefit plan has been
established and maintained in all material respects in accordance with its terms
and in material compliance with all applicable laws, statutes, orders, rules and
regulations, including but not limited to ERISA. Seller is not a party to, and
is not affected by or threatened with, any dispute or controversy with a union
or with respect to unionization or collective bargaining involving the Employees
of Seller or the System.
5.10. Financial Statements. Attached hereto as SCHEDULE 5.10 are the
unaudited financial statements of Seller for the periods indicated on such
Schedule (the "Financial Statements"). SCHEDULE 5.10 also lists key statistical
summary information and other documents which set forth the subscriber history
for the last three years, and local and roaming minutes of use data of the
System for a designated calendar months (the "Operating Data Statements"). A
sample Operating Data Statement is attached hereto as SCHEDULE 5.10. All
Financial Statements are true and correct in all material respects, have been
prepared from the Books and Records and fairly represent the financial position
of Seller in a manner consistent with the prior periods prepared in accordance
with generally accepted accounting principles. To Seller's knowledge, Seller has
not incurred nor is it subject to any Liabilities, whether accrued or absolute,
which are not disclosed in the Financial Statements or elsewhere in this
Agreement. All Operating Data Statements listed on such SCHEDULE 5.10 are
accurate in all material respects.
5.11. Litigation. Except as set forth on SCHEDULE 5.11, there is no
action, order, writ, injunction, judgment or decree outstanding or claim, suit,
litigation, proceeding, or labor dispute ("Action"), other than rule-making
proceedings affecting the cellular telephone industry generally, pending or, to
the knowledge of Seller, threatened, relating to or affecting (a) Seller, (b)
the Assets, (c) the Business, or (d) the transactions contemplated by this
Agreement which if adversely determined, could have a material adverse effect on
the Business. Seller is not in default with respect to any judgment, order,
writ, injunction or decree of any court or governmental agency, and there are no
unsatisfied judgments against Seller or the Assets. There is not a reasonable
likelihood of an adverse determination of any pending Action which would,
individually or in the aggregate, have a material adverse effect on the Assets
or the Business or the financial condition of Seller.
5.12. Complaints. There is not, to the best of Seller's knowledge, any
FCC investigation, notice of apparent liability or order of forfeiture pending
or outstanding against Seller or the System respecting any violation, or
allegation thereof, of any FCC rule, regulation or policy, or, to the best of
Seller's knowledge, any complaint before the FCC as a result of which an
investigation, notice of apparent liability or order of forfeiture may issue
from the FCC relating to the System.
5.13. Reports. Except as set forth in SCHEDULE 5.13 hereto, all
material returns, reports and statements currently required to be filed by
Seller with the FCC or with any other Governmental Authority with respect to the
System have been filed and materially complied with and shall continue to be
filed and be in substantial compliance on a current basis until the Closing
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Date. All such reports, returns and statements are (or will be, in the case of
future reports) substantially complete and materially correct as filed.
5.14. Taxes. Except as noted below, Seller has paid in full or
discharged all Taxes relating to the ownership and operation of the Assets and
all Taxes the non-payment of which could result in a Lien on the Assets in the
hands of the Purchaser, excepting in each case such Taxes which are not yet due
or which are being contested and for which adequate reserves have been made. No
event has occurred that could impose on Purchaser any liability for any Taxes,
due or to become due, from Seller to any taxing authority.
Seller may not have yet paid state sales Taxes associated with certain
out collect revenues. Seller acknowledges that all such Taxes, and all penalties
and interest associated with such Taxes, are and will remain Seller's
responsibility. Seller shall have paid all such Taxes, penalties and interest
before the Closing Date.
5.15. No Other Agreements to Sell the System or the Assets. Seller has
no other legal obligation, absolute or contingent, to any other Person to sell,
or offer to sell (including any right of first refusal or other similar
agreement) the Assets or any capital stock of Seller or to effect any merger,
consolidation or other reorganization of Seller or to enter into any contract
with respect thereto.
5.16. Resale and Roaming Agreements. SCHEDULE 5.16 contains a list of
all resale agreements to which Seller is a party, both as reseller and as a
provider of resale services to others. SCHEDULE 5.16 also contains a list of all
roaming agreements to which Seller is a party. All such resale and roaming
agreements are in full force and effect and, subject to rates which may be
imposed upon Seller beyond Seller's control, are on terms reasonable and
customary in the cellular telephone industry.
5.17. Environmental Matters. Except as set forth in SCHEDULE 5.17, to
Seller's knowledge the Operating Sites, and all existing and prior uses of the
Operating Sites, comply and have at all times complied with the Environmental
Laws. Except as set forth in SCHEDULE 5.17, Seller has not used, generated
manufactured, refined, transported, treated, stored, leaked, poured, emitted,
emptied, released, discharged, disposed, spilled or Handled any Regulated
Substance on or under any Operating Site. To Seller's knowledge (a) there is and
has been no Handling of any Regulated Substances at, on, or from any Operating
Site; (b) there is and has been no presence of Regulated Substances on or under
any Operating Site regardless of how the Regulated Substance or Regulated
Substances came to rest there; (c) no underground tanks, PCBs or
asbestos-containing materials are or have been located on or under any Operating
Site; (d) no Liens have been, or are, imposed on any of the Assets under any
Environmental Laws; (e) no action, proceeding, revocation proceeding, amendment
procedure, writ, injunction or claim is pending, or threatened concerning any
environmental permit, Regulated Substance or activity related thereto. Neither
Seller nor any Person acting on behalf of Seller has released any other Person
from any claims Seller might have, or have had, for any matter relating to
presence or Handling of Regulated Substances at any Operating Site. Seller has
obtained all permits, licenses, registrations, and other approvals and has made
all reports and notifications required under any Environmental Laws in
connection with the Assets, and is in compliance in all material respects
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with all applicable Environmental Laws. There are no present actions,
activities, circumstances, conditions, events, or incidents that would be
expected to involve Seller (or any Person whose liability Seller has retained or
assumed, either by contract or operation of law) in any litigation under the
Environmental Laws, or impose upon Seller (or any Person whose liability Seller
has retained or assumed, either by contract or operation of law) any
environmental liability including, without limitation, common law tort
liability. SCHEDULE 5.17 hereto also contains a list and brief description of
all Environmental Law filings by Seller with, notices to Seller from, and
related reports to all Governmental Authorities administering Environmental
Laws, within three years prior to the date hereof, including without limitation,
filings made, corrective action taken, or citations received by Seller.
5.18. Brokers. Seller has entered into a Contract with Xxxxxxx and
Associates which will result in the obligation of Seller to pay a brokerage
commission or similar payment in connection with the transactions contemplated
hereby. Seller shall be responsible for making any and all such payments, and
Purchaser shall have no obligation therefor.
5.19. No Material Adverse Change. Except as set forth on SCHEDULE 5.19,
since the date of the most recent Financial Statements, there has not been:
5.19.1. any material adverse change in the rate of Seller's
generation of cash flow from operations (as opposed to cash flow from financing
operations and investment activities) after giving effect to customary seasonal
fluctuations of cash flow generation;
5.19.2. any occurrence, assumption or guarantee by Seller of a
material indebtedness other than pursuant to Contracts in existence on the date
hereof and set forth or described on the Schedules annexed hereto;
5.19.3. any creation by Seller of any Lien or encumbrance on any
material Asset other than pursuant to Contracts in existence on the date hereof
and set forth or described on the Schedules annexed hereto;
5.19.4. any making of any material loan, advance or capital
contribution to or investment in any Person by Seller;
5.19.5. any damage, destruction or other casualty loss affecting
the Business or the Assets which, after giving effect to payments to Seller
under applicable insurance policies, has had or is likely to have a material
adverse effect on the financial condition of Seller or the System; or
5.19.6. any change by Seller in accounting principles or methods
not required by law or year end changes.
5.20. Year 2000 Compliance. Seller has performed the necessary testing
to determine whether all material software and computer systems used in the
operation of the System are Year 2000 Compliant. To the extent that such testing
indicated that Seller's software or computer systems are not Year 2000
Compliant, such software and/or computer systems were modified or will be
modified prior to the Closing Date so they are Year 2000 Compliant. For purposes
of this
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Section, "Year 2000 Compliant" means that Seller's software or computer systems
receive, record, store, process, rout, transfer or present calendar dates and
any related information falling on or after January 1, 2000 with similar
functionality, in all material respects, as such software or computer systems
perform such functions for calendar dates and related information falling prior
to January 1, 2000.
5.21. Miscellaneous. No representation or warranty made by Seller in
this Agreement, and no statement made in any schedule, exhibit, certificate or
other document furnished pursuant to this Agreement, contains any untrue
statement of a material fact or knowingly omits or fails to state, or will
knowingly omit or fail to state, any material fact or information necessary to
make such representation or warranty or any such statement not materially
misleading; provided however, that nothing contained in this Section shall alter
the standard of those representations or warranties which are made "to Seller's
knowledge" or "to the best of Seller's knowledge" or phrases of similar import.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby makes the following representations and warranties to
Seller, all of which have been relied upon by Seller in entering into this
Agreement and the truth and accuracy of which shall constitute a condition
precedent to the obligations of Seller hereunder:
6.1. Organization and Standing. Purchaser (a) is a limited liability
company duly organized, validly existing and in good standing under the laws of
the state of its organization, (b) has full power and authority to enter into
and perform this Agreement, to own the Assets, and to carry on the Business upon
consummation of the transactions contemplated by this Agreement, and (c) is duly
qualified to do business and is in good standing as a foreign entity in every
jurisdiction in which the nature of the business conducted by it requires such
qualification, except where the failure to so qualify would not materially
adversely affect Purchaser or the transactions contemplated by this Agreement.
6.2. Authorization and Binding Obligations. The execution, delivery and
performance by Purchaser of this Agreement has been or will be within five (5)
business days of the date of this Agreement, duly and validly authorized by all
necessary company action, including approval of the entire transaction by the
manager of Purchaser. This Agreement has been duly executed and delivered by
Purchaser and constitutes a valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms except as its
enforceability may be limited by bankruptcy, insolvency, moratorium or other
laws relating to or affecting creditors' rights generally and the exercise of
judicial discretion in accordance with general equitable principles.
6.3. No Contravention. Except as otherwise contemplated hereunder, the
execution, delivery and performance of this Agreement, the consummation of the
transactions contemplated hereby and the compliance with the provisions hereof
by Purchaser will not (a) violate any provisions of the organizational documents
of Purchaser, (b) result in the breach of, or constitute a default under or
result in the creation of any Lien upon any assets of Purchaser, under the
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provisions of any agreement or other instrument to which Purchaser is a party or
by which the property of Purchaser is bound or affected or (c) with respect to
Purchaser, violate any Applicable Laws.
6.4. Litigation. Except as set forth on SCHEDULE 6.4, there is no
Action, other than rule-making proceedings affecting the cellular telephone
industry generally, pending or, to the knowledge of Purchaser, threatened or
anticipated against, relating to or affecting Purchaser that would have a
material adverse effect on Purchaser or Purchaser's ability to consummate the
transactions contemplated by this Agreement. Purchaser is not in material
default with respect to any material judgment, order, writ, injunction or decree
of any court or governmental agency, and there are no unsatisfied judgments
against Purchaser. There is not a reasonable likelihood of an adverse
determination of any pending Action which would, individually or in the
aggregate, have a material adverse effect on Purchaser or Purchaser's ability to
consummate the transactions contemplated by this Agreement.
6.5. Authority to hold Authorizations. Purchaser is an entity that is
qualified to hold the Authorizations under the rules and regulations of the FCC.
6.6. No Brokers. Neither Purchaser nor any of its Affiliates has
entered into or will enter into any contract, agreement, arrangement or
understanding with any person or firm which will result in the obligation of
Seller to pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby.
6.7. Financial Capacity. Purchaser has now, and will have on the
Closing Date, the financial capacity or resources to acquire and operate the
System and Assets as contemplated by this Agreement.
6.8. Miscellaneous. No representation or warranty made by Purchaser in
this Agreement, and no statement made in any schedule, exhibit, certificate or
other document furnished pursuant to this Agreement, contains any untrue
statement of a material fact or knowingly omits or fails to state, or will
knowingly omit or fail to state, any material fact or information necessary to
make such representation or warranty or any such statement not materially
misleading; provided however, that nothing contained in this Section shall alter
the standard of those representations or warranties which are made "to
Purchaser's knowledge" or "to the best of Purchaser's knowledge" or phrases of
similar import.
ARTICLE 7.
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to sell the Assets and to otherwise
consummate the transactions contemplated by this Agreement are subject, in the
discretion of Seller, to the satisfaction or waiver, on or prior to the Closing
Date, of each of the following conditions:
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7.1. Representations, Warranties and Covenants. All representations
and warranties of Purchaser contained in this Agreement that do not otherwise
reference a specific date shall be true and correct in all material respects at
and as of the Closing Date as if such representations and warranties were made
at and as of the Closing Date, and Purchaser shall have performed in all
material respects all agreements and covenants required hereby to be performed
by Purchaser prior to or at the Closing Date. There shall be delivered to Seller
a certificate (signed by an authorized Officer of Purchaser) to the foregoing
effect ("Purchaser's Closing Certificate").
7.2. Closing Documents. Seller shall have received from Purchaser the
documents and other items to be delivered by Purchaser pursuant to Section 9.2
of this Agreement.
7.3. Opinion of Purchaser's Counsel. Purchaser shall have delivered to
Seller an opinion of in-house counsel for Purchaser in substantially the form
attached hereto as SCHEDULE 7.3.
7.4. Compliance with Advance Agreement. Purchaser shall not be in
material default under the terms of the Advance Agreement.
7.5. Certificates. Purchaser shall furnish Seller with such
certificates of the officers of Purchaser and others to evidence compliance with
the conditions set forth in this Article as may be reasonably requested by
Seller.
7.6. Closing of Texas-7 Transaction. All of the terms and conditions
of the Texas-7 APA shall have been complied with by the parties thereto, and the
transactions contemplated by the Texas-7 APA shall be have been consummated, or
shall be consummated concurrently with the consummation of the transaction
contemplated by this Agreement.
7.7. Purchase Price. Seller shall have received payment of the
Purchase Price in accordance with Section 2.2.
7.8. HSR Waiting Period. Any waiting period required by the HSR Act
shall have lapsed or been terminated, and any investigation of the transactions
contemplated by this Agreement commenced by the DOJ and/or the FTC pursuant to
the HSR Act shall have been terminated.
7.9. No Restraint. There shall not be any pending suit or proceeding
to restrain or invalidate, in whole or in part, this Agreement or the
transaction contemplated herein.
7.10. Authorization. Purchaser shall have delivered evidence,
satisfactory to Seller, that the authorizations contemplated by Section 6.2
hereof has been timely obtained.
7.11. FCC Consent. The FCC Consent to the assignment of the
Authorizations to Purchaser shall have been obtained.
ARTICLE 8.
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CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of Purchaser to purchase the Assets and to otherwise
consummate the transactions contemplated by this Agreement are subject, in the
discretion of Purchaser, to the satisfaction or waiver, on or prior to the
Closing Date, of each of the following conditions:
8.1. Representations, Warranties and Covenants. All representations
and warranties of Seller contained in this Agreement that otherwise do not
reference a specified date shall be true and correct in all material respects at
and as of the Closing Date as if such representations and warranties were made
at and as of the Closing Date, and Seller shall have performed in all material
respects all agreements and covenants required hereby to be performed by Seller
prior to or at the Closing Date. There shall be delivered to Purchaser a
certificate (signed by an authorized officer of Seller) to the foregoing effect
("Seller's Closing Certificate").
8.2. Consent. The FCC shall have consented to the transfer of the
Assets to Purchaser and such consents shall have become a Final Order.
8.3. Board / Stockholder Approval. The transactions contemplated
herein shall have been approved by the necessary number of stockholders and
directors of Seller.
8.4. Closing Documents. Purchaser shall have received from Seller the
documents and other items to be delivered by Seller pursuant to Section 9.1
hereof.
8.5. Opinion of Seller's Business Counsel. Seller shall have delivered
to Purchaser an opinion or opinions of counsel for Seller in substantially the
form attached hereto as SCHEDULE 8.5.
8.6. Opinion of Seller's FCC and PUC Counsel. Seller shall have
delivered to Purchaser an opinion or opinions of FCC and, if applicable, PUC
counsel for Seller in substantially the form attached hereto as SCHEDULE 8.6.
8.7. Certificates. Seller shall furnish Purchaser with such
certificates of the respective officers of Seller and others to evidence
compliance with the conditions set forth in this Article as may be reasonably
requested by Purchaser.
8.8. Closing of Texas-7 Transaction. All of the terms and conditions
of the Texas-7 APA shall have been complied with by the parties thereto, and the
transactions contemplated by the Texas-7 APA shall be have been consummated, or
shall be consummated concurrently with the consummation of the transaction
contemplated by this Agreement.
8.9. HSR Waiting Period. Any waiting period required by the HSR Act
shall have lapsed or been terminated, and any investigation of the transactions
contemplated by this Agreement commenced by the DOJ and/or the FTC pursuant to
the HSR Act shall have been terminated.
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8.10. FCC Consent. The FCC Consent shall have become a Final Order;
provided that Purchaser may waive the condition that such Consent be by Final
Order.
ARTICLE 9.
THE CLOSING
On the Closing Date at the Closing Place:
9.1. Deliveries by Seller to Purchaser. Seller shall deliver to
Purchaser:
9.1.1. one or more assignments transferring to Purchaser (or its
designee) all of Seller's interest in and to the Authorizations;
9.1.2. one or more instruments of conveyance transferring to
Purchaser (or its designee) all of Seller's interest in and to the Equipment and
the Books and Records;
9.1.3. one or more assignments or other instruments of conveyance
that may be reasonably requested by Purchaser transferring to Purchaser (or its
designee) Seller's interest in and to the Intellectual Property;
9.1.4. one or more instruments of conveyance transferring to
Purchaser (or its designee) the Contracts in effect on the Closing Date;
9.1.5. one or more executed warranty deeds and assignments in
recordable form, transferring to Purchaser (or its designee) Seller's interest
in and to the Real Property;
9.1.6. one or more instruments of conveyance transferring to
Purchaser (or its designee) any of the other Assets not otherwise conveyed as
provided above;
9.1.7. the opinions of Seller's counsel referenced in Sections
8.5 and 8.6 hereof;
9.1.8. a lien and judgment search from (a) the offices of the
Secretaries of State of the state of organization of Seller and the state in
which Seller is conducting business, and (b) the office of the county clerk of
the applicable counties therein, dated not earlier than fifteen (15) business
days prior to the Closing Date, the results of which are consistent with
Seller's representations in this Agreement;
9.1.9. an affidavit certifying as to Seller's non-foreign status
in accordance with Section 1445(b)(2) of the Code;
9.1.10. a copy of the resolutions of the board of directors and
the consent of all shareholders of Seller approving the transactions
contemplated by this Agreement certified by an appropriate officer of Seller,
together with copies of the operating agreement and certificate of formation of
Seller, certified by an appropriate officer of Seller;
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9.1.11. Seller's Closing Certificate; and
9.1.12. an executed Escrow Agreement.
9.2. Deliveries by Purchaser to Seller. Purchaser shall deliver to
Seller (or its designee):
9.2.1. one or more agreements whereby Purchaser (or its designee)
assumes and agrees to perform Seller's obligations, liabilities and duties under
the Assumed Liabilities;
9.2.2. the opinion of Purchaser's counsel referenced in Sections
7.3 hereof;
9.2.3. copy of the resolutions of the board of directors of
Purchaser approving the transactions contemplated by this Agreement certified by
an appropriate officer of Purchaser;
9.2.4. Purchaser's Closing Certificate;
9.2.5. an executed Escrow Agreement; and
9.2.6. payment of the Purchase Price.
ARTICLE 10.
ACTIONS BY THE PARTIES AFTER THE CLOSING
10.1. Further Assurances. On and after the Closing Date, the Parties
will take all appropriate action and execute all documents, instruments, or
conveyances of any kind which may be reasonably necessary or advisable to carry
out any of the provisions hereof, including without limitation, putting
Purchaser (or its designee) in possession and operating control of the Assets
and the System.
10.2. Post-Closing Tax Covenant. Seller shall promptly pay Taxes
payable with respect to the operation of the System arising prior to Closing for
which Seller is responsible that become due or otherwise have given rise to, or
could give rise to, any Lien on the Assets.
10.3. Access to Records. For a period of three (3) years after the
Closing Purchaser shall retain and make available to Seller any and all records
provided to Purchaser by Seller within a reasonable period of time after receipt
of a written request for the same. Seller shall have the right to make copies of
the same at its own expense.
ARTICLE 11.
INDEMNIFICATION
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11.1. Survival. The several representations, warranties, covenants, and
agreements of the Parties contained in this Agreement (or in any document
delivered in connection herewith) shall be (i) deemed to have been made on the
date of this Agreement and on the Closing Date, (ii) shall be deemed to be
material and to have been relied upon by the Parties notwithstanding any
investigation made by the Parties, and (iii) shall survive the Closing Date (the
"Survival Period") for a period of two (2) years following the Closing Date;
provided, however, that the representations, warranties and agreements of Seller
contained in Sections 5.4 (Title to Assets), 5.6 (Authorizations), 5.14 and 10.2
(Taxes), and 5.17 (Environmental Matters) shall continue to survive for the
duration of any applicable statute of limitations. Any claim for breach of a
representation or warranty (an "Indemnity Claim") for which written notice shall
have been provided prior to the termination of the applicable survival period to
the Party which made such representation or warranty shall be deemed to be
timely made within the applicable indemnification period.
11.2. Seller's Indemnity.
11.2.1. During the indemnification Survival Period (or thereafter
solely with respect to any Indemnity Claim made prior to the expiration of the
applicable Survival Period), Seller shall indemnify and hold harmless Purchaser
and its Affiliates from and against any and all demands, claims, losses,
liabilities, actions or causes of action, assessments, damages, fines, Taxes,
penalties, reasonable costs and expenses (including, without limitation,
interest, reasonable 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 Purchaser against Seller or
asserted by third parties)) (collectively "Losses") incurred or suffered by
Purchaser, its Affiliates, and their respective officers, directors, employees,
agents and Representatives, arising out of, resulting from, or relating to:
(a) 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 the Seller pursuant to this Agreement;
(b) Any failure by Seller to perform any of its covenants or
agreements contained in this Agreement or in any agreement, certificate or other
instrument delivered by the Seller pursuant to this Agreement;
(c) Any failure to properly license or register any of the
Assets (including Motorola software and hardware);
(d) Any violation by Seller or any of its Affiliates of any
Environmental Laws; and
(e) Any claims by third parties arising from, relating to or
out of the ownership or operation of the System or the Assets prior to the
Closing Date.
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11.2.2. Escrow. As collateral security for Seller's
indemnification obligations under this Agreement, at the Closing, in accordance
with Section 2.2 hereof, Purchaser shall deliver to the Escrow Agent, the Escrow
Amount (as defined in Section 2.2), to be held in an interest bearing account
pursuant to the terms of an escrow agreement, in substantially the form of
SCHEDULE 11.2.2 attached hereto (the "Escrow Agreement"). The Escrow Amount
shall be held by the Escrow Agent until the date that is eighteen (18) months
after the Closing Date, at which time the Escrow Amount, plus any accrued but
undistributed interest, shall be released to Seller, subject to a continuing
hold back of the Escrow Amount for any asserted and outstanding indemnification
claims at such time. Nothing contained in this Section or in the Escrow
Agreement shall limit in any way Seller's indemnification obligations under this
Agreement; it being understood that if the Escrow Amount is not sufficient to
satisfy such indemnifications obligations as set forth in this Agreement, then
Seller shall remain liable for such indemnification obligations until expiration
of the applicable Survival Periods and the absence of any pending Indemnity
Claims.
11.3. Purchaser's Indemnity.
11.3.1. During the Survival Period (or thereafter solely with
respect to any Indemnity Claim made prior to the expiration of the applicable
Survival Period), from and after the Closing Date, Purchaser shall indemnify and
hold harmless Seller and its Affiliates from and against any and all Losses
incurred or suffered by Seller, its Affiliates, and their respective officers,
directors, employees, agents and Representatives, arising out of, resulting
from, or relating to:
(a) Any breach of any of the representations or warranties
made by Purchaser in this Agreement or in any agreement, certificate or other
instrument delivered by Purchaser pursuant to this Agreement;
(b) Any failure by Purchaser to perform any of its covenants
or agreements contained in this Agreement or in any agreement, certificate or
other instrument delivered by Purchaser pursuant to this Agreement;
(c) Any claims by third parties arising from, relating to,
or out of the ownership or operation of the System or the Assets after the
Closing Date; or
(d) Any claims with respect to the Assumed Liabilities.
11.4. Procedure. 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, the Party seeking such indemnification (the
"Indemnitee") shall assert an Indemnification Claim by giving prompt written
notice thereof (the "Notice") which shall describe in reasonable detail the
facts and circumstances upon which the Indemnification Claim is based, along
with a copy of the claim or complaint, to the Party required to provide
indemnification (the "Indemnitor"), and shall thereafter keep the Indemnitor
reasonably and promptly 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
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is materially prejudiced by such failure. For purposes of this paragraph, any
Notice which is sent within fifteen (15) days of the date upon which the
Indemnitee obtained actual knowledge of such Loss shall be deemed to have been a
"prompt notice."
11.4.1. If the Indemnitor wishes to defend any claim for any
Losses for which such Indemnitor is or may be liable, and such Indemnitor first
establishes (to the reasonable satisfaction of the Indemnitee) the Indemnitor's
financial ability to pay for any such Losses, then such Indemnitor may, at its
own expense, defend such claim; provided that the Indemnitee may retain counsel
(at the Indemnitee's expense) to monitor the defense of such claim, and may take
over such defense if, during the course thereof, it reasonably appears that the
Indemnitor has lost its ability to pay for any Losses threatened by such claim.
If an Indemnitor assumes the defense of such an action, no compromise or
settlement thereof may be effected by the Indemnitor without the Indemnitee's
consent, which consent shall not be unreasonably withheld. If an Indemnitor
fails, within thirty (30) days after the date of the Notice, to give notice to
the Indemnitee of said Indemnitor's election to assume the defense thereof, said
Indemnitor shall be bound by any determination made in such action or any
compromise or settlement thereof effected by the Indemnitee.
11.4.2. 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,
unless such Indemnification Claim is reasonably disputed by the Indemnitor.
11.5. Limitation on Indemnification. No Party shall be entitled to
indemnification in accordance with the provisions of this Article until such
time as the value of the aggregate loss or liability for which indemnification
is sought exceeds the sum of Fifty Thousand Dollars ($50,000). At such time as
the aggregate loss or liability for which indemnification may be sought exceeds
Fifty Thousand Dollars ($50,000), the Party to be indemnified may seek
indemnification for all such losses or liabilities, including the first Fifty
Thousand Dollars ($50,000). This limitation shall not apply to any of the Taxes,
penalties or interest referred to in the second paragraph of Section 5.14.
11.6. Indemnification Payments in Cash. All payments in respect to any
undisputed or resolved Indemnification Claims shall be made in cash.
11.7. Investigations: Waivers. The Survival Periods and rights to
indemnification provided for in this Article 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.
ARTICLE 12.
DEFAULT AND REMEDIES
12.1. Opportunity to Cure. If any Party believes another to be in
material default hereunder for breach of representations and warranties or any
other reason, such Party shall
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provide the other with written notice specifying in reasonable detail the nature
of such default. If the default has not been cured by the earlier of: (a) the
Closing Date, or (b) within thirty (30) days after delivery of that notice, then
the Party giving such notice may terminate this Agreement by notifying the
defaulting Party and/or exercise the remedies available to such Party pursuant
to this Article, subject to the right of the other Party to contest either such
action through appropriate proceedings; provided, however, that if such breach
is not capable of being cured within such period and if the breaching Party
shall have commenced action to cure such breach within such period and is
diligently attempting to cure such breach and such breach can reasonably be
expected to be cured during the additional time period, the breaching Party
shall be afforded an additional reasonable amount of time to cure such breach
but not to exceed an additional sixty (60) days; provided, further, that
Purchaser shall have no opportunity to cure the breach of its obligation to
deliver any required portion of the Purchase Price to be delivered to Seller at
Closing.
12.2. Remedies/Arbitration.
12.2.1. Any claim under this Agreement brought after the Closing
Date, and any claim under this Agreement brought prior to the Closing Date in
which the Party bringing the claim is praying solely for monetary damages, shall
be submitted to binding arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association and the provisions
contained herein. The arbitration shall be conducted in Little Rock, Arkansas,
by a panel of three arbitrators. All claims between the Parties shall be
arbitrated in a single proceeding, to the full extent practicable.
12.2.2. The Party initiating arbitration shall give the other
Party written notice of the matter in dispute and the name of the arbitrator
appointed by it. Within fourteen (14) days after receipt of such notice, the
non-initiating Party shall give notice to the initiating Party of the arbitrator
appointed by it. If the non-initiating Party fails to designate its arbitrator
within the said fourteen (14) day period, the American Arbitration Association
shall select an arbitrator for such Party. Within fourteen (14) days after the
appointment of the second arbitrator, the two arbitrators so appointed shall
agree on a third arbitrator. If the two arbitrators are unable to agree on a
third arbitrator within said 14-day period, then the American Arbitration
Association shall appoint the third arbitrator.
12.2.3. All determinations in the final decision of the
arbitration panel shall be made by majority vote. The fees and expenses of the
arbitration panel shall be awarded by the arbitrators in their discretion as
part of their award. The arbitrators' award will be binding on the Parties
hereto and may be entered in any court of competent jurisdiction, and shall not
be subject to appeal.
12.2.4. Notwithstanding the foregoing, the Parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches or 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
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law or in 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.
ARTICLE 13.
TERMINATION
13.1. Absence of FCC Consent. This Agreement may be terminated by
either Party by giving written notice thereof to the other if the Assignment
Applications have not been granted by Final Order within twelve (12) months
after the date of this Agreement. Neither Party may terminate this Agreement
pursuant to this Section if such Party is in material default hereunder.
13.2. Mutual Consent. This Agreement may be terminated by the mutual
consent of the Parties.
ARTICLE 14.
DAMAGE; RISK OF LOSS
14.1. Risk of Loss. The risk of loss or damage to the Assets shall be
upon Seller at all times prior to the Closing Date. In the event of material
loss or damage to the Assets prior to the Closing Date, Seller shall promptly
notify Purchaser thereof and, unless otherwise agreed by the Parties, Seller
shall use best efforts to repair, replace or restore the lost or damaged
property to its former condition as soon as practicable. If such repair,
replacement, or restoration has not been completed prior to the Closing Date,
Purchaser may, at its option:
14.1.1. elect to consummate the Closing and make such
arrangements as the Parties may reasonably agree upon to remedy such loss or
damage; or
14.1.2. elect to postpone the Closing Date, with prior consent of
the FCC if necessary, for such reasonable period of time (not to exceed ninety
(90) days) as is necessary for Seller to repair, replace, or restore (or to
cause to be repaired, replaced or restored) the lost or damaged property to its
former condition. If, after the expiration of that extension period, the lost or
damaged property has not been adequately repaired, replaced or restored,
Purchaser may terminate this Agreement or elect to consummate the Closing as
provided in Section 14.1.1.
For purposes of this Section, loss or damage shall be deemed "material"
if the reasonable cost to repair, replace, or restore the lost or damaged
property exceeds $100,000.00.
14.2. Resolution of Disagreements. If the Parties are unable to agree
upon the extent of any loss or damage, the cost to repair, replace or restore
any lost or damaged property, the adequacy of any repair, replacement, or
restoration of any lost or damaged property, or any other matter arising under
this Section, the disagreement shall be referred to a qualified consulting
communications engineer mutually acceptable to Seller and Purchaser who is a
member of the Association of Federal Communications Consulting Engineers, whose
decision shall be final, and whose fees and expenses shall be paid one-half by
Seller and one-half by Purchaser.
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ARTICLE 15.
EMPLOYEES
15.1. Employees. For purposes of this Article, the term "Employees"
shall include all full-time and part-time employees, employees on workers'
compensation, military leave, maternity leave, leave under the Family and
Medical Leave Act of 1993, short-term and long-term disability (including a
disability pension), non-occupational disability, layoff with recall rights, and
employees on other approved leaves of absence with a legal or contractual right
to reinstatement.
15.2. Responsibility for Employees on or Before the Closing. All
medical, dental, vision, travel accident, accidental death and dismemberment,
and life insurance expenses incurred by Employees and their dependents on or
before the Closing Date, pursuant to any employee plan, irrespective of the time
such claims are presented, shall be the responsibility of Seller on the Closing
Date. Seller shall be responsible for any medical, dental or life insurance
coverage due to any Employees and their dependents who retired on or before the
Closing Date. Seller agrees to fulfill its obligations under continuation
coverage rules of COBRA with respect to a "qualifying event," with the meaning
or Section 4980B(f) of the Code or Section 603 or ERISA, occurring on or before
the Closing Date with respect to any Employees who are not hired by Purchaser
and their dependents. All short-term, long-term and extended disability benefits
payable to Employees and their dependents who became disabled on or before the
Closing Date are the responsibility of Seller and shall be paid directly by
Seller or their insurance carrier to such Employees and their dependents. If any
Employee is terminated from employment on or before the Closing Date by Seller
as result of the transactions contemplated by this Agreement or otherwise, any
obligations arising out of such termination, including severance, accrued
vacation pay, COBRA obligations, employment discrimination complaints, unfair
labor practice charges, grievance under any collective bargaining agreement,
wrongful termination and related tort claims and breach of contract claims shall
be the sole responsibility of Seller. Purchaser shall have the sole
responsibility for the items listed in the preceding sentences for any actions
taken by Purchaser with respect to Employees it hires after the Closing Date.
ARTICLE 16.
MISCELLANEOUS
16.1. Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by Seller or Purchaser without the prior
written consent of the others. Purchaser may, without such consent, assign its
right, title and interest in, to and under this Agreement to an Affiliate;
provided that Purchaser must first obtain Seller's consent to any such
assignment (which consent shall not be unreasonably withheld) if such assignment
could reasonably be expected to delay the Closing. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective successors and assigns, and no other person shall
have any right, benefit or obligation hereunder.
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16.2. Notices. Unless otherwise provided herein, any notice, request,
instruction or other document to be given hereunder by any Party to the other
shall be in writing and delivered in person or by courier, by facsimile
transmission, or mailed by registered or certified mail, postage prepaid, return
receipt requested or overnight courier, as follows:
If to Purchaser or Guarantor:
Xxxxx Xxxxxx
GCC License LLC
Western Wireless Corporation
0000 - 000xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax No: (000) 000-0000
With a copy (which copy shall not constitute notice or service of
process) to:
Xxxxxx Xxxxxxxx, P.S.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax No: (000) 000-0000
If to Seller:
NetWireless, LLC
0000 Xxxx Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Fax No. (000) 000-0000
With a copy (which copy shall not constitute notice or service of
process) to:
Lukas, Nace, Xxxxxxxxx & Sachs
0000 - 00xx Xxxxxx, XX, Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx Xxxxxxxxx, Esq.
Fax No: (000) 000-0000
or to such other place and with such other copies as a Party may designate as to
itself by written notice to the others. All such notices and communications
shall be deemed to have been duly given at the time delivered by hand, if
personally delivered; three business days after being deposited in the mail as
provided above; when receipt confirmed, if sent by facsimile; and the next
business day after timely delivery to the courier, if sent by an over-night air
courier service guaranteeing next day delivery.
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16.3. Choice of Law. This Agreement shall be construed, interpreted and
the rights of the Parties determined in accordance with the laws of the State of
Delaware, except with respect to matters of law concerning the internal affairs
of any entity which is a Party to or the subject of this Agreement, and as to
those matters the law of the jurisdiction under which the respective entity
derives its powers shall govern.
16.4. Entire Agreement; Amendments and Waivers. This Agreement,
together with all exhibits and schedules hereto, constitutes the entire
agreement among the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties. No supplement, modification or waiver
of this Agreement shall be binding unless executed in writing by the Party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
16.5. Allocation of the Purchase Price. The Purchase Price shall be
allocated in accordance with SCHEDULE 16.5, to be prepared on or before the
Closing, and Purchaser and Seller agree to cooperate reasonably in the
preparation of such Schedule. Each of the Parties agrees that (i) such
allocation represents the fair market value of the Assets and shall be binding
upon it; (ii) no filings made by it with any taxing or other authority shall
reflect an allocation other than in the manner agreed upon; and (iii) it shall
timely make all filings required by any taxing authority, including the filing
of Internal Revenue Service Form 8594.
16.6. Bulk Sales. Purchaser and Seller each waive any obligation of the
other Party which may arise under the provision of any applicable "Bulk Sales"
laws.
16.7. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16.8. Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement or any other such instrument unless such
invalidity materially affects the benefit of the bargain of a Party as
originally contracted for in this Agreement.
16.9. Headings. The headings of the Articles and Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
16.10. Expenses. Except as expressly provided, Seller and Purchaser
shall bear equally any transfer or excise taxes arising from the transactions
contemplated herein. Seller shall pay the cost of any recording and transfer
fees arising from the purchase and sale of the Assets pursuant to this
Agreement. Seller and Purchaser will each be liable for its own expenses
incurred in connection with the negotiation, preparation, execution or
performance of this Agreement. Seller
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and Purchaser will each be liable for one-half of any expenses incurred in
obtaining consent or approval from any Governmental Authority to the assignment
the Authorizations.
16.11. Schedules and Exhibits. The Schedules and Exhibits to this
Agreement are a material part hereof and shall be treated as if fully
incorporated into the body of the Agreement.
16.12. Publicity. Except as required by Applicable Law or on advice of
counsel, no Party shall issue any press release or make any public statement
regarding the transactions contemplated hereby without the prior approval of the
other Party. Any press release or the text of any public statement to be made by
one party shall be provided to the other in advance of its release, and no such
release or statement shall be made public without the consent of the other party
16.13. Confidential Information. The Parties acknowledge that the
transaction described herein is of a confidential nature and shall not be
disclosed except to Representatives, advisors and Affiliates, or as required by
law, until such time as the Parties make a public announcement regarding the
transaction as provided in Section 16.12. The Parties shall not make any public
disclosure of the specific terms of this Agreement, except as required by law.
In connection with the negotiation of this Agreement and the preparation for the
consummation of the transactions contemplated hereby, the Parties acknowledges
that they will have access to confidential information relating to the other
Parties. Each Party shall treat such information as confidential, preserve the
confidentiality thereof and not duplicate or use such information, except to
Representatives, consultants and Affiliates in connection with the transactions
contemplated hereby provided such advisors, Representatives and Affiliates also
agree to keep such information confidential. In the event of the termination of
this Agreement for any reason whatsoever, each Party shall return to the others
all documents, work papers and other material (including all copies thereof)
obtained in connection with the transactions contemplated hereby and will use
all reasonable efforts, including instructing any of its Employees and others
who have had access to such information, to keep confidential and not to use any
such information, unless such information is now, or is hereafter disclosed,
through no act or omission of such Party, in any manner making it available to
the general public.
16.14. No Third Party Beneficiaries. All of the rights and obligations
included in this Agreement are intended to inure to the benefit of the Parties
and their Affiliates alone. Nothing contained in this agreement shall be
construed as creating any rights in any other third parties.
16.15. Parent Guarantee. Guarantor hereby absolutely, unconditionally,
directly, irrevocably, completely, and immediately guarantees the performance of
Purchaser or any of its assignees with respect to the payment of the Purchase
Price at the time and in the manner called for in this Agreement. Guarantor's
obligation of payment and performance is not contingent upon Seller first
pursuing any remedies against Purchaser or any of its successors in interest. In
the event Purchaser or its assignee fails to make any such payment when due,
within five (5) business days of receipt of written notice from Seller of
Purchaser's failure to so perform Guarantor shall make such payment to Seller,
subject to all defenses and objections that might otherwise be available to
Purchaser. Except as expressly stated in this Section, Guarantor shall have no
other responsibility or obligation under this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed on its behalf by its officer thereunto duly authorized as of the
day and year first above written.
NETWIRELESS, LLC
By: /s/ Xxxx Xxxxx
-----------------------------------
Its: President
----------------------------------
GCC LICENSE LLC
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Its: Vice President
----------------------------------
SOLELY AS GUARANTOR
UNDER THE PROVISIONS OF
SECTION 16.15 ABOVE:
WESTERN WIRELESS CORPORATION
By: /s/ Xxxxx Xxxxxx
------------------------------
Its: Vice President
-----------------------------
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EXHIBIT 10.92
July 12 1999
Xxxxx Xxxxxxxx
0000 X. Xxxxxxxx Xxx. #000
Xxxxxxx Xxxxx Xxxxxx, XX 00000
Dear Xxxxx:
This letter (the "Letter Agreement") sets forth the terms of your employment
with Western Wireless Corporation ("WWC"), effective August 1, 1999.
1. Your title will be Senior Vice President. In that capacity you will
report to the President of WWC (the "President").
2. Your responsibilities will include supervision of all sales,
distribution, marketing and customer service functions, together with
such other duties as may be assigned to you by the President. In
addition, you agree to serve as a director and/or senior officer of any
subsidiary of WWC, if so elected, without any additional salary or other
compensation. You will devote substantially all of your business time
and attention to the obligations delineated in this Letter Agreement.
3. Your base compensation will be $150,000, payable in accordance with
standard payroll practices of WWC. In addition, you will have an
opportunity, as determined by WWC, to earn a performance bonus targeted
at $75,000 per year, to be paid quarterly, and to continue, during the
course of your employment, participation in the option program at a
level to be determined by WWC. Your options shall contain change of
control language consistent with other officers of WWC. It is understood
that nothing contained herein will prevent WWC, in its sole and absolute
discretion, from, at any time, increasing your compensation, either
permanently or for a limited period, whether in base compensation, by
bonus or otherwise, if WWC in its sole discretion, shall deem it
advisable to do so in order to recognize and fairly compensate you for
the value of your services to WWC; provided, however, that nothing
contained in this paragraph three shall in any manner obligate WWC to
make any such increase or provide any such additional compensation or
benefits.
4. WWC will reimburse you for all reasonable out-of-pocket business
expenses paid or incurred by you in connection with the performance of
your duties, upon submission of signed, itemized lists of such expenses
on general forms established for that purpose by WWC.
5. You will be entitled to participate in all group health and insurance
programs and all other fringe benefit or retirement plans or other plans
effective generally with respect to executives of WWC.
6. WWC will enter into an Indemnification Agreement with you pursuant to
which WWC will agree to indemnify you against certain liabilities
arising by reason of your affiliation with WWC.
7. (a) Notwithstanding any other provision of this Letter Agreement, your
employment by WWC may be terminated by WWC at any time, with or without
Cause, as defined below. In the event of a termination for Cause you
will have no rights to severance payments. Termination for "Cause" means
(i) your gross neglect or willful material breach of your principal
employment responsibilities or duties, (ii) a final judicial
adjudication that you are guilty of a felony, (iii) fraudulent conduct
as determined by a court of competent jurisdiction in the course of your
employment with WWC or any of its subsidiaries, (iv) the breach by you
of the covenant set forth in paragraph nine, below, or (v) the material
breach by you of any other provision of this Letter Agreement which
continues uncured for a period of thirty (30) days after notice thereof
by WWC. In the event of your voluntary
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Xxxxx Xxxxxxxx
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termination of employment with WWC, you will have no rights to severance
benefits.
(b) In the event of an involuntary termination for other than Cause
(which shall include your resignation as a direct result of (i) a
reduction in your base compensation and/or incentive bonus target
percentage, or (ii) the material breach by the Company of any provision
of this Letter Agreement which continues uncured for a period of thirty
(30) days after notice thereof by you), then (A) you will be entitled to
receive a severance payment in an amount equal to your accrued but
unpaid existing annual targeted incentive bonus through the date of
termination, 6 months of your then base compensation and an amount equal
to 6 months of your existing annual targeted incentive bonus; (B) WWC
will, at its expense, make all COBRA benefit payments on behalf of you
and your dependents for six (6) months following such involuntary
termination; and (C) with respect to any stock options previously
granted to you by WWC which remain unvested at the time of the
involuntary termination, notwithstanding the vesting language in the
stock option agreement pursuant to which such options were granted,
there shall be immediate vesting of that portion of each such grant of
unvested stock options as equals the product of the total number of such
options under such grant which remain unvested multiplied by a fraction
the numerator of which is the sum of (i) the number of days from the
date on which the last vesting of options under such grant took place to
and including the date on which the termination occurs plus (ii) 183 and
the denominator of which is the number of days remaining from the date
on which the last vesting of options under such grant took place to and
including the date on which the final vesting under such grant would
have occurred.
Your death or permanent disability will be deemed an involuntary
termination for other than Cause. "Permanent disability" shall mean your
inability substantially to render the services required hereunder for
eight (8) months in any eighteen (18) month period because of a physical
or mental condition, it being understood that until you have received
notice from WWC terminating this Letter Agreement, you will continue to
receive your base compensation and all other benefits to which you are
entitled under this Letter Agreement.
(c) You agree that upon termination of your employment by WWC for any
reason you will surrender to WWC all proprietary records, lists and
other documents obtained by you or entrusted to you during the course of
your employment by WWC, together with all copies of all such documents.
8. You agree not to disclose at any time, whether during the term of this
Letter Agreement or thereafter, any secret or confidential information
relating to WWC's or any of its subsidiaries' businesses, financial
condition or prospects, which information you have obtained while
employed by WWC or by any of its subsidiaries or any of the predecessors
in interest of any of them, except (i) as may be required in furtherance
of the businesses of WWC or of any of its subsidiaries, (ii) with WWC's
express prior written consent, (iii) if such information is made
generally available to the public through no fault of yours, or (iv) if
such disclosure is required by applicable law or regulation or by legal
process and then only with prompt written notice to WWC in advance of
any such disclosure.
9. You agree that, during the term of your employment by WWC and for a
period of one (1) year immediately following the termination of your
employment with WWC for any reason whatsoever, you will not, either
directly or indirectly, for compensation or any other consideration,
individually or as an employee, broker, agent, consultant, lender,
contractor, advisor, solicitor, stockholder (provided that ownership of
5% or less of the outstanding stock of any corporation listed on a
national securities exchange is not prohibited), proprietor, partner, or
person having any other material
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Xxxxx Xxxxxxxx
Page 3
economic interest in, affiliated with or rendering services to any other
entity, engage in or provide services to or for a business that is
substantially the same as or similar to WWC's or its subsidiaries'
businesses and which competes within the applicable commercial mobile
radio services markets serviced by WWC or its subsidiaries, directly or
indirectly.
10. This Letter Agreement contains the entire agreement between you and WWC
with respect to your employment by WWC, other than human resource and
corporate policies which are to be executed by all employees. This
Letter Agreement may not be amended, waived, changed, modified or
discharged except by an instrument in writing executed by or on behalf
of you and WWC.
11. All notices, requests, demands and other communications with respect to
this Letter Agreement will be in writing and will be deemed to have been
duly given if delivered by hand, registered or certified mail (first
class postage and fees prepaid, return receipt requested), telecopier or
overnight courier guaranteeing next-day delivery, as follows:
a) to WWC:
Western Wireless Corporation
0000 - 000xx Xxxxxx XX, #000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
b) to you:
Xxxxx Xxxxxxxx
0000 X. Xxxxxxxx Xxx. #000
Xxxxxxx Xxxxx Xxxxxx, XX 00000
and/or to such other persons and addresses as either you or WWC has
specified in writing to the other by notice as aforesaid.
12. If any part of this Letter Agreement is hereafter construed to be
invalid or unenforceable in any jurisdiction, the same will not affect
the remainder of the Letter Agreement or the enforceability of such part
in any other jurisdiction, which will be given full effect, without
regard to the invalid portions or the enforceability in such other
jurisdiction. If any part of this Letter Agreement is held to be
unenforceable because of the scope thereof, you and WWC agree that the
court making such determination will have the power to reduce the
duration and/or area of such provision and, in its reduced form, said
provision shall be enforceable; provided, however, that such court's
determination will not affect the enforceability of this Letter
Agreement in any other jurisdiction beyond such court's authority.
13. This Letter Agreement will be governed by and construed and interpreted
in accordance with the laws of the State of Washington without reference
to conflicts of laws principles.
Please signify your acceptance of the terms of this Letter Agreement by signing
where indicated below.
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Xxxxx Xxxxxxxx
Page 4
Sincerely yours,
WESTERN WIRELESS CORPORATION
------------------------------------
/s/ Xxxxx Xxxxxxx
Title: President
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AGREED TO AND ACCEPTED:
----------------------------------
/s/ H. Xxxxxxx Xxxxxxxx
