STOCK PURCHASE AGREEMENT
by and among
XXXXXX CELLULAR OF CALIFORNIA, INC.,
RSA 339, INC.
and
AT&T WIRELESS SERVICES, INC.
DATED AS OF MARCH 19, 1998
TABLE OF CONTENTS
PAGE
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ARTICLE I PURCHASE AND SALE OF STOCK 2
Section 1.01 Transfer of Stock 2
ARTICLE II PURCHASE PRICE 2
Section 2.01 Purchase Price 2
Section 2.02 Payment of Purchase Price 2
Section 2.03 Purchase Price Adjustments 2
ARTICLE III CLOSING 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER 6
Section 4.01 Organization; Qualification 6
Section 4.02 Consents; Authorization; Execution and Delivery of
Agreement 7
Section 4.03 Subsidiaries and Interests in Other Companies 7
Section 4.04 Capital Stock; Interests 7
Section 4.05 Ownership of Shares; Ownership of Interest 8
Section 4.06 Assets 8
Section 4.07 Contracts 8
Section 4.08 Governmental Licenses 8
Section 4.09 Compliance with Laws 8
Section 4.10 No Violation of Existing Agreements 9
Section 4.11 Litigation and Legal Proceedings 9
Section 4.12 Environmental Compliance 9
Section 4.13 Employees 10
Section 4.14 Employee Benefits 10
Section 4.15 Tax Matters 10
Section 4.16 Financial Statements 11
Section 4.17 Brokers 12
Section 4.18 Undisclosed Liabilities; Guarantees 12
Section 4.19 Certain Business Relationships 12
Section 4.20 Officers, Directors and Certain Authorized Persons 13
Section 4.21 Disclosure 13
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER 13
Section 5.01 Organization; Qualification 13
Section 5.02 Consents; Authorization; Execution and Delivery of
Agreement 14
Section 5.03 Brokers 14
Section 5.04 No Distribution 14
Section 5.05 Compliance with Laws 14
Section 5.06 No Violation of Existing Agreements 14
Section 5.07 Litigation and Legal Proceedings 14
Section 5.08 Ownership 14
Section 5.09 Cellular 2000 Purchase Agreement 15
ARTICLE VI THE COMPANY'S, SELLER'S AND PURCHASER'S COVENANTS 15
Section 6.01 Governmental Approvals 15
Section 6.02 Third Party Consents; Closing Conditions 16
Section 6.03 Access 16
Section 6.04 Conduct of Business 17
Section 6.05 No Shopping 18
Section 6.06 Employees 18
Section 6.07 Supplemental Disclosure 18
Section 6.08 Cellular 2000 Purchase 18
Section 6.09 Taxes 19
ARTICLE VII CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE 20
Section 7.01 Accuracy of Representations and Warranties; Performance
of this Agreement 20
Section 7.02 Directors' Resolutions 21
Section 7.03 Incumbency Certificate 21
Section 7.04 Third Party Consents; FCC; Xxxx-Xxxxx Act 21
Section 7.05 No Material Adverse Change 21
Section 7.06 Normal Course of Business 22
Section 7.07 Opinion of Counsel to the Company and Seller 22
Section 7.08 Resignations of Directors 22
Section 7.09 Cellular 2000 Company Closing 22
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ARTICLE VIII CONDITIONS PRECEDENT TO THE COMPANY'S AND SELLER'S
OBLIGATION TO CLOSE 22
Section 8.01 Accuracy of Representations and Warranties;
Performance of this Agreement 22
Section 8.02 Directors' Resolutions 22
Section 8.03 Incumbency Certificate 23
Section 8.04 FCC; Xxxx-Xxxxx Act 23
Section 8.05 Opinion of Counsel to Purchaser 23
Section 8.06 Vendor Purchase Agreement 23
Section 8.07 Cellular 2000 Company Closing 23
ARTICLE IX CASUALTY LOSSES 23
ARTICLE X INDEMNIFICATION 24
Section 10.01 Indemnification by Seller 24
Section 10.02 Indemnification by Purchaser 24
Section 10.03 Notice of Claims; Defense of Third Party Claims 25
Section 10.04 Limitations 26
ARTICLE XI CONFIDENTIALITY AND PRESS RELEASES 27
Section 11.01 Confidentiality 27
Section 11.02 Press Releases 27
Section 11.03 Disclosures Required By Law 27
ARTICLE XII TERMINATION 28
Section 12.01 Breaches and Defaults; Opportunity to Cure 28
Section 12.02 Termination 28
ARTICLE XIII BROKERS' FEES 29
ARTICLE XIV MISCELLANEOUS 29
Section 14.01 Additional Instruments of Transfer 29
Section 14.02 Notices 29
Section 14.03 Expenses 30
Section 14.04 Intentionally Omitted 30
Section 14.05 Specific Performance 30
Section 14.06 Governing Law 30
Section 14.07 Assignment 31
Section 14.08 Successors and Assigns 31
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Section 14.09 Amendments; Waivers 31
Section 14.10 Entire Agreement 31
Section 14.11 Counterparts 31
Section 14.12 Severability 31
Section 14.13 Section Headings 31
Section 14.14 Interpretation 31
Section 14.15 Further Assurances 32
Section 14.16 Third Parties 32
Section 14.17 WAIVER OF JURY TRIAL 32
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DEFINED TERMS
TERM SECTION CITE
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Adjustment Amount 2.03(h)
Adjustments 2.03(g)
Agreed Adjustment Amount 2.03(h)
Asserting Party 10.03
Authorizations 6.01(a)
Base Price 2.01
Billing Cycle 2.03(a)
Breaching Party 12.01
Business Recitals
Capital Expenditures Adjustment 2.03(d)
Cellular 2000 Company Recitals
Cellular 2000 Purchase Recitals
Cellular 2000 Purchase Agreement Recitals
Cellular 2000 Shareholders Recitals
Cellular Area Recitals
Cellular System Recitals
CERCLA 4.12(b)
Claims Article IX
Closing Article III
Closing Certificate 2.03(h)
Closing Date Article III
Common Stock Recitals
Company Authorizations 4.08(a)
Company Unrelated Liabilities 2.03(e)
CPUC 4.09
Current Assets 2.03(a)
Current Liabilities 2.03(a)
Debt Adjustment 2.03(f)
December Balance Sheet 4.16(a)
Deductible 10.04(a)
Defending Party 10.03
Disclosing Party 11.01
DOJ 7.04
Encumbrances 1.01
Environmental Laws 4.12(c)
Existing Contracts 4.07(a)
FCC Recitals
FCC Authorizations 6.01(a)
Final Adjustment Amount 2.03(h)
Final Order 7.04
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Financial Statements 4.16(a)
FTC 7.04
GAAP 2.03(a)
Xxxx-Xxxxx Act 6.01(b)
Hazardous Substance 4.12(b)
Independent Accountants 2.03(h)
Interest 4.03
Inventory 2.03(a)
Loss 10.01
Material Adverse Effect 7.01
Material Loss 7.01
Non-Breaching Party 12.01
Outside Date 12.02(e)
Parent 5.08
Partnership Recitals
Partnership Agreement 4.01(b)
Person 4.03
Purchase Price 2.01
Purchaser's Estimate 2.03(g)
RCLA 4.12
RCRA 4.12
Recipient Party 11.01
Response Period 2.03(h)
RSA Recitals
Seller Payable 8.06
Seller's Estimate 2.03(g)
Shares Recitals
Statement 6.09(c)
Subscriber 2.03(a)
Subscriber Adjustment 2.03(c)
Survival Period 10.04
Target Number of Subscribers 2.03(a)
Tax 4.15(b)
Tentative Subscriber 2.03(a)
Third Party Claim 10.03
Unrelated Liabilities Adjustment 2.03(e)
Working Capital Adjustment 2.03(b)
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SCHEDULES
4.01(a) Charter of the Company
4.01(b) Partnership Agreement
4.07(a) Existing Contracts
4.07(b) Violation of Existing Contracts
4.08 Company Authorizations
4.09 Compliance with Laws
4.11 Litigation and Legal Proceedings
4.12 Environmental Compliance
4.15(a) Taxes
4.16(a) Financial Statements
4.16(c) Subsequent Developments
4.18 Guarantees
4.19 Business Relationships
4.20 Officers, Directors and Authorized Persons
8.06 Vendor Purchase Agreements
EXHIBITS
A Opinion of Counsel to the Company and Seller
B Opinion of Counsel to Purchaser
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of March 19, 1998, by and among XXXXXX CELLULAR OF CALIFORNIA, INC., an
Oklahoma corporation ("Purchaser"), RSA 339, INC. a California corporation (the
"Company"), and AT&T WIRELESS SERVICES, INC., a Delaware corporation
("Seller").
R E C I T A L S
WHEREAS, Cellular 2000 (A Partnership), a general partnership formed under
the laws of the State of Michigan (the "Partnership"), owns all right, title
and interest in certain licenses granted by the Federal Communications
Commission ("FCC") to provide cellular radio telephone service in the FCC's
rural service area ("RSA") #4 in the State of California (the "Cellular Area")
and owns and operates the non-wireline cellular telephone system (the
"Business") in the Cellular Area (the "Cellular System");
WHEREAS, the Company owns 24.982 percent of the outstanding partnership
interests of the Partnership;
WHEREAS, Cellular 2000 Telephone Co., a Delaware corporation ("Cellular
2000 Company"), owns the remaining 75.018 percent of the outstanding
partnership interests in the Partnership;
WHEREAS, Cellular 2000 Company, the shareholders of Cellular 2000 Company
(the "Cellular 2000 Shareholders") and Purchaser have entered into a certain
Stock Purchase Agreement dated October 27, 1997 (the "Cellular 2000 Purchase
Agreement") pursuant to which Purchaser has agreed to purchase, and the Cellular
2000 Shareholders have agreed to sell, up to one hundred percent of the issued
and outstanding capital stock of Cellular 2000 Company (the "Cellular 2000
Purchase");
WHEREAS, the Company has a capitalization consisting of 50,000 authorized
shares of Common Stock, $1.00 par value per share (the "Common Stock"), of
which 200 shares are issued and outstanding (collectively, the "Shares");
WHEREAS, all of the issued and outstanding Shares are owned by Seller; and
WHEREAS, Purchaser desires to purchase the Shares from Seller, and Seller
desires to sell the Shares to Purchaser, all subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein set forth and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF STOCK
SECTION 1.01. TRANSFER OF STOCK. Except as otherwise provided and
subject to the terms and conditions set forth in this Agreement, Seller agrees
to sell, convey, assign, transfer and deliver to Purchaser, and Purchaser
agrees to purchase from Seller at the Closing, all of Seller's right, title and
interest in and to the Shares, free and clear of all options, pledges,
obligations, security interests, liens, charges, rights of third parties,
community property rights and other encumbrances (collectively,
"Encumbrances").
ARTICLE II
PURCHASE PRICE
SECTION 2.01. PURCHASE PRICE. The total unadjusted purchase price for
the Shares shall be Twenty-One Million Seven Hundred Thirty-Four Thousand Four
Hundred Fifty Dollars ($21,734,450) (the "Base Price"), as adjusted in
accordance with the provisions of Section 2.03 hereof (as adjusted, the
"Purchase Price").
SECTION 2.02. PAYMENT OF PURCHASE PRICE. On the Closing Date and subject
to the terms and conditions set forth in this Agreement, in reliance on the
representations, warranties, covenants and agreements of the parties contained
herein and in consideration of the sale, assignment, transfer and delivery of
the Shares, Purchaser shall pay the Purchase Price to Seller by wire transfer
of immediately available funds.
SECTION 2.03. PURCHASE PRICE ADJUSTMENTS.
(a) As used in this Section 2.03, the following terms shall have the
meaning set forth below:
"CURRENT ASSETS" means the Partnership's (i) cash on hand, bank deposits
and cash equivalents; (ii) accounts receivable that are current to less than 91
days past due, net of a reserve for bad debts, which reserve shall equal the
sum of the following amounts: zero percent (0%) of such accounts receivable
that are not past due or that are thirty (30) or fewer days past due, ten
percent (10%) of such accounts receivable that are more than thirty (30) days
past due, but less than sixty-one (61) days past due and fifty percent (50%) of
such accounts receivable that are more than sixty (60) but less than ninety-one
(91) days past due; (iii) inventory of cellular telephone handsets and
ancillary equipment held for sale to subscribers and which is not obsolete and
will reasonably be expected based on past practices to be consumed in the
normal course of business within six months after the Closing (the
"Inventory"); and (iv) prepaid items which Purchaser will receive the benefit
of after the Closing such as prepaid rent, insurance, property taxes, utility
charges, fees and deposits paid, all determined as of 12:01 a.m. on the Closing
Date in accordance with GAAP. Refurbished cellular telephone handsets shall
not be included in the Inventory for purposes of calculating Current Assets.
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"CURRENT LIABILITIES" means the Partnership's (i) subscriber deposits
received, (ii) deferred revenue, (iii) employee vacation and sick pay expense
(whether or not to be paid or time taken after the Closing), (iv) to the extent
not paid by the Partnership prior to Closing, salaries, bonuses, fringe
benefits and other remuneration payable to employees of the Partnership, (v)
all trade payables (including any Seller Payable) and accrued expenses
including, without limitation, taxes, utility charges, special assessments,
commissions and fees, all determined as of 12:01 a.m. on the Closing Date in
accordance with GAAP.
"GAAP" means generally accepted accounting principles consistently
applied.
"SUBSCRIBER" means each account maintained by a person or entity
subscribing for cellular telephone service on the Cellular System for at least
the 30 consecutive day billing cycle of the Cellular System ("Billing Cycle")
ending on or prior to the Closing Date who (i) pays for service under a rate
plan for that category of subscriber established by the Cellular System in the
ordinary course of business, (ii) has paid for at least one full Billing
Cycle's service and whose account is active within the normal practices and
procedures of the Cellular System and in no case is more than 90 days past due,
and (iii) with respect to any customer acquired on or after January 1, 1996,
was obtained as a subscriber in the normal course of business of the Cellular
System consistent with past practice and not as a result of (A) marketing
efforts that are not customary in the cellular telephone industry generally or
which were not utilized by the Partnership between January 1, 1996 and
October 27, 1997, or (B) any other plans for which the Partnership failed to
obtain Purchaser's prior written consent.
"TARGET NUMBER OF SUBSCRIBERS" means 14,600 plus the product of (x) 170
and (y) the number of 30-day periods elapsed from November 30, 1997 to the
Closing Date (pro rated for any partial periods of less than 30 days).
"TENTATIVE SUBSCRIBER" means each account maintained by a person or entity
which as of the Closing Date meets all of the requirements for being a
"Subscriber" (as defined in this Section 2.03(a)) except for the failure to
have been a cellular telephone service customer for the full Billing Cycle
immediately prior to the Closing Date.
(b) WORKING CAPITAL ADJUSTMENT. The Base Price shall be increased (or
decreased) by an amount equal to 24.982 percent of the amount by which Current
Assets exceeds (or is less than) Current Liabilities as of the Closing Date
(such increase or decrease in the Base Price being referred to herein as the
"Working Capital Adjustment").
(c) SUBSCRIBER ADJUSTMENT. The Base Price shall be decreased by 24.982
percent of the product of (i) $300.00 and (ii) the excess, if any, of the
Target Number of Subscribers over the number of Subscribers as of the Closing
Date (such decrease in the Base Price being referred to herein as the
"Subscriber Adjustment"); PROVIDED, HOWEVER, that for purposes of determining
the Subscriber Adjustment, a Tentative Subscriber shall be counted as a
Subscriber as of the Closing Date if as of the end of the Partnership's normal
Billing Cycle which commences after the Closing Date such Tentative Subscriber
is still an active cellular telephone service customer
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of the Cellular System and has paid all charges for service when due.
(d) CAPITAL EXPENDITURES ADJUSTMENT. The Base Price shall be increased
by 24.982 percent of the dollar amount of capital expenditures incurred and
paid for by the Partnership during the period from December 6, 1997 to the
Closing Date (such increase in the Base Price being referred to herein as the
"Capital Expenditures Adjustment"); provided that Purchaser has given the
Company its prior written consent for the amount, type and purpose of each such
capital expenditure, which consent shall not be withheld unreasonably and shall
solely be for the purpose of determining the allowable amount of the Capital
Expenditure Adjustment.
(e) UNRELATED LIABILITIES ADJUSTMENT. The Base Price shall be decreased
by 100 percent of the amount of any outstanding liabilities and obligations of
the Company which are known by the Company or Seller as of the Closing Date
which are not directly related to the Company's ownership interest in the
Partnership (the "Company Unrelated Liabilities") (such decrease in the Base
Price being referred to herein as the "Unrelated Liabilities Adjustment").
(f) DEBT ADJUSTMENT. The Base Price shall be decreased by (i) 100% of
the outstanding indebtedness of the Company for borrowed money (including
capitalized lease obligations, accrued and unpaid interest and prepayment
premiums) as of the Closing and (ii) 24.982 percent of the amount of
outstanding indebtedness of the Partnership for borrowed money (including
capitalized lease obligations, accrued and unpaid interest and prepayment
premiums) as of the Closing (such decrease in the Base Price being referred to
herein as the "Debt Adjustment"); provided that prepayment premiums shall only
be treated as indebtedness for purposes of the Debt Adjustment to the extent
Purchaser pays same in connection with the payment at the Closing of
indebtedness of the Company and/or the Partnership.
(g) PURCHASER'S AND SELLER'S ESTIMATES. Seller shall prepare and submit
to Purchaser, not later than 5 business days prior to the Closing Date, a
written good faith estimate of the amount of the Working Capital Adjustment,
Subscriber Adjustment, Capital Expenditures Adjustment, Unrelated Liabilities
Adjustment and Debt Adjustment (collectively, the "Adjustments") in accordance
with this Section 2.03 and Seller's estimate of the Purchase Price resulting
from the Adjustments ("Seller's Estimate"). Seller's Estimate shall be
accompanied by detailed supporting documents, work papers, subscriber records
and other data supporting each Adjustment and Seller's Estimate. Seller's
Estimate shall be based upon the books and records of the Partnership, to the
extent available to the Company, and the Company. To the extent applicable,
and to the best of Seller's knowledge, Seller's Estimate shall be consistent
with the estimates of the Cellular 2000 Shareholders of the adjustments to the
purchase price for the Cellular 2000 Purchase, but for the fact that the
Adjustments are based on a different percentage than the adjustments for the
Cellular 2000 Purchase. Seller's Estimate shall be accompanied by a
certificate signed by Seller certifying that Seller's Estimate was calculated
in good faith and in accordance with the provisions of this Section 2.03.
After the delivery of Seller's Estimate and prior to the Closing, Purchaser and
Seller shall attempt to resolve any disputes between Seller and Purchaser with
respect to Seller's proposed Adjustments. In connection therewith, Purchaser
shall have full access to all records of the Company and, to the extent
available to the Company,
4
the Partnership related to Seller's proposed Adjustments. Prior to Closing,
Purchaser shall advise Seller in writing as to any dispute Purchaser has with
Seller's Estimate and provide Seller with Purchaser's calculation of the
Adjustments and the Purchase Price, accompanied by a certificate signed by
the President or Chief Financial Officer of Purchaser certifying that
Purchaser's calculation was made in good faith and shall be accompanied by
supporting documents and information, to the extent the same is available to
Purchaser ("Purchaser's Estimate"). In the event that (i) Purchaser's
Estimate of the Purchase Price is less than $25,000 less than Seller's
Estimate, the Closing shall proceed with the Purchase Price based upon
Seller's Estimate; or (ii) Purchaser's Estimate of the Purchase Price is more
than $25,000 less than Seller's Estimate, then the mid-point between Seller's
Estimate and Purchaser's Estimate shall be used as the Purchase Price for
purposes of the Closing.
(h) POST-CLOSING ADJUSTMENTS. Within 120 days after the Closing Date,
Purchaser shall deliver to Seller a certificate (the "Closing Certificate")
signed by the President or Chief Financial Officer of Purchaser providing a
compilation of the Adjustments to be made pursuant to this Section 2.03,
including any changes in the Adjustments used to determine the Purchase Price
at Closing, together with a statement of any additional amount owing to either
party (the "Adjustment Amount"), a copy of any supporting documents, work
papers, Subscriber records and other data relating to such Closing Certificate
and such other supporting evidence as Seller may reasonably request either
prior to or after delivery thereof. If Seller shall conclude that the Closing
Certificate does not accurately reflect the Adjustments to be made to the Base
Price in accordance with this Section 2.03 and the Adjustment Amount, Seller
shall, within 30 days after receipt of the Closing Certificate (such 30 day
period being referred to as the "Response Period"), deliver to Purchaser a
written statement of any discrepancies believed to exist. If Seller fails to
so notify Purchaser of any discrepancies, then the calculation of the Purchase
Price set forth in Purchaser's Closing Certificate shall be controlling for all
purposes hereof and, on or before the fifth (5th) day following the expiration
of the Response Period, (i) if the Purchaser is obligated to pay Seller the
Adjustment Amount, then Purchaser shall pay Seller the Adjustment Amount, or
(ii) if Seller is obligated to pay Purchaser the Adjustment Amount, then Seller
shall pay Purchaser the Adjustment Amount. On or before the fifth (5th) day
following the earlier to occur of the expiration of the Response Period and the
date Purchaser receives Seller's statement of discrepancies, Purchaser or
Seller, as the case may be, shall pay the portion of the Adjustment Amount, if
any, as to which there is no discrepancy (the "Agreed Adjustment Amount").
Purchaser and Seller shall use good faith efforts to jointly resolve their
discrepancies within fifteen (15) days of Purchaser's receipt of Seller's
written statement of discrepancies, which resolution, if achieved, shall be
binding upon Seller and Purchaser and not subject to further dispute or review.
In the event Purchaser and Seller are unable to resolve their differences
within such fifteen (15) day period, then either party may request that the
matter be resolved by Price Waterhouse (the "Independent Accountants"). In
submitting a dispute to the Independent Accountants, each of the parties shall
furnish, at its own expense, the Independent Accountants and the other party
with such documents and information as the Independent Accountants may
reasonably request. Each party may also furnish to the Independent Accountants
such other information and documents as it deems relevant with the appropriate
copies and notification being given to the other party. The Independent
Accountants may conduct a conference
5
concerning the disagreements between Seller and Purchaser at which conference
each party shall have the right to present additional documents, material and
other evidence and to have present its advisors, accountants and counsel.
The Independent Accountants shall promptly render a decision on the issues
presented and shall provide Purchaser and Seller with a statement of the
amount owing (the "Final Adjustment Amount"), and such decision shall be
final and binding on the parties. The fees and expenses of the Independent
Accountants shall be divided equally between Purchaser and Seller.
Notwithstanding the foregoing, to the extent that such fees and expenses of
the Independent Accountants are attributable to resolving a disagreement of
the same issue arising out of both this Agreement and the Cellular 2000
Agreement, then such fees and expenses shall be allocated 50% to Purchaser,
12.491% to Seller, and 37.509% to the Cellular 2000 Shareholders. Within
five (5) days of receipt of the Independent Accountants' decision with
respect to such dispute, (i) if Purchaser is determined to owe the Final
Adjustment Amount to Seller, then Purchaser shall pay Seller the Final
Adjustment Amount; or (ii) if Seller is determined to owe the Final
Adjustment Amount to Purchaser, then Seller shall pay the Final Adjustment
Amount to Purchaser. All amounts owed by Purchaser or Seller to the other in
accordance with this Section 2.03(h) shall be paid by wire transfer of
immediately available funds and shall not bear any interest.
ARTICLE III
CLOSING
Subject to the terms and conditions hereof, the closing (the "Closing")
shall take place at the offices of Xxxxxxx & Xxxxxx, 2700 Hospital Trust Tower,
Providence, Rhode Island 02903-2499, on the date (the "Closing Date") defined
in Article III of the Cellular 2000 Purchase Agreement as the "Closing Date".
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants that:
SECTION 4.01. ORGANIZATION; QUALIFICATION. (a) The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of California and has all necessary power and authority to
own and operate its properties and to carry on its business as now being
conducted or proposed to be conducted. The Company is duly qualified or
licensed to do business as a foreign corporation in good standing in the
jurisdictions in which the ownership of property or the conduct of its business
requires such qualification. Attached hereto as SCHEDULE 4.01(a) is a true and
complete copy of the Articles of Incorporation, as amended to date, of the
Company.
(b) To the best of Seller's knowledge, the Partnership is a general
partnership duly organized and validly existing under the laws of the State of
Michigan and has all necessary power and authority to own and operate its
properties and to carry on its business as now being conducted or proposed to
be conducted. Attached hereto as SCHEDULE 4.01(b) is a true and
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complete copy of the Partnership Agreement (the "Partnership Agreement") of
the Partnership that is in Seller's possession.
SECTION 4.02. CONSENTS; AUTHORIZATION; EXECUTION AND DELIVERY OF
AGREEMENT. Seller has full power, authority and capacity, and the Company has
full corporate power, authority and capacity, to execute and deliver this
Agreement and to carry out the transactions contemplated hereby. No other
proceedings, corporate or otherwise, on the part of Seller or the Company are
necessary to approve and authorize the execution and delivery of this Agreement
by Seller and the Company and the consummation by Seller and the Company of the
transactions contemplated hereby, subject to the other governmental and third-
party consents referred to in SECTION 7.04. This Agreement has been duly
executed and delivered by Seller and the Company and constitutes a valid and
binding agreement of Seller and the Company enforceable against Seller and the
Company in accordance with its terms.
SECTION 4.03. SUBSIDIARIES AND INTERESTS IN OTHER COMPANIES. (a) Other
than its interest in the Partnership (the "Interest"), the Company has no
subsidiaries, and does not own or control any shares or other securities of, or
have any other proprietary interest in, any individual, corporation,
partnership, limited liability company, joint venture, business association or
other entity (a "Person").
(b) To the best of Seller's knowledge, the Partnership has no
subsidiaries and does not own or control any shares or other securities of, or
have any other proprietary interest in, any Person.
SECTION 4.04. CAPITAL STOCK; INTERESTS. (a) The authorized capital
stock of the Company consists of 50,000 shares of Common Stock, of which 200
shares are issued and outstanding. All of the issued and outstanding Shares
are owned beneficially and of record by Seller. There are no subscriptions,
options, warrants, calls, rights, tag-along rights, drag-along rights, rights
of first refusal, contracts, commitments, voting trusts, proxies,
understandings, restrictions or arrangements relating to the issuance, voting,
sale or transfer by Seller or the Company of the Shares, including rights of
conversion or exchange under any outstanding securities or other instruments.
All outstanding shares of capital stock of the Company have been duly
authorized, validly issued and are fully paid, non-assessable and free of
preemptive rights. There are no accrued dividends or other amounts due and
owing with respect to the Shares.
(b) With respect to the Interest, the Company has satisfied all capital
calls, contribution requirements and similar obligations to make contributions
or investments. The Company is not in default under the Partnership Agreement
of the Partnership (the "Partnership Agreement") or any other instrument
setting forth the rights and obligations of the Company as owner of an Interest
in the Partnership. To the best of Seller's knowledge, there are no
subscriptions, options, warrants, calls, rights, tag-along rights, drag-along
rights, rights of first refusal, contracts, commitments, voting trusts,
proxies, understandings, restrictions or arrangements relating to the Interest
other than as set forth in the Partnership Agreement, including without
limitation, any agreement or commitment of the Company to deliver or sell the
Interest.
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SECTION 4.05. OWNERSHIP OF SHARES; OWNERSHIP OF INTEREST. (a) Seller is
the record and beneficial owner of the Shares. Seller has, and will convey to
Purchaser at Closing, good and marketable title to the Shares, free and clear
of all Encumbrances of any kind whatsoever.
(b) The Company is the record and beneficial owner of the Interest, free
and clear of all Encumbrances of any kind whatsoever.
SECTION 4.06. ASSETS. The Company does not own or lease any assets other
than the Interest.
SECTION 4.07. CONTRACTS. (a) Except as set forth on SCHEDULE 4.07(a)
attached hereto (the "Existing Contracts"), the Company is not a party to any
contract, agreement, commitment, or obligation other than agreements with
affiliates of the Company that will be canceled at or prior to the Closing.
(b) Except as disclosed on SCHEDULE 4.07(b) attached hereto, neither the
Company nor any Seller has knowledge of any breach, anticipated breach or
violation by the other parties to any Existing Contract. The Existing
Contracts are valid and binding obligations of the Company, and are in full
force and effect against the Company and the Company is in compliance with its
obligations under such Existing Contracts.
SECTION 4.08. GOVERNMENTAL LICENSES. Except as set forth on SCHEDULE
4.08 attached hereto, the Company holds all necessary licenses, consents,
permits, approvals and authorizations of public and governmental bodies which
are required in connection with the ownership and operation of the Company's
business (collectively referred to as the "Company Authorizations"). All
Company Authorizations are in full force and effect. The Company has complied
with the terms of the Company Authorizations which it holds and there are no
pending modifications, amendments or revocations of the Company Authorizations
which would adversely affect the ownership or the operation of its business.
All fees due and payable from the Company to governmental authorities pursuant
to the Company Authorizations have been paid. All reports required of the
Company to be filed in connection with the Company Authorizations have been
timely filed and are accurate and complete. True and correct copies of the
Company Authorizations, and all amendments thereto to the date hereof, have
been delivered by Seller to Purchaser and are identified on SCHEDULE 4.08
attached hereto.
SECTION 4.09. COMPLIANCE WITH LAWS. Except as set forth on SCHEDULE 4.09
attached hereto, Seller and the Company are currently complying with and have
so complied with, and are not in default under, in violation or contravention
of, any statute, law (including environmental or employment laws), ordinance,
decree, order, rule or regulation of any governmental body applicable to the
business of the Company or the Business, including, without limitation, the
rules and regulations of the FCC and the California Public Utilities Commission
("CPUC").
8
SECTION 4.10. NO VIOLATION OF EXISTING AGREEMENTS. The execution,
delivery and performance of this Agreement by Seller and the Company and
Seller's transfer of the Shares to Purchaser (i) will not violate any
provisions of any law or any provision of the Company's articles of
incorporation or by-laws, or the Partnership Agreement, (ii) to the best of
Seller's knowledge, will not, with or without the giving of notice or the
passage of time, or both, conflict with or result in any breach of any of the
terms or conditions of, or constitute a default under any Existing Contract or
any contract to which Seller is a party, and (iii) will not result in the
creation of any Encumbrance upon any of the Shares or, to the best of Seller's
knowledge, the assets of the Partnership.
SECTION 4.11. LITIGATION AND LEGAL PROCEEDINGS. Except as set forth on
SCHEDULE 4.11 attached hereto, there is no outstanding judgment against the
Company, Seller or any director, officer or stockholder of the Company
affecting the Business or the Shares or which questions the validity of any
action taken or to be taken pursuant to or in connection with the provisions of
this Agreement. Except as set forth on SCHEDULE 4.11 attached hereto, there is
no claim, litigation, proceeding or investigation pending, or, to the Company's
or Seller's knowledge, threatened, against the Company or Seller or any
director, officer or stockholder of the Company affecting the Business or which
questions the validity of any action taken or to be taken pursuant to or in
connection with the provisions of this Agreement and there is no basis for any
such claim, litigation, proceeding or investigation. Except as set forth on
SCHEDULE 4.11 attached hereto, there are no proceedings pending to which the
Company or Seller or any director, officer or stockholder of the Company is a
party or, to the Company's or Seller's knowledge, threatened, nor any demands
by any governmental agency, utility or other party, to terminate, modify or
adversely change the terms and conditions of the Company's rights with respect
to the Company Authorizations or Existing Contracts.
SECTION 4.12. ENVIRONMENTAL COMPLIANCE. (a) Except as set forth on
SCHEDULE 4.12 attached hereto, (i) neither Seller nor the Company has received
any notice alleging any violation of any Environmental Law; (ii) the Company is
in compliance with all Environmental Laws; (iii) the Company has obtained and
complies with all required governmental environmental permits with respect to
its business as presently conducted; (iv) the Company has not generated, used,
transported, treated, stored, released or disposed of, or suffered or permitted
anyone else to generate, use, transport, treat, store, release or dispose of
any Hazardous Substance (as hereinafter defined) with respect to its business
in violation of any Environmental Laws (as hereinafter defined); (v) there has
not been any generation, use, transportation, treatment, storage, release or
disposal of any Hazardous Substance in connection with the Company's ownership
and conduct of its business, which has created or might reasonably be expected
to create any liability under any Environmental Laws or which would require
reporting to or notification of any governmental entity; (vi) no friable
asbestos or polychlorinated biphenyl, and no underground storage tank, is
contained in or located on or under any property or facility owned, used or
leased by the Company; and (vii) any Hazardous Substance handled or dealt with
in any way with respect to the business of the Company or the Company's
ownership of its business, has been and is being handled or dealt with in
compliance with all Environmental Laws.
9
(b) For purposes of this Agreement, the term "Hazardous Substance"
shall mean any substance which, as of the date of this Agreement, is listed as
hazardous or toxic in the regulations implementing the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended
("CERCLA"), the Response Compensation and Liability Act ("RCLA"), the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA"), or listed as a
hazardous substance under any applicable state environmental laws, or any
substance which has been determined by regulation, ruling or otherwise by any
agency or court to be a hazardous or toxic substance regulated under federal or
state law, and shall include petroleum and petroleum products.
(c) For purposes of this Agreement, the term "Environmental Laws"
shall mean CERCLA, RCRA, RCLA and any applicable statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals, plans, authorizations,
concessions, franchises and similar items of all governmental authorities and
all applicable judicial, administrative and regulatory decrees, judgments and
orders, any of which relate to the protection of human health or the
environment from the effects of Hazardous Substances, including but not limited
to those pertaining to reporting, licensing, permitting, investigating and
remediating emissions, discharges, releases or threatened releases of Hazardous
Substances into the air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances.
SECTION 4.13. EMPLOYEES. The Company does not currently have, and never
had, any employees, and is not a party to any employment contract.
SECTION 4.14. EMPLOYEE BENEFITS. The Company does not have any pension
plan, profit sharing plan, deferred compensation plan, stock option or stock
bonus plan, saving plan, or other benefit plan, policy, practice, or procedure
or contract concerning employee benefits or fringe benefits of any kind,
whether or not governed by the Employee Retirement Income Security Act of 1974,
as amended.
SECTION 4.15. TAX MATTERS. (a) Except as set forth on SCHEDULE 4.15(a)
attached hereto: (i) the Company and Seller has timely filed all Tax (as
defined below) returns and statements which it is required to file with respect
to the Company; (ii) all such returns are complete and accurate and disclose
all Taxes required to be paid for the periods covered thereby; (iii) neither
the Company nor Seller has waived any statute of limitations in respect of
Taxes or agreed to an extension of time with respect to a Tax assessment or
deficiency; (iv) no assessment of any additional Taxes for periods for which
returns have been filed has been asserted and no basis exists therefor; (v) to
the Company's and Seller's knowledge, there are no unresolved questions or
claims raised by any Taxing authority concerning the Tax liability of the
Company; and (vi) all Taxes which the Company is required by law to withhold or
to collect for payment have been duly withheld and collected, and have been
paid. The Company has paid all Taxes due prior to the date hereof and will pay
when due (or contest in good faith by appropriate proceedings) all Taxes which
may become due on or before the Closing Date.
10
(b) For purposes of this Section 4.15, the term "Tax" or "Taxes" means
all taxes, charges, fees, levies, imposts and other assessments including all
income, sales, use, goods and services, value added, capital, capital gains,
alternative net worth, transfer, profits, withholding, payroll, employer
health, excise, real property and personal property taxes, and any other taxes,
customs duties, stamp duties, fees, assessments or similar charges in the
nature of a tax, together with any interest, fines and penalties imposed by any
governmental authority (including federal, state, provincial, municipal and
foreign governmental authorities), and whether disputed or not.
SECTION 4.16. FINANCIAL STATEMENTS.
(a) Purchaser has heretofore been furnished with true and complete copies
of the unaudited balance sheets of the Company as of December 31, 1997,
December 31, 1996 and December 31, 1995 (the balance sheet as of December 31,
1997 being referred to as the "December Balance Sheet") and the related
statements of income, cash flows and shareholders' equity for the years then
ended, each of such balance sheets and income statements being attached hereto
as SCHEDULE 4.16(a) (collectively, the "Financial Statements").
(b) The Financial Statements delivered were prepared in accordance with
GAAP applied on a basis consistent with prior periods and past practices,
except for the omission of certain footnotes and other presentation items
required by GAAP with respect to audited financial statements; the December
Balance Sheet fairly presents the financial condition of the Company as at the
close of business on the date thereof; and each of the statements of income
included in such Financial Statements fairly presents the results of operations
of the Company for the fiscal period then ended.
(c) Except as set forth on SCHEDULE 4.16(c) attached hereto, since
December 31, 1997, the Company has not:
(i) sold, assigned or transferred any of its assets or
properties or canceled any material debts or material claims;
(ii) waived any material rights, whether or not in the
ordinary course of business;
(iii) entered into any other transaction, except in the
ordinary course of business, or entered into any transaction with
any partner of the Partnership or any director, officer or
shareholder of the Company, or any affiliate or family member of
any such Person;
(iv) suffered any material damage, destruction or casualty
loss with respect to its assets or properties whether or not
covered by insurance;
(v) declared or paid any dividend, made any distribution of
any of its assets to any director, officer or shareholder of the
Company or any affiliate
11
or family member of any such Person or redeemed or purchased any of
its shares of capital stock or other equity interest;
(vi) entered into any contract, commitment or agreement
under which it has outstanding indebtedness for borrowed money or
for the deferred purchase price of property, or has the right or
obligation to incur any such indebtedness or obligation, or made
any loan or advance to any Person;
(vii) made any material change in accounting procedures or
practices;
(viii) mortgaged or pledged any of its properties or
assets, tangible or intangible, or subjected them to any
Encumbrances, except Encumbrances for current property taxes not
yet due and payable;
(ix) entered into any agreement or arrangement granting any
rights to purchase or lease any of its assets, properties or
rights or requiring the consent of any Person to the transfer,
assignment or lease of any such assets, properties or rights; or
(x) entered into any agreement or understanding to do any
of the foregoing.
SECTION 4.17. BROKERS. Neither Seller nor the Company has engaged any
agent, broker or other person acting pursuant to its express or implied
authority which is or may be entitled to a commission or broker or finder's fee
in connection with the transactions contemplated by this Agreement or otherwise
with respect to the sale of the Shares.
SECTION 4.18. UNDISCLOSED LIABILITIES; GUARANTEES. The Company does not
have any liabilities or obligations of any nature, whether absolute, accrued,
contingent, known or unknown, or otherwise, which are not reflected in or
reserved against the December Balance Sheet, except for liabilities and
obligations that have arisen in the ordinary and usual course of business and
consistent with past practice (none of which results from, arises out of,
relates to, is in the nature of, or caused by any breach of contract, breach of
warranty, tort, infringement or violation of law). Except as disclosed on
SCHEDULE 4.18 attached hereto or in the Financial Statements, there are no
contracts or commitments by the Company guaranteeing the payment or performance
of an obligation by any other Person.
SECTION 4.19. CERTAIN BUSINESS RELATIONSHIPS. Except as set forth in
SCHEDULE 4.19 attached hereto, none of the officers, directors or stockholders
of the Company or Seller or any of their affiliates or family members have been
involved in any business arrangement or relationship with the Company or the
Partnership outside the ordinary course of business within the past 12 months.
12
SECTION 4.20. OFFICERS, DIRECTORS AND CERTAIN AUTHORIZED PERSONS.
Attached hereto as SCHEDULE 4.20 sets forth a complete and accurate list of:
(i) the names of all directors of the Company;
(ii) the names and offices of all officers of the Company;
(iii) the names of all Persons authorized to borrow money
or incur or guarantee indebtedness on behalf of the Company;
(iv) all safes, vaults and safe deposit boxes maintained by
or on behalf of the Company or in which their respective property
is held, and the names of all Persons authorized to have access
thereto;
(v) all bank accounts of the Company and the names of all
Persons who are authorized signatories and the terms of their
authorizations; and
(vi) the names of all Persons to which the Company has
granted its power of attorney and the terms of any such powers of
attorney.
SECTION 4.21. DISCLOSURE. No provision of this Agreement relating to
Seller, the Company or the Shares or any other document, Schedule, Exhibit or
other information furnished by Seller or the Company to Purchaser in connection
with the execution, delivery and performance of this Agreement, or the
consummation of the transactions contemplated hereby, contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact required to be stated in order to make the statement, in light of
the circumstances in which it is made, not misleading. All Schedules provided
by Seller or the Company attached hereto are accurate and complete as of the
date hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants that:
SECTION 5.01. ORGANIZATION; QUALIFICATION. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Oklahoma. Purchaser has all necessary power and authority to (i) own
and operate its properties, (ii) carry on its business as it is now being
conducted, and (iii) carry out the transactions contemplated by this Agreement
and to own the Shares and operate the Business, subject to Seller's obtaining
all necessary consents required for the transfer of the Shares. Purchaser is
duly qualified and in good standing as a foreign corporation in the State of
California and in any other jurisdiction in which the ownership of property or
the conduct of its business requires such qualification.
13
SECTION 5.02. CONSENTS; AUTHORIZATION; EXECUTION AND DELIVERY OF
AGREEMENT. All necessary consents and approvals have been obtained by
Purchaser for the execution, delivery and performance of this Agreement. The
execution and delivery of this Agreement by Purchaser has been duly and validly
authorized and approved by all necessary corporate action. Purchaser has full
power and authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly executed and delivered by Purchaser
and is a valid and binding obligation of Purchaser, enforceable against it in
accordance with its terms.
SECTION 5.03. BROKERS. Purchaser has not engaged any agent, broker or
other person acting pursuant to the express or implied authority of Purchaser
which is or may be entitled to a commission or broker or finder's fee in
connection with the transactions contemplated by this Agreement or otherwise
with respect to the sale of the Shares.
SECTION 5.04. NO DISTRIBUTION. The Shares will not be taken by Purchaser
with a view to the public distribution thereof and will not be transferred
except in a transaction registered or exempt from registration under the
Securities Act of 1933, as amended, and any applicable state securities laws.
SECTION 5.05. COMPLIANCE WITH LAWS. Purchaser is currently complying
with and has so complied with, and is not in default under or in violation or
contravention of, any statute, law, ordinance, decree, order, rule, or
regulation of any governmental body applicable to its business, including,
without limitation, the rules and regulations of the FCC and the CPUC.
SECTION 5.06. NO VIOLATION OF EXISTING AGREEMENTS. The execution,
delivery and performance of this Agreement by Purchaser (i) will not violate
any provisions of any law or any provision of Purchaser's certificate of
incorporation or by-laws and (ii) will not, with or without the giving of
notice or the passage of time, or both, conflict with or result in any breach
of any terms or conditions of, or constitute a default under any contract to
which Purchaser is a party.
SECTION 5.07. LITIGATION AND LEGAL PROCEEDINGS. There is no outstanding
judgment against Purchaser or any director, officer or stockholder of Purchaser
which questions the validity of any action taken or to be taken pursuant to or
in connection with the provisions of this Agreement. There is no claim,
litigation, proceeding or investigation pending or, to Purchaser's knowledge,
threatened against Purchaser or any of its directors, officers or stockholders
which questions the validity of any action taken or to be taken pursuant to or
in connection with the provisions of this Agreement and there is no basis for
any such claim, litigation, proceeding or investigation.
SECTION 5.08. OWNERSHIP. All of the issued and outstanding shares of the
capital stock of Purchaser are owned, of record and beneficially by, Xxxxxx
Cellular Operations Company, an Oklahoma corporation which is a wholly-owned
subsidiary of Xxxxxx Communications Corporation, an Oklahoma corporation
("Parent"). There are no options, warrants or other rights to acquire capital
stock of Purchaser or securities representing the right to acquire or convert
into capital stock of Purchaser.
14
SECTION 5.09. CELLULAR 2000 PURCHASE AGREEMENT. Purchaser has provided
to Seller a complete, true and accurate copy of the Cellular 2000 Purchase
Agreement. Purchaser is not in breach of any of its representations,
warranties, covenants or agreements under the Cellular 2000 Purchase Agreement
as a result of which breach(es), individually or in the aggregate, the Cellular
2000 Shareholders would be entitled, at their sole election, to terminate or
otherwise not consummate the transactions contemplated in the Cellular 2000
Purchase Agreement, except that any such breach shall be considered waived if,
with full knowledge thereof by the Cellular 2000 Shareholders, the Closing (as
defined in the Cellular 2000 Purchase Agreement) occurs. Purchaser is not
aware of any breach by any party to the Cellular 2000 Purchase Agreement that
currently is in existence and could cause the transactions contemplated by that
agreement not to be consummated.
ARTICLE VI
THE COMPANY'S, SELLER'S AND PURCHASER'S COVENANTS
SECTION 6.01. GOVERNMENTAL APPROVALS. (a) Purchaser covenants and
agrees that it will cooperate with the Company and Seller, and use its
reasonable best efforts to assist them, to obtain all consents and approvals
necessary for transfer of control to Purchaser of the licenses, consents,
permits, approvals and authorizations of public and governmental bodies
including, without limitation, the FCC licenses, consents, permits and
authorizations to operate a cellular telephone system in the Cellular Area and
microwave paths used in connection with such cellular operations (the "FCC
Authorizations") and authorizations from the CPUC and other states, counties
and municipalities served by the Business which are required in connection with
the ownership and operation of the Business (collectively referred to as the
"Authorizations"). The Company and Seller shall use all reasonable efforts to
provide adequate prior written notice to Purchaser of any meeting with
governmental authorities the purpose of which is to seek a consent or approval
to the transactions contemplated hereby, and Purchaser shall use all reasonable
efforts to furnish a representative to attend meetings with appropriate
government authorities for the purpose of obtaining such consents or approvals.
Purchaser, the Company and Seller hereby agree to file and to cause the
Partnership to file the necessary Form(s) 490 and 702 with the FCC transferring
or assigning control of the FCC Authorizations for the Business to Purchaser
and diligently pursue the processing of the assignment of the FCC
Authorizations to Purchaser and to file for all other necessary regulatory
approvals for the consummation of the transactions contemplated by this
Agreement within five business days of the date of execution of this Agreement
to the extent any such filings have not been made prior to the date of
execution of this Agreement. Seller, on the one hand, and Purchaser, on the
other, shall share equally all filing fees in connection with any filings
pursuant to this Section 6.01(a). Notwithstanding the foregoing, to the extent
that Purchaser, Seller and the Cellular 2000 Shareholders jointly shall be
permitted to make a single filing under this Section 6.01(a) and pay a single
filing fee in connection therewith, such filing fee shall be paid 50% by
Purchaser, 12.491% by Seller, and 37.509% by the Cellular 2000 Shareholders.
15
(b) The Company, Seller and Purchaser shall each cooperate and use their
reasonable best efforts to prepare and file with the Federal Trade Commission
and the Department of Justice and other regulatory authorities as promptly as
possible all requisite applications and amendments thereto together with
related information, data and exhibits necessary to satisfy the requirements of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act ("Xxxx-Xxxxx Act"). Seller,
on the one hand, and Purchaser, on the other, shall share equally all filing
fees in connection with any filings pursuant to this Section 6.01(b).
Notwithstanding the foregoing, to the extent that Purchaser, Seller and the
Cellular 2000 Shareholders jointly shall be permitted to make a single filing
under this Section 6.01(b) and pay a single filing fee in connection therewith,
such filing fee shall be paid 50% by Purchaser, 12.491% by Seller, and 37.509%
by the Cellular 2000 Shareholders.
SECTION 6.02. THIRD PARTY CONSENTS; CLOSING CONDITIONS. (a) The Company
and Seller covenant and agree to use their reasonable best efforts to assist
the Cellular 2000 Shareholders to obtain all consents and approvals necessary
for the transfer or assignment to Purchaser of the contracts requiring
assignment as a result of Purchaser's purchase of the Shares. Purchaser
covenants and agrees to cooperate with the Cellular 2000 Shareholders and
assist the Cellular 2000 Shareholders in obtaining such consents and approvals
including the furnishing of financial and other information, reasonably
required by the Person whose consent or approval is being sought.
(b) Purchaser, the Company and Seller hereby covenant and agree to use
all reasonable efforts to satisfy, or assist the other party in satisfying, the
closing conditions applicable to the Purchaser in Article VII hereof and the
Company and Seller in Article VIII hereof prior to the Closing Date.
SECTION 6.03. ACCESS. (a) Purchaser shall have the right, itself or
through its representatives, during normal business hours, after reasonable
notice (which may be oral) to Seller and the Company, and without undue
disruption to the Company, to inspect the assets and properties of the Company
and to inspect and make abstracts and reproductions of all books and records of
the Company including, without limitation, applications and reports to the FCC
and CPUC, all financial information relevant to the Business, employee records,
and engineering and environmental reports, and the Company shall furnish
Purchaser with such information respecting the assets, business and financial
records of the Company as Purchaser may, from time to time, reasonably request.
(b) The Company and Seller acknowledge that the Cellular 2000 Shareholders
have permitted Purchaser the opportunity to conduct an engineering review of
the Cellular System to confirm that the Cellular System complies with the FCC
Authorizations and the regulations of the FCC and is otherwise in good
condition and repair, reasonable wear and tear excepted.
16
SECTION 6.04. CONDUCT OF BUSINESS. From and after the date hereof, the
Company and Seller shall:
(a) comply with all laws, rules and regulations applicable to the
Company;
(b) refrain from making any sale, lease, transfer or other disposition
of the Shares or the Interest;
(c) refrain from modifying, amending or altering or terminating any of
the Existing Contracts, and from waiving or canceling any default or breach
or modifying, altering or terminating any right or asset of the Company
without Purchaser's prior written approval, which approval will not be
unreasonably withheld;
(d) maintain insurance on the assets and properties of the Company
comparable to that maintained prior to the date hereof, and use the
proceeds of any claims for loss under such policies, together with such
other funds as may be required, to repair, replace, or restore to their
former condition any assets or properties which may be damaged by fire or
other casualty, all as soon as reasonably possible;
(e) maintain its books and records in accordance with prior practice;
maintain all of its property and assets in their present condition,
ordinary wear and tear excepted; and otherwise operate its business in the
ordinary course in accordance with past practices;
(f) refrain from changing the articles of incorporation or by-laws of
the Company;
(g) refrain from subjecting the Shares or the Interest to any
Encumbrance;
(h) refrain from doing or omitting to do any act which will cause a
breach of, or default under, or termination of (except in accordance with
its terms), any contract, agreement, lease, commitment, or obligation to
which the Company is a party or by which it is bound;
(i) notify Purchaser in writing promptly after learning of the
institution or threat of any material action against the Company in any
court, or any action against the Company before the FCC or the CPUC or any
other governmental agency, and notify Purchaser in writing promptly upon
receipt of any administrative or court order relating to the Business;
(j) pay or cause to be paid or provide for all Taxes of or relating to
the Company or the Shares up to the Closing Date;
(k) refrain from taking any action not in the Company's usual course
of business without Purchaser's prior approval;
17
(l) refrain from distributing, by dividend or otherwise, the Interest
or any portion thereof, or issuing, redeeming or repurchasing any shares of
the Company's capital stock; PROVIDED, HOWEVER, that the Company may
distribute to Seller any and all assets of the Company other than the
Interest;
(m) refrain from creating, incurring, assuming, guaranteeing, or being
or remaining liable, contingently or otherwise, with respect to any
indebtedness; and
(n) refrain from being a party to any merger or consolidation or other
transfer of any shares of the capital stock of the Company or interests in
the Partnership.
SECTION 6.05. NO SHOPPING. None of Seller, the Company and any of their
affiliates, advisors or representatives shall, directly or indirectly, solicit,
encourage or initiate any contact with, negotiate with, or provide any
information to, endorse or enter into any agreement with respect to, or take
any other action to facilitate any person or group, other than Purchaser and
its representatives, concerning any inquiries or the making of any proposals
concerning any merger involving the Company or the Partnership, sale of all or
substantially all of the assets of the Company or the Partnership, acquisition
of the Shares or an equity interest in the Company or the Partnership or any
similar transaction involving the Company or the Partnership.
SECTION 6.06. EMPLOYEES. Nothing contained in this Agreement shall confer
upon any employee of the Partnership any right with respect to continued
employment by the Partnership or Purchaser. No provision of this Agreement
shall create any third-party rights in any such employee, or any beneficiary or
dependent thereof, with respect to the compensation, terms and conditions of
employment and benefits that may be provided to such employee by Purchaser or
under any benefit plan that Purchaser may maintain.
SECTION 6.07. SUPPLEMENTAL DISCLOSURE. The parties hereto shall promptly
from time to time prior to the Closing Date supplement in writing the Schedules
hereto or other information delivered pursuant hereto with respect to any
matter hereafter arising that, if existing or known as of the date of this
Agreement, would have been required to be set forth or described in the
Schedules hereto; provided, however, that no such supplemental disclosure shall
be deemed to cure any breach of any representation or warranty of the
disclosing party made in this Agreement unless the other party fails to object
in writing to any such supplemental disclosure within ten (10) business days
after receipt thereof.
SECTION 6.08. CELLULAR 2000 PURCHASE. Purchaser shall perform all of its
obligations under, and shall not breach, the Cellular 2000 Purchase Agreement
and shall consummate the transactions contemplated thereunder, unless any such
action or inaction by Purchaser is (i) excused by the terms of the Cellular
2000 Purchase Agreement, or (ii) is waived by the other parties to that
agreement in accordance with the terms thereof, or (iii) does not otherwise
prevent consummation of the transactions contemplated thereunder.
18
SECTION 6.09 TAXES.
(a) Taxes, together with all related deductions, credits and allowances,
attributable to the business and operations of the Company shall be allocated
to (i) Seller for the period up to and including the Closing Date, and (ii)
Purchaser for the period subsequent to the Closing Date. For purposes of this
Section 6.09, Taxes for the period up to and including the Closing Date shall
be determined on the basis of a closing of the books as of the Closing Date,
except that any such Tax imposed annually based on ownership of assets on a
particular date or similar Tax shall be prorated to the period prior to and
including the Closing Date and the period thereafter.
(b) Seller shall be solely responsible for and shall prepare or cause to
be prepared, and file or cause to be filed, all Tax returns of the Company with
respect to periods ending on or before the Closing Date. Purchaser shall
prepare or cause to be prepared, and file or cause to be filed, all Tax returns
of the Company with respect to periods ending after the Closing Date.
(c) With respect to any Tax return for any taxable period of the Company
that includes but does not terminate on the Closing Date, Purchaser shall
deliver, at least thirty (30) business days prior to the due date for filing
such Tax return (including extensions), to Seller a statement setting forth the
amount of Taxes for which Seller is responsible pursuant to this Agreement or
that are allocable to Seller pursuant to Section 6.09(a), as the case may be
(the "Statement"), and copies of such Tax return. Seller shall have the right
to review and approve or disapprove such Tax return and the Statement prior to
the filing of such Tax return. Seller and Purchaser agree to negotiate and
resolve in good faith any issue arising as a result of the review of such Tax
return and the Statement and to mutually consent to the filing of such Tax
return as promptly as possible.
(d) Whenever any taxing authority sends a notice of an audit, initiates
an examination of the Company or otherwise asserts a claim, makes an assessment
or disputes the amount of Taxes (i) for any taxable period for which Seller is
or may be liable under this Agreement or (ii) for any taxable period that
involves an issue that could potentially affect a taxable period for which
Seller is or may be liable under this Agreement, Purchaser shall promptly
inform Seller, and Seller shall have the right to control, at its cost, any
resulting proceedings and to determine whether and when to settle any such
claim, assessment or dispute to the extent such proceedings or determinations
affect the amount of Taxes for which Seller is liable under this Agreement.
Whenever any taxing authority sends a notice of an audit, initiates an
examination of the Company or otherwise asserts a claim, makes an assessment or
disputes the amount of Taxes (i) for any taxable period for which Purchaser is
liable under this Agreement or (ii) for any taxable period that involves an
issue that could potentially affect a taxable period for which Purchaser is or
may be liable under this Agreement, Seller shall promptly inform Purchaser, and
Purchaser shall have the right to control, at its cost, any resulting
proceedings and to determine whether and when to settle any such claim,
assessment or dispute, except to the extent such proceedings affect the amount
of Taxes for which Seller is liable under this Agreement.
19
(e) Each of Purchaser and Seller will provide the other with such
assistance as may reasonably be requested by either of them in connection with
the preparation of any Tax return, any audit or other examination by any taxing
authority, or any judicial or administrative proceedings relating to liability
for Taxes, and each will retain and provide the other with any records or
information which may be relevant to such return, audit or examination,
proceedings or determination. Such assistance shall include making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder and shall include providing
copies of any relevant tax return and supporting work schedules. The party
requesting assistance hereunder shall reimburse the other for reasonable
expenses incurred in providing such assistance. Without limiting in any way
the foregoing provisions of this Section 6.09(e), Purchaser hereby agrees that
it will retain, until the appropriate statutes of limitation (including any
extensions) expire, copies of all tax returns, supporting work schedules and
other records or information which it possesses and which may be relevant to
such returns of the Company for all taxable periods ending on or prior to the
Closing Date, and that such records shall be maintained until the expiration of
the applicable statute of limitations, including any extensions thereto.
Further, Purchaser will not destroy or otherwise dispose of such records
without first providing Seller with a reasonable opportunity to review and copy
such records.
ARTICLE VII
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE
The obligation of Purchaser under this Agreement with respect to the
purchase and sale of the Shares shall be subject to the fulfillment on or prior
to the Closing of each of the following conditions, any of which may be waived
in writing by Purchaser:
SECTION 7.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
THIS AGREEMENT. All of the representations and warranties made by the Company
and Seller in this Agreement shall be true and correct at and as of the
Closing, except for such breaches and inaccuracies therein which, in the
aggregate, have not caused and would not reasonably be expected to cause
Purchaser to suffer a Loss (as defined in Section 10.01) in excess of $300,000
in the aggregate (a "Material Loss") or otherwise result in a Material Adverse
Effect. The Company and Seller shall have complied in all material respects
with and performed all of the agreements and covenants required by this
Agreement to be performed or complied with by them on or prior to the Closing.
Purchaser shall have been furnished with a certificate or certificates of the
Company's President or any Vice President, dated as of the Closing, certifying
to the fulfillment of the foregoing conditions. As used in this Agreement, the
term "Material Adverse Effect" means a material adverse effect on the assets,
properties, business, operations or prospects of the Business taken as a whole,
without regard to whether such effect constitutes a Material Loss.
20
SECTION 7.02. DIRECTORS' RESOLUTIONS. The Company shall deliver to
Purchaser copies of the resolutions of the board of directors of the Company
authorizing the execution, delivery and performance of this Agreement and all
instruments and documents to be delivered in connection herewith and the
transactions contemplated hereby, duly certified by an officer of the Company.
SECTION 7.03. INCUMBENCY CERTIFICATE. Purchaser shall have received a
certificate or certificates of an officer of each of the Company and Seller,
certifying as to the genuineness of the signatures of officers of such Person
authorized to take certain actions or execute any certificate, document,
instrument or agreement to be delivered pursuant to this Agreement, which
incumbency certificate shall include the true signatures of such officers.
SECTION 7.04. THIRD PARTY CONSENTS; FCC; XXXX-XXXXX ACT. Seller shall
have delivered to Purchaser such instruments, consents and approvals of third
parties (the form and substance of which shall be reasonably satisfactory to
Purchaser) as are necessary for the consummation of the transactions
contemplated by this Agreement and to assign to Purchaser without modification
thereof, as of the Closing, the Existing Contracts that require consent as a
result of Purchaser's purchase of the Shares, and Purchaser shall have obtained
all Authorizations necessary for the consummation of the transactions
contemplated by this Agreement. Prior to the Closing Date, the FCC shall have
issued a Final Order granting the FCC's consent to the transfer of control of
the FCC Authorizations to Purchaser without any material conditions, excepting
conditions applied on an industry-wide basis, which the Purchaser reasonably
deems to be adverse. In addition, all applicable waiting periods under the
Xxxx-Xxxxx Act (if applicable to the transactions contemplated by this
Agreement) shall have expired or been terminated and no objection shall have
been made by the Federal Trade Commission ("FTC") or the United States
Department of Justice ("DOJ"). For the purposes of this Agreement, the term
"Final Order" shall mean action by the FCC as to which (i) no request for stay
by the FCC, as applicable, of the action is pending, no such stay is in effect,
and, if any deadline for filing any such request is designated by statute or
regulation, such deadline has passed; (ii) no petition for rehearing or
reconsideration of the action is pending before the FCC and the time for filing
any such petition has passed; (iii) the FCC does not have the action under
reconsideration on its own motion and the time for such reconsideration has
passed; and (iv) no appeal to a court, or request for stay by a court, of the
FCC's action, as applicable, is pending or in effect, and, if any deadline for
filing any such appeal or request is designated by statute or rule, it has
passed.
SECTION 7.05. NO MATERIAL ADVERSE CHANGE. There shall not have been any
material adverse change in the financial condition, assets, business or
prospects of the Company, the Partnership or the Cellular System, from May 31,
1997 to the Closing; provided, however, that changes in the Partnership's
business prospects caused by or principally related to changes in governing
law, relevant regulations, the introduction of competitive service providers or
conditions affecting the industry or the local, regional or national economy
generally shall not be considered a material adverse change.
21
SECTION 7.06. NORMAL COURSE OF BUSINESS. Each of the Partnership and the
Company shall have operated its business in the normal course prior to Closing,
except as permitted or required under this agreement or the Cellular 2000
Purchase Agreement or by Purchaser in writing, including without limitation the
continuation by the Partnership of budgeted capital improvements, and shall
have continued to market the Cellular System's services in the normal course of
business and in accordance with past practices.
SECTION 7.07. OPINION OF COUNSEL TO THE COMPANY AND SELLER. Purchaser
shall have been furnished with an opinion of in-house counsel to the Company
and Seller, dated as of the Closing and addressed to Purchaser, and to any
institution designated by Purchaser which has provided financing in connection
with the transactions contemplated by this Agreement, in substantially the form
of EXHIBIT A hereto.
SECTION 7.08. RESIGNATIONS OF DIRECTORS. The Company and Seller shall
have provided to Purchaser, in a form satisfactory to Purchaser, the
resignations of each member of the Company's Board of Directors.
SECTION 7.09. CELLULAR 2000 COMPANY CLOSING. The "Closing" (as defined
in the Cellular 2000 Purchase Agreement) shall have occurred, or shall occur
simultaneously with the Closing of the transactions hereunder.
ARTICLE VIII
CONDITIONS PRECEDENT TO
THE COMPANY'S AND SELLER'S OBLIGATION TO CLOSE
The obligations of the Company and Seller under this Agreement with
respect to the sale of the Shares shall be subject to the fulfillment on or
prior to the Closing of each of the following conditions, any of which may be
waived in writing by the Company and Seller:
SECTION 8.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
THIS AGREEMENT. All of the representations and warranties by Purchaser
contained in this Agreement shall be true and correct in all material respects
at and as of the Closing. Purchaser shall have complied with and performed in
all material respects all of the agreements and covenants required by this
Agreement to be performed and complied with by it on or prior to the Closing.
The Company and Seller shall have been furnished with a certificate of an
officer of Purchaser, dated as of the Closing, certifying to the fulfillment of
the foregoing conditions.
SECTION 8.02. DIRECTORS' RESOLUTIONS. Purchaser shall deliver to the
Company and Seller copies of the resolutions of its Board of Directors
authorizing the execution, delivery and performance of this Agreement and all
instruments and documents to be delivered in connection herewith and the
transactions contemplated hereby, duly certified by an authorized officer of
Purchaser. In addition, if the transactions contemplated by this Agreement are
the subject of any action by the Board of Directors of Parent, Purchaser also
shall deliver a copy of such resolutions to the Company and Seller.
22
SECTION 8.03. INCUMBENCY CERTIFICATE. The Company and Seller shall
have received a certificate of a secretary of Purchaser, certifying as to the
genuineness of the signatures of representatives of Purchaser authorized to
take certain actions or execute any certificate, document, instrument or
agreement to be delivered pursuant to this Agreement, which incumbency
certificate shall include the true signatures of such representatives.
SECTION 8.04. FCC; XXXX-XXXXX ACT. The FCC shall have issued an order
granting the FCC's consent to the transfer of control of the FCC
Authorizations to Purchaser. In addition, all applicable waiting periods
under the Xxxx-Xxxxx Act (if applicable to the transactions contemplated by
this Agreement) shall have expired or been terminated and no objection shall
have been made by the FTC or DOJ.
SECTION 8.05. OPINION OF COUNSEL TO PURCHASER. The Company and Seller
shall have been furnished with an opinion of Xxxxxxx & Xxxxxx, counsel to
Purchaser, dated as of the Closing and addressed to the Company and Seller in
substantially the form of EXHIBIT B hereto.
SECTION 8.06. VENDOR PURCHASE AGREEMENTS. At Closing, Purchaser shall
pay Seller on behalf of the Partnership the full amount of any outstanding
amounts for equipment and services purchased by or for the benefit of the
Partnership pursuant to any agreement between Seller and any vendor or
supplier, which amounts are evidenced by the promissory notes set forth on
SCHEDULE 8.06 attached hereto (a "Seller Payable"). All security agreements
and related financing statements securing payment of such Seller Payable
shall be terminated as of the Closing. To the extent not already completed,
title to any such equipment or other assets purchased on behalf of the
Partnership shall be transferred to the Partnership as of the Closing.
SECTION 8.07. CELLULAR 2000 COMPANY CLOSING. The "Closing" (as defined
in the Cellular 2000 Purchase Agreement) shall have occurred, or shall occur
simultaneously with the Closing of the transactions hereunder.
ARTICLE IX
CASUALTY LOSSES
In the event that there shall have been suffered between the date hereof
and the Closing any casualty loss relating to the assets or properties of the
Company, the Company and Seller will promptly notify Purchaser of such event.
Seller shall, at its option, cause the Company to (i) repair, rebuild or
replace the portion of the assets, or properties damaged, destroyed or lost
prior to the Closing Date, or (ii) assign to Purchaser at Closing all claims
to insurance proceeds or other rights of the Company against third parties
arising from such casualty loss (the "Claims"); PROVIDED, HOWEVER that if
such insurance proceeds are or will not be sufficient in Purchaser's
reasonable judgment to cover the entire casualty loss, then Seller shall pay
the difference at Closing. To the extent any Claim is not assignable, such
claim may be pursued by Purchaser, for its own account and benefit, in the
name of the Company and Seller.
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ARTICLE X
INDEMNIFICATION
SECTION 10.01. INDEMNIFICATION BY SELLER. Notwithstanding the Closing,
and regardless of any investigation made at any time by or on behalf of
Purchaser or any information Purchaser may have, but subject to the terms of
this Article X, Seller agrees to indemnify and to hold Purchaser, its
shareholders, officers, directors, and employees harmless from and against
and in respect of any losses, damages, costs, expenses (including costs of
investigations and reasonable attorney fees), claims, suits, demands and
judgments suffered or incurred (each a "Loss" and collectively "Losses") by
Purchaser arising from or related to:
(i) Any Company Unrelated Liability, whether or not
known or asserted at or prior to Closing, to the extent that such
liability did not result in a reduction in the Purchase Price at
Closing pursuant to Section 2.03 hereof;
(ii) Any misrepresentation or breach of warranty in
any representation or warranty of the Company or Seller in this
Agreement, the Schedules or Exhibits hereto, or in any
certificate delivered pursuant to Section 2.03(g) or any closing
certificate delivered by the Company or Seller to Purchaser
pursuant to Article VII hereof;
(iii) Any breach or non-fulfillment of any covenant or
agreement on the part of the Company or Seller under this
Agreement to be performed on or following the Closing Date; and
(iv) Any liability or obligation of, and any claims
against, the Partnership which are for the payment of Taxes with
respect to the Partnership's operations for the period up to the
Closing Date, whether or not known or asserted at or prior to the
Closing, but only to the extent such liability did not result in
a reduction in the Purchase Price at the Closing pursuant to
Section 2.03 hereof and only to the extent of 24.982 percent of
such liabilities or obligations.
SECTION 10.02. INDEMNIFICATION BY PURCHASER. Notwithstanding the
Closing, and regardless of any investigation made at any time by or on behalf
of the Company or Seller or any information the Company or Seller may have,
but subject to the terms of this Article X, Purchaser agrees to indemnify and
to hold each of the Company and Seller, and their directors, officers,
stockholders, employees, representatives and agents, harmless from and
against and in respect of any Losses by the Company or Seller arising from or
related to:
(i) Any misrepresentation or breach of warranty in any
representation or warranty of Purchaser, in this Agreement, the
Schedules or Exhibits hereto, or in any certificate delivered
pursuant to Section 2.03(g) or
24
any closing certificate delivered by Purchaser to the Company and
Seller pursuant to Article VIII hereof;
(ii) Any breach or non-fulfillment of any covenant or
agreement on the part of Purchaser under this Agreement to be
performed on or following the Closing Date; and
(iii) Any action, suit, proceeding, demand, assessment
or judgment arising out of the termination of employees of the
Partnership after the Closing by Purchaser, except to the extent
that such termination is the result of non-compliance by the
Company, Seller or the Partnership with any representation,
warranty or covenants contained herein.
SECTION 10.03. NOTICE OF CLAIMS; DEFENSE OF THIRD PARTY CLAIMS. A
party claiming indemnification under this Article X (the "Asserting Party")
must promptly notify (in writing and in reasonable detail) the party from
which indemnification is sought (the "Defending Party") of the nature and
basis of such claim for indemnification. If such claim relates to a claim,
suit, litigation or other action by a third party against the Asserting Party
or any fixed or contingent liability to a third party (a "Third Party
Claim"), the Defending Party may elect to assume and control the defense of
the Third Party Claim at its own expense with counsel selected by the
Defending Party from and after such time as the Defending Party
unconditionally agrees in writing to accept, as against the Asserting Party,
all liabilities on account of such Third Party Claim other than the
Deductible. Assumption of such liability, as against the Asserting Party,
shall not be deemed an admission of liability as against any such third
party. Notwithstanding the foregoing, the Defending Party may not assume or
control the defense if the named parties to the Third Party Claim (including
any impleaded parties) include both the Defending Party and the Asserting
Party and representation of both parties by the same counsel (in such
counsel's reasonable determination) would be inappropriate due to actual or
potential differing interests between them, in which case the Asserting Party
shall have the right to defend the Third Party Claim and to employ counsel
reasonably approved by the Defending Party, and to the extent the matter is
determined to be subject to indemnification hereunder, the Defending Party
shall reimburse the Asserting Party for the reasonable costs of its counsel.
If the Defending Party assumes liability for the Third Party Claim as against
the Asserting Party and assumes the defense and control of the Third Party
Claim pursuant to this Section 10.03, the Defending Party shall not be liable
for any fees and expenses of counsel for the Asserting Party incurred
thereafter in connection with the Third Party Claim (except in the case of
actual or potential differing interests, as provided in the preceding
sentence), but shall not agree to any settlement of such Third Party Claim
which does not include an unconditional release of the Asserting Party by the
third party claimant on account thereof, PROVIDED that such requirement shall
be deemed waived to the extent that the Asserting Party does not undertake to
provide and promptly execute and, concurrently with the delivery of any such
release, deliver a corresponding release of the third party claimant with
respect to such Third Party Claim. If the Defending Party does not assume
liability for and the defense of the Third Party Claim pursuant to this
Section 10.03, the Asserting Party shall have the right (i) to control the
defense thereof and (ii), if the Asserting
25
Party shall have notified the Defending Party of the Asserting Party's
intention to negotiate a settlement of the Third Party Claim (at the
Defending Party's expense to the extent the matter is determined to be
subject to indemnification hereunder), which notice shall include the
material terms of any proposed settlement in reasonable detail, to settle the
Third Party Claim (at the Defending Party's expense to the extent the matter
is determined to be subject to indemnification hereunder) on terms not
materially inconsistent with those set forth in such notice, unless the
Defending Party shall have notified the Asserting Party in writing of the
Defending Party's election to assume liability for and the defense of the
Third Party Claim pursuant to this Section 10.03 within ten days after
receipt of such notice, and the Defending Party promptly thereafter shall
have taken appropriate action to implement such defense. The Asserting Party
shall not be entitled to settle any such Third Party Claim pursuant to the
preceding sentence unless such settlement includes an unconditional release
of the Defending Party by the Third party claimant on account thereof,
PROVIDED that such requirement shall be deemed waived to the extent that the
Defending Party does not undertake to provide and promptly execute and,
concurrently with delivery of any such release, deliver a corresponding
release of the third party claimant with respect to such Third Party Claim.
The Asserting Party and the Defending Party shall use all reasonable efforts
to cooperate fully with respect to the defense and settlement of any Third
Party Claim covered by this Article X.
SECTION 10.04. LIMITATIONS. The Defending Party's obligations to
indemnify the Asserting Party pursuant to this Article X shall be subject to
the following limitations:
(a) No indemnification shall be required to be made by the Defending
Party until the aggregate amount of the Asserting Party's Losses exceeds
$50,000 (the "Deductible") and then indemnification shall only be required to
be made by the Defending Party to the extent of such Losses that exceed the
Deductible; PROVIDED, HOWEVER, that the Deductible shall not be applicable to
(i) Seller's obligation to indemnify Purchaser for Company Unrelated
Liabilities, (ii) adjustments to the Purchase Price provided for in Section
2.03, (iii) a breach by Seller or the Company of its representations set
forth in Section 4.02, Section 4.04, Section 4.05, and Section 4.15, (iv) a
breach by Purchaser of any of its representations set forth in Section 5.02,
or (v) losses resulting from fraud.
(b) All representations and warranties contained in this Agreement
shall survive the Closing until the third anniversary thereof; PROVIDED,
HOWEVER, that notwithstanding the foregoing, (x) the representations and
warranties contained in Section 4.02, Section 4.04, Section 4.05, Section
4.15 and Section 5.02 shall survive the Closing for an unlimited duration and
(y) the representations and warranties contained in Sections 4.12 and 4.09
(as it may relate to Environmental Laws) shall survive the Closing until the
sixth anniversary thereof (the applicable period of survival being referred
to as the "Survival Period"). To the extent a claim is made in respect of a
representation or warranty within the applicable Survival Period, such
representation or warranty shall survive after the Survival Period for
purposes of such claim until such claim is finally determined or settled.
26
ARTICLE XI
CONFIDENTIALITY AND PRESS RELEASES
SECTION 11.01. CONFIDENTIALITY. Each party (in such capacity, a
"Recipient Party") shall hold in strict confidence all documents and
information concerning the other (in such capacity, a "Disclosing Party")
and its business and properties that is received in connection with this
Agreement and, if the transaction contemplated hereby should not be
consummated, such confidence shall be maintained, and all such documents and
information (in written form), other than this Agreement and the Schedules
and other information specifically required by this Agreement to be provided,
shall immediately thereafter be returned to the Disclosing Party. In
furtherance of the foregoing, without the express prior written consent of
the Disclosing Party, the Recipient Party shall not, directly or indirectly,
disclose, disseminate, publish, reproduce, retain, use (for its benefit or
for the benefit of others) or otherwise make available in any manner
whatsoever, any such documents or information to anyone except as provided in
Section 11.03. If the Recipient Party breaches, or threatens to commit a
breach of, any of the provisions of this Article XI, the Disclosing Party
shall have the right (in addition to any other rights and remedies available
at law or in equity) to equitable relief (including injunctions) against such
breach or threatened breach, it being acknowledged and agreed that any such
breach or threatened breach will cause irreparable harm to the Disclosing
Party and that money damages would not be an adequate remedy. The foregoing
obligations shall not apply with respect to any document or information that
(i) was rightly in the Recipient Party's possession before receipt from the
Disclosing Party, (ii) is or becomes a matter of public knowledge without
violation of this Agreement by the Receiving Party, or (iii) is disclosed by
the Disclosing Party to a third party without a duty of confidentiality upon
the third party.
SECTION 11.02. PRESS RELEASES. No press release or public disclosure,
either written or oral, of the existence or terms of this Agreement shall be
made by either Purchaser or Seller without the consent of each party subject
to the provisions of Section 11.03, and Purchaser, the Company and Seller
shall each furnish to the other advance copies of any release which it
proposes to make public concerning this Agreement or the transactions
contemplated hereby and the date upon which Purchaser, the Company or Seller,
as the case may be, proposes to make such press release.
SECTION 11.03. DISCLOSURES REQUIRED BY LAW. This Article XI shall not,
however, be construed to prohibit any party from making any disclosures to
any governmental authority that it is required to make by law or from filing
this Agreement with, or disclosing the terms of this Agreement to, any
institutional lender to such party, or prohibit the Company, Seller,
Purchaser or any of their affiliates from disclosing to its investors,
partners, accountants, auditors, attorneys, parent company and broker/dealers
such terms of this transaction as are customarily disclosed to them in
connection with the sale or acquisition of a cellular telephone system;
PROVIDED, HOWEVER, that any such party shall be informed of the confidential
nature of such information and shall agree to keep such information
confidential; and PROVIDED, HOWEVER, that each party shall provide to the
other reasonable advance copies of any public release except where the
provision of such advance notice is not permissible.
27
ARTICLE XII
TERMINATION
SECTION 12.01. BREACHES AND DEFAULTS; OPPORTUNITY TO CURE. Prior to
the exercise by a party of any termination rights afforded under this
Agreement, if either party (the "Non-Breaching Party") believes the other
(the "Breaching Party") to be in breach hereunder, the Non-Breaching Party
shall provide the Breaching Party with written notice specifying in
reasonable detail the nature of such breach, whereupon the Breaching Party
shall have 15 days from the receipt of such notice to cure such breach to the
reasonable satisfaction of the Non-Breaching Party; PROVIDED, HOWEVER, that
if such breach is curable but 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,
then the Breaching Party shall be afforded an additional twenty (20) days to
cure such breach, PROVIDED, HOWEVER, that the cure period for a breach shall
in no event extend beyond the Outside Date. If the breach is not cured
within such time period, then the Breaching Party shall be in default
hereunder and the Non-Breaching Party shall be entitled to terminate this
Agreement (as provided in Section 12.02). This right of termination shall be
in addition to, and not in lieu of, any legal or equitable remedies available
to the Non-Breaching Party. Notwithstanding the foregoing, in the event that
Seller exercises its termination rights under Section 12.02(d), Seller's only
remedy shall be reimbursements for all reasonable costs and expenses incurred
in the preparation of the transactions contemplated herein, plus a fee of two
percent (2%) of the Purchase Price.
SECTION 12.02. TERMINATION. This Agreement may be terminated and the
transactions contemplated herein may be abandoned, by written notice given to
the other party hereto, at any time prior to the Closing:
(a) by written consent of each of the Company, Seller and Purchaser;
(b) by either Purchaser or Seller, if any court of competent
jurisdiction in the United States or other United States governmental body
shall have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise permanently prohibiting the
sale of the Shares to Purchaser (which Seller and Purchaser shall have used
all reasonable efforts to have lifted or reversed) and such order, decree,
ruling or other action shall have become final and nonappealable;
(c) subject to Section 12.01, by Purchaser, if either the Company or
Seller shall have breached any of their representations herein and such
breaches, in the aggregate, would reasonably be expected to have a Material
Adverse Effect, or if the Company or Seller shall have materially breached
any of their covenants;
(d) subject to Section 12.01, by Seller, if Purchaser shall have
materially breached any of its representations or covenants herein; or
28
(e) by either Seller or Purchaser if the Closing shall not have
occurred on or before June 30, 1998 (the "Outside Date"), unless the failure
to have the Closing shall be due to the failure of the party seeking to
terminate this Agreement to perform in any material respect its obligations
under this Agreement required to be performed by it at or prior to the
Closing.
ARTICLE XIII
BROKERS' FEES
Each party represents and warrants to the other that it shall be solely
responsible for the payment of any fee or commission due to any broker or
finder it has engaged with respect to this transaction and the other party
hereto shall be indemnified for any liability with respect thereto pursuant
to Article X hereof.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. ADDITIONAL INSTRUMENTS OF TRANSFER. (a) From time to
time after the Closing, each party shall, if requested by another party,
make, execute and deliver such additional stock assignments, other
assignments, bills of sale, deeds and other instruments, as may be reasonably
necessary or proper to carry out the specific provisions of this Agreement,
including transfer to Purchaser all of Seller's right, title and interest in
and to the Shares. Such efforts and assistance shall be at the cost of the
requesting party.
SECTION 14.02. NOTICES. All notices and other communications required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been duly given if delivered, sent by telecopier, recognized overnight
delivery service or registered or certified mail, return receipt requested,
postage prepaid, to the following addresses:
(i) If to Purchaser:
00000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
with a required copy to:
Xxxxxxx & Xxxxxx
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx., Esq.
Facsimile No.: (000) 000-0000
29
(ii) If to Seller:
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Vice President, Acquisitions and Development
Facsimile No.: (000) 000-0000
with a required copy to:
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
Notices delivered personally shall be effective upon delivery against
receipt. Notices transmitted by telecopy shall be effective when received,
provided that the burden of proving notice when notice is transmitted by
telecopy shall be the responsibility of the party providing such notice.
Notices delivered by overnight mail shall be effective when received.
Notices delivered by registered or certified mail shall be effective on the
date set forth on the receipt of registered or certified mail, or 72 hours
after mailing, whichever is earlier.
SECTION 14.03. EXPENSES. Except as otherwise set forth in this
Agreement, each party shall bear its own expenses and costs, including the
fees of any corporate or FCC attorney retained by it, incurred in connection
with the preparation of this Agreement and the consummation of the
transactions contemplated hereby.
SECTION 14.04. INTENTIONALLY OMITTED.
SECTION 14.05. SPECIFIC PERFORMANCE. The parties recognize and
acknowledge that in the event a party shall fail to perform its obligations
under the terms of this Agreement, money damages alone will not be adequate
to compensate the other party. The parties, therefore, agree and acknowledge
that in the event a party fails to perform its obligations under this
Agreement prior to Closing, the other party shall be entitled, in addition to
any action for monetary damages, and any other rights and remedies on account
of such failure, to specific performance of the terms of this Agreement and
of the covenants and obligations hereunder; PROVIDED, HOWEVER, that Seller
shall be entitled to compel specific performance of the terms of this
Agreement by Purchaser only in the event the "Closing" (as defined in the
Cellular 2000 Purchase Agreement) shall have occurred.
SECTION 14.06. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Oklahoma (without
application of principles of conflicts of law).
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SECTION 14.07. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, which
consent will not be unreasonably withheld except that Purchaser shall have
the right to assign its rights, but not to delegate its duties, under this
Agreement to any institutional lender.
SECTION 14.08. SUCCESSORS AND ASSIGNS. All agreements made and entered
into in connection with this transaction shall be binding upon and inure to
the benefit of the parties hereto, their respective successors, permitted
assigns, heirs and legal representatives.
SECTION 14.09. AMENDMENTS; WAIVERS. No alteration, modification or
change of this Agreement shall be valid except by an agreement in writing
executed by the parties hereto. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder (and no course of dealing
between or among any of the parties) shall operate as a waiver of any such
right, power or privilege. No waiver of any default on any one occasion
shall constitute a waiver of any subsequent or other default. No single or
partial exercise of any such right, power or privilege shall preclude the
further or full exercise thereof.
SECTION 14.10. ENTIRE AGREEMENT. This Agreement merges all previous
negotiations and agreements between the parties hereto, either verbal or
written, and constitutes the entire agreement and understanding between the
parties with respect to the subject matter of this Agreement.
SECTION 14.11. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which when so executed shall be an original, but
all of which together shall constitute one agreement. Facsimile signatures
shall be deemed original signatures.
SECTION 14.12. SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by
law, but only as long as the continued validity, legality and enforceability
of such provision or application does not materially (a) alter the terms of
this Agreement, (b) diminish the benefits of this Agreement or (c) increase
the burdens of this Agreement, for any Person.
SECTION 14.13. SECTION HEADINGS. The section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
SECTION 14.14. INTERPRETATION. As both parties have participated in
the drafting of this Agreement, any ambiguity shall not be construed against
either party as the drafter.
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SECTION 14.15. FURTHER ASSURANCES. For a period of twelve (12) months
after Closing, Seller agrees to provide to Purchaser from time to time any
information that Seller possesses with respect to the operation of the
Business and Shares prior to the Closing which Purchaser reasonably requests
in the future in connection with Purchaser's financing efforts now or in the
future or in connection with any FCC or other regulatory filing.
SECTION 14.16. THIRD PARTIES. Nothing herein, expressed or implied, is
intended to or shall confer on any person other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
SECTION 14.17. WAIVER OF JURY TRIAL. THE PARTIES HERETO IRREVOCABLY
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM,
COUNTERCLAIM, OR CROSS CLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.
[THE REST OF THIS PAGE IS LEFT BLANK INTENTIONALLY.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its duly authorized representative as of the day and year
first above written.
PURCHASER:
XXXXXX CELLULAR OF CALIFORNIA, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Chairman
THE COMPANY:
RSA 339, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
SELLER:
AT&T WIRELESS SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
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